1

Rule 7: Parts of a Pleading

Chavez vs. Sandiganbayan

Facts:

A civil case was filed against Enrile in the Sandiganbayan for alleged illegal activities made byEnrile during the
Marcos era. Enrirle filed a motion to dismiss and compulsory counter-claim. In thecounter-claim Enrile moved
to implead Chavez and other PCGG officials on the basis that the casefield agaisnt him was a “harassment suit”.
The motion to implead Chavez and others was granted by the Sandiganbayan. Chavez and the PCGG officials
raised the defense that they are immune from suit by virtue of Sec. 4 of Executive Order NO. 1. It was found in
the records of the PCGG, declared by Jovito Salonga, there are no proof linking Enrile with the illegal activities
performed by Marcos. It was further averred that the case filed against Enrile was instigated by Sol. Gen.
Chavez. Sol. Gen. Chavez defended himself by saying that he was acting as a counsel and cannot be made a
defendant in a counter-claim.

Issue: Whether or not Sol. Gen. Chavez can be made liable for damages in filing the suit againstEnrile.

Held:

The court held that the grounds for allowing the compulsory counter-claim of Enrile was basedon the malice or
bad faith of Chavez in filing the suit.It was further stated by the court that immunity from suit is granted only
because of the fact thatthe Commission has a multitude of task. Immunity for suit on members of the PCGG and
other publicofficers is available only if such officers are acting in good faith and in the performance of their
duty.If the acts done are tainted with bad faith or in excess of authority they can be held liable personally for
damages.In the case at bar the Sol. Gen. exceeded his authority and his act is tainted with bad faith byfiling
baseless suit against Enrile. His office does not give him the license to prosecute recklessly to theinjury of
another. Thus he is made liable fro his actions in the opinion of the court.

CORTEZ v. COURT OF APPEALS

Facts: The CFI Manila (Civil Case) ordered Kuy Guma Kay, Ltd and Macario Supan to pay P4,000 as damages to the heirs
of Severino Cortez. The CFI found out that due to Supan’s negligence, the truck owned by Kuy Guam hit and killed
Cortez. Kuy and Supan appealed. While appeal is pending, the CFI Manila (Criminal Case) acquitted Supan of the crime of
reckless imprudence resulting to homicide. The Court did not grant the request to re-open the case, which resolution was
sent to Kuy and Supan’s lawyer, Atty. Yuseco who informed that court that he had withdrawn as counsel. The Court
noted that no proper withdrawal was made. Thereafter, the Court affirmed the CFI Manila in Civil Case and increased the
damages to P12,000. The said resolution, which became final, was sent by registered mails but were not claimed by Kuy
and Supan.

With the assistance of new counsel, Kuy and Supan sought reconsideration, to which the Court of Appeals (1970) set
aside its earlier resolution and dismissed the complaint on the ground that acquittal of a criminal case bars recovery of
civil liability. The Cortezes appealed the decision to the Supreme Court.

Issue: Whether or not the Court of Appeals erred in setting aside its earlier decision (1969).

Ruling: Yes, the CA erred in setting aside its earlier decision (1969). The 1969 decision became final and executory as to
Kuy, because its lawyer of record, Atty. Yuseco, was duly served with a copy of that decision. It is true that Atty. Yuseco
 2

returned that copy to the Court with the note that he was no longer Kuy’s counsel, but that return did not nullify the
effectiveness of the service upon hime since he did not retire from the case with the Court’s authorization.

In order that there may be substitution of attorneys in a given case, there must be: (1) written application for
substitution; (2) written consent of the client, and (3) written consent of the attorney to be substituted.

Santo Tomas University Hospital v. Surla

Facts: Spouses Surla filed a complaint for damages against Santo Tomas University Hospital alleging that their son,
Emmanuel Cesar, while confined at the hospital for having been born prematurely, had accidentally fallen from his
incubator possibly causing serious harm on the child. The hospital filed its answer with compulsory counterclaim asserting
that the spouses still owed the amount of P82,632.10 representing hospital bills and making a claim for moral and
exemplary damages, plus attorney’s fees, by reason of the supposed unfounded and malicious suit filed against it. The
spouses sought the dismissal of counterclaim for its failure to accompany a certificate of non-forum shopping [CNFS]
(complaint and initiatory pleadings require one). The hospital contended that the requirement for CNFS is not applicable
since the counterclaim is compulsory in nature.

