Civil Procedure

Civil Procedure
DIGESTED CASES
2C 2015-2016
ATTY. CHRISTIAN KIT G. VILLASIS

University of Santo Tomas
Faculty of Civil Law
CASE DIGESTS | 2C 2015 2016 | CIVIL PROCEDURE

PRISCILLA ALMA JOSE V. RAMON C. JAVELLANA, ET AL.
FACTS:
Margarita Marquez Alma Jose (Margarita) sold for consideration of P160,000.00 to

respondent Ramon Javellana by deed of conditional sale two parcels of land. They
agreed that Javellana would pay P80,000.00 upon the execution of the deed and the
balance ofP80,000.00 upon the registration of the parcels of land under the Torrens
System (the registration being undertaken by Margarita within a reasonable period
of time); and that should Margarita become incapacitated, her son and attorney-in-
fact, Juvenal M. Alma Jose(Juvenal), and her daughter, petitioner Priscilla M. Alma
Jose, would receive the payment of the balance and proceed with the application for
registration.
After Margarita died and with Juvenal having predeceased Margarita without issue,
the vendors undertaking fell on the shoulders of Priscilla, being Margaritas sole
surviving heir. However, Priscilla did not comply with the undertaking to cause the
registration of the properties under the Torrens System. Faced with Priscillas refusal
to comply, Javellana commenced an action for specific performance, injunction, and
damages against her; and that Priscilla be ordered to institute registration
proceedings and then to execute a final deed of sale in his favor. Priscilla filed a
motion to dismiss, stating that the complaint was already barred by prescription; and
that the complaint did not state a cause of action.
The RTC initially denied Priscillas motion to dismiss. However, upon her motion for
reconsideration, the RTC granted the motion to dismiss. Javellana moved for
reconsideration. The RTC denied the motion for reconsideration. Accordingly,
Javellana filed a notice of appeal. Priscilla countered that the RTC order was not
appealable; that the appeal was not perfected on time; and that Javellana was guilty
of forum shopping. It appears that pending the appeal, Javellana also filed a petition
for certiorari in the CA to assail the June 24, 1999 and June 21, 2000 orders
dismissing his complaint. The CA dismissed the petition for certiorari. As to the
notice on appeal, the CA reversed and set aside the RTC decision and remanded the
records to the RTC "for further proceedings in accordance with law." The CA denied
the motion for reconsideration filed by Priscilla.
ISSUE:
Whether or not the RTCs decision denying the motion for reconsideration of the
order of dismissal a final order and thus, appealable.
HELD: YES
The distinction between a final order and an interlocutory order is well known. The
first disposes of the subject matter in its entirety or terminates a particular
proceeding or action, leaving nothing more to be done except to enforce by execution
what the court has determined, but the latter does not completely dispose of the case
but leaves something else to be decided upon. An interlocutory order deals with
preliminary matters and the trial on the merits is yet to be held and the judgment
rendered. The test to ascertain whether or not an order or a judgment is
interlocutory or final is: does the order or judgment leave something to be done in
the trial court with respect to the merits of the case? If it does, the order or
judgment is interlocutory; otherwise, it is final. The denial of Javellanas motion for
reconsideration left nothing more to be done by the RTC because it confirmed the
dismissal of Civil Case No. 79-M-97. It was clearly a final order, not an interlocutory
one.
FREDESVINDO S. ALVERO v M.L. DE LA ROSA, et.al, G.R. No. L-286, March

29, 1946
FACTS:
On June 25, 1945 respondent Jose R. Victoriano had filed a complaint, in the Court of
First Instance of the City of Manila, against petitioner Fredesvindo S. Alvero and one
Margarita Villarica, alleging two causes of action, to wit, (1) to declare in force the
contract of sale, made on October 1, 1940, between said Jose R. Victoriano and
Margarita Villarica, of two (2) parcels of land in the Manotoc subdivision,
Balintawak, in the barrio of Calaanan, municipality of Caloocan, Province of Rizal,
with a combined area of 480 square meters, which land was subsequently sold by
said Villarica, in favor of petitioner Fredesvindo S. Alvero, on December 31, 1944, for
the sum of P100,000 in Japanese military notes; and (2) to declare said subsequent
sale null and void. On July 7, 1945, Margarita Villarica filed an answer to said
complaint, expressly admitting having sold said land to Fresdesvindo S. Alvero, for
P100,000, in December, 1944, due to the imperative necessity of raising funds with
which to provide for herself and family, and that she did not remember the previous
sale; at the same time, offering to repurchase said land from Fredesvindo S. Alvero in
the sum of P5,000, but that the latter refused to accept the offer. On July 13, 1945,
Fredesvindo S. Alvero, in answering said complaint, denied the allegations made
therein, and claimed exclusive ownership of the land in question.
Hon. Mariano L. de la Rosa, Judge of the Court of First Instance of the City of
Manila, one of the respondents in this case, on November 16, 1945, said respondent
judge rendered his decision, in which it was declared that the two (2) parcels of land
in question, with a combined area of 480 square meters had been sold by Margarita
Villarica to Jose R. Victoriano, since October 1, 1940, for the sum of P6,000, on the
condition that the purchaser should make a down payment of P1,700, and a monthly
payment of P76.86 in 120 equal monthly installments; that Jose R. Victoriano
continued making said monthly payments until December, 1941, but that owing to
the war-time conditions then existing, Margarita Villarica agreed verbally to suspend
such payments until the restoration of peace; that immediately after said sale of said
land to him, Jose R. Victoriano took possession thereof and made improvements
thereon to the amount of P800, and continued occupying said property until
December, 1944, when he abandoned the same to go to evacuation places, but
returned thereto in February, 1945; that Margarita Villarica, having forgotten the
sale of said land to Jose R. Victoriano, sold the same for P100,000 in Japanese
military notes, on December 31, 1944, to Fredesvindo S. Alvero, but afterwards
offered to repurchase said property from him, for the sum of P8,000 in genuine
Philippine currency, after liberation; that Fredesvindo S. Alvero presented the deed
of sale, executed in his favor, to the Register of Deeds of the City of Manila, on
January 3, 1945, and took possession of said property in December, 1944, but
afterwards found Jose R. Victoriano in the premises in February, 1945; that in the
contract of sale executed by Margarita Villarica, in favor of Jose R. Victoriano, it was
agreed that, upon failure of the purchaser to make payments of three (3) successive
mothly installments, the vendor would be free to sell the property again, forfeiting
the payments made, except in the case of force majeure; that there was really a
verbal agreement between Margarita Villarica and Jose Victoriano, made in
February, 1942, for the suspension of the payment of the monthly installments until
the restoration of peace; and that although Jose R. Victoriano had presented the deed
of sale, executed in his favor, to the Register of Deeds, in Pasig, Rizal, like
Fredesvindo S. Alvero, he had also failed to secure the transfer of title to his name.
And considering that Jose R. Victoriano's document was older than that of
Fredesvindo S. Alvero, and that he had taken possession of said property, since
October 1, 1940, the respondent judge rendered his decision in favor of Jose R.
Victoriano, adjudging to him the title over the property in question, including all the
improvements existing thereon, and dismissed the counterclaim.
On November 28, 1945, Fredesvindo S. Alvero was notified of said decision; and on
December 27, 1945, he filed a petition for reconsideration and new trial, which was
denied on January 3, 1946; and of said order he was notified on January 7, 1946. On
January 8, 1946, Fredesvindo S. Alvero filed his notice of appeal and record on
appeal simultaneously in the lower court, without filing the P60-appeal bond. On
January 14, 1946, Jose R. Victoriano filed a petition to dismiss the appeal, and at the
same time, asked for the execution of the judgment. On January 15, 1946,
Fredesvindo S. Alvero filed an opposition to said motion to dismiss, alleging that on
the very same day, January 15, 1946, said appeal bond for P60 had been actually
filed, and allege as an excuse, for not filing the said appeal bond, in due time, the
illness of his lawyer's wife, who died on January 10, 1946, and buried the following
day. On January 17, 1946, the respondent judge, Hon. Mariano L. de la Rosa, ordered
the dismissal of the appeal, declaring that, although the notice of appeal and record
on appeal had been filed in due time, the P60-appeal bond was filed too late. On
January 23, 1946, Fredesvindo S. Alvero filed a petition for the reconsideration of the
said order dated January 17, 1946, dismissing his appeal; and said petition for
reconsideration was denied on January 29, 1946. Hence, this petition for
certiorari.On February 11, 1946, the respondents filed their answer to the petition
for certiorari, alleging (1) that said petition is defective in form as well as in
substance; (2) that there has been no excusable negligence, on the part of the
petitioner, or grave abuse of discretion on the part of the respondent judge, in the
instant case.
ISSUE:
Whether or not the petition is defective in form as well as in substance
HELD: YES. The period for perfecting petitioners appeal commenced from
November 28, 1945, when he was notified of the judgment rendered in the case, and
expired on December 28, 1945; and, therefore, his notice of appeal and record on
appeal filed on January 8, 1946, were filed out of time, and much more so his appeal
bond, which was only filed on January 15, 1946. Failure to perfect the appeal, within
the time prescribed by the rules of court, will cause the judgment to become final,
and the certification of the record on appeal thereafter, cannot restore the
jurisdiction, which has been lost. Rules of courts, promulgated by authority of law,
have the force and effect of law.
DOMINADOR B. BUSTOS vs. ANTONIO G. LUCERO, G.R. No. L-2068,

October 20, 1948
FACTS:
Dominador Bustos, an accused in a criminal case, filed a motion with the Court of
First Instance of Pampanga after he had been bound over to that court for trial,
praying that the record of the case be remanded to the justice of the peace court of
Masantol, the court of origin, in order that the petitioner herein might cross-examine
the complainant and her witnesses in connection with their testimony, on the
strength of which warrant was issued for the arrest of the accused. The accused,
assisted by counsel, appeared at the preliminary investigation. In that investigation,
the justice of the peace informed him of the charges and asked him if he pleaded
guilty or not guilty, upon which he entered the plea of not guilty. Then his counsel
moved that the complainant present her evidence so that she and her witnesses
could be examined and cross-examined in the manner and form provided by law. The
fiscal and the private prosecutor objected, invoking section 11 of rule 108, which
provides
Evidence - which is the "the mode and manner of proving the competent facts and
circumstances on which a party relies to establish the fact in dispute in judicial
proceedings"
The objection was still sustained denying the motion for reconsideration of the
accused herein. In view thereof, the accused's counsel announced his intention to
renounce his right to present evidence, and the justice of the peace forwarded the
case to the court of first instance.
Justice Tuason citing the case of Dequito and Saling Buhay vs.Arellano, G.R. No. L-
1336: "The constitutional right of an accused to be confronted by the witnesses
against him does not apply to preliminary hearings; nor will the absence of a
preliminary examination be an infringement of his right to confront witness. As a
matter of fact, preliminary investigation may be done away with entirely without
infringing the constitutional right of an accused under the due process clause to a
fair trial."
ISSUE:
Whether or not the Section 11 of Rule 108 of the Rules of Court infringes section 13,
Article VIII, of the Constitution which deals with substantive matters and impairs
substantive rights.
HELD: NO. Section 11, Rule 108 is an adjective law and not a substantive law or
substantive right.
In this case, Justice Tuason also provided the distinctions between a substantive law
and remedial law, the former creates substantive rights and the two terms in this
respect may be said to be synonymous. Substantive right is a term which includes
those rights which one enjoys under the legal system prior to the disturbance of
normal relations. (60 C.J., 980.) Substantive law is that part of the law which creates,
defines and regulates rights, or which regulates the rights and duties which give rise
to a cause of action; that part of the law which courts are established to administer;
as opposed to adjective or remedial law, which prescribes the method of enforcing
rights or obtains redress for their invasion. (36 C. J., 27; 52 C. J. S., 1026.)
While section 11 of Rule 108 denies to the defendant the right to cross-examine
witnesses in a preliminary investigation, his right to present his witnesses remains
unaffected, and his constitutional right to be informed of the charges against him
both at such investigation and at the trial is unchanged.
It is fundamentally a procedural law. The Supreme Court that section 11 of Rule 108
does not curtail the sound discretion of the justice of the peace on the matter. Said
section defines the bounds of the defendant's right in the preliminary investigation.
The foregoing decision was rendered by a divided court. The minority went farther
than the majority and denied even any discretion on the part of the justice of the
peace or judge holding the preliminary investigation to compel the complainant and
his witnesses to testify anew. Upon the foregoing considerations, the present petition
is dismissed with costs against the petitioner.
PANAY RAILWAYS INC., v. HEVA MANAGEMENT and DEVELOPMENT
CORPORATION, PAMPLONA AGRO-INDUSTRIAL CORPORATION, and
SPOUSES CANDELARIA DAYOT and EDMUNDO DAYOT, G. R. No. 154061,
January 25, 2012
FACTS :
Panay Railways, Inc. (PRI) (petitioner) entered into a Real Estate Mortgage with
Traders Royal Bank (TRB) for a loan amounting to P20,000,000.00. The Real Estate
Mortgage covers several parcels of land which includes Lot No. 6153. Petitioner
excluded certain portions of Lot No. 6153: that already sold to Shell Co., Inc.
referred to as 6153-B, a road referred to as 6153-C, and a squatter area known as
6153-D.
Due to PRIs failure to pay it obligations, the properties were extrajudicially

foreclosed by the TRB. A Certificate of Sale was issued in favor of the bank as the
highest bidder and purchaser. Consequently, the sale of Lot No. 6153 was registered
with the Register of Deeds on 28 January 1986 and annotated at the back of the
transfer certificates of title (TCT) covering the mortgaged properties. Thereafter,
TRB caused the consolidation of the title in its name on the basis of a Deed of Sale
and an Affidavit of Consolidation after petitioner failed to exercise the right to
redeem the properties. The corresponding TCTs were subsequently issued in the
name of the bank.
On 12 February 1990, TRB filed a Petition for Writ of Possession against petitioner.
During the proceedings, petitioner, through its duly authorized manager and officer-
in-charge and with the assistance of counsel, filed a Manifestation and Motion to
Withdraw Motion for Suspension of the Petition for the issuance of a writ of
possession. The pertinent portions of the Manifestation and Motion state:
xxxxxxxxx
4. That PRI recognizes and acknowledges petitioner (TRB) to be the registered

owner of Lot 1-A; Lot 3834; Lot 6153; Lot 6158; Lot 6159, and Lot 5 covered by TCT
No. T-84233; T-84234; T-84235; T-84236; T-84237, T-84238 and T-45724 respectively,
free of liens and encumbrances, except that portion sold to Shell Co. found in Lot 5.
That Petitioner (TRB) as registered owner is entitled to peaceful ownership and
immediate physical possession of said real properties.
xxxxxxxxxxx
It was only in 1994 that petitioner realized that the extrajudicial foreclosure included
some excluded properties in the mortgage contract. Thus, on 19 August 1994, it filed
a Complaint for Partial Annulment of Contract to Sell and Deed of Absolute Sale with
Addendum; Cancellation of Title No. T-89624; and Declaration of Ownership of Real
Property with Reconveyance plus Damages.
Meanwhile, respondents filed their respective Motions to Dismiss on these grounds:
(1) petitioner had no legal capacity to sue; (2) there was a waiver, an abandonment
and an extinguishment of petitioners claim or demand; (3) petitioner failed to state a
cause of action; and (4) an indispensable party, namely TRB, was not impleaded.
On 18 July 1997, the RTC issued an Order granting the Motion to Dismiss of
respondents. It held that the Manifestation and Motion filed by petitioner was a
judicial admission of TRBs ownership of the disputed properties. The trial court
pointed out that the Manifestation was executed by petitioners duly authorized
representative with the assistance of counsel. This admission thus operated as a
waiver barring petitioner from claiming otherwise.
On 11 August 1997, petitioner filed a Notice of Appeal without paying the necessary
docket fees. Immediately thereafter, respondents filed a Motion to Dismiss Appeal on
the ground of nonpayment of docket fees.
On 18 July 1997, the RTC issued an Order granting the Motion to Dismiss of
respondents. It held that the Manifestation and Motion filed by petitioner was a
judicial admission of TRBs ownership of the disputed properties. The trial court
pointed out that the Manifestation was executed by petitioners duly authorized
representative with the assistance of counsel. This admission thus operated as a
waiver barring petitioner from claiming otherwise.
In its Opposition, petitioner alleged that its counsel was not yet familiar with the
revisions of the Rules of Court that became effective only on 1 July 1997. Its
representative was likewise not informed by the court personnel that docket fees
needed to be paid upon the filing of the Notice of Appeal. Furthermore, it contended
that the requirement for the payment of docket fees was not mandatory. It therefore
asked the RTC for a liberal interpretation of the procedural rules on appeals.
On 29 September 1997, the RTC issued an Order dismissing the appeal citing Sec. 4
of Rule 41 of the Revised Rules of Court.
Petitioner thereafter moved for a reconsideration of the Order alleging that the trial
court lost jurisdiction over the case after the former had filed the Notice of Appeal.
Petitioner also alleged that the court erred in failing to relax procedural rules for the
sake of substantial justice.
On 25 November 1997, the RTC denied the Motion.
On 28 January 1998, petitioner filed with the Court of Appeals (CA) a Petition for
Certiorari and Mandamus under Rule 65 alleging that the RTC had no jurisdiction to
dismiss the Notice of Appeal, and that the trial court had acted with grave abuse of
discretion when it strictly applied procedural rules.
On 29 November 2000, the CA rendered its Decision on the Petition. It held that
while the failure of petitioner to pay the docket and other lawful fees within the
reglementary period was a ground for the dismissal of the appeal pursuant to Sec. 1
of Rule 50 of the Revised Rules of Court, the jurisdiction to do so belonged to the CA
and not the trial court. Thus, appellate court ruled that the RTC committed grave
abuse of discretion in dismissing the appeal and set aside the latters assailed Order
dated 29 September 1997.
Thereafter, respondents filed their respective Motions for Reconsideration.
It appears that prior to the promulgation of the CAs Decision, this Court issued
Administrative Matter (A.M.) No. 00-2-10-SC which took effect on 1 May 2000,
amending Rule 4, Sec. 7 and Sec. 13 of Rule 41 of the 1997 Revised Rules of Court.
The circular expressly provided that trial courts may, motu proprio or upon motion,
dismiss an appeal for being filed out of time or for nonpayment of docket and other
lawful fees within the reglementary period. Subsequently, Circular No. 48-2000 was
issued on 29 August 2000 and was addressed to all lower courts.
By virtue of the amendment to Sec. 41, the CA upheld the questioned Orders of the
trial court by issuing the assailed Amended Decision in the present Petition granting
respondents Motion for Reconsideration.
The CAs action prompted petitioner to file a Motion for Reconsideration alleging that
SC Circular No. 48-2000 should not be given retroactive effect. It also alleged that
the CA should consider the case as exceptionally meritorious. Petitioners counsel,
Atty. Rexes V. Alejano, explained that he was yet to familiarize himself with the
Revised Rules of Court, which became effective a little over a month before he filed
the Notice of Appeal. He was thus not aware that the nonpayment of docket fees
might lead to the dismissal of the case.
On 30 May 2002, the CA issued the assailed Resolution denying petitioners Motion
for Reconsideration.
ISSUE/S:
1. WON the CA erred in sustaining the RTCs dismissal of the Notice of Appeal
HELD: NO.
Statutes and rules regulating the procedure of courts are considered applicable to
actions pending and unresolved at the time of their passage. Procedural laws and
rules are retroactive in that sense and to that extent. The effect of procedural
statutes and rules on the rights of a litigant may not preclude their retroactive
application to pending actions. This retroactive application does not violate any right
of a person adversely affected. Neither is it constitutionally objectionable. The reason
is that, as a general rule, no vested right may attach to or arise from procedural laws
and rules. It has been held that a person has no vested right in any particular
remedy, and a litigant cannot insist on the application to the trial of his case, whether
civil or criminal, of any other than the existing rules of procedure. More so when, as
in this case, petitioner admits that it was not able to pay the docket fees on time.
Clearly, there were no substantive rights to speak of when the RTC dismissed the
Notice of Appeal.
The argument that the CA had the exclusive jurisdiction to dismiss the appeal has no
merit. When this Court accordingly amended Sec. 13 of Rule 41 through A.M. No. 00-
2-10-SC, the RTCs dismissal of the action may be considered to have had the
imprimatur of the Court. Thus, the CA committed no reversible error when it
sustained the dismissal of the appeal, taking note of its directive on the matter prior
to the promulgation of its Decision.
As early as 1932, in Lazaro v. Endencia, we have held that the payment of the full
amount of the docket fees is an indispensable step for the perfection of an appeal.
The Court acquires jurisdiction over any case only upon the payment of the
prescribed docket fees.

Moreover, the right to appeal is not a natural right and is not part of due process. It
is merely a statutory privilege, which may be exercised only in accordance with the
law.
We have repeatedly stated that the term substantial justice is not a magic wand that
would automatically compel this Court to suspend procedural rules. Procedural rules
are not to be belittled or dismissed simply because their non-observance may result
in prejudice to a partys substantive rights. Like all other rules, they are required to
be followed, except only for the most persuasive of reasons when they may be
relaxed to relieve litigants of an injustice not commensurate with the degree of their
thoughtlessness in not complying with the procedure prescribed.
We cannot consider counsels failure to familiarize himself with the Revised Rules of
Court as a persuasive reason to relax the application of the Rules. It is well-settled
that the negligence of counsel binds the client. This principle is based on the rule
that any act performed by lawyers within the scope of their general or implied
authority is regarded as an act of the client. Consequently, the mistake or negligence
of the counsel of petitioner may result in the rendition of an unfavorable judgment
against it.
FELIX MARTOS, JIMMY ECLANA, RODEL PILONES, RONALDO NOVAL,

JONATHAN PAILAGO, ERNESTO MONTANO, DOYONG JOSE, DEO
MAMALATEO, ROSELO MAGNO, BONNIE SANTILLAN, ARSENIO GONZALES,
ALEX EDRADAN, MICHAEL ERASCA, MARLON MONTANO, VICENTE
OLIVEROS, REYNALDO LAMBOSON, DOMINGO ROTA, EDDIE ROTA, ZALDY
OLIVEROS, ANTONIO NATIL, HERMIE BUISON, ROGER BUISON, MARIANO
LAZATE, JUAN VILLABER, LIMUEL LLANETA, LITO BANTILO, TERSO GARAY,
ROWEL BESTOLO, JERRY YORTAS, PASTOR PANTIG, GAVINO NICOLAS,
RAFAEL VILLA, FELIX YORTAS, MELVIN GARAY, NEIL DOMINGUEZ
REYNALDO EVANGELISTA, JR., JOSE RAMOS, ELVIN ROSALES, JUN
GRANEHO, DANNY ASPARES, SALVEDOR TONLOC, ROLANDO
EVANGELISTA, RICKY M. FRANCISCO, EDUARDO ALEGRIA, SALVADOR
SANTOS, GREG BISONIA, RUFO CARBILLO, MARVIN MONTERO, DANILO
BESSIRE, ALLAN CABALLERO, ORLANDO LIMOS, EDGARDO BICLAR,
MANDY MAMALATEO, ALFRED GAJO, ERIC CASTRENCE, ANTHONY MOLINA
JAIME SALIM, ROY SILVA, DANIKO BEGORIE, PEPING CELISANA, ERIC
RONDA, RUFI CARBANILLO, ROWEL BATA, RICARDI TOLENTINO, ARNEL
ARDINEZ, FERDINAND R. ARANDIA, ROMEO R. GARBO, ANTONIO ROTA,

REYNIELANDRE QUINTANILLA, JOSELITO HILARIO, JIMMY CAMPANA,
DANILO LIDO-AN, EMERSON PENAFLOR, CESAR PABALINAS, JONATHAN
MELCHOR, ALEX DAVID, EUTIQUIO ALCALA, MICHAEL CARANDANG,
EDUARDO MANUEL, RAMON EVANGELISTA, RUBEN MENDOZA, ERNESTO
MENDOZA, RICKY RAMOS, ROBERTO NOVELLA RUBEN CONDE, DANILO
POLISTICO, DOMINGMMENDOZA, FERNANDO SAN GABRIEL, AND
DOMINGO ROTO,
G.R. No. 192650, October 24, 2012
FACTS:
Questioned in this Petition for Review is the July 31, 2009 Decision of the CA and its
June 17, 2010 Resolution, which reversed and set aside the July 30, 2008 Decision
and October 28, 2008, Resolution of the NLRC; and reinstated the May 23, 2003
Decision of the Labor Arbiter (LA). The dispositive portion of the CA Decision reads:
WHEREFORE, decision is hereby rendered, as follows:

1. Declaring the complainant Felix Martos was illegally dismissed and ordering
respondent New San Jose Builders, Inc. to pay him his separation pay, backwages,
salary differentials, 13th month pay, service incentive leave pay, and attorneys fees
in the total amount of TWO HUNDRED SIXTY THOUSAND SIX HUNDRED SIXTY
ONE PESOS and 50/1000 (P260, 661.50).
The awards for separation pay, backwages and the corresponding attorneys fees are
subject to further computation until the decision in this case becomes final and
executory; and
2. Dismissing the complaints/claim of the other complainants without prejudice.
SO ORDERED.
New San Jose Builders, Inc. (hereafter petitioner) is a domestic corporation duly
organized and existing under the laws of the Philippines and is engaged in the
construction of road, bridges, buildings, and low cost houses primarily for the
government. One of the projects of petitioner is the San Jose Plains Project (SJPP),
located in Montalban, Rizal. SJPP, which is also known as the "Erap City" calls for the
construction of low cost housing, which are being turned over to the National
Housing Authority (NHA) to be awarded to deserving poor families.
Private respondents alleged that, on various dates, petitioner hired them on different
positions, hereunder specified:
Names Date Employed Date Dismissed
1. Felix Martos October 5, 1998 February 25, 2002
2. Jimmy Eclana 1999 July 2001
3. Rodel Pilones February 1999 July 2001
4. Ronaldo Noval
5. Jonathan Pailago
6. Ernesto Montao 1998 2000
7. Doyong Jose 1996 July 2001
8. Deo Mamalateo 1999 July 2001
9. Roselo Magno 1994 November 2000
10. Bonnie Santillan 1998 July 2001
11. Arsenio Gonzales 1998 July 2001
12. Alex Edradan 1998 November 2001
13. Michael Erasca 1999 July 2001
14. Marlon Montao 1998 July 2001
15. Vicente Oliveros April 5, 1998 July 2001
16. Reynaldo Lamboson 1999 July 2001
17. Domingo Rota 1998
18. Eddie Rota 1998
19. Zaldy Oliveros 1999 July 2001
20. Antonio Natel 1998 July 2001
21. Hermie Buison 1998 July 2001
22. Roger Buison 1998 2000
23. Mariano Lazate February 19, 1995
24. Juan Villaber January 10, 1997
25. Limuel Llaneta March 5, 1994
26. Lito Bantilo May 1987
27. Terso Garay October 3, 1986
28. Rowel Bestolo February 6, 1999
29. Jerry Yortas May 1994
30. Pastor Pantig April 11,1998
31. Gavino Nicolas June 20, 1997
32. Rafael Villa March 9, 1998
33. Felix Yortas 1992
34. Melvin Garay February 2, 1994
35. Neil Dominguez February 16, 1998
36. Reynaldo Evangelista, Jr. October 10, 1998
37. Jose Ramos October 10, 1998
38. Elvis Rosales June 14, 1998
39. Jun Graneho January 15, 1998
40. Danny Espares April 1999
41. Salvador Tonloc January 8, 1998
42. Rolando Evangelista March 15, 1998
43. Ricky M. Francisco September 28, 1991
44. Eduardo Alegria May 2001
45. Salvador Santos September 22, 2000
46. Greg Bisonia March 28, 1993
47. Rufo Carbillo March 28, 1993
48. Marvin Montero 1997 January 2001
49. Danilo Bessiri 1997 2002
50. Allan Caballero 1997 2002
51. Orlando Limos 1997 July 2001
52. Edgardo Biclar 1997 July 2001
53. Mandy Mamalatco 1989 2002
54. Alfred Gajo 1998 July 2001
55. Eric Castrence 1988 2002
56. Anthony Molina 1997 2002
57. Jaime Salin
58. Roy Silva 1997 2002
59. Danilo V. Begorie 1994 January 2001
60. Peping Celisana 1999 July 2001
61. Eric Ronda 1998 July 2001
62. Rufo Carbanillo 1998 July 2001
63. Rowel Batta 1999 July 2001
64. Ricardo Tolentino 1997 July 2001
65. Arnel Ardinez 1998 July 2001
66. Ferdinand P. Arandia 1998 1999
67. Romeo R. Garbo 1998 2000
68. Antonio Rota 1998 July 2001
69. Reynielande Quintanilla Feb. 28, 1998 2002
70. Joselito Hilario 1998 2002
71. Jimmy Campana August 15, 1998 August 2001
72. Danilo Lido-An September 8, 1998
73. Emerson Peaflor August 8,1998
74. Cesar Pabalinas
75. Jonathan Melchor November 1998
76. Alex David 1998
77. Eutiquio Alcala December 1999
78. Michael Carandang June 2000
79. Eduardo Nanuel October 1999
80. Ramon Evangelista Feb. 15, 1998
81. Ruben Mendoza 1999 July 2001
82. Ernesto A. Mendoza 1998 July 2001
83. Ricky Ramos 1999 July 2001
84. Roberto Novella 1998 July 2001
85. Ruben Conde 1998 July 2001
86. Ramon Evangelista 1997 July 2001
87. Danilo Polistico 1999 July 2001
88. Domingo Mendoza 1999 July 2001
89. Fernando San Gabriel 1999 July 2001
90. Domingo Roto 1994 July 2001
Sometime in 2000, petitioner was constrained to slow down and suspend most of the
works on the SJPP project due to lack of funds of the NHA. Thus, the workers were
informed that many of them [would] be laid off and the rest would be reassigned to
other projects. Juan Villaber, Terso Garay, Rowell Batta, Pastor Pantig, Rafael Villa,
and Melvin Garay were laid off. While on the other hand, Felix Martos, Ariel
Dominguez, Greg Bisonia, Allan Caballera, Orlando Limos, Mandy Mamalateo, Eric
Castrence, Anthony Molina, and Roy Silva were among those who were retained and
were issued new appointment papers to their respective assignments, indicating
therein that they are project employees. However, they refused to sign the
appointment papers as project employees and subsequently refused to continue to
work.
On different dates, three (3) Complaints for Illegal Dismissal and for money claims
were filed before the NLRC against petitioner and Jose Acuzar, by private
respondents who claimed to be the former employees of petitioner, to wit:
1. Complaint dated March 11, 2002, entitled "Felix Martos, et al. vs. NSJBI",
docketed as NLRC-NCR Case No. 03-01639-2002;
2. Complaint dated July 9, 2002, entitled "Jimmy Campana, et al. vs. NSJBI,"
docketed as NLRC-NCR Case No. 07-04969-2002;
3. Complaint dated July 4, 2002, entitled "Greg Bisonia, et al. vs. NSJBI", docketed as
NLRC-NCR Case No. 07-02888-2002.
Petitioner denies that private respondents were illegally dismissed, and alleged that
they were project employees, whose employments were automatically terminated
upon completion of the project for which they were hired. On the other hand, private
respondents claim that petitioner hired them as regular employees, continuously and
without interruption, until their dismissal on February 28, 2002.
Subsequently, the 3 Complaints were consolidated and assigned to Labor Arbiter

Facundo Leda.
On May 23, 2003, the LA handed down a decision declaring, among others, that
petitioner Felix Martos (Martos) was illegally dismissed and entitled to separation
pay, backwages and other monetary benefits; and dismissing, without prejudice, the
complaints/claims of the other complainants (petitioners).
Both parties appealed the LA decision to the NLRC. Petitioners appealed that part
which dismissed all the complaints, without prejudice, except that of Martos. On the
other hand, New San Jose Builders, Inc. (respondent) appealed that part which held
that Martos was its regular employee and that he was illegally dismissed. On July 30,
2008, the NLRC resolved the appeal by dismissing the one filed by respondent and
partially granting that of the other petitioners. The dispositive portion of the NLRC
decision reads as follows:
WHEREFORE, premises considered, respondents appeal is DISMISSED for lack of
merit. The appeal of the complainants is, however, PARTIALLY GRANTED by
modifying the 23 May 2003 Decision of the Labor Arbiter Facundo L. Leda, in that,
respondents are ordered to reinstate all the complainants to their former positions,
without loss of seniority rights and with full backwages, counted from the time their
compensation was withheld from them until actual reinstatement. Respondents are
likewise ordered to pay complainants their salary differentials, service incentive
leave pay, and 13th month pay, using, as basis, the computation made on the claims
of complainant Felix Martos. In all other aspects, the Decision is AFFIRMED.
SO ORDERED.
After the denial of its motion for reconsideration, respondent filed before the CA a
petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, as
amended, raising the following issues:
I) The public respondent has committed grave abuse of discretion in holding that the
private respondents were regular employees and, thus, have been illegally dismissed.
II) The public respondent has committed grave abuse of discretion in reviving the
complaints of the other private respondents despite their failure to verify the same.
III) The public respondent has committed grave abuse of discretion when it upheld
the findings of the Labor Arbiter granting relief in favor of those supposed
complainants who did not even render service to the petitioner and, hence, are not
on its payroll.
On July 31, 2009, the CA rendered a decision reversing and setting aside the July 30,
2008 Decision and the October 28, 2008 Resolution of the NLRC and reinstating the
May 23, 2003 Decision of the LA. The dispositive portion of the CA decision reads:
WHEREFORE, premises considered, the present petition is hereby GRANTED.
Accordingly, the assailed Resolution dated October 28, 2008 of public respondent
National Labor Relations Commission is REVERSED and SET ASIDE, and the
Decision dated May 23, 2003 of Labor Arbiter Facundo L. Leda, is hereby ordered
reinstated.
SO ORDERED.
The CA explained that the NLRC committed grave abuse of discretion in reviving the
complaints of petitioners despite their failure to verify the same. Out of the 102
complainants, only Martos verified the position paper and his counsel never offered
any explanation for his failure to secure the verification of the others. The CA also
held that the NLRC gravely abused its discretion when it took cognizance of
petitioners appeal because Rule 41, Section 1(h) of the 1997 Rules of Civil
Procedure, as amended, which is suppletory, provides that no appeal may be taken
from an order dismissing an action without prejudice.
Nevertheless, the CA stated that the factual circumstances of Martos employment

and his dismissal from work could not equally apply to petitioners because they were
not similarly situated. The NLRC did not even bother to look at the evidence on
record and inappropriately granted monetary awards to petitioners who had either
denied having filed a case or withdrawn the case against respondent. According to
the CA, the position papers should have covered only those claims and causes of
action raised in the complaint excluding those that might have been amicably settled.
With respect to Martos, the CA ruled that he was a regular employee of respondent
and his termination was illegal. It explained that Martos should have been
considered a regular employee because there was no indication that he was merely a
project employee when he was hired. To show otherwise, respondent should have
presented his employment contract for the alleged specific project and the
successive employment contracts for the different projects or phases for which he
was hired. In the absence of such document, he could not be considered such an
employee because his work was necessary and desirable to the respondents usual
business and that he was not required to sign any employment contract fixing a
definite period or duration of his engagement. Thus, Martos already attained the
status of a regular employee. Moreover, the CA noted that respondent did not report
the termination of Martos supposed project employment to the Department of Labor
and Employment (DOLE), as required under Department Order No. 19.
Being a regular employee, the CA concluded that he was constructively dismissed

when he was asked to sign a new appointment paper indicating therein that he was a
project employee and that his appointment would be co-terminus with the project.
Position of Petitioners
Petitioners basically argue that the CA was wrong in affirming the dismissal of their
complaints due to their failure to verify their position paper. They insist that the lack
of verification of a position paper is only a formal and not a jurisdictional defect.
Hence, it was not fatal to their cause of action considering that the CA could have
required them to submit the needed verification. The CA overlooked the fact that all
of them verified their complaints by declaring under oath relevant and material facts
such as their names, addresses, employment status, salary rates, facts, causes of
action, and reliefs common to all of them. The information supplied in their
complaints is sufficient to prove their status of employment and entitlement of their
monetary claims. In the adjudication of labor cases, the adherence to stringent
technical rules may be relaxed in the interest of the working man. Moreover,
respondent failed to adduce evidence of payment of their money claims. Finally,
petitioners argue that they and Martos were similarly situated. The award of
separation pay instead of reinstatement to an illegally dismissed employee was
improper because the strained relations between the parties was not clearly
established. Moreover, they are entitled to actual, moral and exemplary damages for
respondents illegal act of violating labor standard laws, the minimum wage law and
the 13th month pay law.
Position of Respondents

On the other hand, respondent principally counters that the CA and the LA 1) did not
err in dismissing the complaints of the 88 petitioners who failed to verify their
position paper, without prejudice; 2) correctly ruled that Martos and the 88
petitioners concerned were not entitled to reinstatement; and 3) correctly ruled that
petitioners were not entitled to an award of actual, moral and exemplary damages.
Petitioners have the propensity to disregard the mandatory provisions of the 2005
Revised Rules of Procedure of the NLRC (NLRC Rules) which require the parties to
submit simultaneously their verified position papers with supporting documents and
affidavits. In the proceedings before the LA, the complaints of the 99 workers were
dismissed because they failed to verify or affix their signatures to the position paper
filed with the LA.
While it is true that the NLRC Rules must be liberally construed and that the NLRC
is not bound by the technicalities of law and procedure, it should not be the first to
arbitrarily disregard specific provisions of the rules which are precisely intended to
assist the parties in obtaining just, expeditious and inexpensive settlement of labor
disputes. It was only Felix Martos who verified their position paper and their
memorandum of appeal. It was only he alone who was vigilant in looking after his
interest and enforcing his rights. Petitioners should be considered to have waived
their rights and interests in the case for their consistent neglect and passive attitude.
Moreover, Martos was never authorized by any of his fellow complainants through a
special power of attorney or other document in the proceedings to represent them
before the LA and the NLRC. His acts and verifications were made only in his own
personal capacity and did not bind or benefit petitioners. There is only one logical
reason why a majority of them failed to verify their position paper, their appeal and
now their petition: they were not in any way employees of the respondent. They were
total strangers to the respondent. They even refused to identify themselves during
the proceedings by their failure to appear thereat. Hence, it is too late for the others
to participate in the fruits, if any, of this litigation.
Finally, the reinstatement being sought by Martos and the others was no longer
practicable because of the strained relation between the parties. Petitioners can no
longer question this fact. This issue was never raised or taken up on appeal before
the NLRC. It was only when the petitioners lost in the appeal in the CA that they first
raised the issue of strained relation. Moreover, no proof of actual damages was
presented by the petitioners. There is no clear and convincing evidence on record
showing that the termination of an employees services had been carried out in an
arbitrary, capricious or malicious manner.
ISSUES:
(1) Whether or not the CA was correct in dismissing the complaints filed by those
petitioners who failed to verify their position papers; and
(2) Whether or not Martos should be reinstated.
HELD:
(1) Yes. The Court agrees with the respondent.
Sections 4 and 5 of Rule 7 of the 1997 Rules of Civil Procedure provide: SEC. 4.
Verification. Except when otherwise specifically required by law or rule, pleadings
need not be under oath, verified or accompanied by affidavit.

A pleading is verified by an affidavit that the affiant has read the pleadings and that
the allegations therein are true and correct of his personal knowledge or based on
authentic records. A pleading required to be verified which contains a verification
based on "information and belief" or upon "knowledge, information and belief" or
lacks a proper verification, shall be treated as an unsigned pleading.
SEC. 5. Certification against forum shopping. The plaintiff or principal party shall
certify under oath in the complaint or other initiatory pleading asserting a claim for
relief, or in a sworn certification annexed thereto and simultaneously filed therewith:
(a) that he has not theretofore commenced any action or filed any claim involving the
same issues in any court, tribunal or quasi-judicial agency and, to the best of his
knowledge, no such other action or claim is pending therein; (b) if there is such other
pending action or claim, a complete statement of the present status thereof; and (c)
if he should thereafter learn that the same or similar action or claim has been filed or
is pending, he shall report that fact within five (5) days therefrom to the court
wherein his aforesaid complaint or initiatory pleading has been filed.
Failure to comply with the foregoing requirements shall not be curable by mere
amendment of the complaint or other initiatory pleading but shall be cause for the
dismissal of the case without prejudice, unless otherwise provided, upon motion and
after hearing. The submission of a false certification or non-compliance with any of
the undertakings therein shall constitute indirect contempt of court, without
prejudice to the corresponding administrative and criminal actions. If the acts of the
party or his counsel clearly constitute willful and deliberate forum shopping, the
same shall be ground for summary dismissal with prejudice and shall constitute
direct contempt, as well as a cause for administrative sanctions. x x x. [Emphases
supplied]
The verification requirement is significant, as it is intended to secure an assurance

that the allegations in the pleading are true and correct and not the product of the
imagination or a matter of speculation, and that the pleading is filed in good faith.
Verification is deemed substantially complied with when, as in this case, one who has
ample knowledge to swear to the truth of the allegations in the complaint or petition
signs the verification, and when matters alleged in the petition have been made in
good faith or are true and correct.
The absence of a proper verification is cause to treat the pleading as unsigned and
dismissible. The lone signature of Martos would have been sufficient if he was
authorized by his co-petitioners to sign for them. Unfortunately, petitioners failed to
adduce proof that he was so authorized.
The liberal construction of the rules may be invoked in situations where there may be
some excusable formal deficiency or error in a pleading, provided that the same does
not subvert the essence of the proceeding and it at least connotes a reasonable
attempt at compliance with the rules. Besides, fundamental is the precept that rules
of procedure are meant not to thwart but to facilitate the attainment of justice;
hence, their rigid application may, for deserving reasons, be subordinated by the
need for an apt dispensation of substantial justice in the normal course. They ought
to be relaxed when there is subsequent or even substantial compliance, consistent
with the policy of liberality espoused by Rule 1, Section 6.14 Not being inflexible, the
rule on verification allows for such liberality.

Considering that the dismissal of the other complaints by the LA was without
prejudice, the other complainants should have taken the necessary steps to rectify
their procedural mistake after the decision of the LA was rendered. They should have
corrected this procedural flaw by immediately filing another complaint with the
correct verification this time. Surprisingly, they did not even attempt to correct this
technical blunder. Worse, they committed the same procedural error when they filed
their appeal16 with the NLRC. Under the circumstances, the Court agrees with the
CA that the dismissal of the other complaints were brought about by the own
negligence and passive attitude of the complainants themselves.
Most probably, as the list submitted is not complete with the information as to when
each started and when each was dismissed there must be some truth in the claim of
respondent that those complainants who failed to affix their signatures in the
verification were either not employees of respondent at all or they simply refused to
prosecute their complaints. In its position paper, respondent alleged that, aside from
the 4 complainants who withdrew their complaints, only 17 out of the more or less
104 complainants appeared on its records as its former project employees or at least
known by it to have worked in one of its construction projects. From the sworn
statements executed by Felix Yortas, Marvin Batta, Lito Bantillo, Gavino Felix
Nicolas,nand Romeo Pangacian Martos, they already withdrew their complaints
against respondent. Their status and cause of action not being clear and proven, it is
just not right that these complaints be considered as similarly situated as Martos and
entitled to the same benefits.
(2) No. The Court agrees that the reinstatement being sought by him was no longer
practicable because of strained relation between the parties. Indeed, he can no
longer question this fact. This issue was never raised or taken up on appeal before
the NLRC. It was only after he lost the appeal in the CA that he raised it.
Thus, the Court deems it fair to award separation pay in lieu of reinstatement. In
addition to his separation pay. Martos is also entitled to payment of full backwages,
13th month pay, service incentive leave pay, and attorneys fees.
The accepted doctrine is that separation pay may avail in lieu of reinstatement if
reinstatement is no longer practical or in the best interest of the parties. Separation
pay in lieu of reinstatement may likewise be awarded if the employee decides not to
be reinstated. Under the doctrine of stained relations, the payment of separation pay
is considered an acceptable alternative to reinstatement when the latter opinion is
no longer desirable or viable. On one hand, such payment liberates the employee
from what could be highly oppressive work environment. On the other hand, it
release the employer from the grossly unpalatable obligation of maintaining in its
employ a worker it could no longer trust.
WHEREFORE, the petition is DENIED.
SO ORDERED
Maria Consolacion Rivera-Pascual v.Sps. Marilyn Lim and George Lim and
the Registry of Deeds of Valenzuela City, G.R. No. 191837, September 19,
2012

Facts:
The present controversy involves a parcel of land located in Valenzuela City

registered under the name of the Spouses Lim (or private respondents). On
September 2004, the petitioner filed before the Office of the Regional Agrarian
Reform (RARAD) for Region IV-A a petition to be recognized as a tenant of a property
located in Valenzuela City against one Deato. At that time, the property was under
Deatos name. During the pendency of the petition, Deato sold the property to
Spouses Lim. The sale was registered on December 2004 leading to the issuance of a
TCT in favor of the private respondents. Thus, the petitioner filed a motion on March
2005 to implead the Spouses Lim.
On December 2005, the petition was granted by the Regional Adjudicator (RA). The
dispositive portion of the decision includes, inter alia, that the petitioner is the
tenant of the subject land by succession from her deceased father and that she
should be subrogated to the rights of the private respondents. The judgment of the
RA became final. Thus, Consolacion filed a motion for execution to which a writ of
execution was issued by the RA on January 2008. Seven days after, the petitioner
filed a petition against the private respondents and the Registrar of Deeds praying
for the issuance of an order directing Spouses Lim to accept the amount of
P10million which she undertook to tender, declare the property redeemed and cancel
the TCT.
RARAD: The petition was given due course by the RA, the dispositive portion of the
decision stating that the property is lawfully redeemed, ordering the private
respondents to accept the amount consigned with the DARAB, execute a deed of
redemption in favor of the petitioner and directing the RD to cancel the TCT
registered in the name of the private respondents and issue a new one in favor of the
petitioner.
DARAB: The decision of RARAD was reversed. Consolacion moved for
reconsideration which the DARAB denied.
CA: Consolacion filed a petition for review under Rule 43 of the Rules of Court. The
CA did not give due course to the petition due to the following technical grounds: a)
failure of counsel to indicate in the petition his MCLE Certificate of Compliance or
Exemption Number and b) the jurat of Consolacions verification and certification
against non-forum-shopping failed to indicate any competent evidence of
Consolacions identity apart from her community tax certificate. She moved for
reconsideration but was denied.
Issue:
WON the petition should be denied due to the unexplained failure to comply with
basic procedural requirements of the Rules of Court.
Held: Yes, the petition should be denied.
Consolacion and her counsel claimed inadvertence and negligence but they did not
explain the circumstances thereof. Absent valid and compelling reasons, the
requested leniency and liberality in the observance of procedural rules appears to be
an afterthought, hence, cannot be granted. The CA saw no compelling need meriting
the relaxation of the rules. Neither did the Court see any. The Court is aware of the
exceptional cases where technicalities were liberally construed. However, in these
cases, outright dismissal is rendered unjust by the presence of a satisfactory and
persuasive explanation. The parties therein who prayed for liberal interpretation
were able to hurdle that heavy burden of proving that they deserve an exceptional
treatment. It was never the Courts intent to forge a bastion for erring litigants to
violate the rules with impunity. This Court will not condone a cavalier attitude
towards procedural rules. It is the duty of every member of the bar to comply with
these rules. They are not at liberty to seek exceptions should they fail to observe
these rules and rationalize their omission by harking on liberal construction. While
it IS the negligence of Consolacion's counsel that led to this unfortunate result, she is
bound by such.
Commissioner of Internal Revenue vs Migrant Pagbilao Corporation, G.R. No.

159593, October 12, 2006
Facts:
MPC is a domestic corporation engaged in the business of power generation and

subsequent sale thereof. It is registered with the BIR as VAT registered entity. For
the period of April 1, 1996 to December 31, 1996, MPC seasonably filed its quarterly
VAT returns reflecting an accumulated input taxes in the amount of P 39, 330,500.00.
These taxes were allegedly paid my MPC to the suppliers of capital goods and
services. MPC filed an application for a tax refund of the unutilized VAT paid on
capital goods. MPC did not wait for an answer from the BIR and filed a petition for
review in order to toll the running period for claiming the refund. The BIR
Commissioner raised as a defense that the application for refund is still pending and
therefore premature. The Commissioner also argued that MPC must produce
evidence to prove that it is entitled to the refund, as tax refunds are construed
strictly against the tax payer. While the case was pending, Revenue Officers
investigated MPCs application and recommended that MPCs input taxes should be
reduced by P49, 616.40 for unapplied input taxes on capital goods. A third party
audit was also conducted and found that the input taxes only amounted to P28,
745,502. The Court of Tax Appeals rule in favor of MPC and granted the tax refund.
The Court of Appeals denied the BIRs petition for review, declaring that the BIR
cannot validly change its theory on the case on appeal.
ISSUE:
1) WON the observance of procedural rules should be relaxed.

2) WON MPC is a public utility and is exempt from paying VAT and is not entitled to a
refund.
HELD
1) No, the general rule is that a party cannot change his theory of the case on
appeal. It was only after the CTA ruled against the BIR, that the latter filed his
petition for review before the CA, and for the first time averred that the MPC was a
public utility and does not pay VAT, thereby disqualifying it from claiming a refund.
The settled rule is that a party cannot change his theory of the case or his cause of
action on appeal. It affirms that courts of justice have no jurisdiction or power to
decide a question not in issue.
Such a rule has been expressly adopted in Rule 44, Section 15 of the 1997 Rules of
Civil Procedure, which provides SEC. 15. Questions that may be raised on appeal.
Whether or not the appellant has filed a motion for new trial in the court below, he
may include in his assignment of errors any question of law or fact that has been
raised in the court below and which is within the issues framed by the parties.
2) No, The CTA found that MPC is registered as a VAT-taxpayer, as evidenced by its
Certificate of Registration, issued by the BIR Revenue District Office (RDO) No. 60,
on 26 January 1996. The BIR Commissioner does not contest this fact, and does not
offer any explanation as to why the BIR RDO had approved the registration of MPC
as a VAT-taxpayer. Well-settled principle in this jurisdiction is that this Court is bound
by the findings of fact of the CTA. Only errors of law, and not rulings on the weight of
evidence, are reviewable by this Court. Findings of fact of the CTA are not to be
disturbed unless clearly shown to be unsupported by substantial evidence.
SM Land, Inc., et al. v. City of Manila, et al., G.R. No. 197151
FACTS:
On the strength of the provisions of Tax Ordinance Nos. 7988 and 8011, which
amended Ordinance No. 7794, also known as the Revenue Code of Manila, herein
respondent City of Manila assessed herein petitioners, together with their other
sister companies, increased rates of business taxes for the year 2003 and the first to
third quarters of 2004. Petitioners and their sister companies paid the additional
taxes under protest.
Subsequently, petitioners and their sister companies claimed with herein respondent
City Treasurer of Manila a credit or refund of the increased business taxes which
they paid for the period abovementioned. However, the City Treasurer denied their
claim.
Petitioners and their sister companies filed a complaint with the Regional Trial Court
(RTC) of Pasay City a Complaint for Refund and/or Issuance of Tax Credit of Taxes
Illegally Collected. RTC rendered a summary judgment in favor of herein petitioners.
The RTC held that Tax Ordinance Nos. 7988 and 8011, which were the bases of the
City of Manila in imposing the assailed additional business taxes on petitioners and
their co-plaintiffs, had already been declared null and void by this Court in the case
of Coca-Cola Bottlers Philippines, Inc. v. City of Manila.
Respondents moved for reconsideration, but the RTC denied the same.
The CTA Second Division sustained the ruling of the RTC that Ordinance Nos. 7988
and 8011 are null and void. The CTA Second Division, nonetheless, held that herein
petitioners' claims for tax refund should be denied because of their failure to comply
with the provisions of the Rules of Court requiring verification and submission of a
certificate of non-forum shopping. The CTA Second Division noted that petitioners
failed to attach to the complaint filed with the RTC their respective Secretary's
Certificates authorizing their supposed representative, a certain Atty. Rex Enrico V.
Cruz III (Atty. Cruz), to file the said complaint in their behalf. The CTA also observed
that in the Verification and Certification of Non-Forum Shopping attached to the
complaint, petitioner SM Land, Inc. was not included in the list of corporations
represented by the person who executed the said Verification and Certification.
Aggrieved, petitioners filed a petition for review with the CTA En Banc. The CTA En
Banc rendered its assailed Decision affirming in toto the judgment of the CTA Second
Division.
ISSUE:
WON section 11, republic act no. 1125, as amended by republic act no. 9282, clearly
did not intend for the thirty (30)-day period to appeal decisions of the regional trial
court to the cta to be extendible
HELD:
The Court is not persuaded by petitioners insistence that the 30-day period to
appeal decisions of the RTC to the CTA is non-extendible.
Petitioners cited cases decided by this Court wherein it was held that the 30-day
period within which to file an appeal with the CTA is jurisdictional and non-
extendible. However, these rulings had been superseded by this Court's decision in
the case of City of Manila v. Coca-Cola Bottlers, Philippines, Inc., as correctly cited
by the CTA En Banc. Suffice it to say that this Court's ruling in the said case is
instructive, to wit:
xxxx
The period to appeal the decision or ruling of the RTC to the CTA via a Petition for
Review is specifically governed by Section 11 of Republic Act No. 9282, and Section
3 (a), Rule 8 of the Revised Rules of the CTA.
It is crystal clear from the afore-quoted provisions that to appeal an adverse decision
or ruling of the RTC to the CTA, the taxpayer must file a Petition for Review with the
CTA within 30 days from receipt of said adverse decision or ruling of the RTC. It is
also true that the same provisions are silent as to whether such 30-day period can be
extended or not. However, Section 11 of Republic Act No. 9282 does state that the
Petition for Review shall be filed with the CTA following the procedure analogous to
Rule 42 of the Revised
Rules of Civil Procedure.
Following by analogy, Section 1, Rule 42 of the Revised Rules of Civil Procedure, the
30-day original period for filing a Petition for Review with the CTA under Section 11
of Republic Act No. 9282, as implemented by Section 3 (a), Rule 8 of the Revised
Rules of the CTA, may be extended for a period of 15 days. No further extension shall
be allowed thereafter, except only for the most compelling reasons, in which case the
extended period shall not exceed 15 days.
Nonetheless, the Court agrees with petitioners' contention in its second argument
that there are compelling reasons in the present case which justify the relaxation of
the rules on verification and certification of non-forum shopping.

It must be kept in mind that while the requirement of the certification of non-forum
shopping is mandatory, nonetheless, the requirements must not be interpreted too
literally and, thus, defeat the objective of preventing the undesirable practice of
forum shopping.
Time and again, this Court has held that rules of procedure are established to secure
substantial justice. Being instruments for the speedy and efficient administration of
justice, they must be used to achieve such end, not to derail it. In particular, when a
strict and literal application of the rules on non-forum shopping and verification will
result in a patent denial of substantial justice, these may be liberally construed.
WHEREFORE, the instant petition is GRANTED. The Decision and Resolution of the
Court of Tax Appeals En Banc, dated December 17, 2010 and May 27, 2011,
respectively, in CTA EB No. 548, as well as the July 3, 2009 Decision and September
30, 2009 Resolution of the Court of Tax Appeals Second Division in CTA AC No. 51,
are REVERSED AND SET ASIDE and the Orders of the Regional Trial Court of Pasay
City, Branch 115, dated July 10, 2007 and December 14, 2007, are REINSTATED.
SO ORDERED.
Edgardo Pinga v. Heirs of German Santiago, G.R. No.170354, June 30, 2006
FACTS:
Eduardo Pinga, herein petitioner, together with Vicente Saavedra was named as
defendants in an injunction case filed by herein respondent Heirs of Santiago. It was
alleged in the complaint dated 1998 that Pinga and Saavedra had been unlawlly
entering the coco lands of the respondents cutting trees and bamboo grass and
gathering fruits of the trees therein.
In his answer with counterclaim, Pinga disputed the ownership over the property by
the respondent and claimed the same was owned by his father who was already in
possession thereof since 1930s. Furthermore, Pinga alleged that as far back as 1968,
there was already an order ejecting the respondents from the property after a
complaint for forcible entry was filed by the heirs of Edmundo Pinga.
Several years have passed and the trial of the case had not yet been completed due
to the several faults of the Respondent (as plaintiff), as when they failed to present
evidence. And on 2004, the RTC ordered the dismissal of the action on the ground of
Plaintiff's fault to prosecuted the case for unreasonable length of time. At the same
time, RTC also allowed Pinga to present his evidence ex parte with respect to his
counterclaim.
The Respondents filed a Motion for Reconsideration, opting however not to seek that
their complaint be reinstated, but praying instead that the entire action be dismissed
and Petitioner be disallowed from presenting evidence ex-parte. They argued that the
order of the RTC in allowing Pinga to present evidence ex parte would circumvent
the principle laid down in established jurisprudence which hold that a counterclaim
cannot exist independently from the principal complaint and be adjudicated
separately.
Thereafter, the RTC granted the Motion for Reconsideration filed by the respondent
on the ground that there was no Opposition filed by Pinga. Thus, Petitioner Pinga
moved to reconsider the order granting the earlier motion for reconsideration by the
respondents but it was denied. Notably, the respondents filed an Opposition to
Defendants Urgent Motion for Reconsideration, wherein they argued that the
prevailing jurisprudential rule is that "compulsory counterclaims cannot be
adjudicated independently of plaintiffs cause of action," and " the dismissal of the
complaint carries with it the dismissal of the compulsory counterclaims."
Aggrieved, Pinga elevated the case to the Supreme Court by way of petition for
review under Rule 45 on a pure question of law regarding the total dismissal of the
case.
ISSUE:
Whether or not the dismissal of the complaint necessarily carries the dismissal of the
compulsory counterclaim.
RULING: NO.
The dismissal of the complaint does not necessarily carries with it the dismissal of
the compulsory counterclaim.
Under Sec. 3 Rule 17 of the 1997 Rules of Civil Procedure:
SEC. 3. Dismissal due to fault of plaintiff.If, for no justifiable cause, the plaintiff
fails to appear on the date of the presentation of his evidence in chief on the
complaint, or to prosecute his action for an unreasonable length of time, or to comply
with these Rules or any order of the court, the complaint may be dismissed upon
motion of defendant or upon the court's own motion, without prejudice to the right of
the defendant to prosecute his counterclaim in the same or in a separate action. This
dismissal shall have the effect of an adjudication upon the merits, unless otherwise
declared by the court.
The Court compared the same with the earlier 1964 Rules of Civil Procedure which
was silent on the effect of such dismissal due to failure to prosecute on the pending
counterclaims. As a result, there arose what one authority on remedial law
characterized as "the nagging question of whether or not the dismissal of the
complaint carries with it the dismissal of the counterclaim."
The Court also made a lengthy discussion on the difference between Sections 2 and 3
of Rules 17. The dismissal of the complaint under Section 2 is at the instance of
plaintiff, for whatever reason he is minded to move for such dismissal, and, as a
matter of procedure, is without prejudice unless otherwise stated in the order of the
court or, for that matter, in plaintiff's motion to dismiss his own complaint. Section 3
on the other hand, contemplates a dismissal not procured by plaintiff, albeit justified
by causes imputable to him. Here, the issue of whether defendant has a pending
counterclaim, permissive or compulsory, is not of determinative significance. The
dismissal of plaintiff's complaint is evidently a confirmation of the failure of evidence
to prove his cause ofaction outlined therein, hence the dismissal is considered, as a
matter of evidence, an adjudication on the merits.
The complaint can accordingly be dismissed, but relief can nevertheless be granted
as a matter of course to defendant on his counterclaim as alleged and proved, with or
without any reservation therefor on his part, unless from his conduct, express or
implied, he has virtually consented to the concomitant dismissal of his counterclaim.
The present rule embodied in Sections 2 and 3 of Rule 17 ordains a more equitable
disposition of the counterclaims by ensuring that any judgment thereon is based on
the merit of the counterclaim itself and not on the survival of the main complaint.
Certainly, if the counterclaim is palpably without merit or suffers jurisdictional flaws
which stand independent of the complaint, the trial court is not precluded from
dismissing it under the amended rules, provided that the judgment or order
dismissing the counterclaim is premised on those defects. At the same time, if the
counterclaim is justified, the amended rules now unequivocally protect such
complaint from peremptory dismissal by reason of the dismissal of the complaint.

In the Matter of the Petition for the Issuance of a Writ of Amparo in Favor of Lilibeth O. Ladaga vs.
Maj. Gen. Reynaldo Mapagu, G.R. No. 189689-91, November 13, 2012
Facts:
Petitioners share the common circumstance of having their names included in what is alleged to be a JCICC
AGILA 3rd Quarter 2007 Order of Battle Validation Result of the Philippine Army's 10th
Infantry Division (10th ID). They perceive that by the inclusion of their names in the said Order of Battle
(OB List), they become easy targets of unexplained disappearances or extralegal killings a real threat
to their life, liberty and security. ATTY. LILIBETH O. LADAGA (Atty. Ladaga), first came to know of
the existence of the OB List from an undisclosed source on May 21, 2009. In the OB List, it was reflected
that the ULTIMATE GOAL is to TRY TO OUST PGMA ON 30 NOV 2007.
On the other hand, Atty. Angela Librado-Trinidad (Atty. Librado-Trinidad), delivered a privileged speech
before the members of the Sangguniang Panlungsod to demand the removal of her name from said OB List.
The Commission on Human Rights, for its part, announced the conduct of its own investigation into the
matter. According to Atty. Librado-Trinidad, in the course of the performance of her dutites and functions,
she has not committed any act against national security that would justify the inclusion of her name in the
said OB List. She said that sometime in May 2008, two suspicious-looking men tailed her vehicle. Also, on
June 23, 2008 three men tried to barge into their house.
Meanwhile, Atty. Carlos Isagani T. Zarate was informed that he was also included on the OB List. In his
petition, he alleged that the inclusion of his name in the said OB List was due to his advocacies as a public
interest or human rights lawyer. The Petitioners assert that the OB List is really a military hit-list as
allegedly shown by the fact that there have already been three victims of extrajudicial killing whose violent
deaths can be linked directly to the OB List.
On June 16, 2009 filed before the RTC a Petition for the Issuance of a Writ of Amparo. The RTC
subsequently issued separate Writs of Amparo, directing the respondents to file a verified written return. In
the return of the respondents, they denied authorship of the OB List, and alleged that petitioners failed to
show that they were responsible for the alleged threats. After submission of the parties respective Position
Papers, the RTC issued Orders finding no substantial evidence to show that the perceived threat to
petitioners life, liberty and security was attributable to the unlawful act or omission of the respondents. The
privilege of the Writ was therefore denied.
Issues:
WON the totality of evidence satisfies the degree of proof required under the Writ of Amparo.
Held: No, the evidence does not satisfy degree of proof for the issuance of the Writ of Amparo. The Writ of
Amparo was promulgated by the Court pursuant to its rule-making powers in response to the alarming rise
in the number of cases of enforced disappearances and extrajudicial killings. It is an extraordinary remedy
intended to address violations of, or threats to, the rights to life, liberty or security and that, being a remedy
of extraordinary character, is not one to issue on amorphous or uncertain grounds but only upon reasonable
certainty. Justifying allegations must support the issuance of the writ, on the following matters:
1. The personal circumstances of the petitioner;

2. The name and personal circumstances of the respondent responsible for the threat, act or
omission;
3. The right to life, liberty and security of the aggrieved party violated or threatened with
violation by an unlawful act or omission of the respondent and how such threat or violation is
committed with the attendant circumstances detailed in supporting affidavits;
4. The investigation conducted specifying the names, personal circumstances and addresses of
the investigating authority or individuals;
5. Actions and recourses taken by the petitioner to determine the fate or whereabouts of the
aggrieved party and the identity of the person responsible for the threat, act or omission;
6. The relief prayed for.
Under the Rule on the Writ of Amparo, the parties shall establish their claims by substantial evidence, and if
the allegations in the petition are proven by substantial evidence, the court shall grant the privilege of the
writ and such reliefs as may be proper and appropriate Substantial evidence is that amount of relevant
evidence which a reasonable mind might accept as adequate to support a conclusion. Petitioners sought to
prove that the inclusion of their names in the OB List presented a real threat to their security by attributing
the violent deaths of the other known activists to the inclusion of their names or the names of their militant
organizations in the subject OB List. However, the existence of the OB List could not be directly associated
with the menacing behaviour of suspicious men or the violent deaths of certain personalities.
The Petitioners cannot assert that the inclusion of their names in the OB List is as real a threat as that which
brought ultimate harm to the other victims without corroborative evidence from which it can be presumed
that the suspicious deaths of these three people were in fact, on account of their militant affiliations. The
Petitioners therefore were not able to prove by substantial evidence that there was an actual threat to their
rights to life, liberty and security. The mere inclusion of their names in the OB List is not sufficient enough
evidence for the issuance of the Writ of Amparo.

