Topic: Jurisdiction

FRANCEL REALTY CORPORATION, petitioner, vs. RICARDO T. SYCIP, respondent.

G.R. No. 154684. September 8, 2005
Doctrine: In general, lack of jurisdiction over the subject matter may be raised at any stage of
the proceeding, even on appeal. This defense may be determined from the factual allegations of
the complaint, regardless of the answer or even before the answer is filed.
Facts:
In November 1989 petitioner and respondent entered into a contract to sell a house.
Upon execution of such contract respondent made a down payment of P119,700.00 which was
considered as the monthly rentals at the rate of P2,686.00 per month. On March 16, 1990, the
townhouse subject of the contract was transferred in the name of the respondent as evidenced by
the TCT No. T-281788. Despite such transfer respondent refused to pay the balance of
P250,000.00. Despite several demands by petitioner respondent, including the demand dated
December 12, 1991 made by petitioners counsel, the respondent refused to reconvey the property
to petitioner. Petitioner suffered actual damages in form of repairs amounting to not less than
P100,000.00 as well as moral and exemplary damages, attorneys fees and litigation expenses.
Respondent filed a motion to dismiss on the ground of lack of jurisdiction but it was denied. In
denying the material allegations of the complaint respondent again invoked lack of jurisdiction
over the subject matter of the case and further alleged that there is a pending case between the
same parties involving the same townhouse before the HLURB for unsound real estate business
practice. The trial court, after trial, dismissed the case for lack of jurisdiction. CA, agreeing with
the trial court held that the case involved not just reconveyance and damages, but also a
determination of rights and obligations of the parties to a sale of real estate under PD 957 hence
such case falls under the jurisdiction of HLURB. Hence this petition for certiorari under rule 45
of the Rules of Court assailing the decision and resolution of CA
Issues:
Whether or not the lower court can dismiss a case after full blown trial on the ground of
lack of jurisdiction
Held:
Yes, the general rule remains: a courts lack of jurisdiction may be raised at any stage of
the proceedings, even on appeal. The reason is that jurisdiction is conferred by law, and lack of it
affects the very authority of the court to take cognizance of and to render judgment on the action.
Moreover, jurisdiction is determined by the averments of the complaint, not by the defenses
contained in the answer.
Petitioner argues that the CAs affirmation of the trial courts dismissal of its case was
erroneous, considering that a full-blown trial had already been conducted. In effect it contends
that lack of jurisdiction could no longer be a ground for dismissal after trial had ensued and
ended. The above argument is anchored on estoppel by laches which was enunciated in the case
of Tijam v. Sibonghanay to thwart dismissals on the ground of lack of jurisdiction. In the
Sibonghanay case, the Supreme Court held that a party may be barred from questioning a courts
jurisdiction after being invoked to secure affirmative relief against its opponent. In fine, laches
prevents the issue of lack of jurisdiction from being raised for the first time on appeal by a
litigant whose purpose is to annul everything done in a trial which it actively participated. The
Sibonghanay case is the exception rather than the general rule. The Sibonghanay case can
only be invoked in cases similar to it, such that lack of jurisdiction was raised so belatedly to
warrant the presumption that the party entitled to assert it had abandoned or declined to assert it.
In the case at hand, such is not the case because herein respondent has raised the issue of lack of
jurisdiction from the very beginning in his motion to dismiss, in his answer to the complaint and
even verbally during trial. This consistent and continuing objection to the trial courts
jurisdiction defeats petitioners contention that raising other grounds in a Motion to Dismiss is

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considered a submission to the jurisdiction of the court. We stress that Rule 9 of the Rules of
Court requires that all defenses and objections except lack of jurisdiction over the subject matter,
litis pendentia, bar by prior judgment and/or prescription -- must be pleaded in a motion to
dismiss or in an answer; otherwise, they are deemed waived. As to the excepted grounds, the
court may dismiss a claim or a case at any time when it appears from the pleadings or the
evidence on record that any of those grounds exists.
In this case the Supreme Court also discussed petitioners case with the HLURB,
petitioner avers that the present controversy is not cognizable by the HLURB because it was
filed by the developer rather than by the buyer as provided in PD No. 1344. Such contention is
unmeritorious. Petitioners strategy, if allowed, would open a convenient gateway for a
developer to subvert and preempt the rights of buyers by the mere expediency of filing an action
against them before the regular courts, as in this case. Fortunately, the CA saw through the ruse.
Contrary to petitioners contention, the HLURB is not deprived of jurisdiction to hear and decide
a case merely on the basis that it has been initiated by the developer and not by the buyer.

