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REMEDIAL LAW CASE DIGEST

RULE 4

VENUE

#20

Briones v ca – a restrictive stipulation is not binding when the validity of the contract is assailed.

Facts:

Briones filed a complaint before RTC manila, for nullity of contracts, and damages against cash asia,
alleging that he is the owner of the subject property, and that his sister inform him that his property had
been foreclosed and a writ of possession had already been issued in favor of cash asia. Cash asia filed a
motion to dismiss on the ground of improper venue but was denied. On appeal, the CA annulled the RTC
orders and accordingly dismissed briones’s complaint without prejudice to the filing the same before the
proper court in Makati. Brianes moved for reconsideration, which was denied, hence, this petition.

Issue:

WON the CA gravely abused its discretion in ordering the outright dismissal of briones’s complaint on
the ground of improper venue

Held:

The petition is meritorious

SC says that the exception to the general rule under Rule 4 on venue is thru a written instrument, may
either introduce another venue where action arising from such instrument may be filed, or restrict the
filing of said actions in a certain exclusive venue as stated in the jurisprudence in Legaspi v republic.

A complaint directly assailing the validity of the written instrument itself should not be bound by the
exclusive venue stipulation contained therein and should be filed in accordance with the general rules
on venue.

In this case, the venue stipulation found in the subject contract is indeed restrictive in nature, effectively
limiting the venue of the actions arising therefrom to the courts of Makati. However, given this
circumstance, Briones cannot be expected to comply with the aforesaid venue stipulation, as his
compliance therewith would mean an implicit recognition of their validity. Hence, pursuant to the
general rules on venue, Briones properly filed his complaint before a court in the city of manila where
the subject property is located.
#21

Sweet line, inc. v teves – venue in a contract of adhesion.

Facts:

Sweet line is a shipping company which transports inter-island passengers. Tiro and atty. Tandog bought
tickets from sweet line and were bound to Bohol. When they were about to board M/S sweet hope
which was bound to tagbiliran they were advised to relocate and board M/S sweet town. However, the
said vessel was already full and they were forced to agree to hide at the cargo section to avoid
inspection of the officers of the Philippine coastguard. Private respondents alleged that they were,
during the trip," "exposed to the scorching heat of the sun and the dust coming from the ship's cargo of
corn grits.” Further, the tickets they bought at Cagayan de Oro City for Tagbilaran were not honored and
they were constrained to pay for other tickets. Thus, tando and tiro filed a complaint against sweet lines
for damages and breach of contract of carriage in the CFI of misamis oriental.

Issue:

WON the venue of the action should be what stated on a contract of adhesion

Held:

No, the actuations of sweet lines are contrary to public policy. Thus, the venue was not improperly laid
in the CFI of misamis oriental.

Although there was a valid contract of carriage entered into by the parties it cannot also be denied that
the conditions printed at the back of the passage tickets are contract of adhesion. The validity and/or
enforceability of which will have to be determined by the peculiar circumstances obtained in each case
and the nature of the condition or terms sought to be enforced. By the peculiar circumstances under
which contracts of adhesion are entered into, certain guidelines in the determination of their validity
and/or enforceability have been formulated in order to insure that justice and fair play characterize the
relationship of the contracting parties.

The condition on the ticket is subversive of public policy on transfers of venue of action. For, although
venue may be changed or transferred from one province to another by agreement of the parties in
writing pursuant to Rule 4, section 3, of the rules of court, such agreement will not be held valid where it
practically negated the action of the claimants, such as the private respondent here. The philosophy
underlying the provision on transfer of venue of actions is the convenience of the plaintiffs as well as his
witnesses and to promote the ends of justice.
#22

Rigor v consolidated orix leasing and finance corp. – complementary-contracts-construed-together rule

Facts:

Petitioners obtained loan from private respondent evidence by a promissory note of the petitioner,
which also provides that default in paying any installment renders the entire unpaid amount due and
payable. To secure payment of the loan. Petitioners executed in favor of the private respondent a deed
of chattel mortgage over two dump trucks. Petitioners failed to pay several installment so respondent
sought to foreclose the chattel mortgate at RTC Dagupan.

Issue:

WON venue was properly laid

Held:

The petition is bereft of merit. The court finds that venue was properly laid.