Audi AG v. Hon. Jules A. Mejia, in his capacity as Executive Judge of the
Regional Trial Court, Alaminos City; Auto Prominence Corporation; and
Proton Pilipinas Corporation
G.R. No. 167533, July 27, 2007
Facts:
Audi AG, a non-resident foreign company engaged in the manufacture of Audi brand
cars, is organized in the Federal Republic of Germany, with principal office at
Ingolstadt, Germany. It is not licensed to do business in the Philippines but is suing
on an isolated transaction.
On August 1, 1996, Audi AG entered into an Assembly and Distributorship

Agreement with Proton. According to the agreement, (1) Proton shall be the sole
assembler and distributor of Audi cars in the Philippines; and (2) Audi AG will make
representations that Proton will be the exclusive assembler and distributor of Audi
cars and local parts manufacturer for export purposes.
Relying on Audi AGs representations, Proton borrowed money to buy (1) assembly
plant and distributorship, (2) tools and equipment, (3) showrooms and offices, and
(4) license fees and brochures, etc.
Proton later discovers that Audi AG did not include the Philippines in its ASEAN
Assembly Strategy program, but only Malaysia. A letter was later sent by Audi AG
terminating the agreements.
On March 21, 2005, Auto Prominence and Proton filed a complaint for specific
performance and injunction (with application for TRO and preliminary injunction)
against petitioner Audi AG with the RTC, Alaminos City.
After hearing, the Executive Judge ordered the issuance of a TRO and the
maintenance of the status quo ante, even prior to the raffle of the case. Audi AG filed
a Petition for Certiorari under Rule 65 before the Supreme Court. The respondents
challenged the Petition for being filed without a prior Motion for Reconsideration and
failure to observe the hierarchy of courts, among others.
Issue:
Whether or not the petition should be dismissed.
Held: YES.
First, petitioner failed to file with the trial court the requisite motion for
reconsideration of the challenged Order before resorting to the instant recourse. The
well-established rule is that a motion for reconsideration is an indispensable
condition before an aggrieved party can resort to the special civil action for
certiorari under Rule 65 of the 1997 Rules of Civil Procedure, as amended.

The argument that a motion for reconsideration is unnecessary cannot be accepted.
Petitioner may not arrogate unto itself the determination of whether a motion for
reconsideration is necessary or not. Its submission runs counter to the purpose of the
rule that a motion for reconsideration would afford the erring court or agency an
opportunity to rectify the error/s it may have committed without the intervention of a
higher court. Such motion is not only an expeditious remedy of an aggrieved party
but also obviates an improvident and unnecessary recourse to appellate proceedings.
Second, petitioner, by filing directly with this Court its petition, has ignored the
established rule on hierarchy of courts. It must be stressed that the Court of Appeals
and the Supreme Court have original concurrent jurisdiction over petitions for
certiorari. The rule on hierarchy of courts determines the venue of appeals. Such
rule is necessary to prevent inordinate demands upon the Courts precious time and
attention which are better devoted to matters within its exclusive jurisdiction, and to
prevent further overcrowding of the Courts docket. Audi AG should have filed the
petition before the Court of Appeals instead. Procedural rules are not to be disdained
as mere technicalities. They may not be ignored to suit the convenience of a party. It
ensures the effective enforcement of substantive rights through the orderly and
speedy administration of justice. Public order and our system of justice are well
served by a conscientious observance by the parties of the procedural rules.
COMMISSION ON ELECTIONS, COMELEC CHAIRMAN ALFREDO L.
BENIPAYO, COMELEC COMMISSIONERS RESURRECCION Z. BORRA and
FLORENTINO A. TUASON, JR., petitioners, vs. JUDGE MA. LUISA QUIJANO-
PADILLA, REGIONAL TRIAL COURT OF QUEZON CITY, BRANCH 215 and
PHOTOKINA MARKETING CORP., respondents., G. R. No. 151992. September
18, 2002
Facts:
In 1996, the Philippine Congress passed Republic Act No. 8189, otherwise known as
the "Voter's Registration Act of 1996," providing for the modernization and
computerization of the voters' registration list and the appropriate of funds therefor
"in order to establish a clean, complete, permanent and updated list of voters."[4]
Pursuant thereto, the Commission on Elections (COMELEC) promulgated Resolution
No. 00-0315[5] approving in principle the Voter's Registration and Identification
System Project (VRIS) Project for brevity). The VRIS Project envisions a
computerized database system for the May 2004 Elections. The idea is to have a
national registration of voters whereby each registrant's fingerprints will be digitally
entered into the system and upon completion of registration, compared and matched
with other entries to eliminate double entries. A tamper-proof and counterfeit-
resistant voter's identification card will then be issues to each registrant as a visual
record of the registration.
On September 9, 1999, the COMELEC issued invitations to pre-qualify and bid for
the supply and installations of information technology equipment and ancillary
services for its VRIS Project.[6] Private respondent Photokina Marketing Corporation
(PHOTOKINA) pre-qualified and was allowed to participate as one of the bidders.
After the public bidding was conducted, PHOTOKINA's bid in the amount of P6.588
Billion Pesos garnered the highest total weighted score and was declared the
winning bidder.
Thus, the COMELEC issued Resolution No. 3252, which approves the Notice of
Award to PHOTOKINA. The parties then proceeded to formalize the contract, with
Commissioner Mehol K. Sadain and Atty. Rodrigo D. Sta. Ana, acting as negotiators
for the COMELEC and PHOTOKINA, respectively. However, under Republic Act No.
8760[8] the budget appropriated by Congress for the COMELECs modernization
project was only One (1) Billion Pesos and that the actual available funds under the
Certificate of Availability of Funds (CAF) issued by the Chief Accountant of the
COMELEC was only P1.2 Billion Pesos.
Subsequently, the COMELEC Chairman Harriet O. Demetriou issued a memorandum

to the COMELEC en banc expressing her objections to the contract. PHOTOKINA,
meanwhile, as the winning bidder, wrote several letters to the COMELEC requesting
the formal execution of the contract, but to no avail. Then Chairman Benipayo
announced that the VRIS Project has been scrapped, dropped, junked, or set aside.
He further announced his plan to re-engineer the entire modernization program of
the COMELEC, emphasizing his intention to replace the VRIS Project with his own
version, the Triple E Vision.
On October 2, 2001, Senator Edgardo J. Angara directed the creation of a technical

working group to assist the COMELEC in evaluating all programs for the
modernization of the COMELEC, which will also consider the PHOTOKINA contract
as an alternative program, and various competing programs for the purpose.
PHOTOKINA then filed with the Regional Trial Court, Branch 215, Quezon City a
petition for mandamus, prohibition and damages (with prayer for temporary
restraining order, preliminary prohibitory injunction and preliminary mandatory
injunction) against the COMELEC and all its Commissioners. PHOTOKINA alleged
three causes of action: first, the deliberate refusal of the COMELEC and its
Commissioners to formalize the contract rendered nugatory the perfected contract
between them; second, in announcing that the VRIS Project has been junked and that
he has plans to re-engineer the COMELECs entire modernization program, Chairman
Benipayo committed grave abuse of discretion; and third, the COMELECs failure to
perform its duty under the contract has caused PHOTOKINA to incur damages since
it has spent substantial time and resources in the preparation of the bid and the draft
contract.
Respondent Judge Ma. Luisa Quijano-Padilla issued the first assailed Resolution
granting PHOTOKINAs application for a writ of preliminary prohibitory injunction
which: (1) grant the application for the issuance of a writ of preliminary prohibitory
injunction; and (2) deny the application for the issuance of a writ of preliminary
mandatory injunction. Hence, let a writ of preliminary prohibitory injunction issue
which enjoins respondents, their agents, successors and assigns from replacing the
VRIS Project upon petitioners posting of a bond in the amount of P20,000,000.00,
which bond shall answer for whatever damages which may be sustained by reason of
the issuance of the said writ, if it turns out that the plaintiffs are not entitled thereto.
Both parties filed their respective motions for reconsideration.
On February 8, 2002, respondent judge issued the second assailed Resolution

denying the COMELECs Omnibus Motion and, this time, granting PHOTOKINAs
application for a writ of preliminary mandatory injunction which : (1) deny
Respondents Omnibus Motion for the dismissal of this case and for the
reconsideration of this Courts Resolution granting the writ of preliminary prohibitory
injunction; (2) grant Petitioners Motion dated January 2, 2002 insofar as it prays for
the issuance of a writ of preliminary mandatory injunction; (3) Grant the prayer for
the reduction of the preliminary prohibitory injunction bond from P20,000,000.00 to
P10,000,000.00; (4) Clarify its Resolution dated December 19, 2001 to the extent
that the writ of preliminary prohibitory injunction will also enjoin Respondents, their
agents, successors and assigns from disregarding the contract for the VRIS Project
between Petitioner and Respondent COMELEC; (5) deny Petitioners motion to
declare Respondents in default.
Hence, the instant petition for certiorari filed by the Office of the Solicitor General
(OSG) in behalf of then COMELEC Chairman Alfredo L. Benipayo and Commissioners
Resurreccion Z. Borra and Florentino A. Tuason, Jr..
Petitioners contend that: (1) a petition for mandamus and prohibition does not lie to
enforce contractual obligations, hence, PHOTOKINAs proper recourse before the
Regional Trial Court should have been an action for specific performance; (2)
respondent judge, by issuing the injunctive writs, already assumed that the VRIS
Project was lawfully awarded by the COMELEC to PHOTOKINA, and that there is a
valid perfected contract between them, thus, manifesting her prejudgment; and (3)
injunctive writs should not be issued when an action for damages can adequately
compensate for the injuries. Petitioners pray that the two assailed Resolutions be
nullified and Special Civil Action No. Q-01-45405 be dismissed outright.
PHOTOKINA filed a Comment with Motion to Dismiss, the present petition, on two
procedural grounds. First, the petition violates the doctrine of hierarchy of courts.
And second, the OSG has no authority and/or standing to file the petition considering
that the petitioners have not been authorized by the COMELEC en banc to take such
action. Without the concurrence of at least a majority of the members of the
COMELEC, neither petitioners nor the OSG could file the petition in behalf of the
COMELEC.
In refutation of petitioners arguments, PHOTOKINA contends that mandamus is an

appropriate remedy since what is involved in Special Civil Action No. Q-01-45405 is
the performance of a ministerial duty. PHOTOKINA maintains that mandamus may
be availed of by private parties to compel public officers to act on a contract entered
into pursuant to law.
The petition is impressed with merit.
Issue:
Whether or not the OSG has no standing to file the present petition since its legal
position is contrary to that espoused by the majority of the COMELEC
Commissioners.
Whether or not there is a breach of violation of hierarchy of Courts.
Whether or not a petition for mandamus is the appropriate remedy to enforce

contractual obligations.
Whether or not a successful bidder may compel a government agency to formalize a

contract with it notwithstanding that its bid exceeds the amount appropriated by
Congress for the project?
Held:
1. No, the OSG has standing to file the present petition.

In Orbos vs. Civil Service Commission, the Court ruled:
"x x x It is incumbent upon him (Solicitor General) to present to the court what he
considers would legally uphold the best interest of the government although it may
run counter to a clients position. x x x.
"In the present case, it appears that after the Solicitor General studied the issues he
found merit in the cause of the petitioner based on the applicable law and
jurisprudence. Thus, it is his duty to represent the petitioner as he did by filing this
petition. He cannot be disqualified from appearing for the petitioner even if in so
doing his representation runs against the interests of the CSC.
"This is not the first time that the Office of the Solicitor General has taken a position
adverse to his clients like the CSC, the National Labor Relations Commission, among
others, and even the People of the Philippines.
Hence, while petitioners stand is contrary to that of the majority of the

Commissioners, still, the OSG may represent the COMELEC as long as in its
assessment, such would be for the best interest of the government. For, indeed, in
the final analysis, the client of the OSG is not the agency but no less than the
Republic of the Philippines in whom the plenum of sovereignty resides. Moreover, it
must be emphasized that petitioners are also public officials entitled to be
represented by the OSG. Under Executive Order No. 292[30] and Presidential Decree
No. 478,[31] the OSG is the lawyer of the government, its agencies and
instrumentalities, and its officials or agents. This mandate includes the three
petitioners[32] who have been impleaded as public respondents in Special Civil
Action No. Q-01-45405.
2. There is no violation of the hierarch of Courts.

Suffice it to say that it is not an iron-clad dictum. On several instances where this
Court was confronted with cases of national interest and of serious implications, it
never hesitated to set aside the rule and proceed with the judicial determination of
the case.[33] The case at bar is of similar import. It is in the interest of the State that
questions relating to government contracts be settled without delay. This is more so
when the contract, as in this case, involves the disbursement of public funds and the
modernization of our countrys election process, a project that has long been overdue.
3. No, mandamus is not the proper recourse to enforce the COMELEC's alleged
contractual obligations with PHOTOKINA. No rule of law is better settled than that
mandamus does not lie to enforce the performance of contractual obligations.[34] As
early as 1924, Justice Street, in Quiogue vs. Romualdez,[35] already set forth the
justification of this rule, thus: Upon the facts above stated we are of the opinion that
the writ of mandamus is not the appropriate, or even an admissible remedy. It is
manifest that whatever rights the petitioner may have, upon the facts stated, are
derived from her contract with the city; and no rule of law is better settled than that
mandamus never lies to enforce the performance of private contracts. x x x The
petitioners remedy, if any she has, is by an original action in the Court of First
Instance to compel the city to pay the agreed price or to pay damages for the breach
of contract.
"x x x. As said in Lowe vs. Phelps (14 Bush, 642):

It must, therefore, appear upon every application for a mandamus that it is the legal
duty of the respondent to do that which it is sought to compel him to do, and that he

has upon proper application refused to perform that duty.' (Citing numerous
authorities).
"It was not intended to aid a plaintiff in the enforcement of a mere contract right, or
to take the place of the other remedies provided by law for the adjudication of
disputed claims. Looking at the case from the standpoint of appellant, it involves
nothing more than an ordinary breach of contract. If, as contended, the appellant had
a valid contract with the school board, it also had an adequate remedy at law to
recover damages for its breach; and to permit the writ of mandamus to be used for
the purpose of enforcing a mere contract right would be a wide departure from the
settled practice in respect to the character of cases in which relief by mandamus may
be obtained.
"In Parrott vs. City of Bridgeport (44 Conn., 180), the writ was refused where the
petitioner sought to compel a city to construct a public street in a certain manner
agreeably to the terms of a special agreement between the petitioner and the city. In
the course of the opinion the court said:
"* * * The duty, therefore, if any, which rests upon the city in this regard, is one which
it owes to the petitioner as an individual, not to the public, and the special contract is
the foundation upon which it rests. But the writ of mandamus has never been
considered as an appropriate remedy for the enforcement of contract rights of a
private and personal nature and obligations which rest wholly upon contract and
which involve no questions of public trusts or official duty. Indeed, strictly speaking,
it never lies where the party aggrieved has adequate remedy at law, and its aid is
only to be invoked to prevent an absolute failure of justice in cases where ordinary
legal processes furnish no relief. (Emphasis supplied)
Akin to the Court's rulings cited above, the Court hold that mandamus is not the
proper recourse to enforce the COMELEC's alleged contractual obligations with
PHOTOKINA. It has other adequate remedy in law. Moreover, the judicial caution
that mandamus applies as a remedy only where petitioner's right is founded clearly
in law and not when it is doubtful. Legal rights may be enforced by mandamus only if
those rights are well-defined, clear and certain. Here, the alleged contract, relied
upon by PHOTOKINA as source of its rights which it seeks to be protected, is being
disputed, not only on the ground that it was not perfected but also because it is
illegal and against public policy.
Of course, there are cases in which the writ of mandamus has been used to compel
public officers to perform certain acts, but it will be generally observed that in such
cases, the contracts have been completely performed by the petitioner, and nothing
remained to be done except for the government to make compensation. These
exceptional cases are cited in Isada vs. Bocar[46] where the act of the respondent
public officer has the effect of setting aside contracts already in the process of
consummation. In contrast with Isada, the alleged contract here has not yet been
fully performed by PHOTOKINA; and though it avers readiness to perform,
petitioners raised serious questions as to its validity. Their posture is tenable.
4. PHOTOKINA, though the winning bidder, cannot compel the COMELEC to

formalize the contract Enshrined in the 1987 Philippine Constitution is the mandate
that "no money shall be paid out of the Treasury except in pursuance of an
appropriation made by law." Thus, in the execution of government contracts, the
precise import of this constitutional restriction is to require the various agencies to
limit their expenditures within the appropriations made by law for each fiscal year.
Complementary to the foregoing constitutional injunction are pertinent provisions of
law and administrative issuances that are designed to effectuate the above mandate
in a detailed manner.[48] Sections 46 and 47, Chapter 8, Subtitle B, Title I, Book V of
ExecutiveOrder No. 292, otherwise known as "Administrative Code of 1987,"
provide: "SEC. 46. Appropriation Before Entering into Contract. - (1) No contract
involving the expenditure of public funds shall be entered into unless there is an
appropriation therefor, the unexpended balance of which, free of other obligations, is
sufficient to cover the proposed expenditure; and x x x
"SEC. 47. Certificate Showing Appropriation to Meet Contract. - Except in the case of
a contract for personal service, for supplies for current consumption or to be carried
in stock not exceeding the estimated consumption for three (3) months, or banking
transactions of government-owned or controlled banks, no contract involving the
expenditure of public funds by any government agency shall be entered into or
authorized unless the proper accounting official of the agency concerned shall have
certified to the officer entering into the obligation that funds have been duly
appropriated for the purpose and that the amount necessary to cover the proposed
contract for the current calendar year is available for expenditure on account
thereof, subject to verification by the auditor concerned. The certificate signed by the
proper accounting official and the auditor who verified it, shall be attached to and
become an integral part of the proposed contract, and the sum so certified shall not
thereafter be available for expenditure for any other purpose until the obligation of
the government agency concerned under the contract is fully extinguished.
Hence, the existence of appropriations and the availability of funds are

indispensable pre-requisites to or conditions sine qua non for the execution of
government contracts. The intent is to impose such conditions as a priori requisites
to the validity of the proposed contract.[49] Using this as our premise, we cannot
accede to PHOTOKINA's contention that there is already a perfected contract.
In the case at bar, there seems to be an oversight of the legal requirements as early
as the bidding stage. The first step of a Bids and Awards Committee (BAC) is to
determine whether the bids comply with the requirements. The BAC shall rate a bid
"passed" only if it complies with all the requirements and the submitted price does
not exceed the approved budget for the contract."
Extant on the record is the fact that the VRIS Project was awarded to PHOTOKINA
on account of its bid in the amount of P6.588 Billion Pesos. However, under Republic
Act No. 8760,[53] the only fund appropriated for the project was P1 Billion Pesos and
under the Certification of Available Funds[54] (CAF) only P1.2 Billion Pesos was
available. Clearly, the amount appropriated is insufficient to cover the cost of the
entire VRIS Project. There is no way that the COMELEC could enter into a contract
with PHOTOKINA whose accepted bid was way beyond the amount appropriated by
law for the project. Hence, the BAC should have rejected the bid for being
excessive[55] or should have withdrawn the Notice of Award on the ground that in
the eyes of the law, the same is null and void.
The objections of then Chairman Demetriou to the implementation of the VRIS

Project, ardently carried on by her successor Chairman Benipayo, are therefore in
order. Petitioners are justified in refusing to formalize the contract with
PHOTOKINA. Prudence dictated them not to enter into a contract not backed up by
sufficient appropriation and available funds. Definitely, to act otherwise would be a
futile exercise for the contract would inevitably suffer the vice of nullity. Of course,
the Court is not saying that the party who contracts with the government has no
other recourse in law. The law itself affords him the remedy. Section 48 of E.O. No.
292 explicitly provides that any contract entered into contrary to the above-
mentioned requirements shall be void, and the officers entering into the contract
shall be liable to the Government or other contracting party for any consequent
damage to the same as if the transaction had been wholly between private parties."
So when the contracting officer transcends his lawful and legitimate powers by
acting in excess of or beyond the limits of his contracting authority, the Government
is not bound under the contract. It would be as if the contract in such case were a
private one, whereupon, he binds only himself, and thus, assumes personal liability
thereunder.[63] Otherwise stated, the proposed contract is unenforceable as to the
Government.
The authority of public officers to enter into government contracts is circumscribed

with a heavy burden of responsibility. In the exercise of their contracting
prerogative, they should be the first judges of the legality, propriety and wisdom of
the contract they entered into. They must exercise a high degree of caution so that
the Government may not be the victim of ill-advised or improvident action.
In fine, we rule that PHOTOKINA, though the winning bidder, cannot compel the
COMELEC to formalize the contract. Since PHOTOKINAs bid is beyond the amount
appropriated by Congress for the VRIS Project, the proposed contract is not binding
upon the COMELEC and is considered void; and that in issuing the questioned
preliminary writs of mandatory and prohibitory injunction and in not dismissing
Special Civil Action No. Q-01-45405, respondent judge acted with grave abuse of
discretion. Petitioners cannot be compelled by a writ of mandamus to discharge a
duty that involves the exercise of judgment and discretion, especially where
disbursement of public funds is concerned.
United Claimants Association of NEA v. National Electrification

Administration, G.R. NO. 187107, January 31, 2012
FACTS:
Respondent NEA is a government-owned and/or controlled corporation created in
accordance with Presidential Decree No. 269. Under PD 269, the NEA Board is
empowered to organize or reorganize NEAs staffing structure.
In order to enhance and accelerate the electrification of the whole country, including
the privatization of the National Power Corporation, RA 9136, otherwise known as
the Electric Power Industry Reform Act of 2001 (EPIRA Law), was enacted. The said
law provides for the framework for the restructuring of the electric power industry,
and that the DOE shall, in consultation with the electric power industry participants
and end-users, promulgate the Implementing Rules and Regulations (IRR).
Subsequently, the Rules and Regulations to implement RA 9136 were issued wherein
it was provided that all the NEA employees and officers are considered terminated
and the 965 plantilla positions of NEA vacant. Meanwhile, former President Gloria
Macapagal- Arroyo issued EO 119 directing the NEA Board to submit a
reorganization plan. Thereafter, the NEA implemented an early retirement program
denominated as the "Early Leavers Program," giving incentives to those who availed
of it and left NEA before the effectivity of the reorganization plan. The other
employees were subsequently terminated. Petitioners are former employees of NEA
who were terminated from their employment with the implementation of the assailed
resolutions.
Petitioners initiated an original action for Injunction with the Supreme Court to
restrain and/or prevent the implementation of NEA Termination Pay Plan, issued by
respondent NEA Board. Petitioners contend that The NEA Board has no power to
terminate all the NEA employees, Executive Order No. 119 did not grant the NEA
Board the power to terminate all NEA employees, and the assailed resolution were
carried out in bad faith. Respondents, on the other hand, argued that the Court has
no jurisdiction over the petition, that Injunction is improper since that assailed
resolutions have long been implemented, and the assailed resolution was carried out
in good faith.
ISSUE(s):
(1) WON the Court has jurisdiction notwithstanding the fact that the action for
injunction was filed directly with the SC without regard to the doctrine of hierarchy
of courts.
(2) WON Injunction is still available in the case at bar.
(3) WON the NEA NEA Board had the power to pass the assailed resolution
terminating all of its employees.
RULING(s):
(1) YES. While it is true that by virtue of the doctrine of hierarchy of courts, the
instant petition should have been filed with the RTC. However, as an exception to this
general rule, the principle of hierarchy of courts may be set aside for special and
important reasons. Such reason exists in the instant case involving as it does the
employment of the entire plantilla of NEA, more than 700 employees all told, who
were effectively dismissed from employment in one swift stroke. This to the mind of
the Court entails its attention.
(2) YES. As a rule, the writ of prohibition will not lie to enjoin acts already done.
However, as an exception to the rule on mootness, courts will decide a question
otherwise moot if it is capable of repetition yet evading review. Similarly, in the
instant case, while the assailed resolutions of the NEA Board may have long been
implemented, such acts of the NEA Board may well be repeated by other government
agencies in the reorganization of their offices. Petitioners have not lost their remedy
of injunction.
(3) YES. In Betoy v. The Board of Directors, National Power Corporation, the Court
upheld the dismissal of all the employees of the NPC pursuant to the EPIRA Law. In
ruling that the power of reorganization includes the power of removal, the Court
explained that Reorganization involves the reduction of personnel, consolidation of
offices, or abolition thereof by reason of economy or redundancy of functions. It
could result in the loss of ones position through removal or abolition of an office.
However, for a reorganization for the purpose of economy or to make the
bureaucracy more efficient to be valid, it must pass the test of good faith; otherwise,
it is void ab initio.

PHILIPPINE SINTER CORPORATION and PHIVIDEC INDUSTRIAL
AUTHORITY, petitioners, vs. CAGAYAN ELECTRIC POWER AND LIGHT CO.,
INC., respondent.
G.R. No. 127371. April 25, 2002.
Facts:
On January 21, 1987, President Corazon C. Aquino and her Cabinet approved a
Cabinet Reform Policy for the power sector and issued a Cabinet Memorandum, Item
No. 2 of which provides:
Continue direct connection for industries authorized under the BOI-NPC

Memorandum of Understanding of 12 January 1981, until such time as the
appropriate regulatory board determines that direct connection of industry to NPC is
no longer necessary in the franchise area of the specific utility or cooperative.
Determination shall be based in the utility or cooperatives meeting the standards of
financial and technical capability with satisfactory guarantees of non-prejudice to
industry to be set in consultation with NPC and relevant government agencies and
reviewed periodically by the regulatory board.
Pursuant to such Cabinet Memorandum, respondent Cagayan Electric Power and

Light, Co. (CEPALCO), grantee of a legislative franchise to distribute electric power
to the municipalities of Villanueva, Jasaan and Tagoloan, and the city of Cagayan de
Oro, all of the province of Misamis Oriental, filed with the Energy Regulatory Board
(ERB) a petition entitled In Re: Petition for Implementation of Cabinet Policy
Reforms in the Power Sector. The petition sought the discontinuation of all existing
direct supply of power by the National Power Corporation (NPC, now NAPOCOR)
within CEPALCOs franchise area.
The ERB issued a notice of public hearing which was published in the Newspapers
and posted in the affected areas. It likewise furnished NAPOCOR and the Board of
Investments (BOI) copies of the petition and directed them to submit their
comments.
The ERB granted the petition of CEPALCO. Subsequently, the motion for
reconsideration of NAPOCOR was denied.
NAPOCOR then went to the Court of Appeals (CA), and filed a petition for review.
The CA dismissed the petition on the ground that the motion for reconsideration filed
with the ERB was file out of time, and thus, rendering the decision of the ERB final
and executory and can no longer be the subject of a petition for review.
Thereafter, NAPOCOR went to the Supreme Court (SC) and filed a petition for review
on certiorari. The SC affirmed the CAs decision.
To implement the decision of the ERB, CEPALCO wrote Philippine Sinter Corporation
(PSC), petitioner, and advised the latter of its desire to have the power supply of
PSC, directly taken from NPC (NAPOCOR), disconnected, cut and transferred to
CEPALCO. PSC is an entity operating its business within the PHIVIDEC Industrial
Estate. The Estate is managed and operated by the PHIVIDEC Industrial Authority
(PIA).

PSC refused the request of CEPALCO, since according to the former there is a
contract for power supply between it and NAPOCOR which contract is effective until
July 26, 1996.
To restrain the execution of the ERBs decision, PSC and PIA filed an action for
injunction with the Regional Trial Court (RTC), Branch 17 of Bacolod City. The RTC
rendered judgment in favor PSC and PIA. The motion for reconsideration filed by
CEPALCO was denied.
CEPALCO brought the matter to the CA by way of appeal. The CA ruled in favor of
CEPALCO, and the motion for reconsideration filed by PSC and PIA was denied.
Hence, the present petition to the SC.
ISSUE:
Whether or not a preliminary injunction will prosper against the final and executory
decision of the ERB.
HELD:
No. The rule is that after a judgment has attained finality, it becomes the ministerial
duty of the court to order its execution. No court can interfere by injunction or
otherwise restrain such execution. However, this rule admits of exceptions:
1. When facts and circumstances later transpire that would render execution
inequitable or unjust, the interested party may ask a competent court to stay the
judgments execution or prevent its enforcement.
2. A change in the situation of the parties can warrant an injunctive relief.
Unfortunately for PSC and PIA, none of the exceptions are present in the instant
case, based on the facts of the case. To disturb the final and executory judgment of
the ERB through injunction is an utter disregard of the rule on finality of judgments.
The Court further said that under Sec.10 Executive Oder No. 172 (the law creating
the ERB) review of the decisions of the ERB is lodged with the SC. Where the law
provides for an appeal to the SC or CA from Administrative Agencies, this means that
the latter are co-equal with the RTCs in terms of rank and stature, and thus, beyond
the RTCs control. Hence, this being the case, the RTC cannot interfere with the
decision of the ERB. This doctrine of non-interference of trial courts with co-equal
administrative bodies is intended to ensure judicial stability in the administration of
justice whereby the judgment of a court of competent jurisdiction may not be
opened, modified or vacated by any court of concurrent jurisdiction.

Omictin vs. CA and Lagos
FACTS:
Petitioner Vincent E. Omictin, Operations Manager Ad Interim of Saag Phils., Inc.,

filed a complaint for two counts of estafa with the Office of the City Prosecutor of
Makati against private respondent George I. Lagos. He alleged that private
respondent, despite repeated demands, refused to return the two company vehicles
entrusted to him when he was still the president of Saag Phils., Inc. On February 26,
1999, public prosecutor recommended the indictment of private respondent, and on
the same day, respondent was charged with the crime of estafa under Article 315,
par. 1(b) of the Revised Penal Code before the Regional Trial Court (RTC).
On June 24, 1999, private respondent filed a motion to suspend proceedings on the
basis of a prejudicial question because of a pending petition with the Securities and
Exchange Commission (SEC) involving the same parties. It appears that on January
7, 1999, private respondent filed SEC Case No. 01-99-6185 for the declaration of
nullity of the respective appointments of Alex Y. Tan and petitioner as President Ad
Interim and Operations Manager Ad Interim of Saag Phils., Inc., declaration of
dividends, recovery of share in the profits, involuntary dissolution and the
appointment of a receiver, recovery of damages and an application for a temporary
restraining order (TRO) and injunction against Saag (S) Pte. Ltd., Nicholas Ng,
Janifer Yeo, Tan and petitioner.
In the action before the SEC, private respondent averred that Saag (S) Pte. Ltd. is a
foreign corporation organized and existing under the laws of Singapore. On
September 9, 1994, Saag Philippines, Inc. was incorporated with Saag (S) Pte. Ltd.
as the majority stockholder. Private respondent was elected as President.
Later, due to intra-corporate disputes, president of Saag Singapore resigned and

divested their shares in Saag Corporation (Bhd), thereby resulting in a change in the
controlling interest in Saag (S) Pte. Ltd. Barely three months after, or on June 23,
1998, private respondent resigned his post as president of Saag Phils., Inc. while still
retaining his position as a director of the company. According to private respondent,
the joint venture agreement (JVA) between him or Saag Phils., Inc. and Saag (S) Pte.
Ltd. provided that should the controlling interest in the latter company, or its parent
company Saag Corp. (Bhd), be acquired by any other person or entity without his
prior consent, he has the option either to require the other stockholders to purchase
his shares or to terminate the JVA and dissolve Saag Phils., Inc. altogether. Petitioner
made several requests to the director, and executive director of Saag (S) Pte. Ltd., to
call for a board meeting in order to discuss the following: a) implementation of the
board resolution declaring dividends; b) acquisition of private respondents shares by
Saag (S) Pte. Ltd.; c) dissolution of Saag Phils., Inc.; and d) the termination of the
JVA.
Both failed to appear, however, they issued a letter appointing Alex Y. Tan as
President Ad Interim of Saag Phils., Inc. Tan, in turn, appointed petitioner Omictin as
the companys Operations Manager Ad Interim. Citing as a reason the absence of a
board resolution authorizing the continued operations of Saag Phils., Inc., private
respondent retained his possession of the office equipment of the company in a
fiduciary capacity as director of the corporation pending its dissolution and/or the
resolution of the intra-corporate dispute. He likewise changed the locks of the offices
of the company allegedly to prevent Tan and petitioner from seizing company
property.
Private respondent stressed that Tans appointment was invalid because it was in
derogation of the company by-laws. As Tans appointment did not have the
acquiescence of the board of directors, petitioners appointment by the former is
likewise allegedly invalid. Thus, neither has the power or the authority to represent
or act for Saag Phils., Inc. in any transaction or action before the SEC or any court of
justice.
In a case for estafa, a valid demand made by an offended party is one of the essential
elements. It appears from the records that the delay of delivery of the motor vehicles
by Lagos to Saag Corporation is by reason of his contention that the demand made
by Omictin and Atty. Tan to him to return the subject vehicles is not a valid demand.
As earlier mentioned, petitioner filed a case with the SEC questioning therein private
respondents appointment.
If the SEC should rule that the dissolution of Saag Phils. is proper, or that the
appointments of private respondents are invalid, the criminal case will eventually be
dismissed due to the absence of one of the essential elements of the crime of estafa.
Based on the foregoing, it is clear that a prejudicial question exists which calls for
the suspension of the criminal proceedings before the lower court. Incidentally, on
January 18, 2001, the SEC case was transferred to the Regional Trial Court (RTC) of
Mandaluyong City, Branch 214, pursuant to A.M. No. 00-11-03-SC implementing the
Securities and Regulation Code (Republic Act No. 8799) enacted on July 19, 2000,
vesting in the RTCs jurisdiction over intra-corporate disputes.
ISSUE:
Whether or not a prejudicial question exists to warrant the suspension of the
criminal proceedings pending the resolution of the intra-corporate controversy that
was originally filed with the SEC.
HELD:

Yes. Here, the case which was lodged originally before the SEC and which is now
pending before the RTC of Mandaluyong City by virtue of Republic Act No. 8799
involves facts that are intimately related to those upon which the criminal
prosecution is based. Ultimately, the resolution of the issues raised in the intra-
corporate dispute will determine the guilt or innocence of private respondent in the
crime of estafa filed against him by petitioner before the RTC of Makati.
Since the alleged offended party is Saag Phils., Inc., the validity of the demand for
the delivery of the subject vehicles rests upon the authority of the person making
such a demand on the companys behalf. Private respondent is challenging Omictins
authority to act for Saag Phils., Inc. in the corporate case pending before the RTC of
Mandaluyong. Taken in this light, if the supposed authority of petitioner is found to
be defective, it is as if no demand was ever made, hence, the prosecution for estafa
cannot prosper.
By analogy, the doctrine of primary jurisdiction may be applied in this case. The
issues raised by petitioner particularly the status of Saag Phils., Inc. vis--vis Saag (S)
Pte. Ltd., as well as the question regarding the supposed authority of the latter to
make a demand on behalf of the company, are proper subjects for the determination
of the tribunal hearing the intra-corporate case which in this case is the RTC of
Mandaluyong. These issues would have been referred to the expertise of the SEC in
accordance with the doctrine of primary jurisdiction had the case not been
transferred to the RTC of Mandaluyong.
The court cannot or will not determine a controversy involving a question which is
within the jurisdiction of the administrative tribunal, where the question demands
the exercise of sound administrative discretion requiring special knowledge,
experience and services in determining technical and intricate matters of fact.
However, the Court believes that the circumstances in the instant case do not
proscribe the application of the doctrine, as the role of SEC in determining technical
and intricate matters of special competence has been taken on by RTCs by virtue of
Republic Act No. 8799. Hence, the RTC of Mandaluyong where the intra-corporate
case is pending has the primary jurisdiction to determine the issues under contention
relating to the status of the domestic corporation, Saag Phils., Inc., and Saag Pte.
Ltd.; and the authority of petitioner to act on behalf of the domestic corporation, the
determination of which will have a direct bearing on the criminal case.The law
recognizes that, in place of the SEC, the regular courts now have the legal
competence to decide intra-corporate disputes.
REPUBLIC OF THE PHILIPPINES, ET. AL. , Petitioner

vs. CARLITO LACAP, Respondent
G.R. NO. 158253, MARCH 2, 2007
FACTS:
Respondent, doing business under the name of Carwin Construction, sought to
collect payment for the completed project by virtue of the Contract Agreement with
Department of Public Works and Highways (DPWH). The Commission on Audit (COA)
disapproved the final release of funds because respondents license had expired at
the time of the execution of the contract. DPWH Legal Department opined that RA
No. 4566 known as Contractors License Law, does not provide that a contract
entered into after the license has expired is void thus recommended the payment to
respondent.
Respondent filed the complaint for Specific Performance and Damages before the
Regional Trial Court (RTC). Petitioner, thru the Office of the Solicitor General (OSG)
filed a Motion to Dismiss on the ground that complaint states no cause of action and
RTC had no jurisdiction since respondent did not appeal the COA decision.
Respondent filed an Opposition to the Motion to Dismiss. RTC denied the Motion to
Dismiss thus the OSG filed a Motion for Reconsideration but it was likewise denied.
OSG filed its Answer invoking defenses of non-exhaustion of administrative remedies
and doctrine of non-suability of the State. RTC rendered a decision in favor of
Respondent.
Dissatisfied, Republic filed an appeal with the Court of Appeals (CA). CA sustained
the RTC since the case involved the application of the principle of estoppel against
the Republic which is purely a legal question hence this petition.
ISSUES:
Republics contention is that the CA erred in not finding that Respondent has no
cause of action considering that:
a. Respondent failed to exhaust administrative remedies;
b. It is the COA which has primary jurisdiction to resolve respondents money claim.
HELD:
A. No, the CA did not err in holding that respondent did not fail to exhaust
administrative remedies. The general rule is that before a party may seek the
intervention of the court, he should first avail of all means afforded him by
administrative processes. The doctrine of exhaustion of administrative remedies has
exceptions such as where there is unreasonable delay or official inaction that will
irretrievably prejudice the complainant and where the question involved is purely
legal and will ultimately have to be decided by the courts of justice. Whether a
contractor with an expired license at the time of the execution of its contract is
entitled to be paid for completed projects is a pure question of law. RA No. 4566
merely provide for a fine for any contractor who, for a price, contracts without first
securing a license. It does not declare as void contracts such contracts. Thus
respondent should be paid for the projects he completed but such payment, however,
is without prejudice to the payment of fine prescribed under the law.
B. No, the CA did not err in holding that COA has no primary jurisdiction because
there involved a purely legal question thus final determination on the matter rests
not with them but with the courts of justice.

Gabriel Abad, et. al., vs Regional Trial Court of Manila G.R. No. L-65505,
October 12, 1987
FACTS:
The instant petition for Certiorari originated from a complaint by the petitioner filed
on August 18, 1978 against respondent Philippines American General Insurance
Company, Inc. for the enforcement of contract and recovery of loss of money
basically praying for, among other things, payment of the money value of the
respective accumulated sick leave with pay of the separated employees of
respondent company either thru retirement, retrenchment or resignation. Instead of
filing an answer thereto, PHILAMGEN moved to dismiss the complaint, which the
trial court granted in its order dated February 16,1979. After a denial of their motion
to reconsider the aforesaid order by the trial court on May 2, 1979, petitioners filed
before this Court a petition for Certiorari, docketed as G.R. No. 50563; setting aside
the orders dated February 16,1979 and May 2, 1979 and reinstating the dismissed
complaint.
The case was remanded to the trial court, unfortunately a fire destroyed the sala
wherein the entire records of Civil Case No.117708 were kept, however, it was
reconstituted and renumbered as Civil Case No. 82-1324. Thereafter, Philamgen filed
its Answer to the complaint. Judicial reorganization took place by the passage of
Executive Order No. 864 and the case was re-raffled to respondent Regional Trial
Court of Manila.
Respondent court motu proprio dismissed the complaint in Civil Case No. 82-1324
declaring that it lacked jurisdiction over the subject matter, being money claims
arising from employer-employee relations. Motion for reconsideration filed by
petitioner was denied by respondent judge. Hence, this petition for certiorari.
ISSUES:
Whether respondent court erred in reversing motu proprio this Honorable Supreme
Court`s decision in G.R. No. L-50563 by dismissing once again the petitioner`s action
on the erroneous ground of lack of jurisdiction.
Whether respondent court in holding itself a different court from the Court of First
Instance whose cases were merely taken over by the respondent court.
HELD:
Regarding the first issue, Section 1 of Executive Order No. 864 provides that the
Courts of First Instance shall be deemed automatically abolished upon the
constitution and organization of the courts provided in Batas Pambansa Blg. 129 as
of 12:00 o'clock midnight of January 17, 1983, which re-echoes a sentence in Section
44 of said Act. With the abolition of the Court of First Instance which was held in
G.R. No. 50563 as having jurisdiction over the case, the jurisdiction of said court was
abolished with it.

Of course, insofar as the reorganized courts vested with general jurisdiction, Batas
Pambansa Blg. 129 was and still the controlling law. When it comes to labor-related
actions, however, such as the one at bar, initial jurisdiction is vested on
administrative machineries provided for the expeditious settlement of labor or
industrial disputes.
Art. 217 provides that the labor arbiter shall have original and exclusive jurisdiction
to hear and decide cases involving all workers, whether agricultural or non-
agricultural, in disputes regarding all money claims of workers, including those
based on non-payment or underpayment of wages, overtime compensation,
separation pay and other benefits provided by law or appropriate agreement. Except
claims for employee`s compensation, social security, medicare and maternity
benefits. This provision was in force when the judicial reorganization took place.
However, it must be noted that this article of the Labor Code was originally Article
216 of PD 442, but subsequently renumbered to Art. 217, amended by PD 1367
which took effect 1 May 1978, further amended by PD 1691 which took effect 1 May
1980, then further amended by BP Blg. 130 which took effect on 21 August 1981
and finally amended by BP Blg. 227which took effect on 1 June 1982.
We are not unmindful of the fact that G.R. No. 50563 was decided by the highest
Court on the basis of the provisions of Article 217 of the Labor Code,as amended by
BP 1367, which took effect on 1 May 1978, but as heretofore indicated, subsequent
amendments of the same provision took place. In said decision in G.R. No. 50563,
mention was made of the amendment brought about by PD 1367 having been given
retroactive application. Following this rule of retrospective application, we can not
see any reason why the subsequent amendment to Article 217 of the Labor
Code,brought about by PD 1691, BP Blg. 130 and BP Blg. 227 may not also be
applied to this action which was filed on 28 August 1978.
This Court is not also unaware of that portion of Section 44 of BP Blg. 129 providing
that cases pending in the abolished courts shall be transferred to the appropriate
courts created in the Act, but it is evident that the phrase 'appropriate courts' must
have reference to those courts whose jurisdiction are clearly defined in other parts of
the law, otherwise a mere transitory provision will serve to negate the primary and
avowed purpose of the judiciary reorganization act. But be that as it may, this
provision has hardly any application here because this case is being referred to an
administrative machinery which has better facilities of adjudicating the claim more
expeditiously as they are not hamstrung by the strict rules of procedure and
evidence.
Regarding now to the second issue. Petitioner`s allegations do not deserve merit.
One of the important features in the Judiciary Reorganization is defining the
jurisdiction of the Regional Trial Courts (which took the place of the abolished Court
of First Instance), reading as follows: In all cases not within the jurisdiction of any
court, tribunal, person or body exercising judicial or quasi-judicial functions.
The Regional Trial Courts of today are actually same courts that functioned as Courts
of First Instance. There might have been a change in the name and in some
incidental features, but essentially, they are the same.
However, whereas before jurisdiction over money claims of laborers and employees
appertained to Courts of First Instance, the same are now to be taken cognizance of
by proper entities in the Department of Labor and Employment. The rule of
adherance of jurisdiction until a cause is finally resolved or adjudicated does not
apply when the change in jurisdiction is curative in character.
OPTIMA REALTY CORPORATION vs HERTZ PHIL. EXCLUSIVE CARS, INC.

GR NO. 183035; JANUARY 9, 2013
FACTS:
Petitioner Optima is engaged in the business of leasing and renting out commercial
spaces and buildings to its tenants. On December 12, 2002, Optima and Respondent
Hertz entered into a Contract of Lease over an office unit and parking slot in the
Optima Bulding for a period of 3 years. However, the lease agreement was amended
by shortening the lease period ot 2 years and 5 months. The lease period was from
October 1, 2003 to February 28, 2006.
Hertz requested Optima a 50% discount on its rent for the months of Maty to August
2005 since Hertz suffered 50% drop in its monthly sales and significant decrease in
its personnels productivity due to the commencement of renovations in the building.
However, Hertz failed to pay its rentals from August to December 2005 and January
to February 2006 notwithstanding the fact that Optima granted the formers request.
It also failed to pay its utility bills.
Optima sent a letter to Hertz, reminding the latter if it will renew its contract by a
new negotiation between them and upon written notice by the lessee to the lessor at
least 90 days before the termination of the lease period. Since Hertz failed to send
written notice renewing its contract and its desire to negotiate, Optima did not
renew the lease.

Hertz filed a Complaint for Specific Performance, Injunction, Damages and Sum of
money and prayed for the issuance of a TRO and writ of preliminary Injunction
against Optima. It sought the issuance of a TRO to enjoin Optima from committing
acts which would tend to disrupt its peaceful use and possession of the leased
premises and wit of preliminary injunction to order Optima to reconnect its utilities.
Thereafter, Optima demanded Hertz to surrender and vacate the leased premises
and pay P420,967.28 covering rental arrearages, unpaid utility bills and other
charges. Due to Hertzs refusal to vacate the leased premises, Optima filed an action
before the MeTC for Unlawful Detainer and Damages with Prayer for the Issuance of
a TRO and/or Preliminary Mandatory Injunction against Hertz.
MeTC rendered judgment in favor of Optima and ordered Hertz to vacate the leased
premises and to oder the amount of P420,967.28 representing its rentals arrearages
and utility charger as well as the payment for the monthly use and occupancy of the
premises from March 2006 until possession is restored to the plaintiff in the amount
of P54,200 per month.
RTC affirmed the decision of the MeTC. However, on appeal, the Court of Appeals
reversed and set aside the decision of the RTC. CA ruled that, due to the improper
service of summons, the MeTC failed to acquire jurisdiction over the person of
respondent Hertz.
Optima then filed Petition for review on Certiorari under Rule 45 with the SC
ISSUES:
1. Whether the MeTC properly acquired jurisdiction over the person of respondent
Hertz;
2. Whether the unlawful detainer case is barred by litis pendentia; and
3. Whether the ejectment of Hertz is proper.
HELD:
1. YES. MeTC acquired jurisdiction over the person of respondent Hertz. Jurisdiction
over the person of the defendant may be acquired either by service of summons or by
the defendants voluntary appearance in court and submission to its authority. In this
case, the MeTC acquired jurisdiction over the person of respondent Hertz by reason
of the latters voluntary appearance in court. In spite of the defective service of
summons, the defendant opted to file an Answer with Counterclaim with Leave of
Court. Furthermore, it never raised the defense of improper service of summons in
its answer with counterclaim.
2. No. the Unlawful detainer case is not barred by litis pendentia. The Court ruled
that while there is identity of parties in both cases, the rights asserted and the reliefs
prayed for under the Complaint for Specific Performance and those under the
present Unlawful Detainer Complaint are different. The Complaint for Specific
Performance seeks to compel Optima to: (1) renegotiate the contract of lease; (2)
reconnect the utilities at the leased premises; and (3) pay damages. On the other
hand, the unlawful detainer case sought the ejectment of defendant-appellant Hertz
from the leased premises and to collect arrears in rentals and utility bills. Rights
asserted and the reliefs sought in the two cases are different.
3. Yes. The eviction of respondent is proper. Failure of Hertz to pay rental arrearages
and uitility bills to Optima and the Expiration of the Contract of Lease without any

request from Hertz for a renegotiation at least 90 days prior to its expiration entitled
Lessor, Optima, to terminate the lease.
ABUBAKAR A. AFDAL and FATIMA A. AFDAL vs. ROMEO CARLOS

G.R. No. 173379 December 1, 2010
FACTS:
On 18 December 2003, respondent Romeo Carlos (respondent) filed a complaint for

unlawful detainer and damages against petitioners, Zenaida Guijabar (Guijabar),
et.al before the MTC Laguna. Respondent alleged that petitioners, Guijabar, and all
other persons claiming rights under them were occupying, by mere tolerance, a
parcel of land in respondents name. Respondent claimed that petitioner Abubakar
Afdal (petitioner Abubakar) sold the property to him but that he allowed petitioners
to stay in the property. On 25 August 2003, respondent demanded that petitioners,
Guijabar, and all persons claiming rights under them turn over the property to him
because he needed the property for his personal use.Respondent further alleged that
petitioners refused to heed his demand and he was constrained to file a complaint
before the Lupon ng Tagapamayapa(Lupon). According to respondent, petitioners
ignored the notices and the Lupon issued a "certificate to file action." Then,
respondent filed the complaint before the MTC.
Three attempts to serve the summons and complaint on petitioners but they failed to
file an answer.
Respondent filed an ex-parte motion and compliance with position paper submitting
the case for decision based on the pleadings on record
MTC ruled in favor of respondent and further issued a writ of execution.
Petitioners filed a petition for relief from judgment with the MTC. Respondent filed a
motion to dismiss or strike out the petition for relief. Subsequently, petitioners
manifested their intention to withdraw the petition for relief after realizing that it
was a prohibited pleading under the Revised Rule on Summary Procedure. The MTC
granted petitioners request to withdraw the petition for relief.
Petitioners filed the petition for relief before the RTC. They alleged that they are the
lawful owners of the property which they purchased and denied that they sold the
property to respondent. They also pointed out that they never received respondents
demand letter nor were they informed of, much less participated in, the proceedings
before the Lupon. Moreover, petitioners said they were not served a copy of the
summons and the complaint.
RTC DISMISSED the petition for relief. The court averred that it had no jurisdiction
over the petition because the petition should have been filed before the MTC in
accordance with Section 1 of Rule 38 of the Rules of Court which provides that a
petition for relief should be filed "in such court and in the same case praying that the
judgment, order or proceeding be set aside."
Petitioners filed a motion for reconsideration. RTC denied the motion. Hence, this
petition.
ISSUES:
1. WON RTC erred in dismissing their petition for relief from judgment.
2. WON there was a valid service of summons
HELD:
I. RTC did not err in dismissing the petition for relief from judgment of the MTC.
Petitioners cannot file the petition for relief with the MTC because it is a prohibited
pleading in an unlawful detainer case. Petitioners cannot also file the petition for
relief with the RTC because the RTC has no jurisdiction to entertain petitions for
relief from judgments of the MTC. The remedy of petitioners in such a situation is to
file a petition for certiorari with the RTC under Rule 65 of the Rules of Court on the
ground of lack of jurisdiction of the MTC over the person of petitioners in view of the
absence of summons to petitioners.
II. There was no valid service of summons. In long line of cases, the SC held that the
impossibility of personal service justifying availment of substituted service should be
explained in the proof of service; why efforts exerted towards personal service failed.
The pertinent facts and circumstances attendant to the service of summons must be
stated in the proof of service otherwise, the substituted service cannot be upheld.
According to the records of the MTC, there were 3 attempts to serve the summons to
the defendants. The first was unserved, the second was served to one Gary Akob
and the last, where the return was duly served but refused to sign. The indorsements
in this case failed to state that prompt and personal service on petitioners was
rendered impossible. It failed to show the reason why personal service could not be
made. It was also not shown that efforts were made to find petitioners personally and
that said efforts failed. These requirements are indispensable because substituted
service is in derogation of the usual method of service. Failure to faithfully, strictly,
and fully comply with the statutory requirements of substituted service renders such
service ineffective.
Likewise, nowhere in the return of summons or in the records of the case was it
shown that Gary Acob, the person on whom substituted service of summons was
effected, was a person of suitable age and discretion residing in petitioners
residence.
The process server failed to specify Gary Acobs age, his relationship to petitioners
and to ascertain whether he comprehends the significance of the receipt of the
summons and his duty to deliver it to petitioners or at least notify them of said
receipt of summons. Jurisdiction over the defendant is acquired either upon a valid
service of summons or the defendants voluntary appearance in court. If the
defendant does not voluntarily appear in court, jurisdiction can be acquired by
personal or substituted service of summons as laid out under Sections 6 and 7 of
Rule 14 of the Rules of Court, which state: 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.
Sec. 7. Substituted Service. - If, for justifiable causes, the defendant cannot be
served within a reasonable time as provided in the preceding section, service may be
effected (a) by leaving copies of the summons at the defendants residence with some
person of suitable age and discretion then residing therein, or (b) by leaving the
copies at defendants office or regular place of business with some competent person
in charge thereof.
Any judgment of the court which has no jurisdiction over the person of the defendant
is null and void.

FE V. RAPSING et. al v. HON. JUDGE MAXIMINO R. ABLES
G.R. No. 171855; 15 October 2012
FACTS:
Respondents, members of the Alpha Company, 22nd Infantry Battalion, 9th Division
of the Philippine Army based at Cabangcalan Detachment, Aroroy, Masbate, alleged
to have received information about the presence of armed elements reputed to be
New Peoples Army partisans in Sitio Gaway-gaway, Barangay Lagta, Baleno,
Masbate. Acting on the information, they coordinated with the PNP and proceeded to
the place.
Thereat, they encountered armed elements which resulted in an intense firefight.

When the battle ceased, seven persons, namely: Teogenes Rapsing, Teofilo
Villanueva, Marianito Villanueva, Edwin Aparejado, Isidro Espino, Roque Tome and
Norberto Aranilla were found sprawled on the ground lifeless. The post-incident
report of the Philippine Army states that a legitimate military operation was
conducted and in the course of which, the victims, armed with high-powered
firearms, engaged in a shootout with the military.
On the other hand, petitioners complained that there was no encounter that ensued
and that the victims were summarily executed in cold blood by respondents. After
investigation, the NBI recommended to the Provincial Prosecutor of Masbate City
that a preliminary investigation be conducted against respondents for the crime of
multiple murder. NBI relied on the statements of witnesses who claim that the
military massacred helpless and unarmed civilians.
Subsequently, the Provincial prosecutor recommended, through a Resolution, the

filing of an Information for Multiple Murder. Consequently, respondents were
charged with multiple murder.
A warrant for the arrest then was issued by the RTC of Masbate City, Branch 47, but
before respondents could be arrested, the Judge Advocate General's Office of the
AFP filed an Omnibus Motion with the trial court seeking the cases against
respondents be transferred to the jurisdiction of the military tribunal.
Initially, the trial court denied the motion filed by the JAGO on the ground that
respondents have not been arrested. A Motion for Reconsideration was then filed by
the JAGO and the trial court granted the Omnibus Motion and the entire records of
the case were turned over to the Commanding General of the 9th Infantry Division,
Philippine Army, for appropriate action.
Petitioners sought reconsideration of the Order but was denied by the trial court.
They alleged that the trial court gravely abused its discretion amounting to excess of
jurisdiction when it transferred the criminal case filed against the respondents to the
jurisdiction of the military tribunal, as jurisdiction over the same is conferred upon
the civil courts by Republic Act No. 7055.
On the other hand, the respondents and the Office of the Solicitor General alleged
that the acts complained of are service connected and falls within the jurisdiction of
the military court.
ISSUE:
Whether or not Hon. Judge Maximino Ables gravely abused his discretion amounting
to excess of jurisdiction in granting the Motion to Transfer the instant criminal case
to the jurisdiction of the Military Court, as said tribunal, based on facts and in law,
has no jurisdiction over the murder case.
HELD: YES.
The trial court gravely abused its discretion in not taking cognizance of the case,
which actually falls within its jurisdiction.
It is an elementary rule of procedural law that jurisdiction over the subject matter of
the case is conferred by law and is determined by the allegations of the complaint
irrespective of whether the plaintiff is entitled to recover upon all or some of the
claims asserted therein. As a necessary consequence, the jurisdiction of the court
cannot be made to depend upon the defenses set up in the answer or upon the
motion to dismiss, for otherwise, the question of jurisdiction would almost entirely
depend upon the defendant. What determines the jurisdiction of the court is the
nature of the action pleaded as appearing from the allegations in the complaint. The
averments in the complaint and the character of the relief sought are the matters to
be consulted.
In the case at bar, the information states that respondents, conspiring together and
mutually helping with one another, taking advantage of their superior strength, as
elements of the Philippine Army, armed with their government-issued firearms with
intent to kill, by means of treachery and evident premeditation, did then and there
willfully, unlawfully and feloniously attack, assault and shoot the victims, hitting
them on different parts of their bodies, thereby inflicting upon them multiple gunshot
wounds which caused their deaths.
Murder is a crime punishable under Article 248 of the RPC as amended, and is within
the jurisdiction of the RTC. Hence, irrespective of whether the killing was actually
justified or not, jurisdiction to try the crime charged against the respondents has
been vested upon the RTC by law.
In view of the provisions of R.A. 7055, the military tribunals cannot exercise
jurisdiction over respondents' case since the offense for which they were charged is
not included in the enumeration of service-connected offenses or crimes as
provided for under Section 1 thereof. The said law is very clear that the jurisdiction
to try members of the AFP who commit crimes or offenses covered by the RPC, and
which are not service-connected, lies with the civil courts. Where the law is clear and
unambiguous, it must be taken to mean exactly what it says and the court has no
choice but to see to it that its mandate is obeyed. There is no room for interpretation,
but only application. Hence, the RTC cannot divest itself of its jurisdiction over the
alleged crime of multiple murder.
Mendoza v. Germino and Germino, GR No. 165676, Novermber 22, 2010.
FACTS:
Plaintiff was the owner of a 5-hectare land in Soledad, Sta. Rosa, Nueva Ecija. Herein
respondent unlawfully entered the said property by means of strategy and stealth,
without the knowledge and consent of petitioner, and said respondent refused to
vacate the land despite demands. Thus, petitioner filed a complaint for forcible entry
with the MTC of Sta. Rosa, Nueva Ecija. Respondent filed an answer claiming that
his brother respondent Benigno was the plaintiffs agricultural lessee and he merely
helped the latter in the cultivation as a member of the immediate farm household.
After some postponements, plaintiffs moved to remand the case to the Dept. of
Agriculture Adjudication Board (DARAB), in view of the tenancy issue raised by
respondent Narciso.
The MTC ordered the remand of the case to the DARAB, Cabanatuan City, without a
hearing and despite objection by respondent Narciso. Plaintiff afterwards filed an
amended complaint with the Provincial Agrarian Reform Adjudicator (PARAD)
impleading respondent Benigno (brother). They alleged that a different person was
the agricultural lessee of the land, contrary to respondents claim that it was his
respondent Benigno. Plaintiff further alleged that respondent Benigno unlawfully
entered the subject property through strategy and stealth and without their
knowledge and consent, and thereafter transferred possession to respondent
Narciso. In both cases, respondents refused to vacate despite demands, and also
appropriated the fruits therein. The PARAD ruled in favor of plaintiff and that
respondents are usurpers considering their failure to prove respondent Benigno as
the agricultural lessee, thus, they should vacate the land and pay for damages.
Respondents filed a notice of appeal to the DARAB arguing that the MTCs referral to
the DARAB was void. The DARAB affirmed the PARAD holding that it acquired
jurisdiction because of the amended complaint that alleged an agrarian dispute.
Thus, a petition for review under Rule 43 to the Court of Appeals (CA).
The CA ruled that the MTC erred in referring the case to the DARAB since the
material allegations and the relief sought were for forcible entry, and that the DARAB
did not acquire jurisdiction. CA denied the motion for reconsideration.
ISSUE:
WON the DARAB had jurisdiction over the case.
HELD: NO.
Jurisdiction is conferred by law. Also, jurisdiction over the subject matter is

determined by the allegations in the complaint. Under the law, the MTC has
exclusive jurisdiction over ejectment suits which shall be governed by the Revised
Rule on Summary Procedure. On the other hand, the DARAB has exclusive and
primary jurisdiction to determine and adjudicate all agrarian disputes involving the
implementation of the CARP and other similar laws. For a case to involve an agrarian
dispute, there must be present the requisites of an agricultural tenancy relationship:
a) Parties are the landowner and the tenant
b) Subject is agricultural land.
c) There is consent.
d) Purpose is agricultural production.
e) There is personal cultivation.
f) There is sharing of harvest or payment of rental.
In this case, both the allegations and reliefs prayed for was clearly an action for
forcible entry.Also, respondents defense of tenancy did not automatically divest the
court of its jurisdiction. Precisely, it had to conduct a preliminary conference in order
to determine whether it was an ejectment suit or an agrarian dispute and whether it
has jurisdiction or none. After all, jurisdiction is not affected by the pleas or theories
set by defendant in an answer or motion to dismiss. The amended complaint also did
not confer jurisdiction to the DARAB in the absence of any allegation of tenancy
relationship between the parties.
Remedios Antonino v. The Register of Deeds of Makati City, et al., G.R. No.
185663, June 20, 2012
FACTS:
Remedios Antonino was a lessee of Tian Tan Su in the latters residential property
located in Makati City. The lease contract between the parties granted Antonino the
right of first refusal should Su sell the property. Later, Su and Antonino had an
Undertaking Agreement that Su would sell Antonino the subject property worth
P39,500,000.00. However, there was a disagreement as to who between them will
pay the capital gains tax, and the sale of the property did not proceed. Antonino then
filed a complaint against Su for the reimbursement of the cost of repairs and
payment of damages, in the RTC of Makati. Later on, Antonino amended the
complaint to include the enforcement of the Undertaking Agreement. The RTC
dismissed the complaint based on improper venue and the non-payment of docket
fees.
The RTC ruled that the complaint was a personal action and the venue should thus
be set based on the respective residence of the plaintiff and the defendant. Antonino,
the plaintiff, resided in Muntinlupa City while Su, the defendant, resided in Manila
City. Due to the dismissal of the complaint, Su filed an Omnibus Motion praying for
the cancellation of the notice of lis pendens on the title of the subject property, and
the issuance of a summary judgment. Antonino moved to reconsider, claiming that
the action is a real action and that the place where the subject property is located
should be the basis for the venue of the complaint. She also presented evidence from
the COMELEC which stated that she is a resident of Makati City. Despite these
attempts, the RTC denied the motion for reconsideration. Antonino filed another
Motion for Reconsideration, claiming and insisting that she followed the rules on
motions, despite the fact that Su was only given the notice and copy of the motion for
hearing the day before.
The RTC denied the Motions for Reconsideration from both parties. It did not cancel
the notice of lis pendens and ruled that it did not acquire jurisdiction due to
Antoninos failure to pay the docket fees. The RTC also affirmed its ruling that the
action is a personal action and the complaint was properly dismissed due to improper
venue. Antonino filed with the CA a petition for the annulment of judgment.
The CA dismissed the petition. It held that Antonino failed to prove any exceptional
circumstances warranting the remedy of annulment of judgment, and the fact that
she failed to appeal within the period allowed. The CA, however, ruled on the merits
and further affirmed the RTCs findings that the action is indeed a personal action to
enforce a contract, which further reinforced the dismissal of the complaint based on
improper venue. The CA also ruled that the petition for the annulment of judgment
only embraced two circumstances: 1) extrinsic fraud, and 2) lack of jurisdiction.
Grave abuse of discretion, according to the CA, did not necessarily include the lack
of jurisdiction. A court that abuses its discretion may yet have jurisdiction over a
case, while a court that does not have jurisdiction per se cannot abuse it. Antonino
filed a motion for reconsideration but was denied by the CA, hence recourse to the
SC via petition for review under Rule 45.
ISSUE/S:
Is Antoninos reliance on the remedy of petition for annulment of judgment against a
final and executory order of the RTC proper?
HELD:
No, reliance on annulment of judgment is not proper in this case.
Annulment of judgment is an extraordinary remedy that is used when either two of

the following circumstances exist: 1) Extrinsic Fraud, and 2) Lack of Jurisdiction.
This remedy cannot be availed of if any of the two circumstances are not proven
sufficiently. Annulment of judgment is a challenge to the validity of a courts
judgment, and is not to be used lightly. It is antithetical to the concept of finality of
judgment. Likewise, annulment of judgment is not an alternative to appeal, as the
grounds for appeal are different from the grounds for annulment of judgment.
Annulment of judgment cannot be a substitute for a lost appeal. In this case,
Antonino failed to appeal the case when she relied on the petition for the annulment
of judgment. The RTCs judgment was already final and executory when the petition
was filed. It was due to her own negligence that the period of appeal lapsed before
she could timely file one in the CA. Similarly, a second Motion for Reconsideration is
an improper remedy when a court denies the first Motion for Reconsideration. The
purpose of a Motion for Reconsideration is to allow a court to correct itself before
elevating the case on a appeal to a higher court. It cannot be filed twice as a
substitute for an appeal. Lastly, grave abuse of discretion is not a ground to annul a
final and executory judgment. The RTC was correct in dismissing the complaint
based on improper venue as the action was a personal action. The Undertaking
Agreement made by both parties being in question, the transfer of ownership of the
subject property did not yet pass to Antonino. She failed to prove that there was
already an actual or constructive delivery of the property. As the ownership of the
property was not an issue, it could not ripen into a real action that would allow the
venue Antonino chose for the dismissed action.
As the complaint was dismissed for improper venue the other ground, that of the
non-payment of docket fees, is redundant to resolve as the RTC decision has become
final and executory.
Petition DENIED. CA Decision and Resolution Affirmed.

