I. Jurisdiction Republic Act 7691 amending BP 129 Rules on Summary Procedure A.M. No. 02-11-09-SC
Ouano vs. PGTT International Investment Corporation
FACTS: PGTT filed a complaint agaisnt Ouano for Recovery of Ownership and Possession of Property and Damages against Jovenal Ouano. As owner, it alleged that it was deprived of its use when Ouano uprooted the concrete monuments of the lot and planted corn therein. It also claimed to suffer damages amounting to P100,000 when Ouano refused to vacate despite their demand. Ouano filed a motion to dismiss on the ground that it is the MTC that has jurisdiction as the assessed value of the lot is only P2,910. PGTT opposed and said that jurisdictiction is determined by the market value instead and that the RTC has jurisdiction since since the market market value value of the lot is P49, P49, 760 and the damages damages claimed claimed amount amounted ed to P100,000. RTC ruled in favor of PGTT. ISSUE: Whether the RTC has jurisdiction over this case? HELD: The jurisdiction over the subject mater of the claim is determined by the assessed value and not the market value since the action involves ownership and possession of real property. BP # 129 provides that MTC has jurisdiction over cases on real property where the assessed value of the property or interest therein exclusive of damages does not exceed P20,000 or P50,000 in civil actions in Metro Manila. the RTC on the other hand has jurisdiction if the assessed value exceeds P20,000 or P50,000 in civil actions in Metro Manila. Thus, the amount of damages claimed should not be added in the computation as the law explicitly exclud excludes es from from the determ determina inatio tion n of jurisd jurisdict iction ional al amount amount the deman demand d for " intere interest, st, damages of whatever kind, atorney's fees, litigation expenses, and cost. The said damages are merely incidental to, or a consequence of, the real property. However, Administrative Circular No. 09-94 provides that in cases where the claim for damages is the main cause of action, or one of the causes of action, the amount of such claim shall be considered in determining the jurisdiction of the court. HERRERA vs. BOLLOS (G.R. No. 138258 January 18, 2002)
The Facts: On August 5, 1993, Teodora Bollos commenced before the Municipal Circuit Trial Court of Bayawan-Basay Civil Case No. 993, for forcible entry, solely against Eddie Herrera alleging that the latter, sometime in the second week of 1993, through stealth and strategy and taking advantage of the absence of Teodora, entered and occupied her Sugarland known as Lot No. 20, GSS-61 GSS-615, 5, locat located ed at Caman Camanda dagan gan,, Maniny Maninyon, on, Bayaw Bayawan, an, Negros Negros Orient Oriental. al. Teodor Teodora a claims claims to have have inheri inherited ted said said parcel parcel.. Defend Defendan ant, t, Eddie Eddie Her Herrer rera, a, denied denied the allegations against him maintaining that he entered and occupied not Lot No. 20, as claimed by Teodora, but Lot No. 21, GSS¬615, which is owned by Conrado Bollos, a brother of Teodora's father, Alfonso. Further, Herrera said that his occupation of the property was not through stealth or strategy but by virtue of a contract of lease executed between Conrado Bollos, as lessor, and Ernesto Tijing, as lessee. Herrera is Tijing's overseer on the land. As a consequence, the complaint was twice amended, first, on March 23, 1994 to include Ernesto T. Tijing as a party-defendant and much later on October 4, 1995, this time to implead Conrado Conrado Bollos as an additiona additionall defendant. defendant. After due proceedings, proceedings, the first level court court
dism dismis isse sed d the the case case for for fail failur ure e to make make-o -out ut a forc forcib ible le entr entry y case case beca becaus use e of lack lack of jurisdiction. Plaintiffs' Plaintiffs' remedy should be reivendicatory (sic) action before the proper forum.
On Appeal to the Regional Trial Court of Dumaguete City, docketed as Civil Case No. 12014, the challenged verdict was reversed restoring Lot No. 20, GSS-615 to the plaintiffs and ejecting the defendants from the said parcel of land and pay damages. Petitioners filed with the CA a petition for review. the CA affirmed. Hence, this appeal. The Issues (a) Is the municipal trial court vested with jurisdiction over a second amended complaint impleading a new defendant filed beyond one year from dispossession alleging a case of forcible entry in the original action? (b) May the regional trial court award moral and exemplary damages against defendants in an appeal from a dismissal of the case for forcible entry by the lower court? The Court's Ruling: Petition Denied On the 1st issue: we emphasize the basic rule that jurisdiction of the court over the subject matter of the action is determined by the allegations of the complaint at the time of its filing, irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein."What determines the jurisdiction of the court is the nature of the action action pleade pleaded d as appea appearin ring g from from the allega allegatio tions ns in the compla complaint int.. The averm averment ents s therein and the character of the relief sought are the ones to be consulted." On the 2nd issue: the concept of damages in an action for forcible entry and detainer cases is well well defi define ned d in seve severa rall case cases. s. Thes These e dama damage ges s me mean an "ren "rents ts"" or "the "the reas reason onab able le compensation for the use and occupation of the premises," or "fair rental value of the proper property. ty."" Temper Temperate ate,, actual actual,, moral moral and exe exempl mplary ary are are neithe neitherr ren rents ts nor nor reason reasonabl able e compensation for the use and occupation of the premises, nor fair rental value, and are not recoverable in such cases. Court DENIES the petition. However, the Court SETS ASIDE the decisions of the Court of Appea ls18 and the Regional Trial Court.19 The Court remands the case to the municipal trial court for further proceedings. In the case at bar, the municipal trial court dismissed the case for lack of jurisdiction, and the the regi region onal al tria triall cour courtt reve revers rsed ed the the dism dismis issa sall but but rend render ered ed judg judgme ment nt ejec ejecti ting ng the the defendants from the parcel of land involved, and condemning them to pay damages and attorney's fees. This is not correct. In case of reversal, the case shall be remanded to the municipal municipal trial court for further proceedings. proceedings.15 15 The regional trial court in rever reversing sing an appealed case dismissing the action cannot decree the eviction of the defendants and award damages. A court cannot take judicial notice of a factual matter in controversy. The court may may take take judi judici cial al noti notice ce of matt matter ers s of publ public ic know knowle ledg dge, e, or whic which h are are capa capabl ble e of unquestionable demonstration, or ought to be known to judges because of their judicial functions. 16 Before taking such judicial notice, the court must "allow the parties to be heard thereon." Hence, there can be no judicial notice on the rental value of the premises in question without supporting evidence. OCA v. CA
FACTS: Petitioners Oca brothers are co-owners of fishponds. Respondent Abalos, on the other hand, claims to be the share-tenant caretaker of the said fishponds. He performs all the phases of farm work needed for the production of bangus, while the only contribution of the Oca brothers are their fishponds. Abalos asserts that he has peaceful possession, cultivation and care of the fishponds until 1992 when he requested from the Oca brothers his share of the harvest. Instead of acceding to his request, petitioners demanded that he vacate the ponds. Abalos filed for a Complaint for Peaceful Possession, Leasehold and Damages, with the Office Office of the Provincia Provinciall Adjudicato Adjudicator, r, Department Department of Agrarian Agrarian Reform Adjudicat Adjudication ion Board Board (DARAB). Provincial Adjudicator declared Abalos as bona fide tenant of the parcels of land, enforcing the right of the plaintiff to become the agricultural lessee in the fishpond. Decision was appealed by the Oca brothers to the DARAB, which affirmed Provincial Adjudicator’s decision in toto. Petitioners sought for relief with CA. CA modified the decision. Declaring Abalos as bonfide tenant only with regard to certain fishponds (but not all). Petitioners elevate the case before SC with a new argument of lack of jurisdiction of the Provincial Adjudicator over the subject matter of the action ISSUE: Whether or not lack of jurisdiction over the subject matter can be objected to at any instance HELD: The general rule that lack of jurisdiction over the subject matter can be objected to at any instance is not absolute. Estoppel or laches may operate as a bar shield to prevent a party from belatedly resorting to this form of defense. They They nev never er disput disputed ed the jurisd jurisdict iction ion of the Provi Provinci ncial al Adjudi Adjudicat cator or at any stage stage of the proceeding, notwithstanding the presence of numerous opportunities in the various stages of this case to contest the adjudicator's exercise of jurisdiction. Neither can they claim that they were prevented from contesting its jurisdiction during the eight years this case was unde underr liti litiga gati tion on.. They They have have tend tender ered ed resp respon onsi sive ve plea pleadi ding ngs, s, atte attend nded ed conf confer eren ence ces s participated in the hearings and appealed adverse decisions against them. By their conduct, they voluntarily submitted to the jurisdiction of the adjudicator. Consequently, they must not be allowed to deny his jurisdiction after submitting to it. The rule is that the active participation of the party against whom the action was brought, coupled with his body where where the actio action n is pendin pending, g, is tantam tantamoun ountt to an invoca invocatio tion n of that that jurisd jurisdict iction ion and a willingness to abide by the resolution of the case and will bar said party from later on impugning the court or body's jurisdiction. Petitioners instituted a counterclaim (against the respondent--they prayed not only for the dismissal of the case but likewise asked for the payment of damages based on the latter's purported bad faith). By filing a counterclaim, they recognized and expressly invoked the jurisdiction of the Provincial Adjudicator. They cannot now insist the want of it only after an unfavorable decision was issued against them.
