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1) Permanent Savings and Loan Bank (PSLB) vs Velarde Issue: WON CA ERRED IN HOLDING THAT PETITIONER FAILED TO ESTABLISH

THE GENUINENESS, DUE EXECUTION AND AUTHENTICITY OF THE SUBJECT LOAN


Facts:
DOCUMENTS.
 PSLB sought to recover from Velarde, the sum of ₱1M plus accrued Ruling: Yes.
interests and penalties, based on a loan obtained by Velarde from PSLB,
evidenced by a promissory note. Velarde’s denials do not constitute an effective specific denial as
 PSLB, sent a letter of demand to Velarde twice date July, 1988 and Feb., contemplated by law. In the early case of Songco vs. Sellner, the Court expounded
1994. on how to deny the genuineness and due execution of an actionable document,
 In his Ans. Velarde claims that allegations in par.2 of Complaint, on the viz.:
existence of the alleged loan of ₱1M, and the purported documents
“This means that the defendant must declare under oath that he did not sign the
evidencing the same, only the signature appearing at the back of the
document or that it is otherwise false or fabricated. Neither does the statement of
promissory note, seems to be that of herein defendant. Velarde also
the answer to the effect that the instrument was procured by fraudulent
claims that the amount was received by another person.
representation raise any issue as to its genuineness or due execution. On the
 Velarde’s Answer also contained a denial under oath, which reads: I,
contrary such a plea is an admission both of the genuineness and due execution
MARIANO Z. VELARDE, of age, am the defendant in this case, that I caused
thereof, since it seeks to avoid the instrument upon a ground not affecting either.”
the preparation of the complaint and that all the allegations thereat are
true and correct; that the promissory note sued upon, assuming that it In fact, Velarde’s ans. amount to an implied admission of the due
exists and bears the genuine signature of herein defendant, the same execution and genuineness of the promissory note. The admission of the
does not bind him and that it did not truly express the real intention of genuineness and due execution of a document means that the party whose
the parties as stated in the defences. signature it bears admits that he voluntarily signed the document or it was signed
 PSLB presented its so Marquez, the Assistant Department Manager of by another for him and with his authority; that at the time it was signed it was in
PDIC and the designated Deputy Liquidator for petitioner bank, who words and figures exactly as set out in the pleading of the party relying upon it;
identified the Promissory Note that the document was delivered; and that any formalities required by law, such
 After petitioner bank rested its case, respondent, instead of presenting as a seal, an acknowledgment, or revenue stamp, which it lacks, are waived by him.
evidence, filed with leave of court his demurrer to evidence. Also, it effectively eliminated any defense relating to the authenticity and due
 RTC rule in favour Velarde. CA affirmed the decision. They ruled that mere execution of the document, or that the signatures appearing thereon were
presentation of supposed documents regarding the loan, but absent the forgeries; or that the signatures were unauthorized.
testimony of a competent witness to the transaction and the
Clearly, both the trial court and the Court of Appeal erred in concluding
documentary evidence, coupled with the denial of liability by the
that respondent specifically denied petitioner’s allegations regarding the loan
defendant does not suffice to meet the requisite preponderance of
documents, as respondent’s Answer shows that he failed to specifically deny
evidence in civil cases.
under oath the genuineness and due execution of the promissory note and its
concomitant documents. Therefore, respondent is deemed to have admitted the
loan documents and acknowledged his obligation with petitioner; and with
respondent’s implied admission, it was not necessary for petitioner to present
further evidence to establish the due execution and authenticity of the loan
documents sued upon.
2) Republic vs Sandiganbayan  The PCGG opposed the motion, arguing that the requested particulars
were evidentiary matters; that the motion was dilatory; and that it
Facts:
contravened the May 28, 1999 Resolution granting respondent's Motion
 The administration of then Pres. Cory C. Aquino successively sued former for Leave to File a Responsive Pleading. The anti-graft court, however,
Pres. Marcos and former First Lady Imelda Marcos (Marcoses), and their upheld respondent, explaining that the allegations against former
alleged cronies or dummies before the anti-graft court to recover the President Marcos were vague, general, and were mere conclusions of
alleged ill-gotten wealth that they amassed during the former president's law.
20-year rule.
Issue: Did the court commit grave abuse of discretion amounting to lack or
 On July, 1987, the Presidential Commission on Good Government (PCGG), excess of jurisdiction in granting respondent's motion for a bill of particulars as
through the OSG, filed a Complaint for reconveyance, reversion, executor of former President Marcos' estates considering that the deceased
accounting, restitution and damages alleging that Roman A. Cruz, Jr., a defendant was then a defaulting defendant when the motion was filed?
crony of Marcos, and the Marcoses stole public assets and invested them Ruling: NO.
in several institutions here and abroad. Despite the alias summonses on
the Marcoses served at Honolulu, Hawaii, the Marcoses, however, failed While it is true that there was no positive act on the part of the court to lift the
to file an answer and were accordingly declared in default by the anti- default order because there was no motion nor order to that effect, the anti-graft
graft court on April, 1989. court's act of granting respondent the opportunity to file a responsive pleading
meant the lifting of the default order on terms the court deemed proper in the
 On March, 1999, Marcos, Jr. (respondent) filed a Motion for Leave to File interest of justice. It was the operative act lifting the default order and thereby
a Responsive Pleading as executor of his late father's estate. The PCGG reinstating the position of the original defendant whom respondent is
opposed the motion, citing as ground the absence of a motion to set aside representing, founded on the court's discretionary power to set aside orders of
the default order or any order lifting the default status of former default.
President Marcos.
It is noteworthy that a motion to lift a default order requires no hearing; it need
 The court granted respondent’s motion. Respondent was given a period be under oath only and accompanied by an affidavit of merits showing a
of ten (10) days from receipt of the Resolution within which to submit his meritorious defense. 36 And it can be filed "at any time after notice thereof and
Responsive Pleading. Respondent asked for three extensions totaling 35 before judgment." Thus, the act of the court in entertaining the motions to file a
days to file an answer. responsive pleading during the pre-trial stage of the proceedings effectively meant
 The court granted the motions but instead of filing an answer, respondent that respondent has acquired a locus standi in this case. That he filed a motion for
a bill of particulars instead of an answer does not pose an issue because he, as
filed on July 16, 1999, a Motion For Bill of Particulars, praying for clearer
statements of the allegations which he called "mere conclusions of law, party defendant representing the estate, is allowed to do so under the Rules of
too vague and general to enable defendants to intelligently answer." Court to be able to file an intelligent answer. It follows that petitioner's filing of a
bill of particulars in this case is merely a condition precedent to the filing of an
answer.
Indeed, failure to file a motion to lift a default order is not procedurally fatal as a
defaulted party can even avail of other remedies as follows: (1) a motion to set
aside the order of default at any time after discovery thereof and before judgment
on the ground that the defendant's failure to file an answer was due to fraud,
accident, mistake or excusable neglect and that the defendant has a meritorious
defense; (2) a motion for new trial within 15 days from receipt of judgment by
default, if judgment had already been rendered before the defendant discovered
the default, but before said judgment has become final and executory; (3) an
appeal within 15 days from receipt of judgment by default; (4) a petition for relief
from judgment within 60 days from notice of judgment and within 6 months from
entry thereof; and (5) a petition for certiorari in exceptional circumstances.
3) LUI ENTERPRISES, INC. vs. ZUELLIG PHARMA CORPORATION and the  RTC found Lui Enterprises to be declared in default for failure to file the
PHILIPPINE BANK OF COMMUNICATIONS (PBC) motion to dismiss within the reglementary period. Then, the court
proceeded to hear the case without Lui Enterprises’ participation.
Facts:
 CA sustained the denial of admission of the motion to dismiss.
 Lui Enterprises, Inc. and Zuellig Pharma entered into a 10-year contract
of lease over a parcel of land located in Barrio Tigatto, Buhangin, Davao  Lui Enterprise now contends that the lower courts should have admitted
City. the motion to dismiss since the very purpose of an interpleader is to
litigate who is entitled to the monthly rent. By declaring them in default,
 Zuellig Pharma, the lessee over the parcel of land, received a letter from
it defeated the very purpose of the suit for interpleader
the PBC. Claiming to be the new owner of the leased property, the bank
asked Zuellig Pharma to pay rent directly to it. Issue: WON trial court did err in refusing to set aside the order of default.

