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Fortune Motors, (Phils.), Inc. vs. Court of Appeals Young Auto Supply Co. vs.

ng Auto Supply Co. vs. Court of Appeals the Regional Trial Court is either the place where the defendant
resides or may be found or the place where the plaintiff resides. If
Same; Same; Venue in case of personal actions.—Personal Remedial Law; Actions; Venue; A corporation is in a plaintiff opts for the latter, he is limited to that place.
actions upon the other hand, may be instituted in the Court of metaphysical sense a resident of the place where its principal office
First Instance where the defendant or any of the defendants is located as stated in the articles of incorporation.—A corporation Same; Same; Same; Same; Venue of personal actions should
resides or may be found, or where the plaintiff or any of the has no residence in the same sense in which this term is applied be at the place of abode or place where plaintiffs actually reside
plaintiffs resides, at the election of the plaintiff. to a natural person. But for practical purposes, a corporation is in not in domicile or legal residence.—“Resides” in the rules on venue
Same; Same; Primary objective and nature of an action for a metaphysical sense a resident of the place where its principal on personal actions means the place of abode, whether permanent
annulment or rescission of contract is to recover real property.—A office is located as stated in the articles of incorporation (Cohen v. or temporary, of the plaintiff or defendants as distinguished from
prayer for annulment or rescission of contract does not operate to Benguet Commercial Co., Ltd., 34 Phil. 526 [1916] Clavecilla “domicile” which denotes a fixed permanent residence
efface the true objectives and nature of the action which is to Radio System v. Antillon, 19 SCRA 379 [1967]). The Corporation
recover real property. Code precisely requires each corporation to specify in its articles venue of personal actions should be at the place of abode or place
Same; Same; Same; An action for the annulment or rescission of incorporation the “place where the principal office of the where plaintiffs actually reside, not in domicile or legal residence.
of a sale of real property does not operate to efface the fundamental corporation is to be located which must be within the Philippines”
and prime objective and nature of the case which is to recover said (Sec. 14 [3]). The purpose of this requirement is to fix the There is no question that private respondent as plaintiff in
realproperty.—While it is true that petitioner does not directly seek residence of a corporation in a definite place, instead of allowing it the Civil Case is a legal resident of Cebu City. Her
the recovery of title or possession of the property in question, his to be ambulatory. parents live there. However, it cannot also be denied that
action for annulment of sale and his claim for damages are closely at the time of her filing of the complaint against
intertwined with the issue of ownership of the building which, Dr. Antonio A. Lizares, Inc. vs. Caluag petitioners, she was a temporary resident of Bacolod City.
under the law, is considered immovable property, the recovery of She was then employed with the Corazon Locsin
which is petitioner’s primary objective. The prevalent doctrine is The Court of Appeals and the Court of First Instance of Montelibano Memorial Hospital, Bacolod City, as resident
that an action for the annulment or rescission of a sale of real Rizal, Quezon City Branch, held that Civil Case No. Q-5197 physician. Moreover, the acts complained of were
property does not operate to efface the fundamental and prime of the latter court is an action in personam, and that, as committed in Bacolod City. The private respondents were
objective and nature of the case, which is to recover said real such, it does not fall within the purview of said section 3, all residents of Bacolod City at the time of the bringing of
property. It is a real action. Respondent Court, therefore, did not and was properly instituted in the court of first instance of the action. Though Tan’s employment was only temporary
err in dismissing the case on the ground of improper venue (Sec. the province in which Cacnio, as plaintiff in said case, there was no showing when this employment will end.
2, Rule 4) which was timely raised. resided, pursuant to section 1 of said rule 5. Justice would be better served if the complaint were heard
We are unable to share such view. Although the and tried in Bacolod City where all the parties resided.
Clavecilla Radio System vs. Antillon, et al. immediate remedy sought by Cacnio is to compel petitioner
to accept the tender of payment allegedly made by the Capati vs. Ocampo
Corporation Law; Domicile of a corporation.—The residence former, it is obvious that this relief is merely the first step
of a corporation is the place where its principal office is to establish Cacnio's title to the real property adverted to That all actions arising out, or relating to this
established. It can be sued in that place, not in the place where its above. Moreover, Cacnio's complaint is a means resorted to contract may be instituted in the Court of First
branch office is located. by him in order that he could retain the possession of said Instance of the City of Naga.”
