1.

La Naval Drug Corporation vs Court of Appeals

G.R. No. 103200, August 31, 1994

FACTS:

In 1989, a conflict between La Naval Drug Corporation and a certain Wilson Yao arose
regarding a lease contract. Yao invoked a provision in the lease contract whereby pursuant to
R.A. 876 (Arbitration Law), they should refer the matter to arbitration. Hence, the parties agreed
to refer the issue to three arbitrators however, certain complications arose when they were
choosing a third arbitrator. This prompted Yao to go to court to demand the arbitrators to
proceed with the arbitration. Yao went to the regional trial court (Angeles City) and the case was
filed as a summary proceeding case under R.A. 876. Yao also prayed for an award for damages
in his favor.

In its answer, La Naval asserted that the case should be dismissed as it was filed prematurely;
La Naval questioned Yaos claim for damages as it averred that the same should be litigated
independently and not in the same summary proceeding case. However, La Naval also posed a
counterclaim.

The RTC resolved the matter regarding the arbitrators (it appointed a third arbitrator). The RTC
also ruled that La Naval is estopped from questioning Yaos claim for damages for being out of
jurisdiction as La Naval itself filed a counterclaim for damages.

ISSUE:

Whether or not the RTC has jurisdiction over the claims for damages between parties.

RULING:

No. R.A. 876 is clear that summary proceedings under said law shall only involve the matter of
arbitration. The parties claims for damages must be litigated in another civil case.

The Supreme Court went on to discuss that where the court clearly has no jurisdiction over the
subject matter, in this case the claim and counterclaim for damages, the court must dismiss the
case (in this case, the claim and counterclaim for damages). Lack of jurisdiction over the subject
matter as a defense may be raised at any time. Failure to raise such defense shall not estop the
defendant from raising such defense (as opposed to the defense of lack of jurisdiction over the
person which is deemed waived if the defendant voluntarily appeared if defendant voluntarily
appeared, then he is estopped from raising that defense).

2. ATWEL V. CONCEPCION PROGRESSIVE ASSOCIATION (G.R. NO. 169370)

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Facts:

Emiliano Melgazo founded and organized Concepcion Progressive Association (CPA) and in its
behalf bought a parcel of land to be converted to a wet market, to generate income which were
mostly rentals paid to CPA. When he died, his son petitioner Manuel Melgazo succeeded him as
President and other petitioners as officers and they started to process the registering of CPA as
a stock corporation. Meanwhile, the other elected officers and members formed their own group
and registered themselves in SEC as officers and members of respondent CPAI. The petitioners
were not listed either as members or officers and respondent CPAI objected when they made
collection of the rental payments. CPAI filed a case in SEC for mandatory injunction but with the
passage of RA 8799, was transferred to a special commercial court. Petitioners contend that
since they were not CPAI members the case did not involve intra-corporate dispute to warrant
the jurisdiction of the commercial court.

Issue:

Whether or not there is intra-corporate dispute to warrant the jurisdiction of the special
commercial court.

Ruling:

NO.To determine whether a case involves an intra-corporate controversy to be heard and

decided by the RTC, two elements must concur:

(1) the status or relationship of the parties and

(2) the nature of the question that is subject of their controversy.

The first element requires that the controversy must arise out of intra-corporate or partnership
relations: (a) between any or all of the parties and the corporation, partnership or association of
which they are stockholders, members or associates; (b) between any or all of them and the
corporation, partnership or association of which they are stockholders, members or associates
and (c) between such corporation, partnership or association and the State insofar as it
concerns their individual franchises. On the other hand, the second element requires that the
dispute among the parties be intrinsically connected with the regulation of the corporation. If the
nature of the controversy involves matters that are purely civil in character, necessarily, the case
does not involve an intra-corporate controversy.

In the case at bar, these elements are not present. The records reveal that petitioners were
never officers nor members of CPAI. CPAI itself admitted this in its pleadings. In fact, petitioners
were the only remaining members of CPA which, obviously, was not the CPAI that was
registered in the SEC.

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Moreover, the issue in this case does not concern the regulation of CPAI (or even CPA). The
determination as to who is the true owner of the disputed property entitled to the income
generated therefrom is civil in nature and should be threshed out in a regular court. Cases of
this nature are cognizable by the RTC under BP 129. Therefore, the conflict among the parties
here was outside the jurisdiction of the special commercial court.

3. Figueroa vs. People GR 147406, July 14, 2008

FACTS:

Petitioner was charged with the crime of reckless imprudence resulting in homicide. The RTC
found him guilty. In his appeal before the CA, the petitioner, for the first time, questioned RTCs
jurisdiction on the case.

The CA in affirming the decision of the RTC, ruled that the principle of estoppel by laches has
already precluded the petitioner from questioning the jurisdiction of the RTCthe trial went on
for 4 years with the petitioner actively participating therein and without him ever raising the
jurisdictional infirmity.

The petitioner, for his part, counters that the lack of jurisdiction of a court over the subject matter
may be raised at any time even for the first time on appeal. As undue delay is further absent
herein, the principle of laches will not be applicable.

ISSUE:

Whether or not petitioners failure to raise the issue of jurisdiction during the trial of this case,
constitute laches in relation to the doctrine laid down in Tijam v. Sibonghanoy, notwithstanding
the fact that said issue was immediately raised in petitioners appeal to the CA

HELD:

No. Citing the ruling in Calimlim vs. Ramirez, the Court held that as a general rule, the issue of
jurisdiction may be raised at any stage of the proceedings, even on appeal, and is not lost by
waiver or by estoppel.

Estoppel by laches may be invoked to bar the issue of lack of jurisdiction only in cases
in which the factual milieu is analogous to that of Tijam v. Sibonghanoy.

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Laches should be clearly present for the Sibonghanoy doctrine to be applicable, that is,
lack of jurisdiction must have been raised so belatedly as to warrant the presumption that the
party entitled to assert it had abandoned or declined to assert it.

In Sibonghanoy, the party invoking lack of jurisdiction did so only after fifteen years and at a
stage when the proceedings had already been elevated to the CA. Sibonghanoy is an
exceptional case because of the presence of laches.

In the case at bar, the factual settings attendant in Sibonghanoy are not present. Petitioner Atty.
Regalado, after the receipt of the Court of Appeals resolution finding her guilty of contempt,
promptly filed a Motion for Reconsideration assailing the said courts jurisdiction based on
procedural infirmity in initiating the action. Her compliance with the appellate courts directive to
show cause why she should not be cited for contempt and filing a single piece of pleading to
that effect could not be considered as an active participation in the judicial proceedings so as to
take the case within the milieu of Sibonghanoy. Rather, it is the natural fear to disobey the
mandate of the court that could lead to dire consequences that impelled her to comply.

The petitioner is in no way estopped by laches in assailing the jurisdiction of the RTC,
considering that he raised the lack thereof in his appeal before the appellate court. At that time,
no considerable period had yet elapsed for laches to attach.

4. SAMAR II ELECTRIC COOPERATIVE, INC. vs. ANANIAS D. SELUDO, JR.

G.R. No. 173840, April 25, 2012

FACTS:

Private respondent, Ananias D. Seludo, Jr., a member of the Board of Directors (BOD) of the
petitioner Samar II Electric Cooperative, Inc. (SAMELCO II), an electric cooperative providing
electric service to all members-consumers in all municipalities within the Second Congressional
District of the Province of Samar filed an Urgent Petition in the Regional Trial Court (RTC) in
Calbiga, Samar for prohibition against petitioner SAMELCO II for passing the Resolution No. 5
[Series] of 2005 which disallowed him to attend succeeding meetings of the BOD effective
February 2005 until the end of his term as director. The same resolution also disqualified him for
one (1) term to run as a candidate for director in the upcoming district elections. In his petition,
private respondent prayed for the nullification of Resolution No. 5, [Series] of 2005, contending
that it was issued without any legal and factual bases. In their answer to the petition for
prohibition, individual petitioners raised the affirmative defense of lack of jurisdiction of the RTC
over the subject matter of the case. Individual petitioners assert that, since the matter involved
an electric cooperative, SAMELCO II, primary jurisdiction is vested on the National
Electrification Administration (NEA).

ISSUE:

Whether or not the NEA was granted the power to hear and decide cases involving the validity
of board resolutions and whether or not NEA has primary jurisdiction over the question of the
validity of the Board Resolution issued by SAMELCO II.

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HELD:

Yes. Citing the provisions of P.D. Nos. 269 and 1645, the NEA is empowered to determine the
validity of resolutions passed by electric cooperatives. Section 10, Chapter II of P.D. No. 269, as
amended by Section 5 of P.D. No. 1645, provides that the NEA is empowered to issue orders,
rules and regulations and motu proprio or upon petition of third parties, to conduct
investigations, referenda and other similar actions in all matters affecting said electric
cooperatives and other borrower, or supervised or controlled entities.

A clear proof of such expanded powers is that, unlike P.D. No. 269, P.D. No. 1645 expressly
provides for the authority of the NEA to exercise supervision and control over electric
cooperatives. In administrative law, supervision means overseeing or the power or authority of
an officer to see that subordinate officers perform their duties. If the latter fail or neglect to fulfill
them, the former may take such action or step as prescribed by law to make them perform their
duties. Control, on the other hand, means the power of an officer to alter or modify or nullify or
set aside what a subordinate officer had done in the performance of his duties and to substitute
the judgment of the former for that of the latter. Section 38 (1), Chapter 7, Book 4 of Executive
Order No. 292, otherwise known as the Administrative Code of 1987 provides, thus:

Supervision and control shall include the authority to act directly whenever a specific function is
entrusted by law or regulation to a subordinate; direct the performance of duty; restrain the
commission of acts; review, approve, reverse or modify acts and decisions of
subordinate officials or units; determine priorities in the execution of plans and programs; and
prescribe standards, guidelines, plans and programs.

The NEA has primary jurisdiction over the question of the validity of the Board Resolution issued
by SAMELCO II. A careful reading of the provisions of P.D. No. 1645 clearly show that, pursuant
to its power of supervision and control, the NEA is granted the authority to conduct
investigations and other similar actions as well as to issue orders, rules and regulations with
respect to all matters affecting electric cooperatives. Certainly, the matter as to the validity of the
resolution issued by the Board of Directors of SAMELCO II, which practically removed
respondent from his position as a member of the Board of Directors and further disqualified him
to run as such in the ensuing election, is a matter which affects the said electric cooperative
and, thus, comes within the ambit of the powers of the NEA as expressed in Sections 5 and 7 of
P.D. No. 1645. Based on the foregoing discussions, the necessary conclusion that can be
arrived at is that, while the RTC has jurisdiction over the petition for prohibition filed by
respondent, the NEA, in the exercise of its power of supervision and control, has primary
jurisdiction to determine the issue of the validity of the subject resolution.

It may not be amiss to reiterate the prevailing rule that the doctrine of primary jurisdiction applies
where a claim is originally cognizable in the courts and comes into play whenever enforcement
of the claim requires the resolution of issues which, under a regulatory scheme, has been
placed within the special competence of an administrative agency. In such a case, the court in
which the claim is sought to be enforced may suspend the judicial process pending referral of
such issues to the administrative body for its view or, if the parties would not be unfairly
disadvantaged, dismiss the case without prejudice.
Corollary to the doctrine of primary jurisdiction is the principle of exhaustion of administrative
remedies. The Court, in a long line of cases, has held that before a party is allowed to seek the
intervention of the courts, it is a pre-condition that he avail himself of all administrative
processes afforded him. Hence, if a remedy within the administrative machinery can be resorted
to by giving the administrative officer every opportunity to decide on a matter that comes within
his jurisdiction, then such remedy must be exhausted first before the courts power of judicial
review can be sought. The premature resort to the court is fatal to ones cause of

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action. Accordingly, absent any finding of waiver or estoppel, the case may be dismissed for
lack of cause of action.
xxxxx
The doctrines of primary jurisdiction and exhaustion of administrative remedies are subject to
certain exceptions, to wit:
(a) where there is estoppel on the part of the party invoking the doctrine; (b) where the
challenged administrative act is patently illegal, amounting to lack of jurisdiction;
(c) where there is unreasonable delay or official inaction that will irretrievably prejudice the
complainant;
(d) where the amount involved is relatively so small as to make the rule impractical and
oppressive;
(e) where the question involved is purely legal and will ultimately have to be decided by the
courts of justice;
(f) where judicial intervention is urgent;
(g) where the application of the doctrine may cause great and irreparable damage;
(h) where the controverted acts violate due process;
(i) where the issue of non-exhaustion of administrative remedies has been rendered moot;
(j) where there is no other plain, speedy and adequate remedy;
(k) where strong public interest is involved; and (l) inquo warranto proceedings.

5. BELLE CORP vs. ERLINDA DE LEON, et. Al

681 scra 351

FACTS:

Plaintiffs-appellants herein respondents Erlinda Banks, Rhodora Tiatco, Betty Torres, Gregorio
De Leon, Alberto De Leon, Eufronio De Leon, Jr. and defendant-appellee Nelia Alleje were
seven of the eight children of the late spouses Eufronio and Josefa De Leon, while plaintiff
Maria Eliza De Grano also one of herein respondents was the daughter and sole heir of the late
Angelina De Leon-De Grano, the eighth child. Defendant-appellee Alfredo Alleje was the
husband of Nelia De Leon-Alleje (both hereinafter referred to as SPOUSES ALLEJE), both of
whom were the principal stockholders and officers of defendant-appellee Nelfred Properties
Corporation (NELFRED). The disputed property was a 13.29 hectare parcel of unregistered land
originally belonging to the late spouses Eufronio and Josefa. On February 9, 1979, a Deed of
Absolute Sale (1979 DEED) was executed between the LATE SPOUSES and NELFRED,
represented therein by Nelia, wherein ownership of the property was conveyed to Nelia
for P 60,000.00 and was thereafter registered with the Register of Deeds. Herein petitioner
BELLE, on one hand, and NELFRED and SPOUSES ALLEJE on the other executed a Contract
to Sell covering the disputed property. Deed of Absolute Sale (1998 DEED) was executed on
June 24, 1998 between BELLE and NELFRED wherein the latter transferred ownership of the
disputed property to the former. Meanwhile, on January 19, 1998, respondents filed a Complaint
for "Annulment of Deed of Sale, Reconveyance of Property with Prayer for Issuance of a Writ of
Preliminary Injunction and Damages" against the SPOUSES ALLEJE, NELFRED and BELLE
wherein they sought the annulment of the Contract to Sell. On February 9, 1998, BELLE filed a
Motion to Dismiss wherein it alleged that the Complaint stated no cause of action against
BELLE, which was an innocent purchaser for value. RTC dismissed the Complaint against
BELLE for failure to state a cause of action on the ground that there was no allegation in the
Complaint that BELLE was a purchaser in bad faith. Herein respondents then filed a Motion for
Reconsideration. On November 11, 1998, pending the resolution of their Motion for
Reconsideration of the September 23, 1998 Order, herein respondents filed a
Manifestation/Motion to admit their Amended Complaint and at the same time, the RTC
admitted the Amended Complaint of the plaintiffs-appellants. BELLE filed a "Motion for
Reconsideration or to Dismiss the Amended Complaint" wherein it alleged that the Amended

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Complaint still stated no cause of action. RTC reconsidered its Order and lifted the dismissal
against BELLE. Aggrieved by the Order of the RTC, respondents filed an appeal with the CA.
CA, reversed and set aside RTC order. Hence, this petition for review on certiorari.

ISSUE:

Whether or not cause of action exists to warrant the right of herein respondents to sue against
BELLE.

RULING:

The essential elements of a cause of action are (1) a right in favor of the plaintiff by whatever
means and under whatever law it arises or is created; (2) an obligation on the part of the named
defendant to respect or not to violate such right; and (3) an act or omission on the part of such
defendant in violation of the right of the plaintiff or constituting a breach of the obligation of the
defendant to the plaintiff for which the latter may maintain an action for recovery of damages or
other appropriate relief. In determining whether a complaint states a cause of action, the RTC
can consider all the pleadings filed, including annexes, motions, and the evidence on record.
The focus is on the sufficiency, not the veracity, of the material allegations. Moreover, the
complaint does not have to establish facts proving the existence of a cause of action at the
outset; this will have to be done at the trial on the merits of the case. It is evident from the
allegations in the Amended Complaint that respondents specifically alleged that they are owners
of the subject property being held in trust by their sister, Nelia Alleje, and that petitioner acted in
bad faith when it bought the property from their sister, through her company, Nelfred, knowing
that herein respondents claim ownership over it. The Court, thus, finds no error on the part of
the CA in ruling that the allegations in the complaint are sufficient to establish a cause of action
for the nullification of the sale of the subject property to herein petitioner.
6. City of Bacolod vs. San Miguel
29 SCRA 819

FACTS: On February 17, 1949, the City Council of Bacolod passed Ordinance No. 66, series of
1949 imposing upon "any person, firm or corporation engaged in the manufacturer bottling of
coca-cola, pepsi cola, tru orange, lemonade, and other soft drinks within the jurisdiction of the
City of Bacolod, a fee of one twenty-fourth (1/24) of a centavo for every bottle thereof," plus "a
surcharge of 2% every month, but in no case to exceed 24% for one whole year," upon "such
local manufacturers or bottler above-mentioned who will be delinquent on any amount of fees
due" under the ordinance. This ordinance was subsequently amended by Ordinance No. 150 by
increasing the fee to 1/8 of a centavo for every bottle thereof.

Such increase was opposed by the appellant San Miguel.

Appellee CoB sued appellant San Miguel. Court rendered judgment in favor of CoB ordering
SM to pay it the sum of P26K and the tax at the rate of 3 centavos per case. Appellant San
Miguel appealed from the said decision to this Court where it pressed the question of the
invalidity of the abovementioned taxing ordinances. In that appeal, however, the Court affirmed
the decision appealed from and upheld the constitutionality of the questioned ordinances and
the authority of the appellee to enact the same.

Moreover, for some other reasons, it was already after this decision had become final when
appellee moved for the reconsideration thereof, praying that the same be amended so as to
include the penalties and surcharges provided for in the ordinances but the said motion was
denied due to the fact that "the decision is already final and may not be amended." When
execution was had before the lower court, the appellee again sought the inclusion of the
surcharges referred to; and once again the move was frustrated by the Court of First Instance of
Negros Occidental which denied the motion.

Failing thus in its attempt to collect the surcharge provided for in the ordinances, appellee
filed a second action to collection the said surcharges (P36K). Appellant San Miguel filed a
Motion to Dismiss the case on the grounds that: (1) the cause of action is barred by a prior
judgment, and (2) a party may not institute more than one suit for a single cause of action. This

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motion was denied by the court a quo so appellant filed its Answer wherein it substantially
reiterated, as affirmative defenses, the above-mentioned grounds of its motion to dismiss.
Thereafter, the parties submitted the case for judgment on the pleadings, whereupon, the court
rendered judgment ordering the defendant San Miguel Brewery, Inc. to pay to the plaintiff the
sum of P36,519.10 representing the surcharges as provided in section 4 of Ordinance 66, series
of 1949 of the City of Bacolod.

ISSUE: Whether or not petitioners act of filing another action for surcharges constitutes splitting
of action.

RULING: Yes. Appellant San Miguels position was upheld by the Court. There is no question
that appellee split up its cause of action when it filed the first complaint seeking the recovery of
only the bottling taxes or charges plus legal interest, without mentioning in any manner the
surcharges.

The rule on the matter is clear. Sections 3 and 4 of Rule 2 of the Rules of Court of 1940 which
were still in force then provided:

SEC. 3.Splitting a cause of action, forbidden. A single cause of action cannot be split
up into two or more parts so as to be made the subject of different complaints.

SEC. 4.Effect of splitting. If separate complaints were brought for different parts of a
single cause of action, the filing of the first may be pleaded in abatement of the others,
and a judgment upon the merits in either is available as a bar in the others.

Indeed, this rule against the splitting up of a cause of action is an old one. In fact, it
preceded the Rules of Court or any statutory provision.

The classical definition of a cause of action is that it is "a delict or wrong by which the
rights of the plaintiff are violated by the defendant." Its elements may be generally stated to be
(1) a right existing in favor of the plaintiff; (2) a corresponding obligation on the part of the
defendant to respect such right; and (3) an act or omission of the plaintiff which constitutes a
violation of the plaintiff's right which defendant had the duty to respect. In the last analysis, a
cause of action is basically an act or an omission or several acts or omissions.
A single act or omission can be violative of various rights at the same time, as when the
act constitutes juridically a violation of several separate and distinct legal obligations. On the
other hand, it can happen also that several acts or omissions may violate only one right, in
which case, there would be only one cause of action. Again the violation of a single right may
give rise to more than one relief. In other words, for a single cause of action or violation of a
right, the plaintiff may be entitled to several reliefs. It is the filing of separate complaints for
these several reliefs that constitutes splitting up of the cause of action. This is what is prohibited
by the rule.

Furthermore, when appellant failed and refused to pay the difference in bottling charges
such act of appellant in violation of the right of appellee to be paid said charges in full under the
Ordinance, was one single cause of action, but under the Ordinance, appellee became entitled,
as a result of such non-payment, to two reliefs, namely: (1) the recovery of the balance of the
basic charges; and (2) the payment of the corresponding surcharges, the latter being merely a
consequence of the failure to pay the former. The obligation of appellant to pay the surcharges
arose from the violation by said appellant of the same right of appellee from which the obligation
to pay the basic charges also arose. Upon these facts, it is obvious that appellee has filed
separate complaints for each of two reliefs related to the same single cause of action, thereby
splitting up the said cause of action.

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7. Jalandoni v. Martir-Guanzon
102 Phil. 859

FACTS: On January 9, 1947, the appellant spouses began a suit (Case No. 573) against the
appellees Antonio Guanzon, eta al., for partition of various lots and for recovery of damages
caused by the defendants' unwarranted refusal to recognize plaintiffs' right and partition said
lots, as was to account for and deliver plaintiff's share in the crops obtained during the
agricultural years from 1941-1942 to 1946-1947.

Meanwhile, the Court of First Instance of Negros Occidental held for plaintiffs and ordered
the partition of the lands involved, but denied their claim for damages because of failure to
"prove the exact and actual damages suffered by them. The decision having become final
because none of the parties appealed therefrom, the plaintiffs instituted the present action
seeking recovery from the defendants for moral and exemplary damages, share of the products
of the property from 1947 until 1955, taxes due unpaid and attorneys fees. Upon motion of
defendant's, the court a quo dismissed the second complaint for failure to state a cause of
action; and after their motion to reconsider was denied, plaintiffs appealed to this Court on
points of law.

ISSUE: Whether or not dismissal was proper.

RULING: Yes. The Court found the dismissal of the lower court to have been correctly entered.
Except as concomitant to physical injuries, moral and corrective damages (allegedly due to
suffering, anguish and anxiety caused by the refusal of defendants in 1941 to partition the
common property) were not recoverable under the Civil Code of 1899 which was the governing
law at the time. Recovery of such damages was established for the first time in 1950 by the new
Civil Code, and action not be made to apply retroactively to acts that occurred character of
these damages. The rule is expressly laid down by paragraph 1 of Article 2257 of the new Code.

Moreover, 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.

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 Also, 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
complaint 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 in the former case No. 573 between the
same parties. Anent the land taxes allegedly overdue and unpaid, it is readily apparent that,
taxes been due to the government, plaintiffs have no right to compel payment thereof to
themselves. Little need be said concerning the claim for attorney's fees under the fourth cause
of action. If they be fees for the lawyer's services in the former case, they are barred from
recovery for the reasons already given; if for services in the present case, there is no jurisdiction
therefor, since no case is made out for the plaintiffs.

8. Joseph vs. Bautista

170 SCRA 540

FACTS: Respondent Patrocinio Perez is the owner of a cargo truck for conveying cargoes and
passengers for a consideration from Dagupan City to Manila. The said cargo truck driven by
defendant Domingo Villa was on its way to Valenzuela, Bulacan from Pangasinan. Petitioner,
with a cargo of livestock, boarded the cargo truck at Dagupan City. Thereupon, while said cargo
truck was negotiating the National Highway proceeding towards Manila, defendant Domingo
Villa tried to overtake a tricycle likewise proceeding in the same direction.

At about the same time, a pick-up truck, supposedly owned by respondents Antonio
Sioson and Jacinto Pagarigan, then driven by respondent Lazaro Villanueva, tried to overtake
the cargo truck thereby forcing the cargo truck to veer towards the shoulder of the road and to
ram a mango tree. As a result, petitioner sustained a bone fracture in one of his legs.

Petitioner filed a complaint for damages against respondent Patrocinio Perez, as owner
of the cargo truck, based on a breach of contract of carriage and against respondents Antonio
Sioson and Lazaro Villanueva, as owner and driver, respectively, of the pick-up truck, based on
quasi-delict. Respondent Sioson filed his answer alleging that he is not and never was an owner
of the pick-up truck and neither would he acquire ownership thereof in the future.
Moreover, petitioner, with prior leave of court, filed his amended complaint impleading
respondents Jacinto Pagarigan and a certain Rosario Vargas as additional alternative
defendants. Petitioner apparently could not ascertain who the real owner of said cargo truck
was, whether respondents Patrocinio Perez or Rosario Vargas, and who was the real owner of
said pick-up truck, whether respondents Antonio Sioson or Jacinto Pagarigan. Respondent
Perez filed her amended answer with crossclaim against her co-defendants for indemnity and
subrogation in the event she is ordered to pay petitioner's claim, and therein impleaded cross-
defendant Alberto Cardeno as additional alternative defendant. Respondents Lazaro Villanueva,
Alberto Cardeno, Antonio Sioson and Jacinto Pagarigan, thru their insurer, Insurance
Corporation of the Philippines, paid petitioner's claim for injuries sustained. And by reason
thereof, petitioner executed a release of claim releasing them from liability. A few months after,
they also paid respondent Patrocinio Perez' claim for damages to her cargo truck.
Consequently, respondents Sioson, Pagarigan, Cardeno and Villanueva filed a "Motion to
Exonerate and Exclude Defs/ Cross defs. Alberto Cardeno, Lazaro Villanueva, Antonio Sioson

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and Jacinto Pagarigan on the Instant Case", alleging that respondents Cardeno and Villanueva
already paid damages to respondent Perez, and alleging further that respondents Cardeno,
Villanueva, Sioson and Pagarigan paid an amount to petitioner. Thereafter, respondent Perez
filed her "Opposition to Cross-defs.' motion and Counter Motion" to dismiss. The so-called
counter motion to dismiss was premised on the fact that the release of claim executed by
petitioner in favor of the other respondents inured to the benefit of respondent Perez,
considering that all the respondents are solidarity liable to herein petitioner. Respondent judge
issued the questioned order dismissing the case, and a motion for the reconsideration thereof
was denied. Petitioner, by way of appeal, contends that respondent judge erred in declaring that
the release of claim executed by petitioner in favor of respondents Sioson, Villanueva and
Pagarig.

ISSUE: Whether or not petitioners contention is correct.

RULING: No. The singleness of a cause of action lies in the singleness of the- delict or wrong
violating the rights of one person. Nevertheless, if only one injury resulted from several wrongful
acts, only one cause of action arises. In the case at bar, there is no question that the petitioner
sustained a single injury on his person. That vested in him a single cause of action, albeit with
the correlative rights of action against the different respondents through the appropriate
remedies allowed by law.

Therefore, the trial court was correct in holding that there was only one cause of action
involved although the bases of recovery invoked by petitioner against the defendants therein
were not necessarily identical since the respondents were not identically circumstanced.
However, a recovery by the petitioner under one remedy necessarily bars recovery under the
other. This, in essence, is the rationale for the proscription in our law against double recovery for
the same act or omission which, obviously, stems from the fundamental rule against unjust
enrichment.

There is no question that the respondents herein are solidarily liable to petitioner. On the
evidence presented in the court below, the trial court found them to be so liable. It is undisputed
that petitioner, in his amended complaint, prayed that the trial court hold respondents jointly and
severally liable.

The respondents having been found to be solidarity liable to petitioner, the full payment
made by some of the solidary debtors and their subsequent release from any and all liability to
petitioner inevitably resulted in the extinguishment and release from liability of the other solidary
debtors, including herein respondent Patrocinio Perez.

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9. PNB vs. Estanislao Militar
467 SCRA 377

FACTS: Deogracias, Glicerio, Tomas and Caridad, all surnamed Militar, were heirs of Estanislao
Militar and the registered co-owners of Lot Nos. 3011 and 3017 covered by OCT No. T-8238-A
(0-16879) and OCT No. 94-(0-16878).

On August 16, 1941, Deogracias sold his undivided share in Lot No. 3011 to Pedro
Golez, and in Lot No. 3017 to spouses Sofronio and Lourdes Lumagbas. Golez annotated the
sale at the back of the title thereof while spouses Lumagbas caused the subdivision of Lot No.
3017 into Lot No. 3017-A and Lot No. 3017-B, with Lot No. 3017-A registered in their names
under TCT No. 8239. Notwithstanding the sale, Deogracias continued to occupy a portion of Lot
No. 3011 and Lot No. 3017-B until his death on March 17, 1964. Glicerio died on March 22,
1939, Tomas on August 20, 1959 and Caridad on April 29, 1957. Glicerio and Caridad died
without issue. Deogracias was survived by Teodorico and Remedios, while Tomas was survived
by Wenceslao and Ladislao.

However, in a Deed of Absolute Sale dated April 24, 1975, Deogracias, Glicerio, Tomas
and Caridad purportedly sold Lot No. 3011 to spouses Rodolfo and Nilda Jalbuna. In another
Deed of Sale dated April 25, 1975, Glicerio, Tomas and Caridad purportedly sold Lot No. 3017-B
to the same spouses. Consequently, titles to Lot Nos. 3011 and 3017-B were cancelled and new
titles, TCT Nos. 39083 and 39082, respectively, were issued to spouses Jalbuna.

Subsequently, Lot No. 3011 was subdivided into Lot No. 3011-A and Lot No. 3011-B,
with Lot No. 3011-A registered in the name of spouses Jalbuna and Lot No. 3011-B in the name
of Golez.

On June 5, 1975, spouses Jalbuna mortgaged Lot No. 3017-B to Philippine National
Bank (PNB) as security for a loan. When they defaulted, PNB extrajudicially foreclosed the
mortgage and sold Lot No. 3017-B at public auction, with PNB as the highest bidder. Title
thereto was consolidated in the name of PNB and was issued TCT No. T-61465.

12 | P a g e
Thereafter, PNB sold the lot to spouses Johnny and Nona Lucero, who were issued TCT No.
76938. As the new owners of Lot No. 3017-B, they filed an ejectment case against Tranquilina,
Azucena, Freddie and Eduardo, all surnamed Militar, the actual occupants therein.

On October 2, 1989, Tranquilina, Azucena, Freddie and Eduardo as surviving heirs of

Teodorico and Deogracias Militar, filed a complaint against spouses Jalbuna, PNB, and spouses
Lucero for Reconveyance of Title, Annulment of Sale, Cancellation of Titles and Damages.
Other heirs of Deogracias on the side of Remedios filed a complaint-in-intervention to join the
plaintiffs. They prayed for: 1) the declaration of nullity of the two (2) deeds of sale dated April 24,
1975 and April 25, 1975 covering Lot No. 3011 and Lot No. 3017-B, respectively; 2) the
cancellation of title covering Lot No. 3017-B in the name of spouses Lucero; 3) the cancellation
of title covering Lot No. 3011-A in the name of spouses Jalbuna; 4) the reconveyance of Lot
3011-A and Lot No. 3017-B to the heirs of Deogracias Militar; and 5) actual, exemplary and
moral damages.

Spouses Jalbuna invoked prescription, non-inclusion of indispensable parties and lack of

cause of action since their predecessor, Deogracias, no longer had interest over the properties
having sold them to third parties. PNB claimed that it was a mortgaee in good faith and for
value; that the title of spouses Jalbuna was free from all liens and encumbrances when they
secured the loan; and that it conducted verification and inspection of the property before
granting the loan.

Spouses Lucero alleged that the complaint was commenced without the real party in
interest; that the cause of action has prescribed; and that they were innocent purchasers in
good faith and for value.

The trial court rendered a decision dated October 18, 1995, dismissing the complaint,
complaint-in-intevention, as well as the cross claim of PNB.

The Court of Appeals reversed the decision of the trial court.

ISSUES: 1.) Whether or not the case was brought by all indispensable parties;
2.) Whether or not petitioners PNB and spouses Lucero were mortgagee and
purchasers in good faith, respectively; and
3.) Whether or not action for reconveyance has prescribed or is barred by laches.

The court was not persuaded by PNBs claim that the case was not brought by all
indispensable parties as other heirs of Glicerio, Tomas and Caridad have not been named as
parties therein.

An indispensable party is one whose interest will be affected by the court's action in the
litigation, and without whom no final determination of the case can be had. The party's interest
in the subject matter of the suit and in the relief sought are so inextricably intertwined with the
other parties' that his legal presence as a party to the proceeding is an absolute necessity. In his
absence there cannot be a resolution of the dispute of the parties before the court which is
effective, complete, or equitable.
There are two essential tests of an indispensable party: (1) can relief be afforded the
plaintiff without the presence of the other party?; and, (2) can the case be decided on the merits
without prejudicing the rights of the other party? There is, however, no fixed formula for
determining who is an indispensable party; this can only be determined in the context and by
the facts of the particular suit or litigation.

In the case at bar, the ultimate relief sought by the action is the reconveyance of titles to
their rightful owners. The records reveal that prior to the forgery, the disputed properties were
registered in the names of the co-owners, Glicerio, Tomas and Caridad, whose interests
remained undivided. Thus, if reconveyance of the titles is granted, the titles will revert back to
the estates of the deceased co-owners and not to their individual heirs, whose interests are
divisible and may properly be ventilated in another proceeding. Therefore, a co-heir may bring
such action without necessarily joining all the other co-heirs as co-plaintiffs because the suit is
deemed to be instituted for the benefit of all. As correctly held by the Court of Appeals:

13 | P a g e
 PNB next argues that since Deogracias sold his shares in the disputed lots, his heirs,
herein respondents, do not have a cause of action against it, spouses Jalbuna and spouses
Lucero.

This argument is proper had Deogracias died ahead of the other co-owners. However,
records show that Glicerio, Tomas and Caridad predeceased Deogracias. Glicerio died on
March 22, 1939, Tomas on August 20, 1959, Caridad on April 29, 1957, while Deogracias died
on March 17, 1964.

Clearly, when Glicerio and Caridad died intestate and without issue, their shares in the
disputed properties were inherited by Deogracias and Tomas. It is this portion that respondents,
as heirs of Deogracias, have an interest on and which vested them with personality to institute
the present case.

PNB and spouses Lucero claim to be mortgagee and buyers in good faith, respectively,
since title to Lot No. 3017-B appeared to be free from any encumbrance. They argue that a
person dealing with a registered land may rely on the correctness of the certificate of title and is
not required to go beyond it to determine the condition of the property.

Whether petitioners are innocent mortgagee or purchasers in good faith and for value, is
a factual matter, which cannot be raised in a petition for review on certiorari under Rule
45. Settled is the rule that this Court is not a trier of facts and does not normally embark on a re-
examination of the evidence adduced by the parties during trial. In Heirs of the Late Spouses
Aurelio and Esperanza Balite v. Lim, we held that factual findings of the Court of Appeals are
binding and conclusive upon us. These findings may be reviewed only under exceptional
circumstances such as when the inference is manifestly mistaken; the judgment is based on a
misapprehension of facts; findings of the trial court contradict those of the appellate court; or the
latter manifestly overlooked relevant and undisputed facts that, if properly considered, would
justify a different conclusion.

The Court of Appeals reversed the decision of the trial court based on its findings of facts
which are in accord with the documents on record. Thus, we affirm the Court of Appeals finding
that petitioners were not mortgagee or buyers in good faith.

Moreover, the burden of proving the status of a purchaser in good faith and for value lies
upon him who asserts that status. In discharging the burden, it is not enough to invoke the
ordinary presumption of good faith. The rule is settled that a buyer of real property in possession
of persons other than the seller must be wary and should investigate the rights of those in
possession. Without such inquiry, the buyer can hardly be regarded as buyer in good faith and
cannot have any right over the property.

PNB claims that it conducted the necessary inquiry and investigation on the subject lot
and was convinced that Nilda Jalbuna, as one of the heirs of Estanislao Militar, had every right
to mortgage the same, even if she was not in actual possession thereof. However, considering
that the land was in the possession of persons other than the mortgagors, PNB should have
inquired whether the possessors knew that the lot is being mortgaged, and the circumstances
surrounding the acquisition of the lot by the mortgagors. Indeed, while PNB is not expected to
conduct an exhaustive investigation on the history of the mortgagors title, it cannot be excused
from the duty of exercising the due diligence required of a banking institution. In Tomas v.
Tomas, we noted that it is standard practice for banks, before approving a loan, to send
representatives to the property offered as collateral to assess its actual condition and to
investigate who are the real owners thereof. We held that banks are expected to exercise more
care and prudence than private individuals in their dealings, even those involving registered
lands, for their business is affected with public interest. Verily, PNB was remiss in the exercise of
due diligence required of a banking institution, hence it cannot be considered as mortgagee in
good faith.

Neither could spouses Lucero be considered buyers in good faith. As respondents

neighbors, they could have verified the status of the property they were buying by inquiring from
the possessors thereof. This, they failed to do; hence they cannot be considered buyers in good
faith.

14 | P a g e
 As to whether the action for reconveyance has prescribed, we held in Santos v.
Santos, citing Lacsamana v. CA, that the right to file an action for reconveyance on the ground
that the certificate of title was obtained by means of a fictitious deed of sale is virtually an action
for the declaration of its nullity, which does not prescribe.

Neither could laches be successfully invoked. Laches is a doctrine in equity which has
been aptly described as justice outside legality, and applied only in the absence of, and never
against, statutory law. Aequetas nunguam contravenit legis. The positive mandate of Art. 1410
of the Civil Code conferring imprescriptibility to actions or defense for the declaration of the
inexistence of a contract should pre-empt and prevail over all abstract arguments based only on
equity. Certainly, laches cannot be set up to resist the enforcement of an imprescriptible legal
right; thus, respondents can validly vindicate their inheritance despite the lapse of time.

Finally, while certificates of title are indefeasible, unassailable and binding against the
whole world, they merely confirm or record title already existing and vested. They cannot be
used to protect a usurper from the true owner, nor can they be used for the perpetration of
fraud; neither do they permit one to enrich himself at the expense of others.

10. Republic vs. Marcos Manotoc, et. al

665 SCRA 367

Facts: After the EDSA People Power Revolution in 1986, President Corazon C. Aquino created
the Presidential Commission of Good Government (PCGG). The PCGG filed a Complaint
against Ferdinand Marcos, who has later substituted by his estate upon his death; Imelda R.
Marcos; and herein respondents Imee MarcosManotoc, Irene Marcos
Araneta, Bongbong Marcos, Tomas Marcos, and Gregorio Araneta III.

Issue: Whether or not the petitioners are parties in interest.

Ruling: Since the pending case before the Sandiganbayan survives the death of Ferdinand E.
Marcos, it is imperative therefore that the estate be duly represented. The purpose behind this
rule is the protection of the right to due process of every party to a litigation who may be
affected by the intervening death. The deceased litigant is himself protected, as he continues to
be properly represented in the suit through the duly appointed legal representatives of his
estate. On that note, we take judicial notice of the probate proceedings regarding the will of
Ferdinand E. Marcos. InRepublic of the Philippines v. Marcos II, it is upheld the grant by the
Regional Trial Court (RTC) of letters testamentaryin sodiumto Ferdinand R. Marcos, Jr. and
Imelda Romualdez Marcos as executors of the last will and testament of the late Ferdinand E.
Marcos.

15 | P a g e
11. SARSABA v. FE VDA. DE TE
G.R. No. 175910

FACTS:

Respondent Fe Vda.de Te, represented by her attorney-in-fact, Faustino Castaeda,

filed with the RTC, a Complaint for recovery of motor vehicle, damages with prayer for the
delivery of the truck pendente lite against petitioner (Atty. Sarsaba), Sereno, Lavarez and the
NLRC of Davao City.

Respondent alleged, among others, that: (1) she is the wife of the late Pedro Te, the registered
owner of the truck, as evidenced by the Official Receipt and Certificate of Registration.

Petitioner Sarsaba alleges that that there was no showing that the heirs have filed an intestate
estate proceedings of the estate of Pedro Te, or that respondent was duly authorized by her co-
heirs to file the case; and that the truck was already sold to Gasing on March 11, 1986 by one
Jesus Matias, who bought the same from the Spouses Te. Corollarily, Gasing was already the
lawful owner of the truck when it was levied on execution and, later on, sold at public auction.

On October 17, 2005, petitioner Sarsaba filed an Omnibus Motion to Dismiss the Case on the
following grounds: (1) lack of jurisdiction over one of the principal defendants; and (2) to
discharge respondent's attorney-in-fact for lack of legal personality to sue. It appeared that the
respondent, Fe Vda. de Te, died on April 12, 2005.

Respondent, through her lawyer, argues that respondent's death did not render functus officio
her right to sue since her attorney-in-fact, Faustino Castaeda, had long testified on the
complaint on March 13, 1998 for and on her behalf and, accordingly, submitted documentary
exhibits in support of the complaint.

ISSUE:

What is the legal effect of death of the plaintiff during the pendency of the case?

16 | P a g e
RULING:

When a party to a pending action dies and the claim is not extinguished, the Rules of Court
require a substitution of the deceased.

Section 1, Rule 87 of the Rules of Court enumerates the actions that survived and may be filed
against the decedent's representatives as follows:
(1) actions to recover real or personal property or an interest thereon;
(2) actions to enforce liens thereon, and
(3) actions to recover damages for an injury to a person or a property.

In such cases, a counsel is obliged to inform the court of the death of his client and give the
name and address of the latter's legal representative. The rule on substitution of parties is
governed by Section 16, 46 Rule 3 of the 1997 Rules of Civil Procedure, as amended.

The rule on substitution by heirs is not a matter of jurisdiction, but a requirement of due process.
The rule on substitution was crafted to protect every party's right to due process. It was
designed to ensure that the deceased party would continue to be properly represented in the
suit through his heirs or the duly appointed legal representative of his estate.

It is only when there is a denial of due process, as when the deceased is not represented by
any legal representative or heir, that the court nullifies the trial proceedings and the resulting
judgment therein.

In the case before us, it appears that respondent's counsel did not make any manifestation
before the RTC as to her death. In fact, he had actively participated in the proceedings. Neither
had he shown any proof that he had been retained by respondent's legal representative or any
one who succeeded her.

However, such failure of counsel would not lead Us to invalidate the proceedings that have long
taken place before the RTC. The Court has repeatedly declared that failure of the counsel to
comply with his duty to inform the court of the death of his client, such that no substitution is
effected, will not invalidate the proceedings and the judgment rendered thereon if the action
survives the death of such party. The trial court's jurisdiction over the case subsists despite the
death of the party.

The purpose behind this rule is the protection of the right to due process of every party to the
litigation who may be affected by the intervening death. The deceased litigants are themselves
protected as they continue to be properly represented in the suit through the duly appointed
legal representative of their estate.

Despite the special power of attorney given to Castaneda by Fe Vda. De Te has been
extinguished due to the death of the principal, the case at hand is an action for the recovery of a
personal property, a motor vehicle, is an action that survives and is not extinguished by the
death of a party.

17 | P a g e
12. RAMON GONZALES vs. PAGCOR
G. R. No. 144891. May 27, 2004

FACTS:

Petitioner Ramon A. Gonzales, as a citizen, taxpayer and member of the Philippine Bar, filed a
Petition seeking to restrain respondent Philippine Amusement and Gaming Corporation
(PAGCOR) from continuing its operations and prohibit it and its co-respondents Sports and
Games Entertainment Corporation (SAGE), Best World Gaming and Entertainment Corporation
(BEST WORLD), Belle Jai-alai Corporation (BELLE) and Filipinas Gaming Entertainment
Totalizator Corporation (FILGAME) from enforcing: (1) the Grant of an Authority and Agreement
for the Operation of Sports Betting and Internet Gambling executed between PAGCOR and
SAGE; (2) the Grant of Authority to Operate Computerized Bingo Games between PAGCOR
and BEST WORLD; and (3) the Agreement among PAGCOR, BELLE and FILGAME to
conduct jai-alai operations.

In Del Mar v. Phil. Amusement and Gaming Corp., et al., the Court enjoined PAGCOR, BELLE,
and FILGAME from managing, maintaining and operating jai-alai games and from enforcing the
agreement entered into by them for that purpose. Then, PAGCOR et al. filed several motions for
clarification, which the Supreme Court denied.

Respondents BELLE and FILGAME filed a Manifestation stating that they were impleaded in the
instant petition by reason of the agreement which they executed with PAGCOR. The said
agreement was already declared invalid by the Supreme Court. In its comment, the respondent
BEST WORLD stated that it had been unable to operate its bingo terminals and bingo games
since its closure and shut down by PAGCOR and DILG.

The petition having been given due course by Resolution of September 19, 2001, the parties
were required to submit their respective Memoranda. Only respondents PAGCOR and SAGE
submitted their Memoranda, on December 6, 2001 and January 24, 2002,15 respectively.

18 | P a g e
Gonzales having failed to file his Memorandum within the prescribed period, this Court which, in
the meantime, was informed of the alleged demise of Gonzales, manifest whether they were still
interested in prosecuting the petition, or whether supervening events had rendered it moot and
academic.

Attys. Manuel B. Imbong and Jo Aurea M. Imbong filed a Motion for Substitution. They thus pray
that as they are among the "Filipino citizens, taxpayers and members of the Philippine Bar" for
whom the herein class suit was instituted and are both capable of prosecuting the instant case,
they be substituted as petitioners in lieu of Gonzales and that they be given thirty days from
notice within which to file their memorandum.

Respondents PAGCOR and SAGE both argue that, among others things, movants Attys.
Imbong and Imbong may not be substituted for Gonzales as the former are neither legal
representatives nor heirs of the latter within the purview of Section 16, Rule 3 of the Rules of
Court which reads:

Sec. 16.Death of party, duty of counsel. Whenever a party to a pending action dies, and the
claim is not thereby extinguished, it shall be the duty of his counsel to inform the court within
thirty (30) days after such death of the fact thereof, and to give the name and address of his
legal representative or representatives. Failure of counsel to comply with this duty shall be a
ground for disciplinary action.

The heirs of the deceased may be allowed to be substituted for the deceased, without requiring
the appointment of an executor or administrator and the court may appoint a guardian ad litem
for the minor heirs. The court shall forthwith order said legal representative or representatives to
appear and be substituted within a period of thirty (30) days from notice.

If no legal representative is named by the counsel for the deceased party, or if the one so
named shall fail to appear within the specified period, the court may order the opposing party,
within a specified time, to procure the appointment of an executor or administrator for the estate
of the deceased and the latter shall immediately appear for and on behalf of the deceased. The
court charges in procuring such appointment, if defrayed by the opposing party, may be
recovered as costs.

Respondents PAGCOR and SAGE further argue that neither Gonzales nor movants have
substantiated the allegation that the instant case is a class suit as defined under Section 12,
Rule 3 of the Rules of Court. Hence, so said respondents argue, the petition should be
considered a personal action which was extinguished with the death of Gonzales.

ISSUE:

Whether or not the movants may substitute Gonzales.

RULING:

No. The question as to whether an action survives or not depends on the nature of the action
and the damage sued for. If the causes of action which survive the wrong complained of affects
primarily and principally property and property rights, the injuries to the person being merely
incidental, while in the causes of action which do not survive the injury complained of is to the
person the property and rights of property affected being incidental.

Since Gonzales necessarily asserted "a personal and substantial interest in the case" such that
he "has sustained or will sustain direct injury as a result of the governmental act that is being
challenged. "A reading of the allegations in the petition readily shows that Gonzales alleged
interest does not involve any claim to money or property which he could have assigned to
another or transmitted to his heirs. Rather, he claimed to be vindicating his rights as a citizen,
taxpayer and member of the bar. Being personal and non-transferable in nature, any interest
that he might have had in the outcome of this case cannot be deemed to have survived his
death.

19 | P a g e
13. UNITED OVERSEAS BANK PHILS. vs.
ROSEMOORE MINING & DEVELOPMENT CORP. and DRA. LOURDES PASCUAL,
G.R. Nos. 159669 & 163521; March 12, 2007

FACTS:

Rosemoore Mining & Development Corporation (Hereon Rosemoor) in order to secure a credit
facility amounting to 80Million executed a mortgage agreement with United Overseas Bank
Phils. (Hereon Bank) which covered six (6) parcels of land all registered under Rosemoor.

Rosemoor defaulted which caused the extrajudicial foreclosure of the properties. The bank was
the highest bidder in all of the properties. Hence the filing of the case by Rosemoor before the
Manila RTC and Malolos RTC. (The issue of the case, filing of 2 actions in 2 different courts)

Manila RTC: (Personal Action)

Rosemoor filed an action to receive the remaining proceeds of the loan. However, the bank filed
a motion to dismiss the case because it contends Rosemoor is violating forum shopping, having
initiated a case in Malolos RTC. However the motion to dismiss was denied, likewise it was
dismissed by the CA holding that there was no forum shopping.

Malolos RTC: (Real Action)

Rosemoor second action was filed her to restrain the foreclosure of the properties mortgaged to
secure the loan which was not due yet. As it here, the bank filed a motion to dismiss the case
due to violation of forum shopping but the likewise it was denied by the RTC and CA.

Hence the two petitions were consolidated by the Supreme Court. Hence the case.

ISSUE:

20 | P a g e
Whether or not the venue of the filing of the cases resulted to forum shopping.

RULING:

The Supreme Court ruled in favor of Rosemoor, and affirming the ruling of the lower courts that
there was no violation of forum shopping.

The Malolos case was filed for the purpose of restraining the Bank from proceeding with the
consolidation of the titles over the foreclosed Bulacan properties because the loan secured by
the mortgage had not yet become due and demandable. While the right asserted in the Manila
case is to receive the proceeds of the loan, the right sought in the Malolos case is to restrain the
foreclosure of the properties mortgaged to secure a loan that was not yet due
Moreover, the Malolos case is an action to annul the foreclosure sale that is necessarily an
action affecting the title of the property sold. It is therefore a real action which should be
commenced and tried in the province where the property or part thereof lies. The Manila case,
on the other hand, is a personal action involving as it does the enforcement of a contract
between Rosemoor, whose office is in Quezon City, and the Bank, whose principal office is in
Binondo, Manila. Personal actions may be commenced and tried where the plaintiff or any of the
principal plaintiffs resides, or where the defendants or any of the principal defendants resides, at
the election of the plaintiff.

It was subsequent to the filing of the Manila case that Rosemoor and Dr. Pascual saw the need
to secure a writ of injunction because the consolidation of the titles to the mortgaged properties
in favor of the Bank was in the offing. But then, this action can only be commenced where the
properties, or a portion thereof, is located. Otherwise, the petition for injunction would be
dismissed for improper venue. Rosemoor, therefore, was warranted in filing the Malolos case
and cannot in turn be accused of forum-shopping.

14. MAGASPI et. al, v. HON. JOSE RAMOLETE, et. al.

G.R. No. L-34840 July 20, 1982

FACTS:

On September 16, 1970, the petitioners filed a complaint for the recovery of ownership
and possession of a parcel of land with damages against Shell Phils, Central Visayan Realty &
Investment, & Cebu City Savings & Loan Association in CFI Cebu. Upon filing and the payment
of P60 as docketing P10 for sheriff fees, the case was assigned.

Central Visayan & Cebu Savings filed a motion to compel the plaintiffs to pay the correct
fees, and failing to pay the same within the prescribed period, to dismiss the case. Further
praying that until correct fee is paid, the time for filing of responsive pleadings by the defendants
be suspended.

The motion was opposed by the petitioners who claimed that the main cause of action
was the recovery of a piece of land and on the basis of its assessed value, P60 was the correct
docketing fee and that although the Revised Rules of Court do not exclude damages in the
computation of the docket fee, damages are nonetheless still to be excluded.

On October 5, 1970, the presiding judge ordered the Clerk of Court to comment on the
motion and the opposition which it assessed that the correct fees shall be fixed at of P3,164.00
plus P2.00 Legal Research fee (the value of the land, which is P17,280.00, plus the damages
amounting to P3,390,633.24). Hence, petitioner shall pay P3,104, net of the P60.00 already
paid. However, private respondents filed their respective answers that the same was exclusive
of exemplary damages must be included in the computation therein.