The chattel mortgage constituted over the two dump trucks is an accessory contract to the loan
obligation as embodied in the promissory note. The chattel mortgage cannot exist as an independent
contract since its consideration is the same as that of the principal contract. A principal obligation is an
indispensable condition for the existence of an accessory contract. Indeed, contracts may be classified
according to the degree of dependence. Loans, sales or leases are classified as principal contracts, while
pledges, mortgages and suretyships are classified as accessory contract because their existence is
dependent upon the principal obligation they guarantee or secure.

This rule was reiterated in velasquez vs ca as the “complementary contracts construed together”
doctrine. The Court explained that the doctrine – finds support in the principle that the surety contract
is merely an accessory contract and must be interpreted with its principal contract, which XXX was the
loan agreement. This doctrine closely adheres to the spirit of art. 1374 of the civil code.

Applying the doctrine to the instant case, the court cannot sustain petitioners’ contentions. The
promissory note and the deed of chattel mortgage must be construed together.
#23

BPI Family savings bank v yujuico GR no. 175796 – distinction of real and personal action

Facts:

The city of manila filed a complaint against the respondents for the expropriation of five parcels of land
located in Tondo, and registered in the name of respondent. RTC rendered its judgement declaring the
parcels of lad expropriated for public use and the judgment became final and executory. Hence, the
petitioner decided to extrajudicially foreclose the mortgage constituted on the two parcels of land
subject of the respondents’ loan to Citytrust Banking Corporation.

Petitioner sued the respondents to recover deficiency. Respondent moved to dismiss the complaint on
several ground, one of which is improper venue but was denied by Makati RTC for lack of merit.

Issue:

Whether or not venue was improperly laid?

Held:

SC says that it is basic that the venue of an action depends on whether it is real or a personal action. The
real action is one that affects title to or possession of real property, or an interest therein. The real
action is to be commenced and tried in the proper court having jurisdiction over the area wherein the
real property involved, or a portion thereof, is situated, which explains why the action is also referred to
as a local action. In contract, all other action are considered as personal actions. The venue of a personal
action is the place where the plaintiff or any of the principal plaintiffs reside, or where the defendant or
any of the principal defendants resides, or in the case of a non-resident defendant where he may be
found, at the election of the plaintiff, for which reason the action is considered a transitory one. The SC
grants the petition for review on certiorari; reverse and set aside the decision and reinstate the orders
of the RTC Makati and order the respondents to pay the cost of suit.

BP 129

#24

Ignacio v cfi of Bulacan 42 scra 89,95 – tenancy as a defense.


Facts:

The case is for ejectment involving a landholding which consists of two hectares of land owned by one
Felizardo Lipana and tenanted by Alipio Marcelo. Two cases involving the land were pending at the time
of the death of the tenant which was substituted by the surviving son and wife of the tenant.
Subsequently a third case has been file but was resolved by a compromised agreement but another case
was filed by magdalina praying tenancy, however lipana moved to file for an ejectment through forcible
entry where the court granted and ordering magdalina to desist from plowing and cultivating and also
vacate but was violated by magdalina so she was held in contempt. Magdalina then filed for petition for
certiorari and in forma pauperis questioning the jurisdiction of the MTC.

Issue:

WON the court has jurisdiction over the case?

Held:

No. according to the SC while it is true that the jurisdiction of the court in a suit for ejectment or forcible
entry is determined by the allegations in the complaint, yet where tenancy is averred as a defense and,
upon hearing, is shown to be the real issue, the court should dismiss the case for want of jurisdiction. It
was therefore incorrect for respondent court to conclude from the decision and writ of execution in the
CAR cases that Lipana has actual possession, as against Magdalena, over the landholding prior to the
alleged unlawful detainer and/or forcible entry. The CAR did not adjudicate the right to either of them
nor did it resolve the question as to who had actual possession of the landholding after the death of
alipio. What it did, in order to prevent further trouble between maximo and Magdalena was to place the
landing under the administration of the agricultural extension officer, with instruction that maximo and
Magdalena should be given preference in working on the land as laborers.

The writ prayed for is granted and decision of respondent court is set aside. No costs.

#25

Tijam v sibonghanoy – estoppel by laches.

