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TOPIC: DEFAULT

Sablas vs. Sablas

G.R. No. 144568. July 3, 2007

Facts:

A complaint for judicial partition, inventory and accounting was filed by respondents Esterlita S. Sablas and
Rodulfo S. Sablas against petitioner
spouses Pascual Lumanas and Guillerma S. Sablas.

Petitioner spouses were served with summons and a copy of the complaint on October 6, 1999. On October 21,
1999, they filed a motion for extension of time requesting an additional period of 15 days, or until November 5,
1999,
to filetheir answer. However, they were able to file it only on November 8, 1999. While the trial court observed
that the answer was filed out of time, it admitted the pleading because no motion to declare petitioner spouses in
default was filed. The following day, November 9, 1999, respondents filed a motion to declare petitioner
spouses in default. It was denied by the trial court.

Issue: WON spouses Sablas are in default.

Held: NO.

WHERE THERE IS NO MOTION,THERE CAN BE NO


DECLARATION OF DEFAULT
The elements of a valid declaration of default are:
1. The court has validly acquired jurisdiction over the person of the defending party either by service of
summons or voluntary appearance
2. The defending party failed to file the answer within the time allowed therefor and
3. A motion to declare the defending party in default has been filed by the claiming party with notice to the
defending party.

An order of default can be made only upon motion of the claiming party. It can be properly issued against the
defending party who failed to file the answer within the prescribed period only if the claiming party files a
motion to that effect with notice to the defending party.

In this connection, Section 3, Rule 9 of the Rules of Court provides:


SEC. 3. Default: Declaration of.If the defending party fails to answer within the time allowed therefor, the
court shall, upon motion of the claiming party with notice to the defending party, and proof of such failure,
declare the defending party in default. x x x. (emphasis supplied)

Three requirements must be complied with before the court can declare the defending party in default: (1) the
claiming party must file a motion asking the court to declare the defending party in default (2) the defending
party must be notified of the motion to declare him in default and (3) the claiming party must prove that the
defending party has failed to answer within the period provided by the Rules of Court.

The rule on default requires the filing of a motion and notice of such motion to the defending party. It is not
enough that the defendant fails to answer the complaint within the reglementary period. The trial court cannot

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motu proprio declare a defendant in default as the rules leave it up to the claiming party to protect his or its
interests. The trial court should not under any circumstances act as counsel of the claiming party.

WHERE THERE IS NO DECLARATION OF DEFAULT,ANSWER MAY BE ADMITTED EVEN IF


FILED OUT OF TIME

It is within the sound discretion of the trial court to permit the defendant to file his answer and to be heard on
the merits even after the reglementary period for filing the answer expires. The Rules of Court provides for
discretion on the part of the trial court not only to extend the time for filing an answer but also to allow an
answer to be filed after the reglementary period. Thus, the appellate court erred when it ruled that the trial court
had no recourse but to declare petitioner spouses in default when they failed to file their answer on or before
November 5, 1999. The rule is that the defendants answer should be admitted where it is filed before a
declaration of default and no prejudice is caused to the plaintiff. Where the answer is filed beyond the
reglementary period but before the defendant is declared in default and there is no showing that defendant
intends to delay the case, the answer should be admitted.

WHERE ANSWER HAS BEEN FILED, THERE CAN BE NO DECLARATION OF DEFAULT


ANYMORE
Since the trial court already admitted the answer, it was correct in denying the subsequent motion of
respondents to
declare petitioner spouses in default.

MAGDIWANG REALTY CORPORATION, RENATO P. DRAGON and ESPERANZA TOLENTINO, vs.


THE MANILA BANKING CORPORATION, substituted by FIRST SOVEREIGN ASSET MANAGEMENT
(SPVAMC), INC.,

G.R. No. 195592. September 5, 2012

Facts:

The case stems from a complaint for a sum of money filed on April 18, 2000 by herein respondent, The Manila
Banking Corporation (TMBC), against herein petitioners, Magdiwang Realty Corporation (Magdiwang),
Renato P. Dragon (Dragon) and Esperanza Tolentino (Tolentino), after said petitioners allegedly defaulted in the
payment of their debts under the five promissory notes they executed in favor of TMBC.

Instead of filing a responsive pleading with the trial court, the petitioners filed on October 12, 2000, which was
notably beyond the fifteen (15)day period allowed for the filing of a responsive pleading, a Motion for Leave to
Admit Attached Motion to Dismiss and a Motion to Dismiss, raising therein the issues of novation, lack of
cause of action against individuals Dragon and Tolentino, and the impossibility of the novated contract due to a
subsequent act of the Congress.

The motions were opposed by the respondent TMBC, via its Opposition which likewise asked that the
petitioners be declared in default for their failure to file their responsive pleading within the period allowed
under the law. Acting on these incidents, the RTC issued an Order on July 5, 2001 declaring the petitioners in
default. Acting on these incidents, the RTC issued an Order8 on July 5, 2001 declaring the petitioners in default.

The record shows that as per Officers Return dated 19 September 2000, summons were served on even date by
way of substituted service. Summons were received by a certain LINDA G. MAN LIMOS, a person of

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sufficient age and discretion then working/residing at the address indicated in the Complaint at No. 15 Tamarind
St., Forbes Park, Makati City.

Consequently, in accordance with the Rules, defendants should have filed an Answer or Motion to Dismiss or
any responsive pleading for that matter within the reglementary period, which is [fifteen] (15) days from receipt
of Summons and a copy of the complaint with attached annexes. Accordingly, defendants should have filed their
responsive pleading on October 2, 2000 but no pleading was filed on the aforesaid date, not even a Motion for
Extension of Time. Instead, defendants Motion to Dismiss [found its] way into the court only on the 13th day
of October, clearly beyond the period contemplated by the Rules.

A perusal of the Motion for Leave to Admit the Motion to Dismiss filed by defendants reveals that the case, as
claimed by the counsel for defendants, was just referred to the counsel only on October 10, and further
insinuated that the Motion to Dismiss was only filed on the said date in view of the complicated factual and
legal issues involved. While this Court appreciates the efforts and tenacity shown by defendants counsel for
having prepared a [lengthy] pleading for his clients in so short a time, the Court will have to rule that the
Motion to Dismiss was nonetheless filed out of time, hence, there is sufficient basis to declare defendant[s] in
default.

Unsatisfied with the RTC orders, the petitioners filed with the CA a petition for certiorari. In a Decision dated
December 2, 2006, the CA affirmed the RTC orders after ruling that the trial court did not commit grave abuse
of discretion when it declared herein petitioners in default. The petitioners motion for reconsideration was
denied by the trial court in its Order dated August 2, 2005. The ex parte presentation of evidence by the bank
before the trial courts Presiding Judge was scheduled in the same Order.
appeal.

On May 20, 2007, the RTC rendered its Decision in favor of TMBC and against herein petitioners.

The petitioners motion for reconsideration was denied by the trial court via its Order17 dated November 5,
2007.
Feeling aggrieved, the petitioners appealed to the CA, imputing error on the part of the trial court in: (1) not
declaring that TMBCs cause of action was already barred by the statute of limitations (2) declaring herein
petitioners liable to pay TMBC despite the alleged novation of the subject obligations (3) declaring TMBC
entitled to its claims despite the alleged failure of the bank to substantiate its claims (4) declaring TMBC
entitled to attorneys fees and litigation expenses and (5) declaring herein petitioners in default.

On October 11, 2010, the CA rendered its Decision dismissing the petitioners appeal.

Issue: WON petitioners are in default

Held: YES.

The petitioners failed to file their answer to TMBCs complaint within the reglementary period allowed under
the Rules of Court. The validity of the trial courts declaration of their default is a settled matter, following the
denial of the petitions previously brought by the petitioners before the CA and this Court questioning it.
As correctly stated by the CA in the Decision dated October 11, 2010:

At the outset, it behooves this Court to accentuate that the Order of the trial court declaring the defendants-
appellants in default for their failure to file their responsive pleading to the complaint within the period

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prescribed under Section 3 of Rule 9 of the Revised Rules of Court had been declared final and beyond review
already by the Supreme Court through its Resolution dated March 5, 2008 and June 25, 2008. Judicial decisions
of the Supreme Court, as the final arbiter of any justiciable controversy, assume the same authority as the law
itself.

Thus, the issue raised by the defendantsappellants questioning the wisdom of the trial courts decision in
declaring them in default is now rendered moot and academic by the aforecited Supreme Court resolutions.

The petitioners default by their failure to file their answer led to certain consequences. Where defendants
before a trial court are declared in default, they thereby lose their right to object to the reception of the
plaintiffs
evidence establishing his cause of action. This is akin to a failure to, despite due notice, attend in court hearings
for
the presentation of the complainants evidence, which absence would amount to the waiver of such defendants
right to object to the evidence presented during such hearing, and to crossexamine the witnesses presented
therein.

Taking into consideration the banks allegations in its complaint and the totality of the evidence presented in
support thereof, coupled with the said circumstance that the petitioners, by their own inaction, failed to make
their timely objection or opposition to the evidence, both documentary and testimonial, presented by TMBC to
support its case, we find no cogent reason to reverse the trial and appellate courts findings. We stress that in
civil cases, the party having the burden of proof must establish his case only by a preponderance of evidence.

Lim vs. National Power Corporation


G.R. No. 178789. November 14, 2012

Facts:

On February 8, 1995 respondent National Power Corporation (NPC) filed an expropriation suit1 against
petitioner Natividad B. Lim (Lim) before the Regional Trial Court (RTC) of Lingayen, Pangasinan covering
Lots 2373 and 2374 that the NPC needed for its Sual Coal-Fired Thermal Power Project.

Since Lim was residing in the United States, the court caused the service of summons on her on February 20,
1995
through her tenant, a certain Wilfredo Tabongbong. On March 1, 1995, upon notice to Lim and the deposit of
the
provisional value of the property, the RTC ordered the issued writ of possession in NPCs favor that would
enable
it to cause the removal of Lim from the land.

On April 24, 1995, however, Lim, represented by her husband Delfin, filed an omnibus motion to dismiss the
action and to suspend the writ of possession, questioning the RTCs jurisdiction over Lims person and the
nature of the action. She also assailed the failure of the complaint to state a cause of action. The RTC denied the
motions.

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On December 6, 1996 respondent spouses Roberto and Arabela Arcinue (the Arcinues) filed a motion for leave
to
admit complaint in intervention, alleging that they owned and were in possession of Lot 2374, one of the two
lots
subject of the expropriation. On January 7, 1997 the RTC granted the Arcinues motion and required both the
NPC and Lim to answer the complaintinintervention within 10 days from receipt of its order.

When Lim and the NPC still did not file their answers to the complaint-in-intervention after 10 months, on
December 7, 1998 the Arcinues filed a motion for judgment by default. Lim sought to expunge the motion on
the
ground that it lacked the requisite explanation why the Arcinues resorted to service by registered mail rather
than to personal service. At the scheduled hearing of the motion, Lims counsel did not appear. The NPC for its
part manifested that it did not file an answer since its interest lay in determining who was entitled to just
compensation.

On March 1, 1999 the RTC issued an order of default against both Lim and the NPC. The RTC pointed out that
the Arcinues failure to explain their resort to service by registered mail had already been cured by the
manifestation of Lims counsel that he received a copy of the Arcinues motion on December 7, 1998 or 10 days
before its scheduled hearing.

Lim filed a motion for reconsideration to lift the default order but the Court denied the motion, prompting Lim
to file a petition for certiorari before the Court of Appeals (CA).

Issue: WON Lim is in default.

Held: YES.

Lim points out that an answer-in-intervention cannot give rise to default since the filing of such an answer is
only
permissive. But Section 4, Rule 1919 of the 1997 Rules of Civil Procedure requires the original parties to file an
answer to the complaint-in-intervention within 15 days from notice of the order admitting the same, unless a
different period is fixed by the court. This changes the procedure under the former rule where such an answer
was
regarded as optional. Thus, Lims failure to file the required answer can give rise to default.

Lim contends that the RTC should have ordered the Arcinues motion for judgment by default expunged from
the records since it lacked the requisite explanation as to why they resorted to service by registered mail in place
of
personal service.

There is no question that the Arcinues motion failed to comply with the requirement of Section 11, Rule 13 of
the
1997 Rules of Civil Procedure which provides:

SECTION 11. Priorities in modes of service and


filing.Whenever practicable, the service and filing of pleadings and other papers shall be done personally.
Except with respect to papers emanating from the court, a resort to other modes must be accompanied by a

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written explanation, why the service or filing was not done personally. A violation of this Rule may be cause to
consider the paper as not filed.

But the above does not provide for automatic sanction should a party fail to submit the required explanation. It
merely provides for that possibility considering its use of the term may. The question is whether or not the
RTC
gravely abused its discretion in not going for the sanction of striking out the erring motion. The Court finds no
such grave abuse of discretion here. As the RTC pointed out, notwithstanding that the Arcinues failed to explain
their resort to service by registered mail rather than by personal service, the fact is that Lims counsel expressly
admitted having received a copy of the Arcinues motion for judgment by default on December 7, 1998 or 10
days before its scheduled hearing. This means that the Arcinues were diligent enough to file their motion by
registered mail long before the scheduled hearing.

