Civil Procedure Case Digest

MERRILL LYNCH FUTURES, INC.
, petitioner,
vs.
HON. COURT OF APPEALS, and the SPOUSES PEDRO M. LARA
and ELISA G. LARA, respondents.
FACTS:
1. On November 23, 1987, Merrill Lynch Futures, Inc. (hereafter,
simply ML FUTURES) filed a complaint with the Regional Trial Court
at Quezon City against the Spouses Pedro M. Lara and Elisa G. Lara
for the recovery of a debt and interest thereon, damages, and
attorney's fees.
2. ML FUTURES alleged the following:
1) that on September 28, 1983 it entered into a Futures Customer
Agreement with the defendant spouses (Account No. 138-12161), in
virtue of which it agreed to act as the latter's broker for the purchase
and sale of futures contracts in the U.S.;
2) that pursuant to the contract, orders to buy and sell futures
contracts were transmitted to ML FUTURES by the Lara Spouses
"through the facilities of Merrill Lynch Philippines, Inc., a Philippine
corporation and a company servicing plaintiffs customers; 2
3) that from the outset, the Lara Spouses "knew and were duly
advised that Merrill Lynch Philippines, Inc. was not a broker in futures
contracts," and that it "did not have a license from the Securities and
Exchange Commission to operate as a commodity trading advisor
Civpro/rule 2 & 3/mpperez
Page 1
(i.e., 'an entity which, not being a broker, furnishes advice on

commodity futures to persons who trade in futures contracts');
4) that in line with the above mentioned agreement and through said
Merrill Lynch Philippines, Inc., the Lara Spouses actively traded in
futures contracts, including "stock index futures" for four years or
so, i.e., from 1983 to October, 1987, 3 there being more or less regular
accounting and corresponding remittances of money (or crediting or
debiting) made between the spouses and ML FUTURES;
5) that because of a loss amounting to US$160,749.69 incurred in
respect of three (3) transactions involving "index futures," and after
setting this off against an amount of US$75,913.42 then owing by ML
FUTURES to the Lara Spouses, said spouses became indebted to ML
FUTURES for the ensuing balance of US$84,836.27, which the latter
asked them to pay;
6) that the Lara Spouses however refused to pay this balance,
"alleging that the transactions were null and void because Merrill
Lynch Philippines, Inc., the Philippine company servicing accounts of
plaintiff, . . had no license to operate as a 'commodity and/or financial
futures broker.'"
3. On January 12, 1988, the Trial Court promulgated an Order
sustaining the motion to dismiss, directing the dismissal of the case
and discharging the writ of preliminary attachment. It later denied ML
FUTURES's motion for reconsideration, by Order dated February 29,
1988. ML FUTURES appealed to the Court of Appeals which affirmed
the TCs decision. Hence, this petition.
ISSUE: WON the petitioner has the legal capacity to sue.

HELD:
1. The facts on record adequately establish that ML FUTURES,
operating in the United States, had indeed done business with the
Lara Spouses in the Philippines over several years, had done so at all
times through Merrill Lynch Philippines, Inc. (MLPI), a corporation
organized in this country, and had executed all these transactions
without ML FUTURES being licensed to so transact business here,
and without MLPI being authorized to operate as a commodity futures
trading advisor. These are the factual findings to both the Trial Court
and the Court of Appeals. These, too, are the conclusions of the
Securities & Exchange Commission which denied MLPI's application
to operate as a commodity futures trading advisor, a denial
subsequently affirmed by the Court of Appeals. Prescinding from the
proposition that factual findings of the Court of Appeals are generally
conclusive, the Supreme Court has been cited to no circumstance of
substance to warrant reversal of said Appellate Court's findings or
conclusions in this case. Further, the Laras did transact business with
ML FUTURES through its agent corporation organized in the
Philippines, it being unnecessary to determine whether this domestic
firm was MLPI (Merrill Lynch Philippines, Inc.) or Merrill Lynch Pierce
Fenner & Smith (MLPI's alleged predecessor). The fact is that ML
FUTURES did deal with futures contracts in exchanges in the United
States in behalf and for the account of the Lara Spouses, and that on
several occasions the latter received account documents and money
in connection with those transactions. Given these facts, if indeed the
last transaction executed by ML FUTURES in the Laras's behalf had
resulted in a loss amounting to US $160,749.69; that in relation to this
loss, ML FUTURES had credited the Laras with the amount of US $
75,913.42 which it (ML FUTURES) then admittedly owed the
Page 2
spouses and thereafter sought to collect the balance, US

$84,836.27, but the Laras had refused to pay (for the reasons already
above stated).
2. The Laras received benefits generated by their business relations
with ML FUTURES. Those business relations, according to the Laras
themselves, spanned a period of 7 years; and they evidently found
those relations to be of such profitability as warranted their
maintaining them for that not insignificant period of time; otherwise, it
is reasonably certain that they would have terminated their dealings
with ML FUTURES much, much earlier. In fact, even as regards their
last transaction, in which the Laras allegedly suffered a loss in the
sum of US$160,749.69, the Laras nonetheless still received some
monetary advantage, for ML FUTURES credited them with the
amount of US $75,913.42 then due to them, thus reducing their debt
to US $84,836.27. Given these facts, and assuming that the Lara
Spouses were aware from the outset that ML FUTURES had no
license to do business in this country and MLPI, no authority to act as
broker for it, it would appear quite inequitable for the Laras to evade
payment of an otherwise legitimate indebtedness due and owing to
ML FUTURES upon the plea that it should not have done business in
this country in the first place, or that its agent in this country, MLPI,
had no license either to operate as a "commodity and/or financial
futures broker." Considerations of equity dictate that, at the very least,
the issue of whether the Laras are in truth liable to ML FUTURES and
if so in what amount, and whether they were so far aware of the
absence of the requisite licenses on the part of ML FUTURES and its
Philippine correspondent, MLPI, as to be estopped from alleging that
fact as a defense to such liability, should be ventilated and
adjudicated on the merits by the proper trial court.
exported by ITEC, to their sole customer, the Philippine Long Distance

Telephone Company.
COMMUNICATION MATERIALS AND DESIGN, INC.
vs.
THE COURT OF APPEALS
FACTS:
1. Petitioners COMMUNICATION MATERIALS AND DESIGN, INC.
and ASPAC MULTI-TRADE INC. are both domestic corporations,
while petitioner Francisco S. Aguirre is their President and majority
stockholder. Private Respondents ITEC, INC. and/or ITEC,
INTERNATIONAL, INC. are corporations duly organized and existing
under the laws of the State of Alabama, United States of America (a
foreign corporation not licensed to do business in the Philippines).
2. On August 14, 1987, ITEC entered into a contract with ASPAC
referred to as "Representative Agreement" initially for a term of 24
months and was renewed for another 24 months. Pursuant to the
contract, ITEC engaged ASPAC as its "exclusive representative" in
the Philippines for the sale of ITEC's products, in consideration of
which, ASPAC was paid a stipulated commission (signed by G.A.
Clark and Francisco S. Aguirre, presidents of ITEC and ASPAC).
3. Through a "License Agreement" theyve entered into on November
10, 1988, ASPAC was able to incorporate and use the name "ITEC" in
its own name. ASPAC Multi-Trade, Inc. became legally and publicly
known as ASPAC-ITEC (Philippines) which sold electronic products,
Page 3
4. To facilitate their transactions, ASPAC and PLDT executed a

document entitled "PLDT-ASPAC/ITEC PROTOCOL" which defined
the project details for the supply of ITEC's Interface Equipment in
connection with the Fifth Expansion Program of PLDT.
5. One year into the second term of the Representative Agreement,
ITEC decided to terminate the same because of the alleged violation
of ASPAC in its contractual commitment as stipulated in their
agreements.
6. ITEC charged the petitioners and another Philippine Corporation,
DIGITAL BASE COMMUNICATIONS, INC. the President of which is
likewise petitioner Aguirre, of using knowledge and information of
ITEC's products specifications to develop their own line of equipment
and product support, which are similar, if not identical to ITEC's own,
and offering them to ITEC's former customer.
7. On January 31, 1991, ITEC, INC. filed a complaint with the
Regional Trial Court of Makati and sought to enjoin, first, preliminarily
and then, after trial, permanently; (1) DIGITAL, CMDI, and Francisco
Aguirre and their agents and business associates, to cease and desist
from selling or attempting to sell to PLDT and to any other party,
products which have been copied or manufactured "in like manner,
similar or identical to the products, wares and equipment of plaintiff,"
and (2) defendant ASPAC, to cease and desist from using in its
corporate name, letter heads, envelopes, sign boards and business
dealings, plaintiff's trademark, internationally known as ITEC; and the
recovery from defendants in solidum, damages of at least

