DAVID vs.

PARAGAS
FACTS: David, Paragas and Lobrin agreed to venture into a business in Hong
Kong (HK). They created Olympia International, Ltd. (Olympia) under HK
laws.
Olympia became the exclusive general agent in HK of PPIs (Philam Plans
Inc.) preneed plans.
PPI authorized Olympia to accept the premium payments, and to remit the
same, net of commissions, to PPI in the Philippines. The money from HK was
to be remitted through Olympias account in RCBC.
David was tasked to personally remit said amounts to PPI as he was the only
signatory authorized to transact on behalf of Olympia regarding the RCBC
accounts.
As Paragas alleged, the amount remitted by Olympia to RCBC from
September 2001 to May 25, 2002 reached P82,978,543.00, representing the
total net earnings from the preneed plans.
In 2002, the state of affairs among the partners went sour upon Lobrins
discovery that David failed to remit to PPI considerable amount of cash.
In a meeting held on June 1, 2002 in HK, David tried to explain his side, but
no settlement was reached.
Later, Lobrin discovered that only P19,302,902.13 remained of the
P82,978,543.00 remitted from HK to the RCBC account. As the Chairperson of
Olympias Board of Directors (BOD), he demanded the return of the entire
P82,978,543.00.
On June 17, 2002, the BOD stripped David of his position as a director. It then
informed RCBC of his removal. In another letter, it also instructed RCBC to
prohibit any transaction regarding the funds or their withdrawal therefrom
pending the determination of their rightful owner/s.
Constrained by these circumstances, David filed a complaint for Declaratory
Relief, Sum of Money and Damages before the RTC. He insisted on his
entitlement to the commissions due in his capacity as Principal Agent of PPI;
that RCBC be ordered to recognize no other signatory relative to the said
deposits except him; and that Paragas, Lobrin and Datoy be held liable in an
amount not less than P20,000,000.00, representing the missing amount

and/or unauthorized disbursements from the funds of Olympia, plus the

payment of moral damages, exemplary damages and attorneys fees.
Paragas and Lobrin filed their answers with several compulsory
counterclaims.
David then filed the supplemental complaint, with a manifestation that an
amicable settlement was struck with Lobrin and Datoy whereby they agreed
to withdraw the complaint and counterclaims against each other. Lobrin and
Olympia through their counsel, confirmed they had arrived at a compromise.
The agreement clearly stated that Lobrin was acting on Olympias behalf, on
the basis of a resolution passed during the board meeting.
David and Lobrin filed the Joint Omnibus Motion to formally inform the RTC of
the compromise agreement.
Paragas questioned the existence of the cited BOD resolution granting Lobrin
the authority to settle the case, as well as the validity of the agreement
through an affidavit duly authenticated by the Philippine Consul, Domingo
Lucinario, Jr. He pointed to the fact that Olympia, as an entity, was never a
party in the controversy.
The RTC granted Davids Motion to Admit the Supplemental Complaint and
approved the compromise agreement.
Paragas moved for reconsideration, claiming that although the parties had
the prerogative to settle their differences amicably, the intrinsic and extrinsic
validity of the compromise agreement, as well as its basis, may be
questioned if illicit and unlawful. RTC denied the motion of Paragas.
Paragas elevated the issue to the CA via a petition for certiorari under Rule
65 of the Rules of Court.
In its decision, the CA reversed the RTCs approval of the compromise
agreement. It explained that the agreement entered into by David, Lobrin
and Datoy was invalid for two reasons: First, the agreement was between
David and Olympia, which was not a party in the case; and second, assuming
that Olympia could be considered a party, there was no showing that the
signatory had the authority from Olympia or from the other parties being
sued to enter into a compromise.

Issue 1: Sabi ni DAVID, mali daw yung CA in reversing the ruling of the RTC
on the Approval of the compromise agreement BECAUSE ang MR ni Paragas
ay for the denial of the motion for reconsideration ONLY by the RTC
Issue 2: Further, sabi ni DAVID, he was denied daw due process when CA
annulled the compromise agreement based on UNSUBSTANTIAL
ALLEGATIONS OF FACT na wala daw nangyaring Board meeting nagbigay ng
authority kay Lobrin to settle in behalf of OLYMPIA
Ruling as to issue #1: The CA did not exceed its jurisdiction in modifying the
order of the RTC regarding the compromise agreement. In countless cases,
the Court has allowed the consideration of other grounds or matters not
raised or assigned as errors.
While a party is required to indicate in his brief an assignment of errors and
only those assigned shall be considered by the appellate court in deciding
the case, appellate courts have ample authority to rule on matters not
assigned as errors in an appeal if these are indispensable or necessary to the
just resolution of the pleaded issues. The following grounds are:
1) grounds affecting jurisdiction over the subject matter;
2) matters which are evidently plain or clerical errors within the
contemplation of the law;
3) matters the consideration of which is necessary in arriving at a just
decision and complete resolution of the case or to serve the interest of
justice or to avoid dispensing piecemeal justice;
4) matters of record which were raised in the trial court and which have
some bearing on the issue submitted which the parties failed to raise or
which the lower court ignored;
5) matters closely related to an error assigned; and
6) matters upon which the determination of a question properly assigned is
dependent. [Emphases supplied]
In this case, while it is true that Paragas petition for certiorari before the CA
only assailed the subsequent order of the RTC denying his August 15, 2003
Motion for Reconsideration, he did pray in the said motion for reconsideration
that it set aside and reverse its approval of the Joint Omnibus Motion. The
prayer reads:

WHEREFORE, it is respectfully prayed of this Honorable Court that the Order

dated 21 July 2003 be MODIFIED to SET ASIDE and REVERSE the approval of
the Joint Omnibus Motion dated 15 May 2003 and a new one be issued
DENYING said motion.
Obviously, the resolution of his motion for reconsideration necessarily
involved the July 21, 2003 Order of the RTC as it was indispensable and
inextricably linked with the September 30, 2003 Order being assailed.
Ruling as to issue #2:
The CA did not err in annulling the compromise agreement.
A careful reading of the assailed CA decision reveals that it did not merely
rely on the claims of Paragas. What the CA did was to analyze and appreciate
the circumstances behind the compromise agreement. In revisiting and
delving deep into the records, the Court indeed agrees with the CA that the
RTC gravely abused its discretion in approving the agreement for the
following reasons:
First, the subject compromise agreement could not be the basis of the
withdrawal of the respective complaint and counterclaims of the parties for it
was entered into by David with a nonparty in the proceedings (which is ung
corporation na si OLYMPIA). Even if the Court interprets that the RTC
approved the underlying agreement to withdraw the claims and
counterclaims between the parties, the terms and conditions of the subject
compromise agreement cannot cover the interests of Olympia, being a
nonparty to the suit.
Second, the RTC had no authority to approve the said compromise
agreement because Olympia was not impleaded as a party, although its
participation was indispensable to the resolution of the entire controversy.
Same; A compromise agreement could not be the basis of
dismissal/withdrawal of a complaint and counterclaims if it was entered into
with a nonparty to the suit.
A judicially approved compromise agreement, in order to be binding upon the
litigants with the force and effect of a judgment, must have been executed
by them. In this case, the compromise agreement was signed by David in his
capacity as the complainant in the civil case, and Olympia, through Lobrin as
its agent.

Datoy and Paragas never appeared to have agreed to such terms for it was
Olympia, despite not being a party to the civil case, which was a party to the
agreement. Despite this, David claims that the concessions(compromise)
were made by Olympia on behalf of the nonsignatory parties (Datoy and
Paragas) and such should be binding on them.
David must note that Olympia is a separate being, or at least should be
treated as one distinct from the personalities of its owners, partners or even
directors. On that basis, Olympias interest should be detached from those of
directors Paragas, Lobrin, Datoy, and even David. Their (individual directors)
interest are merely indirect, contingent and inchoate. Because Olympias
involvement in the compromise was not the same as that of the other parties
(separate and distinct personality) who were, in the first place, never part of
it, the compromise agreement could not have the force and effect of a
judgment binding upon the litigants, specifically Datoy and Paragas.
Conversely, the judicially approved withdrawal of the claims on the basis of
that compromise could not be given effect for such agreement did not
concern the parties in the civil case.
Obviously, the argument that they executed the compromise agreement in
their personal capacities does not hold water. For even if the Court looks
closer at the concessions made, many provisions deal with Olympias
interests instead of the personal claims they have against one another. A
review of the Joint Omnibus Motion would also show that the compromise
agreement dealt more with David and Olympia. Given this, Olympia did not
have the standing in court to enter into a compromise agreement unless
impleaded as a party. The RTC did not have the authority either to determine
Olympias rights and obligations. Furthermore, to allow the compromise
agreement to stand is to deprive Olympia of its properties and interest for it
was never shown that the person who signed the agreement on its behalf
had any authority to do so.
More importantly, Lobrin, who signed the compromise agreement, failed to
satisfactorily prove his authority to bind Olympia. The CA observed, and this
Court agrees, that the board resolution allegedly granting authority to
Lobrin to enter into a compromise agreement on behalf of Olympia was more
of a part of the minutes of a board meeting containing a proposal to settle
the case with David or to negotiate a settlement. Considering these facts,
the RTC should have denied the Joint Omnibus Motion and disapproved the
compromise agreement. In fine, Olympia was not shown to have properly
consented to the agreement, for the rule is, a corporation can only act

through its Board of Directors or anyone with the authority of the latter. To
allow the compromise agreement to stand is to deprive Olympia of its
properties and interest for it was never shown that Lobrin had the necessary
authority to sign the agreement on Olympias behalf.

Same; same; Olympia is an indispensable Party

An indispensable party is a partyininterest without whom no final
determination can be had of an action, and who shall be joined either as
plaintiffs or defendants. The joinder of indispensable parties is mandatory.
The presence of indispensable parties is necessary to vest the court with
jurisdiction. Considering that David was asking for judicial determination of
his rights in Olympia, it is without a doubt, an indispensable party as it
stands to be injured or benefited by the outcome of the main proceeding. It
has such an interest in the controversy that a final decree would necessarily
affect its rights. Not having been impleaded, Olympia cannot be prejudiced
by any judgment where its interests and properties are adjudicated in favor
of another. It (Olympia) cannot be said either to have consented to the
judicial approval of the compromise, much less waived substantial rights,
because it was never a party in the proceedings.
This lack of authority on the part of the RTC which flows from the absence of
Olympia, being an indispensable party, necessarily negates any binding
effect of the subject judiciallyapproved compromise agreement.
Time and again, the Court has held that the absence of an indispensable
party renders all subsequent actions of the court null and void for want of
authority to act, not only as to the absent parties but even to those present.

G.R. No. 172623.March 3, 2010.

COMMISSION ON APPOINTMENTS, represented herein by its Secretary HON.
ARTURO L. TIU, petitioner, vs. CELSO M. PALER, respondent

FACTS:
Respondent Celso M. Paler was a Supervising Legislative Staff Officer II with
the Technical Support Service of the Commission on Appointments. He
submitted a request for vacation leave for 74 working days from August 1,
2003 to November 14, 2003. In a memorandum dated April 22, 2003, Ramon
C. Nghuatco, Director III of Technical Support Service, submitted to the
Commission Secretary his comments/recommendation on Paler's application.
Since he already had an approved leave from June 9 to July 30, 2003, Paler
left for the United States on June 8, 2003, without verifying whether his
application for leave (for August 1 November 14, 2003) was approved or
denied.
September 16, 2003, the Commission Chairman informed Paler that he was
being dropped from the roll of employees effective said date, due to his
continuous 30-day absence without leave and in accordance with Section 63,
Civil Service Commission (CSC) Memorandum Circular No. 14, s. 1999. Paler's
son received the letter on September 23, 2003. Paler moved for
reconsideration but this was denied on February 20, 2004, on the ground
that it was filed beyond the 15-day reglementary period. The denial was
received by Paler's son on March 18, 2004.
On appeal, the Civil Service Commission reversed and set aside the
Commission Chairman's decision. It is directed that Celso M. Paler be
immediately reinstated as Committee Secretary of the Commission on
Appointments and shall be considered to be on leave with pay until the
exhaustion of his vacation leave credits. The Commission filed a motion for
reconsideration but this was denied.
This constrained petitioner to file with the Court of Appeals a petition for
review under Rule 43 of the Rules of Court. The decision dated December 20,
2005 provided: Since Paler had in the meantime already reached the
compulsory age of retirement on July 28, 2005 and was no longer entitled to
reinstatement. The CA affirmed with modification CSC's decision that the
order of reinstatement is DELETED. In lieu thereof, Paler should be awarded
back wages, retirement benefits and other privileges that accrued to him
from the time of his dismissal up to the date of his retirement.
Petitioner filed a motion for reconsideration but this was denied by the CA in
the assailed resolution dated April 27, 2005. Hence, this petition. In his

comment, Paler, aside from arguing that the CA did not commit any error in
sustaining the CSC resolutions, also assails Atty. Arturo L. Tiu's authority to
file the petition and sign the verification and certification of non-forum
shopping on behalf of the Commission Chairman. The CSC, represented by
the Office of the Solicitor General (OSG), maintains the correctness of the
CSC and CA judgments.
ISSUE:
WON the Commission Secretary (Atty. Tiu) can file the petition and sign the
verification and certification of non-forum shopping in behalf of the
Commission Chairman.
HELD:
There was no need for the chairman of the commission himself to sign the
verification; With regard to the certification of non-forum shopping, the
established rule is that it must be executed by the plaintiff or any of the
principal parties and not by counsel.The petitioner in this case is the
Commission on Appointments, a government entity created by the
Constitution, and headed by its Chairman. There was no need for the
Chairman himself to sign the verification. Its representative, lawyer or any
person who personally knew the truth of the facts alleged in the petition
could sign the verification. With regard, however, to the certification of nonforum shopping, the established rule is that it must be executed by the
plaintiff or any of the principal parties and not by counsel.

Mercado vs. Court of Appeals

The private respondents, referred to as the Bulaong Group, had for many
years been individual lessees of stalls in the public market of Baliuag,
Bulacan; from 1956 to 1972. The market was destroyed by fire on February
17, 1956. The members of the Bulaong Group constructed new stalls therein
at their expense and they thereafter paid rentals thereon to the Municipality
of Baliuag. Bulaong group later sub-leased their individual stalls to other
persons known as the Mercado group. While Mercado Group had been in

possession of the market stalls for some months, as sub-lessees of the

Bulaong Group, the municipal officials of Baliuag cancelled the long standing
leases of the Bulaong Group and declared the persons comprising the
Mercado Group as the rightful lessees of the stalls in question, in substitution
of the former. Said cancellation is based accordingly to Municipal Ordinance
No. 14, which prohibited the sub-leasing of stalls by the lessees. The Bulaong
group filed individual complaints with the Court of First Instance seeking
recovery of their stalls from the Mercado Group as well as damages anchored
on their claimed ownership of the stalls constructed by them at their own
expense, and their resulting right, as such owners, to sub-lease the stalls,
and necessarily, to recover them from any person withholding possession
thereof from them. Answers were filed in behalf of the defendants, including
the Municipality of Baliuag after which a pre-trial was held in the course of
which the parties stipulated upon practically all the facts. The Mercado Group
thereafter filed motions for summary judgment, asserting that in light of the
admissions made at the pre-trial and in the pleadings, no issue remained
under genuine controversion. The Bulaong Group filed an opposition
requiring for the formal submission of evidence for the claim for actual
damages. The latter then filed a "Motion to Accept Affidavits and
Photographs as Annexes to the Opposition to the Motion for Summary
Judgment," which affidavits and photographs tended to establish the
character and value of the improvements they had introduced in the market
stalls. No objection whatever was presented to this motion by the Mercado
Group and the affidavits and photographs were admitted by the Trial Court.
The Mercado Group never asked, either in their motion for summary
judgment or at any time after having received a copy of the motion to accept
affidavits and photographs, etc., that a hearing be scheduled for the
reception of evidence on the issue of the Bulaong Group's claimed actual
damages.
Court of First Instance rendered a summary judgment in all the cases. 3 It
rejected the claim of the Municipality of Baliuag that it had automatically
acquired ownership of the new stalls constructed after the old stalls had
been razed by fire, declaring the members of the Bulaong Group to be
builders in good faith, entitled to retain possession of the stalls respectively
put up by them until and unless indemnified for the value thereof. The
decision also declared that the Bulaong and Mercado Groups had executed
the sub-letting agreements with full awareness that they were thereby
violating Ordinance No. 14; they were thus in pari delicto, and hence had no
cause of action one against the other and no right to recover whatever had

