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Civil Procedure

Second Semester

READING ASSIGNMENTS

1. Motion for Bill of Particulars (Rule 12)

Virata vs. Sandiganbayan, 221 SCRA 52 (1993)


PONENTE: DAVIDE
FACTS: This petition is in relation to the previous cases regarding Virata and Mapa as decided by this
court. The Petitioner is among the 44 co-defendants against Benjamin (Kokoy) Romualdez. The
complaint has been amended thrice. This is a case regarding embezzlement and acts of corruption.

SANDIGANBAYAN LEVEL:
Petitioner moved to dismiss the case on the ground that the Second Amended complaint failed to state a
cause of action. The motion to dismiss was denied as well as his motion for reconsideration for said
denial.

SUPREME COURT LEVEL:


The petitioner then moved for a petition for certiorari under Rule 65 based on grave abuse of discretion in
the denial of the motion. However, the court upheld the ruling of the Sandiganbayan and deemed that the
Second Amended Complaint was sufficient to assail the allegations regarding ill-gotten wealth.
HOWEVER, as shown above, the maze of unnecessary literary embellishments may indeed raise some
doubts on the sufficiency of the statement of material operative facts to flesh out the causes of action. The
case was ordered back to the Sandiganbayan.

SANDIGANBAYAN LEVEL:
Petitioner moved for motion for Bill of Particulars as they have failed to find an adequate pleading in
view of the sweeping allegations. Petitioner argues that the nature of the complaint is vague and
ambiguous as it does not state with particularity the direct participation of the petitioner in the alleged
illegal acts. The Sandiganbayan partially granted said motion and ordered the plaintiff of the original case
to furnish a Bill of Particulars.However, said Bill of Particulars is only in relation to the 4 th actionable
wrong and not as to the 1st to the 3rd charges as they were considered clear.

The charges are as follows (only references)


(i) Gave MERALCO undue advantage . . . (ii) with the active collaboration of Defendant Cesar E. A.
Virata be (sic) reducing the electric franchise tax from 5% to 2% of gross receipts and the tariff duty on
fuel oil imports by public utilities from 20% to 10%, resulting in substantial savings for MERALCO but
without any significant benefit to the consumers of electric power and loss of million (sic) of pesos in
much needed revenues to the government;
(ii) 'Secured, in a veiled attempt to justify MERALCO's anomalous acquisition of the electric
cooperatives, with the active collaboration of Defendants Cesar E. A. Virata, . . . and the rest of the
Defendants, the approval by Defendant Ferdinand E. Marcos and his cabinet of the so-called 'Three-Year
Program for the Extension of MERALCO's Services of Areas within the 60 kilometer Radius of Manila,'
which required government capital investment amounting to millions of pesos;

(iii) 'Manipulated with the support, assistance and collaboration Philguarantee officials led by
Chairman Cesar E. A. Virata and the senior managers of EMMC,/PNI Holdings, Inc. led by Jose S.
Sandejas, J. Jose M. Mantecon and Kurt S. Bachmann, Jr., among others, the formation of Erectors
Holdings, Inc., without infusing additional capital solely for the purpose of making it assume the
obligation of Erectors, Inc. with Philguarantee in the amount of P527,387.440.71 with insufficient
securities/collaterals just to enable Erectors, Inc. to appear viable and to borrow more capitals (sic), so
much so that its obligation with Philguarantee has reached a total of more than P Billion as of June 30,
1987.

(iv) 'The following Defendants acted as dummies, nominees and/or agents by allowing themselves (i)
to be used as instruments in accumulating ill-gotten wealth through government concessions, orders
and/or policies prejudicial to Plaintiff, or (ii) to be incorporators, directors or members of corporations
beneficially held and/or controlled by Defendants Ferdinand E. Marcos, Imelda R. Marcos, Benjamin
(Kokoy) Romualdez and Juliette Gomez Romualdez in order to conceal and prevent recovery of assets
illegally obtained.

Petitioner not satisfied. Moved for petition for certiorari under rule 65 on failure on the part of the
Sandiganbayan to totally grant the Motion for Bill of Particulars.

ISSUE: W/N the Sandiganbayan erred in partially granting the Motion for Bill of Particulars

HELD: Petition is granted. Sandiganbayan erred in partially granting the motion on the ground that the
phrase to enable him properly to prepare his responsive pleading in Section 1 of Rule 1means that the
defendant be given an opportunity to prepare an intelligent answer and not merely a proper responsive
pleading. In order to be able to create an intelligent pleading, there must be particularity and definiteness
as to the scope and extent of the complaint. This was not present in this case even in the 1 st to 3rd
allegations. As to the claim that it is of evidentiary nature, it only affirms that the parties have not yet
adduced evidence as to the matter and therefore Sandiganbayan was in no position to conclude such.

DOCTRINE: A general function or purpose of a bill of particulars is to prevent injustice or do justice in


the case when that cannot be accomplished without the aid of such a bill. It is not the office of a bill of
particulars to supply material allegations necessary to the validity of a pleading, or to change a cause of
action or defense stated in the pleading, or to state a cause of action or defense other than the one stated.

Tan vs. Sandiganbayan, 180 SCRA 34 (1989)

PONENTE: SARMIENTO
FACTS: The petitioners, 22 in total (LUCIO TAN), assail the action of Sandiganbayan in denying their
Motion for Bill of Particulars directed against the Complaint filed by the Presidential Commission on
Good Government (PCGG).

SANDIGANBAYAN LEVEL
The complaint is with regard to the claim to reconvey all funds and other properties acquired through
abuse in power through unjust enrichment with a prayer of 50 Billion and 1 Billion moral and exemplary
damages, respectively together with the actual damages in such amount that are proven in trial. The
charges are as follows:
1. ABUSE OF RIGHT AND POWER
-Through illegal means, the petitioners acquired properties and titles to such and acted as dummies,
associates and agents in procuring public funds
2. UNJUST ENRICHMENT
-The petitioners have unjustly enriched themselves.
3. BREACH OF PUBLIC TRUST
-Through such acts the petitioners repeatedly breached public trust and the law
4. ACCOUNTING
5. LIABILITY FOR DAMAGES
Petitioners moved for a Motion for Bill of Particulars. However, such was dismissed by the
Sandiganbayan as it contends that the complaint is sufficient as seen in its expanded version.

SUPREME COURT LEVEL:


Petitioners filed a petition for certiorari under rule 65 alleging that the Sandiganbayan erred in denying its
motion.

Petitioners contend that the averments are general conclusions of fact and law. Therefore a motion for Bill
of Particulars is proper.

Sandiganbayan argues that correlating the specific averments in Paragraphs 14 to 15, inclusive, to the five
(5) Causes of Action described in Paragraphs 16 to 20, inclusive, they are of the considered opinion that
Paragraphs 14 to 15, inclusive, of the Expanded Complaint had already supplied or provided the
specifications and particulars theretofore lacking in the original Complaint. Therein, Lucio C. Tan, Willy
Co, Florencio T. Santos, Mariano Tan Eng Lian, Domingo Chua and Mariano Khoo, together with their
co-defendants-movants, are alleged to have actively collaborated and willingly participated in multi-
varied and inter-related business/corporate/individual acts and practices involving the General Bank and
Trust Company (now Allied Banking Corporation), the Central Bank of the Philippines, the Asia Brewery,
Inc., Fortune Tobacco Co., Shareholdings, Inc., Foremost Farms, Inc., Himmel Industries, Inc.,
Grandspan Development Corporation, Silangan, Inc., Maranaw Hotel and Resorts, Corp., Sipalay Trading
Corporation, The Development Corporation of the Philippines, Northern Redrying Co., Inc. and the
Virginia Tobacco Administration.

ISSUE: W/N the Sandiganbayan erred in denying the motion for Bill of Particulars
HELD: Petition dismissed. The decision of the Sandiganbayan is affirmed. The complaint need not
contain all facts. It only requires that the ultimate facts be given in order for a defendant to be able to
secure himself of an opportunity to provide an intelligent pleading. The rest is of evidentiary character
which must be adduced during trial proper. The court ruled that the complaint of the PCGG are sufficient
in nature as pursuant to EO 1 that the parties are guilty of accumulating ill-gotten wealth. The petitioners
may no longer demand for any particulars as it would expose evidence before trial.
In essence, these are what the PCGG says:
The petitioner Lucio Tan was Mr. Marcos' business partner; Through undue influence, coercion, and
abuse of light they acquired shareholdings from various firms, and built a business empire therefrom; The
remaining petitioners acted as their "dummies, nominees, or agents; Together with the Marcoses, they
maneuvered their way into these firms and acquired control thereof; The same were accomplished
through unacceptable machinations such as insider trading and similar acts, in violation of existing laws;
They also unjustly enriched the petitioners at the expense of the Republic of the Philippines and the
Filipino people.

DOCTRINE: The Motion for Bill of Particulars primary objective is to apprise the adverse party of what
the plaintiff wants to preclude the latter from springing a surprise attack later. Any more particulars in
that event would be evidentiary in character, which must be adduced at the trial proper.

Saw vs. CA, 195 SCRA 740 (1991)

FACTS:

A collection suit with preliminary attachment was filed by Equitable Banking Corporation against Freeman, Inc. and
Saw Chiao Lian, its President and General Manager.
The petitioners moved to intervene, alleging that
(1) the loan transactions between Saw Chiao Lian and Equitable Banking Corp. were not
approved by the stockholders representing at least 2/3 of corporate capital;
(2) Saw Chiao Lian had no authority to contract such loans; and
(3) there was collusion between the officials of Freeman, Inc. and Equitable Banking Corp. in
securing the loans. The motion to intervene was denied, and the petitioners appealed to the Court
of Appeals.

Equitable and Saw Chiao Lian entered into a compromise agreement approved by the lower court. But because it
was not complied with, Equitable secured a writ of execution, and two lots owned by Freeman, Inc. were levied
upon and sold at public auction to Freeman Management and Development Corp.
CA: sustained the denial of the petitioners' motion for intervention, holding that "the compromise agreement
between Freeman, Inc., through its President, and Equitable Banking Corp. will not necessarily prejudice petitioners
whose rights to corporate assets are at most inchoate, prior to the dissolution ofFreeman, Inc. . . . And intervention
under Sec. 2, Rule 12 of the Revised Rules of Court is proper only when one's right is actual, material, direct and
immediate and not simply contingent or expectant."
It also ruled against the petitioners' argument that because they had already filed a notice of appeal, the trial judge
had lost jurisdiction over the case and could no longer issue the writ of execution.

ISSUE:
1. W/N CA erred in holding that the petitioners cannot intervene because their rights as stockholders of Freeman are
merely inchoate and not actual, material, direct and immediate prior to the dissolution of the corporation;
2. W/N CA erred in holding that the appeal of the petitioners was confined only to the order denying their motion to
intervene and did not divest the trial court of its jurisdiction over the whole case.

HELD:
Petition is DENIED

1.) The petitioners base their right to intervene for the protection of their interests as stockholders on Everett v. Asia
Banking Corp., 2 where it was held:
The well-known rule that shareholders cannot ordinarily sue in equity to redress wrongs done to the corporation, but
that the action must be brought by the Board of Directors, . . . has its exceptions. [If] the corporation [were] under
the complete control of the principal defendants, . . . it is obvious that a demand upon the Board ofDirectors to
institute action and prosecute the same effectively would have been useless, and the law does not require litigants to
perform useless acts.
Equitable contentions:
collection suit against Freeman, Inc., and Saw Chiao Lian is essentially in personam and, as an
action against defendants in their personal capacities, will not prejudice the petitioners as stockholders of
the corporation. The Everett case is not applicable because it involved an action filed by the minority
stockholders where the board of directors refused to bring an action in behalf of the corporation. In the case
at bar, it was Freeman, Inc. that was being sued by the creditor bank.
subject matter of the intervention falls properly within the original and exclusive jurisdiction of
the Securities and Exchange Commission under P.D. No. 902-A.
the intervention of the petitioners could have only caused delay and prejudice to the principal
parties.
maintains that the petitioners' appeal could only apply to the denial of their motion for intervention
and not to the main case because their personality as party litigants had not been recognized by the trial
court.
In the case of Magsaysay-Labrador v. Court of Appeals, 3 we ruled as follows:
Viewed in the light of Section 2, Rule 12 of the Revised Rules of Court, this Court affirms the respondent court's
holding that petitioners herein have no legal interest in the subject matter in litigation so as to entitle them to
intervene in the proceedings below. In the case of Batama Farmers' Cooperative Marketing Association, Inc. v.
Rosal, we held: " As clearly stated in Section 2 of Rule 12 of the Rules of Court, to be permitted to intervene in a
pending action, the party must have a legal interest in the matter in litigation, or in the success of either of the parties
or an interest against both, or he must be so situated as to be adversely affected by a distribution or other disposition
of the property in the custody of the court or an officer thereof "

To allow intervention, [a] it must be shown that the movant has legal interest in the matter in litigation, or
otherwise qualified; 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 the intervenor's rights may be protected in a
separate proceeding or not. Both requirements must concur as the first is not more important than the second.

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 the direct legal operation and
effect of the judgment. Otherwise, if persons not parties of the action could be allowed to intervene, proceedings will
become unnecessarily complicated, expensive and interminable. And this is not the policy of the law.
The words "an interest in the subject" mean a direct interest in the cause of action as pleaded, and which 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.

Here, the interest, if it exists at all, of petitioners-movants is indirect, contingent, remote, conjectural, consequential
and collateral. At the very least, their interest is purely inchoate, or in sheer expectancy of a right in the management
of the corporation and to share in the profits thereof and in the properties and assets thereof on dissolution, after
payment of the corporate debts and obligations.
While a share of stock represents a proportionate or aliquot interest in the property of the corporation, it does not
vest the owner thereof with any legal right or title to any of the property, his interest in the corporate property being
equitable or beneficial in nature. Shareholders are in no legal sense the owners of corporate property, which is
owned by the corporation as a distinct legal person.

2.) CA correctly noted that the notice of appeal was filed by the petitioners on October 24, 1988, upon the denial
oftheir motion to intervene, and the writ of execution was issued by the lower court on January 30, 1989. The
petitioners' appeal could not have concerned the "whole" case (referring to the decision) because the petitioners "did
not appeal the decision as indeed they cannot because they are not parties to the case despite their being stockholders
of respondent Freeman, Inc." They could only appeal the denial of their motion for intervention as they were never
recognized by the trial court as party litigants in the main case. cdphil
Intervention is "an act or proceeding by which a third person is permitted to become a party to an action or
proceeding between other persons, and which results merely in the addition of a new party or parties to an original
action, for the purpose of hearing and determining at the same time all conflicting claims which may be made the
subject matter in litigation." It is not an independent proceeding, but an ancillary and supplemental one which, in
the nature of things, unless otherwise provided for by the statute or Rules of Court, must be in subordination to the
main proceeding. It may be laid down as a general rule that an intervenor is limited to the field of litigation open to
the original parties.
In the case at bar, there is no more principal action to be resolved as a writ of execution had already been issued by
the lower court and the claim of Equitable had already been satisfied. The decision of the lower court had already
become final and in fact had already been enforced. There is therefore no more principal proceeding in which the
petitioners may intervene.
Consequently, it will be illogical and of no useful purpose to grant or even consider further herein petitioner's prayer
for the issuance of a writ of mandamus to compel the lower court to allow and admit the petitioner's complaint in
intervention. The dismissal of the expropriation case has no less the inherent effect of also dismissing the motion for
intervention which is but the unavoidable consequence.
The Court observes that even with the denial of the petitioners' motion to intervene, nothing is really lost to them.
The denial did not necessarily prejudice them as their rights are being litigated in the case now before the Securities
and Exchange Commission and may be fully asserted and protected in that separate proceeding.

DOCTRINE:
An intervention has been regarded, as merely "collateral or accessory or ancillary to the principal action and not an
independent proceedings; and interlocutory proceeding dependent on and subsidiary to, the case between the
original parties." With the final dismissal of the original action, the complaint in intervention can no longer be acted
upon. That right of the intervenor should merely be in aid of the right of the original party, like the plaintiffs in this
case. As this right of the plaintiffs had ceased to exist, there is nothing to aid or fight for. So the right of intervention
has ceased to exist In the case at bar, there is no more principal action to be resolved as a writ of execution had
already been issued by the lower court and the claim of Equitable had already been satisfied. The decision of the
lower court had already become final and in fact had already been enforced. There is therefore no more principal
proceeding in which the petitioners may intervene.
Metropolitan Bank & Trust Co. vs. Presiding Judge, 182 SCRA 820 (1990)

FACTS:
Petitioner Metropolitan Bank and Trust Co. in whose favor a deed of chattel mortgage was executed by
Good Earth Emporium, Inc. (GEE) over certain air conditioning units installed in the GEE building, filed
a complaint for replevin against Uniwide Sales, Inc. (Uniwide, for brevity) and the BPI Investment
Corporation and several other banks collectively called BPI-Consortium, for the recovery of the
possession of the air-conditioning units or in the event they may not be recovered, for the defendants
which acquired the GEE building in an auction sale, (to) be required, jointly and severally, to pay the
plaintiff the unpaid obligations on the units.
Metrobank:
alleged that the air-conditioning units were installed on a loan of P4,900,000.00 it
extended to Good Earth Emporium & Supermarket, Inc. in its building located at Rizal Avenue,
Sta. Cruz, Manila, after the land and building had been foreclosed and purchased on June 3, 1983
at public auction by the defendants, except Uniwide, and in order to secure repayment of the loan,
a deed of chattel mortgage was constituted over the personal properties listed in the deed which
included the airconditioning units.
loan proceeds were used by GEE to finance the acquisition of airconditioning equipment
from Reycor (sic) Air Control System, Inc.
Defendants filed their Answer, Uniwide on July 25, 1986 and the defendants on July 14, 1986

Raycor Air Control Systems, Inc.: filed a motion for leave to intervene alleging 'it has a direct and
immediate interest on the subject matter. There was no opposition to the motion and the intervention
complaint was admitted by the lower court. Metrobank filed its Answer To The Intervention Complaint.

TC: set the case for trial on the merits but before the date of the trial plaintiff Metrobank and the
defendants Uniwide and BPI Consortium, filed a motion for postponement of the scheduled and asked for
thirty (30) days within which to submit a compromise agreement. Thereafter, plaintiff Metrobank and
defendants BPI Consortium filed a joint motion to dismiss the complaint and lower court issued the order
dismissing the complaint with prejudice
Private respondent filed a motion for reconsideration of the order dismissing the complaint with
prejudice, claiming it was not furnished with copy of the joint motion for dismissal.
Respondent court: granted MR filed by the intervenor which order is now subject of present petition for
certiorari.
Private respondent filed a motion to admit amended complaint and attached the Amended Intervention
Complaint to the motion. To this motion, plaintiff Metrobank filed an opposition and after the intervenor
had filed their Reply and the plaintiff a Rejoinder, the respondent court issued the order admitting the
amended complaint in intervention. This is the other order which is subject of the petition for certiorari.
Plaintiff Metrobank filed a motion for extension for 15 days within which to file its answer to the
amended complaint in intervention and the intervenor filed an opposition to Metrobank's motion and at
the same time moved that Metrobank be declared in default on the amended complaint in intervention.
The respondent court granted Metrobank's motion and on February 18, 1989, Metrobank filed its Answer
to the Amended Complaint in Intervention with Counterclaim.
Petitioner filed a petition for certiorari and mandamus with respondent CA contending that the lower
court committed a grave abuse of discretion amounting to lack of jurisdiction in allowing the intervention
suit to survive despite the dismissal of the main action and also in admitting the amended complaint in
intervention.
CA: found no merit in the petition and dismissed the same on July 19, 1989. Hence this Petition

Issue:

1.W/N CA committed a grave abuse of discretion amounting to lack of jurisdiction in allowing the
intervention suit to survive despite the dismissal of the main action and
2.also in admitting the amended complaint in intervention.

Held:

Petition is DENIED and the judgment of CA AFFIRMED.


1.)There is here no final dismissal of the main case. The aforementioned order of the lower court has the
effect not only of allowing the intervention suit to proceed but also of vacating its previous order of
dismissal. The joint motion of therein plaintiff and the original defendants to dismiss the case, without
notice to and consent of the intervenor, has the effect of putting to rest only the respective claims of the
said original parties inter se, but the same cannot in any way affect the claim of private respondent which
was allowed by the court to intervene without opposition from the original parties. A resum of pertinent
rulings on the matter would be in order.
Intervention is defined as "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."
Any person who has or claims an interest in the matter in litigation, in the success of either of the parties
to an action, or against both, may intervene in such action, and when he has become a party thereto it is
error for the court to dismiss the action, including the intervention suit on the basis of an agreement
between the original parties to the action. Any settlement made by the plaintiff and the defendant is
necessarily ineffective unless the intervenor is a party to it.
By the very definition of "intervention," the intervenor is a party to the action as the original parties and
to make his right effectual he must necessarily have the same power as the original parties, subject to the
authority of the court reasonably to control the proceedings in the case.
After the intervenor has appeared in the action, the plaintiff has no absolute right to put the intervenor out
of court by the dismissal of the action. The parties to the original suit have no power to waive or
otherwise annul the substantial rights of the intervenor. When an intervening petition has been filed, a
plaintiff may not dismiss the action in any respect to the prejudice of the intervenor.
The intervenor in a pending case is entitled to be heard like any other party. A claim in intervention that
seeks affirmative relief prevents a plaintiff from taking a voluntary dismissal of the main action. Where a
complaint in intervention was filed before plaintiff's action had been expressly dismissed, the intervenor's
complaint was not subject to dismissal on the ground that no action was pending, since dismissal of
plaintiff's action did not affect the rights of the intervenor or affect the dismissal of intervenor's complaint.
An intervenor's petition showing it to be entitled to affirmative relief will be preserved and heard
regardless of the disposition of the principal action.
To require private respondent to refile another case for the settlement of its claim will result in
unnecessary delay and expenses and will entail multiplicity of suits and, therefore, defeat the very
purpose of intervention which is to hear and determine at the same time all conflicting claims which
may be made on the subject matter in litigation, and to expedite litigation and settle in one action and by a
single judgment the whole controversy among the persons involved.

2.)On admitting private respondent's amended complaint in intervention, we sustain respondent Court of
Appeals in upholding the same. Incidentally, it will be recalled that petitioner was granted the opportunity
to file, as it did file, its answer to the amended complaint in intervention and it even interposed a
counterclaim in the process.
Now, the granting of leave to file an amended pleading is a matter particularly addressed to the sound
discretion of the trial court and that discretion is broad, subject only to the limitations that the
amendments should not substantially change the cause of action or alter the theory of the case or that it
was made to delay the action. Once exercised, that discretion will not be disturbed on appeal, except in
case of abuse thereof.
In the case at bar, a reading of the amended complaint in intervention shows that it merely supplements an
incomplete allegation of the cause of action stated in the original complaint so as to submit the real matter
in dispute. Contrary to petitioner's contention, it does not substantially change intervenor's cause of action
or alter the theory of the case, hence its allowance is in order.
In determining whether a different cause of action is introduced by amendments to the complaint,
what is to be ascertained is whether the defendant shall be required to answer for a liability or legal
obligation wholly different from that which was stated in the original complaint. An amendment will not
be considered as stating a new cause of action if the facts alleged in the amended complaint show
substantially the same wrong with respect to the same transaction, or if what are alleged refer to the same
matter but are more fully and differently stated, or where averments which were implied are made in
expressed terms, and the subject of the controversy or the liability sought to be enforced remains the
same.
The courts should be liberal in allowing amendments to pleadings to avoid multiplicity of suits and in
order that the real controversies between the parties are presented, their rights determined and the case
decided on the merits without unnecessary delay. This liberality is greatest in the early stages of a lawsuit,
especially in this case where the amendment to the complaint in intervention was made before trial of the
case thereby giving petitioner all the time allowed by law to answer and to prepare for trial.
On the issue regarding the propriety of the intervention, suffice it to state that petitioner's failure to
interpose a timely objection when the motion for leave to intervene was filed by private respondent bars
the former from belatedly questioning the validity of the same on appeal. In any event, the trial court duly
considered the circumstances and granted the motion, which order was not seasonably questioned by
petitioner thus evincing its approval of the court's action.
DOCTRINE:
*There is no question that intervention is only collateral or ancillary to the main action. Hence, it was
previously ruled that the final dismissal of the principal action results in the dismissal of said ancillary
action. The main action having ceased to exist, there is no pending proceeding whereon the intervention
may be based. In the case at bar, however, there was no such final or complete dismissal but rather an
approval of a compromise agreement which was embodied in what was specifically designated as a
'Partial Decision' affecting only the interests of herein petitioner and the defendant in said case but not
those of her co-plaintiff municipality and the intervenor. The clear intent of the court below in making the
partial decision is to make a reservation to determine the rights of the intervenor and, presumably, the
plaintiff municipality. There may be nothing much left to be done with respect to the main case but as far
as the proceedings in the trial court are concerned, the controversy therein has not been fully settled and
the disposition of the case is definitely incomplete.

*Granting of leave to file an amended pleading is a matter particularly addressed to the sound discretion
of the trial court and that discretion is broad, subject only to the limitations that the amendments should
not substantially change the cause of action or alter the theory of the case or that it was made to delay the
action. Once exercised, that discretion will not be disturbed on appeal, except in case of abuse thereof.

2. Filing and Service of Pleadings (Rule 13)

Aberca, et al vs. Ver, G.R. No. 166216, March 14, 2012

FACTS:

On 25 January 1983, several suspected subversives who were arrested and detained by the military filed a
complaint for damages with the Regional Trial Court of Quezon City against Gen. Fabian Ver, then AFP
Chief of Staff, and other subordinate officers. In their complaint, the plaintiff-appellees alleged that they
were arrested and detained by Task Force Makabansa, a composite group of various intelligence units of
the AFP, on the strength of defective search warrants; that while under detention and investigation, they
were subjected to physical and psychological harm, torture and other brutalities to extort from them
confessions and other information that would incriminate them; and that by reason thereof, they suffered
actual and moral damages.

Defendants-appellants, through their counsel, the then Solicitor General Estelito Mendoza, filed a motion
to dismiss on the ground that the complaint states no cause of action.

The trial court granted defendants-appellants' motion to dismiss and ordered the case dismissed.
Plaintiffs-appellees' motion for reconsideration was denied.

Plaintiffs-appellees went to the Supreme Court on a petition for review on certiorari, seeking to annul and
set aside the orders of the trial court.
While the case was pending in the Supreme Court, the so-called EDSA revolution took place. As a result,
the defendants-appellants lost their official positions and were no longer in their respective office
addresses as appearing in the record.

On April 15, 1988, the Supreme Court rendered a decision annulling and setting aside the assailed orders
and remanded the case to the trial court for further proceedings. However, trial could not proceed
immediately because on the record of the case was destroyed when fire razed the City Hall of Quezon
City. It was only on October 9, 1989 when plaintiffs-appellees sought a reconstitution of the record of the
case. The record shows that the petition for reconstitution was set for hearing on October 27, 1989.
However, there is nothing in the record to show that defendants-appellants or their counsel were notified.
For lack of an opposition, the petition for reconstitution was granted.

On August 15, 1990, plaintiffs-appellees filed a motion praying that defendants-appellants be required to
file their answer. However, the record as reconstituted did not show who are the lawyers of the
defendants-appellants considering that Estelito Mendoza, who had represented them in his capacity as
Solicitor General, was no longer holding that position. Furthermore, defendants-appellants were also no
longer occupying the positions they held at the time the complaint was filed. Thus, in an order dated
August 17, 1990, plaintiffs-appellees were directed to report to the trial court the addresses and
whereabouts of defendants-appellants so that they could be properly notified.

Instead of complying with the order of August 17, 1990, plaintiffs-appellees filed a motion to declare
defendants-appellants in default. The trial court initially denied plaintiffs-appellees' motion to declare
defendants-appellants in default, stating that "without actual notice of the judgment of the Supreme
Court . . . the defendants-appellants herein would not be aware that they should file a responsive
pleading" and that, therefore, "to consider the defendants-appellants in default would be tantamount to
lack of due process . . . ." Subsequently, however, in an order dated June 4, 1991, the trial court set aside
the order of dismissal and reinstated the case. It also approved plaintiffs-appellees' request to serve the
notice to file answer or responsive pleading by publication.

In a compliance dated September 12, 1991, plaintiffs-appellees informed the trial court that the following
notice was published in the Tagalog newspaper BALITA.

RTC's RULING:

The RTC handed down a decision in favor of the petitioners. No answer was filed by defendants-
appellants within the period stated in the notice. On motion of plaintiffs-appellees, the trial court in its
order declared defendants-appellants in default and directed plaintiffs-appellees to present their evidence
ex-parte.

The Omnibus Motion of Col. Singson, Lt. Col. Lacson and Col. Abadilla; the Motion for Reconsideration
of Col. Gerardo Lantoria; and the Petition for Relief from Judgment of Maj. Aguinaldo were denied by
the RTC.
CA's RULING:

The CA rendered a decision reversing and setting aside the RTC decision and ordering the case remanded
to the RTC for further proceedings.

The CA ruled, among others, that the RTC committed four (4) errors in declaring the respondents in
default and proceeding to hear the case. The RTC committed its first error when it abandoned the proper
modes of service of notices, orders, resolutions or judgments as the petitioners failed to comply with its
order dated August 17, 1990, directing them to report the addresses and whereabouts of the respondents
so that they could be properly notified.

The second error was the failure of the RTC to avail of substituted service after failing to effect personal
service or service by mail. It perpetrated its third error when it authorized service by publication after
dismissing the case for failure of the petitioners to furnish the current addresses of the respondents. The
CA reasoned out that there was nothing in the rules which would authorize publication of a notice of
hearing to file answer and for what was authorized to be published were summons and final orders and
judgments. The fourth error was committed when the respondents were declared in default because they
were not duly notified and, therefore, were denied due process.

The CA stated that since the RTC failed to notify the respondents of the proceedings undertaken, the latter
were denied the chance to actively participate therein.

ISSUE:

Whether or not the respondents may be declared in default.

SUPREME COURT's RULING:

NO. Rule 13 of the Rules of Court prescribe the modes of service of pleadings, motions, notices, orders,
judgments, and other papers, namely: (1) personal service; (2) service by mail; and (3) substituted service,
in case service cannot be effected either personally or by mail. These are mandatory and, hence, should be
strictly followed. Also, Section 11, Rule 13 of the Rules of Court states:

SEC. 11. Priorities in modes of service and filing. Whenever practicable, the service and filing of
pleadings and other papers shall be done personally. Except with respect to papers emanating from the
court, a resort to other modes must be accompanied by a written explanation why the service or filing was
not done personally. A violation of this Rule may be cause to consider the paper as not filed.

Section 11 is mandatory. Under Section 11, Rule 13 of the 1997 Rules of Civil Procedure, personal
service and filing is the general rule, and resort to other modes of service and filing, the exception.
Henceforth, whenever personal service or filing is practicable, in light of the circumstances of time, place
and person, personal service or filing is mandatory. Only when personal service or filing is not practicable
may resort to other modes be had, which must then be accompanied by a written explanation as to why
personal service or filing was not practicable to begin with.
In the case at bench, the respondents were completely deprived of due process when they were declared
in default based on a defective mode of service service of notice to file answer by publication. The
rules on service of pleadings, motions, notices, orders, judgments, and other papers were not strictly
followed in declaring the respondents in default. The Court agrees with the CA that the RTC committed
procedural lapses in declaring the respondents in default and in allowing the petitioners to present
evidence ex-parte.

As correctly observed by the CA, the RTC's August 17, 1990 Order was an attempt to serve a notice to
file answer on the respondents by personal service and/or by mail. These proper and preferred modes of
service, however, were never resorted to because the OSG abandoned them when the petitioners failed to
comply with the August 17, 1990 RTC order requiring them to report the addresses and whereabouts of
the respondents. Nevertheless, there was still another less preferred but proper mode of service available
substituted service which is service made by delivering the copy to the clerk of court, with proof of
failure of both personal service and service by mail. Unfortunately, this substitute mode of service was
not resorted to by the RTC after it failed to effect personal service and service by mail. Instead, the RTC
authorized an unrecognized mode of service under the Rules, which was service of notice to file answer
by publication.

In view of the peculiar circumstances surrounding the case, the RTC should have instead directed the
petitioners to exert diligent efforts to notify the respondents either personally or by registered mail. In
case the preferred modes were impractical, the Court should have required the petitioners to at least report
in writing why efforts exerted towards personal service or service by mail failed. In other words, a
convincing proof of an impossibility of personal service or service by mail to the respondents should have
been shown first. The RTC, thus, erred when it ruled that the publication of a notice to file answer to the
respondents substantially cured the procedural defect equivalent to lack of due process. The RTC cannot
just abandon the basic requirement of personal service and/or service by mail.

It must be noted that as the RTC orders stated, the respondents were not notified of the April 15, 1988
Decision of this Court, which ordered the re-opening and remanding of this case to the RTC. They were
neither notified of the reconstitution proceedings that took place pertaining to the burned records of the
case. The RTC further stated that the respondents were no longer holding their official government
positions and that they were no longer represented by the OSG on account of the change in government.
In other words, the respondents had no counsel of record and no notice of subsequent proceedings. In
short, due process was absent.

Also, the court records got burned during the June 11, 1988 fire that hit the Quezon City Hall where the
records were kept. On March 12, 1990, the RTC granted the petitioners' petition for reconstitution. Again,
the records do not show that the RTC initiated extra efforts to notify the respondents about the
reconstitution proceedings. The entire records of this case tend to show that the respondents were
completely out of the picture until after the promulgation of the RTC decision.
DOCTRINE:

The only modes of service of pleadings, motions, notices, orders, judgments and other papers allowed by
the rules are personal service, service by mail and substituted service if either personal service or service
by mail cannot be made, as stated in Sections 6, 7 and 8 of Rule 13 of the Rules of Court. Nowhere under
this rule is service of notice to file answer by publication is mentioned, much less recognized.

Service by publication only applies to service of summons stated under Rule 14 of the Rules of Court
where the methods of service of summons in civil cases are: (1) personal service;(2) substituted service;
and (3) service by publication.

Romero vs. Court of Appeals, G.R. No. 142406, May 16, 2005

FACTS:

On April 23, 1996, petitioner Ma. Corona Romero and her siblings executed a letter-contract to sell with
private respondent Saturnino Orden. In said contract, private respondent proposed to purchase from
Romero and her siblings a property located in Quezon City for the total amount of P17M. The contract
stipulated that private respondent shall pay petitioner the amount of P7M upon the execution of the deed
of absolute sale, the balance of P10M not later than December 19, 1996 and that private respondent shall
shoulder the expenses to evict the squatters on the property.

When private respondent failed to pay the down payment, petitioner Corona told him that she was
rescinding the contract to sell. Private respondent then filed a complaint for specific performance and
damages against petitioners alleging that he has complied with his obligation to evict the squatters on the
property and is entitled to demand from petitioners the performance of their obligation under the contract.

Simultaneous with the filing of the complaint, private respondent caused the annotation of a notice of lis
pendens.

On August 11, 1997, Manuel Y. Limsico, Jr. and Aloysius R. Santos, subsequent buyers of the subject
property sold by petitioner Corona and her siblings, filed a motion for leave to intervene with the RTC
and were admitted as defendants-intervenors. They filed a motion for the cancellation of lis pendens

RTC's RULING:

The RTC granted the cancellation of lis pendens reasoning that:

While the filing of the notice may not have been for the purpose of molesting the defendants and the
defendants-in-intervenors, still the inscription is not necessary to protect the alleged right of the plaintiff
over the subject property. The plaintiff is not entitled to the inscription of the notice on TCT No. 145269
in the name of the defendants and others because he does not have any actionable right over the subject
property there being no deed of sale executed between him and the defendants over the subject real
properties as offered in the alleged agreement. The alleged agreement dated April 23, 1996 although with
the conformity of Maria Corona S. Romero cannot serve as sufficient basis for the inscription of the
notice on TCT No. 145269. Therefore said notice should be cancelled.

The motion for reconsideration filed by private respondent was denied by the RTC.

Private respondent filed a petition for certiorari before the CA seeking the nullification of the resolutions
of the RTC and asked for the re-annotation of the notice of lis pendens on the TCT.

CA's RULING:

The CA granted the petition reasoning that:

First, the general rule is that a notice of lis pendens cannot be cancelled while the action is pending and
undetermined except in cases expressly provided by statute. aDHCcE

Section 77, P.D. 1529 (Property Registration Decree) provides:

SEC. 77. Cancellation of lis pendens. Before final judgment, a notice of lis pendens may be cancelled
upon order of the court, after proper showing that the notice is for the purpose of molesting the adverse
party, or that it is not necessary to protect the rights of the party who caused it to be registered. It may also
be cancelled by the Register of Deeds upon verified petition of the party who caused the registration
thereof.

In the instant case, there was not even a hearing upon which could be predicated a "proper showing" that
any of the grounds provided by law exists. The cited case of Victoriano presupposes that there must be a
hearing where the evidence of the party who sought the annotation of the notice of lis pendens must be
considered.

Second, as shown in the above cited provisions, there are only two grounds for the court to order the
cancellation of a notice of lis pendens during the pendency of an action, and they are: (1) if the annotation
was for the purpose of molesting the title of the adverse party, or (2) when the annotation is not necessary
to protect the title of the party who caused it to be recorded. While the parties are locked up in legal battle
and until it becomes convincingly shown that either of the two grounds exists, the court should not allow
the cancellation.

Third, the Doctrine of Lis Pendens is founded upon reasons of public policy and necessity, the purpose of
which is to keep the properties in litigation within the power of the court until the litigation is terminated,
and to prevent the defeat of the judgment or decree by subsequent alienation.
The motion for reconsideration filed by petitioners was denied.

ISSUE:

Whether or not the CA committed grave abuse of discretion in ordering the re-annotation of the lis
pendens.

SUPREME COURT's RULING:

NO. Lis pendens, which literally means pending suit, refers to the jurisdiction, power or control which a
court acquires over property involved in a suit, pending the continuance of the action, and until final
judgment. Founded upon public policy and necessity, lis pendens is intended to keep the properties in
litigation within the power of the court until the litigation is terminated, and to prevent the defeat of the
judgment or decree by subsequent alienation. Its notice is an announcement to the whole world that a
particular property is in litigation and serves as a warning that one who acquires an interest over said
property does so at his own risk or that he gambles on the result of the litigation over said property.

The filing of a notice of lis pendens has a two-fold effect: (1) to keep the subject matter of the litigation
within the power of the court until the entry of the final judgment to prevent the defeat of the final
judgment by successive alienations; and (2) to bind a purchaser, bona fide or not, of the land subject of
the litigation to the judgment or decree that the court will promulgate subsequently.

While the trial court has inherent power to cancel a notice of lis pendens, such power, meanwhile, is
exercised under express provisions of law. As provided for by Sec. 14, Rule 13 of the 1997 Rules of Civil
Procedure, a notice of lis pendens may be cancelled on two grounds: (1) if the annotation was for the
purpose of molesting the title of the adverse party, or (2) when the annotation is not necessary to protect
the title of the party who caused it to be recorded.

In Atlantic Erectors, Inc. vs. Herbal Cove Realty Corp., 28 we further held that resorting to lis pendens is
not necessarily confined to cases that involve title to or possession of real property but also applies to
suits seeking to establish a right to, or an equitable estate or interest in, a specific real property; or to
enforce a lien, a charge or an encumbrance against it. We clarified however that the doctrine of lis
pendens has no application to a proceeding in which the only object sought is the recovery of a money
judgment, though the title or right of possession to property be incidentally affected. It is essential that the
property be directly affected such as when the relief sought in the action or suit includes the recovery of
possession, or the enforcement of a lien, or an adjudication between conflicting claims of title, possession,
or the right of possession to specific property, or requiring its transfer or sale. Even if a party initially
avails of a notice of lis pendens upon the filing of a case in court, such notice is rendered nugatory if the
case turns out to be a purely personal action. In such event, the notice of lis pendens becomes functus
officio.

To put the property under the coverage of the rule on lis pendens, all a party has to do is to assert a claim
of possession or title over the subject property. It is not necessary that ownership or interest over the
property is proved.

The Court disagrees with petitioners' claim that lis pendens is not proper since private respondent has no
title over the property neither did he pray specifically in his complaint for the ownership or possession
thereof.

The complaint for specific performance and damages filed by private respondent specifically prayed that
petitioners, as defendants thereat, be bound by the terms and conditions of their letter-contract. By
praying thus, private respondent in effect asks the court to order petitioners to fulfill their promise to sell
the property covered by TCT No. 145269 for the amount of P17M. While private respondent did not
explicitly state that he was running after the ownership of the property, a simple reading of the complaint
would show that such was his intent. This is sufficient for purposes of annotating lis pendens.

Whether or not the claim of private respondent has merit is of no moment and should not affect the
annotation of lis pendens on the title of the subject property. There is nothing in the rules which requires a
party seeking annotation of lis pendens to show that the land belongs to him. There is no requirement that
the party applying for the annotation must prove his right or interest over the property sought to be
annotated. Thus, we have held that even on the basis of an unregistered deed of sale, a notice of lis
pendens may be annotated on the title. Said annotation cannot be considered as a collateral attack against
the certificate of title based on the principle that the registration of a notice of lis pendens does not
produce a legal effect similar to a lien. The rules merely require that an affirmative relief be claimed since
a notation of lis pendens neither affects the merits of a case nor creates a right or a lien. It only protects
the applicant's rights which will be determined during trial.

DOCTRINE:

As provided for by Sec. 14, Rule 13 of the 1997 Rules of Civil Procedure, a notice of lis pendens may be
cancelled on two grounds: (1) if the annotation was for the purpose of molesting the title of the adverse
party, or (2) when the annotation is not necessary to protect the title of the party who caused it to be
recorded. To put the property under the coverage of the rule on lis pendens, all a party has to do is to
assert a claim of possession or title over the subject property. It is not necessary that ownership or interest
over the property is proved.

De Los Santos vs Elizalde


G.R. Nos. 141810 & 141812. February 2, 2007.
VELASCO, JR., J:

DOCTRINE: Service upon the parties' counsels of record is tantamount to service upon the
parties themselves, but service upon the parties themselves is not considered service upon
their lawyers.

FACTS:
Petitioners filed a Complaint for Quieting of Title, Damages and Attorney's Fees before the
Kalibo, Aklan RTC, involving four adjoining lots designated as Lots 393-A, 393-B, 394-D, and
394-E with a total land area of 14,771 sqm, located in Boracay Island, Malay, Aklan.
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, respondent 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, Abundio Casimero, and
Teodoro Casimero, 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.

The trial court issued a Decision, the dispositive portion of which reads:
(1.) Dismissing the complaint filed by the plaintiffs as well as the complaint in intervention
filed by the second set of intervenors Casimeros, et al. for lack of merit;
(2.) Declaring the two deeds of sale as null and void insofar as they affect the two-thirds
(2/3) share of intervenors Jesus and Rosita;
(3.) Declaring intervenors Jesus delos Santos and Rosita delos Santos Flores as the lawful
owners of the two-thirds portion of the land in question or 9,915 square meters on the
northwest portion, representing as their shares in the intestate estate of Leonardo delos
Santos;
(4.) Declaring defendant Fred Elizalde as the rightful owner of onethird of the land in
question or 4,957 square meters on the southeast portion, segregated by a boundary line
running from the seashore to the inland or from the southwest to northeast;
(5.) Ordering the cancellation or revision of Tax Declaration No. 4422 in the name of Fred
Elizalde (Exhibit 26) and all tax declarations issued subsequent thereto to conform to
paragraphs 3 and 4 hereof as well as the issuance of a new tax declaration to intervenors
Jesus delos Santos and Rosita Flores covering their two-thirds (2/3) share;
(6.) Ordering the plaintiffs or any persons claiming interest therein to deliver complete
possession of the land to defendants and first set intervenors.