Issue: Whether or not the compulsory counterclaim requires a CNFS.

Ruling: No, a compulsory counterclaim does not need a CNFS. Only a permissive counterclaim requires a CNFS.

KAVINTA v. CASTILLO Jr.

Facts: Antonio Franco, represented by his attorney-in-fact, Angeles F. Arroyo, filed a complaint on 11 May 1994 against
Lazaro Kavinta, et al, for Recovery of Possession and Issuance of Writ of Demolition. Kavinta et al sought the dismissal of
the complaint on the ground that it did not have a CNFS, as required by Admin Circular 4-94 effective 1 April 1994.
Franco upon realizing existence of the circular filed the CNFS.

Issue: Whether or not the complaint should be dismissed for failure to include a CNFS.

Ruling: No, the complaint should not be dismissed considering that the circular only took effect on 1 April 1994 and that
the complaint was filed on 11 May 1994. The proximity then of the filing of the complaint to the date of the effectivity of
the Circular may be pleaded as a justifiable circumstance, and the belated filing of the certification required thereunder
may be deemed a substantial compliance therewith. This is a special circumstance in this case. However, this should not
be taken a precedent.

International Container Terminal Inc. v. Court of Appeals

Facts: Philippine Ports Authority (PPA) issued Administrative Order (AO) No. 2-88 opening all pilotage services in the
Philippines to all licensed and accredited pilot regardless of non-membership in existing harbor pilots association. The
United Harbor Pilots Association of the Philippines (UHPAP) and Manila Pilots Association (MPA), after negotiations with
PPA turned futile, sought the invalidity of the AO, which the RTC granted in its ruling. The RTC likewise made a
permanent injunction not to implement the open pilotage policy. Despite this, ICTI continued to disobey the ruling of the
RTC by operating its own harbor pilotage services. UHPAP and MPA sought contempt proceeding against ICTI. In
addition, UHPAP and MPA sought an action for damages against ICTI.

Issue: Whether or not UHPAP and MPA are guilty of forum shopping.

Ruling: No, UHPAP and MPA are not guilty of forum shopping. Forum shopping exists when both actions involve same
transaction, same essential facts and same circumstances and raise identical causes of action, subject matter and issues.

The contempt petition is directed against the violation of the order of RTC not to implement the open pilotage policy,
while the complaint for damages is against the alleged usurpation of the rights of harbor pilots.
 3

A party resorts to forum shopping in order to increase the chances of obtaining a favorable decision or action. MPA did
not seek to increase its chances of obtaining a favorable decision since no adverse decision was made against it. In fact,
it prevailed in its petition for nullity of the open harbor pilot policy.

Ortiz v. Court of Appeals

Facts: Spouses Rodriguez filed an action for ejectment against spouses Ortiz who are lessees of the Barramedas on the
ground that the Rodriguezes are the real owners of the house and lot. The MTC granted the action and awarded
possession of the property in favor of the Rodriguezes. The Ortizes appealed before the RTC, which affirmed the MTC
decision. When its opposition to the motion for issuance of writ of execution was denied by the RTC, the Ortizes appealed
to the Court of Appeals, which dismissed the appeal on the ground that the CNFS was signed by the counsel and not by
the petitioners.

Issue: Whether or not the CNFS was properly certified.

Ruling: No, the attestation contained in the CNFS requires personal knowledge by the party who executed the same. To
merit consideration, the petitioners must be able to give an explanation to warrant their exemption from the strict
application of the rule. Utter disregard of the rule cannot justly be rationalized by harking on the policy of liberal
construction.