been given or demand performance of anything undertaken. The judgment

therefore decreed (1) the annulment of the leases between the Municipality
and the individuals comprising the Mercado Group (the defendants who had
taken over the original leases of the Bulaong Group); and (2) the payment to
the individual members of the Bulaong Group (the plaintiffs) of the stated,
adjudicated value of the stalls.
The Mercado Group and the Municipality filed on November 14, 1975,
motions for reconsideration of the summary judgment, notice of which had
been served on them on November 3, 1975. These were denied, and notice
of the order of denial was received by them on December 18, 1975. On
January 7, 1976, the Mercado Group filed a notice of appeal, an appeal bond
and a motion for extension of time to file their record on appeal. But by
Order dated January 9, 1976, the Trial Court directed inter alia the execution
of the judgment, at the instance of the Bulaong Group and despite the
opposition of that Mercado Group, adjudging that its decision had become
final because the appeal documents had "not been seasonably filed." The
writ was issued, and the Mercado Group's motion to quash the same and to
re-open the case was denied.
The Group went to the Court of Appeals, instituting in that court a special
civil action of certiorari and prohibition 4 "to annul that portion of the
summary judgment . . awarding damages to private respondents (the
Bulaong Group), and to restrain the respondent Judge and the Provincial
Sheriff of Bulacan from enforcing the same. CA affirmed the decision.
Issue: Whether or not the special civil action of certiorari may be properly
resorted to by a party aggrieved by a judgment of a Regional Trial Court (or
Court of First Instance)which became final because not appealed within the
reglementary period to bring about its reversal on the ground that the
Court had applied the wrong provision of the Civil Code, and had rendered
summary judgment at the instance of the defendants without receiving
evidence on the issue of damages allegedly suffered by the plaintiffs,
thereby denying them due process.
Held: The Appellate Court's computation of the period is correct, and is in
accord with Section 3, Rule 41 of the Rules of Court providing that from the
30-day reglementary period of appeal shall be deducted the "time during
which a motion to set aside the judgment or order or for a new trial has been
pending. the petitioners have made no serious effort to explain and excuse
the tardiness of their appeal. What they have done and continue to do is to

insist that the special civil action of certiorari is in truth the proper remedy
because the judgment is void. The judgment is void, they say, because they
were denied due process, as "respondent Judge granted exorbitant damages,
without reliable proof, and without giving petitioners the chance to prove
their claim that private respondents are not entitled to damages, and
conceding that they are, the damages are much lower than that awarded by
the respondent Judge." According to them, since the matter of damages was
clearly a controverted fact, the Court had absolutely no jurisdiction to
determine it on mere affidavits.
There can be no debate about the proposition that under the law, the Trial
Court validly acquired jurisdiction not only over the persons of the parties but
also over the subject matter of the actions at bar. The parties composing the
Mercado Group cannot dispute this; they recognized the Court's competence
when they filed their answers to the complaints without questioning the
Court's jurisdiction of the subject-matter; indeed neither at that time nor at
any other time thereafter did any one of them ever raise the question.
Now, jurisdiction, once acquired, is not lost by any error in the exercise
thereof that might subsequently be committed by the court. Where there is
jurisdiction over the subject matter, the decision of all other questions arising
in the case is but an exercise of that jurisdiction . 8 And when a court
exercises its jurisdiction, an error committed while engaged in that exercise
does not deprive it of the jurisdiction being exercise when the error is
committed. The error does not go to the Trial Court's jurisdiction. It is an error
in the exercise of jurisdiction, which may be corrected by the ordinary
recourse of appeal, not by the extraordinary remedy of certiorari. It is an
error that in the premises can no longer be set aright
The summary judgment rendered by respondent Judge on October 24, 1975
was not an interlocutory disposition or order but a final judgment within the
meaning of Section 2, Rule 41 of the Rules of Court. By that summary
judgment the Court finally disposed of the pending action, leaving nothing
more to be done by it with respect to the merits, thus putting an end to the
litigation as its level .
The remedy available to the petitioners against such a final judgment, as
repeatedly stated, was an appeal in accordance with the aforementioned
Rule 41 of the Rules of Court 18 But as observed in an analogous case
recently resolved by this Court

NAVARRO v ESCOBIDO
G.R. No. 153788 November 27, 2009
SECOND DIVISION (BRION, J.:)
FACTS:
1. GLENN O. GO, as manager of KARGO ENTERPRISES (lessor), and
ROGER NAVARRO (lessee) entered into a LEASE CONTRACT WITH
OPTION TO PURCHASE a motor vehicle.
2. However, a number of checks delivered by NAVARRO as payment for
rentals were dishonored due to insufficient funds.
3. Several demands were made to NAVARRO either to pay or to return
the said motor vehicle. All were left unheeded.
4. Thus, KAREN O. GO, registered owner of KARGO and wife of GLENN O.
GO, then filed complaint(s) against NAVARRO with an application for
the immediate delivery of the said motor vehicle pending final
determination of the case, for which the RTC issued writs of replevin.
NAVARROs ANSWER: complaints stated no cause of action, since Karen Go
was not
a party to the Lease Agreements with Option to Purchase (collectively, the
lease
agreements) the actionable documents on which the complaints were based
RTCs RULING: It first dismissed the complaints on the ground of lack of
cause of

action as contented by NAVARRO, BUT it later set aside the order of dismissal
as it
acted on the presumption that GLENN GOs leasing business is a conjugal
property. HENCE, it ruled that KAREN GO had sufficient interest in his leasing
business to file the action against NAVARRO. However, the RTC held that
Karen Go
should have included her husband, Glenn Go, in the complaint based on
Section 4,
Rule 3 of the Rules of Court.
5. NAVARRO filed a petition for certiorari before the CA.
NAVARROs CONTENTION: a complaint which failed to state a cause of
action could
not be converted into one with a cause of action by mere amendment or
supplemental pleading. HENCE, the RTC committed grave abuse of
discretion when
it reconsidered the dismissal of the case and directed Karen Go to amend her
complaints by including her husband Glenn Go as co-plaintiff.
CAs RULING: Petition denied.
6. Hence, this petition for certiorari before the SC.
NAVARROs CONTENTION:
(1) even if the lease agreements were in the name of Kargo Enterprises,
since it did
not have the requisite juridical personality to sue [since it is a sole
proprietorship will be discussed in the ruling], the actual parties to the
agreement are himself and Glenn Go. Since it was Karen Go who filed the
complaints and not Glenn Go, she was not a real party-in-interest and the
complaints failed to state a cause of action

(2) [since] a complaint which does not state a cause of action cannot be
converted
into one with a cause of action by a mere amendment or a supplemental
pleading. In effect, the lower court created a cause of action for Karen Go
when there was none at the time she filed the complaints.
(3) the lower court gravely abused its discretion when it assumed that the
leased vehicles are part of the conjugal property of Glenn and Karen Go.
Since Karen Go is the registered owner of Kargo Enterprises, the vehicles
subject
of the complaint are her paraphernal properties
KAREN GOs CONTENTION:
(1) even if the lease agreements were signed only by her husband, Glenn Go;
she is
the owner of Kargo Enterprises and Glenn Go signed the lease agreements
merely as the manager of Kargo Enterprises
(2) Navarros insistence that Kargo Enterprises is Karen Gos paraphernal
property is
without basis. Based on the law and jurisprudence on the matter, all property
acquired during the marriage is presumed to be conjugal property
(3) when the RTC ordered her to include her husband as co-plaintiff, this was
merely
to comply with the rule that spouses should sue jointly, and was not meant
to
cure the complaints lack of cause of action.
ISSUE/S:
(1) WON Karen Go is the real party-in-interest- YES!
XXX The central factor in appreciating the issues presented in this case is

the business name Kargo Enterprises. The name appears in the title of the
Complaint where the plaintiff was identified as KAREN T. GO doing business
under the name KARGO ENTERPRISES, and this identification was repeated
in the first paragraph of the Complaint. XXX Significantly, the Complaint
specifies and attaches as its integral part the Lease Agreement that
underlies the transaction between the plaintiff and the defendant. Again, the
name KARGO ENTERPRISES entered the picture as this Lease Agreement
provides:
This agreement, made and entered into by and between:
GLENN O. GO, of legal age, married, with post office address at xxx,
herein referred to as the LESSOR-SELLER; representing KARGO
ENTERPRISES as its Manager,
xxx
thus, expressly pointing to KARGO ENTERPRISES as the principal that Glenn
O. Go represented. In other words, by the express terms of this Lease
Agreement, Glenn Go did sign the agreement only as the manager of Kargo
Enterprises and the latter is clearly the real party to the lease agreements.
As Navarro correctly points out, Kargo Enterprises is a sole proprietorship,
which is neither a natural person, nor a juridical person, as defined by Article
44 of the Civil Code:
Art. 44. The following are juridical persons:
(1) The State and its political subdivisions;
(2) Other corporations, institutions and entities for public interest or purpose,
created by law; their personality begins as soon as they have been
constituted according to law;

(3) Corporations, partnerships and associations for private interest or

purpose to which the law grants a juridical personality, separate and
distinct from that of each shareholder, partner or member.
Thus, pursuant to Section 1, Rule 3 of the Rules, Kargo Enterprises cannot
be a party to a civil action. XXX As the registered owner of Kargo
Enterprises, Karen Go is the party who will directly benefit from or
be injured [Read Sec 2 Rule 3 ROC] by a judgment in this case. Thus,
contrary to Navarros contention, Karen Go is the real party-ininterest,
and it is legally incorrect to say that her Complaint does not state
a cause of action because her name did not appear in the Lease Agreement
that her husband signed in behalf of Kargo Enterprises. XXX
(2) WON the leasing business is a paraphernal property of
KAREN GO- NO!
The registration of the trade name in the name of one person a
woman does not necessarily lead to the conclusion that the trade
name as a property is hers alone, particularly when the woman is
married. By law, all property acquired during the marriage, whether the
acquisition appears to have been made, contracted or registered in the name
of one or both spouses, is presumed to be conjugal unless the contrary is
proved. XXX Glenn and Karen Go are effectively co-owners of Kargo
Enterprises and the properties registered under this name; hence,
both have an equal right to seek possession of these properties. XXX
(3) WON the RTC gravely abused its discretion when it ordered
to set aside the dismissal order and to amend the complaint in
order to include GLENN O. GO as co-plaintiff- NO!

XXX we hold that since Glenn Go is not strictly an indispensable party

[because of ruling in ISSUE NO. 2] in the action to recover possession of the
leased vehicles, he only needs to be impleaded as a pro-forma party to the
suit, based on Section 4, Rule 4 of the Rules, which states:
Section 4. Spouses as parties. Husband and wife shall sue or be sued jointly,
except as provided by law.
XXX
Even assuming that Glenn Go is an indispensable party to the action, we
have held in a number of cases[26] that the misjoinder or non-joinder of
indispensable parties in a complaint is not a ground for dismissal of action
[Read Sec 11 Rule 3]. As we stated in Macababbad v. Masirag:
XXX
In Domingo v. Scheer, this Court held that the proper remedy when a
party is left out is to implead the indispensable party at any stage of the
action. The court, either motu proprio or upon the motion of a party, may
order the inclusion of the indispensable party or give the plaintiff
opportunity to amend his complaint in order to include indispensable
parties. If the plaintiff to whom the order to include the indispensable party
is directed refuses to comply with the order of the court, the complaint may
be dismissed upon motion of the defendant or upon the court's own
motion. Only upon unjustified failure or refusal to obey the order to include
or
to amend is the action dismissed.
In these lights, the RTC Order XXX requiring plaintiff Karen Go to join her
husband as a party plaintiff is fully in order.

041.Benjamin Bautista vs. Shirley Unangst and other Unknown Persons

G.R. No. 173002, July 4, 2008
PONENTE: REYES, R.T., J.:

Doctrine:
xxxxx..
The right to appeal is purely statutory right. Not being a natural right or a
part of due process, the right to appeal may be exercised only in the manner
and in accordance with the rules provided therefor. For this reason, payment
of the full amount of the appellate court docket fees and other lawful fees
within the reglementary period is mandatory and jurisdictional.
Nevertheless, as this
Court ruled in Aranas vs. Endona, the strict application of the jurisdictional
nature of the above rule on payment of appellate docket fees may be
mitigated under exceptional circumstances to better serve the interest of
justice. It is always within the power of this court to suspend its own rules,
or to except a particular case from their operation, whenever the purposes of
justice require it.

XXX. , the Court relax the rigid application of the ruler of procedure to afford
the parties the opportunity to fully ventilate their cases on the merits. This is
in line with the time-honored principle that cases shoulc be decided only
after giving all the parties the chance to argue their causes and defenses.
For it, is far better to dispose of a case on the merit which is the primordial
end, rather than on a technicality, if it be the case, that may result in justice.
The emerging trend in the rulings of this Court is to afford every party-litigant
the amplest opportunity for the proper and just determination of his case,
free from constraints of technicalities.XXX.
Technicality and procedural imperfections should thus not serve as bases of
decisions. In that way, the ends of justice would better be served. For indeed,
the general objective of the procedure is to facilitate the application of
justice to the rival claims of the contending parties, bearing always in mind
that procedure is not to hinder but promote the administration of justice.

FACTS:
* In Nov. 15, 1996, Hamilton Salak rented a car to GAB rent-a car for 3
consecutive days at Php1,000/day from owner of GAB, petitioner -Benjamin
BAUTISTA. Salak failed to return the car after three (3) days, prompting
petitioner to file a complaint for estafa, violation of BP bldg. 22 and
carnapping.

* On Feb. 2, 1997 Salak and his common-law wife, Shirley UNANGST,

respondent,were arrested by the officers of Crime Investigation Service
Group of the PNP while riding the rented car.

* Petioner- Bautista demanded from Salak at CISG Office payment of PHP

232,372 as car rental fees, fees incurred in locating the car and attorneys
fees, capital gains tax and oither incidental expenses.

* Salak and the wife Unangst expressed willingness to pay but since they
were then short on

cash, theyproposed to sell to BAUTISTA a house and lot titled in the name of
Shirley Unangst0-respondent, H&L was mortgage to Jojo Lee. Cynthia the
wife of Bautista welcome the proposal and agreed to pay the mortgage loan
to Lee at PHP 295,000 which was to be publicly auctioned at Feb. 17, 1997.

* Written agreement was made to formalize the amicable settlement,

Cynthia, Salak, Unangst stipulated that respondent would sell, subject to
repurchase her residential property in favor of Cynthia for PHP 525, 372.00
breakdowns;(a) Php 295k amount paid by Cynthia to Lee to release the
mortgageproperty ; (b) Php 232, 372.00 amount due to GAB.

* Also executed a separate Deed of Sale with Right to Repurchase with the
following terms:
(1) vendor respondent shall pay capital gains tax, current real estate tax
and utility bills;
(2) fails to repurchase within 30 days from date of the deed, respondents
must immediately vacate,
And assign it without judicial order.
(3) refusal entitle petitioner to take immediate possession of the property.

* Respodent failed to repurchase , on June 5, 1998 petitioner filed against

Unangst before the RTC of Olongapo City:

(a)

Specific Performance/ or recovery of possession.

(b)

Sum of Money

(c)

Consolidation of ownership

(d)

damages

*June 16, 1998, complaint was amended added prayer for CONSOLIDATION
OF OWNERSHIP pursuant to Art. 1607 of Civil Code. Respondent controverted
the allegation and averred in their Answer plaintiff have NO CAUSE OF
ACTION, that DOS was signed under Duress & intimidation employed by
petitioner or if freely given contract of Sale was Simulatede & Fictitious, that
sale was as Equitable Mortgage, that arrear in car rental is only Php 90K and
that instanty petition is premature as plaintif have not yet consolidated
ownership of property and also made a COUNTERCLAIM against petitioner
for moral damages and attorneys fees.

* July 29, 2004 The RTC ruled in favor of Petitioner Bautista.

*Respondents failed to interpose a timely appeal. However, on September

10, 2004, respondent Unangst filed a petition for relief pursuant to Section
38 of the 1997 Rules on Civil Procedure. She argued that she learned of
thedecision of the RTC only on September 6, 2004 when she received a copy
of the motion for execution filed by petitioner.

