CIVIL PROCEDURE CASE DIGESTS - 1
I. General Principles
A. DOMINADOR B. BUSTOS vs. ANTONIO G. LUCERO
FACTS: The petitioner herein, an accused in a criminal
case, filed a motion with the CFI of Pampanga after he
had been bound over to that court for trial, praying that
the record of the case be remanded to the justice of the
peace court of Masantol, the court of origin, in order
that the petitioner might cross-examine the
complainant and her witnesses in connection with their
testimony, on the strength of which warrant was issued
for the arrest of the accused. The accused, assisted by
counsel, appeared at the preliminary investigation. In
that investigation, the justice of the peace informed him
of the charges and asked him if he pleaded guilty or not
guilty, upon which he entered the plea of not guilty.
Then his counsel moved that the complainant present
her evidence so that she and her witnesses could be
examined and cross-examined in the manner and form
provided by law. The fiscal and the private prosecutor
objected, invoking section 11 of rule 108, and the
objection was sustained. In view thereof, the accused's
counsel announced his intention to renounce his right
to present evidence, and the justice of the peace
forwarded the case to the court of first instance.
ISSUE: Whether or not the Justice of the Peace court of
Masantol committed grave abuse of discretion in
refusing to grant the accused's motion to return the
record.
HELD: Evidence is the mode and manner of proving
competent facts and circumstances on which a party
relies to establish the fact in dispute in judicial
proceedings. It is fundamentally a procedural law. The
Supreme Court that section 11 of Rule 108 does not
curtail the sound discretion of the justice of the peace
on the matter. Said section defines the bounds of the
defendant's right in the preliminary investigation, there
is nothing in it or any other law restricting the authority,
inherent in a court of justice, to pursue a course of
action reasonably calculated to bring out the truth.
The foregoing decision was rendered by a divided court.
The minority went farther than the majority and denied
even any discretion on the part of the justice of the
peace or judge holding the preliminary investigation to
compel the complainant and his witnesses to testify
anew.
Upon the foregoing considerations, the present petition
is dismissed with costs against the petitioner.
B. FIRST LEPANTO CERAMIC V MARIWASA AND CA
FACTS: Petitioner assailed the conflicting provisions of
B.P. 129, EO 226 (Art. 82) and a circular, 1-91 issued by
the Supreme Court which deals with the jurisdiction of
courts for appeal of cases decided by quasi-judicial
agencies such as the Board of Investments (BOI).
BOI granted petitioner First Lepanto Ceramics, Inc.'s
application to amend its BOI certificate of registration
by changing the scope of its registered product from
"glazed floor tiles" to "ceramic tiles." Oppositor
Mariwasa filed a motion for reconsideration of the said
BOI decision while oppositor Fil-Hispano Ceramics, Inc.
did not move to reconsider the same nor appeal
therefrom. Soon rebuffed in its bid for reconsideration,
Mariwasa filed a petition for review with CA.
CA temporarily restrained the BOI from implementing
its decision. The TRO lapsed by its own terms twenty
(20) days after its issuance, without respondent court
issuing any preliminary injunction.
Petitioner filed a motion to dismiss and to lift the
restraining order contending that CA does not have
jurisdiction over the BOI case, since the same is
exclusively vested with the Supreme Court pursuant to
Article 82 of the Omnibus Investments Code of 1987.
Petitioner argued that the Judiciary Reorganization Act
of 1980 or B.P. 129 and Circular 1-91, "Prescribing the
Rules Governing Appeals to the Court of Appeals from a
Final Order or Decision of the Court of Tax Appeals and
Quasi-Judicial Agencies" cannot be the basis of
Mariwasa's appeal to respondent court because the
procedure for appeal laid down therein runs contrary to
Article 82 of E.O. 226, which provides that appeals from
decisions or orders of the BOI shall be filed directly with
the Supreme Court.
While Mariwasa maintains that whatever inconsistency
there may have been between B.P. 129 and Article 82 of
E.O. 226 on the question of venue for appeal, has
already been resolved by Circular 1-91 of the Supreme
Court, which was promulgated on February 27, 1991 or
four (4) years after E.O. 226 was enacted.
ISSUE: Whether or not the Court of Appeals has
jurisdiction over the case
RULING: YES. Circular 1-91 effectively repealed or
superseded Article 82 of E.O. 226 insofar as the manner
and method of enforcing the right to appeal from
decisions of the BOI are concerned. Appeals from
decisions of the BOI, which by statute was previously
allowed to be filed directly with the Supreme Court,
should now be brought to the Court of Appeals.
C. MARIANO ALBER V. UNIVERSITY PUBLISHING CO.,
INC.
FACTS: “No less than three times have the parties here
appealed to this Court.”
In 1949, Albert sued University Publishing Co. (UPC). He
alleged that UPC was organized and existing under PH
laws and that thru its president Jose Aruego (Aruego),
they entered into a contract where UPC would pay him
30 thousand pesos for the exclusive right to publish his
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revised Commentaries on the RPC and for his share in
previous sales of the book’s 1st edition; that UPC
undertook to pay in 8 instalments of 3.5k and failure to
pay one instalment would render the rest due.
Albert said UPC failed to pay the 2nd instalment but the
latter countered that it was the former who violated
their contract by his failure to deliver the manuscript.
Later, Albert died and Justo Albert (his administrator)
substituted him. The CFI then favoured Justo and
ordered UPC to pay him 23 thousand. The cases went to
SC which reduced it to 15 thousand pesos.
The CFI then ordered for the execution against UPC but
at some point, Justo petitioned for a writ of execution
against Aruego (its president) because he and the
sheriff discovered that UPC wasn’t registered in the SEC.
UPC countered by saying that Aruego was not a party to
the case so the petition should be denied.
SC notes that UPC doesn’t want Aruego to be a party to
the case because if he’s not a party, a separate action
will have to be filed by Justo which will result in him
dealing with the statute of limitations.
The CFI denied the petition so Justo appealed.
ISSUE: W/N Aruego considered a party in the case.
RULING: Yes, Aruego is a party in the case. Non-
registration of UPC is undisputed. Hence, on account of
the non-registration it cannot be considered a
corporation, not even a corporation de facto; UPC then
has no personality separate from Aruego, thus cannot
be sued independently;
Corporation-by-estoppel not invoked by UPC. Even if
invoked, it’s not applicable;
Aruego represented a non-existent entity and induced
not only Justo but also the court to believe such
representation; (he signed the contract as president and
stated the UPC was registered);
One who has induced another to act upon his wilful
misrepresentation that a corporation was duly
organized and existing under the law, cannot thereafter
set up against his victim the principle of corporation by
estoppel (Salvatiera vs. Garlitos, 56 O.G. 3069);
Aruego is the real defendant because it is UPC who
came to the court, but as said, it does not have
independent personaility; it is just a name;
In reality, it was Aruego, in reality, the one who
answered and litigated, through his own law firm as
counsel;
On Agency, a person acting or purporting to act on
behalf of a corporation which has no valid existence
assumes such privileges and obligations and becomes
CIVIL PROCEDURE CASE DIGESTS - 1
personally liable for contracts entered into or for other
acts performed as such agent;
On the issue of due process (since Aruego wasn’t named
in the case), Aruego was given his day in court;
Parties to a suit are "persons who have a right to control
the proceedings, to make defense, to adduce and cross-
examine witnesses, and to appeal from a decision; in
reality, it was Aruego who exercised these rights;
By due process of law we mean a law which hears
before it condemns; which proceeds upon inquiry, and
renders judgment only after trial;
Summary: The evidence is patently clear that Jose M.
Aruego, acting as representative of a non-existent
principal, was the real party to the contract sued upon;
that he was the one who reaped the benefits resulting
from it, so much so that partial payments of the
consideration were made by him; that he violated its
terms, thereby precipitating the suit in question; and
that in the litigation he was the real defendant.
CASE REMANDED: Lower court to hold supplementary
proceedings for the purpose of carrying the judgment
into effect against University Publishing Co., Inc. and/or
Jose M. Aruego (because others might be liable to him
for reimbursement or contribution.)
D. ALVERO V. DELA ROSA
FACTS: On June 25, 1945, respondent Jose R. Victoriano
had filed a complaint, in the Court of First Instance of
the City of Manila, against petitioner Fredesvindo S.
Alvero and one Margarita Villarica, alleging two causes
of action:
(1) to declare in force the contract of sale, between said
Jose R. Victoriano and Margarita Villarica, of two parcels
of land in the Manotoc subdivision, Balintawak, in the
barrio of Calaanan, municipality of Caloocan, Province
of Rizal, which land was subsequently sold by said
Villarica, in favor of petitioner Fredesvindo S. Alvero, on
December 31, 1944, for the sum of P100,000 in
Japanese military notes; and
(2) to declare said subsequent sale null and void. On July
7, 1945, Margarita Villarica filed an answer to said
complaint, expressly admitting having sold said land to
Fresdesvindo S. Alvero, for P100,000, in December,
1944, due to the necessity of raising funds with which to
provide for herself and family, and that she did not
remember the previous sale; at the same time, offering
to repurchase said land from Fredesvindo S. Alvero in
the sum of P5,000, but that the latter refused to accept
the offer.
Jose R. Victoriano filed an answer to said counterclaim,
denying Fredesvindo S. Alvero's alleged ownership over
said land, and the other allegations contained in
Alvero's answer.
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On July 13, 1945, Fredesvindo S. Alvero, in answering
said complaint, denied the allegations and claimed
exclusive ownership of the land in question.
Hon. Mariano L. de la Rosa, Judge of the Court of First
Instance of the City of Manila, one of the respondents in
this case, rendered his decision, in which it was declared
that the two parcels of land in question had been sold
by Margarita Villarica to Jose R. Victoriano and that
Victoriano continued making monthly payments until
December, 1941, but that owing to the war-time
conditions then existing, Margarita Villarica agreed
verbally to suspend such payments until the restoration
of peace and that Margarita Villarica, having forgotten
the sale of said land to Jose R. Victoriano, sold the same
for P100,000 in Japanese military notes, on December
31, 1944, to Fredesvindo S. Alvero, but afterwards
offered to repurchase said property from him, for the
sum of P8,000 in genuine Philippine currency, after
liberation.
Jose R. Victoriano had presented the deed of sale which
was older than that of Fredesvindo S. Alvero, the
respondent judge rendered his decision in favor of Jose
R. Victoriano, adjudging to him the title over the
property in question, including all the improvements
existing thereon, and dismissed the counterclaim.
On November 28, 1945, Fredesvindo S. Alvero was
notified of said decision; and on December 27, 1945, he
filed a petition for reconsideration and new trial, which
was denied on January 3, 1946. On January 8, 1946,
Fredesvindo S. Alvero filed his notice of appeal and
record on appeal simultaneously in the lower court,
without filing the P60-appeal bond.
Jose R. Victoriano filed a petition to dismiss the appeal,
Fredesvindo S. Alvero filed an opposition to said motion
to dismiss, alleging that on the very same day, January
15, 1946, said appeal bond for P60 had been actually
filed, and allege as an excuse, for not filing the said
appeal bond, in due time, the illness of his lawyer's wife.
The respondent judge, Hon. Mariano L. de la Rosa,
ordered the dismissal of the appeal, declaring that,
although the notice of appeal and record on appeal had
been filed in due time, the P60-appeal bond was filed
too late.
ISSUE: Is the petition defective in form as well as in
substance?
HELD: Yes, the period for perfecting herein petitioner's
appeal commenced from November 28, 1945, when he
was notified of the judgment rendered in the case, and
expired on December 28, 1945; and, therefore, his
notice of appeal and record on appeal filed on January
8, 1946, were filed out of time, and much more so his
appeal bond, which was only filed on January 15, 1946.
Counsel for the petitioner Fredesvindo Alvero alleges as
an excuse, for his failure to perfect and file his appeal, in
due time, the illness of his wife. It is not difficult to
CIVIL PROCEDURE CASE DIGESTS - 1
understand the state of mind of the attorney, and his
intense devotion and ardent affection towards his dying
wife.
Unfortunately, counsel for petitioner has created a
difficult situation. In his motion for reconsideration and
new trial, dated December 27, 1945, he did not point
out specifically the findings or conclusions in the
judgment, are not supported by the evidence or which
are contrary to law, making express reference to the
pertinent evidence or legal provisions, as expressly
required by Rule 37, section 2, paragraph (c) of the
Rules of Court. Motions of that kind have been
considered as motions pro forma intended merely to
delay the proceeding, and, as such, they cannot and will
not interrupt or suspend the period of time for the
perfection of the appeal. He could have asked for an
extension of time, within which to file and perfect his
appeal, in the court below; but he had failed to do so,
and he must bear the consequences of his act.
A strict observance of the rules of court, which have
been considered indispensable to the prevention of
needless delays and to the orderly and speedy dispatch
of judicial business, is an imperative necessity. Human
laws are inflexible and no personal consideration should
stand in the way of performing a legal duty.
E. PRISCILLA ALMA JOSE vs. RAMON C. JAVELLANA, ET
AL.
FACTS: Margarita Marquez Alma Jose (Margarita) sold
for consideration of P160,000.00 to respondent Ramon
Javellana by deed of conditional sale two parcels of land
with areas of 3,675 and 20,936 square meters located in
Barangay Mallis, Guiguinto, Bulacan. They agreed that
Javellana would pay P80,000.00 upon the execution of
the deed and the balance of P80,000.00 upon the
registration of the parcels of land under the Torrens
System (the registration being undertaken by Margarita
within a reasonable period of time); and that should
Margarita become incapacitated, her son and attorney-
in-fact, Juvenal M. Alma Jose (Juvenal), and her
daughter, petitioner Priscilla M. Alma Jose, would
receive the payment of the balance and proceed with
the application for registration.
After Margarita died and with Juvenal having
predeceased Margarita without issue, the vendor’s
undertaking fell on the shoulders of Priscilla, being
Margarita’s sole surviving heir. However, Priscilla did
not comply with the undertaking to cause the
registration of the properties under the Torrens System,
and, instead, began to improve the properties by
dumping filling materials therein with the intention of
converting the parcels of land into a residential or
industrial subdivision. Faced with Priscilla’s refusal to
comply, Javellana commenced an action for specific
performance, injunction, and damages against her in
the Regional Trial Court in Malolos, Bulacan (RTC).
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Javellana prayed for the issuance of a temporary
restraining order or writ of preliminary injunction to
restrain Priscilla from dumping filling materials in the
parcels of land; and that Priscilla be ordered to institute
registration proceedings and then to execute a final
deed of sale in his favor. Priscilla filed a motion to
dismiss, stating that the complaint was already barred
by prescription; and that the complaint did not state a
cause of action.
The RTC initially denied Priscilla’s motion to dismiss.
However, upon her motion for reconsideration, the RTC
reversed itself and granted the motion to dismiss.
Javellana moved for reconsideration. The RTC denied
the motion for reconsideration for lack of any reason to
disturb its order. Accordingly, Javellana filed a notice of
appeal. Priscilla countered that the RTC order was not
appealable; that the appeal was not perfected on time;
and that Javellana was guilty of forum shopping. It
appears that pending the appeal, Javellana also filed a
petition for certiorari in the CA to assail the June 24,
1999 and June 21, 2000 orders dismissing his complaint.
The CA dismissed the petition for certiorari.
As to the notice on appeal, the CA reversed and set
aside the RTC decision and remanded the records to the
RTC "for further proceedings in accordance with law."
The CA denied the motion for reconsideration filed by
Priscilla.
ISSUES:
1. Whether or not the RTC’s decision denying of the
motion for reconsideration of the order of dismissal a
final order and appealable;
2. Javellana was guilty of forum shopping for filing in the
CA a petition for certiorari to assail the orders of the
RTC that were the subject matter of his appeal pending
in the CA.
HELD:
1. Yes. First of all, the denial of Javellana’s motion for
reconsideration left nothing more to be done by the
RTC because it confirmed the dismissal of Civil Case No.
79-M-97. It was clearly a final order, not an
interlocutory one. The distinction between a final order
and an interlocutory order is well known. The first
disposes of the subject matter in its entirety or
terminates a particular proceeding or action, leaving
nothing more to be done except to enforce by
execution what the court has determined, but the latter
does not completely dispose of the case but leaves
something else to be decided upon. An interlocutory
order deals with preliminary matters and the trial on
the merits is yet to be held and the judgment rendered.
The test to ascertain whether or not an order or a
judgment is interlocutory or final is: does the order or
judgment leave something to be done in the trial court
with respect to the merits of the case? If it does, the
order or judgment is interlocutory; otherwise, it is final.
CIVIL PROCEDURE CASE DIGESTS - 1
And, secondly, whether an order is final or interlocutory
determines whether appeal is the correct remedy or
not. A final order is appealable, to accord with the final
judgment rule enunciated in Section 1, Rule 41 of the
Rules of Court to the effect that "appeal may be taken
from a judgment or final order that completely disposes
of the case, or of a particular matter therein when
declared by these Rules to be appealable;" but the
remedy from an interlocutory one is not an appeal but a
special civil action for certiorari.
2. No. No forum shopping was committed. Priscilla
claims that Javellana engaged in forum shopping by
filing a notice of appeal and a petition for certiorari
against the same orders. As earlier noted, he denies
that his doing so violated the policy against forum
shopping.
The Court expounded on the nature and purpose of
forum shopping in In Re: Reconstitution of Transfer
Certificates of Title Nos. 303168 and 303169 and
Issuance of Owner’s Duplicate Certificates of Title In
Lieu of Those Lost, Rolando Edward G. Lim, Petitioner:
Forum shopping is the act of a party litigant against
whom an adverse judgment has been rendered in one
forum seeking and possibly getting a favorable opinion
in another forum, other than by appeal or the special
civil action of certiorari, or the institution of two or
more actions or proceedings grounded on the same
cause or supposition that one or the other court would
make a favorable disposition. Forum shopping happens
when, in the two or more pending cases, there is
identity of parties, identity of rights or causes of action,
and identity of reliefs sought. Where the elements of
litis pendentia are present, and where a final judgment
in one case will amount to res judicata in the other,
there is forum shopping. For litis pendentia to be a
ground for the dismissal of an action, there must be: (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.
For forum shopping to exist, both actions must involve
the same transaction, same essential facts and
circumstances and must raise identical causes of action,
subject matter and issues. Clearly, it does not exist
where different orders were questioned, two distinct
causes of action and issues were raised, and two
objectives were sought.
Should Javellana’s present appeal now be held barred
by his filing of the petition for certiorari in the CA when
his appeal in that court was yet pending?
We are aware that in Young v. Sy, in which the
petitioner filed a notice of appeal to elevate the orders
concerning the dismissal of her case due to non-suit to
the CA and a petition for certiorari in the CA assailing
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the same orders four months later, the Court ruled that
the successive filings of the notice of appeal and the
petition for certiorari to attain the same objective of
nullifying the trial court’s dismissal orders constituted
forum shopping that warranted the dismissal of both
cases. The Court said:
Ineluctably, the petitioner, by filing an ordinary appeal
and a petition for certiorari with the CA, engaged
in forum shopping. When the petitioner commenced
the appeal, only four months had elapsed prior to her
filing with the CA the Petition for Certiorari under Rule
65 and which eventually came up to this Court by way
of the instant Petition (re: Non-Suit).
The elements of litis pendentia are present between the
two suits. As the CA, through its Thirteenth Division,
correctly noted, both suits are founded on exactly the
same facts and refer to the same subject matter—the
RTC Orders which dismissed Civil Case No. SP-5703
(2000) for failure to prosecute. In both cases, the
petitioner is seeking the reversal of the RTC orders. The
parties, the rights asserted, the issues professed, and
the reliefs prayed for, are all the same. It is evident that
the judgment of one forum may amount to res judicata
in the other.
The remedies of appeal and certiorari under Rule 65 are
mutually exclusive and not alternative or cumulative.
This is a firm judicial policy. The petitioner cannot hedge
her case by wagering two or more appeals, and, in the
event that the ordinary appeal lags significantly behind
the others, she cannot post facto validate this
circumstance as a demonstration that the ordinary
appeal had not been speedy or adequate enough, in
order to justify the recourse to Rule 65. This practice, if
adopted, would sanction the filing of multiple suits in
multiple fora, where each one, as the petitioner
couches it, becomes a “precautionary measure” for the
rest, thereby increasing the chances of a favorable
decision. This is the very evil that the proscription on
forum shopping seeks to put right.
In Guaranteed Hotels, Inc. v. Baltao, the Court stated
that the grave evil sought to be avoided by the rule
against forum shopping is the rendition by two
competent tribunals of two separate and contradictory
decisions. Unscrupulous party litigants, taking
advantage of a variety of competent tribunals, may
repeatedly try their luck in several different fora until a
favorable result is reached. To avoid the resultant
confusion, the Court adheres strictly to the rules against
forum shopping, and any violation of these rules results
in the dismissal of the case.
F. CIR vs MIRANT PAGBILAO CORP
FACTS: [MPC] is a domestic corporation duly organized
and existing under and by virtue of the laws of the
Philippines.
For the period April 1, 1996 to December 31, 1996,
[MPC] seasonably filed its Quarterly VAT Returns
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reflecting an accumulated input taxes in the amount of
P39,330,500.85. These input taxes were allegedly paid
by [MPC] to the suppliers of capital goods and services
for the construction and development of the power
generating plant and other related facilities in Pagbilao,
Quezon.
Pursuant to the procedures prescribed under Revenue
Regulations No. 7-95, as amended, [MPC] filed on June
30, 1998, an application for tax credit or refund of the
aforementioned unutilized VAT paid on capital goods.
In answer to the Petition, [the BIR Commissioner]
advanced as special and affirmative defenses that
"[MPC]'s claim for refund is still pending investigation
and consideration before the office of [the BIR
Commissioner] accordingly, the filing of the present
petition is premature; well-settled is the doctrine that
provisions in tax refund and credit are construed strictly
against the taxpayer as they are in the nature of a tax
exemption; in an action for refund or tax credit, the
taxpayer has the burden to show that the taxes paid
were erroneously or illegally paid and failure to sustain
the said burden is fatal to the action for refund; it is
incumbent upon [MPC] to show that the claim for tax
credit has been filed within the prescriptive period
under the Tax Code; and the taxes allegedly paid by
[MPC] are presumed to have been collected and
received in accordance with law and revenue
regulations.
The CTA ruled in favor of MPC and the refund was
granted.
Aggrieved, the BIR Commissioner filed with the CA a
Petition for Review of the foregoing Decision. Notably,
the BIR Commissioner identified and discussed as
grounds for its Petition arguments that were totally new
and were never raised before the CTA, to wit -
1. RESPONDENT BEING AN ELECTRIC UTILITY, IT IS
SUBJECT TO FRANCHISE TAX UNDER THEN
SECTION 117 (NOW SECTION 119) OF THE TAX
CODE AND NOT TO VALUE ADDED TAX (VAT).
2. SINCE RESPONDENT IS EXEMPT FROM VAT, IT IS
NOT ENTITLED TO THE REFUND OF INPUT VAT
PURSUANT TO SECTION 4.103-1 OF REVENUE
REGULATIONS NO. 7-95.
The Court of Appeals found no merit in the BIR
Commissioner's Petition, and in its Decision, dated 30
July 2003, it pronounced that:
(1) The BIR Commissioner cannot validly change his
theory of the case on appeal;
CA affirmed in toto.
Hence, this petition. The BIR Commissioner argues that
(1) The observance of procedural rules may be relaxed
considering that technicalities are not ends in
themselves but exist to protect and promote the
substantive rights of the parties;
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ISSUE: WON the contention of the BIR commissioner is
correct.
RULING: No. The general rule is that a party
cannot change his theory of the case on appeal.
It is already well-settled in this jurisdiction that a party
may not change his theory of the case on appeal. Such a
rule has been expressly adopted in Rule 44, Section 15
of the 1997 Rules of Civil Procedure, which provides -
SEC. 15. Questions that may be raised on appeal. -
Whether or not the appellant has filed a motion for new
trial in the court below, he may include in his
assignment of errors any question of law or fact that
has been raised in the court below and which is within
the issues framed by the parties.
Thus, in Carantes v. Court of Appeals, this Court
emphasized that –
The settled rule is that defenses not pleaded in the
answer may not be raised for the first time on appeal. A
party cannot, on appeal, change fundamentally the
nature of the issue in the case. When a party
deliberately adopts a certain theory and the case is
decided upon that theory in the court below, he will not
be permitted to change the same on appeal, because to
permit him to do so would be unfair to the adverse
party.
In the more recent case of Mon v. Court of Appeals, this
Court again pronounced that, in this jurisdiction, the
settled rule is that a party cannot change his theory of
the case or his cause of action on appeal. It affirms that
"courts of justice have no jurisdiction or power to
decide a question not in issue." Thus, a judgment that
goes beyond the issues and purports to adjudicate
something on which the court did not hear the parties,
is not only irregular but also extrajudicial and invalid.
The rule rests on the fundamental tenets of fair play.
The BIR Commissioner pleads with this Court not to
apply the foregoing rule to the instant case, for a rule
on technicality should not defeat substantive justice.
The BIR Commissioner apparently forgets that there are
specific reasons why technical or procedural rules are
imposed upon the courts, and that compliance with
these rules, should still be the general course of action.
Hence, this Court has expounded that -
Procedural rules, we must stress, should be treated with
utmost respect and due regard since they are designed
to facilitate the adjudication of cases to remedy the
worsening problem of delay in the resolution of rival
claims and in the administration of justice. The
requirement is in pursuance to the bill of rights
inscribed in the Constitution which guarantees that "all
persons shall have a right to the speedy disposition of
their cases before all judicial, quasi-judicial and
administrative bodies." The adjudicatory bodies and the
parties to a case are thus enjoined to abide strictly by
the rules. While it is true that a litigation is not a game
of technicalities, it is equally true that every case must
CIVIL PROCEDURE CASE DIGESTS - 1
be prosecuted in accordance with the prescribed
procedure to ensure an orderly and speedy
administration of justice. There have been some
instances wherein this Court allowed a relaxation in the
application of the rules, but this flexibility was "never
intended to forge a bastion for erring litigants to violate
the rules with impunity." A liberal interpretation and
application of the rules of procedure can be resorted to
only in proper cases and under justifiable causes and
circumstances.
The courts have the power to relax or suspend technical
or procedural rules or to except a case from their
operation when compelling reasons so warrant or when
the purpose of justice requires it. What constitutes
good and sufficient cause that would merit suspension
of the rules is discretionary upon the courts.
In his Petition and Memorandum before this Court, the
BIR Commissioner made no attempt to provide
reasonable explanation for his failure to raise before the
CTA the issue of MPC being a public utility subject to
franchise tax rather than VAT. The BIR Commissioner
argues, in a singular paragraph in his Petition,
subsequently reproduced in his Memorandum, that the
Court of Appeals should have taken cognizance of the
said issue, although it was raised for the first time on
appeal, entirely on the basis of this Court's ruling in Sy v.
Court of Appeals. He contends that -
The submission fails to take into account that although
this Honorable Court has repeatedly ruled that litigants
cannot raise an issue for the first time on appeal, as this
would contravene the basic rules of justice and fair play,
the observance of procedural rules may be relaxed,
noting that technicalities are not ends in themselves but
exist to protect and promote the substantive rights of
the litigants.
This Court is unconvinced. There is no sufficient cause
to warrant the relaxation of technical or procedural
rules in the instant case. The general rules of procedure
still apply and the BIR Commissioner cannot be allowed
to raise an issue for the first time on appeal.
G. SARMIENTO V. ZARATAN
FACTS: Petitioner Gliceria Sarmiento filed an ejectment
case against respondent Emerita Zaratan, in the
Metropolitan Trial Court (MeTC) of Quezon City.
On 31 March 2003, the MeTC rendered a decision in
favor of petitioner. (MeTC ordered the defendant to pay
plaintiff monthly rentals and to vacate the premises.)
Respondent filed her notice of appeal. Thereafter, the
case was raffled to the RTC of Quezon City. In the Notice
of Appealed Case, the RTC directed respondent to
submit her memorandum in accordance with the
provisions of Section 7(b) of Rule 40of the Rules of
Court and petitioner to file a reply memorandum within
15days from receipt.
Page 6 of 85

Respondent’s counsel having received the notice on 19
May 2003, he had until 3 June 2003 within which to file
the requisite memorandum. But on 3June 2003, he filed
a Motion for Extension of Time of five days due to his
failure to finish the draft of the said Memorandum. He
cited as reasons for the delay of filing his illness for one
week, lack of staff to do the work due to storm and
flood compounded by the grounding of the computers
because the wirings got wet. But the motion remained
unacted.
On 9 June 2003, respondent filed her Memorandum. On
19 June 2003, the RTC dismissed the appeal as follows:
Record shows that defendant-appellant
received the Notice of Appealed Case, through
counsel, on May 19, 2003 (Registry Return
Receipt dated May 12, 2003, Record, back of p.
298).
Thus, under Section 7(b), Rule 40of the 1997
Rules of Civil Procedure, she had fifteen (15)
days or until June3, 2003 within which to
submit a memorandum on appeal. As further
appears on record, however, the required
Memorandum was filed by defendant-appellant
only on June 9, 2003, or six (6) daysbeyond the
expiration of the aforesaid fifteen day period.
Aggrieved, respondent filed a Petition for Certiorari in
the Court of Appeals, which was granted the petition of
respondent. The appellate court nullified and set aside
Orders of the RTC and ordered the reinstatement of
respondent’s appeal. Consequently, respondent’s
appeal memorandum was admitted and the case
remanded to the RTC for further proceedings. Hence,
this appeal by petitioner.
ISSUE: Whether the lack of notice of hearing in the
Motion for Extension of Time to file Memorandum on
Appeal is fatal, such that the filing of the motion is a
worthless piece of paper.
RULING: NO. Petitioner avers that, because of the
failure of respondent to include a Notice of Hearing in
her Motion for Extension of Time to file Memorandum
on Appeal in the RTC, the latter’s motion is a worthless
piece of paper with no legal effect. It is not disputed
that respondent perfected her appeal on 4 April 2003
with the filing of her Notice of Appeal and payment of
the required docket fees. However, before the
expiration of time to file the Memorandum, she filed a
Motion for Extension of Time seeking an additional
period of five days within which to file her
Memorandum, which motion lacked the Notice of
Hearing required by Section 4, Rule 15 of the 1997 Rules
of Court which provides:
SEC. 4. Hearing of Motion. - Except for motions
which the court may act upon without
prejudicing the rights of the adverse party,
every written motion shall be set for hearing by
the applicant. Every written motion required to
be heard and the notice of the hearing thereof
shall be served in such a manner as to ensure its
CIVIL PROCEDURE CASE DIGESTS - 1
receipt by the other party at least three (3) days
before the date of hearing, unless the court for
good cause sets the hearing on shorter notice.
As may be gleaned above and as held time and again,
the notice requirement in a motion is mandatory. As a
rule, a motion without a Notice of Hearing is considered
pro forma and does not affect the reglementary period
for the appeal or the filing of the requisite pleading.
As a general rule, notice of motion is required where a
party has a right to resist the relief sought by the
motion and principles of natural justice demand that his
right be not affected without an opportunity to be
heard. The three-day notice required by law is intended
not for the benefit of the movant but to avoid surprises
upon the adverse party and to give the latter time to
study and meet the arguments of the motion. Principles
of natural justice demand that the right of a party
should not be affected without giving it an opportunity
to be heard.
The test is the presence of the opportunity to be heard,
as well as to have time to study the motion and
meaningfully oppose or controvert the grounds upon
which it is based. Considering the circumstances of the
present case, we believe that procedural due process
was substantially complied with.
There are, indeed, reasons which would warrant the
suspension of the Rules:
(a) the existence of special or compelling
circumstances,
(b) the merits of the case,
(c) a cause not entirely attributable to the fault or
negligence of the party favored by the suspension of
rules,
(d) a lack of any showing that the review sought is
merely frivolous and dilatory, and
(e) the other party will not be unjustly prejudiced
thereby.
Elements or circumstances (c), (d) and (e) exist in the
present case. The suspension of the Rules is warranted
in this case. The motion in question does not affect the
substantive rights of petitioner as it merely seeks to
extend the period to file Memorandum. The required
extension was due to respondent’s counsel’s illness,
lack of staff to do the work due to storm and flood,
compounded by the grounding of the computers. There
is no claim likewise that said motion was interposed to
delay the appeal. As it appears, respondent sought
extension prior to the expiration of the time to do so
and the memorandum was subsequently filed within
the requested extended period.
H. CHARLES CU-UNJIENG vs. HON. COURT OF APPEALS
and UNI0N BANK OF THE PHILIPPINES
FACTS: Respondent Union Bank of the Philippines (UBP)
is the owner of a parcel of agricultural land situated in
Barangay Sta. Maria, San Miguel, Bulacan and registered
in its name.
Page 7 of 85

Petitioner offered to buy the subject property and
issued checks in consideration thereof. UBP then
acknowledged receipt of the checks.
On August 30, 1994, petitioner wrote a follow-up letter
to UBP inquiring on the status of his offer to buy the
subject premises.
Via a reply-letter dated August 31, 1994, the manager
of UBP’s Acquired Assets Department advised petitioner
that his offer to purchase is yet to be acted upon
because the bank was still awaiting the opinion of its
legal division regarding the sale of "CARPable"
agricultural assets acquired by the bank.
As it turned out, UBP rejected petitioner’s offer upon on
account of the legal division’s opinion that sales of lands
covered by the Comprehensive Agrarian Reform Law
without prior Department of Agrarian Reform (DAR)
approval are considered null and void. Accordingly, UBP
advised petitioner to pick up the refund of his "earnest
money" at the bank’s disbursing unit.
On February 6, 1997, the petitioner filed his complaint
in RTC at Malolos, Bulacan, for Specific Performance and
Damages against UBP. RTC dismissed the case for lack
of cause of action because there was no perfected
contract of sale.
Petitioner filed with the trial court a Notice of Appeal
therein making known that he is taking an appeal from
the adverse decision to the CA. Acting thereon, the trial
court issued an Order directing the elevation of the
records of the case to the CA.
As things would have it, in the herein first assailed
Resolution dated May 10, 1999, the CA dismissed
petitioner’s appeal for nonpayment of the required
docket and other lawful appeal fees, to wit:
For failure of the appellant [petitioner] to pay the
docket and other lawful fees (Sec. 4, Rule 41, 1997 Rules
of Civil Procedure), the CA Resolved to DISMISS the
appeal pursuant to Sec. 1(c), Rule 50 of the same Rule.
Hence, this petition.
ISSUE: WON petitioner’s contention is correct.
RULING: Doctrinally entrenched is the pronouncement
that the right to appeal is merely statutory and a party
seeking to avail of that right must comply with the
statute or rules.
Rule 41, Section 4, of the 1997 Rules of Civil Procedure
provides:
SEC. 4. Appellate court docket and other lawful fees. –
Within the period for taking an appeal, the appellant
shall pay to the clerk of the court which rendered the
judgment or final order appealed from, the full amount
of the appellate court docket and other lawful fees.
Proof of payment of said fees shall be transmitted to
CIVIL PROCEDURE CASE DIGESTS - 1
the appellate court together with the original record or
the record on appeal.
Well-settled is the rule that payment of the docket and
other legal fees within the prescribed period is both
mandatory and jurisdictional, noncompliance with
which is fatal to an appeal. For, to stress, appeal is not a
matter of right, but a mere statutory privilege.
An ordinary appeal from a decision or final order of the
RTC to the CA must be made within fifteen (15) days
from notice. And within this period, the full amount of
the appellate court docket and other lawful fees must
be paid to the clerk of the court which rendered the
judgment or final order appealed from.
Time and again, this Court has consistently held that full
payment of docket fees within the prescribed period is
mandatory for the perfection of an appeal. Without
such payment, the appeal is not perfected and the
appellate court does not acquire jurisdiction to
entertain the appeal, thereby rendering the decision
sought to be appealed final and executory.
For sure, nonpayment of the appellate court docket and
other lawful fees within the reglementary period as
provided under Section 4, Rule 41, supra, is a ground for
the dismissal of an appeal under Section 1(c) of Rule 50,
to wit:
SECTION 1. Grounds for dismissal of appeal.- An appeal
may be dismissed by the Court of Appeals, on its own
motion or on that of the appellee, on the following
grounds:
xxx xxx xxx
c. Failure of the appellant to pay the docket and other
lawful fees as provided in section 4 of Rule 41; xxx
This Court has invariably sustained the CA’s dismissal on
technical grounds under the aforequoted provision
unless considerations of equity and substantial justice
present cogent reasons to hold otherwise. True, the
rules may be relaxed but only for persuasive and
weighty reasons, to relieve a litigant of an injustice
commensurate with his failure to comply with the
prescribed procedure.
The SC emphasizes that invocation of substantial
justice is not a magical incantation that will
automatically compel this Court to suspend procedural
rules. Rules of procedure are not to be belittled or
dismissed simply because their non-observance may
have resulted in prejudice to a party’s substantive
rights. Like all rules, they are required to be followed.
I. G.R. No. 142022 September 7, 2005
MINDANAO SAVINGS ANDD LOAN ASSOCIATION,
INC., Petitioners, vs. VICENTA VDA. DE FLORES, and
HEIRS OF FLORENCIO FLORES, SR., namely, EDNA
FLORES EISEIDEL, BELINDA FLORES, FLORENCIO T.
FLORES, JR., ROBERTO T. FLORES, SYLVIA FLORES SICAT
and LORNA FLORES FERNANDEZ, Respondent.
Facts: Florencio Flores, Sr., husband of respondent
Vicenta Vda. De Flores and predecessor-in-interest of
Page 8 of 85

the other respondents, entered into a JVA with DS
Homes, Inc. (DSHI) for the development of the Flores
spouses’ 2 adjoining lots located at the center of
Malaybalay, Bukidnon. Pursuant to the JVA, Flores, Sr.
secured a loan of ₱1.5M from petitioner MSLAI using as
collaterals the 2 aforementioned lots. Thereafter, a
commercial building known as the Flores Building was
constructed on the lots in question.
In 1986, the joint venture suffered severe business
reversals on account of which DSHI discontinued the
management of the Flores Building, prompting
respondents to take over its operations.
Meanwhile, MSLAI, then operating under the name
"Davao Savings and Loan Association", was placed by
the Monetary Board of the Central Bank under
receivership of the Philippine Deposit Insurance
Corporation (PDIC) which was later designated by the
Monetary Board as liquidator of the already insolvent
MSLAI.
Respondents received from PDIC a demand letter for
the payment of an outstanding obligation in the
staggering amount of ₱23,756,477.61. Unable to believe
that the original loan of ₱1.5M obtained by their
predecessor could have reached that much,
respondents then filed with the a complaint
for Accounting and Liquidation of Joint Venture,
Annulment of Loan & Mortgages and Damages thereat
docketed as Civil Case No. 2138.
In a decision dated January 26, 1998, the trial court
rendered judgment for the respondents.
On February 4, 1998, petitioner MSLAI filed with the
trial court a Notice of Appeal by reason of which the
records of the case were elevated to the Court of
Appeals.
On February 29, 1999, the appellate court issued a
notice to the parties requiring them to file their
respective briefs within 45 days from receipt thereof.
On June 21, 1999, the office of the Chief Legal Counsel
of the PDIC, as counsel for petitioner MSLAI, entered its
appearance in the appellate court and filed a motion for
a 45-day extension of time to file appellant’s brief.
In its Resolution of August 11, 1999, the appellate court
favorably acted on petitioner’s motion and accordingly
granted petitioner forty-five (45) days from June 21 or
until August 5, 1999, within which to file its appellant’s
brief.
Come August 5, 1999, but no appellant’s brief was filed
by petitioner. Instead, on August 25, 1999, or way
beyond the period given by the appellate court,
petitioner filed a Motion to Admit, therein praying that
the appellant’s brief thereto attached be admitted.
In its challenged Resolution dated October 27, 1999, the
appellate court denied admission of the proffered
CIVIL PROCEDURE CASE DIGESTS - 1
Appellant’s Brief for being filed twenty (20) days
late, and consequently dismissed petitioner’s appeal.
Its motion for reconsideration having been denied by
the appellate court in its subsequent Resolution of
February 15, 2000, petitioner is now with us via the
instant recourse on the following assigned errors, which
perplexingly, are actually an assault against the decision
of the trial court and not the challenged resolutions of
the Court of Appeals.
At the outset, let it be made clear that in petitions for
review on certiorari under Rule 45 of the Rules of Court,
the "errors" which are reviewable by this Court are only
those committed by the Court of Appeals and not
directly those of the trial court. It is thus unfortunate
that the Office of the Chief Legal Counsel of the PDIC, as
petitioner’s counsel in this case, is evidently unaware of
how appellate proceedings before this Court go.
Issue: Whether or not the appellate court’s resolution
dismissing petitioner’s appeal was correct on account of
petitioner’s failure to file its appellant’s brief on time.
Ruling: Yes. We must emphasize that review is not a
matter of right. Accordingly, there should be strict
adherence to Rule 45 of the Rules of Court, Section 6 of
which delineates the grounds for the allowance of
review to avoid delays in the enforcement of final
judgments and orders of lower courts, to wit:
SEC. 6. Review discretionary. - A review is not a matter
of right, but of sound judicial discretion, and will be
granted only when there are special and important
reasons therefor. The following, while neither
controlling nor fully measuring the court’s discretion,
indicate the character of the reasons which will be
considered:
(a) When the court a quo has decided a question of
substance, not theretofore determined by the Supreme
Court, or has decided it in a way probably not in accord
with law or with the applicable decisions of the
Supreme Court; or
(b) When the court a quo has so far departed from the
accepted and usual course of judicial proceedings, or so
far sanctioned such departure by a lower court, as to
call for an exercise of the power of supervision.
Petitioner attempts to justify its tardiness by claiming
that its handling counsel who resigned from PDIC on
July 30, 1999 failed to turn over the subject case to
another lawyer for re-assignment.
This excuse is not only flimsy but utterly lame.
It bears emphasizing that petitioner is represented by
no less than the Office of the Chief Legal Counsel of the
PDIC which has, at its helm and command, a battery of
lawyers. As pointed out by respondents, on July 7, 1999,
the handling counsel tendered his resignation from PDIC
effective on July 30, 1999. Petitioner, therefore, had 29
days from July 7, 1999, or until August 5, 1999, the last
day for filing the subject brief. During those 29 days,
petitioner had the luxury of time to file its appellant’s
Page 9 of 85

brief, or, at the very least, ask for another extension
from the appellate court. It did not.
Petitioner ought to be reminded that procedural rules
are not to be belittled or dismissed simply because their
non-observance may have resulted in prejudice to the
parties’ substantive rights. Like all rules, they are
required to be followed except only for the most
persuasive of reasons as when "transcendental matters"
of life, liberty or state security are involved.
True, litigation is not a game of technicalities. It is
equally true, however, that every case must be
presented in accordance with the prescribed procedure
to ensure an orderly and speedy administration of
justice.
Doubtless, and judging from the very nature of
petitioner’s assigned errors, the instant petition was
resorted to as a substitute for the lost remedy of
appeal. This cannot be allowed, more so when, as here,
such loss is occasioned by petitioner’s own neglect.
WHEREFORE, the instant petition is DENIED.
J. G.R. No. 170354 June 30, 2006
EDGARDO PINGA, Petitioner, vs. THE HEIRS OF
GERMAN, SANTIAGO represented by FERNANDO
SANTIAGO, Respondents.
Facts: The Heirs of Santiago filed an injunction against
Pinga alleging that Pinga had been unlawfully entering
the coco lands of the respondent cutting wood and
bamboos and harvesting the fruits of the coconut trees.
As a counterclaim, Pinga contests the ownership of the
lands to which Pinga was harvesting the fruits.
However, due to failures of Heirs of Santiago to attend
the hearings, the court ordered the dismissal of said
case.
Respondents thus filed an MR not to reinstate the case
but to ask for the entire action to be dismissed and not
to allow petitioner to present evidence ex parte.
RTC granted the MR, hence the counterclaim was
dismissed. RTC ruled that compulsory counterclaims
cannot be adjudicated independently of plaintiff’s cause
of action vis a vis the dismissal of the complaint carries
with the dismissal of the counterclaim.
Petitioner then elevates it to the SC by way of Rule 45
on pure questions of law. (Santiago’s motive: They just
asked for the dismissal of their entire case so that their
ownership wouldn’t be put in controversy in the
counterclaim)
Issue: Whether or not dismissal of original complaint
affects that of the compulsory counter claims?
Ruling: No. The counterclaims, in this case, can stand on
its own.
CIVIL PROCEDURE CASE DIGESTS - 1
Rule 17 Sec 3 provides: ´If for any cause, the plaintiff
fails to appear on the date of his presentation of his
evidence x x x the complaint may be dismissed upon
motion of the defendant or upon the court’s own
motion, without prejudice to the right of the defendant
to prosecute his counterclaim in the same or in a
separate action.”
The dismissal of the complaint does not carry with the
dismissal of the counterclaim, compulsory or otherwise.
In fact, the dismissal of the complaint is without
prejudice to the right of defendants to prosecute his
counterclaim. Section 3 contemplates a dismissal not
procured by plaintiff, albeit justified by causes
imputable to him and which, in the present case, was
petitioner's failure to appear at the pre-trial.
This situation is also covered by Section 3, as extended
by judicial interpretation, and is ordered upon motion
of defendant or motu proprio by the court. Here, the
issue of whether defendant has a pending counterclaim,
permissive or compulsory, is not of determinative
significance. The dismissal of plaintiff's complaint is
evidently a confirmation of the failure of evidence to
prove his cause of action outlined therein, hence the
dismissal is considered, as a matter of evidence, an
adjudication on the merits.
This does not, however, mean that there is likewise
such absence of evidence to prove defendant's
counterclaim although the same arises out of the
subject matter of the complaint which was merely
terminated for lack of proof. To hold otherwise would
not only work injustice to defendant but would be
reading a further provision into Section 3 and wresting a
meaning therefrom although neither exists even by
mere implication.
Thus understood, the complaint can accordingly be
dismissed, but relief can nevertheless be granted as a
matter of course to defendant on his counterclaim as
alleged and proved, with or without any reservation
therefor on his part, unless from his conduct, express or
implied, he has virtually consented to the concomitant
dismissal of his counterclaim. The present rule
embodied in Sections 2 and 3 of Rule 17 ordains a more
equitable disposition of the counterclaims by ensuring
that any judgment thereon is based on the merit of the
counterclaim itself and not on the survival of the main
complaint.
Certainly, if the counterclaim is palpably without merit
or suffers jurisdictional flaws which stand independent
of the complaint, the trial court is not precluded from
dismissing it under the amended rules, provided that
the judgment or order dismissing the counterclaim is
premised on those defects. At the same time, if the
counterclaim is justified, the amended rules now
unequivocally protect such counterclaim from
peremptory dismissal by reason of the dismissal of the
complaint. Petition granted.
Page 10 of 85

K. G.R. No. 181274 June 23, 2010
PHILIPPINE ECONOMIC ZONE AUTHORITY, represented
herein by DIRECTOR GENERAL LILIA B. DE LIMA,
Petitioner, vs. JOSEPH JUDE CARANTES, ROSE
CARANTES, and all the other HEIRS OF MAXIMINO
CARANTES, Respondents.
Facts: Respondents Joseph Jude Carantes, Rose
Carantes and the heirs of Maximino Carantes are in
possession of a 30,368-square meter parcel of land
located in Loakan Road, Baguio City. They obtained
Certificate of Ancestral Land Claim (CALC) over the land
from the DENR. On the strength of said CALC,
respondents secured a building permit and a fencing
permit from the Building Official of Baguio City, Teodoro
G. Barrozo. They fenced the premises and began
constructing a residential building thereon.
Respondents received a letter from Digna D. Torres, the
Zone Administrator of the Philippine Economic Zone
Authority (PEZA), informing them that the house they
built had overlapped PEZA’s territorial boundary. Torres
advised respondents to demolish the same within 60
days from notice. Otherwise, PEZA would undertake its
demolition at respondents’ expense.
Without answering PEZA’s letter, respondents filed a
petition for injunction, with prayer for the issuance of a
temporary restraining order (TRO) and writ of
preliminary injunction before the RTC of Baguio City. By
Order dated April 8, 1999, the RTC of Baguio City issued
a TRO, which enjoined PEZA to cease and desist from
threatening respondents with the demolition of their
house before respondents’ prayer for a writ of
preliminary injunction can be heard. On September 19,
2001, the RTC likewise issued an Order, which directed
the parties to maintain the status quo pending
resolution of the case.
On October 2, 2001, the RTC granted respondents’
petition and ordered the issuance of a writ of injunction
against PEZA. The trial court ruled that respondents are
entitled to possess, occupy and cultivate the subject lots
on the basis of their CALC.
On appeal, the CA affirmed the RTC ruling.
The OSG explains the delay in appealing the CA decision.
It attributes the delay to the inadvertence of Senior
State Solicitor Rodolfo Geronimo M. Pineda, the
temporarily-designated officer-in-charge, who took over
the case when State Solicitor Maricar S.A. Prudon-Sison
went on maternity leave. Pineda allegedly merely noted
receipt of the CA decision without noticing that it was
adverse to PEZA. The OSG adds that the sparse
complement of three (3) lawyers left at the time could
not tackle at once the horde of cases assigned to the
division.
CIVIL PROCEDURE CASE DIGESTS - 1
Respondents likewise assail the petition for being filed
late, stressing that it was filed only after almost three
(3) months from petitioner’s receipt of the CA decision.
Issue: Whether or not the appeal was perfected outside
the reglementary period provided by law, hence, the
decision already became final and executory.
Ruling: No. The Court is inclined to overlook this
procedural lapse in the interest of substantial justice.
It is settled that an appeal must be perfected within the
reglementary period provided by law; otherwise, the
decision becomes final and executory. Before the
Supreme Court, a petition for review on certiorari under
Rule 45 of the 1997 Rules of Civil Procedure, as
amended, must be filed within fifteen (15) days from
notice of the judgment or final order or resolution
appealed from, or of the denial of the petitioner’s
motion for new trial or reconsideration filed in due time
after notice of the judgment. Even then, review is not a
matter of right, but of sound judicial discretion, and
may be granted only when there are special and
important reasons therefor.
In the case at bar, the Docket Division of the OSG
received a copy of the CA decision on November 7,
2007. It was not until February 1, 2008 or almost three
(3) months however, that the OSG, for petitioner, filed a
petition for review on certiorari with this Court. The
OSG pleads for understanding considering the scarcity
of its lawyers and the inadvertence of the temporarily-
designated OIC of Division XV in overlooking that the CA
decision was adverse to PEZA.
While the Court realizes the OSG’s difficulty in having
only three (3) lawyers working full time on its cases, the
OSG could have easily asked for an extension of time
within which to file the petition. More importantly, as
the government agency tasked to represent the
government in litigations, the OSG should perform its
duty with promptness and utmost diligence.
However, upon careful consideration of the merits of
this case, the Court is inclined to overlook this
procedural lapse in the interest of substantial justice.
Although a party is bound by the acts of its counsel,
including the latter’s mistakes and negligence, a
departure from this rule is warranted where such
mistake or neglect would result in serious injustice to
the client. Indeed, procedural rules may be relaxed for
persuasive reasons to relieve a litigant of an injustice
not commensurate with his failure to comply with the
prescribed procedure. More so, when to allow the
assailed decision to go unchecked would set a
precedent that will sanction a violation of substantive
law. Such is the situation in this case.
Page 11 of 85