DELFIN LAMSIS, MAYNARD MONDIGUING, JOSE VALDEZ, JR. and Heirs of AGUSTIN
KITMA, represented by EUGENE KITMA, Petitioners,
vs.
MARGARITA SEMON DONG-E, Respondent.
FACTS:
This case involves a conflict of ownership and possession over an untitled parcel of land located in Baguio
City and is part of a larger parcel of land. Petitioners are the actual occupants of Lot No. 1, respondent is
claiming ownership thereof and is seeking to recover its possession.
According to respondent, her familys ownership and occupation of Lot No. 1 can be traced as far back as
1922 to her late grandfather, Ap-ap. Upon Ap-aps death, the property was inherited by his children, who
obtained a survey plan in 1964, which included Lot No. 1. On the same year, they declared the property for
taxation purposes in the name of "The Heirs of Ap-ap." which bears a notation that reads: "Reconstructed
from an old Tax Declaration No. 363 dated May 10, 1922 per true of same presented." 8 The heirs of Ap-ap
then executed, for a P500.00 consideration, a Deed of Quitclaim in favor of their brother Gilbert Semon
(Respondents father)
Gilbert Semon together with his wife, allowed his in-laws Manolo Lamsis and Nancy Lamsis-Kitma, to stay
on a portion of Lot No. 1 together with their respective families, they were allowed to introduce
improvements. When Manolo Lamsis and Nancy Lamsis-Kitma died, their children, petitioners Delfin
Lamsis (Delfin) and Agustin Kitma (Agustin), took possession of certain portions of Lot No. 1.
Delfin possessed 4,000 square meters of Lot No. 1, while Agustin occupied 5,000 square meters
thereof.12 Nevertheless, the heirs of Gilbert Semon tolerated the acts of their first cousins. When Gilbert
Semon died, his children extrajudicially partitioned the property among themselves and allotted Lot No. 1
thereof in favor of respondent. Since then, Margarita allegedly paid the realty tax over Lot No. 1 and
occupied and improved the property together with her husband; while at the same time, tolerating her first
cousins occupation of portions of the same lot.
This state of affairs changed when petitioners Delfin and Agustin allegedly began expanding their
occupation on the subject property and selling portions thereof to petitioners Maynard Mondiguing
(Maynard) and Jose Valdez (Jose). Respondent filed a complaint for recovery of ownership, possession,
reconveyance and damages against petitioners of Lot No. 1 before the Regional Trial Court (RTC) of Baguio
City.
The complaint prayed for the annulment of the sales to Maynard and Jose and for petitioners to vacate the
portions of the property which exceed the areas allowed to them by respondent. Margarita claimed that, as
they are her first cousins, she is willing to donate to Delfin and Agustin a portion of Lot No. 1, provided that
she retains the power to choose such portion.
Petitioners denied respondentss claims of ownership and possession. According to Delfin and Agustin, Lot
No. 1 is a public land claimed by the heirs of Joaquin Smith (not parties to the case), which gave their
permission for Delfin and Agustins parents to occupy the land. They also presented their neighbors who
testified that it was Delfin and Agustin as well as their respective parents who occupied Lot No. 1, not
respondent and her parents. Delfin and Agustin also assailed the muniments of ownership presented by
Respondent as fabricated, unauthenticated, and invalid. It was pointed out that the Deed of Quitclaim,
allegedly executed by all of Ap-aps children, failed to include two Rita Bocahan and Stewart Sito.
In order to debunk petitioners claim that the Smiths owned the subject property, respondent presented a
certified copy of a Resolution from the Land Management Office denying the Smiths application for
recognition of the subject property as part of their ancestral land, which explains that the application had to
be denied because the Smiths did not "possess, occupy or utilize all or a portion of the property x x x. The
actual occupants (who were not named in the resolution) whose improvements are visible are not in any way
related to the applicant or his co-heirs."
To bolster her claim of ownership and possession, respondent introduced as evidence an unnumbered
resolution of the Community Special Task Force on Ancestral Lands (CSTFAL) of the Department of
Environment and Natural Resources (DENR), acting favorably on her and her siblings ancestral land claim.
The resolution was not signed by two members of the CSTFAL on the ground that the signing of the
unnumbered resolution was overtaken by the enactment of the Republic Act (RA) No. 8371 or the
Indigenous Peoples Rights Act of 1997 (IPRA). The IPRA removed the authority of the DENR to issue
ancestral land claim certificates and transferred the same to the National Commission on Indigenous Peoples
(NCIP). The Ancestral Land Application No. Bg-L-064 of the Heirs of Gilbert Semon was transferred to the
NCIP, Cordillera Administrative Region, La Trinidad, Benguet and re-docketed as Case No. 05-RHO-CAR-
03.The petitioners filed their protest in the said case before the NCIP. The same has been submitted for
resolution.
The Regional Trial Court ruled in favor of the respondent. It appears that no motion for reconsideration was
filed before the trial court. Nevetheless, the trial court issued an Order allowing the petitioners Notice of
Appeal.
The petitioners appealed to the Court of Appeals, which affirmed the RTC. The sole issue resolved by the
appellate court was whether the trial court erred in ruling in favor of respondent in light of the adduced
evidence. Citing the rule on preponderance of evidence, the CA held that the respondent was able to
discharge her burden in proving her title and interest to the subject property. Her documentary evidence were
amply supported by the testimonial evidence of her witnesses. In contrast, petitioners only made bare
allegations in their testimonies that are insufficient to overcome respondents documentary evidence.
Petitioners moved for a reconsideration of the adverse decision but the same was denied. Hence this petition
ISSUES:
The petitioners present the following issues for our consideration:
1. Whether the appellate court disregarded material facts and circumstances in affirming the trial
courts decision;
2. Whether petitioners have acquired the subject property by prescription;
3. Whether the trial court has jurisdiction to decide the case in light of the effectivity of RA 8371 or
the Indigenous Peoples Rights Act of 1997 at the time that the complaint was instituted;

4. If the trial court retains jurisdiction, whether the ancestral land claim pending before the NCIP
should take precedence over the reivindicatory action.62
HELD:
1. Whether the appellate court disregarded material facts and circumstances in affirming the trial courts
decision
Both the trial and the appellate courts ruled that respondent has proven her claims of ownership and
possession with a preponderance of evidence. Petitioners argue that the two courts erred in their appreciation
of the evidence. They ask the Court to review the evidence of both parties, despite the CAs finding that the
trial court committed no error in appreciating the evidence presented.
Hence, petitioners seek a review of questions of fact, which is beyond the province of a Rule 45 petition.
Since it raises essentially questions of fact, this assignment of error must be dismissed for it is settled that
only questions of law may be reviewed in an appeal by certiorari.
2. Whether petitioners have acquired the subject property by prescription
Petitioners admitted that they had occupied the property by tolerance of the owner thereof. Having made this
admission, they cannot claim that they have acquired the property by prescription unless they can prove acts
of repudiation. It is settled that possession, in order to ripen into ownership, must be in the concept of an
owner, public, peaceful and uninterrupted. Possession not in the concept of owner, such as the one claimed
by petitioners, cannot ripen into ownership by acquisitive prescription, unless the juridical relation is first
expressly repudiated and such repudiation has been communicated to the other party. Acts of possessory
character executed due to license or by mere tolerance of the owner are inadequate for purposes of
acquisitive prescription. Possession by tolerance is not adverse and such possessory acts, no matter how long
performed, do not start the running of the period of prescription. Petitioners made no effort to allege much
less prove any act of repudiation sufficient for the reckoning of the acquisitive prescription.
3. Whether the ancestral land claim pending before the National Commission on Indigenous Peoples
(NCIP) should take precedence over the reivindicatory action
The application for issuance of a Certificate of Ancestral Land Title pending before the NCIP is akin to a
registration proceeding. It also seeks an official recognition of ones claim to a particular land and is also in
rem. The titling of ancestral lands is for the purpose of "officially establishing" ones land as an ancestral
land. Just like a registration proceeding, the titling of ancestral lands does not vest ownership upon the
applicant but only recognizes ownership that has already vested in the applicant by virtue of his and his
predecessor-in-interests possession of the property since time immemorial.
A registration proceeding is not a conclusive adjudication of ownership. In fact, if it is later on found in

another case (where the issue of ownership is squarely adjudicated) that the registrant is not the owner of the
property, the real owner can file a reconveyance case and have the title transferred to his name. Given that a
registration proceeding (such as the certification of ancestral lands) is not a conclusive adjudication of
ownership, it will not constitute litis pendentia on a reivindicatory case where the issue is ownership.
Since there is no litis pendentia, we cannot agree with petitioners contention that respondent committed
forum-shopping. Settled is the rule that "forum shopping exists where the elements of litis pendentiaare
present or where a final judgment in one case will amount to res judicata in the other."
4. Whether the trial court has jurisdiction to decide the case in light of the effectivity of RA 8371 or the
Indigenous Peoples Rights Act of 1997 at the time that the complaint was instituted

For the first time in the entire proceedings of this case, petitioners raise the trial courts alleged lack of
jurisdiction over the subject-matter in light of the effectivity of the IPRA at the time that the complaint was
filed in 1998. They maintain that, under the IPRA, it is the NCIP which has jurisdiction over land disputes
involving indigenous cultural communities and indigenous peoples.
As a rule, an objection over subject-matter jurisdiction may be raised at any time of the proceedings. This is
because jurisdiction cannot be waived by the parties or vested by the agreement of the parties. Jurisdiction is
vested by law, which prevails at the time of the filing of the complaint.
An exception to this rule has been carved by jurisprudence. In the seminal case of Tijam v. Sibonghanoy, the
Court ruled that the existence of laches will prevent a party from raising the courts lack of jurisdiction.
Laches is defined as the "failure or neglect, for an unreasonable and unexplained length of time, to do that
which, by exercising due diligence, could or should have been done earlier; it is negligence or omission to
assert a right within a reasonable time, warranting the presumption that the party entitled to assert it either
has abandoned or declined to assert it." Wisely, some cases have cautioned against applying Tijam, except for
the most exceptional cases where the factual milieu is similar to Tijam.
In Tijam, the surety could have raised the issue of lack of jurisdiction in the trial court but failed to do so.
Instead, the surety participated in the proceedings and filed pleadings, other than a motion to dismiss for
lack of jurisdiction. When the case reached the appellate court, the surety again participated in the case and
filed their pleadings therein. It was only after receiving the appellate courts adverse decision that the surety
awoke from its slumber and filed a motion to dismiss, in lieu of a motion for reconsideration. The CA
certified the matter to this Court, which then ruled that the surety was already barred by laches from raising
the jurisdiction issue.
In case at bar, the application of the Tijam doctrine is called for because the presence of laches cannot be
ignored. If the surety in Tijam was barred by laches for raising the issue of jurisdiction for the first time in
the CA, what more for petitioners in the instant case who raised the issue for the first time in their petition
before this Court.
At the time that the complaint was first filed in 1998, the IPRA was already in effect but the petitioners
never raised the same as a ground for dismissal; instead they filed a motion to dismiss on the ground that the
value of the property did not meet the jurisdictional value for the RTC. They obviously neglected to take the
IPRA into consideration.
When the amended complaint was filed in 1998, the petitioners no longer raised the issue of the trial courts
lack of jurisdiction. Instead, they proceeded to trial, all the time aware of the existence of the IPRA as
evidenced by the cross-examination conducted by petitioners lawyer on the CSTFAL Chairman Guillermo
Fianza. In the cross-examination, it was revealed that the petitioners were aware that the DENR, through the
CSTFAL, had lost its jurisdiction over ancestral land claims by virtue of the enactment of the IPRA. They
assailed the validity of the CSTFAL resolution favoring respondent on the ground that the CSTFAL had been
rendered functus officio under the IPRA. Inexplicably, petitioners still did not question the trial courts
jurisdiction.1avvphi1
When petitioners recoursed to the appellate court, they only raised as errors the trial courts appreciation of
the evidence and the conclusions that it derived therefrom. In their brief, they once again assailed the
CSTFALs resolution as having been rendered functus officio by the enactment of IPRA. But nowhere did
petitioners assail the trial courts ruling for having been rendered without jurisdiction.
It is only before this Court, eight years after the filing of the complaint, after the trial court had already
conducted a full-blown trial and rendered a decision on the merits, after the appellate court had made a
thorough review of the records, and after petitioners have twice encountered adverse decisions from the trial

and the appellate courts that petitioners now want to expunge all the efforts that have gone into the
litigation and resolution of their case and start all over again. This practice cannot be allowed.
Thus, even assuming arguendo that petitioners theory about the effect of IPRA is correct (a matter which
need not be decided here), they are already barred by laches from raising their jurisdictional objection under
the circumstances.
Corazon Jalbuena De Leon vs. Court Of Appeals and Uldarico Inayan

G.R. No. 96107 June 19, 1995
FACTS:
Jesus Jalbuena entered into a verbal lease contract with Uldarico Inayan, for one year renewable for the
same period. Inayan was allowed to continue with the lease from year to year. Corazon Jalbuena de Leon is
the daughter of Jesus and the transferee of the subject property. Inayan ceased paying the agreed rental and
instead, asserted dominion over the land. When asked by De Leon to vacate the land, he refused to do so,
prompting De Leon to file a complaint before the RTC for "Termination of Civil Law Lease; Recovery of
Possession, Recovery of Unpaid Rentals and Damages. Inayan claimed tenancy dispute thus the lower court
issued an order adopting the procedure in agrarian cases but still rendered decision Declaring the lease
contract between plaintiff and defendant as a civil law lease, and that the same has already been terminated
due to defendant's failure to pay his rentals from 1983 up to the present.
On appeal to the CA, Inayan raised the sole issue of jurisdiction and alleged that the lower court, acting as
Court of Agrarian Relations, had no jurisdiction over the action. The CA, at first affirmed the trial court's
decision, but when an MR filed by Inayan it then set aside its earlier decision and dismissed the civil case
for want of jurisdiction. In its amended decision, the appellate court held that petitioner's complaint below
was anchored on accin interdictal , a summary action for recovery of physical possession that should have
been brought before the proper inferior court.
ISSUE:
Whether or not the RTC, then acting as a court of agrarian relations employing agrarian procedure, had
jurisdiction to try the suit filed by De Leon?
HELD:
Yes. 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. In order to determine whether the court below had
jurisdiction, it is necessary to first ascertain the nature of the complaint filed before it. A study of the
complaint instituted by petitioner in the lower court reveals that the case is, contrary to the findings of the
respondent appellate court, not one of unlawful detainer. Not being merely a case of ejectment, the regional
trial court possessed jurisdiction to try and resolve the case.

SERAFIN TIJAM, ET AL., Plaintiffs-Appellees,
-versus-
MAGDALENO SIBONGHANOY ALIAS GAVINO SIBONGHANOY, ET AL.,
Defendants, MANILA SURETY AND FIDELITY CO., INC. (CEBU BRANCH)
bonding Company and defendant-appellant, GR No. L-21450April 15, 1968
FACTS:
On July 19, 1948, the spouses Serafin Tijam and Felicitas Tagalog filed a civil case in
the Court of First Instance of Cebu (CFI) against the spouses Magdaleno
Sibonghanoy and Lucia Baguio to recover from them the sum of P1,908.00, with
legal interest.
As prayed for in the complaint, a writ of attachment was issued by the court against
the Sibonghanoys properties, but was soon dissolved after the filing of a counter-
bond by the latter and the Manila Surety and Fidelity Co., Inc.
Trial Courts Ruling Favored the plaintiffs.
The plaintiffs moved for the issuance of a writ of execution against the Suretys bond
after the writ of execution against the defendants was returned unsatisfied. The
Surety filed a written opposition against such writ upon two grounds, namely, (1)
Failure to prosecute and (2) Absence of a demand upon the Surety for the payment of
the amount due under the judgment. The Surety prayed the Court not only to deny
the motion for execution against its counter-bond but also the following affirmative
relief: to relieve the herein bonding company of its liability, if any, under the bond in
question. Such motion was denied as there was no previous demand made on the
Surety for the satisfaction of the judgment.
Thereafter the necessary demand was made, and upon failure of the Surety to satisfy
the judgment, the plaintiffs filed a second motion for execution against the counter-
bond.
On the date set for the hearing thereon, the Court, upon motion of the Suretys
counsel, granted the latter a period of five days within which to answer the motion.
Upon its failure to file such answer, the Court granted the motion for execution and
the corresponding writ was issued. Subsequently, the Surety moved to quash the writ
on the ground it was issued without the required summary hearing provided for in

Section 17 of Rule 59 of the Rules of Court. The Surety, then, appealed to the Court
of Appeals.
Court of Appeals Ruling Affirmed the orders appealed from (December 11, 1962)
On January 10, 1963, two days after the Court granted its motion asking for
extension of time to file a motion for reconsideration, Surety filed a motion to
dismiss, alleging that since the case was filed on July 19, 1948, a month after the
effectivity of the Judiciary Act of 1948, Section 88 of which placed within the original
exclusive jurisdiction of inferior courts all civil actions where the value of the
subject-matter or the amount of the demand does not exceed P2,000.00, exclusive of
interest and costs, the CFI therefore had no jurisdiction to try and decide the case.
On May 20, 1963, Court of Appeals resolved to set aside its decision and to certify
the case to the Supreme Court.
ISSUE:
Whether or not the Surety is estopped from questioning the jurisdiction of the CFI of
Cebu for the first time upon appeal.
HELD:
YES. The Supreme Court believes that the Surety is now barred by laches from
invoking such plea, almost fifteen years from the commencement of the action on
July 19, 1948, before filing its motion to dismiss on January 12, 1963, raising the
question of lack of jurisdiction for the first time.
A party may be estopped or barred from raising a question in different ways and for
different reasons. Thus we speak of estoppel in pais, of estoppel by deed or by
record, and of estoppel by laches.
Laches, in a general sense, is failure or neglect, for an unreasonable and unexplained

length of time, to do that which, by exercising due diligence, could or should have
been done earlier; it is negligence or omission to assert a right within a reasonable
time, warranting a presumption that the party entitled to assert it either has
abandoned it or declined to assert it.
The doctrine of laches or of stale demands is based upon grounds of public policy
which requires, for the peace of society, the discouragement of stale claims and,
unlike the statute of limitations, is not a mere question of time but is principally a
question of the inequity or unfairness of permitting a right or claim to be enforced or
asserted. It has been held that a party cannot invoke the jurisdiction of a court to
secure affirmative relief against his opponent and, after obtaining or failing to obtain
such relief, repudiate or question that same jurisdiction.
The question of whether the court had jurisdiction either of the subject matter of the
action or of the parties was not important in such cases because the party is barred
from such conduct, not because the judgment or order of the court is valid and
conclusive as an adjudication, but for the reason that such a practice cannot be
tolerated obviously for reasons of public policy.
Furthermore, it has also been held that after voluntarily submitting a cause and
encountering an adverse decision on the merits, it is too late for the loser to question
the jurisdiction or power of the court. And in Littleton vs. Burgess, 16 Wyo. 58, the
Court said that it is not right for a party who has affirmed and invoked the

jurisdiction of a court in a particular matter to secure an affirmative relief, to
afterwards deny that same jurisdiction to escape a penalty.
The facts of this case show that from the time the Surety became a quasi-party on
July 31, 1948, it could have raised the question of the lack of jurisdiction of the Court
of First Instance of Cebu to take cognizance of the present action by reason of the
sum of money involved which, according to the law then in force, was within the
original exclusive jurisdiction of inferior courts. It failed to do so. Instead, at several
stages of the proceedings in the court a quo as well as in the Court of Appeals, it
invoked the jurisdiction of said courts to obtain affirmative relief and submitted its
case for a final adjudication on the merits. It was only after an adverse decision was
rendered by the Court of Appeals that it finally woke up to raise the question of
jurisdiction. Were We to sanction such conduct on its part, We would in effect be
declaring as useless all the proceedings had in the present case since it was
commenced on July 19, 1948 and compel the judgment creditors to go up their
Calvary once more. The inequity and unfairness of this is not only patent but
revolting.
Dispositive Portion:
UPON ALL THE FOREGOING, the orders appealed from are hereby affirmed, with
costs against the appellant Manila Surety and Fidelity Company, Inc.
FIRST CORPORATION, Petitioner, v. FORMER SIXTH DIVISION OF THE

COURT OF APPEALS, BRANCH 218 OF THE REGIONAL TRIAL COURT OF
QUEZON CITY,** EDUARDO M. SACRIS, and CESAR A. ABILLAR,
Respondents.
FACTS:
The case at bar is a Special Civil Action under Rule 65 of the Revised Rules of Civil
Procedure seeking to annul, on the ground of grave abuse of discretion amounting to
lack or excess of jurisdiction, the decision of the RTC Quezon City, as affirmed by the
CA. The petitioner (First Corporation) is a corporation duly organized and existing
under the PH laws and engaged primarily in trade. The private respondent (Sacris) is
the alleged creditor of the petitioner, while another private respondent (Abillar) had
served as the President and Chairman of the Board of the petitioner corporation from
1993 until February 1998.

In 1991, the corporate officers of the petitioner namely: Vicente C. Esmeralda,
Edgardo C. Cerbo, Nicolas E. Esposado, Rafael P. La Rosa and Abillar, convinced
Sacris to invest in their business as the petitioner needed a fresh equity infusion,
particularly in its Rema Tip Top Division, to make viable its continuous operation.
The petitioner made a promise of turning such equity into shareholding in the
petitioner. While the conversion of such investment into shareholding was still
pending, Sacris and the petitioner agreed to consider the same as a loan which shall
earn an interest of 1%/month. Accordingly, from the year 1991 up to 1994, private
respondent Sacris had already extended a P1.2 million loan to the Rema Tip Top
Division of the petitioner.
In 1997, Sacris extended another P1 million loan to the petitioner. Thus, from 1991
up to 1997, the total loan extended by Sacris to the petitioner reached a total amount
of P2.2 million. All loans were given by Sacris to herein Abillar, as the latter was then
the President and Chairman of the Board of Directors of the petitioner. The receipts
for the said loans were issued by the petitioner in the name of Abillar. Petitioner
failed to convert Sacris's investment/loan into equity or shareholding in the
petitioner. In its place, petitioner agreed to pay a monthly interest of 2.5% on the
amount of the loan extended to it by Sacris. Petitioner likewise made partial
payments of P400,000.00 on the principal obligation and interest payment in the
amounts of P33,750.27 and P23,250.00, thus, leaving an outstanding balance of P1.8
million.
In the meantime, a Stockholders Meeting of the petitioner was held to elect the
members of the Board and to elect new set of officers. Abillar was no long re-elected
because they had lost their confidence for he had been involved in various anomalies
and irregularities during his tenure. Thus, Abillar was ousted.
In 1998, Sacris excuted a Deed of Assignment in favor Abillar, assigning and

transferring to Abillar his remaining collectibles due from the petitioner in the
amount of P1.8 million. As a consideration, Abillar shal pay Sacris the said
outstanding balance due from the petitioner on or before July 30, 1998. Later on,
Abillar, by the virtue of the said deed, filed a complaint for Sum of Monet with Prayer
for a Writ of Preliminary Attachment and Damages before the RTC of Pasig against
the petitioner. While the said case was still pending, Sacris and Abarilla agreed to
rescind the said deed for failure of Abillar fo comply with his undertaking to pay
Sacris. Thus, Sacris and Abillar executed a Deed of Rescission of the said deed.
Consequently, Sacris made a demand upon the petitioner to pay the outstanding
obligation but the latter refused to do so.
Before the pre-trial, Sacris filed a Motion for Intervention attaching his Complain-in-
Intervention. The RTC Pasig denied the said Motion for Intervention but, however,
the trial court admitted the complain in intervention filed by Sacris and dismissed
the complaint originally filed by Abillar against the petitioner. The admission of the
said complaint prompted the petitioner to file a Petition for Certiorari and Prohibition
before the CA. The CA granted the petition filed by the petitioner and issued a writ of
certiorari in which the order of the RTC Pasig were set aside. Thus, the CA directed
Judge Hernandez to dismiss the complaint with prejudice and to deny the Motion in
Intervention without prejudice.
Based on the decision of the CA, Sacris filed a complaint for Sum of Money with
Damages before the RTC-QC against the petitioner to recover the alleged collectible
sum due from the petitioner. The petitioner denied the material allegations stated in
the complaint in which it denied having liability to Sacris as it had no knowledge of
or consent to the purported transactions or dealings that Sacris may have had with
Abillar. Subsequently, petitioner filed a Third-Party Complaint against Abillar alleging
that the investment/loan transactions of Sacris, the basis of his cause of action
against the petitioner, were all entered into by Abillar without the knowledge,
consent, authority and/or approval of the petitioner or of the latter's Board of
Directors. The aforesaid transactions were not even ratified by the petitioner or by
its Board of Directors. Abillar filed his Answer to the said Third-Party Complaint
raising therein the same allegations found in the Complaint filed by Sacris. Pre-trial
ensued followed by the trial on the merits.
RTC OF QUEZON CITY - It rendered a decision in favor of Sacris and Abillar (private
respondents) ordering the petitioner to pay the said balance plus an interest of
24%/annum; pay Abillar P20,000.00 and Sacris P50,000.00; attorneys fees and cost
of suit.
COURT OF APPEALS - The petitioner appealed the decision of the RTC QC in which
the CA rendered a decision dismissing the appeal filed because it did find any
reversible error in the decision of the said RTC. A motion for reconsideration was
filed but was also denied by the CA because the CA had already passed upon the
issues raised.
PETITIONERS CONTENTION
It averred that the RTC QC and the CA erred in holding that private respondents'
claim of the existence of the purported loans was supported by a preponderance of
evidence, despite the fact that the pieces of documentary evidence presented by the
private respondents were tainted with irregularities. Thus, the RTC and the CA
committed grave abuse of discretion amounting to excess of their jurisdiction in
giving credence to these pieces of documentary evidence presented by the private
respondents.
It also argued that the conclusion made by the RTC QC and the CA that it benefited
from the loans obtained from Sacris had no basis in fact and in law. More so, it was
grave abuse of discretion on the part of the RTC QC and the CA to conclude that the
alleged loans were reflected in its financial statements. Petitioner, points out that its
financial statements covering the period 1992-1997 revealed that only its financial
statements for the years 1992 and 1993 reflected entries of "loans payable." The
other financial statements following the year 1993 no longer had any entries of
outstanding loan due from the petitioner.
It also alleged that it was grave abuse of discretion for the RTC and the CA to hold
that Abillar was authorized by the petitioner to borrow money from Sacris,
deliberately ignoring the provisions of the by-laws of petitioner which only
authorized Abillar, as President, to act as its signatory of negotiable instruments and
contracts. The by-laws clearly authorized Abillar to perform only the ministerial act
of "signing," and never gave Abillar a blanket authority to bind the petitioner in any
kind of contract, regardless of its nature and its legal consequences or effects on the
petitioner and its stockholders. Lastly, petitioner contended that the RTC and the CA
likewise acted with grave abuse of discretion in not awarding damages in its favor
and in dismissing its Third-Party Complaint against Abillar.
PRIVATE RESPONDENTS CONTENTION

It argued that the grounds enumerated by the petitioner for the allowance of its
Petition for Certiorari before this Court clearly call for the review of the factual
findings of the RTC QC. Private respondents further avowed that the petitioner is
simply using the remedy of certiorari provided for under Rule 65 of the Revised
Rules of Civil Procedure as a substitute for an ordinary appeal. They claimed that
certiorari under Rule 65 of the aforesaid Rules cannot be used for the review of the
findings of fact and evidence. Neither is it the proper remedy to cure errors in
proceedings nor to correct erroneous conclusions of law or fact. Thus, private
respondents maintain that the petitioner corporation is merely using the remedy of
certiorari as a delaying tool to prevent the Decision of the RTC of Quezon City from
immediately becoming final and executory.
It also averred that for failure of the petitioner corporation to allege in its appeal
before the Court of Appeals that the RTC QC committed grave abuse of discretion,
petitioner corporation cannot now make the said allegation in its Petition before this
Court so as to justify its availment of the remedy of certiorari to annul the decision of
the RTC QC.
ISSUE:
WON the remedy of certiorari provoded for under the Rule 65 was properly applied
in the case.
HELD: NO. Petition was DISMISSED.
The petitioner evidently availed itself of the wrong mode of appeal. It is a well-
entrenched rule that this Court is not a trier of facts. This Court will not pass upon
the findings of fact of the trial court, especially if they have been affirmed on appeal
by the CA. Unless the case falls under the recognized exceptions, the rule should not
be disturbed.
In the case at bar, the findings of the RTC QC as well as the CA are properly
supported by evidence on record. Both courts found that the alleged loans extended
to the petitioner by Sacris were reflected in the petitioner s financial statements,
particularly in the years 1992-1993, were contrary to the claim of petitioner. The said
financial statements of the petitioner were not the sole bases used by the RTC QC
and by the CA in its findings of liability against the petitioner. The RTC QC also took
into consideration the pieces of documentary evidence which likewise became the
grounds for its findings that indeed, Sacris had extended a loan to petitioner, and
that the same was given to Abillar, and received by the petitioner. Those pieces of
documentary evidence very well supported the claim of Sacris that the petitioner
received money from him through its former President, Abillar. Thus, petitioner
cannot claim that it never consented to the act of Abillar of entering into a
loan/investment transaction with Sacris, for there are documents that would prove
that the money was received by the petitioner, and the latter acknowledged receipt
of said money. The same pieces of evidence likewise confirm the findings of the RTC
QC that the petitioner benefited from the said transaction; therefore, it should be
held liable for the same amount of its unpaid obligation to Sacris. As the findings of
the RTC QC and the CA are supported by evidence, this Court finds no reason to
deviate from the heretofore cited rule.
It is a fundamental aphorism in law that a review of facts and evidence is not the
province of the extraordinary remedy of certiorari, which is extra ordinem - beyond
the ambit of appeal. In certiorari proceedings, judicial review does not go as far as to
examine and assess the evidence of the parties and to weigh the probative value
thereof. It does not include an inquiry as to the correctness of the evaluation of
evidence.Any error committed in the evaluation of evidence is merely an error of
judgment that cannot be remedied by certiorari. An error of judgment is one which
the court may commit in the exercise of its jurisdiction. An error of jurisdiction is one
where the act complained of was issued by the court without or in excess of
jurisdiction, or with grave abuse of discretion, which is tantamount to lack or in
excess of jurisdiction and which error is correctible only by the extraordinary writ of
certiorari. Certiorari will not be issued to cure errors of the trial court in its
appreciation of the evidence of the parties, or its conclusions anchored on the said
findings and its conclusions of law. It is not for this Court to re-examine conflicting
evidence, re-evaluate the credibility of the witnesses or substitute the findings of fact
of the court a quo. Since the issues raised by the petitioner in its Petition for
Certiorari are mainly factual, as it would necessitate an examination and re-
evaluation of the evidence on which the RTC QC and the CA based their decisions,
the petition should not be given due course. Thus, the remedy of certiorari will not
lie to annul or reverse the Decision of the RTC QC, as affirmed by the CA in its
decision and resolution.
Settled is the rule that the proper remedy from an adverse decision of the CA is an
appeal under Rule 45 and not a Petition for Certiorari under Rule 65. Hence,
petitioner could have raised the CA, affirming the assailed decision of the RTC QC to
this Court via an ordinary appeal under Rule 45 of the 1997 Revised Rules of Civil
Procedure. It should be emphasized that the extraordinary remedy of certiorari will
not lie when there are other remedies available to the petitioner. Therefore, in
availing itself of the extraordinary remedy of certiorari, the petitioner corporation
resorted to a wrong mode of appeal. Finally, even if this case will be treated as
having been filed under Rule 45, still it will be dismissed for utter lack of merit
because this case does not fall under the recognized exceptions wherein this Court is
authorized to resolve factual issues.
CHESTER DE JOYA v. JUDGE PLACIDO C. MARQUEZ, G.R. No. 162416,

January 31, 2006
FACTS:
Through petition of certiorari and prohibition, petitioner De Joya seeks to nullify and
set aside the warrant of arrest issued by respondent judge against petitioner in
Criminal Case No. 03-219952 for violation of Article 315, par. 2(a) of the Revised
Penal Code in relation to Presidential Decree (P.D.) No. 1689. Petitioner asserts that
respondent judge erred in finding the existence of probable cause that justifies the
issuance of a warrant of arrest against him and his co-accused.
ISSUE:
I. Whether or not the Supreme Court can review the factual findings of the trial court
II. Whether or not the warrant of arrest was validly issued
III. Whether or not the petitioner is entitled to seek relief without being submitted to
the jurisdiction of the court
HELD:
I. YES. The general rule is that the Supreme Court does not review the factual
findings of the trial court, which include the determination of probable cause for the
issuance of warrant of arrest. It is only in exceptional cases where the Court sets
aside the conclusions of the prosecutor and the trial judge on the existence of
probable cause, that is, when it is necessary to prevent the misuse of the strong arm
of the law or to protect the orderly administration of justice. The facts obtaining in
this case do not warrant the application of the exception.
II. YES. The Court found that the documents sufficiently establish the existence of
probable cause as required under Section 6, Rule 112 of the Revised Rules of
Criminal Procedure. Probable cause to issue a warrant of arrest pertains to facts and
circumstances which would lead a reasonably discreet and prudent person to believe
that an offense has been committed by the person sought to be arrested. It bears
remembering that "in determining probable cause, the average man weighs facts and
circumstances without resorting to the calibrations of our technical rules of evidence
of which his knowledge is nil. Rather, he relies on the calculus of common sense of
which all reasonable men have an abundance. Thus, the standard used for the
issuance of a warrant of arrest is less stringent than that used for establishing the
guilt of the accused. As long as the evidence presented shows a prima facie case
against the accused, the trial court judge has sufficient ground to issue a warrant of
arrest against him. It need not be shown that the accused are indeed guilty of the
crime charged. That matter should be left to the trial. It should be emphasized that
before issuing warrants of arrest, judges merely determine personally the
probability, not the certainty, of guilt of an accused. Hence, judges do not conduct a
de novo hearing to determine the existence of probable cause. They just personally
review the initial determination of the prosecutor finding a probable cause to see if it
is supported by substantial evidence. In case of doubt on the existence of probable
cause, the Rules allow the judge to order the prosecutor to present additional
evidence. In the present case, it is notable that the resolution issued by State
Prosecutor Benny Nicdao thoroughly explains the bases for his findings that there is
probable cause to charge all the accused with violation of Article 315, par. 2(a) of the
Revised Penal Code in relation to P.D. No. 1689.
III. NO. Petitioner is not entitled to seek relief from Supreme Court nor from the trial
court as he continuously refuses to surrender and submit to the court's jurisdiction.
Justice Florenz D. Regalado explains the requisites for the exercise of jurisdiction
and how the court acquires such jurisdiction, thus: x x x Requisites for the exercise
of jurisdiction and how the court acquires such jurisdiction: b. Jurisdiction over the
defendant or respondent: This is acquired by the voluntary appearance or submission
by the defendant or respondent to the court or by coercive process issued by the
court to him, generally by the service of summons. There is no exceptional reason in
this case to allow petitioner to obtain relief from the courts without submitting to its
jurisdiction. On the contrary, his continued refusal to submit to the court's
jurisdiction should give this Court more reason to uphold the action of the
respondent judge. The purpose of a warrant of arrest is to place the accused under
the custody of the law to hold him for trial of the charges against him. His evasive
stance shows an intent to circumvent and frustrate the object of thislegal process. It
should be remembered that he who invokes the court's jurisdiction must first submit
to its jurisdiction.
A.L. ANG NETWORK, INC. V. EMMA MONDEJAR, ET AL.
FACTS:
Petitioner filed a complaint for sum of money under the Rule of Procedure for Small
Claims Cases before the MTCC, seeking to collect from respondent which
represented her unpaid water bills. Petitioner claimed that it was duly authorized to
supply water to and collect payment therefor from the homeowners of Regent Pearl
Subdivision. In defense, respondent contended that since April 1998 up to February
2003, she religiously paid petitioner the agreed monthly flat rate of P75.00 for her
water consumption. Notwithstanding their agreement that the same would be
adjusted only upon prior notice to the homeowners, petitioner unilaterally charged
her unreasonable and excessive adjustments
MTCC: Respondent should be considered to have fully paid petitioner. Aggrieved,

petitioner filed a petition for certiorari under Rule 65 of the Rules of Court before the
RTC, ascribing grave abuse of discretion on the part of the MTCC.
RTC: dismissing the petition for certiorari, finding that the said petition was only
filed to circumvent the non-appealable nature of small claims cases.
ISSUE:
WON the RTC erred in dismissing petitioners recourse under Rule 65 of the Rules of
Court assailing the propriety of the MTCC Decision in the subject small claims case.
RULING:
Section 23 of the Rule of Procedure for Small Claims Cases states that: After the
hearing, the court shall render its decision on the same day, based on the facts
established by the evidence (Form 13-SCC). The decision shall immediately be
entered by the Clerk of Court in the court docket for civil cases and a copy thereof
forthwith served on the parties. The decision shall be final and unappealable.
Considering the final nature of a small claims case decision under the above-stated
rule, the remedy of appeal is not allowed, and the prevailing party may, thus,
immediately move for its execution. Nevertheless, the proscription on appeals in
small claims cases, similar to other proceedings where appeal is not an available
remedy, does not preclude the aggrieved party from filing a petition for certiorari
under Rule 65 of the Rules of Court. However, in a long line of cases, the Court has
consistently ruled that "the extraordinary writ of certiorari is always available where
there is no appeal or any other plain, speedy and adequate remedy in the ordinary
course of law."
In view of the foregoing, the Court thus finds that petitioner correctly availed of the
remedy of certiorari to assail the propriety of the MTCC Decision in the subject small
claims case, contrary to the RTCs ruling.
WHEREFORE, the petition is GRANTED. The Decision dated November 23, 2011 and
Resolution dated February 16, 2012 of the Regional Trial Court of Bacolod City,
Branch 45 are REVERSED and SET ASIDE. RTC Case No. 11-13833 is hereby
REINSTATED and the court a quo is ordered to resolve the same with dispatch.

FIORELLO R. JOSE, Petitioner, vs. ROBERTO ALFUERTO, Et.al.
G.R. No. 169380, November 26, 2012
FACTS:
The dispute involves a parcel of land registered in the name of Rodolfo Chua Sing
under Transfer Certificate of Title No. 52594, with an area of 1919 square meters,
located in Barangay San Dionisio, Paraaque City. Chua Sing purchased the land in
1991. On April 1, 1999, Chua Sing leased the property to the petitioner. Their
contract of lease was neither notarized nor registered with the Paraaque City
Registry of Deeds. Significantly, the respondents already occupied the property even
before the lease contract was executed. On April 28, 1999, soon after Chua Sing and
the petitioner signed the lease contract, the petitioner demanded in writing that the
respondents vacate the property within 30 days and that they pay a monthly rental of
P1,000.00 until they fully vacate the property. The respondents refused to vacate and
to pay rent. On October 20, 1999, the petitioner filed an ejectment case against the
respondents before Branch 77 of the Paraaque City MeTC, docketed as Civil Case
No. 11344. In this complaint, no mention was made of any proceedings before the
barangay. Jose then brought the dispute before the barangay for conciliation.
The barangay issued a Certification to File Action on March 1, 2000. Jose was then
able to file an amended complaint, incorporating the proceedings before the
barangay before the summons and copies of the complaint were served upon the
named defendants. In the Amended Complaint dated March 17, 2000, the petitioner
claimed that as lessee of the subject property, he had the right to eject the
respondents who unlawfully occupy the land. The petitioner also stated that despite
his written demand, the respondents failed to vacate the property without legal
justification. He prayed that the court order the respondents; (1) to vacate the
premises; (2) to pay him not less than P41,000.00 a month from May 30,1999 until
they vacate the premises; and (3) to pay him attorneys fees of no less than
P50,000.00, and the costs of suit.
In their Answer, the respondents likewise pointed out that they have been in
possession of the land long before Chua Sing acquired the property in 1991, and that
the lease contract between the petitioner and Chua Sing does not affect their right to
possess the land. The respondents also presented a Deed of Assignment, dated
February 13, 2000, issued by David R. Dulfo in their favor. They argued that the
MeTC had no jurisdiction over the case as the issue deals with ownership of the land,
and sought the dismissal of the complaint for lack of cause of action and for lack of
jurisdiction. They also filed a counterclaim for actual and moral damages for the
filing of a baseless and malicious suit. After the required position papers, affidavits
and other pieces of evidence were submitted, the MeTC resolved the case in the
petitioners favor. In its decision of January 27, 2003, the MeTC held that the
respondents had no right to possess the land and that their occupation was merely
by the owners tolerance. It further noted that the respondents could no longer raise
the issue of ownership, as this issue had already been settled: the respondents
previously filed a case for the annulment/cancellation of Chua Sings title before the
RTC, Branch 260, of Paraaque City, which ruled that the registered owners title
was genuine and valid. Moreover, the MeTC held that it is not divested of jurisdiction
over the case because of the respondents assertion of ownership of the property.

On these premises, the MeTC ordered the respondents to vacate the premises and to
remove all structures introduced on the land; to each pay P500.00 per month from
the date of filing of this case until they vacate the premises; and to pay Jose, jointly
and severally, the costs of suit and P20,000.00 as attorneys fees. On appeal before
the RTC, the respondents raised the issue, among others, that no legal basis exists
for the petitioners claim that their occupation was by tolerance, "where the
possession of the defendants was illegal at the inception as alleged in the complaint,
there can be no tolerance." The RTC affirmed the MeTC decision of January 27, 2003.
It issued its decision on October 8, 2003, reiterating the MeTCs ruling that a case
for ejectment was proper.
The petitioner, as lessee, had the right to file the ejectment complaint; the
respondents occupied the land by mere tolerance and their possession became
unlawful upon the petitioners demand to vacate on April 28, 1999. The RTC,
moreover, noted that the complaint for ejectment was filed on October 20, 1999, or
within one year after the unlawful deprivation took place. It cited Pangilinan, et al. v.
Hon. Aguilar, etc., et al.18 and Yu v. Lara, et al. to support its ruling that a case for
unlawful detainer was appropriate. On March 14, 2005, the Court of Appeals
reversed the RTC and MeTC decisions. It ruled that the respondents possession of
the land was not by the petitioner or his lessors tolerance. It defined tolerance not
merely as the silence or inaction of a lawful possessor when another occupies his
land; tolerance entailed permission from the owner by reason of familiarity or
neighborliness. The petitioner, however, alleged that the respondents unlawfully
entered the property; thus, tolerance (or authorized entry into the property) was not
alleged and there could be no case for unlawful detainer.
The respondents allegation that they had been in possession of the land before the
petitioners lessor had acquired it in 1991 supports this finding. Having been in
possession of the land for more than a year, the respondents should not be evicted
through an ejectment case. The Court of Appeals emphasized that ejectment cases
are summary proceedings where the only issue to be resolved is who has a better
right to the physical possession of a property. The petitioners claim, on the other
hand, is based on an accion publiciana: he asserts his right as a possessor by virtue
of a contract of lease he contracted after the respondents had occupied the land
ISSUE:
Whether or not an action for unlawful detainer is the proper remedy?
HELD:
No. it is not the proper remedy. Unlawful detainer is a summary action for the
recovery of possession of real property. This action may be filed by a lessor, vendor,
vendee, or other person against whom the possession of any land or building is
unlawfully withheld after the expiration or termination of the right to hold possession
by virtue of any contract, express or implied. In unlawful detainer, the possession of
the defendant was originally legal, as his possession was permitted by the plaintiff on
account of an express or implied contract between them. However, the defendants
possession became illegal when the plaintiff demanded that the defendant vacate the
subject property due to the expiration or termination of the right to possess under
the contract, and the defendant refused to heed such demand. A case for unlawful
detainer must be instituted one year from the unlawful withholding of possession.The
allegations in the complaint determine both the nature of the action and the
jurisdiction of the court. The complaint must specifically allege the facts constituting
unlawful detainer. In the absence of these allegations of facts, an action for unlawful
detainer is not the proper remedy and the municipal trial court or the MeTC does not
have jurisdiction over the case.
G.R. No. 83907. September 13, 1989.*

NAPOLEON GEGARE vs. HON. COURT OF APPEALS (ELEVENTH DIVISION)
AND ARMIE ELMA
FACTS:
The case involves a land wherein the parties obtained equal shares by virtue of a
Board Resolution, while respondent does not contest any objections with regard to
her share, the petitioner herein wants the entire property.
The land in controversy was located in Dadiangas General Santos City and under the
name of Paulino Elma the father of the respondent herein. A reversion case was filed
by the Republic of the Philippines against Paulino Elma in the Court of First Instance
of South Cotabato, wherein in due course a decision was rendered on January 29,
1973 declaring the title of Paulino Elma null and void and the same was ordered
cancelled. The lot was reverted to the mass of public domain subject to disposition
and giving preferential right to its actual occupant, Napoleon Gegare.
Both petitioner and private respondent filed an application for this lot in the Board of
Liquidators. The Board of Liquidators ruled in favor of the petitioner on the ground
that the said land was acquired by him by way of negotiated sale. A motion for
reconsideration filed by private respondent was favorably considered by the Board in
Resolution. Thus, the Board directed the chief of LASEDECO to investigate the
occupancy and area of the lot. In this investigation, it was found that only private
respondent was the actual occupant so the LASEDECO chief recommended the
division of the property between petitioner and private respondent.The Board
Resolution on approving said recommendation by dividing the lot equally between
the parties at 135.5 square meters each to be disposed to them by negotiated sale.

Petitioner filed an action for "Annulment and Cancellation of Partition of Lot to
Declare them Null and Void" against private respondent and the Board. Private
respondent filed a motion to dismiss the complaint on the following grounds: (1) lack
of jurisdiction over the subject matter; (2) petitioner has no capacity to sue; (3)
petitioner is not a real party-in-interest; and (4) the action is barred by prior
judgment. Private respondent added another ground (5) lack of conciliation efforts
pursuant to Section 6 of Presidential Decree No. 1508.
Petitioner moved for a reconsideration thereof to which an opposition was filed by
private respondent. The motion for reconsideration was granted and private
respondent was required to file his responsive pleading. Private respondent filed his
answer. Private respondent asked for a preliminary hearing of the grounds for the
motion to dismiss in his affirmative defenses. The same was denied.
The respondent filed a petition for certiorari and prohibition in the Court of Appeals
in which the said petition was granted. Thus petitioner now questions the decision of
the Court of Appeals.
ISSUES:
1. Whether or not Court of Appeals erred in deciding without first serving the
summons and a copy of the petition to the respondent now herein the petitioner.
2. Whether or not the court erred in not dismissing the said case for the respondents
herein failed to comply the provisions of P.D. 1508.
HELD: The petition is devoid of any merit.
1. Private respondent disputes this claim by showing that it was at the address of
petitioner appearing in the petition at Liwayway Disco Restaurant and Disco Pub,
Ilang-Ilang Street, General Santos City, where petitioner was served a copy of private
respondent's "Manifestation and Motion for Early Resolution . Petitioner's counsel
was also served a copy of the resolution. Moreover, petitioner's counsel filed a
motion seeking a reconsideration of the decision of respondent court which was
denied. Therefore, petitioner voluntarily submitted to the jurisdiction of the
respondent court and was never deprived of due process.
2. True it is that the Board is a government instrumentality but the petitioner and
private respondent who are also contending parties in the case are residents of the
same barangay so Section 6 of Presidential Decree No. 1508 should apply to them as
it provides:
Section 6. Conciliation, pre-condition to filing of complaint. No complaint, petition,

action or proceeding involving any matter within the authority of the Lupon as
provided in Section 2 hereof shall be filed or instituted in court or any other
government office for adjudication unless there has been a confrontation of the
parties before the Lupon Chairman or the Pangkat and no conciliation or settlement
has been reached as certified by the Lupon Secretary or the Pangkat Secretary
attested by the Lupon or Pangkat Chairman, or unless the settlement has been
repudiated.
The purpose of this confrontation is to enable the parties to settle their differences
amicably. If the other only contending party is the government or its instrumentality
or subdivision the case falls within the exception but when it is only one of the
contending parties, a confrontation should still be undertaken among the other
parties.
CLAUDIA RIVERA SANCHEZ v. HONORABLE MARIANO C. TUPAS, Presiding
Judge of the Regional Trial Court, Branch XII of Davao City and Private
Respondent ALFONSO ESCOVILLA, G.R. No. 76690 February 29, 1988
FACTS :
Claudia Rivera Sanchez, petitioner and Alfonso Escovilla, private respondent are
both occupants of a public agricultural land Identified as Lot 595, Cad-102 located at
Budbud, Tibungco, Davao City. Sanchez claims that the area of 450 square meters,
more or less, has been in her possession since 1947, long before Escovilla came in
and occupied another portion of Lot 595. On the other hand, Escovilla stated that the
area being claimed by petitioner is a part of his three-fourth (3/4) of a hectare parcel,
the right to which he acquired from its former possessor and owner of the
improvements thereon. Sometime in 1966, out of charity and upon their agreement
that petitioner will vacate the premises upon demand, he granted petitioner's
request to build her house inside the land occupied by him.
Escovilla filed an ejectment case in the City court of Davao against Sanchez. The
court rendered judgment through a Judgment by Compromise.
Sanchez filed a petition to annul judgment in the RTC of Davao. In her petition, she
alleged that she was an illiterate and did not know that what he counsel presented
which she had signed using her thumbmark was a Compromise Agreement which
recognized Escovillas prior occupancy of the land in dispute; that she was only able
to discover this when she received an Order of Guillermo C. Ferraris, OIC Regional
Director of Lands, dropping her petition, together with the petitions of three others,
based, allegedly, on their withdrawal, of their claims over the disputed land; that she
had never intended to recognize the private respondent as having prior possession
and occupancy of the land, the truth of the matter being that she had been in
possession of the area of 450 square meters, more or less, since 1947, long before
private respondent came in and occupied another portion of Lot 595; that in sheer
bad faith, private respondent caused the survey of the entire Lot No. 595 sometime
in 1980, which survey became null and void after the same was formally opposed by
Eufemio Escovilla, brother of private respondent, before Atty. Uldarico G. Aquino,
then District Officer, Bureau of Lands, Davao City; that on January 21, 1982,
petitioner and the other occupants Eufemio Escovilla, Damaso Escovilla and Emiliana
Monleon, requested the Land District Officer to authorize Geodetic Engineer Timoteo
D. Cajipe of the same Office to execute a segregation survey; that the request was
granted and the District Land Officer, Atty. Bienvenido Sambrano, directed Engr.
Timoteo D. Cajipe to survey the land; that Engr. Cajipe was not able to conduct the
segregation survey because private respondent threatened bodily harm on and even
death to the survey team, especially against the petitioner and the other actual
occupants; and that pursuant to the 1st Indorsement of the District Land Officer
dated January 21, 1982, Land Investigator Manuel Flores conducted an investigation
of the disputed area.
Private respondent, in a Motion to Dismiss dated May 7,1986, moved for the
dismissal of the complaint on the grounds that (1) the records of the case do not
show that the same has been referred to the barangay court for confrontation,
conciliation or settlement of the parties concerned as required under the provisions
of Section 6 of PD 1508, and as ruled by the Supreme Court in Spouses Maria Luisa
P. Morata, et al. vs. Spouses Victor Go, et al., G.R. L-62339, October 27, 1983, 125
SCRA 444; and (2) the complaint does not state a cause of action.
On May 12, 1986, petitioner filed an Opposition to the Motion to Dismiss on the
grounds that (1) the motion to dismiss was filed beyond the period prescribed by the
Rules of Court; and (2) the petition states a cause of action.
On the same date, May 12,1986, private respondent filed his Answer and his Reply to
Opposition to Motion to Dismiss, Opposition to Prayer therein to Declare Defendant
in Default, and Manifestation, dated May 12, 1986.
On May 26,1986, petitioner filed a Supplemental Opposition to Motion to Dismiss.
Respondent Judge in an order dated May 16, 1986, granted the prayer of counsel for
private respondent to be allowed one (1) week to file a memorandum in support of
his stand, which was to be commented upon within like period by petitioner's
counsel; after which, all the pending incidents are to be deemed submitted for the
resolution of the Court.

On May 29,1986, private respondent submitted his Memorandum.
In an Order dated October 10, 1986, respondent Judge sustained private

respondent's Motion to Dismiss by dismissing the case for lack of cause of action or
prematurity for not having passed the Barangay Court.
ISSUE/S:
1. WON the RTC gravely erred in dismissing the petition for annulment of judgment
because it did not pass Barangay Conciliation
2. WON the Compromise agreement shall be null and void
HELD:
1.YES. Presidential Decree No. 1508 requires that the parties who actually reside in
the same city or municipality should bring their controversy first to the Barangay
Court for possible amicable settlement before filing a complaint in court. This
requirement is compulsory (as ruled in the cited case of Morato vs. Go, 125 SCRA
444), [1983] and non-compliance of the same could affect the sufficiency of the cause
of action and make the complaint vulnerable to dismissal on the ground of lack of
cause of action or prematurity (Peregrina vs. Panis, 133 SCRA 75). [1984] It must be
borne in mind that the purpose of the conciliation process at the barangay level is to
discourage indiscriminate filing of cases in court in order to decongest the clogged
dockets and in the process enhance the quality of justice dispensed by courts
(Morato, vs. Go, supra).
In the instant case, it will be noted that the ejectment case in the City Court of
Davao, Civil Case No. 17-10-D, was filed on September 18, 1980, when Presidential
Decree No. 1508 was already enforced. However, the records do not show that there
was an opposition to the filing of the said ejectment case on the ground that the
dispute had not been submitted to the Barangay Court for possible amicable
settlement under P.D. 1508. The only logical conclusion therefore is that either such
requirement had already been complied with or had been waived. Under either
circumstance, there appears to be no reason, much less a requirement that this case
be subjected to the provisions of P.D. 1508. In fact, the present controversy is an
action for annulment of a compromise judgment which as a general rule is
immediately executory (De Guzman vs. Court of Appeals, 137 SCRA 730,[1985]), and
accordingly, beyond the authority of the Barangay Court to change or modify.
Normally, the instant case should be remanded to the lower court for further
proceedings. Nevertheless, a close examination of the records shows that such time-
consuming procedure may be dispensed with in resolving the issue at hand. Thus,
this Court, in the case of Velasco, et al. vs. Gayapa (G.R. No. 58651, promulgated on
July 30,1987), ruled: Since the main case is manifestly without merit, the order of
the lower court dismissing the appeal cannot be impugned. As held in Castro vs.
Court of appeals (supra), "a remand for further proceedings therefore, would only
result in needless delays a few more yearn perhaps of a tortuous journey; through
new proceedings in the trial court, the intermediate appeal and another resort to this
Court through a petition for review to finally achieve the same result."
2. NO. Petitioner's action for annulment of judgment is based on the ground of

extrinsic fraud allegedly committed by her own lawyer by telling her "that she cannot
be elected any more during her lifetime" from the land in dispute, but did not
disclose to her that at the same time she would have to recognize the prior
possession of private respondent. While there can be no question as to the right of
any person adversely affected by a judgment to maintain an action and to have the
decision declared a nullity, such an action to annul a judgment upon the ground of
fraud, will not lie unless the fraud be extrinsic or collateral and committed by the
adverse party, not by one's own counsel. Said ruling was reiterated in a subsequent
case where it was stressed that the fraud mentioned in Rule 38 is the fraud
committed by the adverse party (Velayo vs. Shell Company of the Philippines, Ltd., et
al., 105 Phil. 1114, [1959]). In the instant case, petitioner, in her action for
annulment of judgment, never made any allegation that private respondent had
anything to do with such actuation other lawyer. Such being the case, the most that
she has is an action against her own lawyer and not against the private respondent.
Moreover, miscalculation or misappreciation of the legal import of the compromise
agreement, where the party is assisted by counsel, win not provide basis for setting
aside agreement on the ground of mistake or error. A compromise, entered into and
carried out in good faith, will not be discarded even if there was a mistake of law or
fact. (Periquet vs. Reyes, 21 SCRA 1503, [1967]).
PETRA VDA. DE BORROMEO, vs. HON. JULIAN B. POGOY, Municipality/City
Trial Court of Cebu City, and ATTY. RICARDO REYES, G.R. No. L-63277.
November 29, 1983
FACTS:
Petitioner herein seeks to stop respondent Judge Julian B. Pogoy of the Municipal
Trial Court (MTC) of Cebu City from taking cognizance of an ejectment suit for
failure of the plaintiff to refer the dispute to the Barangay Lupon for conciliation.
The intestate estate of the late Vito Borromeo is the owner of a building bearing the
deceaseds name, located at F. Ramos St., Cebu City. Said building has been leased
and occupied by petitioner Petra Vda. de Borromeo at a monthly rental of P500.00
payable in advance within the first 5 days of the month.
On August 28, 1982, private respondent Atty. Ricardo Reyes, administrator of the
estate and a resident of Cebu City, served upon petitioner a letter demanding that
she pay the overdue rentals corresponding to the period from March to September
1982, and thereafter to vacate the premises. As petitioner failed to do so, Atty. Reyes
instituted on September 16, 1982 an ejectment case against the former in the MTC
of Cebu City. The complaint was docketed as Civil Case No. R-23915 and assigned to
the sala of respondent judge.
On November 12, 1982, petitioner moved to dismiss the case, advancing, among
others, the want of jurisdiction of the trial court. Pointing out that the parties are
residents of the same city, as alleged in the complaint, petitioner contended that the
court could not exercise jurisdiction over the case for failure of respondent Atty.
Reyes to refer the dispute to the Barangay Court, as required by PD No. 1508,
otherwise known as Katarungang Pambarangay Law. Respondent judge denied the
motion to dismiss. He justified the order in this wise:
"The Clerk of Court when this case was filed accepted for filing same. That from the
acceptance from (sic) filing, with the plaintiff having paid the docket fee to show that
the case was docketed in the civil division of this court could be considered as
meeting the requirement or precondition for were it not so, the Clerk of Court would
not have accepted the filing of the case especially that there is a standing circular
from the Chief Justice of the Supreme Court without even mentioning the Letter of
Instruction of the President of the Philippines that civil cases and criminal cases with
certain exceptions must not be filed without passing the barangay court."
Unable to secure a reconsideration of said order, petitioner came to this Court
through this petition for certiorari. In both his comment and memorandum, private
respondent admitted not having availed himself of the barangay conciliation process,
but justified such omission by citing paragraph 4, section 6 of PD 1508 which allows
the direct filing of an action in court where the same may otherwise be barred by the
Statute of Limitations, as applying to the case at bar.
ISSUE:
Whether or not going through Barangay Conciliation is necessary as a condition
precedent in this case
HELD: No
The excuse advanced by private respondent is unsatisfactory. Under Article 1147 of
the Civil Code, the period for filing actions for forcible entry and detainer is one year,
and this period is counted from demand to vacate the premises.
In the case at bar, the letter-demand was dated August 28, 1982, while the complaint
for ejectment was filed in court on September 16, 1982. Between these two dates,
less than a month had elapsed, thereby leaving at least eleven (11) full months of the
prescriptive period provided for in Article 1147 of the Civil Code. Under the
procedure outlined in Section 4 of PD 1508, 3 the time needed for the conciliation
proceeding before the Barangay Chairman and the Pangkat should take no more
than 60 days. Giving private respondent nine (9) months ample time indeed
within which to bring his case before the proper court should conciliation efforts fail.
Thus, it cannot be truthfully asserted, as private respondent would want Us to
believe, that his case would be barred by the Statute of Limitations if he had to
course his action to the Barangay Lupon.
With certain exceptions, PD 1508 makes the conciliation process at the Barangay
level a condition precedent for filing of actions in those instances where said law
applies. For this reason, Circular No. 22 addressed to "ALL JUDGES OF THE
COURTS OF FIRST INSTANCE, CIRCUIT CRIMINAL COURTS, JUVENILE AND
DOMESTIC RELATIONS COURT, COURTS OF AGRARIAN RELATIONS, CITY
COURTS, MUNICIPAL COURTS AND THEIR CLERKS OF COURT" was issued by
Chief Justice Enrique M. Fernando on November 9, 1979. Said Circular reads:
"Effective upon your receipt of the certification by the Minister of Local Government
and Community Development that all the barangays within your respective
jurisdictions have organized their Lupons provided for in Presidential Decree No.
1508, otherwise known as the Katarungang Pambarangay Law, in implementation of
the barangay system of settlement of disputes, you are hereby directed to desist from
receiving complaints, petitions, actions or proceedings in cases falling within the
authority of said Lupons."
While respondent acknowledged said Circular in his order of December 14, 1982, he
nevertheless chose to overlook the failure of the complaint in Civil Case No. R-23915
to allege compliance with the requirement of PD 1508. Neither did he cite any
circumstance as would place the suit outside the operation of said law. Instead, he
insisted on relying upon the pro tanto presumption of regularity in the performance
by the clerk of court of his official duty, which to Our mind has been sufficiently
overcome by the disclosure by the Clerk of Court that there was no certification to
file action from the Lupon or Pangkat secretary attached to the complaint.
Be that as it may, the instant petition should be dismissed. Under Section 4(a) of PD
No. 1508, referral of a dispute to the Barangay Lupon is required only where the
parties thereto are "individuals." An "individual" means "a single human being as
contrasted with a social group or institution." Obviously, the law applies only to cases
involving natural persons, and not where any of the parties is a juridical person such
as a corporation, partnership, corporation sole, testate or intestate, estate, etc.
In Civil Case No. R-23915, plaintiff Ricardo Reyes is a mere nominal party who is
suing in behalf of the Intestate Estate of Vito Borromeo. While it is true that Section
3, Rule 3 of the Rules of Court allows the administrator of an estate to sue or be sued
without joining the party for whose benefit the action is presented or defended, it is
indisputable that the real party in interest in Civil Case No. R-23915 is the intestate
estate under administration. Since the said estate is a juridical person, plaintiff
administrator may file the complaint directly in court, without the same being
coursed to the Barangay Lupon for arbitration.
ACCORDINGLY, the petition is hereby dismissed. Respondent judge is ordered to try

and decide Civil Case No. R-23915 without unnecessary delay. No costs.
SO ORDERED.
Elmer Peregrina, Adelaida Peregrina and Cecilia Peregrina v. Hon. Domingo

Panis, G.R.No. L-56011 October 31, 1984
FACTS:
A complaint was filed by Spouses Procopio and Carmelita Sanchez against the
petitioners in a civil action for damages for alleged disrespect for the dignity, privacy
and peace of mind of the spouses under Article 26 of the Civil Code, and for alleged
defamation under Article 33 of the same Code. Admittedly, the parties are actual
residents of the same barangay in Olongapo City. In fact, they are neighbors.
Unquestionably, too, no conciliation proceedings were filed before the Lupon. Thus
the complaint filed by the petitioners is silent regarding compliance with the
mandatory requirement, nor does it allege that the dispute falls within the excepted
cases.
Lower Court: petitioners moved for the dismissal of the complaint. The spouses filed
their opposition holding that under Section 6(3) of P.D. No. 1508, the parties may go
directly to the Courts if the action is coupled with a provisional remedy such as
preliminary attachment. At first, the respondent judge dismissed the Complaint for
failure of the spouses to comply with the pre-condition for amicable settlement under
P.D. No. 1508, stating that the application for a provisional remedy was merely an
afterthought.
On motion for reconsideration by the SPOUSES, however, respondent Judge denied

the Motion to Dismiss on the ground that under Rule 57, Section 1 of the Rules of
Court, the application for attachment can be made at the commencement of the
action or any time thereafter.
ISSUE:
WON barangay conciliation in this case is a precondition for filing a complaint in the
RTC.
HELD: Yes
Section 3 of P.D. No. 1508 specifically provides: Disputes between or among persons
actually respectively in the same barangay shall be brought for amicable settlement
before the Lupon of said barangay. ...
It is also mandated by Section 6 of the same law:
Section 6. Conciliation, pre-condition to filing of complaint. No complaint, petition,

action or proceeding involving any matter within the authority of the Lupon as
provided. in Section 2 hereof shall be filed or instituted in court or any other
government office for adjudication unless there has been a confrontation of the
parties before the Lupon Chairman or the Pangkat and no conciliation or settlement
has been reached as certified by the Lupon Secretary or the Pangkat Secretary,
attested by the Lupon or Pangkat Chairman, or unless the settlement has been
repudiated. ...
Morata vs. Go, 125 SCRA 444 (1,,983), and Vda. de Borromeo vs. Pogoy, 126 SCRA
217 (1983) have held that P.D. No. 1508 makes the conciliation process at the
Barangay level a condition precedent for the filing of a complaint in Court. Non-
compliance with that condition precedent could affect the sufficiency of the plaintiff's
cause of action and make his complaint vulnerable to dismissal on the ground of lack
of cause of action or prematurity. The condition is analogous to exhaustion of
administrative remedies, or the lack of earnest efforts to compromise suits between
family members, lacking which the case can be dismissed.
The parties herein fall squarely within the ambit of P.D. No. 1508. They are actual
residents in the same barangay and their dispute does not fall under any of the
excepted cases. It will have to be held, therefore, that respondent Judge erred in
reconsidering his previous Order of dismissal on the ground that the provisional
remedy of attachment was seasonably filed. Not only was the application for that
remedy merely an afterthought to circumvent the law, but also, fundamentally, a Writ
of Attachment is not available in a suit for damages where the amount, including
moral damages, is contingent or unliquidated. Prior referral to the Lupon for
conciliation proceedings, therefore, was indubitably called for.
Librada M. Aquino vs Ernest S. Aure, G.R. No. 153567, February 18, 2008
FACTS:
Aure and Es Aure Lending Investors alleged that they acquired the subject property
from Spouses Aquino. Aure alleged that after they paid the spouses, the latter
refused to vacate the property. Aure filed a complaint for ejectment against the
spouses in the MeTC in Quezon City. The spouses counter that Aure lacks cause of
action because the latter does not have any legal right over the subject property.
They reasoned that Aure did not comply with their MoA. The MeTC ruled that since
the question of ownership was put in issue, the action was converted to a suit which
is incapable of pecuniary estimation which properly rests within the original
exclusive jurisdiction of the RTC. The MeTC also ruled that non-compliance with
barangay conciliation process lead to the dismissal of the complaint. On appeal the
RTC affirmed the dismissal of the complaint on the same ground that the dispute was
not brought before the Barangay Council for conciliation before it was filed in court.
The Court of Appeals reversed the MeTC and RTC decisions and remanded the case
to the MeTC for further proceedings.
ISSUE:
1) Whether or not non-compliance with the Barangay Conciliation proceedings is a
jurisdictional defect that warrants the dismissal of the complaint
2) Whether or not the allegation of ownership ousts the MeTC of its jurisdiction over
an ejectment case.
HELD:
1) No, the conciliation process is not a jurisdictional requirement, so that non-

compliance therewith cannot affect the jurisdiction which the court has otherwise
acquired over the subject matter or over the person of the defendant. However, non-
compliance will not prevent a court from exercising its power of adjudication over
the case before it where the defendants failed to object to such exercise of
jurisdiction in their answer and even during the entire proceedings a quo. In the
present case, Aquino cannot be allowed to attack the jurisdiction of the MeTC after
having participated in the proceedings without objecting. By Aquinos failure to
seasonably object to the deficiency in the complaint, she is deemed to have waived
any defect. The issue of non-compliance should be pleaded in the answer.
As provided under Section 1, Rule 9 of the 1997 Rules of Civil Procedure:
Sec. 1. Defenses and objections not pleaded. Defenses and objections not pleaded
either in a motion to dismiss or in the answer are deemed waived. However, when it
appears from the pleadings or the evidence on record that the court has no
jurisdiction over the subject matter, that there is another action pending between the
same parties for the same cause, or that the action is barred by a prior judgment or
by statute of limitations, the court shall dismiss the claim. Rule 15: Sec. 8. Omnibus
Motion. - Subject to the provisions of Section 1 of Rule 9, a motion attacking a
pleading, order, judgment, or proceeding shall include all objections then available,
and all objections not so included shall be deemed waived.
2) No, jurisdiction in ejectment cases is determined by the allegations pleaded in the

complaint. As long as these allegations demonstrate a cause of action either for
forcible entry or for unlawful detainer, the court acquires jurisdiction over the
subject matter. Rule 70 of the Rules of Court: Section 1. Who may institute
proceedings, and when. Subject to the provisions of the next succeeding section, a
person deprived of the possession of any land or building by force, intimidation,
threat, strategy, or stealth, or a lessor, vendor, vendee, or other person against whom
the possession of any land or building is unlawfully withheld after the expiration or
termination of the right to hold possession, by virtue of any contract, express or
implied, or the legal representatives or assigns of any such lessor, vendor, vendee, or
other person may at any time within one (1) year after such unlawful deprivation or
withholding of possession, bring an action in the proper Municipal Trial Court
against the person or persons unlawfully withholding or depriving of possession, or
any person or persons claiming under them, for the restitution of such possession,
together with damages and costs.The law provides instead that when the question of
possession cannot be resolved without deciding the issue of ownership, the issue of
ownership shall be resolved only to determine the issue of possession
Crisanta Alcaraz Miguel v. Jerry D. Montanez, G.R. No. 191336, January 25,
2012
FACTS:
On February 1, 2001, respondent Jerry Montanez (Montanez) secured a loan of

(P143,864.00), payable in one (1) year, or until February 1, 2002, from the petitioner,
Crisanta Alcaraz Miguel. The respondent gave as collateral therefor his house and lot
located at Block 39 Lot 39 Phase 3, Palmera Spring, Bagumbong, Caloocan City.
Due to the respondents failure to pay the loan, the petitioner filed a complaint
against the respondent before the Lupong Tagapamayapa of Barangay San Jose,
Rodriguez, Rizal. The parties entered into a Kasunduang Pag-aayos wherein the
respondent agreed to pay his loan in installments in the amount of Two Thousand
Pesos (P2,000.00) per month, and in the event the house and lot given as collateral is
sold, the respondent would settle the balance of the loan in full. However, the
respondent still failed to pay, and on December 13, 2004, the Lupong Tagapamayapa
issued a certification to file action in court in favor of the petitioner.
On April 7, 2005, the petitioner filed before the Metropolitan Trial Court (MeTC) of
Makati City, Branch 66, a complaint for Collection of Sum of Money. In his Answer
with Counterclaim, the respondent raised the defense of improper venue considering
that the petitioner was a resident of Bagumbong, Caloocan City while he lived in San
Mateo, Rizal.
MTC rendered the decision in favor of petitioner. Upon appeal, RTC affirmed. CA
granted the petition of the respondent, reversing and setting aside the judgment
made RTC. A new judgment is entered dismissing respondents complaint for
collection of sum of money, without prejudice to her right to file the necessary action
to enforce the Kasunduang Pag-aayos.
The CA went on saying that since the parties entered into a Kasunduang Pag-aayos
before the Lupon ng Barangay, such settlement has the force and effect of a court
judgment, which may be enforced by execution within six (6) months from the date of
settlement by the Lupon ng Barangay, or by court action after the lapse of such time.
Considering that more than six (6) months had elapsed from the date of settlement,
the CA ruled that the remedy of the petitioner was to file an action for the execution
of the Kasunduang Pag-aayos in court and not for collection of sum of money.
Consequently, the CA deemed it unnecessary to resolve the issue on venue.
ISSUE:
1. Whether or not a complaint for sum of money is the proper remedy for the
petitioner, notwithstanding the Kasunduang Pag-aayos
2. Whether or not the CA should have decided the case on the merits rather than
remand the case for the enforcement of the Kasunduang Pag-aayos
HELD:
1. YES.
Because the respondent failed to comply with the terms of the Kasunduang Pag-
aayos, said agreement is deemed rescinded pursuant to Article 2041 of the New Civil
Code and the petitioner can insist on his original demand. Perforce, the complaint for
collection of sum of money is the proper remedy.
The petitioner points out that the cause of action did not arise from the Kasunduang
Pag-aayos but on the respondents breach of the original loan agreement. This Court
agrees with the petitioner. It is true that an amicable settlement reached at the
barangay conciliation proceedings, like the Kasunduang Pag-aayos in this case, is
binding between the contracting parties and, upon its perfection, is immediately
executory insofar as it is not contrary to law, good morals, good customs, public
order and public policy.
This is in accord with the broad precept of Article 2037 of the Civil Code, viz:
A compromise has upon the parties the effect and authority of res judicata; but there
shall be no execution except in compliance with a judicial compromise.
Being a by-product of mutual concessions and good faith of the parties, an amicable
settlement has the force and effect of res judicata even if not judicially approved.
It must be emphasized, however, that enforcement by execution of the amicable

settlement, either under the first or the second remedy, is only applicable if the
contracting parties have not repudiated such settlement within ten (10) days from
the date thereof in accordance with Section 416 of the Local Government Code. If
the amicable settlement is repudiated by one party, either expressly or impliedly, the
other party has two options, namely, to enforce the compromise in accordance with
the Local Government Code or Rules of Court as the case may be, or to consider it
rescinded and insist upon his original demand. This is in accord with Article 2041 of
the Civil Code, which qualifies the broad application of Article 2037, viz:
If one of the parties fails or refuses to abide by the compromise, the other party may
either enforce the compromise or regard it as rescinded and insist upon his original
demand.
In the case of Leonor v. Sycip, the Supreme Court (SC) had the occasion to explain
this provision of law. It ruled that Article 2041 does not require an action for
rescission, and the aggrieved party, by the breach of compromise agreement, may
just consider it already rescinded.
In the instant case, the respondent did not comply with the terms and conditions of
the Kasunduang Pag-aayos. Such non-compliance may be construed as repudiation
because it denotes that the respondent did not intend to be bound by the terms
thereof, thereby negating the very purpose for which it was executed.
2. YES.
Considering that the Kasunduang Pag-aayos is deemed rescinded by the non-
compliance of the respondent of the terms thereof, remanding the case to the trial
court for the enforcement of said agreement is clearly unwarranted.