 Zuellig Pharma promptly informed Lui Enterprises of the PBC’s claim. As Ruling:
a reply, Lui Enterprises wrote to Zuellig Pharma and insisted on its right
According to the SC, there should be no inexplicable delay in the filing of a motion
to collect the leased property’s rent
to set aside order of default. Even when a motion is filed within the required
 Due to conflicting claims, Zuellig Pharma filed a case for interpleader to period, excusable negligence must be properly alleged and proven.
compel Lui Enterprises and PBC to litigate their conflicting. Meanwhile,
When a defendant is served with summons and a copy of the complaint, he or she
Zuellig asked the courts to tender and consign monthly rents while the
is required to answer within 15 days from the day he or she was served with
case is ongoing.
summons. The defendant may also move to dismiss the complaint “within the time
 The PBC filed its answer to the complaint. On the other hand, Lui for but before filing the answer."
Enterprises filed a motion to dismiss on the ground that Zuellig Pharma’s
Fifteen days is sufficient time for a defendant to answer with good defenses
alleged representative did not have authority to file the complaint for
against the plaintiff’s allegations in the complaint. Thus, a defendant who fails to
interpleader on behalf of the corporation
answer within 15 days from service of summons either presents no defenses
 Zuellig Pharma filed its opposition to the motion to dismiss of Lui against the plaintiff’s allegations in the complaint or was prevented from filing his
Enterprises. It argued that the motion to dismiss should be denied for or her answer within the required period due to fraud, accident, mistake or
having been filed late. A motion to dismiss should be filed within the excusable negligence.
required time given to file an answer to the complaint, which is 15 days
In either case, the court may declare the defendant in default on plaintiff’s motion
from service of summons on the defendant.23 Summons was served on
and notice to defendant. The court shall then try the case until judgment without
Lui Enterprises on July 4, 2003. It had until July 19, 2003 to file a motion
defendant’s participation and grant the plaintiff such relief as his or her complaint
to dismiss, but Lui Enterprises filed the motion only on July 23, 2003.
may warrant.
However, the defendant declared in default "does not [waive] all of [his or her]
rights." He or she still has the right to "receive notice of subsequent proceedings."
Also, the plaintiff must still present evidence supporting his or her allegations
"despite the default of [the defendant]."

Default, therefore, is not meant to punish the defendant but to enforce the
prompt filing of the answer to the complaint. For a defendant without good
defenses, default saves him or her "the embarrassment of openly appearing to
defend the indefensible."

The consequence of the default is that the court may "render judgment barring
[the defaulted claimant] from any claim in respect to the subject matter." The
Rules would not have allowed claimants in interpleader cases to be declared in
default if it would "ironically defeat the very purpose of the suit."

