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Civil Procedure

Digested Cases

(Case Nos. 1-37)

2C 2015-2016

Cancino, Realyn R.

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ATTY. CHRISTIAN “KIT” G. VILLASIS
University of Santo Tomas
Faculty of Civil Law

LIST OF CASES:

1. Concha v. Lumocso, G.R. No. 158121, December 12, 2007


2. Heirs of Telesforo Julao v. Spouses De Jesus, G.R. No. 176020,
September 29, 2014
3. Sps. Teodoro and Rosatio Saraza and Fernando Saraza v. William
Francisco, G.R. No. 198718, November 27, 2013
4. Sps. Bill and Victoria Hing v. Alexander Choachuy, Sr, and Allan
Choachuy, G.R. No. 179736, June 26, 2013.
5. Heirs of Faustino Mesina and Genoveva Mesina v. Heirs of
Domingo Fian, Sr., et. al., G.R. No. 201816, April 8, 2013
6. El Hogar Filipino v. Seva, No. 36627, November 19, 1932
7. Mijares, et al. v. Piccio, et al., L-10458 April 22,1957
8. Calo v. Ajax, L-20865, March 13, 1968
9. Union Bank of the Philippines vs. Bignay EX-IM Philippines, Inc., G.R.
NO. 171590, February 12, 2014
10. Rosario v. Carangdang, G.R. No. L-7076, April 28, 1955
11. Surigao Mine Exploration Co. v. Harris, G.R. No. L-45543, May 17,
1939
12. Reinier Pacific International Shipping, Inc. v. Francisco Guevarra,
G.R. No. 157020, June 19, 2013.
13. Sps. Benedict and Sandra Manue vs. Ramon Ong, G.R. No.
205249, October 15, 2014
14. Planters Development Bank, vs. Julie Chandumal, G.R. No. 19561905
September 2012
15. George Pidlip Palileo vs. Planters Development Bank G.R. No.
193650, October 8, 2014
16. Virginia Dio vs. Subic Bay Marine Exploratorium, Inc., G.R. No.
189532, June 11, 2014
17. B. Sta. Rita & Co., Inc. v. Angeline Gueco, G.R. No.193078, August
28, 2013
18. Eloisa Merchandising, Inc. vs. Banco De Oro Universal Bank, G.R.
No. 192716, June 13, 2012
19. Republic vs. Sandiganbayan, G.R. No. 112710, May 30, 2001
20. Eagle Ridge Development Corp., vs. Cameron Granville 3 Asset
Management, Inc., G.R. No. 204700, November 24, 2014
21. Teofilo Adolfo vs. Fe Adolfo, G.R. No. 201427, March 18, 2015

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22. Philippine Business Bank vs. Chua, 15 November 2010
23. People v. Andy Zulieta a.k.a. "Bogarts," G.R. No. 192183, November
11, 2013
24. Greco Antonious Beda Belgica v. Hon. Paquito Ochoa, Jr., G.R. No.
208566, November 19, 2013
25. Cecilia Pagaduan vs. Civil Service Commission, et. al., G.R. No.
206379, November 19, 2014
26. Yu v. Samson Tatad, G.R. No. 170979, February 9, 2011
27. San Lorenzo Ruiz Builders And Developers Group, Inc. vs. Ma.
Cristina Bayang, G.R. No. 194702, April 20, 2015
28. Fortune Life Insurance Co., Inc. v. COA, G.R. No. 213525, January 27,
2015
29. Gregorio De Leon, Doing Business As G.D.L. Marketing vs. Hercules
Agro Industrial Corp. G.R. No. 183239, June 02, 2014
30. Casupanan vs. Laroya, G.R. No. 145391, 26 August 2002
31. Light Rail Transit Authority vs. Aurora Salvaña, G.R. No. 192074, June
10, 2014
32. Juliet Vitug Madarang vs. Sps. Jesus Morales, G.R. No. 199283, June
9, 2014
33. Magdalena Villasi v. Filomeno Garcia, G.R. NO. 190106, January 15,
2014
34. Department of Environment and Natural Resources v. United
Planners Consultants, Inc., G.R. No. 212081, February 23, 2015
35. Corona International vs. CA, G.R. No. 127851. October 18, 2000
36. Caluag vs. Pecson, October 29, 1948, G.R. No. L-1403
37. Bank of the Philippine Islands Securities Corp. vs. Edgardo
Guevara, G.R. No. 167052, March 11, 2015

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Concha v. Lumocso, G.R. No. 158121, December 12, 2007

Facts:

Dorotea and Valeriano Concha, Sr., claim to be the rightful owners of a 2


lots all situated in Dipolog City, under Section 48(b) of C.A. No. 141, known as
the Public Land Act. Respondent siblings Lumocso are the patent holders and
registered owners of the subject lots. The Heirs of Valeriano filed for a complaint
for Reconveyance and/or Annulment of Title with Damages against
respondents, seeking to annul Free Patent and the corresponding Original
Certificate of Title issued in the name of "Gregorio Lumocso" covering a certain
parcel of land.

Respondents moved for the dismissal of the respective cases against them
on the same grounds of: (a) lack of jurisdiction of the RTC over the subject
matters of the complaints; (b) failure to state causes of action for
reconveyance; (c) prescription; and (d) waiver, abandonment, laches and
estoppel. Lumocso contended that the RTC has no jurisdiction over the
complaints pursuant to Section 19(2) of Batas Pambansa Blg. (B.P.) 129, as
amended by R.A. No. 7691, as in each case, the assessed values of the subject
lots are less than P20,000.00. Petitioners opposed, contending that the instant
cases involve actions the subject matters of which are incapable of pecuniary
estimation which, under Section 19(1) of B.P. 129, as amended by R.A. 7691, fall
within the exclusive original jurisdiction of the RTCs. They also contended that
they have two main causes of action: for reconveyance and for recovery of the
value of the trees felled by respondents. Hence, the totality of the claims must
be considered which, if computed, allegedly falls within the exclusive original
jurisdiction of the RTC.

Trial court DENIED the Motion to Dismiss of the respondents. CA REVERSED the
resolutions and order of the trial court. It held that even assuming that the
complaints state a cause of action, the same have been barred by the statute
of limitations. Furthermore, an action for reconveyance based on fraud
prescribes in ten (10) years, hence, the instant complaints must be dismissed as
they involve titles issued for at least twenty-two (22) years prior to the filing of the
complaints.

Hence this appeal by certiorari under Rule 45.

Issue: Whether or not RTC has jurisdiction over the complaints herein pursuant to
Section 19(2) of Batas Pambansa Blg. (B.P.) 129, as amended by R.A. No. 7691

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Held: No. MTC has the jurisdiction over the subjected value.

Jurisdiction over the subject matter is the power to hear and determine
cases of the general class to which the proceedings in question belong. It is
conferred by law and an objection based on this ground cannot be waived by
the parties. To determine whether a court has jurisdiction over the subject
matter of a case, it is important to determine the nature of the cause of action
and of the relief sought. The trial court correctly held that the instant cases
involve actions for reconveyance. An action for reconveyance respects the
decree of registration as incontrovertible but seeks the transfer of property,
which has been wrongfully or erroneously registered in other persons' names, to
its rightful and legal owners, or to those who claim to have a better right. There is
no special ground for an action for reconveyance. It is enough that the
aggrieved party has a legal claim on the property superior to that of the
registered owner and that the property has not yet passed to the hands of an
innocent purchaser for value.

Being in the nature of actions for reconveyance or actions to remove cloud on


one's title, the applicable law to determine which court has jurisdiction is Section
19(2) of B.P. 129, as amended by R.A. No. 7691:

“Section 19. Jurisdiction in Civil Cases.-- Regional Trial Courts shall


exercise exclusive original jurisdiction:
(2) In all civil actions which involve the title to, or possession of, real
property, or any interest therein, where the assessed value of the property
involved exceeds Twenty thousand pesos (P20,000.00) or for civil actions in
Metro Manila, where such value exceeds Fifty thousand pesos
(P50,000.00) except actions for forcible entry into and unlawful detainer of
lands or buildings, original jurisdiction over which is conferred upon the
Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial
Courts”;

In the cases at bar, it is undisputed that the subject lots are situated in
Cogon, Dipolog City and their assessed values are less than P20,000.00. Hence,
the MTC clearly has jurisdiction. Petitioners' contention that this case is one that is
incapable of pecuniary estimation under the exclusive original jurisdiction of the
RTC pursuant to Section 19(1) of B.P. 129 is erroneous. In a number of cases, SC
have held that actions for reconveyance of or for cancellation of title to or to
quiet title over real property are actions that fall under the classification of cases
that involve "title to, or possession of, real property, or any interest therein."

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Heirs of Telesforo Julao v. Spouses De Jesus, G.R. No. 176020, September 29, 2014

Facts:

Telesforo Julao filed before the DENR Baguio City two Townsite Sales
Applications. However, upon his death, the applications were transferred to his
heirs. Consequently, Solito Julao executed a Deed of Transfer of
Rights transferring his hereditary share in the property to respondent spouses
Alejandro and Morenita De Jesus, where the respondent spouses constructed a
house on the property.

The DENR issued an Order of Rejection and Transfer of Sales Rights.


Consequently, an Original Certificate of Title covering a 641-square meter
property was issued in favor of the heirs of Telesforo. Petitioners Anita Julao vda.
De Enriquez, Sonia J. Tolentino and Roderick Julao, heirs of Telesforo, filed before
the RTC a Complaint or Recovery of Possession of Real Property against
respondent spouses, alleging that they are the true and lawful owners of the
parcel of land; that respondent spouses' house encroached on 70 square
meters of the subject property; that on petitioners sent a demand letter to
respondent spouses asking them to return the subject property; that respondent
spouses refused to accede to the demand, insisting that they acquired the
subject property from petitioners' brother, Solito, by virtue of a Deed of Transfer
of Rights; that in the Deed of Transfer of Rights, Solito expressly transferred in
favor of respondent spouses his hereditary share in the parcel of land.

Respondent spouses filed a Motion to Dismiss on the ground of


prescription, which the RTC denied for lack of merit. Thus, they filed an
Answer contending that they are the true and lawful owners and possessors of
the subject property; that they acquired the said property from petitioners'
brother, Solito; and that contrary to the claim of petitioners.

During the trial, petitioners disputed the validity of the Deed of Transfer of
Rights executed by Solito by presenting evidence to prove that Solito had no
hereditary share in the estate of Telesforo because Solito was not Telesforo's
biological son, but his stepson, and that Solito 's real name was Francisco
Bognot. After petitioners rested their case, respondent spouses filed a Motion for
Leave of Court to File a Demurrer to Evidence. The RTC, however, denied the
Motion.

The heirs of Solito then moved to intervene and filed an Answer-


lnlntervention, arguing that their father, Solito, is a legitimate son of Telesforo and
that Solito sold his hereditary share in the estate of his father to respondent
spouses by virtue of a Deed of Transfer of Rights.

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The RTC rendered a Decision in favor of petitioners, ruling that although
petitioners failed to prove their allegation that Solito was not an heir of
Telesforo, they were nevertheless able to convincingly show that Telesforo filed
with the DENR two applications, covering two separate parcels of land, and
that it was his first application, TSA No. V-2132, which resulted in the issuance of
OCT No. P-2446. And since what Solito transferred to respondent spouses was his
hereditary share in the parcel of land covered by TSA No. V-6667, respondent
spouses acquired no right over the subject property, which was derived from a
separate application, TSA No. V-2132.

Aggrieved, respondent spouses elevated the case to the CA, which


reversed the ruling of the RTC. The CA found the Complaint is dismissible on two
grounds: (1) failure on the part of petitioners to identify the property sought to be
recovered; and (2) lack of jurisdiction.

Issue: Whether or not the Court of Appeals committed a reversible error in ruling
that the trial court acquired jurisdiction over the complaint.

Held: NO.

The assessed value must be alleged in the complaint to determine which


court has jurisdiction over the action. Jurisdiction as we have said is conferred by
law and is determined by the allegations in the complaint, which contains the
concise statement of the ultimate facts of a plaintiffs cause of action.

In this case, for the RTC to exercise jurisdiction, the assessed value of the
subject property must exceed P20,000.00. Since petitioners failed to allege in
their Complaint the assessed value of the subject property, the CA correctly
dismissed the Complaint as petitioners failed to establish that the RTC had
jurisdiction over it. In fact, since the assessed value of the property was not
alleged, it cannot be determined which trial court had original and exclusive
jurisdiction over the case.

Furthermore, contrary to the claim of petitioners, the issue of lack of


jurisdiction was raised by respondents in their Appellant's Brief and the fact that
it was raised for the first time on appeal is of no moment. Under Section 1, Rule 9
of the Revised Rules of Court, defenses not pleaded either in a motion to dismiss
or in the answer are deemed waived, except for lack of jurisdiction, litis
pendentia, res judicata, and prescription, which must be apparent from the
pleadings or the evidence on record. In other words, the defense of lack of
jurisdiction over the subject matter may be raised at any stage of the
proceedings, even for the first time on appeal. In fact, the court may motu

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proprio dismiss a complaint at any time when it appears from the pleadings or
the evidence on record that lack of jurisdiction exists.

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Spouses Teodoro and Rosario Saraza and Fernando Saraza v. William Francisco,
G.R. No. 198718, November 27, 2013.
Facts:

Respondent and Fernando Saraza had an agreement for the latter’s sale
of his 100-square meter share in a lot in Bangkal, Makati City, which at that time
was still registered in the name of one Emilia Serafico for P3, 200,000.00. The P1,
200,000.00 was paid upon the Agreement’s execution, while the balance was to
be paid on installments to the Philippine National Bank (PNB), to cover a loan of
Spouses Saraza, Fernando’s parents, with the bank. A final deed of sale
conveying the property was to be executed by Fernando upon full payment of
the PNB loan.

It was agreed that upon failure for any reason to transfer the property to
the respondent’s name, Rosario and Fernando’s 136-sq m property (TCT No.
156126), shall be considered a collateral in favor of respondent. Respondent
was also allowed to take immediate possession of said property through a
contract of lease. The petitioners likewise authorized PNB to allow respondent to
pay their obligations to the PNB, to negotiate for a loan restructuring, to receive
the owner’s duplicate copy of TCT No. 156126 upon full payment of the loan
secured by its mortgage, and to perform such other acts as may be necessary
in connection with the settlement of the loan.

When the remaining balance of the PNB loan reached P226, 582.13,
respondent asked for the petitioners’ issuance of a Special Power of Attorney
(SPA) to authorize him to receive from PNB the owner’s duplicate copy of TCT
No. 156126 upon full payment of the loan. The petitioners denied the request.

Respondent discovered that petitioners had executed an Amended


Authority, which provided that the owner’s copy of TCT No. 156126 should be
returned to the mortgagors upon full payment of the loan. Spouses Saraza also
caused the eviction of the respondent from the property covered by TCT No.
156126. Thus, respondent filed a case for specific performance, sum of money
and damages with the RTC of Imus, Cavite. The RTC rendered a Decision in
favor of the respondent. Fernando questioned the decision before the CA. In
addition to the defenses which he raised during the proceedings before the
RTC, he argued that the RTC of Imus lacked jurisdiction over the case as it
involved an adjudication of ownership of a property situated in Makati City.

The CA affirmed the RTC. On the issue of jurisdiction, the CA cited


Fernando’s failure to seasonably file before the lower court a motion to dismiss
stating that the action should have been filed in Makati City. Also, the court

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explained that the case was a personal action since it did not involve a claim of
ownership of the subject property, but only sought Fernando’s execution of a
deed of sale in the respondent’s favor. Thus, the venue for the action was the
residence of the plaintiff or the defendant, at the plaintiff’s option.

Petitioner Fernando’s Motion for Reconsideration was denied.

Issue: WON the venue should have been in Makati where the property was
located.

Ruling: No. Although the end result of the respondent’s claim was the transfer of
the subject property to his name, the suit was still essentially for specific
performance, a personal action, because it sought Fernando’s execution of a
deed of absolute sale based on a contract which he had previously made.

In Cabutihan v. Landcenter Construction & Development Corporation, a


complaint for specific performance that involved property situated in
Parañaque City was instituted in Pasig City. When the case’s venue was raised
as an issue, the Court sided with therein petitioner who argued that "the fact
that ‘she ultimately sought the conveyance of real property’ not located in the
territorial jurisdiction of the RTC of Pasig is x x x an anticipated consequence and
beyond the cause for which the action [for specific performance with
damages] was instituted." In La Tondeña Distillers, Inc. v. Ponferrada, private
respondents filed an action for specific performance with damages before the
RTC of Bacolod City. The defendants allegedly reneged on their contract to sell
to them a parcel of land located in Bago City. Private respondent did not claim
ownership but, by annotating a notice of lis pendens on the title, recognized
defendants’ ownership thereof. This Court ruled that the venue had properly
been laid in the RTC of Bacolod, even if the property was situated in Bago.

In Siasoco v. Court of Appeals, private respondent filed a case for specific


performance with damages before the RTC of Quezon City. It alleged that after
it accepted the offer of petitioners, they sold to a third person several parcels of
land located in Montalban, Rizal. The Supreme Court sustained the trial court’s
order allowing an amendment of the original Complaint for specific
performance with damages. Contrary to petitioners’ position that the RTC of
Quezon City had no jurisdiction over the case, as the subject lots were located
in Montalban, Rizal, the said RTC had jurisdiction over the original Complaint. The
Court reiterated the rule that a case for specific performance with damages is a
personal action which may be filed in a court where any of the parties reside.

The Court compared these two cases with the case of National Steel
Corporation v. Court of Appeals where the Court held that an action that seeks

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the execution of a deed of sale over a parcel of land is for recovery of real
property, and not for specific performance, because the primary objective is to
regain ownership and possession of the property. It was explained that the
prayer in National Steel was not in any way connected to a contract that was
previously executed by the party against whom the complaint was filed, unlike
in Cabutihan where the parties had earlier executed an Undertaking for the
property’s transfer, correctly giving rise to a cause of action either for specific
performance or for rescission, as in this case. Section 2, Rule 4 of the Rules of
Court then governs the venue for the respondent’s action. It provides that
personal actions "may be commenced and tried 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." Considering the respondent’s
statement in his complaint that he resides in Imus, Cavite, the filing of his case
with the RTC of Imus was proper.

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Sps. Bill and Victoria Hing v. Alexander Choachuy, Sr, and Allan Choachuy,
G.R. No. 179736, June 26, 2013

Facts:

Petitioners and respondents are owners of adjacent parcels of land. The


Choachuys were the owners of Aldo Development and Resources, Inc. They
constructed an auto-repair shop building, and later sued for an Injunction Order
and Damages against the petitioners for apparently building a wall without
permission which would impair their building.This was not granted because Aldo
failed to present evidence to support the claim. The respondents later installed
two surveillance cameras near the disputed areas. This time, the petitioners sued
respondents and asked the RTC to issue a TRO, claiming that the two
surveillance cameras violated their right to privacy. The RTC granted the TRO.
Respondents went to the CA, denying that they installed the surveillance
cameras and claiming that Aldo Development held a separate personality from
the Choachuys and that the latter are merely its stockholders. The CA granted
the respondents petition and reversed the RTC, holding that the Choachuys did
not own the building and maintain a separate legal personality from Aldo. The
CA held that they were impleaded incorrectly.

Issue: Whether or not Choachuys are the proper defendants

Held: Yes.

The Choachuys are the real party defendants. Under the Rules of Court,
the Real Party Defendants are those who have an obligation to redress the
wrong complained of because of their actions or omissions that violated the
legal right/s of the plaintiffs. The CA, in holding that the Choachuys do not own
the building where the surveillance cameras were attached, was incorrect
because this fact alone does not prevent the Choachuys from being, in reality,
the cause of the action or omission that violated the petitioner’s legal right
(Privacy). It was revealed that throughout the proceedings in the lower court,
the Choachuys were meticulously involved in the installation of the surveillance
cameras. The Choachuys had also allowed the RTC judge to have an ocular
inspection of the building despite their later claim that they did not own the
building. All their activities involving Aldo’s building belie their claim that they are
mere stockholders of the said corporation. The Choachuys have had a direct
hand in violating the Sps. Hing’s right to privacy through the installation of the
surveillance cameras. It is clear from the evidence that the Choachuys are
indeed the proper defendants in the suit.

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Heirs of Faustino Mesina and Genoveva Mesina v. Heirs of Domingo Fian, Sr., et.
al., G.R. No. 201816, April 8, 2013

Facts:
Spouses Mesina, during their lifetime, bought from Spouses Fian two
parcels of land on installment. Upon the death of Spouses Fian, their heirs (who
are unnamed in the records) refused to acknowledge the sale and payments
for the subject lots, and claims ownership and possession thereof. Meanwhile,
Spouses Mesina also passed away. Notwithstanding repeated demands, the
Heirs of Fian refused to vacate the lots and to turn possession over to the heirs of
the Spouses Mesina. The heirs of Spouses Mesina, with Norman Mesina as their
attorney-in-fact filed an action for quieting of title and damages before the
Regional Trial Court (RTC) against the Heirs of Fian, naming only Theresa Fian
Yray (Theresa) as the representative of the Heirs of Fian.

