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Barangay Conciliation

Morata v. Go, 125 SCRA 444 (1983)


Petition for certiorari and prohibition with prayer for writ of prelim injunction to review the order of Judge
Tomol CFI Cebu BR11.

FACTS:
Respondent spouses Victor & Flora Go filed in the CFI of Cebu a complaint against petitioners Julius & Ma.
Luisa Morata for recovery of a sum of money plus damages amounting to Php49,400. Petitioners filed a
motion to dismiss on grounds that of failure of the complaint to allege prior availment by plaintiffs of the
barangay conciliation process required by PD1508, as well as the absence of a certification by the Lupon or
Pangkat Secretary that no conciliation or settlement had been reached by the parties. The motion was
opposed by private respondents. Respondent judge denied the said motion to dismiss. Petitioners filed a
motion for recon but the same was denied.

ISSUE:
Whether or not there should be barangay conciliation.

HELD:
The Lupon has the authority to settle amicably all types of disputes involving parties who actually reside in
the same city or municipality. The law makes no distinction with respect to the classes of civil disputes that
should be compromised at the barangay level, in contradistinction to the limitation imposed upon the Lupon
over criminal cases. The fact that the city or municipal courts are forum for the nullification or execution of
the settlement or arbitration award issued by the Lupon cannot be construed as a limitation of the scope of
authority of the Lupon. This merely confers upon the city and municipal courts the jurisdiction to pass upon
and resolve petitions or actions for nullification or enforcement of settlement/arbitration awards issued by
the Lupon, regardless of the amount involved or the nature of the original dispute. But there is nothing in the
context of said sections to justify the thesis that the mandated conciliation process in other types of cases
applies exclusively to said inferior courts. The conciliation process at the barangay level is compulsory not
only for cases falling under the exclusive competent of the MeTCs and MTCs, but for actions cognizable by
the RTCs as well.

Candido v. Macapagal, 221 SCRA 328 (1993)


FACTS:

This is a petition for certiorari to annul and set aside of the trial court dismissing the complaint of
petitioners Emiliana and Francisca Candido against private respondent Mila Contreras on the ground of lack
of jurisdiction for petitioners' failure to comply with the mandatory barangay conciliation process required
by Presidential Decree No. 1508, otherwise known as the Katarungang Pambarangay Law. Respondents
Sagraria Lozada, Jorge Candido, et al, who represented themselves to be the sole heirs of the late Agapito
Candido executed a Deed of Extra-judicial Settlement of Estate with Sale 3 covering parcels of land owned
by the latter (Agapito Candido) and sold to private respondent Mila Contreras in whose name said
properties are now registered. Petitioners instituted an action with the Regional Trial Court of Bulacan
defendants to annul the Deed of Extra-judicial Settlement of Estate with Sale, to cancel TCT No. 120656-M
issued in the name of private respondent and to reinstate TCT No. 223602 in the name of Agapito Candido
married to Sagraria Lozada. Private respondent filed a Motion to Dismiss 4 on the ground that petitioners
failed to comply with the mandatory conciliation process required under P.D. No. 1508 as she resides in the
same municipality with the petitioners. RTC ruling: dismissed the case for lack of prior referral of the
dispute before the Katarungang Pambarangay. MFRs were denied. Hence, petitioners file this petition
alleging grave abuse of discretion on the part of the respondent judge dismissing private respondent in the
complaint instituted by the petitioners notwithstanding the fact that the other defendants in Civil Case No.
697-M-90 reside in different municipalities and cities.
ISSUE: WON prior referral of the said dispute before the Katarungang Pambarangay is necessary before
filing the case to the RTC.
HELD: No. The Lupon of the barangay ordinarily has the authority to settle amicably all types of disputes
involving parties who actually reside in the same municipality, city or province.
Where the complaint does not state that it is one of the excepted cases, or it does not allege prior
availment of said conciliation process, or it does not have a certification that no conciliation or settlement
had been reached by the parties, the case could be dismissed on motion.
In the instant case, the fact that petitioners and private respondent, reside in the same municipality of
Obando, Bulacan does not justify compulsory conciliation under P.D. No. 1508 where the other co-
defendants reside in barangays of different municipalities, cities and provinces.
Petitioners can immediately file the case in court. It would not serve the purpose of the law in discouraging
litigation among members of the same barangay through conciliation where the other parties reside in
barangays other than the one where the Lupon is located and where the dispute arose.

Ramos v. CA, 174 SCRA 690 (1989) (old digest)


FACTS: Domingo Ramos authorized his brother Manuel to sell his share of lands owned by them in common with their other
brothers and sisters. Manuel did. Later, Domingo revoked the power of attorney and demanded an accounting from Manuel.
Manuel refused. Domingo then filed a complaint with the Punong Barangay of Pampanga, Buhangin District, Davao City. Manuel
appeared but Domingo did not come on the scheduled hearing by the Punong Bgy. Domingo was represented, however, by his
wife who said her husband wanted to avoid a direct confrontation with his brother. She requested that the Punong Bgy issue a
certification that no settlement had been reached so a complaint could be filed in court. The Punong Bgy complied. Thereupon,
Domingo sued Manuel in the RTC Davao, also for accounting, in Civil Case No. 18560-87.Manuel moved to dismiss the
complaint on the ground of non-compliance with the requirements of PD1508. He cited the failure of the Punong Bgy to refer the
dispute to the Pangkat ng Tagapagkasundo after the unsuccessful mediation proceedings convened by him. The motion was denied
Manuel then filed with this Court a petition for certiorari which we referred to the CA. CA denied the petition. It held that there
was no need for such referral because Domingo had clearly indicated, by his refusal to appear before the Punong Bgy, that no
extrajudicial settlement was possible between him and his brother. Manuel is now before us to question this decision.

HELD: The dispute should not have ended with the mediation proceedings before the Punong Barangay because of his failure to
effect a settlement. It was not for the Punong Barangay to say that referral to the Pangkat was no longer necessary merely because
he himself had failed to work out an agreement between the parties. The Pangkat could have exerted more efforts and succeeded
(where he had not) in resolving the dispute. If the complainant refuses to appear before the Punong Barangay, he is barred from
seeking judicial recourse for the same course of action. The parties must appear in person without assistance of counsel, except
minors and incompetents.

Vda. de Borromeo v. Pogoy, 126 SCRA 217 (1983)


Facts:
Deceased Vito Borromeo was the original owner of the building which was leased to herein petitioner Petra Vda. De
Borromeo for P500 per month payable within the first five days of the month. The estate of the deceased is
intestate.
On August 28, 1982, Atty Ricardo Reyes, administrator of the estate, served upon petitioner a letter demanding that
she pay the overdue rentals corresponding to the period from March to September (1982), and thereafter vacate the
premises. Petitioner failed to do so, thus the respondent instituted an ejectment case against the petitioner.
Petitioner moved to dismiss for want of jurisdiction. She points out that the parties are from the same cities and as
such they must refer the dispute to the barangay Court or Lupon before going through the judicial courts.
Respondent’s defense was that it was danger of prescribing under the statute of limitations. The motion was
dismissed thus this case.

Since the petitioner was unable to secure a reconsideration of said order, petitioner came to this Court through this
petition for certiorari. In both his comment and memorandum, private respondent admitted not having availed
himself of the barangay conciliation process, but justified such omission by citing paragraph 4, section 6 of PD 1508
which allows the direct filing of an action in court where the same may otherwise be barred by the Statute of
Limitations, as applying to the case at bar.

Issue:

Whether or not referral to a Barangay Lupon is required in cases regarding an intestate estate under administration.

(Atty Famador: When can an intestate estate of a deceased person have a separate and distinct personality similar to
corporations?)

Ruling:
PD 1508 makes the conciliation process at the Barangay level a condition precedent for filing of actions in those
instances where said law applies but it is subject to certain exceptions. One of the exceptions: “Any complaint by or
against corporations, partnership or juridical entities, since only individuals shall be parties to Barangay conciliation
proceedings either as complainants or respondents (Sec. 1, Rule VI, Katarungang Pambarangay Rules);

Under Section 4(a) of PD No. 1508, referral of a dispute to the Barangay Lupon is required only where the parties
thereto are "individuals." An "individual" means "a single human being as contrasted with a social group or
institution." Obviously, the law applies only to cases involving natural persons, and not where any of the parties is a
juridical person such as a corporation, partnership, corporation sole, testate or intestate, estate, etc.

In Civil Case No. R-239l5, plaintiff Ricardo Reyes is a mere nominal party who is suing in behalf of the Intestate Estate
of Vito Borromeo. while it is true that Section 3, Rule 3 of the Rules of Court allows the administrator of an estate to
sue or be sued without joining the party for whose benefit the action is presented or defended, it is indisputable that
the real party in interest in Civil Case No. R-23915 is the intestate estate under administration. Since the said estate is
a juridical person, plaintiff administrator may file the complaint directly in court, without the same being coursed to
the Barangay Lupon for arbitration.

San Miguel v. Pundogar, 173 SCRA 704 (1989)


Facts: Petitioner San Miguel Filed a complaint for breach of contract with damages against respondent
Christina Trino before the RTC Lanao Del Norte. A certificate to file action, signed by the Barangay captain
of Barangay Palao, Iligan City, bearing the notation tthat the respondent cannot be contacted was filed along
with the complaint. On january 26, 1986 the trial court rendered a decision against private respondent.
Private respondent filed a petition for relief from judgment with the trial court, alleging that the court had no
jurisdiction to render its decision for failure of petitioner to go trhough the mandatory conciliation. Private
respondent argued that the certification of the Barangay Captain was inadequate compliance with PD 1508,
private respondent being a resident not of barangay palao but rather of brgy. Cabili. The trial court presided
by respondent judge, issued an order upholding private respondents contentions and set aside the assailed
decision holding that RTC acted without jurisdiction over the parties and the subject matter of the action for
failure to comply with PD 1508. A motion for reconsideration was denied.

Issues: Whether or not the lower court acquired jurisdiction for failure to comply with PD 1508

Held: Where the defendant in an action fails for one reason or another to respond to a notice to appear before
the lupon, the requirement of barangay conciliation must be regarded as having been satisfied by the
plaintiff. A defendant cannot be allowed to frustrate the requirement of the statute by her own refusal or
failure to appear before the lupon and then later to assail a judgment rendered in such action by setting up
the very ground of non compliance with PD 1508. In simplest terms, a defendant cannot be allowed to profit
by her own default. Private respondent stated that she had not receive notice to appear before the lupon. We
do not believe that the statement and suggestion should be given credence. The barangay authorities of
barangay palao must be presumed to have performed their official duties and to have acted regularly in
issuing the certificate to file action. They must be presumed to have sent a notice to private respondent to
appear before the Lupon.

Uy v. Contreras, 237 SCRA 167 (1994)


Facts: Felicidad Uy (Uy) subleased from Susanna Atayde (Atayde) half of the second floor of a building located in Makati.
Uy operated and maintained a beauty parlor there. When the sublease contract expired, an argument arose between Uy
and Atayde because the former was unable to completely remove all her movable properties from the premises. The
argument led to a scuffle between Uy, Atayde, and Atayde's employees. Six days later, Atayde and her employees filed a
complaint with the barangay captain of Valenzuela, Makati. On the scheduled confrontation between the parties in the
barangay, only Uy appeared. The confrontation was reset. Two informations for slight physical injuries were filed against Uy
with the MTC of Makati. In her counter-affidavit, Uy alleged the prematurity of filing the criminal cases because of the
undergoing of conciliation proceedings between them. She later on filed a motion to dismiss for non-compliance with the
requirement of P.D. No. 1508 on prior referral to the Lupong Tagapamayapa and pursuant to Section 18 of the 1991
Revised Rule on Summary Procedure. She also attached the certification of the barangay captain, attesting to the existence
of an ongoing conciliation proceedings between them. MTC denied the motion to dismiss, explaining that the offense was
about to prescribe or barred by the statute of limitations anyway. The motion for reconsideration by Uy was denied, hence
the filing of Uy with the Supreme Court of the special civil action for certiorari.