P500,000.00, attorney's fees and litigation expenses.
8. Defendants filed a motion to dismiss on the following grounds: (1)
That plaintiff has no legal capacity to sue as it is a foreign corporation
doing business in the Philippines without the required BOI authority
and SEC license, and (2) that plaintiff is simply engaged in forum
shopping which justifies the application against it of the principle of
"forum non conveniens".
9. RTC denied the MTD for being devoid of legal merit with a rejection
of both grounds relied upon and directed the issuance of a writ of
preliminary injunction.
10. Petitioners elevated the case to the Court of Appeals on a Petition
for Certiorari and Prohibition under Rule 65 of the Revised Rules of
Court, assailing and seeking the nullification and the setting aside of
the Order and the Writ of Preliminary Injunction issued by the
Regional Trial Court.
11. MR was also filed which was likewise denied. Hence, this Petition
for Review on Certiorari under Rule 45.
ISSUE: Whether or not ITEC has legal capacity to sue in Phil. courts.
HELD: YES. ITEC had been engaged in or doing business in the
Philippines. This is the inevitable result after a scrutiny of the different
contracts and agreements entered into by ITEC with its various
business contacts in the country. Its arrangements, with these entities
indicate convincingly that ITEC is actively engaging in business in the
country.
Page 4
A foreign corporation doing business in the Philippines may

sue in Philippine Courts although not authorized to do business here
against a Philippine citizen or entity who had contracted with and
benefited by said corporation. A party is estopped to challenge the
personality of a corporation after having acknowledged the same by
entering into a contract with it. And the doctrine of estoppel to deny
corporate existence applies to a foreign as well as to domestic
corporations. One who has dealt with a corporation of foreign origin as
a corporate entity is estopped to deny its corporate existence and
capacity.
Petitioners insistence on the dismissal of this action due to
the application, or non application, of the private international law rule
of forum non conveniens defies well-settled rules of fair play.
According to petitioner, the Philippine Court has no venue to apply its
discretion whether to give cognizance or not to the present action,
because it has not acquired jurisdiction over the person of the plaintiff
in the case, the latter allegedly having no personality to sue before
Philippine Courts. This argument is misplaced because the court has
already acquired jurisdiction over the plaintiff in the suit, by virtue of
his filing the original complaint. And as we have already observed,
petitioner is not at liberty to question plaintiffs standing to sue, having
already acceded to the same by virtue of its entry into the
Representative Agreement referred to earlier.
Thus, having acquired jurisdiction, it is now for the Philippine
Court, based on the facts of the case, whether to give due course to
the suit or dismiss it, on the principle of forum non convenience.
Hence, the Philippine Court may refuse to assume jurisdiction in spite
of its having acquired jurisdiction. Conversely, the court may assume
jurisdiction over the case if it chooses to do so; provided, that the

following requisites are met:
1) That the Philippine Court is one to which the parties may
conveniently resort to
2. That the Philippine Court is in a position to make an
intelligent decision as to the law and the facts; and,
3. That the Philippine Court has or is likely to have power to
enforce its decision.
The aforesaid requirements having been met, and in view of
the courts disposition to give due course to the questioned action,
the matter of the present forum not being the most convenient
as a ground for the suits dismissal, deserves scant consideration.
ALFRED HAHN, petitioner,
vs.
COURT OF APPEALS and BAYERSCHE MOTOREN WERKE
AKTIENGSELLSCHAFT (BMW), respondents.
2. On March 7, 1967, Alfred Hahn executed in favor of BMW a

"Deed of Assignment with Special Power of Attorney. Per the
agreement, they "continued business relations as has been
usual in the past without a formal contract."
3.
But on February 16, 1993, in a meeting with a BMW

representative and the president of Columbia Motors
Corporation (CMC), Jose Alvarez, petitioner was informed
that BMW was arranging to grant the exclusive dealership of
BMW cars and products to CMC, which had expressed
interest in acquiring the same.
4. On February 24, 1993, petitioner received confirmation of the

information from BMW which, in a letter, expressed
dissatisfaction with various aspects of petitioner's business,
mentioning among other things, decline in sales, deteriorating
services, and inadequate showroom and warehouse facilities,
and petitioner's alleged failure to comply with the standards
for an exclusive BMW dealer.
Facts:
1. Petitioner Alfred Hahn is a Filipino citizen doing business
under the name and style "Hahn-Manila." On the other hand,
private
respondent
Bayerische
Motoren
Werke
Aktiengesellschaft (BMW) is a non-Gresident foreign
corporation existing under the laws of the former Federal
Republic of Germany, with principal office at Munich,
Germany.
Page 5
5. Nonetheless, BMW expressed willingness to continue

business relations with the petitioner on the basis of a
"standard BMW importer" contract, otherwise, it said, if this
was not acceptable to petitioner, BMW would have no
alternative but to terminate petitioner's exclusive dealership
effective June 30, 1993.
6. Petitioner protested, claiming that the termination of his
exclusive dealership would be a breach of the Deed of
Assignment and insisted that as long as the assignment of its
trademark and device subsisted, he remained BMW's

exclusive dealer in the Philippines because the assignment
was made in consideration of the exclusive dealership.
7. Because of Hahn's insistence, BMW withdrew on March 26,
1993 its offer of a "standard importer contract" and terminated
the exclusive dealer relationship effective June 30, 1993.
8. On April 29, 1993, BMW proposed that Hahn and CMC jointly
import and distribute BMW cars and parts.
9. Hahn found the proposal unacceptable thus, on May 14,
1993, he filed a complaint for specific performance and
damages against BMW to compel it to continue the exclusive
dealership. Later he filed an amended complaint to include an
application for temporary restraining order and for writs of
preliminary, mandatory and prohibitory injunction to enjoin
BMW from terminating his exclusive dealership.
10. The case was raffled to Branch 104 of the Quezon City
Regional Trial Court, which on June 14, 1993 issued a
temporary restraining order. Summons and copies of the
complaint and amended complaint were served on the private
respondent through the Department of Trade and Industry,
pursuant to Rule 14, 14 of the Rules of Court. The order,
summons and copies of the complaint and amended
complaint were later sent by the DTI to BMW via registered
mail on June 15, 1993 and received by the latter on June 24,
1993.
Page 6
11. On June 30, 1993, the trial court granted the writ of
preliminary injunction upon the filing of a bond of P100,
000.00. On July 13, 1993, following the posting of the
required bond, a writ of preliminary injunction was issued.
12. On July 1, 1993, BMW moved to dismiss the case,
contending that the trial court did not acquire jurisdiction over
it through the service of summons on the Department of
Trade and Industry, because it (BMW) was a foreign
corporation and it was not doing business in the Philippines
and that the execution of the Deed of Assignment was an
isolated transaction; that Hahn was not its agent because the
latter undertook to assemble and sell BMW cars and products
without the participation of BMW and sold other products; and
that Hahn was an indentor or middleman transacting
business in his own name and for his own account.
13. Hahn opposed the motion and argued that BMW was doing
business in the Philippines through him as its agent, as
shown by the fact that BMW invoices and order forms were
used to document his transactions; that he gave warranties
as exclusive BMW dealer; that BMW officials periodically
inspected standards of service rendered by him; and that he
was described in service booklets and international
publications of BMW as a "BMW Importer" or "BMW Trading
Company" in the Philippines.
14. The trial court deferred resolution of the motion to dismiss
until after trial on the merits for the reason that the grounds
advanced by BMW in its motion did not seem to be

indubitable.
15. BMW did not file any reconsideration and instead filed a
petition for certiorari with the Court of Appeals.
16. Court of Appeals dismissed petitioner's complaint against
BMW and held that petitioner was a mere indentor or broker
and not an agent because he alone had contacts with
individuals or entities interested in acquiring BMW vehicles.
17. Hence, this appeal by Petitioner contending that the Court of
Appeals erred (1) in finding that the trial court gravely abused
its discretion in deferring action on the motion to dismiss and
(2) in finding that private respondent BMW is not doing
business in the Philippines and, for this reason, dismissing
petitioners case.
ISSUE: WHETHER OR NOT petitioner Alfred Hahn is the agent or
distributor in the Philippines of private respondent BMW.
HELD: YES. The Supreme Court held that agency is shown when
Hahn claimed he took orders for BMW cars and transmits them to
BMW. Then BMW fixes the down payment and pricing charges and
will notify Hahn of the scheduled production month for the orders, and
reconfirm the orders by signing and returning to Hahn the acceptance
sheets.
The payment is made by the buyer directly to BMW. Title to
cars purchased passed directly to the buyer and Hahn never paid for
Page 7
the purchase price of BMW cars sold in the Philippines. Hahn was
credited with a commission equal to 14% of the purchase price upon
the invoicing of a vehicle order by BMW. Upon confirmation in writing
that the vehicles had been registered in the Philippines and serviced
by him, he received an additional 3% of the full purchase price. Hahn
performed after-sale services, including, warranty services for which
he received reimbursement from BMW and all orders were on
invoices and forms of BMW.
Moreover, the Court distinguished an agent from a broker.
The court ruled that an agent receives a commission upon the
successful conclusion of a sale. On the other hand, a broker earns his
pay merely by bringing the buyer and the seller together, even if no
sale is eventually made.
LITONJUA GROUP OF COMPANIES, EDDIE LITONJUA and

DANILO
LITONJUA,
petitioners,
vs.
TERESITA VIGAN, respondent.
Facts:
1. TERESITA VIGANs version: She was hired by the Litonjua
Group of Companies on February 2, 1979 as telex operator.
Later, she was assigned as accounting and payroll clerk
under the supervision of Danilo Litonjua. She had been
performing well until 1995, when Danilo Litonjua who was
already naturally a (sic) very ill-tempered, ill-mouthed and
violent employer, became more so due to business problems.
The incidents prompted Vigan to write Danilo Litonjua letters
asking why she was treated so and what was her fault. Danilo
Litonjua charged that Vigan had been hysterical, emotional
and created scenes at the office. He even required her to
secure psychiatric assistance. But despite proof that she was
not suffering from psychosis or organic brain syndrome as
certified to by a Psychiatrist of Danilo Litonjuas choice still
she was denied by the guards entry to her work upon
instructions again of Danilo Litonjua. Left with no alternative,
Vigan filed this case for illegal dismissal, alleging she
was receiving a monthly salary of P8,000.00 at the time
she was unlawfully terminated.
2. Litonjuas version: They negate the existence of the Litonjua
Group of Companies and the connection of Eduardo Litonjua
thereto. They contended that Vigan was employed by ACT
Theater, Inc., where Danilo Litonjua is a Director. They
dispute the charge of illegal dismissal for it was Vigan who
ceased to report for work despite notices and likewise contest
the P8,000.00 monthly salary alleged by Vigan, claiming it
was merely P6,850.00.
They claim that Vigan was a habitual absentee. Her
performance had been satisfactory, but then starting March
15, 1996 she had become emotional, hysterical,
uncontrollable and created disturbances at the office with her
crying and shouting for no reason at all. The incident was
repeated on April 3, 1996, May 24, 1996 and on June 4,
1996. Thus alarmed, on July 24, 1996 Vigan was required by
management to undergo medical and psychological
examination at the companys expense and naming three
doctors to attend to her. Dr. Baltazar Reyes and Dr. Tony
Perlas of the Philippine General Hospital and Dr. Lourdes
Ignacio of the Medical Center Manila. But they claim that
Vigan refused to comply.
Page 8
On August 2, 1996, Vigan again had another breakdown,

