G.R. No.
145022 September 23, 2005 offending news reports were printed and first published, the
ARMAND NOCUM and THE PHILIPPINE DAILY INQUIRER,
INC., Petitioners, vs. LUCIO TAN, Respondent.
CHICO-NAZARIO, J.:
Doctrine: Jurisdiction vs Venue; Venue can be waived in civil
cases
FACTS: Lucio Tan filed a complaint against reporter Armand
Nocum, Capt. Florendo Umali, ALPAP and Inquirer with the
Regional Trial Court of Makati, seeking moral and exemplary
damages for the alleged malicious and defamatory imputations
contained in a news article. INQUIRER and NOCUM alleged that
the venue was improperly laid, among many others. It appeared
that the complaint failed to state the residence of the complainant
at the time of the alleged commission of the offense and the place
where the libelous article was printed and first published.
RTC dismissed the complaint without prejudice on the
ground of improper venue. Aggrieved, Lucio Tan filed an
Omnibus Motion seeking reconsideration of the dismissal and
admission of the amended complaint. In par. 2.01.1 of the
amended complaint, it is alleged that "This article was printed and
first published in the City of Makati", and in par. 2.04.1, that "This
caricature was printed and first published in the City of Makati"
RTC admitted the amended complaint and deemed set
aside the previous order of dismissal stating that the mistake or
deficiency in the original complaint appears now to have been
cured in the Amended Complaint. Also, there is no substantial
amendment, but only formal, in the Amended Complaint which
would affect the defendants’ defenses and their Answers.
Dissatisfied, petitioners appealed to the Court of Appeals.
Two petitions for certiorari were filed, one filed by petitioners and
the other by defendants .The two petitions were consolidated. CA
affirmed the decision of the RTC. Hence, this PETREV filed by
the petitioners. Petitioners argue that since the original complaint
only contained the office address of respondent and not the
latter’s actual residence or the place where the allegedly
original complaint, by reason of the deficiencies in its allegations,
failed to confer jurisdiction on the lower court.
ISSUE: WON THE LOWER COURT ACQUIRED
JURISDICTION OVER THE CIVIL CASE UPON THE FILING OF
THE ORIGINAL COMPLAINT FOR DAMAGES
HELD: YES. It is settled that jurisdiction is conferred by law based
on the facts alleged in the complaint since the latter comprises a
concise statement of the ultimate facts constituting the plaintiff's
causes of action. Here, the RTC acquired jurisdiction over the
case when the case was filed before it. From the allegations
thereof, respondent’s cause of action is for damages arising from
libel, the jurisdiction of which is vested with the RTC. Article 360
of the Revised Penal Code provides that it is the RTC that is
specifically designated to try a libel case.
Petitioners are confusing jurisdiction with venue. The Hon.
Florenz D. Regalado, differentiated jurisdiction and venue as
follows: (a) Jurisdiction is the authority to hear and determine
a case; venue is the place where the case is to be heard or
tried; (b) Jurisdiction is a matter of substantive law; venue,
of procedural law; (c) Jurisdiction establishes a relation
between the court and the subject matter; venue, a relation
between plaintiff and defendant, or petitioner and
respondent; and, (d) Jurisdiction is fixed by law and cannot
be conferred by the parties; venue may be conferred by the
act or agreement of the parties.
Here, the additional allegations in the Amended Complaint
that the article and the caricature were printed and first published
in the City of Makati referred only to the question of venue and
not jurisdiction. These additional allegations would neither confer
jurisdiction on the RTC nor would respondent’s failure to include
the same in the original complaint divest the lower court of its
jurisdiction over the case. Respondent’s failure to allege these
allegations gave the lower court the power, upon motion by a
party, to dismiss the complaint on the ground that venue was not
properly laid. The term "jurisdiction" in Article 360 of the Revised
Penal Code as referring to the place where actions for libel shall
be filed or "venue." The amendment was merely to establish the
proper venue for the action. It is a well-established rule that venue
has nothing to do with jurisdiction, except in criminal actions.
Assuming that venue were properly laid in the court where the
action was instituted, that would be procedural, not a jurisdictional
impediment.
The dismissal of the complaint by the lower court was
proper considering that the complaint, indeed, on its face, failed
to allege neither the residence of the complainant nor the place
where the libelous article was printed and first published.
Nevertheless, before the finality of the dismissal, the same may
still be amended. In so doing, the court acted properly and without
any grave abuse of discretion.
ISSUE: WON VENUE MAY BE WAIVED IN CIVIL CASES
HELD: YES. It is elementary that objections to venue in CIVIL
ACTIONS arising from libel may be waived since they do not
involve a question of jurisdiction. The laying of venue is
procedural rather than substantive, relating as it does to
jurisdiction of the court over the person rather than the subject
matter. Venue relates to trial and not to jurisdiction. It is a
procedural, not a jurisdictional, matter. It relates to the place of
trial or geographical location in which an action or proceeding
should be brought and not to the jurisdiction of the court. It is
meant to provide convenience to the parties, rather than restrict
their access to the courts as it relates to the place of trial. In
contrast, in criminal actions, it is fundamental that venue is
jurisdictional it being an essential element of jurisdiction.
Petitioners’ argument that the lower court has no
jurisdiction over the case because respondent failed to allege the
place where the libelous articles were printed and first published
would have been tenable if the case filed were a criminal case.
The failure of the original complaint to contain such information
would be fatal because this fact involves the issue of venue which
goes into the territorial jurisdiction of the court. This is not to be
because the case before us is a civil action where venue is not
jurisdictional.
CA’s DECISION AFFIRMED.
RULE 4 – VENUE
G.R. No. 133240. November 15, 2000]
RUDOLF LIETZ HOLDINGS, INC., petitioner, vs.
THE REGISTRY OF DEEDS OF PARAÑAQUE
CITY, respondent.
NATURE:
A petition for review on the decision rendered by RTC of
Parañaque City, Metro Manila involving questions of law.
FACTS:
Petitioner Corporation amended its Articles of Incorporation to
change its name from Rudolf Lietz, Incorporated to Rudolf Lietz
Holdings, Inc. and such was approved by SEC. As a
consequence of its change of name, petitioner sought the
amendment of the transfer certificates of title over real properties
owned by them, all of which were under the old name. For this
purpose, petitioner instituted a petition for amendment of titles
with the RTC Parañaque City.
The petition impleaded as respondent the Registry of Deeds of
Pasay City, apparently because the titles sought to be amended,
all state that they were issued by the Registry of Deeds of Pasay
City. Petitioner likewise inadvertently alleged in the body of the
petition that the lands covered by the subject titles are located in
Pasay City. Subsequently, petitioner learned that the subject
titles are in the custody of the Register of Deeds of Parañaque
City. Hence, petitioner filed an Ex-Parte Motion to Admit
Amended Petition impleading instead as respondent the Registry
of Deeds of Parañaque City, and alleged that its lands are located
in Parañaque City.