WHEREFORE, the petition is GRANTED. The assailed decision of the Court of
Appeals is SET ASIDE and the Decision of the Regional Trial Court, Branch 146,
Makati City, dated March 14, 2007 is REINSTATED.
SO ORDERED.
Remedio Flores v. Hon. Judge Heila Mallare-Phillipps, Ignacio Binongcal and

Fernando Calion
G.R. No. L-66620, September 24, 1986
FACTS:
Petitioner Flores appealed by certiorari to the Supreme Court the order of

Respondent Judge Mallare-Phillipps of RTC Baguio in dismissing the former's
complaint for lack of jurisdiction. As the records show, the complaint consists of two
causes of action; the first was against Ignacio Binongcal who refused to pay the truck
tires amounting to P11,643 which he purchased from Petitioner Flores in separate
ocassions from August-October 1981; and the second was against Fernando Callion
who also refused to pay an amount of P10,212 representing the cost of truck tires
that he also bought from the petitioner.
Respondent Binongcal moved to dismiss the complaint on the ground of lack of

jurisdiction since the amount being demanded against him does not fall under the
jurisdiction of the regional trial court pursuant to Sec.19(8) of BP Blg.129 which
provides that the RTC will only have jurisdiction if the amount being claimed exceeds
P20,000. He also alleged that his transaction with the Petitioner is separate and
distinct from that of his co-defendant Calion. During the Hearing on the Motion to
Dismiss, Respondent Callion joined in moving for the dismissal of the complaint for
the same ground of lack of jurisdiction. Thereafter, Respondent Judge Mallare
Phillipps rendered a decision dismissing the complaint of Petitioner Flores. Petitioner
maintains that the RTC has the jurisdiction over the casd followinf the 'novel' totality
rule introduced in Sec.33 of BP 129 and Sec.11 of Interim Rules. The pertinent
portion of Section 33(l) of BP129 reads as follows:
... Provided,That where there are several claims or causes of action between the
same or different parties, embodied in the same complaint, the amount of the
demand shall be the totality of the claims in all the causes of action, irrespective of
whether the causes of action arose out of the same or different transactions. ...
Section 11 of the Interim Rules provides thus: Application of the totality rule - In
actions where the jurisdiction of the court is dependent on the amount involved, the
test of jurisdiction shall be the aggregate sum of all the money demands, exclusive
only of interest and costs, irrespective of whether or not the separate claims are
owned by or due to different parties. If any demand is for damages in a civil action,
the amount thereof must be specifically alleged.
ISSUES:
Whether or not the trial court's order of dismissing the case is proper
Whether or not the trial court correctly ruled on the application of permissive joinder
of parties under the Rules of Court.
RULING:
YES. The trial court's decision in dismissing the case is proper. In cases of permissive
joinder of parties, whether as plaintiffs or as defendants, under Section 6 of Rule 3,
the total of all the claims shall now furnish the jurisdictional test. Needless to state
also, if instead of joining or being joined in one complaint separate actions are filed
by or against the parties, the amount demanded in each complaint shall furnish the
jurisdictional test. In the case at bar, the lower court correctly held that the
jurisdictional test is subject to the rules on joinder of parties pursuant to Section 5 of
Rule 2 and Section 6 of Rule 3 of the Rules of Court and that, after a careful scrutiny
of the complaint, it appears that there is a misjoinder of parties for the reason that
the claims against respondents Binongcal and Calion are separate and distinct and
neither of which falls within its jurisdiction of the RTC.
Section 6 of Rule 3 which provides as follows: Permissive joinder of parties.-All

persons in whom or against whom any right to relief in respect to severally, or in the
alternative, may, except as otherwise provided in these rules, join as plaintiffs or be
joined as defendants in one complaint, where any question of law or fact common to
all such plaintiffs or to all such defendants may arise in the action; but the court may
make such orders as may be just to prevent any plaintiff or defendant from being
embarrassed or put to expense in connection with any proceedings in which he may
have no interest.
Ramon Ching and Po Wing Properties v. Hon. Jansen Rodriguez et al., G.R. NO. 192828 November
28, 2011
Facts:
The private respondents filed a Complaint against the Ramon Ching (Ramon), Po Wing Properties and
Stronghold Insurance Company, Global Business Bank, Inc. (formerly PhilBank), Elena Tiu Del Pilar, Asia
Atlantic Resources Ventures, Inc., Registers of Deeds of Manila and Malabon, and all persons claiming
rights or titles from Ramon and his successors-in-interest.
In the Complaint, the respondents alleged the following as causes of action:
First Cause of Action.

1. They are the heirs of Lim San, also known as Antonio Ching / Tiong Cheng / Ching Cheng
Suy (Antonio).
2. Respondents Joseph Cheng (Joseph) and Jaime Cheng (Jaime) are allegedly the children of
Antonio with his common-law wife, respondent Mercedes Igne (Mercedes).
3. Respondent Lucina Santos (Lucina) claimed that she was also a common-law wife of
Antonio.
4. The respondents averred that Ramon misrepresented himself as Antonio's and Lucina's son
when in truth and in fact, he was adopted and his birth certificate was merely simulated.
5. Antonio died of a stab wound. Police investigators identified Ramon as the prime suspect and
he now stands as the lone accused in a criminal case for murder filed against him. Warrants of
arrest issued against him have remained unserved as he is at large.
6. From the foregoing circumstances and upon the authority of Article 919of the New Civil
Code (NCC), the respondents concluded that Ramon can be legally disinherited, hence,
prohibited from receiving any share from the estate of Antonio.
Second Cause of Action.
1. Ramon misrepresented that there were only six real estate properties left by Antonio.
2. Ramon had illegally transferred to his name the titles to the said properties. Further, there are
two other parcels of land, cash and jewelries, plus properties in Hongkong, which were in
Ramon's possession.
Third Cause of Action.
1. Mercedes, being of low educational attainment, was sweet-talked by Ramon into
surrendering to him a Global Business Bank, Inc. (Global Bank) Certificate of Time Deposit
of P4,000,000.00 in the name of Antonio, and the certificates of title covering two
condominium units in Binondo which were purchased by Antonio using his own money but
which were registered in Ramon's name.
2. Ramon also fraudulently misrepresented to Joseph, Jaime and Mercedes that they will
promptly receive their complete shares, exclusive of the stocks in Po Wing Properties, Inc.
(Po Wing), from the estate of Antonio. Exerting undue influence, Ramon had convinced them
to execute an Agreement which was not complied with.
3. Further, Lucina was not informed of the execution of the said instruments and had not
received any amount from Ramon. Hence, the instruments are null and void.
Fourth Cause of Action.
1. Antonio's 40,000 shares in Po Wing, which constitute 60% of the latter's total capital stock,
were illegally transferred by Ramon to his own name through a forged document of sale
executed after Antonio died.
2. Po Wing owns a ten-storey building in Binondo. Ramon's claim that he bought the stocks
from Antonio before the latter died is baseless. Further, Lucina's shares in Po Wing had also
banished into thin air through Ramon's machinations.
Fifth Cause of Action.
1. Ramon executed an Affidavit of Extra-Judicial Settlement of Estate adjudicating solely to
himself Antonio's entire estate to the prejudice of the respondents. By virtue of the said
instrument, new TCTs covering eight real properties owned by Antonio were issued in
Ramon's name.
2. Relative to the Po Wing shares, the Register of Deeds of Manila had required Ramon to post
a Surety Bond conditioned to answer for whatever claims which may eventually surface in
connection with the said stocks. Co-defendant Stronghold Insurance Company issued the
bond in Ramon's behalf.
Sixth Cause of Action.

1. Ramon sold Antonio's two parcels of land in Navotas to co-defendant Asia Atlantic Business
Ventures, Inc. Another parcel of land, which was part of Antonio's estate, was sold by Ramon
to co-defendant Elena Tiu Del Pilar at an unreasonably low price.
2. By reason of Ramon's lack of authority to dispose of any part of Antonio's estate, the
conveyances are null and void ab initio.
Since Ramon is at large, his wife, Belen Dy Tan Ching, now manages Antonio's estate. She has no intent to
convey to the respondents their shares in the estate of Antonio. The Amended Complaint, which impleaded
Metrobank as successor-in-interest of Global, also added a seventh cause of action relative to the existence
of a Certificate of Premium Plus Acquisition (CPPA) in the amount of P4,000,000.00 originally issued by
PhilBank to Antonio. The respondents prayed that they be declared as the rightful owners of the CPPA and
that it be immediately released to them. Alternatively, the respondents prayed for the issuance of a hold
order relative to the CPPA to preserve it during the pendency of the case.
Petitioners filed a Motion to Dismiss on the respondents' Amended Complaint on the alleged ground of the
RTC's lack of jurisdiction over the subject matter of the Complaint. The petitioners argued that since the
Amended Complaint sought the release of the CPPA to the respondents, the latter's declaration as heirs of
Antonio, and the propriety of Ramon's disinheritance, the suit partakes of the nature of a special proceeding
and not an ordinary action for declaration of nullity. Hence, jurisdiction pertains to a probate or intestate
court and not to the RTC acting as an ordinary court.
RTC issued an Order denying the petitioners' Motion to Dismiss on the ground that the action delves mainly
on the question of ownership of the properties described in the complaint. Also, the issue of disinheritance
can be fully settled after a trial on the merits. And at this stage, it has not been sufficiently established
whether or not there is a will. CA affirmed this decision.
ISSUE:
WON RTC should have granted Motion to Dismiss on the ground that the filiation with Antonio of Ramon
and the determination of the extent of Antonio's estate can only be resolved in a special proceeding.
HELD: NO, RTC ACTED CORRECTLY BY DENYING MOTION TO DISMISS.
Although the respondents' Complaint and Amended Complaint sought, among others, the disinheritance of
Ramon and the release in favor of the respondents of the CPPA now under Metrobank's custody, remains to
be an ordinary civil action, and not a special proceeding pertaining to a settlement court.
A special proceeding is a remedy by which a party seeks to establish a status, a right, or a particular fact. It
is distinguished from an ordinary civil action where a party sues another for the enforcement or protection of
a right, or the prevention or redress of a wrong. To initiate a special proceeding, a petition and not a
complaint should be filed. An action for reconveyance and annulment of title with damages is a civil action,
whereas matters relating to settlement of the estate of a deceased person such as advancement of property
made by the decedent, partake of the nature of a special proceeding, which concomitantly requires the
application of specific rules as provided for in the Rules of Court.
Under Article 916 of the NCC, disinheritance can be effected only through a will wherein the legal cause
therefor shall be specified. While the respondents in their Complaint and Amended Complaint sought the
disinheritance of Ramon, no will or any instrument supposedly effecting the disposition of Antonio's estate
was ever mentioned.
The petitioners argue that the prayers in the Amended Complaint, seeking the release in favor of the
respondents of the CPPA under Metrobank's custody and the nullification of the instruments subject of the
complaint, necessarily require the determination of the respondents' status as Antonio's heirs. It bears
stressing that what the respondents prayed for was that they be declared as the rightful owners of the CPPA
which was in Mercedes' possession prior to the execution of the Agreement and Waiver. The respondents
also prayed for the alternative relief of securing the issuance by the RTC of a hold order relative to the CPPA
to preserve Antonio's deposits with Metrobank during the pendency of the case. It can thus be said that the
respondents' prayer relative to the CPPA was premised on Mercedes' prior possession of and their alleged
collective ownership of the same, and not on the declaration of their status as Antonio's heirs.
Further, it also has to be emphasized that the respondents were parties to the execution of an
agreeement prayed to be nullified. Hence, even without the necessity of being declared as heirs of Antonio,
the respondents have the standing to seek for the nullification of the instruments in the light of their claims
that there was no consideration for their execution, and that Ramon exercised undue influence and
committed fraud against them.
In the event that the RTC will find grounds to grant the reliefs prayed for by the respondents, the only
consequence will be the reversion of the properties subject of the dispute to the estate of Antonio. Civil Case
No. 02-105251 was not instituted to conclusively resolve the issues relating to the administration, liquidation
and distribution of Antonio's estate, hence, not the proper subject of a special proceeding for the settlement
of the estate of a deceased person under Rules 73-91 of the Rules of Court. The respondents' resort to an
ordinary civil action before the RTC may not be strategically sound, because a settlement proceeding should
thereafter still follow, if their intent is to recover from Ramon the properties alleged to have been illegally
transferred in his name. Be that as it may, RTC cannot be restrained from taking cognizance of respondents'
Complaint and Amended Complaint as the issues raised and the prayers indicated therein are matters which
need not be threshed out in a special proceeding.
Paglaum Management and Development Corp. and Health Marketing

Technologies, Inc., v. Union Bank of the Philippines, Notary Public John Doe,
and
Register of Deeds of Cebu City and Cebu Province
G.R. No. 179018, April 17, 2013
FACTS:
In 1994, Union Bank of the Philippines extended HealthTech a credit line in the
amount of 10 Million. To secure the obligation, PAGLAUM executed three Real
Estate Mortgages over its three real properties in Cebu Province on behalf of
HealthTech and in favor of Union Bank.

The original contract states that the venue of all suits and actions shall be
commenced in Makati, Metro Manila, or in the place where any of the Mortgaged
Properties is located, at the absolute option of the Mortgagee, the parties hereto
waiving any other venue. Health Tech and Union Bank thereafter increased the
credit line but omitted Makati City as the venue in the subsequent agreements.
In 1997, financial crisis badly hit Health Techs business which made it difficult for
Health Tech to meet its obligations. A restructuring agreement was entered stating
that all actions shall be commenced in in Makati City, with both parties waiving any
other venue.
Health Tech defaulted still. Union Bank extrajudicially foreclosed the three
mortgaged properties. Health Tech thereafter filed a Complaint for Annulment of
Sale and Titles with Damages before the RTC of Makati City.
Union Bank filed a motion to dismiss based on improper venue, among others. The
RTC dismissed the case. The Court of Appeals affirmed the decision of the trial court.
ISSUE:
Whether or not Makati City is the proper venue to assail the foreclosure of the
subject real estate mortgage.
HELD: YES.
The complaint filed in this case is a real action. Accordingly, Sec. 1, Rule 4 provides
that the said case should be tried in the proper court which has jurisdiction over the
area wherein the real property involved, or a portion thereof, is situated.
But Sec. 3 (b), Rule 4 allows real actions to bee commenced and tried in a court
other than where the property is situated in instances where the parties have
previously and validly agreed in writing on the exclusive venue thereof.
In this case, such an agreement exist. The Restructuring Agreement clearly reveals
the intention of the parties to implement a restrictive venue stipulation, which
applies not only to the principal obligation, but also to the mortgages. The phrase
waiving any other venue plainly shows that the choice of Makati City as the venue for
actions arising out of or in connection with the Restructuring Agreement and the
Collateral, with the Real Estate Mortgages being explicitly defined as such, is
exclusive.
Note that in the absence of qualifying or restrictive words, the venue stipulation
should only be deemed as an agreement on an additional forum, and not as a
restriction on a specified place. This is not the case here based on the words
waiving any other venue.
Sps. Domingo M. Belen and Dominga P. Belen vs. Hon. Pablo R. Chavez et al.,
G.R. No. 175334, March 26, 2008

FACTS:
Spouses Silvestre and Patricia Pacleb filed a petition against spouses Domingo and
Dominga Belen before the RTC of Rosario, Batangas. It was alleged that spouses
Pacleb secured a judgment by default in a case rendered by a Judge John W. Green of
the Superior Court of the State of California. In this judgment, spouses Belen were
ordered to pay spouses Pacleb the amount of $56,204.69 representing loan
repayment and share in the profits plus interest and costs of suit. The summons was
served on spouses Belens address in San Gregorio, Alaminos, Laguna, and was
received by Marcelo M. Belen.
Atty. Reynaldo Alcantara entered his appearance as counsel for spouses Belen and
subsequently filed an answer alleging that they were actually residents of California,
USA. In the answer it was also claimed that their liability had been extinguished by a
release of abstract judgment issued in the same collection case.
Spouses Belen failed to attend the scheduled pre-trial conference, and because of
this, the RTC ordered the ex parte presentation of evidence for spouses Pacleb
before the branch clerk of court. Atty. Alcantara filed a motion to dismiss, citing the
judgment of dismissal issued by the Superior Court of the State of California, which
allegedly dismissed the case before it involving the same parties.
The RTC denied the motion to dismiss. Through a motion, Atty. Alcantara sought the
reinstatement of the motion to dismiss by attaching a copy of the said foreign
judgment. Spouses Pacleb on the other hand filed a motion for the amendment of the
complaint. The amended complaint averred that they were constrained to withdraw
their complaint against spouses Belen from the California court because of the
prohibitive cost of litigation, which withdrawal was favorably considered by said
court.
Spouses Belen and Atty. Alcantara failed to appear at the rescheduled pretrial
conference. The RTC therefore declared them in default and allowed Spouses Pacleb
to present evidence ex parte. Following this, Atty. Alcantara passed away without the
RTC being informed of such fact. On 5 August 2003, the RTC rendered a Decision
ordering spouses Belen to pay spouses Pacleb. A copy of the RTC decision intended
for Atty. Alcantara was returned with the notation Addressee Deceased. A copy of
the RTC decision was then sent to the purported address of petitioners in San
Gregorio, Alaminos, Laguna and was received by a certain Leopoldo Avecilla. After
the promulgation of the RTC decision, Spouses Pacleb filed an ex parte motion for
preliminary attachment. Afterward, RTC directed the issuance of a writ of execution.
the real properties belonging to spouses Belen were levied upon and the public
auction. Subsequently, Atty. Carmelo B. Culvera entered his appearance as counsel
for Spouses Belen. He then filed a Motion to Quash Writ of Execution, and Atty.
Culvera averring that he received a copy thereof only on 29 December 2003
subsequently filed A Notice of Appeal from the RTC Decision. The RTC denied the
motion and Atty. Culveras subsequent motion for reconsideration of said order.
Spouses Belen then filed a Rule 65 petition before the Court of Appeals.
The Court of Appeals dismissed the Petition for Certiorari. Spouses Belen appealed
before the Supreme Court, which it denied because it is not accompanied by a valid
verification and certification of nonforum shopping. They sought reconsideration,
which the Court granted. The Court also ordered the reinstatement of the petition
and the filing of a comment.
ISSUES:
1. WON the RTC acquired jurisdiction over the persons spouses Belen through either
the proper service of summons or the appearance of the late Atty. Alcantara on
behalf of petitioners
2. WON there was a valid service of the copy of the RTC decision on them.
HELD:
1. Yes, RTC acquired jurisdiction over spouses Belen. 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. Jurisdiction over the person of a resident defendant who does not
voluntarily appear in court can be acquired by personal service of summons. If he
cannot be personally served, substituted service may be made. If he is temporarily
out of the country, any of the following modes of service may be resorted to: (1)
substituted service; (2) personal service outside the country, with leave of court; (3)
service by publication, also with leave of court; or (4) any other manner the court
may deem sufficient.
However, in an action in personam in which the defendant is a nonresident who does

not voluntarily submit himself to the authority of the court, personal service of
summons within the state is essential to the acquisition of jurisdiction over his
person. This is only possible if the defendant is physically present in the country.
Otherwise, the court cannot acquire jurisdiction over his person and therefore
cannot validly try and decide the case against him.
On the other hand, in a proceeding in rem or quasi in rem, jurisdiction over the
person of the defendant is not a prerequisite to confer jurisdiction on the court
provided that the court acquires jurisdiction over the res. Nonetheless, summons
must be served upon the defendant not for the purpose of vesting the court with
jurisdiction but merely for satisfying the due process requirements. Thus, where the
defendant is a nonresident who is not found in the Philippines and (1) the action
affects the personal status of the plaintiff; (2) the action relates to, or the subject
matter of which is property in the Philippines in which the defendant has or claims a
lien or interest; (3) the action seeks the exclusion of the defendant from any interest
in the property located in the Philippines; or (4) the property of the defendant has
been attached in the Philippinesservice of summons may be effected by (a)
personal service out of the country, with leave of court; (b) publication, also with
leave of court; or (c) any other manner the court may deem sufficient.
The action filed against spouses Belen is for the enforcement of a foreign judgment
in a complaint for breach of contract whereby they were ordered to pay spouses
Pacleb the monetary award. It is in the nature of an action in personam because the
latter are suing to enforce their personal rights under said judgment. As such,
jurisdiction over the person of the defendant who does not voluntarily submit himself
to the authority of the court is necessary for the court to validly try and decide the
case through personal service or, if this is not possible and he cannot be personally
served, substituted service. In this case, spouses Belen have been permanent
residents of California, U.S.A. since the filing of the action up to the present. In the
answer, Atty. Alcantara had already averred that petitioners were residents of
California, U.S.A. and that he was appearing only upon the instance of petitioners
relatives. Moreover, private respondents attorneyinfact, Joselito Rioveros, testified
that he knew petitioners to be former residents of Alaminos, Laguna but are now
living in California, U.S.A. However, Spouses Belen voluntarily submitted themselves
through Atty. Alcantara to the jurisdiction of the RTC, by allowing him to file motions
and pleadings.
2. No, there was no valid service of the copy of the decision of the RTC. As a general
rule, when a party is represented by counsel of record, service of orders and notices
must be made upon said attorney and notice to the client and to any other lawyer,
not the counsel of record, is not notice in law. The exception to this rule is when
service upon the party himself has been ordered by the court. In this case, a copy of
the RTC decision was sent first to Atty. Alcantara, petitioners counsel of record, but
it was returned unserved in view of the demise of Atty. Alcantara. Thus, a copy was
subsequently sent to petitioners last known address in San Gregorio, Alaminos,
Laguna, which was received by a certain Leopoldo Avecilla. The subsequent service
on petitioners purported last known address by registered mail is defective
because it does not comply with the requisites on service by registered mail, which
presupposes that the present address of the party is known, and the person receiving
it must be authorized to receive such service. Since the filing of the complaint,
petitioners could not be physically found in the country because they had already
become permanent residents of California, U.S.A. The service of the RTC decision at
spouses Belens former address in Alaminos, Laguna is defective and does not bind
petitioners.
Planters Development Bank v. Julie Chandumal, G. R. No. 195619, September
5, 2012
FACTS:
The instant case stemmed from a contract to sell a parcel of land with
improvements ,between BF Homes, Inc. (BF Homes) and herein respondent Julie
Chandumal (Chandumal). The property subject of the contract is located in Talon
Dos, Las Pias City.
Chandumal paid her monthly amortizations from December 1990 until May 1994
when she began to default in her payments. In a Notice of Delinquency and
Rescission of Contract with Demand to Vacate4 dated July 14, 1998, PDB gave
Chandumal a period of thirty (30) days from receipt within which to settle her
installment arrearages together with all its increments; otherwise, all her rights
under the contract shall be deemed extinguished and terminated and the contract
declared as rescinded. Despite demand, Chandumal still failed to settle her
obligation.
On June 18, 1999, an action for judicial confirmation of notarial rescission and
delivery of possession was filed by PDB against Chandumal. PDB alleged that despite
demand, Chandumal failed and/or refused to pay the amortizations as they fell due;
hence, it caused the rescission of the contract by means of notarial act. According to
PDB, it tried to deliver the cash surrender value of the subject property in the
amount of P 10,000.00; however, the defendant was unavailable for such purpose.

Consequently, summons was issued and served by deputy sheriff Roberto T. Galing
(Sheriff Galing). According to his return, Sheriff Galing attempted to personally serve
the summons upon Chandumal on July 15, 19 and 22, 1999 but it was unavailing as
she was always out of the house on said dates. Hence, the sheriff caused substituted
service of summons on August 5, 1999 by serving the same through Chandumals
mother who acknowledged receipt thereof.
For her failure to file an answer within the prescribed period, PDB filed an ex parte
motion to declare Chandumal in default. And on January 12, 2001, the RTC issued an
Order granting the motion of PDB.8
On February 23, 2001, Chandumal filed an Urgent Motion to Set Aside Order of
Default and to Admit Attached Answer. She maintained that she did not receive the
summons and/or was not notified of the same. She further alleged that her failure to
file an answer within the reglementary period was due to fraud, mistake or excusable
negligence. Chandumal alleged the following defenses: (a) contrary to the position of
PDB, the latter did not make any demand for her to pay the unpaid monthly
amortization; and (b) PDB did not tender or offer to give the cash surrender value of
the property in an amount equivalent to fifty percent (50%) of the actual total
payment made, as provided for under Section 3(b) of R.A. No. 6552. Moreover,
Chandumal claimed that since the total payment she made amounts to P 782,000.00,
the corresponding cash surrender value due her should be P391,000.00.
The RTC denied Chandumals motion to set aside the order of default. Her motion for
reconsideration was also denied for lack of merit.11 Hence, the RTC allowed PDB to
present its evidence ex parte.
On May 31, 2004, the RTC rendered a Decision13 in favor of PDB, the dispositive
portion of which provides:
1. Declaring the notarial rescission of the Contract to Sell dated 03 January 1990
made by the plaintiff per the Notice of Delinquency and Rescission of Contract with
Demand to Vacate dated 14 July 1998 as judicially confirmed and ratified;
2. Requiring the plaintiff to deposit in the name of the defendant the amount of P
10,000.00 representing the cash surrender value for the subject property with the
Land Bank of the Philippines, Las Pi[]as City Branch in satisfaction of the provisions
of R.A. No. 6552; and,
3. Ordering the defendant to pay the plaintiff the amount of P 50,000.00 as and by
way of attorneys fees, including the costs of suit.
Chandumal appealed to the CA.

The CA, without ruling on the propriety of the judicial confirmation of the notarial
rescission, rendered the assailed decision nullifying the RTC decision due to invalid
and ineffective substituted service of summons. The dispositive portion of the CA
decision provides:
PDB filed a motion for reconsideration but the CA in its Resolution dated February
16, 2011 denied it.
Hence, this petition based on the following assignment of errors:
PDB contends that the RTC properly acquired jurisdiction over the person of
Chandumal. According to PDB, there was proper service of summons since the
sheriff complied with the proper procedure governing substituted service of
summons as laid down in Section 7, Rule 14 of the Rules of Court. PDB alleges that it
is clear from the sheriffs return that there were several attempts on at least three
(3) different dates to effect personal service within a reasonable period of nearly a
month, before he caused substituted service of summons. The sheriff likewise stated
the reason for his failure to effect personal service and that on his fourth attempt; he
affected the service of summons through Chandumals mother who is unarguably, a
person of legal age and with sufficient discretion. PDB also argues that Chandumal
voluntarily submitted herself to the jurisdiction of the court when she filed an Urgent
Motion to Set Aside Order of Default and to Admit Attached Answer.
On the other hand, Chandumal asserts that she never received a copy of the
summons or was ever notified of it and she only came to know of the case sometime
in July or August 2000, but she was already in the United States of America by that
time, and that the CA correctly ruled that there was no valid service of summons;
hence, the RTC never acquired jurisdiction over her person.
ISSUE:
Whether or not there was a valid substituted service of summons
Whether or not Chandumal voluntarily submitted to the jurisdiction of the trial.court;
Whether or not there was proper rescission by notarial act of the contract to sell.
HELD:
1. There was no valid substituted service of summons.
In this case, the sheriff resorted to substituted service of summons due to his failure
to serve it personally. In Manotoc v. Court of Appeals,22 the Court detailed the
requisites for a valid substituted service of summons, summed up as follows: (1)
impossibility of prompt personal service the party relying on substituted service or
the sheriff must show that the defendant cannot be served promptly or there is
impossibility of prompt service; (2) specific details in the return the sheriff must
describe in the Return of Summons the facts and circumstances surrounding the
attempted personal service; (3) a person of suitable age and discretion the sheriff
must determine if the person found in the alleged dwelling or residence of defendant
is of legal age, what the recipients relationship with the defendant is, and whether
said person comprehends the significance of the receipt of the summons and his duty
to immediately deliver it to the defendant or at least notify the defendant of said
receipt of summons, which matters must be clearly and specifically described in the
Return of Summons; and (4) a competent person in charge, who must have sufficient
knowledge to understand the obligation of the defendant in the summons, its
importance, and the prejudicial effects arising from inaction on the summons.
In applying the foregoing requisites in the instant case, the CA correctly ruled that
the sheriffs return failed to justify a resort to substituted service of summons.
According to the CA, the Return of Summons does not specifically show or indicate in
detail the actual exertion of efforts or any positive step taken by the officer or
process server in attempting to serve the summons personally to the defendant. The
return merely states the alleged whereabouts of the defendant without indicating
that such information was verified from a person who had knowledge thereof.25
Indeed, the sheriffs return shows a mere perfunctory attempt to cause personal
service of the summons on Chandumal. There was no indication if he even asked
Chandumals mother as to her specific whereabouts except that she was "out of the
house", where she can be reached or whether he even tried to await her return. The
"efforts" exerted by the sheriff clearly do not suffice to justify substituted service and
his failure to comply with the requisites renders such service ineffective.

2. Yes, respondent voluntarily submitted to the jurisdiction of the trial court.
Despite that there was no valid substituted service of summons, the Court,
nevertheless, finds that Chandumal voluntarily submitted to the jurisdiction of the
trial court.
Section 20, Rule 14 of the Rules of Court states:

Sec. 20. Voluntary appearance. The defendants voluntary appearance in the action
shall be equivalent to service of summons. The inclusion in a motion to dismiss of
other grounds aside from lack of jurisdiction over the person of the defendant shall
not be deemed a voluntary appearance.
When Chandumal filed an Urgent Motion to Set Aside Order of Default and to Admit
Attached Answer, she effectively submitted her person to the jurisdiction of the trial
court as the filing of a pleading where one seeks an affirmative relief is equivalent to
service of summons and vests the trial court with jurisdiction over the defendants
person. Thus, it was ruled that the filing of motions to admit answer, for additional
time to file answer, for reconsideration of a default judgment, and to lift order of
default with motion for reconsideration is considered voluntary submission to the
trial courts jurisdiction.27 The Court notes that aside from the allegation that she
did not receive any summons, Chandumals motion to set aside order of default and
to admit attached answer failed to positively assert the trial courts lack of
jurisdiction. In fact, what was set forth therein was the substantial claim that PDB
failed to comply with the requirements of R.A. No. 6552 on payment of cash
surrender value,28 which already delves into the merits of PDBs cause of action. In
addition, Chandumal even appealed the RTC decision to the CA, an act which
demonstrates her recognition of the trial courts jurisdiction to render said judgment.
Given Chandumals voluntary submission to the jurisdiction of the trial court, the
RTC, Las Pias City, Branch 255, had all authority to render its Decision dated May
31, 2004. The CA, therefore, erred in nullifying said RTC decision and dispensing
with the resolution of the substantial issue raised herein, i.e., validity of the notarial
rescission. Instead, however, of remanding this case to the CA, the Court will resolve
the same considering that the records of the case are already before us and in order
to avoid any further delay.
3. There is no valid rescission of the contract to sell by notarial act pursuant to

Section 3(b), R.A. No. 6552.
That the RTC had jurisdiction to render the decision does not necessarily mean,
however, that its ruling on the validity of the notarial rescission is in accord with the
established facts of the case, the relevant law and jurisprudence.
In Leao v. Court of Appeals,30 it was held that:

R. A. No. 6552 recognizes in conditional sales of all kinds of real estate (industrial,
commercial, residential) the right of the seller to cancel the contract upon non-
payment of an installment by the buyer, which is simply an event that prevents the
obligation of the vendor to convey title from acquiring binding force. The law also
provides for the rights of the buyer in case of cancellation. Thus, Sec. 3 (b) of the law
provides that:
"If the contract is cancelled, the seller shall refund to the buyer the cash surrender
value of the payments on the property equivalent to fifty percent of the total
payments made and, after five years of installments, an additional five percent every
year but not to exceed ninety percent of the total payments made: Provided, That the
actual cancellation of the contract shall take place after thirty days from receipt by
the buyer of the notice of cancellation or the demand for rescission of the contract by
a notarial act and upon full payment of the cash surrender value to the buyer."
R.A. No. 6552 recognizes the right of the seller to cancel the contract but any such
cancellation must be done in conformity with the requirements therein prescribed. In
addition to the notarial act of rescission, the seller is required to refund to the buyer
the cash surrender value of the payments on the property. The actual cancellation of
the contract can only be deemed to take place upon the expiry of a thirty (30)-day
period following the receipt by the buyer of the notice of cancellation or demand for
rescission by a notarial act and the full payment of the cash surrender value.
Under the present case, it is an admitted fact that PDB failed to give Chandumal the
full payment of the cash surrender value. In its complaint,33 PDB admitted that it
tried to deliver the cash surrender value of the subject property as required under
R.A. No. 6552 but Chandumal was "unavailable" for such purpose. Thus, it prayed in
its complaint that it be ordered to "deposit with a banking institution in the
Philippines, for the account of Defendants (sic), the amount of Ten Thousand Pesos (P
10,000.00), Philippine Currency, representing the cash surrender value of the subject
property; x x x."34 The allegation that Chandumal made herself unavailable for
payment is not an excuse as the twin requirements for a valid and effective
cancellation under the law, i.e., notice of cancellation or demand for rescission by a
notarial act and the full payment of the cash surrender value, is mandatory.35
Consequently, there was no valid rescission of the contract to sell by notarial act
undertaken by PDB and the RTC should not have given judicial confirmation over the
same.

Yu v. Pacleb, etc.
G.R. No. 172172
February 24, 2009
FACTS:
Respondent Baltazar N. Pacleb and his late first wife, Angelita Chan, are the
registered owners of a parcel of land, which became the subject of three (3)
documents purporting to transfer its ownership. a Deed of Absolute Sale was entered
into between Spouses Baltazar N. Pacleb and Angelita Chan and Rebecca Del
Rosario. Subsequently, a Deed of Absolute Sale was entered into between Rebecca
Del Rosario and Ruperto L. Javier (Javier), and thereafter a Contract to Sell was
entered into between Javier and petitioner spouses Ernesto V. Yu and Elsie Ong Yu.
Javier undertook to deliver possession of the Langcaan Property and to sign a deed of
absolute sale within thirty (30) days from execution of the contract. All these
aforementioned sales were not registered.
Petitioner spouses Yu filed with the Regional Trial Court a Complaint for specific
performance and damages against Javier to compel the latter to deliver to them
ownership and possession, as well as title to the subject property. In their Complaint,
they alleged that Javier represented to them that the Langcaan Property was not
tenanted. However, when they had already paid an initial payment, they discovered
that the land was tenanted by one Ramon Pacleb. Thereafter, petitioner spouses and
Javier verified from Ramon if he was willing to vacate the property and the latter was
agreeable. Javier then promised to make arrangements with Ramon to vacate the
property and to pay the latter his disturbance compensation. Hence, they proceeded
to enter into a Contract to Sell canceling the Agreement mentioned. However, Javier
failed to comply with his obligations. Javier did not appear in the proceedings and
was declared in default. Judgment was eventually rendered against him by the RTC,
and the same attained finality. Petitioner spouses and Ramon Pacleb and the latters
wife, then executed an agreement whereby petitioner spouses paid Ramon the
amount of P500,000 in exchange for the waiver of his tenancy rights over the
property.

Respondent filed a Complaint for annulment of deed of sale and other documents
arising from it. He alleged that the deed of sale purportedly executed between him
and his late first wife and Rebecca Del Rosario was spurious as their signatures
thereon were forgeries. Respondent moved to have summons served upon Rebecca
Del Rosario by publication since the latters address could not be found. The trial
court, however, denied his motion. Respondent then moved to dismiss the case, and
the trial court granted the motion dismissing the case without prejudice. Thereafter,
on November 23, 1995, petitioner spouses filed an action for forcible entry against
respondent with the Municipal Trial Court (MTC). They alleged that they had prior
physical possession of the property through their trustee, Ramon, until the latter was
ousted by respondent. MTC ruled in favor of petitioner spouses, which decision was
affirmed by the Regional Trial Court. However, the Court of Appeals set aside the
decisions of the lower courts and found that it was respondent who had prior
physical possession of the property as shown by his payment of real estate taxes
thereon. Respondent then filed the instant case for removal of cloud from title with
damages of the subject property. Respondent alleged that the deed of sale between
him and his late first wife and Rebecca Del Rosario, who is not known to them, could
not have been possibly executed on the date appearing thereon. He alleged that on
said date, he was residing in the United States and his late first wife, Angelita Chan,
died twenty years ago.
During the pendency of the instant case before the trial court, respondent died
without having testified on the merits of his case. Hence, he was substituted by his
surviving spouse. Subsequently, trial court dismissed respondents case and held that
petitioner spouses are purchasers in good faith. Further, the trial court held that the
previous decision on petitioner spouses action for specific performance against
Javier is already final and can no longer be altered. Accordingly, the trial court
ordered the cancellation of the certificate of title of the property in the name of
respondent and the issuance of a new title in the name of petitioner spouses. On
appeal by respondent, the Court of Appeals reversed and set aside the decision of the
trial court. The Court of Appeals ruled that petitioner spouses are not purchasers in
good faith and that the previous decision did not transfer ownership of the property
to them.
ISSUE(s):
(1) WON petitioner spouses are innocent purchasers for value and in good faith.
(2) WON ownership over the subject property was properly vested in petitioner
spouses by virtue of the previous Decision in the specific performance case and such
Decision is binding and conclusive to the property as well as to the respondents.
RULING(s):
(1) NO. At the outset, it must be noted that in petitioner Yus testimony, he stated
that he inspected the property and talked with the tenant, Ramon, before he
purchased the same. However, in his Complaint for specific performance and
damages which he filed against Javier, he alleged that it was only after he had
entered into an Agreement for the sale of the property and his initial payment that he
discovered that the property was indeed being tenanted by Ramon who lives in the
said farm. Second, a perusal of the two deeds of absolute sale reveals that they were
executed only about two (2) months apart and that they contain identical provisions.
Third, it is undisputed that the property is in the possession of Ramon, the son of the
registered owner. Regardless of the representations given by the latter, this bare fact
alone should have made petitioner spouses suspicious as to the veracity of the
alleged title of their vendor.
(2) NO. It has been held in an unbroken string of cases that an action for specific
performance is an action in personam. It is well-settled that an action for specific
performance praying for the execution of a deed of sale in connection with an
undertaking in a contract, such as the contract to sell, in this instance, is an action in
personam. The action for specific performance and damages filed by petitioner
spouses against Javier is to compel performance of the latters undertakings under
their Contract to Sell. As correctly held by the Court of Appeals, its object is to
compel Javier to accept the full payment of the purchase price, and to execute a deed
of absolute sale over the property in their favor. The obligations of Javier under the
contract to sell attach to him alone, and do not burden the subject property. Being a
judgment in personam, it is binding only upon the parties properly impleaded therein
and duly heard or given an opportunity to be heard. Therefore, it cannot bind
respondent since he was not a party therein. Neither can respondent be considered
as privy thereto since his signature and that of his late first wife, Angelita Chan,
were forged in the deed of sale.
GOODLAND COMPANY, INC., petitioner, vs. ASIA UNITED BANK, CHRISTINE

T. CHAN, FLORANTE DEL MUNDO, ENGRACIO M. ESCASINAS, JR., in his
official capacity as Clerk of Court & Ex-Officio Sheriff in the Regional Trial
Court of Makati City, NORBERTO B. MAGSAJO, in his official capacity as
Sheriff IV of the Regional Trial Court of Makati City, and RONALD A.
ORTILE, in his official capacity as the Register of Deeds for Makati City,
respondents.
G.R. No. 195546. March 14, 2012.

GOODLAND COMPANY, INC., petitioner, vs. ASIA UNITED BANK, ABRAHAM
CO, ATTY. JOEL T. PELICANO AND THE REGISTER OF DEEDS OF MAKATI
CITY, respondents.
G.R. No. 195561. March 14, 2012.
FACTS:
Sometime in July 1999, petitioner Goodland Company, Inc. (petitioner) mortgaged its
two parcels of land situated in Sta. Rosa, Laguna and covered by Transfer Certificate
of Title (TCT) Nos. 321672 and 321673 (Laguna Properties). The Third Party Real
Estate Mortgage (REM) secured the loans extended by respondent Asia United Bank
(AUB) to Radio Marine Network (Smartnet), Inc. (RMNSI), doing business as
Smartnet Philippines, under the latters P250,000,000.00 Omnibus Credit Line with
AUB.
In addition to the aforesaid collaterals, petitioner executed a Third Party REM over
its 5,801-square meter property located at Pasong Tamo St., Makati City (Makati
Property) covered by TCT No. 114645. The REMs, both signed by Gilbert G. Guy,
President of Goodland Company, Inc., were duly registered by AUB with the Registry
of Deeds for Calamba, Laguna and Registry of Deeds for Makati City, and annotated
on the said titles.
Subsequently, however, petitioner repudiated the REMs by claiming that AUB and its
officers unlawfully filled up the blank mortgage forms and falsified the entries
therein. The Laguna properties were the subject of two suits filed by petitioner to
forestall their imminent foreclosure, and similar actions were likewise instituted by
petitioner involving the Makati property which is the subject of the present case.
However, the only subject of the present petition is the Makati Property. The Laguna
Properties were the subject of separate petitions.
Petitioner instituted two suits involving the Makati Property. The first suit filed by
petitioner was an action for an annulment of the REM covering the Makati Property
on the ground of its fraudulent and irregular execution and registration. (Civil Case
No. 03-045). This action was filed before the Regional Trial Court (RTC), Branch 56
of Makati City.
On the other hand, the second suit filed by petitioner prayed for injunctive relief
and/or nullification of the extrajudicial foreclosure sale which petitioner alleged to be
procedurally and legally defective. (Civil Case No. 06-1032). This action was filed
before the RTC, Branch 145 of Makati City.
The RTC (Branch 145) issued an Order denying petitioners application for the
issuance of a writ of preliminary injunction, as well as respondents motion to dismiss
based on forum shopping, non-payment of correct docket fees and failure to state a
cause of action. However, the court reserved the issuance of the corresponding order
requiring petitioner to pay the appropriate docket fees after respondents shall have
submitted what they believed should have been the correct computation thereof.
On motion of respondents, Civil Case No. 06-1032 was consolidated with Civil Case
No. 03-045. Prior to the consolidation, respondents moved to dismiss with prejudice
the two cases on the grounds of forum shopping, and that no jurisdiction was

acquired by the RTC in Civil Case No. 03-045 for failure to pay the proper docket and
other legal fees.
In a Joint Order, the RTC (Branch 56) dismissed with prejudice the complaints in
both cases. Petitioner filed two separate motions for reconsideration, which the RTC
likewise denied.
Petitioner again filed separate appeals before the Court of Appeals (CA), which were
docketed under only one case (CA-G.R. CV No. 90418). The appellate court sustained
the dismissal made by trial court on the ground of forum shopping, but not on the
ground of improper docket and other legal fees.
ISSUE:
Whether or not petitioner violated the rule against forum shopping.
HELD: Yes.
For forum shopping can be said to exist, the following must concur: (1) identity of
parties, or at least such parties as represent the same interests in both actions, (2)
identity of rights asserted and relief prayed for, the relief being founded on the same
facts, and (3) the identity of the two preceding particulars is such that any judgment
rendered in the other action will, regardless of which party is successful, amount to
res judicata in the action under consideration. The Court ruled that these elements
are present in the instant case.
There is identity of parties in the instant case notwithstanding that in the first case
(Civil Case No. 03-045), only one bank officer (Co), the notary public (Pelicano) and
the Register of Deeds were impleaded along with AUB as defendants, whereas in the
second case (Civil Case No. 06-1032), AUB and its two officers (Chan and Del
Mundo), along with the RTC Clerk of Court (Escasinas, Jr.), Sheriff (Magsajo) and the
Register of Deeds of Makati City (Ortile) were the named defendants. The parties in
both cases are substantially the same as they represent the same interests and
offices/positions, and who were impleaded in their respective capacities with
corresponding liabilities/duties under the claims asserted.
The prayer for relief in the two cases was based on the same attendant facts in the
execution of REMs over petitioners properties in favor of AUB. While the
extrajudicial foreclosure of mortgage, consolidation of ownership in AUB and
issuance of title in the latters name were set forth only in the second case (Civil
Case No. 06-1032), these were simply the expected consequences of the REM
transaction in the first case (Civil Case No. 03-045). These eventualities are precisely
what petitioner sought to avert when it filed the first case. Undeniably then, the
injunctive relief sought against the extrajudicial foreclosure, as well as the
cancellation of the new title in the name of the creditor-mortgagee AUB, were all
premised on the alleged nullity of the REM due to its allegedly fraudulent and
irregular execution and registrationthe same facts set forth in the first case. In
both cases, petitioner asserted its right as owner of the property subject of the REM,
while AUB invoked the rights of a foreclosing creditor-mortgagee.
With respect to identity of cause of action, a cause of action is defined in Section 2,

Rule 2 of the Rules of Court as the act or omission by which a party violates the right
of another. The Court made reference to the test in determining whether or not the
causes of action in the first and second cases are identical, to wit: would the same
evidence support and establish both the present and former cause of action? If so,
the former recovery is a bar; if otherwise, it does not stand in the way of the former
action.
In the first case, petitioner alleged the fraudulent and irregular execution and
registration of the REM which violated its right as owner who did not consent
thereto, while in the second case petitioner cited further violation of its right as
owner when AUB foreclosed the property, consolidated its ownership and obtained a
new TCT in its name. Considering that the aforesaid violations of petitioners right as
owner in the two cases both hinge on the binding effect of the REM, i.e., both cases
will rise or fall on the issue of the validity of the REM, it follows that the same
evidence will support and establish the first and second causes of action. The
procedural infirmities or non-compliance with legal requirements for extrajudicial
foreclosure raised in the second case were but additional grounds in support of the
injunctive relief sought against the foreclosure which was, in the first place, illegal
on account of the mortgage contracts nullity. Evidently, petitioner never relied solely
on the alleged procedural irregularities in the extrajudicial foreclosure when it
sought the reliefs in the second case.
Lastly, Under Sec. 7, Rule 5 of the Rules of Court:
The plaintiff is required under oath to certify, among others, his undertaking to
report to the court the fact of filing of a similar case, failing which shall be cause for
the dismissal of the case, to wit:
(c)if he should thereafter learn that the same or similar action or claim has been
filed or is pending, he shall report that fact within five (5) days therefrom to the
court wherein his aforesaid complaint or initiatory pleading has been filed.
non-compliance with any of the undertakings therein shall constitute indirect
contempt of court, without prejudice to the corresponding administrative and
criminal actions. If the acts of the party or his counsel clearly constitute willful and
deliberate forum shopping, the same shall be ground for summary dismissal with
prejudice and shall constitute direct contempt, as well as a cause for administrative
sanctions.
The Court ruled that petitioners act of forum shopping was deliberate and malicious
considering that it knowingly filed Civil Case No. 06-1032 despite the pendency of
Civil Case No. 03-045. This being the case, the act of petitioner is punishable by and
results in the summary dismissal of the actions filed. Both Civil Case No. 03-045 and
Civil Case No. 06-1032 are therefore correctly dismissed with prejudice.

Imelda Relucio vs. Angelina Mejia Lopez
FACTS:
Private respondent Angelina Mejia Lopez filed a petition for APPOINTMENT AS

SOLE ADMINISTRATRIX OF CONJUGAL PARTNERSHIP OF PROPERTIES,
FORFEITURE, ETC., against defendant Alberto Lopez and petitioner Imelda
Relucioin a special proceeding. In the petition, private-respondent alleged that
sometime in 1968, defendant Lopez, who is legally married to the private
respondent, abandoned the latter and their four legitimate children; that he
arrogated unto himself full and exclusive control and administration of the conjugal
properties, spending and using the same for his sole gain and benefit to the total
exclusion of the private respondent and their four children; that defendant Lopez,
after abandoning his family, maintained an illicit relationship and cohabited with
herein petitioner since 1976.
It was further alleged that defendant Lopez and petitioner Relucio, during their
period of cohabitation since 1976, have amassed a fortune consisting mainly of
stockholdings in Lopez-owned or controlled corporations, residential, agricultural,
commercial lots, houses, apartments and buildings, cars and other motor vehicles,
bank accounts and jewelry. In order to avoid defendant Lopez obligations as a father
and husband, he excluded the private respondent and their four children from
sharing or benefiting from the conjugal properties and the income or fruits
therefrom. He placed substantial portions of these conjugal properties in the name of
petitioner Relucio.
On December 8, 1993, a Motion to Dismiss the Petition was filed by herein petitioner
on the ground that private respondent has no cause of action against her.
An Order dated February 10, 1994 was issued by the judge denying petitioner
Relucios Motion to Dismiss on the ground that she is impleaded as a necessary or
indispensable party because some of the subject properties are registered in her
name and defendant Lopez, or solely in her name.
ISSUES:
1. Whether respondents petition for appointment as sole administratrix of the
conjugal property, accounting, etc. against her husband Alberto J. Lopez established
a cause of action against petitioner.
2. Whether petitioners inclusion as party defendant is essential in the proceedings
for a complete adjudication of the controversy.
HELD: Petition Granted
1. No, the complaint is by an aggrieved wife against her husband. Nowhere in the
allegations does it appear that relief is sought against petitioner. Respondents
causes of action were all against her husband.
The first cause of action is for judicial appointment of respondent as administratrix of

the conjugal partnership or absolute community property arising from her marriage
to Alberto J. Lopez. Petitioner is a complete stranger to this cause of action. Article
128 of the Family Code refers only to spouses.
Art 128: If a spouse without just cause abandons the other or fails to comply with
his or her obligations to the family, the aggrieved spouse may petition the court for
receivership, for judicial separation of property, or for authority to be the sole
administrator of the conjugal partnership property xxx
Respondent alleges that Alberto J. Lopez is her husband. Therefore, her first cause of
action is against Alberto J. Lopez. There is no right-duty relation between petitioner
and respondent that can possibly support a cause of action.
The second cause of action is for an accounting by respondent husband. The

accounting of conjugal partnership arises from or is an incident of marriage.
Petitioner has nothing to do with the marriage between respondent Alberto J. Lopez.
Hence, no cause of action can exist against petitioner on this ground.
The third cause of action is essentially for forfeiture of Alberto J. Lopez share in
property co-owned by him and petitioner. It does not involve the issue of validity of
the co-ownership between Alberto J. Lopez and petitioner. The issue is whether there
is basis in law to forfeit Alberto J. Lopez share. Respondents asserted right to forfeit
extends to Alberto J. Lopez share alone, such cause of action, however, pertains to
Alberto J. Lopez, not petitioner. The respondent also sought support. Support cannot
be compelled from a stranger.
2. No, petitioner would not be affected by any judgment in Special Proceeding.
If petitioner is not a real party in interest, she cannot be an indispensable party. An

indispensable party is one without whom there can be no final determination of an
action. Petitioners participation in Special Proceeding is not indispensable.The trial
court can issue a judgment ordering Alberto J. Lopez to make an accounting of his
conjugal partnership with respondent, and give support to respondent and their
children, and dissolve Alberto J. Lopez conjugal partnership with respondent, and
forfeit Alberto J. Lopez share in property co-owned by him and petitioner. Such
judgment would be perfectly valid and enforceable only against Alberto J. Lopez.
In the context of her petition in the lower court, respondent would be accorded
complete relief if Alberto J. Lopez were ordered to account for his alleged conjugal
partnership property with respondent, give support to respondent and her children,
turn over his share in the co-ownership with petitioner and dissolve his conjugal
partnership or absolute community property with respondent. Petitioner is not a
necessary party because her cause of action is against her husband, not the
petitioner.
JUANA COMPLEX I HOMEOWNERS ASSOCIATION, ET. AL., Petitioner

vs. FIL-ESTATE LAND INC., ET. AL., Respondent
G.R. NO. 152272, MARCH 5, 2012
FACTS:
Juana Complex I together with its individual residents and other neighboring
subdivisions instituted a complaint for damages as a class suit representing the
regular commuters and motorists of Juana Complex I (Juana) and neighboring
subdivisions who were deprived of the use of La Paz Road (Road) , against Fil-Estate
(Fil-Estate). The complaint alleged that Juana et.al. were regular commuters and
motorists who constantly travelled Road for more than ten years until Fil-Estate
excavated and permanently closed the Road.
Juana prayed for the immediate issuance of a Temporary Restraining Order (TRO) or
a writ of preliminary injunction (WPI) to enjoin Fil-Estate from stopping and
intimidating them in their use of the Roas. A TRO was issued ordering Fil-Estate for
20 days to stop preventing or harassing Juana from using the Road. The Regional
Trial Court (RTC) conducted several hearings to determine the propriety of the
issuance of WPI. Fil-Estate filed a Motion to Dismiss arguing that complaint failed to
state a cause of action and that it was improperly files as a class suit. RTC granted
WPI thus Fil-Estate filed a Motion for Reconsideration. RTC then issued Omnibus
Order denying both Motion to Dismiss and Motion for Reconsideration file by Fil-
Estate. Not satisfied, Fil-Estate filed a petition foe certiorari and prohibit before the
Court of Appeals (CA) to annul the Order and Omnibus Order issued by RTC
contending that Juana failed to state a cause of action, improperly filed class suit and
failed to show that Juana had a clear and unmistakable right to the use of the Road
since Road was a Torrens registered private road and there was neither a voluntary
nor legal easement constituted over it. CA partially granted petition on the merit of
the last contention. Hence, this petition for review.
ISSUES:
a. Whether or not the complaint states a cause of action;
b. Whether the complaint has been properly filed as a class suit;
c. Whether or not a WPI is warranted.
HELD:
a. Yes, the complaint states a cause of action. Whether the complaint states a cause
of action is determined by its averments regarding the acts committed by the
defendant. Thus, contains a concise statement of the ultimate or essential facts
constituting plaintiffs cause of action. First, Juanas averments show a demandable
right over Road. Second, there is an alleged violation of such right by Fil-Estate
when they excavated and prevented Juana from using it. Third, Juana consequently
suffered injury.
b. Yes, the complaint has been properly filed as a class suit. The necessary elements
of a class suit are present in this case namely: common interest, numerous parties
affected and sufficient number of parties bringing the class suit. The suit is clearly
one that benefits all commuters and motorists who use the Road.
c. No, the WPI is not warranted. A WPI under Sec. 3, Rule 58 is available to prevent
a threatened or continuous irremediable injury to parties before their claims can be
thoroughly studied and adjudicated. The requisites for its issuance are (1) existence
of clear and unmistakable right that must be protected and (2) an urgent and
paramount necessity for the writ to prevent serious damage. Juana failed to establish
a prima facie proof of violation of their right to justify issuance of WPI. Their right to
use the Road is disputable since Juana has no clear legal right therein. Juana merely
anchor their purported right over the Road on the bare allegation that they use the
Road for more than ten yeas. A mere allegation does not meet the standard of proof
that would warrant issuance of WPI.

Misamis Occidental II Cooperatives, Inc. Vs Virgilio S. David G.R. No. 129928
August 25,2005
FACTS:
Private respondent Virgilio S. David, a supplier of electrical hardware, filed a case for
specific performance and damages against MOELCI II, a rural electric cooperative in
Misamis Occidental. The case was essentially a collection suit, predicated on a
document attached as Annex A to the Amended Complaint that according to David is
the contract pursuant to which he sold to MOELCI II one unit of 10 MVA
Transformer.
MOELCI II filed its Answer to Amended Complaint, affirmative defenses which

constitutes grounds for dismissal. These grounds were lack of cause of action, there
being allegedly no enforceable contract between the parties under the Statute of
Frauds and improper venue. MOELCI II in essence argued that the document
attached as Annex A was only a quotation letter and not a contract as alleged by
David. Thus, it contends that David`s Amended Complaint is dismissable for failure
to state a cause of action.
David contended in the main that because a motion to dismiss on the ground of
failure to state a cause of action is required to be based only on the allegations of the
complaint, the quotation letter, being merely an attachment to the complaint and
not part of its allegations, cannot be inquired into.
MOELCI II filed a rejoinder to the opposition in which it asserted that a complaint

cannot be separated from its annexes; hence the trial court in resolving a motion to
dismiss on the ground of failure to state a cause of action must consider the
complaint`s annexes.
The RTC, issued an order denying MOELCI II`s motion for preliminary hearing of
affirmative defenses. The Court of Appeals dismissed MOELCI II`s petition holding
that the allegations in David`s complaint constitutes a cause of action.
Petitioner is now before the Supreme Court seeking a review of the appelate court`s
pronouncements, MOELCI II asserts that the Court of Appeals committed serious
error in: 1) ruling that the resolution of its motion to dismiss on the ground for lack
of cause of action necessitated hearing by the trial court with the end in view of
determining whether or not the document attached as Annex A to the Amended
Complaint is a contract as alleged in the body of the pleading; and 2) not ordering
the trial court to dismiss the amended complaint on the lack of cause of action.
ISSUE:
Whether the Court of Appeals erred in dismissing the petition for certiorari and in
holding that the trial court did not commit grave abuse of discretion in denying
petitioner`s Motion.
HELD:
There is no error in the ruling of the Court of Appeals.
Under the old Rules of Court a preliminary hearing permitted under Section 5, Rule
16, is not a mandatory even when the same is prayed for. It rests largely on the
sound dicretion of the court. Such interpretation is now specifically expressed in the
1997 Rules of Civil Procedure. Section 6, Rule 16 provides that a grant of
preliminary hearing rests on the sound discretion of the court.
Moreover, as MOELCI II`s Motion is anchored on the ground that the Complaint
allegedly stated no cause of action, a preliminary hearing thereon is more than
unnecessary as it constitutes an erroneous and improvident move. No error therefore
could be ascribed to the trial court in the denial of such Motion.
To determine the existence of a cause of action, ony the statements in the complaint
may be properly considered. It is error for the court to take cognizance of external
facts of hold preliminary hearing to determine their existence. If the allegations in a
complaint furnish sufficient basis by which the complaint can be maintained, the
same should not be dismissed regardless of the defenses that may be averred by the
defendants.
The test of sufficiency of facts alleged in the complaint as constituting a cause of

action is whether or not admitting the facts alleged, the court could render a valid
verdict in accordance with the prayer of said complaint.
It has been hypothetically admitted that the parties had entered into a contract sale,
David bound himself to supply petitioner 1 unit of MVA Power transformer plus 69
KV Line Accessories; that despite written and verbal demands, petitioner has failed
to pay the price thereof.
Contrary to MOELCI II`s assertion, Annex A is not an undisguied quotation letter.

