CASE NO.

G.R. No. 127692 March 10, 2004

FORTUNATO GOMEZ and AURORA GOMEZ, petitioners,
vs.
COURT OF APPEALS, ADOLFO TROCINO and MARIANO TROCINO, respondents.

FACTS: Sometime in 1975, the spouses Jesus and Caridad Trocino mortgaged two
parcels of land. The mortgage was subsequently foreclosed. The respondent spouses
Trocino sold the property to petitioners spouses who in turn, redeemed the lands from
mortgagee. The spouses Trocino, however, refused to convey ownership of the properties
to petitioners; hence, spouses Gomez sued spouses Trocino for delivery of titles. The
husband Trocino died before the suit was filed, thus his children Adolfo and Mariano
impleaded in the suit. Summons was served and it was only received by Caridad Trocino
in behalf of the children. The RTC rendered judgment against the spouses Trocino and
the heirs.Adolfo and Mariano Trocino petitioned for the annulment of the judgment of the
RTC with the CA alleging that no jurisdiction was acquired over them. At that time Adolfo
Trocino was already residing in Ohio, U.S.A and Mariano Trocino was in Talibon, Bohol.
And both were not found in Cebu City at the time summons were served.

ISSUE:

1. What was the nature of the complaint, upon which the manner of the service of
summons should be based?
2. Was there a valid service of summons?
3. If personal service were impossible to comply what should have been done?

RULING:

1. The action was an action in personam, while it is a real action because it affects
title or possession of the land, it does not automatically follow that the action is one in
rem. But it is an action against a person on the basis of the personal liability of non
delivery of the titles. Thus, personal service of summons upon the private respondents is
essential in order for the court to acquire jurisdiction over the person.

2. There was no valid summons. In actions in personam, summons on the defendant

must be served by handing a copy thereof to the defendant in person, or, if he refuses to
receive it, by tendering it to him. This is specifically provided in Section 7, Rule 14 of the
Rules of Court. In substituted service, it is mandated that the fact of impossibility of
personal service should be explained in the proof of service.

When the defendant in an action in personam is a non-resident 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 cannot
be done if the defendant is not physically present in the country, and thus, the court
cannot acquire jurisdiction over his person and therefore cannot validly try and decide
the case against him. An exception was accorded in Gemperle vs. Schenker wherein
service of summons through the non-residents wife, who was a resident of the
Philippines, was held valid, as the latter was his representative and attorney-in-fact in a
prior civil case filed by the non-resident, and the second case was merely an offshoot of
the first case.

The manner of summons must be distinguished Adolfo Trocino being a non-

resident, the court cannot acquire jurisdiction over his person and validly try and decide
the case against him. The action being in personam. On the other hand, Mariano Trocino
has been in Talibon, Bohol not in Cebu City to validly acquire jurisdiction over his person,
summons must be served on him personally, or through substituted service, upon
showing of impossibility of personal service. Such impossibility, and why efforts exerted
towards personal service failed, should be explained in the proof of service. The
pertinent facts and circumstances attendant to the service of summons must be stated
in the proof of service or Officers Return. Failure to do so would invalidate all subsequent
proceedings on jurisdictional grounds.

3. Moreover, inasmuch as the sheriffs return failed to state the facts and
circumstances showing the impossibility of personal service of summons upon
respondents within a reasonable time, petitioners should have sought the issuance of an
alias summons. Under Section 5, Rule 14 of the Rules of Court, alias summons may be
issued when the original summons is returned without being served on any or all of the
defendants. Petitioners, however, did not do so, and they should now bear the
consequences of their lack of diligence.

CASE 2

REBOLLIDO, ET AL VS. HONORABLE CA AND PESICO INC.,

G.R. NO. 81123
FEBRUARY 28, 1989

FACTS: Petitioners filed a civil case for damages against Pepsi Cola Bottling Company of
the Philippines Inc. and Alberto Lava before the RTC, involving a vehicular accident. On
September 21,1984, the sheriff of the lower court served the summons addressed to the
defendants. It was received by one Nanette Sison who represented herself to be the
authorized person receiving court processes as she was the secretary of the legal
department of Pepsi Cola.

The RTC heard the case ex-parte and adjudged the defendants jointly and severally liable
for damages. PEPSICO Inc., a foreign corporation organized under the State of Delaware,
USA, held offices here for the purpose of settling Pepsi Colas debts, liabilities and
obligations, opposed the motion for execution filed by the petitioners, and moved to
vacate the judgment on the ground of lack of jurisdiction due to invalidity of the service
of summons to a mere clerk.
The lower court denied the motion, holding that there was proper service of summons
because the defendant continued its existence for 3 years from the date of dissolution.

The CA ruled that there was no valid service of summons, and that the service of
summons should be made upon the private respondent itself in accordance with Section
14, Rule 14 of the Rules of Court. It remanded the case to the lower court and ordered
that the private respondent be summoned and be given its day in court.

ISSUES:

1. Whether or not Pepsi Cola, the dissolved corporation, is the real party in interest to
whom summons should be served in the civil case for damages;
2. Whether or not there was valid service of summons through Nanette Sison,
allegedly the secretary of the legal department of Pepsi Cola.

HELD:

1. YES. For purposes of valid summons, the dissolved Pepsi Cola was the real party in
interest-defendant in the civil case filed by the petitioners not only because it is
the registered owner of the truck involved but also because, when the cause of
action accrued, Pepsi Cola still existed as a corporation and was the party involved
in the acts violative of the legal right of another. The law provides that a
corporation whose corporate term has ceased can still be made a party to a suit. It
shall be continued as a body corporate for three (3) years after the time when it
would have been so dissolved, for the purpose of prosecuting and defending suits
by or against it and enabling it to settle and close its affairs, to dispose of and
convey its property and to distribute its assets, but not for the purpose of
continuing the business for which it was established. The right of action of the
petitioners against Pepsi Cola and its driver arose not at the time when the
complaint was filed but when the acts or omission constituting the cause of action
accrued.

2. YES. There was a valid service of summons to bind Pepsi Cola. Whomsoever Miss
Sison was acting for in receiving the summons there is no question that the notice
of the action was promptly delivered either to Pepsi Cola or PEPSICO with whom
she is admittedly connected. We rule, as in G & G Trading Corporation v. Court of
Appeals (supra), that there was substantial compliance with Section 13, Rule 14
because the purpose of notice was satisfied.

At the time of the issuance and receipt of the summons, Pepsi Cola was already
dissolved. The Court is of the opinion that service is allowed in such a situation.
Since our law recognizes the liability of a dissolved corporation to an aggrieved
creditor, it is but logical for the law to allow service of process upon a dissolved
corporation. Otherwise, substantive rights would be lost by the mere lack of
explicit technical rules. The Rules of Court on service of summons upon a private
domestic corporation is also applicable to a corporation which is no longer a going
 concern. Service upon a dissolved corporation may be made through any of the
persons enumerated in Section 13, Rule 14.

The purpose is to render it reasonably certain that the corporation will receive
prompt and proper notice in an action against it or to insure that the summons be
served on a representative so integrated with the corporation that such person will
know what to do with the legal papers served on him. In other words, 'to bring
home to the corporation notice of the filing of the action.

CASE 3

SPS. VENTURANZA VS. HONORABLE CA, ET AL

G.R. NO. 77760 DECEMBER 11, 1987

FACTS: Plaintiff Nieves Y. Senoran (now private respondent) filed a complaint against
spouses Violeta S. Venturanza and Romy Venturanza (now petitioners) with the
Metropolitan Trial Court of Manila, for collection of sums of money in the aggregate
amount of P9,711.50, representing several loans evidenced by promissory notes which
had become due and demandable but unpaid despite repeated demands. On June 10,
1985, summons was issued against the petitioners on Augusto Soan, father of petitioner
Violeta S. Venturanza, at 3412 B.A. Tan Street. Barrio Obrero Tondo, Manila, the address
of petitioners stated in the complaint. The court a quo rendered a decision ordering
Venturanza to pay jointly and severally the private respondent.

On September 22, 1985, petitioners filed a "Motion to Set Aside Decision and to Declare
Past Proceedings Null and Void for Lack of Jurisdiction," alleging that there had been no
proper and valid service of summons upon them and that the court a quo never acquired
jurisdiction over the person of the petitioners, considering that the address where the
summons was served is the residence of Violeta S. Venturanza's father, Augusto Soan,
and not the residence or dwelling house of the petitioners. The telephone directory of the
Asian Development Bank where defendant is employed, also indicates that the
defendant is a resident of Tondo, Manila.

The court a quo denied the motion for lack of merit since the defendants motion that
they have been residing at Aurora St., Pasay City since April 1985, was not supported by
any other competent evidence.

On appeal to RTC, decision by the MeTC was affirmed with slight modification as to the
amount of damages. On a petition for review, the CA affirmed in toto the RTCs decision.
Hence this petition for certiorari.

ISSUES:
 1. WON Metropolitan Trial Court acquired jurisdiction over the person of the
petitioners when the summons was served upon Augusto Soan, father of petitioner
Violeta S. Venturanza at 3412 B.A. Tan St., Bo. Obrero Tondo, Manila, which address
is no longer the residence nor the place of business of petitioners.

2. Whether or not the provisions of Section 8, Rule 14 of the Rules of Court was
legally complied with by the Sheriff in serving the summons upon the father of one
of the petitioners.

HELD:

1. No. The MeTC did not acquire jurisdiction over the person of the petitioners. The
action for collection of sum of money, being an action in personam, requires the
personal service of summons on the defendants to acquire jurisdiction over the
person of the defendant. It was admitted by Venturanza that they were actual
residents of Tondo, Manila in 1984 , but transferred in April 1985 to Pasay City.
There was also an affidavit of Augusto Soan stating that he never told the
sheriff that the defendants were residing in his house at Tondo, Manila, sufficiently
negating the conclusion of the court a quo.

2. No. It is only when a defendant cannot be personally served with summons within
a reasonable time that a substituted service may be availed of, the same to be
effected in the following manner: a) by leaving copies of the summons at the
defendants' dwelling house or residence, with some person of suitable age and
discretion then residing therein, or b) by leaving the copies at defendant's office or
regular place of business, with some competent person in charge thereof. For a
substituted service to be valid, summons served at the defendant's residence must
be served at his residence at the time of such service and not at his former place
of residence.

It is required by law that an effort or attempt should first be made to personally

serve the summons and after this has failed, a substituted service may be caused
upon the defendant, and the same must be reflected in the proof of service. Upon
careful examination of the sheriff 's Return in this case, which purports to serve as
proof that summons had been served upon the defendants, together with a copy of
the complaint, through Augusto Soan, no statement is made that an effort or
attempt was exerted to personally serve the summons on the defendants and that
the same had failed. In fact, said Return does not even indicate the address of the
defendants to whom summons was supposed to have been served. The
presumption of regularity in the performance of official functions by the sheriff is
not applicable in this case where it is patent that the sheriff's return is defective.

CASE NO.4
FILOMENA DOMAGAS vs. VIVIAN LAYNO JENSEN
G.R. No. 158407. January 17, 2005

FACTS:
On February 19, 1999, petitioner Filomena Domagas filed a complaint for forcible
entry against respondent Vivian Jensen before the MTC of Calasiao, Pangasinan. The
petitioner alleged in her complaint that she was the registered owner of a parcel of land
covered by Original Certificate of Title (OCT) No. P-30980, situated in Barangay Buenlag,
Calasiao, Pangasinan, and with an area of 827 square meters of which petitioner was
deprived of a 68-square meter portion of her property along the boundary line. The MTC
rendered the decision in favour of the petitioner.

The respondent failed to appeal the decision. Consequently, a writ of execution

was issued. Then, the respondent filed a complaint against the petitioner before the RTC
of Dagupan City for the annulment of the decision of the MTC in Civil Case No. 879, on
the ground that due to the Sheriffs failure to serve the complaint and summons on her
because she was in Oslo, Norway, the MTC never acquired jurisdiction over her person.
The respondent alleged therein that the service of the complaint and summons through
substituted service on her brother, Oscar Layno, was improper because he was merely
visiting her house in Barangay Buenlag and was not a resident nor an occupant of the
house being leased to Eduardo Gonzales. Judgment is rendered in favor of plaintiff Jensen
and against defendant Domagas declaring the previous decision of the MTC of Calasiao,
as null and void, for lack of jurisdiction over the person of the plaintiff and the subject
matter. The trial court declared that there was no valid service of the complaint and
summons on the respondent Jensen the defendant in Civil Case No. 879, considering that
she left the Philippines on February 17, 1999 for Oslo, Norway, and her brother Oscar
Layno was never authorized to receive the said complaint and summons for and in her
behalf.

The petitioner appealed the decision to the CA which rendered judgment affirming
the appealed decision of the RTC with modifications. The CA ruled that the complaint in
Civil Case No. 879 was one for ejectment, which is an action quasi in rem. The appellate
court ruled that since the defendant therein was temporarily out of the country, the
summons and the complaint should have been served via extraterritorial service under
Section 15 in relation to Section 16, Rule 14 of the Rules of Court, which likewise requires
prior leave of court. Considering that there was no prior leave of court and none of the
modes of service prescribed by the Rules of Court was followed by the petitioner, the CA
concluded that there was really no valid service of summons and complaint upon the
respondent, the defendant in Civil Case No. 879. Hence, the petition for review on
certiorari under Rule 45.

ISSUE: Whether or not the respondent was validly served with summons and the
complaint by substituted sevice.
HELD: No. There is no showing that as of April 5, 1999, the house where the Sheriff
found Oscar Layno was the latters residence or that of the respondent herein. Neither is
there any showing that the Sheriff tried to ascertain where the residence of the
respondent was on the said date. It turned out that the occupant of the house was a
lessor, Eduardo Gonzales, and that Oscar Layno was in the premises only to collect the
rentals from him. The service of the summons on a person at a place where he was a
visitor is not considered to have been left at the residence or place or abode, where he
has another place at which he ordinarily stays and to which he intends to return.

The Voters Registration Record of Oscar Layno wherein he declared that he was a
resident of the same barangay cannot prevail over the Contract of Lease the respondent
had executed in favor of Eduardo Gonzales showing that the latter had resided and
occupied the house of the respondent as lessee and the affidavit of Eduardo Gonzales
that Oscar Layno was not residing in the said house on during the said service of
complaint and summons. In sum, then, the respondent was not validly served with
summons and the complaint in Civil Case No. 879 on April 5, 1999, by substituted
service. Hence, the MTC failed to acquire jurisdiction over the person of the respondent;
as such, the decision of the MTC in Civil Case No. 879 is null and void.

CASE NO. 5

ERLINDA R. VELAYO-FONG vs. SPOUSES RAYMOND and MARIA HEDY VELAYO

G.R. NO. 155488 December 6, 2006

FACTS: On August 9, 1993, Raymond Velayo (Raymond) and his wife, Maria
Hedy Velayo (respondents) filed a complaint for sum of money and damages with prayer
for preliminary attachment against Erlinda R. Velayo-Fong (petitioner), Rodolfo R. Velayo,
Jr. (Rodolfo Jr.) and Roberto R. Velayo (Roberto). Raymond is the half-brother of petitioner
and her co-defendants. Respondents cause of action in Civil Case No. Q-93-17133 is
anchored on the claim that petitioner, a resident of 1860 Alamoana Boulevard, Honolulu,
Hawaii, USA, and her co-defendants maliciously instituted a criminal complaint before
the NBI and a petition before the SEC which prevented the respondents from leaving the
country and paralyzed the latters business transactions. Respondents pray that actual
and moral damages, plus attorneys fees, be awarded in their favor.