Personal service is required precisely because it often happens that hearings do not push through because, while
a copy of the motion may have been served by registered mail before the date of the hearing, such is received by
the
adverse party already after the hearing. Thus, the rules prefer personal service. But it does not altogether
prohibit
service by registered mail when such service, when adopted, ensures as in this case receipt by the adverse party.

TOPIC: MOTION

EFFECTS OF NON-COMPLIANCE

Anama vs. Court of Appeals

G.R. No. 187021. January 25, 2012

Facts:

Sometime in 1973, the Petitioner, Douglas F. Anama (Anama), and the Respondent, Philippine Savings Bank
(PSB), entered into a Contract to Buy, on installment basis, the real property owned by the latter. However,
Anama defaulted in paying his obligations thereunder, thus, PSB rescinded the said contract and title to the
property remained with the latter. Subsequently, the property was sold by PSB to the Spouses Saturnina Baria
and Tomas Co (Co Spouses) who, after paying the purchase price in full, caused the registration of the same in
their names and were, thus, issued TCT No. 14239.

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Resultantly, Anama filed before the Respondent Court a complaint for declaration of nullity of the deed of sale,
cancellation of transfer certificate of title, and specific performance with damages against PSB, the Co Spouses,
and the Register of Deeds of Metro Manila, District II.

On August 21, 1991 and after trial on the merits, the Respondent Court dismissed Anamas complaint and
upheld the validity of the sale between PSB and the Co Spouses. Undaunted, Anama appealed, at first, to this
Court, and after failing to obtain a favorable decision, to the Supreme Court.

On January 29, 2004, the Supreme Court rendered judgment denying Anamas petition and sustaining the
validity of the sale between PSB and the Co Spouses. Its decision became final and executory on July 12, 2004.
Pursuant thereto, the Co Spouses moved for execution, which was granted by the Respondent Court per its
Order, dated November 25, 2005.

Aggrieved, Anama twice moved for the reconsideration of the Respondent Courts November 25, 2005 Order
arguing that the Co Spouses motion for execution is fatally defective. He averred that the Spouses motion was
pro forma because it lacked the required affidavit of service and has a defective notice of hearing, hence, a mere
scrap of paper. The Respondent Court, however, denied Anamas motion(s) for reconsideration.

Dissatisfied, the petitioner questioned the RTC Order before the CA for taking judicial cognizance of the motion
for execution filed by spouses Tomas Co and Saturnina Baria (Spouses Co) which was (1) not in accord with
Section
4 and Section 15 of the Rules of Court because it was without a notice of hearing addressed to the parties and
(2)
not in accord with Section 6, Rule 15 in conjunction with Section 13, Rule 13 of the Rules of Court because it
lacks
the mandatory affidavit of service.

Basically, petitioner argues that the respondents failed to substantially comply with the rule on notice and
hearing
when they filed their motion for the issuance of a writ of execution with the RTC. He claims that the notice of
hearing in the motion for execution filed by the Spouses Co was a mere scrap of paper because it was addressed
to the Clerk of Court and not to the parties. Thus, the motion for execution did not contain the required proof of
service to the adverse party. He adds that the Spouses Co and their counsel deliberately misserved the copy of
their motion for execution, thus, committing fraud upon the trial court.

Issue: WON respondents failed to substantially comply with the rule on notice and hearing when they filed their
motion for the issuance of a writ of execution with the RTC.

Held: NO.

On the subject procedural question, the Court finds no compelling reason to stay the execution of the judgment
because the Spouses Co complied with the notice and hearing requirements under Sections 4, 5 and 6 of Rule
15.
Said sections, as amended, provide:

SECTION 4. Hearing of motion.Except for motions which the court may act upon without prejudicing the
rights of the adverse party, every written motion shall be set for hearing by the applicant. Every written motion

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required to be heard and the notice of the hearing thereof shall be served in such a manner as to ensure its
receipt by the other party at least three (3) days before the date of hearing, unless the court for good cause sets
the hearing on shorter notice.

SECTION 5. Notice of hearing.The notice of hearing shall be addressed to all parties concerned, and shall
specify the time and date of the hearing which must not be later than ten (10) days after the filing of the motion.

SECTION 6. Proof of service necessary.No written motion set for hearing shall be acted upon by the court
without proof of service thereof.

Pertinently, Section 13 of Rule 13 of the 1997 Rules of Civil Procedure, as amended, provides:

SEC. 13. Proof of service.Proof of personal service shall consist of a written admission of the party served,
or the official return of the server, or the affidavit of the party serving, containing a full statement of the date,
place, and manner of service. If the service is by ordinary mail, proof thereof shall consist of an affidavit of the
person mailing of facts showing compliance with section 7 of this Rule. If service is made by registered mail,
proof shall be made by such affidavit and the registry receipt issued by the mailing office. The registry return
card shall be filed immediately upon its receipt by the sender, or in lieu thereof the unclaimed letter together
with the certified or sworn copy of the notice given by the postmaster to the addressee.

Elementary is the rule that every motion must contain the mandatory requirements of notice and hearing and
that
there must be proof of service thereof. The Court has consistently held that a motion that fails to comply with
the above requirements is considered a worthless piece of paper which should not be acted upon. The rule,
however,
is not absolute. There are motions that can be acted upon by the court ex parte if these would not cause
prejudice to the other party. They are not strictly covered by the rigid requirement of the rules on notice and
hearing of motions.
The motion for execution of the Spouses Co is such kind of motion.

It cannot be denied that the judgment sought to be executed in this case had already become final and executory.
As such, the Spouses Co have every right to the issuance of a writ of execution and the RTC has the ministerial
duty to enforce the same. This right on the part of the Spouses Co and duty on the part of the RTC are based on
Section 1 and Section 2 of Rule 39 of the 1997 Revised Rules of Civil Procedure provides, as follows:

Section 1. Execution upon judgments or final orders.


Execution shall issue as a matter of right, on motion, upon a judgment or order that disposes of the action or
proceeding upon the expiration of the period to appeal therefrom if no appeal has been duly perfected. If the
appeal has been duly perfected and finally resolved, the execution may forthwith be applied for in the court of
origin, on
motion of the judgment obligee, submitting therewith certified true copies of the judgment or judgments or final
order or orders sought to be enforced and of the entry thereof, with notice to the adverse party. The appellate
court may, on motion in the same case, when the interest of justice so requires, direct the court of origin to issue
the writ of execution.

SEC. 2. Discretionary execution.


(a) Execution of a judgment or final order pending appeal.

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On motion of the prevailing party with notice to the adverse party filed in the trial court while it has jurisdiction
over the case and is in possession of either the original record or the record on appeal, as the case may be, at the
time of the filing of such motion, said court may, in its discretion, order execution of a judgment or final order
even before the expiration of the period to appeal. After the trial court has lost jurisdiction, the motion for
execution pending appeal may be filed in the appellate court. Discretionary execution may only issue upon good
reasons to be stated in a special order after due hearing.

(b) Execution of several, separate or partial judgments.A several, separate or partial judgment may be
executed under the same terms and conditions as execution of a judgment or final order pending appeal. (2a)
[Emphases and underscoring
supplied]

As can be gleaned therefrom, under Paragraph 1 of Section 1 of Rule 39 of the 1997 Revised Rules of Civil
Procedure, the Spouses Co can have their motion for execution executed as a matter of right without the needed
notice and hearing requirement to petitioner. This is in contrast to the provision of Paragraph 2 of Section 1 and
Section 2 where there must be notice to the adverse party. At any rate, it is not true that the petitioner was not
notified of the motion for execution of the Spouses Co. The records clearly show that the motion for execution
was duly served upon, and received by, petitioners counsel of record, the Quasha Ancheta Pena Nolasco Law
Offices, as
evidenced by a signed stamped received mark appearing on said pleading. The records are bereft of proof
showing
any written denial from petitioners counsel of its valid receipt on behalf of its client. Neither is there proof that
the Quasha Ancheta Pena Nolasco Law Offices has formally withdrawn its appearance as petitioners
counselofrecord.

Considering that there is enough proof shown on record of personal delivery in serving the subject motion for
execution, there was a valid compliance with the Rules, thus, no persuasive reason to stay the execution of the
subject final and executory judgment.

The threeday notice rule is not absolute. A liberal construction of the procedural rules is proper where the lapse
in
the literal observance of a rule of procedure has not prejudiced the adverse party and has not deprived the court
of its authority.

Indeed, Section 6, Rule 1 of the Rules of Court provides that the Rules should be liberally construed in order to
promote their objective of securing a just, speedy and inexpensive disposition of every action and proceeding.
Rules of procedure are tools designed to facilitate the attainment of justice, and courts must avoid their strict
and rigid application which would result in technicalities that tend to frustrate rather than promote substantial
justice.

Manila Electric Company vs. La Campana Food Products,


Inc.
G.R. No. 97535. August 4, 1995

Facts:

A complaint was filed on August 21, 1990, by private respondent La Campana Food Products, Inc. (hereinafter

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La Campana) against petitioner Manila Electric Company (hereinafter Meralco) for recovery of a sum of money
with preliminary injunction after it was served a notice of disconnection by the latter for alleged nonpayment
of the following billings:

(a) the differential billing in the sum P65,619.26, representing the value of electric energy used but not
registered in the meter due to alleged tampering of the metering installation discovered on September 22, 1986
and

(b) the underbilling in the sum of P169,941.29 with a balance of P28,323.55) rendered from January 16, 1987,
to December 16, 1987, due to meter multiplier failure.

Summons and a copy of the complaint were duly served upon Meralco on August 23, 1990. On September 7,
1990, Meralco filed a motion for extension of time of fifteen days from said date within which to file an answer
to the complaint at the Office of the Clerk of Court after the clerk of Branch 78 allegedly refused to receive the
same because the case had already been reraffled.

The motion, however, was not acted upon because it did not contain a notice of hearing as required by Sections
4 and 5, Rule 15 of the Rules of Court.

Meralcos Answer With Counterclaim was actually received at Branch 78 only on September 21, 1990 which
is
beyond the period to answer but within the requested extension.

On account of Meralcos failure to file an answer to the complaint within the reglementary period which expired
on September 7, 1990, La Campana filed on September 28, 1990 and ExParte Motion to Declare Defendant in
Default, which Judge Dayaw granted in an order of default dated October 8, 1990.

After hearing and receiving La Campanas evidence ex parte, the court a quo rendered a decision dated
November
20, 1990, in favor of the plaintiff as against the defendant.

Instead of appealing the said decision to the Court of Appeals under Section 2, Rule 41 of the Rules of Court,
Meralco filed on December 3, 1990, a Motion to Set Aside Judgment by Default and/or for New Trial on the
ground that it filed an answer to the complaint and that the judgment by default was obtained by fraud.

In an order dated January 10, 1991, Judge Dayaw denied the said motion and opined that Meralco cannot
presume that its motion for extension will be granted by the court, especially in this case where its motion for
extension was defective in that it did not contain any notice of date and place of hearing.

Issue: WON MERALCOs motion for extention was defective.

Held: YES.

The attention of Meralco is drawn to the fact that it indeed failed to indicate in its motion for extension of time
to file an answer a notice of place and date of hearing, an omission for which it could offer no explanation. As
we
declared in the case of Gozon, et al. v. Court of Appeals:

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It is wellentrenched in this jurisdiction that a motion which does not meet the requirements of Sections 4 and 5
of Rule 15 of the Rules of Court is considered a worthless piece of paper which the clerk has no right to receive
and the court has no authority to act upon.

Meralco was aware of the importance of such a notice since it insisted in its motion to set aside judgment by
default
and/or for new trial that it should have received notice of hearing of the motion to declare it in default which La
Campana filed ex parte.

La Campana correctly rebutted this argument by citing the early case of Pielago v. Generosa where the Court,
in applying Section 9, Rule 27 of the old Rules of Court (now covered by Section 9 of Rule 13), laid down the
doctrine that a defendant who fails to file an answer within the time provided by the Rules of Court is already in
default and is no longer entitled to notice of the motion to declare him in default.

Thus, when it filed in Branch 78 its answer with counterclaim on September 21, 1990, fourteen days after the
expiration of the period within which to file an answer, Meralco was already in default and, naturally, it had to
bear all the legal consequences of being in default. The judgment by default of November 20, 1990 was based
solely on the evidence presented by La Campana.

The records indicate that Meralco was not certain at this juncture what remedy to adopt: a motion to set aside
the chose to play it safe by using the and/or option. It must be clarified that under the Rules, what an
aggrieved party seeks to set aside is the order of default, an interlocutory order which is, therefore, not
appealable, and not the judgment by default, which is final disposition of the case and appealable to the Court of
Appeals. Notice that in the following pertinent provisions, the Rules expressly state that what may be set aside
is the order of
default, while the judgment itself may be appealed to a higher court.