hysterical, shouting and crying as usual for about an hour,
and then she just left the premises without a word. The next
day, August 3, 1996, Saturday, she came to the office and
explained she was not feeling well the day before. After that
Vigan went AWOL and did not heed telegram notices from her
employer made on August 26, 1996 and on September 9,
1996. She instead filed the instant suit for illegal dismissal."
3. On June 10, 1997, Labor Arbiter Ernesto S. Dinopol
rendered his decision4 finding Vigan diseased and unfit
for work under Article 284 of the Labor Code 5 and
awarded corresponding separation pay.
4. Vigan appealed the decision to the National Labor Relations
Commission which modified7 the arbiters decision by ruling
that Art. 284 of the Labor Code is inapplicable in the instant
case but affirmed the legality of the termination of the
complainant based on her having effectively abandoned her
job; the rest of the decision was affirmed. Vigan moved for a
partial reconsideration which was denied in a resolution dated
August 7, 1998.
5. Vigan filed a petition for certiorari with the Court of Appeals
which reversed the NLRC Resolution. It ordered the
respondents jointly and severally to: (a) Reinstate VIGAN if
she so desires; or (b) pay her separation compensation in the
sum of P8,000.00 multiplied by her years of service counted
from February 2, 1979 up to the time this Decision becomes
final; and in either case to pay Vigan; (c) full back wages from
the time she was illegally dismissed up to the date of the
finality of this Decision; (d) moral damages in the amount of
P40,000.00; (e) exemplary damages in the amount of
P15,000.00; and (f) attorneys fees of P10,000.00.
6. Litonjuas filed their motion for reconsideration which was

denied. Hence, the filing of the instant petition for review on
certiorari. alleging the following grounds:
ISSUE: WHETHER OR NOT LITONJUA GROUP OF COMPANIES",
WHICH HAS NO JURIDICAL PERSONALITY, BUT ONLY A
GENERIC NAME TO DESCRIBE THE VARIOUS COMPANIES
WHICH THE LITONJUA FAMILY HAS INTERESTS, CAN BE
LEGALLY CONSTRUED AS RESPONDENTS EMPLOYER.
HELD: NO . Only natural or juridical persons or entities authorized by
law may be parties to a civil action and every action must be
prosecuted and defended in the name of the real parties in interest.
Petitioners claim that Litonjua Group of Companies is not a legal
entity with juridical personality hence cannot be a party to this suit
deserves consideration since respondent failed to prove otherwise. In
fact, respondent Vigans own allegation in her Memorandum
supported petitioners claim that Litonjua group of companies does not
exist when she stated therein that instead of naming each and every
corporation of the Litonjua family where she had rendered accounting
and payroll works, she simply referred to these corporations as the
Litonjua group of companies, thus, respondent merely used such
generic name to describe collectively the various corporations in
which the Litonjua family has business interest. Considering the nonexistence of the Litonjua group of companies as a juridical entity and
petitioner Eddie Litonjuas denial of his connection in any capacity
with the ACT Theater, the supposed company where Vigan was
employed, petitioner Eddie Litonjuas should also be excluded as a
party in this case since respondent Vigan failed to prove Eddie
Litonjuas participation in the instant case. It is respondent Vigan,
being the party asserting a fact, who has the burden of proof as to
such fact10 which however, she failed to discharge.
Page 9
IMSON vs CA
FACTS:
This case arose from a vehicular collision involving petitioner's

Toyota Corolla and a Hino diesel truck registered under the
names of private respondents FNCB Finance Corporation and
Holiday Hills Stock and Breeding Farm Corporation. The collision
seriously injured petitioner and totally wrecked his car.
Petitioner filed with the RTC Baguio City a Complaint for

Damages against private respondents as registered owners of
the truck; truck driver; the beneficial owners of the truck and the
truck insurer, Western Guaranty Corporation.
The Complaint prayed that defendants be ordered to pay, jointly

and severally, however defendants driver and beneficial owners
failed to answer and were declared in default.
Petitioner and defendant insurer, entered into a compromise

agreement which provided:
o Defendant Western Guaranty Corporation admits that its
total liability under the laws and the insurance contract;
o In full settlement of its liability under the laws and the said
insurance contract, defendant Western Guaranty shall
pay plaintiff (herein petitioner);
o This compromise agreement shall in no way waive nor
prejudice plaintiffs (herein petitioner's) rights to proceed
against the other defendants with respect the remainder
of his claims;
o This compromise agreement shall be a full and final
settlement of the issues between plaintiff (herein
petitioner) and defendant Western Guaranty;
Trial Court dismissed the complaint for damages, after 18 months

the private respondent moved to dismiss all the cases against the
defendants since they are all indispensable parties under a
common cause of action, the dismissal of the case against
defendant insurer must result in the dismissal of the suit against
all of them. The trial court denied the motion.
Private respondent Holiday Hills Stock and Breeding Farm

Corporation assailed the denial order through a Petition
for Certiorari, Prohibition and Mandamus With Restraining Order
filed with respondent Court of Appeals.
CA reversed the trial court applied the doctrine laid down in Lim
Tanhu v. Hon. Ramolete, adverted to essays that in a common
cause of action where all the defendants are indispensable
parties, the court's power to act is integral and cannot be split,
Page 10
such that it cannot relieve any of them and at the same time
render judgment against the rest.
ISSUE: WON the defendants in Civil Case are indispensable parties.

HELD: NO
For Lim Tanhu to apply to the case at bench, it must be
established that:
o (1) petitioner has common cause of action against private
respondents and the other defendants in Civil Case No. 248R; and
o (2) all the defendants are indispensable parties to the case.
Cause of action has a fixed meaning in this jurisdiction. It is the
delict or wrong by which the right of the plaintiff is violated by the
defendant. The question as to whether a plaintiff has a cause of
action is determined by the averments in the pleadings pertaining
to the acts of the defendant. Whether such acts give him a right of
action is determined by substantive law.
Lim Tanhu will not apply to the case at bench for there is no
showing that petitioner has a common cause of action against the
defendants in Civil Case No. 248-R.
Defendants in Civil Case No. 248-R are not all indispensable

parties. An indispensable party is one whose interest will be
affected by the court's action in the litigation, and without whom
no final determination of the case can be had. The party's interest
in the subject matter of the suit and in the relief sought are so
inextricably intertwined with the other parties' that his legal
presence as a party to the proceeding is an absolute
necessity. In his absence there cannot be a resolution of the
dispute of the parties before the court which is effective,

complete, or equitable.
Conversely, a party is not indispensable to the suit if his interest in
the controversy or subject matter is distinct and divisible from the
interest of the other parties and will not necessarily be prejudiced
by a judgment which does complete justice to the parties in
court. He is not indispensable if his presence would merely permit
complete relief between him and those already parties to the
action, or will simply avoid multiple litigation.
It is true that all of petitioner's claims in Civil Case No. 248-R is

premised on the wrong committed by defendant truck driver.
Concededly, the truck driver is an indispensable party to the suit.
The other defendants, however, cannot be categorized as

indispensable parties. They are merely proper parties to the case.
Proper parties have been described as parties whose presence is
necessary in order to adjudicate the whole controversy, but whose
interests are so far separable that a final decree can be made in
their absence without affecting them.
It is easy to see that if any of them had not been impleaded as

defendant, the case would still proceed without prejudicing the
party not impleaded. Thus, if petitioner did not sue Western
Guaranty Corporation, the omission would not cause the
dismissal of the suit against the other defendants.
Even without the insurer, the trial court would not lose its
competency to act completely and validly on the damage suit. The
Page 11
insurer, clearly, is not an indispensable party in Civil Case No.

248-R.
Petition is granted, CAs ruling is set aside, remanded to trial

court.
SERVICEWIDE SPECIALISTS INC. vs CA
FACTS:
The litigation concerns a motor vehicle, a Colt Galant Sigma
1600E, 1977 model, 4-door sedan, colored Baikal White, with
Serial No. A-121-UL-493 and Engine No. 2G-171-34. The
decisions of both the appellate court and the trial court rest on the
following representation of the facts:
On August 29, 1977, Eleuterio Bondoc executed and delivered to
Carmark Philippines a promissory note in the sum of P66,119.04,
payable in instalments and in order to secure payment, a chattel
mortgage was executed in favor of Carmark Philippines over the
aforementioned motor vehicle which was subsequently assigned
in favor of Filinvest Corporation, with the conformity of Eleuterio
Bondoc.
On July 27, 1979, Eleuterio Bondoc, as vendor, executed a deed
of sale with assumption of mortgage of the balance of the account
in favor of Cesar Dollente which, upon approval by Filinvest
Corporation, Cesar Dollente executed and delivered to Filinvest
Corporation a promissory note in the amount of P37,528.83,
payable in instalments.
On October 26, 1979, Cesar Dollente, as vendor, executed a
deed of sale with assumption of mortgage over the
aforementioned vehicle for the balance of his account in favor of
Ernesto Dollente.
On September 28, 1979, Ernesto Dollente executed and delivered

to Filinvest Corporation a promissory note for the sum of
P37,528.83, payable in monthly instalments, secured by a chattel
mortgage executed between Cesar Dollente and Ernesto
Dollente.
Filinvest Corporation assigned all its rights and interests on the
promissory note and chattel mortgage to plaintiff, with notice to
Ernesto Dollente.
Ernesto Dollente failed to pay monthly installments, plaintiff
demanded from said defendant the payment of the entire balance,
which includes interest thereon and to return the motor vehicle in
question. However he refused to pay and to return the motor
vehicle.
This case was filed and, upon its filing, a writ of seizure was
issued and the same was implemented by the sheriff. A counterreplevin bond having been filed, defendant Armando Custodio, Jr.
had obtained possession of the mortgaged vehicle.
The transaction of Ernesto Dollente, which led to the transfer of