While Annex A is captioned as such, the presence of the signatures of both the
General Manager and the Chairman of the Committee of Management immediately
below the word CONFORME appearing on the document`s last page lends
credulity to David`s contention that there was, or might have been, a meeting of
minds on the terms embodied therein. Thus, the appendage of Annex A does not
entirely serve to snuff out David`s claim.
Finally, we do not agree with MOELCI II`s contention that the Court of Appeals
sanctioned the trial court`s deferment of the resolution of MOELCI II`s Motion. The
trial court squarely denied the Motion and not merely deferred its resolution. Thus,
there is no deferment to speak of that should be enjoined.

PNB vs GATEWAY PROPERTY HOLDINGS, INC.
GR NO. 181485; FEBRUARY 15, 2012
FACTS:
Respondent GPHI was a subsidiary company of Gateway Electronics Company (GEC).

GEC obtained long term loans from the Land Bank of the Philippines (LBP) in the
amount of P600 million and the loans were secured by mortgages executed by GEC
over its properties. LBP invited other banks to lend money to GEC. It is alleged that
LBP agreed to submit the mortgaged properties to it by GEC as part of the latters
assets that will be covered by a Mortgage Trust Indenture (MTI), ensuring that all
participating banks in the loan syndicate will have equal security position. LBP and a
consortium of banks entered into a Memorandum of Understanding (MOU), whereby
LBP agreed to release the mortgaged properties to the consortium of banks on the
basis of an MTI. The participating banks released funds in favor of GEC. Petitioner
PNB became part of this consortium of creditor banks.
GEC then requested PNB to convert its long-term loans into a Convertible Omnibus
Credit Line due to its difficulty in paying its obligation. PNB approved such a
conversion subject to certain conditions- GPHI was made a co-borrower in the
agreement and was obligated to execute in favor of PNB a real estate mortgage over
two parcels of land. GEC filed a complaint for specific performance against LBP due
to the latters refusal to share the mortgaged properties with the consortium of
creditor banks.
PNB demanded payment from GEC and when the latter discovered the formers
intent to foreclose the REM, it prayed that a (TRO) be issued to enjoin PNB from
foreclosing on the properties of GPHI and judgment be issued declaring that the real
estate mortgage involving the properties of GPHI and executed in favor of PNB is
null and void. GPHI contended that the understanding between GEC and PNB is that
the GPHI properties would stand merely as a temporary security pending the
outcome of case filed by GEC against LBP.

Since no TRO was issued by the Court, PNB was able to foreclosed the mortgaged
properties.
Thereafter, GPHI filed a Petition for Annulment of Foreclosure of Mortgage. GPHI
argued that, in conducting the foreclosure proceedings, the sheriff failed to observe
the requirement of Section 4 of Act No. 3135 that the sale shall be made at public
auction.
Contention of PNB:
There was another action pending between the same parties for the same cause of
action. PNB argued that GPHI resorted to a splitting of a cause of action by first
filing a complaint for the annulment of the contract of real estate mortgage and then
filing a petition for the annulment of the subsequent foreclosure of the mortgage.
PNB further alleged that the subsequent petition of GPHI failed to state a cause of
action.
RTC dismissed the case and ruled that both the civil cases involved the same parties,
substantially identical causes of action and reliefs prayed for, the reliefs being
founded on the same facts. Where a single cause of action has been split and
pursuant to Rule 16, Section 1(e) of the 1997 Rules on Civil Procedure, the Motion to
Dismiss filed by PNB, on the ground that there is another action pending between
the same parties for the same cause, or litis pendentia is proper.
On appeal, the CA set aside the decision of the RTC and ruled that the third requisite
of litis pendentia (the identity in the two cases should be such that the judgment that
may be rendered in one would, regardless of which party is successful, amount to res
adjudicata to the other) is not present
ISSUE:
Whether or not the requisites of litis pendentia exist to warrant the dismissal of Civil
Case for Annulment of the Foreclosure Sale
HELD: YES. All the requisites of litis pendentia exist.

There is litis pendentia if the following requisites are present: (a) identity of parties,
or at least such parties as represent the same interests in both actions; (b) identity of
rights asserted and relief prayed for, the relief being founded on the same facts; and
(c) the identity of the two preceding particulars is such that any judgment rendered
in the other action, will, regardless of which party is successful, amount to res
judicata in the action under consideration.
As to the first requisite, GPHI is the plaintiff in both civil cases while PNB is the party
against whom GPHI is asserting a claim.
As to the second requisite, allegations in Civil for Annulment of the Real Estate
Mortgage and Annulment of the Foreclosure Sale reveal that the said cases invoke
the same fundamental issue which is the temporary nature of the security that was to
be provided by the mortgaged properties of GPHI.
As to the third requisite, While the appeal of the dismissal of Annulment of the
Foreclosure Sale was still pending with the Court of Appeals, GPHI filed on a Motion
for Leave to Amend Complaint to Conform to the Evidence in Civil Case Annulment
of the Real Estate Mortgage. GPHI stated therein that after the parties presented
their evidence, the fact of foreclosure and the acquisition of the mortgaged
properties by PNB were duly established. In the accompanying Amended Complaint
in Annulment of the Real Estate Mortgage, GPHI prayed, for the declaration of the
nullity of the foreclosure and auction sale of the mortgaged properties. As a
consequence of such an action, the two cases that GPHI filed before the court a quo
henceforth contained an identity of rights asserted and reliefs prayed for, the relief
being founded on the same factual allegations.
JOVITO R. SALONGA vs. WARNER, BARNES AND CO., LTD G.R. No. L-2246,
January 31, 1951
FACTS:
Westchester Fire Insurance Company of New York entered into a contract with Tina
J. Gamboa whereby said company insured one case of rayon yardage which said Tina
J. Gamboa shipped from San Francisco, California to Manila, Philippines and
consigned to Jovito Salonga, plaintiff herein. According to the contract of insurance,
the insurance company undertook to pay to the sender or her consignee the damages
that may be caused to the goods shipped subject to the condition that the liability of
the company will be limited to the actual loss which the insured may suffer not to the
exceed the sum of P2,000. The ship arrived in Manila, and the shipment was later on
examined by C. B. Nelson and Co., marine surveyors, at the request of the plaintiff,
and in their examination the surveyors found a shortage in the shipment in the
amount of P1,723,12.
Plaintiff filed a claim for damages in the amount of P1,723.12 against the American
President Lines, agents of the ship, demanding settlement, and when no action was
taken on this claim, plaintiff demanded payment thereof from Warner, Barnes and
Co., Ltd., as agent of the insurance company in the Philippines, and this agent having
refused to pay the claim, plaintiff instituted the present action.
After trial, at which both parties presented their respective evidence, the court
rendered judgment against Jovito Salonga. The motion for reconsideration filed by
the defendant having been denied, the case was appealed to this court.
ISSUE:
WON the trial court erred in holding that defendant, as agent of Westchester Fire
Insurance Company of New York, United States of America, is responsible upon the
insurance claim subject to the suit.
HELD: YES.
1. Defendant has no contractual relation with either plaintiff or his consignor
It is a well known rule that a contractual obligation or liability, or an action ex-

contractu, must be founded upon a contract, oral or written, either express or
implied. This is axiomatic. If there is no contract, there is no corresponding liability,
and no cause of action may arise therefrom. This is what is provided for in article
1257 of the Civil Code. This article provides that contracts are binding upon the
parties who make them and their heirs, excepting, with respect to the latter, where
the rights and obligations are not transmissible, and when the contract contains a
stipulation in favor of a third person, he may demand its fulfillment if he gives notice
of his acceptance before it is revoked.
Warner, Barnes and Co., as principal or agent, did not make any contract, either oral
or written, with the plaintiff. The contracts were made between the respective
insurance companies and the insured, and were made by the insurance companies,
through Warner, Barnes and Co., as their agent.
The defendant has not taken part, directly or indirectly, in the contract in question.
The evidence shows that the defendant did not enter into any contract either with
the plaintiff or his consignor Tina J. Gamboa. The contract of marine insurance
was made and executed only by and between the Westchester Fire Insurance
Company of New York and Tina J. Gamboa. The contract was entered in New York.
There is nothing therein which may affect, in favor or adversely, the defendant, the
fulfillment of which may be demanded by or against it. That contract is purely
bilateral, binding only upon Gamboa and the insurance company. When the lower
court, therefore, imposed upon the defendant an obligation which it has never
assumed, either expressly or impliedly, or when it extended to the defendant the
effects of a contract which was entered into exclusively by and between the
Westchester Fire Insurance Company of New York and Tina J. Gamboa, the error it
has committed is evident. This is contrary to law.

2. Defendant is not a real party in interest in this case.
NO. Section 2, Rule 3 of the Rules of Court requires that "every action must be
prosecuted in the name of the real party in interest." In the case at bar, the
defendant issued upon in its capacity as agent of Westchester Fire Insurance
Company of New York in spite of the fact that the insurance contract has not been
signed by it. As aforementioned, the defendant did not assume any obligation
thereunder either as agent or as a principal. It cannot, therefore, be made liable
under said contract, and hence it can be said that this case was filed against one who
is not the real party in interest.
The court further held that the action should have been filed against its principal, the
Westchester Fire Insurance Company of New York.
3. Defendant is a settlement and adjustment agent of the foreign insurance company

(agency).
As such agent it has the authority to settle all the losses and claims that may arise
under the policies that may be issued by or in behalf of said company in accordance
with the instructions it may receive from time to time from its principal.
An adjustment and settlement agent is no different from any other agent from the
point of view of his responsibility, for he also acts in a representative capacity.
Whenever he adjusts or settles a claim, he does it in behalf of his principal, and his
action is binding not upon himself but upon his principal, and the scope and extent of
the functions of an adjustment and settlement agent do not include personal liability.
His functions are merely to settle and adjust claims in behalf of his principal if those
claims are proven and undisputed, and if the claim is disputed or is disapproved by
the principal, like in the instant case, the agent does not assume any personal
liability. The recourse of the insured is to press his claim against the principal.
An insurance adjuster is ordinarily a special agent for the person or company for
whom he acts, and his authority is prima facie coextensive with the business
intrusted to him. . .
An adjuster does not discharge functions of a quasi-judicial nature, but represents

his employer, to whom he owes faithful service, and for his acts, in the employer's
interest, the employer is responsible so long as the acts are done while the agent is
acting within the scope of his employment. (45 C. J. S., 1338-1340.)
4. A judgment for or against an agent in no way binds the real party in interest.
If the party sued upon is not the proper party, any decision that may be rendered
against him would be futile, for it cannot be enforced or executed. The effort that
may be employed will be wasted. Such would be the result of this case if it will be
allowed to proceed against the defendant, for even if a favorable judgment is
obtained against it, it cannot be enforced because the real party is not involved. The
defendant cannot be made to pay for something it is not responsible.
The court stated that the correct remedy would be for the Plaintiff to bring the
principal into this case or make it come under the courts in this jurisdiction in
accordance with the procedure indicated in section 14, Rule 7, of the Rules of Court
concerning litigations involving foreign corporations. This rule says that if the
defendant is a foreign corporation and it has not designated an agent in the
Philippines on whom service may be made in case of litigation, such service may be
made on any agent it may have in the Philippines.
The Westchester Fire Insurance Company of new York comes within the import of
this rule for even if it has not designated an agent as required by law, it has however
a settling agent who may serve the purpose. In other words, an action may be
brought against said insurance company in the Philippines and the process may be
served on the defendant to give our courts the necessary jurisdiction.
HON. CARLOS O. FORTICH, et. al v. HON. RENATO C. CORONA

G.R. No. 131457. April 24, 1998
FACTS:
This case involves a 144-hectare land located at San Vicente, Sumilao, Bukidnon,
owned by the Norberto Quisumbing, Sr. Management and Development Corporation,
one of the petitioners. The property is covered by TCT No. 14371 of the Registry of
Deeds of the Province of Bukidnon. Said land was leased as a pineapple plantation to
the Philippine Packing Corporation, now Del Monte Philippines, Inc. for a period of
10 years under the Crop Producer and Growers Agreement duly annotated in the
certificate of title. The lease expired in April, 1994.
However, during the existence of the lease, DAR placed the entire 144-hectare
property under compulsory acquisition and assessed the land value at P2.38 million.
NQSRMDC resisted the DARs action. A writ of prohibition with preliminary

injunction was granted by the DAR Adjudication Board, ordering the DAR Region X
Director, the Provincial Agrarian Reform Officer, the Municipal Agrarian Reform
Office of Sumilao, Bukidnon, the Land Bank of the Philippines, and their authorized
representatives to desist from pursuing any activity or activities concerning the
subject land until further orders.
Despite the order, DAR Regional Director issued a memorandum directing the Land
Bank to open a trust account for P2.38 million in the name of NQSRMDC and to
conduct summary proceedings to determine the just compensation of the subject
property. NQSRMDC objected to these moves and filed an Omnibus Motion to
enforce the DARAB order and to nullify the summary proceedings undertaken by the
DAR Regional Director and Land Bank on the valuation of the subject property.
DARAB acted favorably on the Omnibus Motion by a ordering the DAR Regional
Director and Land Bank to seriously comply with the terms of the order; nullifying
the DAR Regional Directors memorandum and the summary proceedings conducted
pursuant thereto; and directing the Land Bank to return the claim folder of Petitioner
NQSRMDCs subject property to the DAR until further orders. Land Bank complied
with the DARAB order.
In the meantime, the Provincial Development Council of Bukidnon, headed by

Governor Carlos O. Fortich, passed Resolution No. 6, designating certain areas along
Bukidnon-Sayre Highway as part of the Bukidnon Agro-Industrial Zones where the
subject property is situated.
Pursuant to Section 20 of R.A. No. 7160 (LGC), the Sangguniang Bayan of Sumilao,
Bukidnon, enacted Ordinance No. 24 converting or re-classifying 144 hectares of
land in Brgy. San Vicente, said Municipality, from agricultural to
industrial/institutional with a view of providing an opportunity to attract investors
who can inject new economic vitality, provide more jobs and raise the income of its
people.
Bukidnon Provincial Board expressed its support for the proposed project on the
basis of a Joint Committee Report submitted by its Committee on Laws, Committee
on Agrarian Reform and Socio-Economic Committee.
The NQSRMDC Proposal was adopted by the DTI, Bukidnon Provincial Office, as one
of its flagship projects. The same was likewise favorably recommended by the
Provincial Development Council of Bukidnon; the municipal, provincial and regional
office of the DAR; the Regional Office of the DENR; the Executive Director, signing
By Authority of PAUL G. DOMINGUEZ, Office of the President Mindanao; the
Secretary of DILG; and Undersecretary of DECS Wilfredo D. Clemente.
In the same vein, the National Irrigation Administration Bukidnon and Kisolon-San
Vicente Irrigators Multi-Purpose Cooperative interposed NO OBJECTION to the
proposed conversion as long as the development cost of the irrigation systems
thereat which is P2,377.00 per hectare be replenished by the developer and also it
will provide more economic benefits to the community in terms of outside
investments that will come and employment opportunities that will be generated by
the projects to be put up.
Notwithstanding the foregoing favorable recommendation, however, DAR Secretary

Garilao issued an Order denying the instant application for the conversion of the
subject land from agricultural to agro-industrial and, instead, placed the same under
the compulsory coverage of CARP and directed the distribution thereof to all
qualified beneficiaries.
A Motion for Reconsideration of the aforesaid Order was filed but was denied.
Thus, the DAR Secretary ordered the DAR Regional Director to proceed with the
compulsory acquisition and distribution of the property. Governor Fortich appealed
he order of denial to the Office of the President and prayed for the
conversion/reclassification of the subject land as the same would be more beneficial
to the people of Bukidnon.
To prevent the enforcement of the DAR Secretarys order, NQSRMDC filed with the
Court of Appeals a petition for certiorari, prohibition with preliminary injunction. CA
issued a Resolution, ordering the parties to observe status quo pending resolution of
the petition.
In resolving the appeal, the Office of the President, through then Executive
Secretary Ruben D. Torres, issued a Decision, reversing the DAR Secretarys
decision.
DAR filed a motion for reconsideration of the OP decision, however, it was denied for
having been filed beyond the reglementary period of 15 days. The said order further
declared that the OP decision had already become final and executory.
Subsequently, some alleged farmer-beneficiaries staged a strike in front of the DAR
compound in Quezon City on October 9, 1997, protesting the Decision of the Office of
the President, issued through then Executive Secretary Ruben D. Torres, which
approved the conversion of a 144-hectare land from agricultural to agro-
industrial/institutional area.
This led the Office of the President, through then Deputy Executive Secretary Renato
C. Corona, to issue the so-called Win-Win Resolution on November 7, 1997,
substantially modifying its earlier Decision after it had already become final and
executory. The said Resolution modified the approval of the land conversion to agro-
industrial area only to the extent of 44 hectares, and ordered the remaining 100
hectares to be distributed to qualified farmer-beneficiaries.
Strikers urged the Court to annul and set aside the Win-Win Resolution and to enjoin
respondent Secretary Ernesto D. Garilao of the DAR from implementing the said
Resolution.
Gov. Fortich et. al. filed the present petition for certiorari, prohibition under Rule 65
and injunction with urgent prayer for a temporary restraining order and/or writ of
preliminary injunction under Rule 58 against then Deputy Executive Secretary
Renato C. Corona and DAR Secretary Ernesto D. Garilao.
A Motion For Leave To Intervene was filed by alleged farmer-beneficiaries claiming

that they are real parties in interest as they were previously identified by respondent
DAR as agrarian reform beneficiaries on the 144-hectare property subject of this
case. The motion was opposed by the petitioners.
In seeking the nullification of the Win-Win Resolution, the petitioners claim that the
Office of the President was prompted to issue the said resolution after a very well-
managed hunger strike led by fake farmer-beneficiary Linda Ligmon succeeded in
pressuring and/or politically blackmailing the Office of the President to come up with
this purely political decision to appease the farmers, by reviving and modifying the
Decision of 29 March 1996 which has been declared final and executory in an Order.
Thus, petitioners further allege, respondent then Deputy Executive Secretary Renato
C. Corona committed grave abuse of discretion and acted beyond his jurisdiction
when he issued the questioned Resolution of 7.
ISSUE:
I. Whether or not an error of jurisdiction not an error of judgment which is
reviewable by an appeal under Rule 43.
II. Whether or not the petitioners committed a forum-shopping.
HELD:
I. NO. It is true that under Rule 43, appeals from awards, judgments, final orders or
resolutions of any quasi-judicial agency exercising quasi-judicial functions, including
the Office of the President, may be taken to the Court of Appeals by filing a verified
petition for review within 15 days from notice of the said judgment, final order or
resolution, whether the appeal involves questions of fact, of law, or mixed questions
of fact and law.
However, the remedy prescribed in Rule 43 is inapplicable considering that the
present petition contains an allegation that the challenged resolution is patently
illegaland was issued with grave abuse of discretion and beyond his jurisdiction=
when said resolution substantially modified the earlier OP Decision which had long
become final and executory.
Thus, the appropriate remedy to annul and set aside the assailed resolution is an
original special civil action for certiorari under Rule 65, as what the petitioners have
correctly done. The office of a writ of certiorari is restricted to truly extraordinary
cases cases in which the act of the lower court or quasi-judicial body is wholly void.
Section 1 of Rule 65 mandates that the person aggrieved by the assailed illegal act
may file a verified petition for certiorari in the proper court. The proper court where
the petition must be filed is stated in Section 4 of Rule 65 provides that the Supreme
Court, Court of Appeals and Regional Trial Court have original concurrent
jurisdiction to issue a writ of certiorari, prohibitionand mandamus. But the
jurisdiction of these three courts are also delineated in that, if the challenged act
relates to acts or omissions of a lower court or of a corporation, board, officer or
person, the petition must be filed with the Regional Trial Court which exercises
jurisdiction over the territorial area as defined by the Supreme Court. And if it
involves the act or omission of a quasi-judicial agency, the petition shall be filed only
with the Court of Appeals, unless otherwise provided by law or the Rules of Court.
But the Supreme Court has the full discretionary power to take cognizance of the
petition filed directly to it if compelling reasons, or the nature and importance of the
issues raised, warrant.
II. NO. There is forum-shopping whenever, as a result of an adverse opinion in one

forum, a party seeks a favorable opinion (other than by appeal or certiorari) in
another. The principle applies not only with respect to suits filed in the courts but
also in connection with litigation commenced in the courts while an administrative
proceeding is pending, as in this case, in order to defeat administrative processes
and in anticipation of an unfavorable administrative ruling and a favorable court
ruling. This specially so, as in this case, where the court in which the second suit was
brought, has no jurisdiction
It is clear from the above-quoted rule that the petitioners are not guilty of forum
shopping. The test for determining whether a party has violated the rule against
forum shopping is where a final judgment in one case will amount to res adjudicata
in the action under consideration. A cursory examination of the cases filed by the
petitioners does not show that the said cases are similar with each other. The
petition for certiorari in the Court of Appeals sought the nullification of the DAR
Secretarys order to proceed with the compulsory acquisition and distribution of the
subject property.
Samaniego, et al. v. Aguila, et al., GR No. 125567, June 27, 2000.
FACTS:
Petitioners are tenants in a landholding owned by respondents mother with an

aggregate area of 10.4496 hectares in Patul, Santiago, Isabela. The subject land was
identified by the DAR-Region 2 as covered by the Operation Land Transfer Program
of the government. After sometime, respondents mother on their behalf filed a
petition for exemption from the coverage of PD 27 (Land Reform Program). Thus,
petitioners opposed the application for respondents mother transferred the title of
the lands to respondents in violation of the rules and regulations of the DAR.
The Regional Director granted the application for exemption. The decision was
affirmed on appeal to the DAR, which was reversed by the same on motion of the
petitioners. Thus, DAR denied the application for exemption and declared petitioners
as rightful farmer-beneficiaries of the land. Respondents appealed to the Office of the
President which set aside the decision of the DAR and reinstated DARs prior
decision.
On appeal in the CA, the petition was dismissed for failure to implead the Office of
the President (OP) as an indispensable party (as the one whose decision and
resolution is being questioned). Joinder of indispensable parties is mandatory. Failure
to implead the OP was fatal and the petition must be dismissed.
ISSUE:
WON the OP was an indispensable party and had to be impleaded.
HELD: NO
At the time the petitioners brought the case to the CA, the rule on appeals to the said
court from quasi-judicial agencies was that, petition for review shall (a) state the
full names of the parties, without impleading the court or agencies either as
petitioners or respondents.
Also, the CA was not an indispensable party or a party in interest without whom no
final determination can be had of an action without being impleaded. Indispensable
parties are those with such an interest in the matter that a final decree would
necessarily affect their rights and the court cannot proceed without their presence.
The word interest in this rule should be material, directly in issue and to be
affected by the decree, as distinguished from a mere incidental interest in the
question involved, as opposed to a nominal or pro forma party who is joined as a
plaintiff or defendant, not because such party has any real interest in the subject
matter or because any relief is demanded, but merely because the technical rules of
pleadings require the presence of such party on the record. Thus, the OP not having
any interest in the case except to entertain appeals from the DAR, is not an
indispensable party. CA was ordered to decide on the matter.

Theodore and Nancy Ang, etc. v. Spouses Alan and Em Ang, G.R. No. 186993,
August 22, 2012
FACTS:
Spouses Alan and Em Ang, the respondents, obtained a loan worth $300,000 from
Theodore and Nancy Ang, the petitioners. When the loan became demandable,
respondent spouses executed a Promissory Note promising to pay the loan and 10%
annual interest on demand. Petitioners made several demands but respondents failed
to pay, their obligation amounting to $719, 627.21 inclusive of the 10% interest.
Theodore and Nancy Ang, the petitioners, were residing in Los Angeles, California.
They executed a Special Power of Attorney in favor of one Atty. Eldrige Marvin
Aceron in order for him to file an action against the respondent spouses. Atty. Aceron
filed a complaint for the collection of a sum of money with the RTC of Quezon City,
his residence. The respondent spouses moved to dismiss, on the ground of improper
venue. They contend that the complaint against them may be filed in the where
either the petitioners or respondents reside. Respondent spouses reside in Bacolod
City. The RTC denied the motion to dismiss, ruling that Atty. Aceron as the attorney-
in-fact may use his residence as basis for the venue of the action. Respondents filed a
petition for certiorari with the CA based on their earlier ground and on the ground
that Atty. Aceron, a mere attorney-in-fact, is not the real party in interest; that his
residence should not be considered in determining the proper venue for the
complaint. The CA reversed the RTC and dismissed the complaint filed by the
petitioners. The CA held that the complaint should have been filed in Bacolod City
instead. Petitioners moved to reconsider but were denied by the CA
ISSUE/S:
Did the CA commit an error of law when it ruled that the complaint must be
dismissed on the ground of improper venue?
HELD:
No, the CA did not commit an error of law. Petition denied.
While the fixing of the venue in personal actions may be done for the convenience of
the plaintiffs and their witnesses, the choice is not left to the caprice of the plaintiff.
The Rules of court still regulate the fixing of the venue for filing a personal action.
The collection of a sum of money is a personal action in order to enforce a contract.

The Rules of Court give the plaintiff the choice where to file the action; whether in
the place where the plaintiff resides or in the place where the defendant resides.
However, the plaintiffs in this case do not reside in the Philippines. Philippine Courts
do not have jurisdiction over persons residing abroad. Hence, the only choice left for
venue was the residence of the defendant.
Atty. Aceron, the attorney-in-fact of the petitioners is not a real party in interest for
the court to consider his residence as a basis for setting the venue. He is only a
representative of the petitioners, and under Rule 3, sec. 3 of the Rules of Court the
beneficiary shall be included in the title of the case and shall be deemed to be the
real party in interest. Atty. Aceron did not subrogate petitioners as real parties in
interest, he merely represents them. The real party in interest still remains Theodore
Ang and Nancy Ang; Atty. Aceron cannot replace their residence with that of his own
for purposes of setting the venue. The rules of venue are designed to facilitate the
just and orderly administration of justice. This objective will be frustrated if the
plaintiffs are given unbridled freedom to choose the venue, as they may have ulterior
motives for filing the complaint in a specific court of their choosing.
PETITION DENIED. CA DECISION AFFIRMED.
SIMNY G. GUY, GERALDINE G. GUY, GLADYS G. YAO, and the HEIRS OF THE LATE GRACE
G. CHEU,Petitioners,
vs.
GILBERT G. GUY, Respondent.
FACTS:
With 519,997 shares of stock as reflected in Stock Certificate Nos. 004-014, herein respondent Gilbert G.
Guy (Gilbert) practically owned almost 80 percent of the 650,000 subscribed capital stock of GoodGold
Realty & Development Corporation (GoodGold).
GoodGolds remaining shares were divided among Francisco Guy (Francisco) with 130,000 shares, Simny
Guy (Simny), Benjamin Lim and Paulino Delfin Pe, with one share each, respectively. Gilbert is the son of
spouses Francisco and Simny. Simny, one of the petitioners, however, alleged that it was she and her
husband who established GoodGold, putting the bulk of its shares under Gilberts name.
Simny claimed that with their eldest son, Gaspar G. Guy (Gaspar), having entered the Focolare Missionary
in 1970s, renouncing worldly possessions,2 she and Francisco put the future of the Guy group of companies
in Gilberts hands. Simny further claimed that upon the advice of their lawyers, upon the incorporation of
GoodGold, they issued stock certificates reflecting the shares held by each stockholder duly signed by
Francisco as President and Atty. Emmanuel Paras as Corporate Secretary, with corresponding blank
endorsements at the back of each certificate including Stock Certificate Nos. 004-014 under Gilberts
name.
These certificates were all with Gilberts irrevocable endorsement and power of attorney to have these
stocks transferred in the books of corporation. All of these certificates were always in the undisturbed
possession of the spouses Francisco and Simny, including Stock Certificate Nos. 004-014.
In 1999, Francisco instructed Benjamin Lim, to collaborate with Atty. Emmanuel Paras, to redistribute
GoodGolds shareholdings evenly among his children, while maintaining a proportionate share for himself
and his wife, Simny. Accordingly, some of GoodGolds certificates were cancelled and new ones were
issued to represent the redistribution of GoodGolds shares of stock. The new certificates of stock were
signed by Francisco and Atty. Emmanuel Paras, as President and Corporate Secretary, respectively.
The shares of stock were distributed among the following stockholders:
NAME NO. OF SHARES

Francisco Guy [husband] 195,000

Simny G. Guy [wife] 195,000
Gilbert G. Guy [son] 65,000
Geraldine G. Guy [daughter] 65,000
Grace G.Cheu (or her heirs) [daughter] 65,000
Gladys G.Yao [daughter] 65,000
Total 650,0007
In September 2004, or five years after the redistribution of GoodGolds shares of stock, Gilbert filed with
the Regional Trial Court (RTC) of Manila, a Complaint for the "Declaration of Nullity of Transfers of Shares
in GoodGold and of General Information Sheets and Minutes of Meeting, and for Damages with Application
for a Preliminary Injunctive Relief," against petitioners, alleging, among others, that no stock certificate ever
existed; that his signature at the back of the spurious Stock Certificate Nos. 004-014 which purportedly
endorsed the same and that of the corporate secretary, Emmanuel Paras, at the obverse side of the certificates
were forged, and, hence, should be nullified.
Gilbert, however, withdrew the complaint, after the National Bureau of Investigation (NBI) submitted a
report to the RTC of Manila authenticating Gilberts signature in the endorsed certificates.
The present controversy arose, when in 2008, three years after the complaint with the RTC of Manila was
withdrawn, Gilbert again filed a complaint, this time, with the RTC of Mandaluyong, captioned as "Intra-
Corporate Controversy: For the Declaration of Nullity of Fraudulent Transfers of Shares of Stock
Certificates, Fabricated Stock Certificates, Falsified General Information Sheets, Minutes of Meetings, and
Damages with Application for the Issuance of a Writ of Preliminary and Mandatory Injunction," against
petitioners. Gilbert alleged that he never signed any document which would justify and support the transfer
of his shares to his siblings.
He also denied the existence of the certificates of stocks. According to him, "there were no certificates of
stocks under his name for the shares of stock subscribed by him were never issued nor delivered to him from
the time of the inception of the corporation.
Gilbert added that the Amended General Information Sheets (GIS) of GoodGold for the years 2000 to 2004
which his siblings submitted to the Securities and Exchange Commission (SEC) were spurious as these did
not reflect his true shares in the corporation which supposedly totaled to 595,000 shares; 16 that no valid
stockholders annual meeting for the year 2004 was held, hence proceedings taken thereon, including the
election of corporate officers were null and void;17 and, that his siblings are foreign citizens, thus, cannot
own more than forty percent of the authorized capital stock of the corporation.
Gilbert also asked in his complaint for the issuance of a Writ of Preliminary and Mandatory Injunction to
protect his rights. In an Order dated 30 June 2008, 20 the RTC denied Gilberts Motion for Injunctive
Relief21 which constrained him to file a motion for reconsideration, and, thereafter, a Motion for Inhibition
against Judge Edwin Sorongon, praying that the latter recuse himself from further taking part in the case.
Gilberts siblings filed a manifestation claiming that the complaint is a nuisance and harassment suit.
In an Order dated 6 November 2008,22 the RTC denied the motion for inhibition, as well as dismissed the
case, declaring it a nuisance and harassment suit. This constrained Gilbert to assail the above Order before
the Court of Appeals (CA).
In a Decision dated 27 May 2009, the CA upheld Judge Sorongons refusal to inhibit. The CA, in the same
decision, also denied Gilberts Petition for the Issuance of Writ of Preliminary Injunction for failure to
establish a clear and unmistakable right that was violated as required under Section 3, rule 58 of the 1997
Rules of Civil Procedure.
The CA, however, found merit on Gilberts contention that the complaint should be heard on the merits.
Hence, these consolidated petitions.
G.R. No. 189486 is a Petition for Review under Rule 45 of the Rules of Court filed by petitioners which
prays that this Court declare Civil Case No. SEC-MC08-112, a harassment or nuisance suit.
Meanwhile, during the pendency of G.R. No. 189486, the trial court set the pre-trial conference on the case
subject of this controversy, constraining the petitioners to file a Motion to defer the pre-trial, which was,
however, denied by the court a quo.
The denial of the petitioners motion to defer pre-trial, compelled them to file with this Court a Petition for
Certiorari with Urgent Application for the Issuance of TRO and/or A Writ of Preliminary Injunction,
docketed as G.R. No. 189699.
Because of the pendency of the G.R. No. 189486 before us, the petitioners deemed proper to question the
said denial before us as an incident arising from the main controversy.29
HELD:
The absence of an indispensable party in a case renders all subsequent actions of the court null and void for
want of authority to act, not only as to the absent parties but even as to those present.
It bears emphasis that this controversy started with Gilberts complaint filed with the RTC of Mandaluyong
City in his capacity as stockholder, director and Vice-President of GoodGold.34
Gilberts complaint essentially prayed for the return of his original 519,997 shares in GoodGold, by praying
that the court declare that "there were no valid transfers of the contested shares to defendants and
Francisco.
The transfer of the shares cannot be, as Gilbert wanted, declared entirely fraudulent without including those
of Francisco who owns almost a third of the total number.
Francisco, in both the 2004 and 2008 complaints, is an indispensable party without whom no final
determination can be had for the following reasons: (a) the complaint prays that the shares now under the
name of the defendants and Francisco be declared fraudulent; (b) Francisco owns 195,000 shares some of
which, Gilbert prays be returned to him; (c) Francisco signed the certificates of stocks evidencing the
alleged fraudulent shares previously in the name of Gilbert.
The inclusion of the shares of Francisco in the complaint makes Francisco an indispensable party. Moreover,
the pronouncement about the shares of Francisco would impact on the hereditary rights of the contesting
parties or on the conjugal properties of the spouses to the effect that Francisco, being husband of Simny and
father of the other contesting parties, must be included for, otherwise, in his absence, there cannot be a
determination between the parties already before the court which is effective, complete, or equitable.
It bears emphasis that Gilbert, while suing as a stockholder against his co-stockholders, should have also
impleaded GoodGold as defendant. His complaint also prayed for the annulment of the 2004 stockholders
annual meeting, the annulment of the 2004 election of the board of directors and of its officers, the
annulment of 2004 GIS submitted to the SEC, issuance of an order for the accounting of all monies and
rentals of GoodGold, and the issuance of a writ of preliminary and mandatory injunction. We have made
clear that GoodGold is a separate juridical entity distinct from its stockholders and from its directors and
officers. The trial court, acting as a special commercial court, cannot settle the issues with finality without

impleading GoodGold as defendant. Like Francisco, and for the same reasons, GoodGold is an
indispensable party which Gilbert should have impleaded as defendant in his complaint.
Allegations of deceit, machination, false pretenses, misrepresentation, and threats are largely conclusions of
law that, without supporting statements of the facts to which the allegations of fraud refer, do not sufficiently
state an effective cause of action.
"In all averments of fraud or mistake, the circumstances constituting fraud or mistake must be stated with
particularity"44 to "appraise the other party of what he is to be called on to answer, and so that it may be
determined whether the facts and circumstances alleged amount to fraud." 45 These particulars would
necessarily include the time, place and specific acts of fraud committed. 46 "The reason for this rule is that an
allegation of fraud concerns the morality of the defendants conduct and he is entitled to know fully the
ground on which the allegations are made, so he may have every opportunity to prepare his case to clear
himself at the trial."47
Tested against established standards, we find that the charges of fraud which Gilbert accuses his siblings are
not supported by the required factual allegations. In Reyes v. RTC of Makati, 49 which we now reiterate,
mutatis mutandis, while the complaint contained allegations of fraud purportedly committed by his siblings,
these allegations are not particular enough to bring the controversy within the special commercial courts
jurisdiction; they are not statements of ultimate facts, but are mere conclusions of law: how and why the
alleged transfer of shares can be characterized as "fraudulent" were not explained and elaborated on. 50 As
emphasized in Reyes:
Not every allegation of fraud done in a corporate setting or perpetrated by corporate officers will bring the
case within the special commercial courts jurisdiction. To fall within this jurisdiction, there must be
sufficient nexus showing that the corporations nature, structure, or powers were used to facilitate the
fraudulent device or scheme.51 (Emphasis supplied)
Significantly, no corporate power or office was alleged to have facilitated the transfer of Gilberts shares.
How the petitioners perpetrated the fraud, if ever they did, is an indispensable allegation which Gilbert must
have had alleged with particularity in his complaint, but which he failed to.
Failure to specifically allege the fraudulent acts in intra-corporate controversies is indicative of a

harassment or nuisance suit and may be dismissed motu proprio.
In ordinary cases, the failure to specifically allege the fraudulent acts does not constitute a ground for
dismissal since such a defect can be cured by a bill of particulars. Thus:
Failure to allege fraud or mistake with as much particularity as is desirable is not fatal if the general purport
of the claim or defense is clear, since all pleadings should be so construed as to do substantial justice. Doubt
as to the meaning of the pleading may be resolved by seeking a bill of particulars.
A bill of particulars may be ordered as to a defense of fraud or mistake if the circumstances constituting
fraud or mistake are not stated with the particularity required by the rule.
The above-stated rule, however, does not apply to intra-corporate controversies. It did not escape us that
Gilbert, instead of particularly describing the fraudulent acts that he complained of, just made a sweeping
denial of the existence of stock certificates by claiming that such were not necessary, GoodGold being a
mere family corporation. As sweeping and bereft of particulars is his claim that he "is unaware of any
document signed by him that would justify and support the transfer of his shares to herein petitioners." Even
more telling is the contradiction between the denial of the existence of stock certificates and the denial of the
transfer of his shares of stocks "under his name under the books of the corporations."

Even beyond the vacant pleadings, its nature as nuisance is palpable. To recapitulate, it was only after five
years following the redistribution of GoodGolds shares of stock, that Gilbert filed with the RTC of Manila a
complaint. Gilbert withdrew this complaint after the NBI submitted a report to the RTC of Manila
authenticating Gilberts signature in the endorsed certificates.
And, it was only after three years from the withdrawal of the Manila complaint, that Gilbert again filed in
2008 a complaint also for declaration of nullity of the transfer of the shares of stock, this time with the RTC
of Mandaluyong.
When a stock certificate is endorsed in blank by the owner thereof, it constitutes what is termed as "street
certificate," so that upon its face, the holder is entitled to demand its transfer his name from the issuing
corporation.
With Gilberts failure to allege specific acts of fraud in his complaint and his failure to rebut the NBI report,
this Court pronounces, as a consequence thereof, that the signatures appearing on the stock certificates,
including his blank endorsement thereon were authentic. With the stock certificates having been endorsed in
blank by Gilbert, which he himself delivered to his parents, the same can be cancelled and transferred in the
names of herein petitioners.
In Santamaria v. Hongkong and Shanghai Banking Corp., 61 this Court held that when a stock certificate is
endorsed in blank by the owner thereof, it constitutes what is termed as "street certificate," so that upon its
face, the holder is entitled to demand its transfer into his name from the issuing corporation. Such certificate
is deemed quasi-negotiable, and as such the transferee thereof is justified in believing that it belongs to the
holder and transferor.
While there is a contrary ruling, as an exception to the general rule enunciated above, what the Court held in
Neugene Marketing Inc., et al., v CA,62 where stock certificates endorsed in blank were stolen from the
possession of the beneficial owners thereof constraining this Court to declare the transfer void for lack of
delivery and want of value, the same cannot apply to Gilbert because the stock certificates which Gilbert
endorsed in blank were in the undisturbed possession of his parents who were the beneficial owners thereof
and who themselves as such owners caused the transfer in their names. Indeed, even if Gilberts parents
were not the beneficial owners, an endorsement in blank of the stock certificates coupled with its delivery,
entitles the holder thereof to demand the transfer of said stock certificates in his name from the issuing
corporation.

LIVING @ SENSE, INC. vs. MALAYAN INSURANCE COMPANY, INC.
G.R. No. 193753 September 26, 2012
FACTS:
Petitioner was the main contractor of the FOC Network Project of Globe Telecom in Mindanao. Petitioner
entered into a Sub-Contract Agreement (Agreement) with Dou Mac, Inc. (DMI), under which the latter was
tasked to undertake an underground open-trench work. Petitioner required DMI to give a bond, in the event
that DMI fails to perform its obligations under the Agreement.
Thus, DMI secured surety and performance bonds, both in the amount of P 5,171,488.00, from respondent
Malayan Insurance Company, Inc. (respondent) to answer: (1) for the unliquidated portion of the
downpayment, and (2) for the loss and damage that petitioner may suffer, respectively, should DMI fail to
perform its obligations under the Agreement. Under the bonds, respondent bound itself jointly and severally
liable with DMI.
The Department of Public Works and Highways (DPWH) issued a work-stoppage order against DMI after
finding the latters work unsatisfactory. DMI failed to adopt corrective measures, prompting petitioner to
terminate the Agreement and seek indemnification from respondent in the total amount of P 1,040,895.34.
However, respondent effectively denied petitioners claim on the ground that the liability of its principal,
DMI, should first be ascertained before its own liability as a surety attaches. Hence, the instant complaint,
premised on respondents liability under the surety and performance bonds secured by DMI.
Respondent claimed that DMI is an indispensable party that should be impleaded and whose liability should
first be determined before respondent can be held liable. On the other hand, petitioner asserted that
respondent is a surety who is directly and primarily liable to indemnify petitioner, and that the bond is
"callable on demand" in the event DMI fails to perform its obligations under the Agreement.
ISSUE:
Whether or not DMI is an indispensable party in this case.
HELD:
No. DMI is not an indispensable party because petitioner can claim indemnity directly from respondent,
having made itself jointly and severally liable with DMI for the obligation under the bonds. Therefore, the
failure to implead DMI is not a ground to dismiss the case, even if the same was without prejudice. The term
"jointly and severally" expresses a solidary obligation granting petitioner, as creditor, the right to proceed
against its debtors. The nature of the solidary obligation under the surety does not make one an
indispensable party. An indispensable party is a party-in-interest without whom no final determination can
be had of an action, and who shall be joined mandatorily either as plaintiffs or defendants. The presence of
indispensable parties is necessary to vest the court with jurisdiction, thus, without their presence to a suit or
proceeding, the judgment of a court cannot attain real finality. The absence of an indispensable party renders
all subsequent actions of the court null and void for want of authority to act, not only as to the absent parties
but even as to those present. When DMI secured the surety and performance bonds from respondent in
compliance with petitioners requirement, respondent bound itself "jointly and severally" with DMI for the
damages and actual loss that petitioner may suffer should DMI fail to perform its obligations.
PHILIP L. GO, PACIFICO Q. LIM and ANDREW Q. LIM Petitioners,

vs.
DISTINCTION PROPERTIES DEVELOPMENT AND CONSTRUCTION, INC.
Respondent.
G.R. No. 194024 April 25, 2012
FACTS:
Philip L. Go, Pacifico Q. Lim and Andrew Q. Lim (petitioners) are registered
individual owners of condominium units in Phoenix Heights Condominium Pasig City,
Metro Manila. Respondent Distinction Properties Development and Construction,
Inc. (DPDCI) is the real estate developer of Phoenix Heights Condominium, with
principal office at Binondo, Manila.
In February 1996, Pacifico Lim, one of the incorporators and the then president of
DPDCI, executed a Master Deed and Declaration of Restrictions (MDDR) of Phoenix
Heights Condominium, which was filed with the Registry of Deeds. As the developer,
DPDCI undertook, among others, the marketing aspect of the project, the sale of the
units and the release of flyers and brochures.
Thereafter, Phoenix Heights Condominium Corporation (PHCC) was formally

organized and incorporated. Sometime in 2000, DPDCI turned over to PHCC the
ownership and possession of the condominium units, except for the two saleable
commercial units/spaces:
1. G/F Level BAS covered by Condominium Certificate of Title (CCT) No. 21030
utilized as the PHCCs administration office, and
2. G/F Level 4-A covered by CCT No. PT-27396/C-136-II used as living quarters by the
building administrator.
Although used by PHCC, DPDCI was assessed association dues for these two units.
In March 1999, petitioner Lim filed an Application for Alteration of Plan pertaining to
the construction of 22 storage units in the spaces adjunct to the parking area of the
building, but was disapproved as such would obstruct light and ventilation.
In August 2004, through its Board, PHCC approved a settlement offer from DPDCI
for the set-off of the latters association dues arrears with the assignment of title
over CCT Nos. 21030 and PT-27396/C-136-II and their conversion into common
areas.
The said settlement likewise included the reversion of the 22 storage spaces into
common areas. With the conformity of PHCC, DPDCIs application for alteration
(conversion of unconstructed 22 storage units and units GF4-A and BAS from
saleable to common areas) was granted by the Housing and Land Use Regulatory
Board (HLURB).
In August 2008, petitioners, as condominium unit-owners, filed a complaint before

the HLURB against DPDCI for unsound business practices and violation of the
MDDR, alleging that the latter committed misrepresentation in their circulated flyers
and brochures as to the facilities or amenities that would be available in the
condominium and failed to perform its obligation to comply with the MDDR.
In defense, DPDCI denied that it had breached its promises and representations to
the public concerning the facilities in the condominium. It alleged that the brochure
attached to the complaint was "a mere preparatory draft" and not the official one
actually distributed to the public, and that the said brochure contained a disclaimer
as to the binding effect of the supposed offers therein. Also, DPDCI questioned the
petitioners personality to sue as the action was a derivative suit.
HLURB Ruling Favored the petitioners, holding as invalid the agreement entered
into between DPDCI and PHCC, as to the alteration or conversion of the subject units
into common areas, which it previously approved, for the reason that it was not
approved by the majority of the members of PHCC as required under Section 13 of
the MDDR. Further stating that DPDCIs defense, that the brochure was a mere
draft, was against human experience and a convenient excuse to avoid its obligation
to provide the facility of the project and that the case was not a derivative suit but
one which involved contracts of sale of the respective units between the
complainants and DPDCI, hence, within its jurisdiction pursuant to Section 1,
Presidential Decree (P.D.) No. 957 (The Subdivision and Condominium Buyers
Protective Decree), as amended.
Aggrieved, DPDCI filed with the CA its Petition for Certiorari and Prohibition on the
ground that the HLURB decision was a patent nullity constituting an act without or
beyond its jurisdiction and that it had no other plain, speedy and adequate remedy in
the course of law.
Court of Appeals Ruling Favored DPDCI, setting aside HLURBs decision (March
17, 2010) and holding that HLURB had no jurisdiction over the complaint filed by
petitioners as the controversy did not fall within the scope of the administrative
agencys authority under P.D. No. 957. The HLURB not only relied heavily on the
brochures which, according to the CA, did not set out an enforceable obligation on
the part of DPDCI, but also erroneously cited Section 13 of the MDDR to support its
finding of contractual violation.
The CA held that jurisdiction over PHCC, an indispensable party, was neither
acquired nor waived by estoppel. It held that, in any event, the action should be
dismissed because the absence of PHCC, an indispensable party, rendered all
subsequent actuations of the court void, for want of authority to act, not only as to
the absent parties but even as to those present.
Finally, the CA held that the rule on exhaustion of administrative remedies could be
relaxed. Appeal was not a speedy and adequate remedy as jurisdictional questions
were continuously raised but ignored by the HLURB. In the present case, however,
"[t]he bottom line is that the challenged decision is one that had been rendered in
excess of jurisdiction, if not with grave abuse of discretion amounting to lack or
excess of jurisdiction."
Petitioners filed a motion for reconsideration, which was denied by the CA. Hence
this petition.
ISSUES:
1. Whether or not the HLURB has jurisdiction over the complaint filed by the
petitioners.
2. Whether or not PHCC is an indispensable party.
3. Whether or not the rule on exhaustion of administrative remedies applies in this
case.
HELD:
1. NO. Jurisdiction over the subject matter of a case is conferred by law and
determined by the allegations in the complaint which comprise a concise statement
of the ultimate facts constituting the plaintiff's cause of action. The nature of an
action, as well as which court or body has jurisdiction over it, is determined based on
the allegations contained in the complaint of the plaintiff, irrespective of whether or
not the plaintiff is entitled to recover upon all or some of the claims asserted therein.
The averments in the complaint and the character of the relief sought are the ones to
be consulted. Once vested by the allegations in the complaint, jurisdiction also
remains vested irrespective of whether or not the plaintiff is entitled to recover upon
all or some of the claims asserted therein. Thus, it was ruled that the jurisdiction of
the HLURB to hear and decide cases is determined by the nature of the cause of
action, the subject matter or property involved and the parties.
To determine if HLURB has jurisdiction over petitioners cause of action, an

examination of the laws defining the HLURBs jurisdiction and authority becomes
imperative. P.D. No. 957, specifically Section 3, granted the National Housing
Authority (NHA) the "exclusive jurisdiction to regulate the real estate trade and
business." Then came P.D. No. 134421 expanding the jurisdiction of the NHA (now
HLURB), as follows:
SECTION 1. In the exercise of its functions to regulate the real estate trade and
business and in addition to its powers provided for in Presidential Decree No. 957,
the National Housing Authority shall have exclusive jurisdiction to hear and decide
cases of the following nature:
(a) Unsound real estate business practices;
(b) Claims involving refund and any other claims filed by subdivision lot or
condominium unit buyer against the project owner, developer, dealer, broker or
salesman; and
(c) Cases involving specific performance of contractual and statutory obligations filed
by buyers of subdivision lot or condominium unit against the owner, developer,
dealer, broker or salesman.
The HLURB is given a wide latitude in characterizing or categorizing acts which may
constitute unsound business practice or breach of contractual obligations in the real
estate trade. This grant of expansive jurisdiction to the HLURB does not mean,
however, that all cases involving subdivision lots or condominium units automatically
fall under its jurisdiction.
The mere relationship between the parties, i.e., that of being subdivision
owner/developer and subdivision lot buyer, does not automatically vest jurisdiction in
the HLURB. For an action to fall within the exclusive jurisdiction of the HLURB, the
decisive element is the nature of the action as enumerated in Section 1 of P.D. 1344.
On this matter, we have consistently held that the concerned administrative agency,
the National Housing Authority (NHA) before and now the HLURB, has jurisdiction
over complaints aimed at compelling the subdivision developer to comply with its
contractual and statutory obligations.
The complaint filed by petitioners alleged causes of action that apparently are not
cognizable by the HLURB considering the nature of the action and the reliefs sought.
A perusal of the complaint discloses that petitioners are actually seeking to nullify
and invalidate the duly constituted acts of PHCC - the April 29, 2005 Agreement
entered into by PHCC with DPDCI and its Board Resolution which authorized the
acceptance of the proposed offsetting/settlement of DPDCIs indebtedness and
approval of the conversion of certain units from saleable to common areas.
As it is clear that.
2. YES. The acts being assailed are those of PHHC; this case cannot prosper for
failure to implead such proper party.
An indispensable party is defined as one who has such an interest in the controversy
or subject matter that a final adjudication cannot be made, in his absence, without
injuring or affecting that interest. Under Section 7, Rule 3 of the Rules of Court,
"parties in interest without whom no final determination can be had of an action shall
be joined as plaintiffs or defendants."
If there is a failure to implead an indispensable party, any judgment rendered would

have no effectiveness. It is "precisely when an indispensable party is not before the
court (that) an action should be dismissed. The absence of an indispensable party
renders all subsequent actions of the court null and void for want of authority to act,
not only as to the absent parties but even to those present." The purpose of the rules
on joinder of indispensable parties is a complete determination of all issues not only
between the parties themselves, but also as regards other persons who may be
affected by the judgment. A decision valid on its face cannot attain real finality where
there is want of indispensable parties.
The Supreme Court has held that when it appears of record that there are other
persons interested in the subject matter of the litigation, who are not made parties to
the action, it is the duty of the court to suspend the trial until such parties are made
either plaintiffs or defendants.
The burden of procuring the presence of all indispensable parties is on the plaintiff.
The evident purpose of the rule is to prevent the multiplicity of suits by requiring the
person arresting a right against the defendant to include with him, either as co-
plaintiffs or as co-defendants, all persons standing in the same position, so that the
whole matter in dispute may be determined once and for all in one litigation.
From all indications, PHCC is an indispensable party and should have been
impleaded, either as a plaintiff or as a defendant, in the complaint filed before the
HLURB as it would be directly and adversely affected by any determination therein.
To belabor the point, the causes of action, or the acts complained of, were the acts of
PHCC as a corporate body.
The cause of action rightfully pertains to PHCC. Petitioners cannot exercise the same
except through a derivative suit. In the complaint, however, there was no allegation
that the action was a derivative suit. In fact, in the petition, petitioners claim that
their complaint is not a derivative suit. The Court ruled that for a derivative suit to
prosper, it is required that the minority stockholder suing for and on behalf of the
corporation must allege in his complaint that he is suing on a derivative cause of
action on behalf of the corporation and all other stockholders similarly situated who
may wish to join him in the suit. It is a condition sine qua non that the corporation be
impleaded as a party because not only is the corporation an indispensable party, but
it is also the present rule that it must be served with process. The judgment must be
made binding upon the corporation in order that the corporation may get the benefit
of the suit and may not bring subsequent suit against the same defendants for the
same cause of action. In other words, the corporation must be joined as party
because it is its cause of action that is being litigated and because judgment must be
a res adjudicata against it.
Without PHCC as a party, there can be no final adjudication of the HLURBs

judgment.
3. NO. The Court agrees with the position of the CA that the circumstances
prevailing in this case warranted a relaxation of the rule on exhaustion of
administrative remedies.
The doctrine of exhaustion of administrative remedies is a cornerstone of our judicial

system. The thrust of the rule is that courts must allow administrative agencies to
carry out their functions and discharge their responsibilities within the specialized
areas of their respective competence.
The doctrine of exhaustion of administrative remedies and the doctrine of primary

jurisdiction are not ironclad rules. In the case of Republic of the Philippines v. Lacap,
the Court enumerated the numerous exceptions to these rules, namely: (a) where
there is estoppel on the part of the party invoking the doctrine; (b) where the
challenged administrative act is patently illegal, amounting to lack of jurisdiction; (c)
where there is unreasonable delay or official inaction that will irretrievably prejudice
the complainant; (d) where the amount involved is relatively so small as to make the
rule impractical and oppressive; (e) where the question involved is purely legal and
will ultimately have to be decided by the courts of justice; (f) where judicial
intervention is urgent; (g) where the application of the doctrine may cause great and
irreparable damage; (h) where the controverted acts violate due process; (i) where
the issue of non-exhaustion of administrative remedies has been rendered moot; (j)
where there is no other plain, speedy and adequate remedy; (k) where strong public
interest is involved; and (l) in quo warranto proceedings.44 [Underscoring supplied]
The situations (b) and (e) in the foregoing enumeration obtain in this case.
The challenged decision of the HLURB is patently illegal having been rendered in
excess of jurisdiction, if not with grave abuse of discretion amounting to lack or
excess of jurisdiction. Also, the issue on jurisdiction is purely legal which will have to
be decided ultimately by a regular court of law.
There is a question of law when the doubt or difference arises as to what the law is
on a certain state of facts, and not as to the truth or the falsehood of alleged facts.
Said question at best could be resolved only tentatively by the administrative
authorities. The final decision on the matter rests not with them but with the courts
of justice. Exhaustion of administrative remedies does not apply, because nothing of
an administrative nature is to be or can be done. The issue does not require technical
knowledge and experience but one that would involve the interpretation and
application of law.
Sepulveda, Sr. v. Pelaez, G.R. No. 152195, January 31, 2005
FACTS:
The case at bar is a petition for review on certiorari under Rule 45 of the Rules of
Court. The private respondent (Atty. Pelaez) filed a complaint against his grand uncle
(Sepulveda, Sr.) with the CFI Cebu for the recovery of possession and ownership of
his undivided share of several parcels of land; his undivided 1/3 share in several
other lots and for the partition among the co-owners. The 11 lots among the 25
parcels of lands which Atty. Pelaezs mother, Dulce Sepulveda, inherited from her
grandmother under the project of partition which was submitted by Sepulveda, Sr. as
the administrator of the formers estate, duly approved by the said CFI in a Special
Proceeding. Under the said deed, Sepulveda, Sr. appeared to be the owner of an
undivided portion of Lot No. 28199, while his brother and Dulces uncle Santiago
Sepulveda, was the undivided owner of of the parcels of land covered by T.D. Nos.
18197, 18193 and 28316. Dulce and her uncles, Pedro and Santiago, were likewise
indicated therein as the co-owners of the 11 other parcels of land, each with an
undivided 1/3 share thereof.
Private Respondents Contention:
It alleged that his mother Dulce died intestate, and aside from himself, was survived
by her husband Rodolfo Pelaez and her mother Carlota Sepulveda. Dulces
grandfather Vicente Sepulveda died intestate and Dulce was then only about 4 years
old. According to the Atty. Pelaez, his grandmother Carlota repeatedly demanded the
delivery of her mothers share in the 11 parcels of land, but Sepulveda, Sr. who by
then was the Municipal Mayor of Tudela, refused to do so. Dulce, likewise, later
demanded the delivery of her share in the eleven parcels of land, but Pedro
Sepulveda, Sr. still refused, claiming that he needed to continue to possess the
property to reap the produce therefrom which he used for the payment of the realty
taxes on the subject properties. The Atty. Pelaez alleged that he himself demanded
the delivery of his mothers share in the subject properties on so many occasions, the
last of which was in 1972, to no avail.
Atty. Pelaez further narrated that his granduncle executed an affidavit, stating that
he was the sole heir of Dionisia when she died intestate, when, in fact, the latter was
survived by her three sons, Santiago, Pedro and Vicente. Pedro Sepulveda, Sr. also
executed a Deed of Absolute Sale the property covered by T.D. No. 19804 (T.D. No.

35090) in favor of the City of Danao for P7,492.00. According to the Atty. Pelaez, his
granduncle received this amount without Atty. Pelaez knowledge.
Two causes of actions were raised in the case at bar; the common to the first and
second causes of action are the following: ordering the defendant to pay the plaintiff
the amount of P50,000.00 as moral damages, exemplary damages, to deliver to the
plaintiff the latters share of the fruits of the 11 parcels of land, the litigation
expenses, attorneys fee of P12,000.00 and granting the plaintiff such other reliefs
and remedies as he may be entitle to in accordance with the law and equity.
Petitioners Contention:
Sepulveda, Sr. admitted having executed a deed of sale over the parcel of land
covered by T.D. No. 19804 in favor of Danao City, but averred that the latter failed to
pay the purchase price thereof; besides, the private respondent had no right to share
in the proceeds of the said sale. He likewise denied having received any demand for
the delivery of Dulces share of the subject properties from the latters mother
Carlota, or from the private respondent.
During the trial, Sepulveda, Sr. died intestate. A petition for the settlement of his
estate was filed with the RTC of Cebu, docketed as Special Proceeding No. SF-37.
His daughter, petitioner Socorro Sepulveda Lawas, was appointed administratrix of
his estate. In compliance with the decision of this Court in Lawas v. Court of Appeal,
the petitioner substituted the deceased.
To prove the delivery of Dulces share under the project of partition, the petitioner
presented the Affidavit of Consolidation she executed in October 1940 covering
thirteen (13) of the twenty-five (25) parcels of land which were deeded to her under
the Project of Partition, as well as the Order of the then CFI in Special Proceeding
No. 778-R, denying Carlotas motion for the reconstitution of the records of the said
case, and for the delivery of Dulces share in the eleven parcels of land. The court
likewise declared therein that Dulce, through her grandchildren and her mother,
Carlota, had already received her share of the estate from Pedro Sepulveda, Sr. as
early as January 10, 1938.
According to the petitioner, Dulce and Pedro Sepulveda, Sr. had a verbal agreement
wherein the eleven parcels of land covered by the complaint would serve as the
latters compensation for his services as administrator of Dionisias estate. Thus, upon
the termination of Special Proceeding No. 778-0, and subsequent to the distribution
of the shares of Dionisias heirs, Pedro Sepulveda, Sr. then became the sole owner of
Dulces shares. The petitioner likewise adduced evidence that Santiago Sepulveda
died intestate and was survived by his wife, Paz Velez Sepulveda and their then
minor children. It was pointed out that the private respondent failed to implead Paz
Sepulveda and her minor children as parties-defendants in the complaint. It was
further claimed that Pedro Sepulveda, Sr. declared the property covered by T.D. No.
18199 under his name for taxation purposes since the beginning of 1948. It was
likewise alleged that the eleven (11) parcels of land deeded to Dulce under the
Project of Partition had been declared for taxation purposes under the name of Pedro
Sepulveda since 1974, and that he and his heirs paid the realty taxes thereon.
RTC - The trial court ruled that the private respondents action for reconveyance
based on constructive trust had not yet prescribed when the complaint was filed; that
he was entitled to a share in the proceeds of the sale of the property to Danao City;
and that the partition of the subject property among the adjudicatees thereof was in
order.
COURT OF APPEALS - It affirmed the decision of the RTC.
ISSUE:
WON THE REGIONAL TRIAL COURT IN DANAO CITY THAT PAYMENT WAS MADE
BY DANAO CITY FOR ONE (1) OF THE ELEVEN (11) PARCELS INVOLVED IN THE
CASE AND OF WHICH HEREIN RESPONDENT SHOULD BE PAID BY PETITIONER
ONE THIRD (1/3) OF THE PURCHASE PRICE.
HELD: The petition is granted for the sole reason that the respondent failed to
implead as parties, all the indispensable parties in his complaint.
As gleaned from the material averments of the complaint and the reliefs prayed for
therein, the private respondent, as plaintiff therein, sought the recovery of the
ownership and possession of the ten (10) parcels of land and the partition thereof;
and for the payment of his share in the proceeds of the sale of the property which
Pedro Sepulveda, Sr. sold to Danao City amounting to P7,492.00, which Pedro
Sepulveda, Sr. claimed was left unpaid. It appears that when the private respondent
filed the complaint, his father, Rodolfo Pelaez, was still alive. Thus, when his mother
Dulce Pelaez died intestate on March 2, 1944, her husband Rodolfo and their son, the
private respondent, survived her. Under Article 996 of the New Civil Code, Rodolfo
Pelaez, as surviving spouse, is entitled to a portion in usufruct equal to that
corresponding by way of legitime to each of the legitimate children who has not
received any betterment. The rights of the usufructuary are provided in Articles 471
to 490 of the old Civil Code.
Under articles 807 and 834 of the old Civil Code the surviving spouse is a forced heir
and entitled to a share in usufruct in the estate of the deceased spouse equal to that
which by way of legitime corresponds or belongs to each of the legitimate children or
descendants who have not been bettered or have not received any share in the one-
third share destined for betterment. The right of the surviving spouse to have a share
in usufruct in the estate of the deceased spouse is provided by law of which such
spouse cannot be deprived and which cannot be ignored. Of course, the spouse may
waive it but the waiver must be express.
Section 1, Rule 69 of the Rules of Court provides that in an action for partition, all
persons interested in the property shall be joined as defendants.
Thus, all the co-heirs and persons having an interest in the property are
indispensable parties; as such, an action for partition will not lie without the joinder
of the said parties. The mere fact that Pedro Sepulveda, Sr. has repudiated the co-
ownership between him and the respondent does not deprive the trial court of
jurisdiction to take cognizance of the action for partition, for, in a complaint for
partition, the plaintiff seeks, first, a declaration that he is a co-owner of the subject
property; and, second, the conveyance of his lawful shares.
In the present action, the private respondent, as the plaintiff in the trial court, failed
to implead the following indispensable parties: his father, Rodolfo Pelaez; the heirs of
Santiago Sepulveda, namely, Paz Sepulveda and their children; and the City of Danao
which purchased the property covered by T.D. 19804 (T.D. No. 35090) from Pedro
Sepulveda, Sr. and maintained that it had failed to pay for the purchase price of the
property. Rodolfo Pelaez is an indispensable party he being entitled to a share in
usufruct, equal to the share of the respondent in the subject properties. There is no
showing that Rodolfo Pelaez had waived his right to usufruct.
RULE 3, SEC. 7. Compulsory joinder of indispensable parties. Parties in interest

without whom no final determination can be had of an action shall be joined either as
plaintiffs or defendants.
Indeed, the presence of all indispensable parties is a condition sine qua non for the
exercise of judicial power. It is precisely when an indispensable party is not before
the court that the action should be dismissed. Thus, the plaintiff is mandated to
implead all the indispensable parties, considering that the absence of one such party
renders all subsequent actions of the court null and void for want of authority to act,
not only as to the absent parties but even as to those present. One who is a party to a
case is not bound by any decision of the court, otherwise, he will be deprived of his
right to due process. Without the presence of all the other heirs as plaintiffs, the trial
court could not validly render judgment and grant relief in favor of the private
respondent. The failure of the private respondent to implead the other heirs as
parties-plaintiffs constituted a legal obstacle to the trial court and the appellate
courts exercise of judicial power over the said case, and rendered any orders or
judgments rendered therein a nullity.
To reiterate, the absence of an indispensable party renders all subsequent actions of

the court null and void for want of authority to act, not only as to the absent parties
but even as to those present. Hence, the trial court should have ordered the
dismissal of the complaint.
VICTORIANO BORLASA, ET AL. v. VICENTE POLISTICO, ET AL., G.R. No. L-

22909 January 28, 1925
FACTS:

The plaintiffs and defendants, together with several hundred other persons, formed
an association under the name of Turuhan Polistico & Co. Polistico, the principal
defendant herein, was elected president and treasurer of the association, and his
house in Lilio, Laguna, was made its principal place of business. Under the by-laws,
each member obligated himself to pay to Polistico, before 3 o'clock in the afternoon
of every Sunday the sum of 50 centavos, except that on every fifth Sunday the
amount was P1, if the president elected to call this amount, as he always did. It is
alleged that from April, 1911, until April, 1917, the sums of money mentioned above
were paid weekly by all of the members of the society with few irregularities. The
inducement to these weekly contributions was found in provisions of the by-laws to
the effect that a lottery should be conducted weekly among the members and that
the successful member should be paid the amount collected each week, from which,
however, the president-treasurer of the society was to receive the sum of P200, to be
held by him as funds of the society, to which, Polistico allegedly received P74,000.
Borlasa and others filed an action against Vicente Polistico and others, chiefly for the
purpose of securing the dissolution of Turuhan Polistico & Co., and to compel the
defendants to account for and surrender the money and property of the association
in order that its affairs may be liquidated and its assets applied according to law. The
defendants in the complaint are the members of the board of directors of the
association.
In an amended answer the defendants raised the question of lack of parties and set
out a list of some hundreds of persons whom they alleged should be brought in as
parties defendant on the ground, among others, that they were in default in the
payment of their dues to the association.
The court made an order requiring the plaintiffs to amend their complaint within a
stated period so as to include all of the members of theTurnuhan Polistico & Co.
either as plaintiffs or defendants. The plaintiffs excepted to this order, but
acquiesced to the extent of amending their complaint by adding as additional parties
plaintiff some hundreds of persons. The defendants demurred to the amended
complaint on the ground that it showed on its face a lack of necessary parties. The
trial judge having sustained a demurrer for defect of parties and the plaintiffs
electing not to amend, the cause was dismissed, and from this order an appeal was
taken by the plaintiffs to Supreme Court.
ISSUE:
Whether or not all the members of the association must be pleaded either as
plaintiffs or defendants.
HELD: NO.
The situation involved is precisely the one contemplated in section 118 of the Code of
Civil Procedure, where one or more may sue for the benefit of all. It is evident from
the showing made in the complaint, and from the proceedings in the court below,
that it would be impossible to make all of the persons in interest parties to the cases
and to require all of the members of the association to be joined as parties would be
tantamount to a denial of justice.
The general rule with reference to the making of parties in a civil action requires, of
course, the joinder of all necessary parties wherever possible, and the joinder of all
indispensable parties under any and all conditions, the presence of those latter being
a sine qua non of the exercise of judicial power. The class suit contemplates an
exceptional situation where there are numerous persons all in the same plight and all
together constituting a constituency whose presence in the litigation is absolutely
indispensable to the administration of justice. Here the strict application of the rule
as to indispensable parties would require that each and every individual in the class
should be present. But at this point the practice is so far relaxed as to permit the suit
to proceed, when the class is sufficient represented to enable the court to deal
properly and justly with that interest and with all other interest involved in the suit.
In the class suit, then, representation of a class interest which will be affected by the
judgment is indispensable; but it is not indispensable to make each member of the
class an actual party.
The addition of some hundreds of persons to the number of the plaintiffs, was
unnecessary, and as the presence of so many parties is bound to prove embarrassing
to the litigation from death or removal. Upon the return of this record to the lower
court for further proceedings, the plaintiff shall again amend their complaint by
dismissing as to unnecessary parties plaintiffs, but retaining a sufficient number of
responsible persons to secure liability for costs and fairly to present all the members
of the association.
The order appealed from is reversed, the demurrer of the defendants based upon
supposed lack of parties is overruled, and the defendants are required to answer to
the amended complaint within the time allowed by law and the rules of the court.