Granting arguendo that the motion to set aside judgment by default was proper, it was still correctly denied by
respondent Judge for failure to show that Meralcos omission to answer was due to any of the causes mentioned
in Section 3 of Rule 18. At best, the motion only stressed that it was filed on September 21, 1990, within the
requested period of extension, which, as earlier discussed, cannot be presumed to be granted.

Exception:

MARYLOU CABRERA vs. FELIX NG

G.R. No. 201601. March 12, 2014

Facts:

On February 14, 2004, Felix Ng (respondent) filed a complaint for sum of money with the RTC against the
petitioner and her husband Marionilo Cabrera (spouses Cabrera), alleging that the latter issued to him several
Metrobank Checks amounting to P2.5 Million. That when presented for payment, the said checks were all
dishonored as the accounts from which they had been drawn were already closed.

On August 7, 2007, the RTC rendered a Decision, which ordered the spouses Cabrera to pay the respondent the
following:
(1) Two Million Five Hundred SixtyNine Thousand SeventyFour Pesos (P2,569,074.00) plus legal interest from
inception of the obligation until fully paid

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(2) moral damages in the amount of Fifty Thousand Pesos (P50,000.00)

(3) attorneys fees of Twenty Thousand Pesos


(P20,000.00)

and (4) litigation expenses in the amount of Ten Thousand Pesos (P10,000.00).

On August 8, 2007, the spouses Cabrera received a copy of the RTC Decision dated August 7, 2007. On August
14,
2007, the spouses Cabrera filed with the RTC a motion for reconsideration, which they set for hearing on
August 17,
2007. On even date, the spouses Cabrera sent a copy of their motion for reconsideration to the respondent thru
registered mail it was actually received by the respondent on August 21, 2007.

The said motion for reconsideration, however, was not heard on August 17, 2007 as the new acting presiding
judge of the said court had just assumed office. On August 28, 2007, the RTC issued a notice, which set the said
motion for reconsideration for hearing on September 25, 2007. On September 20, 2007, the respondent filed an
opposition to the motion for reconsideration filed by the spouses Cabrera. The respondent alleged that the said
motion for reconsideration is a mere scrap of paper since it violated the threeday
notice requirement.

The respondent pointed out that the spouses Cabrera sent to him a copy of their motion for reconsideration,
which was set for hearing on August 17, 2007, via registered mail on August 14, 2007 that he actually received
a copy thereof only on August 21, 2007 four days after the scheduled hearing thereon.

It appears that the scheduled hearing of the spouses Cabreras motion for reconsideration on September 25,
2007 did not push through. Consequently, on September 26, 2007, the RTC issued another notice, which set the
said motion for reconsideration for hearing on October 26, 2007.

On October 26, 2007, the RTC issued an Order, which directed the parties to file their additional pleadings, after
which the motion for reconsideration filed by the spouses Cabrera would be deemed submitted for resolution.
On December 19, 2007, the RTC issued an Order which denied the motion for reconsideration filed by the
spouses Cabrera. The RTC pointed out that the spouses Cabrera violated Section 4, Rule 15 of the Rules of
Court,
which mandates that every motion required to be heard should be served by the movant in such a manner as to
ensure its receipt by the other party at least three days before the date of hearing.

Issue: WON the 3 days notice is absolute.

Held: No.

The petition is meritorious. Sections 4 and 5, Rule 15 of the Rules of Court provide that: the court may act upon
without prejudicing the rights of the adverse party, every written motion shall be set for hearing by the
applicant.
Every written motion required to be heard and the notice of the hearing thereof shall be served in such a
manner as to ensure its receipt by the other party at least three (3) days before the date of hearing, unless
the court for good cause sets the hearing on shorter notice.

Case Summary in Civil Procedure by: Jessica Bernardo Page 12


Sec. 5. Notice of hearing.The notice of hearing shall be addressed to all parties concerned, and shall specify
the
time and date of the hearing which must not be later than ten (10) days after the filing of the motion. (Emphasis
ours)

The general rule is that the threeday notice requirement in motions under Sections 4 and 5 of the Rules
of Court is mandatory. It is an integral component of procedural due process.

The purpose of the threeday notice requirement, which was established not for the benefit of the movant but
rather for the adverse party, is to avoid surprises upon the latter and to grant it sufficient time to study the
motion and to enable it to meet the arguments interposed therein.

A motion that does not comply with the requirements of Sections 4 and 5 of Rule 15 of the Rules of Court is a
worthless piece of paper which the clerk of court has no right to receive and which the court has no authority to
act
upon. Being a fatal defect, in cases of motions to reconsider a deci sion, the running of the period to appeal is
not tolled by their filing or pendency.

Nevertheless, the threeday notice requirement is not a hard and fast rule. When the adverse party had been
afforded the opportunity to be heard, and has been indeed heard through the pleadings filed in opposition to the
motion, the purpose behind the threeday notice requirement is deemed realized. In such case, the requirements
of procedural due process are substantially complied with.

Thus, in Preysler, Jr. v. Manila Southcoast Development Corporation,21 the Court ruled that:
The threeday notice rule is not absolute. A liberal construction of the procedural rules is proper where the lapse
in the literal observance of a rule of procedure has not prejudiced the adverse party and has not deprived the
court of its authority. Indeed, Section 6, Rule 1 of the Rules of Court provides that the Rules should be liberally
construed in order to promote their objective of securing a just, speedy and inexpensive disposition of every
action and proceeding. Rules of procedure are tools designed to facilitate the attainment of justice, and courts
must avoid their strict and rigid application which would result in technicalities that tend to frustrate rather than
promote substantial justice.

TOPIC: EFFECT OF AMENDED PLEADING

Campos Rueda Corporation vs. Bautista

No. L18453. September 29, 1962

Facts:

Respondent Muyot was employed by petitioner at its gasoline station located at 1012 Azcarraga St. (now Recto
Avenue), Manila, at a monthly salary of P200.00 from May 21, 1949 to May 31, 1953, and at P230.00 from
June 1 to December 31, 1953. On November 26, 1958 he filed a complaint against petitioner with the Court of
Industrial Relations (Case No. 1140V) to recover compensation for alleged overtime, Sunday and holiday
services rendered during said period.

On December 8, 1958 petitioner moved to dismiss the complaint on the following grounds: that the claims set

Case Summary in Civil Procedure by: Jessica Bernardo Page 13


forth therein were barred by (a) the statute of limitations (b) Decision has already been rendered by the DOLE.

Respondent Muyot opposed said motion to dismiss alleging that, as the decisions relied upon therein were
rendered by courts that had no jurisdiction over the subjectmatter, the same did not constitute res judicata
that his causes of action were not barred by the statute of limitations because the legal period provided for in
Section
7A of Commonwealth Act No. 444, as amended by Republic Act No. 1993, was interrupted when he filed a case
with the Department of Labor on October 27, 1955 and another with the Court of First Instance on July 7, 1956.

On March 17, 1959, petitioner filed a supplementary motion to dismiss alleging that the Court had no
jurisdiction over the subjectmatter because the complaint did not seek the reinstatement of Muyot who,
according to the complaint, ceased to be an employee of petitioner since December 31, 1953. In other words,
the claim merely involved collection of pay for overtime, Sunday and holiday work.

On August 3, 1959, the Court of Industrial Relations, through Judge Arsenio I. Martinez, denied petitioners
motion to dismiss and required him to answer the complaint. In its order of August 15, 1959, the respondent
court, in banc, also denied petitioners motion for reconsideration.

On November 11, 1959, petitioner filed its answer denying respondents claim for overtime and Sunday and
holiday
services pay. Among other affirmative defenses it reasserted its contention that respondent court had no
jurisdiction over the subject matter of the case.

The allegations made in Muyots complaint against petitioner show conclusively that his employment with the
latter was terminated on December 31, 1953almost five years before said complaint was filed that, without
asking for his reinstatement, neither directly nor indirectly, he only sought to collect what, in his opinion, was
due and payable to him for overtime, Sunday and holiday services he had rendered to his former employer
during the period of his employment.

Issue: WON the court can acquire jurisdiction over the subject matter upon amendment of the pleading

Held: NO. (Case to case basis)

The Court of Industrial Relations does not have jurisdiction over respondent Muyots claims subject matter of
case No. 1140V filed with said court.

Respondent Muyot must have finally realized that the Court of Industrial Relations had no jurisdiction over his
claims for, according to his answer filed in the present case, he had filed on July 14, 1961more than two years
after the filing of his actiona motion for leave to amend his complaint and to admit the amended complaint
attached to his motion, the amendment consisting precisely in the addition of a third cause of action where,
inter alia, he alleged that on May 31, 1953, he was illegally dismissed by herein petitioner and that, as a
consequence, he was entitled to reinstatement, with back wages from the date of his illegal dismissal up to his
actual reinstatement.

Obviously the purpose of the amendment was to make his case fall within the jurisdiction of the respondent
court.
This attempt is in our opinion, of no avail. It is settled in this jurisdiction that the jurisdiction of a court is
determined by the allegations made in the complaint or petition. On the other hand, we have also held
heretofore that this principle applies to proceedings in the Court of Industrial Relations (Administrator, etc. vs.
Case Summary in Civil Procedure by: Jessica Bernardo Page 14
Alberto, et al., G.R. No. L12133, October 31, 1958).

The insufficiency of the allegations of Muyots complaint to place his action within the jurisdiction of the
respondent court could not be cured by amendment, for in Rosario vs. Carandang, we clearly held that a
complaint can not be amended so as to confer jurisdiction on the court in which it is filed, if the cause of action
originally set forth was not within the courts jurisdiction.

Siasoco vs. Court of Appeals

G.R. No. 132753. February 15, 1999

Facts:

Petitioners were the registered owners of nine parcels of land located in Montalban, Rizal. In December 1994,
they
began to offer the subject properties for sale. Subsequently, Iglesia ni Cristo (INC) negotiated with the
petitioners, but the parties failed to agree on the terms of the purchase.

More than a year later, both parties revived their discussions. In a letter dated December 16, 1996,
petitioners made a final offer to the INC. The latters counsel sent a reply received by Petitioner Mario Siasoco
on December 24, 1996, stating that the offer was accepted, but that the INC was not amenable to your proposal
to an undervaluation of the total consideration.

In their letter dated January 8, 1997, petitioners claimed that the INC had not really accepted the offer, adding
that,
prior to their receipt of the aforementioned reply on December 24, 1996, they had already contracted with
Carissa for the sale of the said properties due to the absence of any response to their offer from INC.
Maintaining that a sale had been consummated, INC demanded that the corresponding deed be executed in its
favor. Petitioners refused.

On January 14, 1997, private respondent filed a civil suit for [s]pecific [p]erformance and [d]amages against
petitioners and Carissa Homes and Development & Properties, Inc.

Petitioners filed therein a Motion to Dismiss on the ground of improper venue and lack of capacity to sue.
Carissa Homes filed its answer to the complaint on February 24, 1997.

Pending resolution of petitioners Motion to Dismiss, private respondent negotiated with Carissa Homes which
culminated in the purchase of the subject properties of Carissa Homes by private respondent.

On April 24, 1997, private respondent filed an [A]mended [C]omplaint, dropping Carissa Homes as one of the
defendants and changing the nature of the case to a mere case for damages. Petitioners filed a Motion to Strike
Out Amended Complaint, contending that the complaint cannot be amended without leave of court, since a
responsive pleading has been filed.

On August 11, 1997, the first assailed order denying petitioners Motion to Strike Out Amended Complaint was
rendered.

The Court of Appeals (CA) ruled that although private respondent could no longer amend its original Complaint

Case Summary in Civil Procedure by: Jessica Bernardo Page 15


as a matter of right, it was not precluded from doing so with leave of court. Thus, the CA concluded that the
RTC
had not acted with grave abuse of discretion in admitting private respondents Amended Complaint.

Petitioners argued that the trial court where the original Complaint for specific performance had been filed was
not
the proper venue. Debunking petitioners argument, the CA explained that the RTC nevertheless had jurisdiction
over the said Complaint. The CA also held that the Amended Complaint did not substantially alter private
respondents cause of action, since petitioners were not being asked to answer a legal obligation different from
that stated in the original Complaint.

Petitioners argue that the lower courts erred in admitting the Amended Complaint. Under the Rules, a party
may
amend his pleading once as a matter of right at any time before a responsive pleading is served x x x. When
private
respondent filed its Amended Complaint, Carissa, the other partydefendant in the original Complaint, had
already
filed its Answer. Because a responsive pleading had been submitted, petitioners contend that private respondent
should have first obtained leave of court before filing its Amended Complaint. This it failed to do. In any event,
such leave could not have been granted, allegedly because the amendment had substantially altered the cause of
action.
This argument is not persuasive. It is clear that plaintiff (herein private respondent) can amend its complaint
once,
as a matter of right, before a responsive pleading is filed.

Issue: WON the lower courts erred in admitting the Amended Complaint.

Held: No.