*Petitioner, on the other hand, moved for the dismissal of respondents

petition on the ground that the latter paid an insufficient sum of P200.00 as
docket fees, which was suppose to be Php 1,715.00. Respondent Unangst
argued that it initially paid P200.00 as docket fees as this was the amount
assessed by theClerk of Court of the RTC.

*Nevertheless, the correct amount was subsequently paid by said

respondent on February 22, 2005.
The RTC granted the petition for relief. Subsequently, it directed respondents
to file a notice of appeal within twenty-four (24) hours from receipt of the
order. Accordingly, on February 23, 2005, respondents filed their notice of
appeal.

*CA found that the respondents had perfected an appeal via petition for relief
to be able to appeal judgment even when the fees were paid beyond the

period prescribed to bring such action. It also reversed the decision of the
RTC finding the Deed of Sale with Right to Repurchase a document of sale
executed by the respondent in favor of the petitioner and in further holding
such contract as one of equitable mortgage (Sales issue).

ISSUE(S): WON,CA committed grave error in finding that the respondent

perfected an appeal via Petition for Relief To be Able to Appeal Judgement
even when the proper docket fees were paid beyond the period prescribed to
bring such action.

HELD: No. CA did not commit grave error.

On this issue, respondent counters that the belated payment of proper

docket fees was not due to their fault but to theimproper assessment by the
Clerk of Court. Respondent asserts the ruling of the CA that the court may
extend the time for the payment of the docket fees if there is a
justifiable reason for the failure to pay the correct amount. Moreover,
respondent argues that petitioner failed to contest the RTC Order dated
February 21, 2004 that allowed the payment of supplementary docket fees.
Petitioner failed to file a motion for reconsideration or a petition for certiorari
to the higher court to question said order.

We agree with respondents. Their failure to pay the correct amount of docket
fees was due to a justifiable reason.

The right to appeal is a purely statutory right. Not being a natural right or a
part of due process, the right to appeal may beexercised only in the manner
and in accordance with the rules provided therefor.For this reason, payment
of the full amount of the appellate court docket and other lawful fees within
the reglementary period is mandatory and jurisdictional.

Nevertheless, as this Court ruled in Aranas v. Endona, the strict application of

the jurisdictional nature of the above rule on payment of appellate docket
fees may be mitigated under exceptional circumstances to better serve the
interest of justice. It is always within the power of this Court to suspend its
own rules, or to except a particular case from their operation, whenever the
purposes of justice require it.

In not a few instances, the Court relaxed the rigid application of the rules of
procedure to afford the parties the opportunity to fully ventilate their cases
on the merits. This is in line with the time-honored principle that cases
should be decided only after giving all parties the chance to argue their
causes and defenses. For, it is far better to dispose of a case on the merit
which is a primordial end, rather than on a technicality, if it be the case that
may result in injustice. The emerging trend in the rulings of this Court is to
afford every party-litigant the amplest opportunity for the proper and just
determination of his
cause, free from the constraints of technicalities.
Considering the foregoing, there is a need to suspend the strict application of
the rules so that the petitioners would be able to fully and finally prosecute
their claim on the merits at the appellate level rather than fail to secure
justice on a technicality, for, indeed, the general objective of procedure is to
facilitate the application of justice to the rival claims of contending parties,
bearing always in mind that procedure is not to hinder but to promote the
administration of justice.

Wherefore, petition is denied for lack of merit.

De Castro v. CA
July 18, 2002
G.R. No. 115838

Doctrine: Solidarity does not make a solidary obligor an indispensable party

in a suit filed by the creditor.Thus, the Court has ruled in Operators
Incorporated vs. American Biscuit Co., Inc. thatx x x solidarity does not
make a solidary obligor an indispensable party in a suit filed by the creditor.
Article 1216 of the Civil Code says that the creditor may proceed against
anyone of the solidary debtors or some or all of them simultaneously.
Nature of the case : Petition for Review on Certiorari seeking to annul the
Decision of the Court of Appeals dated May 4, 1994 in CA-G.R. CV No.
37996, which affirmed in toto the decision of the Regional Trial Court of
Quezon City, Branch 80, in Civil Case No. Q-89-2631. The trial court disposed
as follows:
WHEREFORE, the Court finds defendants Constante and Corazon Amor de
Castro jointly and solidarily liable to plaintiff
Facts: De Catross were co- owners of four lots with their other siblings
.Private respondent Artigo sued petitioners Constante De Castro and Corazon
De Castro to collect the unpaid balance of his broker;s commission from the
petitioners. Artigo was authorized by De Castros act as real estate broker in
the sale of these properties for the amount of P23,000,000.00, five percent
(5%) of which will be given to the agent as commission.The sale of two lots
were consummated and Artigo received from the De Castros a sum of P
48,893 as commission but Artigo felt short changed because according to
him , his total commission should be P352,500.00. Hence Artigo sued De
Castros.
Ruling of the Court of Appeals: The Court of Appeals affirmed in toto the
decision of the trial court.
The Court of Appeals found that Constante authorized Artigo to act as agent
in the sale of two lots
The handwritten authorization letter signed by Constante clearly established
a contract of agency between Constante and Artigo .The Court of Appeals
ruled that Artigos complaint is not dismissible for failure to implead as
indispensable parties the other co-owners of the two lots. The Court of
Appeals explained that it is not necessary to implead the other co-owners
since the action is exclusively based on a contract of agency between Artigo
and Constante.Hence, the instant petition.
The Issue: Whether the complaint merits dismissal for failure to implead
other co-owners as indispensable parties

The De Castros argue that Artigos complaint should have been dismissed for
failure to implead all the co-owners of the two lots. The De Castros claim that
Artigo always knew that the two lots were co-owned by Constante and
Corazon with their other siblings Jose and Carmela whom Constante merely
represented. The De Castros contend that failure to implead such
indispensable parties is fatal to the complaint since Artigo, as agent of all the
four coowners, would be paid with funds co-owned by the four co-owners.
Ruling:
An indispensable party is one whose interest will be affected by the courts
action in the litigation, and without whom no final determination of the case
can be had. The joinder of indispensable parties is mandatory and courts
cannot proceed without their presence. Whenever it appears to the court in
the course of a proceeding that an indispensable party has not been joined,
it is the duty of the court to stop the trial and order the inclusion of such
party.
However, the rule on mandatory joinder of indispensable parties is not
applicable to the instant case.
Constante signed the note as owner and as representative of the other coowners. Under this note, a contract of agency was clearly constituted
between Constante and Artigo. Whether Constante appointed Artigo as
agent, in Constantes individual or representative capacity, or both, the De
Castros cannot seek the dismissal of the case for failure to implead the other
co-owners as indispensable parties. The De Castros admit that the other coowners are solidarily liable under the contract of agency.
Solidarity does not make a solidary obligor an indispensable party in a suit
filed by the creditor.Thus, the Court has ruled in Operators Incorporated vs.
American Biscuit Co., Inc. thatx x x solidarity does not make a solidary
obligor an indispensable party in a suit filed by the creditor. Article 1216 of
the Civil Code says that the creditor may proceed against anyone of the
solidary debtors or some or all of them simultaneously.

Spouses JULITA DE LA CRUZ and FELIPE DE LA CRUZ, petitioners, vs. PEDRO

JOAQUIN, respondent.
G.R. No. 162788; 464 SCRA 576
July 28, 2005

FACTS:
A Complaint was filed by Pedro Joaquin for the recovery of possession and
ownership, the cancellation of title, and damages against Spouses De la Cruz
in RTC Nueva Ecija. Joaquin alleged that he had obtained a loan from them in
the amount of P9,000 payable after five (5) years.

The RTC issued a Decision in favor of Joaquin. The trial court declared that
the parties had entered into a sale with a right of repurchase. It further held
that Joaquin had made a valid tender of payment on two separate occasions
to exercise his right of repurchase. Accordingly, petitioners were required to
reconvey the property upon his payment. CA sustained RTCs Decision, hence
this Petition.

Petitioners assert that the RTCs Decision was invalid for lack of jurisdiction.
They claim that respondent died during the pendency of the case. There

being no substitution by the heirs, the trial court allegedly lacked jurisdiction
over the litigation.

ISSUE: WON the trial court lost jurisdiction over the case upon the death of
Pedro Joaquin

HELD: NO. Petition is DENIED and the assailed Decision and Resolution are
AFFIRMED.

As a rule, when a party to a pending action dies and the claim is not
extinguished the Rules of Court require a substitution of the deceased
(Section 16 of Rule 3).

The rule on the substitution of parties was crafted to protect every partys
right to due process. The estate of the deceased party will continue to be
properly represented in the suit through the duly appointed legal
representative. Moreover, no adjudication can be made against the
successor of the deceased if the fundamental right to a day in court is
denied. The Court has nullified not only trial proceedings conducted without
the appearance of the legal representatives of the deceased, but also the
resulting judgments. In those instances, the courts acquired no jurisdiction
over the persons of the legal representatives or the heirs upon whom no
judgment was binding.

This general rule notwithstanding, a formal substitution by heirs is not

necessary when they themselves voluntarily appear, participate in the case,
and present evidence in defense of the deceased. These actions negate any
claim that the right to due process was violated.

Strictly speaking, the rule on the substitution by heirs is not a matter of

jurisdiction, but a requirement of due process. Thus, when due process is not
violated, as when the right of the representative or heir is recognized and

protected, noncompliance or belated formal compliance with the Rules

cannot affect the validity of a promulgated decision. Mere failure to
substitute for a deceased plaintiff is not a sufficient ground to nullify a trial
courts decision. The alleging party must prove that there was an undeniable
violation of due process.

The records of the present case contain a Motion for Substitution of Party
Plaintiff dated February 15, 2002, filed before the CA. Evidently, the heirs of
Pedro Joaquin voluntary appeared and participated in the case. We stress
that the appellate court had ordered his legal representatives to appear and
substitute for him. The substitution even on appeal had been ordered
correctly. In all proceedings, the legal representatives must appear to protect
the interests of the deceased. After the rendition of judgment, further
proceedings may be held, such as a motion for reconsideration or a new trial,
an appeal, or an execution.

Considering the foregoing circumstances, the Motion for Substitution may be

deemed to have been granted; and the heirs, to have substituted for the
deceased, Pedro Joaquin. There being no violation of due process, the issue
of substitution cannot be upheld as a ground to nullify the trial courts
Decision.

PACIFIC CONSULTANTS vs SCHONFELD

FACTS:

Respondent Klaus K. Schonfeld is a Canadian citizen and was a resident

of New Westminster, British Columbia, Canada. Pacicon Philippines, Inc. (PPI),
a corporation duly established and incorporated in accordance with the laws
of the Philippines, is a subsidiary of Pacific Consultants International of Japan
(PCIJ). The president of PPI, Jens Peter Henrichsen, who was also the director
of PCIJ, was based in Tokyo, Japan.

In 1997, PCIJ decided to engage in consultancy services for water and

sanitation in the Philippines and respondent was employed by PCIJ, through
Henrichsen, as Sector Manager of PPI in its Water and Sanitation
Department. However, PCIJ assigned him as PPI sector manager in the
Philippines. His salary was to be paid partly by PPI and PCIJ. Henrichsen then
transmitted a letter of employment to respondent in Canada, requesting him
to accept the same and affix his conformity thereto. Respondent made some
revisions in the letter of employment and signed the contract.

Section 21 of the General Conditions of Employment appended to the

letter of employment provides that:
Any question of interpretation, understanding or fulfilment of the conditions
of employment, as well as any question arising between the Employee and
the Company which is in consequence of or connected with his employment
with the Company and which cannot be settled amicably, is to be finally
settled, binding to both parties through written submissions, by the Court of
Arbitration in London.

When respondent arrived in the Philippines and assumed his position as PPI
Sector Manager. He was accorded the status of a resident alien, and PPI
applied for an Alien Employment Permit (Permit) for respondent before the
Department of Labor and Employment (DOLE).

On May 5, 1999, respondent received a letter from Henrichsen informing him

that his employment had been terminated effective August 4, 1999 for the
reason that PCIJ and PPI had not been successful in the water and sanitation
sector in the Philippines.[8] However, on July 24, 1999, Henrichsen, by
electronic mail,[9] requested respondent to stay put in his job after August 5,
1999, until such time that he would be able to report on certain projects and
discuss all the opportunities he had developed.[10] Respondent continued
his work with PPI until the end of business hours on October 1, 1999.

Respondent filed with PPI several money claims, including unpaid salary,
leave pay, air fare from Manila to Canada, and cost of shipment of goods to

Canada. PPI partially settled some of his claims (US$5,635.99), but refused to
pay the rest.

ON December 5, 2000, respondent filed a Complaint for Illegal Dismissal

against petitioners PPI and Henrichsen with the Labor Arbiter. In his
Complaint, he alleged that he was illegally dismissed; PPI had not notified
the DOLE of its decision to close one of its departments, which resulted in his
dismissal; and they failed to notify him that his employment was terminated
after August 4, 1999. He also claimed for separation pay and other unpaid
benefits and alleged that the company acted in bad faith and disregarded his
rights.

Petitioners filed a Motion to Dismiss the complaint on the following grounds:

(1) the Labor Arbiter had no jurisdiction over the subject matter; and (2)
venue was improperly laid. It averred that respondent was a Canadian
citizen, a transient expatriate who had left the Philippines. He was employed
and dismissed by PCIJ, a foreign corporation with principal office in Tokyo,
Japan. Since respondents cause of action was based on his letter of
employment executed in Tokyo, Japan dated January 7, 1998, under the
principle of lex loci contractus, the complaint should have been filed in Tokyo,
Japan. Moreover, under Section 12 of the General Conditions of Employment,
complainant and PCIJ had agreed that any employment-related dispute
should be brought before the London Court of Arbitration. Since even the
Supreme Court had already ruled that such an agreement on venue is valid,
Philippine courts have no jurisdiction.

Respondent opposed the Motion, contending that he was employed by PPI to

work in the Philippines under contract separate from his January 7, 1998
contract of employment with PCIJ. He insisted that his employer was PPI, a
Philippine-registered corporation. He further insisted that the principles of
forum non conveniens and lex loci contractus do not apply, and that
although he is a Canadian citizen, Philippine Labor Laws apply in this case.

Labor Arbiter dismissed the complaint on the ground that contract of

employment between respondent and PCIJ was controlling; the Philippines

was only the duty station where Schonfeld was required to work under the
General Conditions of Employment. PCIJ remained respondents employer
despite his having been sent to the Philippines. Since the parties had agreed
that any differences regarding employer-employee relationship should be
submitted to the jurisdiction of the court of arbitration in London, this
agreement is controlling. NLRC affirmed.

Upon petition for review to the CA, the appellate court declared that
respondent was an employee of PPI and the parties were not precluded from
bringing a case related thereto in other venues. Hence, this petition.

ISSUE:
Whether or not the NLRC has jurisdiction over respondents claim
HELD:
YES. The settled rule on stipulations regarding venue, as held by this Court in
the vintage case of Philippine Banking Corporation v. Tensuan, is that while
they are considered valid and enforceable, venue stipulations in a contract
do not, as a rule, supersede the general rule set forth in Rule 4 of the
Revised Rules of Court in the absence of qualifying or restrictive words. They
should be considered merely as an agreement or additional forum, not as
limiting venue to the specified place. They are not exclusive but, rather
permissive. If the intention of the parties were to restrict venue, there must
be accompanying language clearly and categorically expressing their
purpose and design that actions between them be litigated only at the place
named by them.

In the instant case, no restrictive words like only, solely, exclusively in this
court, in no other court save , particularly, nowhere else but/except , or
words of equal import were stated in the contract. It cannot be said that the
court of arbitration in London is an exclusive venue to bring forth any
complaint arising out of the employment contract.

Petitioners contend that respondent should have filed his Complaint in his
place of permanent residence, or where the PCIJ holds its principal office, at
the place where the contract of employment was signed, in London as stated
in their contract. By enumerating possible venues where respondent could
have filed his complaint, however, petitioners themselves admitted that the
provision on venue in the employment contract is indeed merely permissive.