Mijares v. Ranada
Facts: Invoking the Alien Tort Act, petitioners Mijares, et al.*, all of whom suffered human rights violations during the Marcos era, obtained a Final Judgment in their favor against the Estate of the late Ferdinand Marcos amounting to roughly $1.9B in compensatory and exemplary
damages for tortuous violations of international law in the US District Court of Hawaii. This Final Judgment was affirmed by the US Court of Appeals. As a consequence, Petitioners filed a Complaint with the RTC Makati for the enforcement of the Final Judgment, paying P410 as docket and filing fees based on Rule 141, §7(b) where the value of the subject matter is incapable of pecuniary estimation. The Estate of Marcos however, filed a MTD alleging the non-payment of the correct filing fees. RTC Makati dismissed the Complaint stating that the subject matter was capable of pecuniary estimation as it involved a judgment rendered by a foreign court ordering the payment of a definite sum of money allowing for the easy determination of the value of the foreign judgment. As such, the proper filing fee was P472M, which Petitioners had not paid. Issue: Whether or not the amount paid by the Petitioners is the proper filing fee. Held: Yes, but on a different basis—amount merely corresponds to the same amount required for “other actions not involving property”. RTC Makati erred in concluding that the filing fee should be computed on the basis of the total sum claimed or the stated value of the property in litigation. The Petitioner’s Complaint was lodged against the Estate of Marcos but it is clearly based on a judgment, the Final Judgment of the US District Court. However, the Petitioners err in stating that the Final Judgment is incapable of pecuniary estimation because it is so capable. On this point, Petitioners state that this might lead to an instance wherein a first level court (MTC, MeTC, etc.) would have jurisdiction to enforce a foreign judgment. Under the B.P.129, such courts are not vested with such jurisdiction. §33 of B.P.129 refers to instances wherein the cause of action or subject matter pertains to an assertion of rights over property or a sum of money. But here, the subject matter is the foreign judgment itself. §16 of B.P.129 reveals that the complaint for enforcement of judgment even if capable of pecuniary estimation would fall under the jurisdiction of the RTCs. Thus, the Complaint to enforce the US District Court judgment is one capable of pecuniary estimations but at the same time, it is also an action based on judgment against an estate, thus placing it beyond the ambit of §7(a) of Rule 141. What governs the proper computation of the filing fees over Complaints for the enforcement of foreign judgments is §7(b)(3), involving “other actions not involving property.” Thorton v. Thorton 436 SCRA 550 (2004)
Facts: Richard Brian Thorton got married to Adelfa Francisco Thorton in 1998. A year later, Adelfa gave birth to a child, Segueira Jennifer Thorton. After 3 years of marriage, Adelfa Thorton grew restless and bored as a plain housewife and wanted to return to her old job as a "guest relations officer" in a nightclub. Thereafter, she left the family home with their daughter, without notifying her husband. She left word that she was bringing Sequiera to Basilan. Richard filed case with the Family Court in Makati but this was dismissed, because of the allegation that the child was in Basilan. Richard went to Basilan to check on the whereabouts of Adelfa and their daughter but he did not find them there. He gave up his search when he got hold of Adelfa's cellular phone bills showing calls from different places such as Cavite, Nueva Ecija, Metro Manila and other provinces. Richard then filed another petition for Habeas Corpus, this time with the CA which could issue a writ of habeas corpus enforceable in the entire country. CA: Petition denied for lack of jurisdiction, ruling that the Family Court Act of 1997 (RA
8369) gave family courts exclusive original jurisdiction over petitions for "custody of children and habeas corpus in relation to the latter" (Section 5 b). Issue: WON the CA should take cognizance of the case Held: The Supreme Court disagreed with the CA's reasoning because it will result in an iniquitous situation, leaving individuals like the petitioner without legal recourse in obtaining custody of their children. Individuals who do not know the whereabouts of minors they are looking for would be helpless since they cannot seek redress from family courts whose writs are enforceable only in their respective territorial jurisdictions. Thus, if a minor is being transferred from one place to another, the petitioner in a habeas corpus case will be left without legal remedy. The primordial consideration is the welfare and best interests of the child. The Court ruled therefore that RA 8369 did not divest the Court of Appeals and the Supreme Court of their jurisdiction over habeas corpus cases involving the custody of minors. This is not the first time that this Court construed the word “exclusive” as not foreclosing resort to another jurisdiction. As correctly cited by the Solicitor General, in Floresca vs. Philex Mining Corporation, the heirs of miners killed in a work-related accident were allowed to file suit in the regular courts even if, under the Workmen’s Compensation Act, the Workmen’s Compensation Commissioner had exclusive jurisdiction over such cases. In the said case, the Court applied and gave effect to the constitutional guarantee of social justice in ruling that the Commissioner's exclusive jurisdiction did not foreclose resort to the regular court for damages. In the case at bar, a literal interpretation of the word “exclusive” will result in grave injustice and negate the policy “to protect the rights and promote the welfare of children” under the Constitution and the United Nations Convention on the Rights of the Child. This mandate must prevail over legal technicalities and serve as the guiding principle in construing the provisions of RA 8369. Moreover, settled is the rule in statutory construction that implied repeals are not favored. The provisions of RA 8369 reveal no manifest intent to revoke the jurisdiction of the Court of Appeals and Supreme Court to issue writs of habeas corpus relating to the custody of minors. Further, it cannot be said that the provisions of RA 8369, RA 7092 and BP 129 are absolutely incompatible since RA 8369 does not prohibit the Court of Appeals and the Supreme Court from issuing writs of habeas corpus in cases involving the custody of minors. Thus, the provisions of RA 8369 must be read in harmony with RA 7029 and BP 129 ― that family courts have concurrent jurisdiction with the Court of Appeals and the Supreme Court in petitions for habeas corpus where the custody of minors is at issue. BPI v. ALS Mnst.
Facts: BPI Investment Corporation filed a complaint for sum of money against ALS Mngt pursuant to a deed of sale executed between them for 1 unfurnished condo unit. BPI advanced the amount of P26thou for the expenses in causing the issuance and registration of the condo certificate of title while ALS failed and refused to pay, notwithstanding repeated demands by the BPI. ALS averred, in its counterclaim, that its refusal to pay is justified on the ground that the vendor, BPI, did not conform to the warranties and that the unit purchased by vendee was defective. The trial court ordered ALS to pay BPI the amount advanced for registration and while ordering BPI to correct the defects in the unit and to reimburse the vendee for
unearned income since the vendee had to suspend lease contract until the unit was fixed. The appellate court sustained the trial court s finding that "while [petitioner] succeeded in proving its claim against the [respondent] for expenses incurred in the registration of [the latter s] title to the condominium unit purchased, for its part [respondent] in turn succeeded in establishing an even bigger claim under its counterclaim. Issue: Whether or not the Honorable Court of Appeals erred in not holding that the trial court had no jurisdiction over the respondent s counterclaims Held: Contending that it was the Housing and Land Use Regulatory Board (HLURB) -- not the RTC -- that had jurisdiction over respondent's counterclaim, petitioner seeks to nullify the award of the trial court. Promulgated on July 12, 1976, PD No. 957 -- otherwise known as "The Subdivision and Condominium Buyers Protective Decree" -- provides that the National Housing Authority (NHA) shall have "exclusive authority to regulate the real estate trade and business."14 Promulgated later on April 2, 1978, was PD No. 1344 entitled "Empowering the National Housing Authority to Issue Writs of Execution in the Enforcement of Its Decisions Under Presidential Decree No. 957." It expanded the jurisdiction of the NHA as follows: "SECTION 1. In the exercise of its function to regulate the real estate trade and business and in addition to its powers provided for in Presidential Decree No. 957, the National Housing Authority shall have exclusive jurisdiction to hear and decide cases of the following nature: A. Unsound real estate business practices; B. Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project owner, developer, dealer, broker or salesman; and C. Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lot or condominium unit against the owner, developer, broker or salesman." On February 7, 1981, by virtue of Executive Order No. 648, the regulatory functions of the NHA were transferred to the Human Settlements Regulatory Commission (HSRC). Section 8 thereof provides: "SECTION 8. Transfer of Functions. - The regulatory functions of the National Housing Authority pursuant to Presidential Decree Nos. 957, 1216, 1344 and other related laws are hereby transferred to the Commission (Human Settlements Regulatory Commission). x x x. Among these regulatory functions are: 1) Regulation of the real estate trade and business; x x x 11) Hear and decide cases of unsound real estate business practices; claims involving refund filed against project owners, developers, dealers, brokers, or salesmen; and cases of specific performance." Pursuant to Executive Order No. 90 dated December 17, 1986, the functions of the HSRC were transferred to the HLURB. As mandated by PD No. 957, the jurisdiction of the HLURB is encompassing and includes the regulation of real estate trade and business. Furthermore, the jurisdiction of the HLURB over cases enumerated in Section 1 of PD No. 1344 is exclusive. NHA likewise had the competence to award damages as part of the exclusive power conferred upon it -- the power to hear and decide "claims involving refund and any other claims filed by subdivision lot or condominium unit buyers against the project owner, developer, dealer, broker or salesman." Clearly then,
respondent's counterclaim -- being one for specific performance (correction of defects/deficiencies in the condominium unit) and damages – falls under the jurisdiction of the HLURB as provided by Section 1 of PD No. 1344. The Applicability of Estoppel The general rule is that any decision rendered without jurisdiction is a total nullity and may be struck down at any time, even on appeal before this Court. Indeed, the question of jurisdiction may be raised at any time, provided that such action would not result in the mockery of the tenets of fair play. As an exception to the rule, the issue may not be raised if the party is barred by estoppel. In the present case, petitioner proceeded with the trial, and only after a judgment unfavorable to it did it raise the issue of jurisdiction. Thus, it may no longer deny the trial court s jurisdiction, for estoppel bars it from doing so. This Court cannot countenance the inconsistent postures petitioner has adopted by attacking the jurisdiction of the regular court to which it has voluntarily submitted. petitioner also guilty of estoppel by laches for failing to raise the question of jurisdiction earlier. From the time that respondent filed its counterclaim on November 8, 1985, the former could have raised such issue, but failed or neglected to do so. It was only upon filing its appellant s brief with the CA on May 27, 1991, that petitioner raised the issue of jurisdiction for the first time. In Tijam v. Sibonghanoy,it was declared that the failure to raise the question of jurisdiction at an earlier stage barred the party from questioning it later. Applying the rule on estoppel by laches, "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, of estoppe[l] 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 been 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."The doctrine of laches or of stale demands is based upon grounds of public policy which requires, for the peace of society, the discouragement of stale claims and, unlike the statute of limitations, is not a mere question of time but is principally a question of the inequity or unfairness of permitting a right or claim to be enforced or asserted." "Public policy dictates that this Court must strongly condemn any double-dealing by parties who are disposed to trifle with the courts by deliberately taking inconsistent positions, in utter disregard of the elementary principles of justice and good faith. There is no denying that, in this case, petitioners never raised the issue of jurisdiction throughout the entire proceedings in the trial court. Instead, they voluntarily and willingly submitted themselves to the jurisdiction of said court. It is now too late in the day for them to repudiate the jurisdiction they were invoking all along." II.