Issue

Whether or not the judge of MTC Makati gravely abused his discretion when he denied the motion to dismiss of the
petitioner, considering that the private respondents failed to comply with the mandatory requirement of P.D. 1508 as
reiterated in Sec. 412 of the Local Government Code and the 1991 Revised Rule on Summary Procedure.

Ruling

Yes. The respondent judge acted with grave abuse of discretion in refusing to dismiss the criminal cases.

It may thus be observed that the revised Katarungang Pambarangay law has at least three new significant features, to wit:

a) It increased the authority of the lupon in criminal offenses from those punishable by imprisonment not exceeding thirty
days or a fine not exceeding P200.00 in P.D. No. 1508 to those offenses punishable by imprisonment not exceeding one
year or a fine not exceeding P5,000.00.

b) As to venue, it provides that disputes arising at the workplace where the contending parties are employed or at the
institution where such parties are enrolled for study, shall be brought in the barangay where such workplace or institution
is located.

c) It provides for the suspension of the prescriptive periods of offenses during the pendency of the mediation, conciliation,
or arbitration process.

While P.D. No. 1508 has been repealed by the Local Government Code of 1991, the jurisprudence built thereon regarding
prior referral to the lupon as a pre-condition to the filing of an action in court remains applicable because its provisions on
prior referral were substantially reproduced in the Code.

Pursuant to paragraph (a), Section 412 of the Local Government Code, respondent Judge Contreras should have granted
the motion to dismiss the criminal cases. He cannot justify its denial by taking refuge under Section 6 of P.D. No. 1508
(more properly, Section 412(b)(4) of the Local Government Code of 1991) which states that the parties may go directly to
court where the action is about to prescribe. This is because, as earlier stated, pursuant to paragraph (c), Section 410 of
the Code, the prescriptive period was automatically suspended for a maximum period of sixty days from 23 April 1993
when the private respondents filed their complaints with the lupon of Valenzuela, Makati.

Moreover, having brought the dispute before the lupon of Barangay Valenzuela, Makati, the private respondents are
estopped from disavowing the authority of the body which they themselves had sought. Their act of trifling with the
authority of the lupon by unjustifiably failing to attend the scheduled mediation hearings and instead filing the complaint
right away with the trial court cannot be countenanced for to do so would wreak havoc on the barangay conciliation
system.

Gegare v. CA, 177 SCRA 471 (1989)


FACTS: A 270sq.mtr lot situated in GenSan was titled in the name of Paulino Elma. A reversion case was
filed by the Republic against Paulino and the lot was reverted to the mass of public domain subject to
disposition and giving preferential right to its actual occupant, Napoleon Gegare. Both petitioner and private
respondent filed an application for the lot in the Board of Liquidators (Board). Board resolved to dispose the
lot in favor of petitioner by way of a negotiated sale. Private respondent protested against the application of
petitioned, then Board denied the said protest.

A request for recon of private respondent was referred by the Board to Artemio Garlit, liquidator-designee,
GenSan Branch for verification and investigation. After which, Garlit submitted a report to the Manila Ofc
recommending division of the lot to the parties. Nevertheless, the Board denied the protest because the case
had already been decided by the court. However, a MfR filed by private respondent was favorably
considered by the Board. Board directed the chief of LASEDECO to investigate the occupancy and area of
the lot. Findings were that only private respondent was the actual occupant so the LASEDECO chief
recommended the division of the property. Both parties appealed to the Ofc of the President but both appeals
were dismiss.

A MfR filed by petitioner was denied on 29may84 Private respondent paid for the value of ½ of the lot and
applied for the issuance of a patent. Patent was issued to ½ portion of the lot. Petitioner was also adviced to
file his application and pay his portion. Petitioner filed an action for “Annulment and Cancellation of
Partition” and/or to Declare them Null and Void” against private respondent and the Board. Private
respondent filed MtD the complaint on the grounds et al …(5) lack of conciliation efforts pursuant to sec6
PD1508. The motion was granted. Petitioner MfR thereof to which an opposition was filed by private
respondent. MfR was granted and private respondent was required to file his responsive pleading. Private
respondent filed his answer. On 24 july 1986, private respondent asked for a prelim hearing of the grounds
for the MtD in his affirmative defenses. This was denied. Private respondent filed a petition for certiorari
and prohibition in the CA questioning the said orders of the trial court. CA granted the petition, declaring the
questioned orders null and void, and directing the trial court to dismiss the civil case for lack of jurisdiction.
MfR filed by petitioner was denied. Thus, the herein petition.

ISSUE:
Whether or not there should be a barangay conciliation.

HELD:
Conciliation process at the Barangay level is a condition precedent for the filing of a complaint in Court.
Non-compliance with that condition precedent could effect the sufficiency of the plaintiff's cause of action
and make his complaint vulnerable to dismissal on the ground of lack of cause of action or prematurity.
Pending the first mediation, no case could be validly filed with the courts. Filing of complaint with the lupon
suspends the prescriptive period for 60 days at most.

Rogie: Filing a complaint with the lupon signifies that you want to conciliate or mediate. Since filing a case
in court would signify that you want to litigate and not mediate. Therefore the conciliation should be
finished before one can file a case in court. Escolin: Labor cases are exempt from Barangay Conciliation
proceedings because the labor court has its own experts at arriving at an amicable settlement.

Galube v. Laureta, 157 SCRA 627 (1988)


FACTS: Alfredo and Revelina Laureta ceded to petitioner all their rights and interests over a house and lot located in
Quezon Hill, Baguio City for P70,000. Petitioner paid the Lauretas P50,000 with the balance payable later.
When P18,000 of the balance remained unpaid, the parties brought the matter before the barangay
On February 10, 1984, the parties entered into an amicable settlement whereby they agreed that the P18,000 would be
paid in monthly installments starting April, 1984 and that non-compliance therewith would "mean execution in accordance
with the Barangay Law." 1
On July 17, 1984, Petitioner filed in the office of the barangay captain of Victoria Village an unsworn complaint for the
annulment of the amicable settlement. He alleged therein that his consent to said settlement had been vitiated by mistake
or fraud and therefore, the amicable settlement should be annulled and a new one entered into by the parties. 2
Meanwhile, the inferior court issued the writ after the Lauretas filed in the Municipal Trial Court of Baguio City, Branch IV, a
motion for the issuance of a writ of execution based on the amicable settlement. Petitioner filed in the Regional Trial Court
of Baguio City a complaint for the annulment of the amicable settlement with prayer for a writ of preliminary injunction
and/ or restraining order. 3
The lower court denied the prayer for the issuance of a restraining order and/or writ of preliminary injunction.
The Lauretas filed a motion to dismiss the complaint on the ground of lack of jurisdiction over the nature of the action.
Petitioner contended that the lower court had jurisdiction over the case because he had named as defendants therein
the municipal trial court and the sheriff of Baguio City and hence, the complaint fell under the exceptions in Section 2
[21 of P.D. 1508].
The Court noted the fact that petitioner failed to repudiate the amicable settlement within the 10-day period provided
for in Section 11 of P.D. 1508 as the parties entered into said amicable settlement on February 10, 1984 and yet it was only
on July 27, 1984 when petitioner repudiated it through an unsworn complaint for its annulment.
ISSUE: Whether the Regional Trial Court has jurisdiction to annul an amicable settlement arrived at by the parties through
the mediation of the Lupong Tagapayapa, in the absence of a repudiation of said amicable settlement within the 10-day
period provided for in Section 11 of Presidential Decree No. 1508.
HELD: NO. Section 6 of P.D. 1508 is mandatory in character
SEC. 6. Conciliation pre-condition to filing of complaint.— No complaint, petition action or proceeding involving any matter
within the authority of the Lupon as provided in Section 2 hereof shall be filed or instituted in court or any other
government office of adjudication unless there has been a confrontation of the parties before the Lupon Chairman or
the Pangkat and no conciliation or settlement has been reached as certified by the Lupon Secretary or
the Pangkat Secretary, attested by the Lupon or Pangkat Chairman, or unless the settlement has been repudiated.
However, the parties may go directly to court in the following cases:
[1] Where the accused is under detention;
[2] Where a person has otherwise been deprived of personal liberty calling for habeas corpus proceedings;
[3] Actions coupled with provisional remedies such as preliminary injunction, attachment, delivery of personal property
and support pendente lite; and
[4] Where the action may otherwise be barred by the Statute of Limitations
Once the parties have signed an amicable settlement, any party who finds reasons to reject it must do so in accordance
with Section 13 of P.D. 1508 which states:
SEC. 13. Repudiation. — Any party to the dispute may, within ten [10] days from the date of the settlement, repudiate the
same by filing with the Barangay Captain a statement to that effect sworn to before him, where the consent is vitiated by
fraud, violence or intimidation. Such repudiation shall be sufficient basis for the issuance of the certification for filing of a
complaint, provided for in Section 6, hereof.
Pursuant to P.D. 1508, Section 12, Rule VI of the Katarungang Pambarangay Rules which were promulgated "for the
amicable settlement of disputes at the barangay level, without judicial recourse," also provides that " [f]ailure to repudiate
the settlement or the arbitration agreement within the time limits respectively set [in Section 10 thereof], shall be
deemed a waiver of the right to challenge on said grounds," i.e., fraud, violence or intimidation.
Any party, therefore, who fails to avail himself of the remedy set forth in Section 13 must face the consequences of the
amicable settlement for he can no longer file an action in court to redress his grievances arising from said settlement.
It should be emphasized that under Section 11 of said law, "[t]he amicable settlement and arbitration award shall have
the force and effect of a final judgment of a court upon the expiration of the ten [10] days from the date thereof unless
repudiation of the settlement has been made or a petition for nullification of the award has been filed before the proper
city or municipal court."
Hence, the lower court correctly held that P.D. 1508 does not provide for a judicial procedure for the annulment of an
amicable settlement because the remedy of repudiation supplants the remedy of a court annulment. An aggrieved party
may only resort to a court action after he has repudiated the settlement in accordance with Section 13 as Section 6 clearly
states that repudiation is a pre-condition to the filing of a complaint regarding any matter within the authority of
the Lupong Tagapayapa. It should be clarified, however, that the "petition for nullification" mentioned in Section 11 refers
to an arbitration award pursuant to Section 7 of the same law and not to an amicable settlement.
The primordial objective of P.D. 1508 is to reduce the number of court litigations and prevent the deterioration of the
quality of justice which has been brought about by the indiscriminate filing of cases in the courts. To allow court actions
assailing unrepudiated amicable settlements would exacerbate congestion of court dockets. This is repugnant to the spirit
of P.D. 1508.
Having failed to repudiate the amicable settlement within the ten-day period, petitioner is left with no recourse but to
abide by its terms. He, therefore, acted correctly when he eventually fully satisfied his obligation pursuant to the amicable
settlement, thereby, rendering his case moot and academic.