VOL. 386, AUGUST 6, 2002

301
Orquiola vs. Court of Appeals
G.R. No. 141463. August 6, 2002.*
VICTOR ORQUIOLA and HONORATA ORQUIOLA, petitioners, vs. HON. COURT
OF APPEALS, HON. VIVENCIO S. BACLIG, Presiding Judge, Regional Trial Court,
Branch 77, Quezon City, THE SHERIFF OF QUEZON CITY and HIS/HER
DEPUTIES and PURA KALAW LEDESMA, substituted by TANDANG SORA
DEVELOPMENT CORPORATION, respondents.
Rene V. Sarmiento for petitioners.
Ongkiko, Kalaw, Manhit & Acorda Law Offices for P.K. Ledesma.
QUISUMBING, J.:

Same; Same; Same; Same; Actions; Pleadings and Practice; Fair play, justice,
and due process dictate that parties should not raise for the first time on
appeal issues that they could have raised but never did during trial and even
during proceedings before the Court of Appeals.The final question now is:
could we consider petitioners builders in good faith? We note that this is the
first time that petitioners have raised this issue. As a general rule, this could
not be done. Fair play, justice, and due process dictate that parties should
not raise for the first time on appeal issues that they could have raised but
never did during trial and even during proceedings before the Court of
Appeals. Nevertheless, we deem it proper that this issue be resolved now, to
avoid circuitous litigation and further delay in the disposition of this case. On
this score, we find that petitioners are indeed builders in good faith.

Same; Same; Same; Actions; Parties; No man shall be affected by any

proceeding to which he is a stranger, and strangers to a case are not bound
by any judgment rendered by the court; Only real parties in interest are
bound by the judgment therein and by writs of execution and demolition
issued pursuant thereto.As builders in good faith and innocent purchasers
for value, petitioners have rights over the subject property and hence they
are proper parties in interest in any case thereon. Consequently, private
respondents should have impleaded them in Civil Case No. Q-12918. Since
they failed to do so, petitioners cannot be reached by the decision in said
case. No man shall be affected by any proceeding to which he is a stranger,
and strangers to a case are not bound by any judgment rendered by the
court. In the same manner, a writ of execution can be issued only against a
party and not against one who did not have his day in court. Only real parties
in interest in an action are bound by the judgment therein and by writs of
execution and demolition issued pursuant thereto. In our view, the spouses
Victor and Honorata Orquiola have valid and meritorious cause to resist the
demolition of their house on their own titled lot, which is tantamount to a
deprivation of property without due process of law.
PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

This petition for review seeks the reversal of the decision1of the Court of
Appeals dated January 28, 1999 in CA-G.R. SP No. 47422, which dismissed
the petition to prohibit Judge Vivencio Baclig of the Regional Trial Court of
Quezon City, Branch 77, from issuing a writ of demolition against petitioners,
and the sheriff and deputy sheriff of the same court from implementing an
alias writ of execution. Also assailed is the resolution2 of the Court of Appeals
dated December 29, 1999 which denied petitioners motion for
reconsideration.
The facts are as follows:
Pura Kalaw Ledesma (DEFENDANT) was the registered owner of Lot 689,
covered by TCT Nos. 111267 and 111266, in Tandang Sora, Quezon City. This
parcel of land was adjacent to certain portions of Lot 707 of the Piedad
Estates, namely, Lot 707-A and 707-B, registered in the name of Herminigilda
Pedro under TCT Nos. 16951 and 16952, respectively. On October 29, 1964,
Herminigilda sold Lot 707-A and 707-B to Mariano Lising who then registered

both lots and Lot 707-C in the name of M.B. Lising Realty and subdivided
them into smaller lots.
Certain portions of the subdivided lots were sold to third persons including
herein petitioners, spouses Victor and Honorata Orquiola, who purchased a
portion of Lot 707-A-2, Lot 5, Block 1 of the subdivision plan (LRC), Psd42965. x x x The other portions were registered in the name of the heirs of
Pedro, heirs of Lising, and other third persons.
Sometime in 1969, Pura Kalaw Ledesma filed a complaint, docketed as Civil
Case No. Q-12918, with the Regional Trial Court of Quezon City against
Herminigilda Pedro and Mariano Lising for allegedly encroaching upon Lot
689. During the pendency of the action, Tandang Sora Development
Corporation replaced Pura Kalaw Ledesma as plaintiff by virtue of an
assignment of Lot 689 made by Ledesma in favor of said corporation.
On August 21, 1991, the TRIAL COURT finally adjudged defendants Pedro and
Lising jointly and severally liable for encroaching on plaintiffs land and
ordered them:
(a) to solidarity pay the plaintiff Tandang Sora Dev. Corp. actual damages in
the amount of P20,000 with interest from date of filing of the complaint;
(b) to remove all construction, including barbed wires and fences, illegally
constructed by defendants on plaintiffs property at defendants expense;
(c) to replace the removed concrete monuments removed by defendants, at
their own expense;
(d) to pay attorneys fees in the amount of FIVE THOUSAND PESOS
(P5,000.00) with interest computed from the date of filing of the complaint;
(e) to relocate the boundaries to conform with the Commissioners Report,
particularly, Annexes A and B thereof, at the expense of the defendants.3
As a result, in February 1998, the Deputy Sheriff of Quezon City directed
petitioners, through an alias writ of execution, to remove the house they
constructed on the land they were occupying.
On April 2, 1998, petitioners received a Special Order dated March 30, 1998,
from the trial court stating as follows:
Before the Court for resolution is the Ex-Parte Motion For The Issuance of A
Writ of Demolition, filed by plaintiff, through counsel, praying for the

issuance of an Order directing the Deputy Sheriff to cause the removal

and/or demolition of the structures on the plaintiffs property constructed by
defendants and/or the present occupants. The defendants-heirs of
Herminigilda Pedro filed their comment on the said Motion.
Considering that the decision rendered in the instant case had become final
and executory, the Court, in its Order of November 14, 1997, directed the
issuance of an alias writ of execution for the enforcement of the said
decision. However, despite the service of the said writ to all the defendants
and the present occupants of the subject property, they failed to comply
therewith, as per the Partial Sheriffs Return, dated February 9, 1998, issued
by the Deputy Sheriff of this branch of the Court. Thus, there is now a need
to demolish the structures in order to implement the said decision.
WHEREFORE, the defendants are hereby directed to remove, at their
expense, all constructions, including barbed wires and fences, which
defendants constructed on plaintiffs property, within fifteen (15) days from
notice of this Order; otherwise, this Court will issue a writ of demolition
against them.
SO ORDERED.4
To prohibit Judge Vivencio Baclig of the Regional Trial Court of Quezon City
from issuing a writ of demolition and the Quezon City sheriff from
implementing the alias writ of execution, PETITIONERS FILED WITH THE
COURT OF APPEALS A PETITION FOR PROHIBITION WITH PRAYER FOR A
RESTRAINING ORDER AND PRELIMINARY INJUNCTION ON APRIL 17, 1998.
Petitioners alleged that they bought the subject parcel of land in good faith
and for value, hence, THEY WERE PARTIES IN INTEREST. Since they were not
impleaded in Civil Case No. Q-12918, the writ of demolition issued in
connection therewith cannot be enforced against them because to do so
would amount to deprivation of property without due process of law.
The Court of Appeals dismissed the petition on January 28, 1999. It held that
as buyers and successors-in-interest of Mariano Lising, petitioners were
considered privies who derived their rights from Lising by virtue of the sale
and could be reached by the execution order in Civil Case No. Q-12918. Thus,
for lack of merit, the petition was ordered dismissed.6
Petitioners motion for reconsideration was denied. Hence, this petition

ISSUE: (1) whether the alias writ of execution may be enforced against
petitioners; (NO) and (2) whether petitioners were innocent purchasers for
value and builders in good faith.(YES)

(the CA relied on Vda. De MEDINA VS CRUZ whereby the court held in that
case that when Ramos and Mangahas occupied and build houses on the
subject property which is registered in the name PRC[corporation] they
obtained no consent to the latter. The Magbanuas then bought the property
from PRC[corporation] and when fully paid they wanted to vacate Ramos and
Mangahas who derived their title to subject property from a certain de
Guzman who bought the same from Don Mariano San Pedro y Esteban by
virtue of a Titulo de Composicion Con El Estado Num [not torrens title
because this was done in the late 18th century, specifically 1894]. The
Medinas claimed that the court did not acquire jurisdiction over their person
for they were never impleaded in the case between the respondent and her
predecessor in interest. The supreme court held that the court acquired
jurisdiction over the case for she was only claiming ownership not under the
Torrens system but only under the tax declarations and her predecessor in
interest hence her claim is subject to the claim of her predecessor in interest.
SC made distinction between de Medina case and the present case, thus:
Medina markedly DIFFERS from the present case on major points. FIRST, the
petitioner in medina acquired the right over the houses and lot subject of the
dispute after the original action was commenced and became final and
executory. In the present case, petitioners acquired the lot before the
commencement of civil case no. Q-12918. SECOND, the right over the
disputed land of the predecessors-in-interest of the petitioner in medina was
based on a title of doubtful authenticity, allegedly a titulo de composicion
con el estado issued by the spanish government in favor of one don mariano
san pedro y esteban, while the right over the land of the predecessors-ininterest of herein petitioners is based on a fully recognized torrens title.
THIRD, petitioners in this case acquired the registered title (Torrens system)
in their own names, while the petitioner in medina merely relied on the title
of her predecessor-in-interest and tax declarations to prove her alleged
ownership of the land.
SC also held that the petitioners were innocent purchaser for value and
builders in good faith. As found by the Court of Appeals and not refuted by
private respondent, petitioners purchased the subject land in 1964 from

Mariano Lising.12 Civil Case No. Q-12918 was commenced sometime in

1969. The Court of Appeals overlooked the fact that the purchase of the land
took place prior to the institution of Civil Case No. Q-12918. In other words,
the sale to petitioners was made before Pura Kalaw Ledesma claimed the lot.
(ORQUIOLA) could reasonably rely on Mariano Lisings Certificate of Title
which at the time of purchase was still free from any third party claim.)

AS BUILDERS IN GOOD FAITH AND INNOCENT PURCHASERS FOR VALUE,

PETITIONERS HAVE RIGHTS OVER THE SUBJECT PROPERTY AND HENCE THEY
ARE PROPER PARTIES IN INTEREST IN ANY CASE THEREON(Rule 3, Section 2,
Rules of Court: 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.). Consequently, private respondents should have impleaded
them in Civil Case No. Q-12918. Since they failed to do so, petitioners cannot
be reached by the decision in said case. No man shall be affected by any
proceeding to which he is a stranger, and strangers to a case are not bound
by any judgment rendered by the court. In the same manner, a writ of
execution can be issued only against a party and not against one who did not
have his day in court. Only real parties in interest in an action are bound by
the judgment therein and by writs of execution and demolition issued
pursuant thereto.16 In our view, the spouses Victor and Honorata Orquiola
have valid and meritorious cause to resist the demolition of their house on
their own titled lot, which is tantamount to a deprivation of property without
due process of law.
WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals
dated January 28, 1999, and its resolution dated December 29, 1999, in CAG.R. SP No. 47422, are REVERSED and SET ASIDE. Respondents are hereby
enjoined from enforcing the decision in Civil Case No. Q-12918 through a writ
of execution and order of demolition issued against petitioners. Costs against
private respondent.

GR No. 143581

January 7, 2008

Korea Technologies Co., Ltd., vs. Hon. Alberto A. Lerma, in TINGA, and his
capacity as Presiding Judge of Branch 256 of Regional Trial Court of
Muntinlupa City, and Pacific General Steel Manufacturing Corporation

Facts:
Petitioner Korea Technolgies Co. Ltd. (KOGIES) is a Korean corporation
engaged in the supply and installation of Liquefied Petroleum Gas (LPG)
Cylinder manufacturing plants, while private respondent Pacific General Steel
Manufacturing Corp. (PGSMC) is a domestic corporation.

On March 5, 1997, PGSMC and KOGIES executed a contract.

KOGIES would set up an LPG Cylinder Manufacturing Plant in Carmona,

Cavite.

The contract was executed in the Philippines

On April 7, 1997 the parties executed in Korea, an amendment for the

contract dated March 5, 1997 amending the terms of payment where it is
stipulated that KOGIES will ship the machinery and facilities necessary for
manufacturing LPG cylinders

On January 22, 1998, after the installation of the plant, the initial operation
could not be conducted due to PGSMC financial difficulties forcing the parties
to agree that KOGIES would be deemed to have completely complied with
the terms and conditions of the contract. For the remaining balance of
USD306,000, PGSMC issued two postdated checks. When KOGIES deposited
the checks, these were dishonored for the reason PAYMENT STOPPED.

Thus, on May 8, 1998

KOGIES sent a demand letter to PGSMC threatening criminal action for

violation of Batas Pambansa Blg. 22 in case of nonpayment

The wife of PGSMCs President faxed a letter dated May 7, 1998

complaining that KOGIES delivered a different brand of hydraulic press and

that it had not delivered several equipment parts already paid for (reason
why payment stopped)

On June 1, 1998, PGSMC informed KOGIES that PGSMC was canceling their
Contract dated March 5, 1997 on the ground that KOGIES had altered the
quantity and lowered the quality of the machineries and equipment it
delivered to PGSMC, and that PGSMC would dismantle and transfer the
machineries, equipment, and facilities installed in the Carmona plant.

June 6, 1998 PGSMC filed before the Office of the Public Prosecutor an
Affidavit-Complaint for Estafa against Mr. Dae Hyun Kang, President of
KOGIES.

On June 15, 1998, KOGIES wrote PGSMC informing the latter that PGSMC
could not unilaterally rescind their contract nor dismantle and transfer the
machineries and equipment on mere imagined violations by KOGIES. It also
insisted that their disputes should be settled by arbitration as agreed upon in
Article 15, the arbitration clause of their contract.

RTC:
On July 3, 1998 KOGIES filed a Complaint for Specific Performance

The RTC granted a temporary restraining order (TRO) on July 4, 1998, which
was subsequently extended until July 22, 1998 (for dismantling and transfer
of machineries)

On July 9, 1998, PGSMC filed an opposition to the TRO arguing that KOGIES
was not entitled to the TRO since Art. 15, the arbitration clause, was null and
void for being against public policy as it ousts the local courts of jurisdiction
over the instant controversy.

On July 23, 1998, the RTC issued an Order:

denying the application for a writ of preliminary injunction, reasoning

that PGSMC had paid KOGIES USD 1,224,000, the value of the machineries
and equipment as shown in the contract such that KOGIES no longer had
proprietary rights over them

Art. 15 of the Contract as amended was invalid as it tended to oust the

trial court or any other court jurisdiction over any dispute that may arise
between the parties. KOGIES prayer for an injunctive writ was denied. The
dispositive portion of the Order stated:

On September 21, 1998, the trial court issued an Order:

(1) granting PGSMCs motion for inspection;
(2) denying KOGIES motion for reconsideration of the July 23, 1998 RTC
Order; and
(3) denying KOGIES motion to dismiss PGSMCs compulsory counterclaims as
these counterclaims fell within the requisites of compulsory counterclaims.

On October 2, 1998, KOGIES filed an Urgent Motion for Reconsideration of

the September 21, 1998 RTC Order granting inspection of the plant and
denying dismissal of PGSMCs compulsory counterclaims.

Court of Appeals:
Ten days after, on October 12, 1998, without waiting for the resolution of its
October 2, 1998 urgent motion for reconsideration.

KOGIES filed before the Court of Appeals (CA) a petition for certiorari:

seeking annulment of the July 23, 1998 and September 21, 1998 RTC
Orders

praying for the issuance of writs of prohibition, mandamus, and

preliminary injunction to enjoin the RTC and PGSMC from inspecting,
dismantling, and transferring the machineries and equipment in the Carmona
plant, and to direct the RTC to enforce the specific agreement on arbitration
to resolve the dispute.

On October 19, 1998, the RTC denied KOGIES urgent motion for
reconsideration and directed the Branch Sheriff to proceed with the
inspection of the machineries and equipment in the plant on October 28,
1998. On November 11, 1998, the Branch Sheriff filed his Sheriffs Report
finding that the enumerated machineries and equipment were not fully and
properly installed.