On November 3, 1970, the plaintiffs filed a motion for leave to amend the complaint so
as to include the Government of the Republic of the Philippines as a defendant. Nine days after,
respondents filed an opposition to the admission of the amended complaint.

21 | P a g e
 On November 16, 1970, Judge Canonoy admitted the amended complaint although the
plaintiffs had not yet complied with his Order that they should pay an additional P3,104.00
docket fee. On April 3, 1971, Judge Jose R. Ramolete who had replaced Judge Canonoy,
issued the same order.

ISSUE:

Whether or not the case may be considered as having been filed and docketed when
P60.00 was paid to the Clerk of Court even on the assumption that said payment was not
sufficient in amount.

RULING:

The rule is well-settled that a case is deemed filed only upon payment of the docket fee
regardless of the actual date of its filing in court. The Court holds that it was docketed upon the
payment of P60, although said amount is insufficient. Accordingly, the trial court had acquired
jurisdiction over the case and the proceedings thereafter had were proper and regular.

The next question is re: correct amount to be paid as docket fee. Judge Canonoy
ordered the payment of P3,104 as additional docket fee based on the original complaint.
However, the petitioners assert as an alternative view, that the docket fee be based on the
amended complaint. The petitioners are correct. "When a pleading is amended, the original
pleading is deemed abandoned. The original ceases to perform any further function as a
pleading. The case stands for trial on the amended pleading only. On the basis of the foregoing,
the additional docket fee to be paid by the petitioners should be based on their amended
complaint.

WHEREFORE, the petition is hereby granted: the petitioners shall be assessed a docket
fee on the basis of the amended complaint; and after all of the lawful fees shall have been paid,
the proceedings in Civil Case No. R-11882 shall be resumed.

15. MANCHESTER DEVELOPMENT CORPORATION, ET AL., v. COURT OF APPEALS

G.R. No. 75919; May 7, 1987

FACTS:

Originally, this was a case of an action for torts and damages and specific performance
with a prayer for a temporary restraining order. In the present case the damages were not
specifically stated in the prayer but was alleged in the body of the complaint which assessed
78.75 million as damages suffered by the petitioner. The amount of the docket fee paid was
only 410.00. With leave of court the petitioner then amended the complaint with the inclusion
of additional co-plaintiffs and by eliminating any mention of the amount of damages in the body
of the complaint thereby reducing the amount of damages to 10 million pesos only.

ISSUE:

Whether or not the court acquired jurisdiction over the case when the correct and proper
docket fee has not been paid.

RULING:

No. The trial court did not acquire jurisdiction over the case by the payment of only
410.00 as docket fee. Neither can the amendment of the complaint thereby vest jurisdiction
upon the Court. The basis of assessment of the docket fee should be the amount of damages
sought in the original complaint and not in the amended complaint. All complaints, petitions,
answers and other similar pleadings should specify the amount of damages being prayed for not
only in the body of the pleading but also in the prayer, and said damages shall be considered in
the assessment of the filing fees in any case. Any pleading that fails to comply with this
requirement shall not bib accepted nor admitted, or shall otherwise be expunged from the
record.

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16. SUN INSURANCE OFFICE, LTD., (SIOL), E.B. PHILIPPS and D.J. WARBY, petitioners,
vs.
HON. MAXIMIANO C. ASUNCION, Presiding Judge, Branch 104, Regional Trial Court,
Quezon City and MANUEL CHUA UY PO TIONG, respondents.
G.R. Nos. 79937-38 February 13, 1989

FACTS

Petitioner Sun Insurance (or SIOL) files a complaint for the annulment of a decision on
the consignation of fire insurance policy. Subsequently, the Private Respondent (PR) files a
complaint for the refund of premiums and the issuance of a writ of preliminary attachment in a
civil case against SIOL. In addition, PR also claims for damages, attorneys fees, litigation costs,
etc., however, the prayer did not state the amount of damages sought although from the body of
the complaint it can be inferred to be in amount of P 50 million. Hence, PR originally paid only
PhP 210.00 in docket fees.The complaint underwent a number of amendments to make way for
subsequent re-assessments of the amount of damages sought as well as the corresponding
docket fees. The respondent demonstrated his willingness to abide by the rules by paying the
additional docket fees as required.

ISSUE

Did the Court acquire jurisdiction over the case even if private respondent did not pay
the correct or sufficient docket fees?

RULING

YES.It was 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. Where 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 or reglamentary period. Same
rule goes for permissive counterclaims, third party claims and similar pleadings.

23 | P a g e
In herein case, obviously, there was the intent on the part of PR to defraud the government of
the docket fee due not only in the filing of the original complaint but also in the filing of the
second amended complaint. However, a more liberal interpretation of the rules is called for
considering that, unlike in Manchester, the private respondent demonstrated his willingness to
abide by the rules by paying the additional docket fees as required.

Where a trial court acquires jurisdiction in like manner, but subsequently, the judgment awards a
claim not specified in the pleading, or if specified the same has been left for determination by
the court, the additional filing fee shall constitute a lien on the judgment. It shall be the
responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess
and collect the additional fee.

17. KILUSAN-OLALIA vs.

COURT OF APPEALS
July 24, 2007, GR No. 149158-59

FACTS

The case arose from a labor dispute between Kimberly-Clark, its labor union UKCEO-PTGWO, andthe
wannabeofficial labor union KILUSAN-OLALIA.UKCEO-PTGWO and KILUSAN-OLALIA battled to be
the official labor union of the employees of Kimberly-Clark.Kimberly dismissed several employees which
triggered members of KILUSAN-OLALIA to stage a strike.Kimberly filed a complaint to declare the strike
of KILUSAN as illegal. NLRC ruled that the strike was illegal and the employment status of the officers of
KILUSAN are now gone.An MR was filed with the NLRC but was denied.Hence, this petition to the CA.

KILUSAN filed a petition for certiorari with the CA. CA dismissed KILUSANs petition on
procedural grounds (technicalities) a. Verification was signed only by KILUSAN-OLALIAs
president w/o SPA or board resolution.b.Copies filed were not legible.

ISSUE

Whether or not the CA erred in dismissing the petition for the reason that there was non-compliance with
the requirements of the rule on verification and certification against non-forum shopping?

RULING

Yes .Verification is a formal, not a jurisdictional requisite, as it is mainly intended to

secure an assurance that the allegations therein made are done in good faith or are true and
correct and not mere speculation.2.

Despite the fact that Ernesto Facundo, the union president, was not shown to have been duly authorized
to sign the verification on behalf of the other petitioners, the CA should not have been too strict in

24 | P a g e
the application of the Rules. Necessarily, Facundo, being the union president, was in a position
to verify the truthfulness and correctness of the allegations in the petition.3.

Further, the petition was signed by the unions lawyer, who had been authorized by a
majority of the petitionersto represent them and to sign on their behalf all pleadings and appeals
relative to the labor dispute.

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18. IN-N-OUT BURGER, INC., petitioner, vs.SEHWANI, INCORPORATED AND/OR
BENITAS FRITES, INC., respondents.
G.R. No. 179127 December 24, 2008

FACTS

Petitioner IN-N-OUT BURGER, INC., is a business entity incorporated under the laws of
California. It is a signatory to the Convention of Paris on Protection of Industrial Property and
the TRIPS Agreement. It is engaged mainly in the restaurant business, but it has never engaged
in business in the Philippines.

Respondents Sehwani, Incorporated and Benita Frites, Inc. are corporations organized
in the Philippines. Sometime in 1991, Sehwani filed with the BPTTT an application for the
registration of the mark IN N OUT (the inside of the letter O formed like a star). Its application
was approved and a certificate of registration was issued in its name on 1993. In 2000,
Sehwani, Incorporated and Benita Frites, Inc. entered into a Licensing Agreement, wherein the
former entitled the latter to use its registered mark, IN N OUT.

Sometime in 1997, In-N-Out Burger filed trademark and service mark applications with
the Bureau of Trademarks for the IN-N-OUT and IN-N-OUT Burger & Arrow Design. In 2000,
In-N-Out Burger found out that Sehwani, Incorporated had already obtained Trademark
Registration for the mark IN N OUT (the inside of the letter O formed like a star). Also in
2000, In-N-Out Burger sent a demand letter directing Sehwani, Inc. to cease and desist from
claiming ownership of the mark IN-N-OUT and to voluntarily cancel its trademark registration.
Sehwani Inc. did not accede to In-N-Out Burgers demand but it expressed its willingness to
surrender its registration for a consideration.

In 2001 In-N-Out Burger filed before the Bureau of Legal Affairs an administrative
complaint against the Sehwani, Inc. and Benita Frites, Inc. for unfair competition and
cancellation of trademark registration.
ISSUES

Whether or not the Intellectual Property Office (an administrative body) have jurisdiction
of cases involving provisions of the IPC (e.g. unfair competition).[1]
Whether or not there was unfair competition.

RULING

FIRST ISSUE: Yes, the IPO (an administrative body) has jurisdiction in cases involving
provisions of the IPC (e.g. unfair competition) due to the following reasons:
Section 10 of the Intellectual Property Code specifically identifies the functions of the
Bureau of Legal Affairs, thus:

Section 10. The Bureau of Legal Affairs.The Bureau of Legal Affairs shall have the following
functions:
10.1 Hear and decide opposition to the application for registration of marks; cancellation of
trademarks; subject to the provisions of Section 64, cancellation of patents and utility models,
and industrial designs; and petitions for compulsory licensing of patents;
10.2 (a) Exercise original jurisdiction in administrative complaints for violations of laws involving
intellectual property rights; Provided, That its jurisdiction is limited to complaints where the total
damages claimed are not less than Two hundred thousand pesos (P200,000): Provided, futher,
That availment of the provisional remedies may be granted in accordance with the Rules of
Court. Xxx
(vi) The cancellation of any permit, license, authority, or registration which may have been
granted by the Office, or the suspension of the validity thereof for such period of time as the
Director of Legal Affairs may deem reasonable which shall not exceed one (1) year;
Xxx
(viii) The assessment of damages;
Unquestionably, petitioners complaint, which seeks the cancellation of the disputed mark in the
name of respondent Sehwani, Incorporated, and damages for violation of petitioners intellectual
property rights, falls within the jurisdiction of the IPO Director of Legal Affairs.

26 | P a g e
 While Section 163 thereof vests in civil courts jurisdiction over cases of unfair
competition, nothing in the said section states that the regular courts have sole
jurisdiction over unfair competition cases, to the exclusion of administrative bodies.
Sections 160 and 170, which are also found under Part III of the Intellectual Property
Code, recognize the concurrent jurisdiction of civil courts and the IPO over unfair
competition cases.

These two provisions read:

Section 160. Right of Foreign Corporation to Sue in Trademark or Service Mark Enforcement
Action. Any foreign national or juridical person who meets the requirements of Section 3 of this
Act and does not engage in business in the Philippines may bring a civil or administrative
action hereunder for opposition, cancellation, infringement, unfair competition, or false
designation of origin and false description, whether or not it is licensed to do business in the
Philippines under existing laws.

Section 170. Penalties. Independent of the civil and administrative sanctions imposed by law, a
criminal penalty of imprisonment from two (2) years to five (5) years and a fine ranging from
Fifty thousand pesos (P50,000) to Two hundred thousand pesos (P200,000), shall be imposed
on any person who is found guilty of committing any of the acts mentioned in Section 155,
Section168, and Subsection169.1.
Based on the foregoing discussion, the IPO Director of Legal Affairs had jurisdiction to decide
the petitioners administrative case against respondents and the IPO Director General had
exclusive jurisdiction over the appeal of the judgment of the IPO Director of Legal Affairs.

SECOND ISSUE: Yes. The evidence on record shows that Sehwani Inc. and Benita Frites were
not using their registered trademark but that of In-n-Out Burger. Sehwani and Benita Frites are
also giving their products the general appearance that would likely influence the purchasers to
believe that their products are that of In-N-Out Burger. The intention to deceive may be inferred
from the similarity of the goods as packed and offered for sale, and, thus, an action will lie to
restrain unfair competition. The respondents frauduulent intention to deceive purchasers is also
apparent in their use of the In-N-Out Burger in business signages.
The essential elements of an action for unfair competition are (1) confusing similarity in the
general appearance of the goods and (2) intent to deceive the public and defraud a competitor.
The confusing similarity may or may not result from similarity in the marks, but may result from
other external factors in the packaging or presentation of the goods. The intent to deceive and
defraud may be inferred from the similarity of the appearance of the goods as offered for sale to
the public. Actual fraudulent intent need not be shown.
[1] IPO Director of Legal Affairs decision
In-N-Out Burger has legal capacity to sue in the Philippines because the latter is a
signatory of the Convention of Paris on Protection of Industrial Property.
IN-N-OUT Burger, Inc. right to use its tradename and mark to the exclusion of the
others
Respondents use of the petitioners mark was made in good faith and therefore they are
not guilty of unfair competition.
IPO Director Generals Decision
Respondents are guilty of unfair competition.
The following are ordered to be paid to In-N-Out Burger, inc.
Damages in the amount of PHP 212, 574.28
Exemplary damages in the amount of PHP 500,000
Attorneys fees and expenses of litigation in the amount of PHP 500,000
CA Decision
Regular courts, and not the BLA-IPO, have sole jurisdiction to hear and decide cases
involving provisions of the IPC.

27 | P a g e
 19. TOKIO MARINE MALAYAN INSURANCE COMPANY INCORPORATED, ALMA
PEALOSA, KIMIO HOSAKA, SUMITOMI NISHIDA, TERESITA H. QUIAMBAO and
ANTONIO B. LAPID, Petitioners, vs. JORGE VALDEZ, Respondent.

FACTS

Valdez filed a case against the company for non-payment of his commissions and bonuses
resulting to breach of contract. He then acquired the status of an indigent plaintiff from the
same court. On December 17, 1998, Valdez manifested before the trial court that he filed
various criminal complaints of estafa against the Company with the Office of the City
Prosecutor o fMakati City. The company then filed a motion to dismiss and argues that
Valdez engaged in forum shopping when he filed a subsequent criminal action against the
company which he failed to report to the RTC. The RTC and the CA denied the motion to
dismiss. Hence the case.

ISSUE

WON Valdez violated the prohibition of forum shopping.

RULING

Valdez did not commit forum shopping. We agree with the Court of Appeals that the
foregoing certification is a substantial compliance with Section 5 of Rule 7. Moreover, it
should be recalled that respondent manifested before the trial court on December 16, 1998
that he actually filed criminal cases against petitioners with the Office of the City Prosecutor
of Makati City.

Gatmaytan v. Court of Appeals describes forum shopping as the act of a litigant who
"repetitively availed of several judicial remedies in different courts, simultaneously or
successively, all substantially founded on the same transactions and the same essential
facts and circumstances, and all raising substantially the same issues eitherpending in, or
already resolved adversely by some other courtto increase his chances of obtaining a
favourabledecision if not in one court, then in another."Differently put, it is "the filing of
multiple suits involving the same parties for the same cause of action, either simultaneously
or successively, for the purpose of obtaining a favorable judgment."

The rationale against forum shopping is that a party should not be allowed to pursue
simultaneous remedies in two different courts as it constitutes abuse of court processes,
which tends to degrade the administration of justice, wreaks havoc upon orderly judicial
procedure, and adds to the congestion of the heavily burdened dockets of the court

28 | P a g e
21. DIGITAL MICROWAVE CORPORATION, petitioner,
vs.
COURT OF APPEALS and ASIAN HIGH TECHNOLOGY CORPORATION, respondents.
[G.R. No. 128550. March 16, 2000]

FACTS

On December 14, 1994, private respondent Asian High Technology Corp. filed a
complaint against petitioner Digital Microwave Corp. for a sum of money and damages before
the Regional Trial Court of Pasig city. Petitioner moved for the dismissal of the complaint. The
trial court denied the motion, as well as petitioners subsequent motion for reconsideration.

Petitioner then initiated a special civil action for certiorari before the Court of Appeals,
alleging grave abuse of discretion on the part of the trial court. However, the Court of Appeals
dismissed the petition for failure to comply with Revised Circular No. 28-91, as amended by
Administrative Circular No. 04-94. Said circular requires the petition filed before the Court of
Appeals to be accompanied by a sworn certification against forum shopping, signed by
petitioner himself. Petitioners certification was signed by counsel; the petition was, thus,
dismissed. Petitioner moved for a reconsideration of the dismissal and submitted a sworn
certification against forum shopping duly signed by one of its senior officers. The motion was,
however, denied, with the Court of Appeals stating that:

"In the present case, absent any compelling reason for petitioners failure to
comply, at first instance, with Revised Supreme Court Circular No. 28-91, the Court
cannot therefore, accept its subsequent compliance."

Petitioner contends that in the case of a corporation as petitioner, the certification against
forum shopping may be signed by a natural person authorized to do so and with knowledge of
the required facts. The authorized person may be anyone authorized by the corporation, not
necessarily an officer thereof. In such a case, petitioner argues, the counsel of record has the
authority to execute the certification on behalf of the corporation, particularly considering that
under the Rules of Court, counsels authority to represent his client is presumed. No written
power of attorney is required for counsel to appear for his client.

Aggrieved, petitioner is now before this Court seeking reversal of the ruling of the Court of
Appeals.

ISSUE

Whether or not in the case of a corporation as petitioner, the certification against forum
shopping may be signed by a natural person authorized to do so and with knowledge of the
required facts, who may be anyone authorized by the corporation, not necessarily an officer
thereof.

RULING

The reason the certification against forum shopping is required to be accomplished by

petitioner himself is because only the petitioner himself has actual knowledge of whether or not
he has initiated similar actions or proceedings in different courts or agencies.

29 | P a g e
 We disagree with petitioner that a corporation cannot possibly hope to comply with the
requirement laid down by Revised Circular No. 28-91 because it is a juridical entity and not a
natural person. If this were so, then it would have been impossible for a corporation to
do anything at all. Needless to say, this is the reason why corporations have directors and
officers, to represent it in its transactions with others. The same is true for the certification
against forum shopping. It could easily have been made by a duly authorized director or officer
of the corporation. That petitioner did not in the first instance comply with the requirement of
revised Circular No. 28-91 by having the certification against forum shopping signed by one of
its officers, as it did after its petition before the Court of Appeals had been dismissed, is beyond
our comprehension. Regrettably, substantial compliance will not suffice in a matter involving
strict observance as provided for in Circular No. 28-91. The attestation contained in the
certification on non-forum shopping requires personal knowledge by the party who executed the
same. To merit the Courts consideration, petitioners here must show reasonable cause for
failure to personally sign the certification. The petitioners must convince the court that the
outright dismissal of the petition would defeat the administration of justice.

In this case, petitioner has not adequately explained its failure to have the certification
against forum shopping signed by one of its officers.

30 | P a g e
22. MICHAEL C. GUY, petitioner, vs. HON. COURT OF APPEALS, HON. SIXTO MARELLA,
JR.,
Presiding Judge, RTC, Branch 138, Makati City and minors,
KAREN DANES WEI and KAMILLE DANES WEI, represented by their mother, REMEDIOS
OANES, respondents.
[G.R. No. 163707, September 15, 2006]

FACTS

On June 13, 1997, private respondent-minors Karen Oanes Wei and Kamille Oanes Wei,
represented by their mother Remedios Oanes, filed a petition for letters of administration before
the Regional Trial Court. Attached to private respondents petition was a Certification Against
Forum Shopping signed by their counsel, Atty. Sedfrey A. Ordoez.

The other heirs of Sima Wei filed a Joint Motion to Dismiss on the ground that the
certification against forum shopping should have been signed by private respondents and not
their counsel. They contended that Remedios should have executed the certification on behalf
of her minor daughters as mandated by Section 5, Rule 7 of the Rules of Court.

The Regional Trial Court denied the Joint Motion to Dismiss, applying a liberal
application of the rules, the trial court also rejected petitioners objections on the certification
against forum shopping. Petitioner moved for reconsideration but was denied. He filed a petition
for certiorari before the Court of Appeals which affirmed the orders of the Regional Trial Court.
The Court of Appeals denied petitioners motion for reconsideration, hence, this petition.

Petitioner argues that the Court of Appeals disregarded existing rules on certification
against forum shopping and contends that their counsels certification can be considered
substantial compliance with the rules on certification of non-forum shopping.

ISSUE

Whether or not private respondents petition should be dismissed for failure to comply
with the rules on certification of non-forum shopping.

RULING

The petition lacks merit.

Rule 7, Section 5 of the Rules of Court provides that the certification of non-forum
shopping should be executed by the plaintiff or the principal party. Failure to comply with the
requirement shall be cause for dismissal of the case. However, a liberal application of the rules
is proper where the higher interest of justice would be served. In Sy Chin v. Court of
Appeals, we ruled that while a petition may have been flawed where the certificate of non-forum
shopping was signed only by counsel and not by the party, this procedural lapse may be
overlooked in the interest of substantial justice. So it is in the present controversy where the
merits of the case and the absence of an intention to violate the rules with impunity should be
considered as compelling reasons to temper the strict application of the rules.

31 | P a g e
23. SY CHIN, SY HEN, TANG TUBI, TANG ANDRES, TANG FELINO, NIEVES KE TEK TANG,
ANNIE KE TEK TANG, PENNIE CHUA TANG, LENIE TANG, ZENNIE KE TEK TANG,
FELICIA KE TEK TANG, ONG SO HUA, JUDY ALONZO, EDUARDO ALONZO and
ALFREDO ALONZO, petitioners,
vs.
THE COURT OF APPEALS, TANG CHING HENG & CO., TANG CHIN HENG AND WILLIAM
TANG also known as Tang Kong Sia, represented by Tang Chin Heng, respondents.
[G.R. No. 136233, November 23, 2000]

FACTS

The instant case stemmed from a petition for dissolution and liquidation of the
partnership filed by the petitioners with the Securities and Exchange Commission (SEC).
Brothers Tang Chin, Feliciano Tang, Ricardo Alonzo, Tang Chin Heng and William Tang formed
a partnership under the name of Tan Chin Heng & Company. The partnership had a term of
existence of 25 years counted from January 1,1953. After the death of Tang Chin, Feliciano
Tang and Tang Kong Suy, conflicts arose from their heirs (herein petitioners) and the surviving
partners (private respondents) because of the companys failure to render an accounting and
non-distribution of profits. In order to settle their differences, the parties agreed to refer the
matter to the Federation of Filipino Chinese Chamber of Commerce. On March 11, 1975, an
agreement was executed.

The petitioners moved for a partial reconsideration of the decision. They averred that the
properties should be divided equally among the partners or their heirs and assigns in
accordance with the 1975 Agreement but said motion was denied by the hearing officer.

The petitioners filed a Notice of Appeal but this was not perfected due to their failure to
file the Memorandum on Appeal and to pay the docket fees within the period provided for by the
Revised Rules of Procedure of the SEC.

Consequently, a motion for execution was filed by the private respondents which was
granted by the hearing officer. Petitioners filed an opposition thereto asserting that there was a
need to check/investigate the information that some of the partnership properties were already
adjudicated to Feliciano Tangs heirs in an Intestate Proceeding before the then Court of First
Instance of Manila but the same was denied.

Thus, petitioners went up to the Commission En Banc. Private respondents filed an

opposition asserting that the SEC no longer had jurisdiction over the case considering that the
decision of the hearing officer had already become final and executory.

The SEC, nonetheless, took cognizance of the case and disposed it in resolving to
remand the case to the department of origin for proper action and all other motions filed in
relation therewith referred to the Securities Investigation and Clearing Department of its
disposition.
A Motion for Reconsideration/Clarification was filed by the private respondents but this was
denied by the SEC Commission en banc.

A petition for certiorari was consequently filed with the Court of Appeals assailing the SEC
decision. The CA ruled that the SEC acted in excess of its jurisdiction. The subsequent motion
for reconsideration was, likewise, denied. Hence, this petition.

ISSUE

32 | P a g e
 Whether or not the CA acquire jurisdiction on private respondents petition for
certiorari;Whether or not the CA erred when it treated private respondents petition for certiorari
as an appeal from the decision of the Securities And Exchange Commission (SEC).

RULING

There is no merit in the petition.

The respondent court did not commit reversible error when it ruled that it was not legally
justifiable for the SEC to take cognizance of petitioners appeal to the Order granting the Motion
for Execution as a direct attack against the orders of the hearing officer, the purpose of which is
to annul the same.

Section 3, Rule XVI of the Revised Rules of Procedure of the SEC states:

Section 3. How Appeal is Taken: When Perfected Appeal may be taken by

filing with the Hearing Officer who promulgated the decision, order or ruling within
thirty (30) days from notice thereof, and serving upon the adverse party, notice of
appeal and a memorandum on appeal and paying the corresponding docket fee
therefor. The appeal shall be considered perfected upon the filing of the
memorandum on the appeal and payment of the docket fee within the period
hereinabove fixed. (Amended).

The appeal to the SEC en banc was not perfected and the decision has become final and
executory. There was, therefore, nothing for the SEC en banc to review. The respondent
Commission took cognizance of the case and acted upon it as a petition for review on certiorari
under Sec. 1, Rule XII of its Rules. This is for certain because aside from an appeal treated in
Rule XVI and petition for review on certiorari under Rule XV, there is no other way to elevate a
decision or order of a hearing officer to the Commission en banc.

Sec. 1, Rule XV of the SEC Rules in reference to a petition for certiorari with the
Commission en banc requires that there must be a verified petition alleging facts with certainty
and praying that judgment be rendered annulling or modifying the questioned order or ruling as
the law requires. Sec. 2 thereof requires the payment of a docket fee. In the case at bench,
there was no such a verified petition nor payment of docket fees. This Court rules that under the
circumstances, the Commission en banc acted without jurisdiction or at least in excess of
jurisdiction when it rendered the Decision on December 6, 1995 and Resolution dated July 25,
1997.

It is the well-established rule that the perfection of an appeal in the manner and within
the period prescribed by law is not only mandatory but jurisdictional and the failure to perfect the
appeal has the effect of rendering the judgment final and executory. As such, execution shall
issue as a matter of right to the winning party. Rule 39, Section 1 of the 1997 Rules on Civil
Procedure explicitly provides that 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. Pursuant to this rule, it was proper for
the Hearing Officer to have granted the respondents motion for a writ of execution on January 5,
1995 after the petitioners have failed to perfect their appeal.
It must be noted that petitioners appeal to the Commission en banc was an appeal on
the order of execution which is not permissible under the rules. The order granting the motion
for writ of execution is not appealable as provided under Rule 41, Section 1 which states:

33 | P a g e
 SECTION 1. Subject of appeal. An appeal may be taken from a judgment or
final order that completely disposes of the case, or of a particular matter therein
when declared by these Rules to be appealable.

No appeal may be taken from:

xxx

(f) An order of execution.

Clearly, therefore, the SEC committed grave abuse of discretion tantamount to lack of
jurisdiction when it entertained petitioners appeal and treated it as a direct attack against the
orders of the hearing officer. This in effect re-opened the case that has already become final
and executory.

34 | P a g e
24. SARI-SARI GROUP OF COMPANIES, INC. (formerly MARIKO NOVEL WARES, INC.),
WARES, INC.), petitioner,
vs.
PIGLAS KAMAO (Sari-Sari Chapter), RONNIE S. TAMAYO, JOSE DEL CARMEN,
JOCYLENE PADUA, VICKY BERMEO and ELIZABETH MATUTINA, Respondents.
[G.R. No. 164624, August 11, 2008]

FACTS

The petitioner began its retail outlet operations under the name Sari-Sari in the basement of
Robinsons Galleria in Quezon City. The respondents, as employees, organized a union known
as Piglas Kamao (Sari-Sari Chapter). Respondents filed a petition for certification elections with the
Department of Labor and Employment (DOLE) claiming that petitioner,interfered with the formation of the
union and later filed an unfair labor practice case with the Labor Arbiter (LA) against the petitioner for
harassment, coercion, and interference with the workers right to self-organization.

The LA rendered his decision dismissing the complaint for illegal dismissal, unfair labor practices
and damages for lack of merit. However, the LA ordered the petitioner to pay the respondents separation
pay and proportionate 13th month pay. The decision was appealed to the National Labor Relations
Commission (NLRC).The NLRC affirmed the decision of the LA but dismissed the claims
of Bermeo, Matutina and Padua as they had executed quitclaims. Respondents filed a Motion for
Reconsideration which was denied by the NLRC. Respondents then appealed to the CA through Review
on Certiorari under Rule 45 of the Rules of Court.

The CA took cognizance to the case insofar as the four other alleged petitioners therein
were concerned, only Jose Del Carmen signed and verified the petition and ruled that petitioner
failed to discharge its burden of submitting competent proof to show the irreversible substantial losses it
suffered warranting the closure of the store.Anent the issue of unfair labor practice, the CA ruled that such
was a question of fact that was beyond the ambit of the present recourse for certiorari.The CA denied
petitioners motion for reconsideration.

ISSUE

Whether or not the court of appeals committed serious error in granting respondents
petition for certiorari and in setting aside the findings of both the NLRC and the LA a quotaking
cognizance of the petition insofar as the four other alleged petitioners therein were concerned,
considering only Jose Del Carmen signed and verified the petition.

RULING

Section 1 of Rule 65 in relation to Section 3 of Rule 46of the Rules of Court requires that
a petition for review filed with the CA should be verified and should contain a certificate of non-
forum shopping.

A distinction must be made between non-compliance with the requirements for

Verification and noncompliance with those for Certification of Non-Forum Shopping. As to
Verification, non-compliance therewith does not necessarily render the pleading fatally
defective; hence, the court may order a correction if Verification is lacking; or act on the pleading
although it is not verified, if the attending circumstances are such that strict compliance with the
Rules may be dispensed with in order that the ends of justice may thereby be served.

A pleading which is required by the Rules of Court to be verified may be given due
course even without a verification of the circumstances warranting the suspension of the rules in
the interest of justice. When circumstances warrant, the court may simply order the correction of

35 | P a g e
unverified pleadings or act on them and waive strict compliance with the rules in order that the
ends of justice may thereby be served. Moreover, many authorities consider the absence of
Verification a mere formal, not jurisdictional defect, the absence of which does not of itself justify
a court in refusing to allow and act on the case.

In Torres v. Specialized Packing Development Corporation, the problem was not lack of
Verification, but the adequacy of one executed by only two of the twenty-five petitioners, similar
to the case at bar. The Court ruled:

These two signatories are unquestionably real parties in interest, who

undoubtedly have sufficient knowledge and belief to swear to the truth of the
allegations in the Petition. This verification is enough assurance that the matters
alleged therein have been made in good faith or are true and correct, not merely
speculative. The requirement of verification has thus been substantially complied
with.

Based on the foregoing, the lone Verification of respondent Jose del Carmen is sufficient
compliance with the requirements of the law.

On the other hand, the lack of a Certificate of Non-Forum Shopping, unlike that of
Verification is generally not curable by the submission thereof after the filing of the petition. The
submission of a certificate against forum shopping is thus deemed obligatory, albeit not
jurisdictional.

The rule on certification against forum shopping may, however, be also relaxed on
grounds of substantial compliance or special circumstances or compelling reasons.

As general rule, a petition for review on certiorari under Rule 45 of the Rules of Court is
limited to questions of law. However, this rule admits of exceptions, such as in this case where
the findings of the LA and the NLRC vary from the findings of the CA. As a general rule,
in certiorari proceedings under Rule 65 of the Rules of Court, the CA does not assess and
weigh the sufficiency of evidence upon which the LA and the NLRC based their conclusion. The
query in the proceeding before the CA is limited to the determination of whether or not the
NLRC acted without or in excess of its jurisdiction or with grave abuse of discretion in rendering
its decision. However, as an exception, the appellate court may examine and measure the
factual findings of the NLRC if the same are not supported by substantial evidence. We find this
exception applicable to the case at bar.

36 | P a g e
25. MEDIAN CONTAINER CORPORATION, petitioner,
vs.
METROPOLITAN BANK AND TRUST COMPANY, respondent.
[G.R. No. 166904, August 11, 2008]

FACTS

The respondent filed a complaint for sum of moneybefore the RTC of Makati against the
petitioner MCC and the spouses Carlos T. Ley and Fely C. Ley, Vice President/Treasurer of
MCC for failure of MCC to settle the amount of more than P5,000,000 representing the
outstanding balance of loans contracted by MCC, represented by Fely C. Ley.

Summonses addressed to the defendants were issued on July 17, 2003 by Branch 22 of
the Makati RTC. In the August 20, 2003 Process Servers Return, no date of filing of which is
indicated, the process server stated that Summons was served on MCC on August 7, 2003 at its
given address upon one Danilo Ong, below which signature the process server wrote the words
General Manager.

In Servers Return, the process server stated that he was unable to serve the Summons
upon the spouses Ley at their given address as they were no longer residing there. Summons
was eventually served upon the spouses Ley.

Petitioner filed a motion to dismissthe complaint on the grounds of defective service of

Summons over it and defective verification and certificate against non- forum shopping. The
spouses Ley, upon the impression that the Summons was also served upon them through Ong,
also filed a motion to dismiss on the same grounds as those of MCCs.

Respecting its claim of defective verification and certificate of non-forum shopping, MCC
questioned the authority of one Atty. Alexander P. Mendoza to accomplish the same on behalf of
Metrobank.

The trial court denied MCCs Motion to Dismiss. As for the spouses Leys motion to
dismiss, the trial court denied it for being premature and the trial court denied too the movants
respective motions for reconsideration. The Process Servers Return dated April 12, 2004states
that alias Summons was served on the spouses Ley on March 31, 2004.

Only MCC went to the Court of Appeals via Petition for Certiorari to assail the Order of
the trial court denying its Motion to Dismiss and its Motion for Reconsideration, arguing in the
main that the trial court acted with grave abuse of discretion considering that the Complaint
failed to comply with Rule 7, Section 5 of the 1997 Rules of Civil Procedure, the Verification and
Certification thereof having been signed and executed by one who had no authority to bind
respondent metrobank at the time of such signing and execution.

ISSUE

Whether or not a complaint should properly be dismissed for failure to comply with rule
7, Section 5 of the 1997 rules of civil procedure, the verification and certification portion thereof
having been signed and executed by one who had no authority to bind the party-plaintiff at the
time of such signing and execution; whether full compliance with rule 14, section 11 of the 1997
rules of civil procedure, or the mere intention of the process server to serve the summons on the
intended recipient, that determines the validity of service of summons when the defendant is a
domestic private corporation; and whether the actual receipt of the summons, or the valid
service of summons in accordance with the rules, that vests the trial court with jurisdiction over
the person of the defendant.

RULING

37 | P a g e
 Verification is a formal, not jurisdictional, requirement. It is simply intended to secure an
assurance that the allegations in the pleading are true and correct, and that the pleading is filed
in good faith. That explains why a court may order the correction of the pleading if verification is
lacking, or act on the pleading although it is not verified, if the attending circumstances are such
that strict compliance with the rules may be dispensed with in order to serve the ends of justice.

As for the required certification against forum shopping, failure to comply therewith is
generally not curable by its submission subsequent to the filing of the petition norby
amendment, and is cause for its dismissal. A certification against forum shopping signed by a
person on behalf of a corporation which is unaccompanied by proof that the signatory is
authorized to file the petition is generally likewise cause for dismissal. In several cases,
however, this Court relaxed the application of these requirements upon appreciation of
attendant special circumstances or compelling reasons.

In the instant case, the merits of petitioners case should be considered special
circumstances or compelling reasons that justify tempering the requirement in regard to the
certificate of non-forum shopping. Moreover, in Loyola, Roadway, and Uy, the Court
excused non-compliance with the requirement as to the certificate of non-forum shopping. With
more reason should we allow the instant petition since petitioner herein did submit a certification
on non-forum shopping, failing only to show proof that the signatory was authorized to do
so. That petitioner subsequently submitted a secretarys certificate attesting that Balbin was
authorized to file an action on behalf of petitioner likewise mitigates this oversight.

In the case at bar, simultaneous with the filing of the complaint, Metrobank submitted both
a certification of non-forum shopping and proof that Atty. Mendoza who signed it on its behalf
was authorized to do so. The proof of authorization of Atty. Mendoza was dated later than the
date of his signing of the certification of non-forum shopping, however, thus giving the
impression that he, at the time he affixed his signature, was not authorized to do so. The
passing on June 3, 2004 of a Board Resolution of authorization before the actual filing on June
23, 2004 of the complaint, however, is deemed a ratification of Atty. Mendozas prior execution
on May 28, 2004 of the verification and certificate of non-forum shopping, thus curing any
defects thereof. As for MCCs contention that the summons addressed to it was served on a
wrong party, hence, the trial court did not acquire jurisdiction over it, the same fails.

A certificate of service by a proper officer is prima facie evidence of the facts set out
therein, and the presumption arising from the certificate can only be overcome by clear and
convincing evidence.

To disprove that Ong was neither its General Manager or an employee of MCC at the time
of the service of summons, MCC submitted before the trial court a photocopy of his purported
July 31, 2003 resignation letter and a photocopy of an August 1, 2003 Quitclaim purportedly
signed by him. MCC did not present the original copies of these documents.

38 | P a g e
26. ALFREDO REMITERE V., ET AL vs. REMEDIOS MONTINOLA VDA. DE YULO , ET AL
G.R. NO.G.R. NO. L-19751, FEBRUARY 28, 1966

FACTS:

Gregorio Remitere was declared the registered owner of two questioned Lots by then
CFI of Negros Occidental. When he died, CFI appointed his wife as administratrix of his estate,
among which are the two lots in question. During this period, the provincial sheriff of Negros
Occidental, conducted a public auction sale over the said parcels of land, and on the same day,
he issued thereof a deed of sale in favor of Mariano Yulo. This lead to a series of cancellations
of the Certificate of Titles and finally to the registration of the TCT by virtue of deeds of sales in
the name of Remedios Montinola Vda.de Yulo. Hence, the plaintiffs filed a complaint against the
defendants and the Register of Deeds of Negros Occidental. The complaint prayed that the
defendants be ordered to reconvey the two lots in question to the plaintiffs and that the
defendant Register of Deeds be ordered to cancel the certificates of titles in the name of the
defendant and to issue new ones in the names of the plaintiffs. The defendants-appellees filed a
motion to dismiss the complaint on the grounds that the complaint does not state a cause of
action (and, that even assuming that a cause of action exists, the same has already prescribed.)
The lower court dismissed the complaint precisely on the grounds relied upon by the
defendants-appellees. Hence this appeal.

ISSUE:

Whether or not the complaint states a cause of action.

RULING:

No. Supreme Court held that no ultimate facts which may constitute the basis of plaintiffs
rights which had been violated are alleged. Neither are there allegations of ultimate facts
showing acts or omissions on the part of the defendants which constitute a violation of the rights
of plaintiffs. Hence, the lower court had correctly ruled that the complaint in the present case
does not narrate facts that constitute a cause of action.

RATIONALE

The lack of a cause of action as a ground for dismissal must appear on the face of the
complaint, and to determine whether the complaint states a cause of action, only the facts
alleged therein, and no other, should be considered. It is not stated anywhere in the complaint
why the sale at public auction was absolutely void, nor were there stated any particular facts or
circumstances upon which the alleged nullity of the sale or transaction is predicated. The
averment that "the public sale . . . was and still is absolutely a void sale, and certainly did not
pass titles and ownerships of said lots, starting from its primitive owner, now being represented
by the plaintiffs herein, as surviving heirs thereto, until it reaches the possession by the
defendants . . ." is a conclusion of law or an inference from (or conclusion of) facts not stated in
the pleading. A pleading should state the ultimate facts essential to the rights of action or
defense asserted, as distinguished from a mere conclusion of fact, or conclusion of law. An
allegation that a contract is valid or void, as in the instant case, is a mere conclusion of law. Not
being statements of ultimate facts which constitute the basis of a right of the plaintiffs, nor are
they statements of ultimate facts which constitute the wrongful acts or omissions of the
defendants that violated the right of the plaintiffs the allegations of the complaint in the present
case have not fulfilled the requirements of the Rules of Court that the complaint should contain
a "concise statement of the ultimate facts constituting the plaintiffs cause or causes of action."

39 | P a g e
27. PHILIPPINE STOCK EXCHANGE, INC. vs. THE MANILA BANKING CORPORATION et.
al.,
G.R. No. 147778
July 23, 2008

FACTS:

In 1980, Manila Bank obtained seat No. 97 in Manila Stock Exchange from Recio as
payment for indebtedness, but MSE refused to register the Seat under Manila Bank as only its
by-laws allow only individuals or corporations engaged primarily in the business of stocks and
bonds brokers and dealers in securities to be a member or to hold a seat in the MSE and the
Manila Bank and MSE agreed that an issuance of an Acknowledgment Letter (AL) recognizing
the legal or naked ownership of, or proprietary right of Manila Bank over MSE Seat No. 97. AL
was issued in 1996.

However, 2 years prior (1994) to the issuance of the AL, MSE merged with Makati Stock
Exchange forming the Phil. Stock Exchange (PSE). In 1994, PSE issued to Recio a certificate of
membership Member No. 29. Manila Bank sought the PSE to rectify the listing of Recio as a
member and that it is actually Manila Bank which owns proprietary rights over PSE Seat No. 29
PSE refused repeatedly, hence, Manila Bank filed a Petition for Mandamus with Claim for
damages.

PSE filed Motion to Dismiss on the ground that performance of a duty which required the use of
discretion cannot be compelled by Mandamus. SEC en banc and CA dismissed PSEs motion to
dismiss. PSE then filed a petition for certiorari.

ISSUE:

Whether or not Manila Banks petition stated a cause of action against petitioner PSE.

Whether or not the remedy of mandamus was proper.

RULING:

A careful study of the petition of respondent Manila Bank reveals that the factual allegations
therein sufficiently make out a case of fraud, misrepresentation and bad faith against petitioners.

Among the salient allegations were:

(1) The previous MSE had already recognized the legal or naked ownership to MSE Seat No.
97, yet PSE unjustifiably refused to recognize the corresponding seat in the PSE after the
merger;

(2) Manila Banks predecessor-in-interest, Mr. Roberto K. Recio was issued a Certificate of
Membership by the PSE;

(3) Mr. Recio was consistently listed as member of the PSE in the PSEs Monthly Report.

These allegations would suffice to constitute a cause of action against petitioners.

General rule is that performance of an official act or duty, which necessarily involves the
exercise of discretion or judgment, cannot be compelled by mandamus. Except where there is
gross abuse of discretion, manifest injustice, or palpable excess of authority.

40 | P a g e
28. PHILIPPINE BANK OF COMMUNICATIONS and ROMEO G. DELA ROSA, Petitioners,
vs. ELENITA B. TRAZO,
G.R. No. 165500 August 30, 2006

FACTS:

Petitioner Philippine Bank of Communications (PBCOM), respondent Elenita B. Trazo opened a

payroll account with China Banking Corporation (CBC) under Current Account No. 101-003921-
9. On December 29, 1997, petitioner Romeo G. dela Rosa, PBCOM assistant vice-president,
instructed CBC to credit all accounts under its payroll with the medical and clothing subsidy for
the year 1998. Respondent Trazo resign from petitioner PBCom on 31 December 1997.

Petitioner dela Rosa wrote William Lim, CBC senior assistant vice-president, on 5 January 1997
authorizing/directing CBC/Lim to debit the sum of P7,000.00 from respondent Trazos current
account. Respondent Trazo drew checks against her current account in favor of Bliss
Development Corporation (BDC) and the House of Sara Lee Phils., Inc.However, the checks
were dishonored by CBC due to insufficiency of funds, which was occasioned by the P7,000.00
debit from her current account.

Respondent Trazo instituted an action for damages against PBCOM, dela Rosa, CBC, and Lim
before the Regional Trial Court (RTC) of Quezon City (Branch 79) averring that they had no
authority to debiting her account.

On June 16, 1998, CBC and Lim filed a Motion to Dismiss the case on the ground of improper
venue. On 24 June 1998, PBCOM and dela Rosa filed their own Motion to Dismiss on the
ground that the complaint failed to state a cause of action.

RTC RULING: PREMISES CONSIDERED, the case against defendants China Bank and
William Lim is DISMISSED on the ground of improper venue. The case against defendants
Philippine Bank of Communications and Romeo G. dela Rosa is DISMISSED for lack of cause
of action.

CA RULING: WHEREFORE, the omnibus order dated October 7, 1998 of the Regional Trial
Court of Quezon City (Branch 79) is REVERSED and SET ASIDE and the complaint
REINSTATED. Appellant is given ten (10) days from notice of finality of this decision within
which to amend the complaint.

ISSUE:

Whether or not the allegations of the complaint are sufficient to constitute a cause of action.

RULING:

Yes. In the case at bar, the allegations in the complaint verily show a cause of action. We
carefully scrutinize the allegations in the Complaint. It provides that defendants PBCOM and
ROMEO G. DE LA ROSA had no cause nor reason to unilaterally order the debitting (sic) of
plaintiffs account as it was her personal property and not of defendant PBCOM. The Complaint
also described the action of all defendants, including petitioners PBCOM and dela Rosa, as
unjust and illegal, and done in a wanton, reckless and oppressive manner.

The cause of action stated in the Complaint, therefore, consists in (1) a right in favor of the
plaintiff, which in this case consists of a right to her personal property; (2) an obligation on the
part of the named defendant to respect her right to her personal property; and (3) an act of such
defendant violative of the right of the plaintiff, which in this case is the order by petitioners to
CBC and Lim to debit respondent Trazos account, an act which petitioners allege to have
caused them damage.

WHEREFORE, the instant petition is DENIED for lack of merit.

41 | P a g e
DOCTRINE:

A cause of action exists if the following elements are present, namely:

(1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is
created;
(2) an obligation on the part of the named defendant to respect or not to violate such right; and
(3) an act or omission on the part of such defendant violative of the right of the plaintiff or
constituting a breach of the obligation of the defendant to the plaintiff for which the latter may
maintain an action for recovery of damages

42 | P a g e
29. SPOUSES NAPOLEON L. GAZA and EVELYN GAZA, et. al. vs. RAMON J. LIM and
AGNES J. LIM
G.R. No. 126863. January 16, 2003

FACTS:

Napoleon Gaza purchased a parcel of from Angeles Vda. de Urrutia. The Register of
Deeds of Lucena City then cancelled the latters title and issued Transfer Certificate in the name
of Napoleon Gaza.

Napoleon Gaza and his wife constructed a huge lumber shed on the property and installed
engines, machinery and tools for a lumber mill. They also utilized a portion of the property as
storage for copra. In 1975, they ceased engaging in business. They padlocked the gates of the
property, leaving it to the care of Numeriano Ernesto. When he died, spouses Gaza designated
Renato Petil as the new caretaker of the land.

On the other hand, Ramon and Agnes Lim, both half-siblings of Napoleon Gaza, claimed that
they have used the same lot for their lumber and copra business since 1975, as shown by
Lumber Certificate of Registration, PCA Copra Business Registration No. 6265/76 and Mayor's
Permit dated December 31, 1976. Sometime in November 1993, they designated Emilio Herrera
as caretaker of the property.

On November 28, 1993, the padlock of the main gate was destroyed. According to Napoleon
Gaza, the siblings Ramon and Agnes Lim and Emilio Herrera, entered the property by breaking
the lock of the main gate. Thereafter, they occupied a room on the second floor of the
warehouse without the consent of Renato Petil who was then outside the premises.

For their part, Ramon and Agnes Lim maintain that on November 28, 1993, spouses Gaza
detained Emilio Herrera and his daughter inside the compound and destroyed the padlocks of
the gates. Thereafter, said spouses forcibly opened Agnes Lim's quarters at the second floor of
the warehouse and occupied it.

Ramon and Agnes Lim filed with the Municipal Trial Court of Calauag, Quezon an action for
forcible entry against spouses Napoleon and Evelyn Gaza. Spouses Gaza filed with the same
court their answer with compulsory counterclaim.
The MTC dismissed the complaint and counterclaim.

On appeal, the Regional Trial Court, Branch 63, Calauag, Quezon, affirmed the MTC Decision
with modification. Ramon and Agnes Lim, then, filed with the Court of Appeals a petition for
review. In its Decision, the Court of Appeals reversed and set aside the Decision of the RTC.
Thus, Spouses Gaza filed a motion for reconsideration but was denied. Hence, they filed with
this Court the present petition for review on certiorari ascribing to the Court of Appeals the
following errors:

THE COURT OF APPEALS ERRED IN FAILING TO RULE THAT THERE WAS NO IMPLIED
ADMISSION ON THE PART OF PETITIONERS THAT PRIVATE RESPONDENTS HAD BEEN
IN PRIOR AND ACTUAL PHYSICAL POSSESSION OF SUBJECT PROPERTY SINCE 1975.
ISSUE:

Whether or not the non-denial in the answer of the allegations in the complaint would amount to
admittance.

RULING:

Section 11, Rule 8 of the 1997 Rules of Civil Procedure, as amended, provides that material
averments in the complaint, other than those as to the amount of unliquidated damages, shall
be deemed admitted when not specifically denied. Section 10 of the same Rule provides the
manner in which specific denial must be made: "Section 10. Specific Denial. A defendant must
specify each material allegation of fact the truth of which he does not admit and, whenever
practicable, shall set forth the substance of the matters upon which he relies to support his
denial. Where a defendant desires to deny only a part of an averment, he shall specify so much
of it as is true and material and shall deny only the remainder. Where a defendant is without

43 | P a g e
knowledge or information sufficient to form a belief as to the truth of a material averment made
in the complaint, he shall so state, and this shall have the effect of a denial."

Three (3) modes of specific denial are contemplated by the above provisions, namely: (1) by
specifying each material allegation of the fact in the complaint, the truth of which the defendant
does not admit, and whenever practicable, setting forth the substance of the matters which he
will rely upon to support his denial; (2) by specifying so much of an averment in the complaint as
is true and material and denying only the remainder; (3) by stating that the defendant is without
knowledge or information sufficient to form a belief as to the truth of a material averment in the
complaint, which has the effect of a denial.

The Court of Appeals held that spouses Gaza, petitioners, failed to deny specifically, in their
answer, paragraphs 2, 3 and 5 of the complaint for forcible entry quoted as follows:

2. That plaintiffs are the actual and joint occupants and in prior continuous physical possession
since 1975 up to Nov. 28, 1993 of a certain commercial compound described as follows:

A certain parcel of land situated in Bo. Sta. Maria, Calauag, Quezon. Bounded on the N., & E.,
by Julian de Claro; on the W., by Luis Urrutia.Containing an area of 5,270 square meters, more
or less.Declared under Ramon J. Lims Tax Dec. No. 4576 with an Ass. Value of P26,100.00.

3. That plaintiffs have been using the premises mentioned for combined lumber and
copra business. Copies of plaintiffs Lumber Certificate of Registration No. 2490 and PCA Copra
Business Registration No. 6265/76 are hereto attached as Annexes A and B respectively; the
Mayors unnumbered copra dealers permit dated Dec. 31, 1976 hereto attached as Annex C;

5. That defendants invasion of plaintiffs premises was accomplished by illegally

detaining plaintiffs caretaker Emilio Herrera and his daughter inside the compound, then
proceeded to saw the chain that held plaintiffs padlock on the main gate of the compound and
then busted or destroyed the padlock that closes the backyard gate or exit. Later, they forcibly
opened the lock in the upstairs room of plaintiff Agnes J. Lims quarters and defendants
immediately filled it with other occupants now. Copy of the caretakers (Emilio Herrera)
statement describing in detail is hereto attached as Annex D;

The Court of Appeals then concluded that since petitioners did not deny specifically in their
answer the above-quoted allegations in the complaint, they judicially admitted that Ramon and
Agnes Lim, respondents, were in prior physical possession of the subject property, and the
action for forcible entry which they filed against private respondents (spouses Gaza) must be
decided in their favor. The defense of private respondents that they are the registered owners of
the subject property is unavailing.

44 | P a g e
30. National Marketing Corporation vs. Federation of United NAMARCO Distributors Inc.
G.R. No. L-22578 January 31, 1973

FACTS:

NAMARCO and the FEDERATION entered into a Contract of Sale. NAMARCO was
authorized to import the following items with the corresponding dollar value totalling
$2,001,031.00. Among the goods covered by the Contract of Sale were 2,000 cartons of PK
Chewing Gums, 1,000 cartons of Juicy Fruit Chewing Gums, 500 cartons of Adams Chicklets,
168 cartons of Blue Denims, and 138 bales of Khaki Twill.