In the meantime, however, the court a quo had dismissed the
petition motu proprio on the ground of improper venue, it
appearing therein that the respondent is the Registry of Deeds of
Pasay City and the properties are located in Pasay City.
Petitioner filed with the lower court a Motion for Reconsideration
but was denied. On the other hand, in view of the dismissal of the
petition, the lower court also denied the Ex-Parte Motion to Admit
Amended Petition.
The Solicitor General filed his Comment contending that the trial
court did not acquire jurisdiction over the res because it appeared
from the original petition that the lands are situated in Pasay City;
hence, outside the jurisdiction of the Parañaque court. Since it
had no jurisdiction over the case, it could not have acted on the
motion to admit amended petition.
ISSUE:
Whether or not trial court motu proprio dismiss a complaint on the
ground of improper venue.
HELD:
Venue of real actions
This question has already been answered in Dacoycoy v.
Intermediate Appellate Court, where this Court held that it may
not. The motu proprio dismissal of petitioner’s complaint by
respondent trial court on the ground of improper venue is plain
error, obviously attributable to its inability to distinguish between
jurisdiction and venue.
Questions or issues relating to venue of actions are basically
governed by Rule 4 of the Revised Rules of Court. Jurisdiction
over the subject matter or nature of an action is conferred only by
law.[16] It may not be conferred by consent or waiver upon a court
which otherwise would have no jurisdiction over the subject
matter of an action. On the other hand, the venue of an action as
fixed by statute may be changed by the consent of the parties,
and an objection on improper venue may be waived by the failure
of the defendant to raise it at the proper time. In such an event,
the court may still render a valid judgment. Rules as to
jurisdiction can never be left to the consent or agreement of the
parties. Venue is procedural, not jurisdictional, and hence may
be waived. It is meant to provide convenience to the parties,
rather than restrict their access to the courts as it relates to the
place of trial.
Dismissing the complaint on the ground of improper venue is
certainly not the appropriate course of action at this stage of the
proceedings. Where the defendant fails to challenge timely the
venue in a motion to dismiss as provided by Section 4 of Rule 4
of the Rules of Court, and allows the trial to be held and a decision
to be rendered, he cannot on appeal or in a special action be
permitted to belatedly challenge the wrong venue, which is
deemed waived. Indeed, it was grossly erroneous for the trial
court to have taken a procedural short-cut by dismissing motu
proprio the complaint on the ground of improper venue without
first allowing the procedure outlined in the rules of court to take
its proper course.
Amendments as a matter of right
A party may amend his pleading once as a matter of right at any
time before a responsive pleading is served or, in the case of a
reply, at any time within ten (10) days after it is served.
Amendments to pleadings are liberally allowed in furtherance of
justice, in order that every case may so far as possible be
determined on its real facts, and in order to speed the trial of
cases or prevent the circuitry of action and unnecessary expense.
The trial court, therefore, should have allowed the amendment
proposed by petitioner for in so doing, it would have allowed the
actual merits of the case to be speedily determined, without
regard to technicalities, and in the most expeditious and
inexpensive manner.
The courts should be liberal in allowing amendments to pleadings
to avoid multiplicity of suits and in order that the real controversies
between the parties are presented, their rights determined and
the case decided on the merits without unnecessary delay. This
liberality is greatest in the early stages of a lawsuit, especially in
this case where the amendment to the complaint was made
before the trial of the case thereby giving petitioner all the time
allowed by law to answer and to prepare for trial.
PACIFIC BANKING CORP vs CA
FACTS: [Consolidated Case]
CASE#1 (union)(5th division)
1. Pacific Banking Corporation (PaBC) was placed under
receivership by the Central Bank of the Philippines and,
was placed under liquidation.
a. A Liquidator was appointed.
2. RTC: the Central Bank filed a petition entitled "Petition for
Assistance in the Liquidation of Pacific Banking
Corporation."
a. The petition was approved, after which creditors
filed their claims with the court.
3. Pacific Banking Corporation Employees Organization
(Union), herein petitioner, filed a complaint-in-
intervention seeking payment of holiday pay, 13th month
pay differential, salary increase differential, Christmas
bonus, and cash equivalent of Sick Leave Benefit due its
members as employees of PaBC.
a. RTC ordered payment of the principal claims of the
Union.
4. The Liquidator filed a Motion for Reconsideration and
Clarification of the order.
a. DENIED!
5. The Liquidator filed a Notice of Appeal and a Motion for
Additional Time to Submit Record on Appeal.
a. The respondent judge disallowed Liquidator's
Notice of Appeal on the ground that it was late.
(Filed more than 15 days after receipt of the
decision)
6. *CA: Liquidator filed a petition for Certiorari, Prohibition
and Mandamus
a. CA held in the case of the Union that the
proceeding before the RTC was a special
proceeding and, therefore, the period for
appealing from any decision or final order rendered
therein is 30 days.
b. Since the notice of appeal was filed on the 30th day
of his receipt of the decision granting the Union's
claims, the appeal was brought on time.
c. RTC should give due course to the appeal.
7. *SC: The Union filed a petition
a. The union contends that the case is a special
proceeding and that the appeal was filed out of
time.
CASE #2 (stockholders/investors)(14th divison)
1. *RTC: Ang Keong Lan and E.J. Ang Int'l., private
respondent, filed claims for the payment of investment in
the PaBC allegedly in the form of shares of stocks
amounting to US$2,531,632.18.
a. Respondent judge directed the Liquidator to pay
private respondents as preferred creditors.
2. The Liquidator moved for reconsideration
a. DENIED!
3. The Liquidator filed a Notice of Appeal from the orders.
a. As in the case of the Union, however, the judge
ordered the Notice of Appeal stricken off the record
on the ground that it had been filed without authority
of the Central Bank and beyond 15 days.
b. The judge directed the execution of his order
granting the Stockholders/ Investors' claim.
4. *CA: Liquidator filed a petition for Certiorari, Prohibition
and Mandamus
a. CA held that a liquidation proceeding is an
ordinary action.
b. Therefore, the period for appealing from any
decision or final order rendered is 15 days
c. Since the Liquidator's appeal notice was filed on
the 23rd day of his receipt of the order appealed
from, deducting the period during which his motion
for reconsideration was pending, the notice of
appeal was filed late.
5. *SC: The Liquidator filed a petition
a. Liquidator contends that the Petition for Assistance
in the Liquidation of the Pacific Banking Corporation
s a Special Proceeding case and/or one which
allows multiple appeals, in which case the period of
appeal is 30 days and not 15 days from receipt of
the order/judgment appealed from.
