# 3 Asia Production Co., Inc. vs.

Pano
205 SCRA 458 (1992)
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

 private respondents, claiming 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.
 Relying on the good faith of private respondents, petitioners constructed in May 1976 a weaving factory on the leased lot.
 Unfortunately, private respondents, failed to comply with their undertaking to execute the deed of 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 his 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.
 Negotiations have been proved futile
 upon prior agreement with private respondents, petitioners removed all their property, machinery and equipment from the building,
vacated the same and returned its possession to private respondents. Petitioners demanded from the latter the return of their partial
payment for the purchase price of the building in the total sum of P50,000.00. Private respondents refused to return it.
CFI
 petitioners filed a complaint for its recovery and for actual, moral and exemplary damages and attorney's fees
 Private respondent
o Lolita Lee Le Hua did not file an Answer; hence, she was declared in default.
o 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.
 petitioners argue
o 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. Furthermore, the execution of the document was an undertaking of the private respondents, which they refused to
comply with. Hence, they cannot now be heard to complain against something which they themselves brought about.
 respondent Judge GRANTED the motion to dismiss on the ground that the complaint is barred by the Statute of Frauds.
o that the contract in this case is condemned by the Statutes of Fraud
 it involves not merely the sale of real property , it also includes an alleged lease agreement that must certainly be for more
than one year
o that Plaintiffs
 cannot avoid the Statutes of Fraud by saying that this is merely an action for the collection of a sum of money. To be entitled to
the sum of P50,000.00, it is necessary to show that such contract was executed and the same was violated — but plaintiffs are
prevented from proving this alleged agreement by parol evidence.
 Cannot claim that by the payment of the sum of P50,000.00 the contract was removed from the Statutes of Fraud. This is so
because plaintiffs have not fully complied with their obligation to pay P170,000.00. If there had been full payment of
P170,000.00, the situation would have been different.
 Their motion for reconsideration having been denied 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
SC
 petitioners filed this petition, alleging therein as ground therefor grave abuse of discretion on the part of respondent Judge
o He claimed that the lower court erred
 in holding that for a contract of purchase and sale to be removed from the operation of the Statute of Frauds, there must be full
and complete payment of the purchase price.
 in failing to appreciate the nature of petitioners' cause of action.
 in not finding that this case is not covered by the Statute of Frauds.
 in not following the procedure prescribed by this Honorable Court in cases when partial performance is alleged.
 in dismissing the case."

WON respondent Judge committed grave abuse of discretion in dismissing the complaint?

YES. Respondent Judge committed grave abuse of discretion in dismissing the complaint on the ground that the claim is barred by the Statute
of Frauds.
Statute of Frauds, which declares certain contracts to be unenforceable, applies only to executory contracts, not to contracts that are totally or
partially performed(paragraph (2), Article 1403 of the Civil Code) and in actions for their specific performance. It does not apply to actions which
are neither for violation of a contract nor for the performance thereof.

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. Petitioners merely seek to recover their partial payment for the agreed purchase price of the building, which was to be paid on
installments, with the private respondents promising to execute the corresponding deed of conveyance, together with the assignment of the
leasehold rights, within two (2) months from the payment of the agreed downpayment of P20,000.00.

By their motion to dismiss, private respondents theoretically or hypothetically admitted the truth of the allegations of fact in the
complaint. Among the allegations therein are: (1) that the P50,000.00 sought to be recovered represents the downpayment of P20,000.00 and
two (2) monthly installments of the purchase price, and (2) that petitioners decided, in effect, to withdraw from the agreement by ordering the
stop payment of the remaining six (6) checks and to return the possession of the building to private respondents because of the latter's failure
to comply with their agreement. The action is definitely not one for specific performance, 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. Since it is for
refund of what petitioners had paid under the agreement, originally unenforceable under the statute, because petitioners had withdrawn
therefrom due to the "bad faith" of the private respondents, the latter cannot be allowed to take shelter under the statute and keep the
P50,000.00 for themselves. If this were the case, the statute would only become a shield for fraud, allowing private respondents not only to
escape performance of their obligations, but also to keep what they had received from petitioners, thereby unjustly enriching themselves.

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. As this Court stated in Carbonnel vs. Poncio, et al.:

"For obvious reasons, it is not enough for a party to allege partial performance in order to hold that there has been such
performance and to render a decision declaring that the Statute of Frauds is inapplicable. But neither is such party required to
establish such partial performance by documentary proof before he could have the opportunity to introduce oral testimony on the
transaction. Indeed, such oral testimony would usually be unnecessary if there were documents proving partial performance. Thus,
the rejection of any and all testimonial evidence on partial performance, would nullify the rule that the Statute of Frauds is
inapplicable to contracts which have been partly executed, and lead to the very evils that the statute seeks to prevent.
xxx xxx xxx
When the party concerned has pleaded partial performance, such party is entitled to a reasonable chance to establish by parol
evidence the truth of this allegation, as well as the contract itself. 'The recognition of the exceptional effect of part performance in
taking an oral contract out of the statute of frauds involves the principle that oral evidence is admissible in such cases to prove both
the contract and the part performance of the contract' (49 Am. Jur. 927)."

WHEREFORE, the petition is hereby GRANTED.

