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REMEDIAL LAW CASE DIGESTS

1. Swagman Hotels and Travels, Inc. vs. CA


455 SCRA 175
FACTS

Swagman through Atty. Infante and Hegerty, its president and vice president, respectively,
obtained from Christian loans evidenced by three promissory notes dated August 7, 1996, March 14, 1997,
and July 14, 1997. Each promissory notes is in the amount of US$50,000 payable for three years from its
date with an interest of 15% per annum payable every three months. In a letter dated December 6, 1998.
Christian informed the petitioner corporation that he was terminating the loans and demanded from the
latter payment of said loans. On February 2, 1999, Christian filed with the RTC a complaint for a sum of
money and damages against the petitioner corporation, Hegerty and Atty. Infante.

The petitioner corporation, together with its president and vice president, filed an answer raising
as defenses lack of cause of action. According to them, Christian had no cause of action because the three
promissory notes were not yet due and demandable.

The trial court ruled under Section 5 of Rule 10 of the Rules of Court, a complaint states no cause
of action, may be cured by evidence presented without objection. Thus, even if the plaintiff had no cause
of action at the time he filed the instant complaint, as defendants’ obligation are not yet due and
demandable then, he may nevertheless recover two promissory notes in view of the introduction of
evidence showing that the obligations covered by the two promissory notes are now due and
demandable.

ISSUE

Whether or not a complaint that has no cause of action may be cured by amendment.

HELD

The Court held that a complaint whose cause of action has not yet accrued cannot be cured or
remedied by an amended and supplemental pleading alleging the existence of 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.

2. Gumabay vs. Baralin


77 SCRA 258

FACTS

Gumabay sued the defendants in the Court of First Instance in Cagayan to recover possession of
a parcel of land assessed in her name, alleging forcible entry. The defendant moved to dismiss the
complaint on the ground that the court has no jurisdiction over the case. It should be filed to the proper
inferior court. Without awaiting the resolution of that motion, Gumabay, filed an amended complaint
wherein she alleged that the defendants claimed to be the owners of the land. She changed forcible entry
action into action to quiet title. A copy of that amended complaint was personally served on defendants’
counsel. The lower court admitted the amended complaint, ordered the defendants to answer it, and
denied the motion to dismiss. Gumabay, in her motion asked that the defendants be declared in default
for not having answered her amended pleading.

The defendants contend that the lower court erred in not dismissing the original complaint, in
admitting the amended complaint, in assuming that it acquired jurisdiction over their persons on the basis
of the amended complaint even without service of new summons, in declaring them in default, and in
granting them relief from the judgment by default.

ISSUE

Whether or not the lower court erred in not dismissing the original complaint, in admitting the
amended complaint, in assuming that it acquired jurisdiction over their persons on the basis of the
amended complaint even without service of summons, in declaring them in default, and in not granting
them relief from the judgment by default.

HELD

It was held that the contentions cannot be sustained. The original complaint for forcible entry
contained the basic prayer “that the plaintiff be declared the absolute owner of the land in question”.
That relief was retained in the amended complaint. The only difference between the original and
amended complaints is that the latter contained the additional allegation that the “defendants are now
asserting and claiming title and absolute ownership over the land in question which is adverse and against
the interest of the plaintiff”. Defendants’ two lawyers were given plenty of time to answer the amended
complaint. Their failure to answer was inexcusable. The answer attached to their petition for relief from
judgment does not contain any meritorious defense.

Therefore, to set aside the judgment by default and grant a new trial would be an idle ceremony.
There is no probability that defendants’ evidence would justify a reversal of the judgment by default.

3. Gaspar vs. Dorado


15 SCRA 331, 334
FACTS

Vicente was the former owner of an undivided portion of a residential lot in Roxas City. He sold
the same to the plaintiff, Gaspar. However, long before the sale, Vicente faces a collection suit filed by
C.N. Hodges, the latter receiving a favorable decision shortly before the sale. Despite the sale, Sheriff
Dorado still proceeded with the levying and auction of the said land. Hence, Gaspar filed his original
complaint asserting that when judgment was rendered in favor Hodges and against Vicente, the latter was
no longer the owner. Gaspar claimed damages, and other fees for suit.

After defendants filed their answer, but before trial was commenced, plaintiff was permitted by
the CFI to file an amended complaint wherein he expressly prayed for annulment for the sale in favor of
C.N Hodges. The CFI did not award damages but declared the prior sale to Gaspar as valid and the one
executed by the Sheriff in favor of Hodges is null and void. Aggrieved C.N. Hodges appealed the decision
.It argues that the CFI did not have jurisdiction over the cause of action for damages of Gaspar. Moreover,
it also invokes that the amendment of the original action into annulment of sale cannot be granted at the
first place since it is the Justice of the Peace Court that has jurisdiction over the original action filed by
Gaspar.

ISSUE

Whether or not the amendment of the original complaint into an annulment of sale be taken
cognizance by the CFI assuming it has jurisdiction to hear the suit for damages.