Actions and Parties
Planters Products, Inc. (PPI) vs. Fertiphil Corporation
FACTS: Fertiphil was engaged in the importation and distribution of fertilizers and pesticides. In 1985 Pres. Marcos issued an LOI requiring fertilizer companies to pay P10.00 for every bag of fertilizer sold to PPI (for PPI's rehabilitation.) In 1986, after the Edsa Revolution, the collection was stopped. Hence, Fertiphil filed a case asking PPI for a refund of P6,698,144.00. PPI was declared in default and Fertiphil had a judgement in their favor. Fertiphil filed a motion for a writ of execution pending appeal, which was granted by the
RTC. In 1991, PPI filed an appeal with regards to the grant of the writ of execution pending appeal. Fertiphil now assails the appeal made by the PPI on the ground that they did not pay the docket fees as required by the 1997 Rules of Procedure. ISSUE: W/N the appeal should be dismissed for non-payment of docket fees as required by the new rules. HELD: NO, appeal should be allowed to allowed to proceed. As a general rule, rules of procedure apply to actions pending and undetermined at the time of their passage, hence, retrospective in nature. However, the general rule is not without an exception. Retrospective application is allowed if no vested rights are impaired. While the right to appeal is statutory, the mode or manner by which this right may be exercised is a question of procedure which may be altered and modified only when vested rights are not impaired. Thus, the 1997 Rules of Civil Procedure which took effect on July 1, 1997 and which required that appellate docket and other lawful fees should be paid within the same period for taking an appeal, can not affect PPI's appeal which was already perfected in 1992. Moreover, we have also previously ruled that failure to pay the appellate docket fee does not automatically result in the dismissal of an appeal, dismissal being discretionary on the part of the appellate court. And in determining whether or not to dismiss an appeal on such ground, courts have always been guided by the peculiar legal and equitable circumstances attendant to each case. DIAZ vs MESIAS, JR
FACTS: Petitioners are the owners of a 1.2 hectare riceland located at Brgy. Guintigi-an, Ormoc City, being tilled by, among others, Carlos Mesias, Sr., father of respondent Carlos, Jr. Respondent requested that he be granted a homelot within the riceland by petitioners and that the share tenancy system be changed to leasehold system. Petitioners denied both requests. Hence, the matter was brought to the Barangay Agrarian Reform Committee for mediation. No settlement was reached. The case was elevated to the Municipal Agrarian Reform Office (MARO) of the Department of Agrarian Reform. MARO concluded that the respondent is not a bona fide tenant of the petitioners, considering that he is a member of the immediate farm household of his father, Carlos, Sr. A petition was filed with the Provincial Adjudicator of Leyte, who dismissed the petition and declared that Carlos, Jr. is not a tenant de jure of the riceland, rather it is his father, Carlos, Sr., who is the tenant thereof. Respondent appealed to the Department of Agrarian Reform Adjudication Board (DARAB) which reversed the decision of the Provincial Adjudicator. Hence, a petition for review was filed by the petitioners with the CA. The CA dismissed the petition due to defective certification against forum shopping and failure to attach clearly legible copies of pertinent portions of the records and other supporting documents. CA reconsidered its decision insofar as the defective certification is concerned, but maintained that petitioners failed to comply with the procedural requirements of Rule 43 Sec. 6 of the RoC. ISSUE: WON the petition for review filed by the petitioners complies with the requirements set in Rule 43 Sec.6 of the RoC. RULING: The dismissal of the petition on purely technical grounds was unwarranted. Sec.6 of Rule 43 does not require that all of the supporting papers or annexes accompanying the petition should be certified true copies or duplicate originals. What is mandatory is that clearly legible duplicate originals or certified true copies of the judgment or final orders of the lower courts be attached to the petition.
Petitioners substantially complied with the procedural requirements of the Rules. The attachment of the final decisions of the DARAB and the Provincial Adjudicator are sufficient in order for the CA to give due course to the petition, instead of dismissing the same on the ground of petitioners' failure to attach copies of the pleadings and other supporting documents. Nevertheless, even if the pleadings and other supporting documents were not attached to the petition, the dismissal was unwarranted because the entire records of the case will eventually be elevated to the appellate court, pursuant to Rule 43 Sec.11 of the RoC. Cases should be determined on the merits after all the parties have been given full opportunity to ventilate their causes and defenses, rather than on technicalities or procedural imperfections. Case is remanded to the CA for further proceedings. ATLANTIC ERECTORS VS. HERBAL COVE REALTY
FACTS: Atlantic Erectors and Herbal Cove Realty entered into a Construction Contract, whereby Atlantic agreed to construct a four unit townhouse for a specified contract price. The contract period was for 180 days. Atlantic claims the period was not followed due to reasons attributable to Herbal (i.e. suspension orders, add’l works). However, Herbal denied such claims and pointed to Atlantic as having exceeded the 180 period aggravated by defective workmanship and utilization of materials which were not in compliance with specifications. Atlantic filed a complaint for sum of money representing cost of materials and for labor on the houses constructed with damages with the RTC of Makati. In addition, they also filed a notice of lis pendens for annotation during the pendency of the civil case they filed.