To insure the payment of those goods by the FEDERATION, the NAMARCO accepted
three domestic letters of credit. FEDERATION received from the NAMARCO the 2,000 cartons
of PK Chewing Gums, 1,000 cartons of Juicy Fruit Chewing Gums, and 500 cartons of Adams
Chicklets, all with a total value of P277,357.91, under the condition that the cost thereof would
be paid in cash through PNB Domestic L/C No. 600570; and on February 20, 1960, the
FEDERATION received from the NAMARCO the 168 cartons of Blue Denims and 183 bales of
Khaki Twill, with a total value of P135,891.82 and P197,804.12, respectively, under the condition
that the cost thereof would be paid in cash through PNB Domestic L/C Nos. 600606 and
600586, respectively.

FEDERATION filed a complaint against the NAMARCO for specific performance and
damages, alleging that after the NAMARCO had delivered a great portion of the goods listed in
the Contract of Sale, it refused to deliver the other goods mentioned in the said contract.

In its answer, NAMARCO has refused and declined to accept the cash payments by the
FEDERATION. According to NAMARCO, the Contract of Sale was not validly entered into by
the NAMARCO and, therefore, it is not bound by the provisions thereof. NAMARCO tried to
encash the three domestic letters but PNB denied. The common condition of the three letters of
credit is that the sight drafts drawn on them must be duly accepted by the FEDERATION before
they will be honored by the Philippine National Bank. But the said drafts were not presented to
the FEDERATION for acceptance. NAMARCO demanded from the FEDERATION the payment
of the total amount of P611,053.35, but the latter failed and refused to pay the said amount. CFI
Manila promulgated its decision ordering the NAMARCO to specifically perform its obligation in
the Contract of Sale, by delivering to the FEDERATION the undelivered goods. SC affirms.

Then, NAMARCO instituted the present action (Civil Case No. 46124) alleging, that the
FEDERATION'S act or omission in refusing to satisfy the former's valid, just and demandable
claim has compelled it to file the instant action; and praying that the FEDERATION be ordered
to pay the NAMARCO the sum of P611,053.35, representing the cost of merchandise
mentioned in the preceding paragraph, with interest.

FEDERATION: Being a compulsory claim, in that it arose out of or is necessarily connected with
the transaction or occurrence that is the subject matter of the action of the previous civil case, it
mustve been set up in accordance with rule 10 sec 4. Failure to set up a counterclaim
precludes NAMARCO from instituting an independent action.

NAMARCO: Claim for recovery of the cost of merchandise is not connected with the suit for
specific performance and evidence would not support or refute both. Ergo, it is not counterclaim.

ISSUE:

Whether or not the present suit instituted by NAMARCO is a counterclaim. Hence, barred by
previous suit.

RULING:

Rule on compulsory counterclaim [barred when not set up]: (1) that it arises out of, or is
necessarily connected with, the transaction or occurrence that is the subject matter of the
opposing party's claim (2) that it does not require for its adjudication the presence of third
parties of whom the court cannot acquire jurisdiction; and (3) that the court has jurisdiction to
entertain the claim.

45 | P a g e
Rule on permissive counterclaim [not barred if not set up]: logical connection with the subject
matter but the court has no jurisdiction or it requires for adjudication the presence of 3rd parties.

Test to determine:
1. Issue identity
2. that the counterclaim is compulsory if it would be barred by res judicata
3. same evidence or substantial identity in the evidence relating to the claim and counterclaim
4. the logical relationship between the claim and counterclaim (compelling test of
compulsariness)
a. It is the one circumstance without which neither party could have found it necessary to seek
relief. It must be noted that one of the requisites for the application of the rule on compulsory
counterclaim is that the counterclaim should at least be connected with or must arise out of the
transaction or occurrence which gave rise to the opposing party's claim.

It must be noted that one of the requisites for the application of the rule on compulsory
counterclaim is that the counterclaim should at least be connected with or must arise out of the
transaction or occurrence which gave rise to the opposing party's claim.

46 | P a g e
31. MANUEL C. BUNGCAYAO, SR., represented in this case by his Attorney-in-
fact ROMEL R. BUNGCAYAO, - versus - FORT ILOCANDIA PROPERTY HOLDINGSAND
DEVELOPMENT CORPORATION
G.R. No. 170483 April 19, 2010

FACTS:

Manuel C. Bungcayao, Sr. claimed to be one of the entrepreneurs who introduced

improvements on the foreshore area of Calayab Beach when Fort Ilocandia Hotel started its
construction in the area. Other entrepreneurs began setting up their own stalls in the foreshore
area. They later formed themselves into the DSierto Beach Resort Owners Association, Inc.

Six parcels of land in Barrio Balacad pursuant to Presidential Decree No. 1704 were
transferred, ceded, and conveyed to the Philippine Tourism Authority. In 1992, petitioner and
DSierto members applied for a foreshore lease with the Community Environment and Natural
Resources Office (CENRO) and were granted a provisional permit. On 31 January 2002, Fort
Ilocandia Property Holdings and Development Corporation 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
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.

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[6] in favor of respondent.

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

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.

ISSUES:
1. Whether or not respondents counterclaim is compulsory
2. Whether or not summary judgment is appropriate in this case

RULING:

Yes. A compulsory counterclaim is any claim for money or any relief, which a defending party
may have against an opposing party, which at the time of suit arises out of, or is necessarily
connected with, the same transaction or occurrence that is the subject matter of the plaintiffs
complaint. It is compulsory in the sense that it is within the jurisdiction of the court, does not
require for its adjudication the presence of third parties over whom the court cannot acquire

47 | P a g e
jurisdiction, and will be barred in the future if not set up in the answer to the complaint in the
same case. Any other counterclaim is permissive.

The criteria to determine whether the counterclaim is compulsory or permissive are as

follows: (a) Are issues of fact and law raised by the claim and by the counterclaim largely the
same; (b) Would res judicata bar a subsequent suit on defendants claim, absent the compulsory
rule; (c) Will substantially the same evidence support or refute plaintiffs claim as well as
defendants counterclaim; (d) Is there any logical relations between the claim and the
counterclaim? A positive answer to all four questions would indicate that the counterclaim is
compulsory.

Yes judgment has been properly rendered in this case 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

48 | P a g e
32. CALIBRE TRADERS, INC., MARIO SISON SEBASTIAN, and MINDA BLANCO
SEBASTIAN,Petitioners, v.BAYER PHILIPPINES, INC.,Respondent.cralawG.R. No. 161431 :
October 13, 2010

FACTS:

Calibre Traders, Inc. was one of Bayer Philippines distributor of its agricultural chemicals within
the provinces of Pangasinan and Tarlac. They entered into distributorship agreement which was
effective from June 1989 to June 1991. However on July 31, 1989 Calibre failed to settle its
unpaid accounts in the total amount of P1, 751,064.56 in effect Bayerphil stopped delivering
stocks to Calibre. Calibre as Bayerphils authorized dealer then enjoyed discounts and rebates.
However, the parties had a disagreement as to the entitlement and computations of these
discounts. Calibre, although aware of the deadline to pay its debts with Bayerphil, nevertheless
withheld payment to compel Bayerphil to reconcile its accounts.
In a letter dated August 16, 1989 Calibre enumerated claims that amounted to P968,265.82 and
requested Bayerphil for a reconciliation of accounts. Discussion and attempt to settle failed on
which it result to a demand letter requiring Bayerphil to pay the sum of P10,000,000.00 for the
damages it had allegedly caused to Calibre. Bayerphil replied, reminding that Calibre owed it
P1,272,103.07 as of December 31, 1989.Calibre filed a suit for damages before the Regional
Trial Court accusing Bayerphil of maliciously breaching the distributorship agreement by
manipulating Calibres accounts by withholding discounts and rebates due, charging
unwarranted penalties, refusing to supply goods, and favoring the new distributors to drive it out
of business.
Bayerphil in its Answer with Counterclaim denied its alleged wanton appointment of other
distributors by reasoning that it could not be faulted for a difference in treatment between a
paying dealer and a non-paying one. It maintained that Calibre filed the damage suit to avoid
paying its overdue accounts. Considering that those purchased on credit remained unpaid,
Bayerphil had to refuse to further supply Calibre with its products. Bayerphil also averred that
the dealership agreement provides that rebates and discounts would only be granted if the
previous purchases had been first fully paid. It denied that it failed to reconcile Calibres
accounts since it conferred with Calibre, and even acceded to a number of deductions
demanded by Calibre subject to the latters settlement of accounts.Bayerphil thus prayed for
collection with interest.
Bayerphil also moved that Mario Sebastian and his wife Minda to be impleaded as co-
defendants, considering that the Sebastians bound themselves as solidary debtors under the
distributorship/dealership agreement.

The trial granted the motion to implead the Sebastians as co-defendants in the counterclaim.
The spouses then filed their answer to Bayerphils counterclaim,adopting all the allegations and
defenses of Calibre. They raised the issue that the counterclaim against them is permissive, and
since Bayerphil failed to pay the required docket fees, the trial court has no jurisdiction over the
counterclaim.

The trial court rendered judgment favoring Calibre. It held that Calibre was justified in
withholding payment because there was deliberate employment of dilatory tactics on the part of
Bayerphil to reconcile accounts making it liable for damages for abuse of rights and unfair
competition under Articles 19, 20, and 28 of the Civil Code. As for Bayerphils counterclaim, the
court a quo adjudged that aside from being unmeritorious for lack of valid demand, the
counterclaim was permissive in character. Therefore, it must be dismissed for Bayerphils failure
to pay the required docket fees.

The CA reversed the trial courts factual findings. It found no reason to award Calibre anything
as it has no cause of action against Bayerphil. CA favored Bayerphils counterclaim, it ruled that
Bayerphils counterclaim was compulsory hence it need not pay the docket and filing fees. It
noted that it arose out of the same dealership agreement from which the claims of Calibre in its
complaint were likewise based. Finding that Calibre never denied that it owes Bayerphil, and
that the evidence of Bayerphil regarding the amount owed by Calibre was unrebutted, the CA
deemed justified the award of actual damages.

ISSUE:
1. Whether or not Calibres is entitled to an award of damages.

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 2. the propriety of granting relief to Bayerphils counterclaim.
RULING:

No form of damages can be awarded to Calibre for it miserably failed to prove its right to
the reliefs it sought. Court agrees with the CAs conclusion that there is no adequate proof that
Bayerphil was guilty of abusing its rights. Good faith is presumed and that the burden of proving
bad faith rests upon a party alleging the same. In civil cases, the law requires that the party who
alleges a fact and substantially asserts the affirmative of the issue has the burden of proving it.
On which Calibres failed to prove.
It is a settled doctrine that although the payment of the prescribed docket fees is a jurisdictional
requirement, its non-payment should not result in the automatic dismissal of the case provided
the docket fees are paid within the applicable prescriptive period. The prescriptive period therein
mentioned refers to the period within which a specific action must be filed. It means that in every
case, the docket fee must be paid before the lapse of the prescriptive period. Chapter 3, Title V,
Book III of the Civil Code is the principal law governing prescription of actions. In accordance
with the aforementioned rules on payment of docket fees, the trial court upon a determination
that Bayerphils counterclaim was permissive, should have instead ordered Bayerphil to pay the
required docket fees for the permissive counterclaim, giving it reasonable time but in no case
beyond the reglementary period. At the time Bayerphil filed its counter-claim against Calibre and
the spouses Sebastian without having paid the docket fees up to the time the trial court
rendered its Decision on December 6, 1993, Bayerphil could still be ordered to pay the docket
fees since no prescription has yet set in. Besides, Bayerphil should not suffer from the dismissal
of its case due to the mistake of the trial court.

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33. SPOUSES VIOLETA S. VENTURANZA and ROMY VENTURANZA, Petitioners, v. HON.
COURT OF APPEALS, HON. JUDGE BERNARDO P. PARDO, PRESIDING JUDGE OF
REGIONAL TRIAL COURT OF MANILA, BRANCH XLIII, HON. JUDGE ERNESTO
MADAMBA, PRESIDING JUDGE OF METROPOLITAN TRIAL COURT OF MANILA,
BRANCH XVII AND NIEVES SENORAN, Respondents.
G.R. No. 77760 December 11, 1987

FACTS:

Plaintiff Nieves Y. Senoran file a complaint against spouses Violeta S. Venturanza and Romy
Venturanza with MTC for collection of sums of money in the aggragate amount of P9,711.50 for
loans evidenced by promissory notes and due to non-payment became demandable. The
summons was served on the petitioners through his father who refused to sign the receipt. Due
to petitioners failure to file an Answer, the court rendered a decision ordering petitioners to pay.
However, the said decision could not be served to petitioners address since they were no longer
residing there , hence it was served in the Office of Violeta at ADB. The petitioners filed a
"Motion to Set Aside Decision and to Declare Past Proceedings Null and Void for Lack of
Jurisdiction," alleging that there was no proper and valid service of summons upon them in
accordance with either Section 7 or Section 8 of Rule 14 of the Rules of Court and that the
court a quonever acquired jurisdiction over the person of the petitioners, since the address
where the summons was served is the residence of Violeta S. Venturanza's father, and not on
her address.

ISSUE:

Whether or not the Metropolitan Trial Court validly acquired jurisdiction over the persons of the
petitioners when the summons was served upon Augusto Soans address which is not the
residence of petitioners

Whether or not the provisions of Section 8, Rule 14 of the Rules of Court was legally complied
with by the Sheriff in serving the summons upon the father of one of the petitioners

RULING:

Under Rule 14 of the Rules of Court, there are three (3) methods of service of summons in civil
actions, namely: 1) personal service (Sec. 7); 2) substituted service (Sec. 8); and 3) service by
publication. 16 Strict compliance with these modes of service is required in order that the court
may require jurisdiction over the person of the defendant. 17 Service of summons upon the
defendant is the means by which the court acquires jurisdiction over his person.

There is no question that the case at bar which is an action for collection of sum of money is an
action in personam thereby requiring personal service of summons on the defendants.
"In an action strictly in personam, personal service of summons within the forum is essential to
the acquisition of jurisdiction over the person of the defendant who does not voluntarily submit
himself to the authority of the court." (Pantaleon v. Asuncion, 105 Phil. 761; Sequito v. Letrondo,
10 Phil. 1139)

No. It is further required by law that an effort or attempt should first be made to personally serve
the summons and after this has failed, a substituted service may be caused upon the defendant,
and the same must be reflected in the proof of service. Upon examination of the sheriff 's Return
in this case, no statement was made that an effort or attempt was exerted to personally serve
the summons on the defendants and that the same had failed. In fact, said Return did not
indicate the address of the defendants to whom summons was supposed to have been served.
The presumption of regularity in the performance of official functions by the sheriff is not
applicable in this case where it is patent that the sheriff's return is defective.

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34. REGALADO P. SAMARTINO, Petitioner, v. LEONOR B. RAON, AGUSTIN G.
CRISOSTOMO, THE MUNICIPAL TRIAL COURT OF NOVELETA, CAVITE, HON. MANUEL A.
MAYO, REGIONAL TRIAL COURT, BRANCH 16, CAVITE CITY, HON. ROLANDO D. DIAZ,
REGIONAL TRIAL COURT, BRANCH 17, CAVITE CITY, SHERIFF DANILO G. LAPUZ,
CAVITE CITY and THE HON. COURT OF APPEALS, Respondents.
G.R. No. 131482. July 3, 2002

FACTS:

Respondents Leonor Bernardo-Raon and Agustin G. Crisostomo are the surviving sister and
spouse of the late Filomena Bernardo-Crisostomo, who passed away on May 17, 1994. Among
the properties left by the deceased was her one-half share in a parcel of land in Noveleta,
Cavite, registered under in the name of co-owners Lido Beach Corporation and Filomena
Bernardo. In 1996, respondents instituted a complaint for ejectment against petitioner Regalado
P. Samartino a complaint for ejectment alleging that during the lifetime of Filomena, she leased
her share to petitioner for a period of five years counted from 1986; that the said lease expired
and was not extended thereafter; and that petitioner refused to vacate the property despite
demands therefore.

Summons was served on Roberto Samartino, brother of petitioner. At the time of service,
he was not at home as he was then confined at the NBI rehab center since January 19, 1996,
where he was undergoing treatment and rehabilitation for drug dependency. Thus, on February
2, 1996, a liaison officer of the NBI-TRC appeared before the trial court with a certification that
petitioner will be unable to comply with the directive to answer the complaint within the
reglementary period, inasmuch as it will take six months for him to complete the rehabilitation
program and before he can be recommended for discharge by the Rehabilitation Committee.
The trial court, despite the written certification from NBI-TRC, declared petitioner in default and
ordered them to present evidence ex-parte. On March 21, 1996, the trial court rendered
judgment in favor of respondents. Counsel of respondent filed a motion to set aside judgment at
the RTC, RTC affirmed lower court decision. This decision became final, the property was sold
in an auction to the respondents, Petitioner filed petition for relief from judgment alleging that the
parcel of land from which he was being evicted had been sold to him by Filomena Bernardo-
Crisostomo, as evidenced by the Deed of Absolute Sale dated December 13, 1988. Petition was
dismissed by RTC. Petitioner filed petition for certiorari before CA which was also dismissed,
including his Motion for Reconsideration. Hence this petition for review

ISSUE:
Whether or not the court (MTC & RTC) acquired jurisdiction over the person of the
petitioner

RULING:

NO. There being no valid substituted service of summons, the trial court did not acquire
jurisdiction over the person of petitioner. In actions in personam, summons on the defendant
must be served by handing a copy thereof to the defendant in person, or, if he refuses to receive
it, by tendering it to him. If efforts to serve the summons personally to defendant are impossible,
service may be affected by leaving copies of the summons at the defendants dwelling house or
residence with some person of suitable age and discretion residing therein, or by leaving the
copies at the defendants office or regular place of business with some competent person in
charge thereof. Otherwise stated, service of summons upon the defendant shall be by personal
service first and only when the defendant cannot be promptly served in person will substituted
service be availed of.
It should be emphasized that the service of summons is not only required to give the
court jurisdiction over the person of the defendant, but also to afford the latter an opportunity to
be heard on the claim made against him. Thus, compliance with the rules regarding the service
of summons is as much an issue of due process as of jurisdiction. The essence of due process
is to be found in the reasonable opportunity to be heard and submit any evidence one may have
in support of his defense. It is elementary that before a person can be deprived of his property,
he should first be informed of the claim against him and the theory on which such claim is
premised. 21

52 | P a g e
By reason of the ineffective service of summons, petitioner was not duly apprised of the action
against him. Consequently, he was prevented from answering the claims against him. He was
not given a chance to be heard on his defenses. What made matters worse was that the trial
court had actual knowledge that petitioner was then indisposed and unable to file his answer to
the complaint, as he was then confined at the NBI-TRC. The trial courts failure to give petitioner
a reasonable opportunity to file his answer violated his right to due process. Perforce, the
judgment rendered against petitioner is nugatory and without effect.

35. LOURDES A. VALMONTE and ALFREDO D. VALMONTE, Petitioners, v. THE HONORABLE

COURT OF APPEALS, THIRD DIVISION and ROSITA DIMALANTA, Respondents.c

53 | P a g e
G.R. No. 108538. January 22, 1996

FACTS:

Petitioner Lourdes A. Valmonte is a foreign resident. Lourdes and Alfredo are husband and wife who
are both residents of Washington, U.S.A. Petitioner Alfredo D. Valmonte, who is a lawyer and
member of the Philippine barpractices his profession in the Philippines, commuting for this purpose
between his residence in the state of Washington and Manila.

Private respondent Rosita Dimalanta filed an action for partition. She alleged that for purposes of
this complaint. Summons may be served with at Gedisco Center, Unit 304, 1564 A. Mabini St.,
Ermita, and Manila where defendant Alfredo D. Valmonte as defendant Lourdes Arreola Valmontes
spouse holds office and where he can be found.ch

Petitioner in a letter referred private counsel in which, in regard to the partition of the property in
question, she referred private respondents counsel to her husband as the party to whom all
communications intended for her should be sent. Service of summons was then made upon Alfredo
at his office in Manila. Alfredo D. Valmonte accepted his summons, but not the one for Lourdes on
the ground that he was not authorized to accept the process on her behalf. Accordingly the process
server left without leaving a copy of the summons and complaint for petitioner Lourdes A. Valmonte.

Alfredo D. Valmonte filed his Answer with Counterclaim. Petitioner Lourdes A. Valmonte however
did not file her Answer. Private respondent moved to declare her in default for failure to file an
answer. Petitioner Alfredo D. Valmonte entered a special appearance in behalf of his wife and
opposed the private respondents motion. RTC denied the Motion for Reconsieration of respondents.
CA declared petitioner Lourdes in default. Said decision was received by Alfredo hence this petition.

ISSUE:

Whether or not Lourdes A. Valmonte was validly served with summons

RULING:

Court held that there was no valid service of process on Lourdes A. Valmonte. If the defendant is a
nonresident and he is not found in the country, summons may be served exterritorially in accordance
with Rule 14, 17, which provides:

17. Extraterritorial service. When the defendant does not reside and is not found in the
Philippines and the action affects the personal status of the plaintiff or relates to, or the subject of
which is, property within the Philippines, in which the defendant has or claims a lien or interest,
actual or contingent, or in which the relief demanded consists, wholly or in part, in excluding the
defendant from any interest therein, or the property of the defendant has been attached within the
Philippines, service may, by leave of court, be effected out of the Philippines by personal service as
under section 7; or by publication in a newspaper of general circulation in such places and for such
time as the court may order, in which case a copy of the summons and order of the court shall be
sent by registered mail to the last known address of the defendant, or in any other manner the court
may deem sufficient. Any order granting such leave shall specify a reasonable time, which shall not
be less than sixty (60) days after notice, within which the defendant must answer.

Lourdes A. Valmonte is a nonresident who is not found in the Philippines, service of

summons on her must be in accordance with Rule 14 and 17. Such service, to be effective outside
the Philippines, must be made either (1) by personal service; (2) by publication in a newspaper of
general circulation in such places and for such time as the court may order, in which case a copy of
the summons and order of the court should be sent by registered mail to the last known address of
the defendant; or (3) in any other manner which the court may deem sufficient.

Since in the case at bar, the service of summons upon petitioner Lourdes A. Valmonte was not done
by means of any of the first two modes.

36. Asiavest Limited vs Court of Appeals

G.R. No. 128803; September 25, 1998

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FACTS:

The plaintiff Asiavest Limited filed a complaint against the defendant Antonio Heras praying that
said defendant be ordered to pay to the plaintiff the amounts awarded by the Hong Kong Court
Judgment. The action filed in Hong Kong against Heras was in personam, since it was based on
his personal guarantee of the obligation of the principal debtor.

The trial court concluded that the Hong Kong court judgment should be recognized and
given effect in this jurisdiction for failure of HERAS to overcome the legal presumption in favor
of the foreign judgment.

Asiavest moved for the reconsideration of the decision. It sought an award of judicial costs and
an increase in attorney's fees with interest until full payment of the said obligations. On the other
hand, Heras no longer opposed the motion and instead appealed the decision to CA.

The Court of Appeals (CA) agreed with Heras that notice sent outside the state to a non-
resident is unavailing to give jurisdiction in an action against him personally for money recovery.
Summons should have been personally served on Heras in Hong Kong.

ISSUE:

Whether or not the judgment of the Hong Kong Court has been repelled by evidence of want of
jurisdiction due to improper notice to the party

RULING:

Asiavest cannot now claim that Heras was a resident of Hong Kong at the time since the
stipulated fact that Heras "is a resident of New Manila, Quezon City, Philippines" refers to his
residence at the time jurisdiction over his person was being sought by the Hong Kong court.
Accordingly, since Heras was not a resident of Hong Kong and the action against him was, ne in
personam, summons should have been personally served on him in Hong Kong.

The extraterritorial service in the Philippines was therefore invalid and did not confer on the
Hong Kong court jurisdiction over his person. It follows that the Hong Kong court judgment
cannot be given force and effect here in the Philippines for having been rendered without
jurisdiction.

On the same note, Heras was also an absentee, hence, he should have been served with
summons in the same manner as a non-resident not found in Hong Kong. Section 17, Rule 14
of the Rules of Court providing for extraterritorial service will not apply because the suit against
him was in personam. Neither can we apply Section 18, which allows extraterritorial service on
a resident defendant who is temporarily absent from the country, because even if Heras be
considered as a resident of Hong Kong, the undisputed fact remains that he left Hong Kong not
only temporarily but for good.

37. BPI v. Santiago

G.R. No. 169116 March 28, 2007

55 | P a g e
FACTS:

Centrogen, a domestic corporation engaged in pharmaceutical business obtained several loans from
Far East Bank and Trust Company (FEBTC), which was secured by a real estate mortage over a
parcel of land by Irene Santiago. Subsequently, FEBTC merged with BPI. Due to failure of
Centrogen to pay its loans,
BPI filed a case for Extra-Judicial Foreclosure of Real Estate Mortgage over the subject property
before the RTC of Sta. Cruz, Laguna. Thereafter, a Notice of Sale was issued by the Provincial
Sheriff on 21 January 2003. On the same day, the Spouses Santiago were served with the copy of
the Notice of Sale.Upon receipt the spouses and Centrogen filed a Complaint seeking the issuance
of a TRO and Preliminary and Final Injunction and in the alternative, for the annulment of the Real
Estate Mortgage with BPI.

The complaint alleged that the initial loan obligation in the amount of P490,000.00, including
interest thereon has been fully paid. Such payment notwithstanding, the amount was still included in
the amount of computation of the arrears as shown by the document of Extra-Judicial Foreclosure of
Real Estate Mortgage filed by the latter. Moreover, the Spouses Santiago and Centrogen contended
that the original loan agreement was for the amount of 5 Million but only 2 Million was released by
petitioner and as a result, the squalene project failed and the company groped for funds to pay its
loan obligations.

On 27 February 2003, BPI was summoned to file and serve its Answer and on the same day,
summons was served on the Branch Manager of BPI . Instead of filing an Answer, BPI filed a Motion
to Dismiss on the ground of lack of jurisdiction over the person of the defendant and other
procedural infirmities attendant to the filing of the complaint. BPI claimed that the Branch Manager of
its Sta. Cruz, Laguna Branch, was not one of those authorized by Section 11, Rule 14 of the Revised
Rules of Court to receive summons on behalf of the corporation. The summons served upon its
Branch Manager, therefore, did not bind the corporation. Also alleged lack of authorityof the person
who signed. RTC denied the MD and issued new summons.

The RTC granted the TRO to prevent foreclosure sale. BPI file MR but was denied hence this
petition with BPI alleging that the court a quo did not acquire jurisdiction over its person and
consequently, the Order issued by the RTC, permanently enjoining the foreclosure sale, was
therefore void and does not bind BPI.

ISSUE:

Whether or not the court acquired jurisdiction over BPI.

RULING:

YES. The Court acquired jurisdiction over BPI. The defect of the service of the original summons
was cured by the issuance of the new summons which was not questioned by BPI.
There was substantial compliance. Although it may be true that the service of summons was made
on a person not authorized to receive the same in behalf of the petitioner. Since it appears that the
summons and complaint were in fact received by the corporation through its said clerk, the Court
finds that there was substantial compliance with the rule on service of summons.

The ultimate test on the validity and sufficiency on service of summons is whether the same and the
attachments thereto where ultimately received by the corporation under such circumstances that no
undue prejudice is sustained by it from the procedural lapse and it was afforded full opportunity to
present its responsive pleadings. This is but in accord with the entrenched rule that the ends of
substantial justice should not be subordinated to technicalities and, for which purpose, each case
should be examined within the factual milieu peculiar to it.

The Court also emphasized that there is no hard and fast rule pertaining to the manner of service of
summons. Rather, substantial justice demands that every case should be viewed in light of the
peculiar circumstances attendant to each.

38. Lolita Amigo vs Court of Appeals

56 | P a g e
G.R. No. 102833. February 9, 1996

FACTS:

In July 1977, Jesus Wee Eng filed an action to recover real property against Lolita Amigo. The
trial court found in favor of Wee Eng. Amigo appealed but the the Court of Appeals eventually
dismissed the appeal on the ground that Amigo failed to submit her appellants brief.

Amigo then appealed to the Supreme Court on the ground that the trial court did not have
jurisdiction over the case because it never acquired jurisdiction over Amigos person.

ISSUE:

Whether or not the appeal filed by Amigo should be granted.

RULING:

No. As a rule, lack of jurisdiction, as a ground for dismissing a case, may be raised at any stage
of the proceeding. However, the Supreme Court clarified that this rule finds proper application in
cases where the court does not have jurisdiction over the subject matter.

Unlike the question of jurisdiction over the subject matter which may be invoked at any stage of
the proceedings (even on appeal), the issue of jurisdiction over the person of the defendant,
however,must be seasonably raised, and it can well be pleaded in a motion to dismiss or by way
of an affirmative defense in an answer.

In this case, Amigo let the issue of lack of jurisdiction over her person pass until the rendition of
judgment. It is now too late in the day for her to assail the jurisdiction of the lower court over her
person, a somersault that neither law nor policy will sanction.

Nevertheless, the records show that the court actually acquired jurisdiction over the person of
Amigo. Amigo voluntarily submitted herself to the trial courts jurisdiction when she filed her
Answer to Engs complaint. Her contention therefore is without merit.

39. La Naval Drug Corporation vs Court of Appeals

G.R. No. 103200, August 31, 1994

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FACTS:

In 1989, a conflict between La Naval Drug Corporation and a certain Wilson Yao arose
regarding a lease contract. Yao invoked a provision in the lease contract whereby pursuant to
R.A. 876 (Arbitration Law), they should refer the matter to arbitration. Hence, the parties agreed
to refer the issue to three arbitrators however, certain complications arose when they were
choosing a third arbitrator. This prompted Yao to go to court to demand the arbitrators to
proceed with the arbitration. Yao went to the regional trial court (Angeles City) and the case was
filed as a summary proceeding case under R.A. 876. Yao also prayed for an award for damages
in his favor.

In its answer, La Naval asserted that the case should be dismissed as it was filed prematurely;
La Naval questioned Yaos claim for damages as it averred that the same should be litigated
independently and not in the same summary proceeding case. However, La Naval also posed a
counterclaim.

The RTC resolved the matter regarding the arbitrators (it appointed a third arbitrator). The RTC
also ruled that La Naval is estopped from questioning Yaos claim for damages for being out of
jurisdiction as La Naval itself filed a counterclaim for damages.

ISSUE:

Whether or not the RTC has jurisdiction over the claims for damages between parties.

RULING:

No. R.A. 876 is clear that summary proceedings under said law shall only involve the matter of
arbitration. The parties claims for damages must be litigated in another civil case.

The Supreme Court went on to discuss that where the court clearly has no jurisdiction over the
subject matter, in this case the claim and counterclaim for damages, the court must dismiss the
case (in this case, the claim and counterclaim for damages). Lack of jurisdiction over the subject
matter as a defense may be raised at any time. Failure to raise such defense shall not estop the
defendant from raising such defense (as opposed to the defense of lack of jurisdiction over the
person which is deemed waived if the defendant voluntarily appeared if defendant voluntarily
appeared, then he is estopped from raising that defense).

40. ILOCOS SUR ELECTRIC COOPERATIVE, INC. (ISECO) VS. NLRC

G.R. No. 106161, February 1, 1995

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FACTS:

Sabio was employed as Manager of the Engineering Department of petitioner ISECO an electric
cooperative. He was relieved of his duties and later on dismissed pursuant to ISECOs Board
Resolution which rooted from his act in writing the ISECO Board of Directors questioning the
expenses incurred by the Acting General Manager, Bautista, and his excessive leave.

When Sabio was placed under preventive suspension without pay, he filed a complaint for illegal
suspension before the Labor Arbiter. He was later dismissed by the petitioner when such
petitioner adopted the recommendation by the ad hoc committee finding Sabio guilty of
misconduct. Sabio then filed a complaint for illegal dismissal with claim for damages against
petitioner with the NLRC. The Labor Arbiter held that Sabio was illegally and unjustly dismissed
without due process of law and ordered for his reinstatement.

Petitioners appeal and motion for reconsideration were both dismissed. Then, a petition for the
issuance of a writ of execution was submitted by Sabio. Thus, petitioner filed this petition for
certiorari questioning the jurisdiction of the NLRC over termination cases involving employees of
electric cooperatives.

ISSUE:

Whether or not the NLRC has jurisdiction over cases involving employees of electric
cooperatives.

RULING:

Yes, PD 269 pertains to (NATIONAL ELECTRIFICATION ADMINISTRATION) NEAS power of

supervision and control over electric cooperatives and other borrowers, supervised or
controlled. There is nothing in said law which providesthat the NEA has the power to hear and
decide termination cases of employees in electric cooperatives.

In the present case, there is no dispute that Sabio is an employee of ISECO whose services
were terminated. The dismissal arose from purely labor dispute which falls within the original
and exclusive jurisdiction of the Labor Arbiters and the NLRC. Moreover, the NLRCs
jurisdiction was only raised for the first time in this petition. Petitioners did not question the
jurisdiction of the Labor Arbiter either in a motion to dismiss or in their answer.

In fact, petitioner participated in the proceedings before the Labor Arbiter, as well as in the
NLRC to which they appealed the Labor Arbiters decision. It has been consistently held by this
court that while jurisdiction may be assailed at any stage, a partys active participation in the
proceedings before a court without jurisdiction will estop such party from assailing such lack of
it.

41. ANDAYA V. ABADIA, 228 SCRA 705 (1993)

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FACTS:

Andaya filed an action for Injunction and Damages with Restraining Order and/or
Preliminary Injunction against respondents Abadia et al. before the RTC of Quezon City.
He alleges that respondents, as directors of Armed Forces and Police Savings and Loan
Association, Inc. (AFPSLAI), illegally and maliciously reorganized the management to oust him
from his (Andaya) position as President and General Manager. The RTC granted the prayer
of petition for TRO. Abadia et al. filed an Urgent Motion to Dismiss on the ground that the
complaint raised intra-corporate controversies over which the Securities and Exchange

Commission (SEC) and not the RTC has exclusive original jurisdiction. Andaya filed a
consolidated Opposition and also an amended complaint impleading as additional defendants
the Central Bank Governor, Central Bank SRDC Managing Director and Central Bank
SES Acting Director. Abadia et al. filed an Omnibus Motion contending that the filing of
an amended complaint seeking to confer jurisdiction on the court was improper and
should not be allowed (it seeks the dismissal of the Amended Complaint). RTC Judge
Santiago issued an order dismissing the case for lack of jurisdiction since the causes of
action are matters covered by the AFPSLAI By-Laws, which are corporate matters over
which the SEC has jurisdiction. While the order mentioned the amended complaint, it made no
express disposition thereon. Andaya seeks the reversal of the order on the alleged procedural
infirmity that despite the filing of an Amended Complaint, which rendered respondents Urgent
Motion to

Dismiss (for the original complaint) functus officio, the RTC, without first admitting the Amended
Complaint, dismissed the case against respondents. (The Omnibus Motion was already filed
when the RTC rendered the order resolving, not the Omnibus Motion, but the Urgent Motion to
Dismiss. Ordinarily, the filing of the Omnibus Motion should render the Urgent Motion to Dismiss
superseded. Andaya thus posits that the RTC was precluded from acting not only on the Urgent
Motion to Dismiss because it was deemed superseded, but also on the Omnibus Motion
because no hearing was had thereon thus leaving the assailed orders without basis to lean on.)

ISSUE:

Whether or not the order of dismissal by the RTC is procedurally infirmed.

RULING:

No. First, on the substantial aspect: The allegations against respondents in the
amended complaint unquestionably reveal intra-corporate controversies cleverly concealed,
although unsuccessfully, by use of civil law terms and phrases. While it may be said that
corporate acts also give rise to civil liability for damages, it does not follow that the case is

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necessarily taken out of the jurisdiction of SEC as it may award damages which can be
considered consequential in the exercise of its adjudicative powers. In intra-corporate
matters such as those affecting the corporation, its directors, trustees, officers, shareholders,
the issue of consequential damages may just as well be resolved and adjudicated by the SEC.
Moreover, mere allegations of violation of the provisions of the Civil Code on human
relations do not necessarily call for the application of the provisions of the Civil Code in
place of AFPSLAI By-Laws. The Omnibus Motion already comprehended the lone issue
raised in the Urgent Motion to Dismiss (i.e., the court has no jurisdiction over intra-corporate
matters) and upon which ground the RTC dismissed the case against respondents. The
previous hearing on the Urgent Motion to Dismiss cured the defect of absence of hearing on the
Omnibus Motion but only insofar as said issue was concerned. What is important is that Andaya
was heard on that issue, hence, due process was observed. Moreover, the Omnibus Motion
made an express statement adopting the arguments in the Urgent Motion to Dismiss.
Besides, even if the Urgent Motion to Dismiss may have been deemed superseded, the
Court is not precluded from considering the same which still remains in the record. The
foregoing notwithstanding, remedial rights and privileges under the Rules of Court are
utterly useless in a forum that has no jurisdiction over the case. It should be noted that the RTC
dismissed the case against respondents on the ground that it has no jurisdiction over the
subject matter thereof which mainly involves intra-corporate controversies.

Jurisdiction is vested by law and cannot be conferred or waived by the parties or even
the judge. Hence, even on appeal, and even if the parties do not raise the issue of
jurisdiction, the reviewing court is not precluded from ruling that it has no jurisdiction over the
case. The last sentence of Section 2, Rule 9, Rules of Court, expressly states: "Whenever it
appears that the court has no jurisdiction over the subject matter, it shall dismiss the action."
The Rule uses the word "shall," leaving the court no choice under the given situation but to
dismiss the case. The same Rule also uses the phrase "whenever it appears," which
means, at any time after the complaint or amended complaint is filed, because the lack
of jurisdiction may be apparent from the allegations therein.

Therefore, even if there is no answer/motion to dismiss filed, the court can dismiss the
case for want of jurisdiction. In this sense, dismissal for lack of jurisdiction can be ordered by
the court motu propio. Applying this notion to the case at bar, considering that the dismissal of
the case was due to lack of jurisdiction, it becomes insignificant whether the court acted on the
Urgent Motion to Dismiss or on the Omnibus Motion requiring notice as per Sections 4 and 6 of
Rule 15.

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42. THE ANDRESONS GROUP, INC., petitioner, vs. COURT OF APPEALS, SPOUSES
WILLIE A. DENATE and MYRNA LO DENATE, respondents.

G.R. No. 114928. January 21, 1997

This is a petition questioning the decisions of the Court of Appeals which sets aside the orders
of the RTC Kalookan City denying private respondents Motion to Dismiss on of lis pendens.

Facts of the Case:

This case commences in an action for collection of sum of money filed against petitioner
alleging that he was entitled to a certain amount representing commissions from petitioner being
an agent of the latter. Consequently, the petitioner thereafter filed the same action against the
respondent for a certain sum of money. Private respondent filed a Motion to Dismiss on the
ground of litis pendentia which was denied by the trial court. Upon elevating the case to the
appellate court, the latter set aside the case of the trial court. Hence, this petition.

Issue:

Whether or not the action in the trial court be dismissed on the ground of lis pendens.

Ruling:

Yes. The court emphasized that Lis pendens as a ground for the dismissal of a civil
action refers to that situation wherein another action is pending between the same parties for

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the same cause of action. To constitute the defense of lis pendens, it must appear that not only
are the parties in the two actions the same but there is substantial identity in the cause of action
and relief sought. Further, it is required that the identity be such that any judgment which may
be rendered in the other would, regardless of which party is successful, amount to res judicata
on the case on hand. All the said requisites are present in this case. On the issue that the court
had not yet acquired jurisdiction over the parties, the said argument is untenable. A civil action is
commenced by filing a complaint with the court. It must be emphasized that the rule on litis
pendentia does not require that the later case should yield to the earlier. The decision of the
appellate court is AFFIRMED.

43. BENEDICTO RAMOS, petitioner,vs.

HON. ELVIRO L. PERALTA, Presiding Judge, Branch XVII, Court of First Instance of
Manila, SPOUSES JUVENCIO ORTANEZ and JULIANA S. ORTANEZ, MINDANAO
INSURANCE CO., INC. and P. R. ROMAN, INC., respondents.
G.R. No. L-45107 November 11, 1991

This is a petition for review on certiorari assailing the propriety of the dismissal of the trial court
of petitioners action for consignation.

Facts of the Case:

The petitioner is the lessor of the fishpond of the private respondents by virtue of a lease
contract executed by the latter in favor of the former with a term of five (5) years. Unknown to
the petitioner, the said property is in the title of a corporation which was placed under
receivership and liquidation. Accordingly, the private respondents refused to accept petitioners
advance rentals on the said property. Petitioner received a letter informing him of the acquisition
of the fishpond. Petitioner, in his letter-reply refused to consent to the intended take-over.
Subsequently, petitioner filed before the CFI a complaint against private respondents.
Respondents filed a motion to dismiss citing the pendency of another case instituted by the
same for quieting of title. The trial court dismissed the case. The appellate affirmed the
dismissal of the trial court. Hence, this petition.

Issue:

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 Whether the motion to dismiss anchored on the ground of litis pendentia is untenable
thus, cannot bar the petitioners consignation because the two actions involve different issue.

Ruling:

No. The court ruled that, under the rules and jurisprudence, for litis pendentia to be
invoked as a ground for the dismissal of an action, the concurrence of the following requisites is
necessary: (a) Identity of parties or at least such as represent the same interest in both actions;
(b) Identity of rights asserted and relief prayed for, the relief being founded on the same facts;
and (c) The identity in the two cases should be such that the judgment that may be rendered in
one would, regardless of which party is successful, amount to res judicata in the other. These
requisites are present in the case at bar. Petitioners contention that the only issue in a
consignation case is whether or not the defendant is willing to accept the proffered payment is
true only where there is no controversy with respect to the obligation sought to be discharged by
such payment. His consignation case, however, is not as simple. While ostensibly, the
immediate relief sought for in his consignation case is to compel therein defendants to accept
his advance rentals, the ultimate purpose of such action is to compel the new owner of the
fishpond to recognize his leasehold rights and right of occupation. The rule on litis pendentia
does not require that the later case should yield to the earlier case. What is required merely is
that there be another pending action, not a prior pending action. Considering the broader scope
of inquiry involved in Civil Case No. 4102 and the location of the property involved, no error was
committed by the lower court in deferring to the Bataan court's jurisdiction. The decision of the
trial court is affirmed in toto.

44. Jesse Yap vs. Court of Appeals and Eliza Chua and Evelyn Te
GR 18670

This is a petition for review on certiorari assailing the decision of the Court of Appeals setting
aside the Order of the trial court thus, dismissing the case on the ground of litis pendentia.

Facts of the Case:

Petitioner filed a complaint against respondent with the RTC of Makati City praying for
the cancellation or discharge of several checks he drew against his account with BPI. He
alleged that he purchased several real properties through Te, a real estate broker, and as
payment, delivered to her a number of checks either payable to her, the property owners or to
the various individuals who agreed to finance his acquisitions. He agreed to effect payment in
such manner on Tes claim that this will expedite the transfer of the titles in his favor. However,
the checks were dishonored for the reason that the account is closed. Verbal demands for Yap
to make good the checks he issued proved to be futile. Thus, Chua filed with the RTC of
General Santos City a complaint for sum of money against Yap and his wife, Bessie. Chua
moved for the dismissal on the case on ground of litis pendentia and forum shopping. The trial
court refused to dismiss the case. Upon filing a petition for certiorari to the Court of Appeals, the
latter dismissed the same. Hence, this petition.

Issue:

Whether the dismissal of the case by the CA on the ground of litis pendentia is proper.

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Ruling:

Yes. The Court ruled that, To determine whether a party violated the rule against forum
shopping, the most important factor to ask is whether the elements of litis pendentia are
present, or whether a final judgment in one case will amount to res judicata in another;
otherwise stated, the test for determining forum shopping is whether in the two (or more) cases
pending, there is identity of parties, rights or causes of action, and reliefs sought. The requisites
of litis pendentia are: (a) the identity of parties, or at least such as representing the same
interests in both actions; (b) the identity of rights asserted and relief prayed for, the relief being
founded on the same facts; and (c) the identity of the two cases such that judgment in one,
regardless of which party is successful, would amount to res judicata in the other.
The first requisite of litis pendentia is present as there is identity of parties. The second and third
requisites are likewise present. Apart from the fact that the same factual antecedents prompted
the filing of the two cases, that Yaps defense in Civil Case No. 6236 constitutes his cause of
action in Civil Case No. 04-030 necessarily implies reliance on the same evidence for the
resolution of both cases. Among the several tests resorted to in ascertaining whether two suits
relate to a single or common cause of action are: (1) whether the same evidence would support
and sustain both the first and second causes of action;and (2) whether the defenses in one case
may be used to substantiate the complaint in the other.1[17] Also fundamental is the test of
determining whether the cause of action in the second case existed at the time of the filing of
the first complaint.
The court affirmed the decision of the appellate court.

45. BIENVENIDA MACHOCA ARCADIO VDA. DE CRUZO, ELENA MACHOCA ARCADIO

VDA. DE PINTON, INOCENTA MACHOCA ARCADIO VDA. DE PLIEGO, ISIDORA
MACHOCA ARCADIO DE PLIEGO (Deceased) represented by daughter Natividad Pliego
de Ceballos and ARISTON "RICARDO" MACHOCA ARCADIO (Deceased) represented by
daughter Virginia Arcadio de Evangelista: Represented by INOCENTA MACHOCA
ARCADIO VDA. DE PLIEGO, petitioners,
vs.
HON. GLICERIO V. CARRIAGA, JR., FRANKLIN ANG and MELECIO SUAREZ (Deceased)
represented by the surviving spouse, Pilar de los Reyes, respondents.
G.R. Nos. 75109-10 June 28, 1989

This is an appeal from the order 1 of respondent Judge Glicerio V. Carriaga, Jr., dismissing
petitioners' complaint in Special Civil Action No. OZ-0751 of the Regional Trial Court, Branch
XV, Ozamiz City, on the ground of res judicata.

Facts of the Case:

The subject property of this case was mortgaged by the petitioners mother to the herein
respondent. Petitioners claim that on the same date, Ang caused the preparation of a deed of
sale over the subject lot to which document Gabina Machoca, being illiterate, affixed her thumb-
mark in the belief that this second instrument was similar to the deed of mortgage executed by
her on February 4, 1954. When Gabina went home, her children, herein petitioners, informed
her that the second document was not a deed of mortgage but a contract of sale. On the
following day, October 5, 1954, Gabina went back to Ang and demanded the reformation of the
aforesaid instrument. Franklin Ang, instead of reforming the instrument, prepared a deed of

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agreement. No redemption having been made, Ang sold said Lot No. 1131 to herein private
respondent Melecio Suarez who then oagainst Pedro, Inocenta and Lazaro, all surnamed Pliego
before the City Court of the City of Ozamizbtained Transfer Certificate of Title No. T-945
therefore in his name. An action for unlawful detainer was filed . The records reveal that during
the pendency of the aforesaid unlawful detainer case, herein petitioners filed a petition for
prohibition against City Court Judge Ceferino Ong and herein private respondents to restrain
Judge Ong from further proceeding with the trial in Civil Case No. C-1 for alleged lack of
jurisdiction. The petition was dismissed and no appeal was taken by said petitioners. Finally, the
same petitioners filed Special Civil Case No. OZ-0751 with the Regional Trial Court, Branch XV,
Ozamiz City, for conventional redemption and damages against herein private respondents over
the same subject lot. Upon motion of the defendants therein, the complaint was dismissed by
the court on the ground of res judicata. Hence, this petition assailing said dismissal order.

Issue:

Whether the dismissal of the case on the ground of res judicata is proper.

Ruling:

The doctrine of res judicata thus lays down two main rules which may be stated as
follows: (1) The judgment or decree of a court of competent jurisdiction on the merits concludes
the parties and their privies to the litigation and constitutes a bar to a new action or suit involving
the same cause of action either before the same or any other tribunal; and (2) Any right, fact, or
matter in issue directly adjudicated or necessarily involved in the determination of an action
before a competent court in which a judgment or decree is rendered on the merits is
conclusively settled by the judgment therein and cannot again be litigated between the parties
and their privies whether or not the claim or demand, purpose, or subject matter of the two suits
is the same. These two main rules mark the distinction between the principles governing the two
typical cases in which a judgment may operate as evidence. In speaking of these cases, the first
general rule above stated, and which corresponds to the aforequoted paragraph (b) of Section
49, is referred to as "bar by former judgment" while the second general rule, which is embodied
in paragraph (c) of the same section, is known as "conclusiveness of judgment. Stated
otherwise, when we speak of resjudicata in its concept as a "bar by former judgment," the
judgment rendered in the first case is an absolute bar to the subsequent action since said
judgment is conclusive not only as to the matters offered and received to sustain that judgment
but also as to any other matter which might have been offered for that purpose and which could
have been adjudged therein. This is the concept in which the term res judicata is more
commonly and generally used and in which it is understood as the bar by prior judgment
constituting a ground for a motion to dismiss in civil cases. In determining whether causes of
action are identical so as to warrant application of the rule of res judicata, the test most
commonly stated is to ascertain whether the same evidence which is necessary to sustain the
second action would have been sufficient to authorize a recovery in the first, even if the forms or
nature of the two actions be different. If the same facts or evidence would sustain both, the two
actions are considered the same within the rule that the judgment in the former is a bar to the
subsequent action; otherwise it is not. It has been said that this method is the best and most
accurate test as to whether a former judgment is a bar in subsequent proceedings between the
same parties, and it has even been designated as infallible. The ordered appealed from is
affirmed by the Court.

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46. HACIENDA BIGAA, INC. ,-versus -EPIFANIO V. CHAVEZ (deceased), substituted by
SANTIAGO V. CHAVEZ,
G.R. No. 174160 April 20, 2010

FACTS:

Petitioner Hacienda Bigaa, Inc. filed with the MTC of Calatagan, Batangas a complaint
for ejectment and damages with application for writ of preliminary injunction against respondent
Epifanio V. Chavez. The complaint alleged that Chavez, by force, strategy and/or stealth,
entered into the premises of Hacienda Bigaa's properties covered by Transfer Certificate of Title
(TCT) Nos. 44695 and 56120 by cutting through a section of the barbed wire fence surrounding
the properties and destroying the lock of one of its gates, subsequently building a house on the
property, and occupying the lots without the prior consent and against the will of Hacienda
Bigaa.

The records show that the lots were originally covered by TCT No. 722 owned by Ayala y
Cia and/or Alfonso, Jacobo and Enrique Zobel, known as Hacienda Calatagan. They later
acquired excess lands under same title. The Ayalas and/or the Zobels then later ordered the
subdivision of the hacienda, including these excess areas, and sold the subdivided lots to third
parties. Among the buyers or transferees of the expanded and subdivided areas was Hacienda
Bigaa.

Portions of the same lands were leased out by the Republic, through the Bureau of
Fisheries, to qualified applicants in whose favor fishpond permits were issued. The government-
issued fishpond permits pertaining to lands covered by titles derived from TCT No. 722. Suits

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were filed in various courts in Batangas for the recovery of the areas in excess of the area
originally covered by TCT No. 722, which suits ultimately reached the Supreme Court. In the
Court's 1965 decisions in Dizon v. Rodriguez (for quieting of title) and Republic v. Ayala y Cia
and/or Hacienda Calatagan, et al. (for annulment of titles), the excess areas of TCT No. 722
were categorically declared as unregisterable lands of the public domain such that any title
covering these excess areas are necessarily null and void. In these cases, the Ayalas and the
Zobels were found to be mere usurpers of public domain areas, and all subdivision titles issued
to them or their privies and covering these areas were invalidated; the wrongfully registered
public domain areas reverted to the Republic.

To return to the forcible entry case, then Chavez alleged in his answer before the MTC of
Calatagan that his mother, Zoila de Chavez (who died intestate on September 14, 1979) was a
fishpond permittee/lessee under a Fishpond Permit issued by the Bureau of Fisheries; that the
areas covered by the permits are the same parcels of land which he presently occupies as
Zoila's successor-in-interest and which Hacienda Bigaa also claims.

Chavez argued that the suit is barred by prior judgment in two prior cases (1) Civil Case
No. 78, a suit for unlawful detainer filed by the Zobels against Chavezs predecessor-in-interest,
Zoila de Chavez, before the then Justice of the Peace Court (now Municipal Trial Court) of
Calatagan and (2) Civil Case No. 653, a case of accion reinvindicatoria with prayer for
preliminary mandatory injunction filed by the Republic, Zoila de Chavez, and other lessees or
fishpond permittees of the Republic, against Enrique Zobel (Hacienda Bigaa's predecessor-in-
interest) before the then Court of First Instance of Batangas. This case reached the SC, entitled
Republic of the Philippines v. De los Angeles, Enrique Zobel, et al. and was decided in 1988.
Chavez asserts that the subject matter and the issues involved in these cases are squarely
similar and/or identical to the subject matter and issues involved in the present forcible entry
suit; the rulings in these two cases, therefore constitute res judicata with respect to the present
case.