Rule 8: Manner of Making a Pleading

Rule 9: Effect of Failure to Plead

1. Ferrer v. Ericta

2. Garcia v. Mathis

3. Gabuya v. Layug

· This is a petition for certiorari and prohibition under Rule 65 of the Rules of Court seeking to annul the
orders of respondent Judge Federico V. Noel in Civil Case No. II-1408, Antonio Layug v. Rodrigo Gabuya, and
to annul the proceedings held thereon. The questioned orders and proceedings are alleged to unduly interfere
with the final judgment of this Court in G.R. No. 75364 involving the same parties, the same facts and the same
issues.
· Private respondent Antonio Layug entered into a contract with petitioner Rodrigo Gabuya for the
purchase by the former of the latter's twelve (12) lots situated in Iligan City for the price of P120,000.00
payable in three (3) yearly installments. Respondent Layug paid the first two (2) annual installments totaling
P80,000.00 but failed to pay the last installment of P40,000.00.
· When formal demands for payment were made by petitioner and respondent repeatedly failed to pay the
former brought suit in the then Court of First Instance of Lanao del Norte (now Regional Trial Court) for
annulment of contract and for recovery of damages against Layug.
· After trial judgment was rendered in favor of petitioner. Respondent appealed to the Court of Appeals
which on 30 August 1985 affirmed the judgment.
 4

The appellate court

(1) ordered the rescission of the conditional sale of the twelve (12) lots described in the contract;
(2) declared as rentals for the twelve (12) lots from 1978 to the present (30 August 1985) all payments made by
respondent Layug to Gabuya plus the legal interest thereon from the execution of the contract;
(3) ordered respondent Layug to vacate the twelve (12) lots and deliver the possession thereof to petitioner
Gabuya; and,
(4) ordered respondent Layug to pay petitioner Gabuya the sum of P5,000.00 as attorney's fees and to pay the
costs.
· Upon appeal to the SC, it affirmed the Court of Appeals ruling particularly insofar as it authorized the
cancellation by petitioner Gabuya of the contract of sale with respondent Layug but modified the same to the
affect that the cancellation should be effective and fully operative only upon payment of the "cash surrender
value" of his payments in the sum of P40,000.00.
· SC’s decision became final and executor, a writ of execution was issued by the trial court. A certificate of
turnover was issued by Sheriff Elias Anacleto in favor of petitioner. But the order of execution was elevated by
respondent Layug through a petition for certiorari to the Court of Appeals which subsequently dismissed it. The
sheriff submitted to the trial court a return of the writ of execution with the recommendation that the buildings
of private respondent found in the property be demolished.
· Respondent Layug filed a complaint for specific performance with prayer for a temporary restraining
order against petitioner seeking reimbursement for the value of the improvements, buildings and materials he
(Layug) introduced in the premises covered by the contract of sale which by final judgment of this Court was
already ordered rescinded. His motion to dismiss in the court below having been denied petitioner filed his
answer to the complaint.
· Respondent judge issued an order directing Deputy Provincial Sheriff Salcedo "to refrain from
disposs(ess)ing plaintiff of the possession of the property until ordered by the court." The trial court on motion
of petitioner reconsidered its order.

However on 11 March 1992, this time upon motion of respondent Layug, it again reconsidered its order and
reinstated the restraining order of 16 October 1991 against Deputy Sheriff Salcedo.
· Hence this petition by Rodrigo Gabuya against respondent judge and Antonio Layug alleging grave
abuse of discretion amounting to lack of jurisdiction on the part of respondent judge in taking cognizance of
Civil Case No. II-1408 and in issuing the questioned orders.
ISSUE: WON grave abuse of discretion amounting to lack of jurisdiction on the part of respondent judge in
taking cognizance of Civil Case No. II-1408 and in issuing the questioned orders.

HELD: YES!