The RTC of Makati declared Lui Enterprises in default when it failed to answer the
complaint within the required period. Lui Enterprises filed a motion to set aside
order of default without an acceptable excuse why its counsel failed to answer the
complaint. It failed to prove the excusable negligence. Thus, the Makati trial court
did not err in refusing to set aside the order of default.
4) MONZON v. RELOVA that the essence of due process is reasonable opportunity to be heard
and submit evidence in support of one's defense. What the law proscribes
FACTS:
is lack of opportunity to be heard. Monzon's Motion for Reconsideration
 An initiatory pleading captioned as Petition for Injunction was filed by was denied.
spouses Relova and spouses Perez against Atty. Luna and Monzon.
 Monzon filed the instant Petition for Review on Certiorari under Rule 45
 Respondents alleged that Monzon executed a promissory note in favor of of the Rules of Court claiming anew that it was a violation of her right to
the spouses Perez, secured by a lot in Tagaytay City. Monzon executed a due process of law for the RTC to render its Decision immediately after
Deed of Absolute Sale over the said parcel of land in favor of the spouses respondents presented their evidence ex parte without giving her a
Perez. Respondents also claim that Monzon executed another promissory chance to present her evidence. Monzon stresses that she was never
note, this time in favor of the spouses Relova, secured by the same lot in declared in default by the trial court. The trial court should have, thus, set
Tagaytay. Monzon executed a Deed of Conditional Sale over said parcel the case for hearing for the reception of the evidence of the defense. She
of land in favor of the spouses Relova. The Coastal Lending Corporation claims that she never waived her right to present evidence.
extrajudicially foreclosed the entire 9,967-square meter property in
 It can be seen that despite the fact that Monzon was not declared in
Tagaytay, including the portions mortgaged and subsequently sold to
default by the RTC, the RTC nevertheless applied the effects of a default
respondents. According to the Petition for Injunction, Monzon was
order upon petitioner under Section 3, Rule 9 of the Rules of Court.
indebted to the Coastal Lending Corporation.
 SEC. 3. Default; declaration of.-- If the defending party fails to answer
 On 5 December 2001, the RTC, citing the absence of petitioner and her
within the time allowed therefor, the court shall, upon motion of the
counsel on said hearing date despite due notice, granted an oral Motion
claiming party with notice to the defending party, and proof of such
by the respondents by issuing an Order allowing the ex parte
failure, declare the defending party in default. Thereupon, the court shall
presentation of evidence by respondents. RTC rendered a Decision in
proceed to render judgment granting the claimant such relief as his
favor of respondents. The Court mentioned that the Order allowing
pleading may warrant, unless the court in its discretion requires the
the ex parte presentation of evidence by respondents was due to the
claimant to submit evidence. Such reception of evidence may be
continuous and incessant absences of petitioner and counsel.
delegated to the clerk of court.
 Monzon filed a Notice of Appeal, which was approved by the trial court.
 Effect of order of default.—A party in default shall be entitled to notice
Monzon claims that the RTC gravely erred in rendering its Decision
of subsequent proceedings but not to take part in the trial.
immediately after respondents presented their evidence ex
parte without giving her a chance to present her evidence, thereby ISSUE: W/N Monzon’s non-appearance at an ordinary hearing and to adduce
violating her right to due process of law. The Court of Appeals dismissed evidence constitute default?
the appeal holding that Monzon showed tepid interest in having the case
RULING: NO. Failure to appear in hearings is not a ground for the declaration of a
resolved with dispatch. She, thus, cannot now complain that she was
defendant in default. According to Justice Regalado, the effects of default are
denied due process when she was given ample opportunity to defend and
followed only in three instances: (1) when there is an actual default for failure to
assert her interests in the case. The Court of Appeals reminded Monzon
file a responsive pleading; (2) failure to appear in the pre-trial conference; and (3) hearing date set for the presentation of the evidence of the defense, but such did
refusal to comply with modes of discovery under the circumstance in Sec. 3(c), not occur in the case at bar.
Rule 29. In view of the foregoing, we are, therefore, inclined to remand the case to the trial
court for reception of evidence for the defense. Before we do so, however, we
We have in the past admonished trial judges against issuing precipitate orders of
need to point out that the trial court had committed another error which we
default as these have the effect of denying a litigant the chance to be heard and
should address to put the remand in its proper perspective.
increase the burden of needless litigations in the appellate courts where time is
needed for more important or complicated cases. While there are instances when
a party may be properly defaulted, these should be the exception rather than the
rule, and should be allowed only in clear cases of obstinate refusal or inordinate
neglect to comply with the orders of the court.

It is even worse when the court issues an order not denominated as an order of
default, but provides for the application of effects of default. Such amounts to the
circumvention of the rigid requirements of a default order, to wit: (1) the court
must have validly acquired jurisdiction over the person of the defendant either by
service of summons or voluntary appearance; (2) the defendant failed to file his
answer within the time allowed therefor; and (3) there must be a motion to
declare the defendant in default with notice to the latter. In the case at bar,
petitioner had not failed to file her answer. Neither was notice sent to petitioner
that she would be defaulted, or that the effects of default shall be imposed upon
her. "Mere non-appearance of defendants at an ordinary hearing and to adduce
evidence does not constitute default, when they have already filed their answer
to the complaint within the reglementary period. It is error to default a defendant
after the answer had already been filed. It should be borne in mind that the policy
of the law is to have every litigant's case tried on the merits as much as possible;
it is for this reason that judgments by default are frowned upon"

We agree with petitioner that such failure to attend, when committed during
hearing dates for the presentation of the complainant's evidence, would amount
to the waiver of such defendant's right to object to the evidence presented during
such hearing, and to cross-examine the witnesses presented therein. However, it
would not amount to a waiver of the defendant's right to present evidence during
the trial dates scheduled for the reception of evidence for the defense. It would
be an entirely different issue if the failure to attend of the defendant was on a
5) PAGCOR v. LOPEZ goodwill money which they allegedly invested with the complainant.
Complainant filed an opposition on the ground that there is a substantial
Facts:
change in the complaint and cause of action.
 PAGCOR entered into an Agreement with FILGAME and BELLE Jai-Alai
 On November 27, 2001, respondent issued an Order admitting the
Corporation (BELLE) for the resumption of the Jai-Alai operations in the
amended complaint and directing complainant and DILG to file their
country. FILGAME and BELLE jointly agreed to provide funds, at no cost
answer.
to complainant, for pre-operating expenses and working capital. PAGCOR
shall manage, operate and control all aspects of the Jai-Alai operations.