the registration of this motor vehicle in favor of defendant
Armando Custodio, Jr., is doubtful and must have been
conveniently arranged or manipulated to effect this transfer.
It is settled that once a mortgage is registered with the Register of
Deeds and in the Land Transportation Commission, it is binding
against anybody, including defendant Armando Custodio, Jr.
On appeal to it, the Court of Appeals saw merit in the contention
of private respondent that the dismissal at the instance of
petitioner himself of the amended complaint against Ernesto
Dollente after a failure of summons on him, was "fatal to the entire
action" Dollente being, in the considered view of the appellate
court, an indispensable party to the proceedings.
Defendants evidence shows that, on September 8, 1978,

defendant Armando Custodio, Jr. obtained the motor vehicle in
question by purchase from Ernesto Dollente. Ernesto Dollente
bought the same on April 14, 1978 from Venus Motor Sales.
When defendant bought the said vehicle from Ernesto Dollente,
he was issued a clearance from the Constabulary Highway Patrol
Group.
Since then defendant has possessed the vehicle in question
which was registered in Urdaneta, Pangasinan.
Lower court ruled in favour of petitioner, Ernesto Dollente's breach
of the chattel mortgage should not bind him, because he is not a
privy to such contract, is hardly acceptable, for the reason that the
registration of the chattel mortgage is an effective and binding
notice to him of its existence.
HELD: YES
In a suit for replevin, a clear right of possession must be
established. A foreclosure under a chattel mortgage may properly
be commenced only once there is default on the part of the
mortgagor of his obligation secured by the mortgage.
The replevin in the instant case has been sought to pave the way
for the foreclosure of the object covered by the chattel mortgage.
The conditions essential for that foreclosure would be to show,
firstly, the existence of the chattel mortgage and, secondly, the
default of the mortgagor.
These requirements must be established since the validity of the
plaintiffs exercise of the right of foreclosure are inevitably
dependent thereon.
Page 12
ISSUE: WON the plaintiff (herein petitioner) who has predicated his
right on being the mortgagee of a chattel mortgage should implead
the mortgagor in his complaint that seeks to recover possession of the
encumbered property in order to effect its foreclosure.
It would thus seem, considering particularly an adverse and

independent claim of ownership by private respondent, that the
lower court acted improvidently when it granted the dismissal of
the complaint against Dollente, albeit on petitioner's (then plaintiff)
plea, on the ground that the "non-service of summons upon
Ernesto Dollente (would) only delay the determination of the
merits of the case, to the prejudice of the parties."
An indispensable party is one whose interest will be affected by
the court's action in the litigation, and without whom no final
determination of the case can be had. The party's interest in the
subject matter of the suit and in the relief sought are so
inextricably intertwined with the other parties' that his legal
presence as a party to the proceeding is an absolute necessity. In
his absence there cannot be a resolution of the dispute of the
parties before the court which is effective, complete, or equitable.
Conversely, a party is not indispensable to the suit if his interest in
the controversy or subject matter is distinct and divisible from the
interest of the other parties and will not necessarily be prejudiced
by a judgment which does complete justice to the parties in court.
He is not indispensable if his presence would merely permit
complete relief between him and those already parties to the
action or will simply avoid multiple litigation.
Failure of summons upon Ernesto Dollente, per the Sheriffs
Return dated July 19, 1983, is said to have been due to
defendant's being no longer a resident "at the given address as
per information gathered from the present occupant of the
premises."
It appears that the remedial measures provided in Rule 14 of the
Rules of Court regrettably have not been properly availed of; for
instance, substitute service of summons under Section 8 thereof
could have been resorted to.
CAs decision is affirmed.
Page 13
PANTRANCO NORTH EXPRESS vs STANDARD INSURANCE

COMPANY
FACTS:
In the afternoon of October 28, 1984, Crispin Gicale was driving

the passenger jeepney owned by his mother Martina Gicale,
respondent herein. It was then raining.
While driving north bound along the National Highway in Talavera,

Nueva Ecija, a passenger bus, owned by Pantranco North
Express, Inc., petitioner, driven by Alexander Buncan, also a
petitioner, was trailing behind.
When the two vehicles were negotiating a curve along the

highway, the passenger bus overtook the jeepney. In so doing,
the passenger bus hit the left rear side of the jeepney and sped
away.
Crispin reported the incident to the Talavera Police Station and

respondent Standard Insurance Co., Inc. (Standard), insurer of
the jeepney. The total cost of the repair was P21,415.00, but
respondent Standard paid only P8,000.00. Martina Gicale
shouldered the balance of P13,415.00.
Standard and Martina, respondents, demanded reimbursement

from petitioners Pantranco and its driver Alexander Buncan, but
they refused. This prompted respondents to file with the Regional
Trial Court (RTC), Branch 94, Manila, a complaint for sum of
money.
Petitioners specifically denied the allegations in the complaint and

averred that it is the Metropolitan Trial Court, not the RTC, which
has jurisdiction over the case.
Trial court favored respondents Standard and Martina, affirmed by

CA - Totality Rule provided for under Sec. 19, Batas Pambansa
Bilang 129, it is the sum of the two claims that determines the
jurisdictional amount; total of the two claims is definitely more
than P20,000.00 which at the time of the incident in question was
the jurisdictional amount of the Regional Trial Court.
ISSUE: a. WON the trial court has jurisdiction over the subject of the
action considering that respondents respective cause of action
against petitioners did not arise out of the same transaction nor are
there questions of law and facts common to both petitioners and
respondents. YES
b. WON there is permissive joinder in this case. YES
HELD:
A. As previously stated, respondents cause of action against
petitioners arose out of the same transaction. Thus, the amount of the
demand shall be the totality of the claims
Respondent Standards claim is P8,000.00, while that of respondent
Martina Gicale is P13,415.00, or a total ofP21,415.00. Section 19 of
Page 14
B.P. Blg. 129 provides that the RTC has "exclusive original jurisdiction
over all other cases, in which the demand, exclusive of interest and
cost or the value of the property in controversy, amounts to more than
twenty thousand pesos (P20,000.00)."
Clearly, it is the RTC that has jurisdiction over the instant case. It
bears emphasis that when the complaint was filed, R.A. 7691
expanding the jurisdiction of the Metropolitan, Municipal and Municipal
Circuit Trial Courts had not yet taken effect. It became effective on
April 15, 1994.
B. Permissive joinder of parties requires that:
o (a) the right to relief arises out of the same transaction or
series of transactions;
o (b) there is a question of law or fact common to all the
plaintiffs or defendants; and
o (c) such joinder is not otherwise proscribed by the provisions
of the Rules on jurisdiction and venue.
In this case, there is a single transaction common to all, that is,
Pantrancos bus hitting the rear side of the jeepney. There is also a
common question of fact, that is, whether petitioners are negligent.
There being a single transaction common to both respondents,
consequently, they have the same cause of action against petitioners.
To determine identity of cause of action, it must be ascertained
whether the same evidence which is necessary to sustain the second
cause of action would have been sufficient to authorize a recovery in
the first.
Here, had respondents filed separate suits against petitioners, the
same evidence would have been presented to sustain the same
cause of action. Thus, the filing by both respondents of the complaint
with the court below is in order. Such joinder of parties avoids
multiplicity of suit and ensures the convenient, speedy and orderly

administration of justice.
whether the causes of action arose out of the same or different

transactions."
Petition is denied. CAs decision is affirmed.
Section 5(d), Rule 2 of the same Rules provides:

"Sec. 5. Joinder of causes of action. A party may in one
pleading assert, in the alternative or otherwise, as many causes
of action as he may have against an opposing party, subject to
the following conditions:x x x (d) Where the claims in all the
causes of action are principally for recovery of money the
aggregate amount claimed shall be the test of jurisdiction."
SIOK PING TANG vs SUBIC BAY DISTRIBUTION INC

FACTS:
Petitioner is doing business under the name and style of Able

Transport. Respondent Subic Bay Distribution, Inc. (SBDI)
entered in two Distributorship Agreements with petitioner and Able
Transport in April 2002.
Under the Agreements, respondent, as seller, will sell, deliver or

procure to be delivered petroleum products, and petitioner, as
distributor, will purchase, receive and pay for its purchases from
respondent. The two Agreements had a period of one year,
commencing on October 2001 to October 2002, which shall
continue on an annual basis unless terminated by either party
upon thirty days written notice to the other prior to the expiration
of the original term or any extension thereof.
Section 6.3 of the Distributorship Agreement provides that

respondent may require petitioner to put up securities, real or
personal, or to furnish respondent a performance bond issued by
a bonding company chosen by the latter to secure and answer for
petitioner's outstanding account, and or faithful performance of
her obligations as contained or arising out of the Agreement.
The above provision presupposes that the different causes of action

which are joined accrue in favor of the same plaintiff/s and against the
same defendant/s and that no misjoinder of parties is involved.
The issue of whether respondents claims shall be lumped together is

determined by paragraph (d) of the above provision. This paragraph
embodies the "totality rule" as exemplified by Section 33 (1) of B.P.
Blg. 129 which states, among others, that "where there are several
claims or causes of action between the same or different parties,
embodied in the same complaint, the amount of the demand shall be
the totality of the claims in all the causes of action, irrespective of
Page 15
Thus, petitioner applied for and was granted a credit line by the
United Coconut Planters Bank (UCPB), International Exchange
Bank (IEBank), and Security Bank Corporation (SBC). Petitioner
also applied with the Asia United Bank (AUB) an irrevocable
domestic standby letter of credit in favor of respondent. All these
banks separately executed several undertakings setting the terms
and conditions governing the drawing of money by respondent
from these banks.
for the latter to submit its position paper on the matter of the
issuance of the injunction. Petitioner and respondent submitted
their respective position papers.
Petitioner allegedly failed to pay her obligations to respondent

