Cause of Action – Rule 2
JUANA COMPLEX HOMEOWNERS VS FIL-ESTATE LAND
FACTS:
Juana Complex I Homeowners Association, Inc. (JCHA), together with individual
residents of Juana Complex I and other neighboring subdivisions, instituted a
complaint for damages, in its own behalf and as a class suit representing the regular
commuters and motorists of Juana Complex I and neighboring subdivisions who
were deprived of the use of La Paz Road, against Fil-Estate Land, Inc.
Accordingly, JCHA, et al. also prayed for the immediate issuance of a Temporary
Restraining Order (TRO) or a writ of preliminary injunction (WPI) to enjoin Fil-
Estate, et al. from stopping and intimidating them in their use of La Paz Road. Fil-
Estate, et al. filed a motion to dismiss arguing that the complaint failed to state a
cause of action and that it was improperly filed as a class suit.
They claim that the excavation of La Paz Road would not necessarily give rise to a
common right or cause of action for JCHA, etal. against them since each of them has
a separate and distinct purpose and each may be affected differently than the
others. With regard to the issuance of the WPI, the defendants averred that JCHA,
et al. failed to show that they had a clear and unmistakable right to the use of La
Paz Road; and further claimed that La Paz Road was a torrens registered private
road and there was neither a voluntary nor legal easement constituted over it.
ISSUES: Whether or not the complaint was properly filed as a class suit?
HELD:The necessary elements for the maintenance of a class suit are:1) the subject
matter of controversy is one of common or general interest to many persons;2) the
parties affected are so numerous that it is impracticable to bring them all to court;
and3) the parties bringing the class suit are sufficiently numerous or representative
of the class and can fully protect the interests of all concerned.
In this case, the suit is clearly one that benefits all commuters and motorists who
use La Paz Road. “The individuals sought to be represented by private respondents
in the suit are so numerous that it is impracticable to join them all as parties and be
named individually as plaintiffs in the complaint.”
NOTES:
Whether or not the complaint states a cause of action?
The question of whether the complaint states a cause of action is determined by its
averments regarding the acts committed by the defendant. Thus, it must contain a
concise statement of the ultimate or essential facts constituting the plaintiff’s cause
of action. The test of sufficiency of facts alleged in the complaint as constituting a
cause of action is whether or not admitting the facts alleged, the court could render
a valid verdict in accordance with the prayer of said complaint. In the present case,
the Court finds the allegations in the complaint sufficient to establish a cause of
action
A writ of preliminary injunction is available to prevent a threatened or continuous
irremediable injury to parties before their claims can be thoroughly studied and
adjudicated. The requisites for its issuance are: (1) the existence of a clear and
unmistakable right that must be protected; and (2) an urgent and paramount
necessity for the writ to prevent serious damage. For the writ to issue, the right
sought to be protected must be a present right, a legal right which must be shown
to be clear and positive. This means that the persons applying for the writ must
show that they have an ostensible right to the final relief prayed for in their
complaint.
DEL ROSARIO VS FEBTC
Petitioner Davao Timber Corporation (Davao Timber) and respondent Private
Development Corporation of the Philippines (Private Development) entered into a
loan agreement under which Private Development extended to Davao Timber a
foreign currency loan and a peso loan. The loans were secured by real estate
mortgages over six parcels of land, one of which was registered in the name of
petitioner Ernesto C. Del Rosario (Rosario). The loan left Petitioners Davao Timber
and Rosario with a substantial amount of outstanding balance from the
aforementioned loans. Petitioners Davao Timber and Rosario then filed a complaint
against Private Development for violation of Usury Law, annulment of contract and
damages This Court ordered Davao Timber and Rosario to pay Php 1.4 Million to
Private Development. It must also be noted that pending the decision rendered by
the Supreme Court, Private Development assigned its rights over the receivables
from Davao Timber and Rosario. Thereafter, Davao Timber and Rosario entered into
a Memorandum of Agreement with Far East agreeing to pay and actually paid Far
East.
Thus, Davao Timber and Rosario filed a complaint (first complaint) before the
Regional Trial Court of Makati (RTC) for the recovery of the excess payment made
from Private Development and Far East. RTC ordered Private Development to pay
Davao Timber and Rosario while the complaint against Far East was dismissed for
lack of cause of action. On appeal, the CA held that despite the excess payment of
Php 5 Million, only the amount of P965,000 from Far East may be recovered by
Cause of Action – Rule 2
Davao Timber as claimed by it in the complaint. Such decision was affirmed by this
Court.