Oposa vs Factoran
GR No. 101083; July 30 1993
FACTS:
A taxpayers class suit was filed by minors Juan Antonio Oposa, et al., representing
their generation and generations yet unborn, and represented by their parents
against Fulgencio Factoran Jr., Secretary of DENR. They prayed that judgment be
rendered ordering the defendant, his agents, representatives and other persons
acting in his behalf to:
1. Cancel all existing Timber Licensing Agreements (TLA) in the country;
2. Cease and desist from receiving, accepting, processing, renewing, or
appraising new TLAs:
and granting the plaintiffs such other reliefs just and equitable under the premises.
They alleged that they have a clear and constitutional right to a balanced and
healthful ecology and are entitled to protection by the State in its capacity as parens
patriae. Furthermore, they claim that the act of the defendant in allowing TLA
holders to cut and deforest the remaining forests constitutes a misappropriation
and/or impairment of the natural resources property he holds in trust for the benefit
of the plaintiff minors and succeeding generations.
The defendant filed a motion to dismiss the complaint on the following grounds:
1. Plaintiffs have no cause of action against him;

2. The issues raised by the plaintiffs is a political question which properly
pertains to the legislative or executive branches of the government.
ISSUE:
Whether or not the petitioner-minors have a cause of action in filing a class suit to
prevent the misappropriation or impairment of Philippine rainforests?
HELD:
Yes. Petitioner-minors assert that they represent their generation as well as

generations to come. The Supreme Court ruled that they can, for themselves, for
others of their generation, and for the succeeding generation, file a class suit. Their
personality to sue in behalf of succeeding generations is based on the concept of
intergenerational responsibility insofar as the right to a balanced and healthful
ecology is concerned. Such a right considers the rhythm and harmony of nature
which indispensably include, inter alia, the judicious disposition, utilization,
management, renewal and conservation of the countrys forest, mineral, land,
waters, fisheries, wildlife, offshore areas and other natural resources to the end that
their exploration, development, and utilization be equitably accessible to the present
as well as the future generations. Needless to say, every generation has a
responsibility to the next to preserve that rhythm and harmony for the full enjoyment
of a balanced and healthful ecology. Put a little differently, the minors assertion of
their right to a sound environment constitutes at the same time, the performance of
their obligation to ensure the protection of that right for the generations to come.
Ortigas & Co., Limited Partnership v. Ruiz, 148 SCRA 326
FACTS:
The case involves a large tract of land located in the boundaries of Pasig, Rizal and
Ortigas wherein the said petitioners thru their predecessors-in-interest "Provincial
del Santisima Nombre de Jesus de Agustinos Calzados," has been in continuous
possession since 1862 or 125 years ago, as confirmed by the Court in Compana
Agricola de Ultramar v. Marcos Domingo, et al., 6 Phil. 246 (1906), when it affirmed
the decision of the Court of Land Registration declaring the Compana Agricola de
Ultramar, also one of petitioner's predecessors-in-interest, owner of the lands in
question to the exclusion of the claims of contestants or any persons holding under
them. Said titles are in the Registry of Deeds of Rizal.
Pedro del Rosario and three others in behalf of 104 others, as a class suit, filed a civil
case against the petitioner alleging that said title of the petitioner should be declared
as null and void for lack of publication in the land registry proceedings and
declaring that they are the lawful owners of the said land.
Another civil case was instituted by Inocencio Bernardo and five others in behalf of
37 others, as a class suit, concerning another portion of the said land. Said case was
identical to the case file by Pedro del Rosario and others. An urgent ex-parte motion
of private respondents, opposing among others, petitioner's construction of fences
and high walls, roads, streets and canals on the land in dispute. In the resolution of
the Supreme Court directed the issuance of a writ of preliminary injunction upon
petitioner's filing of a bond in the sum of ten thousand pesos (P10,000.00), enjoining
respondent Court from enforcing the restraining order.
ISSUES:
1. Whether or not there is a valid class suit
2. Whether or not the respondent court acted with grave abuse of discretion
amounting to lack or excess jurisdiction
HELD:
1. NO. The Supreme Court cited the case of (Borlaza v. Polistico, 47 Phil. 348;
Newsweek, Inc. v. The Intermediate Appellate Court, et al., G.R. No. 63559,
promulgated May 30, 1986) where in it stated that,
It is not a case where one or more may sue for the benefit of all or where the
representation of class interest affected by the judgment or decree is indispensable
to make each member of the class an actual party. Furthermore, class suit will not
lie because each defendant has an interest only in the particular portion of the said
land that each of them occupies. They do not have any common interest in the
subject matter in controversy.
2. YES. It is clearly evident that the restraining order issued by the lower court is
improper and without basis. The Court ruled that in actions realty, involving
preliminary injunction will lie only after the plaintiff has fully established his title or
right thereto by a proper action for the purpose. To authorize a temporary injunction,
the complainant must make out at least a prima facie showing of a right to the final
relief. The court emphasized the two requirements in issuing a preliminary injunction
as dicussed in the case of Buayan Cattle Co. Inc. v. Quintillan, the existence of the
right to be protected, and the facts against which the injunction is to be directed, are
violative of said right. In particular, for a writ of preliminary injunction to issue, the
existence of the right and the violation must appear in the allegation of the complaint
and a preliminary injunction is proper only when the plaintiff appears to be entitled
to the relief demanded in his complaint. Furthermore, the complaint for injunctive
relief must be construed strictly against the pleader. Respondents have failed to
meet the said requirements due to the fact that there is no irreparable injury present
based on the actuations of the petitioner herein.
RIVIERA FILIPINA, INC., v. COURT OF APPEALS, JUAN L. REYES, (now

deceased), substituted by his heirs, namely, Estefania B. Reyes, Juanita R. de
la Rosa, Juan B. Reyes, Jr. and Fidel B. Reyes, PHILIPPINE CYPRESS
CONSTRUCTION & DEVELOPMENT CORPORATION, CORNHILL TRADING
CORPORATION and URBAN DEVELOPMENT BANK, G.R. No. 117355, April 5,
2002
FACTS:
Respondent Juan L. Reyes (Reyes) executed a Contract of Lease with Riviera. The
ten-year (10) renewable lease of Riviera, which started on August 1, 1982, involved a
1,018 square meter parcel of land located along EDSA, Quezon City, covered and
described in Transfer Certificate of Title No. 186326 of the Registry of Deeds of
Quezon City in the name of Juan L. Reyes. The subject land is mortgaged in favor of
Prudential Bank. Since Reyes loan remained unpaid, the bank extrajudicially
foreclosed the property. At the auction sale, the bank was declared as the highest
bidder. The redemption period was set to expire on March 7, 1989. Realizing that he
could not possibly raise in time the money needed to redeem the subject property,
Reyes decided to sell the same. Recognizing Rivieras right of first refusal, the
subject land was first offered to Riviera, through its President Vicente C. Angeles.
The first offer made by Reyes was at 5,000/sqm. However, Angeles bargained at
3,500/sqm. After seven months, Angeles offered to buy the property at 4,000/sqm.
Reyes did not accept the offer as he wanted to sell it at 6,000/sqm. At this point, no
agreement was still arrived. On Nov. 2, 1988,Reyes, through its counsel, sent a letter
informing Riviera that Reyes was selling the property at 6,000/sqm and that Riviera
is given 10 days to purchase the property. As reply, Riviera sent a letter making an
offer at 5,000/sqm. However, still no agreement was made between the parties.
Meanwhile, on December 4, 1988, Reyes confided to Rolando P. Traballo, a close

family friend and President of Cypress, his predicament about the nearing expiry
date of the redemption period of the foreclosed mortgaged property with Prudential
Bank, the money for which he could not raise on time thereby offering the subject
property to him for Six Thousand Pesos (P6,000.00) per square meter. Traballo
expressed interest in buying the said property, told Reyes that he will study the
matter and suggested for them to meet the next day.
They met the next day, December 5, 1988, at which time Traballo bargained for Five
Thousand Three Hundred Pesos (P5,300.00) per square meter. After considering the
reasons cited by Traballo for his quoted price, Reyes accepted the same. However,
since Traballo did not have the amount with which to pay Reyes, he told the latter
that he will look for a partner for that purpose. Reyes told Traballo that he had
already afforded Riviera its right of first refusal but they cannot agree because
Rivieras final offer was for Five Thousand Pesos (P5,000.00) per square meter.
Sometime in January 1989, apprehensive of the impending expiration in March 1989

of the redemption period of the foreclosed mortgaged property with Prudential Bank
and the deal between Reyes and Traballo was not yet formally concluded, Reyes
decided to approach anew Riviera. For this purpose, he requested his nephew, Atty.
Estanislao Alinea, to approach Angeles and find out if the latter was still interested in
buying the subject property and ask him to raise his offer for the purchase of the said
property a little higher. As instructed, Atty. Alinea met with Angeles and asked the
latter to increase his offer of Five Thousand Pesos (P5,000.00) per square meter but
Angeles said that his offer is Five Thousand Pesos (P5,000.00) per square meter.
Following the meeting, Angeles sent a letter dated February 4, 1989 to Reyes,
through Atty. Alinea, that his offer is Five Thousand Pesos (P5,000.00) per square
meter payment of which would be fifty percent (50%) down within thirty (30) days
upon submission of certain documents in three (3) days, the balance payable in five
(5) years in equal monthly installments at twelve percent (12%) interest in
diminishing balance.With the terms of this second offer, Angeles admittedly
downgraded the previous offer of Riviera on December 2, 1988.
Atty. Alinea conveyed to Reyes Rivieras offer of Five Thousand Pesos (P5,000.00) per
square meter but Reyes did not agree. Consequently, Atty. Alinea contacted again
Angeles and asked him if he can increase his price. Angeles, however, said he cannot
add anymore. Reyes did not expressly offer his subject property to Riviera at the
price of Five Thousand Three Hundred Pesos (P5,300.00) per square meter.
Sometime in February 1989, Cypress and its partner in the venture, Cornhill Trading
Corporation, were able to come up with the amount sufficient to cover the
redemption money, with which Reyes paid to the Prudential Bank to redeem the
subject property. On May 1, 1989, a Deed of Absolute Sale covering the subject
property was executed by Reyes in favor of Cypress and Cornhill for the
consideration of Five Million Three Hundred Ninety Five Thousand Four Hundred
Pesos (P5,395,400.00). On the same date, Cypress and Cornhill mortgaged the
subject property to Urban Development Bank for Three Million Pesos
(P3,000,000.00).
Thereafter, Riviera sought from Reyes, Cypress and Cornhill a resale of the subject
property to it claiming that its right of first refusal under the lease contract was
violated. After several unsuccessful attempts, Riviera filed the suit to compel Reyes,
Cypress, Cornhill and Urban Development Bank to transfer the disputed title to the
land in favor of Riviera upon its payment of the price paid by Cypress and Cornhill.
Both the trial court and the appellate court rendered judgment in favor of Reyes.
ISSUE:
1. WON the CA committed grave abuse of discretion tantamount to lack or excess of
its jurisdiction in ruling that petitioner Riviera Filipina Inc., already lost its right of
first refusal.
2. WON the CA committee a grave abuse of discretion tantamount to lack or excess
of its jurisdiction in deciding petitioners appeal at a time when the principal
appellee is allegedly dead and no proper substitution of the alleged deceased party
has been made; Hence, the decision of the CA and its resolution denying
reconsideration, is null and void.
HELD:
1. NO.At the outset, we note that, while Riviera alleges that the Court of Appeals
committed grave abuse of discretion amounting to lack or excess of jurisdiction, the
instant petition is, as it should be, treated as a petition for review under Rule 45 and
not as a special civil action for certiorari under Rule 65 of the Revised Rules of
Court, now the 1997 Rules of Civil Procedure.
The distinctions between Rule 45 and 65 are far and wide, the most notable of which
is that errors of jurisdiction are best reviewed in a special civil action for certiorari
under Rule 65, while errors of judgment are correctible only by appeal in a petition
for review under Rule 45. The rationale for the distinction is simple. When a court
exercises its jurisdiction an error committed while so engaged does not deprive it of
the jurisdiction being exercised when the error is committed. If it did, every error
committed by a court would deprive it of its jurisdiction and every erroneous
judgment would be a void judgment. This cannot be allowed. The administration of
justice would not countenance such a rule. Thus, an error of judgment that the court
may commit in the exercise of its jurisdiction is not correctible through the original
special civil action of certiorari. Appeal from a final disposition of the Court of
Appeals, as in the case at bar, is by way of a petition for review under Rule 45.
In the petition at bar, Riviera posits the view that its right of first refusal was totally
disregarded or violated by Reyes by the latters sale of the subject property to
Cypress and Cornhill. It contends that the right of first refusal principally amounts to
a right to match in the sense that it needs another offer for the right to be exercised.
In Paraaque Kings Enterprises, Inc. v. Court of Appeals, the Court affirmed the
nature of and the concomitant rights and obligations of parties under a right of first
refusal. The Court, summarizing the rulings in Guzman, Bocaling & Co. v. Bonnevie
and Equatorial Realty Development, Inc. v. Mayfair Theater, Inc., held that in order
to have full compliance with the contractual right granting petitioner the first option
to purchase, the sale of the properties for the price for which they were finally sold
to a third person should have likewise been first offered to the former. Further, there
should be identity of terms and conditions to be offered to the buyer holding a right
of first refusal if such right is not to be rendered illusory. Lastly, the basis of the right
of first refusal must be the current offer to sell of the seller or offer to purchase of
any prospective buyer.
An examination of the attendant particulars of the case do not persuade us to uphold

Rivieras view. As clearly shown by the records and transcripts of the case, the
actions of the parties to the contract of lease, Reyes and Riviera, shaped their
understanding and interpretation of the lease provision "right of first refusal" to
mean simply that should the lessor Reyes decide to sell the leased property during
the term of the lease, such sale should first be offered to the lessee Riviera. And that
is what exactly ensued between Reyes and Riviera, a series of negotiations on the
price per square meter of the subject property with neither party, especially Riviera,
unwilling to budge from his offer, as evidenced by the exchange of letters between
the two contenders.
It can clearly be discerned from Rivieras letters dated December 2, 1988 and
February 4, 1989 that Riviera was so intractable in its position and took obvious
advantage of the knowledge of the time element in its negotiations with Reyes as the
redemption period of the subject foreclosed property drew near. Riviera strongly
exhibited a "take-it or leave-it" attitude in its negotiations with Reyes. It quoted its
"fixed and final" price as Five Thousand Pesos (P5,000.00) and not any peso more. It
voiced out that it had other properties to consider so Reyes should decide and make
known its decision "within fifteen days." Riviera, in its letter dated February 4, 1989,
admittedly, even downgraded its offer when Reyes offered anew the property to it,
such that whatever amount Reyes initially receives from Riviera would absolutely be
insufficient to pay off the redemption price of the subject property. Naturally, Reyes
had to disagree with Rivieras highly disadvantageous offer.
Nary a howl of protest or shout of defiance spewed forth from Rivieras lips, as it
were, but a seemingly whimper of acceptance when the counsel of Reyes strongly
expressed in a letter dated December 5, 1989 that Riviera had lost its right of first
refusal. Riviera cannot now be heard that had it been informed of the offer of Five
Thousand Three Hundred Pesos (P5,300.00) of Cypress and Cornhill it would have
matched said price. Its stubborn approach in its negotiations with Reyes showed
crystal-clear that there was never any need to disclose such information and doing so
would be just a futile effort on the part of Reyes. Reyes was under no obligation to
disclose the same. Pursuant to Article 1339 of the New Civil Code, silence or
concealment, by itself, does not constitute fraud, unless there is a special duty to
disclose certain facts, or unless according to good faith and the usages of commerce
the communication should be made. We apply the general rule in the case at bar
since Riviera failed to convincingly show that either of the exceptions are relevant to
the case at bar.
In sum, the Court finds that in the interpretation of the right of first refusal as
understood by the parties herein, the question as to what is to be included therein or
what is meant by the same, as in all other provisions of the contract, is for the parties
and not for the court to determine, and this question may not be resolved by what
the parties might have provided had they thought about it, which is evident from
Riviera claims, or by what the court might conclude regarding abstract fairness.
2. NO. On the last error attributed to the Court of Appeals which is the effect on the
jurisdiction of the appellate court of the non-substitution of Reyes, who died during
the pendency of the appeal, the Court notes that when Riviera filed its petition with
this Court and assigned this error, it later filed on October 27, 1994 a Manifestation
with the Court of Appeals stating that it has discovered that Reyes is already dead, in
view of which the appellate court issued a Resolution dated December 16, 1994
which noted the manifestation of Riviera and directed the counsel of Reyes to submit
a copy of the latters death certificate and to file the proper motion for substitution of
party.Complying therewith, the necessary motion for substitution of deceased Reyes,
who died on January 7, 1994, was filed by the heirs, namely, Estefania B. Reyes,
Juanita R. de la Rosa, Juan B. Reyes, Jr. and Fidel B. Reyes. Acting on the motion for
substitution, the Court of Appeals granted the same.
Notwithstanding the foregoing, Section 16 and 17 of Rule 3 of the Revised Rules of

Court, upon which Riviera anchors its argument, has already been amended by the
1997 Rules of Civil Procedure. Even applying the old Rules, the failure of a counsel
to comply with his duty under Section 16 of Rule 3 of the Revised Rules of Court, to
inform the court of the death of his client and no substitution of such is effected, will
not invalidate the proceedings and the judgment thereon if the action survives the
death of such party, as this case does, since the death of Reyes did not extinguish his
civil personality. The appellate court was well within its jurisdiction to proceed as it
did with the case since the death of a party is not subject to its judicial notice.
Needless to stress, the purpose behind the rule on substitution of parties is the
protection of the right of every party to due process.
SOCORRO SEPULVEDA LAWAS, vs. COURT OF APPEALS, HON. BERNARDO

LL. SALAS, [as Judge, CFI, Cebu, Branch VIII], and PACIFICO PELAEZ, G.R.
No. L-45809, December 12, 1986
FACTS:
This is an appeal by certiorari under Rule 45 of the Revised Rules of Court from the
decision of the Court of Appeals which dismissed the petition for certiorari under,
Rule 65 of said Rules against respondent Judge Bernardo L. Salas of the Court of
First Instance (CFI) of Cebu. The antecedent facts are briefly as follows:
Private respondent Pacifico Pelaez filed a Complaint on December 6, 1972 against

petitioner's father, Pedro Sepulveda, for ownership and partition of certain parcels of
land. Defendant Pedro Sepulveda filed his Answer dated December 31, 1972
resisting the claim and raising the special defenses of laches, prescription and failure
to ventilate in a previous special proceeding. During the presentation of evidence for
the plaintiff, the defendant died on March 25, 1975. On May 21, 1975, counsels for
the deceased defendant filed a notice of death wherein were enumerated the thirteen
children and surviving spouse of the deceased.
On May 5, 1975, petitioner filed a petition for letters of administration and she was
appointed judicial administratrix of the estate of her late father in July, 1976. At the
hearing of the case on November 27, 1975, Attys. Domingo Antigua and Serafin
Branzuela, former counsels for the deceased defendant, manifested in open court
that with the death of their client, their contract with him was also terminated and
none of the thirteen children nor the surviving spouse had renewed the contract, but
instead they had engaged the services of other lawyers in the intestate proceedings.
Notwithstanding the manifestation of the former counsels of the deceased defendant,
the respondent trial judge set the case for hearing on January 13, 1976 and sent the
notice of hearing to said counsels.
On January 13, 1976, the respondent trial judge issued three orders. The first order
substituted the heirs of the deceased defendant, namely, his thirteen children and
surviving spouse, as defendants; the second order authorized Atty. Teodoro Almase,
counsel for the plaintiff, to present his evidence in the absence of Attys. Antigua and
Branzuela and the third order treated the case submitted for decision, after the
plaintiff had presented his evidence and rested his case, and directed that said
counsels and the fourteen heirs of the deceased defendant be furnished copies
thereof.
On January 28, 1976, the respondent trial judge rendered a decision against the
heirs of the deceased defendant. On February 19, 1976, ten of the children of the
deceased defendant, who apparently did not know that a decision had already been
rendered, filed an Answer in-substitution of the deceased defendant through their
counsel Atty. Jesus Yray. This was denied admission by the respondent trial judge for
being already moot and academic because of the earlier decision.
On March 9, 1976, the widow and two other children of the deceased defendant,
through their counsel Atty. Delfin Quijano, filed a motion for substitution and for
reconsideration of the decision dated January 28, 1976. On April 7, 1976, the
respondent trial judge issued an order setting aside his decision and setting the case
in the calendar for cross-examination of the plaintiff, Pacifico Pelaez, with a proviso
that said order was applicable only to the three heirs who had filed the motion. On
July 14, 1976, the respondent trial judge lifted the order setting aside his decision,
despite the verbal petition for postponement of the hearing made by one of the three
heirs on the ground of the absence of their counsel.
On July 9, 1976, petitioner, who had been appointed judicial administratrix of the
estate of the deceased defendant and who was one of the heirs who had filed an
Answer on February 19, 1976, filed a motion to intervene and/or substitute the
deceased defendant. On August 25, 1976, the respondent trial judge denied the
motion for the reason that the decision had already become final.
Petitioner then filed a special civil action of certiorari with the Court of Appeals to
annul the proceedings in the respondent trial court. However, the Court of Appeals
dismissed the petition for certiorari. Hence, the present appeal.
ISSUE:
Whether or not the CFI and CA erred in its decision for failure to comply with Sec.
16, Rule 3
HELD: Yes. The appeal is meritorious. Section 16 of Rule 3 provides as follows:
Duty of attorney upon death, incapacity, or incompetency of party. Whenever a

party to a pending case dies, becomes incapacitated or incompetent, it shall be the
duty of his attorney to inform the court promptly of such death, incapacity or
incompetency, and to give the name and residence of his executor, administrator,
guardian or other legal representative.
The former counsels for the deceased defendant, Pedro Sepulveda, complied with
this rule by filing a notice of death on May 21, 1975. They also correctly manifested
in open court at the hearing of the case on November 27, 1975, that with the death
of their client their contract with him was also terminated and none of the heirs of
the deceased had renewed the contract, and the heirs had instead engaged the
services of other lawyers in the intestate proceedings.
Both the respondent trial judge and the CA erred in considering the former counsels
of the deceased defendant as counsels for the heirs of the deceased. The statement
in the decision of the CA that "the appearance of the lawyers of their deceased father
in court on January 13, 1976 carries the presumption that they were authorized by
the heirs of the deceased defendant" is erroneous. Moreover, such a presumption
was not warranted in view of the manifestation of said lawyers in open court on
November 27, 1975 that they were not representing the heirs of the deceased
defendant.
Consequently, when on the same date, November 27, 1975, the respondent trial
judge issued an order setting the continuation of the trial of the case on January 13,
1976, with notices sent to Atty. Almase for the plaintiff and Attys. Antigua and
Branzuela for the deceased defendant, he acted with grave abuse of discretion
amounting to excess of jurisdiction.
It was only at the hearing on January 13, 1976 that the respondent trial judge issued
an order substituting the deceased defendant with his fourteen heirs. This was
followed with an order authorizing counsel for the plaintiff to present his evidence in
the absence of Attys. Antigua and Branzuela, and lastly, an order treating the case as
submitted for decision.
In the order of the respondent trial judge dated November 10, 1976, denying
petitioner's motion for reconsideration of the order denying her motion for
intervention, mention was made of the delayed arrival of Attys. Antigua and
Branzuela at the hearing on January 13, 1976 and of their being allowed to cross-
examine the plaintiff himself.
The refusal of said former counsels of the deceased defendant to cross-examine the
plaintiff was justified
... in view of the intervening event of appellant's death and the interposition of the
equally established principle that the relationship of attorney and client is
terminated by the death of the client, as acknowledged by respondent court itself as
well as respondents. In the absence of a retainer from the heirs or authorized
representatives of his deceased defendant the attorney would have no further power
or authority to appear or take any further action in the case, save to inform the court
of the client's death and take the necessary steps to safeguard the decedent's rights
in the case. (Vda. de Haberer vs. Court of Appeals, May 26, 1981, 104 SCRA 534,
540)
Moreover, as above stated, petitioner had as early as May 5, 1975 filed a petition for
letters of administration, and the same was granted in July, 1975. Section 17 of Rule
3 provides as follows:
Death of party. After a party dies and the claim is not thereby extinguished, the court
shag order, upon proper notice, the legal representative of the deceased to appear
and to be substituted for the deceased, within a period of thirty (30) days, or within
such time as may be granted. If the legal representative fails to appear within said
time, the court may order the opposing party to procure the appointment of a legal
representative of the deceased within a time to be specified by the court, and the
representative shall immediately appear for and on behalf of the interest of the
deceased. The court charges involved in procuring such appointment, if defrayed by
the opposing party, may be recovered as costs. The heirs of the de ceased may be
allowed to be substituted for the deceased, without requiring the appointment of an
executor or administrator and the court may appoint guardian ad litem for the minor
heirs.
As this Court has held:
... Under the Rule, it is the court that is called upon, after notice of a party's death
and the claim is not thereby extinguished, to order upon proper notice the legal
representative of the deceased to appear within a period of 30 days or such time as it
may grant. Since no administrator of the estate of the deceased appellant had yet
been appointed as the same was still pending determination in the Court of First
Instance of Quezon City, the motion of the deceased's counsel for the suspension of
the running of the period within which to file appellant's brief was well-taken. More,
under the Rule, it should have set a period for the substitution of the deceased party
with her legal representative or heirs, failing which, the court is called upon to order
the opposing party to procure the appointment of a legal representative of the
deceased at the cost of the deceased's estate, and such representative shall then
'immediately appear for and on behalf of the interest of the deceased.
Respondent court gravely erred in not following the Rule and requiring the
appearance of the legal representative of the deceased and instead dismissing the
appeal of the deceased who yet had to be substituted in the pending appeal Thus, it
has been held that when a party dies in an action that survives, and no order is
issued by the court for the appearance of the legal representative or of the heirs of
the deceased in substitution of the deceased, and as a matter of fact no such
substitution has ever been effected, the trial held by the court without such legal
representatives or heirs and the judgment rendered after such trial are null and void
because the court acquired no jurisdiction over the persons of the legal
representatives or of the heirs upon whom the trial and the judgment would be
binding. (Ordoveza vs. Raymundo, 63 Phil 275 [1936]; Obut vs. Court of Appeals, et
al., 70 SCRA 546) (Vda. de Haberer vs. Court of Appeals, supra, p. 541.
Under the said Rule, priority is given to the legal representative of the deceased, that
is, the executor or administrator of his estate. It is only in cases of unreasonable
delay in the appointment of an executor or administrator, or in cases where the heirs
resort to an extrajudicial settlement of the estate, that the court may adopt the
alternative of allowing the heirs of the deceased to be substituted for the deceased.
In the case at bar, in view of the pendency of Special Proceeding No. 37-SF Intestate
Estate of Pedro Sepulveda, and the pending application of petitioner to be appointed
judicial administratrix of the estate, the respondent trial judge should have awaited
the appointment of petitioner and granted her motion to substitute the deceased
defendant. While the lower courts correctly held that the death of Pedro Sepulveda
did not obliterate his verified Answer to the Complaint filed by private respondent
and that the Answer filed by the ten heirs and the Answer filed by the Administratrix
were both unnecessary, the said heirs or the administratrix could, with leave of court,
file an Amended Answer.
In view of the foregoing, the Court rules that the proceedings conducted by the
respondent trial judge after the death of the deceased defendant are null and void.

WHEREFORE, the decision of the Court of Appeals is reversed; the petition for
certiorari is granted; petitioner is ordered substituted for the deceased defendant,
Pedro Sepulveda; and the proceedings conducted by the respondent trial judge after
the death of the deceased defendant, including the decision rendered by him on
January 28, 1976, are set aside; with costs against private respondent.
SO ORDERED.
Armand Nocum and the Philippine Daily Inquirer v. Lucio Tan, G.R. No.
145022, September 23, 2005
FACTS:
On September 27, 1998, Lucio Tan filed a complaint against reporter Armand
Nocum, Capt. Florendo Umali, ALPAP and Inquirer with the Regional Trial Court of
Makati seeking moral and exemplary damages for the alleged malicious and
defamatory imputations contained in a news article. INQUIRER and NOCUM filed
their joint answer, dated October 27, 1998, wherein they alleged that: (1) the
complaint failed to state a cause of action; (2) the defamatory statements alleged in
the complaint were general conclusions without factual premises; (3) the questioned
news report constituted fair and true report on the matters of public interest
concerning a public figure and therefore, was privileged in nature; and (4) malice on
their part was negated by the publication in the same article of plaintiffs or PALs side
of the dispute with the pilots union. ALPAP and UMALI likewise filed their joint
answer, dated October 31, 1998, and alleged therein that: (1) the complaint stated no
cause of action; (2) venue was improperly laid; and (3) plaintiff Lucio Tan was not a
real party in interest. It appeared that the complaint failed to state the residence of
the complainant at the time of the alleged commission of the offense and the place
where the libelous article was printed and first published.
RTC Makati: Dismissed the complaint without prejudice on the ground of improper
venue.
Tan filed an Omnibus Motion dated February 24, 1999, seeking reconsideration of
the dismissal and admission of the amended complaint. It included, inter alia, that:
the questioned article was printed and first published in the City of Makati and that
the questioned caricature was printed and first published in the City of Makati.
RTC Makati: admitted the amended complaint and deemed set aside the previous
order of dismissal, inter alia, that: The mistake or deficiency in the original complaint
appears now to have been cured in the Amended Complaint which can still be
properly admitted, pursuant to Rule 10 of the 1997 Rules of Civil Procedure,
inasmuch as the Order of dismissal is not yet final. Besides, there is no substantial
amendment in the Amended Complaint which would affect the defendants defenses
and their Answers. The Amendment is merely formal, contrary to the contention of
the defendants that it is substantial.
CA: Two petitions for certiorari were filed, one filed by petitioners and the other by
defendants Umali and ALPAP. The two petitions were consolidated. In April 2000, it
ordered the dismissal of the petition and thereby affirming the RTC decision. Motions
for reconsideration was filed but was denied.

On 11 December 2000, the Court required respondent Tan to comment on the
petition filed by petitioners.Respondent filed his comment on 22 January 2001[4] to
which petitioners filed a reply on 26 April 2001.In a Manifestation filed on 19
February 2001, respondent stated that the petition[6] filed by defendants Umali and
ALPAP has already been denied by the Court in a resolution dated 17 January
2001.On 20 August 2003, the Court resolved to give due course to the petition and
required the parties to submit their respective memoranda within thirty (30) days
from notice. Both petitioners and respondent complied.
ISSUE:
WON RTC of Makati has jurisdiction over the case upon the filing of the original
complaint for damages.
HELD: Yes
It is settled that jurisdiction is conferred by law based on the facts alleged in the
complaint since the latter comprises a concise statement of the ultimate facts
constituting the plaintiff's causes of action. In the case at bar, after examining the
original complaint, we find that the RTC acquired jurisdiction over the case when the
case was filed before it. From the allegations thereof, respondents cause of action is
for damages arising from libel, the jurisdiction of which is vested with the RTC.
Petitioners are confusing jurisdiction with venue. Hon. Florenz D. Regalado

differentiated jurisdiction and venue as follows: (a) Jurisdiction is the authority to
hear and determine a case; venue is the place where the case is to be heard or tried;
(b) Jurisdiction is a matter of substantive law; venue, of procedural law; (c)
Jurisdiction establishes a relation between the court and the subject matter; venue, a
relation between plaintiff and defendant, or petitioner and respondent; and, (d)
Jurisdiction is fixed by law and cannot be conferred by the parties; venue may be
conferred by the act or agreement of the parties.
In the case at bar, the additional allegations in the Amended Complaint that the
article and the caricature were printed and first published in the City of Makati
referred only to the question of venue and not jurisdiction. These additional
allegations would neither confer jurisdiction on the RTC nor would respondents
failure to include the same in the original complaint divest the lower court of its
jurisdiction over the case. Respondents failure to allege these allegations gave the
lower court the power, upon motion by a party, to dismiss the complaint on the
ground that venue was not properly laid.
The rules on venue in Article 360 as follows:

1. Whether the offended party is a public official or a private person, the criminal
action may be filed in the Court of First Instance of the province or city where the
libelous article is printed and first published.
2. If the offended party is a private individual, the criminal action may also be filed in
the Court of First Instance of the province where he actually resided at the time of
the commission of the offense.
3. If the offended party is a public officer whose office is in Manila at the time of the
commission of the offense, the action may be filed in the Court of First Instance of
Manila.
4. If the offended party is a public officer holding office outside of Manila, the action
may be filed in the Court of First Instance of the province or city where he held office
at the time of the commission of the offense.
It is a well-established rule that venue has nothing to do with jurisdiction, except in
criminal actions. Assuming that venue were properly laid in the court where the
action was instituted, that would be procedural, not a jurisdictional impediment. In
fact, in civil cases, venue may be waived. Consequently, by dismissing the case on the
ground of improper venue, the lower court had jurisdiction over the case. Apparently,
the herein petitioners recognized this jurisdiction by filing their answers to the
complaint, albeit, questioning the propriety of venue, instead of a motion to dismiss.
The Court held that dismissal of the complaint by the lower court was proper
considering that the complaint, indeed, on its face, failed to allege neither the
residence of the complainant nor the place where the libelous article was printed and
first published. Nevertheless, before the finality of the dismissal, the same may still
be amended as in fact the amended complaint was admitted, in view of the court a
quos jurisdiction, of which it was never divested. In so doing, the court acted
properly and without any grave abuse of discretion.
Petitioners argument that the lower court has no jurisdiction over the case because
respondent failed to allege the place where the libelous articles were printed and
first published would have been tenable if the case filed were a criminal case. The
failure of the original complaint to contain such information would be fatal because
this fact involves the issue of venue which goes into the territorial jurisdiction of the
court. This is not to be because the case before us is a civil action where venue is not
jurisdictional.
Paglaum Management & Development Corp. and Health Marketing

Technologies, Inc., vs Union Bank of the Philippines, Notary Public John Doe,
and Register of Deeds of Cebu City and Cebu Province, G.R. No. 179018,
June 18, 2012
FACTS:
Paglaum Management and Development Corporation is the registered owner of three

parcels of land located in Cebu. Union Bank extended HealthTech a credit line and to
secure this obligation Paglaum exectuted three Real Estate Mortgages in favor of
Union Bank. The parties entered into a Restructuring Agreement, which states that
any action or proceeding arising out of the transaction shall be commenced in Makati
City, with both parties waiving any other venue. The restructuring was due to
HealthTechs failure to meet its obligations after the Asian financial crisis adversely
affected its business. Despite the restructuring, Heatltech still failed to pay its
obligation which prompted Union Bank to institute foreclosure proceedings. Union
Bank extra-judicially foreclosed the mortgaged properties. The bank filed a Petition
for Consolidation of Title after it won the auction sale.
HealthTech later filed a Complaint for Annulment of Sale and Titles with Damages
and Application for Temporary Restraining Order and Writ of Injunction, praying for:
(a) the issuance of a temporary restraining order, and later a writ of preliminary
injunction, directing Union Bank to refrain from exercising acts of ownership over
the foreclosed properties; (b) the annulment of the extra-judicial foreclosure of real
properties; (c) the cancellation of the registration of the Certificates of Sale and the
resulting titles issued; (d) the reinstatement of PAGLAUMs ownership over the
subject properties; and (e) the payment of damages. The complaint was filed in
Makati City.
Union Bank filed a motion to dismiss of the grounds of, lack of jurisdiction over the
issuance of the injunctive relief, improper venue, and lack of authority if the person
who signed the Complaint. This motion was granted resulting in the dismissal of the
case. Paglaum and HealhTech elevated the case to the CA but was denied.
Now, PAGLAUM and HealthTech argue that: (a) the Restructuring Agreement
governs the choice of venue between the parties, and (b) the agreement on the
choice of venue must be interpreted with the convenience of the parties in mind and
the view that any obscurity therein was caused by Union Bank.
ISSUE:
Whether or not Makati City is the proper venue to assail the foreclosure of the
subject real estate mortgage.
HELD: Yes, Makati City is the proper venue to assail the foreclosure of the subject
real estate mortgage.
In the present case, although the action is a real action, where the properties are
situated in Cebu, Paglaum and Union Bank have stipulated that the venue of any case
arising from their transaction would be in Makati City. The phrase waive any other
venue shows that the choice of venue was only Makati City
According to Section 1of Rule 4 of the Rules of Court: Venue of real actions. Actions
affecting title to or possession of real property, or interest therein, shall be
commenced and tried in the proper court which has jurisdiction over the area
wherein the real property involved, or a portion thereof, is situated.
Forcible entry and detainer actions shall be commenced and tried in the municipal
trial court of the municipality or city wherein the real property involved, or a portion
thereof, is situated
According to Sec 3. Rule 4 of the Rules of Court: Sec. 3. When Rule not applicable.
This Rule shall not apply
a) In those cases where a specific rule or law provides otherwise; or
b) Where the parties have validly agreed in writing before the filing of the action on
the exclusive venue thereof
According to the Supreme Court in Sps. Lantin v. Lantion, the general rules on
venue of actions shall not apply where the parties, before the filing of the action,
have validly agreed in writing on an exclusive venue. The mere stipulation on the
venue of an action, however, is not enough to preclude parties from bringing a case
in other venues. The parties must be able to show that such stipulation is exclusive.
In the absence of qualifying or restrictive words, the stipulation should be deemed as
merely an agreement on an additional forum, not as limiting venue to the specified
place.
Motion for Reconsideration April 17, 2013
Union Bank for the first time, raised three new arguments. First that the
restructuring agreement was null and void because the condition precedent that the
borrower should not be in default, was not complied with. Second even if the
Restructuring Agreement is enforceable, it was only between Health Tech and Union
Bank. PAGLAUM was a party only to the Real Estate Mortgages (which was entered
into before the Restructuring Agreement) and not to the Restructuring Agreement.
Therefore, the venue insofar as it is concerned is exclusively in Cebu City pursuant to
the venue stipulation in the mortgage contracts. Third, that the RTCs assumption of
jurisdiction over the case was without basis because, the Complaint being an accion
reinvindicatoria the assessed value of the real property determines which court has
jurisdiction. It further argues that the complaint does not show the assessed value of
the parcels of land
The Supreme Court denied the Motion for Reconsideration because the issues were
raised for the first time in a motion for reconsideration. All new issues or defences
were deemed waived because they should have been brought up in the first
opportunity

Polytrade Corp. v. Blanco, 30 SCRA 187
FACTS:
Suit before the Court of First Instance of Bulacan on four causes of action to recover
the purchase price of rawhide delivered by plaintiff to defendant. Plaintiff
corporation has its principal office and place of business in Makati, Rizal. Defendant
is a resident of Meycauayan, Bulacan. Defendant moved to dismiss upon the ground
of improper venue. He claims that by contract suit may only be lodged in the courts
of Manila. The Bulacan court overruled him. He did not answer the complaint. In
consequence, a default judgment was rendered against him on September 21, 1966,
thus:
WHEREFORE, judgment is hereby rendered in favor of plaintiff and against

defendant ordering defendant to pay plaintiff the following amounts:
First Cause of Action
P60,845.67, with interest thereon at 1% a month from May 9, 1965 until the
full amount is paid.
Second Cause of Action
P51,952.55, with interest thereon at 1% a month from March 30, 1965 until the
Third Cause of Action
P53,973.07, with interest thereon at 1% a month from July 3, 1965 until the
Fourth Cause of Action
P41,075.22, with interest thereon at 1% a month until the full amount is paid.
In addition, defendant shall pay plaintiff attorney's fees amounting to 25% of the
principal amount due in each cause of action, and the costs of the suit. The amount
of P400.00 shall be deducted from the total amount due plaintiff in accordance with
this judgment.
Defendant appealed.
ISSUE:
WON venue was properly laid in the province of Bulacan where defendant is a
resident.
WON the grant of interest at 1% per month is valid.
WON the grant of attorneys fees is exhorbitant and unconscionable.
HELD:
1. YES. Venue was proper.
Section 2 (b), Rule 4 of the Rules of Court on venue of personal actions triable by
courts of first instance and this is one provides that such "actions may be
commenced and tried where the defendant or any of the defendants resides or may
be found, or where the plaintiff or any of the plaintiffs resides, at the election of the
plaintiff." Qualifying this provision in Section 3 of the same Rule which states that
venue may be stipulated by written agreement "By written agreement of the
parties the venue of an action may be changed or transferred from one province to
another."
Defendant places his case upon Section 3 of Rule 4 just quoted. According to
defendant, plaintiff and defendant, by written contracts covering the four causes of
action, stipulated that: "The parties agree to sue and be sued in the Courts of
Manila." This agreement is valid. Defendant says that because of such covenant he
can only be sued in the courts of Manila. We are thus called upon to shake meaning
from the terms of the agreement just quoted.
No such stipulation appears in the contracts covering the first two causes of action.
The general rule set forth in Section 2 (b), Rule 4, governs, and as to said two causes
of action, venue was properly laid in Bulacan, the province of defendant's residence.
The stipulation adverted to is only found in the agreements covering the third and
fourth causes of action. An accurate reading, however, of the stipulation, "The parties
agree to sue and be sued in the Courts of Manila," does not preclude the filing of
suits in the residence of plaintiff or defendant.
The plain meaning is that the parties merely consented to be sued in Manila.
Qualifying or restrictive words which would indicate that Manila and Manila alone is
the venue are totally absent therefrom. We cannot read into that clause that plaintiff
and defendant bound themselves to file suits with respect to the last two transactions
in question only or exclusively in Manila. It simply is permissive.
The parties solely agreed to add the courts of Manila as tribunals to which they may
resort. They did not waive their right to pursue remedy in the courts specifically
mentioned in Section 2(b) of Rule 4. Renuntiatio non praesumitur.
2. YES. Defendant says that no such stipulation as to right of interest appears in the
sales confirmation orders which provided: "TERMS 60 days after delivery with
interest accruing on postdated cheques beyond 30 days." The flaw in this argument
lies in that the interest and the rate thereof are expressly covenanted in the covering
trust receipts executed by defendant in favor of plaintiff, as follows: "All obligations
of the undersigned under this agreement of trust shall bear interest at the rate of
one per centum (1%) per month from the date due until paid."
To be borne in mind is that the attorneys' fees here provided is not, strictly speaking,
the attorneys' fees recoverable as between attorney and client spoken of and
regulated by the Rules of Court. Rather, the attorneys' fees here are in the nature of
liquidated damages and the stipulation therefor is aptly called a penal clause.
It has been said that so long as such stipulation does not contravene law, morals, or
public order, it is strictly binding upon defendant. The attorneys' fees so provided are
awarded in favor of the litigant, not his counsel. It is the litigant, not counsel, who is
the judgment creditor entitled to enforce the judgment by execution.
The governing law then is Article 2227 of the Civil Code, viz.: "Liquidated damages,
whether intended as an indemnity or a penalty, shall be equitably reduced if they are
iniquitous or unconscionable." For this reason, we do not really have to strictly view
the reasonableness of the attorneys' fees in the light of such factors as the amount
and character of the services rendered, the nature and importance of the litigation,
and the professional character and the social standing of the attorney.
FOR THE REASON GIVEN, the appealed judgment is hereby affirmed, except that
interest granted, in reference to the fourth cause of action, should start from March
24, 1965.
Costs against defendant-appellant. So ordered.
Sweet Lines Inc. v. Hon. Judge Bernardo Teves, Leovigildo Tandog Jr. and
Rogelio Tiro
G.R. No. L-37750, May 19,1978
FACTS:
Respondents Atty. Leovigildo Tandog and Rogelio Tiro bought two tickets in the
branch office of Sweet Lines at Cagayan de Oro City (CDO) for Voyage 90 aswere
scheduled to board in the petitioners vessel M/S Sweet Hope bound for Tagbilaran
City via the port of Cebu. However, upon knowing that the vessel will not anymore
proceed to Bohol, Tandog and Tiro went again to the branch office of Sweet Lines for
proper relocation to M/S Sweet Town. And while on board on the said vessel, the two
were forced to hide at the cargoes section of the ship to avoid the inspection being
conducted by the Philippine Coastguard since the vessel already reached its
passenger capacity. During the trip, Tandog and Tiro alleged that they were exposed
to the scorching heat of the sun and dust coming from the cargoes. They also
claimed that the tickets they bought in CDO were dishonored as they were
constrained to pay for other tickets. The incident prompted Tandog and Tiro to sue
Sweet Lines for damages and for breach of contract of carriage before the CFI of
Misamis Oriental.
Sweet Lines moved to dismiss the case on the ground of improper venue basing the
said dismissal on the condition printed at the back of the tickets that where in any
case, all actions arising out of the conditions and provisions of the said tickets shall
only be filed in the courts in the city of Cebu.
Thereafter, Respondent Judge Teves denied the motion to dismiss filed by Sweet
Lines which thereafter filed a motion for reconsideration from the order of denial but
to no avail. Thus, Sweet Lines filed an instant petition for prohibition for preliminary
injunction to the Supreme Court praying that the respondent judge be restrained
from proceeding further with the case filed by Tandog and Tiro for grave abuse of
discretion amounting to lack of jurisdiction.
Sweet Lines contends that the condition printed on the tickets is valid and
enforceable since Tandog and Tiro acceded to it when they purchased the same in
CDO and took its vessel M/S Sweet Town as a relocation vessel. They also argued
that the condition is binding among the respondents since it is a valid waiver of
venue. On the other hand, respondents countered that the said condition is invalid
considering that the same is not an essential element of the contract of carriage,
being in itself a separate agreement which requires the mutual consent of both
parties. They also claimed that such condition is prepared solely by Sweet Lines by
which they could not refuse, leaving them no choice but to pay and avail the said
tickets out of necessity.
ISSUES:
Whether or not the condition printed at the back of the ticket which limits the venue
of actions arising from the contract of carriage is valid and enforceable
Whether or not the condition constitutes a valid waiver as to venue
HELD:
1. NO. The condition printed on the tickest is void and unenforceable.
The one involved in the case is a contract of adhesion in which the validity and/or
enforceability will have to be determined by peculiar circumstances obtaining in
each case and the nature of the conditions or terms sought to be enforced. Generally,
contracts of adhesion are drafted and prepared only by one party and is sought to be
accepted or adhered by the other party who cannot change the same and who are
thus made to adhere thereto on the take it or leave it basis. Because of such
imbalance nature of this kind of contract, jurisprudence formulated certain
guidelines in the determination of their validity and enforceability in order to
establish justice and fair play by placing the weaker party on equal footing with
another who solely prepared the same.
In the case at bar, the Court ruled that such condition imposed on the ticket by
petitioner Sweet Lines is void and unenforceable for it would be unfair, considering
that Sweet Lines is engaged in inter-land shipping transportation business, to bind
passengers to the terms of conditions printed at the back of the tickets and prejudice
their rights and interests to file suits against the petitioner as it solely imposed that
such actions should only be filed in the courts of Cebu city. And under these
circumstances, it is hardly just and proper to expect the passengers to examine their
tickets received from crowded/congested counters, more often than not during rush
hours, for conditions that may be printed much charge them with having consented
to the conditions, so printed, especially if there are a number of such conditions in
fine print, as in this case.
With regard to the rules on venue, the Court held that:
The condition cited above is subversive of public policy on transfers of venue of

actions. For, although venue may be changed or transferred from one province to
another by agreement of the parties in writing in relation to Rule 4, Section 3, of the
Rules of Court, such agreement will not be held valid where it practically negates the
action of the claimants, such as the private respondents herein. The philosophy
underlying the provisions on transfer of venue of actions is the convenience of the
plaintiffs as well as his witnesses and to promote the ends of justice. Considering the
expense and trouble a passenger residing outside of Cebu City would incur to
prosecute a claim in the City of Cebu, he would most probably decide not to file the
action at all. The condition will thus defeat, instead of enhance, the ends of justice.
Upon the other hand, petitioner has branches or offices in the respective ports of call
of its vessels and can afford to litigate in any of these places. Hence, the filing of the
suit in the CFI of Misamis Oriental, as was done in the instant case, will not cause
inconvenience to, much less prejudice, petitioner.
Petition DENIED. Costs against the petitioner
Republic of the Philippines vs. Sandiganbayan et al., G.R. No. 152154, July 15, 2003
FACTS:
In December 1991, Republic, through the Presidential Commission on Good Government (PCGG), filed a
petition for forfeiture before the Sandiganbayan, pursuant to Republic Act 1379. The petition sought the
declaration of the amount of US$356 million (now estimated to be more than US$658 million inclusive of
interest) deposited in escrow in the PNB, as ill-gotten wealth of the Marcos family. The funds were
previously deposited in Swiss banks under the name of various foreign foundations.
Before the case was set for pre-trial, the Marcos children and then PCGG Chairman Magtanggol Gunigundo
executed a General Agreement and the Supplemental Agreements (hereafter Agreements), dated
December 28, 1993, for a global settlement of the assets of the Marcos family. The Agreement specified in
its whereas clause that the Philippine government had "obtained a judgment from the Swiss Federal Tribunal
on December 21, 1990, that the US$356 million belongs in principle to the Republic of the Philippines
provided certain conditionalities are met...
Subsequently, the Marcos children filed a motion for the approval of said Agreements. While hearings were
being conducted on the said motion, the Republic filed a motion for summary judgment and/or judgment on
the pleadings.
The Sandiganbayan initially granted Republic's motion for summary judgment on the ground that there is
no issue of fact which calls for the presentation of evidence. However, it later reversed itself and denied the
motion for summary judgment on the ground that the original copies of the authenticated Swiss decisions
and their "authenticated translations" have not been submitted to the court.
ISSUES:
1. WON Certiorari lies.

2. WON there can be Summary Judgment
3. WON the Marcoses were able to specifically deny allegations
4. WON the Republic is Guilty of Estopppel by Laches
5. WON the Forfeiture was proper
6. WON Admissions remain binding even if document which contained it is declared defective
7. WON the Non-Joinder of Indispensible Party Deprives the Court of Jurisdiction to Try the
Case
HELD:
Propriety of Certiorari when Remedy of Appeal is Available
1. This case was treated as an exception to the general rule governing petitions for certiorari. Normally,
decisions of the Sandiganbayan are brought before this Court under Rule 45, not Rule 65.[20] But where the
case is undeniably ingrained with immense public interest, public policy and deep historical repercussions,
certiorari is allowed notwithstanding the existence and availability of the remedy of appeal.
2. In all the alleged ill-gotten wealth cases filed by the PCGG, this Court has seen fit to set aside
technicalities and formalities that merely serve to delay or impede judicious resolution.
Propriety of Summary Judgment
3. The respondent Marcoses failed to raise any genuine issue of fact in their pleadings. Thus, on motion of
petitioner Republic, summary judgment should take place as a matter of right.
4. Summary judgment is a judgment which a court may render before trial but after both parties have
pleaded. It is ordered by the court upon application by one party, supported by affidavits, depositions or
other documents, with notice upon the adverse party who may in turn file an opposition supported also by
affidavits, depositions or other documents. This is after the court summarily hears both parties with their
respective proofs and finds that there is no genuine issue between them. (See Auman vs. Estenzo)

5. Summary judgment is sanctioned in this jurisdiction by Section 1, Rule 35 of the 1997 Rules of Civil
Procedure, to wit:
SECTION 1. Summary judgment for claimant.- A party seeking to recover upon a claim, counterclaim, or
cross-claim or to obtain a declaratory relief may, at any time after the pleading in answer thereto has been
served, move with supporting affidavits, depositions or admissions for a summary judgment in his favor
upon all or any part thereof.
6. Summary judgment is proper when there is clearly no genuine issue as to any material fact in the
action. The theory of summary judgment is that, although an answer may on its face appear to tender issues
requiring trial, if it is demonstrated by affidavits, depositions or admissions that those issues are not genuine
but sham or fictitious, the Court is justified in dispensing with the trial and rendering summary judgment for
petitioner.
7. It is the law itself which determines when summary judgment is called for. Under the rules, summary
judgment is appropriate when there are no genuine issues of fact requiring the presentation of evidence in a
full-blown trial. Even if on their face the pleadings appear to raise issue, if the affidavits, depositions and
admissions show that such issues are not genuine, then summary judgment as prescribed by the rules must
ensue as a matter of law.
Marcoses failed to tender any genuine issue in their answer
8. A genuine issue is an issue of fact which calls for the presentation of evidence as distinguished from an
issue which is fictitious and contrived, set up in bad faith or patently lacking in substance so as not to
constitute a genuine issue for trial.
9. The Court finds that respondent Mrs. Marcos and the Marcos children indubitably failed to tender genuine
issues in their answer to the petition for forfeiture. Their defenses of "lack of knowledge for lack of privity"
or "(inability to) recall because it happened a long time ago" or, on the part of Mrs. Marcos, that "the funds
were lawfully acquired" are fully insufficient to tender genuine issues. Respondent Marcoses' defenses were
a sham and evidently calibrated to compound and confuse the issues. Since no genuine issue was raised, the
case became ripe for summary judgment
Marcoses failed to specifically deny allegations
10. In their answer, respondents failed to specifically deny each and every allegation contained in the
petition for forfeiture in the manner required by the rules. As to Mrs Marcos, her assertion that the funds
were lawfully acquired is unaccompanied by any factual support which can prove, by the presentation of
evidence at a hearing, that indeed the funds were acquired legitimately by the Marcos family
11. It is true that one of the modes of specific denial under the rules is a denial through a statement that the
defendant is without knowledge or information sufficient to form a belief as to the truth of the material
averment in the complaint. The question, however, is whether the kind of denial in respondents' answer
qualifies as the specific denial called for by the rules. We do not think so. If an allegation directly and
specifically charges a party with having done, performed or committed a particular act which the
latter did not in fact do, perform or commit, a categorical and express denial must be made. (see
Morales vs. Court of Appeals)
12. It is worthy to note that the pertinent documents attached to the petition for forfeiture were even signed
personally by respondent Mrs. Marcos and her late husband, Ferdinand E. Marcos, indicating that said
documents were within their knowledge. How could respondents therefore claim lack of sufficient
knowledge or information regarding the existence of the Swiss bank deposits and the creation of five groups
of accounts when Mrs. Marcos and her late husband personally masterminded and participated in the

formation and control of said foundations? This is a fact respondent Marcoses were never able to explain.
13. When matters regarding which respondents claim to have no knowledge or information sufficient to
form a belief are plainly and necessarily within their knowledge, their alleged ignorance or lack of
information will not be considered a specific denial. An unexplained denial of information within the control
of the pleader, or is readily accessible to him, is evasive and is insufficient to constitute an effective denial.
Simply put, a profession of ignorance about a fact which is patently and necessarily within the
pleader's knowledge or means of knowing is as ineffective as no denial at all. Respondents' ineffective
denial thus failed to properly tender an issue and the averments contained in the petition for forfeiture were
deemed judicially admitted by them
Negative pregnant
14. The denial of respondents in paragraph 22 of their answer was worded as follows: Respondents
specifically DENY paragraph 23 insofar as it alleges that Respondents clandestinely stashed the country's
wealth in Switzerland and hid the same under layers and layers of foundations and corporate entities for
being false, the truth being that Respondents' aforesaid properties were lawfully acquired.
15. This particular denial is in the nature of a negative pregnant, that is, a denial pregnant with the admission
of the substantial facts in the pleading responded to which are not squarely denied. It was in effect an
admission of the averments it was directed at. Stated otherwise, a negative pregnant is a form of negative
expression which carries with it an affirmation or at least an implication of some kind favorable to the
adverse party. It is a denial pregnant with an admission of the substantial facts alleged in the pleading.
Where a fact is alleged with qualifying or modifying language and the words of the allegation as so qualified
or modified are literally denied, has been held that the qualifying circumstances alone are denied while the
fact itself is admitted.
16. The denial contained in paragraph 22 of the answer was focused on the averment in paragraph 23 of the
petition for forfeiture that "Respondents clandestinely stashed the country's wealth in Switzerland and hid
the same under layers and layers of foundations and corporate entities." Paragraph 22 of the respondents'
answer was thus a denial pregnant with admissions of the following substantial facts: (1) the Swiss bank
deposits existed and (2) that the estimated sum thereof was US$356 million as of December, 1990.
17. Therefore, the allegations in the petition for forfeiture on the existence of the Swiss bank deposits in the
sum of about US$356 million, not having been specifically denied by respondents in their answer, were
deemed admitted by them pursuant to Section 11, Rule 8 of the 1997 Revised Rules on Civil Procedure:
Material averment in the complaint, xxx shall be deemed admitted when not specifically denied.
Motion for Summary Judgment allowed at any stage of the litigation
18. Petitioner moved for summary judgment after pre-trial and before its scheduled date for presentation of
evidence. Respondent Marcoses argue that, by agreeing to proceed to trial during the pre-trial conference,
petitioner "waived" its right to summary judgment.
19. The phrase "anytime after the pleading in answer thereto has been served" in Section 1, Rule 35 of our
Rules of Civil Procedure means "at any stage of the litigation." Whenever it becomes evident at any stage of
the litigation that no triable issue exists, or that the defenses raised by the defendant(s) are sham or frivolous,
plaintiff may move for summary judgment. A contrary interpretation would go against the very objective of
the Rule on Summary Judgment which is to "weed out sham claims or defenses thereby avoiding the
expense and loss of time involved in a trial."
20. Petitioner Republic could validly move for summary judgment any time after the respondents' answer
was filed or, for that matter, at any subsequent stage of the litigation. The fact that petitioner agreed to

proceed to trial did not in any way prevent it from moving for summary judgment, as indeed no genuine
issue of fact was ever validly raised by respondent Marcoses.
Republic not Guilty of Estopppel by Laches
21. Estoppel by laches is the failure or neglect for an unreasonable or unexplained length of time to do that
which, by exercising due diligence, could or should have been done earlier, warranting a presumption that
the person has abandoned his right or declined to assert it. In effect, therefore, the principle of laches is one
of estoppel because "it prevents people who have slept on their rights from prejudicing the rights of third
parties who have placed reliance on the inaction of the original parties and their successors-in-interest".
22. Records show that petitioner was in fact never remiss in pursuing its case against respondent Marcoses
through every remedy available to it, including the motion for summary judgment.
23. In invoking the doctrine of estoppel by laches, respondents must show not only unjustified inaction but
also that some unfair injury to them might result unless the action is barred.
24. But even assuming for the sake of argument that laches had already set in, the doctrine of estoppel or
laches does not apply when the government sues as a sovereign or asserts governmental rights. Nor can
estoppel validate an act that contravenes law or public policy.
Propriety of Forfeiture
25. The law raises the prima facie presumption that a property is unlawfully acquired, hence subject to
forfeiture, if its amount or value is manifestly disproportionate to the official salary and other lawful income
of the public officer who owns it. (See Sections 2 and 6 of Republic Act No. 1379)
26. The total accumulated salaries of Mr and Mrs Marcos amounted to P2,319,583.33. Converted to U.S.
dollars on the basis of the corresponding peso-dollar exchange rates prevailing during the applicable period
when said salaries were received, the total amount had an equivalent value of US$304,372.43. Since the
President and his family were constitutionally prohibited from receiving any other emolument during their
tenure, their only known lawful income of $304,372.43 can therefore legally and fairly serve as basis for
determining the existence of a prima facie case of forfeiture of the Swiss funds.
Admissions remain binding even if document which contained it is declared defective
27. The General and Supplemental Agreements were declared by the court to be null and void. Respondent
therefore insist that nothing in those agreements could thus be admitted in evidence against them.
28. The declaration of nullity of said agreements was premised on the following constitutional and statutory
infirmities: (1) the grant of criminal immunity to the Marcos heirs was against the law; (2) the PCGG's
commitment to exempt from all forms of taxes the properties to be retained by the Marcos heirs was against
the Constitution; and (3) the government's undertaking to cause the dismissal of all cases filed against the
Marcoses pending before the Sandiganbayan and other courts encroached on the powers of the judiciary.
The reasons relied upon by the Court never in the least bit even touched on the veracity and truthfulness of
respondents' admission with respect to their ownership of the Swiss funds.
29. The declaration of nullity of the two agreements rendered the same without legal effects but it did not
detract from the admissions of the respondents contained therein. The admissions made in said agreements
remain binding on the respondents
30. A written statement is nonetheless competent as an admission even if it is contained in a document which
is not itself effective for the purpose for which it is made, either by reason of illegality, or incompetency of a

party thereto, or by reason of not being signed, executed or delivered. Accordingly, contracts have been held
as competent evidence of admissions, although they may be unenforceable.
Judicial Admission
31. An admission made in the pleadings cannot be controverted by the party making such admission and
becomes conclusive on him, and that all proofs submitted by him contrary thereto or inconsistent therewith
should be ignored, whether an objection is interposed by the adverse party or not.
32. In the absence of a compelling reason to the contrary, respondents' judicial admission of ownership of
the Swiss deposits is definitely binding on them.
Admission by Privies and Admission by Co-Parties
33. Section 31, Rule 130 of the Rules of Court, provides: Where one derives title to property from another,
the act, declaration, or omission of the latter, while holding the title, in relation to the property, is evidence
against the former
34. The declarations of a person are admissible against a party whenever a "privity of estate" exists between
the declarant and the party, the term "privity of estate" generally denoting a succession in rights.
Consequently, an admission of one in privity with a party to the record is competent. Without doubt, privity
exists among the respondents in this case. And where several co-parties to the record are jointly interested in
the subject matter of the controversy, the admission of one is competent against all.
Non-Joinder of Indispensible Party Does Not Deprive Court of Jurisdiction to Try the Case
35. Republic did not err in not impleading the foreign foundations. Section 7, Rule 3 of the 1997 Rules of
Civil Procedure, provides for the compulsory joinder of indispensable parties. Generally, an indispensable
party must be impleaded for the complete determination of the suit. However, failure to join an
indispensable party does not divest the court of jurisdiction since the rule regarding indispensable
parties is founded on equitable considerations and is not jurisdictional. Thus, the court is not divested of
its power to render a decision even in the absence of indispensable parties, though such judgment is not
binding on the non-joined party.
36. There are two essential tests of an indispensable party: (1) can relief be afforded the plaintiff without the
presence of the other party? and (2) can the case be decided on its merits without prejudicing the rights of
the other party? There is, however, no fixed formula for determining who is an indispensable party; this can
only be determined in the context and by the facts of the particular suit or litigation.
37. The foreign foundations were set up to conceal the illegally acquired funds of the Marcos spouses. Thus,
they were simply the res in the action for recovery of ill-gotten wealth and did not have to be impleaded for
lack of cause of action or ground to implead them.
38. As to corporations organized with ill-gotten wealth, but are not themselves guilty of misappropriation,
fraud or other illicit conduct - in other words, the companies themselves are not the object or thing involved
in the action, the res thereof - there is no need to implead them either. Indeed, their impleading is not proper
on the strength alone of their having been formed with ill-gotten funds, absent any other particular
wrongdoing on their part
39. Assuming arguendo, however, that the foundations were indispensable parties, the failure of petitioner to
implead them was a curable error. The Rules of Court prohibit the dismissal of a suit on the ground of non-
joinder or misjoinder of parties and allows the amendment of the complaint at any stage of the proceedings,
through motion or on order of the court on its own initiative.