Respondent Theresa filed a Motion to Dismiss the complaint, arguing that


the complaint states no cause of action and that the case should be dismissed
for gross violation of Sections 1 and 2, Rule 3 of the Rules of Court, she claims
that the "Heirs of Mesina" could not be considered as a juridical person or entity
authorized by law to file a civil action. Neither could the "Heirs of Fian" be made
as defendant, not being a juridical person as well. She added that since the
names of all the heirs of the late spouses Mesina and spouses Fian were not
individually named, the complaint is infirmed, warranting its dismissal.

The RTC dismissed the complaint, as well as a subsequent Motion for


Reconsideration filed by the petitioner.

The Court of Appeals (CA) affirmed the decision of the RTC, ruling that the
all the heir of Spouses Fian are indispensable parties and should have been
impleaded, failure to do so will nullify any order or judgment. The CA also held
that the RTC correctly dismissed the complaint for being improperly verified. A
subsequent Motion for Reconsideration was dismissed.

Issues:
1. Whether or not there was cause of action
2. Whether or not the rule on verification and certification against forum
shopping has been complied with

Held:

1. Yes, there was a cause of action. The three essential elements of a cause of
action are all present, namely: The legal right of the plaintiff, The correlative
obligation of the defendant, and the act or omission of the defendant in

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violation of said right. The infirmity is, in fact, not a failure to state a cause of
action but a non-joinder of an indispensable party. Thus, the dismissal of the
case for failure to state a cause of action is improper. What the trial court should
have done is to direct petitioner Norman Mesina to implead all the heirs of
Domingo Fian, Sr. as defendants within a reasonable time from notice with a
warning that his failure to do so shall mean dismissal of the complaint.

2. Yes, there was a valid verification and certification against forum shopping.
Both the RTC and the CA found said verification defective, since the phrase "or
based on authentic records," as indicated under the second paragraph of Sec.
4, Rule 7 as afore-quoted, was omitted. We do not agree. That the verification of
the complaint does not include the phrase "or based on authentic records" does
not make the verification defective. Notably, the provision used the disjunctive
word "or." The word "or" is a disjunctive article indicating an alternative. As such,
"personal knowledge" and "authentic records" need not concur in a verification
as they are to be taken separately.

Also, verification, like in most cases required by the rules of procedure, is a


formal requirement, not jurisdictional. It is mainly intended to secure an
assurance that matters which are alleged are done in good faith or are true
and correct and not of mere speculation. Thus, when circumstances so warrant,
as in the case at hand, "the court may simply order the correction of unverified
pleadings or act on it and waive strict compliance with the rules in order that
the ends of justice may thereby be served."

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El Hogar Filipino v. Seva, No. 36627, November 19, 1932

Facts:

Respondent Seva, the judicial administrator of the estate of the deceased


Leonor G. de Seva, appealed to the Supreme Court an order of the Court of
First Instance of Manila. The subject court order confirmed the auction sale
made by the sheriff of said court, of a parcel of residential property situated in
Manila and another in Negros Occidental, and mortgaged to the petitioner El
Hogar Filipino, the highest bidder being Victor Buencamino for P12,550, and
ordering the issuance of another writ of execution for the rest of the sentence
under execution.

Issues:
1) Whether or not the Court of First Instance of Manila has jurisdiction to order
the public auction sale of the mortgaged property situated in Negros
Occidental.
2) Whether or not the property was sold extra-judicially by the sheriff of Manila.
3) Whether or not the sale was void for insufficiency of the price at which the
property was sold at public auction.

Held:

1) YES. When various parcels of land or real property situate in different


provinces, are included in one mortgage contract, the Court of First Instance of
the province wherein they are situated or a part thereof is situated, has
jurisdiction to take cognizance of an action for the foreclosure of said
mortgage, and the judgment therein rendered may be executed in all the other
provinces wherever the mortgaged real property may be found. Finding no
error in the order appealed from, the order was affirmed in its entirety, with costs
against the petitioner.

2) NO. The appellant himself answers this question in his brief recital of the facts,
wherein he states that by virtue of a writ of execution issued by the Court of First
Instance of Manila in the foreclosure proceedings instituted by El Hogar Filipino
against A. P. Seva, as administrator of the estate of the late Leonor G. de Seva,
the sheriff of Manila sold the property at public auction. Inasmuch as a
competent court has ordered the public auction sale of the real property, and
this order has been carried out, the sale cannot be called extrajudicial.

3) NO. Inasmuch as the opposition to the confirmation of the sale made by the
sheriff pursuant to the execution only alleged as a ground that the price for
which the mortgaged property was sold was absolutely inadequate and

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unreasonable, it has been held by this court that a smaller price, for which the
same property was sold at the first auction, notwithstanding that it was
inadequate, was not sufficient by itself alone to annul the order confirming the
sale (which was annulled for a different reason); therefore, the fact that the
opponent was not given an opportunity to present evidence in support of the
allegations of his opposition does not constitute a prejudicial error which would
nullify the order confirming the sale made by the sheriff.

In the present case the appellant has not shown, either in the lower court or in
this Court, that there was anybody who offered, or was willing to offer, a higher
price for the property in question, if the sale made by the sheriff to Victor
Buencamino would be set aside, and another auction sale held.

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Calo v. Ajax, L-20865, March 13, 1968

Facts:

Calo ordered Ajax International, Inc. 1,200 ft. of John Shaw wire rope as
evidenced by Charge Order for P3,420.00. However, when the same was
delivered, the rope was found short of 300 ft. so Calo wrote two letters to Ajax
asking for either completion of delivery or account adjustment of the alleged
undelivered 300 ft. of wire rope. A complaint was filed in the Municipal Court of
Manila by one Benavides who claimed to have acquired the outstanding credit
account of Calo from Ajax Charge Order was among those included in the
assigned account. Subsequently, a judgment by default was entered, and a writ
of execution issued, against Calo. Calo resorted to file a petition for certiorari,
prohibition and mandamus. With that being said, the court set aside the
judgment of default and writ of execution issued against Calo and remanded
the case for further proceedings.

In turn, Calo filed in the CFI of Agusan a complaint against the defendant
asking either to effect the complete delivery of the said charge order or that she
be relieved from paying P855.00 and that the latter indemnify her for P12,000 as
attorney’s fees, damages, and expenses of litigation. Instead of filing an answer,
Ajax moved for the dismissal of the case on the ground that the subject thereof
was involved and intimately related to the first case in the Municipal Court of
Manila. The trial court sustained the motion to dismiss the case. Calo filed a
motion for reconsideration but was denied. The dismissal of the case in CFI
Agusan was premised on the theory that the petitioner’s claim is a compulsory
counterclaim to the case filed in MTC Manila.

Issue: WON the case filed in CFI Agusan is a compulsory counterclaim.

Held: NO

Calo’s claim is not a compulsory counterclaim for the simple reason that
the amount thereof exceeds the jurisdiction of the municipal trial court. The rule
that a compulsory counterclaim not set up is barred, when applied to the
municipal court presupposes that the amount is within the said court’s
jurisdiction. Otherwise, it would result to an absurd situation where a claim must
be filed within the MTC which is prohibited from taking cognizance of, being
beyond its jurisdiction. Besides, the reason underlying the rule, which is to settle
all related controversies in one sitting only is not obtained. Even if the
counterclaim in excess of the amount cognizable by the inferior court is set up,
the defendant cannot obtain positive relief. The rules allow this only for the
defendant to prevent plaintiff from recovering from him. This means that should

17
the court find both plaintiff’s complaint and the defendant’s counterclaim
meritorious, it will simply dismiss the complaint on the ground that the defendant
has a bigger credit. Since the defendant still has to institute a separate action
for the remaining balance of his counterclaim, the previous litigation did not
really settle all related controversies.

18
Union Bank of the Philippines vs. Bignay EX-IM Philippines, Inc.,
G.R. NO. 171590, February 12, 2014

Facts:

In 1984, Alfonso de Leon (Alfonso) mortgaged in favor of Union Bank of


the Philippines (Union Bank) real property which was registered in his and his wife
Rosario’s name, which was later on foreclosed and sold at auction to Union
Bank. Rosario filed against Alfonso and Union Bank a civil case for annulment of
the 1984 mortgage, claiming that Alfonso mortgaged the property without her
consent, and for reconveyance. In a Letter-Proposal, Bignay Ex-Im Philippines,
Inc. (Bignay), through its President, Milagros Ong Siy (Siy), offered to purchase
the property subject of the pending litigation between Rosario and Union Bank.
The documentation was intended to isolate the property from any lis pendens
that the former owner may annotate on the title and to allow immediate
reconstitution thereof since the original Torrens title was burned in 1988 when the
City Hall housing the Register of Deeds of Quezon City was gutted by fire. A
Deed of Absolute Sale was consequently executed by for P4 million. Bignay
mortgaged the property to Union Bank, presumably to secure a loan obtained
from the latter.

A Decision was rendered in the annulment case, finding that defendant


Alfonso had alone executed the mortgage on their conjugal property upon a
forged signature of his wife plaintiff Rosario. The Court hereby declared the
Mortgage Contract, Sheriff’s Sale, the TCT issued in the name of Union Bank, and
the sale and mortgage between Union Bank and Bignay, NULL and VOID. As a
result of this, Bignay was evicted from the property; by then, it had demolished
the existing structure on the lot and begun construction of a new building.

Bignay filed case for breach of warranty against eviction against Union
Bank and Robles. Union Bank filed its Answer Ad Cautelam, where it alleged that
Bignay was not an innocent purchaser for value, knowing the condition of the
property as evidenced by Siy’s letter-proposal to purchase the same. It
interposed a counterclaim as well, grounded on two promissory notes signed by
Siy in favor of the bank. On March 21, 2000, the trial court rendered its decision
declaring that Union Bank, through Robles, acted in bad faith in selling the
subject property to Bignay. Thus, it held that Bignay was entitled to the return of
the value of the property (P4 million), as well as the cost of the building erected
thereon (P20 million), since Union Bank acted in bad faith. At the same time, the
trial court held that the bank’s counterclaim was not at all connected with
Bignay’s Complaint, which makes it a permissive counterclaim for which the
docket fees should accordingly be paid. Since the bank did not pay the docket

19
fees, the trial court held that it did not acquire jurisdiction over its counterclaim;
thus, it dismissed the same.

Upon appeal, the CA held that Union Bank timely paid the docket fees
therefor at the time it filed its Answer Ad Cautelam. CA denied the parties’
respective motions for reconsideration.
Issues: Whether or not the docket fees were timely paid.

Held: No.

The Court disagrees with the CA on the issue of Union Bank’s


counterclaim. Bignay correctly observes that if the bank indeed paid the docket
fees therefor, the trial court would have so held in its March 21, 2000 Decision;
yet in its judgment, the trial court specifically declared that the docket fees
remained unpaid at the time of its writing, thus –

Anent the counterclaims interposed by defendant for the collection of


certain sum of money adverted earlier hereof [sic], this Court could not
exercise jurisdiction over the same as defendant did not pay the docket
fees therefor. Although the counterclaims were denominated as
compulsory in the answer, the matters therein alleged were not
connected with the plaintiff’s complaint. The counterclaims could stand
independently from the plaintiff’s complaint hence they are a [sic]
permissive counterclaims. During the pre-trial, this Court had already ruled
that the counterclaims were permissive yet the records showed that
defendant had not paid the docket fees. This Court therefore has not
acquired jurisdiction over said case.

And if it is true that the bank paid the docket fees on its counterclaim as
early as in 1994, it would have vigorously insisted on such fact after being
apprised of the trial court’s March 21, 2000 Decision. It is indeed surprising that
the supposed payment was never raised by the bank in a timely motion for
reconsideration, considering that the trial court dismissed its counterclaim; if
there is any opportune time to direct the court’s attention to such payment and
cause the counterclaim to be reinstated, it was at that point and no other. All it
had to do was prove payment by presenting to the court the official receipts or
any other acceptable documentary evidence, and thus secure the proper
reversal of the ruling on its counterclaim. Still, nothing was heard from the bank
on the issue, until it filed its brief with the CA on appeal.

20
More than the above, the Court finds true and credible the trial court's
express declaration that no docket fees have been paid on the bank's
counterclaim; the trial court's pronouncement enjoys the presumption of
regularity. Indeed, the sudden appearance of the receipts supposedly
evidencing payment of the "docket fees is highly questionable and irregular,
and deserves to be thoroughly investigated; the actuations of the bank relative
thereto go against the common experience of mankind, if they are not entirely
anomalous.

21
Rosario v. Carangdang, G.R. No. L-7076, April 28, 1955

Facts:

In her will the deceased Doña Rosario Fabie y Grey bequeathed the
naked ownership of a parcel of land situated at Ongpin St., Manila, and of the
building and other improvements existing thereon, to petitioners, and the
usufruct thereof to respondent (Carandang) for life. Because the improvements
were destroyed during the battle for the liberation of the City of Manila, the
Philippine War Damage Commission paid petitioners a certain sum of money
war damage. It was respondent, however, who paid the real estate taxes due
on the land for the years 1945 to 1954. Then petitioners sought to limit
respondent's usufruct to the legal interest on the value of the land.

The Court of Appeals affirmed the decision appealed from insofar as it


holds that appellee's right of life usufruct subsist and is in full force and effect
upon the Ongpin lot and the building now existing thereon.

We further modified the appealed judgment by eliminating therefrom the


portion requiring them to give security for the payment of legal interest on the
amount of the war damage. The record of the case having been remanded to
the court of origin for execution,

Respondent filed a motion praying that the court issue an order for the
"payment of the appellate jurisdiction of the Court of Appeals, 11, 1950 to
January 11, 1960, which are already due to the defendant usufructuary from the
plaintiffs, naked owners, as legal interest on the war damage payments
received by the latter xxx Petitioners opposed the motion alleging that because
respondent failed to pay the real estate taxes on the property for the years 1954
to 1959, the property was declared delinquent and sold at public auction to
Mrs. Pilar T. Bautista; that respondent failed to repurchase the property despite
the fact that she was under obligation to do so in order to maintain her usufruct
thereon.

Subsequently, the Court of First Instance of Manila ordered the Sheriff of


Manila to withhold the sum of P3,495.90 which the plaintiffs claim to be
reimbursable to them for real estate taxes paid on the property as well as the
sum spent in repurchasing the property from the buyer at public auction, Mrs.
Pilar T. Bautista. The disposition of the said sum should be threshed out by the
parties in a separate incident either in this action or in an independent litigation.
Respondent filed a motion for the reconsideration of the above order upon the
ground that it imposes a condition on the execution of the judgment rendered

22
in the case — which, as modified by the appellate courts, had already become
executory.

Respondents filed a petition for certiorari with the CA on the ground that
the orders were inconsistent with the Supreme Court ruling. The CA set aside the
same ruling and ordered the lower court to issue a writ of execution.

Hence this petition. Petitioners reiterate now their contention that the
Court of Appeals had no jurisdiction over the petition for certiorari filed by herein
respondent, Josefa Fabie Vda. de Carandang because the writ sought therein
was not in aid of its appellate jurisdiction.

Issue: WON the Court of Appeals has jurisdiction over the petition for certiorari. .

Held: The CA has no jurisdiction.

It is not disputed that the Court of Appeals has original jurisdiction to issue
writs of certiorari, prohibition, mandamus, and all other auxiliary writs in aid of its
appellate jurisdiction (Section 30, Republic Act 296, commonly known as
Judiciary Act of, 1948). Settled likewise is the view that anyone of the writs
aforesaid is in aid of the appellate jurisdiction of the Court of Appeal within the
meaning of the law, if said court has jurisdiction to review, by appeal or writ of
error, the final decision that might be rendered in the principal case by the court
against which the writ is sought.

From the above circumstances it might appear that the Court of Appeals
had jurisdiction over the petition for certiorari filed by respondent Josefa Fabie
de Carandang against herein petitioners and the Court of First Instance of
Manila, because the writ sought was in aid of its appellate jurisdiction, we find it
to be otherwise in view of one important fact that makes the aforesaid decision
inapplicable to the present case.

In the present case such situation does not obtain. The main case (Civil
Case No. 17674 of the Court of First Instance of Manila) had already been finally
decided, first by the Court of First Instance of Manila, then by the Court of
Appeals and lastly, by Us; our decision had become executory, for which reason
the record of the case was remanded below for purposes of execution; there
was absolutely nothing left of the substance of the action to be resolved. Such
being the case, there can be no reason to say that the Court of Appeals still
had jurisdiction to review the final orders and decision of the Court of First
Instance in said case, by appeal or writ of error. That jurisdiction had already
been exercised and exhausted with the rendition of the decision of the Court of
Appeals in C.A. G.R. No. 11917.

23
Upon the other hand, assuming that the orders complained of are
appealable, they could only be appealed to Us because the appeal would
have necessarily involved nothing more than a question of law, namely,
whether or not the Court of First Instance of Manila had jurisdiction to issue the
orders complained of.

In view of the foregoing, we hold that the Court Appeals had no


jurisdiction to entertain Carandang's petition for certiorari, and, as a result, the
appealed decision is set aside. But, in view of the fact that we have original
jurisdiction to entertain said petition, we shall proceed to decide it on the merits
as if it had been originally filed with Us, in order to save time and avoid
unnecessary expenses for the parties — following the practice adopted in the
Breslin case.

24
Surigao Mine Exploration Co. v. Harris, G.R. No. L-45543, May 17, 1939

Facts:

On October 24, 1935, Surigao Mine Exploration Co. (plaintiff) filed a


complaint in the Court of First Instance (CFI) of Surigao seeking a judicial
pronouncement (a) adjudging the plaintiff to be the owner and possessor of the
14 placer mining claims mentioned in the complaint, (b) annulling the 43 lode
mining claims of the defendants, C. Harris, Surigao-Mainit Mining Syndicate,
Surigao Consolidated Mining Co., Inc., and Otto Weber, (c) prohibiting the
defendants and their agents from interfering with plaintiff's ownership and
possession of its placer claims; and (d) sentencing the defendants to pay jointly
and severally to the plaintiff the sum of P47,000 by way of damages. During the
course of the proceedings, plaintiff thrice amended the complaint. Before the
plaintiff could close its evidence, the defendants moved for the dismissal of the
complaint on the ground that, when the action was commenced, plaintiff's right
of action had not yet accrued, since, under its own Exhibits O and O-1 to O-9
(deeds of sale of the placer claims), the plaintiff did not become the owner of
the claims in dispute until after the original complaint was filed on October 24,
1935. The CFI dismissed the complaint. Hence, the present petition.

Issue: Whether or not the trial court erred and abused its discretion in so ordering
the dismissal of the complaint.

Held:

No. When no cause of action is existing at the time the action is filed, the case is
dismissible, notwithstanding that a cause of action arises during the pendency
of the case.

1. Plaintiff became the owner and possessor of the claims in question by virtue
of muniments of title (Exhibits O and O-1 to O-9). Notably, the deeds of sale in
favor of plaintiff were executed after the filing of the original complaint.

2. Subject to certain qualifications, and except as otherwise provided by law,


an action commenced before the cause of action has accrued is prematurely
brought and should be dismissed, provided an objection on this ground is
properly and seasonably interposed. The fact that the cause of action accrues
after the action is commenced and while it is pending is of no moment. In the
present case, timely objection was made by counsel for the defendants upon
discovery of the immaturity of the action as a result of the presentation by

25
plaintiff of certain exhibits.

3. The date when a civil action is deemed commenced is determined by


section 389 of the Code of Civil Procedure. Under section 389, the action in
deemed commenced upon the "filing of a complaint in the office of the clerk of
the court in which the action is to be instituted.” The original complaint was filed
in the present case on October 24, 1935. But although it be assumed that the
date or dates of the issuance and service of the summons might affect the true
date of the commencement of the action, the point is of no legal consequence
because whether the date of the filing of the original complaint, or the date of
the issuance of the summons, or the date of the service of said summons, is
considered as the time of the commencement of the suit, it is clear that any of
said dates is anterior to those of Exhibits O and O-1 to O-9.

4. It is a rule of law to which there is, perhaps, no exception, either at law or in


equity, that to recover at all there must be some cause of action at the
commencement of the suit.

Plaintiff will not be allowed, by an amendment, to introduce a cause of action


which had no existence when the action was commenced

5. The right to amend a pleading is not an absolute and unconditional right. It is


to be allowed in furtherance of justice under a sound judicial discretion. This
judicial discretion, upon the other hand, is of course not without any restriction.
The cause of action must exist at the time the action was begun, and the
plaintiff will not be allowed by an amendment to introduce a cause of action
which had no existence when the action was commenced.

6. As soon as an action is brought and the complaint is filed, the proceedings


thus initiated are not subject to the arbitrary control of the parties or of the court,
but must be dealt with in accordance with recognized rules of pleading and
practice. Amendments "must be such, and only such, as are necessary to
promote the completion of the action begun all parties necessary for that
purpose may come or be brought into it, and so also, any and all such
amendments may be made as to the cause of action, as may be necessary to
its completeness in all respects.

7. Unless the plaintiff has a valid and subsisting cause of action at the time his
action is commenced, the defect cannot be cured or remedied by the
acquisition or accrual of one while the action is pending, and a supplemental
complaint or an amendment setting up such after-accrued cause of action is
not permissible.

26
8. It is true that an amended complaint and the answer there to take the place
of the original which are thereby regarded as abandoned. But in none of the
cases have we held that if a right of action did not exist when the original
complaint was filed, one could be created by filing an amended complaint.
That which is no cause of action whatsoever cannot by amendment or
supplemental pleading be converted into a cause of action: Nihil de re
accrescit ei qui nihil in re quando jus accresceret habet.

