Rule 3, Parties to Civil Actions

Banda vs. Ermita

G.R. No. 166620, April 20, 2010

Facts:

Petitioners are employees of the National Printing Office (NPO), which was created
in 1987 by virtue of EO 285. Under Sec. 6 of said EO, NPO shall have exclusive
printing jurisdiction over printing services requirements of the government over
standard and accountable forms.

In 2004, EO 378 was issued, removing the said exclusive jurisdiction of the NPO
over the printing services requirements of government agencies and
instrumentalities.

Perceiving the latter EO as a threat to their security of tenure as NPO employees,

petitioners filed a Petition for Certiorari and Prohibition with the Supreme Court,
challenging the constitutionality of such order.

Petitioners characterize their action as a class suit filed on their own behalf and on
behalf of all their co-employees at the NPO.

Issue: Whether or not the petition qualifies as a class suit

Ruling:

NO.

Sec. 12, Rule 3 of the Rules of Court defines a class suit, as follows:

Sec. 12. Class suit. – When the subject matter of the controversy is one
of common or general interest to many persons so numerous that it is
impracticable to join all as parties, a number of them which the court
finds to be sufficiently numerous and representative as to fully protect
the interests of all concerned may sue or defend for the benefit of all.
Any party in interest shall have the right to intervene to protect his
individual interest.

From the foregoing definition, the requisites of a class suit are: (1) the subject
matter of controversy is one of common or general interest to many persons; (2) the
parties affected are so numerous that it is impracticable to bring them all to court;
and (3) the parties bringing the class suit are sufficiently numerous or
representative of the class and can fully protect the interests of all concerned.

In another case, (Mathay vs. The Consolidated Bank), the Court held that:

An action does not become a class suit merely because it is designated

as such in the pleadings. Whether the suit is or is not a class suit
depends upon the attending facts, and the complaint, or other pleading
 initiating the class action should allege the existence of the necessary
facts, to wit, the existence of a class and the number of persons in the
alleged class, in order that the court might be enabled to determine
whether the members of the class are so numerous as to make it
impracticable to bring them all before the court, to contrast the number
appearing on the record with the number in class and to determine
whether claimants on record adequately represent the class and the
subject matter of general or common interest.

Here, the petition failed to state the number of NPO employees who wold be affected
by the assailed EO and who were allegedly represented by the petitioners. It was the
Solicitor General, as counsel for respondents, who pointed out that there were about
549 employees in the NPO. The 67 petitioners undeniably compromised a small
fraction of the NPO employees whom they claimed to represent. Subsequently, 32 of
the original petitioners executed an Affidavit of Desistance, while one signed a letter
denying ever signing the petition, osetensibly reducing the number of petitioners to
34.

It is highly doubtful that a sufficient, representative number of NPO employees have

instituted the purported class suit. A perusal of the petition itself would show that of
the 67 petitioners who signed the Verification/Certification of Non-Forum Shopping,
only 20 petitioners were in fact mentioned in the jurat as having duly subscribed the
petition before the notary public. In other words, only 20 petitioners effectively
instituted the present case.

Indeed, in MVRS Publications vs. Islamic Da’wah Council of the Philippines, we

observed that an element of a class suit or representative suit is the adequacy of
representation. In determining the question of fair and adequate representation of
members of a class, the court must consider (a) whether the interest of the named
party is coextensive with the interest of the other members of the class; (b) the
proportion of those made a party, so it bears, to the total membership of the class;
and (c) any other factor bearing on the ability of the named party to speak for the
rest of the class.

In Ibanes vs. Roman Catholic Church, we held that where the interests of the
plaintiffs and other members of the class they seek to represent are diametrically
opposed, the class suit will not prosper.

A Manifestation of Desistance, to which the previously mentioned Affidavit of

Desistance was attached, was filed by the President of the NPO Workers Association
(NAPOWA). It expressed NAPOWA’s opposition to the filing of the instant petition in
any court. The said pleading is a clear indication that there is divergence of opinions
and views among the members of the class sought to be represented, and not all are
in favor of filing the present suit. There is here an apparent conflict between
petitioners’ interests and those persons whom they claim to represent. Since it
cannot be said that petitioners sufficiently represent the interests of the entire class,
the instant case cannot be properly treated as a class suit.
 Rule 5, Rules on Summary Procedure
Macadangdang vs. Gaviola
G.R. No. 156809, March 04, 2009

Facts:

Atty. Macadangdang, on behalf of the Estate of Felomina G. Macadangdang filed an

action for Unlawful Detainer with Damages against respondents before the MTCC
Branch 4, Davao City, alleging that the latter were occupying, by mere tolerance,
portions of 4 parcels of land belonging to the said estate.