The final judgment of this Court in G.R. No. 75364 promulgated 23 November 1988 involving the same parties,
facts and issues constitutes an absolute bar to Civil Case No. II-1408 now pending with the Regional Trial
Court of Lanao del Norte, Br. 2. It is final as to all claims and demands of petitioner Gabuya and respondent
Layug with regard to the twelve (12) lots in Iligan City subject matter of the contract of sale ordered cancelled
by this Court. This judgment binds the parties not only as to every matter offered and received to sustain or
defeat their claims or demand but as to any other admissible matter which might have been offered for that
purpose and of all other matters that could have been adjudged in that case.

IMPT: In the case before us, the claim for reimbursement of the value of improvements introduced by
respondent Layug on the property subject of the contract of sale should have been raised by him as a
counterclaim in the complaint for annulment of contract before the trial court in the first case instituted by
petitioner Gabuya. The failure of respondent Layug to raise these matters therein precludes the re-litigation of
the same facts in a separate complaint. It has been ruled that when defendants are sued for recovery of a tract of
land they ought to have presented a counterclaim for the value of the improvements thereon and the amount of
 5

damages suffered by them because the claim for such improvements and indemnity is necessarily connected
with the suit for the restitution or recovery of land claimed to have been improved, and with the result of the
execution of the judgment awarding recovery.

On the basis of the foregoing, the questioned orders issued by respondent judge on 16 October 1991 and 11
March 1992 restraining the deputy sheriff from implementing the writ of execution of the final judgment of this
Court in G.R. No. 75364 were issued by respondent judge with grave abuse of discretion amounting to lack of
jurisdiction.

4. Cavili v. Florendo

• Private respondents filed a civil case with the CFI of Negros Oriental against petitioners for Partition,
Accounting, and Damages. The case was raffled to Branch I presided over by Judge Augusto S. Villarin-
summons was issued to the 3 petitioners, all at Bayawan Negros Oriental which was the address indicated in the
complaint.
• After trying to effect service, the process server went back to the court with the following return of
service to Quirino and Primitivo Cavili not contacted, according to Perfecta Cavili, subject persons is staying in
Kabangkalan, Negros Occidental
• Atty. Jose P. Alamino filed a motion for extension to answer in behalf of the defendants, manifesting the
representation of his client Perfecta Cavili that she will inform her brothers Primitivo and Quirino about the
case.
• Defendants, failed to file their answer within the request period and upon motion of the plaintiffs, the
defendants were declared in default on October 5, 1979.
• Records however show that a Manifestation was filed by Atty. Jose P. Alamino informing the court that
since he never met Primitivo and Quirino Cavili, who are residents of another province, he desisted from further
appearing in the case in their behalf.
• December 1979 - Atty. Alamillo filed a motion for new trial in behalf of the defendants on grounds of
lack of jurisdiction and, with a meritorious defense that the properties sought to be partitioned have already
been the subject of a written partition agreement between the direct heirs of the late Bernardo Cavili who are the
predecessors of the parties in this case.
• July 1981 – after a re-raffle of the case, Judge Cipriano Vamenta whom the case had been assigned,
directed the execution of the October 5, 1979 (declaration of default) decision without qualification ruling that
the petitioners' remedy should have been appeal rather than new trial. Their motion for reconsideration having
been denied. The defendants, now petitioners, brought the case to this Court through a petition for certiorari.
• Oct. 1982 –Petition for certionari was granted
• At the pre-trial & trial - defendants, (now petitioners), presented Perfecta Cavili dela Cruz as their 1st
witness.
• The respondents moved for her disqualification as a witness on the ground that having been declared in
default, Perfecta Cavili has lost her standing in court and she cannot be allowed to participate in all premise the
even as a witness. The court, through the respondent judge, sustained the respondents' contention and
disqualified her from testifying.

1. WHETHER OR NOT PERFECTA CAVILI IS DISQUALIFIED AS A WITNESS NO. Section 18 of

Rule 130 . Witnesses; their qualifications. — Except as provided in the next succeeding section, all persons
who, having organs of sense, can perceive, and perceiving, can make known their perception to others, may be
witnesses. Neither parties nor other persons interested in the outcome of a case shall be excluded; nor those who
have been convicted of crime; nor any person on account of his opinion on matters of religious belief.
There is no provision of the Rules disqualifying parties declared in default from taking the witness stand for
non-disqualified parties. The law does not provide default as an exception. The specific enumeration of
disqualified witnesses excludes the operation of causes of disability other than those mentioned in the Rules.
 6

General Rule: where there are express exceptions, these comprise the only limitations on the operation of a
statute and no other exception will be implied. The Rules should not be interpreted to include an exception not
embodied therein.