The MTC rendered a decision dismissing Hacienda Bigaa's complaint, holding that the
disputed lots form part of the areas illegally expanded and made to appear to be covered by
TCT No. 722 of Hacienda Bigaa's predecessors-in-interest hence, the Hacienda's title are null
and void. In so ruling, the MTC applied this Court's pronouncements in the antecedent cases of
Dizon v. Rodriguez, Republic v. Ayala y Cia and/or Hacienda Calatagan, Zobel, et al., and
Republic v. De los Angeles. MTC also ruled that the identity of the parties, subject, issues and
cause of action are the same.

RTC and the CA affirmed in toto the appealed decision.

ISSUE: Is there Res Judicata?

RULING: YES. The doctrine of res judicata is set forth in Section 47 of Rule 39 of the
Rules of Court, which in its relevant part reads:

Sec. 47.Effect of judgments or final orders. The effect of a judgment or final order rendered by a
court of the Philippines, having jurisdiction to pronounce the judgment or final order, may be as
follows:

(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or
as to any other matter that could have been raised in relation thereto, conclusive between the
parties and their successors in interest by title subsequent to the commencement of the action
or special proceeding, litigating for the same thing and under the same title and in the same
capacity; and

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(c) In any other litigation between the same parties or their successors in interest, that only is
deemed to have been adjudged in a former judgment or final order which appears upon its face
to have been so adjudged, or which was actually and necessarily included therein or necessary
thereto.

This provision comprehends two distinct concepts of res judicata: (1) bar by former
judgment and (2) conclusiveness of judgment. Under the first concept, res judicata absolutely
bars any subsequent action when the following requisites concur: (a) the former judgment or
order was final; (b) it adjudged the pertinent issue or issues on their merits; (c) it was rendered
by a court that had jurisdiction over the subject matter and the parties; and (d) between the first
and the second actions, there was identity of parties, of subject matter, and of causes of action.
[39]

Where no identity of causes of action but only identity of issues exists, res judicata
comes under the second concept i.e., under conclusiveness of judgment. Under this concept,
the rule bars the re-litigation of particular facts or issues involving the same parties even if
raised under different claims or causes of action. Conclusiveness of judgment finds application
when a fact or question has been squarely put in issue, judicially passed upon, and adjudged in
a former suit by a court of competent jurisdiction. The fact or question settled by final judgment
or order binds the parties to that action (and persons in privity with them or their successors-in-
interest), and continues to bind them while the judgment or order remains standing and
unreversed by proper authority on a timely motion or petition; the conclusively settled fact or
question furthermore cannot again be litigated in any future or other action between the same
parties or their privies and successors-in-interest, in the same or in any other court of concurrent
jurisdiction, either for the same or for a different cause of action. Thus, only the identities of
parties and issues are required for the operation of the principle of conclusiveness of judgment.

While conclusiveness of judgment does not have the same barring effect as that of a bar
by former judgment that proscribes subsequent actions, the former nonetheless estops the
parties from raising in a later case the issues or points that were raised and controverted, and
were determinative of the ruling in the earlier case. In other words, the dictum laid down in the
earlier final judgment or order becomes conclusive and continues to be binding between the
same parties, their privies and successors-in-interest, as long as the facts on which that
judgment was predicated continue to be the facts of the case or incident before the court in a
later case; the binding effect and enforceability of that earlier dictum can no longer be re-
litigated in a later case since the issue has already been resolved and finally laid to rest in the
earlier case.

SC rejected, Hacienda Bigaa's position that there could be no res judicata in this case
because the present suit is for forcible entry while the antecedent cases adverted were based
on different causes of action i.e., quieting of title, annulment of titles and accion reinvindicatoria.
For, res judicata, under the concept of conclusiveness of judgment, operates even if no absolute
identity of causes of action exists. Res judicata, in its conclusiveness of judgment concept,
merely requires identity of issues. We thus agree with the uniform view of the lower courts the
MTC, RTC and the CA on the application of res judicata to the present case.

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47. San Lorenzo Development Corporation vs. CA
G.R. No. 124242. January 21, 2005Ponente: Justice Tinga

FACTS:

The Spouses Lu allegedly sold the two parcels of land to respondent Babasanta.
Babasanta made a down payment of P50,000 as evidenced by a memorandum receipt issued
by Pacita Lu of the same date. Several other payments totaling two hundred thousand pesos
(P200,000.00) were made by Babasanta.
Sometime in May 1989, Babasanta wrote a letter to Pacita Lu to demand the execution
of a final deed of sale in his favor so that he could effect full payment of the purchase price. In
the same letter, Babasanta notified the spouses about having received information that
the spouses sold the same property to another without his knowledgeand consent. He
demanded that the second sale be cancelled and that a final deed of sale be issued in his favor.
In response, Pacita Lu wrote a letter to Babasanta wherein she acknowledged having
agreed to sell the property to him at P15.00 per square meter. She, however, reminded
Babasanta that when the balance of the purchase price became due, he requested for a
reduction of the price and when she refused, Babasanta backed out of the sale. Pacita added
that she returned the sum of fifty thousand pesos (P50,000.00) to Babasanta through Eugenio
Oya. Babasanta filed Complaint for Specific Performance and Damages .Petitioner San SLDC
filed a Motion for Intervention. SLDC alleged that it had legal interest in the subject matter under
litigation because the two parcels of land involved had been sold to it in a Deed of Absolute Sale
with Mortgage . It alleged that it was a buyer in good faith and for value and therefore it had a
better right over the property in litigation.

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ISSUES:
(1) Whether or not there was a transfer of ownership through the issuance of memorandum
receipt.
(2) Whether or not the petitioner has a better right over the parcels of land in the case of
double sale.

Held:
(1)
No. Respondent Babasanta did not acquire ownership by the mere execution of the receipt by
PacitaLu acknowledging receipt of partial payment for the property. For one, the agreement
between Babasanta and the Spouses Lu, though valid, was not embodied in a public
instrument. Hence, no constructive delivery of the lands could have been effected. For another,
Babasanta had not taken possession of the property at any time after the perfection of the sale
in his favor or exercised acts of dominion over it despite his assertions that he was the rightful
owner of the lands. Simply stated, there was no delivery to Babasanta, whether actual or
constructive, which is essential to transfer ownership of the property. Thus, even on the
assumption that the perfected contract between the parties was a sale, ownership could not
have passed to Babasanta in the absence of delivery, since in a contract of sale ownership is
transferred to the vendee only upon the delivery of the thing sold.

(2)
Yes. As stated in Article 1544, if the same thing should have been sold to different vendees, the
ownership shall belong to the person acquiring it who in good faith first recorded it in the
Registry of Property. The principle of
primus tempore, potior jure
(first in time, stronger in right) gains greater significance in case of double sale of immovable
property. When the thing sold twice is an immovable, the one who acquires it and first records it
in the Registry of Property, both made in good faith, shall be deemed the owner. Verily, the act
of registration must be coupled with good faith
that is, the registrant must have no knowledge of the defect or lack of title of his vendor or
must not
have been aware of facts which should have put him upon such inquiry and investigation as
might be necessary to acquaint him with the defects in the title of his vendor. It must be stressed
that as early as 11 February 1989, the Spouses Lu executed the Option to Buy in favor of
SLDC upon receiving P316,160.00 as option money from SLDC. After SLDC had paid more
than one half of the agreed purchase price of P1,264,640.00, the Spouses Lu subsequently
executed on 3 May 1989 a Deed of Absolute Sale in favor or SLDC. At the time both deeds
were executed, SLDC had no the time of execution of the first deed up to the moment of
transfer and delivery of possession of the lands to SLDC, it had acted in good faith and the
subsequent annotation of lis pendens has no effect at all on the consummated sale between
SLDC and the Spouses Lu. The law speaks not only of one criterion. The first criterion is priority
of entry in the registry of property; there being no priority of such entry, the second is priority of
possession; and, in the absence of the two priorities, the third priority is of the date of title, with
good faith as the common critical element. Since SLDC acquired possession of the property in
good faith in contrast to Babasanta, who neither registered nor possessed the property at any
time, SLDC's right is definitely superior to that of Babasanta's. At any rate, the above
discussion on the rules on double sale would be purely academic for as earlier stated in this
decision, the contract between Babasanta and the Spouses Lu is not a contract of sale but
merely a contract to sell.

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48. SPOUSES DR. FIDEL CALALANG and DRA. MARIA GENER CALALANG, and FERDINAND
CALALANG vs.INTERMEDIATE APPELLATE COURT (FOURTH CIVIL CASES DIVISION), and
HEIRS OF ERLINDA GRUTA
G.R. No. 74613 February 27, 1991

FACTS:
This is a petition for review on certiorari which seeks to reverse, nullify and set aside: (a) the
June 28, 1985 decision 1 of the Intermediate Appellate Court (now Court of Appeals) in AC-G.R. No.
CV 04384 entitled "Heirs of Erlinda Gruta vs. Ferdinand Calalang, et al." setting aside the decision of
the trial court in Civil Case No. 83-18019 (for damages) between the same parties. The trial court
had dismissed the case on the ground of lack of cause of action but the Court of Appeals ordered
the case to be remanded to the lower court for further proceedings; and (b) the resolution dated April
28, 1986 denying the motion for reconsideration.
Erlinda Gruta, 15 years old, from the province of Samar, was employed as househelper in
the household of petitioners spouses Dr. Fidel Calalang and Dra. Maria Gener Calalang and their
son Ferdinand Calalang, in Bulacan .
On October 31, 1981, Erlinda Gruta died of malathion poisoning. Ferdinand Calalang, son of
the spouses Calalang, who brought Erlinda first to the Calalang's Clinic and then to Jose Reyes
Memorial Hospital where she died, was charged with murder for allegedly poisoning her.
Respondent Ferdinand Calalang never appeared nor presented his counter affidavit, instead
his mother Maria Gener Calalang presented a counter affidavit and two affidavits of her maids who
saw the deceased take a lethal dose of malathion and the report of Pat.
Subsequently later, a case of Murder by poisoning was filed against defendant Ferdinand
Calalang with the fiscal's office of Bulacan, which was however dismissed on the alleged ground of
failure to prove a prima facie case of the offense charged.

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 However, on appeal, the Intermediate Appellate Court rendered its decision dated June 28,
1986, reversing the order of the lower court, the dispositive portion of which reads:
WHEREFORE, the order of the trial court dismissing this case, dated March 30, 1984, is hereby SET
ASIDE and the original records are ordered remanded to the court below for further proceedings.
With costs against the defendants-appellees.

ISSUE: WON the dismissal of the case based on the ground that there is no valid action will
not render refiling of the case in double jeopardy

RULING: Yes. Verily, the dismissal of this criminal case as found by IAC is only by resolution of
the provincial fiscal and does not proceed from a declaration in a final judgment that the fact from
which the civil case might arise did not exist, so that said case may be refiled anytime without the
effect of double jeopardy. (Rollo, p. 173). We held as early as the case of People v. Velez, 77 Phil.
1026, that the dismissal of the information or the criminal action (upon motion of the fiscal) does not
affect the right of the offended party to institute or continue the civil action already instituted arising
from the offense, because such dismissal or extinction of the penal action does not carry with it the
extinction of the civil action. The reason most often given for this holding is that the two proceedings
are not between the same parties. Different rules as to the competency of witnesses and weight of
evidence necessary to the findings in the two proceedings also exist. In a criminal action the State
must prove its case by evidence which shows the guilt of the defendant beyond reasonable doubt,
while in a civil action it is sufficient for the plaintiff to sustain his cause by preponderance of evidence
only (Ocampo vs. Jenkins, 14 Phil. 681). Therefore, the insufficiency of evidence to support a murder
charge does not imply that there is no sufficient evidence to support the civil case based on the
same alleged act.
It is highly speculative to conclude that the plaintiffs' cause of action would stand or fall on the
strength of the testimony of Dolores Ayuste who was convicted of perjury on such alleged testimony.
A decision should be based on facts not on mere speculations or beliefs.1wphi1
Finally, the trial court dismissed the case against Ferdinand Calalang motu proprio based on the
ground that there is no valid cause of action against him. This is not a ground for dismissal of action
under Rule 16; but the failure of the complaint to state a cause of action. The pleadings,
memorandum and motion for reconsideration and opposition, thereto, might show that there is no
valid cause of action against Ferdinand Calalang; still, the court is not allowed by law to dismiss the
case motu proprio. As long as there is a cause of action in the complaint itself, procedural due
process demands that there must be a hearing on the merits with the complaint as "prima facie
evidence of the facts therein stated." (People vs. Dy, 158 SCRA 111). Therefore, the plaintiffs should
be given their day in court to vindicate their claim to the fullest.
49. PERPETUAL SAVINGS BANK vs. JOSE ORO B. FAJARDO and EMMANUEL F. DEL
MUNDO
G.R. No. 79760 June 28, 1993

FACTS:

1. On 29 December 1982, J.J. Mining and Exploration Corporation ("J.J. Mining") executed
and delivered to Perpetual Savings Bank ("Bank") a promissory note in the amount of
P750,000.00 payable in one lump sum upon maturity on 29 January 1984, with interest at 23%
per annum (with penalty rate of 3% per month)
2. Jose Oro B. Fajardo and Emmanuel F. Del Mundo. Officers of J.J. Mining, facilitated
the said transaction. Atty. Del Mundo was apparently also counsel for J.J. Mining.
3. J.J. Mining did not pay the amount of the indebtedness upon maturity and was sued.
4. Fajardo and Del Mundo were also sued in their personal capacities for allegedly
contracting the loan fully knowing that the JJ Mining would be unable to pay the same upon
maturity, and/or that they used the proceeds of the loan for their own personal benefit;
5. Defendant Jose Jalandoni is impleaded herein in his personal capacity also as
alternative Defendant, as the owner of 94% of the subscribed capital stock of Defendant
Corporation and for using the proceeds thereof for his own personal benefit fully knowing that
the Defendant Corporation was with inadequate capital to meet its debts.
6. Despite the fact that the paid up capital of JJ Mining was only P100,000.00, it managed
to borrow P750,000.00 from Plaintiff Bank secured only by shares of stocks of Pamana Mining
Corp. also owned by Jalandoni;
7. Fajardo and Del Mundo filed a Motion to Dismiss on the ground that the complaint had
failed to state a cause of action against them. The Bank filed an Opposition to the Motion to
Dismiss, invoking, among other things, Section 13, Rule 3 of the Rules of Court, which provides
that:

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"Alternative defendants. Where the plaintiff is uncertain against which of several persons he
is entitled to relief, he may join any or all of them as defendants in the alternative, although a
right to relief against one may be inconsistent with a right to relief against the other."
RTC: ifo Bank. Denies Fajardo and Del Mundos Motion to Dismiss. Fajardo and Del Mundo
appeals, after MR is denied.
SC: remands case to CA
CA: reverses TCs denial of Motion to Dismiss. Bank, as liquidator, now appeals.
ISSUE:
WON the complaint filed in Civil Case No. 14501 state a cause of action against Respondents
Fajardo and Del Mundo, as distinguished from J.J. Mining, on whose behalf they had purported
to act?

RULING:
NO.
1. If it be assumed that respondents Fajardo and Del Mundo were properly authorized, and
acted within the scope of their authority, to sign for and in behalf of J.J. Mining for the said loan,
then it is J.J. Mining as maker of the note which is directly liable to petitioner Bank for
repayment of such loan, and not Fajardo and DelMundo. After all, JJ Mining has a personality
separate and distinct from the persons who have ,been duly authorized to represent the
corporation in that particular transaction.
2. On the other hand if Fajardo and Del Mundo somehow acted in excess of their authority
as agents or representatives of J.J. Mining, then in principle Fajardo and Del Mundo would be
personally liable upon the promissory note, instead of the borrower corporation. J.J. Mining as a
separate juridical person would not be so liable, unless it be shown that J.J. Mining actually
received all or part of the proceeds of the loan and (presumably) benefited from such loan
proceeds, and to that extent, had impliedly ratified the transaction. 3. Thus, the complaint
alleges two (2) distinguishable bases for sustaining the suit. Firstly, Fajardo and Del Mundo are
being sued as tort-feasors who contracted the loan although they allegedly knew that the
apparent principal obligor, J.J. Mining, would never be able to pay the loan upon maturity. The
cause of action here is basically fraudulent inducement, concealment or misrepresentation
exercised upon petitioner Bank which was misled into granting and releasing the loan. The
second basis for suing Fajardo and Del Mundo in their personal and individual capacities is that
they allegedly used the proceeds of the loan for their own personal benefit, rather than for the
benefit of the borrower corporation.
4. In respect of these twin, related, bases for personal liability to the creditor, the Bank
stated complaint that J.J. Mining had "received value" "thru [respondents] Fajardo and Del
Mundo." Thus, the Bank has alleged that the proceeds of the loan were delivered to the
borrower corporation by delivering them to respondents Fajardo and Del Mundo.
5. The state of mind of petitioner Bank whether it was" uncertain" or whether it was
"dead sure as night follows day" against which of several defendants it is entitled to relief is,
of course, immaterial, except to the extent that such state of mind is externalized by the
allegations of the complaint. Petitioner Bank, in paragraph 1.6 in relation to paragraph 2.1 and
2.2 of its complaint, had pleaded, with sufficient clarity, its claimed rights against alternative
defendants: the borrower corporation and respondents Fajardo and Del Mundo. That the rights
pleaded against the borrower corporation are prima facie inconsistent with the rights pleaded
against respondents Fajardo and Del Mundo, is also clear: either the borrower corporation alone
is liable; or respondents Fajardo and Del Mundo are alone liable in lieu of J.J. Mining; or
respondents Fajardo and Del Mundo are solidarily liable with J.J. Mining.

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50. CITY OF CEBU, petitioner, vs. THE COURT OF APPEALS (SIXTEENTH DIVISION), HON. JUDGE
RODOLFO BELLAFLOR and MERLITA CARDENO, respondents.

FACTS:
Private respondent Merlita Cardeno is the owner of a parcel of land with an area of
2,019 square meters located at Sitio Sto. Nino, Alaska-Mambaling and covered by Transfer
Certificate of Title No. 116692. On February 25,1992, the petitioner, City of Cebu, filed a complaint
for eminent domain against private respondent with Branch II of the Regional Trial Court (RTC) of Cebu
City seeking to expropriate the said parcel of land.
` Cardeno filed a motion to dismiss asseverating that the allegations in the Citys
complaint do no show compliance with the condition precedent of a valid and definite offer.
The allegation states: that repeated negotiations had been made with the defendant to have the
aforementioned property purchased by the plaintiff through negotiated sale without resorting to
expropriation, but said negotiations failed.
The RTC dismissed the complaint holding that petitioner City of Cebu has not
complied with the condition precedent, hence, the complaint does not state a cause of action.
The CA affirmed the ruling of the RTC. According to the CA an allegation of
repeated negotiations made with the private respondent for the purchase of her property by the
petitioner, "cannot by any stretch of imagination, be equated or likened to the clear and specific
requirement that the petitioner should have previously made a valid and definite offer to purchase." It
further added that the term "negotiation" which necessarily implies uncertainty, it consisting of acts
the purpose of which is to arrive at a conclusion, may not be perceived to mean the valid and
definite offer contemplated by law.
Petitioner thus filed with the SC a petition for review on certiorari insisting that the
complaint sufficiently states compliance with the requirement of a valid and definite offer.
Respondent, on the other hand, argues that, by definition, negotiations run the whole range of acts
preparatory to concluding an agreement, from the preliminary correspondence; the fixing of the terms
of the agreement; the price; the mode of payment; obligations of the parties may conceive as
necessary to their agreement." Thus, "negotiations" by itself may pertain to any of the foregoing and
does not automatically mean the making of "a valid and definite offer."

ISSUE:

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 WON the City has complied with the condition precedent of a valid and definite offer

HELD:
YES. The complaint state a cause of action. A complaint should not be dismissed
upon a mere ambiguity, indefiniteness or uncertainty of the cause of action stated therein for
these are not grounds for a motion to dismiss but rather for a bill of particulars. In other words, a
complaint should not be dismissed for insufficiency unless it appears clearly from the face of the
complaint that the plaintiff is not entitled to any relief under any state of facts which could be proved
within the facts alleged therein.
The error of both the RTC and respondent Court of Appeals in holding that the
complaint failed to state a cause of action stems from their inflexible application of the rule
that: when the motion to dismiss is based on the ground that the complaint states no cause of action,
no evidence may be allowed and the issue should only be determined in the light of the allegations of the
complaint. However, this rule is not without exceptions. The trial court may 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.
All documents attached to a complaint, the due execution and genuineness of which
are not denied under oath by the defendant, must be considered as part of the complaint without need
of introducing evidence thereon. Additionally, the general rule is that a motion to dismiss hypothetically
admits the truth of the facts alleged in the complaint.
Thus, Ordinance No.1418, with all its provisions, is not only incorporated into the
complaint for eminent domain filed by petitioner, but is also deemed admitted by private
respondent. A perusal of the copy of said ordinance which has been annexed to the
complaint shows that the fact of petitioners having made a previous valid and definite offer to
private respondent is categorically stated therein.

Thus, the second whereas clause of the said ordinance provides as follows: The
city government has made a valid and definite offer to purchase subject lot(s) for the public
use aforementioned but the registered owner Mrs. Merlita Cardeno has rejected such offer. The
foregoing showed that the petitioner had in fact complied with the condition precedent of "a valid
and definite offer" set forth in Sec. 19 of R.A. 7160.

51. INDIANA AEROSPACE UNIVERSITY vs. COMMISSION ON HIGHER EDUCATION

FACTS:

Through the investigation of the CHED it shows in their records that the petitioner has not filed
any amended article of incorporation changing its name with the use of university. Despite the
advice of the chairman of CHED to not to use the term university in its corporation name
without compliance with the requisites of CMO. 48, petitioner made local and national
advertisement featuring its University status. Petitioner was served with a cease and desist
order by the respondent. It appealed from the order and promised to follow the provisions of
CMO 48 but was denied.Petitioner filed a Complaint for Damages with prayer for Writ of
preliminary and Mandatory Injunction and Temporary Restraining Order against [respondent],
docketed as Civil Case No. 98-811 before public respondent judge.
Respondent filed a Special Appearance with Motion to Dismiss, based on 1) improper venue;
lack of authority of the person instituting the action; and 3) lack of cause of action. Petitioner
filed its Opposition to the Motion to Dismiss. Public respondent judge denied respondents
Motion to Dismiss and at the same time, issued a Writ of preliminary Injunction in favor of
petitioner. Respondent, in the same Order, was directed to file its Answer within fifteen (15)days
from receipt of said Order.
The appellate court ruled that the Writ of Preliminary Injunction had improvidently been issued.
The doubtful right claimed by petitioner is subordinate to the public interest to protect
unsuspecting students and their parents from the unauthorized operation and misrepresentation
of an educational institution. Respondent should not have been declared in default, because its
answer had been filed long before the RTC ruled upon petitioners Motion to declare respondent
in default. Thus, respondent had not obstinately refused to file an Answer; on the contrary, its
failure to do so on time was due to excusable negligence. Declaring it in default did not serve
the ends of justice, but only prevented it from pursuing the merits of its case.

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 Petitioner alleges that the appellate court committed a reversible error in giving due course to
respondent petition for certiorari filed away beyond the 60 day reglamentary period prescribed
by rule 65 sec.4 of the Rules of Court.

ISSUE:

WON the Appellate Court erred in giving due course to respondents petition for certiorari filed
beyond the reglementary period.

RULING:

We hold that respondent's Petition for Certiorari was seasonably filed. In computing its
timeliness, what should have been considered was not the Order of August 14, 1998, but the
date when respondent received the December 9, 1998 Order declaring it in default. Since it
received this Order only on January 13, 1999, and filed its Petition for Certiorari on February 23,
1999, it obviously complied with the sixty-day reglementary period stated in Section 4, Rule 65
of the 1997 Rules of Court. Moreover, the August 14, 1998 Order was not a proper subject of
certiorari or appeal, since it was merely an interlocutory order.

Petitioner also contends that certiorari cannot prosper in this case, because respondent did not
file a motion for reconsideration before filing its Petition for Certiorari with the CA. Respondent
counters that reconsideration should be dispensed with, because the December 9, 1998 Order
is a patent nullity.

The general rule is that, in order to give the lower court the opportunity to correct itself, a motion
for reconsideration is a prerequisite to certiorari. It is also basic that a petitioner must exhaust all
other available remedies before resorting to certiorari. This rule, however, is subject to certain
exceptions such as any of the following: (1) the issues raised are purely legal in nature, (2)
public interest is involved, (3) extreme urgency is obvious or (4) special circumstances warrant
immediate or more direct action. It is patently clear that the regulation or administration of
educational institutions, especially on the tertiary level, is invested with public interest. Hence,
the haste with which the solicitor general raised these issues before the appellate court is
understandable. For the reason mentioned, we rule that respondent's Petition for Certiorari did
not require prior resort to a motion for reconsideration.

52. BANGKO SILANGAN DEVELOPMENT BANK vs. COURT OF APPEALS

FACTS:

Private respondent Umandal-Bausas is a depositor of petitioner BSDB, and that upon

attempt to withdraw Five Thousand Pesos from that savings account she was told that the
withdrawal could not be done because her brother, Antonio Umandal, had already withdrawn the
amount of Fifteen Thousand Pesos allegedly with her written authorization and that her
remaining balance was only Eight Hundred Pesos. Respondent Bausas then inquired about the
withdrawal slip and found that the signatures appearing thereon were not hers and neither that
of her brother.
Petitioner BSDB informed respondent Bausas that the investigation it had conducted on the
matter revealed her brother, Antonio Umandal, bearing her passbook and the withdrawal slip to
which her signature was affixed, withdrew the amount of Fifteen Thousand Pesos The petitioner
bank asserted that it observed the usual procedure in bank transactions - it made the proper
verification, posted the withdrawal on the passbook and the bank ledger, and approved the
withdrawal.
As a result of that information, respondent Bausas sought the help of the National Bureau of
Investigation . After an investigation, a case was filed with the Office of the Provincial Prosecutor
of Batangas. It appears that respondent Bausas sought another venue for airing her complaint -
the press.
Aggrieved, petitioner filed in the RTC of Manila a complaint for damages against respondent
Bausas and the publisher. The complaint alleged that the "series of publications" were "clearly
defamatory and libelous". Petitioner prayed for compensatory damages, moral damages and
exemplary damages.
While Civil Case No.91-56185 was pending in the RTC of Manila Bausas, joined by her
husband Ricardo, filed Civil Case No. 221, a complaint for a sum of money, with damages,

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against petitioner BSDB before the RTC of Batangas. The complaint specifically prayed that
petitioner BSDB be ordered to pay them (a) Fifteen Thousand Pesos "plus whatever balance"
remained of her deposit, including accrued interests thereon; (b litigation expenses and/or
damages.
Instead of filing a responsive pleading to the complaint, petitioner BSDB filed a motion to
dismiss, alleging that (a) there was another action pending between the same parties for the
same case (sic); (b) the action caused the splitting of the cause of action raised in the answer
and counterclaim in Civil Case No. 91-56185; (c) the action violated the principle of multiplicity
of suits, and; (d) the filing of the complaint constituted forum-shopping. However the RTC of
Batangas issued a Resolution denying the motion to dismiss. Petitioner BSDB then filed a
motion for reconsideration which the RTC of Batangas denied.
Petitioner BSDB elevated the matter to the Court of Appeals via a petition for certiorari,
prohibition and mandamus, seeking the reversal of the said Resolution and Order of the RTC of
Batangas. The Court of Appeals rendered the now assailed Decision dismissing petitioner
BSDB's petition for certiorari, prohibition and mandamus and upholding the denial of its motion
to dismiss Civil Case No. 221. The appellate court held that an order denying a motion to
dismiss, being interlocutory, cannot be the subject of a petition for certiorari.

ISSUES:

1. WON the respondent court erred when it held that the petition for certiorari, prohibition and
mandamus seeking to nullify and set aside the order of the respondent judge denying
petitioner's motion to dismiss "does not fall within the ambit of the exception" to the general rule
that an order denying a motion to dismiss is not an interlocutory order and cannot be the subject
of a petition for certiorari.
2. WON there is no litis pendentia between civil case no. 221 and civil case no. 91-56185.

RULING:

1. Interlocutory Orders; An interlocutory order does not terminate nor finally dispose of the case,
but leaves something to be done by the court before the case is finally decided on the merits.
An order denying a motion to dismiss is merely interlocutory and therefore not appealable, nor
can it be the subject of a petition for review on certiorari, although the special civil action for
certiorari may be availed of in case there is grave abuse of discretion or lack of jurisdiction on
the part of the lower court. Our recent ruling in Espao , Sr. vs. Court of Appeals applies to
the case at bar, to wit: We find occasion here to state the rule, once more, that an order
denying a motion to dismiss is merely interlocutory and therefore not appealable, nor can it be
the subject of a petition for review on certiorari. Such order may only be reviewed in the ordinary
course of law by an appeal from the judgment after trial. The ordinary procedure to be followed
in that event is to file an answer, go to trial, and if the decision is adverse, reiterate the issue on
appeal from the final judgment. This is exactly what petitioner should have done in this case
after his prayer for the dismissal of Civil Case No, 21-88 was denied by the trial court. Although
the special civil action for certiorari may be availed of in case there is grave abuse of discretion
or lack of jurisdiction on the part of the lower court, that vitiating error is indubitably not present
in the instant case.
2. While it is true that the two (2) cases are founded on practically the same set of facts, as
correctly observed by the Court of Appeals, it cannot be said that exactly the same evidence are
needed to prove the causes of action in both cases. Thus, in Civil Case No. 91-56185 of the
RTC of Manila, the evidence needed to prove that petitioner sustained damage to its reputation

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and goodwill is not the same evidence needed in Civil Case No. 221 of the RTC of Batangas to
prove the allegation that a substantial amount of respondent Bausas' bank deposit in petitioner's
bank was illegally withdrawn without her consent or authority. The RTC of Batangas and the
Court of Appeals, therefore, did not abuse their discretion in denying petitioner's motion to
dismiss which was based on the ground of litis pendentia..
The petitioner's contention that private respondent is guilty of forum-shopping must likewise fail.
Forum-shopping is "the act of a party against whom an adverse judgment has been rendered in
one forum, of seeking another (and possibly favorable) opinion in another forum other than by
appeal or special civil action of certiorari, or the institution of two (2) or more actions or
proceedings grounded on the same cause on the supposition that one or the other court might
look with favor upon the party." Where the elements of litis pendentia are not present or where a
final judgment in one case will not amount to res judicata in the other, there is no forum-
shopping. In the case at bar, there is no forum shopping, inasmuch as earlier discussed, the
cause of action in Civil Case No. 91-56185 is separate and distinct from the cause of action in
Civil Case No. 221.

53. YUTINGCO VS. COURT OF APPEALS

FACTS:

Private respondent Development Bank of the Philippines filed a complaint dated petitioners for
the collection of a sum of money with prayer for issuance of a writ of preliminary attachment.
DBP alleged that it granted a credit accommodation to Nikon Industrial Corporation under the
terms and conditions of the Credit Line Agreement.
Private respondent sought petitioners payment of the obligation by virtue of the Continuing
Suretyship Agreement by filing the collection suit docketed as Civil Case No. 97-2653 before the
Regional Trial Court.
Respondent Judge Salvador Tensuan granted private respondents motion and issued a writ of
attachment. Petitioners filed a Motion to Dismiss on the ground that (1) the complaint failed to
state a cause of action; (2) a condition precedent for the filing of the claim was not complied
with; and (3) the Court had no jurisdiction over the subject matter.
On May 7, 1998, respondent Judge issued an order denying the motion to dismiss.
To this, petitioners filed a Motion for Reconsideration which was denied by the respondent
Judge for lack of merit.
On July 7, 1998, petitioners received a copy of the aforementioned Order dated 7 May
1998. On September 7, 1998, petitioners filed before the Court of Appeals a Motion for
Extension of Time to File Petition for Certiorari i under Rule 65 of the Rules of Court, for
an additional period of fifteen (15) days, or until 22 September 1998.
On September 22, 1998, petitioners filed their Petition for Certiorari with Urgent Prayer for
Issuance of a Writ of Temporary Restraining Order and Preliminary Injunction dated September
21, 1998.
On November 18, 1998, petitioners received a copy of the Resolution dated November 9, 1998,
denying petitioners motion for extension of time to file petition for certiorari. It held that:

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CONSIDERING that Sec. 4, Rule 65 of the 1997 Rules of Civil Procedure fixed the period
for filing a petition for certiorari at sixty (60) days from notice of the judgment, order or
resolution sought to be assailed, petitioners motion for extension of time of fifteen (15)
days within which to file the petition is hereby DENIED.
Petitioners motion for reconsideration was also denied by the Court of Appeals in a Resolution
dated January 13, 1999
In their motion for reconsideration petitioners invoked substantial justice over technical rules of
procedure. Nonetheless, while it is true that litigation is not a game of technicalities, it is equally
true that every case must be prosecuted in accordance with the prescribed procedure to insure
an orderly and speedy administration of justice.
The motion for reconsideration is DENIED for lack of merit.

ISSUES:

WON Should the Court of Appeals have admitted, as a matter of substantial justice, the Petition
for Certiorari and if so is there merit in the petition filed with the Court of Appeals.

RULING:

As a general rule, an order denying a motion to dismiss is interlocutory and cannot be the
subject of the extraordinary petition for certiorari or mandamus, exceptions. Petitioners also
assert that their petition should not have been dismissed on a technicality, considering that what
was being questioned in their petition for certiorari before the Court of Appeals was the propriety
of the lower courts denying their motion to dismiss. But again, we have to stress here and now
that as a general rule, an order denying a motion to dismiss is interlocutory and cannot be the
subject of the extraordinary petition for certiorari or mandamus. Petitioners recourse is to file an
answer and to interpose as defenses the objections raised in their motion to dismiss, proceed to
trial, and in case of an adverse decision, elevate the entire case by appeal in due course. Of
course, there are exceptions to the aforecited rule. Among them are: (a) when the trial court
issued the order without or in excess of jurisdiction; (b) when there is patent grave abuse of
discretion by the trial court; or (c) when appeal would not prove to be a speedy and adequate
remedy as when an appeal would not promptly relieve a defendant from the injurious effects of
the patently mistaken order maintaining the plaintiffs baseless action and compelling the
defendants to needlessly go through a protracted trial and clogging the court dockets with
another futile case

54. EDGARDO PINGA vs. THE HEIRS OF GERMAN SANTIAGO

FACTS:

The Heirs of Santiago filed an injunction against Pinga alleging that Pinga had been unlawfully
entering the coco lands of the respondent cutting wood and bamboos and harvesting the fruits
of the coconut trees. As a counterclaim, Pinga contests the ownership of the lands to which
Pinga was harvesting the fruits. However, due to failures of Heirs of Santiago to attend the
hearings, the court ordered the dismissal of said case. Respondents thus filed an MR not to
reinstate the case but to ask for the entire action to be dismissed and not to allow petitioner to
present evidence ex parte.RTC granted the MR, hence the counterclaim was dismissed. RTC
ruled that compulsory counterclaims cannot be adjudicated independently of plaintiffs cause of
action vis a vis the dismissal of the complaint carries with it the dismissal of the counterclaim.
Petitioner then elevates it to the SC by way of Rule 45 on pure questions of law.

ISSUE:

Whether or not dismissal of original complaint affects that of the compulsory counter claims?

RULING:

NO. the counterclaims, in this case, can stand on its own. Rule 17 Sec 3 provides: If for any
cause, the plaintiff fails to appear on the date of his presentation of his evidence x x x the
complaint may be dismissed upon motion of the defendant or upon the courts own motion,
without prejudice to the right of the defendant to prosecute his counterclaim in the same or in a

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separate action. The dismissal of the complaint does not carry with the dismissal of the
counterclaim, compulsory or otherwise. In fact, the dismissal of the complaint is without
prejudice to the right of defendants to prosecute his counterclaim. Section 3 contemplates a
dismissal not procured by plaintiff, albeit justified by causes imputable to him and which, in the
present case, was petitioner's failure to appear at the pre-trial. This situation is also covered by
Section 3, as extended by judicial interpretation, and is ordered upon motion of defendant or
motu proprio by the court. Here, the issue of whether defendant has a pending counterclaim,
permissive or compulsory, is not of determinative significance. The dismissal of plaintiff's
complaint is evidently a confirmation of the failure of evidence to prove his cause of action
outlined therein, hence the dismissal is considered, as a matter of evidence, an adjudication on
the merits. This does not, however, mean that there is likewise such absence of evidence to
prove defendant's counterclaim although the same arises out of the subject matter of the
complaint which was merely terminated for lack of proof. To hold otherwise would not only work
injustice to defendant but would be reading a further provision into Section 3 and wresting a
meaning there from although neither exists even by mere implication .Thus understood, the
complaint can accordingly be dismissed, but relief can nevertheless be granted as a matter of
course to defendant on his counterclaim as alleged and proved, with or without any reservation
therefore on his part, unless from his conduct, express or implied, he has virtually consented to
the concomitant dismissal of his counter claim. The present rule embodied in Sections 2 and 3
of Rule 17 ordains a more equitable disposition of the counterclaims by ensuring that any
judgment thereon is based on the merit of the counterclaim itself and not on the survival of the
main complaint. Certainly, if the counterclaim is palpably without merit or suffers jurisdictional
flaws which stand independent of the complaint, the trial court is not precluded from dismissing
it under the amended rules, provided that the judgment or order dismissing the counterclaim is
premised on those defects. At the same time, if thecounterclaim is justified, the amended rules
now unequivocally protect such counterclaim from peremptorydismissal by reason of the
dismissal of the complaint. Petition granted.

55. FILINVEST LAND, INC vs. HON. COURT OF APPEALS

FACTS:

The Department of Agrarian Reform awarded to Ricardo Alvarez the right to purchase the land
in question. Ricardo Alvarez purchased the land. The Deed of Sale specifically prohibited the
transfer of the land within ten (10) years from the issuance of the certificate of title to any person
other than the vendees relatives within the third civil degree by consanguinity or affinity who
are, at the same time, qualified beneficiaries. This restriction was in accordance with Section 62
of Republic Act No. 3844, or the Agricultural Land Reform Code.
However, pending the issuance of the certificate of title of the said land, Presidential Decree No.
1474, Declaring the Laguna Resettlement Project of the Department of Agrarian Reform
Suitable for Residential, Commercial, or Industrial, or other Non-Agricultural Purposes This
effectively repealed the ten-year prohibition on the transfer of agrarian lands situated in the
Laguna Resettlement Project. Only 16 days after the title was issued, Alvarez sold the said land
to Mercedes Oliver. Mercedes Oliver sold the subject land to Filinvest.
The heirs of the late Ricardo Alvarez filed a case for reconveyance, redemption and damages
against Mercedes Oliver before the Regional Trial Court (RTC) of Bian, Laguna.
Respondents filed an Amended Complaint for Annulment of Title with Reconveyance, they
argued that such sale was void since the Deed of Sale was executed in violation of the law
which enjoins the sale of the subject land. The case was dismissed for failure of the
respondents and counsel to appear during the hearing.
Respondents filed a complaint against Mercedes Oliver and Filinvest before the Provincial
Agrarian Reform Adjudication (PARAD) seeking to annul the Deed of Sale between the Spouses
Alvarez and Mercedes Oliver and the subsequent transfer between Mercedes Oliver and
Filinvest, on grounds similar to the complaint filed before the RTC of Bian.

81 | P a g e
 Mercedes Oliver filed a Motion to Dismiss on the grounds of res judicata and that the PARAD
had no jurisdiction over the subject matter of the case. Filinvest similarly filed a motion to
dismiss on the grounds of res judicata and laches.
The PARAD of Sta. Cruz, Laguna, dismissed the complaint on the ground of res judicata.
Moreover, it ruled that the sale between the Spouses Alvarez and Mercedes Oliver was valid.
On appeal, the DARAB reversed and set aside the Decision dismissing the complaint, and
ordered the reversion of the subject property to the government
The DARAB ruled that res judicata as a bar against filing a complaint with the PARAD is not
applicable in this case since there was no adjudication of the merits before the RTC of Bian
The DARAB ruled that the sale between Ricardo Alvarez and Mercedes Oliver was a violation of
the ten-year prohibition against the transfer of the land imposed by the Deed of Sale between
the government and Ricardo Alvarez, in accordance with Section 62 of Republic Act No. 3844.
Such act rendered the Deed of Sale executed by the DAR in favor of Ricardo Alvarez void, and,
therefore, the subsequent transfers to Mercedes Oliver and Filinvest were, likewise, void.
The petitioners then filed a Petition for Certiorari under Section 43 of the 1997 Rules of Court
before the Court of Appeals but was again dismissed for lack of merit and the assailed Decision
of the DARAB was affirmed.

ISSUE:

1. WON the doctrine of res judicata does not apply to bar respondents complaint in
DARAB case no. Iv-032-l

RULING:

A dismissal for failure to prosecute has the effect of an adjudication on the merits, and operates
as res judicata, particularly when the court did not direct that the dismissal was without
prejudice. The only contention between the parties was whether the second requirement, that
the decision or order must have been based on the merits of the case, was met. In situations
contemplated in Section 3, Rule 17 of the Rules of Court, where a complaint is dismissed for
failure of the plaintiff to comply with a lawful order of the court, such dismissal has the effect of
an adjudication upon the merits. A dismissal for failure to prosecute has the effect of an
adjudication on the merits, and operates as res judicata, particularly when the court did not
direct that the dismissal was without prejudice. - Dismissal without prejudice.

56. HEIRS OF GAUDIANE v. CA

FACTS:

This is a petition for review of Court of Appeals decision affirming that of the lower court
directing the heirs of Juana Gaudiane to divide LOT 4389 with the respondents and share
profits and rentals obtained therefrom and remit the same to them.

Felix and Juana were siblings and co-owned parcels of land in Dumaguete City. In 1927, Felix
executed a document called Escritura certifying his sale of one-half of his share in LOT 4156
declared under Tax Declaration 18321 to his sister, Juana. Felix and Juana eventually died.
However, heirs of Juana insisted that it was NOT only half of LOT 4156 that was sold to the
former by Felix but also LOT 4389 since said tax declaration was for the latter mentioned parcel
of land. As a result, they filed a pleading before the trial court seeking to direct the Register of
Deeds of Dumaguete City to cancel OCT 2986-A covering LOT 4389 and to issue a new title in
their favor (the Isos) which was opposed by the heirs of Felix on the ground that the Isos
falsified their copy of the Escritura by erasing LOT 4156 and intercalating in its place LOT
4389.

ISSUES:

a.) Whether or not the laches and prescription had set in?
b.) Whether or not CA committed a grave error in failing to give the claim of the petitioners due
course?

82 | P a g e
RULING:

YES. As a general rule, ownership over titled property cannot be lost through prescription.
Petitioners, however, in Tambot vs. Court of Appeals which held that titled property may be
acquired through prescription by a person who possessed the same for 36 years without any
objection from the registered owner who was obviously guilty of laches.

NO. The Court did not gravely err. The Escritura clearly stated and described that what was sold
was LOT 4156, not LOT 4398. Had it been Felixs intention to include LOT 4389 in the sale to
Juana, he would have so identified and described it in the deed of sale. Otherwise, it should be
deemed to have continued under their co-ownership. Petitioners claim is already rendered moot
by the ruling barring petitioners from raising the defense of exclusive ownership due to res
judicata. Even assuming arguendo that petitioners are not so barred, their contention is
erroneous. As correctly observed by the appellate court.

As explained earlier, only Lot No. 4156 was sold. It was through this misrepresentation that
appellees predecessor-in-interest succeeded in withholding possession of appellees share in
Lot No. 4389. Appellees cannot, by their own fraudulent act, benefit therefrom by alleging
prescription and laches.

83 | P a g e
i

57. CRUZ V. C
GR 164797, Feb 13, 2006

FACTS:

Here, is a Petition for Certiorari under Rule 65 of the Rules of Court which seeks to reverse and set
aside the decision of public respondent Court of Appeals dated 19 March 2004.
There were four cases in totality. The fourth case is the instant controversy for Annulment of Title with
Damages. Docketed as Civil Case No. 2583-02 filed by the private respondents (the Bunags) in
relation to which, a Motion for Outright Dismissal was interposed by the herein petitioners (which was
later on granted by the Court).
In all three cases, Mariano Bunag was included as party-plaintiff and Ernestina Concepcion as party-
defendant. The subject matter involved a parcel of land located in San Nicolas, Gapan City with an
area of 1,160 square meters, more or less.
The plaintiffs alleged that it is only now that they have learned of the existence of Civil Case No 1600
is without merit considering that in the Motion for the Outright Dismissal of Civil Case No. 2573, dated
September 19, 2002, its existence was already disclosed and even became the ground for the
dismissal of Civil Case No. 2573 on the ground of res judicata. However, when herein private
respondents interposed their Motion for Reconsideration, the court a quo reversed itself and reinstated
the present case
Dissatisfied, petitioners are now before the Highest Court charging that the Court of Appeals
committed grave abuse of discretion amounting to lack or excess of jurisdiction in rendering the
assailed decision and resolution.
Petitioners claimed res judicata applies in this case because all the elements thereof are present. On
the other hand, private respondents argued the contrary alleging that the second and fourth elements
are lacking. Private respondents asked that the instant case be not decided based on technicalities,
for substantial justice demands that technicalities should not be allowed to prevail over the substantive
right of a party litigant.

ISSUE:

Whether or NOT res judicata applies in the case at bar?

RULING:

Yes. Res Judicata applies. The Court finds no reason not to adhere to the doctrine of res judicata. A
case for Quieting of Title had been filed for the purpose of determining the ownership of the subject
land, but same was dismissed because the plaintiffs therein failed to attend the scheduled hearings for
the presentation of their evidence. As above discussed, the dismissal was an adjudication on the
merits. They plaintiffs had all the opportunity to present all the evidence for their cause but they failed
to do so. It is undeniable that there was no denial of due process in this case.
The doctrine of res judicata is a rule which pervades every well-regulated system of jurisprudence and
is founded upon two grounds embodied in various maxims of the common law, namely: (1) public
policy and necessity, which makes it to the interest of the State that there should be an end to litigation
- republicae ut sit litium, and (2) the hardship on the individual that he should be vexed twice for the
same cause - nemo debet bis vexari et eadem causa. A contrary doctrine would subject the public
peace and quiet to the will and neglect of individuals and prefer the gratification of the litigious
disposition on the part of suitors to the preservation of the public tranquility and happiness.
.
.

58. FREDERICK DAEL V. SPS. BELTRAN

FACTS:

Petitioner Frederick Dael filed a complaint for breach of contract and damages against the
respondents. RTC of Dumaguete City, however, dismissed it. Now, the petitioner raised a petition for
review on certiorari under Rule 45 on purely questions of law seeking also the reversal of the decision
of the lower court dismissing their original complaint against the respondent-spouses Beltran.

Dael alleged that the Beltrans sold him a parcel of land without disclosing that the land was previously
mortgaged. Possession and ownership of the property was delivered to him when he paid the bid
price. He further argued that Beltrans non-disclosure of the extrajudicial foreclosure constituted
breach of contract on the implied warranties in a sale of property as provided under Article 1547 of the
New Civil Code. He likewise claimed that he was entitled to damages because he had to pay for the
property in question twice.

On January 10, 2002, Sps. Beltran filed a Motion to Dismiss on the ground that Frederick Dael had no
cause of action since the contract to sell stated that the vendor was Benedicto Beltran and the vendee
was Frederick George Ghent Dael, not Frederick Dael.

In a hearing on the motion, Daels counsel, disclosed that petitioner Dael is the father of Frederick
George Ghent Dael whose name appears as the contracting party in the Contract to Sell dated July
28, 2000. Atty. Palma moved to reset the hearing to enable the petitioner to withdraw and have the
complaint dismissed, amended, or to enter into a compromise agreement with respondents.

On February 20, 2002, Dael filed a Notice of Dismissal praying that the case be ordered dismissed
without prejudice. Finding merit to Sps. Beltrans contention that Frederick Dael has no cause of action
against them since said he is not one of the contracting parties in the Contract to Sell, the RTC
granted the Motion to Dismiss with prejudice.

Arguing that the RTC erred in dismissing the complaint with prejudice based on Sps. Beltrans Motion
to Dismiss, and not without prejudice based on his Notice of Dismissal, Dael filed a Motion for
Reconsideration but it was denied by the RTC. Hence, he appealed.

Dael contended that the Rules of Civil Procedure expressly states that before the defendant has
served his answer or moved for a summary judgment, he has, as a matter of right, the
prerogative to cause the dismissal of a civil action filed, and such dismissal may be effected by
a mere notice of dismissal. He asserts it is the prerogative of the plaintiff to indicate if the Notice of
Dismissal filed is with or without prejudice and the RTC cannot exercise its own discretion and dismiss
the case with prejudice.

Sps. Beltran argued that the Motion to Dismiss they filed precedes the Notice of Dismissal filed by
Dael and hence, the trial court correctly gave it precedence and ruled based on the motion.

ISSUE:
Whether or not the RTC erred in dismissing the complaint with prejudice?

HELD:
Yes. Section 1, Rule 17 of the 1997 Rules of Civil Procedure provides:

SECTION 1.Dismissal upon notice by plaintiff. A complaint may be dismissed by the plaintiff by filing
a notice of dismissal at any time before service of the answer or of a motion for summary judgment.
Upon such notice being filed, the court shall issue an order confirming the dismissal. Unless
otherwise stated in the notice, the dismissal is without prejudice, except that a notice operates as an
adjudication upon the merits when filed by a plaintiff who has once dismissed in a competent court an
action based on or including the same claim.

Under this provision, it is mandatory that the trial court issue an order confirming such dismissal and,
unless otherwise stated in the notice, the dismissal is without prejudice and could be accomplished by
the plaintiff through mere notice of dismissal, and not through motion subject to approval by the
court. Dismissal is ipso facto upon notice and without prejudice unless otherwise stated in the
notice. The trial court has no choice but to consider the complaint as dismissed, since the
plaintiff may opt for such dismissal as a matter of right, regardless of the ground.

Respondents argued that the Motion to Dismiss they filed precedes the Notice of Dismissal filed by
petitioner and hence, the trial court correctly gave it precedence and ruled based on the motion.

This argument is erroneous. Section 1 of Rule 17 does not encompass a Motion to Dismiss. The
provision specifically provides that a plaintiff may file a notice of dismissal before service of the answer
or a motion for summary judgment. Thus, upon the filing of the Notice of Dismissal by the
plaintiff, the Motion to Dismiss filed by respondents became moot and academic and the trial
court should have dismissed the case without prejudice based on the Notice of Dismissal filed by the
petitioner.

Moreover, to allow the case to be dismissed with prejudice would erroneously result in res judicata and
imply that petitioner can no longer file a case against respondents without giving him a chance to
present evidence to prove otherwise. [Dael vs. Sps. Beltran, G.R. No. 156470, April 30, 2008]

59. MENDOZA VS. PAULE

FACTS:
On May 24, 1999 Eng. Eduardo Paule executed a special power of attorney authorizing Zenaida
Mendoza to participate in the pre-qualification and bidding of NIA project and to represent him in all
transactions related thereto.
MENDOZA, with SPA, joined in the public bidding and was awarded the NIA project. When Manuel de
la Cruz heard about it, he met up with MENDOZA to offer his heavy equipment services for hauling
purposes and a series of meetings followed among MENDOZA, CRUZ and PAULE until an agreement
of lease was finally established.
On April 27, 2000, PAULE for some reason revoked the SPA he previously issued to MENDOZA. As a
result, NIA refused to pay MENDOZA and she could no longer pay for the rentals of hauling equipment
to CRUZ as well. She advised CRUZ to go directly to NIA to collect rentals for the heavy equipment
used in the project but NIA insisted that it would only remit payment to the construction company of
PAULE as the winning contractor therefor.
CRUZ then filed a case against PAULE and NIA for collection of sum of money with damages. PAULE
in turn filed a third-party complaint against MENDOZA, who filed her answer thereto, with a cross-
claim against PAULE.
MENDOZA alleged that because of PAULEs whimsical revocation of the SPA, she was barred from
collecting payments from NIA hence she could not pay the rentals of the equipment to CRUZ and
because of this, her reputation was destroyed thus entitling her to actual and moral damages against
PAULE.
RTC ruled in favor of CRUZ and held PAULE liable. However, said court did not resolve the cross-
claim against PAULE. Both PAULE and MENDOZA appealed the decision before CA.
PAULE claimed that there was no agency that was created between him and MENDOZA regarding the
lease of equipment from CRUZ while MENDOZA, in her appeal, argued that the trial court erred in
deciding a case without affording her the opportunity to present evidence on her cross-claim against
PAULE.
CA dismissed CRUZs complaint and MENDOZAs appeal.