Before respondents application for a writ of preliminary attachment can be acted

upon by the RTC, respondents filed an Urgent Motion praying that the summons
addressed to petitioner be served to her at two condominiums in Pasay City and in
Makati. In its Order dated September 13, 1993, the RTC granted the said motion. The
Process Server submitted the Officers Return stating that he was able to personally
serve upon defendant Erlinda Velayo the copy of summons together with the thereto
attached copy of the complaint, not at her two (2) given addresses, but at the lobby of
Intercontinental Hotel, Makati, Metro Manila, right in the presence of lobby counter
personnel by the name of Ms. A. Zulueta, but said defendant refused to sign in receipt
thereof. Upon ex-parte motions of respondents, the RTC in its Order, declared petitioner
and her co-defendant in default for failure to file an answer and ordered the ex-
parte presentation of respondents evidence. The RTC rendered its Decision in
respondents favour. Thereafter, petitioner filed a Motion to Set Aside Order of Default
claiming that she was prevented from filing a responsive pleading and defending herself
against respondents complaint because of fraud, accident or mistake; that contrary to
the Officers Return, no summons was served upon her; that she has valid and
meritorious defenses to refute respondents material allegations. Respondents opposed
said Motion.

In its Order dated May 29, 1995, the RTC denied petitioners Motion ruling that the
presumption of regularity in the discharge of the function of the Process Server was not
sufficiently overcome by petitioners allegation to the contrary; that there was no evident
reason for the Process Server to make a false narration regarding the service of
summons to defaulting defendant in the Officers Return. Then, respondents filed a
Motion for Execution but the petitioner filed an Opposition to Motion for Execution
contending that she has not yet received the Decision and it is not yet final and
executory as against her.In its Order, the RTC, finding that the Decision and the Order
were indeed not furnished or served upon petitioner, denied respondents motion for
execution against petitioner and ordered that petitioner be furnished the said Decision
and Order. The RTC issued an Order directing the issuance of the writ of execution
against petitioners co-defendant.

On May 23, 1996, petitioner, through her counsel, finally received the Decision and
the Order. Petitioner filed an appeal with the CA questioning the propriety and validity of
the service of summons made upon her. The CA rendered its Decision affirming the
Decision and Order of the RTC. Petitioner filed a Motion for Reconsideration but the CA
denied it. Hence, the petition for review on certiorari under Rule 45.

ISSUES: 1. Whether or not the petitioner was not validly served with summons.
2. Whether or not RTC should have set aside the order of default.

HELD: 1. Yes. In the present case, The action instituted by respondents affect the parties
alone, not the whole world. Any judgment therein is binding only upon the parties
properly impleaded. Thus, it is an action in personam. As such, personal service of
summons upon the defendants is essential in order for the court to acquire jurisdiction
over their persons. Petitioners bare allegation that the statement in the Officers Return
that she was personally served summons is inaccurate is not sufficient. A process
servers certificate of service is prima facie evidence of the facts as set out in the
certificate. Between the claim of non-receipt of summons by a party against the
assertion of an official whose duty is to send notices, the latter assertion is fortified by
the presumption that official duty has been regularly performed. To overcome the
presumption of regularity of performance of official functions in favor of such Officers
Return, the evidence against it must be clear and convincing. Petitioner having been
unable to come forward with the requisite quantum of proof to the contrary, the
presumption of regularity of performance on the part of the process server stands.

2. No. Petitioners argument that the RTC should have set aside the order of default and
applied the liberal interpretation of rules with a view of affording parties their day in
court is not tenable. While indeed default orders are not viewed with favor, the party
seeking to have the order of default lifted must first show that her failure to file an
answer or any other responsive pleading was due to fraud, accident, mistake, or
excusable neglect and then she must show that she has a valid and meritorious defense.

In this case, petitioner failed to show that her failure to file an answer was due to fraud,
accident, mistake or excusable neglect. Except for her bare unsupported allegation that
the summons were only thrown to her at the elevator, petitioner did not present any
competent evidence to justify the setting aside of the order of default. Petitioner
contented herself with stating in her affidavit of merit that the cases against respondent
Raymond were filed at the instance of her father. Such allegation is a conclusion rather
than a statement of facts showing a meritorious defense. The affidavit failed to
controvert the facts allegedby the respondents. Petitioner has not shown that she has a
meritorious defense.

CASE NO. 6

Palma vs. Galvez

G.R. No. 165273 March 10, 2010
Facts:
On July 28, 2003, Palma filed with the RTC an action for damages against the
Philippine
Heart Center, Dr. Giron, Dr. Cruz, alleging that the defendants committed professional
fault,
negligence and omission for having removed her right ovary against her will, and losing
the
same and the tissues extracted from her during her surgery; and that although the
specimens
were subsequently found, Palma was doubtful and uncertain that the same was hers as
the
label therein pertained that of somebody else. Later, Palma filed a Motion for Leave to
Admit
Amended Complaint, praying for inclusion of some nurses, one of which is respondent
Agudo.
The RTCs process server submitted his return of summons stating that the alias
summons,
together with a copy of the amended complaint and its annexes, were served upon
Agudo thru
her husband Alfredo, who received and signed the same since Agudo was out of the
country.
Agudos counsel filed a Notice of Appearance and Motion for Extension of Time to File
Answer
stating that he was just engaged by Alfredo Agudo, as respondent Agudo was out of the
country
and the Answer was already due.
Two weeks later, counsel again filed a Motion for Another
Extension of Time to File Answer, stating that the draft answer was finished but would be
sent to
Agudo for clarification/verification before the Phil. Consulate in Ireland. Two weeks later,
Agudo
filed a Motion to Dismiss on the ground that the RTC had not acquired jurisdiction over
her as
she was not property served with summons since she was temporarily out of the country.
Palma
filed her Opposition to the MTD, arguing that a substituted service of summons on
Agudos
husband was valid and binding on her, that the service of summons under Sec. 16, Rule
14 was
not exclusive and maybe effected by other modes of service.
RTC granted Agudos MTD. RTC found that while summons was served at Agudos
house and
received by her husband, such service did not qualify as a valid service of summons on
her as
she was out of the country at the time it was served. Palma thus filed this petition for
certiorari
under Rule 65.

Issues:

1. Whether or not a petition for certiorari under 65 is proper

2. Whether or not there was a valid service of summons on Agudo

Held:

1. A petition for certiorari is proper when any tribunal, board or officer exercising judicial
or
quasi-judicial functions has acted without or in excess of jurisdiction, or with grave abuse
of discretion amounting to lack or excess of jurisdiction and there is no appeal, or plain,
speedy and adequate remedy. Sec. 1, Rule 41 of the Rules of CivPro states that
where a judgment or final order is not appealable, the aggrieved party may
file an
appropriate special civil action for certiorari under Rule 65.

2. In civil cases, the trial court acquires jurisdiction over the person of the defendant
either
by the service of summons or by the latters voluntary appearance and submission to the
authority of the former. Agudo was a Filipino resident temporarily out of the country at
the time of the service of summons, thus service of summons on her is governed by
Sec. 16, Rule 14 of the Rules of Court
CASE NO. 7

G.R. No. 150859 March 28, 2005

FLORENTINO GONZALES, EDGARDO SANTOS, LEOPOLDO ROSETE, FELINA

VICTORIA and CRISTETA DELA CRUZ, Petitioner,
vs.
BALIKATAN KILUSANG BAYAN SA PANANALAPI, INCORPORATED, respondent.

FACTS. Sometime in November 7, 1997, petitioner Florentino Gonzales obtained a loan

of P150,000 with the other petitioners Edgardo Santos, Leopoldo Rosete, Felina Victoria
and Cristeta dela Cruz as co-makers. Petitioners signed a promissory note binding
themselves jointly and severally to pay the loan in monthly amortizations of P6,250 for
two years starting November 7, 1997 up to November 7, 1999. When petitioner Gonzales
failed to pay despite repeated written demands, respondent filed a case for sum of
money and damages in the Municipal Trial Court of Bocaue. Summons were thereafter
served and the case was set for hearing on September 29, 2000. On the scheduled
hearing, defendants appeared but because they failed to file their answer to the
complaint, the court declared them in default and thereafter allowed the presentation of
respondents evidence ex-parte on October 6, 2000. MTC ruled in favor of the respondent
thereby ordering the petitioners to pay jointly and severally the amount owed plus
corresponding interests. Unhappy of the decision, petitioners appealed MTCs decision to
the RTC but the latter court AFFIRMED the decision of the court a quo.

Petitioners thereafter elevated the case to the Court of Appeals on a petition for
review. The CA dismissed the petition.

ISSUE. WHETHER OR NOT THE JUDGMENT BY DEFAULT IS VOID FOR LACK OF

JURISDICTION OVER THE PETITIONERS WHO WERE NOT SERVED WITH SUMMONS
PROPERLY and should thereby be dismissed

HELD. In this regard, petitioners should be reminded of the provision in the Rules of
Court that a defendants voluntary appearance in an action shall be equivalent to service
of summons. Further, the lack of jurisdiction over the person of the defendant may be
waived either expressly or impliedly. When a defendant voluntarily appears, he is
deemed to have submitted himself to the jurisdiction of the court. If he does not wish to
waive this defense, he must do so seasonably by motion, and object thereto.

As the records would show, summons and copies of the complaint were served on
the petitioners and the case was set for hearing by the MTC on September 29, 2000,
upon the motion of the respondent. The petitioners appeared before the court on the
scheduled hearing, as evidenced by their signatures in the minutes. Their voluntary
appearance cured the defect, if any, in the service of summons.

Petitioners ought to be guided by Rule 15, Section 2, which provides that "[a]ll motions
shall be in writing exceptthose made in open court or in the course of a hearing or trial."
Moreover, every written motion shall be set for hearing by the applicant, with the
exception of motions which the court might act upon without prejudicing the rights of the
adverse party. As a general rule, a notice is required where a party has a right to resist
the relief sought by the motion. Principles of natural justice demand that his right should
not be affected without an opportunity to be heard. Such, however, does not appear to
be the situation here.

In this case, the motion to declare petitioners in default was, to reiterate, made in open
court and in their presence. By their presence, notice to them is fairly constituted. What
the law really eschews is not the lack of previous notice of hearing but the lack of
opportunity to be heard. Petitioners were not without such opportunity to contest the
motion for and the order of default then and there at the trial court.

WHEREFORE, the instant petition is DENIED. The assailed decisions of the Regional Trial
Court and the Municipal Trial Court of Bocaue, Bulacan are hereby AFFIRMED.

CASE NO. 8

G.R. No. 73531. April 6, 1993.

DOLORES DELOS SANTOS, NICOLAS DELOS SANTOS and RICARDO DELOS

SANTOS, petitioners,
vs.
HON. JUDGE CAMILO MONTESA, JR. and JUANA DELOS SANTOS, respondents.

FACTS: This is a suit for desahucio (an action for eviction/ejectment) initiated by herein
private respondent against petitioners to which the court of origin ordered petitioners to
vacate the lot in question. Upon appeal, the Regional Trial Court presided over by herein
respondent judge, granted private respondents motion for execution pending appeal on
account of petitioners' failure to post a supersedeas bond.

Petitioners' mental distress started when private respondent, who supposedly owns a lot
a portion of which petitioners entered and occupied, lodged the complaint geared
towards petitioners' eviction. Summons was served through the mother of petitioners
when the process server was unable to locate Dolores, Nicolas, and Ricardo delos Santos
in Talampas, Bustos, Bulacan. For failure of petitioners to submit the corresponding
answer, judgment was rendered pursuant to the rules on summary procedure.

Upon learning of said decision, petitioners sought to reconsider on the principal thesis
that they were never served notice of the conciliation meeting at the barangay level, as
well as the summons. They insist that private respondent was referring to a different
piece of realty because petitioners actually occupied a different lot owned by Nicolas
delos Santos. Moreover, petitioners' counsel moved to re-examine the impugned decision
and posed a subsequent bid on appeal to impede immediate execution.
ISSUE: WON the service of summons was strictly complied with

HELD: At first blush, it would appear that the recourse pursued by petitioners could elicit
a favorable response from the court in as much as the proof of service of the summons
upon petitioners does not indicate impossibility of personal service, a condition
precedent for resorting to substituted service. Even then, and assuming in gratia
argumenti that the statutory norms on service of summons have not been strictly
complied with, still, any defect in form and in the manner of effecting service thereof
were nonetheless erased when petitioners' counsel moved to re-examine the impugned
decision and posed a subsequent bid on appeal to impede immediate execution. Indeed,
such demeanor is tantamount to voluntary submission to the competencia of the court
within the purview of Section 23, Rule 14 of the Revised Rules of Court since any
mode of appearance in court by a defendant or his lawyer is equivalent to service of
summons, absent any indication that the appearance of counsel for petitioner was
precisely to protest the jurisdiction of the court over the person of defendant.

CASE NO. 9.

G.R. No. 159139 June 15, 2005

INFORMATION TECHNOLOGY FOUNDATION OF THE PHILIPPINES, Petitioners,

vs.

COMMISSION ON ELECTIONS, MEGA PACIFIC eSOLUTIONS, INC.; and MEGA

PACIFIC CONSORTIUM, Respondents.

FACTS: Before us is the Commission on Elections "Most Respectful Motion for Leave to
Use the Automated Counting Machines in the Custody of the Commission on Elections for
use in the August 8, 2005 Elections in the Autonomous Region for Muslim Mindanao
(ARMM)," dated December 9, 2004. The Motion alleges that "information technology
experts," who purportedly supervised all stages of the software development for the
creation of the final version to be used in the ACMs, have unanimously confirmed that
this undertaking is in line with the internationally accepted standards for software life
cycle processes, "with its quality assurance that it would be fit for use in the elections.

Recall that our previous Decision declared COMELEC to have acted with grave abuse of
discretion when, by way of its Resolution No. 6074, it awarded the Contract for the
supply of automated counting machines (ACMs) to private respondents. It did so, not
only in clear violation of law and jurisprudence, but also with inexplicable haste and
reckless disregard of its own bidding rules and procedures; particularly the mandatory
financial, technical and legal requirements. The motion for reconsideration was likewise
denied.
Notwithstanding our Decision and Resolution, the present Motion claims, inter alia, that
the ARMM elections are slated to be held on August 8, 2005, and are mandated by RA
9333 to be automated; that the government has no available funds to finance the
automation of those elections; that considering its present fiscal difficulties, obtaining a
special appropriation for the purpose is unlikely; that, on the other hand, there are in
Comelecs custody at present 1,991 ACMs, which were previously delivered by private
respondents; that these machines would deteriorate and become obsolete if they remain
idle and unused; that they are now being stored in the Comelec Maxilite Warehouse
along UN Avenue, at "storage expenses of P329,355.26 a month, or P3,979,460.24
annually."

Private respondents contend that since the subject ACMs have already been delivered to,
paid for and used by Comelec, the Republic of the Philippines is now their owner, without
prejudice to Mega Pacific eSolutions, Inc.s claim for damages in the case pending before
the RTC of Makati; and that, consequently, as far as private respondents are concerned,
the question of using the subject ACMs for the ARMM elections is dependent solely on
the discretion of the owner, the Republic of the Philippines.

Petitioners assert that there is no longer any live case or controversy to speak of an
existing case or controversy that is appropriate or ripe for determination, not merely
conjectural or anticipatory; and that Comelecs allegations in its Motion do not amount to
an actual case or controversy that would require this Court to render a decision or
resolution in the legitimate exercise of its judicial power.

Assuming arguendo that the present Motion might somehow be justified by the
governments fiscal difficulties, petitioners further argue that permitting Comelec to use
the ACMs would nevertheless allow it to do indirectly what it was not permitted by this
Court to do directly. They argue that the instant Motion is merely a subterfuge on the poll
bodys part to resurrect a lost case via a request for an advisory opinion.

ISSUE: Whether or not the motion must be denied.