L. G.R. No. 178984 August 19, 2009
ERLINDA MAPAGAY, Petitioner, vs. PEOPLE OF THE
PHILIPPINES, Respondent.
The rule is that when a party is represented by counsel,
notices of all kinds. including motions, pleadings and
orders, must be serve on the counsel. Notice to counsel
of records is binding to the client. and the neglect or
failure of counsel to inform him of an adverse judgment
resulting in the Joss of his right to appeal is not ground
for setting aside a judgment, valid and regular on its
face.
Facts: Erinda Mapagay (Mapagay) borrowed money
from Relindia dela Cruz in November 1996. Mapagay
gave her a signed check tor the loan and promised to
replace the check with cash. Upon failure of Mapagay to
give her cash despite repeated demands, she presented
the check to the drawee bank. The check was
dishonored for the reason of “Account Closed". Her
lawyer, after consultation, sent a demand letter to
Mapagay but the latter refused to receive it.
Dela cruz told Mapagay to pay the loan or the former
will sue her in court. Mapagay promised to pay, but
failed to do so. Thus, she filed a case for the violation of
Batas Pambansa Blg. 22 against Mapagay.
On June 1999. the Metropolitan Trial Curt (MeTC)
provisionally dismissed the case on the basis of
amicable settlement betv1een the parties. Hov1ever
the case was revived because Mapagay failed to comply
with the terms of their agreement.
The MeTC rendered a Decision finding Mapagay guilty
of the violation of Batas Pambansa Blg. 22.
The Regional Trial Court (RTC) affirmed in toto the
MeTC Decision. Mapagay filed a Motion for
Reconsideration but this was denied by the RTC for
being filed outside the the reglementary period.
Mapagay alleges that she learned of the RTC Decision
only on 20 October 2004 When she asked a friend to
check on the status of the case and that her lav1yer did
not inform her of the RTC Decision.
The Court of Appeal(CA) held that the RTC's Decision
had become final and unalterable for filing the motion
for reconsideration out of time. Hence, petitioner filed
the instant petition maintaining that the Court of
Appeals erred in denying due course to her appeal.
Issue: Whether or not the omission or negligence of
Mapagay’s counsel binds her.
Ruling: Yes. Under the Revised Rules of Criminal
Procedure, a motion for reconsideration of the
judgment of conviction may be filed within 15 days from
the promulgation of the judgment or from notice of the
final order appealed from. Failure to file a motion for
reconsideration within the reglementary period renders
the subject decision final and executory.
CIVIL PROCEDURE CASE DIGESTS - 1
Once a judgment attains finality, it becomes immutable
and unalterable. It may no longer be modified in any
respect, even if the modification is meant to correct
what is perceived to be an erroneous conclusion of fact
or law, and regardless of whether the modification is
attempted to be made by the court rendering it or by
this Court. Decisions that have long become final and
executory cannot be annulled by courts, and the
appellate court is deprived of jurisdiction to alter the
trial court’s final judgment. This doctrine is founded on
considerations of public policy and sound practice that,
at the risk of occasional errors, judgments must become
final at some point in time.
Evidence on record shows that petitioner’s counsel of
record, Atty. Antonio J. Ballena (Atty. Ballena), received
on 21 September 2004 a copy of the RTC Decision dated
14 September 2004, which affirms petitioner’s
conviction for violation of Batas Pambansa Blg. 22.
Hence, petitioner may file a motion for reconsideration
within 15 days from such date of receipt, which must be
on or before 6 October 2004. However, petitioner filed
her motion for reconsideration only on 3 November
2004, or on the 43rd day, which was obviously way
beyond the 15-day reglementary period. Consequently,
the RTC Decision dated has become final and executory.
Petitioner alleges that she learned of the RTC Decision
only on 20 October 2004 when she asked a friend to
check on the status of the case and that Atty. Ballena
did not inform her of the RTC Decision.
The rule is that when a party is represented by counsel,
notices of all kinds, including motions, pleadings and
orders, must be served on the counsel. Notice to
counsel of record is binding on the client, and the
neglect or failure of counsel to inform him of an adverse
judgment resulting in the loss of his right to appeal is
not a ground for setting aside a judgment, valid and
regular on its face.
It is indeed settled that the omission or negligence of
counsel binds the client. This is more true if the client
did not make a periodic check on the progress of her
case. Otherwise, there would be no end to a suit, so
long as a new counsel could be employed who would
allege and show that the prior counsel had not been
sufficiently diligent, experienced, or learned.
In the case at bar, there is no showing that petitioner
had constantly followed up her case with Atty. Ballena.
Petitioner did not even bother to call or personally go to
the RTC to verify the progress of her case. Clearly,
petitioner did not exercise diligence in pursuing her
case.
Petitioner argues that the technical rules of procedure
should be relaxed in the interest of substantial justice,
so as to afford her opportunity to present her case.
We have invariably pronounced that the bare
invocation of "the interest of substantial justice" is not a
Page 12 of 85

magic wand that will automatically compel this Court to
suspend procedural rules. Rules of Procedure are tools
designed to promote efficiency and orderliness, as well
as to facilitate the attainment of justice, such that strict
adherence thereto is required. Procedural rules are not
to be belittled or dismissed, simply because their non-
observance may have resulted in prejudice to a party’s
substantive rights. Like all rules, they are required to be
followed except only for the most persuasive reasons,
when they may be relaxed to relieve a litigant of an
injustice not commensurate with the degree of his
thoughtlessness in not complying with the procedure
prescribed. Rules of Procedure, especially those
prescribing the time within which certain acts must be
done, are absolutely indispensable to the prevention of
needless delays and to the orderly and speedy discharge
of justice. We have held that the rules may be relaxed
only in "exceptionally meritorious cases."
In the instant case, we find no persuasive or
exceptionally meritorious reasons to justify the
relaxation of the rules. The circumstances obtaining in
the instant case show that petitioner was accorded
opportunity to settle her liability to private complainant
and to present her case during the proceedings. As
earlier recounted, the MTC, upon motion of petitioner,
provisionally dismissed the case on the basis of an
amicable settlement between her and private
complainant. However, the case was revived, because
petitioner failed to comply with the settlement.
Petitioner was given several opportunities during the
trial to present evidence in her defense. Nonetheless,
despite being duly notified and subpoenaed, she did not
appear during the trial proper and promulgation of
judgment.
It should be noted that private complainant has not
been fully or partially paid the amount stated in the
check. The time-honored principle is "Justice is for all.
Litigants have equal footing in a court of law. Rules are
laid down for the benefit of all and should not be made
dependent upon a suitor’s sweet time and own
bidding."
Given the foregoing, we find no error in the Decision
and Resolution of the Court of Appeals denying
petitioner’s appeal.
M. G.R. No. 9527. August 23, 1915
THE UNITED STATES, Plaintiff-Appellee, v. JOSE
TAMPARONG ET AL., Defendants-Appellants.
SYLLABUS (Basaha nalang ninyo ang syllabus. Ruling was
taken from a digest online. Dili nako masabtan ang
case.)
1. JUSTICES OF THE PEACE; APPEALS IN THIRD
INSTANCE; EXTENT OF REVIEW. — Under the Spanish
criminal procedure, appeals from justices’ courts were
allowed only to Courts of First Instance. By section 43 of
General Orders No. 58, this procedure has been so
amended that appeals can be taken to the Supreme
CIVIL PROCEDURE CASE DIGESTS - 1
Court in such cases when the validity or constitutionality
of a statute is involved. This amendment of the
procedure does not carry with it the right of review of
the facts, but is confined to the purpose stated — that
is, of determining the validity or constitutionality of the
statute or ordinance upon which the judgment was
predicated. Former cases reviewed, showing that such
has uniformly been the interpretation of section 43 by
this court.
Facts: The defendants were convicted by the justice of
the peace of Baguio for having played the game of
chance called "monte" in violation of Ordinance No. 35.
They appealed to the Court of First Instance, where they
were again tried and convicted upon the same charge.
An appeal was allowed to this court because the validity
of Ordinance No, 35 was drawn in question during the
trial of the cause in the court below.
Issues: Whether or not the court is required under the
law to examine the evidence for the purpose of
determining the guilt or innocence of the defendants?
Ruling: No. Although the SC wrote that Act No. 1627
does not explicitly limit their powers from examining
issues of facts, it likewise does not expressly authorize
them to do so. The SC, nevertheless, interpreted that
the law was not framed to confer them the said power.
The SC has revisited prior laws to ascertain the intention
of the 'framers' of the amended section of Act No. 1627;
the latter being ambiguous in the sense that it did not
explicitly allow nor prohibit SC to examine issues of
facts on appeals. The SC found, in light of former
practices and from further understanding the
circumstances in which the framers of the amended law
were subject to, that the amendment was not meant to
confer in them the jurisdiction of reviewing questions of
fact.
The SC further distinguished their holding from Loeb vs
Columbia Township Trustees, and Boise Artesian Hot
and Cold Water Co., Ltd. vs. Boise City. These two latter
cases were taken to the US SC directly from the circuit
courts as writs of error, (not as appeals) where the US
SC does not only have jurisdiction to review
constitutional questions but also every other question
properly arising.
In at least fourteen other cases, the SC has showed that
the ruling for this issue in the last 10 years has remained
uniform. And that the court, since its organization,
never held that it had the power to review facts
touching guilt of an accused person, ONLY as to when
the appeal involved the validity or constitutionality of a
statute or the constitutionality of a municipal or
township ordinance.
Page 13 of 85

N. G.R. Nos. 170609-13 January 30, 2009
BERNIE G. MIAQUE, Petitioner vs. HON. VIRGILIO M.
PATAG, in his capacity as Presiding Judge of the
Regional Trial Court of Iloilo City, Branch 33, VICENTE
C. ARAGONA, and PEOPLE OF THE PHILIPPINES,
Respondents.
Facts: 5 informations for libel were filed in the RTC
against petitioner Miaque and 3 others. Said
informations were quashed for lack of jurisdiction of the
offense charged. Specifically, said Informations failed to
allege either that private respondent Vicente Aragona
actually held office in Iloilo City at the time of the
commission of the offenses or that the alleged libelous
remarks were printed or first published in Iloilo City.
5 new informations for libel were filed against
petitioner in the RTC as recommended by Assistant
Provincial Prosecutor Maranon. The new Informations
were similarly worded as those previously quashed but
with these added allegations: (1) Aragona, Regional
State Prosecutor VI of the Department of Justice, held
office at the Hall of Justice, Iloilo City or (2) the alleged
libelous remarks were written, printed and published in
Iloilo City.
Petitioner filed his motions not to issue warrants of
arrest and, if already issued, to recall them. The motions
were denied on the ground that petitioner was beyond
the court's jurisdiction as he was not under the custody
of the court.
Petitioner contends that the Informations were filed
without the mandatory preliminary investigation.
Moreover, the new Informations were filed by one who
had no authority to do so because these were filed by
the Iloilo Provincial Prosecutor's Office and not the Iloilo
City Prosecutor's Office. Jurisdiction over the subject
matter supposedly belonged to the latter. Petitioner
likewise assails the refusal of respondent judge to recall
the warrants of arrest issued against him.
The Office of the Solicitor General (OSG), representing
the People of the Philippines, contends that the
quashed Informations were merely amended to include
the allegations that Aragona actually held office in Iloilo
City at the time of the commission of the offenses or
that the libelous remarks were printed and first
published in Iloilo City. A new preliminary investigation
was therefore unnecessary. On the warrant of arrest,
the OSG alleges that the trial court acquired jurisdiction
over petitioner in view of the filing of his August 8, 2005
motions. The filing of the motions supposedly was
tantamount to voluntarily submitting to the jurisdiction
of the court.
Issues: 1. Whether or not a direct resort to the Supreme
Court in a petition for certiorari is correct.
2. Whether or not the Iloilo Provincial Prosecutor’s
Office has the authority to file and sign the new
Informations against petitioner.
CIVIL PROCEDURE CASE DIGESTS - 1
Ruling: 1. Generally, a direct resort to us in a petition for
certiorari is incorrect for it violates the hierarchy of
courts. A regard for judicial hierarchy most certainly
indicates that petitions for the issuance of extraordinary
writs against first level courts should be filed in the RTC
and those against the latter should be filed in the Court
of Appeals. This rule, however, may be relaxed when
pure questions of law are raised as in this case.
2. No. It is undisputed that the alleged acts of libel were
committed in Iloilo City. The Charter of the City of Iloilo
provides:
[The City Fiscal, now City Prosecutor] shall also have
charge of the prosecution of all crimes, misdemeanors
and violations of city ordinances, in the Court of First
Instance (now RTC) and in the Municipal Trial Court of
the city, and shall discharge all the duties in respect to
criminal prosecutions enjoined by law upon provincial
fiscals.
The city fiscal shall cause to be investigated all charges
of crimes, misdemeanors, and violations of ordinances,
and have the necessary informations or complaints
prepared against the persons accused.
The authority to sign and file the new Informations is
properly lodged with the Iloilo City Prosecutor’s Office.
The Iloilo Provincial Prosecutor’s Office was clearly
bereft of authority to file the new Informations against
petitioner. An Information, when required by law to be
filed by a public prosecuting officer, cannot be filed by
another. The court does not acquire jurisdiction over
the case because there is a defect in the Information.
We held in People v. Hon. Garfin:
It is a valid information signed by a competent officer
which, among other requisites, confers jurisdiction on
the court over the person of the accused and the subject
matter thereof. xxx Questions relating to lack of
jurisdiction may be raised at any stage of the
proceeding. An infirmity in the information, such as lack
of authority of the officer signing it, cannot be cured by
silence, acquiescence, or even by express consent.
The foregoing considered, the Informations were fatally
defective. The common infirmity in the Informations
constituted a jurisdictional defect that could not be
cured. There was no point in proceeding under a
defective Information that could never be the basis of a
valid conviction.
O. G.R. No. 211356, September 29, 2014
CRISOSTOMO B. AQUINO, Petitioner, v. MUNICIPALITY
OF MALAY, AKLAN, REPRESENTED BY HON. MAYOR
JOHN P. YAP, SANGGUNIANG BAYAN OF MALAY,
AKLAN, REPRESENTED BY HON. EZEL FLORES, DANTE
PASUGUIRON, ROWEN AGUIRRE, WILBEC GELITO,
JUPITER GALLENERO, OFFICE OF THE MUNICIPAL
ENGINEER, OFFICE OF THE MUNICIPAL TREASURER,
BORACAY PNP CHIEF, BORACAY FOUNDATION, INC.,
REPRESENTED BY NENETTE GRAF, MUNICIPAL
Page 14 of 85

AUXILIARY POLICE, AND JOHN AND JANE DOES,
Respondents.
DOCTRINE: Based on law and jurisprudence, the office of
the mayor has quasi-judicial powers to order the closing
and demolition of establishments. This power granted
by the LGC, as earlier explained, is not the same power
devolved in favor of the LGU under Sec. 17 (b)(2)(ii), as
above-quoted, which is subject to review by the DENR.
The fact that the building to be demolished is located
within a forestland under the administration of the
DENR is of no moment, for what is involved herein,
strictly speaking, is not an issue on environmental
protection, conservation of natural resources, and the
maintenance of ecological balance, but the legality or
illegality of the structure. Rather than treating this as an
environmental issue then, focus should not be diverted
from the root cause of this debacle compliance.
Facts: Petitioner is the president and chief executive
officer of Boracay Island West Cove Management
Philippines, Inc. (Boracay West Cove). On January 7,
2010, the company applied for a zoning compliance
with the municipal government of Malay, Aklan. While
the company was already operating a resort in the area,
and the application sought the issuance of a building
permit covering the construction of a three-storey hotel
over a parcel of land measuring 998 sqm. located in
Sitio Diniwid, Barangay Balagab, Boracay Island, Malay,
Aklan, which is covered by a Forest Land Use Agreement
for Tourism Purposes (FLAgT) issued by the Department
of Environment and Natural Resources (DENR) in favor
of Boracay West Cove.
Through a Decision on Zoning dated January 20, 2010,
the Municipal Zoning Administrator denied petitioner’s
application on the ground that the proposed
construction site was within the “no build zone”
demarcated in Municipal Ordinance 2000-131
(Ordinance).
Petitioner appealed the denial action to the Office of
the Mayor but despite follow up, no action was ever
taken by the respondent mayor. A Cease and Desist
Order was issued by the municipal government,
enjoining the expansion of the resort, and on June 7,
2011, the Office of the Mayor of Malay, Aklan issued the
assailed EO 10, ordering the closure and demolition of
Boracay West Cove’s hotel.
Petitioner filed a Petition for Certiorari with prayer for
injunctive relief with the CA Alleging that the order was
issued and executed with grave abuse of discretion.
Issue: Whether or not judicial proceedings should be
conducted first before the LGU can order the closure
and demolition of the property in question.
Ruling: Generally, LGUs have no power to declare a
particular thing as a nuisance unless such a thing is a
nuisance per se.
CIVIL PROCEDURE CASE DIGESTS - 1
Despite the hotel’s classification as a nuisance per
accidens, however, we still find in this case that the LGU
may nevertheless properly order the hotel’s demolition.
This is because, in the exercise of police power and the
general welfare clause, property rights of individuals
may be subjected to restraints and burdens in order to
fulfill the objectives of the government. Otherwise
stated, the government may enact legislation that may
interfere with personal liberty, property, lawful
businesses and occupations to promote the general
welfare.
Under the law, insofar as illegal constructions are
concerned, the mayor can, after satisfying the
requirement of due notice and hearing, order their
closure and demolition.
One such piece of legislation is the LGC, which
authorizes city and municipal governments, acting
through their local chief executives, to issue demolition
orders. Under existing laws, the office of the mayor is
given powers not only relative to its function as the
executive official of the town; it has also been endowed
with authority to hear issues involving property rights of
individuals and to come out with an effective order or
resolution thereon.20 Pertinent herein is Sec. 444 (b) (3)
(vi) of the LGC, which empowered the mayor to order
the closure and removal of illegally constructed
establishments for failing to secure the necessary
permits.
PRIMARY JURISDICTION
The DENR does not have primary jurisdiction over the
controversy
In alleging that the case concerns the development and
the proper use of the country’s environment and
natural resources, petitioner is skirting the principal
issue, which is Boracay West Cove’s non-compliance
with the permit, clearance, and zoning requirements for
building constructions under national and municipal
laws. He downplays Boracay West Cove’s omission in a
bid to justify ousting the LGU of jurisdiction over the
case and transferring the same to the DENR. He
attempts to blow the issue out of proportion when it all
boils down to whether or not the construction of the
three-storey hotel was supported by the necessary
documentary requirements.
Based on law and jurisprudence, the office of the mayor
has quasi-judicial powers to order the closing and
demolition of establishments. This power granted by
the LGC, as earlier explained, We believe, is not the
same power devolved in favor of the LGU under Sec. 17
(b)(2)(ii), as above-quoted, which is subject to review by
the DENR. The fact that the building to be demolished is
located within a forestland under the administration of
the DENR is of no moment, for what is involved herein,
strictly speaking, is not an issue on environmental
protection, conservation of natural resources, and the
maintenance of ecological balance, but the legality or
illegality of the structure. Rather than treating this as an
Page 15 of 85

environmental issue then, focus should not be diverted
from the root cause of this debacle––compliance.
Ultimately, the purported power of review by a regional
office of the DENR over respondents’ actions exercised
through an instrumentality of an ex-parte opinion, in
this case, finds no sufficient basis. At best, the legal
opinion rendered, though perhaps informative, is not
conclusive on the courts and should be taken with a
grain of salt.
P. G.R. No. 107518 October 8, 1998
PNOC SHIPPING AND TRANSPORT CORPORATION,
petitioner, vs. HONORABLE COURT OF APPEALS and
MARIA EFIGENIA FISHING
CORPORATION, respondents.
Doctrine: A party is entitled to adequate compensation
only for such pecuniary loss actually suffered and duly
proved. Indeed, basic is the rule that to recover actual
damages, the amount of loss must not only be capable
of proof but must actually be proven with a reasonable
degree of certainty, premised upon competent proof or
best evidence obtainable of the actual amount
thereof. The claimant is duty-bound to point out specific
facts that afford a basis for measuring whatever
compensatory damages are borne. A court cannot
merely rely on speculations, conjectures, or guesswork
as to the fact and amount of damages as well as
hearsay or uncorroborated testimony whose truth is
suspect. Such are the jurisprudential precepts that the
Court now applies in resolving the instant petition.
Facts: In the early morning of September 21, 1977,
the M/V Maria Efigenia XV, owned by private
respondent Maria Efigenia Fishing Corporation, was
navigating the waters near Fortune Island in Nasugbu,
Batangas on its way to Navotas, Metro Manila when it
collided with the vessel Petroparcel which at the time
was owned by the Luzon Stevedoring Corporation (LSC).
After investigation was conducted by the Board of
Marine Inquiry, Philippine Coast Guard Commandant
Simeon N. Alejandro rendered a decision finding
the Petroparcel at fault. Based on this finding by the
Board and after unsuccessful demands on
petitioner, private respondent sued the LSC and
the Petroparcel captain, Edgardo Doruelo, before the
then Court of First Instance of Caloocan City paying
thereto the docket fee of one thousand two hundred
fifty-two pesos (P1,252.00) and the legal research fee of
two pesos (P2.00). In particular, private respondent
prayed for an award of P692,680.00.
Meanwhile, during the pendency of the case, petitioner
PNOC Shipping and Transport Corporation sought to be
substituted in place of LSC as it had already acquired
ownership of the Petroparcel.
RTC rendered a decision against the defendant PNOC
Shipping & Transport Corporation, to pay the plaintiff
P6,438,048 value of the fishing boat with interest plus
CIVIL PROCEDURE CASE DIGESTS - 1
P50K attorney's fees and cost of suit. Likewise, the case
against defendant Edgardo Doruelo is hereby
DISMISSED, for lack of jurisdiction.
Aggrieved, petitioner filed a motion for the
reconsideration of the lower court's decision
contending that: (1) the lower court erred in holding it
liable for damages; that the lower court did not acquire
jurisdiction over the case by paying only P1,252.00 as
docket fee; (2) assuming that plaintiff was entitled to
damages, the lower court erred in awarding an amount
greater than that prayed for in the second amended
complaint; and (3) the lower court erred when it failed
to resolve the issues it had raised in its memorandum.
16 Petitioner likewise filed a supplemental motion for
reconsideration expounding on whether the lower court
acquired jurisdiction over the subject matter of the case
despite therein plaintiff's failure to pay the prescribed
docket fee.
On January 25, 1990, the lower court declined
reconsideration for lack of merit. Apparently not having
received the order denying its motion for
reconsideration, petitioner still filed a motion for leave
to file a reply to private respondent's opposition to said
motion. Hence, the lower court denied said motion for
leave to file a reply on the ground that by the issuance
of the order of January 25, 1990, said motion had
become moot and academic.
Unsatisfied with the lower court's decision, petitioner
elevated the matter to the Court of Appeals which,
however, affirmed the same in toto. Hence, the instant
recourse.
Issue: Whether or not the lower court did not acquire
jurisdiction over the amended complaint increasing the
amount of damages claimed to P600,000.00
Held: Yes. With respect to petitioner's contention that
the lower court did not acquire jurisdiction over the
amended complaint increasing the amount of damages
claimed to P600,000.00, we agree with the Court of
Appeals that the lower court acquired jurisdiction over
the case when private respondent paid the docket fee
corresponding to its claim in its original complaint. Its
failure to pay the docket fee corresponding to its
increased claim for damages under the amended
complaint should not be considered as having curtailed
the lower court's jurisdiction. Pursuant to the ruling
in Sun Insurance Office, Ltd. (SIOL) v. Asuncion, 55 the
unpaid docket fee should be considered as a lien on the
judgment even though private respondent specified the
amount of P600,000.00 as its claim for damages in its
amended complaint.
Moreover, we note that petitioner did not question at
all the jurisdiction of the lower court on the ground of
insufficient docket fees in its answers to both the
amended complaint and the second amended
complaint. It did so only in its motion for
reconsideration of the decision of the lower court after
it had received an adverse decision. As this Court held
in Pantranco North Express, Inc. v. Court of
Page 16 of 85

Appeals, participation in all stages of the case before
the trial court, that included invoking its authority in
asking for affirmative relief, effectively barred petitioner
by estoppel from challenging the court's jurisdiction.
Notably, from the time it filed its answer to the second
amended complaint on April 16, 1985, petitioner did
not question the lower court's jurisdiction. It was only
on December 29, 1989 when it filed its motion for
reconsideration of the lower court's decision that
petitioner raised the question of the lower court's lack
of jurisdiction. Petitioner thus foreclosed its right to
raise the issue of jurisdiction by its own inaction.
Q. G.R. No. 176339 January 10, 2011
DO-ALL METALS INDUSTRIES, INC., SPS. DOMINGO LIM
and LELY KUNG LIM, Petitioners, vs.
SECURITY BANK CORP., TITOLAIDO E. PAYONGAYONG,
EVYLENE C. SISON, PHIL. INDUSTRIAL SECURITY
AGENCY CORP. and GIL SILOS, Respondents.
Facts: From 1996 to 1997, Dragon Lady Industries, Inc.,
owned by petitioner spouses Domingo Lim and Lely
Kung Lim (the Lims) took out loans from respondent
Security Bank Corporation (the Bank) that totaled
₱92,454,776.45. Unable to pay the loans on time, the
Lims assigned some of their real properties to the Bank
to secure the same, including a building and the lot on
which it stands (the property), located at M. de Leon St.,
Santolan, Pasig City.
In 1998 the Bank offered to lease the property to the
Lims through petitioner Do-All Metals Industries, Inc.
(DMI) primarily for business although the Lims were to
use part of the property as their residence. DMI and the
Bank executed a two-year lease contract from October
1, 1998 to September 30, 2000 but the Bank retained
the right to pre-terminate the lease. The contract also
provided that, should the Bank decide to sell the
property, DMI shall have the right of first refusal.
On December 3, 1999, before the lease was up, the
Bank gave notice to DMI that it was pre-terminating the
lease on December 31, 1999. Wanting to exercise its
right of first refusal, DMI tried to negotiate with the
Bank the terms of its purchase. DMI offered to pay the
Bank ₱8 million for the property but the latter rejected
the offer, suggesting ₱15 million instead. DMI made a
second offer of ₱10 million but the Bank declined the
same.
While the negotiations were on going, the Lims claimed
that they continued to use the property in their
business. But the Bank posted at the place private
security guards from Philippine Industrial Security
Agency (PISA). The Lims also claimed that on several
occasions in 2000, the guards, on instructions of the
Bank representatives Titolaido Payongayong and
Evylene Sison, padlocked the entrances to the place and
barred the Lims as well as DMI’s employees from
entering the property. One of the guards even pointed
his gun at one employee and shots were fired. Because
of this, DMI was unable to close several projects and
CIVIL PROCEDURE CASE DIGESTS - 1
contracts with prospective clients. Further, the Lims
alleged that they were unable to retrieve assorted
furniture, equipment, and personal items left at the
property.
Lim- filed a complaint with RTC for damages
RTC- On September 30, 2004 the RTC rendered a
decision in favor of DMI and the Lims. It ordered the
Bank to pay the plaintiffs ₱27,974,564.00 as actual
damages, ₱500,000.00 as moral damages, ₱500,000 as
exemplary damages, and ₱100,000.00 as attorney’s
fees. But the court absolved defendants Payongayong,
Sison, Silos and PISA of any liability.
CA- found for the Bank
Issues:
1. Whether or not the RTC acquired jurisdiction to hear
and adjudicate plaintiff’s supplemental complaint
against the Bank considering their failure to pay the
filing fees on the amounts of damages they claim in it;
2. Whether or not the Bank is liable to DMI and the Lims
for the machineries, equipment, and other properties
they allegedly lost after they were barred from the
property.
Ruling:
1. On the issue of jurisdiction, respondent Bank argues
that plaintiffs’ failure to pay the filing fees on their
supplemental complaint is fatal to their action.
But what the plaintiffs failed to pay was merely the
filing fees for their Supplemental Complaint. The RTC
acquired jurisdiction over plaintiffs’ action from the
moment they filed their original complaint accompanied
by the payment of the filing fees due on the same. The
plaintiffs’ non-payment of the additional filing fees due
on their additional claims did not divest the RTC of the
jurisdiction it already had over the case.
2. Here, the supplemental complaint specified from the
beginning the actual damages that the plaintiffs sought
against the Bank. Still plaintiffs paid no filing fees on the
same. And, while petitioners claim that they were
willing to pay the additional fees, they gave no reason
for their omission nor offered to pay the same. They
merely said that they did not yet pay the fees because
the RTC had not assessed them for it. But a
supplemental complaint is like any complaint and the
rule is that the filing fees due on a complaint need to be
paid upon its filing.9 The rules do not require the court
to make special assessments in cases of supplemental
complaints.
To aggravate plaintiffs’ omission, although the Bank
brought up the question of their failure to pay
additional filing fees in its motion for reconsideration,
plaintiffs made no effort to make at least a late
payment before the case could be submitted for
decision, assuming of course that the prescription of
their action had not then set it in. Clearly, plaintiffs have
no excuse for their continuous failure to pay the fees
they owed the court. Consequently, the trial court
Page 17 of 85

should have treated their Supplemental Complaint as
not filed.
Plaintiffs of course point out that the Bank itself raised
the issue of non-payment of additional filing fees only
after the RTC had rendered its decision in the case. The
implication is that the Bank should be deemed to have
waived its objection to such omission. But it is not for a
party to the case or even for the trial court to waive the
payment of the additional filing fees due on the
supplemental complaint. Only the Supreme Court can
grant exemptions to the payment of the fees due the
courts and these exemptions are embodied in its rules.
R. G.R. No. 171092 March 15, 2010
EDNA DIAGO LHUILLIER, Petitioner, vs. BRITISH
AIRWAYS, Respondent.
Jurisdictio est potestas de publico introducta cum
necessitate juris dicendi. Jurisdiction is a power
introduced for the public good, on account of the
necessity of dispensing justice.
Facts: On April 28, 2005, petitioner Edna Diago Lhuillier
filed a Complaint2 for damages against respondent
British Airways before the Regional Trial Court (RTC) of
Makati City. She alleged that on February 28, 2005, she
took respondent’s flight 548 from London, United
Kingdom to Rome, Italy. Once on board, she allegedly
requested Julian Halliday (Halliday), one of the
respondent’s flight attendants, to assist her in placing
her hand-carried luggage in the overhead bin. However,
Halliday allegedly refused to help and assist her, and
even sarcastically remarked that "If I were to help all
300 passengers in this flight, I would have a broken
back!"
Petitioner further alleged that when the plane was
about to land in Rome, Italy, another flight attendant,
Nickolas Kerrigan (Kerrigan), singled her out from
among all the passengers in the business class section
to lecture on plane safety. Allegedly, Kerrigan made her
appear to the other passengers to be ignorant,
uneducated, stupid, and in need of lecturing on the
safety rules and regulations of the plane. Affronted,
petitioner assured Kerrigan that she knew the plane’s
safety regulations being a frequent traveler. Thereupon,
Kerrigan allegedly thrust his face a mere few
centimeters away from that of the petitioner and
menacingly told her that "We don’t like your attitude."
Upon arrival in Rome, petitioner complained to
respondent’s ground manager and demanded an
apology. However, the latter declared that the flight
stewards were "only doing their job."
Thus, petitioner filed the complaint for damages.
On May 30, 2005, respondent, by way of special
appearance through counsel, filed a Motion to Dismiss4
on grounds of lack of jurisdiction over the case and over
the person of the respondent. Respondent alleged that
only the courts of London, United Kingdom or Rome,
CIVIL PROCEDURE CASE DIGESTS - 1
Italy, have jurisdiction over the complaint for damages
pursuant to the Warsaw Convention,5 Article 28(1) of
which provides:
An action for damages must be brought at the option of
the plaintiff, either before the court of domicile of the
carrier or his principal place of business, or where he
has a place of business through which the contract has
been made, or before the court of the place of
destination.
Thus, since a) respondent is domiciled in London; b)
respondent’s principal place of business is in London; c)
petitioner bought her ticket in Italy (through Jeepney
Travel S.A.S, in Rome);6 and d) Rome, Italy is petitioner’s
place of destination, then it follows that the complaint
should only be filed in the proper courts of London,
United Kingdom or Rome, Italy.
Likewise, it was alleged that the case must be dismissed
for lack of jurisdiction over the person of the
respondent because the summons was erroneously
served on Euro-Philippine Airline Services, Inc. which is
not its resident agent in the Philippines.
RTC- On October 14, 2005, the RTC of Makati City,
Branch 132, issued an Order10 granting respondent’s
Motion to Dismiss. It ruled that:
xxxxxSince the Philippines is not the place of domicile of
the defendant nor is it the principal place of business,
our courts are thus divested of jurisdiction over cases
for damages. Neither was plaintiff’s ticket issued in this
country nor was her destination Manila but Rome in
Italy. It bears stressing however, that referral to the
court of proper jurisdiction does not constitute
constructive denial of plaintiff’s right to have access to
our courts since the Warsaw Convention itself provided
for jurisdiction over cases arising from international
transportation. Said treaty stipulations must be
complied with in good faith following the time honored
principle of pacta sunt servanda.
MFR- denied
Petitioner now comes directly before us on a Petition
for Review on Certiorari on pure questions of law,
raising the following issues:
IssueS:
1. WON RTC has jurisdiction? NO
2. WON respondent air carrier of passengers, in filing its
motion to dismiss based on lack of jurisdiction over the
subject matter of the case and over its person may be
deemed as having in fact and in law submitted itself to
the jurisdiction of the lower court, especially so, when
the very lawyer arguing for it is himself the resident
agent of the carrier? NO
Ruling:
1. The Warsaw Convention has the force and effect of
law in this country. Article 1 of the Warsaw Convention
provides:
1. This Convention applies to all international
carriage of persons, luggage or goods
Page 18 of 85

performed by aircraft for reward. It applies
equally to gratuitous carriage by aircraft
performed by an air transport undertaking.
2. For the purposes of this Convention the
expression "international carriage" means any
carriage in which, according to the contract
made by the parties, the place of departure and
the place of destination, whether or not there
be a break in the carriage or a transhipment,
are situated either within the territories of two
High Contracting Parties, or within the territory
of a single High Contracting Party, if there is an
agreed stopping place within a territory subject
to the sovereignty, suzerainty, mandate or
authority of another Power, even though that
Power is not a party to this Convention. A
carriage without such an agreed stopping place
between territories subject to the sovereignty,
suzerainty, mandate or authority of the same
High Contracting Party is not deemed to be
international for the purposes of this
Convention.
Thus, when the place of departure and the place of
destination in a contract of carriage are situated within
the territories of two High Contracting Parties, said
carriage is deemed an "international carriage". The High
Contracting Parties referred to herein were the
signatories to the Warsaw Convention and those which
subsequently adhered to it.
In the case at bench, petitioner’s place of departure was
London, United Kingdom while her place of destination
was Rome, Italy.15 Both the United Kingdom16 and Italy17
signed and ratified the Warsaw Convention. As such,
the transport of the petitioner is deemed to be an
"international carriage" within the contemplation of the
Warsaw Convention.
Since the Warsaw Convention applies in the instant
case, then the jurisdiction over the subject matter of
the action is governed by the provisions of the Warsaw
Convention.
Under Article 28(1) of the Warsaw Convention, the
plaintiff may bring the action for damages before –
1. the court where the carrier is domiciled;
2. the court where the carrier has its principal
place of business;
3. the court where the carrier has an
establishment by which the contract has been
made; or
4. the court of the place of destination.
In this case, it is not disputed that respondent is a
British corporation domiciled in London, United
Kingdom with London as its principal place of business.
Hence, under the first and second jurisdictional rules,
the petitioner may bring her case before the courts of
London in the United Kingdom. In the passenger ticket
and baggage check presented by both the petitioner
and respondent, it appears that the ticket was issued in
CIVIL PROCEDURE CASE DIGESTS - 1
Rome, Italy. Consequently, under the third jurisdictional
rule, the petitioner has the option to bring her case
before the courts of Rome in Italy. Finally, both the
petitioner and respondent aver that the place of
destination is Rome, Italy, which is properly designated
given the routing presented in the said passenger ticket
and baggage check. Accordingly, petitioner may bring
her action before the courts of Rome, Italy. We thus
find that the RTC of Makati correctly ruled that it does
not have jurisdiction over the case filed by the
petitioner.
2. Special Appearance to Question a Court’s Jurisdiction
Is Not Voluntary Appearance
The second sentence of Sec. 20, Rule 14 of the Revised
Rules of Civil Procedure clearly provides:
Sec. 20. Voluntary appearance. – The defendant’s
voluntary appearance in the action shall be equivalent
to service of summons. The inclusion in a motion to
dismiss of other grounds aside from lack of jurisdiction
over the person of the defendant shall not be deemed a
voluntary appearance.
Thus, a defendant who files a motion to dismiss,
assailing the jurisdiction of the court over his person,
together with other grounds raised therein, is not
deemed to have appeared voluntarily before the court.
What the rule on voluntary appearance – the first
sentence of the above-quoted rule – means is that the
voluntary appearance of the defendant in court is
without qualification, in which case he is deemed to
have waived his defense of lack of jurisdiction over his
person due to improper service of summons.
The pleadings filed by petitioner in the subject
forfeiture cases, however, do not show that she
voluntarily appeared without qualification. Petitioner
filed the following pleadings in Forfeiture I: (a) motion
to dismiss; (b) motion for reconsideration and/or to
admit answer; (c) second motion for reconsideration;
(d) motion to consolidate forfeiture case with plunder
case; and (e) motion to dismiss and/or to quash
Forfeiture I. And in Forfeiture II: (a) motion to dismiss
and/or to quash Forfeiture II; and (b) motion for partial
reconsideration.
The foregoing pleadings, particularly the motions to
dismiss, were filed by petitioner solely for special
appearance with the purpose of challenging the
jurisdiction of the SB over her person and that of her
three children. Petitioner asserts therein that SB did not
acquire jurisdiction over her person and of her three
children for lack of valid service of summons through
improvident substituted service of summons in both
Forfeiture I and Forfeiture II. This stance the petitioner
never abandoned when she filed her motions for
reconsideration, even with a prayer to admit their
attached Answer Ex Abundante Ad Cautelam dated
January 22, 2005 setting forth affirmative defenses with
a claim for damages. And the other subsequent
pleadings, likewise, did not abandon her stance and
Page 19 of 85

defense of lack of jurisdiction due to improper
substituted services of summons in the forfeiture cases.
Evidently, from the foregoing Sec. 20, Rule 14 of the
1997 Revised Rules on Civil Procedure, petitioner and
her sons did not voluntarily appear before the SB
constitutive of or equivalent to service of summons.
In this case, the special appearance of the counsel of
respondent in filing the Motion to Dismiss and other
pleadings before the trial court cannot be deemed to be
voluntary submission to the jurisdiction of the said trial
court. We hence disagree with the contention of the
petitioner and rule that there was no voluntary
appearance before the trial court that could constitute
estoppel or a waiver of respondent’s objection to
jurisdiction over its person.
S. G.R. No. 146593 October 26, 2001
UNITED COCONUT PLANTERS BANK, petitioner, vs.
ROBERTO V. ONGPIN, respondent.
Facts: On November 17, 1994, Philippine Apparel, Inc.
(PAI) entered into a credit agreement with petitioner
United Coconut Planters Bank for a case-to-case credit
line in the amount of US$500,000.00. Respondent
Roberto V. Ongpin, then controlling stockholder of PAI,
signed as surety, binding himself jointly and severally
liable with PAI for the same amount. PAI availed of the
credit line by drawing on short-term loans and opening
letters of credit for the importation of goods, which
amounted to US$650,986.34 or P16,526,653.00.
As PAI failed to pay its obligations, petitioner filed a
complaint against respondent Ongpin with the Regional
Trial Court, Branch 133, Makati to enforce his obligation
as surety of PAI. Petitioner sought the issuance of a writ
of preliminary attachment on the following grounds: (1)
respondent, in fraud of creditors, had transferred
residence to Hongkong; (2) his obligation was not
covered by any collateral; and (3) PAI and its officers,
including respondent, with intent to defraud, did not
disclose the fact that the Bureau of Customs had claims
against PAI for unpaid customs duties and taxes in the
amount of P284,010,387.00, which fact could have
affected petitioner's decision whether to grant the loan
to PAI.
On November 10, 1995, the trial court issued an order
granting petitioner's prayer for the issuance of a writ of
preliminary attachment. On November 16, 1995, a writ
of attachment and a notice of garnishment were issued
by the trial court, addressed to the president and
corporate secretary of the Dominion Asian Equities
garnishing 8,315,600 shares of stock belonging to
respondent.
On November 21, 1995, respondent, making a special
appearance through counsel, moved to dismiss the
complaint and to quash the writ of attachment and
garnishment on the ground that the trial court had no
jurisdiction over the person of respondent, the
summons prepared on October 30, 1995 having been
unserved as of November 17, 1995. The trial court
CIVIL PROCEDURE CASE DIGESTS - 1
denied the urgent motion as well as respondent's
subsequent motion for reconsideration.
On May 24, 1996, respondent filed a petition for
certiorari in the Court of Appeals assailing the orders of
the trial court. During the pendency of the petition, on
May 27, 1996, petitioner filed with the trial court a
Motion for Leave to Serve Summons Through
Publication. Its motion was granted, but the publication
was held in abeyance on October 2, 1996. On the same
date, petitioner entered into an agreement with TODAY
for the publication of the summons on October 4, 11,
and 18, 1996. Petitioner received the trial court's order
at the close of office hours on October 3, 1996.
Attempts to prevent the publication by requesting the
trial court through telephone to inform the newspaper
publisher of its order and informing the newspaper
itself of the same proved futile, as nobody in the court
was contacted by petitioner while the telephone lines of
the newspaper were busy. As a result, TODAY published
the summons on October 4, 1996. It was only on
October 8, 1996 that petitioner was able to inform the
newspaper of the October 2, 1996 order and to request
the latter to hold in abeyance further publication of the
summons.
CA- the issuance of a Writ of Attachment together with
the Notice of Garnishment is hereby validated: but the
implementation of the Writ of Attachment/
Garnishment is prohibited until after the Court shall
have acquired jurisdiction over the person of the
petitioner, either through voluntary appearance or
service of summons.
CA-MFR-denied
On August 1, 1997, petitioner filed a petition for
certiorari (denied in aug 27, ‘97) with this Court. Again,
during the pendency of the case, petitioner filed with
the trial court on August 15, 1997 another Motion to
Serve Summons through Publication with Leave of
Court.
On November 27, 1997, Deputy Sheriff Glenn B. Parra,
together with Atty. Rodulfo Baculi, Jr., representative of
petitioner, went to the PILTEL office at the Banker's
Center Building, Ayala Avenue, Makati City to serve
summons on respondent, who was then the chairman
of the board of PILTEL.
There, he met for the first time Anne V. Morallo, who
told him that she was authorized to receive court
processes for and on behalf of respondent even though
the latter was not holding office in the building. Morallo
was so advised by Atty. Joseph Santiago, Chief of the
Legal Department of PILTEL. Thus, Sheriff Parra served
the summons on Morallo who received it accordingly.
However, when Morallo tried to forward the court
process to respondent, the latter's lawyer, Atty. David S.
Narvasa, refused to receive it.
On December 4, 1997, respondent filed with the trial
court an Urgent Omnibus Motion: (a) to Dismiss; (b) for
Page 20 of 85