Thus, petitioners and respondent Fred Elizalde filed their separate Notices of Appeal.
Subsequently, the CA issued the June 2, 1998 Notice to File Brief, requiring petitioners and
respondent Elizalde to file their briefs within forty-five (45) days from receipt of said notice.

Petitioners filed by registered mail a July 27, 1998 Motion for Extension of Time to File Brief
for Plaintiffs-Appellants. 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, 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, whereby respondent Elizalde
abandoned his appeal by virtue of an amicable settlement between the parties through the
May 27, 1997 Agreement. 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, 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, asking for another thirty (30)-day extension. And yet again,
on December 28, 1998, petitioners filed another motion for extension, 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.

However, on April 8, 1999, petitioners, through their former counsel Atty. Napoleon M.
Victoriano, filed an Ex-Parte Motion to Withdraw Appeal. Said motion sought the withdrawal
of the appeal on the ground that petitioners and respondents delos Santos entered into an
amicable settlement, denominated as an Undertaking executed on September 19, 1998,
whereby petitioners would be paid the amount of P4M in consideration of their leaving the
disputed lots peacefully.

The CA issued a Decision dismissing the separate Notices of Appeal of the parties "for failure
to file their respective appellants' briefs, and in accordance with the prayer in the 'Joint
Manifestation and Motion', and in the 'Ex-Parte Motion to Withdraw Appeal', the appeal
should be dismissed, and considered as withdrawn."

Thereafter, an Entry of Appearance was filed on by Atty. Cesar T. Verano, allegedly in


representation of petitioners. The entry contained the solitary conformity of petitioner
Vicente delos Santos. On the same day, petitioners filed a Motion for Reconsideration of
Decision with Prayer for Reinstatement of Appeal.

Respondents delos Santos then filed an Opposition to Motion for Reconsideration.


CA Ruling
The CA issued a decision in favor of respondents on the ground that the Motion for
Reconsideration With Prayer for the Reinstatement of Appeal was filed 9 days late by the
said new counsel for plaintiffs-appellants. 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.

Hence, this petition. Petitioners contend that the counting of the 15-day period to file
motion for reconsideration should be counted from petitioners knowledge of the decision on
June 2, 1999, and not on Atty. Victorianos receipt of the copy thereof.

ISSUE:
Whether or not petitioners were able to properly file their Motion for Reconsideration.

HELD:
NO. 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. Service
of judgment on the party is prohibited and is not considered the official receipt of the
judgment.

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.

To reiterate, service upon the parties' counsels of record is tantamount to service upon the
parties themselves, but service upon the parties themselves is not considered service upon
their lawyers. The reason is simple the parties, generally, have no formal education or
knowledge of the rules of procedure, specifically, the mechanics of an appeal or availment of
legal remedies; thus, they may also be unaware of the rights and duties of a litigant relative
to the receipt of a decision. More importantly, it is best for the courts to deal only with one
person in the interest of orderly procedure either the lawyer retained by the party or the
party him/herself if s/he does not intend to hire a lawyer.

Even assuming that petitioners had replaced Atty. Victoriano prior to his receipt of the
assailed Decision, the reglementary period for filing a Motion for Reconsideration would still
be reckoned from his receipt of the Decision.

Unless the change of attorneys is carried out properly, the counsel of record shall still be
considered as the party's counsel, and the notice sent to such counsel shall be considered as
notice to the party represented.
Marinduque Mining and Industrial Corp. vs NAPOCOR
G.R. No. 161219. October 6, 2008.
CARPIO, J:

TOPIC: Sec. 11, Rule 13

DOCTRINE: Personal service of pleadings and other papers is the general rule while resort
to the other modes of service and filing is the exception. When recourse is made to the
other modes, a written explanation why service or filing was not done personally becomes
indispensable. If no explanation is offered to justify resorting to the other modes, the
discretionary power of the court to expunge the pleading comes into play.

FACTS:
Respondent NAPOCOR filed a complaint for expropriation against petitioner Marinduque
Mining for the construction of the AGUS VI Kauswagan 69 KV Transmission Line Project.
NAPOCOR sought to expropriate 7,875 square meters of petitioners' property.

Petitioners filed their answer with counterclaim and alleged that the expropriation should
cover not only 7,875 square meters but the entire parcel of land. Petitioners claimed that
the expropriation would render the remaining portion of their property valueless and unfit
for whatever purpose.

In its 5 December 2001 Decision, the trial court fixed the fair market value of the 7,875-
square meter lot at P115 per square meter. The trial court also directed the commissioners
to submit a report and determine the fair market value of the "dangling area", consisting of
58,484 square meters, affected by the installation of NAPOCOR's transmission lines.

NAPOCOR filed a motion for reconsideration but it was denied by the trial court.

In its 19 March 2002 Supplemental Decision, the trial court declared that the "dangling
area" consisted of 48,848.87 square meters and fixed its fair market value at P65 per
square meter. The trial court ruled that petitioners are entitled to consequential damages
because NAPOCOR's expropriation impaired the value of the "dangling area" and deprived
petitioners of the ordinary use of their property.

NAPOCOR filed a motion for reconsideration but it was denied by the trial court for being
moot and academic because on 2 April 2002, NAPOCOR filed a Notice of Appeal of the 19
March 2002 Supplemental Decision.

Petitioners moved for the execution of the trial court's 5 December 2001 Decision and 19
March 2002 Supplemental Decision. The trial court partially granted petitioners' motion and
issued the writ of execution for the 5 December 2001 Decision.

Petitioners filed a "motion to strike out or declare as not filed the notice of appeal dated
April 2, 2002; to declare the supplemental decision as final and executory; and to issue the
corresponding writ of execution thereon". Petitioners argued that NAPOCOR violated Section
11, Rule 13 of the Rules of Court because NAPOCOR filed and served the notice of appeal by
registered mail. According to petitioners, NAPOCOR had all the vehicles and manpower to
personally serve and file the notice of appeal.

NAPOCOR opposed petitioners' motion and alleged that its legal office is "severely
undermanned" with only one vehicle and one employee, acting as secretary, handling 300
active cases in Mindanao. NAPOCOR also added that it was highly irregular for petitioners to
question its mode of service and filing only at this stage of the proceedings because since
the inception of the case, NAPOCOR had resorted to registered mail instead of personal
service.

The trial court granted petitioners' motion and denied NAPOCOR's notice of appeal.
NAPOCOR filed a motion for reconsideration but it was denied by the trial court. NAPOCOR
then filed a special civil action for certiorari with a prayer for a temporary restraining order
before the Court of Appeals.

CA Ruling:
The Court of Appeals ruled in NAPOCOR's favor and set aside the trial court's 15 May 2002
and 24 June 2002 Orders.

ISSUE:
Whether or not NAPOCOR violated Section 11, Rule 13 of the Rules of Court which provides
that the service and filing of pleadings and other papers shall be done personally.

HELD:
NO. Under Section 11, Rule 13 of the Rules, personal service of pleadings and other papers
is the general rule while resort to the other modes of service and filing is the exception.
When recourse is made to the other modes, a written explanation why service or filing was
not done personally becomes indispensable. If no explanation is offered to justify resorting
to the other modes, the discretionary power of the court to expunge the pleading comes
into play.

Henceforth, whenever personal service or filing is practicable, in light of the circumstances


of time, place and person, personal service or filing is mandatory. Only when personal
service or filing is not practicable may resort to other modes be had, which must then be
accompanied by a written explanation as to why personal service or filing was not
practicable to begin with. In adjudging the plausibility of an explanation, a court shall
likewise consider the importance of the subject matter of the case or the issues involved
therein, and the prima facie merit of the pleading sought to be expunged for violation of
Section 11.

In this case, NAPOCOR complied with the Rules. NAPOCOR's notice of appeal sufficiently
explained why the notice of appeal was served and filed by registered mail due to lack of
manpower to effect personal service. This explanation is acceptable for it satisfactorily
shows why personal service was not practicable.
PLEASE NOTE: RED - FACTS

ORANGE- ARGUMENTS
RED + ORANGE-SUMMARY
United Pulp and Paper Co, Inc (UPPCI) v. United Pulp and
Paper Chapter-Federation of Free Workers (UPPCFFW)
Sandoval-Gutierrez, J. G.R no.141117, Mar. 25, 2004
Topic: Sec. 11, Rule 13
FACTS: Teodorico Simbulan was promoted from Welder I to II
with corresponding pay class movement from 5 TO 8 (3 times higher
salary).

UPPCI implemented PROMOTION POLICY where promotional


increase is 5% compounded for every pay class jump unless the
effect of the increase will be such to cause the promoted employees
salary to exceed that of the lowest paid incumbent in the same
position as that to which the employee is being promoted, in which
case the increase shall only be 3%.

UPPCFFW, representing Simbulan, questioned the regularity of


salary increase made by UPPCI. They raised 2 arguments: 1.
promotional increase of Simbulan to 5% does not exceed salary rate
of incumbent; and 2. Discrimination against Simbulan bcoz others
can enjoy 5% increase. Settlement failed so filed with the NCMB.

NCMB: in favor of Simbulan (his pay class movement was from 5


to 8 equivalent to 5%+5%+5% increase)

UPPCI filed MOTION FOR RECON, but denied.

Aggrieved, UPPCI assailed NCMB order BEFORE CA under RULE 43.

CA: Petition dismissed for 3 reasons: 1.Cert of Non-Forum shopping


was not signed by plaintiff or principal party, only unauthorized
counsel; 2. No registry receipts were attached to petition as proof of
service; 3. NO WRITTEN EXPLANATION required for not resorting to
personal service

ISSUE: Was CAs dismissal on those grounds valid?


HELD: YES. 1.Sec.5 Rule 7 requires that the principal party or
plaintiff certify under oath the complaint or other initiatory pleading
he has commenced. Here, only counsel, who was not authorized,
signed.

2. Sec. 11, Rule 13 requires written explanation to be


attached in the petition why service or filing was not done
personally. Where no explanation is offered to justify service of
pleadings by other modes, the discretionary power of court to
expunge the pleading becomes mandatory. So, CA correctly
expunged the petition due to lack of written explanation.

Rules of procedure exist for a purpose and to disregard such rules in


the guise of liberal construction would be to defeat such purpose.

3. Summons (Rule 14)

E.B. Villarosa & Partner Co., Ltd. vs. Benito, 312 SCRA 65 (1999)
E.B VILLAROSA & PARTNER CO. LTD (EB) V. Hon. Benito (in
his capacity as Judge of Makati) and IMPERIAL
DEVELOPMENT (Imperial)
Gonzaga-Reyes, J. G.R no. 136426, August 6, 1999

TOPIC: Comparison bet. Sec. 11, Rule 14, 1997 Rules and Section
13, Rule 14, Pre-1997 Rules

FACTS: EB and Imperial executed a Deed of Sale with Development


Agreement whereby former agreed to develop parcel of land owned by the
latter located at Cagayan de Oro (CDO).
Imperial filed a Complaint for Breach of Contract and Damages against E.B
due to alleged failure finish low cost houses and absence of substantial
developments in subject land.

Summons to EB was served to its branch manager Engr. Wendell


Sabulbaro. It was also noted that the Sheriffs return of service indicated a
different address from that provided in the summons.
Return of service address- Villa Gonzalo, Nazareth, CDO
Summons- Kolambog, Lapasan, CDO
EB filed a Special Appearance with Motion to Dismiss (MTD) on 2 grounds:
1.improper service of summons and 2. for lack of jurisdiction over the
person of the defendant. EB contended that the court did not acquire
jurisdiction over person of defendant because there was violation of Sec.
11, Rule 14, 1997 Rules.

On the contrary, Imperial filed a Motion to Defendant in Default due to


failure to file responsive pleading despite receipt of summons and
Opposition to EBs MTD on the ground that Eng. Sabulboro bring home to
the partnership the notice of the complaint; thus, there was valid service of
summons and court acquired jurisdiction.
RTC: EB was given 10 days to file responsive leading and the Court has
validly acquired jurisdiction over the person of defendant.

As its consequence, EB filed by Special Appearance a Motion for


Reconsideration. EB argued that Sec. 11, Rule 14 must be strictly complied
with. The word manager is different from general manager required in
the law.

Imperial in its Opposition reiterated that there is no difference bet. branch


manager and general manager, so long as both did bring home to the
defendant the notice of the complaint.

RTC: Motion for Reconsideration was denied.


EB filed before SC under Rule 65 (Certiorari; ground-grave abuse of
discretion of judge)

ISSUE: WHETHER OR NOT RTC ACQUIRED JURISDICTION OVER EB UPON


SERVICE OF SUMMONS ON ITS BRANCH MANAGER

HELD: NO. Applicable law is Section 11, Rule 14, 1997 Rules of Court,
not Section 13, Rule 14 of the Old Rule.

Under the Old law, service of summons upon a manager is valid. But this
rule no longer applies after the revision of the Rules in 97. The designation
of persons or officers who are authorized to accept summons for a
domestic corp or partnership is now limited and more clearly specified
under Section 11, Rule 14. The rule now states general manager instead
of only manager; corporate secretary instead of secretary; and
treasurer instead of cashier. The phrase agent, or any of its directors
is conspicuously deleted in the new rule.

Strict compliance with the mode of service is necessary to confer


jurisdiction of the court over corp/ partnership.
Thus, service of summons upon branch manager of pet at its branch office
at Cagayan de Oro instead upon the general manager at its principal office
in Davao is improper. Trial court has no jurisdiction. Thus all its orders and
issuances is annulled and set aside.

Northwest Orient Airlines, Inc. vs. CA, 241 SCRA 192 (1995)

Facts

Petitioner, an American Corporation, is seeking to enforce a judgment by a Japanese


Court against Private Respondent, C.F. Sharp & Company, Inc., a Philippine
Corporation.

Petitioner and private respondent entered into an International Passenger Sales


Agency Agreement, whereby the former authorized the latter to sell its airline
tickets. However, private respondent failed to remit the ticket sales in Japan to
petitioner, causing the petitioner to file for an action for collection of money with
damages in Tokyo, Japan.

Summons issued by the Japanese court were not served because the bailiff was
advised that the person authorized to receive the summons, Mr. Dinozo, was in
Manila and wont be back until April 24, 1980. On said date, the bailiff returned to
serve the summons, however, Mr. Dinozo refused to accept the same claiming that
he is no longer an employee of the company.

Because of two failed attempts, the Japanese court ordered that the summons be
issued at the principal office of private respondent in Manila. Private respondent
received the summons from Japan but failed to appear at the scheduled hearings.
Therefore, the Japanese court rendered judgment ordering private respondent to
pay JPY 83,158,195.00 and damages. Private respondent received the copy of
judgment and did not appeal the same rendering it final and executory. Petitioner
filed a suit for enforcement of judgment with the RTC of Manila.

Private Respondents Defense:

The judgment of the Japanese court is null and void and unenforceable because it
was rendered without due and proper notice and/or with collusion or fraud and/or
upon a clear mistake of fact and law.
Regional Trial Courts Ruling:

The foreign judgment is null and void for want of jurisdiction over the person of the
respondent considering that this is an action in personam. For the Japanese court to
acquire jurisdiction over the private respondent, the summons should have been
served upon it in Japan.

Court of Appeals Ruling:

The process of the court has no extraterritorial effect and no jurisdiction is acquired
over the person of the defendant by serving him beyond the boundaries of the
State.

Supreme Courts Ruling:

The Japanese court acquired jurisdiction over the person of the private respondent
because the service of summons was in order and valid.

Doctrines:

1. In assailing the service of summons of the Japanese court, the


procedural law of Japan determines the validity of the
extraterritorial service of process to private respondent. As to what
this law is is a question of fact and must be pleaded. However,
private respondent failed to so, therefore, the presumption of
validity enjoyed by foreign judgments shall stand.
2. Processual Presumption is where the foreign law is presumed
to be similar with the Philippine laws on service of summons on
private foreign corporations doing business in the Philippines.
3. In the Philippines, service upon private foreign corporations
doing business in the Philippines may be made:
a. on its resident agent designated by law for that
purpose; or
b. on the government official designated by law for
that purpose; or
c. any officers or agent of the foreign corporation in
the Philippines.

Robinson vs. Miralles, G.R. No. 163584, December 12, 2006)

Facts:

Respondent filed a complaint for a sum of money with the RTC of Paraaque against
petitioner and alleged that petitioner borrowed from her $20,054.00 evidenced by a
Memorandum of Agreement dated January 20, 2000 executed by both of them.
Summons was served on petitioners address but proved to be futile since she does
not live there anymore. So, alias summons was issued by the Trial Court and was
served at Alabang Hills Village where she is currently residing.

When the Sheriff came to Alabang Hills Village, he was refused entry by the security
guard acting under strict instructions of petitioner not to let anyone looking for her
to pass through when she is not home. The Sheriff explained that he can still serve
the summons even if petitioner is not at home because he can do so with any
person of competent age who is residing in the address same as with the petitioner.
Regardless, the security guard still refused entry. This caused the Sheriff to just
have the security receive the summons for petitioner.

Respondent filed a motion to declare petitioner in default. The trial court granted
said motion and rendered judgment in favor of respondent.

Petitioner filed with the RTC a petition for relief from judgment alleging that the
summons were improperly served thus the court did not acquire jurisdiction over
her person. The trial court denied the petition and its subsequent motion for
reconsideration.

Issue:

Whether the trial court correctly ruled that a substituted service of summons upon
petitioner has been validly effected.

Petitioners Allegation:

Service of summons upon the subdivision security guard is not in compliance with
Sec. 7, Rule 14 since he is not related to her or staying at her residence. Moreover,
he is not duly authorized to receive summons for the residents of the village.

Supreme Courts Ruling:

The sheriff declared that he was refused entry by the security guard in Alabang Hills
Village twice. Obviously it was impossible for the sheriff to effect
personal/substituted summons upon petitioner. Thus, we agree with the trial court
that summons have been properly served upon petitioner and that it has acquired
jurisdiction over her.

Doctrines:

1. Summons is a writ by which the defendant is notified of the


action brought against him or her. In civil actions, service of
summons is the means by which the court acquires jurisdiction over
the person of the defendant.
2. For substituted summons to be justified:
a. personal service of summons within a reasonable
time is impossible;
b. efforts were exerted to locate the party;
c. the summons was served upon a person of
sufficient age and discretion residing at the partys residence
or upon a competent person in charge of the partys office or
place of business.
Failure to do so would invalidate all subsequent proceedings on
jurisdictional grounds.

13. VALMONTE v. CA (252 SCRA 92, 1996)

Doctrine:As petitioner Lourdes Valmonte is a nonresident who is not found in the


Philippines, service of summons on her must be in accordance with Rule 14, 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.
FACTS: Rosita Dimalanta, sister of petitioner Lourdes Valmonte, filed a complaint for
partition of real property and accounting of rentals against petitioners Valmonte spouses. Lourdes
Valmonte is a foreign resident. The RTC denied private respondent's motion to declare petitioner
Lourdes A. Valmonte in default. A motion for reconsideration was similarly denied. Private
respondent filed a petition for certiorari, prohibition and mandamus with the Court of Appeals.
The Court of Appeals rendered a decision granting the petition and declaring Lourdes in default.
A copy of the appellate court's decision was received by petitioner Lourdes husband at his
Manila law office and in Seattle, Washington.
ISSUE: Whether in an action for partition filed against her and her husband, who is also her
attorney, summons intended for her may be served on her husband, who has a law office in the
Philippines
NO. Private respondent's action, which is for partition and accounting under Rule 69,

is in the nature of an action quasi in rem. Such an action is essentially for the purpose of
affecting the defendant's interest in a specific property and not to render a judgment against him.
As petitioner Lourdes Valmonte is a nonresident who is not found in the Philippines, service of
summons on her must be in accordance with Rule 14, 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.

14. Perkin Elmer Singapore Pte Ltd. vs. Dakila Trading Corporation, G.R. No. 172242, August 14,
2007

Doctrine:Extraterritorial service of summons applies only where the action is in rem or quasi in
rem, but not if an action is in personam.
FACTS: Dakila Trading Corp (Dakila) entered into a Distribution Agreement with Perkin-
Elmer Singapore Pte. Ltd. (PES) which appointed Dakila as sole distributor of its
products in the Philippines. PES was obligated to give Dakila a commission for the sale of its products in
the Philippines. Dakila was granted the right to purchase and sell the products of PES. The agreement
further stipulated that Dakila shall order the products of PES, which it shall sell in the Philippines, either
from PES itself or from PEIP. However, PES unilaterally terminated the Distribution Agreement,
prompting Dakila
to file before the RTC a Complaint for Collection of Sum of Money and Damages with Prayer for
Issuance of a Writ of Attachment against PES and its affiliate, Perkin-Elmer
Instruments Philippines Corporation (PEIP). RTC denied respondents prayer.
Dakila filed Ex-Parte Motions for Issuance of Summons and for Leave of Court to
Deputize Dakilas General Manager (DGM) to Serve Summons Outside of the Philippines. RTC granted
this motion. Thus, an Alias Summons was issued by the RTC to PES. But the said Alias Summons was
served and received by Perkin-Elmer Asia (PEA), a corporation allegedly unrelated to PES. PEIP moved
to dismiss the Complaint filed by Dakila. PEA, on the other hand, sent letters to Dakila and RTC to
inform them of the wrongful service of summons. Accordingly, Dakila filed an Ex-Parte Motion to Admit
Amended Complaint, together with the Amended Complaint claiming that (1) PEA had become a sole
proprietorship owned by the PES, (2) PES changed its name to PEA, (3) such changes did not avoid its
due and outstanding obligations to Dakila, and (4) the name of PES in the complaint should be changed to
PEA. RTC admitted the Amended Complaint. Dakila filed another Motion for the Issuance of Summons
and for Leave of Court to Deputize DGM to serve summons outside the Philippines. RTC granted the
motion. RTC thus issued summons and the DGM went to Singapore and served summons on PES.
Meanwhile, RTC denied the Motion to Dismiss filed by PEIP, compelling the latter to file its Answer to
the Amended Complaint.

PES filed with the RTC a Special Appearance and Motion to Dismiss the Amended Complaint, which
were denied. It held that even though the Amended Complaint is primarily for damages, it does relate to a
property of PES, to which the latter has a claim interest, or an actual or contingent lien, which will make
it fall under one of the requisites for extraterritorial service. PES filed a Petition for Certiorari under Rule
65 with application for temporary restraining order and/or preliminary injunction before the CA. The CA
affirmed the RTC Orders.
ISSUE: Whether summons were properly served under the 2nd or 4th instance of extraterritorial service
NO. Extraterritorial service of summons applies only where the action is in rem or quasi in rem, but not if
an action is in personam. In the case at bar, there can never be a valid extraterritorial service of summons
upon it, because the case involving collection of a sum of money and damages is an action in personam,
as it deals with the personal liability of PES by reason of the alleged unilateral termination of the
Distribution Agreement. The objective sought in Dakilas Complaint was to establish a claim against PES.
Moreover, The action instituted by Dakila affects the parties alone, not the whole world. Thus, being an
action in personam, personal service of summons within the Philippines is necessary in order for the RTC
to validly acquire jurisdiction over the person of PES, and this is not possible in the present case because
the PES is a non-resident and is not found within the Philippines. Dakilas allegation in its Amended
Complaint that PES had personal property within the Philippines in the form of shares of stock in PEIP
did not make the case fall under any of the four instances mentioned in Section 15, Rule 14 of the Rules
of Court, as to convert the action in personam to an action in rem or quasi in rem and, subsequently, make
the extraterritorial service of summons upon the petitioner valid. The 2nd instance for extra-territorial
service has no application in the case. The action for collection of a sum of money and damages was
purely based on the personal liability of the PES. For the action to be one falling under the 2nd instance,
the main subject matter of the action must be the property itself of the PES in the Philippines and in such
instance, judgment will be limited to the res. However, the allegations made by the respondent that the
petitioner has property within the Philippines in support of its application for the issuance of a writ of
attachment was actually denied by the RTC. Neither does the allegation that PES had personal property
within the Philippines in the form of shares of stock in PEIP convert the case from an action in personam
to one quasi in rem, so as to qualify said case under the 4 th instance of extra-territorial service. What is
required is not a mere allegation of the existence of personal property belonging to the non-resident
defendant within the Philippines but that the non-resident defendants personal property located within the
Philippines must have been actually attached. Evidently, PESs personal property within the Philippines,
in the form of shares of stock in PEIP, had not been attached; hence, the case for collection of sum of
money and damages remains an action in personam. In the case at bar, there can never be a valid
extraterritorial service of summons upon it, because the case involving collection of a sum of money and
damages is an action in personam, as it deals with the personal liability of PES by reason of the alleged
unilateral termination of the Distribution Agreement. The objective sought in Dakilas Complaint was to
establish a claim against PES. Moreover, the action instituted by Dakila affects the parties alone, not the
whole world.

CHICO-NAZARIO,J:

FACTS:

Petitioner is a corporation organized under the laws of Singapore and is not considered as a
foreign corporation doing business in the Philippines. Dakila Trading Corp. on the other hand is a
corporation organized under Philippine laws. Respondent entered into a DISTRIBUTION
AGREEEMENT with Perkin-Elmer Instruments Asia Pte Ltd. (PEIA), a corporation duly organized
and existing under the laws of Singapore and engaged in the business of manufacturing, producing,
selling or distributing various laboratory/analytical instruments. By virtue of the said agreement, PEIA
appointed the respondent as the sole distributor of its products in the Philippines. PEIA, shall give
respondent a commission for the sale of its products in the Philippines. Under the same Distribution
Agreement, respondent shall order the products of PEIA, which it shall sell in the Philippines, either from
PEIA itself or from Perkin-Elmer Instruments (Philippines) Corporation (PEIP), an affiliate of PEIA.
PEIP is a corporation duly organized and existing under Philippine law. On 2 August 1997, however,
PEIA unilaterally terminated the Distribution Agreement, prompting respondent to file before the RTC of
Mandaluyong City, for Collection of Sum of Money and Damages with Prayer for Issuance of a Writ of
Attachment against PEIA and PEIP.

RTC: (Mandaluyong)
Petition for writ of attachment by respondent denied.
Respondent then filed Ex-Parte Motions for Issuance of Summons and for Leave of
Court to Deputize Respondents General Manager, Richard A. Tee, to Serve Summons
Outside of the Philippines. = RTC GRANTED
Thus, an ALIAS SUMMONS was by RTC to PEIA but the said Alias Summons was
received by PERKINELMER ASIA a Singaporean based SOLE-PROPRIETORSHIP
allegedly separate and distinct entity from PEIA. PEIP moved to dismiss the complaint filed
by respondent on the ground that it states no cause of action.
PERKINELMER ASIA sent letters to the respondent and RTC to inform them of the
wrongful service of summons upon PERKINELMER ASIA.
Respondent filed an Ex-Parte Motion to Admit Amended Complaint, together with the
Amended Complaint claiming that PEIA had become a sole proprietorship owned by the
petitioner, and subsequently changed its name to Perkinelmer Asia. That the change of name did
not detract the fact that all its due and outstanding obligations to third parties were assumed by
the petitioner. Hence, in its Amended Complaint respondent sought to change the name of
PEIA to that of the petitioner. = RTC ADMITTED AMENDED COMPLAINT.
Respondent again file a motion for the issuance of Summons and for Leave of Court
to Deputize Respondents General Manager, Richard A. Tee, to Serve Summons outside the
Philippines.
RTC thus issued summons to the petitioner thru the deputized GM.
Petitioner subsequently filed with the RTC a Special Appearance and Motion to
Dismiss respondents Amended Complaint based on the grounds that the RTC did not
acquire jurisdiction over the person of the petitioner, failure to state cause of action because
it is not the real-party-in-interest.
RTC RULING: ALLEGATIONS ON THE AMENDED COMPLAINT OF PETITIONERS
OWNERSHIP OF SHARES OF STOCKS IN PEIP WOULD REVEAL THAT THERE IS AN
ALLEGATION OF PERSONAL PROPERTY IN THE PHILIPPINES WHICH WILL MAKE IT
FALL UNDER ONE OF THE REQ. FOR EXTRATERRITORIAL SERVICE. SUMMONS
VALIDLY SERVED.

CA
Petitioner filed a Petition for Certiorari under Rule 65 alleging that the RTC
committed grave abuse of discretion amounting to lack or excess of jurisdiction in refusing to
dismiss the amended complaint.
CA affirmed decision of RTC.
ISSUE:

WHETHER OR NOT THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN


NOT RULING THAT THE SERVICE OF SUMMONS ON PETITIONER WAS DEFECTIVE AND
THAT THE TRIAL COURT THUS FAILED TO ACQUIRE JURISDICTION OVER THE PERSON OF
THE PETITIONER.

HELD:

SC
Courts acquire jurisdiction over the plaintiffs upon the filing of the complaint, while
jurisdiction over the defendants in a civil case is acquired either through the service of
summons upon them in the manner required by law or through their voluntary appearance in
court and their submission to its authority. If the defendants have not been summoned,
unless they voluntarily appear in court, the court acquires no jurisdiction over their persons
and a judgment rendered against them is null and void. To be bound by a decision, a party
should first be subjected to the courts jurisdiction.
Thus, one of the modes of acquiring jurisdiction over the person of the defendant or
respondent in a civil case is through service of summons. It is intended to give notice to the
defendant or respondent that a civil action has been commenced against him. The defendant
or respondent is thus put on guard as to the demands of the plaintiff or the petitioner.
The proper service of summons differs depending on the nature of the civil case
instituted by the plaintiff or petitioner: whether it is in personam, in rem, or quasi in rem.
Under Section 15, Rule 14 of the 1997 Revised Rules of Civil Procedure, there are
only four instances wherein a defendant who is a non-resident and is not found in the
country may be served with summons by extraterritorial service, to wit: (1) when the action
affects the personal status of the plaintiff; (2) when the action relates to, or the subject of
which is property, within the Philippines, in which the defendant claims a lien or an interest,
actual or contingent; (3) when the relief demanded in such action consists, wholly or in part,
in excluding the defendant from any interest in property located in the Philippines; and (4)
when the defendant non-residents property has been attached within the Philippines. In
these instances, service of summons may be effected by (a) personal service out of the
country, with leave of court; (b) publication, also with leave of court; or (c) any other manner
the court may deem sufficient.
Extraterritorial service of summons applies only where the action is in rem or quasi in
rem, but not if an action is in personam.
In the case at bar, this Court sustains the contention of the petitioner that there can
never be a valid extraterritorial service of summons upon it, because the case before the
court a quo involving collection of a sum of money and damages is, indeed, an action in
personam, as it deals with the personal liability of the petitioner to the respondent by reason
of the alleged unilateral termination by the former of the Distribution Agreement .
Respondents allegation in its Amended Complaint that petitioner had personal
property within the Philippines in the form of shares of stock in PEIP does not convert Civil
Case No. MC99-605 from an action in personam to one quasi in rem, so as to qualify said
case under the fourth instance mentioned in Section 15, Rule 14 of the 1997 Revised Rules
of Civil Procedure.
Required under the aforesaid provision of the Revised Rules of Civil Procedure is not
a mere allegation of the existence of personal property belonging to the non-resident
defendant within the Philippines but, more precisely, that the non-resident defendants
personal property located within the Philippines must have been ACTUALLY ATTACHED.
Evidently, petitioners alleged personal property within the Philippines, in the form of
shares of stock in PEIP, had not been attached; hence, Civil Case No. MC99-605, for
collection of sum of money and damages, remains an action in personam. As a result, the
extraterritorial service of summons was not validly effected by the RTC against the petitioner,
and the RTC thus failed to acquire jurisdiction over the person of the petitioner.

DOCTRINES:
Required under the aforesaid provision of the Revised Rules of Civil Procedure
is not a mere allegation of the existence of personal property belonging to the non-
resident defendant within the Philippines but, more precisely, that the non-resident
defendants personal property located within the Philippines must have been
ACTUALLY ATTACHED.
As a rule, even if the service of summons upon the defendant or respondent in
a civil case is defective, the court can still acquire jurisdiction over his person when
he voluntary appears in court or submits himself to its authority, BUT, It is settled that
a party who makes a special appearance in court for the purpose of challenging the
jurisdiction of said court, based on the invalidity of the service of summons, cannot
be considered to have voluntarily submitted himself to the jurisdiction of the court.

Gajudo vs. Traders Royal Bank


G.R. No. 151098. March 21, 2006
Panganiban, C. J.,

FACTS: Petitioners filed a complaint before the RTC of Quezon City against respondent Traders Royal
Bank, the City Sheriff of Quezon City and the Register of Deeds of Quezon City. The complaint sought the
annulment of the extra-judicial foreclosure and auction sale made by the city sheriff of Quezon City of a
parcel of land, the conventional redemption thereof, and prayed for damages and the issuance of a writ of
preliminary injunction.

The complaint alleged that petitioner Danilo Chua obtained a loan from respondent bank secured by a real
estate mortgage over a parcel of land covered by TCT No. 16711, and owned in common by the petitioners;
that when the loan was not paid, respondent bank commenced extra-judicial foreclosure proceedings on the
property; that the auction sale of the property was set on 31 August 1981, on Petitioner Chuas request,
which, however, was made without the knowledge and conformity of the other petitioners; that on the re-
scheduled auction sale, the Sheriff of Quezon City sold the property to the respondent bank, the highest
bidder therein; that the auction sale was tainted with irregularity because, amongst others, the bid price was
shockingly or unconscionably, low; that the other petitioners failed to redeem the property due to their lack of
knowledge of their right of redemption, and want of sufficient education; that, although the period of
redemption had long expired, Chua offered to buy back, and respondent bank also agreed to sell back, the
foreclosed property, on the understanding that Chua would pay respondent bank the sum that the bank paid
at the auction sale, plus interest; that Petitioner Chua made an initial payment thereon duly receipted by
respondent bank; that, in a sudden change of position, respondent bank wrote Chua, asking that he could
repurchase the property, but based on the current market value thereof; and that sometime later, respondent
bank wrote Chua anew, requiring him to tender a new offer to counter the offer made thereon by another
buyer.

Traversing petitioners complaint, respondent bank, filed its answer with counterclaim, thereunder asserting
that the foreclosure sale of the mortgaged property was done in accordance with law; and that the bid price
was neither unconscionable, nor shockingly low; that petitioners slept on their rights when they failed to
redeem the property within the one year statutory period; and that respondent bank, in offering to sell the
property to Petitioner Chua on the basis of its current market price, was acting conformably with law, and
with legitimate banking practice and regulations.

Pre-trial having been concluded, the parties entered upon trial. However, a big conflagration hit the City Hall
of Quezon City, which destroyed, amongst other things, the records of the case. After the records were
reconstituted, petitioners discovered that the foreclosed property was sold by respondent bank to the Ceroferr
Realty Corporation, and that the notice of lis pendens annotated on the certificate of title of the foreclosed
property, had already been cancelled. Accordingly, petitioners, with leave of court, amended their complaint,
but the Trial Court dismissed the case without prejudice due to petitioners failure to pay additional filing
fees.

Petitioners re-filed the complaint with the same Court and impleaded as additional defendants the Ceroferr
Realty Corporation and/or Cesar Roque, and Lorna Roque, and included an additional cause of action, that
said new defendants conspired with respondent bank in canceling the notice of lis pendens by falsifying a
letter sent to and filed with the office of the Register of Deeds of Quezon City, purportedly for the cancellation
of said notice.

Summons was served on respondent bank. Supposing that all the defendants had filed their answer,
petitioners filed a motion to set case for pre-trial.

RTC Ruling

Said motion was denied on the ground that respondent bank has not yet filed its answer. Consequently,
petitioners filed a motion for reconsideration, thereunder alleging that they received by registered mail, a
copy of respondent banks answer with counterclaim. In its Order, the trial Court denied for lack of merit, the
motion for reconsideration, therein holding that the answer with counterclaim filed by respondent bank
referred to another civil case pending before the same Court. For this reason, petitioners filed a motion to
declare respondent bank in default, thereunder alleging that no answer has been filed despite the service of
summons. Upon proof that petitioner had indeed served respondent bank with a copy of said motion, the
Trial Court issued an Order of default against respondent bank. On petitioners motion, they were by the
Court allowed to present evidence exparte, insofar as respondent bank was concerned. Thereafter, the Trial
Court rendered the new questioned partial decision. Aggrieved, respondent bank filed a motion to set aside
the partial decision by default against Traders Royal Bank and admit respondent Traders Royal Banks x x x
Answer with counterclaim: thereunder it averred, amongst others, that the erroneous filing of said answer
was due to an honest mistake of the typist and inadvertence of its counsel. The trial court thumbed down the
motion in its Order.

Respondent bank appealed the Partial Decision to the CA. During the pendency of that appeal, Ceroferr
Realty Corporation and/or Cesar and/or Lorna Roque filed a Manifestation with Motion asking the CA to
discharge them as parties, because the case against them had already been dismissed on the basis of their
Compromise Agreement with petitioners. The CA issued a Resolution granting Ceroferr et al. a Manifestation
with Motion to discharge movants as parties to the appeal. The Court, though, deferred resolution of the
matters raised in the Comment of respondent bank. The latter contended that the Partial Decision had been
novated by the Compromise Agreement, whose effect of res judicata had rendered that Decision functus
officio.

Ruling of the Court of Appeals

The CA ruled in favor of respondent bank. It ruled that the erroneous docket number placed on the Answer
filed before the trial court was not an excusable negligence by the banks counsel. The latter had a bounden
duty to be scrupulously careful in reviewing pleadings. Also, there were several opportunities to discover and
rectify the mistake, but these were not taken. Moreover, the banks Motion to Set Aside the Partial Decision
and to Admit the Answer was not accompanied by an affidavit of merit. These mistakes and the inexcusable
negligence committed by respondents lawyer were binding on the bank.

Hence this Petition.

ISSUE: Whether or not respondent banks default automatically result in the grant of prayers of the
petitioners

HELD: No. court ruled that regarding judgments by default, it was explained in Pascua v. Florendo that
complainants are not automatically entitled to the relief prayed for, once the defendants are declared in
default. Favorable relief can be granted only after the court has ascertained that the relief is warranted by the
evidence offered and the facts proven by the presenting party. In Pascua, this Court ruled that "x x x it would
be meaningless to require presentation of evidence if every time the other party is declared in default, a
decision would automatically be rendered in favor of the non-defaulting party and exactly according to the
tenor of his prayer. This is not contemplated by the Rules nor is it sanctioned by the due process clause."

The import of a judgment by default was further clarified in Lim Tanhu v.


Ramolete. The following disquisition is most instructive:

"Unequivocal, in the literal sense, as these provisions [referring to the subject of


default then under Rule 18 of the old Rules of Civil Procedure] are, they do not
readily convey the full import of what they contemplate. To begin with, contrary
to the immediate notion that can be drawn from their language, these provisions
are not to be understood as meaning that default or the failure of the defendant
to answer should be interpreted as an admission by the said defendant that the
plaintiffs cause of action find support in the law or that plaintiff is entitled to the
relief prayed for. "Being declared in default does not constitute a waiver of rights
except that of being heard and of presenting evidence in the trial court.

"In other words, a defaulted defendant is not actually thrown out of court. While
in a sense it may be said that by defaulting he leaves himself at the mercy of the
court, the rules see to it that any judgment against him must be in accordance
with law. The evidence to support the plaintiffs cause is, of course, presented in
his absence, but the court is not supposed to admit that which is basically
incompetent. Although the defendant would not be in a position to object,
elementary justice requires that only legal evidence should be considered against
him. If the evidence presented should not be sufficient to justify a judgment for
the plaintiff, the complaint must be dismissed. And if an unfavorable judgment
should be justifiable, it cannot exceed in amount or be different in kind from what
is prayed for in the complaint."

DOCTRINE: The mere fact that a defendant is declared in default does not automatically result in the grant
of the prayers of the plaintiff. To win, the latter must still present the same quantum of evidence that would
be required if the defendant were still present. A party that defaults is not deprived of its rights, except the
right to be heard and to present evidence to the trial court. If the evidence presented does not support a
judgment for the plaintiff, the complaint should be dismissed, even if the defendant may not have been heard
or allowed to present any countervailing evidence.

Delos Santos vs. Montesa, 221 SCRA 15 (1993)


MELO, J
FACTS:
Private respondent, who supposedly owns Lot 39 of the Cadastral
survey of Bustos with an area of 5,358 square meters covered by Original
Certificate of Title No. U-7924 a portion of which petitioners entered and
occupied, lodged the complaint towards petitioners' eviction. Summons was
served through the mother of petitioners when the process server was
unable to locate Dolores, Nicolas, and Ricardo delos Santos in Talampas,
Bustos, Bulacan. For failure of petitioners to submit the corresponding
answer, judgment was rendered pursuant to the rules on summary
procedure.
MTC: The court of origin ordered petitioners to vacate the lot in
question to pay P5,000.00 per year as reasonable rental from 1985 until
possession is surrendered, and to pay P1,000.00 as attorney's fees and the
costs of the suit
RTC: Petitioners sought to reconsider, on the principal thesis that they
were never served notice of the conciliation meeting at the barangay level,
as well as the summons. They insist that private respondent was referring to
a different piece of realty because petitioners actually occupied Lot No. 3568
owned by Nicolas delos Santos under Original Certificate of Title No. F-10418.
Private respondent filed a motion for execution to the court which granted
private respondents motion for execution pending appeal on account of
petitioners' failure to post a supersedeas bond.
ISSUE:
Whether or not the court had acquired jurisdiction despite failure to
serve summons
HELD:
YES. Assuming in gratia argumenti that the statutory norms on service
of summons have not been strictly complied with, still, any defect in form
and in the manner of effecting service thereof were nonetheless erased when
petitioners' counsel moved to re-examine the impugned decision and posed
a subsequent bid on appeal to impede immediate execution. Such demeanor
is tantamount to voluntary submission to the competencia of the court within
the purview of Section 23, Rule 14 of the Revised Rules of Court since any
mode of appearance in court by a defendant or his lawyer is equivalent to
service of summons, absent any indication that the appearance of counsel
for petitioner was precisely to protest the jurisdiction of the court over the
person of defendant. Neither can it be treated that the motion for
reconsideration directed against the unfavorable disposition as a special
appearance founded on the sole challenge on invalid service of summons
since the application therefore raised another ground on failure to state a
cause of action when conciliation proceedings at the barangay level were
allegedly bypassed.
DOCTRINE:
Defendant's voluntary appearance in the action equivalent to
service of summons

Orion Security Corporation vs. Kalfam Enterprises, Inc., G.R. No. 163287, April 27, 2007
QUISUMBING, J
FACTS:
Petitioner Orion Security Corporation is a domestic private corporation
engaged in the business of providing security services. One of its clients is
respondent Kalfam Enterprises, Inc.
Respondent was not able to pay petitioner for services rendered. Petitioner
thus filed a complaint against respondent for collection of sum of money.