despite demand, thus, respondent tried to withdraw from these
bank undertakings.
Petitioner then filed with the Regional Trial Court (RTC) of
Quezon City separate petitions against the banks for declaration
of nullity of the several bank undertakings and domestic letter of
credit which they issued with the application for the issuance of a
temporary restraining order (TRO) and writ of preliminary
injunction.
Petitioner asked for the annulment of the bank undertakings/letter
of credit which she signed on the ground that the prevailing
market rate at the time of respondent's intended drawings with
which petitioner will be charged of as interests and penalties is
oppressive, exorbitant, unreasonable and unconscionable
rendering it against public morals and policy; banks merely
required the submission of a mere certification from the company
(respondent) that the customer (petitioner) has not paid its
account (and its statement of account of the client) without first
verifying the truthfulness of the alleged petitioner's total liability to
the drawer thereon.
The court then issued an Order granting the TRO and requiring
petitioner to implead respondent as an indispensable party and
Page 16
The RTC found that both respondent and petitioner have reasons
for the enforcement or non-enforcement of the bank undertakings,
however, as to whether said reasons were justifiable or not, in
view of the attending circumstances, the RTC said that these can
only be determined after a full blown trial. It ruled that the outright
denial of petitioner's prayer for the issuance of injunction, even if
the evidence warranted the reasonable probability that real injury
will occur if the relief for shall not be granted in favor of petitioner,
will not serve the ends of justice.
Respondent filed with the CA a petition for certiorari with prayer

for the issuance of a TRO and writ of preliminary injunction
against respondent Judge Pizarro and petitioner.
CA issued a Resolution granting the TRO prayed for by
respondent after finding that it was apparent that respondent has
a legal right under the bank undertakings issued by UCPB, SBC,
and IEBank; and that until those undertakings were nullified,
respondent's rights under the same should be maintained.
CA issued a Supplemental Resolution wherein the Domestic

Standby Letter of Credit issued by AUB was ordered included
among the bank undertakings, to which respondent has a legal
right.
CA said that the grant or denial of an injunction rests on the sound

discretion of the RTC which should not be intervened, except in
clear cases of abuse.
Nonetheless, the CA continued that the RTC should avoid issuing
a writ of preliminary injunction which would, in effect, dispose of
the main case without trial. It found that petitioner was questioning
the validity of the bank undertakings and letter of credit for being
oppressive, unreasonable and unconscionable.
However, as provided under the law, private transactions are
presumed to be fair and regular and that a person takes ordinary
care of his concerns.
The CA ruled that the RTC's issuance of the injunction, which was
premised on the abovementioned justification, would be a virtual
acceptance of petitioner's claim, thus, already a prejudgment of
the main case. It also said that contracts are presumed valid until
they are voided by a court of justice, thus, until such time that
petitioner has presented sufficient evidence to rebut such
presumption, her legal right to the writ is doubtful.
As to petitioner's claim of respondent's non-filing of a motion for
reconsideration before resorting to a petition for certiorari, the CA
said that it is not a rigid rule, as jurisprudence had said, that when
a definite question has been properly raised, argued and
submitted in the RTC and the latter had decided the question, a
motion for reconsideration is no longer necessary before filing a
petition for certiorari.
The court found that both parties had fully presented their sides
on the issuance of the writ of preliminary injunction and that the
RTC had squarely resolved the issues presented by both parties.
Thus, respondent could not be faulted for not filing a motion for
reconsideration.
Page 17
ISSUE: WON the banks are indispensable parties in this case.

HELD: NO (TAKE NOTE OF PARTIES CONTENTIONS ON pp. 464466 of SCRA)
We find that the banks are not indispensable parties in the petition for
certiorari which respondent filed in the CA assailing the RTC Order
dated December 17, 2002. In fact, several circumstances would show
that the banks are not parties interested in the matter of the issuance
of the writ of preliminary injunction, whether in the RTC or in the CA.
First. During the hearing of petitioner's prayer for the issuance of a
TRO, the RTC, in open court, elicited from the lawyer-representatives
of the four banks their position in the event of the issuance of the
TRO, and all these representatives invariably replied that they will
abide and/or submit to the sound judgment of the court.
Second. When the RTC issued its Order dated December 17, 2002
granting the issuance of the writ of preliminary injunction, the banks
could have challenged the same if they believe that they were
aggrieved by such issuance. However, they did not, and such
actuations were in consonance with their earlier position that they
would submit to the sound judgment of the RTC.
Third. When respondent filed with the CA the petition for certiorari with
prayer for the issuance of a TRO and writ of preliminary injunction,
and a TRO was subsequently issued, copies of the resolution were
also sent to the banks, although not impleaded, yet the latter took no
action to question their non-inclusion in the petition. Notably, the SBC
filed an Urgent Motion for Clarification on whether or not the issuance
of the TRO has the effect of restraining the bank from complying with
the writ of preliminary injunction issued by the RTC or nullifying
/rendering ineffectual the said writ. In fact, SBC even stated that the
motion was filed for no other purpose, except to seek proper guidance
on the issue at hand so that whatever action or position it may take
with respect to the CA resolution will be consistent with its term and
purposes.
Fourth. When the CA rendered its assailed Decision nullifying the
injunction issued by the RTC, and copies of the decision were
furnished these banks, not one of these banks ever filed any pleading
to assail their non-inclusion in the certiorari proceedings.
Indeed, the banks have no interest in the issuance of the injunction,
but only the petitioner. The banks' interests as defendants in the
petition for declaration of nullity of their bank undertakings filed
against them by petitioner in the RTC are separable from the interests
of petitioner for the issuance of the injunctive relief.
Clearly, in filing the petition for certiorari, respondent should join as
party defendant with the court or judge, the person interested in
sustaining the proceedings in the court, and it shall be the duty of
such person to appear and defend, both in his own behalf and in
behalf of the court or judge affected by the proceedings.
In this case, there is no doubt that it is only the petitioner who is the
person interested in sustaining the proceedings in court since she was
the one who sought for the issuance of the writ of preliminary
injunction to enjoin the banks from releasing funds to respondent. As
earlier discussed, the banks are not parties interested in the subject
matter of the petition. Thus, it is only petitioner who should be joined
as party defendant with the judge and who should defend the judge's
issuance of injunction.
Page 18
Concededly, the settled rule is that a motion for reconsideration is a

condition sine qua non for the filing of a petition for certiorari. Its
purpose is to grant an opportunity for the court to correct any actual or
perceived error attributed to it by the re-examination of the legal and
factual circumstances of the case.
The rule is, however, circumscribed by well-defined exceptions, such
as
o (a) where the order is a patent nullity, as where the court a
quo had no jurisdiction;
o (b) where the questions raised in the certiorari proceeding
have been duly raised and passed upon by the lower court, or
are the same as those raised and passed upon in the lower
court;
o (c) where there is an urgent necessity for the resolution of the
question and any further delay would prejudice the interests
of the Government or of the petitioner or the subject matter of
the action is perishable;
o (d) where, under the circumstances, a motion for
reconsideration would be useless;
o (e) where petitioner was deprived of due process and there is
extreme urgency for relief;
o (f) where, in a criminal case, relief from an order of arrest is
urgent and the granting of such relief by the trial court is
improbable;
o (g) where the proceedings in the lower court are a nullity for
lack of due process; (h) where the proceedings were ex parte,
or in which the petitioner had no opportunity to object; and
o (i) where the issue raised is one purely of law or where public
interest is involved.
Petition is denied, CAs decision is affirmed.
Vda. De Salazar vs. CA, Primitivo Nepomuceno and Emerenciana

Nepomunceno
Facts:
Both Nepomuceno filed separate complaints with the court of
agrarian relations of Malolos, Bulacan,for ejectment on the ground of
personal cultivation and conversion of land for useful non-agricultural
purposes against petitioner's deceased husband, Benjamin Salazar.
The case went through the agrarian court and RTC from 1970 to 1993
and decided in favour of the Nepomucenos. Which an appeal was
interposed in the name of Benjamin Salazar on the ground of that
Nepomucenos failed to satisfy the requirements pertaining to personal
cultivation and conversion of the landholdings into non-agricultural
uses. However it was rejected. A year later, petitioner assailed the
decision of the trial court before the CA by way of petition for
annulment of judgement. That it did not have jurisdiction over her and
the other heirs of her husband that said husband had already died on
Oct 3 1991 which the trial still proceeded and rendered its decision on
Aug 23 1993 w/o affecting the substitution under rule 3 sec 17 Rules
of court.CA ruled in favor of the validity of the challenged decision.
Issue: W/N there formal substitution of heirs in not necessary?
Held: Yes. The CA correctly ruled that formal substitution of heirs is
not necessary when the heirs themselves voluntarily appeared,
participated in the case and presented evidence in defense of
deceased defendant. As expounded by CA: jurisprudential rule is that
failure to make the substitution is a jurisdictional defect, purpose of
this procedural rule is to comply with due process requirements. For
the case to continue, the real party in interest must be substituted for
the deceased. The real party in interest is the one who would be
affected by the judgment. It could be the administrator or executor or
the heirs. In the instant case, the heirs are the proper substitutes.
Page 19
Substitution gives them the opportunity to continue the defense for the
deceased. Substitution is important because such opportunity to
defend is a requirement to comply with due process. The following are
the active participation of the heirs in the defence after the death of
Salazar:
1.lawyer did not stop representing the deceased which lasted for
about two more years,counsel was allowed by the petitioner who was
well aware of the instant litigation to continue appearing as counsel
until August 23, 1993 when the challenged decision was rendered.
2.The wife testified in court and declared that her husband is already
deceased. She new therefore that there was a litigation against her
husband, which her and her childrens interest are involve.
3.The petition for judgement was filed 1 and after the decision was
rendered.
4.Jurisdiction by estoppel, which jurisdiction over the person may be
acquired by simple appearance of the person in court.
Consequently, it undeniably being evident that the heirs
themselves sought their day in court and exercise their right to due
process. The ejectment being an action involving recovery of real
property, is a real action which is not extinguished by death. And that
a judgement in an ejectment case is conclusive between the parties
and their successors in interest by title subsequent to the
commencement of the action. Petition dismiss.
STATE INVESTMENT HOUSE VS. CA
Facts:
Cheng Ban Yek (CBY) is a domestic corp. engaged in