Prohibition of the Implementation of the Writ of
Attachment dated 16 November 1995; (c) for Quashal
of the Notice of Garnishment dated 27 November 1997;
and (d) for Release of Properties attached thereby. On
April 19, 1999, the trial court denied respondent's
motion for lack of merit. Respondent's motion for
reconsideration was likewise denied on October 13,
1999.
Consequently, respondent filed a petition for certiorari
with application for a Temporary Restraining Order and
Writ of Preliminary Injunction in the Court of Appeals.
The Court of Appeals promulgated its decision on
December 27, 2000, annulling and setting aside the
orders of the trial court, dated April 19, 1999 and
October 13, 1999, on the ground that PILTEL was not
the regular place of business of respondent and that,
even if it was, Morallo could not be considered a
competent person in charge of respondent's office, as
she was the executive secretary of the president of
PILTEL and not of respondent. Hence, this petition for
review under Rule 45 of the Revised Rules of Civil
Procedure.
Issues:
1. Whether or not respondent Ongpin's continuous
"special appearances" before the court for five years
may be deemed voluntary appearance as contemplated
by the Revised Rules on Civil Procedure on acquisition of
jurisdiction over the person of defendant; and
2. Whether or not the substituted service of summons
on Anne V. Morallo, executive secretary of the
president of PILTEL, was valid.
Ruling:
1. Petitioner maintains that the trial court had already
acquired jurisdiction over the person of respondent
Ongpin by virtue of the numerous appearances by his
counsel and respondent's undeniable knowledge of the
complaint against him.
This contention has no merit. A party who makes a
special appearance in court challenging the jurisdiction
of said court based on the ground, e. g., invalidity of the
service of summons, cannot be considered to have
submitted himself to the jurisdiction of the court.11 In
fact, in La Naval Drug Corp. vs. Court of Appeals,12 this
Court ruled that even the assertion of affirmative
defenses aside from lack of jurisdiction over the person
of the defendant cannot be considered a waiver of the
defense of lack of jurisdiction over such person.
In the present case, although respondent had indeed
filed numerous pleadings, these pleadings were
precisely for the purpose of contesting the jurisdiction
of the court over the person of respondent on the
ground that there was no valid service of summons on
him. It would be absurd to hold that respondent, by
making such appearance, thereby submitted himself to
the jurisdiction of the court.
CIVIL PROCEDURE CASE DIGESTS - 1
Petitioner cites the ruling in Macapagal v. Court of
Appeals13 for its contention that the "feigned
unawareness" of a defendant is equivalent to voluntary
appearance. The facts of Macapagal are, however,
different from the facts of this case. In that case, this
Court considered the petitioner to have been validly
served summons based on its findings that summons
was served on the legal counsel of the two corporations
and its officers and directors. Petitioner's defense that
at the time of the service of summons he was no longer
connected with both corporations, having resigned from
them before such service, was dismissed by this Court
as flimsy. The finding of this Court on the feigned
unawareness of petitioner was based on the fact that
Philfinance's woes were widely publicized. This,
together with counsel's authority to receive service of
summons on behalf of petitioner, was the basis for this
Court's ruling that jurisdiction over the person of the
latter had already been acquired by the trial court.
In contrast, summons in this case was served on the
executive secretary of the president of PILTEL, a
company which is not a party to the present action.
Respondent Ongpin, through counsel, entered
"numerous special appearances" in court precisely to
question the court's jurisdiction over his person either
due to failure to serve summons or to an invalid service
of summons on him. Jurisdiction cannot be acquired
over the person of respondent even if he knows of the
case against him unless he is validly served with
summons.
2. Petitioner contends that the Court of Appeals erred in
ruling that (1) substituted service of summons at the
PILTEL office where respondent sits as chairman of the
board is invalid as the PILTEL office is not his regular
place of business; and (2) Anne V. Morallo, the
executive secretary of PILTEL's president, was not
authorized to receive the summons on behalf of
respondent Ongpin as she was not his executive
secretary but that of the president's.
We think no error was incurred by the Court of Appeals
in this ruling. Rule 14, §7 of the 1997 Revised Rules of
Civil Procedure provides that if, for justifiable causes,
personal service cannot be effected on defendant,
service may be effected (a) by leaving copies of the
summons at the defendant's residence with some
person of suitable age and discretion residing therein,
or (b) by leaving the copies at defendant's office or
regular place of business with some competent person
in charge thereof.15 The word "office" or the phrase
"regular place of business" refers to the office or place
of business of the defendant at the time of service. The
rule specifically designates the persons to whom copies
of the process should be left. In Mapa vs. Court of
Appeals,16 substituted service of summons in a person
claiming to be authorized to receive service of summons
in behalf of the corporation was held to be invalid as far
as jurisdiction over the person of the chairman of the
board was concerned inasmuch as he was not holding
office in the corporation but in his residence. Thus, it
Page 21 of 85

does not necessarily follow that the regular place of
business of a chairman of the board of directors is the
same as the address of the corporation as it is possible
for him to hold office elsewhere.
In the case at bar, the corporation (PILTEL), where
substituted summons was served and of which
respondent was the chairman of the board, was not
even a party to the present suit. Respondent was sued
in his personal capacity as surety for PAI. Even from the
initial inquiries made by the sheriff and petitioner's
representative in the office of PILTEL, it was evident
that respondent was not holding office there. Indeed,
Morallo, executive secretary of the PILTEL, had to call
respondent's secretary at the BA Lepanto Building,
Paseo de Roxas, to find out whether he was attending
the board meeting to be held on that day. Thus, the
process server already knew that respondent was not
holding office at the PILTEL office but somewhere else.
As the PILTEL office is not respondent's regular place of
business, it cannot therefore be said that Anne V.
Morallo, the person who received the service of
summons in behalf of respondent, was authorized to
receive service of process on behalf of respondent.
(3) It is not clear whether respondent could be
personally served with summons because he had
transferred residence to Hongkong. Thus in its
complaint, petitioner alleged that respondent's address
was either at ATA Capital Corporation, 3404 1 Exchange
Square, #8 Connaught Place, Central Hongkong or South
China Morning, Post Center #22 Tai Fat Street, Taipo
Industrial Estate, Taipo, New Territories, Hongkong. But
later, it tried to personally serve summons on
respondent at the PILTEL office, where he served as
chairman of the board of directors. When respondent
failed to attend the meeting, the process server
proceeded to the BA Lepanto Building, Paseo de Roxas,
Makati City, where, as the process server learned from
Morallo, respondent was allegedly holding office.
Under the Rules, if a defendant is a non-resident and his
property in the Philippines had been attached, service
may, by leave of court, be effected outside the
Philippines or by publication in a newspaper of general
circulation.17In the same manner, if the whereabouts of
the defendant is unknown and cannot be ascertained by
diligent inquiry, service may, by leave of court, likewise
be effected by publication in a newspaper of general
circulation.18 In this case, the plaintiff must show that
the address of defendant is unknown and cannot be
ascertained by diligent inquiry.
It is clear that petitioner is not without remedy under
the Revised Rules of Civil Procedure to enforce the writ
of attachment through a valid service of summons. If,
indeed, respondent is no longer a resident of the
Philippines, petitioner still can, by leave of court, serve
summons by publication, as it in fact tried to do. The
records show that petitioner attempted to serve
summons by publication, but later abandoned its effort
CIVIL PROCEDURE CASE DIGESTS - 1
and for some reason attempted personal service
instead.
If, on the other hand, respondent is a resident and
petitioner cannot determine the correct address of
respondent, petitioner only needs to show that
respondent's address is unknown and cannot be
ascertained by diligent inquiry. Upon compliance with
this requirement, it can validly serve summons by
publication in a newspaper of general circulation.
Petitioner cannot fall back on allegations of knowledge
of respondent to avoid complying with the standards
and guidelines set by the Rules. What we said in Oñate
v. Abrogar20 bears repeating in this case:
. . . More important than the need for insuring
success in the enforcement of the writ is the
need for affirming a principle on that "most
fundamental of all requisites — the jurisdiction
of the court issuing attachment over the person
of the defendant." It may be that the same
result would follow from requiring that a new
writ be served all over again. The symbolic
significance of such an act, however, is that it
would affirm our commitment to the rule of
law.
T. G.R. No. 164703 May 4, 2010
ALLAN C. GO, doing business under the name and style
"ACG Express Liner," Petitioner, vs.
MORTIMER F. CORDERO, Respondent.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 164747
MORTIMER F. CORDERO, Petitioner, vs.
ALLAN C. GO, doing business under the name and style
"ACG Express Liner," FELIPE M. LANDICHO and
VINCENT D. TECSON, Respondents.
Facts: Sometime in 1996, Mortimer F. Cordero, Vice-
President of Pamana Marketing Corporation (Pamana),
ventured into the business of marketing inter-island
passenger vessels. After contacting various overseas
fast ferry manufacturers from all over the world, he
came to meet Tony Robinson, an Australian national
based in Brisbane, Australia, who is the Managing
Director of Aluminium Fast Ferries Australia (AFFA).
Between June and August 1997, Robinson signed
documents appointing Cordero as the exclusive
distributor of AFFA catamaran and other fast ferry
vessels in the Philippines. As such exclusive distributor,
Cordero offered for sale to prospective buyers the 25-
meter Aluminium Passenger catamaran known as the
SEACAT 25.
However, Cordero later discovered that Go was dealing
directly with Robinson when he was informed by Dennis
Padua of Wartsila Philippines that Go was canvassing for
a second catamaran engine from their company which
provided the ship engine for the first SEACAT 25.
In a handwritten letter dated June 24, 1998, Cordero
informed Go that such act of dealing directly with
Robinson violated his exclusive distributorship and
Page 22 of 85

demanded that they respect the same, without
prejudice to legal action against him and Robinson
should they fail to heed the same.8 Cordero’s lawyer,
Atty. Ernesto A. Tabujara, Jr. of ACCRA law firm, also
wrote ACG Express Liner assailing the fraudulent
actuations and misrepresentations committed by Go in
connivance with his lawyers (Landicho and Tecson) in
breach of Cordero’s exclusive distributorship
appointment.
Cordero then filed a complaint with the Bureau of
Customs (BOC) to prohibit the entry of SEACAT 25 from
Australia based on misdeclaration and undervaluation.
Consequently, an Alert Order was issued by Acting BOC
Commissioner Nelson Tan for the vessel which in fact
arrived on July 17, 1998. Cordero claimed that Go and
Robinson had conspired to undervalue the vessel by
around US$500,000.00.
On August 21, 1998, Cordero instituted Civil Case No.
98-35332 seeking to hold Robinson, Go, Tecson and
Landicho liable jointly and solidarily for conniving and
conspiring together in violating his exclusive
distributorship in bad faith and wanton disregard of his
rights, thus depriving him of his due commissions
(balance of unpaid commission from the sale of the first
vessel in the amount of US$31,522.01 and unpaid
commission for the sale of the second vessel in the
amount of US$328,742.00) and causing him actual,
moral and exemplary damages, including ₱800,000.00
representing expenses for airplane travel to Australia,
telecommunications bills and entertainment, on
account of AFFA’s untimely cancellation of the exclusive
distributorship agreement. Cordero also prayed for the
award of moral and exemplary damages, as well as
attorney’s fees and litigation expenses.
RTC- Robinson filed a motion to dismiss grounded on
lack of jurisdiction over his person and failure to state a
cause of action, asserting that there was no act
committed in violation of the distributorship
agreement.
Cordero no longer had cause of action for his
commission for the sale of the second vessel under the
memorandum of agreement dated August 7, 1997
considering the termination of his authority by AFFA’s
lawyers on June 26, 1998.
On May 31, 2000, the trial court rendered its decision in
favor of Plaintiff and against defendants Allan C. Go,
Tony Robinson, Felipe Landicho, and Vincent Tecson.
CA- affirmed the trial court (1) in allowing Cordero to
present his evidence ex-parte after the unjustified
failure of appellants (Go, Tecson and Landicho) to
appear at the pre-trial conference despite due notice;
(2) in finding that it was Cordero and not Pamana who
was appointed by AFFA as the exclusive distributor in
the Philippines of its SEACAT 25 and other fast ferry
vessels, which is not limited to the sale of one (1) such
catamaran to Go on August 7, 1997; and (3) in finding
CIVIL PROCEDURE CASE DIGESTS - 1
that Cordero is entitled to a commission per vessel sold
for AFFA through his efforts in the amount equivalent to
22.43% of the price of each vessel or US$328,742.00,
and with payments of US$297,219.91 having been
made to Cordero, there remained a balance of
US$31,522.09 still due to him. The CA sustained the trial
court in ruling that Cordero is entitled to damages for
the breach of his exclusive distributorship agreement
with AFFA. However, it held that Cordero is entitled only
to commission for the sale of the first catamaran
obtained through his efforts with the remaining unpaid
sum of US$31,522.09 or ₱1,355,449.90 (on the basis of
US$1.00=₱43.00 rate) with interest at 6% per annum
from the time of the filing of the complaint until the
same is fully paid. As to the ₱800,000.00 representing
expenses incurred by Cordero for transportation, phone
bills, entertainment, food and lodging, the CA declared
there was no basis for such award, the same being the
logical and necessary consequences of the exclusive
distributorship agreement which are normal in the field
of sales and distribution, and the expenditures having
redounded to the benefit of the distributor (Cordero).
Issue: Whether petitioner cordero has the legal
personality to sue the respondents for breach of
contract? (did the court have jurisdiction? YES)
Ruling:
I. Real Party-in-Interest
First, on the issue of whether the case had been filed by
the real party-in-interest as required by Section 2, Rule
3 of the Rules of Court, which defines such party as the
one (1) to be benefited or injured by the judgment in
the suit, or the party entitled to the avails of the suit.
The purposes of this provision are: 1) to prevent the
prosecution of actions by persons without any right,
title or interest in the case; 2) to require that the actual
party entitled to legal relief be the one to prosecute the
action; 3) to avoid a multiplicity of suits; and 4) to
discourage litigation and keep it within certain bounds,
pursuant to sound public policy.31 A case is dismissible
for lack of personality to sue upon proof that the
plaintiff is not the real party-in-interest, hence
grounded on failure to state a cause of action.
On this issue, we agree with the CA in ruling that it was
Cordero and not Pamana who is the exclusive
distributor of AFFA in the Philippines. For all intents and
purposes, Robinson and AFFA dealt only with Cordero
who alone made decisions in the performance of the
exclusive distributorship, as with other clients to whom
he had similarly offered AFFA’s fast ferry vessels.
Moreover, the stipulated commissions from each
progress payments made by Go were directly paid by
Robinson to Cordero.37 Respondents Landicho and
Tecson were only too aware of Cordero’s authority as
the person who was appointed and acted as exclusive
distributor of AFFA, which can be gleaned from their act
of immediately furnishing him with copies of bank
transmittals everytime Go remits payment to Robinson,
who in turn transfers a portion of funds received to the
bank account of Cordero in the Philippines as his
Page 23 of 85

commission. Out of these partial payments of his
commission, Cordero would still give Landicho and
Tecson their respective "commission," or "cuts" from his
own commission. Respondents Landicho and Tecson
failed to refute the evidence submitted by Cordero
consisting of receipts signed by them. Said amounts
were apart from the earlier expenses shouldered by
Cordero for Landicho’s airline tickets, transportation,
food and hotel accommodations for the trip to
Australia.
Courts acquire jurisdiction over the plaintiffs upon the
filing of the complaint, while jurisdiction over the
defendants in a civil case is acquired either through the
service of summons upon them in the manner required
by law or through their voluntary appearance in court
and their submission to its authority.42 A party who
makes a special appearance in court challenging the
jurisdiction of said court based on the ground of invalid
service of summons is not deemed to have submitted
himself to the jurisdiction of the court.
In this case, however, although the Motion to Dismiss
filed by Robinson specifically stated as one (1) of the
grounds the lack of "personal jurisdiction," it must be
noted that he had earlier filed a Motion for Time to file
an appropriate responsive pleading even beyond the
time provided in the summons by publication.44 Such
motion did not state that it was a conditional
appearance entered to question the regularity of the
service of summons, but an appearance submitting to
the jurisdiction of the court by acknowledging the
summons by publication issued by the court and praying
for additional time to file a responsive pleading.
Consequently, Robinson having acknowledged the
summons by publication and also having invoked the
jurisdiction of the trial court to secure affirmative relief
in his motion for additional time, he effectively
submitted voluntarily to the trial court’s jurisdiction. He
is now estopped from asserting otherwise, even before
this Court.
U. G.R. No. 182729 September 29, 2010
KUKAN INTERNATIONAL CORPORATION, Petitioner, vs.
HON. AMOR REYES, in her capacity as Presiding Judge
of the Regional Trial Court of Manila, Branch 21, and
ROMEO M. MORALES, doing business under the name
and style "RM Morales Trophies and
Plaques,"Respondents.
Facts: Sometime in March 1998, Kukan, Inc. conducted
a bidding for the supply and installation of signages in a
building being constructed in Makati City. Morales
tendered the winning bid and was awarded the PhP 5
million contract. Some of the items in the project award
were later excluded resulting in the corresponding
reduction of the contract price to PhP 3,388,502.
Despite his compliance with his contractual
undertakings, Morales was only paid the amount of PhP
1,976,371.07, leaving a balance of PhP 1,412,130.93,
which Kukan, Inc. refused to pay despite demands.
Shortchanged, Morales filed a Complaint6 with the RTC
CIVIL PROCEDURE CASE DIGESTS - 1
against Kukan, Inc. for a sum of money, the case
docketed as Civil Case No. 99-93173 and eventually
raffled to Branch 17 of the court.
Following the joinder of issues after Kukan, Inc. filed an
answer with counterclaim, trial ensued. However,
starting November 2000, Kukan, Inc. no longer
appeared and participated in the proceedings before
the trial court, prompting the RTC to declare Kukan, Inc.
in default and paving the way for Morales to present his
evidence ex parte.
On November 28, 2002, the RTC rendered a Decision
finding for Morales and against Kukan.
After the above decision became final and executory,
Morales moved for and secured a writ of execution8
against Kukan, Inc. The sheriff then levied upon various
personal properties. Kukan International Corporation
(KIC) filed an Affidavit of Third-Party Claim. Notably, KIC
was incorporated in August 2000, or shortly after
Kukan, Inc. had stopped participating in Civil Case No.
99-93173.
In reaction to the third party claim, Morales interposed
an Omnibus Motion dated April 30, 2003. In it, Morales
prayed, applying the principle of piercing the veil of
corporate fiction, that an order be issued for the
satisfaction of the judgment debt of Kukan, Inc. with the
properties under the name or in the possession of KIC, it
being alleged that both corporations are but one and
the same entity. KIC opposed Morales’ motion. By Order
of May 29, 20039as reiterated in a subsequent order,
the court denied the omnibus motion.
Morales then sought the inhibition of the presiding
judge, Eduardo B. Peralta, Jr., who eventually granted
the motion. The case was re-raffled to Branch 21,
presided by public respondent Judge Amor Reyes.
Before the Manila RTC, Branch 21, Morales filed a
Motion to Pierce the Veil of Corporate Fiction to declare
KIC as having no existence separate from Kukan, Inc.
This time around, the RTC, by Order dated March 12,
2007, granted the motion.
CA- affirmed
Issue: WON it was proper for RTC to assume jurisdiction
over KIC?
Ruling:
Propriety of the RTC Assuming Jurisdiction over KIC
Orion Security Corporation v. Kalfam Enterprises, Inc.23
explains how courts acquire jurisdiction over the parties
in a civil case:
Courts acquire jurisdiction over the plaintiffs upon the
filing of the complaint. On the other hand, jurisdiction
over the defendants in a civil case is acquired either
through the service of summons upon them or through
their voluntary appearance in court and their
submission to its authority.
Page 24 of 85

In the fairly recent Palma v. Galvez,24 the Court
reiterated its holding in Orion Security Corporation,
stating: "[I]n civil cases, the trial court acquires
jurisdiction over the person of the defendant either by
the service of summons or by the latter’s voluntary
appearance and submission to the authority of the
former."
The court’s jurisdiction over a party-defendant resulting
from his voluntary submission to its authority is
provided under Sec. 20, Rule 14 of the Rules, which
states:
Section 20. Voluntary appearance. – The defendant’s
voluntary appearance in the actions shall be equivalent
to service of summons. The inclusion in a motion to
dismiss of other grounds aside from lack of jurisdiction
over the person of the defendant shall not be deemed a
voluntary appearance.
To be sure, the CA’s ruling that any form of appearance
by the party or its counsel is deemed as voluntary
appearance finds support in the kindred Republic v. Ker
& Co., Ltd.25 and De Midgely v. Ferandos.
Republic and De Midgely, however, have already been
modified if not altogether superseded27 by La Naval
Drug Corporation v. Court of Appeals,28 wherein the
Court essentially ruled and elucidated on the current
view in our jurisdiction, to wit: "[A] special appearance
before the court––challenging its jurisdiction over the
person through a motion to dismiss even if the movant
invokes other grounds––is not tantamount to estoppel
or a waiver by the movant of his objection to
jurisdiction over his person; and such is not constitutive
of a voluntary submission to the jurisdiction of the
court."
In the instant case, KIC was not made a party-defendant
in Civil Case No. 99-93173. Even if it is conceded that it
raised affirmative defenses through its aforementioned
pleadings, KIC never abandoned its challenge, however
implicit, to the RTC’s jurisdiction over its person. The
challenge was subsumed in KIC’s primary assertion that
it was not the same entity as Kukan, Inc. Pertinently, in
its Comment and Opposition to Plaintiff’s Omnibus
Motion dated May 20, 2003, KIC entered its "special but
not voluntary appearance" alleging therein that it was a
different entity and has a separate legal personality
from Kukan, Inc. And KIC would consistently reiterate
this assertion in all its pleadings, thus effectively
resisting all along the RTC’s jurisdiction of its person. It
cannot be overemphasized that KIC could not file before
the RTC a motion to dismiss and its attachments in Civil
Case No. 99-93173, precisely because KIC was neither
impleaded nor served with summons. Consequently, KIC
could only assert and claim through its affidavits,
comments, and motions filed by special appearance
before the RTC that it is separate and distinct from
Kukan, Inc.
Following La Naval Drug Corporation,30 KIC cannot be
deemed to have waived its objection to the court’s lack
CIVIL PROCEDURE CASE DIGESTS - 1
of jurisdiction over its person. It would defy logic to say
that KIC unequivocally submitted itself to the
jurisdiction of the RTC when it strongly asserted that it
and Kukan, Inc. are different entities. In the scheme of
things obtaining, KIC had no other option but to insist
on its separate identity and plead for relief consistent
with that position.
V. G.R. No. 178911 September 17, 2014
EDUARDO D. MONSANTO, DECOROSO D. MONSANTO,
SR., and REV. FR. PASCUAL D. MONSANTO,
JR.,Petitioners, vs. LEONCIO LIM and LORENZO DE
GUZMAN, Respondents.
"Filing the appropriate initiatory pleading and the
payment of the prescribed docket fees vest a trial court
with jurisdiction over the subject matter."
Facts: In a letter6 dated February 18, 2004, Flordelis B.
Menzon, Regional Director of the Home Development
Mutual Fund (Pag-IBIG), requested the intervention of
Executive Judge Sinforiano A. Monsanto (Executive
Judge Monsanto) of the Regional Trial Court (RTC) of
Catbalogan, Samar on the alleged anomalous auction
sale conducted by Sheriff IVLorenzo De Guzman (De
Guzman). According to Pag-IBIG, De Guzman previously
acceded to its request to move the date of the auction
sale to January 20, 2004; however, to its surprise, the
sale proceeded as originally scheduled on January 15,
2004. Pag-IBIG also claimed that the winning bid of
Leoncio Lim (Leoncio) in the amount of ₱500,000.00
was grossly disadvantageous to the government
considering that the outstanding loan obligations of the
mortgagor, Eduardo Monsanto (Eduardo), was more
than the bid amount. Pag-IBIG thus manifested that –
It is for this reason that we are making this protest.
Sheriff de Guzman failed to comply with our request for
deferment despitehis [acquiescence]. We are
requesting for your intervention to nullify the results of
the auction sale conducted last January 15, 2004. This
will give our office a chance to be able to participate
and recoup our investment.
We trust that you will give thismatter preferential
attention.
Executive Judge Monsantorefrained from acting on the
letter considering that Eduardo is his relative; instead
he re-assigned the same to Judge Sibanah E. Usman
(Judge Usman)8 of Branch 28.
Judge Usman noted that no formal petition orcomplaint
was actually filed which presents a judicial issue;
moreover, the acts complained of partake of
administrative matter. Consequently, Judge Usman
referred the matter to the Office of the Court
Administrator (OCA) for further action.
Subsequently, Pascual filed with the OCA, copy
furnished the RTCCatbalogan, Samar, Branches 27 and
28, a Motion to Lift Writ of Execution and Notice to Vac
ate dated March 13, 2004.
Page 25 of 85

In a Manifestation dated June 7, 2005 and filed before
Branch 28, PagIBIG informed the trial court that the
loan of Eduardo had been restructured and that
Eduardo had commenced paying monthly
amortizations; that as a result of the restructuring, Pag-
IBIG is withdrawing its Petition for Extra-judicial
Foreclosure; and that it is no longer interested in
pursuing an administrative action against De Guzman.
RTC- After careful and judicious scrutiny of the records
of thiscase, this Court is highly convinced that the public
auction sale conducted by Mr. De Guzman and Atty.
Ma. Luz Lampasa-Pabilona, Clerk of Court whereby Mr.
Leoncio Lim emerged as the highest bidder and
purchaser of the subject property in good faith, and also
given a Certificate of Sale issued by the Sheriff and the
same was registered with the Registry of Deeds on
March 5, 2004 are in order. The impugned Sheriff De
Guzman had accordingly performed his functions.
Accordingly, there is no showing that hehas abuse[d] his
authority during the conduct of the public auction. Such
being the case, this Court is further convinced that the
motion filed by Leoncio Lim through counsel Atty. Labid
being meritorious should be given due course. On the
other hand, the motion to lift writ of execution and
notice to vacatefiled by Rev. Fr. Pascual D. Monsanto, Jr.
being devoid of merit should be denied.
CA- affirmed
Issue: WON the trial court acquired jurisdiction?
Ruling: "Filing the appropriate initiatory pleading and
the payment of the prescribed docket fees vest a trial
court with jurisdiction over the subject matter."28
Section 5, Rule 1 of the Rules of Court specifically
providesthat "[a] civil action is commenced by the filing
of the original complaint in court." Moreover, "[e]very
ordinary civil action must bebased on a cause of action."
No proper initiatory pleading was filed before the trial
court.
In this case, records show that no formal complaint or
petition was filed in court. The case was supposedly
"commenced" through a letter of Pag-IBIG asking the
intervention of Executive Judge Monsanto on the
alleged anomalous foreclosure sale conducted by De
Guzman. However, saidletter could not in any way be
considered as a pleading. Section 1, Rule 6 of the Rules
of Court defines pleadings as "written statements of the
respective claims and defenses of the parties submitted
to the court for appropriate judgment." To stress, Pag-
IBIG’s letter could not be considered as a formal
complaint or petition. First, the parties to the case were
not identified pursuant to Section 1,30 Rule 3 and
Section 1,31 Rule 7. Second, the so-called claim or cause
of action was not properly mentioned or specified.
Third, the letter miserably failed to comply with the
requirements of Rule 7, Rules of Court. The letter bore
no caption; it was not even assigned a docket number;
the parties were not properly identified;the allegations
were not properly set forth; no particular relief
CIVIL PROCEDURE CASE DIGESTS - 1
issought; in fact, only the intervention of Executive
Judge Monsanto is requested; it was notsigned by a
counsel; and most of all, there is no verification
orcertification against forum-shopping.
In addition, it is quite unfortunate that Judge Usman
proceeded to take cognizance of the case
notwithstanding his prior observation as stated in the
May 3, 2004 Order that no formal petition or complaint
was actually filed and which presents a judicial issue.In
fact, Judge Usman even opined that the acts
complained of partake of administrative matter and
thus referred the same to the OCA for further action.
The May 9, 2005 letter of OCA directing Judge Usman to
take action on the Motion to Lift Writ of Execution and
Notice to Vacatecould not be interpreted as vesting
Judge Usman with the authority and jurisdiction to take
cognizance of the matter. Nothing to that effect could
be inferred from the tenor of the May 9, 2005 letter
ofOCA. Jurisdiction is vested by law. When OCA directed
Judge Usman to take action on the Motion to Lift Writ
of Execution and Notice to Vacate, it did not deprive the
latter ofhis discretion to dismiss the matter/case for
lack of jurisdiction, if the matter/case so warrants.
In fine, there being no proper initiatory pleading filed,
then the RTC Branch 28 did not acquire jurisdiction over
the matter/case.
No payment of docket fees.
We have also noted that no docket feeswere paid
before the trial court. Section 1, Rule 141 of the Rules of
Court mandates that "[u]pon the filing of the pleading
or other application which initiates an action or
proceeding, the fees prescribed therefor shall be paid in
full." "It is hornbook law that courts acquire jurisdiction
over a case only upon payment of the prescribed docket
fee."
In Far East Bank and Trust Company v. Shemberg
Marketing Corporation,33 we ruled thus: A court
acquires jurisdiction over a case only upon the payment
of the prescribed fees. The importance of filing fees
cannot be gainsaid for these are intended to take care
of court expenses inthe handling of cases in terms of
costs of supplies, use of equipment, salaries and fringe
benefits of personnel, and others, computed as to man-
hours used in the handling of each case. Hence, the
non-payment or insufficient payment of docket fees can
entail tremendous losses to government in general and
to the judiciary in particular.
In fine, since no docket or filing feeswere paid, then the
RTC Branch 28 did not acquire jurisdiction over the
matter/case. It therefore erred in taking cognizance of
the same. Consequently, all the proceedings undertaken
by the trial court are null and void,and without force
and effect. In, particular, the July 1, 2005 and August 30,
2005 Orders of the RTC are null and void.
It is settled jurisprudence that "[a]ny decision rendered
without jurisdiction is a total nullity and may be struck
Page 26 of 85

down at any time, even on appeal before this Court."34
Prescinding from the foregoing, we hold that the RTC-
Branch 28 did not acquire jurisdiction over the instant
matter/case there being no formal initiatory pleading
filed as well asnon-payment of docket fees.
Consequently, all proceedings had before the RTC
Branch 28 were null and void for lack of jurisdiction.
W. G.R. No.148004 January 22, 2007
VINCENT E. OMICTIN, Petitioner, vs. HON. COURT OF
APPEALS (Special Twelfth Division) and GEORGE I.
LAGOS, Respondents.
Facts: Petitioner Vincent E. Omictin, Operations
Manager Ad Interim of Saag Phils., Inc., filed a complaint
for two counts of estafa with the Office of the City
Prosecutor of Makati against private respondent George
I. Lagos. He alleged that private respondent, despite
repeated demands, refused to return the two company
vehicles entrusted to him when he was still the
president of Saag Phils., Inc.
On February 26, 1999, public prosecutor Alex G.
Bagaoisan recommended the indictment of private
respondent, and on the same day, respondent was
charged with the crime of estafa under Article 315, par.
1(b) of the Revised Penal Code before the Regional Trial
Court (RTC), Branch 57 of Makati City. The case was
docketed as Criminal Case No. 99-633, entitled "People
of the Philippines v. George I. Lagos."
On June 4, 1999, private respondent filed a motion to
recuse praying that Presiding Judge Reinato G. Quilala
inhibit himself from hearing the case based on the
following grounds:
a) In an order, dated May 28, 1999, the
presiding judge summarily denied respondent’s
motion: 1) to defer issuance of the warrant of
arrest; and 2) to order reinvestigation.
b) Immediately before the issuance of the
above-mentioned order, the presiding judge
and Atty. Alex Y. Tan, SAAG Philippines, Inc.’s Ad
Interim President, were seen together.
On June 24, 1999, private respondent filed a motion to
suspend proceedings on the basis of a prejudicial
question because of a pending petition with the
Securities and Exchange Commission (SEC) involving the
same parties.
It appears that on January 7, 1999, private respondent
filed SEC Case No. 01-99-6185 for the declaration of
nullity of the respective appointments of Alex Y. Tan
and petitioner as President Ad Interim and Operations
Manager Ad Interim of Saag Phils., Inc., declaration of
dividends, recovery of share in the profits, involuntary
dissolution and the appointment of a receiver, recovery
of damages and an application for a temporary
restraining order (TRO) and injunction against Saag (S)
Pte. Ltd., Nicholas Ng, Janifer Yeo, Tan and petitioner. 3
In the action before the SEC, private respondent
averred that Saag (S) Pte. Ltd. is a foreign corporation
CIVIL PROCEDURE CASE DIGESTS - 1
organized and existing under the laws of Singapore, and
is fully owned by Saag Corporation (Bhd). On July 1,
1994, he was appointed as Area Sales Manager in the
Philippines by Thiang Shiang Hiang, Manager of Saag (S)
Pte. Ltd. Pursuant to his appointment, respondent was
authorized to organize a local joint venture corporation
to be known as Saag Philippines, Inc. for the wholesale
trade and service of industrial products for oil, gas and
power industries in the Philippines.
Barely three months after, or on June 23, 1998, private
respondent resigned his post as president of Saag Phils.,
Inc. while still retaining his position as a director of the
company.
Citing as a reason the absence of a board resolution
authorizing the continued operations of Saag Phils., Inc.,
private respondent retained his possession of the office
equipment of the company in a fiduciary capacity as
director of the corporation pending its dissolution
and/or the resolution of the intra-corporate dispute. He
likewise changed the locks of the offices of the company
allegedly to prevent Tan and petitioner from seizing
company property.
Private respondent stressed that Tan’s appointment
was invalid because it was in derogation of the company
by-laws requiring that the president must be chosen
from among the directors, and elected by the
affirmative vote of a majority of all the members of the
board of directors.5 As Tan’s appointment did not have
the acquiescence of the board of directors, petitioner’s
appointment by the former is likewise allegedly invalid.
Thus, neither has the power or the authority to
represent or act for Saag Phils., Inc. in any transaction
or action before the SEC or any court of justice.
RTC- The trial court, in an order dated September 8,
1999, denied respondent’s motion to suspend
proceedings and motion to recuse.
CA- it is clear that a prejudicial question exists which
calls for the suspension of the criminal proceedings
before the lower court.
Issue: whether or not a prejudicial question exists to
warrant the suspension of the criminal proceedings
pending the resolution of the intra-corporate
controversy that was originally filed with the SEC.
NB: PLEASE READ DISCUSSION ON DOCTRINE OF
PRIMARY JURISDICTION BELOW
A prejudicial question is defined as that which arises in a
case, the resolution of which is a logical antecedent of
the issue involved therein and the cognizance of which
pertains to another tribunal.14 Here, the case which was
lodged originally before the SEC and which is now
pending before the RTC of Mandaluyong City by virtue
of Republic Act No. 8799 involves facts that are
intimately related to those upon which the criminal
prosecution is based.
Page 27 of 85

Ultimately, the resolution of the issues raised in the
intra-corporate dispute will determine the guilt or
innocence of private respondent in the crime of estafa
filed against him by petitioner before the RTC of Makati.
As correctly stated by the CA, one of the elements of
the crime of estafa with abuse of confidence under
Article 315, par. 1(b) of the Revised Penal Code is a
demand made by the offended party to the offender:
The elements of estafa with abuse of confidence under
subdivision No. 1, par. (b) of Art. 315 are as follows:
1. That money, goods, or other personal
property be received by the offender in trust, or
on commission, or for administration, or under
any other obligation involving the duty to make
delivery of, or to return the same;
2. That there be misrepresentation or
conversion of such money or property by the
offender, or denial on his part of such receipt;
3. That such misappropriation or conversion or
denial is to the prejudice of another; and
4. That there is a demand made by the offended
party to the offender.
Logically, under the circumstances, since the alleged
offended party is Saag Phils., Inc., the validity of the
demand for the delivery of the subject vehicles rests
upon the authority of the person making such a demand
on the company’s behalf. Private respondent is
challenging petitioner’s authority to act for Saag Phils.,
Inc. in the corporate case pending before the RTC of
Mandaluyong, Branch 214. Taken in this light, if the
supposed authority of petitioner is found to be
defective, it is as if no demand was ever made, hence,
the prosecution for estafa cannot prosper. Moreover,
the mere failure to return the thing received for
safekeeping or on commission, or for administration, or
under any other obligation involving the duty to deliver
or to return the same or deliver the value thereof to the
owner could only give rise to a civil action and does not
constitute the crime of estafa. This is because the crime
is committed by misappropriating or converting money
or goods received by the offender under a lawful
transaction. As stated in the case of United States v.
Bleibel:
The crime of estafa is not committed by the failure to
return the things received for sale on commission, or to
deliver their value, but, as this class of crime is defined
by law, by misappropriating or converting the money or
goods received on commission. Delay in the fulfillment
of a commission or in the delivery of the sum on such
account received only involves civil liability. So long as
the money that a person is under obligation to deliver is
not demanded of him, and he fails to deliver it for
having wrongfully disposed of it, there is no estafa,
whatever be the cause of the debt.
Likewise, by analogy, the doctrine of primary
jurisdiction may be applied in this case. The issues
raised by petitioner particularly the status of Saag Phils.,
Inc. vis-à-vis Saag (S) Pte. Ltd., as well as the question
regarding the supposed authority of the latter to make a
demand on behalf of the company, are proper subjects
CIVIL PROCEDURE CASE DIGESTS - 1
for the determination of the tribunal hearing the intra-
corporate case which in this case is the RTC of
Mandaluyong, Branch 214. These issues would have
been referred to the expertise of the SEC in accordance
with the doctrine of primary jurisdiction had the case
not been transferred to the RTC of Mandaluyong.
Strictly speaking, the objective of the doctrine of
primary jurisdiction is to guide a court in determining
whether it should refrain from exercising its jurisdiction
until after an administrative agency has determined
some question or some aspect of some question arising
in the proceeding before the court.17 The court cannot
or will not determine a controversy involving a question
which is within the jurisdiction of the administrative
tribunal prior to resolving the same, where the question
demands the exercise of sound administrative
discretion requiring special knowledge, experience and
services in determining technical and intricate matters
of fact.
While the above doctrine refers specifically to an
administrative tribunal, the Court believes that the
circumstances in the instant case do not proscribe the
application of the doctrine, as the role of an
administrative tribunal such as the SEC in determining
technical and intricate matters of special competence
has been taken on by specially designated RTCs by
virtue of Republic Act No. 8799.19 Hence, the RTC of
Mandaluyong where the intra-corporate case is pending
has the primary jurisdiction to determine the issues
under contention relating to the status of the domestic
corporation, Saag Phils., Inc., vis-à-vis Saag Pte. Ltd.; and
the authority of petitioner to act on behalf of the
domestic corporation, the determination of which will
have a direct bearing on the criminal case. The law
recognizes that, in place of the SEC, the regular courts
now have the legal competence to decide intra-
corporate disputes.
X. G.R. No. 167891 January 15, 2010
SPOUSES JESUS FAJARDO and EMER FAJARDO,
Petitioners, vs. ANITA R. FLORES, assisted by her
husband, BIENVENIDO FLORES, Respondent.
Facts: Leopoldo delos Reyes owned a parcel of land,
denominated as Lot No. 2351 (Cad. 320-D), with an area
of 25,513 square meters (sq m), located in Barangay
Sumandig in Hacienda Buenavista, San Ildefonso,
Bulacan. In 1963, he allowed petitioner Jesus Fajardo to
cultivate said land. The net harvests were divided
equally between the two until 1975 when the
relationship was converted to leasehold tenancy. Per
Order2 from the Department of Agrarian Reform (DAR),
Regional Office, Region III, San Fernando, Pampanga,
rent was provisionally fixed at 27.42 cavans per year,
which Jesus Fajardo religiously complied with. From the
time petitioner cultivated the land, he was allowed by
Leopoldo delos Reyes to erect a house for his family on
the stony part of the land, which is the subject of
controversy.
Page 28 of 85

On January 26, 1988, Leopoldo delos Reyes died. His
daughter and sole heir, herein respondent Anita Flores,
inherited the property. On June 28, 1991, Anita Flores
and Jesus Fajardo executed an agreement,
denominated as "KASUNDUAN NG PAGHAHATI NG
LUPA AT PAGTATALAGA NG DAAN UKOL SA
MAGKABILANG PANIG."3 This was followed by another
agreement, "KASUNDUAN SA HATIAN SA LUPA,"
executed on July 10, 1991, wherein the parties agreed
to deduct from Lot No. 2351 an area of 10,923 sq m,
allotting the same to petitioner. Apparently, there was a
conflict of claims in the interpretation of the Kasunduan
between Anita Flores and Jesus Fajardo, which was
referred to the DAR, Provincial Agrarian Reform Office,
Baliuag, Bulacan.4 In the Report and Recommendation
dated May 3, 2000, the Legal Officer advised the parties
to ventilate their claims and counterclaims with the
Department of Agrarian Reform Adjudication Board
(DARAB), Malolos, Bulacan.
On December 22, 2000, a complaint for ejectment was
filed by herein respondent Anita Flores, assisted by her
husband Bienvenido Flores, against petitioners with the
Municipal Trial Court (MTC), San Ildefonso, Bulacan.
Petitioners filed a Motion to Dismiss, alleging that Lot
No. 2351, with an area of 25,513 sq m, was agricultural
land; that they had been continuously, uninterruptedly,
and personally cultivating the same since 1960 up to the
present; that the MTC had no jurisdiction over the case,
considering that the dispute between the parties,
regarding the Kasunduan, was referred to the DARAB;
and that the assumption by the DARAB of jurisdiction
over the controversy involving the lot in question
therefore precluded the MTC from exercising
jurisdiction over the case.
MTC- in favor of respondent
RTC- affirmed the MTC Decision in toto
On motion for reconsideration, however, the RTC issued
an Order on December 10, 2002, reversing its decision
dated August 29, 2002. The RTC found that the issue
involved appeared to be an agrarian dispute, which fell
within the contemplation of Republic Act (R.A.) No.
6657, otherwise known as the Comprehensive Agrarian
Reform Law of 1988, and thus ordered the dismissal of
the case for lack of jurisdiction.
A petition for review was then filed by respondents with
the CA to annul the Order of the RTC dated December
10, 2002.
On October 28, 2004, the CA rendered the assailed
decision, which reinstated the MTC decision. It
disagreed with the findings of the RTC and ruled that
the part of Lot No. 2351 where petitioners’ house stood
was stony and residential in nature, one that may not
be made to fall within the ambit of the operation of
Philippine agrarian laws, owing to its non-agriculture
character. The CA explained that, on the strength of the
two instruments, the parties made a partition and
CIVIL PROCEDURE CASE DIGESTS - 1
divided the agricultural portion of Lot No. 2351 equally
among themselves. By virtue of said division, the parties
effectively severed and terminated the agricultural
leasehold/tenancy relationship between them; thus,
there was no longer any agrarian dispute to speak of.
Issue: whether it is MTC or the DARAB which has
jurisdiction over the case.
Ruling: There is no dispute that, on June 28, 1991, the
parties executed an agreement, denominated as
"KASUNDUAN NG PAGHAHATI NG LUPA AT
PAGTATALAGA NG DAAN UKOL SA MAGKABILANG
PANIG." Therein, it was admitted that Jesus Fajardo was
the tiller of the land. This Kasunduan was subsequently
followed by another agreement, "KASUNDUAN SA
HATIAN SA LUPA," whereby an area of 10,923 sq m of
Lot No. 2351 was given to petitioners. The portion of
the land where petitioners’ house is erected is the
subject of the instant case for unlawful detainer.
Respondent argues that this portion is not included in
the deed of partition, while petitioners insist that it is.
We agree with the RTC when it clearly pointed out in its
Order dated December 10, 2002 that the resolution of
this case hinges on the correct interpretation of the
contracts executed by the parties. The issue of who has
a better right of possession over the subject land cannot
be determined without resolving first the matter as to
whom the subject property was allotted. Thus, this is
not simply a case for unlawful detainer, but one that is
incapable of pecuniary estimation, definitely beyond
the competence of the MTC.
More importantly, the controversy involves an
agricultural land, which petitioners have continuously
and personally cultivated since the 1960s. In the
Kasunduan, it was admitted that Jesus Fajardo was the
tiller of the land. Being agricultural lessees, petitioners
have a right to a home lot and a right to exclusive
possession thereof by virtue of Section 24, R.A. No.
3844 of the Agricultural Land Reform Code. Logically,
therefore, the case involves an agrarian dispute, which
falls within the contemplation of R.A. No. 6657, or the
Comprehensive Agrarian Reform Law.
An agrarian dispute13 refers to any controversy relating
to tenurial arrangements, whether leasehold, tenancy,
stewardship, or otherwise, over lands devoted to
agriculture, including disputes concerning farmworkers’
associations or representation of persons in negotiating,
fixing, maintaining, changing, or seeking to arrange
terms or conditions of such tenurial arrangements. It
includes any controversy relating to compensation of
lands acquired under this Act and other terms and
conditions of transfer of ownership from landowner to
farmworkers, tenants, and other agrarian reform
beneficiaries, whether the disputants stand in the
proximate relation of farm operator and beneficiary,
landowner and tenant, or lessor and lessee. It relates to
any controversy relating to, inter alia, tenancy over
lands devoted to agriculture.14
Page 29 of 85

Undeniably, the instant case involves a controversy
regarding tenurial arrangements. The contention that
the Kasunduans, which allegedly terminated the
tenancy relationship between the parties and,
therefore, removed the case from the ambit of R.A. No.
6657, is untenable. There still exists an agrarian dispute
because the controversy involves the home lot of
petitioners, an incident arising from the landlord-tenant
relationship.
In the case at bar, petitioners’ claim that the tenancy
relationship has been terminated by the Kasulatan is of
no moment. As long as the subject matter of the
dispute is the legality of the termination of the
relationship, or if the dispute originates from such
relationship, the case is cognizable by the DAR, through
the DARAB. The severance of the tenurial arrangement
will not render the action beyond the ambit of an
agrarian dispute.
Furthermore, the records disclose that the dispute
between the parties, regarding the interpretation of the
Kasunduan, was, in fact, raised and referred to the DAR,
which in turn referred the case to the DARAB.16 In view
of the foregoing, we reiterate Hilario v. Prudente,17 that:
The doctrine of primary jurisdiction precludes the courts
from resolving a controversy over which jurisdiction has
initially been lodged with an administrative body of
special competence. For agrarian reform cases,
jurisdiction is vested in the Department of Agrarian
Reform (DAR); more specifically, in the Department of
Agrarian Reform Adjudication Board (DARAB).
Y. G.R. No. L-65505 October 12, 1987
GABRIEL ABAD, PIO AGANON, MARIO ALARCIO, JOSE
AQUINO, CESAR AURELIO, SOTERO BERNARDO,
AURELIO CABRAL, JESUS CARREON, ABELARDO
CARILLO, ET AL., petitioners, vs. REGIONAL TRIAL
COURT OF MANILA, BRANCH LII-HON. DAVID G.
NITAFAN and THE PHILIPPINE AMERICAN GENERAL
INSURANCE COMPANY, INC., respondents.
FACTS: Abad et al., filed on August 18, 1978 against
Philippine American General Insurance Company, Inc.
(PHILAMGEN, for brevity) for the enforcement of
contract and recovery of loss of money basically praying
for payment of the money value of the respective
accumulated sick leave with pay of the separated
employees of PHILAGEM either thru retirement,
retrenchment or resignation.
Instead of filing an answer, PHILAMGEN moved to
dismiss the complaint, which the trial court granted
(Feb. 16, 1979). After a denial of their motion to
reconsider, Abad et al filed before the Supermen Court
a petition for Certiorari. A decision was rendered setting
aside the aforesaid orders and the dismissed complaint
was reinstated. The case was remanded to the trial
court for further proceedings.
A fire destroyed the sala wherein the entire records of
Civil case No. 117708 were kept. However, the records
CIVIL PROCEDURE CASE DIGESTS - 1
of the case were reconstituted on January 21, 1982 and
the case was renumbered as Civil Case No. 82-
1324.Thereafter, Philamgen filed its Answer to the
complaint.
On January, 1983, judicial reorganization took place by
the passage of Executive Order No. 864 and the case at
bar was re-raffled to Regional Trial Court of Manila. RTC
Manila motu proprio, dismissed the complaint in Civil
Case No. 82-1324 declaring that it lacked jurisdiction
over the subject made being money claims arising from
employer-employee relations.
ISSUES:
1. WON RTC Manila erred in reversing motu proprio the
Supreme Court's decision in G.R. No. L-50563 by
dismissing once again Abad et al’s action on the
erroneous ground of lack of jurisdiction. - NEGATIVE
2. WON RTC Manila erred in holding itself a totally
different court from the Court of First Instance whose
cases were merely taken over by RTC Manila –
NEGATIVE
RULING: RTC Manila's allegations do not deserve merit.
One of the important features in the Judiciary
Reorganization effected through B.P. 129 is the addition
of paragraph (6, . Sec. 19, in defining the jurisdiction of
Regional Trial Courts (which took the place of the
abolished Courts of First Instance), which reading as
follows:
In all cases not within the exclusive jurisdiction of any
court, tribunal, person or body exercising judicial or
quasi-judicial functions.
A provision not found in Sec. 44 of the Judiciary Act of
1948. It was the intention of the legislative body to
uncluttered the courts of cases which may be
adjudicated, in the first instance, by officials or bodies
exercising quasi-judicial adjudicatory powers like the
Labor Arbiters or the National Labor Relations
Commission a specialized body or bodies on labor
related provisions and are not restricted by the
technical rules of pleading and evidence.
The Regional Trial Courts of today are actually the
same courts that functioned as Courts of First Instance
before the Judiciary Reorganization Act (Batas
Pambansa Bilang 129). There might have been a
change in the name and in some incidental features
but essentially, they are the same.
However, whereas before jurisdiction over money
claims of laborers and employees appertained to Courts
of First Instance, the same are now to be taken
cognizance of by proper entities in the Department of
Labor and Employment.
The rule of adherence of jurisdiction until a cause is
finally resolved or adjudicated does not apply when
the change in jurisdiction is curative in character. Thus
in the instant case, there is nothing wrong in holding
that Courts of First Instance /Regional Trial Courts no
Page 30 of 85

longer have jurisdiction over aforesaid monetary
claims of labor.
Z. G.R. No. 132601 January 19, 1999
LEO ECHEGARAY, petitioner, vs. SECRETARY OF
JUSTICE, ET AL., respondents.
Facts: Leo Echegaray was convicted and was to be
executed by lethal injection (RA 8177) The Supreme
Court issued a temporary restraining order restraining
the execution of said party. Said execution was set for
Jan. 4, 1999 but the petitioner filed his Very Urgent
Motion for Issuance of TRO on Dec. 28, 1998. The Court
wasin recess at the time but a Special Session was called
to deliberate onsaid matters. Furthermore, Congress
was a new one with about 130new members whose
views on capital punishment were still unexpressed. The
suspension was temporary (until June 15, 1999, unless it
sooner becomes certain that no repeal or modification
of the law is going to be made). It was alleged that sine
it is already final and executory, the Supreme Court has
lost its jurisdiction with the case.
Issue: Whether or not in issuing the temporary
restraining order, the Supreme Court has gone beyond
its jurisdiction since the case is already final.
Ruling: It is not beyond the jurisdiction of the Supreme
Court. What the SC could not do is alter the decision. In
the case at hand, the SC did nothing of the sort.
Jurisprudence tells us “the finality of a judgment does
not mean that the Court has lost all its powers nor the
case. By the finality of the judgment, what the court
loses is its jurisdiction to amend, modify or alter the
same. Even after the judgment has become final, the
court retains its jurisdiction to execute and enforce it.
There is a difference between the jurisdiction of the
court to execute its judgment and its jurisdiction to
amend, modify or alter the same. The former continues
even after the judgment has become final for the
purpose of enforcement of judgment; the latter
terminates when the judgment becomes final. For after
the judgment has become final, facts and circumstances
may transpire which can render the execution unjust or
impossible.
AA. G.R. No. L-11390 March 26, 1918
EL BANCO ESPAÑOL-FILIPINO, plaintiff-appellant, vs.
VICENTE PALANCA, administrator of the estate of
Engracio Palanca Tanquinyeng, defendant-appellant.
JURISDICTION, HOW ACQUIRED: Jurisdiction over the
property which is the subject of the litigation may result
either from a seizure of the property under legal
process, whereby it is brought into the actual custody of
the law, or it may result from the institution of legal
proceedings wherein, under special provisions of law,
the power of the court over the property is recognized
and made effective.
The action to foreclose a mortgage is said to be a
proceeding quasi in rem, by which is expressed the idea
CIVIL PROCEDURE CASE DIGESTS - 1
that while it is not strictly speaking an action in rem yet
it partakes of that nature and is substantially such.
DUE PROCESS IN FORECLOSURE PROCEEDINGS: Property
is always assumed to be in the possession of its owner,
in person or by agent; and he may be safely held, under
certain conditions, to be affected with knowledge that
proceedings have been instituted for its condemnation
and sale.
FACTS: Engracio Palanca Tanquinyeng y Limquingco
mortgaged various parcels of real property in Manila to
El Banco Espanol-Filipino.
Afterwards, Engracio returned to China and there he
died on January 29, 1810 without returning again to the
Philippines. The mortgagor then instituted foreclosure
proceeding but since defendant is a non-resident, it was
necessary to give notice by publication.
The Clerk of Court was also directed to send copy of the
summons to the defendant’s last known address, which
is in Amoy, China. It is not shown whether the Clerk
complied with this requirement.
Nevertheless, after publication in a newspaper of the
City of Manila, the cause proceeded and judgment by
default was rendered. The decision was likewise
published and afterwards sale by public auction was
held with the bank as the highest bidder.
On August 7, 1908, this sale was confirmed by the court.
However, about seven years after the confirmation of
this sale, a motion was made by Vicente Palanca, as
administrator of the estate of the original defendant,
wherein the applicant requested the court to set aside
the order of default and the judgment, and to vacate all
the proceedings subsequent thereto. The basis of this
application was that the order of default and the
judgment rendered thereon were void because the
court had never acquired jurisdiction over the
defendant or over the subject of the action.
ISSUES:
1. Whether or not the lower court acquired jurisdiction
over the defendant and the subject matter of the action
2. Whether or not due process of law was observed
RULING:
On Jurisdiction
The word “jurisdiction” is used in several different,
though related, senses since it may have reference (1)
to the authority of the court to entertain a particular
kind of action or to administer a particular kind of relief,
or it may refer to the power of the court over the
parties, or (2) over the property which is the subject to
the litigation.
The sovereign authority which organizes a court
determines the nature and extent of its powers in
general and thus fixes its competency or jurisdiction
Page 31 of 85

with reference to the actions which it may entertain and
the relief it may grant.
How Jurisdiction is Acquired
Jurisdiction over the person is acquired by the voluntary
appearance of a party in court and his submission to its
authority, or it is acquired by the coercive power of
legal process exerted over the person.
Jurisdiction over the property which is the subject of the
litigation may result either from a seizure of the
property under legal process, whereby it is brought into
the actual custody of the law, or it may result from the
institution of legal proceedings wherein, under special
provisions of law, the power of the court over the
property is recognized and made effective. In the latter
case the property, though at all times within the
potential power of the court, may never be taken into
actual custody at all. An illustration of the jurisdiction
acquired by actual seizure is found in attachment
proceedings, where the property is seized at the
beginning of the action, or some subsequent stage of its
progress, and held to abide the final event of the
litigation. An illustration of what we term potential
jurisdiction over the res, is found in the proceeding to
register the title of land under our system for the
registration of land. Here the court, without taking
actual physical control over the property assumes, at
the instance of some person claiming to be owner, to
exercise a jurisdiction in rem over the property and to
adjudicate the title in favor of the petitioner against the
entire world.
In the terminology of American law the action to
foreclose a mortgage is said to be a proceeding quasi in
rem, by which is expressed the idea that while it is not
strictly speaking an action in rem yet it partakes of that
nature and is substantially such. The expression "action
in rem" is, in its narrow application, used only with
reference to certain proceedings in courts of admiralty
wherein the property alone is treated as responsible for
the claim or obligation upon which the proceedings are
based. The action quasi rem differs from the true action
in rem in the circumstance that in the former an
individual is named as defendant, and the purpose of
the proceeding is to subject his interest therein to the
obligation or lien burdening the property. All
proceedings having for their sole object the sale or
other disposition of the property of the defendant,
whether by attachment, foreclosure, or other form of
remedy, are in a general way thus designated. The
judgment entered in these proceedings is conclusive
only between the parties.
It is true that in proceedings of this character, if the
defendant for whom publication is made appears, the
action becomes as to him a personal action and is
conducted as such. This, however, does not affect the
proposition that where the defendant fails to appear
the action is quasi in rem; and it should therefore be
considered with reference to the principles governing
actions in rem.
CIVIL PROCEDURE CASE DIGESTS - 1
BB. G.R. No. 151800 November 5, 2009
OFFICE OF THE OMBUDSMAN, represented by HON.
ANIANO A. DESIERTO, Petitioner,
vs. HEIRS OF MARGARITA VDA. DE VENTURA,
represented by PACITA V. PASCUAL, EMILIANO
EUSEBIO, JR., and CARLOS RUSTIA, Respondents.
FACTS: Heirs of Margarita Vda. De Ventura (the Heirs)
filed with the Office of the Ombudsman a complaint for
Falsification of Public Documents and violation of Sec. 3
(e) of RA 3019 against Zenaida Palacio and spouses
Edilberto and Celerina Darang.
Palacio being the OIC of DAR designated Celerina to
investigate the claims of the Heirs against her former
husband Edilberto. Celerina supported the report with
public documents which she falsified and Palacio issued
a recommendation based on that report to award the
landholding in dispute to Edilberto.
The DARAB recommended that the charged against the
respondents be dismissed for insufficiency of evidence.
The CA then took cognizance of the case and granted
the provisional dismissal of the complaint against
respondent for violation of Sec 3 (e) of RA3019 but
denied the dismissal of the complaint for falsification of
public documents.
ISSUE: Whether or not the CA has jurisdiction over
decisions of the Office of the Ombudsman.
RULING: The CA has jurisdiction over orders, directives
and decision of the Office of the Ombudsman in
administrative disciplinary cases only. It cannot,
therefore, review the orders, directives or decisions of
the Office of the Ombudsman in criminal or non-
administrative cases.
This issue has been directly addressed in Kuizon v.
Desierto and reiterated in the more recent Golangco v.
Fung,wherein the Court declared, thus: “The Court of
Appeals has jurisdiction over orders, directives and
decisions of the Office of the Ombudsman in
administrative disciplinary cases only. It cannot,
therefore, review the orders, directives or decisions of
the Office of the Ombudsman in criminal or non-
administrative cases.”
The question that arises next is what remedy should an
aggrieved party should avail of to assail the
Ombudsman’s finding of the existence or lack of
probable cause in criminal cases or non-administrative
cases. In Estrada v. Desierto, the Court emphasized that
parties seeking to question the resolutions of the Office
of the Ombudsman in criminal cases or non-
administrative cases, may file an original action for
certiorari with this Court, not with the CA, when it is
believed that the Ombudsman acted with grave abuse
of discretion.
Page 32 of 85