Facts:
Tijam file a case to recover sum of money with legal interest against sibonghanoy. As prayed for in the
complaint, a writ of attachment was issued by the court against defendants’ properties, but the same
was soon dissolved upon the filing of a counter-bond by defendants and the Manila Surety and Fidelity
Co., Inc. hereinafter referred to as the Surety. The court rendered judgment in favor of the plaintiffs and
the same become final and executory, upon motion of the latter, the Court issued a writ of execution
against the defendants, which was returned unsatisfied. The plaintiffs moved for the issuance of writ of
execution against the Surety’s bond which they filed a written opposition. The court denied this motion
on the ground solely that no previous demand has been made on the Surety for the satisfaction of the
judgment, the plaintiffs filed a second motion for execution against the counterbond. On the date set
for the hearing thereon, the court, upon motion of the Surety’s counsel, granted the latter a period of
five days within which to answer the motion. Upon its failure to file such answer, the Court granted the
motion for execution and the corresponding writ was issued.

Surety tried to move to quash the writ but was denied by the court. Surety appealed to the Court of
Appeals from such order of denial and from the one denying its motion for reconsideration.

Issue:

WON there is a lack of jurisdiction?

Held:

The SC are of the opinion that the Surety is now barred by laches from invoking this plea at this late hour
for the purpose of annulling everything done heretofore in the case with its active participation. The
action was commence on July 19, 1948, that is almost fifteen years before the Surety filed its motion to
dismiss on January 12, 1963 raising the question of lack of jurisdiction for the first time.

It must be remembered that although the action, originally, was exclusively against the Sibonghanoy
spouses the Surety became a quasi-party therein since July 31, 1948 when it filed a counter-bond for
the dissolution of the writ of attachment issued by the court of origin. Since then, it acquired certain
rights and assumed specific obligations in connection with the pending case, in accordance with section
12 and 17, Rule 57, Rules of Court.

A party may be estopped or barred from raising a question in different ways and for different reasons.
Thus we speak of estoppel in pais, or estoppel by deed or by record, and of estoppel by laches.

Laches, in general sense is failure or neglect, for an unreasonable and unexplained length of time, to do
that which, by exercising due diligence, could or should have done earlier; it is negligence or omission to
assert a right within a reasonable time, warranting a presumption that the party entitled to assert it
either has abandoned it or declined to assert it.

It has been held that after voluntarily submitting a cause and encountering an adverse decision on the
merits, it is too late for the loser to question the jurisdiction or power of the court. The court had said
that it is not right for a party who has affirmed and invoked jurisdiction of a court in a particular matter
to secure an affirmative relief, to afterwards deny the same jurisdiction to escape a penalty.

#26
La naval drug corp v ca – pleading additional defenses aside from lack of jurisdiction over the person of
defendant

Facts:

Respondent Yao was the owner of a commercial building, a portion which is leased to herein petitioner.
However, during the renewal of the contract of lease, the two disagreed on the rental rate, and to
resolve the controversy, they submitted their disagreement to arbitration as per there agreement. Two
arbitrators has been appointed by the parties while the third was held in abeyance because La Naval
Drug instructed its arbitrator to defer the same until its Board of Directors could convene and approved
Tupang’s appointment. This as theorized by the respondent as dilatory tactics, hence, he prayed that a
summary hearing be conducted and direct the 2 arbitrators to proceed with the arbitration. The
respondent court announced that the two arbitrators chose Narciso as the third arbitrator and ordered
the parties to submit their position papers on the issue to whether or not respondent Yao’s claim for
damages may be litigated upon in the summary proceeding for enforcement of arbitration agreement.
In moving for reconsideration of said order, petitioner argued that in special case no 6024, the
respondent court sits as a special court exercising limited jurisdiction and in not competent to act on
respondent Yao's claim for damages, which poses an issue litigable in an ordinary civil action. However,
respondent court was not persuaded by petitioner's submission, hence, it denied the motion for
reconsideration. reconsideration. While the appellate court has agreed with petitioner that, under
Section 6 of Republic Act No. 876, a court, acting within the limits of its its special jurisdiction, may in
this case solely determine the issue of 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, it
having itself filed similarly its own counterclaim with the court a quo.

Issue:

WON the court has jurisdiction over the person of the defendant.