 The Office of the President of the Philippines issued a Memorandum Issue: W/N Respondent Judge committed gross ignorance of the law when he
addressed to PAGCOR Chairperson and Chief Executive Officer, directing admitted the amended complaint notwithstanding that such amended complaint
her to take immediate steps to close down all PAGCOR facilities and substantially altered the cause of action of FILGAME and BELLE?
outlets in Jai-Alai, on-line bingo and internet casino gaming. DILG,
through then Secretary Alfredo S. Lim, caused the closure of the Jai-Alai
main fronton. Thus, FILGAME and BELLE filed the case for Specific Ruling: NO. Under Section 3, Rule 10 of the Rules of Court, substantial
Performance and Injunction with prayer for Damages and Temporary amendments may be made only upon leave of court. But such leave may be
Restraining Order (TRO), and Writ of Preliminary Injunction against refused if it appears to the court that the motion was made with intent to delay.
PAGCOR, DILG and Secretary Alfredo Lim. Orders of the court upon the matters provided in this section shall be made upon
motion filed in court, and after notice to the adverse party, and an opportunity to
 On November 10, 2000, respondent issued a writ of temporary
be heard.
restraining order effective for 20 days. The Supreme Court rendered a
decision in several cases holding that PAGCOR, Belle Jai-Alai Corporation Interestingly, Section 3, Rule 10 of the 1997 Rules of Civil Procedure amended the
and Filipinas Gaming Entertainment Totalizator Corporation are enjoined former rule in such manner that the phrase "or that the cause of action or defense
from managing, maintaining and operating jai-alai games, and from is substantially altered" was stricken-off and not retained in the new rules. The
enforcing the agreement entered into by them for that purpose. Motions clear import of such amendment in Section 3, Rule 10 is that under the new rules,
for Reconsideration filed by PAGCOR, BELLE and FILGAME were "the amendment may (now) substantially alter the cause of action or
subsequently denied. defense." This should only be true, however, when despite a substantial change or
alteration in the cause of action or defense, the amendments sought to be made
 Consequently, FILGAME and BELLE filed a Motion to Admit Amended
shall serve the higher interests of substantial justice, and prevent delay and equally
Complaint with the trial court where the cause of action was
promote the laudable objective of the rules which is to secure a "just, speedy and
changed, i.e., from Specific Performance to Recovery of Sum of Money,
inexpensive disposition of every action and proceeding.
inasmuch as plaintiffs could no longer ask for specific performance of
their agreement with complainant since the Court had declared the The original complaint filed by the plaintiffs was for specific performance and
agreement without force and effect. Thus, FILGAME and BELLE sought to injunction with prayer for damages and for TRO and writ of preliminary injunction
recover their pre-operating expenses and/or investments including the against complainant while the amended complaint was for recovery of sum of
money. Such amendment to the original complaint was filed by plaintiffs FILGAME
and BELLE after the Supreme Court decision declared that complainant could not
enter into a joint agreement with other corporations to operate the Jai-Alai, and
that the Agreement dated June 17, 1999 entered into between complainant and
the plaintiffs is null and void. However, since plaintiffs had provided funds for
complainant’s pre-operating expenses and working capital, plaintiffs had to file an
amended complaint which seeks the recovery of their expenses. Although the
amended complaint substantially changed the cause of action of plaintiffs
FILGAME and BELLE, the admission thereof by respondent is allowed under Section
3, Rule 10 and jurisprudence.

As has been held in the case of Pagubo vs. CA, indeed, although an amendment
may substantially change or alter the cause of action or defense, the same must
serve the higher interests of substantial justice, and prevent delay and equally
promote the laudable objective of the rules which is to secure a "just, speedy and
inexpensive disposition of every action and proceedings."
6) SWAGMAN HOTELS AND TRAVEL, INC., v. COURT OF APPEALS first and the second promissory notes have already matured. Hence,
payment is already due.
Facts:
 Under Section 5 of Rule 10 of the 1997 Rules of Civil Procedure, a
 Swagman Hotels and Travel, Inc., through Atty. Leonor L. Infante and
complaint which states no cause of action may be cured by evidence
Rodney David Hegerty, its president and vice-president, respectively,
presented without objection. Thus, even if the plaintiff had no cause of
obtained from private respondent Neal B. Christian loans evidenced by
action at the time he filed the instant complaint, as defendants’
three promissory notes. Christian informed the petitioner corporation
obligation are not yet due and demandable then, he may nevertheless
that he was terminating the loans and demanded from the latter payment
recover on the first two promissory notes in view of the introduction of
in the total amount of US$150,000 plus unpaid interests in the total
evidence showing that the obligations covered by the two promissory
amount of US$13,500.
notes are now due and demandable.
 Private respondent Christian filed with the Regional Trial Court of Baguio
 Appellant Swagman contends that, at the time of the filing of the
City, a complaint for a sum of money and damages against the petitioner
complaint, appellee Christian had no cause of action because none of the
corporation, Hegerty, and Atty. Infante. The petitioner corporation,
promissory notes was due and demandable.
together with its president and vice-president, filed an Answer raising as
defense, among others, lack of cause of action. According to them,  The Court of Appeals denied petitioner’s motion for reconsideration.
Christian had no cause of action because the three promissory notes were According to the trial court, and sustained by the Court of Appeals,
not yet due and demandable. Section 5, Rule 10 of the 1997 Rules of Civil Procedure allows a complaint
that does not state a cause of action to be cured by evidence presented
 In due course and after hearing, the trial court rendered a decision
without objection during the trial. Thus, it ruled that even if the private
declaring the first two promissory notes dated 7 August 1996 and 14
respondent had no cause of action when he filed the complaint for a sum
March 1997 as already due and demandable and that the interest on the
of money and damages because none of the three promissory notes was
loans had been reduced by the parties from 15% to 6% per annum.
due yet, he could nevertheless recover on the first two promissory notes
 In the instant case, the Court is of the view that the parties merely dated 7 August 1996 and 14 March 1997, which became due during the
intended to change the rate of interest from 15% per annum to 6% per pendency of the case in view of the introduction of evidence of their
annum when the defendant started paying $750 per month which maturity during the trial.
payments were all accepted by the plaintiff from January 1998 onward. Issue: May a complaint that lacks a cause of action at the time it was filed be cured
The payment of the principal obligation, however, remains unaffected by the accrual of a cause of action during the pendency of the case?
which means that the defendant should still pay the plaintiff $50,000 on
August 9, 1999, March 14, 2000 and July 14, 2000.