Actions; Venue; Venue of a tort action against a, corporation property. In short, venue in the main case was improperly
in inferior court.—Where the action filed against a corpo-ration in the laid and the Court of First Instance of Rizal, Quezon City Same; Same; Remedial Law; Venue; Stipulation of the parties
inferior court is based on tort, it should be filed in Branch, should have granted the motion to dismiss. that all actions arising or relating to their contract may be
the place where the corporation has its principal office, not in the instituted in the CFI of the City of Naga, not restrictive, but
place where it has its branch office. To allow an action against a Esuerte vs. Court of Appeals permissive, Venue of action in Pampanga CFI, where plaintiff
corporation to be instituted in any place where a corporate entity resides, properly laid; Case at bar.—We hold that the stipulation
has its branch offices would create confusion and work untold Civil Procedure; Actions; Venue; The option of the plaintiff in as to venue in the contract in question is simply permissive. By
inconvenience to the corporation. personal actions cognizable by the Regional Trial Court is either the said stipulation, the parties did not agree to file their suits
Same; When provision, “may be served with summons”, the place where the defendant resides or may be found or the place solely and exclusively with the Court of First Instance of Naga.
applies.—The phrase “may be served with summons” in section 1, where the plaintiff resides.—The choice of venue for personal They merely agreed to submit their disputes to the said court,
Rule 4 of the Revised Rules of Court does not apply when the actions cognizable by the Regional Trial Court is given to the without waiving their right to seek recourse in the court
defendant resides in the Philippines, for, in such a case, he may plaintiff but not to the plaintiff’s caprice because the matter is specifically indicated in Section 2 (b), Rule 4 of the Rules of Court.
be sued only in the municipality of his residence, regardless of the regulated by the Rules of Court (see Clavecilla Radio System v. Since the complaint has been filed in the Court of First Instance
place where he may be found and served with summons. Antillon, 19 SCRA 379). The rule on venue, like other procedural of Pampanga, where the plaintiff resides, the venue of action is
Same; Plaintiff may not choose venue of action.—The laying of rules, are designed to insure a just and orderly administration of properly laid in accordance with Section 2 (b), Rule 4 of the Rules
the venue of an action is not left to plaintiff’s caprice because the justice or the impartial and evenhanded determination of every of Court.
matter is regulated by the Rules of Court. action and proceeding (Sy v. Tyson Enterprises Inc., 19 SCRA
367). The option of the plaintiff in personal actions cognizable by
special action be permitted to challenge belatedly the wrong Mangila vs. Court of Appeals
venue, which is deemed waived.
But the contract between them provides that "** All suits Same; Same; Same; Courts; Actions; Dismissal of; The trial In the instant case, it was established in the lower court
arising out of this Agreement shall be filed with/in the court cannot pre-empt the defendant’s prerogative to object to the that petitioner resides in San Fernando, Pampanga35 while
proper Courts of Quezon City” without mention of Tacloban private respondent resides in Parañaque City.36 However,
City. The question is whether this stipulation had the improper laying of the venue by motu proprio dismissing the case. this case was brought in Pasay City, where the business of
effect of effectively eliminating the latter as an optional —Thus, unless and until the defendant objects to the venue in a private respondent is found. This would have been
venue and limiting litigation between UNIMASTERS and motion to dismiss, the venue cannot be truly said to have been permissible had private respondent’s business been a
KUBOTA only and exclusively to Quezon City. improperly laid, as for all practical intents and purposes, the corporation, just like the case in Sy v. Tyson Enterprises,
In light of all the cases above surveyed, and the general venue, though technically wrong, Inc. However, as admitted by private respondent in her
postulates distilled therefrom, the question should receive Complaint37 in the lower court, her business is a sole
a negative answer. Absent additional words and may be acceptable to the parties for whose convenience the rules proprietorship, and as such, does not have a separate
expressions definitely and unmistakably denoting the on venue had been devised. The trial court cannot pre-empt the juridical personality that could enable it to file a suit in
parties’ desire and intention that actions between them defendant’s prerogative to object to the improper laying of the court.38 In fact, there is no law authorizing sole
should be ventilated only at the place selected by them, venue by motu proprio dismissing the case. Indeed, it was grossly proprietorships to file a suit in court.39
Quezon City—or other contractual provisions clearly erroneous for the trial court to have taken a procedural short-cut A sole proprietorship does not possess a juridical
evincing the same desire and intention—the stipulation by dismissing motu proprio the complaint on the ground of personality separate and distinct from the personality of