Held:

The SC said that the lack of jurisdiction over the person of the defendant may be waived either expressly
or impliedly. When a defendant voluntarily appears, he is deemed to have submitted himself to the
jurisdiction of the court. If he so wishes not to waive this defense, he must do so seasonably by motion
for the purpose of objecting to the jurisdiction of the court; otherwise, he shall be deemed to have
submitted himself to that jurisdiction. The decisions promulgated heretofore by this Court would
likewise seemingly apply estoppel to bar the defendant from pursuing that defense by alleging in his
answer any other issue for dismissing the action. Under Section 2, Rule 9, of the rules of court, defenses
and objections not pleaded either in a motion to dismiss or in an answer, except for the failure to state a
cause of action, are deemed waived. We take this to mean that a defendant may, in fact, feel enjoined
to set up, along with his objection to the court’s jurisdiction over his person, all other possible defenses.
It thus appears that it is not the invocation of any of such defenses, but the failure to so raise them, that
can result in waiver or estoppel. By defenses, of course, we refer to the grounds provided for in Rule 16
of the Rules of court that must be asserted in a motion to dismiss or by way of affirmative defenses in an
answer.

#27

Gomez v montalban – meaning of ‘interest” in IDALC

Facts:

Gomez filed a complaint with the RTC for sum of money, damages and payment of attorney’s
fees against Montalban. The complaint alleged that, Montalban obtained a loan from Gomez
with a voluntary proposal on her part to pay 15% interest per month. Upon receipt of the
proceed of the loan, montalban issued in favor of Gomez, as security, a postdated check,
covering the principal loan and interest charges for one month. When the check became due,
defaulted to pay her loan despite several allowance and repeated demands. Thus Gomez filed a
complaint, montalban contends that the RTC has no jurisdiction because the principal amount
of the loan is only 40,000.00 and that the interest should not include in determination of
jurisdiction.
Issue

WON the court has jurisdiction over the subject matter.

Held:

Yes. The case is within the jurisdiction of the RTC since the interest on the loan is a primary and
inseparable component of the cause of action, not merely incidental thereto, and already determinable
at the time of filing of the Complaint, it must be included in the determination of which court has the
jurisdiction over petitioners case. Jurisdiction is determined by the cause of action as alleged in the
complaint and not by the amount ultimately substantiated and awarded.

#28

Spouses sabitsana, jr v muertegui – the action for quieting of title was filed to prevent a cloud being cast
upon the plaintiff’s application for title and to obtain a declaration of his rights.

Facts:
Clemencio Sabitsana, lawyer, was the counsel of Respondents. The dispute involved a parcel of land
bought by R Juanito by virtue of a not notarized deed of sale from Garcia. Juanito’s father and his
brother Domingo, also R herein, took actual possession of the land. Later on, Garcia sold the same land
to P, this time, through notarized deed of sale.

When Rs’ father passed away, the heirs applied for the registration and coverage of the lot under Public
Land Act. P opposed the application, claiming as a true owner of the lot. Respondents filed for quieting
of title and preliminary injunction against Ps, clemencio and his wife, Rosario, claiming that they bought
the land in bad faith and are exercising possession and ownership of the same, which act thus constitute
cloud over the title. RTC and CA ruled in favor of Rs.

Issue:

WON RTC has jurisdiction over the declaratory relief?

Held:

Yes, petition was dismissed. The RTC has jurisdiction over the suit for quieting of title. It is clear under
the Rules that an action for quieting of title may be instituted in RTCs, regardless of the assessed value
of the real property in dispute. Under Rule 63 of the Rules of Court, action to quiet title to real property
or remove clouds therefrom may be brought in the appropriate RTC.

# 29

Manalang v. bacani – boundary dispute

Facts:

Petitioners were co-owners for lot in question and cause a relocation and verification survey which
showed that respondents had encroached on a portion of said lot. When the respondents refused to
vacate the encroached portion and to surrender peaceful possession thereof despite demands, the
petitioners commenced this action for unlawful detainer.

Issue:

Can RTC in the exercise of its appellate jurisdiction conduct a relocation and verification survey a lot in
question?

Held:

No, the RTC, in an appeal of the judgment in an ejectment case, shall not conduct a rehearing or trial de
novo.