CC. G.R. No. 141426 May 6, 2005
ZENAIDA F. LANTING, petitioner, vs. HONORABLE
OMBUDSMAN, ANTI-GRAFT INVESTIGATOR OSCAR
RAMOS, MAYOR LITO ATIENZA, EMMANUEL SISON,
VIRGILIO FORBES, CHARITO RUMBO, DIRECTOR
ERLINDA MAGALONG and ERNESTO SAW, JR.,
respondents.
FACTS: Lanting is an Administrative Officer of the City
Council of Manila. She filed with the Ombudsman a
complaint charging then Manila Vice-Mayor Atienza
(now City Mayor); Secretary to the City Council; and a
Human Resource Management Officer with violating the
Anti-Graft and Corrupt Practices Act and Falsification of
Public documents. Lanting also questions the
appointment in the City Government of several
individuals which are relatives of the respondents.
The Graft Investigator Officer issued a Resolution
recommending that Lansing’s complaint be dismissed. It
stated that: (1) the evidence does not warrant the filing
of graft charges and (2) the appointments are governed
by the Civil Service Commission.
Lanting filed a Motion for Reconsideration of the
Resolution on the ground that the Investigator
“conveniently and intentionally skirted the issue of
falsification of public documents which are crystal clear
in my complaint.” Lanting then prayed for a re-
investigation of her complaint by a Special Prosecutor.
The Ombudsman denied the motion.
Dissatisfied, Lanting filed with the Court of Appeals a
petition for certiorari and mandamus. Aside from
several procedural errors, the petition was dismissed on
the ground that the CA has no jurisdiction over the
subject matter of the assailed Ombudsman’s resolution.
The CA held that Section 14 of The Ombudsman Act of
1989 provides that “No court shall hear any appeal or
application for remedy against the decision or findings
of the Ombudsman, except the Supreme Court on pure
question of law.”
Lanting filed a Motion for Reconsideration but was
again denied. The CA held that the Congress through
The Ombudsman Act of 1989 designated only the
Supreme Court as the appellate authority in
Ombudsman decisions in criminal cases.
Lanting’s position: Her complaint before the
Ombudsman was not limited to violation of the Anti-
Graft and Corrupt Practices Act, but likewise includes
“acts constituting ground for administrative complaint
hence cognizable by the Court of Appeals.
ISSUE: Whether or not the Court of Appeals gravely
erred in dismissing Lanting’s petition for certiorari on
the ground of lack of jurisdiction on the basis of The
Ombudsman Act.
CIVIL PROCEDURE CASE DIGESTS - 1
RULING: NO. The complaint is for violation of the Anti-
Graft and Corrupt Practices Acts. It is not an
administrative complaint. Nowhere in her complaint did
she allege administrative offenses, such as dishonesty
or misconduct on the part of respondents. The
allegations describe the acts complained of as “willful,
felonious, unlawful, odious and despicable criminal
activities.”
In her motion for reconsideration of the Ombudsman’s
Resolution, Lanting claimed that the Investigator
“skirted the issue of falsification of public documents
which is crystal clear in my complaint.” Considering that
the complaint is criminal in nature, the Supreme Court,
not the Court of Appeals, has the sole authority to
review the Ombudsman’s Resolutions on pure question
of law as expressly mandated in The Ombudsman Act of
1989.
In Fabian vs. Desierto, it was held that only “appeals
from the decisions of the Office of the Ombudsman in
administrative disciplinary cases should be taken to the
Court of Appeals under the provisions of Rule 43.”
Therefore, the CA did not commit grave abuse of
discretion. Clearly, it has no jurisdiction over Lanting’s
criminal action.
DD. G.R. No. 129742 September 16, 1998
TERESITA G. FABIAN, petitioner, vs. HON. ANIANO A.
DESIERTO, in his capacity as Ombudsman; HON. JESUS
F. GUERRERO, in his capacity as Deputy Ombudsman
for Luzon; and NESTOR V. AGUSTIN, respondents.
FACTS: Teresita Fabian was the major stockholder and
president of PROMAT Construction Development
Corporation (PROMAT) which was engaged in the
construction business with a certain Nestor Agustin.
Agustin was the incumbent District Engineer of the First
Metro Manila Engineering District (FMED).
Misunderstanding and unpleasant incidents developed
between Fabian and Agustin. Fabian tried to terminate
their relationship, but Agustin refused and resisted her
attempts to do so to the extent of employing acts of
harassment, intimidation and threats. She eventually
filed an administrative case against Agustin which
eventually led an appeal to the Ombudsman but the
Ombudsman, Aniano Desierto, inhibited himself. But
the case was later referred to the deputy Ombudsman,
Jesus Guerrero.
The deputy ruled in favor of Agustin and he said the
decision is final and executory. Fabian appealed the
case to the Supreme Court. She averred that Section 27
of Republic Act No. 6770 (Ombudsman Act of 1989)
pertinently provides that:
In all administrative disciplinary cases, orders, directives
or decisions of the Office of the Ombudsman may be
appealed to the Supreme Court by filing a petition for
certiorari within ten (10) days from receipt of the
written notice of the order, directive or decision or
Page 33 of 85

denial of the motion for reconsideration in accordance
with Rule 45 of the Rules of Court.
ISSUE: Whether or not Section 27 of the Ombudsman
Act is valid.
RULING: No. It is invalid for it illegally expanded the
appellate jurisdiction of the Supreme Court. Section 27
of RA 6770 cannot validly authorize an appeal to the SC
from decisions of the Office of the Ombudsman in
administrative disciplinary cases. It consequently
violates the proscription in Section 30, Article VI of the
Constitution against a law which increases the Appellate
jurisdiction of the SC. No countervailing argument has
been cogently presented to justify such disregard of the
constitutional prohibition. That constitutional provision
was intended to give the SC a measure of control over
cases placed under its appellate jurisdiction. Otherwise,
the indiscriminate enactment of legislation enlarging its
appellate jurisdiction would unnecessarily burden the
SC
Section 30, Article VI of the Constitution is clear when it
states that the appellate jurisdiction of the SC
contemplated therein is to be exercised over “final
judgments and orders of lower courts,” that is, the
courts composing the integrated judicial system. It does
not include the quasi-judicial bodies or agencies.
But what is the proper remedy?
Appeals from judgments and final orders of quasi-
judicial agencies are now required to be brought to the
Court of Appeals on a verified petition for review, under
the requirements and conditions in Rule 43 of the Rules
of Court which was precisely formulated and adopted to
provide for a uniform rule of appellate procedure for
quasi-judicial agencies.
EE. G.R. No. 124067 March 27, 1998
PERLA A. SEGOVIA, REYNALDO C. SANTIAGO, and
WINIFREDO SM. PANGILINAN, petitioners, vs.
The SANDIGANBAYAN, PEOPLE OF THE PHILIPPINES,
and the PRESIDENT of the NATIONAL POWER
CORPORATION, respondents.
DOCTRINE: Under Section 13 of the Anti-Graft and
Corrupt Practices Law, the suspension of a public officer
is mandatory after a determination has been made of
the validity of the information in a pre-suspension
hearing conducted for that purpose. (Socrates vs.
Sandiganbayan, and Luciano, et al vs. Mariano)
Segovia, et al were designated as members of the
Contracts Committee of NPC for the Mindanao Grid
Projects. A bidding was held. The lowest and second
lowest bidders were the Joint Venture of INPHASE and T
& D, and Urban Consolidated Constructors, Inc.,
respectively. Joint Venture was disqualified but instead
of awarding the project to Urban it was also disqualified
and a failure of bidding was declared. Subsequently, the
project was cancelled.
CIVIL PROCEDURE CASE DIGESTS - 1
Urban charged Segovia, et al with violation of the Anti
Graft and Corrupt Practices Act.
After a preliminary investigation, the Ombudsman
recommended the filing of a case thus a case was filed
with the Sandiganbayan. Sandiganbayan issued a
resolution placing Segovia, et al, under preventive
suspension of 90 days.
Segovia, et al questioned it claiming that preventive
suspension is not mandatory but is subject to the sound
discretion of the court. Also, their suspension is no
longer necessary because the project was already
cancelled, they are no longer involved in the awarding
of bids, and that all documents necessary for the
investigation were already submitted.
ISSUE: Whether it is mandatory or discretionary for the
Sandiganbayan to place under preventive suspension
public officers who stand accused before it, pursuant to
Section 13 of RA 3019 (Anti-Graft and Corrupt Practices
Act)?
RULING: It is mandatory. The firmly entrenched
doctrine is that under Section 13 of the Anti-Graft and
Corrupt Practices Law, the suspension of a public officer
is mandatory after a determination has been made of
the validity of the information in a pre-suspension
hearing conducted for that purpose. (Socrates vs.
Sandiganbayan, and Luciano, et al vs. Mariano)
There is no grave abuse of discretion. In ordering the
preventive suspension, the Sandiganbayan did but
adhere to the clear command of the law and what it
calls a “mass of jurispudence” emanating from this
Court, sustaining its authority to decree suspension of
public officials and employees indicted before it.
Indeed, that the theory of “discretionary suspension”
should still be advocated to this late date, despite the
“mass of jurisprudence” relevant to the issue, it little
short of amazing, bordering on contumacious disregard
of the solemn magisterial pronouncements of the
Highest court of the land.
The validity of Section 13, R.A. 3019, as amended --
treating of the suspension pendente lite of an accused
public officer -- may no longer be put at issue, having
been repeatedly upheld by this Court.
Bayot vs. Sandiganbayan: Preventive suspension was
not penal in character but merely a preventive measure
before final judgement. The purpose of suspension is to
prevent the accused public officer from frustrating or
hampering his prosecution by intimidating or
influencing witnesses or tampering with documentary
evidence, or from committing further acts of
malfeasance while in office;
Gonzaga v. Sandiganbayan: Preventive suspension is
not violative of the Constitution as the person
suspended remains entitled to the constitutional
Page 34 of 85

presumption of innocence since his culpability must still
be established.
The Anti-Graft and Corrupt Practices Act implicitly
recognizes that the power of preventive suspension lies
in the court in which the criminal charge is filed; once a
case is filed in court, all other acts connected with the
discharge of court functions -- including preventive
suspension -- should be acknowledged as within the
competence of the court that has taken cognizance
thereof, no violation of the doctrine of separation of
powers being perceivable in that acknowledgment.
The provision of suspension pendente lite applies to all
persons indicated upon a valid information under Act,
whether they be appointive or elective officials; or
permanent or temporary employees, or pertaining to
the career or non-career service. The term “office” in
Section 13 of the law applies to any office in relation to
which he is charged.
It is mandatory for the court to place under preventive
suspension a public officer accused before it.
Once a proper determination of the validity of the
Information has been made, it becomes the ministerial
duty of the court to forthwith issue the order of
preventive suspension of the accused official.
FF. G.R. No. 90529 August 16, 1991
REPUBLIC OF THE PHILIPPINES, petitioner, vs.
SANDIGANBAYAN (THIRD DIVISION) and MACARIO
ASISTIO, JR., respondents.
The Republic, through the Solicitor General, filed the
instant petition for review on certiorari seeking to annul
and set aside the resolution2 of respondent
Sandiganbayan, promulgated on October 10, 1989,
dismissing the petition for forfeiture filed by the
Republic against respondent Macario Asistio, Jr., for the
reason that "it is the Ombudsman — not the Office of
the Solicitor — General that has the authority to file the
petition."
On April 28, 1989, the Solicitor General, pursuant to the
aforesaid recommendation of the Ombudsman, filed a
Petition for Forfeiture before the Sandiganbayan.
A Motion to Dismiss was filed by respondent Asistio,
through counsel, on the ground that:
1. The Sandigan bayan has no jurisdiction over the case;
In an Opposition to Respondent's Motion to Dismiss,6
the Solicitor General averred that:
1. The Sandiganbayan has jurisdiction over the case;
In dismissing the petition for forfeiture and in ruling
that it is the Ombudsman who has the authority to file
the same before the court, the SANDIGANBAYAN held
that:
Other statutory provisions pertinent to the incident at
bar read:
The Office of the Tanodbayan shall have the exclusive
authority to conduct preliminary investigation of all
cases cognizable by the Sandiganbayan; to file
CIVIL PROCEDURE CASE DIGESTS - 1
information therefor and to direct and control the
prosecution of the said cases. (Sec. .77, PD 1630.)
The provisions of the Decree notwithstanding, the
Office of the Tanodbayan shall continue to have the
exclusive authority to conduct preliminary investigation,
file the necessary information, and direct and control
the prosecution of all cases enumerated in Section 4 of
Presidential Decree No. 1606, whether such cases be
within the exclusive original/appellate jurisdiction of the
Sandiganbayan or the appropriate courts in accordance
with the provisions of Presidential Decree No. 1630.
(Sec. 3, PD 1861, attending PD 1606.)
Since violations of Republic Act 1379 are cognizable
exclusively by the Sandiganbayan pursuant to Section 4
of PD 1606, abrogating thereby the jurisdiction over
forfeiture cases theretofore vested in the Regional Trial
Court of the city or province where the public officer or
employee complained of resides or holds office under
Section 2 of Republic Act 1379, the other provision of
said section 2 insofar as it lodged in the City or
Provincial Fiscal the power to conduct the previous
inquiry/preliminary investigation must be deemed
similarly modified by PD 1630, Section 17, and PD 1861,
Section 3 abovequoted, in the sense that such authority
of the City or Provincial Fiscal has been transferred to
the Office of the Tanodbayan (now Ombudsman).
Considering, further, that PDs 1630 and 1861, Sections
17 and 3, respectively, also provide that the Office of
the Tanodbayan (Ombudsman) shall also have the
exclusive authority to file the necessary information and
direct and control the prosecution of all cases falling
under the exclusive jurisdiction of the Sandiganbayan, it
is the Ombudsman-not the Office of the Solicitor
General-that has the authority to file the petition in this
case.
In effect, the dismissal of the petition for forfeiture by
the Sandiganbayan is premised on the supposition that
since violations of Republic Act No. 1379 now fall
within the exclusive jurisdiction of the Sandiganbayan,
and considering further that the exclusive authority to
file the necessary informations and to direct and
control the prosecution of all cases falling under the
exclusive jurisdiction of the Sandiganbayan is vested in
the Office of the Tanodbayan (now Ombudsman), it
follows that it is the Ombudsman, and not the Solicitor
General, who has the authority to file the petition for
forfeiture.
SOLGEN Contention:
It is the submission of the Solicitor General that his
authority to file the petition for forfeiture under
Republic Act No. 1379 should be retained,
notwithstanding the amendments introduced by
Presidential Decrees Nos. 1630 and 1861 vesting in the
Tanodbayan (now Ombudsman) the exclusive
authority to conduct the preliminary investigation of
all cases cognizable by the Sandiganbayan (specifically
those enumerated in Section 4 of Presidential Decree
No. 1606, as last amended by Presidential Decree No.
Page 35 of 85

1861), to file the informations therefor and to direct
and control the prosecution of said cases.
Several reasons are advanced by the Solicitor General
for his aforesaid postulation, viz:
1. The exclusive authority vested in the Tanodbayan by
Section 17 of Presidential Decree No. 1630 and Section
3 of Presidential Decree No. 1861 is confined only to the
filing of the information and directing and controlling
the prosecution of the cases cognizable by the
Sandiganbayan, but does not include the authority to
file a petition for forfeiture. An information, as defined
under Section 4, Rule 110, of the Rules of Court, is
different from a petition, in that an information
necessarily refers to a criminal proceeding while a
petition does not.
2. It is the intention of the legislature to delineate
forfeiture proceedings under Republic Act No. 1379
from the rest of the violations of Republic Act No. 3019,
as may be implied from a reading of Section 9 of
Republic Act No. 3019 (penalties for violations of
Sections 3, 4, 5, and 6 thereof), which does not include
Section 8 (forfeiture judgments) of the same law within
the punishments usually associated with criminal
proceedings, such as imprisonment and/or perpetual
disqualification from public office.
3. The provision of Republic Act No. 1379 authorizing
the Solicitor General to file the petition for forfeiture
being a special and specific provision, should prevail
over Presidential Decrees Nos. 1630 and 1861 which
contain general provisions involving violations not only
of Republic Act No. 1379 but also of Republic Act No.
3019.
ISSUE: WHETHER it is the Office of the Ombudsman or
the Office of the Solicitor General which has the
authority to file a petition for forfeiture of unlawfully
acquired wealth as provided for in Republic Act No.
1379.1
RULING: SOLICITOR GENERAL
The authority thereafter restored to the then
Tanodbayan (Ombudsman) to file informations for cases
cognizable by the Sandiganbayan does not include the
filing of a petition for forfeiture.
An information is an accusation in writing charging a
person with an offense and requires a criminal
proceeding; a petition for forfeiture involves a civil
action in rem.
The Solicitor General was, therefore, acting within the
scope of his authority when he filed the petition for
forfeiture before the Sandiganbayan.
Besides, such authority of the Solicitor General is not an
entirely new concept if we are to consider that under
Executive Order No. 14, the Solicitor General is
empowered to assist in the filing and prosecution of
cases for a violation thereof, including forfeiture
proceedings under Republic Act No. 1379 in connection
with Executive Orders Nos. 1 and 2.
CIVIL PROCEDURE CASE DIGESTS - 1
RATIO: Before the creation of the Sandiganbayan, it was
the Solicitor General who was authorized to initiate
forfeiture proceedings before the then court of first
instance of the city or province where the public officer
or employee resides or holds office, pursuant to Section
2 of Republic Act No. 13798 which reads:
See. 2. Filing of petition.—Whenever any public officer
or employee has acquired during his incumbency an
amount of property which is manifestly out of
proportion to s salary as such public officer or employee
and to his other lawful income and the income from
legitimately acquired property, said property shall be
presumed prima facie to have been unlawfully acquired.
The Solicitor General, upon complaint by any taxpayer
to the city or provincial fiscal who shall conduct a
previous inquiry similar to preliminary investigations in
criminal cases and shall certify to the Solicitor General
that there is reasonable ground to believe that there
has been committed a violation of this Act and the
respondent is probably guilty thereof, shall file, in the
name and on behalf of the Republic of the Philippines,
in the Court of First Instance of the city or province
where said public officer or employee resides or holds
office, a petition for a writ commanding said officer or
employee to show cause why the property aforesaid, or
any part thereof, should not be declared property of the
State: ...
Thereafter, Presidential Decree No. 1486 was
promulgated on June 11, 1978 providing for the
creation of the Sandiganbayan and vesting it, under
Section 4 thereof, with original and exclusive
jurisdiction to try and decide, among others:
(a) Violations of Republic Act No. 3019, as amended,
otherwise known as the Anti-Graft and Corrupt
Practices Act and Republic Act No. 1379;
(b) Crimes committed by public officers or employees,
including those employed in government-owned or
controlled corporations, embraced in Title VII of the
Revised Penal Code;
(c) Other crimes or offenses committed by public
officers or employees including those employed in
government-owned or controlled corporations in
relation to their office; Provided, that in case private
individuals are accused as principals, accomplices or
accessories in the commission of the crimes
hereinabove mentioned, they shall be tried jointly with
the public officers or employees concerned.
xxx xxx xx
(d) Civil suits brought in connection with the
aforementioned crimes for restitution or reparation of
damages, recovery of the instruments and effects of the
crimes, or forfeiture proceedings provided for under
Republic Act No. 1379;
(e) Civil actions brought under Articles 32 and 34 of the
Civil Code.
xxx xxx xxx
Subsequently, Presidential Decree No. 1606 was issued
on December 10, 1978 expressly repealing Presidential
Decree No. 1486 and revising in the process the
jurisdiction of the Sandiganbayan by removing
Page 36 of 85

therefrom the civil cases stated in Section 4(d) and (e)
of Presidential Decree No. 1486 which included
forfeiture proceedings provided for under Republic Act
No. 1379.
Section 20 of Batas Pambansa Blg. 129 expanded the
exclusive original jurisdiction of the Sandiganbayan over
the offenses enumerated in Section 4 of Presidential
Decree No. 1606 to embrace all such offenses
irrespective of the imposable penalty, but Presidential
Decree No. 1606 was subsequently amended, first by
Presidential Decree No. 1860 and eventually by
Presidential Decree No. 1861, establishing the
jurisdiction of the Sandiganbayan:
SEC. 4. Jurisdiction.—The Sandiganbayan shall exercise:
(a) Exclusive original jurisdiction in all cases involving:
(1) Violations of Republic Act No. 3019, as amended,
otherwise known as the Anti-Graft and Corrupt
Practices Act, Republic Act No. 1379, and Chapter II,
Section 2, Title VII of the Revised Penal Code;
(2) Other offenses or felonies committed by public
officers and employees in relation to their office,
including those employed in government-owned or
controlled corporations, whether simple or complexed
with other crimes, where the penalty prescribed by law
is higher than prision correcional or imprisonment for
six (6) years, or a fine of P6,000.00: PROVIDED,
HOWEVER, that offenses or felonies mentioned in this
paragraph where the penalty prescribed by law does
not exceed prision correcional or imprisonment for six
(6) years or a fine of P6,000.00 shall be tried by the
proper Regional Trial Court, Metropolitan Trial Court,
Municipal Trial Court and Municipal Circuit Trial Court.
(b) Exclusive appellate jurisdiction:
(1) On appeal, from the final judgments, resolutions or
orders of the Regional Trial Courts in cases originally
decided by them in their respective territorial
jurisdiction.
(2) By petition for review, from the final judgments,
resolutions or orders of the Regional Trial Courts, in the
exercise of their appellate jurisdiction over cases
originally decided by the Metropolitan Trial Courts,
Municipal Trial Courts and Municipal Circuit Trial Courts,
in their respective jurisdiction.
On the foregoing considerations, there is no issue that
jurisdiction over violations of Republic Acts Nos. 3019
and 1379 now rests with the Sandiganbayan.
Concomitant with this transfer of jurisdiction, however,
is the question of whether such transfer necessarily
involves a transfer of the authority to file a petition for
forfeiture from the Solicitor General to the
Ombudsman. The Sandiganbayan holds in the
affirmative; the Solicitor General opines otherwise.
The resolution of the main substantive issue posed in
the present petition renders imperative a review of the
powers of the present Special Prosecutor (formerly
called the Tanodbayan) and of the Ombudsman (who is
now the Tanodbayan).
CIVIL PROCEDURE CASE DIGESTS - 1
Presidential Decree No. 1487, which was enacted on
June 11, 1978 at the same time that Presidential Decree
No. 1486 was passed, is the primary law creating the
Office of the Ombudsman, then known as the
Tanodbayan. The powers of the then Tanodbayan were
as follows:
SEC. 10. Powers.—The Tanodbayan shall have the
following powers:
(a) He may investigate, on complaint, any administrative
act of any administrative agency including any
government-owned or controlled corporation;
xxx xxx xxx
SEC. 17. Prosecution of public personnel.—If the
Tanodbayan has reason to believe that any public
official, employee or other person has acted in a
manner resulting in a failure of justice, he shall file and
prosecute the corresponding criminal, civil, or
administrative case before the Sandiganbayan or the
proper court or body.
It is important to note that when the Tanodbayan was
created, it initially had no authority to prosecute cases
falling within the jurisdiction of the Sandiganbayan as
provided for under Section 4 of Presidential Decree No.
1486 hereinbefore mentioned. It was the Chief Special
Prosecutor who was vested with such authority
pursuant to Section 12 of said decree, thus:
SEC. 12. Office of the Chief Special Prosecutor.—The
provisions of any law or rule to the contrary
notwithstanding, the direction and control of the
prosecution of cases mentioned in Section 4 thereof,
shall be exercised by a Chief Special Prosecutor ... .
The Chief Special Prosecutor ... shall have exclusive
authority to conduct preliminary investigations of all
complaints filed with the Sandiganbayan, to file
informations and conduct the prosecution of all cases ...
A perusal of Sections 4(d) and 12 of Presidential Decree
No. 1486, in conjunction with Section 2 of Republic Act
No. 1379, readily reveals that Presidential Decree No.
1486 had impliedly repealed Section 2 of Republic Act
No. 1379 by transferring both the jurisdiction of the
former courts of first instance over and the authority of
the Solicitor General to file a petition for forfeiture
under Republic Act No. 1379 to the Sandiganbayan and
the then Chief Special Prosecutor, respectively.
Then, Presidential Decree No. 1607 was enacted on
December 10, 1978, amending the power of the former
Tanodbayan to investigate administrative complaints
and providing for the creation of the Office of the Chief
Special Prosecutor whose powers were substantially
retained by the later law, in this wise:
SEC. 10. Powers.—The Tanodbayan shall have the
following powers:
(a) He may investigate, on complaint by any person or
on his own motion or initiative, any administrative act
whether amounting to any criminal offense or not of
any administrative agency including any government-
owned or controlled corporation;
xxx xxx xxx
SEC. 17. Office of the Chief Special Prosecutor.—
Page 37 of 85

xxx xxx xxx
The Chief Special Prosecutor, ... shall have the exclusive
authority to conduct preliminary investigation of all
cases cognizable by the Sandiganbayan; to file
informations therefor and to direct and control the
prosecution of d cases therein; ... .
xxx xxx xxx
SEC. 19. Prosecution of Public Personnel or Other
Person.—If the Tanodbayan has reason to believe that
any public official, employee, or other person has acted
in a manner warranting criminal or disciplinary action or
proceedings, he shall cause him to be investigated by
the Office of the Chief Special Prosecutor who shall file
and prosecute the corresponding criminal or
administrative case before the Sandiganbayan or the
proper court or before the proper administrative
agency. ...
The scope of the then Tanodbayan's authority was
broadened on July 18, 1979 by a subsequent law,
Presidential Decree No. 1630, to include, aside from the
power to investigate any administrative act whether
amounting to any criminal offense or not of any
administrative agency, the following powers: to file the
necessary information or complaint with the
Sandiganbayan or any proper court or administrative
agency and prosecute the same if, after preliminary
investigation, he finds a prima facie case; and to file and
prosecute civil and administrative cases involving graft
and corrupt practices and such other offenses
committed by public officers and employees, including
those in government-owned or controlled corporations,
in relation to their office.9 The exclusive authority to
conduct preliminary investigation of all cases cognizable
by the Sandiganbayan, to file informations therefor and
to direct and control the prosecution of said cases was
also specifically restored by said decree to the
Tanodbayan.10 In addition, the power to conduct the
necessary investigation and to file and prosecute the
corresponding criminal and administrative cases before
the Sandiganbayan or the proper court or before the
proper administrative agency against any public
personnel who has acted in a manner warranting
criminal or disciplinary action or proceedings was
likewise transferred from the Chief Special Prosecutor
to the Tanodbayan.
Thereafter, when Presidential Decree No. 1606 was
amended by Presidential Decrees Nos. 1860 and 1861
on January 14, 1983 and March 23, 1983, respectively,
both amendatory decrees contained a virtually identical
Section 3 granting him the same authority, to wit:
SEC. 3. The provisions of this decree notwithstanding,
the Office of the Tanodbayan shall continue to have the
exclusive authority to conduct preliminary investigation,
file the necessary information, and direct and control
the prosecution of all cases enumerated in Section 4 of
Presidential Decree No. 1606, whether such cases be
within the exclusive original/appellate jurisdiction of the
Sandiganbayan or the appropriate courts in accordance
with the provisions of Presidential Decree No. 1630.
CIVIL PROCEDURE CASE DIGESTS - 1
With the ratification of the present Constitution, the
existing Tanodbayan became known as the Office of the
Special Prosecutor which continued to exercise its
powers except those conferred on the Office of the
Ombudsman to be known as the Tanodbayan created
under the said Constitution.12 The Office of the
Ombudsman, and the Office of the Special Prosecutor
were officially and respectively created under Republic
Act No. 6770, otherwise known as the Ombudsman Act
of 1989, and Executive Order No. 244.
At present, the powers of the Ombudsman, as defined
by Republic Act No. 6770 corollary to Section 13, Article
XI of the 1987 Constitution, include, inter alia, the
authority to: (1) investigate and prosecute on its own or
on complaint by any person, any act or omission of any
public officer or employee, office or agency, when such
act or omission appears to be illegal, unjust, improper
or inefficient. It has primary jurisdiction over cases
cognizable by the Sandiganbayan and, in the exercise of
this primary jurisdiction, it may take over, at any stage,
from any investigatory agency of Government, the
investigation of such cases;13 and (2) investigate and
initiate the proper action for the recovery of ill-gotten
and/or unexplained wealth amassed after February 25,
1986 and the prosecution of the parties involved there.
It follows that these powers vested in the Ombudsman
by the Constitution and the law have been removed
from the erstwhile Tanodbayan (now called the Special
Prosecutor) and may no longer be exercised by the
latter. The powers of the previous Tanodbayan is now
limited, under the supervision and control and upon the
authority of the Ombudsman, to the following: (1) to
conduct preliminary investigation and prosecute
criminal cases within the jurisdiction of the
Sandiganbayan; (2) to enter into plea bargaining
agreements; and (3) to perform such other duties
assigned to it by the Ombudsman.
In Zaldivar vs. Sandiganbayan, et al., the powers of the
former Tanodbayan were explained as follows:
Under the 1987 Constitution, the Ombudsman (as
distinguished from the incumbent Tanodbayan) is
charged with the duty to:
Investigate on its own, or on complaint by any person,
any act or omission of any public official, employee,
office or agency, when such act or omission appears to
be illegal, unjust, improper or inefficient.
The Constitution likewise provides that:
The existing Tanodbayan shall hereafter be known as
the Office of the Special Prosecutor. It shall continue to
function and exercise its powers as now or hereafter
may be provided by law, except those conferred on the
Office of the Ombudsman created under this
Constitution. (Art. XI, Section 7)
Now then, inasmuch as the aforementioned duty is
given to the Ombudsman, the incumbent Tanodbayan
(called Special Prosecutor under the 1987 Constitution
and who is supposed to retain powers and duties NOT
Page 38 of 85

GIVEN to the Ombudsman) is clearly without authority
to conduct preliminary investigations and to direct the
filing of criminal cases with the Sandiganbayan, except
upon orders of the Ombudsman . This right to do so was
lost effective February 2, 1987. From that time, he has
been divested of such authority.
Under the present Constitution, the Special Prosecutor
(Raul Gonzales) is a mere subordinate of the
Tanodbayan (Ombudsman) and can investigate and
prosecute cases only upon the latter's authority or
orders. The Special Prosecutor cannot initiate the
prosecution of cases but can only conduct the same if
instructed to do so by the Ombudsman. Even his
original power to issue subpoena, which he still claims
under Section 10(d) of PD 1630, is now deemed
transferred to the Ombudsman, who may however,
retain it in the Special Prosecutor in connection with the
cases he is ordered to investigate.
In the light of the foregoing pronouncements, there is
no doubt that the power of the present Special
Prosecutor to conduct preliminary investigation and to
prosecute is subject to the following limitations: (a) it
extends only to criminal cases within the jurisdiction of
the Sandiganbayan; and (b) the same may be exercised
only by authority of the Ombudsman.
The rule is settled that forfeiture proceedings are
actions in rem17 and therefore, civil in nature.
Parenthetically, considering the limited authority of the
present Special Prosecutor, he is not allowed to file and
prosecute forfeiture cases provided for under Republic
Act No. 1379 even if the same falls within the
jurisdiction of the Sandiganbayan. On the premise that
the incumbent Special Prosecutor cannot file the
petition, is the Ombudsman empowered to initiate and
prosecute the same?
A perusal of the law originally creating the Office of the
Ombudsman then (to be known as the Tanodbayan),
and the amendatory laws issued subsequent thereto
will show that, at its inception, the Office of the
Ombudsman was already vested with the power to
investigate and prosecute civil and criminal cases before
the Sandiganbayan and even the regular courts. In
resume Presidential Decree No. 1487 provided:
SEC. 17. Prosecution of public personnel.—If the
Tanodbayan has reason to believe that any public
official, employee, or other person has acted in a
manner resulting in a failure of justice, he shall file and
prosecute the corresponding criminal, civil, or
administrative case before the Sandiganbayan or the
proper court of body.
and Presidential Decree No. 1630, on its part, had this
more detailed provision:
SEC. 10. Powers.—The Tanodbayan shall have the
following powers:
xxx xxx xxx
(e) If after preliminary investigation he finds a prima
facie case, he may file the necessary information or
CIVIL PROCEDURE CASE DIGESTS - 1
complaint with the Sandiganbayan or any proper court
or administrative agency and prosecute the same;
(f) He may file and prosecute civil and administrative
cases involving graft and corrupt practices and such
other offenses committed by public officers and
employees, including those in government-owned or
controlled corporations, in relation to their office.
Presidential Decree No. 1630 was the existing law
governing the then Tanodbayan when Republic Act No.
6770 was enacted providing for the functional and
structural organization of the present Office of the
Ombudsman. This later law retained in the Ombudsman
the power of the former Tanodbayan to investigate and
prosecute on its own or on complaint by any person,
any act or omission of any public officer or employee,
office or agency, when such act or omission appears to
be illegal, unjust, improper or inefficient. In addition,
the Ombudsman is now vested with primary jurisdiction
over cases cognizable by the Sandiganbayan. It would
appear, therefore, that, as declared by respondent
Sandiganbayan, it is the Ombudsman who should file
the petition for forfeiture involved in this case.
Nonetheless, while we do not discount the authority of
the Ombudsman, we believe and so hold that the
exercise of his correlative powers to both investigate
and initiate the proper action for the recovery of ill-
gotten and/or unexplained wealth is restricted only to
cases for the recovery of ill-gotten and/or unexplained
wealth which were amassed after February 25, 1986.18
Prior to said date, the Ombudsman is without authority
to initiate such forfeiture proceedings. We, however,
uphold his authority to investigate cases for the
forfeiture or recovery of such ill-gotten and/or
unexplained wealth amassed even before the
aforementioned date, pursuant to his general
investigatory power under Section 15(l) of Republic Act
No. 6770.
In the case at bar, the alleged unexplained wealth of
respondent Macario Asistio, Jr. was supposed to have
been acquired from 1981 to 1983. Verily, the
Ombudsman, like the Special Prosecutor, is without
authority to initiate and file the petition for forfeiture
against respondent Asistio.
It is our considered opinion, therefore, that in cases of
unlawfully acquired wealth amassed before February
25, 1986, as is the situation obtaining in the case at
bar, it is the Solicitor General who should file the
petition for forfeiture. The reason is manifestly
supplied by an analysis of the interplay of antecedent
legislation.
It will be recalled that when Presidential Decree No.
1486 was issued on June 11, 19781 it vested in the
Sandiganbayan jurisdiction over forfeiture proceedings
provided for under Republic Act No. 1379, Section 12 of
the same decree gave the Chief Special Prosecutor the
authority to prosecute forfeiture cases. This should be
taken as merely an implied repeal by Presidential
Page 39 of 85

Decree No. 1486 of the jurisdiction of the former courts
of first instance and the authority of the Solicitor
General to file a petition for forfeiture under Section 2
of Republic Act No. 1379 by transferring said jurisdiction
and authority to the Sandiganbayan and the Chief
Special Prosecutor, respectively.
However, on December 10, 1978, Presidential Decree
No. 1606 was enacted expressly repealing Presidential
Decree No. 1486. Issued on the same date was
Presidential Decree No. 1607 which declared the official
creation of the Office of the Chief Special Prosecutor,
with Section 17 thereof providing for its exclusive
authority to conduct preliminary investigation of all
cases cognizable by the Sandiganbayan, file
informations therefor, and direct and control the
prosecution of said cases therein. Still and all, it now
bears stressing that, under the state of the law at that
juncture, the authority of the Chief Special Prosecutor
no longer included the right to file actions for forfeiture
under Republic Act No. 1379, nor was such authority
vested in any other office or agency.
It is a respected rule of statutory construction that
"where a law which repeals a prior law, not expressly
but by implication, is itself repealed, ... the repeal of the
repealing law revives the prior law, unless the language
of the repealing statute provides otherwise.19 Hence,
the repeal of Presidential Decree No. 1486 necessarily
revived the authority of the Solicitor General to file a
petition for forfeiture under Section 2 of Republic Act
No. 1379, but not the jurisdiction of the quondam
courts of first instance over the case nor the authority
of the provincial or city fiscals to conduct the
preliminary investigation therefor, since said powers at
that time remained in the Sandiganbayan and the Chief
Special Prosecutor. That such was the intendment of
the law can be irresistibly deduced from a reading of
Section 4 of Presidential Decree No. 1606 retaining in
the Sandiganbayan jurisdiction over violations of
Republic Act No. 1379, and of Section 17 of Presidential
Decree No. 1607 which vested in the Chief Special
Prosecutor the right to conduct a preliminary
investigation and to file only informations for cases
cognizable by the Sandiganbayan.
We agree with the Solicitor General that the authority
thereafter restored to the then Tanodbayan to file
informations for cases cognizable by the Sandiganbayan
does not include the filing of a petition for forfeiture. As
earlier mentioned, an information is an accusation in
writing charging a person with an offense and requires a
criminal proceeding; a petition for forfeiture involves a
civil action in rem. The Solicitor General was, therefore,
acting within the scope of his authority when he filed
the petition for forfeiture before the Sandiganbayan.
Besides, such authority of the Solicitor General is not an
entirely new concept if we are to consider that under
Executive Order No. 14, the Solicitor General is
empowered to assist in the filing and prosecution of
cases for a violation thereof, including forfeiture
CIVIL PROCEDURE CASE DIGESTS - 1
proceedings under Republic Act No. 1379 in connection
with Executive Orders Nos. 1 and 2.
GG. ALFREDO T. ROMUALDEZ, G.R. No. 161602 vs. THE
HONORABLE SANDIGANBAYAN
FACTS: On March 6, 1996 respondent Republic of the
Philippines (Republic) filed an action for the forfeiture of
alleged unlawfully acquired property with the
Sandiganbayan in Civil Case 0167 against petitioner
Alfredo T. Romualdez and his wife Agnes Sison
Romualdez as well as against Romson Realty, Inc., R & S
Transport, Inc., Fidelity Management, Inc., and Dio
Island Resort, Inc. (collectively, the Romualdezes)
pursuant to Republic Act (R.A.) 1379.
On January 16, 2000 the Romualdezes filed a motion to
dismiss the action on grounds of a) violation of their
right to a speedy disposition of their case; b) lack of
jurisdiction of the Sandiganbayan over the action; c)
prematurity; d) prescription; and e) litis pendentia. On
September 11, 2002 the Sandiganbayan denied the
motion. It also denied on March 10, 2003 their
subsequent motion for reconsideration.
On March 31, 2003 the Romualdezes next filed a motion
for preliminary investigation and to suspend
proceedings. They claim that since Civil Case 0167 was a
forfeiture proceeding filed under R.A. 1379, the
Ombudsman should have first conducted a previous
inquiry similar to preliminary investigations in criminal
cases before the filing of the case pursuant to Section 2
of the law.
In its Comment on the motion, the Republic pointed out
that the Office of the Ombudsman in fact conducted
such a preliminary investigation in 1991 in OMB-0-91-
0820 and issued on January 22, 1992 a resolution,
recommending the endorsement of the matter to the
Office of the Solicitor General (OSG) for the filing of the
forfeiture case.
On August 13, 2003 the Sandiganbayan issued a
resolution, denying the Romualdezes March 31, 2003
motion. It also denied by resolution on December 3,
2003 their subsequent motion for reconsideration.
Thus, the Romualdezes filed the present petition for
certiorari and prohibition, seeking to annul the
Sandiganbayans rulings and prevent it from further
proceeding with Civil Case 0167 until another
preliminary investigation is conducted in their case.
ISSUE: Whether or not the preliminary investigation
that the Ombudsman conducted in OMB-0-91-0820 in
1991 satisfied the requirement of the law in forfeiture
cases.
RULING: The Supreme Court held that there is no
reason which exists for suspending or interrupting the
conduct of the forfeiture proceedings before the
Sandiganbayan. It stated that it cannot subscribe to the
Romualdezes’ claim that they are entitled to a new
Page 40 of 85

preliminary investigation since they had no opportunity
to take part in the one held in 1991, in OMB-0-91-0820.
The High Court aptly pointed out that:
Respondents admit that the subpoena for that
investigation had been sent to their last known
residence at the time it was conducted. The Republic
also categorically insists that the appropriate subpoena
had been served on the Romualdezes. Accordingly, the
Ombudsman could not be faulted for proceeding with
the investigation of the Romualdezes’ cases when they
did not show up despite notice being sent to them at
their last known residence.
The New Rules on Criminal Procedure "does not require
as a condition sine qua non to the validity of the
proceedings [in the preliminary investigation] the
presence of the accused for as long as efforts to reach
him were made, and an opportunity to controvert the
evidence of the complainant is accorded him.
The obvious purpose of the rule is to block attempts of
unscrupulous respondents to thwart the prosecution of
offenses by hiding themselves or by employing dilatory
tactics" (Mercado v. Court of Appeals, 315 Phil. 657, 662
(1995). In sum, there is no reason for suspending or
interrupting the conduct of the forfeiture proceedings
before the Sandiganbayan.
HH. Office of the Ombudsman vs. ENOC
FACTS: This is a petition for review on certiorari of the
order dated 100700 of the RTC Branch 19 of Digos,
Davao del Sur dismissing criminal cases against
respondents. Respondents were charged with 11 counts
of malversation through falsification, based on alleged
purchases of medicine and food assistance for cultural
community members, and one count of violation of R.A.
No. 3019 in connection with the purchases of supplies
for the OSCC without bidding/canvass.
As none of the respondents has the "rank" required
under R.A. No. 8249 to be tried for the said crimes in
the Sandiganbayan, the information were filed by the
Ombudsman in the RTC. Invoking the ruling in Uy vs.
Sandiganbayan, respondents move to quash arguing
Ombudsman has no authority to prosecute graft cases
falling within the jurisdiction of regular courts.
RTC granted such motion. The office of the Ombudsman
filed a petition contending the trial court erred invoking
Uy vs. Sandiganbayan.
ISSUE: Whether or not the Ombudsman has authority to
prosecute graft cases falling within the jurisdiction of
regular courts
RULING: YES. The Ombudsman has powers to prosecute
not only graft cases within the jurisdiction of the
Sandiganbayan but also those cognizable by the regular
courts. [ruling from here same with Uy vs.
Sandiganbayan] The Ombudsman is clothed with
authority to conduct preliminary investigation and to
CIVIL PROCEDURE CASE DIGESTS - 1
prosecute all criminal cases involving public officers and
employees, not only those within the jurisdiction of the
Sandiganbayan, but those within the jurisdiction of the
regular courts as well. The authority of the Ombudsman
to investigate and prosecute offenses committed by
public officers and employees is founded in Section 15
and Section 11 of RA 6770.
a. Section 15 vests the Ombudsman with the power to
investigate and prosecute any act or omission of any
public officer or employee, office or agency, when such
act or omission appears to be illegal, unjust, improper
or inefficient. It has primary jurisdiction over cases
cognizable by the Sandiganbayan and, in the exercise of
this primary jurisdiction, it may take over, at any stage,
from any investigatory agency of Government, the
investigation of such cases.
b. Section 11 grants the Office of the Special Prosecutor,
an organic component of the Office of the Ombudsman
under the latter's supervision and control, the power to
conduct preliminary investigation and prosecute
criminal cases within the jurisdiction of the
Sandiganbayan.
The power to investigate and to prosecute granted by
law to the Ombudsman is plenary and unqualified. It
pertains to any act or omission of any public officer or
employee when such act or omission appears to be
illegal, unjust, improper or inefficient. The law does not
make a distinction between cases cognizable by the
Sandiganbayan and those cognizable by regular courts.
8. It has been held that the clause "any illegal act or
omission of any public official" is broad enough to
embrace any crime committed by a public officer or
employee.
The grant of this authority does not necessarily imply
the exclusion from its jurisdiction of cases involving
public officers and employees cognizable by other
courts. The exercise by the Ombudsman of his primary
jurisdiction over cases cognizable by the Sandiganbayan
is not incompatible with the discharge of his duty to
investigate and prosecute other offenses committed by
public officers and employees.
Indeed, it must be stressed that the powers granted by
the legislature to the Ombudsman are very broad and
encompass all kinds of malfeasance, misfeasance and
non-feasance committed by public officers and
employees during their tenure of office.
The reference made by RA 6770 to cases cognizable by
the Sandiganbayan, particularly in Section 15(1) giving
the Ombudsman primary jurisdiction over cases
cognizable by the Sandiganbayan, and Section 11 (4)
granting the Special Prosecutor the power to conduct
preliminary investigation and prosecute criminal cases
within the jurisdiction of the Sandiganbayan, should not
be construed as confining the scope of the investigatory
and prosecutory power of the Ombudsman to such
cases.
The jurisdiction of the Office of the Ombudsman should
Page 41 of 85

not be equated with the limited authority of the Special
Prosecutor under Section 11 of RA 6770.
The Office of the Special Prosecutor is merely a
component of the Office of the Ombudsman and may
only act under the supervision and control and upon
authority of the Ombudsman. Its power to conduct
preliminary investigation and to prosecute is limited to
criminal cases within the jurisdiction of the
Sandiganbayan. Certainly, the lawmakers did not intend
to confine the investigatory and prosecutory power of
the Ombudsman to these types of cases.
The Ombudsman is mandated by law to act on all
complaints against officers and employees of the
government and to enforce their administrative, civil
and criminal liability in every case where the evidence
warrants
a. To carry out this duty, the law allows him to utilize
the personnel of his office and/or designate any fiscal,
state prosecutor or lawyer in the government service to
act as special investigator or prosecutor to assist in the
investigation and prosecution of certain cases.
b. The law likewise allows him to direct the Special
Prosecutor to prosecute cases outside the
Sandiganbayan's jurisdiction in accordance with Section
11 (4c) of RA 6770, i.e. to perform such duties assigned
to it by the Ombudsman.
II. Garcia vs Mojica
[G.R. No. 139043. September 10, 1999]
FACTS: On May 7, 1998, petitioner, in his capacity as
Cebu City mayor, signed a contract with F.E. Zuellig for
the supply of asphalt to the city. The contract covers
the period 1998-2001, which period was to commence
on September 1998 when the first delivery should have
been made by F.E. Zuellig.
Sometime in March 1999, news reports came out
regarding the alleged anomalous purchase of asphalt by
Cebu City, through the contract signed by petitioner.
This prompted the Office of the Ombudsman (Visayas)
to conduct an inquiry into the matter.[1]
Respondent Jesus Rodrigo T. Tagaan, special
prosecution officer of the Office of the Ombudsman,
was assigned to conduct the inquiry, docketed as INQ-
VIS-99-0132. After his investigation, he recommended
that the said inquiry be upgraded to criminal and
administrative cases against petitioner and the other
city officials involved. Respondent Arturo C. Mojica,
Deputy Ombudsman for the Visayas, approved this
recommendation.
ISSUES:
1. WON Garcia may be held administratively liable.
2. WON the Ombudsman was stripped of its powers by
virtue of the LGC.
RULING:
1. NO. “In a number of cases, we have repeatedly held
CIVIL PROCEDURE CASE DIGESTS - 1
that a reelected local official may not be held
administratively accountable for misconduct committed
during his prior term of office.[24] The rationale for this
holding is that when the electorate put him back into
office, it is presumed that it did so with full knowledge
of his life and character, including his past misconduct.
If, armed with such knowledge, it still reelects him, then
such reelection is considered a condonation of his past
misdeeds.
However, in the present case, respondents point out
that the contract entered into by petitioner with F.E.
Zuellig was signed just four days before the date of the
elections. It was not made an issue during the election,
and so the electorate could not be said to have voted
for petitioner with knowledge of this particular aspect
of his life and character.
For his part, petitioner contends that “the only
conclusive determining factor” as regards the people’s
thinking on the matter is an election. On this point, we
agree with petitioner. That the people voted for an
official with knowledge of his character is presumed,
precisely to eliminate the need to determine, in factual
terms, the extent of this knowledge. Such an
undertaking will obviously be impossible. Our rulings on
the matter do not distinguish the precise timing or
period when the misconduct was committed, reckoned
from the date of the official’s reelection, except that it
must be prior to said date.”
The above ruling in Salalima applies to this case.
Petitioner cannot anymore be held administratively
liable for an act done during his previous term, that is,
his signing of the contract with F.E. Zuellig.
The agreement between petitioner (representing Cebu
City) and F.E. Zuellig was perfected on the date the
contract was signed, during petitioner’s prior term. At
that moment, petitioner already acceded to the terms
of the contract, including stipulations now alleged to be
prejudicial to the city government. Thus, any culpability
petitioner may have in signing the contract already
became extant on the day the contract was signed. It
hardly matters that the deliveries under the contract
are supposed to have been made months later.
While petitioner can no longer be held administratively
liable for signing the contract with F. E. Zuellig,
however, this should not prejudice the filing of any case
other than administrative against petitioner. Our ruling
in this case, may not be taken to mean the total
exoneration of petitioner for whatever wrongdoing, if
any, might have been committed in signing the subject
contract. The ruling now is limited to the question of
whether or not he may be held administratively liable
therefor, and it is our considered view that he may not.
2. No. Indeed, there is nothing in the Local Government
Code to indicate that it has repealed, whether expressly
or impliedly, the pertinent provisions of the
Ombudsman Act. The two statutes on the specific
Page 42 of 85

matter in question are not so inconsistent, let alone
irreconcilable, as to compel us to only uphold one and
strike down the other. The decision of the Ombudsman
(6 month suspension) will prevail over the LGC (60day
suspension) if the evidence of guilt is strong.
* The power to preventively suspend is available not
only to the Ombudsman but also to the Deputy
Ombudsman.
“SEC. 24. Preventive Suspension. – The Ombudsman or
his Deputy may preventively suspend any officer or
employee under his authority pending an investigation,
if in his judgment the evidence of guilt is strong,”
JJ. Lastimosa v. Vasquez
Provision: Section 31 of the Ombudsman Act of 1989
(R.A. No. 6770):
Designation of Investigators and Prosecutors. — The
Ombudsman may utilize the personnel of his office
and/or designate of deputize any fiscal, state prosecutor
or lawyer in the government service to act as special
investigator or prosecutor to assist in the investigation
and prosecution of certain cases. Those designated or
deputized to assist him as herein provided shall be under
his supervision and control.
Doctrine: When a prosecutor is deputized by the
ombudsman, he becomes under the supervision and
control of the latter.
Facts: On February 18, 1993 Jessica Villacarlos Dayon,
public health nurse of Santa Fe, Cebu, filed a criminal
complaint for frustrated rape and an administrative
complaint for immoral acts, abuse of authority and
grave misconduct against the Municipal Mayor of Santa
Fe, Rogelio Ilustrisimo. Intially, the deputy ombudsman
found no prima facie evidence. After review, Omb.
Vasquez reversed and directed that the mayor be
charged with a criminal case in the RTC.
The case was referred to provincial prosecutor
Lastimosa. She conducted her own preliminary
investigation and found that only acts of lasciviousness
had been committed. She filed a case for acts of
lasciviousness with the MCTC.
As no case for attempted rape had been filed by the
Prosecutor's Office, Deputy Ombudsman Mojica
ordered on July 27, 1994 Provincial Prosecutor Kintanar
and petitioner Lastimosa to show cause why they
should not be punished for contempt for "refusing and
failing to obey the lawful directives" of the Office of the
Ombudsman.
Petitioner contends, the Office of the Ombudsman has
no jurisdiction over the case against the mayor because
the crime involved (rape) was not committed in relation
to a public office. For this reason it is argued that the
Office of the Ombudsman has no authority to place her
and Provincial Prosecutor Kintanar under preventive
suspension for refusing to follow his orders and to cite
CIVIL PROCEDURE CASE DIGESTS - 1
them for indirect contempt for such refusal.
Issues:
1. Whether or not the Office of the Ombudsman has
the power to call on the Provincial Prosecutor to assist
it in the prosecution of the case for attempted rape
against Mayor Ilustrisimo.
2. Whether or not the Office of the Ombudsman has
the power to suspend the prosecutor.
Ruling:
Issue 1: YES. The office of the Ombudsman has the
power to "investigate and prosecute on its own or on
complaint by any person, any act or omission of any
public officer or employee, office or agency, when such
act or omission appears to be illegal, unjust, improper
or inefficient." This power has been held to include the
investigation and prosecution of any crime committed
by a public official regardless of whether the acts or
omissions complained of are related to, or connected
with, or arise from, the performance of his official duty.
It does not matter that the Office of the Provincial
Prosecutor had already conducted the preliminary
investigation and all that remained to be done was for
the Office of the Provincial Prosecutor to file the
corresponding case in court. Even if the preliminary
investigation had been given over to the Provincial
Prosecutor to conduct, his determination of the nature
of the offense to be charged would still be subject to
the approval of the Office of the Ombudsman. This is
because under §31 of the Ombudsman's Act, when a
prosecutor is deputized, he comes under the
"supervision and control" of the Ombudsman which
means that he is subject to the power of the
Ombudsman to direct, review, approve, reverse or
modify his (prosecutor's) decision. Petitioner cannot
legally act on her own and refuse to prepare and file the
information as directed by the Ombudsman.
2: YES. Section 15(g) of the Ombudsman Act gives the
Office of the Ombudsman the power to "punish for
contempt, in accordance with the Rules of Court and
under the same procedure and with the same penalties
provided therein." There is no merit in the argument
that petitioner and Provincial Prosecutor Kintanar
cannot be held liable for contempt because their refusal
arose out of an administrative, rather than judicial,
proceeding before the Office of the Ombudsman.
Whether petitioner's refusal to follow the
Ombudsman's orders constitutes a defiance,
disobedience or resistance of a lawful process, order or
command of the Ombudsman thus making her liable for
indirect contempt under Rule 71, Section 3 of the Rules
of Court is for respondents to determine after
appropriate hearing.
KK. Layno vs Sandiganbayan
Page 43 of 85