The MTCC ruled in favor of the petitioners. Respondents appealed to the RTC.
However, it was dismissed for their failure to file an appeal memorandum.

Respondents filed a Motion for Reconsideration/New Trial.

Meanwhile, on petitioners’ motion, the RTC remanded the case to the MTCC for
execution of judgment. The MTCC ordered the issuance of a writ of execution after
payment of the execution fee.

The RTC denied the respondents’ motion for reconsideration. It ruled that it no
longer had jurisdiction over the motion after dismissal of respondents’ appeal.

The respondents filed a petition for review before the CA assailing the RTC order
dismissing their appeal.

The CA set aside the assailed RTC order and remanded the case to the RTC. It ruled
that as a matter of policy, the dismissal of an appeal on purely technical grounds is
frowned upon. The rules of procedure are intended to promote and not defeat
substantial justice and should not be applied in a very rigid and technical sense.

Petitioners’ motion for reconsideration was denied. Hence, they elevated the case to
the SC.

Petitioners allege that the Court of Appeals erred when it allowed the filing of a
motion for reconsideration before the RTC. The case stemmed from an unlawful
detainer case where the Rules on Summary Procedure apply. Under the Rules on
Summary Procedure, a motion for reconsideration is a prohibited pleading.

Issue: Whether or not the RTC erred in dismissing the respondent’s appeal.

Ruling:

Yes.

Jurisdiction over forcible entry and unlawful detainer cases falls on the MetroTCs,
MTCCs, MTCs, and the MCTCs. Since the case before the MTCC was an unlawful
detainer case, it was governed by the Rules on Summary Procedure. The purpose of
the Rules on Summary Procedure is to prevent undue delays in the disposition of
cases and to achieve this, the filing of certain pleadings is prohibited, including the
filing of a motion for reconsideration.

However, the motion for reconsideration, alleged by the petitioners to be a

prohibited pleading, was filed before the RTC acting as an appellate court. The
appeal before the RTC is no longer covered by the Rules on Summary Procedure.
The Rules on Summary Procedure apply before the appeal to the RTC. Hence,
respondents’ motion for reconsideration filed with the RTC is not a prohibited
pleading.

Rule 6, Kinds of Pleadings

Sy Tiong vs. Sy Chim
G.R. No. 174168 and 179438, March 30, 2009

Facts:

Guan Yiac Hardware, a corporation, filed a criminal complaint for robbery before the
RTC Manila against respondent Spouses Sy Chim and Felicidad Chan Sy, corporate
president and assistant treasurer, respectively. Subsequently, an Amended
Complaint for Accounting and Damages was filed, praying for a complete and true
accounting of all the amounts paid to, received and earned by the company since
1993 and for the restitution of the complete amount stated in the complaint.

By way of Answer, the Spouses Sy averred that Sy Chim was a mere figurehead and
Felicidad Chan Sy merely performed clerical functions, as it was Sy Tiong Shiou and
his spouse, Juanita Tan, who have been authorized by the corporation’s by-laws to
supervise, control and administer corporate funds, and as such were the ones
responsible for the unaccounted funds.

The Spouses Sy filed their Motion for Leave to File Third-Party Complaint, praying
that their attached Third Party Complaint be allowed and admitted against Sy Tiong
Shiou and his spouse. In the said third-party complaint, the Spouses Sy accused Sy
Tiong Shiou and Juanita Tan as directly liable for the corporation’s claim for
misappropriating corporate funds. The trial court granted the motion.

Allegedly, Sy Tiong Shiou and Juanita Tan were not furnished with the copies of
several pleadings, as well as a court order, which resulted in their having been
declared in default for failure to file their answer to the third-party complaint; thus,
they opted not to file a motion for reconsideration anymore and instead filed a
petition for certiorari before the Court of Appeals.

The CA granted the petition of Sy Tiong Shiou and Juanita Tan. The CA declared that
a third-party complaint is not allowed under the Interim Rules of Procedure
Governing Intra-Corporate Controversies Under R.A. No. 8799 (Interim Rules), it not
being included in the exclusive enumeration of allowed pleadings under Section 2,
Rule 2 thereof. Moreover, even if such a pleading were allowed, the admission of the
third-party complaint against Sy Tiong Shiou and Juanita Tan still would have no
basis from the facts or the law and jurisprudence.

The Court of Appeals also ruled that the respondent judge committed a manifest
error amounting to lack of jurisdiction in admitting the third-party complaint and in
summarily declaring Sy Tiong Shiou and Juanita Tan in default for failure to file their
answer within the purported reglementary period. The Court of Appeals set aside
the trial court’s order and further ordered to dismiss the third-party complaint
without prejudice to any action that the corporation may separately file against Sy
Tiong Shiou and Juanita Tan.