CA correctly held that a boundary dispute must be resolved in the context of accion reinvicatoria, not an
ejectment case. The boundary dispute is not about possession, but encroachment, that is, whether the
property claimed by the defendant formed part of the plaintiff’s property. A boundary dispute cannot be
settled summarily under Rule 70 of the Rules of Court, the proceedings under which are limited to
unlawful detainer and forcible entry. In unlawful detainer, the defendant unlawfully withholds the
possession of the premises upon the expiration or termination of his right to hold such possession under
any contract, express or implied. The defendant’s possession was lawful at the beginning, becoming
unlawful only because of the expiration or termination of his right of possession. In forcible entry, the
possession of the defendant is illegal from the very beginning, and the issue centers on which between
the plaintiff and the defendant had the prior possession de facto.

#30

Bangko sentral ng pilipinas v Legaspi – annexes

Facts:

BSP filed a complaint for annulment of title, revocation of certificate and damages against respondent.
The RTC issued the preliminary injunction against respondent. In one of his defenses, Legaspi alleged
that RTC failed to acquire jurisdiction over the action because the complaint, a real action, failed to
allege the assessed value and latest zonal value was annexed to the complaint.

Issue:

WON failure to allege the amount in the face of the complaint would amount to a lack of a cause of
action?

Held:

It depends. The Supreme Court stated that the non-inclusion on the face of the complaint of the amount
of the property, however is not fatal because attached in the complaint is a tax declaration of the
property in question showing that it has an assessed value of P215,320.00 it must be emphasized that
annexes to a complaint are deemed part of, and should be considered together with the complaint. In
Fluor Daniel, Inc. – Philippines vs E.B. Villarosa and Partners Co., Ltd., the Court ruled that in determining
the sufficiency of a cause of action, the courts should also consider the attachments to the complaint,
thus the court ruled that a complaint should not be dismissed for insufficiency of cause of action if it
appears clearly from the complaint and its attachments that the plaintiff is entitled to relief. The
converse is also true. The complaint may be dismissed for lack of cause of action if it is obvious from the
complaint and its annexes that the plaintiff is not entitle to any relief.

#31

Medical Plaza Makati condominium corp v Cullen – intra-corporate controversy

Facts:
Respondent purchase from MLHI a condominium unit of the petitioner. Petitioner demanded from
respondent payment for alleged unpaid association dues and assessments. Respondent disputed this
demand claiming that he had been paying his due as shown by the fact that he has previously elected
president and director of petitioner. Petitioner, on the other hand, claimed that respondent’s obligation
was a carry-over of that of MLHI. Consequently, respondent was prevented from exercising his right to
vote and be voted for during the 2002 election of petitioner’s BOD.

Respondent clarified from MLHI the said claim but MLHI claimed that such had already been settled.
Thereafter, a complaint for damages was filed by respondent against petitioner and MLHI.

Petitioner filed a motion to dismiss, two of the grounds for the dismissal were the RTC’s lack of
jurisdiction as the case involves an intra-corporate controversy and citing prematurity for failure of
respondent to exhaust all intra-corporate remedies.

Issue:

WON the controversy involves intra-corporate issues as would fall within the jurisdiction of the RTC
sitting as a special commercial court?

Held:

Yes. In determining whether a dispute constitutes a intra-corporate controversy, two test are used,
namely the relationship test and the nature of the controversy test.

An intra controversy is one which pertains to any of the following relationships: 1. Between the
corporation, partnership or association and the public; 2. Between the corporation, partnership or
association and the State insofar as its franchise. Permit or license to operate is concerned; 3. Between
the corporation, partnership or association and its stockholders, partners, members of officers; and 4.
Among the stockholders, partner or associates themselves. Thus, under the relationship test, the
existence of any of the above intra-corporate relations makes the case intra-corporate.

Under the nature of the controversy test, the controversy must not only be rooted in the existence of
intra-corporate relationship, but must as well pertain to the enforcement of the parties’ correlative
rights and obligations under the Corporation Code and the internal and intra-corporate regulatory rules
of the corporation. In other words, jurisdiction should be determined by considering both the
relationship of the parties as well as the nature of the question involved.

Applying the two tests, we find and so hold that the case involves intra-corporate controversy. It
obviously arose from the intra-corporate relations between the parties, and the question involved
pertain to their rights and obligation under the Corporation Code matters relating to the regulations of
the corporation.

#32

Gonzales v GJH Land, INC. – commercial case raffled to regular court

Fact:
Petitioner filed a complaint for injunction with prayer for issuance of status quo order, three and twenty
day temporary restraining orders, and writ of preliminary injunction with damages against respondent.
Before RTC of Muntinlupa city seeking to enjoin the sale of S.J. land, inc’s shares which they purportedly
bought from S.J. Global, Inc. Essentially, petitioners alleged that the subscriptions for the said shares
were already paid by them in full in the books of S.J. Land, Inc., but were nonetheless offered for sale to
the corporation’s stockholders, hence, their plea for injunction.