G.R. No. 65848, May 24, 1985
Facts: Layno was charged with violating paragraph (e),
Section 3 of Republic Act No. 3019 as amended. was
then arraigned on October 3, 1983, and was suspended
pendente lite, by respondent Sandiganbayan on October
26, 1983.
The validity of the mandatory provision of the Anti-Graft
and Corrupt Practices Act, suspending from office any
public officer against whom any criminal prosecution
under a valid information under such statute, is assailed
in this certiorari and prohibition proceeding on the
ground that it is violative of the constitutional
presumption of innocence.
Issue: Whether or not the provision is violative of the
constitutional presumption of innocence.
Held: Yes. It is a basic assumption of the electoral
process implicit in the right of suffrage that the people
are entitled to the services of elective officials of their
choice. For misfeasance or malfeasance, any of them
could, of course, be proceeded against administratively
or, as in this instance, criminally. In either case, his
culpability must be established. Moreover, if there be a
criminal action, he is entitled to the constitutional
presumption of innocence. A preventive suspension
may be justified. Its continuance, however, for an
unreasonable length of time raises a due process
question. For even if thereafter he were acquitted, in
the meanwhile his right to hold office had been
nullified. Clearly, there would be in such a case an
injustice suffered by him. Nor is he the only victim.
There is injustice inflicted likewise on the people of
Lianga. They were deprived of the services of the man
they had elected to serve as mayor. In that sense, to
paraphrase Justice Cardozo, the protracted continuance
of this preventive suspension had outrun the bounds of
reason and resulted in sheer oppression. A denial of
due process is thus quite manifest. It is to avoid such an
unconstitutional application that the order of
suspension should be lifted.
LL. HONORIO BERNARDO, Petitioner, vs. HEIRS OF
EUSEBIO VILLEGAS, Respondents.
G.R. No. 183357, March 15, 2010
Justice Perez, Ponente
FACTS: A complaint dated 14 November 2000 for accion
publiciana was filed by respondent Heirs of Eusebio
Villegas against petitioner Honorio Bernardo, Romeo
Gaza and Monina Francisco. Respondents had earlier
filed an ejectment case against the trio, with the
Municipal Trial Court of Binangonan, Rizal, which case
was dismissed on the ground of lack of jurisdiction for
having been filed beyond the one-year prescriptive
period for filing a forcible entry case.
Respondents alleged in the Complaint that their father,
Eusebio Villegas, is the registered owner of a parcel of
land covered by Transfer Certificate of Title (TCT) No.
CIVIL PROCEDURE CASE DIGESTS - 1
46891 with an area of 18,369 square meters and
situated in Barangay Pag-asa, Binangonan, Rizal; that
petitioner, by stealth and in the guise of merely grazing
his cattle, surreptitiously entered into possession of a
portion of respondents’ land; that petitioner conspired
and confederated with Gaza and Francisco by illegally
constructing their own houses on the subject land; that
the issue of possession was brought to the barangay for
conciliation but no settlement was reached by the
parties; and that petitioner, Gaza and Francisco had
forcibly, unlawfully and unjustly possessed and continue
to possess the subject property and had refused to
vacate the same.
Petitioner denied that taking possession of any portion
of the property of respondents. He argued that the
cause of action is barred by the judgment in the
ejectment case. He claimed that he had been in
possession of his land since the early 1950s. As he did
before the MTC, petitioner also alleged lack of
jurisdiction on the part of the RTC.
Issue: Whether or not estoppel bars petitioner from
raising the issue of lack of jurisdiction
Ruling: YES. Petitioner is estopped from questioning the
jurisdiction of the RTC. Under Batas Pambansa Bilang
129, the plenary action of accion publiciana must be
brought before the regional trial courts. With the
modifications introduced by Republic Act No. 7691 in
1994, the jurisdiction of the regional trial courts was
limited to real actions where the assessed value exceeds
P20,000.00, and P50,000.00 where the action is filed in
Metro Manila. Under the law as modified, jurisdiction is
determined by the assessed value of the property.
In the instant case, nowhere in the complaint was the
assessed value of the subject property ever mentioned.
There is no showing on the face of the complaint that
the RTC has jurisdiction exclusive of the MTC. Indeed,
absent any allegation in the complaint of the assessed
value of the property, it cannot readily be determined
which of the two trial courts had original and exclusive
jurisdiction over the case. However, estoppel sets in
when a party participates in all stages of a case before
challenging the jurisdiction of the lower court. One
cannot belatedly reject or repudiate its decision after
voluntarily submitting to its jurisdiction, just to secure
affirmative relief against one's opponent or after failing
to obtain such relief.
Clearly, petitioner failed to point out the omission of the
assessed value in the complaint. Petitioner actively
participated during the trial by adducing evidence and
filing numerous pleadings, none of which mentioned
any defect in the jurisdiction of the RTC. It was only on
appeal before the Court of Appeals, after he obtained
an adverse judgment in the trial court, that petitioner,
for the first time, came up with the argument that the
decision is void because there was no allegation in the
complaint about the value of the property.
Page 44 of 85
 CIVIL PROCEDURE CASE DIGESTS - 1
MM. BF CITILAND CORPORATION V. MARILYN B. for Petition for Review on Certiorari under RULE 65.
OTAKE RULES OF COURT:
RULE 41: APPEAL FROM THE REGIONAL TRIAL COURTS
NATURE: Petition for review of the Resolutions of CA
under RULE 45 SECTION 2. MODES OF APPEAL -
ORDINARY APPEAL. - The appeal to the Court of
FACTS: BF Citiland Corporation is the registered owner Appeals in cases decided by the Regional Trial Court in
of a lot in Parañaque City, with an assessed value of the exercise of its original jurisdiction shall be taken by
P48,000 (based on Tax Declaration). filing a notice of appeal with the court which rendered
the judgment or final order appealed from and serving a
On 24 February 1987, respondent Merlinda B. Bodullo copy thereof upon the adverse party. x x x
bought the adjoining lot.
PETITION FOR REVIEW. - The appeal to the Court of
However, records show respondent occupied not just Appeals in cases decided by the Regional Trial Court in
the lot she purchased. She also encroached upon the exercise of its appellate jurisdiction shall be by
petitioner's lot. petition for review in accordance with Rule 42.
(Emphasis supplied) x x x
On 13 October 2000, petitioner filed in the
Metropolitan Trial Court a complaint for accion
However, in numerous cases, this Court has allowed
publiciana praying: that judgment be rendered ordering
liberal construction of the rules when to do so would
respondent to vacate the subject lot; that respondent
serve the demands of substantial justice.
be ordered to pay P15,000.00 per month by way of
Dismissal of appeals purely on technical grounds is
reasonable compensation for the use of the lot.
frowned upon.
Thus, notwithstanding petitioner's wrong mode of
The MeTC ruled in favor of BF Citiland (except rent was
appeal, the Court of Appeals should not have so easily
P10K/month), even ordering Bodullo to pay P20,000 as
dismissed the petition.
atty’s fees & costs of the suit.
2.) Metropolitan Trial Court – Under BP 129, as
The MeTC also issued writ of execution & granted the
amended, jurisdiction even in accion publiciana cases is
motion for special order of demolition.
determined by the assessed value of the property.
Merlinda Bodulla filed in the RTC a petition for certiorari
With the modifications introduced by REPUBLIC ACT
under RULE 65, seeking dismissal of the case in the
NO. 7691, the jurisdiction of regional trial courts has
MeTC for lack of jurisdiction.
been limited to real actions where the assessed value
exceeds P20,000.00 or P50,000.00 if the action is filed in
RTC reversed the MeTC – case dismissed, for lack of
Metro Manila.
jurisdiction; alleging that a suit for accion publiciana fell
under the exclusive original jurisdiction of the RTC.
If the assessed value is below the said amounts, the
action must be brought before first level courts.
BF Citiland claimed Bodullo was estopped for
participating in all the proceedings of the MeTC.
SEC. 33. JURISDICTION OF METROPOLITAN TRIAL
Bodullon countered that the issue on lack of jurisdiction
COURTS, MUNICIPAL TRIAL COURTS, AND MUNICIPAL
can be raised any time.
CIRCUIT TRIAL COURTS IN CIVIL CASES. - Metropolitan
Trial Courts, Municipal Trial Courts, and Municipal
BF Citiland filed a petition for review under RULE 42:
Circuit Trial Courts shall exercise:
PETITION FOR REVIEW FROM REGIONAL TRIAL COURTS
xxx
TO THE COURT OF APPEALS.
Exclusive original jurisdiction in all civil actions which
involve title to, or possession of, real property, or any
Court of Appeals dismissed case saying the proper
interest therein where the assessed value of the
appeal from the RTC decision is by way of notice of
property or interest therein does not exceed Twenty
appeal. Hence, BF Citiland filed this Petition for Review
thousand pesos (P20,000.00) or, in civil actions in
in the SC.
Metro Manila, where such assessed value does not
ISSUES:
exceed Fifty thousand pesos (P50,000.00) exclusive of
1. What is the proper mode of appeal from the decision
interest, damages of whatever kind, attorney's fees,
of the RTC?
litigation expenses, and costs:
2. Who has jurisdiction on the accion publiciana case?
Provided, That in cases of land not declared for
HELD:
taxation purposes, the value of such property
1.) Notice of Appeal – because the RTC decided the
shall be determined by the assessed value of
case in the exercise of its Original Jurisdiction.
the adjacent lots.
i.e. The case filed in the RTC was an Original Action
Page 45 of 85

The subject lot, with an assessed value below the
jurisdictional limit of P50,000.00 for Metro Manila,
comes within the exclusive original jurisdiction of the
MeTC under BP 129, as amended.
DISPOSITION: WHEREFORE, the Supreme Court GRANT
the petition.
NN. G.R. No. 188832 April 23, 2014
VIVENCIO B. VILLAGRACIA, Petitioner, vs. FIFTH (5th)
SHARI'A DISTRICT COURT and ROLDAN E. MALA,
represented by his father Hadji Kalam T. Mala,
Respondents.
Nature: petition for certiorari with application for
issuance of TRO and/or preliminary injunction to set
aside the Shari'a District Court's decision.
Doctrine: Shari' a District Courts have no jurisdiction
over real actions where one of the parties is not a
Muslim.
FACTS: Roldan E. Mala purchased a parcel of land
located in Maguindanao, from one Ceres Cañete.
Transfer Certificate of Title covering the parcel of land
was issued in Roldan’s name. At the time of the
purchase, Vivencio B. Villagracia occupied the parcel of
land.
Vivencio secured a Katibayan ng Orihinal na Titulo
issued by the Land Registration Authority allegedly
covering the same parcel of land. Roldan had the parcel
of land surveyed. In a report, Geodetic Engineer found
that Vivencio occupied the parcel of land covered by
Roldan’s certificate of title.
To settle his conflicting claim with Vivencio, Roldan
initiated barangay conciliation proceedings before the
Office of the Barangay Chairman. Failing to settle with
Vivencio at the barangay level, Roldan filed an action to
recover the possession of the parcel of land with
respondent Fifth Shari’a District Court.
Roldan alleged that he is a Filipino Muslim; that he is
the registered owner of the lot covered by Transfer
Certificate of Title No. 15633; and that Vivencio
occupied his property, depriving him of the right to use,
possess, and enjoy it.
Respondent Fifth Shari’a District Court ruled that
Roldan, as registered owner, had the better right to
possess the parcel of land. It ordered Vivencio to vacate
the property, turn it over to Roldan.
Vivencio filed a petition for relief from judgment with
prayer for issuance of writ of preliminary injunction.
Vivencio cited Article 155, paragraph (2) of the Code of
Muslim Personal Laws of the Philippines and argued
that Shari’a District Courts may only hear civil actions
and proceedings if both parties are Muslims.
Considering that he is a Christian, Vivencio argued that
CIVIL PROCEDURE CASE DIGESTS - 1
respondent Fifth Shari’a District Court had no
jurisdiction to take cognizance of Roldan’s action for
recovery of possession of a parcel of land.
According to respondent Fifth Shari’a District Court,
Vivencio cited the wrong provision of law. Article 155,
paragraph (2) of the Code of Muslim Personal Laws of
the Philippines refers to the jurisdiction of Shari’a
Circuit Courts, not of Shari’a District Courts. It ruled that
it had jurisdiction over Roldan’s action for recovery of
possession. Regardless of Vivencio being a non-Muslim,
his rights were not prejudiced since respondent Fifth
Shari’a District Court decided the case applying the
provisions of the Civil Code of the Philippines.
Respondent Fifth Shari’a District Court denied
Vivencio’s petition for relief from judgment for lack of
merit. Vivencio filed the petition for certiorari with
prayer for issuance of temporary restraining order with
the SC.
Vivencio argued that respondent Fifth Shari’a District
Court acted without jurisdiction in rendering the
decision. Under Article 143, paragraph (2)(b) of the
Code of Muslim Personal Laws of the Philippines, Shari’a
District Courts may only take cognizance of real actions
where the parties involved are Muslims. Reiterating that
he is not a Muslim, Vivencio argued that respondent
Fifth Shari’a District Court had no jurisdiction over the
subject matter of Roldan’s action.
The Supreme Court subsequently issued a TRO enjoining
the implementation of the writ of execution against
Vivencio.
Issue: Whether or not a Shari’a District Court may
validly hear, try, and decide a real action where one of
the parties is a non-Muslim if the District Court decides
the action applying the provisions of the Civil Code of
the Philippines
Held: NO. Respondent Fifth Shari’a District Court had no
jurisdiction to hear, try, and decide Roldan’s action for
recovery of possession.
Jurisdiction over the subject matter is "the power to
hear and determine cases of the general class to which
the proceedings in question belong." This power is
conferred by law, which may either be the Constitution
or a statute. Since subject matter jurisdiction is a matter
of law, parties cannot choose, consent to, or agree as to
what court or tribunal should decide their disputes. If a
court hears, tries, and decides an action in which it has
no jurisdiction, all its proceedings, including the
judgment rendered, are void.
To determine whether a court has jurisdiction over the
subject matter of the action, the material allegations of
the complaint and the character of the relief sought are
examined.
The law conferring the jurisdiction of Shari’a District
Page 46 of 85

Courts is the Code of the Muslim Personal Laws of the
Philippines. Under Article 143 of the Muslim Code,
Shari’a District Courts have concurrent original
jurisdiction with "existing civil courts" over real actions
not arising from customary contracts wherein the
parties involved are Muslims:
ART 143. Original jurisdiction. – x x x x
(2) Concurrently with existing civil courts, the Shari’a
District Court shall have original jurisdiction over:
xxxx
(b) All other personal and real actions not mentioned in
paragraph 1(d)42 wherein the parties involved are
Muslims except those for forcible entry and unlawful
detainer, which shall fall under the exclusive original
jurisdiction of the Municipal Circuit Court; and
xxxx
When ownership is acquired over a particular property,
the owner has the right to possess and enjoy it.43 If the
owner is dispossessed of his or her property, he or she
has a right of action to recover its possession from the
dispossessor.44 When the property involved is real,45
such as land, the action to recover it is a real
action;46otherwise, the action is a personal action.47 In
such actions, the parties involved must be Muslims for
Shari’a District Courts to validly take cognizance of
them.
In this case, the allegations in Roldan’s petition for
recovery of possession did not state that Vivencio is a
Muslim. When Vivencio stated in his petition for relief
from judgment that he is not a Muslim, Roldan did not
dispute this claim.
When it became apparent that Vivencio is not a Muslim,
respondent Fifth Shari’a District Court should have
motu proprio dismissed the case. Under Rule 9, Section
1 of the Rules of Court, if it appears that the court has
no jurisdiction over the subject matter of the action
based on the pleadings or the evidence on record, the
court shall dismiss the claim:
Section 1. Defenses and objections not pleaded. –
Defenses and objections not pleaded either in a motion
to dismiss or in the answer are deemed waived.
However, when it appears from the pleadings or the
evidence on record that the court has no jurisdiction
over the subject matter, that there is another action
pending between the same parties for the same cause,
or that the action is barred by a prior judgment or by
statute of limitations, the court shall dismiss the claim.
Respondent Fifth Shari’a District Court had no authority
under the law to decide Roldan’s action because not all
of the parties involved in the action are Muslims. Thus,
it had no jurisdiction over Roldan’s action for recovery
of possession. All its proceedings in SDC Special
Proceedings Case No. 07-200 are void.
Roldan chose to file his action with the Shari’a District
Court, instead of filing the action with the regular
courts, to obtain "a more speedy disposition of the
case."48 This would have been a valid argument had all
the parties involved in this case been Muslims. Under
Article 143 of the Muslim Code, the jurisdiction of
CIVIL PROCEDURE CASE DIGESTS - 1
Shari’a District Courts over real actions not arising from
customary contracts is concurrent with that of existing
civil courts. However, this concurrent jurisdiction over
real actions "is applicable solely when both parties are
Muslims"49 as this court ruled in Tomawis v. Hon.
Balindong.50 When one of the parties is not a Muslim,
the action must be filed before the regular courts.
The application of the provisions of the Civil Code of the
Philippines by respondent Fifth Shari’a District Court
does not validate the proceedings before the court.
Under Article 175 of the Muslim Code, customary
contracts are construed in accordance with Muslim
law.51 Hence, Shari’a District Courts apply Muslim law
when resolving real actions arising from customary
contracts.
In real actions not arising from contracts customary to
Muslims, there is no reason for Shari’a District Courts to
apply Muslim law. In such real actions, Shari’a District
Courts will necessarily apply the laws of general
application, which in this case is the Civil Code of the
Philippines, regardless of the court taking cognizance of
the action. This is the reason why the original
jurisdiction of Shari’a District Courts over real actions
not arising from customary contracts is concurrent with
that of regular courts.
However, as discussed, this concurrent jurisdiction
arises only if the parties involved are Muslims.
Considering that Vivencio is not a Muslim, respondent
Fifth Shari’a District Court had no jurisdiction over
Roldan’s action for recovery of possession of real
property. The proceedings before it are void, regardless
of the fact that it applied the provisions of the Civil Code
of the Philippines in resolving the action.
True, no provision in the Code of Muslim Personal Laws
of the Philippines expressly prohibits non-Muslims from
participating in Shari’a court proceedings. In fact, there
are instances when provisions in the Muslim Code apply
to non-Muslims. Under Article 13 of the Muslim Code,52
provisions of the Code on marriage and divorce apply to
the female party in a marriage solemnized according to
Muslim law, even if the female is non-Muslim.53 Under
Article 93, paragraph (c) of the Muslim Code,54 a person
of a different religion is disqualified from inheriting from
a Muslim decedent.55 However, by operation of law and
regardless of Muslim law to the contrary, the
decedent’s parent or spouse who is a non-Muslim "shall
be entitled to one-third of what he or she would have
received without such disqualification." In these
instances, non-Muslims may participate in Shari’a court
proceedings.
Nonetheless, this case does not involve any of the
previously cited instances. This case involves an action
for recovery of possession of real property. As a matter
of law, Shari’a District Courts may only take cognizance
of a real action "wherein the parties involved are
Muslims."58 Considering that one of the parties involved
in this case is not a Muslim, respondent Fifth Shari’a
Page 47 of 85

District Court had no jurisdiction to hear, try, and decide
the action for recovery of possession of real property.
The judgment against Vivencio is void for respondent
Fifth Shari’a District Court’s lack of jurisdiction over the
subject matter of the action.
That Vivencio raised the issue of lack of jurisdiction over
the subject matter only after respondent Fifth Shari’a
District Court had rendered judgment is immaterial. A
party may assail the jurisdiction of a court or tribunal
over a subject matter at any stage of the proceedings,
even on appeal.59 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."
In Figueroa v. People of the Philippines,61 Venancio
Figueroa was charged with reckless imprudence
resulting in homicide before the Regional Trial Court of
Bulacan. The trial court convicted Figueroa as charged.
On appeal with the Court of Appeals, Figueroa raised for
the first time the issue of jurisdiction of the Regional
Trial Court to decide the case. Ruling that the Regional
Trial Court had no jurisdiction over the crime charged,
this court dismissed the criminal case despite the fact
that Figueroa objected to the trial court’s jurisdiction
only on appeal.
In Metromedia Times Corporation v. Pastorin,62 Johnny
Pastorin filed a complaint for constructive dismissal
against Metromedia Times Corporation. Metromedia
Times Corporation actively participated in the
proceedings before the Labor Arbiter. When the Labor
Arbiter ruled against Metromedia Times, it appealed to
the National Labor Relations Commission, arguing for
the first time that the Labor Arbiter had no jurisdiction
over the complaint. According to Metromedia Times,
the case involved a grievance issue "properly cognizable
by the voluntary arbitrator."63 This court set aside the
decision of the Labor Arbiter on the ground of lack of
jurisdiction over the subject matter despite the fact that
the issue of jurisdiction was raised only on appeal.
There are exceptional circumstances when a party may
be barred from assailing the jurisdiction of the court to
decide a case. In the 1968 case of Tijam v.
Sibonghanoy,64 the Spouses Tijam sued the Spouses
Sibonghanoy on July 19, 1948 before the Court of First
Instance of Cebu to recover P1,908.00. At that time, the
court with exclusive original jurisdiction to hear civil
actions in which the amount demanded does not
exceed P2,000.00 was the court of justices of the peace
and municipal courts in chartered cities under Section
88 of the Judiciary Act of 1948.
As prayed for by the Spouses Tijam in their complaint,
the Court of First Instance issued a writ of attachment
against the Spouses Sibonghanoy. However, the latter
filed a counter-bond issued by Manila Surety and
Fidelity Co., Inc. Thus, the Court of First Instance
dissolved the writ of attachment.
After trial, the Court of First Instance decided in favor of
CIVIL PROCEDURE CASE DIGESTS - 1
the Spouses Tijam. When the writ of execution returned
unsatisfied, the Spouses Tijam moved for the issuance
of a writ of execution against Manila Surety and Fidelity
Co., Inc.’s bond. The Court of First Instance granted the
motion. Manila Surety and Fidelity Co., Inc. moved to
quash the writ of execution, which motion the Court of
First Instance denied. Thus, the surety company
appealed to the Court of Appeals.
The Court of Appeals sustained the Court of First
Instance’s decision. Five days after receiving the Court
of Appeals’ decision, Manila Surety and Fidelity Co., Inc.
filed a motion to dismiss, arguing for the first time that
the Court of First Instance had no jurisdiction over the
subject matter of the case. The Court of Appeals
forwarded the case to this court for resolution.
This court ruled that the surety company could no
longer assail the jurisdiction of the Court of First
Instance on the ground of estoppel by laches. Parties
may be barred from assailing the jurisdiction of the
court over the subject matter of the action if it took
them an unreasonable and unexplained length of time
to object to the court’s jurisdiction.65 This is to
discourage the deliberate practice of parties in invoking
the jurisdiction of a court to seek affirmative relief, only
to repudiate the court’s jurisdiction after failing to
obtain the relief sought.66 In such cases, the court’s lack
of jurisdiction over the subject matter is overlooked in
favor of the public policy of discouraging such
inequitable and unfair conduct.
In Tijam, it took Manila Surety and Fidelity Co., Inc. 15
years before assailing the jurisdiction of the Court of
First Instance. As early as 1948, the surety company
became a party to the case when it issued the counter-
bond to the writ of attachment. During trial, it invoked
the jurisdiction of the Court of First Instance by seeking
several affirmative reliefs, including a motion to quash
the writ of execution. The surety company only assailed
the jurisdiction of the Court of First Instance in 1963
when the Court of Appeals affirmed the lower court’s
decision. This court said:
x x x x Were we to sanction such conduct on [Manila
Surety and Fidelity, Co. Inc.’s] part, We would in effect
be declaring as useless all the proceedings had in the
present case since it was commenced on July 19, 1948
and compel [the spouses Tijam] to go up their Calvary
once more.
The inequity and unfairness of this is not only patent
but revolting.
After this court had rendered the decision in Tijam, this
court observed that the "non-waivability of objection to
jurisdiction"69 has been ignored, and the Tijam doctrine
has become more the general rule than the exception.
In Calimlim v. Ramirez,70 this court said:
A rule that had been settled by unquestioned
acceptance and upheld in decisions so numerous to cite
is that the jurisdiction of a court over the subject-matter
of the action is a matter of law and may not be
Page 48 of 85

conferred by consent or agreement of the parties. The
lack of jurisdiction of a court may be raised at any stage
of the proceedings, even on appeal. This doctrine has
been qualified by recent pronouncements which
stemmed principally from the ruling in the cited case of
[Tijam v. Sibonghanoy]. It is to be regretted, however,
that the holding in said case had been applied to
situations which were obviously not contemplated
therein. x x x.
Thus, the court reiterated the "unquestionably
accepted"72 rule that objections to a court’s jurisdiction
over the subject matter may be raised at any stage of
the proceedings, even on appeal. This is because
jurisdiction over the subject matter is a "matter of
law"73 and "may not be conferred by consent or
agreement of the parties."
In Figueroa,75 this court ruled that the Tijam doctrine
"must be applied with great care;"76 otherwise, the
doctrine "may be a most effective weapon for the
accomplishment of injustice":
x x x estoppel, being in the nature of a forfeiture, is not
favored by law. It is to be applied rarely — only from
necessity, and only in extraordinary circumstances. The
doctrine must be applied with great care and the equity
must be strong in its favor. When misapplied, the
doctrine of estoppel may be a most effective weapon
for the accomplishment of injustice. x x x a judgment
rendered without jurisdiction over the subject matter is
void. x x x. No laches will even attach when the
judgment is null and void for want of jurisdiction x x x.78
In this case, the exceptional circumstances similar to
Tijam do not exist. Vivencio never invoked respondent
Fifth Shari’a District Court’s jurisdiction to seek
affirmative relief. He filed the petition for relief from
judgment precisely to assail the jurisdiction of
respondent Fifth Shari’a District Court over Roldan’s
petition for recovery of possession.
Thus, the general rule holds. Vivencio validly assailed
the jurisdiction of respondent Fifth Shari’a District Court
over the action for recovery of possession for lack of
jurisdiction over the subject matter of Roldan’s action.
OO.) EVANGELINE ALDAY, petitioner, vs. FGU
INSURANCE CORPORATION, respondent.
Facts: FGU Insurance Corporation filed a complaint with
the RTC of Makati alleging that Alday owed it
P114,650.76, representing unliquidated cash advances,
unremitted costs of premiums and other charges
incurred as an insurance agent. Respondent also prayed
for exemplary damages, attorneys fees, and costs of
suit. Petitioner filed her answer and by way of
counterclaim, asserted her right for the payment of
P104,893.45, representing direct commissions, profit
commissions and contingent bonuses and for
accumulated premium reserves amounting to
P500,000.00. In addition, petitioner prayed for
attorneys fees, litigation expenses, moral damages and
CIVIL PROCEDURE CASE DIGESTS - 1
exemplary damages for the allegedly unfounded action
filed by respondent.
Respondent filed a Motion to Strike Out Answer With
Compulsory Counterclaim And To Declare Defendant In
Default because petitioners answer was allegedly filed
out of time. However, the trial court denied the motion.
A few weeks later, respondent filed a motion to dismiss
petitioners counterclaim, contending that the trial court
never acquired jurisdiction over the same because of
the non-payment of docket fees by petitioner. In
response, petitioner asked the trial court to declare her
counterclaim as exempt from payment of docket fees
since it is compulsory and that respondent be declared
in default for having failed to answer such counterclaim.
The trial court granted the motion to dismiss. The court
found petitioners counterclaim to be merely permissive
and held that petitioners failure to pay docket fees
prevented the court from acquiring jurisdiction over the
same. The Court of Appeals sustained the trial court.
Issues:
1. Whether or not the respondent is estopped from
questioning her non-payment of docket fees because it
did not raise this particular issue when it filed its first
motion.
2. Whether or not the Court of Appeals had jurisdiction
to entertain the appeal of the petitioner.
3. Whether or not the counterclaim was permissive or
compulsory
Held: Estoppel by laches arises from the negligence or
omission to assert a right within a reasonable time,
warranting a presumption that the party entitled to
assert it either has abandoned or declined to assert it. In
the case at bar, respondent cannot be considered as
estopped from assailing the trial court’s jurisdiction
over petitioners counterclaim since this issue was raised
by respondent with the trial court itself the body where
the action is pending - even before the presentation of
any evidence by the parties and definitely, way before
any judgment could be rendered by the trial court.
This objection to the CA’s jurisdiction is raised for the
first time before this Court. Although the lack of
jurisdiction of a court may be raised at any stage of the
action, a party may be estopped from raising such
questions if he has actively taken part in the very
proceedings which he questions, belatedly objecting to
the court’s jurisdiction in the event that that the
judgment or order subsequently rendered is adverse to
him. In this case, respondent actively took part in the
proceedings before the CA by filing its appellees brief
with the same. Its participation, when taken together
with its failure to object to the jurisdiction during the
entire duration of the proceedings before such court,
demonstrates a willingness to abide by the resolution of
the case by such tribunal and accordingly, respondent is
now most decidedly estopped.
BOTH. A compulsory counterclaim is one which, being
cognizable by the regular courts of justice, arises out of
Page 49 of 85

or is connected with the transaction or occurrence
constituting the subject matter of the opposing parties’
claim and does not require for its adjudication the
presence of third parties of whom the court cannot
acquire jurisdiction. In Valencia v. Court of Appeals, this
Court set the criteria to determine whether a
counterclaim is compulsory or permissive,
Are the issues of fact and law raised by the claim and
counterclaim largely the same?
Would res judicata bar a subsequent suit on defendants
claim absent the compulsory counterclaim rule?
Will substantially the same evidence support or refute
plaintiffs claim as well as defendants counterclaim?
Is there any logical relation between the claim and the
counterclaim?
Another test, applied in Quintanilla v. Court of Appeals,
is the compelling test of compulsoriness which requires
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.
Petitioner’s counterclaim for commissions, bonuses,
and accumulated premium reserves is merely
permissive. The evidence required to prove petitioners
claims differs from that needed to establish
respondent’s demands for the recovery of cash
accountabilities from petitioner, such as cash advances
and costs of premiums. This conclusion is further
reinforced by petitioners own admissions since she
declared in her answer that respondents cause of
action, unlike her own, was not based upon the Special
Agents Contract.
CIVIL PROCEDURE CASE DIGESTS - 1
Where the trial court acquires jurisdiction over a claim
by the filing of the appropriate pleading and payment of
the prescribed filing fee but, subsequently, the
judgment awards a claim not specified in the pleading,
or if specified the same has been left for determination
by the court, the additional filing fee therefor shall
constitute a lien on the judgment. It shall be the
responsibility of the Clerk of Court or his duly
authorized deputy to enforce said lien and assess and
collect the additional fee.
In Suson v. Court of Appeals, the Court explained that
although the payment of the prescribed docket fees is a
jurisdictional requirement, its non-payment does not
result in the automatic dismissal of the case provided
the docket fees are paid within the applicable
prescriptive or reglementary period. Coming now to the
case at bar, it has not been alleged by respondent and
there is nothing in the records to show that petitioner
has attempted to evade the payment of the proper
docket fees for her permissive counterclaim. As a
matter of fact, after respondent filed its motion to
dismiss petitioners counterclaim based on her failure to
pay docket fees, petitioner immediately filed a motion
with the trial court, asking it to declare her counterclaim
as compulsory in nature and therefore exempt from
docket fees and, in addition, to declare that respondent
was in default for its failure to answer her counterclaim.
The trial court should have instead given petitioner a
reasonable time, but in no case beyond the applicable
prescriptive or reglementary period, to pay the filing
fees for her permissive counterclaim.

However, petitioners claims for damages, allegedly

suffered as a result of the filing by respondent of its
complaint, are compulsory.

The rule on the payment of filing fees has been laid

down by the Court in the case of Sun Insurance Office,
Ltd. v. Hon. Maximiano Asuncion

It is not simply the filing of the complaint or appropriate

initiatory pleading, but the payment of the prescribed
docket fee, that vests a trial court with jurisdiction over
the subject-matter or nature of the action. Where the
filing of the initiatory pleading is not accompanied by
payment of the docket fee, the court may allow
payment of the fee within a reasonable time but in no
case beyond the applicable prescriptive or reglementary
period.

The same rule applies to permissive counterclaims,

third-party claims and similar pleadings, which shall not
be considered filed until and unless the filing fee
prescribed therefor is paid. The court may allow
payment of said fee within a reasonable time but also in
no case beyond its applicable prescriptive or
reglementary period.
Page 50 of 85

II. RULE 1-5
A. MARCOS-ARANETA vs CA G.R. No. 154096, August
22, 2008
Facts: Ambassador Roberto S. Benedicto, now
deceased, and his business associates (Benedicto
Group) organized Far East Managers and Investors, Inc.
(FEMII) and Universal Equity Corporation (UEC),
respectively. As petitioner Irene Marcos-Araneta would
later allege, both corporations were organized pursuant
to a contract or arrangement whereby Benedicto, as
trustor, placed in his name and in the name of his
associates, as trustees, the shares of stocks of FEMII and
UEC with the obligation to hold those shares and their
fruits in trust and for the benefit of Irene to the extent
of 65% of such shares. Several years after, Irene,
through her trustee-husband, Gregorio Ma. Araneta III,
demanded the reconveyance of said 65% stockholdings,
but the Benedicto Group refused to oblige.
In March 2000, Irene thereupon instituted before the
RTC two similar complaints for conveyance of shares of
stock, accounting and receivership against the
Benedicto Group with prayer for the issuance of a
temporary restraining order (TRO). The second sought
the recovery to the extent of 65% of FEMII shares held
by Benedicto and the other defendants named therein.
Respondent Francisca Benedicto-Paulino, Benedicto's
daughter, filed a Motion to Dismiss Civil Case No. 3341-
17, followed later by an Amended Motion to Dismiss.
Benedicto, on the other hand, moved to dismiss the
case filed, adopting in toto the five (5) grounds raised by
Francisca in her amended motion to dismiss. Among
these were: (1) the cases involved an intra-corporate
dispute over which the Securities and Exchange
Commission, not the RTC, has jurisdiction; (2) venue
was improperly laid; and (3) the complaint failed to
state a cause of action, as there was no allegation
therein that plaintiff, as beneficiary of the purported
trust, has accepted the trust created in her favor.
Upon Benedicto's motion, both cases were
consolidated. During the preliminary proceedings on
their motions to dismiss, Benedicto and Francisca, by
way of bolstering their contentions on improper venue,
presented the Joint Affidavit of Gilmia B. Valdez,
Catalino A. Bactat, and Conchita R. Rasco who all
attested being employed as household staff at the
Marcos' Mansion in Brgy. Lacub, Batac, Ilocos Norte and
that Irene did not maintain residence in said place as
she in fact only visited the mansion twice in 1999; that
she did not vote in Batac in the 1998 national elections;
and that she was staying at her husband's house in
Makati City. Against the aforesaid unrebutted joint
affidavit, Irene presented her PhP 5 community tax
certificate (CTC) issued on "11/07/99" in Curimao, Ilocos
Norte to support her claimed residency in Batac, Ilocos
Norte. In the meantime, on May 15, 2000, Benedicto
died and was substituted by his wife, Julita C. Benedicto,
and Francisca. RTC dismissed both complaints, stating
CIVIL PROCEDURE CASE DIGESTS - 1
that these partly constituted "real action," and that
Irene did not actually reside in Ilocos Norte, and,
therefore, venue was improperly laid. Pending
resolution of her motion for reconsideration, Irene filed
a Motion (to Admit Amended Complaint), attaching
Case Digest: RULE 4 - Venue CIVIL PROCEDURE
meikimouse therewith a copy of the Amended
Complaint in which the names of Daniel Rubio, Orlando
G. Reslin, and Jose G. Reslin appeared as additional
plaintiffs. As stated in the amended complaint, the
added plaintiffs, all from Ilocos Norte, were Irene's new
trustees. Parenthetically, the amended complaint stated
practically the same cause of action but, as couched,
sought the reconveyance of the FEMII shares only. RTC
admitted such amended complaint. Later developments
saw the CA issuing a TRO and then a writ of preliminary
injunction enjoining the RTC from conducting further
proceedings on the subject civil cases. It further
rendered a Decision, setting aside the assailed RTC
order and the amended complaint.
Issue: Whether or not the RTC has no jurisdiction over
the case on the ground of improper venue.
Held: It is the posture of Julita and Francisca that the
venue was in this case improperly laid since the suit in
question partakes of a real action involving real
properties located outside the territorial jurisdiction of
the RTC in Batac. This contention is not well-taken. In a
personal action, the plaintiff seeks the recovery of
personal property, the enforcement of a contract, or
the recovery of damages.
Real actions, on the other hand, are those affecting title
to or possession of real property, or interest therein. In
accordance with the wordings of Sec. 1 of Rule 4, the
venue of real actions shall be the proper court which
has territorial jurisdiction over the area wherein the real
property involved, or a portion thereof, is situated. The
venue of personal actions is the court where the
plaintiff or any of the principal plaintiffs resides, or
where the defendant or any of the principal defendants
resides, or in the case of a non-resident defendant
where he may be found, at the election of the plaintiff
In this case, Irene seeks to compel recognition of the
trust arrangement she has with the Benedicto Group.
The fact that FEMII's assets include real properties does
not materially change the nature of the action, for the
ownership interest of a stockholder over corporate
assets is only inchoate as the corporation, as a juridical
person, solely owns such assets. It is only upon the
liquidation of the corporation that the stockholders,
depending on the type and nature of their
stockownership, may have a real inchoate right over the
corporate assets, but then only to the extent of their
stockownership. The amended complaint is an action
inn personam, it being a suit against Francisca and the
late Benedicto (now represented by Julita and
Francisca), on the basis of their alleged personal liability
to Irene upon an alleged trust constituted in 1968
and/or 1972. They are not actions in rem where the
Page 51 of 85

actions are against the real properties instead of against
persons.
We point out at the outset that Irene, as categorically
and peremptorily found by the RTC after a hearing, is
not a resident of Batac, Ilocos Norte, as she claimed.
The Court perceives no compelling reason to disturb, in
the confines of this case, the factual determination of
the trial court and the premises holding it together.
Accordingly, Irene cannot, in a personal action,
contextually opt for Batac as venue of her reconveyance
complaint. As to her, Batac, Ilocos Norte is not what
Sec. 2, Rule 4 of the Rules of Court adverts to as the
place "where the plaintiff or any of the principal
plaintiffs resides" at the time she filed her amended
complaint. That Irene holds CTC No. 17019451 issued
sometime in June 2000 in Batac, Ilocos Norte and in
which she indicated her address as Brgy. Lacub, Batac,
Ilocos is really of no moment. Let alone the fact that
one can easily secure a basic residence certificate
practically anytime in any Bureau of Internal Revenue or
treasurer's office and dictate whatever relevant data
one desires entered, Irene procured CTC No. 17019451
and appended the same to her motion for
reconsideration following the RTC's pronouncement
against her being a resident of Batac.
There can be no serious dispute that the real party-
ininterest plaintiff is Irene. As self-styled beneficiary of
the disputed trust, she stands to be benefited or
entitled to the avails of the present suit. It is undisputed
too that petitioners Daniel Rubio, Orlando G. Reslin, and
Jose G. Reslin, all from Ilocos Norte, were included as
co-plaintiffs in the amended complaint as Irene's new
designated trustees. As trustees, they can only serve as
mere representatives of Irene. Sec. 2 of Rule 4 indicates
quite clearly that when there is more than one plaintiff
in a personal action case, the residences of the principal
parties should be the basis for determining proper
venue.
Before the RTC in Batac, in Civil Case Nos. 3341-17 and
3342- 17, Irene stands undisputedly as the principal
plaintiff, the real party-in-interest. Following Sec. 2 of
Rule 4, the subject civil cases ought to be commenced
and prosecuted at the place where Irene resides. Irene
was a resident during the period material of Forbes
Park, Makati City. She was not a resident of Brgy. Lacub,
Batac, Ilocos Norte, although jurisprudence has it that
one can have several residences, if such were the
established fact.
B. Fortune Motors, Inc. v. CA, Metropolitan Bank and
Trust Company
Facts: Private respondent extended various loans to
petitioner for a total sum of P32,500,000.00;Due to
financial difficulties, and economic recession, the
petitioner was not able to pay the loan which became
due;The respondent bank initiated extrajudicial
foreclosure proceedings, the mortgaged property was
CIVIL PROCEDURE CASE DIGESTS - 1
sold at public auction where respondent was the
highest bidder;
3 days before the expiration of the redemption period,
petitioner filed a complaint for the annulment of the
extrajudicial foreclosure sale at the RTC of Manila,
alleging that:
(a) the foreclosure was premature because its
obligation to the Bank was not yet due,
(b) the publication of the notice of sale was incomplete,
there was no public auction,
(c) the price for which was “shockingly low”;
Respondent filed a motion to dismiss the complaint
on the ground that the venue of the action was
improperly laid in Manila for the realty covered by
the real estate mortgages is situated in Makati,
therefore the action to annul the foreclosure sale
should be filed in the RTC of Makati;
Petitioner argued that its action is a personal action and
that the issue is the validity of the extrajudicial
foreclosure proceedings so that it may have a new one
year period to redeem the same.
Lower court rulings:
RTC: reserved the resolution of the Bank’s motion to
dismiss until after the trial on the merits
CA: on petition for certiorari and prohibition, granted
the petitions and dismissed the case without prejudice
to the filing of the case before the proper courts
*Reconsideration was denied, hence the petition before
the SC
Issue: WON petitioner’s action for annulment of the real
estate mortgage extrajudicial foreclosure sale of
Fortune Building is personal action or a real action for
venue purposes
Ruling: Yes, the action is a real action which should have
been filed before the RTC of Makati.
Real actions or actions affecting title to, or for the
recovery of possession, or for the partition or
condemnation of or foreclosure of mortgage on real
property, must be instituted in the CFI of the province
where the property or any part thereof lies.
Personal actions upon the other hand, may be instituted
in the CFI where the defendant resides or may be
found, or where the plaintiff or any of the plaintiffs
resides, at the election of the plaintiff.
An action for the annulment or rescission of contract
does not operate to efface the true objectives and
nature of action which is to recover real property.
An action for annulment or rescission of sale of real
property is a real action; its prime objective is to recover
said real property.
Page 52 of 85

An action to annul a real estate mortgage foreclosure is
no different from an action to annul a private sale of
real property.
Hence, the petition is denied for lack of merit. The
decision of CA is affirmed.
C. Biaco vs. Philippine Countryside Rural Bank, GR
161417, February 8, 2007
Facts: Ernesto Biaco, husband of Teresa Biaco, acquired
several loans from Philippine Countryside Rural Bank
(PCRB) from 1996 to 1998. To secure the loans, he
mortgaged certain property in favor of the bank. He was
able to pay loans from 1996 to 1997 but he defaulted in
loans obtained in 1998 which amounted to more than a
million pesos.
Eventually, PCRB filed a complaint for foreclosure
against the spouses Biaco. Summons were issued by
the trial judge. The Sherriff served the summons to
Ernesto at the latter’s office. No summons was served
to Teresa.
Ernesto did not file a responsive pleading (so did Teresa
because she was not aware sans the summons being
served her). The case was heard ex-parte and the
spouses were ordered to satisfy the debt and failure to
do so will authorize the Sheriff to auction the
mortgaged the property.
Eventually, the mortgaged property was auctioned for
P150k which is not sufficient to cover the P1 M+ debt.
Upon motion by PCRB, a notice of levy was issued
against the personal properties of Teresa to satisfy the
deficiency.
It was only at this point that Teresa learned of the
previous ex parte proceedings. She then sought to have
the judgment annulled as she now claims that she was
deprived of due process when she did not receive
summons; that it was only her husband who received
the summons; that there was extrinsic fraud because
her husband deliberately hid the fact of the foreclosure
proceeding.
PRCB argued that the foreclosure proceeding is an
action quasi in rem, hence Teresa’s participation is not
required so long as the court acquires jurisdiction over
the res which is what happened in the case at bar; that
Teresa cannot invoke extrinsic fraud because such
situation cannot occur in her case because she is a co-
defendant of Ernesto.
ISSUE: Whether or not the judgment of the trial court
should be annulled.
HELD: Yes. It is admitted that the proceeding is a quasi
in rem proceeding and that the presence of Teresa is
not required because the trial court was able to acquire
jurisdiction over the res (mortgaged property).
HOWEVER, her constitutional right to due process is
superior over the procedural matters mentioned. Her
CIVIL PROCEDURE CASE DIGESTS - 1
right to due process was violated when she did not
receive summons. Teresa, as a resident defendant, who
does not voluntary appear in court must be personally
served with summons as provided under Section 6, Rule
14 of the Rules of Court. Even if the action is quasi in
rem, personal service of summons is essential in order
to afford her due process. The substituted service made
by the sheriff at her husband’s office cannot be deemed
proper service absent any explanation that efforts had
been made to personally serve summons upon her but
that such efforts failed. Further, the order of the trial
court compelling Teresa to pay off the debt using her
personal property is a judgment in personam which the
court cannot do because it only acquired jurisdiction
over the res and not over the person of Teresa.
On the issue of extrinsic fraud, the Court of Appeals,
agreeing with PCRB, is correct that there is none in the
case at bar. Extrinsic fraud exists when there is a
fraudulent act committed by the prevailing party
outside of the trial of the case, whereby the defeated
party was prevented from presenting fully his side of
the case by fraud or deception practiced on him by the
prevailing party. Extrinsic fraud is present where the
unsuccessful party had been prevented from exhibiting
fully his case, by fraud or deception practiced on him by
his opponent, as by keeping him away from court, a
false promise of a compromise; or where the defendant
never had knowledge of the suit, being kept in
ignorance by the acts of the plaintiff; or where an
attorney fraudulently or without authority assumes to
represent a party and connives at his defeat; or where
the attorney regularly employed corruptly sells out his
client’s interest to the other side. The above is not
applicable in the case of Teresa. It was not PCRB which
made any fraud. It should be noted that spouses Biaco
were co-defendants in the case and shared the same
interest.
D. JESSE U. LUCAS V. JESUS S. LUCAS G.R. No. 190710,
[June 6, 2011]
FACTS: Petitioner, Jesse Lucas filed a Petition to
Establish Filiation with a Motion for the Submission of
Parties to DNA Testing before the Regional Trial Court
(RTC). Jesse alleged that he is the son of his mother Elsie
who got acquainted with respondent, Jesus S. Lucas in
Manila. He also submitted documents which include (a)
petitioner’s certificate of live birth; (b) petitioner’s
baptismal certificate; (c) petitioner’s college diploma,
showing that he graduated from Saint Louis University
in Baguio City with a degree in Psychology; (d) his
Certificate of Graduation from the same school; (e)
Certificate of Recognition from the University of the
Philippines, College of Music; and (f) clippings of several
articles from different newspapers about petitioner, as
a musical prodigy.
Jesus learned of this and he filed a Special Appearance
and Comment manifesting that the petition was
adversarial in nature and therefore summons should be
served on him. Meanwhile, Jesse filed a Very Urgent
Page 53 of 85