The Spouses Sy argues that a third-party complaint is not excluded or prohibited by

the Interim Rules, among others.

Issue: Whether or not the third-party complaint of the Spouses Sy should be

allowed.

Ruling:

Yes, the third-party complaint of the Spouses Sy should be admitted.

A prerequisite to the exercise of such right is that some substantive basis for a third-
party claim be found to exist, whether the basis be one of indemnity, subrogation,
contribution or other substantive right. The bringing of a third-party defendant is
proper if he would be liable to the plaintiff or to the defendant or both for all or part
of the plaintiff’s claim against the original defendant, although the third-party
defendant’s liability arises out of another transaction. The defendant may implead
another as third-party defendant: (a) on an allegation of liability of the latter to the
defendant for contribution, indemnity, subrogation or any other relief; (b) on the
ground of direct liability of the third-party defendant to the plaintiff; or (c) the
liability of the third-party defendant to both the plaintiff and the defendant.

In determining the sufficiency of the third-party complaint, the allegations in the

original complaint and the third-party complaint must be examined. A third-party
complaint must allege facts which prima facie show that the defendant is entitled to
contribution, indemnity, subrogation or other relief from the third-party defendant.

The complaint alleges that the Spouses Sy, as officers of the corporation, have acted
illegally in raiding its corporate funds, hence they are duty bound to render a full,
complete and true accounting of all the amounts, proceeds and funds paid to,
received and earned by the corporation since 1993 and to restitute to the
corporation all such amounts, proceeds, and funds which they took and
misappropriated for their own use and benefit, to the damage and prejudice of the
plaintiff and its stockholders. On the other hand, in the third-party complaint, the
Spouses Sy claim that it is Sy Tiong Shiou and Juanita Tan who had full and complete
control of the day-to day operations and complete control and custody of the funds
of the corporation, and hence they are the ones liable for any shortfall or
unaccounted difference of the corporation’s cash account. Thus, Sy Tiong Shiou and
Juanita Tan should render a full, complete and true accounting of all the amounts,
proceeds, funds paid to, received and earned by the corporation since 1993,
including the amount attributed to the Spouses Sy in the complaint for accounting
and damages. In their prayer, the Spouses Sy moved that Sy Tiong Shiou and Juanita
Tan be declared as directly and solely liable in respect of the corporation’s claim for
accounting and damages, and that in the event that they, the Spouses Sy, are
adjudged liable to the corporation, Sy Tiong Shiou and Juanita Tan be ordered to pay
all amounts necessary to discharge their liability to the corporation by way of
indemnity or reimbursement.

The allegations in the third-party complaint impute direct liability on the part of Sy
Tiong Shiou and Juanita Tan to the corporation for the very same claims which the
corporation interposed against the Spouses Sy. It is clear therefore that the Spouses
Sy’s third-party complaint is in respect of the plaintiff corporation’s claims, and thus
the allowance of the third-party complaint is warranted.

Rule 7, Parts of a Pleading

Cosco Philippines Shipping vs. Kemper Insurance
G.R. No. 179488, April 23, 2012

Facts:

In 1998, respondent insured the shipment of imported frozen boneless beef (owned
by Genosi, Inc.), which was loaded at a port in Brisbane, Australia, for shipment to
Genosi, Inc. (the importer-consignee) in the Philippines. However, upon arrival at
the Manila port, a portion of the shipment was rejected by Genosi, Inc. by reason of
spoilage arising from the alleged temperature fluctuations of petitioner's reefer
containers.

Thus, Genosi, Inc. filed a claim against both petitioner shipping company and
respondent Kemper Insurance Company. After processing the claim documents, it
was recommended that a settlement of the claim in the amount of $64,492.58, which
Genosi, Inc. (the consignee-insured) accepted.

Thereafter, respondent paid the claim of Genosi, Inc. (the insured) in the amount of
$64,492.58. Respondent then made demands upon petitioner, but the latter failed
and refused to pay the said amount.

Hence, respondent filed a Complaint for Insurance Loss and Damages against
petitioner before the trial court.

Petitioner filed a Motion to Dismiss, contending that respondents’s counsel, Atty.

Rodolfo A. Lat, failed to show his authority to sue and sign the corresponding
certification against forum shopping. Thus, his act of signing the certification against
forum shopping was a clear violation of Section 5, Rule 7 of the 1997 Rules of Court.