Herbal filed a Motion to Dismiss the Complaint for lack of jurisdiction and for failure to state a cause of action. In addition, they filed a Motion to Cancel Notice of Lis Pendens. They argue that the Notices of lis pendens are without basis because the action is a purely personal action to collect a sum of money and recover damages and does not directly affect title to, use, or possession of real property. RTC initially granted the Motion to Cancel Notice; however, they reversed and reinstated the Notices after Atlantic filed a Motion for Reconsideration. CA reinstated the initial order of the RTC granting Herbal’s Motion to Cancel the Notice of Lis Pendens. ISSUE: Whether or not money claims representing cost of materials for and labor on the houses constructed on property are a proper lien for annotation of lis pendens on the property titled. HELD: No. As a general rule, the only instances in which a notice of lis pendens may be availed of are as follows: (a) an action to recover possession of real estate; (b) an action for partition; and (c) any other court proceedings that directly affect the title to the land or the building thereon or the use or the occupation thereof. The complaint was a purely personal action and a simple collection case. It did not contain any material averment of any enforceable right, interest or lien in connection with the subject matter. The annotation of a notice of lis pendens on titles is not proper where the proceedings instituted are actions in personam. BRIOSO vs. RILI-MARIANO
FACTS:
Spouses Mariano, through the Land Bank of the Philippines, repurchased the property that they previously sold to Glicerio Brioso ("Glicerio" for brevity) within the period specified in the parties' pacto de retro sale. Despite repeated demands, however, Glicerio refused to deliver the entire property to the Spouses Mariano. Thus, the Spouses Mariano filed a complaint for recovery of possession of real property against Glicerio. Defendants, through their counsels, Augusto Pardalis ("Atty. Pardalis" for brevity) and Salvador, asserted that the Spouses Mariano had no cause of action against Glicerio because the latter had already lost all interest in the land. Defendants claimed that Glicerio installed his son Ernesto, his daughter Concepcion and his employee Eusebio as tenants of the property before the repurchase, therefore, they were bona fide cultivators-possessors of the land. Defendants also averred that the titles to the Properties had already been transferred to the Land Bank. Defendants added that the complaint was defective as it failed to implead Land Bank and Concepcion's husband as indispensable parties. As part of their counterclaim, defendants alleged that the Spouses Mariano failed to comply with their obligation to replace the Land Bank bonds (which Spouses Mariano used to partly pay the repurchase price) with cash. Subsequently, Spouses Mariano amended their complaint to implead Land Bank and Sps. Concepcion. Thereafter, Glicerio died. Accordingly, defendants, through Atty. Pardalis, filed a Notice of Death of Glicerio Brioso. Subsequently, the Spouses Mariano's counsel filed a Motion for Substitution of Deceased Defendant which Atty. Pardalis received. The motion was admitted by the trial court. Glicerio then lost the case. ISSUES: 1. Whether there was a valid substitution of deceased Glicerio; and 2. Whether the trial court acquired jurisdiction over the persons of the petitioners. HELD: 1. There was no valid substitution. It must be pointed out that, contrary to the Spouses Mariano's view, their complaint for recovery of possession of real property is an action which survives the death of a party. Such being the case, the rule on substitution of a deceased party is clearly applicable. Under the express terms of Section 17 of the old Rules, in case of the death of a party and due notice is given to the trial court, it is the duty of the court to order the deceased's legal representative or heir to appear for the deceased. Otherwise, "the trial held by the court without appearance of the deceased's legal representative or substitution of heirs and the judgment rendered after trial, are null and void.' However, despite the trial court's failure to adhere to the rule on substitution of a deceased party, its judgment remains valid and binding on the following heirs, namely, Salvador, Concepcion and Ernesto. Formal substitution of heirs is not necessary when the heirs themselves voluntarily appeared, shared in the case and presented evidence in defense of deceased defendant. 2. The proceedings and judgment of the trial court are void only as to the heirs who did not participate in the trial. There is no iota of proof that they were apprised of the litigation against Glicerio. There is no indication that they authorized Atty. Pardalis to represent them or any showing that they appeared in the proceedings. Given these facts, the trial court clearly did not acquire jurisdiction over their persons. Such being the case, these heirs cannot be bound by the judgment of the trial court Sunflower Neighborhood Solidbank Corporation v Arrieta
Facts: Carmen Arrieta is a bank depositor of Solidbank Corporation. She issued an SCB check in the amount of P330.00 in the name of Lopue’s Department Store in payment of her
purchases from said store. When the check was deposited by the store to its account, the same was dishonored due to “Account Closed” despite the fact that at the time the check was presented for payment, Carmen’s checking account was still active and backed up by a deposit of P1.275.20. Consequently, the department store sent a demand letter to Carmen threatening her with criminal prosecution unless she redeemed the check within 5 days. To avoid criminal prosecution, Carmen paid 330.00 in cash to the store and a surcharge of 33 for the bouncing check. Carmen filed a complaint against Solidbank Corporation for damages alleging that the bank, by its carelessness in certifying that her account was closed, destroyed her and her family’s good name and reputation in the form of mental anguish, sleepless nights etc.... The bank claimed that Carmen violated conditions governing the establishment of operation of a current account and her account was recommended for closure. In any case, the bank claimed good faith in declaring her account closed because one of the clerks, who substituted for the regular clerk, committed an honest mistake when he thought that the subject account was already closed when the ledger containing the said account could not be found. Trial Court and the CA ruled in favor of Carmen. Issue: Whether or not respondents are entitled to damages Held: Yes. Case law lays out the following conditions for the award of moral damages: 1. there is an injury – whether physical, mental of psychological – clearly sustained by the claimant 2. culpable act or omission is factually established. 3. the wrongful act or omission of the defendant is the proximate cause of the injury sustained by the claimant 4. the award of damages is predicated on any of the cases stated in Article 2219 of the Civil Code. All 4 requisites were established: 1. Carmen is a longstanding depositor of Solidbank, a department secretary of CENECO (cooperative), deaconess of Christian Alliance Church. Understandably she suffered anguish and social humiliation when people learned and talked about her bounced check. 2. it is undisputed that subject check was wrongfully dishonored. 3. the wrongful dishonor was the proximate cause of her humiliation 4. treating the account as closed merely because the ledger could not be found was a reckless act that could not be simply be brushed off as an honest mistake. The negligence in this case was so gross as to amount to a willful injury. Art 21 of CC states that any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damages, Art. 2219 provides for the recovery of moral damages for act referred to in the Art 21. Hence, the bank is liable. REPUBLIC VS. AGUNOY
Facts: Gregorio Agunoy filed his application for free patent over Lots 1341 and 1342, an 18-ha. parcel of land. This application was granted. The free patent led to the issuance of OCT P-
4522. Shortly after, the heirs of Perez caused an annotation of an adverse claim in their favor over 15.1 hectares of the land covered by OCT P-4522. The heirs of Perez later filed a formal protest. The investigation of the Bureau of Lands show that the free patent in favor of Agunoy was indeed fraudulently obtained. Despite the protest, numerous transactions regarding the land were made on the Agunoy side (subdivision of the lots, sales, mortgages) causing the heirs of Perez to file a supplemental protest. On investigation by the Bureau of Lands, it was found that an OCT for the lot covered by the free patent already existed at the time of the granting of the free patent. These facts brought the Republic, through the OSG, to file a case against several defendants who are successors-in-interest of Agunoy. Issue: Whether or not the Republic is a real party-in-interest Held: The Republic is not the real party-in-interest. To qualify a person to be a real party-ininterest in whose name an action must be prosecuted, he must appear to be the present real owner of the right sought to be enforced. As stated in the facts, the land sought to be reconveyed in the Republic's suit belongs to a private party by virtue of the OCT previously issued to such party and is no longer a disposable public land at the time of the fraudulent granting of free patent. The Republic then no longer has a right to the reconveyance of the land. Rioferio v CA
Facts: Alfonso Orfinada Jr. died intestate and left properties in Angeles, Dagupan and Kalookan. He had a wife and seven legitimate children. He also had a paramour, with whom he had 3 illegitimate children. The legitimate children learned that the paramour, along with her children, executed an Extrajudicial Settlement of Estate of a Decease Persond involving the properties of their father. As a consequence, the deceased’s land in Dagupan were transferred under the name of the illegitimate children. Alfonso III, a legitimate child of the deceased, filed a Petition for Letters of Administration before the RTC of Angeles (SP 5118). Subsequently, the legitimate heirs file a complaint to annul the extrajudicial settlement of the estate of their deceased father. The illegitimate children assert that the real party-in-interest in the case for annulment is the Estate of Alfonso Orfinada, and not his legitimate children, since administration proceedings have already been instituted.
The RTC held that the legitimate children, as heirs, are the real parties-in¬interest especially since no administrator has yet been appointed in SP 5118. Issue: Whether or not the heirs have legal standing to prosecute the rights belonging to the deceased subsequent to the commencement of the administration proceedings. Held: Heirs have legal standing. Even if administration proceedings have already been commenced, the heirs may still bring the suit if an administrator has not yet been appointed. The Court cited Gochan v Young, stating: No rule categorically addresses the situation in which special proceedings for the settlement of an estate have already been instituted, yet no administrator has been appointed. In such instances, the heirs cannot be expected to wait for the appointment of an administrator, then wait further to see if the administrator appointed would care enough to file a suit to protect the rights and the interests of the deceased; and in the meantime do nothing while the rights and the properties of the decedent are violated or dissipated.
Therefore, the rule that heirs have no legal standing to sue for the recover of the property of the estate during the pendency of admin proceedings now has three exceptions: 1. if the executor or administrator is unwilling or refuses to bring suit 2. when the administrator is alleged to have participated in the act complained of and he is made a party defendant 3. where there is no appointed administrator. HEIRS OF BERTULDO HINOG vs. MELICOR
FACTS: Balane brothers filed a case against Bertuldo Hinog. Trial on the merits proceeded. Hinog died. New counsel was hired. Hinog’s new lawyer filed a motion to have the complaint against his client expunged from the records and the proceedings nullified due to the failure of the Balane brothers to pay the prescribed docket fees. Court granted this motion, but reinstated the case when the Balane brothers paid the deficiency docket fees. Thereafter, Hinog filed supplemental pleadings. A few months thereafter, petitioner heirs filed with the SC a petition for certiorari and prohibition, alleging that the public respondent committed GAD in allowing the case to be reinstated after the Balane brothers paid the deficiency docket fees since the TC had earlier expunged the complaint from the records and nullified the proceedings and the private respondents did not contest this. Moreover, they argue that the TC committed GAD in allowing the reinstatement of the case despite the defect in the complaint which prayed for damages without specifying the amounts, in violation of an SC circular. ISSUES: (1) Whether or not direct resort to the SC in this case was proper? (2) Whether or not the petitioners were right in challenging the jurisdiction of the court to reinstate the case upon the payment of the deficiency docket fees? (3) Whether or not reinstatement of the present case was proper? (4) Whether or not there was proper substitution of parties? HELD: (1) Direct resort to the SC was NOT proper. Petitioners must observe the proper hierarchy of courts. A direct invocation of the SC’s original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition. The rationale for this rule is two-fold: (a) it would be an imposition upon the precious time of this Court; and (b) it would cause an inevitable and resultant delay, intended or otherwise, in the adjudication of cases, which in some instances had to be remanded or referred to the lower court as the proper forum under the rules of procedure, or as better equipped to resolve the issues because this Court is not a trier of facts. this case, no special and important reason or exceptional and compelling circumstance analogous to any of the above cases has been adduced by the petitioners so as to justify direct recourse to this Court. The present petition should have been initially filed in the Court of Appeals in strict observance of the doctrine on the hierarchy of courts. Failure to do so is sufficient cause for the dismissal of the petition at bar. (2) Petitioners are estopped from challenging the jurisdiction of the TC. After recognizing the jurisdiction of the TC by seeking affirmative relief in the motion to serve a supplemental pleading upon private respondents, petitioners are effectively barred by estoppels from challenging this TC’s jurisdiction. If a party invoked the jurisdiction of a court, he cannot thereafter challenge it in the same case. To rule otherwise would amount to speculating in the fortune of litigation, which is against the policy of the court.