HELD: YES. although it professes utmost respect for the finality of our Decision of
January 13, 2004 -- an inescapable and immutable fact from which spring equally
ineludible consequences -- granting it would have the effect of illegally reversing and
subverting our final Decision. Plainly stated, our final Decision bars the grant of the
present Motion.

Apparently, COMELEC has simply filed the present Motion asking permission to do what it
has precisely been prohibited from doing under our final and executory Decision. If law
and jurisprudence bar it from using the subject ACMs during the last elections, why
should it even propose to use these machines in the forthcoming ARMM elections? True,
these elections are important. But they cannot be more important than the 2004 national
elections. Note that the factual premises and the laws involved in the procurement and
use of the ACMs have not changed. Indeed, Comelec has not even alleged, much less
proven, any supervening factual or legal circumstances to justify its Motion.
The Motion has not at all demonstrated that technical requirements have been
addressed from the time our Decision was issued up to now. In fact, COMELEC is merely
asking for leave to use the machines, without mentioning any specific manner in which
the foregoing requirements have been satisfactorily met.

Assuming arguendo that the foregoing formidable legal, financial and technical obstacles
could be overcome or set aside, still, the Motion cannot be granted because it is vague; it
does not contain enough details to enable this Court to act appropriately.

CASE NO. 1O

PH Credit Corporation vs CA
G.R. No. 109648
November 22, 2001

FACTS: PH Credit Corp., filed a case against Pacific Lloyd Corp., Carlos Farrales, Thomas
H. Van Sebille and Federico C. Lim, for sum of money with the RTC. After service of
summons upon the defendants, they failed to file their answer within the reglementary
period, hence were declared in default. The court rendered decision ordering defendants
being solidarily liable and to pay PH Credit Corp. After the decision had become final and
executory, properties of defendant Farrales were levied and sold at public auction.

Petitioner filed for a motion for the issuance of a writ of possession and the same
was granted. However, the judge declared the previous decision being null and void.
Petitioner now claims that the judge acted with grave abuse of discretion. On appeal, the
Court of Appeals affirmed the trial courts decision declaring null and void the sale of
Faralles properties and that their liability was merely joint and not solidary.

ISSUE: Whether or not respondent has been barred by the Omnibus Motion Rule in not
questioning the joint and solidary nature of his liability in his motions.

HELD: No. The Supreme Court held that petitioners erred in arguing that respondents
motions did not question respondents liability. The three motions filed by respondent
were directed at the acts of execution against his personal properties but respondent
realized after that he was being made to answer on the entire liability as
a solidary debtor and filed his Omnibus Motion questioning the Writ of Possession and all
incident orders and proceedings relevant thereto. This realization dawned on him,
because his real property was levied and sold despite the previous sale of his personal
property. Only at this point was he in a position to assert his objections to the auction
sale of his real property and to put up the defense of joint liability among all the
respondents.

Prior to his Omnibus Motion, respondent was not yet being made to pay for
the entire obligation. Thus, his objection to his being made solidarily liable with the other
respondents was not yet available to him at the time he filed the Motions referred to by
petitioner. Not being available, these objections could not have been deemed waived
when he filed his three earlier Motions, which pertained to matters different from those
covered by his Omnibus Motion. The Omnibus Motion Rule requires the movant to raise
all available exceptions in a single opportunity to avoid multiple piecemeal objections.
But to apply that statutory norm, the objections must have been available to the party at
the time the Motion was filed.

CASE NO. 11

DELTA MOTORS VS CA AND STATE INVESTMENT HOUSE, INC.

G.R. NO. 121075
JULY 24, 1997

FACTS: State Investment House, Inc. brought an action for a sum of money against
Delta in the RTC where Delta was declared in default, and ordered to pay State
Investment its total outstanding obligation. The decision, however, could not be served
on Delta, either personally or by registered mail, due to its earlier dissolution. However,
Delta had been taken over by the Philippine National Bank (PNB) in the meantime. State
Investment moved for service of the decision by way of publication and execution of the
judgment, which the trial court granted. The writ of execution was issued and properties
of Delta in Iloilo and Bacolod City were levied upon and sold.
Delta then commenced a special civil action for certiorari with the CA insisting that the
trial court did not acquire jurisdiction over the person of the defendant since there was
no valid/proper service of summons, thus rendering the decision null and void, hence
never became final and executory. The CA ruled against Delta. Both Delta and State
Investment filed for a motion for reconsideration but the same were denied.
State Investment appealed to the Supreme Court. During the pendency of the
case, Delta filed an Omnibus Motion with the CA but the same was denied. Delta raised
the case to the Supreme Court.

ISSUES: 1. Whether or not the summons was validly served to Delta.

2.Whether or not the Omnibus Motion was valid.

HELD: The Court of Appels held that no records shows that a copy of the assailed
judgment had been properly served on P.N.B., which assumed DELTA's operation upon
the latter's dissolution. That the service by publication did not cure the fatal defect Thus,
the judgement of the trial court has did not become executory and has not yet attained
finality.

1. No. The Supreme Court held that if Delta intended such orders to be challenged in
the CA case, it could have explicitly alleged them as sources of additional causes of
action and prayed for the corresponding affirmative relief therefrom, and if this
course of action initially proved unavailing then Delta could and should have
moved for reconsideration on that aspect. After the finality of the decision in said
case, any attempt to introduce or revive the issue had become procedurally
impermissible.
2. The issues raised in the Omnibus Motion could have been allowed during the
pendency of said case by way of amendments to the petition. The Court of Appeals
 could only consider errors raised by petitioner which were limited to the trial
court's orders. These were the only errors Delta argued extensively in its brief. To
allow Delta's Omnibus Motion which it filed more than eight months from
promulgation of the decision or long after finality of said case, would result in
abandonment of sound judicial process.

CASE NO. 12
A.M. No. MTJ-04-1518

January 15, 2004

Attys. VILMA HILDA D. VILLANUEVA-FABELLA and WILMAR T. ARUGAY vs. Judge
RALPH S. LEE and Sheriff JUSTINIANO C. DE LA CRUZ JR

FACTS: The complainants are counsels for the defendants in Civil Case No. [38]-28457
entitled Star Paper Corporation vs. Society of St. Paul and Fr. Leonardo Eleazar for Sum of
Money with Prayer for Preliminary Attachment. Their clients were served a copy of the
complaint and a Writ of Attachment by Sheriff Dela Cruz based on the plaintiffs allegation
that the defendants contracted a debt in bad faith with no intention of paying the same.
A printing machine was levied and delivered to the plaintiffs warehouse instead of
keeping the same in the custody of the sheriff.

Judge Lee granted the defendants Urgent Motion to Discharge Attachment. Thereafter,
an Urgent Ex-Parte Motion to Withdraw Cash Deposit was filed, without notice to the
defendants and despite failure of the plaintiff to set such litigious motion for hearing and
contrary to existing laws and jurisprudence which was then granted by the respondent
judge.

An administrative complaint was charged against the latter for granting the withdrawal
of cash deposit in favour of the plaintiff even before judgement was rendered and for
granting another Verified Motion for Reconsideration of the Order declaring plaintiff as
non-suited.

ISSUE: WON the respondent judges granting of of the plaintiffs motion for the
withdrawal of cash deposit is a violation of the Rules of Court amounting to gross
ignorance of the law/ procedure.

HELD: Yes the respondent judge made an erroneous order upon granting the motion for
the withdrawal of cash deposit in favour of the plaintiff even before judgment is
rendered. As long as the judgment remains unsatisfied, it would be erroneous to order
the cancellation of a bond filed for the discharge of a writ of attachment. Furthermore,
the rules mandate that every written motion shall be set for hearing by the applicant.
The notice of hearing shall be addressed to the defendants and shall specify the time
and date of the hearing. The motion and notice shall be served at least three days before
the date of hearing and without proof of its service the court cannot act upon it.

For failure of the plaintiff to address the notice of hearing and for the lack of proof of
service, respondent should have not acted upon said motion. The rules on notice of
hearing and proof of service should have been observed by both the plaintiff and the
respondent judge.

However the latters poor judgment fell short of gross ignorance of the law/ procedure
since the erroneous act should have been committed with fraud, dishonesty, corruption,
malice or bad faith which have not been convincingly shown in the instant case for the
respondent judge corrected said error by reversing himself before the adverse party
incurred any damage.

CASE NO. 13

PROVIDENT INTERNATIONAL RESOURCES INC. VS. CA AND MUNICIPALITY OF

PARANAQUE
GR NO. 119328, JULY 26, 1996

FACTS: PARAAQUE filed Civil Case with the RTC of Makati for the expropriation of
certain parcels of land located at Likod Ibayo, Barangay Sto. Nio, Ninoy Aquino Avenue,
Paraaque. Likod Ibayo, Barangay Sto. Nio, Ninoy Aquino Avenue, Paraaque, Metro
Manila. These lots belonged to PIRC and were to be used as the site for a new municipal
building. PARAAQUE claimed that it offered to buy the property for P54,520,800.00
based on the fair market value stated in the tax declarations, but PIRC refused to sell.
PARAAQUE deposited with the Philippine National Bank (PNB) the amount of P8.1
million, or fifteen percent (15%) of P54,520,800.00, pursuant to Section 19 3 of the Local
Government Code of 1991 (R.A. No. 7160, hereinafter LGC). It then filed an ex-
parte motion for the issuance of a writ of possession which was granted by the RTC.
PARANAQUE was placed in possession of the lots.

The civil case was then returned to Branch 61 of RTC Makati presided by Judge
Gorospe, Jr. PIRC moved for reconsideration of the order of the RTC of Paranaque that
PARANAQUE be ordered to vacate the lots on a number of grounds including lack of
jurisdiction because the lots were also subject of an action pending before the
Sandiganbayan. The RTC of Makati also granted PIRCs motion for recognition and
dismissed the case for lack of jurisdiction as the lots to be expropriated were in custodia
legis, being sequestered by the PCGG and involved in a case pending before the
Sandiganbayan. It also set aside the previous order granting the motion for the issuance
of a writ of possession. PARANAQUE filed a motion for reconsideration and on the other
hand, PIRC filed an urgent ex parte motion for an order directing PARANAQUE to vacate
the lots and surrender them to PIRC.

Judge Gorospe, upon PARAAQUE's motion, inhibited himself and ordered the case
re-raffled. The case was eventually assigned to Branch 133 of the RTC of Makati,
presided by Judge Mendiola. Branch 133 of the RTC of Makati denied PARAAQUE's
motion for reconsideration and directing PARAAQUE and its agents to vacate the lots
and surrender possession to PIRC within five days from notice. PARAAQUE filed its
Notice of Appeal from the order setting aside the grant of the writ of possession and the
denial of the motion for reconsideration, Branch 133 gave due course to PARANAQUEs
appeal and ordered the transmittal of the entire records of the civil case to the CA for
further proceedings.

PIRC filed a motion for the issuance of a writ implementing the order to vacate and
the appointment of a special sheriff. Forthwith, and on even date, the RTC of Makati
(Branch 133) gave PARAAQUE a period of five days from receipt of the order within
which to file its Comment/Opposition to the motion. , PARAAQUE manifested 11 that the
trial court had lost jurisdiction over the case "after November 6, 1993 with the perfection
of [PARAAQUE's] appeal by the filing of its notice of appeal on 27 October 1993 before
the 15-day period for appeal expired." Hence, no longer could the court act on PIRC's
motion for an order to vacate, which PARAAQUE pointed out, was not a motion for
execution pending appeal; and even assuming otherwise, no good reason was cited in
the motion to justify its grant. Nevertheless, PARAAQUE asked the trial court "should [it]
be [so] minded, before transmittal of the entire records to the Court of Appeals, to
reverse or reconsider its appealed order due to the supervening event of a
Sandiganbayan denial of the PCGG motion for reconsideration of its decision lifting the
sequestration.
A day after, PARAAQUE filed a manifestation calling the trial court's attention to the fact
that up to said date, the record of the case had not been transmitted to the CA. Branch
133 issued an order denying PARAAQUE's "prayer for reversal or second reconsideration
contained in its Manifestation but granting PIRC's motion for the issuance of a writ
implementing the order to vacate which the court deemed a motion for execution
pending appeal. It then ordered the issuance of a writ of execution upon PIRC's filing of a
bond of P1 million, and appointed a special sheriff to implement the writ by ejecting
PARAAQUE from the subject property and placing PIRC in physical possession thereof.
 PARAAQUE then filed with this Court a special civil action for certiorari and
prohibition to annul the orders of the trial court. The SC referred the case to the CA. It
was about 2 months before the RTFC transmitted to the CA the records of the case.
PARAAQUE claims in its Memorandum dated 8 December 1995 that the said appeal
remained undocketed "pending elevation by the trial court of the complete records to the
Court of Appeals notwithstanding efforts made by Paraaque to expedite the appeal.
CA rendered its original decision, dismissing the petition on the ground of forum
shopping. PARANAQUE moved for reconsideration. CA rendered its amended decision
granting the petition for the certiorari and prohibition, hereby annulling the order of RTC
and permanently enjoining the RTC from further acting in said case, without prejudice to
the final decision in the appeal.

ISSUES: 1. WON the trial court had authority to act upon PIRCs motion for the issuance
of a writ implementing the order to vacate.
2. WON the trial court acted in excess of jurisdiction or with grave abuse of
discretion in granting the motion for a writ to implement the order to vacate.

RULING: 1. Yes. There can be no question as to the trial court's authority to act upon
PIRC's motion, filed within the period to appeal, for the issuance of a writ implementing
the order to vacate. Such a motion cannot be characterized as anything but a motion for
execution pending appeal, and pursuant to Section 2, Rule 39 of the Rules of Court, such
may be filed before the expiration of the period to appeal.
It is settled that a court may take cognizance of a motion for execution pending
appeal filed by a party within its period to appeal, as the filing of an appeal by a
losing party does not automatically divest the adverse party of the right to ask for
execution pending appeal. Thus, the trial court's order giving due course to
PARAAQUE's appeal and for the transmittal of the record of the case to the CA
was inconsequential, for, despite that, PIRC had the right to file a motion for the
execution of the order to vacate on or before 6 November 1993, and the trial court
could validly act thereon even after the expiration of the period to appeal or
perfection of the appeal, but before the transmittal of the record of the case to the
CA.

2.Yes. SCs examination of PIRC's motion for the issuance of a writ implementing
the order to vacate and the appointment of the special sheriff shows that it
contained no notice of hearing to PARAAQUE. The notice was a request directed
to the Clerk of Court to submit the motion to the court for its consideration and
approval immediately upon receipt thereof.
A notice of hearing addressed to the Clerk of Court, and not to the parties, is not
notice at all. Accordingly, a motion that does not contain a notice of hearing to the
adverse party is nothing but a mere scrap of paper. 43 The Clerk of Court did not
even have the duty to accept it, much more to bring it to the attention of the
Presiding Judge. Yet, the former did. Worse, the latter not only gave it undue
attention, forthwith on the date the motion was filed he issued an order giving
PARAAQUE five days from receipt of the order within which to file its
comment/opposition to the motion, after which the motion would be deemed
submitted for resolution, with or without such comment/opposition.
By overlooking the mandatory rule on notice to the adverse party in Section 2,
Rule 39 of the Rules of Court, a positive duty imposed upon the movant, and by
according value to a mere scrap of paper by "curing" its fatal defect by means of
the order to serve as notice to PARAAQUE, the trial court clearly acted with grave
abuse of discretion.
To these must be added the palpable absence of any good reason to justify
execution pending appeal.
CASE NO. 14

CASE NO. 15

CASE NO. 16

[G.R. No. 131889. March 12, 2001]

VIRGINIA O. GOCHAN, FELIX Y. GOCHAN III, MAE GOCHAN-EFANN, LOUISE Y.

