SECOND DIVISION

[G.R. No. 125567. June 27, 2000]

ANTONIO (ANTONINO) SAMANIEGO, JOSE DE LA CRUZ, JOHN SAMANIEGO,

ERNESTO SANTOS, MACARIO DE LA CRUZ, ANDRES PASTORIN, BENETRITO
DE LA CRUZ, JESUS BATAC and RODOLFO LAGUISMA, petitioners, vs. VIC
ALVAREZ AGUILA, JOSEPHINE TAGUINOD and SECRETARY OF THE
DEPARTMENT OF AGRARIAN REFORM, respondents.

DECISION

MENDOZA, J.:

This is a petition for review on certiorari of the decision of the Court of Appeals,
[1]

dated January 25, 1996, denying petitioners appeal from a decision of the Office of
the President.

The sole issue in this case is whether the Office of the President is an indispensable
party in an appeal from its decision and, therefore, must be impleaded pursuant to
the Rules of Civil Procedure. For reasons to be discussed, we hold that it is not;
accordingly, we remand the case to the Court of Appeals for review on the merits.

Petitioners are tenants in a landholding with an aggregate area of 10.4496 hectares,

more or less, in Patul (now Malvar), Santiago, Isabela. The land belongs to Salud
Aguila, whose children, Vic Alvarez Aguila and Josephine Taguinod, are private
respondents.

It appears that the land in question was identified by the Department of Agrarian
Reform (DAR)-Region 2 as covered by the Operation Land Transfer Program of the
government. In 1976, Aguila, in behalf of her children, herein private respondents,
filed a petition for exemption from the coverage of P.D. No. 27. Petitioners opposed
the application on the ground that Aguilas transfer of the title to the lands to her
children was in violation of the rules and regulations of the DAR.

In its August 21, 1991 decision, the Regional Director granted the application for
exemption. On appeal to the DAR, the decision was affirmed in a decision dated
September 28, 1992. However, on motion of petitioners, the DAR reversed its ruling
and denied private respondents application for exemption and declared petitioners
the rightful farmer-beneficiaries of the land.

Private respondents appealed to the Office of the President which, in a decision,

dated January 1, 1995, stated:

WHEREFORE, premises considered, the Order, dated January 6, 1993,

of the Department of Agrarian Reform is hereby SET ASIDE. The earlier
order of that Department, dated September 28, 1992, is hereby
CONFIRMED and REINSTATED with a modification that subject
 landholdings are not covered by the OLT program of the government
pursuant to P.D. No. 27.

Petitioners appealed to the Court of Appeals, but their petition was dismissed. The
appellate court held:

It is very clear from the allegations in the Petition For Review that the
questioned decision and resolution were both issued by the Office of the
President. As such, the Office of the President is an indispensable party
to the case. Failure to implead said Office is fatal to the petitioners
cause and, hence, should be dismissed. (Cf: Sec.2, Rule 3, Revised
Rules of Court.)

Time and again, it has been held that the joinder of indispensable
parties is mandatory. Unless they are impleaded, the action cannot
proceed and the omission is fatal to the plaintiffs cause. (United
Paracale Mining Co. vs. Court of Appeals, et. al., 232 SCRA 663, 666.)

Petitioners moved for a reconsideration, contending that under Administrative

Circular No. 1-95, the Office of the President need not be impleaded. However, their
motion was denied.

Hence, this petition.

First. At the time petitioners brought their case to the Court of Appeals, the
procedure governing appeals to said court from quasi-judicial agencies was
embodied in Revised Administrative Circular No. 1-95, which provides in relevant
parts:

TO: COURT OF APPEALS, COURT OF TAX APPEALS, THE

SOLICITOR GENERAL, THE GOVERNMENT CORPORATE
COUNSEL, ALL MEMBERS OF THE GOVERNMENT PROSECUTION
SERVICE, AND ALL MEMBERS OF THE INTEGRATED BAR OF THE
PHILIPPINES.

SUBJECT:....RULES GOVERNING APPEALS TO THE COURT OF

APPEALS FROM JUDGMENTS OR FINAL ORDERS OF THE COURT
OF TAX APPEALS AND QUASI-JUDICIAL AGENCIES.

1. Scope.- These rules shall apply to appeals from judgments or final

orders of the Court of Tax Appeals and from awards, judgments, final
orders or resolutions of or authorized by any quasi-judicial agency in the
exercise of its quasi-judicial functions. Among these agencies are the
Civil Service Commission, Central Board of Assessment Appeals,
Securities and Exchange Commission, Land Registration Authority,
Social Security Commission, Office of the President, Civil Aeronautics
Board, etc.
 ....

6. Contents of petition. .- The petition for review shall (a) state the full
names of the parties to the case, without impleading the court or
agencies either as petitioners or respondents. (Emphasis added).

Thus, it is clear that petitioners failure to implead the Office of the President does
not warrant the dismissal of the case as it is in accordance with this circular. It is not
true that the Office of the President is not included within the scope of this circular. It
is, as can plainly be seen above.

Second. The Court of Appeals held that in appeals from decisions of the Office of
the President, the latter is an indispensable party. This is error. Under Rule 7, 3 of
the Rules of Civil Procedure, an indispensable party is a party in interest without
whom no final determination can be had of an action without that party being
impleaded. Indispensable parties are those with such an interest in the controversy
that a final decree would necessarily affect their rights, so that the court cannot
proceed without their presence. "Interest", within the meaning of this rule, should be
[2]

material, directly in issue and to be affected by the decree, as distinguished from a

mere incidental interest in the question involved. On the other hand, a nominal
[3]

or pro forma party is one who is joined as a plaintiff or defendant, not because such
party has any real interest in the subject matter or because any relief is demanded,
but merely because the technical rules of pleadings require the presence of such
party on the record. [4]

In the case at bar, even assuming that the Office of the President should have been
impleaded by petitioner, it is clear that the Office of the President is merely a pro
forma party, in the same way that a respondent court is a pro forma party in special
civil actions for certiorari.

The issue in the petition before the Court of Appeals is whether a private land
should be exempted from the coverage of P.D. No 27. Whatever happens to that
case and whoever wins would not bring any prejudice or gain to the government.
The only participation of the Office of the President in this case is its role as the
office which entertains appeals from decisions of the DAR. Indeed, the very reason
that the appellate court excused the Office of the Solicitor General from filing a
comment is that it deemed that the case involved "purely private interests."

WHEREFORE, the decision of the Court of Appeals, dated January 25, 1996, and
its resolution, dated July 5, 1996, are hereby REVERSED and the Court of Appeals
is ORDERED to decide the case on the merits with deliberate speed.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION
G.R. No. 197380 October 8, 2014

ELIZA ZUNIGA-SANTOS,* represented by her Attorney-in Fact, NYMPHA Z. SALES, Petitioners,

vs.
MARIA DIVINA GRACIA SANTOS-GRAN** and REGISTER OF DEEDS OF MARIKINA
CITY, Respondents.

DECISION

PERLAS-BERNABE, J.:

Before the Court is a petition for review on certiorari assailing the Decision dated January 10, 2011 and the
1 2

Resolution dated June 22, 2011 of the Court of Appeals (CA) in CA-G.R. CV No. 87849 which affirmed the
3

Order dated July 6, 2006 of the Regional Trial Court of San Mateo, Rizal, Branch 76 (RTC) in Civil Case No.
4

2018-06, dismissing the Amended Complaint for annulment of sale and revocation of title on the ground of
insufficiency of factual basis.

The Facts

On January 9, 2006, petitioner Eliza Zuiga-Santos (petitioner), through her authorized representative,
Nympha Z. Sales, filed a Complaint for annulment of sale and revocation of title against respondents Maria
5 6

Divina Gracia Santos-Gran (Gran) and the Register of Deeds of Marikina City before the RTC, docketed
asCivil Case No. 2018-06. The said complaint was later amended on March 10, 2006 (Amended
7

Complaint).

In her Amended Complaint, petitioner alleged, among others, that: (a) she was the registered owner of three
8

(3) parcels of land located in the Municipality of Montalban, Province of Rizal, covered by Transfer
Certificate of Title (TCT) Nos. N-5500, 224174, and N-4234 (subject properties) prior to their transfer in
9 10 11

the name of private respondent Gran; (b) she has a second husband by the name ofLamberto C. Santos
(Lamberto), with whom she did not have any children; (c) she was forced to take care of Lambertos alleged
daughter, Gran, whose birth certificate was forged to make it appear that the latter was petitioners daughter;
(d) pursuant to void and voidable documents, i.e., a Deed of Sale, Lamberto succeeded in transferring the
subject properties in favor of and in the name of Gran; (e) despite diligent efforts, said Deed of Sale could
not be located; and (f) she discovered that the subject properties were transferred to Gran sometime in
November 2005. Accordingly, petitioner prayed, inter alia, that Gran surrender to her the subject properties
and pay damages, including costs of suit. 12

For her part, Gran filed a Motion to Dismiss, contending, inter alia, that (a) the action filed by petitioner had
13

prescribed since an action upon a written contract must be brought within ten (10) years from the time the
cause of action accrues, or in this case, from the time of registration of the questioned documents before the
Registry of Deeds; and (b) the Amended Complaint failed to state a cause of action as the void and
14

voidable documents sought to be nullified were not properly identified nor the substance thereof set forth,
thus, precluding the RTC from rendering a valid judgment in accordance withthe prayer to surrender the
subject properties. 15

The RTC Ruling

In an Order dated July 6, 2006, the RTC granted Grans motion and dismissed the Amended Complaint for
16

its failure to state a cause of action, considering that the deed of sale sought to be nullified an "essential
and indispensable part of [petitioners] cause of action" was not attached. It likewise held that the
17

certificates oftitle covering the subject properties cannot be collaterally attacked and that since the action
was based on a written contract, the same had already prescribed under Article 1144 of the Civil Code. 18

Dissatisfied, petitioner elevated the matter to the CA.