# 7 Pacsports Phils., Inc. Niccolo Sports
G.R. No. 141602, Nov. 22, 2001
When the elements of litis pendentia exist, the action filed later should be abated to avoid multiplicity of suits

 petitioner PPI and respondent NSI, 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.
 Petitioner PPI claimed 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.
RTC - Makati No. 99-221
 Petitioner file a complaint for damages with application for a writ of replevin against respondent. The complaint alleges:
o without any legal nor contractual basis, NSI unilaterally terminated the Agreements.
o As a lame excuse for such unilateral termination, NSI cited supposed contractual violations committed by Pacsports — which, even
if hypothetically admitted, do not constitute the 'material breach' contemplated in the Agreements
o Worse, despite actual knowledge that the subject properties are merely on consignment basis, NSI unjustly detained them and
refused to allow Pacsports to retrieve the unsold inventory unless Pacsports pays the amount of P12,442,500.00 — a condition
which cannot be read in any of the provision of the Agreements nor in any statutory or case law.
o To insure that Pacsports will not be able to retrieve its unsold inventory, NSI instructed the Shangri-La management not to allow the
removal of any of merchandise from the mall premises without its written authorizations. A security guard was likewise deployed by
NSI for such purpose.
 On the same day, the Makati RTC GRANTED petitioner's application for a writ of replevin. However, petitioner did not pursue the
implementation of this writ because respondent concealed the golf equipment to be seized. Instead, 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.
RTC - Quezon No. Q-99-36797
 respondent NSI filed a Civil Case for "Breach and Confirmation of Termination of Contracts and Damages" against petitioner. The
complaint alleges:
o PPI have breached their agreement on 4 occasion when it intercepted potential customers of plaintiff for some of the products,
thereafter surreptitiously pursued them and closed for itself the sales for the particular products sought.
o On the fourth incident plaintiff sent defendant a letter recalling the above-narrated incidents of blatant usurpation of potential
customers of plaintiff and fraudulently underselling it in material breach of the agreements; giving notice of the termination of the
agreements effective immediately, conformably to paragraph 12 (b) thereof; as well as offering three (3) options to defendant for the
amicable settlement of the matter.
o Hence, plaintiff was constrained as it was to bring the instant complaint.
RTC - Makati No. 99-221
 Respondent NSI filed with the Makati RTC a motion to dismiss or suspend the proceedings in Civil Case No. 99-221 citing the pendency
of the Quezon City case.
RTC - Quezon No. Q-99-36797
 petitioner PPI 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.
RTC - Makati No. 99-221
 Makati RTC
o DENIED respondent's motion to dismiss.
o granted petitioner's application for a writ of preliminary mandatory injunction.
 Respondent filed a motion for reconsideration, but was denied.
CA
 Respondent NSI questioned the orders of the Makati RTC in a petition for certiorari and prohibition before the Court of Appeals.
 CA granted the petition and ordered the dismissal of Civil Case No. 99-221 pending before the Makati RTC on the ground that
o 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;
o There is a claim of breach of the said Agreements by one of the parties against the other; and
o 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.
SC
 Hence, the present Petition for review on certiorari of the Decision and Resolution of the CA

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; and

Makati City case must be reinstated and that the Quezon City case must be dismissed.

Requisites of litis pendentia

(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.

Undisputably, 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.

This Court held in several cases that when the elements of litis pendentia exist, the action filed later should be abated to avoid
multiplicity of suits. This is based on themaxim 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 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.

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.

Whether the order of the Makati RTC dated April 20, 1999 granting petitioner's application for a writ of preliminary mandatory injunction was
issued with grave abuse of discretion.

No. the order granting the petitioner’s application for a writ of preliminary mandatory injunction is proper

requisites for the issuance of writ of preliminary mandatory injunction must be present:
(1) that the complainant has a clear legal right;
(2) that his right has been violated and the invasion is material and substantial; and
(3) there is an urgent and permanent necessity for the writ to prevent serious damage.

There is no question that petitioner, as owner of the items being withheld by respondent, is entitled to possession thereof. Respondent's refusal
to deliver them to petitioner is a breach of that right. Its claim for reimbursement and retention of the items in pledge under Articles 1912, 1913
and 1914 of the Civil Code are being disputed by petitioner. Actually, respondent's claims are not clearly established but yet to be resolved.
Secondly, in light of the bond posted by petitioner which would guaranty payment of respondent's claims if found meritorious, respondent has
lost its basis for withholding the disputed items and money as security. Finally, by their nature, the golf equipment, accessories and apparel
may not be kept in storage indefinitely or until the dispute between the parties is finally resolved without impairing their market value which
would prejudice the petitioner as owner.

WHEREFORE, the petition is hereby GRANTED.