ISSUE:
Whether or not the respondent court erred in affirming the trial court decision resolving her cross-claim
against PAULE?

RULING:

The respondent court erred when it affirmed the trial court decision that by ruling on the plaintiffs
complaint; in effect, resolving MENDOZAs cross-claim against PAULE thereby depriving her all the
opportunity to collect damages from PAULE.
The Court finds that MENDOZA was acting within the authority granted by PAULE when she hired the
services of CRUZs heavy equipment for the purpose of clearing and disposal of waste which are
necessary to PAULEs obligation under the NIA project. As such, PAULE was adjudged liable to the
former for unpaid rentals of heavy equipment and for construction materials which MENDOZA
obtained for use in the subject NIA project. Wherefore, judgment is granted in favor of MENDOZA and
against the defendant PAULE.

60. BENEDICTO V. LACSON

FACTS:

Philippine Sugar Commission (PHILSUCOM) was created and vested with the power to act as the
single buying and selling agency of sugar in the Philippines. PHILSUCOM organized National Sugar
Trading Corporation (NASUTRA) as its buying marketing arm. Petitioner Benedicto was the concurrent
Chairman and President of Traders Royal Bank and NASUTRA.

Respondents including Lacson (individual sugar planters and agricultural corporations) filed a
complaint based on a claim for unpaid shares in pursuant to Sugar Order No. 2 s. 1979-1980. The
claims cover the sugar export sales supposedly undervalued by NASUTRA and coursed through
Traders Royal Bank. Due to the alleged intended undervaluation on the sales of export sugar,
Benedicto, as President and concurrent Chairman of both Traders Royal Bank and NASUTRA was
charged with fraud and bad faith by the respondents, not only in refusing to furnish them accurate data
on NASUTRAs export sugar sales, but more importantly, in under-reporting and under-declaring the
true prices of the shipments.

Benedicto petitioner filed a Motion to Dismiss, arguing therein (1) that respondents had violated the
rule on forum shopping; (2) that respondents have no cause of action; (3) that the issues involved
are res judicata or rendered moot by case law; and (4) that the claim or demand has already been
paid.

According to Benedicto, NATSURA had no obligation to share its profits to respondents. The
questioned transactions were already perfected and consummated both in delivery of sugar and
payment of the price; and that; lastly, NATSURA has long been dissolved and liquated under PD 2005
& EO 114.

On March 26, 1996, respondents filed a Consolidated Opposition to Dismiss. However, the RTC
granted motion to dismiss the complaint filed by Benedicto. Said court also ruled that the respondents
were guilty of forum shopping as they had filed already a similar case with the RTC Pasig even if the
same had been withdrawn already and since NATSURA has been dissolved therefore no cause of
action would prosper against NATSURA.

Respondents appealed the RTC decision to the CA.CA reversed the same. Aggrieved by the CA
decision, petitioner filed a Motion for Reconsideration which was also denied by the CA hence this
petition before the Highest Court.

ISSUES:
Whether or not CA erred in absolving the respondents for violating the anti-forum shopping?

RULING:

The Court finds no merit in the petition. No forum shopping took place since the Pasig Case was
already dismissed upon the instance of the plaintiffs even before the Bacolod Case. As a rule,
plaintiff, at any time before service of answer, dismiss an action by filing a notice of dismissal.
The CA was correct in its ruling that even if the case is subject to test to determine an existence of
forum shopping or under the rules on litis pendentia and/or res judicata, the danger of conflicting
decisions cannot be present, since the Pasig case was dismissed even before a responsive pleading
was filed by petitioner.

61. Anson and Cheng vs. Pacific Banking Corporation

Facts:

Petitioners Anson Trade Center Inc. (ATCI) and Anson Emporium Corporation (AEC) are corporations
engaged in retail and wholesale general merchandising and Cheng is the Vice Head. Respondent
bank is a closed banking institution undergoing liquidation process by PDIC. ATCI obtained loan
amounting to P4,350,000.00 and AEC P1,000,000 from respondent bank. As a security, Chen along
with the late KengGiok provided two Continuing Surety Agreements. It provided that respondent bank
has the right to retain a lien upon any or all properties in the accounts of ATCI and AEC. Petitioners
did not pay their loans despite several attempts. Petitioner Chen filed Motions to Dismiss instead of
filing an Answer to the Complaint. AEC, ATCI, and the Estate of KengGiok filed their replies. KengGiok
was then dropped as a defendant because he was long dead prior to the proceedings. A pre-trial
conference was held. The possibility of an amicable settlement was explored but it was unsuccessful.
The respondents then failed to attend the next scheduled pre-trial. Petitioners filed a Motion to Dismiss
on the ground of the non-appearance of respondent in the pre-trial - Granted. Respondent filed a MR
and prayed for the relaxation of the rule on non-appearance in pre-trials citing excusable negligence
and interest of justice Denied. Respondent filed a Petition for Certiorari before CA. It alleged that
their absence was not deliberate or intentional. Further, PDIC was undergoing a reorganization which
resulted to trimming their manpower handling the litigation work. -Granted

Issue:

Whether or Not respondents non-appearance in the pre-trial is excusable

Ruling:

Yes. Pre-trial- a procedural device intended to clarify and limit the basic issues raised by the parties
and to take the trial of cases out of the realm of surprise and maneuvering. Rule 18, Sec. 5 provides
that non-appearance by the plaintiff in the pre-trial shall be the cause for dismissal of the action.
However, Rule 18, Sec. 4 provides that non-appearance of a party of a party may be excused if there
is a valid cause. SC found a valid cause in the case at bar -Respondents did not intentionally snub the
proceedings. This was caused by the reorganization of PDIC.

62. INTERLINING CORP., et al. V. PHILIPPINE TRUST COMPANY

FACTS:

Here, a petition for review on certiorari was raised seeking to set aside the CA decision in C.V. No.
41129.

In April 1980, PHILTRUST granted a credit line and sent a domestic letter of credit and trust receipt to
Interlining Corp. for the importation of raw materials for its business. A month later, other petitioners
(one of whom is Gonzales) executed an Undertaking of Suretyship agreement binding themselves to
guarantee, jointly and severally with petitioner corporation, all such amount as may be due to
respondent PHILTRUST by virtue of the availment of its credit facilities.
INTERLINING availed of respondents credit facilities several times and eventually made partial
payments but still failed to settle its entire obligation which amounted already to over P2 million by
June of 1984 despite several demands from PHILTRUST prompting the latter to file a complaint before
RTC MANILA for the collection of a sum of money against INTERLINING. On April 7, 1989, the trial
court issued its Pre-trial Conference Order relieving other petitioners from their obligations because
there was arrangement made between the plaintiff and defendant corporation. PHILTRUSTs counsel
submitted a motion stating therein two (2) issues for consideration by the trial court submitted later on
for resolution, viz:

a) whether or not petitioners herein can be made jointly or severally liable to plaintiff
b) whether or not there is novation

Finally, RTC Manila ordered INTERLINING to answer solely for its obligation. The court absolved other
individual petitioners from their joint and solidary liability for the debt of petitioner-corporation although
there was no novation of the loan contract between the parties. It held that the total liability for the
obligation was assumed by INTERLINING as per parties stipulation on April 8, 1991.

Respondent moved for reconsideration but was denied hence sought recourse before CA.

CA set aside the decision of the lower court and ruled that since the respondent did not stipulate on
the exclusion of the solidary liability issue, the individual petitioners should be held solidarily liable with
PHILTRUST but still for the amount adjudged by the trial court. Petitioners herein raised a motion for
reconsideration but was denied hence this petition for review before the Highest Court.

ISSUE:
Whether or not the counsel of respondent agreed to stipulate as to the release of the individual
petitioners from their solidary liability?

RULING:

NO. The Court finds no merit in the petition at all. The conduct of a pre-trial in civil actions has been
mandatory as early as January 1, 1964, upon the effectivity of the Revised Rules of Court. Pre-trial is
a procedural device intended to clarify and limit the basic issues between the parties. It thus
paves the way for a less cluttered trial and resolution of the case. Its main objective is to
simplify, abbreviate and expedite the trial, or totally dispense with it, as in the case at bar.

A careful and thorough review of the records, particularly the pre-trial hearings conducted on March 6,
1989 and April 8, 1991 and the subsequent pleadings in the case, reveals that respondents counsel
did not agree to relieve the individual petitioners of their obligation. During the pre-trial, the counsels
merely enumerated and stated their proposed stipulations but no such or official agreement had been
made on the proposed facts. In such case, the CA was justified in ruling that there was no official
agreement whatsoever that had been made hence no pact should be honored among the parties
involved in regard to the release of the individual petitioners from their solidary liability.
63. ESPIRITU vs. LAZARO
G.R. No. 181020
November 25, 2009

FACTS:

Petitioners Espiritu filed a complaint for recovery of personal property with damages and preliminary
attachment against respondents Lazaro and Sison among others, involving the alleged dollar time
deposit accounts left by the late PorfirioLazaro. The trial court granted the prayer for preliminary
attachment. Respondents' motion to discharge the attachment and the two motions to dismiss were
dismissed. Respondent Sison filed her answer with Counterclaim and crossclaim. Lazaro filed a
Cautionary Answer with Manifestation and a Motion to File a Supplemental/Amended Answer.

On Aug. 2002, petitioners received a copy of the cautionary answer. On July 2003, the trial court
dismissed the complaint due to petitioners failure to prosecute for an unreasonable length of time. CA
affirmed the dismissal of the case.

ISSUE:

Whether or not the trial court's dismissal of the case is proper.

RULING:

Yes. Section 1 of Rule 18 of the Rules of Court imposes upon the plaintiff the duty to set the case for
pre-trial after the last pleading is served and filed. Under Section 3 of Rule 17, failure to comply with
the said duty makes the case susceptible to dismissal for failure to prosecute for an unreasonable
length of time or failure to comply with the rules.

In every action, the plaintiffs are duty-bound to prosecute their case with utmost diligence and with
reasonable dispatch to enable them to obtain the relief prayed for and, at the same time, to minimize
the clogging of the court dockets.

It bears stressing that the sanction of dismissal may be imposed even absent any allegation and proof
of the plaintiffs lack of interest to prosecute the action, or of any prejudice to the defendant resulting
from the failure of the plaintiff to comply with the rules. The failure of the plaintiff to prosecute the
action without any justifiable cause within a reasonable period of time will give rise to the presumption
that he is no longer interested in obtaining the relief prayed for.

64. ZENAIDA POLANCO, et al vs. CARMEN CRUZ, represented by her attorney-in-fact,

VIRGILIO CRUZ
G.R. No. 182426
February 13, 2009

FACTS:

This Petition for Review on Certiorari.

Respondent Carmen Cruz, through her attorney-in-fact, Virgilio Cruz, filed a complaint for damages
against petitioners for allegedly destroying her palay crops. While admitting that petitioners own the
agricultural land she tilled, respondent claimed she was a lawful tenant thereof and had been in actual
possession when petitioners maliciously filled so with soil and palay.

` Petitioners filed a Motion to Dismiss, which was denied by the trial court.

Petitioners simultaneously filed an Answer to the complaint and a Motion for Reconsideration.
The court a quo denied the motion for lack of merit. However, the trial court issued an Order
dismissing the case due to respondents failure to prosecute.

With the denial of her Motion for Reconsideration, respondent interposed an appeal to the
Court of Appeals which granted the appeal.

CA ruled that, since filing the Complaint, respondent filed an Opposition to petitioners Motion
to Dismiss, an Answer to petitioners counterclaim, and a Comment to petitioners Motion for
Reconsideration; that respondent did not ignore petitioners Motion to Dismiss nor did she repeatedly
fail to appear before the court; that no substantial prejudice would be caused to petitioners and that
strict application of the rule on dismissal is unjustified considering the absence of pattern or scheme to
delay the disposition of the case on the part of respondent; and that justice would be better served if
the case is remanded to the trial court for further proceedings and final disposition

Court of Appeals denied petitioners Motion for Reconsideration; hence, this petition.

Petitioners allege that respondent failed to comply with the mandate of the 1997 Rules of Civil
Procedure to promptly move for the setting of the case for pre-trial; that heavy pressures of work
does not justify the failure to move for the setting of the case for pre-trial;

ISSUE:

Whether or not the decision of the honorable court of appeals nullifying and/or reversing and/or setting
aside the orders issued by the rtc-bulacan is contrary to law and prevailing jurisprudence.

RULING:

The petition lacks merit.

Section 1, Rule 18 of the 1997 Rules of Civil Procedure imposes upon the plaintiff the duty to
promptly move ex parte to have the case set for pre-trial after the last pleading has been served and
filed. Moreover, Section 3, Rule 17 provides that failure on the part of the plaintiff to comply with said
duty without any justifiable cause may result to the dismissal of the complaint for failure to prosecute
his action for an unreasonable length of time or failure to comply with the rules of procedure.

It must be stressed that even if the plaintiff fails to promptly move for pre-trial without any
justifiable cause for such delay, the extreme sanction of dismissal of the complaint might not be
warranted if no substantial prejudice would be caused to the defendant, and there are special and
compelling reasons which would make the strict application of the rule clearly unjustified.

In the instant case, the Court of Appeals correctly held that the dismissal of respondents
complaint is too severe a sanction for her failure to file a motion to set the case for pre-trial. It must be
pointed out that respondent prosecuted her action with utmost diligence and with reasonable dispatch
since filing the complaint she filed an opposition to petitioners motion to dismiss the complaint; a
comment to petitioners motion for reconsideration of the December 4, 2000 Order of the trial court;
and an Answer to Counterclaim of petitioners. When the trial court issued an order dismissing the
case, respondent filed without delay a motion for reconsideration; and upon its denial, she immediately
filed a Notice of Appeal. Moreover, contrary to petitioners claim that respondent was silent for one
year since she filed her Answer to Counterclaim until the trial courts dismissal order, records show
that between said period, both parties and the trial court were threshing out petitioners motion for
reconsideration of the December 4, 2000 Order. x xx unlike the respondents in the said case,
herein respondent never failed to comply with the Rules of Court or any order of the trial court at any
other time. Failing to file a motion to set the case for pre-trial was her first and only technical lapse
during the entire proceedings. Neither has she manifested an evident pattern or a scheme to delay
the disposition of the case nor a wanton failure to observe the mandatory requirement of the rules.
Accordingly, the ends of justice and fairness would best be served if the parties are given the full
opportunity to litigate their claims and the real issues involved in the case are threshed out in a full-
blown trial.

Besides, petitioners would not be prejudiced should the case proceed as they are not stripped
of any affirmative defenses nor deprived of due process of law.

This is not to say that adherence to the Rules could be dispensed with. However, exigencies
and situations might occasionally demand flexibility in their application. Indeed, on several occasions,
the Court relaxed the rigid application of the rules of procedure to afford the parties opportunity to fully
ventilate the merits of their cases. This is in line with the time-honored principle that cases should be
decided only after giving all parties the chance to argue their causes and defenses. Technicality and
procedural imperfection should thus not serve as basis of decisions.

Finally, A.M. No. 03-1-09-SC or the new 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 took
effect on August 16, 2004, aims to abbreviate court proceedings, ensure prompt disposition of cases
and decongest court dockets, and to further implement the pre-trial guidelines laid down in
Administrative Circular No. 3-99 dated January 15, 1999. A.M. No. 03-1-09-SC states that: Within
five (5) days from date of filing of the reply, the plaintiff must promptly move ex parte that the case be
set for pre-trial conference. If the plaintiff fails to file said motion within the given period, the Branch
COC shall issue a notice of pre-trial. As such, the clerk of court of Branch 17 of the Regional Trial
Court of Malolos should issue a notice of pre-trial to the parties and set the case for pre-trial.

65. FRANCISCO MADRID vs. SPOUSES BONIFACIO MAPOY

G.R. No. 150887
August 14, 2009

FACTS:

The spouses Bonifacio and FelicidadMapoy (respondents-plaintiffs) are the absolute owners of two
parcels of land (the properties).

On April 4, 1988, the respondents-plaintiffs sought to recover possession of the properties through an
accionpubliciana filed with the Regional Trial Court (RTC) of Manila against Gregorio Miranda and his
family (Mirandas)and two other unnamed defendants.

The respondents-plaintiffs alleged that they acquired the properties from the spouses Procopio and
EncarnacionCastelo under a Deed of Absolute Sale dated June 20, 1978.

They merely tolerated the petitioners-defendantscontinued occupancy and possession until their
possession became illegal when demands to vacate theproperties were made. Despite the demands,
the petitioners-defendants continued to occupy and unlawfullywithhold possession of the properties
from the respondents-plaintiffs, to their damage and prejudice.

Efforts to amicably settle the case proved futile, leaving the respondents-plaintiffs no recourse but to
file acomplaint for ejectment which the lower court dismissed because the respondents-plaintiffs
should have filedanaccionpubliciana.

Thus, they filed their complaint for accionpubliciana, praying for recovery of possession of the
properties.

The Mirandas countered that Gregorio Miranda owned the properties by virtue of an oral sale made in
his favorby the original owner, Vivencio Antonio (Antonio).

They claimed that in 1948, Gregorio Miranda was Antonioscarpenter, and they had a verbal contract
for Miranda to stay in, develop, fix and guard the properties; in 1972,Antonio gave the properties to
Gregorio Miranda in consideration of his more than twenty (20) years of loyalservice.6.

The RTC ruled in favor of respondents-plaintiffs. Upon appeal, the CA the affirmed the decision of
RTC.Hence this petition to the SC.

ISSUE:

Who must have the possession of the property?

HELD:
The objective of the plaintiffs in accionpubliciana is to recover possession only, not ownership.
However, wherethe parties raise the issue of ownership, the courts may pass upon the issue to
determine who between or among theparties has the right to possess the property.

This adjudication, however, is not a final and binding determination of theissue of ownership; it is only
for the purpose of resolving the issue of possession, where the issue of ownership isinseparably linked
to the issue of possession.
The adjudication of the issue of ownership, being provisional, is not a barto an action between the
same parties involving title to the property.

The adjudication, in short, is not conclusive on theissue of ownership.In the present case, both the
petitioners-defendants and the respondents-plaintiffs raised the issue of ownership.

The petitioners-defendants claim ownership based on the oral sale to and occupation by Gregorio
Miranda,their predecessor-in-interest, since 1948. On the other hand, the respondents-plaintiffs claim
that they are the owners,and their ownership is evidenced by the
TCTs in their names. Under this legal situation, resolution of these conflictingclaims will depend on the
weight of the parties' respective evidence, i.e., whose evidence deserves more weight.In the present
case, both the RTC and the CA gave more weight to the certificate of title the respondents-plaintiffs
presented, and likewise found that the petitioners-defendants' possession of the properties was
merely uponthe respondents-plaintiffs tolerance. We see no reason to doubt or question the validity
of these findings and thusrecognize their finality.As a matter of law, a Torrens Certificate of Title is
evidence of indefeasible title of property in favor of theperson in whose name the title appears.

The title holder is entitled to all the attributes of ownership of the property,including possession,
subject only to limits imposed by law. In the present case, the respondents-plaintiffs are indisputably
the holders of a certificate of title against which the petitioners-defendants claim of oral sale cannot
prevail. As registered titleholders, they are entitled to possession of the properties.
66. Heirs of REYES vs. COURT OF APPEALS AND METRO MANILA BUILDERS
[G.R. Nos. 135180-81 & 135425-26 : August 16, 2000]

Facts:

Brothers Justice Jose Benedicto Luna Reyes (also known as Justice J. B. L. Reyes) and Dr. Edmundo
A. Reyes were co-owners of a parcel of land an area of more than one hectare. They entered into a
25-year lease contract with Metro Manila Builders, Inc. (MMB, Inc.) in consideration of the fact that the
lessee would cover all present and future improvements in the property with insurance against certain
risks and maintain the premises in good, sanitary and tenantable condition at all times.

However, in the course of the lease, petitioners found out that respondent MMB, Inc. had not properly
maintained the premises or covered the same with an adequate insurance policy. Worse, respondent
MMB, Inc. had sub-leased the property to third parties and earning from the said sub-lease.
Petitioners served on respondent MMB, Inc. a notice terminating the lease contract and demanding
that they vacate and surrender the premises subject of the lease to petitioners but the respondents
failed to do so. Thus, petitioners filed a complaint for unlawful detainer based on breach of the contract
of lease. The Metropolitan Trial Court (MTC) ruled in favor of the petitioners stating among others that
all persons claiming right to said property vacate, surrender and cede possession of the leased
premises to the petitioners.

Respondents appealed the decision to the Regional Trial Court, but the court eventually dismissed the
case. However, the Court of Appeals (CA) issued a temporary restraining order (TRO) which in due
course decided in favor of the respondents and decided among others that the petitioners are
permanently enjoined from further committing acts disturbing physical possession of the subject
property by respondents until expiration of the Lease of Contract. Petitioners implemented the writ of
execution of the trial court despite the order of the CA to elevate the entire original records. The CA
immediately enforced its decision pending appeal restoring respondent in possession of the leased
premises and appointed a special sheriff to carry out the writ of execution. The CA then held
petitioners in indirect contempt for not complying with the writ of execution.

Hence, the petition.

Issue:

1. Whether or not the petitioners are guilty of indirect contempt; and

2. Whether or not the CA can issue immediate execution pending appeal of its own decision.

Ruling:

1. No, the petitioners are not guilty of indirect contempt. Although the petitioners proceeded to
demolish the improvements on the property without authority of the Court of Appeals this was
because the temporary restraining order issued by the said court had lapsed after sixty (60)
days. No more restraining order was in effect until the court decided the case on its merits.
Hence, petitioners acted in good faith in the exercise of their proprietary rights. There was no
willful disobedience to a lawful order. The salutary rule is that the power to punish for contempt
must be exercised on the preservative, not vindictive principle, and on the corrective and not
retaliatory idea of punishment. The courts must exercise the power to punish for contempt for
purposes that are impersonal because that power is intended as a safeguard not for the judges
as persons but for the functions that they exercise. The court must exercise the power of
contempt judiciously and sparingly, with utmost self-restraint.
 2. No, the Court of Appeals has no authority to issue immediate execution pending appeal of its
own decision. Discretionary execution under Rule 39, Section 2 (a), 1997 Rules of Civil
Procedure, as amended, is allowed pending appeal of a judgment or final order of the trial
court, upon good reasons to be stated in a special order after due hearing. A judgment of the
CA cannot be executed pending appeal. Once final and executory, the judgment must be
remanded to the lower court, where a motion for its execution may be filed only after its entry.
In other words, before its finality, the judgment cannot be executed. There can be no
discretionary execution of a decision of the Court of Appeals. In the second place, even in
discretionary executions, the same must be firmly founded upon good reasons. The court must
state in a special order the "good reasons" justifying the issuance of the writ. The good reasons
allowing execution pending appeal must constitute superior circumstances demanding urgency
that will outweigh the injuries or damages to the adverse party if the decision is reversed.

67.NORDIC ASIA LIMITED vs. COURT OF APPEALS, et al.

[G.R. No. 111159. June 10, 2003]
Facts:

Petitioners Nordic Asia Limited and Bankers Trust Company, as lenders, and Sextant Maritime, S.A.,
as borrower, entered into a loan agreement. The amount was used by Sextant Maritime, S.A. to
purchase the vessel M/V "Fylyppa." As a security for the loan, Sextant Maritime, S.A., executed in
favor of petitioners a First Preferred Mortgage over the vessel M/V "Fylyppa."

When Sextant Maritime, S.A. defaulted on the loan, petitioners instituted a extrajudicial foreclosure
proceedings. As part of the said proceedings, petitioners filed with the Regional Trial Court of Pasay
City a petition for the issuance of an arrest order against the vessel M/V "Fylyppa."

Respondents Nam Ung Marine Co., Ltd. and crew members of the vessel M/V "Fylyppa" also filed a
complaint for a sum of money before the Regional Trial Court of Manila against the vessel M/V
"Fylyppa. The RTC of Pasay eventually issued an order for the arrest of the vessel. On the same
date, the RTC of Manila also issued an order for the arrest and/or attachment of the vessel. Petitioners
filed with the RTC of Manila an urgent motion for leave to intervene in the collection case as plaintiffs-
intervenors against respondents and also filed as plaintiffs-intervenors a manifestation/motion with the
RTC of Manila praying for the discharge of the attachment of the vessel M/V "Fylyppa" and offered a
counterbond. They alleged as intervenors that the respondents have unfounded and grossly claims.

Issue:

1. Whether or not petitioners have legal interests to intervene; and

2. Whether or not respondents engaged in forum shopping.

Ruling:

1. The Court finds questionable the legal interest of petitioners to intervene andfile this petition.
Petitioners entered their appearance as plaintiffs-in-intervention in the collection case,
impleading respondents as defendants-in-intervention.

The complaint-in-intervention merely alleged that petitioners possess a mortgage lien and that
petitioners are so situated to be adversely affected by respondents collection case. Petitioners
did not intervene to make a claim against the respondents but merely to oppose their claims.
Petitioners were unable to allege what specific act or omission can be attributed to
respondents, which violated petitioners rights. Thus, they failed to state a cause of action.

Petitioners failed to meet the requirements for intervention: [a] it must be shown that the
movant has legal interest in the matter in litigation; and [b] consideration must be given as to
whether the adjudication of the rights of the original parties may be delayed or prejudiced, or
whether or not the intervenors rights may be protected in a separate proceeding.

The first requisite, states that the interest which entitles a person to intervene in a suit between
other parties must be in the matter in litigation and of such direct and immediate character that
the intervenor will either gain or lose by direct legal operation and effect of the judgment.
Otherwise, if persons not parties to the action were allowed to intervene, proceedings would
become unnecessarily complicated, expensive and interminable. The words "an interest in the
subject" mean a direct interest in the cause of action as pleaded, one that would put the
intervenor in a legal position to litigate a fact alleged in the complaint without the establishment
of which plaintiff could not recover.

Petitioners do not own the vessel, but merely hold a mortgage lien over it. Consequently,
whatever judgment is rendered in the collection case against the vessel is not of such a direct
and immediate character that the intervenor would either gain or lose by direct legal operation
and effect of the judgment. Assuming judgment is rendered against the vessel, petitioners are
not precluded from proceeding with their foreclosure of the vessel. It would have been different
if petitioners were the owners of the vessel, for then petitioners may be said to have a direct
interest in the cause of action pleaded, as the execution of the judgment would be
implemented on their property.
 The second requisite for intervention states that consideration must be given as to whether the
adjudication of the rights of the original parties may be delayed or prejudiced, or whether or not
the intervenors rights may be protected in a separate proceeding. In the present case,
petitioners rights were already protected through their extrajudicial foreclosure proceedings.
There was no exigency to grant the intervention.

The purpose of intervention is not to obstruct nor unnecessarily delay the placid operation of
the machinery of trial, but merely to afford one not an original party, yet having a certain right or
interest in the pending case, the opportunity to appear and be joined so he could assert or
protect such right or interest.

2. Yes, the petitioners have violated the rule against forum shopping. Forum shopping consists of
filing multiple suits involving the same parties for the same cause of action, either
simultaneously or successively, for the purpose of obtaining a favorable judgment. Forum
shopping is an unethical practice that subverts justice. For this reason, rules have been
promulgated authorizing the dismissal of multiple cases.

The Court noticed that when petitioners filed their appellants brief in CA-G.R. CV No. 21343,
the Court of Appeals had rendered a decision in CA-G.R. SP No. 13874, partially affirming the
RTC of Manilas order of execution pending appeal. In an apparent attempt to overturn the
decision in CA-G.R. SP No. 13874, petitioners included in their appellants brief in CA-G.R. CV
No. 21343 a prayer for: "b. Setting aside the execution pending appeal of said decision."

It is quite apparent that when petitioners initiated the two actions before the Court of Appeals,
purportedly seeking separately to reverse the two rulings, petitioners deliberately prayed for the
reversal of both rulings in each of the cases. This is a precise instance of forum-shopping wherein
petitioners have filed multiple cases hoping that one or the other case will be a favorable disposition.
Petitioners are therefore guilty of forum shopping.

68. SALANDAN vs. SPOUSES MENDEZ

[G.R. No. 160280 : March 13, 2009]

Facts:

This refers to the Petition for Review on Certiorari of the decision of the Court of Appeals (CA) and
eventually its Resolution denying the petition for clarification and intervention filed by Sofia
AniosaSalandanan (petitioner) and affirming the decision rendered by the Regional Trial Court (RTC)
of Manila, which sustained the decision of the Metropolitan Trial Court (MeTC) of Manila. The decision
of the MeTC orderedDelfin Fernandez and Carmen Fernandez (Spouses Fernandez) and all persons
claiming rights under them to vacate and surrender possession of a house and lot to Spouses Bayani
Mendez and Ma. Isabel S. Mendez (respondents) and to pay the latter monthly rental until they vacate
the property together with attorney's fees.

Issue:

1. Whether or not petitioner should have been allowed to intervene even after the CA had
promulgated its Decision

2. Whether or not petitioner is not a party to the ejectment case since she is not claiming right to
possession but alleging that she is the rightful owner of the lot under contention

Ruling:

1. No, petitioner should not have been allowed to intervene even after the CA had promulgated its
Decision. Sections 1 and 2 of Rule 19 of the Rules of Court provide:

Section 1.Who may intervene. - A person who has a legal interest in the matter in litigation, or
in the success of either of the parties, or an interest against both, or is so situated as to be
adversely affected by a distribution or other disposition of property in the custody of the court
or of an officer thereof may, with leave of court, be allowed to intervene in the action. The court
shall consider whether or not the intervention will unduly delay or prejudice the adjudication of
the rights of the original parties, and whether or not the intervenor's rights may be fully
protected in a separate proceeding.

Section 2.Time to intervene. - The motion to intervene may be filed at any time before rendition
of judgment by the trial court. A copy of the pleading-in-intervention shall be attached to the
motion and served on the original parties.

As a rule, intervention is allowed at any time before rendition of judgment by the trial court.
After the lapse of this period, it will not be warranted anymore because intervention is not an
independent action but is ancillary and supplemental to an existing litigation. The factors that
should be reckoned are whether intervention will unduly delay or prejudice the adjudication of
the rights of the original parties and whether the intervenor's rights may be fully protected in a
separate proceeding.

Moreover, petitioner's intervention in the ejectment case would not result in a complete
adjudication of her rights. The issue raised by petitioner is mainly that of ownership. Such issue
cannot e properly threshed out in an action for ejectment, as Section 18, Rule 70 provides that
"[t]he judgment rendered in an action for forcible entry or detainer shall be conclusive with
respect to the possession only and shall in no wise bind the title or affect the ownership of the
land or building.It is likewise for this reason that petitioner is not an indispensable party in the
instant case.

2. Petitioner, even though a non-party, is bound by the judgment because aside from being a
relative of or privy to Spouses Fernandez, she is also acting as their agent when she occupied
the property after the RTC ordered execution pending appeal in order to frustrate the
judgment.It should be borne in mind that unless the case falls under one of the recognized
exceptions, to wit:

(1) when the findings are grounded entirely on speculation, surmises or conjectures; (2) when
the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave
abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when
the findings of fact are conflicting; (6) when in making its findings the Court of Appeals went
beyond the issues of the case, or its findings are contrary to the admissions of both the
appellant and the appellee; (7) when the findings are contrary to the trial court; (8) when the
findings are conclusions without citation of specific evidence on which they are based; (9)
when the facts set forth in the petition as well as in the petitioner's main and reply briefs are not
disputed by the respondent; (10) when the findings of fact are premised on the supposed
absence of evidence and contradicted by the evidence on record; and (11) when the Court of
Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if
properly considered, would justify a different conclusion.
 A judgment directing a party to deliver possession of a property to another is in personam. x xx
Any judgment therein is binding only upon the parties properly impleaded and duly heard or
given an opportunity to be heard. However, this rule admits of the exception, such that even a
non-party may be bound by the judgment in an ejectment suit where he is any of the following:
(a) trespasser, squatter or agent of the defendant fraudulently occupying the property to
frustrate the judgment; (b) guest or occupant of the premises with the permission of the
defendant; (c) transferee pendente lite; (d) sublessee; (e) co-lessee; or (f) member of the
family, relative or privy of the defendant.

69. MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY vs.

Heirs of ESTANISLAO MIOZA
[G.R. No. 186045 : February 02, 2011]

Facts:

Leila Hermosisima executed a Deed of Sale conveying their lots to the National Airports Corporation
(NAC) on the assurance made by the latter that they (Leila's predecessors-in-interest) can buy the
properties back if the lots are no longer needed. More than forty years after the sale, plaintiffs
informed the NAC's successor-in-interest, the Mactan-Cebu International Airport Authority (MCIAA)
that they were exercising the buy-back option of the agreement but the MCIAA refused to allow the
repurchase on the ground that the sale was in fact unconditional. The respondents, claiming that they
are the legitimate heirs of EstanislaoMioza (Leilas great grandfather) and InocenciaTogono, filed a
Motion for Intervention in the Regional Trial Court (RTC). The RTC denied the motion and in time the
case reached the Court of Appeals (CA). The CA directed the RTC to resolve with deliberate dispatch
and to admit the complaint-in-intervention filed by the intervenors-appellants.

MCIAA filed a Motion for Reconsideration with the CA but was denied. Hence, the petition.
Issue:

1. Whether or not the petitioner allegation that the lack of verification and certification on non-
forum shopping, and even if the complaint-in-intervention with the required verification and
certificate of non-forum shopping was appended to the intervenors' motion for reconsideration,
the complaint-in-intervention was not verified by all the interested parties or all the heirs of
FilomenoMioza, which warrants its dismissal; and

2. Whether or not to allow the respondents are allowed to intervene in the proceedings.

Ruling:

1. No, the argument of the petitioner is without merit. Contrary to petitioner's contention, the initial
lack of the complaint-in-intervention of the requisite verification and certification on non-forum
shopping was cured when the intervenors, in their motion for reconsideration of the order
denying the motion to intervene, appended a complaint-in-intervention containing the required
verification and certificate of non-forum shopping. Court clarified that as to verification, non-
compliance therewith or a defect therein does not necessarily render the pleading fatally
defective. The court may order its submission or correction, or act on the pleading if the
attending circumstances are such that strict compliance with the Rule may be dispensed with
in order that the ends of justice may be served thereby. Further, a verification is deemed
substantially complied with when one who has ample knowledge to swear to the truth of the
allegations in the complaint or petition signs the verification, and when matters alleged in the
petition have been made in good faith or are true and correct.

Moreover, as to the certification against forum shopping, non-compliance therewith or a defect

therein, unlike in verification, is generally not curable by its subsequent submission or
correction thereof, unless there is a need to relax the Rules on the ground of "substantial
compliance" or presence of "special circumstances or compelling reasons." Also, the
certification against forum shopping must be signed by all the plaintiffs or petitioners in a case;
otherwise, those who did not sign will be dropped as parties to the case. Under reasonable or
justifiable circumstances, however, as when all the plaintiffs or petitioners share a common
interest and invoke a common cause of action or defense, the signature of only one of them in
the certification against forum shopping substantially complies with the Rule.

Thus, considering that the intervenors in their motion for reconsideration, appended a
complaint-in-intervention with the required verification and certificate of non-forum shopping,
the requirement of the Rule was substantially complied with.

2. No, the intervenors are claiming that they are the legitimate heirs of EstanislaoMioza and
InocenciaTogono and not the original plaintiffs represented by Leila Hermosisima. True, if their
allegations were later proven to be valid claims, the intervenors would surely have a legal
interest in the matter in litigation. Nonetheless, this Court has ruled that the interest
contemplated by law must be actual, substantial, material, direct and immediate, and not
simply contingent or expectant. It must be of such direct and immediate character that the
intervenor will either gain or lose by the direct legal operation and effect of the judgment.
Otherwise, if persons not parties to the action were allowed to intervene, proceedings would
become unnecessarily complicated, expensive and interminable.

Intervention is a remedy by which a third party, not originally impleaded in the proceedings,
becomes a litigant therein to enable him, her or it to protect or preserve a right or interest which
may be affected by such proceedings. It is a proceeding in a suit or action by which a third
person is permitted by the court to make himself a party, either joining plaintiff in claiming what
is sought by the complaint, or uniting with defendant in resisting the claims of plaintiff, or
demanding something adversely to both of them. Section 1, Rule 19 of the Rules of Court
states:

SECTION 1.Who may intervene. -- A person who has a legal interest in the matter in litigation,
or in the success of either of the parties, or an interest against both, or is so situated as to be
adversely affected by a distribution or other disposition of property in the custody of the court
or of an officer thereof may, with leave of court, be allowed to intervene in the action. The court
 shall consider whether or not the intervention will unduly delay or prejudice the adjudication of
the rights of the original parties, and whether or not the intervenor's rights may be fully
protected in a separate proceeding.

Under this Rule, intervention shall be allowed when a person has (1) a legal interest in the
matter in litigation; (2) or in the success of any of the parties; (3) or an interest against the
parties; (4) or when he is so situated as to be adversely affected by a distribution or disposition
of property in the custody of the court or an officer thereof.Moreover, the court must take into
consideration whether or not the intervention will unduly delay or prejudice the adjudication of
the rights of the original parties, and whether or not the intervenor's right or interest can be
adequately pursued and protected in a separate proceeding.

Moreover, the intervenors' contentions that Leila's predecessors-in-interest executed, in fraud

of the intervenors, an extra judicial settlement of the estate of the late spouses
EstanislaoMioza and InocenciaTogono and adjudicated unto themselves the estate of the
deceased spouses, and that subsequently, her predecessors-in-interest fraudulently and
deceitfully sold the subject lots to the NAC, would unnecessarily complicate and change the
nature of the proceedings.

In addition to resolving who the true and legitimate heirs of EstanislaoMioza and
InocenciaTogono are, the parties would also present additional evidence in support of this new
allegation of fraud, deceit, and bad faith and resolve issues of conflicting claims of ownership,
authenticity of certificates of titles, and regularity in their acquisition which would definitely
cause unjust delay in the adjudication of the rights claimed by the original parties, which
primarily hinges only on the issue of whether or not the heirs represented by Leila have a right
to repurchase the subject properties from the MCIAA.

Verily, the allegation of fraud and deceit is an independent controversy between the original parties
and the intervenors. In general, an independent controversy cannot be injected into a suit by
intervention. Intervention is not intended to change the nature and character of the action itself, or to
stop or delay the placid operation of the machinery of the trial.

70. GSIS (Petitioner)v.NOCOM (Respondent)

[G.R. NO. 175989 : February 4, 2008]

Facts:

Bengson Commercial Buildings, Inc. (BENGSON) obtained loans from the Government Service
Insurance System (GSIS), herein petitioner. As security for the payment of these loans, BENGSON
executed real estate and chattel mortgages in favor of the GSIS. For BENGSON's failure to settle its
arrearages the mortgages were extrajudicially foreclosed. Its properties then were sold at public
auction to the GSIS itself. A certificate of sale and new certificates of title were thereafter issued in its
name.

Eventually the case was decided in the Regional Trial Court (RTC) in favor of BENGSON which
included among others the nullification and cancellation of the titles issued of the sale to GSIS and the
issuance of new ones in the name of BENGSON. The Court of Appeals (CA) affirmed the decision of
the RTC but ordered the remand of the case to the trial court for reception of evidence to determine
the costs of suit.

In due course, the trial court issued the cost of suit against GSIS and denied the motion for
reconsideration filed by GSIS. The decision was affirmed by the CA. This lead to the garnishment of
some shares of stock the GSIS which were sold in the public auction and purchased by BENGSON
who sold some of those shares of stock to Nocom (respondent).

Meanwhile, the GSIS sought to annul the said decisions by filing a case in the Supreme Court in which
they got a favorable ruling as the case was remanded to the trial court. While the case was being
heard anew in the trial court Nocomfiled a motion for intervention and attached therewith is his
Complaint-in-Intervention. GSIS opposed the move.
Issue:

1. Whether or not the Court of Appeals erred in holding that respondent has a right to intervene

Ruling:

1. No, the Court of Appeals is correct in holding that the respondent Nocom has a right to
intervene in the case. Intervention is "a proceeding in a suit or action by which a third person is
permitted by the court to make himself a party, either joining plaintiff in claiming what is sought
by the complaint, or uniting with defendant in resisting the claims of plaintiff, or demanding
something adversely to both of them; the act or proceeding by which a third person becomes a
party in a suit pending between others; the admission, by leave of court, of a person not an
original party to pending legal proceedings, by which such person becomes a party thereto for
the protection of some right of interest, alleged by him to be affected by such proceedings."

Section 1, Rule 19 of the 1997 Rules of Civil Procedure, as amended, provides for the
parameters before a person, not a party to a case, can intervene, thus:

SEC. 1.Who may intervene. - A person who has a legal interest in the matter in litigation, or in
the success of either of the parties, or an interest against both, or is so situated as to be
adversely affected by a distribution or other disposition of property in the custody of the court
or of an officer thereof, may with leave of court, be allowed to intervene in the action. The court
shall consider whether or not the intervention will unduly delay or prejudice the adjudication of
the rights of the original parties, and whether or not the intervenor's rights may be fully
protected in a separate proceeding.

An intervention is valid when a person has: (1) a legal interest in the matter in litigation; (2) or
in the success of any of the parties; (3) or an interest against the parties; (4) or when he is so
situated as to be adversely affected by a distribution or disposition of property in the custody of
the court or an officer thereof.

This Court ruled that the legal interest which entitles a person to intervene must be in the
matter in litigation and of such direct and immediate character that the intervenor will either
gain or lose by direct legal operation and effect of judgment.

Since the records show that BENGSON transferred and assigned the shares to respondent, as
evidenced by their Memorandum of Agreement and Deed of Assignment executed between
them. These shares of stock in question were sold to BENGSON to satisfy the costs of suit
awarded to it by the trial court. Clearly, respondent has an interest in the outcome of the case
before the trial court.
76. Producers Bank of the Philippines vs. Excelsa Industries, Inc.,669 SCRA 470, April 16, 2012

NATURE: PETITION for review on certiorari of the decision and resolution of the Court of Appeals

FACTS:

Excelsa obtained a loan from Producers Bank in the form of a bill discounted and secured
credit accommodation in the amount of P200,000.00, secured by a real estate mortgage over real
estate properties. Excelsa extended its loan by applying for a packing credit line or a credit
export advance with petitioner supported by a letter of credit issued by its Korean buyers. Upon
collection, the Korean buyer refused to pay the export documents prompting Prudential Bank to
demand from Excelsa the payment of the peso equivalent of said export documents together with its
due and unpaid loans. Excelsa failed to make the payment. As a result, Prudential Bank
extrajudicially foreclosed the real estate mortgage. The case stemmed from two separate cases:

a. Civil Case No. 1587-A was instituted by Excelsa for the annulment of the foreclosure; and,

b. LR Case No. 90-787 was filed by Producers Bank as a petition for the issuance of a writ of
possession. The RTC thereafter ordered the consolidation of the two cases, Civil Case No.1587-A and
LR Case No. 90-787. On December 18, 1997, the RTC rendered a decision upholding the validity of
the extrajudicial foreclosure and ordering the issuance of a writ of possession in favor of Producers
Bank. Excelsa availed of two modes of appeal:

a. for Civil Case No. 1587-A, Excelsa made an appeal to the CA via ordinary appeal which
was docketed as CA-G.R. CV No. 59931 and

b. for LR Case No. 90-787, Excelsa filed a special civil action for certiorari under Rule 65 of the Rules
of Court before the CA which was docketed as CA-G.R. SP. No. 46514.The CA made the following
decisions:
a. for Civil Case No. 1587-A or CA-G.R. CV No. 59931, CA rendered a decision on May 30, 2001,
reversing and setting aside the RTC decision thereby declaring the foreclosure of mortgage invalid
and annulling the issuance of the writ of possession in favor of Producers Bank, and

b. for LR Case No. 90-787 or CA-G.R. SP. No. 46514, the CA, on April 4,2006, granted the petition of
Excelsa and reversed the decision of the RTC .Producers Bank elevated Civil Case No. 1587-A or
CA-G.R. CV No. 59931 to the Supreme Court which was docketed as GR 152071. On May 8, 2009,
the Supreme Court reversed and set aside the CA (First Division) decision in CA-G.R. CV No.
59931and reinstated that of the RTC. In other words, the Court settled once and for all the validity of
the foreclosure and the propriety of the issuance of the writ of possession. Faced with the CAs
decision dated April 4, 2006, for CA-G.R. SP. No. 46514, Prudential Bank filed a petition for review on
certiorari under Rule 45 of Rules of Court.

ISSUES:

Whether or not the Excelsa can file a separate petition for certiorari before the CA based on a
judgment that consolidated two separate actions

HELD:

No, Excelsa committed a procedural blunder when it filed a separate petition for certiorari
before the CA, because when the two cases were consolidated and a joint decision was rendered, the
cases lost their identities; and a petition for certiorari is not the proper remedy to assail a decision
granting the issuance of a writ of possession .Consolidation is a procedural device granted to the court
as an aid in deciding how cases in its docket are to be tried so that the business of
the court may be dispatched expeditiously and with economy while providing justice to the parties.
It is governed by Rule 31 of the old Rules of Court which states: Section 1. Consolidation.When
actions involving a common question of law or fact are pending before the court ,it may order a joint
hearing or trial of any or all the matters in issue in the actions; it may order all the actions
consolidated; and it may make such orders concerning proceedings therein as may tend to avoid
unnecessary costs or delay. Consolidation of cases may take place in any of the following ways: (1)
Where all except one of several actions are stayed until one is tried, in which case the judgment in the
one trial is conclusive as to the others. This is not actually consolidation but is referred to as such
(quasi-consolidation) (2) Where several actions are combined into one, lose their separate identity,
and become a single action in which a single judgment is rendered. This is illustrated by a situation
where several actions are pending between the same parties stating claims which might have
been set out originally in one complaint.(actual consolidation) (3) Where several actions
are ordered to be tried together but each retains its separate character and requires the entry of a
separate judgment. This type of consolidation does not merge the suits into a single action, or cause
the parties to one action to be parties to the other (consolidation for trial). In this case, there was a
joint hearing and the RTC eventually rendered a Joint Decision disposing of the cases both as to the
validity of the foreclosure (subject of Civil Case No. 1587-A) and the propriety of the issuance of a writ
of possession (subject of LR Case No. 90-787). This being so, the two cases ceased to be separate
and the parties are left with a single remedy to elevate the issues to the appellate court. This is
bolstered by the fact that when the appeal in CA-G.R. CV No. 59931 was disposed of by the CA (First
Division) by reversing the RTC decision, the appellate court not only declared the foreclosure of
mortgage invalid but likewise annulled the issuance of the writ of possession. Again, when the Court
finally settled the issues in G.R. No. 152071, it reversed and set aside the CA decision and
reinstated that of the RTC thereby disposing of the said two issues. The Supreme Court granted
the petition of the Producers Bank and declared that the parties are bound by the decision of the Court
in G.R. No. 152071.
77. CESAR NEPOMUCENO, LEON ARCILLAS and RUBEN AVENIDO vs. COMELEC and OSCAR
LASERNA - 126 SCRA 472

FACTS:

Petitioners Cesar Nepomuceno, Leon Arcillas and Ruben Avenido were the official candidates
of the Nacionalista Party in the 1980 local elections for the positions of mayor, vicemayor and member
of the Sangguniang Bayan, respectively, of Sta. Rosa, Laguna. On January 14, 1980, private
respondent Oscar Laserna filed a petition before the COMELEC, docketed as PDC Case No. 65, to
disqualify petitioners on the ground of turncoatism. On January 25, 1980, the COMELEC issued
Resolution No. 8484, granting said petition, thereby denying due course to petitioners' certificates of
candidacy. Alleging denial of due process, petitioners assailed said resolution in a petition for certiorari
and prohibition with prayer for a temporary restraining order filed with this Court on January 28, 1980
[G.R. Nos. 52427 and 52506]. The Court issued a restraining order enjoining the COMELEC from
enforcing Resolution No. 8484, by reason wherefore petitioners were allowed to be voted for in the
elections of January 30, 1980. It appears that in said elections, petitioners won and were Proclaimed
winners in their respective positions.

On May 15, 1980, the Court issued a Resolution in G.R. No. 52427 and G.R. No. 52506,
setting aside the challenged resolution and remanding the cases to respondent COMELEC "for a full
dress hearing in accordance with due process and to decide the cases as expeditiously as possible
after giving the parties full opportunity to present all evidence relevant to the issue of alleged
turncoatism."

The COMELEC accordingly set PDC Case No. 65 for hearing on the merits. However, on July
17, 1980, petitioners filed a motion to dismiss the said case, alleging that it being a pre-election case,
the same should be dismissed, without prejudice to the filing of appropriate quo warrants proceedings
pursuant to Section 189 of the 1978 Election Code. Having obtained an unfavorable ruling from the
COMELEC, petitioners filed another petition with this Court, docketed as G.R. No. 54633, assailing the
COMELEC's resolution which denied their motion to dismiss. On December 22, 1980, the Court
dismissed this second petition.

Thereafter, the Comelec proceeded to hear PDC Case No. 65, with petitioners' manifestation
'That "They do not waive their right to question the jurisdiction of the Comelec" having been placed on
record. After respondent Oscar Laserna had terminated the presentation of his evidence, petitioners
filed their respective Motions to Dismiss/Demurer to Evidence, which were reasonably opposed by
respondent Laserna. Rejoinders and memoranda were filed by the parties, and on March 31, 1982,
the Comelec issued the following order denying the demurrer to evidence.

On April 15, 1982, petitioners filed with the Comelec another Motion to Dismiss, which was
denied in an order dated April 16, 1982. This order was designed for the division by presiding
commissioner Luis L. Lardizabal [Annex "T", Rollo. p. 126].

From these orders, petitioners come to the Court, alleging:

1. that the COMELEC committed grave abuse of discretion amounting to an act in excess of or
without jurisdiction in refusing to resolve petitioners' demurer to evidence by way of a judgment
wherein it should state the facts and the law on which the is resolution is based.

2. that the respondent committed grave abuse of discretion, amounting to lack of jurisdiction in
denying petitioners' motion to dismiss.

3. that the respondent COMELEC committed grave abuse of discretion, amounting to lack of
jurisdiction, in promulgating the resolution of April 16, 1982 through the act of only one member of a
division.

ISSUES:

Whether or not a denial of a demurrer is a final judgment and therefore must state the facts
and the law on which the order is based; and,

Whether or not the COMELEC committed grave abuse of discretion in denying the motion to
demurrer on evidence.

HELD:

The challenged order being merely an interlocutory order and not a final judgment or decision,
no abuse of discretion was committed by respondent COMELEC in its failure to state the facts and the
law on which its order denying petitioners' demurrer to evidence is based.

Petitioners are obviously misled by the title of Rule 35 of the Rules of Court, "Judgment on
Demurer to Evidence." Said Rule, consisting of only one section, allows the defendant to move for
dismissal of the case after the plaintiff has presented his evidence on the ground of insufficiency of
evidence, and provides for the effects of the dismissal or non-dismissal, as the case may be, on the
right of the defendant to present his cause. Otherwise stated, it authorizes a judgment on the merits of
the case without the defendant having to submit evidence on his part as the relief sought. The
demurrer, therefore, is an aid or instrument for the expeditious termination of an action, similar to a
motion to dismiss, which the court or tribunal may either grant or deny.

It is thus apparent that the requirement of Section 1 of Rule 36 1 would only apply if the
demurrer is granted, for in this event, there would in fact be an adjudication on the merits of the case,
leaving nothing more to be done, except perhaps to interpose an appeal. However, a denial of the
demurrer is not a final judgment, but merely interlocutory in character as it does not finally dispose of
the case, the defendant having yet the right to present his evidence, as provided for under Section 1 of
Rule 35.

It is plain that this provision refers to a decision on the merits of the case, where the
contending causes of the parties are decided with finality, one way or the other. The fallacy of
petitioners' contention is obvious. Their argument proceeds from the erroneous premise that the April
16, 1982 resolution is a decision on the merits.