should be construed, not as confining suits between the improper venue without first allowing the procedure outlined in the owner of the enterprise.40 The law merely recognizes
parties only to that one place, Quezon City, but as allowing the Rules of Court to take its proper course. Although we are for the existence of a sole proprietorship as a form of business
suits either in Quezon City or Tacloban City, at the option the speedy and expeditious resolution of cases, justice and organization conducted for profit by a single individual and
of the plaintiff (UNIMASTERS in this case). fairness take primary importance. The ends of justice require that requires its proprietor or owner to secure licenses and
respondent trial court faithfully adhere to the rules of procedure permits, register its business name, and pay taxes to the
Dacoycoy vs. Intermediate Appellate Court to afford not only the defendant, but the plaintiff as well, the right national government.41 The law does not vest a separate
to be heard on his cause. legal personality on the sole proprietorship or empower it
The motu proprio dismissal of petitioner’s complaint by to file or defend an action in court.42
respondent trial court on the ground of improper venue is Davao Light & Power Co., Inc. vs. Court of Appeals Thus, not being vested with legal personality to file this
plain error, obviously attributable to its inability to case, the sole proprietorship is not the plaintiff in this case
distinguish between jurisdiction and venue. It cannot be disputed that petitioner’s principal office is in but rather Loreta Guina in her personal capacity. In fact,
Cebu City, per its amended articles of incorporation15 and the complaint in the lower court acknowledges in its
Questions or issues relating to venue of actions are by-laws.16 An action for caption that the plaintiff and defendant are Loreta Guina
basically governed by Rule 4 of the Revised Rules of and Anita Mangila, respectively.
Court. It is said that the laying of venue is procedural rather than damages being a personal action,17 venue is determined
substantive. pursuant to Rule 4, section 2 of the Rules of Court, to wit: Chua vs. Total Office Products and Services (Topros), Inc.
It relates to the jurisdiction of the court over the person Venue of personal actions.—All other actions may be commenced
rather than the subject matter. Provisions relating to and tried where the plaintiff or any of the principal plaintiffs Actions; Loans; Real Estate Mortgages; An action to annul a
venue establish a relation between the plaintiff and the resides, or where the defendant or any of the principal defendants contract of loan and its accessory real estate mortgage is a
defendant and not between the court and the subject resides, or in the case of a non-resident defendant where he may personal action; In a personal action, the plaintiff seeks the
matter. Venue relates to trial not to jurisdiction, touches be found, at the election of the plaintiff.18 recovery of personal property, the enforcement of a contract or the
more of the convenience of the parties rather than the Private respondent is not a party to any of the contracts recovery of damages; A real action is an action affecting title to
substance of the case.4 presented before us. He is a complete stranger to the real property or for the recovery of possession, of for partition or
covenants executed between petitioner and NAPOCOR, condemnation of, orforeclosure of mortgage on, real property.—
Same; Same; Same; Where a defendant fails to challenge despite his protestations that he is privy thereto, on the Well-settled is the rule
timely the venue in a motion to dismiss, and allows the trial to be rather flimsy ground that he is a member of the public for that an action to annul a contract of loan and its accessory real
held and a decision to be rendered, he cannot appeal or belatedly whose benefit the electric generating equipment subject of estate mortgage is a personal action. In a personal action, the
challenge the wrong venue.—Dismissing the complaint on the the contracts were leased or acquired. We are likewise not plaintiff seeks the recovery of personal property, the enforcement
ground of improper venue is certainly not the appropriate course persuaded by his argument that the allegation or of a contract or the recovery of damages. In contrast, in a real
of action at this stage of the proceeding, particularly as venue, in representation made by petitioner in either the complaints action, the plaintiff seeks the recovery of real property, or, as
inferior courts as well as in the courts of first instance (now RTC), or answers it filed in several civil cases that its residence is indicated in Section 2 (a), Rule 4 of the then Rules of Court, a real
may be waived expressly or impliedly. Where defendant fails to in Davao City should estop it from filing the damage suit action is an action affecting title to real property or for the
challenge timely the venue in a motion to dismiss as provided by before the Cebu courts. Besides there is no showing that recovery of possession, or for partition or condemnation of, or
Section 4 of Rule 4 of the Rules of Court, and allows the trial to be private respondent is a party in those civil cases or that he foreclosure of mortgage on, real property
held and a decision to be rendered, he cannot on appeal or in a relied on such representation by petitioner.