# 11 Bank of Amerca vs. CA
400 SCRA 156
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

RTC
 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
o The Litonjuas were engaged in the shipping business and owned two vessels, through their wholly-owned corporations.
o With their business doing well, the petitioner banks induced them to increase the number of their ships in operation, offering them
easy loans to acquire said vessels.
o Thereafter, petitioners acquired, through Litonjuas' corporations as borrowers, four additional vessels which were registered in the
names of their corporations.
 The Litonjuas claimed, among others, that petitioners as trustees did not fully render an account of all the income derived from the
operation of the vessels as well as the proceeds of the subsequent foreclosure sale and that the loans acquired for the purchase of the
four additional vessels matured and remained unpaid, prompting petitioners to have all the six vessels, including the two vessels originally
owned by the private respondents, foreclosed and sold at public auction.
 Defendant banks filed a Motion to Dismiss on grounds of forum non conveniens and lack of cause of action against them, but was
DENIED
CA
 Instead of filing an answer the defendant banks went to the Court of Appeals on a "Petition for Review on Certiorari" which was aptly
treated by the appellate court as a petition for certiorari. They assailed the above-quoted order as well as the subsequent denial of their
Motion for Reconsideration.
 CA dismissed the petition and denied petitioners' Motion for Reconsideration.
SC
 Hence, herein petition for review on certiorari under Rule 45 assailing the decision of the CA
 Petitioners claimed that CA failed in not holding
o That private respondents have no personalities to sue because of the fact that the separate personalities of the private
respondents(stockholders) and the foreign corporations(real borrowers)
o That the complaint should be dismissed on the ground of forum non-conveniens
 while the application of the principle of forum non conveniens is discretionary on the part of the Court, said discretion is limited
by the guidelines in determining whether plaintiffs' choice of forum should be disturbed
 Petitioners insist that the inconvenience and difficulty of applying English law(expressly provided that documents shall be
governed by the laws of England) 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.
o The pendency of foreign action may be the legal basis for the dismissal of the complaint filed by the private respondent – The
principle of res judicata is not limited to final judgment in the PH.
 Finally, petitioners claim 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 as shown above
o Private respondents are guilty of forum shopping
 private respondents contend
o that certain material facts and pleadings are omitted and/or misrepresented in the present petition for certiorari;
o that while the complaint was filed only by the stockholders of the corporate borrowers, the latter are wholly-owned by the private
respondents who are Filipinos and therefore under Philippine laws, aside from the said corporate borrowers being but their alter-
egos, they have interests of their own in the vessels.
o that the dismissal by the Court of Appeals of the petition for certiorari was justified because there was neither allegation nor any
showing whatsoever by the petitioners that they had no appeal, nor any plain, speedy, and adequate remedy in the ordinary course
of law from the Order of the trial judge denying their Motion to Dismiss; that the remedy available to the petitioners after their Motion
to Dismiss was denied was to file an Answer to the complaint;
o 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.
o that the statement of petitioners that the doctrine of res judicata also applies to foreign judgment is merely an opinion advanced by
them and not based on a categorical ruling of this Court;
o that herein private respondents did not actually participate in the proceedings in the foreign courts.

WON dismissal by the Court of Appeals of the petition for certiorari was justified
YES. It is a well-settled rule that the order denying the motion to dismiss cannot be the subject of petition for certiorari. Petitioners should have
filed an answer to the complaint, proceed to trial and await judgment before making an appeal. As repeatedly held by this Court:
"An order denying a motion to dismiss is interlocutory and cannot be the subject of the extraordinary petition
for certiorari or mandamus. The remedy of the aggrieved party is to file an answer and to interpose as defenses the objections
raised in his motion to dismiss, proceed to trial, and in case of an adverse decision, to elevate the entire case by appeal in due
course. . . . Under certain situations, recourse to certiorari or mandamus is considered appropriate, i.e., (a) when the trial court
issued the order without or in excess of jurisdiction; (b) where there is patent grave abuse of discretion by the trial court; or (c)
appeal would not prove to be a speedy and adequate remedy as when an appeal would not promptly relieve a defendant from the
injurious effects of the patently mistaken order maintaining the plaintiff's baseless action and compelling the defendant needlessly to
go through a protracted trial and clogging the court dockets by another futile case."

Did the trial court commit grave abuse of discretion in refusing to dismiss the complaint on the ground that plaintiffs have no cause of action
against defendants since plaintiffs are merely stockholders of the corporations which are the registered owners of the vessels and the
borrowers of petitioners?

No. 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.

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 San Lorenzo Village Association, Inc. vs. Court of Appeals

elements of a cause of action, namely:
(1) the legal right of the plaintiff,
(2) the correlative obligation of the defendant, and
(3) the act or omission of the defendant in violation of said legal right.
If these elements are absent, the complaint becomes vulnerable to a motion to dismiss on the ground of failure to state a cause of action. To
emphasize, it is not the lack or absence of cause of action that is a ground for dismissal of the 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.

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.

Furthermore the court held that Petitioners have obligation to the private respondents since the corporations are wholly owned by them and
prior to the incorporation of such entities, they were clients of petitioners which induced them to acquire loans from said petitioners to invest on
the additional ships.

Should the complaint be dismissed on the ground of forum non-conveniens?

No. the complaint should not be dismissed on the ground of 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.

Whether a suit should be entertained or dismissed on the basis of said doctrine depends largely upon the facts of the particular case and is
addressed to the sound discretion of the trial court.

In the case of Communication Materials and Design, Inc. vs. Court of Appeals:
Requisites for Philippine Court may assume jurisdiction over the case if it chooses to do so
(1) that the Philippine Court is one to which the parties may conveniently resort to;
(2) that the Philippine Court is in a position to make an intelligent decision as to the law and the facts; and,
(3) that the Philippine Court has or is likely to have power to enforce its decision."
in Philsec. Investment Corporation vs. Court of Appeals, that 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.

Are private respondents guilty of forum shopping because of the pendency of foreign action?

No. In case at bar, 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.

elements of litis pendentia

(a) identity of the parties or at least such as to represent the same interest in both actions;
(b) identity of rights asserted and relief prayed for, the relief being founded on the same acts; and
(c) the identity in the two cases should be such that the judgment which may be rendered in one would, regardless of which party is successful,
amount to res judicata in the other.

WHEREFORE, the petition is DENIED for lack of merit.

# 15 Cruz vs. CA
G.R.No. 164797, Feb. 13, 2006

There are four (4) cases involved in this controversy.