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Topic: Rule 2
ARTURO SARTE FLORES, petitioner, vs. SPOUSES ENRICO L. LINDO, JR. and
EDNA C. LINDO, respondents. G.R. No. 183984. April 13, 2011.
Doctrine: The principle against unjust enrichment, being a substantive law, should prevail over
the procedural rule on multiplicity of suits
Facts:
On 31 October 1995, Edna obtained a loan from Arturo Flores (herein petitioner)
amounting to P400,000 payable on 1 December 1995 with 3% compounded monthly interest and
3% surcharge in case of late payment. To secure the loan Edna executed a Deed of Real Estate
Mortgage (The Deed) covering a property in the name of Edna and her husband Enrico
(collectively as respondents). Edna also signed a promissory note and the Deed for herself and
for Enrico as his attorney-in-fact. Edna issued three checks as partial payments for the loan and
all checks were dishonored for insufficiency of funds, prompting petitioner to file a complaint
for Foreclosure of Mortgage with Damages against respondents which was raffled to RTC
branch 33. RTC branch 33 ruled that petitioner was not entitled to judicial foreclosure of the
mortgage since the Deed was executed by Edna without the consent and authority of Enrico.
RTC branch 33 also noted that the Deed was executed on 31 October 1995 while the SPA
executed by Enrico was only dated 4 November 1995. RTC, branch 33 further ruled that
petitioner was not precluded from recovering the loan from Edna as he could file a personal
action against her. However RTC branch 33 ruled it had no jurisdiction over the personal action
for it is the improper venue of such action and that it should be filed in a place where the plaintiff
or the defendant resides in accordance with Section 2, Rule 4 of the Revised Rules on Civil
Procedure. Petitioner filed a motion for reconsideration with RTC branch 33 but it was denied
for lack of merit.
On 8 September 2004, petitioner filed a complaint for Sum of Money with Damages
against respondents with RTC branch 42 of Manila. Respondents filed their answer with
Affirmative Defenses and Counterclaims where they admitted the loan but state that it only
amounted to P340,000. On 7 March 2005, respondents also filed a Motion to Dismiss on the
grounds of res judicata and lack of cause of action. RTC branch 42 denied the motion to dismiss
and ruled that res judicata will not apply to rights, claims or demands which although growing
out of the same subject matter, constitute separate or distinct causes of action and were not put in
issue in the former action. Respondents filed a motion for reconsideration which was denied by
RTC branch 42. Respondents filed a petition for Certiorari and Mandamus with Prayer for a Writ
of Preliminary Injunction and/or TRO before CA.
In 30 May 2008, CA set aside the orders of RTC branch 42 for being issued with grave
abuse of discretion. CA ruled that while the general rule is that a motion to dismiss is
interlocutory and not appealable the rule admits of exceptions and that is when the lower court
acted with grave abuse of discretion. CA ruled that under Section 3, Rule 2 of the 1997 Rules of
Civil Procedure, a party may note institute more than one suit for a single cause of action. If two
or more suits are instituted on the basis of the same cause of action, the filing of one on a
judgment upon the merits in any one is available ground for the dismissal of the others. CA ruled
that on nonpayment of a note secured by a mortgage, the creditor has a single cause of action
against the debtor, which is the recovery of credit with execution of the suit. Thus, the creditor
may institute two alternative remedies: either a personal action for collection of debt or real
action to foreclose mortgage, but not both. By filing a petition for foreclosure of the real estate
mortgage CA held that petitioner waived his personal action to recover the amount covered by
the promissory note. Petitioner filed a Motion for reconsideration but was subsequently denied
hence this petition before the court.
Issue:
Whether or not CA committed a reversible error in dismissing the complaint for
collection of sum of money on the ground of multiplicity of suits

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Held:
Yes, CA committed an error in dismissing the complaint. Although CA is correct in
saying that the two remedies are in the alternative and cannot be availed successively for it will
result in multiplicity of suits, there are circumstance in this case that the Court takes into
consideration. In the case at hand there is no dispute that Edna obtained a loan since she herself
admitted that she obtained a loan from the petitioners. Since she has obtained a loan, Edna would
be unjustly enriching herself at the expense of another. Under Art. 22 of the Civil Code which
provides that:
Art. 22. Every person who through an act of performance by another, or any other
means. Acquires at the expense of the latter without just or legal ground, shall return the
same to him
The principle of unjust enrichment requires two conditions: (1) that a person is benefited
without a valid basis or justification, and (2) that such benefit is derived at that expense of
another. In this case, although the Deed was declared erroneous there is no denying that she was
granted loan thereby unjustly enriching herself at the expense of another which is herein
petitioner. Considering the circumstances of the case, the principle against unjust
enrichment, being a substantive law should prevail over the procedural rule on multiplicity
of suits.