In the same vein, the action for annulment of a real estate is true only when the third-party plaintiff and third-party action before the Regional Trial Court, the counterclaim may be
mortgage in the present case must fall under Section 2 of defendant have non-contradictory defenses. Here, the considered compulsory regardless of the amount
Rule 4, to wit: defendant and third-party defendant had no common
SEC. 2. Venue of personal actions.—All other actions may be defense against the plaintiffs’ complaint, and they were Lafarge Cement Philippines, Inc. vs. Continental Cement Corp.
commenced and tried where the plaintiff or any of the principal even blaming each other for the fiasco.
plaintiffs resides, or where the defendant or any of the principal Same; Same; Same; A counterclaim is permissive “if it does
defendants resides, or in the case of a non-resident defendant Alday vs. FGU Insurance Corporation not arise out of or is not necessarily connected with the subject
where he may be found, at the election of the plaintiff.14 matter of the opposing party’s claim.”—A counterclaim may either
Thus, Pasig City, where the parties reside, is the proper Same; Same; Criteria or Tests in Determining Whether a be permissive or compulsory. It is permissive “if it does not arise
venue of the action to nullify the subject loan and real Counter-claim is Compulsory or Permissive; “Compelling Test of out of or is not necessarily connected with the subject matter of
estate mortgage contracts. The Court of Appeals committed Compulsoriness”; Words and Phrases; Under the “compelling test the opposing party’s claim.” A permissive counterclaim is
no reversible error in upholding the orders of the Regional of compulsoriness,” “a logical relationship between the claim and essentially an independent claim that may be filed separately in
Trial Court denying petitioner’s motion to dismiss the case the counterclaim is required, that is, whether conducting separate another case. A counterclaim is compulsory when its object “arises
on the ground of improper venue. trials of the respective claims of the parties would entail a out of or is necessarily connected with the transaction or
substantial duplication of effort and time by the parties and the occurrence constituting the subject matter of the opposing party’s
Briones vs. Court of Appeals court.”—In Valencia v. Court of Appeals, this Court capsulized the claim and does not require for its adjudication the presence of
criteria or tests that may be used in determining whether a third parties of whom the court cannot acquire jurisdiction.”
In this relation, case law likewise provides that in cases counterclaim is compulsory or permissive, summarized as follows:
where the complaint assails only the terms, conditions, 1. Are the issues of fact and law raised by the claim and Moreover, using the “compelling test of compulsoriness,”
and/or coverage of a written instrument and not its counterclaim largely the same? 2. Would res judicata bar a we find that, clearly, the recovery of petitioners’
validity, the exclusive venue stipulation contained therein subsequent suit on defendant’s claim absent the compulsory counterclaims is contingent upon the case filed by
shall still be binding on the parties, and thus, the counterclaim rule? 3. Will substantially the same evidence support respondents; thus, conducting separate trials thereon will
complaint may be properly dismissed on the ground of or refute plaintiffs claim as well as defendant’s counter-claim? 4. result in a substantial duplication of the time and effort of
improper venue.35 Conversely, therefore, a complaint Is there any logical relation between the claim and the the court and the parties.