RULING

As a rule, there is authority for the proposition that when it appears from the very face of the
complaint that the Court has no jurisdiction over the subject matter of the case, amendment of the
complaint could not be allowed so as to confer jurisdiction over the case in order to act validly therein.
Explaining the principle in another way, this Court ruled that whenever possible the amendment of
defective pleading should be allowed, but that “when it is evident that then court has no jurisdiction over
the person and the subject matter, that the pleading is fatally defective as not to be susceptible of
amendment, or that to permit such amendment would radically alter the theory and the nature of the
action. The rule is always in favor of liberality in construction so that the real matter in dispute may be
submitted to the judgment of the Court. Imperfections of form and technicalities of procedure should be
disregarded unless substantial right would otherwise be prejudiced. In testing the sufficiency of a
complaint neither its caption nor its prayer is decisive. The allegations as a whole must be considered.

4. The Heirs of Reinoso, Sr. vs. CA


654 SCRA 1, 9-10
FACTS

A passenger jeep and truck collided along E. Rodriguez Avenue that resulted in the death of Ruben
Reinoso Sr. The heirs of Reinoso filed a complaint for damages against Tapales and Guballa of the jeep
and truck, respectively. The RTC rendered a decision in favor of the heirs and Tapales then on appeal, the
CA set aside and reversed the decision and dismissed the complaint due to non- payment of docket fees
as laid down in Manchester vs. CA. In addition, the CA ruled that since prescription had already set in,
petitioners could no longer pay the required docket fees.

ISSUE

Whether or not the court had jurisdiction notwithstanding the failure to pay the proper docket
fees within the prescribed period.

HELD

The rule is that payment in full of the docket fees within the prescribed period is mandatory, as
enunciated in the Manchester case. However, two years later, the same rule was relaxed in the Sun Life
Insurance Office case wherein the Supreme Court decreed that were the initiatory pleading is not
accompanied by the payment of the docket fee, the court may allow payment of the fee within a
reasonable period of time, but in no case beyond the applicable prescriptive or reglementary period.
In this case, it cannot be denied that the case was litigated before the RTC and said trial court had
already rendered a decision. While it was at that level, the matter of non- payment of docket fees was
never an issue. It was only the CA which motu proprio dismissed the case for valid reason.

5. Biaco vs. Philippine Countryside Rural Bank


515 SCRA 106

FACTS

Ernesto Biaco, husband of Teresa Biaco, acquired several loans from the Philippine Countryside
Rural Bank from 1996 to 1998. To secure the loans, he mortgaged certain property in favor of the bank,
He was able to pay loans from 1996 to 1997 but he defaulted in loans obtained in 1998 which amounted
to more than a million pesos.

Eventually, the bank filed a complaint for foreclosure against the spouses Biaco. Summons were
issued by the trial judge. The Sheriff served the summons to Ernesto at the latter’s office. No summons
was served to Teresa.

Ernesto did not file a responsive pleading (so did Teresa because she was not aware sans the
summons being served her). The case was heard ex-parte and the spouses were ordered to satisfy debt
and failure to so will authorize the Sheriff to auction the mortgaged property. Eventually, the mortgaged
property was auctioned for P150, 000 which was not sufficient to cover the 1 million debt. Upon motion
by the bank, a notice of levy was issued against the personal properties of Teresa to satisfy the deficiency.

It was only at this point that Teresa learned of the previous ex parte proceedings. She then sought
to have the judgment annulled as she now claims that she was deprived of due process when she did not
receive summons, that it was only her husband who received the summons, that there was extrinsic fraud
because her husband deliberately hid the fact of the foreclosure proceeding.

The bank argued that the foreclosure proceeding is an action quasi in rem, hence Teresa’s
participation is not required so long as the court acquires jurisdiction over the res which is what happened
in the case at bar; that Teresa cannot invoke extrinsic fraud because such situation cannot occur in her
case because she is a co-defendant of Ernesto.

ISSUE

Whether or not the judgment of the trial court should be annulled.

HELD

Yes. It is admitted that the proceeding is a quasi in rem proceeding and that the presence of Teresa
is not required because the trial court was able to acquire jurisdiction over the res (mortgaged property).
However, her constitutional right to due process was violated when she did not receive summons. Teresa
must be personally served summons under Section 6, Rule 14 of the Rules of Court. Even if the action is
quasi in rem, personal service of summons is essential in order to afford her due process. The substituted
service made by the sheriff at her husband’s office cannot be deemed proper service absent any
explanation that efforts had been made to personally served summons upon her but that such efforts
failed. Further, the order of the trial court compelling Teresa to pay off debt using her personal property
is a judgment personam which the court cannot do because it only acquired jurisdiction over the res and
not over the person of Teresa.

6. Banco- Espanol Filipino vs. Palanca


37 PHIL 921, 929

FACTS

Engracio Palanca Tanquinyeng mortgaged various parcels of his lands in Manila to El Banco
Espanol-Filipino as security for the debt he owed to the bank, which was executed on June 16, 1906. After
the execution of the mortgage, he returned to China where he later died on January 29, 1910. Before his
death, however, the bank instituted an action to foreclose the mortgage on the subject properties on
March 31, 1908. Since Tanquinyeng was a non-resident, an order for publication of the foreclosure
proceeding was obtained by the bank pursuant to the Code of Civil Procedure at that time. The court also
directed the clerk of court to send a copy of the summons and complaint to Tanquinyeng. However, it was
not clear or shown if the clerk complied with the order. Nevertheless, after the publication of the
proceeding in the newspaper, the defendant Tanquinyeng did not appear, so judgment was rendered in
favor of the bank by default. Consequently, the court ordered the sale of the property, and during which,
the bank acquired the same.