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Topic: Rule 3
GENEROSO SALIGUMBA, ERNESTO SALIGUMBA, and HEIRS OF SPOUSES
VALERIA SALIGUMBA ANDELISEO SALIGUMBA, SR., petitioners, vs. MONICA
PALANOG, respondent. G.R. No. 143365. December 4, 2008
Doctrine: The failure of counsel to comply with his duty under Section 16 to inform the court of
the death of his client and the non-substitution of such party will not invalidate the proceedings
and the judgment thereon if the action survives the death of such party.
Facts:
The case originated from a complaint for Quieting of Title with Damages filed by Sps.
Palanogs against Sps. Saligumba on 28 February 1977 before the RTC branch 3 of Kalibo,
Aklan. In the complaint Sps. Palanogs alleged that they have been in actual, open, adverse and
continuous possession as owners for more than 50 years of a parcel of land located in Solido,
Nabas, Aklan. Sps. Saligumbas allegedly prevented them from entering and residing on the
subject premises and had destroyed the barbed wires enclosing the land. Sps. Palanogs prayed
that they be declared true and rightful owners of the land.
During pre-trial Atty. Miralles counsel for Sps. Saligumbas, verbally moved for the
appointment of a commissioner to delimit the land in question. Present during the delimitation
were Sps. Palanogs, Sps. Saligumbas and Ernesto Saligumba, son of Sps. Saligumbas. Trial on
the merits ensued, at the hearing on 1 June 1984, only the counsel for Sps. Palanogs appeared.
Trial court issued an order resetting the hearing at 15 August 1984 and likewise directed Sps.
Saligumbas to secure another counsel who should be ready on that date. The order sent to Eliseo
Saligumba Sr. was returned to the court unserved with the notation Party-Deceased while the
order sent to defendant Valeria Saligumba was returned with the notation Party in Manila.
The case was continually postponed and moved but on 25 January 1985 the presentation
of evidence resumed on said date despite the motion for postponement by Atty. Miralles. The
exhibits were admitted and plaintiffs rested their case. Reception of evidence for the defendants
was scheduled on 3, 4 and 5 June 1985. On 3 June 1985, only plaintiffs and counsel appeared.
Upon their motion, Sps. Saligumbas were deemed waived to have the presentation of their
evidence. On 3 August 1987, after the lapse of more than 2 years, the Trial court submitted the
case for decision and on 7 August 1987, RTC branch 3 rendered a judgment on Civil Case No.
2570, declaring Sps. Palanogs the lawful owners of the subject land.
A motion for the issuance of a writ of execution of the said decision was filed but the trial
court, in its Order dated 8 May 1997, ruled that since more than five years elapsed after the date
of its finality, the decision could no longer be executed by mere motion.
Respondent Monica now a widow, filed a complaint seeking to revive and enforce the
decision date 7 August 1987 which she claimed was not barred by the Statute of limitations. She
impleaded herein petitioners the heirs of Sps. Saligumbas. Motion to implead was granted and
they were declared in default for failure to file a responsive pleading. RTC branch 5 rendered a
decision in favor of respondent for the revival of the judgment in Civil Case No. 2570. Trial
court ruled that the non-substitution of the deceased spouses did not have any legal significance.
The spouses Saligumbas children, who are the petitioners in this case, had no right to the
property while Valeria Saligumba was still alive. The trial court further found that when
defendant Valeria Saligumba died, her lawyer, Atty. Miralles, did not inform the court of the
death of his client. The trial court thus ruled that the non-substitution of the deceased defendant
was solely due to the negligence of counsel. Moreover, petitioner Ernesto Saligumba could not
feign ignorance of Civil Case No. 2570 as he was present during the delimitation of the subject
land. Hence, the present petition directly to the Court.
Issues:
Whether or not the failure of the deceased defendant spouses counsel to comply with his
duty under Section 16 Rule 3 of the Rules of Court will invalidate the proceedings

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Held:
No, failure to comply with his duty under Section 16 Rule 3 of the Rules of Court to
inform the court of their death and their non-substitution will not invalidate the proceedings
and the judgment thereon if the action survives the death of such party.
Petitioners argue that they were deprived of due process when there was no proper
substitution of the deceased Sps. Saligumbas despite Trial courts knowledge that deceased Sps.
were no longer represented by counsel. Civil Case No. 2570 is an action for quieting of title with
damages which is an action involving real property. It is an action that survives pursuant to
Section 1, Rule 87 16 as the claim is not extinguished by the death of a party. And when a party
dies in an action that survives, Section 17 of Rule 3 of the Revised Rules of Court (Now Section
16) provides that in case of death of a party, and upon proper notice, it is the duty of the court to
order the legal representative or heir of the deceased to appear for the deceased. But it is only
when there is proper notice, in the case at hand there was no proper notice but merely an
informal notice by way of notations. The notations are not the proper notice contemplated under
the rule. As the trial court could not be expected to know or take judicial notice of the death of a
party without the proper manifestation from counsel, the trial court was well within its
jurisdiction to proceed as it did with the case. Moreover, there is no showing that the courts
proceedings were tainted with irregularities. It is the duty of counsel for the deceased to inform
the court of the death of his client. The failure of counsel to comply with his duty under Section
16 to inform the court of the death of his client and the non-substitution of such party will not
invalidate the proceedings and the judgment thereon if the action survives the death of such
party. The decision rendered shall bind the partys successor-in-interest. Atty. Miralles was still
the counsel for deceased spouses since there was no withdrawal as counsel hence he is
responsible for the conduct of the case. Petitioners should have questioned immediately the
validity of the proceedings absent any formal substitution. Yet, despite the courts alleged lack of
jurisdiction over the persons of petitioners, petitioners never bothered to challenge the same, and
in fact allowed the proceedings to go on until the trial court rendered its decision. There was no
motion for reconsideration, appeal or even an action to annul the judgment in Civil Case No.
2570. Petitioners themselves could not feign ignorance of the case since during the pendency of
Civil Case No. 2570, petitioner Ernesto Saligumba, son of the deceased spouses, was among the
persons present during the delimitation of the land in question before the Commissioner held on
5 November 1977. Petitioner Eliseo Saligumba, Jr. was likewise furnished a copy of the trial
courts orders and notices.

6
TOPIC: RULE 6
CARLO A. TAN, petitioner, vs. KAAKBAY FINANCE CORPORATION, DENNIS S.
LAZARO and ROLDAN M. NOYNAY, respondents, G.R. No. 146595, June 20, 2003

Doctrine: In a compulsory counterclaim there is no need of payment of the required docket fees
for the court to acquire jurisdiction because in a compulsory counterclaim the issues of fact and
law raised by both the claim and counterclaim are largely the same, with a logical relation,
considering that the two claims arose out of the same circumstances requiring substantially the
same evidence.