JURISDICTION
2. Ortigas v. Herrera, 120 SCRA 89 (1983)
ORTIGAS & COMPANY, LIMITED PARTNERSHIP vs. JUDGE JOSE B. HERRERA, 120 SCRA 89, G.R. No. L-36098, January
21, 1983

Facts:

Petitioner and private respondent entered into an agreement whereby for and in consideration of P55,430, the
former agreed to sell to the latter a parcel of land with a special condition that should private respondent as
purchaser complete the construction including the painting of his residential house on said lot within two years,
petitioner, as owner, has agreed to refund to private respondent the amount of P10.00 per square meter.

When the aforesaid special condition was fulfilled, private respondent accordingly notified in writing the petitioner of
the same and requested for his refund amounting to P4,820.

Upon failure of petitioner to pay his obligation, private respondent filed a complaint for sum of money and damages
with the City Court of Manila, against petitioner. A motion to dismiss was filed by petitioner on grounds of lack of
jurisdiction, failure of the complaint to state a cause of action and improper venue. City Court Judge Jose B. Herrera
in his order held in abeyance the resolution on the motion until after the trial of the case on the merits.

A reconsideration of the said order having been denied, petitioner filed with the Court of First Instance of Manila, a
special civil action for certiorari and prohibition with preliminary injunction. A motion to dismiss was filed by private
respondent, and on November 17, 1972, the petition was dismissed on the ground that the claim of private
respondent in his complaint, being less than P10,000, is within the exclusive jurisdiction of the city court.

Petitioner thus filed the present petition and argues among others that: (a) as detriment from the allegations of the
complaint, the action is for specific performance of contract; and (b) actions in which the subject of litigation is not
capable of pecuniary estimation such as complaints for specific performance of contract are exclusively cognizable by
the Court of First Instance.

Issues:

1. Whether or not the case is for the collection of a sum of money.


2. Whether or not the city court has jurisdiction to hear and decide the case on its merits

Ruling:

1. NEGATIVE. The action involved in this case is one for specific performance and not for a sum of money and
therefore incapable of pecuniary estimation, because what private respondent seeks is the performance of
petitioner's obligation under a written contract to make a refund but under certain specific conditions still to be
proven or established. In a case for the recovery of a sum of money, as the collection of a debt, the claim is
considered capable of pecuniary estimation because the obligation to pay the debt is not conditioned upon any
specific fact or matter. But when a party to a contract has agreed to refund to the other party a sum of money upon
compliance by the latter of certain conditions and only upon compliance therewith may what is legally due him
under the written contract be demanded, the action is one not capable of pecuniary estimation. The payment of a
sum of money is only incidental which can only be ordered after a determination of certain acts the performance of
which being the more basic issue to be inquired into.

2. NEGATIVE. JURISDICTION IS LODGED TO CFI (now RTC).


Although private respondent's complaint in the court a quo is designated as one for a sum of money and damages,
an analysis of all the factual allegations of the complaint patently shows that what private respondent seeks is the
performance of petitioner's obligation under the written contract to make the refund of the rate of P10 per square
meter or in the total amount of P4,820, but only after proof of having himself fulfilled the conditions that will give
rise to petitioner's obligation, a matter clearly incapable of pecuniary estimation and thus fall under CFI’s Jurisdiction
(now the RTC).

3. Primero v. IAC, 156 SCRA 435 (1987)

Facts: Primero instituted proceedings against DM transit corporation with the Labor arbiters of the
Department of Labor, for illegal dismissal and for recovery of backwages and reinstatement. After due
investigation, the Labor Arbiter rendered judgment ordering DM to pay complainant Primero P2000 as
separation pay. The judgment was affirmed by the NLRC and later by the secretary of labor. The jurisdiction
over such claims was however removed by PD 1367 which provided that labor arbiters shall not entertain
claims for moral or other forms of damages. Afterwards, primero brought suit against DM in the CFI of
Rizal seeking recovery of damages caused not only by the breach of his employment but also by oppresive
and inhuman and consequently tortious, acts of his employer and its officers antecedent and subsequent to
his dimissal from employment without just cause. The trial court rendered judgment dismissing the
complaint on the ground of lack of jurisdiction for the reason that at the time that the complaint was filed the
labor code as amended conferred exclusive, original jurisdiction over claims for moral or other damages, not
on ordinary courts but on labor arbiters. This judgment was affirmed by the Intermediate appellate court.
This is the judgment now subject of the present petition for review on certiorari.

Issue: Whether or not the court erred in holding that the claim for moral or other damages is vested not on
ordinary courts but on labor arbiters.

Held: Actually we reiterate in this decision the doctrine already laid down in other cases to the effect that the
grant of jurisdiction to the Labor arbiter by Article 217 of the Labor Code is sufficiently comprehensive to
include claims for moral and exemplary damages sought to be recovered from an employer by an employee
upon the theory of his illegal dismissal. Ruling to the contrary are deemed abandoned or modified
accordingly. The petition is dismissed.

4. Trade Union of the Philippines vs. Coscolluela, 140 SCRA 302


(1985)
Facts: The petition seeks to enjoin the public respondent from further proceeding in Civil Case No. 10905 of the
Regional Trial Court of Makati, Metro Manila.

Petitioner union filed a notice of strike with the Ministry of Labor and Employment against Super Garments
Manufacturing Corporation on May 12, 1985. Super Garments and Rustan Commercial Corporation have
separate compartments in the same building at Malugay and Mayapis streets. It is called the Yupangco building.

It is alleged by the petitioner union that goods of Super Garments were spirited out of its strike-bound premises
thru Rustan’s warehouse. Whereupon, the union picketed not only Super Garments but also Rustan. As a result
Rustan filed Civil Case No. 10905 before the respondent judge for injunction and damages thru the PECABAR
law office and petition No. 971 with the National Labor Relations Commission also to enjoin the union from
picketing its premises.

Petitioner union claims that respondent judge has no jurisdiction to issue an injunction because the case is a
labor dispute, that the prerogative belongs to the Minister of Labor and Employment. Upon the other hand,
private respondent Rustan says that the respondent judge has jurisdiction because there is no labor dispute
between it and the union even as it went to the National Labor Relations Commission to seek identical relief.

Issue

Whether or not respondent judge has jurisdiction to issue an injunction.

Ruling

At this stage there appears to be no labor dispute between the petitioner and the private respondent for which
reason the latter was justified in seeking relief in respondent judge’s court. The unfair labor complaint filed by
petitioner union on July 12, 1985 does not prove a labor relationship. By the same token it was improper for the
private respondent to have filed Case No. 971 with the National Labor Relations Commission.

In the light of the foregoing, the Petition is DISMISSED for lack of merit and the temporary restraining order
issued on September 23, 1985 is hereby LIFTED. However, private respondent Rustan Commercial Corporation is
directed to withdraw its case before the National Labor Relations Commission.

6. Cabrera v. Tiano, 8 SCRA 542 (1963)

FACTS: Under date of June 20, 1957, in action for "Partition and Recovery of Real Estate, with Damages" was
filed by Josefina and Cresencia against Tiano.
In the complaint, it was alleged that petitioners were entitled to a portion of the land, since Josefina did not
sign the sale and Crescencia was a minor at the time petitioners’ father sold the land to the defendant; that
defendant Tiano had usurped the portions belonging to them, to their damage and prejudice in the amount of
P7,000.00, which consisted of their share in the produce of the property, during the period of defendant's
possession.
In answer, defendant claimed that the plaintiffs herein knew of the sale and that he was not aware of any defect in the
title of his vendors. As a Special Defense, defendant alleged that he was the absolute owner of the land by acquisitive
prescription of ten (10) years, from the date of purchase.
The court a quo rendered the following judgment —WHEREFORE, premises considered, the court hereby renders
judgment declaring that the plaintiffs are entitled each to 1/8 of the property in question.
The trial court in the same decision, commissioned the Deputy Provincial Sheriff, to partition the property in question
and render a report within 30 days. Defendant moved for a reconsideration of the decision, contending that
prescription had already set in, and his (defendant's) title, had become irrevocable, and that the award of damages
had no factual and legal basis. The motion for reconsideration was denied on March 5, 1960. The Commissioner's
report, partitioning the property was submitted on April 11, 1960. Defendant perfected his appeal on May 9, 1960, and
on May 14, 1960, the same was given due course and elevated to this Court.
In claiming that prescription had taken place, defendant insisted that the period should be counted from the date
the summons was served on him, which was on July 2, 1957. It was agreed, however, that the complaint for
the recovery of the land in question was presented on June 20, 1957, and the summons was sent out the
following day.
The Civil Code, provides that—
The prescription of actions is interrupted when they are filed before the court, when there is a written extra-
judicial demand by the creditors, and when there is any written acknowledgment of the debt of the debtor. (Art.
1155)
Defendant-appellant claims that he had already acquired full ownership of the property in question because the
judicial summons, which could civilly interrupt his possession (Art. 1123, N.C.C.), was received by him only on July 2,
1957 and the sale in question was made on July 2, 1947.
ISSUE:
1. WON the defendant acquired the property by acquisitive prescription?
2. WON the SC have the authority to decide as to questions of fact?
HELD:
1. NO. Conceding, for the purposes of argument, that the article cited is applicable, still appellant cannot avail
himself of acquisitive prescription, for the simple reason that no finding was made by the trial court that his
possession from the time of the sale (July 2, 1947), was with just title, in good faith, in the concept of an
owner, public, peaceful, adverse and uninterrupted (Arts. 1117 & 1118, N.C.C.).
Good faith is a question of fact which must be proved (Art. 1127, N.C.C.). For the purposes of acquisitive prescription,
just title must also be proved, it is never presumed (Art. 1131, N.C.C.). The factual requisite of adverse possession do
not appear in the stipulation of facts and the trial court did not make findings to this effect.
2. NO. (relevant sa remedial law):These circumstances could and/or should have been ventilated, had
the appeal been taken to the Court of Appeals. Defendant, however, having chosen to appeal the
decision directly to this Court, he is deemed to have waived questions of fact and raised only
questions of law. There being no factual finding by the lower court of the presence of the requisites of
acquisitive prescription this Court has to reject, as did the trial court, said defense. Moreover, on July 2,
1957, when the summons was received, the ten (10) years necessary for acquisitive prescription had not yet
elapsed. In fact, said period terminated on that very day.1äwphï1.ñët
As to the award of damages, We find Ourselves devoid of ample authority to review the same, since it involves
appreciation of facts. It cannot be denied, as found by the lower court, that plaintiffs herein are entitled to a
share in the land. Verily, they should also share in the produce, which, admittedly, was enjoyed by the defendant-
appellant herein.
WHEREFORE, the decision appealed from should be, as it is hereby affirmed. Costs against appellant in both
instances.