The CA Ruling

In a Decision dated January 10, 2011, the CA sustained the dismissal of petitioners Amended Complaint
19

buton the ground of insufficiency of factual basis. It disagreed with the RTCs findingthat the said pleading
failed to state a cause of action since it had averred that: (a) petitioner has a right over the subject properties
being the registered owner thereof prior to their transfer in the name of Gran; (b) Lamberto succeeded in
transferring the subject properties to his daughter, Gran, through void and voidable documents; and (c) the
latters refusal and failure to surrender to her the subject properties despite demands violated petitioners
rights over them. The CA likewise ruled that the action has not yet prescribed since an action for nullity of
20

void deeds of conveyance is imprescriptible. Nonetheless, it held that since the Deed of Sale sought to be
21

annulled was not attached to the Amended Complaint, it was impossible for the court to determine whether
petitioners signature therein was a forgery and thus, would have no basis to order the surrender or
reconveyance of the subject properties. 22

Aggrieved, petitioner moved for reconsideration and attached, for the first time, a copy of the questioned
23

Deed of Sale which she claimed to have recently recovered, praying that the order of dismissal be set aside
24

and the case be remanded to the RTC for further proceedings.

In a Resolution dated June 22, 2011, the CA denied petitioners motion and held that the admission of the
25

contested Deed of Sale at this late stage would be contrary to Grans right to due process.

Hence, the instant petition.

The Issue Before the Court

The primordial issue for the Courts resolution is whether or not the dismissal of petitioners Amended
Complaint should be sustained.

The Courts Ruling

Failure to state a cause of action and lack of cause of action are distinct grounds to dismiss a
particularaction. The former refers to the insufficiency of the allegations in the pleading, while the latter to the
insufficiency of the factual basis for the action. Dismissal for failure to state a cause of action may be raised
at the earliest stages of the proceedings through a motion to dismiss under Rule16 of the Rules of Court,
while dismissal for lack of cause of action may be raised any time after the questions of fact have been
resolved on the basis of stipulations, admissions or evidence presented by the plaintiff. In Macaslang v.
26

Zamora, the Court, citing the commentary of Justice Florenz D. Regalado, explained:
27

Justice Regalado, a recognized commentator on remedial law, has explained the distinction:

x x x What is contemplated, therefore, is a failure to statea cause of action which is provided in Sec. 1(g) of
Rule 16. This is a matter of insufficiency of the pleading. Sec. 5 of Rule 10, which was also included as the
last mode for raising the issue to the court, refers to the situation where the evidence does not provea cause
of action. This is, therefore, a matter of insufficiency of evidence. Failure to state a cause of action is
different from failure to prove a cause of action. The remedy in the first is to move for dismissal of the
pleading, whilethe remedy in the second is to demur to the evidence, hence reference to Sec. 5 of Rule 10
has been eliminated in this section. The procedure would consequently be to require the pleading to state a
cause of action, by timely objection to its deficiency; or, at the trial, to file a demurrer to evidence, if such
motion is warranted. 28
In the case at bar, both the RTC and the CA were one in dismissing petitioners Amended Complaint, but
varied on the grounds thereof that is, the RTC held that there was failure tostate a cause of action while
the CA ruled that there was insufficiency of factual basis.

At once, it is apparent that the CA based its dismissal on an incorrect ground. From the preceding
discussion, it is clear that "insufficiency of factual basis" is not a ground for a motion to dismiss. Rather, it is
a ground which becomes available only after the questions of fact have been resolved on the basis of
stipulations, admissions or evidence presented by the plaintiff. The procedural recourse to raise such ground
is a demurrer to evidence taken only after the plaintiffs presentation of evidence. This parameter is clear
under Rule 33 of the Rules of Court: RULE 33

Demurrer to Evidence

Section 1. Demurrer to evidence. After the plaintiff has completed the presentation of his evidence, the
defendant may move for dismissal on the ground that upon the facts and the law the plaintiff has shown no
right to relief. If his motion isdenied he shall have the right to present evidence. If the motion is granted but
on appeal the order of dismissal is reversed he shall be deemed to have waived the right to present
evidence.

At the preliminary stages of the proceedings, without any presentation of evidence even conducted, it is
perceptibly impossible to assess the insufficiency of the factual basis on which the plaintiff asserts his cause
of action, as in this case. Therefore, that ground could not be the basis for the dismissal of the action.

However, the Amended Complaint is still dismissible but on the ground of failure to state a cause of action,
as correctly held by the RTC. Said ground was properly raised by Granin a motion to dismiss pursuant to
Section 1, Rule 16 of the Rules of Court:

RULE 16
Motion to Dismiss

Section 1. Grounds. Within the time for but before filing the answer to the complaint or pleading asserting
a claim, a motion to dismiss may be made on any of the following grounds:

xxxx

(g) That the pleading asserting the claim states no cause of action;

xxxx

A complaint states a cause of action if it sufficiently avers the existence of the three (3) essential elements of
a cause of action, namely: (a) a right in favor of the plaintiff by whatever means and under whatever law it
arises or is created; (b) an obligation on the part of the named defendant to respect or not to violate such
right; and (c) an act or omission on the part of the named defendant violative of the right of the plaintiff or
constituting a breach of the obligation of defendant tothe plaintiff for which the latter may maintain an action
for recovery of damages. If the allegations of the complaint do not state the concurrence of these elements,
29

the complaint becomes vulnerable to a motion to dismiss on the ground of failure to state a cause of action. 30

It is well to point out that the plaintiffs cause of action should not merely be "stated" but, importantly, the
statement thereof should be "sufficient." This is why the elementarytest in a motion to dismiss on such
ground is whether or not the complaint alleges facts which if true would justify the relief demanded. As a
31

corollary, it has been held that only ultimate facts and not legal conclusions or evidentiary facts are
considered for purposes of applying the test. This is consistent with Section 1, Rule 8 of the Rules of Court
32

which states that the complaint need only allege the ultimate facts or the essential facts constituting the
plaintiffs cause of action. A fact is essential if they cannot be stricken out without leaving the statement of
the cause of action inadequate. Since the inquiry is into the sufficiency, not the veracity, of the material
33

allegations, it follows that the analysis should be confined to the four corners of the complaint, and no other. 34

A judicious examination of petitioners Amended Complaint readily shows its failure to sufficiently state a
cause of action. Contrary to the findings of the CA, the allegations therein do not proffer ultimate facts which
would warrant an action for nullification of the sale and recovery of the properties in controversy,
hence,rendering the same dismissible.

While the Amended Complaint does allege that petitioner was the registered owner of the subject properties
in dispute, nothing in the said pleading or its annexes would show the basis of that assertion, either through
statements/documents tracing the rootof petitioners title or copies of previous certificates of title registeredin
her name. Instead, the certificates of title covering the said properties that were attached to the Amended
Complaint are in the name of Gran. At best, the attached copies of TCT Nos. N-5500 and N-4234 only
mention petitioner as the representative of Gran at the time of the covered propertys registration when she
was a minor. Nothing in the pleading, however, indicates that the former had become any of the properties
owner. This leads to the logical conclusion that her right to the properties in question at least through the
manner in which it was alleged in the Amended Complaint remains ostensibly unfounded. Indeed, while
the facts alleged in the complaint are hypothetically admitted for purposes of the motion, it must,
nevertheless, be remembered that the hypothetical admission extends only to the relevant and material facts
well pleaded in the complaint as well as toinferences fairly deductible therefrom. Verily, the filing of the
35

motion to dismiss assailing the sufficiency of the complaint does not hypothetically admit allegations of
which the court will take judicial notice ofto be not true, nor does the rule of hypothetical admission apply to
legallyimpossible facts, or to facts inadmissible in evidence, or to facts that appear to be unfounded by
record or document included in the pleadings. 36

Aside from the insufficiency of petitioners allegations with respect to her right to the subject properties
sought to be recovered, the ultimate facts supposedly justifying the "annulment of sale," by which the
reconveyance of the subject properties is sought, were also insufficiently pleaded. The following averments
in the Amended Complaint betray no more than an insufficient narration of facts:

6. That pursuant to a voidable [sic] and void documents, the second husband of the plaintiff succeed [sic] in
transferring the above TITLES in the name of MARIA DIVINAGRACIA SANTOS, who is (sic) alleged
daughter of LAMBERTO C. SANTOS in violation of Article 1409, Par. 2 of the Civil Code;

7. That the said properties [were] transferred to the said defendant by a Deed of Sale (DOS) to the said
MARIA DIVINA GRACIA SANTOS through a void documents [sic] considering that the seller is the alleged
mother of defendant is also the buyer of the said properties in favor of defendant;

8. x x x.