Facts:

Petitioner Tan applied for and was granted a loan of P4 million by private respondent
Kaakbay. As collateral, a real estate mortgage on petitioner Tans parcel of land with
improvements therein was executed. Petitioner alleged that the stipulated interest was 12% per
annum until fully paid which amount however, was not stated in the mortgage when he signed it.
Petitioner failed to pay his obligation, he claimed that Kaakbay never furnished him a copy of
the real estate mortgage that according to Kaakbay, his obligation had now reached
P5.570,000.00 because the actual interest was 0.3925% for a period of less than one year instead
of the agreed-upon interest of 12% per annum. He was made to issue two post dated checks.
Petitioner negotiated with Kaakbay for extension of time to pay his obligation with the latter
agreed to. It was also agreed that petitioner and respondent would sign, execute, and
acknowledge a deed of sale under pacto de retro upon the expiration of a two year period starting
January 8, 1998 to January 8, 2000. Petitioner had suspicion that Kaabay was charging him with
usurious rates of interest as confirmed when he obtained a statement of account stating his
obligation had now reached P13,333,750.00. Petitioner learned of the existence of an
accomplished deed of sale under pacto de retro which appeared was signed by him and his wife,
on one hand and private respondent Lazaro (president of Kaakbay) on the other, and was
notarized when in fact he and his wife and their witness Charito did not sign it on said date, nor
did they execute it before Atty. Noynay or any other notary public on said date.

Petitioner then filed a complaint for declaration of nullity, invalidity and unenforceability
for annulment of the promissory note purportedly attached to the real estate mortgage date
November 16, 1995, the usurious and void rates of interest and other fees therein appearing, and
the deed of sale under pacto de retro and damages with prayer for preliminary injuction and/or
temporary restraining order against respondents with RTC Calamba, Laguna. Respondents
through their counsel Atty. Noynay filed their consolidated answer which was withdrawn when
the law firm Ortega, Del Castillo, Bacorro, Odulio, Calma and Carbonell entered its appearance
as counsel for respondents. Said counsel requested motion for extension of time to file an answer
and the withdrawal of the consolidated answer. Respondent through the new counsel, filed their
answer with counterclaim praying that petitioner pay them P4 million representing the principal
amount of the loan, P9,333,750.00 representing the compounded monthly interest and annual
penalty interest, P250,000 as litigation expenses and P500,000 as attorneys fees. In addition
respondents filed motion for admission of counterclaim without payment of fees, on the ground
that their counterclaim is compulsory in nature hence it may be admitted without payment of
fees. Petitioner argued that respondents counterclaim should not be admitted as it partook of the
nature of a permissive counterclaim which required the payment of the prescribed filing fees
since no payment was made the court did not acquire jurisdiction over the answer. RTC granted
respondents motion. Petitioner filed a motion for reconsideration but it was denied. Petitioner
appealed to CA but was also denied and CA affirmed the decision of RTC and that the
counterclaim was a compulsory counterclaim which did not require the payment of docket fees.
Petitioner moved for reconsideration but it was denied, hence petition to this Court.

Issues:

Whether or not the counterclaim filed by respondents is permissive in nature

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Held:

Yes, it is permissive in nature. In Intestate Estate of Dalisay v. Hon. Marasigan, we held

that a counterclaim is compulsory where: (1) it arises out of, or is necessarily connected with the
transaction or occurrence that is the subject matter of the opposing partys claim; (2) it does not
require the presence of third parties of whom the court cannot acquire jurisdiction; and (3) the
trial court has jurisdiction to entertain the claim. To determine whether a counterclaim is
compulsory or not, we have devised the following tests: (1) Are the issues of fact or law raised
by the claim and the counterclaim largely the same? (2) Would res judicata bar a subsequent suit
on defendants claims absent the compulsory counterclaim rule? (3) Will substantially the same
evidence support or refute plaintiffs claim as well as the defendants counterclaim? and (4) Is
there any logical relation between the claim and the counterclaim?

In Quintanilla v. Court of Appeals, we said a compelling test of compulsoriness is

whether there is a logical relationship between the claim and counterclaim, that is, where
conducting separate trials of the respective claims of the parties would entail a substantial
duplication of effort and time by the parties and the court.

Tested against the abovementioned standards, we agree with the appellate courts view that
respondents counterclaims are compulsory in nature. Petitioners complaint was for declaration
of nullity, invalidity or annulment of the promissory notes purportedly attached to the Real
Estate Mortgage dated November 16, 1995 and the usurious and void interest rates appearing
therein and the deed of sale under pacto de retro. Respondents counterclaim was for the payment
of the principal amount of the loan, compounded monthly interest and annual penalty interest
arising out of the non-payment of the principal loan, litigation expenses and attorneys fees. There
is no dispute as to the principal obligation of P4 million but there is a dispute as to the rate and
amount of interest. Petitioner insists that the amount of interest is only 12% yearly until fully
paid, while respondents insist on 3.5% monthly. Also, respondents allege that petitioner owes
them P9,333,750.00 representing the compounded monthly interest and annual penalty, which is
disputed by petitioner. Petitioner further seeks the nullification of the deed of sale under pacto de
retro for being falsified, while respondents aver the deed is valid. It thus appears that the
evidence required to prove petitioners claims is similar or identical to that needed to establish
respondents demands for the payment of unpaid loan from petitioner such as amount of interest
rates. In other words, petitioners claim is so related logically to respondents counterclaim, such
that conducting separate trials for the claim and the counterclaim would result in the substantial
duplication of the time and effort of the court and the parties. Clearly, this is the situation
contemplated under the compelling test of compulsoriness. The counterclaims of respondents
herein are obviously compulsory, not permissive. Hence being compulsory in nature the payment
of docket fees is not required for the court to acquire jurisdiction over the answer