 1ST Civil Case No. 4365 for Unlawful Detainer "Josefina M. Cruz and Ernestina M. Concepcion, plaintiffs, vs. Mariano 'Boy' Bunag,
Rolando Bunag, Remedios Bunag, et al., Defendants." This case was decided in favor of herein petitioner Josefina M. Cruz and Ernestina
M. Concepcion.
 2nd Civil Case No. 1600 for Quieting of Title, "Carlos L. Bunag, Elias Bunag Natividad, Mariano Bunag, Salud Bunag Clanaoc and
Juliana Bunag Arevalo, as Plaintiffs and Josefina M. Cruz and Ernestina M. Concepcion as Heirs of Sps. Carlos Maniquis and Marina
Bunag, as Defendants." This case was dismissed for failure to prosecute
 3rd Civil Case No. 2573-02 for Injunction, "Mariano 'Boy' Bunag and Rolando Bunag as Petitioners against Carlos Bunag, Elias Bunag
Natividad, Mariano Bunag, Salud Bunag Clanaoc and Juliana Bunag Arevalo as Defendants." This case, was dismissed on ground of res
judicata. It ruled that there is a substantial identity of parties in this case and in Civil Case No. 1600, a Petition for Quieting of Title.
RTC
 4th Civil Case No. 2583-02 Complaint for Annulment of Title With Damages lodged by herein private respondents Mariano "Bo[y]"
Bunag and Rolando Bunag against herein petitioners Josefina M. Cruz and Ernestina M. Concepcion
 petitioners interposed a Motion for Outright Dismissal of Civil Case No. 2583 which was granted by reason of res judicata and accion
pendente lite , ratiocinating:
o the Court has found that herein case (2583) involve the same parties, subject matter and issue as that in Civil Case No. 1600 which
has become final and executory and Civil Case No. 2573-02 which was already dismissed by this Court on the ground of res
judicata.
 In all three cases,
 Mariano Bunag was included as party-plaintiff and Ernestina Concepcion as party-defendant.
 The subject matter involves a parcel of land located in San Nicolas, Gapan City with an area of 1,160 square meters,
more or less, and
 the issue is who between the two parties has the lawful title over the same.
o accion pendente lite is present in herein case which the plaintiffs and their counsel should have revealed in the
Certificate/Verification of their complaint.
 private respondents interposed their Motion for Reconsideration, the court a quo reversed itself and reinstated the present case
CA
 Petitioners filed a petition for review to the Court of Appeals, but was DISMISSED 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. It explained:
o 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.
o 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).
o Third. 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.
 Petitioners filed a motion for reconsideration which was denied
SC
 petitioners filed a Petition for Certiorari under Rule 65 charging that the CA committed grave abuse of discretion amounting to lack or
excess of jurisdiction in rendering the assailed decision and resolution.
 Petitioners contend that all the elements of res judicata are present in the instant case.
o that the shuffling of parties should not prevent the application of res judicata considering that three prior cases (Civil Case No. 4365
for Unlawful Detainer, Civil Case No. 1600 for Quieting of Title and Civil Case No. 2573 for Injunction) against substantially the same
parties over the same subject matter and cause of action have all been decided in their favor.
o that private respondent Mariano "Boy" Bunag was one of the parties in the Ejectment and Quieting of Title cases (and Injunction),
and that his allegation in his affidavit that he neither authorized Carlos Bunag to include him in the Quieting of Title case nor was he
(Mariano) informed thereof, leaves too much to be desired and that same was merely intended for delay.
o As regards the non-inclusion of private respondent Rolando Bunag in the case for Quieting of Title but who was a party in the
Ejectment case (as well as in the Injunction case), they claim that same was in preparation for this stage of the proceedings.
o that insofar as identity of causes of action is concerned, it cannot be denied that the ownership and its concomitant right of
possession are the issues in the cases for Quieting of Title, Injunction and Annulment of Title.
 private respondents Rolando Bunag and Monina Luzong Vda. de Bunag maintain that the public respondent did not err when it held that
there was no res judicata in the instant case and that the disposition of the case should not be based on technicalities.
WON res judicata apply in the case at bar?
YES. All requisites are present
Essential requisites of re judicata:
(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.

There being no dispute as to the presence of the first and third elements

second element is present

The Rule 17 Sec. 3 enumerates the instances where the complaint may be dismissed due to plaintiff's fault:
(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 an 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 order dismissing Civil Case No. 1600 reads:

For failure of the plaintiffs as well as counsel to appear on several settings despite due notices, precisely for the
reception of plaintiffs' evidence, upon motion of the defendant through Atty. Mark Arcilla, this case is dismissed for
failure to prosecute.

Since the order did not contain a qualification whether same is with or without prejudice, following Section 3, it is deemed to be with prejudice
and shall have the effect of an adjudication on the merits. A ruling based on a motion to dismiss, without any trial on the merits or
formal presentation of evidence, can still be a judgment on the merits.

fourth element is present — identity of parties, subject matter and cause of action.
1) There is identity of parties
The principle of res judicata may not be evaded by the mere expedient of including an additional party to the first and second action.
Only substantial identity is necessary to warrant the application of res judicata. The addition or elimination of some parties does not
alter the situation. There is substantial identity of parties when there is a community of interest between a party in the first case and
a party in the second case albeit the latter was not impleaded in the first case.
In the case at bar, it is apparent that from the face of the complaint for Quieting of Title, private respondent Rolando Bunag was not
a party therein as his name does not appear in the title. This, notwithstanding, his claim and that of the plaintiffs therein, which
included private respondent Mariano Bunag, are the same — to be declared the true owners of the parcel of land covered by
Original Certificate of Title (OCT) No. 22262 and Transfer Certificate of Title (TCT) No. 67161 of the Registry of Deeds of Nueva
Ecija. Private respondent Rolando Bunag and the plaintiffs are all heirs of the alleged owners of the parcel of land covered by OCT
No. 22262. Private respondent Rolando Bunag, though not a party therein, shared an identity of interest from which flowed an
identity of relief sought, namely, to declare them the true owners of the parcel of land covered by OCT No. 22262 and TCT No.
67161. Such identity of interest is sufficient to make them privy-in-law, thereby satisfying the requisite of substantial identity of
parties.
2) There is identity of subject matter
Both Civil Case No. 1600 (for Quieting of Title) and Civil Case No. 2583 (for Annulment of Title), involved one and the same parcel
of land covered by TCT No. 67161.
3) 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.
Civil Case No. 1600 was for Quieting of Title, while Civil Case No. 2583 is for Annulment of Title with Damages. 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.