But, after seven years from the time of the confirmation of the sale, Vicente Palanca, the
administrator of Tanquinyeng's estate, filed a motion to set aside the order of default and judgment
rendered against Tanquinyeng, and to vacate all the proceedings subsequent thereto. Palanca filed his
action on the ground that the court had never acquired jurisdiction over the original defendant
Tanquinyeng or over the subject of the action, hence, the order of default and the judgment rendered
thereon should be declared void.

ISSUE

Whether or not the lower court acquired the necessary jurisdiction over the defendant to enable
it to proceed with the foreclosure of the mortgage.

HELD

Yes, jurisdiction was acquired by the court. The action to foreclose a mortgage is a quasi in rem
proceeding. In this kind of action, an individual is named as a defendant but its object is to subject that
person's interest in a property to a corresponding lien or obligation or an action pertaining to the status
of a person. Moreover, the decision is binding only between the parties. Further, jurisdiction over the
person of the defendant is not essential because the jurisdiction of the court is derived from the power
which it possesses over the property, and the relief granted by the court is limited to such as can be
enforced against the property itself.

7. La Naval Drug Corporation vs. CA


G.R. No. 103200

FACTS
Yao leased a commercial building to La Naval Drug Co. But later they had disagreement on the
rental rate, which was submitted to arbitration. Yao appointed his arbitrator, while La Naval chose its
arbitrator. The confirmation of the appointment of third arbitrator (Tupang) was held in abeyance
because La Naval instructed its lawyer to defer the same until its Board of Directors could convene and
approve Tupang’s appointment. Yao then filed Special Case No. 6024 for Enforcement of Arbitration with
damages. The RTC announced that the two arbitrators chose the third arbitrator. And ordered the parties
to submit their position papers on the issue as to whether or not Yao’s claim for damages may be litigated
upon in the summary proceedings for enforcement of arbitration agreement. In moving for
reconsideration of the said Order. La Naval argued that in Special case no. 6024, the RTC sits as a special
court exercising limited jurisdiction and is not competent to act on Yao’s claim for damages which poses
an issue litigable in an ordinary civil action. But the RTC was not persuaded by La Naval’s submission. It
denied the motion for reconsideration. While the appellate court has agreed with La Naval that, under
Section 6 of RA 876, a court, acting within the limits of its special jurisdiction, may in this case solely
determine the issue whether the litigants should proceed or not to arbitration, it, however, considered
petitioner in estoppel from questioning the competence of the court to additionally hear and decide in
the summary proceedings private respondent’s claim for damages, petitioner having itself filed similarly
its own counterclaim with the court a quo.

ISSUE

Whether or not the court a quo has jurisdiction over the subject matter.

HELD

No. Where the court itself clearly has no jurisdiction over the subject matter or the nature of the
action, the invocation of this defense may be done at any time. It is neither for the courts nor the parties
to violate or disregard that rule, let alone to confer that jurisdiction, this matter being legislative in
character. Barring highly meritorious and exceptional circumstance, such as herein before exemplified,
neither estoppel nor waiver shall apply. The court must then refrain from taking up the claims of the
contending parties for damages, which, upon the other hand, may be ventilated in separate regular
proceedings at an opportune time and venue.

8. EB Villaroso & Partner, Ltd vs. Benito


312 SCRA 65, 73-74

FACTS

Petitioner E.B. Villarosa & Partner Co., Ltd. is a limited partnership with principal office address at
Davao City and with branch offices in Parañaque, Metro Manila and Cagayan de Oro City. Private
respondent, as plaintiff, filed a Complaint for Breach of Contract and Damages against petitioner, as
defendant, before the Regional Trial Court of Makati allegedly for failure of the latter to comply with its
contractual obligation in that, other than a few unfinished low cost houses, there were no substantial
developments therein. Summons, together with the complaint, were served upon the defendant, through
its Branch Manager, but the Sheriff’s Return of Service stated that the summons was duly served “upon
defendant E.B. Villarosa & Partner Co., Ltd. thru its Branch Manager Engr. WENDELL SALBULBERO.
Defendant filed a Special Appearance with Motion to dismiss alleging that summons intended for
defendant” was served upon Engr. Wendell Sabulbero, an employee of defendant at its branch office at
Cagayan de Oro City. Defendant prayed for the dismissal of the complaint on the ground of improper
service of summons and for lack of jurisdiction over the person of the defendant. Defendant contends
that the trial court did not acquire jurisdiction over its person since the summons was improperly served
upon its employee in its branch office at Cagayan de Oro City who is not one of those persons named in
Section 11, Rule 14 of the 1997 Rules of Civil Procedure upon whom service of summons may be made.
Defendant’s argument was not sustained.

ISSUE

Whether or not the trial court acquire jurisdiction over the person of petitioner upon service of
summons on its Branch Manager.