8
TOPIC: RULE 8
TITAN CONSTRUCTION CORPORATION, petitioner, vs. MANUEL A. DAVID, SR.
and MARTHA S. DAVID, respondents. G.R. No. 169548. March 15, 2010
Doctrine: In Central Surety and Insurance company v. C. N. Hodges, the Court held where a
party acted in complete disregard of or wholly overlooked Sec. 8 Rule 8 of the Rules of Court
and did not object to the introduction and admission of evidence questioning the genuineness and
due execution of a document, he must be deemed to have waived the benefits of this rule.
Fact:
MANUEL and MARTHA were married on March 25, 1957. The Sps. acquired a 602
square meters lot located in White Plains Q.C. which was registered in the name of MARTHA S.
DAVID, of legal age, Filipino married to MANUEL A. DAVID and covered by TCT No.
156043 issued by the Register of Deeds of Q.C. In 1976, the Sps. separated de facto. In 1995,
Manuel discovered that Martha sold the property to Titan for P1.5 million through a Deed of
Sale dated April 24, 1995 and that the previous TCT was cancelled and replaced by TCT No.
130129 in name of Titan.
Manuel filed a complaint for annulment of contract and reconveyance against Titan
before the RTC of Q.C. Manuel alleged that the sale is void because such sale was made without
his consent the property being conjugal in nature and prayed that such TCT be invalidated.
Petitioner Titan in its answer with counterclaim claimed to be a buyer in good faith and for value
because it relied on a Special power of attorney (SPA) signed by Manuel which authorized
Martha to sell thus petitioner prayed for the dismissal of the complaint. Manuel also impleaded
Martha as a co-defendant. She failed to file an answer and for this she was declared in default.
RTC ruled in favor of Manuel since the property was conjugal the consent of Manuel was
necessary and the SPA was declared spurious and did not bear Manuels genuine signature which
was supported by an expert testimony presented by Manuel which Titan failed to rebut. CA
affirmed the decision of RTC but deleted the award for attorneys fees. Titan moved for
reconsideration but was denied by CA hence petition to this Court.
Issue:
Whether or not Manuels failure to specifically deny under oath the SPA, he is deemed to
have admitted the veracity of said document
Held:
No, Manuels failure to specifically deny under oath is not considered as an admission to
the genuineness of said document.
The Court on this point fully concurs with CAs findings that although Manuels reply
alleging that SPA is a forgery was not made under oath, in his complaint however Manuel
verified the same under oath, alleging that the sale was executed by his wife in favor of Titan
without his consent while Section 8 Rule 8 of the Rules of Court is mandatory, it is a discovery
procedure and must be reasonably construed to attain its purpose and in a way as not to effect a
denial of substantial justice. The interpretation should be one which assists the parties in
obtaining a speedy, inexpensive, and most importantly a just determination of the disputed
issues.
Moreover when Manuel presented his expert witness Titan did not object to the
presentation of an expert witness who found that such signature of Manuel in the SPA is forged.
Neither did Titan object to the admission of said report when it was offered as evidence by
Manuel on the ground that he is barred from denying his signature on the SPA. In fact Titan
admitted the existence of said report and objected only to the purpose for which it was offered. In
Central Surety and Insurance company v. C. N. Hodges, the Court held where a party acted in
complete disregard of or wholly overlooked Section 8 Rule 8 of the Rules of Court and did not
object to the introduction and admission of evidence questioning the genuineness and due

9
execution of a document, he must be deemed to have waived the benefits of this rule.
Consequently Titan is deemed to have waived the mantle of protection given by Section 8 Rule 8
of the Rules of Court.

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TOPIC: RULE 14
FILOMENA DOMAGAS, petitioner, vs. VIVIAN LAYNO JENSEN, respondent. G.R. No.
158407. January 17, 2005.

Doctrine: The service of the summons on a person at a place where he was a visitor is not
considered to have been left at the residence or place where he has another place at which he
ordinarily stays and to which he intends to return.

Facts:

Petitioner Domagas filed a complaint for forcible entry against Respondent Jensen before
MTC of Calasiao, Pangasinan. She alleged in her complaint that she was the registered owner of
a parcel of land covered by OCT No. P-30480 situated in Barangay Buenlag, Calasiao,
Pangasinan and with an area of 827 square meters. On January 9, 1999, respondent by means of
force, strategy and stealth, gained entry into said property and excavated a portion thereof and
thereafter constructing a fence as such Petitioner was deprived 68 square meters portion of her
property along the boundary line. The case was docketed as Civil Case No. 879. The summons
was not served on the respondent because the latter was apparently out of the country. This was
relayed to the Sheriff by respondents brother Oscar Layno who was in respondents house during
the time such summons was being served. The Sheriff left the summons and complaint with
Oscar who received the same. MTC rendered a decision in favor of Petitioner and ordered the
respondent and all persons occupying to vacate the premises and also pay monthly rentals,
damages and attorneys fees. Respondent failed to appeal hence a writ of execution was issued.