business of manufacturing edible oil bearing the brand
BAGUIO OIL and in the conduct of its business, it incurred
millions of pesos obligation tp Pet. SIHI and ALLIED
BANKING CORP who is the creditor of SIHI.
CBY and SIHI entered into an Agreement for the restructuring
of CBY's obligations to its creditors but excluding ALLIED.
Mortgage Indenture was executed by CBY and FOUR SEAS
as mortgagors and SIHI as mortgagees involving 23 parcels
of registered land and improvements.
CBY defaulted in the payment of its obligations which are due
and demandable. SIHI notified the creditor's committee of
CBY that it would institute proceedings for the enforcement of
the remedies under the Mortgage indenture and later on the
committee authorized SIHI to institute the appropriate
foreclosure proceedings.
SIHI instituted with the Respondent Court an action for
foreclosure of mortgage.
ALLIED prayed for the dismissal of the complaint.
SIHI then entered into a DEED OF ASSIGNMENT with FIL
NIPPON transferring all rights, interests, claims and cause of
action arising out from the agreement, which the latter agreed
to assume all obligations of SIHI.
FIL NIPPON later on filed a Motion for Substitution of Party
Plaintiff which was opposed by ALLIED on the grounds that it
has a counterclaim against SIHI arising from irregularities,
excesses, abuses and inimical acts commited by CBY.
The respondent court (RTC)finding no legal basis for the
objection of ALLIED, the MOTION was granted.
ALLIED MR was denied.
CA: granted the petition for certiorari filed by ALLIED.
Hence this petition for review on certiorari.
Page 20
ISSUE: W/N the substitution of SIHI by its assignee FIL NIPPON

improper?
HELD: NEGATIVE.
Sec 19, Rule 3: transfer of interest in case of any transfer of interest,
the action may be continued by or against the original party, unless
the court upon motion directs the person to whom the interest is
transferred to be substituted in the action or joined with the original
party.
It has been held that a transferee PENDENTE LITE does not hav to
be included or impleaded by name in order to be bound by judgement
because the action or suit may be continued for or against the original
party or to the transferor and still be binding on the transferee.
FIL NIPPON as transferee of SIHI's interests pendente lite, is not
even an indispensable party in the case.
RIVIERA FILIPINA, INC. vs. COURT OF APPEALS

Facts:
1. November 23, 1982, respondent Juan L. Reyes (Reyes, for brevity)
executed a Contract of Lease with Riviera. The ten-year (10)
renewable lease of Riviera, which started on August 1, 1982, involved
a 1,018 square meter parcel of land located along Edsa, Quezon City,
covered and described in Transfer Certificate of Title No. 186326 of

the Registry of Deeds of Quezon City in the name of Juan L. Reyes.
2. The said parcel of land was subject of a Real Estate Mortgage
executed by Reyes in favor of Prudential Bank. Since the loan with
Prudential Bank remained unpaid upon maturity, the mortgagee bank
extrajudicially foreclosed the mortgage thereon. At the public auction
sale, the mortgagee bank emerged as the highest bidder. The
redemption period was set to expire on March 7, 1989. Realizing that
he could not possibly raise in time the money needed to redeem the
subject property, Reyes decided to sell the same.
3. Reyes offered to sell the subject property to Riviera, through its
President Vicente C. Angeles, for Five Thousand Pesos (P5,000.00)
per square meter. However, Angeles bargained for Three Thousand
Five Hundred Pesos (P3,500.00) per square meter. Since Reyes was
not amenable to the said price and insisted on Five Thousand Pesos
(P5,000.00) per square meter, Angeles requested Reyes to allow him
to consult the other members of the Board of Directors of Riviera.
4. Seven (7) months later, or sometime in October 1988, Angeles
communicated with Reyes Rivieras offer to purchase the subject
property for Four Thousand Pesos (P4,000.00) per square
meter. However, Reyes did not accept the offer. This time he asked
for Six Thousand Pesos (P6,000.00) per square meter since the value
of the property in the area had appreciated in view of the plans of
Araneta to develop the vicinity.
5. In a letter dated November 2, 1988, Atty. Irineo S. Juan, acting as
counsel for Reyes, informed Riviera that Reyes was selling the
Page 21
subject property for Six Thousand Pesos (P6,000.00) per square

meter, net of capital gains and transfer taxes, registration fees,
notarial fees and all other attendant charges.
6.
To answer the foregoing letter and confirm their telephone

conversation on the matter, Riviera sent a letter dated November 22,
1988 to Atty. Juan, counsel for Reyes, expressing Rivieras interest to
purchase the subject property and that Riviera is already negotiating
with Reyes which will take a couple of days to formalize. Riviera
increased its offer to Five Thousand Pesos (P5,000.00) per square
meter but Reyes did not accede to said price as it was still lower than
his quoted price of Six Thousand Pesos (P6,000.00) per square
meter. Angeles asked Reyes to give him until the end of November
1988 for Rivieras final decision.
7. In a letter dated December 2, 1988, Angeles wrote Reyes confirming

Rivieras intent to purchase the subject property for the fixed and
final price of Five Thousand Pesos (P5,000.00) per square meter,
complete payment within sixty (60) to ninety (90) days which offer is
what we feel should be the market price of your property. Angeles
asked that the decision of Reyes and his written reply to the offer be
given within fifteen (15) days since there are also other properties
being offered to them at the moment.
8. In response to the foregoing letter, Atty. Juan sent a letter to Riviera
dated December 5, 1988 informing Riviera that Rivieras offer is not
acceptable to his client. He further expressed, let it be made clear
that, much as it is the earnest desire of my client to really give you the
preference to purchase the subject property, you have unfortunately
failed to take advantage of such opportunity and thus lost your right of
first refusal in sale of said property.
9. Meanwhile, on December 4, 1988, Reyes confided to Rolando P.
Traballo, a close family friend and President of Cypress, his
predicament about the nearing expiry date of the redemption period of
the foreclosed mortgaged property with Prudential Bank, the money
for which he could not raise on time thereby offering the subject
property to him for Six Thousand Pesos (P6,000.00) per square
meter. Traballo expressed interest in buying the said property, told
Reyes that he will study the matter and suggested for them to meet
the next day.
10. They met the next day, December 5, 1988, at which time Traballo
bargained for Five Thousand Three Hundred Pesos (P5,300.00) per
square meter. After considering the reasons cited by Traballo for his
quoted price, Reyes accepted the same. However, since Traballo did
not have the amount with which to pay Reyes, he told the latter that
he will look for a partner for that purpose. Reyes told Traballo that he
had already afforded Riviera its right of first refusal but they cannot
agree because Rivieras final offer was for Five Thousand Pesos
(P5,000.00) per square meter.
11. Sometime in January 1989, apprehensive of the impending expiration
in March 1989 of the redemption period of the foreclosed mortgaged
property with Prudential Bank and the deal between Reyes and
Traballo was not yet formally concluded, Reyes decided to approach
anew Riviera. For this purpose, he requested his nephew, Atty.
Estanislao Alinea, to approach Angeles and find out if the latter was
still interested in buying the subject property and ask him to raise his
Page 22
offer for the purchase of the said property a little higher. As

instructed, Atty. Alinea met with Angeles and asked the latter to
increase his offer of Five Thousand Pesos (P5,000.00) per square
meter but Angeles said that his offer is Five Thousand Pesos
12. Following the meeting, Angeles sent a letter dated February 4, 1989
to Reyes, through Atty. Alinea, that his offer is Five Thousand Pesos
(P5,000.00) per square meter payment of which would be fifty percent
(50%) down within thirty (30) days upon submission of certain
documents in three (3) days, the balance payable in five (5) years in
equal monthly installments at twelve percent (12%) interest in
diminishing balance. With the terms of this second offer, Angeles
admittedly downgraded the previous offer of Riviera on December 2,
1988.
13. Atty. Alinea conveyed to Reyes Rivieras offer of Five Thousand
Pesos (P5,000.00) per square meter but Reyes did not
agree. Consequently, Atty. Alinea contacted again Angeles and asked
him if he can increase his price. Angeles, however, said he cannot
add anymore. Reyes did not expressly offer his subject property to
Riviera at the price of Five Thousand Three Hundred Pesos
14. Sometime in February 1989, Cypress and its partner in the venture,
Cornhill Trading Corporation, were able to come up with the amount
sufficient to cover the redemption money, with which Reyes paid to
the Prudential Bank to redeem the subject property. On May 1, 1989,
a Deed of Absolute Sale covering the subject property was executed
by Reyes in favor of Cypress and Cornhill for the consideration of Five
Million Three Hundred Ninety Five Thousand Four Hundred Pesos