Sun Insurance v. Asuncion, 170 SCRA 274 (1989)


FACTS: Petitioner Sun Insurance filed a complaint with the Makati RTC for the consignation of a
premium refund on a fire insurance policy with prayer for the judicial declaration of its nullity
against private respondent Manuey Uy Po Tiong. Private respondent was declared in default for
failure to file the required answer within the reglementary period.
Private respondent filed a complaint in the Quezon City RTC for the refund of premiums and the
issuance of a writ of preliminary attachment. Only the amount of P210 was paid by private
respondent as docket fee which prompted petitioner to raise objection. Upon order of the SC, the
case was assigned to a different branch due to under-assessment of docket fees.
The case was thereafter assigned to Judge Asuncion who required the parties to comment on the
Clerk of Court’s letter-report signifying her difficulty in complying with the SC Resolution since
the pleadings filed by private respondent did not indicate the exact amount sought to be
recovered.
Private respondent filed a Re-Amended complaint stating therein a claim of not less than 10M as
actual compensatory damages in the prayer. However, the body of the amended complaint
alleges actual and compensatory damages and atty’s fees in the total amount of about
P44,601,623.70
Judge Asuncion issued another Order admitting the second amended complaint and stating that
the same constituted proper compliance with the SC Resolution. Petitioner filed a petition for
Certiorari with the CA questioning the order of Judge Asuncion. Private respondent filed a
supplemental complaint alleging an additional claim of P20M as damages bringing the total
claim to P64,601,623.70. CA denied petition and granted writ of prelim attachment.

HELD: 1) It is not simply the filing of the complaint or appropriate initiatory pleading, but the
payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject
matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by
payment of the docket fee, the court may allow payment of the fee within a reasonable time but
in no case beyond the applicable prescriptive or reglementary period.

2) Permissive counterclaims, third party claims and similar pleadings, shall not be considered
filed until and unless the filing fee prescribed therefore is paid. The court may also allow
payment of said fee within a reasonable time but also in no case beyond its applicable
prescriptive or reglementary period.

3) If the judgment awards a claim not specified in the pleading, or if specified the same has been
left for determination by the court, the additional filing fee therefor shall constitute a lien on
the judgment.
Escolin: There are some compulsory counterclaim that needs payment of docket fees, and some
which does not.

Hodges v. CA, GR 87617, 184 SCRA (1990)


Facts:
Three practicing lawyers filed separate actions for damages against petitioner for alleged defamatory
statements claiming damages in the form of moral damages, damage to their law practice, exemplary and
temperate damages. Petitioner (then defendant) questioned the jurisdiction of the courts over these cases
pointing out that the court cannot acquire jurisdiction over the case unless the corresponding docket fee is
paid.
In the present petition, in the case of Gellada vs. Hodges the total amount of the claim for damages is about
P460,000.00, the estimated docket fee due is P770.00 but what was paid only was P32.00 . Despite the order of the
trial court on August 31, 1972 and another order ten years later, that is on March 11, 1982, requiring plaintiff to pay
the correct docket fee, Gellada paid the amount of P168.00 Thus his total payment amounts to just P200.00, which is
still much less than the amount of P770.00 due.
Similarly in Mediodia vs. Hodges where the claim is approximately P360,000.00 and the appropriate filing fee would
be about P570.00, the plaintiff paid only P32.00 upon filing the complaint. After the two aforesaid order of the trial
court were issued, Mediodia paid on September 5, 1982 the amount of P168.00 bringing his payment to a total of
P200.00 which is also much less than the amount of P570.00 due for docket fee.
In the case of Mirasol vs. Hodges, the total claim is for P410,000.00 and the amount of filing fee due is P670.00.
Mirasol paid only P32.00 upon filing the complaint. He did not pay any additional sum even after the two orders of
the court had been issued.
Issue:
WON the trial court acquired jurisdiction over the subject matter in the given three cases due to the failure to pay in
full the prescribed docket fees.
Ruling:
As early as Lazaro vs. Endencia, this Court held that an appeal is not deemed perfected if the appellate court docket
fee is not fully paid. In Lee vs. Republic, this Court ruled that a declaration of intention to be a Filipino citizen
produced no legal effect until the required filing fee is paid. In Malimit vs. Degamo, We held that the date of payment
of the docket fee must be considered the real date of filing of a petition for quo warranto and not the date it was
mailed. In Magaspi vs. Ramolete, the well-settled rule was reiterated that a case is deemed filed only upon payment
of the docket fee regardless of the actual date of its filing in court.
In Manchester, this rule was emphasized when this Court stated "The court acquires jurisdiction over any case only
upon the payment of the prescribed docket fee. An amendment of the complaint or similar pleading will not thereby
vest jurisdiction in the court, much less the payment of the docket fee based on the amount sought in the amended
pleading.
The rule in Manchester was relaxed in Sun Insurance vs. Hon. Maximiano Asuncion, whereby this Court declared that
the trial court may allow payment of the fee within a reasonable time but in no case beyond the applicable
prescriptive or reglementary period. Nevertheless, in Sun Insurance, this Court reiterated the rule that it is the
payment of the prescribed docket fee that vests the court with Jurisdiction over the subject matter of nature of the
case. No doubt, the trial court did not acquire jurisdiction over the subject matter in said three (3) cases due to the
failure to pay in full the prescribed docket fee. Thus, the entire proceedings undertaken in said cases are null and
void. The plaintiffs in said cases are practicing lawyers who are expected to know this mandatory requirement in the
filing of any complaint or similar pleading. Their non-payment of the prescribed docket fee was deliberate and
inexcusable.

Spouses de Leon v CA, 287 SCRA (1998)


Facts: Private respondents filed in the RTC of Quezon City a complaint for annulment or rescission of a
contract of sale of two parcels of land against petitioners. Upon the filing of the complaint the clerk of court
required private respondents to pay docket and legal fees in the total amount of P610. Petitioners moved for
the dismissal of the complaint on the ground that the trial court did not acquire jurisdiction over the case by
reason of private respondents nonpayment of the correct amount of the docket fees. Petitioners contended
that in addition to the fees already paid based on the claim for P100,000 for attorneys fees, private
respondents should have paid docket fees in the amount of P21,640 based on the alleged value fo the two
parcels of land. Private respondents filed opposition to the motion to dismiss, The trial court denied
petitioners motion to dismiss but required private respondents to pay the amount of docket fees based on the
estimated value of the parcels of land in litigation as stated in the complaint. Private respondets filed a
motion for reconsideration but was denied. They brought the matter to the CA which rendered a decision
annulling the orders of the trial court. The appellate court held that an action for rescission or annulment of
contract is not susceptible of pecuniary estimation and therefore, the docket fees should not be based on the
value of the real property, subject matter of the contract sought to be annulled or rescinded.

Issue: WON is assessing the docket fees to be paid for the filing of an action for annulment or rescission of a
contract of sale, the value of the real property subject matter of the contract should be used as basis as one
which is not capable of pecuniary estimation

Held: Conformably with this discussion of actions where the value of the case cannot be estimated the court
held that an action for recession of contract is one which cannot be estimated and therefore the docket fee
for its filing should be the flat amount of P200. 00 as then fixed in the former rule 141. We hold that Judge
dalisay did not err in considering as basically one for recission or annulment of contract which is not
suspectible of pecuniary estimation. Consequently, the fee for docketing fee it is P200 an amount already
paid by plaintiff now respondent Matilda Lim. Thus, although eventually the result maybe the recovery of
land, it is the nature of the action as one for rescission of contract which is controlling. The CA correctly
applied these cases to the present one. Wherefore, the decision of the CA is affirmed.

Manuel v. Alfeche, 259 SCRA 475


Jurisdiction: Manuel vs. Alfeche, 259 SCRA 475 (1996)

Facts

On January 9, 1992, the City Prosecutor of the City of Roxas filed with the Regional Trial Court, 6th Judicial
Region, Branch 15, Roxas City an Information for libel. After trial, the respondent judge rendered the
assailed Decision finding three of the accused guilty and acquitting a fourth. However, “(t)he civil indemnity
by way of moral damages (was) dismissed for lack of jurisdiction” on the ground that petitioner did not pay
the filing fees therefor. Reconsideration having been denied, petitioner filed this instant petition for review.

Issue

Whether or not the offended party should recover moral damages.


Ruling

The ruling that “when the amount of damages is not so alleged in the complaint or information filed in
court, the corresponding filing fees need not be paid and shall simply ‘constitute a first lien on the
judgment, except in an award for actual damages’” was actually intended to apply to a situation wherein
either (i) the judgment awards a claim not specified in the pleading, or (ii) the complainant expressly claims
moral, exemplary, temperate and/or nominal damages but has not specified ANY amount at all, leaving the
quantification thereof entirely to the trial court’s discretion, and NOT to a situation where the litigant
specifies some amounts or parameters for the awards being sought, even though the different types of
damages sought be not separately or individually quantified. To hold otherwise, the result would be to
permit litigants to continue availing of one more loophole in the rule on payment of filing fees, and would
not serve to attain the purpose of the revised Sec. 1 of Rule 111, which is to discourage the gimmick of libel
complainants of using the fiscal’s office to include in the criminal information their claim for astronomical
damages in multiple millions of pesos without paying any filing fees.

For utter lack of merit, the petition is DISMISSED.

Cause of action
Citizen Surety v. Melencio-Herrera, 38 SCRA 369 (1971)
FACTS: Spouses Dacanay were indebted to Citizens’ Surety Insurance. As security, the
Dacanays mortgaged a parcel of land in Baguio. Since they were not able to pay said
debt, the said lot was sold in a foreclosure sale. However, proceeds of the sale were
insufficient to satisfy said debt. Thus Citizens’ Surety filed a complaint with the Manila
CFI, seeking to recover the balance, plus 10% thereof as atty’s fees, and other costs.
At petitioner’s request, respondent Judge caused summons to be made by publication in
the Phils Herald. But despite the publication and deposit of a prepaid copy of the
complaint at the Manila Post Office, defendants did not appear within the period of 60
days from last publication, as required by the summons.
Plaintiff then asked that defendants be declared in default; but instead, respondent
Judge asked it to show cause why the action should not be dismissed, the suit being in
personam and the defendants not having appeared. Respondent Judge dismissed the
case despite plaintiff’s argument that the summons by publication was sufficient and
valid under sec16 Rule14 RRC.

HELD: Where the action is in personam (e.g. action for deficiency judgment), the Court
could not validly acquire jurisdiction on a non-appearing defendant, absent a personal
service of summons. Without such personal service, any judgment on a non-appearing
defendant would be violative of due process. Summons by publication cannot confer
upon the court jurisdiction over said defendants, who does not voluntarily submit
himself to the authority of the court. The proper recourse for a creditor is to locate
properties, real or personal, of the resident defendant debtor and cause them to be
attached, in which case, the attachment converts the action into a proceeding in rem or
quasi in rem and the summons by publication may then accordingly be deemed valid
and effective. The case should not be dismissed but should be held pending in the
court's archives, until plaintiff succeeds in determining the whereabouts of the
defendants' person or properties and causes valid summons to be served personally or
by publication.
Escolin: Citizen Surety could not have availed of summons by publication because this
provision applies only to actions in rem or quasi in rem. He should have invoked Rule
57, Sec. 1 (f) to convert the action into quasi in rem Section 1. Grounds upon which
attachment may issue. — At the commencement of the action or at any time before entry of
judgment, a plaintiff or any proper party may have the property of the adverse party attached as
security for the satisfaction of any judgment that may be recovered in the following cases:
(f) In an action against a party who does not reside and is not found in the Philippines, or on
whom summons may be served by publication.(1a)