9. That the alleged sale and transfer of the said properties in favor of defendant was only discovered by
[plaintiffs] daughter CYNTHIA BELTRAN-LASMARIAS when [plaintiff] has been requesting for financial
assistance, considering that the said mother of plaintiff [sic] has so many properties which is now the subject
of this complaint;

10. That plaintiff then return on [to] the Philippines sometime [in] November, 2005 and discovered that all
[plaintiffs] properties [had] been transferred to defendant MARIA DIVINA GRACIA SANTOS who is not a
daughter either by consanguinity or affinity to the plaintiff mother [sic];

11. That the titles that [were] issued in the name of MARIA DIVINAGRACIA SANTOS by virtue of the said
alleged voidable and void documents, should be annulled and cancelled as the basis of the transfer is
through void and voidable documents;

xxxx 37

Clearly, the claim that the sale was effected through "voidable and void documents" partakes merely of a
conclusion of law that is not supported by any averment of circumstances that will show why or how such
conclusion was arrived at. In fact, what these "voidable and void documents" are were not properly stated
and/or identified. In Abad v. Court of First Instance of Pangasinan, the Court pronounced that:
38

A pleading should state the ultimate facts essential to the rights of action or defense asserted, as
distinguished from mere conclusions of fact, or conclusions of law. General allegations thata contract is valid
or legal, or is just, fair, and reasonable, are mere conclusions of law. Likewise, allegations that a contract is
void, voidable, invalid, illegal, ultra vires, or against public policy, without stating facts showing its invalidity,
are mere conclusions of law. (Emphases supplied)
39

Hence, by merely stating a legal conclusion, the Amended Complaint presented no sufficient allegation upon
which the Court could grant the relief petitioner prayed for. Thus, said pleading should be dismissed on the
ground of failure to state cause of action, as correctly held by the RTC.

That a copy of the Deed of Saleadverted to in the Amended Complaint was subsequently submitted by
petitioner does not warrant a different course of action. The submission of that document was made, as it
1wphi1

was purportedly "recently recovered," only on reconsideration before the CA which, nonetheless, ruled
against the remand of the case. An examination of the present petition, however, reveals no counter-
argument against the foregoing actions; hence, the Court considers any objection thereto as waived.

In any event, the Court finds the Amended Complaints dismissal to be in order considering that petitioners
cause of action had already prescribed.
It is evident that petitioner ultimately seeks for the reconveyance to her of the subject properties through the
nullification of their supposed sale to Gran. An action for reconveyance is one that seeks to transfer property,
wrongfully registered by another, to its rightful and legal owner. Having alleged the commission of fraud by
40

Gran in the transfer and registration of the subject properties in her name, there was, in effect, an implied
trust created by operation of law pursuant to Article 1456 of the Civil Code which provides:

Art. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of law,
considered a trustee of an implied trust for the benefit of the person from whom the property comes. 1wphi1

To determine when the prescriptive period commenced in an action for reconveyance, the plaintiffs
possession of the disputed property is material. If there is an actual need to reconvey the property as when
the plaintiff is not in possession, the action for reconveyance based on implied trust prescribes in ten (10)
years, the reference point being the date of registration of the deed or the issuance of the title. On the other
hand, if the real owner of the property remains in possession of the property, the prescriptive period to
recover titleand possession of the property does not run against him and in such case,the action for
reconveyance would be in the nature of a suit for quieting of title which is imprescriptible. 41

In the case at bar, a reading ofthe allegations of the Amended Complaint failed to show that petitioner
remained in possession of the subject properties in dispute. On the contrary, it can be reasonably deduced
that it was Gran who was in possession ofthe subject properties, there being an admission by the petitioner
that the property covered by TCT No. 224174 was being used by Grans mother-in-law. In fact, petitioners
42

relief in the Amended Complaint for the "surrender" of three (3) properties to her bolsters such stance. And 43

since the new titles tothe subject properties in the name of Gran were issued by the Registry of Deeds of
Marikina on the following dates: TCT No. 224174 on July 27, 1992, TCT No. N-5500 on January 29,
44

1976, and TCT No. N-4234 on November 26, 1975, the filing of the petitioners complaint beforethe RTC
45 46

on January 9, 2006 was obviously beyond the ten-year prescriptive period, warranting the Amended
Complaints dismissal all the same.

WHEREFORE, the petition is DENIED. The Decision dated January 10, 2011 and the Resolution dated June
22, 2011 of the Court of Appeals in CA-G.R. CV No. 87849 are hereby AFFIRMEDwith MODIFICATION in
that the Amended Complaint be dismissed on the grounds of (a) failure to state a cause of action, and (b)
prescription as herein discussed.

SO ORDERED.

ESTELA M. PERLAS-BERNABE
Associate Justice

WE CONCUR:

MARIA LOURDES P. A. SERENO

Chief Justice

TERESITA J. LEONARDO-DE CASTRO LUCAS P. BERSAMIN

Associate Justice Associate Justice

JOSE PORTUGAL PEREZ

Associate Justice

C E R TI F I C ATI O N

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision
had been reached in consultation before the case was assigned to the writer of the opinion of the Court's
Division.

MARIA LOURDES P. A. SERENO

Chief Justice
 SECOND DIVISION

G.R. No. 199133, September 29, 2014

ESPERANZA TUMPAG, SUBSTITUTED BY HER SON, PABLITO TUMPAG BELNAS, JR., Petitioner, v. SAMUEL
TUMPAG, Respondent.

DECISION

BRION, J.:

We resolve the petition for review on certiorari1 assailing the November 30, 2010 decision 2 and the September 28,
2011 resolution3 of the Court of Appeals (CA), Cebu City in CA-G.R. CV No. 78155. The CA dismissed, without
prejudice, the complaint for recovery of possession and damages that the petitioner filed before the Regional Trial
Court (RTC) because the complaint failed to allege the assessed value of the disputed property in the case.

Brief Statement of Facts

On March 13, 1995, Esperanza Tumpag (petitioner) filed a complaint for recovery of possession with damages
(docketed as Civil Case No. 666) against Samuel Tumpag (respondent) before the RTC, Branch 61, Kabankalan City,
Negros Occidental. The complaint alleged that: chanRoble svirtualLawlibrary

1) Plaintiff (referring to the petitioner) is of legal age, widow, Filipino citizen and a resident of Barangay Tuyom,
Cauayan, Negros Occidental, while Defendant (referring to the respondent) is also of legal age, married, Filipino and
a resident of Barangay Tuyom, Cauayan, Negros Occidental, where he maybe served with summons and other
processes of this Honorable Court;

2) Plaintiff is the absolute owner of a parcel of land, identified as Lot No. 1880-A, Cauayan Cadastre, containing an
area of TWELVE THOUSAND NINE HUNDRED NINETY TWO (12,992) SQUARE METERS, more or less, situated in
Barangay Tuyom, Cauayan, Negros Occidental, more particularly bounded and described in Transfer Certificate of
Title No. T-70184, dated April 27, 1983, issued by the Register of Deeds of Negros Occidental in favor of Plaintiff,
xerox copy of which is hereto attached as ANNEX A and made an integral part hereof;

3) Defendant has been occupying a portion of not less than ONE THOUSAND (1,000) SQUARE METERS of the above-
described parcel of land of the Plaintiff for more than TEN (10) years, at the tolerance of Plaintiff;

4) Sometime in 1987, Plaintiff wanted to recover the portion occupied by Defendant but Defendant refused to return
to Plaintiff or vacate said portion he has occupied inspite of repeated demands from Plaintiff. And, to prevent Plaintiff
from recovering the portion he has occupied, Defendant instigated his other relatives to file a case against the herein
Plaintiff, and, in 1988, herein Defendant Samuel Tumpag, together with Luz Tagle Vda. De Tumpag and other
relatives, filed a civil case, number 400, before this court against herein Plaintiff, Esperanza Tumpag, for cancellation
of her title with damages;

5) Said Civil Case No. 400 was dismissed by this Honorable Court through its Resolution, dated October 11, 1989,
penned by the Presiding Judge, the late Artemio L. Balinas, prompting the Plaintiffs in said case to elevate the said
resolution of this Honorable Court to the Court of Appeals, and their appeal is identified as C.A. G.R. No. CV-25699;

6) On June 28, 1991, the Court of Appeals rendered a decision in the said appealed case, the dispositive portion of
which read: chanroblesvirtuallawlibrary
PREMISES CONSIDERED, the appealed Resolution dated October 11, 1989 is hereby AFFIRMED.
and, that the same has become final on March 11, 1994 and was entered, on August 26, 1994, in the Book of Entries
of Judgment, xerox copy of said Entry of Judgment of the Court of Appeals is hereto attached as ANNEX B and
made part hereof;

7) Herein Plaintiff needs the portion occupied by Defendant and she has orally demanded from Defendant of the
return of the same, but Defendant refused and still refuses to do so. Hence, Plaintiff brought the matter before the
Office of the Barangay Captain of Barangay Tuyom, Cauayan, Negros Occidental, for conciliation, on March 3, 1995.
But, unfortunately, Defendant refused to vacate or return the portion he occupies to Plaintiff. Attached hereto as
ANNEX C, and made part hereof, is the Certification of the Barangay Captain of Barangay Tuyom, Cauayan, Negros
Occidental, certifying that this matter was brought to his attention for conciliation;