The case was docketed and raffled to Branch 276, which is not a Special commercial court, and said
branch issued a temporary restraining order, and later, in an order granted the application for a writ of
preliminary injunction.

After filing their respective answers to the complaint, respondents filed a motion to dismiss on the
ground of lack of jurisdiction over the subject matter, pointing out that the case involves an intra-
corporate dispute and should, thus, be heard by the designated Special Commercial Court of Muntinlupa
City.

Issue:

WON RTC erred in dismissing the case for lack of jurisdiction over the subject matter?

Held:

The petition is meritorious.

The Court finds Branch 276 to have correctly categorized civil case as a commercial case, more
particularly, an intra-corporate dispute, considering that it relates to petitioners’ averred rights over the
share of stock offered for sale to other stockholders, having paid the same in full.

By virtue of RA 8799, jurisdiction over cases enumerated in section 5 of PD 902-A was transferred from
the SEC to the RTCs, being the court of general jurisdiction. The erroneous raffling to a regular branch
instead of to Special Commercial Court is only a matter of procedure – that is, an incident related to the
exercise of jurisdiction – and, thus, should not negate the jurisdiction which the RTC of Muntinlupa city
had already acquired. The SC also said that jurisdiction over intra-corporate disputes belongs to RTC in
general and not to particular branches of said courts. Therefore, one must be disabused of the notion
that the transfer of jurisdiction was made only in favor of particular RTC branches, and not the RTCs in
general.

The objective behind the designation of such specialized courts is to promote expediency and efficiency
in the exercise of the RTCs jurisdiction over the cases enumerated under the law. Such designation has
nothing to do with the statutory conferment of jurisdiction to all RTCs under RA 8799 since in the first
place, the court cannot enlarge, diminish, or dictate when jurisdiction shall be removed, given that the
power to define, prescribe, and apportion jurisdiction as a general rule, a matter of legislative
prerogative.

# 33

Majestic plus holdings international, inc v bullion investment and development corp. – special
commercial courts are still considered court of general jurisdiction.

Facts:
Mayor Atienza and Bullion entered into a contract for the lease of property for 25 year and that bullion
will construct a two 4-storey buildings, one was finished but the other, bullion failed to finish the
construction so they sought help with petitioner to complete the construction of said commercial
building which would be a mall. Bullion and majestic entered into a MOA which following the execution,
majestic issued five checks in favor of Bullion. However, 4 of said checks was dishonored because of stop
payment orders. For majestic’s failure to heed bullion’s demands, the latter sent another letter to the
former, informing it that Bullion had elected to rescind the MOA.

Meanwhile, majestic tool over the supervision and eventually finished the construction of the mall and
conducted business therein b renting out the mall’s leasable spaces. However, one morning,
respondent, aided by several police personnel and security guards, entered the premises and took
physical possession and control of the mall. This prompted majestic to file a complaint for specific
performance, injunction and damages against Bullion, together with several other persons. Majestic
alleged that it has become a majority shareholder of bullion by reason of its investment which comprises
95.76% of the agreed authorized capital stock of Bullion.

RTC, which is also a commercial court, rendered decision in favor of the plaintiff. Bullion file a petition
for certiorari before the CA which granted the petition.

Issues:

WON, RTC despite being designated as an SCC, has jurisdiction to hear and decide majestic’s suit for
specific performance.

Held:

Yes. The matter of whether the RTC resolves an issue in the exercise of its general jurisdiction or of its
limited jurisdiction as a special court is only a matter of procedure and has nothing to do with the
question of jurisdiction.

Moreover, it should be noted that special commercial courts are still considered court of general
jurisdiction. RA 8799 directs merely the SCs designation of RTC branches that shall exercise jurisdiction
over intra-corporate disputes. The assignment of intra-corporate disputes to secs is only for the purpose
of streamlining the workload of the RTCs so that certain branches thereof like the SCCs can focus only on
a particular subject matter.