ISSUE: Whether a petition for liquidation is a special proceeding
or an ordinary civil action
HELD: SPECIAL PROCEEDING
Rule 2 of the Rules of Court provide:
§1. Action defined. — Action means an ordinary suit in a court of
justice, by which the party prosecutes another for the
enforcement or protection of a right, or the prevention or redress
of a wrong.
§2. Special Proceeding Distinguished. — Every other remedy,
including one to establish the status or right of a party or a
particular fact, shall be by special proceeding.
( I made a table para masmadali maintindihan haha – joel )
ACTION (CIVIL ACTION) SPECIAL PROCEEDINGS
The act by which one sues The act by which one seeks to
another in a court of justice establish the status or right of a
for the enforcement or party, or a particular fact.
protection of a right, or the
prevention or redress of a
wrong.
 A formal demand of a right by A petition for a declaration of a
one against another. status, right or fact.
Proper remedy of a party Proper remedy of a party
litigant that seeks to recover whose purpose is to seek the
property from another. appointment of a guardian for
an insane.
A petition for liquidation of an insolvent corporation should be
classified a special proceeding and not an ordinary action. Such
petition does not seek the enforcement or protection of a right nor
the prevention or redress of a wrong against a party. It does not
pray for affirmative relief for injury arising from a party's wrongful
act or omission nor state a cause of action that can be enforced
against any person.
What it seeks is merely a declaration by the trial court of the
corporation's insolvency so that its creditors may be able to file
their claims in the settlement of the corporation's debts and
obligations. Put in another way, the petition only seeks a
declaration of the corporation's debts and obligations. Put in
another way, the petition only seeks a declaration of the
corporation's state of insolvency and the concomitant right of
creditors and the order of payment of their claims in the
disposition of the corporation's assets.
Since a petition for liquidation is in the nature of a special
proceeding, the period of appeal is 30 days and the party
appealing must, in addition to a notice of appeal, file with the
trial court a record on appeal in order to perfect his appeal.
In CASE#2 (Stockholders/Investors), the Liquidator's notice of
appeal was filed on time, having been filed on the 23rd day of
receipt of the order granting the claims of the
Stockholders/Investors. However, the Liquidator did not file a
record on appeal with the result that he failed to perfect his
appeal. As already stated a record on appeal is required under
the Interim Rules and Guidelines in special proceedings and for
cases where multiple appeals are allowed. The reason for this is
that the several claims are actually separate ones and a decision
or final order with respect to any claim can be appealed.
Necessarily the original record on appeal must remain in the trial
court where other claims may still be pending.
Because of the Liquidator's failure to perfect his appeal, the order
granting the claims of the Stockholders/Investors became final.
In CASE#1 (union), CA correctly granted the Liquidator's Petition
for Certiorari. Prohibition and Mandamus. As already noted, the
Liquidator filed a notice of appeal and a motion for extension to
file a record on appeal on December 10, 1991, i.e., within 30 days
of his receipt of the order granting the Union's claim. Without
waiting for the resolution of his motion for extension, he filed on
December 20, 1991 within the extension sought a record on
appeal. Respondent judge thus erred in disallowing the notice on
appeal and denying the Liquidator's motion for extension to file a
record on appeal.
CA correctly granted the Liquidator's Petition and its decision
should be affirmed.
Note:
Liquidation proceedings do not resemble petitions for
interpleader. For one, an action for interpleader involves claims
on a subject matter against a person who has no interest
therein. This is not the case in a liquidation proceeding where the
Liquidator, as representative of the corporation, takes charge of
its assets and liabilities for the benefit of the creditors. He is thus -The executrix of the Estate of Alice O. Sheker (respondent)
charged with insuring that the assets of the corporation are paid moved for the dismissal of said money claim against the estate
only to rightful claimants and in the order of payment provided by on the grounds that :
law.

(1) the requisite docket fee had not been paid;

Rather, a liquidation proceeding resembles the proceeding for the
(2) petitioner failed to attach a certification against non-forum
settlement of state of deceased persons under Rules 73 to 91 of
shopping; and
the Rules of Court. The two have a common purpose: the
determination of all the assets and the payment of all the debts (3) petitioner failed to attach a written explanation why the money
and liabilities of the insolvent corporation or the estate. The claim was not filed and served personally.
Liquidator and the administrator or executor are both charged
with the assets for the benefit of the claimants. In both instances,
the liability of the corporation and the estate is not disputed. The
court's concern is with the declaration of creditors and their rights - RTC issued the assailed Order dismissing without prejudice the
and the determination of their order of payment. money claim based on the grounds advanced by respondent.
Allan Sheker filed a motion for reconsideration but the same was
Furthermore, as in the settlement of estates, multiple appeals are denied . Hence, the petition for review on certiorari.
allowed in proceedings for liquidation of an insolvent corporation.
ALAN JOSEPH A. SHEKER vs. ESTATE OF ALICE O.
SHEKER -Allan Sheker maintains that the RTC erred in strictly applying to
a probate proceeding the rules requiring a certification of non-
forum shopping, a written explanation for non-personal filing, and
the payment of docket fees upon filing of the claim. He insists
Facts: that Section 2, Rule 72 of the Rules of Court provides that rules
in ordinary actions are applicable to special proceedings only in
-The holographic will of Alice O. Sheker was admitted for probate
a suppletory manner
in the RTC of Iligan City. Thereafter, the RTC issued an order for
all the creditors to file their respective claims against the estate.
- In compliance, petitioner, Allan Sheker filed a contingent claim Issue :
for agent's commission due him amounting to approximately
P206,250.00 in the event of the sale of certain parcels of land
belonging to the estate of Alice Sheker, and the amount of
P275,000.00, as reimbursement for expenses incurred and/or to Whether or not Allan Sheker’s contention that rules in ordinary
be incurred by Allan Sheker in the course of negotiating the sale actions are only supplementary to rules in special proceedings is
of said realties. entirely correct.

Held: No.
Section 2, Rule 72, Part II of the same Rules of Court provides:
Sec. 2. Applicability of rules of Civil Actions. - In the absence of
special provisions, the rules provided for in ordinary actions
shall be, as far as practicable, applicable in special proceedings.
Stated differently, special provisions under Part II of the Rules of
Court govern special proceedings; but in the absence of special
provisions, the rules provided for in Part I of the Rules governing
ordinary civil actions shall be applicable to special proceedings,
as far as practicable.
The word “practicable” is defined as: possible to practice or
perform; capable of being put into practice, done or
accomplished.1[4]
This means that in the absence of special provisions, rules in
ordinary actions may be applied in special proceedings as much
as possible and where doing so would not pose an obstacle to
said proceedings.
Nowhere in the Rules of Court does it categorically say that rules
in ordinary actions are inapplicable or merely suppletory to
special proceedings.