Motion to Try and Hear the Case which the RTC found
to be sufficient in form and hence set the case for
hearing. Jesus filed a Motion for Reconsideration
arguing that DNA testing cannot be had on the basis of a
mere allegation pointing to him as Jesse’s father.
Acting on Jesus’ Motion for Reconsideration, the RTC
dismissed the case and held that Jesse failed to
establish compliance with the four procedural aspects
for a paternity action enumerated in the case of Herrera
v. Alba namely, a prima faciecase, affirmative defences,
presumption of legitimacy, and physical resemblance
between the putative father and the child.
This prompted Jesse to file a Motion for
Reconsideration which the RTC granted. A new hearing
was scheduled where the RTC held that ruling on the
grounds relied upon by Jesse for filing the instant
petition is premature considering that a full-blown trial
has not yet taken place. Jesus filed a Motion for
Reconsideration which was denied by the RTC. He then
filed a petition for certiorari with the Court of Appeals
(CA). The CA ruled in favour of Jesus, it noted that Jesse
failed to show that the four significant aspects of a
traditional paternity action had been met and held that
DNA testing should not be allowed when the petitioner
has failed to establish a prima facie case.
ISSUE: Whether aprima facie showing is necessary
before a court can issue a DNA testing order
HELD: Yes, but it is not yet time to discuss the lack ofa
prima facie case vis-à-vis the motion for DNA testing
since no evidence has, as yet, been presented by
petitioner.
RATIO: Misapplication of Herrera v. Alba by the
Regional Trial Court and the Court of Appeals. The
statement in Herrera v. Alba that there are four
significant procedural aspects in a traditional paternity
case which parties have to face has been widely
misunderstood and misapplied in this case. A party is
confronted by these so-called procedural aspects during
trial, when the parties have presented their respective
evidence. They are matters of evidence that cannot be
determined at this initial stage of the proceedings,
when only the petition to establish filiation has been
filed. The CA’s observation that petitioner failed to
establish a prima facie case is herefore misplaced. A
prima facie case is built by a party’s evidence and not by
mere allegations in the initiatory pleading.
Section 4 of the Rule on DNA Evidence merely provides
for conditions that are aimed to safeguard the accuracy
and integrity of the DNA testing. It states that the
appropriate court may, at any time, either motu proprio
or on application of any person, who has a legal interest
in the matter in litigation, order a DNA testing. Such
order shall issue after due hearing and notice to the
parties upon a showing of the following: (a) A biological
sample exists that is relevant to the case;(b) The
biological sample: (i) was not previously subjected to
CIVIL PROCEDURE CASE DIGESTS - 1
the type of DNA testing now requested; or (ii) was
previously subjected to DNA testing, but the results may
require confirmation for good reasons; (c) The DNA
testing uses a scientifically valid technique; (d) The DNA
testing has the scientific potential to produce new
information that is relevant to the proper resolution of
the case; and (e) The existence of other factors, if any,
which the court may consider as potentially affecting
the accuracy or integrity of the DNA testing. This Rule
shall not preclude a DNA testing, without need of a
prior court order, at the behest of any party, including
law enforcement agencies, before a suit or proceeding
is commenced. This does not mean, however, that a
DNA testing order will be issued as a matter of right if,
during the hearing, the said conditions are established.
In some states, to warrant the issuance of the DNA
testing order, there must be a show cause hearing
wherein the applicant must first present sufficient
evidence to establish a prima facie case or a reasonable
possibility of paternity or “good cause” for the holding
of the test. In these states, a court order for blood
testing is considered a “search,” which, under their
Constitutions (as in ours), must be preceded by a finding
of probable cause in order to be valid. Hence, the
requirement of a prima facie case, or reasonable
possibility, was imposed in civil actions as a counterpart
of a finding of probable cause. Courts in various
jurisdictions have differed regarding the kind of
procedures which are required, but those jurisdictions
have almost universally found that a preliminary
showing must be made before a court can
constitutionally order compulsory blood testing in
paternity cases.
We agree, and find that, as a preliminary matter, before
the court may issue an order for compulsory blood
testing, the moving party must show that there is a
reasonable possibility of paternity. As explained
hereafter, in cases in which paternity is contested and a
party to the action refuses to voluntarily undergo a
blood test, a show cause hearing must be held in which
the court can determine whether there is sufficient
evidence to establish a prima facie case which warrants
issuance of a court order for blood testing The same
condition precedent should be applied in our
jurisdiction to protect the putative father from mere
harassment suits. Thus, during the hearing on the
motion for DNA testing, the petitioner must present
prima facie evidence or establish a reasonable
possibility of paternity.”
E. Dial Corp. v Judge Soriano, Imperial Vegetable Oil
Co.
Facts: Petitioners are foreign corporations organize and
existing under the laws of US, UK, Malaysia, and are
NOT domiciled in the Philippines, NOR do they have
officers or agents, place of business, or property in the
Phil., they are not licensed to engaged, and ARE not
engaged in business here. Respondent (IVO) is a
Philippine corporation;The petitioners and respondent
Page 54 of 85

entered into a contract for delivery of coconut oil to the
petitioners. Those contracts stipulate that any dispute
shall be resolved through arbitration, either in FOSFA or
NIOP. Because IVO failed to deliver, petitioners and 15
others, initiated arbitration proceedings and some have
already obtained arbitration awards against
respondent. IVO filed a complaint for injunction against
19 foreign coconut oil buyers including petitioner, with
whom its president Dominador Monteverde, entered
into contract with. IVO repudiated Monteverde’s
contracts oon the ground that they were mere “paper
trading in futures” as no actual delivery of the coconut
oil was allegedly intended by the parties.
IVO replaced Dominador Monteverde and named
Rodrigo Monteverde in his stead and disowned the
former’s allegedly unauthorized acts. Petitioners
allegedly “harassed” IVO to recognize the contract
entered into by Dominador and to come into settlement
with them, which is why IVO applied for TRO and WPI;
IVO also prayed for Moral Damages, Actual Damages,
Exemplary Damages, and Counsel Appearances. On
motion of IVO, respondent judge authorized to effect
EXTRATERRITORIAL SERVICE OF SUMMONS to all the
defendants through DHL Philippines; Pursuant to such
order, petitioners were served with summons and copy
of the complaint by DHL courier service.
Without submitting to court’s jurisdiction, petitioners
filed a motion to dismiss on the ground that the
extraterritorial service of summons to them was
improper and that hence the court did not acquire
jurisdiction over them. The respondent court denied the
motion on the ground that “the present action relates
to property rights which lie in contracts within the
Philippines, or which defendant claim liens or interests,
actual or inchoate, legal or equitable. And one of the
reliefs demanded consists, wholly or in part, in
excluding the defendants from interest in such property
for the reason that their transactions with plaintiffs
former president are ultra vires.
Furthermore, as “foreign corporations doing business in
the Philippines without a license, they opened
themselves to suit before Philippine courts”, pursuant
to Sec. 133 of the Corporation Code of the Philippines.
Petitioner’s motion for reconsideration was also denied,
hence this petition for certiorari with TRO, which the
court granted;
*Directly went up to the SC
Issue: WON the extraterritorial service of summons was
proper to notify petitioners and will consequently result
to the court having jurisdiction;
Ruling: No, the extraterritorial service of summons was
is not proper and therefore, null and void.
Only in 4 instances is extraterritorial service of
summons proper:
(1) When the action affects personal status of the
plaintiffs;
CIVIL PROCEDURE CASE DIGESTS - 1
(2) When the action relates to, or the subject of which
is, property within the Philippines, in which defendant
has claims or lien or interest, actual or contingent;
(3) When relief demanded in such action consists in
excluding defendant from any interest in property
located in the Philippines; and
(4) When defendant non-resident’s property has been
attached within the Philippines;
The complaint in this case does not involve personal
status of the plaintiff, nor any property in the
Philippines in which defendants have or claim an
interest, or which the plaintiff has attached.
The action is purely an action for injunction to restrain
the defendants from enforcing against IVO (“abusing
and harassing”) its contracts for the delivery of coconut
oil to the defendants, and to recover from the
defendants P21 million in damages for such
“harassment”.
It is clearly a PERSONAL ACTION as well as an ACTION IN
PERSONAM, not an action in rem or quasi in rem.
“An action in personam is an action against a person on
the basis of his personal liability, while an action in
remedies (action in rem) is an action against the thing
itself, instead of the person.” (Hernandez case)
A personal action is one brought for the recovery of
personal property, for the enforcement of some
contract or recovery of damages for its breach, or for
the recovery of damages for the commission of an
injury to the person or property. (Hernandez case also)
This case is a personal action, personal or substituted
service of summons on the defendants, NOT
extraterritorial service, is necessary to confer
jurisdiction on the court.
General rule: when defendant is not residing in the
Philippines, the Philippine courts cannot try any case
against him because of the impossibility of acquiring
jurisdiction over his person.
Exception:
(1) Voluntary appearance;
(2) Affects personal status of plaintiffs;
(3) Or intended to seize or dispose of any property, real
or personal, of the defendant located in the Philippines
All of the above is because they already have
jurisdiction over the res.
F. Chua vs. Metropolitan bank
Facts:
- Chua and Filiden (the company where Chua is
president) obtained P4 million peso loan from
Metrobank
- This loan is secured by a a real estate mortgage
Page 55 of 85

- Since the value of the collateral was more than
the loan, Chua was given an open credit line for
future loans
- Chua/Filiden obtained other loans from
respondent Metrobank, and the real estate
mortgages were repeatedly amended in
accordance with the increase in Chua/Filiden’s
liabilities.
- Having failed to fully pay their obligations,
petitioners entered into a Debt Settlement
Agreement with respondent Metrobank,
whereby the loan was restructured.
- Eventually, the lawyers of Metrobank
demanded that Chua/Filiden fully pay and settle
their liabilities, including interest and penalties,
in the total amount ofP103,450,391, as well as
the stipulated attorney’s fees, within three days
from receipt of said letter.
- When petitioners still failed to pay their loans,
Metrobank sought to extra-judicially foreclose
the REM constituted on the subject properties.
Upon a verified Petition for Foreclosure filed by
respondent Metrobank
- Chua, in his personal capacity and acting on
behalf of petitioner Filiden, filed before Branch
257, a Complaint for Injunction with Prayer for
Issuance of Temporary Restraining Order (TRO),
Preliminary Injunction and Damages (from this
point on shall be called Injunction Complaint).
- RTC-Branch 257 issued a TRO enjoining
respondents Metrobank and Atty. Celestra from
conducting the auction sale of the mortgaged
properties on 31 May 2001.
- After the expiration of the TRO on 18 June
2001, and no injunction having been issued by
RTC-Branch 257, respondent Atty. Celestra reset
the auction sale on 8 November 2001.
- On 8 November 2001, the rescheduled date of
the auction sale, RTC-Branch 257 issued an
Order directing that the said sale be reset anew
after 8 November 2001.
- Order was served on 8 November 2001, on
respondent Atty. Celestra’s daughter, Arlene
Celestra,
- The auction sale, however, proceeded on 8
November 2001, and a Certificate of Sale was
accordingly issued to respondent Metrobank as
the highest bidder of the foreclosed properties.
- Chua amended the Injunction Complaint
o alleged that the Certificate of Sale was a
falsified document since there was no
CIVIL PROCEDURE CASE DIGESTS - 1
actual sale that took place on 8
November 2001.
o And, even if an auction sale was
conducted, the Certificate of Sale would
still be void because the auction sale
was done in disobedience to a lawful
order of RTC-Branch 257.
- Chua additionally prayed in their Amended
Complaint for the award of damages
- RTC-Branch 257 denied Chua’s application for
injunction on the ground that the sale of the
foreclosed properties rendered the same moot
and academic.
o Ruled that the Nov 8 2001 auction sale
was valid
- Chua filed a Motion for Reconsideration
- When RTC-Branch 257 failed to take any action
on said Motion, petitioners filed with the Court
of Appeals a Petition for Certiorari
- CA reversed RTC-Branch 257, remanded the
case for further proceedings
- The Supreme Court dismissed Metrobank’s
appeal with finality
- RTC-Branch 257 set the hearing for the
presentation of evidence by respondent
Metrobank for the application for preliminary
injunction on November 9, 2005.
- On 28 October 2005, Chua filed with Branch
195 of the Regional Trial Court of Parañaque
(RTC-Branch 195) a Verified Complaint for
Damages against respondents Metrobank, Atty.
Celestra, and three Metrobank lawyers.
o Chua sought in their Complaint the
award of actual, moral, and exemplary
damages against Metrobank for making
it appear that an auction sale of the
subject properties took place, as a
result of which, the prospective buyers
of the said properties lost their interest
and petitioner Chua was prevented
from realizing a profit of
P70,000,000.00 from the intended sale.
- Chua sought the inhibition of Executive Judge of
RTC-Branch 257
- Chua’s motion was granted and the case was re-
raffled to RTC-Branch 258
- Petitioners filed with RTC-Branch 195 a Motion
to Consolidate the Injunction complaint (which
was docketed in RTC-Branch 257) and the
Damages complaint (which was docketed in
RTC-Branch 195).
Page 56 of 85

- Metrobank filed with RTC-Branch 195 an
Opposition to Motion to Consolidate with
Prayer for Sanctions, praying for the dismissal of
the Complaint for Damages, on the ground of
forum shopping.
- RTC-Branch 195 granted the Motion to
Consolidate, and ordered that the Injunction
case be transferred to RTC-Branch 258
- Metrobank filed before RTC-Branch 258.
o Motion for Reconsideration of RTC-
Branch 195’s order granting to
consolidate
o Manifestation and Motion raising the
ground of forum shopping
- RTC-Branch 258 dismissed the Damages
Complaint on the ground of forum shopping
o RTC-Branch 258 declared that the facts
or claims submitted by petitioners, the
rights asserted, and the principal parties
in the two cases were the same.
- Chua filed a Petition for Review on Certiorari
with the Court of Appeals
- Court of Appeals affirmed Order of RTC-Branch
258. The appellate court observed that
although the defendants in the two cases were
not identical, they represented a community of
interest. It also declared that the cause of
action of the two cases, upon which the
recovery of damages was based, was the same
- The Court of Appeals additionally noted that
petitioners admitted in their Motion for
Consolidation that the Injunction Complaint and
the Damages Complaint involved the same
parties, central issue, and subject properties.
Additional facts to note:
- Chua/Filiden failed to state in the Certificate of
Non-Forum Shopping, attached to their Verified
Complaint for Damages before RTC-Branch 195,
the existence of the Injunction Case pending
before RTC-Branch 258.
- In the Injunction Case, the damages purportedly
arose from the bad faith of respondents in
offering the subject properties at the auction
sale at a price much lower than the assessed
fair market value of the said properties, said to
be P176,117,000.00. On the other hand, the
Damages Complaint, allegedly resulted from the
backing out of prospective buyers, who had
initially offered to buy the subject properties for
“not less than P175,000,000.00,” because
respondents made it appear that the said
properties were already sold at the auction sale.
CIVIL PROCEDURE CASE DIGESTS - 1
Applicable Law: The proscription against forum
shopping is found in Section 5, Rule 7 of the 1997 Rules
of Court, which provides that:
SEC. 5. Certification against forum shopping.—The
plaintiff or principal party shall certify under oath
in the complaint or other initiatory pleading
asserting a claim for relief, or in a sworn
certification annexed thereto and simultaneously
filed therewith: (a) that he has not theretofore
commenced any action or filed any claim involving
the same issues in any court, tribunal or quasi-
judicial agency and, to the best of his knowledge,
no such other action or claim is pending therein;
(b) if there is such other pending action or claim, a
complete statement of the present status thereof;
and (c) if he should thereafter learn that the same
or similar action or claim has been filed or is
pending, he shall report that fact within five (5)
days therefrom to the court wherein his aforesaid
complaint or initiatory pleading has been filed.
Failure to comply with the foregoing
requirements shall not be curable by mere
amendment of the complaint or other initiatory
pleading but shall be cause for the dismissal of
the case without prejudice, unless otherwise
provided, upon motion and after hearing. The
submission of a false certification or non-
compliance with any of the undertakings therein
shall constitute indirect contempt of court,
without prejudice to the corresponding
administrative and criminal actions. If the acts of
the party or his counsel clearly constitutes willful
and deliberate forum shopping, the same shall
be ground for summary dismissal with prejudice
and shall constitute direct contempt, as well as a
cause for administrative sanctions.
First Issue: WON the two complaints of Chua had a
single cause of action.
Held: YES. In the present case, there is no dispute that
petitioners failed to state in the Certificate of Non-
Forum Shopping, attached to their Verified Complaint
for Damages before RTC-Branch 195, the existence of
the Injunction Case pending before RTC-Branch 258.
Nevertheless, petitioners insist that they are not guilty
of forum shopping, since
(1) the two cases do not have the same ultimate
objective – Injunction Complaint seeks the annulment
of the 8 November 2001 public auction and certificate
of sale issued therein, while the Damages Complaint
prays for the award of actual and compensatory
damages for respondents’ tortuous act of making it
appear that an auction sale actually took place on 8
November 2001; and
(2) the judgment in the Injunction Case, on the
annulment of the foreclosure sale, would not affect the
outcome of the Damages Case, on the entitlement of
petitioners to damages.
Page 57 of 85

The Court, however, finds these arguments refuted by
the allegations made by petitioners themselves in their
Complaints in both cases.
Petitioners committed forum shopping by filing
multiple cases based on the same cause of action,
although with different prayers.
There is a splitting of cause of action. Petitioners would
like to make it appear that the Injunction Case was
solely concerned with the nullification of the auction
sale and certification of sale, while the Damages
Complaint was a totally separate claim for damages.
Yet, a review of the records reveals that petitioners also
included an explicit claim for damages in their
Amended Complaint
Petitioners averred in their Amended Complaint in the
Injunction Case that the assessed fair market value of
the subject properties was P176,117,000.00.
The Court observes that the damages being claimed by
petitioners in their Damages Complaint were also
occasioned by the supposedly fictitious 8 November
2001foreclosure sale,
There is no question that the claims of petitioners for
damages in Civil Case No. CV-01-0207 and Civil Case No.
CV-05-0402 are premised on the same cause of action,
i.e., the purportedly wrongful conduct of respondents in
connection with the foreclosure sale of the subject
properties.
At first glance, said claims for damages may appear
different. In the Injunction Case, the damages
purportedly arose from the bad faith of respondents in
offering the subject properties at the auction sale at a
price much lower than the assessed fair market value of
the said properties, said to be P176,117,000.00. On the
other hand, the Damages Complaint, allegedly resulted
from the backing out of prospective buyers, who had
initially offered to buy the subject properties for “not
less than P175,000,000.00,” because respondents made
it appear that the said properties were already sold at
the auction sale. Yet, it is worthy to note that
petitioners quoted closely similar values for the
subject properties in both cases, against which they
measured the damages they supposedly suffered.
Evidently, this is due to the fact that petitioners
actually based the said values on the single appraisal
report of the Philippine Appraisal Company on the
subject properties. Even though petitioners did not
specify in their Amended Complaint in the Injunction
Case the exact amount of damages they were seeking to
recover, leaving the same to the determination of the
trial court, and petitioners expressly prayed that they be
awarded damages of not less than P70,000,000.00 in
their Damages complaint, petitioners cannot deny that
all their claims for damages arose from what they
averred was a fictitious public auction sale of the
subject properties.
CIVIL PROCEDURE CASE DIGESTS - 1
Moreover, petitioners admitted in their Motion to
Consolidate before]RTC-Branch 195 that both cases
shared the same parties, the same central issue, and the
same subject property.
Second Issue: WON the forum shopping was willful and
deliberate, and the Damages Case should be dismissed
with prejudice to the Injunction Case
Held: NO. If the forum shopping is not considered willful
and deliberate, the subsequent case shall be dismissed
without prejudice, on the ground of either litis
pendentia or res judicata. However, if the forum
shopping is willful and deliberate, both (or all, if there
are more than two) actions shall be dismissed with
prejudice..[43] In this case, petitioners did not
deliberately file the Damages Case for the purpose of
seeking a favorable decision in another forum.
Otherwise, they would not have moved for the
consolidation of both cases. Thus, only the Damages
Case is dismissed and the hearing of the Injunction
Case before RTC-Branch 258 will be continued.
G. MA-AO SUGAR CENTRAL CO. vs. BARRIOS
G.R. No. L-1539, 03 December 1947
Facts: This is a petition for certiorari to set aside the
order of the respondent judge denying the motion to
dismiss the complaint of the other respondents which
seek to recover amounts of money due then from the
petitioner before the outbreak of the war, on the
ground that the respondent judge acted without or in
excess of the court's jurisdiction in rendering said order;
and for prohibition to forbid the respondent judge from
taking cognizance of the case on the ground that the
respondent judge had no jurisdiction to try and decide
it.
The ground for the motion to dismiss filed by the
petitioner is that the complaint of the respondents does
not state facts sufficient to constitute a cause of action,
because the plaintiffs have no right to demand the
payment of the defendants' alleged debts until after the
termination or legal cessation of the moratorium
provided No. 32, the pertinent part of which reads as
follows: III. DEBT MORATORIUM 1. Enforcement of
payment of all debts and other monetary obligations
payable within the Philippines, except debts and other
monetary obligations, entered into in any area after
declaration by Presidential Proclamation that such area
has been freed from enemy occupation and control, is
temporarily suspended pending action by the
Commonwealth Government.
Issue: Whether or not the complaint of the plaintiffs-
respondents states no cause of action and the petition
for certiorari and prohibition filed in the present case do
not entitle the petitioner to said reliefs. Yes!
Held: It is plain and Supreme Court (SC) is of the opinion
that the complaint filed by the plaintiff respondent in
Page 58 of 85

the court below does not state facts sufficient to
constitute a cause of action. A cause of action is an act
or omission of one party in violation of the legal right or
rights of the other; and its essential elements are legal
right of the plaintiff, correlative obligation of the
defendant, and act or omission of the defendant in
violation of said legal right. In the present case the
complaint alleges the legal right of the plaintiffs to be
paid the amount due them from the defendant, as well
as the correlative obligation of the defendant to pay
said debts to the plaintiffs when it becomes due and
payable; but not the omission on the part of the
defendant to pay in violation of the legal rights of the
plaintiffs to be paid, because according to the above
quoted provision of Executive Order No. 32, said debts
are not yet payable or their payment cannot be
enforced until the legal cessation of the moratorium,
which is still in force.
As the defendant herein petitioner is not yet in default,
plaintiffs have no cause of action against him. While the
debt moratorium is in force the defendant-petitioner
has no obligation yet to pay the plaintiffs, and the latter
cannot file a suit against him in the courts of justice
requiring him to recognize his debts to the plaintiffs and
to pay them (after the moratorium) not only the
amount of the indebtedness, but the legal interest
thereon from the filling of the complaint, the attorney's
fees of ten per centum of the amounts due, and the
costs of the suits.
There is no such action to compel a defendant to
acknowledge or recognize his debt which is not yet
payable, distinct and different from the action for
recovery or payment of a debt already due and payable,
against the debtor who refuses to pay it. To allow the
plaintiffs' action and grant the relief demanded in the
complaint, would be to compel the defendant to pay
legal interest of the amount claimed from filing of the
said complaint, as well as the attorney’s fees of 10 per
cent of the sum due thereon as stipulated, and the costs
of the suit, as if the defendants' obligations to the
plaintiffs were already payable and he had failed or
refused to pay them.
Why should the defendant be required to bear the
expenses incidental to a suit before he has violated the
plaintiffs' right? How could plaintiffs assume that the
defendant will not pay his debts when they become
payable, and for that reason they have filed this action
against defendant? Why should not the contrary be
presumed, that is, that the debtor will pay his obligation
at the proper time, in order to prevent a suit, preserve
its credit, and avoid the expenses incident to a suit, and
the payment of legal interest on the amount due and
attorney's fees? After stating SC’s opinion that the
complaint of the plaintiff’s respondent’s states no cause
of action, SC has to hold that the facts stated in the
petition for certiorari and prohibition filed in the
present case do not entitle the petitioner to said reliefs.
It requires no argument to show that the respondent
judge had jurisdiction and did not exceed it or act with
CIVIL PROCEDURE CASE DIGESTS - 1
grave abuse of discretion in denying the petitioner’s
motion to dismiss, and therefore we have to dismiss the
present petition.
This Court, in special civil actions of certiorari and
prohibition, can only determine the question whether
or not the court acted without or in excess of its
jurisdiction or with grave abuse of its discretion in doing
the act complained of. SC cannot correct errors
committed by the lower courts in their judgments,
decrees or orders rendered in the exercise of their
jurisdiction.
H. G.R. NO. 129242 January 16, 2001
PILAR S. VDA. DE MANALO, ANTONIO S. MANALO,
ORLANDO S. MANALO, and ISABELITA MANALO,
petitioners, vs. HON. COURT OF APPEALS, HON.
REGIONAL TRIAL COURT OF MANILA (BRANCH 35),
PURITA S. JAYME, MILAGROS M. TERRE, BELEN M.
ORILLANO, ROSALINA M. ACUIN, ROMEO S. MANALO,
ROBERTO S. MANALO, AMALIA MANALO and IMELDA
MANALO, respondents.
FACTS: Troadio Manalo, a resident of 1996 Maria Clara
Street, Sampaloc, Manila died intestate on February 14,
1992. He was survived by his wife, Pilar S. Manalo, and
his eleven (11) children, namely: Purita M. Jayme,
Antonio Manalo, Milagros M. Terre, Belen M. Orillano,
Isabelita Manalo, Rosalina M. Acuin, Romeo Manalo,
Roberto Manalo, Amalia Manalo, Orlando Manalo and
Imelda Manalo, who are all of legal age.
At the time of his death, Troadio Manalo left several
real properties located in Manila and in the province of
Tarlac including a business under the name and style
Manalo's Machine Shop.
On November 26, 1992, herein respondents, who are
eight (8) of the surviving children of the late Troadio
Manalo, namely; Purita, Milagros, Belen Rocalina,
Romeo, Roberto, Amalia, and Imelda filed a petition
with the respondent Regional Trial Court of Manila of
the judicial settlement of the estate of their late father,
Troadio Manalo, and for the appointment of their
brother, Romeo Manalo, as administrator thereof.
On February 11, 1993, the date set for hearing of the
petition, the trial court issued an order 'declaring the
whole world in default, except the government.
However, the trial court upon motion of the petitioners
set the order of general default aside and granted
herein petitioners (oppositors therein) namely: Pilar S.
Vda. De Manalo, Antonio, Isabelita and Orlando who
(10) days within which to file their opposition to the
petition.
On July 30, 1993, the trial court issued an order a.)
Admitting the opposition of the petitioners only for the
purpose of considering the merits thereof and b.)
denying the prayer of the petitioners for a preliminary
hearing of their affirmative defenses as ground for the
dismissal of this proceeding, said affirmative defenses
Page 59 of 85

being irrelevant and immaterial to the purpose and
issue of the present proceeding
Petitioners filed a petition for certiorari under Rule 65
of the Rules of Court with the Court of Appeals,
contending that there was absence of earnest efforts
toward compromise among members of the same
family. The Court of Appeals dismissed the petition for
certiorari and the motion for reconsideration of the said
resolution was likewise dismissed.
The petitioners alleged that the CA erred in upholding
the orders of the RTC which denied their motion for the
outright dismissal of the petition for judicial settlement
of estate despite the failure of the petitioners therein to
aver that earnest efforts toward a compromise involving
members of the same family have been made prior to
the filling of the petition but that the same have failed.
Petitioners claimed that the petition in SP. PROC. No.
92-63626 is actually an ordinary civil action involving
members of the same family. They point out that it
contains certain averments, which, according to them,
are indicative of its adversarial nature, to wit:
X X X
Par. 7. One of the surviving sons, ANTONIO MANALO,
since the death of his father, TROADIO MANALO, had
not made any settlement, judicial or extra-judicial of the
properties of the deceased father TROADIO MANALO.
Par. 8. xxx the said surviving son continued to manage
and control the properties aforementioned, without
proper accounting, to his own benefit and advantage
xxx.
X X X
Par. 12. That said ANTONIO MANALO is managing and
controlling the estate of the deceased TROADIO
MANALO to his own advantage and to the damage and
prejudice of the herein petitioners and their co-heirs
xxx.
X X X
Thus, according to the petitioners, the petition should
be dismissed under Rule 16, Section 1(j) of the Revised
Rules of Court which provides that a motion to dismiss a
complaint may be filed on the ground that a condition
precedent for filling the claim has not been complied
with, that is, that the petitioners therein failed to aver
in the petition in SP. PROC. No. 92-63626, that earnest
efforts toward a compromise have been made involving
members of the same family prior to the filling of the
petition pursuant to Article 222 of the Civil Code of the
Philippines.
ISSUE: What is the nature of the action/petition? – IT IS
A SPECIAL PROCEEDING
RULING: It is a fundamental rule that in the
determination of the nature of an action or proceeding,
the averments and the character of the relief sought in
the complaint, or petition, as in the case at bar, shall be
controlling. A careful scrutiny of the Petition for
Issuance of Letters of Administration, Settlement and
Distribution of Estate in SP. PROC. No. 92-63626 belies
CIVIL PROCEDURE CASE DIGESTS - 1
herein petitioners' claim that the same is in the nature
of an ordinary civil action.
The said petition contains sufficient jurisdictional facts
required in a petition for the settlement of estate of a
deceased person, such as the fact of death of the late
Troadio Manalo on February 14, 1992, as well as his
residence in the City of Manila at the time of his said
death. The fact of death of the decedent and of his
residence within the country are foundation facts upon
which all the subsequent proceedings in the
administration of the estate rest. The petition in
SP.PROC No. 92-63626 also contains an enumeration of
the names of his legal heirs including a tentative list of
the properties left by the deceased which are sought to
be settled in the probate proceedings. In addition, the
relief's prayed for in the said petition leave no room for
doubt as regard the intention of the petitioners therein
(private respondents herein) to seek judicial settlement
of the estate of their deceased father, Troadio Manalo.
Petitioners argue that even if the petition in SP. PROC.
No. 92-63626 were to be considered as a special
proceeding for the settlement of estate of a deceased
person, Rule 16, Section 1(j) of the Rules of Court vis-à-
visArticle 222 of the Civil Code of the Philippines would
nevertheless apply as a ground for the dismissal of the
same by virtue of Rule 1, Section 2 of the Rules of Court
which provides that the 'rules shall be liberally
construed in order to promote their object and to assist
the parties in obtaining just, speedy and inexpensive
determination of every action and proceedings.'
Petitioners contend that the term "proceeding" is so
broad that it must necessarily include special
proceedings.
The argument is misplaced. Herein petitioners may not
validly take refuge under the provisions of Rule 1,
Section 2, of the Rules of Court to justify the invocation
of Article 222 of the Civil Code of the Philippines for the
dismissal of the petition for settlement of the estate of
the deceased Troadio Manalo inasmuch as the latter
provision is clear enough. Article 222 of the Civil Code is
applicable only to ordinary civil actions. This is clear
from the term 'suit' that it refers to an action by one
person or persons against another or other in a court of
justice in which the plaintiff pursues the remedy which
the law affords him for the redress of an injury or the
enforcement of a right, whether at law or in equity. A
civil action is thus an action filed in a court of justice,
whereby a party sues another for the enforcement of a
right, or the prevention or redress of a wrong.
It must be emphasized that the oppositors (herein
petitioners) are not being sued in SP. PROC. No. 92-
63626 for any cause of action as in fact no defendant
was imploded therein. The Petition for issuance of
letters of Administration, Settlement and Distribution of
Estate in SP. PROC. No. 92-63626 is a special proceeding
and, as such, it is a remedy whereby the petitioners
therein seek to establish a status, a right, or a particular
fact. The respondents merely seek to establish the fact
Page 60 of 85

of death of their father and subsequently to be duly
recognized as among the heirs of the said deceased so
that they can validly exercise their right to participate in
the settlement and liquidation of the estate of the
decedent consistent with the limited and special
jurisdiction of the probate court.
Concededly, the petition in SP. PROC. No. 92-63626
contains certain averments which may be typical of an
ordinary civil action. Herein petitioners, as oppositors
therein, took advantage of the said defect in the
petition and filed their so-called Opposition thereto
which, as observed by the trial court, is actually an
Answer containing admissions and denials, special and
affirmative defenses and compulsory counterclaims for
actual, moral and exemplary damages, plus attorney's
fees and costs in an apparent effort to make out a case
of an ordinary civil action and ultimately seek its
dismissal under Rule 16, Section 1(j) of the Rules of
Court vis-à-vis, Article 222 of civil of the Civil Code.
It is our view that herein petitioners may not be allowed
to defeat the purpose of the essentially valid petition
for the settlement of the estate of the late Troadio
Manalo by raising matters that as irrelevant and
immaterial to the said petition. It must be emphasized
that the trial court, siting as a probate court, has limited
and special jurisdiction and cannot hear and dispose of
collateral matters and issues which may be properly
threshed out only in an ordinary civil action. In addition,
the rule has always been to the effect that the
jurisdiction of a court, as well as the concomitant nature
of an action, is determined by the averments in the
complaint and not by the defenses contained in the
answer. If it were otherwise, it would not be too
difficult to have a case either thrown out of court or its
proceedings unduly delayed by simple strategem. So it
should be in the instant petition for settlement of
estate.
I. G.R. No. 174975 January 20, 2009
LUISA KHO MONTAÑER, ALEJANDRO MONTAÑER, JR.,
LILLIBETH MONTAÑER-BARRIOS, AND RHODORA
ELEANOR MONTAÑER-DALUPAN, Petitioners,
vs. SHARI'A DISTRICT COURT, FOURTH SHARI'A
JUDICIAL DISTRICT, MARAWI CITY, LILING
DISANGCOPAN, AND ALMAHLEEN LILING S.
MONTAÑER, Respondents.
FACTS: On August 17, 1956, petitioner Luisa Kho
Montañer, a Roman Catholic, married Alejandro
Montañer, Sr. at the Immaculate Conception Parish in
Cubao, Quezon City. Petitioners Alejandro Montañer,
Jr., Lillibeth Montañer-Barrios, and Rhodora Eleanor
Montañer-Dalupan are their children. On May 26, 1995,
Alejandro Montañer, Sr. died.
On August 19, 2005, respondents Liling Disangcopan
and her daughter, Almahleen Liling S. Montañer, both
Muslims, filed a "Complaint" for the judicial partition of
properties before the Shari’a District Court. In the said
complaint, respondents made the following allegations:
CIVIL PROCEDURE CASE DIGESTS - 1
(1) in May 1995, Alejandro Montañer, Sr. died; (2) the
late Alejandro Montañer, Sr. is a Muslim; (3) petitioners
are the first family of the decedent; (4) Liling
Disangcopan is the widow of the decedent; (5)
Almahleen Liling S. Montañer is the daughter of the
decedent; and (6) the estimated value of and a list of
the properties comprising the estate of the decedent.
On the other hand, Petitioners filed a motion to dismiss
contending that the Shari’a District Court has no
jurisdiction over the estate of the late Alejandro
Montañer, Sr., because he was a Roman Catholic and
that private respondents’ complaint is barred by
prescription.
On November 22, 2005, the Shari’a District Court
dismissed the private respondents’ complaint. The
district court held that Alejandro Montañer, Sr. was not
a Muslim, and its jurisdiction extends only to the
settlement and distribution of the estate of deceased
Muslims. On August 22, 2006, the Shari’a District Court
granted the motion for reconsideration filed by
respomdents.
Petitioners seek recourse before this Court alleging that
respondent Shari’a District Court-Marawi City lacks
jurisdiction over petitioners who are Roman Catholics
and non-Muslims.
ISSUES:
1. What is the nature of the complaint filed by
respondents before the Shari’a Court? - IT IS A SPECIAL
PROCEEDING
2. WON the Shari’a Court has jurisdiction over the
compliant? –YES, it has authority to receive evidences
to determine whether the deceased is a Muslim or not.
3. WON the motion for reconsideration is defective for
lack of notice of hearing. –NO
4. WON the action has prescribed. - NO
RULING: 1. The determination of the nature of an action
or proceeding is controlled by the averments and
character of the relief sought in the complaint or
petition. The designation given by parties to their own
pleadings does not necessarily bind the courts to treat it
according to the said designation. Rather than rely on "a
falsa descriptio or defective caption," courts are "guided
by the substantive averments of the pleadings."
Although private respondents designated the pleading
filed before the Shari’a District Court as a "Complaint"
for judicial partition of properties, it is a petition for the
issuance of letters of administration, settlement, and
distribution of the estate of the decedent. It contains
sufficient jurisdictional facts required for the settlement
of the estate of a deceased Muslim, such as the fact of
Alejandro Montañer, Sr.’s death as well as the allegation
that he is a Muslim. The said petition also contains an
enumeration of the names of his legal heirs, so far as
known to the private respondents, and a probable list of
the properties left by the decedent, which are the very
properties sought to be settled before a probate court.
Page 61 of 85

Furthermore, the reliefs prayed for reveal that it is the
intention of the private respondents to seek judicial
settlement of the estate of the decedent.
We reiterate that the proceedings before the court a
quo are for the issuance of letters of administration,
settlement, and distribution of the estate of the
deceased, which is a special proceeding. Section 3(c) of
the Rules of Court (Rules) defines a special proceeding
as "a remedy by which a party seeks to establish a
status, a right, or a particular fact." This Court has
applied the Rules, particularly the rules on special
proceedings, for the settlement of the estate of a
deceased Muslim. In a petition for the issuance of
letters of administration, settlement, and distribution of
estate, the applicants seek to establish the fact of death
of the decedent and later to be duly recognized as
among the decedent’s heirs, which would allow them to
exercise their right to participate in the settlement and
liquidation of the estate of the decedent. Here, the
respondents seek to establish the fact of Alejandro
Montañer, Sr.’s death and, subsequently, for private
respondent Almahleen Liling S. Montañer to be
recognized as among his heirs, if such is the case in fact.
The erroneous understanding of the proceeding by the
petitioners is attributable to the fact that the parties
were designated either as plaintiffs or defendants and
the case was denominated as a special civil action.
Unlike a civil action which has definite adverse parties, a
special proceeding has no definite adverse party. The
definitions of a civil action and a special proceeding,
respectively, in the Rules illustrate this difference. A civil
action, in which "a party sues another for the
enforcement or protection of a right, or the prevention
or redress of a wrong" necessarily has definite adverse
parties, who are either the plaintiff or defendant. On
the other hand, a special proceeding, "by which a party
seeks to establish a status, right, or a particular fact,"
has one definite party, who petitions or applies for a
declaration of a status, right, or particular fact, but no
definite adverse party. In the case at bar, it bears
emphasis that the estate of the decedent is not being
sued for any cause of action. As a special proceeding,
the purpose of the settlement of the estate of the
decedent is to determine all the assets of the estate,
pay its liabilities, and to distribute the residual to those
entitled to the same.
2. Article 143(b) of Presidential Decree No. 1083,
otherwise known as the Code of Muslim Personal Laws
of the Philippines, provides that the Shari’a District
Courts have exclusive original jurisdiction over the
settlement of the estate of deceased Muslims:
ARTICLE 143. Original jurisdiction. — (1) The Shari'a
District Court shall have exclusive original jurisdiction
over:
xxxx
(b) All cases involving disposition, distribution and
settlement of the estate of deceased Muslims, probate
of wills, issuance of letters of administration or
CIVIL PROCEDURE CASE DIGESTS - 1
appointment of administrators or executors regardless
of the nature or the aggregate value of the property.
We cannot agree with the contention of the petitioners
that the district court does not have jurisdiction over
the case because of an allegation in their answer with a
motion to dismiss that Montañer, Sr. is not a Muslim.
Jurisdiction of a court over the nature of the action and
its subject matter does not depend upon the defenses
set forth in an answer or a motion to dismiss.
Otherwise, jurisdiction would depend almost entirely on
the defendant or result in having "a case either thrown
out of court or its proceedings unduly delayed by simple
stratagem. Indeed, the "defense of lack of jurisdiction
which is dependent on a question of fact does not
render the court to lose or be deprived of its
jurisdiction." In the case at bar, the Shari’a District Court
is not deprived of jurisdiction simply because
petitioners raised as a defense the allegation that the
deceased is not a Muslim. The Shari’a District Court has
the authority to hear and receive evidence to determine
whether it has jurisdiction, which requires an a priori
determination that the deceased is a Muslim. If after
hearing, the Shari’a District Court determines that the
deceased was not in fact a Muslim, the district court
should dismiss the case for lack of jurisdiction.
3. The Rules require every written motion to be set for
hearing by the applicant and to address the notice of
hearing to all parties concerned. The Rules also provide
that "no written motion set for hearing shall be acted
upon by the court without proof of service thereof."
However, the Rules allow a liberal construction of its
provisions "in order to promote the objective of
securing a just, speedy, and inexpensive disposition of
every action and proceeding." Moreover, this Court has
upheld a liberal construction specifically of the rules of
notice of hearing in cases where "a rigid application will
result in a manifest failure or miscarriage of justice
especially if a party successfully shows that the alleged
defect in the questioned final and executory judgment
is not apparent on its face or from the recitals contained
therein." In these exceptional cases, the Court considers
that "no party can even claim a vested right in
technicalities," and for this reason, cases should, as
much as possible, be decided on the merits rather than
on technicalities.
The case at bar falls under this exception. To deny the
Shari’a District Court of an opportunity to determine
whether it has jurisdiction over a petition for the
settlement of the estate of a decedent alleged to be a
Muslim would also deny its inherent power as a court to
control its process to ensure conformity with the law
and justice. To sanction such a situation simply because
of a lapse in fulfilling the notice requirement will result
in a miscarriage of justice. In addition, the present case
calls for a liberal construction of the rules on notice of
hearing, because the rights of the petitioners were not
affected.
Page 62 of 85

4. Petitioners’ argument that the action has prescribed
is premature. Again, the Shari’a District Court has not
yet determined whether it has jurisdiction to settle the
estate of the decedent. In the event that a special
proceeding for the settlement of the estate of a
decedent is pending, questions regarding heirship,
including prescription in relation to recognition and
filiation, should be raised and settled in the said
proceeding. The court, in its capacity as a probate court,
has jurisdiction to declare who are the heirs of the
decedent. In the case at bar, the determination of the
heirs of the decedent depends on an affirmative answer
to the question of whether the Shari’a District Court has
jurisdiction over the estate of the decedent.
J. G.R. No. L-4845. December 24, 1952
L. G. MARQUEZ and Z. GUTIERREZ LORA, plaintiffs. L.
G. Marquez, Plaintiff-Appellant, v. FRANCISCO VARELA
and CARMEN VARELA, Defendants-Appellees.
FACTS: Gutierrez Lora was authorized by respondents
Valera to negotiate the sale of their share or interest in
a parcel of land on Plaza Goiti, Manila. Lora and L. G.
Marquez (herein petitioners), a real estate broker,
agreed to work together for the sale of respondents’
property. Petitioners found a ready, willing, and able
buyer, which accepted respondents’ price and terms,
but that thereafter respondents, without any justifiable
reason, refused to carry out the sale and to execute the
necessary deed therefor; and that as a consequence
petitioners failed to receive the commission which they
were entitled to receive.
The respondents filed a motion to dismiss the complaint
as to L. G. Marquez on the ground that he has no cause
of action against respondents. Such motion having been
granted, plaintiff L. G. Marquez has prosecuted this
appeal.
The respondents contended that Marquez cannot join
in this action and enforce therein his rights directly
against them, evidently because respondents never
dealt with Marquez, directly or indirectly, or, in other
words, that both Marquez and his services were not
known to them.
ISSUES:
1. WON there is a valid cause of action in favor of
Marquez against the respondents. –YES
2. WON Marquez is a real party in interest over the
subject action considering that he is not a party of the
contract between Lora and the Varelas. – YES
RULING: 1. It is not denied that Lora, if he rendered the
service alleged in the complaint, would have a right to
be paid compensation for the service he rendered
jointly with Marquez. He acted as a broker, and a broker
is entitled to a commission for his services. There is no
prohibition in law against the employment of a
companion to look for a buyer; neither is it against
public policy. Neither was there even any implied
understanding between Lora and the respondents that
CIVIL PROCEDURE CASE DIGESTS - 1
no part of the compensation to which Lora would be
entitled to receive could be paid to any companion or
helper of Lora. From the facts alleged in the complaint,
it is clear that there is a primary right in favor of
Marquez (to be paid for his services even through Lora
only) and a corresponding duty devolving upon the
respondents (to pay for said services). Since (as alleged
respondents refused to comply with their duty,
Marquez now is entitled to enforce his legal right by an
action in court. The complaint in the case at bar,
therefore, contains both the primary right and duty and
the delict or wrong combined which constitute the
cause of action in the legal sense as used in Code
Pleading, and the cause of action is full and complete.
2. The principle underlying respondents’ objection is
one of procedure recognized under the common law,
where no one could sue for the breach of a contract
who was not a party thereto, and the action allowed to
be brought only in the name of the one holding the
legal title or interest therein and not of substantive law.
The requirement was based upon the doctrine of privity
of contract.
Under the common law, in order that two or more
persons may join in an action upon a contract, there
must be community of interest between them; that is,
they must be parties to the contract and jointly
interested therein. Persons subsequently admitted to
the benefit of a contract, without the privity or assent
of the promisor, cannot join in a suit on the contract.
But we did not import into this jurisdiction the common
law procedure. Our original Code of Civil Procedure (Act
190) was taken mainly from the Code of Civil Procedure
of California, and this in turn was based upon the Code
of Civil Procedure of New York adopted in that stated in
1948. Our system of pleading is based on the Code
Pleading, that system used in the states of the Union
that had adopted codes of procedure. Such code system
of pleading adopted in substance the rules of equity
practice as to parties, under which "all persons having
an interest in the subject of the action, and in obtaining
the relief demanded, may be joined as plaintiffs." In
New York and California interest in the subject matter,
or in any relief growing out of the same transaction or
series of transactions is sufficient to allow joinder.
The principle underlying the rule is that all persons
having a material interest under the substantive law
should be made parties, as distinguished from that of
the common law which allowed only a two-sided
controversy, each party to be opposed to the other.
The above principles have not been changed by the
reforms in the rules in 1940 and 1941. The action is still
to be prosecuted in the name of the real party in
interest. Under section 6 of Rule 3, "All persons in
whom . . . any right to relief in respect to or arising out
of the same transaction . . . is alleged to exist, whether
jointly, severally, or in the alternative, may, . . . join as
Page 63 of 85

plaintiffs . . ., where any question of law or fact common
to all such plaintiffs . . . may arise in the action; . . ."
Marquez, in the case at bar, clearly falls under the
above rule. He is entitled to be paid his commission out
of the very contract of agency between Lora and the
respondents; Lora and he acted jointly in rendering
services to respondents under Lora’s contract, and the
same questions of law and fact govern their claims. The
rules do not require the existence of privity of contract
between Marquez and the respondents as required
under the common law; all that they demand is that
Marquez has a material interest in the subject of the
action, the right to share in the broker’s commission to
be paid Lora under the latter’s contract, which right
Lora does not deny. This is sufficient to justify the
joinder of Marquez as a party plaintiff, even in the
absence of privity of contract between him and the
respondents.
CAUSE OF ACTION DISTINGUISHED FROM RIGHT OF
ACTION. The term "cause of action" has been held to be
synonymous with "right of action" ; but in Code
Pleading one is distinguished from the other in that a
right of action is a remedial right belonging to some
person, while a cause of action is a formal statement of
the operative facts that give rise to such remedial right.
The right of action is a matter of right and depends on
the substantive law, while the cause of action is a
matter of statement and is governed by the law of
procedure.
K. G.R. No. 129928 August 25, 2005
MISAMIS OCCIDENTAL II COOPERATIVE, INC.,
Petitioners, vs. VIRGILIO S. DAVID, Respondent.
FACTS: Private respondent Virgilio S. David (hereinafter,
David), a supplier of electrical hardware, filed a case for
specific performance and damages against MOELCI II, a
rural electric cooperative in Misamis Occidental. The
said case, which was essentially a collection suit, was
predicated on a document attached to the complaint as
Annex ‘’a’’ which according to David is the contract
pursuant to which he sold to MOELCI II one (1) unit of
10 MVA Transformer.
MOELCI II filed a Motion (For Preliminary Hearing of
Affirmative Defenses and Deferment of Pre-Trial
Conference) on the ground of lack of cause of action,
there being allegedly no enforceable contract between
David and MOELCI II. MOELCI II argued that the
document referred to by David was only a quotation
letter and not a contract. Thus, it contends that David’s
Amended Complaint is dismissible for failure to state a
cause of action.
David contended that because a motion to dismiss on
the ground of failure to state a cause of action is
required to be based only on the allegations of the
complaint, the "quotation letter," being merely an
attachment to the complaint and not part of its
allegations, cannot be inquired into.
CIVIL PROCEDURE CASE DIGESTS - 1
MOELCI II filed a rejoinder to the opposition in which it
asserted that a complaint cannot be separated from its
annexes; hence, the trial court in resolving a motion to
dismiss on the ground of failure to state a cause of
action must consider the complaint’s annexes.
RTC issued an order denying MOELCI II’s motion. Thus,
MOELCI II elevated the case to the CA alleging grave
abuse of discretion on the part of Judge of the RTC for
denying its motion. The CA dismissed MOELCI II’s
petition holding that the allegations in David’s
complaint constitute a cause of action. Hence, this
petition.
ISSUES:
1. WON the complaint states a cause of action. –YES
2. WON the denial of the motion for preliminary hearing
is erroneous. –NO
RULING: 1. Citing the case of The Heirs of Juliana
Clavano v. Genato, the Supreme Court ruled that it is a
well-settled rule that in a motion to dismiss based on
the ground that the complaint fails to state a cause of
action, the question submitted to the court for
determination is the sufficiency of the allegations in the
complaint itself. Whether those allegations are true or
not is beside the point, for their truth is hypothetically
admitted by the motion. The issue rather is: admitting
them to be true, may the court render a valid judgment
in accordance with the prayer of the complaint? Stated
otherwise, the sufficiency of the cause of action must
appear on the face of the complaint in order to sustain a
dismissal on this ground. No extraneous matter may be
considered nor facts not alleged, which would require
evidence and therefore must be raised as defenses and
await the trial. In other words, to determine the
sufficiency of the cause of action, only the facts alleged
in the complaint, and no other should be considered.
The respondent Judge of the above cited case departed
from this rule in conducting a hearing and in receiving
evidence in support of the private respondent’s
affirmative defense, that is, lack of cause of action.
To determine the existence of a cause of action, only
the statements in the complaint may be properly
considered. It is error for the court to take cognizance of
external facts or hold preliminary hearings to determine
their existence. If the allegations in a complaint furnish
sufficient basis by which the complaint can be
maintained, the same should not be dismissed
regardless of the defenses that may be averred by the
defendants.
The test of sufficiency of facts alleged in the complaint
as constituting a cause of action is whether or not
admitting the facts alleged, the court could render a
valid verdict in accordance with the prayer of said
complaint.
In the case at bar, it has been hypothetically admitted
that the parties had entered into a contract sale David
bound himself to supply MOELCI II (1) unit 10 MVA
Page 64 of 85