HELD

No. The service of summons upon the branch manager of petitioner at its branch office at Cagayan
de Oro, instead of upon the general manager at its principal office at Davao City is improper.
Consequently, the trial court did not acquire jurisdiction over the person of the petitioner.

The fact that defendant filed a belated motion to dismiss did not operate to confer jurisdiction upon
its person. There is no question that the defendant’s voluntary appearance in the action is equivalent to
service of summons. Before, the rule was that a party may challenge the jurisdiction of the court over his
person by making a special appearance through a motion to dismiss and if in the same motion, the movant
raised other grounds or invoked affirmative relief which necessarily involves the exercise of the
jurisdiction of the court. This doctrine has been abandoned in the case of La Naval Drug Corporation vs.
Court of Appeals, et al., which became the basis of the adoption of a new provision in the former Section
23, which is now Section 20 of Rule 14 of the 1997 Rules. Section 20 now provides that “the inclusion in a
motion to dismiss of other grounds aside from lack of jurisdiction over the person of the defendant shall
not be deemed a voluntary appearance.” The emplacement of this rule clearly underscores the purpose
to enforce strict enforcement of the rules on summons. Accordingly, the filing of a motion to dismiss,
whether or not belatedly filed by the defendant, his authorized agent or attorney, precisely objecting to
the jurisdiction of the court over the person of the defendant can by no means be deemed a submission
to the jurisdiction of the court. There being no proper service of summons, the trial court cannot take
cognizance of a case for lack of jurisdiction over the person of the defendant. Any proceeding undertaken
by the trial court will consequently be null and void.

9. Manotoc vs. CA
499 SCRA 21, 34-35

FACTS

Based on paragraph two of the Complaint, the trial court issued Summons addressed to petitioner
at Alexandra Homes, E2 Room 104, at No. 29 Meralco Avenue, Pasig City.
The Summons and a copy of the Complaint were allegedly served upon Macky de la Cruz, an alleged
caretaker of petitioner at the condominium unit mentioned earlier. When petitioner failed to file her
Answer, the trial court declared her in default. Petitioner, filed a Motion to Dismiss on the ground of lack
of jurisdiction of the trial court over her person due to an invalid substituted service of summons.
Trial court rejected Manotoc’s Motion to Dismiss and relied on the presumption that the sheriff’s
substituted service was made in the regular performance of official duty, and such presumption stood in
the absence of proof to the contrary.

ISSUE

Whether or not the substituted service was valid.

HELD

No. Requirements for Substituted Service, Section 8 of Rule 14 of the old Revised Rules of Court
which applies to this case can be broken down to the following requirements:

(1) Impossibility of Prompt Personal Service


(2) Specific Details in the Return
(3) A Person of Suitable Age and Discretion
(4) A Competent Person in Charge

A meticulous scrutiny of the aforementioned Return readily reveals the absence of material data on
the serious efforts to serve the Summons on petitioner Manotoc in person. There is no clear valid reason
cited in the Return why those efforts proved inadequate, to reach the conclusion that personal service
has become impossible or unattainable outside the generally couched phrases of “on many occasions
several attempts were made to serve the summons . . . personally,” “at reasonable hours during the day,”
and “to no avail for the reason that the said defendant is usually out of her place and/or residence or
premises. Before resorting to substituted service, a plaintiff must demonstrate an effort in good faith to
locate the defendant through more direct means. Respondent Trajano failed to demonstrate that there
was strict compliance with the requirements of the then Section 8, Rule 14 (now Section 7, Rule 14 of the
1997 Rules of Civil Procedure), the proceedings held before the trial court perforce must be annulled.

10. Robinsons vs. Miralles


510 SCRA 678

FACTS

Celita Miralles, respondent, filed with the said court a complaint for sum of money against
Remelita Robinson, petitioner. Summons was served on petitioner at her given address. However, per
return of service of Sheriff Maximo Potente dated March 5, 2001, petitioner no longer resides at such
address. On July 20, 2001, the trial court issued an alias summons to be served at No. 19 Baguio St.,
Alabang Hills, Muntinlupa City, petitioner’s new address. Again, the summons could not be served on
petitioner because she instructed the security guard not to let anyone in.

Eventually, respondent filed a motion to declare petitioner in default for her failure to file an
answer seasonably despite service of summons. The trial court granted respondent’s motion declaring
petitioner in default and allowing respondent to present her evidence ex parte. Judgment was hereby
rendered in favor of the plaintiff and against defendant. Petitioner filed with the trial court a petition for
relief from the judgment by default. She claimed that summons was improperly served upon her, thus,
the trial court never acquired jurisdiction over her and that all its proceedings are void.

ISSUE

Whether the trial court correctly ruled that a substituted service of summons upon petitioner has
been validly effected.