Nothing in the language of the law suggests the diminution of jurisdiction of those RTCs to be
designated as SCCs. The RTC exercising jurisdiction over an intra-corporate dispute can be likened to an
RTC exercising its probate jurisdiction or sitting as a special agrarian court. The designation of the SCCs
as such has not in any way limited their jurisdiction to hear and decide cases of all nature, whether civil,
criminal or special proceedings.

Rule 7

Parts of a pleading

#34
Vda. De formoso v pnb – non-compliance or submission of defective verification and certification against
forum-shopping.

Facts:

Petitioner sold the subject mortgaged real properties to malcaba through a deed of absolute sale.
Malcaba and his layer went to PNB to fully pay the load obligation including the interest. PNB, however,
allegedly refused to accept malcaba’s tender payment and to release the mortgage.

The petitioners filed a complaint for specific performance against PNB before the RTC. After an
exchange of several pleadings, the RTC rendered its decision favoring the petitioners. PNB filed MR but
was denied then a notice of appeal but was also denied.

Petitioner after receiving copy of the decision filed their petition for relief from judgment questioning
the RTC decision as there was no testimonial evidence presented to warrant the award for moral and
exemplary damages. The RTC denied petition for lack of merit. Petitioner moved for reconsideration but
was also denied by the RTC in its omnibus order. The petitioner filed a petition for certiorari before the
CA but was dismissed.

Issue:

WON CA erred in ruling that all the petitioners must sign the verification and certification of non-forum
shopping in a petition for certiorari wherein only question of law are involved.

Held:

The petition lacks merit.

Certiorari is an extraordinary, prerogative remedy and is never issued as a matter of right. The
petitioners were given a chance by the CA to comply with the Rules when they filed their motion for
reconsideration, but they refused to do so. Thus, the CA was constrained to deny their motion and
affirm the earlier resolution. Indeed, liberality and leniency were accorded in some cases. In these cases,
however, those who did not sign were relatives of the lone signatory, so unlike in this case, where
malcaba is not a relative who is similarly situated with the other petitioners and who cannot speak for
them. Considering the circumstances, the Court does not see any similarity at all in the case at bench to
compel itself to relax the requirement of strict compliance with the rule regarding the certificate against
forum shopping.

Rule 8

Manner of making allegation in pleadings

#35
La Mallorca v CA – pleading alternative causes of action

Facts:

Beltran and his family road a bus owned by petitioner. Upon reaching their desired destination, they
alighted from the bus. But Beltran returned to get their baggage. His youngest daughter followed him
without his knowledge. When he stepped into the bus again, it suddenly accelerated. Beltran’s daughter
was found dead as the bur ran over her. For the death of their said child, the plaintiff commenced the
present suit against the defendant seeking recover from latter an aggregate amount of P16,000 to cover
moral damages and actual damages sustained as a result thereof and attorney’s fees. After trial on the
merits, the court below rendered judgment in question. On the basis of the facts, the trial court found
defendant liable for breach of contract of carriage. On appeal to the CA, petitioner claimed that there
cannot be a breach of contract in the case as she was no longer a passenger of the bus. Although the CA
sustained this theory, it nevertheless found the defendant-appellant guilty of quasi-delict.

Issue:

WON CA erred in holding liable for quasi-delict considering that respondent complaint was one for
breach of contract?

Held:

No. the SC sustain the judgement holding the petitioner liable for damages for the death of the child. SC
further explains that the contract of carriage does not end at the moment the passenger alight from the
carrier’s vehicle but until the passenger has had reasonable time or a reasonable opportunity. But even
assuming arguendo that the contract of carriage has already terminated, herein petitioner can be held
liable for the negligence of its driver, pursuant to article 2180 of the civil code. The inclusion of this
averment for quasi-delict, while incompatible with the other claim under the contract of carriage, is
permissible under Section 2 of Rule 8 of the Rules of Court, which allows a plaintiff to allege causes of
action in the alternative, be they compatible with each other or not, to the end that the real matter in
controversy may be resolve and determined.

#36
Hibberd v Rohde and mcmillian – defenses cutoff/ nor cut off by the admission of genuineness and due
execution of actionable document.

Facts:

This is a suit on a promissory note against the makers. Only one of them, the defendant Rohde,
appeared and answered. He not having entered a verified specific denial of the genuineness and due of
the note, the plaintiff claims that his special defense of illegality of consideration is cut off.

Issue:

WON failure to deny under oath the genuineness and due execution of an actionable document bars the
defense of illegality of consideration.