WON the instant case be not decided based on technicalities, for substantial justice demands that technicalities should not be allowed to
prevail over the substantive right of a party litigant.

NO. We find no reason not to adhere to the doctrine of res judicata. A case for Quieting of Title had been filed for the purpose of determining
the ownership of the subject land, but same was dismissed because the plaintiffs therein failed to attend the scheduled hearings for the
presentation of their evidence. As above discussed, the dismissal was an adjudication on the merits. They had all the opportunity to present all
the evidence for their cause but they failed to do so. It is undeniable that there was no denial of due process in this case.
# 19 Indiana Aerospace University vs. CHED
356 SCRA 367 (2001)
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.

 Upon learning that petitioner used the word “university” in its name in an advertisement in the Manila Bulletin, an investigation was
conducted on the alleged misrepresentation by 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 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) per its Indorsement, and on that basis, SEC issued to petitioner Certificate of
Registration No. AS-083-002689.
 Surprisingly, however, it ought to be noted, that SEC Chairman wrote a letter to the respondent informing them
o That petitioner has not filed any amended articles of incorporation that changed its corporate name to include the term 'University.'
o That In case the corporation submits an application for change of name, your Cease and Desist Order shall be considered
accordingly.
 In reaction to respondent's order for petitioner to desist from using the word 'University', petitioner seeks 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,
ordering the petitioner to cease and desist from using the word 'University.'
RTC
 (prior rejection by respondent) petitioner filed a Complaint for Damages with prayer for Writ of Preliminary and Mandatory Injunction and
Temporary Restraining Order against respondent
 responden filed a Special Appearance with Motion to Dismiss, based on
o improper venue;
o lack of authority of the person instituting the action; and
o lack of cause of action.
 RTC denied respondent's Motion to Dismiss and, issued a Writ of Preliminary Injunction in favor of petitioner. It directed the respondent to
file its Answer within fifteen (15) days from receipt of said Order, which was August 15, 1998
 On September 22, 1998, petitioner filed before public respondent a Motion To Declare [Respondent] in Default pursuant to Section 3,
Rule 9 in relation to Section 4, Rule 16 of the Rules of Court, as amended, and at the same time praying for the Motion to Set for Hearing
on October 30, 1998 at 8:30 a.m.
 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.
 Petitioner, on November 11, 1998 filed its Opposition to the Motion for Extension of Time to File Respondent's Answer and on November
9, 1998, a Motion to Expunge Respondent's Answer and at the same time praying that its Motion be heard on November 27, 1998 at 9:00
a.m.
 RTC directed 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 Notice of Appearance 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 [F]ormal Entry of Appearance.
 RTC GRANTED Petitioner's Motion to Declare Respondent in Default
CA
 respondent filed with the CA a Petition for Certiorari, arguing that the RTC had committed grave abuse of discretion
o in denying the former's Motion to Dismiss,
o in issuing a Writ of Preliminary Injunction, and
o in declaring respondent in default despite its filing an Answer.
 CA directed the RTC to cease and desist from proceeding with Civil Case and to order the dismissal of petitioner's Petition. It ruled
o 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.
o that the Writ of Preliminary Injunction had improvidently been issued. The doubtful right claimed by petitioner is subordinate to the
public interest to protect unsuspecting students and their parents from the unauthorized operation and misrepresentation of an
educational institution.
o that 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.
SC
 Hence, this Petition for Review on Certiorari under Rule 45
 Petitioner alleges that the appellate court committed the following reversible errors:
o "A. In giving due course to respondent CHED's Petition for Certiorari filed way beyond the 60-day reglementary period prescribed by
Section 4, Rule 65 of the Rules of Court;
o B. In not requiring Respondent CHED to first file a Motion to Set Aside the Order of Default
o C. In ordering the dismissal of Civil Case No. 98-811."
 In its Memorandum, petitioner adds that the CA erred in dissolving the Writ of Preliminary Injunction issued by the RTC.

WON respondent's Petition for Certiorari was seasonably filed

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

Furthermore Respondent’s Petition for Certiorari did not require prior resort to a motion for reconsideration since the case (the regulation or
administration of educational institutions) is invested with public interest.

WON certiorari is proper

YES. Certiorari is proper, since the default Order had improvidently been issued.

Lina v. Court of Appeals

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.

These remedies, however, are available only to a defendant who has been validly declared in default. Such defendant irreparably loses the
right to participate in the trial. On the other hand, a defendant improvidently declared in default may retain and exercise such right after the
order of default and the subsequent judgment by default are annulled, and the case remanded to the court of origin. The former is limited to the
remedy set forth in Section 2, paragraph 3 of Rule 41 of the pre 1997 Rules of Court, and can therefore contest only the judgment by default on
the designated ground that it is contrary to evidence or law. The latter, however, has the following options: to resort to this same remedy; to
interpose a petition for certiorari seeking the nullification of the order of default, even before the promulgation of a judgment by default; or in the
event that judgment has been rendered, to have such order and judgment declared void.

In prohibiting appeals from interlocutory orders, the law does not intend to accord executory force to such writs, particularly when the effect
would be to cause irreparable damage. If, in the course of trial, a judge proceeds without or in excess of jurisdiction, this rule prohibiting an
appeal does not leave the aggrieved party without any remedy. In a case like this, a special civil action of certiorari is the plain, speedy and
adequate remedy.