27
Reinier Pacific International Shipping, Inc. v. Francisco Guevarra,
G.R. No. 157020, June 19, 2013

Facts:

Reinier Pacitic International Shipping, Inc. (Reinier Shipping), as agent of


Neptune Ship Management Services, PTE, Limited, hired respondent Captain
Francisco B. Guevarra to work as master of MY NOL SHEDAR. Reinier Shipping
sent him Notice, relieving him of command of the vessel upon the insistence of
its chatterers and owners. As a result, Guevarra filed a case for illegal dismissal
and damages against Reinier Shipping and its principal.

Reinier Shipping countered that Guevarra had been negligent in the


discharge of his duties as ship master. One of the vessel’s hatch covers was
damaged when it was discharging coal in Alabama, U.S.A. As a result, the
charterers were forced to shoulder the repair costs. Reinier had no choice but
yield to the demands of the chatterers for Guevarra’s replacement.

The Labor Arbiter found Guevarra’s dismissal illegal and ordered Reinier
Shipping and its principal to jointly and severally pay him his salaries for the
remaining balance of the contract plus attorney’s fees. The Labor Arbiter found
that Reinier Shipping denied Guevarra his right to due process since it did not
give him the opportunity to be heard. Guevarra claims that the damage to the
vessel had been caused by cargo-handling stevedores. Reinier Shipping did not
bother to ascertain his guilt; it merely invoked the demand of the chatterers and
vessel owners that he be replaced.

Reinier Shipping appealed to the National Labor Relations Commission


(NLRC) the latter affirmed the Labor Arbiter’s decision. The due date to file a
petition for special civil action of certiorari before the Court of Appeals (CA) fell
on July 26, 2002, a Friday, but Reinier Shipping succeeded in obtaining an
extension of 15 days, which period counted from July 26 began to run on July
27, a Saturday, and fell due on August 10, a Saturday. Reinier Shipping filed its
petition on the following Monday, August 12, 2002.

CA dismissed the petition for having been filed out of time. CA ruled that
the petitioner violated SC’s A.M. 00-2-14-SC. Since August 10, 2002, the last day
of the extended period, fell on a Saturday, automatic deferment to the next
working day did not apply and Reinier Shipping should have filed its petition
before August 10, a Saturday, considering that the court is closed on Saturdays.

28
Issue: Whether or not Reinier Shipping filed the present petition raising the issue
of whether or not the CA erred in dismissing its petition for having been filed out
of time.

Held: No.

A.M. 00-2-14-SC clarifies the application of Section 1, Rule 22 of the Rules


of Court when the last day on which a pleading is due falls on a Saturday,
Sunday, or legal holiday and the original period is extended. The clarification
states:

Whereas, the aforecited provision applies in the matter of filing of


pleadings in courts when the due date falls on a Saturday, Sunday, or legal
holiday, in which case, the filing of the said pleading on the next working day is
deemed on time;

Whereas, the question has been raised if the period is extended ipso jure
to the next working day immediately following where the last day of the period
is a Saturday, Sunday or legal holiday so that when a motion for extension of
time is filed, the period of extension is to be reckoned from the next working day
and not from the original expiration of the period.

The clarification provided in A.M. 00-2-14-SC actually covers a situation


where the due date falls on a Saturday, Sunday, or holiday. Precisely, what such
clarification wanted to address is the erroneous claim that "the period of
extension" in such a case "is to be reckoned from the next working day and not
from the original expiration of the period." The correct rule, according to the
clarification, is that "any extension of time to file the required pleading should x x
x be counted from the expiration of the period regardless of the fact that said
due date is a Saturday, Sunday or legal holiday."

That would unjustly deprive it of the full benefit of that extension. Since its
new due date fell on a Saturday when courts are close, however, the clear
language of Section 1, Rule 21, applies. The SC reverses the resolution of the CA.

29
Sps. Benedict and Sandra Manue vs. Ramon Ong,
G.R. No. 205249, October 15, 2014

Facts:

Ramon Ong filed with the Regional Trial Court, La Trinidad, Benguet, a
complaint for accion reinvindicatoria, Ong charged the spouses Benedict and
Sandra Manuel with having constructed improvements- through force,
intimidation, strategy, threats, and stealth – on a property he supposedly owned.
Summons was issued directed to the spouses. Per sheriff’s return on summons, On
February 12, 2010 an attempt was made to personally serve summons on the
spouses Manuel at their address in Lower Bacong, Loacan, Itogo, Benguet. The
spouses Manuel, however, requested that service be made at another time
considering that Sandra Manuel’s mother was critically ill. The sheriff’s return
further indicates that on March 16, 2010, another attempt at personal service
was made. After Sheriff Joselito Sales had personally explained to petitioner
Sandra Manuel the content of the summons and the complaint, the latte
refused to sign and receive the summons and the complaint. Sheriff Sales was
thus prompted to merely tender summons and complaint to petitioner Sandra
Manuel and to advise her to file their answer within fifteen (15) days. As the
spouses Manuel failed to file their answer within the 15 day period, Ong asked
that they be declared in default.

RTC granted both Ong’s Motion to declare the spouses Manuel in default
and his motion to move for the ex parte presentation of evidence. The Spouses
Manuel filed a motion to lift the order of default. They alleged that their
residence was at Ambiong La Trinidad, Benguet and it was Sandra Manuel’s
siblings who resides at Lower Bacong, Itogon, Benguet. Thus, according to them
the summons could not have been properly served.

RTC denied the spouses Manuel’s motion to lift order of default. The
motion for reconsideration subsequently filed by the spouses was also denied.

Aggrieved, the spouses Manuel filed a petition for certiorari before the
Court of Appeals.

The CA dismissed the Spouses Manuel’s petition for lack of merit. The
subsequent motion for reconsideration was also denied.

Issue : WON the Spouses Manuel may be granted relief from the RTC’s order of
default

30
Held : No.

As valid service of summons was made on them, it was incumbent upon


the spouses Manuel to file their answer within 15 days from receipt of the
summons or from March 1, 2012 pursuant to Rule 11 Section 1 of the 1997 Rule of
Court.

The following are the requisites which must be complied before a defending
party may be declared in default:

(1) the claiming party must file a motion asking the court to declare the
defending party in default;

(2) the defending party must be notified of the motion to declare him in default;
and

(3) the claiming party must prove that the defending party has failed to answer
within the period provided by the Rule.

All these requisites were complied with by respondent Ramon Ong. Not only
were the requisites for declaring a party in default satisfied, the motion to lift
order of default is also procedurally infirm.

The Motion to lift order of default was not made under oath and was not
accompanied by affidavit of merit specifying the facts which would show that
their non-filing of an answer
within 15 days was due to fraud, accident, mistake, or excusable negligence.

Furthermore Rule 15, Section 4 of the 1997 Rules of Court which requires that
service of a motion upon an
adverse party must be made in such a manner that ensures receipt by the latter
“at least 3 days before the date of Hearing”…. Was also violated as Spouses set
their motion to lift order of default for hearing on the same date that they filed it.

31
Planters Development Bank vs. Julie Chandumal, GR No. 195619 (2012)

Facts:

The instant case stemmed from a contract to sell a parcel of land,


together with improvements, between BF Homes, Inc. (BF Homes) and
respondent Julie Chandumal (Chandumal). The property subject of the
contract is located in Talon Dos, Las Piñas City and covered by a TCT. In 1993, BF
Homes sold to PDB all its rights, participations and interests over the contract.

Chandumal paid her monthly amortizations from December 1990-May


1994 when she began to default in her payments. In a Notice of Delinquency
and Rescission of Contract with Demand to Vacate in 1998, PDB gave
Chandumal a period of 30 days from receipt within which to settle her
installment arrearages together with all its increments; otherwise, all her rights
under the contract shall be deemed extinguished and terminated and the
contract declared as rescinded. Despite demand, Chandumal still failed to
settle her obligation.

In 1999, an action for judicial confirmation of notarial rescission and


delivery of possession was filed by PDB against Chandumal. PDB alleged that
despite demand, Chandumal failed and/or refused to pay the amortizations as
they fell due; hence, it caused the rescission of the contract by means of
notarial act, as provided in RA 6552. According to PDB, it tried to deliver the
cash surrender value of the subject property, as required under RA 6552, in the
amount of P 10,000; however, the she was unavailable for such purpose.

Consequently, summons was issued and served by deputy sheriff Roberto


T. Galing (Sheriff Galing). According to his return, Sheriff Galing attempted to
personally serve the summons upon Chandumal on July 15, 19 and 22, 1999 but
it was unavailing as she was always out of the house on said dates. Hence, the
sheriff caused substituted service of summons on August 5, 1999 by serving the
same through Chandumal’s mother who acknowledged receipt thereof. For her
failure to file an answer within the prescribed period, PDB filed in 2000 an ex
parte motion to declare her in default. In 2001, the RTC issued an Order granting
the motion of PDB.

Thereafter, Chandumal filed an Urgent Motion to Set Aside Order of


Default and to Admit Attached Answer. She maintained that she did not
receive the summons and/or was not notified of the same. She further alleged
that her failure to file an answer within the reglementary period was due to
fraud, mistake or excusable negligence. In her answer, Chandumal alleged the
following defenses: (a) contrary to the position of PDB, the latter did not make

32
any demand for her to pay the unpaid monthly amortization; and (b) PDB did
not tender or offer to give the cash surrender value of the property in an
amount equivalent to 50% of the actual total payment made, as provided for
under Section 3(b) of RA 6552. Moreover, she claimed that since the total
payment she made amounts to P 782,000, the corresponding cash surrender
value due her should be P 391,000.00.

The RTC denied Chandumal’s motion to set aside the order of default. Her
MR was also denied for lack of merit. Conformably, the RTC allowed PDB to
present its evidence ex parte. In 2004, the RTC rendered a Decision in favor of
PDB, declaring the notarial rescission of the Contract to Sell as judicially
confirmed and ratified; Requiring the plaintiff to deposit in the name of the
defendant the amount of P 10,000.00 representing the cash surrender value for
the subject property with the Land Bank of the Philippines; Ordering the
defendant to pay the plaintiff the amount of P 50,000.00 as and by way of
attorney’s fees, including the costs of suit. From the foregoing judgment,
Chandumal appealed to the CA.

In 2010, the CA, without ruling on the propriety of the judicial confirmation
of the notarial rescission, rendered the assailed decision nullifying the RTC
decision due to invalid and ineffective substituted service of summons.
PDB filed a MR but it was denied by the CA. Hence, this petition.

Issues: (1) WON there was a valid substituted service of summons;


(2) WON Chandumal voluntarily submitted to the jurisdiction of the trial
court; and
(3) WON there was proper rescission by notarial act of the contract to sell.

Held: (1) No.

The fundamental rule is that jurisdiction over a defendant in a civil case is


acquired either through service of summons or through voluntary appearance in
court and submission to its authority. If a defendant has not been properly
summoned, the court acquires no jurisdiction over its person, and a judgment
rendered against it is null and void. Where the action is in personam and the
defendant is in the Philippines, service of summons may be made through
personal service, that is, summons shall be served by handing to the defendant
in person a copy thereof, or if he refuses to receive and sign for it, by tendering it
to him. If the defendant cannot be personally served with summons within a
reasonable time, it is then that substituted service may be made. Personal
service of summons should and always be the first option, and it is only when the
said summons cannot be served within a reasonable time can the process
server resort to substituted service.

33
In this case, the sheriff resorted to substituted service of summons due to
his failure to serve it personally. In Manotoc v. CA, the Court detailed the
requisites for a valid substituted service of summons, summed up as follows: (1)
impossibility of prompt personal service – the party relying on substituted service
or the sheriff must show that the defendant cannot be served promptly or there
is impossibility of prompt service; (2) specific details in the return – the sheriff must
describe in the Return of Summons the facts and circumstances surrounding the
attempted personal service; (3) a person of suitable age and discretion – the
sheriff must determine if the person found in the alleged dwelling or residence of
defendant is of legal age, what the recipient’s relationship with the defendant
is, and whether said person comprehends the significance of the receipt of the
summons and his duty to immediately deliver it to the defendant or at least
notify the defendant of said receipt of summons, which matters must be clearly
and specifically described in the Return of Summons; and (4) a competent
person in charge, who must have sufficient knowledge to understand the
obligation of the defendant in the summons, its importance, and the prejudicial
effects arising from inaction on the summons.

In applying the foregoing requisites in the instant case, the CA correctly


ruled that the sheriff’s return failed to justify a resort to substituted service of
summons. According to the CA, the Return of Summons does not specifically
show or indicate in detail the actual exertion of efforts or any positive step taken
by the officer or process server in attempting to serve the summons personally to
the defendant. The return merely states the alleged whereabouts of the
defendant without indicating that such information was verified from a person
who had knowledge thereof. Indeed, the sheriff’s return shows a mere
perfunctory attempt to cause personal service of the summons on Chandumal.
There was no indication if he even asked Chandumal’s mother as to her specific
whereabouts except that she was "out of the house", where she can be
reached or whether he even tried to await her return. The "efforts" exerted by
the sheriff clearly do not suffice to justify substituted service and his failure to
comply with the requisites renders such service ineffective.

(2) YES.

Despite that there was no valid substituted service of summons, the Court,
nevertheless, finds that Chandumal voluntarily submitted to the jurisdiction of the
trial court. Section 20, Rule 14 of the Rules of Court states:

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

34
dismiss of other grounds aside from lack of jurisdiction over the person of the
defendant shall not be deemed a voluntary appearance.

When Chandumal filed an Urgent Motion to Set Aside Order of Default


and to Admit Attached Answer, she effectively submitted her person to the
jurisdiction of the trial court as the filing of a pleading where one seeks an
affirmative relief is equivalent to service of summons and vests the trial court with
jurisdiction over the defendant’s person. Thus, it was ruled that the filing of
motions to admit answer, for additional time to file answer, for reconsideration of
a default judgment, and to lift order of default with motion for reconsideration is
considered voluntary submission to the trial court’s jurisdiction. The Court notes
that aside from the allegation that she did not receive any summons,
Chandumal’s motion to set aside order of default and to admit attached
answer failed to positively assert the trial court’s lack of jurisdiction. In fact, what
was set forth therein was the substantial claim that PDB failed to comply with the
requirements of RA 6552 on payment of cash surrender value, which already
delves into the merits of PDB’s cause of action. In addition, Chandumal even
appealed the RTC decision to the CA, an act which demonstrates her
recognition of the trial court’s jurisdiction to render said judgment.

(3) NO, pursuant to Section 3(b), RA 6552

That the RTC had jurisdiction to render the decision does not necessarily
mean, however, that its ruling on the validity of the notarial rescission is in accord
with the established facts of the case, the relevant law and jurisprudence. PDB
claims that it has validly rescinded the contract by notarial act as provided
under RA 6552. Basically, PDB instituted the case in order to secure judicial
confirmation of the rescission and to recover possession of the property subject
of the contract. Thus, Sec. 3 (b) of the law provides that:

"If the contract is cancelled, the seller shall refund to the buyer the cash
surrender value of the payments on the property equivalent to fifty percent of
the total payments made and, after five years of installments, an additional five
percent every year but not to exceed ninety percent of the total payments
made: Provided, That the actual cancellation of the contract shall take place
after thirty days from receipt by the buyer of the notice of cancellation or the
demand for rescission of the contract by a notarial act and upon full payment
of the cash surrender value to the buyer."

R.A. No. 6552 recognizes the right of the seller to cancel the contract but
any such cancellation must be done in conformity with the requirements therein
prescribed. In addition to the notarial act of rescission, the seller is required to
refund to the buyer the cash surrender value of the payments on the property.

35
The actual cancellation of the contract can only be deemed to take place
upon the expiry of a 30-day period following the receipt by the buyer of the
notice of cancellation or demand for rescission by a notarial act and the full
payment of the cash surrender value.

In this case, it is an admitted fact that PDB failed to give Chandumal the
full payment of the cash surrender value. In its complaint, PDB admitted that it
tried to deliver the cash surrender value of the subject property as required
under RA 6552 but Chandumal was "unavailable" for such purpose. Thus, it
prayed in its complaint that it be ordered to "deposit with a banking institution in
the Philippines, for the account of Defendants, the amount of P10,000,
representing the cash surrender value of the subject property; The allegation
that Chandumal made herself unavailable for payment is not an excuse as the
twin requirements for a valid and effective cancellation under the law, i.e.,
notice of cancellation or demand for rescission by a notarial act and the full
payment of the cash surrender value, is mandatory. Consequently, there was no
valid rescission of the contract to sell by notarial act undertaken by PDB and the
RTC should not have given judicial confirmation over the same.

36
George Pidlip Palileo vs. Planters Development Bank G.R. No. 193650, October 8,
2014

Facts:

Petitioners filed a complaint for specific performance and/or sum of


money and damages with prayer for the issuance of writs of preliminary
attachment and preliminary injunction in RTC General Santos City against Engr.
Edgardo R. Torcende, Planters Development Bank (defendant Bank), Arturo R.
Delos Reyes, Benjamin N. Tria, Mao Tividad, and Emmanuel Tesalonia on 22
December 1998. During Pre-Trial conference defendant Bank manifested its
intention of settling the case amicably and several attempts to explore the said
settlement were made. In the last pre-trial hearing dated 17 November 2000,
only plaintiffs and their counsel appeared, thus, the latter moved for the
presentation of evidence ex-parte, which was granted by the trial court with the
reservation of verifying the return card to determine whether the order for the
pre-trial was indeed received by defendants. Finally, at the 21 November 2001
hearing, defendants again failed to appear and their failure to file pre-trial brief
was noted; thus plaintiffs were allowed to present evidence ex-parte before the
Clerk of Court.

The RTC ruled in favor of the petitioners (ex parte presentation of


evidence). On July 31, 2006, PDB filed by private courier service – specifically
LBC – an Omnibus Motion for Reconsideration and for New Trial, arguing therein
that the trial court’s Decision was based on speculation and inadmissible and
self-serving pieces of evidence; that it was declared in default after its counsel
failed to attend the pre-trial conference on account of the distance involved
and difficulty in booking a flight to General Santos City xxx Petitioners’ copy of
the Omnibus Motion for Reconsideration and for New Trial was likewise sent on
July 31, 2006 by courier service through LBC, but in their address of record – Tupi,
South Cotabato – there was no LBC service at the time. On August 2, 2006, PDB
filed with the RTC another copy of the Omnibus Motion for Reconsideration and
for New Trial via registered mail; another copy thereof was simultaneously sent to
petitioners by registered mail as well. Meanwhile, petitioners moved for the
execution of the Decision pending appeal.

On August 30, 2006, the RTC denied the Omnibus Motion for
Reconsideration and for New Trial, while it granted petitioners’ motion for
execution pending appeal, which it treated as a motion for the execution of a
final and executory judgment. It ruled the motion is pro forma for not having
complied with the Section5, Rule 15 of the Rules of Court. The respondent
received the RTC decision on September 14, 2006. Subsequently, a writ of
execution was issued in favour of the petitioners. On September 7, 2006, PDB

37
filed a Notice of Appeal (note that the notice of appeal was filed before it
received notice of the judgment sought to be appealed).

The respondent filed an original Petition for Certiorari with the Court of
Appeals which initially ruled for the invalidity of the filing of the motion and
upheld the validity of the motion for execution. However, the CA made a
complete turnaround when it ruled in favor of the motion for reconsideration of
the respondents. The CA reversed its original finding that the Omnibus Motion for
Reconsideration and for New Trial was pro forma. This time, it held just the
opposite, ruling that PDB’s “tacit argument” that the “distances involved in the
case at bench call for a relaxation of the application of Section 5, Rule 15 of the
Rules of Court” deserved consideration. It held that Section 5 should be read
together with Section 4 of the same Rule. The CA further sustained PDB’s
argument that since judgment against it was arrived at by mere default or
technicality, it is correspondingly entitled to a relaxation of the Rules, in line with
the principles of substantial justice.

Issues:
1) WON the Omnibus Motion for Reconsideration and for New Trial was
timely and validly filed.
2) WON the motion for execution granted by the RTC is proper.
3) WON the rules of procedure should be relaxed based on the grounds
asserted by the respondent bank.

Held:

1)No. The proceedings in the instant case would have been greatly abbreviated
if the court a quo and the CA did not overlook the fact that PDB’s Omnibus
Motion for Reconsideration and for New Trial was filed one day too late. The
bank received a copy of the trial court’s June 15, 2006 Decision on July 17, 2006;
thus, it had 15 days – or up to August 1, 2006 – within which to file a notice of
appeal, motion for reconsideration, or a motion for new trial, pursuant to the
Rules of Court. Yet, it filed the omnibus motion for reconsideration and new trial
only on August 2, 2006. Indeed, its filing or service of a copy thereof to
petitioners by courier service cannot be trivialized. Service and filing of
pleadings by courier service is a mode not provided in the Rules. This is not to
mention that PDB sent a copy of its omnibus motion to an address or area which
was not covered by LBC courier service at the time. Realizing its mistake, PDB re-
filed and re-sent the omnibus motion by registered mail, which is the proper
mode of service under the circumstances. By then, however, the 15-day period
had expired.
PDB’s Notice of Appeal, which was filed only on September 7, 2006, was tardy; it

38
had only up to August 1, 2006 within which to file the same. The trial court
therefore acted regularly in denying PDB’s notice of appeal.