8) Defendants refusal to return the portion he occupies to Plaintiff has caused Plaintiff to suffer actual damages in
the amount of not less than TEN THOUSAND PESOS (P10,000.00), per annum;

9) Defendants unjustifiable refusal to return the portion he occupies to Plaintiff has caused Plaintiff to suffer mental
anguish, embarrassment, untold worries, sleepless nights, fright and similar injuries, entitling her to moral damages
moderately assessed at not less than FIFTY THOUSAND PESOS (P50,000.00);

10) To serve as deterrent (sic) to other persons similarly inclined and by way of example for the public good,
Defendant should be made to pay exemplary damages in the amount of not less than TWENTY FIVE THOUSAND
PESOS (P25,000.00);

11) The unjustifiable refusal of Defendant to return the property to the Plaintiff leaves Plaintiff no other alternative
but to file this present action, forcing her to incur litigation expenses amounting to not less than ONE THOUSAND
PESOS (P1,000.00), attorneys fees in the amount of TWENTY THOUSAND PESOS (P20,000.00) plus ONE THOUSAND
PESOS (P1,000.00) for every court appearance.4 cralawlawlibrary

xxxx

Together with his answer (which was later amended), the respondent moved to dismiss the complaint on the
following grounds: failure to state a cause of action; that the action was barred by prior judgment; and lack of
jurisdiction.5
cralawla wlibrary

The RTC, in an order dated January 16, 1996, denied the respondents motion to dismiss and proceeded with pre-
trial and trial.6 cralawlawlibrary

During the pendency of the case, the petitioner died and was substituted by her son Pablito Tumpag Belnas, Jr. 7 cralawla wlibrary

In a decision8 dated June 3, 2002, the RTC ordered the respondent to return possession of the subject portion of the
property to the petitioner and to pay the petitioner P10,000.00 as actual damages, P20,000.00 as moral damages,
and P10,000.00 as attorneys fees.

In his appeal to the CA, among the grounds the respondent raised was the issue of the RTCs lack of jurisdiction over
the case.9 cralawlawlibrary

In its assailed decision,10 the CA agreed with the respondent and nullified the RTCs June 3, 2002 decision and all
proceedings before the trial court. It held that the petitioners failure to allege in her complaint the assessed value
of the disputed property warranted the complaints dismissal, although without prejudice, because the courts
jurisdiction over the case should be determined by the material allegations of the complaint 11 and cannot be made
to depend upon the defenses set up in court or upon a motion to dismiss for, otherwise, the question of jurisdiction
would depend almost entirely on the defendant.12 The petitioner moved to reconsider but the CA denied her motion
in its resolution13 dated September 28, 2011. The CAs ruling and denial of the motion for reconsideration gave rise
to the present petition for review on certiorari filed with this Court.

The petitioner now argues that the respondent, after having actively participated in all stages of the proceedings in
Civil Case No. 666, is now estopped from assailing the RTCs jurisdiction; that the subject case had been litigated
before the RTC for more than seven (7) years and was pending before the CA for almost eight (8) years. Further, she
argues that the dismissal of her complaint was not warranted considering that she had a meritorious case as
attached to her complaint was a copy of a Declaration of Real Property indicating that the assessed
value of the disputed property is P20,790.00.

Our Ruling

We find MERIT in the present petition. The CAs dismissal of the petitioners complaint for recovery of possession
is erroneous and unwarranted.

It is well-settled that jurisdiction over a subject matter is conferred by law, not by the parties action or
conduct,14 and is, likewise, determined from the allegations in the complaint. 15 cralawla wlibrary

Under Batas Pambansa Blg. 129,16 as amended by Republic Act No. 7691, 17 the jurisdiction of Regional Trial Courts
over civil actions involving title to, or possession of, real property, or any interest therein, is limited to cases where
the assessed value of the property involved exceeds Twenty thousand pesos (P20,000.00) or, for civil actions in
Metro Manila, where such value exceeds Fifty thousand pesos (P50,000.00), except actions for forcible entry into and
unlawful detainer of lands or buildings. 18
cralawlawlibrary

Here, the petitioner filed a complaint for recovery of possession of real property before the RTC but failed to allege in
her complaint the propertys assessed value. Attached, however, to the petitioners complaint was a copy of a
Declaration of Real Property showing that the subject property has a market value of P51,965.00 and assessed value
of P20,790.00. The CA was fully aware of this attachment but still proceeded to dismiss the petitioners
complaint:

Record shows that the complaint was filed with the Regional Trial Court on December 13, 1995. There is no
allegation whatsoever in the complaint for accion publiciana concerning the assessed value of the property
involved. Attached however to the complaint is a copy of the Declaration of Real Property of subject land
which was signed by the owner stating that its market value is P51,965 and its assessed value is
P20,790.00. (Emphasis ours)19 chanrobleslaw

Generally, the court should only look into the facts alleged in the complaint to determine whether a suit is within its
jurisdiction.20 There may be instances, however, when a rigid application of this rule may result in defeating
substantial justice or in prejudice to a partys substantial right. 21 In Marcopper Mining Corp. v. Garcia, 22 we allowed
the RTC to consider, in addition to the complaint, other pleadings submitted by the parties in deciding whether or not
the complaint should be dismissed for lack of cause of action. In Guaranteed Homes, Inc. v. Heirs of Valdez, et
al., 23 we held that the factual allegations in a complaint should be considered in tandem with the statements and
inscriptions on the documents attached to it as annexes or integral parts.

In the present case, we find reason not to strictly apply the above-mentioned general rule, and to consider the facts
contained in the Declaration of Real Property attached to the complaint in determining whether the RTC had
jurisdiction over the petitioners case. A mere reference to the attached document could facially resolve the question
on jurisdiction and would have rendered lengthy litigation on this point unnecessary.

In his comment24 to the present petition, the respondent contends that the assessed value of the property subject of
the case is actually much below than the value stated in the attached Declaration of Real Property. However, the test
of the sufficiency of the facts alleged in the complaint is whether, admitting the facts alleged, the court can render a
valid judgment upon the complaint in accordance with the plaintiffs prayer. 25 The defendant, in filing a motion to
dismiss, hypothetically admits the truth of the factual and material allegations in the complaint, 26 as well as the
documents attached to a complaint whose due execution and genuineness are not denied under oath by the
defendant; these attachments must be considered as part of the complaint without need of introducing evidence
thereon.27cralawlawlibrary

Lastly, we note that the present petitioner's situation comes close with those of the respondents in Honorio Bernardo
v. Heirs of Eusebio Villegas,28 where the Villegas heirs, in filing their complaint for accion publiciana before the RTC,
failed to allege the assessed value of the subject property. On the complaints omission, the defendant questioned
the RTCs jurisdiction in his answer to the complaint and, again, in his appeal before the CA.

In Bernardo v. Heirs of Villegas,29 we affirmed the CA ruling that upheld the RTCs jurisdiction over the case despite
the complaints failure to allege the assessed value of the property because the defendant-petitioner was found to
have actively participated in the proceedings before the trial court and was already estopped from assailing the
jurisdiction of the RTC. While we mention this case and its result, we cannot, however, apply the principle
of estoppel (on the question of jurisdiction) to the present respondent.

We rule that the respondent is not estopped from assailing the RTCs jurisdiction over the subject civil case. Records
show that the respondent has consistently brought the issue of the courts lack of jurisdiction in his
motions, pleadings and submissions throughout the proceedings, until the CA dismissed the petitioners
complaint, not on the basis of a finding of lack of jurisdiction, but due to the insufficiency of the petitioners
complaint, i.e. failure to allege the assessed value of the subject property. Even in his comment filed before this
Court, the respondent maintains that the RTC has no jurisdiction over the subject matter of the case.

Lack of jurisdiction over the subject matter of the case can always be raised anytime, even for the first time on
appeal,30 since jurisdictional issues, as a rule, cannot be acquired through a waiver or enlarged by the omission of
the parties or conferred by the acquiescence of the court. 31 Thus, the respondent is not prevented from raising the
question on the courts jurisdiction in his appeal, if any, to the June 3, 2002 decision of the RTC in Civil Case No. 666.

WHEREFORE, premised considered, we GRANT the present petition for review on certiorari and SET ASIDE the
decision dated November 30, 2010 and resolution dated September 28, 2011 of the Court of Appeals, Cebu City in
CA-G.R. CV No. 78155.

Accordingly, we REINSTATE the decision dated June 3, 2002 of the Regional Trial Court, Branch 61, Kabankalan
City, Negros Occidental in Civil Case No. 666.

SO ORDERED. cralawred

Carpio, (Chairperson), Del Castillo, Mendoza, and Leonen, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 146089 December 13, 2001

VIRGINIA GOCHAN, LOUISE GOCHAN, LAPU-LAPU REAL ESTATE CORPORATION, FELIX GOCHAN
AND SONS REALTY CORPORATION, MACTAN REALTY DEVELOPMENT CORPORATION, petitioners,
vs.
MERCEDES GOCHAN, ALFREDO GOCHAN, ANGELINA GOCHAN-HERNAEZ, MA. MERCED GOCHAN
GOROSPE, CRISPO GOCHAN, JR., and MARLON GOCHAN, respondents.