2. Backrach Motor v. Icarañgal, 68 Phil 287 (1939)


Facts:
Defendant Icarañgal, with one Jacinto Figueroa, for value received, executed in favor of the plaintiff, Bachrach Motor
Co., Inc., a promissory note for one thousand six hundred fourteen pesos (P1,614), and in security for its payment,
executed a real estate mortgage on a parcel of land in Pañgil, Laguna.
Thereafter, defendant defaulted in the payment of the agreed monthly installments; wherefore, plaintiff instituted in the
Court of First Instance of Manila an action for the collection of the amount due on the note.
Judgment was there rendered for the plaintiff BACHRACH MOTOR.
The other defendant herein, Oriental Commercial Co., Inc., interposed a third-party claim, alleging that by virtue of a
writ of execution issued in civil case No. 88253 of the municipal court of the City of Manila, the property which was
the subject of the mortgage and which has been levied upon by the sheriff, had already been acquired by it at
the public auction on May 12, 1933.
By reason of this third-party claim, the sheriff desisted from the sale of the property and, in consequence thereof, the
judgment rendered in favor of the plaintiff remained unsatisfied. Whereupon, plaintiff instituted an action to
foreclose the mortgage. The trial court dismissed the complaint and, from the judgment thus rendered plaintiff took the
present appeal.
ISSUE: Whether or not plaintiff-appellant is barred from foreclosing the real estate mortgage after it has elected to sue
and obtain a personal judgment against the defendant-appellee on the promissory note for the payment of which the
mortgage was constituted as a security.
HELD: Yes.
Section 708 of our Code of Civil Procedure which provides that: a creditor holding a claim against the deceased,
secured by a mortgage or other collateral security, has to elect between enforcing such security or abandoning it
by presenting his claim before the committee and share it in the general assets of the estate.
Under this provision, It has been uniformly held by this court that, if the plaintiff elects one of the two remedies thus
provided, he waives the other, and if he fails, he fails utterly. (Veloso vs.Heredia, 33 Phil., 306; Cf. Osorio vs. San
Agustin, 25 Phil., 404.)
The same rule applies under the Insolvency Law. There is indeed no valid reason for not following the same
principle of procedure in ordinary civil actions. With the substitution of the administrator or executor in place of the
deceased, or of the assignee or receiver in place of the insolvent debtor, the position of the parties plaintiff and
defendant in the litigation is exactly the same in special or insolvency proceedings as in ordinary civil actions.
SPLITTING A SINGLE CAUSE OF ACTION:
As we have heretofore stated, the creditor's cause of action is NOT ONLY SINGLE BUT INDIVISIBLE, although the
agreements of the parties, evidenced by the note and the deed of mortgage, may give rise to different remedies.
(Frost vs. Witter, 132 Cal., 421.) The cause of action should not be confused with the remedy created for its
enforcement. And considering, as we have shown, that one of the two remedies available to the creditor is as
complete as the other, he cannot be allowed to pursue both in violation of those principles of procedure intended to
secure simple, speedy and unexpensive administration of justice.
We hold, therefore, that, in the absence of express statutory provisions, a mortgage creditor may institute against the
mortgage debtor either a personal action for debt or real action to foreclose the mortgage. In other words, he may
pursue either of the two remedies, but not both. By such election, his cause of action can by no means be
impaired, for each of the two remedies is complete in itself. Thus, an election to bring personal action will leave open
to him all the properties of the debtor for attachment and execution, even including the mortgaged property itself. And,
if he waives such personal action and pursues his remedy against the mortgaged property, an unsatisfied
judgment thereon would still give him the right to sue for a deficiency judgment, in which case, all the
properties of the defendant, other than the mortgaged property, are again open to him for the satisfaction of
the deficiency. In either case, his remedy is complete, his cause of action undiminished, and any advantages
attendant to the pursuit of one or the other remedy are purely accidental and are all under his right of
election.
Thus, in Santos vs. Moir (36 Phil., 350, 359), we said: "It is well recognized that a party cannot split a single
cause of action into parts and sue on each part separately. A complaint for the recovery of personal property with
damages for detention states a single cause of action which cannot be divided into an action for possession and one
for damages; and if suit is brought for possession only a subsequent action cannot be maintained to recover the
damages resulting from the unlawful detention."
The same doctrine is stated in Lavarro vs. Labitoria (54 Phil., 788), wherein we said that "a party will not be
permitted to split up a single cause of action and make it a basis for several suits" and that a claim for
partition of real property as well as improvements constitutes a single cause of action, and a complaint for
partition alone bars a subsequent complaint for the improvements. The rule against splitting a single cause of
action is intended "to prevent repeated litigation between the same parties in regard to the same subject of
controversy; to protect defendant from unnecessary vexation; and to avoid the costs and expenses incident
to numerous suits." It comes from that old maxim nemo bedet bis vexare pro una et eadem cause (no man shall be
twice vexed for one and the same cause). (
For non-payment of a note secured by mortgage, the creditor has a single cause of action against the debtor.
This single cause of action consists in the recovery of the credit with execution of the security. In other words, the
creditor in his action may make two demands, the payment of the debt and the foreclosure of his mortgage. But both
demands arise from the same cause, the non-payment of the debt, and, for that reason, they constitute a
single cause of action. Though the debt and the mortgage constitute separate agreements, the latter is subsidiary to
the former, and both refer to one and the same obligation. Consequently, there exists only one cause of action for
a single breach of that obligation. Plaintiff, then, by applying the rule above stated, cannot split up his single cause
of action by filing a complaint for payment of the debt, and thereafter another complaint for foreclosure of the
mortgage. If he does so, the filing of the first complaint will bar the subsequent complaint. By allowing the creditor to
file two separate complaints simultaneously or successively, one to recover his credit and another to foreclose his
mortgage, we will, in effect, be authorizing him plural redress for a single breach of contract at so much cost to the
courts and with so much vexation and oppression to the debtor.

3.Industrial Finance Corp. v. Apostol, 177 SCRA 521 (1989) (old


digest)
FACTS: Spouses Padilla bought on credit 3 units of Isuzu trucks from Industrial
Transport & Equipment. They executed a prom note for the balance of the purchase
price. This was secured by a chattel mortgage of said trucks and, as additional
collateral, a real estate mortgage on their land. The Padillas failed to pay several
installments on the prom note, the assignee Industrial Finance Corp. (IFC) sued them in
the CFI for the recovery of the unpaid balance including attys fees. CFI ruled on
16Apr75 in favor of IFC. On appeal, CA sustained the CFI’s ruling except for
modification of attys fees from 25% to 12% of the balance.
Meanwhile on 09Sep71 private respondents Juan and Honorata Delmendo filed a
complaint against IFC, as principal party, and the Padillas, as formal parties, in
respondent CFI. The Delmendos alleged that they were the transferees of the real
property which was mortgaged earlier by the Padillas to Ind’l Transport. The Delmendos
prayed for the cancellation of the mortgaged lien annotated of the TCT and the delivery
to them by petitioner of the owner’s copy of said title with damages and attys fees,
considering that IFC waived its rights over the mortgage when it instituted a personal
action against the Padillas for collection of sum of money. IFC moved for the dismissal of
the complaint, contending that is has not waived its right over the mortgage lien. The
Delmendos filed a motion for summay judgment which the CFI granted. CFI ruled in
favor of the Delmendos. IFC filed a MfR which was denied. Hence this petition.

HELD: A mortgage creditor may elect to waive his security and instead bring an ordinary
action to collect with the right to execute on all the properties of the debtor, including
the subject-matter of the mortgage. If he fails in the collection suit, he can not thereafter
foreclose on the mortgage.
Escolin: In case of splitting of a single cause of action, the ground for dismissal is res
judicata.
Escolin: If there is one cause of action but two remedies, the plaintiff should have
pleaded alternative remedies in his complaint.

4.Agustin v. Bacalan, 135 SCRA 340 (1985) (old digest)


Facts: Administrator of estate-lessor files a case for ejectment before the City Courts
against the lessee. Lessee files counterclaim in excess of the City Court’s jurisdiction.
City Court decides for plaintiff. On appeal, CFI rules for defendant and grants him
damages. This became final. Plaintiff files separate for nullifying the CFI decision on the
ground that the damages awarded was beyond the jurisdiction of the City Court.

Held: A counterclaim not presented in the lower court can not be entertained on appeal.
Defendant is deemed to have waived his counterclaim in excess of the City Court’s
jurisdiction. It is as though it has never been brought before City Court. It may not be
entertained on appeal. The amount of judgment, therefore, obtained by the defendant-
appellee on appeal, cannot exceed the jurisdiction of the court in which the action
began. Since the trial court did not acquire jurisdiction over the defendant's
counterclaim in excess of the jurisdictional amount, the appellate court, likewise,
acquired no jurisdiction over the same by its decisions or otherwise. When court
transcends the limits prescribed for it by law and assumes to act where it has no
jurisdiction, its adjudications will be utterly void and of no effect either as an estoppel or
otherwise. The excess award of the CFI is therefore null and void. Action to declare
nullity of award is proper. The award not in excess stands.

The defendant's counterclaim for damages is GRANTED to the extent of TEN THOUSAND
(P10,000.00) PESOS. The grant of SIX THOUSAND (P6,000.00) PESOS in excess of such
amount is hereby declared NULL and VOID, for having been awarded beyond the
jurisdiction of the court.

Escolin: A compulsory counterclaim beyond the jurisdiction of the court can be filed as a
separate action.

5. Maceda v. CA, 176 SCRA (1989)


Facts: A leased property originally belonged to the spouses Monserrat, a maternal aunt of the petiton. After
the spouses emigrated to the US they leased their house and lot in San Juan to the petitioner. As the house
was old and run down, petitioner proposed to have it repaired and renovated subject to reimbursement of
expenses but maceda introduced more improvements. Atty Zapata informed the petitioner that the properly
has been sold to pablo Zubiri . He was asked to vacate it. Maceda insisted on being reimbursed for his
improvements. An ejectment suit was filed against Maceda in the MTC of san juan metro manila. In his
answer to complaint, maceda set up a counterclaim for the value of improvements. The MTC ordered him to
vacate the premises and pay the plaintiff P2000 per month as compensation. Both parties appealed to the
RTC, which set aside the inferior courts decision. It dismissed the ejectment complaint and ordered to pay
Maceda P182, 000 for his necessary and useful improvements. The CA rendered a decision, modifying the
decision. The CA denied Maceda's claim for reimbursement of the cost of his improvements. It ruled that the
MTC lacked jurisdiction over the claim which exceeds P20,000. In his petition for review of that decision,
Maceda assails the setting aside of the money judgment or award for his improvements.
Issue: WON the lower court erred in holding that the new owners need of the premises is a legitimate ground
for the judicial ejectment of the lessee.

Held: Maceda's petition has no merit. The CA correctly ruled that the MTC did not have original jurisdiction
over his counterclaim as it exceeds P20,000. Correspondingy, the RTC did not have appellate jurisdiction
over the claim. The decision of the MTC of san juan awarding him P158,000 on his counterclaim, and that
of the RTC raising the award to P182, 200 were invalid for lack of jurisdiction. The jurisdiction of the
Metropolitan trial court in a civil action for sum of money is limited to a demand that does not exceed
twenty thousand pesos exclusive of interest and cost but inclusive of damages of whatever kind; A
counterclaim beyond that jurisdictional limit may be pleaded only by way of defense but not to obtain an
affirmative relief. Jurisdiction cannot be appropriated by a court no matter how well intentioned it is, even in
pursuit of the clearest substantial right, such as collection of judgment debt. Jurisdiction is determined by the
law in force at the time of the commencement of the action.

While it is true that under BP 8777 a lesseee may not be ejected on account of the sale or mortgage of the
leased premises, the new owners need of the premises for the construction of dwellings for its employees,
coupled with the lessees failure to pay the rentals since Dec. 1981 are to our mind, a legitimate ground for
the judicial ejectment of the lessee. Wherefore, dismissal of his counterclaim for the value of improvements
is affirmed.