(3)
Reinstatement is proper
Plainly, while the payment of the prescribed docket fee is a jurisdictional requirement, even its non-payment at the time of filing does not automatically cause the dismissal of the case, as long as the fee is paid within the applicable prescriptive or reglementary period, more so when the party involved demonstrates a willingness to abide by the rules prescribing such payment. Thus, when insufficient filing fees were initially paid by the plaintiffs and there was no intention to defraud the government, the Manchester rule does not apply. Under the peculiar circumstances of this case, the reinstatement of the complaint was just and proper considering that the cause of action of private respondents, being a real action, prescribes in thirty years, and private respondents did not really intend to evade the payment of the prescribed docket fee but simply contend that they could not be faulted for inadequate assessment because the clerk of court made no notice of demand or reassessment. They were in good faith and simply relied on the assessment of the clerk of court. (4)
There was no proper substitution of parties.
No formal substitution of the parties was effected within thirty days from date of death of Bertuldo, as required by Section 16, Rule 3 of the Rules of Court. Needless to stress, the purpose behind the rule on substitution is the protection of the right of every party to due process. It is to ensure that the deceased party would continue to be properly represented in the suit through the duly appointed legal representative of his estate. Non-compliance with the rule on substitution would render the proceedings and judgment of the trial court infirm because the court acquires no jurisdiction over the persons of the legal representatives or of the heirs on whom the trial and the judgment would be binding. Thus, proper substitution of heirs must be effected for the trial court to acquire jurisdiction over their persons and to obviate any future claim by any heir that he was not apprised of the litigation against Bertuldo or that he did not authorize Atty. Petalcorin to represent him. The list of names and addresses of the heirs was submitted sixteen months after the death of Bertuldo and only when the trial court directed Atty. Petalcorin to comply with the provisions of Section 16, Rule 3 of the Rules of Court. Strictly speaking therefore, before said compliance, Atty. Petalcorin had no standing in the court a quo when he filed his pleadings. Be that as it may, the matter has been duly corrected by the Order of the trial court dated October 15, 1999.
III.
Venue - Rule 4
Benguet Management Corporation vs. CA
Facts: BMC and KBPI entered into a Loan Agreement and Mortgage Trust Indenture whereby BMC loaned 190M Pesos with a mortgage in favor of KBPI over lots in Alaminos, Laguna and Iba, Zambales. BMC failed to pay when it became due.KBPI filed an application for extrajudicial foreclosure before RTC Zambales. Later another was filed in San Pablo, Laguna with a certification that foreclosure fees were paid by KBPI in Iba, Zambales already. BMC filed in San Pablo a request not to give due course to KBPI’s application. It alleged insufficiency in form and substance and because KBPI included unauthorized penalties and did not give them a 60-day grace period. A complaint was filed in Zambales with similar averments.The foreclosure in Laguna pushed thru. BMC tried to stop the registration of the properties. The payment of foreclosure fees was questioned in relation to the legality of the auction sale and as to the venue of the sale and more importantly as to forum shopping on the part of BMC
in filing several injunction suits as its remedy against KBPI. Issue: What fees need the applicant in a foreclosure of a mortgage pay and where? Held: The Court held that an applicant in an extra judicial foreclosure of mortgage under A.M. No. 99-10-05-0 covering different properties in different provinces is required to pay only one filing fee regardless of the number of properties to be foreclosed so long as the application covers only one transaction or indebtedness (payment of fees is JURISDICTIONAL). The Venue however of the extrajudicial proceedings is the place where each mortgaged property is located. BMC is not guilty of forum shopping naturally as the venue for availing a remedy against such proceedings is also located in different provinces. They were even honest enough to certify the pendency of similar proceedings in the Zambales court. Bank of America NT & SA v. CA
Eduardo and Aurelio Litonjua owned 2 vessels and were engaged in the shipping business through their wholly owned corporations. They deposited their revenues with branches of Bank of America in the UK and HK. The banks induced them to add ships in their operation, offering easy loans. It acquired, through Litonjuas’ corporation as borrowers, 4 more ships. The operation and funds derived, as well as possession of the ships, were placed under the control of the persons designated by the bank. Due to the banks’ breach of fiduciary duties and/or negligence in the operation of the 6 vessels, the revenues derived from the operation of all the vessels declined drastically. The loans were not paid prompting the banks to have all 6 vessels foreclosed. The Litonjuas also lost, from their personal funds, equivalent to 10% of the acquisition cost of the 4 vessels and were left with the unpaid balance of their loans with the banks. The Litonjuas claim that, as trustees, the banks did not fully render an account of the income derived from the business and the proceeds of the subsequent foreclosure sale. They filed a complaint with the RTC of Pasig, praying for an accounting of the revenues derived in the operation and of the proceeds of foreclosure proceedings, as well as damages for breach of trust. The banks filed a Motion to Dismiss on grounds of forum non conveniens. The RTC and CA denied the banks’ motions. Issue: Whether or not the complaint be dismissed on the ground of forum non-conveniens? Held: No, the complaint should not be dismissed. The doctrine of forum non-conveniens, literally meaning ‘the forum is inconvenient’, aims to deter the practice of global forum shopping, that is to prevent non-resident litigants from choosing the forum or place wherein to bring their suit for malicious reasons, such as to secure procedural advantages, to annoy and harass the defendant, to avoid overcrowded dockets, or to select a more friendly venue. Under this doctrine, a court, in conflicts of law cases, may refuse impositions on its jurisdiction where it is not the most “convenient” or available forum and the parties are not precluded from seeking remedies elsewhere. Whether a suit should be entertained or dismissed on the basis of said doctrine depends largely upon the facts of the particular case and is addressed to the sound discretion of the trial court. A Philippine Court may assume jurisdiction over the case if it chooses to do so,
provided that the following requisites are met: (1) that the Philippine Court is one to which the parties may conveniently resort to; (2) that the Philippine Court is in a position to make an intelligent decision as to the law and the facts; and, (3) that the Philippine Court has or is likely to have power to enforce its decision.” All these requisites are present in the instant case. CABUTIHAN vs. LANDCENTER CONSTRUCTION
Facts: On December 3, 1996, respondent (Landcenter) entered into a contract with petitioner (Cabutihan). The agreement stipulated that the petitioner would assist the respondent in facilitating and arranging the recovery of certain properties in consideration for 20% of the total area of the property thus recovered. The respondent breached the agreement. Petitioner filed an action for specific performance with damages. Respondent filed a motion to dismiss on the ground that venue was improperly laid. The respondent asserts that since the present case filed by the petitioner is for the recovery of her interest in the respondent corporation’s land, then the action was in rem, thus according to Rule 4 Section 1, the case should have been filed in the court having jurisdiction over the subject property. The respondent also argued that there was a misjoinder or non-joinder of parties to the case and that the paid filing fee was insufficient. Issue: was venue properly laid? Held: We agree with petitioner. Sections 1 and 2, Rule 4 of the Rules of Court provide an answer to the issue of venue. Actions affecting title to or possession of real property or an interest therein (real actions), shall be commenced and tried in the proper court that has territorial jurisdiction over the area where the real property is situated. On the other hand, all other actions, (personal actions) shall be commenced and tried in the proper courts where the plaintiff or any of the principal plaintiffs resides or where the defendant or any of the principal defendants resides. The Court reiterated the rule that a case for specific performance with damages is a personal action, which may be filed in a court where any of the parties reside. In the present case, petitioner seeks payment of her services in accordance with the undertaking the parties signed. Breach of contract gives rise to a cause of action for specific performance or for rescission. If petitioner had filed an action in rem for the conveyance of real property, the dismissal of the case would have been proper on the ground of lack of cause of action. Neither a misjoinder nor a non-joinder of parties is a ground for the dismissal of an action. Parties may be dropped or added by order of the court, on motion of any party or on the court’s own initiative at any stage of the action. True, Section 5, Rule 141 of the Rules of Court requires that the assessed value of the real estate, subject of an action, should be considered in computing the filing fees. But the Court has already clarified that the Rule does not apply to an action for specific performance, which is classified as an action not capable of pecuniary estimation. RODOLFO V. JAO V. COURT OF APPEALS AND PERICO V. JAO
Facts: Rodolfo and Perico were the sons and heirs of Spouses Ignacio Jao Tayag and Andrea v. Jao who died intestate on 1988 and 1989, respectively. The decedents left real estate, cash, shares of stock and other personal properties. Perico then instituted a petition in RTC Quezon City (QC) for the issuance of letters of administration over the estate of their