Contrary to the petitioners contention, the fact that Carissa had already filed its Answer did not bar private
respondent from amending its original Complaint once, as a matter of right, against herein petitioners. Indeed,
where some but not all the defendants have answered, plaintiffs may amend their Complaint once, as a matter of
right, in respect to claims asserted solely against the nonanswering defendants, but not as to claims asserted
against the other defendants.

The rationale for the aforementioned rule is in Section 3, Rule 10 of the Rules of Court, which provides that
after a responsive pleading has been filed, an amendment may be rejected when the defense is substantially
altered. Such amendment does not only prejudice the rights of the defendant it also delays the action. In the
first place, where a party has not yet filed a responsive pleading, there are no defenses that can be altered.
Furthermore, the Court has held that [a]mendments to pleadings are generally favored and should be liberally
allowed in
furtherance of justice in order that every case may so far as possible be determined on its real facts and in order
to
speed the trial of cases or prevent the circuity of action and unnecessary expense, unless there are circumstances
such as inexcusable delay or the taking of the adverse party by surprise or the like, which might justify a refusal
of
permission to amend.

Case Summary in Civil Procedure by: Jessica Bernardo Page 16


In the present case, petitioners failed to prove that they were prejudiced by private respondents Amended
Complaint. True, Carissa had already filed its own Answer. Petitioners, however, have not yet filed any.
Moreover, they do not allege that their defense is similar to that of Carissa.

On the contrary, private respondents claims against the latter and against petitioners are different. Against
petitioners, whose offer to sell the subject parcels of land had allegedly been accepted by private respondent, the
latter is suing for specific performance and damages for breach of contract. Although private respondent could
no
longer amend, as a matter of right, its Complaint against Carissa, it could do so against petitioners who, at the
time,
had not yet filed an answer.

The amendment did not prejudice the petitioners or delay the action. Au contraire, it simplified the case and
tended to expedite its disposition. The Amended Complaint became simply an action for damages, since the
claims for specific performance and declaration of nullity of the sale have been deleted.

Tiu vs. Philippine Bank Communications


G.R. No. 151932. August 19, 2009

Facts:

In June 1993, Asian Water Resources, Inc. (AWRI), represented by herein petitioners, applied for a real estate
loan with the Philippine Bank of Communications (PBCOM) to fund its purified water distribution business.

In support of the dated June 7, 1993. The loan was guaranteed by collateral over the property covered by
Transfer Certificate of Title No. T13020.3 The loan was eventually approved.

In August 1996, AWRI applied for a bigger loan from PBCOM for additional capitalization using the same
Board
Resolution, but without any additional real estate collateral. Considering that the proposed additional loan
was unsecured, PBCOM required all the members of the Board of Directors of AWRI to become sureties. Thus,
on
August 16, 1996, a Surety Agreement5 was executed by its Directors and acknowledged by a notary public on
the same date. All copies of the Surety Agreement, except two, were kept by PBCOM. Of the two copies kept

Case Summary in Civil Procedure by: Jessica Bernardo Page 17


by the notary public, one copy was retained for his notarial file and the other was sent to the Records
Management and Archives Office, through the Office of the RTC Clerk of Court.

Thereafter, on December 16, 1998, AWRI informed the bank of its desire to surrender and/or assign in its favor,
all
the present properties of the former to apply as dacion en pago for AWRIs existing loan obligation to the
bank.7 On January 11, 1999, PBCOM sent a reply denying the request. On May 12, 1999, PBCOM sent a letter
to petitioners demanding full payment of its obligation to the bank. Its demands having remained unheeded,
PBCOM instructed its counsel to file a complaint for collection against petitioners.

On July 3, 1999, petitioners filed their Answer. It alleged, among other things, that they were not personally
liable on the promissory notes, because they signed the Surety Agreement in their capacities as officers of
AWRI.
They claimed that the Surety Agreement attached to the complaint as Annexes A to A2 were falsified,
considering that when they signed the same, the words In his personal capacity did not yet appear in the
document and were merely intercalated thereon without their knowledge and consent.

Petitioners counsel then asked PBCOM to explain the alteration appearing on the agreement. PBCOM
subsequently discovered that the insertion was ordered by the bank auditor. It alleged that when the Surety
Agreement was inspected by the bank auditor, he called the attention of the loans clerk, Kenneth Cabahug, as to
why the words In his personal capacity were not indicated under the signature of each surety, in accordance
with bank standard operating procedures. The auditor then ordered Mr. Cabahug to type the words In his
personal
capacity below the second signatures of petitioners. However, the notary public was never informed of the
inser attesting to the circumstances why the insertion was made.

PBCOM then filed a Reply and Answer to Counterclaimwith Motion for Leave of Court to Substitute Annex
A of
the Complaint, wherein it attached the duplicate original copy retrieved from the file of the notary public.
PBCOM
also admitted its mistake in making the insertion and explained that it was made without the knowledge and
consent of the notary public. PBCOM maintained that the insertion was not a falsification, but was made only to
speak the truth of the parties intentions. PBCOM also contended that petitioners were already primarily liable
on
the Surety Agreement whether or not the insertion was made, having admitted in their pleadings that they
voluntarily executed and signed the Surety Agreement in the original form. PBCOM, invoking a liberal
application of the Rules, emphasized that the motion incorporated in the pleading can be treated as a motion for
leave of court to
amend and admit the amended complaint pursuant to Section 3, Rule 10 of the Rules of Court.

On December 14, 1999, the RTC issued an Order17 allowing the substitution of the altered document with the
original Surety Agreement.

Petitioners argue that the CA committed a reversible error in affirming the Order of the RTC allowing the
substitution of the document by relying on Section 3, Rule 10 of the Rules of Court. Petitioners assert that the
Rules
do not allow the withdrawal and substitution of a falsified document once discovered by the opposing party.

Petitioners maintain that PBCOMs cause of action was solely and principally founded on the alleged falsified
Case Summary in Civil Procedure by: Jessica Bernardo Page 18
document originally marked as Annexes A to A2. Thus, the withdrawal of the document results in the
automatic withdrawal of the whole complaint on the ground that there is no more cause of action to be
maintained or enforced by plaintiff against petitioners.

Petitioners submit that the RTC misapplied the principle of equity when it allowed PBCOM to substitute
the document with the original agreement.

For its part, PBCOM argues that since the complaint is based on an actionable document, i.e., the surety
agreement, the original or a copy thereof should be attached to the pleading as an exhibit, which shall be
deemed part of the pleading. Considering that the surety agreement is annexed to the complaint, it is an integral
part thereof and its substitution with another copy is in the nature of a substantial amendment, which is allowed
by
the Rules, but with prior leave of court.

Moreover, PBCOM alleges that since the Rules provides that substantial amendments may be made upon leave
of
court, the authority of the RTC to allow the amendment is discretionary. Thus, the CA correctly held that the act
of
granting the said substitution was within the clear and proper discretion of the RTC.

Issue: WON the CA committed a reversible error in affirming the Order of the RTC allowing the
substitution of the document.

Held: NO.

The petition is without merit.


As to the substitution of the earlier surety agreement that was annexed to the complaint with the original
thereof, this Court finds that the RTC did not err in allowing the substitution.

The pertinent rule on actionable documents is found in Section 7, Rule 8 of the Rules of Court, which provides
that
when the cause of action is anchored on a document, its substance must be set forth, and the original or a copy
thereof shall be attached to the pleading as an exhibit and deemed a part thereof, to wit:

Section 7. Action or defense based on document.Whenever


an action or defense is based upon a written instrument or document, the substance of such instrument or
document shall be set forth in the pleading, and the original or a copy thereof shall be attached to the pleading
as an exhibit, which shall be deemed to be a part of the pleading, or said copy may with like effect be set forth
in the pleading.

With respect to PBCOMs right to amend its complaint, including the documents annexed thereto, after
petitioners
have filed their answer, Section 3, Rule 10 of the Rules of Court specifically allows amendment by leave of
court. The said Section states:

SECTION 3. Amendments by leave of court.Except as provided in the next preceding section, substantial
amendments may be made only upon leave of court. But such leave may be refused if it appears to the court that

Case Summary in Civil Procedure by: Jessica Bernardo Page 19


the motion was made with intent to delay. Orders of the court upon the matters provided in this section shall be
made upon motion filed in court, and after notice to the adverse party, and an opportunity to be heard.

The granting of leave to file amended pleading is a matter particularly addressed to the sound discretion of the
trial court and that discretion is broad, subject only to the limitations that the amendments should not
substantially
change the cause of action or alter the theory of the case, or that it was not made to delay the action.

Nevertheless, asenunciated in Valenzuela:

even if the amendment substantially alters the cause of action or defense, such amendment could still be
allowed when it is sought to servE the higher interest of substantial justice prevent delay and secure a just,
speedy and inexpensive disposition of actions and proceedings. The courts should be liberal in allowing
amendments to pleadings to avoid a multiplicity of suits and in order that the real controversies between the
parties are presented,
their rights determined, and the case decided on the merits without unnecessary delay. This liberality is greatest
in the early stages of a lawsuit, especially in this case where the amendment was made before the trial of the
case, thereby giving the petitioners all the time allowed by law to answer and to prepare for trial.

Furthermore, amendments to pleadings are generally favored and should be liberally allowed in furtherance of
justice in order that every case, may so far as possible, be determined on its real facts and in order to speed up
the
trial of the case or prevent the circuity of action and unnecessary expense. That is, unless there are
circumstances such as inexcusable delay or the taking of the adverse party by surprise or the like, which might
justify a refusal of permission to amend.

In the present case, there was no fraudulent intent on the part of PBCOM in submitting the altered surety
agreement. In fact, the bank admitted that it was a mistake on their part to have submitted it in the first place
instead of the original agreement. It also admitted that, through inadvertence, the copy that was attached to the
complaint was the copy wherein the words IN HIS PERSONAL CAPACITY were inserted to conform to the
banks standard practice. This alteration was made without the knowledge of the notary public. PBCOMs
counsel had no idea that what it submitted was the altered document, thereby necessitating the substitution of
the surety
agreement with the original thereof, in order that the case would be judiciously resolved.

Lisam Enterprises, Inc. vs. Banco de Oro Unibank, Inc.


G.R. No. 143264. April 23, 2012

Facts:
On August 13, 1999, petitioners filed a Complaint against respondents for Annulment of Mortgage with
Prayer for Temporary Restraining Order & Preliminary Injunction with Damages with the RTC of Legaspi City.

Petitioner Lolita A. Soriano alleged that she is a stockholder of petitioner Lisam Enterprises, Inc. (LEI) and
a member of its Board of Directors, designated as its Corporate Secretary. The Complaint also alleged the
following: Sometime in 1993, plaintiff LEI, in the course of its business operation, acquired by purchase a
parcel of residential land with improvement situated at Legaspi City.

Case Summary in Civil Procedure by: Jessica Bernardo Page 20


On or about 28 March 1996, defendant Lilian S. Soriano and the late Leandro A. Soriano, Jr., as husband and
wife (hereafter Spouses Soriano), in their personal capacity and for their own use and benefit, obtained a loan
from defendant PCIB (Legaspi Branch) (now known as Banco de Oro Unibank, Inc.) in the total
amount of P20 Million

That as security for the payment of the aforesaid credit accommodation, the late Leandro A. Soriano, Jr. and
defendant Lilian S. Soriano, as president and treasurer, respectively of plaintiff LEI, but without authority and
consent of the board of said plaintiff and with the use of a falsified board resolution, executed a real estate
mortgage on 28 March 1996, over the abovedescribed property of plaintiff LEI in favor of defendant PCIB, and
had the same
registered with the Office of the Registry of Deeds, Legaspi City.

That specifically, the Spouses Soriano, with intent to defraud and prejudice plaintiff LEI and its stockholders,
falsified the signatures of plaintiff Lolita A. Soriano as corporate secretary and
director of plaintiff LEI, in a document denominated as board resolution purportedly issued by the board of
plaintiff LEI on 6 November 1995, making it appear that plaintiff LEIs Board met and passed a board
resolution on said date authorizing the Spouses Soriano to mortgage or encumber all or substantially all of the
properties of plaintiff LEI, when in fact and in truth, no resolution of that nature was ever issued by the board of
plaintiff LEI, nor a meeting was called to that effect, copy of the resolution in question is hereto.

That defendant PCIB, knowing fully well that the property being mortgaged by the Spouses Soriano belongs to
plaintiff LEI, a corporation, negligently and miserably failed to exercise due care and prudence required of a
banking institution. Specifically, defendant PCIB failed to investigate and to delve into the propriety of the
issuance of or due execution of subject board resolution, which is the very foundation of the validity of subject
real estate mortgage. Further, it failed to verify the genuineness of the signatures appearing in said board
resolution nor to
confirm the fact of its issuance with plaintiff Lolita A. Soriano, as the corporate secretary of plaintiff LEI.
Furthermore, the height of its negligence was displayed when it disregarded or failed to notice that the
questioned board resolution with a Secretarys Certificate was notarized only on 28 March 1996 or after the
lapse of more than four (4) months from its purported date of issue on 6 November 1995. That these
circumstances should have put defendant PCIB on notice of the flaws and infirmities of the questioned board
resolution. Unfortunately, it negligently failed to exercise due care and prudence expected of a banking
institution.