6. Bayang v. CA, 148 SCRA 91 (1987)


Facts: Bayang sued Biong for Quieting of Title with damages in 1969, which resulted in a ruling in his favor
in 1978. In 1978, Bayang sued Biong again but this time for the income earned from the land while it was
still in the latter’s possession from 1970 to 1978.

Issue: Whether or not the second case is barred by the first.

Ruling: The subject matter in the two cases are essentially the same as the income is only a consequence or
accessory of the disputed property. The claim for income from the land is incidental to, and should have
been raised by Bayang in his earlier claim for ownership of the land. As the filing of the two cases constitute
splitting of the cause of action, the second case is barred by the first. Also, for about seven years, the
petitioner made no move at all to amend his complaint to include a claim for the income supposedly
received by private respondent during that period. He did not make the proper claim at the proper time
and in the proper proceeding. Whatever right he might have had is now deemed waived because of his
negligence.

PARTIES
Juasing Hardware v. Mendoza, 115 SCRA 783 (1982) (old digest)
FACTS Juasing Hardware, single proprietorship owned by Ong Bon Yong, filed a
complaint for the collection of a sum of money against Pilar Dolla. The case proceeded
to pre-trial and trial. After plaintiff presented its evidence and rested its case, defendant
filed a Motion for Dismissal of Action (Demurrer to Evidence) praying that the action be
dismissed for the plaintiff’s lack of capacity to sue. Defendant in said Motion contended
that plaintiff Juasing is a single prop, not a corp or partnership duly registered in
accordance with law and therefor is not a juridical person with legal capacity to bring an
action in court. Juasing filed an Opposition and moved for the admission of an Amended
Complaint. CFI Judge dismissed the case and denied admission of Amended Complaint.

HELD: Correction of the designation of the plaintiff (from name of sole proprietorship to
name of individual owner) is merely formal, not substantial, and hence may be corrected
at any stage of the action.

Chang Kai Shek v. CA, 172 SCRA 389 (1989)


FACTS: Fausta F. Oh worked at the Chiang Kai Shek School since 1932 for a continuous period of almost 33
years. And now, out of the blue, and for no apparent or given reason, this abrupt dismissal.
Oh sued. She demanded separation pay, social security benefits, salary differentials, maternity benefits and
moral and exemplary damages. 1 The original defendant was the Chiang Kai Shek School but when it filed a
motion to dismiss on the ground that it could not be sued, the complaint was amended. 2 Certain officials of the
school were also impleaded to make them solidarily liable with the school.
As a school, the petitioner was governed by Act No. 2706 as amended by C.A. No. 180, which provided as
follows: Unless exempted for special reasons by the Secretary of Public Instruction, any private school or college
recognized by the government shall be incorporated under the provisions of Act No. 1459 known as the
Corporation Law, within 90 days after the date of recognition, and shall file with the Secretary of Public
Instruction a copy of its incorporation papers and by-laws.
The Court of First Instance of Sorsogon dismissed the complaint.
ISSUE:
Whether or not a school that has not been incorporated may be sued by reason alone of its long
continued existence and recognition by the government,
HELD:
It is true that Rule 3, Section 1, of the Rules of Court clearly provides that "only natural or juridical
persons may be parties in a civil action." It is also not denied that the school has NOT been incorporated.
However, this omission should not prejudice the private respondent in the assertion of her claims against the
school.
Having been recognized by the government, it was under obligation to incorporate under the Corporation Law
within 90 days from such recognition. It appears that it had not done so at the time the complaint was filed
notwithstanding that it had been in existence even earlier than 1932. The petitioner cannot now invoke its
own non-compliance with the law to immunize it from the private respondent's complaint.
There should also be no question that having contracted with the private respondent every year for thirty two
years and thus represented itself as possessed of juridical personality to do so, the petitioner is now
estopped from denying such personality to defeat her claim against it. According to Article 1431 of the Civil
Code, "through estoppel an admission or representation is rendered conclusive upon the person making
it and cannot be denied or disproved as against the person relying on it."
As the school itself may be sued in its own name, there is no need to apply Rule 3, Section 15, under which the
persons joined in an association without any juridical personality may be sued with such association. Besides, it
has been shown that the individual members of the board of trustees are not liable, having been
appointed only after the private respondent's dismissal.
It is easy to imagine the astonishment and hurt she felt when she was flatly and without warning told she was
dismissed. There was not even the amenity of a formal notice of her replacement, with perhaps a graceful
expression of thanks for her past services. She was simply informed she was no longer in the teaching staff. To
put it bluntly, she was fired.
For the wrongful act of the petitioner, the private respondent is entitled to moral damages. 14 As a proximate
result of her illegal dismissal, she suffered mental anguish, serious anxiety, wounded feelings and even
besmirched reputation as an experienced teacher for more than three decades. We also find that the respondent
court did not err in awarding her exemplary damages because the petitioner acted in a wanton and oppressive
manner when it dismissed her. 15

Commissioner of Customs v. KMK Gani, 182 SCRA 591 (1990)


FACTS: On September 11, 1982, two (2,) containers loaded with 103 cartons of merchandise covered by
eleven (11) airway bills of several supposedly Singapore-based consignees arrived at the Manila
International Airport on board Philippine Air Lines (PAL) Flight PR 311 from Hongkong. The cargoes were
consigned to these different entities: K.M.K. Gani (hereafter referred to as K.M.K.) and Indrapal and
Company (hereafter referred to as INDRAPAL), the private respondents in the petition before us; and Sin
Hong Lee Trading Co., Ltd., AAR TEE Enterprises, and C. Ratilal all purportedly based in Singapore.

ISSUE
WON private respondents failed to establish their personality to sue in a representative capacity, hence
making their action dismissable,

RULING
YES. The law is clear: "No foreign corporation transacting business in the Philippines without a license, or
its successors or assigns, shall be permitted to maintain or intervene in any action, suit or proceeding in any
court or administrative agency of the Philippines; but such corporation may be sued or proceeded against
before Philippine courts or administrative tribunals on any valid cause of action recognized under Philippine
laws." 7

However, the Court in a long line of cases has held that a foreign corporation not engaged in business in the
Philippines may not be denied the right to file an action in the Philippine courts for an isolated transaction. 8

Therefore, the issue on whether or not a foreign corporation which does not have a license to engage in
business in this country can seek redress in Philippine courts boils down as to whether it is doing business or
merely entered into an isolated transaction in the Philippines.

The fact that a foreign corporation is not doing business in the Philippines must be disclosed if it desires to
sue in Philippine courts under the "isolated transaction rule." Without this disclosure, the court may choose
to deny it the right to sue. 9

In the case at bar, the private respondents K.M.K. and INDRAPAL aver that they are "suing upon a singular
and isolated transaction." But they failed to prove their legal existence or juridical personality as foreign
corporations.

Merrill Lynch v. CA, 211 SCRA 824 (1992) (old digest)


Facts: ML FUTURES, operating in the United States, had indeed done business with the
Lara Spouses in the Philippines over several years, had done so at all times through
Merrill Lynch Philippines, Inc. (MLPI), a corporation organized in this country, and had
executed all these transactions without ML FUTURES being licensed to so transact
business here, and without MLPI being authorized to operate as a commodity futures
trading advisor. The Laras did transact business with ML FUTURES through its agent
corporation organized in the Philippines. The last transaction executed by ML FUTURES
in the Laras's behalf had resulted in a loss amounting to US $160,749.69; that in
relation to this loss, ML FUTURES had credited the Laras with the amount of
US$75,913.42 — which it (ML FUTURES) then admittedly owed the spouses — and
thereafter sought to collect the balance, US$84,836.27, but the Laras had refused to pay
on the ground that the plaintiff has no legal capacity to sue.

Issue: WON ML FUTURES may sue in Philippine Courts to establish and enforce its
rights against said spouses, in light of the undeniable fact that it had transacted
business in this country without being licensed to do so.

WON the Lara Spouses are now estopped to impugn ML FUTURES' capacity to sue them
in the courts of the forum.
Held: The defendant is estopped to deny the capacity of the foreign corporation to sue,
having dealt with the corporation.

USA v. Reyes, 219 SCRA 192 (1993)


USA vs. Reyes
219 scra 192
Topic: Parties

Facts: This is a petition for certiorari and prohibition. Private respondent Montoya is an american citizen
who at the time material to this case, was employed an identification checkter at the US Navy exchange.
Petitioner is likewise an americal citizen who was the activity exchange manager at JUSMAG headquarters.
As a consequence whereby her body and belonging were search after she had bought some items from the
retail store of the NEX JUSMAG while she was already at the parking area. Montoya filed a complaint with
the RTC of her residence – cavite – against Bradford for damages due to the oppressive and discriminatory
acts committed by the latter in excess of her authority as store manager of the NEX JUSMAG . She then
prayed for judgment ordering bradford to pay her P500,000 as moral damages, P100,000 as exemplary
damages and reasonable attorney's fees plus the costs of the suit. Bradford together with the government of
US filed a motion to dismiss in support of the motion, petitoners claimed that JUSMAG composed of an
army, Navy and Airgroup had been establisehd under the Philippine US agreement. Thus Bradford orders to
have purchases of all employees checked was made in the exercise of her duties as Manager. Montoya filed
a motion for preliminary attachment on the ground that Bradford was about to depart from the country and
was in the process of removing and or disposing of her properties and filed her opposition to the motion to
dismiss. The trial court resolved both motion to dismiss and the motion for preliminary attachment decreeing
the issuance of a writ of attachment and directing the sheriff to serve the writ immediately. Bradford
received a copy of the decision and she and the public petitioner filed with this court a petiton for restraining
order which sought to have the trial court decision vacated and to prevent the execution of the same. In the
meantime, since there was no MR was filed, the order directing an entry of final judgment was made.

Issues: WON the trial court committed grave abuse of discretion in denying the motion to dismiss based on
effect that the suit against the public petitioner, a foreign sovereign immune from suit.

Held: Despite the fact that public petitioner was not impleaded as a defendant, it nevertheless joined
bradford in the motion to dismiss without however first having obtained leave of court to intervene therein.
This was a procedural lapse, if not downright improper legal tack. Since it was not impleaded as an original
party, the public petitioner could on its own volition join in the case by intervening therein. The grant of
intervention is discretionary upon the court and may be allowed only upon a prior motion for leave
with notice to all the parties in the action. Of course, Montoya could have also impleaded the public
petitioner as an additional defendant by amending the complaint if she so believed that the latter is an
indispensable or necessary party.

The filing of the instant petition and the knowledge thereof by the trial court did not prevent the latter from
proceeding with Civil case no. 224 – 87. It is elementary that the mere pendency of a special civil action for
certiorari, commenced in relation to a case pending before a lower court, does not interrupt the course of the
latter when there is no writ of injunction restraining it.

Flores v. Mallare-Philips, 144 SCRA 377 (1986) (old digest)

Facts: Plaintiff files 1 complaint against 2 distinct defendants before the RTC under
distinct separate causes of action. Total amount of the claim is with RTC jurisdiction,
but individual claim is under MTC jurisdiction. RTC dismisses the complaint .