parents, alleging among other things, that his brother Roberto was dissipating the estate’s assets and was receiving rentals from several properties without rendering the necessary accounting and forcibly opening vaults and disposing of the cash and valuables therein. Rodolfo moved to dismiss (MTD) the petition on the ground of improper venue. He alleged that the petition should have been instituted in Angeles City, Pampanga (AC) where their mother used to run a bakery and truly reside. He submitted documentary evidence previously executed by their parents such as income tax returns, voter’s affidavits, statement of assets and liabilities, real estate tax payments, vehicle registration and passports, all indicating that their residence was in AC. Perico countered that the residence at the time of death was in QC, as their parents who were already undergoing medical treatment in the Medical City in Mandaluyong have been staying in Rodolfo’s house in QC for four years and that in their death certificates, Rodolfo himself, filled in as place of residence, his address in QC and thereafter, affixed his signature. Rodolfo filed a rejoinder and asserted that he only put his address as reference and that he did so by mistake and in good faith and further maintaining that it is AC and not Q C that should be the proper venue. Upon the failure of both parties to nominate for the estate’s administrator, the court appointed Carlos Sundiam and denied Rodolfo’s MTD, further ruling that he cannot disown his own representations by taking an inconsistent position on his own admission. Via petition for Certiorari, Rodolfo appealed and the CA affirmed the denial. MFR was also denied. ISSUE: WHERE SHOULD THE SETTLEMENT PROCEEDINGS BE HAD--- IN AC, WHERE THE PARENTS/DECEDENTS HAD THEIR PERMANENT RESIDENCE OR IN QC, WHERE THEY ACTUALLY STAYED BEFORE THEIR DEMISE? HELD: The estate of an inhabitant of the Philippines shall be settled or letters of administration granted in the proper court located in the province where the decedent resides at the time of his death. (Sec. 1, Rule 73, RoC). Rodolfo’s contention invoking the case of Eusebio v. Eusebio was misplaced as the facts therein differed from the case at bar. Unlike in Eusebio, there is substantial proof that the decedents have transferred to R’s QC residence and other factors indicate that their stay was more than temporary. Rodolfo failed to sufficiently refute Perico’s assertion that their elderly parents stayed in R’s house for some three to four years before they died in the late 1980s. Furthermore, the decedents’ respective death certificates state that they were both residents of Quezon City at the time of their demise. Significantly, it was Rodolfo himself who filled up his late mother’s death certificate. To the SC, this unqualifiedly shows that at that time, at least, R recognized his deceased mother’s residence to be QC. Philippine Bank of Communications vs. Lim
Philippine Bank of Communications filed a complaint against Lim et.al, for the collection of a deficiency amounting to P4M exclusive of interest. PBC alleged that Lim et.al obtained a loan from it and executed a continuing surety agreement in favor of PBC for all loans, credits, etc., that were extended or may be extended in the future to Lim et. It was expressly stipulated therein that the venue for any legal action that may arise out of said promissory note shall be Makati City, ‘to the exclusion of all other courts. Lim et failed to pay, hence this case. Lim moved to dismiss the complaint on the ground of improper venue(case was filed in Manila), invoking the stipulation contained in the last paragraph of the promissory
note with respect to the restrictive/exclusive venue. Motion denied. CA reversed RTC. PBC appeals. Issue: WON a restrictive stipulation on the venue of actions contained in a promissory note applies to the surety agreement supporting it Ruling: It should. A restrictive stipulation on the venue of actions contained in a promissory note applies to the surety agreement supporting it, because the nature of the two contracts and the factual circumstances surrounding their execution are intertwined or interconnected. The surety agreement is merely an accessory to the principal loan agreement embodied in the promissory note. Hence, the enforcement of the former depends upon the latter. Suretyship arises upon the solidary binding of a person -- deemed the surety -- with the principal debtor, for the purpose of fulfilling an obligation. The prestation is not an original and direct obligation for the performance of the surety’s own act, but merely accessory or collateral to the obligation contracted by the principal. Although the surety contract is secondary to the principal obligation, the surety assumes liability as a regular party to the undertaking. In enforcing a surety contract, the “complementary-contracts-construed¬together” doctrine finds application. *23+ According to this principle, an accessory contract must be read in its entirety and together with the principal agreement.[24] This principle is used in construing contractual stipulations in order to arrive at their true meaning; certain stipulations cannot be segregated and then made to control.[25] This no-segregation principle is based on Article 1374 of the Civil Code, which we quote: “Art. 1374. The various stipulations of a contract shall be interpreted together, attributing to the doubtful ones that sense which may result from all of them taken jointly.” The aforementioned doctrine is applicable to the present case. Incapable of standingflores by itself, the SA can be enforced only in conjunction with the PN. The latter documents the debt that is sought to be collected in the action against the sureties. PBC argues based on Section 5 of Rule 2 of the Rules of Court. However, the cause of action, however, does not affect the venue of the action. Pilipino Telephone Corporation vs. Tecson
Facts: Tecson applied for six (6) cellular phone subscriptions with Pilipino Telephone, which were approved by six (6) mobile service agreements. After a few years, Tecson filed a complaint against Pilipino Telephone for A Sum Of Money in RTC Lanao del Norte. Pilipino Telephone moved for the dismissal of the complaint on the ground of improper venue, citing a provision in the mobile service agreement that all venue of suits arising from such Agreement shall be brought to the Makati Courts, with the subscriber expressly waiving all other venues. Issue: Whether or not the case should be litigated in Lanao del Norte despite provision in the mobile service agreement that suits between such parties be litigated in Makati City? Held: The suit in Lanao should be dismissed for improper venue. Section 4, Rule 4 of the Revised Rules of Civil Procedure allows parties to agree and stipulate in writing, before the filing of an action, on the exclusive venue of any litigation between them. Such an agreement would be valid and binding provided that the stipulation on the chosen venue is exclusive in nature or in intent, that it is expressed in writing by the parties thereto, and that it is entered into
before the filing of the suit. The provision in the Mobile Service Agreement concerning Makati Courts as to the venue of suits complies with the aforementioned requisites. The lower court’s ruling on the agreement (as to venue) as not binding on Tecson because it is a contract of adhesion is of no moment. Contracts of adhesion are not per se inefficacious. It is only struck down when such contracts leave the weaker party with no choice by the dominant bargaining party. Such is not present in this case. Respondent secured six (6) subscription contracts for cellular phones. Tecson had sufficient opportunity to read and go over the terms and conditions embodied in the agreements. Suit is dismissed for improper venue.
IV.
Summary Procedure - Rule 5
JALIQUE Vs DANDAN
FACTS: Spouses Jalique filed a complaint for unlawful detainer against respondents before the MeTC of Pasig City. The Jaliques alleged that they are the registered owners of the lot and the respondents are the tenants of a portion of the lot based on a month to month verbal agreement. The Jaliques averred that the respondents refused to formalize their lease agreement and therefore they were left with no choice but to terminate the lease agreement. The respondents refused to vacate despite demands made by the Jaliques. Respondents did not file an Answer to the complaint, but filed a Joint Counter Affidavit, disputing the material allegations of the Complaint and presenting valid issues. The Jaliques filed a Motion for Judgment on the Complaint. The MeTC , finding that the respondents failed to file an Answer, rendered judgment (in favor of the Jaliques) on the Complaint pursuant to Sec. 6 of the Revised Rule on Summary Procedure. Respondents appealed. RTC affirmed the decision of the MeTC. CA annulled the RTC decision and decreed that the case be remanded to the MeTC for hearing on the merits. ISSUE: Whether or not the CA erred in annulling and setting aside the decisions of the MeTC and the RTC and ordering the case be remanded to the MeTC for hearing on the merits. HELD: No. The CA did not err in remanding the case to the MeTC for hearing on the merits. The rules on Summary Procedure were promulgated to achieve an expeditious and inexpensive determination of cases specially in unlawful detainer cases because they involve possession of property posing a threat to the peace of the society. However, in this case, the situation calls for a liberal, not technical and rigid, interpretation of the rule on Summary Procedure in the light of the presence rather than a total absence of a responsive pleading. The Joint Counter Affidavit shows that it disputed the material allegations of the Complaint and presented valid issues for the lower court’s resolution, such as the ownership of the subject lot, the period of lease, right of reimbursement for improvements and the right to eject. Not all lawyers are gifted with the skill to craft pleadings that fully meet the requirements as to substance and form. But what matters is the substance and not the form. In addition, what is important is that the case be decided upon merits and that it should not be allowed to go off on procedural points. Siasat vs. CA • • •
Case for ejectment. Summons were duly issued on December 18, 1991. On January 2, 1992, reglementary period expired without the petitioners filing an answer. Thus, they were declared in default.