Provisions of the Rules of Court requiring a certification of non-
forum shopping for complaints and initiatory pleadings, a written
explanation for non-personal service and filing, and the payment
of filing fees for money claims against an estate would not in any
way obstruct probate proceedings, thus, they are applicable to
special proceedings such as the settlement of the estate of a
deceased person as in the present case.
Notes:
Certification of non forum shopping:
The certification of non-forum shopping is required only for
complaints and other initiatory pleadings. The RTC erred in ruling
that a contingent money claim against the estate of a decedent is
an initiatory pleading. In the present case, the whole probate
proceeding was initiated upon the filing of the petition for
allowance of the decedent's will. Under Sections 1 and 5, Rule
86 of the Rules of Court, after granting letters of testamentary or
of administration, all persons having money claims against the
decedent are mandated to file or notify the court and the estate
administrator of their respective money claims; otherwise, they
would be barred, subject to certain exceptions.
Such being the case, a money claim against an estate is more
akin to a motion for creditors' claims to be recognized and taken
into consideration in the proper disposition of the properties of the
estate.
A money claim is only an incidental matter in the main action for
the settlement of the decedent's estate; more so if the claim is
contingent since the claimant cannot even institute a separate
action for a mere contingent claim. Hence, herein petitioner's
contingent money claim, not being an initiatory pleading, does not
require a certification against non-forum shopping.
Docket fees:
the trial court has jurisdiction to act on a money claim (attorney's
fees) against an estate for services rendered by a lawyer to the
administratrix to assist her in fulfilling her duties to the estate even
without payment of separate docket fees because the filing fees
shall constitute a lien on the judgment pursuant to Section 2, Rule
141 of the Rules of Court, or the trial court may order the payment
of such filing fees within a reasonable time. After all, the trial court
had already assumed jurisdiction over the action for settlement of
the estate. Clearly, therefore, non-payment of filing fees for a
money claim against the estate is not one of the grounds for
dismissing a money claim against the estate.
Written explanation why the money claim was not filed and
served personally:
Section 11, Rule 13 of the 1997 Rules of Civil Procedure,
personal service and filing is the general rule, and resort to other
modes of service and filing, the exception. Henceforth, whenever
personal service or filing is practicable, in the light of the
circumstances of time, place and person, personal service or
filing is mandatory. Only when personal service or filing is not
practicable may resort to other modes be had, which must then
be accompanied by a written explanation as to why personal
service or filing was not practicable to begin with.
In the present case, petitioner holds office in Salcedo Village,
Makati City, while counsel for respondent and the RTC which
rendered the assailed orders are both in Iligan City. The lower
court should have taken judicial notice of the great distance
between said cities and realized that it is indeed not practicable
to serve and file the money claim personally. Thus, following
Medina v. Court of Appeals,2[12] the failure of petitioner to submit
a written explanation why service has not been done personally,
may be considered as superfluous and the RTC should have
exercised its discretion under Section 11, Rule 13, not to dismiss
the money claim of petitioner, in the interest of substantial justice.
Emilio Pacioles v. Miguela Chuatoco-ChingFacts:
1.Miguelita died intestate. She was survived by her huband
(petitioner) and two minor children.2.Emilio filed a verified
petition for the settlement of Miguelita’s estate.3.Miguelita’s
mother filed an opposition to the petition for issuance of letters
of administration. That the bulk of the estate is composed of
paraphernal properties. She wishedto be appointed. She also
said that she has direct and material interest in the estate
becauseshe gave half of her inherited properties to the deceased
on conditio ntaht they wouldundertake a business endeavor as
partners.4.The mother asked that one Emmanuel be
appointed.5.Court appointed Emilio and Emmanuel as joint-
administrator.6.No claims were filed. Thereafter,
Emilio filed an inventory.Emmanuel failed to file
one.7.Court declared Emilio and his children as the
only compulsoryheirs of the deceased.8.Emilio then petitioned
the court for the payment of estate tax andthe partition and
distribution of the estate.9.RTC denied the petition as
to the partition and distribution. CA affirmed.
Issue:
May a trial court, acting as an intestate court, hear and pass upon
questions of ownership involving properties claimed to be part of
the decedent’s estate?
Held:
1. General Rule:a.jurisdiction of the trial court either as an
intestate or a probate court relates only tomatters having to do
with the settlement of the estate and probate of will of
deceasedpersons but
does not extend to the determination of questions of
ownership thatarise during the proceedings
.i. The patent rationale for this rule is that such court exercises
special and limited jurisdiction.b.A well-recognized deviation to
the rule is the principle that an intestate or a probatecourt may
hear and pass upon questions of ownership when its purpose is
todetermine whether or not a property should be included in the
inventoryi.Pastor v. CA1.As a rule, the question of ownership is
an extrataneous matter which theprobate court cannot resolve
with finality. Thus, for the purpose of determining whether a
certain property should or should not be included inthe inventory
of estate properties, the probate court may pass upon the
titlethereto, but such determination is provisional, not conclusive,
and is subjectto the final decision in a separate action to resolve
title2. Reliance to Pastor v. CA
a. The Court of Appeals relied heavily on the above principle in
sustaining the jurisdiction of the intestate court to conduct a
hearing on respondent’s claim.
Such relianceis misplaced
.b. Under the said principle, the key consideration is that the
purpose of theintestate or probate court in hearing and passing
upon questions of ownership
is merely todetermine whether or not a property should be
included in the inventory
. The facts of this case show that such was not the purpose of the
intestate court.i.
First
, the inventory was not disputed.1. Respondent could have
opposed petitioner’s inventory and
sought the exclusion of thespecific properties which she
believed or considered to be hers
. But instead of doing so,she expressly adopted the inventory,
taking exception only to the low valuation placed on thereal estate
properties.ii. Second, Emmanuel (respondent’s son) did not file
an inventory1.
He could have submitted an inventory, excluding therefrom
those propertieswhich respondent considered to be hers.
The fact that he did not endeavor tosubmit one shows that
he acquiesced with petitioner’s inventory.
2.Clearly, the RTC, acting as an intestate court, had overstepped
its jurisdiction. Itsproper course should have been to maintain a
hands-off stance on the matter. It iswell- settled in this jurisdiction,
sanctioned and reiterated in a long line of decisions,that when a
question arises as to ownership of property alleged to be a part
of theestate of the deceased person, but claimed by some other
person to be his property,not by virtue of any right of inheritance
from the deceased but by title adverse to thatof the deceased and
his estate, such question cannot be determined in the course
of an intestate or probate proceedings.
The intestate or probate court has no jurisdiction to
adjudicate such contentions, which must be submitted to
thecourt in the exercise of its general jurisdiction as a
regional trial court.
a.