GOCHAN, ESTEBAN Y. GOCHAN JR., DOMINIC Y. GOCHAN, FELIX O. GOCHAN III,
MERCEDES R. GOCHAN, ALFREDO R. GOCHAN, ANGELINA R. GOCHAN-HERNAEZ,
MARIA MERCED R. GOCHAN, CRISPO R. GOCHAN JR., MARION R. GOCHAN,
MACTAN REALTY DEVELOPMENT CORPORATION and FELIX GOCHAN & SONS
REALTY CORPORATION, petitioners,

vs. RICHARD G. YOUNG, DAVID G. YOUNG, JANE G. YOUNG-LLABAN, JOHN D.

YOUNG JR., MARY G. YOUNG-HSU and ALEXANDER THOMAS G. YOUNG as heirs
of Alice Gochan; the INTESTATE ESTATE OF JOHN D. YOUNG SR.; and CECILIA
GOCHAN-UY and MIGUEL C. UY, for themselves and on behalf and for the
benefit of FELIX GOCHAN & SONS REALTY CORPORATION, respondents.

FACTS: Felix Gochan and Sons Realty Corporation (Gochan Realty, for brevity) was
registered with the SEC on June, 1951, with Felix Gochan, Sr., Maria Pan Nuy Go Tiong,
Pedro Gochan, Tomasa Gochan, Esteban Gochan and Crispo Gochan as its incorporators.

Felix Gochan Sr.s daughter, Alice, mother of [herein respondents], inherited 50 shares of
stock in Gochan Realty from the former.

Alice died in 1955, leaving the 50 shares to her husband, John Young, Sr.In 1962, the
Regional Trial Court of Cebu adjudicated 6/14 of these shares to her children, herein
[respondents] Richard Young, David Young, Jane Young Llaban, John Young Jr., Mary Young
Hsu and Alexander Thomas Young.Having earned dividends, these stocks numbered 179
by 20 September 1979.Five days later (25 September), at which time all the children had
reached the age of majority, their father John Sr., requested Gochan Realty to partition
the shares of his late wife by cancelling the stock certificates in his name and issuing in
lieu thereof, new stock certificates in the names of [herein respondents].

On 17 October 1979, respondent Gochan Realty refused, citing as reason, the right of
first refusal granted to the remaining stockholders by the Articles of Incorporation.On 21,
1990, [sic] John, Sr. died, leaving the shares to the [respondents].On 8 February 1994,
[respondents] Cecilia Gochan Uy and Miguel Uy filed a complaint with the SEC for
issuance of shares of stock to the rightful owners, nullification of shares of stock,
reconveyance of property impressed with trust, accounting, removal of officers and
directors and damages against respondents. A Notice of Lis Pendens was annotated as
[sic] real properties of the corporation.

On 16 March 1994, [herein petitioners] moved to dismiss the complaint alleging that: (1)
the SEC ha[d] no jurisdiction over the nature of the action; (2) the [respondents] [were]
not the real parties-in-interest and ha[d] no capacity to sue; and (3) [respondents]
causes of action [were] barred by the Statute of Limitations.The motion was opposed by
herein [respondents].On 29 March 1994, [petitioners] filed a Motion for cancellation of
Notice of Lis Pendens. [Respondents] opposed the said motion.
On 9 December 1994, the SEC, through its Hearing Officer, granted the motion to dismiss
and ordered the cancellation of the notice of lis pendens annotated upon the titles of the
corporate lands. In its order, the SEC opined:

In the instant case, the complaint admits that complainants Richard G. Young, David G.
Young, Jane G. Young Llaban, John D. Young, Jr., Mary G. Young Hsu and Alexander
Thomas G. Young, who are the children of the late Alice T. Gochan and the late John D.
Young, Sr. are suing in their own right and as heirs of and/or as the beneficial owners of
the shares in the capital stock of FGSRC held in trust for them during his lifetime by the
late John D. Young. Moreover, it has been shown that said complainants ha[d] never been
x x x stockholder[s] of record of FGSRC to confer them with the legal capacity to bring
and maintain their action.Conformably, the case cannot be considered as an intra-
corporate controversy within the jurisdiction of this Commission.

The complainant heirs base what they perceived to be their stockholders rights upon the
fact of their succession to all the rights, property and interest of their father, John D.
Young, Sr. While their heirship is not disputed, their right to compel the corporation to
register John D. Youngs Sr. shares of stock in their names cannot go unchallenged
because the devolution of property to the heirs by operation of law in succession is
subject to just obligations of the deceased before such property passes to the
heirs. Conformably, until therefore the estate is settled and the payment of the debts of
the deceased is accomplished, the heirs cannot as a matter of right compel the delivery
of the shares of stock to them and register such transfer in the books of the corporation
to recognize them as stockholders. The complainant heirs succeed to the estate of [the]
deceased John D. Young, Sr. but they do not thereby become stockholders of the
corporation.

Moreover, John D. [Young Sr.s] shares of stocks form part of his estate which is the
subject of Special Proceedings No. 3694-CEB in the Regional Trial Court of Cebu, Branch
VIII, [par. 4 of the complaint]. As complainants clearly claim[,] the Intestate Estate of
John D. Young, Sr. has an interest in the subject matter of the instant case. However,
actions for the recovery or protection of the property [such as the shares of stock in
question] may be brought or defended not by the heirs but by the executor or
administrator thereof.

Complainants further contend that the alleged wrongful acts of the corporation and its
directors constitute fraudulent devices or schemes which may be detrimental to the
stockholders. Again, the injury [is] perceived[,] as is alleged[,] to have been suffered by
complainants as stockholders, which they are not. Admittedly, the SEC has no jurisdiction
over a controversy wherein one of the parties involved is not or not yet a stockholder of
the corporation. [SEC vs. CA, 201 SCRA 134].

Further, by the express allegation of the complaint, herein complainants bring this action
as [a] derivative suit on their own behalf and on behalf of respondent FGSRC.

Section 5, Rule III of the Revised Rules of Procedure in the Securities and Exchange
Commission provides:

Section 5. Derivative Suit. No action shall be brought by stockholder in the right of a

corporation unless the complainant was a stockholder at the time the questioned
transaction occurred as well as at the time the action was filed and remains a
stockholder during the pendency of the action. x x x.
The rule is in accord with well settled jurisprudence holding that a stockholder bringing a
derivative action must have been [so] at the time the transaction or act complained of
[took] place. (Pascual vs. Orozco, 19 Phil. 82; Republic vs. Cuaderno, 19 SCRA 671; San
Miguel Corporation vs. Khan, 176 SCRA 462-463) The language of the rule is mandatory,
strict compliance with the terms thereof thus being a condition precedent, a jurisdictional
requirement to the filing of the instant action.

Otherwise stated, proof of compliance with the requirement must be sufficiently

established for the action to be given due course by this Commission. The failure to
comply with this jurisdictional requirement on derivative action must necessarily result in
the dismissal of the instant complaint. (pp. 77-79, Rollo)

[Respondents] moved for a reconsideration but the same was denied for being pro-
forma.Respondents] appealed to the SEC en banc, contending, among others, that the
SEC ha[d] jurisdiction over the case.[Petitioners], on the other hand, contend that the
appeal was 97 days late, beyond the 30-day period for appeals.

On 3 March 1995, the SEC en banc ruled for the [petitioners,] holding that the
[respondents] motion for reconsideration did not interrupt the 30-day period for appeal
because said motion was pro-forma.[4]

Aggrieved, herein respondents then filed a Petition for Review with the Court of
Appeals. The Court of Appeals ruled that the SEC had no jurisdiction over the case as far
as the heirs of Alice Gochan were concerned, because they were not yet stockholders of
the corporation. On the other hand, it upheld the capacity of Respondents Cecilia Gochan
Uy and her spouse Miguel Uy. It also held that the intestate Estate of John Young Sr. was
an indispensable party.

The appellate court further ruled that the cancellation of the notice of lis pendens on
the titles of the corporate real estate was not justified. Moreover, it declared that
respondents Motion for Reconsideration before the SEC was not pro forma; thus, its filing
tolled the appeal period.

Hence, this Petition.[5]

ISSUES:

A. Whether or not the Spouses Uy have the personality to file an action before the
SEC against Gochan Realty Corporation.
B. Whether or not the intestate estate of John D. Young Sr. is an indispensable party in
the SEC case considering that the individual heirs shares are still in the decedent
stockholders name.

RULING:

1.)Petitioners argue that Spouses Cecilia and Miguel Uy had no capacity or legal standing
to bring the suit before the SEC on February 8, 1994, because the latter were no longer
stockholders at the time. Allegedly, the stocks had already been purchased by the
corporation. Petitioners further assert that, being allegedly a simple contract of sale
cognizable by the regular courts, the purchase by Gochan Realty of Cecilia Gochan
Uys 210 shares does not come within the purview of an intra-corporate controversy.

As a general rule, the jurisdiction of a court or tribunal over the subject matter is
determined by the allegations in the complaint.[8] For purposes of resolving a motion to
dismiss, Cecilia Uys averment in the Complaint -- that the purchase of her stocks by the
corporation was null and void ab initio is deemed admitted. It is elementary that a void
contract produces no effect either against or in favor of anyone; it cannot create, modify
or extinguish the juridical relation to which it refers.[9]Thus, Cecilia remains a stockholder
of the corporation in view of the nullity of the Contract of Sale. Although she was no
longer registered as a stockholder in the corporate records as of the filing of the case
before the SEC, the admitted allegations in the Complaint made her still a bona fide
stockholder of Felix Gochan & Sons Realty Corporation (FGSRC), as between said parties.

In any event, the present controversy, whether intra-corporate or not, is no longer

cognizable by the SEC, in view of RA 8799, which transferred to regional trial courts the
formers jurisdiction over cases involving intra-corporate disputes.

2.) Petitioners contend that the Intestate Estate of John D. Young Sr. is not an
indispensable party, as there is no showing that it stands to be benefited or injured by
any court judgment.

It would be useful to point out at this juncture that one of the causes of action stated
in the Complaint filed with the SEC refers to the registration, in the name of the other
heirs of Alice Gochan Young, of 6/14th of the shares still registered under the name of
John D. Young Sr. Since all the shares that belonged to Alice are still in his name, no final
determination can be had without his estate being impleaded in the suit. His estate is
thus an indispensable party with respect to the cause of action dealing with the
registration of the shares in the names of the heirs of Alice.

Petitioners further claim that the Estate of John Young Sr. was not properly
represented. They claim that when the estate is under administration, suits for the
recovery or protection of the property or rights of the deceased may be brought only by
the administrator or executor as approved by the court.[14] The rules relative to this
matter do not, however, make any such categorical and confining statement.

Section 3 of Rule 3 of the Rules of Court, which is cited by petitioner in support of

their position, reads:

Sec. 3. Representatives as parties. - Where the action is allowed to be prosecuted or

defended by a representative or someone acting in a fiduciary capacity, the beneficiary
shall be included in the title of the case and shall be deemed to be the real party in
interest. A representative may be a trustee of an express trust, a guardian, an executor
or administrator, or a party authorized by law or these Rules. An agent acting in his own
name and for the benefit of an undisclosed principal may sue or be sued without joining
the principal except when the contract involves things belonging to the principal.

Section 2 of Rule 87 of the same Rules, which also deals with administrators, states:

Sec. 2. Executor or administrator may bring or defend actions which survive. - For the
recovery or protection of the property or rights of the deceased, an executor or
administrator may bring or defend, in the right of the deceased, actions for causes which
survive.

The above-quoted rules, while permitting an executor or administrator to represent or

to bring suits on behalf of the deceased, do not prohibit the heirs from representing the
deceased. These rules are easily applicable to cases in which an administrator has
already been appointed. But no rule categorically addresses the situation in which
special proceedings for the settlement of an estate have already been instituted, yet no
administrator has been appointed. In such instances, the heirs cannot be expected to
wait for the appointment of an administrator; then wait further to see if the administrator
appointed would care enough to file a suit to protect the rights and the interests of the
deceased; and in the meantime do nothing while the rights and the properties of the
decedent are violated or dissipated.

The Rules are to be interpreted liberally in order to promote their objective of

securing a just, speedy and inexpensive disposition of every action and proceeding.
[15]
They cannot be interpreted in such a way as to unnecessarily put undue hardships on
litigants. For the protection of the interests of the decedent, this Court has in previous
instances[16] recognized the heirs as proper representatives of the decedent, even when
there is already an administrator appointed by the court. When no administrator has
been appointed, as in this case, there is all the more reason to recognize the heirs as the
proper representatives of the deceased.Since the Rules do not specifically prohibit them
from representing the deceased, and since no administrator had as yet been appointed
at the time of the institution of the Complaint with the SEC, we see nothing wrong with
the fact that it was the heirs of John D. Young Sr. who represented his estate in the case
filed before the SEC.

CASE NO. 17

G.R. NO. 132174 AUGUST 20, 2001

GUALBERTO CASTRO, PETITIONER,
VS.
HONORABLE SECRETARY RICARDO GLORIA (DECS), RESPONDENT.

FACTS: One Porfirio Gutang Jr. Filed with the Department of Education, Culture and
Sports (DECS) a complaint for disgraceful and immoral conduct against petitioner, a
teacher in Guibuangan Central School, Barili, Cebu, for having an illicit affair with the
formers wife. The DECS Regional Office VII rendered a decision thru Asst. Supt. Concillo
declaring petitioner guilty of the offense charged and dismissed him from service. Said
judgment was affirmed by the DECS Central Office. Petitioner later on filed several
Motion for Reconsiderations (MR) to incumbent DECS Secretary which were all
overlooked. Thus, petitioner filed a case with DCES Central Office a motion for review
setting aside/modifying the decision of the DECS Region VII Director. Herein respondent
referred the motion for comment to the DECS Region VII who sustained the decision of
Asst. Supt. Concillo, so it denied the motion. This prompted the petitioner to file a
petition for mandamus with the RTC of Cebu. The trial court however dismissed petition
on the ground of non exhaustion of administrative remedies and mandamus would be
improper if appeal or some other equally adequate administrative remedy is available in
the ordinary courts of law. It is clear that the penalty of dismissal from service was
erroneously imposed upon the petitioner. However, certiorari is the remedy to correct the
errors of judgment which are grave and arbitrary and not mandamus. Hence, the instant
petition for review on certiorari.

ISSUE: WON the RTC erred in dismissing the petition for mandamus filed by the
petitioner.
HELD: Yes. The doctrine of exhaustion of administrative remedies calls for resort
first to the appropriate administrative authorities in the resolution of a controversy
falling under their jurisdiction before the same may be elevated to the courts of
justice for review. It is settled that non-observance of the doctrine results in lack
of a cause of action, which is one of the grounds allowed by the Rules of Court
for the dismissal of the complaint. The doctrine is not absolute. There are instances
when it may be dispensed with and judicial action may be validly resorted to
immediately. Among these exceptions are: 1) When the question raised is purely
legal; 2) when the administrative body is in estoppel; 3) when the act complained
of is patently illegal; 4) when there is urgent need for judicial intervention; 5)
when the claim involved is small; 6) when irreparable damage will be suffered; 7)
when there is no other plain, speedy and adequate remedy; 8) when strong
public interest is involved; and 10) in quo warranto proceedings. Truly, a petition for
mandamus is premature if there are administrative remedies available to
petitioner. But where the case involves only legal questions, the litigant need not
exhaust all administrative remedies before such judicial relief can be sought.Thus,
in the ultimate, the resolution of this case hinges on whether or not the
following is a question of law or a question of fact Is dismissal from the service
the proper penalty for the offense of disgraceful and immoral conduct? It is settled
that 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.
And the distinction is well known. There is a question of law when the doubt or
differences arise as to what the law is on a certain state of facts. There is a
question of fact when the doubt or differences arise as to the truth or the
falsehood of alleged facts.] In the case at bench, petitioner no longer disputes the
administrative finding of his guilt for the offense of disgraceful and immoral
conduct. It is settled and final insofar as he is concerned. What petitioner only
impugns is the correctness of the penalty of dismissal from the service. He is
convinced that the proper penalty for the first offense of disgraceful and immoral
conduct is only suspension from the service. Undoubtedly, the issue here is a
pure question of law. We need only to look at the applicable law or rule and we
will be able to determine whether the penalty of dismissal is in order.