directly assailing the validity of the written instrument counterclaim? Another test, applied in the more recent case of Since the counterclaim for damages is compulsory, it
itself should not be bound by the exclusive venue Quintanilla v. Court of Appeals, is the “compelling test of must be set up in the same action; otherwise, it would be
stipulation contained therein and should be filed in compulsoriness” which requires “a logical relationship between barred forever. If it is filed concurrently with the main
accordance with the general rules on venue. To be sure, it the claim and counterclaim, that is, where conducting separate action but in a different proceeding, it would be abated on the ground
would be inherently consistent for a complaint of this trials of the respective claims of the parties would entail a of
nature to recognize the exclusive venue stipulation when it, substantial duplication of effort and time by the parties and the litis pendentia; if filed subsequently, it would meet the
in fact, precisely assails the validity of the instrument in court.” same fate on the ground of res judicata.
which such stipulation is contained.
In this case, the venue stipulation found in the subject Lascano vs. Universal Steel Smelting Co., Inc.
contracts is indeed restrictive in nature, considering that it
effectively limits the venue of the actions arising therefrom The alleged malicious filing of estafa against petitioner is Novelty Philippines, Inc. vs. Court of Appeals
to the courts of Makati City. However, it must be necessarily connected with the non-payment of the value of
emphasized that Briones’ complaint directly assails the steel bars delivered to petitioner. The resolution of the Same; Same; Subsequent submission of requisite documents
validity of the subject contracts, claiming forgery in their latter issue does not require the presence of third parties of constituted substantial compliance with procedural rules.—In
execution. Given this circumstance, Briones cannot be whom the court a quo cannot acquire jurisdiction. Jaro v. Court of Appeals, this Court held that the subsequent
expected to comply with the aforesaid venue stipulation, as Therefore, the counterclaims raised by private respondents submission of requisite documents constituted substantial
his compliance therewith would mean an implicit are clearly compulsory in nature. Thus, non-payment of compliance with procedural rules.
recognition of their validity. Hence, pursuant to the general docket fees does not affect the jurisdiction of the trial court
rules on venue, Briones properly filed his complaint before to rule thereon.
a court in the City of Manila where the subject property is Remedial Law; Forum Shopping; Court recognized the
located. authority not only of a general manager but even of an acting
SEC. 7. Compulsory counterclaim.—A compulsory counterclaim is manager to sign a verification and certificate against non-forum
one which, being cognizable by the regular courts of justice, arises shopping.—We find equally untenable private respondent’s
PLEADINGS out of or is connected with the transaction or occurrence argument that the Special Power of Attorney authorizing Ventura
constituting the subject matter of the opposing party’s claim and to file the Petition was still defective, since it had been signed by
Singapore Airlines Limited vs. Court of Appeals does not require for its adjudication the presence of third parties the general manager and not by the president of petitioner
of whom the court cannot acquire jurisdiction. Such a company. This Court, in Mactan-Cebu International Airport
While the third-party defendant would benefit from a counterclaim must be within the jurisdiction of the court both as Authority v. Court of Appeals, recognized the authority not only of
victory by the third-party plaintiff against the plaintiff, this to the amount and the nature thereof, except that in an original
a general manager but even of an acting general manager to sign jurisdiction, but is specifically authorized to sign all “papers, order to promote their objective of securing a just, speedy and
a verification and certificate against non-forum shopping. documents, and pleadings” necessarily connected with the filing of inexpensive disposition of every action and proceeding.”
a complaint. Pursuant to Administrative Circular No. 04-94, Otherwise put, the rule requiring a certification of forum
which extended the requirement of a certification on non-forum shopping to accompany every initiatory pleading, “should not be
shopping to all initiatory pleadings filed in all courts and quasijudicial interpreted with such absolute literalness as to subvert its own
Santo Tomas University Hospital vs. Surla agencies, as well as Rule 7, Section 5 of the 1997 Rules of ultimate and legitimate objective or the goal of all rules of
Civil Procedure, the aforementioned papers and documents, procedure—which is to achieve substantial justice as
Same; Same; Same; Forum-Shopping; Words and Phrases; which Grace Galvez was authorized and empowered to sign, expeditiously as possible.”
“Forum-Shopping,” Explained; The real office of Administrative must necessarily include the certification on non-forum shopping.