Herein respondent controverts the judgment by default, not on the ground that it is unsubstantiated by evidence or that it is contrary to law, but
on the ground that it is intrinsically void for having been rendered pursuant to a patently invalid order of default.

WON RTC was justified in declaring respondent in default

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

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. Respondent also presented a meritorious defense in its Answer — that it was duty-bound to
pursue the state policy of protecting, fostering and promoting the right of all citizens to affordable quality education at all levels. In stark
contrast, petitioner neither qualified for nor was ever conferred university status by respondent.

Judges, as a rule, should avoid issuing default orders that deny litigants the chance to be heard. Instead, the former should give the latter every
opportunity to present their conflicting claims on the merits of the controversy, as much as possible avoiding any resort to procedural
technicalities.

WON the issuance of the Writ of Preliminary Injunction by the RTC is valid

YES. the trial court acted with grave abuse of discretion in issuing the Writ of Preliminary Injunction against respondent.
Petitioner failed to establish a clear right to continue representing itself to the public as a university. Indeed, it has no vested right to
misrepresent itself.

essential requisites for the issuance of injunction

(1) there must be a right in esse be protected, and
(2) the act against which the injunction is to be directed must have violated such right.
We also agree with the finding of the CA that the act sought to be enjoined by petitioner is not violative of the latter's rights. Respondent's
Cease and Desist Order of July 30, 1997 merely restrained petitioner from using the term "university" in its name. It was not ordered to close,
but merely to revert to its authorized name; hence, its proprietary rights were not violated.

WON the complaint should be dismissed on the ground that petitioner had failed to state a cause of action.

NO. we find no grave abuse of discretion in the RTCs denial of the Motion to Dismiss. The CA erred in ruling otherwise.

The trial court stated in its Decision that petitioner was an educational institution, originally registered with the Securities and Exchange
Commission as the "Indiana School of Aeronautics, Inc." That name was subsequently changed to "Indiana Aerospace University" after the
Department of Education, Culture and Sports had interposed no objection to such change.

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.

When a motion to dismiss is grounded on the failure to state a cause of action, a ruling thereon should be based only on the facts alleged in the
complaint. The court must pass upon this issue based solely on such allegations, assuming them to be true. For it to do otherwise would be a
procedural error and a denial of plaintiff's right to due process.
#23 Paredes vs. Verano
504 SCRA 264
The absence of counsel for defendants at pre-trial does not ipso facto authorize the judge to declare the defendant as in default and order the
presentation of evidence ex parte.

RTC – complaint for the establishment of a right of way – judgment by compromise

 a complaint for the establishment of a right of way was filed by petitioners herein as plaintiffs against respondents as defendants. The
case was culminated in a judgment by compromise
 In the Compromise Agreement, respondent Cosme Hinunangan granted a 2 meter-wide right of way in favor of petitioners in
consideration of the amount of P6,000.00 which petitioners agreed to pay.
RTC – specific performance with damages
 Alleging that petitioners had blocked the passage way in violation of the Compromise Agreement, respondents filed a complaint for
specific performance with damages against petitioners.
 In their answer, petitioners denied having violated the Compromise Agreement. They alleged
o that like them, respondents were not actual residents of Barangay Tagnipa where the "road right of way" was established
o that respondent Cosme Hinunangan had already sold his only remaining lot in the vicinity to petitioner Rodolfo Paderes.
 Subsequent to the answer, petitioners filed a motion to dismiss on the ground of lack of cause of action.
 RTC, presided by Judge Kapili, DENIED the motion to dismiss.
CA - SC
 Petitioners elevated the order of denial to the Court of Appeals and thereafter to this Court, both to no avail.
RTC
 Petitioners asked Judge Kapili to inhibit himself from the case. The judge denied the motion.
 Pre-trial was initially set for 24 April 2003, but this was reset to 3 June 2003 on motion of respondents' counsel. But the pre-trial set on 3
June 2003 did not push through either because none of the parties appeared.
 So, pre-trial was reset to 11 November 2003. Petitioner Baybay's counsel moved to reset it to another date on account of a conflicting
hearing.
 The RTC was informed of a proposed settlement between the parties, although respondent Baybay qualified his reaction by telling the
court that he would first have to inform his lawyer and the co-defendants of the said proposal. The RTC then commented unfavorably on
the absence of petitioners' counsel, expressing disappointment towards his attitude, even making note of the fact that not once had the
counsel appeared before the RTC, even though the case had already reached the Supreme Court over the denial of the motion to
dismiss. At the same time, the RTC acceded and reset the pre-trial for 23 January 2004.
 Shortly before the new pre-trial date, counsel for petitioners filed a Manifestation of Willingness to Settle With Request for Cancellation.
 However, the hearing did push through on 23 January 2004. The private respondents and their counsel were present. So were petitioners
Baybay and Paderes, and co-defendant Alago, but not their counsel.
 The RTC allowed respondents to present their evidence ex parte, "for failure of the defendants' counsel to appear before the RTC".
 Petitioners filed a motion for reconsideration, but this was denied by the RTC.
CA
 petitioners filed a petition for certiorari with the Court of Appeals, assailing the orders of the RTC.
 CA dismissed the petition outright, for
o failure to attach duplicate original copies of the annexes to the petition other than the RTC Orders dated 23 January 2004 and 17
February 2004 (attaching photocopies instead),
o failure to submit such other pleadings relevant and pertinent to the petition.
 Petitioners filed a Motion for Reconsideration with Motion to Admit Additional Exhibits, adverting to the documents previously missing from
the petition but attached to the motion.
 CA DENIED the motion for reconsideration. It ruled that "even with the submission by petitioners of the required pleadings and
documents, the instant petition must nevertheless fail."
o Although it agreed with the petitioner that under Section 5, Rule 18 of the 1997 Rules of Civil Procedure, it is the failure of the
defendant, and not defendant's counsel, to appear at the pre-trial that would serve cause to allow plaintiff to present evidence ex
parte. Nevertheless, the Court of Appeals noted that petitioner Baybay had made it clear that he would never enter into any
amicable settlement without the advice of his counsel. Thus, the Court of Appeals concluded that Judge Kapili's "hands were tied,"
o the acts of Judge Kapili did not constitute grave abuse of discretion equivalent to lack of jurisdiction, when it allowed the respondent
to present evidence ex parte, because it cannot let the disposition of the case be delayed any further, prejudicing the rights of the
respondents.
SC
 Hence this present petition

WON 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.
NO. the absence of counsel for defendants at pre-trial does not ipso facto authorize the judge to declare the defendant as in default and order
the presentation of evidence ex parte.