- The sheriff tried to serve the summons and a copy of the complaint
on the secretary of respondent's manager. However, respondent's
representatives allegedly refused to acknowledge their receipt. The
summons and the copy of the complaint were left at respondent's office
- When respondent failed to file an Answer, petitioner filed a motion to
declare respondent in default
- The Regional Trial court, denied the motion on the ground that there
was no proper service of summons on respondent
- Petitioner then filed a motion for alias summons, which the trial court
granted. The process server again left the summons and a copy of the
complaint at respondent's office through respondent's security guard, who
allegedly refused to acknowledge their receipt.
- Respondent again failed to file an Answer
- On motion of petitioner, respondent was declared in default. Then,
petitioner was allowed to adduce evidence ex parte.
- Respondent filed a motion for reconsideration of the resolution
declaring it in default. Respondent alleged the trial court did not acquire
jurisdiction over its person due to invalid service of summons. The court
denied the motion for reconsideration

RTC: The trial court rendered a default judgment. Judgment was


rendered in favor of plaintiff Orion Security Corporation and against
defendant Kalfam Enterprises, Inc.,
CA: Reversed the decision of the Regional Trial Court. It held that
summons was not validly served on respondent. The case was remanded to
trial court for further proceedings
SC: Denied the Petition, Sustained decision of CA.
Petitioner contends that the Court of Appeals completely brushed aside
respondent's voluntary appearance in the proceedings of the trial court.
According to petitioner, the trial court acquired jurisdiction over respondent
due to the latter's voluntary appearance in the proceedings before the said
court. Petitioner insists substituted service of summons on respondent's
security guard is substantial compliance with the rule on service of
summons, in view of the exceptional circumstances in the present case.
Respondent, however, counters that the special appearance of its counsel
does not constitute voluntary appearance. Respondent maintains that its
filing of an opposition to petitioner's motion to declare respondent in default
and other subsequent pleadings questioning the trial court's jurisdiction over
it does not amount to voluntary appearance. Respondent stresses it was not
properly served with summons via substituted service since the security
guard on whom it was purportedly served was not the competent person
contemplated by Section 7, Rule 14 of the Rules of Court.
ISSUE: Whether or not the trial court acquired jurisdiction over respondent
either by (1) valid substituted service of summons on respondent; or (2)
respondent's voluntary appearance in the trial court and submission to its
authority
HELD: NO. In case of domestic private juridical entities such as respondent
in the case, Section 11 of Rule 14 states:
SEC. 11. Service upon domestic private juridical entity. When the
defendant is a corporation, partnership or association organized
under the laws of the Philippines with a juridical personality, service
may be made on the president, managing partner, general manager,
corporate secretary, treasurer, or in-house counsel.
As a rule, summons should be personally served on the defendant. It is only
when summons cannot be served personally within a reasonable period of
time that substituted service may be resorted to. In this connection, Section
7 of Rule 14 provides:
SEC. 7. Substituted service. If, for justifiable causes, the defendant
cannot be served within a reasonable time as provided in the
preceding section, service may be effected (a) by leaving copies of
the summons at the defendant's residence with some person of
suitable age and discretion then residing therein, or (b) by leaving the
copies at defendant's office or regular place of business with some
competent person in charge thereof.
Records show that respondent's president, managing partner, general
manager, corporate secretary, treasurer, or in-house counsel never received
the summons against respondent, either in person or by substituted service.

- In case of substituted service, there should be a report indicating that


the person who received the summons in the defendant's behalf was one
with whom the defendant had a relation of confidence ensuring that the
latter would actually receive the summons.
- Note that a party who makes a special appearance in court challenging
the jurisdiction of said court based on the ground of invalid service of
summons is not deemed to have submitted himself to the jurisdiction of the
court.

In the case the petitioner failed to show that the security guard who received
the summons in respondent's behalf shared such relation of confidence that
respondent would surely receive the summons. Hence, the court was unable
to accept petitioner's contention that service on the security guard
constituted substantial compliance with the requirements of substituted
service.
The records also shows that respondent, in its special appearance, precisely
questioned the jurisdiction of the trial court on the ground of invalid service
of summons. Thus, it cannot be deemed to have submitted to said court's
authority.
Since the trial court never acquired jurisdiction over respondent, either by
valid substituted service of summons or by respondent's voluntary
appearance in court and submission to its authority, respondent cannot be
bound by the trial court's judgment ordering it to pay petitioner a sum of
money.

DOCTRINE:
Jurisdiction over the defendants in a civil case is acquired either
through the service of summons upon them or through their
voluntary appearance in court and their submission to its authority.
Summons should be personally served on the defendant.

17.Santos vs. PNOC Exploration Corporation, G.R. No. 170943, September 23, 2008

DOCTRINE:
In any action where the defendant is designated as an unknown owner, or the like, or whenever his
whereabouts are unknown and cannot be ascertained by diligent inquiry,service may, by leave of court,be
effected upon him by publication in a newspaper of general circulation and in such times as the court may
order.

FACTS:
December 23,2002 respondent PNOC filed a complaint for a sum of money against petitioner Santos in
the RTC of Pasig.t The complaint sought to collect the amount of P 698,502.10 representing petitioners
unpaid balance of car loan advanced to him when he was still a member of its board of director.
Personal service of summons to petitioner failed because he could not be located in his last known
address despite earnest efforts to do so.
Respondent caused the publication of summons in Remate, a newspaper of general circulation. On May
20 2003 respondent submitted the affidavit of publication of the advertising manager of remate and an
affivadavit of service of respondents employee to the effect that he sent a copy
of the summons by registered mail to petitioners last known address.

Petitioner failed to answer within prescribed period


Respondent moved the case be set for the reception of its evidence ex parte. Trial court granted and
respondent proceeded with the ex parte presentation and formal offer of its evidence.
Oct 28, 2003 petitioner filed an omnibus motion for reconsideration and admit attached answer . he
sought reconsideration of the September 11,2003 order, alleging that the affidavit of service submitted by
respondent failed to comply with Section 19 rule 14 of ROC as it was not executed by clerk of court.
Petitioner also claimed that he was denied of due process as he was not notified and prayed that the evidence
ex parte be stricken off records.
Respondent opposed and insisted that it complied with the rules on service by publication.

RTC:
Denied petitioners motion for reconsideration on sept 11 2003 order.
It held that the rules did not require the affidavit of complementary service by registered mail to be executed
by clerk of court. It also ruled that due process was observed as copy of September 11,2003 order was mailed
to his last known address.
It also denied the motion to admit petitioners answer because the same was filed way beyond the prescribed
period.
Petitioner assailed September 11 2003 and feb 6 2004 orders of RTC in the court of appeals via petition
for certiorari. Contended that the orders were issued w/ grave abuse of discretion. He imputed the ff errors:
taking cognizance of the case despite lack of jurisdiction due to improper service of summons; failing to
furnish him w/ copies of its orders .

During pendency of petition in CA, rtc rendered its decision and ordered him to pay 698,502.10 plus legal
interest.

CA:
Sustained orders of RTC
Dismissed the petition
Denied reconsideration

Petitioner reiterates the grounds he raised in CA namely lack of jurisdiction over his person due to improper
service of summons. He claims that rule on service by publication under section 14 rule 14 of ROC applies
only to action in rem and not actions in personam.

Issue:
w/n summon was validly served
RULING:
Petition lacks merit. Since the petitioner could not be personally served with summons despite diligent efforts
to locate his whereabouts, respondent sought and was granted leave of court to effect service of summons
upon him by publication in a newspaper of general circulation. Thus petitioner was properly served with
summons by publication.

Petitioner is wrong. The in rem/in personam distinction was significant under the old rule because it was
silent as to the kind of action to which the rule was applicable. Present rule should apply.
Service of summons by publication is proved by affidavit the printer, foreman or principal clerk, or editior,
business or advertising manager of the newspaper which published the summons. The service of summons by
publication is complemented by service of sentence by registered mail to denfendants last known address.
The ROC do not require that the affidavit of complementary service be executed by clerk of court.

Moreover, even assuming that the service of summons was defective, the trial court acquired jurisdiction over
the person of petitioner by his own voluntary appearance in the action against him.
Petitioner voluntarily appeared in the action when he filed the omnibus motion for reconsideration and to
admit attached answer this was equivalent to service of summons and vested the trial court with jusridiction
over the person of petitioner.

PCIB vs. Spouses Wilson Dy Hong Pi et al, G.R. No. 171137, June 5, 2009

FACTS:
Spouses Damian and Tessie Amadeo are indebted to petitioner Philippine Commercial International Bank
as sureties for Streamline Cotton Development Corporation. The promissory notes became due and
demandable, but the Amadeo spouses failed to pay their outstanding obligations despite repeated
demands. As of February 15, 1994, these obligations stood at P10,671,726.61. Petitioner subsequently
discovered that roughly a month before the due date of the promissory notes, the Amadeo spouses
(i) sold three (3) or nearly all of their real properties to respondents, Spouses Wilson and Lolita
Dy and Spouses Primo and Lilia Chuyaco, and
(ii) immediately caused the transfer of the titles covering the parcels of land in favor of the latter.
The consideration for these sales was further alleged to have been grossly insufficient or inadequate.
Believing that the transfers were done in fraud of creditors, petitioner instituted an action for rescission
and damages. The case was then raffled to Branch 133, presided over by Judge Napoleon E. Inoturan.
Upon service of summons on the Amadeo spouses, the latter filed a Motion to Dismiss on the ground that
the Complaint violated the explicit terms of Supreme Court Circular No. 04-94, as the Verification was
executed by petitioners legal counsel.

Petitioner filed its Opposition to the Motion to Dismiss, where it argued that (i) the rule cited by the
Amadeo spouses should not be applied literally, and (ii) at any rate, petitioners legal counsel was
authorized by petitioner to institute the Complaint. On February 4, 1995, the trial court issued an Order
denying the Motion to Dismiss.

The Amadeo spouses subsequently filed an Answer where they alleged that petitioner failed to release the
loans to Streamline Cotton Development Corporation on the agreed date, thereby constraining them to
incur loans from third parties at high interest rates to keep the company afloat. These loans were covered
by postdated checks which had to be funded once the obligations fell due, lest the Amadeo spouses face
criminal prosecution. In order to pay the said loans, they thus had to sell the properties subject of this
case. The Amadeo spouses further claimed that the purchase price for the three (3) parcels of land was the
fair market value, and that they had other personal and real properties which may be availed of to answer
for their obligations. In their Counterclaim, they prayed for moral damages of P200,000.00, attorneys
fees and expenses of litigation. Petitioner filed its Reply and Answer to Counterclaim on March 8, 1995.

On September 13, 1995, petitioner filed an Ex Parte Motion for Leave to Serve Summons by Publication
on Spouses Dy and Chuyaco. However, this was denied in an Order dated September 14, 1995 on the
ground that summons by publication cannot be availed of in an action in personam.

Later on Defendant Spouses Amadeo, Dy and Chuyaco then filed an "Omnibus Motion to Dismiss and to
Annul All the Proceedings Taken Against the Defendants on December 11, 1998, in which motion they
questioned the jurisdiction of the trial court over their persons. Petitioner filed its Opposition thereto on
February 15, 1999. Defendants filed their Reply on March 10, 1999, while petitioner filed its Rejoinder
on June 9, 1999. Said motion, however, was merely noted without action in an August 2, 2001 Order
since its notice of hearing was addressed only to the Clerk of Court.

It appears from the Motion that its Notice of Hearing is not addressed to any of the parties concerned as
otherwise required by Rule 15 Section 5 of the 1997 Rules of Civil Procedure. Such being the case, the
Motion is deemed a mere scrap of paper as held in Provident International Resources Corporation vs.
Court of Appeals, 259 SCRA 510. Spouses Dy and Chuyaco subsequently filed a "Motion to Dismiss (for
Lack of Jurisdiction)" on February 18, 2002, in which motion they essentially accused petitioner of not
causing summons to be served upon them and losing interest in the case. Petitioner filed its Opposition
thereto, and in an April 23, 2002 Order, the trial court denied the Motion to Dismiss on account of (i)
petitioners Compliance and Manifestation that it had not lost interest in pursuing the case, and (ii) the
Motion for Leave of Court to Serve Summons by Publication that petitioner filed simultaneously with its
Opposition. On April 24, 2002, the Motion for Leave of Court to Serve Summons by Publication was
submitted for resolution.

This was opposed by petitioner, arguing that it had already filed a motion for the service of summons by
publication, but the trial court had yet to act on it. On July 25, 2003, this Motion was submitted for
resolution. On November 4, 2003, Spouses Dy and Chuyaco personally, and not through their counsel,
filed a "Motion for Inhibition without submitting themselves to the jurisdiction of this Honorable Court,"

RTC - ruled that Spouses Dy and Chuyaco have voluntarily submitted themselves to the jurisdiction of
the trial court, and gave them fifteen (15) days from receipt of the Order within which to file their
respective answers

CA Null & void RTC - in this case at bar, the "two motions to dismiss" and the "motion to inhibit" may
be treated as "special appearance" since they all included the issue of lack of jurisdiction due to non-
service of summons. They did not constitute as submitting the movant to the jurisdiction of the court.
There being no proper service of summons on petitioners and there being no voluntary appearance by
petitioners, the trial court did not acquire jurisdiction over the persons of the defendants, the herein
petitioners. Any proceeding undertaken by the trial court against them would consequently be null and
void.

ISSUE:
Has there been voluntary appearance on the part of respondent Spouses Dy and Chuyaco as to confer the
trial court with jurisdiction over their persons?

HELD:
SC reversed the decision of the CA. Measured against these standards, it is readily apparent that
respondents have acquiesced to the jurisdiction of the trial court as early as June 17, 2003, when they
filed their Motion to Dismiss for Failure to Prosecute. Significantly, the motion did not categorically and
expressly raise the jurisdiction of the court over their persons as an issue. It merely (i) "reminded" the
court of its purportedly conflicting Orders in respect of summons by publication, (ii) alleged that because
petitioner "has not lifted a finger to pursue this case against movants-defendants," the case may be
dismissed for failure to prosecute, and (iii) prayed additionally for the deletion of the Notice of Lis
Pendens indicated at the back of the transfer certificates of title covering the subject properties. We note,
furthermore, that the motion failed to qualify the capacity in which respondents were appearing and
seeking recourse.

DOCTRINE:
VOLUNTARY APPEARANCE
A voluntary appearance is a waiver of the necessity of a formal notice. An appearance in whatever form,
without explicitly objecting to the jurisdiction of the court over the person, is a submission to the
jurisdiction of the court over the person. While the formal method of entering an appearance in a cause
pending in the courts is to deliver to the clerk a written direction ordering him to enter the appearance of
the person who subscribes it, an appearance may be made by simply filing a formal motion, or plea or
answer. This formal method of appearance is not necessary. He may appear without such formal
appearance and thus submit himself to the jurisdiction of the court. He may appear by presenting a
motion, for example, and unless by such appearance he specifically objects to the jurisdiction of the court,
he thereby gives his assent to the jurisdiction of the court over his person.

NM Rothschild & Sons vs. Lepanto Consolidated Mining Company, G.R. No. 175799, November 28,
2011

FACTS: Respondent Lepanto Consolidated Mining Company filed with (RTC) of Makati City a
Complaint against petitioner NM Rothschild & Sons (Australia) praying for a judgment declaring the loan
and hedging contracts between the parties void for being contrary to Article 2018 of the Civil Code of the
Philippines and for damages. The Complaint was raffled to Branch 150. Upon respondents (plaintiffs)
motion, the trial court authorized respondents counsel to personally bring the summons and Complaint to
the Philippine Consulate General in Sydney, Australia for the latter office to effect service of summons on
petitioner (defendant). Petitioner filed a Special Appearance With Motion to Dismiss praying for the
dismissal of the Complaint on the following grounds: (a) the court has not acquired jurisdiction over the
person of petitioner due to the defective and improper service of summons; (b) the Complaint failed to
state a cause of action and respondent does not have any against petitioner; (c) the action is barred by
estoppel; and (d) respondent did not come to court with clean hands. Petitioner filed two Motions: (1) a
Motion for Leave to take the deposition of Mr. Paul Murray (Director, Risk Management of petitioner)
before the Philippine Consul General; and (2) a Motion for Leave to Serve Interrogatories on respondent.
Trial court issued an Order denying the Motion to Dismiss. According to the trial court, there was a
proper service of summons through the (DFA) on account of the fact that the defendant has neither
applied for a license to do business in the Philippines, nor filed with the (SEC) a Written Power of
Attorney designating some person on whom summons and other legal processes maybe served and held
that the Complaint sufficiently stated a cause of action. The other allegations were brushed aside as
matters of defense which can best be ventilated during the trial.

Petitioner filed a Motion for Reconsideration. The trial court issued an Order denying the Motion for
Reconsideration and disallowed the twin Motions for Leave to take deposition and serve written
interrogatories. Petitioner sought redress via a Petition for Certiorari with the CA, alleging that the trial
court committed grave abuse of discretion in denying its Motion to Dismiss. CA rendered the assailed
Decision dismissing the Petition for Certiorari. CA ruled that since the denial of a Motion to Dismiss is an
interlocutory order, it cannot be the subject of a Petition for Certiorari, and may only be reviewed in the
ordinary course of law by an appeal from the judgment after trial. CA denied the petitioners Motion for
Reconsideration. The trial court issued an Order directing respondent to answer some of the questions in
petitioners Interrogatories to Plaintiff. Petitioner filed the present petition assailing the Decision and the
Resolution of the CA. Arguing that petitioner insists that: (a) an order denying a motion to dismiss may be
the proper subject of a petition for certiorari; and (b) the trial court committed grave abuse of discretion in
not finding that it had not validly acquired jurisdiction over petitioner and that the plaintiff had no cause
of action. Respondent posits that: (a) the present Petition should be dismissed for not being filed by a real
party in interest and for lack of a proper verification and certificate of non-forum shopping; (b) the Court
of Appeals correctly ruled that certiorari was not the proper remedy; and (c) the trial court correctly
denied petitioners motion to dismiss.

ISSUE:
Whether or not the court acquire jurisdiction over petitioner.

HELD:
Yes.
Respondent argues that extraterritorial service of summons upon foreign private juridical entities is not
proscribed under the Rules of Court. Section 15, Rule 14, however, is the specific provision dealing
precisely with the service of summons on a defendant which does not reside and is not found in the
Philippines, it is apparent that there are only four instances wherein a defendant who is a non-resident and
is not found in the country may be served with summons by extraterritorial service, to wit: (1) when the
action affects the personal status of the plaintiffs; (2) when the action relates to, or the subject of which is
property, within the Philippines, in which the defendant claims a lien or an interest, actual or contingent;
(3) when the relief demanded in such action consists, wholly or in part, in excluding the defendant from
any interest in property located in the Philippines; and (4) when the defendant non-resident's property has
been attached within the Philippines.

In these instances, service of summons may be effected by (a) personal service out of the country, with
leave of court; (b) publication, also with leave of court; or (c) any other manner the court may deem
sufficient.

The Complaint in the case at bar is an action to declare the loan and Hedging Contracts between the
parties void with a prayer for damages. It is therefore an action in personam, unless and until the plaintiff
attaches a property within the Philippines belonging to the defendant, in which case the action will be
converted to one quasi in rem.

Since the action involved in the case at bar is in personam and since the defendant, petitioner
Rothschild/Investec, does not reside and is not found in the Philippines, the Philippine courts cannot try
any case against it because of the impossibility of acquiring jurisdiction over its person unless it
voluntarily appears in court.

SEC. 20. Voluntary appearance. The defendant's voluntary appearance in the action shall be equivalent to
service of summons. The inclusion in a motion to dismiss of other grounds aside from lack of jurisdiction
over the person of the defendant shall not be deemed a voluntary appearance. (Emphasis supplied.) Thus,
the ruling in La Naval and Section 20, Rule 14, this Court ruled that seeking affirmative relief in a court is
tantamount to voluntary appearance therein.

The Court ruled that petitioner, by seeking affirmative reliefs from the trial court, is deemed to have
voluntarily submitted to the jurisdiction of said court.

DOCTRINE: Extraterritorial Service of summons applies only when where the action is in rem or quasi
in rem but not if an action is in personam.
Seeking affirmative relief in a court is tantamount to voluntary appearance therein.

4. Motions (Rule 15)

Lanto vs. Dimaporo, 16 SCRA 599 (1966) (Included the other issues#2 and #3)
PONENTE: SANCHEZ, J p:
DOCTRINE:
Statutory requirement of hearing on a motion as to enable the suitors to adduce evidence in support of their opposing
claims
Despite no previous notice of hearing of the motion to dismiss still this alleged defect was fully cured by his motion
for reconsideration - what the law prohibits "is not the absence of previous notice, but the absolute absence thereof
and lack of opportunity to be heard (De Borja vs Tan)
FACTS:
Resolution No. 7, Series of 1960, adopted by the Provincial Board of Lanao del Norte on January 6, 1960, reverted
the 1960-1961 salary appropriation for the position of Assistant Provincial Assessor to the general fund. In effect,
that position then held by petitioner was abolished. He appealed to the commissioner of Civil Service, the Secretary
of Finance, the Secretary of Justice, the Auditor General and the President of the Philippines were of no avail.

Petitioner came to court on mandamus. He sought, (a) the annulment of the resolution aforesaid, (b) the restoration
of the salary appropriation; (c) his reinstatement, and (d) payment of back salaries and damages.
Respondents moved to dismiss. Ground therefor is lack of cause of action.
February 1, 1961 - The motion to dismiss was filed
February 10, 1961 - motion to dismiss was set for hearing.
February 8, 1961 - petitioner's counsel telegraphed the court, "Request postponement motion dismissal till
written opposition filed." He did not appear at the scheduled hearing.
March 4, 1961 he followed up his wire, with his written opposition to the motion to dismiss. Adverting to
the 5-page motion to dismiss and the 6-page opposition thereto, we find that the arguments pro and con on
the question of the board's power to abolish petitioner's position minutely discussed the problem and
profusely cited authorities.
May 15, 1961, 8-page court order recited at length the said arguments and concluded that petitioner made
no case.
The Court below granted the motion, dismissed the petition. The motion to reconsider failed. Hence this appeal.
CIVIL PROCEDURE ISSUE
1. Whether or not dismissal order issued "without any hearing on the motion to dismiss" is void (YES
except if it was shown that there was previous notice)
HELD
The statutory requirement of hearing on a motion as to enable the suitors to adduce evidence in support of their
opposing claims. But here the motion to dismiss is grounded on lack of cause of action. Existence of a cause of
action or lack of it is determined by a reference to the facts averred in the challenged pleading. The question raised
in the motion is purely one of law. This legal issue was fully discussed in said motion and the opposition thereto.
Besides, there is respondents' vehement claim that the motion to dismiss (originally set for February 10) has been
actually reset for hearing and that there was no appearance on petitioner's behalf. Petitioner now disputes this fact
but his telegram of February induces rational belief that all he wanted was to be given an opportunity to meet
argument with argument by means of his "written opposition". He filed that opposition. It was adversely affected by
the court's order, he sought reconsideration thereof. In that motion to reconsider he squarely brought to the court's
attention his present averment that "no hearing was conducted on the motion to dismiss". Implicit in this
pronouncement is that there was such a second hearing and petitioner was there given an opportunity to argue his
case.
In the Ongsiako (Ongsiako vs Natividad) case "it is presumed that the proceeding was regular and
that all the steps required by law to be taken before the court could validly act thereon, had been
so taken". In the absence of a clear showing to the contrary, the regularity of the court
proceedings" is to be upheld.
Petitioner offered no showing of irregularity.
Despite no previous notice of hearing of the motion to dismiss still this alleged defect was fully cured by his motion
for reconsideration aforesaid (filed June 24, 1961), which was overruled.
De Borja, et al. vs. Tan, etc., et al., 93 Phil. 167, 171, "the interested parties were given their gay in
court, and the previous objection of lack of notice or opportunity to be heard fully met". As the De
Borja decision points out, what the law prohibits "is not the absence of previous notice, but the
absolute absence thereof and lack of opportunity to be heard
OTHER ISSUES
2. Whether or not there was valid abolition of said position (YES)
HELD:
The job of assistant provincial assessor is a creation of the provincial board. Petition concedes that, in the law of
public administration, the power to create normally implies the power to abolish. He cites the Briones case: There,
the reasons given for the abolition of the positions of petitioners therein, namely, "economy and efficiency", were
found to be transparent and unimpressive and to "constitute a mere subterfuge for the removal without cause of the
said appellees, in violation of the security of Civil Service tenures as provided by the Constitution." And this,
because in said case it was shown that the abolition of the 32 positions in the city mayor's office and the office of the
municipal board was preceded by the creation of 35 positions in the city mayor's office, calling for an annual outlay
of P68,100.00. Briones decision is not properly to be read as controlling. For, the wholesale creation and abolition of
offices in almost the same breath there, are not here obtaining.
Petition avers that "with intent of circumventing the constitutional prohibition that 'no officer or employee in the
civil service shall be removed or suspended except for cause as provided by law'", respondents "maliciously and
illegally for the purpose of political persecution and political vengeance, reverted the fund of the salary item . . . and
furthermore eliminated or abolished the said position effective July 1, 1960". This statement by itself submits no
justiciable controversy for the court's determination; it is not an allegation of ultimate facts; it is a mere conclusion
of law unsupported by factual premise. There is the presumption that official duty had been regularly performed by
the members of the provincial board.
Petitioner also advance the theory that the provincial board resolution abolishing his position is not effective,
because it did not bear the stamp of approval of the Secretary of Finance, citing Republic Act No. 1062. The
necessity for such approval, however, was done away with by the passage of Republic Act No. 2264, otherwise
known as the Local Autonomy Act. Section 3 (a) of the Local Autonomy Act gives the provincial board the power to
appropriate money having in view the general welfare of the province and its inhabitants. Concomitant to this
express power is the implied power to withdraw unexpended money already appropriated.
We observe that the sole authority given by the Autonomy Act to the Secretary of Finance is to review provincial
and city budgets and city and municipal tax ordinances. "SEC. 12. Rules for the interpretation of the Local
Autonomy Act. 1. Implied power of a province, a city or municipality shall be liberally construed in its favor.
Any fair and reasonable doubt as to the existence of the power should be interpreted in favor of the local
government and it shall be presumed to exist."
Autonomy is the underlying rationale of the Local Autonomy Act. By the statute itself no interpretation thereof
should be indulged in which would cripple the board's powers.
OTHER ISSUE
3. Whether or not Mandamus should lie (NO)
HELD:
By section 3, Rule 65 of the Rules of Court, mandamus will issue if the performance of an act is one "which the law
specifically enjoins as a duty resulting from an office, trust or station". Mandamus compels performance of a
ministerial duty. That duty must be clear and specific. But mandamus is not meant to control or review the normal
exercise of judgment or discretion, which is the case here. The respondent board, therefore, cannot be compelled to
restore petitioner's item in the budget.
The order appealed from is not legally infirm. We accordingly vote to affirm the same. Costs against appellant. So
ordered.

Vlason Enterprises Corp. vs. CA, 330 SCRA 26 (1999)

Facts:
Poro Point Shipping Services, then acting as the local agent of Omega Sea Transport Company of
Honduras & Panama, a Panamanian company, requested permission for its vessel M/V Star Ace, which
had engine trouble, to unload its cargo and to store it at the Philippine Ports Authority (PPA) compound in
San Fernando, La Union while awaiting transshipment to Hongkong. Despite approval by the Bureau of
Customs, the vessel along with its cargos were seized. A notice of hearing was served on its consignee,
Singkong Trading Co. of Hongkong, and its shipper, Dusit International Co., Ltd. of Thailand. |||
While the proceedings were pending, La Union was hit by 3 typhoons and the vessel was abandoned.
Frank Cadacio, entered into a salvage agreement with private respondent to secure and repair the vessel
at the agreed consideration of $1 million and "fifty percent (50%) [of] the cargo after all expenses, cost
and taxes."||| Finding that no fraud was committed, the District Collector of Customs, Aurelio M. Quiray,
lifted the warrant of seizure. However, in a Second Indorsement, then Customs Commissioner Salvador
M. Mison declined to issue a clearance for Quiray's Decision; instead, he forfeited the vessel and its
cargo in accordance with Section 2530 of the Tariff and Customs Code. Accordingly, acting District
Collector of Customs John S. Sy issued a Decision decreeing the forfeiture and the sale of the cargo in
favor of the government||

Private Respondent Duraproof Services filed with the Regional Trial Court of Manila a Petition for
Certiorari, Prohibition and Mandamus assailing the actions of Commissioner Mison and District
Collector Sy. Private respondent amended its Petition to include former District Collector Quiray; PPA Port
Manager Adolfo Ll. Amor Jr; Petitioner Vlason Enterprises; Singkong Trading Company; Banco Du Brasil;
Dusit International Co., Inc.; Thai-Nan Enterprises Ltd. and Thai-United Trading Co., Ltd.

Only private respondent, Commissioner Mison, Omega and M/V Star Ace appeared in the next pretrial
hearing; thus, the trial court declared the other respondents in default and allowed private respondent to
present evidence against them.
Cesar Urbino, general manager of private respondent, testified and adduced evidence against the other
respondents, including herein petitioner. As regards petitioner, he declared: Vlason Enterprises
represented by Atty. Sy and Vicente Angliongto thru constant intimidation and harassment of utilizing the
PPA Management of San Fernando, La Union x x x further delayed, and [private respondent] incurred
heavy overhead expenses due to direct and incidental expenses xxx causing irreparable damages of
about P3,000,000 worth of ship tackles, rigs, and appurtenances including radar antennas and
apparatuses, which were taken surreptitiously by persons working for Vlason Enterprises or its agents.

Based on the allegations, prayer and evidence adduced, both testimonial and documentary, the
Court is convinced, that, indeed, defendants/respondents are liable to [private respondent] in the
amount as prayed for in the petition.
Private respondent moved for the execution of judgment, claiming that the trial court Decision had already
become final and executory. The Motion was granted and a Writ of Execution was issued.

petitioner filed, by special appearance, a Motion for Reconsideration, on the grounds that it was
allegedly not impleaded as a defendant, served summons or declared in default; that private
respondent was not authorized to present evidence against it in default; that the judgment in default was
fatally defective, because private respondent had not paid filing fees for the award; and that private
respondent had not prayed for such award. private respondent opposed the Motion, arguing that it was a
mere scrap of paper due to its defective notice of hearing.

private respondent filed with the Court of Appeals (CA) a Petition for Certiorari and Prohibition to
nullify the cease and desist orders of the trial court. Respondent Court issued a TEMPORARY
RESTRAINING ORDER is hereby ISSUED enjoining the respondent Judge, the Honorable Arsenio M.
Gonong, from enforcing and/or implementing the Orders respondent Sheriff to cease and desist from
implementing the writ of execution and the return thereof.

However, petitioner received from Camagon a notice to pay private respondent P3 million to satisfy the
trial court Decision. Not having any knowledge of the CA case to which it was not impleaded, petitioner
filed with the trial court a Motion to Dismiss.

Petitioner also filed a special appearance before the CA. It prayed for the lifting of the levy on its
properties or, alternatively, for a temporary restraining order against their auction until its Motion for
Reconsideration was resolved by the trial court.

Acting on petitioners Motion for Reconsideration, the trial court reversed its Decision, Judgment by
Default is hereby reconsidered and SET ASIDE.
". . . [T]hat . . . Motion For Reconsideration [of the petitioner] was filed on March 14, 1991 (See:
page 584, records, Vol. 2) indubitably showing that it was seasonably filed within the 15-day time-frame.
Therefore, . . . said default-judgment ha[d] not yet become final and executory when the Writ of
Execution was issued on March 13, 1991 . . . The rules [provide] that [the e]xecution shall issue as a
matter of right upon the expiration of the period of appeal from a judgment if no appeal has been duly
perfected (Sec. 1, R-39, RRC). That being the case, VEC has all the right to file as it did . . . the
aforementioned reconsideration motion calling [the] attention of the Court and pointing therein its
supposed error and its correction if, indeed, any [error was] committed |||

Judge Pardo of the Regional Trial Court of Manila issued an Order annulling the Sheriffs Report/Return,
and all proceedings taken by Camagon.
The CA granted private respondents Motion to file a Supplemental Petition impleading petitioner. In view
of the rampant pilferage of the cargo deposited at the PPA compound, private respondent obtained from
the appellate court a Writ of Preliminary Injunction.

On August 28, 1995, the Regional Trial Court of Manila, issued a Writ of Possession which resulted
in private respondent taking possession of petitioners barge Lawin (formerly Sea Lion 2).
Hence, this Petition
Issue: Whether or not the decision of the RTC became final and executory because it 'was never disputed
or appealed'.

Ruling: NO,
A judgment becomes "final and executory" by operation of law. Its finality becomes a fact when
the reglementary period to appeal lapses, and no appeal is perfected within such period. The
admiralty case filed by private respondent with the trial court involved multiple defendants. This
being the case, it necessarily follows that the period of appeal of the February 18, 1991 RTC
Decision depended on the date a copy of the judgment was received by each of the defendants.
Elsewise stated, each defendant had a different period within which to appeal, depending on the
date of receipt of the Decision|

petitioner filed a timely Motion for Reconsideration with the trial court, thirteen days after it received the
Decision or two days before the lapse of the reglementary period to appeal. A motion for reconsideration
tolls the running of the period to appeal. 66 Thus, as to petitioner, the trial court decision had not attained
finality.

Exception to the Rule on Notice of Hearing


Respondent Court and private respondent argue that, although timely filed, petitioner's Motion for
Reconsideration was a mere scrap of paper, because (1) it did not contain a notice of hearing addressed
to the current counsel of private respondent, and (2) the notice of hearing addressed to and served on
private respondent's deceased counsel was not sufficient. Admittedly, this Motion contained a notice of
hearing sent to Atty. Jesus C. Concepcion who, according to private respondent, had already died and
had since been substituted by its new counsel, Atty. Domingo Desierto. Therefore, the appellate court
ruled that the said Motion did not toll the reglementary period to appeal and that the trial court Decision
became final.
This Court disagrees. Rule 15 of the Rules of Court states:
"SECTION 4. Notice. Notice of a motion shall be served by the applicant to all parties concerned, at
least three (3) days before the hearing thereof, together with a copy of the motion, and of any affidavits
and other papers accompanying it. The court, however, for good cause may hear a motion on shorter
notice, specially on matters which the court may dispose of on its own motion.
SECTION 5. Contents of notice. The notice shall be directed to the parties concerned, and shall state
the time and place for the hearing of the motion." 67
Ideally, the foregoing Rule requires the petitioner to address and to serve on the counsel of private
respondent the notice of hearing of the Motion for Reconsideration. The case at bar, however, is far from
ideal. First, petitioner was not validly summoned and it did not participate in the trial of the case in the
lower court; thus, it was understandable that petitioner would not be familiar with the parties and their
counsels. Second, Atty. Desierto entered his appearance only as collaborating counsel, 68 who is
normally not entitled to notices even from this Court. Third, private respondent made no manifestation on
record that Atty. Concepcion was already dead. Besides, it was Atty. Concepcion who signed the
Amended Petition, wherein petitioner was first impleaded as respondent and served a copy thereof.
Naturally, petitioner's attention was focused on this pleading, and it was within its rights to assume that
the signatory to such pleading was the counsel for private respondent.
The Court has consistently held that a motion which does not meet the requirements of Sections 4 and 5
of Rule 15 of the Rules of Court is considered a worthless piece of paper, which the clerk of court has no
right to receive and the trial court has no authority to act upon. Service of a copy of a motion containing a
notice of the time and the place of hearing of that motion is a mandatory requirement, and the failure of
movants to comply with these requirements renders their motions fatally defective. 69 However, there are
exceptions to the strict application of this rule. These exceptions are as follows: 70
". . . Liberal construction of this rule has been allowed by this Court in cases (1) where a rigid application
will result in a manifest failure or miscarriage of justice; 71 especially if a party successfully shows that the
alleged defect in the questioned final and executory judgment is not apparent on its face or from the
recitals contained therein; (2) where the interest of substantial justice will be served; 72 (3) where the
resolution of the motion is addressed solely to the sound and judicious discretion of the court; 73 and (4)
where the injustice to the adverse party is not commensurate [to] the degree of his thoughtlessness in not
complying with the procedure prescribed." 74
The present case falls under the first exception. Petitioner was not informed of any cause of action or
claim against it. All of a sudden, the vessels which petitioner used in its salvaging business were levied
upon and sold in execution to satisfy a supposed judgment against it. To allow this to happen simply
because of a lapse in fulfilling the notice requirement which, as already said, was satisfactorily
explained would be a manifest failure or miscarriage of justice.

Doctrine: A notice of hearing is conceptualized as an integral component of


procedural due process intended to afford the adverse parties a chance to
be heard before a motion is resolved by the court. Through such notice, the
adverse party is permitted time to study and answer the arguments in the
motion.

Verily, the notice requirement is not a ritual to be followed blindly.


Procedural due process is not based solely on a mechanistic and literal
application that renders any deviation inexorably fatal.Instead, procedural
rules are liberally construed to promote their objective and to assist in
obtaining a just, speedy and inexpensive determination of any action and
proceeding. For the foregoing reasons, we believe that Respondent Court
committed reversible error in holding that the Motion for Reconsideration
was a mere scrap of paper.

|||

Vette Industrial Sales, Co., Inc. vs. Cheng, G.R.No. 170232-170301, December 5, 2006
Facts:
Sui Soan S. Cheng in his complaint for specific performance and damages against petitioners stated that
he executed a Deed of Assignment, where he transferred his 40,000 shares in the company in favor of
petitioners. To implement the Deed of Assignment, the company acknowledged in a Memorandum of
Agreement (MOA), that it owed him P6.8 million pesos, plus insurance proceeds amounting to
P760,000.00 and a signing bonus of P300,000.00. Thereafter, he was issued 48 postdated checks but
after the 11th check, the remaining checks were dishonored by the bank. Sui also claimed that petitioners
did not remit to him the insurance proceeds, thus breaching their obligation under the MOA which entitled
him to moral and exemplary damages, and attorneys fees.
In their Answer With Compulsory Counterclaim, petitioners alleged that Sui sold his shares for only P1.00
per share which they already paid; that the MOA was unenforceable because it was executed without
authorization from the board of directors; that the MOA was void for want of consideration; and that
petitioner Kenneth Tan executed the MOA after Sui issued threats and refused to sign the waiver and
quitclaim.
Sui thereafter filed a Motion to Set Pre-trial on December 16, 2003. Petitioners received the motion but
they did not attend because there was no notice from the Court setting the pre-trial date. petitioners
received two orders from the trial court. The first Order allowed Sui to present evidence ex-parte, while
the second Order revoked the first order after the trial court noted that what was set for consideration on
December 16, 2003 was merely a motion to set pre-trial. Thus, the trial court reset the pre-trial on January
15, 2004 but it was postponed and moved to May 21, 2004. On said date, Sui and his counsel,Atty.
Ferrer, failed to appear. Consequently, the trial court ordered the dismissal of the case without
prejudice on the part of petitioners to present and prove their counterclaim and set the hearing for
reception of evidence on June 22, 2004

Atty. Ferrer filed a Manifestation and Motion for Reconsideration of the order of dismissal,
explaining that he arrived late for the hearing because he had to drop by his office to get the case
folder because he had just arrived from South Cotabato where he served as Chief Counsel in the
Provincial Board of Canvassers for Governor Datu Pax Mangudadatu and Congressman Suharto
Mangudadatu.

petitioners asserted that the motion for reconsideration be denied outright because (1) Sui did not comply
with the three-day notice rule which is mandatory under Section 4, Rule 15 of the Rules of Court
considering that petitioners received the manifestation and motion for reconsideration only one day prior
to the date of hearing of the motion for resolution, thus the same must be treated as a mere scrap of
paper; (2) the trial court did not comply with Section 6 of Rule 15 of the Rules when it acted on the
manifestation and motion of Sui despite the latters failure to submit proof of receipt by petitioners of the
manifestation and motion; (3) the negligence of counsel binds the client, thus, when Atty. Ferrer arrived
late for the hearing, the trial court correctly dismissed the complaint; and (4) the explanation of Atty. Ferrer
is unacceptable because traffic gridlocks are daily events in the metropolis, thus, Atty. Ferrer should have
left his place early.

Sui averred that the motion complied with Section 5 of Rule 15 of the Rules and that the setting of the
hearing of the motion on May 28, 2004 was within the three day period for it was filed on May 25, 2004.

Trial Court: granted Suis motion for reconsideration and set aside the dismissal of the complaint
prescinding with such ruling and in the interest of substantial justice, plaintiffs motion is
GRANTED and the order dated May 21, 2004 is hereby lifted and set aside with the warning that any
delay in this proceedings will not be countenanced by the Court. The Motion for Reconsideration filed
by petitioners was denied by the trial court.

CA: Petitioners filed a Petition for Certiorari with the Court of Appeals which granted the petition.
UPON THE VIEW WE TAKE OF THIS CASE, THUS, the writ applied for is partly
GRANTED. The assailed orders must be, as they hereby are, VACATED and SET ASIDE, and another
hereby issued dismissing the instant complaint, but without prejudice. This means that the complaint can
be REINSTATED. On the other hand, petitioners are hereby given leave to present before the Trial Court
evidence of their counterclaim.Without costs in this instance.
The Court of Appeals noted that both Atty. Ferrer and Sui were not in attendance at the pre-trial
conference; that Section 5 of Rule 18 mentions only the effect of the failure to appear on the part of the
plaintiff but is silent on the effect of failure of the partys counsel to appear at the pre-trial; that the
Manifestation and Motion for Reconsideration mentioned only the reasons why Atty. Ferrer was absent
and that there was no explanation for Suis nonappearance. Thus, based on these circumstances, the Court
of Appeals held that dismissal of the case is proper but without prejudice to the filing of a new action.

Both parties moved for reconsideration but the same were jointly denied in a Resolution dated October
27, 2005.
Hence, these consolidated Petitions.

Issue: Whether or not Suis motion for reconsideration to set aside the order of dismissal of the complaint
for non-appearance should be granted.

Ruling: Yes.

When the Court of Appeals held that the case is dismissible because Sui did not attend the pre-trial
conference, it failed to consider the explanation of Atty. Ferrer that Sui executed a Special Power of
Attorney in his behalf and that he was not absent on the scheduled pre-trial but was only late.
Under Section 4 of Rule 18 of the Rules, the non-appearance of a party at the pre-trial may be excused
when there is a valid cause shown or when a representative shall appear in his behalf, and is fully
authorized in writing to enter into an amicable settlement, to submit to alternative modes of dispute
resolution, and to enter into stipulations or admissions of facts and of documents. Although Sui was
absent during the pre-trial, Atty. Ferrer alleged that he was fully authorized to represent Sui. Moreover, it
is not entirely accurate to state that Atty. Ferrer was absent during the pre-trial because he was only late,
the reasons for which he explained in his Manifestation and Motion for Reconsideration. The
circumstances attendant in the instant case compel this Court to relax the rules of procedure in the
interest of substantial justice.

DOCTRINE: It is the policy of the Court to afford party-litigants the


amplest opportunity to enable them to have their cases justly
determined, free from the constraints of technicalities. It should be
remembered that rules of procedure are but tools designed to
facilitate the attainment of justice, such that when rigid application of
the rules tend to frustrate rather than promote substantial justice, this
Court is empowered to suspend their operation

Boiser vs. Aguirre, Jr., 458 SCRA 430


PONENTE: CHICO-NAZARIO, J.:

FACTS:
The instant administrative case arose from the complaint of Alfredo G. Boiser filed with the Office of the
Court Administrator (OCA) charging Judge Jose Y. Aguirre, Jr., Regional Trial Court (RTC) of Himamaylan
City, Negros Occidental, Branch 55, with Grave Abuse of Discretion and Gross Ignorance of the Law.
Complainant Alfredo Boiser was the plaintiff in an ejectment case filed before the Municipal Trial Court
(MTC) of Himamaylan City, Negros Occidental. On 11 July 2003, the MTC rendered a decision in favor of
complainant, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendant as follows:
1) For the defendant to vacate subject land known as Lot No. 2023 situated at Brgy. Candumarao, Hinigaran,
Negros Occiental, consisting of 5.5536 hectares leased by the plaintiff from Mary Nonasco and Ofelia Donado,
heirs of the registered owners, the late spouses Narciso Gayares and Paz Nava, and to peacefully turn over
possession thereof to the plaintiff;
2) For the defendant to pay plaintiff the amount of P200,000.00 by way of actual damages;
3) For defendant to pay plaintiff attorneys fees in the amount of P10,000.00 plus P1,000.00 as appearance fee
and to pay the cost.
The writ of preliminary injunction issued by the Court is hereby ordered dismissed.