Jurisprudence states that:
i. probate court or one in charge of proceedings whether
testate or intestate cannot adjudicate or determine title to
properties claimed to be a part of the estateand which are
claimed to belong to outside parties. All that the said court
could do as regardssaid properties is to determine whether
they should or should not be included in the inventoryor list
of properties to be administered by the administrator. If
there is no dispute, well andgood, but if there is, then the
parties, the administrator, and the opposing parties have
toresort to an ordinary action for a final determination of
the conflicting claims of title becausethe probate court
cannot do so.3. Hence, respondent’s recourse is to file a
separate action with a court of general jurisdiction. The
intestate court is not the appropriate forum for the
resolution of her adverseclaim of ownership over
properties ostensibly belonging to Miguelita's estate.
Borja v. Borja
46 SCRA 577
FACTS:
Francisco de Borja filed a petition for probate of the will of his wife
who died, Josefa Tangco, with the CFI of Rizal. He was
appointed executor and administrator, until he died; his son Jose
became the sole administrator. Francisco had taken a 2nd wife
Tasiana before he died; she instituted testate proceedings with
the CFI of Nueva Ecija upon his death and was appointed special
administatrix. Jose and Tasiana entered upon a compromise
agreement, but Tasiana opposed the approval of the
compromise agreement. She argues that it was no valid, because
the heirs cannot enter into such kind of agreement without first
probating the will of Francisco, and at the time the agreement was
made, the will was still being probated with the CFI of Nueva
Ecija.
ISSUE:
W/N the compromise agreement is valid, even if the will of
Francisco has not yet been probated.
HELD:
YES, the compromise agreement is valid.
The agreement stipulated that Tasiana will receive P800,000 as
full payment for her hereditary share in the estate of Francisco
and Josefa.
There was here no attempt to settle or distribute the estate of
Francisco de Borja among the heirsthereto before the probate of
his will. The clear object of the contract was merely
the conveyance by Tasiana Ongsingco of any and all her
individual share and interest, actual or eventual, in the estate of
Francisco de Borja and Josefa Tangco. There is no stipulation as
to any other claimant, creditor or legatee.
And as a hereditary share in a decedent’s estate is transmitted or
vested immediately from the moment of the death of
such causante or predecessor in interest (Civil Code of the
Philippines, Art. 777) there is no legal bar to a successor (with
requisite contracting capacity) disposing of her or
his hereditary share immediately after such death, even if the
actual extent of such share is not determined until the subsequent
liquidation of the estate.
G.R. No. 109373 March 20, 1995
PACIFIC BANKING CORPORATION EMPLOYEES
ORGANIZATION, PAULA S. PAUG, and its officers and
members, petitioners, vs. THE HONORABLE COURT OF
APPEALS and VITALIANO N. NAÑAGAS II, as Liquidator of
Pacific Banking Corporation, respondents.
G.R. No. 112991 March 20, 1995
THE PRESIDENT OF THE PHILIPPINE DEPOSIT INSURANCE
CORPORATION, as Liquidator of the Pacific Banking
Corporation , petitioner, vs. COURT OF APPEALS, HON.
JUDGE REGINO T. VERIDIANO II, DEPUTY SHERIFF RAMON
ENRIQUEZ and ANG ENG JOO, ANG KEONG LAN and E.J
ANG INT'L. LTD., represented by their Attorney-in-fact,
GONZALO C. SY, respondents.
NOTES: The principal question in these cases is whether a
petition for liquidation under §29 of Rep. Act No. 265 is in the
nature of a special proceeding. If it is, then the period of appeal
is 30 days and the party appealing must, in addition to a notice of
appeal, file with the trial court a record on appeal in order to
perfect his appeal. Otherwise, if a liquidation proceeding is an
ordinary action, the period of appeal is 15 days from notice of the
decision or final order appealed from.
FACTS:
The cases are consolidated.
Pacific Banking Corporation (PaBC) was placed under
receivership by the Central Bank of the Philippines pursuant to
Resolution No. 699 of its Monetary Board. A few months later, it
was placed under liquidation and a Liquidator was appointed.
The Central Bank filed with the RTC of Manila a petition entitled
"Petition for Assistance in the Liquidation of Pacific Banking
Corporation." The petition was approved, after which creditors
filed their claims with the court.
Nañagas, a new Liquidator, was appointed by the Central Bank.
In G.R. No. 109373 (case of the Labor Union):
Pacific Banking Corporation Employees Organization (Union for
short), petitioner in G.R. No. 109373, filed a complaint-in-
intervention seeking payment of holiday pay, 13th month pay
differential, salary increase differential, Christmas bonus, and
cash equivalent of Sick Leave Benefit due its members as
employees of PaBC.
RTC:
 September 13, 1991-the trial court ordered payment of the
principal claims of the Union
 September 16, 1991-Liquidator received a copy of the
order
 October 16, 1991-he filed a Motion for Reconsideration
and Clarification of the order
 December 6, 1991-the judge modified his September 13,
1991 but in effect denied the Liquidator's motion for
reconsideration
 December 9, 1991-the order was received by the
Liquidator
 December 10, 1991-he filed a Notice of Appeal and a
Motion for Additional Time to Submit Record on Appeal
 December 23, 1991-another Notice of Appeal was filed by
the Office of the Solicitor General in behalf of Nañagas
 February 10, 1992- in his order, respondent judge
disallowed the Liquidator's Notice of Appeal on the ground
that it was late, i.e., more than 15 days after receipt of the
decision and he ordered the Notice of Appeal stricken off
the record on the ground that it had been filed without
authority of the Central Bank and again, beyond 15 days.
The judge declared his September 13, 1991 order and
subsequent orders to be final and executory and denied
reconsideration.
 March 27, 1992-the judge granted the Union's Motion for
issuance of a writ of Execution
CA: The Liquidator filed a Petition for Certiorari, Prohibition
and Mandamus in the Court of Appeals to set aside the orders
of the trial court denying his appeal. In its decision of November
17, 1992, the Fifth Division held in the case of the Union that the
proceeding before the trial court was a special proceeding and,
therefore, the period for appealing from any decision or final order
rendered therein is 30 days. Since the notice of appeal of the
Liquidator was filed on the 30th day of his receipt of the decision
granting the Union's claims, the appeal was brought on time. The
Fifth Division, therefore, set aside the orders of the lower court
and directed the latter to give due course to the appeal of the
Liquidator and set the Record on Appeal he had filed for hearing.
SC: The Union contends that the Court of Appeals erred seriously
in concluding that the notice of appeal filed by Nañagas was filed
on time.
In G.R. No. 112991 (the case of the Stockholders/Investors):
Ang Keong Lan and E.J. Ang Int'l., private respondents filed
claims for the payment of investment in the PaBC allegedly in the
form of shares of stocks amounting to US$2,531,632.18. The
shares of stocks, consisting of 154,462 common shares,
constituted 11% of the total subscribed capital stock of the PaBC.
They alleged that their claim constituted foreign exchange capital
investment entitled to preference in payment under the Foreign
Investments Law.