CASE NO. 18

GR No. 129313 October 10, 2001

SPOUSES MA. CRISTINA D. TIRONA and OSCAR TIRONA, SPOUSES MA. PAZ D.
BAUTISTA and CESAR BAUTISTA, SPOUSES MA. ARANZAZU D. ORETA and
CANUTO ORETA, SPOUSES MA. CORAZON D. BAUTISTA and PABLO S. BAUTISTA,
JR., and DEO S. DIONISIO, petitioners, vs. HON. FLORO P. ALEJO as Presiding
Judge, Regional Trial Court of Valenzuela, Metro Manila, Branch 172, JUANITO
IGNACIO and LUIS NUEZ, respondents.
FACTS:On March 25, 1996, petitioners sued private respondents, Ignacio and Nuez for
ejectment in separate branches of MeTC of Valenzuela, namely Branch 81 and 82.
Petitioners allege that respondents unlawfully entered there fishpond lots and
occupied the same by means of force, stealth or strategy. Respondent Nuez was
alleged to have occupied a house belonging to Deo Dionisio and Ignacio on the
house of Sps. Bautista. Prior to these suits, there is already a pending case in the
Department of Agrarian Reform filed by respondents seeking for tenancy rights.
MeTC Branch 81 ruled in favor of petitioner, thereby ordering respondent Nuez to
vacate the said properties with damages and other fees. However, Branch 82
dismissed the ejectment case against Ignacio. On appeal to RTC, the appeal of
respondents and petitioners were properly consolidated. Respondents argued that
the lower court had no jurisdiction over the case as no evidence of prior possession
was presented by petitioners and the latter filed already the same case in the
DARAB as it is an agrarian dispute. Petituioner on their appeal regarding Ignacios
case pointed out the errors of the lower court. The RTC affirmed the dismissal of
the case against Ignacio and reversed that of Nuez.

ISSUE: WON the pendency of the suit filed by private respondents in the DAR proscribes
the institution of the ejectment cases.

WON there had been an infraction on the affidavit of non-forum-shopping

requirements.

HELD: YES. The pending suit under the DARAB bars the filing of the civil cases of the
petitioners against respondent due following the concept and principle of litis
pendentia that no party is allowed to vex another more than once regarding the
same subject matter and cause of action.

YES. Infraction on the affidavit of non-forum-shopping was present. Petitioner could

not have been unaware that the possession of subject fishponds was in issue under
the DARAB as they were parties therein.

Wherefore, the petition is denied.

CASE NO. 19

GR. No. 144189 October 5, 2001

R & M GENERAL MERCHANDISE, INC., petitioner, vs. COURT OF APPEALS and LA

PERLA INDUSTRIES, INC., respondents.

FACTS: Petitioner R&M entered into a contract of lease with Pioneer Realty,
for the lease of a parcel of land and building in Makati City. Later, Pioneer was
merged with respondent LA Perla who agreed to enter another lease contract with
petitioner on the same property subject of the first lease. The contract was for 3
years and renewed for another 3 years. Later after the expiration of the renewed 3
years, respondent and petitioner entered into a lease contract again, this time, for
five years. The contract provides that in case a party do not wish to renew the
contracrt anymore, a 45-day written notice must be accomplished. Months before
the expiry of the five year contract, petitioner sent a notice of non-renewal to
respondent who claims to have an option to renew. Respondent sent several
demand letters but petitioner refused to vacate the premises. Petitioner even filed
 a complaint for specific performance in Quezon City for respondent to let them
renew as what they claim to have been agreed upon by both parties orally. Private
respondent filed for unlawful detainer before the MeTC of Makati City which
favored respondent. On appeal to the RTC and CA, both courts affirmed the
decision. Hence, the petition.

ISSUE: WON the case must be dismissed on the ground of litis pendentia and forum-
shopping..

HELD: NO. The requirements of litis pendentia do not exist between this case and the
case filed by petitioner for specific performance in Quezon. For litis pendentia to
apply, there must be (a) identity of the parties;(b) identity of the rights asserted
and reliefs prayed for ;(c) that the judgement which may be rendered in one would
amount to res judicata in the other. The complaint for specific performance in
Quezon City prays for the renewal of the contract while the ejectment case herein,
is for recovery of possession. Thus litis pendentia nor forum shopping does not
apply.

CASE NO. 20

(G.R. No. 139068, Jan 16, 2004)

MALAYANG SAMAHAN NG MANGGAGAWA SA BALANCED FOOD, NILO LETADA,

et. al , petitioners, vs. PINAKAMASARAP CORPORATION, SY TIAN TIN, et.
al, respondents.

FACTS: The controversy stemmed from the petition of the union members of the
Malayang Samahan ng Manggagawa sa Balanced Food (petitioner union), who filed with
the management of Pinakamasarap Corporation (respondent company). They sought the
ouster of Rolando Reyes, companys Production and Assistant Manager. Respondent
claimed that petitioner union members & officers abandoned work and picketed. That,
although, the employees resumed their work, nonetheless persisted with their illegal
activities, causing the companys operations and production severely paralyzed.

Respondent filed with the Labor Arbiter a complaint for unfair labor practices (ULP)
and damages against petitioners, for violation of Art. 282 of the Labor Code and their
(CBA). Petitioners answered with motion to dismiss, claiming they left their workplace to
testify at a barangay hearing with the permission of respondent companys Assistant
Manager, respondent Tan.

The Labor Arbiter declared the forfeiture/ loss of employment status of the union
officers. Petitioners appeal to (NLRC), which uphold the illegality of the strike by
petitioners, but ordered their reinstatement. Both parties filed their motions for
reconsideration but were denied by the NLRC. Both parties filed a petition for certiorari,
but was similarly dismissed. The Resolution became final and executory.

On petitioners motion, the Arbiter issued a writ of execution directing the sheriff to
reinstate to their former positions. Thereupon, respondent filed an appeal to the NLRC
praying that the writ of execution be quashed. It alleged that there have been
supervening events which rendered unjust the reinstatement of petitioners to their
former positions. Among the supervening events was the hiring by respondent company
of new regular employees in place of petitioners. Thus, the Arbiter granted the motion
and quashed the alias writ of execution.
 The NLRC remanded the case to the Arbiter for immediate implementation of the
alias writ of execution. Respondent filed a motion for reconsideration but was denied.
Respondent filed a petition for certiorari.The Court of Appeals affirmed with modification
the final and executory Decision of the NLRC. The CA upheld the illegality of the strike by
petitioners, however, it modified the NLRC Decision reinstating them to the service by
declaring that they have lost their employment status.

Petitioners filed a motion for reconsideration but was denied. Hence, this petition for
review on certiorari.

ISSUE: Whether or not the NLRC committed grave abuse of discretion when it declared
the strike illegal but ordered the reinstatement of petitioners.

HELD: The Court of Appeals declared that the NLRC did not commit grave abuse of
discretion when it declared the strike illegal but ordered the reinstatement of
petitioners. Truly, the Appellate Court modified what should otherwise have been an
irreversible Decision.

Indeed, the same court disregarded the doctrine of res judicata. Applying the said
doctrine, the issue of whether petitioners should be reinstated to their former
positions despite the finding that they have participated in an illegal strike or
walkout may no longer be relitigated.

In Stilianopulos vs. City of Legaspi The Court held that when a right or fact has been
judicially tried and determined by a court of competent jurisdiction or an opportunity for
such trial has been given, the judgment of the court, as long as it remains unreversed,
should be conclusive upon the parties and those in privity with them. Clearly, there
should be an end to litigation by the same parties and their privies over a subject, once it
is fully and fairly adjudicated.

WHEREFORE, the petition is GRANTED. The assailed Decision and of the Court of
Appeals are hereby REVERSED and SET ASIDE. The Labor Arbiter is ordered to implement
the alias writ of execution with dispatch. SO ORDERED.

CASE NO. 21

(G.R. No. 124204. April 20, 2001)

NORMA V. MANALO, ET. AL VS. COURT OF APPEALS, SEC. OF EDUCATION,

CULTURE AND SPORTS ET.AL

FACTS: The Congress enacted Batas Pambansa Blg. 412, converting the Cebu School of
Arts &Trade into the Cebu State College of Science and Technology (CSCST) including
Abellana National School and all other Schools in Cebu City. On May 26, 1988, Congress
enacted R.A. No. 6655, or the Free Public Secondary Education Act of 1988. It vests
in the Department of Education, Culture and Sports (DECS) the establishment, renaming,
conversion, integration, separation, administration, supervision and control of all public
secondary schools and public secondary teachers and other school personnel, including
the payment of their salaries, allowances and other fringe benefits as well as those
provided by local government.
 Secretary Quisumbing issued DECS Order No. 5 setting forth the guidelines and
procedures in the implementation of Section 7 of R.A. No. 6655.

Plaintiff Romeo Reyes filed with the RTC Cebu a complaint for TRO enjoining
defendants from enforcing or implementing DECS Order No. 5 for being issued not in
accordance with law. However, the trial court dismissed the complaint.

DECS, entered into a Memorandum of Agreement (MOA) with the CSCST. The MOA
provided for the Transfer of the secondary education program of Abellana College of Arts
and Trade (ACAT), its personnel, facilities, as well as the funding of its operation, and
gradually phasing out its college offerings or integrating them into the main campus. The
MOA is based on R.A. No. 6655 which mandated the nationalization of public secondary
schools and their transfer to the DECS.

On Oct. 1990, Bonilla and other superintendents of CSCST filed with the RTC, Cebu
City, a petition for the issuance of preliminary injunction restraining the DECS from
continuing with the implementation of the rules and regulations separating the high
schools from CSCST. It also argued that R.A. No. 6655 is a general law which cannot
supersede B.P. Blg. 412, which is a special law. However, The trial court, likewise,
dismissed the petition. It ruled that DECS orders implementing R.A. 6655, are valid and
legitimate acts of the Secretary of Education. Corolarilly, prohibition and/or injunction will
not lie against the herein respondents. The Court further states that R.A. 6655 modified/
repealed BP 412.

On May 1992, Abucay and other CSCST faculty members filed with the RTC Cebu
another petition for Declaration of Nullity of the MOA with preliminary injunction and
restraining order. But again, the trial court dismissed the petition on the ground of lack of
jurisdiction, failure to exhaust administrative remedies and failure to state a cause of
action.

On February 4, 1993, Petitioners Manalo, and other faculty members, registrar,

librarian, janitor and other personnel of CSCST filed with the RTC Cebu a complaint for
Declaration of Nullity of MOA with Preliminary Injunction; questioning the validity of the
MOA entered by DECS and CSCST.

Respondent Bacalso filed a motion to dismiss the case on the ground of res
judicata. Respondent insisted that the case repeated the very same issue already
decided three times by the Regional Trial Court of Cebu. The appeal to the Supreme
Court from one of these decisions was dismissed, which dismissal had become final and
executory.

The trial court finds that respondents motion to be meritorious. Hence it dismissed
the petitioners complaint. Petitioners filed a motion for reconsideration which the trial
court denied. Petitioners filed a notice of appeal. The CA also dismissed petitioners
complaint. Hence, this petition.

ISSUE: Whether or not respondents motion to dismiss the case on the ground of res
judicata is meritorious.

HELD: Yes. The Court finds respondents Motion to dismiss the case on the ground of res
judicata meritorious.
 Res judicata means a matter adjudged, a thing judicially acted upon or decided; a
thing or matter settled by judgment. In res judicata, the judgment in the first action is
considered conclusive as to every matter offered and received therein, as to any other
admissible matter which might have been offered for that purpose, and all other matters
that could have been adjudged therein. Res judicata is an absolute bar to a subsequent
action for the same cause; and its requisites are: (a) the former judgment or order must
be final; (b) the judgment or order must be one on the merits; (c) it must have been
rendered by a court having jurisdiction over the subject matter and parties; (d) there
must be between the first and second actions, identity of parties, of subject matter and
of causes of action.

All these requisites were present in this case. The parties in Civil Case No. CEB-11735
and in Civil Case No. 13562 were faculty members and personnel of the CSCST. They
represented the same interest in both actions which referred to the nullity of the MOA. As
observed by the appellate court, there is substantial identity in the cause of action and
relief sought.

The order is conclusive on the validity of the Memorandum of Agreement, which will
bar a subsequent action on the same subject matter. If allowed, it would result in the re-
litigation of the same cause involving the same issues, parties, and subject matter.

The judgment of either court will constitute a bar to the other. It has been held that
where a litigant sues the same party against whom the same action or actions, for the
alleged violation of the same right, and the enforcement of the same relief are still
pending, the defense of litis pendentia in one case is a bar to the other; and a final
judgment in one would constitute res judicata and thus, would cause the dismissal of the
rest.

"Under the principle of res judicata, the Court and the parties are bound by such final
decision, otherwise, there will be no end to litigation. It is to the interest of the public
that there should be an end to litigation by the parties over a subject fully and fairly
adjudicated, and an individual should not be vexed twice for the same cause.

WHEREFORE, the petition is hereby DENIED and the appealed decision of the Court
of Appeals is AFFIRMED.

CASE NO. 22

CASE NO. 23

G.R. No. 143556 March 16, 2004

EQUITABLE PHILIPPINE COMMERCIAL INTERNATIONAL BANK and RAFAEL B.

BUENAVENTURA, petitioners,
vs.
HON. COURT OF APPEALS and SANTA ROSA MINING CO., INC., respondents.

FACTS: Sta. Rosa Mining Co., Inc. filed before the RTC Quezon City a complaint for sum
of money and damages against petitioners Philippine Commercial International Bank
alleging that it lost income opportunity from its joint venture with Sa Amin sa San Jose
Panganiban, Inc. Respondent alleged that it opened a savings account with the said bank
and informed the latter of its intention to convert its account into a savings/current/time
deposit account and sought to obtain checkbooks pursuant thereto on October 26, 1993
which the bank refused due to a restraining order issued by the Securities and Exchange
Commission (SEC). Respondent alleged that in refusing to issue checkbooks, Lota, the
bank manager was guilty of misrepresentation as verification with SEC showed that the
bank received the SEC order on October 27, 1993. Respondent averred that such refusal
resulted to its prejudice and its joint venture partner, Sa Amin.

Petitioners filed a Motion to Dismiss CA-G.R. SP No. 33674 on the grounds that Sta. Rosa
was guilty of forum shopping because the amount involved in the case was also the
issue filed in RTC Daet Camarines Sur and that the complaint stated no cause of action
because as judgment debtor in Civil Case No. 6014, Sta. Rosa has lost all rights over the
funds deposited under its Savings Account since the same had already been garnished
by RTC, Branch 39, in favor of the judgment creditor, Sa Amin. RTC denied petitioners
motion to dismiss. Petitioner filed a motion for reconsideration whereas Sta. Rosa filed a
motion to declare petitioners in default for failure to file their Answer. RTC likewise denied
the motion for reconsideration and granted petitioners motion to declare petitioners in
default.

Later petitioners became involved in Civil Case No. 6014 as a forced intervenor when the
Daet court ordered the continuation of garnishment of the funds despite the TRO and
preliminary injunction issued earlier by the SEC. Due to conflicting claims, it elevated the
matter to the Court of Appeals which dismissed the petition and upheld the order of
garnishment of the Daet court.

Petitioners then filed a petition for certiorari, prohibition and mandamus before the Court
of Appeals, which seasonably set aside the order of default of the lower court and
directed the latter to admit petitioners Answer and proceed to hear the case on the
merits.