The case was appealed to the RTC of Negros Occidental, Branch 55.
On 15 October 2003, defendant-appellant Salvador Julleza filed a motion to release bond on the ground that
the MTC of Hinigaran, Negros Occidental, in its decision dated 11 July 2003, had already resolved the writ of
preliminary injunction without mentioning the applicants liability.
On 16 October 2003, respondent judge granted the motion
Complainant alleged that the issuance by respondent judge of the Order dated 16 October 2003 is
indicative of his ignorance of the law considering that the motion did not state that he was
furnished a copy of the motion thereby depriving him of his right to due process. He also averred
that the motion was a mere scrap of paper for failure to state the time and date of hearing. He
further alleged that respondent manifested gross ignorance when he resolved to grant the motion
to release the injunction bond considering that the same was meant to answer for damages that
he may suffer due to defendants continued illegal possession of the land.

Complainant alleged that the issuance by respondent judge of the Order dated 16 October 2003 is
indicative of his ignorance of the law considering that the motion did not state that he was
furnished a copy of the motion thereby depriving him of his right to due process. He also averred
that the motion was a mere scrap of paper for failure to state the time and date of hearing. He
further alleged that respondent manifested gross ignorance when he resolved to grant the motion
to release the injunction bond considering that the same was meant to answer for damages that
he may suffer due to defendants continued illegal possession of the land.

OCA required respondent to file his comment.

Respondent judge maintained that the filing of the administrative complaint against him is hasty
and uncalled for. He said there must have been a miscommunication between the complainant
and his counsel because had either of them exerted effort to find out the result of the appealed
case, they would have discovered that he affirmed in toto the decision of the lower court in favor
of the complainant.

complainant filed a motion to withdraw complaint.


OCA submitted its recommendation:
recommending the dismissal of the complaint.
Prefatorily, the Court must reiterate the rule that mere desistance on the part of the complainant does not
warrant the dismissal of an administrative complaint against any member of the bench. The withdrawal of
complaints cannot divest the Court of its jurisdiction nor strip it of its power to determine the veracity of the
charges made and to discipline, such as the results of its investigation may warrant, an erring respondent.
The courts interest in the affairs of the judiciary is a paramount concern that must not know bounds. Anent
respondents retirement on 01 November 2004, it has been settled that the Court is not ousted of its
jurisdiction over an administrative case by the mere fact that the respondent public official ceases to hold
office during the pendency of respondents case.

ISSUE:
WON THE respondent is liable due to the to the lack of notice of hearing and proof of service of the
questioned motion.

Held:

The Rules of Court requires that every motion must be set for hearing by the movant, except those motions
which the court may act upon without prejudicing the rights of the adverse party. The notice of hearing must
be addressed to all parties and must specify the time and date of the hearing, with proof of service. Sections 4,
5 and 6 of Rule 15 of the 1997 Rules on Civil Procedure provide:

SECTION 4. Hearing of motion.- Except for motions which the court may act upon without prejudicing the
rights of the adverse party, every written motion shall be set for hearing by the applicant.
Every written motion required to be heard and the notice of the hearing thereof shall be served in such a
manner as to ensure its receipt by the other party at least three (3) days before the date of hearing, unless the
court for good cause sets the hearing on shorter notice.

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

SEC. 6. Proof of service necessary.- No written motion set for hearing shall be acted upon by the court
without proof of service thereof.
It appears that the Motion to Release Bond was defective as it did not have a proper notice of hearing. The
date and time of the hearing were not specified. Neither complainant nor his counsel was furnished a copy
thereof. These were never controverted by respondent judge.

DOCTRINE:

A motion without notice of hearing is pro forma, a mere scrap of paper. It presents no question
which the court could decide. The court has no reason to consider it and the clerk has no right to
receive it. The rationale behind the rule is plain: unless the movant sets the time and place of
hearing, the court will be unable to determine whether the adverse party agrees or objects to the
motion, and if he objects, to hear him on his objection, since the rules themselves do not fix any
period within which he may file his reply or opposition. The objective of the rule is to avoid a
capricious change of mind in order to provide due process to both parties and ensure impartiality
in the trial.
Also, without proof of service to the adverse party, a motion is nothing but an empty formality
deserving no judicial cognizance. The rule mandates that the same shall not be acted upon by the
court. Proof of service is mandatory.

Sarmiento vs. Zaratan, 514 SCRA 246

PONENTE: CHICO-NAZARIO, J.:


FACTS:

This petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to nullify the Court of
Appeals Decision in CA-G.R. SP No. 79001 entitled, Emerita Zaratan v. Hon. Ramon A. Cruz, as Presiding
Judge of RTC, Quezon City, Branch 223, and Gliceria Sarmiento, dated 17 August 2004, which reversed and set
side the Orders dated 19 June 2003 and 31 July 2003 of the Regional Trial Court (RTC) of Quezon City in
Civil Case No. Q-03-49437, dismissing respondents appeal for failure to file the memorandum within the
period provided for by law.

On 2 September 2002, petitioner Gliceria Sarmiento filed an ejectment case against respondent Emerita
Zaratan, in the Metropolitan Trial Court (MeTC) of Quezon City, Branch 36, docketed as Civil Case No.
29109.

MTC RULING:

a decision in favor of petitioner, the dispositive portion of which reads:

WHEREFORE, the Court finds that plaintiff has sufficiently established her causes against the defendant
and hereby order the defendant and all persons claiming rights under her:

1. to pay plaintiff the monthly rentals of P3,500.00 for the said premises from August 1, 2002 until
defendant vacates the premises;

2. to pay plaintiff the sum of P20,000.00 plus P1,500.00 per appearance of counsel in court, as and
for attorneys fees; and
to pay the cost of suit.

Respondent filed her notice of appeal.

The case was raffled to the RTC of Quezon City, Branch 223, docketed as Civil Case No. Q-03-49437.
In the Notice of Appealed Case, the RTC directed respondent to submit her memorandum in accordance with
the provisions of Section 7(b) of Rule 40 of the Rules of Court and petitioner to file a reply memorandum
within 15 days from receipt.

Respondents counsel having received the notice on 19 May 2003, he had until 3 June 2003 within which to file
the requisite memorandum. But on 3 June 2003, he filed a Motion for Extension of Time of five days due to
his failure to finish the draft of the said Memorandum. He cited as reasons for the delay of filing his illness for
one week, lack of staff to do the work due to storm and flood compounded by the grounding of the computers
because the wirings got wet. But the motion remained unacted.

On 9 June 2003, respondent filed her Memorandum. On 19 June 2003, the RTC dismissed the appeal as
follows:
Record shows that defendant-appellant received the Notice of Appealed Case, through counsel, on May 19,
2003 (Registry Return Receipt dated May 12, 2003, Record, back of p. 298). Thus, under Section 7(b), Rule 40
of the 1997 Rules of Civil Procedure, she had fifteen (15) days or until June 3, 2003 within which to submit a
memorandum on appeal. As further appears on record, however, the required Memorandum was filed by
defendant-appellant only on June 9, 2003 (Record, p. 623), or six (6) days beyond the expiration of the
aforesaid fifteen day period.

It should be stressed that while the rules should be liberally construed, the provisions on reglemenatry
periods are strictly applied as they are deemed indispensable to the prevention of needless delays and
necessary to the orderly and speedy discharge of judicial business (Legaspi-Santos vs. Court of Appeals, G.R.
No. 60577, October 11, 1983) and strict compliance therewith is mandatory and imperative (FJR Garments
Industries vs. Court of Appeals, G.R. No. L-49329, June 29, 1984). The same is true with respect to the rules
on the manner and periods for perfecting appeals (Gutierrez vs. Court of Appeals, L-25972, November 26,
1968).

Premises considered, the instant appeal is hereby DISMISSED. This renders academic defendant-appellants
application for a writ of preliminary injunction

RTC RULING:

In the basis of the above-quoted Order, petitioner filed a Motion for Immediate Execution, while respondent
moved for the Reconsideration. Both motions were denied by the RTC on 31 July 2003. The Order in part
reads:

In the main, defendant-appellants Motion for Reconsideration is premised on the argument that she filed a
timely Motion for Extension of Time To File Memorandum, dated and filed on June 3, 2003, but that her
motion was not acted upon by this Court. She adds that her appeal memorandum was filed well within the
period sought by her in her Motion for Extension of Time to File Memorandum so that her appeal should not
have been dismissed.

The argument is without merit. This Court did not take cognizance of defendant-appellants Motion for
Extension of Time to File Memorandum, and rightly so, because it did not contain a notice of hearing as
required by Sections 4 and 5, Rule 15 of the Rules of Court, an omission for which it could offer no
explanation. As declared in the case of Gozon, et al. v. court of Appeals (G.R. No. 105781, June 17, 1993);

xxx

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

xxx

Moreover, parties and counsel should not assume that courts are bound to grant the time they pray for. A
motion that is not acted upon in due time is deemed denied (Orosa vs. Court of Appeals, 261 SCRA 376
[1996]). Thus, defendant-appellants appeal was properly dismissed on account of her failure to file an appeal
memorandum within the fifteen (15) day period provided under Section 7(b), Rule 40 of the 1997 Rules of
Civil Procedure.

With regard to the Motion for Immediate Execution, dated June 23, 2003, filed by plaintiff-appellee, the rule
is explicit that the execution of a judgment in an ejectment case, must be sought with the inferior court which
rendered the same. The appellate court which affirms a decision brought before it on appeal cannot decree its
execution in the guise of an execution of the affirming decision. The only exception is when said appellate
court grants an execution pending appeal, which is not the case herein (City of Manila vs. Court of Appeals,
204 SCRA 362; Sy vs. Romero, 214 SCRA 187).

Petitioner moved for reconsideration of the said Order, while respondent sought clarification on whether the
31 July 2003 Order dismissing the appeal was anchored on Section (b), Rule 40 or Section 7(c) of the same
Rule.

On 27 August 2003, the RTC reconsidered its previous Order by granting petitioners motion for Immediate
Execution, but denied respondents Motion for Clarification, in this wise:

Section 21, Rule 70 of the Rules of Court provides that the judgment of the Regional Trial Court against the
defendant shall be immediately executory, without prejudice to a further appeal that may be taken therefrom.
Pursuant to this Rule and taking into account the arguments of the plaintiff in her Urgent Motion for
Reconsideration, the Court is inclined to grant the same. As further correctly argued by the plaintiff, through
counsel, during the hearing on her motion on August 15, 2003, the cases of City of Manila v. Court of Appeals
(204 SCRA 362) and Sy vs. Romero (214 SCRA 187) cited in the July 31, 2003 Order refer to ejectment cases
which has (sic) been decided with finality and hence, inapplicable to this case where a further appeal is still
available to the defendant. It should likewise be noted that while the Supreme Court ruled in these cases that
execution of a judgment in an ejectment case must be sought with the inferior court which rendered the same,
it likewise provided that for an exception to this rule, that is, in cases where the appellate court grants an
execution pending appeal, as the case herein.

With regard to defendants Motion for Clarification, contained in her Opposition, the Court notes that the
issues raised therein have already been squarely dealt with in the July 31, 2003 Order. The same must,
therefore, be denied.

Aggrieved, respondent filed a Petition for Certiorari in the Court of Appeals, which was granted in a decision
dated 17 August 2004. The appellate court nullified and set aside the 19 June 2003 and 31 July 2003 Orders of
the RTC and ordered the reinstatement of respondents appeal. Consequently, respondents appeal
memorandum was admitted and the case remanded to the RTC for further proceedings.

Petitioner filed a motion for reconsideration on 13 September 2004, followed by a Motion for Inhibition of the
members of the Eighth Division of the Court of Appeals on 20 September 2004. Both motions were denied for
lack of merit on 10 March 2005.

ISSUE:

Whether or not Petitioner is correct that failure to include notice of hearing in the Motion for Extension of
Time to file Memorandum on Appeal is fatal, such that the filing of the motion is a worthless piece of paper?

HELD:

NO. It is not disputed that respondent perfected her appeal on 4 April 2003 with the filing of her Notice of
Appeal and payment of the required docket fees. However, before the expiration of time to file the
Memorandum, she filed a Motion for Extension of Time seeking an additional period of five days within
which to file her Memorandum, which motion lacked the Notice of Hearing required by Section 4, Rule 15 of
the 1997 Rules of Court which provides:

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

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

As may be gleaned above and as held time and again, the notice requirement in a motion is mandatory. As a
rule, a motion without a Notice of Hearing is considered pro forma and does not affect the reglementary
period for the appeal or the filing of the requisite pleading.
As a general rule, notice of motion is required where a party has a right to resist the relief sought by the
motion and principles of natural justice demand that his right be not affected without an opportunity to be
heard. The three-day notice required by law is intended not for the benefit of the movant but to avoid
surprises upon the adverse party and to give the latter time to study and meet the arguments of the motion.
Principles of natural justice demand that the right of a party should not be affected without giving it an
opportunity to be heard.
The test is the presence of the opportunity to be heard, as well as to have time to study the motion and
meaningfully oppose or controvert the grounds upon which it is based. Considering the circumstances of the
present case, we believe that procedural due process was substantially complied with.
There are, indeed, reasons which would warrant the suspension of the Rules: (a) the existence of special or
compelling circumstances, b) the merits of the case, (c) a cause not entirely attributable to the fault or
negligence of the party favored by the suspension of rules, (d) a lack of any showing that the review sought is
merely frivolous and dilatory, and (e) the other party will not be unjustly prejudiced thereby. Elements or
circumstances (c), (d) and (e) exist in the present case.

The suspension of the Rules is warranted in this case. The motion in question does not affect the substantive
rights of petitioner as it merely seeks to extend the period to file Memorandum. The required extension was
due to respondents counsels illness, lack of staff to do the work due to storm and flood, compounded by the
grounding of the computers. There is no claim likewise that said motion was interposed to delay the appeal.
As it appears, respondent sought extension prior to the expiration of the time to do so and the memorandum
was subsequently filed within the requested extended period. Under the circumstances, substantial justice
requires that we go into the merits of the case to resolve the issue of who is entitled to the possession of the
land in question.

Further, it has been held that a motion for extension of time x x x is not a litigated motion where notice to the
adverse party is necessary to afford the latter an opportunity to resist the application, but an ex parte motion
made to the court in behalf of one or the other of the parties to the action, in the absence and usually without
the knowledge of the other party or parties. As a general rule, notice of motion is required where a party has
a right to resist the relief sought by the motion and principles of natural justice demand that his rights be not
affected without an opportunity to be heard. It has been said that ex parte motions are frequently permissible
in procedural matters, and also in situations and under circumstances of emergency; and an exception to a
rule requiring notice is sometimes made where notice or the resulting delay might tend to defeat the objective
of the motion.
DOCTRINE:
The notice requirement in a motion is mandatory. As a rule, a motion without a Notice of Hearing is
considered pro forma and does not affect the reglementary period for the appeal or the filing of the requisite
pleading.

As a general rule, notice of motion is required where a party has a right to resist the relief sought by the
motion and principles of natural justice demand that his right be not affected without an opportunity to be
heard. The three-day notice required by law is intended not for the benefit of the movant but to avoid
surprises upon the adverse party and to give the latter time to study and meet the arguments of the motion.
Principles of natural justice demand that the right of a party should not be affected without giving it an
opportunity to be heard.
The test is the presence of the opportunity to be heard, as well as to have time to study the motion and
meaningfully oppose or controvert the grounds upon which it is based. Considering the circumstances of the
present case, we believe that procedural due process was substantially complied with.
There are, indeed, reasons which would warrant the suspension of the Rules: (a) the existence of special or
compelling circumstances, b) the merits of the case, (c) a cause not entirely attributable to the fault or
negligence of the party favored by the suspension of rules, (d) a lack of any showing that the review sought is
merely frivolous and dilatory, and (e) the other party will not be unjustly prejudiced thereby. Elements or
circumstances (c), (d) and (e) exist in the present case.

The suspension of the Rules is warranted in this case. The motion in question does not affect the substantive
rights of petitioner as it merely seeks to extend the period to file Memorandum. The required extension was
due to respondents counsels illness, lack of staff to do the work due to storm and flood, compounded by the
grounding of the computers. There is no claim likewise that said motion was interposed to delay the appeal.
As it appears, respondent sought extension prior to the expiration of the time to do so and the memorandum
was subsequently filed within the requested extended period. Under the circumstances, substantial justice
requires that we go into the merits of the case to resolve the issue of who is entitled to the possession of the
land in question.

5. Motion to Dismiss (Rule 16)

Boticano vs. Chu, 148 SCRA 541 (1987)


Facts:
Petitioner Eliseo Boticano is the registered owner of a Bedford truck with plate No. QC-870, T-
Pilipinas '77 which he was using in hauling logs for a certain fee. At 11:00 o'clock in the evening of
September 3, 1971, while loaded with logs, it was properly parked by its driver Maximo Dalangin at the
shoulder of the national highway in Barrio Labi, Bongabon, Nueva Ecija when it was hit and bumped at
the rear portion by a Bedford truck bearing plate No. QK-516, T-Pilipinas '77 owned by private
respondent Manuel Chu, Jr. and driven by Jaime Sigua, the former's co-defendant in this case. Manuel
Chu, Jr. acknowledged ownership thereof and agreed with petitioner to shoulder the expenses of the repair
of the damaged truck of the latter. (Decision, Civil Case No. 6754, Rollo, pp. 36-37).
When Manuel Chu, Jr. failed to comply with aforesaid agreement as well as to pay damages
representing lost income despite petitioner's demands, the latter (plaintiff in the lower court), filed a
complaint on November 24, 1977 at the Court of First Instance of Nueva Ecija, Branch VII at Cabanatuan
City, against private respondent Manuel Chu, Jr. (truck owner) and Jaime Sigua (his driver) both as
defendants in Civil Case No. 6754 "Eliseo Boticano v. Manuel Chu, Jr. and Jaime Sigua" for damages.
(Record on Appeal, Rollo, pp. 45-47).
Summons was issued on December 12, 1977 but was returned unserved for defendant Jaime
Sigua because he was no longer connected with San Pedro Saw Mill, Guagua, Pampanga, while another
copy of the summons for Manuel Chu, Jr. was returned duly served on him thru his wife Veronica Chu at
his dwelling house.
On February 15, 1978 petitioner moved to dismiss the case against Jaime Sigua and to declare
Manuel Chu, Jr. in default for failure to file responsive pleadings within the reglementary period. The
motion was granted by the lower court in an Order dated September 4, 1978, allowing petitioner to
adduce his evidence ex parte on October 17, 1978. (Petition, Rollo, pp. 8-9).
From the evidence adduced by the plaintiff (petitioner herein) the trial court found that private
respondent Manuel Chu, Jr. is responsible for the fault and negligence of his driver Sigua under Article
2180 of the Civil Code, whose negligence and lack of due care was the immediate and proximate cause of
the damage to petitioner's truck and ruled in favor of plaintiff-petitioner.
On March 19, 1979 private respondent Manuel Chu, Jr. filed with the trial court a "Notice of
Appeal" and an Urgent Motion for Extension of Time to file Record on Appeal which was granted by the
trial court on the same date.
On March 26, 1979, Atty. Hermenegildo D. Ocampo, counsel of record of private respondent,
filed a "Motion to Withdraw as Counsel" while the new counsel Atty. Wilfredo G. Laxamana entered his
appearance on April 18, 1979 and filed his record on appeal on the same date.
On May 4, 1979 petitioner filed with the trial court a Motion to Dismiss Appeal and for execution
which was set for hearing on May 14, 1979 wherein private respondent's counsel personally appeared and
opposed petitioner's motion while on the latter date petitioner filed his reply to opposition, after which on
May 16, 1979 the trial court issued an order denying aforesaid motion, while on May 22, 1979, the trial
court issued another order approving private respondent's Record on Appeal. (Rollo, pp. 9-10).
On April 20, 1981, petitioner filed with the respondent Court of Appeals a Motion for
Reconsideration and on June 3, 1981 a Supplemental Motion for Reconsideration. On August 28, 1981
respondent Court of Appeals issued an order denying petitioner's Motion for Reconsideration. (Rollo, pp.
9-11).

Issue:
Whether or not the question of jurisdiction over the person of the defendant can be raised for the
first time on appeal
Ruling:
The question has been answered in the negative by the Supreme Court in a long line of decisions.
In fact, one of the circumstances considered by the Court as indicative of waiver by the defendant-
appellant of any alleged defect of jurisdiction over his person arising from defective or even want of
process, is his failure to raise the question of jurisdiction in the Court of First Instance and at the first
opportunity. It has been held that upon general principles, defects in jurisdiction arising from irregularities
in the commencement of the proceedings, defective process or even absence of process may be waived by
a failure to make seasonable objections. (Castro v. Cebu Portland Cement Co., 71 Phil. 481 [1941] citing
Machan v. De la Trinidad, 3 Phil. 684; Vergara v. Laciapag 28 Phil. 439; U.S. v. Inductivo, 40 Phil. 84;
Soriano v. Ramirez, 44 Phil. 519). More recently, in reiteration of the same principle, the Court ruled in
Dalman v. City Court of Dipolog City, Branch II, that as to the dismissal of the criminal case, the question
of jurisdiction which was never raised in said case before the trial court cannot be done at this stage and
level (134 SCRA 244 [1985]).
Coming to the case at bar, it has been pointed out that during the stages of the proceedings in the
court below, defendant-appellant could have questioned the jurisdiction of the lower court but he did not.
It can of course be argued that the failure to question the lower court's jurisdiction cannot be accounted
against Chu for his having been declared in default gave him no chance to participate in the court
deliberations and therefore no chance to raise the jurisdictional issue, but then, he could have done so, in
the subsequent pleadings he filed. Besides, even assuming that such failure cannot be taken against him,
the fact is he had VOLUNTARILY submitted himself to the court's jurisdiction.

Del Rosario vs Far East Bank and Trust Company, G.R. No. 150134, October 31, 2007
Facts:
On May 21, 1974, petitioner Davao Timber Corporation (DATICOR) and respondent Private
Development Corporation of the Philippines (PDCP) entered into a loan agreement under which PDCP
extended to DATICOR a foreign currency loan of US $265,000 and a peso loan of P2.5 million or a total
amount of approximately P4.4 million, computed at the then prevailing rate of exchange of the dollar with
the peso. The loan agreement provided, among other things, that DATICOR shall pay: (1) a service fee of
one percent (1%) per annum (later increased to six percent [6%] per annum) on the outstanding balance of
the peso loan; (2) 12 percent (12%) per annum interest on the peso loan; and (3) penalty charges of two
percent (2%) per month in case of default. The loans were secured by real estate mortgages over six
parcels of land one situated in Manila (the Otis property) which was registered in the name of petitioner
Ernesto C. Del Rosario, and five in Mati, Davao Oriental and chattel mortgages over pieces of machinery
and equipment.
Petitioners paid a total of P3 million to PDCP, which the latter applied to interest, service fees and
penalty charges. This left petitioners, by PDCPs computation, with an outstanding balance on the
principal of more than P10 million as of May 15, 1983. By March 31, 1982, petitioners had filed a
complaint against PDCP before the then Court of First Instance (CFI) of Manila for violation of the Usury
Law, annulment of contract and damages. The case, docketed as Civil Case No. 82-8088, was dismissed
by the CFI.
On appeal, the then Intermediate Appellate Court (IAC) set aside the CFIs dismissal of the
complaint and declared void and of no effect the stipulation of interest in the loan agreement between
DATICOR and PDCP. PDCP appealed the IACs decision to this Court where it was docketed as G.R. No.
73198.
On September 2, 1992, this Court promulgated its Decision in G.R. No. 73198[8] affirming in
toto the decision of the IAC. It determined that after deducting the P3 million earlier paid by petitioners to
PDCP, their remaining balance on the principal loan was only P1.4 million.
Petitioners thus filed on April 25, 1994 a Complaint[9] for sum of money against PDCP and
FEBTC before the RTC of Makati, mainly to recover the excess payment which they computed to be P5.3
million[10] P4.335 million from PDCP, and P965,000 from FEBTC. The case, Civil Case No. 94-1610,
was raffled to Branch 132 of the Makati RTC.
On May 31, 1995, Branch 132 of the Makati RTC rendered a decision[11] in Civil Case No. 94-
1610 ordering PDCP to pay petitioners the sum of P4.035 million,[12] to bear interest at 12% per annum
from April 25, 1994 until fully paid; to execute a release or cancellation of the mortgages on the five
parcels of land in Mati, Davao Oriental and on the pieces of machinery and equipment and to return the
corresponding titles to petitioners; and to pay the costs of the suit.
From the trial courts decision, petitioners and respondent PDCP appealed to the Court of Appeals
(CA). The appeal was docketed as CA-G.R. CV No. 50591.
On May 22, 1998, the CA rendered a decision[13] in CA-G.R. CV No. 50591, holding that
petitioners outstanding obligation, which this Court had determined in G.R. No. 73198 to be P1.4 million,
could not be increased or decreased by any act of the creditor PDCP.
Finally, the CA held that the claim of PDCP against DATICOR for the payment of P1.4 million had no
basis, DATICORs obligation having already been paid in full, overpaid in fact, when it paid assignee
FEBTC the amount of P6.4 million.

Issue:
Whether or not causes of action are identical to warrant the application of the rule of res judicata

Ruling:
Simply stated, 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. It bears
remembering that a cause of action is the delict or the wrongful act or omission committed by the
defendant in violation of the primary rights of the plaintiff.[39]
In the two cases, petitioners imputed to FEBTC the same alleged wrongful act of mistakenly
receiving and refusing to return an amount in excess of what was due it in violation of their right to a
refund. The same facts and evidence presented in the first case, Civil Case No. 94-1610, were the very
same facts and evidence that petitioners presented in Civil Case No. 00-540.
Thus, the same Deed of Assignment between PDCP and FEBTC, the first and second
supplements to the Deed, the MOA between petitioners and FEBTC, and this Courts Decision in G.R. No.
73198 were submitted in Civil Case No. 00-540.
Notably, the same facts were also pleaded by the parties in support of their allegations for, and
defenses against, the recovery of the P4.335 million. Petitioners, of course, plead the CA Decision as
basis for their subsequent claim for the remainder of their overpayment. It is well established, however,
that a party cannot, by varying the form of action or adopting a different method of presenting his case, or
by pleading justifiable circumstances as herein petitioners are doing, escape the operation of the principle
that one and the same cause of action shall not be twice litigated.[40]
In fact, authorities tend to widen rather than restrict the doctrine of res judicata on the ground that
public as well as private interest demands the ending of suits by requiring the parties to sue once and for
all in the same case all the special proceedings and remedies to which they are entitled.[41]

Halimao vs. Villanueva, 253 SCRA 1 (1996)

FACTS:
Complainant Reynaldo Halimao wrote to the Chief Justice, alleging that respondents, without lawful
authority and armed with armalites and handguns, forcibly entered the Oo Kian Tiok Compound in Cainta,
Rizal, of which complainant was caretaker, on April 4, 1992 at 11:00 A.M. They prayed that an investigation
be conducted and respondents disbarred and attached the affidavits of alleged witnesses, including that of
Danilo Hernandez, a security guard at the compound, who had also filed a similar complaint against herein
respondents.

Respondents: filed a comment claiming complaint is a mere duplication of that filed by Danilo Hernandez in
Administrative Case No. 3835, which this Court had already dismissed for lack of merit. Alleging the
complaints arose from the same incident and acts complained of and that Danilo Hernandez is the same
person whose affidavit is attached to the complaint in this case.

Respondent Ferrer: claimed that he was nowhere near the compound when the incident took place. He
submitted affidavits attesting to the fact that he had spent the whole day of April 4, 1992 in Makati with his
family. Claimed that the two complaints were filed for the purpose of harassing him because he was the
principal lawyer of Atty. Daniel Villanueva in two cases before the Securities and Exchange Commission. The
cases involved the ownership and control of Filipinas Textile Mills (Filtex), which is owned by
Villanueva'sfamily and whose premises are the Oo Kian Tiok compound.

This case was thereafter referred to the Integrated Bar of the Philippines for investigation, report and
recommendation.

In its Resolution Board of Governors of the IBP: dismissed the case against respondents found that the
complaint is barred by the decision in Administrative Case No. 3835 which involved the same incident and the
two cases were similarly worded.

The Investigating Commissioner: held that both (Danilo Hernandez) of the compound while the present case
was filed by the caretaker had substantially the same interest. Danilo Hernandez is not a stranger to
complainant herein. Both represent the same interest as co-workers in the Oo Kian Tiok Compound; that for
res judicata to apply, absolute identity of parties is not required, it being sufficient that there is identity of
interests of the parties. In this case, both complainants were present at the compound when the incident
allegedly happened, and the acts they were complaining against and the relief they were seeking were the
same.

Complainant: filed a MR of the resolution of the IBP Board of Governors contending that by filing a motion
to dismiss the complaint in this case, private respondents must be deemed to have hypothetically admitted the
material allegations in the complaint hence, private respondents must be deemed to have confessed to the
charge of serious misconduct. Hence, it was error for the IBP to dismiss his complaint. He contends that the
resolution in Administrative Case No. 3835 has no bearing upon the present case and that the Investigating
Commissioner should have resolved the issues of fact before him.

Respondents: filed an Opposition to the MR arguing that the MR is a mere scrap of paper, because it is not
provided for in Rule 139-B of the Rules of Court, and that what complainant should instead have done was to
appeal to this Court.

Rule 139-B states in pertinent part:


12. Review and decision by the Board of Governors.
xxx xxx xxx
c) If the respondent is exonerated by the Board or the disciplinary sanction imposed by it is less than
suspension or disbarment [such as admonition, reprimand, or fine] it shall issue a decision
exonerating respondent or imposing such sanction. The case shall be deemed terminated unless upon
petition of the complainant or other interested party filed with the Supreme Court within fifteen (15)
days from notice of the Board's resolution, the Supreme Court orders otherwise.

Although Rule 139-B, 12(c) makes no mention of a motion for reconsideration, nothing in its text or in its
history suggests that such motion is prohibited. It may therefore be filed within 15 days from notice to a
party. Indeed, the filing of such motion should be encouraged before resort is made to this Court as a matter
of exhaustion of administrative remedies, to afford the agency rendering the judgment an opportunity to
correct any error it may have committed through a misapprehension of facts or misappreciation of the
evidence.

Considering, however, that complainant's motion for reconsideration was filed after the IBP had forwarded
the records of this case to this Court, it would be more expedient to treat it as complainant's petition for
review within the contemplation of Rule 139-B, 12(c)

Issue:

W/N it was error for the IBP to dismiss his complaint

Held:

The Investigating Commissioner properly dismissed the complaint in this case on the ground of res judicata,
it appearing that it involves the same incident and the same cause of action as Administrative Case. Indeed, it
appears that the Court dismissed a similar complaint filed in Administrative Case No. 3835.

Suffice it to say that the rule that a motion to dismiss is to be considered as a hypothetical admission of the
facts alleged in the complaint applies more particularly to cases in which the ground for dismissal is the
failure of the complaint to state a cause of action. When it appears on the face of the complaint that the
plaintiff is not entitled to any relief under the facts alleged, the defendant may file a motion to dismiss
hypothetically admitting the facts alleged in the complaint. By filing such a motion, the defendant in effect
says that even assuming the facts to be as alleged by the plaintiff, the latter has failed to prove that he has a
right which the former has violated.

The rule does not unqualifiedly apply to a case where the defendant files a motion to dismiss based on lack of
jurisdiction of the court or tribunal over the person of the defendant or over the subject matter or over the
nature of the action; or on improper venue; or on lack of capacity to sue of the plaintiff or on litis pendentia,
res judicata, prescription, unenforceability, or on the allegation that the suit is between members of the same
family and no earnest efforts towards a compromise have been made. In such cases, the hypothetical
admission is limited to the facts alleged in the complaint which relate to and are necessary for the resolution
of these grounds as preliminary matters involving substantive or procedural laws, but not to the other facts of
the case. cdll

On the other hand, when a motion to dismiss is based on payment, waiver, abandonment, release,
compromise, or other form of extinguishment, the motion to dismiss does not hypothetically, but actually,
admits the facts alleged in the complaint, i.e., the existence of the obligation or debt, only that the plaintiff
claims that the obligation has been satisfied. So that when a motion to dismiss on these grounds is denied,
what is left to be proven in the trial is no longer the existence of the debt but the fact vel non of payment by
the defendant.

This administrative complaint against Attorneys DanielVillanueva and Inocencio P. Ferrer, Jr. is the offshoot
of a family feud involving the ownership and possession of the Filipinas Textile Mills (Filtex).
For want of a prima facie showing of professional misconduct on the part of the respondents, the complaint
must be dismissed. The three-cornered dispute among respondent Daniel Villanueva, Bernardino Villanueva
and Oo Kian Tok [sic] over the possession and ownership of the Filtex property should be litigated and
determined in an appropriate judicial action, not in administrative proceedings to disbar Attorney Daniel
Villanueva and his counsel, Attorney Inocencio P. Ferrer, Jr.

Complaint against respondents Attys. Daniel Villanueva and Inocencio P. Ferrer, Jr. is DISMISSED for lack
of merit.
Two MRs of this resolution were filed by the complainant denied

Resolution of the Board of Governors of the Integrated Bar of the Philippines, approving and adopting the
report and recommendation of the Investigating Commissioner, is AFFIRMED and the complaint against
respondents is DISMISSED.

DOCTRINE:
*RULE THAT A MOTION TO DISMISS IS TO BE CONSIDERED A HYPOTHETICAL ADMISSION OF
THE FACTS ALLEGED IN THE COMPLAINT; APPLICATION OF THE RULE.
By filing a motion to dismiss, respondents are deemed to have admitted the allegations of the complaint
against them, suffice it to say that the rule that a motion to dismiss is to be considered as a hypothetical
admission of the facts alleged in the complaint applies more particularly to cases in which the ground for
dismissal is the failure of the complaint to state a cause of action. When it appears on the face of the
complaint that the plaintiff is not entitled to any relief under the facts alleged, the defendant may file a motion
to dismiss hypothetically admitting the facts alleged in the complaint. By filing such a motion, the defendant
in effect says that even assuming the facts to be as alleged by the plaintiff, the latter has failed to prove that he
has a right which the former has violated. The rule does not unqualifiedly apply to a case where the defendant
files a motion to dismiss based on lack of jurisdiction of the court or tribunal over the person of the defendant
or over the subject matter or over the nature of the action; or on improper venue; or on lack of capacity to
sue of the plaintiff or on litis pendentia, res judicata, prescription, unenforceability, or on the allegation that
the suit is between members of the same family and no earnest efforts towards a compromise have been
made. In such cases, the hypothetical admission is limited to the facts alleged in the complaint which relate to
and are necessary for the resolution of these grounds as preliminary matters involving substantive or
procedural laws, but not to the other facts of the case. On the other hand, when a motion to dismiss is based
on payment, waiver, abandonment, release, compromise, or other form of extinguishment, the motion to
dismiss does not hypothetically, but actually, admits the facts alleged in the complaint, i.e., the existence of the
obligation or debt, only that the plaintiff claims that the obligation has been satisfied. So that when a motion
to dismiss on these grounds is denied, what is left to be proven in the trial is no longer the existence of the debt
but the fact vel non of payment by the defendant.

* WHAT IS ESSENTIAL IN RES JUDICATA IS IDENTITY OF INTEREST AND NOT THE ABSOLUTE
IDENTITY OF PARTIES. While the complainant (Danilo Hernandez) in Administrative Case No. 3835 is
different from the complainant in the present case, the fact is that they have an identity of interest, as the
Investigating Commissioner ruled. Both complainants were employed at the Oo Kian Tiok Compound at the
time of the alleged incident. Both complain of the same act allegedly committed by respondents. The
resolution of this Court in Administrative Case No. 3835 is thus conclusive in this case, it appearing that the
complaint in this case is nothing but a duplication of the complaint of Danilo Hernandez in the prior case. In
dismissing the complaint brought by Danilo Hernandez in the prior case, this Court categorically found
"want of a prima facie showing of professional misconduct on the part of the respondents [Attorneys Daniel
Villanueva and Inocencio Ferrer, Jr.

Tan vs. CA, 295 SCRA 247 (1998)

FACTS:
Private respondent, claimed that he bought the subject properties from Mr. Tan Keh in 1954 for
P98,065.35, built his house thereon, but was unable to effect immediate transfer of title in his favor in
view of his foreign nationality at the time of the sale. Nonetheless, as an assurance in good faith of the
sales agreement, Mr. Tan Keh turned over to private respondent the owner's duplicate and executed a
lease contract in favor of private respondent for a duration of forty (40) years.

Mr. Tan Keh:


sold the subject properties to Remigio Tan, his brother and father of petitioners, with the
understanding that the subject properties are to be held in trust by Remigio for the benefit of
private respondent and that Remigio would execute the proper documents of transfer in favor of
private respondent should the latter at anytime demand recovery of the subject properties. TCT
No. 35656 was thus cancelled and in lieu thereof TCT No. 53284 was issued in the name of
Remigio.
Another contract of lease was executed by Mr. Tan Keh and Remigio in favor of private
respondent to further safeguard the latter's interest on the subject properties, but private
respondent never paid any rental and no demand whatsoever for the payment thereof had been
made on him.

Remigio was killed in 1968. At his wake, petitioners were reminded of private respondent's ownership of
the subject properties and they promised to transfer the subject properties to private respondent who by
then had already acquired Filipino citizenship by naturalization.
Petitioners, however, never made good their promise to convey the subject properties despite repeated
demands by private respondent and subsequently fraudulently transferred to their names under TCT No.
117898. Thus, the filing of the complaint for recovery of property.
Petitioners filed a Motion To Dismiss the complaint, claiming that: (1) the complaint stated no cause of
action; (2) the cause of action has long prescribed; (3) the cause of action has long been barred by a prior
judgment; and, (4) the claim has been waived, abandoned and/or extinguished by laches and estoppel.
An Opposition to Motion To Dismiss with Memorandum was filed by private respondent. In turn,
petitioners on filed their Memorandum of Authorities.
TC: issued an order dismissing private respondent's complaint, acceding to all the grounds set forth by
petitioners in their motion to dismiss.
CA: which set aside the dismissal and ordered the remand of the case for further proceedings. Petitioners'
MR was denied by CA Now before us via this petition for review

Issue:
I.THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE COMPLAINT FAILS TO
STATE A CAUSE OF ACTION.
II.THE COURT OF APPEALS ERRED IN NOT HOLDING THAT RESPONDENT'S CAUSE OF
ACTION HAS PRESCRIBED, BARRED BY PRIOR JUDGMENT, CLAIM HAS BEEN WAIVED,
ABANDONED OR OTHERWISE EXTINGUISHED.

Held:
I.The flaw in this conclusion is that, while conveniently echoing the general rule that averments in the
complaint are deemed hypothetically admitted upon the filing of a motion to dismiss grounded on the
failure to state a cause of action, it did not take into account the equally established limitations to such
rule, i.e., that a motion to dismiss does not admit the truth of mere epithets of fraud; nor allegations of
legal conclusions; nor an erroneous statement of law; nor mere inferences or conclusions from facts not
stated; nor mere conclusions of law; nor allegations of fact that falsity of which is subject to judicial
notice; nor matters of evidence; nor surplusage and irrelevant matter; nor scandalous matter inserted
merely to insult the opposing party; nor to legally impossible facts; nor to facts which appear unfounded
by a record incorporated in the pleading, or by a document referred to; and nor to general averments
contradicted by more specific averments.
A more judicious resolution of a motion to dismiss, therefore, necessitates that the court be not restricted
to the consideration of the facts alleged in the complaint and inferences fairly deducible therefrom. Courts
may consider other facts within the range of judicial notice as well as relevant laws and jurisprudence
which the courts are bound to take into account and they are also fairly entitled to examine
records/documents duly incorporated into the complaint by the pleader himself in ruling on the demurrer
to the complaint.

II. The execution of a lease contract between Remigio Tan as lessor and private respondent as lessee over
the subject properties, the existence of which is established not only by a copy thereof attached to
petitioners' motion to dismiss but by private respondent's own admission reflected in paragraph 6 of the
complaint, already belies private respondent's claim of ownership. This is so because Article 1436 of the
Civil Code. Section 2, Rule 131 of the Rules of Court and settled jurisprudence consistently instruct that a
lessee is estopped or prevented from disputing the title of his landlord.
In the Memorandum of Encumbrances found at the backof TCT No. 53284 issued in the name of Remigio
Tan in 1958 attached as Annex "B" to the complaint, there appears a mortgage constituted by Remigio
Tan over the subject properties in favor of Philippine Commercial and Industrial Bank in 1963 to
guarantee a principal obligation in the sum of P245,000.00. Remigio could not have mortgaged the
subject properties had he not been the true owner thereof, inasmuch as under Article 2085 of the New
Civil Code, one of the essential requisites for the validity of a mortgage contract is that the mortgagor be
the absolute owner of the thing mortgaged. There is thus no denying that Remigio Tan's successful
acquisitionof a transfer certificate of title (TCT No. 53284) over the subject properties in his name after
having his brother's (Alejandro Tan Keh) title thereto cancelled, and execution of a mortgage over the
same properties in favor of Philippine Commercial and Industrial Bank, undoubtedly, are acts of strict
dominion which are anathema to the concept of a continuing and subsisting trust private respondent relies
upon.
Private respondent alleged that he bought the subject properties from Alejandro Tan Keh in 1954 but
nonetheless failed to present any document evidencing the same, while Remigio Tan, as the other buyer,
had in his name TCT No. 53284 duly registered in the Registry of Deeds of Manila on October 13, 1958.
Remigio Tan, beyond doubt, was the buyer entitled to the subject properties since the prevailing rule is
that in the double sale of real property, the buyer who is in possession of a Torrens title and had the deed
of sale registered must prevail.
Petitioners are in possession of TCT No. 117898 which evidences their ownership of the subject
properties. On the other hand, private respondent relies simply on the allegation that he is entitled to the
properties by virtue of a sale between him and Alejandro Tan Keh who is now dead. Obviously, private
respondent will rely on parol evidence which, under the circumstances obtaining, cannot be allowed
without violating the "Dead Man's Statute" found in Section 23, Rule 130 of the Rules of Court. ESCacI
The object and purpose of the rule is to guard against the temptation to give false testimony in regard
ofthe transaction in question on the part of the surviving party, and further to put the two parties to a suit
upon terms of equality in regard to the opportunity to giving testimony. If one party to the alleged
transaction is precluded from testifying by death, insanity, or other mental disabilities, the other party is
not entitled to the undue advantage of giving his own uncontradicted and unexplained account of the
transaction.
Reliance on the Olvigacase is misplaced. Private respondents in Olviga were actually occupying the
subject land fraudulently registered in the name of Jose Olviga in a cadastral proceeding as owners. The
rightful application of the doctrine highlighted in Olviga that the right to seek reconveyance of property
actually in possession of the plaintiff is imprescriptible would only cover a situation where the possession
is in the concept of an owner. But by a further reading of Olviga which emphasized that ". . . if a person
claiming to be the owner thereof is in actual possession of the property, the right to seek reconveyance,
which in effect seeks to quiet title to the property, does not prescribe. In this case, however, private
respondent's occupation of the subject properties was never in the concept of an owner since he was a
mere lessee who, as herein before discussed, is estopped from denying the title of Remigio Tan as owner-
lessor. At best, private respondent's stay on the properties as lessee was by "license or by mere tolerance"
which, under Article 1119 of the Civil Code, "shall not be available for the purposes of possession." It
thus becomes evident that the filing of private respondent's complaint in 1993 thirty five (35) years
after TCT No. 53284 in the name of Remigio Tan was registered and eighteen (18) years after the
issuance of TCT No. 117898 in the names of petitioners was way beyond the ten (10)-year time limit
within which reconveyance of property based on an implied trust should be instituted. Private
respondent's cause of action, assuming that it exists, has clearly prescribed.
Private respondent's possession of the subject properties cannot be made the basis to deflect the effects of
laches because he is a mere lessee who, to repeat, cannot assert any adverse claim of ownership over the
subject properties against the lessor-owner. His mistake, if it is one, is that he tarried for thirty (30) years
before formally laying claim to the subject properties before the court. Considerable delay in asserting
one's right before a court of justice is strongly persuasive of the lack of merit of his claim, since it is
human nature for a person to enforce his right when the same is threatened or invaded. Thus, private
respondent is estopped by laches from questioning the ownership of the subject properties.
WHEREFORE, in view of the foregoing, the assailed decision of respondent Court of Appeals dated May
28, 1996 and its Resolution of July 31, 1996 denying the motion for reconsideration thereof, are hereby
SET ASIDE, and a new one is rendered DISMISSING private respondent Fernando Tan Kiat's complaint.