Failure to submit authenticated translations of the Swiss decision not fatal to Republic's cause
40. The presentation of the authenticated translations of the original copies of the Swiss decision was not de
rigueur for the Sandiganbayan to make findings of fact and reach its conclusions. In short, the
Sandiganbayan's decision was not dependent on the determination of the Swiss courts. For that matter,
neither is this Court's.
41. The release of the Swiss funds held in escrow in the PNB is dependent solely on the decision of this
jurisdiction that said funds belong to the petitioner Republic. What is important is our own assessment of the
sufficiency of the evidence to rule in favor of either petitioner Republic or respondent Marcoses. In this
instance, despite the absence of the authenticated translations of the Swiss decisions, the evidence on hand
tilts convincingly in favor of petitioner Republic.
42. The respondent Marcoses failed to justify the lawful nature of their acquisition of the said assets. Hence,
the Swiss deposits should be considered ill-gotten wealth and forfeited in favor of the State in accordance
with Section 6 of RA 1379
Philtranco Services Enterprises, Inc. v. Felix Paras and

Inland Trailways, Inc. and Hon. Court of Appeals
G.R. No. 161909, April 25, 2012
FACTS:
Felix Paras, on his way home to Manila from Bicol Region, he boarded a bus owned
and operated by Inland Trailways, Inc. While the said bus was travelling along
Maarlika Highway, Tiaong Quezon, around 3:50am of 09 February 1987, it was
bumped at the rear by another bus owned and operated by Philtranco Service
Enterprises, Inc. As a result of the strong and violent impact, the Inland bus was
pushed forward and smashed into a cargo truck parked along the outer right portion
of the highway and the shoulder thereof.
The accident brought considerable damage to the vehicles, caused physical injuries
to the passengers and crew of the two buses, and took the life of Inlands driver.
Paras also suffered from contusions, dislocation of the hip, and fractures. Inland
refused to give financial assistance to Paras, and the latter filed a complaint for
breach of contract of carriage against Inland. In its defense, Inland claims that the
proximate cause of the injuries of Paras was the bus of Philtranco. Inland, with leave
of court, filed a third party complaint against Philtranco and its bus driver.
The RTC ordered Philtranco and its driver to pay damages to Paras. All parties
appealed to the CA which affirmed the liability of Philtranco and its driver. It
awarded moral damages and exemplary damages.
ISSUE:
Whether or not the award of moral damages and temperate damages is improper.
HELD: NO.
There is no issue that the proximate cause of the injury of Paras and material
damage to Inland is caused by the negligence of Philtranco and its driver.
1. Award of moral damages proper.
As a general rule, indeed, moral damages are not recoverable in an action predicated
on a breach of contract. By way of exception, it may be recoverable even if an action
is predicated on breach of contract where (a) the mishap results in death of a
passenger, and (b) where the common carrier has been guilty of fraud or bad faith.
In this case, even if this action does not fall under either exception, the award is
proper. Undeniably, Inland filed its third-party complaint against Philtranco and its
driver in order to establish in this action that they, instead of Inland, should be
directly liable to Paras for the physical injuries he had sustained because of their
negligence. The apparent objective of Inland was to obtain a different relief whereby
the third-party defendants would be held directly, fully and solely liable to Paras and
Inland for whatever damages each had suffered from the negligence committed by
Philtranco and its driver. In other words, Philtranco and its driver were charged here
as joint tortfeasors who would be jointly and severally be liable to Paras and Inland.
Impleading Philtranco and its driver under a third party complaint is correct. The
impleader of new parties under this rule is proper only when a right to relief exists
under the applicable substantive law. The substantive law backing Inlands claim is
Art. 2176 and Art. 2180 of the Civil Code, which deals with quasi-delicts and
vicarious liability of employers over the acts or omissions of their employees,
respectively.

The institution of the third party complaint is also properly made. The requisites for
a third-party action are:
(1) The party to be impleaded must not yet be a party to the action;
(2) that the claim against the third-party defendant must belong to the original
defendant;
(3) the claim of the original defendant against the third-party defendant must be
based upon the plaintiffs claim against the original defendant; and,
(4) the defendant is attempting to transfer to the third-party defendant the liability
asserted against him by the original plaintiff.
Paras cause of action against Inland (breach of contract of carriage) did not need to
be the same as the cause of action of Inland against Philtranco and its driver (tort or
quasi-delict) in the impleader. The third-party claim need not be based on the same
theory as the main claim.
Nor was it a pre-requisite for attachment of the liability to Philtranco and its driver
that Inland be first declared and found liable to Paras for the breach of its contract of
carriage with him as precisely, the theory of defendant is that it is the third party
defendant, and not he, who is directly liable to plaintiff.
2. Award of temperate damages proper.
Actual damages, to be recoverable, must not only be capable of proof, but must
actually be proved with a reasonable degree of certainty. The reason is that the court
cannot simply rely on speculation, conjecture or guesswork in determining the fact
and amount of damages, but there must be competent proof of the actual amount of
loss, credence can be given only to claims which are duly supported by receipts.
In this case, although both Paras and Inland both suffered from the negligence of
Philtranco and its driver, they were unable to show sufficient proof as to the actual
amount of loss they sustained. Nevertheless, the award of Temperate Damages was
proper, per Art. 2224 of the Civil Code, which states that:
Temperate or moderate damages, which are more than nominal but less than
compensatory damages, may be recovered when the court finds that some pecuniary
loss has been suffered but its amount cannot, from the nature of the case, be proved
with certainty.
Temperate damages are allowed because there are cases where from the nature of
the case, definite proof of pecuniary loss cannot be offered, although the court is
convinced that there has been such loss. Such obtains in this case.
It is relevant to clarify that awarding the temperate damages (for the substantial
pecuniary losses corresponding to Paras surgeries and rehabilitation and for the
irreparability of Inlands damaged bus) and the actual damages to compensate lost
earnings and costs of medicines give rise to no incompatibility. These damages cover
distinct pecuniary losses suffered by Paras and Inland, and do not infringe the
statutory prohibition against recovering damages twice for the same act or omission.
3. Other issues:
Paras loss of earning capacity must be compensated.
According to Article 2205, (1), of the Civil Code, damages may be recovered for loss
or impairment of earning capacity in cases of temporary or permanent personal
injury. Indeed, indemnification for damages comprehends not only the loss suffered
(actual damages or damnum emergens) but also the claimants lost profits
(compensatory damages or lucrum cessans). Even so, the formula that has gained
acceptance over time has limited recovery to net earning capacity. The premise is
obviously that net earning capacity is the persons capacity to acquire money, less the
necessary expense for his own living.
Increase in award of Attorneys fees.
Although it is a sound policy not to set a premium on the right to litigate, we

consider the grant to Paras and Inland of reasonable attorneys fees warranted. Their
entitlement to attorneys fees was by virtue of their having been compelled to litigate
or to incur expenses to protect their interests, as well as by virtue of the Court now
further deeming attorneys fees to be just and equitable.
Legal interest on the amounts awarded.
Pursuant to Eastern Shipping Lines v. Court of Appeals (old rule), legal interest at
the rate of 6% per annum accrues on the amounts adjudged reckoned from July 18,
1997, the date when the RTC rendered its judgment; and legal interest at the rate of
12% per annum shall be imposed from the finality of the judgment until its full
satisfaction, the interim period being regarded as the equivalent of a forbearance of
credit.

FELIX MARTOS, ET. AL. VS. NEW SAN JOSE BUILDERS, INC., G.R. NO.
192650, OCTOBER 24, 2012.
FACTS:
New San Jose Builders, Inc. (respondent) is a domestic corporation engaged in the
construction of road, bridges, buildings, and low cost houses primarily for the
government. One of the projects of respondent is the San Jose Plains Project (SJPP),
located in Montalban, Rizal. SJPP, which is also known as the "Erap City" calls for the
construction of low cost housing, which are being turned over to the National
Housing Authority to be awarded to deserving poor families.
Sometime in 2000, respondent was constrained to suspend most of the works on the
SJPP project due to lack of funds of the National Housing Authority. The workers
were, thus, informed that many of them would be laid off and the rest would be
reassigned to other projects. Juan Villaber, Terso Garay, Rowell Batta, Pastor Pantig,
Rafael Villa, and Melvin Garay were laid off. On the other hand, Felix Martos
(Martos), Ariel Dominguez, Greg Bisonia, Allan Caballera, Orlando Limos, Mandy
Mamalateo, Eric Castrence, Anthony Molina, and Roy Silva were among those who
were issued new appointment papers to their respective assignments, indicating
therein that they were project employees. However, they refused to sign the
appointment papers as project employees and subsequently refused to continue to
work. Three Complaints were consolidated and assigned to the Labor Arbiter (LA).
Ruling of the Labor Arbiter
On May 23, 2003, the LA handed down a decision declaring, that Martos was illegally
dismissed and entitled to separation pay, backwages and other monetary benefits;
and, dismissing, without prejudice, the claims of the other complainants
(petitioners).
Ruling of the NLRC

Both parties appealed the LA decision to the NLRC. And on July 30, 2008, the NLRC
resolved the appeal by dismissing the one filed by respondent and partially granting
that of the other petitioners. Respondents were ordered to pay respondents their
salary differentials, service incentive leave pay, and 13th month pay, using, as basis,
the computation made on the claims of complainant Felix Martos.
Ruling of the CA
After the denial of its motion for reconsideration, respondent filed before the CA a
petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, as
amended, raising the issue of commission of grave abuse of discretion by NLRC as to
holding Martos regular employee, as to reviving complaints of the petitioners despite
failure to verify the same, and as to granting relief in favor of complainants who did
not even render service. On July 31, 2009, the CA rendered a decision reversing and
setting aside the Decision and Resolution of the NLRC and reinstating the Decision
of the LA.
The CA found that the NLRC committed grave abuse of discretion in reviving the
complaints of petitioners despite their failure to verify the same. Out of the 102
complainants, only Martos verified the position paper and his counsel never offered
any explanation for his failure to secure the verification of the others. The CA also
held that the NLRC gravely abused its discretion when it took cognizance of
petitioners appeal because Rule 41, Section 1(g) of the 1997 Rules of Civil
Procedure, as amended, which is suppletory, provides that no appeal may be taken
from an order dismissing an action without prejudice.
With respect to Martos, the CA ruled that he was a regular employee of respondent
and his termination constitute constructive illegal dismissal. It explained that Martos
should have been considered a regular employee because there was no indication
that he was merely a project employee when he was hired. To show otherwise,
respondent should have presented his employment contract for the alleged specific
project and the successive employment contracts for the different projects or phases
for which he was hired. In the absence of such document, he could not be considered
a project employee because his work was necessary and desirable to the
respondents usual business and that he was not required to sign any employment
contract fixing a definite period or duration of his engagement. Notwithstanding, the
respondent also failed to report the termination of Martos supposed project
employment to the Department of Labor and Employment, as required under
Department Order No. 19.
ISSUES:
I. Whether or not the CA is correct in dismissing the complaints filed by those
petitioners who failed to verify their position papers?
II. Whether or not Martos should be reinstated?
HELD: Petition is denied.
Failure to verify is dismissible
I. YES. The absence of a proper verification is cause to treat the pleading as

unsigned and dismissible. The verification requirement is significant, as it is intended
to secure an assurance that the allegations in the pleading are true and correct and
not the product of the imagination or a matter of speculation, and that the pleading
is filed in good faith. Verification is deemed substantially complied with when, as in
this case, one who has ample knowledge to swear to the truth of the allegations in
the complaint or petition signs the verification, and when matters alleged in the
petition have been made in good faith or are true and correct. The lone signature of
Martos would have been sufficient if he was authorized by his co-petitioners to sign
for them. Unfortunately, petitioners failed to adduce proof that he was so authorized.
Considering that the dismissal of the other complaints by the LA was without
prejudice, the other complainants should have taken the necessary steps to rectify
their procedural mistake after the decision of the LA was rendered. They should have
corrected this procedural flaw by immediately filing another complaint with the
correct verification this time. Surprisingly, they did not even attempt to correct this
technical blunder. Worse, they committed the same procedural error when they filed
their appeal with the NLRC. The petitioners were given a chance by the CA to
comply with the Rules when they filed their motion for reconsideration, but they
refused to do so. Despite the opportunity given to them to make all of them sign the
verification and certification of non-forum shopping, they still failed to comply. Thus,
the CA was constrained to deny their motion and affirm the earlier resolution.
Reinstatement not proper
II. NO. Reinstatement being sought by him is no longer practicable because of

strained relation between the parties. Indeed, he can no longer question this fact.
This issue was never raised or taken up on appeal before the NLRC. It was only after
he lost the appeal in the CA that he raised it. It is only but fair to award separation
pay in lieu of reinstatement. In addition to his separation pay, Martos is also entitled
to payment of full backwages, 13th month pay, service incentive leave pay, and
attorneys fees. The accepted doctrine is that separation pay may avail in lieu of
reinstatement if reinstatement is no longer practical or in the best interest of the
parties. Separation pay in lieu of reinstatement may likewise be awarded if the
employee decides not to be reinstated. Under the doctrine of stained relations, the
payment of separation pay is considered an acceptable alternative to reinstatement
when the latter opinion is no longer desirable or viable. On one hand, such payment
liberates the employee from what could be highly oppressive work environment. On
the other hand, it release the employer from the grossly unpalatable obligation of
maintaining in its employ a worker it could no longer trust.
Georgia T. Estel vs. Heirs of Recaredo P. Diego, Sr. G.R. No. 174082, January
16, 2012
FACTS:
A Complaint for Forcible Entry, Damages and Injunction with Application for
Temporary Restraining Order filed by Recaredo P. Diego, Sr., and Recaredo R. Diego,
Jr. with the Municipal Trial Court in Cities (MTCC) of Gingoog City, Misamis Oriental.
They alleged that:
1. On April 16, 1991, they entered into a contract of sale of a 306 squaremeter
parcel of land with Georgia Estel

2. After receiving the amount of P17,000.00 as downpayment, Estel delivered the
physical and material possession of the subject property to them;
3. They had been in actual, adverse and uninterrupted possession of the lot;
4. July 20, 1995, Estel, together with her two sons and five other persons, uprooted
the fence surrounding the disputed lot, after which they entered its premises and
then cut and destroyed the trees and plants found therein;
5. The Diegos prayed for the restoration of their possession, for the issuance of a
permanent injunction against Estel as well as payment of damages, attorneys fees
and costs of suit.
On July 26, 1995, the MTCC issued a Temporary Restraining Order against Estel and
any person acting in her behalf.
In her Answer with Special/Affirmative Defenses and Counterclaims, she denied the
material allegations in the Complaint, and contended that:
1. The Diegos were never in possession of the lot;
2. Estel had the full possession and absolute ownership of the lot
3. The agreement she entered into with the Diegos for the sale of the lot had been
abrogated; she even offered to return the amount she received from them, but they
refused to accept
4. The subject of the deed of sale between her and the Diegos and what has been
delivered to respondents was actually Lot 16 which is adjacent to the disputed Lot
19;
5. That the improvements found on the subject lot were not destroyed, and in fact,
any improvements therein were planted by her parents.
MTCC rendered a Decision dismissing Estels counterclaim and ordered her, her
agents and representatives: 1. To vacate the premises of the land in question and
return the same to the plaintiffs; 2. To pay plaintiffs P100.00 a month as rentals ;
P5,000.00 representing the value of the fence and plants damaged by the defendants
as actual damages; P20,000.00 as and for attorneys fees; P2,000.00 for litigation
expenses.
Estel appealed to the RTC of Gingoog City. the RTC rendered its Decision affirming
the decision of the MTC
She then filed a petition for review with the CA. The CA promulgated its Decision
which affirmed the Decision of the RTC. She filed a Motion for Reconsideration, but
the CA denied it. She therefore appealed before the Supreme Court.
ISSUES:
1. WON MTCC acquired jurisdiction over the subject matter of the complaint on the
grounds that the Diegos failed to allege the location of the disputed parcel of land in
their complaint, and that there was failure to specifically allege facts constitutive of
forcible entry in the complaint.
2. WON the defects in the Verification and Certificate of Non-forum Shopping in the
Complaint will make it an unsigned pleading.
HELD:
Regarding the first issue: No, the Supreme Court does not agree with Estel.
Estel did not raise the issue of jurisdiction or venue in her Answer filed with the
MTCC. Even if the geographical location of the subject property was not alleged in
the Complaint, she failed to seasonably object to it in her Affirmative Defense, and

even actively participated in the proceedings before the MTCC. Thus, she is already
estopped from raising the said issue in the CA or before this Court.
Since the Complaint is for forcible entry, the jurisdiction over the subject matter of
the case is, thus, upon the MTCC of Gingoog City. The question whether or not the
suit was brought in the place where the land in dispute is located was no more than a
matter of venue. Since there was no objection on the part of Estel, her objection
became a pure technicality.
As to the Diegos failure to allege facts constitutive of forcible entry, it is settled that
in actions for forcible entry, two allegations are mandatory for the municipal court to
acquire jurisdiction: the plaintiff must allege his prior physical possession of the
property, and he must also allege that he was deprived of his possession by means of
force, intimidation, threats, strategy, and stealth.
In this case, it is clear that the Diegos sufficiently alleged in their Complaint the
material facts constituting forcible entry, as they explicitly claimed that they had
prior physical possession of the subject property since its purchase from Estel. They
also particularly described in their complaint how Estel, her two sons and five other
persons, encroached upon the subject property and dispossessed them of the same.
As to the second issue:

The alleged defect in the verification was not raised before the MTCC. Even granting
that this matter was properly raised before the court a quo, the Court finds that
there is no procedural defect that would have warranted the outright dismissal of
respondents complaint as there is compliance with the requirement regarding
verification. A reading of the Diegos verification reveals that they complied with the
the rule on verification; they confirmed that they had read the allegations in the
Complaint which were true and correct based on their personal knowledge.
Verification is deemed substantially complied with when one who has ample
knowledge to swear to the truth of the allegations in the complaint or petition signs
the verification, and when matters alleged in the petition have been made in good
faith or are true and correct.
As to the Diegos certification on nonforum shopping, a reading of their

Verification/Certification reveals that they, in fact, certified therein that they have not
commenced any similar action before any other court or tribunal and to the best of
their knowledge no such other action is pending therein. The only missing statement
is their undertaking that if they should thereafter learn that the same or similar
action has been filed or is pending, they shall report such fact to the court. This,
notwithstanding, the Court finds that there has been substantial compliance on the
part of respondents.
It is settled that with respect to the contents of the certification against forum
shopping, the rule of substantial compliance may be availed of because the
requirement of strict compliance with the provisions regarding the certification of
nonforum shopping merely underscores its mandatory nature in that the certification
cannot be altogether dispensed with or its requirements completely disregarded.
Based on the foregoing, the petition was denied.

Pascual and Santos, Inc. v. The Members of the Tramo Wakas Neighborhood
Association, Inc., G.R. No. 144880,
November 17, 2004
FACTS:
The Members of Tramo Wakas Neighborhood Association, represented by Dominga

Magno (respondents), lodged before the Presidential Action Center a petition praying
that ownership over three parcels of land be awarded to them. In their petition,
respondents alleged that petitioner claims ownership of the subject lots which they
have openly, peacefully and continuously occupied since 1957. The petition was
referred to the Land Management Bureau (LMB) for investigation and hearing. The
petition was eventually decided by the Director of the LMB in favor of the
respondents. Its Motion for Reconsideration having been denied, petitioner lodged
an appeal before the Office of the DENR Secretary, which was subsequently
dismissed for lack of merit and affirmed the decision of the Director of the LMB.
Petitioners appeal to the Office of the President was likewise dismissed.
Petitioner subsequently filed its Petition for Review with the CA, praying that
judgment be rendered (1) reversing and setting aside the OP Decision and the
DENR, and (2) declaring the subject lots as no longer forming part of the public
domain and have been validly acquired by petitioner; or in the alternative, (1)
allowing it to present additional evidence in support of its claim to the subject lots,
(2) reversing and setting aside the aforementioned Decisions and Order of the OP
and the DENR, and (3) declaring the subject lots as no longer forming part of the
public domain and have been validly acquired by petitioner.
By Resolution, the CA dismissed the appeal due to infirm Verification and

Certification of non-forum shopping. The Verification and Certification of non-forum
shopping was signed merely by Estela Lombos and Anita Pascual who allege that
they are the duly authorized representatives of petitioner corporation, without
showing any proof whatsoever of such authority. For another, and importantly, the
petition for review was filed a day after the period petitioner corporation was
supposed to do so. Petitioner filed a Motion for Reconsideration, arguing that there
was no showing that the persons acting on its behalf were not authorized to do so.
Attached to the Motion was a Secretary's Certificate showing that petitioner's Board
of Directors approved a Resolution on appointing Estela Lombos and Anita Pascual,
incumbent directors of the corporation, as its duly authorized representatives who
may sign all papers, execute all documents, and do such other acts as may be
necessary to prosecute the petition for review. CA denied the MR. Hence, petitioner
filed a Petition for Review on Certiorari to the SC.
ISSUE(s):
(1) WON THE PERSONS WHO EXECUTED THE VERIFICATION AND
CERTIFICATION OF NON-FORUM SHOPPING ATTACHED TO PSI'S
MANIFESTATION/PETITION FOR REVIEW FILED WITH THE COURT OF APPEALS
WERE AUTHORIZED TO DO SO.
RULING(s):
(1) YES. The requirement under the Rules of Court that the petitioner should sign the
certificate of non-forum shopping applies even to corporations, considering that the
mandatory directives of the Rules of Court make no distinction between natural and
juridical persons. It is undisputed that when the petition for certiorari was filed with
the CA, there was no proof attached thereto that Lombos and Pascual were
authorized to sign the verification and non-forum shopping certification. Subsequent
to the CA's dismissal of the petition, however, petitioner filed a motion for
reconsideration to which it attached a certificate issued by its board secretary
stating that on February 11, 2000 or prior to the filing of the petition, Lombos and
Pascual had been authorized by petitioner's board of directors to file the petition
before the CA. This Court has ruled that the subsequent submission of proof of
authority to act on behalf of a petitioner corporation justifies the relaxation of the
Rules for the purpose of allowing its petition to be given due course. It must also be
kept in mind that while the requirement of the certificate of non-forum shopping is
mandatory, nonetheless the requirements must not be interpreted too literally and
thus defeat the objective of preventing the undesirable practice of forum shopping.
ELSA D. MEDADO, petitioner, vs. HEIRS OF THE LATE ANTONIO CONSING,

as represented by DR. SOLEDAD CONSING, respondents.
G.R. No. 186720. February 8, 2012.
FACTS:
Sometime in 1996, Spouses Meritus Rey Edado and, herein petitioner, Elsa D.
Medado and the estate of the late Antonio Consing (Estate of Consing), as
represented by Soledad Consing, executed Deeds of Sale with Assumption of
Mortgage, wherein the latter sold to the said spouses the property known as
Hacienda Sol situated in Cadiz City. As part of the deal, Spouses Medado assumed
the loan obligation of the Estate of Consing with the Philippine National Bank (PNB).
Subsequently, however, the Estate of Consing offered the subject property to the
government through the Department of Agrarian Reforms Voluntary Offer to Sell
(VOS) Program. The Estate of Consing instituted an action for rescission and
damages (Civil Case No. 00-11320) with the Regional Trial Court (RTC) Branch 44 of
Bacolod City against the Spouses Medado, PNB and the Register of Deeds (RD) of
Cadiz City, due to alleged failure of the Spouses Medado to meet the conditions in
their agreement.
During the pendency of the Civil Case No. 00-11320, the Land Bank of the
Philippines (LBP) issued in favor of the Estate of Consing a certificate of deposit of
cash and agrarian reform bonds, as compensation for the property covered by the
VOS.
Because of the fear of the Spouses Medado that the whole proceeds of the VOS
might be released to the Estate of Consing, since the former believed that they the
ones entitled to such proceeds by virtue of the Deeds of Assignment with Assumption
of Mortgage, Spouses Medado filed an action for injunction with prayer for the
issuance of temporary restraining order (TRO) with the RTC, Branch 60 of Cadiz City
(Civil Case No. 797-C). Spouses Medado prayed that a writ of prohibitory injunction
be issued to restrain LBP from releasing the remaining amount of the VOS proceeds
to the Estate of Consing, and restraining the Estate of Consing from receiving these
proceeds; and also prayed for the issuance of a writ of mandatory injunction to
compel LBP to release the remaining amount of the VOS to the spouses.
The RTC, Branch 60 of Cadiz City ruled in favor of Spouses Medado under Civil Case
No. 797-C. And despite the motion for reconsideration filed by the Estate of Consing,
the said court issued the writs prayed for by Spouses Medado. Thus, the Heirs of the
late Antonio Consing (Heirs of Consing) withdrew their motion for reconsideration
and went to the Court of Appeals (CA) and filed a petition for certiorari. It should be
noted that the petition filed by the Heirs of Consing was signed only by Soledad
Consing and not by all of the petitioners in the CA.
The appellate court ruled in favor the Estate of Consing. The subsequent motion for
reconsideration filed by Spouses Medado was denied by the CA. Hence, the present
petition to the Supreme Court (SC).
ISSUES:
1) Whether or not the CA was correct in admitting the petition for certiorari despite
the fact that said petition was defective because of the deficiencies in the verification
and certification against forum shopping. (Petition was signed only by Soledad
Consing)
(2) Whether or not the CA was correct in admitting the petition for certiorari of the
Heirs of Consing although no motion for reconsideration was filed with the lower
court which rendered the judgment being assailed.
(3) Whether or not there exists a violation of the rule against forum shopping in this
case.
HELD:
(1) Yes, the CA correctly admitted the petition despite the mentioned defect. The
Court said that by looking at the records, Soledad Consing possesses a Special Power
of Attorney (SPA) wherein Soldedad Consing was given the authority to protect, sue,
prosecute, defend and adopt whatever action necessary and proper relative and with
respect to her co-heirs right, interest and participation over the subject property.
According to the Court, the authority of Soledad includes the filing of an appeal
before the CA, including the execution of a verification and certification against
forum shopping therefor, being acts necessary to protect, sue, prosecute, defend
and adopt whatever action necessary and proper in relation to their rights over the
subject properties.
The Court further said that the verification requirement is simply intended to secure
an assurance that the allegations in the pleading are true and correct, and not the
product of the imagination or a matter of speculation, and that the pleading is filed in
good faith and that where the petitioners are immediate relatives, who share a
common interest in the property subject of the action, the fact that only one of the
petitioners executed the verification or certification of forum shopping will not deter
the court from proceeding with the action.
Furthermore, it was held that verification of a pleading is a formal, not a

jurisdictional, requirement intended to secure the assurance that the matters alleged
in a pleading are true and correct. Thus, the Court may simply order the correction
of unverified pleadings or act on them and waive strict compliance with the Rules. It
is deemed substantially complied with when one who has ample knowledge to swear
to the truth of the allegations in the complaint or petition signs the verification; and
when matters alleged in the petition have been made in good faith or are true and
correct.
(2) Yes. Although as a general rule, a special civil action for certiorari cannot be filed
without filing a motion for reconsideration with the court which the rendered the
decision sought to be assailed, this rule admits of exceptions such as:
a. where the order is a patent nullity because the court a quo had no jurisdiction;
b. where the questions raised in the certiorari proceeding have been duly raised and
passed upon by the lower court, or are the same as those raised and passed upon in
the lower court;
c. where there is an urgent necessity for the resolution of the question, and any
further delay would prejudice the interests of the Government or of the petitioner, or
the subject matter of the action is perishable;
d. where, under the circumstances, a motion for reconsideration would be useless;
e. where the petitioner was deprived of due process and there is extreme urgency of
relief;
f. where, in a criminal case, relief from an order of arrest is urgent and the grant of
such relief by the trial court is improbable;
g. where the proceedings in the lower court are a nullity for lack of due process;
h. where the proceedings were ex parte or in which the petitioner had no opportunity
to object; and
i. where the issue raised is one purely of law or where public interest is involved.
According to the Court, the present case falls under exception letter (d) where,
under the circumstances, a motion for reconsideration would be useless. In the
present case, the Court agreed with the CA when the latter court held that a motion
for reconsideration, or the resolution of the trial court thereon, had become useless
given that the particular acts which the movants (Heirs of Consing) sought to
prevent by the filing of the motion were already carried out. Significantly, the Heirs
of Consing had filed a motion for reconsideration of the RTCs order, but withdrew it
only after the trial court had decided to implement the writs notwithstanding the
pendency of the motion and just a day before the scheduled hearing on said motion.
(3) Yes. There is forum shopping when the following requisites concur: (1) identity of
parties, or at least such parties as represent the same interests in both actions, (2)
identity of rights asserted and relief prayed for, the relief being founded on the same
facts, and (3) the identity of the two preceding particulars is such that any judgment
rendered in the other action will, regardless of which party is successful, amount to
res judicata in the action under consideration. The Court ruled that theses requisites
are present in this case.
There is identity of parties representing the same interests in the two actions (Civil
Case No. 00-11320 and Civil Case No. 797-C), both involving the estate and heirs of
the late Consing on one hand, and Spouses Medado on the other. The rescission case
(Civil Case No. 00-11320) names Soledad T. Consing, for herself and as
administratrix of the estate of Antonio Consing as plaintiff, with Spouses Meritus
Rey and Elsa Medado, PNB and the Register of Deeds of Cadiz City as respondents.
The injunction case (Civil Case No. 797-C), on the other hand, was instituted by
Spouses Medado, against LBP and the Heirs of the Late Antonio Consing, as
represented by Dra. Soledad Consing. The primary litigants in the two actions, and
their interests, are the same.
There is an identity of rights asserted and reliefs prayed for in the two cases, with
the reliefs being founded on the same set of facts. In both cases, the parties claim
their supposed right as owners of the subject properties. They all anchor their claim
of ownership on the deeds of absolute sale which they had executed, and the law
applicable thereto. They assert their respective rights, with Spouses Medado as
buyers and the heirs as sellers, based on the same set of facts that involve the deeds
of sales contents and their validity. Both actions necessarily involve a ruling on the
validity of the same contract as against the same parties. Thus, the identity of the
two cases is such as would render the decision in the rescission case res judicata in
the injunction case, and vice versa.
It does not even matter that one action is for the enforcement of the parties
agreements, while the other action is for the rescission thereof.
The Court also mentioned the relevant factors that courts must consider when they
have to determine which case should be dismissed, given the pendency of two
actions, to wit:
(1)The date of filing, with preference generally given to the first action filed to be
retained;
(2)Whether the action sought to be dismissed was filed merely to pre-empt the
latter action or to anticipate its filing and lay the basis for its dismissal; and
(3)Whether the action is the appropriate vehicle for litigating the issues between
the parties.

Vivian T. Ramirez, et al. v. Mar Fishing Co., Inc., et al., G.R. No. 168208, June
13, 2012
FACTS:
On 28 June 2001, respondent Mar Fishing Co., Inc. (Mar Fishing), engaged in the
business of fishing and canning of tuna, sold its principal assets to co-respondent
Miramar Fishing Co., Inc. (Miramar) through public bidding. The proceeds of the
sale were paid to the Trade and Investment Corporation of the Philippines
(TIDCORP) to cover Mar Fishings outstanding obligation in the amount of
897,560,041.26. In view of that transfer, Mar Fishing issued a Memorandum dated
23 October 2001 informing all its workers that the company would cease to operate
by the end of the month.
On 29 October 2001 or merely two days prior to the months end, it notified the
Department of Labor and Employment (DOLE) of the closure of its business
operations. Thereafter, Mar Fishings labor union, Mar Fishing Workers Union NFL
and Miramar entered into a Memorandum of Agreement. The Agreement provided
that the acquiring company, Miramar, shall absorb Mar Fishings regular rank and
file employees whose performance was satisfactory, without loss of seniority rights
and privileges previously enjoyed. Unfortunately, petitioners, who worked as rank
and file employees, were not hired or given separation pay by Miramar.
Thus, petitioners filed Complaints for illegal dismissal with money claims before the
Arbitration Branch of the National Labor Relations Commission (NLRC). The Labor
Arbiter (LA) found that Mar Fishing had necessarily closed its operations,
considering that Miramar had already bought the tuna canning plant. By reason of
the closure, petitioners were legally dismissed for authorized cause. In addition, even
if Mar Fishing reneged on notifying the DOLE within 30 days prior to its closure, that
failure did not make the dismissals void. Consequently, the LA ordered Mar Fishing
to give separation pay to its workers. However, the NLRC reversed the decision of
the LA and pierced the veil of corporate fiction and ruled that Mar Fishing and
Miramar were one and the same entity, since their officers were the same.
Hence, both companies were ordered to solidarily pay the monetary claims. On
reconsideration, the NLRC modified its ruling by imposing liability only on Mar
Fishing. The labor court held that petitioners had no cause of action against
Miramar, since labor contracts cannot be enforced against the transferee of an
enterprise in the absence of a stipulation in the contract that the transferee assumes
the obligation of the transferor.
However, finding that only 3 of the 228 petitioners signed the Verification and
Certification against forum shopping, the CA instantly dismissed the action for
certiorari against the 225 other petitioners without ruling on the substantive aspects
of the case.
By means of a Manifestation with Omnibus Motion, petitioners submitted a

Verification and Certification against forum shopping executed by 161 signatories. In
the said pleading, petitioners asked the CA to reconsider by invoking the rule that
technical rules do not strictly apply to labor cases. Still, the CA denied petitioners
contentions holding that even though litigation is not a game of technicalities, it does
not follow that the Rules of Court must be ignored.
ISSUES:
1. Whether the CA gravely erred in dismissing their Petition for Review on the
ground that their pleading lacked a Verification and Certification against forum
shopping.
2. The solidary liability of Mar Fishing and Miramar to pay petitioners monetary
claims and the reckoning period for the award of back wages.
HELD:
1. No, the Rules of Court provide that a petition for certiorari must be verified and
accompanied by a sworn certification of non-forum shopping. Failure to comply with
these mandatory requirements shall be sufficient ground for the dismissal of the
petition. Considering that only 3 of the 228 named petitioners signed the
requirement, the CA dismissed the case against them, as they did not execute a
Verification and Certification against forum shopping. The lack of certification
against forum shopping is not curable by mere amendment of a complaint, but shall
be a cause for the dismissal of the case without prejudice. Indeed, the general rule is
that subsequent compliance with the requirements will not excuse a party's failure to
comply in the first instance. Thus, on procedural aspects, the appellate court
correctly dismissed the case. However, this Court has recognized that the merit of a
case is a special circumstance or compelling reason that justifies the relaxation of
the rule requiring verification and certification of non-forum shopping.
2. In their Petition for Review on Certiorari, petitioners did not dispute the
conclusion of the LA and the NLRC that Mar Fishing had an authorized cause to
dismiss its workers. Neither did petitioners challenge the computation of their
separation pay. Rather, they questioned the holding that only Mar Fishing was liable
for their monetary claims. This Court sustains the ruling of the LA as affirmed by the
NLRC that Miramar and Mar Fishing are separate and distinct entities, based on the
marked differences in their stock ownership. Also, the fact that Mar Fishings officers
remained as such in Miramar does not by itself warrant a conclusion that the two
companies are one and the same.
Having been found by the trial courts to be a separate entity, Mar Fishing and not
Miramar is required to compensate petitioners. Indeed, the back wages and
retirement pay earned from the former employer cannot be filed against the new
owners or operators of an enterprise.
Petition denied.

ATTY. FE Q. PALMIANO-SALVADOR, Petitioner,
vs. CONSTANTINO ANGELES, Respondent.
G.R. No. 171219, September 3, 2012
FACTS:
Respondent is one of the registered owners of a parcel of land at Sampaloc, Manila

as evidence by a Transfer Certificate of Title. The subject parcel of land was
occupied by Galiga from 1979 to 1993 as a lessee with a lease of contract.
Subsequently, Petitioner alleged she bought on 1993 the subject parcel of land from
Galiga who represented that he was the owner, being one in possession. Petitioner
remained in possession of said property. Respondent sent a letter to petitioner
demanding the latter to vacate the property which was not heeded by petitioner.
Thus, Angeles filed, thru one Diaz, a complaint for ejectment with the Metropolitan
Trial Court of Manila (MeTC). MeTC rendered its decision in favor of Angeles. In
appeal filed by Salvador, she alleged that Diaz, who filed the complaint, had no
authority from Angeles at the time of the filing of the suit. The appeal was denied by
the Regional Trial Court (RTC). The Motion for Reconsideration filed by Salvador was
likewise denied. Petitioner elevated the case to the Court of Appeals (CA) via petition
for review but was dismissed. The CA affirmed the factual findings of lower courts
that Galiga was a mere lessee of respondent hence Galiga could not have validly
transferred ownership to peitioner. Hence, the present petition.
ISSUE:
Whether or not the court acquired jurisdiction over the complaint and the plaintiff.
HELD:
No, the court did not acquire jurisdiction over the complaint and the plaintiff. The
complaint filed in the MeTC was filed in the name of the respondent but it was one
Diaz who executed the verification and certification alleging therein that he was
respondents attorney-in-fact. No copy of any document attached to the complaint to
prove Diaz/s allegation regarding the authority supposedly granted to him. In fact, it
was only more than ayear after the complaint was filed that respondent attached to
his Reply to Salvador a document entitled Special Power of Attorney (SPA)
supposedly executed in favor of Diaz. However, said SPA was executed only more
than a month after the complaint was filed appearing to have been notarize by one
Robert McGuire of Santa Barbara County. No certification from Philippine Consulate
in San Francisco, CA, USA, that said person is indeed a notary public. There is
nothing on record to show that Diaz had been authorized. Thus, the effect is as held
by the Court in Tamondong v. CA, if a complaint is filed for and in behalf of the
plaintiff by one who is not authorize to do so, the complaint is not deemed filed. An
unauthorize complaint does not produce any legal effect. Hence, the court has no
jurisdiction over the complaint and the plaintiff.
In order that the court to have authority to dispose of the case on the merits, it must
acquire jurisdiction over the subject matter and the parties. Courts acquire
jurisdiction over the plaintiffs upon filing of the complaint and to be bound by the
decision, a party should first be subjected to the courts jurisdiction. Since no valid
complaint was ever filed witht the MeTC, it did not acquire jurisdcition over the
person of Angeles. Thus, all proceedings before the MeTC were null and void.
Ceroferr Realty Corporation vs Court of Appeals and Ernesto D. Santiago G.R.

139539, February 5,2002
FACTS:
Plaintiff filed with the Regional Trial Court a complaint against defendant Ernesto D.
Santiago for damages and injunction, with preliminary injunction. In the complaint,
Ceroferr prayed that Santiago and his agenst be enjoined from claiming possession
and ownership aver Lot. 68 of the Tala Estate Subdivision, Quezon City; that
Santiago and his agents be prevented from making use of the vacant lot as a jeepney
terminal; that Santiago be ordered to pay Ceroferr P650.00 daily as lost income for
the use of the lot until possession is restored to the latter; and that Santiago be
directed to pay plaintiff Ceroferr moral, actual and exemplary damages and
attorney`s fees, plus expenses of litigation.
In his Answer, defendant Santiago alleged that the vacant lot referred to in the
complaint was within Lot no. 90 of the Tala Estate Subdivision; that he was not
claiming any portion of Lot. 68 claimed by Cereforr; that he had legal right to fence
Lot. 90 since this belonged to him, and he had permit for the purpose; that Cereforr
had no color of right over Lot. 90 and, hence, was not entitled to an injunction to

prevent Santiago from exercising acts of ownership thereon; and that the complaint
did not state a cause of action.
There was a verification survey, followed by a relocation survey, whereby it would

appear that the vacant lot is inside Lot. 68. The outcome of the survey was vigorously
objected to by defendant who insisted that the area is inside his lot.
It thus became clear, at least from the view point of the defendant, that the case
would no longer, merely involves a simple case of collection of damages and
injunction which was the main objective of the complaint but a review of the title of
defendant vis-a-vis that of the plaintiff. At this point, defendant filed a motion to
dismiss the complaint premised primarily on his contention that the trial court
cannot adjudicate the issue of damages without passing over the conflictong claims
of ownership of the parties over the disputed portion.
The trial court issued the order that dismissed the case for lack of cause of action
and lack of jurisdiction. Plaintiff appealed this decision but the Court of Appeals
promulgated a decision dismissing the appeal.
Hence, this appeal.
ISSUE:
* Whether Ceroferr`s complaint states a sufficient cause of action.
* Whether the trial court has jurisdiction to determine the identity and location of the
vacant lot involved in the case.
HELD:
We grant the petition.
The rule of procedure require that the complaint must state a concise statement of
the ultimate facts or essential facts constituting the plaintiff`s cause of action. A fact
is essential if it cannot be stricken out without leaving the statement cause of action
inadequate. A complaint states a cause of action when it has three indispensable
elements, namely: 1) a right in favor of the plaintiff by whatever means and under
whatever law it arises or created; 2) an obligation on the part of the named
defendant to respect or not to violate such right; 3) an act or omission on the part of
such defendant violative of the right of plaintiff or constituting a breach of the
obligation of defendant to the plaintiff for which the latter may maintain an action for
recovery for damages. If these elements are not extant, the complaint becomes
vulnerable to a motion to dismiss on the ground of failure to state a cause of action.
These elements are present in the case at bar.
A defendant who moves to dismiss the complaint on the ground of lack of cause of
action, as in this case, hypothetically admits all the averments thereof. The test of
sufficiency of the facts found in a complaint as constituting a cause of action is
whether or not admitting the facts alleged the court can render a valid judgment
upon the same in accordance with the prayer thereof. The hypothetical admission
extends to the relevant and material facts well pleaded in the complaint and
inferences fairly deducible therefrom. Hence, if the allegations in the complaint
furnish sufficient basis by which the complaint can be maintained, the same should
not be dismissed regardless of the defense that may be assessed by the defendants.
In this case, petitioner Ceroferr's cause of action has been sufficiently averred in the
complaint. If it were admitted that the right of ownership of petitioner Ceroferr to
the peaceful use and possession of Lot 68 was violated by respondent Santiago's act
of encroachment and fencing of the same, then petitioner Ceroferr would be entitled
to damages.
On the issue of jurisdiction, we hold that the trial court had jurisdiction to determine
the identity and location of the vacant lot in question.
While the lack of jurisdiction of a court may be raised at any stage of an action, the
party raising such question may be estopped if he has actively taken part in the very
proceedings which he questions and he only objects to the court`s jurisdiction
because the judgment or the order subsequesntly rendered is adversed to him.
In this caseoo, respondent Santiago may be considered estopped to question the

jurisdiction of the trial court for he took an active part in the case. In his answer,
respondent Santiago did not question the jurisdiction of the trial court to grant the
reliefs prayed for in the complaint. His geodetic engineers were present in the first
and second surveys that the LRA conducted. It was only when the second survey
report showed results adverse to his case that he submitted a motion to dismiss.
Asian Construction and Development Corp. vs. Lourdes K. Mendoza
FACTS:

On January 6, 2000, respondent Lourdes K. Mendoza, sole proprietor of Highett Steel
Fabricators (Highett), filed before the Regional Trial Court (RTC) a Complaint for a
sum of money, against petitioner Asian Construction and Development Corporation, a
duly registered domestic corporation. In the complaint, respondent alleged that from
the period August 7, 1997 to March 4, 1998, petitioner purchased from Highett
various fabricated steel materials and supplies amounting to P1,206,177.00,
exclusive of interests; that despite demand, petitioner failed and/or refused to pay;
and that due to the failure and/or refusal of petitioner to pay the said amount,
respondent was compelled to engage the services of counsel.
Petitioner moved for a bill of particulars on the ground that no copies of the purchase
orders and invoices were attached to the complaint to enable petitioner to prepare a
responsive pleading to the complaint. To prove her case, respondent presented the
testimonies of the salesman of Highett who confirmed the delivery of the supplies
and materials to petitioner, and the General Manager of Highett.
Petitioner argues that a charge or sales invoice is not an actionable document; thus,
petitioners failure to deny under oath its genuineness and due execution does not
constitute an admission thereof. Petitioner likewise insists that respondent was not
able to prove her claim as the invoices offered as evidence were not properly
authenticated by her witnesses. Lastly, petitioner claims that the CA erred in
affirming the award of attorneys fees as the RTC decision failed to expressly state
the basis for the award thereof.
Respondent maintains that charge invoices are actionable documents, and that these
were properly identified and authenticated by witness Tejero, who testified that upon
delivery of the supplies and materials, the invoices were stamped received by
petitioners employee.
The RTC ruled in favor of the respondent and ordered the payment of the principal
amount of the supplies and the amount of the accrued interest, 150,000 as attorney's
fees and cost of suit. The CA modified the decision of the RTC.
ISSUES:
I. WHETHER THE CHARGE INVOICES ARE ACTIONABLE DOCUMENTS.

II. WHETHER THE DELIVERY OF THE ALLEGED MATERIALS [WAS] DULY
PROVEN.
III. WHETHER RESPONDENT IS ENTITLED TO ATTORNEYS FEES.
HELD:
The petition is partly meritorious
I. Yes, the charge invoices are not actionable documents
From the provision of Rule 8 Sec. 7 of RoC, a document is actionable when an action
or defense is grounded upon such written instrument or document. In the instant
case, the Charge Invoices are not actionable documents per se as these only provide
details on the alleged transactions. These documents need not be attached to or
stated in the complaint as these are evidentiary in nature. In fact, respondent's cause
of action is not based on these documents but on the contract of sale between the
parties.
II. Yes, delivery of the supplies and materials was duly proved
Although the Charge Invoices are not actionable documents, the Purchase Orders,
are sufficient to prove that petitioner indeed ordered supplies and materials from
Highett and that these were delivered to petitioner.
Moreover, contrary to the claim of petitioner, the Charge Invoices were properly
identified and authenticated by witness who was present when the supplies and
materials were delivered to petitioner and when the invoices were stamped received
by petitioner's employee.
III. No, basis for the award of Attorneys fees must be stated in the decision
However, with respect to the award of attorneys fees to respondent, it must be

disallowed as the same as the rationale for the award was not stated in the text of
the RTC Decision but only in the dispositive portion.

SPOUSES FERNANDO and MA. ELENA SANTOS vs LOLITA ALCAZAR
March 12, 2014; GR 183034
FACTS:
Respondent Alcazar was the proprieter of Legazpi Color Center (LCC). Alcazar filed a
complaint for sum of money against petitioners for the collection of the value of paint
and construction materials in the amount of 1,456,000. The Acknowledgment
executed by Petitioner Fernando was the basis of Alcazars cause of action. Under
the said Acknowledgment, Petitioner Fernando acknowledged his obligation with
LCC to pay the value of the paint and construction materials in the amount of
1,456,000.
Petitioners specifically denied the allegations of Alcazar and contended that the
actionable document does not reflect their real indebtedness as well as the true
contract or intention of the parties. The document does not reflect the correct
amount which is only P600,000. Thus, petitioners sought the dismissal of the
Complaint.
Petitioners filed a Demurrer to Evidence and argued that the Acknowledgment
presented in court was not an original copy, hence, inadmissible. Trial court denied
petitioners demurrer and scheduled the presentation of petitioners evidence.
Thereafter, petitioners moved to reset the scheduled on the ground that on the
scheduled hearing, their counsel was to appear in another scheduled case. However,
the trial court denied the motion to reset for lack of merit and for violating Section 4,
Rule 15 of the Rules of Civil Procedure. The trial court declared that the petitioners
have waived their right to present evidence.
Petitioners filed a petition for certiorari to the CA and questioned the denial of their
demurrer but the CA sustained the TCs denial of their demurrer.
Regional Trial Courts Decision:

RTC rendered judgment in favor of respondent Alcazar and ordered petitioners to
pay plaintiff the sum of 1,456,000 plus interest, litigation and attorneys fees. It held
that petitioners admitted that they entered into transactions with Alcazar for the
delivery of paint and construction materials and that from the Acknowledgment,
petitioners admitted that their unpaid obligation is P1,456,000.
CAs Decision:
On appeal, the petitioners alleged that the TC erred in allowing Alcazar to present
her evidence ex parte.
It sustained the trial courts denial of petitioners demurrer. The CA held that
petitioners failed to deny specifically under oath the genuineness and due execution
of the Acknowledgment, consequently, its genuineness and due execution are
deemed admitted, there was thus no need to present the original thereof, and
petitioners liability was sufficiently established.
ISSUES:
1. Whether or not the photocopy of the Acknowledgment presented and offered in
evidence is inadmissible.
2. Whether or not the CA erred in its finding when it held that petitioners are
indebted to respondent in the amount of P1,456,000.
3. Whether or not Petitioner Santos is also liable to pay the amount of P1,456,000
4. Whether or not the Pre-trial Conference is a sham as there are no records to show
that it was conducted.
HELD:
1. NO. Respondents failure to present the original copy of the Acknowledgment
during the taking of her testimony and the presentation of a mere photocopy thereof
at said hearing, does not materially affect the outcome of the case. Though
respondent claimed that she had lost the original, the CA proclaimed that the
document resides in the record. This would explain then why respondent cannot find
it in her possession; it is with the court as an exhibit.
2. NO. Petitioners failed to deny specifically under oath the genuineness and due
execution of the Acknowledgment in their Answer. The effect of this is that the
genuineness and due execution of the Acknowledgment is deemed admitted. "By the
admission of the genuineness and due execution of the document is meant that the
party whose signature it bears admits that he signed it or that it was signed by
another for him with his authority.
The Court believes that judgment may be had solely on the document, and there is no
need to present receipts and other documents to prove the claimed indebtedness.
The Acknowledgment, just as an ordinary acknowledgment receipt, is valid and
binding between the parties who executed it, as a document evidencing the loan
agreement they had entered into. The absence of rebutting evidence occasioned by
petitioners waiver of their right to present evidence renders the Acknowledgment as
the best evidence of the transactions between the parties and the consequential
indebtedness incurred. The effect of the admission is such that "a prima facie case is
made for the plaintiff which dispenses with the necessity of evidence on his part and
entitles him to a judgment on the pleadings unless a special defense of new matter,
such as payment, is interposed by the defendant."
3. NO. Only Fernando may be held liable for the judgment amount of P1,456,000.00,
since Ma. Elena was not a signatory to the Acknowledgment. She may be held liable
only to the extent of P600,000.00, as admitted by her and Fernando in their Answer.
The rule that the genuineness and due execution of the instrument shall be deemed
admitted, unless the adverse party specifically denies them under oath, applies only
to parties to the document.
4. NO. Court found them to be without merit. A pre-trial conference was held, and
that petitioners' representative was present therein. Moreover, the proceedings were
covered by the required pre-trial order, which may itself be considered a record of
the pre-trial. In said order, the November 8, 2005 pre-scheduled hearing was
particularly specified. Thus, from the very start, petitioners knew of the November 8
hearing; if they failed to attend, no fault may be attributed to the trial court.
D.M. FERRER & ASSOCIATES CORPORATION v. UNIVERSITY OF SANTO
TOMAS
G.R. No. 189496. February 1, 2012
FACTS:
Petitioner and University of Santo Tomas Hospital, Inc. entered into a Project
Management Contract for the renovation of the 4th and 5thfloors of the Clinical
Division Building, Nurse Call Room and Medical Records, Medical Arts Tower,
Diagnostic Treatment Building and Pay Division Building.
On various dates, petitioner demanded from USTHI the payment of the construction
costs amounting to P17,558,479.39. However, UST, through its rector, Fr. Rolando V.
Dela Rosa, wrote a letter informing petitioner that its claim for payment had been
denied, because the Project Management Contract was without the required prior
approval of the board of trustees. Thus, petitioner filed a Complaint for sum of
money, breach of contract and damages against herein respondent UST and USTHI
when the latter failed to pay petitioner despite repeated demands.
In impleading respondent UST, petitioner alleged that the former took complete
control over the business and operation of USTHI, as well as the completion of the
construction project. It also pointed out that the Articles of Incorporation of USTHI
provided that, upon dissolution, all of the latters assets shall be transferred without

any consideration and shall inure to the benefit of UST. It appears that USTHI passed
a Resolution dissolving the corporation by shortening its corporate term of existence.
Finally, petitioner alleged that respondent, through its rector, Fr. Dela Rosa, O.P.,
verbally assured the former of the payment of USTHIs outstanding obligations.
Thus, petitioner posited in part that UST may be impleaded in the case under the
doctrine of piercing the corporate veil, wherein respondent UST and USTHI would
be considered to be acting as one corporate entity, and UST may be held liable for
the alleged obligations due to petitioner.
Subsequently, respondent filed its Motion to Dismiss. It alleged that the Complaint
failed to state a cause of action, and that the claim was unenforceable under the
provisions of the Statute of Frauds.
RTC Quezon City granted the motion and dismissed the Complaint insofar as
respondent UST was concerned, on the ground that respondent was not a real party-
in-interest, and that it was not privy to the contract executed between USTHI and
petitioner. Second, the court pointed out that the alleged verbal assurances of Fr.
Dela Rosa should have been in writing to make these assurances binding and
demandable.
Petitioner sought a reconsideration of the RTC Order and asserted that only
allegations of the Complaint, and not the attached documents, should have been the
basis of the trial courts ruling, consistent with the rule that the cause of action can
be determined only from the facts alleged in the Complaint. It also insisted that the
Statute of Frauds was inapplicable, since USTHIs obligation had already been
partially executed.
The Motion for Reconsideration filed by petitioner was dimissed, upholding the initial
findings that respondent UST was not a real party-in-interest, and that Fr. Dela Rosas
alleged assurances of payment were unenforceable.
Subsequently, petitioner filed a Petition for Certiorari under Rule 65 with the CA,
alleging that the trial court committed grave abuse of discretion when it granted
respondents Motion to Dismiss on the basis of the documents submitted in support of
the Complaint, and not solely on the allegations stated therein. It pointed out that
the allegations raised questions of fact and law, which should have been threshed out
during trial, when both parties would have been given the chance to present
evidence supporting their respective allegations.
CA issued the assailed Resolution and dismissed the Petition on the ground that a
petition under Rule 65 is the wrong remedy to question the RTCs Order that
completely disposes of the case. Instead, petitioner should have availed itself of an
appeal under Rule 41 of the Rules of Court.
Petitioner moved for a reconsideration of the Resolution, pointing out that the
present case falls under the enumerated exceptions of Rule 41, in particular, while
the main case is still pending, no appeal may be made from a judgment or final order
for or against one or more of several parties or in separate claims, counterclaims,
cross-claims and third-party complaints.

CA denied the Motion for Reconsideration through its second assailed Resolution,
holding that the motion raised no new issues or substantial grounds that would merit
the reconsideration of the court.
ISSUE:
I. Whether the CA erred in dismissing the Petition for Certiorari by failing to consider
the exception in Sec. 1(g) of Rule 41 of the Rules of Court.
II. Whether the trial court committed grave abuse of discretion when it held that the
Complaint stated no cause of action.
HELD:
I. YES. A petition for certiorari under Rule 65 is the proper remedy to question the
dismissal of an action against one of the parties while the main case is still pending.
In Jan-Dec Construction Corp. v. Court of Appeals, the Court ruled that the CA erred
in dismissing petitioner's petition for certiorari from the Order of the RTC dismissing
the complaint against respondent. While Section 1, Rule 41 of the 1997 Rules of Civil
Procedure states that an appeal may be taken only from a final order that completely
disposes of the case, it also provides several exceptions to the rule, to wit: (a) an
order denying a motion for new trial or reconsideration; (b) an order denying a
petition for relief or any similar motion seeking relief from judgment; (c) an
interlocutory order; (d) an order disallowing or dismissing an appeal; (e) an order
denying a motion to set aside a judgment by consent, confession or compromise on
the ground of fraud, mistake or duress, or any other ground vitiating consent; (f) an
order of execution; (g) a judgment or final order for or against one or more of several
parties or in separate claims, counterclaims, cross-claims and third-party complaints,
while the main case is pending, unless the court allows an appeal therefrom; and (h)
an order dismissing an action without prejudice. In the foregoing instances, the
aggrieved party may file an appropriate special civil action for certiorari under Rule
65.
II. YES. In Abacan v. Northwestern University, Inc., the Court ruled that it is settled
that the existence of a cause of action is determined by the allegations in the
complaint. In resolving a motion to dismiss based on the failure to state a cause of
action, only the facts alleged in the complaint must be considered. The test is
whether the court can render a valid judgment on the complaint based on the facts
alleged and the prayer asked for. Indeed, the elementary test for failure to state a
cause of action is whether the complaint alleges facts which if true would justify the
relief demanded. Only ultimate facts and not legal conclusions or evidentiary facts,
which should not be alleged in the complaint in the first place, are considered for
purposes of applying the test.
hile it is admitted that respondent UST was not a party to the contract, petitioner
posits that the former is nevertheless liable for the construction costs. In support of
its position, petitioner alleged that (1) UST and USTHI are one and the same
corporation; (2) UST stands to benefit from the assets of USTHI by virtue of the
latters Articles of Incorporation; (3) respondent controls the business of USTHI; and
(4) USTs officials have performed acts that may be construed as an
acknowledgement of respondents liability to petitioner.
Obviously, these issues would have been best resolved during trial. The RTC
therefore committed grave abuse of discretion when it dismissed the case against
respondent for lack of cause of action. The trial court relied on the contract executed
between petitioner and USTHI, when the court should have instead considered
merely the allegations stated in the Complaint.
La Mallorca v. Court of Appeals, Mariano Beltran, et al., G.R, No. L-20761,

July 27, 1966.
FACTS:
Private respondents (Mariano Beltran being the husband, and his wife), with their
three minor daughters at about noontime, boarded a Pambusco Bus at San Fernando,
Pampanga. It was owned and operated by defendant. Private respondents were
carrying with them at the time four pieces of baggage. The conductor of the bus then
issued tickets to them, except to two of the daughters, who were below the height
requirement at which the fare was charged. When the bus reached Anao, it stopped
there to allow the passengers bound therefor to get down. Among these were the
private respondents and their children. Private respondent husband went back to the
bus to retrieve his bayong which he left behind. However, he did not notice that one
of his daughters followed him. When he was waiting for the conductor to hand him
the bayong, the bus started to leave without the signal of the conductor, then it
stopped again. Nevertheless, sensing that the bus is again about to move, private
respondent husband veered away from the same. At the same time, he noticed
people gathering around the body of a child who turned out to be his daughter, with
her skull crushed and already without life.
Thus, private respondents filed an action to recover damages, which was granted by
the trial court for breach of contract of carriage. On appeal, the Court of Appeals
agreed that the contract of carriage had already terminated, but still made petitioner
liable on the basis of quasi-delict.
ISSUE: WON La Mallorca (petitioner) shall be liable.
HELD: YES. Although private respondents alighted at the designated place, insofar
as the husband is concerned, the relationship of passenger and carrier still subsisted
due to the fact that the bayong which he was supposed to claim was still in the bus.
The issue to be determined is whether the carrier was also liable for the safety of the
child. The recognized rule is that the relation of carrier and passenger does not
automatically cease when the passenger alighted. The latter must have had a
reasonable time or opportunity to leave the carriers premises. A reasonableness is
to be determined by the circumstances.
It must be noted that the bus did not observe a carriers obligation to exercise
utmost diligence of a very cautious person when it commenced to leave without
the signal of the conductor. Also, the presence of private respondents near the bus
was not unreasonable since they still have a part of their baggage in the bus. Thus,
they are still to be considered as passengers and entitled to protection under the
contract of carriage.
But assuming that the carrier-passenger relationship had already ceased, petitioner
may still be held liable for negligence of its driver, which shall fall under quasi-delict.

Ledda v. BPI, G.R. No. 200868, November 21, 2012
FACTS:
Anita Ledda was a client of Bank of the Philippine Islands (BPI) who was issued a
pre-approved credit card. This credit card and its terms and conditions were
delivered to Ledda; Ledda began to subsequently use the credit card for various
purchases of goods, services, and cash advances. Ledda defaulted in the payment of
her credit card obligations. BPI sent a demand letter on September 26, 2007, but this
was received in Ledda on October 2, 2007 who defaulted payment nonetheless. BPI
thus filed a complaint of the collection of a sum of money against Ledda, allegedly
amounting to P548,143.73. BPI filed the complaint in the RTC of Makati City. The
RTC declared Ledda in default for failing to file an Answer within the period
prescribed despite the service of the complaint and summons. Ledda somehow
managed to file a motion for reconsideration, which was granted by the RTC and
thus allowed her to file her Answer Ad Cautelam. Ledda and her counsel, however,
failed to appear during the Pre-Trial. BPI was thus allowed to present evidence ex-
parte. The RTC later ruled in favor of BPI, making Ledda liable for the alleged
amount of P548,143.73 plus a 6% monthly interest. Ledda appealed to the CA, which
denied her appeal but modified the RTCs decision. The CA rejected Leddas
argument that the credit cards terms and conditions were actionable documents
governed by Rule 8, sec. 7 of the Rules of Civil Procedure. The CA held that BPIs
cause of action sprang from Leddas availment of the banks credit facilities via the
credit card and her refusal to pay the obligation it created. The CA used the case of
Macalinao vs BPI in order to reduce the payment of interest. The Macalinao case also
concerned the default in payment of a credit card obligation, but the bank therein
imposed a 9.25% interest per month penalty, amounting to 111% per annum, which
the court deemed exorbitant and unconscionable. The CA reduced Leddas credit
card obligations to P322, 138 as the principal by deducting P225,000.15 as interests
and charges from the original P548,143.73 amount. The CA also granted Attorneys
fees to BPI as per the Macalinao case. Ledda moved to reconsider, but was denied by
the CA. Ledda went to the SC via a petition for Review.
ISSUE/S:

Did the CA err in holding that the credit cards terms and conditions were not
actionable documents under Rule 8, sec. 7 of the Rules of Civil Procedure?
Did the CA err in applying the case of Macalinao vs BPI instead of Alcaraz vs CA as
insisted by Ledda regarding the imposition of interest and penalty charges on credit
card obligations?
Did the CA err in awarding Attorneys fees in favor of BPI?
HELD:
The petition is partly meritorious
1) No, the CA was correct in ruling that the credit cards terms and conditions were
not actionable documents under the Rules of Civil Procedure.
Rule 8, section 7 provides:
Section 7. Action or defense based on document. Whenever an action or defense is

based upon a written instrument or document, the substance of such instrument or
document shall be set forth in the pleading, and the original or a copy thereof shall
be attached to the pleading as an exhibit, which shall be deemed to be a part of the
pleading, or said copy may with like effect be set forth in the pleading.
As the rule itself states, the cause of action must be based on a document to be
attached to the complaint. BPIs cause of action, however, was not solely based on
the credit cards terms and conditions. It was also based on Leddas 1) acceptance of
the credit card, 2) use of the credit card to purchase goods or services or advances in
cash, and 3) her default in the payment of her obligations. As such, BPI had a
sufficient cause of action with or without the attachment of the credit cards terms
and conditions.
2) Yes, the CA erred in applying Macalinao vs BPI instead of Alcaraz vs CA. Leddas
case falls squarely within that of the Alcaraz case. Alcaraz, like Ledda, was also a
pre-screened client of the bank who was not made to sign a credit card application
and the terms and agreements therein. As such, Alcaraz was deemed not be bound
by the stipulations in the terms and conditions of the credit card without showing the
former was aware of and consented to the said terms and conditions. The Macalinao
case, on the other hand, differed from Leddas case in that Macalinao only
questioned the legality of the exorbitant interest and penalty charges imposed by the
bank in the credit card obligation. Macalinao did not contest the terms and
conditions of the credit card, and was deemed to be bound by it.
As with the Alcaraz case, Ledda was required to pay the interest at 12% per annum,
as it was a forbearance on money that needed no written agreement. Using the case
of Esatern Shipping Lines, Inc, the 12% legal interest was computed from the date of
BPIs extrajudicial demand, on October 2 2007.
[Digesters note: The legal interest rate in this case no longer applicable, see Central
Bank Circular No. 799 of 2013, pegging all legal interests on loans, forbearance on
money goods or credits, or that set by judgments at 6%, thus removing the 12%-6%
distinction.]