On May 30, 2000, the CA rendered the assailed Decision:

affirming the RTC Orders and declared the arbitration clause against
public policy

dismissing the petition for certiorari filed by KOGIES

The CA found that the RTC did not gravely abuse its discretion in
issuing the assailed July 23, 1998 and September 21, 1998 Orders

CA held that the counterclaims of PGSMC were compulsory ones and

payment of docket fees was not required since the Answer with counterclaim
was not an initiatory pleading. For the same reason, the CA said a certificate
of non-forum shopping was also not required

Held that the petition for certiorari had been filed prematurely since
KOGIES did not wait for the resolution of its urgent motion for reconsideration
of the September 21, 1998 RTC Order which was the plain, speedy, and
adequate remedy available. According to the CA, the RTC must be given the

opportunity to correct any alleged error it has committed, and that since the
assailed orders were interlocutory, these cannot be the subject of a petition
for certiorari.

Hence, we have this Petition for Review on Certiorari under Rule 45.

Issues:
Petitioner posits that the appellate court committed the following errors:
(a) PRONOUNCING THE QUESTION OF OWNERSHIP OVER THE MACHINERY
AND FACILITIES AS A QUESTION OF FACT BEYOND THE AMBIT OF A PETITION
FOR CERTIORARI INTENDED ONLY FOR CORRECTION OF ERRORS OF
JURISDICTION OR GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF
(SIC) EXCESS OF JURISDICTION, AND CONCLUDING THAT THE TRIAL COURTS
FINDING ON THE SAME QUESTION WAS IMPROPERLY RAISED IN THE PETITION
BELOW;
(b) DECLARING AS NULL AND VOID THE ARBITRATION CLAUSE IN ARTICLE 15
OF THE CONTRACT BETWEEN THE PARTIES FOR BEING CONTRARY TO PUBLIC
POLICY AND FOR OUSTING THE COURTS OF JURISDICTION;
(c) DECREEING PRIVATE RESPONDENTS COUNTERCLAIMS TO BE ALL
COMPULSORY NOT NECESSITATING PAYMENT OF DOCKET FEES AND
CERTIFICATION OF NON-FORUM SHOPPING;
(d) RULING THAT THE PETITION WAS FILED PREMATURELY WITHOUT WAITING
FOR THE RESOLUTION OF THE MOTION FOR RECONSIDERATION OF THE
ORDER DATED SEPTEMBER 21, 1998 OR WITHOUT GIVING THE TRIAL COURT
AN OPPORTUNITY TO CORRECT ITSELF;
(e) PROCLAIMING THE TWO ORDERS DATED JULY 23 AND SEPTEMBER 21,
1998 NOT TO BE PROPER SUBJECTS OF CERTIORARI AND PROHIBITION FOR
BEING INTERLOCUTORY IN NATURE;

Ruling:
The petition is partly meritorious.

(a) Issue on ownership of plant proper for arbitration; beyond the ambit of
certiorari
It is settled that questions of fact cannot be raised in an original action for
certiorari. Whether or not there was full payment for the machineries and
equipment and installation is indeed a factual issue prohibited by Rule 65.

However, what appears to constitute a grave abuse of discretion is the order

of the RTC in resolving the issue on the ownership of the plant when it is the
arbitral body (KCAB) and not the RTC which has jurisdiction and authority
over the said issue. The RTCs determination of such factual issue constitutes
grave abuse of discretion and must be reversed and set aside.

(b) Petitioner claims the RTC and the CA erred in ruling that the arbitration
clause is null and void. Petitioner is correct.
Lex loci contractus. The contract in this case was perfected here in the
Philippines. Therefore, our laws ought to govern. Nonetheless, Art. 2044 of
the Civil Code sanctions the validity of mutually agreed arbitral clause or the
finality and binding effect of an arbitral award.

The arbitration clause was mutually and voluntarily agreed upon by the
parties. It has not been shown to be contrary to any law, or against morals,
good customs, public order, or public policy. There has been no showing that
the parties have not dealt with each other on equal footing. We find no
reason why the arbitration clause should not be respected and complied with
by both parties.

In Gonzales v. Climax Mining Ltd., we held that submission to arbitration is a

contract and that a clause in a contract providing that all matters in dispute
between the parties shall be referred to arbitration is a contract. Again in Del
Monte Corporation-USA v. Court of Appeals, we likewise ruled that [t]he
provision to submit to arbitration any dispute arising therefrom and the
relationship of the parties is part of that contract and is itself a contract

(c) The rules on the payment of docket fees for counterclaims and cross
claims were amended effective August 16, 2004
On July 17, 1998, at the time PGSMC filed its Answer incorporating its
counterclaims against KOGIES, it was not liable to pay filing fees for said
counterclaims being compulsory in nature. We stress, however, that effective
August 16, 2004 under Sec. 7, Rule 141, as amended by A.M. No. 04-2-04-SC,
docket fees are now required to be paid in compulsory counterclaim or crossclaims.

As to the failure to submit a certificate of forum shopping, PGSMCs Answer is

not an initiatory pleading which requires a certification against forum
shopping under Sec. 5 of Rule 7, 1997 Revised Rules of Civil Procedure. It is a
responsive pleading. Hence, the courts a quo did not commit reversible error
in denying KOGIES motion to dismiss PGSMCs compulsory counterclaims.

(d) Prematurity of the petition before the CA

Neither do we think that KOGIES was guilty of forum shopping in filing the
petition for certiorari. Note that KOGIES motion for reconsideration of the July
23, 1998 RTC Order which denied the issuance of the injunctive writ had
already been denied. Thus, KOGIES only remedy was to assail the RTCs
interlocutory order via a petition for certiorari under Rule 65.

While the October 2, 1998 motion for reconsideration of KOGIES of the

September 21, 1998 RTC Order relating to the inspection of things, and the
allowance of the compulsory counterclaims has not yet been resolved, the
circumstances in this case would allow an exception to the rule that before
certiorari may be availed of, the petitioner must have filed a motion for
reconsideration and said motion should have been first resolved by the court
a quo. The reason behind the rule is to enable the lower court, in the first
instance, to pass upon and correct its mistakes without the intervention of
the higher court.

The September 21, 1998 RTC Order directing the branch sheriff to inspect the
plant, equipment, and facilities when he is not competent and
knowledgeable on said matters is evidently flawed and devoid of any legal
support. Moreover, there is an urgent necessity to resolve the issue on the
dismantling of the facilities and any further delay would prejudice the
interests of KOGIES. Indeed, there is real and imminent threat of irreparable
destruction or substantial damage to KOGIES equipment and machineries.
We find the resort to certiorari based on the gravely abusive orders of the
trial court sans the ruling on the October 2, 1998 motion for reconsideration
to be proper.

(e) Interlocutory orders proper subject of certiorari

Citing Gamboa v. Cruz, the CA also pronounced that certiorari and Prohibition
are neither the remedies to question the propriety of an interlocutory order
of the trial court. The CA erred on its reliance on Gamboa. Gamboa involved
the denial of a motion to acquit in a criminal case which was not assailable in
an action for certiorari since the denial of a motion to quash required the
accused to plead and to continue with the trial, and whatever objections the
accused had in his motion to quash can then be used as part of his defense
and subsequently can be raised as errors on his appeal if the judgment of the
trial court is adverse to him. The general rule is that interlocutory orders
cannot be challenged by an appeal. Thus, in Yamaoka v. Pescarich
Manufacturing Corporation, we held:

The proper remedy in such cases is an ordinary appeal from an adverse

judgment on the merits, incorporating in said appeal the grounds for
assailing the interlocutory orders. Allowing appeals from interlocutory orders
would result in the sorry spectacle of a case being subject of a
counterproductive ping-pong to and from the appellate court as often as a
trial court is perceived to have made an error in any of its interlocutory
rulings. However, where the assailed interlocutory order was issued with
grave abuse of discretion or patently erroneous and the remedy of appeal
would not afford adequate and expeditious relief, the Court allows certiorari
as a mode of redress.

Also, appeals from interlocutory orders would open the floodgates to endless
occasions for dilatory motions. Thus, where the interlocutory order was
issued without or in excess of jurisdiction or with grave abuse of discretion,
the remedy is certiorari.

The alleged grave abuse of discretion of the respondent court equivalent to

lack of jurisdiction in the issuance of the two assailed orders coupled with the
fact that there is no plain, speedy, and adequate remedy in the ordinary
course of law amply provides the basis for allowing the resort to a petition for
certiorari under Rule 65.

WHEREFORE, this petition is PARTLY GRANTED, in that:

(1) The May 30, 2000 CA Decision is REVERSED and SET ASIDE;
(2) The September 21, 1998 and October 19, 1998 RTC Orders in Civil Case
No. 98-117 are REVERSED and SET ASIDE;
(3) The parties are hereby ORDERED to submit themselves to the arbitration
of their dispute and differences arising from the subject Contract before the
KCAB; and
(4) PGSMC is hereby ALLOWED to dismantle and transfer the equipment and
machineries, if it had not done so, and ORDERED to preserve and maintain
them until the finality of whatever arbitral award is given in the arbitration
proceedings.

RUBY SHELTER BUILDERS AND REALTY DEVELOPMENT CORPORATION,

petitioner vs. HON. PABLO C. FORMARAN III, Presiding Judge of Regional Trial
Court Branch 21, Naga City, as Pairing Judge for Regional Trial Court Branch
22, Formerly Presided By HON. NOVELITA VILLEGAS-LLAGUNO (Retired 01
May 2006), ROMEO Y. TAN, ROBERTO L. OBIEDO and ATTY. TOMAS A. REYES,
respondents.

G.R. No. 175914, February 10, 2009

CHICO-NAZARIO, J.:

Before this Court is a Petition for Review on Certiorari under Rule 45 of the
Rules of Court seeking the reversal of the Decision of the Court of Appeals
affirming the Order of the Regional Trial Court (RTC), Branch 22, of Naga City,
ordering petitioner Ruby Shelter Builders and Realty Development
Corporation to pay additional docket/filing fees, computed based on Section
7(a) of Rule 141 of the Rules of Court, as amended.

FACTS:
Petitioner obtained a loan from respondents Romeo Y. Tan (Tan) and Roberto
L. Obiedo (Obiedo), secured by real estate mortgages over five parcels of
land, all located in Triangulo, Naga City in the name of petitioner. When
petitioner was unable to pay the loan when it became due and demandable,
respondents Tan and Obiedo agreed to an extension of the same.
In a Memorandum of Agreement, respondents Tan and Obiedo granted
petitioner to settle its indebtedness, and condoned the interests, penalties
and surcharges. The Memorandum of Agreement required, in turn, that
petitioner execute simultaneously with the said Memorandum, by way of
dacion en pago, Deeds of Absolute Sale in favor of respondents Tan and
Obiedo, covering the same parcels of land subject of the mortgages. The
Memorandum of Agreement provided that if petitioner fails to pay the loan,
the five (5) deeds of absolute sale would be executed in favor of Tan and
Obiedo. Without payment having been made by petitioner, respondents Tan
and Obiedo presented the Deeds of Absolute Sale before the Register of
Deeds of Naga City, as a result of which, they were able to secure TCTs over
the five parcels of land in their names.
Petitioner filed before the RTC a Complaint for declaration of nullity of deeds
of sales and damages, with prayer for the issuance of a writ of preliminary
injunction and/or temporary restraining order (TRO). Petitioner raised two
causes of action in its Complaint, to wit: (1) evident bad faith of Tan and
Obiedo and (2) that the Deed of Absolute Sale, executed in accordance with
the Memorandum of Agreement constituted pactum commisorium and as

such, were null and void; and that the acknowledgment in the Deeds of
Absolute Sale were falsified.
Upon filing its Complaint with the RTC, petitioner paid the docket and other
legal fees, as assessed by the Office of the Clerk of Court. The Clerk of Court
initially considered the case as an action incapable of pecuniary estimation
and computed the docket and other legal fees due thereon according to
Section 7(b)(1), Rule 141 of the Rules of Court. It was asserted that since
petitioner only wanted to annul the deeds, no issue of title or recovery of
possession is present to classify it as a real action.

Tan and Obiedo moved to dismiss the complaint and ask for damages
pursuant to the Memorandum of Agreement providing that should the
petitioner bring a suit against them, it would be liable for P10, 000,000.00.
Respondents further contend that the RTC did not acquire jurisdiction over
the case because the case involved recovery of real property making it a real
action which requires payment of docket fees equivalent to a percentage of
the fair market value of the land.
The RTC and CA ruled in favor of Tan and Obiedo ordering Ruby Shelter
to pay additional docket fees.
Hence, this petition.
ISSUE:
Whether or not Ruby Shelter should pay additional docket fees.

HELD: YES.
For the court to acquire jurisdiction, docket fees must be paid first. Payment
is mandatory and jurisdictional.
Sun Insurance Office, Ltd. (SIOL) v. Asuncion: It is not simply the filing of the
complaint or appropriate initiatory pleading, but the payment of the
prescribed docket fee, that vests a trial court with jurisdiction over the
subject matter or nature of the action.xxx
In order to resolve the issue of whether petitioner paid the correct amount of
docket fees, it is necessary to determine the true nature of its Complaint.

The dictum adhered to in this jurisdiction is that the nature of an action is

determined by the allegations in the body of the pleading or Complaint itself,
rather than by its title or heading.
To determine whether an action is real, it must affect title to or recovery of
possession of real property. In this case, petitioner deliberately avoided
raising issues on the title and possession of the real properties that may lead
the Court to classify its case as a real action.
The action in the present case was really one for recovery of possession of
the parcels of land not annulment of the Deeds of Absolute Sale as claimed
by petitioner because it involves the recovery by petitioner of its title to and
possession of the five parcels of land from respondents Tan and Obiedo.
Hence, it is a real action.
A real action indisputably involves real property. The docket fees for a real
action would still be determined in accordance with the value of the real
property involved therein; the only difference is in what constitutes the
acceptable value. In computing the docket fees for cases involving real
properties, the courts, instead of relying on the assessed or estimated value,
would now be using the fair market value of the real properties (as stated in
the Tax Declaration or the Zonal Valuation of the Bureau of Internal Revenue,
whichever is higher) or, in the absence thereof, the stated value of the same.
In sum, the Court finds that the true nature of the action instituted by
petitioner against respondents is the recovery of title to and possession of
real property. It is a real action necessarily involving real property, the docket
fees for which must be computed in accordance with Section 7(1), Rule 141
of the Rules of Court, as amended. The Court of Appeals, therefore, did not
commit any error in affirming the RTC Orders requiring petitioner to pay
additional docket fees for its Complaint.
BPI FAMILY SAVINGS BANK vs. SPS. YUJUICO

FACTS:
In 1996, the City of Manila filed a complaint against the respondents
for expropriation of five parcels of land located in Tondo, Manila. Two of the
five lands were previously mortgaged to City Trust Banking Corporation, the
petitioners predecessor-in-interest.

The RTC of Manila rendered its judgment declaring the five parcels of
land expropriated for public use. Such judgment became final and executory,
hence, the trial court denied BPIs Motion to Intervene in Execution with
Partial Opposition to Defendants Request to Release. Because of this, BPI
decided to extrajudicially foreclose the mortgage constituted on the two
parcels of land. After the public auction, the sheriff awarded the two lots to
the petitioner.
As there was still a deficiency by the respondents, BPI sued them in the
Makati RTC in order to recovery the same. Respondents moved to dismiss the
action based on several grounds: (1) that the suit was barred by res judicata;
(2) the complaint stated no cause of action; and (3) plaintiffs claim had been
waived, abandoned, or extinguished. The RTC denied the motion to dismiss.
On a motion for reconsideration, petitioners raised for the first time
that ground of improper venue. They contended that the action for recovery
of deficiency, being a supplementary action for the extrajudicial closure, was
a real action that should have been brought to Manila RTC, where the
properties are located. The trial court denied the motion on the ground that
the same was not alleged in the Motion to Dismiss.
Upon petition for review to the CA, the appellate court reversed the
decision of the trial court where it stated that a suit for recovery of deficiency
after the foreclosure of a mortgage is in a nature a mortgage action, hence,
the action for recovery must be instituted on the same venue as that of the
extrajudicial foreclosure.
Hence, this petition.

ISSUE: Whether or not the CA erred in its decision when it reversed the
decision of the RTC on the ground that the action was filed on an improper
venue.

HELD: YES.