Clearly, the said resolution is merely interlocutory, and being such, the Presiding Commissioner
of the Division is competent to sign said resolution alone (Resolution No. 9805 dated June 18, 1980 of
the COMELEC).
78. Radiowealth Finance Company v. Del Rosario
G.R. No. 138739 July 6, 2000

Lessons Applicable: Demurrer to Evidence, Promissory Note, When Demandable, Penalty, Interest
(Credit Transactions)

Laws Applicable: Rule 33 of the 1997 Rules of Court (Civil Procedure)

FACTS:

March 2, 1991: Spouses Vicente and Maria Sumilang del Rosario jointly and severally executed,
signed and delivered in favor of Radiowealth Finance Company a Promissory Note for P138,948
without need of notice or demand, in instalments of P11,579.00 payable for 12 consecutive months
leaving the period for the instalments blank. Upon default, the late payment, 2.5% penalty charge per
month shall be added to each unpaid installment from due date thereof until fully paid.
June 7, 1993: Radiowealth filed a complaint for the collection of a sum of money before the
Regional Trial Court of Manila. During the trial, JasmerFamatico, the credit and collection officer of
Radiowealth, presented in evidence the Spouses check payments, the demand letter dated July 12,
1991, Spouses customers ledger card, another demand letter and Metropolitan Bank dishonor slips.
Famatico admitted that he did not have personal knowledge of the transaction or the execution of any
of these pieces of documentary evidence, which had merely been endorsed to him.
July 29, 1994: Spouses filed a Demurrer to Evidence for alleged lack of cause of action
RTC: Dismissed for Radiowealths failure to substantiate the claims, the evidence it had presented
being merely hearsay
CA: reversed and remanded the case for further proceedings
o During the pretrial, through judicial admissions or the spouses admitted the genuineness of the
Promissory Note and demand letter dated July 12, 1991. Their only defense was the absence of an
agreement on when the installment payments were to begin

ISSUES:

1. W/N the spouses can still present evidence after the appellate courts reversal of the dismissal on
demurer of evidence (Civil Procedure)
2. W/N the obligation is due and demandable (Credit Transaction)

HELD:

Petition is GRANTED. Appealed Decision is MODIFIED. Ordered to PAY P138,948, plus 2.5 percent
penalty charge per month beginning April 2, 1991 until fully paid, and 10 percent of the amount due as
attorneys fees.

1. NO.
Rule 33 of the 1997 Rules
o 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 is denied, 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.
Defendants who present a demurrer to the plaintiffs evidence retain the right to present their own
evidence, if the trial court disagrees with them; if the trial court agrees with them, but on appeal, the
appellate court disagrees with both of them and reverses the dismissal order, the defendants lose the
right to present their own evidence
The appellate court shall resolve the case and render judgment on the merits, inasmuch as a
demurrer aims to discourage prolonged litigations

2. Yes.
The act of leaving blank the due date of the first installment did NOT necessarily mean that the
debtors were allowed to pay as and when they could. While the specific date on which each
installment would be due was left blank, the Note clearly provided that each installment should be
payable each month. It also provided for an acceleration clause and a late payment penalty, both of
which showed the intention of the parties that the installments should be paid at a definite date. Per
the acceleration clause, the whole debt became due one month (April 2, 1991) after the date of the
Note because the check representing their first installment bounced.
Respondents started paying installments on the Promissory Note, even if the checks were
dishonored by their drawee bank.
The Note already stipulated a late payment penalty of 2.5 percent monthly to be added to each
unpaid installment until fully paid. Payment of interest was not expressly stipulated in the Note. Thus,
it should be deemed included in such penalty. Liquidated damages, however, should no longer be
imposed for being unconscionable. Such damages should also be deemed included in the 2.5 percent
monthly penalty. Furthermore, we hold that petitioner is entitled to attorneys fees, but only in a sum
equal to 10 percent of the amount due which we deem reasonable under the proven facts.

79. CASENT REALTY DEVELOPMENT CORP. vs

PHILBANKING CORPORATION
G.R. No. 150731

On appeal to the Supreme Court through Rule 45 of the Rules of Court is the March 29, 2001 Decision
and November 7, 2001 Resolution of the Court of Appeals (CA) in CA-G.R. CV No. 63979 entitled
Philbanking Corporation v. Casent Realty Development Corporation. The CA reversed the May 12,
1999 Order[3] of the Makati City Regional Trial Court (RTC), Branch 145 in Civil Case No. 93-2612,
which granted petitioners demurrer to evidence and dismissed the complaint filed by respondent.

FACTS:

The facts according to the appellate court are as follows:

In 1984, petitioner Casent Realty Development Corporation executed two promissory notes in favor of
Rare Realty Corporation (Rare Realty) involving the amounts of PhP 300,000 (PN No. 84-04) and PhP
681,500 (PN No. 84-05). It was agreed in PN No. 84-04 that the loan it covered would earn an interest
of 36% per annum and a penalty of 12% in case of non-payment by June 27, 1985, while the loan
covered by PN No. 84-05 would earn an interest of 18% per annum and 12% penalty if not paid by
June 25, 1985.[4] On August 8, 1986, these promissory notes were assigned to respondent
Philbanking Corporation through a Deed of Assignment.[5]
Respondent alleged that despite demands, petitioner failed to pay the promissory notes upon
maturity such that its obligation already amounted to PhP 5,673,303.90 as of July 15, 1993.
Respondent filed on July 20, 1993 a complaint before the Makati City RTC for the collection of said
amount. In its Answer petitioner raised, among others,the following as special/affirmative defenses:

1. The complaint stated no cause of action or if there was any, the same was barred by
estoppel, statute of frauds, statute of limitations, laches, prescription, payment, and/or release;

2. On August 27, 1986, the parties executed a Dacion en Pago (Dacion) which ceded and
conveyed petitioners property in Iloilo City to respondent, with the intention of totally extinguishing
petitioners outstanding accounts with respondent. Petitioner presented a Confirmation Statement
dated April 3, 1989 issued by respondent stating that petitioner had no loans with the bank as of
December 31, 1988.
The parties failed to reach an amicable settlement during the pre-trial conference. Thereafter,
respondent presented its evidence and formally offered its exhibits. Petitioner then filed a Motion for
Judgment on Demurrer to the Evidence, pointing out that the plaintiffs failure to file a Reply to the
Answer which raised the Dacion and Confirmation Statement constituted an admission of the
genuineness and execution of said documents; and that since the Dacion obliterated petitioners
obligation covered by the promissory notes, the bank had no right to collect anymore.
The trial court ruled in favor of petitioner and dismissed the complaint through the May 12, 1999 Order.

The Ruling of the Court of Appeals

On appeal, respondent alleged that the trial court gravely erred because the promissory notes were
not covered by the Dacion, and that respondent was able to prove its causes of action and right to
relief by overwhelming preponderance of evidence. It explained that at the time of execution of the
Dacion, the subject of the promissory notes was the indebtedness of petitioner to Rare Realty and not
to the Bank the party to the Dacion.
The appellate court ruled that under the Rules of Civil Procedure, the only issue to be resolved
in a demurrer is whether the plaintiff has shown any right to relief under the facts presented and the
law. Thus, it held that the trial court erred when it considered the Answer which alleged the Dacion,
and that its genuineness and due execution were not at issue. It added that the court a quo should
have resolved whether the two promissory notes were covered by the Dacion, and that since
petitioners demurrer was granted, it had already lost its right to present its evidence.
The CA found that under the Deed of Assignment, respondent clearly had the right to proceed
against the promissory notes assigned by Rare Realty.

ISSUES:
 1. Whether or not the respondents failure to file a Reply and deny the Dacion and Confirmation
Statement under oath constitute a judicial admission of the genuineness and due execution of these
documents?
2. Whether or not judicial admissions should be considered in resolving a demurrer to evidence? If
yes, are the judicial admissions in this case sufficient to warrant the dismissal of the complaint?

HELD:

The Court affirms the decision of the Court of Appeals.

What should be resolved in a motion to dismiss based on a demurrer to evidence is whether the
plaintiff is entitled to the relief based on the facts and the law. The evidence contemplated by the rule
on demurrer is that which pertains to the merits of the case, excluding technical aspects such as
capacity to sue. However, the plaintiffs evidence should not be the only basis in resolving a demurrer
to evidence. The facts referred to in Section 8 should include all the means sanctioned by the Rules of
Court in ascertaining matters in judicial proceedings. These include judicial admissions, matters of
judicial notice, stipulations made during the pre-trial and trial, admissions, and presumptions, the only
exclusion being the defendants evidence.

Since respondent failed to file a Reply, in effect, respondent admitted the genuineness and due
execution of said documents. This judicial admission should have been considered by the appellate
court in resolving the demurrer to evidence. Rule 129, Section 4 of the Rules of Court provides:

Section 4.Judicial admissions. An admission, verbal or written, made by a party in the course of the
proceeding in the same case, does not require proof. The admission may be contradicted only by
showing that it was made through palpable mistake or that no such admission was made.

Rule 8, Section 8 specifically applies to actions or defenses founded upon a written instrument
and provides the manner of denying it. It is more controlling than Rule 6, Section 10 which merely
provides the effect of failure to file a Reply. Thus, where the defense in the Answer is based on an
actionable document, a Reply specifically denying it under oath must be made; otherwise, the
genuineness and due execution of the document will be deemed admitted.[23] Since respondent failed
to deny the genuineness and due execution of the Dacion and Confirmation Statement under oath,
then these are deemed admitted and must be considered by the court in resolving the demurrer to
evidence
In any case, the CA found that:
From the facts of the case, the genuineness and due execution of the Dacion en Pago were never put
to issue. Genuineness merely refers to the fact that the signatures were not falsified and/or whether
there was no substantial alteration to the document. While due execution refers to whether the
document was signed by one with authority.[25]
The more important issue now is whether the Dacion and Confirmation Statement sufficiently prove
that petitioners liability was extinguished.

Admission of the genuineness and due execution of the Dacion and Confirmation Statement does not
prevent the introduction of evidence showing that the Dacion excludes the promissory notes.
Petitioner, by way of defense, should have presented evidence to show that the Dacion includes the
promissory notes.
The language of the Dacion is unequivocal the property serves in full satisfaction of petitioners own
indebtedness to respondent, referring to the loan of PhP 3,921,750. For this reason, the bank issued a
Confirmation Statement saying that petitioner has no unpaid obligations with the bank as of December
31, 1988.
In 1989, however, Rare Realty defaulted in its payment to respondent. Thus, respondent proceeded
against the security assigned to it, that is, the promissory notes issued by the petitioner. Under these
promissory notes, petitioner is liable for the amount of PhP 300,000 with an interest of 36% per annum
and a penalty of 12% for failure to pay on the maturity date, June 27, 1985; and for the amount of PhP
681,500 with an interest of 18% per annum and a penalty of 12% for failure to pay on the maturity
date, June 25, 1985.

80. MANUFACTURER'S BANK & TRUST CO. vs. DIVERSIFIED INDUSTRIES, INC.
173 SCRA 357

FACTS:

Manufacturers Bank & Trust Co. filed a complaint with the Court of First Instance of Manila for the
recovery of a sum of money against Diversified Industries, Inc. and Alfonso Tan. The complaint
alleged:

1. That on December 17, 1963 the defendants were granted a loan in the form of an agreement
for credit in current account in the sum of ONE HUNDRED TWENTY-FIVE THOUSAND PESOS
(P125,000.00) with interest at the rate of 10% per annum computed upon average daily balances, a
copy of the xx Agreement for Credit in Current Account .. (being attached) as Annex "A" ..

2. That the loan became due and pay able on February 26, 1965, but the defendants failed and
refused to liquidate their obligations, leaving an outstanding balance of P100,119.21 as of June 25,
1965;

3. That by reason of the unjust refusal on the part of the defendants to satisfy their just and valid
obligation upon maturity, the plaintiff was compelled to engage the services of counsel for a fee
equivalent to 10% of the total sum due which the defendants have expressly agreed to pay in
accordance with the terms of the agreement, Annex "A".
In their answer, 3 the defendants admitted the averments of paragraph 2 of the complaint (and
paragraph 1 thereof relative to the parties' personal circumstances); but they professed to have no
"sufficient knowledge or information to form a belief as to the truth or falsity of the allegations
contained in paragraphs 3 and 4 and, therefore, .. (denied) the same."

Manufacturers Bank moved for judgment on the pleadings. It adverted to the defendants' admissions
of the parties' personal circumstances and "the fact that the defendants were granted a loan in the
form of an Agreement for Credit in Current Account in the sum of P125,000.00 with interest at the rate
of 10% per annum computed upon average daily balances, a copy of which agreement has been
attached as Annex A of the complaint." It also branded as contrived and inefficacious the defendants'
profession of lack of knowledge of "the fact that the loan was due and payable on February 26, 1965
and that the same has been unliquidated as of the time that the complaint was filed," as well as the
fact "of attorney's fees equivalent to 10% of the total sum due.

The defendants, Diversified Industries and Tan, filed an opposition to the bank's motion for judgment
on the pleadings. They alleged that neither the amounts drawn against the overdraft account nor the
current balance due from them, were within the knowledge either of Alfonso Tan because he was a
mere "guarantor" or even of Diversified Industries because its account officer had long since
resigned, and moreover, they could not be expected to know the attorney's fees that Manufacturers
Bank had undertaken to pay to its attorney. They also theorized that since there was no allegation that
they had in fact made drawings against the overdraft account, no obligation to pay a sum of money
had been pleaded and therefore, the complaint failed to state a cause of action.

On the same date the defendants filed a motion for leave to amend their answer, and the amended
answer itself. The Court denied the defendants' motion for leave to amend their answer and rendered
judgment on the pleadings. It opined that the original answer failed to tender any issue, the
defendants' asserted lack of knowledge or information regarding matters principally and necessarily
within their knowledge could not be considered a specific denial. It disposed of the case as follows:

From this judgment appeal was taken to this Court on questions of law by the defendants as well as
the plaintiff, Manufacturers Bank. Manufacturers Bank faults the Trial Court for (1) not specifying the
defendants' liability to it to be joint and several; and (2) requiring payment by defendants of interest
only at the legal rate instead of that stipulated in their agreement. On the other hand, Diversified
Industries and Alfonso Tan ascribe the following errors to the Court a quo: (1) refusing to admit their
amended answer; (2) not dismissing the complaint for failure to state a cause of action; and (3)
rendering judgment on the pleadings.

ISSUE:

Whether or not a judgment on the pleadings is proper in the case at bar.

HELD:

The rule is set out in Rule 19 of the Rules of Court.

SECTION 1. Judgment on the pleadings. Where an answer fails to tender an issue, or otherwise
admits the material allegations of the adverse party's pleading, the court may, on motion of that party,
direct judgment on such pleading. ..

The denials in the amended answer are sham denials, consisting of an avowed lack of knowledge of
facts which could not but be clearly known to the defendants or ought to be or could quite easily have
been known by them. Their disclaimer of knowledge of the amount of their outstanding balance is
implausible, but even if true, cannot be deemed a proper denial because concerning something they
could very easily have learned or verified had they wished to.

Of no little significance is the fact that the motion to amend the answer was presented only after two
(2) years had lapsed from the date of its filing, and only after the plaintiff had drawn attention to its
patent and grave imperfections and moved for judgment on the pleadings. Equally noteworthy is that
defendants never challenged the authenticity of their letter to the bank dated October 18, 1966,
advising that they had made, thru an Atty. Colayco, payment on their account and requesting that they
be allowed to pay their obligation by installments at the rate of P20,000.00 every six (6) months. 8
These facts, considered conjointly with the admissions expressly made in the pleadings and those
reasonably inferable therefrom, dictate a verdict in favor of the plaintiff bank.
Under the circumstances obtaining in this case, the amendment of the answer in substantial aspects
was not a matter of right, 9 but lay in the discretion of the Court. 10 Where amendment is not a matter
of right, a bare assertion of a desire to amend the pleading because certain matters had not been
therein alleged, or the submission of an amended one, without more, is obviously not sufficient. It is
needful to state to the Court some reasonable ground justifying its exercise of discretion to allow
amendment. 11 Indeed, the Rules elsewhere provide that judicial admissions "can not be contradicted
unless previously shown to have been made through palpable mistake." 12 It is thus incumbent upon
a party desiring to amend his pleading, in other words, to furnish the Court with some adequate
foundation for it to grant leave to amend the pleading. This was not done by the defendants. Their
motion merely declared that they had failed to include certain allegations and defenses in their original
answer, but gave no explanation for their failure to do so at the time they drew up that pleading or
within a reasonable time thereafter, and why they had not essayed such amendment until after two (2)
years and only after their receipt of plaintiff bank's motion for judgment on the pleadings which cited
certain serious defects of their answer. The absence of such an explanation, and the implicit
admission of liability in their letter of October 18, 1966 requesting that they be permitted to pay in
installments of P20,000.00 every six (6) months not unreasonably engendered the belief in the mind of
the Court a quo that their motion had been "made with intent to delay the action" by relieving them
from the effects of their judicial admissions without a showing of palpable mistake, or other acceptable
absolutory cause.

The correctness, therefore, of the Trial Court's denial of the motion to amend answer and the propriety
of the assailed judgment on the pleadings are beyond civil. Amendment in the circumstances was
clearly subject to said Court's discretion the exercise of which cannot be faulted; and the defendants'
original answer in truth tendered no issue, or otherwise admitted the allegations of the complaint
material and necessary to a valid decision.

81. Pacific Rehouse Corporation vs. EIB Securities Inc.

GR 184036

FACTS:

This Petition for Review on Certiorari under Rule 45, petitioners seek reversal of the Decision [1] dated
April 11, 2008 of the Court of Appeals (CA) in CA-G.R. CV No. 87713 which revoked the October 18,
2005 Resolution, a judgment on the pleadings, of the Regional Trial Court (RTC), Branch 66 in Makati
City, in Civil Case No. 05-178 entitled Pacific Rehouse Corporation, Pacific Concorde Corporation,
Mizpah Holdings, Inc., et al. v. EIB Securities, Inc., and remanded the case for further proceedings.
Also assailed is the CA Resolution dated August 5, 2008 denying petitioners motion for
reconsideration.

On July 19, 2005, petitioners registered a Motion for Judgment on the Pleadings, asserting that EIB
materially admitted the allegations of their complaint by not tendering any genuine issue in its
answer. This was opposed by EIB, with both parties subsequently filing their respective reply and
rejoinder. On October 7, 2005, petitioners moved that the trial court resolve their motion for judgment
on the pleadings.

The trial court found merit in rendering a judgment on the pleadings: first, the assailed transactions
were all documented; second, the transactions were admitted by the parties; and third, the main
issues can be resolved based on the parties documentary evidence appended to the pleadings.

The appellate court rendered the assailed decision, revoking the RTCs judgment on the pleadings
and remanding the case back to the RTC for further proceedings.

Petitioners filed their motion for reconsideration, while EIB filed a Manifestation with Motion for
Clarification/Deletion which was opposed by petitioners. In its motion for clarification/deletion, EIB took
exception to the appellate courts pronouncement that it (EIB) admitted the sale of petitioners DMCI
shares for the purpose of buying back the KKP shares, which strengthened petitioners claim of the
nullity of the sale. Both motions were denied by the assailed resolution issued on August 5, 2008.
ISSUE:

CONTRARY TO THE RULING OF THE COURT OF APPEALS, THE TRIAL COURT WAS CORRECT
IN RENDERING JUDGMENT ON THE PLEADINGS IN THE CASE BEFORE IT.

HELD:

The petitioners position is impressed with merit.

Rule 34 of the Rules of Court provides that where an answer fails to tender an issue or otherwise
admits the material allegations of the adverse partys pleading, the court may, on motion of that party,
direct judgment on such pleading. Judgment on the pleadings is, therefore, based exclusively upon
the allegations appearing in the pleadings of the parties and the annexes, if any, without consideration
of any evidence aliunde.

When what is left are not genuinely issues requiring trial but questions concerning the proper
interpretation of the provisions of some written contract attached to the pleadings, judgment on
the pleadings is proper.

Based on the admissions in the pleadings and documents attached, the Court finds that the issues
presented by the complaint and the answer can be resolved within the four corners of said pleadings
without need to conduct further hearings. As explained by the Court in Philippine National Bank v.
Utility Assurance & Surety Co., Inc., when what remains to be done is the proper interpretation of
the contracts or documents attached to the pleadings, then judgment on the pleadings is
proper. In the case at bar, the issue of whether the sale of DMCI shares to effectuate the buy back of
the KKP shares is valid can be decided by the trial court based on the SDAA, Notices of Sale, Sales
Confirmation Receipts, the letters of the parties, and other appendages to the pleadings in conjunction
with the allegations or admissions contained in the pleadings without need of trial. The Makati City
RTC is, therefore, correct in issuing the October 18, 2005 Resolution granting the Motion for Judgment
on the Pleadings.

To the mind of the Court, these matters are not genuinely triable issues but actually minor issues or
mere incidental questions that can be resolved by construing the statements embodied in the
appendages to the pleadings. The facts that gave rise to the side issues are undisputed and were
already presented to the trial court rendering trial unnecessary.

The determination of the collateral in said notices can easily be made from the notices itself and Sec.
7 of the SDAA. The KPP shares stated in the notices refer to the KPP shares owned by the Petitioners
and sold to third parties by EIB. The word Property in the notices is elucidated in the aforementioned
Sec. 7 as all monies and/or securities and/or all other property of the Client in the companys custody
or control held from time to time (Clients Property) x xx. These properties shall be subject to a general
lien in favour of the Company for the discharge of all or any indebtedness and other obligations of the
client to [EIB]. Thus, the DMCI shares owned by petitioners are covered by the word Property in the
Notices of Sale.

On the monetary claims by petitioners against EIB, said claims are not a bar to a judgment on the
pleadings. While it was averred by petitioners under par. 9 of the complaint that they suffered a loss of
PhP 4.5 million from the sale of the DMCI shares, the claim for actual damages was not set up as a
relief in the prayer and, therefore, the Manchester doctrine precludes such award to petitioners. Anent
the claim for moral damages of PhP 3 million, exemplary damages of PhP 3 million, and attorneys
fees of PhP 2 million, the claim is not proper in a judgment on the pleadings in the absence of proof.
Sans such proof extent on record, the claim for damages is a non-issue.

In sum, there are no genuine issues that cannot be determined based on the pleadings. Ergo, the
assailed October 18, 2005 Resolution of the Makati City RTC granting judgment on the pleadings is in
accord with Rule 34 of the Rules of Court and settled jurisprudence.
82. Reillo vs. San Jose

FACTS:

Quiterio San Jose and Antonina Espiritu Santo are husband and wife. Both died intestate in 1970 and 1976
respectively. They have five children, to wit: Virginia, Virgilio, Galicano, Victoria, and Catalina.

In 1998, Virginia with the help of her husband(Zosimo Fernando, Sr.) and her children (Cristina Reillo et al)
executed a Deed of Extrajudicial Settlement of Estate where they made it appear that Virginia was the only heir
of the spouses Quiterio and Antonina. They adjudicated among themselves the estate and then later sold it to
Ma. Teresa Pion.

Later, the other siblings found out about what Virginia did and so in October 1999, they filed a complaint in RTC-
Rizal for the annulment of the deed of extrajudicial settlement as well as the subsequent deed of sale.

In their answer, Reillo et al (children of the now deceased Virginia) admitted that their grandparents (Quiterio and
Antonina) indeed had five children and that their mom isnt the only heir. However, they alleged that what their
mom adjudicated to herself is her inheritance; that other than the parcel of land their mom adjudicated to herself,
their grandparents have 12 other parcels of land which are under the possession of Galicano et al; that as such,
they are filing a compulsory counterclaim for the partition of the other 12 parcels of land.

Galicano et al then filed a motion for the court to render judgment on the pleadings. The trial court granted the
motion. The RTC ruled that the admission of Reillo et al that there are 4 other heirs is proof that the extrajudicial
settlement is void because the other heirs were excluded. The RTC also ruled that Reillo et als counterclaim is
not compulsory but rather it is a permissive counterclaim. As such, Reillo et al should have paid docket fees
therefor but they failed to do so hence their counterclaim is dismissed. The RTC then ordered the heirs to
partition the estate according to the laws of intestate succession. On appeal, the Court of Appeals (CA) affirmed
the decision of the RTC.

Reillo et al appealed the decision of the CA on the ground that the judgment on the pleading is void; that it is the
RTCs fault why they failed to pay the docket fees for its failure to direct them; and that the order for partition is
void because it does not come with an order of publication pursuant to Rule 74 of the Rules of Court.

ISSUE:

Whether or not the order for partition issued by the trial court is void because there was no corresponding order
for publication pursuant to the provisions of Rule 74 of the Rules of Court.

HELD:

No. The applicable rule is Rule 69 of the Rules of Court. Since the extrajudicial settlement is void, the property is
reverted back to its previous state which is: that it is part of the estate of Quiterio and Antonina. As such, the
estate is deemed undivided among the heirs. And every action to end an indivision among heirs is deemed an
action for partition. Therefore Rule 69 applies and under this rule, there is no need to publish the partition in a
newspaper of general circulation.

Anent the issue of the judgment on the pleadings, the same is valid because Reillo et al failed to raise an issue
when they already admitted that there are other heirs which were excluded in the deed of extrajudicial
settlement. Their allegation that the parcel of land adjudicated by their mother is her inheritance is not tenable
because the same was not indicated in the deed of extrajudicial settlement. In fact, what was stated was that she
was the sole heir.

Anent the issue of the counterclaim, Reillo et als counterclaim is permissive in nature and not a compulsory one
because their claim is not necessarily connected with the transaction or occurrence constituting the subject
matter of the opposing partys claim. Their counterclaim consists of a claim that there are 12 other parcels of
land owned by Quiterio and Antonina. Such allegation is already entirely different from the action brought by
Galicano et al., hence it is permissive and it can even be brought in a separate proceeding. As a permissive
pleading, it requires the payment of docket fees and the RTC cannot be faulted for not directing Reillo et al to do
so. The payment is incumbent upon Reillo et al and the obligation cannot be shifted to the RTC.

83. Spouses Ong vs. Roban Lending

GR 172592
FACTS:

On various dates, petitioner Spouses Wilfredo N. Ong and Edna Sheila Paguio-Ong obtained
several loans from respondent Roban Lending Corporation in the total amount of P4, 000,000. These
loans were secured by real estate mortgage on Spouses Ongs parcel of lands.

Later Spouses Ong and Roban executed several agreements an amendment to the
amended Real Estate Mortgage which consolidated their loans amounting to P5, 916,117.50; dacion
in payment wherein spouses Ong assigned their mortgaged properties to Roban to settle their total
obligation and Memorandum of Agreement (MOA) in which the dacion in payment agreement will be
automatically enforced in case spouses Ong fail to pay within one year from the execution of the
agreement.

Spouses Ong filed a complaint before Regional Trial Court of Tarlac City to declare the
mortgage contract, dacion in payment agreement, and MOA void. Spouses Ong allege that the dacion
in payment agreement is pactumcommissorium, and therefore void. In its Answer with counterclaim,
Roban alleged that the dacion in payment agreement is valid because it is a special form of payment
recognized under Article 1245 of the Civil Code. RTC ruled in favor of Roban, finding that there was no
pactumcommissorium. The Court of Appeals upheld the RTC decision.

ISSUE:

Whether or not the court of appeals failed and refused to apply procedural requisites which
would warrant the setting aside of the summary judgment in violation of appellants right to due
process

HELD:
Prescinding from the above disquisition, the trial court and the Court of Appeals erred in
holding that a summary judgment is proper. 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. A
genuine issue, as opposed to a fictitious or contrived one, is an issue of fact that requires the
presentation of evidence. As mentioned above, petitioners prayer for accounting requires the
presentation of evidence on the issue of partial payment.

But neither is a judgment on the pleadings proper. A judgment on the pleadings may be
rendered only when an answer fails to tender an issue or otherwise admits the material allegations of
the adverse partys pleadings. In the case at bar, respondents Answer with Counterclaim disputed
petitioners claims that the Memorandum of Agreement and Dation in Payment are illegal and that the
extra charges on the loans are unconscionable. Respondent disputed too petitioners allegation of bad
faith.

84. SunbanunVs Go
GR 163280

FACTS:

Petitioner Doris U. Sunbanun is the owner of a residential house located at No. 68-F Junquera Street,
Cebu City. On 7 July 1995, respondent Aurora B. Go leased the entire ground floor of petitioners residential
house for one year which was to expire on 7 July 1996. As required under the lease contract, respondent paid a
deposit ofP16,000 to answer for damages and unpaid rent. To earn extra income, respondent accepted lodgers,
mostly her relatives, from whom she received a monthly income of P15,000. Respondent paid the monthly rental
until March 1996 when petitioner drove away respondents lodgers by telling them that they could stay on the
rented premises only until 15 April 1996 since she was terminating the lease. The lodgers left the rented
premises by 15 April 1996, and petitioner then padlocked the rooms vacated by respondents lodgers.

On 10 May 1996, respondent filed an action for damages against petitioner. Respondent alleged that
she lost her income from her lodgers for the months of April, May, and June 1996 totaling P45,000. Respondent,
who worked in Hongkong, also incurred expenses for plane fares and other travel expenses in coming to the
Philippines and returning to Hongkong.

On the other hand, petitioner argued that respondent violated the lease contract when she subleased
the rented premises. Besides, the lease contract was not renewed after its expiration on 7 July 1996; thus,
respondent had no more right to stay in the rented premises. Petitioner also moved to dismiss the complaint in
the trial court for failure to comply with prior barangay conciliation.

During the pre-trial, petitioner moved for the case to be submitted for judgment on the pleadings
considering that the only disagreement between the parties was the correct interpretation of the lease contract.
Respondent did not object to petitioners motion. The trial court then directed the parties to submit their
respective memoranda, after which the case would be considered submitted for decision.

ISSUE:

WHETHER OR NOT THE COURT OF APPEALS ERRED IN MODIFYING THE JUDGMENT OF THE
TRIAL COURT AND AWARDING MORAL AND EXEMPLARY DAMAGES AND COSTS OF SUIT IN FAVOR OF
RESPONDENT.

HELD:

We find the petition without merit.

In this case, the trial court rendered a judgment on the pleadings. Section 1, Rule 34 of the Rules of
Court reads:

SECTION 1. Judgment on the pleadings. Where an answer fails to tender an issue, or otherwise
admits the material allegations of the adverse partys pleading, the court may, on motion of that
party, direct judgment on such pleading. However, in actions for declaration of nullity or
annulment of marriage or for legal separation, the material facts alleged in the complaint shall
always be proved.

The trial court has the discretion to grant a motion for judgment on the pleadings filed by a party if there
is no controverted matter in the case after the answer is filed. [7] A judgment on the pleadings is a judgment on the
facts as pleaded,[8] and is based exclusively upon the allegations appearing in the pleadings of the parties and
the accompanying annexes.

This case is unusual because it was petitioner, and not the claimant respondent, who moved for a
judgment on the pleadings during the pre-trial.
Petitioner, in moving for a judgment on the pleadings without offering proof as to the truth of her own
allegations and without giving respondent the opportunity to introduce evidence, is deemed to have admitted the
material and relevant averments of the complaint, and to rest her motion for judgment based on the pleadings of
the parties.
85. VERGARA VS SUELTO
156 SCRA 753

FACTS:

Petitioner Vergara is the owner of a commercial building consisting of 3 sections, each of which is
separately occupied by the private respondents as lessees. Petitioner Vergara commenced in the Municipal
Trial Court of Davao City an action for illegal detainer against the private respondents. Petitioner avers that
the respondent default to pay their monthly rent for many months. The respondent countered denying the
allegation of petitioner. Vergara presented a reply to the defendants' answer, chiefly making the point that
neither he nor any of the defendants was a party to Civil Case No. 16192 and hence could not be bound by
whatever judgment or orders might be rendered therein; that his title to the land was not void nor had it
ever been subject of any action for annulment; and that in any event Civil Case No. 16192 had no
relevance to the "case for ejectment against defendants for non- payment of rents on x x (his) commercial
building. Under date of March 7, 1986 Vergara filed a Motion for Summary Judgment. Against this motion
defendants filed an "Opposition to Motion for Summary Judgment and Motion to Dismiss." Vergara
submitted a reply dated April 9, 1986, adverting to the distinction between a summary judgment under Rule
34 and a judgment on the pleadings under Rule 19, and reiterating and amplifying the propositions and
arguments set out in his motion for summary judgment. The respondent Judge response with the denial of
Motion to Dismiss because the MTC believes that this case properly is an Unlawful Detainer action as it
assesses the respective claims of the parties and it (the court), in accordance with the provisions of Section
33 of Batas Pambansa Blg. 129 is not without authority to resolve the issue of ownership if only to
determine the issue of possession. The respondent Judge also denied Vergaras motion to Summary
Judgement on the ground that it appears from the answer that the material allegations of facts in the
complaint constituting plaintiff's cause of action are specifically denied and in addition thereto, defendants
have put up affirmative defenses in avoidance of plaintiff's claims. The rule gives the court limited authority
to enter summary judgment. Upon a motion for summary judgment, the court's sole function is to determine
whether there is an issue of fact to be tried. It does not vest the court with authority to try the issues on
depositions, pleadings, letters or affidavits. ... (I)f there is a controversy upon any question of fact, there
should be a trial of the case upon its merits.

ISSUE 1:

WHETHER OR NOT the appropriateness of a summary judgment may ever be so self-evident in a case so
as to grant the plaintiffs motion therefor by the Trial Judge.

ISSUE 2:

WHETHER OR NOT application for a writ of mandamus against a municipal trial court be filed directly with
the Supreme Court considering that jurisdiction to issue this extraordinary writ is also possessed by the
Court of Appeals as well as the Regional Trial Court.

HELD:

The confusion is shared by the defendants (private respondents), this being revealed by their argument
that in view of their denial of plaintiff's assertion of ownership over the premises in question, and
their controversion of "the material facts of the adverse party," their answer did not only consist of a mere
"general denial" but "definitely tendered a genuine issue" "which cannot be resolved by resort to mere
summary judgment." Indeed, they point out that in their answer they have dealt with each paragraph of the
complaint; and "considering therefore the totality of the allegations of ... (said) answer vis-a-vis the
allegations of the complaint, ... the answer tendered a valid issue.

The essential question however is not whether the answer does controvert the material allegations of the
complaint but whether that controversion is bona fides. The fundamental issue is not whether the answer
does tender valid issues as by setting forth specific denials and/or affirmative defenses but whether the
issues thus tendered are genuine, or fictitious, sham, characterized by bad faith.

Section 1, Rule 19 of the Rules of Court provides that where an answer "fails to tender an issue, or
otherwise admits the material allegation of the adverse party's pleading, the court may, on motion of that
party, direct judgment on such pleading." The answer would fail to tender an issue, of course, if it does not
comply with the requirements for a specific denial set out in Section 10 (or Section 8) of Rule 8; and it
would admit the material allegations of the adverse party's pleadings not only where it expressly confesses
the truthfulness thereof but also if it omits to deal with them at all.
Now, if an answer does in fact specifically deny the material averments of the complaint in the manner
indicated by said Section 10 of Rule 8, and/or asserts affirmative defenses (allegations of new matter
which, while admitting the material allegations of the complaint expressly or impliedly, would nevertheless
prevent or bar recovery by the plaintiff) in accordance with Sections 4 and 5 of Rule 6, a judgment on the
pleadings would naturally not be proper.

In this case, the defendants' answer appears on its face to tender issues. It purports to deal with each of
the material allegations of the complaint, and either specifically denies, or professes lack of knowledge or
information to form a belief as to them. It also sets up affirmative defenses. But the issues thus tendered
are sham, not genuine, as the slightest reflection and analysis win readily demonstrate.

Under the circumstances herein set forth at some length, the fitness and propriety of a summary judgment
cannot be disputed. The failure of the respondent Judge to render such a judgment was due solely to his
unfortunate unfamiliarity with the concept of a summary judgment. It is a failure which we have it in our
power to remedy. No genuine issue having been tendered by the defendants, judgment should be directed
as a matter of right in the plaintiff's favor. To yet require a trial notwithstanding the pertinent allegations of
the pleadings and the other facts indubitably appearing on record would be a waste of time, and an
injustice to the plaintiff whose obtention of the relief to which he is plainly and patently entitled would be
further delayed. As it is, the delay has already been considerable.

The remedy properly available to the petitioner in the premises, however, is not the writ of mandamus. Well
known is the rule that mandamus issues only to compel performance of a mandatory, ministerial
duty. 26 The determination that under the facts and circumstances obtaining in a case a summary judgment
is proper, and the motion therefor should be granted and summary judgment consequently rendered, rests
in the sound discretion of a trial court and can not be regarded as a duty of ministerial function compellable
by the extraordinary writ of mandamus. In this case, the respondent Judge had discretion to make that
determination. What happened was that His Honor made that determination with grave abuse of discretion.
Despite the plain and patent propriety of a summary judgment, he declined to render such a verdict. The
writ of certiorari will lie to correct that grave abuse of discretion.

We turn now to the second question posed in the opening paragraph of this opinion, as to the propriety of a
direct resort to this Court for the remedy of mandamus or other extraordinary writ against a municipal court,
instead of an attempt to initially obtain that relief from the Regional Trial Court of the district or the Court of
Appeals, both of which tribunals share this Court's jurisdiction to issue the writ. As a matter of policy such a
direct recourse to this Court should not be allowed. The Supreme Court is a court of last resort, and must
so remain if it is to satisfactorily perform the functions assigned to it by the fundamental charter and
immemorial tradition. It cannot and should not be burdened with the task of dealing with causes in the first
instance. Its original jurisdiction to issue the so-called extraordinary writs should be exercised only where
absolutely necessary or where serious and important reasons exist therefor. Hence, that jurisdiction should
generally be exercised relative to actions or proceedings before the Court of Appeals, or before
constitutional or other tribunals, bodies or agencies whose acts for some reason or another, are not
controllable by the Court of Appeals. Where the issuance of an extraordinary writ is also within the
competence of the Court of Appeals or a Regional Trial Court, it is in either of these courts that the specific
action for the writ's procurement must be presented. This is and should continue to be the policy in this
regard, a policy that courts and lawyers must strictly observe.

In the case at bar, however, to apply the policy by referring the action to the Regional Trial Court of the
district would serve no useful purpose. It would on the contrary work injustice to the petitioner to whom the
relief rightly due has already been withheld for many years. The case having been filed before this Court as
early as 1986, and having already been subject of an extensive exchange of pleadings, it should and will
now be decided without further delay.

86. CRISTINA DIMAN, CLARISSA DIMAN, GEORGE DIMAN, FELIPE DIMAN and FLORINA
DIMAN vs. HON, FLORENTINO M. ALUMBRES

FACTS:
The case began in the Regional Trial Court, where a complaint for Quieting of Title and
Damageswas filed by the Heirs of Veronica V.Moreno Lacalle (represented by Jose
Moreno Lacalle) against petitioners. After joinder of the issues, Petitioners served on
the Heirs a request for admission. The REQUEST FOR ADMISSION-was received by Jose
Lacalle himself through registered mail and copy thereof, by the latter's lawyer.-
However, no response whatever was made to the request by Lacalle, his lawyer, or
anyone else, despite the lapse of the period therefor fixed by Section 2 of Rule 26 (not
less than ten days after service).-Petitioners thereupon filed with the Court a
manifestation with motion to require plaintiffs to answer request for
admission, giving the Heirs ten (10) more days to file their answer to the request for
admission, a copy of which was personally delivered to the latter's lawyer; but again, no
response whatsoever was made. Petitioners then submitted a motion for
summarry judgment arguing that because the heirs had failed to respond to their
request for admission, each of the matters of which an admission was requested,
was deemed admitted pursuant to Section 2, Rule 26. On this basis,-petitioners asserted
that no genuine issue existed and prayed that a summary judgment be entered
dismissing the case for lack of merit.
The Heirs' counsel, responding to questions of the Court, admitted that his clients did
not have the original copy of the title which was the basis for their-cause of action, but
asserted that they were still searchingfor it since in every municipality there are several
Registry of Deeds.-He theorized that the word 'title' ** is a relative term ** (and) does
not only refer to a document but refers to ownership.The Trial Court denied petitioners
motion for summary judgment, stating upon its decision that a summary judgment is
not proper where the defendant presented defenses tendering factual issues which call
for the presentation of evidence.
Shortly after the Heirs rested their case, the Dimans filed a Motion for Judgment on
Demurrer to Evidence.-They summarized the Heirs' evidence -- focusing attention on
the Heirs failure to present even an unauthenticated photocopy of the title,and the
absence of any proof that any proceedings for registration of the land under the Torrens
Act had been instituted -- and emphasized anew said Heirs' implied admissions resulting
from their failure to answer their (the Dimans') request therefore as a mode of
discovery.-On these premises, petitioers contended that a judgment on demurrer
should be rendered, there being no genuine issue between the parties notwithstanding
the ostensible conflict of averments in their basic pleadings. Again, petitioners efforts at
expediting disposition of the litigation were unsuccessful. Petitioners moved for
reconsideration and again the Trial Court rebuffed them. They then commence a special
civil action of-certiorari, mandamus-and prohibition in the Court of Appeals but yet
again, to no avail. Thereupon petitioners filed with the Supreme Court a petition for
review on-certiorari-of the Appellate Tribunal's Decision.

Issue: Whether or not a summary judgment should prosper.

Ruling:
Yes. A Trial Court has no discretion to determine what the consequences of a party's
refusal to allow or make discovery should be; it is the law which makes that
determination; and it is grave abuse of discretion for the Court to refuse to recognize
and observe the effects of that refusal as mandated by law. It is also the law which
determines when a summary judgment is proper.-It declares that although the
pleadings on their face appear to raise issues of fact -- e.g., there are denials of, or a
conflict in, factual allegations -- if it is shown by admissions, depositions or affidavits,
that those issues are sham, fictitious, or not genuine, or, in the language of the Rules,
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
shall render a summary judgment for the plaintiff or the defendant-as the case may be.-
In fine, the Heirs had proven nothing whatever to justify a judgment in their favor.-They
had not presented any copy whatever of the title they wished to be quieted.-They had
not adduced any proof worthy of the name to establish their predecessors' ownership
of the land.-On the contrary, their own evidence, from whatever aspect viewed, more
than persuasively indicated their lack of title over the land, or the spuriousness of their
claim of ownership thereof.-The evidence on record could not be interpreted in any
other way, and no other conclusion could be drawn there from except the
unmeritoriousness of the complaint.-The case at bar is a classic example of the eminent
propriety of a summary judgment, or a judgment on demurrer to evidence
87. MARIANO NOCOM vs. OSCAR CAMERINO, EFREN CAMERINO, CORNELIO MANTILE and
MILDRED DEL ROSARIO

FACTS:
Respondent Oscar Camerino and respondents-interveners were the tenants who were
tilling on the parcels of land planted to rice and corn owned by Victoria Homes, Inc.,
which without notifying the respondents, sold the said lots to Springsun Management
Systems Corporation who, in turn mortgaged it to Banco Filipino (BF) as collaterals for
its loans. As SMSC failed to pay the loans due, BF extrajudicially foreclosed the mortgage
and, later, was adjudged the highest bidder. On May 10, 2000, SMSC redeemed the lots
from BF. Earlier, on March 7, 1995, but sometime later, SCMC redeems the said lots.
Respondents filed a complaint against SMSC and BF for Prohibition/Certiorari,
Reconveyance/Redemption, Damages, Injunction with Preliminary Injunction and
Temporary Restraining Order, with the Regional Trial Court who thus, authorized them
to redeem the subject lots.
Prior to the events, petitioner Mariano Nocom gave the respondents several Philtrust
Bank Managers Checks, which the latter encashed, representing the price of their
inchoate and contingent rights over the subject lots which they sold to him. -
Respondents, with the marital consent of their wives, executed an Irrevocable Power of
Attorney which was notarized by their counsel Atty. Arturo S. Santos.
Respondent Oscar Camerino filed a complaint against petitioner, seeking to annul the
Irrevocable Power of Attorney, alleging that he and co-respondents were asked by their
counsel, Atty. Arturo S. Santos, to sign a document with the representation that it was
urgently needed in the legal proceedings against SMSC. that the Irrevocable Power of
Attorney turned out to be the same document which Atty. Santos required him and the
other respondents to sign and that despite repeated demands, petitioner refused to
surrender the owners duplicate copies of the said titles; that petitioner had retained
ownership over the subject lots; that he had no intention of naming, appointing, or
constituting anyone, including petitioner, to sell, assign, dispose, or encumber the
subject parcels of land; and that he executed an Affidavit of Adverse Claim which was
annotated on the titles involving the subject lots. Petitioner countered that Atty. Santos
informed him of the desire of his clients, herein respondents, to sell and assign to him
their inchoate and contingent rights and interests over the subject lots because they
were in dire need of money and could no longer wait until the termination of the
proceedings as SMSC would probably appeal the CAs Decision to the Supreme Court and
for the reason -that being coupled with interest, the Irrevocable Power of
Attorney cannot be revoked or cancelled at will by any of the parties and that having
received just and reasonable compensation for their contingent rights, respondents had
no cause of action or legal right over the subject lots.
Respondent Oscar Camerino filed a Motion for Summary Judgment alleging that since
the existence of the Irrevocable Power of Attorney was admitted by petitioner, the only
issue to be resolved was whether the said document was coupled with interest and
whether it was revocable in contemplation of law and jurisprudence. Petitioner filed a
Motion to Dismiss the case. The lower court granted the Motion for Summary Judgment
because a meticulous scrutiny of the material facts admitted in the pleadings of the
parties reveals that there is really no genuine issue of fact presented therein that needs
to be tried to enable the court to arrive at a judicious resolution of a matter of law if the
issues presented by the pleadings are not genuine issues as to any material fact but are
patently unsubstantial issues that do not require a hearing on the merits.-On July 3,
2006 petitioner filed an Omnibus Motion for Reconsideration seeking to set aside the
trial courts Joint Order dated June 9, 2005 and Summary Judgment dated June 15, 2006
which was opposed by the respondents. Respondents filed a Motion for Execution
Pending Final Decision/Appeal which was opposed by petitioner. The trial court issued
an order denying petitioners Omnibus Motion for Reconsideration. Within the
reglementary period, petitioner filed a Notice of Appeal which affirms the trial courts
Joint Order and Summary Judgment and dismissed the petitioners appeal for lack of
jurisdiction.

Issue: Whether or not the court of appeals is correct in not voiding the assailed summary
judgment for failure of respondents to implead an indispensable party.

Ruling:
No. The CA erroneously relied on the rationale that the petitioners appeal raised
questions of law and, therefore, it had no recourse but to dismiss the same for lack of
jurisdiction. The summary judgment rendered by the trial court has the effect of
adjudication on the merits and, thus, the petitioner, being the aggrieved party, correctly
appealed the adverse decision of the RTC to the CA by filing a notice of appeal coupled
with the appellants brief under Rule 41 of the Rules. Under Section 1, Rule 35 of the
Rules of Court, 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 is a procedural
device resorted to in order to avoid long drawn out litigations and useless delays.
The present case should not be decided via a summary judgment. Summary judgment is
not warranted when there are genuine issues which call for a full blown trial. Summary
judgment is generally based on the facts proven summarily by affidavits, depositions,
pleadings, or admissions of the parties. In this present case, while both parties
acknowledge or admit the existence of the Irrevocable Power of Attorney,the variance
in the allegations in the pleadings of the petitioner vis--vis that of the respondents
require the presentation of evidence on the issue of the validity of the Irrevocable
Power of Attorneyto determine whether its execution was attended by the vices of
consent and whether the respondents and their spouses did not freely and voluntarily
execute the same.

88. GRAND FARMS, INC. and PHILIPPINE SHARES CORPORATION vs.

COURT OF APPEALS

FACTS:

Petitioners filed a civil case upon the Regional Trial Court for annulment and/or
declaration of nullity of the extrajudicial foreclosure proceedings over their mortgaged
properties, with damages, against respondents clerk of court, deputy sheriff and herein
private respondent Banco Filipino Savings and Mortgage Bank. Soon after private
respondent had filed its answer to the complaint, petitioners filed a request for
admission by private respondent of the allegation, inter alia, that no formal notice of
intention to foreclose the real estate mortgage was sent by private respondent to
petitioners. Petitioner then filed a motion for summary judgment contending that the
foreclosure was violative of the provisions of the mortgage contract, specifically
paragraph (k) thereof which provides that "...and the fact that any communication is not
actually received by the Mortgagor, or that it has been returned unclaimed to the
Mortgagee, or that no person was found at the address given, or that the address is
fictitious, or cannot be located, shall not excuse or relieve the Mortgagor from the
effects of such notice." The trial court issued an order, denying petitioners' motion for
summary judgment. Petitioners thereafter went on a petition for certiorari to
respondent court attacking said orders of denial as having been issued with grave abuse
of discretion. As earlier adverted to, respondent court dismissed the petition, holding
that no personal notice was required to foreclose since private respondent was
constituted by petitioners as their attorney-in-fact to sell the mortgaged property.
Petitioner raised the case to the Supreme Court.

Issue: Whether or not the summary judgment must prosper.

Ruling:
Yes. The Rules of Court authorize the rendition of a summary judgment if the pleadings,
depositions and admissions on file, together with the affidavits, show that, except as to
the amount of damages, there is no issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law. The real test, therefore, of a motion
for summary judgment is whether the pleadings, affidavits and exhibits in support of the
motion are sufficient to overcome the opposing papers and to justify a finding as a
matter of law that there is no defense to the action or that the claim is clearly
meritorious.

Applying said criteria to the case at bar, we find petitioners' action in the court below
for annulment and/or declaration of nullity of the foreclosure proceedings and damages
ripe for summary judgment. Private respondent tacitly admitted in its answer to
petitioners' request for admission that it did not send any formal notice of foreclosure
to petitioners. Stated otherwise, and as is evident from the records, there has been no
denial by private respondent that no personal notice of the extrajudicial foreclosure was
ever sent to petitioners prior thereto. This omission, by itself, rendered the foreclosure
defective and irregular for being contrary to the express provisions of the mortgage
contract. There is thus no further necessity to inquire into the other issues cited by the
trial court, for the foreclosure may be annulled solely on the basis of such defect.

89. NATALIA REALTY CORPORATION vs. PROTACIO RANCHU VALLEZ, CEFERINO MARTINEZ,
PABLO ESPEMEDA, AUGUSTO ARIZOLA and CERIACO BANDOC

FACTS:
Plaintiff corporation moved for a summary judgment on the consolidated cases against
defendants with regards to the ownership certain lots under Rule 34 of the Rules of
Court. Plaintiff claimed that the only issue for resolution, if any, is strictly legal; and that
the pleadings manifestly show that there is no genuine issue or issues as to any material
fact averred in the complaint and that defendants in their common answer to complaint
have put up sham defenses and counterclaims all of which are mere pretended denials
and flimsy defenses. The trial court rendered a summary judgment upon finding that no
valid issue was raised by defendants but only conclusions that because they have been
in actual possession for over 3years of their respective farm lots they are entitled to be
respected of (sic) such occupancy and as such the complaints should be dismissed. In a
joint notice of appeal, defendants sought appellate review in the then Intermediate
Appellate Court. The Court of Appeals, certified the aforesaid consolidated appeals to
this Court on its finding that no question of fact has been raised by appellants for
determination by this Court.

Issue: Whether or not the court-a quo-acted correctly in rendering a summary judgment
in the aforesaid cases.

Ruling:
Yes. It is settled that a summary judgment under Rule 34 of the Rules of Court is proper
only if there is no genuine issue as to the existence of any material fact. The very
allegations of the defendants prove that no valid issue has been tendered by them; they
relied mainly on two points, the alleged invalidity of the title of the plaintiff and their
supposed acquisition of the properties by adverse possession. Defendants' theses are
obviously puerile but they are entitled to the benefit of clarification.
We note with approval the lower court's patient explanation that,-inter alia,-the
certificates of title issued in the name of the plaintiff in accordance with the Land
Registration Act (Act No. 496) is indefeasible after the expiration of one year from the
entry of the decree of registration. Under Section 38 thereof, a petition for review of the
decree must be presented within one year after its entry as described and defined in
Section 4of the same. After the lapse of one year, the decree of registration becomes
incontrovertible and is binding upon and conclusive against all persons whether or not
they were notified of or participated in the registration proceedings. Even assumingarguendo-thatsaid
titles may still be challenged, the present case does not provide the
vehicle for that remedy since the judicial action required is a direct, and not a collateral,
attack.-In fact, under the existing law, Section 48 of the Property Registration Decree
expressly provides that a certificate of title cannot be subject to collateral attack and
can be altered, modified or cancelled only in a direct proceeding in accordance with law.
Appellants' claim of acquisitive prescription is likewise baseless. Under Article 1126 of
the Civil Code, prescription of ownership of lands registered under the Land Registration
Act shall be governed by special laws. Correlatively, Act No. 496 provides that no title to
registered land in derogation of that of the registered owner shall be acquired by
adverse possession.