 When the instant case was filed on February 2, 1999, none of the Ruling: NO. Contrary to the holding of the trial court and the Court of Appeals, the
promissory notes was due and demandable. As of this date however, the defect of lack of cause of action at the commencement of this suit cannot be cured
by the accrual of a cause of action during the pendency of this case arising from
the alleged maturity of two of the promissory notes on 7 August 1999 and 14 answer having been superseded by the amended complaint and answer thereto,
March 2000. and the answer to the original complaint not having been presented in evidence
as an exhibit, the trial court was not authorized to take it into account." But in
Amendments of pleadings are allowed under Rule 10 of the 1997 Rules of Civil
none of these cases or in any other case have we held that if a right of action did
Procedure in order that the actual merits of a case may be determined in the most
not exist when the original complaint was filed, one could be created by filing an
expeditious and inexpensive manner without regard to technicalities, and that all
amended complaint. In some jurisdictions in the United States what was termed
other matters included in the case may be determined in a single proceeding,
an "imperfect cause of action" could be perfected by suitable amendment. That,
thereby avoiding multiplicity of suits. Section 5 thereof applies to situations
however, which is no cause of action whatsoever cannot by amendment or
wherein evidence not within the issues raised in the pleadings is presented by the
supplemental pleading be converted into a cause of action: Nihil de re accrescit ei
parties during the trial, and to conform to such evidence the pleadings are
qui nihil in re quando jus accresceret habet.
subsequently amended on motion of a party. Thus, a complaint which fails to state
a cause of action may be cured by evidence presented during the trial. We are therefore of the opinion, and so hold, that unless the plaintiff has a valid
and subsisting cause of action at the time his action is commenced, the defect
However, the curing effect under Section 5 is applicable only if a cause of action in
cannot be cured or remedied by the acquisition or accrual of one while the action
fact exists at the time the complaint is filed, but the complaint is defective for
is pending, and a supplemental complaint or an amendment setting up such
failure to allege the essential facts. For example, if a complaint failed to allege the
after-accrued cause of action is not permissible.
fulfillment of a condition precedent upon which the cause of action depends,
evidence showing that such condition had already been fulfilled when the
complaint was filed may be presented during the trial, and the complaint may
accordingly be amended thereafter. Thus, in Roces v. Jalandoni, this Court upheld
the trial court in taking cognizance of an otherwise defective complaint which was
later cured by the testimony of the plaintiff during the trial. In that case, there was
in fact a cause of action and the only problem was the insufficiency of the
allegations in the complaint.

It thus follows that a complaint whose cause of action has not yet accrued cannot
be cured or remedied by an amended or supplemental pleading alleging the
existence or accrual of a cause of action while the case is pending. Such an action
is prematurely brought and is, therefore, a groundless suit, which should be
dismissed by the court upon proper motion seasonably filed by the defendant. The
underlying reason for this rule is that a person should not be summoned before
the public tribunals to answer for complaints which are immature.