RTC:

September 11, 1992-respondent judge of the RTC
directed the Liquidator to pay private respondents the total
amount of their claim as preferred creditors
 September 16, 1992-the Liquidator received the order
 September 30, 1992-he moved for reconsideration
 October 2, 1992- his motion was denied
 October 5, 1992- He received the order denying his Motion
for Reconsideration
 October 14, 1992-he filed a Notice of Appeal from the
orders of September 16, 1992 and October 2, 1992
 October 28, 1992- the judge directed the execution of his
September 11, 1992 order granting the Stockholders/
Investors' claim
CA: The Liquidator filed Petition for Certiorari, Prohibition and
Mandamus in the Court of Appeals to set aside the orders of
the trial court denying his appeal. On December 16, 1993, the
Fourteenth Division ruled in the case of the
Stockholders/Investors that a liquidation proceeding is an
ordinary action. Therefore, the period for appealing from any
decision or final order rendered therein is 15 days and that since
the Liquidator's appeal notice was filed on the 23rd day of his
receipt of the order appealed from, deducting the period during
which his motion for reconsideration was pending, the notice of
appeal was filed late. Accordingly, the Fourteenth Division
dismissed the Liquidator's petition.
SC: The Liquidator contends that the Petition for Assistance in
the Liquidation of the Pacific Banking Corporation is a Special
Proceeding case and/or one which allows multiple appeals, in
which case the period of appeal is 30 days and not 15 days from
receipt of the order/judgment appealed from.
ISSUES:
Main Issue:
1. Whether a petition for liquidation under §29 of Rep. Act No.
265, otherwise known as the Central Bank Act, is a special
proceeding or an ordinary civil action.
Sub-issues:
2. Whether or not In G.R. No. 112991 (the case of the
Stockholders/Investors), the Liquidator's notice of appeal was
filed on time.
3. Whether or not, in G.R. No. 109373 (case of the Labor Union),
the Fifth Division correctly granted the Liquidator's Petition
for Certiorari, Prohibition and Mandamus.
4. Whether or not, in G.R. No. 109373, (case of the Labor Union),
the Liquidator can question the order of the court or appeal from
it, in which the liquation plan was already approved by the
Monetary Board.
5. Whether or not, in G.R. No. 109373, (case of the Labor Union),
the notice of appeal and motion for extension of time to file the
record on appeal filed in behalf of the Central Bank was filed by
the office of the Solicitor General as counsel for the Central Bank.
HELD:
1. The petition for liquidation under §29 of Rep. Act No. 265,
otherwise known as the Central Bank Act, is a special
proceeding.
BP Blg. 129 provides:
§39. Appeals. — The period for appeal from final orders,
resolutions, awards, judgments, or decisions of any court in all
cases shall be fifteen (15) days counted from the notice of the
final order, resolution, award, judgment or decision appealed
from: Provided, however, that in habeas corpuscases the period
for appeal shall be forty-eight (48) hours from the notice of the
judgment appealed from.
No record on appeal shall be required to take an appeal. In lieu
thereof, the entire record shall be transmitted with all the pages
prominently numbered consecutively, together with an index of
the contents thereof.
This section shall not apply in appeals in special proceedings and
in other cases wherein multiple appeals are allowed under
applicable provisions of the Rules of Court.
The Interim Rules and Guidelines to implement BP Blg. 129
provides:
19. Period of Appeals. —
(a) All appeals, except in habeas corpus cases and in the cases
referred to in paragraph (b) hereof, must be taken within fifteen
(15) days from notice of the judgment, order, resolution or award
appealed from.
(b) In appeals in special proceedings in accordance with Rule 109
of the Rules of Court and other cases wherein multiple appeals
are allowed, the period of appeals shall be thirty (30) days, a
record on appeal being required.
Rule 2 of the Rules of Court provides:
§1. Action defined. — Action means an ordinary suit in a court of
justice, by which the party prosecutes another for the
enforcement or protection of a right, or the prevention or redress
of a wrong.
§2. Special Proceeding Distinguished. — Every other remedy,
including one to establish the status or right of a party or a
particular fact, shall be by special proceeding.
Distinction between an ordinary action and a special proceeding
by Chief Justice Moran states:
ACTION (CIVIL ACTION) SPECIAL PROCEEDINGS
The act by which one sues The act by which one seeks to
another in a court of justice establish the status or right of a
for the enforcement or party, or a particular fact.
protection of a right, or the
prevention or redress of a
wrong.
A formal demand of a right A petition for a declaration of a
by one against another. status, right or fact.
Proper remedy of a party Proper remedy of a party
litigant that seeks to whose purpose is to seek the
 recover property from appointment of a guardian for
another. an insane.
Considering this distinction, a petition for liquidation of an
insolvent corporation should be classified a special
proceeding and not an ordinary action. Such petition does not
seek the enforcement or protection of a right nor the prevention
or redress of a wrong against a party. It does not pray for
affirmative relief for injury arising from a party's wrongful act or
omission nor state a cause of action that can be enforced against
any person.
What it seeks is merely a declaration by the trial court of the
corporation's insolvency so that its creditors may be able to file
their claims in the settlement of the corporation's debts and
obligations. Put in another way, the petition only seeks a
declaration of the corporation's debts and obligations. The
petition only seeks a declaration of the corporation's state of
insolvency and the concomitant right of creditors and the order of
payment of their claims in the disposition of the corporation's
assets.
Also, contrary to the rulings of the Fourteenth Division, liquidation
proceedings do not resemble petitions for interpleader. Rather, a
liquidation proceeding resembles the proceeding for the
settlement of state of deceased persons under Rules 73 to 91 of
the Rules of Court. The two have a common purpose: the
determination of all the assets and the payment of all the debts
and liabilities of the insolvent corporation or the estate. The
Liquidator and the administrator or executor are both charged
with the assets for the benefit of the claimants. In both instances,
the liability of the corporation and the estate is not disputed. The
court's concern is with the declaration of creditors and their rights
and the determination of their order of payment.
Furthermore, as in the settlement of estates, multiple appeals are
allowed in proceedings for liquidation of an insolvent corporation.
As stated:
A liquidation proceeding is a single proceeding which consists
of a number of cases properly classified as "claims." It is basically
a two-phased proceeding. The first phase is concerned with the
approval and disapproval of claims. Upon the approval of the
petition seeking the assistance of the proper court in the
liquidation of a close entity, all money claims against the bank are
required to be filed with the liquidation court. This phase may end
with the declaration by the liquidation court that the claim is not
proper or without basis. On the other hand, it may also end with
the liquidation court allowing the claim. In the latter case, the
claim shall be classified whether it is ordinary or preferred, and
thereafter included Liquidator. In either case, the order allowing
or disallowing a particular claim is final order, and may be
appealed by the party aggrieved thereby.