HELD

Yes. The trial court was correct when it ruled that there was a valid service of summons. Under our
procedural rules, personal service is generally preferred over substituted service, the latter mode of
service being a method extraordinary in character. For substituted service to be justified, the following
circumstances must be clearly established: (a) personal service of summons within a reasonable time was
impossible; (b) efforts were exerted to locate the party; and (c) the summons was served upon a person
of sufficient age and discretion residing at the party’s residence or upon a competent person in charge of
the party’s office or place of business. Failure to do so would invalidate all subsequent proceedings on
jurisdictional grounds. We have ruled that the statutory requirements of substituted service must be
followed strictly, faithfully, and fully and any substituted service other than that authorized by the Rules
is considered ineffective. However, we frown upon an overly strict application of the Rules. It is the spirit,
rather than the letter of the procedural rules, that governs. In his Return, Sheriff Potente declared that he
was refused entry by the security guard in Alabang Hills twice. The latter informed him that petitioner
prohibits him from allowing anybody to proceed to her residence whenever she is out. Obviously, it was
impossible for the sheriff to effect person al or substituted service of summons upon petitioner. We note
that she failed to controvert the sheriff’s declaration. Nor did she deny having received the summons
through the security guard. Considering her strict instruction to the security guard, she must bear its
consequences. Thus, we agree with the trial court that summons has been properly served upon
petitioner and that it has acquired jurisdiction over her.

11. Montalban vs. Maximo


22 SCRA 1070, 1080

FACTS

On August 15, 1958, Plaintiffs commenced suit against Fr. Gerardo Maximo. Plaintiffs' cause of
action for damages sprang from a motor vehicle accident. Paul Hershell Montalban, son of plaintiffs,
suffered injuries. On this same day that the complaint was filed, summons was served on defendant Fr.
Gerardo Maximo at the parish church of Concepcion, Malabon, Rizal, through Fr. Arsenio Bautista - a
priest in the same parish church.

Fr. Arsenio Bautista sent a letter (dated August 21) to Macario M. Ofilada, Clerk of Court of the
Court of First Instance of Manila, informing him that defendant Fr. Gerardo Maximo left for Europe on
August 7, and "will be back on the first week of November." The lower court declared defendant in default,
on plaintiffs' motion of September 13,1958.Upon plaintiffs' evidence, the court rendered judgment
sentencing defendant to pay damages to the plaintiffs .Plaintiffs themselves wrote defendant Fr. Gerardo
Maximo, at the Malabon Catholic Church, informing the latter of the lower court's decision. Defendant,
answered the foregoing letter expressing regret that he could not comply with plaintiffs' request, because
he (defendant) was not aware of the said civil case, and that, in the criminal action arising out of the
same incident, said defendant was acquitted by the Municipal Court of Manila. Deputy Sheriff Liberato C.
Manalo of Rizal notified defendant of the issuance of the writ of execution, and demanded payment of
the amount set forth therein. The Sheriff's return to the writ shows that in response to such demand,
defendant alleged that he was then "financially hardup"4 and that the Sheriff found no property that
could be subject to execution. An alias writ of execution was issued. Copy thereof was received by
defendant. The Deputy Sheriff attached and levied on a residential house located in Caloocan City and
purportedly belonging to defendant. The Deputy Sheriff attached and levied on a residential house
located in Caloocan City and purportedly belonging to defendant. Two years and two months after
defendant admittedly learned of the lower court's decision from counsel for plaintiffs herein, said
defendant filed a verified motion in the same case praying for the annulment of the entire proceedings.
His ground is this: Summons was not duly served upon him "as provided under Sec. 7, Rule 7 of the Rules
of Court;" accordingly, the lower court "did not acquire jurisdiction over his person"; and "the trial and
decision by default" are "null and void. "The court denied this motion and the defendant's move to
reconsider was rejected by the court.

ISSUES
Whether or not there was a valid service of summons over the defendant
Whether or not the lower court acquired jurisdiction over the person of the defendant.

HELD

A question of transcendental importance which necessarily involves an inquiry into procedural due
process is whether summons in a suit in personam against a resident of the Philippines temporarily absent
therefrom may be validly effected by substituted service under Section 8, Rule 14, of the Rules of Court.
A head-on collision of views becomes inevitable considering the diametrically opposing positions taken
by plaintiffs, on the one hand, and defendant, on the other. For, plaintiffs make the point that even with
defendant temporarily abroad, substituted service is valid under Section 8 by leaving a copy of the
summons "at the defendant's dwelling house or residence with some person of suitable age
and discretion then residing therein.” The jurisdiction of courts to render judgments in personam was
grounded on their de facto power over defendant's person. Jurisdiction was based on the power to seize
and imprison defendant. If a defendant was absent from the territory, the fact that he was a citizen would
not enable the court's officers to seize him and service could not represent this power. Hence, his
presence within the territorial jurisdiction was a prerequisite to the rendition of a judgment personally
binding against him .There should be no doubt, therefore, that in suits in personam, courts have
jurisdiction over residents temporarily out of the country.

12. PCIB vs. Alejandro


533 vs. 738, 752

FACTS
Petitioner filed against respondent Alejandro a complaint for sum of money with prayer for the
issuance of a writ preliminary attachment. Said complaint alleged that respondent, a resident of Hon Kong,
executed in favor of petitioner a promissory note obligating himself to pay P249, 828, 588.90 plus interest.

In view of the fluctuations in foreign exchange rates which resulted in the insufficiency of the
deposits assigned by respondent as security for the loan, petitioner requested the latter to put up
additional security for the loan. In praying for the issuance of a writ of preliminary attachment, petitioner
alleged that (1) respondent fraudulently withdrew his unassigned deposits notwithstanding his verbal
promise to PCIB Assistant not to withdraw the same prior to their assignment as a security loan; and (2)
that respondent is not a resident of the Philippines.