Petitioners not satisfied with CAs decision elevated the matter to the Supreme Court.

Issues: 1. Whether or not Sta. Rosa is guilty of forum shopping;

2. Whether or not Civil Case No. Q-95-25073 should be dismissed for failure to
state a cause of action; and

3. Whether or not Civil Case No. Q-95-25073 should be dismissed on the ground of
res judicata.

RULING:

1. No. For a charge of forum shopping to prosper, there must exist between an action
pending in one court and another action before another court: (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. There is no identity of
parties since the plaintiff in Civil Case No. 6014, Sa Amin, is not a party in Civil
Case No. Q-95-25073. On the other hand, in Civil Case No. Q-95-25073, Sta. Rosa
is the plaintiff while petitioners are the defendants. Apparently, the parties
represented different interests in these cases. Neither is there identity of rights
asserted or relief sought. In Civil Case No. 6014, Sta. Rosa is defending its right as
a debtor in a collection case where petitioners are the intervenors, while in Civil
Case No. Q-95-25073, Sta. Rosa is asserting its right as a depositor to file a
 damage suit against the defendant, now petitioner bank. The two proceedings are
far from identical.

2. No. The respondents allegations would suffice to constitute a cause of action

against petitioners. That petitioners have a valid defense is another matter. At any
rate, matters such as the propriety of refusal to release the funds by petitioners and
the actual date of receipt of the restraining order, among others, are matters for
trial. They require evidentiary proof and support that can be better threshed out not
upon a motion to dismiss but in a full blown trial on the merits. These matters,
indeed, would not yet go into the question of the absence of a cause of action as a
ground to dismiss.

3. No. Res judicata or bar by prior judgment is a doctrine which holds that a matter
that has been adjudicated by a court of competent jurisdiction must be deemed to
have been finally and conclusively settled if it arises in any subsequent litigation
between the same parties and for the same cause. For a claim of res judicata to
prosper, the following requisites must concur: (1) there must be a final judgment or
order; (2) the court rendering it must have jurisdiction over the subject matter and
the parties; (3) it must be a judgment or order on the merits; and (4) there must be,
between the two cases, identity of parties, subject matter and causes of action. In
the present case, while the first three requisites may be present, the fourth
requisite is absent. As stated earlier, there is no identity of parties, subject matter
and causes of action between Civil Case No. 6014 and Civil Case No. Q-95-25073.

CASE NO. 24

CASE NO. 25

CASE NO. 26

CASE NO. 27

CASE NO. 28

TEODORO B. VESAGAS, and WILFRED D. ASIS, vs. The Honorable COURT OF

APPEALS and DELFINO RANIEL and HELENDA RANIEL

G.R. No. 142924 December 5, 2001

FACTS: The respondent spouses Delfino and Helenda Raniel are members in good
standing of the Luz Villaga Tennis Clud, Inc. (club). They alleged that petitioner Teodoro
B. Vesagas, who claims to be the club's duly elected president, in conspiracy with
petitioner Wilfred D. Asis, who, in turn, claims to be its duly elected vice-president and
legal counsel, summarily stripped them of their lawful membership, without due process
of law. Thereafter, respondent spouses filed a Complaint with the Securities and
Exchange Commission (SEC). Before the hearing, petitioners filed a motion to dismiss on
the ground that the SEC lacks jurisdiction over the subject matter of the case. The
motion was denied by SEC, as well as, the CA.

Hence, the present course of action where petitioner alleged that since its (the
Corporation) inception in the 1970's, the club in practice has not been a corporation.
They add that it was only the respondent spouses, motivated by their own personal
agenda to make money from the club, who surreptitiously caused its registration with the
SEC. They then assert that, at any rate, the club has already ceased to be a corporate
body. Therefore, no intra-corporate relations can arise as between the respondent
spouses and the club or any of its members. Stretching their argument further,
petitioners insist that since the club, by their reckoning is not a corporation, the SEC
does not have the power or authority to inquire into the validity of the expulsion of the
respondent spouses. Consequently, it is not the correct forum to review the challenged
act. In conclusion, petitioners put respondent spouses to task for their failure to implead
the club as a necessary or indispensable party to the case.

Issues:1. Whether or not the SEC has jurisdiction to try and hear the case

2. Whether or not the respondent Court of Appeals committed a reversible error

when it merely upheld the theoretical power of the SEC Hearing Officer to issue a
subpoena and to cite a person in contempt (actually a non-issue of the petition) while it
shunted away the issue of whether that hearing officer may hold a person in contempt
for not obeying a subpoena where his residence is beyond fifty kilometers from the place
of hearing and no transportation expense was tendered to him."

HELD:

1. YES. First we now resolve whether the dispute between the respondents and
petitioners is a corporate matter within the exclusive competence of the SEC to
decide. In order that the commission can take cognizance of a case, the
controversy must pertain to any of the following relationship:

a) between the corporation, partnership or association and its

stockholders, partners, members, or officers;
c) between the corporation, partnership, or association and the state
as far as its franchise, permit or license to operate is concerned; and
d) among the stockholders, partners or associates themselves.

The fact that the parties involved in the controversy are all stockholders or
that the parties involved are the stockholders and the corporation, does not
necessarily place the dispute within the loop of jurisdiction of the SEC. Jurisdiction
should be determined by considering not only the status or relationship of the
parties but also the nature of the question that is the subject of their controversy.
Also, the alleged failure of the respondents to implead the club as a
necessary or indispensable party where the Petitioners contend that the original
complaint should be dismissed for not including the club as one of the respondents
therein. Dismissal is not the remedy for non-joinder of parties. Under the
Rules, the remedy is to implead the non-party, claimed to be necessary or
indispensable, in the action, thus:

"SEC. 11. Misjoinder and non-joinder of parties. - Neither

misjoinder nor non-joinder of parties is a ground for dismissal of an
action. Parties may be dropped or added by order of the court on
motion of any party or on its own initiative at any stage of the action
and on such terms as are just. Any claim against a misjoined party
may be severed and proceeded with separately."

2. The other issue is with regard to the alleged oppressive subpoenas and orders
issued by Hearing Officer Soller, purportedly without or in excess of authority. In
light of PD 902-A's repeal, the need to rule on the question of the extent of the
contempt powers of an SEC hearing officer relative to his authority to issue
subpoenas and orders to parties involved in intra-corporate cases, or potential
witnesses therein has been rendered academic. The enactment of RA 8799 mooted
 this issue as SEC hearing officers, now bereft of any power to resolve disputes, are
likewise stripped of their power to issue subpoenas and contempt orders incidental
to the exercise of their quasi-judicial powers.
At any rate, it taxes our credulity why the petitioners insist in raising this
issue in the case at bar. The so-called oppressive subpoenas and orders were not
directed to them. They were issued to the club's secretary, Purita Escobar,
directing her to appear before the Commission and bring certain documents of the
club, that were supposedly under her possession or control. It is obvious that the
petitioners are not the proper parties to assail the oppressiveness of the
subpoenas or the orders, and impugn their validity. Elementary is the principle that
only those who expect to be adversely affected by an order can complain against
it. It is their addressee, Purita Escobar, who can assail their alleged
oppressiveness. Petitioners' protestation has therefore no legal leg to stand on.

CASE NO. 29

NEMENCIO C. EVANGELISTA, PASCUAL G. QUINTO, LUIS B. BUENA, EUSEBIA V.

TABLADA, CANUTO G. TISBE, DAVID R. CARULLO, SOFONIAS E. COLEGADO,
FELIX B. BUENA, TORIBIO C. EVANGELISTA, LEBRADA A. NICOLAS, ALECIA J.
RAMOS, MILA G. DE LOS REYES, SALVADOR I. DE LA TORRE, MOISES CRUZ,
RUFINO INFANTE, ALICIA ASTROLOGO, TRINIDAD LUMIQUED, LUZMINIDA
QUINIQUINI, & TEODORA C. TEMERAS, Petitioners. vs. CARMELINO M.
SANTIAGO

G.R. No. 157447. April 29, 2005

Principle laid down by SC:

Lack of legal capacity to sue means that the plaintiff is not in the exercise of his civil
rights, or does not have the necessary qualification to appear in the case, or does not
have the character or representation he claims. On the other hand, a case is
dismissible for lack of personality to sue upon proof that the plaintiff is not the real
party-in-interest, hence grounded on failure to state a cause of action. The term "lack of
capacity to sue" should not be confused with the term "lack of personality to sue." While
the former refers to a plaintiffs general disability to sue, such as on account of minority,
insanity, incompetence, lack of juridical personality or any other general disqualifications
of a party, the latter refers to the fact that the plaintiff is not the real party- in-interest.
Correspondingly, the first can be a ground for a motion to dismiss based on the ground
of lack of legal capacity to sue; whereas the second can be used as a ground for a
motion to dismiss based on the fact that the complaint, on the face thereof, evidently
states no cause of action.

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

During said hearing, petitioners presented their lone witness, Engineer

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

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

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

Issue: 1. Whether or not the Petitioner has the capacity to sue

2. Whether an action for quieting of title, specifically where

petitioners are in possession of subject land, can be subject of
prescription.

Held: No. According to Article 477 of the Civil Code, the plaintiff, in an action
to remove a cloud on or to quiet title, must have legal or equitable title to, or interest in,
the real property which is the subject matter of the action. Petitioners failed to establish
in their Complaint that they had any legal or equitable title to, or legitimate interest in,
the Subject Property so as to justify their right to file an action to remove a cloud on or to
quiet title.

Even as this Court agrees with the petitioners that their action was one for
removal of a cloud on or quieting of title, it does arrive at the same conclusion as the
trial court and the Court of Appeals that petitioners had no personality to file the said
action, not being the parties-in-interest, and their Complaint should be dismissed for not
stating a cause of action.

Therefore, without legal or equitable title to the Subject Property, the

petitioners lacked the personality to file an action for removal of a cloud on, or quieting
of, title and their Complaint was properly dismissed for failing to state a cause of action.
In view of the dismissal of the case on this ground, it is already unnecessary for this
Court to address the issue of prescription of the action.

CASE NO. 30

SUI MAN HUI CHAN and GONZALO CO, petitioners

vs.
HON. COURT OF APPEALS and OSCAR D. MEDALLA, respondents.

G.R. No. 147999 February 27, 2004

FACTS: On March 30, 1999, private respondent Oscar Medalla filed a complaint before
the RTC of Mandaluyong City for collection of a sum of money arising from breach of a
contract of lease and damages, against petitioners Sui Man Hui Chan and Gonzalo Co.
The complaint alleged that on November 14, 1988, Napoleon C. Medalla as lessor and
Ramon Chan as lessee entered into a Lease Contract3 over a hotel building located at No.
29 Abanao Street, Baguio City. Chan would use the leased premises as a restaurant
named "Cypress Inn". Petitioner Gonzalo Co was employed by Ramon Chan as the
general manager of "Cypress Inn" and acted as his agent in all his dealings with
Napoleon Medalla. When Ramon Chan died, he was survived by his wife, petitioner Sui
Man Hui Chan, who continued to operate the restaurant. On July 17, 1996, Napoleon
Medalla died. Among his heirs is private respondent Oscar Medalla, who succeeded him
as owner and lessor of the leased premises. The contract was neither amended nor
terminated after the death of the original parties but was continued by their respective
successors-in-interest pursuant to the terms thereof. Petitioners Chan and Co, the latter,
in his capacity as agent and general manager, continued to deal with private respondent
Medalla in all transactions pertaining to the contract. On various occasions, petitioners
failed to pay the monthly rentals due on the leased premises. Despite several
Statements of Accounts sent by Medalla, petitioners failed to pay the rentals due but,
nonetheless, continued to use and occupy the leased premises. Medalla then sent
demand letters to petitioners, but the latter still failed to pay the unpaid rentals. He also
found out that petitioners had not paid the realty taxes due on the leased premises since
1991, amounting to P610,019.11. Medalla then asked petitioners to settle the unpaid
rentals, pay the unpaid real estate taxes, and vacate the leased premises. On January
1999, petitioners vacated the premises but without paying their unpaid rentals and
realty taxes. Aggrieved by petitioners refusal to pay the amounts owing, which had
reached P4,147,901.80 by March 1999, private respondent Medalla instituted Civil Case
No. MC99-666.

In their Answer to the Complaint, petitioners denied owing private respondent the
amounts claimed by the latter. They alleged that the late Ramon Chan had paid all the
rentals due up to March 15, 1998. On July 19, 1999, petitioners filed a Supplemental
Answer with Motion to Dismiss alleging that they were neither parties nor privies to the
Contract of Lease, hence they are not the real parties-in-interest. Private respondent filed
a Reply and Opposition to petitioners Supplemental Answer with Motion to Dismiss
dated August 2, 1999, praying for the denial of the Motion to Dismiss for having been
belatedly filed in direct contravention of Section 1, Rule 16, of the 1997 Rules of Civil
Procedure.4 He further alleged that petitioner Chan, as the owner of the business and
petitioner Co as the agent of petitioner Chan, are clearly real parties-in-interest in the
case. Private respondent pointed to their continuous dealings with him in all transactions
relating to the contract after the death of Ramon Chan and even after the expiration of
the Contract of Lease. The RTC denied petitioners Motion to Dismiss. Dissatisfied,
petitioners elevated the matter to the Court of Appeals through a special civil action
of certiorari. The Court of Appeals, however, affirmed the RTC Orders.

ISSUE: Whether or not respondent Court of Appeals committed serious error in law in
affirming the RTC Orders denying petitioners motion to dismiss and the subsequent
motion for reconsideration.

HELD: No. Prefatorily, it bears stressing that petitioners Motion to Dismiss was
filed after an Answer had already been filed. This alone warranted an outright dismissal
of the motion for having been filed in contravention of the clear and explicit mandate of
Section 1, Rule 16, of the Revised Rules of Civil Procedure. Under this section, a motion
to dismiss shall be filed within the time for but before filing the answer to the complaint
or pleading asserting a claim.9 Here, petitioners filed their Supplemental Answer with
Motion to Dismiss almost two months after filing their Answer, in clear contravention of
the aforecited rule. The Court of Appeals stated that the grant or denial of a Motion to
Dismiss is an interlocutory order, and it cannot be the proper subject of a special civil
action for certiorari. The proper remedy in such a case is to appeal after a decision has
been rendered, the CA said. A writ of certiorari is not intended to correct every
controversial interlocutory ruling; it is resorted to only to correct a grave abuse of
discretion or a whimsical exercise of judgment equivalent to lack or excess of jurisdiction.
The function of a petition for certiorari is limited to keeping an inferior court within the
bounds of its jurisdiction and to relieve persons from arbitrary acts, acts which courts or
judges have no power or authority in law to perform. Certiorari is not designed to correct
erroneous findings and conclusions made by the court. At any rate, we find no merit to
petitioners contention that they are not real parties-in-interest since they are not parties
nor signatories to the contract and hence should not have been impleaded as
defendants. It is undeniable that petitioner Chan is an heir of Ramon Chan and, together
with petitioner Co, was a successor-in-interest to the restaurant business of the late
Ramon Chan. Both continued to operate the business after the death of Ramon. Thus,
they are real parties-in-interest in the case filed by private respondent, notwithstanding
that they are not signatories to the Contract of Lease.

WHEREFORE, the instant petition is DENIED and the Decision of the Court of
Appeals is AFFIRMED.

CASE NO. 31

G.R. No. 129008 January 13, 2004

TEODORA A. RIOFERIO, VERONICA O. EVANGELISTA assisted by her husband

ZALDY EVANGELISTA, ALBERTO ORFINADA, and ROWENA O. UNGOS, assisted by
her husband BEDA UNGOS, petitioners

vs.