(P5,395,400.00). On the same date, Cypress and Cornhill mortgaged
the subject property to Urban Development Bank for Three Million
Pesos (P3,000,000.00).
Issue: WON the CA erred on deciding the petitioners appeal at the

time when the principal appellee is allegedly dead and no proper
substitution of the alleged deceases party has been made.
Held: NO.
15. Thereafter, Riviera sought from Reyes, Cypress and Cornhill a resale
of the subject property to it claiming that its right of first refusal under
the lease contract was violated. After several unsuccessful attempts,
Riviera filed the suit to compel Reyes, Cypress, Cornhill and Urban
Development Bank to transfer the disputed title to the land in favor of
Riviera upon its payment of the price paid by Cypress and Cornhill.
16. Following trial on the merits, the trial court dismissed the complaint of
Riviera as well as the counterclaims and cross-claims of the other
parties.
17. Dissatisfied with the decision of the trial court, both parties appealed
to the Court of Appeals. However, the appellate court, through its
Special Seventh Division, rendered a Decision dated June 6, 1994
which affirmed the decision of the trial court in its entirety.
18. From this decision, Riviera filed a motion for reconsideration, but the
appellate court denied the same.
Section 16 and 17 of Rule 3 of the Revised Rules of Court, upon

which Riviera anchors its argument, has already been amended by
the 1997 Rules of Civil Procedure. Even applying the old Rules, the
failure of a counsel to comply with his duty under Section 16 of Rule 3
of the Revised Rules of Court, to inform the court of the death of his
client and no substitution of such is effected, will not invalidate the
proceedings and the judgment thereon if the action survives the death
of such party, as this case does, since the death of Reyes did not
extinguish his civil personality. The appellate court was well within its
jurisdiction to proceed as it did with the case since the death of a party
is not subject to its judicial notice. Needless to stress, the purpose
behind the rule on substitution of parties is the protection of the right
of every party to due process. This purpose has been adequately met
in this case since both parties argued their respective positions
through their pleadings in the trial court and the appellate
court. Besides, the Court has already acquired jurisdiction over the
heirs of Reyes by voluntarily submitting themselves to our jurisdiction.
Shorter Version po: Ito ung sa sales naten!
Facts:
1. In 1982, Reyes executed a 10-year (renewable)Contract of Lease with
Riviera Filipina over a parcel of land in EDSA. Under such contract,
Page 23
2.
3.
4.
5.
6.
the lessee is given aright of first refusal should the lessor decide to
sell the property during the terms of the lease.
Such property was subject of a mortgage executed by Reyes in favor
of Prudential Bank. Since Reyes failed to pay the loan with the bank, it
foreclosed the mortgage and it emerged as the highest bidder in the
auction sale.
Realizing that he could not redeem the property, Reyes decided to sell
it and offered it to Riviera Filipina for P5,000/sqm. However, it
bargained for P3,500/sqm. Reyes rejected such offer. After 7 months,
it again bargained for P4,000/sqm, which again was rejected by
Reyes who asked for P6,000/sqm price. After 2 months, it again
bargained for P5,000/sqm, but since Reyes insisted on P6,000/sqm
price, he rejected Riviera's offer.
Nearing the expiry of the redemption period, Reyes and Traballo (his
friend) agreed that the latter would buy the same for P5,300. But such
deal was not yet formally concluded and negotiations with Riviera
Filipina once again transpired but to no avail.
In 1989, Cypress and Cornhill Trading were able to come up with the
amount sufficient to cover the redemption money, with which Reyes
paid to Prudential Bank to redeem the property. Subsequently, a Deed
of Absolute Sale was executed in favor of Cypress and Cornhill for
P5.4M. Cypress and Cornhill mortgaged the property in favor of Urban
Dev. Bank for P3M. Riviera Filipina filed a suit against Reyes, Cypress
and Cornhill on the ground that they violated its right of first refusal
under the lease contract.
RTC ruled in favor of Reyes, Cypress, and Cornhill. On appeal, CA
affirmed the decision of the RTC.
7.
Ang vs. Ang
Thus, on August 28, 2006, the petitioners sent the

respondents a demand letter asking them to pay their outstanding
debt which, at that time, already amounted to (US$719,671.23),
inclusive of the ten percent (10%) annual interest that had
accumulated over the years. Notwithstanding the receipt of the said
demand letter, the respondents still failed to settle their loan
obligation.
On August 6, 2006, the petitioners, who were then residing in
Los Angeles, California, United States of America (USA), executed
their respective Special Powers of Attorney in favor of Attorney Eldrige
Marvin B. Aceron (Atty. Aceron) for the purpose of filing an action in
court against the respondents. On September 15, 2006, Atty. Aceron,
in behalf of the petitioners, filed a Complaint for collection of sum of
money with the RTC of Quezon City against the respondents.
Issues: WON Atty. Aceron, being merely a representative of the
petitioners, is not the real party in interest in the case.
Held: Atty. Aceron, despite being the attorney-in-fact of the
petitioners, is not a real party in interest in the case below. Section 2,
Rule 3 of the Rules of Court reads:
FACTS:
On September 2, 1992, spouses Alan and EmAng (respondents)
obtained a loan in the amount of US$300,000.00 from Theodore and
Nancy Ang (petitioners). On even date, the respondents executed a

promissory note in favor of the petitioners wherein they promised to
pay the latter the said amount, with interest at the rate of ten percent
(10%) per annum, upon demand. However, despite repeated
demands, the respondents failed to pay the petitioners.
Page 24
Sec. 2.Parties in interest. A real party in interest is the party who

stands to be benefited or injured by the judgment in the suit, or the
party entitled to the avails of the suit. Unless otherwise authorized by
law or these Rules, every action must be prosecuted or defended in
the name of the real party in interest.
Interest within the meaning of the Rules of Court means
material interest or an interest in issue to be affected by the decree or
judgment of the case, as distinguished from mere curiosity about the
question involved. A real party in interest is the party who, by the
substantive law, has the right sought to be enforced.
Applying the foregoing rule, it is clear that Atty. Aceron is not
a real party in interest in the case below as he does not stand to
be benefited or injured by any judgment therein. He was merely
appointed by the petitioners as their attorney-in-fact for the limited
purpose of filing and prosecuting the complaint against the
respondents. Such appointment, however, does not mean that he is
subrogated into the rights of petitioners and ought to be considered as
a real party in interest.
Being merely a representative of the petitioners, Atty. Aceron
in his personal capacity does not have the right to file the complaint
below against the respondents. He may only do so, as what he did, in
behalf of the petitioners the real parties in interest. To stress, the
right sought to be enforced in the case below belongs to the
petitioners and not to Atty.
Aceron. Clearly, an attorney-in-fact is not a real party in
interest.
Page 25
FORTUNE MOTORS v CA
FACTS: On March 29,1982 up to January 6,1984, private respondent
Metropolitan Bank extended various loans to petitioner Fortune
Motors in the total sum of P32,500,000.00 (according to the borrower;
or P34,150,000.00 according to the Bank) which loan was secured by
a real estate mortgage on the Fortune building and lot in Makati,
Rizal.
Due to financial difficulties and the onslaught of economic recession,
the petitioner was not able to pay the loan which became due.
For failure of the petitioner to pay the loans, the respondent bank
initiated extrajudicial foreclosure proceedings. After notices were
served, posted, and published, the mortgaged property was sold at
public auction for the price of P47,899,264.91 to mortgagee Bank as
the highest bidder.
The sheriff's certificate of sale was registered on October 24, 1984
with the one-year redemption period to expire on October 24,1985.
On October 21, 1985, three days before the expiration of the
redemption period, petitioner Fortune Motors filed a complaint for
annulment of the extrajudicial foreclosure sale alleging that the
foreclosure was premature because its obligation to the Bank was not
yet due, the publication of the notice of sale was incomplete, there
was no public auction, and the price for which the property was sold
was "shockingly low".
Before summons could be served private respondent Bank filed a

motion to dismiss the complaint on the ground that the venue of the
action was improperly laid in Manila for the realty covered by the real
estate mortgage is situated in Makati, therefore the action to annul the
foreclosure sale should be filed in the Regional Trial Court of Makati.
ISSUE: Whether petitioner's action for annulment of the real estate

mortgage extrajudicial foreclosure sale of Fortune Building is a
personal action or a real action for venue purposes.
The motion was opposed by petitioner Fortune Motors alleging that its
action "is a personal action" and that "the issue is the validity of the
extrajudicial foreclosure proceedings" so that it may have a new one
year period to redeem.
In a real action, the plaintiff seeks the recovery of real property, or as

indicated in Sec. 2 (a) of Rule 4, a real action is an action affecting
title to real property, or for the recovery of possession, or for the
partition or condemnation of, or foreclosure of a mortgage on real
property.
On January 8, 1986 an order was issued by the lower court reserving

the resolution of the Bank's motion to dismiss until after the trial on the
merits as the grounds relied upon by the defendant were not clear and
indubitable.
The Bank filed a motion for reconsideration of the order dated January
8, 1986 but it was denied by the lower court in its order dated May 28,
1986.
The respondent Bank filed a petition for certiorari and prohibition in
the Court of Appeals and it was granted. The complaint in the Civil
Case No. 85-33218 is dismissed without prejudice to its being filed in
the proper venue.
A motion for reconsideration was filed on August 11, 1986 on the said
decision and on October 30, 1986 a resolution was issued denying
such motion for reconsideration.
Hence, the petition for review on certiorari.
Page 26
HELD: Petition Denied. Real Action.
Real actions or actions affecting title to, or for the recovery of

possession, or for the partition or condemnation of, or foreclosure of
mortgage on real property, must be instituted in the Court of First
Instance of the province where the property or any part thereof lies.
Personal actions upon the other hand, may be instituted in the Court
of First Instance where the defendant or any of the defendants resides
or may be found, or where the plaintiff or any of the plaintiffs resides,
at the election of the plaintiff.
A prayer for annulment or rescission of contract does not operate to
efface the true objectives and nature of the action which is to recover
real property.
An action for the annulment or rescission of a sale of real property is a
real action. Its prime objective is to recover said real property. An
action to annul a real estate mortgage foreclosure sale is no different
from an action to annul a private sale of real property.
While it is true that petitioner does not directly seek the recovery of
title or possession of the property in question, his action for annulment
of sale and his claim for damages are closely intertwined with the
issue of ownership of the building which, under the law, is considered
immovable property, the recovery of which is petitioner's primary
objective. The prevalent doctrine is that an action for the annulment or
rescission of a sale of real property does not operate to efface the
fundamental and prime objective and nature of the case, which is to
recover said real property. It is a real action. Respondent Court,
therefore, did not err in dismissing the case on the ground of improper
venue (Sec. 2, Rule 4) which was timely raised (Sec. 1, Rule 16).
Since an extrajudicial foreclosure of real property results in a

conveyance of the title of the property sold to the highest bidder at the
sale, an action to annul the foreclosure sale is necessarily an action
affecting the title of the property sold. It is therefore a real action which
should be commenced and tried in the province where the property or
part thereof lies.
CLAVECILLIA RADIO SYSTEM, petitioner-appellant,
vs.
HON. AGUSTIN ANTILLON, as City Judge of the Municipal Court
of Cagayan de Oro City
and NEW CAGAYAN GROCERY, respondents-appellees.
FACTS:
1. June 22, 1963- New Cagayan Grocery filed a complaint
against the Clavecilla Radio System alleging that on March
12, 1963, CLAVECILLIA omitted the word NOT between the
Page 27
words "WASHED" and "AVAILABLE," in a letter addressed to