The trial court granted the application and issued the writ ex parte. Subsequently, respondent
filed a motion to quash the writ contending that the withdrawal of his unassigned deposits was not a
fraudulent as it was approved by petitioner. He also allege that petitioner knew that he maintains a
permanent residence and an office address here in the Philippines. In both address, petitioner regularly
communicated with him through its representatives. The trial court issued an order quashing the writ.
With the denial of petitioner’s motion for reconsideration, it elevated to the CA via a petition for certiorari.
The CA dismissed the case.

ISSUE

Whether or not the issuance of writ of attachment is proper.

HELD

No. In the instant case, it must be stressed that the writ was issued by the trial court mainly on
the representation of petitioner that respondent is not a resident of the Philippines.

In actions in personam against residents temporarily out of the Philippines, the court need not
always attach the defendant’s property in order to have authority to try the case. Where the plaintiff
seeks to attach the defendant’s proper and to report to the concomitant service of summons by
publication, the same must be with prior leave, precisely because, if the sole purpose of the attachment
is for the court to acquire jurisdiction, the latter must determine whether from the allegations in the
complaint, substituted service will suffice, or whether there is a need to attach the property of the
defendant and resort to service of summons by publication in order for the court to acquire jurisdiction
over the case and to comply with the requirements of due process. It is clear from the foregoing that even
on the allegation that respondent is a resident temporarily out of the Philippines, petitioner is still not
entitled to a writ of attachment because the trial court could not acquire jurisdiction over the case by
substituted service instead of attaching the property of the defendant.

13. Vlason Enterprises Corporation vs. CA


310 SCRA 256, 257- 258

FACTS
Ruling that the judgment sought to be reviewed has become final and executory, the Court of
Appeals ordered the Regional Trial Court to take appropriate action on the urgent ex parte motion for
issuance of a writ of execution filed by private respondent. Pursuant thereto, the Regional Trial Court of
Manila issued a writ of possession thus placing private respondent in possession of petitioner's barge
Lawin. Hence, this petition.

The case filed by private respondent with the trial court involved multiple defendants. Several
defendants entered into a compromise agreement with private respondent. A compromise agreement is
immediately final and executory. As to these defendants therefore, the trial court Decision had become
final. Nevertheless, said decision cannot be said to have attained finality as to petitioner, which was not a
party to the compromise. Moreover, petitioner filed a Motion for Reconsideration two days before the
lapse of the reglementary period to appeal. Execution shall issue as matter of right upon the expiration of
the period to appeal if no appeal has been duly perfected.

ISSUE

Whether or not the trial court acquired jurisdiction over the petitioner in this case.

HELD

No. The sheriff's return showed that the president of Petitioner Corporation was served summons
through his secretary. A summons addressed to a corporation and served on the secretary of the President
binds that corporation. The secretary however, should be an employee of the corporation sought to be
summoned. In the case at bar, the secretary was not an employee of petitioner but of Vlasons Shipping,
Inc.

Acting under the impression that petitioner had been placed under its jurisdiction, the trial court
dispensed with the service on petitioner of new summons for the subsequent amendments of the
petition. But the first service of summons on petitioner was invalid. Thus, the trial court never acquired
jurisdiction over the petitioner. Not having been validly served summons, it would be legally impossible
to declare petitioner to be in default. A default judgment cannot affect the rights of a party who was never
declared in default.

14. Financial Building Corporation vs. Forbes Park Association


338 SCRA 346, 354

FACTS

The USSR owned a lot in Forbes Park and it engaged the services of Financial Building for the
construction of a multi-level and staff apartment building. Due to the USSR’s representation that it would
be building a residence for its Trade Representative, Forbes Park authorized its construction and work
began shortly thereafter. However, Financial Building submitted to the Makati City Government a second
building plan for the construction of a multi-level apartment building, which was deferent from the first
plan for the construction of a residential building submitted to Forbes Park. Forbes Park discovered the
second plan and it enjoined further construction work. Forbes Park suspended all permits of entry for the
personnel and materials of financial building in the said construction site.

Financial building filed in the Regional Trial Court a complaint for Injunction and Damages with a
prayer for preliminary Injunction against Forbes Park and in turn filed a motion to dismiss on the ground
that Financial Building had no cause of action because it was not the real party in interest. Forbes won in
this case thus sought to vindicate its rights. Trial court rendered a decision in favor of Forbes Park.

ISSUE

Whether or not the alleged claims and causes of action therein are barred by prior judgment
and/or deemed waived for its failure to interpose the same as compulsory counterclaims in the earlier
case.

HELD

Yes. A compulsory counterclaim is one which arises out of or is necessarily connected with the
transaction or occurrence that is the subject matter of the opposing party’s claim. If it is within the
jurisdiction of the court and it does not require for its adjudication the presence of third parties over
whom the court cannot acquire jurisdiction, such compulsory counterclaim is barred if it is not set up in
the action filed by the opposing party.