That having been executed without authority of the board of plaintiff LEI said real estate mortgage dated 28
March 1996 executed by the Spouses Soriano, as officers of plaintiff LEI in favor of defendant PCIB, is the null
and void and has no legal effect upon said plaintiff. Consequently, said mortgage deed cannot be used nor
resorted to by defendant PCIB against subject property of plaintiff LEI as no right or rights whatsoever were
created nor granted thereunder by reason of its nullity.

Hence, on 25 June 1999, plaintiffs commenced a derivative suit against defendants Lilian S. Soriano and the
Estate of Leandro A. Soriano, Jr., before the Securities and Exchange Commission, docketed as SEC Case No.
06996339
For Fraudulent Scheme and Unlawful Machination with Damages in order to protect and preserve the rights
of plaintiffs.

After service of summons on all defendants, the RTC issued a temporary restraining order on August 25, 1990

Case Summary in Civil Procedure by: Jessica Bernardo Page 21


and, after hearing, went on to issue a writ of preliminary injunction enjoining respondent PCIB (now known as
Banco de Oro Unibank, Inc.) from proceeding with the auction sale of the subject property.

Respondents Lilian S. Soriano and the Estate of Leandro A. Soriano, Jr. filed an Answer dated September 25,
1999,
stating that the Spouses Lilian and Leandro Soriano, Jr. were duly authorized by LEI to mortgage the subject
property that proceeds of the loan from respondent PCIB were for the use and benefit of LEI that all notarized
documents submitted to PCIB by the Spouses Soriano bore the genuine signature of Lolita Soriano and that
although the Spouses Soriano indeed received demands from petitioner Lolita Soriano for them to pay the loan,
they
gave satisfactory explanations to the latter why her demands could not be honored. It was, likewise, alleged in
said Answer that it was respondent Lilian Soriano who should be entitled to moral damages and attorneys fees.

On September 28, 1999, respondent PCIB filed a Motion to Dismiss the Complaint on grounds of lack of legal
capacity to sue, failure to state cause of action, and litis pendencia. Petitioners filed an Opposition thereto, while
PCIBs codefendants filed a Motion to Suspend Action.

On November 11, 1999, the RTC issued the first assailed Resolution dismissing petitioners Complaint.
Petitioners
then filed a Motion for Reconsideration of said Resolution. While awaiting resolution of the motion for
reconsideration, petitioners also filed, on January 4, 2000, a Motion to Admit Amended Complaint, amending
paragraph 13 of the original complaint.

That said irregular transactions of defendant Lilian S. Soriano and her husband Leandro A. Soriano, Jr., on one
hand, and defendant PCIB, on the other, were discovered by plaintiff Lolita A. Soriano sometime in April 1999.
That immediately upon discovery, said plaintiff, for herself and on behalf and for the benefit of plaintiff LEI,
made demands upon defendant Lilian S. Soriano and the Estate of Leandro A. Soriano, Jr., to free subject
property of plaintiff LEI from such mortgage lien, by paying in full their personal indebtedness to defendant
PCIB in the principal sum of P20 Million. However, said defendants, for reason only known to them, continued
and still continue to ignore said demands, to the damage and prejudice of plaintiffs that plaintiff Lolita A.
Soriano likewise made demands upon the Board of Directors of Lisam Enterprises, Inc., to make legal steps to
protect the interest of the corporation from said fraudulent transaction, but unfortunately, until now, no such
legal step was ever taken by the Board, hence, this action for the benefit and in behalf of the corporation

On May 15, 2000, the trial court issued the questioned Order denying both the Motion for Reconsideration and
the
Motion to Admit Amended Complaint. The trial court held that no new argument had been raised by petitioners
in
their motion for reconsideration to address the fact of plaintiffs failure to allege in the complaint that petitioner
Lolita A. Soriano made demands upon the Board of Directors of Lisam Enterprises, Inc. to take steps to protect
the interest of the corporation against the fraudulent acts of the Spouses Soriano and PCIB. The trial court
further
ruled that the Amended Complaint can no longer be admitted, because the same absolutely changed petitioners
cause of action.

Issue: WON the court erred when it denied the admission of petitioners amended complaint filed as a matter of
right.

Case Summary in Civil Procedure by: Jessica Bernardo Page 22


Held: YES.
The petition is impressed with merit.
The Court shall first delve into the matter of the propriety of the denial of the motion to admit amended
complaint.

Pertinent provisions of Rule 10 of the Rules of


Court provide as follows:
Sec. 2. Amendments as a matter of right.A party may amend his pleadings once as a matter of right at any
time before a responsive pleading is served x x x.

Sec. 3 Amendments by leave of court.Except as provided in the next preceding section, substantial
amendments may be made only upon leave of court. But such leave may be refused if it appears to the court that
the motion was made with intent to delay. x x x

It should be noted that respondents Lilian S. Soriano and the Estate of Leandro A. Soriano, Jr. already filed their
Answer, to petitioners complaint, and the claims being asserted were made against said parties. A responsive
pleading having been filed, amendments to the complaint may, therefore, be made only by leave of court and no
longer as a matter of right.
However, in Tiu v. Philippine
Bank of Communications,4 the Court discussed this rule at
length, to wit:

x x x [A]fter petitioners have filed their answer, Section 3, Rule 10 of the Rules of Court specifically allows
amendment by leave of court. The said Section states:
SECTION 3. Amendments by leave of court.Except as provided in the next preceding section, substantial
amendments may be made only upon leave of court. But such leave may be refused if it appears to the court that
the
motion was made with intent to delay. Orders of the court upon the matters provided in this section shall be
made
upon motion filed in court, and after notice to the adverse party, and an opportunity to be heard.

This Court has emphasized the import of Section 3, Rule 10 of the 1997 Rules of Civil Procedure in Valenzuela
v. Court of Appeals, thus:
Interestingly, Section 3, Rule 10 of the 1997 Rules of Civil Procedure amended the former rule in such manner
that the phrase or that the cause of action or defense is substantially altered was strickenoff
and not retained in the new rules. The clear import of such amendment in Section 3, Rule 10 is that under the
new rules, the amendment may (now) substantially alter the cause of action or defense. This should only be
true, however, when despite a substantial change or alteration in the cause of action or defense, the amendments
sought to be made shall serve the higher interests of substantial justice, and prevent delay and equally promote
the laudable objective of the rules which is to secure a just, speedy and inexpensive disposition of every action
and proceeding.
The granting of leave to file amended pleading is a matter particularly addressed to the sound discretion of the
trial court and that discretion is broad, subject only to the limitations that the amendments should not
substantially change the cause of action or alter the theory of the case, or that it was not made to delay the
action. Nevertheless, as enunciated in Valenzuela, even if the amendment substantially alters the cause of action
or defense, such amendment could still be allowed when it is sought to serve the higher interest of substantial
justice, prevent delay, and secure a just, speedy and inexpensive disposition of actions and proceedings.

Case Summary in Civil Procedure by: Jessica Bernardo Page 23


The courts should be liberal in allowing amendments to pleadings to avoid a multiplicity of suits and in order
that the real controversies between the parties are presented, their rights determined, and the case decided on the
merits without unnecessary delay. This liberality is greatest in the early stages of a lawsuit, especially in this
case where the amendment was made before the trial of the case, thereby giving the petitioners all the time
allowed by law to answer and to prepare for trial.

Furthermore, amendments to pleadings are generally favored and should be liberally allowed in furtherance of
justice in order that every case, may so far as possible, be determined on its real facts and in order to speed up
the trial of the case or prevent the circuitry of action and unnecessary expense. That is, unless there are
circumstances such as inexcusable delay or the taking of the adverse party by surprise or the like, which might
justify a
refusal of permission to amend.

Since, as explained above, amendments are generally favored, it would have been more fitting for the trial court
to extend such liberality towards petitioners by admitting the amended complaint which was filed before the
order
dismissing the original complaint became final and executory. It is quite apparent that since trial proper had
not yet even begun, allowing the amendment would not have caused any delay. Moreover, doing so would have
served the higher interest of justice as this would provide the best opportunity for the issues among all parties to
be
thoroughly threshed out and the rights of all parties finally determined. Hence, the Court overrules the trial
courts
denial of the motion to admit the amended complaint, and orders the admission of the same.

TOPIC: JUDGMENT ON THE PLEADINGS

Basbas et al., v. Sayson et al.,


G.R. No. 172660, August 24, 2011

Facts:

On September 2, 1976, respondent Beata Sayson (Beata) and her husband Roberto Sayson, Sr. (Roberto Sr.) filed a
Petition for Registration of an agricultural land located in Cagbatang, Balagtas, Matag-ob, Leyte docketed as Land
Registration Case No. 0-177. The said application was opposed by the Republic of the Philippines and herein petitioners
Eugenio Basbas (Eugenio Sr.), Teofilo Aras (Teofilo) and Rufino Aras (Rufino). On March 22, 1979, the Court of First
Instance (CFI) of Leyte, Branch V (Ormoc City) rendered a Decision adjudicating to the spouses Sayson said agricultural
land and approving its registration under their names.

The oppositors filed their appeal to the CA docketed as CA-G.R. No. 66541. In a Decision dated July 24, 1985,
the appellate court affirmed intoto the Decision of the CFI. This CA Decision became final and executory on August 21,
1985 and, accordingly, a Writ of Possession was issued on November 21, 1985, which was never implemented.

The following year or on September 17, 1986, Original Certificate of Title (OCT) No. 2496 was issued to the
spouses Sayson pursuant to the March 22, 1979 CFI Decision. An Alias Writ of Possession was issued on April 6, 1989
Case Summary in Civil Procedure by: Jessica Bernardo Page 24
but this could also not be implemented in view of the refusal of Eugenio Sr. and his son Eugenio Basbas, Jr. (Eugenio
Jr.). Claiming that the land they occupied is not the same land subject of the CFI Decision, they demanded that a
relocation survey be conducted. Hence, a relocation survey was conducted by order of the Regional Trial Court (RTC),
Branch 12, Ormoc City.

In an Order dated September 13, 1989, the RTC approved the Commissioners Report on the relocation survey
and ordered the original oppositors, petitioners Eugenio Sr., Teofilo and Rufino, as well as their co-petitioners herein
Gervacio Basbas (Gervacio), Ismael Aras (Ismael), Eugenio Aras (Eugenio), Simfronio Aras (Simfronio), Feliciano Aras
(Feliciano), Rosita Aras (Rosita) and Eugenio Jr. to vacate the subject property.

The September 13, 1989 Order was, however, not implemented within the five-year period from the time it became
final.. Hence, respondent Beata and her son Roberto Sayson, Jr. (Roberto Jr.), as successor-in-interest of the late Roberto
Sr., filed on August 18, 1995 a Complaint for Revival of Judgmentbefore the RTC of Ormoc City, Branch 12, [ docketed
as Civil Case No. 3312-0. Impleaded as defendants were Eugenio Sr., Teofilo, Rufino, Gervacio, Ismael, Eugenio,
Simfronio, Feliciano, Rosita, and Eugenio Jr. Petitioner-spouses Pablito Basarte and Marcelina Basbas-Sabarte[ (spouses
Basarte), who, although not identified in the September 13, 1989 Order as principal oppositors in the land registration
case, were likewise impleaded as defendants since they also allegedly harvested, processed, and sold the coconuts found
in the subject property.

Upon receipt of summons, Gervacio, Rufino, Ismael, Eugenio, Feliciano, Rosita and Eugenio Jr. filed a Motion to
Dismiss on the ground that the Complaint states no cause of action. This was, however, denied so the same set of
petitioners, except for Feliciano, filed an Answer with Counterclaim..

In their Answer with counterclaim, said petitioners admitted the allegations in paragraphs 4, 5, 6, 7, 8, 9, 10, 11 and 12 of
respondents Complaint.

However, petitioners admitted but denied in part:

1) paragraphs 2 and 3, insofar as they alleged that they were all oppositors to the land registration case when only
Eugenio Sr., Teofilo and Rufino were the oppositors therein and

2) paragraph 14, with respect to the allegation on the retirement of the Deputy Sheriff and the heart condition of
the Clerk of Court, for lack of sufficient knowledge and information sufficient to form a belief thereon.

On the other hand, they specifically denied:

1) paragraph 13, on the ground that they have the right of ownership and/or possession over the subject property
and
Case Summary in Civil Procedure by: Jessica Bernardo Page 25
2) paragraph 15, on the ground that the property they are cultivating is owned by them, hence, respondents cannot
suffer losses and damages.

Respondents subsequently filed an Omnibus Motion for Judgment on the Pleadings and/or Summary Judgment.
They contended that since petitioners Answer failed to tender an issue, they having expressly admitted the material
allegations in the complaint, particularly paragraphs 4 to 12, a judgment on the pleadings or summary judgment is proper.