YNARES-SANTIAGO, J.:

This is a petition for review seeking to set aside the decision of the Court of Appeals dated September 10,
1999 in CA-G.R. SP No. 49084,1 as well as its Resolution2 dated November 22, 2000, denying the Motion for
Reconsideration.

Respondents were stockholders of the Felix Gochan and Sons Realty Corporation and the Mactan Realty
Development Corporation. Sometime in 1996, respondents offered to sell their shares in the two
corporations to the individual petitioners, the heirs of the late Ambassador Esteban Gochan, for and in
consideration of the sum of P200,000,000:00. Petitioners accepted and paid the said amount to
respondents. Accordingly, respondents issued to petitioners the necessary "Receipts." 3 In addition,
respondents executed their respective "Release, Waiver and Quitclaim," 4 wherein .they undertook that they
would not initiate any suit, action or complaint against petitioners for whatever reason or purpose.

In turn, respondents, through Crispo Gochan, Jr., required individual petitioners to execute a "promissory
note,"5undertaking not to divulge the actual consideration they paid for the shares of stock. For this purpose,
Crispo Gochan, Jr. drafted a document entitled "promissory note" in his own handwriting and had the same
signed by Felix Gochan, III, Louise Gochan and Esteban Gochan, Jr.

Unbeknown to petitioners, Crispo Gochan, Jr. inserted in the "promissory note" a phrase that says, "Said
amount is in partial consideration of the sale."6

On April 3, 1998, respondents filed a complaint against petitioners for specific performance and damages
with the Regional Trial Court of Cebu City, Branch 11, docketed as Civil Case No. CEB-21854. Respondents
alleged that sometime in November 1996, petitioner Louise Gochan, on behalf of all the petitioners, offered
to buy their shares of stock, consisting of 254 shares in the Felix Gochan and Sons Realty Corporation and
1,624 shares of stock in the Mactan Realty Development Corporation; and that they executed a Provisional
Memorandum of Agreement, wherein they enumerated the following as consideration for the sale:

1. Pesos: Two Hundred Million Pesos (P200M)

2. Two (2) hectares more or less of the fishpond in Gochan Compound, Mabolo, Lot 4F-2-B

3. Lot 2, Block 9 with an area of 999 square meters in Gochan Compound, Mabolo, Cebu
 4. Three Thousand (3,000) square meters of Villas Magallanes in Mactan, Cebu

5. Lot 423 New Gem Building with an area of 605 square meters. 7

Accordingly, respondents claimed that they are entitled to the conveyance of the aforementioned properties,
in addition to the amount of P200,000,000.00, which they acknowledge to have received from petitioners.
Further, respondents prayed for moral damages of P15,000,000.00, exemplary damages of P2,000,000.00,
attorney's fees of P14,000,000.00, and litigation expenses of P2,000,000.00.

Petitioners filed their answer, raising the following affirmative defenses: (a) lack of jurisdiction by the trial
court for non-payment of the correct docket fees; (b) unenforceability of the obligation to convey real
properties due to lack of a written memorandum thereof, pursuant to the Statute of Frauds; (c)
extinguishment of the obligation by payment; (d) waiver, abandonment and renunciation by respondent of all
their claims against petitioners; and (e) non-joinder of indispensable parties.

On August 7, 1998, petitioners filed with the trial court a motion for a preliminary hearing on the affirmative
defenses. In an Order dated August 11, 1998, the trial court denied the motion, ruling as follows:

As the grant of said motion lies in the discretion of the court under Section 6 of Rule 16 of the 1997
Rules of Civil Procedure, this Court in the exercise of its discretion, hereby denies the said motion
because the matters sought to be preliminarily heard do not appear to be tenable. For one, the
statute of frauds does not apply in this case because the contract which is the subject matter of this
case is already an executed contract. The statute of frauds applies only to executory contracts.
According to Dr. Arturo M. Tolentino, a leading authority in civil law, since the statute of frauds was
enacted for the purpose of preventing frauds, it should not be made the instrument to further them.
Thus, where one party has performed his obligation under a contract, equity would agree that all
evidence should be admitted to prove the alleged agreement (PNB vs. Philippine Vegetable Oil
Company, 49 Phil. 897). For another, the contention of the defendants that the claims of the plaintiffs
are already extinguished by full payment thereof does not appear to be indubitable because the
plaintiffs denied under oath the due execution and genuineness of the receipts which are attached
as Annexes 1-A, 1-B and 1-C of defendants' answer. This issue therefore has to be determined on
the basis of preponderance of evidence to be adduced by both parties. Then, still for another, the
contention that the complaint is defective because it allegedly has failed to implead indispensable
parties appears to be wanting in merit because the parties to the memorandum of agreement
adverted to in the complaint are all parties in this case. Then the matter of payment of docketing and
filing fees is not a fatal issue in this case because the record shows that the plaintiffs had paid at
least P165,000.00 plus in the form of filing and docketing fees. Finally, regarding exerting earnest
efforts toward a compromise by the plaintiffs, the defendants cannot say that there is an absence of
an allegation to this effect in the complaint because paragraph 11 of the complaint precisely states
that "before filing this case, earnest efforts toward a compromise have been made."

Petitioners' motion for reconsideration of the above Order was denied by the trial court on September 11,
1998.

Petitioners thus filed a petition for certiorari with the Court of Appeals, docketed as CA-G.R. SP No. 49084.
On September 10, 1999, the Court of Appeals rendered the appealed decision dismissing the petition on the
ground that respondent court did not commit grave abuse of discretion, tantamount to lack or in excess of
jurisdiction in denying the motion to hear the affirmative defenses.8

Again, petitioners filed a motion for reconsideration, but the same was denied by the Court of Appeals in its
assailed Resolution of November 22, 2000.9

Petitioners, thus, filed the instant petition for review anchored on the following grounds:

I.

THE COURT OF APPEALS COMMITTED GRAVE AND PALPABLE ERROR IN FINDING THAT THE
CORRECT DOCKET FEES HAVE BEEN PAID.

II.

THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN RULING THAT THE PMOA WAS A
PARTIALLY EXECUTED CONTRACT AND HENCE NOT COVERED BY THE STATUTE OF
FRAUDS.

III.
 THE COURT OF APPEALS COMMITTED GRAVE ERROR IN DECIDING THAT THE CLAIMS OF
PRIVATE RESPONDENTS HAVE NOT BEEN EXTINGUISHED BY PAYMENT OR FULL
SETTLEMENT DESPITE THE PRESENCE OF RECEIPTS SIGNED BY THE PRIVATE
RESPONDENTS SHOWING THE CONTRARY.

IV.

THE COURT OF APPEALS COMMITTED GRAVE ERROR IN RESOLVING THAT FELIX GOCHAN
III AND ESTEBAN GOCHAN, JR. ARE NOT INDISPENSABLE PARTIES AND THEREFORE NEED
NOT BE IMPLEADED AS PARTIES.10

Respondents filed their Comment,11 arguing, in fine, that petitioners are guilty of forum-shopping when they
filed two petitions for certiorari with the Court of Appeals; and that the Court of Appeals did not err in
dismissing the petition for certiorari.

The instant petition has merit.

The rule is well-settled that the court acquires jurisdiction over any case only upon the payment of the
prescribed docket fees. In the case of Sun Insurance Office, Ltd. (SIOL) v. Asuncion,12 this Court held that it
is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed
docket fee that vests a trial court with jurisdiction over the subject matter or nature of the action.

Respondents maintain that they paid the correct docket fees in the amount of P165,000.00 when they filed
the complaint with the trial court. Petitioners, on the other hand, contend that the complaint is in the nature of
a real action which affects title to real properties; hence, respondents should have alleged therein the value
of the real properties which shall be the basis for the assessment of the correct docket fees.

The Court of Appeals found that the complaint was one for specific performance and incapable of pecuniary
estimation. We do not agree.

It is necessary to determine the true nature of the complaint in order to resolve the issue of whether or not
respondents paid the correct amount of docket fees therefor. In this jurisdiction, the dictum adhered to is that
the nature of an action is determined by the allegations in the body of the pleading or complaint itself, rather
than by its title or heading.13 The caption of the complaint below was denominated as one for "specific
performance and damages." The relief sought, however, is the conveyance or transfer of real property, or
ultimately, the execution of deeds of conveyance in their favor of the real properties enumerated in the
provisional memorandum of agreement. Under these circumstances, the case below was actually a real
action, affecting as it does title to or possession of real property.

In the case of Hernandez v. Rural Bank of Lucena,14 this Court held that a real action is one where the
plaintiff seeks the recovery of real property or, as indicated in section 2(a) of Rule 4 (now Section 1, Rule 4
of the 1997 Rules of Civil Procedure), a real action is an action affecting title to or recovery of possession of
real property.

It has also been held that where a complaint is entitled as one for specific performance but nonetheless
prays for the issuance of a deed of sale for a parcel of land, its primary objective and nature is one to
recover the parcel of land itself and, thus, is deemed a real action. In such a case, the action must be filed in
the proper court where the property is located:

In this Court, the appellant insists that her action is one for specific performance, and, therefore,
personal and transitory in nature.