The RTC granted petitioner's Motion to Dismiss and dismissed the case without
prejudice, ruling that it is mandatory that the certification must be executed by the
petitioner himself, and not by counsel. Since respondent's counsel did not have a
Special Power of Attorney (SPA) to act on its behalf, hence, the certification against
forum shopping executed by said counsel was fatally defective and constituted a
valid cause for dismissal of the complaint.

On appeal by respondent, the CA reversed and set aside the trial court's order. The
CA ruled that the required certificate of non-forum shopping is mandatory and that
the same must be signed by the plaintiff or principal party concerned and not by
counsel; and in case of corporations, the physical act of signing may be performed in
behalf of the corporate entity by specifically authorized individuals. However, the
CA pointed out that the factual circumstances of the case warranted the liberal
application of the rules and, as such, ordered the remand of the case to the trial
court for further proceedings.

Petitioner's Motion for Reconsideration, having been denied by the CA prompted

the petitioner to elevate the case to the SC via Petition for Review on Certiorari
under Rule 45 of the Rules of Court.

Issue: Whether or not Atty. Lat was properly authorized by respondent to sign the
certification against forum shopping on its behalf

Ruling:

No.

The certification against forum shopping must be signed by the principal parties. If,
for any reason, the principal party cannot sign the petition, the one signing on his
behalf must have been duly authorized. With respect to a corporation, the
certification against forum shopping may be signed for and on its behalf, by a
specifically authorized lawyer who has personal knowledge of the facts required to
be disclosed in such document. A corporation has no power, except those expressly
conferred on it by the Corporation Code and those that are implied or incidental to
its existence. In turn, a corporation exercises said powers through its board of
directors and/or its duly authorized officers and agents. Thus, it has been observed
that the power of a corporation to sue and be sued in any court is lodged with the
board of directors that exercises its corporate powers. In turn, physical acts of the
corporation, like the signing of documents, can be performed only by natural
persons duly authorized for the purpose by corporate by-laws or by a specific act of
the board of directors.

In another case (Philippine Airlines, Inc. v. Flight Attendants and Stewards

Association of the Philippines), the SC ruled that only individuals vested with
authority by a valid board resolution may sign the certificate of non-forum shopping
on behalf of a corporation. It also required proof of such authority to be presented.
The petition is subject to dismissal if a certification was submitted unaccompanied
by proof of the signatory's authority.

In the present case, since respondent is a corporation, the certification must be

executed by an officer or member of the board of directors or by one who is duly
authorized by a resolution of the board of directors; otherwise, the complaint will
have to be dismissed. The lack of certification against forum shopping is generally
not curable by mere amendment of the complaint, but shall be a cause for the
dismissal of the case without prejudice. The same rule applies to certifications
against forum shopping signed by a person on behalf of a corporation which are
unaccompanied by proof that said signatory is authorized to file the complaint on
behalf of the corporation.

There is no proof that respondent, a private corporation, authorized Atty. Lat,

through a board resolution, to sign the verification and certification against forum
shopping on its behalf. Accordingly, the certification against forum shopping
appended to the complaint is fatally defective, and warrants the dismissal of
respondent's complaint for Insurance Loss and Damages against petitioner.

Altres vs. Empleo

G.R. No. 180986, December 10, 2008

Facts:

Sometime in 2003, Iligan City Mayor Quijano sent notices of numerous vacant career
positions in the city government to the CSC. The city government and the CSC
thereupon proceeded to publicly announce the existence of the vacant positions.
Petitioners and other applicants submitted their applications for the different
positions where they felt qualified.
Toward the end of his term Mayor Quijano issued appointments to petitioners.

In the meantime, the Sangguniang Panglungsod successively issued 2 resolutions: 1

adressed to the CSC requesting a suspension on the processing of said appointments
and 1 to the City Human Resource Management Office to hold in abeyance the
transmission of all of the said appointments.

As a result, respondent city accountant Empleo did not thus issue a certification as
to availability of funds for the payment of salaries and wages of petitioners, as
required byCSC Memorandum Circular No. 40, Series of 1998. The other
respondents did not sign petitioners’ position description forms. Thereafter, the CSC
Field Office for Lanao del Norte and Iligan City disapproved the appointments issued
to petitioners invariably due to lack of certification of availability of funds.
Petitioners thus filed with the RTC of Iligan City a petition for mandamus against
respondent Empleo or his successor in office for him to issue a certification of
availability of funds for the payment of the salaries and wages of petitioners, and for
his co-respondents or their successors in office to sign the position description
forms.

The RTC denied petitioners’ petition for mandamus. Thus, they elevated the case to
the SC via petition for review on certiorari.