DOCTRINE:
The flaw in the conclusion of the respondent court that the complaint stated a cause of action is that,
while conveniently echoing the general rule that averments in the complaint are deemed hypothetically
admitted upon the filing of a motion to dismiss grounded on the failure to state a cause of action, it did
not take into account the equally established limitations to such rule, i.e., that a motion to dismiss does
not admit the truth of mere epithets of fraud; nor allegations of legal conclusions; nor an erroneous
statement of law. A more judicious resolution of a motion to dismiss, therefore, necessitates that the court
be not restricted to the consideration of the facts alleged in the complaint and inferences fairly deducible
therefrom. Courts may consider other facts within the range of judicial notice as well as relevant laws and
jurisprudence which the courts are bound to take into account, and they are also fairly entitled to examine
records/documents duly incorporated into the complaint by the pleader himself in ruling on the demurrer
to the complaint.

Asia Production Co., Inc. vs. Pano, 205 SCRA 458 (1992)

ASIA PRODUCTION CO., INC., WANG TA PENG and WINSTON WANG, petitioners, vs.
HON. ERNANI CRUZ PAO, as Judge of the Court of First Instance of Rizal (Quezon City, Branch XVIII),
LOLITA LEE LE HUA and ALBERTO DY, respondents. G.R. No. L-51058 January 27, 1992

Ponente: DAVIDE, JR. J.:

FACTS:
Sometime in March 1976, private respondents, who claimed to be the owners of a building constructed on a lot
leased from Lucio San Andres and located in Valenzuela, Bulacan, offered to sell the building to the petitioners for
P170,000.00. Petitioners agreed because of private respondents' assurance that they will also assign to the petitioners
the contract of lease over the land. The above agreement and promise were not reduced to writing. Private
respondents undertook to deliver to the petitioners the deed of conveyance over the building and the deed of
assignment of the contract of lease within sixty (60) days from the date of payment of the downpayment of
P20,000.00. The balance was to be paid in monthly installments. Petitioners paid the downpayment and issued eight
(8) postdated checks drawn against the Equitable Banking Corporation for the payment of the eight (8) monthly
installments.

Relying on the good faith of private respondents, petitioners constructed in May 1976 a weaving factory on the
leased lot. Unfortunately, private respondents, despite extensions granted, failed to comply with their undertaking to
execute the deed to sale and to assign the contract despite the fact that they were able to encash the checks in the
total amount of P30,000.00. Worse, the lot owner made it plain to petitioners that he was unwilling to give consent
to the assignment of the lease unless petitioners agreed to certain onerous terms, such as an increase in rental, or the
purchase of the land at a very unconscionable price.

Petitioners were thus compelled to request for a stop payment order of the six (6) remaining checks. Succeeding
negotiations to save the transaction proved futile by reason of the continued failure of private respondents to execute
the deed of sale of the building and the deed of assignment of the contract of lease. Petitioners filed against private
respondents a complaint with the then Court of First Instance (now Regional Trial Court) of Quezon City. Private
respondent Lolita Lee Le Hua did not file an Answer; hence, she was declared in default.

Private respondent Alberto Dy filed a motion to dismiss the complaint on the ground that the claim on which the
action is based an alleged purchase of a building which is not evidenced by any writing cannot be proved by
parol evidence since Article 1356 in relation to Article 1358 of the Civil Code requires that it should be in writing.In
their opposition to said motion, petitioners argue that their complaint is essentially for collection of a sum of money;
it does not seek to enforce the sale, but aims to compel private respondents to refund a sum of money which was
paid to them as purchase price in a sale which did not materialize by reason of their bad faith.

Respondent Judge granted the motion to dismiss on the ground that the complaint is barred by the Statute of Frauds.
He says: It cannot be disputed that the contract in this case is condemned by the Statutes of Fraud ( sic) it involves
not merely the sale of real property (the building), it also includes an alleged lease agreement that must certainly be
for more than one year.

Their motion for reconsideration having been denied by respondent Judge for the reason that the oral contract in this
case was not removed from the operation of the Statute of Frauds because there was no full or complete performance
by the petitioners of the contract.

ISSUE: Whether or not an action for the refund of partial payments of the purchase price of a building covered by an
oral agreement to sell it with an oral promise to assign the contract of lease on the lot where the building is
constructed is barred by the Statute of Frauds.

HELD:
We find merit in the petition. Respondent Judge committed grave abuse of discretion in dismissing the complaint on
the ground that the claim is barred by the Statute of Frauds.

DOCTRINE: The purpose of the statute is to prevent fraud and perjury in the enforcement of obligations
depending for their evidence on the unassisted memory of witnesses by requiring certain enumerated
contracts and transactions to be evidenced by a writing signed by the party to be charged. It was not designed
to further or perpetuate fraud. It makes only ineffective actions for specific performance of the contracts
covered by it; it does not declare them absolutely void and of no effect. The contracts concerned are simply
"unenforceable" and the requirement that they or some note or memorandum thereof be in writing
refers only to the manner they are to be proved. The statute will apply only to executory rather than executed
contracts. Partial execution is even enough to bar the application of the statute.

There can be no dispute that the instant case is not for specific performance of the agreement to sell the building and
to assign the leasehold right, hence the Statute of Frauds does not apply. And even if it were for specific
performance, partial execution thereof by petitioners effectively bars the private respondents from invoking it.
Besides, even if the action were for specific performance, it was premature for the respondent Judge to dismiss the
complaint by reason of the Statute of Frauds despite the explicit allegations of partial payment.
We thus rule that an action by a withdrawing party to recover his partial payment of the consideration of a contract,
which is otherwise unenforceable under the Statute of Frauds, by reason of the failure of the other contracting party
to comply with his obligation, is not covered by the Statute of Frauds.

WHEREFORE, the petition is hereby GRANTED. The challenged Orders of the court below are hereby
ANNULLED and SET ASIDE, and the complaint in said case is hereby ordered REINSTATED. The default order
against private respondent Lolita Lee Le Hua shall stand and private respondent Alberto Dy is ordered to file his
Answer to the complaint with the court below within ten (10) days from receipt of this decision. This decision shall
be immediately executory.

Sunville Timber Products, Inc. vs. Abad, 206 SCRA 482 (1992)

SUNVILLE TIMBER PRODUCTS, INC., petitioner, vs. HON. ALFONSO G. ABAD, as Judge RTC, Br. 22 of
Pagadian City, COURT OF APPEALS, ISIDRO GILBOLINGO AND ROBUSTIANO BUGTAI, respondents.
G.R. No. 85502 February 24, 1992

Ponente: CRUZ, J.:

FACTS:
The petitioner was granted a Timber License Agreement (TLA), authorizing it to cut, remove and utilize timber
within the concession area covering 29,500 hectares of forest land in Zamboanga del Sur, for a period of ten years
expiring on September 31, 1992. On July 31, 1987, the herein private respondents filed a petition with the DENR for
the cancellation of the TLA on the ground of serious violations of its conditions and the provisions of forestry laws
and regulations.The same charges were subsequently made, also by the herein private respondents, in a complaint
for injunction with damages against the petitioner in the Regional Trial Court of Pagadian City.

The petitioner moved to dismiss this case on three grounds, to wit: 1) the court had no jurisdiction over the
complaint; 2) the plaintiffs had not yet exhausted administrative remedies; and 3) the injunction sought was
expressly prohibited by section 1 of PD 605.

Judge Alfonso G. Abad denied the motion to dismiss on December 11, 1987, and the motion for reconsideration on
February 15, 1988. The petitioner then elevated the matter to the respondent Court of Appeals, which sustained the
trial court in a decision dated July 4, 1988, and in its resolution of September 27, 1988, denying the motion for
reconsideration.

The Court of Appeals held that the doctrine of exhaustion of administrative remedies was not without exception and
pointed to the several instances approved by this Court where it could be dispensed with. The respondent court
found that in the case before it, the applicable exception was the urgent need for judicial intervention. It is urgent
that indiscriminate logging be stopped. Irreparable damage would ensue unless the court intervenes. Reliance on the
DENR may not be enough, judging from its inaction on the council's request seven years back.

The respondent court cited in support of this conclusion the case of De Lara v. Cloribel, where "irreparable damage
and injury" was allowed as an exceptional ground, and Arrow Transportation Corporation v. Board of
Transportation, where the doctrine was waived because of "the strong public interest in having the matter settled" as
soon as possible.The respondent court cited Export Processing Zone Authority v. Dulay, where several presidential
decrees were declared unconstitutional for divesting the courts of the judicial power to determine just compensation
in expropriation cases. The petitioner is now before the Court, contending that the doctrine of exhaustion of
administrative remedies was not correctly applied and that the declaration of the unconstitutionality of Section 1 of
PD 605 was improper.

ISSUE: Whether or not there is a correct application of the doctrine of exhaustion of administrative remedies.

HELD:
The doctrine of exhaustion of administrative remedies calls for resort first to the appropriate administrative
authorities in the resolution of a controversy falling under their jurisdiction before the same may be elevated to the
courts of justice for review.

DOCTRINE: Non-observance of the doctrine results in lack of a cause of action, which is one of the grounds
allowed in the Rules of Court for the dismissal of the complaint. The deficiency is not jurisdictional. Failure to
invoke it operates as a waiver of the objection as a ground for a motion to dismiss and the court may then
proceed with the case as if the doctrine had been observed.

A no less important consideration is that administrative decisions are usually questioned in the special civil actions
of certiorari, prohibition and mandamus, which are allowed only when there is no other plain, speedy and adequate
remedy available to the petitioner. It may be added that strict enforcement of the rule could also relieve the courts of
a considerable number of avoidable cases which otherwise would burden their heavily loaded dockets.

As correctly suggested by the respondent court, however, there are a number of instances when the doctrine may be
dispensed with and judicial action validly resorted to immediately. Among these exceptional cases are:
1) when the question raised is purely legal;
2) when the administrative body is in estoppel;
3) when the act complained of is patently illegal;
4) when there is urgent need for judicial intervention;
5) when the claim involved is small;
6) when irreparable damage will be suffered;
7) when there is no other plain, speedy and adequate remedy;
8) when strong public interest is involved;
9) when the subject of the controversy is private land; and
10) in quo warranto proceedings.

The private respondents now submit that their complaint comes under the exceptions because forestry laws do not
require observance of the doctrine as a condition precedent to judicial action; the question they are raising is purely
legal; application of the doctrine will cause great and irreparable damage; and public interest is involved.

We rule for the petitioner. Even if it be assumed that the forestry laws do not expressly require prior resort to
administrative remedies, the reasons for the doctrine above given, if nothing else, would suffice to still require its
observance. Even if such reasons were disregarded, there would still be the explicit language of pertinent laws
vesting in the DENR the power and function. This comprehensive conferment clearly implies at the very least that
the DENR should be allowed to rule in the first instance on any controversy coming under its express powers before
the courts of justice may intervene.

As for the alleged urgent necessity for judicial action and the claimed adverse impact of the case on the national
interest, the record does not show that the petitioners have satisfactorily established these extraordinary
circumstances to justify deviation from the doctrine by exhaustion of administrative remedies and immediate resort
to the courts of justice. In fact, this particular submission must fall flat against the petitioner's uncontested
contention that it has since 1988 stopped its operations under the TLA in compliance with the order of the DENR.

There in no question that Civil Case No. 2732 comes within the jurisdiction of the respondent court. Nevertheless, as
the wrong alleged in the complaint was supposedly committed as a result of the unlawful logging activities of the
petitioner, it will be necessary first to determine whether or not the TLA and the forestry laws and regulations had
indeed been violated. To repeat for emphasis, determination of this question is the primary responsibility of the
Forest Management Bureau of the DENR. The application of the expertise of the administrative agency in the
resolution of the issue raised is a condition precedent for the eventual examination, if still necessary, of the same
question by a court of justice.

WHEREFORE, the petition is GRANTED. The decision of the respondent court dated July 4, 1988, and its
resolution dated September 27, 1988, as well as the resolutions of the trial court dated December 11, 1987 and
February 15, 1988, are all REVERSED and SET ASIDE. Civil Case No. 2732 in the Regional Trial Court of
Pagadian City is hereby DISMISSED.

Municipality of Binan vs. CA, 219 SCRA 69 (1993)

DOCTRINE:

The preliminary hearing permitted under the Sec. 5, Rule 16 is not mandatory even when the same is
prayed for. It rests largely on the sound discretion of the trial court.

FACTS:

Petitioner filed Civil Case No. 2473 for unlawful detainer, with a prayer for a writ of preliminary
mandatory injunction, against private respondent in the MTC of Bian, Laguna alleging that it was no
longer amenable to the renewal of its 25-year lease contract with private respondent over the premises
involved because of its pressing need to use the same for national and provincial offices therein. On
October 5, 1989, private respondent filed his answer to the complaint contending that the contract of lease
for the original period of 25 years had not yet expired and, assuming it had expired, he has exercised his
option to stay in the premises for another 25 years as expressly provided in the said contract. On October
16, 1989, private respondent filed this time a "Motion for Preliminary Hearing as if a Motion to Dismiss
Has Been Filed" on the ground that the complaint states no cause of action, reiterating its argument.

MTC: ordered private respondent to vacate the premises subject of the ejectment case.

On November 8, 1989, private respondent filed a "Manifestation/Motion" before MTC praying that the
issues raised in the motion for preliminary hearing, apparently because it was in the nature of a motion to
dismiss, be first resolved instead of rendering judgment on the pleadings. Thereafter, on November 10,
1989, private respondent received a copy of the decision of the MTC, hence he filed a notice of appeal to
the Regional Trial Court of Laguna on November 20, 1989. On December 5, 1989, petitioner filed before
said court a motion for execution pending appeal

RTC: issued a writ of execution


On December 29, 1989, private respondent filed with the Court of Appeals a petition for certiorari, with a
prayer for the issuance of a writ of preliminary injunction, assailing the aforesaid order of execution
pending appeal on the ground that petitioner failed to furnish private respondent with a copy of the
motion therefor led by it in the aforementioned Civil Case No. B-3201, contrary to Section 6, Rule 15 of
the Rules of Court, hence the invalidity of the lower court order of December 14, 1989 which granted the
writ of execution.

CA: rendered judgment on May 31, 1990 setting aside the questioned order for being violative of the
requirement in Section 6, Rule 15 of the Rules of Court which provides that no motion shall be acted
upon by the court without proof of prior notice thereof to the adverse party. Aside from annulling the
controversial order, however, respondent court likewise annulled the judgment of the court a quo in Civil
Case No. 2473, which judgment is pending on appeal in Civil Case No. B-3201 of the aforesaid regional
trial court. Respondent court granted the second additional relief on the ground that the decision is
contrary to the agreement of the parties which should be considered the law between them.

Petitioner: that the Court of Appeals overstepped the bounds of its authority in annulling the decision of
the municipal trial court even if said decision was not an issue raised by private respondent in CA-G.R.
SP No. 19582 and which decision is in fact pending on appeal with the regional trial court.

Respondent: issue of the merits of the judgment of the municipal trial court was sufficiently raised and
controverted, hence respondent court was not in error when it passed judgment on the same. Moreover,
private respondent makes the riposte that it is a cherished rule in procedural law that a controversy should
be settled in one single proceeding in order to avoid multiplicity of suits.

*(RTC and CA ruled only on issues under Rule 15)

ISSUE: WON the lower court committed a grave abuse of discretion or exceeded its jurisdiction when it
failed to conduct a preliminary hearing, as prayed for in private respondent's "Motion for Preliminary
Hearing as if a Motion to Dismiss Has Been filed," before summarily rendering judgment on the merits of
the case.

HELD: No. The said motion of private respondent is anchored on the ground that the complaint allegedly
states no cause of action since the original term of 25 years stipulated in the contract of lease had not yet
expired and assuming that it had expired, private respondent had made known to petitioner his exclusive
option to renew it for another 25 years.

Section 5, Rule 16 of the Rules of Court pertinently provides:

"SECTION 5. Pleading grounds as affirmative defenses. Any of the grounds for dismissal provided for
in this Rule, except improper venue, may be pleaded as an affirmative defense, and a preliminary hearing
may be had thereon as if a motion to dismiss had been filed."
The aforequoted provision allows the grounds for a motion to dismiss to be set up as affirmative defenses
in the answer if no motion to dismiss has been filed. However, contrary to the claim of private respondent,
the preliminary hearing permitted under the said provision is not mandatory even when the same is
prayed for. It rests largely on the sound discretion of the trial court. The use of the word "may" in said
provision shows that such a hearing is not a matter of right demandable from the trial court. Where the
provision reads "may," this word shows that it is not mandatory but discretional. It is an auxiliary verb
indicating liberty, opportunity, permission and possibility.

Moreover, a preliminary hearing on an affirmative defense for failure to state a cause of action is not
necessary. As we have ruled in Heirs of Juliana Clavano vs. Genato, et al.: It is a well-settled rule that in
a motion to dismiss based on the ground that the complaint fails to state a cause of action, the question
submitted to the court for determination is the sufficiency of the allegations in the complaint itself.
Whether those allegations are true or not is beside the point, for their truth is hypothetically admitted by
the motion. The issue rather is: admitting them to be true, may the court render a valid judgment in
accordance with the prayer of the complaint? Stated otherwise, the sufficiency of the cause of action must
appear on the face of the complaint in order to sustain a dismissal on this ground.

NPC vs. CA, 185 SCRA 169 (1990)

DOCTRINE:

The ordinary procedure would have been to file an answer, go to trial and if the decision is
adverse, reiterate the issue on appeal. But this general rule is subject to certain exceptions,
among which are, if the court in denying the motion to dismiss acts without or in excess of
jurisdiction or with grave abuse of discretion.

FACTS:

Herein petitioner FINE Chemicals (Phils.) Inc. (FINE) is a corporation registered with the Board
of Investments (BOI). It filed an application for direct power connection with herein co-petitioner
National Power Corporation (NPC). NPC, acting on the same, wrote a letter to herein private
respondent Manila Electric Company (MERALCO) stating that as per Memorandum of
Understanding between NPC and BOI, the NPC is authorized to connect directly to its system
qualified industrial consumers. However, due to its policy not to compete directly with its
customers, NPC requests that it be informed whatever definite decision MERALCO is
contemplating on the requests of FINE for such direct connection. MERALCO, in a letter,
advised NPC that they are not in a position to grant the request since to allow large consumers
to tap directly to NPC will mean foregoing the share of the subsidy burden which will ultimately
be borne by the other remaining large consumers, and that it will also mean costly duplication of
facilities. NPC, informed MERALCO that in the absence of a clear-cut policy that will inhibit NPC
from acceding to the said request, NPC is now preparing and will put up the necessary facilities
to supply power to FINE; and that they are now negotiating the terms and conditions of the
supply which MERALCO, registered strong objection;
MERALCO filed with the Regional Trial Court of Pasig, a petition for Prohibition, Mandamus and
Damages with Preliminary Injunction against petitioners NPC and FINE.

On August 4, 1987, FINE filed its opposition to MERALCO's application for preliminary
injunction, maintaining that the application for injunctive relief had become moot and academic
since, prior to the ling of the petition, the direct power service had already been consummated
and the requisite power lines and facilities of NPC had long been installed and fully operational.
Accordingly, MERALCO amended its petition by incorporating therein an application for a writ of
preliminary mandatory injunction.

On August 11, 1987, FINE moved to dismiss the amended petition on the ground of insufficiency
of the allegations in the petition to plead a cause of action. NPC adopted FINE's motion to
dismiss.

RTC: denied the motion to dismiss stating that "The Motion to Dismiss is anchored on the
ground of lack of cause of action. Well settled rule is that when the motion to dismiss is
anchored on lack of cause of action, the facts alleged in the complaint are assumed and no
other fact can be considered in resolving said motion. After going carefully over the complaint,
the Court believes, and so holds, that if not properly traversed, it can render a valid judgment
thereon.

CA: dismissed the petition for certiorari, prohibition and mandamus. Hence, the instant petition.

ISSUE: WON MERALCO's petition in the lower court should be dismissed.

HELD: Yes. It is significant that this case is elevated to the Court of Appeals and now to this
Court because of the denial of petitioner's motion to dismiss the amended petition of
MERALCO. Unquestionably, it is but an incident to the main case and the ordinary procedure
would have been to file an answer, go to trial and if the decision is adverse, reiterate the issue
on appeal. But this general rule is subject to certain exceptions, among which are, if the court in
denying the motion to dismiss acts without or in excess of jurisdiction or with grave abuse of
discretion. The reason is, it would be unfair to require the defendant to undergo the ordeal and
expense of trial under such circumstances as the remedy of appeal would not be plain and
adequate. More importantly, petitioner's motion to dismiss is based on the ground that the
complaint states no cause of action, so that there is no need for a full blown trial.

In addition, applying the rule enunciated in Gayos v. Gayos (67 SCRA 146 [1975]) and
reiterated in Alger Electric, Inc. v. Court of Appeals, 135 SCRA 43 [1985]), that it is a
cherished rule of procedure for this Court to always strive to settle the entire controversy
in a single proceeding leaving no root or branch to bear the seeds of future litigation, it
appears that the disposition of the incident as well as the main issue in the case at bar
is in consonance with an efficient administration of justice.
Pacsports Phils., Inc. vs. Niccolo Sports, G.R. No. 141602, November 22, 2001

Doctrine:
Facts:
Petitioner and respondent entered into 2 separate Exclusive Retail Agreements by virtue of which
petitioner supplied respondent, on consignment basis, assorted Bridgestone and Cross Creek golf products
to be sold by the latter in its outlet situated at Shangri-La Plaza Shopping Mall.
Petitioner PPI claims that after months of operation, respondent's obligations to it amounted to
about P1.5 Million. Despite demand, respondent failed to pay and eventually, it pre-terminated the contracts.
This prompted petitioner to filed with the Makati RTC for damages with application for a writ of
replevin against respondent. (Civil Case No. 99-221)
Makati RTC: issued an order granting petitioners application for writ of replevin.
However, petitioner did not pursue the implementation of this writ because respondent concealed
the golf equipment to be seized.
Instead, on February 26, 1999, petitioner applied for the issuance of a writ of preliminary injunction
to compel respondent to turn over to petitioner the golf equipment and sales proceeds amounting to
P1,186,468.65.
Respondent filed with the RTC of Quezon City for "Breach and Confirmation of Termination of
Contracts and Damages" against petitioner. (Civil Case No. Q-99-36797)
Respondent, citing the pendency of the Quezon City case, filed with the Makati RTC a motion to
dismiss or suspend the proceedings in Civil Case No. 99-221.
Petitioner also filed with the Quezon City RTC a motion to dismiss Civil Case No. Q-99-36797 on
the ground of pendency of the Makati City case.
Makati RTC: issued an order denying respondent's motion to dismiss. In the same order, the Makati
Court granted petitioner's application for a writ of preliminary mandatory injunction.
Respondent filed a motion for reconsideration but was denied.
Meanwhile, the Quezon City RTC has not resolved petitioner's motion to dismiss.
In a petition for certiorari and prohibition, respondent questioned the orders of the Makati RTC
dated April 20, 1999 and May 6, 1999 before the Court of Appeals in CA-G.R. SP No. 52666.

CA: promulgated a decision directing the respondent judge to dismiss Civil Case NO. 99-221.
Issues: Which of the two cases should be dismissed by reason of litis pendentia - the Makati City case which was
filed earlier or the Quezon City case which was filed later. The Makati Case
Held:
One of two actions will be dismissed on ground of litis pendentia if the following requisites concur:
(a) identity of parties, or at least such as representing 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 (2)
cases should be such that judgment in one would amount to res judicata in the other.
The parties in the Makati case and the Quezon City case are the same. Petitioner is the plaintiff in
the Makati case and the defendant in the Quezon City case; and respondent is the defendant in the Makati
case and the plaintiff in the Quezon City case.
The rights asserted and the reliefs prayed for by petitioner in the Makati City case and the rights
asserted and the reliefs prayed for by respondent in the Quezon City case are all based on the validity of the
pre-termination of the Exclusive Retail Agreements.
In view of those similarities in the two actions, a final judgment on the merits in one would be a bar
against the other on the ground of res judicata.
When the elements of litis pendentia exist, the action filed later should be abated to avoid
multiplicity of suits. This is based on the maxim Qui prior est tempore, potior est jure (He who is before in
time is the better in right). This is the general rule.
In ordering the dismissal of the Makati City case filed earlier than the Quezon City case, the Court
of Appeals deviated from the said general rule.
The Court of Appeals gave the following reasons why it ruled that the Quezon City RTC is in a
better position to hear the case before it.

1. Both actions arose from the two (2) Exclusive Retail Agreements entered into by the parties, and
the asserted rights are founded on an identical set of facts;

2. There is a claim of breach of the said Agreements by one of the parties against the other; and

3. The Quezon City case involves a broader scope of inquiry as it goes to the pith of the controversy,
which is the pre-termination of the agreement.

The Court of Appeals correctly observed that: (1) both actions arose from the two (2) Exclusive
Retail Agreements entered into by the parties, and the asserted rights are founded on an identical set of
facts; and (2) there is a claim of breach of the said Agreements by one of the parties against the other.
However, we can not go along with the Court of Appeals in concluding that the Quezon City case "involves a
broader scope of inquiry" than the Makati case. The Appellate Court did not explain why the Quezon City
case is broader in scope than the Makati case. In fact, it did not point out the issues in the Quezon City case
that are not involved in the Makati case. It bears stressing that the only basic issue between the parties in
both cases is whether the pre-termination of the agreements is valid as claimed by respondent or invalid as
claimed by petitioner. As crafted, the complaints differ from each other in some details but such details are
mere incidents to the basic issue of the validity of the pre-termination of the exclusive retail agreements .
Clearly, the Quezon City RTC's deviation from the general rule can not be sustained on the ground that the
case before it involves a broader scope of inquiry.
We thus hold that the Makati City case must be reinstated and that the Quezon City case must be
dismissed.
There is another reason why the Quezon City case should be the one abated. The Makati RTC has
commenced proceedings in the case by issuing a writ of replevin and later, an order granting, after hearing,
petitioner's application for a writ of preliminary mandatory injunction.

Hacienda Bigaa, Inc. vs. Chavez, G.R. No. 174160, April 20, 2010

Doctrine:
Res judicata (First Concept) 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.
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
Facts:
Hacienda Bigaa filed with the MTC of Calatagan, Batangas a complaint for ejectment
(forcible entry) and damages with application for writ of preliminary injunction against Chavez,
who allegedly, entered by force, strategy, and/or stealth Hacienda Bigaas premises (cut barbed
wire, destroyed gate lock, built house on property).
According to Chavez, Hacienda Bigaa bought the lands in dispute from Ayala y Cia and
the Zobels. Hence, Bigaa is the successor-in-interest of the Ayala and Zobel-owned Hacienda
Calatagan. Previously, the state, Ayalas and Zobels claimed the lands. The Ayalas and Zobels had
a TCT over the lands in their favor (it should be noted that the disputed lands are those beyond
the original TCT of the Ayalas and Zobels they expanded their TCT to include beach,
foreshore and bay areas, and navigable waters Ill call this excess areas). On the other hand,
portions of the excess areas (Foreshore Lands), were leased by the Republic, through the Bureau
of Fisheries, to applicants in whose favor fishpond permits were issued. This gave rise to
ownership and/or possessory disputes between Hacienda Calatagan and the Republic.
Suits were filed in various courts in Batangas for the recovery of the areas. In Dizon v.
Rodriguez (quieting of title) and Republic v. Ayala y Cia (annulment of titles) , the excess areas of
the TCT were declared unregistrable lands of the public domain. The Ayalas and Zobels therefore
were found to be mere usurpers. In Republic v. De los Angeles, the same excess areas were under
a reinvidicatory claim of the Republic aimed at recovering the lands. The court held that the
Republic has the right to place its lessees and fishpond permittees among them Zoila
de Chavez, predecessor-in- interest and mother of respondent Chavez
Chavez mainly argued that the current suit is barred by prior judgment in 2 prior cases
a. unlawful detainer case against Zoila de Chavez, filed by the Zobels; b. accion reinvidicatoria
filed by Republic and Zoila de Chavez against the Zobels (de los Angeles Case). 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.
[
Issues:
1. Does Res Judicata apply?
2. Who has better right of possession?

Held/Ratio:

1. Yes, Res Judicata of the Second Kind applies. Res Judicata is set forth in Section 47 of
Rule 39. 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.

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

The dictum laid down in an 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.

Obviously, in this case, there is an identity of parties. Also, there is an identity of subject
matter (litigating the same properties). There is also identity of issues as all cases involve the
issue of ownership or better right of possession. Even if the present case is forcible entry while
the antecedent cases involve quieting, annulment of titles, and accion reinvidicatoria, 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.

2. Chavez has better right. The antecedent cases lay to rest the issues of ownership and of
possession. In the previous cases, the court ruled in favor of the Republic and its lessees and
permittees.

Fels Energy Inc. vs. Province of Batangas, G.R. No. 168557, February 19, 2007
GR No. 168557 (February 2007)
PETITIONGR No. 168557 (February 2007)
PETITIONER: FELS Energy Inc.
RESPONDENT: Province of Batangas

GR No. 170628 (February 2007)


PETITIONER: National Power Corporation
RESPONDENT: Local Board of Assessment Appeals of Batangas, Laura Andaya and Province of Batangas

Ponente: Callejo Sr. J

DOCTRINE: under Rule 16 - Motion to Dismiss


One of the grounds to file a Motion to Dismiss is Res Judicata under Sec. 1 (f) Rule 16 of the Rules of Court:
(f) That the cause of action is barred by a prior judgment and statute of limitations

In accordance to the doctrine of RES JUDICATA which has the following elements:
1. The former judgement must be final;
2. The court which rendered it had jurisdiction over the subject matter and the parties;
3. The judgement must be on the merits;
4. There must be between the first and the second actions. identity of parties. subject matter and causes of action.

The application of the doctrine of res judicata does not require absolute identity of parties but merely substantial identity
of parties. There is substantial identity of parties when there is community of interest or privity of interest between a party
in the first and a party in the second case even if the first case did not implead the latter.

FACTS:
**2 consolidated cases were filed by the petitioners (FELS) and NPC respectively.

NPC = entered into a lease contract (denominated as Energy Conversion Agreement) with Polar Energy Inc. over a diesel
engine power barges at Balayan Bayt in Calaca. Batangas for 5 years.
Polar Energy Inc = assigned its rights under the Agreement to FELS.
NPC = initially oppose the assignment rights under par. 17.2 Art, 17 of the Agreement
FELS = received an assessment on real property taxes on the power of barges from Provincial Assessor, Laura Andaya of
Batangas. The assessed tax due for 1994 amounted to approximately P56M per annum.
FELS referred the matter to NPC, reminding its obligation under the agreement to pay all real estate taxes.
NPC = then given a full power and authority to represent it in any conference regarding the real property assessment of the
Provincial Assessor.
NPC = in a letter, sought reconsideration of the Provincial Assessors decision to assess the real property taxes on power
barges. But MOTION WAS DENIED and latter advised NPC to pay the assessment. Thus, prompted NPC to file a petition
with the Local Board of Assessment Appeals (LBAA) for setting aside of the assessment and declaring such barges as
non-taxable items, further prayed should LBAA find the barges taxable. Provincial Assessor be directed to make
necessary corrections.
Provincial Assessor = In its Answer averred that the barges were real property for purposes of taxation.

**Before the case was decided by the LBAA.


NPC = filed a manifestation, informing the LBAA that the Dept. of Finance rendered an opinion that the said power barges
are NOT real property subject to real property assessment.
LBAA = DENIED Petition of NPC on the grounds that:
(1) Power plant facilities are considered real property for taxation purposes because they are considered real property for
taxation purposes because they are installed at a specific location with a character of permanency;
(2) LBAA further points out that the owner of the barges. FELS. a private corporation, is the one being taxed and not NPC
on the ground that a mere agreement making NPC responsible for real property tax and assessment will not justify the
exemption of FELS;
(3) Lastly. the petition is filed out of time.
FELS = appealed LBAAs ruling to Central Board of Assessment Appeals (CBAA).
Provincial Treasurer of Batangas = issued a Notice of Levy and Warrant by Distraint over the power Barges, seeking to
collect real property taxes amounting to approximately P232M as of 1996. The notice and the warrant was officially served
to FELS.
FELS = filed a Motion to Lift Levy, praying that provincial Assessor be further restrained by the CBAA from enforcing the
disputed assessment during the pendency of the appeal.
CBAA = lifted the levy and distraint on FELS properties for it not to preempt and render ineffectual, nugatory and illusory
resolution.
in the meantime NPC = filed a Motion for Intervention before CBAA, CBAA approved the same.

**During the pendency of the case. both FELS and NPC tried several motions to admit bond to guarantee the payment of
real property taxes assessed by the Provincial Assessor. The Bonds were approved by the CBAA.
CBAA = found barges exempt from real property tax because:
(1) Power barges belong to NPC:
(2) Since FELS and NPOC are actually. directly and exclusively used by it, the power barges are covered by the exemption
under Sec. 234 (c) of RA 7160
(3) The jurisdictional issue, the prescription did not preclude the NPC from pursuing its claim for tax exemption in
accordance with Sec. 206 of RA 7160.
Provincial Assessor = filed MR which was opposed by FELS and NPC
CBAA = issued a resolution reversing its earlier decision
(1) Petition of FELS intervened by NPC were dismissed;
(2) Affirmed LBAA resolution,
(3) and the real property tax assessment on FELS by Provincial Assessor is affirmed
FELS and NPC = filed separate MR which were timely opposed by Provincial Assessor.
CBAA = denied said motions in a resolution
FELS = filed a petition for review before the CA
NPC = (1) Filed separate petition (2) Filed Manifestation/Motion for Consolidation of its petition with its separate motion
CA = In its resolution. directed NPC to re-file its motion for consolidation since it is the ponente of the latter case who
should resolve the request for reconsideration.
NPC = failed to comply with the resolution
CA = denied the petition on the ground of prescription.
FELS = timely filed a Motion for Reconsideration seeking for the reversal of CAs decision in its petition for review.
NPC = filed a petition for review before SC assailing the decision of CA.
SC = petition was denied, due to NPC's failure to sufficiently show that CA committed a reversible error in the challenged
decision
NPC = filed Motion for Reconsideration, which the SC denied with finality.
CA = dismissed the petition separate petition of NPC, held that the right to question the assessment of the Provincial
Assessor had already prescribed upon failure of FELS to appeal the disputed assessment to LBAA within the prescriptive
period fixed by law. Since FELS lost the right to question the assessment. The right of the Provincial Government to
collect the tax was already absolute,
NPC = filed Motion for Reconsideration but motion was DENIED for lack of merit.

**Hence. FELS filed a petition before the SC in 2005 and thereafter in the year 2006 NPC flied its own petition for review
before the SC.

ISSUE:
WON there is an existence of res judicata in the consolidated cases in order that petitioners are guilty of Forum Shopping.

HELD: YES.
Both cases have similar facts; SC ordered the consolidation of the 2 cases in a resolution. Wherefore. the Petitions are
DENIED and assailed decisions and resolutions are affirmed.

RATIO DECIDENDI:
Res judicata pervades every organized system of jurisprudence and is founded upon two grounds embodied in various
maxims of common law, namely:
(1) public policy and necessity. which makesittothe iritorestofthesmmatthereshouldbeanendto
litigation- republicae ut sit litium; and
(2)the hardship on the individual of being vexed twice for the same cause nemo debet bis vexari et eadem causa.

As we ruled in Heirs of Trinidad De Leon Vda. de Roxas v. Court of Appeals:


x x x An existing final judgment or decree rendered upon the merits, without fraud or collusion, by a court of
competent jurisdiction acting upon a matter within its authority is conclusive on the rights of the parties and
their privies. This ruling holds in all other actions or suits, in the same or any other judicial tribunal of
concurrent jurisdiction, touching on the points or matters in issue in the first suit.

The application of the doctrine of res judicata does not require absolute identity of parties but merely substantial identity
of parties. There is substantial identity of parties when there is community of interest or privity of interest between a party
in the first and a party in the second case even if the first case did not implead the latter.

To recall, FELS gave NPC the full power and authority to represent it in any proceeding regarding real property
assessment. Therefore, when petitioner NPC filed its petition for review docketed as G.R. No. 165113, it did so not only on
its behalf but also on behalf of FELS. Moreover, the assailed decision in the earlier petition for review filed in this Court
was the decision of the appellate court in CA-G.R. SP No. 67490, in which FELS was the petitioner. Thus, the decision in
G.R. No. 165116 is binding on petitioner FELS under the principle of privity of interest. In fine, FELS and NPC are
substantially "identical parties" as to warrant the application of res judicata. FELSs argument that it is not bound by the
erroneous petition filed by NPC is thus unavailing.
Forum shopping exists when, as a result of an adverse judgment in one forum, a party seeks another and possibly
favorable judgment in another forum other than by appeal or special civil action or certiorari. There is also forum shopping
when a party institutes two or more actions or proceedings grounded on the same cause, on the gamble that one or the
other court would make a favorable disposition.

Indeed, petitioners went from one court to another trying to get a favorable decision from one of the tribunals which
allowed them to pursue their cases.

It must be stressed that an important factor in determining the existence of forum shopping is the vexation caused to the
courts and the parties-litigants by the filing of similar cases to claim substantially the same reliefs. The rationale against
forum shopping is that a party should not be allowed to pursue simultaneous remedies in two different fora. Filing multiple
petitions or complaints 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 courts.

Thus, there is forum shopping when there exist:


(a) identity of parties, or at least such parties as represent the same interests in both actions,
(b) identity of rights asserted and relief prayed for, the relief being founded on the same facts, and
(c) the identity of the two preceding particulars is such that any judgment rendered in the pending case, regardless of
which party is successful, would amount to res judicata in the other.

Having found that the elements of res judicata and forum shopping are present in the consolidated cases, a discussion of
the other issues is no longer necessary. Nevertheless, for the peace and contentment of petitioners, we shall shed light on
the merits of the case. As found by the appellate court, the CBAA and LBAA power barges are real property and are thus
subject to real property tax. This is also the inevitable conclusion, considering that G.R. No. 165113 was dismissed for
failure to sufficiently show any reversible error.

FELS ENERGY INC vs PROVINCE OF BATANGAS


GR NO. 168557 (February 2007)
PETITIONER: FELS Energy Inc.
RESPONDENT: Province of Batangas

GR No. 170628 (February 2007)


PETITIONER: National Power Corporation
RESPONDENT: Local Board of Assessment Appeals of Batangas, Laura Andaya and Province of Batangas

Ponente: Callejo Sr. J

DOCTRINE: under Rule 16 - Motion to Dismiss


One of the grounds to file a Motion to Dismiss is Res Judicata under Sec. 1 (f) Rule 16 of the Rules of Court:
(f) That the cause of action is barred by a prior judgment and statute of limitations

In accordance to the doctrine of RES JUDICATA which has the following elements:
1. The former judgement must be final;
2. The court which rendered it had jurisdiction over the subject matter and the parties;
3. The judgement must be on the merits;
4. There must be between the first and the second actions. identity of parties. subject matter and causes of action.

The application of the doctrine of res judicata does not require absolute identity of parties but merely substantial identity
of parties. There is substantial identity of parties when there is community of interest or privity of interest between a party
in the first and a party in the second case even if the first case did not implead the latter.

FACTS:
**2 consolidated cases were filed by the petitioners (FELS) and NPC respectively.

NPC = entered into a lease contract (denominated as Energy Conversion Agreement) with Polar Energy Inc. over a diesel
engine power barges at Balayan Bayt in Calaca. Batangas for 5 years.
Polar Energy Inc = assigned its rights under the Agreement to FELS.
NPC = initially oppose the assignment rights under par. 17.2 Art, 17 of the Agreement
FELS = received an assessment on real property taxes on the power of barges from Provincial Assessor, Laura Andaya of
Batangas. The assessed tax due for 1994 amounted to approximately P56M per annum.
FELS referred the matter to NPC, reminding its obligation under the agreement to pay all real estate taxes.
NPC = then given a full power and authority to represent it in any conference regarding the real property assessment of the
Provincial Assessor.
NPC = in a letter, sought reconsideration of the Provincial Assessors decision to assess the real property taxes on power
barges. But MOTION WAS DENIED and latter advised NPC to pay the assessment. Thus, prompted NPC to file a petition
with the Local Board of Assessment Appeals (LBAA) for setting aside of the assessment and declaring such barges as
non-taxable items, further prayed should LBAA find the barges taxable. Provincial Assessor be directed to make
necessary corrections.
Provincial Assessor = In its Answer averred that the barges were real property for purposes of taxation.

**Before the case was decided by the LBAA.


NPC = filed a manifestation, informing the LBAA that the Dept. of Finance rendered an opinion that the said power barges
are NOT real property subject to real property assessment.
LBAA = DENIED Petition of NPC on the grounds that:
(1) Power plant facilities are considered real property for taxation purposes because they are considered real property for
taxation purposes because they are installed at a specific location with a character of permanency;
(2) LBAA further points out that the owner of the barges. FELS. a private corporation, is the one being taxed and not NPC
on the ground that a mere agreement making NPC responsible for real property tax and assessment will not justify the
exemption of FELS;
(3) Lastly. the petition is filed out of time.
FELS = appealed LBAAs ruling to Central Board of Assessment Appeals (CBAA).
Provincial Treasurer of Batangas = issued a Notice of Levy and Warrant by Distraint over the power Barges, seeking to
collect real property taxes amounting to approximately P232M as of 1996. The notice and the warrant was officially served
to FELS.
FELS = filed a Motion to Lift Levy, praying that provincial Assessor be further restrained by the CBAA from enforcing the
disputed assessment during the pendency of the appeal.
CBAA = lifted the levy and distraint on FELS properties for it not to preempt and render ineffectual, nugatory and illusory
resolution.
in the meantime NPC = filed a Motion for Intervention before CBAA, CBAA approved the same.

**During the pendency of the case. both FELS and NPC tried several motions to admit bond to guarantee the payment of
real property taxes assessed by the Provincial Assessor. The Bonds were approved by the CBAA.
CBAA = found barges exempt from real property tax because:
(1) Power barges belong to NPC:
(2) Since FELS and NPOC are actually. directly and exclusively used by it, the power barges are covered by the exemption
under Sec. 234 (c) of RA 7160
(3) The jurisdictional issue, the prescription did not preclude the NPC from pursuing its claim for tax exemption in
accordance with Sec. 206 of RA 7160.
Provincial Assessor = filed MR which was opposed by FELS and NPC
CBAA = issued a resolution reversing its earlier decision
(1) Petition of FELS intervened by NPC were dismissed;
(2) Affirmed LBAA resolution,
(3) and the real property tax assessment on FELS by Provincial Assessor is affirmed
FELS and NPC = filed separate MR which were timely opposed by Provincial Assessor.
CBAA = denied said motions in a resolution
FELS = filed a petition for review before the CA
NPC = (1) Filed separate petition (2) Filed Manifestation/Motion for Consolidation of its petition with its separate motion
CA = In its resolution. directed NPC to re-file its motion for consolidation since it is the ponente of the latter case who
should resolve the request for reconsideration.
NPC = failed to comply with the resolution
CA = denied the petition on the ground of prescription.
FELS = timely filed a Motion for Reconsideration seeking for the reversal of CAs decision in its petition for review.
NPC = filed a petition for review before SC assailing the decision of CA.
SC = petition was denied, due to NPC's failure to sufficiently show that CA committed a reversible error in the challenged
decision
NPC = filed Motion for Reconsideration, which the SC denied with finality.
CA = dismissed the petition separate petition of NPC, held that the right to question the assessment of the Provincial
Assessor had already prescribed upon failure of FELS to appeal the disputed assessment to LBAA within the prescriptive
period fixed by law. Since FELS lost the right to question the assessment. The right of the Provincial Government to
collect the tax was already absolute,
NPC = filed Motion for Reconsideration but motion was DENIED for lack of merit.