Circular No. 04-94 is to curb the malpractice commonly referred to To conclude otherwise would render nugatory the Special Power Heirs of Francisco Retuya vs. Court of Appeals
also as forum-shopping; The language of the circular distinctly of Attorney and also render respondent’s constitution of an
suggests that it is primarily intended to cover an initiatory attorney-in-fact inutile. Remedial Law; Actions; Forum Shopping; Court has in a
pleading or an incipient application of a party asserting a claim number of cases applied the substantial compliance rule on the
for relief.—It bears stressing, once again, that the real office of courts.—Forum shopping “occurs filing of the certification of non-forum shopping, specially when
Administrative Circular No. 04-94, made effective on 01 April when a party attempts to have his action tried in a particular majority of the principal parties had signed the same and who
1994, is to curb the malpractice commonly referred to also as court or jurisdiction where he feels he will receive the most shared a common interest; Such leniency finds no applicability in
forum-shopping. It is an act of a party against whom an adverse favorable judgment or verdict.” In our jurisdiction, it has taken this case because of petitioners’ dishonesty committed against the
judgment has been rendered in one forum of seeking and possibly the form of filing multiple petitions or complaints involving the
getting a favorable opinion in another forum, other than by same issues before two or more tribunals or agencies in the hope appellate court.—As correctly observed by the CA, while we have
appeal or the special civil action of certiorari, or the institution of that one or the other court would make a favorable disposition. in a number of cases applied the substantial compliance rule on
two or more actions or proceedings grounded on the same cause There is also forum shopping when, because of an adverse the filing of the certification of non-forum shopping, specially
on the supposition that one or the other court would make a decision in one forum, a party seeks a favorable opinion (other when majority of the principal parties had signed the same and
favorable disposition. The language of the circular distinctly than by appeal or certiorari) in another. The rationale against who shared a common interest, We agree with the CA that such
suggests that it is primarily intended to cover an initiatory forum shopping is that a party should not be allowed to pursue leniency finds no applicability in this case because of petitioners’
pleading or an incipient application of a party asserting a claim simultaneous remedies in two different fora. dishonesty committed against the appellate court. A perusal of
for relief. Filing multiple petitions or complaints constitutes the verification and certification against forum shopping attached
abuse of court processes, which tends to degrade the to the petition for annulment of judgment filed in the CA would
Same; Same; Same; Same; Same; Where the so-called administration of justice, wreaks havoc upon orderly judicial show that there was a signature above the typewritten name of
“counterclaim” of a party really consists of two segregative parts— procedure, and adds to the congestion of the heavily burdened Quintin. In fact, written below the signature of Quintin was
(1) for unpaid hospital bills and (2) for damages, moral and dockets of the courts. Thus, the rule proscribing forum shopping Community Tax Certificate (CTC) No. 06570132, issued on
exemplary, plus attorney’s fees by reason of the alleged malicious seeks to promote candor and transparency among lawyers and January 8, 2003 in Mandaue City. Thus, it would appear that
and unfounded suit filed against it—it is the second, not the first, their clients in the pursuit of their cases before the courts to Quintin, who was already dead at the time the petition was filed,
claim that is referred to as not being initiatory in character and promote the orderly administration of justice, prevent undue had signed the verification and certification of non-forum
thereby not covered by the provisions of Administrative Circular inconvenience upon the other party, and save the precious time of shopping and he was even in possession of a CTC. Petitioners’
No. 04-94.—Petitioner, nevertheless, is entitled to a mere partial the courts. It also aims to prevent the embarrassing situation of actuation showed their lack of forthrightness to the CA which the
relief. The so-called “counterclaim” of petitioner really consists of two or more courts or agencies rendering conflicting resolutions or latter correctly found to be a dishonest act committed against it.
two segregative parts: (1) for unpaid hospital bills of respondents’ decisions upon the same issue. It is in this light that we must look
son, Emmanuel Surla, in the total amount of P82,632.10; and (2) at the propriety and correctness of the Certificate of Non-Forum Jabalde vs. Philippine National Bank
for damages, moral and exemplary, plus attorney’s fees by reason Shopping signed by Grace Galvez on the respondent’s behalf. We
of the alleged malicious and unfounded suit filed against it. It is have examined said Certificateand find that under the
Pleading and practice; Genuineness and due execution of
the second, not the first, claim that the Court here refers to as not circumstances, it does not negate but instead serves the purpose
document; Waiver of defendant’s technical admission thru failure
being initiatory in character and thereby not covered by the of the rule against forum shopping, namely to promote and
to deny under oath; Case at bar.—Although, ordinarily, the bank’s
provisions of Administrative Circular No. 04-94. facilitate the orderly administration of justice.