COURT OF APPEALS, ESPERANZA P. ORFINADA, LOURDES P. ORFINADA,

ALFONSO ORFINADA, NANCY P. ORFINADA, ALFONSO JAMES P. ORFINADA,
CHRISTOPHER P. ORFINADA and ANGELO P. ORFINADA, respondents

FACTS: On May 13, 1995, Alfonso P. Orfinada, Jr. died without a will leaving several
personal and real properties. He also left a widow, respondent Esperanza, whom he
married in 1960. They had seven children. Apart from the respondents, the demise of the
decedent left in mourning his paramour, petitioner Teodora, and their children, co-
petitioners in this case.
 On November 14, 1995, respondents discovered that on June 29, 1995, petitioner
Teodora and her children executed an Extrajudicial Settlement of Estate of a Deceased
Person with Quitclaim involving the properties of the estate of the decedent.
Corresponding certificate of titles were issued to them. Respondents also found out that
petitioners were able to obtain a loan of P700,000.00 from the Rural Bank of Mangaldan
Inc. by executing a Real Estate Mortgage over the properties subject of the extra-judicial
settlement.

On December 1, 1995, respondent Alfonso Clyde filed a Petition for Letters of

Administration praying that letters of administration encompassing the estate of the
decedent be issued upon him. Pending such proceeding, respondents also filed
a Complaint for the Annulment/Rescission of Extra Judicial Settlement of Estate of a
Deceased Person with Quitclaim, Real Estate Mortgage and Cancellation of Transfer
Certificate of Titles against petitioners. Petitioners filed their Answer interposing the
defense that the property subject of the contested deed of extra-judicial settlement
pertained to the properties originally belonging to the parents of Teodora and the titles
thereof were delivered to her as an advance inheritance but the decedent had managed
to register them in his name. They also raised the defense that respondents are not the
real parties-in-interest in view of the pendency of the administration proceedings.

The RTC denied the motion on the ground that respondents, as heirs, are the real
parties-in-interest. Petitioners moved for its reconsideration but was likewise denied.
Petitioners appealed before the CA, but the CA discerned no grave abuse of discretion
amounting to lack or excess of jurisdiction by the public respondent judge when he
denied petitioners motion to set affirmative defenses for hearing in view of its
discretionary nature. A motion for reconsideration was also denied. Hence, this petition
for review.

ISSUE: WON the heirs may bring suit to recover property of the estate pending the
appointment of an administrator.

HELD: Yes. Petitioners vehemently fault the lower court for denying their motion to set
the case for preliminary hearing on their affirmative defense that the proper party to
bring the action is the estate of the decedent and not the respondents. It must be
stressed that the holding of a preliminary hearing on an affirmative defense lies in the
discretion of the court. Sec. 5, Rule 16 provides that, Any of the grounds for dismissal
provided for in this rule, except improper venue, may be pleaded as an affirmative
defense, and a preliminary hearing may be had thereon as if a motion to dismiss had
been filed. The provision is clearly indicative of the optional character of the preliminary
hearing. It denotes discretion and cannot be construed as having a mandatory effect.

The lower court cannot likewise be faulted for recognizing the legal standing of the
respondents as heirs to bring the suit. Pending the filing of administration proceedings,
the heirs without doubt have legal personality to bring suit in behalf of the estate of the
decedent in accordance with the provision of Article 777, the rights to succession are
transmitted from the moment of the death of the decedent. Even if administration
proceedings have already been commenced, the heirs may still bring the suit if an
administrator has not yet been appointed. In such instances, the heirs cannot be
expected to wait for the appointment of an administrator; then wait further to see if the
administrator appointed would care enough to file a suit to protect the rights and the
interests of the deceased; and in the meantime do nothing while the rights and the
properties of the decedent are violated or dissipated. Even if there is an appointed
administrator, jurisprudence recognizes two exceptions: (1) if the executor or
administrator is unwilling or refuses to bring suit; and (2) when the administrator is
alleged to have participated in the act complained of and he is made a party defendant.
Therefore, the rule that the heirs have no legal standing to sue for the recovery of
property of the estate during the pendency of administration proceedings has three
exceptions, the third being when there is no appointed administrator such as in this case.

WHEREFORE, the petition for review is DENIED. The assailed decision and resolution
of the Court of Appeals are hereby AFFIRMED.

CASE NO. 32

MUNICIPALITY OF BINAN, LAGUNA VS COURT OF APPEALS and JESUS GARCIA

G.R.No. L-94733

FACTS: The petitioner herein filed a civil case against respondents for unlawful detainer,
with preliminary mandatory injunction in MTC Binan, Laguna. The said petitioner alleged
that there is no renewal of 25 years lease of contract however, private respondents
opposed to petitioner contending that the 25 years lease of contract had not yet expired.
Assuming that it was expired, indicated thereof the "renewal for 25 years lease of
contract. Petitioner reply to respondent and thereby respondent filed Motion for
Preliminary Hearing as the Dismiss has been Filed" on the ground that complaint states
no cause of action.

After some further exchange of opposition between petitioner and respondent, MTC
render its judgment in favor to petitioner ordering respondent to vacate the premises.
Respondents filed a Notice of Hearing in RTC however petitioner filed Motion for
execution pending appeal which was granted by presiding judge and enforce judgment.

Private respondent filed in Court of appeals for issuance of writ of Preliminary

Injunction assailing that petitioner failed to furnish him a copy of the motion that
contrary to Section 6, Rule 15 of Rules of Courts. Hence, this petition.

ISSUE: Whether or not the lower court acted in abuse of discretion for not complying the
rules under Section 6, Rule 15 of Rules of Court.

RULING: Yes, The Court of Appeals found out that MTC acted with serious abuse in
discretion which is tantamount lack of excess of jurisdiction to issue a writ of execution
pending appeal. Section 5, Rule of the Rules of Court pertinently provides: Sec. 5.
Pleading grounds as affirmative defenses. - Any of the grounds for dismissal provides for
in this Rule, except improper venue, preliminary hearing may be had thereon as if a
motion to dismiss had been filed.Further, CA said that the error committed by the court
is correctible by ordinary appeal and the failure to state cause of action is not necessary
in the case as ruled in "Heirs vs Genato".

.respondent Judge committed an error in conducting a preliminary hearing on

the private respondent's affirmative defenses. It is a well-settled rule that in a
motion to dismiss based on the ground that the complaint fails to state a cause of
action, the question submitted to the court for determination is the sufficiency of
the allegations in the complaint itself. Whether those allegations are true or not is
beside the point, for their truth is hypothetically admitted by the motion. The issue
rather is: admitting them to be true, may the court render a valid judgment in
accordance with the prayer of the complaint? Stated otherwise, the sufficiency of
the cause of action must appear on the face of the complaint in order to sustain a
dismissal on this ground. No extraneous matter may be considered nor facts not
 alleged, which would require evidence and therefore, must be raised as defenses
and await the trial. In other words, to determine sufficiency of the cause of action,
only the facts alleged in the complaint, and no other should be considered. The
respondent Judge departed from this rule in conducting a hearing and in receiving
evidence in support of private respondent's affirmative defense, that is, lack of
cause of action

The determination of sufficient of cause of action can be trace out only in allegation in
the complaint and no other should be consider.

CASE NO. 33

G.R. No. L-27187 July 22, 1971

ANTONIO MONTEJO and CONSOLACION BIBERA, plaintiffs-appellants,

vs.
VICENTA UROTIA, as heir of JUANA BIBERA, ET AL., defendants-appellees.

(and 8 other cases consolidated herein)

FACTS: The issues in these nine cases are substantially the same, hence decided jointly.

L-27187. On July 2, 1962, plaintiffs Montejo and Bibera filed a complaint with the
CFI of Leyte, seeking a) to prevent the foreclosure of a mortgage on several parcels of
land they claim to own in common with the defendants; b) to have said parcels of land
partitioned among its co-owners; c) the release, from the aforementioned mortgage, of
the said personal; and d) the collection of certain sums of money allegedly due from the
defendants. There were 24 defendants under the original complaint, which was amended
to include 20 additional defendants. More a year later, 17 defendants had not been
summoned. Said court then issued an order, directing the plaintiffs to exert efforts to
cause said defendants to be summoned. Over two years later, the court dismissed the
case for failure of the plaintiffs to comply with said order.

L-29098. A case was filed for the collection of a sum of money before the City
Court of Manila against defendants Arcellana and the Capital Insurance & Surety Co., Inc.
Judgment was rendered in favor of the plaintiff, People's Car Inc. Capital Insurance &
Surety Co., Inc., appealed to the CFI of Manila. On October 24, 1967, CFI issued a notice
to the parties, advising them that the appealed case had then been docketed in said
court. Counsel for the appellant received, on December 18, 1967, a notice that a pre-trial
would be held on January 4, 1968. He, however, failed to appear at said pre-trial. Hence,
the Court dismissed the appeal and the judgment appealed from revived, for failure to
prosecute on the part of said appellant.

L-29373. An action for the recovery of a sum of money was filed before the City
Court of Manila against defendants Bandayrel and Boquer. Boquer was declared in
default, while Bandayrel and plaintiff Bolivar submitted a written "stipulation of facts and
compromise agreement," The court rendered judgment in favor of Bolivar. Bandayrel
appealed to the CFI Instance of Manila, which set the case for pre-trial on February 22,
1967. Both parties submitted a motion stating that they are trying to settle the case
amicably. The court granted them until Feb. 29, 1967 to submit their amicable
settlement or a negative manifestation. The hearing was reset to April 8, 1967. On this
date, both parties appeared before the court. However, counsel for the plaintiff-appellee
manifested that the defendants have not submitted any proposed settlement terms and
moved that the appeal be dismissed, which was granted immediately.

L-29454. An action to restrain the defendants "from performing any and all acts
which will tend to prejudice" the alleged rights of plaintiff Pagadian Iron Mines over a
given iron lode claim as well as to recover damages was filed before the CFI of
Zamboanga. After the issues were joined, the case was set for trial. Six days before the
trial, the same was cancelled upon motion of the parties who alleged that there are
negotiations for amicable settlement. The same was several times reset for hearing,
often postponed mostly upon the same ground. After thirteen (13) postponements, the
case was, set for hearing on December 8, 1966, which both parties moved again to be
postponed for the same reason. However, the case had been pending for over six (6)
years; the court ordered the case dismissed "for failure to prosecute." A reconsideration
of this order was later denied.

L-29542. On August 28, 1963, Maderazo brought an action to recover a sum of

money from defendant Lim Lian Khoan, before the Pasay City Court. Said court dismissed
the case. Maderazo, appealed to the CFI of Rizal, which notified the parties that the
appeal had been docketed with said court and that the period to file pleadings would
commence from receipt of said notice. However, the case was ordered dismissed "for
failure to prosecute for an unreasonable length of time."

L-30711. An action for the recovery of a sum of money against Antonio Buhat,
was instituted in the Municipal Court of General Santos. The case having been dismissed
upon the ground of prescription, plaintiff, Republic of the Philippines, appealed to the
Court of First Instance. Both parties were notified that the record of the case had been
received by the latter court, which, on January 30, 1969, dismissed it upon the ground of
failure of the plaintiff to prosecute the same for an unreasonable length of time.

L-30744. , Plaintiff Santos seeks to recover from defendant Taniongon the

possession of a parcel of land. She filed a complaint before the CFI of South Cotabato.
Defendant filed, on August 3, 1967, his answer with a counterclaim, to which plaintiff
replied, on August 14, 1967 with an answer to the counterclaim. On January 23, 1969,
the case was dismissed for failure to prosecute, plaintiff having done nothing in the
meantime.

L-30933. The complaint for reconveyance filed by plaintiffs Gudmalin and Sabijon
filed with the CFI of Zamboanga del Sur, was dismissed for lack of cause of
action.Plaintiffs then filed, on March 31, 1962, their notice of appeal, appeal bond and
record on appeal. When the latter was considered for approval, counsel for the
defendants pointed out that its caption did not set forth the full names of all parties.
Thereupon, the Judge stated that the court will approve the record on appeal. Plaintiffs
claim to have later amended the same "by inclusion of all parties in handwriting duly
initialed" in the original Record on Appeal, although without giving respondents the
notice required in Section 7 of Rule 41 of the Rules of Court. Over five (5) years later, the
appeal was dismissed for failure of the plaintiffs to submit an amended record on appeal,
in accordance with said provision of the Rules of Court.

L-31072. Petitioner Olilang filed a special civil action for certiorari, prohibition
and mandamus, with the CFI of Manila, on September 2, 1967, to annul and set aside a
decision of respondent Conrado F. Estrella, as Governor of the Land Authority, approving
the sale of a parcel of land, to private respondent Nocon, after said lot had been
allegedly sold to Olilang, and to require said Governor Estrella to allocate the disputed
land to Olilang. The court issued an order setting the case for hearing on February 6,
1969, but, despite notice given to counsel for Olilang, he did not appear before the court
on that date. Thus, the case was dismissed. Olilang's counsel filed a motion for Relief or
Reconsideration upon the ground that, in making the memorandum of said hearing, his
office secretary had erroneously made the corresponding entry for February 11, 1969,
instead of February 6, 1969. This motion was denied.

ISSUE: WON the dismissal of the action due to failure to prosecute is warranted.

HELD: Yes. Section 3 of Rule 17 reads, If plaintiff fails to appear at the time of the trial,
or to prosecute his action for an unreasonable length of time, or to comply with these
rules or any order of the court, the action may be dismissed upon motion of the
defendant or upon the court's own motion. This dismissal shall have the effect of
adjudication upon the merits, unless otherwise provided by court. Construing this
provision, it was held that the dismissal of an action pursuant to this rule rests upon the
sound discretion of the court. As to what constitutes an "unreasonable length of time," it
"depends upon the circumstances of each particular case." Thus, the Court refused to
disturb orders of dismissal for failure of the plaintiffs to prosecute for a period of four (4)
years, about three (3) years, over a year, less than a year, and even less than three (3)
months, as well as for failure of the plaintiffs to comply, for less than two (2) months,
with an order directing him to file a bill of particulars.

WHEREFORE, the orders appealed from in each one of these nine (9) cases are
hereby affirmed, with costs against the respective appellants, except appellant in L-
30711, which is the Government.

CASE NO.34

G.R. No. L-29098, July 22, 1971

PEOPLE'S CAR, INC.,

Plaintiff-Appellee,

-versus-

JOSE ARCELLANA, and THE CAPITAL

INSURANCE AND SURETY CO., INC.,
Defendants,
THE CAPITAL INSURANCE AND
SURETY CO., INC.,
as Defendant-Appellant.

FACTS: On April 20, 1966, appellee initiated a case for the collection of a sum of money
against defendants JOSE ARCELLANA and THECAPITAL INSURANCE and SURETY CO.,INC.,
the herein appellant. Judgment for plaintiff People's Car Inc., having been rendered, on
September 7, 1967, defendant Capital Insurance & Surety Co., Inc., appealed to the
Court of First instance of Manila. On October 24, 1967, the latter issued a notice to the
parties, advising them that the appealed case had then been docketed in said court.
Counsel for the appellant received, on December 18, 1967, notice to the effect that a
pre-trial would be held on January 4, 1968. He, however, failed to appear at said pre-trial.
The said counsel alleged that his failure to appear at the pre-trial, on January 4, 1968,
was due to the fact that he then had to attend the trial of another case; that he had filed,
on December 27, 1967, a motion for postponement of said pre-trial upon such ground;
and that, although the motion was denied on December 29, 1967, notice of the order to
this effect was not received by him until January 12, 1968, or eight (8) days after the
scheduled pre-trial. Hence, the Court forthwith ordered the appeal dismissed and the
judgment appealed from revived, for failure to prosecute on the part of said appellant.

ISSUE: Whether or not the CFI erred in dismissing the appeal based on the ground of
failure to prosecute despite the fact that the reason the appellant failed to appear during
pre-trial was because the Order for the denial of the Motion for Postponement was
received by the latters counsel (8) days after the scheduled pre-trial.