Respondent now filed a complaint against Petitioner before the RTC of Dagupan City for
the annulment of decision of the MTC on the ground of failure of the Sheriff to serve the
summons and complaint on her because she was in Norway, MTC never acquired jurisdiction
over her person she alleged that the substituted service on his brother was improper for Oscar
Layno was merely a visitor in the house and the said house is actually being leased by
respondent to Eduardo D. Gonzalez. Petitioner in his answer claimed the summons was proper
since Respondent was a resident of the Barangay and that her brother was a resident also and a
registered voter. RTC rendered judgment in favor of Respondent declaring the decision of MTC
null and void for lack of jurisdiction over the person of the plaintiff and the subject matter. Trial
court declared there was no valid service of the summons and complaint on the Respondent
considering she left the Philippines on February 17, 1999 for Norway and her brother was not
authorized to receive the said summons on her behalf. Petitioner appealed to CA, CA affirmed
the decision of RTC with modifications saying that the complaint in Civil Case No. 879 was for
ejectment and is an action quasi in rem thus the summons shouldve been served via
extraterritorial service under Section 15 Rule 14 of the Rules of Court. Hence, this petition to this
Court.

Issues:

Whether or not there was valid service of summons over the person of the respondent

Held:

No, there was no valid service of summons hence jurisdiction over the person of the
respondent was not acquired.

Petitioner insists that since the action undertaken in his complaint was an action in
personam summons may be served on the respondent by substituted service, through her brother,
in accordance with Section 7 Rule 14 of the Rules of Court. Petitioner avers that Oscar a person
of suitable age and discretion was residing in the house of the respondent on April 5, 1999, that
the lease of Eduardo was of no moment, and that the Sheriff is presumed to have performed his
duty of properly serving the summons on the respondent by substituted service. Such contention

11
by the Petitioner is unmeritorious. In an action in personam, jurisdiction over the person of the
defendant is necessary for the court to validly try and decide the case. Jurisdiction over the
person of a resident defendant who does not voluntarily appear in court can be acquired by
personal service of summons as provided under Section 7, Rule 14 of the Rules of Court. If he
cannot be personally served with summons within a reasonable time, substituted service may be
made in accordance with Section 8 of said Rule. If he is temporarily out of the country, any of
the following modes of service may be resorted to: (a) substituted service set forth in Section 8;
(2) personal service outside the country, with leave of court; (3) service by publication, also with
leave of court; or (4) any other manner the court may deem sufficient. Any judgment of the court
which has no jurisdiction over the person of the defendant is null and void. Strict compliance
with the mode of service is required in order that the court may acquire jurisdiction over the
person of the defendant. The statutory requirement of substituted service must be faithfully and
strictly followed and if not such service rendered is ineffective. The Court held in Hamilton v.
Levy, The pertinent facts and circumstances attendant to the service of summons must be stated
in the proof of service or Officers Return; otherwise, any substituted service made in lieu of
personal service cannot be upheld. This is necessary because substituted service is in derogation
of the usual method of service. It is a method extraordinary in character and hence may be used
only as prescribed and in the circumstances authorized by statute. As gleaned from the Sheriffs
return there is no showing that the house where Oscar was found is his residence or that of the
Respondent neither any showing that Sheriff ascertained where the residence of the said
Respondent during the service of summons on April 5, 1999. The occupant of the house was
Eduardo, Oscar was only there as a visitor to collect the rentals. The service of the summons on a
person at a place where he was a visitor is not considered to have been left at the residence or
place where he has another place at which he ordinarily stays and to which he intends to return.
The voters registration or the joint affidavits showing that Oscar was a resident cannot prevail
over a lease contract. Hence, Respondent was not validly served with summons and complaint in
Civil Case No. 879 on April 5, 1999 by substituted service. MTC failed to acquire jurisdiction
over the person of the Respondent as such the decision is in fact null and void.

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TOPIC: RULE 16

SPS. ENRIQUETA RASDAS, and TOMAS RASDAS, SPS. ESPERANZA A. VILLA, and
ERNESTO VILLA, and LOLITA GALLEN, petitioners, vs. JAIME ESTENOR,
respondent. G.R. No. 157605. December 13, 2005

Doctrine: In cases wherein the doctrine of conclusiveness of judgment is applicable, there is,
as in the two cases subject of this petition, identity of parties but not of causes of action. The
judgment is conclusive in the second case, only as to those matters actually and directly
controverted and determined, and not as to matters merely involved therein.

Facts:

The dispute centers on a parcel of land with an area of 703 square meters, situated in
Ilagan, Isabela. On 29 October 1992, respondent as plaintiff filed a Complaint for Recovery of
Ownership and Possession with Damages against petitioners as defendants. In the same
complaint, respondent asserted that he was the owner of the subject property, which was then in
the possession of petitioners. On 6 November 1995, the RTC decided Civil Case No. 673 in
favor of petitioners. Respondent appealed the RTC decision before the CA, and his appeal was
docketed as CA-G.R. No. 52338. On 25 September 1997, CA reversed the judgment of the RTC,
and declared respondent as the owner of the subject property. As a result, petitioners were
ordered to vacate the land and also pay reasonable compensation for the use and enjoyment of
the land as well as attorneys fees. The decision became final and executor after a petition for
certiorari assailing its validity was dismissed by this Court. Thereafter a Writ of Execution and
Writ of Demolition was issued against the petitioners, who were ordered to demolish their
houses, structures and improvements on the property.