Davao Timber and Rosario then filed a complaint (second complaint) against Far
East for the recovery of the balance of the excess payment in the amount of Php
4.335 Million before the Regional Trial Court of Makati. The trial court dismissed the
complaint on the basis of res judicata and splitting of the cause of action. The trial
court also held that the decision in the first complaint had already become final and
executory and that the Notice of Satisfaction of Judgment was already filed by the
parties.
ISSUE:Whether or not the complaint is dismissible on the ground of res judicata and
splitting of the case
HELD: Section 49(b) enunciates the first rule of res judicata known as “bar by prior
judgment” or “estoppel by judgment,” which makes the judgment rendered in the
first case an absolute bar to the subsequent action since that judgment is conclusive
not only as to the matters offered and received to sustain it but also as to any other
matter which might have been offered for that purpose and which could have been
adjudged therein. The second rule of res judicata embodied in Section 47(c), Rule
39 is “conclusiveness of judgment”. It refers to a situation where the judgment in
the prior action operates as an estoppel only as to the matters actually determined
or which were necessarily included therein.
The case at bar satisfies the four essential requisites of “bar by prior judgment,” viz:
(a) finality of the former judgment, (b) the court which rendered it had jurisdiction
over the subject matter and the parties, (c) it must be a judgment on the merits,
and (d) there must be, between the first and second actions, identity of parties,
subject matter and causes of action.
There is no doubt that the judgment on appeal relative to the first complaint was a
final judgment. Not only did it dispose of the case on the merits; it also became
executory as a consequence of the denial of Far East‘s motion for reconsideration
and appeal. Neither is there room to doubt that the judgment in the first complaint
was on the merits for it determined the rights and liabilities of the parties.
Right or wrong, judgment bars another case based upon the same cause of action if
the same facts or evidence would sustain both, the two actions are considered the
same within the rule that the judgment in the former is a bar to the subsequent
action. In the two cases, Davao Timber and Rosario imputed to Far East the same
alleged wrongful act of mistakenly receiving and refusing to return an amount in
excess of what was due it in violation of their right to a refund. The same facts and
evidence presented in the first complaint were the very same facts and evidence
that petitioners presented in the second complaint.
Section 4 of Rule 2 of the Rules of Court proscribes a party from dividing a single or
indivisible cause of action into several parts or claims and instituting two or more
actions based on it. Because the plaintiff cannot divide the grounds for recovery, he
is mandated to set forth in his first action every ground for relief which he claims to
exist and upon which he relies; he cannot be permitted to rely upon them by
piecemeal in successive actions to recover for the same wrong or injury. It is well
established, however, that a party cannot, by varying the form of action or adopting
a different method of presentinghis case, or by pleading justifiable circumstances as
herein Davao Timber and Rosario are doing, escape the operation of the principle
that one and the same cause of action shall not be twice litigated.
PROGRESSIVE DEVT CORP VS CA
Facts: The City Council of QC passed an ordinance known as the Market
Code of QC, which imposed a 5% supervision fee on gross receipts on
rentals or lease of privately-owned market spaces in QC.
In case of failure of the owners of the market spaces to pay the tax for three
consecutive months, the City shall revoke the permit of the privately-owned
market to operate.
Progressive Development Corp, owner and operator of Farmer’s Market,
filed a petition for prohibition against QC on the ground that the tax
imposed by the Market Code was in reality a tax on income, which the
municipal corporation was prohibited by law to impose.
Issue: Whether or not the supervision fee is an income tax or a license fee
Held: It is a license fee. A LICENSE FEE is imposed in the exercise of the
police power primarily for purposes of regulation, while TAX is imposed
under the taxing power primarily for purposes of raising revenues.
If the generating of revenue is the primary purpose and regulation is merely
incidental, the imposition is a tax; but if regulation is the primary purpose,
Cause of Action – Rule 2
the fact that incidentally, revenue is also obtained does not make the
imposition a tax.
To be considered a license fee, the imposition must relate to an occupation
or activity that so engages the public interest in health, morals, safety, and
development as to require regulation for the protection and promotion of
such public interest; the imposition must also bear a reasonable relation to
the probable expenses of regulation, taking into account not only the costs
of direct regulation but also its incidental consequences.
In this case, the Farmers’ Market is a privately-owned market established
for the rendition of service to the general public. It warrants close
supervision and control by the City for the protection of the health of the
public by insuring the maintenance of sanitary conditions, prevention of
fraud upon the buying public, etc.
Since the purpose of the ordinance is primarily regulation and not revenue
generation, the tax is a license fee. The use of the gross amount of stall
rentals as basis for determining the collectible amount of license tax does
not, by itself, convert the license tax into a prohibited tax on income.