HELD: No, the CFI was correct in dismissing the appeal.

Section 3 of Rule 17 of the present Rules of Court, which is a reproduction of Section 3 of

Rule 30 of the Rules of Court effective July 1, 1940, reads:

Failure to prosecute. If plaintiff fails to appear at the time of the

trial, or to prosecute his action for an unreasonable length of time, or to
comply with these rules or any order of the court, the action may be
dismissed upon motion of the defendant or upon the court's own
motion. This dismissal shall have the effect of an adjudication upon the
merits, unless otherwise provided by court.

As to what constitutes an "unreasonable length of time," within the purview of the

above-quoted provision, it was ruled that it "depends upon the circumstances of each
particular case"; that "the sound discretion of the court" in the determination of said
question "will not be disturbed, in the absence of patent abuse"; and that "the burden of
showing abuse of judicial discretion is upon appellant since every presumption is in favor
of the correctness of the court's action."

Appellants late receipt of the Order denying his of Motion for Postponement which
allegedly caused his non-appearance on the date of trial is insufficient to warrant a
reversal of the order appealed from. Appellant was represented by the "Achacoso,
Ocampo and Simbulan" Law Firm, on behalf of which Atty. Sabino P. Palomares, Jr. had
appeared. If Atty. Palomares had another case set for trial on January 4, 1968, any of the
three (3) members of the law firm could have and should have appeared at the pre-trial
of the case at bar. Moreover, in the absence of an order granting said motion for
postponement, appellant's counsel was not justified in assuming that the
motion would be granted.

Motions for postponement are left to the sound discretion of the trial court
and unless there be an abuse of such discretion the appellate court will not
interfere with the exercise of that discretion.

The order appealed from was affirmed.

CASE NO. 35

GR No. 139337, August 15, 2001

MA. CARMINIA C. ROXAS, petitioner,

-versus-
HON. COURT OF APPEALS and JOSE ANTONIO F. ROXAS, respondents.

FACTS: On November 4, 1997, petitioner filed with the RTC of Paranaque City an action
for declaration of nullity of marriage against her husband, the private respondent herein,
with an application for support pendente lite for their four (4) minor children. The case
was raffled to Branch 257 of the RTC of Paranaque City presided by Judge Rolando C.
How. The petitioner thereafter filed in the said RTC Branch 257 a Notice of Dismissal to
dismiss the complaint, without prejudice, pursuant to the provision of Section 1, Rule 17,
of the 1997 Rules of Civil Procedure, considering that summons has not yet been served
and no responsive pleading has yet been filed.

The same complaint, now docketed as Civil Case No. 97-0608, was re-filed on
November 25, 1997. It was raffled in due course to Branch 260 of the RTC of Paranaque
City presided by Judge Helen Bautista-Ricafort.

The trial court after pre-trial then issued its Order dated May 13, 1998 declaring the
proceedings on the application for support pendente lite terminated and deemed
submitted for resolution; and set the case for pre-trial for the declaration of nullity of
marriage on June 15, 1998. On May 19, 1998, Judge Bautista-Ricafort, issued an
Order granting the application for support pendente lite.

On July 22, 1998, the petitioner filed a manifestation and motion praying the trial
court to cite private respondent in contempt of court after the latter failed to comply with
the said Order dated May 19, 1998 of the trial court. Private respondent, through his
counsel, Atty. Alberto Diaz, filed a counter-manifestation and a motion praying that the
manner and mode of payment of his contribution to the expenses of his minor children
be modified. On September 23, 1998, Judge Bautista-Ricafort issued an Order directing
the private respondent to comply fully with the Order of this Court dated May 19, 1998,
within five (5) days from his receipt hereof under pain of legal sanctions if he still fails to
do so.

On September 28, 1998, or about four (4) months later, private respondent, through
his new counsel, Atty. Francisco Ma. Guerrerro, filed an Omnibus Motion (1) applying to
be authorized to discharge Atty. Alberto Diaz as his counsel and to substitute him with
the new counsel; (2) to re-open hearing on the Motion for Support Pendente Lite; and (3)
to temporarily stay execution of the Orders dated May 19, 1998 and September 23,
1998. The omnibus motion was set for hearing on October 2, 1998. Private respondent
requested that before the omnibus motion is heard the May 19, 1998 Order be
temporarily suspended. When the presiding judge did not grant that request of private
respondent, the latters new counsel refused to proceed with the hearing of his
omnibus motion.

On October 8, 1998, Judge Bautista-Ricafort issued an Order giving private

respondent ten (10) days to comply with the May 19, 1998 Order, otherwise, he would be
cited for contempt of court.

On October 23, 1998, private respondent filed with the Court of Appeals a petition for
certiorari questioning the Orders of the trial court dated May 19, 1998, September 23,
1998 and October 8, 1998. Meanwhile, on November 27, 1998, Judge Bautista-Ricafort
issued another Order, charging the private respondent guilty of Contempt of Court.

By virtue of the arrest warrant for being found guilty of contempt of court, private
respondent was arrested on December 14, 1998 but he was released on the following
day after the appellate court temporarily enjoined Judge Bautista-Ricafort from enforcing
her November 27, 1998 Order as well as her Orders dated May 19, 1998, September 23,
1998, and October 8, 1998. When the temporary restraining order lapsed on March 11,
1998, the respondent was again arrested by virtue of a warrant of arrest issued by Judge
Bautista-Ricafort. After depositing with the clerk of court of the trial court the amount of
support in arrears stated in the Orders of the trial court, private respondent was released
from custody.

On April 21, 1999, the Court of Appeals rendered a Decision in favor of private
respondent, declaring the proceedings/actions taken by respondent Judge on the matter
of support pendente lite as NULL and VOID. The appellate court nullified the Orders and
the proceedings of the trial court for the reason that the certificate of non-forum
shopping of the petitioner did not mention the prior filing of Civil Case No. 97-0523
before the sala of Judge How and the dismissal thereof without prejudice.

ISSUE: 1. Whether or not the CA erred in holding the petitioner guilty of forum shopping
for not having mentioned the prior filing and dismissal without prejudice of Civil Case No.
97-0523 before the sala of Judge How upon her institution of a similar action in Civil Case
No. 97 before the sala of Judge Bautista-Ricafort.
2. Whether or not, in case the CA erred in holding the petitioner guilty of forum
shopping, the private respondent may question the validity of the proceedings and such
decision by Judge Bautista-Ricafort.

HELD: 1. Yes, the CA erred in holding the petitioner guilty of forum shopping. The
proceedings and orders issued by Judge Bautista-Ricafort in the application for
support pendente lite(and the main complaint for annulment of marriage) in the re-filed
case in Civil Case No. 97-0608 were not rendered null and void by the omission of a
statement in the certificate of non-forum shopping regarding the prior filing and
dismissal without prejudice of Civil Case No. 97-0523 which involves the same parties
and issues.

Forum shopping is an act of a party against whom an adverse judgment has been
rendered in one forum of seeking and possibly getting a favorable opinion in another
forum, other than by appeal or the special civil action of certiorari, or the institution of
two or more actions or proceedings grounded on the same cause on the supposition that
one or the other court would make a favorable disposition. It exists where the elements
of litis pendencia are present, and where a final judgment in one case will amount to res
judicata in the other. For the principle of res judicata to apply, the following must be
present: (1) a decision on the merits; (2) by a court of competent jurisdiction; (3) the
decision is final; and (4) the two actions involve identical parties, subject matter and
causes of action.

In the case at bar, there was no adverse decision against the petitioner in Civil Case
No. 97-0523. The dismissal without prejudice of the complaint at the instance of the
petitioner was pursuant to Section 1, Rule 17 of the 1997 Rules of Civil Procedure
considering that it was done before service of answer or any responsive pleading. The
dismissal does not amount to litis pendencia nor to res judicata. There is no litis
pendencia since the first case before Judge How was dismissed or withdrawn by the
plaintiff (herein petitioner), without prejudice, upon her filing of a notice of dismissal,
pursuant to Section 1, Rule 17 of the 1997 Rules of Civil Procedure. Neither is there res
judicata for the reason that the order of dismissal was not a decision on the merits but a
dismissal without prejudice. Section 5, Rule 7 of the 1997 Rules of Civil Procedure must
be so interpreted and applied to serve as an instrument to promote and facilitate the
orderly administration of justice and should not be interpreted with such absolute
literalness as to subvert its own ultimate and legitimate objective or the goal of all rules
or procedure which is to achieve substantial justice as expeditiously as possible.

2. No, the private respondent is estopped in questioning the proceedings and orders
of Judge Bautista-Ricafort. He tacitly acknowledged the validity of the proceedings and
the orders issued by the said trial judge by participating actively in the hearing on the
application for support pendente lite and by praying for the modification of the Order of
May 19, 1998 in that he should be allowed to directly pay to the persons or entities to
which payments of such expenses are intended in connection with the required
support pendente lite of their minor children. It is also too late for the private respondent
to claim wrong venue in the RTC of Paranaque City as alleged proof of forum shopping.
He should have raised that ground in his answer or in a motion to dismiss. But he did
not, so it is deemed waived. Besides, petitioner is also a resident of Paraaque where the
family of her parents reside.

The petition for certiorari in the case at bar on the ground of alleged forum shopping
in the trial court is premature for the reason that there is an adequate and speedy
remedy available in the ordinary course of law to private respondent, i.e., a motion to
dismiss or a motion for reconsideration on the ground of either litis pendencia or res
judicata and a hearing conducted thereon before the trial court. But private respondent
did not file such a motion based on either of said grounds. The same ground cannot be
raised in a petition for certiorari before the appellate court while the main action in the
trial court is still pending for the reason that such ground for a motion to dismiss can be
raised before the trial court any time during the proceedings and is not barred by the
filing of the answer to the complaint.

Where the ground is short of res judicata or litis pendencia, as in the case at bar, the
Court of Appeals acted with grave abuse of discretion amounting to excess of jurisdiction
when it granted the petition for certiorari filed by herein private respondent. The trial
court should have been given an opportunity to rule on the matter of alleged forum
shopping in consonance with the hierarchy of courts.

The Decision and Resolution dated April 21, 1999 and July 20, 1999 respectively, of
the Court of Appeals are REVERSED, and the Orders dated May 13, 1998, May 19, 1998
and September 23, 1998 of the Regional Trial Court of Paraaque City, Branch 260, are
REINSTATED.

CASE NO. 36

CASE NO. 37

CASE NO. 38

CASE NO. 39

CASE NO. 40

CASE NO. 41

G.R. No. 101883 December 11, 1992

SPOUSES LYDIA VS CA

FACTS: Nelia Ziaga, herein respondent, filed for the rescission of a contract of lease over
a parcel of land with herein petitioner, Lydia Meliton. Alleged as grounds therefor were
said petitioner's failure, as lessee, to deposit the one month rental and to pay the
monthly rentals due; her construction of a concrete wall and roof on the site of a
demolished house on the leased premises without the lessor's written consent; and here
unauthorized sublease of the leased property to a third party. The petitioner denied the
allegations and set up three counterclaims for recovery of the value of her kitchenette
constructed on the leased parcel of land and which was demolished by private
respondent plus the value of the furniture and fixtures purchased for use in the
kitchenette. The trial court dismissed the complaint upon motion of private respondent
contending that her cause of action had already become moot and academic by the
expiration of the lease contract. The counterclaims were also dismissed for non-payment
of docket fees. Again, the petitioners filed a complaint or recovery of the same amounts
involved and alleged in their counterclaims. The private respondents argue that the
cause of action therein was barred by prior judgment. The RTC denied private
respondents motion on the ground that the dismissal of the petitioner's counterclaimsis
not an adjudication on the merits as the court did not acquire jurisdiction over the
counterclaims for failure of petitioner Lydia Meliton to pay the docket fees, hence the
said dismissal does not constitute a bar to the filing of the later complaint. The CA
reversed such decision holding that the counterclaim is a compulsory one, the failure of
the respondents to seek a reconsideration of the dismissal of their counterclaim or to
take an appeal therefrom rendered the dismissal final. Such dismissal barred the
prosecution of their counterclaim by another action. Hence, this petition.

ISSUES: 1. WON the counterclaims of petitioners are compulsory in nature?

2. WON petitioners, having failed to seek reconsideration of or to take an appeal

from the order of dismissal of their counterclaims, are already barred from
asserting the same in another action?

HELD:

1. A counterclaim is compulsory if (a) it arises out of, or is necessarily connected with,

the transaction or occurrence which is the subject matter of the opposing party's
claim; (b) it does not require for its adjudication the presence of third parties of
whom the court cannot acquire jurisdiction; and (c) the court has jurisdiction to
entertain the claim. In the instant case, all these requisites are present. Private
respondent's complaint was for rescission of the contract of lease due to petitioner
Lydia Meliton's breach of her obligations under the said contract. On the other
hand, petitioner's counterclaims were for damages for unlawful demolition of the
improvements she introduced pursuant to her leasehold occupancy of the
premises, as well as for the filing of that civil suit which is contended to be clearly
unfounded. Both the claims therein of petitioners and private respondent
arose from the same contract of lease. The rights and obligations of the
parties, as well as their potential liability for damages, emanated from
the same contractual relation. Petitioners' right to claim damages for the
unlawful demolition of the improvements they introduced on the land was based
on their right of possession under the contract of lease which is precisely the very
same contract sought to be rescinded by private respondent in her complaint. The
two actions are but the consequences of the reciprocal obligations imposed by law
upon and assumed by the parties under their aforesaid lease contract. That
contract of lease pleaded by private respondent constitutes the foundation and
basis relied on by both parties for recovery of their respective claims.

The relationship between petitioners' counterclaims and private respondent's

complaint is substantially the same as that which exists between a complaint for
recovery of land by the owner and the claim for improvements introduced therein
by the possessor.

2. It is a rule that a counterclaim not set up shall be barred if it arises out of or is

necessarily connected with the transaction or occurrence that is the subject matter
of the opposing party's claim and does not require for its adjudication the presence
of third parties of whom the court cannot acquire jurisdiction. However, said rule
is not applicable to the case at bar.It must be remembered that the
petitioners counterclaim were duly set-up but was only dismissed due to non-
payment of docket fees.

Where a compulsory counterclaim is made the subject of a separate suit, it may be

abated upon a plea of auter action pendant or litis pendentia and/or dismissed on
the ground of res judicata, depending on the stage or status of the other suit. Both
defenses are unavailing to private respondent. In order that a prior judgment will
constitute a bar to a subsequent case, the following requisites must concur: (1) the
judgment must be final; (2) the judgment must have been rendered by a court
having jurisdiction over the subject matter and the parties; (3) the judgment must
be on the merits; and (4) there must be between the first and second actions,
identity of parties, of subject matter, and of causes of action.

The dismissal on the first case is without prejudice, and hence, was not
adjudicated based on the merits. On that ground, res judicata will not
apply.Further, the Court relaxed the rule on compulsory counterclaims stating
that the failure of petitioners to seek reconsideration of or to take an
appeal from the order of dismissal of the counterclaim should not
prejudice their right to file their claims in a separate action because they
were thereby made to understand and believe that their counterclaims
were merely permissive and could be the subject of a separate and
independent action. Under the Rules, there is no need to pay docket fees for a
compulsory counterclaim. Furthermore, under the Manchester doctrine, the defect
cannot be cured by an amendment of the complaint or similar pleadings, much
less the payment of the docket fee. Hence, the only remedy left for the
petitioners was to file a separate action for their claims and to pay the
prescribed docket fees therein within the applicable and reglementary
period, which is what they did in the case at bar in obedience and
deference to the judicial mandate laid down in their case. At any rate, the
ambivalent positions adopted by the lower court can be considered cured by what
we have construed as effectively a reservation in its order of dismissal for the filing
of a complaint based on the causes of action in the dismissed counterclaims.