2)Yes. There being no appeal taken by PDB from the adverse judgment of the
trial court, its Decision has become final and can no longer be reviewed, much
less reversed, by this Court. “Finality of a judgment or order becomes a fact
upon the lapse of the reglementary period to appeal if no appeal is perfected,
and is conclusive as to the issues actually determined and to every matter
which the parties might have litigated and have x x x decided as incident to or
essentially connected with the subject matter of the litigation, and every matter
coming within the legitimate purview of the original action both in respect to
matters of claim and of defense.” And “[i]n this jurisdiction, the rule is that when
a judgment becomes final and executory, it is the ministerial duty of the court to
issue a writ of execution to enforce the judgment;” “execution will issue as a
matter of right x x x (a) when the judgment has become final and executory; (b)
when the judgment debtor has renounced or waived his right of appeal; or (c)
when the period for appeal has lapsed without an appeal having been filed x x
x.”

Now, since the Court has herein declared that PDB’s omnibus motion may not
be considered for being tardy and for having been superseded by the bank’s
filing of a notice of appeal, then the CA’s original pronouncement must be
reinstated.

3) No. The Court cannot lend a helping hand to extricate the respondent from
the effects of its mistake; indeed, PDB erred more than once during the course
of the proceedings. For one, it did not attempt to set right its failure to appear
during pre-trial, which prompted the court to allow petitioners to present
evidence ex parte and obtain a favorable default judgment. Second, assuming
for the sake of argument that it timely filed its Omnibus Motion for
Reconsideration and for New Trial, it nonetheless violated the ten-day
requirement on the notice of hearing under Section 5 of Rule 15 (as ruled by the
RTC, the motion was set for hearing on August 18 or 16 days after its filing). Third,
even before it could be notified of the trial court’s resolution of its omnibus
motion on September 14, 2006 – assuming it was timely filed, it filed a notice of
appeal on September 7, 2006 – which thus implies that it abandoned its bid for
reconsideration and new trial, and instead opted to have the issues resolved by
the CA through the remedy of appeal. If so, then there is no Omnibus Motion for
Reconsideration and for New Trial that the trial court must rule upon; its August
30, 2006 Order thus became moot and academic and irrelevant. “[W]here [an
action] or issue has become moot and academic, there is no justiciable
controversy, so that a declaration thereon would be of no practical use or
value.”

39
Instead of properly pursuing its appeal to free itself from the unfavorable effects
of the trial court’s denial of its notice of appeal, PDB chose with disastrous results
to gamble on its Omnibus Motion for Reconsideration and for New Trial by filing
an original Petition for Certiorari to assail the trial court’s denial thereof. Time and
again, it has been said that certiorari is not a substitute for a lost appeal,
especially if one’s own negligence or error in one’s choice of remedy
occasioned such loss.

40
Virginia Dio vs. Subic Bay Marine Exploratorium, Inc.,
G.R. No. 189532, June 11, 2014

Facts:

Petitioner H.S. Equities, Ltd., (HSE) is a foreign corporation duly organized


and existing under the laws of the British Virgin Islands. Respondent, Subic Bay
Marine Exploratorium, Inc. (SBME) is a domestic corporation. BME decided to
expand its business by operating a beach resort inside the property
administered by the Subic Bay Metropolitan Authority (SBMA). HSE thru its
authorized director, Dio, agreed to invest the amount of US$2,500,000.00 with
SBME by purchasing common shares. After HSE made an initial payment for its
subscription, it refused to further lay out money due to the alleged
mismanagement in the handling of corporate funds. SBME initiated an intra-
corporate dispute before the RTC of Balanga City, Bataan against the
petitioners.

After petitioners filed their Answer with Compulsory Counterclaim, the RTC,
motu proprio dismissed the case. The dismissal was based on the defective
certificate of non-forum shopping which was signed by Desmond without
specific authority from the Board of Directors of SBME. The RTC denied
respondents’ motion for reconsideration and affirmed the dismissal. In refusing to
reinstate respondents’ complaint, the RTC ruled that the belated submission of a
board resolution evidencing Desmond’s authority to bind the corporation did
not cure the initial defect in the complaint. Respondents brought the matter
before the CA. For failure of the respondents to file their appellants’ brief, the CA
proceeded to dismiss and considered the case closed and terminated. The
dismissal became final and executory. Petitioners went back to the RTC to file a
motion to set their counterclaims for hearing. The RTC did not allow the
petitioners’ counterclaims to proceed independently of respondents’
complaint, in view of the dismissal of the main case, which has already been
affirmed with finality by the CA, it has already lost its jurisdiction to act on
petitioners’ counterclaim.

Issue: Whether or not the dismissal of the complaint (main case) results in the
dismissal of the counter claim.

Held: No.

The dismissal of the complaint does not carry with it the dismissal of the
counter claim. The present rule embodied in Sections 2 and 3 of Rule 17 ordains
an 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

41
the main complaint. As the rule now stands, the nature of the counterclaim
notwithstanding, the dismissal of the complaint does not automatically result in
the dismissal of the counterclaim, and the latter may remain for independent
adjudication of the court, provided that such counterclaim, states a sufficient
cause of action and does not labor under any infirmity that may warrant its
outright dismissal. The court’s authority to proceed with the disposition of the
counterclaim independent of the main action is premised on the fact that the
counterclaim, on its own, raises a novel question which may be aptly
adjudicated by the court based on its own merits and evidentiary support.

42
B. Sta. Rita & Co., Inc and Arlene Sta. Rita Kanapi v. Angeline Gueco
G.R. No.193078 August 28, 2013

Facts:

On October 2000, respondent Gueco purchased 4 parcels of land from B.


Sta. Rita through its then President Ben Sta. Rita covered by four titles in the
amount of P1 Million as evidenced by a deed of sale entered into by the parties.
In 2001, Gueco filed a petition for the surrender of the subject titles (surrender of
titles case) against B. Sta. Rita and its corporate officers Edgardo Kanapi. In their
Answer, B. Sta. Rita and Edgardo claimed that the sale transaction was a
conditional sale of the subject properties for the total consideration of P25
Million and it was only captioned as an absolute sale as for Gueco’s demand for
the purpose of obtaining funds to pay the required downpayment. Hence, B.
Sta. Rita prayed that the transaction be construed as a conditional sale and
that it be rescinded.

On July 2003, the heirs of late Ben Sta. Rita (Sta. Ritas), alleging that they
are stockholders of the company, filed a complaint for reformation and
rescission of the contract and queting of title (reformation case) against Gueco.
They also moved to intervene in the surrender of titles case filed by Gueco
which the trial court granted. On her part, Gueco moved to dismiss the
reformation case on the ground that the Sta. Ritas are not parties to the subject
deed and therefore had no legal personality to seek reformation. However it
was denied by the lower court, as well as her motion for reconsideration
prompting her to elevate the case to CA via a petition for certiorari (certiorari
case). On November 2003, the surrender of titles case and the reformation case
were then consolidated in the trial court. Subsequently on March 2004, Petitioner
Arlene Sta. Rita Kanapi and the heir of Edgardo Kanapi filed a complaint in
intervention claiming that she is also a stockholder and director of the company
which the trial court admitted.

On July 2004, the CA rendered its decision in the certiorari case, dismissing
the reformation case due to the Sta. Ritas’ lack of legal personality to file a
derivative suit. The CA found that while the Sta. Ritas may be shareholders of B.
Sta. Rita at the time of the institution of their complaint against Gueco, their
rights did not antedate nor coincide with the date of the questioned sale.
Moreover, records are bereft of any showing that they had made any prior
demand upon the Board of Directors of B. Sta. Rita to institute a case to preserve
any corporate property which is a requirement for a derivative suit. Hence, the
trial court proceeded to hear the surrender of titles case independently of the
reformation case. And on December 2005, it decided to rescind the sale as it
found that the parties did not intend to enter into a contract of sale but a mere

43
contract to sell. Dissatisfied, Gueco again elevated the case to the CA, and on
2010, CA reversed and set aside the decision of the RTC and ruled that res
judicata had already set in because the surrender of titles case and the
reformation case bear the same issue and that is the rescission of the contract.

Due to the CA’s adverse ruling, Arlene, for herself and purportedly on
behalf of B. Sta. Rita, moved for reconsideration, maintaining that res judicata
cannot apply, there being no identity of parties as she was not one of the
original plaintiffs in the dismissed reformation case. Gueco opposed Arlene’s
motion, pointing out that the latter filed a complaint-in-intervention in the
reformation case and, as a result of its dismissal, the aforementioned complaint
was necessarily discharged. Eventually, Arlene’s motion for reconsideration was
denied.

Issue: Whether or not the dismissal of the reformation case on the ground of
legal personality of the original plaintiffs (Sta. Ritas) affected the complaint-in-
intervention filed by Arlene.

Held:

Yes. Arlene and the Heirs of Edgardo do not have any legal personality to
appeal the CA Decision before the Supreme Court since: first, they were only
intervenors in the reformation case which had already been dismissed by the
Court with finality; and second, they were not parties in the surrender of titles
case.

With respect to the first incident, it bears to stress that Arlene’s and the
Heirs of Edgardo’s complaint-in-intervention in the dismissed reformation case
had been effectively discharged since the principal complaint therein had
already been terminated with finality. Clearly, their complaint-in-intervention
cannot be treated as an independent action as it is merely an ancillary to and
a supplement of the principal action. In other words, the complaint-in-
intervention essentially latches on the complaint for its legal efficacy so much so
that the dismissal of the complaint leads to its concomitant dismissal. Applying
these principles to this case therefore lead to the conclusion that the dismissal of
the main complaint in the reformation case necessarily resulted in the dismissal
of Arlene’s and the Heirs of Edgardo’s complaint-in-intervention lodged in the
same case.

Anent the second incident, records disclose that Arlene or the Heirs of
Edgardo were not parties – either as defendants or intervenors – in the surrender
of titles case nor did they, in any manner, participate in the proceedings of the
same. It is a standing rule that no person shall be adversely affected by the

44
outcome of a civil action or proceeding in which he is not a party. In this light, it
cannot be gainsaid that Arlene and the Heirs of Edgardo cannot be adversely
affected by the outcome of the surrender of titles case and, as such, cannot
therefore interpose an appeal therefrom.

45
Eloisa Merchandising, Inc. vs. Banco De Oro Universal Bank, G.R. No. 192716,
June 13, 2012
Facts:

In 1993, Eloisa Merchandising, Inc. (EMI) executed in favor of Banco de


Oro Universal Bank (BDO) a real estate mortgage (REM) over its properties
located at No. 129 Neptune St., Bel-Air Village II, Makati City to secure the
principal obligation totalling P29.9 Million drawn from the Credit Line Agreement
of EMI and Term Loan Agreement of Trebel International, Inc. (Trebel). EMI
likewise executed a Continuing Suretyship in favor of BDO to secure the credit
accommodation extended by BDO to petitioner’s affiliate, Trebel.

In January 2002, BDO initiated extrajudicial foreclosure proceedings


before the Office of the Ex-Officio Sheriff of the Regional Trial Court (RTC) of
Makati City. Accordingly, a notice was issued setting the auction sale of the
mortgaged property on March 7, 2002.

Before the auction date, petitioners EMI and Treble filed a Complaint for
Annulment of Real Estate Mortgage, Injunction & Damages in the RTC. BDO filed
a motion to dismiss on the ground of lack of cause of action, which was denied.
BDO filed its Answer. The case was set for pre-trial conference.

In the meantime, the foreclosed property was sold at auction and the title
over the property was consolidated in favor of BDO as the winning biddder. The
Register of Deeds of Makati issued new titles in the name of BDO.

For failure of the petitioners to appear despite due notice at the


scheduled pre-trial conference on January 12, 2004, the case was ordered
dismissed. In their motion for reconsideration, petitioners’ counsel claimed that
his failure to attend was due to his accidental falling on the stairs of his house in
the morning of January 12, 2004, due to which he had to be attended by a
“hilot”.

The trial court reconsidered the dismissal and scheduled anew the pre-trial
conference on June 29, 2004, which date was subsequently reset to August 3,
2004. Petitioners again failed to appear on the re-scheduled pre-trial
conference on August 3, 2004. Consequently, the trial court dismissed the case
pursuant to Section 5, Rule 18 of the Rules of Court. On December 29, 2004,
upon motion for reconsideration by the petitioner's counsel, the trial court
reinstated the case “in the interest of justice”.

In an Order dated September 20, 2005, the trial court dismissed the case
for failure of petitioners to prosecute their case. Citing the two previous dismissals

46
on account of petitioners’ non-appearance at the pre-trial conference, the trial
court said that “from the date of its second reconsideration of the order of
dismissal on December 29, 2004 until today, plaintiffs did not do anything to
prosecute the instant case.”

The trial court denied petitioner's motion for reconsideration. On appeal


by petitioners, the Court of Appeals affirmed the trial court’s dismissal of the
case. Hence, the present petition.

Petitioners contend that the only reason for the trial court’s dismissal of the
case was the failure of their counsel to move to set the case for pre-trial.
However, Section 1, Rule 18 of the 1997 Rules of Civil Procedure, as amended,
imposing upon the plaintiff the duty to promptly move to set the case for pre-
trial, had been repealed and amended by A.M. No. 03-1-09-SC which took
effect on August 16, 2004. This amendment now imposes on the clerk of court
the duty to issue a notice of pre-trial if the plaintiff fails to file a motion to set the
case for pre-trial conference.

Petitioners also point out that the case was not yet ripe for pre-trial
because of the unresolved pending motion for reconsideration of the trial
court’s denial of the motion to admit supplemental complaint.

Issue: Whether or not petitioners’ failure to move for the setting of the case for
pre-trial conference and for their repeated non-appearance at the pre-trial
conference are sufficient grounds for the trial court to finally dismiss the
complaint

Held: Dismissal of the case on the ground of failure to prosecute for an


unreasonable length of time.

1. Under Section 3, Rule 17 of the 1997 Rules of Civil Procedure, as amended, the
failure on the part of the plaintiff, without any justifiable cause, to comply with
any order of the court or the Rules, or to prosecute his action for an
unreasonable length of time, may result in the dismissal of the complaint either
motu proprio or on motion by the defendant.

2. The failure of a plaintiff to prosecute the action without any justifiable cause
within a reasonable period of time will give rise to the presumption that he is no
longer interested to obtain from the court the relief prayed for in his complaint;
hence, the court is authorized to order the dismissal of the complaint on its own
motion or on motion of the defendants.

3. The presumption is not, by any means, conclusive because the plaintiff, on a

47
motion for reconsideration of the order of dismissal, may allege and establish a
justifiable cause for such failure. The burden to show that there are compelling
reasons that would make a dismissal of the case unjustified is on the petitioners.

The trial court did not abuse its discretion when it dismissed the case for failure to
prosecute

4. Even if the plaintiff fails to promptly move for pre-trial without any justifiable
cause for such delay, the extreme sanction of dismissal of the complaint might
not be warranted if no substantial prejudice would be caused to the defendant,
and there are special and compelling reasons which would make the strict
application of the rule clearly unjustified. (Olave v. Mistas)

5. In this case, while there was no substantial prejudice caused to herein


respondent BDO, who has already consolidated the ownership of petitioners’
properties, secured new titles in its name and successfully implemented a writ of
possession issued by another branch, there was neither patent abuse in the trial
court’s dismissal of the complaint for the third time, the earlier two dismissals
having been precipitated by petitioners’ non-appearance at the pre-trial
conference. Contrary to petitioners’ assertion, the trial court did not find their
offered excuses as meritorious or justifiable; the trial court in the exercise of
discretion simply reinstated the case “in the interest of justice” but explicitly
warned petitioners to be more circumspect in attending to the case.

48
Republic vs. Sandiganbayan, G.R. No. 112710, May 30, 2001

Facts:

On July 17, 1987, Republic represented by the Philippine Commission for


Good Government, filed before the Sandiganbayan a complaint for restitution
and damages against 26 individuals, including Lucio C. Tan, Ferdinand E.
Marcos, and Imelda R. Marcos, among others. It charged the Marcoses of a
systematic plan accumulating wealth during their term as President and First
Lady of the Republic, which includes conspiring with their cronies. The first set of
defendants have filed their answer to the complaint.

In 1991, a "Motion for Leave to Amend and for Admission of Second


Amended Complaint" was filed, containing an attachment of a "Second
Amended Complaint" to substitute defendant Ferdinand Marcos with his estate,
President Marcos having died pendente lite, and include as additional
defendants three (3) individuals who allegedly participated in the Marcoses'
accumulation of ill-gotten wealth, plus forty-two (42) corporations believed to
be beneficially owned or controlled by the Lucio Tan group of business
associates of the former President.

The motion was granted and the court ordered the issuance of
summonses to the newly-impleaded defendants except the Estate of Ferdinand
E. Marcos which merely substituted the deceased Ferdinand E. Marcos, an
original defendant. Most of the second set of defendants filed a motion for a bill
of particulars instead of an answer.

In 1993, petitioner filed a "Motion for Leave To Take the Deposition of


Rolando C. Gapud Upon Oral Examination in the Crown Colony of Hongkong."
Petitioner alleged that Mr. Rolando C. Gapud, former financial adviser of
President Marcos and his wife, was willing to testify on matters relevant to the
subject of the case. The same was opposed, and the Sandiganbayan denied
the said motion to take deposition on the ground of prematurity, since not all
defendants have been summoned or have filed their answers to the complaint,
and no special circumstances existed that warranted the taking of the
deposition before service of answers.

Issue: Whether or not the motion to take deposition should be granted to take
Mr. Gapud’s testimony.

49
Held: No.

Leave of court is not necessary to take a deposition after an answer to the


complaint has been served. It is only when an answer has not yet been filed (but
jurisdiction has been obtained over any defendant or over property subject of
the action) that prior leave of court is required. The reason for this is that before
filing of the answer, the issues are not yet joined and the disputed facts are not
clear.

Petitioner claims, however, that the taking of Mr. Gapud's deposition does
not require prior leave of court because Section 1, Rule 24 states that a
deposition may be taken after jurisdiction has been obtained over ANY
defendant. However, the case involves two (2) sets of defendants: (1) those in
the original complaint and (2) those in the Second Amended Complaint. And as
culled from the facts, not all of the second set of defendants filed an answer.

Petitioner claims, however, that despite nonjoinder of issues, there exist


special circumstances that warrant the taking of Mr. Gapud's deposition.
However, the general rule is that a plaintiff may not be permitted to take
depositions before answer is served. Plaintiff must await joinder of issues because
if the discovery is to deal with matters relevant to the case, it is difficult to know
exactly what is relevant until some progress has been made toward developing
the issues. Ordinarily, the issues are made up before the need for discovery
arises, hence, prior to the time of delineation of the issues, the matter is in the
control of the court.

To be sure, there are instances when a deposition is allowed to be taken


before service of answer once jurisdiction has been acquired over the person or
thing. Leave of court may be granted only in "exceptional" or "unusual"
cases, and the decision is entirely within the discretion of the court. It should be
granted only under "special circumstances" such as age, infirmity, or when the
prospective deponent is about to leave the court's jurisdiction, or is only
temporarily in the jurisdiction, leave may be granted. A general examination by
deposition before answer however is premature and ordinarily not
allowed, neither is mere avoidance of delay a sufficient reason.

In this case, Petitioner has not cited any fact other than Mr. Gapud's
cooperation with the Philippine government in the recovery of ill-gotten wealth
that would support the deponent's claim of fear for his safety. No proof, much
less any allegation, has been presented to show that there exists a real threat to
Mr. Gapud's life once he returns to the Philippines and that adequate security
cannot be provided by petitioner for such a vital witness.

50
Hence, Petitioner has not sufficiently shown the necessity for taking Mr.
Gapud's deposition at this point in time before the other defendants have
served their answers.

51
Eagle Ridge Development Corp., vs. Cameron Granville 3 Asset
Management, Inc., G.R. No. 204700, November 24, 2014

Facts:

Cameron Granville 3 Asset Management, Inc. (respondent; CGAM) filed


the subject motion for reconsideration from the April 10, 2013 Supreme Court
decision, which reversed and set aside the Court of Appeals' resolutions and
ordered respondent to produce the Loan Sale and Purchase Agreement (LSPA)
dated April 7, 2006, including all of its annexes in order that petitioners be able
to inspect and photocopy the said document.

Averments of Respondent
Respondent argued that petitioners Eagleridge Development
Corporation, Marcelo N. Naval and Crispin I. Oben (petitioners; EDC) filed their
motion for discovery mode of production way past time, and beyond the
extended pre-trial period from September 2005 to 2011. Hence, as asserted by
the respondent, the denial of the trial court of the said motion for discovery was
simply just.

Respondent further submitted that it is Republic Act No. 9182 or the


Special Purpose Vehicle Act that is applicable and not Article 1634 of the Civil
Code to the case. Nonetheless, for arguendo that Article 1634 is applicable,
respondent maintained that the petitioners were significantly seven (7) years
late in extinguishing petitioner EDC’s loan obligation because pursuant to Article
1634, respondents aver, that the petitioners should have exercised their right of
extinguishment within 30 days from the substitution of Export and Industry Bank or
EIB (the original creditor) by respondent in December 2006. This is without, yet,
the petitioners’ liability to pay the whole of petitioner Eagleridge Development
Corporation’s loan obligation of P10,232,998.00 exclusive of interests and
damages.