Petitioners as plaintiff then filed a complaint dated 6 July 1999 against respondent for just
compensation and preliminary injunction with temporary restraining order. The case was
docketed as Civil Case No. 1090, and heard by the same RTC Branch 16 that ruled on the first
complaint. They alleged that they were entitled to just compensation relating to the value of the
houses they built on the property, owing to their purported status as builders in good faith. They
claimed that CA did not declare them as builders in bad faith thus they were entitled to
reimbursement of the value of their houses before these could be demolished. They posited that
without reimbursement, they could not be ejected from their houses. Respondent as defendant
countered with a Motion to Dismiss, arguing that petitioners complaint was barred by res
judicata. The motion to dismiss was initially denied by the RTC however before trial proper
could begin respondent filed a motion for preliminary hearing on the affirmative defense of lack
of jurisdiction and res judicata. RTC concluded that the earlier decision of the Court of Appeals
had already effectively settled that petitioners were in fact builders in bad faith. Citing Mendiola
v. Court of Appeals, the RTC held that the causes of action between the final judgment and the
instant complaint of petitioners were identical, as it would entail the same evidence that would
support and establish the former and present causes of action. Accordingly the complaint was
dismissed. The findings of res judicata were affirmed by the CA in its assailed decision.

Issue:

Whether or not res judicata is obtaining in the filling of the second complaint docketed as
Civil Case No. 1090 which will bar the filing of such complaint

Held:

Yes, res judicata is present, hence shall bar the filing of another complaint however RTC
and CA erred here when they declared that it was barred by prior judgment when what was really
obtaining in the case is it is barred by conclusiveness of judgment.

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 The Court in this case first discussed that the RTCs act of staging preliminary hearing on
the affirmative defense of lack of jurisdiction and res judicata is not in regular order. Under
Section 6, Rule 16 of the 1997 Rules of Civil Procedure, the allowance for a preliminary hearing
while left in the discretion of the court, is authorized only if no motion to dismiss has been filed
but any of the grounds for a motion to dismiss has been pleaded as an affirmative defense in the
answer. In this case, respondents filed a motion to dismiss on the ground of res judicata but the
same was denied thus they filed an answer alleging res judicata as a special affirmative defense,
but later presented a motion for preliminary hearing which was granted, leading to the dismissal
of the case. The general rule must be reiterated that preliminary hearing contemplated under
Section 6, Rule 16 applies only if no motion to dismiss has been filed. The only exception is if
once a motion to dismiss has been filed, such hearing could be had if the trial court had not
categorically resolved the motion to dismiss. Such circumstance is absent in this case. However,
nothing in the rules expressly authorizes a preliminary hearing of affirmative defenses once a
motion to dismiss has been filed and denied. Thus, the strict application of Section 6, Rule 16 in
this case should cause us to rule that the RTC erred in conducting the preliminary hearing.

However in this case, there is an exceptional justification for us to overlook this

procedural error and nonetheless affirm the dismissal of the complaint. The complaint in
question is so evidently barred by res judicata, it would violate the primordial objective of
procedural law to secure a just, speedy and inexpensive disposition of every action and
proceeding should the Court allow this prohibited complaint from festering in our judicial
system. Indeed, the rule sanctioning the liberal construction of procedural rules is tailor made for
a situation such as this, when a by the numbers application of the rule would lead to absurdity,
such as the continued litigation of an obviously barred complaint.

The doctrine of res judicata has two aspects. The first known as bar by prior judgment
or estoppels by verdict is the effect of a judgment as a bar to prosecution of a second action
upon the same claim, demand or cause of action. The second known as conclusiveness of
judgment otherwise known as the rule of auter action pendant, ordains issues actually and
directly resolved in a former suit cannot again be raised in any future case between the same
parties involving a different cause of action. It has the effect of preclusion of issues only. It
appears that both the RTC and the Court of Appeals deemed that the first aspect of res judicata,
bar by prior judgment, applied in this case. We hold that it is the second kind of res judicata,
conclusiveness of judgment, that barred the instant complaint. As previously explained by this
Court:
Conclusiveness of judgment states that a fact or question which was in issue in a former
suit and there was judicially passed upon and determined by a court of competent
jurisdiction, is conclusively settled by the judgment therein as far as the parties to that
action and persons in privity with them are concerned and cannot be again litigated in any
future action between such parties or their privies, in the same court or any other court of
concurrent jurisdiction on either the same or different cause of action, while the judgment
remains unreversed by proper authority.

Indeed, in cases wherein the doctrine of conclusiveness of judgment is applicable, there is, as
in the two cases subject of this petition, identity of parties but not of causes of action. The
judgment is conclusive in the second case, only as to those matters actually and directly
controverted and determined, and not as to matters merely involved therein. Herein, the fact
those petitioners were in possession in bad faith as early as 1965 was already determined in the
first case. In order that they could successfully litigate their second cause of action, petitioners
will have to convince that they were in possession in good faith at the time they built their
structures, an argument that deviates the previous determination made in the final judgment that
resolved the first case. The reasons for establishing the principle of conclusiveness of
judgment are founded on sound public policy, and to grant this petition would have the effect of
unsettling this well settled doctrine. Contrary to the holdings of both courts below, in the case of
Mendiola v. Court of Appeals, which they relied upon, the Court observed that the causes of
action in the two cases involved were so similar that it warranted the dismissal of the second case
by virtue of bar by prior judgment rule.