It is basic that the venue of an action depends on whether it is a real or a

personal action. The determinants of whether an action is of a real or a
personal nature have been fixed by the Rules of Court and relevant

jurisprudence. According to Section 1, Rule 4 of the Rules of Court, a real

action is one that affects title to or possession of real property, or an interest
therein. Thus, an action for partition or condemnation of, or foreclosure of
mortgage on, real property is a real action. The real action is to be
commenced and tried in the proper court having jurisdiction over the area
wherein the real property involved, or a portion thereof, is situated, which
explains why the action is also referred to as a local action. In contrast, the
Rules of Court declares all other actions as personal actions. Such actions
may include those brought for the recovery of personal property, or for the
enforcement of some contract or recovery of damages for its breach, or for
the recovery of damages for the commission of an injury to the person or
property. The venue of a personal action is the place where the plaintiff or
any of the principal plaintiffs resides, or where the defendant or any of the
principal defendants resides, or in the case of a non-resident defendant
where he may be found, at the election of the plaintiff, for which reason the
action is considered a transitory one.

Based on the distinctions between real and personal actions, an action to

recover the deficiency after the extrajudicial foreclosure of the real property
mortgage is a personal action, for it does not affect title to or possession of
real property, or any interest therein.

Moreover, the Makati RTC observed, and the observation is correct in our
view, that it would be improper to dismiss Civil Case No. 03-450 on the
ground of improper venue, assuming that the venue had been improperly
laid, considering that the respondents had not raised such ground in their
Motion to Dismiss. As earlier indicated, they came to raise the objection of
improper venue for the first time only in their reply to the petitioners
comment on their Motion for Reconsideration. They did so belatedly.

Lotte Phil. Co., Inc v Dela Cruz et.al

G.R. No. 166302
July 28, 2005

FACTS: On December 14, 1995 and yearly thereafter until the year 2000, 7J
Maintenance and Janitorial Services (7J) entered into a contract with
petitioner Lotte Phil Co Inc(Lotte) to provide manpower for needed
maintenance, utility, janitorial and other services to the latter. In compliance
with the terms and conditions of the service contract, and to accommodate
the needs of Lotte for personnel/workers to do and perform piece works,
respondents Dela Cruz, Mamauag, Cauba, etc,, among others, were hired
and assigned to Lotte as repackers or sealers. However, either in October,
1999 or on February 9, 2000, Lotte dispensed with their services allegedly
due to the expiration/termination of the service contract by Lotte with 7J.
Respondents were never called back again
A labor complaint was filed by respondents against both Lotte and 7J, for
illegal dismissal, regularization, payment of corresponding backwages and
related employment benefits, 13th month pay, service incentive leave, moral
and exemplary damages and attorneys fees based on total judgment award.
Labor Arbiter Cresencio G. Ramos, Jr. rendered judgment declaring 7J as
employer of respondents and finding 7J guilty of illegal dismissal.
Respondents appealed to the National Labor Relations Commission (NLRC)
praying that Lotte be declared as their direct employer because 7J is merely
a labor-only contractor. NLRC affirmed the ruling that 7J is the employer of
respondents and solely liable for their claims. NLRC denied respondents MR.
Lotte prayed that the petition for certiorari filed by respondents in the Court
of Appeals be dismissed for failure to implead 7J who is a party interested in
sustaining the proceedings in court, pursuant to Section 3, Rule 46 of the
Revised Rules of Civil Procedure.
Court of Appeals reversed and set aside the rulings of the Labor Arbiter and
the NLRC and declared Lotte as the real employer of respondents and that 7J
who engaged in labor-only contracting was merely the agent of Lotte.
Respondents who performed activities directly related to Lottes business
were its regular employees under Art. 280 of the Labor Code. As such, they
must be accorded security of tenure and their services terminated only on
just and authorized causes.
ISSUE: WON 7J is an indispensable party and should have been impleaded in
respondents petition in the Court of Appeals?
HELD:

YES

An indispensable party is a party in interest without whom no final

determination can be had of an action, and who shall be joined either as
plaintiffs or defendants. The joinder of indispensable parties is
mandatory.The presence of indispensable parties is necessary to vest the
court with jurisdiction, which is the authority to hear and determine a cause,
the right to act in a case.Thus, without the presence of indispensable parties
to a suit or proceeding, judgment of a court cannot attain real finality.The
absence of an indispensable party renders all subsequent actions of the
court null and void for want of authority to act, not only as to the absent
parties but even as to those present.
In the case at bar, 7J is an indispensable party. It is a party in interest
because it will be affected by the outcome of the case. The Labor Arbiter and
the NLRC found 7J to be solely liable as the employer of respondents. The
Court of Appeals however rendered Lotte jointly and severally liable with 7J
who was not impleaded by holding that the former is the real employer of
respondents. Plainly, its decision directly affected 7J.
Although 7J was a co-party in the case before the Labor Arbiter and the
NLRC, respondents failed to include it in their petition for certiorari in the
Court of Appeals. Hence, the Court of Appeals did not acquire jurisdiction
over 7J. No final ruling on this matter can be had without impleading 7J,
whose inclusion is necessary for the effective and complete resolution of the
case and in order to accord all parties with due process and fair play.

China Banking Corporation vs Oliver

Facts: Pangan Lim, Jr. and a certain Mercedes M. Oliver opened a joint
account in China Banking Corporation. Lim introduced Oliver to the banks
branch manager as his partner in the rice and palay trading business.
Thereafter, Lim and Oliver applied for a P17 million loan, offering as collateral
a 7,782 square meter lot located in Tunasan, Muntinlupa and covered by TCT
No. S-50195 in the name of Oliver. The bank approved the application. The
mortgage was duly registered and annotated on the original title under the
custody of the Registry of Deeds of Makati and on the owners duplicate copy
in the banks possession. The mortgage document showed Mercedes Olivers

address to be No. 95 Malakas Street, Diliman, Quezon City. For brevity, she is
hereafter referred to as Oliver One.
Respondent claiming that she is Mercedes M. Oliver, filed an action for
annulment of mortgage and cancellation of title with damages against
Chinabank, Register of Deeds Atty. Mila G. Flores, and Deputy Register of
Deeds Atty. Ferdinand P. Ignacio. Respondent, whom we shall call as Oliver
Two, claimed that she was the registered and lawful owner of the land
subject of the real estate mortgage; that the owners duplicate copy of the
title had always been in her possession; and that she did not apply for a loan
or surrender her title to Chinabank.2 She prayed that: (1) the owners
duplicate copy surrendered to Chinabank as well as the original title with the
Registry of Deeds be cancelled; (2) the mortgage be declared null and void;
and (3) the Registry of Deeds be ordered to issue a new and clean title in her
name
Chinabank moved to dismiss the case for lack of cause of action and nonjoinder of an indispensable party, the mortgagor.
Issue: Whether Oliver 1 should be impleaded as indispensible party?
Held: An indispensable party is a party in interest, without whom no final
determination can be had of an action. It is true that mortgagor Oliver One is
a party in interest, for she will be affected by the outcome of the case. She
stands to be benefited in case the mortgage is declared valid, or injured in
case her title is declared fake. However, mortgagor Oliver Ones absence
from the case does not hamper the trial court in resolving the dispute
between respondent Oliver Two and petitioner.
Chinabank has interest in the loan which, however, is distinct and divisible
from the mortgagors interest, which involves the land used as collateral for
the loan. Further, a declaration of the mortgages nullity in this case will not
necessarily prejudice mortgagor Oliver One. The bank still needs to initiate
proceedings to go after the mortgagor, who in turn can raise other defenses
pertinent to the two of them.
A party is also 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, as in the case of Chinabank and mortgagor
Oliver One. The latters participation in this case will simply enable petitioner
Chinabank to make its claim against her in this case, and hence, avoid the
institution of another action. Thus, it was the bank who should have filed a

third-party complaint or other action versus the mortgagor Oliver One. Since
mortgagor Oliver One is not an indispensable party, Section 7, Rule 3 of the
1997 Rules of Civil Procedure, which requires compulsory joinder of
indispensable parties in a case, does not apply. Instead, it is Section 11, Rule
3 that applies. Non-joinder of parties is not a ground for dismissal of an
action. Parties may be added by order of the court, either on its own
initiative or on motion of the parties. Hence, the Court of Appeals committed
no error when it found no abuse of discretion on the part of the trial court for
denying Chinabanks motion to dismiss and, instead, suggested that
petitioner file an appropriate action against mortgagor Oliver One. A person
who is not a party to an action may be impleaded by the defendant either on
the basis of liability to himself or on the ground of direct liability to the
plaintiff.

GIPA VS SOUTHERN LUZON INSTITUTE, 726 SCRA JUNE 18, 2004

DOCTRINE:

Payment of the full amount of appellate court docket and lawful fees is
mandatory and jurisdictional; Relaxation of the rule on payment of appeal
fee is unwarranted in this case

FACTS:

Alonzo, Imelda, Juanito, Virgilio and the other petitioners were the
defendants in a case filed by Southern Luzon Institute for Recovery of
Ownership and Possession with Damages before the RTC of Sorsogon City.

After trial, the RTC rendered a decision in favor of SLI and against the
petitioners, hence they filed a Notice of Appeal which the RTC approved. The
Court of Appeals, however, dismissed their appeal via a Resolution for
alleged failure to show proof of payment of appellate fees. They promptly
filed a Motion for Reconsideration where they attached a Certification from
the RTC that they paid the appeal fee in the amount of P3,000.00 under
Official Receipt No. 18091130 dated January 25, 2005. The CA subsequently
reinstated the appeal. However, in a Minute Resolution, the CA again ordered
them to remit the amount of P30.00 as legal research fund, which apparently
was not included in the P3,000.00 they paid. The petitioners received the
resolution on March 13, 2006, by their counsel, Atty. Golar from the Public
Attorneys Office. After nine months, petitioners had yet to comply with the
minute resolution, hence the CA dismissed their appeal via a Resolution, for
non-payment of the appellate fees as provided in Section 1(c) of Rule 50.
Their motion for reconsideration denied, they filed a petition for review on
certiorari with the Supreme Court, invoking liberality in the application of the
rules, since they paid a substantial amount in appellate fees and fell short by
only P30.00. In their Reply, petitioners also invoked Republic Act 9406[1]
which exempted PAO clients like themselves from payment of docket fees.
They further argue that though the law was inexistent at the time they filed
their appeal, still, the same should be given retroactive effect in their favor.

ISSUE:

WHETHER THE COURT OF APPEALS GRAVELY ERRED IN DISMISSING THE

APPEAL FILED BY THE PETITIONERS FOR FAILURE TO REMIT THE
MEAGERAMOUNT OF THIRTY PESOS (P30.00) AFTER HAVING ADVANCED A
SUBSTANTIAL PORTION OF THE DOCKET FEES.

HELD:

Payment of the full amount of appellate court docket and lawful fees is
mandatory and jurisdictional; Relaxation of the rule on payment of appeal
fee is unwarranted in this case.

Section 4, Rule 41 of the Rules of Court provides:

Sec. 4. Appellate court docket and other lawful fees. Within the period for
taking an appeal, the appellant shall pay to the clerk of court which rendered
the judgment or final order appealed from, the full amount of the appellate
court docket and other lawful fees. Proof of payment of said fees shall be
transmitted to the appellate court together with the original record or the
record on appeal. (Emphases supplied)

In Gonzales v. Pe (G.R. No. 167398, August 8, 2011, 655 SCRA 176.), the
Courts explanation anent the requirement of full payment of docket and
other lawful fees under the above-quoted provision was iterated, viz:

In Far Corporation v. Magdaluyo, as with other subsequent cases of the same

ruling, the Court explained that the procedural requirement under Section 4
of Rule 41 is not merely directory, as the payment of the docket and other
legal fees within the prescribed period is both mandatory and jurisdictional. It
bears stressing that an appeal is not a right, but a mere statutory privilege.
An ordinary appeal from a decision or final order of the RTC to the CA must
be made within 15 days from notice. And within this period, the full amount
of the appellate court docket and other lawful fees must be paid to the clerk
of the court which rendered the judgment or final order appealed from. The
requirement of paying the full amount of the appellate docket fees within the
prescribed period is not a mere technicality of law or procedure. The
payment of docket fees within the prescribed period is mandatory for the
perfection of an appeal. Without such payment, the appeal is not perfected.
The appellate court does not acquire jurisdiction over the subject matter of
the action and the Decision sought to be appealed from becomes final and
executory. Further, under Section 1 (c), Rule 50, an appeal may be dismissed
by the CA, on its own motion or on that of the appellee, on the ground of the
non-payment of the docket and other lawful fees within the reglementary
period as provided under Section 4 of Rule 41. The payment of the full
amount of the docket fee is an indispensable step for the perfection of an

appeal. In both original and appellate cases, the court acquires jurisdiction
over the case only upon the payment of the prescribed docket fees.[2]

Here, petitioners concede that payment of the full amount of docket fees
within the prescribed period is not a mere technicality of law or procedure
but a jurisdictional requirement. Nevertheless, they want this Court to relax
the application of the rule on the payment of the appeal fee in the name of
substantial justice and equity.

The Court is not persuaded.

The liberality which petitioners pray for has already been granted to them by
the CA at the outset. It may be recalled that while petitioners paid a
substantial part of the docket fees, they still failed to pay the full amount
thereof since their payment was short of P30.00. Based on the premise that
the questioned Decision of the RTC has already become final and executory
due to non-perfection, the CA could have dismissed the appeal outright. But
owing to the fact that only the meager amount of P30.00 was lacking and
considering that the CA may opt not to proceed with the case until the
docket fees are paid,[3] it still required petitioners, even if it was already
beyond the reglementary period, to complete their payment of the appeal
fee within 10 days from notice. Clearly, the CA acted conformably with the
pronouncement made in Camposagrado, a case cited by petitioners, that [a]
partys failure to pay the appellate docket fee within the reglementary period
confers only a discretionary and not a mandatory power to dismiss the
proposed appeal. Such discretionary power should be used in the exercise of
the courts sound judgment in accordance with the tenets of justice and fair
play with great deal of circumspection, considering all attendant
circumstances and must be exercised wisely and prudently, never
capriciously, with a view to substantial justice.[4]

The CAs leniency over petitioners cause did not end there. Although they
were given only 10 days to remit the P30.00 deficiency, the said court
allowed an even longer period of nine months to lapse, apparently in the
hope that petitioners compliance would be on its way. But as no payment

was remitted, it was constrained to finally dismiss the appeal for nonperfection. Surprisingly, petitioners were again heard of when they filed a
Motion for Reconsideration to which they attached a postal money order of
P30.00. Nevertheless, they did not offer any plausible explanation either as
to why they, at the start, failed to pay the correct docket fees or why they
failed to comply with the CAs directive for them to remit the P30.00deficiency. Instead, they focused on begging the CA for leniency, arguing
that the meager amount of the deficiency involved justifies relaxation of the
rules. What is worse is that even if the CA already took note of the lack of
such explanation in its Resolution denying petitioners motion for
reconsideration, petitioners, up to now, have not attempted to tender one in
this Petition and instead continue to capitalize on substantial justice, fair play
and equity to secure a reversal of the dismissal of their appeal. The Court
cannot, therefore, help but conclude that there is really no plausible reason
behind the said omission.

REMEDIAL LAW 1 > Civil Procedure > Rule 1-5

Saint Louis University, Inc., Petitioner vs. Evangeline C. Cobarrubias,

Respondent
G.R. No. 187104; August 3, 2010
J. Brion (Third Division)

FACTS:

Cobarrubias is an associate professor of SLU and an active member of the

Union of Faculty and Employees (UFESLU). In a CBA between SLU and UFESLU
a provision for forced leave for one regular semester shall be applied for
teaching employees who will fail 3 times within a 5-year period in the yearly

evaluation. SLU placed Cobarrubias on forced leave for the first semester of
S.Y. 2007-2008 when she failed the evaluation for 3 times.

Cobarrubias sought recourse from the CBAs grievance machinery, but to no

avail. Thus, Cobarrubias filed a case for illegal forced leave or illegal
suspension with the NCMB of the DOLE and when circulation and mediation
again failed, the parties submitted the issues between them for voluntary
arbitration (VA). Cobarrubias argued that the CA already resolved the forced
leave issue in a prior case between the parties ruling that the forced leave
for teachers who fail their evaluation for 3 times within a five-year period
should be coterminous with the CBA in force during the same five-year
period. SLU, for its part, countered that the CAs decision is not yet final. The
VA dismissed the case. Cobarrubias filed with the CA a petition for review
under Rule 43 of the Rules of Court, but failed to pay the required filing fees
and to attach to the petition copies of the material portions of the record.
Thus, the CA dismissed the petition outright for Cobarrubias procedural
lapses. Upon MR, procedural lapses were complied with thus the CA
reinstated the petition.