NEW CAGAYAN GROCERY for transmittal in the Cagayan
de Oro branch office, thus changing entirely the contents and
purport of the same and causing the said addressee to suffer
damages.
2. Clavecilla Radio System filed a motion to dismiss the
complaint on the grounds that it states no cause of action and
that the venue is improperly laid.
3. City Judge, on September 18, 1963, denied the motion to
dismiss for lack of merit and set the case for hearing.
4. Hence, the Clavecilla Radio System filed a petition for
prohibition with preliminary injunction with the Court of First
Instance praying that the City Judge, Honorable Agustin
Antillon, be enjoined from further proceeding with the case on
the ground of improper venue.
5. CFI held that the Clavecilla Radio System may be sued either
in Manila where it has its principal office or in Cagayan de
Oro City where it may be served, as in fact it was served, with
summons through the Manager of its branch office in said city.
6. Clavecilla Radio System appealed to SC and contends that
the suit against it should be filed in Manila where it holds its
principal office.
ISSUE: WON the suit against CLAVECILLIA RADIO SYSTEM it
should be filed in Manila where it holds its principal office or in CDO.
HELD: MANILA. It is clear that the case for damages filed with the
city court is based upon tort and not upon a written contract. Section 1
of Rule 4 of the New Rules of Court, governing venue of actions in
inferior courts, provides in its paragraph (b) (3) that when "the action
is not upon a written contract, then in the municipality where the
defendant or any of the defendants resides or may be served with
summons."
Settled is the principle in corporation law that the residence of a
corporation is the place where its principal office is established. Since
it is not disputed that the Clavecilla Radio System has its principal
office in Manila, it follows that the suit against it may properly be filed
in the City of Manila.
As stated in Evangelista vs. Santos, et al., supra, the laying of the
venue of an action is not left to plaintiff's caprice because the matter is
regulated by the Rules of Court. Applying the provision of the Rules of
Court, the venue in this case was improperly laid.
Young Auto Supply vs. Court of Appeals
Facts: On 28 October 1987, Young Auto Supply Co. Inc. (YASCO)
represented by Nemesio Garcia, its president, Nelson Garcia and
Vicente Sy, sold all of their shares of stock in Consolidated Marketing
& Development Corporation (CMDC) to George C. Roxas. The
purchase price was P8,000,000.00 payable as follows: a down
payment of P4,000,000.00 and the balance of P4,000,000.00 in four
postdated checks of P1,000,000.00 each. Immediately after the
execution of the agreement, Roxas took full control of the four
markets of CMDC. However, the vendors held on to the stock
Page 28
certificates of CMDC as security pending full payment of the balance

of the purchase price. The first check of P4,000,000.00, representing
the down payment, was honored by the drawee bank but the four
other checks representing the balance of P4,000,000.00 were
dishonored. In the meantime, Roxas sold one of the markets to a third
party. Out of the proceeds of the sale, YASCO received P600,000.00,
leaving a balance of P3,400,000.00.
Subsequently, Nelson Garcia and Vicente Sy assigned all their rights
and title to the proceeds of the sale of the CMDC shares to Nemesio
Garcia. On 10 June 1988, YASCO and Garcia filed a complaint
against Roxas in the Regional Trial Court, Branch 11, Cebu City,
praying that Roxas be ordered to pay them the sum of P3,400,000.00
or that full control of the three markets be turned over to YASCO and
Garcia. The complaint also prayed for the forfeiture of the partial
payment of P4,600,000.00 and the payment of attorney's fees and
costs. Failing to submit his answer, and on 19 August 1988, the trial
court declared Roxas in default. The order of default was, however,
lifted upon motion of Roxas. On 22 August 1988, Roxas filed a motion
to dismiss. After a hearing, wherein testimonial and documentary
evidence were presented by both parties, the trial court in an Order
dated 8 February 1991 denied Roxas' motion to dismiss. After
receiving said order, Roxas filed another motion for extension of time
to submit his answer. He also filed a motion for reconsideration, which
the trial court denied in its Order dated 10 April 1991 for being proforma. Roxas was again declared in default, on the ground that his
motion for reconsideration did not toll the running of the period to file
his answer. On 3 May 1991, Roxas filed an unverified Motion to Lift
the Order of Default which was not accompanied with the required
affidavit of merit. But without waiting for the resolution of the motion,
he filed a petition for certiorari with the Court of Appeals. The Court of
Appeals dismissal of the complaint on the ground of improper venue.
A subsequent motion for reconsideration by YASCO was to no avail.

YASCO and Garcia filed the petition.
Issue: Whether the venue for the case against YASCO and Garcia in
Cebu City was improperly laid.
Held: A corporation has no residence in the same sense in which this
term is applied to a natural person. But for practical purposes, a
corporation is in a metaphysical sense a resident of the place where
its principal office is located as stated in the articles of incorporation.
The Corporation Code precisely requires each corporation to specify
in its articles of incorporation the "place where the principal office of
the corporation is to be located which must be within the Philippines."
The purpose of this requirement is to fix the residence of a corporation
in a definite place, instead of allowing it to be ambulatory. Actions
cannot be filed against a corporation in any place where the
corporation maintains its branch offices. The Court ruled that to allow
Page 29
an action to be instituted in any place where the corporation has

branch offices, would create confusion and work untold inconvenience
to said entity. By the same token, a corporation cannot be allowed to
file personal actions in a place other than its principal place of
business unless such a place is also the residence of a co-plaintiff or
a defendant. With the finding that the residence of YASCO for
purposes of venue is in Cebu City, where its principal place of
business is located, it becomes unnecessary to decide whether
Garcia is also a resident of Cebu City and whether Roxas was in
estoppel from questioning the choice of Cebu City as the venue. The
decision of the Court of Appeals was set aside.

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MERRILL LYNCH FUTURES, INC.

Civpro/rule 2 & 3/mpperez

(i.e., 'an entity which, not being a broker, furnishes advice on

ISSUE: WON the petitioner has the legal capacity to sue.

spouses and thereafter sought to collect the balance, US

exported by ITEC, to their sole customer, the Philippine Long Distance

Civpro/rule 2 & 3/mpperez

4. To facilitate their transactions, ASPAC and PLDT executed a

recovery from defendants in solidum, damages of at least

A foreign corporation doing business in the Philippines may

jurisdiction over the case if it chooses to do so; provided, that the

2. On March 7, 1967, Alfred Hahn executed in favor of BMW a

But on February 16, 1993, in a meeting with a BMW

4. On February 24, 1993, petitioner received confirmation of the

Civpro/rule 2 & 3/mpperez

5. Nonetheless, BMW expressed willingness to continue

trademark and device subsisted, he remained BMW's

advanced by BMW in its motion did not seem to be

LITONJUA GROUP OF COMPANIES, EDDIE LITONJUA and

On August 2, 1996, Vigan again had another breakdown,

6. Litonjuas filed their motion for reconsideration which was

Civpro/rule 2 & 3/mpperez

This case arose from a vehicular collision involving petitioner's

Petitioner filed with the RTC Baguio City a Complaint for

The Complaint prayed that defendants be ordered to pay, jointly

Petitioner and defendant insurer, entered into a compromise

Trial Court dismissed the complaint for damages, after 18 months

Private respondent Holiday Hills Stock and Breeding Farm

Civpro/rule 2 & 3/mpperez

ISSUE: WON the defendants in Civil Case are indispensable parties.

Defendants in Civil Case No. 248-R are not all indispensable

dispute of the parties before the court which is effective,

It is true that all of petitioner's claims in Civil Case No. 248-R is

The other defendants, however, cannot be categorized as

It is easy to see that if any of them had not been impleaded as

Civpro/rule 2 & 3/mpperez

insurer, clearly, is not an indispensable party in Civil Case No.

Petition is granted, CAs ruling is set aside, remanded to trial

On September 28, 1979, Ernesto Dollente executed and delivered

The transaction of Ernesto Dollente, which led to the transfer of

Defendants evidence shows that, on September 8, 1978,

Civpro/rule 2 & 3/mpperez

It would thus seem, considering particularly an adverse and

Civpro/rule 2 & 3/mpperez

PANTRANCO NORTH EXPRESS vs STANDARD INSURANCE

In the afternoon of October 28, 1984, Crispin Gicale was driving

While driving north bound along the National Highway in Talavera,

When the two vehicles were negotiating a curve along the

Crispin reported the incident to the Talavera Police Station and

Standard and Martina, respondents, demanded reimbursement

Petitioners specifically denied the allegations in the complaint and

Trial court favored respondents Standard and Martina, affirmed by

multiplicity of suit and ensures the convenient, speedy and orderly

whether the causes of action arose out of the same or different

Petition is denied. CAs decision is affirmed.

Section 5(d), Rule 2 of the same Rules provides:

SIOK PING TANG vs SUBIC BAY DISTRIBUTION INC

Petitioner is doing business under the name and style of Able

Under the Agreements, respondent, as seller, will sell, deliver or

Section 6.3 of the Distributorship Agreement provides that

The above provision presupposes that the different causes of action

The issue of whether respondents claims shall be lumped together is