Petitioners filed an Opposition Re: Omnibus Motion for Judgment on the Pleadings and/or Summary Judgment
and Memorandum Re: Failure of Plaintiff Beata Sayson to Appear in the Pre-trial Conference.[ They argued that the case
cannot be decided based on the pleadings nor through summary judgment considering that the controverted stipulations
and issues defined in the Pre-Trial Order must be proven by evidence. In addition, they questioned the Special Power of
Attorney (SPA) executed by Beata in Canada empowering her son Roberto Jr. to appear on her behalf in the pre-trial
conference. They argued that since said SPA has not been authenticated by a Philippine Consulate official, it is not
sufficient authorization and hence, Beata cannot be considered to have attended the pre-trial conference. The case must,
therefore, be dismissed insofar as she is concerned.
RTC:
In resolving respondents Omnibus Motion for Judgment on the Pleadings and/or Summary Judgment, the RTC found that
petitioners Answer does not essentially tender an issue since the material allegations of the Complaint were admitted.

Petitioners thus filed a Notice of Appeal.

CA:
Finding no merit in the appeal, the CA denied the same in a Decision dated February 17, 2004. It noted that petitioners
Answer admitted almost all of the allegations in respondents complaint. Hence, the RTC committed no reversible error
when it granted respondents Motion for Judgment on the Pleadings and/or Summary Judgment.

Petitioners insist that a judgment on the pleadings or a summary judgment


is not proper in this case since the controverted stipulations and the first three issues enumerated in the pre-trial order
involve facts which must be threshed out during trial. They also claim that the Complaint for Revival of Judgment states
no cause of action because the September 13, 1989 Order which it sought to revive is not the judgment contemplated
under Section 6, Rule 39 of the Rules of Court and, therefore, cannot be the subject of such an action. Moreover, they
argue that the CA Decision in the land registration case should not have been revived as same was not prayed for in the
Complaint for Revival of Judgment. Lastly, petitioners assail the SPA which authorized Roberto Jr. to represent his
mother, Beata, during the pre-trial conference, it not having been authenticated by a Philippine consulate officer in Canada
where it was executed. Citing Lopez v. Court of Appeals,[ they contend that said document cannot be admitted in

Case Summary in Civil Procedure by: Jessica Bernardo Page 26


evidence and hence, Beata was not duly represented during said pre-trial conference. The case, therefore, should have
been dismissed insofar as she is concerned.

ISSUE: The Honorable Court of Appeals clearly committed serious errors of law in its decision and Resolution dated
February 17, 2004 and April 19, 2006 when it affirmed the Order of the Regional Trial Court dated May 21, 2001 and
declared that no reversible error was committed by the Regional Trial Court of Ormoc City in granting respondents
motion for judgment on the pleadings and/or summary judgment.

HELD:

There is no merit in the petition.

I. The instant case is proper for the rendition of a summary judgment.

Petitioners principally assail the CAs affirmance of the RTCs Order granting respondents Motion
for Judgment on the Pleadings and/or Summary Judgment.

In Tan v. De la Vega, citing Narra Integrated Corporation v. Court of Appeals, the court
distinguished summary judgment from judgment on the pleadings, viz:

The existence or appearance of ostensible issues in the pleadings, on the one hand,
and their sham or fictitious character, on the other, are what distinguish a proper case for
summary judgment from one for a judgment on the pleadings. In a proper case for
judgment on the pleadings, there is no ostensible issue at all because of the failure of the
defending partys answer to raise an issue. On the other hand, in the case of a summary
judgment, issues apparently exist i.e. facts are asserted in the complaint regarding which
there is as yet no admission, disavowal or qualification; or specific denials or affirmative
defenses are in truth set out in the answer but the issues thus arising from the pleadings
are sham, fictitious or not genuine, as shown by affidavits, depositions, or admissions. x x
x.

Simply stated, what distinguishes a judgment on the pleadings from a summary judgment is the
presence of issues in the Answer to the Complaint. When the Answer fails to tender any issue, that is, if

Case Summary in Civil Procedure by: Jessica Bernardo Page 27


it does not deny the material allegations in the complaint or admits said material allegations of the
adverse partys pleadings by admitting the truthfulness thereof and/or omitting to deal with them at all, a
judgment on the pleadings is appropriate. On the other hand, when the Answer specifically denies the
material averments of the complaint or asserts affirmative defenses, or in other words raises an issue, a
summary judgment is proper provided that the issue raised is not genuine. A genuine issue means an
issue of fact which calls for the presentation of evidence, as distinguished from an issue which is
fictitious or contrived or which does not constitute a genuine issue for trial.

a) Judgment on the pleadings is not proper because


petitioners Answer tendered issues.

In this case, we note that while petitioners Answer to respondents Complaint practically admitted
all the material allegations therein, it nevertheless asserts the affirmative defenses that the action for
revival of judgment is not the proper action and that petitioners are not the proper parties.As issues
obviously arise from these affirmative defenses, a judgment on the pleadings is clearly improper in this
case.

However, before we consider this case appropriate for the rendition of summary judgment, an
examination of the issues raised, that is, whether they are genuine issues or not, should first be made.

TOPIC: SUMMARY JUDGMENT

Buncayao Sr., v. Fort Illocandia


G.R. No. 170483, April 19, 2010

Facts:
Manuel C. Bungcayao, Sr. (petitioner) claimed to be one of the two entrepreneurs who introduced
improvements on the foreshore area of Calayab Beach in 1978 when Fort Ilocandia Hotel started its
construction in the area. Thereafter, other entrepreneurs began setting up their own stalls in the foreshore
area. They later formed themselves into the DSierto Beach Resort Owners Association, Inc. (DSierto).

Case Summary in Civil Procedure by: Jessica Bernardo Page 28


In July 1980, six parcels of land in Barrio Balacad (now Calayad) were transferred, ceded, and conveyed to the
Philippine Tourism Authority (PTA) pursuant to Presidential Decree No. 1704. Fort Ilocandia Resort Hotel was
erected on the area. In 1992, petitioner and other DSierto members applied for a foreshore lease with the
Community Environment and Natural Resources Office (CENRO) and was granted a provisional permit. On 31
January 2002, Fort Ilocandia Property Holdings and Development Corporation (respondent) filed a foreshore
application over a 14-hectare area abutting the Fort Ilocandia Property, including the 5-hectare portion applied
for by DSierto members. The foreshore applications became the subject matter of a conflict case, docketed
Department of Environment and Natural Resources (DENR) Case No. 5473, between respondent and DSierto
members. In an undated Order, DENR Regional Executive Director Victor J. Ancheta denied the foreshore lease
applications of the DSierto members, including petitioner, on the ground that the subject area applied for fell
either within the titled property or within the foreshore areas applied for by respondent. The DSierto members
appealed the denial of their applications. In a Resolution dated 21 August 2003, then DENR Secretary Elisea G.
Gozun denied the appeal on the ground that the area applied for encroached on the titled property of respondent
based on the final verification plan.

In a letter dated 18 September 2003, respondent, through its Public Relations Manager Arlene de Guzman,
invited the DSierto members to a luncheon meeting to discuss common details beneficial to all parties
concerned. Atty. Liza Marcos (Atty. Marcos), wife of Governor Bongbong Marcos, was present as she was
asked by Fort Ilocandia hotel officials to mediate over the conflict among the parties. Atty. Marcos
offered P300,000 as financial settlement per claimant in consideration of the improvements introduced, on the
condition that they would vacate the area identified as respondents property. A DSierto member made a counter-
offer of P400,000, to which the other DSierto members agreed.

Petitioner alleged that his son, Manuel Bungcayao, Jr., who attended the meeting, manifested that he still had to
consult his parents about the offer but upon the undue pressure exerted by Atty. Marcos, he accepted the
payment and signed the Deed of Assignment, Release, Waiver and Quitclaim in favor of respondent.

Petitioner then filed an action for declaration of nullity of contract before the Regional Trial Court of Laoag,
City against respondent. Petitioner alleged that his son had no authority to represent him and that the deed was
void and not binding upon him.

Respondent countered that the area upon which petitioner and the other DSierto members constructed their
improvements was part of its titled property under Transfer Certificate of Title No. T-31182. Respondent alleged
that petitioners sons, Manuel, Jr. and Romel, attended the luncheon meeting on their own volition and they were
able to talk to their parents through a cellular phone before they accepted respondents offer. As a counterclaim,
respondent prayed that petitioner be required to return the amount of P400,000 from respondent, to vacate the
Case Summary in Civil Procedure by: Jessica Bernardo Page 29
portion of the respondents property he was occupying, and to pay damages because his continued refusal to
vacate the property caused tremendous delay in the planned implementation of Fort Ilocandias expansion
projects.

In an Order dated 6 November 2003, the trial court confirmed the agreement of the parties to cancel the Deed of
Assignment, Release, Waiver and Quitclaim and the return of P400,000 to respondent. Petitioners counsel,
however, manifested that petitioner was still maintaining its claim for damages against respondent.

Petitioner and respondent agreed to consider the case submitted for resolution on summary judgment. Thus, in
its Order dated 28 November 2003, the trial court considered the case submitted for resolution. Petitioner filed a
motion for reconsideration, alleging that he manifested in open court that he was withdrawing his earlier
manifestation submitting the case for resolution. Respondent filed a Motion for Summary Judgment.

RTC:
The trial court ruled that summary judgment could be rendered on the case.

The trial court ruled that the alleged pressure on petitioners sons could not constitute force, violence or
intimidation that could vitiate consent.As regards respondents counterclaim, the trial court ruled that based on
the pleadings and admissions made, it was established that the property occupied by petitioner was within the
titled property of respondent.

The Court renders judgment DISMISSING the claim of plaintiff for damages as it is found to be without legal
basis, and finding the counterclaim of the defendant for recovery of possession of the lot occupied by the
plaintiff to be meritorious as it is hereby GRANTED.

Petitioner appealed from the trial courts decision.

The Court of Appeals sustained the trial court in resorting to summary judgment as a valid procedural device for
the prompt disposition of actions in which the pleadings raise only a legal issue and not a genuine issue as to
any material fact. The Court of Appeals ruled that in this case, the facts are not in dispute and the only issue to
be resolved is whether the subject property was within the titled property of respondent.Hence, summary
judgment was properly rendered by the trial court.

Thus, petition before the Supreme Court.

ISSUE: Whether summary judgment is appropriate in this case.

Case Summary in Civil Procedure by: Jessica Bernardo Page 30


HELD: YES.

Section 1, Rule 35 of the 1997 Rules of Civil Procedure provides:

Section 1. Summary Judgment for claimant. - A party seeking to recover upon a claim,
counterclaim, or cross-claim or to obtain a declaratory relief may, at any time after the pleading
in answer thereto has been served, move with supporting affidavits, depositions or admissions for
a summary judgment in his favor upon all or any part thereof.

Summary judgment has been explained as follows:

Summary judgment is a procedural device resorted to in order to avoid long drawn out litigations
and useless delays. When the pleadings on file show that there are no genuine issues of fact to be
tried, the Rules allow a party to obtain immediate relief by way of summary judgment, that is,
when the facts are not in dispute, the court is allowed to decide the case summarily by applying
the law to the material facts. Conversely, where the pleadings tender a genuine issue, summary
judgment is not proper. A genuine issue is such issue of fact which requires the presentation of
evidence as distinguished from a sham, fictitious, contrived or false claim. Section 3 of the said
rule provides two (2) requisites for summary judgment to be proper: (1) there must be no
genuine issue as to any material fact, except for the amount of damages and (2) the party
presenting the motion for summary judgment must be entitled to a judgment as a matter of
law. A summary judgment is permitted only if there is no genuine issue as to any material fact
and a moving party is entitled to a judgment as a matter of law. A summary judgment is proper
if, while the pleadings on their face appear to raise issues, the affidavits, depositions, and
admissions presented by the moving party show that such issues are not genuine.

Since we have limited the issues to the damages claimed by the parties, summary judgment has been properly
rendered in this case.

Maritime Industry Authority (MARINA) v. Marc Properties Corporation


G.R. No.173128, Feb 15, 2012

Facts:

On October 23, 2001, petitioner Maritime Industry Authority (MARINA), a government agency represented by
then Administrator and concurrently Vice-Chairman of the Board of Directors Oscar M. Sevilla, entered into a
Contract of Lease with respondent Marc Properties Corporation represented by its Executive Vice-President
Ericson M. Marquez. It was agreed that the MARINA offices will be transferred from PPL Building, Taft
Avenue, Manila to an eight-storey commercial building (MARC Building) and Condominium Unit 5 of MARC
2000 Tower which are both owned by respondent. The parties fixed the monthly rental at P1,263,607.74 (plus
VAT) from January 1, 2002 up to December 31, 2002 and renewable for the same one-year period.