ISSUE: WON the CA erred in reinstating Cobarrubias petition despite her

failure to pay the appeal fee within the reglementary period

HELD: YES.

Appeal is not a natural right but a mere statutory privilege, thus, appeal
must be made strictly in accordance with the provision set by law. Rule 43 of
the Rules of Court provides that appeals from the judgment of the VA shall be
taken to the CA, by filing a petition for review within fifteen (15) days from
the receipt of the notice of judgment. Furthermore, upon the filing of the
petition, the petitioner shall pay to the CA clerk of court the docketing and
other lawful fees; non-compliance with the procedural requirements shall be
a sufficient ground for the petitions dismissal. Thus, payment in full of docket
fees within the prescribed period is not only mandatory, but also
jurisdictional. It is an essential requirement, without which, the decision

appealed from would become final and executory as if no appeal has been
filed.

In the present case, Cobarrubias paid her docket fees in full only after
seventy-two (72) days when she filed her motion for reconsideration and
attached the postal money orders. Undeniably, the docket fees were paid
late, and without payment of the full docket fees, Cobarrubias appeal was
not perfected within the reglementary period.

While procedural rules are liberally construed, the provisions on

reglementary periods are strictly applied, indispensable as they are to the
prevention of needless delays, and are necessary to the orderly and speedy
discharge of judicial business.

Viewed in this light, procedural rules are not to be belittled or dismissed

simply because their non-observance may have prejudiced a party's
substantive rights; like all rules, they are required to be followed. However,
there are recognized exceptions to their strict observance, such as:
(1) most persuasive and weighty reasons;
(2) to relieve a litigant from an injustice not commensurate with his failure to
comply with the prescribed procedure;
(3) good faith of the defaulting party by immediately paying within a
reasonable time from the time of the default;
(4) the existence of special or compelling circumstances;
(5) the merits of the case;
(6) a cause not entirely attributable to the fault or negligence of the party
favored by the suspension of the rules;
(7) a lack of any showing that the review sought is merely frivolous and
dilatory;
(8) the other party will not be unjustly prejudiced thereby;

(9) fraud, accident, mistake or excusable negligence without the appellant's

fault;
(10) peculiar, legal and equitable circumstances attendant to each case;
(11) in the name of substantial justice and fair play;
(12) importance of the issues involved; and
(13) exercise of sound discretion by the judge, guided by all the attendant
circumstances. Thus, there should be an effort, on the part of the party
invoking liberality, to advance a reasonable or meritorious explanation for
his/her failure to comply with the rules.

In Cobarrubias' case, no such explanation has been advanced. Other than

insisting that the ends of justice and fair play are better served if the case is
decided on its merits, Cobarrubias offered no excuse for her failure to pay
the docket fees in full when she filed her petition for review.

G.R. No. 190823

April 4, 2011

DOMINGO CARABEO vs. SPOUSES NORBERTO and SUSAN DINGCO

FACTS:
On July 10, 1990, a contract denominated as "Kasunduan sa Bilihan ng
Karapatan sa Lupa" (kasunduan) was entered into by petitioner Domingo
Carabeo and respondent spouses Norberto and Susan Dingco whereby
petitioner agreed to sell his rights over a 648 square meter parcel of
unregistered land situated in Purok III, Tugatog, Orani, Bataan to respondents
for Php 38,000.

Respondents tendered their initial payment of Php 10,000 upon signing of

the contract, the remaining balance to be paid on September 1990. They
later claimed that when they were about to hand in the balance of the
purchase price, petitioner requested them to keep it first as he was yet to
settle an on-going "squabble" over the land. Nevertheless, respondents gave
petitioner small sums of money from time to time which totaled P9,100, on
petitioners request according to them. Despite the alleged problem over the
land, they insisted on petitioners acceptance of the remaining balance of
Php 18,900 but petitioner remained firm in his refusal, proffering as reason
therefor that he would register the land first.

Sometime in 1994, respondents learned that the alleged problem over the
land had been settled and that petitioner had caused its registration in his
name on December 21, 1993 under Transfer Certificate of Title No. 161806.
They again offered to pay the balance but petitioner declined, drawing them
to file a complaint before the Katarungan Pambarangay wherein no
settlement was reached, which prompted respondent spouses to file a
complaint for specific performance before the Regional Trial Court (RTC) of
Balanga, Bataan.

Petitioner countered in his Answer to the Complaint that the sale was void for
lack of object certain, the kasunduan not having specified the metes and
bounds of the land. In any event, petitioner alleged that if the validity of the
kasunduan is upheld, respondents failure to comply with their reciprocal
obligation to pay the balance of the purchase price would render the action
premature. Contrary to respondents claim, petitioner maintained that they
failed to pay the balance of P28,000 on September 1990 to thus constrain
him to accept installment payments totaling P9,100.

On January 31, 2001, after the case was submitted for decision, petitioner
died. The records do not show that petitioners counsel informed Branch 1 of
the Bataan RTC, where the complaint was lodged, of his death and that
proper substitution was effected in accordance with Section 16, Rule 3, Rules
of Court:

Section 16. Death of party; duty of counsel. Whenever a party to a

pending action dies, and the claim is not thereby extinguished, it shall be the
duty of his counsel to inform the court within thirty (30) days after such
death of the fact thereof, and to give the name and address of his legal
representative or representatives. Failure of counsel to comply with his duty
shall be a ground for disciplinary action.

The heirs of the deceased may be allowed to be substituted for the

deceased, without requiring the appointment of an executor or administrator
and the court may appoint a guardian ad litem for the minor heirs.

The court shall forthwith order said legal representative or representatives to

appear and be substituted within a period of thirty (30) days from notice.

If no legal representative is named by the counsel for the deceased party, or

if the one so named shall fail to appear within the specified period, the court
may order the opposing party, within a specified time to procure the
appointment of an executor or administrator for the estate of the deceased
and the latter shall immediately appear for and on behalf of the deceased.
The court charges in procuring such appointment, if defrayed by the
opposing party, may be recovered as costs. (16a, 17a)

The RTC ruled in favor of the respondent spouses, which ordered petitioner
herein to sell his right over 648 square meters of land pursuant to the
contract dated July 10, 1990 by executing a Deed of Sale thereof after the
payment of P18,900 by the herein respondent-spouses. The CA affirmed the
trial court's decicision.

Petitioners counsel filed a Notice of Appeal on March 20, 2001. Petitioners

motion for reconsideration having been denied by Resolution of January 8,
2010, the present petition for review was filed by Antonio Carabeo,
petitioners son.

ISSUES:

1. Whether the element of a contract, i.e., an object certain is present in this

case?

2. Whether the kasunduan is valid despite the lack of spousal consent?

3. Whether the death of herein petitioner causes the dismissal of the action
filed by respondents?

HELD:

1. YES.

The pertinent portion of the kasunduan reads:

x x x x Na ako ay may isang partial na lupa na matatagpuan sa Purok 111,

Tugatog, Orani Bataan, na may sukat na 27 x 24 metro kuwadrado, ang
nasabing lupa ay may sakop na dalawang punong santol at isang punong
mangga, kayat ako ay nakipagkasundo sa mag-asawang Norby Dingco at
Susan Dingco na ipagbili sa kanila ang karapatan ng nasabing lupa sa
halagang P38,000.00. x x x x (underscoring supplied)

That the kasunduan did not specify the technical boundaries of the property
did not render the sale a nullity.

The requirement that a sale must have for its object a determinate thing is
satisfied as long as, at the time the contract is entered into, the object of the
sale is capable of being made determinate without the necessity of a new or
further agreement between the parties.
[LEGAL BASIS: Art. 1460, NCC]

As the above-quoted portion of the kasunduan shows, there is no doubt that

the object of the sale is determinate.

2. YES.

This was raised only on appeal, hence, will not be considered, in the present
case, in the interest of fair play, justice and due process.
[LEGAL BASIS: Philippine Commercial and International Bank v. Custodio, G.R.
No. 173207, February 14, 2008, 545 SCRA 367]

3. NO.

The question as to whether an action survives or not depends on the nature

of the action and the damage sued for. In the causes of action which survive,
the wrong complained [of] affects primarily and principally property and
property rights, the injuries to the person being merely incidental, while in
the causes of action which do not survive, the injury complained of is to the
person, the property and rights of property affected being incidental.
(emphasis and underscoring supplied)
[LEGAL BASIS: Bonilla v. Barcena, G.R. No. L-41715, June 18, 1976.]

In the present case, respondents are pursuing a property right arising from
the kasunduan, whereas petitioner is invoking nullity of the kasunduan to

protect his proprietary interest. Assuming arguendo, however, that the

kasunduan is deemed void, there is a corollary obligation of petitioner to
return the money paid by respondents, and since the action involves
property rights, it survives.
[LEGAL BASIS: Sumaljag v. Spouses Literato, et.al., G.R. No. 149787, June 18,
2008.]

It bears noting that trial on the merits was already concluded before
petitioner died. Since the trial court was not informed of petitioners death, it
may not be faulted for proceeding to render judgment without ordering his
substitution. Its judgment is thus valid and binding upon petitioners legal
representatives or successors-in-interest, insofar as his interest in the
property subject of the action is concerned.
[LEGAL BASIS: Saligumba et.al., v. Palanog, G.R. No. 143365, December 4,
2008.]

In another vein, the death of a client immediately divests the counsel of

authority.
[LEGAL BASIS: Active Realty and Development Corporation v. Fernandez, G.R.
No. 157186, October 19, 2007.]

Thus, in filing a Notice of Appeal, petitioners counsel of record had no

personality to act on behalf of the already deceased client who, it bears
reiteration, had not been substituted as a party after his death. The trial
courts decision had thereby become final and executory, no appeal having
been perfected.

Biaco vs Philippine Countryside Rural Bank

Petitioner, Maria Teresa Biaco was the wife of Ernesto Biaco. The latter was
then employed with respondent bank as a branch manager. On different
dates on 1998, Ernesto obtained several loans from the respondent bank. As
a security, Ernesto executed a real estate mortgage in favor of the bank. The
real estate mortgages bore the signatures of the spouses Biaco. When
Ernesto failed to settle the loans, respondent bank sent a demand letter to
him on September 28, 1999, which was proved futile.
On 2000, respondent bank filed a complaint for foreclosure of mortgage
against the spouses before the RTC Misamis Oriental. Ernesto was declared in
default when he failed to file an answer. Then, the respondent bank was
allowed to file its evidence ex parte. RTC ruled in favor of the respondent
bank and ordering the spouses to pay the amount of the unpaid loans. In
case of non-payment, the Sheriff was ordered to sell at the public auction the
mortgaged lot and should there be any deficiency, the defendants were
ordered to pay any deficiency of the judgment as their personal liability.
On Oct 31, 2000, the Sheriff served a copy of the writ to the spouses. The
amount of the sold property being insufficient, another court order was
issued levying the other properties of the spouses to satisfy the balance.

Petitioner sought the annulment of the order of the trial court before the CA
contending that there was no valid service of summons since she was not
served personally but through her husband. The appellate court dismissed
the petition. CA ruled that the judicial foreclosure proceedings are actions
quasi in rem thus, jurisdiction over the person of the defendant is not
essential as long as the court acquired jurisdiction over the res. Thus, this
petition for review.

ISSUE: Whether or not the trial court is vested with jurisdiction over the
person of the petitioner.
RULING:
No. In this case, the judicial foreclosure proceeding instituted by respondent
PCRB undoubtedly vested the trial court with jurisdiction over the res. A
judicial foreclosure proceeding is an action quasi in rem. As such, jurisdiction
over the person of petitioner is not required, it being sufficient that the trial
court is vested with jurisdiction over the subject matter.

However, the High Court held that petitioner was denied due process and
was not able to participate in the judicial foreclosure proceedings as a
consequence. The violation of petitioners constitutional right to due process
arising from want of valid service of summons on her warrants the
annulment of the judgment of the trial court.
There is more, the trial court granted respondent PCRBs ex-parte motion for
deficiency judgment and ordered the issuance of a writ of execution against
the spouses Biaco to satisfy the remaining balance of the award. In short, the
trial court went beyond its jurisdiction over the res and rendered a personal
judgment against the spouses Biaco. This cannot be countenanced.
While the trial court acquired jurisdiction over the res, its jurisdiction is
limited to a rendition of judgment on the res. It cannot extend its jurisdiction
beyond the res and issue a judgment enforcing petitioners personal liability.
In doing so without first having acquired jurisdiction over the person of
petitioner, as it did, the trial court violated her constitutional right to due
process, warranting the annulment of the judgment rendered in the case.

G. R. No. 151242

June 15, 2015

PROTON PILIPINAS CORPORATION, AUTOMOTIVE PHILIPPINES, ASEA ONE

CORPORATION and AUTOCORP, Petitioners
-versusBANQUE NATIONALE DE PARIS, Respondent.
FACTS: Proton Pilipinas Corporation (Proton) availed of the credit facilities of
Banque Nationale De Paris (BNP). Co-petitioners Automative Philippines,
Asea One Corporation and Autocorp executed a Corporate Guarantee to
guarantee payment of the obligation. BNP and Proton entered into Trust
Receipt Agreements wherein under its terms, Proton would receive imported
motor vehicles in trust for BNP. Proton would sell the motor vehicles, the
proceeds of which will be remitted to BNP and applied to Protons obligation.
Any unsold motor vehicle will be returned to BNP. Allegedly, Proton failed to
remit the sale or return the motor vehicles. Also, despite demand, the copetitioners failed to pay pursuant to the Corporate Guarantee. Hence, BNP

filed a case against the petitioners praying for the payment, among others,
of their obligation amounting to US$1,544,984.40. The Makati RTC Clerk of
Court computed the docket fees which BNP paid.
The petitioners filed a Motion to Dismiss on the ground that BNP failed to pay
the correct docket fees and consequently, the court did not acquire
jurisdiction over the case. They alleged that Clerk of Court erred when it did
not include the interest claimed in the computation of the docket fees and
used the wrong exchange rate. They claim that the case was filed
prematurely as BNP did not send any demand letter. Furthermore, petitioners
submit that the complaint should be dismissed for failure to specify the
amount of interest in the prayer.
The RTC of Makati denied the Motion to Dismiss maintaining that the
computation of the Clerk of Court is correct. Assuming arguendo that the
docket fees paid was not correct, the trial court may allow the plaintiff in an
action to pay the same within a reasonable time within the expiration of
applicable prescription or reglementary period. As to the argument that the
case was prematurely filed in the absence of a demand letter, the court
cannot sustain it because failure to make a formal demand is not one of the
grounds for the dismissal of the case.
Petitioners brought the case on certiorari and mandamus to the Court of
Appeals. The Court of Appeals denied it and agreed with the reasoning of the
RTC judge. They find support in their decisions in the cases of Ng Soon vs
Alday and Tacay vs RTC wherein the Supreme Court ruled that where the
action is purely for recovery of money, the docket fees are assessed on the
basis of the aggregate amount claimed, exclusive only of interests and costs.
On the issue of the correct exchange rate, the rate the clerk of court applied
is presumptively correct in the absence of any office guide of the rate of
exchange.
Petitioners filed a Petition for Review on Certiorari before the Supreme Court.
ISSUE #1: Whether or not the correct docket fees were paid considering that
the interest was excluded in its computation.
ISSUE#2: Whether or not the case should be dismissed on the ground of lack
of jurisdiction due to the underpayment of docket fees.
HELD#1: NO. Interest, damages of whatever kind, attorneys fees, litigation
expenses, and costs should be included in the computation of docket fees.
The reliance of the lower courts in the case of Tacay and Ng Soon was not in

order. When these cases were decided, the governing rule is Section 5(a) of
Rule 141 wherein it states that interest should be excluded in the
computation of docket fees. This rule was amended by Administrative
Circular 11-94 wherein presently, interests are included in the computation of
the docket fees. The clerk of court should thus have assessed the filing fee
by taking into consideration the total sum claimed, inclusive of interest,
damages of whatever kind, attorneys fees, litigation expenses, and costs, or
the stated value of the property in litigation.
HELD#2: NO. The case should not be dismissed due to the underpayment of
docket fees. In Manchester Development Corporation v. Court of Appeals,
this Court held that the court acquires jurisdiction over any case only upon
the payment of the prescribed docket fees, hence, it concluded that the trial
court did not acquire jurisdiction over the case. However, the ruling in
Manchester was clarified in Sun Insurance Office, Ltd. (SIOL) v. Asuncion
when the Court held that in the former there was clearly an effort to defraud
the government in avoiding to pay the correct docket fees, whereas in the
latter the plaintiff demonstrated his willingness to abide by paying the
additional fees as required.
Plainly, while the payment of the prescribed docket fee is a jurisdictional
requirement, even its non-payment at the time of filing does not
automatically cause the dismissal of the case, as long as the fee is paid
within the applicable prescriptive or reglementary period, more so when the
party involved demonstrates a willingness to abide by the rules prescribing
such payment. Thus, when insufficient filing fees were initially paid by the
plaintiffs and there was no intention to defraud the government, the
Manchester rule does not apply.
In the case at bar, a more liberal interpretation of the rules is called for
considering that respondent merely relied on the assessment made by the
clerk of court which turned out to be incorrect. Under the circumstances, the
clerk of court has the responsibility of reassessing what respondent must pay
within the prescriptive period, failing which the complaint merits dismissal.
WHEREFORE, the petition is GRANTED in part. The July 25, 2001 Decision and
the December 18, 2001 Resolution of the Court Appeals are hereby
MODIFIED. The Clerk of Court of the Regional Trial Court of Makati City is
ordered to reassess and determine the docket fees that should be paid by
respondent, BNP, in accordance with the Decision of this Court, and direct
respondent to pay the same within fifteen (15) days, provided the applicable

prescriptive or reglementary period has not yet expired. Thereafter, the trial
court is ordered to proceed with the case with utmost dispatch.