Consequently, proof of possession by the defendants is both immaterial and

inconsequential. There is nothing either in Presidential Decree No. 2 which may be said
to justify appellants' claim that said decree granted the ownership of said lands to them
and their successors by title.-Apparently, appellants were misled or induced to believe
that they acquired the parcels of land in question when the whole country was declared
by the previous regime as a land reform area.

90. MONTEREY FOODS CORP. vs. VICTORINO E. ESERJOSE

FACTS:
During the existence of the contractual relations between the parties, they entered into
a contract growing agreement whereby petitioner corporation supplied livestock for
respondent to grow, care for and nurture in his farm. After five months of operation,
petitioner corporation withdrew from the contract without paying respondent for his
services, alleging that respondent failed to post the requisite bond under the contract
and poorly performed his farm management functions to the detriment of the animals.
Respondent repeatedly demanded that petitioner corporation pay him for his services
under the contract, but his demands went unheeded. Thereby, respondent filed in the
Regional Trial Court an action for sum of money and damages against petitioner
corporation. At the pre-trial conference, petitioners and their counsel failed to appear,
and an Order was issued declaring them as in default and allowing respondent to
present evidence ex parte. Petitioners filed a motion for new trial, which the trial court
granted. After the pre-trial, respondent submitted a manifestation and motion alleging
that petitioners have admitted their liability under the contract. Respondent moved for
the execution of the partial summary judgment, which the trial court granted.
Petitioners filed a motion for reconsideration, which was denied for lack of merit.
petitioners filed a petition for certiorari before the Court of Appeals but was dismissed.
Petitioners now raised the case to the Supreme Court.

Issue: Whether or not a summary judgment is proper in the case at bar.

Ruling:

Yes. Rule 35, Section 3 of the Rules of Court 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. Applying these
principles to the case at bar, we find that the Court of Appeals did not commit any
reversible error in affirming the assailed orders of the trial court. Hence, the instant
petition must be denied.

The record shows that petitioners admitted liability under the contract growing
agreement. As a result, respondent agreed to waive all his other claims in the complaint,
including his claim for consequential damages. Correspondingly, insofar as the
complaint was concerned, there was no other genuine issue left for which the complaint
for sum of money and damages may be prosecuted. Also by reason of such admission,
petitioners, in effect, likewise waived whatever defenses they may have to deter
recovery by respondent under the said contract. Thus, respondent became entitled, as a
matter of law, to the execution of the partial summary judgment. When there are no
genuine issues of fact to be tried, the Rules of Court allows a party to obtain immediate
relief by way of summary judgment. In short, since the facts are not in dispute, the court
is allowed to decide the case summarily by applying the law to the material facts.

91. Sps. Eduardo B. Evangelista and Epifania C. Evangelista vs. Mercator Finance Corp.
FACTS:
Spouses Evangelista (Petitioners), filed a Petition for Review on Certiorari under Rule 45 of the
Revised Rules of Court, assailing the decision of the Court of Appeals dismissing their petition.
The spouses Evangelista filed a complaint for annulment of titles against the respondents, claiming to
be the registered owners of five (5) parcels of land contained in the real estate mortgage executed by
them and Embassy Farms Inc. in favor of Mercator Financing Corporation (Mercator). The mortgage
was in consideration of certain loans and credit accommodations amounting to P844, 625.78.
The spouses alleged the following: (1) that they executed the said real estate mortgage merely as
officers of Embassy Farms; (2) that they did not receive the proceeds of the loan evidenced by the
promissory note, as all went to Embassy Farms; (3) that the real estate mortgage is void due to
absence of a principal obligation on which it rests; (4) that since the real estate mortgage is void, the
foreclosure proceedings, the subsequent sale as well as the issuance of transfer certificates of title are
likewise void. Petitioners further alleged ambiguity in the wording of the promissory note, which should
be resolved against Mercator who provided the form thereof.
Mercator admitted that petitioners were the owners of the subject parcels of land. It, however,
contended that the spouses executed a Mortgage in favor of Mercator Finance Corporation for and in
consideration of certain loans, and/or other forms of credit accommodations obtained from the
Mortgagee (defendant Mercator Finance Corporation) amounting to EIGHT HUNDRED FORTY-FOUR
THOUSAND SIX HUNDRED TWENTY-FIVE & 78/100 (P844,625.78) and to secure the payment of
the same and those others that the MORTGAGEE may extend to the MORTGAGOR (plaintiffs) x x x.
It contended that since petitioners and Embassy Farms signed the promissory note as co-makers (the
note being worded as For value received, I/We jointly and severally promise to pay to the order of
Mercator), aside from the Continuing Suretyship Agreement subsequently executed to guarantee
the indebtedness, the petitioners are jointly and severally liable with Embassy Farms. Due to their
failure to pay the obligation, the foreclosure and subsequent sale of the mortgaged properties are thus
valid. Respondents Salazar and Lamecs asserted that they are innocent purchasers for value and in
good faith.

ISSUE:
May the spouses be held solidarily liable with Embassy Farms?

RULING:
YES. Courts can interpret a contract only if there is doubt in its letter. But, an examination of the
promissory note shows no such ambiguity. Besides, assuming arguendo that there is an ambiguity,
Section 17 of the Negotiable Instruments Law states, viz:

SECTION 17. Construction where instrument is ambiguous. Where the language of the instrument is
ambiguous or there are omissions therein, the following rules of construction apply: (g) Where an
instrument containing the word I promise to pay is signed by two or more persons, they are deemed
to be jointly and severally liable thereon.

Petitioners also insist that the promissory note does not convey their true intent in executing the
document. The defense is unavailing. Even if petitioners intended to sign the note merely as officers of
Embassy Farms, still this does not erase the fact that they subsequently executed a continuing
suretyship agreement. A surety is one who is solidarily liable with the principal. Petitioners cannot
claim that they did not personally receive any consideration for the contract for well-entrenched is the
rule that the consideration necessary to support a surety obligation need not pass directly to the
surety, a consideration moving to the principal alone being sufficient. A surety is bound by the same
consideration that makes the contract effective between the principal parties thereto. Having executed
the suretyship agreement, there can be no dispute on the personal liability of petitioners.
92. Velarde vs. Social Justice Society

FACTS:
On January 28, 2003, SJS filed a Petition for Declaratory Relief before the RTC-Manila against
Velarde and his co-respondents Eminence, Jaime Cardinal Sin, Executive Minister Erao Manalo,
Brother Eddie Villanueva and Brother Eliseo F. Soriano.
SJS, a registered political party, sought the interpretation of several constitutional provisions,
specifically on the separation of church and state; and a declaratory judgment on the constitutionality
of the acts of religious leaders endorsing a candidate for an elective office, or urging or requiring the
members of their flock to vote for a specified candidate.
The petitioner filed a Motion to dismiss before the trial court owing to the fact that alleged that the
questioned SJS Petition did not state a cause of action and that there was no justiciable controversy.
The trial courts junked the Velarde petitions under certain reasons:
1. It said that it had jurisdiction over the SJS petition, because in praying for a determination as to
whether the actions imputed to the respondents were violative of Article II, Section 6 of the
Fundamental Law, the petition has raised only a question of law.
2. It then proceeded to a lengthy discussion of the issue raised in the Petition the separation of
church and state even tracing, to some extent, the historical background of the principle. Through its
discourse, the court quipped at some point that the "endorsement of specific candidates in an election
to any public office is a clear violation of the separation clause."
The trial courts essay did not contain a statement of facts and a dispositive portion, however. Due to
this aberration, Velarde and Soriano filed separate Motions for Reconsideration before the trial court
owing to these facts.
The lower court denied these Motions. Hence, this petition for review.
On April 13, 2004, the Court en banc conducted an Oral Argument.14
In his Petition, Brother Mike Velarde submits the following issues for this Courts resolution:
1. Whether or not the Decision dated 12 June 2003 rendered by the court a quo was proper and valid;
2. Whether or not there exists justiciable controversy in herein respondents Petition for declaratory
relief;
3. Whether or not herein respondent has legal interest in filing the Petition for declaratory relief;
4. Whether or not the constitutional question sought to be resolved by herein respondent is ripe for
judicial determination;
5. Whether or not there is adequate remedy other than the declaratory relief; and,
6. Whether or not the court a quo has jurisdiction over the Petition for declaratory relief of herein
respondent.

ISSUES:
In its oral argument, the Supreme Court condensed Velardes issues and divided it into 2 groups:
A. Procedural Issues
1. Did the Petition for Declaratory Relief raise a justiciable controversy?
2. Did it state a cause of action?
3.Did respondent have any legal standing to file the Petition for Declaratory Relief?
B. Substantive Issues
1. Did the RTC Decision conform to the form and substance required by the Constitution, the law
and the Rules of Court?
2. May religious leaders like herein petitioner, Bro. Mike Velarde, be prohibited from endorsing
candidates for public office? Corollarily, may they be banned from campaigning against said
candidates? (Not answered in the affirmative)

RULING:
Procedural Issues:
1. NO. A justiciable controversy to an existing case or controversy that is appropriate or ripe for
judicial determination, not one that is conjectural or merely anticipatory. A petition filed with the trial
court should contain a plain, concise and direct statement of the ultimate facts on which the party
pleading relies for his claim.

The SJS Petition fell short of the requirements to constitute a justiciable controversy. Why?
a. It stated no ultimate facts. The petition simply theorized that the people elected who were
endorsed by these religious leaders might become beholden to the latter.
b. It did not sufficiently state a declaration of its rights and duties, what specific legal right of the
petitioner was violated by the respondents therein, and what particular act or acts of the latter were in
breach of its rights, the law or the constitution,
c. The petition did not pray for a stoppage of violated rights. It merely sought an opinion of the
trial court. However, courts are proscribed from rendering an advisory opinion.
It must also be considered that even the religious leaders were puzzled as to the breach of rights they
were claimed to have committed. As pointed out by Soriano, what exactly has he done that merited
the attention of SJS? Jaime Cardinal Sin adds that the election season had not even started at the
time SJS filed its Petition and that he has not been actively involved in partisan politics. The Petition
does not even allege any indication or manifest intent on the part of any of the respondents below to
champion an electoral candidate, or to urge their so-called flock to vote for, a particular candidate. It is
a time-honored rule that sheer speculation does not give rise to an actionable right.
2. NO. A cause of action is an act or an omission of one party in violation of the legal right or
rights of another, causing injury to the latter. (Rebollido v. Court of Appeals, 170 SCRA 800)
Its essential elements are the following: (1) a right in favor of the plaintiff; (2) an obligation on the part
of the named defendant to respect or not to violate such right; and (3) such defendants act or
omission that is violative of the right of the plaintiff or constituting a breach of the obligation of the
former to the latter.
The court held that the complaints failure to state a cause of action became a ground for its outright
dismissal. Why?
The Court found nothing in the SJS Petition to suggest that an explicit allegation of fact that SJS had a
legal right to protect.
In special civil actions for declaratory relief, the concept of cause of action under ordinary civil actions
does not strictly apply. The reason for this exception is that an action for declaratory relief
presupposes that there has been no actual breach of the instruments involved or of rights arising
thereunder. Nevertheless, a breach or violation should be impending, imminent or at least threatened.
The justices could only infer that the interest from its allegation was its mention of its (SJS) thousands
of members who are citizens-taxpayers-registered voters and who are keenly interested. Aside from
the fact that this general averment did not constitute a legal right or interest, the courts inferred
interest too vague and speculative in character. Rules require that the interest must be material to the
issue and affected by the questioned act or instrument.
To bolster its point, the SJS cited the Corpus Juris Secundum and submitted that the plaintiff in a
declaratory judgment action does not seek to enforce a claim against the defendant, but sought a
judicial declaration of the rights of the parties for the purpose of guiding their future conduct, and the
essential distinction between a declaratory judgment action and the usual action is that no actual
wrong need have been committed or loss have occurred in order to sustain the declaratory judgment
action, although there must be no uncertainty that the loss will occur or that the asserted rights will be
invaded.
During the Oral Argument, Velarde and co-respondents strongly asserted that they had not in any way
engaged or intended to participate in partisan politics. Not even the alleged proximity of the elections
to the time the Petition was filed below would have provided the certainty that it had a legal right that
would be jeopardized or violated by any of those respondents.
Even if the SJS petition asserted a legal right, there was nevertheless no certainty that such right
would be invaded by the said respondents.
3. NO. Legal standing or locus standi has been defined as a personal and substantial interest in
the case, such that the party has sustained or will sustain direct injury as a result of the challenged
act.
Interest means a material interest in issue that is affected by the questioned act or instrument, as
distinguished from a mere incidental interest in the question involved.
SJS has no legal interest in the controversy and has failed to establish how the resolution of the
proffered question would benefit or injure it.
Parties bringing suits challenging the constitutionality of a law, an act or a statute must demonstrate
that they have been, or are about to be, denied some right or privilege to which they are
lawfully entitled, or that they are about to be subjected to some burdens or penalties by reason
of the statute or act complained of.
If the petition were to be valid, it should satisfy:
First, parties suing as taxpayers must specifically prove that they have sufficient interest in preventing
the illegal expenditure of money raised by taxation, particularly that of Congress' taxing power.
Second, there was no showing in the Petition for Declaratory Relief that SJS as a political party or its
members as registered voters would be adversely affected by the alleged acts of the respondents
below, such as the deprivation of votes or barring of suffrage to its constituents.
Finally, the allegedly keen interest of its "thousands of members who are citizens-taxpayers-registered
voters" is too general and beyond the contemplation of the standards set by our jurisprudence. Not
only is the presumed interest impersonal in character; it is likewise too vague, highly speculative and
uncertain to satisfy the requirement of standing.
In not a few cases, the Court has liberalized the locus standi requirement when a petition raises an
issue of transcendental significance or importance to the people (IBP v Zamora). The Court deemed
the constitutional issue raised to be both transcendental in importance and novel in nature.
Nevertheless, the barren allegations in the SJS Petition as well as the abbreviated proceedings in the
court would prevent the resolution of the transcendental issue.

Substantive Issues
1. NO. The Constitution commands that no decision shall be rendered by any court without
expressing therein clearly and distinctly the facts and the law on which it is based. No petition
for review or motion for reconsideration of a decision of the court shall be refused due course or
denied without stating the basis therefor.

Consistent with this are Section 1 of Rule 36 of the Rules on Civil Procedure, Rule 120 of the Rules of
Court on Criminal Procedure, Administrative Circular No. 1. which states that :
A judgment or final order determining the merits of the case shall be rendered. The decision shall be
in writing, personally and directly prepared by the judge, stating clearly and distinctly the facts
and law on which it is based, signed by the issuing magistrate, and filed with the clerk of
court.
The SC has reminded magistrates to heed the demand of Section `4, Art VIII of the contsitution. This
was evinced in Yao v. Court of Appeals where Davide, CJ said that faithful adherence to the
requirements of Section 14, Article VIII of the Constitution is indisputably a paramount component of
due process and fair play.

In People v. Bugarin, the court held that the requirement that the decisions of courts must be in writing
and that they must set forth clearly and distinctly the facts and the law on which they are based is
intended, among other things, to inform the parties of the reason or reasons for the decision so that if
any of them appeals, he can point out to the appellate court the finding of facts or the rulings on points
of law with which he disagrees.
The assailed Decision contains no statement of facts (much less an assessment or analysis thereof)
or of the courts findings as to the probable facts. The assailed Decision begins with a statement of
the nature of the action and the question or issue presented. Then follows a brief explanation of the
constitutional provisions involved, and what the Petition sought to achieve. Thereafter, the ensuing
procedural incidents before the trial court are tracked. The Decision proceeds to a full-length opinion
on the nature and the extent of the separation of church and state. Without expressly stating the final
conclusion she has reached or specifying the relief granted or denied, the trial judge ends her
Decision with the clause SO ORDERED.
A decision that does not clearly and distinctly state the facts and the law on which it is based
leaves the parties in the dark as to how it was reached and is precisely prejudicial to the losing
party, who is unable to pinpoint the possible errors of the court for review by a higher tribunal.
More than that, the requirement is an assurance to the parties that, in reaching judgment, the
judge did so through the processes of legal reasoning.
It was truly obvious that the RTCs Decision did not adhere to the Bugarin precedent because of its
failure to express clearly and distinctly the facts on which it was based. The significance of factual
findings lies in the value of the decision as a precedent.
Respondent SJS insisted that the dispositive portion can be found in the body (p. 10) of the assailed
Decision. Stating Endorsement of specific candidates in an election to any public office is a clear
violation of the separation clause.
The Court held that the statement is merely an answer to a hypothetical legal question and just a part
of the opinion of the trial court. It does not conclusively declare the rights (or obligations) of the parties
to the Petition. Neither does it grant any -- much less, the proper -- relief under the circumstances, as
required of a dispositive portion.
The standard for a dispositive was set in Manalang v. Tuason de Rickards where the resolution of the
Court on a given issue as embodied in the dispositive part of the decision or order is the investitive
orcontrollingfactorthatdetermines and settles the rights of the parties and thequestions
presented therein, notwithstanding the existence of statements or declaration in the body of said
order that may be confusing.
In Magdalena Estate, Inc. v. Caluag: The rule is settled that where there is a conflict between the
dispositive part and the opinion, the former must prevail over the latter on the theory that the
dispositive portion is the final order while the opinion is merely a statement ordering nothing.
The statement quoted by SJS does not conclusively declare the rights (or obligations) of the parties to
the Petition. Neither does it grant proper relief under the circumstances, as required of a dispositive
portion.
Failure to comply with the constitutional injunction is a grave abuse of discretion amounting to lack
or excess of jurisdiction. Decisions or orders issued in careless disregard of the constitutional
mandate are a patent nullity and must be struck down as void.
2. It is not legally possible to take up, on the merits, the paramount question involving a
constitutional principle. It is a time-honored rule that the constitutionality of a statute or act will be
passed upon only if, and to the extent that, it is directly and necessarily involved in a justiciable
controversy and is essential to the protection of the rights of the parties concerned.

93. Spouses Miranda vs Court of Appeals

FACTS:
In 1965, Luneta Motor Company filed an action for recovery of a jeep and for recovery of sum of
money against Lucila Java. Java did not appear in court nor did she file responsive pleadings despite
notice hence she was declared in default. As a result, LMC won the case and eventually a writ of
execution was issued in their favor. Pursuant to said writ certain properties of Java were sold in a
public auction including a parcel of land which LMC was able to buy in said action. LMC then sold said
parcel of land to spouses Miranda.
In 1977, Java filed an action to annul the previous judgment, the auction proceedings, and the
subsequent transfers of the auctioned property. Java alleged that the reason why she did not appear
in court and why she never filed an ANSWER was because she never received any summons from
the trial court.
The Court Sheriff however testified that he handed a copies of the summons and the complaint to a
certain Ernesto Elizondo (son in law of Java) in the compound where Java resides; that said service
was by way of substituted service.
The trial court ruled that there is a proper service of summons. The Court of Appeals however
reversed the judgment of the trial court.

ISSUE:
Whether or not there is a valid service of summons.

RULING:
No, there is none. The Sheriffs report did not fully explain why he did a substituted service.
Particularly, sheriff did not explain why personal service was not done. Substituted service can only be
effected if personal service, under certain circumstances, cannot be effected. Service of summons
upon the defendant is essential for the court to acquire jurisdiction over his person. The modes of
service should be strictly followed in order that the court may acquire jurisdiction over the person.
Thus, it is only when a defendant cannot be served personally within a reasonable time that
substituted service may be made.
Another glaring defect in the service of summons is that assuming that substituted service can be
effected, still the service of summons in this case is invalid because said service was upon Elizondo
who testified in court that though he lives in the same compound as Java, he does not reside in the
same dwelling as Java (they live in different houses) hence, this is a violation to the strict requirements
of the Rules of Court.
As a result, the judgment of the trial court, as well as the public auction and the subsequent transfers
of the properties involved are all void. The trial court never acquired jurisdiction over Java.
94. REPUBLIC v. NOLASCO

FACTS:
1. The root of the dispute is a public works project, the Agno River Flood Control Project (Project),
the undertaking of which has been unfortunately delayed due to the present petition.
2. A Bid and Awards Committee (BAC) was constituted by the Department of Public Works and
Highways (DPWH) for the purpose of conducting international competitive bidding for the
procurement of the contract for Package.
3. Six (6) pre-qualified contractors submitted their bids for the project, among them the present
intervenors Daewoo Engineering and Construction Co., Ltd. (Daewoo), and China International
Water and Electric Corp. (China International).
4. However, even before the BAC could come out with its recommendations, a legal challenge
had already been posed to preempt the awarding of the contract to Daewoo.
5. On 19 February 2002, Emiliano R. Nolasco, a self-identified taxpayer and newspaper
publisher/editor-in-chief, filed a Petition, seeking a temporary restraining order and/or
preliminary injunction, with the RTC of Manila, naming the DPWH and the members of the
BAC as respondents. He alleged having obtained copies of Confidential Reports from an
Unnamed DPWH Consultant, which he attached to his petition. Nolasco argued that based on
the confidential reports it was apparent that Daewoos bid was unacceptable and the putative
award to Daewoo and Daewoo disqualified as a bidder.
6. The RTC issued a TRO for a period of 20 days.
7. Upon learning of the TRO, the DPWH and the BAC, through the Office of the Solicitor General
(OSG), filed a Motion to Dismiss Petition with Motion for Dissolution of Temporary Restraining
Order. While noting the impropriety of a twenty (20) days TRO without prior notice or hearing,
they pointed out that Republic Act No. 8975 precisely prohibited the issuance by any court,
save the Supreme Court, of a TRO of Preliminary Injunction which restrains or prohibits the
bidding for or awarding of a contract/project of the national government. Accordingly, they
prayed that the petition be dismissed and the TRO dissolved.
8. This new motion was set for hearing on 21 March 2002, and thereupon the parties were
afforded the opportunity to argue their case. Then, on 27 March 2002, the RTC issued an order
dismissing Nolascos petition. The RTC held that it was a suit against the government without
its consent. RTC judge, realizing his mistake, recalled the said TRO in accordance with RA No.
8975.
9. Nolasco filed a Motion to Issue Partial Judgment and Motion to Dismiss Petition. In said
motion, Nolasco is asking the RTC to order to order DPWH to award the bid to CHINA, instead
of Daewoo.
ISSUES:
Whether or not the RTC erred in its September 6, 2002 decision with regard to Nolascos
Motion to Issue Partial Judgment and Motion to Dismiss Petition.
Whether or not Section 5 Rule 36 (separate judgments) may be applied with regard to the relief
sought by Nolasco.
RULING:
No. The RTC did not err in its ruling with regard to said motion.
No. Separate Judgment is not applicable.
Nolascos petition had been correctly dismissed by the RTC on two grounds: that Nolascos
general interest as a taxpayer was not sufficient to establish any direct injury to him should the Project
be awarded to Daewoo; and that the petition was a suit against the State, which may not prosper
without its consent.
The dispositive portion of the assailed Order correctly limited itself to the denial of Nolascos
motion for reconsideration without allowing any other relief that Nolasco prayed for in his Motion for
Partial Judgment and to Dismiss Petition. Had the respondent judge instead opted to grant partial
judgment and direct the award of the Project to China International, the Court would not hesitate to
strike down such award. Yet the respondent judge did not unequivocally, and merely advised that the
DPWH Secretary should consider such an option.
Section 5. Separate judgments. When more than one claim for relief is presented in an
action, the court, at any stage, upon a determination of the issues material to a particular claim and all
counterclaims arising out of the transaction or occurrence which is the subject matter of the clain, may
render a separate judgment disposing of such claim. The judgment shall terminate the action with
respect to the claim so disposed of and the action shall proceed as to the remaining claims.
On paper, Nolascos petition prays for two reliefs, that the petitioner be restrained from
awarding the Project to Daewoo, and that Daewoo be disqualified as a bidder and its bid be rejected.
Yet these reliefs are obviously intertwined for the allowance of one would necessarily lead to the grant
of the other. The multiple reliefs referred to in the provision refer to those sufficiently segregate from
each other that the allowance of one at a preliminary stage will not preclude litigation on the merits of
the others.
More importantly, the rule is explicit that partial judgment with regards one of the reliefs is warranted
only after a determination of the issues material to a particular claim and all counterclaims arising out
of the transaction or occurrence which is the subject matter of the claim." Herein, the partial judgment
was sought even before the respondents had the chance to file their answer to the petition. Moreover,
it was prayed for at a point when, at even such a preliminary stage, the claimant was actually
somehow able to already present evidence in support of his claim, but before the respondents had the
chance to rebut this claim or support countervailing evidence.
At bare minimum, the allowance of a partial judgment at this stage would constitute a denial of
constitutional due process. It would condemn before hearing, and render judgment before trial. Had
indeed partial judgment been granted in the assailed Order, it would have been rendered before the
Petitioner were afforded the opportunity to rebut the evidence of Nolasco, or to present their own
countervailing evidence. While the allowance of partial judgments may expedite the litigation of claims,
it cannot be sanctioned at a stage when the trial judge has not had the opportunity to hear all sides to
the claim. In fact, it was highly imprudent for the respondent judge to have concluded, as he did in his
Order, that it was an admitted fact that the BAC had strayed from fairly applying the Bidding Laws,
Guidelines, Rules, and Regulations, and Bid Tender Documents, considering that the Petitioner had
not even filed an answer or been allowed the opportunity to present any evidence on its behalf.
95. GUILLERMO AND LOURDES BERNALDEZ vs. CONCHITA FRANCIA

FACTS:
Respondent Conchita Francia is the registered owner of a residential lot in Sampaloc, Manila with an
area of 1,000 square meters and covered by Transfer Certificate of Title (TCT) No. 180199. Located
beside said lot is a parcel of land owned by petitioners Guillermo and Lourdes Bernaldez, with an area
of 114 square meters.
On October 8, 1988, the building and other improvements erected on respondents lot were destroyed
by fire. Subsequently, petitioners built their kitchen and in the process encroached upon a portion of
respondents lot. Respondent had her property resurveyed by a geodetic engineer and as a result, she
was able to confirm that petitioners had encroached upon some nineteen square meters of her lot.
Respondent made several demands upon petitioners to vacate the portion of her lot which they were
occupying, but petitioners did not comply therewith. Respondent then filed with the Regional Trial
Court (RTC) of Manila a complaint against petitioners, praying that the court determine the rightful
owner of the area in dispute.
While the trial court was able to establish a common boundary of respondents and petitioners lots
from the reports filed by Santamaria and Mercado, it still could not conclusively determine whether the
disputed area belonged to respondents lot or to that of petitioners. On September 10, 1990, the trial
court issued an order calling for another resurvey of the two lots and directing the Director of the
Bureau of Lands to appoint a competent geodetic engineer to undertake the resurvey of petitioners
and respondents properties in the presence of representatives of the RTC and of the parties.
Thereafter, a survey report was submitted with a verification plan, stating that petitioners had
encroached upon seventeen square meters of respondents lot.
On August 18, 1995, the RTC rendered its decision holding that petitioners had encroached on
respondents lot by an area of seventeen square meters.
Petitioners filed with the trial court a motion for new trial on the ground of newly discovered
evidence. They claimed that the TCT covering respondents lot referred to another lot owned by
Nolasco and Editha Tupaz. However, the RTC denied the motion for lack of merit.
Petitioners appealed the decision of the trial court to the Court of Appeals. On January 19, 2000, the
appellate court promulgated its Decision affirming in toto the decision of the trial court. The Court of
Appeals ruled that the factual findings of the RTC were supported by the evidence presented before
it. It, likewise, held that the trial court did not err in denying the motion for new trial, since petitioners
had not satisfactorily shown that they exercised reasonable diligence in producing or locating a copy
of TCT No. 180189 in the name of Nolasco and Editha Tupaz before or during trial but had
nonetheless failed to secure it. Thereafter, the appellate court also denied petitioners motion for
reconsideration of its decision in a Resolution.

ISSUES:
1. Whether or not Rule 45 of the Revised Rules of Civil Procedure is applicable in the instant
case?
2. Whether or not the Motion for New Trial filed by the Petitioner is correctly denied by the
Court?

RULING:
1. No. Section 1, Rule 45 of the Revised Rules of Civil Procedure is clear on this point:

Filing of petition with the Supreme Court. A party desiring to appeal by certiorari from a judgment or
final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial Court or other
courts whenever authorized by law, may file with the Supreme Court a verified petition for review on
certiorari. The petition shall raise only questions of law which must be distinctly set forth.
In a petition for review on certiorari, the Supreme Court is limited to reviewing errors of law absent any
showing that the findings of fact of the appellate court are not supported by the records. Moreover,
when factual findings of the trial court are confirmed by the Court of Appeals, said facts are final and
conclusive on this Court, unless the same are not supported by the evidence on record.

In the present case, the findings of fact of the Court of Appeals are supported by the records. The
Court agrees with the observation of the appellate court that the conclusion of the RTC that petitioners
had encroached on respondents lot was substantiated by the similar findings of both Engr. Santamaria
and Engr. De Lara; and that petitioners allegation that De Laras report was technically and grossly
ineffective was unsupported by any evidence.

2. Yes. The Court have previously ruled that a motion for new trial on the ground of newly
discovered evidence shall be granted when the concurrence of the following requisites is
established: (a) the evidence is discovered after trial; (b) the evidence could not have been
discovered and produced during trial even with the exercise of reasonable diligence; and
(c) the evidence is material and not merely corroborative, cumulative or impeaching and is
of such weight that if admitted, would probably change the judgment. In order that a
particular piece of evidence may be regarded as newly discovered for purposes of granting
a new trial, it is essential to show that the offering party exercised reasonable diligence in
seeking to locate such evidence before or during trial but had nonetheless failed to secure
it.

The evidence offered by petitioners, TCT No. 180189 issued by the Registry of Deeds of Manila not to
respondent, but to Spouses Nolasco E. Tupaz and Editha L. Tupaz, does not satisfy the
aforementioned requisites. The Court notes that although petitioners found out about the existence of
said TCT only after trial, they could have easily discovered the same before or during the trial of the
case had they bothered to check the TCT of respondents lot to ascertain whether or not it overlapped
with their own lot. In any case, TCT No. 180189 is hardly material to their case, considering that
respondents TCT is of a different number: TCT No. 180199. Hence, it is not difficult to see why the two
certificates of title refer to different parcels of land and owners. Such piece of evidence would certainly
not have affected, much less, altered the outcome of the case.

96. LIBUDAN vs. GIL

NATURE OF CASE:
This case is a petition for review of the orders of the Court of First Instance of Davao, dated
September 10, 1962, in Land Registration case No. 281, denying the petition for review.

FACTS:
The factual setting stretches some 35 years back. On June 18, 1937, the late PascualLibudan filed a
petition for the registration of a 188,725-square-meter land in Barrio Babac, Island of Samal, Davao,
(described in Plan SWO, submitted as Exhibit A, in Registration Case 281), asserting title thereto by
inheritance from his late father, coupled with continuous, exclusive and notorious possession since
time immemorial under a bona fide claim of ownership. 5 Jose Palma Gil claiming that he purchased
the entire land from one Mangob (Samal), opposed the petition. 6But later, or on August 3, 1939, the
oppositor amended his opposition by reducing his claim to only 15 hectares, delimited within points 1
to 4, 7 to 17 and 1 of the plan. 7
Three months after he filed his amended opposition in the registration case, Jose Palma Gil sought in
Civil Case No. 204 before the Justice of the Peace Court of Samal, the ejectment of Libudan from the
15-hectare area claimed by the former in the registration case. Judgment was rendered by the Justice
of the Peace Court on December 18, 1939 ordering Libudan (and his agents) to vacate the premises,
restore the possession to Jose Palma Gil and pay him P320 for the value of the products taken
thereform plus P100 as damages for the illegal occupation. 8
Nine months thereafter, or on September 7, 1940, the Davao Land Registration Court rendered
judgment confirming the title of Jose Palma Gil over the 15-hectare portion of the land, and awarding
the remainder thereof or the 31,040-square-meter portion to Libudan. 9
Two years before the aforequoted decision of the Supreme Court was promulgated, or on May 29,
1954, the Davao Registration Court, after holding a new trial in G.L.R.O. 281, adjudicated to
PascualLibudan's heirs, the entire parcel of land applied for (18.8725 heactares)

The Registration Court rejected the claim of oppositor Jose Palma Gil that the property claimed by him
is part of the land he bought from Mongob.

This was affirmed by the Court of Appeals in its decision promulgated on May 6, 1961, or five years
after the Supreme Court confirmed Jose Palma Gil's ownership over the 31,040-square-meter portion
of the land in controversy.

ISSUE:

Whether the court has erred in denying the petition for review applying the doctrine of
res judicata?

RULING:

No. the court is not wrong in denying the petition.

The judgment of the Davao Land Registration Court, as affirmed by the Court of Appeals (CA-G.R. No.
14628-R) adjudicating the entire parcel of land to the heirs of deceased PascualLibudan is res
judicata on the question of title over the 31,040-square-meter portion thereof; and (2) the decision
rendered by the Court in Civil Case No. 458 on the reliance of which the order of substitution was
granted, is null and void, because the Land registration court having previously acquired jurisdiction
over the res retained it, and had the sole and exclusive authority to determine the question of title of
the parties over the land involved to the exclusion of the other courts.
The doctrine of res judicata is predicated upon the existence of a prior final and conclusive judgment
over the same subject matter, cause of action and parties, at the time the second action is lifted.
Considering that the final jdgment of this Court confirming Jose Palma Gil's ownership over the 3-
hectare lot antedated by five years the decision of the Court of Appeals adjudicating the entire land to
the successors-in-interest of Libudan, the effects of res judicata should be applied, if at all, in favor of
the oppositors and against the applicants. For undoubtedly a prior decision in a civil case may
constitute as res judicata in a land registration proceedings. And again, "it is the first judgment for the
same cause of action that constitutes the effective defense without regard to the order of time in which
the suits were commenced or that they were both pending at the same time.

97. DELOS SANTOS, ET.AL vs. ELIZALDE, ET.AL

NATURE OF THE CASE:

This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to reverse and set
aside the May 11, 1999 Decision of the Court of Appeals (CA).
FACTS:
On December 15, 1986, petitioners filed a Complaint for Quieting of Title, Damages and Attorney's
Fees before the Kalibo, Aklan RTC, involving four (4) adjoining lots designated as Lots 393-A, 393-B,
394-D, and 394-E, with areas of 1,515 square meters (sqm), 1,010 sqm, 5,764 sqm, and 6,482 sqm,
respectively, for a total land area of 14,771 sqm, located in Boracay Island, Malay, Aklan. 5 An
amended complaint was thereafter filed on May 8, 1991.
Petitioners claimed the aforementioned lots as their inheritance from the late Mariano delos Santos,
their common ascendant, either by their own right or by right of representation. Petitioners alleged that
the late Mariano delos Santos was the original owner of the lots. On the other hand, respondents
spouses Fred and Joan Elizalde, the first set of intervenors before the trial court, claimed that they
purchased the lots on June 18, 1974 from the heirs of Leonardo delos Santos, he being the rightful
and exclusive owner of the said lots. Respondents Gloria Martin, Domingo Casimero, Sergio
Casimero, AbundioCasimero, and TeodoroCasimero, the second set of intervenors before the trial
court, claimed ownership over Lots 393-B and 394-E, as heirs of Tomasa Prado, who also allegedly
owned said lots. Respondents Rosita delos Santos-Flores and Jesus delos Santos, the third set of
intervenors and two of the three legitimate children of the late Leonardo delos Santos, claimed 2/3 of
the disputed lots as their rightful inheritance. Respondents delos Santos alleged that they did not sell
nor assign their share in the property to anyone, including respondent Fred Elizalde.
After due hearing of the case, the trial court issued the April 29, 1996 Decision, the dispositive portion
of which reads:
WHEREFORE, in view of the foregoing considerations, judgment is hereby rendered as follows:
Dismissing the complaint filed by the plaintiffs as well as the complaint in intervention filed by the
second set of intervenorsCasimeros, et al. for lack of merit
Thus, petitioners and respondent Fred Elizalde filed their separate Notices of Appeal dated June 6,
19967 and May 16, 1996,8 respectively. The cases were docketed as CA-G.R. SP No. 48475 for
respondent Elizalde and CA-G.R. CV No. 54136 for petitioners. Subsequently, the CA issued the June
2, 1998 Notice to File Brief,9 requiring petitioners and respondent Elizalde to file their briefs within
forty-five (45) days from receipt of said notice.
On July 27, 1998, petitioners filed by registered mail a July 27, 1998 Motion for Extension of Time to
File Brief for Plaintiffs-Appellants.10 In their motion, petitioners admitted having received a copy of the
Notice to File Brief on June 15, 1998; thus, they had until July 30, 1998 to file their brief, and prayed
for an extension of forty-five (45) days from July 30, 1998 to September 13, 1998. On September 10,
1998, petitioners filed another motion for extension, 11 seeking another forty five (45)-day extension, or
until October 27, 1998, within which to file their brief.
In the meantime, respondents Fred Elizalde, Jesus delos Santos, and Rosita delos Santos-Flores filed
an October 6, 1998 Joint Manifestation and Motion,12 whereby respondent Elizalde abandoned his
appeal by virtue of an amicable settlement between the parties through the May 27, 1997
Agreement.13 They agreed to swap and re-adjust the areas adjudged by the trial court in their favor,
without prejudice to a final judgment by the CA. In addition, Elizalde moved that his appeal be
considered as withdrawn and that he be excused from filing an appellant's brief.
On October 27, 1998, petitioners filed an Ex-Parte Motion for Final Extension of Period to File Brief for
Plaintiffs-Appellants,14 seeking an extension of thirty (30) days, or until November 27, 1998, within
which to file their brief. On November 27, 1998, petitioners filed another motion for extension, 15asking
for another thirty (30)-day extension. And yet again, on December 28, 1998, petitioners filed another
motion for extension,16 asking for another thirty (30)-day extension to file their brief, such that the
period sought to file appellant's brief would be until January 27, 1999. In sum, petitioners had a total
extension of one hundred eighty (180) days from July 27, 1998, when they filed a motion for extension
before the CA for the first time.
Respondents delos Santos opposed the foregoing motions for extension and moved for the dismissal
of the appeal for petitioners' failure to file the required appellants' brief.
On January 31, 2000, the CA issued the assailed Resolution, wherein it was ruled that:
The "Motion for Reconsideration With Prayer for the Reinstatement of Appeal" filed on June 17, 1999
by the said new counsel for plaintiffs-appellants, to which an Opposition has been filed by the first set
of intervenors-appellees, is DENIED admission for being late by nine (9) days. The records show that
plaintiffs-appellants' counsel of record, Atty. Napoleon M. Victoriano, who has not filed any notice of
withdrawal as counsel as per report of the Judicial Records Division, received copy of the Court's
Decision dated May 11, 1998, on May 24, 1999. Thus, appellants had only until June 8, 1999 to file
their Motion for Reconsideration.27
Hence, this petition is before us.

ISSUE:
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN DENYING ADMISSION TO
PETITIONERS' MOTION FOR RECONSIDERATION WITH PRAYER FOR THE REINSTATEMENT
OF APPEAL FILED BY THEIR NEW COUNSEL FOR HAVING BEEN FILED NINE (9) DAYS LATE,
OVERLOOKING AND DISREGARDING THE FACT:
A. THAT PETITIONERS LEARNED OF THE DECISION OF THE COURT OF APPEALS DATED MAY
11, 1999 ONLY ON JUNE 2, 1999, AND ON JUNE 17, 1999, OR WITHIN THE FIFTEEN (15)-DAY
REGLEMENTARY PERIOD THEY FILED THEIR AFORESAID MOTION FOR RECONSIDERATION;

RULING:
The petition must be denied.
Petitioners argue that their Motion for Reconsideration was filed on time as the reglementary period for
the filing of it should be counted from the time when petitioners themselves obtained a copy of the
assailed Decision of the CA on June 2, 1999, and not from the time that their former counsel, Atty.
Victoriano, received a copy of said Decision on May 24, 1999.
Section 1 of Rule 37, in conjunction with Section 3 of Rule 41 of the Rules of Court, provides for the
period within which a Motion for Reconsideration may be filed, to wit:
Section 1.Grounds of and period for filing motion for new trial or reconsideration. Within the period for
taking an appeal, the aggrieved party may move the trial court to set aside the judgment or final order
and grant a new trial for one or more of the following causes materially affecting the substantial rights
of said party:
Within the same period, the aggrieved party may also move for reconsideration upon the grounds that
the damages awarded are excessive, that the evidence is insufficient to justify the decision or final
order, or that the decision or final order is contrary to law.
Section 3.Period of ordinary appeal. The appeal shall be taken within fifteen (15) days from notice of
the judgment or final order appealed from. Where a record on appeal is required, the appellant shall
file a notice of appeal and a record on appeal within thirty (30) days from notice of the judgment or
final order.
The period of appeal shall be interrupted by a timely motion for new trial or reconsideration. No motion
for extension of time to file a motion for new trial or reconsideration shall be allowed. ( Emphasis
supplied.)
The abovementioned fifteen (15)-day period begins to run upon receipt of notice of the decision or
final order appealed from. Such period has been considered to begin upon receipt of notice by the
counsel of record, which is considered notice to the parties. 29 Service of judgment on the party is
prohibited and is not considered the official receipt of the judgment.30
Thus, the fifteen (15)-day period should run from May 24, 1999, when Atty. Victoriano received a copy
of the assailed Decision of the CA, and not from June 2, 1999, when petitioners claimed to have been
informed of the CA decision.

98. EMILIO TUASON vs. COURT OF APPEALS

NATURE OF THE CASE:

The case is a petition for review on certiorari seeks to annul and set aside the decision dated July 29,
1994 of the Court of Appeals in CA-G.R. CV No. 37925 denying petitioners appeal from an order of
the Regional Trial Court, Branch 149, Makati in Civil Case No. 3769

FACTS:

In 1989, private respondent Maria Victoria Lopez Tuason filed with the Regional Trial Court, Branch
149, Makati a petition for annulment or declaration of nullity of her marriage to petitioner Emilio R.
Tuason. In her complaint, private respondent alleged that she and petitioner were married on June 3,
1972 and from this union, begot two children; that at the time of the marriage, petitioner was already
psychologically incapacitated to comply with his essential marital obligations which became manifest
afterward and resulted in violent fights between husband and wife.
On June 29, 1990, the trial court rendered judgment declaring the nullity of private respondents
marriage to petitioner and awarding custody of the children to private respondent. The court ruled:
WHEREFORE, in view of the foregoing, the marriage contracted by Ma. Victoria L. Tuason and Emilio
R. Tuason on June 3, 1972 is declared null and void on the ground of psychological incapacity on the
part of the defendant under Sec. 36 of the Family Code. Let herein judgment of annulment be
recorded in the registry of Mandaluyong, Metro Manila where the marriage was contracted and in the
registry of Makati, Metro Manila where the marriage is annulled.
On September 24, 1990, private respondent filed a Motion for Dissolution of Conjugal Partnership of
Gains and Adjudication to Plaintiff of the Conjugal Properties. [7] Petitioner opposed the motion on
October 17, 1998.
Also on the same day, October 17, 1990, petitioner, through new counsel, filed with the trial court a
petition for relief from judgment of the June 29, 1990 decision.
The trial court denied the petition on August 8, 1991.
Petitioner appealed before the Court of Appeals the order of the trial court denying his petition for relief
from judgment. On July 29, 1994, the Court of Appeals dismissed the appeal and affirmed the order of
the trial court.

ISSUE:

The threshold issue is whether a petition for relief from judgment is warranted under the
circumstances of the case

RULINGS:

We rule in the negative.

A petition for relief from judgment is governed by Rule 38, Section 2 of the Revised Rules of Court
which provides:
Section 2.Petition to Court of First Instance for relief from judgment or other proceedings thereof. -
When a judgment or order is entered, or any other proceeding is taken, against a party in a court of
first instance through fraud, accident, mistake, or excusable negligence, he may file a petition in such
court and in the same cause praying that the judgment, order or proceeding be set aside.
Under the rules, a final and executory judgment or order of the Regional Trial Court may be set aside
on the ground of fraud, accident, mistake or excusable negligence. In addition, the petitioner must
assert facts showing that he has a good, substantial and meritorious defense or cause of action. If the
petition is granted, the court shall proceed to hear and determine the case as if a timely motion for
new trial had been granted therein.[12]
In the case at bar, the decision annulling petitioners marriage to private respondent had already
become final and executory when petitioner failed to appeal during the reglementary period.
The records, show that the former counsel of petitioner did not inform the trial court of this
confinement. And when the court rendered its decision, the same counsel was out of the country for
which reason the decision became final and executory as no appeal was taken therefrom.
The failure of petitioners counsel to notify him on time of the adverse judgment to enable him to
appeal therefrom is negligence which is not excusable. Notice sent to counsel of record is binding
upon the client and the neglect or failure of counsel to inform him of an adverse judgment resulting in
the loss of his right to appeal is not a ground for setting aside a judgment valid and regular on its face.
99. SPOUSES BENIGNO QUE and ERLINDA QUE vs. COURT OF APPEALS

FACTS:
Since 1960, respondent Isabel Arrieta-Costales (respondent) has been occupying as owner a parcel of
land in Sta. Monica, Magsingal, Ilocos Sur measuring 7,033 square meters. Designated as Lot No.
6023, the property was originally owned by one Lorenzo Cario (Lorenzo) who died in 1960. In 1997,
respondent declared the property in her name for taxation purposes. Petitioner Adela Urian (Urian) is
Lorenzos grandniece, being the adopted daughter of Lorenzos nephew Gonzalo Cario (Gonzalo), son
of Lorenzos brother Mariano Cario.
In February 2000, respondent filed a complaint against Urian and petitioners BenignoQue and
ErlindaQue (spouses Que)[3] in the Regional Trial Court, Cabugao, Ilocos Sur, Branch 24 (trial court)
for Annulment of Quitclaim[,] Ownership, Possession and Damages (Civil Case No. 503-KC).
After petitioners received the complaint with the summonses on 21 March 2000, they hired the
services of one Atty. Ronnie Ranot (Atty. Ranot). However, Atty. Ranot failed to file petitioners Answer.
On 4 May 2000, respondent moved to declare petitioners in default.
On 18 December 2000, petitioners, represented this time by one Atty. Oliver Cachapero (Atty.
Cachapero), filed with the trial court a petition for relief from judgment under Rule 38 of the 1997 Rules
of Civil Procedure (Rules). Petitioners claimed that their failure to file an Answer and to seek
reconsideration or new trial on time was due to the excusable negligence of their previous counsels.
Petitioners also invoked mistake and fraud as they were allegedly under the impression that Atty.
Ranot had prepared and filed the necessary pleading or that the necessary pleading to vacate the
judgment and secure new trial was prepared.

ISSUE:
Whether the petitioner is entitled for relief of judgment under Rule 38 of the 1997 Rules of Civil
Procedure.
RULINGS:

The trial court denied the petition for relief from judgment. The trial court held that the
negligence of their counsels bound petitioners

Under Section 1, Rule 38, of the Rules of Court, the Court may grant relief from judgment only
when a judgment or final order is entered, or any other proceeding is taken against a party in any
court through fraud, accident, mistake, or excusable negligence.-
Under Section 1, Rule 38 (Section 1), the court may grant relief from judgment only [w]hen a
judgment or final order is entered, or any other proceeding is taken against a party in any court
through fraud, accident, mistake, or excusable negligence x xx. In their petition for relief from
judgment in the trial court, petitioners contended that judgment was entered against them through
mistake or fraud because they were allegedly under the impression that Atty. Ranot had prepared
and filed the necessary pleading. This is not the fraud or mistake contemplated under Section 1. As
used in that provision, mistake refers to mistake of fact, not of law, which relates to the case. Fraud,
on the other hand, must be extrinsic or collateral, that is, the kind which prevented the aggrieved party
from having a trial or presenting his case to the court. Clearly, petitioners mistaken assumption that
Atty. Ranot had attended to his professional duties is neither mistake nor fraud.

100. TERESITA MONZON, SPS. JAMES & MARIA ROSA NIEVES RELOVA and SPS.
BIENVENIDO & EUFRACIA PEREZ.

NATURE OF THE CASE:

This is a Petition for Review on Certiorari assailing the Decision of the Court of Appeals and its
Resolution affirming the Decision of the Regional Trial Court (RTC) of Tagaytay City, Branch 18.
FACTS:
The respondent spouses James and Maria Rosa Nieves Relova and the spouses Bienvenido
and Eufracia Perez, respondents before the Court, filed against Atty. Ana Liza Luna, Clerk of Court of
Branch 18 of the RTC of Tagaytay City, and herein petitioner TeresitaMonzon an initiatory pleading
captioned as a Petition for Injunction.

In their Petition for Injunction, respondents alleged that Monzon executed a promissory note in favor of
the spouses Perez for the amount of P600,000.00, with interest of five percent per month. This was
secured by a 300-square meter lot in Barangay Kaybagal, Tagaytay City. Monzon executed a Deed of
Absolute Sale over the said parcel of land in favor of the spouses Perez.

Later the Coastal Lending Corporation extrajudicially foreclosed the entire 9,967-square meter
property covered by Psu-232001, including the portions mortgaged and subsequently sold to
respondents. According to the Petition for Injunction, Monzon was indebted to the Coastal Lending
Corporation in the total amount of P3,398,832.35. The winning bidder in the extrajudicial foreclosure,
Addio Properties Inc., paid the amount of P5,001,127.00, thus leaving a P1,602,393.65 residue.
According to respondents, this residue amount, which is in the custody of Atty. Luna as Branch Clerk
of Court, should be turned over to them pursuant to Section 4, Rule 68 of the Revised Rules of Civil
Procedure. Thus, respondents pray in their Petition for Injunction for a judgment (1) finding Monzon
liable to the spouses Perez in the amount of P1,215,000.00 and to the spouses Relova in the amount
of P385,000.00; (2) ordering Atty. Luna to deliver said amounts to respondents; and (3) restraining
Atty. Luna from delivering any amount to Monzon pending such delivery in number (2).

ISSUE:
 Whether the court erred in rendering decision in favor of the respondent based on Sec. 4,
Rule 68 of the Revised Rules of Civil Procedure?

RULINGS:
Yes the court committed an error.
According to Section 4, Rule 68 of the Rules of Court, which is the basis of respondent's
alleged cause of action entitling them to the residue of the amount paid in the foreclosure sale,
provides as follows:
SEC. 4. Disposition of proceeds of sale.--The amount realized from the foreclosure sale of the
mortgaged property shall, after deducting the costs of the sale, be paid to the person foreclosing the
mortgage, and when there shall be any balance or residue, after paying off the mortgage debt due, the
same shall be paid to junior encumbrancers in the order of their priority, to be ascertained by the court,
or if there be no such encumbrancers or there be a balance or residue after payment to them, then to
the mortgagor or his duly authorized agent, or to the person entitled to it.
However, Rule 68 governs the judicial foreclosure of mortgages. Extra-judicial foreclosure of
mortgages, which was what transpired in the case at bar, is governed by Act No. 3135, as amended
by Act No. 4118, Section 6 of Republic Act No. 7353, Section 18 of Republic Act No. 7906, and
Section 47 of Republic Act No. 8791. A.M. No. 99-10-05-0, issued on 14 December 1999, provides for
the procedure to be observed in the conduct of an extrajudicial foreclosure sale.
101. SPOUSES OSCAR ARCENAS and DOLORES ARCENAS,
vs.
QUEEN CITY DEVELOPMENT BANK and COURT OF APPEALS (Nineteenth Division)

FACTS:
This is a petition for review on certiorari assailing the Resolution of the Court of Appeals which
dismissed petitioner's petition for annulment of order, as well as its Resolution, which denied
petitioner's motion for reconsideration.
Spouses Dolores and Oscar Arcenas filed with the Regional Trial Court (RTC) of Roxas City, an
Action for Declaratory Relief against respondent Queen City Development Bank. The Spouses
Arcenas prayed for the declaration of their rights as lessors under the contract of lease.
Respondent bank filed an Answer with Affirmative Defenses and Counterclaim contending, among
others, that the action for declaratory relief was not proper, since the contract of lease had already
been violated. Respondent bank counterclaimed for the rescission of the contract of lease, actual
damages for its relocation and attorney's fees.
The RTC dismissed the action for declaratory relief and set the hearing on respondent bank's
counterclaim for damages. The Spouses Arcenas'motion for reconsideration was denied. Respondent
bank later presented its evidence on its counterclaim.
Respondent bank then filed its Answer with Affirmative Defenses and Counterclaim. The RTC then set
the case for pre-trial.The Spouses Arcenas subsequently filed their Pre-Trial Brief with the proposed
amicable settlement which provided that respondent bank would continue to pay the agreed rentals
until the time the parties could find a substitute lessee. During the scheduled pre-trial conference,
respondent bank's counsel manifested its interest in the proposal but wanted to know the exact
amount for settlement; thus, the pre-trial was reset.
Spouses Arcenas filed, a written Proposed Settlement in the amount of P1,297,514.00. Respondent
bank was asked to comment on the proposed settlement.During the pre-trial conference in respondent
bank's counsel manifested that the parties were in the process of settling the case
amicably.Subsequently, respondent bank submitted its Formal Counter-Proposal for Settlement.
On the scheduled hearing, despite due notice, the Spouses Arcenas and their counsel failed to
appear; thus, respondent bank presented evidence on its counterclaim, rested its case and submitted
the same for decision. On the same day, the RTC issued an Order submitting the case for decision.
The Order was received by the Spouses Arcenas.
Spouses Arcenas filed a Manifestation with Motion alleging that their failure to file a motion to
reconsider the Order declaring them non-suited, and their failure to attend the January 8, 2004 hearing
on respondent bank's counterclaim was due to their mistaken belief that respondent bank was
earnestly seeking a settlement on both civil cases; that honest mistake and excusable negligence
were grounds for lifting an order of non-suit; thus, they prayed that the Orders dated November 11,
2003 and January 8, 2004 be reconsidered and Civil Case No. V- 072-07-2002 be reset for further
pre-trial conference. Respondent bank filed an Opposition to such Manifestation and Motion.
In an Order dated March 9, 2004, the RTC denied the Manifestation and Motion to reconsider the
order of non-suit and allowed respondent bank to present evidence on its counterclaim on March 25,
2004. The RTC found (1) that assuming there was an agreement between the counsels regarding a
compromise affecting the civil cases, such an out of court agreement was not an excuse for the
counsel of the Spouses Arcenas not to move for the lifting of the order of default; (2) that counsel
should not presume that his motion for postponement would be granted, specially since the scheduled
proceeding was a pre-trial conference which was mandatory; (3) that a motion should abide by the
three-day notice rule; and (4) that the January 8, 2004 Order submitting the case for decision had long
become final and the Manifestation and Motion was filed beyond the reglementary period for filing a
motion for reconsideration.