In addition, respondent also contended that the LSPA is a privileged and


confidential bank document hence its insistence of refusal to comply.

As final argument, respondent pointed out that the petitioners cannot use
the contents of the LSPA in pursuing the case against the respondent whilst
thereafter refuting the integrity of the deed of assignment and legal personality
of respondent CGAM as the real party-in-interest to sue the petitioners.
According to respondent, the trial court order granting the substitution
constituted sufficient judicial demand as contemplated under Article 1634 and
has settled the issue of respondent’s standing before the court and its right as an

52
assignee to fill in the shoes of EIB. Nonetheless, respondent maintained that the
LSPA is immaterial or irrelevant to the case.

Opposition of the petitioners


Petitioners, on the other hand, contended that their motion for production
was not filed out of time, and that the Rules of Court provide no proscription as
to the filing motions for production beyond the pre-trial as proclaimed by the
respondent.

Further, petitioners asserted that assuming there was a valid transfer of the
loan obligation of petitioner EDC, Article 1634 of the Civil Code remains
applicable and, therefore, petitioners must be informed of the actual transfer
price supplied by the LSPA. Petitioners argued that the substitution of respondent
in the case a quo was not sufficient demand as contemplated under the law
hence respondent’s failure to inform petitioner EDC of the price it paid for the
transfer of the loan obligation proscribed by law. Additionally, petitioners
contended that the respondent was not a party to the deed of assignment, but
Cameron Granville Asset Management (SPV-AMC).

As to respondent’s insistence that the LSPA is privileged and confidential,


petitioners averred that the parties fall under the enumerations provided in Rule
130, Section 124 of the Rules of Court that would exempt the respondent from
disclosing the document.

Accordingly, petitioners clarified through its rejoinder that it is their


consistent position to seek to assail the validity of the deed of assignment but
alternatively invoke the application of Article 1634 should the court uphold the
validity of the transfer of their alleged loan obligation. And invoking Rule 8,
Section 2 of the Rules of Court, petitioners contended that the Rules permit
parties to set forth such alternative causes of action or defenses.

Issues:
I. Whether or not the motion for the discovery mode of production was filed out
of time.
II. Whether Eagleridge Development Corporation (EDC) failed to exercise their
right of extinguishment of debt and thus cannot exercise the same.
III. Whether the Loan Sale and Purchase Agreement (LSPA) is a privileged and
confidential document.
IV. Whether the petitioners cannot claim the validity and invalidity of the deed
of assignment at the same time.

Held: Motion for reconsideration is denied.

53
I. NO. The discovery mode of production of documents may be availed of even
beyond the pre-trial upon showing of good cause. Rule 27 of the Rules of Court
does not provide for any time frame within which the discovery mode of
production or inspection of documents can be utilized. The rule only requires
leave of court "upon due application and a showing of due cause."

In a catena of cases, the Supreme Court has held that since the rules are silent
as to the period within which modes of discovery may still be requested and
that there is no prohibition to its application after pre-trial, it is necessary to
determine: (1) the purpose of discovery; (2) whether, based on the stage of the
proceedings and evidence presented thus far, allowing it is proper and would
facilitate the disposition of the case; and (3) whether substantial rights of parties
would be unduly prejudiced.

The Supreme Court has proclaimed that the use of discovery is encouraged, for
it operates with desirable flexibility under the discretionary control of the trial
court. More so, it has been laid down that the evident purpose of discovery
procedures is "to enable the parties, consistent with recognized privileges, to
obtain the fullest possible knowledge of the issues and facts before civil trials"
and, thus, facilitating an amicable settlement or expediting the trial of the case.

II. NO. Petitioners’ right to extinguish their debt under Article 1634 on assignment
of credits has not yet lapsed. Under the last paragraph of Article 1634, the
debtor may extinguish his or her debt within 30 days from the date the assignee
demands payment. In this case, no demand has yet been made, hence, the 30-
day period did not begin to run. It is important for petitioners to determine for
sure the proper assignee of the EIB credit or who to pay, in order to effectively
extinguish their debt.

Evidently, at the time petitioners assailed the validity of the deed of assignment,
it referred to SPV-AMC as the assignee, and not respondent CGAM. The law
requires that payment should be made only to the person in whose favor the
obligation has been constituted, otherwise, payment is not effective which will
bind the creditor or release the debtor from the obligation to pay.

Even assuming that respondent is the proper assignee, petitioners could not
exercise their right of extinguishment because they were not informed of the
consideration paid for the assignment. Pursuant to Article 1634 of the Civil Code,
respondent is obligated to disclose how much it paid to acquire the EIB credit,
so that petitioners could make the corresponding offer to pay, by way of
redemption, the same amount in final settlement of their obligation.cUnder the
circumstances of this case, the 30-day period under Article 1634 within which
petitioners could exercise their right to extinguish their debt should begin to run

54
only from the time they were informed of the actual price paid by the assignee
for the transfer of their debt.

III. NO. The LSPA is not privileged and confidential document. Although, Rule 27
provide that the documents sought to be produced and inspected must not be
privileged against disclosure, nevertheless, the parties to the deed of assignment
does not fall under the categories provided for in Rules 130, Section 24 which
enumerates and describes the types of privileged communication: “(a)
between husband and wife; (b) between attorney and client; (c) between
physician and patient; (d) between priest and penitent; and (e) public officers
and public interest.” Moreover, the privilege is not absolute. The court may
compel disclosure where it is indispensable for doing justice.

IV. YES. The Rules are clear: the parties are allowed to setup alternative defenses
as provided for under Rule 8, Section 2 of the Rules of Court.

55
Teofilo Adolfo vs. Fe Adolfo, G.R. No. 201427, March 18, 2015

Facts:

Petitioner Teofilo Adolfo filed with the RTC Mandaue a Petition 7 for judicial
separation of property against his estranged wife, respondent Fe Adolfo. The
petition alleged that the parties were married on November 26, 1966; that the
union bore one child; that during the marriage, they acquired through conjugal
funds a certain lot in Brgy. Cabancalan, Mandaue City, Cebu. Subsequently,
the parties separated due to irreconcilable differences. Hence, petitioner
suggested a separation of the conjugal property, but respondent refused and
even denied petitioner’s co-ownership of the subject property because the
same was her paraphernal property. Petitioner thus prayed that judgment be
rendered decreeing a separation of the conjugal property and the subdivision
or sale thereof, to the end of dividing the same or the proceeds thereof.

Respondent claimed in her Answer that the subject property was a


portion of a bigger lot owned by her mother Petronila Tudtud. Her mother
executed a quitclaim deed transferring a portion of the mother lot – the subject
property – to respondent. Respondent then sold the subject property to her
brother and a new TCT was issued in her brother’s name. Her brother then
mortgaged the property to Development Bank of the Philippines (DBP), which
foreclosed on the same. TCT 18231 was issued in DBP’s name. DBP then sold the
property to the spouses Antonio and Lucy Garcia (the Garcias), and TCT 18266
was in turn issued in their name. Finally, on May 25, 1983, the Garcias sold back
the subject property to respondent, and a new title – TCT 1836810 – was then
issued in the name of respondent “FE M. TUDTUD,
(Civil Case No. MAN-2683)

In 1996, respondent’s sister Florencia Tudtud and her husband Juanito


Gingoyon (the Gingoyons) filed a case for partition with damages against
respondent. The Complaint13 therein alleged that in 1988, respondent executed
a deed of sale in favor of the Gingoyons over a 300-square meter portion of the
subject property, but that respondent refused to partition/subdivide the same.
For her defense, respondent claimed in her Answer14 that when the sale to the
Gingoyons was made, the subject property constituted conjugal property of her
marriage with petitioner. The trial court rendered its Decision declaring that the
subject property constituted conjugal property of the marriage. It thus nullified
the 1988 deed of sale executed by respondent in favor of the Gingoyons for
lack of consent on the part of petitioner.
The Gingoyons then filed an appeal with the CA.

56
Motion for Judgment Based on the Pleadings in Civil Case No. MAN-4821

Petitioner filed a Motion for Judgment Based on the Pleadings,18 stating


that since respondent failed to answer his request for admission, the matters
contained in the request are deemed admitted pursuant to Rule 26, Section 2 of
the 1997 Rules of Civil Procedure19 (1997 Rules); that as a consequence of the
application of the rule, respondent is in effect considered to have admitted that
the subject property is a conjugal asset of their subsisting marriage which may
thus be the subject of his petition for judicial separation of property; and that on
account of said admission, a hearing on the merits becomes unnecessary and,
instead, Rule 3420 of the 1997 Rules on judgments on the pleadings should
apply. Petitioner thus prayed that the trial court render judgment in his favor
based on the pleadings.
Branch 55 issued an Order24 granting petitioner’s motion for judgment on the
pleadings. Respondent instituted an appeal with the CA, which was graned.

Issue: Whether or not the Court of Appeals erred in deciding the case in
violation of Rule 26 of the 1997 Rules.

Held: The Court of Appeals is correct.

Judgment on the pleadings is proper “where an answer fails to tender an issue,


or otherwise admits the material allegations of the adverse party’s
pleading.”43 Summary judgment, on the other hand, will be granted “if the
pleadings, supporting affidavits, depositions, and admissions on file, show that,
except as to the amount of damages, there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment as a matter of
law.”ralawred

There are basic distinctions between summary judgment and judgment on the
pleadings:
The existence or appearance of ostensible issues in the pleadings, on the one
hand, and their sham or fictitious character, on the other, are what distinguish a
proper case for summary judgment from one for a judgment on the
pleadings. In a proper case for judgment on the pleadings, there is no
ostensible issue at all because of the failure of the defending party’s answer to
raise an issue. On the other hand, in the case of a summary judgment, issues
apparently exist ? i.e. facts are asserted in the complaint regarding which there
is as yet no admission, disavowal or qualification; or specific denials or
affirmative defenses are in truth set out in the answer?but the issues thus arising
from the pleadings are sham, fictitious or not genuine, as shown by affidavits,
depositions, or admissions.awlawlibrary

57
While it is true that a judgment cannot bind persons who are not parties to the
action, petitioner cannot, after invoking the proceedings in Civil Case No. MAN-
2683 to secure affirmative relief against respondent and thereafter failing to
obtain such relief, be allowed to repudiate or question the CA’s ruling in CA-G.R.
CV No. 78971. The principle of estoppel bars him from denying the resultant
pronouncement by the appellate court, which became final and executory,
that the subject property is respondent’s paraphernal property. “In estoppel, a
person, who by his deed or conduct has induced another to act in a particular
manner, is barred from adopting an inconsistent position, attitude or course of
conduct that thereby causes loss or injury to another. It further bars him from
denying the truth of a fact which has, in the contemplation of law, become
settled by the acts and proceeding of judicial or legislative officers or by the act
of the party himself, either by conventional writing or by representations, express
or implied or in pais.”red

58
Philippine Business Bank vs. Chua, 15 November 2010

Facts:

Tomas Tan (Tan), a stockholder and director/Treasurer of CST Enterprises,


Inc. (CST), filed a derivative suit for the Declaration of Unenforceability of
Promissory Notes and Mortgage, Nullity of Secretary’s Certificate, Injunction,
Damages with Prayer for the Issuance of Temporary Restraining Order/Writ of
Preliminary Injunction against PBB, respondent Felipe Chua and several others. In
Tan’s amended complaint, he alleged that before he went abroad for medical
treatment, he turned over to respondent Chua, a director and the President of
CST, the original copies of Transfer Certificate of Title Nos. 124275 and 157581,
titles to lands owned by, and registered in the name of, CST. Subsequently, the
respondent informed him that CST’s properties had been fraudulently used as
collateral for loans allegedly taken out in CST’s name, but without proper
authority from CST stockholders and/or the Board of Directors.

PBB’s Amended Answer also included a cross-claim against respondent


Chua, demanding payment of the promissory notes he signed as co-maker with
John Dennis Chua.

In respondent Chua’s Answer to the Cross-Claim of PBB, he claimed that


he never applied for a loan with the PBB. He further denied authorizing John
Dennis Chua to apply for any loans in CST’s name, or to use CST properties as
security for any loans. Nevertheless, he admitted that he signed, as co-maker, six
promissory notes covering the loans obtained by John Dennis Chua with PBB.
According to respondent Chua, he executed these promissory notes after the
loans had already been consummated, "in a sincere effort to persuade John
Dennis Chua to pay off the unauthorized loan and retrieve from cross-claimant
PBB the CST titles."

PBB subsequently filed a Motion for Partial Summary Judgment based on


Section 1, Rule 35 of the 1997 Rules of Civil Procedure (Rules), claiming that since
respondent Chua already admitted the execution of the promissory notes in
favor of PBB amounting to Seventy Five Million Pesos (P75,000,000.00), insofar as
its cross-claim against him was concerned, there was no genuine issue on any
material fact on the issue of his liability to PBB. RTC issued a partial summary
judgment on PBB’s cross-claim, finding respondent Chua liable as a signatory to
the promissory notes. RTC ruled that respondent Chua could not file a notice of
appeal. Instead, he should have filed a special civil action for certiorari under
Rule 65 of the Rules. However, since the period for filing a certiorari petition had
already lapsed without respondent filing any petition, the partial summary

59
judgment had become final and executory. Thus, it ordered the issuance of a
writ of execution for the satisfaction of the partial summary judgment in favor of
PBB.

CA issued the assailed decision, partly affirming the RTC order on the
matter of the disallowance of respondent Chua’s appeal. The CA held that
respondent Chua could not appeal the partial summary judgment while the
main case remained pending, in keeping with Section 1(g), Rule 41 of the Rules.
However, the CA held that the RTC committed grave abuse of discretion when
it issued the writ of execution against respondent Chua.

Issue: WON a Partial Summary Judgment is in the nature of a final judgment for
an appeal to be proper.

Held: NO. A Partial summary judgment (R35, S4) is an interlocutory order.

This partial summary judgment did not dispose of the case as the main
issues raised in plaintiff Tomas Tan’s complaint, i.e., the validity of the secretary’s
certificate which authorized John Dennis Chua to take out loans, and execute
promissory notes and mortgages for and on behalf of CST, as well as the validity
of the resultant promissory notes and mortgage executed for and on behalf of
CST, remained unresolved. PBB has a common cause of action against
respondent Chua with his alleged co-debtors, John Dennis Chua and CST, it
would simply not be proper to treat respondent Chua separately from his co-
debtors.

The SC affirmed the CA’s ruling that the partial summary judgment is an
interlocutory order which could not become a final and executory judgment,
notwithstanding respondent Chua’s failure to file a certiorari petition to
challenge the judgment. Accordingly, the RTC grievously erred when it issued
the writ of execution against respondent Chua. A summary judgment, or
accelerated judgment, is a procedural technique to promptly dispose of cases
where the facts appear undisputed and certain from the pleadings, depositions,
admissions and affidavits on record, or for weeding out sham claims or defenses
at an early stage of the litigation to avoid the expense and loss of time involved
in a trial. When the pleadings on file show that there are no genuine issues of
fact to be tried, the Rules allow a party to obtain immediate relief by way of
summary judgment, that is, when the facts are not in dispute, the court is
allowed to decide the case summarily by applying the law to the material facts.

The Rules provide for a partial summary judgment as a means to simplify


the trial process by allowing the court to focus the trial only on the assailed facts,
considering as established those facts which are not in dispute. After this sifting

60
process, the court is instructed to issue an order, the partial summary judgment,
which specifies the disputed facts that have to be settled in the course of trial. In
this way, the partial summary judgment is more akin to a record of pre-trial, an
interlocutory order, rather than a final judgment. A final judgment or order is one
that finally disposes of a case, leaving nothing more to be done by the Court in
respect thereto. The partial summary judgment rendered by the trial court being
merely interlocutory and not ‘a final judgment’, it is puerile to discuss whether
the same became final and executory due to the alleged failure to appeal said
judgment within the supposed period of appeal. What the rules contemplate is
that the appeal from the partial summary judgment shall be taken together with
the judgment that may be rendered in the entire case after a trial is conducted
on the material facts on which a substantial controversy exists. This is on the
assumption that the partial summary judgment was validly rendered.

61
People v. Andy Zulieta a.k.a. "Bogarts," G.R. No. 192183, November 11, 2013

Facts:

On June 13, 2006, at 10:00 in the evening, the victim, Armand Labando, Jr.
(Armand) and his companion Bryan Pascua (Pascua) were outside their
boarding house seated at a sari-sari store. Suddenly, accused-appellant
together with two others while holding a pitcher approached Armand and
Bryan. Accused-appellant dropped the pitcher in front of Armand and Pascua.
The two (Armand and Pascua) immediately stood up, and then one of the
companions of accused-appellant told the latter to hit Armand. Subsequently,
accused-appellant pulled out a Batangas knife and stabbed Armand at the
chest. The latter was brought to the hospital, but died. It was found out that the
stab wound was the cause of the death.

Accused-appellant was charged with the crime of murder. Accused-


appellant posited the defense that he could not be convicted, because he was
not at the place of the crime when the same was committed and that he was
with his wife during that time. He further alleged that even assuming that he
committed murder, the commission cannot be said to have been attended by
treachery. Accused-appellant mainly argues that the prosecution failed to
prove his guilt beyond reasonable doubt. Accused-appellant’s allegations were
corroborated by his wife. The trial court convicted accused-appellant as
charged. The appellate court affirmed the decision of the trial court. Hence, the
present recourse.

Issue/s: Whether or not accused-appellant is properly convicted of the crime of


murder.

Ruling: Yes.

Accused-appellant’s alibi, being inherently weak, does not deserve


credence especially when compared with the positive identification by witness
Pascua of the accused-appellant as the perpetrator of the crime. Moreover, the
allegations of accused-appellant were not corroborated by any other witness
beside his wife who is held to be biased and thus, whose allegations are
considered to be self-serving. Moreover, accused-appellant failed to prove that
it was physically impossible for him to be present at the crime scene at the time
of its commission. As observed by the appellate court, Cagayan de Oro City
could be traversed from Gingoog City within two hours; hence, it is not
physically impossible for accused-appellant to commit the crime in Cagayan de
Oro City and still go home to Gingoog City after its commission. Settled is the rule
that factual findings and assessments of the credibility of the witnesses by the

62
trial court deserve utmost respect by the Supreme Court. In the instant case, the
Court found no reason to deviate from the findings or assessment of the trial
court there being no showing that it has overlooked or misappreciated some
facts which if considered would materially impact on or change the outcome of
the case. On the contrary, the Court found that the trial court meticulously
studied the case and properly weighed the evidence presented by the parties.

63
Greco Antonious Beda Belgica v. Hon. Paquito Ochoa, Jr.,
G.R. No. 208566, November 19, 2013

Facts:

This case is consolidated with G.R. No. 208493 and G.R. No. 209251. The so-
called pork barrel system has been around in the Philippines since about 1922.
Pork Barrel is commonly known as the lump-sum, discretionary funds of the
members of the Congress. It underwent several legal designations from
“Congressional Pork Barrel” to the latest “Priority Development Assistance Fund”
or PDAF. The allocation for the pork barrel is integrated in the annual General
Appropriations Act (GAA).

Since 2011, the allocation of the PDAF has been done in the following
manner:
a. P70 million: for each member of the lower house; broken down to – P40 million
for “hard projects” (infrastructure projects like roads, buildings, schools, etc.),
and P30 million for “soft projects” (scholarship grants, medical assistance,
livelihood programs, IT development, etc.);
b. P200 million: for each senator; broken down to – P100 million for hard projects,
P100 million for soft projects; c. P200 million: for the Vice-President; broken down
to – P100 million for hard projects, P100 million for soft projects.

The PDAF articles in the GAA do provide for realignment of funds whereby
certain cabinet members may request for the realignment of funds into their
department provided that the request for realignment is approved or concurred
by the legislator concerned.

Pork Barrel Scam Controversy

Ever since, the pork barrel system has been besieged by allegations of
corruption. In July 2013, six whistle blowers, headed by Benhur Luy, exposed that
for the last decade, the corruption in the pork barrel system had been
facilitated by Janet Lim Napoles. Napoles had been helping lawmakers in
funneling their pork barrel funds into about 20 bogus NGO’s (non-government
organizations) which would make it appear that government funds are being
used in legit existing projects but are in fact going to “ghost” projects. An audit
was then conducted by the Commission on Audit and the results thereof
concurred with the exposes of Luy et al.
Motivated by the foregoing, Greco Belgica and several others, filed various
petitions before the Supreme Court questioning the constitutionality of the pork
barrel system.

64
Issue:
I. Whether or not the congressional pork barrel system is constitutional.
II. Whether or not presidential pork barrel system is constitutional.
III. Whether or not the issues raised in the consolidated petitions involve an
actual and justiciable controversy.