2. WHETHER OR NOT PETITIONERS (PRIMITIVO & QUIRINO) ARE IN DEFAULT AND HAVE
LOST STANDING IN COURT.

NO. Section 2 of Rule 18 - Effect of order of default. — Except as provided in section 9 of Rule 13, a party
declared in default shall not be entitled to notice of subsequent proceedings nor to take part in the trial.They
advance the argument that to allow Perfecta Cavili to stand as witness would be to permit a party in default "to
take part in the trial." An explanation of the Rule is in order.

Loss of standing in court is the consequence of an order of default. Thus, a party declared in default is
considered out of court and cannot appear therein, adduce evidence, and be heard and for that reason he is not
entitled to notice.

However, "loss of pending" must be understood to mean only the forfeiture of one's rights as a party litigant,
contestant or legal adversary. A party in default loses his right to present his defense, control the proceedings,
and examine or cross-examine witnesses. He has no right to expect that his pleadings would be acted upon by
the court nor may he object to or refute evidence or motions filed against him. There is nothing in the rule,
however, which contemplates a disqualification to be a witness or a opponent in a case. Default does not make
him an incompetent.

A party in default may thus be cited as a witness by his co-defendants who have the standing and the right to
present evidence which the former may provide. The incidental benefit giving the party in default the
opportunity to present evidence which may eventually redound to his advantage or bring about a desired result,
through his co-defendants, is of minor consequence.

Of greater concern or importance in allowing the presence of Perfecta Cavili as a witness in the case at bar, is
the preservation of the right of petitioners Quirino and Primitivo Cavili to secure the attendance of witnesses
and the production of evidence in their behalf. To reject Perfecta Cavili's presentation of testimonial evidence
would be to treat Primitivo and Quirino, as if they too were in default.

There is no reason why the latter should also be made to bear the consequences of Perfecta's omission.
Moreover, we cannot deprive Quirino and Primitivo of the only instrument of proof available to them, as
Perfecta alone has been in possession and administration of the claim. Petition granted.

5. Pacete vs Carriaga

FACTS:

Concepcion Alanis filed a complaint on October 1979, for the Declaration of Nullity of Marriage between her
erstwhile husband Enrico Pacete and one Clarita de la Concepcion, as well as for legal separation between her
and Pacete, accounting and separation of property. She averred in her complaint that she was married to Pacete
on April 1938 and they had a child named Consuelo; that Pacete subsequently contracted a second marriage
with Clarita de la Concepcion and that she learned of such marriage only on August 1979. Reconciliation
between her and Pacete was impossible since he evidently preferred to continue living with Clarita.

The defendants were each served with summons. They filed an extension within which to file an answer, which
the court partly granted. Due to unwanted misunderstanding, particularly in communication, the defendants
 7

failed to file an answer on the date set by the court. Thereafter, the plaintiff filed a motion to declare the
defendants in default, which the court forthwith granted. The court received plaintiffs’ evidence during the
hearings held on February 15, 20, 21, and 22, 1980. After trial, the court rendered a decision in favor of the
plaintiff on March 17,1980.

ISSUE: Whether or not the RTC gravely abused its discretion in denying petitioner’s motion for extension of
time to file their answer, in declaring petitioners in default and in rendering its decision on March 17, 1980
which decreed the legal separation of Pacete and Alanis and held to be null and void the marriage of Pacete to
Clarita.

HELD:

The Civil Code provides that “no decree of legal separation shall be promulgated upon a stipulation of facts or
by confession of judgment. In case of non-appearance of the defendant, the court shall order the prosecuting
attorney to inquire whether or not collusion between parties exists. If there is no collusion, the prosecuting
attorney shall intervene for the State in order to take care that the evidence for the plaintiff is not fabricated.”