Spouses Arcenas, as petitioners, filed with the CA a Petition for annulment of order under Rule 47
seeking to annul the November 11, 2003 Order of non-suit issued by the RTC of Roxas City, Branch
15 in Civil Case No. V-072-07-2002 on the ground of extrinsic fraud.
The CA dismissed the petition on the ground that petitioners, the Spouses Arcenas, failed to avail of
the appropriate remedies without sufficient justification before resorting to the petition for annulment of
order. The CA ruled that assuming that petitioners were able to substantiate their allegations of fraud,
they could have filed a petition for relief under Rule 38 of the Rules of Court and prayed that the
assailed Order be set aside, but they did not. Thus, they cannot benefit from their inaction.
In a Resolution, the CA denied the Motion for Reconsideration filed by the Spouses Arcenas.
On July 19, 2004, Oscar Arcenas died. Thus, only petitioner Dolores filed the instant petition for
review.

ISSUES:

1. Whether or not the Honorable Court of Appeals erred in dismissing the petition for annulment of
order filed by therein petitioners, Spouses Oscar Arcenas and Dolores Arcenas, on the ground that
they failed to take other appropriate remedies in assailing the questioned final order, since their
inaction was not due to fault or negligence imputable to them.
2. Whether or not the Honorable Court of Appeals erred in failing to appreciate the clear existence of
extrinsic fraud committed by the adverse party through its counsel, Atty. Manuel Miraflores.
3. Whether or not petitioners are guilty of forum shopping considering the difference in the nature of
the remedies between the rule on appeal under Rule 41 and annulment of orders under Rule 47.

RULING:
1. The Court finds no merit in the petition.
Sections 1 and 2 of Rule 47 of the Rules of Court impose the conditions for the availment of the
remedy of annulment of judgment, viz.:
Section 1. Coverage.- This Rule shall govern the annulment by the Court of Appeals of judgments or
final orders and resolutions in civil actions of Regional Trial Courts for which the ordinary remedies of
new trial, appeal, petition for relief or other appropriate remedies are no longer available through no
fault of the petitioner.
Section 2. Grounds for annulment. The annulment may be based only on the grounds of extrinsic
fraud and lack of jurisdiction.
Extrinsic fraud shall not be a valid ground if it was availed of, or could have been availed of, in a
motion for new trial or petition for relief.
Section 1, Rule 47 provides that it does not allow a direct recourse to a petition for annulment of
judgment if other appropriate remedies are available, such as a petition for new trial, appeal or a
petition for relief. If petitioner fails to avail of these remedies without sufficient justification, she cannot
resort to the action for annulment of judgment under Rule 47, for otherwise, she would benefit from
her inaction or negligence.
 The Court found no reversible error committed by the CA in dismissing the petition for annulment of
judgment.
2. Petitioner argues that when respondent bank's counsel moved for the issuance of the Order of
non-suit against her and her husband during the November 11, 2003 hearing, extrinsic fraud was
committed on them since respondent bank's counsel concealed from the RTC that there was a
gentleman's agreement for the settlement of the subject civil cases.

There was nothing in the Manifestation and Motion which alluded the commission of extrinsic fraud to
respondent bank's counsel.
Moreover, since petitioner claimed that there was extrinsic fraud committed by respondent bank's
counsel, she could have filed a petition for relief under Rule 38 within the period provided for by
the Rules of Court, but she did not. Section 2, Rule 47 clearly states that extrinsic fraud shall not be a
valid ground for annulment of order if it was availed of, or could have been availed of, in a motion for
new trial or petition for relief. Thus, extrinsic fraud is effectively barred if it could have been raised as a
ground in an available remedial measure.
Petitioner tries to justify her failure to avail of the appropriate remedies on a promise of
settlement. However, such promise was not an excuse for petitioner's counsel not to lift the order of
non-suit and to file a petition for relief.
Petitioner's claim that she was present when respondent bank's counsel moved for the issuance of
the order of non-suit against her was not proven by any evidence.
There was indeed a failure to show, to our satisfaction, that petitioner could not have availed of the
ordinary and appropriate remedies under the Rules. Thus, she cannot resort to the remedy under Rule
47 of the Rules; otherwise, she would benefit from her inaction or negligence.
3. The Court finds no merit in respondent bank's claim that petitioner committed forum shopping. The
issue brought before us is whether the CA correctly dismissed petitioner's petition for annulment of the
Order declaring her non-suited for failure to appear at the pre-trial conference. On the other hand,
petitioner's Notice of Appeal in Civil Cases pertained to the decision of the RTC rendered on the
merits.
102. NATIONAL INVESTMENT AND DEVELOPMENT CORPORATION-PHILIPPINE NATIONAL
BANK (NIDC-PNB), petitioner,
-versus-
COURT OF APPEALS and SPS. FRANCISCO BAUTISTA and BASILISA FRANCISCO
BAUTISTA, respondents.

FACTS:
On September 12, 1979, private respondents, the spouses Francisco Bautista and Basilisa Bautista,
filed a complaint for reconveyance and damages against petitioner National Investment and
Development Corporation-Philippine National Bank (NIDC-PNB) and Banco Filipino. The complaint
was eventually filed with the Court of First Instance of Rizal and later assigned to Branch 94 of the
Regional Trial Court of Quezon City upon the reorganization of the judiciary in 1983. Private
respondents claimed that they were the owners of a parcel of land located in Pasong Tamo, Quezon
City, but that the land was mistakenly included in the list of properties mortgaged by them to Banco
Filipino, with the result that when the mortgage was foreclosed, the property was sold to Banco
Filipino together with the other properties. The land was later redeemed by petitioner from Banco
Filipino. Private respondents blamed Banco Filipino for the inclusion of their land in the list of
mortgaged properties.
The RTC gave judgment for private respondents. The dispositive portion of its decision, dated
November 18, 1991, reads:
WHEREFORE, premises considered, a judgment is hereby rendered:
1. Dismissing the complaint against Banco Filipino;
2. Ordering National Investment and Development Corporation to reconvey the 5,546 square meters
to plaintiffs after reimbursement by the latter;
3. Ordering plaintiffs to reimburse National Investment and Development Corporation the amount
of P431,470.66 plus legal interest of 6% from date of redemption, October 27, 1972 until fully paid;
and
4. Ordering National Investment and Development Corporation to pay the costs of suit.
On January 29, 1992, petitioner filed a notice of appeal, alleging that it received a copy of the decision
on January 16, 1992. This claim was disputed by private respondents who alleged that petitioner
actually received the decision on December 6, 1991 and, therefore, the decision of the RTC had
become final and executory. Consequently, private respondents moved for the execution of the
decision in their favor.
In a resolution, dated March 9, 1992, the RTC declared its decision to have become final and
executory on the ground that the first registry notice of the mail containing the decision had been
placed in the post office box of the PNB on December 6, 1991 and therefore the 15-day period of
appeal expired on December 21, 1991. As petitioner filed its notice of appeal on January 29, 1992, it
was filed late. Petitioners notice of appeal was therefore denied due course. The RTC cited the rules
and regulations of the Post Office which provide that mail matter is considered delivered from the time
it is placed in a box, or notice in the case of registered articles, because such box is an extension of
the addressees office or residence.
Petitioner filed a petition for certiorari, but its petition was dismissed by the Court of Appeals on the
ground that petitioners remedy was to file a motion for reconsideration in the RTC. Petitioners motion
for reconsideration was later denied. Hence this petition.
Petitioner claims that its failure to file a motion for reconsideration should not be deemed fatal because
the error complained against was patent and resulted in depriving it of due process, specifically its
right to appeal. Petitioner argues that it has spent millions of pesos to develop the subject property for
housing of its employees and that it stands to lose its investment if its right of appeal is lost.
The petition is meritorious.

ISSUES:
1. Whether the present petition was filed on time. Private respondents contend that petitioner had only
eight (8) days from its receipt on October 4, 1994 (October 12, 1994) of the resolution of the Court of
Appeals denying its motion for reconsideration within which to file this petition, since seven (7) days
had already elapsed when petitioner moved for reconsideration of the CA decision.
2. The main issue in this case is whether petitioners notice of appeal from the decision of the RTC
was timely filed. Petitioner argues that the 15-day appeal period should be counted from January 16,
1992, because this was the date the first registry notice of the mail containing the decision was
received by its administrative service officer III, DaniloMasajo, who claimed the registered letter
containing the decision that same day. Petitioner contends that the RTC erred in ruling that service on
it was completed five (5) days after the first registry notice was placed inside PNBs P.O. Box on
December 6, 1991.

RULING:
1. The contention is without merit. Rule 45, 1 expressly provides that a party may appeal from a
judgment of the Court of Appeals by filing with the Supreme Court a petition for certiorari, within fifteen
(15) days from notice of judgment of denial of his motion for reconsideration. In this case, petitioner
received the Court of Appeals resolution denying its motion for reconsideration on October 4,
1994. Hence, the filing of its present petition on October 19, 1994 was timely made.
2.Petitioners contention is well taken. The post office box in which the notice was deposited was the
post office box of the PNB. It seems that the only reason of the RTC for holding that the deposit of the
notice is intended for petitioners counsel, Atty. Giovanni S. Manzala, is the fact that Atty. Manzala is a
member of petitioners Legal Department. But Atty. Manzala never used the PNB P.O. box as his
own. On the contrary, he gave his address as 6th Floor, PNB Bldg., Escolta, Manila. The mere fact
that this is also the office address of petitioner does not justify the assumption that the PNB P.O. box is
also that of its counsel. Counsel may have given his address precisely to avoid mail intended for him
from being commingled with mail intended for other departments and personnel of the PNB.
Of course it can be argued that per post office rules and regulations, PNBs P.O. Box is an extension of
the PNB Building where petitioner holds office. Private respondents invoke 481 of the rules and
regulations of the post office, which provides that the use of a post office box shall be restricted to the
renter thereof, the members of the household and those connected with him in business. The
question, however, is not whether Atty. Manzala can use the P.O. Box of the PNB, but whether the
notice intended for him can be placed in the box of the PNB when he did not indicate that he wanted
to use the box but on the contrary gave a different address.
Indeed, the ruling today is simply an application of the more general rule that service of notice when a
party is represented by counsel should be made upon counsel at the latters exact given address. The
purpose of the rule is to maintain a uniform procedure calculated to place in competent hands the
orderly prosecution of a partys case. Here Atty. Manzala had every right to expect that notices
intended for him would be delivered directly to him and not be lumped together with all the other mail
of the PNB and thus avoid the possibility that important court notices and processes might escape his
notice. We have time and again admonished attorneys to adopt a system to insure the delivery to
them of court processes. We would be allowing a disregard of this admonition were we to sanction the
delivery of mail to attorneys at an address other than that given by them.

103. BF CORPORATION vs. EDSA SHANGRI-LA HOTEL and RESORT, INC., RUFO B. COLAYCO,
RUFINO T. SAMANIEGO, CYNTHIA DEL CASTILLO, KUOK KHOON CHEN, and KUOK KHOON
TSEN

FACTS:
On July 26, 1993, petitioner brought suit to collect from respondents the sum of P31,791,284.72, plus
damages. The amount represents the alleged liability of respondents to petitioner for the construction
of the EDSA Shangri-La Hotel on St. Francis Street, Mandaluyong City.
The trial court rendered judgment ordering respondents to pay petitioner P24,780,490.00 for unpaid
construction work accomplishments under petitioners Progress Billings Nos. 14 to 19; to return to
petitioner the retention sum of P5,810,000.00, with legal interest on both amounts; and to pay
petitioner the sums of P1,000,000.00 as moral damages, P1,000,000.00 as exemplary damages,
P1,000,000.00 as attorneys fees, and the costs.
Private respondents moved for a reconsideration of the decision. However, their motion was denied
whereupon they appealed. Pending disposition of the appeal, petitioner filed a motion for the
execution of the decision in its favor which the trial court granted in its order dated January 21, 1997.
Private respondents assailed the order of execution pending appeal in a petition for certiorari which
they filed in the Court of Appeals. In due time, petitioner filed a Comment with Opposition to
Preliminary Injunction.
On March 7, 1997, the Court of Appeals issued a writ of preliminary injunction enjoining the trial court
from carrying out its order of execution, upon the filing by respondents of a bond in the amount of P1
million. In a supplemental resolution issued on the same day, the appellate court issued a writ of
preliminary mandatory injunction ordering that:
A. Respondent Judge and his branch sheriff acting under him LIFT all garnishments and levy made
under the enjoined order of execution pending appeal.
B. Said Sheriff desist from delivering to private respondent [herein petitioner] all his garnishments on
petitioners bank deposits and, instead, immediately return the same to PNB, Shangri-la Plaza Branch.
C. If the garnished deposits have been delivered to private respondent [herein petitioner], the latter
should forthwith return them to petitioners [herein respondents] deposit accounts.
Petitioner moved for a reconsideration of the two resolutions. On June 30, 1997, the Court of Appeals
rendered a decision. Setting aside the trial courts order of execution pending appeal and denying
petitioners motion for reconsideration of its two resolutions dated March 7, 1997. The appellate
court held that the trial courts reason for ordering execution pending appeal, that (petitioners) viability
as a building contractor is being threatened by (respondents) continued refusal to pay their
obligations, did not justify such an order. The appellate court noted that -
Contrary to the ordinary run of things it is the prevailing party in the trial court who admits to be in
financial straits and cites his threatened insolvency, not that of [the] defendant, as a good reason for
execution pending appeal.
Normally, we would expect a losing defendants impending insolvency or dangerous tendency to
dispose or dissipate his properties to frustrate future execution, as the logical, good reason for plaintiff
to ask for advanced execution.
In addition, the appellate court found that the order of execution pending appeal was not in the form of
a special order as required by Rule 39, 2 of the Rules of Civil Procedure.
Petitioner moved for reconsideration, but this motion was denied by the Court of Appeals in its
resolution dated February 11, 1998. Hence, this petition for review on certiorari.

ISSUES:
Whether the Court of Appeals erred in setting aside the trial courts order granting execution pending
appeal.

RULING:
First. It did not.Execution pending appeal is not to be granted except for good reason to be stated in a
special order. For the general rule is that only judgments which have become final and executory may
be executed. In this case, the issuance of an order granting execution pending appeal is sought to be
justified on the plea that the [r]espondents dilatory appeal and refusal to pay petitioner the amount
justly due it had placed petitioner in actual and imminent danger of insolvency.The contention is
without merit.
Nor does the fact that petitioner filed a bond in the amount of P35 million justify the grant of execution
pending appeal. We have held in a number of cases that the posting of a bond to answer for damages
is not alone a sufficient reason for ordering execution pending appeal. Otherwise, execution pending
appeal could be obtained through the mere filing of such a bond.
Second. The foregoing reason justifies the issuance by the Court of Appeals of writs of preliminary
prohibitory and mandatory injunction against the trial court, the sheriff, and petitioner.
Petitioner assails the issuance of the writs, claiming that the same had been issued on the basis of
motions which had no verification and without affording it due process.
The motions referred to by petitioner merely sought the expeditious resolution of respondents
application for a writ of preliminary injunction as contained in their verified petition for certiorari. This
petition contained the necessary factual averments justifying the grant of injunction. Nor was petitioner
denied the right to be heard before the writs were issued. Petitioner filed a comment which
controverted the allegations of the petition, including its prayer for a writ of preliminary injunction.
There is, therefore, no basis for its claim that it was denied due process.
As garnishment is a specie of attachment, the procedure provided in Rule 57, 20 of the Rules of Court
for the recovery of damages against a bond in case of irregular attachment should be applied. This
means that notice should be given to petitioners surety and that there should be a hearing before it is
held liable on its bond.
Third. In its supplemental petition, petitioner contends that the propriety of the issuance of the writ of
execution pending appeal is an ancillary issue which should have been raised by respondents in their
appeal from the trial courts decision on the merits instead of in a separate petition for certiorari.
The contention is also without merit. Certiorari lies against an order granting execution pending appeal
where the same is not founded upon good reasons. Appeal is not a speedy and adequate remedy that
can relieve the losing party from the immediate effects of an improvident execution pending appeal.

104. CITY OF MANILA, represented by Mayor Gemiliano C. Lopez, Jr vs. COURT OF APPEALS
and THE ARMY & NAVY CLUB, INC.

FACTS:
Respondent Court of Appeals is faulted in this action for certiorari for having set aside the order of
execution dated June 10, 1991, and the writ of execution issued by Judge Wilfredo Reyes of the
Regional Trial Court of Manila in Civil Case No. 9156335.
This was a complaint for unlawful detainer filed by the City of Manila against private respondent Army
and Navy Club for violation of the lease agreement between them over a parcel of land on Roxas
Boulevard in the said city. A summary judgment in favor of the petitioner was rendered by the
Metropolitan Trial Court of Manila and seasonably elevated to the Regional Trial Court. To stay its
execution, ANC filed a supersedes bond in the amount of P2,700,000.00, which was approved by
Judge Reyes. He subsequently affirmed the appealed judgment on June 7, 1991.
On June 10, 1991, the petitioner filed an ex parte motion for execution on the ground that the
judgment had already become final and executory under RA 6031. Judge Reyes granted the motion
the same day and at 4:00 o'clock that afternoon the writ of execution was served on ANC.
ANC moved to quash the writ on June 11, 1991, but hours later, sensing that the motion could not be
acted upon, filed a petition for certiorari and prohibition with the Court of Appeals.
On July 3, 1991, that court issued the questioned decision, prompting the filing of the present petition
for certiorari.

ISSUES:
1. WHETHER or not the propriety of a special civil action for certiorari assail an order of execution
pending appeal

2. The last question to be resolved is, assuming that the decision of the regional trial court had already
become "final and executory," could the said court order its execution?

RULING:
1. The Court has held that
. . . Although Sec. 1, Rule 66 of the Rules of Court provides that the special civil action
of certiorari may only be invoked when "there is no appeal, nor any plain, speedy and adequate
remedy in the (ordinary) course of law" this rule is not without exception. The availability of the
ordinary course of appeal does not constitute sufficient ground to prevent a party from making use of
the extraordinary remedy of certiorari where the appeal is not an adequate remedy or equally
beneficial, speedy and sufficient. It is the inadequacy not the mere absence of all other legal
remedies and the danger of failure of justice without merit that usually determines the propriety
of certiorari.
While appeal is normally employed to question an order or writ which varies the terms of the decision
being executed, it is nevertheless not the sole and exclusive remedy. The special civil action
of certiorari and prohibition under Rule 65 was available to the private respondent on the allegation
that the regional trial court, in issuing the writ of execution, committed grave abuse of discretion and
acted beyond its jurisdiction and that the ordinary remedy of appeal was inadequate.
A judgment becomes "final and executory" by operation of law. Finality of judgment becomes a fact
upon the lapse of the reglementary period to appeal if no appeal is perfected. In such a situation, the
prevailing party is entitled to a writ of execution, and issuance thereof is a ministerial duty of the court.
Both RA 6031 and BP 129 provide that decisions of the regional trial court in its appellate capacity
may be elevated to the Court of Appeals in a petition for review. In effect, both laws recognize that
such judgments are "final" in the sense that they finally dispose of, adjudicate, or determine the rights
of the parties in the case. But such judgments are not yet "final and executory" pending the expiration
of the reglementary period for appeal. During that period, execution of the judgment cannot yet be
demanded by the winning party as a matter of right.

2. The rule is that if the judgment of the metropolitan trial court is appealed to the regional trial court
and the decision of the latter is itself elevated to the Court of Appeals, whose decision thereafter
became final, the case should be remanded through the regional trial court to the metropolitan trial
court for execution. The only exception is the execution pending appeal, which can be issued by the
regional trial court under Sec. 8 of Rule 70 or the Court of Appeals or the Supreme Court under Sec.
10 of the same Rule.
As previously observed, the petitioner has shown no weighty justification for the application of the
exception. Hence, the respondent court committed no error in reversing the Regional Trial Court of
Manila and annulling the writ of execution issued by it on June 10, 1991, pending appeal of its
decision.
In the present case, the private respondent had up to June 25, 1991, to appeal the decision of the
regional trial court. The motion for execution was filed by the petitioner on June 10, 1991, before the
expiration of the said reglementary period. As the decision had not yet become final and executory on
that date, the motion was premature and should therefore not have been granted. Contrary to the
petitioner's contention, what the trial court authorized was an execution pending appeal.
While it is true that execution pending appeal is allowed under Rule 39, Sec. 2, of the Rules of Court,
this provision must be strictly construed, being an exception to the general rule. The reason allowing
this kind of execution must be of such urgency as to outweigh the injury or damage of the losing party
should it secure a reversal of the judgment on appeal. Absent any such justification, the order of
execution must be struck down as flawed with grave abuse of discretion.

105. DOMINGO NEYPES ET. AL. vs.

COURT OF APPEALS

FACTS:
Petitioners filed an action for annulment of judgment and titles of land and/or reconveyance and/or reversion with
preliminary injunction before the Regional Trial Court, Branch 43, of Roxas, Oriental Mindoro, against the
respondents. Later in an order, the trial court dismissed petitioners complaint on the ground of prescription.
Petitioners allegedly received a copy of the order of dismissal on March3, 1998 and, on the 15 th day thereafter or
on March 18, 1998, filed a motion for reconsideration which petitioners received on July 22, 1998. Five days
later, on July 27, 1998, petitioners filed a notice of appeal and paid the appeal fees on august 3, 1998.
On August 4, 1998, the courtaqou denied the notice of appeal, holding that it was filed eight days late. This was
received by petitioners on July 31, 1998. Petitioners filed a motion for reconsideration but was also denied in an
order dated September3, 1998. Via a petition for cedrtiorari and mandamus under Rule 65, petitioners assailed
the dismissal of the notice of appeal before the CA. In the appellate court, petitioners claimed that they had
seasonably filed their notice of appeal. They argued that the 15 day reglementary period to appeal started to run
on July 22, 1998 since this was the day they received the final order of the trial court denying their motion for
reconsideration. When they filed their notice of appeal on July 27, 1998, only five days had elapsed and they
were well within the reglementary period for appeal. On September 16, 1999, The CA dismissed the petition. It
ruled that the 15 day period to appeal should have been reckoned from March 3, 1998 or the day they received
the February 12, 1998 order dismissing their complaint. According to the appellete court, the order was final
order appealable under the Rules.

ISSUES:
1. Whether or not receipt of a final order triggers the start of the 25 day reglementary period to appeal
the February 12, 1998order dismissing the complaint OR THE July 1, 1998 order dismissing the Motion for
Reconsideration.
 2. Whether or not petitioners filed their notice of appeal on time.
RULING:
1. The July 1, 1998 order dismissing the motion for reconsideration should be deemed as the final order.
In the case of Quelnan v. VHF Philippines, Inc., the trial court declared petitioner non-suited and accordingly
dismissed his complaint. Upon receipt of the order of dismissal, he filed an omnibus motion to set aside. When
the omnibus motion was filed, 12 days of the 15 day period to appeal the order had lapsed. He later on received
another order, this time dismissing his omnibus motion. He then filed his notice of appeal. But this was likewisw
dismissed- for having been filed out of time. The court a qou ruled that petitioner should have appealed within 15
days after the dismissal of his complaint since this was the final order that was appealable under the Rules.The
SC reversed the trial court and declared that it was denial of the motion for reconsideration of an order of
dismissal of a complaint which constituted the final order as it was ended the issues raised there. This
pronouncement was reiterated in the more recent case of Apuyan v. Haldeman et al. where the SC again
considered the order denying petitioners motion for reconsideration as the final order which finally disposed of
the issues involved in the case. Based on the aforementioned cases the SC sustained petitioners view that the
order dated July 1, 1998 denying their motion for reconsideration was the final order contemplated in the Rules.

2. Yes. To standardize the appeal periods provided in the Rules and to afford litigants fair opportunity to
appeal their case, the Court deems it practical to allow a fresh period of 15 days within which to file the notice of
appeal in the RTC, counted from receipt of the order dismissing a motion for reconsideration or a new trial.
Henceforth, this fresh period rule shall also apply to Rule 40, Rule 42, Rule 43 and Rule 45 but does not apply
to Rule 64 (Review of Judgements and final Orders or Resolutions of the COMELEC and the Commission on
Audit) because Rule 64 is derived from the Constitution. It is likewise doubtful whether it will apply to criminal
cases. The new rule aims to regiment or make the appeal period uniform, to be counted from receipt of the order
denying the motion for reconsideration (whether full or partial), motion for new trial or any final order or
resolution.

106. ONATE V. ABROGAR (G.R. NO. 107303)

Facts:
Sun Life filed a complaint for a sum of money with a prayer for the immediate issuance of a writ of
attachment against petitioners Onate and Dino. Respondent Judge granted the prayer and the writ
was correspondingly issued. After the summons were eventually served upon petitioners, the latter
filed motions to discharge/dissolve the attachment. Meanwhile, Sun Life filed motions for examination
of petitioners bank accounts. Respondent judge ruled in all the motions in favor of Sun Life.
Petitioners moved for reconsideration but were denied.

Issue:
Whether or not respondent judge erred in allowing the examination of the bank accounts of herein
petitioners.

Ruling:
We find both petitions unmeritorious.
It is clear from the foregoing provision that notice need only be given to the garnishee, but the person
who is holding property or credits belonging to the defendant. The provision does not require that
notice be furnished the defendant himself, except when there is a need to examine said defendant for
the purpose of giving information respecting his property.
Furthermore, Section 10 Rule 57 is not incompatible with Republic Act No. 1405, as amended, An Act
Prohibiting Disclosure or Inquiry Into, Deposits With Any Banking Institution and Providing Penalty
Therefore, for Section 2 therefore provides an exception in cases where the money deposited or
invested is the subject matter of the litigation.
The examination of the bank records is not a fishing expedition, but rather a method by which Sun Life
could trace the proceeds of the check it paid to petitioners.
107. CARLOS V SANDOVAL

FACTS:
Spouses Felix Carlos and Felipa Elemia died intestate. They left six parcels of land to their compulsory
heirs, Teofilo Carlos and petitioner Juan De Dios Carlos. Teofilo died intestate. He was survived by
respondents Felicidad and their son. Upon Teofilos death, Parcel Nos. 5 & 6 (registered in the name of
Teofilo) were registered in the name of respondent Felicidad.In August 1995, petitioner commenced an
action against respondents for the declaration of nullity of marriage. Petitioner asserted that the marriage
between his late brother Teofilo and respondent Felicidad was a nullity in view of the absence of the
required marriage license. On the grounds of lack of cause of action and lack of jurisdiction over the subject
matter, respondents prayed for the dismissal of the case before the trial court. But before the parties could
even proceed to pre-trial, respondents moved for summary judgment. Petitioner opposed the motion for
summary judgment and lodged his own motion for summary judgment. RTC rendered judgment:
defendants (respondents) Motion for Summary Judgment is hereby denied. Plaintiffs (petitioners) Counter-
Motion for Summary Judgment is hereby granted and summary judgment is hereby rendered in favor of
plaintiff as follows: Declaring the marriage between defendant Felicidad Sandoval and Teofilo Carlos null
and void ab initio for lack of the requisite marriage license.In the appeal, respondents argued that the trial
court acted without or in excess of jurisdiction in rendering summary judgment annulling the marriage of
Teofilo, Sr. and Felicidad.

ISSUES:
1. Whether a marriage may be declared void ab initio through a judgment on the pleadings or a
summary judgment and without the benefit of a trial.
2. Whether one who is not a spouse may bring an action for nullity of marriage.

HELD:
1. The grounds for declaration of absolute nullity of marriage must be proved. Neither
judgment on the pleadings nor summary judgment is allowed. So is confession of
judgment disallowed.
SEC. 17. Trial. (1) The presiding judge shall personally conduct the trial of the case. No delegation of
evidence to a commissioner shall be allowed except as to matters involving property relations of the
spouses. (2) The grounds for declaration of absolute nullity or annulment of marriage must be proved. No
judgment on the pleadings, summary judgment, or confession of judgment shall be allowed.
 2. A petition for declaration of absolute nullity of void marriage may be filed solely by
the husband or wife. Exceptions: (1) Nullity of marriage cases commenced before the
effectivity of A.M. No. 02-11-10-SC; and (2) Marriages celebrated during the effectivity
of the Civil Code.
Under the Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable
Marriages, the petition for declaration of absolute nullity of marriage may not be filed by any party outside
of the marriage. The Rule made it exclusively a right of the spouses [Sec. 2(a)]. The advent of the Rule on
Declaration of Absolute Nullity of Void Marriages marks the beginning of the end of the right of the heirs of
the deceased spouse to bring a nullity of marriage case against the surviving spouse.
Petitioner commenced the nullity of marriage case against respondent Felicidad in 1995. The marriage in
controversy was celebrated on May 14, 1962. Which law would govern depends upon when the
marriage took place. The marriage having been solemnized prior to the effectivity of the Family Code, the
applicable law is the Civil Code which was the law in effect at the time of its celebration. But the Civil
Code is silent as to who may bring an action to declare the marriage void. Does this mean that any person
can bring an action for the declaration of nullity of marriage? NO. The absence of a provision in the Civil
Code cannot be construed as a license for any person to institute a nullity of marriage case. Such person
must appear to be the party who stands to be benefited or injured by the judgment in the suit, or the party
entitled to the avails of the suit. Plaintiff must be the real party-in-interest

108. Bacolod Water vs. Labayen

FACTS:
Respondent City opposed the Schedule of Automatic Water Rates Adjustments for the year
1999 to 2001 published by the petitioner. It alleged that the proposed water rates would violate due
process as they were to be imposed without the public hearing. Hence, it prayed that before the
hearing of the main case, a temporary restraining order or a preliminary injunction be issued. On
February 2000, the same date requested, respondent court heard respondents application for
temporary restraining order and issued and Order commanding petitioner to stop, desist and refrain
from implementing the proposed water rates. On December of the same year, respondent court issued
the assailed Decision granting the final injunction which allegedly confirmed the previous preliminary
injunction. Petitioner filed its Motion for Reconsideration of the assailed Decision on January 11, 2001
asserting, among others, that the case was not yet ripe for decision when the court granted the final
injunction, the petitioner having had no opportunity to file its answer, avail of the mandatory pre-trial
conference and have the case tried on the merits.

ISSUE:
Whether or not preliminary injuction had been issued

RULING:
No, The sequence of events and the proceedings that transpired in the trial court make a clear
conclusion that hte Order issued was a temporary restraining order and not a preliminary injunction.
Given the previous undeviating references to it as a temporary restraining order, respondents cannot
now consider it as a preliminary injunction to justify the validity of the assailed Decision. The attendant
facts and circumstances clearly show that the respondent trial court issued a temporary restraining
order. Injunction is a judicial writ, process or proceeding whereby a party is ordered to do or refrain
from doing a certain act. It may be the main action or merely a provisional remedy for and as an
incident in the main action.
109. CHINABANKING vs. CO

FACTS:
Petitioner China Banking Corporation sold a lot located at St. Benedict Subdivision, Sindalan
San Fernando Pampanga to the Petitioner-Spouses Joey and Mary Jeannie Castro. It is sold two
other lots also located in the same place to Petitioner-Spouses Richard and Editha Nogoy. The lots of
the Castro and the Nogoy are commonly bound on their south eastern side by Lot No.3783-R in the
name of respondent Benjamin Co and his siblings.
Mr. Co and his siblings entered into a joint venture with respondent Three King Construction and
Realty Corporation for the development of the Northwoods Estates, a subdivision project covering Lot
No. 3783-E and adjacent lots. For this purpose, they contracted the services of respondent, Engr. Dale
Olea.
In 2003, the respondents started constructing a perimeter wall on the 3783-E lot. On November of the
same year, petitioners through counsel, wrote respondents asking them to stop construction of the
wall, and remove all installed construction material s and restore the former condition of the lot
mentioned which the petitioners claim to be a road lot.1 they also claimed that the construction
obstructed and closed the only means of ingress and egress of Nogoy spouses and caved in and
impeded the ventilation and clearance due to the Castro spouses residential house.
The Petitioners demand remainde unheeded prompting them to file before the RTC of San Fernando
a complain for injunction, restoration of road lot or right of way and damages with prayer for temporary
restraining order and/or writ of preliminary injunction.

ISSUE:
Whether or not the applicatiob for injunction must be granted.

RULING:
No, it is settled that the grant of a preliminary mandatory injunction rests on the sound
discretion of the court, and the exercise of sound judicial discretion by the lower court should not be
interfered with except in cases of manifest abuse. It is likewise settled that a court should avoid issuing
a writ of preliminary mandatory injunction which would effectively dispose of the main case without
trial.
Since a preliminary mandatory injunction commands the performance of an act, it does not
preserve the status quo and is thus more cautiously regarded than a mere prohibitive injunction.
Accordingly, the issuance of a writ of preliminary mandatory injunction is justified only in a clear case,
free from doubt or dispute. When the complainants right is doubtful, he does not have a clear or legal
right, therefore, the issuance of the injunction relief is improper.
110. BROCKA vs ENRILE

FACTS:

Jeepney strike called by the Alliance of Concerned Transport Organization (ACTO) a

demonstration held in sympathy of this strike, forcibly and violently dispersed a petitioners arrested by
Northern Police District Officers. Petitioners was charged with Illegal Assembly, All petitioners released
on bail, 3,000 each except for Lino Brocka, Ben Cervantes, Cosme Garcia and Rodolfo Santos, who
were charged as leaders of the offense of Illegal Assembly for whom no bail was recommended.
Urgent petition for bail filed before the RTC of Quezon City, Hon. Miriam Defensor Santiago ordered
Brocka, et al provisional release; recommended bail at P 6,000 each a Brocka et al filed respective
bail bonds.

Despite service of release order, Brocka et al, remained in detension a respondent-police

officers invoked Preventive Detention Action allegedly issued against Brocka. Neither original nor
certified true copy of this PDA was shown to Brocka et al.

February 11, 1985, Brocka et al charged with Inciting to Sedition in 3 criminal cases; hastly and
spurious filing of this second offense.

ISSUE:

Whether or not criminal prosecution of a case may be enjoined

RULING:

Yes, the General Rule is that Criminal Prosecution may not be restrained or slayed by
injunction, preliminary of final. One exception is that Preliminary injunction has been issued by the
Supreme Court to prevent the threatened unlawful arrest of petitioners.

In the case at bar, criminal proceedings had become a case of persecution, have been
undertaken by state officials in bad faith. The court agreed with the contention of the Solicitor General,
However, it noted that such course of action would have been a futile move, considering the
considering the circumstances then prevailing.

Clear signals that the prosecutors intended to keep Brocka, et al in detention until the second
offense could be facilitated and justified without the need of issuing a warrant of arrest anew.

Infinitely more important than conventional adherence to general rules of criminal procedure is respect
for the citizens right to be free not only from arbitrary arrest and punishment but also from under
warranted and vexatious prosecution.

If there is manifest bad faith that accompanies the filing of criminal charges (as in this case the
petitioners were barred from enjoying provisional release until such time that charges were filed) and
where a sham preliminary investigation was hastily conducted then charges that are filed as a result
should lawfully be enjoined.

The petition was granted, the trial court is permanently enjoined from proceeding in any
manner with the cases subject of the petition.

111. TRADERS ROYAL BANK vs. INTERMEDIATE APPELATE COURT, ET.AL.,

G.R. NO. 111357 June 17, 1997

FACTS:

This case have already been resolved by this Court in G.R. No. 63855, [1] wherein we ruled the
deceased spouses Jose and SalvacionTayengco to be the lawful owners of the properties under
receivership, and G.R. No. 60076,[2] where we affirmed the validity of the appointment of petitioner
Traders Royal Bank (TRB) as receiver pendente lite.

In view of these rulings, the receivership proceeding was duly terminated. Thus, TRB rendered its
final accounting of the funds under receivership wherein it retained the amount of P219,016.24 as its
receiver's fee, instead of turning over the entire fund to the Tayengcos. The Regional Trial Court of
Iloilo, Branch 5, in an order dated July 5, 1988, approved the final accounting submitted by TRB,
including the deduction of its fee from the fund under receivership.

The Tayengcos assailed said order before the Court of Appeals, [3] contending that TRB's
compensation should have been charged against the losing party and not from the funds under
receivership.

In resolving this issue the Court of Appeals, [4] in its decision dated February 12, 1993, ruled that
TRB cannot deduct its fee from the funds under its receivership since this must be shouldered by the
losing party or equally apportioned among the parties-litigants. Consequently, TRB was ordered to
return the P219,016.24 to the Tayengcos, and the losing parties, Cu Bie, et al., were held solely liable
for TRB's compensation.[5] TRB filed a motion for reconsideration, but this was denied by the appellate
court in its resolution dated August 17, 1993

ISSUE:

Is the Court of Appeals decision dated February 12, 1993 barred by res judicata by virtue of our ruling
in G.R. No. 60076 recognizing the propriety of TRB's appointment as receiver?

HELD:

With respect to the assigned error, the court was not persuaded.

The elements of res judicata are: (1) The previous judgment has become final; (2) the prior
judgment was rendered by a court having jurisdiction over the matter and parties; (3) the first judgment
was made on the merits; and (4) there was substantial identity of parties, subject matter, and cause of
action, as between the prior andsubsequent actions.

The difference between the two causes of action is unmistakable. In G.R. No. 60076, the petition
was for the annulment of the trial court's order requiring Tayengco to render and submit an accounting
of the rental of the buildings and apartments, while C.A. G. R. CV No. 21423 was an appeal
questioning the order of the trial court authorizing the deduction by TRB of its compensation from the
receivership funds. There is clearly no identity of causes of action here. Clearly, the last element
of res judicata is absent in the case at bar.

Procedural obstacles aside, we now answer the principal query posed in the instant petition.

Nobody questions the right of TRB to receive compensation. Section 8, Rule 59 of the Rules of
Court, however, explicitly provides for the manner in which it shall be paid for its services, to wit:

"SEC. 8. Termination of receivership; compensation of receiver.- Whenever the court, of its own
motion or on that of either party, shall determine that the necessity for a receiver no longer exists, it
shall, after due notice to all interested parties and hearing, settle the accounts of the receiver, direct
the delivery of the funds and other property in his hands to the persons adjudged entitled to receive
them, and order the discharge of the receiver from further duty as such. The
court shall allow the receiver such reasonable compensation as the circumstances of the case
warrant, to be taxed as costs against the defeated party, orapportioned, as justice requires."
(Underscoring supplied)

It is, therefore, clear that when the services of a receiver who has been properly appointed
terminates, his compensation is to be charged against the defeated party, or the prevailing litigant may
be made to share the expense, as justice requires. Consequently, the trial court's order approving
TRB's compensation to be charged solely against the funds under its receivership is without legal
justification; hence, it was correctly reversed by the Court of Appeals.

IN VIEW OF THE FOREGOING, the decision appealed from is AFFIRMED. Costs against
petitioner.

SO ORDERED.
112. THOMAS YANG vs.
THE HON. MARCELINO R. VALDEZ, ET.AL.,
G.R. NO. 73317
August 31, 1989

NATURE OF CASE:

This case is Petition for Certiorari seeks to annul and set aside the orders dated 7 January 1985, 18
January 1985 and 28 February 1985, of Judge Marcelino R. Valdez of the Regional Trial Court of
General Santos City, Branch 22. The assailed orders, respectively, had approved a replevin bond
posted by respondents, denied the counter-replevin bond filed by Manuel Yaphockun, and rejected
petitioner Thomas Yang's counter replevin bond.

FACTS:

On 4 January 1985, respondent spouses Ricardo and Milagros Morante brought an action in the
Regional Trial Court of General Santos City against petitioner Thomas Yang and Manuel Yaphockun,
to recover possession of two (2) Isuzu-cargo trucks. Petitioner Yang had the vehicles taken from
where they were parked in front of the Coca-Cola Plant in General Santos City, to the warehouse of
Manuel Yaphockun and there they were thereafter held. Despite repeated demands, the complaint
alleged, petitioner Yang refused to release the trucks to respondent spouses.
To obtain immediate possession of the Isuzu trucks, respondent spouses applied for a writ of replevin
and put up a replevin bond of P560,000.00 executed by respondent Milagros Morante and Atty.
BayaniCalonzo (counsel for respondent spouses).lwph1.t

On 7 January 1985, the respondent judge issued an order of seizure directing the Provincial Sheriff of
South Cotabato to take immediate possession and custody of the vehicles involved. The Sheriff
carried out the order.

On 10 January 1985, defendant Manuel Yaphockun filed a motion seeking repossession of the cargo
trucks, and posted a replevin counter-bond of P560,000.00 executed by himself and one
NarcisoMirabueno. The respondent judge promptly required the respondent spouses to comment on
the counter-bond proffered.

The respondent spouses reacted by amending their complaint on 13 January 1985 by excluding
Manuel Yaphockun as party-defendant. The following day, i.e., 14 January 1985, the respondents
submitted an opposition to Yaphockun's counter-bond, contending that since Manuel Yaphockun was
merely a nominal defendant, he had no standing to demand the return of the cargo trucks. By an order
dated 18 January 1985, the respondent judge disapproved the counter-bond filed by Manuel
Yaphockun, since the latter had been dropped as party-defendant and accordingly no longer had any
personality to litigate in the replevin suit.

Petitioner challenge the order of respondent judge dated 28 February 1985 rejecting his counter-
replevin bond for having been filed out of time. Petitioner received summons on the amended
complaint on 25 January 1985 and on the same day, filed his counterbond. It is his contention that his
redelivery bond was not filed out of time, since he was served with summons only on 25 January
1985.

ISSUE:

Whether or not the conclusion of respondent judge that petitioners right to file a counter had already
prescribed.

HELD:

The Supreme Court affirmed the the conclusion of the respondent hudge.

A defendant in a replevin suit may demand return of possession of the property replevied by filing a
redelivery bond within the periods specified in Sections 5 and 6 of Rule 60.
Under Section 5, petitioner may "at any time before the delivery of the property to the plaintiff" require
the return of the property; in Section 6, he may do so, "within five (5) days after the taking of the
property by the officer." Both these periods are mandatory in character. Thus, a lower court which
approves a counter-bond filed beyond the statutory periods, acts in excess of its jurisdiction. In the
instant case, the cargo trucks were taken into custody by the Sheriff on 7 January 1985. Petitioner
Yang's counter-replevin bond was filed on 25 January 1985. The matter was treated at length in the
trial court's order of 28 February 1985:

... It is also borne by the record that defendant, thru counsel, was served with copy 6f
the amended complaint dropping defendant Manuel Yap from the complaint on January
14, 1985 and hence, said receipt of the amended complaint was tantamount to a
summons issued to the defendant Thomas Yang. It is a truism that the primary purpose
of summons is to acquire jurisdiction over the person of the parties, and jurisdiction can
be acquired by the voluntary submission of the defendant to the jurisdiction of the
Court. Hence, after defendant had been duly represented by counsel even at the
inception of the service of summons and a copy of the order of replevin on January 7,
1985, defendant Thomas Yang had already been duly served, especially so, when
counsel manifested in their comment to the opposition filed by plaintiffs that Manuel
Yap has been duly authorized to represent Thomas Yang. From then on defendant
should have been on guard as to the provision of Section 6, Rule 60 of the Rules of
Court re the five (5) days period within which to file the counter-replevin for the
approval of the court, counted from the actual taking of the property by the officer or the
sheriff on January 7, 1985.
113. CITIBANK, N.A., vs.
COURT OF APPEALS, ET.AL.
G.R. NO. 61508
March 17, 1999

NATURE OF CASE:

This case is a special civil action for certiorari with prayer for a temporary restraining order faulting the
Court of Appeals with grave abuse of discretion for nullifying the lower court's order of seizure of
mortgaged properties subject of a case for sum of money and replevin..

FACTS:

In consideration for a loan with Citibank, N.A. (formerly First National City Bank), private
respondent Douglas Anama executed a promissory note to pay the plaintiff bank the sum
of P418,000.00 in sixty (60) equal successive monthly installments.

To secure payment of the loan, Anama also constituted a Chattel Mortgage in favor of petitioner, on
various machineries and equipment. However, for failure and refusal of the private respondent to pay
the monthly installments despite repeated demands, petitioner filed a verified complaint against
Anama in the Manila CFI for the collection of his unpaid balance, for the delivery and possession of
the chattels covered preparatory to the foreclosure.

Anama submitted his Answer with Counterclaim, denying the material averments of the complaint, and
averring, inter alia that the remedy of replevin was improper and the writ of seizure should be vacated.

The trial court, upon proof of default of the private respondent in the payment of the said loan, issued
an Order of Replevin. Despite the issuance of the said order however, actual delivery of possession
did not take place because of negotiations for an amicable settlement. A pre-trial conference was held
and the petitioner then took over private respondents business as receiver. But when settlement
failed, the lower court tried the case on the merits.

Private respondent filed with the CA a Petition for Certiorari and Prohibition with Injunction. Finding
that the trial court acted with grave abuse of discretion amounting to excess or lack of jurisdiction in
issuing the assailed resolutions, the CA granted the petition, holding that the provisions of the Rules of
Court on Replevin and Receivership have not been complied with, in that (1) there was no Affidavit of
Merit accompanying the Complaint for Replevin; (2) the bond posted by Citibank was insufficient; and
(3) there was non-compliance with the requirement of a receivers bond and oath of office. Hence the
present petition for certiorari with TRO by Citibank.

ISSUE:

Whether or not the Court of Appeals erred in finding that the issuance of writ of replevin was
improper.

HELD:
No, the CA is not wrong.
In resolving the issue posed by the petition, the Court of Appeals limited its disposition to a
determination of whether or not the assailed order of seizure was issued in accordance with law, that
is, whether the provisions of the Rules of Court on delivery of personal property or replevin as a
provisional remedy were followed. The Court of Appeals relied on Ruled 60 of the Rules of Court,
which prescribed the procedure for the recovery of possession of personal property, which Rule,
provides:

Sec. 2.Affidavit and Bond. Upon applying or such order the plaintiff must show by his own
affidavit or that of some other person who personally knows the facts:

(a) That the plaintiff is the owner of the property claimed particularly describing
it, or is entitled to the possession thereof;

(b) That the property is wrongfully detained by the defendant, alleging the cause
of detention thereof according to his best of knowledge, information and belief;

(c) That it has nor been taken for a tax assessment or fine pursuant to law, or
seized under an execution, or an attachment against the property of the plaintiff,
or is so seized, that is exempt from such seizure; and

(d) The actual value of the property.

It is for erroneously issuing the alias writ of seizure without inquiring into the sufficiency of the replevin
bond and for allowing petitioner to assume receivership without the requisite oath, the Court of
Appeals aptly held that the trial court acted with grave abuse of discretion in dealing with the
situation. Under the Revised Rules of Court, the property seized under a writ of replevin is not to be
delivered immediately to the plaintiff. This is because a possessor has every right to be respected in
its possession and may not be deprived of it without due process.
114. MANUEL J.C. REYES, vs. HON. LEONOR INES,ET.AL, G.R. NO. L-48219
February 28, 1979

NATURE OF CASE:

This is a petition for certiorari to review the decision of the Court of Appeals, dismissing the petition to
annul the order of the respondent Judge directing the petitioner to give support pendente lite to his
wife, Celia Ilustre-Reyes, private respondent.

FACTS:
The private petitioner, Celia Ilustre-Reyes, filed in the Juvenile and Domestic Relations Court of
Quezon City a complaint dated June 3, 1976 against her husband, Manuel J. C. Reyes, for legal
separation on the ground that the defendant had attempted to kill plaintiff
The plaintiff asked for support pendente lite for her and her three children. The defendant, petitioner
herein, opposed the application for support pendente lite on the ground that his wife had committed
adultery with her physician.

The application for support pendente lite was set for hearing and submitted for resolution on the basis
of the pleadings and the documents attached thereto by the parties.

The respondent Judge issued an order dated March 15, 1977 granting plaintiff's prayer for
alimony pendente lite in the amount of P5,000.00 a month commencing from June 1976. 3

The petitioner filed a motion for reconsideration reiterating that his wife is not entitled to support during
the pendency of the case, and, alleging that even if she entitled, the amount awarded was excessive.
The respondent Judge reduced the amount from P5,000.00 to P4,000.00 a month in an order dated
June 17, 1977

ISSUE:

Whether the court erred in affirming the order the lower court of support pendente lite to the herein
respondent Celia Ilustre-Reyes.

RULING:

No, the court is right in affirming the said order.

There is ample evidence that the business of the petitioner, Manuel J. C. Reyes, can very easily bear
the burden of support.

The petition for support pendente lite is directed mainly on the private respondent's share in the
conjugal partnership.

Full support may be taken from the private respondent's share of the conjugal properties.

The private respondent, Celia Ilustre-Reyes, has incurred obligations during the three (3) years period
that she was not given any actual support and she also has to pay attorney's fees.

RULE 61 of the Rules of Court, Support Pendente Lite

Section 1.Application. At the commencement of the proper action or proceeding, or at any time
prior to the judgment or final order, a verified application for support pendente lite may be filed by any
party stating the grounds for the claim and the financial conditions of both parties, and accompanied
by affidavits, depositions or other authentic documents in support thereof. (1a)

Considering the plight of the wife during the pendency of the case for legal separation and that the
husband appears to be financially capable of giving the support.

115. LEONARDO OCAMPO, vs. LEONORA TIRONA,

G.R. NO. 147812
April 6, 2005

NATURE OF CASE:

This case is a petition for review to annul the decision of the Court of Appeals regarding the case of
Unlawful Detainer.

FACTS:

Respondent Tirona was a lessee of a land purchased by the petitioner. However, when the area was
declared a priority development, respondent informed petitioner that she will suspend paying the
rentals. The petitioner purchased the said land from the original owner. This prompted the petitioner to
file an action for unlawful detainer and damages against the respondent.

The MTC held that Tirona had no reason to suspend the payment of rents as this made her
occupation of the property illegal. Thus, the petitioner has the right to recover possession. The RTC
concurred with this decision.

ISSUE:

Whether or not an action for interpleader is proper in this case

RULING:

Yes. Tirona should have filed an interpleader and need not wait for the actual filing of a suit by
petitioner against her. The action is proper when a lessee does not know who to pay to the rentals due
to conflicting claims in the subject property.

This remedy is afforded not to protect anyone against double liabilities but to protect him against
double vexation with respect to one's liability.

When a court orders that claimants litigate among themselves there arises a new action. The pleading
which initiates the action is referred to as the complaint of interpleader and not a cross-complaint.