Power transformer with accessories for a total price of
₱5,200,000.00 plus 69 KV Line Accessories for a total
price of ₱2,169,500.00; that despite written and verbal
demands, MOELCI II has failed to pay the price thereof
plus the custom duties and incidental expenses of
₱272,722.27; and that apart from the previously stated
contract of sale, David regularly delivered various
electrical hardware to MOELCI II which, despite
demands, has an outstanding balance of ₱281,939.76.
We believe all the foregoing sufficiently lay out a cause
of action. Even extending our scrutiny to Annex "A,"
which is after all deemed a part of the Amended
Complaint, will not result to a change in our conclusion.
Contrary to MOELCI II’s assertion, Annex "A" is not an
"undisguised quotation letter." While Annex "A" is
captioned as such, the presence of the signatures of
both the General Manager and the Chairman of the
Committee of Management immediately below the
word "CONFORME" appearing on the document’s last
page lends credulity to David’s contention that there
was, or might have been, a meeting of minds on the
terms embodied therein. Thus, the appendage of Annex
"A" does not entirely serve to extinguish David’s claims.
In fact, the ambiguity of the import and nature of Annex
"A" which necessitates a resort to its proper
interpretation, strengthens the propriety of the trial
court’s denial of MOELCI II’s Motion. The interpretation
of a document requires introduction of evidence which
is precisely disallowed in determining whether or not a
complaint states a cause of action. The Court of Appeals
therefore correctly dismissed MOELCI II’s petition and
upheld the trial court’s ruling.
Now, whether in truth Annex "A" is, as entitled, a mere
quotation letter is a matter that could best be proven
during a full-blown hearing rather than through a
preliminary hearing as this may involve extensive proof.
Verily, where a preliminary hearing will not suffice, it is
incumbent upon the trial court to deny a motion for
preliminary hearing and go on to trial. The veracity of
the assertions of the parties can be ascertained at the
trial of the case on the merits.
2. In Municipality of Biñan, Laguna v. Court of Appeals,
decided under the old Rules of Court, we held that a
preliminary hearing permitted under Section 5, Rule 16,
is not mandatory even when the same is prayed for. It
rests largely on the sound discretion of the court, thus:
SEC. 5. Pleading grounds as affirmative defenses.- Any
of the grounds for dismissal provided for in this rule,
except improper venue, may be pleaded as an
affirmative defense, and a preliminary hearing may be
had thereon as if a motion to dismiss had been filed.
The use of the word "may" in the aforequoted provision
shows that such a hearing is not mandatory but
discretionary. It is an auxiliary verb indicating liberty,
opportunity, permission and possibility.
CIVIL PROCEDURE CASE DIGESTS - 1
Such interpretation is now specifically expressed in the
1997 Rules of Civil Procedure. Section 6, Rule 16
provides that a grant of preliminary hearing rests on the
sound discretion of the court, to wit-
SEC. 6. Pleading grounds as affirmative defenses.- If no
motion to dismiss has been filed, any of the grounds for
dismissal provided for in this Rule may be pleaded as an
affirmative defense in the answer and, in the discretion
of the court, a preliminary hearing may be had thereon
as if a motion to dismiss had been filed.
Based on the foregoing, a preliminary hearing
undeniably is subject to the discretion of the trial court.
Absent any showing that the trial court had acted
without jurisdiction or in excess thereof or with such
grave abuse of discretion as would amount to lack of
jurisdiction, as in the present case, the trial court’s
order granting or dispensing with the need for a
preliminary hearing may not be corrected by certiorari.
I. G.R. No. 140892. September 21, 2005
Dr. Ibarra S. Santos and Josefina M. Rivera, Petitioners,
vs. Spouses Pablo and Nieves de Leon and Virginia
Enales, Respondent.
FACTS: Records show that on September 25, 1995,
respondent spouses Pablo and Nieves de Leon filed with
the MTC of Parañaque City a complaint for forcible
entry against Josefina Rivera, petitioner. Petitioner
Rivera claimed that the real owner of the subject
property is Dr. Ibarra Santos, also a petitioner.
The MTC rendered a Decision in favor of respondent
spouses de Leon. Upon appeal, the RTC affirmed the
MTC Decision. Petitioners filed with the Court of
Appeals a petition for review, but it was denied.
Subsequently, or on July 3, 1996, petitioners Dr. Ibarra
Santos and Josefina Rivera filed with the RTC, Branch
260, Parañaque City, Civil Case No. 96-0285 for
declaration of nullity of a Deed of Sale with prayer for a
temporary restraining order and preliminary injunction.
Impleaded as defendants were spouses Pablo and
Nieves de Leon (herein respondents), Virginia Enales
and Pericles Telan, deputy sheriff IV of the said MTC.
The complaint alleges that petitioner, Dr. Ibarra Santos,
is the registered owner of the subject parcel of land and
its improvements covered by Transfer Certificate of Title
No. 69150 of the Registry of Deeds; that Virginia Enales
and Rosendo Rivera (deceased husband of petitioner
Josefina Rivera) sold Dr. Santos’ property to respondent
spouses de Leon; and that in Civil Case No. 9500 for
forcible entry filed by said respondent spouses with the
MTC of Parañaque City involving the same property, a
writ of execution was issued evicting from the premises
petitioner Josefina Rivera, the lessee of Dr. Santos.
Petitioners Dr. Santos and Rivera thus prayed that the
Deed of Sale between Virginia Enales and Rosendo
Rivera, as vendors, and respondent spouses de Leon, as
vendees, be declared void; and that a temporary
restraining order and/or preliminary injunction be
Page 65 of 85

issued enjoining the sheriff from implementing the
Decision of the MTC in Civil Case No. 9500.
On August 1, 1996, respondent spouses de Leon filed a
motion to dismiss the complaint on the ground that it
states no cause of action. The motion was granted.
Hence, both petitioners filed with the Court of Appeals
a petition for review. The CA subsequently denied the
petition holding that the complaint does not state a
cause of action considering that while it alleges that the
Deed of Sale is null and void, however, petitioner Dr.
Santos failed to specify the grounds why the said
document is a nullity and should, therefore, be
annulled. Petitioners filed a motion for reconsideration
but was denied by the Appellate Court. Hence, the
instant petition.
Petitioners Dr. Santos and Rivera contend that the Court
of Appeals erred in ruling that the complaint states no
cause of action. They insist that the allegations therein
"are sufficient for rendering a valid judgment in
accordance with their prayer." Their complaint states
only the ultimate facts since the details can be proven
during the trial.
ISSUE: WON the allegations in the complaint are
sufficient to constitute a cause of action. - YES
RULING: The general rule is that the allegations in a
complaint are sufficient to constitute a cause of action
against the defendants if, admitting the facts alleged,
the court can render a valid judgment upon the same in
accordance with the prayer therein.
A cause of action exists if the following elements are
present, namely: (1) a right in favor of the plaintiff by
whatever means and under whatever law it arises or is
created; (2) an obligation on the part of the named
defendant to respect or not to violate such right; and (3)
an act or omission on the part of such defendant
violative of the right of the plaintiff or constituting a
breach of the obligation of the defendant to the plaintiff
for which the latter may maintain an action for recovery
of damages.
The above allegations quoted above sufficiently
establish a cause of action. They specify that petitioners
Dr. Ibarra Santos is the absolute owner of the disputed
parcel of land and the improvements thereon. His claim
of ownership is evidenced by Transfer Certificate of Title
No. 4569216 of the Registry of Deeds for Parañaque
City. Definitely, as the registered owner of the subject
property, he has a cause of action against spouses de
Leon who claim to have purchased the same from
Virginia Enales and Rosendo Rivera who are not the true
owners thereof.
On the part of petitioner Josefina Rivera, she alleged in
the same complaint that she has been in possession, as
a lessee, of the same property since 1983 as shown by a
Contract of Lease between her and Dr. Ibarra Santos;
CIVIL PROCEDURE CASE DIGESTS - 1
and that her right as a lessee has been prejudiced when
the property, belonging to Dr. Santos, was sold by
persons who are not its real owners to spouses de Leon.
In determining whether the allegations of the complaint
are sufficient to support a cause of action, the
complaint does not have to establish or allege the facts
proving the existence of a cause at the outset; this will
have to be done at the trial on the merits of the case. A
complaint is sufficient if it contains sufficient notice of
the cause of action even though the allegations may be
vague and indefinite. To sustain a motion to dismiss for
lack of cause of action, the complaint must show that
the claim for relief does not exist rather than that a
claim has been defectively stated or is ambiguous,
indefinite or uncertain. The determination of the issue
of ownership of a property requires proofs which can be
threshed out, not in a motion to dismiss, but in a full-
blown trial on the merits.
M. G.R. No. 172175 October 9, 2006
SPS. EXPEDITO ZEPEDA AND ALICE D. ZEPEDA,
petitioners, vs. CHINA BANKING CORPORATION,
respondent.
FACTS: On February 18, 2003, spouses Expedito and
Alice Zepeda filed a complaint for nullification of
foreclosure proceedings and loan documents with
damages against respondent Chinabank before the
Regional Trial Court. They alleged that on June 28, 1995,
they obtained a loan in the amount of P5,800,000.00
from respondent secured by a Real Estate Mortgage
over a parcel of land covered by Transfer Certificate of
Title (TCT) No. T-23136.
Petitioners subsequently encountered difficulties in
paying their loan obligations hence they requested for
restructuring which was allegedly granted by
Chinabank. Hence, they were surprised when
respondent bank extrajudicially foreclosed the subject
property on October 9, 2001 where it emerged as the
highest bidder. Respondent bank was issued a
Provisional Certificate of Sale and upon petitioners’
failure to redeem the property, ownership was
consolidated in its favor.
According to petitioners, the foreclosure proceedings
should be annulled for failure to comply with the
posting and publication requirements. They also
claimed that they signed the Real Estate Mortgage and
Promissory Note in blank and were not given a copy and
the interest rates thereon were unilaterally fixed by the
respondent.
The RTC ruled in favor of petitioners. The CA ruled that
the complaint states no cause of action because
petitioners admitted that they failed to redeem the
property and that ownership of the same was
consolidated in the name of Chinabank. Hence, this
petition.
ISSUE: WON the complaint states a cause of action-YES
Page 66 of 85

RULING: A cause of action is a formal statement of the
operative facts that give rise to a remedial right. The
question of whether the complaint states a cause of
action is determined by its averments regarding the acts
committed by the defendant. Thus it "must contain a
concise statement of the ultimate or essential facts
constituting the plaintiff’s cause of action." Failure to
make a sufficient allegation of a cause of action in the
complaint "warrants its dismissal."
As defined in Section 2, Rule 2 of the Rules of Court, a
cause of action is the act or omission by which a party
violates the right of another. Its essential elements are
as follows:
1. A right in favor of the plaintiff by whatever
means and under whatever law it arises or is
created;
2. An obligation on the part of the named
defendant to respect or not to violate such
right; and
3. Act or omission on the part of such defendant
in violation of the right of the plaintiff or
constituting a breach of the obligation of the
defendant to the plaintiff for which the latter
may maintain an action for recovery of damages
or other appropriate relief.
It is, thus, only upon the occurrence of the last element
that a cause of action arises, giving the plaintiff the right
to maintain an action in court for recovery of damages
or other appropriate relief. In determining whether an
initiatory pleading states a cause of action, "the test is
as follows: admitting the truth of the facts alleged, can
the court render a valid judgment in accordance with
the prayer?" To be taken into account are only the
material allegations in the complaint; extraneous facts
and circumstances or other matters aliunde are not
considered. The court may consider in addition to the
complaint the appended annexes or documents, other
pleadings of the plaintiff, or admissions in the records.
In the instant case, petitioners specifically alleged that
respondent bank acted in bad faith when it
extrajudicially foreclosed the mortgaged property
notwithstanding the approval of the restructuring of
their loan obligation. They claimed that with such
approval, respondent bank made them believe that
foreclosure would be held in abeyance. They also
alleged that the proceeding was conducted without
complying with the posting and publication
requirements.
Assuming these allegations to be true, petitioners can
validly seek the nullification of the foreclosure since the
alleged restructuring of their debt would effectively
modify the terms of the original loan obligations and
accordingly supersede the original mortgage thus
making the subsequent foreclosure void. Similarly, the
allegation of lack of notice if subsequently proven
renders the foreclosure a nullity in line with prevailing
jurisprudence.
CIVIL PROCEDURE CASE DIGESTS - 1
We find the allegations in the complaint sufficient to
establish a cause of action for nullifying the foreclosure
of the mortgaged property. The fact that petitioners
admitted that they failed to redeem the property and
that the title was consolidated in respondent bank’s
name did not preclude them from seeking to nullify the
extrajudicial foreclosure. Precisely, petitioners seek to
nullify the proceedings based on circumstances
obtaining prior to and during the foreclosure which
render it void.
N. G.R. No. L-32958 November 8, 1930
BLOSSOM AND COMPANY, INC., plaintiff-appellant,
vs. MANILA GAS CORPORATION, defendant-appellee.
"As a general rule a contract to do several things at
several times is divisible in its nature, so as to authorize
successive actions; and a judgment recovered for a
single breach of a continuing contract or covenant is no
bar to a suit for a subsequent breach thereof. But where
the covenant or contract is entire, and the breach total,
there can be only one action, and plaintiff must therein
recover all his damages."
FACTS: On March 3, 1927, the plaintiff filed a
complaint against the defendant contending that on
September 10, 1918, it entered into a contract with the
defendant in which the plaintiff promised and
undertook to purchase and receive from the defendant
and the defendant agreed to sell and deliver to the
plaintiff, for a period of four years, three tons of water
gas tar per month from September to January 1, 1919
and twenty tons per month after January 1, 1919, for
the remaining period of the contract; one-half ton of
coal gas tar a month from September to January 1,
1919, and six tons per month after January 1, 1919, for
the remainder of the contract. (old contract)
On January 31, 1919, this contract was amended so that
it should continue to remain in force for a period of ten
years from January 1, 1919, and it was agreed that the
plaintiff should not be obliged to take the qualities of
the tars required during the year 1919, but that it might
purchase tars in such quantities as it could use to its
advantage at the stipulated price. That after the year
1919 the plaintiff would take at least the quantities
specified in the contract of September 10, 1918, to be
taken from and after January 1, 1919, and that at its
option it would have the right to take any quantity of
water gas tar in excess of the minimum quantity
specified in that contract and up to the total amount of
output of that tar of defendant's plant and also to take
any quantity of coal gas tar in excess of the minimum
quantity specified in that contract and up to 50 per cent
of defendant's entire output of coal gas tar, and that by
giving the defendant ninety days' notice, it would have
the right at its option to take the entire output of
defendant's coal gas tar, except such as it might need
for its own use in and about its plant. That in
consideration of this modification of the contract,
plaintiff agreed to purchase from the defendant of
certain piece of land to which the plaintiff in turn
Page 67 of 85

executed a mortgage thereon to the defendant for
P17,140.20, to secure the payment of the balance of the
purchase price. (10-year contract)
That about the last part of July, 1920 the defendant
herein, the Manila Gas Corporation willfully, and
deliberately breached its said contract with the plaintiff
by ceasing to deliver any coal and water gas tar to it
thereunder solely because of the increased price of its
tar products and its desire to secure better prices
therefor than plaintiff was obliged to pay to it,
notwithstanding the frequent and urgent demands
made by the plaintiff upon it to comply with its
aforesaid contract by continuing to deliver the coal and
water gas tar to the plaintiff thereunder, but the said
defendant flatly refused to make any deliveries under
said contract.
On November 23, 1923, the plaintiff was forced to
commence an action against the defendant before the
Court of First Instance of Manila to recover the damages
which it had up to that time suffered by reason of such
flagrant violation of said contract on the part of the
defendant herein, and to obtain the specific
performance of the said contract.
Judgment was rendered by RTC in favor of the plaintiff
herein and against the said defendant, the Manila Gas
Corporation, for the sum of P26,119.08, as the damages
suffered by this plaintiff by the defendant's breach of
said contract from July, 1920, up to and including
September, 1923, but the court refused to order the
said defendant to resume the delivery of the coal and
water gas tar to the plaintiff under said contract, but
left the plaintiff with its remedy for damages against
said defendant for the subsequent breaches of said
contract, which said decision was affirmed by our
Supreme Court on March 3, 1926.
The defendant made no deliveries under its contract,
from July, 1920 to March 26, 1926, or until after the
Supreme Court affirmed the judgment of the lower
court for damages.
On January 31, 1926, Plaintiff notified defendant in
writing that it desired to take the delivery of 50 per cent
of defendant's coal tar production for that month and
that on November 1, 1926, it desired to take the entire
output of defendant's coal gas tar. But still defendant
refused to make either of such deliveries unless plaintiff
would take all of its water gas tar production with the
desired quantity of coal gas tar which refusal was a plain
violation of the contract. Plaintiff further notified
defendant that in February, 1927, it would require 50
per cent of its total water gas tar production and that in
April 1927, it would require the total output of the
defendant of both coal and water gas tars, and that it
refused to make either of such deliveries. Thus, plaintiff
filed an action for rescission of the contract and
damages amounting to 300,000.00
CIVIL PROCEDURE CASE DIGESTS - 1
The defendant contended that the complaint has the
same cause of action as the action brought on or about
the 16th day of June, 1925, wherein said plaintiff
recovered judgment upon the merits thereof, against
said defendant decreeing a breach of the contract sued
upon herein, and awarding damages therefor in the
sum of P26,119.08.
The RTC rendered judgment awarding damages to
plaintiff only amounting to 2, 219.60. The plaintiff
appealed the case seeking to recover damages from the
defendant which it claims to have sustained after
September, 1923, arising from, and growing out of, its
original contract of September 10, 1918, as modified on
January 1, 1919, to continue for a period of ten years
from that date.
ISSUE: WON the plaintiff, in a former action, having
recovered judgment for the damages which it sustained
by reason of a breach of its contract by the defendant
up to September, 1923, can now in this action recover
damages it may have sustained after September, 1923,
arising from, and growing out of, a breach of the same
contract, upon and for which it recovered its judgment
in the former action. –NO
RULING: Plaintiff’s original cause of action, in which it
recovered judgment for damages, was founded on the
ten-year contract, and that the damages which it then
recovered were recovered for a breach of that contract.
Both actions are founded on one and the same contract.
In the instant case the plaintiff alleges and relies upon
the ten year contract on January 11, 1920, which in bad
faith was broken by the defendant.
As a general rule a contract to do several things at
several times in its nature, so as to authorize successive
actions; and a judgment recovered for a single breach of
a continuing contract or covenant is no bar to a suit for
a subsequent breach thereof. But where the covenant
or contract is entire, and the breach total, there can be
only one action, and plaintiff must therein recover all
his damages.
The counsel for the plaintiff contends that the former
judgment did not constitute a bar to the present action
but that the plaintiff had the right to elect to waive or
disregard the breach, keep the contract in force, and
maintain successive actions for time to time as the
installments of goods were to be delivered, how
numerous these actions might be.
As there was a total breach of the contract by the
defendant's refusal to deliver, the plaintiff cannot split
up his demand and maintain successive actions, but
must either recover all his damages in the first suit or
wait until the contract matured or the time for the
delivery of all the goods had arrived. In other words,
there can be but one action for damages for a total
breach of an entire contract to deliver goods, and the
fact that they were to be delivered in installment from
time to time does not change the general rule.
Page 68 of 85

It will thus be seen that, where there is a complete and
total breach of a continuous contract for a term of
years, the recovery of a judgment for damages by
reason of the breach is a bar to another action on the
same contract for and on account of the continuous
breach.
Plaintiff contends that such deliveries were made under
and in continuation of the old contract. The record
tends to show that tars which the defendant delivered
after April 7, 1926, were not delivered under the old
contract of January 1, 1920, and that at all times since
July 1920, the defendant has consistently refused to
make any deliveries of any tars under that contract.
O. G.R. No. L-45350 May 29, 1939
BACHRACH MOTOR CO., INC., plaintiff-appellant,
vs. ESTEBAN ICARAÑGAL and ORIENTAL COMMERCIAL
CO., INC., defendants-appellees.
FACTS: On June 11 , 1930, defendant herein, Esteban
Icarañgal, with one Jacinto Figueroa, executed in favor
of the plaintiff, Bachrach Motor Co., Inc., a promissory
note for one thousand six hundred fourteen pesos
(P1,614), and in security for its payment, Esteban
Icarañgal executed a real estate mortgage on a parcel of
land in Pañgil, Laguna, which was duly registered on
August 5, 1931, in the registry of deeds of the Province
of Laguna. Thereafter, promissors defaulted in the
payment of the agreed monthly installments;
wherefore, plaintiff instituted in the CFI an action for
the collection of the amount due on the note. Judgment
was there rendered for the plaintiff. A writ of execution
was subsequently issued and, in pursuance thereof, the
provincial sheriff of Laguna, at the indication of the
plaintiff, levied on the properties of the defendants,
including that which has been mortgaged by Esteban
Icarañgal in favor of the plaintiff.
The other defendant herein, Oriental Commercial Co.,
Inc., interposed a third-party claim, alleging that by
virtue of a writ of execution issued by the municipal
court of the City of Manila, the property which was the
subject of the mortgage and which has been levied
upon by the sheriff, had already been acquired by it at
the public auction on May 12, 1933.
By reason of this third-party claim, the sheriff desisted
from the sale of the property and, in consequence
thereof, the judgment rendered in favor of the plaintiff
remained unsatisfied. Whereupon, plaintiff instituted an
action to foreclose the mortgage. The trial court
dismissed the action thus the plaintiff took the present
appeal.
ISSUE: WON plaintiff is barred from foreclosing the real
estate mortgage after it has elected to sue and obtain a
personal judgment against the defendant-appellee on
the promissory note for the payment of which the
mortgage was constituted as a security. -YES
CIVIL PROCEDURE CASE DIGESTS - 1
RULING: "The rule is well established that the creditor
may waive whatever security he has and maintain a
personal action, in the absence of statutory provisions
to the contrary."
Most of the provisions of our Code of Civil Procedure
are taken from that of California, and in that jurisdiction
the rule has always been, and still is, that a party who
sues and obtains a personal judgment against a
defendant upon a note, waives thereby his right to
foreclose the mortgage securing it.
We have the rule against splitting a single cause of
action. This rule, though not contained in any statutory
provision, has been applied by this court in all
appropriate cases. The rule against splitting a single
cause of action is intended "to prevent repeated
litigation between the same parties in regard to the
same subject of controversy; to protect defendant from
unnecessary vexation; and to avoid the costs and
expenses incident to numerous suits." It comes from
that old maxim nemo bedet bis vexare pro una et eadem
cause (no man shall be twice vexed for one and the
same cause). And it developed, certainly not as an
original legal right of the defendant, but as an
interposition of courts upon principles of public policy
to prevent inconvenience and hardship incident to a
repeated and unnecessary litigations.
For non-payment of a note secured by mortgage, the
creditor has a single cause of action against the debtor.
This single cause of action consists in the recovery of
the credit with execution of the security. In other
words, the creditor in his action may make two
demands, the payment of the debt and the foreclosure
of his mortgage. But both demands arise from the same
cause, the non-payment of the debt, and, for that
reason, they constitute a single cause of action. Though
the debt and the mortgage constitute separate
agreements, the latter is subsidiary to the former, and
both refer to one and the same obligation.
Consequently, there exists only one cause of action for
a single breach of that obligation.
In the case at bar, Plaintiff, then, by applying the rule
above stated, cannot split up his single cause of action
by filing a complaint for payment of the debt, and
thereafter another complaint for foreclosure of the
mortgage. If he does so, the filing of the first complaint
will bar the subsequent complaint. By allowing the
creditor to file two separate complaints simultaneously
or successively, one to recover his credit and another to
foreclose his mortgage, we will, in effect, be authorizing
him plural redress for a single breach of contract at so
much cost to the courts and with so much vexation and
oppression to the debtor.
We hold, therefore, that, in the absence of express
statutory provisions, a mortgage creditor may institute
against the mortgage debtor either a personal action for
debt or real action to foreclose the mortgage. In other
words, he may pursue either of the two remedies, but
Page 69 of 85

not both. By such election, his cause of action can by no
means be impaired, for each of the two remedies is
complete in itself. Thus, an election to bring personal
action will leave open to him all the properties of the
debtor for attachment and execution, even including
the mortgaged property itself. And, if he waives such
personal action and pursues his remedy against the
mortgaged property, an unsatisfied judgment thereon
would still give him the right to sue for a deficiency
judgment, in which case, all the properties of the
defendant, other than the mortgaged property, are
again open to him for the satisfaction of the deficiency.
In either case, his remedy is complete, his cause of
action undiminished, and any advantages attendant to
the pursuit of one or the other remedy are purely
accidental and are all under his right of election. On the
other hand, a rule that would authorize the plaintiff to
bring a personal action against the debtor and
simultaneously or successively another action against
the mortgaged property, would result not only in
multiplicity of suits so offensive to justice and
obnoxious to law and equity, but also in subjecting the
defendant to the vexation of being sued in the place of
his residence of the plaintiff, and then again in the place
where the property lies.
P. G.R. No. 147593 July 31, 2006
GERONIMO Q. QUADRA, petitioner, vs. THE COURT OF
APPEALS and the PHILIPPINE CHARITY SWEEPSTAKES
OFFICE, respondents.
FACTS: Petitioner was the Chief Legal Officer of
respondent Philippine Charity Sweepstakes Office
(PCSO) when he organized and actively participated in
the activities of CUGCO, an organization composed of
the rank and file employees of PCSO, and then later, the
Association of Sweepstakes Staff Personnel and
Supervisors (CUGCO) (ASSPS [CUGCO]). In April 1964, he
was administratively charged before the Civil Service
Commission with violation of Civil Service Law and Rules
for neglect of duty and misconduct and/or conduct
prejudicial to the interest of the service. On July 14,
1965, the Civil Service Commission rendered a decision
finding petitioner guilty of the charges and
recommending the penalty of dismissal.
The following day, on July 15, 1965, the General
Manager of PCSO, sent petitioner a letter of dismissal,
in accordance with the decision of the Civil Service
Commission. Petitioner filed a motion for
reconsideration of the decision of the Civil Service
Commission on August 10, 1965. At the same time,
petitioner, together with ASSPS (CUGCO), filed with the
Court of Industrial Relations (CIR) a complaint for unfair
labor practice against respondent PCSO and its officers.
On November 19, 1966, the CIR issued its decision
finding respondent PCSO guilty of unfair labor practice
for having committed discrimination against the union
and for having dismissed petitioner due to his union
activities. It ordered the reinstatement of petitioner to
his former position with full backwages and with all the
CIVIL PROCEDURE CASE DIGESTS - 1
rights and privileges pertaining to said position. The
NLRC affirmed the decision of the Labor Arbiter,5
prompting respondent PCSO to file a petition for
certiorari with the CA. The CA reversed the decision of
the NLRC.
ISSUE: W/N the claims for moral and exemplary
damages of the petitioner is allegedly "tantamount to
splitting of cause of action under Sec. 4, Rule 2 of the
1997 Rules of Civil Procedure" is contrary to law.
RULING: NO. The filing of a petition for damages before
the CIR did not constitute splitting of cause of action
under the Revised Rules of Court. The Revised Rules of
Court prohibits parties from instituting more than one
suit for a single cause of action. Splitting a cause of
action is the act of dividing a single cause of action,
claim or demand into two or more parts, and bringing
suit for one of such parts only, intending to reserve the
rest for another separate action. The purpose of the
rule is to avoid harassment and vexation to the
defendant and avoid multiplicity of suits. The prevailing
rule at the time that the action for unfair labor practice
and illegal dismissal was filed and tried before the CIR
was that said court had no jurisdiction over claims for
damages. Hence, petitioner, at that time, could not
raise the issue of damages in the proceedings. However,
on January 27, 1967, the Supreme Court rendered its
ruling in Rheem of the Philippines, Inc., et al. v. Ferrer,
et al. upholding the jurisdiction of the CIR over claims
for damages incidental to an employee's illegal
dismissal. Petitioner properly filed his claim for damages
after the declaration by the Court and before the ruling
on their case became final. Such filing could not be
considered as splitting of cause of action.
Q. G.R. No. L-25134 October 30, 1969
THE CITY OF BACOLOD, plaintiff-appellee, vs. SAN
MIGUEL BREWERY, INC., defendant-appellant.
FACTS: On February 17, 1949, the City Council of
Bacolod passed Ordinance No. 66, series of 1949
imposing upon "any person, firm or corporation
engaged in the manufacturer bottling of coca-cola,
pepsi cola, tru orange, lemonade, and other soft drinks
within the jurisdiction of the City of Bacolod, ... a fee of
ONE TWENTY-FOURTH (1/24) of a centavo for every
bottle thereof," plus "a surcharge of 2% every month,
but in no case to exceed 24% for one whole year," upon
"such local manufacturers or bottler above-mentioned
who will be delinquent on any amount of fees due"
under the ordinance. In 1959, this ordinance was
amended by Ordinance No. 150, series of 1959, by
increasing the fee to "one-eighth (1/8) of a centavo for
every bottle thereof." In other words, the fee was
increased from P0.01 to P0.03 per case of soft drinks.
Appellant refused to pay the additional fee and
challenged the validity of the whole ordinance.
Under date of March 23, 1960, appellee sued appellant
in Civil Case No. 5693 of the Court of First Instance of
Page 70 of 85

Negros Occidental, with the corresponding Complaint
alleging, inter alia:
3. — That the defendant, Manager of the San Miguel
Brewery, Bacolod Coca Cola Plant, Bacolod Branch since
the approval of Ordinance No. 66, Series of 1949 as
amended by Ordinance No. 150, Series of 1959, which
took effect on July 1, 1959, only paid to the plaintiff
herein the P0.01 bottling tax per case of soft drinks
thereby refusing to pay the P0.03 bottling tax per case
of soft drinks which amounted to P26,306.54 at P0.02
per case of soft drinks such as coca cola and tru orange
manufactured or bottled by said company as per
statement submitted by the Assistant City Treasurer of
Bacolod City herewith attached as Annex "C" of this
complaint;
Failing thus in its attempt to collect the surcharge
provided for in the ordinances in question, appellee
filed a second action (Civil Case No. 7355) to collect the
said surcharges. Under date of July 10, 1964, it filed the
corresponding complaint before the same Court of First
Instance of Negros Occidental.
ISSUE: W/N appellee may institute more than one suit
for a single cause of action.
RULING: We find appellant's position essentially
correct. There is no question that appellee split up its
cause of action when it filed the first complaint on
March 23, 1960, seeking the recovery of only the
bottling taxes or charges plus legal interest, without
mentioning in any manner the surcharges. The rule on
the matter is clear. Sections 3 and 4 of Rule 2 of the
Rules of Court of 1940 which were still in force then
provided:
SEC. 3. Splitting a cause of action, forbidden. —
A single cause of action cannot be split up into
two or more parts so as to be made the subject
of different complaints. .
SEC. 4. Effect of splitting. — If separate
complaints were brought for different parts of a
single cause of action, the filing of the first may
be pleaded in abatement of the others, and a
judgment upon the merits in either is available
as a bar in the others.
In the case at bar, when appellant failed and refused to
pay the difference in bottling charges from July 1, 1959,
such act of appellant in violation of the right of appellee
to be paid said charges in full under the Ordinance, was
one single cause of action, but under the Ordinance,
appellee became entitled, as a result of such non-
payment, to two reliefs, namely: (1) the recovery of the
balance of the basic charges; and (2) the payment of the
corresponding surcharges, the latter being merely a
consequence of the failure to pay the former. Stated
differently, the obligation of appellant to pay the
surcharges arose from the violation by said appellant of
the same right of appellee from which the obligation to
pay the basic charges also arose. Upon these facts, it is
obvious that appellee has filed separate complaints for
each of two reliefs related to the same single cause of
CIVIL PROCEDURE CASE DIGESTS - 1
action, thereby splitting up the said cause of action. The
rule against splitting a single cause of action is intended
"to prevent repeated litigation between the same
parties in regard to the same subject of controversy; to
protect defendant from unnecessary vexation; and to
avoid the costs and expenses incident to numerous
suits." Section 4 of Rule 2 of the Rule of Court is
unmistakably clear as to the effect of the splitting up of
a cause of action. It says, "if separate complaints are
brought for different parts (reliefs) of a single cause of
action, the filing of the first (complaint) may be pleaded
in abatement of the others, and a judgment upon the
merits in either is available as a bar in the others."
In other words, whenever a plaintiff has filed more than
one complaint for the same violation of a right, the
filing of the first complaint on any of the reliefs born of
the said violation constitutes a bar to any action on any
of the other possible reliefs arising from the same
violation, whether the first action is still pending, in
which event, the defense to the subsequent complaint
would be litis pendentia, or it has already been finally
terminated, in which case, the defense would be res
adjudicata.2 Indeed, litis pendentia and res adjudicata,
on the one hand, and splitting up a cause of action on
the other, are not separate and distinct defenses, since
either of the former is by law only the result or effect of
the latter, or, better said, the sanction for or behind it.
R. G.R. No. 133113 August 30, 2001
EDGAR H. ARREZA, petitioner, vs. MONTANO M. DIAZ,
JR., respondent.
FACTS: Bliss Development Corporation is the owner of a
housing complex located in Quezon City. It instituted
before RTC Makati an interpleader case against Arreza
and Diaz who were conflicting claimants of the property
(Civil Case No. 94-2086). The RTC ruled in favor of
Arreza. In view of said decision, Bliss executed a
contract to sell the property to Arreza and Diaz was
constrained to transfer possession together with all
improvements to Arreza.
Thereafter, Diaz filed a case against Arreza and Bliss for
the reimbursement of the cost of his acquisition and
improvements on the property (Civil Case No. 96-1372).
Arreza filed a Motion to Dismiss on the ground of res
judicata and lack of cause of action. RTC denied the
Motion to Dismiss. Arreza appealed to CA which
dismissed the petition saying that res judicata does not
apply because the interpleader case only settled the
issue on who had a better right. It did not determine the
parties‘ respective rights and obligations. The action
filed by Diaz seeks principally the collection of damages
in the form of the payments Diaz made to Bliss and the
value of the improvements he introduced on the
property matters that were not adjudicated upon in the
previous case for interpleader.
ISSUE: Are Diaz's claims for reimbursement against
Arreza barred by res adjudicata?
Page 71 of 85

RULING: YES. The court in a complaint for interpleader
shall determine the rights and obligations of the parties
and adjudicate their respective claims. Such rights,
obligations and claims could only be adjudicated if put
forward by the aggrieved party in assertion of his rights.
That party in this case referred to respondent Diaz. The
second paragraph of Section 5 of Rule 62 of the 1997
Rules of Civil Procedure provides that the parties in an
interpleader action may file counterclaims, cross-claims,
third party complaints and responsive pleadings
thereto, as provided by these Rules. The second
paragraph was added to Section 5 to expressly
authorize the additional pleadings and claims
enumerated therein, in the interest of a complete
adjudication of the controversy and its incidents.
Pursuant to said Rules, respondent should have filed his
claims against petitioner Arreza in the interpleader
action. Having asserted his rights as a buyer in good
faith in his answer, and praying relief therefor,
respondent Diaz should have crystallized his demand
into specific claims for reimbursement by petitioner
Arreza. This he failed to do. Having failed to set up his
claim for reimbursement, said claim of respondent Diaz
being in the nature of a compulsory counterclaim is now
barred.
The elements of res adjudicata are: (a) that the former
judgment must be final; (b) the court which rendered
judgment had jurisdiction over the parties and the
subject matter; (c) it must be a judgment on the merits;
and (d) there must be between the first and second
causes of action identity of parties, subject matter, and
cause of action. In the present case, we find there is an
identity of causes of action between Civil Case No. 94-
2086 and Civil Case No. 96-1372. Respondent Diaz's
cause of action in the prior case, now the crux of his
present complaint against petitioner, was in the nature
of an unpleaded compulsory counterclaim, which is now
barred. There being a former final judgment on the
merits in the prior case, rendered in Civil Case No. 94-
2086 by Branch 146 of the Regional Trial Court of
Makati, which acquired jurisdiction over the same
parties, the same subject property, and the same cause
of action, the present complaint of respondent herein
(Diaz) against petitioner Arreza docketed as Civil Case
No. 96-1372 before the Regional Trial of Makati, Branch
59 should be dismissed on the ground of res adjudicata.
S. G.R. No. 131457 April 24, 1998
FORTICH vs. CORONA
FACTS: On March 29, 1996, strikers went on protest
concerning the decision of the Office of the President
issued through the executive secretary Ruben Torres
which approved the conversion of a 144 hectare of
agricultural land to an agro-industrial (institutional)
area. That event led to the issuance of the so-called
“win-win” resolution made by the Office of the
President on November 7, 1997 through then Deputy
Executive Secretary, Renato Corona, which substantially
modified its earlier decision after it had become final
and executory. The said resolution modified the
CIVIL PROCEDURE CASE DIGESTS - 1
approval of the land conversion to agro-industrial area
only to the extent of 44 hectares and has ordered that
the remainder of 100 hectares to be distributed to the
qualified farmer-beneficiaries.
On August 12, 1997, the writ of preliminary injunction
issued by the RTC was challenged by some farmers
before the CA (Court of Appeals) through a petition (for
certiorari and prohibition) praying for the lifting of the
injunction and for issuance of writ of prohibition from
further trying the RTC case. Some alleged farmer-
beneficiaries went on a hunger strike on October 9,
1997 in front of the DAR compound in Quezon City
protesting about the decision made by the Office of the
President on March 29, 1996. The Office of the
President resolved the strikers’ protest by issuing the
so-called “win-win” resolution, which was drafted by
then deputy executive secretary Renato Corona, on
November 7, 1997.
Governor Fortich and NQSRMDC received a copy of the
said “win-win” resolution and filed the present petition
for certiorari, prohibition and injunction with urgent
prayer of TRO and/or writ of preliminary injunction
against then deputy secretary Renato Corona and DAR
secretary Ernesto Garilao. A motion for leave to
intervene was filed by alleged farmer-beneficiaries,
through counsel, claiming that they are real parties in
interest. In seeking the annulment of the “win-win”
resolution, the petitioners claim that the OP came up
with a purely political decision to appease the farmers
by reviving and modifying the decision (made on March
29, 1996) which has been declared final and executory
in an order issued on June 23, 1997. They (petitioners)
also allege that the respondent (then deputy secretary)
committed grave abuse of discretion and acted beyond
his jurisdiction when he drafted the questioned
resolution on November 7, 1997.
ISSUE: W/N the doctrine of Res Judicata applies in the
case at bar
RULING: NO. The Supreme Court ruled that the acts of
the petitioner does not constitute forum shopping,
“that there is forum-shopping whenever, as a result of
an adverse opinion in one forum, a party seeks a
favorable opinion other than by appeal or certiorari in
another”. The principle applies not only with respect to
suits filed in the courts but also in connection with
litigation commenced in the courts while administrative
proceeding is pending, as in this case, in order to defeat
administrative processes in anticipation of an favorable
administrative ruling and a favorable court ruling. This
specially so, as in this case, where the court in which the
second suit was brought, has no jurisdiction.
Furthermore, the court has explained that the test for
determining whether a party violated the rule against
forum shopping is where the elements of litis pendentia
are present or where a final judgement in one case will
amount to res judicata in the other, which are absent in
the case at bar.
Page 72 of 85

A cursory examination of the cases filed by the
petitioners does not show that the said cases are similar
with each other. The petition for certiorari in the Court
of Appeals sought the nullification of the DAR
Secretary's order to proceed with the compulsory
acquisition and distribution of the subject property. On
the other hand, the civil case in RTC of Malaybalay,
Bukidnon for the annulment and cancellation of title
issued in the name of the Republic of the Philippines,
with damages, was based on the following grounds: (1)
the DAR, in applying for cancellation of petitioner
NQSRMDC's title, used documents which were earlier
declared null and void by the DARAB; (2) the
cancellation of NQSRMDC's title was made without
payment of just compensation; and (3) without notice
to NQSRMDC for the surrender of its title. The present
petition is entirely different from the said two cases as it
seeks the nullification of the assailed "Win-Win"
Resolution of the Office of the President dated
November 7, 1997, which resolution was issued long
after the previous two cases were instituted.
The fourth and final preliminary issue to be resolved is
the motion for intervention filed by alleged farmer-
beneficiaries, which we have to deny for lack of merit.
In their motion, movants contend that they are the
farmer-beneficiaries of the land in question, hence, are
real parties in interest. To prove this, they attached as
Annex "I" in their motion a Master List of Farmer-
Beneficiaries. Apparently, the alleged master list was
made pursuant to the directive in the dispositive
portion of the assailed "Win-Win" Resolution which
directs the DAR "to carefully and meticulously
determine who among the claimants are qualified
farmer-beneficiaries." However, a perusal of the said
document reveals that movants are those purportedly
"Found Qualified and Recommended for Approval." In
other words, movants are merely recommendee farmer-
beneficiaries. The rule in this jurisdiction is that a real
party in interest is a party who would be benefited or
injured by the judgment or is the party entitled to the
avails of the suit. Real interest means a present
substantial interest, as distinguished from a mere
expectancy or a future, contingent, subordinate or
consequential interest. 59 Undoubtedly, movants'
interest over the land in question is a mere expectancy.
Ergo, they are not real parties in interest.
T. SAMANIEGO vs AGUILA 334 SCRA 438 (2000)
Facts: Private respondents Vic Alvarez Aguila and
Josephine Taguinod filed for exemption from the
Operation Land Transfer Program of the DAR for the
land owned by their father Salud Aguila. The tenants
Samaniego, et. al, opposed the petition for exemption.
The Office of the President granted the exemption. The
petitioners appealed to the CA but the CA dismissed the
appeal for failure to implead the Office of the President,
as they should be considered as indispensable parties.
Petitioners moved for a reconsideration, contending
that under Administrative Circular No. 1-95, the Office
CIVIL PROCEDURE CASE DIGESTS - 1
of the President need not be impleaded. However, their
motion was denied.
Issue: Whether the Office of the President should be
considered as an indispensable party and must
therefore be impleaded pursuant to the Rules. - NO
Held: No. An indispensable party is a party in interest
without whom no final determination can be had of an
action without that party being impleaded.
Indispensable parties are those with such an interest in
the controversy that a final decree would necessarily
affect their rights, or that the court cannot proceed
without their presence. "Interests" within the meaning
of this rule, should be material, directly in issue and to
be affected by the decree as distinguished from a mere
incidental interest in the question involved. On the
other hand, a nominal or pro forma party is one who is
joined as a plaintiff or defendant, not because such
party has any real interest on the subject matter or
because any relief is demanded, but merely because the
technical rules of pleadings require the presence of such
party on the record. In the case at bar, the failure to
implead the Office of the President does not warrant
the dismissal of the case as such is considered as a pro
forma party.
U. De Castro vs. CA, 384 SCRA 607
Facts: Private respondent Artigo sued petitioners
Constante and Amor de Castro to collect the unpaid
balance of his broker’s commission from the De Castros.
The appellants, De Castros, were co-owners of 4 lots in
Cubao, Quezon City. The appellee, Artigo, was
authorized by appellants to act as real estate broker in
the sale of these properties for the amount of Php
23,000,000.00, 5% of which will be given to the agent as
commission. Appellee first found the Times Transit
Corporation and 2 lot were sold. In return, he received
Php 48,893.76 as commission.
Appellee apparently fell short changed because
according to him, his total commission should be Php
352,500.00 which is 5% of the agreed price of Php
7,050,000.00 paid by Times Transit Corporation to
appellants for the 2 lots that it was he who introduced
the buyer to appellants and unceasingly facilitated the
negotiation which ultimately led to the consummation
of the sale. Hence, he sued to collect the balance of Php
303,606.24 after having received Php 48,893.76 in
advance.
Appelants argued that appellee is selfishly asking for
more than what he truly deserved as commission to the
prejudice of other agents who were more instrumental
to the consummation of the sale and that there were
more or less 18 others who took active efforts.
The de Castros argued that Artigo’s complaint should
have been dismissed for failure to implead all the co-
owners of the 2 lots. The de Castros contend that failure
to implead such indispensable parties is fatal to the
Page 73 of 85

complaint since Artigo, as agent of all the four co-
owners, would be paid with funds co-owned by the four
co-owners.
It was shown also that Constante Amor de Castro signed
the authorization of Artigo as owner and representative
of the co-owners.
ISSUE: Whether or not the complaint merits dismissal or
failure to implead other co-owners as indispensable
parties.
HELD: No. The de Castros’ contentions are devoid of
legal basis. The CA explained that it is not necessary to
implead the co-owners since the action is exclusively
based on a contract of agency between Artigo and
Constante. The rule on mandatory joinder of
indispensable parties is not applicable to the instant
case.
Constante signed the note as owner and as
representative of the other co-owners. Under this note,
a contract of agency was clearly constituted between
Constante and Artigo. Whether Constatnte appointed
Artigo as agent, in Constatnte’s individual or
representative capacity, or both, the de Castros cannot
seek the dismissal of the case for failure to implead the
other co-owners as indispensable parties. The de
Castros admit that the other co-owners are solidarily
liable under the contract of agency, citing Article 1915
of the Civil Code, the solidary liability of the four co-
owners, however, militates against their theory that the
other co-owners should be impleaded as indispensable
parties. When the law expressly provides for solidarity
of the obligation, as in the liability of co-principals in a
contract of agency, each obligor may be compelled to
pay the entire obligation. The agent may recover the
whole compensation from any one of the co-principals,
as in this case.
Indeed, Article 1216 of the Civil Code provides that a
creditor may sue any of the solidary debtors. This article
reads:chanrob1es virtual 1aw library
Art. 1216. The creditor may proceed against any one of
the solidary debtors or some or all of them
simultaneously. The demand made against one of them
shall not be an obstacle to those which may
subsequently be directed against the others, so long as
the debt has not been fully collected.
V. Frias v. Judge Sorongon and First Asia Realty
Development Corp., GR No. 184827, 02/11/2015
Facts: The RTC issued an order denying the petitioners’
motion for leave to litigate as indigents. Petitioners
argue that respondent judge did not conduct the proper
hearing as prescribed under Section 21, Rule 3 of the
Rules of Court. They claim that private respondents
neither submitted evidence nor were they required by
respondent judge to submit evidence in support of their
motions on the issue of indigency of petitioners.
CIVIL PROCEDURE CASE DIGESTS - 1
Issue: Whether the petitioners should be exempted
from payment of docket fees and other lawful fees as
provided under Section 21, Rule 3 of the Rules of Court.
– YES
Held: The Supreme Court ruled that the hearing
requirement, contrary to petitioners’ claim, was
complied with during the hearings on the motions to
dismiss filed by respondents. In said hearings,
petitioners counsel was present and they were given
the opportunity to prove their indigency. Clearly, their
non-payment of docket fees is one of the grounds
raised by respondents in their motions to dismiss and
the hearings on the motions were indeed the perfect
opportunity for petitioners to prove that they are
entitled to be treated as indigent litigants and thus
exempted from the payment of docket fees as initially
found by the Executive Judge.
W. National Power Corporation v. Provincial
Government of Bataan, GR No. 180654, 04/212014
Facts: On March 28, 2003 petitioner National Power
Corporation (NPC) received a notice of franchise tax
delinquency from the respondent Provincial
Government of Bataan (the Province) for P45.9 million
covering the years 2001, 2002, and 2003. The Province
based its assessment on the NPC's sale of electricity that
it generated from two power plants in Bataan. Rather
than pay the tax or reject it, the NPC chose to reserve its
right to contest the computation pending the decision
of the Supreme Court in National Power Corporation v.
City of Cabanatuan,[1] a case where the issue of the
NPC's exemption from the payment of local franchise
tax was then pending.
Province again sent notices of tax due to the NPC,
calling its attention to the Court's Decision in National
Power Corporation v. City of Cabanatuan that held the
NPC liable for the payment of local franchise tax. The
NPC replied, however, that it had ceased to be liable for
the payment of that tax after Congress enacted
Republic Act (R.A.) 9136, also known as the Electric
Power Industry Reform Act. By operation of the EPIRA in
2001, the NPC had ceased to engage in power
transmission, given that all its facilities for this function,
including its nationwide franchise, had been transferred
to the National Transmission Corporation (TRANSCO).
The new law relieved the NPC of the function of
generating and supplying electricity beginning that year.
Consequently, the Province has no right to further
assess it for the 2001, 2002, and 2003 local franchise
tax.
NPC received a copy of the Certificate of Sale of Real
Property covering the auctioned properties for
P60,477,285.22, the amount of its franchise tax
delinquency.
On July 7, 2004 the NPC filed with the Regional Trial
Court (RTC) of Mariveles, Bataan, a petition for
Page 74 of 85

declaration of nullity of the foreclosure sale with prayer
for preliminary mandatory injunction against the
Province, the provincial treasurer, and the Sangguniang
Panlalawigan.
The NPC alleged that the foreclosure had no legal basis
since R.A. 7160 which authorized the collection of local
franchise tax had been modified by the EPIRA.
Issues:
(1) Whether or not the CA erred in failing to rule
that the NPC no longer owned or operated the
business subject to local franchise tax;
(2) Whether or not the Province cannot execute on
former NPC properties that had been taken
from it and transferred to other government
corporations; and
(3) Whether or not PSALM and TRANSCO are
indispensable parties to the case.
Ruling: NPC failed to present evidence that it no longer
owned or operated the business subject to local
franchise tax and that the properties the Province levied
on did not belong to it. But proving these things did not
require the presentation of evidence in this case since
these events took place by operation of law. Within six
(6) months from the effectivity of this Act, the
transmission and subtransmission facilities of NPC and
all other assets related to transmission operations,
including the nationwide franchise of NPC for the
operation of the transmission system and the grid, shall
be transferred to the TRANSCO.
The above created the TRANSCO and transferred to it
the NPC's electrical transmission function with effect on
June 26, 2001. The NPC, therefore, ceased to operate
that business in Bataan by operation of law. Since the
local franchise tax is imposed on the privilege of
operating a franchise, not a tax on the ownership of the
transmission facilities, it is clear that such tax is not a
liability of the NPC.
An indispensable party is one who has an interest in
the controversy or subject matter and in whose
absence there cannot be a determination between the
parties already before the court which is effective,
complete or equitable.[2] Here, since the subject
properties belong to PSALM Corp. and TRANSCO, they
are certainly indispensable parties to the case that
must be necessarily included before it may properly go
forward. For this reason, the proceedings below that
held the NPC liable for the local franchise tax is a
nullity.
X. G.R. No. 176598 July 9, 2014
PETRONIO CLIDORO, DIONISIO CLIDORO, LOLITA
CLIDORO, CALIXTO CARD ANO, JR., LOURDES CLIDORO-
LARIN, MATEO CLIDORO and MARLIZA CLIDORO-DE
UNA, Petitioners, vs. AUGUSTO JALMANZAR,
GREGORIO CLIDORO, JR., SENECA CLIDORO-CIOCSON,
MONSERAT CLIDORO-QUIDAY, CELESTIAL CLIDORO-
BINASA, APOLLO CLIDORO, ROSALIE CLIDORO-
CIVIL PROCEDURE CASE DIGESTS - 1
CATOLICO, SOPHIE CLIDORO, and JOSE CLIDORO, JR.,
Respondents.
FACTS: The instant appeal stemmed from a complaint,
docketed as Civil Case No. T-2275 for revival of
judgment filed by Rizalina Clidoro, et al. against Onofre
Clidoro, et al., praying that the Decisiondated
November 13, 1995 of the Court of Appeals (CA) in CA-
G.R. CV No. 19831, which affirmed with modification
the RTC Decision dated March 10, 1988 in Civil Case No.
T-98 for partition, berevived and that the corresponding
writ of execution be issued.
On September 3, 2003, defendants-appellees except
Gregoria Clidoro-Palanca, moved to dismiss the said
complaint on the following grounds: "1.) The petition,
not being brought up against the real partiesin-interest,
is dismissible for lack of cause of action; 2.) The
substitution of the parties defendant is improper and is
not in accordance with the rules; 3.) Even if the decision
is ordered revived, the same cannot be executed since
the legal requirements of Rule 69, Section 3 of the 1997
Rules of Civil Procedure has not been complied with;
and 4.) The Judgment of the Honorable Court ordering
partition is merely interlocutory as it leaves something
more to be done to complete the disposition of the
case."
After the filing of plaintiffs-appellants'
Comment/Opposition to the Motion to Dismiss,
defendants-appellees' Reply, plaintiffs-appellants'
Rejoinder and defendants-interested parties' Sur-
Rejoinder, the RTC issued the assailed Order dated
December 8, 2003 dismissing the instant complaint for
lack of cause of action, the complaint shows that most
of the parties-plaintiffs, parties defendants and
interested parties are already deceased and have no
more natural or material existence. This is contrary to
the provision of the Rules (Sec. 1, Rule 3, 1997 Rules of
Civil Procedure). They could no longer be considered as
the real parties-in-interest. Besides, pursuant to Sec. 3,
Rule 3 (1997 Rules of Civil Procedure), where the action
is allowed to be prosecuted or defended by a
representative or someone acting in fiduciary capacity,
the beneficiary shall be included in the title of the case.
In the instant case the beneficiaries are already
deceased persons.
Also, the Complaint states thatthey were the original
parties in Civil Case No. T-98 for Partition, but this is not
so (paragraph 2). Some of the parties are actually not
parties to the original case, but representing the original
parties who are indicated as deceased. From the
foregoing, the Court finds the instant complaint to be
flawed in form and substance. The suit is not brought by
the real parties-ininterest, thus a motion to dismiss on
the ground that the complaint states no cause of action
is proper (Section 1(g), Rule 16).
Issue: Whether the complaint for revival of judgment
may be dismissed for lack of cause of action as it was
not brought by or against the real parties-in-interest.
Page 75 of 85