Held:

I. No, the congressional pork barrel system is unconstitutional. It is


unconstitutional because it violates the following principles:

a. Separation of Powers
As a rule, the budgeting power lies in Congress. It regulates the release of funds
(power of the purse). The executive, on the other hand, implements the laws –
this includes the GAA to which the PDAF is a part of. Only the executive may
implement the law but under the pork barrel system, what’s happening was
that, after the GAA, itself a law, was enacted, the legislators themselves dictate
as to which projects their PDAF funds should be allocated to – a clear act of
implementing the law they enacted – a violation of the principle of separation
of powers. This is also highlighted by the fact that in realigning the PDAF, the
executive will still have to get the concurrence of the legislator concerned.

b. Non-delegability of Legislative Power


As a rule, the Constitution vests legislative power in Congress alone. (The
Constitution does grant the people legislative power but only insofar as the
processes of referendum and initiative are concerned). That being, legislative
power cannot be delegated by Congress for it cannot delegate further that
which was delegated to it by the Constitution.
Exceptions to the rule are:

(i) delegated legislative power to local government units but this shall involve
purely local matters;
(ii) authority of the President to, by law, exercise powers necessary and proper
to carry out a declared national policy in times of war or other national
emergency, or fix within specified limits, and subject to such limitations and
restrictions as Congress may impose, tariff rates, import and export quotas,
tonnage and wharfage dues, and other duties or imposts within the framework
of the national development program of the Government.

65
In this case, the PDAF articles which allow the individual legislator to
identify the projects to which his PDAF money should go to is a violation of the
rule on non-delegability of legislative power. The power to appropriate funds is
solely lodged in Congress (in the two houses comprising it) collectively and not
lodged in the individual members. Further, nowhere in the exceptions does it
state that the Congress can delegate the power to the individual member of
Congress.

c. Local Autonomy
As a rule, the local governments have the power to manage their local affairs.
Through their Local Development Councils (LDCs), the LGUs can develop their
own programs and policies concerning their localities. But with the PDAF,
particularly on the part of the members of the house of representatives, what’s
happening is that a congressman can either bypass or duplicate a project by
the LDC and later on claim it as his own. This is an instance where the national
government (note, a congressman is a national officer) meddles with the affairs
of the local government – and this is contrary to the State policy embodied in
the Constitution on local autonomy. It’s good if that’s all that is happening under
the pork barrel system but worse, the PDAF becomes more of a personal fund
on the part of legislators.

II. Yes, the presidential pork barrel is valid.


The main issue raised by Belgica et al against the presidential pork barrel is that it
is unconstitutional because it violates Section 29 (1), Article VI of the Constitution
which provides:

No money shall be paid out of the Treasury except in pursuance of


an appropriation made by law. Belgica et al emphasized that the presidential
pork comes from the earnings of the Malampaya and PAGCOR and not from
any appropriation from a particular legislation. The Supreme Court disagrees as
it ruled that PD 910, which created the Malampaya Fund, as well as PD 1869 (as
amended by PD 1993), which amended PAGCOR’s charter, provided for the
appropriation, to wit:

(i) PD 910: Section 8 thereof provides that all fees, among others, collected from
certain energy-related ventures shall form part of a special fund (the
Malampaya Fund) which shall be used to further finance energy resource
development and for other purposes which the President may direct;
(ii) PD 1869, as amended: Section 12 thereof provides that a part of PAGCOR’s
earnings shall be allocated to a General Fund (the Presidential Social Fund)
which shall be used in government infrastructure projects.

These are sufficient laws which met the requirement of Section 29, Article

66
VI of the Constitution. The appropriation contemplated therein does not have to
be a particular appropriation as it can be a general appropriation as in the
case of PD 910 and PD 1869.

III. Yes, there exists an actual and justiciable controversy in the cases.

The requirement of contrariety of legal rights is satisfied by the


antagonistic positions of the parties regarding the constitutionality of the pork
barrel system.The case is ripe for adjudication since the challenged funds and
the laws allowing for their utilization are currently existing and operational and
thereby posing an immediate or threatened injury to petitioners.The case is not
moot as the proposed reforms on the PDAF and the abolition thereof does not
actually terminate the controversy on the matter. The President does not have
constitutional authority to nullify or annul the legal existence of the PDAF.

The “moot and academic principle” cannot stop the Court from deciding
the case considering that: (a) petitioners allege grave violation of the
constitution, (b) the constitutionality of the pork barrel system presents a situation
of exceptional character and is a matter of paramount public interest, (c) there
is a practical need for a definitive ruling on the system’s constitutionality to guide
the bench, the bar and the public, and (d) the preparation and passage of the
national budget is an annual occurrence.

67
Cecilia Pagaduan vs. Civil Service Commission, et. al., G.R. No. 206379

Facts:

Petitioner Pagaduan filed a notarized complaint with the Civil Service


Commission-Regional Office (CSC-RO) in Tuguegarao City against respondent
Salvador charging her with the administrative offenses of falsification and
misrepresentation alleging that Salvador did not actually possess the necessary
experience require by her position. Subsequently, Pagaduan filed with the
Municipal Trial Court in Cities (MTCC) a criminal charge against Salvador for
falsification of public documents.

A decision on the administrative complaint was rendered holding


Salvador only liable only for Simple Misconduct. Pagaduan filed a motion for
reconsideration which was denied. She then appealed to the Civil Service
Commission which found the appeal to be without merit. She did not move for
reconsideration nor appeal thus finality of the decision. MTCC rendered a
decision finding Salvador guilty of falsification of public documents. She did not
appeal and then applied for probation. Her application was granted.
Thereafter, Pagaduan filed a second administrative complaint against Salvador,
this time for the offense of conviction of a crime involving moral turpitude.
Salvador in her counter affidavit raised the defenses of res judicata, forum
shopping and double jeopardy.

CSC found Salvador guilty of administrative offense of conviction of a


crime involving moral turpitude because of her conviction for falsification before
the MTCC. Salvador moved for reconsideration but was denied before the CSC-
RO. She appealed to the CSC which revered decision of the CSC-RO.
Pagaduan moved for reconsideration but was denied. Hence, the appeal to
the Court of Appeals (CA) which reversed decision of the CSC. Salvador filed a
motion for reconsideration which was granted by the CA and issued an
Amended Decisionwhich agreed with the CSC that Salvador did not commit
moral turpitude as it was mere error of judgment on her part. Thus, this appeal
by Pagaduan.

Issue: Whether or not there are res judicata and forum shopping between the
two administrative complaints.

Held:

No. Res judicata and forum shopping are not present in the two
administrative complaints filed by Pagaduan against Salvador. The principle of
res judicata is applicable either by way of “bar by prior judgment” or by

68
“conclusiveness of judgment.” Here, Salvador raised the defense of res judicata
by conclusiveness of judgement.

Conclusiveness of judgment is applicable when a fact has been squarely


put in issue, judicially passed upon, and adjudged in a former suit by a court of
competent jurisdiction. The draft settled by final judgment binds the parties to
that action and continues to bind them while the judgment remains standing.
The conclusively-settled fact cannot again be litigated. Thus only the identities
of parties and issued are required for operation of the principle of
conclusiveness of judgment.

In this case, there appears to be no identity of issues and facts between


the two administrative cases. The first involves the issue of whether Salvador
falsified her personal data sheet. The second involves the issue whether Salvador
was convicted of a crime involving moral turpitude. The grounds are separate
and distinct from each other.

Thus, Pagaduan cannot be liable for forum shopping. For it to exist,


elements of litis pendent should be present namely: identity of parties; identity of
rights and relief prayed; and identity of two preceding particulars is such that
any judgement rendered in the pending case would amount to res judicata.
Since no res judicata, there is no forum shopping.

69
Judith Yu vs. Hon. Rosa Santos-Tatad, Presiding Judge, Regional Trial Court,
Quezon City, Branch 105, and the People of the Philippines
G.R. No. 170979
Facts:

Based on the complaint of Spouses Sergio and Cristina Casaclang, an


information for estafa against the petitioner was filed with the RTC. In a May 26,
2005 decision, the RTC convicted the petitioner as charged. It imposed on her a
penalty of three (3) months of imprisonment (arresto mayor), a fine of
P3,800,000.00 with subsidiary imprisonment, and the payment of an indemnity to
the Spouses Casaclang in the same amount as the fine. Fourteen (14) days later,
or on June 9, 2005, the petitioner filed a motion for new trial with the RTC,
alleging that she discovered new and material evidence that would exculpate
her of the crime for which she was convicted.

In an October 17, 2005 order, respondent Judge denied the petitioner's


motion for new trial for lack of merit. On November 16, 2005, the petitioner filed
a notice of appeal with the RTC, alleging that pursuant to our ruling in Neypes v.
Court of Appeals,5 she had a "fresh period" of 15 days from November 3, 2005,
the receipt of the denial of her motion for new trial, or up to November 18, 2005,
within which to file a notice of appeal.

On November 24, 2005, the respondent Judge ordered the petitioner to


submit a copy of Neypes for his guidance.

On December 8, 2005, the prosecution filed a motion to dismiss the


appeal for being filed 10 days late, arguing that Neypes is inapplicable to
appeals in criminal cases. On January 4, 2006, the prosecution filed a motion for
execution of the decision.

On January 20, 2006, the RTC considered the twin motions submitted for
resolution. On January 26, 2006, the petitioner filed the present petition for
prohibition with prayer for the issuance of a temporary restraining order and a
writ of preliminary injunction to enjoin the RTC from acting on the prosecution's
motions to dismiss the appeal and for the execution of the decision.

Issue: Whether or not the fresh period rule enunciated in Neypes applies to
appeals in criminal cases.

Held: Yes.

The right to appeal is not a constitutional, natural or inherent right - it is a


statutory privilege and of statutory origin and, therefore, available only if

70
granted or as provided by statutes. It may be exercised only in the manner
prescribed by the provisions of the law. The period to appeal is specifically
governed by Section 39 of Batas Pambansa Blg. 129 (BP 129), as amended,
Section 3 of Rule 41 of the 1997 Rules of Civil Procedure, and Section 6 of Rule
122 of the Revised Rules of Criminal Procedure.

In Neypes, the Court modified the rule in civil cases on the counting of the
15-day period within which to appeal. The Court categorically set a fresh period
of 15 days from a denial of a motion for reconsideration within which to appeal,
thus: The Supreme Court may promulgate procedural rules in all courts. It has the
sole prerogative to amend, repeal or even establish new rules for a more
simplified and inexpensive process, and the speedy disposition of cases. In the
rules governing appeals to it and to the Court of Appeals, particularly Rules 42,
43 and 45, the Court allows extensions of time, based on justifiable and
compelling reasons, for parties to file their appeals. These extensions may consist
of 15 days or more.

To standardize the appeal periods provided in the Rules and to afford


litigants fair opportunity to appeal their cases, the Court deems it practical to
allow a fresh period of 15 days within which to file the notice of appeal in the
Regional Trial Court, counted from receipt of the order dismissing a motion for a
new trial or motion for reconsideration.

Henceforth, this "fresh period rule" shall also apply to Rule 40 governing
appeals from the Municipal Trial Courts to the Regional Trial Courts; Rule 42 on
petitions for review from the Regional Trial Courts to the Court of Appeals; Rule
43 on appeals from quasi-judicial agencies to the Court of Appeals and Rule 45
governing appeals by certiorari to the Supreme Court. The new rule aims to
regiment or make the appeal period uniform, to be counted from receipt of the
order denying the motion for new trial, motion for reconsideration (whether full
or partial) or any final order or resolution. The raison d'être for the "fresh period
rule" is to standardize the appeal period provided in the Rules and do away with
the confusion as to when the 15-day appeal period should be counted. Thus,
the 15-day period to appeal is no longer interrupted by the filing of a motion for
new trial or motion for reconsideration; litigants today need not concern
themselves with counting the balance of the 15-day period to appeal since the
15-day period is now counted from receipt of the order dismissing a motion for
new trial or motion for reconsideration or any final order or resolution.

Clearly, if the modes of appeal to the CA (in cases where the RTC
exercised its appellate jurisdiction) and to this Court in civil and criminal cases
are the same, no cogent reason exists why the periods to appeal from the RTC
(in the exercise of its original jurisdiction) to the CA in civil and criminal cases

71
under Section 3 of Rule 41 of the 1997 Rules of Civil Procedure and Section 6 of
Rule 122 of the Revised Rules of Criminal Procedure should be treated
differently. Were we to strictly interpret the "fresh period rule" in Neypes and
make it applicable only to the period to appeal in civil cases, we shall
effectively foster and encourage an absurd situation where a litigant in a civil
case will have a better right to appeal than an accused in a criminal case - a
situation that gives undue favor to civil litigants and unjustly discriminates against
the accused-appellants. It suggests a double standard of treatment when we
favor a situation where property interests are at stake, as against a situation
where liberty stands to be prejudiced. We must emphatically reject this double
and unequal standard for being contrary to reason. Over time, courts have
recognized with almost pedantic adherence that what is contrary to reason is
not allowed in law - Quod est inconveniens, aut contra rationem non permissum
est in lege.

72
San Lorenzo Ruiz Builders and Developers Group, Inc. vs. Ma. Cristina Bayang,
G.R. No. 194702, April 20, 2015

Facts:

Petitioner SLR Builders (then known as Violago Builders, Inc) and


respondent Ma. Cristina Bayang (Cristina) entered into a contract to sell over a
60-square meter lot in Violago Homes Parkwoods Subdivision in Barangay
Payatas, Quezon City. Cristina demanded the execution of the deed of
absolute sale and the lot’s certificate of title after paying the whole monthly
amortizations. However, SLR builders failed to deliver the same, hence, Cristina
filed a complaint for specific performance and damages against SLR builders
and its President, Oscar Violago (petitioners) before the HLURB. HLURB ruled in
favor of Cristina.

Petitioners appealed to the HLURB Board of Commissioners. However, the


Board dismissed and denied petitioners’ appeal and subsequent motion for
reconsideration. The petitioners then brought the case to the Office of the
President (OP) which likewise dismissed petitioners’ appeal for having filed out of
time. The OP’s resolution stated that the HLURB Decision affirming the Arbiter’s
decision was received by the petitioners on July 27, 2005. On that date, the 15-
day prescriptive period within which to file an appeal began to run. Instead of
preparing an appeal, respondents-appellants opted to file a Motion for
Reconsideration on August 10, 2005. Their filing of the said motion interrupted the
period of appeal by that time, however, 14 days had already elapsed.
Petitioners have only 1 day left within which to file their notice of appeal to the
OP, however, petitioners were able to do so only on April 27, 2006, or nine (9)
days late.

Petitioners argued that the "fresh period rule" enunciated in the case of
Domingo Neypes, et al. v. Court of Appeals, et al. should be applied to their
case. The OP denied the petitioners’ motion with finality and stated that the
"fresh period rule" applies only to judicial appeals and not to administrative
appeals. Petitioners filed a petition for review under Rule 43 of the ROC which
was denied by the CA.

Issue: Whether or not the “fresh period” rule in Neypes applies to administrative
appeal filed from a decision of the HLURB Board of Commissioners to the Office
to the President.

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Held: No.

The "fresh period rule" in Neypes applies only to judicial appeals and not
to administrative appeals. The "fresh period rule" shall apply to Rule 40 (appeals
from the Municipal Trial Courts to the Regional Trial Courts); Rule 41 (appeals
from the Regional Trial Courts to the Court of Appeals or Supreme Court); Rule 42
(appeals from the Regional Trial Courts to the Court of Appeals); Rule 43
(appeals from quasi-judicial agencies to the Court of Appeals); and Rule 45
(appeals by certiorari to the Supreme Court). Obviously, these Rules cover
judicial proceedings under the 1997 Rules of Civil Procedure. The subject appeal
in this case is an appeal from a decision of the HLURB Board of Commissioners to
the OP which is not judicial but administrative in nature, thus, the "fresh period
rule" in Neypes does not apply.
Section 2, Rule XXI of the BLURB Resolution No. 765, series of 2004,
prescribing the rules and regulations governing appeals from decisions of the
Board of Commissioners to the Office of the President, pertinently reads:

Section 2. Appeal. - Any party may, upon notice to the Board and the
other party, appeal a decision rendered by the Board of Commissioners
to the Office of the President within fifteen (15) days from receipt thereof,
in accordance with P.D. No. 1344 and A.O. No. 18 Series of 1987.

The pendency of the motion for reconsideration shall suspend the running
of the period of appeal to the Office of the President. Corollary thereto,
paragraph 2, Section 1 of Administrative Order No. 18, series of 1987, provides
that in case the aggrieved party files a motion for reconsideration from an
adverse decision of any agency/office, the said party has the only remaining
balance of the prescriptive period within which to appeal, reckoned from
receipt of notice of the decision denying his/her motion for reconsideration.
Hence, the CA correctly affirmed the OP in dismissing the petitioners' appeal for
having been filed out of time.

74
Fortune Life Insurance Co., Inc. v. COA, G.R. No. 213525, January 27, 2015

Facts:

Respondent Provincial Government of Antique (LGU) and the petitioner


executed a memorandum of agreement concerning the life insurance
coverage of qualified barangay secretaries, treasurers and tanod, the former
obligating P4,393,593.60for the premium payment, and subsequently submitting
the corresponding disbursement voucher to COA Antique for pre-audit. The
latter office disallowed the payment for lack of legal basis under Republic Act
No. 7160 (Local Government Code). Respondent LGU appealed but its appeal
was denied. Consequently, the petitioner filed its petition for money claim in the
COA. COA DENIED the petition, holding that under Section 447 and Section 458
of the Local Government Code only municipal or city governments are expressly
vested with the power to secure group insurance coverage for barangay
workers; and noting the LGU’s failure to comply with the requirement of
publication under Section 21 of Republic Act No. 9184 (Government
Procurement Reform Act).

The petitioner received a copy of the COA decision on December 14,


2012, and filed its motion for reconsideration on January 14, 2013. However, the
COA denied the motion, the denial being received by the petitioner on July 14,
2014. Hence, the petitioner filed the petition for certiorari on August 12, 2014,
but the petition for certiorari was dismissed on August 19,2014 for (a) the late
filing of the petition; (b) the non-submission of the proof of service and verified
declaration; and (c) the failure to show grave abuse of discretion on the part of
the respondents. Hence this Motion for Reconsideration.

Issues
1. WON Petitioner complied with rule on proof of service
2. WON the “fresh period rule” applies on Rule 64
3. WON the remedy of Certiorari is proper

Held: Motion for Reconsideration is without merit

1. NO. The petitioner obviously ignores that Section 13, Rule 13 of the Rules of
Court concerns two types of proof of service, namely: the affidavit and
the registry receipt, viz:
Section 13. Proof of Service. – x x x. If service is made by registered mail, proof
shall be made by such affidavit and the registry receipt issued by the mailing
office. The registry return card shall be filed immediately upon its receipt by the
sender, or in lieu thereof the unclaimed letter together with the certified or sworn
copy of the notice given by the postmaster to the addressee. Section 13 thus

75
requires that if the service is done by registered mail, proof of service shall consist
of the affidavit of the person effecting the mailing and the registry receipt, both
of which must be appended to the paper being served. A compliance with the
rule is mandatory, such that there is no proof of service if either or both are not
submitted.

Here, the petition for certiorari only carried the affidavit of service executed
by one Marcelino T. Pascua, Jr., who declared that he had served copies of the
petition by registered mail, with registered receipts attached to the appropriate
spaces found on pages 64-65 of the petition."14 The petition only bore, however,
the cut print-outs of what appeared to be the registry receipt numbers of the
registered matters, not the registry receipts themselves. The rule requires to be
appended the registry receipts, not their reproductions. Hence, the cut print-
outs did not substantially comply with the rule.

2. NO. Jurisprudence dictates that the belated filing of the petition for
certiorari under Rule 64 on the belief that the fresh period rule should
apply was fatal to the recourse. As such, the petitioner herein should suffer
the same fate for having wrongly assumed that the fresh period rule under
Neypes applied. Rules of procedure may be relaxed only to relieve a
litigant of an injustice that is not commensurate with the degree of his
thoughtlessness in not complying with the prescribed procedure. Absent
this reason for liberality, the petition cannot be allowed to prosper.

The petitioner filed its motion for reconsideration on January 14, 2013, which
was 31 days after receiving the assailed decision of the COA on December 14,
2012. Pursuant to Section 3 of Rule 64, it had only five days from receipt of the
denial of its motion for reconsideration to file the petition. Considering that it
received the notice of the denial on July 14, 2014, it had only until July19, 2014 to
file the petition. However, it filed the petition on August 13, 2014, which was 25
days too late.

3. No. Grave abuse of discretion implies such capricious and whimsical


exercise of judgment as to be equivalent to lack or excess of jurisdiction;
in other words, power is exercised in an arbitrary or despotic manner by
reason of passion, prejudice, or personal hostility; and such exercise is so
patent or so gross as to amount to an evasion of a positive duty or to a
virtual refusal either to perform the duty enjoined or to act at all in
contemplation of law.

A close look indicates that the petition for certiorari did not sufficiently
disclose how the COA committed grave abuse of its discretion. For sure, the
bases cited by the petitioner did not approximate grave abuse of discretion. To

76
start with, the supposed delays taken by the COA in deciding the appeal were
neither arbitrary nor whimsical on its part. Secondly, the mere terseness of the
denial of the motion for reconsideration was not a factor in demonstrating an
abuse of discretion. And, lastly, the fact that Senator Pimentel, even if he had
been the main proponent of the Local Government Code in the Legislature,
expressed an opinion on the issues different from the COA Commissioners’ own
did not matter, for it was the latter’s adjudication that had any value and
decisiveness on the issues by virtue of their being the Constitutionally officials
entrusted with the authority for that purpose.