This very issue was considered and decided by this Court in the case of Manuel B. Ruiz vs. J.M.
Tuason & Co., Inc. et al., L-18692, promulgated 31 January 1963. There the Court, by unanimous
vote of all the Justices, held as follows:

'This contention has no merit. Although appellant's complaint is entitled to be one for specific
performance, yet the fact that he asked that a deed of sale of a parcel of land situated in
Quezon City be issued in his favor and that a transfer certificate of title covering said parcel
of land be issued to him shows that the primary objective and nature of the action is to
recover the parcel of land itself because to execute in favor of appellant the conveyance
requested there is need to make a finding that he is the owner of the land which in the last
analysis resolves itself into an issue of ownership. Hence, the action must be commenced in
the province where the property is situated pursuant to Section 3, Rule 5, of the Rules of
Court, which provides that actions affecting title to or recovery of possession of real property
shall be commenced and tried in the province where the property or any part thereof lies." 15
In the case at bar, therefore, the complaint filed with the trial court was in the nature of a real action,
although ostensibly denominated as one for specific performance. Consequently, the basis for determining
the correct docket fees shall be the assessed value of the property, or the estimated value thereof as alleged
by the claimant. Rule 141, Section 7, of the Rules of Court, as amended by A.M. No. 00-2-01-SC, provides:

Section 7. Clerks of Regional Trial Courts. x x x

(b) xxx xxx xxx

In a real action, the assessed value of the property, or if there is none, the estimated value thereof
shall be alleged by the claimant and shall be the basis in computing the fees.

We are not unmindful of our pronouncement in the case of Sun Insurance,16 to the effect that in case the
filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow
payment of the fee within a reasonable time but in no case beyond the applicable prescriptive period.
However, the liberal interpretation of the rules relating to the payment of docket fees as applied in the case
of Sun Insurance cannot apply to the instant case as respondents have never demonstrated any willingness
to abide by the rules and to pay the correct docket fees. Instead, respondents have stubbornly insisted that
the case they filed was one for specific performance and damages and that they actually paid the correct
docket fees therefor at the time of the filing of the complaint. Thus, it was stated in the case of Sun
Insurance:17

The principle in Manchester could very well be applied in the present case. The pattern and the
intent to defraud the government of the docket fee due it is obvious not only in the filing of the
original complaint but also in the filing of the second amended complaint.

However, in Manchester, petitioner did not pay any additional docket fee until the case was decided
by this Court on May 7, 1987. Thus, in Manchester, due to the fraud committed on the government,
this Court held that the court a quo did not acquire jurisdiction over the case and that the amended
complaint could not have been admitted inasmuch as the original complaint was null and void.

In the present case, a more liberal interpretation of the rules is called for considering that,
unlike Manchester, private respondent demonstrated his willingness to abide by the rules by paying
the additional docket fees as required. The promulgation of the decision in Manchester must have
had that sobering influence on private respondent who thus paid the additional docket fee as
ordered by the respondent court. It triggered his change of stance by manifesting his willingness to
pay such additional docket fee as may be ordered.

Respondents accuse petitioners of forum-shopping when they filed two petitions before the Court of
Appeals. Petitioners, on the other hand, contend that there was no forum-shopping as there was no identity
of issues or identity of reliefs sought in the two petitions.

We agree with petitioners that they are not guilty of forum-shopping. The deplorable practice of forum-
shopping is resorted to by litigants who, for the purpose of obtaining the same relief, resort to two different
fora to increase his or her chances of obtaining a favorable judgment in either one. In the case of Golangco
v. Court of Appeals,18 we laid down the following test to determine whether there is forum-shopping:

Ultimately, what is truly important to consider in determining whether forum-shopping exists or not is
the vexation caused the courts and the parties-litigant by a person who asks different courts and/or
administrative agencies to rule on the same or related causes and/or grant the same or substantially
the same reliefs, in the process creating the possibility of conflicting decisions being rendered by the
different fora upon the same issues.

In sum, two different orders were questioned, two distinct causes of action and issues were raised,
and two objectives were sought; thus, forum shopping cannot be said to exist in the case at bar.

Likewise, we do not find that there is forum-shopping in the case at bar. The first petition, docketed as CA-
G.R. SP. No. 49084, which is now the subject of the instant petition, involved the propriety of the affirmative
defenses relied upon by petitioners in Civil Case No. CEB-21854. The second petition, docketed as CA-G.R.
SP No. 54985, raised the issue of whether or not public respondent Judge Dicdican was guilty of manifest
partiality warranting his inhibition from further hearing Civil Case No. CEB-21854.

More importantly, the two petitions did not seek the same relief from the Court of Appeals. In CA-G.R. SP.
No. 49084, petitioners prayed, among others, for the annulment of the orders of the trial court denying their
motion for preliminary hearing on the affirmative defenses in Civil Case No. CEB-21854. No such reliefs are
involved in the second petition, where petitioners merely prayed for the issuance of an order enjoining public
respondent Judge Dicdican from further trying the case and to assign a new judge in his stead.

True, the trial court has the discretion to conduct a preliminary hearing on affirmative defenses. In the case
at bar, however, the trial court committed a grave abuse of its discretion when it denied the motion for
preliminary hearing. As we have discussed above, some of these defenses, which petitioners invoked as
grounds for the dismissal of the action, appeared to be indubitable, contrary to the pronouncement of the
trial court. Indeed, the abuse of discretion it committed amounted to an evasion of positive duty or virtual
refusal to perform a duty enjoined by law, or to act at all in contemplation of law, 19 which would have
warranted the extraordinary writ of certiorari. Hence, the Court of Appeals erred when it dismissed the
petition for certiorari filed by petitioners.

WHEREFORE, in view of the foregoing, the instant petition is GRANTED. This case is REMANDED to the
Regional Trial Court of Cebu City, Branch 11, which is directed to forthwith conduct the preliminary hearing
on the affirmative defenses in Civil Case No. CEB-21854.

SO ORDERED.

Davide, Jr., C.J.;Kapunan, and Pardo, JJ., concur.

DISSENTING OPINION

DAVIDE, JR., C.J.:

I respectfully make of record my dissent to both drafts of the decision penned by Mme. Justice Consuelo Y.
Santiago.

I. The first draft

The first draft (1) sets aside the Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 49084
and the Orders of the Regional Trial Court of Cebu City, Branch 11, in Civil Case No. CEB-21854; and (2)
orders of the dismissal of said civil case.

I seriously doubt the propriety of this action, even if it is principally based on the non-payment of the
deficiency of the docket fee. Sun Life Insurance Office Ltd. v. Asuncion (170 SCRA 274 [1989]) is not the
final word on deficiency of docket fees. Tacay v. Regional Trial Court of Tagum, Davao del Norte, (180 SCRA
433, 443 [1989]) further liberalized the rule. Thus:

Two situations may arise. One is where the complaint or similar pleading sets out a claim purely for
money or damages and there is no precise statement of the amounts being claimed. In this event
the rule is that the pleading will 'not be accepted nor admitted, or shall otherwise be expunged from
the record.' In other words, the complaint or pleading may be dismissed, or the claims as to which
the amounts are unspecified may be expunged, although as aforestated the Court may, on motion,
permit amendment of the complaint and payment of the fees provided the claim has not in the
meantime become time-barred. The other is where the pleading does specify the amount of every
claim, but the fees paid are insufficient; and here again, the rule now is that the court may allow a
reasonable time for the payment of the prescribed fees, or the balance thereof, and upon such
payment, the defect is cured and the court may properly take cognizance of the action, unless in the
meantime prescription has set in and consequently barred the right of action.

Where the action involves real property and a related claim for damages as well, the legal fees shall
be assessed on the basis of both (a) the value of the property and (b) the total amount of related
damages sought. The Court acquires jurisdiction over the action if the filing of the initiatory pleading
is accompanied by the payment of the requisite fees, or, if the fees are not paid at the time of the
filing of the pleading, as of the time of full payment of the fees within such reasonable time as the
court may grant, unless, of course, prescription has set in in the meantime. But where as in the
case at bar the fees prescribed for an action involving real property have been paid, but the
amounts of certain of the related damages (actual, moral and nominal) being demanded are
unspecified, the action may not be dismissed. The Court undeniably has jurisdiction over the action
involving the real property, acquiring it upon the filing of the complaint or similar pleading and
payment of the prescribed fee. And it is not divested of that authority by the circumstance that it may
not have acquired jurisdiction over the accompanying claims for damages because of lack of
specification thereof. What should be done is simply to expunge those claims for damages as to
 which no amounts are stated, which is what the respondent Courts did, or allow, on motion, a
reasonable time far the amendment of the complaints so as to allege the precise amount of each
item of damages and accept payment of the requisite fees therefor within the relevant prescriptive
period.

Even if we would still cling to Sun Life, the rule therein laid down would still be applicable to this case,
contrary to the assertion in the ponencia in question. The evil contemplated in Manchester case which
prompted the pronouncement therein does not exist in the instant case.

Verily, there is good faith on the part of the private respondents in insisting on what their cause of action is.
Even the Court of Appeals sustained their position in this issue.

Therefor, private respondents should only be required to pay the deficiency in docket fees.

II. The second draft

The second draft ponencia declares the trial court and the Court of Appeals as having acted with grave
abuse of discretion in denying the motion for a preliminary hearing on the affirmative defenses. The order of
the trial court denying the motion is an interlocutory order. There can be no appeal from such order of denial.
A special civil action of certiorari under Rule 65 of the Rules of Court may be resorted to, but there must be a
clear showing that the court had acted without or in excess of jurisdiction or with grave abuse of discretion
amounting to lack of or in excess of abuse of discretion means arbitrary and jurisdiction. Grave despotic
action.