Thus a compulsory counterclaim cannot be the subject of a separate action but it should instead
be asserted in the same suit involving the same transaction or occurrence which gave rise to it. Since
Forbes Park filed a motion to dismiss, its existing compulsory counterclaim at that time is now barred. A
compulsory counterclaim is auxiliary to the proceeding in the original suit and serves its jurisdictional
support therefrom. A counterclaim presupposes the existence of a claim against the party filing the
counterclaim. Hence, where there is no claim against the counterclaimant, the counterclaim is improper
and it must be dismissed, more so where the complaint is dismissed at the instance of the
counterclaimant.

15. Pinga vs. Heirs of Santiago


494 SCRA 393, 413

FACTS

Petitioner Eduardo Pinga was named as one of two defendants in a complaint for injunction filed
by respondent Heirs of German Santiago, represented by Fernando Santiago. The Complaint alleged that
petitioner and co-defendant Vicente Saavedra had been unlawfully entering the coco lands of the
respondent, cutting wood and bamboos and harvesting the fruits of the coconut trees.
Petitioner and his co-defendant disputed respondents' ownership of the properties in question,
asserting that petitioner's father, Edmundo Pinga, from whom defendants derived their interest in the
properties, had been in possession thereof since the 1930s. They alleged that as far back as 1968,
respondents had already been ordered ejected from the properties after a complaint for forcible entry
was filed by the heirs of Edmundo Pinga.

Respondents, as plaintiffs, had failed to present their evidence and failed to prosecute the case
for an unreasonable length of time. On that ground, the complaint was dismissed. At the same time, the
RTC allowed defendants "to present their evidence ex-parte was not in accord with established
jurisprudence. They cited cases, particularly City of Manila v. Ruymann and Domingo v. Santos, which
noted those instances in which a counterclaim could not remain pending for independent adjudication.

ISSUE

Whether the dismissal of the complaint necessarily carries the dismissal of the compulsory
counterclaim.

HELD

The constitutional faculty of the Court to promulgate rules of practice and procedure necessarily
carries the power to overturn judicial precedents on points of remedial law through the amendment of
the Rules of Court. One of the notable changes introduced in the 1997 Rules of Civil Procedure is the
explicit proviso that if a complaint is dismissed due to fault of the plaintiff, such dismissal is "without
prejudice to the right of the defendant to prosecute his counterclaim in the same or in a separate action."
The innovation was instituted in spite of previous jurisprudence holding that the fact of the dismissal of
the complaint was sufficient to justify the dismissal as well of the compulsory counterclaim.

In granting this petition, the Court recognizes that the former jurisprudential rule can no longer stand
in light of Section 3, Rule 17 of the 1997 Rules of Court.

We hold that under Section 3, Rule 17 of the 1997 Rules of Civil Procedure, the dismissal of the
complaint due to the fault of plaintiff does not necessarily carry with it the dismissal of the counterclaim,
compulsory or otherwise. In fact, the dismissal of the complaint is without prejudice to the right of
defendants to prosecute the counterclaim.

The doctrine that the complaint may not be dismissed if the counterclaim cannot be independently
adjudicated is not available to, and was not intended for the benefit of, a plaintiff who prevents or delays
the prosecution of his own complaint.

16. Pascual vs. Pascual


475 SCRA 271, 275

FACTS

Petitioner Dante, a permanent resident of USA, appointed Sagarao as an attorney-in-fact by an


SPA. Pursuant to such SPA, Sagario filed a complaint entitled “Dante M. Pascual vs. Marilou M. Pascual
and Register of Deeds. Defendants for annulment of TCT and Deed of Absolute Sale of Registered Land
and/or reconveyance with damages. Respondent then filed a motion to dismiss on the ground of non-
compliance with the requirement under Section 412 contending that there is no showing that the dispute
was referred to the barangay court before the case was filed in court. RTC granted the motion to dismiss
ruling that when real property or any interest therein is involved, the dispute shall be filed before the
barangay where the property is located regardless of the residence of the parties. Hence, this petition
where petitioner Dante argues that he, not his attorney-in-fact Sagario is the real party-in-interest and
since he actually resides abroad, the lupon would have no jurisdiction to pass upon the dispute involving
real property. Respondent, on the other hand argued that it is Sagario who is considered as the real party-
in-interest, and that since Sagario is a resident of the same barangay as of hers, the matter shall be brought
under the jurisdiction of the lupon.

ISSUE

Whether or not the lupon has authority to act upon the case and whether or not the Katarungang
Pambarangay Law applies.

HELD

No. Section 408 provides that “the lupon of each barangay shall have authority to bring together
the parties actually residing in the same municipality for amicable settlement of all disputes.”

In the case of Tavora vs. Veloso, Supreme Court held that where the parties are nor actual
residents in the same city or municipality or adjoining barangay, there is no requirement for them to
submit their dispute to the lupon as provided for in Section 2 of PD 1508. In fine, since the plaintiff herein
petitioner, the real party in interest, is not an actual resident of the barangay where the defendant herein
respondent resides, the local lupon has no jurisdiction over the dispute, hence, prior referral to it for
conciliation is not a pre-condition to its filing in court.