**Hence. FELS filed a petition before the SC in 2005 and thereafter in the year 2006 NPC flied its own petition for review
before the SC.

ISSUE:
WON there is an existence of res judicata in the consolidated cases in order that petitioners are guilty of Forum Shopping.

HELD: YES.
Both cases have similar facts; SC ordered the consolidation of the 2 cases in a resolution. Wherefore. the Petitions are
DENIED and assailed decisions and resolutions are affirmed.

RATIO DECIDENDI:
Res judicata pervades every organized system of jurisprudence and is founded upon two grounds embodied in various
maxims of common law, namely:
(1) public policy and necessity. which makesittothe iritorestofthesmmatthereshouldbeanendto
litigation- republicae ut sit litium; and
(2)the hardship on the individual of being vexed twice for the same cause nemo debet bis vexari et eadem causa.

As we ruled in Heirs of Trinidad De Leon Vda. de Roxas v. Court of Appeals:


x x x An existing final judgment or decree rendered upon the merits, without fraud or collusion, by a court of
competent jurisdiction acting upon a matter within its authority is conclusive on the rights of the parties and
their privies. This ruling holds in all other actions or suits, in the same or any other judicial tribunal of
concurrent jurisdiction, touching on the points or matters in issue in the first suit.

The application of the doctrine of res judicata does not require absolute identity of parties but merely substantial identity
of parties. There is substantial identity of parties when there is community of interest or privity of interest between a party
in the first and a party in the second case even if the first case did not implead the latter.

To recall, FELS gave NPC the full power and authority to represent it in any proceeding regarding real property
assessment. Therefore, when petitioner NPC filed its petition for review docketed as G.R. No. 165113, it did so not only on
its behalf but also on behalf of FELS. Moreover, the assailed decision in the earlier petition for review filed in this Court
was the decision of the appellate court in CA-G.R. SP No. 67490, in which FELS was the petitioner. Thus, the decision in
G.R. No. 165116 is binding on petitioner FELS under the principle of privity of interest. In fine, FELS and NPC are
substantially "identical parties" as to warrant the application of res judicata. FELSs argument that it is not bound by the
erroneous petition filed by NPC is thus unavailing.

Forum shopping exists when, as a result of an adverse judgment in one forum, a party seeks another and possibly
favorable judgment in another forum other than by appeal or special civil action or certiorari. There is also forum shopping
when a party institutes two or more actions or proceedings grounded on the same cause, on the gamble that one or the
other court would make a favorable disposition.

Indeed, petitioners went from one court to another trying to get a favorable decision from one of the tribunals which
allowed them to pursue their cases.

It must be stressed that an important factor in determining the existence of forum shopping is the vexation caused to the
courts and the parties-litigants by the filing of similar cases to claim substantially the same reliefs. The rationale against
forum shopping is that a party should not be allowed to pursue simultaneous remedies in two different fora. Filing multiple
petitions or complaints 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 courts.

Thus, there is forum shopping when there exist:


(a) identity of parties, or at least such parties as represent the same interests in both actions,
(b) identity of rights asserted and relief prayed for, the relief being founded on the same facts, and
(c) the identity of the two preceding particulars is such that any judgment rendered in the pending case, regardless of
which party is successful, would amount to res judicata in the other.

Having found that the elements of res judicata and forum shopping are present in the consolidated cases, a discussion of
the other issues is no longer necessary. Nevertheless, for the peace and contentment of petitioners, we shall shed light on
As found by the appellate court, the CBAA and LBAA power barges are real
the merits of the case.
property and are thus subject to real property tax. This is also the inevitable conclusion,
considering that G.R. No. 165113 was dismissed for failure to sufficiently show any reversible error.

Yuvienco vs. Dacuycuy, 104 SCRA 668


G.R. No. L-55048 May 27, 1981
Ponente: BARREDO, J.
FACTS:
Petitioners (Sotto Yuvienco) who are owners of a parcel of land and the building existing thereon
situated in Leyte expressed their intention to sell the property to its tenants as preferential buyers for a
total price of P6,500,000.00. Such intention was manifested in a letter sent by the petitioners legal
representative Atty. Pedro Gamboa. Tenants/occupants were given 19 days within which to decide
whether they want to buy the property or not.
Within the given time allotted, a reply was sent to Atty. Gamboa in Cebu City through telegram
by private respondents (Yao King Ong & tenants) with the following words we agree to buy property
proceed Tacloban to negotiate details. Atty. Gamboa likewise wired a message to Yao King Ong stating
that the proposal has been accepted and that he will arrive with the contract and instructed them "to
prepare payment bank draft.
Atty. Gamboa arrived in Leyte with the prepared contract to purchase and to sell. However,
private respondents found variance between the terms of payment and what they had in mind. The
contract stated that P2,000,000.00 shall be paid in full and the remaining balance of P4,500,000 to be
settled within thirty (30) days from execution of the contract. The buyers insist that what was agreed upon
with respect to the balance is that it shall be payable within ninety (90) days.
Hence the bank draft being offered for payment was returned and the document remained
unsigned by the buyers.
Private respondents (buyers) filed an action for specific performance in the Court of First
Instance of Leyte to compel the petitioners (seller) to sell the property under the terms alleged by the
respondents (90 days).
Petitioners filed a motion to dismiss the complaint on the grounds that the complaint states no
cause of action and/or that the claim alleged therein is unenforceable under the Statute of Frauds.
Respondent judge ruled negatively on the motion;
Hence petitioner filed a petition for certiorari and prohibition (Rule 65) with the Supreme Court.

ISSUE: Whether or not denial by the lower court of the motion to dismiss predicated on the above
mentioned grounds is proper.
RULING: No.
Supreme Court ruled that the complaint filed by the respondents does not state a cause of action.
There was no perfected contract of sale in light of the letter of Atty. Gamboa, and the reply thereto of Yao.
It is doubtful as to whether or not, under Art. 1319 (consent) of the Civil Code, the said letter may be
deemed as an offer to sell that is certain, and more, the Yao telegram being far from an absolute
acceptance under said article.

Action for Specific Performance


Though it may appear that there still is a cause of action based on the allegation of the
respondents that there was an agreement on the terms (that the balance is payable within 90 days) and
such was violated by the petitioner when the deeds prepared contained a different term (30 days), the
court is still confronted with the question as to whether or not the claim for specific performance of
respondents is enforceable under the Statute of Frauds.
The 90-day term for the balance insisted upon by the respondents does not appear in any note,
writing, or memorandum. Hence, looking at the pose of respondents that there was a perfected agreement
of purchase & sale--between them and petitioners under the said terms (90 days) which must be honored,
it is evident that such oral contract involving the sale of real property comes squarely under the Statute
of Frauds (Article 1403, 2(e), Civil code: Sale of real property an agreement which must be in writing,
and subscribed by the party charged).

DOCTRINE: Motion to Dismiss and Statute of Frauds


Unlike when the ground of dismissal alleged is failure of the complaint to state a cause of action, a
motion to dismiss invoking the Statute of Frauds may be filed even if the absence of compliance (in
the Statute of Frauds) does not appear on the face of the complaint. Such absence may be the
subject of proof in the motion stage of the proceedings. It follows that when such a motion is filed, it
becomes incumbent upon the plaintiff to bring out what note or memorandum is still in his
possession to prove compliance with the Statute to enable the court to expeditiously determine then
and there the need for further proceedings. To await the stage of trial for the showing or
presentation of the requisite documentary proof would encourage undue delay in litigation with
concomitant waste of time and the prolongation of the proceeding, while it is something that can
immediately be evidenced and thereby determinable with decisiveness and precision by the court
without delay.

Bank of America vs. CA, 400 SCRA 156


G.R. No. 120135 March 31, 2003
BANK OF AMERICA NT & SA, BANK OF AMERICA INTERNATIONAL, LTD.,
petitioners, vs. COURT OF APPEALS, HON. MANUEL PADOLINA, EDUARDO
LITONJUA, SR., and AURELIO K. LITONJUA, JR., respondents.

FACTS
The Litonjuas filed a Complaint before the RTC of Pasig against the
Bank of America NT&SA and Bank of America International, Ltd. (defendant
banks for brevity) alleging that:
they were engaged in the shipping business through their
wholly-owned corporations;
they deposited their revenues from said business together
with other funds with the branches of said banks in the United
Kingdom and Hongkong up to 1979;
the defendant banks acquired, through their (Litonjuas')
corporations as the borrowers 4 vessels which were registered in the
names of their corporations;
the operation and the funds derived therefrom were
placed under the complete and exclusive control and disposition of the
petitioners; and the possession the vessels was also placed by
defendant banks in the hands of persons selected and designated by
them (defendant banks).
because of the breach of their fiduciary duties and/or negligence of the
petitioners and/or the persons designated by them in the operation of private
respondents' six vessels, the revenues derived from the operation of all the
vessels declined drastically;
all the six vessels, (including the two vessels originally owned by the
private respondents), were foreclosed and sold at public auction to answer for
the obligations incurred for and in behalf of the operation of the vessels;
The Litonjuas lost sizeable amounts of their own personal funds
equivalent to ten percent (10%) of the acquisition cost of the four vessels and
were left with the unpaid balance of their loans with defendant banks.
The Litonjuas prayed for the accounting of the revenues derived in the
operation of the six vessels and of the proceeds of the sale thereof at the
foreclosure proceedings instituted by petitioners; damages for breach of
trust; exemplary damages and attorney's fees.
Defendant banks filed a Motion to Dismiss on grounds of forum non
conveniens and lack of cause of action against them.

Trial Court Ruling & CA Ruling


denied the Motion to Dismiss and Motions for Reconsideration. Hence
this petition (Petition for Review on Certiorari under Rule 45)

Issues
Private respondents as mere stockholders have no personalities to sue
forum non conveniens
private repondents are guilty of forum shopping
Petitioners Arguments
borrowers and the registered owners of the vessels are the foreign
corporations and not private respondents Litonjuas who are mere
stockholders. Hence, petitioners maintain that these foreign corporations are
the legal entities that have the personalities to sue and not herein private
respondents;
The Bank of America Branches involved are based in
Hongkong and England
The loan transactions were obtained, perfected,
performed, consummated and partially paid outside the Philippines;
The monies were advanced outside the Philippines.
Furthermore, the mortgaged vessels were part of an offshore fleet, not
based in the Philippines;
All the loans involved were granted to the Private
Respondents' foreign CORPORATIONS;
The Restructuring Agreements were ALL governed by the
laws of England;
The subsequent sales of the mortgaged vessels and the
application of the sales proceeds occurred and transpired outside the
Philippines, and the deliveries of the sold mortgaged vessels were
likewise made outside the Philippines;
The revenues of the vessels and the proceeds of the sales
of these vessels were ALL deposited to the Accounts of the foreign
CORPORATIONS abroad; and
Bank of America International Ltd. is not licensed nor
engaged in trade or business in the Philippines.
Petitioners argue further that the loan agreements, security
documentation and all subsequent restructuring agreements uniformly,
unconditionally and expressly provided that they will be governed by the laws
of England
Petitioners insist that the inconvenience and difficulty of applying
English law with respect to a wholly foreign transaction in a case pending in
the Philippines may be avoided by its dismissal on the ground of forum non
conveniens
that private respondents have already waived their alleged causes of
action in the case at bar for their refusal to contest the foreign civil cases
earlier filed by the petitioners against them in Hongkong and England and
that private respondents' alleged cause of action is already barred by the
pendency of another action or by litis pendentia

Respondents arguments
that the prefatory statement failed to state that part of the security of
the foreign loans were mortgages on a 39-hectare piece of real estate located
in the Philippines
the corporate borrowers are wholly-owned by the private respondents
who are Filipinos
that as upheld by the Court of Appeals, the decision of the trial court in
not applying the principle of forum non conveniens is in the lawful exercise of
its discretion.
that the statement of petitioners that the doctrine of res judicata also
applies to foreign judgment is not based on a categorical ruling of this Court;
respondents did not actually participate in the proceedings in the
foreign courts.

SC Ruling
petition denied for lack of merit.

First issue : personality to sue


Petitioners' argument that private respondents, being mere
stockholders of the foreign corporations, have no personalities to sue, and
therefore, the complaint should be dismissed, is untenable.
Doctrine : A case is dismissible for lack of personality to sue
upon proof that the plaintiff is not the real party-in-interest. Lack of
personality to sue can be used as a ground for a Motion to Dismiss
based on the fact that the complaint, on the face thereof, evidently
states no cause of action.
In the case at bar, the complaint contains the three elements of a
cause of action. It alleges that: (1) plaintiffs, herein private respondents, have
the right to demand for an accounting from defendants (herein petitioners),
as trustees by reason of the fiduciary relationship that was created between
the parties involving the vessels in question; (2) petitioners have the
obligation, as trustees, to render such an accounting; and (3) petitioners
failed to do the same.
To emphasize, it is not the lack of absence of cause of action that is a
ground for dismissal of a complaint, but rather, the fact that the complaint
states no cause of action. Failure to state a cause of action refers to the
insufficiency of allegation in the pleading, unlike lack of cause of action
which refers to the insufficiency of factual basis for the action. Failure to
state a cause of action may be raised at the earliest stages of an action
through a motion to dismiss the complaint, while lack of cause of action
may be raised any time after the questions of fact have been resolved on the
basis of stipulations, admissions or evidence presented.

Second Issue : forum non conveniens


The doctrine of forum non-conveniens, literally meaning 'the forum is
inconvenient', emerged in private international law to deter the practice of
global forum shopping, that is to prevent non-resident litigants from choosing
the forum or place wherein to bring their suit for malicious reasons, such as
to secure procedural advantages, to annoy and harass the defendant, to
avoid overcrowded dockets, or to select a more friendly venue.
Under this doctrine, a court, in conflicts of law cases, may refuse
impositions on its jurisdiction where it is not the most "convenient" or
available forum and the parties are not precluded from seeking remedies
elsewhere.
Doctrine: the doctrine of forum non conveniens should not be
used as a ground for a motion to dismiss because Sec. 1, Rule 16 of
the Rules of Court does not include said doctrine as a ground. This
Court further ruled that while it is within the discretion of the trial
court to abstain from assuming jurisdiction on this ground, it should
do so only after vital facts are established, to determine whether
special circumstances require the court's desistance; and that the
propriety of dismissing a case based on this principle of forum non
conveniens requires a factual determination, hence it is more
properly considered a matter of defense.

Third issue : forum shopping because of the pendency of foreign action


not all the requirements for litis pendentia are present. While there
may be identity of parties, notwithstanding the presence of other
respondents, as well as the reversal in positions of plaintiffs and defendants,
still the other requirements necessary for litis pendentia were not shown by
petitioner. It merely mentioned that civil cases were filed in Hongkong and
England without however showing the identity of rights asserted and the
reliefs sought for as well as the presence of the elements of res judicata
should one of the cases be adjudged.

Associated Bank vs. Spouses Montano, 604 SCRA 134


G.R. No. 166383 October 16, 2009
ASSOCIATED BANK vs SPOUSES JUSTINIANO S. MONTANO, SR., AND
LIGAYA MONTANO and TRES CRUCES AGRO-INDUSTRIAL CORPORATION

FACTS
In 1964, spouses Montanos owned 3 parcels of land situated in Cavite
utilized as an integrated farm and as a stud farm used for raising horses
Justiniano was then serving as congressman of Cavite and as minority
floor leader
In 1972, when then President Marcos placed the country under martial
law, Justiniano went on self-exile to the US to avoid the harassment and
threats made against him by the dictator
while still in the US, the Montanos transferred the said properties to
Tres Cruces Agro-Industrial Corporation (TCAIC) in exchange for shares of
stock in the company, allowing the Montanos to control 98% of the
stockholdings of TCAIC
the certificates of title registered in the name of the Montanos were
cancelled and were replaced with transfer certificates of title (TCTs) in TCAICs
name
A year later, TCAIC sold and transferred TCT of the properties to
International Country Club, Inc. (ICCI)
ICCI immediately mortgaged the parcels of land to Citizens Bank and
Trust Co. (later renamed as Associated Bank)
The loan matured but remained unpaid, prompting Associated Bank to
foreclose the mortgage
The properties were then put on public auction and were sold to
Associated Bank, the sole and highest bidder
Ownership over the said properties was consolidated by Associated
Bank and, new TCTs were issued in its name
in 1986, following the ouster of Marcos, the Montanos returned to the
country. After discovering the transfer of the properties, the Montanos
immediately took physical possession of the same and began cultivating the
land
the Montanos filed an action for reconveyance of title against herein
petitioner, praying, in sum, that the transfer of the properties from TCAIC to
ICCI, and from ICCI to Associated Bank, be declared null and void
that the transfer of the parcels of land to TCAIC was done
only to avoid the confiscatory acts being applied by the dictator
against the Montanos properties, in retaliation for the latters open
opposition to Marcos
that TCAIC was only forced to sell the properties to ICCI
after the latter intimidated and threatened the relatives of the
Montanos
Associated Bank filed an Answer setting forth affirmative defenses.
that the complaint did not state a cause of action
that the allegation of threat and intimidation was not
averred with particularity;
that the bank was an innocent purchaser for value;
and that, even if the complaint stated a cause of action,
the same had already prescribed or had been barred by estoppel and
laches

Eight (8) years after Associated Bank filed its answer and while the case was still on
its pretrial stage, the bank filed a Motion for Preliminary Hearing on the Affirmative
Defenses and/or Motion to Dismiss
that the complaint stated no cause of action;
and that the case was already barred by the statute of limitations

RTCs Ruling
dismissed the complaint
the instant case is barred by the statute of limitations
An action for reconveyance of real property resulting from fraud may
be barred by the statute of limitations, which requires that the action shall be
filed within four (4) years from the discovery of the fraud
plaintiffs waited for a period of around fourteen (14) years or at least
around twelve (12) years from the date of the issuance of the certificates of
title before filing the instant complaint in 1989
Respondents moved for reconsideration, but the trial court denied the same

CAs Ruling
CA reversed the RTCs ruling and reinstated the case for further
proceedings
The fact that the bank was a buyer in good faith is not known until trial
is held and evidence presented. That is why it is necessary that the parties be
heard.
The court fails to follow the basic and simple rule that in resolving a
motion to dismiss based on insufficiency of the complaint, it must
hypothetically admit the facts alleged.

Associated Bank moved for reconsideration


that the cause of action of the Montanos had already prescribed
failure of the Montanos to file a comment on or an objection to the
motion to dismiss despite opportunity to do so should be construed as a
waiver in contesting the allegations and affirmative defenses raised by
Associated Bank.

The CA, however, denied the motion for reconsideration.

Issues
whether it is proper to file a motion to dismiss after an answer has
already been filed;
whether the complaint should be dismissed on the grounds set forth
therein.

SC Ruling
in favor of respondents. The RTC is ordered to proceed with the trial of
the case with dispatch
On the propriety of the motion to dismiss
Since the rule provides that the preliminary hearing may
be had thereon as if a motion to dismiss had been filed, such hearing
shall therefore be conducted in the manner provided in Section 2, Rule
16 of the Rules of Court
SEC. 2. Hearing of motion. At the hearing of
the motion, the parties shall submit their arguments on the
question of law and their evidence on the questions of fact
involved except those not available at that time. Should the case
go to trial, the evidence presented during the hearing shall
automatically be part of the evidence of the party presenting the
same.
Doctrine : It is inconsequential that petitioner had
already filed an answer to the complaint prior to its filing of a
motion to dismiss. The option of whether to set the case for
preliminary hearing after the filing of an answer which raises
affirmative defenses, or to file a motion to dismiss raising any
of the grounds set forth in Section 1, Rule 16 of the Rules are
procedural options which are not mutually exclusive of each
other.
On whether the complaint for reconveyance should be
dismissed
Doctrine : Where the allegations are sufficient but
the veracity of the facts is assailed, the motion to dismiss
should be denied.
In their complaint for reconveyance, respondents alleged
that the transfer of the 3 parcels of land from TCAIC to ICCI was
facilitated through threat, duress and intimidation employed by certain
individuals. On its face, the complaint clearly states a cause of action
and raises issues of fact that can be properly settled only after a full-
blown trial. On this ground, petitioners motion to dismiss must,
perforce, be denied.
It is true that an action for reconveyance of real property
resulting from fraud may be barred by the statute of limitations, which
requires that the action shall be filed within four (4) years from the
discovery of the fraud.
the basis of respondents complaint for reconveyance is
not fraud but threat, duress and intimidation, allegedly employed by
Marcos cronies upon the relatives of the Montanos while the latter were
on self-exile
Art. 1391. An action for annulment shall be
brought within four years.
This period shall begin: In case of
intimidation, violence or undue influence, from the time the
defect of the consent ceases.
In case of mistake or fraud, from the time of
the discovery of the same.
In the circumstances prevailing in this case, the threat or
intimidation upon respondents is deemed to have ceased only upon
the ouster of then President Marcos from power on February 21, 1986.
The four-year prescriptive period must, therefore, be reckoned from the
said date. Thus, when respondents filed their complaint for
reconveyance on September 15, 1989, the period provided for by law
had not yet prescribed. Therefore, petitioners motion to dismiss should
be denied.

Lu Ym vs. Gertrudes Nabua, 452 SCRA 298


DOUGLAS LU YM vs. GERTRUDES NABUA, GEORGE N.LU, ALEX V. LU, CAYETANO N. LU, JR., JULIETA N. LU
and BERNADITA N. LU
GR No. 161309, February 23, 2005
Ponente: Tinga, J.

Facts: An amended complaint was filed by the private respondents against the petitioner, for Accounting with TRO and
Injunction, on May 15, 2002.
On August 16, 2002, the petitioner filed an Omnibus Motion to Dismiss the Amended Complaint based on the following grounds:
a) Plaintiffs' claims are barred by a prior judgment or by the statute of limitations {Rule 16, Sec. 1 (f)}; b) Plaintiffs have no legal
capacity to sue and/or do not have a cause of action {Rule 16, Sec. 1(d) and/or 1(g)}; c)Fraud and equity; d) Docket fees not
deemed paid, therefore, a condition precedent for filing the claim has not been complied with.
On August 29, 2002, the private respondents filed their Opposition to the Omnibus Motion to Dismiss Amended Complaint
alleging the following: 1. Plaintiffs' claims are not barred by prior judgment nor by statute of limitations; 2. Plaintiffs have the
legal capacity to sue and have valid cause of action; 3. Docket fees have been paid by plaintiffs.
After the filing of petitioner's Reply to the Opposition to the Motion to Dismiss Amended Complaint, the incident was submitted
for resolution pursuant to the August 30, 2002 Order of the court a quo.
Ruling of the lower court: Denied the Omnibus Motion to Dismiss the Amended Complaint because there are justiciable
questions raised in the pleadings of the herein parties which are proper subject of a full blown trial.
Motion for Reconsideration (MR): denied reason: an attempt to discuss on the merit of the case might be interpreted as
prejudgment.
Petitioner filed a Petition for Certiorari and Prohibition Under Rule 65 with Prayer for the Issuance of TR) and/or Writ of
Preliminary Injunction contending that the trial court committed grave abuse of discretion in denying his motion to dismiss
Ruling of CA: dismissed the petition holding that the assailed orders may only be reviewed in the ordinary course of law by an
appeal from the judgment after trial. And declared that although the assailed orders were briefly phrased, the trial court complied
with the requirements set forth under Rule 16 of the 1997 Rules of Civil Procedure on the resolution of motions to dismiss.
Petitioner filed MR: denied
Hence, this petition.
Issue: Whether or not the trial court's denial of petitioner's motion to dismiss on the ground that "[T]here are justiciable questions
raised in the pleadings of the herein parties which are proper subject of a full blown trial" contravenes Sec. 3, Rule 16 of the
Rules and constitutes grave abuse of discretion on the part of the trial court

Held: YES.

Sec. 3, Rule 16 of the Rules provides:Resolution of motion. that the ground relied upon is not indubitable. In every case, the
resolution shall state clearly and distinctly the reasons therefor. After the hearing, the court may dismiss the action or claim, deny
the motion or order the amendment of the pleading.The court shall not defer the resolution of the motion for the reason

Under this provision, there are three (3) courses of action, which the trial court may take in resolving a motion to dismiss, i.e., to
grant, to deny, or to allow amendment of the pleading. Deferment of the resolution of a motion to dismiss if the ground relied
upon is not indubitable is now disallowed in view of the provision requiring presentation of all available arguments and evidence.
Thus, there is no longer any need to defer action until the trial as the evidence presented, and such additional evidence as the trial
court may require, would already enable the trial court to rule upon the dubitability of the ground alleged.
Further, it is now specifically required that the resolution on the motion shall clearly and distinctly state the reasons therefor. This
proscribes the common practice of perfunctorily dismissing the motion for "lack of merit." Such cavalier dispositions can often
pose difficulty and misunderstanding on the part of the aggrieved party in taking recourse therefrom and likewise on the higher
court called upon to resolve the same, usually on certiorari.
The questioned order of the trial court denying the motion to dismiss with a mere statement that there are justiciable questions
which require a full blown trial falls short of the requirement of Rule 16 set forth above. Owing to the terseness of its expressed
justification, the challenged order ironically suffers from undefined breadth which is a hallmark of imprecision. With its
unspecific and amorphous thrust, the issuance is inappropriate to the grounds detailed in the motion to dismiss.
While the requirement to state clearly and distinctly the reasons for the trial court's resolutory order under Sec. 3, Rule 16 of the
Rules does call for a liberal interpretation, especially since jurisprudence dictates that it is decisions on cases submitted for
decision that are subject to the stringent requirement of specificity of rulings under Sec. 1, Rule 36 of the Rules, the trial court's
order in this case leaves too much to the imagination.
It should be noted that petitioner raised several grounds in his motion to dismiss, i.e., bar by prior judgment or by the statute of
limitations, lack of capacity to sue, lack of cause of action, and non-payment of docket fees. x x x Having raised substantial
grounds for dismissal, the trial court should have, at the very least, specified which of these grounds require a full-blown trial.
This would have enabled the defendant to determine the errors that should be the subject of his motion for reconsideration or
petition for certiorari, and given the appellate court sufficient basis for determining the propriety of the denial of the motion to
dismiss.

6. Dismissal of Actions (Rule 17)

O.B. Jovenir Construction and Development Corp. vs. Macamir Realty and CA, G.R. No. 135803,
March 26, 2006
O.B. JOVENIR CONSTRUCTION AND DEVELOPMENT CORPORATION vs. MACAMIR REALTY AND
DEVELOPMENT CORPORATION, SPS. MIRANDA and Court of Appeals
GR No. 135803, March 28, 2006
Ponente: Tinga, J.

Facts: A complaint was filed before the RTC of Makati City seeking the annulment of certain agreements between private
respondents and petitioners, as well as damages; where it was alleged that Jovenir Construction was contracted to complete the
construction of private respondents condominium project. Private respondents sought the termination of their agreements with
petitioners after it was discovered that Jovenir Construction had misrepresented itself as a legitimate contractor and likewise
prayed for issuance of writ of preliminary injunction.
Thereafter, 2 of the impleaded defendants filed their respective motions to dismiss. Defendant Salud Madeja filed her motion on
6 February 1997, while Cesar Mangrobang, Sr. and Cesar Mangrobang, Jr. followed suit with their motion dated 13 February
1997. MAdula alleged that Sps. Miranda, who initiated the complaint on behalf of Macamir Realty, did not attach any Board
Resolution that authorizes them to file a suit in behalf of the corporation
On 13 February 1997, or 10 days after the filing of the complaint, private respondents filed a Motion to Withdraw Complaint,
alleging that during the initial hearing on the prayer for preliminary injunction on 6 February 1997, counsel for plaintiffs
discovered a supposed technical defect in the complaint that may be a ground for the dismissal of this case. Thus, private
respondents prayed that the plaintiffs be allowed to withdraw the complaint without prejudice.
Petitioners filed an opposition to the Motion to Withdraw Complaint on 18 February 1997, wherein they adopted Madeja's
arguments as to the lack of authority on the part of the spouses Miranda to sue on behalf of Macamir Realty. However, just one
day earlier, or on 17 February 1997, private respondents filed another complaint against the same defendants save for Madeja,
and seeking the same reliefs as the first complaint this time, a Board Resolution dated 10 February 1997 authorizing the Sps.
Miranda to file the Complaint on behalf of corporation was attached to the complaint. This second complaint was also filed with
the Makati RTC and docketed as Civil Case No. 97-379. The Verification and Certification [of] Non-Forum Shopping in the
second complaint was accomplished by Rosauro Miranda
In Civil Case No. 97- 256: On 24 February 1997, 11 days after the filing of the Motion to Withdraw Complaint and seven days
after the filing of the second Complaint, the Makati RTC, granted the Motion to Withdraw Complaint - noted in its Order that "an
action may be dismissed by the plaintiffs even without Order of the Court by filing a notice of dismissal at anytime before the
service of the answer under Rule 17, Section 1 of the Rules of Court," and accordingly considered the complaint withdrawn
without prejudice.
In Civil Case No. 97-379: On 4 March 1997, petitioners filed a Motion to Dismiss the second complaint on the ground of forum-
shopping. They pointed out that at the time of the filing of the second complaint on 17 February 1997, the first complaint was
still pending.
Makati RTC: Denied the Motion to Dismiss in an Order dated 23 May 1997. Observing that at the time the Motion to Withdraw
Complaint was filed, none of the defendants had filed any answer or any responsive pleading; thus, it was then within
respondents' right to cause the dismissal of the complaint without having to await action of the court on their motion.
CA: Affirmed the order of Makati RTC dated 23 May 1997
Hence, the present petition.
Issue: Whether or not a plaintiff may obtain the dismissal of his own complaint before a responsive pleading is filed
Held: The Court finds no error on the part of the lower courts since the denial of the motion to dismiss is wholly in accord with
the Rules of Civil Procedure.
Section 1, Rule 17 of the 1964 Rules of Civil Procedure stated: Dismissal by the plaintiff An action may be dismissed by the
plaintiff without order of court by filing a notice of dismissal at any time before service of the answer or of a motion for summary
judgment. 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. A class suit shall not be dismissed or compromised without the approval of the court.
Indubitably, the provision ordained the dismissal of the complaint by the plaintiff as a matter of right at any time before service of
the answer. The plaintiff was accorded the right to dismiss the complaint without the necessity of alleging in the notice of
dismissal any ground nor of making any reservation. In Go v. Cruz, the Court, through Chief Justice Narvasa, has recognized that
where the dismissal of an action rests exclusively on the will of a plaintiff or claimant, to prevent which the defending party and
even the court itself is powerless, requiring in fact no action whatever on the part of the court except the acceptance and recording
of the causative document. It is quite clear that under Section 1, Rule 17 of the old Rules, the dismissal contemplated therein
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. It is due to these considerations
that the petition should be denied.
Evidently, respondents had the right to dismiss their complaint by mere notice on 13 February 1997, since as of even date,
petitioners had not yet served their answer on respondents. The Motion to Withdraw Complaint makes clear respondents' "desire
to withdraw the complaint without prejudice." That respondents resorted to a motion to effect what they could have instead by
mere notice may be indicative of a certain degree of ignorance of procedural rules on the part of respondents' counsel. Yet such
"error," if it could be called as such, should hardly be of fatal consequence. Petitioners posit that the "remedy" of filing a notice of
dismissal is not exclusive, respondents having the "option" of securing the court's approval to the dismissal. On the contrary, the
trial court has no discretion or option to deny the motion, since dismissal by the plaintiff under Section 1, Rule 17 is
guaranteed as a matter of right to the plaintiffs. Even if the motion cites the most ridiculous of grounds for dismissal, 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 ground. Thus, the complaint could be properly considered as having been dismissed or
withdrawn as of 13 February 1997.
The 1997 Rules of Civil Procedure now requires that upon the filing of such notice, the court issue an order confirming the
dismissal. The new requirement is intended to qualify the right of a party to dismiss the action before the adverse party files an
answer or asks for summary judgment. Still, there is no cause to apply the 1997 Rules retroactively to this case. A plaintiff's right
to cause the dismissal of his complaint under the old rules was unqualified. Procedural rules may not be given retroactive effect if
vested rights would be disturbed, or if their application would not be feasible or would work injustice. Since respondents
possessed an unqualified right to cause the dismissal of their complaint without need of confirmation by the trial court, as
enunciated in the 1964 Rules, they did not err in asserting that their first complaint was withdrawn on the day of the filing of their
motion to withdraw, and the lower courts were correct in agreeing with respondents on this point.

Cruz. vs. CA, G.R. No. 164797, February 13, 2006

Facts :
There were four cases involved. First case was for Unlawful Detainer (civil case 4365) filed
before the MTC of Gapan Nueva Ecija wherein Cruz and Concepcion where the plaintiffs while
Bunag where the defendants. The case favored the Cruz and Concepcion

The second case was for Quieting of Title (civil case 1600) before the RTC of Gapan branch 36
wherein the Bunags where the plaintiffs while the defendants were Cruz and Concepcion as
heirs of Maniquis and Bunag. The case was dismissed for failure to prosecute by the RTC.

The third case was for an Injunction (civil case 2573-02) filed before the RTC of Gapan branch
35 with Mariano Bunag and Rolando Bunag as petitioners against Carlos Bunag, Elias Bunag
Natividad, Mariano Bunag, Salud Bunag Clanaoc and Juliana Bunag Arevalo as Defendants.
The case was dismissed on the ground of res judicata because there is a substantial identity of
parties in this case and in Civil Case No. 1600, a Petition for Quieting of Title.

The fourth case is the instant controversy for Annulment of Title with Damages (civil case 2583-
02) before the RTC of Gapan. Docketed as Civil Case No. 2583-02, it was lodged by herein
private respondents Mariano Bunag and Rolando Bunag against petitioners Cruz and
Concepcion.

In the RTC, petitioners interposed a Motion for Outright Dismissal of Civil Case No. 2583 which
was granted. The RTC explained that there was res judicata on the fourth case because of the
parties involved and the subject matter of the case that involves that land and that the Quieting
of Title has been final and executory. There was also accion pendent lite because of the pending
controversies that were already decided and that the certification against forum shopping does
not only refer to final and executory actions but also to pending controversies. Considering that
plaintiffs have been represented by the same counsel in Civil Case No. 2573 and herein case
(Civil Case No. 2583-02), it is very clear that plaintiffs counsel is appraised of the existence of
Civil Case No. 1600 and Civil Case No. 2573.

However, respondents filed for a Motion for Reconsideration. Thus the RTC decided that the
case is hereby reconsidered and set aside. Accordingly, the instant case is reinstated and the
defendants are directed to file their answer/responsive pleading within fifteen (15) days from
receipt of this order.

In the Court of Appeals, where the petitioners filed for a petition for review, dismissed the
petition for lack of merit. It ruled that one of the elements of res judicata, i.e., that there must be,
between the first and the second actions, identity of parties, of subject matter and of cause of
action, is lacking.

First. The issue in the Injunction case is the propriety of the demolition order; while in the
present action (Petition for Annulment of Title With Damages), the pivot of inquiry is the
ownership of the controversial estate.
Second. Private respondent Mariano Bunag denied that he authorized Carlos Bunag to sign the
Verified Complaint in his behalf. Because of this, Mariano Bunag cannot be considered as a
party litigant in the Injunction case. Concomitantly, there is no identity of parties between the
present case and in Civil Case No. 2573-02 (Injunction).

Third. As the court of justice abhors the disposition of the case based on technicalities, this
Court further concurs with the trial court's disquisition

CAs Ratio : That in the Injunction case, Carlos Bunag was authorized by his co-plaintiffs to file a
case for Quieting of title including herein plaintiff Mariano Bunag. But Mariano said that he never
gave his consent to Carlos and he was not aware that he was included. Rolando was never
made a party to the Quieting of title. Hence, the dismissal of the case for Quieting of title will not
bar the filing of the instant complaint as one of the requisites of res judicata is absent.
There is no identity of parties between the case for Quieting of title and the instant case for the
simple reason that herein plaintiffs were not parties in the case for Quieting of title.
Consequently, plaintiffs and their counsel cannot be said to have violated the rule against forum
shopping. Plaintiffs and their counsel did not file the case for Quieting of title and therefore they
are not obligated to inform this Court that they have filed a similar action involving the same
issue with other court.

Moreover, substantial justice demands that technicalities should not be allowed to prevail over
the substantive rights of a party-litigant. If the subject property is really owned by the plaintiffs,
then it would be the height of injustice if they are not allowed to prove their cause of action
because of mere technicality. It would amount to deprivation of their property without due
process.

The petitioners filed for a motion for reconsideration but was denied, thus they filed that the
Court of Appeals committed grave abuse of discretion amounting to lack or excess of jurisdiction
in rendering the assailed decision and resolution.

Issue :
Whether or not there was res judicata

Held :
Under the rule of res judicata, also known as "bar by prior judgment," a final judgment or order
on the merits, rendered by a Court having jurisdiction of the subject matter and of the parties, is
conclusive in a subsequent case between the same parties and their successor-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. The requisites essential for the
application of the principle are: (1) there must be a final judgment or order; (2) said judgment or
order must be on the merits; (3) the Court rendering the same must have jurisdiction on the
subject matter and the parties; and (4) there must be between the two cases identity of parties,
identity of subject matter, and identity of causes of action.
Petitioners claim res judicata applies in this case because all the elements thereof are present.
On the other hand, private respondents argue the contrary alleging that the second and fourth
elements are lacking. There being no dispute as to the presence of the first and third elements,
we now determine if the second and fourth elements are attendant in the case.

The dismissal of the Quieting of title falls in the 2 nd element under SECTION 3 RULE 17 wherein
the dismissal was due to the fault of the plaintiff. This dismissal shall have the effect of an
adjudication upon the merits, unless otherwise declared by the court.

Enumeration for failure are (1) if he fails to appear on the date for the presentation of his
evidence in chief; (2) if he fails to prosecute his action for an unreasonable length of time; or (3)
if he fails to comply with the rules or any order of the court. Once a case is dismissed for failure
to prosecute, this has the effect of adjudication on the merits and is understood to be with
prejudice to the filing of another action unless otherwise provided in the order of dismissal. In
other words, unless there be a qualification in the order of dismissal that it is without prejudice,
the dismissal should be regarded as an adjudication on the merits and is with prejudice.

The 4th element the identity of parties, subject matter and cause of action. We likewise rule that
there is identity of causes of action. Hornbook is the rule that identity of causes of action does
not mean absolute identity. Otherwise, a party could easily escape the operation of res judicata
by changing the form of the action or the relief sought. The test to determine whether the
causes of action are identical is to ascertain whether the same evidence will sustain both
actions, or whether there is an identity in the facts essential to the maintenance of the two
actions. If the same facts or evidence would sustain both, the two actions are considered the
same, and a judgment in the first case is a bar to the subsequent action.

The difference in form and nature of the two actions is immaterial and is not a reason to exempt
petitioner from the effects of res judicata. The philosophy behind this rule prohibits the parties
from litigating the same issue more than once. When a right or fact has been judicially tried and
determined by a court of competent jurisdiction or an opportunity for such trial has been given,
the judgment of the court, as long as it remains unreversed, should be conclusive upon the
parties and those in privity with them. Verily, there should be an end to litigation by the same
parties and their privies over a subject, once it is fully and fairly adjudicated.

The two cases are different only in the form of action but an examination of the allegations in the
second case would reveal that the issue raised - ownership of the land -- and the relief sought -
be declared as owner and TCTs be issued in their names -- are substantially the same. The
evidence required to substantiate their claims are likewise the same. The proceedings in the
instant case, if permitted to continue, would entail the presentation of evidence which should
have been adduced in the case for Quieting of Title. The case for Annulment of Title is simply a
second cycle of review involving a subject matter that has already been decided with finality in
the Quieting of Title 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.

SECTION 3 RULE 17 wherein the dismissal was due to the fault of the plaintiff. This
dismissal shall have the effect of an adjudication upon the merits, unless otherwise
declared by the court.
Pinga v. Heirs of Santiago
G.R. 170354, June 30, 2006
Ponente: Tinga, J.

FACTS:

Respondent Heirs of German Santiago filed with the RTC of San Miguel, Zamboanga del Sur a complaint for
injunction against herein petitioner Eduardo Pinga. The Complaint (dated May 28, 1998) alleged in essence
that petitioner and co-defendant Vicente Saavedra had been unlawfully entering the coco lands of the
respondent, cutting wood and bamboos and harvesting the fruits of the coconut trees therein. Respondents
prayed that petitioner and Saavedra be enjoined from committing "acts of depredation" on their properties,
and ordered to pay damages.

In their Amended Answer with Counterclaim, petitioner and his co-defendant disputed respondents'
ownership of the properties in question, asserting that petitioner's father, Edmundo Pinga, from whom
defendants derived their interest in the properties, had been in possession thereof since the 1930s. They
alleged that as far back as 1968, respondents had already been ordered ejected from the properties after a
complaint for forcible entry was filed by the heirs of Edmundo Pinga. By July of 2005, the trial of the case
had not yet been completed, due to the failure of respondents counsel to appear. The counsel for petitioner
moved that the complaint be dismissed.

RTC: dismissed the complaint, on the ground that it was obvious that respondents had failed to prosecute the
case for an unreasonable length of time, in fact not having presented their evidence yet. At the same time, the
RTC allowed petitioners "to present their evidence ex-parte as regards their Counterclaim. Upon respondent
heirs Motion for Reconsideration, praying that the entire action be dismissed and petitioner be disallowed
from presenting evidence ex-parte, and further claiming that a counterclaim could not remain pending for
independent adjudication; RTC granted the Motion for Reconsideration and dismissed the counterclaim as
well.

The matter was elevated to the Supreme Court directly by way of a Petition for Review under Rule 45 on a
pure question of law.

ISSUE:
Whether or not the dismissal of the complaint necessarily carries the dismissal of the compulsory
counterclaim? (NO)

HELD:

Petition is GRANTED.

Under Section 3, Rule 17 of the 1997 Rules of Civil Procedure, the dismissal of the complaint due to the fault
of plaintiff does not necessarily carry with it 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 the
counterclaim.
SEC. 3. Dismissal due to fault of plaintiff. If, for no justifiable cause, the plaintiff fails to
appear on the date of the presentation of his evidence in chief on the complaint, or to prosecute
his action for an unreasonable length of time, or to comply with these Rules or any order of the
court, the complaint may be dismissed upon motion of defendant or upon the court's own
motion, without prejudice to the right of the defendant to prosecute his counterclaim in the same
or in a separate action. This dismissal shall have the effect of an adjudication upon the merits,
unless otherwise declared by the court.

The express qualification in the provision that the dismissal of the complaint due to the plaintiff's fault, as in
the case for failure to prosecute, is without prejudice to the right of the defendant to prosecute his
counterclaim in the same or separate action.