On December 14, 2001, respondent received a letter from Administrator Sevilla requesting for rescission of
their Contract of Lease for the reason that the MARINA Board of Directors during its 158 th Regular Meeting

Case Summary in Civil Procedure by: Jessica Bernardo Page 31


resolved to deny the proposed transfer of the MARINA office from its present address to respondents
building. In its letter-reply dated December 17, 2001, respondent expressed disappointment and enumerated
those facts and circumstances for which respondent believes that the Boards decision was unreasonable.
Respondent asserted that if the Board will not reconsider its decision, MARINA must take responsibility for the
cost already incurred by respondent as damages and lost rental opportunity. Thus, respondent said it can only
accept the request for rescission upon reimbursement of P1,055,000.00 representing the amount advanced by
respondent and paid to its Contractors and payment of penalty equivalent to 2 months rental or P2,527,215.48 in
accordance with Art. IX, Sec. 9.00 of the Contract of Lease. With no immediate response from petitioners,
respondent again wrote Administrator Sevilla reiterating its position on the matter.

In their letter-reply dated January 23, 2002, petitioners asserted that MARINA is not liable to pay the
penalty considering that the Contract of Lease clearly provides that it is subject to the approval of the Board and
the Office of the President (OP) to become binding on the parties. As to the actual amount expended for
carpentry and electrical works done on the building, petitioners requested to be furnished with copies of the
official receipts so that it may be properly guided in the disposition thereof. In compliance, respondent
furnished petitioners with copies of the letter and accomplishment reports/official receipts submitted by its
contractors. Respondents counsel faulted Administrator Sevilla for not submitting the Contract of Lease to the
Board of Directors notwithstanding the fact that respondent had filed a motion for reconsideration of the Boards
decision, a clear breach of petitioners contractual obligation which entitles respondent to the penalty and
damages sought. Petitioners asserted that MARINA is not liable for penalty and damages since the Contract of
Lease was not perfected however, Administrator Sevilla reiterated MARINAs commitment to pay actual
expenses incurred for the works done on the premises based on [MARINAs] request. Petitioners likewise
furnished respondent with copies of the Agenda of the 160th Regular Meeting of the MARINA Board of
Directors held on June 28, 2002 and Secretarys Certificate dated July 1, 2002 stating the resolution of the
MARINA Board not to approve/ratify the Contract of Lease.

On July 10, 2002, respondent instituted Civil Case in the Regional Trial Court of Manila (Branch 42) against
petitioners MARINA and/or Atty. Oscar M. Sevilla.

Petitioners through the Solicitor General filed their Answer specifically denying the foregoing allegations.
Petitioners argued that respondents demand for P2,527,215.48 is based solely on Art. V, Sec. 5.0 of the Contract
of Lease, which provision presupposes the approval of the contract which is subject to the suspensive condition
provided in Art. XI, Sec. 11.13. Petitioners contended that by claiming that there was no reason to reject the
Contract of Lease considering the clear advantages of approving the same, respondent is effectively imposing
its judgment on the Board of Directors and the OP this simply cannot be done. Petitioners pointed out that the
approval or rejection of the contract is a prerogative lodged solely on the said authorities and respondent is
devoid of any authority to question the wisdom of the Boards rejection of the contract as obviously there were
Case Summary in Civil Procedure by: Jessica Bernardo Page 32
other considerations -- to which respondent is not privy -- factored in by the Board in its decision. Lastly,
petitioners asserted that this being a suit against the State, it must be dismissed outright as there was no
allegation in the complaint that the State had given its consent to be sued in this case.

Respondent filed a motion for summary judgment in its favor contending that there is no genuine issue in this
case as to any material fact even as to the amount of damages. Petitioners filed their opposition alleging the
existence of genuine factual issues which can only be resolved in a full-blown trial on the merits.

On March 5, 2003, the trial court issued an Order granting in part the motion for summary judgment. Citing
petitioners admission in the Answer that Administrator Sevilla, as an act of good faith, offered in behalf of
MARINA to shoulder the actual expenses incurred for the works done on the premises based on their request, as
well as the other proofs/official receipts submitted by respondent and the January 23, 2002, May 13, 2002 and
July 1, 2002 letters of Administrator Sevilla who promised or at least gave the impression that respondent will
be reimbursed by MARINA of the amount of P1,555,170.40, the trial court ruled that summary judgment for the
said claim is proper.

On appeal, in a Decision dated June 2, 2006, the CA dismissed petitioners appeal holding that the trial courts
rendition of partial summary judgment was inaccord with Section 1, Rule 35 of the 1997 Rules of Civil
Procedure, as amended, as it was based on petitioners admission in their Answer. In rejecting petitioners
argument that they raised a genuine factual issue as to the reimbursable amount for the renovation works, the
CA stated:

As to the contention that defendant-appellant is entitled to verify first the authenticity,


genuineness and due execution of the documents (e.g., receipts) relative to the renovation, suffice
it to note that plaintiff-appellee had offered its evidence on 13 December 2002 or three (3)
months prior to the issuance of the contested order. Yet, defendant-appellant has never lift its
finger to challenge the authenticity, genuineness, and due execution of the said documents. For
this failure, it is established beyond cavil that there is no genuine issue as to any material fact
warranting thereby the issuance of a summary judgment.

ISSUE: Whether the CA was correct in sustaining the trial courts order granting the motion for partial
summary judgment.

HELD:

We find the petition meritorious.

Sections 1 and 3, Rule 35 of the 1997 Rules of Civil Procedure, as amended, provide:

SECTION 1. Summary judgment for claimant. A party seeking to recover upon a claim,
counterclaim, or cross-claim or to obtain a declaratory relief may, at any time after the pleading

Case Summary in Civil Procedure by: Jessica Bernardo Page 33


in answer thereto has been served, move with supporting affidavits, depositions or admissions for
a summary judgment in his favor upon all or any part thereof.

SECTION 3. Motion and proceedings thereon. The motion shall be served at least ten
(10) days before the time specified for the hearing. The adverse party may serve opposing
affidavits, depositions or admissions at least three (3) days before the hearing. After the hearing,
the judgment sought shall be rendered forthwith if the pleadings, supporting affidavits,
depositions, and admissions on file, show that, except as to the amount of damages, there is
no genuine issue as to anymaterial fact and that the moving party is entitled to a judgment
as a matter of law. (Emphasis supplied.)

Summary judgment is a procedural device resorted to in order to avoid long drawn out litigations and useless
delays where the pleadings on file show that there are no genuine issues of fact to be tried. A genuine issue is
such issue of fact which require the presentation of evidence as distinguished from a sham, fictitious, contrived
or false claim.[25]There can be no summary judgment where questions of fact are in issue or where material
allegations of the pleadings are in dispute. [26] A party who moves for summary judgment has the burden of
demonstrating clearly the absence of any genuine issue of fact, or that the issue posed in the complaint is so
patently unsubstantial as not to constitute a genuine issue for trial, and any doubt as to the existence of such an
issue is resolved against the movant.

Contrary to the findings of the trial court and CA, the Answer filed by petitioners contained a specific denial of
absolute liability for the amount being claimed as actual expenses for repairs/renovations works done on
repondents building after the execution of the Contract of Lease.

5. SPECIFICALLY DENY the allegation in paragraph 4 of the complaint that MARINA


requested for alterations/renovations in accordance with the plans prepared by MARINA on the
MARC building for the account of and at the expense of MARINA, the truth being those stated
in the Special and Affirmative Defenses hereof. They likewise SPECIFICALLY DENY the rest
of the allegations therein that said request alterations/renovations started on December 5, 2001
and was done by the lowest bidders, JTV Construction Group, Inc., for civil works/renovations
and NCC Communication Networks, for wiring and cable installation, for whcih plaintiff
allegedly advanced/paid the sum of P1,555,170.40 for lack of knowledge or information
sufficient to form a belief as to the truth thereof.

xxxx

13. As an act of good faith, Atty. Sevilla, in behalf of MARINA, has offered to shoulder
and pay the actual expenses incurred for the works done on the premises based on MARINAs
request. Moreover, defendants cannot allow plaintiff to collect from them the additional sum of
P2,527,215.48 which is equivalent to two (2) months rental as penalty simply because there is no
justification therefor.

xxxx

Case Summary in Civil Procedure by: Jessica Bernardo Page 34


Furthermore, petitioners averred in their Opposition to Plaintiffs Motion for Summary
Judgment in Favor of Plaintiff.

Heirs of Cabigas v. Limbaco


G.R. No. 175291, July 27, 2011

Facts:

On February 4, 2003, the petitioners filed a complaint for the annulment of titles of various parcels of land
registered in the names of Melba Limbaco, Linda Logarta, Ramon Logarta, Eugenio Amores, New Ventures
Realty Corporation, Henry See, Freddie Go, Benedict Que, AWG Development Corporation (AWG), Petrosa
Development Corporation (Petrosa), and University of Cebu Banilad, Inc. (UCB) with the Regional Trial Court
(RTC) of Cebu City.

The complaint alleged that petitioner Lolita Cabigas and her late husband, Nicolas Cabigas, purchased
two lots (Lot No. 742 and Lot No. 953) from Salvador Cobarde on January 15, 1980. Cobarde in turn had
purchased these lots from Ines Ouano on February 5, 1948.

Notwithstanding the sale between Ouano and Cobarde, and because the two lots remained registered in
her name, Ouano was able to sell these same lots to the National Airports Corporation on November 25,
1952 for its airport expansion project. The National Airports Corporation promptly had the titles of these
properties registered in its name.

When the airport expansion project fell through, respondents Melba Limbaco, Ramon Logarta, and
Linda Logarta, the legal heirs of Ouano, succeeded in reclaiming title to the two lots through an action for
reconveyance filed with the lower court the titles over these lots were thereafter registered in their names. They
then subdivided the two lots and sold them to New Ventures Realty Corporation, Eugenio Amores, Henry See,
Freddie Go, Benedict Que, Petrosa, and AWG. AWG, in turn, sold one of the parcels of land to UCB. All the
buyers registered the titles over their respective lots in their names.

After the respondents had filed their individual Answers, respondents Henry See, Freddie Go and
Benedict Que filed a motion to set the case for hearing on special affirmative defenses on July 8, 2004. On the
other hand, respondents AWG, Petrosa, and UCB filed a motion for summary judgment on April 13, 2005,
admitting as true the facts stated in the petitioners complaint, but claiming that the petitioners had no legal right
to the properties in question.

RTC:
On August 23, 2005, the RTC issued a resolution, granting the motion for summary judgment filed by
AWG, Petrosa and UCB, and dismissing the petitioners complaint. According to the RTC, while the petitioners
alleged bad faith and malice on the part of Ouano when she sold the same properties to the National Airports
Corporation, they never alleged bad faith on the part of the buyer, the National Airports Corporation. Since
Case Summary in Civil Procedure by: Jessica Bernardo Page 35
good faith is always presumed, the RTC concluded that the National Airports Corporation was a buyer in
good faith and its registration of the properties in its name effectively transferred ownership over the two
lots, free from all the unrecorded prior transactions involving these properties, including the prior sale of the
lots to Cobarde.

As the RTC explained, the unregistered sale of the lots by Ouano to Cobarde was merely an in
personam transaction, which bound only the parties. On the other hand, the registered sale between Ouano and
the National Airports Corporation, a buyer in good faith, was an in rem transaction that bound the whole
world. Since Cobardes rights to the properties had already been cut off with their registration in the name of
the National Airports Corporation, he could not sell any legal interest in these properties to the Cabigas
spouses. Hence, under the Torrens system, the petitioners are strangers to the lots and they had no legally
recognized interest binding it in rem that the courts could protect and enforce against the world.
The petitioners filed a notice of appeal to question the RTC resolution.

CA:
In its May 31, 2006 resolution, the CA ruled that the petitioners should have filed a petition for review
on certiorari under Rule 45 of the Rules of Court with the Supreme Court instead of an ordinary appeal since
they only raised a question of law, i.e., the propriety of the summary judgment. Accordingly, insofar as the
respondents who filed the motion for summary judgment are concerned, namely, AWG, Petrosa, and UCB, the
CA dismissed the petitioners appeal.

However, the CA remanded the case to the RTC for further proceedings on the Motion to Set Case for
Hearing on Special and Affirmative Defenses filed by respondents Henry See, Freddie Go, and Benedict Que.

In its October 4, 2006 resolution, the CA resolved the petitioners motion for reconsideration, as well as the
Partial Motion for Reconsideration filed by respondents Henry See, Freddie Go, and Benedict Que. The CA
observed that it did not have jurisdiction to entertain the appeal since it raised a pure question of law. Since it
dismissed the appeal based on a technicality, it did not have the jurisdiction to order that the case be remanded
to the RTC.

ISSUE: The Court of Appeals committed grave and serious error in dismissing the appeal and in holding that a
summary judgment is appealable only through a petition for review on certiorari under Rule 45 to the Supreme
Court.

HELD: NO.

Petitioners availed of the wrong mode of appeal

Section 2, Rule 41 of the Rules of Court provides the three modes of appeal, which are as follows:

Section 2. Modes of appeal.