17. Candido vs. Macapagal


221 SCRA 328, 332

FACTS
This is a petition for certiorari to annul and set aside of the trial court dismissing the complaint of
the petitioners against private respondent on the ground of lack of jurisdiction for petitioners’ failure to
comply with the mandatory barangay conciliation process required by PD 1508, otherwise known as the
Katarungang Pambarangay Law. Respondents who represented themselves to be the sole heirs of the late
Candido executed a deed of extrajudicial settlement of estate with sale three covering parcels of land
owned by the latter and sold to private respondent in whose name said properties are now registered.
Petitioners instituted an action with the RTC of Bulacan to annul the Deed of extrajudicial settlement of
estate with sale, to cancel TCT issued in the name of Candido. Private respondents then filed a motion to
dismiss on the ground that petitioner failed to comply with the mandatory conciliation process. RTC ruling
dismissed the case for lack of prior referral of the dispute before the Katarungang Pambarangay. Motion
for Reconsideration were denied. Hence, petitioners filed file this petition alleging grave abuse of
discretion on the part of respondent judge dismissing private respondents’ complaint.

ISSUE
Whether or not 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 respondents reside in the same municipality does not justify compulsory
conciliation where the other co-defendants reside in barangays of different municipalities, cities and
provinces. Petitioners can immediately file the case in court,

18. ZEPADA vs. CHINA BANKING CORPORATION


504 SCRA 126, 134

FACTS

Petitioners Zepada obtained a loan with China Bank secured by a real estate mortgage. Petitioners
subsequently encountered difficulties in paying their loan obligations hence they requested for
restructuring which was allegedly granted by China bank. Hence they were surprised when respondent
bank extrajudicially foreclosed the subject property where it emerged as the highest bidder. Respondent
bank was issued a Provisional Certificate of Sale and upon petitioners failure to redeem the property
ownership was consolidated in its favor.

Spouses Zepada filed a complaint for nullification of foreclosure proceedings and loan documents
with damages against respondent. According to them the foreclosure proceedings should be annulled for
failure to comply with the posting and publication requirements. They also claimed that they signed the
real estate mortgage and Promissory note in blank and were not given a copy and the interest rates
thereon were unilaterally filed by the respondent bank’s motion to dismiss was denied. It filed an answer
with a special affirmative defenses and counterclaim. It also filed a set of written interrogatories. The trial
court denied China bank’s affirmative defenses for lack of merit as well as its motion to expunge the
complaints for being premature. Aggrieved respondent bank filed a petition for certiorari under Rule 65
which was granted by the CA. It was held that the trial court gravely abused discretion, ruling that
compelling reasons warrant a dismissal of petitioners’ complaint because they acted in bad faith when
they ignored the hearings set by the trial court to determine the veracity of China bank’s affirmative
defenses. They failed to answer China Bank’s written interrogatories and complaint state no cause of
action

ISSUE
Whether the complaint should be dismissed for failure of petitioners to answer respondent’s
written interrogatories as provided for in Section 3(c) Rule 29 of the Rules of Court.

HELD

No. The consequences enumerated in Section 3(c) of Rule 29 would only apply where the party
upon whom the written interrogatories is served, refuses to answer a particular question in the set of
written interrogatories and despite an order compelling him to answer the particular question still refuses
to obey the order.

In the instant case, petitioners, refused to answer the whole set of written interrogatories, not just a
particular question. Clearly then, the respondent bank should have filed a motion based on Section 5 and
not Section 3(c) of Rule 29.

19. PNB vs. Bondoc


14 SCRA 770, 772

FACTS

In the first civil case, Plaintiff- appellant PNB, obtained a judgment from the CFI Manila on June
29, 1949 against Joaquin Bondoc for an unpaid promissory note with the amount of P10, 289.60 plus
interest and attorney’s fees. However, the judgment was not executed. After five years and upon the
instance of PNB, the judgment was revived on February 20, 1957, being the second civil case. The CFI
Manila condemned Bondoc to pay PNB the amount of P16, 841.64 plus 7% interest. However, the
judgment still was not enforced during the five years after that time.

Upon the third civil case, on June 7, 1962. PNB instituted in the CFI Manila the enforcement of the
judgment rendered under the second civil case. However, the defendant filed a motion to dismiss, to
revive the judgment on the ground of prescription and lack of cause of action.

The lower court ruled that the right to revive the judgment has already prescribed that more than
10 years has lapsed since it was first rendered on June 29, 1949. It also ruled that the NCC does not provide
for the revival of a revived judgment.

ISSUE:

Whether or not defendants’ contention that 10 years has already elapsed since the final judgment
became final hence, the action to enforce the judgment is already barred by statute of limitations is on
point.
HELD

A judgment is revived only when the same cannot be enforced by motion which is after five years
from the time it becomes final. A revived judgment can be enforced by motion within five years from its
finality.

The Court held that the defendant’s contention is inconsistent because reviving a previous
judgment becomes a new and different judgment. The Court also added that there are three cause of
actions in the three civil cases and following the provision of Article 1144 (3), it states that the right to
enforce a judgment prescribes in ten years counted from the date the judgment becomes final. In the case
at bar, the action upon such judgment must be brought within 10 years from 1957 and 1967. The case
was instituted in court on June 7, 1962, which is within the prescriptive period.