G.R. No. 186720

February 8, 2012

ELSA D. MEDADO, Petitioner,

vs.
HEIRS OF THE LATE ANTONIO CONSING, as represented by DR. SOLEDAD
CONSING, Respondents.
Topic: Forum shopping; verification
Facts:
Sometime in 1996, petitioner Meritus Rey Medado and Elsa Medado (Spouses
Medado) and the estate of the late Antonio Consing (Estate of Consing), as
represented by Soledad Consing (Soledad), executed Deeds of Sale with
Assumption of Mortgage for the former's acquisition from the latter of the
property in Cadiz City identified as Hacienda Sol.
Subsequent to the sale, however, the Estate of Consing offered the subject
lots to the government via the Department of Agrarian Reform's Voluntary
Offer to Sell (VOS) program. On November 22, 2000, the Estate of Consing
also instituted with the RTC, Branch 44 of Bacolod City an action for
rescission and damages, docketed as Civil Case No. 00-11320 against
Spouses Medado,PNB and the Register of Deeds of Cadiz City, due to the
alleged failure of the spouses to meet the conditions in their agreement.
In the meantime that Civil Case No. 00-11320 for rescission was pending,
Land Bank of the Philippines (LBP) issued in favor of the Estate of Consing a
certificate of deposit of cash and agrarian reform bonds, as compensation for
the lots covered by the VOS. Spouses Medado feared that LBP would release
the full proceeds thereof to the Estate of Consing. They claimed to be the
ones entitled to the proceeds considering that they had bought the
properties through the Deeds of Sale with Assumption of Mortgage which
they and the Estate of Consing had earlier executed.

The foregoing prompted Spouses Medado to institute Civil Case No. 797-C,
an action for injunction with prayer for the issuance of a temporary
restraining order, with the RTC, Cadiz City. RTC of Cadiz City issued an
Order[4] granting Spouses Medado's application for the issuance of writs of
preliminary prohibitory and mandatory injunction.
Feeling aggrieved, the heirs of the late Antonio Consing (Consing) questioned
the RTC's order via a petition for certiorari filed with the CA. They sought,
among other reliefs, the dismissal of the complaint for injunction for violation
of the rules on litis pendentia and forum shopping. The CA ruled that the RTC
gravely abused its discretion in taking cognizance of Civil Case No. 797-C for
injunction during the pendency of Civil Case No. 00-11320 for rescission and
damages as this violates the rule against forum shopping. Spouses Medado's
motion for reconsideration of the decision was denied by the CA hence, this
petition.

The petitioner contended that the consolidated verification and certification

against forum shopping of the petition filed with the CA was defective: first,
for being signed only by Soledad, instead of by all the petitioners. Another
contention is that there was a violation of the rule against forum shopping
when Spouses Medado instituted Civil Case No. 797-C for injunction
notwithstanding the pendency of Civil Case No. 00-11320 for rescission of
contract and damages.
Issues:
1.
Whether or not the CA correctly admitted the petition for certiorari filed
before it, notwithstanding alleged deficiencies in its verification and
certification against forum shopping;

2.
Whether or not the CA correctly held that the rule against forum
shopping was violated by the filing of the complaint for injunction during the
pendency of the action for rescission and damages.

Ruling:

1.
The requirements for verification and certification against forum shopping in
the CA petition were substantially complied with, following settled
jurisprudence.
Before us, the petitioner contended that the consolidated verification and
certification against forum shopping of the petition filed with the CA was
defective: first, for being signed only by Soledad, instead of by all the
petitioners, and second, its jurat cites a mere community tax certificate of
Soledad, instead of a government-issued identification card required under
the 2004 Rules on Notarial Practice. The second ground was never raised by
herein petitioner in her comment on the CA petition, thus, it cannot be
validly raised by the petitioner at this stage.
As regards the first ground, records show that Soledad signed the verification
and certification against forum shopping on behalf of her co-petitioners by
virtue of a Special Power of Attorney10 (SPA) attached to the petition filed
with the CA. The SPA, signed by her co-heirs Ma. Josefa Consing Saguitguit,
Ma. Carmela Consing Lopez, Ma. Lourdes Consing Gonzales and Mary Rose
Consing Tuason, provides that their attorney-in-fact Soledad is authorized:
To protect, sue, prosecute, defend and adopt whatever action necessary and
proper relative and with respect to our right, interest and participation over
said properties.
As may be gleaned from the foregoing, the authority of Soledad includes the
filing of an appeal before the CA, including the execution of a verification and
certification against forum shopping therefor, being acts necessary "to
protect, sue, prosecute, defend and adopt whatever action necessary and
proper" in relation to their rights over the subject properties.
In addition, the allegations and contentions embodied in the CA petition do
not deviate from the claims already made by the heirs in Civil Case Nos. 0011320 and 797-C, both specifically mentioned in the SPA. We emphasize that
the verification requirement is simply intended to secure an assurance that
the allegations in the pleading are true and correct, and not the product of
the imagination or a matter of speculation, and that the pleading is filed in
good faith.12 We rule that there was no deficiency in the petition's
verification and certification against forum shopping filed with the CA.
In any case, we reiterate that where the petitioners are immediate relatives,
who share a common interest in the property subject of the action, the fact

that only one of the petitioners executed the verification or certification of

forum shopping will not deter the court from proceeding with the action
Furthermore, we have consistently held that verification of a pleading is a
formal, not a jurisdictional, requirement intended to secure the assurance
that the matters alleged in a pleading are true and correct. Thus, the court
may simply order the correction of unverified pleadings or act on them and
waive strict compliance with the rules. It is deemed substantially complied
with when one who has ample knowledge to swear to the truth of the
allegations in the complaint or petition signs the verification; and when
matters alleged in the petition have been made in good faith or are true and
correct.
2.
There is forum shopping when the elements of litis pendentia are present,
i.e., between actions pending before courts, there exist: (1) identity of
parties, or at least such parties as represent the same interests in both
actions, (2) identity of rights asserted and relief prayed for, the relief being
founded on the same facts, and (3) the identity of the two preceding
particulars is such that any judgment rendered in the other action will,
regardless of which party is successful, amount to res judicata in the action
under consideration. Applying the foregoing, there was clearly a violation of
the rule against forum shopping when Spouses Medado instituted Civil Case
No. 797-C for injunction notwithstanding the pendency of Civil Case No. 0011320 for rescission of contract and damages.

All elements of litis pendentia are present with the filing of the two cases.
There is no dispute that there is identity of parties representing the same
interests in the two actions, both involving the estate and heirs of the late
Consing on one hand, and Spouses Medado on the other. The rescission case
names Soledad T. Consing, for herself and as administratrix of the estate of
Antonio Consing as plaintiff, with Spouses Meritus Rey and Elsa Medado,
[PNB] and the Register of Deeds of Cadiz City as respondents.The injunction
case, on the other hand, was instituted by Spouses Medado, against (LBP)
and the Heirs of the Late Antonio Consing, as represented by Dra. Soledad
Consing. The primary litigants in the two action, and their interests, are the
same.

The two other elements are likewise satisfied. There is an identity of

rights asserted and reliefs prayed for in the two cases, with the reliefs being
founded on the same set of facts. In both cases, the parties claim their
supposed right as owners of the subject properties. They all anchor their
claim of ownership on the deeds of absolute sale which they had executed,
and the law applicable thereto. They assert their respective rights, with
Spouses Medado as buyers and the heirs as sellers, based on the same set of
facts that involve the deeds of sale's contents and their validity. Both actions
necessarily involve a ruling on the validity of the same contract as against
the same parties. Thus, the identity of the two cases is such as would render
the decision in the rescission case res judicata in the injunction case, and
vice versa.

The CA was then correct in ordering the dismissal of the complaint in Civil
Case No. 797-C for violation of the rule against forum shopping. The issue on
the validity of the subject deeds of absolute sale can best be addressed in
the action for rescission, as against the case for injunction filed by Spouses
Medado. In a line of cases, we have set the relevant factors that courts must
consider when they have to determine which case should be dismissed,
given the pendency of two actions, to wit:
(1) the date of filing, with preference generally given to the first action filed
to be retained;
(2) whether the action sought to be dismissed was filed merely to preempt
the latter action or to anticipate its filing and lay the basis for its dismissal;
and
(3) whether the action is the appropriate vehicle for litigating the issues
between the parties.
REMEDIAL LAW>Civil Procedure>Rules 1 to 3

ANTONIO NAVARRO and GRAHMMS, INC., petitioners,

vs.

METROPOLITAN BANK & TRUST COMPANY, THE HON. COURT OF APPEALS,

and THE HON. ZEUS C. ABROGAR (Presiding Judge of the Regional Trial Court
of Makati City, Branch 150), respondents.
G.R. No. 138031, May 27, 2004
(SECOND DIVISION)

FACTS: MBTC filed with RTC Makati a petition for judicial foreclosure of real
estate mortgage executed by the petitioners in its favor. The Order which
granted such petition was received by the petitioners on February 10, 1998
and on February 18, 1998 filed a Motion for Reconsideration. The denial of
such Motion was in turn received by the Petitioners on April 7, 1998. On April
14, 1998, last day of reglementary period to appeal, Petitioners filed a Notice
of Appeal, but failed to pay the requisite docket and other lawful fees.
Respondent filed a Motion to Deny Due Course with Motion for Execution,
which was granted by the RTC.
The counsel for Petitioners informed the court that on June 9, 1998, he
sent his messenger to the court to pay the docket fees but was refused by
the receiving clerk. The Petitioner then filed with the CA a petition for
certiorari, but was also denied.

ISSUE: Whether or not the appeal was duly and seasonably perfected?

RTC: Payment of docket fees should be made to the Office of the Clerk of
Court, with only the official receipts filed in court to be attached to the record
of the case to be forwarded to the CA.
PETITIONERS: Payment of docket fees is not a prerequisite for perfection of
an appeal. The court should provide them the leniency since the reason for
the delay was the negligence of the secretary of the firm.

HELD: NO.

The Court has consistently held that the "payment of docket fees within the
prescribed period is mandatory for the perfection of an appeal. Without such
payment, the appeal is not perfected. The appellate court does not acquire
jurisdiction over the subject matter of the action and the decision sought to
be appealed from becomes final and executory. Its strict application is
qualified by the following: first, failure to pay those fees within the
reglementary period allows only discretionary, not automatic, dismissal;
second, such power should be used by the court in conjunction with its
exercise of sound discretion in accordance with the tenets of justice and fair
play, as well as with a great deal of circumspection in consideration of all
attendant circumstances. In the present case, the petitioners failed to
establish any sufficient and satisfactory reason to warrant a relaxation of the
mandatory rule on the payment of appellate docket and other lawful fees.
The negligence of clerks which adversely affect the cases handled by lawyers
is binding upon the latter.

Case #28- Relucio vs Lopez

[G.R. No. 138497. January 16, 2002]

IMELDA RELUCIO, petitioner, vs. ANGELINA MEJIA LOPEZ, respondent.

FACTS: Lopez filed a petition for appointment as sole administrator of

conjugal properties against Alberto Lopez and Relucio in RTC Makati. She
alleged that she was legally married to Alberto, but he abandoned her and
their 4 legitimate children, that he arrogated unto himself full and exclusive
control and administration of the conjugal properties, that he spends such for
his sole benefit, and that after abandoning her, he maintained an illicit
relationship and cohabited with Relucio. During their cohabitation, they
amassed a fortune, and Lopez alleges that such were acquired principally
through the actual contribution of money, property and industry of Alberto,
with minimal, if not nil, actual contribution from Relucio. She alleges that
Alberto excluded her and their children from any fruits or income derived
from the conjugal properties. He also allegedly sold, alienated, etc.,
properties belonging to the conjugal partnership.

Relucio filed a Motion to Dismiss (MTD); there was no cause of action against
her. MTD was denied; she is impleaded as a necessary or indispensable party
because some of the properties are registered in her name and Alberto, or
solely in her name. Relucio filed an MR, but was denied. She filed a petition
for certiorari with the CA, who likewise denied the petition, as well as the
subsequent MR.

ISSUES: 1.) Whether respondents petition for appointment as sole

administratrix of the conjugal property, accounting, etc. against her husband
Alberto J. Lopez established a cause of action against petitioner.
2.) Whether petitioners inclusion as party defendant is essential in the
proceedings for a complete adjudication of the controversy

HELD: 1.) The Supreme Court ruled in the negative. It is well settled that a
cause of action is an act or omission of one party, the defendant in violation
of the legal right of the other. The elements of the cause of action are: (1) a
right in favor of the plaintiff by whatever means and under whatever law it
arises or is created; (2) an obligation on the part of the named defendant to
respect or not to violate such right; (3) an act or omission on the part of such
defendant in violation of the right of the plaintiff as constituting a breach of
the obligation of the defendant to the plaintiff for which the latter may
maintain an action for recovery of damages. A perusal of the Nature of the
Complaint filed by the respondent reveals that it is a complaint by an
aggrieved party wife against her husband. Nowhere in the allegations does it
appear that relief is sought against petitioner. The causes of action filed by
respondent showed that petitioner is a complete stranger to the causes of
action as regards judicial appointment, accounting by respondent husband,
forfeiture of share of husband and support. Clearly, there is no right-duty
relation between petitioner and respondent that can possibly support a
cause of action.

2.) NO. Relucio is not an indispensable or necessary party. The first cause of
action is for judicial appointment as administratrix. The administration of the
property of the marriage is entirely between the spouses, to the exclusion of

all other persons. There is no right-duty relation between Lopez and Relucio
that would support a cause of action. The second cause of action is for an
accounting, which is arises from or is an incident of marriage. As Relucio has
nothing to do with the marriage, no cause of action can exist. The third cause
of action is for forfeiture of Alberto's share in the property mentioned. It does
not involve the issue of validity of the co-ownership between Alberto and
Relucio. The issue is whether there is basis in law to forfeit Albertos share, if
any there be, in property coowned by him with Relucio. The asserted right to
forfeit extends to Alberto's share alone. Lopez sought support, but a stranger
cannot be compelled to give support. As to the claim for moral damages, the
claim is against Alberto. To sustain a cause of action for moral damages, the
complaint must have the character of an action for interference with marital
or family relations under the Civil Code. A real party in interest is one who
stands to be benefited or injured by the judgment of the suit. Relucio
would not be affected by any judgment. If Relucio is not a real party in
interest, she cannot be an indispensable party. An indispensable party is one
without whom there can be no final determination of an action. Nor can
Relucio be a necessary party in the Special Proceedings. A necessary party is
one who is not indispensable but who ought to be joined as party if complete
relief is to be accorded those already parties, or for a complete
determination or settlement of the claim subject of the action.