It is true that an amended complaint and the answer thereto take the place of the
originals which are thereby regarded as abandoned and that "the complaint and
7) ABERCA VS. VER  Plaintiffs-appellees filed a motion to reconsider and set aside the order
of dismissal. In an order dated May 11, 1984, the trial court declared the
Facts:
order of November 8, 1983 final.
 On 25 January 1983, several suspected subversives who were arrested
 Thereafter, Plaintiffs-appellees went to the Supreme Court on a petition
and detained by the military filed a complaint for damages with the
for review on certiorari, seeking to annul and set aside the orders of the
Regional Trial Court of Quezon City against Gen. Fabian Ver, then AFP
trial court dated November 8, 1983, May 11, 1984 and September 21,
Chief of Staff, and the following subordinate officers: Col. Fidel Singson,
1984. The case was docketed as G.R. No. 69866.
Col. Gerardo Lantoria, Col. Rolando Abadilla, Col. Guillermo Kintanar, Lt.
Col. Panfilo Lacson, Maj. Rodolfo Aguinaldo, Capt. Danilo Pizarro, 1Lt.  While the case was pending in the Supreme Court, the so-called EDSA
Pedro Tango, 1Lt. Romeo Ricardo, 1Lt. Raul Bacalso, M/Sgt. Bienvenido revolution took place. As a result, the defendants-appellants lost their
Balaba and "John Does." The case was docketed as Civil Case No. 37487 official positions and were no longer in their respective office addresses
and assigned to Branch 95. as appearing in the record. Also, in the meantime, the case was re-raffled
to Branch 107.
 In their complaint, the plaintiff-appellees alleged that they were arrested
and detained by Task Force Makabansa, a composite group of various  The Supreme Court rendered a decision annulling and setting aside the
intelligence units of the AFP, on the strength of defective search assailed orders and remanded the case to the trial court for further
warrants; that while under detention and investigation, they were proceedings.
subjected to physical and psychological harm, torture and other
brutalities to extort from them confessions and other information that  However, trial could not proceed immediately because on June 11, 1988,
would incriminate them; and that by reason thereof, they suffered actual the record of the case was destroyed when fire razed the City Hall of
and moral damages. Quezon City. Plaintiffs-appellees sought a reconstitution of the record of
the case. The record shows that the petition for reconstitution was set for
 Defendants-appellants, through their counsel, the then Solicitor General hearing on October 27, 1989. However, there is nothing in the record to
Estelito Mendoza, filed a motion to dismiss on the following grounds: (1) show that defendants-appellants or their counsel were notified. For lack
since the privilege of the writ of habeas corpus was then suspended, the of an opposition, the petition for reconstitution was granted in an order.
trial court cannot inquire into the circumstances surrounding plaintiffs-
appellees’ arrests; (2) the defendants-appellants are immune from  Plaintiffs-appellees filed a motion praying that defendants-appellants be
liability for the reason that they were then performing their official required to file their answer. However, the record as reconstituted did
duties; and (3) the complaint states no cause of action. not show who are the lawyers of the defendants-appellants considering
that Estelito Mendoza, who had represented them in his capacity as
 In an order dated November 8, 1983, the trial court granted defendants- Solicitor General, was no longer holding that position. Furthermore,
appellants’ motion to dismiss and ordered the case dismissed. The defendants-appellants were also no longer occupying the positions they
plaintiffs re-filed two MRs but both were denied. held at the time the complaint was filed. Thus, in an order dated August
17, 1990, plaintiffs-appellees were directed to report to the trial court the
addresses and whereabouts of defendants-appellants so that they could Supreme Court xxx the defendants-appellants herein would not be aware
be properly notified. that they should file a responsive pleading" and that, therefore, "to
consider the defendants-appellants in default would be tantamount to
 Instead of complying with the order of August 17, 1990, plaintiffs- lack of due process xxx."
appellees filed a motion to declare defendants-appellants in default. The
trial court deferred resolution of this motion and instead, it issued an  For failure of the plaintiffs-appellees to comply with the orders dated
order directing that a copy of the order dated August 17, 1990 be August 17, 1990 and December 27, 1990, the trial court dismissed the
furnished to new Solicitor General Francisco Chavez to enable him to take case without prejudice in its order dated March 7, 1991. Subsequently,
action pursuant to Section 18, Rule 3 of the Rules of Court, and to former however, in an order dated June 4, 1991, the trial court set aside the
Solicitor General Estelito Mendoza to enable him to give notice as to order of dismissal and reinstated the case. It also approved plaintiffs-
whether he [would] continue to represent the defendants-appellants in appellees’ request to serve the notice to file answer or responsive
his private capacity. As it said in its order, the trial court took this action pleading by publication
"in view of the change in government and corresponding change in the
addresses and circumstances of the defendants-appellants who may not  Plaintiffs-appellees informed the trial court that the notice to file an
even be aware of the decision of the Supreme Court in case G.R. No. L- answer was published in the Tagalog newspaper BALITA.
69866 and of the reconstitution of records in this case xxx."  No answer was filed by defendants-appellants within the period stated in
 Former Solicitor General Mendoza filed a manifestation informing the the notice. On motion of plaintiffs-appellees, the trial court in its order
trial court that his appearance as defendants-appellants’ counsel dated December 5, 1991 declared defendants-appellants in default and
terminated when he ceased to be Solicitor General and that he was not directed plaintiffs-appellees to present their evidence ex-parte.
representing them in his private capacity.  The RTC ruled in favor of the plaintiffs. The CA rendered a decision
 Solicitor General Chavez filed a notice of withdrawal of appearance. reversing and setting aside the RTC decision and ordering the case
remanded to the RTC for further proceedings.
 The trial court denied plaintiffs-appellees’ motion to declare defendants-
Issue: Whether or not RTC erred in declaring the defendants in default
appellants in default, emphatically pointing out that defendants-
appellants were not duly notified of the decision of the Supreme Court. Ruling:
In the same order, the trial court directed plaintiffs-appellees to comply
with the order of August 17, 1990 within ten (10) days from notice, with In the case at bench, the respondents were completely deprived of due
a warning that the case [would] be archived and eventually dismissed if process when they were declared in default based on a defective mode of service
plaintiffs-appellees failed to furnish to the court the addresses of – service of notice to file answer by publication. The rules on service of pleadings,
defendants-appellants. motions, notices, orders, judgments, and other papers were not strictly followed
in declaring the respondents in default. The Court agrees with the CA that the RTC
 Plaintiffs-appellees moved to reconsider the order dated December 27, committed procedural lapses in declaring the respondents in default and in
1990 but in an order dated February 1, 1991, the trial court denied the allowing the petitioners to present evidence ex-parte.
motion, stating that "without actual notice of the judgment of the
As correctly observed by the CA, the RTC’s August 17, 1990 Order was an
attempt to serve a notice to file answer on the respondents by personal service
and/or by mail. These proper and preferred modes of service, however, were
never resorted to because the OSG abandoned them when the petitioners failed
to comply with the August 17, 1990 RTC order requiring them to report the
addresses and whereabouts of the respondents. Nevertheless, there was still
another less preferred but proper mode of service available – substituted service
- which is service made by delivering the copy to the clerk of court, with proof of
failure of both personal service and service by mail. Unfortunately, this substitute
mode of service was not resorted to by the RTC after it failed to effect personal
service and service by mail. Instead, the RTC authorized an unrecognized mode of
service under the Rules, which was service of notice to file answer by publication.