Held:

Failure to deny under oath the genuineness and due execution of an actionable documents bars only
evidence to controvert its due execution. Execution can only refer to the actual making and delivery, but
it cannot involve other matters without enlarging its meaning beyond reason. The party whose signature
it bears admits that he signed it or that it was signed by another for him with his authority; that at the
time it was signed it was in words and figures exactly as set out in the pleading of the party relying upon
it; that the document was delivered and that any formal requisites required by law, such as a seal, an
acknowledgment, or revenue stamp, which it lacks, are waived by him. It does not bar evidence of other
defenses like want or illegal consideration.

Defenses that are barred by failure to deny under oath a document upon which an action or defense is
based

1. Signature is a forgery
2. The signature was by an unauthorized agent or partner
3. The corporation was not authorized under its charter to sign the instrument
4. The party charges signed the instrument in some other capacity than that alleged in the pleasing
setting it out
5. The instrument was never delivered.

#37

Warner barnes & co., LTD. V reyes – denial by disavowal of knowledge


Facts:

The plaintiff-appellee filed against the defendants-appellants an action for foreclosure of mortgage.
After having been granted an extension, the appellants filed an answer alleging that they admit
paragraph 1 of the complaint and that the defendants are without knowledge or information sufficient
to form a belief as to the truth of the material averments of the remainder of the complaint and that
they hereby reserve the right to present an amended answer with special defenses and counterclaim.
The lower court held that the denial by the defendants of the material allegations of the complaint
under the guise of lack of knowledge is general denial so as to entitle the plaintiff to judgment on the
pleadings.

Issue:

WON the allegation of want of knowledge or information as to the truth of the material averments of
the complaint amounts to a mere general denial?

Held:

The SC affirmed the decision appealed.

SC says that under Section 7 of Rule 9 of the rules of court, in allowing the defendant to controvert
material averment not within his knowledge or information, provides that where the defendant is
without knowledge or information sufficient to form a belief as to the truth of material averment, he
shall so state and this shall have the effect of a denial. An unexplained denial of information and belief
of a matter of records, the means of information concerning which are within the control of the pleader,
or are readily accessible to him, is evasive and is insufficient to constitute an effective denial. The form
of denial adopted by the appellants, although allowed by the rules of court, must be availed of with
sincerity and in good faith, certainly neither for the purpose of confusing the adverse party as to what
allegations of the complaint are really put in issue nor for the purpose of delay.

This rule, specifically authorizing an answer that defendant has no knowledge or information sufficient
to form a belief as to the truth of an averment and giving such answer the effect of a denial, does not
apply where the fact as to which want of knowledge is asserted is to the knowledge of the court as
plainly and necessarily within the defendant’s knowledge that his averment of ignorance must be
palpably untrue.

#38

Valdez v dabon, jr. – negative pregnant.


Facts:

This is an administrative complaint for disbarment filed by valdez against atty. Dabon which he denied in
his comment stating that the charges of grossly immoral and unlawful acts through sexual assaults,
abuses, threats and intimidation. He posited that the allegations of spouses nelson and Sonia in their
repective affidavits were nothing but pure fabrication solely intended to malign his name and honor.

Issue:

WON negative pregnant was present

Held:

SC held in its findings that respondent is guilty and disbars him from practice of law.

The Court notes from the respondent’s comment that he appeared to be perplexed as to whether or not
he would admit his extramarital liaisons with Sonia. The court also observed that he devoted
considerable effort to demonstrate that the affair did not amount to gross immoral conduct and that no
sexual abuse, threat or intimidation was exerted upon the person of Sonia, but not once did he squarely
deny the affair itself.

In other words, the respondent’s denial is a negative pregnant, a denial coupled with the admission of
substantial facts in the pleading responded to which are not squarely denied. Stated otherwise, a
negative pregnant is a form of negative expression which carries with it an affirmation or at least
implication of some kind favorable to the adverse party. Where a fact is alleged with qualifying or
modifying language and the words of the allegation as so qualified or modified are literally denied, it has
been held that the qualifying circumstance alone is denied while the fact itself is admitted. It is clear
from Atty. Dabon’s Comment that his denial only pertained as to the existence of a force illicit
relationship. Without a categorical denial thereof, he is deemed to have admitted his consensual affair
with Sonia.