It is apparent that the survival of the counterclaim despite the dismissal of the complaint under Section 3
stood irrespective of whether the counterclaim was permissive or compulsory. Moreover, when the Court
itself approved the revisions now contained in the 1997 Rules of Civil Procedure, not only did Justice
Regalado's amendment to Section 3, Rule 17 remain intact, but the final version likewise eliminated the
qualification formerly offered under Section 2 on "counterclaims that can remain pending for independent
adjudication by the court." At present, even Section 2, concerning dismissals on motion of the plaintiff, now
recognizes the right of the defendant to prosecute the counterclaim either in the same or separate action
notwithstanding the dismissal of the complaint, and without regard as to the permissive or compulsory nature
of the counterclaim.

To be certain, when the Court promulgated the 1997 Rules of Civil Procedure, including the amended Rule
17, those previous jural doctrines that were inconsistent with the new rules incorporated in the 1997 Rules of
Civil Procedure were implicitly abandoned insofar as incidents arising after the effectivity of the new
procedural rules on 1 July 1997. BA Finance, or even the doctrine that a counterclaim may be necessarily
dismissed along with the complaint, clearly conflicts with the 1997 Rules of Civil Procedure. The
abandonment of BA Finance as doctrine extends as far back as 1997, when the Court adopted the new Rules
of Civil Procedure. We confirm that BA Finance and all previous rulings of the Court that are inconsistent
with this present holding are now abandoned.

DOCTRINE: The dismissal of the complaint due to the fault of plaintiff does not necessarily carry with it 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 the counterclaim.

Perkin Elmer Singapore Pte Ltd. vs. Dakila Trading Corporation, G.R. No. 172242, August 14,
2007

Ko vs. PNB, 479 SCRA 298, January 28, 2006


YNARES-SANTIAGO, J.:
FACTS:

The case stemmed from an action filed by petitioners in the trial court for Annulment of

Mortgage, Extra-judicial Foreclosure Sale, and Annulment of Transfer Certificate of Title Nos. T-

21064 and T-21065 and Deed of Sale with a Prayer for Preliminary Injunction and Restraining Order.

The complaint alleged that the assailed mortgage and the foreclosure proceedings were null and

void since the written consent of petitioners, as beneficiaries of the mortgaged property, were not

secured. Respondent bank denied the claim and alleged that in the execution of the mortgage,

petitioners in fact gave their consent.

During the course of the proceedings, petitioners and their counsel failed to attend a
scheduled trial. Upon motion of respondent bank, the complaint was dismissed.

RTC:
When the case was called, Atty. Lorenzo Castillo, counsel for the plaintiffs did not
appear despite proper notice. No plaintiff appeared. Atty. Eduardo Alcantara, counsel for
defendant bank appeared. Atty. Alcantara manifested that there were numerous occasions in
the past when plaintiffs and counsel did not attend. He pointed out that there is an apparent
lack of interest on the part of plaintiff to prosecute the action. He moved to dismiss the case
on that legal ground.
WHEREFORE, in view of the above premises, the above-entitled case is hereby
ordered dismissed.
Petitioners filed a motion for reconsideration claiming that they have been
continuously pursuing negotiations with respondent bank to purchase back the property and
have gained positive results.
Respondent bank countered that from the time the complaint was filed, a period of
three years had elapsed but petitioners failed to prosecute their case, showing lack of
interest in the early resolution thereof. The trial court denied the motion for reconsideration.

ISSUE:
WON THE TRIAL COURT ERRED IN LAW IN DISMISSING PETITIONERS COMPLAINT
ON THE GROUND OF THEIR FAILURE TO APPEAR AT THE SCHEDULED HEARING DESPITE
THAT DEFENDANT PNB HAS BEEN EQUALLY GUILTY LIKEWISE.

HELD:

SC:

Petitioners erred in filing a petition for review on certiorari under Rule 45 instead of

filing an appeal with the CA.


SEC. 3. Dismissal due to fault of plaintiff. If, for no justifiable cause, the plaintiff fails to appear on the date of
the presentation of his evidence in chief on the complaint, or to prosecute his action for an unreasonable length
of time, or to comply with these Rules or any order of the court, the complaint may be dismissed upon the
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 separate action. This dismissal shall have the effect of an
adjudication upon the merits, unless otherwise declared by the court.

Upon the order of dismissal, petitioners counsel filed a timely motion for
reconsideration which was denied by the trial court. Considering that an order of dismissal
for failure to prosecute has the effect of an adjudication on the merits, petitioners counsel
should have filed a NOTICE OF APPEAL with the appellate court within reglementary period.
Rules of procedure must be faithfully followed except only when for persuasive
reasons, they may be relaxed to relieve a litigant of an injustice not commensurate with his
failure to comply with the prescribed procedure. Concomitant to a liberal application of the
rules of procedure should be an effort on the part of the party invoking liberality to explain its
failure to comply with the rules. In the case at bar, three years have since lapsed from the filing
of the complaint on May 3, 2002 and the order of dismissal on April 27, 2005. Petitioners failure
to prosecute their case and proceed with the trial during the span of three years leads to no other
conclusion than that petitioners have no interest in seeing their case terminated at the earliest
possible time. (No persuasive reasons to relax the rule.)

DOCTRINE:
Dismissal due to fault of plaintiff, proper remedy is ordinary appeal with the
Court of Appeals.
Duty of plaintiff to prosecute his action with diligence, neglect thereof warrants
dismissal of case.

Gajudo vs. Traders Royal Bank, G.R. N o. 151098, March 21, 2006

Vlason Enterprises Corp. vs. CA, 310 SCRA 26 (1999)

Ramnani vs. CA, 221 SCRA 582 (1993)


Ramnani vs. CA, 221 SCRA 582 (1993)

Facts:
RTC
-spouses Dizon filed a complaint in the RTC Makati against spouses Ramnani for the
collection of sum of money.
-Ramnani submitted an answer with counterclaim.
-the trial court set the case for pre-trial but the Ramnanis did not appear.
-Consequently, they were declared in default.
-Ramnani then filed a motion to lift the order of default but this was denied.
-conformably to the default order, evidence of the Dizon spouses was received ex parte.
-Judge Guerrero rendered judgment against the Ramnanis

-The Ramnanis filed a motion for reconsideration on the ground that a personal
obligation contracted by the wife without the consent of the husband (was) being
made enforceable against the spouses conjugal partnership despite absence of any
allegation and proof that the same redounded to the benefit of the family as required
by the Family Code.
-The motion was denied.

CA
-Ramnani filed a petition for certiorari before the CA imputing error to the trial court:
1) in denying the motion to lift order declaring petitioner as in default despite a clear
showing of a meritorious defense;
2) in not considering petitioners reason for failure to attend pre-trial as excusable
neglect.
-the CA dismissed the petition

SC
-petitioner then came to This Court to challenge that decision.
-he avers that the CA erred in upholding the refusal of the trial court to set aside the order of
default and the default judgment thereafter issued.

ISSUE: whether or not the refusal of the trial court to set aside the motion to lift the order of
default was proper.

Held: Yes. A satisfactory showing by the movant of the existence of fraud, accident, mistake
or excusable neglect is an indispensable requirement for the setting aside of a judgment of
default or the order of default. After going over the pleadings of the parties and the decision
of the respondent court, we find that the motion to lift the order of default was properly
denied for non-compliance with this requirement. The defendants were less than
conscientious in defending themselves and protecting their rights before the trial court. They
did not pay proper attention and respect to its directive. The petitioner has not shown that
his and his wife's failure to attend the pre-trial hearing as required was due to excusable
neglect, much less to fraud, accident or mistake. A meritorious defense is only one of the
two conditions. Even if it be assumed for the sake of argument that the private respondents
did owe Josephine Ramnani P900,000, as alleged in the counterclaim, that circumstance
alone is not sufficient to justify the lifting of the order of default and the default judgment.
The obvious reason is that a meritorious defense must concur with the satisfactory reason
for the non-appearance of the defaulted party. There is no such reason in this case.

Doctrine: The basic rule is found in Section 2, Rule 20, viz: "A party who fails to appear at a
pre-trial conference may be non-suited or considered as in default." As held in Lina v. Court
of Appeals, the remedies available to a defendant in the regional trial court who has been
declared in default are:
a) The defendant in default may, at any time after discovery thereof and before
judgment, file a motion, under oath, to set aside the order of default on the ground that his
failure to answer was due to fraud, accident, mistake or excusable neglect, and that he has a
meritorious defense; (Sec. 3, Rule 18)
b) If the judgment has already been rendered when the defendant discovered the
default, but before the same has become final and executory, he may file a motion for new
trial under Section 1(a) of Rule 37;
c) If the defendant discovered the default after the judgment has become final and
executory, he may file a petition for relief under Section 2 of Rule 38; and d) He may also
appeal from the judgment rendered against him as contrary to the evidence or to the law,
even if no petition to set aside the order of default has been presented by him.

Martinez vs. Republic, G.R. No. 160895, October 30, 2006


MARTINEZ V. REPUBLIC
G.R. No. 160895 October 30, 2006
Tinga, J.

FACTS:

Petitioner Jose R. Martinez filed a petition for the registration in his name of 3
parcels of land included in Cortes, Surigao del Sur Cadastre, in the RTC of Surigao
del Sur. In behalf of the Republic of the Philippines, the Office of the Solicitor
General opposed the petition on the grounds that his possession was not in
accordance with Sec. 48(b) of CA 141; that his muniments of title were insufficient
to prove bona-fide acquisition and possession of the subject parcels; and that the
properties formed part of the public domain and thus not susceptible to private
appropriation.

Trial ensued but no party appeared before the RTC to oppose Martinezs petition.
Thus, the trial court issued an order of general default against the Republic of the
Philippines. A decree of registration favored the petition of Martinez over the subject
parcels of land.

The OSG filed a Notice of Appeal which was approved by the RTC. Meanwhile, the
LRA send a letter to the trial court stating that there are only 2 parcels of land
referred to in the Notice of Hearing for the registration after the Decree of
Registration. The other parcel was omitted due to a lacking of an approved survey
plan.

The CA reversed the RTC and ordered the dismissal of the petition for registration.
No reconsideration of the decision was filed. Instead, Martinez elevated this matter
before the Supreme Court and alleged that the OSG do not retain the right to appeal
from the judgment of default.

ISSUE:

Whether an order of general default issued by a trial court bars the respondent from
interposing an appeal from the trial courts subsequent decision in favor of the
applicant or not.

HELD:
No.

A defendant party declared in default retains the right to appeal from the judgment
by default on the ground that the plaintiff failed to prove the material allegations of
the complaint, or that the decision is contrary to law, even without need of the prior
filing of a motion to set aside the order of default.

The appeal of the OSG did not introduce any new evidence, but simply pointed to
the insufficiency of the evidence presented by Martinez before the trial court. The
CA was careful to point out that the case against Martinez was established not by
the OSGs evidence, but by petitioners own insufficient evidence.

The Lim Toco doctrine is no longer controlling.

G.R. No. 93233 December 19, 1995


JAO & COMPANY, INC. petitioner,
vs.
HON. COURT OF APPEALS, HON. ROSALIO DE LA ROSA, as Presiding Judge of Br.
51, Regional Trial Court of Manila, THE SHERIFF OF THE CITY OF MANILA, DEPUTY
SHERIFF OF MANILA RODOLFO P. TORRELLA, TOP SERVICE, INC., HENRY CASTILLO,
QUINTIN S. GO, and CARLITO N. ABADILLA,respondents.

Facts:
Due to the non-appearance of defendant (the petitioner herein) Jao & Company, Inc., during
the hearing on the merits, the Regional Trial Court of Manila, Branch 51 upon motion of
herein private respondent Top Service, Inc. issued an order dated April 14, 1989 declaring
said petitioner in default and allowed evidence to be presented ex-parte. The petitioner
however filed an answer. Thereafter, on May 26, 1989, the trial court rendered a decision
ordering petitioner Jao to pay private respondent Top Service P150,920.00 representing
agreed rentals with 12% interest per annum from date of filing of the suit, attorney's fees of
P5,000.00, plus costs.

After receipt of the decision, petitioner filed on November 10, 1989 a motion for
reconsideration and/or to set aside decision. Pending resolution of the motion, respondent
judge restrained the sheriff from holding an auction sale of two barges he earlier levied on.

RTC: Thereafter, on January 10, 1990, the trial court denied the said motion and lifted the
restraining order against the auction sale. On January 12, 1990, the sheriff of Manila gave
petitioner a Notice of Resetting of Execution Sale of Personal Properties on January 15, 1990.

On January 15, 1990, petitioner filed a petition for certiorari with the Court of Appeals
contesting the jurisdiction of the trial court. The following day, January 16, 1990, the
respondent appellate court issued a temporary restraining order to stop the sheriff from
conducting the auction sale. However, it appears that the auction took place one day before,
on January 15, 1990, although the petitioner contends that no such sale actually took place.
The barges in question were purchased during the auction by respondent Henry Castillo,
who later sold them to Quintin Go, who in turn sold them to Carlito Abadilla. On March 13,
1990, respondent Court of Appeals promulgated a Resolution denying petitioner's motion for
a writ of preliminary injunction.

CA rationale: The respondent Court held that the motion has become moot and academic
because the properties have already been sold to third parties and because the decision of
the trial court dated May 26, 1989 "has long become final and executory on the basis that
petitioner failed to appeal . . . ."
Petitioner brought to the Supreme Court the instant petition for certiorari and mandamus
under Rule 65, inter alia, to nullify the said Resolutions of the respondent Court dated March
13, 1990 and April 25, 1990 and to command the said Court to declare as void the auction
sale of January 15, 1990, for grave abuse of discretion and/or lack/excess of jurisdiction.

Arguments before the SC:


Petitioner averred that the decision could not become final because the trial court
"improperly declared defendant-petitioner in default and unjustifiably allowed private
respondent-plaintiff to present its evidence ex-parte"- It was not given notice of the order of
April 14, 1989 declaring it in default and of the decision of May 26, 1989.
Private respondents stated that petitioner's counsel had withdrawn his appearance in the
trial court and left no forwarding address. Hence, no notice of the said order of default and
the decision could be given it. At any rate, petitioner's remedy, they concluded, was timely
appeal, which petitioner failed to perfect.

Issues:
1) WON respondent Court of Appeals gravely abuse its discretion in refusing to issue a
writ of preliminary injunction. NO.
2) WON the decision of the trial court, promulgated on May 26, 1989, become final. YES.

Held:
1) No grave abuse of discretion. The grant or denial of the writ of preliminary injunction
rests upon the sound discretion of the court. Its main purpose is to preserve the status quo
and not to grant the very subject of the petition on the merits. The status quo is the last
actual peaceable uncontested status which preceded the controversy. In the instant case,
the respondent Court promptly issued a temporary restraining order one day after an
application therefor was filed by the petitioner. From this, it can be inferred that said Court
was alert and sensitive to the need for immediate action. However, as the sale took place
the day before, i.e., on January 15, 1990, the TRO was useless in preventing/stopping the act
complained of.
2) Yes. The proper remedy of a party wrongly declared in default is either to appeal
from the judgment by default or to file a petition for relief from judgment, and not certiorari.
A default judgment is an adjudication on the merits and is, thus, appealable. Since appeal is
the proper remedy, the extraordinary writ of certiorari will not lie.

Petitioner contends that it could not be bound by the questioned Order of April 14, 1989
declaring it in default and the subsequent Decision of May 20, 1989 because it did not
receive copies thereof. Respondents counter that such non-service was due to petitioner's
fault in not furnishing the trial court with its "forwarding address" after its counsel withdrew
his appearance. This Court is not in a position to settle this issue of fact as indeed the
Supreme Court does not decide such questions. But it is not disputed that after receipt of
the decision, petitioner filed a motion for reconsideration. Upon denial thereof, petitioner
should have appealed. But instead of doing that, it opted for the wrong remedy of certiorari.

G.R. No. 139371 April 4, 2001


INDIANA AEROSPACE UNIVERSITY, petitioner,
vs.
COMMISSION ON HIGHER EDUCATION (CHED), respondent.

Doctrine: When the delayed filing of an answer causes no prejudice to the plaintiff, default
orders should be avoided. Inasmuch as herein respondent was improvidently declared in
default, its Petition for Certiorari to annul its default may be given due course. The act of the
Commission on Higher Education enjoining petitioner from using the word "university" in its
corporate name and ordering it to revert to its authorized name does not violate its
proprietary rights or constitute irreparable damage to the school. Indeed, petitioner has no
vested right to misrepresent itself to the public. An injunction is a remedy in equity and
should not be used to perpetuate a falsehood.

Facts:
Dr. Vera, Chairman, Technical Panel for Engineering, Architecture, and Maritime Education
(TPRAM) of [CHED] received a letter from Macias, Chairman, Board of Aeronautical
Engineering, Professional Regulatory Commission (PRC) inquiring whether [petitioner] had
already acquired university status in view of the latter's advertisement in Manila Bulletin.

Dr. Vera requested Chairman Alcala that the concerned Regional Office of [CHED] be directed
to conduct appropriate investigation on the alleged misrepresentation by [petitioner].
Thereafter, [CHED] referred the matter to its Regional Director in Cebu City, requesting said
office to conduct an investigation and submit its report. The report stated that there was a
violation committed by his institution when it used the term university unless the school had
complied with the basic requirement of being a university as prescribed in CHED
Memorandum Order No. 48, s. 1996.

As a consequence of said Report, [respondent's] Legal Affairs Service was requested to take
legal action against [petitioner]. [Respondent] directed [petitioner] to desist from using the
term University, including the use of the same in any of its alleged branches. In the course
of its investigation, [respondent] was able to verify from the Securities and Exchange
Commission (SEC) that [petitioner] had filed a proposal to amend its corporate name from
Indiana School of Aeronautics to Indiana Aerospace University, which was supposedly
favorably recommended by the Department of Education, Culture and Sports (DECS) and on
that basis, SEC issued to [petitioner] Certificate of Registration No. AS-083-002689.
However, SEC Chairman Yasay, in a letter to Chairman Alcala, informed him that the above-
mentioned corporation has not filed any amended articles of incorporation that changed its
corporate name to include the term 'University.'

In reaction to [respondent's] order for [petitioner] to desist from using the word 'University',
Toring, [c]hairman and [f]ounder of [petitioner] appealed for reconsideration of
[respondent's] Order, with a promise to follow the provisions of CMO No. 48.
The appeal of [petitioner] was however rejected by [respondent] and [the latter] ordered the
former to cease and desist from using the word 'University.' [Petitioner] filed a Complaint for
Damages with prayer for Writ of Preliminary and Mandatory Injunction and Temporary
Restraining Order against [respondent]
[Respondent] filed a Special Appearance with Motion to Dismiss, based on 1) improper
venue; 2) 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. [Respondent] filed a Reply.

August 14, 1998, Respondent judge denied [respondent's] 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.

September 22, 1998 , [Petitioner] filed before public respondent a Motion To Declare
[Respondent] in [D]efault pursuant to Section 3, Rule 9 in relation to Section 4, Rule 16 of
the Rules of Court and at the same time praying [for] the Motion to [S]et for [H]earing. On
the same date, [respondent] filed a Motion For Extension of Time to File its Answer until
November 18, 1998. On November 17, 1998, [respondent] filed its [A]nswer.

November 11, 1998 , [Petitioner] filed its Opposition to the Motion for Extension of Time to
File [Respondent's] Answer and a Motion to Expunge [Respondent's] Answer and at the same
time praying that its [M]otion be heard. On even date, public respondent judge issued an
Order directing the Office of the Solicitor General to file within a period of ten (10) days from
date its written Opposition to the Motion to Expunge [Respondent's] Answer and within the
same period to file a written [N]otice of [A]ppearance in the case. Unable to file their written
Opposition to the Motion to Expunge within the period given by public respondent, the OSG
filed a Motion to Admit Written Opposition stating the reasons for the same, attaching
thereto the Opposition with Formal Entry of Appearance.

RTC: December 9, 1998, Public respondent judge granted [Petitioner's] Motion to Declare
[Respondent in Default].
Respondent filed with the CA a Petition for Certiorari, arguing that the RTC had committed
grave abuse of discretion (a) in denying the former's Motion to Dismiss, (b) in issuing a Writ
of Preliminary Injunction, and (c) in declaring respondent in default despite its filing an
Answer.

CA: The CA ruled that petitioner had no cause of action against respondent.
Petitioner failed to show any evidence that it had been granted university status by
respondent as required under existing law and CHED rules and regulations. A certificate of
incorporation under an unauthorized name does not confer upon petitioner the right to use
the word "university" in its name. Securities and Exchange Commission (SEC) had denied
that petitioner had ever amended its Articles of Incorporation to include "university" in its
corporate name. Department of Education, Culture and Sports (DECS) denied having issued
the alleged Certification indorsing the change in petitioner's corporate name.
: Respondent should not have been declared in default, because its Answer had
been filed long before the RTC ruled upon petitioner's 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.

Issue:
1) WON the Petition for Certiorari was seasonably filed. YES.
2) WON the order of default was valid. NO.
3) WON the CA validly dismissed the complaint. NO.

Held:
1) YES. 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.

2) NO. The trial court gravely abused its discretion when it declared respondent in
default despite the latter's filing of an Answer.

The remedies available to a defendant declared in default, as follows:


(1) a motion to set aside the order of default under Section 3(b), Rule 9 of the Rules of Court,
if the default was discovered before judgment could be rendered;
(2) a motion for new trial under Section 1(a) of Rule 37, if the default was discovered after
judgment but while appeal is still available;
(3) a petition for relief under Rule 38, if judgment has become final and executory; and
(4) an appeal from the judgment under Section 1, Rule 41, even if no petition to set aside
the order of default has been resorted to.

Petitioner was lax in calling the attention of the Court to the fifteen-day period for filing an
Answer. It moved to declare respondent in default only on September 20, 1998, when the
filing period had expired on August 30, 1998. The only conclusion in this case is that
petitioner has not been prejudiced by the delay. The same leniency can also be accorded to
the RTC, which declared respondent in default only on December 9, 1998, or twenty-two
days after the latter had filed its Answer on November 17, 1998. Defendant's Answer should
be admitted, because it had been filed before it was declared in default, and no prejudice
was caused to plaintiff. The hornbook rule is that default judgments are generally disfavored
It appears that respondent failed to file its Answer because of excusable negligence. Atty.
Joel Voltaire Mayo, director of the Legal Affairs Services of CHED, had to relinquish his
position in accordance with the Memorandum dated July 7, 1998, requiring all non-CESO
eligibles holding non-career positions to vacate their respective offices. It was only on
September 25, 1998, after CHED Special Order No. 63 had been issued, when he resumed
his former position.

3) NO. Respondent issued a formal Cease and Desist Order directing petitioner to stop
using the word "university" in its corporate name. The former also published an
announcement in the March 21, 1998 issue of Freeman, a local newspaper in Cebu City, that
there was no institution of learning by that name. The counsel of respondent was quoted as
saying in the March 28, 1998 issue of the newspaper Today that petitioner had been ordered
closed by the respondent for illegal advertisement, fraud and misrepresentation of itself as a
university. Such acts, according to the RTC undermined the public's confidence in petitioner
as an educational institution. This was a clear statement of a sufficient cause of action.

WHEREFORE, the Petition is hereby GRANTED IN PART, and the assailed Decision MODIFIED.
The trial court is DIRECTED to SET ASIDE the Order of Default of December 9, 1998; to
ADMIT the Answer dated November 5, 1998; to LIFT the preliminary injunction; and to
CONTINUE, with all deliberate speed, the proceedings in Civil Case NO. 98-811.

7. Pre Trial (Rule 18)


LCK industries Inc. vs. Planters Development Bank Inc.
PARTIES:
Petitioner LCK is a domestic corporation duly organized and existing as such under Philippine
laws.
Respondent bank is a banking institution duly authorized to engage in banking business under
Philippine laws.
FACTS: On 1 September 1995, petitioner LCK obtained a loan from the respondent bank in the amount
of P3,000,000.00 as evidenced by two promissory notes.
1.) As a security for the loan obligation, petitioners-spouses Chiko and Elizabeth Lim executed a Real
Estate Mortgage over a parcel of land covered by Transfer Certificate of Title (TCT) No. T-138623,
registered under their names and located at Quezon City, with an area of 68 square meters (Quezon City
property). Later on, to secure the same obligation, another Real Estate Mortgage was executed over
another parcel of land covered by TCT No. T-62773, also registered under the names of the petitioner-
spouses, with an area of 71 square meters located at Baguio City (Baguio City property).
2.) Subsequently, petitioner LCK incurred default in its payment; thus, making the obligation due and
demandable. Several demands were thereafter made by the respondent bank to no avail. On 13 October
1997, a final letter-demand was sent by respondent bank to petitioner LCK asking for the payment of its
obligation in the amount of P2,962,500.00. Such final demand notwithstanding, petitioner LCK failed or
refused to pay its obligation.
3.) Consequently, respondent bank caused the extrajudicial foreclosure of the Baguio City property which
was sold at the public auction for P2,625,000.00 as shown in the Certificate of Sale dated 29 January
1998. Since the proceeds of the foreclosed Baguio City property were not enough to satisfy the entire loan
obligation which amounted to P2,962,500.00, respondent bank further caused the extrajudicial foreclosure
of the Quezon City property. As evidenced by the Certificate of Sale dated 18 March 1998, signed by
Notary Public Atty. Allene Anigan (Atty. Anigan), the foreclosed Quezon City property was sold at a
public auction for P2,231,416.67. The respondent bank was the highest bidder on both occasions.
4.) Prior to the auction sale of the Quezon City property on 18 March 1998, petitioners, on 12 March
1998, filed with the RTC of Quezon City, Branch 81, an action for Annulment of the Foreclosure of
Mortgage and Auction Sale of the Quezon City property with Restraining Order/Preliminary Injunction
and with Damages against respondent bank and Atty. Anigan. The case was docketed as Civil Case No.
Q-98-33835. In their Complaint, petitioners alleged that respondent bank failed to comply with the
posting and publication requirements as well as with the filing of the Petition for the Extrajudicial
Foreclosure of the Real Estate Mortgage with the Clerk of Court as required by Act No. 3135.
5.) Thereafter RTC conducted Pre Trail Conference
6.) On 18 April 2001, the parties agreed to submit the case for the decision of the RTC based on the
stipulations and admissions made at the pre-trial conference. The parties further manifested that they were
waiving their respective claims for attorneys fees. On the same day, the RTC required the parties to
submit their respective memoranda.
In their Memorandum, petitioners, aside from reiterating issues previously raised in their Complaint,
further claimed that there was an overpayment of the loan obligation by P1,856,416.67. As shown in the
letter-demand dated 13 October 1997 received by petitioner LCK, its outstanding loan obligation
amounted to P2,962,500.00. The Baguio City property was purchased by respondent bank at the public
auction for P2,625,000.00, while the Quezon City property was purchased for P2,231,416.67.
7.) The Respondents maintained in its Memorandum that the complaint filed by petitioners is devoid of
merit. It further asseverated that petitioners claim for overpayment was not among the issues submitted
for the resolution of the RTC.
RTC Decision: On 3 September 2001, the RTC rendered its Decision declaring the foreclosure and the
auction sale of the Quezon City property legal and valid, but ordered respondent bank to return the
overpayment made by petitioners in the amount of P1,856,416.67.
8.) Aggrieved, respondent bank elevated the matter to the Court of Appeals
9.) On 1 April 2005, the Court of Appeals granted the appeal of the respondent bank and partially
reversed the RTC Decision insofar as it ordered respondent bank to pay the overpaid amount of
P1,856,416.67 to petitioners. In deleting the award of overpayment, the appellate court emphasized that
the primary purpose of pre-trial is to make certain that all issues necessary for the disposition of the case
are properly raised in order to prevent the element of surprise. Since the alleged overpayment was only
raised by the petitioners long after the pre-trial conference, the court a quo cannot dispose of such issue
without depriving the respondent bank of its right to due process.
ISSUES:
WHETHER OR NOT THE EXCESS AMOUNT OF P1,893,916.67 WHICH THE RESPONDENT
BANK ACQUIRED FROM THE AUCTION SALE OF THE PETITIONERS PROPERTIES
SHALL BE RETURNED TO THEM.

WHETHER OR NOT THE ISSUE OF OVERPAYMENT WAS RAISED BY THE PARTIES AND
INCLUDED IN THE PRE-TRIAL ORDER.

HELD:
1.) Yes the court ruled that the excess should be return to the Petitioner LCK, petitioner LCKs obligation
with the respondent bank was already fully satisfied after the mortgaged properties were sold at the public
auction for more than the amount of petitioner LCKs remaining debt with the respondent bank. As the
custodian of the proceeds from the foreclosure sale, respondent bank has no legal right whatsoever to
retain the excess of the bid price in the sum of P1,893,916.67, and is under clear obligation to return the
same to petitioner.
In any case, this Court would not allow respondent bank to hide behind the cloak of procedural
technicalities in order to evade its obligation to return the excess of the bid price, for such an act
constitutes a violation of the elementary principle of unjust enrichment in human relations.
2.) The case at bar falls under this particular exception. Upon scrupulous examination of the Pre-Trial
Order dated 8 September 2000, it can be deduced that the parties stipulated that the remaining sum of
petitioner LCKs obligation as of 13 October 1997 was P2,962,500.00. In the same Pre-Trial Order, the
parties likewise stipulated that the Baguio City property was sold at the public auction for P2,625,000.00
and the Quezon City property for P2,231,416.67. On both occasions, respondent bank emerged as the
highest bidder. By applying simple mathematical operation, the mortgaged properties were purchased by
the respondent at the public auctions for P4,856,416.67; thus, after deducting therefrom the balance of
petitioner LCKs obligation in the amount of P2,962,500.00, an excess in the sum of P1,893,916.67
remains.
Needless to say, the fact of overpayment, though not expressly included in the issues raised in the Pre-
Trial Order dated 8 September 2000, can be evidently inferred from the stipulations and admissions made
by the parties therein. Even only upon plain reading of the said Pre-Trial Order, it can be readily discerned
that there was an overpayment.

RULING on CA: The Court of Appeals Ruling is hereby REVERSED

Given the foregoing discussion, this Court finds the respondent bank liable not only for retaining the
excess of the bid price or the surplus money in the sum of P1,893,916.67, but also for paying the interest
thereon at the rate of 6% per annum from the time of the filing of the complaint until finality of judgment.
Once the judgment becomes final and executory, the interest of 12% per annum, should be imposed, to be
computed from the time the judgment becomes final and executory until fully satisfied.

DOCTRINE: PRE TRIAL


The conduct of pre-trial in civil actions has been mandatory as early as 1 January 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 and to take the trial of cases out of the realm of surprise and
maneuvering.
Pre-trial is an answer to the clarion call for the speedy disposition of cases. Hailed as the most important
procedural innovation in Anglo-Saxon justice in the nineteenth century, pre-trial is a 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. Pre-trial seeks to achieve the following:
(a) The possibility of an amicable settlement or of a submission to alternative modes of dispute resolution;
(b) The simplification of the issues;
(c) The necessity or desirability of amendments to the pleadings;
(d) The possibility of obtaining stipulations or admissions of facts and of documents to avoid unnecessary
proof;
(e) The limitation of the number of witnesses;
(f) The advisability of a preliminary reference of issues to a commissioner;
(g) The propriety of rendering judgment on the pleadings, or summary judgment, or of dismissing the
action should a valid ground therefor be found to exist;
(h) The advisability or necessity of suspending the proceedings; and
(i) Such other matters as may aid in the prompt disposition of the action.

Citibank, N.A vs Chua

Facts:
Citibank is a foreign commercial banking corporation duly licensed to do business in the Philippines.
Private Respondent spouses Cresencio and Zenaida Velez, were good clients of the bank branch in Cebu,
until March 14, 1986 when they filed a complaint for specific performance and damages against it before
the RTC of cebu. On March 30, 1990, the date of the Pre-trial conference, counsel for petitioner bank
appeared, presenting a SPA executed executed by the Citibank officer Florencia Tarriela in favor of the
banks counsel, the J.P Garcia & Associates, to represent and bind petitioner bank at the pre-trial
conference.

Inspite of this SPA, counsel for the private respondent orally moved to declare petitioner bank in default
on the ground that the SPA was not executed by the board of directors of Citibank. In Petioners Written
opposition, attached was another SPA of made by the vice president and the highest ranking officer of
Citibank Philippines constituting and appointing J.P Garcia & associates to represent and bind the bank at
the pre-trial conference.

On the schedules pre-trial conference, Private respondents reiterated the oral motion to declare petitioner
bank in default for its failure to appear through an authorized agent and that the documents presented are
not in accordance with the law. On august 15, 1990 respondent judge issued an order declaring the
petitioner bank in default on the reason that although a foreign corporation, it is still bound by the laws of
the Philippines and such powers (SPA) can only be exercised by the board of directors and NOT by the
vice president.

As such, with no proper SPA of giving J.P Garcia associates the power to represent them, petitioner bank
had no representation during the Pre-trial conference.

Petitioner bank then filed a petition for certiorari, prohibition and mandamus with preliminary injuction
and/or temporary restrainting order with the CA.

CA dismissed the petition Hence this case

Issue:
Whether or not a resolution of the BOD is always necessary for authority to an agent to represent the
corporation in court cases

Held:
The court held that NO, as a general rule, all corporate powers are to be exercised by the BOD. Sec 25
and 23 of the Corporation code is clear in stating that corporate powers may be directly conferred upon
corporate officers or agents by statute, the articles of incorporation ,the by-laws or by resolution or other
act of the board of directors.

REMEDIAL LAW; CIVIL PROCEDURE; PRECIPITATE ORDERS OF DEFAULT FROWNED UPON


BY SUPREME COURT; REASON THEREFOR; WHEN PARTY MAY BE PROPERLY DEFAULTED.
We reiterate the previous admonitions of this Court against "precipitate orders of default
as these have the effect of denying the litigant the chance to be heard. While there are
instances, to be sure, when a party may be properly defaulted, these should be the
exceptions rather than the rule and should be allowed only in clear cases of an obstinate
refusal or inordinate neglect to comply with the orders of the court. Absent such a showing,
the party must be given every reasonable opportunity to present his side and to refute the
evidence of the adverse party in deference to due process of law".

*the case is a corporation law case however the doctrine reiterated above is what I think is important in
our study of civil procedure. Hehe not sure. Goodluck

Paredes, Alago and, Baybay vs. Verano and Hinunangan

Facts:
The legal battle began with a complaint for the establishment of a right of way filed by the petitioners
against the defendants. The complaint was filed in the RTC of Maasin City, Southern Leyte. It culminated
with a compromise dated april 26, 1994 wherein respondent Hinunangan granted a 2 meter-wide Right of
way in favor of the petitioners in consideration of an amount worth 6,000 Pesos which petitioners agreed
to pay.

Alleging that petitioners had blocked the passageway in violation of the Compromise agreement
respondents filed for specific performance with damages against the petitioners also in the RTC of maasin
city, southern Leyte.

Subsequent to the answer, Petitioners filed a motion to dismiss on the ground of lack of cause of action.
The motion was denied thus the petitioners elevated the order of denial to the CA where the motion was
still denied.

Hence pre-trial was set on april 24, 2003 but was reset to june 3. However the pre-trial on june 3 did not
push through either because none of the parties appeared.

The pre-trial was reset to November 11 2003 however, the petitioner Baybays counsel asked to reset the
case on account of a conflicting hearing. On November 11, 2003 the petitioners were all present except
their counsel. The frustration of the court showed stating that the petitioners counsel has not appeared in
any of the cases, the court however still agreed to reset the case on jan 23, 2004.

On jan 5, 2004 before the pre-trial the petitioners filed a manifestation of willingness to settle with a
request of cancellation of the January 23, 2004 hearing.

However the hearing still pushed through on jan 23 2004. In the said hearing the petitioners counsel still
failed to appear, hence the RTC allowed the respondents to present evidence ex parte, for failure of
counsel to appear . Petitioners filed for a motion for reconsideration but was denied by the RTC

Thus, the petitioners filed a petition for certiorari with the CA, however such petition was dismissed
outright for failure of the petitioners to attach the original duplicate copies of the annexes as well as
failure to submit other pleadings pertinent. The subsequent Motion for reconsideration was also denied
even with the amendment of such incomplete petition.
Hence it was brought up to the SC.

Issue:
Whether or not the absence of the counsel for defendants at the pre-trial, with all defendants themselves
present, is a ground to declare defendants in default and to authorize plaintiffs to present evidence ex
parte.

Held:
The court held that, the order of the RTC allowing respondents tp present evidence ex parte was
undoubtedly to the detriment of the petitioners. The constitution guarantees that no person shall be
deprived of property without due process of law. What should guide judicial action is the principle
that a party-litigant is to be given the fullest opportunity to establish the merits of his complaint or
defense rather than for him to lose life, liberty or properties on technicalities

Simply put nothing in the rules of court authorizes a trial judge to allow the plaintiff to present evidence
ex parte.

LCK Industries Inc. vs. Planters Development Bank, G.R. No. 170606, November 23, 2007

Calalang vs. CA, 217 SCRA 462 (1993)

PETITIONERS : Conrado Calalang


Defendants : Hugo Arca, Rio Salceda, Acropolis Trading Corporation
RESPONDENT : Court of Appeals ; Filipinas Manufacturers Bank

Facts :

This is a petition for review on certiorari seeking to annul the decision of CA which set aside order of
dismissal issued by lower court.

Respondent bank filed a complaint for collection of sum of money against petitioner and three other
defendants. Petitioner have been served with summoned while the other three defendants were not
because clerk employee was the one who received it and the other one is no longer residing at the given
address.

Petitioner filed a Motion to Dismiss while the other defendants filed a Motion for Bill of Particulars.

Lower Court : Motion for Bill of Particulars was granted while the Motion to Dismiss was left
unresolved. The last pleading filed regarding the Motion to Dismiss was the reply of petitioner Calalang
to the opposition to the motion to dismiss by respondent bank which was filed on 1980.

Arca, filed a Motion to Dismiss which necessitated the filing of various pleadings in relation thereto by
respondent bank.
A hearing was scheduled. Arca filed his answer with compulsory counterclaim to the complaint which
was received by respondent banks former counsel.

This case was set for several times for pre trial. First two scheduled hearings, respondent bank failed to
appear causing dismissal without prejudice but it was set aside upon motion for reconsideration of
respondent bank. (November 29,, 1985, January 29,, 1986, May 12, 1986, November 19, 1986, January
14, 1987, February 27,1987)

Hearing was transferred with agreement of both parties but counsel of Arca failed to appear.

Lower Court : Thus the Judge made an order saying that the pre trial conference scheduled is cancelled
until further assignment or until any of the parties herein shall make the appropriate steps in connection
therewith.

Respondent bank filed a manifestation while the petitioner filed a motion to dismiss the complaint on
ground that respondent bank failed to prosecute the case for an unreasonable length of time

Trial Court : Issued an order setting pre trial conference

Respondent banks counsel appeared late for 15 minutes causing dismissal of the case. Respondent Bank
filed motion for reconsideration for dismissal citing reason for his late arrival Unusually heavy traffic in
Kamias Road, QC . (January 7, 1988)

Trial Court: Motion for Reconsideration was DENIED.

Respondent bank appealed it to CA.

CA: SET ASIDE dismissal of the case and remand it to the court of origin

Hence this petition.

ALLEGATION OF PETITIONER :

1. CA erred in ruling that January 7, 1988 pre trial was pre mature

Issue :

Whether or not pre trial on January 7, 1988 was really pre mature

Held :
No. The period to appear and file the necessary pleading having expired on the Acropolis Trading
Corporation, the lower court can direct that a pre trial conference be held among the answering
defendants.

DOCTRINE : A pre trial cannot validly be held until the last pleading has been filed which last
pleading may be the plaintiffs reply, except where the period to file the last pleading has lapsed.

Citibank N.A. vs. Chua, 220 SCRA 75 (1993)

Paredes vs. Verano, 504 SCRA 264

Mercader vs. DBP (Cebu Branch), 332 SCRA 82

Facts: Maderazo applied for a loan with DBP which was secured by the Talisay-Minglanilla Estate.
DBP required Maderazo to construct a 5-meter wide road right of way over the adjoining Lot No.
2985 which was owned by the Manreal spouses. Maderazo and the Manreals executed a contrat of
lease for the establishment of the right of way for a period of 20 years. However, the lease was not
registered due to Manreals failure to deliver the TCT of Lot No. 2985.
Nine years later or on January 6, 1976, Maderazos children, the spouses Florina Maderazo-
Mercader and Bernardo Mercader (Mercader spouses) executed a contract of lease with the the
Manreals over the REMAINING portion of Lot No. 2985 for a period of 4 months and 20 years and
extensively cultivated the land, planted 600 calamansi trees, fenced the lots and constructed canals.
Again, the Manreals failed to deliver the TCT of Lot No. 2985 for the annotation of the lease
contract therein.
The Mercaders subsequently discovered that the Manreals failed to deliver the TCT because they
offered the lot (including the improvements introduced by the Mercaders) as collateral for a
P150,000 deep sea fishing loan with the DBP. Subsequently, the Manreals defaulted in the payment
of their loan prompting DBP to foreclose Lot No. 2985 including all improvements thereon.

RTC:
The Mercaders filed a complaint for specific performance with the RTC of Cebu PRAYING for
DBP to respect their interests by excluding the improvements from the foreclosure proceedings, or
if the foreclosure takes place, declare the same null and void or in the alternative, order DBP to
reimburse them for the cost of improvements and loss of expected profits.

DBP, in its ANSWER, admitted the existence of the loan of the Maderazos and the deep sea fishing
loan which was secured by the Lot. DBP maintained that the alleged unregistered interest of the
Mercaders did not and could not bind DBP and PRAYED for the dismissal of the complaint on the
ground of prematurity since there was no foreclosure yet.
Subsequently, Lot No. 2985 was sold, among other mortgaged lots to DBP as the highest bidder.

PRE-TRIAL STAGE:
DBP, through its Manager, Mr. Roa, offered the Mercaders 3 OPTIONS by which they could
amicably settle subject to the approval of the Board of Governors of DBP. First option Sale,
Second option Lease-purchase and the Third option Lease. The Mercaders chose the second
option (132,598.00 as consideration and 1,105.00 as Monthly lease purchase for 10 years) and
deposited P3,315 with the bank and DBP issued an official receipt of payment as earnest money to
purchase the lot. However, the COMPROMISE AGREEMENT still required the approval of the
Board of Governors.

The Mercaders then requested that the amortizations be paid on a quarterly basis instead. DBP
rejected the request along with the original conditions packaged considering that the market value
of the property increased. With this, the court terminated the pre-trial and set the case for hearing.

On 7 November 1985, the MERCADERs filed a Supplemental Pleading insisting the consummation
of the lease-purchase option with the payment of the earnest money. The DBP filed its Opposition to
the Supplemental Pleading.

RTC DECISION: First, DBP unnecessarily and unjustifiably made the Mercaders believe that the
lease purchase option would be more or less approved. Second, DBP could not have had knowledge
of the existence of the unrecorded lease as the possession and cultivation was open, notorious and
was public knowledge in the area. RTC ruled in favor of the Mercaders and ordered DBP to: 1. To
Respect the contract of lease between the Mercaders and the Manreals. 2. To exclude the interests
of the Mercaders from the foreclosure proceedings. 3. To cause the annotation of the lease contract
in the TCT. 4. Execute the deed of sale, subject to the approval of the Manila Office of DBP.
COURT OF APPEALS DECISION: CA found that the trial court erred in treating the lease-
purchase option as a controversial issue considering that it was outside the parties pleadings and
ordered the Mercaders to immediately turn over the possession of the lot to the DBP.

SUPREME COURT:
Mercader asserts that CA erred in holding that the trial court should not have taken cognizance of
the lease-purchase option as a controversial issue since it was not raised in the pleadings and that
the trial court correctly took cognizance of the lease-purchase option as a controversial issue
because it was PART AND PARCEL OF THE PRE-TRIAL STAGES.
DBP contends that questions of facts are not reviewable on appeal and that it opposed and objected
to in and at all stages of the trial, all attempts by the MERCADERs to introduce evidence on the
lease-purchase option.