Such basis actually has a reasonable relationship to the probable costs of
regulation and supervision of Progressive’s kind of business, since ordinarily,
the higher the amount of rentals, the higher the volume of items sold.
The higher the volume of goods sold, the greater the extent and frequency
of supervision and inspection may be required in the interest of the buying
public.
Facts: The City Council of Quezon City adopted Ordinance 7997 (1969)
where privately owned and operated public markets to pay 10% of the gross
receipts from stall rentals to the City, as supervision fee. Such ordinance
was amended by Ordinance 9236 (1972), which imposed a 5% tax on gross
receipts on rentals or lease of space in privately-owned public markets in
Quezon City. Progressive Development Corp., owner and operator of
Farmer’s Market and Shopping Center, filed a petition for prohibition
against the city on the ground that the supervision fee or license tax
imposed is in reality a tax on income the city cannot impose.
Issue: Whether the supervision fee / license tax is a tax on income
Held: The 5% tax imposed in Ordinance 9236 does not constitute a tax on
income, nor a city income tax (distinguished from the national income tax
by the Tax Code) within the meaning of Section 2 (g) of the Local Autonomy
Act, but rather a license tax or fee for the regulation of business in which
the company is engaged. To be considered a license fee, the imposition
must relate to an occupation or activity that so engages the public interest
in health, morals, safety and development as to require regulations for the
protection and promotion of such public interest; the imposition must also
bear a reasonable relation to the probable expenses of the regulation,
taking into account not only the costs of direct regulation but also its
incidental consequences as well. The gross receipts from stall rentals have
been used only as a basis for computing the fees or taxes due to the city to
cover the latter’s administrative expenses. The use of the gross amount of
stall rentals, as basis for the determination of the collectible amount of
license tax, does not by itself convert or render the license tax into a
prohibited city tax on income. For ordinarily, the higher the amount of stall
rentals, the higher the aggregate volume of foodstuffs and related items
sold in the privately owned market; and the higher the volume of goods sold
in such market, the greater extent and frequency of inspection and
supervision that may be reasonably required in the interest of the buying
public.
JOSEPH VS BAUTISTA
https://www.scribd.com/doc/273438645/Joseph-v-Bautista-170-SCRA-540
FLORES VS MALLARE-PHILIPPS
Flores sued the respondents for refusing to pay him certain amount of money as
alleged in the complaint:-first cause of action alleged in the complaint was against
respondent Ignacio Binongcal for refusing to pay the amount of P11,643.00
representing cost of truck tires which he purchased on credit from petitioner on
various occasions from August to October, 1981;-second cause of action was
against respondent Fernando Calion for allegedly refusing to pay the amount of
P10,212.00 representing cost of truck tires which he purchased on credit from
petitioner on several occasions from March, 1981 to January, 1982.The action was
opposed by an action to dismiss for lack of jurisdiction. Under Sec 19 of BP 129, the
regional trial court had exclusive original jurisdiction if the amount of the demand is
Cause of Action – Rule 2
more than P20,000.That although, the other respondent was indebted in the
amount of P10, 212.00, his obligation was separate and distinct from that of the
other respondent. The trial court by Judge Mallare (one of the respondents)
dismissed the complaint for lack of jurisdiction.Plaintiff appealed by certiorari in
Supreme Court.

Issue: WON the trial court correctly ruled on the application of the permissive
joinder of parties under the Rules of Court.

Ruling: In cases of permissive joinder of parties, whether as plaintiffs or as

defendants, under Section 6 of Rule 3, the total of all the claims shall now furnish
the jurisdictional test. Needless to state also, if instead of joining or being joined in
one complaint separate actions are filed by or against the parties, the amount
demanded in each complaint shall furnish the jurisdictional test. In the case at bar,
the lower court correctly held that the jurisdictional test is subject to the rules on
joinder of parties pursuant to Section 5 of Rule 2 and Section 6 of Rule 3 of the
Rules of Court and that, after a careful scrutiny of the complaint, it appears that
there is a misjoinder of parties for the reason that the claims against respondents
Binongcal and Calion are separate and distinct and neither of which falls within its
jurisdiction. Section 6 of Rule 3 which provides as follows: Permissive joinder of
parties.-All persons in whom or against whom any right to relief in respect to or
arising out of the same transaction or series of transactions is alleged to exist,
whether jointly, severally, or in the alternative, may, except as otherwise provided
in these rules, join as plaintiffs or be joined as defendants in one complaint, where
any question of law or fact common to all such plaintiffs or to all such defendants
may arise in the action; but the court may make such orders as may be just to
prevent any plaintiff or defendant from being embarrassed or put to expense in
connection with any proceedings in which he may have no interest