30 Philcrop v CA PROCEDURAL:
GR NO. 136109  The case is a special civil action for certiorari, which seeks the nullification
AUGUST 1, 2002
By: JULIUS GUZMAN
Topic: Ordinary Civil Action
Petitioners: Philippine Crop Insurance Corporation
Respondents: COURT OF APPEALS, HON. JUDGE ELMO N. ALAMEDA, RENATO S.
ALLAS, LYDIA H. ALMERON, WILLIE U. ANTALAN, RAMON P. AQUINO, NESTOR M. DE
ROMA, ROBERTO T. FERI, OSMUNDO M. GUMASING, ROSA P. CALUBAQUIB, TELITA
C. BARASI, PATROCINIA D. HERRERO, CHARITO A. MALLILLIN, TERESITA A.
CARANGUIAN, DELFIN B. CRUZ, ROMEO P. MAPAGU, ESTRELLA MAY K. MIGUEL,
VICENTE T. PADDAYUMAN, DELFRANDO T. SEVILLA, ELVIRA SIMANGAN-INTERIOR,
CELESTINO P. TABANIAG and CIRILO B. TEGA, JR.
Ponente: QUISUMBING, J
RECIT-READY/SUMMARY: Private respondents were retired employees of the
petitioner. They instituted a complaint for specific performance against the
petitioner, which they prayed that petitioner be ordered to pay them the subject
benefits. However, the petitioner filed a motion to dismiss, alleging that there
was no cause of action, due to the fact there was no contractual relationship
between the parties. RTC and CA dismissed the motion to dismiss. The SC affirmed
the decisions of the lower court, stating that there was cause of action in favor of
the private respondents, and such all elements were present.
DOCTRINE: The cause of action is determined from the allegations of a complaint,
not from its caption.
FACTS:
 Petitioner, a GOCC, engaged in the business of crop insurance.
 Private respondents are retired employees and officers of petitioner.
 RA 6758 was enacted, and the private respondents were receiving cost of
living allowance, equivalent to 40% of the basic salary, amelioration
allowance equivalent to 10% of their basic salary and additional COLA
known as equity pay.
 DBM CCC No. 10 was issued, which specified that the COLA previously
granted to govt employees shall be deemed included in the basic salary.
o Petitioner stopped paying the benefits to private respondents.
o However, DBM-CCC No. 10 was nullified in the case of De Jesus
v COA, due to its non-publication in the OG or in a newspaper of
general circulation in the country.
of the decision of the CA, which had dismissed its earlier petition for
certiorari of RTC.
 RTC:
o PR instituted an action for specific performance against
petitioner before the rtc.
 They prayed that petitioner be ordered to pay them
the subject benefits.
 Alleged that the nullification of DBM-CCC No. 10
rendered the integration of the subject benefits into
their salaries ineffective.
o Petitioner filed a Motion to Dismiss, on the grounds that:
 Complaint stated no Cause of Action, since the parties
have no contractual relationship;
 Subject benefits have already been integrated into the
basic salaries;
 PR’s reliance on the De Jesus case was misplaced since
said case involved the payment of a different benefit
which was not integrated into the basic salaries of the
employees concerned.
o PR’s answer:
 They averred that the sufficiency of the complaint
should be tested based on the strength of its
allegations and no other.
 There was also a contractual relationship.
o RTC denied the motion to dismiss. Allegations in the complaint
for specific performance is valid cause of action.
 CA:
o Petitioner filed a special civil action for certiorari. Argued that
the judge, committed grave abuse of discretion amounting to
lack or excess of jurisdiction in denying its motion to dismiss.
o CA dismissed the petition and affirmed that the complaint
stated a cause of action.
 1st: PR’s allegations reveal that the action is based on
law.
 2nd: They sufficiently alleged in their complaint facts
constituting the elements of cause of action:
 1: entitled to the subject benefits under RA
6758
 2: petitioner is bound by said law to pay the
subject benefits;
  3: petitioner refused to pay said benefits.
 3rd: declared that the doctrine of exhaustion of
administrative remedies does not apply since
respondents’ claim to the subject benefits involves
purely legal issue.
 4th: PR made several demands on petitioner to pay the
subject benefits.
DISPOSITION: WHEREFORE, the Decision dated January 27, 2005 and the Resolution
dated August 4, 2005 of the Court of Appeals in CA-G.R. SP No. 77773 are AFFIRMED.
Accordingly, the Regional Trial Court of Tuguegarao City, Cagayan, Branch 5, is
hereby DIRECTED to continue with the proceedings in Civil Case No. 6123 and decide
the said case with dispatch.

ISSUE: WON gravely erred and abused its discretion when it affirmed public
respondent judge’s order denying petitioner’s motion to dismiss. (WON there was a
cause of action in the complaint)

HELD/RATIO:
 YES. The SC ruled in favor of the respondents. Stating that there was a
cause of action and the respondent judge did not err in denying the
motion to dismiss of the petitioner.
 Sec 1, Rule 8 of the RoC, requires the complaint to contain a plain, concise
and direct statement of the ultimate facts upon which the plaintiff bases
his claim.
o A complaint states a cause of action only when it has its three
indispensable elements:
 (1) 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 repect or not violate such right;
 (3) An act or omission on the part of such defendant
violative of the right of plaintiff or constituting a
breach of the obligation of defendant to the plaintiff
for which the latter maintain an action for recover of
damages.
 The SC ruled that the elements were present in the case at bar. PRs have
sufficiently alleged in their complaint that:
o (1) they are entitled to the subject benefits under RA 6758;
o (2) petitioner is bound by said law to pay the subject benefits;
and
o (3) petitioner refused to pay said benefits.
 Furthermore, Cause of action is determined from the allegations of a
complaint, and not from its caption. Moreover, the focus is on the
sufficiency, not the veracity of the material allegations. The determination
is confined to the four corners of the complaint and nowhere else.