The second phase involves the approval by the Court of the
distribution plan prepared by the duly appointed liquidator. The
distribution plan specifies in detail the total amount available for
distribution to creditors whose claim were earlier allowed. The
Order finally disposes of the issue of how much property is
available for disposal. Moreover, it ushers in the final phase of the
liquidation proceeding — payment of all allowed claims in
accordance with the order of legal priority and the approved
distribution plan.
Verily, the import of the final character of an Order of allowance
or disallowance of a particular claim cannot be overemphasized.
It is the operative fact that constitutes a liquidation proceeding a
"case where multiple appeals are allowed by law." The issuance
of an Order which, by its nature, affects only the particular claims
involved, and which may assume finality if no appeal is made
therefrom, ipso facto creates a situation where multiple appeals
are allowed.
A liquidation proceeding is commenced by the filing of a single
petition by the Solicitor General with a court of competent
jurisdiction entitled, "Petition for Assistance in the Liquidation
of e.g., Pacific Banking Corporation. All claims against the
insolvent are required to be filed with the liquidation court.
Although the claims are litigated in the same proceeding, the
treatment is individual. Each claim is heard separately. And the
Order issued relative to a particular claim applies only to said
claim, leaving the other claims unaffected, as each claim is
considered separate and distinct from the others. Obviously, in
the event that an appeal from an Order allowing or disallowing a
particular claim is made, only said claim is affected, leaving the
others to proceed with their ordinary course. In such case, the
original records of the proceeding are not elevated to the
appellate court. They remain with the liquidation court. In lieu of
the original record, a record of appeal is instead required to be
prepared and transmitted to the appellate court.
Inevitably, multiple appeals are allowed in liquidation
proceedings. Consequently, a record on appeal is necessary
in each and every appeal made. Hence, the period to appeal
therefrom should be thirty (30) days, a record on appeal
being required. (Record pp. 162-164).
2. Yes, In G.R. No. 112991 (the case of the
Stockholders/Investors), the Liquidator's notice of appeal was
filed on time, having been filed on the 23rd day of receipt of the
order granting the claims of the Stockholders/Investors.
However, the Liquidator did not file a record on appeal with
the result that he failed to perfect his appeal. As already stated
a record on appeal is required under the Interim Rules and
Guidelines in special proceedings and for cases where multiple
appeals are allowed. The reason for this is that the several claims
are actually separate ones and a decision or final order with
respect to any claim can be appealed. Necessarily the original
record on appeal must remain in the trial court where other claims
may still be pending.
Because of the Liquidator's failure to perfect his appeal, the order
granting the claims of the Stockholders/Investors became final.
Consequently, the Fourteenth Division's decision dismissing the
Liquidator's Petition for Certiorari, Prohibition
and Mandamus must be affirmed albeit for a different reason.
3. Yes, in G.R. No. 109373 (case of the Labor Union), the court
find that the Fifth Division correctly granted the Liquidator's
Petition for Certiorari, Prohibition and Mandamus. As already
noted, the Liquidator filed a notice of appeal and a motion for
extension to file a record on appeal on December 10, 1991, i.e.,
within 30 days of his receipt of the order granting the Union's
claim. Without waiting for the resolution of his motion for
extension, he filed on December 20, 1991 within the extension
sought a record on appeal. Respondent judge thus erred in
disallowing the notice on appeal and denying the Liquidator's
motion for extension to file a record on appeal.
4. Yes, the Liquidator can question the order of the court or
appeal from it
In liquidation proceedings, the function of the trial court is not
limited to assisting in the implementation of the orders of the
Monetary Board. Under the same section (§29) of the law invoked
by the Union, the court has authority to set aside the decision of
the Monetary Board "if there is a convincing proof that the action
is plainly arbitrary and made in bad faith." As this Court held
in Rural Bank of Buhi, Inc. v. Court of Appeals:
There is no question that the action of the monetary Board in this
regard may be subject to judicial review. Thus, it has been held
that the Court's may interfere with the Central Bank's exercise of
discretion in determining whether or not a distressed bank shall
be supported or liquidated. Discretion has its limits and has never
been held to include arbitrariness, discrimination or bad faith
(Ramos v. Central Bank of the Philippines, 41 SCRA 567 [1971]).
In truth, the Liquidator is the representative not only of the Central
Bank but also of the insolvent bank. Under §§28A-29 of Rep. Act
No. 265 he acts in behalf of the bank "personally or through
counsel as he may retain, in all actions or proceedings or against
the corporation" and he has authority "to do whatever may be
necessary for these purposes." This authority includes the power
to appeal from the decisions or final orders of the court which he
believes to be contrary to the interest of the bank.
5. Yes, the notice of appeal and motion for extension of time to
file the record on appeal filed in behalf of the Central Bank was
filed by the office of the Solicitor General as counsel for the
Central Bank. On October 22, 1992, as Assistant Solicitor
General Cecilio O. Estoesta informed the trial court in March 27,
1992, the OSG had previously authorized lawyers of the PDIC to
prepare and sign pleadings in the case. Conformably thereto the
Notice of Appeal and the Motion for Additional Time to submit
Record on Appeal filed were jointly signed by Solicitor Reynaldo
I. Saludares in behalf of the OSG and by lawyers of the PDIC.
Limjoco vs. Estate of Fragrante
G.R. No. L-770
April 27, 1948
FACTS:
On May 21, 1946, the Public Service Commission issued a
certificate of public convenience to the Intestate Estate of the
deceased Pedro Fragante, authorizing the said intestate estate
through its Special or Judicial Administrator, appointed by the
proper court of competent jurisdiction, to maintain and operate an
ice plant with a daily productive capacity of two and one-half (2-
1/2) tons in the Municipality of San Juan and to sell the ice
produced from the said plant in the Municipalities of San Juan,
Mandaluyong, Rizal, and Quezon City; that Fragante’s intestate
estate is financially capable of maintaining the proposed service.
Petioner argues that allowing the substitution of the legal
representative of the estate of Fragante for the latter as party
applicant and afterwards granting the certificate applied for is a
contravention of the law.
ISSUE:
Whether the estate of Fragante be extended an artificial judicial
personality.
HELD:
The estate of Fragrante must be extended an artificial judicial
personality. If Fragrante had lived, in view of the evidence of
record, would have obtained from the commission the certificate
for which he was applying. The situation has not changed except
for his death, and the economic ability of his estate to
appropriately and adequately operate and maintain the service of
an ice plant was the same that it received from the decedent
himself.
It has been the constant doctrine that the estate or the mass of
property, rights and assets left by the decedent, directly becomes
vested and charged with his rights and obligations which survive
after his demise. The reason for this legal fiction, that the estate
of the deceased person is considered a "person", as deemed to
include artificial or juridical persons, is the avoidance of injustice
or prejudice resulting from the impossibility of exercising such
legal rights and fulfilling such legal obligations of the decedent as
survived after his death unless the fiction is indulged.