Considering the fact that the OSG could no longer represent the
respondents, the RTC should have been more patient in notifying the respondents
through personal service and/or service by mail. It should not have simply
abandoned the preferred modes of service when the petitioners failed to comply
with its August 17, 1990 order with the correct addresses of the respondents.
More so, it should not have skipped the substituted service prescribed under the
Rules and authorized a service of notice on the respondents to file answer by
publication.

In view of the peculiar circumstances surrounding the case, the RTC


should have instead directed the petitioners to exert diligent efforts to notify the
respondents either personally or by registered mail as provided in Sections 6 and
7 of Rule 13 of Rules of Court. In case the preferred modes were impractical, the
Court should have required the petitioners to at least report in writing why efforts
exerted towards personal service or service by mail failed. In other words, a
convincing proof of an impossibility of personal service or service by mail to the
respondents should have been shown first. The RTC, thus, erred when it ruled that
the publication of a notice to file answer to the respondents substantially cured
the procedural defect equivalent to lack of due process. The RTC cannot just
abandon the basic requirement of personal service and/or service by mail.
8) DOMINGO vs. COURT OF APPEALS  RTC found Marcelino in contempt, and ordered his arrest and
imprisonment. However, the sheriff of the RTC no longer served the
Facts:
26 May 2004 Order because Marcelino declared in writing that he
 Before he died, Julio Domingo (Julio) allegedly executed a Deed of would deliver possession of the property to the Domingos.
Absolute Sale over a parcel of land in favor of Marcelino’s wife,
 The Court of Appeals dismissed outright Marcelino and
Carmelita Mananghaya (Mananghaya). The property was situated in
Mananghaya’s petition.
Nueva Ecija, and was covered by Transfer Certificate of Title No. NT-
87365.  However, Marcelino employed six men to reenter the property. On
14 June 2004, the RTC issued warrants of arrest against Marcelino
 Agapita and Ana Domingo, and the heirs of Gaudencio, Julian,
and the six men. Marcelino and a certain Genero Salazar (Salazar)
Edilberta, Modesta, Felipe, and Geronimo Domingo (the Domingos)
were arrested and were detained at the Philippine National Police
filed before the Regional Trial Court (RTC), a complaint against
station in Sto. Domingo, Nueva Ecija.
Marcelino and Mananghaya for the annulment of the Deed of
Absolute Sale. The Domingos alleged that Julio’s signature in the  The DAR granted Marcelino’s 25 August 2003 petition, placed
deed was forged. 10.0108 hectares of land — including the property — under the
coverage of Republic Act (RA) No. 6657, and named Marcelino as one
 The RTC held that Julio’s signature in the Deed of Absolute Sale was
of the tenant-beneficiaries. Agapita Domingo (Agapita) filed a motion
forged; thus, the deed was void. The RTC ordered Marcelino and
for reconsideration of the 4 October 2004 Order. Marcelino
Mananghaya to deliver possession of the property to the Domingos.
reentered and retook possession of the property.
 Marcelino and Mananghaya appealed the said RTC Decision to the
 The Domingos filed before the RTC another motion to cite Marcelino
Court of Appeals. In its 14 July 2000 Decision, the Court of Appeals
in contempt, and for the issuance of a warrant for his arrest for tilling
dismissed the appeal. The 14 July 2000 Decision became final and
and plowing the land-in-question. The RTC declared Marcelino in
executory. Thus, on 4 August 2003, the RTC issued a writ of
contempt.
execution. On 25 August 2003, the Domingos gained possession of
the property.  The DAR granted Agapita’s motion for reconsideration and set aside
the 4 October 2004 Order. The DAR held that the property was not
 Marcelino filed with the Department of Agrarian Reform (DAR) a
covered by RA No. 6657 because it was less than five hectares.
petition praying that he be declared the tenant-beneficiary of the
property.  The Court of Appeals held that Marcelino’s "failure to file a written
explanation to justify service by mail in lieu of the preferred mode of
 Marcelino reentered and retook possession of the property. The
personal service is an absolutely insurmountable obstacle to the
Domingos filed before the RTC a motion to cite Marcelino in
success of this motion for reconsideration." Marcelino filed another
contempt. Marcelino and Mananghaya filed before the Court of
motion for reconsideration. In its 19 July 2005 Resolution, the Court
Appeals a petition for certiorari, prohibition and mandamus.
of Appeals noted the motion. The Court of Appeals held that, "We
cannot accept the motion for reconsideration for the reason that a clever, resort to the following less than ethical practices: (1) serving or filing
second motion for reconsideration of a final order is a prohibited pleadings by mail to catch opposing counsel off-guard, thus leaving the latter with
pleading." little or no time to prepare, for instance, responsive pleadings or an opposition; or
(2) upon receiving notice from the post office that the registered parcel containing
 While it is true that Petitioner failed to incorporate a written the pleading of or other paper from the adverse party may be claimed, unduly
explanation to justify service by mail in lieu of the preferred mode of procrastinating before claiming the parcel, or, worse, not claiming it at all, thereby
personal service in his Petition, it was grave abuse of discretion for causing undue delay in the disposition of such pleading or other papers.1avvphi1
public respondent Court of Appeals to dismiss his Petition on this
ground. x x x Litigations should be decided as much as possible on If only to underscore the mandatory nature of this innovation to our set of
their merits rather than technicalities adjective rules requiring personal service whenever practicable, Section 11 of
Rule 13 then gives the court the discretion to consider a pleading or paper as not
Issue: Whether or not Section 11, Rule 13 of the 1997 Rules of Civil Procedure is filed if the other modes of service or filing were resorted to and no written
"merely directory" explanation was made as to why personal service was not done in the first place.
Ruling: The exercise of discretion must, necessarily, consider the practicability of personal
service, for Section 11 itself begins with the clause "whenever practicable."
The petition is unmeritorious. Section 11, Rule 13 of the Rules of Court states:
We thus take this opportunity to clarify that under Section 11, Rule 13 of the 1997
SEC. 11. Priorities in modes of service and filing. — Whenever practicable, the Rules of Civil Procedure, personal service and filing is the general rule, and resort
service and filing of pleadings and other papers shall be done personally. Except to other modes of service and filing, the exception. Henceforth, whenever
with respect to papers emanating from the court, a resort to other modes must be personal service or filing is practicable, in light of the circumstances of time,
accompanied by a written explanation why the service or filing was not done place and person, personal service or filing is mandatory. Only when personal
personally. A violation of this Rule may be cause to consider the paper as not filed. service or filing is not practicable may resort to other modes be had, which must
then be accompanied by a written explanation as to why personal service or
Section 11 is mandatory. In Solar Team Entertainment, Inc. v. Judge Ricafort,23 the
filing was not practicable to begin with. In adjudging the plausibility of an
Court held that:
explanation, a court shall likewise consider the importance of the subject matter
Pursuant x x x to Section 11 of Rule 13, service and filing of pleadings and other of the case or the issues involved therein, and the prima facie merit of the pleading
papers must, whenever practicable, be done personally; and if made through sought to be expunged for violation of Section 11. This Court cannot rule
other modes, the party concerned must provide a written explanation as to why otherwise, lest we allow circumvention of the innovation introduced by the 1997
the service or filing was not done personally. x x x Rules in order to obviate delay in the administration of justice.