failure in the case at bar to deny under oath the entries in the
passbook as copied in the complaint, constitutes an ad mission of
Same; Same; Same; Same; The rule requiring a certification the genuineness and due execution of the document, this rule
of non-forum shopping to accompany every initiatory pleading cannot apply because the plaintiff introduced evidence purporting
should not be interpreted with such absolute literalness as to to support his allegations of deposit on the dates he wanted the
It is
subvert its own ultimate and legitimate objective or the goal of all court to believe, and offered no objection during the trial to the
indisputable that Grace Galvez, as attorney-in-fact of the
rules of procedure—which is to achieve substantial justice as testimonies of defendant’s witnesses and docu mentary evidence
respondent, was duly authorized and empowered not just to
expeditiously as possible.—Administrative Circular No. 04-94 is showing different dates of deposit. These acts constitute a waiver
initiate complaints, whether criminal or civil, to enforce and
now incorporated in the 1997 Rules of Civil Procedure, as Rule 7, by the plaintiff of the defendant’s tech nical admission through
protect the respondent’s rights, claims, and interests in this
Section 5. It is basic that the Rules “shall be liberally construed in failure to deny under oath the genuine ness and due execution of
the document We have ruled that a complaint should not be dismissed for
insufficiency of cause of action if it appears clearly from the complaint
and its attachments that the plaintiff is entitled to relief. The converse
is also true. The complaint may be dismissed for lack of cause of
Central Surety & Insurance Company vs. C. N. Hodges action if it is obvious from the complaint and its annexes that the
plaintiff is not entitled to any relief. In this case, we note that records
“x x x where a case has been tried in complete disregard of the show that recurring in each of the three contracts is the provision that
rule and the plaintiff having pleaded a document by copy, payment by petitioner shall be subject to its timely receipt of similar
presents oral evidence to prove the due execution of the document payments from Fil-Estate. On their face, the said attached contracts
as well as the agent’s authority and no objections are made to the clearly require a specific condition before petitioner may be held liable
defendant’s evidence in refutation, the rule will be considered for payment.
waived.”6
The complaint, however, failed to state that the said condition had
been fulfilled
In the case at bar, the parties acted in complete disregard
of or wholly overlooked the rule above-quoted. Hodges had
Without the said condition having taken place, petitioner cannot be
neither objected to the evidence introduced by petitioner
said to have breached its obligation to pay.
herein in order to prove that Mrs. Mesa had no authority to
issue a surety bond, much less one in excess of P8,000.00,
and took no exception to the admission of said evidence.
Hence, Hodges must be deemed to have waived the benefits
of said rule and petitioner herein cannot be held liable in
excess of the sum of P8,000.00:

Capitol Motors Corporations v. Yabut

x x x The rule authorizing an answer to


the effect that the defendant has no knowledge or
information sufficient to form a belief as to the
truth of an averment and giving such answer the
effect of a denial, does not apply where the fact
as to which want of knowledge is asserted, is so
plainly and necessarily within the defendants
knowledge that his averment of ignorance must
be palpably untrue.[58]

Similarly, in Capitol Motors, the document denied was the promissory


note sued upon and attached to the complaint. In said case, the Court
ruled that although a statement of lack of knowledge or information
sufficient to form a belief as to the truth of a material averment in the
complaint was one of the modes of specific denial contemplated under
the Rules, paragraph 2 of the Answer in the said case was insufficient
to constitute a specific denial.[59] Following the ruling in the Warner
Barnes case, the Court held that it would have been easy for
defendant to specifically allege in the Answer whether or not it had
executed the promissory note attached to the Complaint.[60]

Fluor Daniel v. E.B. Villarosa

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