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On January 20, 1992, 28 days after the expiration of the period to answer, Atty. Vitan, counsel for petitioners, filed a “Motion to Lift Order of Default.” The motion was denied. On 23 March 1992, a decision was rendered by the MTC against petitioners. No appeal was filed resulting in the issuance of a writ of execution. Sheriff served the writ of execution with respect to the ejectment aspect of the case. Relative to the monetary aspect, sheriff levied upon sewing machines and other personal properties. Sale did not materialize due to an order scheduled sale did not materialize due to an order of Executive Judge in connection with the Petition for Relief from Judgment (of the MTC decision) with preliminary injunction and restraining order filed by petitioners with the Makati Regional Trial Court. In the petition for relief from judgment, petitioners Siasat and Ong blamed Atty. Vitan for the alleged negligence and bad faith in causing them to be in default and in failing to appeal. On 25 May 1992, the RTC issued the writ of preliminary injunction, enjoining the sheriff from proceeding with the auction sale of the personal properties of Siasat.
Issue: Whether there exist genuine issues of material facts constitutive of petitioners’ substantial and meritorious claim. Held: The case at bar arose from “a simple ejectment” of petitioners from the leased premises initiated in the Metropolitan Trial Court, Makati. The Revised Rule on Summary Procedure covers all ejectment cases, regardless of whether they involve questions of ownership. Under that Rule, a petition for relief from judgment is a prohibited pleading. Hence, a party to an ejectment suit in the municipal trial court may not file such pleading in the regional trial court. Bonifacio Law Office vs. Bellosillo
Facts: Atty. Salomon of the Bonifacio Law Office charged then acting Judge Bellosillo with ignorance of the law, grave abuse of discretion, and obvious partiality. The respondent issued an Order referring the ejectment case back to the barangay for conciliation proceedings despite the copy of the Certification to File Motion attached to the verified complaint. Complainant assailed the said Order. The Court insisted that the case be referred back to the barangay and hence, the complainant decided to just file a notice to withdraw complaint. However, the said dismissal was denied. It was only after a year from the time the complaint was filed that respondent ordered the summons be served on defendants. When defendants failed to file an Answer, he filed a Motion to Render Judgment in accordance with the provisions of Sec. 5 of the Rules on Summary Procedure. However, instead of rendering judgment, respondent merely required defendants to comment on the motion to render judgment. After defendants filed their comment, respondent still did not act on the said motion. Issue: Should the judge be held administratively liable for ignorance of the law, grave abuse of discretion, and obvious partiality? Held: The records show that the Certification to File Action was improperly and prematurely issued as there was no personal confrontation before a duly constituted Pangkat ng Tagapagkasndo. Hence, respondent was not incorrect in remanding the case to
the barangay for completion of the mandated proceedings. His act cannot be equated with gross ignorance of the law. The judge issued summons and opted to continue with the court proceedings without insisting on strict compliance with the mandated barangay proceedings. He did so after noting that the case fell under the Rules on Summary Proceedure. Such act of the judge is a judicial error and cannot be corrected in administrative proceedings. Because he chose to continue with the proceedings of the case, and because respondents failed to answer the ejectment Complaint on time, he should have rendered judgment within 30 days from the expiration of the period to file an answer. (Sec. 6 and 10, Rules on Summary Proceedings) He rendered judgment almost a year from the time the case had been deemed submitted for resolution. Failure of judges to decide cases with dispatch constitutes gross inefficiency and warrants the imposition of administrative sanctions on them. The respondent was found guilty of undue delay in rendering a decision. FRANCISCA PASCUAL vs. JUDGE EDUARDO JOVELLANOS
Facts: The complainant, Francisca Pascual, filed a complaint for forcible entry against Lorenzo Manaois. At first, it was dismissed for being insufficient in some material allegations. After filing a corrected complaint, the defendant instead of filing an answer filed a Motion to Strike Out saying that the new allegations were false. As the period to answer lapsed without the defendant having filed one, Pascual filed a Motion for Summary Judgment of which the defendant opposed. Judge Jovellanos granted the Motion to Strike Out of the defendant. Pascual filed a Motion for Reconsideration. This led to the filing of the administrative complaint charging the judge with gross ignorance of the law, bias and partiality, abuse of discretion and neglect of duty. Meanwhile, the defendant took advantage of the situation by starting the construction of a building. Pascual filed an Application of Preliminary Injunction which was granted by the Judge. On the last day of the effectivity of the TRO, she filed an Extremely Urgent Ex-Parte Motion to grant her application for injunction which was however until the promulgation of this SC decision has not been ruled upon by the Judge. Issue: WON the Judge may be held liable for the charges mentioned in the administrative complaint filed against him. Held: OCA, after its investigation, found that the respondent Judge indeed failed to apply the Rule on Summary Procedure and recommended that he be fined P10,000.00 and be warned. However, the SC, notwithstanding its agreement with the findings of the OCA, increased the penalty as this was the respondent’s second infraction. The SC found that Judge Jovellanos lacks the awareness of the relevant provisions on ejectment. He has evidently been remiss in resolving the forcible entry case, pursuant to the Revised Rules on Summary Procedure. The judgment should have bee rendered based on the allegations of the Complaint an the evidence presented therein,inasmuch as the defendant failed to file his answer after the lapse of 10 days from the service of the summons. Sec. 6 allows the Court to render judgment, even motu propio, upon failure of the defendant to file an answer within the reglementary period. Moreover, under Sec. 10, respondent was duty-bound to render his decision within 30 days from receipt of the last
affidavits and position papers, or the expiration of the period for filing them. Further, respondent failed to apply these very basic rules when he granted the defendant’s Motion to Strike Out which was in reality a Motion to Dismiss, a prohibited pleading. Likewise in the Order he issued when he ruled that the complaint in Civil Case No. 740 was a mere rehash of the dismissed complaint in Civil Case No. 730, he cited that Sec. 12 of Rule 8 as his basis. This is an obvious mistake showing gross ignorance of the law because forcible entry is a civil case governed by the Rules on Summary Procedure. Lack of knowledge of the Rules on Summary Procedure reflects a serious degree of incompetence. Boy vs. Court of Appeals (ROBLES)
Facts: Lagrimas Boy (Lagrimas) sold her house and lot to the Ramos Spouses. They agreed that Lagrimas be given time to vacate the premises, but when time came the Ramos spouses needed the house, they demanded Lagrimas to vacate the premises, but she refused to do so. Hence, the Ramos spouses initiated an action for ejectment against Lagrimas in the Metropolitan Trial Court (MeTC). Lagrimas defense was that she still owned the subject property because the Ramos spouses allegedly had not yet paid the remaining balance. She contends that because of the issue of ownership, the MeTC is without jurisdiction to hear the ejectment case. Issue: Whether or not the Lagrimas' defense of ownership divests the MTC of the jurisdiction to hear the ejectment case. Held: No. Prior to the effectivity of B.P. Blg. 129 (The Judiciary Reorganization Act), the jurisdiction of inferior courts was confined to receiving evidence of ownership in order to determine only the nature and extent of possession, by reason of which such jurisdiction was lost the moment that it became apparent that the issue of possession was woven with that of ownership. With the enactment of B.P. Blg. 129, inferior courts were granted jurisdiction to resolve questions of owndership provisionally in order to determine the issue of possession. Thus, in forcible entry and unlawful detainer cases, if the defendant raises the question of ownership in his pleadings and the question of possession cannot be resolved without deciding the isssue of ownership, the inferior courts may provisionally resolve the issue of ownership for the sole purpose of determining the issue of possession. The MTC did not, therefore, err in taking cognizance of the instant case. Quiros v. Arjona (SEE) 425 SCRA 57
Facts: Petitioners Quiros and Villegas filed with the office of the barangay captain of Labney, Pangasinan a complaint for recovery of ownership and possession of a parcel of land. Both sought to recover from their uncle Arjona their late grandmother. On January 5, 1997, an amicable settlement was reached by the parties. In said agreement, respondent Arjona undertook to "give a land consisting of more or less one hectare" to Quiros and Villegas. Petitioners rely on Section 416 of the LGC which provides that an amicable settlement shall have the force and effect of a final judgment upon the expiration of 10 days from the date thereof, unless repudiated or nullified by the proper court. Petitioners filed a complaint with the MCTC with prayer for the issuance of a writ of
execution of the compromise agreement which was denied because the subject property cannot be determined with certainty. RTC reversed the decision and ordered the issuance of the writ of execution. CA reversed the decision of the RTC and reinstated the decision of the MCTC. Issue: (1) Whether the amicable settlement between the parties is valid and enforceable. (2) Whether a writ of execution may issue on the basis of the amicable settlement. Held: (1) YES. There was meeting of the minds between the contracting parties. In executing the Agreement, the respondent undertook to convey 1 hectare of land to petitioners who accepted. The object is a 1 hectare parcel of land representing petitioners' inheritance from their deceased grandmother. The cause of the contract is the delivery of petitioners' share in the inheritance. The inability of the municipal court to identify the exact location of the inherited property did not negate the principal object of the contract. This is merely an error occationed by the failure of the parties to dexcribe the subject ptoperty, which is correctible by reformation and does not indicate the absence of the principal object as to render the contract void. (2) NO. Generally, where no repudiation was made during the 10-day period, the amicable settlement attains the status of finality and it becomes the ministerial duty of the court to implement and enforce it. However, such rule is not inflexible. The imperatives of substantial justice, or facts that may have transpired after the finality of judgment which would render its execution unjust, may warrant the suspension of execution of a decision that has become final and executory. In the case at bar, the ends of justice would be frustrated if a writ of execution is issued considering the uncertainty of the object of the agreement. To do so would open the possibility of error and future litigations. The Agreement executed by Arjona purports to convey a parcel of land consisting of more or less 1 hectare to petitioners. Another Agreement, prepared on the same date and executed by Banda who signified his intention to vacate the parcel of land he was tilling located at Torrod, Labney, Pangasinan, for and in behalf of the Arjona family. On ocular inspection however, the municipal trial court found that the land referred to in the second Agreement was different from the land being occupied by the petitioners. Hence, no writ of execution could be issued for failure to determine with certainty what parcel of land Arjona intended to convey.