The estate of Fragrante should be considered an artificial or
juridical person for the purposes of the settlement and distribution
of his estate which, include the exercise during the judicial
administration of those rights and the fulfillment of those
obligations of his estate which survived after his death.
The decedent's rights which by their nature are not extinguished
by death go to make up a part and parcel of the assets of his
estate for the benefit of the creditors, devisees or legatees, if any,
and the heirs of the decedent. It includes those rights and
fulfillment of obligation of Fragante which survived after his death
like his pending application at the commission.
SULPICIA VENTURA,petitioner, vs.HON. FRANCIS J.
MILITANTE, in His Capacity as Presiding Judge, Regional
Trial Court,7th Judicial District, Branch XII, Cebu City; and
JOHN UY,respondent.
G.R. No. 63145 October 5, 1999
FACTS:
Private respondent filed a Complaint for a Sum of Money and
Damages againstpetitioner. However, petitioner moved to
dismiss the foregoing complaint on the ground
that “the estate of Carlos Ngo has no legal personality,” the same
being “neither a natural no r legal person in contemption of law.”
The petitioner then filed an opposition to privaterespondent’s
Motion to Dismiss. The public respondent then gave private
respondent 15 days to make the amendment of the complaint.
Petitioner filed a MR of the order of publicrespondent.
First, she argued that the action instituted by the private
respondent to recoverP48, 889.70, representing the unpaid price
of the automotive spare parts purchased by herdeceased
husband during his lifetime, is a money claim which, under
Section 21, Rule 3 of the Revised Rules of Court, does not
survive, the same having been filed after Carlos Ngohad already
died.
Second, she claimed that the public respondent never acquired
jurisdictionover the subject matter of the case which, being an
action to recover a sum of money froma deceased person, may
only be heard by a probate court. Private respondent opposed
theforegoing motion. Public respondent then issued an Order
giving private respondent 24hours to file his amended complaint.
Private respondent then filed his amended complaint.
Petitioner then filed a Comment to Plaintiff’s Amended Complaint.
Private respondent then filed A Rejoinder to Defendant’s
Comment. Public respondent then issued the hereinassailed
order. Hence, the present Petition for Certiorari assailing the said
Order.
ISSUE: WON A DEAD PERSON OR HIS ESTATE MAY BE
A PARTY PLAINTIFF IN A COURTACTION.HELD:
No.Firstly, neither a dead person nor his estate may be a party
plaintiff in a courtaction. A deceased person does not have such
legal entity as is necessary to bring action somuch so that a
motion to substitute cannot lie and should be denied by the court.
Anaction begun by a decedent's estate cannot be said to have
been begun by a legal person,since an estate is not a legal entity;
such an action is a nullity and a motion to amend theparty plaintiff
will not likewise lie, there being nothing before the court toamend.
Considering that capacity to be sued is a correlative of the
capacity to sue, to thesame extent, a decedent does not have the
capacity to be sued and may not be named aparty defendant in
a court action. .
Secondly, It is clear that the original complaint of private
respondent against the estate of Carlos Ngo was a suit against
Carlos Ngo himself who was already dead at the time of thefiling
of said complaint. At that time, and this private respondent
admitted, no specialproceeding to settle his estate had been filed
in court. As such, the trial court did notacquire jurisdiction over
either the deceased Carlos Ngo or his estate. It is true
thatamendments to pleadings are liberally allowed in furtherance
of justice, in order that everycase may so far as possible be
determined on its real facts, and in order to speed the trialof
causes or prevent the circuitry of action and unnecessary
expense. But amendmentscannot be allowed so as to confer
jurisdiction upon a court that never acquired it in the first place.
When it is evident that the court has no jurisdiction over the
person and the subjectmatter and that the pleading is so fatally
defective as not to be susceptible of amendment,or that to permit
such amendment would radically alter the theory and the nature
of theaction, then the court should refuse the amendment of
the defective pleading and order thedismissal of the case.
Philippine Savings Bank vs Lantin Held: the proceedings in the court below do not partake of
the nature of the insolvency proceedings or settlement of a
Duplex-apartment house on a lot in Sampaloc, Manila owned by decedent's estate. The action filed by Ramos was only to
Filomeno and Socorro Tabligan duplex built by Candido COLLECT THE UNPAID COST of the construction of the
Ramos, a duly licensed architect and a building contractor for 32, duplex apt. insolvency proceedings and settlement of a
927 spouses paid 7,139 only- hence the architect used his decedent's estate are both proceedings in rem which are
own money to finish the construction of the duplex-apartment - bindingagainst the whole world regardless of WON persons
25,788.50. in dec 1966 and feb 1967 spouses Tabligan having interest were notified or not- they are equally bound.
obtained from Philippine Savings bank 3 loans in the total although lower court found that there were no known creditors
amountof 35,000 to complete the construction of the duplex other than the plaintiff and defendant herein. it will not bar other
apartment. To secure the payment of the loans, the spouses creditors in the event they show up and present their claims
executed 3 PNs and 3 Deeds of REM over the property subject. against PSB claimingthat they also have preferred liens against
all REM were registered with ROD Manila, TCTs were free from the property involved. TCT issued in favor of bank is supposed to
all liens and encumbrances at that time. spouses later failed to be indefeasible. it wouldnt hurt if annotated. as far as bank knew,
pay their monthly amortizations so BANK FORECLOSED ON it financed the entire construction "equivalent general liquidation"-
THE MORTGAGED AND WASTHE HIGHEST BIDDER AT THE purchaser in good faith and for value takes the registered land
PUBLIC AUCTION. Lantin also filed an action against free from liensand encumbrances other thant the statutory liens
spouses to collect on unpaid cost of the construction and and those recorded in the TCT.
later succeeded inOBTAINING A WRIT OF PREL
ATTACHMENT over the property- later adverse claim annotated
at the back of the TCT.
Trial court ruling: in favor of Architect but writ of exec
unsatisfied. Architect wrote letter to PSB FOR THE
DELIVERY TO HIM OF HIS PRO-RATA SHARE OVER THE
PROPERTY. PSB REFUSED TO PAY
ISSUE: WON ARCHITECT IS ENTITLED TO CLAIM A PRO-
RATA SHARE IN THE VALUE OF THE PROPERTY IN
QUESTION?
Bank: De Barretto vs Villanueva- not the proceedings
contemplated- there must be an insolvency proceeding
orother liquidation proceeding; architect's lien did not acquire
the character of a statutory lien equal to PSB'sregistered
mortgage.
Ramos:proceedings in trial court can qualify as a general
liquidation of the estate of the spouses Tabliganbecause the
only existing property of spouses is the duplex apt