3) Yes, the CA erred in awarding Attorneys fees to BPI. The CA did not include its
legal and factual basis for doing so in its decision. The award of Attorneys fees must
be justified by the court in the body of its decision. Attorneys fees should not be
automatically awarded to the victors in a litigation. Attorneys fees must not create a
premium for the right to litigate.
PETITION PARTLY GRANTED. Anita Ledda ORDERED to pay BPI P322,138.58 as the
principal amount plus 12% annual interest computed from October 2, 2007 until full
payment. Award of Attorneys fees DELETED for lack of basis.
FINANCIAL BUILDING CORPORATION, petitioner,

vs.
FORBES PARK ASSOCIATION, INC., respondent.
FACTS:
The then Union of Soviet Socialist Republic (hereafter, USSR) was the owner of a
residential lot located at Forbes Park Village in Makati City. The USSR engaged the
services of Financial Building for the construction of a multi-level building building at
the said lot. Forbes Park reminded the USSR of existing regulations authorizing only
the construction of a single-family residential building in each lot within the village.
It also elicited a reassurance from the USSR that such restriction has been complied
with. Despite this, Financial Building submitted to the Makati City Government a
second building plan for the construction of a multi-level apartment building, which
was different from the first plan for the construction of a residential building
submitted to Forbes Park. Forbes Park discovered the second plan and subsequent
ocular inspection confirmed the violation of the deed of restrictions. Thus, it enjoined
further construction work. Forbes Park suspended all permits of entry for the
personnel and materials of Financial Building in the said construction site. The
parties attempted to meet to settle their differences but it did not push through.
Financial Building filed in the Regional Trial Court of Makati, Metro Manila, a
Complaint for Injunction and Damages with a prayer for Preliminary Injunction
against Forbes Park. The latter, in turn, filed a Motion to Dismiss on the ground that
Financial Building had no cause of action because it was not the real party-in-
interest. The trial court issued a writ of preliminary injunction against Forbes Park
but the Court of Appeals nullified it and dismissed the complaint. The Supreme Court
affirmed the said dismissal in a Resolution. After Financial Buildings case was
terminated with finality, Forbes Park sought to vindicate its rights by filing with the
Regional Trial Court of Makati a Complaint for Damages, against Financial Building
arising from the violation of its rules and regulations. The trial court rendered its
decision in favor of Forbes Park. Financial Building appealed the said decision to the
Court of Appeals, which affirmed the decision of the RTC.
ISSUE: Whether or not Forbes Park is barred in claiming damages?
HELD:
Yes. The instant case is barred due to Forbes Parks failure to set it up as a
compulsory counterclaim in the prior injunction suit initiated by Financial Building
against Forbes Park.
A compulsory counterclaim is one which arises out of or is necessarily connected

with the transaction or occurrence that is the subject matter of the opposing partys
claim.15 If it is within the jurisdiction of the court and it does not require for its
adjudication the presence of third parties over whom the court cannot acquire
jurisdiction, such compulsory counterclaim is barred if it is not set up in the action
filed by the opposing party.
Thus, a compulsory counterclaim cannot be the subject of a separate action but it

should instead be asserted in the same suit involving the same transaction or
occurrence, which gave rise to it.17 To determine whether a counterclaim is
compulsory or not, we have devised the following tests: (1) Are the issues of fact or
law raised by the claim and the counterclaim largely the same? (2) Would res
judicata bar a subsequent suit on defendants claim absent the compulsory
counterclaim rule? (3) Will substantially the same evidence support or refute
plaintiffs claim as well as the defendants counterclaim? and (4) Is there any logical
relation between the claim and the counterclaim? Affirmative answers to the above
queries indicate the existence of a compulsory counterclaim.
Second. Since Forbes Park filed a motion to dismiss in Civil Case No. 16540, its
existing compulsory counterclaim at that time is now barred. A compulsory
counterclaim is auxiliary to the proceeding in the original suit and derives its
jurisdictional support therefrom.19 A counterclaim presupposes the existence of a
claim against the party filing the counterclaim. Hence, where there is no claim
against the counterclaimant, the counterclaim is improper and it must dismissed,
more so where the complaint is dismissed at the instance of the counterclaimant.20
In other words, if the dismissal of the main action results in the dismissal of the
counterclaim already filed, it stands to reason that the filing of a motion to dismiss
the complaint is an implied waiver of the compulsory counterclaim because the grant
of the motion ultimately results in the dismissal of the counterclaim. Thus, the filing
of a motion to dismiss and the setting up of a compulsory counterclaim are
incompatible remedies. In the event that a defending party has a ground for
dismissal and a compulsory counterclaim at the same time, he must choose only one
remedy. If he decides to file a motion to dismiss, he will lose his compulsory
counterclaim. But if he opts to set up his compulsory counterclaim, he may still plead
his ground for dismissal as an affirmative defense in his answer.21 The latter option
is obviously more favorable to the defendant although such fact was lost on Forbes
Park. The ground for dismissal invoked by Forbes Park was lack of cause of action.
There was no need to plead such ground in a motion to dismiss or in the answer
since the same was not deemed waived if it was not pleaded.22 Nonetheless, Forbes
Park still filed a motion to dismiss and thus exercised bad judgment in its choice of
remedies. Thus, it has no one to blame but itself for the consequent loss of its
counterclaim as a result of such choice.
Inasmuch as the action for damages filed by Forbes Park should be as it is hereby
dismissed for being barred by the prior judgment and/or deemed waived by Forbes
Park to interpose the same under the rule on compulsory counterclaims, there is no
need to discuss the other issues raised by the herein petitioner.
WHEREFORE, the instant petition is hereby GRANTED and the Decision dated
March 20, 1998 of the Court of Appeals in CA-G.R. CV No. 48194 is hereby
REVERSED and SET ASIDE.
Costs against respondent Forbes Park Association, Inc. .
SO ORDERED.

Natividad Lim vs. National Power Corporation, and Spouses Roberto Ll.
Arcinue and Arabela Arcinue
G.R. No. 178789, November 14, 2012
FACTS:
Respondent National Power Corporation (NPC) filed an expropriation suit against

petitioner Natividad B. Lim (Lim) before the Regional Trial Court (RTC) of Lingayen,
covering Lots 2373 and 2374 that the NPC needed for its Sual Coal-Fired Thermal
Power Project. Since Lim was residing in the United States, the court caused the
service of summons on her through her tenant, a certain Wilfredo Tabongbong. The
RTC ordered the issued writ of possession in NPCs favor, however, Lim, represented
by her husband Delfin, filed an omnibus motion to dismiss the action and to suspend
the writ of possession, questioning the RTCs jurisdiction over Lims person and the
nature of the action. Respondent spouses Roberto and Arabela Arcinue (the
Arcinues) filed a motion for leave to admit complaint in intervention, alleging that
they owned and were in possession of Lot 2374, one of the two lots subject of the
expropriation. The RTC granted the Arcinues motion and required both the NPC and
Lim to answer the complaint-in-intervention within 10 days from receipt of its order.
When Lim and the NPC still did not file their answers to the complaint-in-
intervention after 10 months, the Arcinues filed a motion for judgment by default.
Lim sought to expunge the motion on the ground that it lacked the requisite
explanation why the Arcinues resorted to service by registered mail rather than to
personal service. At the scheduled hearing of the motion, Lims counsel did not
appear. The NPC for its part manifested that it did not file an answer since its
interest lay in determining who was entitled to just compensation. The RTC issued an
order of default against both Lim and the NPC. The RTC pointed out that the
Arcinues failure to explain their resort to service by registered mail had already
been cured by the manifestation of Lims counsel that he received a copy of the
Arcinues motion 10 days before its scheduled hearing. Lim filed a motion for
reconsideration to lift the default order but the Court denied the motion, prompting
Lim to file a petition for certiorari before the Court of Appeals. The CA rendered a
decision that affirmed the RTCs order of default. Lim filed a motion for
reconsideration but the CA denied it, prompting her to file the present petition for
review.
ISSUES:
Whether or not there is a valid order of default of the RTC entered against Lim.
Whether or not there is grave abuse of discretion by the RTC in allowing respondent
spouses failure to explain in their motion why they served a copy of it on the adverse
party by registered mail rather than by personal service.
HELD:
No. Section 4, Rule 19 of the Rules of Civil Procedure requires the original parties to
file an answer to the complaint-in-intervention within 15 days from notice of the
order admitting the same, unless a different period is fixed by the court. This
changes the procedure under the former rule where such an answer was regarded as
optional.
Thus, Lims failure to file the required answer can give rise to default. She remained
unable to show that her failure to file the required answer was due to fraud,
accident, mistake, or excusable negligence. And, although she claimed that she had a
meritorious defense, she was unable to specify what constituted such defense.
No. The Court finds no such grave abuse of discretion, notwithstanding that the
Arcinues' failed to explain their resort to service by registered mail rather than by
personal service, the fact is that Lim's counsel expressly admitted having received a
copy of the Arcinues' motion for judgment 10 days before its scheduled hearing. This
means that the Arcinues were diligent enough to file their motion by registered mail
long before the scheduled hearing.
Personal service is required precisely because it often happens that hearings do not
push through because, while a copy of the motion may have been served by
registered mail before the date of the hearing, such is received by the adverse party
already after the hearing. Thus, the rules prefer personal service. But it does not
altogether prohibit service by registered mail when such service, when adopted,
ensures as in this case receipt by the adverse party.
MAGDIWANG REALTY CORPORATION, RENATO P. DRAGON and ESPERANZA

TOLENTINO, Petitioners,
vs.
THE MANILA BANKING CORPORATION, substituted by FIRST SOVEREIGN
ASSET MANAGEMENT (SPV-AMC), INC., Respondent.
G.R. No. 195592 September 5, 2012
FACTS:
The case stems from a complaint for sum of money filed on April 18, 2000 before the
Regional Trial Court (RTC), Makati City by herein respondent, The Manila Banking
Corporation (TMBC), against herein petitioners, Magdiwang Realty Corporation
(Magdiwang), Renato P. Dragon (Dragon) and Esperanza Tolentino (Tolentino), after
said petitioners allegedly defaulted in the payment of their debts under the five
promissory notes they executed in favor of TMBC, which contained the following
terms:
Maturity Date
Amount
Promissory Note No. 4953
December 27, 1976
Php500,000.00
March 27, 1982
Php500,000.00
March 27, 1982
Php500,000.00
March 27, 1982
Php500,000.00
March 27, 1982
Php500,000.00

All promissory notes included stipulations on the payment of interest and additional
charges in case of default by the debtors. Despite several demands for payment
made by TMBC, the petitioners allegedly failed to heed to the banks demands,
prompting the filing of the complaint for sum of money.
Instead of filing a responsive pleading with the trial court, the petitioners filed on
October 12, 2000, which was notably beyond the fifteen (15)-day period allowed for
the filing of a responsive pleading, a Motion for Leave to Admit Attached Motion to
Dismiss5 and a Motion to Dismiss, raising therein the issues of novation, lack of
cause of action against individuals Dragon and Tolentino, and the impossibility of the
novated contract due to a subsequent act of the Congress.
The motions were opposed by the respondent TMBC, via its Opposition which
likewise asked that the petitioners be declared in default for their failure to file their
responsive pleading within the period allowed under the law.
RTC Order Declared the petitioners in default.
While this Court appreciates the efforts and tenacity shown by defendants counsel
for having prepared a [lengthy] pleading for his clients in so short a time, the Court
will have to rule that the Motion to Dismiss was nonetheless filed out of time, hence,
there is sufficient basis to declare defendants in default.
The petitioners motion for reconsideration was denied by the trial court in its Order
dated August 2, 2005. The ex parte presentation of evidence by the bank before the
trial courts Presiding Judge was scheduled in the same Order. Unsatisfied with the
RTC orders, the petitioners filed with the CA a petition for certiorari. CA Ruling on
RTCs Order of Default Affirmed RTCs order of default, holding that the RTC did
not commit grave abuse of discretion when it declared herein petitioners in default.
The denial of petitioners motion for reconsideration prompted the filing of a petition
for review on certiorari before this Court, which, through its Resolutions dated
March 5, 2008 and June 25, 2008, denied the petition for lack of merit. In the
meantime, TMBCs presentation of evidence ex parte proceeded before Presiding
Judge Oscar B. Pimentel of the RTC of Makati City.
RTC Ruling Favored TMBC (May 20, 2007).
WHEREFORE, premises considered, judgment is hereby rendered in favor of the

plaintiff as against:
1. Defendant Magdiwang Realty Corporation, requiring said defendant to pay
plaintiff the sum of P 500,000.00 as indicated in Promissory Note No. 4953;
2. Requiring defendant Magdiwang Realty Corporation to pay the plaintiff interest to
the principal loan at the rate of 14% per annum from 27 December 1976 until the
amount is paid;
3. Requiring the defendant Magdiwang Realty Corporation to pay plaintiff penalty
charges of 4% per annum from December 27, 1976 until the whole amount is paid;
and
4. Requiring defendant Magdiwang Realty Corporation to pay plaintiff attorneys fees
equivalent to 10% of the total outstanding obligation.

Further, judgment is rendered in favor of plaintiff and against defendants
Magdiwang Realty Corporation, Renato Dragon and Esperanza Tolentino ordering
said defendants to jointly and severally pay the plaintiff the following:
1. The principal amount of P 500,000.00 as indicated in Promissory Note No. 10045;
2. To pay the principal amount of P 500,000.00 as indicated in Promissory Note No.
10046;
10047;
10048;
5. To pay interest in the principal loan at the rate of sixteen (16%) percent per
annum as stipulated in PN Nos. 10045, 10046, 10047 and 10048 from March 27,
1981 until the whole amount is paid;
6. To pay penalty at the rate of one percent a month (1%) on the principal amount
[of] loan plus unpaid interest at the rate of 16% per annum in PN Nos. 10045, 10046,
10047 and 10048 starting from March 27, 1981 until the whole amount is paid; and
7. To pay 10% of the total amount due and outstanding under PN Nos. 10045, 10046,
10047 and 10048 as attorneys fees.
Costs against the defendants.
Petitioners motion for reconsideration was denied by the trial court, hence, it filed
an appeal with the CA.
While appeal was pending before the appellate court, TMBC and First Sovereign
Asset Management (SPV-AMC), Inc. (FSAMI) filed a Joint Motion for Substitution,
asking that TMBC be substituted by FSAMI after the former executed in favor of the
latter a Deed of Assignment covering all of its rights, title and interest over the loans
subject of the case.
CA Ruling Dismissed the petitioners appeal (October 11, 2010) and AFFIRMED
RTCs decision.
On the issue of prescription, the CA cited the rule that the prescriptive period is
interrupted in any of the following instances: (1) when an action is filed before the
court; (2) when there is a written extrajudicial demand by the creditors; and (3)
when there is any written acknowledgment of the debt by the debtor.
The prescriptive period was legally interrupted on September 19, 1984 when the
defendants-appellants, through several letters, proposed for the restructuring of
their loans until the plaintiff-appellee sent its final demand letter on September 10,
1999. Indeed, the period during which the defendants-appellants were seeking
reconsideration for the non-settlement of their loans and proposing payment
schemes of the same should not be reckoned against it. When prescription is
interrupted, all the benefits acquired so far from the lapse of time cease and, when
prescription starts anew, it will be entirely a new one.
This concept should not be equated with suspension where the past period is
included in the computation being added to the period after prescription is resumed.
Consequently, when the plaintiff-appellee sent its final demand letter to the
defendants appellants, thus, foreclosing all possibilities of reaching a settlement of
the loans which could be favorable to both parties, the period of ten years within
which to enforce the five promissory notes under Article 1142 of the New Civil Code
began to run again and, therefore, the action filed on April 18, 2000 to compel the
defendants-appellants to pay their obligations under the promissory notes had not
prescribed.
The defense of novation was also rejected by the CA, citing the absence of two
requirements for a valid novation, namely: (1) the clear and express release of the
original debtor from the obligation upon the assumption by the new debtor of the
obligation; and (2) the consent of the creditor thereto.
ISSUES:
1. Whether or not the prescriptive period was legally interrupted on September 19,
1984 when petitioners proposed restructuring of their loans.
2. Whether or not the principle of novation by the substitution of debtors was
erroneously employed by the petitioners to extricate themselves from the obligation
to the respondent.
3. Whether or not the court erred in affirming the trial courts ruling holding the
petitioners are liable for attorneys fees.
HELD:
1. YES. The ten (10)-year prescriptive period to file an action based on the subject
promissory notes was interrupted by the several letters exchanged between the
parties. This is in conformity with the second and third circumstances under Article
1155 of the New Civil Code (NCC) which provides that the prescription of actions is
interrupted when: (1) they are filed before the court; (2) there is a written
extrajudicial demand by the creditors; and (3) there is any written acknowledgment
of the debt by the debtor. In TMBCs complaint against the petitioners, the bank
sufficiently made the allegations on its service and the petitioners receipt of the
subject demand letters, even attaching thereto copies thereof for the trial courts
consideration.
During the banks presentation of evidence ex parte, the testimony of witness Mr.
Megdonio Isanan was also offered to further support the claim on the demand made
by the bank upon the petitioners. In the absence of a timely objection from the
petitioners on these claims, no error can be imputed on the part of the trial court,
and even the appellate court, in taking due consideration thereof.
As against the bare denial belatedly made by the petitioners of their receipt of the
written extrajudicial demands made by TMBC, especially of the letter of September
10, 1999 which was the written demand sent closest in time to the institution of the
civil case, the appreciation of evidence and pronouncements of the trial court in its
Order dated November 5, 2007 shall stand.
In addition to these, we take note that letters prior to the letter of September 1999
also form part of the case records, and the existence of said letters were not directly
denied by the petitioners.
2. NO. No evidence was presented to adequately establish that such novation

ensued. What the letters being invoked by the petitioners as supposedly establishing
novation only indicate that efforts on a repayment scheme were exerted by the
parties. However, nowhere in the records is it indicated that such novation ever
materialized.

3. NO. The applicable provision is Article 2208(2) of the NCC which allows the grant
thereof when the defendants act or omission compelled the plaintiff to litigate or to
incur expenses to protect its interest. Considering the circumstances that led to the
filing of the complaint in court, and the clear refusal of the petitioners to satisfy their
existing debt to the bank despite the long period of time and the accommodations
granted to it by the respondent to enable them to satisfy their obligations, we agree
that the respondent was compelled by the petitioners' acts to litigate for the
protection of the bank's interests, making the award of attorney's fees proper.
IN GENERAL:
The petition involves questions of fact that are beyond the ambit of a petition for
review on certiorari. Section 1, Rule 45 of the Rules of Court, as amended, reads:
Sec. 1. Filing of petition with Supreme Court. A party desiring to appeal by
certiorari from a judgment, final order or resolution of the Court of Appeals, the
Sandiganbayan, the Court of Tax Appeals, the Regional Trial Court or other courts,
whenever authorized by law, may file with the Supreme Court a verified petition for
review on certiorari. The petition may include an application for a writ of preliminary
injunction or other provisional remedies and shall raise only questions of law, which
must be distinctly set forth. The petitioner may seek the same provisional remedies
by verified motion filed in the same action or proceeding at any time during its
pendency.
Section 1, Rule 45 then categorically states that a petition for review on certiorari
shall raise only questions of law, which must be distinctly set forth. A question of law
arises when there is doubt as to what the law is on a certain state of facts, while
there is a question of fact when the doubt arises as to the truth or falsity of the
alleged facts. For a question to be one of law, the same must not involve an
examination of the probative value of the evidence presented by the litigants or any
of them. The resolution of the issue must rest solely on what the law provides on the
given set of circumstances. Once it is clear that the issue invites a review of the
evidence presented, the question posed is one of fact.
Applying the guidelines laid down by jurisprudence on the criteria for distinguishing
a question of law from a question of fact, it is clear that the petitioners are now
asking this Court to determine a question of fact, as their arguments delve on the
truth or falsity of the trial and appellate courts factual findings, the existence and
authenticity of the respondents documentary evidence, as well as the truth or falsity
of the TMBCs narration of facts in their complaint and the testimonial evidence
presented before the Presiding Judge in support of said allegations. (On the issue of
prescription)
Similarly, the issue of the alleged novation involves a question of fact, as it

necessarily requires a factual determination on the existence of the following
requisites of novation: (1) there must be a previous valid obligation; (2) the parties
concerned must agree to a new contract; (3) the old contract must be extinguished;
and (4) there must be a valid new contract. Needless to say, the respondents
entitlement to attorneys fees also depends upon the questioned factual findings.
The settled rule is that conclusions and findings of fact of the trial court are entitled
to great weight on appeal and should not be disturbed unless for strong and cogent
reasons because the trial court is in a better position to examine real evidence, as
well as observe the demeanor of the witnesses while testifying in the case. The fact
that the CA adopted the findings of fact of the trial court makes the same binding
upon this Court. The Supreme Court is not a trier of facts. It is not our function to
review, examine and evaluate or weigh the probative value of the evidence
presented. A question of fact would arise in such event. Although jurisprudence
admits of several exceptions to the foregoing rules, the present case does not fall
under any of them.
Even granting that the issues being raised by the petitioners may still be validly
entertained by this Court through the instant petition for review on certiorari, we
hold that their arguments and defenses are bound to fail for lack of merit.
Taking into consideration the banks allegations in its complaint and the totality of
the evidence presented in support thereof, coupled with the said circumstance that
the petitioners, by their own inaction, failed to make their timely objection or
opposition to the evidence, both documentary and testimonial, presented by TMBC to
support its case, we find no cogent reason to reverse the trial and appellate courts
findings.
Dispositive portion:
WHEREFORE, premises considered, the instant petition is hereby DENIED. The

Decision dated October 11, 2010 and Resolution dated January 31, 2011 of the Court
of Appeals in CA-G.R. CV No. 90098 are hereby AFFIRMED.

Philippine Tourism Authority vs. Philippine Golf Development & Equiptment;
GR no. 176628; March 19, 2012
FACTS:
The case at bar is a petition for Certiorari under Rule 65 of the 1997 Rules of Civil
Procedure, to annul the decision of the CA in which it dismissed the petition for
annulment of judgment which sought to set aside the decision of the RCT Muntinlupa
City. The said RTC held that the Philippine Tourism Authority (PTA) liable for its
unpaid obligation to Philippine Golf Development & Equipment, Inc. (PHILGOLF).
PTA, an agency of the Department of Tourism, whose main function is to bolster and
promote tourism, entered into a contract with Atlantic Erectors, Inc. (AEI) for the
construction of the Intramuros Golf Course Expansion Projects for a contract price of
P57,954,647.94. The civil works of the project commenced. Since AEI was incapable
of constructing the golf course aspect of the project, it entered into a sub-contract
agreement with PHILGOLF, a duly organized domestic corporation, to build the golf
course amounting to P27,000,000.00. The sub-contract agreement also provides that
PHILGOLF shall submit its progress billings directly to PTA and, in turn, PTA shall
directly pay PHILGOLF.
PHILGOLF filed a collection suit against PTA amounting to P11,820,550.53, plus

interest, for the construction of the golf course. Within the period to file a responsive
pleading, PTA filed a motion for extension of time to file an answer. The RTC granted
the motion for extension of time. PTA filed another motion for extension of time to
file an answer. The RTC again granted the motion.
RTC Muntinlupa City

Despite the RTCs liberality of granting two successive motions for extension of time,
PTA failed to answer the complaint. Thus, the RTC rendered a judgment of default
ruling in favor of the defendant which ordered the defendant to pay the plaintiff the
said outstanding obligation plus interest of 12% per annum, attorneys fees, cost of
litigation, moral damages, nominal damages and exemplary damages.
Court of Appeals
PTA seasonably appealed the case to the CA. But before the appeal of PTA could be
perfected, PHILGOLF already filed a motion for execution pending appeal with the
RTC. The RTC granted the motion and a writ of execution pending appeal was issued
against PTA. A notice of garnishment was issued against PTAs bank account at the
LBP NAIA-BOC Branch to fully satisfy the judgment. PTA filed a petition for certiorari
with the CA, imputing grave abuse of discretion on the part of the RTC for granting
the motion for execution pending appeal. The CA ruled in favor of PTA and set aside
the order granting the motion for execution pending appeal.
PTA withdrew its appeal of the RTC decision and, instead, filed a petition for
annulment of judgment under Rule 47 of the Rules of Court. The petition for
annulment of judgment was premised on the argument that the gross negligence of
PTAs counsel prevented the presentation of evidence before the RTC. CA dismissed
the petition for annulment of judgment for lack of merit. PTA questions this CA
action in the present petition for certiorari.
ISSUE:
1. WON the negligence of the PTAs counsel amounted to an extrinsic fraud
warranting an annulment of judgment.
2. WON that since PTA is a government entity, it should not be bound by the
inactions or negligence of its counsel.
3. WON there a petition for annulment of judgment is a proper remedy.
HELD: Petition unmeritorious.

The Rules of Court specifically provides for deadlines in actions before the court to
ensure an orderly disposition of cases. PTA cannot escape these legal technicalities
by simply invoking the negligence of its counsel. This practice, if allowed, would
defeat the purpose of the Rules on periods since every party would merely lay the
blame on its counsel to avoid any liability. The rule is that a client is bound by the
acts, even mistakes, of his counsel in the realm of procedural technique[,]and unless
such acts involve gross negligence that the claiming party can prove, the acts of a
counsel bind the client as if it had been the latters acts
1. No. Extrinsic fraud refers to any fraudulent act of the prevailing party in the
litigation which is committed outside of the trial of the case, whereby the
unsuccessful party has been prevented from exhibiting fully his case, by fraud or
deception practiced on him by his opponent.[9] Under the doctrine of this cited case,
we do not see the acts of PTAs counsel to be constitutive of extrinsic fraud. The
records reveal that the judgment of default was sent via registered mail to PTAs
counsel. However, PTA never availed of the remedy of a motion to lift the order of
default. Since the failure of PTA to present its evidence was not a product of any
fraudulent acts committed outside trial, the RTC did not err in declaring PTA in
default.
2. No. PTA was acting in a proprietary character. PTA also erred in invoking state
immunity simply because it is a government entity. The application of state immunity
is proper only when the proceedings arise out of sovereign transactions and not in
cases of commercial activities or economic affairs. The State, in entering into a
business contract, descends to the level of an individual and is deemed to have
tacitly given its consent to be sued.[13] Since the said project partakes of a
proprietary character entered into between PTA and PHILGOLF, PTA cannot avoid its
financial liability by merely invoking immunity from suit.
3. No. Annulment of Judgment is not the proper remedy. PTAs appropriate remedy
was only to appeal the RTC decision. Annulment of Judgment under Rule 47 of the
Rules of Court is a recourse equitable in character and allowed only in exceptional
cases where the ordinary remedies of new trial, appeal, petition for relief or other
appropriate remedies are no longer available through no fault of petitioner. In this
case, appeal was an available remedy. There was also no extraordinary reason for a
petition for annulment of judgment, nor was there any adequate explanation on why
the remedy for new trial or petition for relief could not be used. The Court is actually
at a loss why PTA had withdrawn a properly filed appeal and substituted it with
another petition, when PTA could have merely raised the same issues through an
ordinary appeal.
Lastly, a special civil action under Rule 65 of the Rules of Court is only available in
cases when a tribunal, board or officer exercising judicial or quasi-judicial functions
has acted without or in excess of its or his jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any
plain, speedy, and adequate remedy in the ordinary course of law. It is not a mode of
appeal, and cannot also be made as a substitute for appeal. It will not lie in cases
where other remedies are available under the law.
In sum, PTA had the remedy of appealing the RTC decision to the CA and, thereafter,
to the Court. Under the circumstances, the Court find no adequate reason to justify
the elevation of this case to the CA and then to the Court, under Rule 65 of the Rules
of Court.
LETICIA DIONA, represented by her Attorney-in-Fact, MARCELINA DIONA,

vs.
ROMEO A. BALANGUE, SONNY A. BALANGUE, REYNALDO A. BALANGUE,
and ESTEBAN A. BALANGUE, JR., G.R. No. 173559, January 7, 2013
FACTS:
The great of a relief neither sought by the party in whose favor it was given not
supported by the evidence presented violates the opposing partys right to due
process and may be declared void ab initio in a proper proceeding. Petitioner filed a
Petition for Review on Certiorari assailing the resolution granting the Petition for
Annulment of Judgment filed by the respondents seeking to nullify that portion of the
Regional Trial Court (RTC), Branch 75, Valenzuela City awarding petitioner 5%
monthly interest rate for the principal amount of the loan respondent obtained from
her. The Petition likewise assails the CAs Resolution denying petitioners Motion for
Reconsideration.
In 1991, respondents obtained a loan of P45,000.00 from petitioner payable in six

months and secured by a Real Estate Mortgage over their property located in
Marulas, Valenzuela. When the debt became due, respondents failed to pay
notwithstanding demand. Thus, petitioner filed with the RTC a Complaint praying
that respondents be ordered to pay the principal obligation, the damages, attorneys
fees, and to issue a decree of foreclosure for the sale at public auction of the
aforementioned parcel of land.
Respondents were served with summons thru respondent Sonny A. Balangue

(Sonny). With the assistance of Atty. Arthur C. Coroza (Atty. Coroza) of the Public
Attorneys Office, they filed a Motion to Extend Period to Answer. Despite the
requested extension, however, respondents failed to file any responsive pleadings.
Thus, upon motion of the petitioner, the RTC declared them in default and allowed
petitioner to present her evidence ex parte.
RTC decided in favour of the petitioner, ordering the respondents to pay the
petitioner, among others, the sum of FORTY FIVE THOUSAND (P45,000.00) PESOS,
representing the unpaid principal loan obligation plus interest at 5% per month.
Subsequently, petitioner filed a Motion for Execution, alleging that respondents did
not interpose a timely appeal. However, respondents filed a Motion to Set Aside
Judgment dated January 26, 2001, claiming that not all of them were duly served
with summons and that they had no knowledge of the case because their co-
respondent Sonny did not inform them about it. They prayed that the RTCs Decision
be set aside and a new trial be conducted.
RTC ordered the issuance of a Writ of Execution. In order to satisfy the writ,
petitioner moved for the public auction of the mortgaged property, which the RTC
granted. The property was sold in her favour for P420,000.00. Respondents filed a
Motion to Correct/Amend Judgment and To Set Aside Execution Sale, claiming that
the parties did not agree in writing on any rate of interest and that petitioner merely
sought for a 12% per annum interest in her Complaint. Surprisingly, the RTC
awarded 5% monthly interest (or 60% per annum) which increased their
indebtedness from P124,400.00 to P652,000.00.
RTC granted respondents motion and accordingly modified the interest rate
awarded from 5% monthly to 12% per annum. Then, respondents deposited the total
amount of P126,650.00.
Petitioner elevated the matter to the CA via a Petition for Certiorari under Rule 65 of
the Rules of Court. CA declared that the RTC exceeded its jurisdiction in awarding
the 5% monthly interest but at the same time pronouncing that the RTC gravely
abused its discretion in subsequently reducing the rate of interest to 12% per annum.
Furthermore, the court held that the proper remedy is not to amend the judgment
but to declare that portion as a nullity. Void judgment for want of jurisdiction is no
judgment at all, it cannot be the source of any right nor the creator of any obligation,
and no legal rights can emanate from it. CA annulled the said order.
Respondents filed with the CA a Petition for Annulment of Judgment and Execution
Sale with Damages, contending that the portion of the RTC Decision granting
petitioner 5% monthly interest rate is in gross violation of Section 3(d) of Rule 9 of
the Rules of Court and of their right to due process. According to respondents, the
loan did not carry any interest. Ruling of the Court of Appeals. Initially, the CA
denied due course to the Petition. Upon respondents motion, it reinstated and
granted the Petition and set aside portions of the RTCs Decision. The CA ruled that
aside from being unconscionably excessive, the monthly interest rate of 5% was not
agreed upon by the parties and that petitioners Complaint clearly sought only the
legal rate of 12% per annum. Following the mandate of Section 3(d) of Rule 9 of the
Rules of Court, the CA concluded that the awarded rate of interest is void for being
in excess of the relief sought in the Complaint.
Petitioners motion for reconsideration was denied by the CA.
ISSUE:
Whether or not the CA erred when it granted respondents petition for annulment of
judgment of the decision of the RTC despite the fact that said decision has become
final and already executed contrary to the Doctrine of Immutability of Judgment.
HELD: NO. The award of 5% monthly interest violated respondents right to due
process and, hence, the same may be set aside in a Petition for Annulment of
Judgment filed under Rule 47 of the Rules of Court.
A Petition for Annulment of Judgment under Rule 47 of the Rules of Court is a
remedy granted only under exceptional circumstances where a party, without fault
on his part, has failed to avail of the ordinary remedies of new trial, appeal, petition
for relief or other appropriate remedies. Said rule explicitly provides that it is not
available as a substitute for a remedy which was lost due to the partys own neglect
in promptly availing of the same. "The underlying reason is traceable to the notion
that annulling final judgments goes against the grain of finality of judgment.
Litigation must end and terminate sometime and somewhere, and it is essential to an
effective administration of justice that once a judgment has become final, the issue or
cause involved therein should be laid to rest."
While under Section 2, Rule 47 of the Rules of Court a Petition for Annulment of
Judgment may be based only on the grounds of extrinsic fraud and lack of
jurisdiction, jurisprudence recognizes lack of due process as additional ground to
annul a judgment. Grant of 5% monthly interest is way beyond the 12% per annum
interest sought in the Complaint and smacks of violation of due process. It is settled
that courts cannot grant a relief not prayed for in the pleadings or in excess of what
is being sought by the party. Due process considerations require that judgments
must conform to and be supported by the pleadings and evidence presented in court.
It is improper to enter an order which exceeds the scope of relief sought by the
pleadings, absent notice which affords the opposing party an opportunity to be heard
with respect to the proposed relief. The fundamental purpose of the requirement that
allegations of a complaint must provide the measure of recovery is to prevent
surprise to the defendant. The reason behind Section 3(d), Rule 9 of the Rules of
Court is to safeguard defendants right to due process against unforeseen and
arbitrarily issued judgment. This is akin to the very essence of due process. It
embodies "the sporting idea of fair play" and forbids the grant of relief on matters
where the defendant was not given the opportunity to be heard thereon.
In the case at bench, the award of 5% monthly interest rate is not supported both by
the allegations in the pleadings and the evidence on record. The Real Estate
Mortgage executed by the parties does not include any provision on interest. Clearly,
the RTCs award of 5% monthly interest or 60% per annum lacks basis and
disregards due process. It violated the due process requirement because
respondents were not informed of the possibility that the RTC may award 5%
monthly interest. They were deprived of reasonable opportunity to refute and
present controverting evidence as they were made to believe that the complainant
petitioner was seeking for what she merely stated in her Complaint.
Neither can the grant of the 5% monthly interest be considered subsumed by

petitioners general prayer for "other reliefs and remedies just and equitable under
the premises x x x." To repeat, the courts grant of relief is limited only to what has
been prayed for in the Complaint or related thereto, supported by evidence, and
covered by the partys cause of action. Besides, even assuming that the awarded 5%
monthly or 60% per annum interest was properly alleged and proven during trial, the
same remains unconscionably excessive and ought to be equitably reduced in
accordance with applicable jurisprudence.
Respondents former counsel was grossly negligent in handling the case of his
clients; respondents did not lose ordinary remedies of new trial, petition for relief,
etc. through their own fault. Ordinarily, the mistake, negligence or lack of
competence of counsel binds the client. A recognized exception to the rule is when
the lawyers were grossly negligent in their duty to maintain their clients cause and
such amounted to a deprivation of their clients property without due process of law.
In which case, the courts must step in and accord relief to a client who suffered
thereby.
Had the counsel carefully read the judgment it would have caught his attention and
compelled him to take the necessary steps to protect the interest of his client. But he
did not. Judging from how respondents former counsel handled the cause of his
clients, there is no doubt that he was grossly negligent in protecting their rights, to
the extent that they were deprived of their property without due process of law.
The Court is appalled by petitioners invocation of the doctrine of immutability of

judgment. Petitioner does not contest as she even admits that the RTC made a
glaring mistake in awarding 5% monthly interest. Amazingly, she wants to benefit
from such erroneous award. This Court cannot allow this injustice to happen.
WHEREFORE, the instant Petition is hereby DENIED.

MANCHESTER DEVELOPMENT V. CA MANCHESTER DEVELOPMENT V. CA
FACTS:
A complaint for specific performance was filed by Manchester Development
Corporation against City Land Development Corporation to compel the latter to
execute a deed of sale in favor Manchester. Manchester also alleged that City Land
forfeited the formers tender of payment for a certain transaction thereby causing
damages to Manchester amounting to P78,750,000.00. This amount was alleged in
the body of their Complaint but it was not reiterated in the PRAYER of same
complaint.
Manchester paid a docket fee of P410.00 only. Said docket fee is premised on the
allegation of Manchester that their action is primarily for specific performance hence
it is incapable of pecuniary estimation.
The court ruled that there is an under assessment of docket fees hence it ordered
Manchester to amend its complaint. Manchester complied but what it did was to
lower the amount of claim for damages to P10M. Said amount was however again not
stated in the prayer.
ISSUE:
Whether or not the amended complaint should be admitted.
HELD: The amended complaint should not be admitted.
The docket fee, its computation, should be based on the original complaint. A case is
deemed filed only upon payment of the appropriate docket fee regardless of the
actual date of filing in court. Here, since the proper docket fee was not paid for the
original complaint, its as if there is no complaint to speak of. As a consequence,
there is no original complaint duly filed which can be amended. So, any subsequent
proceeding taken in consideration of the amended complaint is void.
Manchesters defense that this case is primarily an action for specific performance is
not merited. The Supreme Court ruled that based on the allegations and the prayer
of the complaint, this case is an action for damages and for specific performance.
Hence, it is capable of pecuniary estimation.

Further, the amount for damages in the original complaint was already provided in
the body of the complaint. Its omission in the PRAYER clearly constitutes an attempt
to evade the payment of the proper filing fees. To stop the happenstance of similar
irregularities in the future, the Supreme Court ruled that from this case on, 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
SUN INSURANCE OFFICE, LTD. (SIOL), E. B. PHILLIPS AND D. J. WARBY vs.

HON. MAXIMIANO C. ASUNCION, Presiding Judge, and MANUEL CHUA UY
PO TIONG; G.R. NO. 79937-38, FEB. 13, 1989
FACTS:
Sun Insurance filed a complaint 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 with the RTC of Makati. Private respondent as
declared in default for failure to file the required answer within the reglementary
period. Later, Tiong also filed a case against Sun Insurance for the refund of
premiums and the issuance of a writ of preliminary attachment, seeking the payment
of actual, compensatory, moral, exemplary and liquidated damages, attorneys fees,
expenses of litigation, and costs of suit with the RTC of Quezon City. However, the
amount of damages sought by Tiong was not specified, though it can be inferred from
the body of the complaint that it's around P50 million. Tiong only paid P210 as
docket fee for his complaint which prompted Sun Insurance to raise an objection,
which was disregarded by the then presiding judge of the case Judge Jose Castro.
Upon the order of the SC, the records of the complaint filed by Tiong along with 22
other cases assigned to the branches of the RTC of Quezon City were under
investigation for under-assessment of docket fees. Later, the SC returned the records
to the RTC and were re-raffled to the other judges of the said court with the
exclusion of Judge Castro. The SC also ordered the judges, through a Resolution, to
reassess the docket fees of the re-raffled cases and that in case of deficiency, to order
its payment. The clerks of court were also required to issue certificates of re-
assessment of docket fees. However, the clerk of court who was assigned to reassess
the docket fee of the complaint filed by Tiong had a difficulty complying with the
Resolution because the exact amount sought to be recovered was not indicated in
the complaint. Thus, the now presiding Judge Maximiano Asuncion required the
parties to comment on the clerk of court's report.
Tiong filed a "Compliance" and a "Re-Amended Complaint" and indicated P10 million
as actual compensatory damages in his prayer. But, in the second amended
complaint Tiong filed, he alleged P44, 601, 623.70 as actual and compensatory
damages and attorney's fees. Judge Asuncion admitted the second amended
complaint and the clerk of court reassessed the docket fee to be P39, 786, which was
subsequently paid by Tiong. Sun Insurance questioned the order of Judge Asuncion
admitting the second amended complaint with the CA. However, while the case filed
by Sun Insurance was still pending in the CA, Tiong filed another supplemental
complaint claiming an additional P20 million as damages, making his total claim for
damages to be P64, 601, 623.70. Seven months after filing said supplemental
complaint, Tiong paid the additional docket fee of P80, 396.
Subsequently, the CA ruled on the petition filed by Sun Insurance. The CA ordered
the RTC to reassess the docket fee to be paid by Tiong on the basis of the amount of
P25, 401, 707. The case was then elevated to the SC. But during the pendency of this
petition in the SC and after the promulgation of the decision in Manchester, Tiong
complied with the CA's decision and paid an additional docket fee of P62, 132.92
based on the amount stipulated by the CA. Thus, Tiong paid a total of P182, 824. 90
as docket fee.
Sun Insurance (Pet): The docket fee paid by Tiong is not sufficient. Tiong should pay
a total of P257, 810.49 because the total damages Tiong actually sought was P64,
601, 620.70. Pursuant to the ruling in Manchester, Tiong's complaint should be
dismissed and all incidents arising therefrom should be annulled for Tiong's failure
to pay the proper docket fee.
Tiong (Res): The ruling in Manchester cannot be applied retroactively. At the time
the complaint was instituted, the Manchester ruling was not yet made. The correct
jurisprudence to apply in the case, then, is the Magaspi v. Ramolete doctrine wherein
the SC held that the trial court acquired jurisdiction over the case even if the docket
fee paid was insufficient.
ISSUES:
1) WON the Manchester ruling can be applied retroactively.
2) WON Tiong could be considered to have filed the case even if the docket fee paid
was insufficient and that the trial court could be considered to have acquired
jurisdiction over the case.
HELD:
1) Yes, 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.
2) Yes, although there was an obvious intent on the part of TIong to defraud the
government of the docket fee due through his amendments in his complaints, a more
liberal interpretation of the rules is called for considering that, unlike in the

Manchester case, Tiong demonstrated his willingness to abide by the rules by paying
the additional docket fees as required.
Thus, even if the Manchester ruling was applied, the SC, through this case provided
the following guidelines regarding docket fees:
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.
This petition was then dismissed. The Clerk of Court was also instructed to reassess
and determine the additional filing fee to be paid by Tiong considering the total
amount of the claim sought in his original complaint and supplemental complaint;
and to require Tiong to pay the deficiency.
Ballatan v. CA, 304 SCRA 34
FACTS:

Eden Ballatan, together with other petitioners, is living in and registered owners of
Lot No. 24. Respondent Winston Go is living in and registered owners of Lot No. 25
and 26. And Li Ching Yao is living in and the registered owner of Lot. 27. The Lots
are adjacent to each other.
When Ballatan constructed her house in her lot, she noticed that the concrete fence
and side pathway of the adjoining house of respondent Winston Go encroached on
the entire length of the eastern side of her property. She was informed by her
contractor of this discrepancy, who then told respondent Go of the same.
Respondent, however, claims that his house was built within the parameters of his
fathers lot; and that this lot was surveyed by engineer Jose Quedding of the Araneta
Institute of Agriculture.
Petitioner called the attention on the matter and so the latter authorized another
survey of the land by Engineer Quedding. The latter then did the survey twice which
led to the conclusion that Lots Nos 25, 26 (owned by respondent Go) and 27 (owned
by Li Ching Yao) moved westward to the eastern boundary of Lot 24 (owned by
petitioner Ballatan.) (it was later on discovered by the courts that Go encroached 42
square meters from the property of Ballatan and Yao encroached 37 square meters
on Gos property, all of which were in GOOD FAITH)
Ballatan made written demands to the respondent to remove their improvements and
since the latter wasnt answering the petitioner filed accion publiciana in court. Gos
filed their Answer with Third-Party Complaint impleading as third party defendants
respondents Li Ching Yaoand including Engineer Quedding as well as the Araneta
Institute of Agriculture.
RTC ruled in favor of the petitioner ordering respondent Go to demolish their

improvements and pay damages to Petitioner but dismissing the third-party
complaint.
CA affirmed the dismissal of the third party-complaint as to Araneta Institute of

Agriculture but reinstated the the complaint against Yao and the Engineer. CA also
affirmed the demolition and damages awarded to petitioner and added that Yao
should also pay respondent for his encroachment of respondent Gos property. Jose
Quedding was also ordered to pay attorneys fees for his negligence.
ISSUE:
Whether or not the CA erred in not dismissing the third-party complaint due to non-
payment of any filing or docket fees
HELD: No. The Decision of the Court of Appeals dismissing the third-party complaint
against Araneta Institute of Agriculture is affirmed.
The Answer with Third-Party Complaint was admitted by the trial court without the
requisite payment of filing fees, particularly on the Go's prayer for damages. The
trial court did not award the Go's any damages. It dismissed the third-party
complaint. The Court of Appeals, however, granted the third-party complaint in part
by ordering third-party defendant Jose N. Quedding to pay the Go's the sum of
P5,000.00 as attorney's fees.
The appellate court correctly dismissed the third-party complaint against Araneta
Institute of Agriculture. The claim that the discrepancy in the lot areas was due to
Araneta Institute of Agriculture's fault was not proved. The appellate court, however,
found that it was the erroneous survey by Engineer Quedding that triggered these
discrepancies. And it was this survey that respondent Winston Go relied upon in
constructing his house on his father's land. He built his house in the belief that it was
entirely within the parameters of his father's land. In short, respondents Go had no
knowledge that they encroached on petitioners' lot. They are deemed builders in
good faith until the time petitioner Ballatan informed them of their encroachment on
her property.
Sps. Go v. Tong, G.R. No. 151942, November 27, 2003

FACTS:
Petitioner Juana Tan Go (petitioner Juana) purchased a cashiers check dated
September 13, 1996 from the Far East Bank and Trust Company (FEBTC) Lavezares,
Binondo Branch in the amount of P500,000.00, payable to Johnson Y. Tong
(respondent).
On petitioner Juanas instruction, the cashiers check bore the words Final
Payment/Quitclaim after the name of payee respondent allegedly to insure that
respondent would honor his commitment that he would no longer ask for further
payments for his interest in the informal business partnership which he and she had
earlier dissolved. After the check was delivered to respondent, he deposited it with
the inscribed words already erased, hence, it was not honored. Respondents counsel
subsequently wrote to the manager of FEBTC Lavezares Branch informing that the
words Final Payment/Quitclaim on the check had been unintentionally and
inadvertently erased without being initialed by the bank or the purchaser thereof and
thus requesting that the check be replaced with another payable to Johnson Tong-
Final Settlement/Quitclaim with the same amount, the bank charges therefor to be
paid by his client-respondent.
FEBTC did not grant the request of respondents counsel, hence, respondent filed a
complaint against FEBTC and petitioner Juana and her husband Gregorio Go at the
Manila RTC, for sum of money, damages, and attorneys fees. Petitioners Juana and
her husband and FEBTC, answering the complaint, alleged that the erasure of the
words Final Payment/Quitclaim was intentional on respondents part, reflective of his
intention to collect more from petitioner Juana, hence, the non-issuance of a
replacement check was justified. During the pendency of the case, petitioners son,
George Tan Go, filed a criminal complaint against respondent for falsification of the
check. The criminal complaint was, however, subsequently dismissed by the Manila
Prosecutors Office.
On August 25, 1998, respondent filed a Motion for Leave to File a Supplemental
Complaint and to Admit the Attached Supplemental Complaint which Supplemental
Complaint alleged that petitioners used their son to file the criminal complaint for
falsification against him which caused damages, hence, prayed for an increase in the
amount of moral and exemplary damages sought to be recovered from P2.5 million to
P55 million and prayed for the award of actual damages of P58,075.00. The motion

was set for hearing on September 4, 1998. Copy of the motion to petitioners was sent
by registered mail.
By Order of September 4, 1998, Public Respondent granted the motion and admitted
the Supplemental Complaint noting that petitioners had been furnished copy of the
Motion for Leave but that there had been no comment thereon. Inadequately,
Petitioners and FEBTCs Comment-Opposition were subsequently filed. More so,
Petitioners and FEBTC filed their respective Motions for Reconsideration of the
Order. On November 18, 1998, petitioners filed a Manifestation of Deposit and
deposited to the RTC Clerk of Court the amount of P500,000.00 representing the
amount of the check, subject to the condition that it shall remain deposited until the
disposition of the case.
Petitioners and FEBTCs separate Motions for Reconsideration of the September 4,

1998 Order were later denied by Order of December 4, 1998, hence, petitioners filed
their Answer to the Supplemental Complaint with Counterclaim, alleging as Special
Affirmative defenses that their son George took it upon himself to file it in his own
right, without their involvement in any way and that public respondent cannot
prosecute his Supplemental Complaint, and the same should be dismissed, unless the
corresponding docket fee and legal fees for the monetary claims in the amount of
P55,057,075.00 are paid for.
On February 5, 1999, public respondent, acting on the verbal manifestation/motion
of respondents counsel, allowed the release of petitioners P500,000.00 deposit to
respondent. By order of November 17, 1999, public respondent, in the interest of
justice and because of the huge amount of outlay involved, allowed respondent to
first deposit P25,000.00 on or before December 15, 1999 and P20,000.00 every
month thereafter until the full amount of docket fees is paid, and only then shall the
deposits be considered as payment of docket fees. By order of April 11, 2000,
Petitioners Motion for Reconsideration of the November 17, 1999 Order was denied.
Ruling of the Court of Appeals
On May 30, 2000, Petitioners, by a Petition for Certiorari before the CA, alleged that
respondent judge committed grave abuse of discretion when he issued the Orders of
February 5, 1999 allowing the release of the P500,000.00 deposit to respondent,
November 17, 1999 allowing the payment, on staggered basis, of the docket fees for
the Supplemental Complaint and April 11, 2000 denying the Motion for
Reconsideration of the November 17, 1999 Order.
According to the CA, petitioners failed to assail, within the prescribed period,
respondent judges February 5, 1999 Order allowing the release of the money
deposited by them. It was only in their May 30, 2000 Petition before the CA that they
questioned the Order. Moreover, the appellate court held that, anyway, respondent
was entitled to the deposit, which represented the amount indicated on the check
that belonged to him.

As to the November 17, 1999 Order allowing respondent to pay the docket fee on a
staggered basis and the April 11, 2000 Order denying the Motion for
Reconsideration thereof, the CA held that payment of the prescribed docket fee
within a reasonable period is permitted but in no case beyond the applicable
prescriptive or regular period. In that case, the court a quo opined that the docket
fee payment scheme imposed by the respondent judge cannot be said to have been
issued with grave abuse of discretion.
Hence, Petitioner appeal to the Supreme Court assailing the Decision and Resolution
of the Court of Appeals (CA) denying their petition and petitioners Motion for
Reconsideration.
ISSUES:
I. Whether or not the Petition for Certiorari under Rule 65 was proper.
II. WON respondent judge committed grave abuse of discretion when he issued the
February 5, 1999 Order allowing the release of their P500,000 bank deposit.
III. WON respondent judge and the CA erred in allowing respondent to pay the
docket fee on a staggered basis.
IV. WON public respondent Judge Juan Nabong committed grave abuse of discretion
in not suspending the proceedings pending appeal with the Honorable Court of
Appeals, and in refusing to inhibit himself.
HELD: The Petition is denied.
I. NO. The proper remedy should be based on Rule 45 as what is assailed is an

error of judgment of the CA and not that of grave abuse of discretion amounting to
lack or excess jurisdiction. When an error of judgment of the CA is brought up to this
Court for review, the action is properly designated as a petition for review and not a
special civil action. Thus, while the instant Petition is one for certiorari under Rule
65 of the Rules of Court, the assigned errors are properly addressed in a petition for
review under Rule 45.
Accordingly, when parties adopt an improper remedy, their petitions may be
dismissed outright. However, the Supreme Court is empowered by the Constitution,
in the interest of substantial justice, to provide leniency on procedural technicalities
in order to rule speedily on cases and demonstrate that even without the procedural
infirmity, the Petition should be rejected due to its lack of merits. For certiorari under
Rule 65 to lie, there must be an abuse of discretion committed of which must be
grave, as when power is exercised arbitrarily or despotically by reason of passion or
personal hostility; and such exercise must be so patent and gross as to amount to an
evasion of positive duty, or to a virtual refusal to perform it or to act in contemplation
of law. These conditions are absolutely wanting in the present case.
II. NO. Respondent was entitled to the deposit, because it represented the amount
indicated on the check that undeniably belonged to him. In all the pleadings they
filed, petitioners never denied that the amount of P500,000 properly belonged to
him. Notwithstanding, the petitioners failed to assail, within the prescribed period,
the Order allowing the release of the same. It has been laid down on the foregoing
facts that on February 5, 1999, respondent, through his counsel, made his oral
manifestation to withdraw the amount deposited. But, it was only on May 30, 2000,
upon the filing of their Petition for Certiorari with the CA, when petitioners
questioned the Order allowing the withdrawal of the deposit.
III. NO. Plainly, while the payment of the prescribed docket fee is a jurisdictional
requirement, even its nonpayment at the time of filing does not automatically cause
the dismissal of the case, as long as the fee is paid within the applicable prescriptive
or reglementary period; more so when the party involved demonstrates a willingness
to abide by the rules prescribing such payment.
In the case of Sun Insurance v. Asuncion, thus held: 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. As a rule, docket fees should be paid upon the filing of the initiatory
pleadings. However, for cogent reasons to be determined by the trial judge,
staggered payment thereof within a reasonable period may be allowed. Unless grave
abuse of discretion is demonstrated, the discretion of the trial judge in granting
staggered payment shall not be disturbed.
IV. NO. Because they were never raised before the CA. It is well-settled that
parties are not permitted to raise before this Court issues that were not taken up
below.

NATIONAL STEEL CORPORATION, vs. COURT OF APPEALS, HON. ARSENIO
J. MAGPALE, and JOSE MA. P. JACINTO, G.R. No. 123215. February 2, 1999
FACTS:
This is a petition for review on certiorari of the decision, dated September 11, 1995,
of the Court of Appeals, which dismissed the special civil action for certiorari filed by
petitioner National Steel Corporation (NSC) to set aside the order, dated April 6,
1994, of the Regional Trial Court, Branch LVII, City of Makati. In the said order, the
trial court denied the motion of petitioner NSC to dismiss the complaint for recovery
of personal property which private respondent Jose P. Jacinto had filed.
Private respondent Jacinto was the former owner of record of 100 shares of stock of
the Manila Golf and Country Club (MGCC) now owned by and registered in the name
of petitioner NSC. On February 9, 1990, he filed a complaint against the NSC,
alleging that:
4. In or about 1970, for valuable considerations, Manila Golf and Country Club, Inc.
(MGCCI) issued its Stock Certificate No. 1361 to plaintiff representing 100 shares of
MGCCI.
5. From about 1972 up to the early part of February 1986, plaintiff was in abroad and
could not return to the Philippines for reasons beyond his control.
6. When plaintiff returned to the Philippines in 1986, he discovered that Stock
Certificate No. 1361 had been cancelled and a replacement Stock Certificate had
been issued in the name of NSC.
7. The cancellation and transfer of plaintiffs Stock Certificate No. 1361 is void for the
reasons that: there was no meeting of minds, there was no specific contract between
plaintiff and NSC or any party covering the alleged transfer nor was there any
consideration for the same.
8. Despite repeated demands upon NSC to return and re-transfer plaintiffs 100
shares in MGCCI formerly covered by said Stock Certificate No. 1361, NSC failed
and refused and still fails and refuses to comply with the same.
9. MGCCIs act in cancelling plaintiffs stock certificate No. 1361 and issuing a
replacement certificate in the name of NSC is without basis and illegal considering
that there was no valid document evidencing the assignment, sale or transfer by
plaintiff to NSC of MGCCI stock certificate No. 1361.
10. In consequence of NSC and MGCCIs illegal act in causing the cancellation and
transfer of plaintiffs Stock Certificate No. 1361 unto NSCs name:
10.1. Plaintiff suffered mental anguish for which an award of moral damages of P1
Million is proper;
10.2. Plaintiff was constrained to litigate and secure the services of counsel for a fee
of P100,000.00 and for which NSC and MGCCI should be held liable.
Based on the foregoing allegations, Jacinto prayed:

WHEREFORE, it is respectfully prayed that judgment be rendered:
1. Ordering NSC to execute a deed of assignment re-transferring unto plaintiff the

MGCCI certificate issued to the former in replacement of Stock Certificate No. 1361
and to surrender said Deed of Assignment, together with the MGCCI certificate
issued to NSC (in replacement of Stock Certificate No. 1361) for cancellation thereof
and to order MGCCI to cancel said stock certificate and issue a new one in the name
of Jose Ma. P. Jacinto;

2. If for any reason whatsoever NSC fails or refuses to execute the deed of
assignment and surrender NSCs replacement stock certificate, MGCCI be ordered
to:
2.1. Cancel in its stock and transfer book the stock certificate issued to NSC issued
in replacement of certificate No. 1361;
2.2. Issue a new stock certificate in the name of NSC or the stock certificate that
might have been issued in replacement thereof.
2.3. Declare as lost and of no force and effect the MGCCI stock certificate now
outstanding and registered in the name of NSC.
3. Ordering NSC and MGCCI to pay plaintiff, jointly and severally:
3.1. P1 Million as moral damages; and

3.2. P100,000.00 as attorneys fees.
Other reliefs are also prayed for. NSC sought the dismissal of the complaint on the
ground of prescription, but its motion was denied by the trial court in an order, dated
November 9, 1990. NSC brought a special civil action for certiorari in the CA, but
again its petition was dismissed by the appellate court on August 30, 1991. Its
attempt to secure review in this Court failed as its petition was dismissed in a
resolution, dated March 18, 1992. NSC then filed its answer, after which trial was
held. It thereafter filed a motion to dismiss the complaint against it on the ground of
lack of jurisdiction. It alleged:
Plaintiff paid docket and other fees totalling P4,040.00. The certification of Clerk of
Court Ma. Corazon Cecelia P. Cuba is attached as Annex A:
2. Under Sec. 7(a) of Rule 141, as amended by the Resolution of the Supreme Court
En Banc dated September 4, 1990, the docket fees for filing an action . . . . is P600
for the first P150,000.00 and P5.00 for each P1,000.00 in excess of P150,000.00.
3. The actual value of the MGCCI share certificate as of February, 1990, when the
complaint was filed, was P5,511,000.00. A certification issued by the MGCCI
attesting to the fair market value of a MGCCI share is attached as Annex B.
4. This means that the correct docket fee for the filing of plaintiffs complaint is
approximately P26,805.00 and not P4,040.00 which is the amount plaintiff actually
paid.
....
6. The failure of plaintiff to pay the correct filing fees on February 13, 1990 meant
that this court did not acquire jurisdiction over plaintiffs action. Under the ruling of
Sun Insurance, and as explained below, the plaintiff cannot now pay the deficiency in
the filing fees because it is already beyond the applicable prescriptive or
reglementary period.
The trial court denied petitioners motion in an order, dated April 6, 1994. Hence, the
latter brought a special civil action for certiorari in the CA, but its petition was
dismissed on September 11, 1995. The CA ruled:
The principal relief, or prayer in private respondents complaint is specific, for the
NSC to execute a deed of assignment re-transferring unto plaintiff the MGCCI
certificate x x x in replacement of stock certificate No. 1861 x x x.
There is no allegation in the complaint of any quantified amount and/or of the actual
value of the stock certificate in question. There is also no separate cause of action
and/or prayer in the face of the complaint that private respondent, even in the
alternative, prayed that if the principal relief is unavailing, that defendants be
ordered to pay him the actual or equivalent value of the stock certificate, hence there
is even no reason or basis to move for a more definite statement or for a bill of
particulars of any matter which is not averred in the complaint with sufficient
definiteness or particularity to enable petitioner to properly prepare for a more
responsive pleading or to prepare for trial.
Perspicaciously, what should guide the office of the Clerk of Court, RTC, Makati,
Metro Manila, in assessing the correct docket fees for the filing of the complaint in
Civil Case No. 90-4051, when it was filed on February 13, 1990, is what is alleged
and prayed for in the complaint. It would be uncalled for and baseless for the clerk of
court to consider at that point in time the supposed actual value of the MGCCI share
certificate as of February, 1990, x x x (in the amount of) P5,511,000.00, and then and
there assess an additional docket fee of P22,765.00 (P26,805.00 minus P4,040.00),
precisely because the said sum of P5,511,000.00 is not alleged in the body of the
complaint, and which is not also sought to be recovered in the action.
There can be no divergence of opinion from the allegations, designation and the
reliefs prayed for, as clearly and definitively spelled out in the face of the complaint,
that private respondents principal relief is for petitioner NSC to execute a deed of
assignment re-transferring unto plaintiff the MGCCI certificate issued to the former
in replacement of stock certificate No. 1861 x x x. And there also appears to be no
hint of any intention on the part of private respondent to mislead the clerk of court in
assessing the correct fees, or to evade the payment of the correct fees. Hence, this
petition.
ISSUE:
(1) Whether or not this case is one for specific performance rather than for recovery
of property
(2) Wether or not the trial court has jurisdiction over the case despite the incorrect
payment of Jacinto of the docket fees
HELD:
(1) No. It is one for the recovery of damages.
Petitioner NSC correctly argues that the action in this case is for the recovery of
property rather than for specific performance and, hence, the docket fee should be
based on the value of the property sought to be recovered. It is similar to an action in
which petitioner seeks the execution of a deed of sale of a parcel of land in his favor.
Such action has been held to be for the recovery of the real property and not for
specific performance since his primary objective is to regain the ownership and
possession of the parcel of land.
As in this case, plaintiff, herein private respondent Jacinto, seeks the execution in his
favor of a deed of assignment of shares of stock, it follows that the action is for the
recovery of personal property, the main purpose of which is to regain the ownership
and possession of the said shares of stock.
Accordingly, as petitioner NSC contends, Jacinto should pay docket fees based on the
value of the shares of stock and the amount of damages he seeks to recover. Under
Rule 141, 7(a) of the Rules of Court as it stood at the time of the filing of the
complaint against petitioner, docket fees for ordinary civil actions should be based on
the total sum claimed, exclusive of interest, or the stated value of the property in
litigation. Thus, the docket fees should be computed on the basis of the value of the
property and the amount of related damages claimed, exclusive of interest. As we
held in Tacay v. Regional Trial Court, where the action involves real property and a
related claim for damages as well, the legal fees shall be assessed on the basis of
both (a) the value of the property and (b) the total amount of related damages
sought. The Court acquires jurisdiction over the action if the filing of the initiatory
pleading is accompanied by the payment of the requisite fees, or, if the fees are not
paid at the time of the filing of the pleading, as of the time of full payment of the fees
within such reasonable time as the court may grant, unless, of course, prescription
has set in in the meantime.
(2) Yes. It does not follow, however, that the trial court should have dismissed the
complaint for failure of private respondent to pay the correct amount of docket fees.
Although the payment of the proper docket fees is a jurisdictional requirement, the
trial court may allow the plaintiff in an action to pay the same within a reasonable
time before the expiration of the applicable prescriptive or reglementary period. If
the plaintiff fails to comply with this requirement, the defendant should timely raise
the issue of jurisdiction or else he would be considered in estoppel. In the latter case,
the balance between the appropriate docket fees and the amount actually paid by the
plaintiff will be considered a lien on any award he may obtain in his favor.
In the case at bar, petitioner NSC filed in 1990 a motion to dismiss but did not raise
this point. Instead it based his motion on prescription. Upon the denial by the trial
court of its motion to dismiss, it filed an answer, submitted its pre-trial brief, and
participated in the proceedings before the trial court. It was only in 1993 more than
three years after filing its motion to dismiss that petitioner NSC again filed a motion
to dismiss the action on the ground of lack of jurisdiction. Clearly, petitioner is
estopped from raising this issue. Indeed, while the lack of jurisdiction of a court may
be raised at any stage of an action, nevertheless, the party raising such question may
be estopped if he has actively taken part in the very proceedings which he questions
and he only objects to the courts jurisdiction because the judgment or the order
subsequently rendered is adverse to him.
WHEREFORE, the decision of the Court of Appeals, dated September 11, 1995, is
AFFIRMED. The deficiency in the payment of the docket fees shall be a lien on any
judgment, which may be rendered in favor of private respondent Jose P. Jacinto.


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ATTY. CHRISTIAN KIT G. VILLASIS

CASE DIGESTS | 2C 2015 2016 | CIVIL PROCEDURE

Margarita Marquez Alma Jose (Margarita) sold for consideration of P160,000.00 to

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DOMINADOR B. BUSTOS vs. ANTONIO G. LUCERO, G.R. No. L-2068,

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CASE DIGESTS | 2C 2015 2016 | CIVIL PROCEDURE

FELIX MARTOS, JIMMY ECLANA, RODEL PILONES, RONALDO NOVAL,

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The verification requirement is significant, as it is intended to secure an assurance

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The present controversy involves a parcel of land located in Valenzuela City

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Commissioner of Internal Revenue vs Migrant Pagbilao Corporation, G.R. No.

MPC is a domestic corporation engaged in the business of power generation and

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SM Land, Inc., et al. v. City of Manila, et al., G.R. No. 197151

CASE DIGESTS | 2C 2015 2016 | CIVIL PROCEDURE

Under Sec. 3 Rule 17 of the 1997 Rules of Civil Procedure:

CASE DIGESTS | 2C 2015 2016 | CIVIL PROCEDURE

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Subsequently, the COMELEC Chairman Harriet O. Demetriou issued a memorandum

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Both parties filed their respective motions for reconsideration.

On February 8, 2002, respondent judge issued the second assailed Resolution

In refutation of petitioners arguments, PHOTOKINA contends that mandamus is an

Whether or not there is a breach of violation of hierarchy of Courts.

Whether or not a petition for mandamus is the appropriate remedy to enforce

Whether or not a successful bidder may compel a government agency to formalize a

1. No, the OSG has standing to file the present petition.

CASE DIGESTS | 2C 2015 2016 | CIVIL PROCEDURE

Hence, while petitioners stand is contrary to that of the majority of the

2. There is no violation of the hierarch of Courts.

"x x x. As said in Lowe vs. Phelps (14 Bush, 642):

CASE DIGESTS | 2C 2015 2016 | CIVIL PROCEDURE

4. PHOTOKINA, though the winning bidder, cannot compel the COMELEC to

Hence, the existence of appropriations and the availability of funds are

The objections of then Chairman Demetriou to the implementation of the VRIS

The authority of public officers to enter into government contracts is circumscribed

United Claimants Association of NEA v. National Electrification

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Continue direct connection for industries authorized under the BOI-NPC

Pursuant to such Cabinet Memorandum, respondent Cagayan Electric Power and

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Hence, the present petition to the SC.

CASE DIGESTS | 2C 2015 2016 | CIVIL PROCEDURE