SC DECISION: CA erred in disregarding as material the lease-purchase option on the ground that
it was not raised in the pleadings. First, the lack of the lease-purchase option in the INITIATORY
PLEADINGS is explained by the fact that the trial court only took cognizance of the lease-purchase
option when it became an integral component of the pre-trial proceedings. Second, the
SUPPLEMENTAL PLEADING subsequently filed by the Mercaders served to aver supervening
facts which were then not ripe for judicial relief when the original pleading was filed. It was meant
to supply deficiencies in aid of the original pleading, and not to dispense with the latter. It was
patently erroneous for the Court of Appeals to pronounce that the lease-purchase option was not
raised in the pleadings.

The DBP is estopped from questioning the trial courts inclusion of the lease-purchase option as a
controversial issue as DBPs counsel rigorously cross examined Bernardo Mecrader on the lease-
purchase option and Mr. Carpio, the Chief of the Collections Department of DBP. This action of the
trial court finds anchor on Section 4, Rule 20 of the Rules of Court which reads:
Section 4. Record of pre-trial results. -- After the pre-trial the court shall make an order which
recites the action taken at the conference, the amendments allowed to the pleadings, and the
agreements made by the parties as to any of the matters considered. Such order shall limit the
issues for trial to those not disposed of by admissions or agreements of counsel and when entered
controls the subsequent course of the action, unless modified before trial to prevent manifest
injustice.

DOCTRINE: The purpose of the Pre-Trial is to obviate the element of surprise, hence, the parties
are expected to disclose at the pre-trial conference all issues of law and fact which they intend to
raise at the trial, except such as may involve privileged or impeaching matter. Surprise factor is
eliminated by an opposing partys 1. Opposition to a supplemental pleading. 2. Introduction of
evidence. 3. Intensive participation during the direct and cross examination of witnesses.

8. Intervention (Rule 19)


Mactan Cebu International vs. Heirs of Mioza, February 2, 2011

FACTS: Leila Hermosisima filed a Complaint for Reconveyance, Cancellation of Defendants Title,
Issuance of New Title to Plaintiffs and Damages for herself and on behalf of the other heirs of the
late Estanislao Moiza, her great grandfather. Estanislao had three children namely, Adriana,
Patricio and Santiago, was the registered owner of Cadastral Lot Nos. 986 and 991-A located in
Cebu City. In the late 1940s the National Airports Corporation (NAC) embarked on an expansion
project of the Lahug Airport. The NAC acquired several properties which surrounded the airport
either through expropriation proceedings or negotiated sales. Among those acquired through
negotiated sale were the Lot Nos. 986 and 991-A.

RTC:
Leila CLAIMED that her predecessors in interest executed a deed of sale on February 15, 1950
conveying the subject lots with a BUY BACK OPTION if the lots are no longer needed. The
expansion project did not push through. More than 40 years later, herein plaintiffs informed the
Mactan-Cebu International Airport Authority (MCIAA), the successor in interest of NAC, that they
were exercising their buy back option. The MCIAA refused on the ground that the sale was in fact
unconditional.
The MCIAA, through the OSG filed an ANSWER with COUNTERCLAIM. After the parties filed
their respective pleadings, trial ensued.

The heirs of Filomeno Mioza and the heirs of Florencia Mioza represented by Laureano Mioza and
Antonio Mioza respectively (Intervenors), filed a MOTION FOR INTERVENTION and attached a
COMPLAINT IN INTERVENTION with the RTC of Cebu. The intervenors ALLEGED in their
complaint that they are the true and legitimate heirs of the late Estanislao Mioza and that the
predecessors in interest of Leila executed in fraud of the intervenors, an Extra juducial Settlement
of the Estate of the late Estinaslao Mioza and adjudicated to themselves the properties of the
deceased then fraudulently, deceitfully and in bad faith, sold the lots to the NAC.

RTC DECISION: Motion for Intervention is DENIED. Ownership of the subject lots was merely a
collateral issue in the action. The PRINCIPAL issue to be resolved is whether or not the heirs of
Mioza WHOMEVER they may be have the right to repurchase the lots from the MCIAA and that
the claims of the Intervenors should be asserted and would be fully protected in a separate
proceeding. In addition, even if the motion was granted, it would unduly complicate and delay the
proceedings and finally, the Complaint in Intervention is flawed for the same was not verified and
lacked the certification against forum shopping.

The intervenors then filed a Motion for Reconsideration and attached the complaint in intervention
with the required verification and certificate against forum shopping. However, the same was
DENIED by the RTC. Prompting the intervenors to appeal before the CA.

COURT OF APPEALS DECISION: Orders of the RTC were REVERSED and SET ASIDE. In
ruling for the Intervenors, the CA rationicated that the determination of the true heirs of the late
Estanislao Mioza is not only a collateral issue, but a focal issue of the case, for if they can prove that
they are indeed the true heirs of Estanislao Mioza, there would be no more need to determine
whether the right to buy back the subject lots exists or not as the MCIAA would not have acquired
rights to the subject lots in the first place. In addition, to grant the motion for intervention would
avoid multiplicity of suits. As to the lack of verification and certification against forum shopping,
the filing of the MR with an attached verification and certificate of non forum shopping amounted
to substantial compliance.

Petitioner filed a Motion for Reconsideration but was denied. Hence, this petition.

ISSUE: W/N the CA gravely erred in allowing respondents to intervene.

SUPREME COURT DECISION: Petition GRANTED. Orders of the RTC are REINSTATED.
As to the procedural aspect, the initial lack of the Complaint in Intervention of the requisite
verification and certification against shopping was cured when they filed a MR and attached the
requisite verification and certificate against forum shopping.
However, their attempt to intervene is FLAWED. 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 intervenors 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 intervenors right or interest can be adequately pursued and
protected in a separate proceeding.

In the case at bar, the intervenors are claiming that they are the true heirs of the deceased
Estanislao. Provided their allegations were proven to be valid claims, they would have a LEGAL
INTEREST in the matter in litigation. Be that as it may, 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.

The allegations of fraud raised by the intervenors would unnecessarily complicate and change the
nature of the proceedings. In the same vein, in resolving the issue as to who the true heirs of
Estanislao Mioza, the parties would have to submit pieces of evidence in support of their respective
claims which would definitely cause unjust delay in the adjudication of the rights claimed by the
original parties.

DOCTRINES: 1. 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.
2. It is not proper where there are certain facts giving the intervenors case an aspect
peculiar to himself and differentiating it clearly from that of the original parties; the proper course
is for the would-be intervenor to litigate his claim in a separate suit.

Big Country Ranch Corp vs. CA, 227 SCRA 161


FACTS:
Palarca filed a complaint for the recovery of two barges named "Bangsi" and "Dangsol" from the possession of the First Coast
Guard District, Philippine Coast Guard, and seeking the issuance of a writ of replevin for that purpose.
The lower court, after the filing by said private respondent of the requisite bond of P600,000.00, executed in favor of therein
defendant and private respondent Golden Flame Sawmill Corporation, as defendant-intervenor, issued a writ of replevin for the
seizure of the two barges.
Thereafter, the implementing sheriff submitted a report to the trial court, dated May 27, 1991, to the effect that the barges in the
custody of the Philippine Coast Guard were " BCRC I " and "BCRC II", allegedly with descriptions different from "Bangsi" and
"Dangsol." In order to properly determine the correct identities of the two barges in the custody of the Philippine Coast Guard,
the trial court ordered the re-admeasurement thereof by the Marine Surveyor of the Philippine Coast Guard in the presence of the
representatives of both parties.
Private respondent Golden Flame Sawmill Corporation filed an urgent motion for intervention, claiming ownership over the two
barges which it allegedly acquired from herein petitioner in a public auction sale, the motion was granted
Petitioner also filed a motion in the trial court seeking leave to likewise intervene in the case on the ground that it is the owner of
the two barges. Respondent Golden Flame Sawmill Corporation filed an opposition thereto. Hence the trial court, issued an order
denying petitioner's motion for leave to intervene and ordering the release of the two barges
The pertinent part of the order reads:
. . . it appearing that the said movant (petitioner) has not alleged any legal interest over the matter in litigation, which are the two
barges involved, or in the success of either of the plaintiff, defendant or defendant-intervenor, or legal interest against; all of
them, or that said movant is so situated as to be adversely affected by a distribution or disposition of the said property (2 barges)
now in the custody of the Court; and considering the claim of defendant-intervenor that the two barges were already sold at
public auction sometime in April, 1989, due to the failure of the said movant to pay a loan, for which the said barges were
pledged, thereby divesting movant of any right over said barges, and finally, considering that the said motion will not only unduly
delay this case or prejudice the adjudication of the rights of the original parties, but also the said movant may protect its rights, if
it has any rights at all, in a separate proceedings (sic), the Court is constrained to deny the motion for lack of merit. 2

Not satisfied therewith, petitioner filed a petition for certiorari before respondent Court of Appeals which, however, dismissed
said petition.
Hence this appeal
ISSUE:
Whether or not Court of Appeals gravely abused its discretion affirming the order of the court a quo which denied petitioner's
motion for leave to intervene.

HELD:
NO. The right to intervene is not an absolute right. The statutory rules or conditions for the right of intervention must be
shown. 4 The procedure to secure the right to intervene is to a great extent fixed by the statute or rule, and intervention
can, as a rule, be secured only in accordance with the terms of the applicable provision. 5 Under our rules on intervention,
the allowance or disallowance of a motion to intervene is addressed to the sound discretion of the court. 6
The permissive tenor of the provision on intervention shows the intention of the rules to give to the court the full measure
of discretion in permitting or disallowing the same. 7 The discretion of the court, once exercised, cannot be reviewed by
certiorari nor controlled by mandamus save in instances where such discretion has been so exercised in an arbitrary or
capricious manner. 8 As a general guide in determining whether a party may intervene, 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. 9
It is firmly settled in this jurisdiction that intervention will not be allowed when it will unduly delay or prejudice the
adjudication of the rights of the principal parties, especially if intervenor's rights may be fully protected in a separate
proceeding. 11 Intervention is not intended to change the nature and character of the action itself, 12 or to stop or delay the
placid operation of the machinery of the trial. 13 The remedy of intervention is not proper where it will have the effect of
retarding the principal, suit or delaying the trial of the
action. 14
Also, in general, an independent controversy cannot be injected into a suit by intervention, 15 hence such intervention will
not be allowed where it would enlarge the issues in the action and expand the scope of the remedies. 16 It is not proper
where there are certain facts giving intervenor's case an aspect peculiar to himself and differentiating it clearly from that
of the original parties; the proper course is for the would-be intervenor to litigate his claim in a separate suit.

Looyuko vs. CA, G.R. No. 102696, July 12, 2001


SYNOPSIS
In 1976, spouses Mendoza mortgaged their house and lot covered by TCT No. 1702 in favor of FGU. Later, FGU filed an action
against the spouses and obtained a favorable decision therein. The mortgaged property was then sold to FGU in the public
bidding and in 1989, the RTC ordered the issuance of a new TCT in favor of FGU. Before the new TCT could be issued,
however, spouses Gutang, and Looyuko, Uy and Cuyos, filed separate motions for intervention. The RTC allowed the motions
and the Court of Appeals affirmed the same. Here in issue is the validity of said motion for intervention. DSHTaC

The Court ruled in the negative. Section 2, Rule 12 of the Rules of Court requires that a motion for intervention should be made
"before or during a trial," meaning, "any time before rendition of judgment." Here, the motions for intervention were filed after
judgment had already been rendered, after the same was already final and executory. Further, the requirement under Section 1,
Rule 68 of the Rules on the joinder of persons claiming interest subordinate to the mortgage sought to be foreclosed is not
mandatory but merely directory; that failure to comply therewith will not invalidate the foreclosure proceedings. The effect is that
the decree entered in the foreclosure proceeding would not deprive the subordinate lien holder of his right of redemption.

FACTS:
Civil Case No. 82-5792, RTC Manila
(Looyuko and Uy vs. Spouses Mendoza)
On April 22, 1977, Albert Looyuko and Jose Uy, through their counsel, Atty. Victoria Cuyos, filed a complaint against the
Spouses Mendoza before the Regional Trial Court(RTC) of Manila. The Manila RTC issued a writ of preliminary attachment over
the property and a notice of levy on attachment bearing the date April 22, 1977 was annotated at the back of the TCT No. 1702.
Property was sold at public auction with Looyuko and Uy as the highest bidders.||| Hence title was issued in the name of Looyuko
and Uy.

Civil Case No. 13122, RTC Iloilo

(Antonia Gutang vs. Tomas Mendoza)|||

Antonia Gutang filed a complaint for a sum of money with damages against Tomas Mendoza||| Judgment was rendered in favor
of Antonia Gutang and the decision later became final and executor. Antonia Gutang caused to be annotated on the same TCT
No. 1702 a notice of levy on execution. On June 8, 1984, the property was sold at public auction to Antonia Gutang. Gutang filed
with the RTC of Rizal a petition for the cancellation of TCT No. 1702 and the issuance of a new title in her name. Petition was
granted. Consequently, TCT No. 1702 was cancelled and TCT No. 242 in the name of Antonia Gutang was issued.

On December 2, 1976, spouses Tomas and Linda Mendoza executed a mortgage over the subject property in favor of FGU
Insurance Corporation. As the spouses failed to satisfy the obligation secured by the mortgage, FGU filed an action with the RTC
of Manila. Spouses Mendoza were declared as in default and evidence were received ex-parte for failure to appear. May 19, 1988
RTC rendered a decision in favor of FGU.

FGU filed a motion for partial reconsideration, pointing out that the action was not for a sum of money but for foreclosure of
mortgage. RTC issued an Order granting FGUs motion. On September 14, 1988, the Manila RTC issued a writ of execution. On
November 24, 1988, the deputy sheriff in a public bidding sold the parcel of land covered by TCT 1702 to FGU, the highest
bidder. A certificate of sale was thereafter issued in FGUs favor. RTC issued an order for the cancellation of TCT No. 242 and
the issuance of a new TCT in FGUs name.

Before the new TCT could be issued, spouses Gutang filed a motion for intervention and to set aside the judgment of the RTC,
alleging that they are the new registered owners of the property. In an Order dated February 9, 1990, the RTC allowed the motion
for intervention, holding that the failure of FGU to implead the Spouses in the action for foreclosure deprived the latter of due
process. Thus, the decision on May 19, 1988 is reconsidered set aside together with all orders subsequent and related thereto.

Looyuko et al. filed a motion for intervention, which the RTC granted

FGU filed a motion for reconsideration on its order to set aside the dicsion on May 19, 1988, however it was denied. FGU filed a
petition for certiorari, prohibition and mandamus in the Court of Appeals, arguing that the trial court committed grave abuse of
discretion in granting the Spouses Gutangs motion for intervention since the RTC decision, as amended, was already final and
executory.

On March 13, 1991, the Court of Appeals received an Urgent Motion by Juan Uy, Alberto Looyuko and their counsel, Atty.
Cuyos, praying for leave to file a motion for intervention. They alleged that they were attachment creditors of the spouses Tomas
and Linda Mendoza whose property covered by TCT No. 1702 was attached as per entry No. 11728 duly inscribed on April 22,
1977 and subsequently carried over to TCT No. 242 in the name of the Spouses Gutang. On April 26, 1991, the court issued a
resolution allowing Looyuko et al.s motion for intervention.
The Court of Appeals ruled that the action before the RTC was not actually an action for foreclosure but one for collection of a
sum of money. The court also affirmed the order of the RTC allowing intervention, thus:
The Court, both from the factual, procedural and substantive points, finds that respondent court had just and valid reasons to
allow the private respondents to intervene in the case. Had it denied the intervention, the execution in satisfaction of the money
judgment against the judgment debtors, would be violative of section 15 of Rule 30, that should be on all the property, real and
personal, x x x of the judgment debtor x x x. when, in the case, the ownership of the parcel of land, covered by TCT 45066 is
claimed by private respondents as well as movants-intervenors. Finally, even if it is considered, as petitioner claims, petitioner
should have impleaded in its action all persons having or claiming an interest in the (mortgage) premises subordinate in right to
that of the holder of the mortgage, all of whom shal be made defendants in the action (sec. 1, Rule 68, Rules of Court) and
without their inclusion there can be no final determination in the action. Petitioner did not include private respondents as well as
movants-intervenors, both of whom hold liens on the same property. Even under this aspect, respondent court should not be
faulted for allowing private respondents to intervene, considering its reason that what (is) sought to be safeguarded (is) x x x the
provision of Rule 68 of the Rules of Court. And while the time to intervene, under section 2, of Rule 12, is before or during a
trial, x x x, in its discretion x x x, or even on the day when the case is submitted for decision ( Falcasantos vs. Falcasantos, L-
4627, May 13, 1952), or at any time before the rendition of final judgment (Lichauco vs. C.A., ET AL., L-23642, Mar. 13, 1975),
in Director of Lands vs. C.A., et al. (L-45168, Sept. 25, 1979), intervention was permitted pending appeal in order to avoid
injustice which must have impelled the respondent court to allow the intervention.
Be that as it may, insofar as the default judgment dated January 27, 1988, ordering the defendants spouses Mendoza, jointly and
severally, to pay petitioner the judgment debt, interest, attorneys fees and costs, and which money judgment was restated in the
Order dated may 19, 1988, since that judgment had already become final and executory and in the process of execution, what
cropped up in the interim on the question of whether or not the money judgment can be enforced against the parcel of land
covered by TCT 450666, it appearing that petitioner, private respondents and herein movants-intervenors are all having and
claiming interest in that property, a question which has no relevance and would not affect the correctness of the money judgment,
the respondent court had no reason to reconsider and set aside the judgment which had already become final and executory, can
no longer be altered, amended, reconsidered, set aside. Nothing more can be done therewith. The court which rendered it has no
more authority to modify or revoke it, except for its execution, otherwise, there would be not end to the litigation.Hence, the
money judgment should be maintained and set at rest as and all that remains to be done in connection therewith is to have the
same properly executed against the judgment debtors.
On August 16, 1991, the Court of Appeals noted a motion for leave to intervene by Schubert Tanunliong.
Subsequently, FGU and Looyuko et al. filed their respective motions for reconsideration. On October 31, 1991 the Court of
Appeals issued a resolution denying both motions for reconsideration.
Schubert Tanunliong claims that on December 19, 1985, the Spouses Mendoza sold the subject house and lot to him.
Subsequently, on January 9, 1986, Alberto Looyuko and John Uy, the plaintiffs in Civil Case No. 82-5792, allegedly assigned to
Tanunliong their rights and interests over the property. The validity of the assignment, however, is refuted by Looyuko, et al. [11]
On January 29, 1987, FGU, the plaintiff in Civil Case No. 82-9760 likewise assigned all its rights and interest over said property
to Tanunliong. The assignment is not denied by FGU. On August 23, 1991, Tanunliong filed before the RTC of Pasig a complaint
for the cancellation of title, accounting and issuance of a writ of preliminary injunction against Antonia Gutang, David Gutang,
Elizabeth Gutang Ledesma, Atty. Ramon Gonzales (the counsel for the Gutangs), and Atty. Victoria Cuyos. The case was
docketed as Civil Case No. 61209.Tanunliong alleged, among others, that Antonia Gutang obtained the Order in LRC Case No.
R-3613, canceling TCT No. 1702 and ordering the issuance of TCT No. 242 in favor of the Gutangs, through fraud and
misrepresentation and without notice to FGU. Consequently, said Order was void.
The defendants filed a motion to dismiss Tanunliongs complaint on the ground that the RTC had no jurisdiction over the case, the
complaint in reality being an action for the annulment of the Order of the Pasig RTC in LRC Case No. R-3613. The RTC denied
said motion but the Court of Appeals, upon a petition for certiorari and prohibition by the Gutangs and Gonzales, ruled otherwise.
The appellate court held that Tanunliongs action, though denominated as one for cancellation of title, accounting and for issuance
of preliminary injunction is, in truth, a case for annulment of judgment.
Tanunliong thus assails the ruling of the Court of Appeals in G.R. No. 108257, maintaining, in essence, that the action for
cancellation of title, accounting and issuance of a writ of preliminary injunction is proper.

ISSUE:

Whether or not the motion for intervention filed by the Spouses Gutang and Looyuko et al. in Civil Case No. 82-9760 proper
considering that the case was already final and executory?
HELD:

The present Rules have clarified that the motion should be filed any time before rendition of judgment. [13]
1. The former rule as to when intervention may be allowed was expressed in Sec. 2, Rule 12 as before or during a trial, and this
ambiguity also gave rise to indecisive doctrines. Thus, inceptively it was held that a motion for leave to intervene may be filed
before or during a trial even on the day when the case is submitted for decision (Falcasantos vs. Falcasantos, L-4627, May 13,
1952) as long as it will not unduly delay the disposition of the case. The term trial was used in its restricted sense, i.e., the period
for the introduction for intervention was filed after the case had already been submitted for decision, the denial threof is proper
(Vigan Electric Light Co., Inc. vs. Arciaga, L-29207 and L-29222, July 31, 1974). However, it has also been held that intervention
may be allowed at any time before the rendition of final judgment (Lichauco vs. CA, et al., L-23842, Mar. 13, 1975). Further, in
the exceptional case of Director of Lands vs. CA, et al. (L-45168, Sept. 25, 1979), the Supreme Court permitted intervention in a
case pending before it on appeal in order to avoid injustice and in consideration of the number of parties who may be affected by
the dispute involving overlapping of numerous land titles.
2. The uncertainty in these ruling has been eliminated by the present Sec. 2 of this amended Rule which permits the filing
of the motion to intervene at any time before the rendition of the judgment in the case, in line with the doctrine in
Lichauco above cited. The justification advanced for this is that before judgment is rendered, the court, for god cause shown,
may still allow the introduction of additional evidence and that is still within a liberal interpretation of the period for trial. Also,
since no judgment has yet been rendered, the matter subject of the intervention may still be readily resolved and integrated in the
judgment disposing of all claims in the case, and would not require an overall reassessment of said claims as would be the case if
the judgment had already been rendered.[14]
In the present case, the motions for intervention were filed after judgment had already been rendered, indeed when the case was
already final and executory. Certainly, intervention can no longer be allowed in a case already terminated by final judgment. [15]
Intervention is merely collateral or accessory or ancillary to the principal action, and not an independent proceeding; it is an
interlocutory proceeding dependent on or subsidiary to the case between the original parties. [16] Where the main action ceases to
exist, there is no pending proceeding wherein the intervention may be based. [17] Here, there is no more pending principal action
wherein the Spouses Gutang and Looyuko et al. may intervene.
A decision was already rendered therein and no appeal having been taken therefrom, the judgment in that main case is now final
and executory. Intervention is legally possible only before or during a trial, hence a motion for intervention filed after trialand, a
fortiori, when the case has already been submitted, when judgment has been rendered, or worse, when judgment is already final
and executoryshould be denied.[18]
In exceptional cases, the Court has allowed intervention notwithstanding the rendition of judgment by the trial court. In Director
of Lands vs. Court of Appeals,[19] intervention was allowed even when the petition for review of the assailed judgment was
already submitted for decision in the Supreme Court. Recently in Mago vs. Court of Appeals,[20] the Court granted intervention
despite the case having become final and executory. It must be noted, however, that in both these cases, the intervenors were
indispensable parties. This is not so in the case at bar.
Section 1, Rule 68 of the Rules of Court requires all persons having or claiming an interest in the premises subordinate in right to
that of the holder of the mortgage be made defendants in the action for foreclosure. The requirement for joinder of the person
claiming an interest subordinate to the mortgage sought to be foreclosed, however, is not mandatory in character but merely
directory, in the sense that failure to comply therewith will not invalidate the foreclosure proceedings. A subordinate lien holder is
a proper, even a necessary, but not an indispensable, party to a foreclosure proceeding. Appropriate relief could be granted by the
court to the mortgagee in the foreclosure proceeding, without affecting the rights of the subordinate lien holders. The effect of the
failure on the part of the mortgagee to make the subordinate lien holder a defendant is that the decree entered in the foreclosure
proceeding would not deprive the subordinate lien holder of his right of redemption. A decree of foreclosure in a suit to which the
holders of a second lien are not parties leaves the equity of redemption in favor of such lien holders unforeclosed and unaffected.
Subordinate lien holders acquire only a lien upon the equity of redemption vested in the mortgagor, and their rights are strictly
subordinate to the superior lien of the mortgagee. Accordingly, an execution creditor who levies his execution upon property that
the judgment debtor has mortgaged to another can sell at most only the equity of redemption belonging to the mortgagor. As it is
the equity of redemption that the subordinate lien holders had acquired by the levy on execution and that was sold in the public
auction, this equity, not the property itself, was what the purchasers, who incidentally are the subordinate lien holders themselves,
bought at the execution sale. The failure of the mortgagee to join the subordinate lien holders as defendants in the foreclosure
suit, therefore, did not have the effect of nullifying the foreclosure proceeding, but kept alive the equity of redemption acquired
by the purchasers in their respective execution sales. Such equity of redemption does not constitute a bar to the registration of the
property in the name of the mortgagee. Registration may be granted in the name of the mortgagee but subject to the subordinate
lien holders' equity of redemption, which should be exercised within ninety (90) days from the date the decision becomes final.
This registration is merely a necessary consequence of the execution of the final deed of sale in the foreclosure proceedings.|||

Bon-Mar Realty vs. de Guzman, G.R. No. 182136, August 29, 2008

Facts:

Nicanor De Guzman needed funds for his candidacy as a member of the House of Representatives, so he and his wife
borrowed money from the Siochis. As collateral, the De Guzmans executed a deed of sale over two lots (TCT Nos. 9052 and
9053) located in Greenhills. The Siochis caused the cancellation of TCT Nos. 9052 and 9053, and new ones were issued in their
name (TCT Nos. 275-R and 276-R). The Siochis then sold the lots to the Uys who were issued TCT Nos. 277-R and 278-R. The
Uys then entered into a lease agreement with Roberto Salapantan.

When the De Guzmans found out about the transfers, they filed Civil Case No. 56393 to annul the sales to the Siochis
and Uys, and the lease agreement with Salapantan. The RTC of Pasig nullified the deeds of sale to the Siochis and the Uys as
well as the lease to Salapantan; the reconveyance of the properties to the De Guzmans; and the cancellation of the certificates of
title issued in the name of the Uys. It found that the agreement between the De Guzmans and the Siochis was a mere equitable
mortgage which precluded the latter from selling or foreclosing the lots without the knowledge of the former. The Siochis and
the Uys appealed the decision, but the CA affirmed the ruling of the RTC. They then appealed to the Supreme Court, and the
petition of the Siochis was denied. The order became final and executory.

While the petition of the Uys was pending, Bon-Mar filed a Civil Case No. 67315 for the nullification of the titles
against the Uys as it claimed that when the Siochi petition became final and executory, the Uy titles were cancelled and in lieu
thereof , new titles were issued in the name of the De Guzmans. The De Guzmans then sold the subject lots to the Garcias, and
Bon-Mar bought the lots from them. Bon-Mar then caused the subdivision of the properties into four lots, but these were
transferred to the Uys as they allegedly forged the signature of Bon-Mars president on the deed of sale and other related
documents. Bon-Mar then caused the annotation of a notice of lis pendens on the titles covering the subject properties.

The Supreme Court then rendered a Decision (for the Uy petition) finding that the Uys were not buyers in good faith;
that as equitable mortgagees, the Siochis could not validly appropriate the subject lots; that the Uys, as mere transferees, acquired
no better right to the subjects lots.

The case filed by Bon-Mar was granted in its favor, thus nullifying the title of the Uys. The Uys appealed to the CA,
but it was dismissed.

The De Guzmans then moved for the issuance of a writ of execution for the annulment of the sales to the Siochis and
Uys and to the lease to Salapantan, and this was granted by the RTC. However, Bon-Mar filed an Omnibus Motion asking leave
to intervene and quash the writ, so the writ was not implemented. In its Omnibus Motion, Bon-Mar alleged that the De Guzmans
no longer had any right to move for execution for the second time because it had been satisfied already; that allowing the De
Guzmans to execute on the judgment would constitute unjust enrichment and double recovery upon judgment; and that since it
(Bon-Mar) was the successor-in-interest of the De Guzmans, it must be considered as the present lawful registered owner of the
lots. Bon-Mar thus prayed for intervention in the proceedings, for a stay in the execution of the judgment, for the quashal of the
writ of execution, and for the issuance of an order decreeing that judgment in the De Guzman case had been fully satisfied.

RTC Decision:

The RTC denied Bon-Mars motion to intervene and to quash the writ of execution on the ground that its right to the
subject lots was merely inchoate, since its claim was still the subject of a pending appeal in the CA. The writ of execution was
carried out, and the names of the Uys were cancelled and TCTs were issued in the name of the De Guzmans.

Bon-Mar appealed the denial, but it was also denied by the CA.
CA Decision:
The CA ruled that Bon-Mar was a stranger to the litigation case between the De Guzmans and the Uys, and that the writ
of execution that was issued in said case was directed against the Uys, who were the registered owners of the property in question
at the time, and not Bon-Mar. The CA also found that Bon-Mars attempt at intervention was belated and improper since the case
was in its execution stage. Bon-Mar filed a motion for reconsideration which was denied. It did not appeal to the Supreme
Court, thus it became final and executory.

After the finality of the lis pendens case of Bon-Mar, it moved for its execution which was granted by the RTC. A writ
of execution was issued , but the Register of Deeds of San Juan refused to transfer the titles in Bon-Mars name.

The De Guzmans, in the case annulling the sales to the Siochis, Uys and the lease to Salapantan moved for the issuance
of a Writ of Possession, but Bon-Mar opposed. The RTC granted the prayer of the De Guzmans, to which Bon-Mar filed a
motion for reconsideration. Bon-Mar also filed an Affidavit of Third-Party Claim executed by its presient, Bonifacio Choa,
where it set forts its claim of ownership.

The RTC denied Bon-Mars motion for reconsideration, granting a writ of possession in favor of the De Guzmans. The
court did not conduct a hearing for its third-party claim , nor did it consider the same in the resolution of Bon-Mars motion for
reconsideration. Bon-Mar appealed the decision, and the CA issued a writ of preliminary injunction thus preventing the
enforcement of the writ of possession.

Meanwhile, after Bon-Mars request to cancel the titles in Uys names and issue new ones in its favor, the Registrar of
Deeds of San Juan denied such request, prompting Bon-Mar to file a special civil action for contempt against the RoD. The De
Guzmans sought to intervene, but it was denied by the RTC. Their Motion for Reconsideration was also denied. The CA gave
the De Guzmans the leave to intervene.

Issues:
1. Whether or not Bon-Mar may intervene in the proceedings in Civil Case 56393 (the annulment of sales to the Siochis and the
Uys, and the lease to Salapantan).

2. Whether or not the De Guzmans may intervene in SCA No. 2988-SJ (special civil action for contempt against the Registrar of
Deeds of San Juan.

Held

1. Yes.
Bon-Mar has been declared as successor-in-interest of the De Guzman, thus the former is not a mere stranger to the
litigation in the annulment of sales to the Siochis and Uys, and the lease to Salapantan. It is a necessary party who must be joined
in the suit if complete relief is to be accorded as to those already parties, or for a complete determination or settlement of the
claim subject of the action. Bon-Mars intervention is necessary in order to put an end to Civil Case 56393, because if it were
established that Bon-Mar obtained its title from the Garcias who in turn obtained the same from the De Guzmans, then there is
nothing left for the De Guzmans to execute, because their claim has been fully satisfied as early as 1995.

The trial court did not err when it initially denied Bon-Mars Omnibus Motion because at that that time, the decision in
Civil Case No. 67315 (which cancelled the Uys titles and recognized Bon-Mars ownership over the subject lots) had not yet
become final and executory.

Bon-Mar could not yet intervene in Civil Case No. 56393 until its title to the subject lots is established, or recognized,
by way of a final and executory decision in Civil Case No. 67315. Since title to the subject lots were then still registered in the
name of the Uys, Bon-Mar had nothing to show to the trial court in Civil Case No. 56393 that it had any legal interest to protect
in the subject lots.
With the finality of Civil Case No. 67315 (declaring Bon-Mar as owner of the subject lots), Bon-Mar acquired legal
interest to defend its title against any threat or challenge. The CA pronouncement that Bon-Mar is a stranger to the litigation in
Civil Case No. 56393 no longer applies, because the facts which gave rise to the decision in said case no longer holds true.

To warrant intervention, two requisites must concur: a) the movant has legal interest in the matter in litigation, and b)
intervention must not unduly delay or prejudice the adjudication of the rights of the parties nor should the claim of the intervenor
be capable of being properly decided in a separate proceeding. The interest, which entitles a person to intervene in a suit, must
involve the matter in litigation and of such direct and immediate character that the intervenor will either gain or lose by the direct
legal operation and effect of the judgment.

The judgment in Civil Case No. 67315 should have convinced the trial court to conduct an inquiry. Although Bon-
Mar may have conceded that it is a stranger to the litigation, the same does not bind the Court. While this Court gives
considerable weight to the parties formulation of the issues, the resolution of the controversy may warrant an approach
that goes beyond the narrow confines of the issues raised. Justice does not depend on the depth of the parties arguments;
it is based on the established facts and the applicable law. When Bon-mar moved to reconsider the trial courts Order
denying its motion to intervene and granting the writ of possession to the De Guzmans, the trial court should have
granted the same in view of the final and executory judgment in Civil Case No. 67315 declaring Bon-Mar as owner of the
subject lots.

Also, Sec. 16 of Rule 39 of the Rules of Court bestows upon third parties claiming rights to property under execution
the right to protect their interests by interposing a third-party claim in the same case, or by instituting a separate reivindicatory
action against the executing creditor. The third-party claim that is heard in the same case may be tried at length or summarily.
Proceedings to resolve the possession of third-party claimants may proceed independently of the action which said claimants may
bring to enforce or protect their claim of ownership over the property.

Bon-Mar should be given the opportunity to ventilate, in Civil Case No. 56393, and not in another suit, its claim that
the De Guzmans are unlawfully attempting to execute anew a judgment that has been previously satisfied. The judgment in Civil
Case No. 67315 is superior to that in Civil Case No. 56393, because the evidence established in the former renders the decision in
the latter case moot. It is therefore unnecessary for Bon-Mar to file a separate action against the De Guzmans.

2. No.
Contempt is not the proper remedy available to Bon-Mar for the Registrar of Deeds denial of its request for issuance of
titles pursuant to the judgment in Civil Case No. 67315. Under PD No. 1529, Bon-Mar should appeal the Registrar of Deeds
denial by consulta to the Commissioner of the Land Registration Authority. Under the 1997 Rules of Procedure, the resolution by
the Commissioner of the Land Registration Authority on the consulta may be appealed to the Court of Appeals, which has
exclusive jurisdiction to decide the same, within the period and in the manner provided in Rule 43 therof. SCA No. 2988-SJ
should thus be dismissed for being the wrong mode of remedy.

Executive Secretary vs. Northeast Freight, 581 SCRA 76

Facts:
On 4 April 2005, President GMA issued EO No. 418 [Modifying the Tariff Nomenclature and Rates of Import Duty on
Used Motor Vehicles under Sec. 104 of the Tariff and Customs Code of 1978 (PD No. 1464 as amended)] which imposed
additional specific duty in the amount of P500,000 for used motor vehicles imported into the country. Particularly relevant are
Sections 1 and 2 which state that :
Sec. 1 : The articles specifically listed in Annex A hereof, as classified under Section 104 of the Tariff and Customs Code of
1978, as amended, shall be subject to the rates of import duty indicated opposite each article except for trucks, buses and special
purpose vehicles.
Sec. 2: In addition to the regular rates of import duty, the articles specifically listed in Annex A hereof, as classified under Sec.
104 of the Tariff and Customs Code of 1978, as amended, shall be subject to additional specific duty of P500,000.

Seven enterprises of the Subic Bay Freeport Zone, collectively known as Subic enterprises (composed of Unitrans
Subic Venture Corp, Akram Subic Bay Trading Corp., Chifil Subic Intl Trading, Lucky Dale Subic Intl Inc., Phil-Pan Subic
Ventures, Inc., Sunlift Subic Intl Corp, and JJB Century Intl Ventures Corp) filed before the RTC of Olongapo a Petition for
declaratory relief challenging the constitutionality and legality of EO No. 418 on the ground that it violated their property rights
and impaired the obligation of contracts. The RTC granted the petition, and issued a writ of preliminary injunction to enjoin the
implementation of EO No. 418.

Northeast Freight Forwarders, Inc. filed a Motion for Leave to Intervene and Admit Petition in Intervention in the case
filed by Subic enterprises, so it could avail itself of the effects and benefits of the writ of preliminary injunction. Northeast
claimed that it would also be affected by EO No. 418 since it was engaged in the importation or trade of all types of motor
vehicles inside the Subic Bay Freeport Zone. The petitioners opposed the Motion, arguing that Northeast did not have any
interest to assail the EO because its Certificate of Registration and Tax Exemption disclosed that it was prohibited from importing
or trading used motor vehicles.

RTC Ruling:

The RTC allowed the intervention, citing Sec. 1 of Rule 19 of the Rules of Court. After evaluating the evidence
presented, the RTC found that Northeast had sufficient legal interest on the matter because it was in the business of importing
motor vehicles inside SBFZ as evidenced by its Certificate of Registration, and the accreditations issued by the LTO as importer
and dealer.

Petitioners filed with the Court of Appeals a Petition for Certiorari averring that the RTC committed grave abuse of
discretion in allowing the intervention.

CA Ruling:
The Court found no grave abuse of discretion attending the RTCs ruling, the same being supported by the attendant
circumstances and applicable law. The petition for certiorari was dismissed for lack of merit. The CA also denied the Motion for
Reconsideration of the petitioners.

Issue:
Whether or not Northeast may intervene.

Held:
Yes, pursuant to Sec. 1, Rule 19 of the Rules of Court.

SC Ruling:

Intervention is not a matter of absolute right, but may be permitted by the court when the applicant shows facts which
satisfy the requirements of the statute authorizing intervention. Under the Rules of Court, what qualifies a person to intervene is
his possession of a legal interest in the matter in litigation or in the success of either of the parties, or an interest against both; or
when he is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or
an officer thereof. As regards the legal interest as qualifying factor, such interest must be of a direct and immediate character so
that the intervenor will either gain or lose by the direct legal operation of the judgment. The interest must be actual and material.
The exercise of sound discretion as to permit intervention is limited by considering whether or not the intervention will unduly
delay or prejudice the adjudication of the rights of the original parties and whether or not the intervenors rights may be fully
protected in a separate proceeding.

To allow intervention, a) it must be shown that the movant has legal interest in the matter in litigation, or is otherwise
qualified; 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 the intervenors rights may be protected in a separate proceeding or not. Both requirements must concur.

Northeasts Certificate of Registration authorized it to engage in transshipment, assembling, trading, distributing,


marketing at wholesale insofar as may be permitted by law, goods and general merchandise of every kind and description
including but not limited to food products or commodities, all types of motor vehicles (excluding used motor vehicles in
accordance with EO 156) xxx. Petitioners based their argument that Northeast had no legal interest to intervene as they claimed
that Northeast was prohibited from importing and trading used motor vehicles. However, it must be noted that the phrase
excluding used motor vehicles was qualified by the words in accordance with EO 156. Said law only prohibits importation of
used motor vehicles into the customs territory or the Philippine territory outside the secured and fenced-in SBFZ. The
prohibition does not cover the importation of used motor vehicles into the SBFZ, for as long as they are stored, used , and traded
within the Zone or exported to other countries.

Northeast is similarly situated as Subic enterprises and would be prejudiced the same way. Therefore, Northeast should
be allowed to intervene.

Doctrine:
The allowance or disallowance of a motion to intervene is addressed to the sound discretion of the court. The
permissive term of the rules shows the intention to give to the court the full measure of discretion in permitting or
disallowing intervention.

9. Calendar of Cases/Subpoena/ Computation of Time (Rules 20, 21 and 22)

People vs. Montejo, 21 SCRA 722


Facts:

This case started with an accident wherein Felix Wee Sit recklessly drove a private jeep w/c overturned and
cause the death of 2 girls and SPI to 4 others.

The criminal action instituted by the City Fiscal of Zamboanga was due to an affidavit by one Uaje who was a
patrolman and deemed to be an important witness to the trial.

During the trial w/c took place in the RTC of Zamboanga, Uaje had returned to his home in Montalban, Rizal. Still
he was served summons and the return of w/c confirmed his receipt.

He did not appear at the trial to be examined and so the Fiscal filed a motion to ask for the arrest of Uaje or hold
him in contempt.

The trial judge denied the motion and the following MOR. The judge and the accused claimed in their answer
that Uaje was not a material witness since the same did not see the accident and that the judge relied on the
constitutional right to speedy trial and denied the prosecution compulsory process.

The judge relied on Section 9 of Rule 23 contending that if a witness was not bound by a subpoena since his
residence was admittedly not less than 50 kilometers from the place of trial, the failure to obey the same or to comply
with it could not in any manner whatsoever constitute contempt of court.

Issue: WON the judge was correct in denying the Fiscals motion.
Held:

No. The SC held that the aforementioned provision is applicable only to civil cases and that in denying the
motion for an order of arrest or a citation for contempt in the alternative, based on a clear misapprehension of the
Rules of Court, could be viewed as amounting to grave abuse of discretion. It would follow then that respondent
Judge should decide said motion without taking into consideration Section 9 of Rule 23.

Commissioner of Internal Revenue vs. Primetown Property, 531 SCRA 436

Facts:

Gilbert Yap vice chair of respondent Primetown Property Group, Inc., applied for the refund or credit of income
tax respondent paid in 1997 w/ the Revenue District No. 049 (Makati) of the Bureau of Internal Revenue where he
said that while business was good during the first quarter of 1997, respondent suffered losses amounting to
P71,879,228 that year.
According to Yap, because respondent suffered losses, it was not liable for income taxes.Nevertheless,
respondent paid its quarterly corporate income tax and remitted creditable withholding tax from real estate sales to
the BIR in the total amount of P26,318,398.32.Therefore, respondent was entitled to tax refund or tax credit.
On May 13, 1999, revenue officer Elizabeth Y. Santos required respondent to submit additional documents to
support its claim. Respondent complied but its claim was not acted upon. Thus, on April 14, 2000, it filed a petition for
review in the Court of Tax Appeals w/c dismissed the petition invoking Sec. 229 of the NIRC w/c states that no such
suit or proceeding shall be filed after the expiration of two (2) years from the date of payment of the tax or penalty
regardless of any supervening cause that may arise after payment.
By applying Article 13 of the Civil Code, the CTA said that the filing was late by 1 day.
Respondent appealed to the CA w/c reversed the CTA ruling reasoning that Article 13 of the Civil Code did not
distinguish between a regular year and a leap year. The rule that a year has 365 days applies, notwithstanding the
fact that a particular year is a leap year. A statute which is clear and explicit shall be neither interpreted nor construed.
Issue: How should the 2 year period be computed?
Held:
The SC while upholding the CA decision, used a different reason by applying Section 31, Chapter VIII, Book I of
the Administrative Code of 1987 instead of the Civil Code.
There obviously exists a manifest incompatibility in the manner of computing legal periods under the Civil Code
and the Administrative Code of 1987. For this reason, we hold that Section 31, Chapter VIII, Book I of the
Administrative Code of 1987, being the more recent law, governs the computation of legal periods. Lex posteriori
derogat priori.
We therefore hold that respondent's petition (filed on April 14, 2000) was filed on the last day of the 24th
calendar month from the day respondent filed its final adjusted return. Hence, it was filed within the reglementary
period.