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TOPIC: RULE 35

EVADEL REALTY and DEVELOPMENT CORPORATION, petitioners, vs. SPOUSES

ANTERO AND VIRGINIA SORIANO, respondents. G.R. No. 144291. April 20, 2001

Doctrine: Under the rules, summary judgment is appropriate when there are no genuine issues of
fact which call for the presentation of evidence in a full blown trial. Even if on their face the
pleadings appear to raise issues, when the affidavits, depositions and admissions show that such
issues are not genuine, then summary judgment as prescribed by the rules must ensue as a matter
of law.

Facts:

On April 12, 1996, the spouses Antero and Virginia Soriano (respondent spouses), as
sellers, entered into a Contract to Sell with Evadel Realty and Development Corporation
(petitioner), as buyer, over a parcel of land denominated as Lot No. 5536-C of the Subdivision
Plan of Lot 5536 covered by Transfer Certificate of Title No. 125062which was part of a huge
tract of land known as the Imus Estate. Subject of this agreement is the intended sale of 28,958
square meters which is a portion of TCT No. 125062 in the name of Party A to Party B and
which portion is herewith shown in Annex A hereof. Under the contract to sell it will be
payable in two installments subject to the conditions specifically laid down in the contract. Upon
payment of the first installment, petitioner introduced improvements thereon and fenced off the
property with concrete walls. Later, respondent spouses discovered that the area fenced off by
petitioner exceeded the area subject of the contract to sell by 2,450 square meters. Upon
verification of both parties, the area encroached upon was denominated as Lot 5536-D-1 of the
subdivision plan of Lot 5536-D of Psd-04-092419 and was later on segregated from the mother
title and issued a new TCT in the name of respondent spouses. Respondent sent demand letters to
petitioner to vacate the encroached land. Petitioner admitted receiving them refused to vacate
said area. Thus on May 23, 1997, a complaint for accion reinvindecatoria was filed by
respondent spouses against petitioner with the RTC, branch 88 of Cavite City. In its answer,
petitioner admitted the encroachment but claimed it was a builder in good faith since it merely
relied on the boundaries pointed out by the representatives of respondent spouses. Respondent
filed a motion for summary judgment, alleging that there existed no genuine issue as to the
material facts of the case due to the admissions made by petitioner in its Answer. Trial court
granted the motion and rendered judgment in favor of respondent spouses. Petitioner appealed to
the CA, however the CA only affirmed the order of summary judgment of the trial court hence
this petition with this Court.

Issues:

Whether or not trial court was in error in rendering summary judgment of the case

Held:

No, Trial court was correct in rendering summary judgment of the case on the basis that
there are no genuine issues of fact which call for the presentation of evidence in a full blown
trial. Under Rule 35 of the 1997 Rules of Civil Procedure, except as to the amount of damages,
when there is no genuine issue as to any material fact and the moving party is entitled to a
judgment as a matter of law, summary judgment may be allowed. Its purpose is to weed out
sham claims or defenses at an early stage of the litigation thereby avoiding the expense and loss
of time involved in trial. A genuine issue is an issue of fact which requires the presentation of
evidence as distinguished from a sham, fictitious, contrived or false claim. When the facts as
pleaded appear uncontested or undisputed, then there is no real or genuine issue or question as to
the facts, and summary judgment is called for. The party who moves for summary judgment has
the burden of demonstrating clearly the absence of any genuine issue of fact, or that the issue
posed in the complaint is patently unsubstantial so as not to constitute a genuine issue for trial.
Trial courts have limited authority to render summary judgments and may do so only when there

15
is clearly no genuine issue as to any material fact. When the facts as pleaded by the parties are
disputed or contested, proceedings for summary judgment cannot take the place of trial.
Applying these principles to the present case, we hold that the CA did not commit any reversible
error in affirming the summary judgment rendered by the trial court. The case at bar is one for
accion reinvindicatoria which is an action to recover ownership over real property. Respondent
spouse seek to recover a certain portion of land with a total area of 2,450 square meters from
petitioner which portion was allegedly in excess of the total area of the property actually sold by
them to the latter. In a reinvindicatory action, the basic issue for resolution is that of ownership
and in the present case, the determination of ownership of the subject property is hinged on the
following questions of factfirst, what was the total area of the lot sold to petitioner by
respondent spouses as agreed upon and embodied in the contract to sell; And second, whether or
not the area being occupied by the petitioner is in excess of the land which it actually bought
from respondent spouses under the said contract. In its answer to the amended complaint,
petitioner admitted the existence and due execution of the Contract to Sell which contained the
specific description of the property it bought from respondent spouses. Equally significant is the
fact that in the same answer petitioner likewise admitted that the relocation, survey conducted by
the geodetic engineers of both parties disclosed that indeed there were two encroachments and
that the second area encroached upon was denominated as Lot 5536-D-1 of the subdivision plan
of Lot 5536-D of Psd-04-092419 and was later on segregated from the mother title and issued a
new TCT in the name of respondent spouses. With the foregoing admissions by petitioners,
clearly, there is no genuine issue of fact as to ownership of the subject property because the said
admissions made by petitioner in its answer are tantamount to an admission that respondent
spouses owned the property in question. Hence CA was correct in affirming the decision of the
trial court as it summarily resolved the issue of ownership of the subject property in favor of
respondent spouses. Petition must be denied accordingly.

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