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(a) Ordinary appeal. The appeal to the Court of Appeals in cases decided by the Regional Trial
Court in the exercise of its original jurisdiction shall be taken by filing a notice of appeal with the
court which rendered the judgment or final order appealed from and serving a copy thereof upon
the adverse party. No record on appeal shall be required except in special proceedings and other
cases of multiple or separate appeals where the law or these Rules so require. In such cases, the
record on appeal shall be filed and served in like manner.

(b) Petition for review. The appeal to the Court of Appeals in cases decided by the Regional
Trial Court in the exercise of its appellate jurisdiction shall be by petition for review in
accordance with Rule 42.

(c) Appeal by certiorari. In all cases where only questions of law are raised or involved, the
appeal shall be to the Supreme Court by petition for review on certiorari in accordance with
Rule 45.

The first mode of appeal, the ordinary appeal under Rule 41 of the Rules of Court, is brought to the CA
from the RTC, in the exercise of its original jurisdiction, and resolves questions of fact or mixed questions of
fact and law. The second mode of appeal, the petition for review under Rule 42 of the Rules of Court, is brought
to the CA from the RTC, acting in the exercise of its appellate jurisdiction, and resolves questions of fact or
mixed questions of fact and law. The third mode of appeal, the appeal by certiorariunder Rule 45 of the Rules
of Court, is brought to the Supreme Court and resolves only questions of law.

Where a litigant files an appeal that raises only questions of law with the CA, Section 2, Rule 50 of the
Rules of Court expressly mandates that the CA should dismiss the appeal outright as the appeal is not
reviewable by that court.

There is a question of law when the issue does not call for an examination of the probative value of the
evidence presented, the truth or falsehood of facts being admitted, and the doubt concerns the correct
application of law and jurisprudence on the matter. On the other hand, there is a question of fact when the
doubt or controversy arises as to the truth or falsity of the alleged facts.

While the petitioners never filed their appellants brief, we discern from the petitioners submissions to
the CA, as well as from their petition with this Court, their perceived issues with respect to the RTCs summary
judgment, and they are as follows:

a) Whether or not the National Airports Corporation acted with good faith when it purchased the
properties from Ouano
b) Whether the heirs of Ouano acted with good faith in recovering the properties from the National
Airports Corporation and

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c) Whether the subsequent buyers of the properties acted with good faith in purchasing the properties
from the heirs of Ouano.

Given that the question of whether a person acted with good faith or bad faith in purchasing and
registering real property is a question of fact, it appears, at first glance, that the petitioners raised factual issues
in their appeal and, thus, correctly filed an ordinary appeal with the CA. After reviewing the RTC resolution
being assailed, however, we find that the petitioners actually raised only questions of law in their appeal.

The main issue to be resolved is who between [the] plaintiffs and the defendants have a better right to the
subject lots.

When there is no dispute as to the facts, the question of whether or not the conclusion drawn from these
facts is correct is a question of law. When the petitioners assailed the summary judgment, they were in fact
questioning the conclusions drawn by the RTC from the undisputed facts, and raising a question of law.

In light of the foregoing, jurisdiction over the petitioners appeal properly lay with this Court via an
appeal by certiorari, and the CA was correct in dismissing the appeal for lack of jurisdiction.

Rendition of summary judgment was proper

Even if we overlook the procedural lapse and resolve the case on the merits, we still affirm the assailed
CA resolutions.

Under the Rules of Court, a summary judgment may be rendered where, on motion of a party and after hearing,
the pleadings, supporting affidavits, depositions and admissions on file show that, except as to the amount of
damages, there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as
a matter of law. The Court explained the concept of summary judgment in Asian Construction and Development
Corporation v. Philippine Commercial International Bank:

Summary or accelerated judgment is a procedural technique aimed at weeding out sham claims
or defenses at an early stage of litigation thereby avoiding the expense and loss of time involved
in a trial.
Under the Rules, summary judgment is appropriate when there are no genuine issues of
fact which call for the presentation of evidence in a full-blown trial. Even if on their face the
pleadings appear to raise issues, when the affidavits, depositions and admissions show that
such issues are not genuine, then summary judgment as prescribed by the Rules must ensue
as a matter of law. The determinative factor, therefore, in a motion for summary judgment, is
the presence or absence of a genuine issue as to any material fact. [Emphasis supplied.]

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The petitioners assert that the RTC erred in rendering a summary judgment since there were factual
issues that required the presentation of evidence at a trial.

We disagree with the petitioners.

At the outset, we note from the respondents pleadings that several respondents denied that the sale
between Ouano and Cobarde ever occurred. It would, therefore, appear that a factual issue existed that required
resolution through a formal trial, and the RTC erred in rendering summary judgment.

A closer examination of the parties submissions, however, makes it apparent that this is not a genuine
issue of fact because, as will be discussed below, the petitioners do not have any legally enforceable right to the
properties in question, as their predecessors-in-interest are not buyers in good faith.

TOPIC: PRE TRIAL

NATIONAL POWER CORPORATION V. ADIONG


A.M. No. RTJ-07-2060

Facts:

In Civil Case No. 1918-03, plaintiffs Ibrahim Abdo, et al. who styled themselves as a group of farmers,
fishermen, laborers, workers, vendors, household members, and businessmen, collectively sought to hold NPC
liable for damages for operating seven Hydroelectric Power plants allegedly without due regard to the health
and safety of the plaintiffs and other residents of Marawi City and the province of Lanao del Sur. The plaintiffs
alleged that they and several others suffered ecological and economic disasters brought about by the operation
of regulatory dams which affected the natural flow of Lake Lanao and destroyed their farms, properties,
businesses and sources of livelihood. In addition to damages, the plaintiffs also sought the refund of millions of
pesos from the Purchase Power Adjustment (PPA) collected by NPC from its electric consumers through the
Lanao Del Sur Electric Cooperative.

On October 21, 2003, said plaintiffs filed an ex-parte Motion for the Release of P640,000,000 worth of
PPA and other generation charges. Judge Adiong granted the motion on November 9, 2004, but later set aside
his order on November 24, 2005[3] after NPC filed a motion for reconsideration on the ground of lack of notice
and due process.Judge Adiong then required the parties to present their respective evidence on December 8,
2005.

Subsequently, Judge Adiong issued a Resolution on February 28, 2006, ordering NPC to refund the
amount of P114,000,000, representing the Fuel Compensating Cost, Foreign Exchange, and Incremental Cost
Charges collected from April 1991 to December 1995 to refund the amount of P176,000,000, representing the

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Fuel and Power Cost Adjustment and PPA collected from January 1996 to April 2003 and to pay the amount
of P97,537,000 as attorneys fees.[4]

NPC sought reconsideration of the order alleging that no pre-trial was conducted and yet respondent
judge already passed upon the merits of the case. NPCs motion, however, was denied by Judge Adiong. Judge
Adiong reasoned that before issuing the questioned resolution, full-blown hearings were conducted and NPC
was afforded all the opportunities to present its evidence and to participate actively in the hearings. Having done
so, NPC has submitted itself to the courts jurisdiction and could no longer claim that no pre-trial was
conducted. Later, Judge Adiong also directed Sheriff Otto Gomampong to implement the February 28, 2006
Resolution ratiocinating that the same has already become final.

Thus, NPC filed the present administrative complaint, asserting that the issuance of the February 28,
2006 Resolution is contrary to and violative of the Rules of Courtbecause said resolution was issued by
respondent judge without first conducting the requisite pre-trial conference and despite the fact that no formal
offer of exhibits was made by plaintiffs in support of their allegations. Also, NPC complains of respondent
judges failure to lay down the basis for granting the plaintiffs ex-parte motion to release the PPA refunds, and in
awarding the exorbitant amount of P97,537,000.00 as attorneys fees.

NPC further states that while it admits that judges are not to be administratively charged for acts
committed in the exercise of their judicial functions, respondent judge had acted in violation of elementary rules
that was equivalent to intolerable and inexcusable gross ignorance of the law.

In his Comment dated June 1, 2006, respondent judge raised the following in his defense. With regard to the
lack of pre-trial conference, respondent judge asserts that he has set the case for hearing on December 8 and 15,
2005, and January 12, 13, and 27, 2006. In all these hearings, the parties were allowed to present whatever
evidence they had to support their claims. He also claims that the lack of pre-trial was never raised by NPC
since the time it filed its answer on May 15, 2003 up to the time plaintiffs started presenting their evidence
on December 8, 2005. It was only on February 14, 2006 that NPC belatedly filed a manifestation calling the
courts attention to the lack of pre-trial, without formally asking or praying for the setting of one. In addition, the
records show that the plaintiffs filed their pre-trial brief while defendant NPC did not. Thus, he argues that NPC
is deemed to have waived the holding of a pre-trial conference. Perforce, Judge Adiong argues that he should
not be held administratively liable for not conducting pre-trial.

On July 10, 2009, Justice Ayson submitted his report finding respondent judge administratively
liable. Justice Ayson did not delve into the correctness of the Resolution dated February 28, 2006, granting the
refund of millions of pesos representing the PPA charges, as the resolution is now the subject of an appeal with
this Court, docketed as G.R. No. 177288 entitled, Ibrahim Abdo, et al. v. Court of Appeals and National Power
Corporation. Neither did he delve into the merits of all the other cases from which the administrative cases filed
by NPC against Judge Adiong arose, for the reason that the proper venue for their review would be through the
usual judicial process of review by appellate courts.

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The Investigating Justice also noted the well-entrenched rule that a judge may not be held
administratively liable for every erroneous decision he renders, for no person called upon to determine the facts
or interpret the law in the administration of justice can be infallible. However, he also noted that there is a
prominent exception to the rule, that is, when the law is so elementary that not to know it constitutes gross
ignorance of the law.[19] In said cases, a judge committing such error may face administrative sanctions.

Further, the Investigating Justice stressed that the conduct of a pre-trial is mandatory. He explained that pre-trial
is a procedural device whereby the court is called upon to compel the parties and their lawyers to appear before
it and negotiate an amicable settlement or otherwise make a formal statement and embody in a single document
the issues of fact and law involved in the action. Respondent judge asserts that NPC only called the attention of
the court in passing in one of its hearings held sometime in December 8, 2005and January 27, 2006. Judge
Adiong alleges that he then advised NPC to file the appropriate pleading, but it was only after the case was
terminated that NPC made a manifestation on the lack of pre-trial. Judge Adiong adds that the conduct of a pre-
trial conference would have been a mere superfluity, and claims that the absence of pre-trial did not cause
substantial prejudice or injury to the parties as the purpose of expediting the proceedings has been
attained. However, Justice Ayson opined that under the circumstances, Judge Adiong should have scheduled the
case for pre-trial as he was already aware of the procedural defect. His act of not minding the setting of pre-trial,
when he had every opportunity and reasonable time to do so, can be characterized as negligent and imprudent,
according to Justice Ayson. Justice Ayson added that respondent judge apparently failed to comply with the
rules and failed to exercise the required initiative to set the case for pre-trial. Considering Judge Adiongs long
years of service, a total of thirty-nine (39) years in the Judiciary, more than anyone else, he should be presumed
to be conversant with the law and the rules. The law involved in this case being elementary, failure to consider it
or to act as if he does not know it, constitutes gross ignorance of the law.

ISSUE: Whether or not Judge Adiong is administratively liable for gross ignorance of law.

HELD: YES.

After careful review of the records of this case, we find the above observations and findings of the
Investigating Justice well taken.

Judge Adiong failed to conduct a pre-trial conference in Civil Case No. 1918-03 contrary to elementary
rules of procedure which he should have known all too well considering his long years of service in the
bench. The mandatory character of pre-trial is embodied in Administrative Circular No. 3-99 dated January 15,
1999, and found its way in Section 2, [24] Rule 18 of the Rules of Court, which imposes a duty upon the plaintiff
to promptly move ex parte that the case be set for pre-trial. To further implement the pre-trial guidelines, this
directive was reiterated in Administrative Matter No. 03-1-09-SC entitled Guidelines to be Observed by Trial
Court Judges and Clerks of Court in the Conduct of Pre-Trial and Use of Deposition-Discovery
Measures which recognized the importance of pre-trial and the deposition-discovery measures as vital
components of case management in trial courts.

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To further show that the Court is serious in implementing the rules on pre-trial, in Alviola v. Avelino the
Court imposed the penalty of suspension on a judge who merely failed to issue a pre-trial order within ten (10)
days after the termination of the pre-trial conference as mandated by Paragraph 8, Title I (A) of A.M. No. 03-1-
09-SC.

Here, respondent judge failed to conduct the pre-trial conference itself. It is elementary and plain that the
holding of such a pre-trial conference is mandatory and failure to do so is inexcusable. When the law or
procedure is so elementary, such as the provisions of the Rules of Court, not to know it or to act as if one does
not know it constitutes gross ignorance of the law. Such ignorance of a basic rule in court procedure, as failing
to conduct pre-trial, sadly amounts to gross ignorance and warrants a corresponding penalty.

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