Sections 4 and 5 of Rule 18 warrant examination:

SEC. 4. Appearance of Parties. — It shall be the duty of the parties and their counsel to appear at the pre-trial. The non-appearance of a party
may be excused only if a valid cause is shown therefor or if a representative shall appear in his behalf 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.

SEC. 5. Effect of failure to appear. — The failure of the plaintiff to appear when so required pursuant to the next preceding section shall be
cause for dismissal of the action. The dismissal shall be with prejudice, unless otherwise ordered by the court. A similar failure on the part of the
defendant shall be cause to allow the plaintiff to present his evidence ex parte and the court to render judgment on the basis thereof.

Section 4 imposes the duty on litigating parties and their respective counsel during pre-trial. The provision also provides for the instances
where the non-appearance of a party may be excused. Nothing, however, in Section 4 provides for a sanction should the parties or their
respective counsel be absent during pre-trial. Instead, the penalty is provided for in Section 5. Notably, what Section 5 penalizes is the failure to
appear of either the plaintiff or the defendant, and not their respective counsel.

Hence, we pronounce that the absence of counsel for defendants at pre-trial does not ipso facto authorize the judge to declare the defendant
as in default and order the presentation of evidence ex parte. It bears stressing that nothing in the Rules of Court sanctions the presentation of
evidence ex parte upon instances when counsel for defendant is absent during pre-trial. The Rules do not countenance stringent construction
at the expense of justice and equity.
# 24 Mactan Cebu International vs. Heirs of Minoza
Feb. 2, 2011
In general, an independent controversy cannot be injected into a suit by intervention, hence, such intervention will not be allowed where it
would enlarge the issues in the action and expand the scope of the remedies. It is not proper where there are certain facts giving the
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. Intervention is not intended to change the nature and character of the action itself, or to stop
or delay the placid operation of the machinery of the trial. 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.