I submit that the trial court did not commit any grave abuse of discretion in denying the motion for a
preliminary hearing on the affirmative defenses on the ground that such defenses do not appear to be
indubitable. The ponencia itself admits that only some of the defenses appeared indubitable. The last
paragraph of page 10 of the latest draft of the ponencia reads:

True, the trial court has the discretion to conduct a preliminary hearing on affirmative defenses. In
the case at bar, however, the trial court committed a grave abuse of its discretion when it denied the
motion for preliminary hearing. As we have discussed above, some of these defenses, which
petitioners invoked as grounds for the dismissal of the action, appeared to be indubitable, contrary to
the pronouncement of the trial court. Indeed, the abuse of discretion it committed amounted to an
evasion of positive duty or virtual refusal to perform a duty enjoined by law, or to act at all in
contemplation of law, which would have warranted the extraordinary writ of certiorari. Hence, the
Court of Appeals erred when it dismissed the petition for certiorari filed by petitioners. (Underscoring
supplied for supplied)

Accordingly, since the orders of the trial court are not tainted with grave abuse of discretion, the Court of
Appeals committed no error in dismissing the petition for certiorari against said orders.

I then vote to deny due course to the petition.

 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-23887 December 26, 1967

AGO TIMBER CORPORATION, petitioner,

vs.
HON. JESUS S. RUIZ, Court of First Instance of Agusan, EXCELLENT MANAGEMENT
CORPORATION, SHERIFF OF AGUSAN and SHERIFF OF MANILA, respondents.

E. M. Fernando, Sunico and Associates for respondents.

F. Udarbe for petitioner

REYES, J.B.L., J.:

Petition styled as one for injunction with preliminary injunction.

The petitioner Ago Timber Corporation and the respondent Excellent Management Corporation entered into
a contract on 1 August 1963 for the latter to manage the logging operations of the former as set forth in their
Memorandum Agreement (Annex "A"); and on the following day the former executed in favor of the latter a
contract of management and general power of attorney constituting the latter as the former's general
manager in the said industry and providing that the contract is irrevocable for 5 years and is one coupled
with a valuable consideration (Annex "B").

On 30 September 1963, however, the petitioner Ago Timber Corporation informed the respondent Excellent
Management Corporation that for its failure to perform its part of, the contract, the petitioner Ago Timber was
taking over the management of its logging operations.

One year thereafter, or on 28 October 1964, the petitioner filed in the Court of First Instance of Manila an
action for rescission of the aforesaid contract and revocation of the general power of attorney, with damages
The case was docketed as Civil Case No. 58827. Summons was served on the defendant Excellent
Management Corporation on 3 November 1964.

On a date which is in dispute (and discussed later), the respondent filed action in the Court of First Instance
of Agusan against the petitioner Ago Timber Corporation and Pastor Ago, for injunction with preliminary
injunction, attachment and garnishment, and for damages, praying for the enforcement of the same contract
that the petitioner was seeking to rescind in the Court of First Instance of Manila. The case filed in Agusan
was docketed therein as Special Civil Case No. 182. On 6 November 1964, the Agusan Court, thru Butuan
City judge Jesus S. Ruiz, for and in the absence of the District Judge, issued ex parte a writ of preliminary
injunction and another writ of attachment and garnishment.

The writ of preliminary injunction restrains and prohibits the respondents (herein petitioner Ago Timber
Corporation and Pastor Ago) from
 . . . disturbing, molesting, harassing or interfering with petitioner's possession of the area described
in paragraph 4 of the petition in the above- entitled case; restraining and prohibiting the respondents,
. . . from threatening, coercing or intimidating the employees, officials and representatives of
petitioners; restraining and prohibiting respondents . . . from putting and hauling logs from the area
described in paragraph 4 of the petition, without previous authority, consent or permission of
petitioner . . .; restraining and prohibiting respondent corporation from selling or exporting its logs or
transferring the letter of credit in the name of another person without the knowledge and consent of
petitioner, commanding and ordering the respondents to comply and respect the terms, conditions
and stipulations in the document Annexes A and B of said petition; ordering the Philippine
Constabulary officers of Agusan and Butuan City to enforce whatever writs of injunction or
attachment this Court may issue in this case against the respondents, with area is situated at Los
Arcos, Prosperidad, Agusan and likewise you are also directed to serve copy each of the order of the
Court. . . .

The petitioner moved to dismiss Special Civil Case 182 and to dissolve the writs issued thereunder on the
ground of pendency of another writ between the same parties, 1 but since action thereon was not
forthcoming, the petitioner resorted to this Court.
lawphil.net

This Court, by resolution on 7 December 1964, issued a writ of preliminary injunction against the
enforcement of the writs issued by the Agusan court, restraining the respondents from entering into, and
taking possession of the petitioner's logging area, from seizing or taking the management of the logging
operation, from cutting and hauling logs in the area and from preventing or stopping the sale, exportation, or
shipment of logs by petitioner.

The petitioner alleges that the order of the respondent judge in Special Civil Case No. 182 of Agusan,
issuing its writ of preliminary injunction, is null and void because the filing of the petition by Excellent
Management Corporation, as well as the injunction bond, were antedated to make it appear that the petition
was filed ahead of Civil Case 58827 of the Court of First Instance of Manila, done through the connivance of
the respondent judge and court personnel in Agusan, aside from the fact that the preliminary injunction was
granted without notice or hearing.

On this point, we observe that on the upper right-hand corner of the first page of the petition in Special Civil
Case 182, Court of First Instance of Agusan, a rubber receiving stamp mark of the court was impressed,
bearing "Nov. 19" as its date of receipt; but on this supposed date of receipt was superimposed the
handwritten, date "Oct 24 64". (Annex N-1 p. 168, Rec.). 2 The order of the court granting the preliminary
injunction was dated 6 November 1964 (Annex "1") but the bond was dated one day before, on 5 November
1964 (Annex "6", Rec. p. 56). The official receipt evidencing Payment of the filing fee was dated 6 November
1964 (Annex "D", Rec. p. 34). Godofredo G. Enriquez, deputy clerk of court, and Orlando Polon, one of the
lawphil.net

clerks in the office of the clerk of court, justified the foregoing discrepancies with the explanation that they
received the petition and immediately entered it on the docket book on 24 October 1964; that Atty.
Tranquilino Calo, Jr., counsel for the petitioner therein, did not have sufficient cash to pay the filing fee but
left the petition and promised to return; that he returned and paid the filing fee on 6 November 1964.
(Annexes 1-3 on pages 93-95 of the Record). For his part, Judge Ruiz, in an affidavit, denied his alleged
connivance but stated that he ordered the issuance of the writs "after reading the contents of the petition . . .
and was convinced that there was an urgent need for the immediate granting of the relief prayed for . . ."
(Annex "7", p. 99, Rollo). Respondent judge offered, however, no explanation why the bond was prepared
earlier than his granting the writs.

We perceive that, whether by design or plain imprudence an irregularity involving the integrity of a court
record has been committed. Be that as it may, the date that should be reckoned as the filing of the petition in
Special Civil Case 182 of the Agusan Court is when the filing fee was paid, 6 November 1964, and not when
the petition was received on 24 October 1964. (See Sec. 1, Rule 13 and See. 1, Rule 141, Rules of Court) lawphil.net

Since the case in Manila was filed earlier than the case in Agusan and the parties, in their respective
motions to dismiss had pleaded pendency of another action between the same parties for the same cause,
allegations that they are now estopped from denying or varying, it was incumbent upon the Agusan court to
grant the petitioner's motion to dismiss Special Civil Case No. 182, not only as a matter of comity with a
coordinate and co-equal court (Laureta & Nolledo, Commentaries & Jurisprudence on Injunction p. 79, citing
Harrison v. Littlefield, 57 Tex. Div. A. 617, 619, 124 SW 212) but also to prevent confusion that might
seriously hinder the administration of justice. (Cabigao, et al. vs. Del Rosario, et al., 44 Phil. 182)

The respondents, as defendants in Civil Case 58827 (Manila) received the summons on 3 November 1964,
yet, they filed their petition in Special Civil Case 182 in Agusan only on 6 November 1964. It is, therefore,
plain that they resorted to the Agusan court with unclean hands and wangled therefrom, under dubious
circumstances, an ex parte preliminary injunction.

The petition in this Court although captioned as for injunction with preliminary injunction 3 is, in substance,
one for certiorari and should be considered as such. While it is true that the respondent court of Agusan had
jurisdiction in Special Civil Case 182, the acts complained of by the petitioner constitute grave abuse of
discretion and injudiciousness on the part of the respondent court, combined with trickery on the part of the
private respondent.

For the foregoing reasons, the writ of certiorari is hereby granted, and the writs of preliminary injunction and
attachment and garnishment issued by the respondent court are hereby set aside and declared null and
void. The respondent Court of First Instance of Agusan is hereby directed to dismiss its Special Civil Case
lawphil.net

No. 182. The preliminary injunction heretofore issued by this Court is hereby made permanent. Costs
against the respondent Excellent Management Corporation.