Held: In cases of joinder of causes of action, the amount of the demand shall be the
totality of the claims in all the causes of action irrespective of whether the causes of
action arose out of the same or different transactions. In cases of permissive joinder of
parties, whether as plaintiffs or as defendants, the total of all the claims shall now
furnish the jurisdictional test. However, there should be a proper joinder of parties for
the totality rule to apply. Under the present law, the totality rule is applied also to cases
where two or more plaintiffs having separate causes of action against a defendant join in
a single complaint, as well as to cases where a plaintiff has separate causes of action
against two or more defendants joined in a single complaint. However, the causes of
action in favor of the two or more plaintiffs or against the two or more defendants should
arise out of the same transaction or series of transactions and there should be a
common question of law or fact, as provided in Section 6 of Rule 3.
In this case, the 2 causes of action did not arise out of the same transaction or series of
transactions and there was not common question of law or fact. There was improper
joining of parties, hence the totality rule does not apply. MTC has jurisdiction.

8.Mansion Biscuit v. CA, 250 SCRA 195 (1995)


FACTS:
*Sometime in 1981 Ty Teck Suan, president of Edward Ty Brothers Corporation, ordered numerous cartons of
nutri-wafer biscuits from Mansion Biscuit Corporation.
*Ty Teck with Siy Gui as co-signor issued four postdated checks to to Ang Cho Hong, president of Mansion in
the amount of P100,000.00 each before the delivery of the goods they ordered.
*Accordingly, Mansion Biscuit Corporation delivered the goods. However, all the checks issued were dishonored.
*Hence, a case was filed against Ty Teck Suan for violation of BP 22 or the bouncing checks law.
*Ty Teck Suan pleaded not guilty and ordered to file a motion to dismiss by way of demurrer of evidence based
on the following grounds, but in relation to the topic - (a) the subject checks were issued merely to guarantee or
secure fulfillment of the agreement with the complainant which the court ruled in some cases to be neither estafa
nor a violation of BP.
In the same order of dismissal, Judge Capulong found that accused Siy Gui's liability had not been established
by the prosecution as it appeared that he had no personal transactions with the complainant although he was a
co-signatory in the second batch of four checks. 18

Meanwhile, petitioner Mansion Biscuit Corporation filed another appeal to the Court of Appeals, docketed as CA-
G.R. CV No. 16580, this time assailing the trial court's ruling absolving defendants from civil liability in the
criminal cases. Petitioner contended that the acquittal of the accused in the criminal cases did not necessarily
extinguish their civil liability, citing Padilla v. Court of Appeals, People v. Jalandoni, Maximo v. Gerochi,
24 25

Jr. and People v. Relova.


26 27

ISSUE: WON Ty Teck and Siy Gui are proper parties in this case.
HELD:
We rule in the negative.
The civil liability for non-payment of the nutri-wafer biscuits delivered by petitioner to the Edward Ty Brothers
Corporation cannot be enforced against the private respondents because the said civil liability was not the
personal liability of Ty Teck Suan to Mansion Biscuit Corporation, rather, it was the contractual liability of Edward
Ty Brothers Corporation, of which Ty Teck Suan was president, to Mansion Biscuit Corporation. This is borne out
by the records of the case. The information in Criminal Cases Nos. 5598-V-83 and 5599-V-83 filed against Ty
Teck Suan and Siy Gui reveal that the checks were issued "in payment of the cartons of nutri-wafer biscuits
purchased from the Mansion Biscuit Corporation, represented by Ana Cho Hong, president thereof, by Edward
Ty Brothers Corporation thru said accused Ty Teck Suan." Moreover, petitioner itself admitted that the contract
33

was executed by and between Edward Ty Brothers Corporation, represented by its president, Ty Teck Suan, and
Mansion Biscuit Corporation, likewise represented by its president, Ang Cho Hong. This was correctly observed
34
by respondent Court of Appeals in its assailed decision and we quote:
The civil liability which the complainant seeks to enforce is the unpaid value of the nutri-van biscuits which were
allegedly ordered by Ty Teck Suan from complainant and delivered by the latter between 12 November 1981 and
the first week of January 1982. It is apparent from the record, however, that this civil liability is not the personal
liability of Ty Teck Suan to private complainant Ang Cho Hong. It is the contractual liability of Edward Ty Brothers
Corporation of which Ty Teck Suan was president, to Mansion Biscuit Corporation, of which Ang Cho Hong was
president. This is clear from the Statement of Facts in plaintiffs-appellant brief, the relevant and pertinent
portions of which read:
Sometime in 1981, Teck Suan, as president of Edward Ty Brothers Corporation ordered numerous cartons of
nutri-van biscuits from Mansion Biscuit Corporation. As payment for these goods, Ty Teck Suan issued four (4)
postdated checks amounting P404,980.00. These checks were delivered to Mr.Ang Cho Hong, President of
Mansion biscuit corporation sometime during the first week of November, 1981 (p. 17, tsn of March 14, 1984).
(at p. 10 of Brief, Emphasis ours.)
These goods were received by Ty Teck Suan, through Edward Ty Brothers Corporation as its Consignees, and
this was evidenced by the different receipts that have been issued by Edward Ty Brothers Corporation and its
Consignees . . ., as well as by the "authority to deliver" documents issued by Edward Ty Brothers
Corporation . . . and signed by one Elizabeth Ty Kho, the daughter of Ty Teck Suan (p. 24, tsn of June 13, 1984).
(at pp. 11-12, ibid) Likewise, the informations uniformly state that the checks were "in payment of cartons of
Nutri-Wafers biscuit purchased from the Mansion Biscuit Corporation, represented by Ang Cho Hong, President
thereof, by the Edward Ty Brothers Corporation thru said accused Ty Teck Suan . . .
It is quite obvious from the foregoing that Ty Teck Suan did not purchase the biscuits for himself but for Edward
Ty Brothers Corporation in his capacity as its president. Neither did Ang Cho Hong sell and deliver the biscuits in
his personal capacity but for and in behalf of Mansion Biscuits Corporation of which he was president. The issue
of the civil liability of Edward Ty Brothers Corporation to Mansion Biscuits Corporation arising from the contract
of purchase and sale between them could not have been and was not litigated and resolved in the criminal case
inasmuch as they were not parties therein. A separate civil action must be instituted by Mansion Biscuits
Corporation against Edward Ty Brothers Corporation to enforce the contract between them. 35

10. Imson v. CA, 239 SCRA 58 (1994)


FACTS:
The case at bench arose from a vehicular collision on December 11, 1983, involving petitioner's Toyota Corolla
and a Hino diesel truck registered under the names of private respondents FNCB Finance Corporation and
Holiday Hills Stock and Breeding Farm Corporation.
On January 6, 1984, petitioner filed with the RTC Baguio City a Complaint for Damages Sued were private
1 2

respondents as registered owners of the truck; truck driver Felix B. Calip, Jr.; the beneficial owners of the truck,
Gorgonio Co Adarme, Felisa T. Co (also known as Felisa Tan), and Cirilia Chua Siok Bieng, and the truck
insurer, Western Guaranty Corporation.
The Complaint prayed that defendants be ordered to pay, jointly and severally, two hundred seventy thousand
pesos (P270,000.00) as compensatory damages, fifty thousand pesos (P50,000.00) each as moral and
exemplary damages, and attorney's fees, litigation expenses, and cost of suit. 8

On May 29, 1987, however, petitioner and defendant insurer, entered into a compromise agreement.
In consequence of the compromise agreement, the trial court dismissed the Complaint for Damages against
Western Guaranty Corporation on June 16, 1987. It argued that since they are all indispensable parties
8

under a common cause of action, the dismissal of the case against defendant insurer must result in the
dismissal of the suit against all of them.
The trial court denied the motion.
Private respondent Holiday Hills Stock and Breeding Farm Corporation assailed the denial order through a
Petition for Certiorari, Prohibition and Mandamus With Restraining Order filed with respondent Court of Appeals.
ISSUE: RESPONDENT COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN RULING THAT THE
DEFENDANTS IN CIVIL CASE NO. 248-R ARE INDISPENSABLE PARTIES;
HELD:
There is merit to the petition,.
An indispensable party is one whose interest will be affected by the court's action in the litigation, and without
whom no final determination of the case can be had. The party's interest in the subject matter of the suit and in
the relief sought are so inextricably intertwined with the other parties' that his legal presence as a party to the
proceeding is an absolute necessity. In his absence there cannot be a resolution of the dispute of the parties
13

before the court which is effective, complete, or equitable.


14

Conversely, a party is not indispensable to the suit if his interest in the controversy or subject matter is
distinct and divisible from the interest of the other parties and will not necessarily be prejudiced by a
judgment which does complete justice to the parties in court. 15

He is not indispensable if his presence would merely permit complete relief between him and those already
parties to the action, or will simply avoid multiple litigation.
16

It is true that all of petitioner's claims in Civil Case No. 248-R is premised on the wrong committed by defendant
truck driver. Concededly, the truck driver is an indispensable party to the suit. The other defendants, however,
cannot be categorized as indispensable parties. They are merely proper parties to the case. Proper parties
have been described as parties whose presence is necessary in order to adjudicate the whole
controversy, but whose interests are so far separable that a final decree can be made in their absence
without affecting them. It is easy to see that if any of them had not been impleaded as defendant, the case
17

would still proceed without prejudicing the party not impleaded. Thus, if petitioner did not sue Western Guaranty
Corporation, the omission would not cause the dismissal of the suit against the other defendants. Even without
the insurer, the trial court would not lose its competency to act completely and validly on the damage suit. The
insurer, clearly, is not an indispensable party in Civil Case No. 248-R.

Casenas v. Rosales, 19 SCRA 463 (1967)


Facts:
Arañas and Caseñas filed a complaint for specific performance and enforcement of their alleged right under
a certain deed of sale, and damages against the spouses Rosales. After answer has been filed and before trial,
counsel for plaintiffs informed the trial court that plaintiff Arañas and defendant Rosales had both died. The
lower court directed the surviving plaintiff, Caseñas, to amend the complaint to effect the necessary
substitution of parties thereon. Caseñas failed to do this, so the TC dismissed the case. The dismissal became
final. Thereafter, Caseñas filed another complaint against the widow Rosales and heirs of the late Rosales
"to quiet, and for reconveyance of, title to real property, with damages." This suit referred itself to the very
same property litigated in the previous dismissed case. and asserted exactly the same allegations as those
made in the former complaint. Defendants filed MTD on ground of res judicata. TC dismissed the case.
Issue:
WON amendment of the complaint was proper in case of death of the party/parties
Held:
No.
When certain of the parties died and due notice thereof was given to the trial court, it devolved on the said
court to order, not the amendment of the complaint, but the appearance of the legal representatives of the
deceased. An order to amend the complaint, before the proper substitution of parties has been effected, is
void and imposes upon the plaintiff no duty to comply therewith to the end that an order dismissing the said
complaint, for such non-compliance, would similarly be void.
Escolin: where the defendant dies pending the case, the duty of the court is to order the substitution of the
defendant, not to order the amendment of the complaint to implead the heirs of the defendant
de Leon: In Mina, the court ordered the amendment of the complaint to implead an indispensable party. The
order was proper, hence failure to comply was a valid ground for dismissal of the complaint. In Casenas, the
court ordered the amendment of the complaint to implead the heirs of a deceased party. The order was
improper because the proper procedure was to substitute. Hence failure to comply was not a valid ground for
dismissal of the complaint.