RTC
 a Complaint for Reconveyance, Cancellation of Defendant's Title, Issuance of New Title to Plaintiffs and Damages was filed by Leila M.
Hermosisima (Leila) for herself and on behalf of the other heirs of the late Estanislao Miñoza. The complaint alleged
o that Leila's late great grandfather, Estanislao Miñoza, was the registered owner of Cadastral Lot Nos. 986 and 991-A, located at
Banilad Estate, Cebu City, per TCT Nos. RT-6101 (T-10534) and RT-6102 (T10026).
o that the late Estanislao Miñoza had three children, namely, Adriana, Patricio, and Santiago, all surnamed Miñoza.
o For purposes of expansion project of the Lahug Airport, National Airports Corporation (NAC) acquired several properties which
surrounded the airport, including the lots owned by Leila’s great grandfather
o that their predecessors-in-interest, specifically, Adriana, Patricio, and Santiago executed a Deed of Sale conveying the subject lots
to the NAC on the assurance made by the latter that they (Leila's predecessors-in-interest) can buy the properties back if the lots
are no longer needed.
o Since the expansion project did not push through. More than forty years after the sale, plaintiffs informed the NAC's successor-in-
interest, the Mactan-Cebu International Airport Authority (MCIAA), that they were exercising the buy-back option of the agreement,
but the MCIAA refused to allow the repurchase on the ground that the sale was in fact unconditional.
 The MCIAA, through the Office of the Solicitor General (OSG), filed an Answer with Counterclaim.
 After the parties filed their respective pleadings, trial ensued.
 before the MCIAA could present evidence in support of its case, a Motion for Intervention, with an attached Complainant-in-Intervention,
was filed by the RESPONDENTS heirs of Filomeno T. Miñoza, represented by Laureano M. Miñoza; the heirs of Pedro T. Miñoza,
represented by Leoncio J. Miñoza; and the Heirs of Florencia T. Miñoza, represented by Antonio M. Urbiztondo (Intervenors), who
claimed to be the true, legal, and legitimate heirs of the late Estanislao Miñoza and thus are claiming to be the rightful owners of the lots.
The intervenors alleged in their complaint
o that the plaintiffs in the main case are not related to the late spouses Estanislao Miñoza and Inocencia Togono whose true and
legitimate children were: Filomeno, Pedro, and Florencia, all surnamed Miñoza;
o that, on January 21, 1958, Adriana, Patricio, and Santiago, executed, in fraud of the intervenors, an Extrajudicial Settlement of the
Estate of the late spouses Estanislao Miñoza and Inocencia Togono and adjudicated unto themselves the estate of the deceased
spouses; and
o that, on February 15, 1958, the same Adriana, Patricio, and Santiago, fraudulently, deceitfully, and in bad faith, sold Lot Nos. 986
and 991-A to the NAC.
 RTC of Cebu City DENIED the Motion for Intervention. the trial court opined
 The rights claimed by movant-intervenors would more appropriately be asserted in and would be fully protected by a separate proceeding
o that the ownership of the subject lots was merely a collateral issue in the action. The principal issue to be resolved was whether or
not the heirs of the late Estanislao Miñoza — whoever they may be — have a right to repurchase the said lots from the MCIAA.
o The complaint in intervention will delay the proceedings of the instant case
o That the complaint in intervention is not verified and does not contain the requisite certification of non-forum shopping
 The intervenors filed a Motion for Reconsideration, to which was attached a Complaint-in-Intervention with the required Verification and
Certificate of Non-Forum Shopping. However, the RTC denied the motion
CA
 Aggrieved, the intervenors sought recourse before the CA claiming that RTC gravely erred In dismissing the complaint in intervention and
In denying the intervenors’ motion for reconsideration
 CA REVERSED and SET ASIDE the decision of RTC, directing the RTC to admit the complaint -in-intervention filed by the intervenors-
appellants. CA ratiocinated
o that contrary to the findings of the trial court, the determination of the true heirs of the late Estanislao Miñoza is not only a collateral,
but the focal issue of the case, for if the intervenors can prove that they are indeed the true heirs of Estanislao Miñoza, 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.
o to grant the motion for intervention would avoid multiplicity of suits.
 o As to the lack of verification and certification on non-forum shopping, the CA opined that the filing of the motion for reconsideration
with an appended complaint-in-intervention containing the required verification and certificate of non-forum shopping amounted to
substantial compliance of the Rules.
 Petitioner then filed a motion for reconsideration, but it was denied
SC
 Hence, the petition for review on certiorari, claiming that CA gravely erred in allowing respondents to intervene in civil case No. CEB-
22290
 Petitioner claims
o that to allow the intervenors to intervene in the proceedings before the trial court would not only unduly prolong and delay the
resolution of the case, it would make the proceedings unnecessarily complicated and change the nature of the proceedings.
o contrary to the requirements for the allowance of a motion for intervention, their legal interest in the subject properties appear to be
merely contingent or expectant and not of direct or immediate character.
o that the intervenors' rights can be better protected in another proceeding.
o Anent the lack of verification and certification on non-forum shopping, petitioner maintains that the trial court was correct in denying
the motion on this ground. In addition, even if the complaint-in-intervention with the required verification and certificate of non-forum
shopping was appended to the intervenors' motion for reconsideration, the complaint-in-intervention was not verified by all the
interested parties or all the heirs of Filomeno Miñoza, which still warrants its dismissal.
WON CA gravely erred in allowing respondents to intervene in civil case No. CEB-22290
YES. CA erred in allowing the respondents to intervene. The denial of the motion to intervene by the RTC in the exercise of its sound discretion
and after taking into consideration the particular circumstances of the case was just and proper
Notwithstanding the intervenors' compliance with the procedural requirements (the initial lack of the complaint-in-intervention of the requisite
verification and certification on non-forum shopping was cured when the intervenors, in their motion for reconsideration of the order denying the
motion to intervene, appended a complaint-in-intervention containing the required verification and certificate of non-forum shopping.), their
attempt to intervene should NOT be allowed. Because:
1) the claim of the respondents(they are legitimate heirs) even if were later proven to be valid claims are NOT direct and immediate
character that the intervenor will either gain or lose by the direct legal operation and effect of the judgment as to fall within the “interest”
contemplated by law.
Under Rule 19 Sec. 1, intervention shall be allowed when a person has (1) a legal interest in the matter in litigation; (2) or in the
success of any of the parties; (3) or an interest against the parties; (4) or when he is so situated as to be adversely affected by a
distribution or disposition of property in the custody of the court or an officer thereof. Moreover, the court must take into
consideration whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and
whether or not the intervenor's right or interest can be adequately pursued and protected in a separate proceeding.
The interest contemplated by law must be actual, substantial, material, direct and immediate, and not simply
contingent or expectant. It must be of such direct and immediate character that the intervenor will either gain or lose
by the direct legal operation and effect of the judgment. Otherwise, if persons not parties to the action were allowed to
intervene, proceedings would become unnecessarily complicated, expensive and interminable.
2) the intervenors' contentions that Leila's predecessors-in-interest executed, in fraud of the intervenors, an extra judicial settlement of the
estate of the late spouses Estanislao Miñoza and Inocencia Togono and adjudicated unto themselves the estate of the deceased
spouses, and that subsequently, her predecessors-in-interest fraudulently and deceitfully sold the subject lots to the NAC, would
unnecessarily complicate and change the nature of the proceedings.
3) In addition to resolving who the true and legitimate heirs of Estanislao Miñoza and Inocencia Togono are, the parties would also present
additional evidence in support of this new allegation of fraud, deceit, and bad faith and resolve issues of conflicting claims of ownership,
authenticity of certificates of titles, and regularity in their acquisition. Verily, this would definitely cause unjust delay in the adjudication of
the rights claimed by the original parties, which primarily hinges only on the issue of whether or not the heirs represented by Leila have a
right to repurchase the subject properties from the MCIAA.
4) The proper course for the intervenors is to litigate their claim in a separate proceeding where their right can be fully protected
Verily, the allegation of fraud and deceit is an independent controversy between the original parties and the intervenors. In
general, an independent controversy cannot be injected into a suit by intervention, hence, such intervention will not be allowed
where it would enlarge the issues in the action and expand the scope of the remedies. It is not proper where there are certain
facts giving the 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. Intervention is not intended to change the
nature and character of the action itself, or to stop or delay the placid operation of the machinery of the trial. 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.
5) Furthermore, the allowance or disallowance of a motion for intervention rests on the sound discretion of the court after consideration of
the appropriate circumstances. It is not an absolute right. The statutory rules or conditions for the right of intervention must be shown. 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.