It is equally relevant to note that the COA denied the money claim of the
petitioner for the further reason of lack of sufficient publication as required by
the Government Procurement Act. In that light, the COA acted well within its
authority in denying the petitioner’s claim.

77
Gregorio De Leon, Doing Business As G.D.L. Marketing vs. Hercules Agro
Industrial Corp. G.R. No. 183239, June 02, 2014

Facts:

Petitioner filed with the RTC Manila an action for breach of contract with
damages and a prayer for a writ of preliminary attachment against respondent
Hercules Agro Industrial Corporation, represented by Jesus Chua, and
respondent Rumi Rungis Milk. However, it was dismissed.

Petitioner, through counsel, filed a Motion for Time, asking for an


additional period of 10 days to file a motion for reconsideration. Subsequently,
petitioner filed his Motion for Partial Reconsideration. However, the RTC denied
the Motion for Time, as the period for filing a motion for reconsideration is non-
extendible.

Respondent Rumi Rungis Milk filed its Motion for Reconsideration and to
dismiss the complaint for lack of jurisdiction over the defendant foreign
corporation not doing business in the Philippines. The RTC denied the
respondent’s motion.

Petitioner filed a Notice of Partial Appeal which was denied by the RTC
stating that petitioner's notice of partial appeal cannot be given due course as
the same had been filed beyond the reglementary period to appeal. Petitioner
filed a Motion for Reconsideration, Supplement to Petitioner's Motion for
Reconsideration and Reply to respondent's comment.

Petitioner received a notice from the CA requiring him to file appellant's


brief which he did. On the other hand, respondent Rumi Rungis Milk filed a
motion for extension of time to file its appellant’s brief, which the CA denied in a
Resolution.

Respondent Hercules Agro Industrial Corporation filed a Motion to strike


out or dismiss petitioner's appeal and motion for leave of court to lift the
amended order of attachment and release the properties in custodia legis.
Petitioner filed his Opposition thereto with motion for refund of overpayment of
fees.

The CA ordered petitioner’s brief stricken off the records and dismissing
the appeal. In so ruling, the CA found that the appeal could not be legally
entertained, since it was filed out of time and denied due course by the RTC.
Also, the CA ordered the Appellant's Brief filed by respondent Rumi Rungis Milk,

78
expunged from the records taking into account the Resolution promulgated on
March 15, 2007 denying respondent Rumi Rungis Milk's motion for extension of
time to file appellant's brief and dismissing its appeal. Both petitioner and
respondent Rumi Rungis Milk filed their respective motions for reconsideration,
which the CA denied.

Issue: Whether or not the CA erred when it ordered petitioner's appellant's brief
filed with it be stricken off the records.

Held: NO.

The records show that the RTC Decision dated September 23, 2005 was
received by petitioner on October 4, 2005; thus, he had until October 19, 2005
within which to file an appeal or a motion for reconsideration. Petitioner,
however, filed on October 19,2005 a motion for time praying for an additional 10
days or until October 29, 2005 to file his motion for partial reconsideration. The
RTC denied the motion to which we agree, since such motion is a transgression
of the mandatory prohibition on the filing of a motion for extension to file a
motion for reconsideration.

In Habaluyas Enterprises Inc. v. Japson, “Beginning one month after the


promulgation of this Resolution, the rule shall be strictly enforced that no motion
for extension of time to file a motion for new trial or reconsideration may be filed
with the Metropolitan or Municipal Trial Courts, the Regional Trial Courts, and the
Intermediate Appellate Court. Such a motion may be filed only in cases
pending with the Supreme Court as the court of last resort, which may in its
sound discretion either grant or deny the extension requested.”

Section 2, Rule 40 and Section 3, Rule 41 of the 1997 Rules of Civil


Procedure states that in appeals from municipal trial courts or regional trial
courts, no motion for extension of time to file a motion for reconsideration shall
be allowed.

As the period to file a motion for reconsideration is non-extendible,


petitioner's motion for extension of time to file a motion for reconsideration did
not toll the reglementary period to appeal; thus, petitioner had already lost his
right to appeal the September 23, 2005 decision. As such, the RTC decision
became final as to petitioner when no appeal was perfected after the lapse of
the prescribed period.

The CA correctly ordered that petitioner's appellant's brief be stricken off


the records. The parties who have not appealed in due time cannot legally ask

79
for the modification of the judgment or obtain affirmative relief from the
appellate court. A party who fails to question an adverse decision by not filing
the proper remedy within the period prescribed by law loses his right to do so. As
petitioner failed to perfect his appeal within the period for doing so, the
September 23, 2005 decision has become final as against him. The rule is clear
that no modification of judgment could be granted to a party who did not
appeal. It is enshrined as one of the basic principles in our rules of procedure,
specifically to avoid ambiguity in the presentation of issues, facilitate the setting
forth of arguments by the parties, and aid the court in making its determinations.
It is not installed in the rules merely to make litigations laborious and tedious for
the parties. It is there for a reason.

80
Avelino Casupanan and Robert Capitulo v. Mario Llavore Laroya,
G.R. No. 145391. August 26, 2002.
Facts:

Respondent Laroya and petitioner Casupanan figured in an accident.


The car driven by Casupanan was owned by petitioner Capitulo. Both parties
filed a case with the Municipal Circuit Trial Court (MCTC) of Capas, Tarlac.
Respondent Laroya filed a criminal case against Casupanan for reckless
imprudence resulting in damage to property, while Casupanan and Capitulo
filed a civil case against Laroya for quasi-delict.

When the civil case was filed, the criminal case was then at its preliminary
investigation stage. Laroya, defendant in the civil case, filed a motion to dismiss
the civil case on the ground of forum-shopping considering the pendency of the
criminal case. The MCTC granted the motion and dismissed the civil case.

On Motion for Reconsideration, Casupanan and Capitulo insisted that the


civil case is a separate civil action which can proceed independently of the
criminal case. The MCTC denied the motion for reconsideration. Casupanan
and Capitulo filed a petition for certiorari under Rule 65 before the Regional Trial
Court (RTC) of Capas, Tarlac, assailing the MCTCs Order of dismissal. The RTC
dismed the petition for certiorari for lack of merit. The Motion for Reconsideration
was also denied.

Issue:
1) WON there was forum shopping;
2) WON an accused in a pending criminal case for reckless imprudence can
validly file, simultaneously and independently, a separate civil action for quasi-
delict against the private complainant in the criminal case.

Held:

1) No. The essence of forum-shopping is the filing of multiple suits involving the
same parties for the same cause of action, either simultaneously or successively,
to secure a favorable judgment. Forum-shopping is present when in the two or
more cases pending, there is identity of parties, rights of action and reliefs
sought. However, there is no forum-shopping in the instant case because the
law and the rules expressly allow the filing of a separate civil action which can
proceed independently of the criminal action.

Respondent filed the criminal case for reckless imprudence resulting in


damage to property based on the Revised Penal Code while petitioners filed
the civil action for damages based on Article 2176 of the Civil Code. Although

81
these two actions arose from the same act or omission, they have different
causes of action. The criminal case is based on culpa criminal punishable under
the Revised Penal Code while the civil case is based on culpa aquiliana
actionable under Articles 2176 and 2177 of the Civil Code.

Any aggrieved person can invoke these articles provided he proves, by


preponderance of evidence, that he has suffered damage because of the fault
or negligence of another. Either the private complainant or the accused can file
a separate civil action under these articles. There is nothing in the law or rules
that state only the private complainant in a criminal case may invoke these
articles. Also, since the present Rules require the accused in a criminal action to
file his counterclaim in a separate civil action, there can be no forum-shopping if
the accused files such separate civil action.

2) Yes. Section 3, Rule 111 of the 2000 Rules provides as follows: SEC 3. When civil
action may proceed independently. - In the cases provided in Articles 32, 33, 34
and 2176 of the Civil Code of the Philippines, the independent civil action may
be brought by the offended party. It shall proceed independently of the criminal
action and shall require only a preponderance of evidence. In no case,
however, may the offended party recover damages twice for the same act or
omission charged in the criminal action.

Under Section 1 of the present Rule 111, the independent civil action in
Articles 32, 33, 34 and 2176 of the Civil Code is not deemed instituted with the
criminal action but may be filed separately by the offended party even without
reservation. The commencement of the criminal action does not suspend the
prosecution of the independent civil action under these articles of the Civil
Code. The suspension in Section 2 of the present Rule 111 refers only to the civil
action arising from the crime, if such civil action is reserved or filed before the
commencement of the criminal action.

Thus, the offended party can file two separate suits for the same act or
omission. The first a criminal case where the civil action to recover civil
liability ex-delicto is deemed instituted, and the other a civil case for quasi-
delict - without violating the rule on non-forum shopping. The two cases can
proceed simultaneously and independently of each other. The commencement
or prosecution of the criminal action will not suspend the civil action for quasi-
delict. The only limitation is that the offended party cannot recover damages
twice for the same act or omission of the defendant.

Similarly, the accused can file a civil action for quasi-delict for the same
act or omission he is accused of in the criminal case. This is expressly allowed in
paragraph 6, Section 1 of the present Rule 111 which states that the

82
counterclaim of the accused may be litigated in a separate civil action. This is
only fair for two reasons. First, the accused is prohibited from setting up any
counterclaim in the civil aspect that is deemed instituted in the criminal
case. The accused is therefore forced to litigate separately his counterclaim
against the offended party. If the accused does not file a separate civil action
for quasi-delict, the prescriptive period may set in since the period continues to
run until the civil action for quasi-delict is filed.

Second, the accused, who is presumed innocent, has a right to invoke


Article 2177 of the Civil Code, in the same way that the offended party can
avail of this remedy which is independent of the criminal action. To disallow the
accused from filing a separate civil action for quasi-delict, while refusing to
recognize his counterclaim in the criminal case, is to deny him due process of
law, access to the courts, and equal protection of the law. Thus, the civil action
based on quasi-delict filed separately by petitioners is proper. The order of
dismissal by the MCTC on the ground of forum-shopping is erroneous.

83
Light Rail Transit Authority vs. Aurora Salvaña, G.R. No. 192074, June 10, 2014

Facts:

The LRTA Administrator, Melquiades Robles, issued a directive that revoked


respondent’s designation as the OIC of the LRTA’s Administrative Department.
Atty. Salvana opposed the order and went to the Office of the President. In the
meantime, she also filed for a sick leave from May 12, 2006 to May 31, 2006. In
support of this, she submitted a medical certificate allegedly signed by Dr.
Grace Marie Blanco of the Veterans Memorial Medical Center. Dr. Blanco,
however, later went to the LRTA and claimed that she issued no such medical
certificate in favor of Atty. Salvana. The LRTA later charged Atty. Salvana with
Dishonesty, Grave Misconduct, Gross Insubordination, and Conduct Prejudicial
to the Best Interest of the Service.

The LRTA found Atty. Salvana guilty of the charges. Atty. Salvana elevated
the case to the Civil Service Commission, claiming that the LRTA denied her due
process. The CSC modified the LRTA’s decision, holding that Atty. Salvana only
committed Simple Dishonesty; she was penalized with only three months
suspension. LRTA moved to reconsider, but was denied by the CSC. The LRTA
elevated the case to the CA. The CA dismissed the petition and affirmed the
CSC’s findings, holding that the LRTA has no standing to sue the present case.
Hence the LRTA’s recourse to the SC. The LRTA claims that it has standing,
anchored on the ruling on PNB vs Garcia that it is the ‘person adversely
affected’ by the decision. On the other hand, Atty. Salvana counters that the
Administrator Robles was not authorized by the LRTA and that the CSC’s finding
of Simple Dishonesty was correct.

Issue: Does the LRTA have legal standing to sue in the present case?

Held: Yes.

In a long line of decisions from CSC vs Dacoycoy, which was the source of
PNB vs Garcia’s ruling, the Supreme Court has held that a government agency
has the right to appeal an administrative case against an exonerated
government employee. The court then held that while the old rule in the CSC
disallowed appeals to higher courts by administrative agencies, it is in the best
interest of the civil service that employees who were exonerated for serious
offenses not take shelter in previous doctrines which held that an exoneration in
the civil service was akin to a acquittal in a criminal case and therefore
unappeallable. The civil service and the public would indeed be parties
adversely affected by such lack of standing. Additionally, while the CSC has

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been granted the power to appeal administrative cases to the CA, it is not
alone in doing so.

The Supreme Court has allowed other government agencies to appeal


cases to the CA in administrative matters, though all but the present case
involved exoneration. The present case involves a modification of a lower
administrative body’s decision. The SC held that the same ruling for exonerations
must apply. The LRTA as the administrative agency in charge of the LRT’s
operations, has the power to select its employees and discipline them in cases
of violations of their rules. These acts involve discretion which is necessary in
order to preserve the accountability of public officials. In light of this, the Revised
Rules on Administrative Cases in the Civil Service was issued during the
pendency of this case. The RACCS holds that a Party Adversely Affected refers
to the respondent against whom a decision in an administrative case has been
rendered or to the disciplining authority in an appeal from a decision reversing
or modifying the original decision. As a remedial law issued by the CSC, it has
retroactive effect and covers the present case, thus giving the LRTA the
necessary standing to sue before the CA in lieu of the CSC.

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Juliet Vitug Madarang vs. Sps. Jesus Morales, G.R. No. 199283, June 9, 2014

Facts:

Spouses Morales filed with the Regional Trial Court (RTC) of Quezon City a
complaint for judicial foreclosure of a house and lot located in Bago Bantay,
Quezon City (property), alleging that Spouses Bartolome failed to pay the loan
granted by the latter to the former, and mortgaged the property as security. The
period to pay lapsed without the Spouses Bartolome having paid their loan.
After demand, the Spouses Bartolome only paid part of the loaned amount.

In the meantime, the Spouses Bartolome died. The Spouses Morales, thus,
filed a complaint for judicial foreclosure of the property against the heirs of
Spouses Bartolome. Defendants assailed the authenticity of the signature of
Spouses Bartolome in the deed of real estate mortgage.

December 22, 2009, the RTC adjudged the case in favor of Spouses
Morales.

January 29, 2010, defendants received a copy of the trial court’s decision.

February 8, 2010, defendants filed a Motion for Reconsideration, and a


request for a Philippine National Police (PNP) handwriting expert to examine the
authenticity of the Spouses Bartolome’s alleged signatures on the deed of real
estate mortgage.

May 25, 2010, the RTC denied the Motion for Reconsideration reasoning
that it was pro forma for failing to specify the findings and conclusions in the
decision that were not supported by the evidence or contrary to law, it likewise
denied the request for the examination of the signatures.

June 24, 2010, defendants received a copy of the May 25, 2010 order.

August 11, 2010, defendants filed a notice of appeal.

August 13, 2010, the trial court denied due course the notice of appeal for
having been filed out of time.

September 24, 2010, defendants filed a petition for relief from judgment,
blaming their 80-year-old lawyer who failed to file the notice of appeal within
the reglementary period. They argued that Atty. Tugonon’s failure to appeal
within the reglementary period was a mistake and an excusable negligence
due to their former lawyer’s old age.

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April 27, 2011, the trial court denied the petition for relief from judgment.
The trial court held that the petition for relief was filed beyond 60 days from the
finality of the trial court’s decision, contrary to Section 3, Rule 38 of the 1997
Rules of Civil Procedure.

July 13, 2011, Madarang, Romeo, and Rodolfo and Ruby Anne Bartolome
filed the petition for certiorari with the Court of Appeals (CA).

July 27, 2011, the CA denied outright the petition for certiorari, on the basis
that petitioners did not file a motion for reconsideration of the order denying the
petition for relief from judgment, a prerequisite for filing a petition for certiorari.
Petitioners filed a Motion for Reconsideration but was denied by the CA on
November 10, 2011.

Issue:
1. Whether or not the petition for relief from judgment was filed within the
reglementary period
2. Whether or not the failure of petitioners’ former counsel to file the notice of
appeal within the reglementary period is excusable negligence
3. Whether or not the CA erred in dismissing outright petitioners’ petition for
certiorari for failure to file a motion for reconsideration of the order denying the
petition for relief from judgment.

Held:
1. No. A petition for relief from judgment must be filed within 60 days after
petitioner learns of the judgment, final order, or proceeding and within six (6)
months from entry of judgment or final order. This court agrees that the petition
for relief from judgment was filed out of time.However, the trial court erred in
counting the 60-day period to file a petition for relief from the date of finality of
the trial court’s decision. Rule 38, Section 3 of the 1997 Rules of Civil Procedure is
clear that the 60-day period must be counted after petitioner learns of the
judgment or final order. The period counted from the finality of judgment or final
order is the six-month period.

Petitioners cannot argue that the period to appeal should be counted from
August 11, 2011, the day petitioners personally received a copy of the trial
court’s decision. Notice of judgment on the counsel of record is notice to the
client. Since petitioners’ counsel received a copy of the decision on January 29,
2010, the period to appeal shall be counted from that date.

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Thus, the decision became final 15 days after January 29, 2010, or on February
13, 2010. Petitioners had six (6) months from February 13, 2010, or until August 12,
2010, to file a petition for relief from judgment.

Since petitioners filed their petition for relief from judgment on September 24,
2010, the petition for relief from judgment was filed beyond six (6) months from
finality of judgment. The trial court should have denied the petition for relief from
judgment on this ground.

2. No. Failure of petitioners’ former counsel to file the notice of appeal within the
reglementary period is not excusable negligence. Even if we assume that
petitioners filed their petition for relief from judgment within the reglementary
period, petitioners failed to prove that their former counsel’s failure to file a
timely notice of appeal was due to a mistake or excusable negligence.

To set aside a judgment through a petition for relief, the negligence must be so
gross "that ordinary diligence and prudence could not have guarded against."
This is to prevent parties from "reviv[ing] the right to appeal [already] lost through
inexcusable negligence."

Petitioners argue that their former counsel’s failure to file a notice of appeal
within the reglementary period was "a mistake and an excusable negligence
due to [their former counsel’s] age." This argument stereotypes and demeans
senior citizens. It asks this court to assume that a person with advanced age is
prone to incompetence. This cannot be done.

3. No. The Court of Appeals correctly denied the petition for certiorari for
petitioners’ failure to file a motion for reconsideration of the order denying the
petition for relief from judgment:

Section 1, Rule 65 of the 1997 Rules of Civil Procedure requires that no appeal or
any plain, speedy, and adequate remedy in the ordinary course of law is
available to a party before a petition for certiorari is filed.

In this case, a motion for reconsideration of the order denying the petition for
relief from judgment is the plain, speedy, and adequate remedy in the ordinary
course of law. Petitioners failed to avail themselves of this remedy. Thus, the
Court of Appeals correctly dismissed petitioners’ petition for certiorari.

Contrary to petitioners’ claim, the questions they raised in their petition for relief
from judgment were not pure questions of law. They raise the authenticity of the
Spouses Bartolome’s signatures on the deed of real estate mortgage and the
allegedly excusable negligence of their counsel. These are questions of fact

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which put at issue the truth of the facts alleged in the petition for relief from
judgment.

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Magdalena Villasi v. Filomeno Garcia, G.R. NO. 190106, January 15, 2014

Facts:

In 1990, Villasi engaged the services of Fil-Garcia Construction, Inc to


construct a 7-storey condominium building in QC. For failure to fully pay, FGCI
initiated a suit for collection of sum of money. Villasi filed an answer denying the
lateral allegations of the complaint, averring that she delivered the total amount
but FGCI accomplished only 28% of the construction. RTC ruled in favor of FGCI.

Villasi appealed with CA, CA reversed the judgment of RTC. FGCI filed a
petition for review on Certiorari, but CA denied the appeal for being filed out of
time. To satisfy the CA judgment, the sheriff levied on a building registered under
Garcia, then later a public auction was scheduled.
To forestall the execution, Garcia filed an affidavit of 3rd party claim to set aside
the sale execution for they are the lawful owners of the building levied by the
sheriff. Garcia claimed that the city assessor made a mistake in the assessment
of the property levied. RTC suspended the execution.

Villasi filed a motion for reconsideration, but it was denied by RTC. Thus this
instant petition.

Issue: Whether or not the CA erred in granting Villasi ownership of the property.

Held: No.

It is a basic principle of law that money judgments are enforceable only


against the property incontrovertibly belonging to the judgment debtor, and if
the property belonging to any third person is mistakenly levied upon to answer
for another man’s indebtedness, such person has all the right to challenge the
levy through any of the remedies provided for under the Rules of Court. The duty
of the sheriff is to levy the property of the judgment debtor not that of a third
person.

The right of a third-party claimant to file a terceria is founded on his title or right
of possession. Corollary thereto, before the court can exercise its supervisory
power to direct the release of the property mistakenly levied and the restoration
thereof to its rightful owner, the claimant must first unmistakably establish his
ownership or right of possession thereon.

Spouses Garcia failed to prove that they have a bona fide title to the building in
question. Aside from their postulation that as title holders of the land, the law
presumes them to be owners of the improvements built thereon, the Spouses

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Garcia were unable to adduce credible evidence to prove their ownership of
the property. In contrast, Villasi was able to satisfactorily establish the ownership
of FGCI thru the pieces of evidence she appended to her opposition.

Although tax declarations or realty tax payment of property are not conclusive
evidence of ownership, nevertheless, they are good indicia of possession in the
concept of owner for no one in his right mind would be paying taxes for a
property that is not in his actual or at least constructive possession. They
constitute at least proof that the holder has a claim of title over the property.