Respondents assail as defective the verification and certification against forum

shopping attached to the petition as it bears the signature of only 11 out of the 59
petitioners, and no competent evidence of identity was presented by the signing
petitioners. They thus move for the dismissal of the petition, citing Section 5, Rule
714 vis a vis Section 5, Rule 4515 of the 1997 Rules of Civil Procedure and Docena v.
Lapesura which held that the certification against forum shopping should be signed
by all the petitioners or plaintiffs in a case and that the signing by only one of them
is insufficient as the attestation requires personal knowledge by the party executing
the same.

Petitioners, on the other hand, argue that they have a justifiable cause for their
inability to obtain the signatures of the other petitioners as they could no longer be
contacted or are no longer interested in pursuing the case. Petitioners plead
substantial compliance, citing Huntington Steel Products, Inc., et al. v. NLRC which
held, among other things, that while the rule is mandatory in nature, substantial
compliance under justifiable circumstances is enough.

Issue: Whether or not the substantial compliance rule applies in this case.

Ruling:

Petitioners’ position is more in accord with recent decisions of this Court.

In another case, the SC said that under justifiable circumstances, the relaxation of
the requirements of verification and certification is allowed so that the ends of
justice may be better served. Verification is simply intended to secure an assurance
that the allegations in the pleading are true and correct and not the product of the
imagination or a matter of speculation, and that the pleading is filed in good faith;
while the purpose of the aforesaid certification is to prohibit and penalize the evils
of forum shopping.

On the requirement of a certification of non-forum shopping, the well-settled rule is

that all the petitioners must sign the certification of non-forum shopping. The
reason for this is that the persons who have signed the certification cannot be
presumed to have the personal knowledge of the other non-signing petitioners with
respect to the filing or non-filing of any action or claim the same as or similar to the
current petition. The rule, however, admits of an exception and that is when the
petitioners show reasonable cause for failure to personally sign the certification.
The petitioners must be able to convince the court that the outright dismissal of the
petition would defeat the administration of justice.

In the present case, the signing of the verification by only 11 out of the 59
petitioners already sufficiently assures the Court that the allegations in the pleading
are true and correct and not the product of the imagination or a matter of
speculation; that the pleading is filed in good faith; and that the signatories are
unquestionably real parties-in-interest who undoubtedly have sufficient knowledge
and belief to swear to the truth of the allegations in the petition.

With respect to petitioners’ certification against forum shopping, the failure of the
other petitioners to sign as they could no longer be contacted or are no longer
interested in pursuing the case need not merit the outright dismissal of the petition
without defeating the administration of justice. The non-signing petitioners are,
however, dropped as parties to the case.

With respect to petitioners’ non-presentation of any identification before the notary

public at the time they swore to their verification and certification attached to the
petition, suffice it to state that this was cured by petitioners’ compliance with the
Court’s Resolution wherein they submitted a notarized verification and certification
bearing the details of their community tax certificates. This, too, is substantial
compliance. The Court need not belabor its discretion to authorize subsequent
compliance with the Rules.

For the guidance of the bench and bar, the Court restates in capsule form the
jurisprudential pronouncements already reflected above respecting non-compliance
with the requirements on, or submission of defective, verification and certification
against forum shopping:

1) A distinction must be made between non-compliance with the requirement on or

submission of defective verification, and non-compliance with the requirement on
or submission of defective certification against forum shopping.

2) As to verification, non-compliance therewith or a defect therein does not

necessarily render the pleading fatally defective. The court may order its submission
or correction or act on the pleading if the attending circumstances are such that
strict compliance with the Rule may be dispensed with in order that the ends of
justice may be served thereby.

3) Verification is deemed substantially complied with when one who has ample
knowledge to swear to the truth of the allegations in the complaint or petition signs
the verification, and when matters alleged in the petition have been made in good
faith or are true and correct.
4) As to certification against forum shopping, non-compliance therewith or a defect
therein, unlike in verification, is generally not curable by its subsequent submission
or correction thereof, unless there is a need to relax the Rule on the ground of
"substantial compliance" or presence of "special circumstances or compelling
reasons."

5) The certification against forum shopping must be signed by all the plaintiffs or
petitioners in a case; otherwise, those who did not sign will be dropped as parties to
the case. Under reasonable or justifiable circumstances, however, as when all the
plaintiffs or petitioners share a common interest and invoke a common cause of
action or defense, the signature of only one of them in the certification against
forum shopping substantially complies with the Rule.

6) Finally, the certification against forum shopping must be executed by the party-
pleader, not by his counsel. If, however, for reasonable or justifiable reasons, the
party-pleader is unable to sign, he must execute a Special Power of Attorney
designating his counsel of record to sign on his behalf.