Ruling: No. The Court emphasizes that lack of cause of
action is not enumerated under Rule 16 of the Rules of
Court as one of the grounds for the dismissal of a
complaint. As explained in Vitangcol v. New Vista
Properties, Inc.,5 to wit:
Lack of cause of action is, however, not a ground for a
dismissal of the complaint through a motion to dismiss
under Rule 16 of the Rules of Court, for the
determination of a lack of cause of action can only be
made during and/or after trial. What is dismissible via
that mode is failure of the complaint to state a cause of
action. Sec. 1(g) of Rule 16 of the Rules of Court
provides that a motion may be made on the ground
"that the pleading asserting the claim states no cause of
action."
The rule is that in a motion to dismiss, a defendant
hypothetically admits the truth ofthe material
allegations of the ultimate facts contained in the
plaintiff's complaint. When a motion to dismiss is
grounded on the failure tostate a cause of action, a
ruling thereon should, as rule, be based only on the
facts alleged in the complaint.
In a motion to dismiss for failureto state a cause of
action, the focus is on the sufficiency, not the veracity,
of the material allegations. The test of sufficiency of
facts alleged in the complaint constituting a cause of
action lies on whether or not the court, admitting the
facts alleged, could render a valid verdict in accordance
with the prayer of the complaint.
In this case, it was alleged in the complaint for revival of
judgment that the parties therein were also the parties
inthe action for partition. Applying the foregoing test of
hypothetically admitting this allegation in the
complaint, and not looking into the veracity of the
same, it would then appear that the complaint
sufficiently stated a cause of action as the plaintiffs in
the complaint for revival of judgment (hereinafter
respondents), as the prevailing parties in the action for
partition, had a right to seek enforcement of the
decision in the partition case.
It should be borne in mind that the action for revival of
judgment is a totally separate and distinct case from the
original Civil Case No. T-98 for Partition. As explained in
Saligumba v. Palanog,9 to wit:
An action for revival of judgment is no more than a
procedural means of securing the execution of a
previous judgment which has become dormant after
the passage of five years without it being executed
upon motion of the prevailing party. It isnot intended to
re-open any issue affecting the merits of the judgment
debtor's case nor the propriety or correctness of the
first judgment. An action for revival of judgment is a
new and independent action, different and distinct
fromeither the recovery of property case or the
reconstitution case [in this case, the original action for
partition], wherein the cause of action is the decision
itself and not the merits of the action upon which the
judgment sought to be enforced is rendered. x x x10
CIVIL PROCEDURE CASE DIGESTS - 1
With the foregoing in mind, it is understandable that
there would be instances where the parties in the
original case and in the subsequent action for revival of
judgment would not be exactly the same. The mere fact
that the names appearing as parties in the the
complaint for revival of judgment are different from the
names of the parties in the original case would not
necessarily mean that theyare not the real parties-in-
interest. What is important is that, as provided in
Section 1, Rule 3 of the Rules of Court, they are "the
party who stands to be benefited or injured by the
judgment in the suit, or the party entitled to the avails
of the suit." Definitely, as the prevailing parties in the
previous case for partition, the plaintiffs in the case for
revival of judgment would be benefited by the
enforcement of the decision in the partition case.
Y. G.R. No. L-66620 September 24, 1986
REMEDIO V. FLORES, petitioner, vs. HON. JUDGE
HEILIA S. MALLARE-PHILLIPPS, IGNACIO BINONGCAL &
FERNANDO CALION, respondents.
FACTS: Petitioner has appealed by certiorari from the
order of Judge Heilia S. Mallare-Phillipps of the Regional
Trial Court of Baguio City and Benguet Province which
dismissed his complaint for lack of jurisdiction.
Petitioner did not attach to his petition a copy of his
complaint in the erroneous belief that the entire
original record of the case shall be transmitted to this
Court pursuant to the second paragraph of Section 39 of
BP129.
However, the order appealed from states that the first
cause of action alleged in the complaint was against
respondent Ignacio Binongcal for refusing to pay the
amount of P11,643.00 representing cost of truck tires
which he purchased on credit from petitioner on various
occasions from August to October, 1981; and the
second cause of action was against respondent
Fernando Calion for allegedly refusing to pay the
amount of P10,212.00 representing cost of truck tires
which he purchased on credit from petitioner on several
occasions. Counsel for respondent Binongcal filed a
Motion to Dismiss on the ground of lack of jurisdiction
since the amount of the demand against said
respondent was only P11,643.00, and under Section
19(8) of BP129 the regional trial court shall exercise
exclusive original jurisdiction if the amount of the
demand is more than twenty thousand pesos
(P20,000.00).
It was further averred in said motion that although
another person, Fernando Calion, was allegedly
indebted to petitioner in the amount of P10,212.00, his
obligation was separate and distinct from that of the
other respondent. At the hearing of said Motion to
Dismiss, counsel for respondent Calion joined in moving
for the dismissal of the complaint on the ground of lack
of jurisdiction.
Petitioner maintains that the lower court has
jurisdiction over the case following the "novel" totality
Page 76 of 85

rule introduced in Section 33(l) of BP129 and Section 11
of the Interim Rules.
The pertinent portion of Section 33(l) of BP129 reads as
follows:
Provided, That where there are several claims or causes
of action between the same or different parties,
embodied in the same complaint, the amount of the
demand shall be the totality of the claims in all the
causes of action, irrespective of whether the causes of
action arose out of the same or different transactions.
Section 11 of the Interim Rules provides thus:
Application of the totality rule.-In actions where the
jurisdiction of the court is dependent on the amount
involved, the test of jurisdiction shall be the aggregate
sum of all the money demands, exclusive only of
interest and costs, irrespective of whether or not the
separate claims are owned by or due to different
parties. If any demand is for damages in a civil action,
the amount thereof must be specifically alleged.
Petitioner compares the above-quoted provisions with
the pertinent portion of the former rule under Section
88 of the Judiciary Act of 1948 as amended which reads
as follows:
Where there are several claims or causes of action
between the same parties embodied in the same
complaint, the amount of the demand shall be the
totality of the demand in all the causes of action,
irrespective of whether the causes of action arose out
of the same or different transactions; but where the
claims or causes of action joined in a single complaint
are separately owned by or due to different parties,
each separate claim shall furnish the jurisdictional test.
ISSUE: Whether the trial court correctly ruled on the
application joinder of the permissive joinder of the
parties
RULING: Yes. In cases of permissive joinder of parties,
whether as plaintiffs or as defendants, under Section 6
of Rule 3, the total of all the claims shall now furnish the
jurisdictional test. Needless to state also, if instead of
joining or being joined in one complaint separate
actions are filed by or against the parties, the amount
demanded in each complaint shall furnish the
jurisdictional test.
In the case at bar, the lower court correctly held that
the jurisdictional test is subject to the rules on joinder
of parties pursuant to Section 5 of Rule 2 and Section 6
of Rule 3 of the Rules of Court and that, after a careful
scrutiny of the complaint, it appears that there is a
misjoinder of parties for the reason that the claims
against respondents Binongcal and Calion are separate
and distinct and neither of which falls within its
jurisdiction.
There is no difference between the former and present
rules in cases where a plaintiff sues a defendant on two
or more separate causes of action. In such cases, the
CIVIL PROCEDURE CASE DIGESTS - 1
amount of the demand shall be the totality of the claims
in all the causes of action irrespective of whether the
causes of action arose out of the same or different
transactions. If the total demand exceeds twenty
thousand pesos, then the regional trial court has
jurisdiction. Needless to state, if the causes of action are
separate and independent, their joinder in one
complaint is permissive and not mandatory, and any
cause of action where the amount of the demand is
twenty thousand pesos or less may be the subject of a
separate complaint filed with a metropolitan or
municipal trial court.
On the other hand, there is a difference between the
former and present rules in cases where two or more
plaintiffs having separate causes of action against a
defendant join in a single complaint. Under the former
rule, "where the claims or causes of action joined in a
single complaint are separately owned by or due to
different parties, each separate claim shall furnish the
jurisdictional test"
The difference between the former and present rules in
cases of permissive joinder of parties may be illustrated
by the two cases which were cited in the case of Vda. de
Rosario vs. Justice of the Peace (supra) as exceptions to
the totality rule. In the case of Soriano y Cia vs. Jose (86
Phil. 523), where twenty-nine dismissed employees
joined in a complaint against the defendant to collect
their respective claims, each of which was within the
jurisdiction of the municipal court although the total
exceeded the jurisdictional amount, this Court held that
under the law then the municipal court had jurisdiction.
In said case, although the plaintiffs' demands were
separate, distinct and independent of one another, their
joint suit was authorized under Section 6 of Rule 3 and
each separate claim furnished the jurisdictional test. In
the case of International Colleges, Inc. vs. Argonza (90
Phil. 470), where twenty-five dismissed teachers jointly
sued the defendant for unpaid salaries, this Court also
held that the municipal court had jurisdiction because
the amount of each claim was within, although the total
exceeded, its jurisdiction and it was a case of permissive
joinder of parties plaintiff under Section 6 of Rule 3.
Z. G.R. No. 156117 May 26, 2005
REPUBLIC OF THE PHILIPPINES, petitioner, vs.
JEREMIAS AND DAVID HERBIETO, respondents
FACTS: Respondents in the present Petition are the
Herbieto brothers, Jeremias and David, who filed with
the MTC, on 23 September 1998, a single application for
registration of two parcels of land, Lots No. 8422 and
8423, located in Cabangahan, Consolacion, Cebu
(Subject Lots). They claimed to be owners in fee simple
of the Subject Lots, which they purchased from their
parents, spouses Gregorio Herbieto and Isabel Owatan,
on 25 June 1976.3 Together with their application for
registration. The petitioner Republic of the Philippines
(Republic) filed an Opposition to the respondents'
application for registration of the Subject Lots arguing
that: (1) Respondents failed to comply with the period
Page 77 of 85

of adverse possession of the Subject Lots required by
law; (2) Respondents' muniments of title were not
genuine and did not constitute competent and sufficient
evidence of bona fide acquisition of the Subject Lots;
and (3) The Subject Lots were part of the public domain
belonging to the Republic and were not subject to
private appropriation. , the MTC promulgated its
Judgment ordering the registration and confirmation of
the title of respondent Jeremias over Lot No. 8422 and
of respondent David over Lot No. 8423.
ISSUE: Whether the MTC has jurisdiction to proceed and
hear the application for registration filed by respondent
RULING: No. Court finds that the MTC had no
jurisdiction to proceed with and hear the application for
registration filed by the respondents but for reasons
different from those presented by petitioner Republic.
The Property Registration Decree23 recognizes and
expressly allows the following situations: (1) the filing of
a single application by several applicants for as long as
they are co-owners of the parcel of land sought to be
registered;24and (2) the filing of a single application for
registration of several parcels of land provided that the
same are located within the same province.25 The
Property Registration Decree is silent, however, as to
the present situation wherein two applicants filed a
single application for two parcels of land, but are
seeking the separate and individual registration of the
parcels of land in their respective names.
Since the Property Registration Decree failed to provide
for such a situation, then this Court refers to the Rules
of Court to determine the proper course of action.
Section 34 of the Property Registration Decree itself
provides that, "[t]he Rules of Court shall, insofar as not
inconsistent with the provisions of this Decree, be
applicable to land registration and cadastral cases by
analogy or in a suppletory character and whenever
practicable and convenient."
Considering every application for land registration filed
in strict accordance with the Property Registration
Decree as a single cause of action, then the defect in the
joint application for registration filed by the
respondents with the MTC constitutes a misjoinder of
causes of action and parties. Instead of a single or joint
application for registration, respondents Jeremias and
David, more appropriately, should have filed separate
applications for registration of Lots No. 8422 and 8423,
respectively.
Misjoinder of causes of action and parties do not
involve a question of jurisdiction of the court to hear
and proceed with the case.26 They are not even
accepted grounds for dismissal thereof.27 Instead, under
the Rules of Court, the misjoinder of causes of action
and parties involve an implied admission of the court's
jurisdiction. It acknowledges the power of the court,
acting upon the motion of a party to the case or on its
own initiative, to order the severance of the misjoined
CIVIL PROCEDURE CASE DIGESTS - 1
cause of action, to be proceeded with separately (in
case of misjoinder of causes of action); and/or the
dropping of a party and the severance of any claim
against said misjoined party, also to be proceeded with
separately (in case of misjoinder of parties).
The misjoinder of causes of action and parties in the
present Petition may have been corrected by the MTC
motu propio or on motion of the petitioner Republic. It
is regrettable, however, that the MTC failed to detect
the misjoinder when the application for registration was
still pending before it; and more regrettable that the
petitioner Republic did not call the attention of the MTC
to the fact by filing a motion for severance of the causes
of action and parties, raising the issue of misjoinder only
before this Court.
AA. G.R. No. L-40098 August 29, 1975
ANTONIO LIM TANHU, DY OCHAY, ALFONSO
LEONARDO NG SUA and CO OYO, petitioners, vs.
HON. JOSE R. RAMOLETE as Presiding Judge, Branch III,
CFI, Cebu and TAN PUT, respondents.
(TAAS KAYO NGA CASE)
FACTS: The case was elevated to the SC by way of
petition for certiorari to annul and set aside certain
actuations of the CFI; specifically, its granting of the
motion to drop the two non-defaulted defendants and
proceeding to hear to hear the rest of Tan Put’s
(plaintiff’s) evidence ex-parte, and subsequently
rendering judgment by default against the defaulted
defendants.
Tee Hoon Lim Po Chuan, Alfonso Ng Sua and Antonio
Lim Tanhu were partners in the commercial partnership
of Glory Commercial Company with Tee Hoon as the
manager. When Tee Hoon died, Tan Put, claiming to be
the widow, filed a complaint against spouses Antonio
Lim Tanhu and Dy Ochay. Later, the complaint included
Lim Tanhu’s son Lim Teck Chuan, as well as the spouses
Alfonso Ng Sua and Co Oyo, and their son Eng Chong
Leonardo. Tan Put claims in her complaint that after Tee
Hoon died, there was no liquidation of the company
assets made and that she owns one third of the
company shares. However, Lim Tanhu, Ng Sua, Lim Teck
Chuan, and Eng Chong Leonardo continued to manage
the company and used the company funds to acquire
lands and buildings in several areas. Allegedly, the
defendants also used the company assets to organize
another corporation known as Glory Commercial, Inc.
Subsequently, Tan Put amended her complaint and
added other averments. According to Tan Put, she had
asked the defendants to liquidate the business of the
defunct partnership including real estate investments in
Hong Kong. The defendants did not make good in their
promise to liquidate the said properties, and instead,
induced her to execute a quitclaim of all her rights and
interests in the same. After the quitclaim was executed,
Lim Tanhu allegedly offered to pay her P65,000 and
issued a receipt to her bearing the said amount. She
signed the receipt but was not given a copy of it and
Page 78 of 85

had not received the said money. When she eventually
made a formal demand for the accounting and
liquidation of the partnership company’s assets, the
defendants refused and stated that they will not give
her share.
Lim Tanhu, et. al.: The amended complaint (2nd
paragraph) should not be admitted as there were
material modifications of the causes of action previously
alleged.
CFI: The judge allowed the amendment and said that
the present action is for accounting of real and personal
properties as well as for the recovery of the same with
damages. The amended complaint only alleged facts
that merely amplified the material averments
constituting the cause of action in the original
complaint. It likewise include necessary and
indispensable defendants without whom no final
determination can be had in the action and in order that
complete relief is to be accorded as between those
already parties. Thus, the amendments were allowed
because they did not change the main causes of action
in the original complaint.
---Trial continued
The defendants filed a single answer with counterclaim.
They assert that Tan Put was not Tee Hoon’s legitimate
wife as the real Mrs. Tee Hoon, Ang Siok Tin, is in Hong
Kong. They also denied the allegations of fraud and
claimed that proper liquidation had been regularly
made of the business of the partnership and Tee Hoon
regularly received his share until his death. After which,
the partnership was dissolved and his supposed share
were all given to Ang Siok and their children.
Lim Tanhu, et.al.: (By way of COUNTERCLAIM) The case
should be dismissed since Tan Put is not the legitimate
wife, and thus, lacks the legal capacity to sue them.
Further, even before the death of Tee Hoon, Tan Put
was no longer the decedent’s common law wife and the
‘quitclaim’ was only offered to her by Lim Tanhu out of
the latter’s kindness and generosity. Thus, in the event
that Tan Put is filing the case under Art. 144 of the Civil
Code (this part was already removed in the present Civil
Code and was replaced by the Family Code), then, her
acceptance of the ‘quitclaim’ constitutes a waiver for
her claims.
The newly acquired properties of the defendants were
bought out of their own personal funds and not from
the funds belonging to the partnership. Further, since
Tee Hoon and Tan Put did not have a child together,
there was no one who is lawfully entitled to succeed to
the properties left by Tee Hoon together with the
widow and the legitimate children.
Tan Put: The said counterclaim should be dismissed as it
is merely permissive and the corresponding filing fee
was not paid.
CIVIL PROCEDURE CASE DIGESTS - 1
CFI: (Ruling on the motion of Tan Put to dismiss the
counterclaim of the defendants) Overruled. The
counterclaim was accepted by the court and declared to
be a compulsory counterclaim.
Tan Put: Denied all the allegations in the defendants
counterclaim.
--- However, on the date set for the pre-trial, the
spouses Lim Tanhus and Ng Suas did not appear, it
being their belief that they were all compulsory parties
and that the defense of one is the defense of all of
them. Thus, they were all “declared in DEFAULT”. The
said spouses tried to lift the order thru a motion for
reconsideration, but the court denied such. During the
trial, while her allegedly adopted son Antonio Nuñez
was testifying and was up for re-cross-examination, Tan
Put suddenly filed a motion to drop Lim Teck Chuan and
Eng Chong Leonardo as defendants to the case without
justifications, which was granted by the court.
CFI: With the granting of the motion to drop Lim Teck
Chuan and Eng Chong Leonardo as defendants, the case
against the two was dismissed upon order. However,
since the spouses Lim Tanhus and Ng Suas were
declared to be in default for their non-appearance in
the pretrial, they remain to be defendants in the
complaint. Aside from giving the said order, the court
proceeded to hear ex-parte the rest of Tan Put’s
evidence.
--- The dropped defendants separately filed a motion
for reconsideration over the said orders of the RTC, but
were all denied. However, the denial of their motions
was received after the RTC’s judgment was
promulgated.
Thus, all the defendants filed a motion to quash the
order dropping the 2 defendants, but was later declared
to be abandoned by the defendants. Hence this present
petition for certiorari to annul the decision and
actuations of the CFI.
Lim Tanhu, et.al. : There was a compulsory counterclaim
in the common answer of the defendants and it is the
nature of such that it cannot be decided in an
independent action. Under Sec.4 Rule 18, the CFI has no
authority to divide the case before it by dismissing the
case against the non-defaulted defendants, and
thereafter proceeded to hear the case ex-parte and
subsequently rendering judgment against the defaulted
defendants. Further, under the said rule, when a
common cause of action is alleged against several
defendants, the default of any of them is a mere
formality by which those defaulted are not allowed to
take part in the proceedings. But otherwise, all the
defendants, defaulted and not defaulted, are supposed
to have but a common fate, win or lose. Thus, there
shall only be one common judgment for or against all
the defendants, whether defaulted or non-defaulted.
Following such argument, either the CFI dismiss the
case against all the defendants or resume the
proceedings and allow the non-defendants to defend
the case for all the defendants.
Page 79 of 85

Tan Put: The spouses Lim Tanhu and the spouses Ng
Suas were properly declared in default. Thus, they have
no personality or interest to question the dismissal of
the case as against their non-defaulted co-defendants
and should suffer the consequences of their own
default.
ISSUE: Whether or not, by virtue of the nature of the
counterclaim of the defendants, either the dismissal of
the complaint be applied to all the defendants or the
proceedings be resumed and the non-defaulted
defendants be allowed to present defense on behalf of
all of them.
RULING: Yes. The defendants’ counterclaim is a
compulsory one because the same evidence to sustain it
will also refute the cause or causes of action alleged in
plaintiff's complaint. Moreover, it is compulsory
because it is obvious that the same cannot "remain
pending for independent adjudication by the court."
Further, under the rules, "(i)f a counterclaim has been
pleaded by a defendant prior to the service upon him of
the plaintiff's motion to dismiss, the action shall not be
dismissed against the defendant's objection unless the
counterclaim can remain pending for independent
adjudication by the court." In the instant case, it was
evident that the judgment against the defaulted
defendants was rendered before the non-defaulted
defendants’ motion for reconsideration of the order
dropping them as defendants in the case was received
by them.
It should be noted that when Tan Put earlier questioned
the defendants’ counterclaim, the CFI ruled that the
same was permissive, and yet, contrary to the nature of
compulsory counterclaim, it granted the dropping of the
non-defaulted defendants and proceeded in hearing
Tan Put’s evidence ex-parte.
Moreover, it is clear that all the defendants are
indispensable parties and under the rules of court and
according to jurisprudence, “when an indispensable
party is not before the court (that) the action should be
dismissed."
Additionally, the order dropping the non-defaulted
defendants “was not predicated on Section 2 of Rule 17
but more on Section 11 of Rule 3. But the truth is that
nothing can be more incorrect.” To start with, the latter
rule does not comprehend whimsical and irrational
dropping or adding of parties in a complaint. What it
really contemplates is erroneous or mistaken non-
joinder and misjoinder of parties. No one is free to join
anybody in a complaint in court only to drop him
unceremoniously later at the pleasure of the plaintiff.
The rule presupposes that the original inclusion had
been made in the honest conviction that it was proper
and the subsequent dropping is requested because it
has turned out that such inclusion was a mistake. And
this is the reason why the rule ordains that the dropping
CIVIL PROCEDURE CASE DIGESTS - 1
be "on such terms as are just" — just to all the other
parties.
In the case at bar, there is nothing in the record to
legally justify the dropping of the non-defaulted
defendants, Lim and Leonardo. Even Tan Put’s motion
dropping them as defendants did not provide any
justification. From all appearances, Tan Put just decided
to ask for it, without any relevant explanation at all.
Usually, the court in granting such a motion inquires for
the reasons and in the appropriate instances directs the
granting of some form of compensation for the trouble
undergone by the defendant in answering the
complaint, preparing for or proceeding partially to trial,
hiring counsel and making corresponding expenses in
the premises. Nothing of these, appears in the order in
question. Most importantly, the judge ought to have
considered that the outright dropping of the non-
defaulted defendants Lim and Leonardo, over their
objection at that, would certainly be unjust not only to
the petitioners, their own parents, who would in
consequence be entirely defenseless, but also to Lim
and Leonardo themselves who would naturally
correspondingly suffer from the eventual judgment
against their parents. Respondent court paid no heed at
all to the mandate that such dropping must be on such
terms as are just" — meaning to all concerned with its
legal and factual effects.
Thus, it is quite plain that respondent court erred in
issuing its order of dismissal of the order dropping the
non-defaulted defendants in the complaint as well as its
order denying reconsideration of such dismissal. Though
Lim and Leonardo are not parties to the herein petition,
such consideration is inconsequential. The fate of the
case of petitioners is inseparably tied up with said order
of dismissal, if only because the order of ex-parte
hearing of the case which directly affects and prejudices
said petitioners is predicated thereon.
Hence, PETITION GRANTED. All proceedings held by the
respondent CFI particularly the ex-parte proceedings
against the defendants are annulled and set aside.
Further, “[r]espodent court is hereby ordered to enter
an order extending the effects of its order of dismissal
of the action dated October 21, 1974 to herein
petitioners Antonio Lim Tanhu, Dy Ochay, Alfonso
Leonardo Ng Sua and Co Oyo. And respondent court is
hereby permanently enjoined from taking any further
action in said civil case gave and except as herein
indicated.”
BB. G.R. No. 196750
MA. ELENA R. DIVINAGRACIA, as Administratrix of the
ESTATE OF THE LATE SANTIAGO C. DIVINAGRACIA,
Petitioner, vs. CORONACION PARILLA, CELESTIAL
NOBLEZA, CECILIA LELINA, CELEDONIO NOBLEZA,
MAUDE NOBLEZA, Respondents.
FACTS: Conrado Nobleza, Sr. (Conrado, Sr.) owned a
313-square meter parcel of land located at Cor.
Fuentes-Delgado Streets, Iloilo City denominated as Lot
Page 80 of 85

133-B-1-A and covered by Transfer Certificate of Title
(TCT) No. T- 12255 (subject land).6 During his lifetime,
he contracted two marriages: (a) the first was with
Lolita Palermo with whom he had two (2) childrenand
(b) the second was with Eusela Niangar with whom he
had seven (7) children.
According to Santiago, upon Conrado, Sr.’s death,
Cresencio, Conrado, Jr., Felcon (in representation of his
father, Mateo, Sr., and his siblings), Coronacion,
Celestial, Cecilia, Rogelio, Eduardo, and Ricardo sold
their respective interests over the subject land to
Santiago for a consideration of 447,695.66, as
embodied in a Deed of Extrajudicial Settlement or
Adjudication with Deed of Sale10 dated November 22,
1989 (subject document),11 which was, however, not
signed by the other heirs who did not sell their
respective shares, namely, Ceruleo, Celedonio, and
Maude (in representation of his husband, Cebeleo, Sr.,
and their children).12 On December 22, 1989, the same
parties executed a Supplemental Contract13 whereby
the vendors-heirs and Santiago agreed that out of the
aforesaid consideration, only 109,807.93 will be paid up
front, and that Santiago will only pay the remaining
balance of 337,887.73 upon the partition of the subject
land.14 However, Santiago was not able to have TCT No.
T-12255 cancelled and the subject document registered
because of Ceruleo, Celedonio, and Maude’s refusal to
surrender the said title. This fact, coupled with Ceruleo,
Celedonio, and Maude’s failure to partition the subject
land, prompted Santiago to file a Complaint15 dated
January 3, 1990 for judicial partition and for
receivership.16
For their part, Ceruleo, Celedonio, and Maude(Heirs of
second wife) maintained that Santiago had no legal
right to file an action for judicial partition nor compel
them to surrender TCT No. T-12255 because, inter alia:
(a) Santiago did not pay the full purchase price of the
shares sold to him; and (b) the subject land is a conjugal
asset of Conrado Sr. and Eusela Niangar and, thus, only
their legitimate issues may validly inherit the same.17
ISSUE: Whether or not CA correctly ruled that Felcon’s
siblings and Cebeleo, Sr. and Maude’s children are
indispensable parties to Santiago’s complaint for judicial
partition
RULING: YES. An indispensable party is one whose
interest will be affected by the court’s action in the
litigation, and without whom no final determination of
the case can be had. The party’s interest in the subject
matter of the suit and in the relief sought are so
inextricably intertwined with the other parties’ that his
legal presence as a party to the proceeding is an
absolute necessity. In his absence, there cannot be a
resolution of the dispute of the parties before the court
which is effective, complete, or equitable.30 Thus, the
absence of an indispensable party renders all
subsequent actions of the court null and void, for want
of authority to act, not only as to the absent parties but
even as to those present.31
CIVIL PROCEDURE CASE DIGESTS - 1
With regard to actions for partition, Section 1, Rule 69
of the Rules of Court requires that all persons interested
in the property shall be joined as defendants, viz.:
SEC. 1. Complaint in action for partition of real estate. –
A person having the right to compel the partition of real
estate may do so as provided in this Rule, setting forth
in his complaint the nature and extent of his title and an
adequate description of the real estate of which
partition is demanded and joining as defendants all
other persons interested in the property.
Thus, all the co-heirs and persons having an interest in
the property are indispensable parties; as such, an
action for partition will not lie without the joinder of the
said parties.32
In the instant case, records reveal that Conrado, Sr. has
the following heirs, legitimate and illegitimate, who are
entitled to a pro-indiviso share in the subject land,
namely: Conrado, Jr., Cresencio, Mateo, Sr., Coronacion,
Cecilia, Celestial, Celedonio, Ceruleo, Cebeleo, Sr.,
Eduardo, Rogelio, and Ricardo. However, both Mateo,
Sr. and Cebeleo, Sr. pre-deceased Conrado, Sr. and,
thus, pursuant to the rules on representation under the
Civil Code,33 their respective interests shall be
represented by their children, namely: (a) for Mateo,
Sr.: Felcon, Landelin, Eusela, Giovanni, Mateo, Jr., Tito,
and Gaylord; and (b) for Cebeleo, Sr.: Cebeleo, Jr. and
Neobel.34
The aforementioned heirs – whether in their own
capacity or in representation of their direct ascendant –
have vested rights over the subject land and, as such,
should be impleaded as indispensable parties in an
action for partition thereof. However, a reading of
Santiago’s complaint shows that as regards Mateo, Sr.’s
interest, only Felcon was impleaded, excluding
therefrom his siblings and co-representatives. Similarly,
with regard to Cebeleo, Sr.’s interest over the subject
land, the complaint impleaded his wife, Maude, when
pursuant to Article 97235 of the Civil Code, the proper
representatives to his interest should have been his
children, Cebeleo, Jr. and Neobel. Verily, Santiago’s
omission of the aforesaid heirs renders his complaint for
partition defective.
CC. G.R. No. 121171 December 29, 1998
ASSET PRIVATIZATION TRUST, petitioner, vs. COURT OF
APPEALS, JESUS S. CABARRUS, SR., JESUS S.
CABARRUS, JR., JAIME T. CABARRUS, JOSE MIGUEL
CABARRUS, ALEJANDRO S. PASTOR, JR., ANTONIO U.
MIRANDA, and MIGUEL M. ANTONIO, as Minority
Stock-Holders of Marinduque Mining and Industrial
Corporation, respondents.
FACTS: The development, exploration and utilization of
the mineral deposits in the Surigao Mineral Reservation
have been authorized by the Republic Act No. 1528, as
amended by Republic Act No. 2077 and Republic Act No.
4167, by virtue of which laws, a memorandum of
agreement was drawn on July 3, 1968, whereby the
Republic of the Philippines thru the Surigao Mineral
Page 81 of 85

Reservation Board, granted MMIC the exclusive right to
explore, develop and exploit nickel, cobalt, and other
minerals in the Surigao Mineral Reservation. MMIC is a
domestic corporation engaged in mining with
respondent Jesus S. Cabarrus Sr. as president and
among its original stockholders. The Philippine
government undertook to support the financing of
MMIC by purchase of MMIC debenture bonds and
extension of guarantees.
Further, from the DBP and/or the government financing
institutions to subscribe in MMIC and issue guarantee/s
of foreign loans or deferred payment arrangements
secured from the US Eximbank, Asian Development
Bank (ADB), Kobe steel of amount not exceeding
US$100 million. On July 13, 1981, MMIC, PNB, and DBP
executed a mortgage trust agreement whereby MMIC
as mortgagor, agreed to constitute a mortgage in favor
of PNB and DBP as mortgages, over all MMIC assets;
subject of real estate and chattel mortgage executed by
the mortgagor, and additional assets described and
identified, including assets of whatever kind, nature or
description, which the mortgagor may acquire whether
in substitution of, in replenishment or in addition
thereto. Due to the unsettled obligations, a financial
restructuring plan (FRP) was suggested, however not
finalized. The obligations matured and the mortgage
was foreclosed. The foreclosed assets were sold to PNB
as the lone bidder and were assigned to the newly
formed corporations namely Nonoc Mining
Corporation, Maricalum Mining and Industrial
Corporation and Island Cement Corporation. In 1986,
these assets were transferred to the asset privatization
trust. On February 28, 1985, Jesus S. Cabarrus Sr.
together with the other stockholders of MMIC, filed a
derivative suit against DBP and PNB before the RTC of
Makati branch 62, for annulment of foreclosures,
specific performance and damages. The suit docketed
as civil case no. 9900, prayed that the court: 1.) Annul
the foreclosures, restore the foreclosed assets to MMIC,
and require the banks to account for their use and
operation in the interim; 2.) Direct the banks to honor
and perform their commitments under the alleged FRP;
3.) Pay moral and exemplary damages, attorney’s fees,
litigation expenses and costs. A compromise and
arbitration agreement was entered by the parties to
which committee awarded damages in favor of
Cabarrus.
ISSUES:
1. Whether the court of appeals erred in not holding
that the makati regional trial court, branch 62 which has
previously dismissed civil case no. 9900 had lost
jurisdiction to confirm the arbitral award under the
same civil case and not ruling that the application for
confirmation should have been filed as a new case to be
raffled off among the different branches of the rtc.
2. Whether the court of appeals likewise erred in
holding that petitioner was estopped from questioning
the arbitration award, when petitioner questioned the
jurisdiction of the rtc-makati, branch 62 and at the same
time moved to vacate the arbitral award.
CIVIL PROCEDURE CASE DIGESTS - 1
RULING:
1. The RTC of Makati, Branch 62, did not have
jurisdiction to confirm the arbitral award.
The use of the term "dismissed" is not "a mere semantic
imperfection". The dispositive portion of the Order of
the trial court dated October 14, 1992 stated in no
uncertain terms:
4. The Complaint is hereby DISMISSED.
The term "dismiss" has a precise definition in law. "To
dispose of an action, suit, or motion without trial on the
issues involved. Conclude, discontinue, terminate,
quash."
Admittedly, the correct procedure was for the parties to
go back to the court where the case was pending to
have the award confirmed by said court. However,
Branch 62 made the fatal mistake of issuing a final
order dismissing the case. While Branch 62 should have
merely suspended the case and not dismissed it, neither
of the parties questioned said dismissal. Thus, both
parties as well as said court are bound by such error.
It is erroneous then to argue, as private respondents do,
that petitioner APT was charged with the knowledge
that the "case was merely stayed until arbitration
finished," as again, the order of Branch 62 in very clear
terms stated that the "complaint was dismissed." By its
own action, Branch 62 had lost jurisdiction over the
case. It could not have validly reacquired jurisdiction
over the said case on mere motion of one of the parties.
The Rules of Court is specific on how a new case may be
initiated and such is not done by mere motion in a
particular branch of the RTC. Consequently, as there
was no "pending action" to speak of, the petition to
confirm the arbitral award should have been filed as a
new case and raffled accordingly to one of the branches
of the Regional Trial Court.
2. Petitioner was not estopped from questioning the
jurisdiction of Branch 62 of the RTC of Makati.
The Court of Appeals ruled that APT was already
estopped to question the jurisdiction of the RTC to
confirm the arbitral award because it sought affirmative
relief in said court by asking that the arbitral award be
vacated.
The rule is that "Where the court itself clearly has no
jurisdiction over the subject matter or the nature of the
action, the invocation of this defense may be done at
any time. It is neither for the courts nor for the parties
to violate or disregard that rule, let alone to confer that
jurisdiction this matter being legislative in character." 25
As a rule then, neither waiver nor estoppel shall apply
to confer jurisdiction upon a courtbarring highly
meritorious and exceptional circumstances. 26 One such
exception was enunciated in Tijam vs. Sibonghanoy, 27
where it was held that "after voluntarily submitting a
cause and encountering an adverse decision on the
merits, it is too late for the loser to question the
jurisdiction or power of the court."
Page 82 of 85

Petitioner's situation is different because from the
outset, it has consistently held the position that the
RTC, Branch 62 had no jurisdiction to confirm the
arbitral award; consequently, it cannot be said that it
was estopped from questioning the RTC's jurisdiction.
Petitioner's prayer for the setting aside of the arbitral
award was not inconsistent with its disavowal of the
court's jurisdiction.
DD. G.R. No. L-46843 October 18, 1988
VIRGILIA CABRESOS, WELDELINO CABRESOS, RUBYLIN
CABRESOS, LUZVIMINDA CABRESOS, MARILOU
CABRESOS, ROQUELITO CABRESOS and SYLVIA LUNA
CABRESOS, petitioners, vs. MEYNARDO A. TIRO in his
capacity as Presiding Judge of Branch VIII Court of First
Instance of Misamis Oriental, DAMASO B. DAHINO in
his capacity as Provincial Deputy Sheriff of Misamis
Oriental, RAMON QUIZ and GENEROSA ENRIQUEZ,
respondents.
FACTS: On September 17, 1968, the private respondents
filed against spouses Galicano and Florentina Cabresos a
case for recovery of ownership and possession of a
portion of a residential—commercial parcel of land
situated in the Poblacion of Balingoan Misamis Oriental.
They alleged that since February 24, 1961, the spouses
Cabresos have illegally occupied the premises in
question and have refused to vacate it despite repeated
demands to do so. The piece of land under litigation is
the southern portion of a parcel of residential-
commercial land owned by the private respondents.
The private respondents averred that they are the real
owners and actual possessors of the lot in dispute. As an
affirmative defense, they alleged prescription.
After trial on the merits, the Court of First Instance of
Misamis Oriental, 15th Judicial District, Branch VIII
through then District Judge Bernardo Teves rendered
judgment in favor of the private respondents. On June
26, 1976, the private respondents filed a motion for
execution. Consequently, on July 1, 1976, Judge Teves
issued a writ of execution. On September 7, 1977, this
petition was filed praying for a restraining order on the
allegations that the respondent judge had threatened to
issue the writ of demolition on September 12, 1977
despite the variance in the decision and the writ of
execution and that the respondent sheriff notified the
petitioners of his intention to demolish their house on
the same date. In support of their claim, the petitioners
invoke section 17, Rule 39 of the Revised Rules of Court
which partly provides that:
SEC. 17. Proceedings where property claimed by third
person.—If property levied on be claimed by any other
person than the judgment debtor or his agent, and such
person make an affidavit of his title thereto or right to
the possession thereof, stating the grounds of such right
or title, and serve the same upon the officer making the
levy, and a copy thereof upon the judgment creditor,
the officer shall not be bound to keep the property,
unless such judgment creditor or his agent, on demand
of the officer, indemnify the officer against such claim
by a bond in a sum not greater than the value of the
CIVIL PROCEDURE CASE DIGESTS - 1
property levied on. In case of disagreement as to such
value, the same shall be determined by the court issuing
the writ of execution.
The officer is not liable for damages, for the taking or
keeping of the property, to any third-party claimant
unless a claim is made by the latter and unless an action
for damages is brought by him against the officer within
one hundred twenty (1 20) days from the date of the
filing of the bond. But nothing herein contained shall
prevent such claimant or any third person from
vindicating his claim to the property by any proper
action. (Rule 39, Sec. 17)
ISSUE: Whether petitioners are considered third party
within the definition of the said rule
RULING: YES. It is important to determine whether the
above rule applies to the petitioners. The key word in
the said rule is "third party." By "third party" is meant a
person who is not a party to the action under
consideration. We agree with the private respondents
that the petitioners are privies to the case for recovery
of ownership and possession filed by the former against
the latter's predecessors-in-interest, the latter being the
daughter-in-law and grandchildren of the losing party in
Civil Case No. 3150. By the term "privies" is meant those
between whom an action is deemed binding although
they are not literally parties to the said action. There is
no doubt that the assailed decision is binding on the
petitioners. The house they constructed while the case
was pending started out only as a "camarin" which was
converted into a house.
With respect to the contention of the petitioners that
there exists a variance between the dispositive portion
of the questioned decision and the writ of execution
subject of this petition, the said contention is
untenable. The order to vacate the litigated premises
extends to those considered as privies to the action for
recovery of ownership and possession. The fact that the
petitioners' house is not strictly speaking the same
structure referred to in the dispositive portion of the
said civil action does not bring them outside the ambit
of the order to vacate. What the rule prohibits is for the
writ of execution to be different from or to exceed the
terms of the judgment. (see Rule 39, Section 8, Revised
Rules of Court; Mutual Security Insurance Corporation v.
Court of Appeals 153 SCRA 678; Villoria v. Piccio, 95 Phil.
802).
The judgment in Civil Case No. 3150 accords recovery of
ownership and possession to the private respondents.
There can be no recovery if the ejected tenants keep on
building a new house alongside the old one everytime
they sense a judgment against them. Notwithstanding
the inclusion of the second house in the writ of
execution issued to enforce it, that judgment remains
unaltered or unmodified considering that the alleged
owners of said house are the successors-in-interest of
the petitioners.
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EE. G.R. No. 138343 February 19, 2001
GILDA C. LIM, WILHELMINA V. JOVEN and DITAS A.
LERIOS, petitioners, vs. PATRICIA LIM-YU, in her
capacity as a minority stockholder of LIMPAN
INVESTMENT CORPORATION,respondent.
FACTS: The Board of Directors of Limpan Corporation
issued a resolution authorizing the partial payment for
the legal services rendered by petitioner Lim to be in
form of shares of stock there being no available funds to
pay the same. As a result, the unsubscribed shares of
LIMPAN were issued and all of its authorized capital
stock became fully subscribed with petitioner Lim
ending up controlling 62.5% of the shares. Respondent
Yu filed a complaint against the members who approved
the resolution. Petitioners moved to dismiss alleging Yu
had no legal capacity to sue on the basis of a TRO issued
by the SC on her guardianship case and thus
incapacitated from filing a derivative suit. The SEC
Hearing Officer held in abeyance the motion but the SEC
En Banc ordered the case to proceed. CA affirmed the
SEC En Banc.
ISSUE: Whether the Honorable Court of Appeals erred in
sustaining the respondent's legal capacity to sue the
petitioners by relying solely on the first half of this
Honorable Court's TRO and without considering the
second half of said TRO
RULING: Petitioners point out that both the SEC and the
Court of Appeals considered only the first part of the
Supreme Court TRO and completely ignored the second
part. Supposedly, the latter part barred respondent
from entering into agreements that would affect her
family and the corporation. Hence, they claim that the
TRO, taken as a whole, proscribed respondent's
"derivative suit," which sought to "enjoin herein
[P]etitioner Gilda C. Lim from further voting or
exercising any and all rights arising from the issuance to
her of 15,515 shares of stock of the corporation.”
We do not agree. The pertinent portion of the TRO
issued by this Court reads as follows:
"(b) to ISSUE the TEMPORARY RESTRAINING ORDER
prayed for, limited however, to the 'Writ of Preliminary
Injunction' dated 22 August 1994 and the Order dated
14 July 1994 both issued in SP Proceeding No. 94-71010
which in the opinion of the Court are all too
encompassing and should be limited in scope and
subject to the conditions set forth in the Resolution of
September 28, 1994 that, '(D)uring the effectivity of the
Temporary Restraining Order, petitioner Patricia C. Lim,
her attorneys, representatives, agents and any other
persons assisting petitioner Patricia C. Lim will be able
to act, enter into or sign contracts or documents solely
for and on behalf of Patricia C. Lim; said actions,
contracts or documents should not in any way bind or
affect the interests of her parents, Isabelo P. Lim and
Purificacion C. Lim, her brothers and sisters and any
family owned or controlled corporation in particular,
the Limpan Investment Corporation."
CIVIL PROCEDURE CASE DIGESTS - 1
Simply put, the TRO allows Respondent Patricia Lim-Yu
to act for herself and to enter into any contract on her
own behalf. However, she cannot transact in
representation of or for the benefit of her parents,
brothers or sisters, or the Limpan Investment
Corporation. Contrary to what petitioners suggest, all
that is prohibited is any action that will bind them. In
short, she can act only on and in her own behalf, not
that of petitioners or the Corporation.
There appears to be a confusion on the nature of the
suit initiated before the SEC. Petitioners describe it as a
derivative suit, which has been defined as "an action
brought by minority shareholders in the name of the
corporation to redress wrongs committed against it, for
which the directors refuse to sue. It is a remedy
designed by equity and has been the principal defense
of the minority shareholders against abuses by the
majority."10 In a derivative action, the real party in
interest is the corporation itself, I not the shareholder(s)
who actually instituted it.
"If the suit filed by respondent was indeed derivative in
character, then respondent may not have the capacity
to sue. The reason is that she would be acting in
representation of the corporation, an act which the TRO
enjoins her from doing.
We hold, however, that the suit of respondent cannot
be characterized as derivative, because she was
complaining only of the violation of her preemptive
right under Section 39 of the Corporation Code.11 She
was merely praying that she be allowed to subscribe to
the additional issuances of stocks in proportion to her
shareholdings to enable her to preserve her percentage
of ownership in the corporation. She was therefore not
acting for the benefit of the corporation. Quite the
contrary, she was suing on her own behalf, out of a
desire to protect and preserve her preemptive rights.
Unquestionably, the TRO did not prevent her from
pursuing that action.
To repeat, the TRO issued by this Court had two
components: (1) it allowed respondent to enter into
agreements on her own behalf; and (2) it clarified that
respondent's acts could not bind or affect the interests
of her parents, brothers or sisters, or Limpan. In other
words, respondent was, as a rule, allowed to act; but, as
an exception, was prohibited from doing anything that
would bind the corporation or any of the above-named
persons.
In this light, the TRO did not prohibit respondent from
filing, on and in her own behalf; a suit for the alleged
violation of her preemptive rights to purchase
additional stock subscriptions. In other words, it did not
restrain respondent from acting and enforcing her own
rights. It merely barred her from acting in
representation of the corporation.
Petitioners fail to appreciate the distinction between
the act itself and its net result. The act of filing the suit
Page 84 of 85
 CIVIL PROCEDURE CASE DIGESTS - 1
did not in any way bind the corporation. The result of
such act affected it, however. Similarly, respondent can
sell her shares to the corporation or make a will and
designate her parents, for example, as beneficiaries. It
would be quite far-fetched to say that these acts are
prohibited by the TRO, even if they will definitely affect
the corporation and her parents.

Section 2 of Rule 3 of the Rules of Court12 defines a real

party in interest - as one who is entitled to the avails of
any judgment rendered in a suit, or who stands to be
benefited or injured by it. In the present case, it is clear
that respondent was suing on her own behalf in order
to enforce her preemptive rights. Nothing, not the TRO,
barred her from filing that suit.

Page 85 of 85