VENUE
Fortune Motors v. CA, 178 SCRA 564 (1989)
Fortune Motors
178 scra 564
Topic: Venue
Facts: This is a petition for review on certiorari seeking the reversal of the decision of the CA. Private
respondent Metropolitan Bank extended various loan to petitioner fortune motors. For failure to pay the
loans, the respondent initated foreclosure proceedings. Petitioner fortune motors filed a complaint for
annulment of extrajudicial foreclosure. Private respondent bank filed a motion to dismiss the complaint on
the ground that the venue of action was improperly laid in manila for the realty covered by the real estate
mortgage is situated in Makati, therefore the action to annul the foreclosure sale should be filed in the RTC
of Makati. The lower court issued an order reserving the resolution of the bank's motion to dismiss until
after the trial on the merits. Respondent bank field a petition for certiorari and prohibition in the CA and
was granted. Hence, this petiton for review on certiorari.

Issues: WON petitioners action for annulment of the real estate mortgage extrajudicial foreclosure sale of
fortune building is a personal action or a real action for venue purposes.

Held: In a real action, the plaintiff seeks the recovery of real property, or as indicated in Sec. 2 of Rule 4, a
real action is an action affecting title to real property, or for the recovery of possession, or for the partition or
condemnation of, or foreclosure of a mortgage on real property. Real action or actions affecting title to, or
for the recovery of possession, or for the partition or condemnation of, or foreclosure of mortgage on real
property, must be instituted in the CFI of the province where the property or any part thereof lies. Personal
actions upon the other hand, maybe instituted in the CFI where the defendant or any of the defendants
resides or may be found, or where the plaintiff or any of the plaintiff resides, at the election of the plaintiff.
Since an extra judicial foreclosure of real property results in a conveyance of the title of the property sold to
the highest bidder at the sale, an action to annul the foreclosure sale is necessarily an action affecting the
title of the property sold. It is therefore a real action which should be commenced and tried in the province
where the property or part thereof lies.

6. Lizares v. Calauag, 4 SCRA 746 (1962)


FACTS:
Appeal by certiorari from a decision of the Court of Appeals dismissing the petition of Dr. Antonio A. Lizares &
Co., Inc., for a writ of prohibition because the venue of the case was improperly laid.
Flaviano Cacnio instituted a Civil Case at the Court of First Instance of Rizal, Quezon City Branch against
Lizares(petitioner).

Cacnio received from Lizares a demand for payment of P7,324.69 representing arrears in the payment of
installments up 1960 plus regular and overdue interest as well as land taxes. (ultimately, mga utang2x ug
interest nga wa mabayran.)
Cacnio issued payment but Lizares refused the tender of payment.
Hence Cacnio filed a case and ask for damages for “compensatory damages plus attorney’s fees.
On July 5, 1960, Lizares moved to dismiss the complaint upon the ground that "venue is improperly laid," for the
action affects the title to or possession of real property located in Bacolod City, which was the subject matter of a
contract, between petitioner and Cacnio, made in said City.
The motion having been denied by the Court of First Instance of Rizal, Quezon City Branch, by an order of July
9, 1960, upon the ground that the action was in personam, petitioner filed with the Court of Appeals a petition,
praying that said order be set aside and that a writ of prohibition be issued commanding respondent Hon.
Hermogenes Caluag, as Judge of said Court, to desist from taking cognizance of said Civil Case. In due course,
the Court of Appeals rendered a decision on October 27, 1960, dismissing said petition. Hence, this appeal by
certiorari taken by petitioner herein.
ISSUE: The issue is whether or not the main case falls under section 3 of Rule 5 of the Rules of Court, reading:
"Actions affecting title to, or for recovery of possession, or for partition or condemnation of, or foreclosure
of mortgage on, real property, shall be commenced and tried in the province where the property or any
part thereof lies."
HELD:
According to SC: We are unable to share such view. Although the immediate remedy sought by Cacnio is to
compel petitioner to accept the tender of payment allegedly made by the former, it is obvious that this relief is
merely the first step to establish Cacnio's title to the real property adverted to above. Moreover, Cacnio's
complaint is a means resorted to by him in order that he could retain the possession of said property. In short,
venue in the main case was improperly laid and the Court of First Instance of Rizal, Quezon City Branch, should
have granted the motion to dismiss. 1äwphï1.ñët

8.Diaz v. Adiong, 219 SCRA 631 (1993)


1. REMEDIAL LAW; ACTIONS; VENUE OF LIBEL CASE WHERE OFFENDED PARTY IS AN PUBLIC OFFICIAL. — From the
provision of Article 360, third paragraph of the Revised Penal Code as amended by R.A. 4363, it is clear that an offended party who
is at the same time a public official can only institute an action arising from libel in two (2) venues: the place where he holds
office, and the place where the alleged libelous articles were printed and first published.
2. ID.; ID.; IMPROPER VENUE; MUST BE RAISED IN A NOTION TO DISMISS PRIOR TO A RESPONSIVE PLEADING. — Unless
and until the defendant objects to the venue in a motion to dismiss prior to a responsive pleading, the venue cannot truly be said to
have been improperly laid since, for all practical intents and purposes, the venue though technically wrong may yet be
considered acceptable to the parties for whose convenience the rules on venue had been devised.
FACTS: The Mindanao Kris, a newspaper of general circulation in Cotabato City, published in its front page the news article
captioned "6-Point Complaint Filed vs. Macumbal," and in its Publisher's Notes the editorial, "Toll of Corruption," which exposed
alleged anomalies by key officials in the Regional Office of the Department of Environment and Natural Resources. 3
The public officers alluded to instituted separate criminal and civil complaints arising from the libel before the City Prosecutor's
Office and the Regional Trial Court in Marawi City.
The City Prosecutor's Office dismissed the criminal case.
Petitioner Diaz moved for the dismissal of the action for damages on the ground that the trial court did not have jurisdiction over the
subject matter. He vehemently argued that the complaint should have been filed in Cotabato City and not in Marawi City.
Petitioner Diaz contends that the civil action for damages could not be rightfully filed in Marawi City as none of the private
respondents, who are all public officers, held office in Marawi City; neither were the alleged libelous news items published in that
city. Consequently, it is petitioner's view that the Regional Trial Court in Marawi City has no jurisdiction to entertain the civil
action for damages.
ISSUES:
1. WON the RTC of Marawi City has jurisdiction over the case.
2. WON improper venue may be waived.
HELD: NO.

1. Firstly, Not one of the respondents then held office in Marawi City. Indeed, private respondents do not deny that their
main place of work was not in Marawi City, although they had sub-offices therein.
Secondly, it is admitted that the libelous articles were published and printed in Cotabato City. Thus, respondents
were limited in their choice of venue for their action for damages only to Cotabato City where Macumbal, Lanto
and Abedin (defendants) had their office and Lanao del Norte where Indol worked. Marawi City is not among
those where venue can be laid.
The third paragraph of Art. 360 of the Revised Penal Code, as amended by R.A. No. 4363, specifically requires that —
"The criminal and civil action for damages in cases of written defamations as provided for in this chapter, shall be filed
simultaneously or separately with the Court of First Instance (now Regional Trial Court) of the province or city where the
libelous article is printed and first published or where any of the offended parties actually resides at the time of the
commission of the offense: Provided, however, that where one of the offended parties is a public officer . . . (who) does not
hold office in the City of Manila, the action shall be filed in the Court of First Instance (Regional Trial Court) of the province or city
where he held office at the time of the commission of the offense or where the libelous article is printed and first published and in
case one of the the offended parties is a private individual, the action shall be filed in the Court of First Instance of the province or
city where he actually resides at the time of the commission of the offense or where the libelous matter is printed and first
published . . . . " (emphasis supplied)
From the foregoing provision, it is clear that an offended party who is at the same time a public official can only institute an action
arising from libel in two (2) venues: the place where he holds office, and the place where the alleged libelous articles were printed
and first published.

2. Consequently, it is indubitable that venue was improperly laid. However, unless and until the defendant objects to the
venue in a motion to dismiss prior to a responsive pleading, the venue cannot truly be said to have been improperly laid
since, for all practical intents and purposes, the venue though technically wrong may yet be considered acceptable
to the parties for whose convenience the rules on venue had been devised. 9
 Petitioner Diaz then, as defendant in the court below, should have timely challenged the venue laid in Marawi City in a
motion to dismiss, pursuant to Sec. 4, Rule 4, of the Rules of Court. Unfortunately, petitioner had already submitted
himself to the jurisdiction of the trial court when he filed his Answer to the Complaint with Counterclaim.
 His motion to dismiss was therefore belatedly filed and could no longer deprive the trial court of jurisdiction to hear
and decide the instant civil action for damages. Well-settled is the rule
 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.
 Finally, Sec. 1 of Rule 16 provides that objections to improper venue must be made in a motion to dismiss before
any responsive pleading is filed. Responsive pleadings are those which seek affirmative relief and set up defenses.
Consequently, having already submitted his person to the jurisdiction of the trial court, petitioner may no longer object to
the venue which, although mandatory in the instant case, is nevertheless waivable. As such, improper venue must be
seasonably raised, otherwise, it may be deemed waived.
WHEREFORE, for lack of merit, the Petition for Certiorari is DISMISSED and the Temporary Restraining Order heretofore issued is
LIFTED.

Sweetlines v. Teves, 83 SCRA 361 (1978)


SWEET LINES VERSUS TEVES

Facts: This is a Cagayan de Oro case which involves Sweet Lines, a shipping company with the head office
in Cebu. The respondent Teves is the former City Fiscal of Davao City, former Mayor and became judge of
CFI of Cagayan de Oro City.
There was a group of passenger who rode on the Sweet Lines bound for Cebu City. During the trip, they
were given a crude treatment by the officers of the vessel. When they came back in Cagayan de Oro City,
they filed a suit for damages against Sweet Lines. They file the case in the former CFI, now RTC, of
Cagayan de Oro City because the plaintiffs are residents of Cagayan de Oro City.
Sweet Lines filed a motion to dismiss questioning the venue of the action because in the ticket issued by
Sweet Lines, it is stipulated that “…in case of a civil action arising from the contract of carriage, the venue
of the action shall be the City of Cebu ONLY and in no other place.” So there is a restrictive word.
Obviously the lawyers of Sweet Lines knew about Polytrade because they moved to dismiss the case citing
this case.
Judge Teves denied the motion to dismiss the case despite the stipulation. According to him, it is unfair. If I
will dismiss the case based on this stipulation, the aggrieved parties will be discouraged in going to Cebu. It
is very expensive and they will be inconvenienced. But, if the case will go on in Cagayan de Oro, it will not
inconvenienced Sweet Lines because they have their branch office, their manager and their own lawyer.

Held: Although venue may be changed or transferred by agreement of the parties in writing, such an
agreement will not be held valid where it practically negates the action of the claimants. Considering the
expense and trouble a passenger residing outside of Cebu City would incur to prosecute a claim in the Cebu
City, he would most probably decide not to file the action at all. The condition will thus defeat, instead of
enhance, the ends of justice. On the other hand, Sweetlines has branches or offices in the respective ports of
call of its vessels and can afford to litigate in any of these places. Hence, the filing of the suit in residence of
plaintiff, as was done in the instant case, will not cause inconvience to, much less prejudice Sweetlines. The
stipulation, if enforced, will be subversive of the public good or interest, since it will frustrate in meritorious
cases, actions of passenger claimants outside of Cebu City, thus placing Sweetlines company at a decided
advantage over said persons, who may have perfectly legitimate claims against it. The said condition should,
therefore, be declared void and unenforceable, as contrary to public policy