Let a copy of this decision be furnished to the Honorable Secretary of Justice for his information and for
whatever action may be proper on the alteration of court records herein described. So ordered.

Concepcion, C.J., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez Castro and Angeles, JJ., concur.

Fernando, J., took no part.

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-53564 February 27, 1987

JUAN BAYANG, petitioner,

vs.
HON. COURT OF APPEALS and BENIGNO BIONG, respondents.

Rodrigo Matutina for petitioner.

Luceniano E. Lancin for private respondent.

CRUZ, J.:

Sometime in November 1969, Juan Bayang filed a complaint for quieting of title with damages against
Benigno Biong in the Court of First Instance of Surigao del Norte, Branch 1, docketed as Civil Case No.
1892. 1 In 1970, while the case was pending, Biong succeeded in dispossessing the plaintiff of the land in
question and remained there until January 25, 1978. 2 On February 21, 1972, the case was decided in favor of
Biong, but the Court of Appeals on December 8, 1977, reversed the trial court, declaring in the dispositive portion
of its decision:

WHEREFORE, the judgment appealed from is reversed and appellants are hereby declared
owner of the property in litigation, and defendant-appellee are (sic) hereby ordered to pay
appellant the sum of P56.40 as the latter's share in the proceeds from the sale of the copra
 derived from the third harvest of coconuts from the same land, and P1,000.00 as attorney's
fees, and costs of Litigation. 3

This decision became final on February 2, 1978.

On February 6, 1978, Bayang filed a second case, docketed as Civil Case No. 2589, with the CFI of Surigao
del Norte, Branch II, seeking to recover from Biong the incomes earned from the same land from 1970 up to
the quarterly incomes from 1978 until the said land was delivered to the plaintiff. 4 At the pre-trial conference
held on July 10, 1978, the counsel for Bayang admitted that as of January 25, 1978, Biong had already
surrendered possession of the land in question to Bayang. 5 On August 16, 1978, Biong filed a motion for
summary judgment, reiterating the affirmative defense of res judicata raised in his answer dated April 12, 1978,
insofar as it related to the incidents concerning the case prior to January 25, 1978. 6 An opposition to this motion
was duly filed by Bayang. 7

The trial court, after considering the arguments of the parties, granted the motion and rendered a summary
judgment on October 30, 1978. 8 The said decision was sustained by the Court of Appeals, and Bayang is now
before us in this petition for review by certiorari under Rule 45 of the Rules of Court.

His assignment of errors raises two basic submissions, to wit:

1. Civil Case No. 2589 should not have been decided by summary judgment.

2. The judgment in CA-G.R. No. 54720-R (appeal from judgment in Civil Case No. 1892) did not
constitute res judicata as to bar Civil Case No. 2589.

Both contentions are incorrect. We rule for the respondents.

In its decision, the Court of Appeals quoted the following excerpt from Singleton v. Philippine Trust Co. 9 on
the nature and functions of the summary judgment:

Summary judgment is one of the methods sanctioned in the present Rules of Court for a
prompt disposition of civil actions wherein there exists no serious controversy. The procedure
may be availed of not only by claimants, but also by defending parties who may be the object
of unfounded claims. A motion for summary judgment assumes that scrutinizing of the facts
will disclose that the issues presented by the pleadings need not be tried because they are
so patently unsubstantial as not to be genuine issues, or that there is no genuine issue as to
any material facts or where the facts appear undisputed and certain from the pleadings,
depositions, admissions and affidavits.

We hold that there was no genuine or triable issue of fact raised by the parties, in view particularly of the
affirmative defense of res judicata invoked by the private respondent. That defense is sustained.

A long line of decisions has consistently held that for res judicata to apply: a) the former judgment must be
final; b) it must have been rendered by a court having jurisdiction over the subject matter and the parties; c)
it must be a judgment on the merits; and d) there must be between the first case and the second case
identity of parties, identity of subject matter and Identity of cause of action. 10

The decision in Civil Case No. 1892 became final and executory on February 2, 1978. There is no dispute
that the trial court which rendered that decision had jurisdiction over the subject-matter and the parties to the
proceeding. The case was tried on the merits. The parties to Civil Case No. 1892 and the subsequent Civil
Case No. 2589 are the same petitioner and private respondent now before us.

The petitioner would draw a distinction between the land in dispute in Civil Case No. 1892 and the income
from that land being claimed in Civil Case No. 2589. But that is in our view splitting hairs to split a cause of
action. The subject-matter is essentially the same in both cases as the income is only a consequence or
accessory of the disputed property. We cannot agree that there are involved here two causes of action
calling for two separate cases. The claim for the income from the land was incidental to, and should have
been raised by Bayang in his earlier claim for, ownership of the land.
We note that while the first case was pending, the private respondent, by the petitioner's own account,
"succeeded in dispossessing" him of the disputed land 11 and that at the pretrial conference on Civil Case No.
2589, Bayang's counsel admitted that Biong had vacated the said property as of January 25, 1978. 12 This means
that from 1970 to the date the respondent surrendered the property in 1978, Biong was presumably collecting and
enjoying the income therefrom to the exclusion of the petitioner.

Civil Case No. 1892 was commenced in November 1969 and was finally decided only on February 2, 1978.
The private respondent entered the disputed property in 1970 and left it only in 1978. For about seven years,
therefore, the petitioner made no move at all to amend his complaint to include a claim for the income
supposedly received by the private respondent during that period.

Under Rule 10, Section 6, of the Rules of Court.

Sec. 6. Matters subject of supplemental pleadings. Upon motion of a party the court may,
upon reasonable notice and upon such terms as are just, permit him to serve a supplemental
pleading setting forth transactions, occurrence or events which have happened since the
date of the pleading sought to be supplemented. If the court deems it advisable that the
adverse party should plead thereto, it shall so order, specifying the time therefor.

In the case of Jalandoni v. Martin-Guanzon, 13 this Court declared through Justice J.B.L. Reyes:

As to the value of the plaintiff's share in the products of the land during the time that the
former action was pending (which are the damages claimed under the second cause of
action), their recovery is now barred by the previous judgment. These damages are but the
result of the original cause of action, viz., the continuing refusal by defendants in 1941 to
recognize the plaintiff's right to an interest in the property. In the same way that plaintiffs
claimed for their share of the produce from 1941 to 1947, these later damages could have
been claimed in the first action, either in the original camplaint (for their existence could be
anticipated when the first complaint was filed) or else by supplemental pleading. To allow
them to be recovered by subsequent suit would be a violation of the rule against multiplicity
of suits, and specifically of sections 3 and 4 of Rules 2 of the Rules of Court, against the
splitting of causes of action, since these damages spring from the same cause of action that
was pleading (sic) in the former case No. 573 between the same parties (Blossom & Co.,
Inc. v. Manila Gas Corporation, 55 Phil. 226; Santos v. Moir, 36 Phil. 350; Pascua v. Sideco
24 Phil. 26; Bachrach Motor Co. v. Icarangal 68 Phil. 287).

And in another case, 14 the same jurist declared:

Urtula, as defendant in the expropriation case, could have raised the matter of interest
before the trial court even if there had been no actual taking yet by the Republic and the said
court could have included the payment of interest in its judgment but conditioned upon the
actual taking, because the rate of interest upon the amount of just compensation (6%) is a
known factor, and it can reasonably be expected that at some future time, the expropriator
would take possession of the property, though the date be not fixed. In this way, multiple
suits would be avoided. Moreover, nothing prevented appellee from calling the attention of
the appellate courts (even by motion to reconsider before judgment became final) to the
subsequent taking of possession by the condemnor, and asking for allowance of interest on
the indemnity since that followed the taking as a matter of course, and raised no issue
requiring remand of the records to the Court of origin.

As the issue of interest could have been raised in the former case but was not raised, res
judicata blocks the recovery of interest in the present case. (Tejedor vs. Palet, 61 Phil. 494;
Phil. Engineering Corp., et al. vs. Ceniza, etc., et al., L-17834, 29 Sept. 1962). It is settled
that a former judgment constitutes a bar, as between the parties, not only as to matters
expressly adjudged, but all matters that could have been adjudged at the time (Rule 39, sec.
49; Corda vs. Maglinti L-17476, November 30, 1961; Rodriguez vs. Tan, 48 Off. Gaz. 3330).
Clearly, then, Civil Case No. 2589 is barred by the previous judgment in Civil Case No. 1892. This being so,
it should follow that the trial judge committed no grave abuse of discretion in deciding the latter case by
summary judgment.

We are not unmindful of the argument that affirmance of the challenged decision of the respondent court will
result in the unjust enrichment of Biong at the expense of Bayang. This assumes, of course, that the
petitioner could have proved his right to the income he now claims belatedly. The point is that he did not
make the proper claim at the proper time and in the proper proceedings, and he cannot do it now. Whatever
right he might have had is now deemed waived because of his neglect.

Nemo debet bis vexare pro una et eadem causa. This has to be so if litigants are to be spared the
annoyance, anxiety and expense that could otherwise be inflicted upon them endlessly by capricious,
malicious or vindictive suitors.

WHEREFORE, the petition is dismiss and the appealed decision is affirmed. Costs against the petitioner.

SO ORDERED.

Yap (Chairman), Narvasa, Melencio-Herrera, Feliciano, Gancayco and Sarmiento JJ., concur.