Finally, the issue regarding the piercing of the veil of corporate fiction is
irrelevant in this case. The Spouses Garcia are trying to protect FGCI from liability
by asserting that they, not FGCI, own the levied property. The Spouses Garcia
are asserting their separation from FGCI. FGCI, the judgment debtor, is the
proven owner of the building. Piercing FGCI’s corporate veil will not protect
FGCI from its judgment debt. Piercing will result in the identification of the
Spouses Garcia as FGCI itself and will make them liable for FGCI’s judgment
debt. Sheriff is directed to proceed with the sale on execution.

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Department of Environment and Natural Resources v. United Planners
Consultants, Inc., G.R. No. 212081, February 23, 2015

Facts:

On July 26, 1993, DENR through Land Management Bureau (LMB) entered
into an agreement for consultancy services with UPCI in connection with the
LMB’s Land Resource Management Master Plan Project (LRMMP), under which,
LMB committed to pay a total contract price of P4,337,141. In December 1994,
UPCI completed the work but LMB was able to pay only P2,038,456.30 or 47% of
the total contract price. Despite a finding by the COA that the contract price
84.14% excessive, LMB still assured UPCI that it will pay the remaining liability.

Due to its failure to pay the remaining obligation despite the repeated
demands, UPCI filed a complaint against LMB before the RTC. The case was
subsequently referred to arbitration pursuant to the arbitration clause in the
agreement. The parties, during the preliminary conference, agreed to adopt
the CIAC Rules to govern the arbitration proceedings and to submit respective
draft decisions in lieu or memoranda or arguments on or before April 21, 2010.
The LMB failed to comply on the deadline; its motion for extension was likewise
denied. The arbitral tribunal deemed the latter’s non-submission as waiver, but
declared that it would still consider petitioner’s draft decision if submitted before
May 7, 2010, or the expected date of the final award’s promulgation. LMB filed
its draft decision on May 7, 2010.

The Arbitral tribunal rendered its award in favor of UPCI; denying the LMB’s
motion for reconsideration, claiming that it had already lost jurisdiction over the
case after it had submitted to the RTC its Report together with a copy of the
Arbitral Award. Petitioner then filed a motion for reconsideration in the RTC,
asserting that it was denied the opportunity to be heard when the Arbitral
Tribunal failed to consider its draft decision; it also denied receiving a copy of
the Arbitral Award by either electronic or registered mail. The RTC confirmed the
arbitral award pursuant to Rule 11.2 of Special ADR Rules and issued a writ of
execution upon motion by the respondent, to which petitioner filed a motion to
quash.

RTC Ruling – Denied the motion to quash, finding no merit in the


petitioner’s contention that it was denied due process. It ruled that its May 19,
2010 Motion for Reconsideration was a prohibited pleading under Section 17.2,
Rule 17 of the CIAC Rules and explained that the available remedy to assail an
arbitral award was to file a motion for correction of final award pursuant to
Section 17.143 of the CIAC Rules.

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CA Ruling - dismissed the certiorari petition on two (2) grounds: (a) the
petition essentially assailed the merits of the Arbitral Award, which is prohibited
under Rule 19.7 of the Special ADR Rules; and (b) the petition was filed out of
time, having been filed way beyond 15 days from notice of the RTC’s July 9,
2012 Order, in violation of Rule 19.28 in relation to Rule 19.8 of said Rules which
provide that a special civil action for certiorari must be filed before the CA
within 15 days from notice of the judgment, order, or resolution sought to be
annulled or set aside (or until July 27, 2012).

Issue: Whether or not the CA erred in applying the provisions of the Special ADR
Rules, resulting in the dismissal of petitioner’s special civil action for certiorari.

Held:

NO. RA 9285 or ADR Act of 2004 institutionalized the use of ADR System in
the Philippines, without prejudice to the adoption by the SC of any ADR system
as a means of achieving speedy and efficient means of resolving cases pending
before all courts in the Philippines. The Special ADR Rules do not automatically
govern the arbitration proceedings itself. ADR’s pivotal feature is that it is a
product of party autonomy or the freedom of the parties to make their own
arrangements to resolve their own disputes, pursuant to Rule 2.3 of the Special
ADR Rules.

In this case, the agreement contained an arbitration clause. Hence, when


the case was referred to arbitration, it fell within the coverage of the Special
ADR Rules. However, with respect to the arbitration proceedings itself, the
parties had agreed to adopt the CIAC Rules before the Arbitral Tribunal in
accordance with Rule 2.3 of the Special ADR Rules.

Under Section 17.2, Rule 17 of the CIAC Rules, no motion for


reconsideration or new trial may be sought, but any of the parties may file a
motion for correction of the final award, which shall interrupt the running of the
period for appeal, based on any of the following grounds, to wit:
a. an evident miscalculation of figures, a typographical
or arithmetical error;
b. an evident mistake in the description of any party,
person, date, amount, thing or property referred to in the
award;
c. where the arbitrators have awarded upon a matter
not submitted to them, not affecting the merits of the
decision upon the matter submitted;

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d. where the arbitrators have failed or omitted to resolve
certain issue/s formulated by the parties in the Terms of
Reference (TOR) and submitted to them for resolution,
and
e. where the award is imperfect in a matter of form not
affecting the merits of the controversy.

The motion shall be acted upon by the Arbitral Tribunal or the


surviving/remaining members. Moreover, the parties may appeal the final
award to the CA through a petition for review under Rule 43 of the Rules of
Court.

Records do not show that any of the foregoing remedies were availed of
by petitioner. Instead, it filed the May 19, 2010 Motion for Reconsideration of the
Arbitral Award, which was a prohibited pleading under the Section 17.2, Rule 17
of the CIAC Rules, thus rendering the same final and executory. Accordingly, the
case was remanded to the RTC for confirmation proceedings pursuant to Rule
11 of the Special ADR Rules which requires confirmation by the court of the final
arbitral award. This is consistent with Section 40, Chapter 7 (A) of RA 9285 which
similarly requires a judicial confirmation of a domestic award to make the same
enforceable:

SEC. 40. Confirmation of Award. – The confirmation of a domestic


arbitral award shall be governed by Section 23 of R.A. 876.

A domestic arbitral award when confirmed shall be enforced in the


same manner as final and executory decisions of the regional trial
court.
The confirmation of a domestic award shall be made by the
regional trial court in accordance with the Rules of Procedure to be
promulgated by the Supreme Court.

A CIAC arbitral award need not be confirmed by the regional trial


court to be executory as provided under E.O. No. 1008.

During the confirmation proceedings, petitioners did not oppose the RTC’s
confirmation by filing a petition to vacate the Arbitral Award under Rule 11.2 (D)
of the Special ADR Rules. Neither did it seek reconsideration of the confirmation
order in accordance with Rule 19.1 (h) thereof. Instead, petitioner filed only on
September 10, 2012 a special civil action for certiorari before the CA questioning
the propriety of (a) the RTC Order dated September 12, 2011 granting
respondent’s motion for issuance of a writ of execution, and (b) Order dated
July 9, 2012 denying its motion to quash. Under Rule 19.26 of the Special ADR

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Rules, “[w]hen the Regional Trial Court, in making a ruling under the Special ADR
Rules, has acted without or in excess of its jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction, and there is no appeal or
any plain, speedy, and adequate remedy in the ordinary course of law, a party
may file a special civil action for certiorari to annul or set aside a ruling of the
Regional Trial Court.” Thus, for failing to avail of the foregoing remedies before
resorting to certiorari, the CA correctly dismissed its petition.

Nevertheless, while the Court sanctions the dismissal by the CA of the


petition for certiorari due to procedural infirmities, there is a need to explicate
the matter of execution of the confirmed Arbitral Award against the petitioner, a
government agency, in the light of Presidential Decree No. (PD) 1445, otherwise
known as the “Government Auditing Code of the Philippines.”

Section 26 of PD 1445 expressly provides that execution of money


judgment against the Government or any of its subdivisions, agencies and
instrumentalities is within the primary jurisdiction of the COA, to wit:

SEC. 26. General jurisdiction. The authority and powers of the


Commission shall extend to and comprehend all matters relating to
auditing procedures, systems and controls, the keeping of the
general accounts of the Government, the preservation of vouchers
pertaining thereto for a period of ten years, the examination and
inspection of the books, records, and papers relating to those
accounts; and the audit and settlement of the accounts of all
persons respecting funds or property received or held by them in an
accountable capacity, as well as the examination, audit, and
settlement of all debts and claims of any sort due from or owing to
the Government or any of its subdivisions, agencies and
instrumentalities. The said jurisdiction extends to all government-
owned or controlled corporations, including their subsidiaries, and
other self-governing boards, commissions, or agencies of the
Government, and as herein prescribed, including non-
governmental entities subsidized by the government, those funded
by donation through the government, those required to pay levies
or government share, and those for which the government has put
up a counterpart fund or those partly funded by the government.

From the foregoing, the settlement of respondent’s money claim is still


subject to the primary jurisdiction of the COA despite finality of the confirmed
arbitral award by the RTC pursuant to the Special ADR Rules. Hence, the
respondent has to first seek the approval of the COA of their monetary claim.
This appears to have been complied with by the latter when it filed a “Petition

95
for Enforcement and Payment of Final and Executory Arbitral Award” before the
COA. Accordingly, it is now the COA which has the authority to rule on this
latter petition.

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Corona International vs. CA, G.R. No. 127851. October 18, 2000

Facts:

The RTC of Quezon City rendered a decision in a civil case ordering the
defendant to pay plaintiff a sum money representing the balance of the
contract price for Phase III & IV of the project and the 10% retention of the said
project; indemnification of the damages and attorney’s fees. Also, the
counterclaim interposed by the defendant was dismissed for lack of evidence
to sustain it. The petitioner filed a Motion for Execution of Judgment Pending
Appeal to which private respondent filed an opposition. After the hearing, RTC
granted the motion for execution pending appeal “if only to prevent the
irreparable collapse of” petitioner’s business operations. It is also considered the
appeal taken by private respondent as “patently unmeritorious and would only
result in the delay of the final disposition of the case.”

By filing of the required bond, a writ of execution was issued, on the


strength of which funds of private respondent with the LBP was garnished. The
bank, however, refused to release the said amount, prompting petitioner to file
a Motion to Require Release of Bank Deposit. Private respondent filed a Motion
to Quash Writ of Execution Pending Appeal and Notice of Garnishment alleging
that it had not yet received a copy of the order granting the said motion of the
petitioner which allowed the garnishment. It further contended that the bond
filed by petitioner did not bear the court’s approval.

The RTC denied the Motion to Quash and ordered the LBP to release and
turn over to the court sheriff from enforcing both the Writ of Execution and
Notice of Garnishment against the private respondent. On appeal, CA nullify
and set aside the order of the RTC and issued a writ of preliminary injunction
enjoining the sheriff from enforcing the said writ and notice against the private
respondent. Hence, this petition for review.

Issue: WON there is a basis to sustain execution pending appeal ordered by the
RTC

Held: No.

Based on Section 2, Rule 39 of the Rules of Civil Procedure that lays down
the rule for execution pending appeal, categorized as discretionary execution,
it is evident in the said section that a primary consideration for allowing
execution pending appeal would be the existence of good reasons. It can be
noted that the reason of the RTC in granting execution pending appeal was to

97
prevent the irreparable collapse of petitioner’s business operation and that
private respondent’s appeal is patently unmeritorious and would result in the
delay of the final disposition of the case. However, such reason is not good
enough sustain such execution. As manifested, the petitioner has an application
for the expansion of its operations with the National Telecommunications
Commission. Evidently, such an application would not have been filed had
petitioner truly been in the brink of financial bankruptcy. Moreover, the latest
financial report submitted by petitioner to the Securities and Exchange
Commission, on the records, would readily show that its assets exceed its
liabilities.

In upholding the disallowance of the execution pending appeal ordered


by the trial court, albeit on different grounds, that the court are guided by the
rule that execution pending appeal must be strictly construed being an
exception to the general rule. So, too, execution pending appeal is not to be
availed of and applied routinely, but only in extraordinary circumstances. Here,
with the alleged collapse of petitioner's business operations rendered doubtful,
the Court found no good reason to order execution pending appeal.

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Caluag vs. Pecson, October 29, 1948, G.R. No. L-1403

Facts:

This is a petition for certiorari and prohibition filed by the petitioners on the
ground that the respondent judge acted without or in excess of the jurisdiction
of the court in declaring the petitioners guilty of contempt of court for not
complying or performing the order of the court (requiring the petitioners to
execute a deed of sale in favor of plaintiff.)

The first ground on which the petition is based is that the judgment of the
court which the petitioners are ordered to perform has not yet become final.
The other two grounds alleged by the petitioners in support of the present
petition for certiorari are: that plaintiff's action abated or was extinguished upon
the death of the plaintiff Fortunato Alejo, because his right of legal redemption
was a personal one, and therefore not transferable to his successors in interest;
and that, even assuming that it is a personal one and therefore transferable, his
successors in interest have failed to secure the substitution of said deceased by
his legal representative under section 17, Rule 3.

Issue: Whether or not the order of contempt is proper.

Held: Although the parties may be held guilty of indirect contempt, the order
was improper.

According to the facts, the case has already reached a decision by the
Supreme Court and the parties’ attorney were already notified of such. Thus,
they are final and executory. On the other grounds, they do not deserve any
serious consideration.

However, although not alleged, we may properly take judicial notice of


the fact that the respondent Judges have acted without jurisdiction in
proceeding against and declaring the petitioners guilty of contempt of court.

The contempt supposed to have been committed by the petitioners is not


a direct contempt under section 1, Rule 64, for it is not a misbehavior in the
presence of or so near a court or judge as to interrupt the administration of
justice. It is an indirect contempt or disobedience of a lawful order of the court,
under section 3, Rule 64, of the Rules of Court.

According to sections 4 and 5 of said rule, where a contempt under


section 3 has been committed against a superior court or judge the charge may
be filed with such superior court, and the accused put under custody; but if the

99
hearing is ordered to be had forthwith, the accused may be released from
custody upon filing a bond in an amount to be fixed by the court for his
appearance to answer the charge.

From the record it appears that no charge for contempt was filed against
the petitioners nor was a trial held. The only proceeding had in this case which
led to the conviction of the defendants.

Although the Court of First Instance has power conferred by law to punish
as guilty of indirect contempt a party who disobeys its order or judgment, it did
not have or acquire jurisdiction of the particular case under consideration to
declare the petitioners guilty of indirect contempt, and order their confinement
until they have executed the deed of conveyance in question, because neither
a charge has been filed against them nor a hearing thereof held as required by
law.

In the present case, in view of the failure of the petitioners to execute the
deed of conveyance directed in the judgment of the court, the respondent
may, under section 10, Rule 39, either order its execution by some other person
appointed or designated by the court at the expense of the petitioners, or enter
a judgment divesting the title of the petitioner over the property in question and
vesting it in Leon Alejo, administrator of estate of the deceased Fortunato Alejo,
and such judgment has the force and effect of a conveyance executed in due
form of law.

In view of the foregoing, the order of the court ordering the confinement
of the petitioners in the provincial jail until they have complied with the order of
the court, is set aside without costs.

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Bank of the Philippine Islands Securities Corp. vs. Edgardo
Guevara, G.R. No. 167052, March 11, 2015

Facts:

One of the responsibilities of respondent Edgardo Guevara, then President


of Philsec Investment Corporation (PHILSEC) which was subsequently bought by
petitioner, is to resolve the outstanding loans obtained by Ventura Ducat from
Philsec and AIFL which already amounted to US$3.1 million. Ducat proposed to
settle his debts by an exchange of assets. He owned several pieces of real
estate in Houston, Texas, in partnership with Drago Daic, President of 1488, Inc.,
a U.S.-based corporation. Negotiations finally culminated in an agreement
where ATHONA, a company wholly owned by PHILSEC and AIFL, would buy the
Harris County property from 1488, Inc. for the price of US$2,807,209.02. Upon its
receipt of the initial payment of US$2.5 million from ATHONA, 1488, Inc. would
then fully pay Ducat’s debts to PHILSEC and AIFL in the same amount. However,
after acquiring the Harris County property, ATHONA had difficulty selling the
same. Despite repeated demands by 1488, Inc., ATHONA failed to pay its
promissory note for the balance of the purchase price for the Harris County
property.

1488, Inc. instituted a suit against PHILSEC, AIFL, and ATHONA before U.S.
District Court. PHILSEC, AIFL, and ATHONA filed counterclaims against 1488, Inc.,
Daic, Craig, Ducat, and Guevara for the recovery of damages and excess
payment or, in the alternative, the rescission of the sale of the Harris County
property. Before the referral of the case to the jury for verdict, the U.S. District
Court dropped respondent for lack of evidence to support the allegations
against him. Respondent then moved in open court to sanction petitioner
(formerly PHILSEC), AIFL, and ATHONA based on Rule 11 of the U.S. Federal Rules
of Civil Procedure. The said court ruled favorably on respondent’s pending
motion for sanction and ordered Philsec Investment Corporation A/K/A BPI
Securities, Inc., and Ayala International Finance Limited to jointly and severally
pay to Guevara $49,450 within 30 days of the entry of this order. On appeal, the
U.S. Court of Appeals rendered its decision vacating the award in favor of
respondent for being rendered without due process, and remanded the issue to
the U.S. District Court.

Through a letter, respondent demanded that petitioner pay the amount


of US$49,450.00 awarded by the U.S. District Court in his favor. Given the
continuous failure and/or refusal of petitioner to comply with the said Order of
the U.S. District Court, respondent instituted an action for the enforcement of the
same before the RTC of Makati City. The trial court ruled in favor of Guevara. On
appeal, the CA affirmed the said decision. Petitioner’s motion for

101
reconsideration was denied. Petitioner filed this petition for review before the
Supreme Court contending that it was not accorded by the CA the right to
refute the foreign judgment pursuant to Rule 39, Section 48 of the Rules of Court
because the appellate court gave the effect of res judicata to the said foreign
judgment.

Issue: Whether or not the Court of Appeals erred in giving the effect of res
judicata to the said foreign judgment.

Held: No.

As stated in Section 48, Rule 39, the actionable issues are generally
restricted to a review of jurisdiction of the foreign court, the service of personal
notice, collusion, fraud, or mistake of fact or law. The limitations on review are in
consonance with a strong and pervasive policy in all legal systems to limit
repetitive litigation on claims and issues. Otherwise known as the policy of
preclusion, it seeks to protect party expectations resulting from previous
litigation, to safeguard against the harassment of defendants, to insure that the
task of courts not be increased by never-ending litigation of the same disputes,
and – in a larger sense – to promote what Lord Coke in the Ferrer’s Case of 1599
stated to be the goal of all law: “rest and quietness.” If every judgment of a
foreign court were reviewable on the merits, the plaintiff would be forced back
on his/her original cause of action, rendering immaterial the previously
concluded litigation.

Also relevant herein are the following pronouncements of the Court in Minoru
Fujiki v. Marinay:
Philippine courts cannot presume to know the foreign laws under
which the foreign judgment was rendered. They cannot substitute their
judgment on the status, condition and legal capacity of the foreign
citizen who is under the jurisdiction of another state. Thus, Philippine courts
can only recognize the foreign judgment as a fact according to the rules
of evidence.
Section 48(b), Rule 39 of the Rules of Court provides that a foreign
judgment or final order against a person creates a “presumptive
evidence of a right as between the parties and their successors in interest
by a subsequent title.” Moreover, Section 48 of the Rules of Court states
that “the judgment or final order may be repelled by evidence of a want
of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake
of law or fact.” Thus, Philippine courts exercise limited review on foreign
judgments. Courts are not allowed to delve into the merits of a foreign
judgment. Once a foreign judgment is admitted and proven in a

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Philippine court, it can only be repelled on grounds external to its merits,
i.e., “want of jurisdiction, want of notice to the party, collusion, fraud, or
clear mistake of law or fact.” The rule on limited review embodies the
policy of efficiency and the protection of party expectations, as well as
respecting the jurisdiction of other states.

As the foregoing jurisprudence had established, recognition and


enforcement of a foreign judgment or final order requires only proof of fact of
the said judgment or final order. In an action in personam, as in the case at bar,
the foreign judgment or final order enjoys the disputable presumption of validity.
It is the party attacking the foreign judgment or final order that is tasked with the
burden of overcoming its presumptive validity. A foreign judgment or final order
may only be repelled on grounds external to its merits, particularly, want of
jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law
or fact.

The order made by the U.S. District Court is presumptive evidence of the
right of respondent to demand from petitioner the payment of US$49,450.00
even in this jurisdiction. Petitioner was not able to discharge the burden of
overcoming the presumptive validity of said order. Petitioner attempts to
convince the Court that it is necessary to look into the merits of the said order
because the U.S. District Court committed clear mistake of law and fact in
issuing the same. The Court, however, is not convinced. A Philippine court will
not substitute its own interpretation of any provision of the law or rules of
procedure of another country nor review and pronounce its own judgment on
the sufficiency of evidence presented before a competent court of another
jurisdiction. Any purported mistake petitioner attributes to the U.S. District Court
in the latter’s issuance of the said order would merely constitute an error of
judgment in the exercise of its legitimate jurisdiction, which could have been
corrected by a timely appeal before the U.S. Court of Appeals.

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