The above stated provision calling for the intervention of the state attorneys in case of uncontested proceedings
for legal separation (and of annulment of marriages, under Article 88) is to emphasize that marriage is more
than a mere contract.

Article 103 of the Civil Code, now Article 58 of the Family Code, further mandates that an action for legal
separation must “in no case be tried before six months shall have elapsed since the filing of the petition,”
obviously in order to provide the parties a “cooling-off” period. In this interim, the court should take steps
toward getting the parties to reconcile.

The significance of the above substantive provisions of the law is further or underscored by the inclusion of a
provision in Rule 18 of the Rules of Court which provides that no defaults in actions for annulments of marriage
or for legal separation. Therefore, “if the defendant in an action for annulment of marriage or for legal
separation fails to answer, the court shall order the prosecuting attorney to investigate whether or not a collusion
between the parties exists, and if there is no collusion, to intervene for the State in order to see to it that the
evidence submitted is not fabricated.”

6. Ramnani v. CA

FACTS:

Ishwar, Choithram and Navalrai, all surnamed Jethmal Ramnani, are brothers of the full blood. Ishwar and his
spouse Sonya had their main business based in New York. Realizing the difficulty of managing their
investments in the Philippines they executed a general power of attorney on January 24, 1966 appointing
Navalrai and Choithram as attorneys-in-fact, empowering them to manage and conduct their business concern
in the Philippines

On February 1, 1966 and on May 16, 1966, Choithram entered into two agreements for the purchase of two
parcels of land located in Barrio Ugong, Pasig, Rizal, from Ortigas & Company, Ltd. Partnership. A building
was constructed thereon by Choithram in 1966. Three other buildings were built thereon by Choithram through
a loan of P100,000.00 obtained from the Merchants Bank as well as the income derived from the first building.

Sometime in 1970 Ishwar asked Choithram to account for the income and expenses relative to these properties
during the period 1967 to 1970. Choithram failed and refused to render such accounting. Thereafter, Ishwar
 8

revoked the general power of attorney. Choithram and Ortigas were duly notified of such revocation on April 1,
1971 and May 24, 1971, respectively. Said notice was also registered with the Securities and Exchange
Commission on March 29, 1971 and was published in the April 2, 1971 issue of The Manila Times for the
information of the general public.

Nevertheless, Choithram, transferred all rights and interests of Ishwar and Sonya in favor of his daughter-in-
law, Nirmla Ramnani, on February 19, 1973.

On October 6, 1982, Ishwar and Sonya filed a complaint against Choitram and/or spouses Nirmla and Moti and
Ortigas for reconveyance of said properties or payment of its value and damages.

ISSUE:

Whether Ishram can recover the entire properties subject in the ligitation

HELD:

No, Ishram cannot recover the entire properties subject.

The Supreme Court held that despite the fact that Choithram, et al., have committed acts which demonstrate
their bad faith and scheme to defraud spouses Ishwar and Sonya of their rightful share in the properties in
litigation, the Court cannot ignore the fact that Choithram must have been motivated by a strong conviction that
as the industrial partner in the acquisition of said assets he has as much claim to said properties as Ishwar, the
capitalist partner in the joint venture.

Choithram in turn decided to invest in the real estate business. He bought the two (2) parcels of land in question
from Ortigas as attorney-in-fact of Ishwar. Instead of paying for the lots in cash, he paid in installments and
used the balance of the capital entrusted to him, plus a loan, to build two buildings. Although the buildings were
burned later, Choithram was able to build two other buildings on the property. He rented them out and collected
the rentals. Through the industry and genius of Choithram, Ishwar's property was developed and improved into
what it is now.

Justice and equity dictate that the two share equally the fruit of their joint investment and efforts. Perhaps this
Solomonic solution may pave the way towards their reconciliation. Both would stand to gain. No one would end
up the loser. After all, blood is thicker than water.