Personal service and filing are preferred for obvious reasons. Plainly, such should Liberal application of procedural rules is allowed only when two requisites are
expedite action or resolution on a pleading, motion or other paper; and present: (1) there is a plausible explanation for the non-compliance, and (2) the
conversely, minimize, if not eliminate, delays likely to be incurred if service or filing outright dismissal would defeat the administration of justice.
is done by mail, considering the inefficiency of postal service. Likewise, personal
Both requisites are lacking in the present case.
service will do away with the practice of some lawyers who, wanting to appear
9) SPOUSES TOPACIO VS. BANCO FILIPINO SAVINGS AND MORTGAGE  The Petition for the issuance of writ of possession filed by the respondent
BANK was dismissed by the RTC on the ground of failure to prosecute. However,
no copy of the said Order was served to the respondent.
Facts:
 The respondent filed a Motion to Clarify the Order of December 16, 1986.
 The petitioners obtained a loan amounting to ₱400,000.00 from the
In the same motion, the respondent likewise moved for the issuance of
respondent. To secure the loan, the petitioners executed a real estate
an alias writ of possession.
mortgage in favor of the respondent.
 In an Order, the RTC made a clarification that the Order of Dismissal of
 The petitioners failed to pay the loan, prompting the respondent to file a
December 16, 1986 refers to the dismissal of the "main case for issuance
Petition for Extrajudicial Foreclosure of Mortgage, pursuant to Act No.
of a writ of possession." In that same Order, the RTC denied the
3135. To satisfy the obligation, the Provincial Sheriff of Bulacan, on
respondent’s motion for the issuance of an alias writ of possession
November 8, 1982, sold the mortgaged property at public auction, where
the respondent emerged as the highest bidder. Accordingly, a  RTC Reconsidered and set aside the Order of December 16, 1986 and
Certification of Sale was issued in favor of the respondent and registered granted the respondent’s prayer for the issuance of an alias writ of
with the Registry of Deeds. possession. The petitioners moved for a reconsideration of the June 2,
1993 Order and prayed that the implementation of the alias writ of
 The respondent filed a Petition for the Issuance of a Writ of Possession
possession be held in abeyance.
over the mortgaged property before the Regional Trial Court.
 The CA found that the December 16, 1986 Order of the RTC does not
 The RTC granted the petition, conditioned on the posting of a
amount to a dismissal on the merits as it was based on purely technical
₱100,000.00 bond. Upon posting of the required bond, the RTC issued,
grounds. It noted that the records show that the respondent was not
on February 16, 1984, a writ of possession, commanding the sheriff to
furnished a copy of the Dismissal Order; hence, the case cannot be
place the respondent in possession of the property.
deemed to be final with respect to the respondent.
 The writ of possession was not implemented because, the petitioners
Issue: Whether or not the dismissal order /judgment was properly served
filed with the RTC, a petition to set aside the auction sale and the writ of
possession (with application for a temporary restraining order and a writ Ruling: No. As provided under Section 9, Rule 13 of the Rules of Court, judgments
of preliminary injunction). are sufficiently served when they are delivered personally, or through registered
mail to the counsel of record, or by leaving them in his office with his clerk or with
 The RTC issued on March 13, 1984, a writ of preliminary injunction a person having charge thereof. After service, a judgment or order which is not
ordering the respondent and the Provincial Sheriff to desist from appealed nor made subject of a motion for reconsideration within the prescribed
implementing the writ of possession and to refrain from interfering with 15-day period attains finality.
and disrupting the possession of the petitioners over the subject parcel
of land. In the present case, we note that the December 16, 1986 Dismissal Order cannot
be deemed to have become final and executory in view of the absence of a valid
service, whether personally or via registered mail, on the respondent’s counsel.
We note in this regard that the petitioners do not dispute the CA finding that the
"records failed to show that the private respondent was furnished with a copy of
the said order of dismissal. Accordingly, the Dismissal Order never attained finality.