V.
Preliminary Conference
Macasaet v.Macasaet, G.R.Nos. 154391-92, September 30, 2004 FACTS: The present case involves a dispute between parents (respondents Vicente and Rosario Macasaet) and children (petitioners Ismael and Teresita Macasaet). The children were invited by the parents to occupy the latter’s two lots, out of parental love and a desire to foster family solidarity. Unfortunately, an unresolved conflict terminated this situation. Out of pique, the parents asked them to vacate the premises and filed an ejectment suit with the MTCC. The MTCC ruled in favor of respondents, thus the children lost their right to remain on the property. On appeal, the RTC upheld the findings of the MTCC, but applied Article 448 of the Civil Code (petitioners have the right to be indemnified for the usual improvements that they constructed in good faith). Upon denial of their individual Mrs, the parties filed with the CA separate Petitions for Review, which were later consolidated.
Petitioners claim that the MTCC should have dismissed the case upon the failure of respondents to attend the conference. However, petitioners do not dispute that an attorneyin-fact with a written authorization from respondents appeared during the preliminary conference. ISSUE: Whether or not the rule on appearance of parties during the Pretrial should apply on appearance of parties during Preliminary Conference in an unlawful detainer suit. (Whether the rules on ejectment allow a representative to substitute for a party’s personal appearance.) HELD: Yes, it should apply. Section 8 of Rule 70 of the ROC requires the appearance of the plaintiff and the defendant during the preliminary conference. Unless inconsistent with Rule 70, the provisions of Rule 18 on pretrial applies to the preliminary conference. Under Sec 4 of this Rule, the non-appearance of a party may be excused by the showing of a valid cause; or by the appearance of a representative, who has been fully authorized in writing to enter into an amicable settlement, to submit to alternative modes of dispute resolution, and to enter into stipulations or admissions of facts and of documents. Section 4 of Rule 18 may supplement Section 8 of Rule 70. Thus, the spirit behind the exception to personal appearance under the rules on pretrial is applicable to the preliminary conference. If there are valid reasons of if a representative has a “special authority,” a party’s appearance may be waived. As petitioners are challenging only the applicability of the rules on pretrial to the rule on preliminary conference, the written authorization from respondents can indeed be really considered as a “special authorization.” Tugot vs. Coliflores 423 SCRA 1 (VILLAMOR)
Facts: This case is rooted in an administrative case against Judge Mamerto Coliflores filed by one Rodrigo Tugot, plaintiff in an ejectment case. Among the charges against the judge was that Coliflores failed to conduct the preliminary conference within the period mandated by the Rules of Court. For while in his August 28, 1995 order he acknowledged the filing of the last pleading, scheduled the “pre-trial conference” for September 26, 1995 and directed the parties to submit their “Pre-Trial Briefs” three days before the hearing, he, however, noted the filing of defendant’s Pre-Trial Brief, only in his Order dated November 11, 1997 – a period of over two years. Judge Coliflores based the delayed setting of the preliminary conference on the provisions of Rule 18 on pre-trial stating that such should be conducted after the last pleading has been served and filed and upon ex parte motion of the plaintiff that the case be set for pre-trial. Plaintiff Tugot, on the other hand, culled upon Section 8 of Rule 70. Issue: Whether or not Judge Coliflores is liable for administrative charges for failure to demonstrate the required competence in administrating the ejectment case vis-à-vis the conduct of preliminary conference? Held: Yes. It must be noted that unlawful detainer and forcible entry cases are covered by summary procedure. Accordingly, technicalities or details of procedure should be carefully
avoided. Judge Coliflores failed to observe the period within which to conduct preliminary conference which, according to Section 8 of Rule 70, shall be held “*n+ot later than thirty (30) days after the last answer is filed.” In the present case, the preliminary conference was conducted more than two years after the filing of the last answer. The respondent judge was mistaken in “thinking” that Rule 18 on pre-trial was the provision applicable to ejectment cases. Section 8 of Rule 70 allows the application of Rule 18, but only where the provisions of the latter are consistent with those of the former, being merely secondary thereto. It must be emphasized that the adoption of the Rule on Summary Procedure is part of the commitment of the judiciary to enforce the constitutional right of litigants to a speedy disposition of their cases. It was promulgated for the purpose of achieving “an expeditious and inexpensive determination of cases”. Any member of the judiciary who causes the delay sought to be prevented by the Rule is sanctionable.
VI.
PLEADINGS - Rules 6 to 9
BPI vs. CA, NLRC
Facts: 49 workers filed a Complaint against BPI and Diar’s Assistance, Inc. (agency) for the regularization of their work status. During the pendency of the case, the 49 workers prayed for the inclusion of 121 more as complainants after the latter had signified their intention to join the union. Thereafter, the Complaint was amended and the name of the complainant changed to that of the organization, Diar’s Employees Labor Union (Union) and prayed that the employment status of their members be regularized by BPI. Labor Arbiter dismissed the Complaint. NLRC affirms. The Union filed a new Complaint for the declaration of its members as regular employees of BPI. After Labor Arbiter dismissed the case for lack of merit, the union appealed to the NLRC. BPI and the agency opposed the appeal and interposed forum shopping as one of their defenses. The NLRC set aside the labor arbiter’s Decision and declared complainants as regular employees of BPI and on the issue of forum shopping, it ruled that the complainants in the first case are not the same complainants in this third case. Although the causes of action in the first case and this third case are the same – for the regularization of the members of complainant union – there is no identity of the parties involved. The second case is for injunction and the same is, therefore, not similar to this case.” BPI filed with the CA a Petition for Certiorari under Rule 65, assailing the NLRC Decision. The CA dismissed the recourse on the ground that the verification has been signed only by petitioner’s vice president, without express authority from any board resolution or power of attorney. Hence this appeal. Issues (1) whether BPI’s Petition should be dismissed due to irregularity of its verification (2) whether the second regularization case is barred by res judicata. Ruling First Issue: Dismissal of the Appeal on Technicality (The rules on verification and forum shopping are in Sec 4 & 5 of Rule 7 of the Rules of Court.) We hold that a liberal construction of the rules on verification and forum shopping are in order. 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.” Meanwhile, the purpose of the aforesaid certification is to prohibit and penalize the evils of forum shopping. We see no circumvention of these objectives by the vice president’s signing the verification and
certification without express authorization from any existing board resolution. BPI is an indispensable party to the controversy, considering that its inclusion is necessary for the effective and complete resolution of the case.The fact that respondent union commenced the case against BPI and Diar in a single Complaint is an indication of the indispensability of both parties to the action. Second Issue: Res Judicata Unquestionably, any ruling on the issue of res judicata would affect the final determination on the merits of the Complaint. This determination will, in turn, affect Diar, which is not impleaded as a party in the present appeal. Hence, it would not be proper for this Court to resolve the issue of res judicata without Diar as a party before it, in view of the pendency of the appeal. Case remanded Donato v. CA
Petitioner Donato filed a complaint for forcible entry and unlawful detainer against 43 named defendants and "all unknown occupants". The lower court ruled in favor of the 20 defendants who contended that they are protected by the Urban Land Reform Law. Petitioner then appealed to the CA but was not granted due to two grounds: (a) the certification of non-forum shopping was signed by petitioner's counsel and not by petitioner himself, in violation of Revised Circular No. 28-91; and, (b) the only annex to the petition is a certified copy of the questioned decision but copies of the pleadings and other material portions of the record as would support the allegations of the petition are not annexed, contrary to Section 3, paragraph b, Rule 6 of the Revised Internal Rules of the Court of Appeals (RIRCA).So Petitioner filed an MR attaching thereto a photocopy of the certification of non-forum shopping duly signed by the petitioner himself and the relevant records of the MeTC and the RTC. 5 days later, petitioner filed a Supplemental to his motion for reconsideration submitting the duly authenticated original of the certification of non-forum shopping signed by the petitioner. Issue: Whether or not petitioner has substantially complied with SC Circular No. 28-91? Held: This circular provides that the petitioner himself must make the certification against forum shopping and a violation thereof shall be a cause for the summary dismissal of the multiple petition or complaint. The rationale for the rule of personal execution of the certification by the petitioner himself is that it is only the petitioner who has actual knowledge of whether or not he has initiated similar actions or proceedings in other courts or tribunals; even counsel of record may be unaware of such fact.[23] The Court has ruled that with respect to the contents of the certification, the rule on substantial compliance may be availed of. This is so because the requirement of strict compliance with the rule regarding the certification of non-forum shopping simply underscores its mandatory nature in that the certification cannot be altogether dispensed with or its requirements completely disregarded, but it does not thereby interdict substantial compliance with its provisions under justifiable circumstances. [24] The petition for review filed before the CA contains a certification against forum shopping but said certification was signed by petitioner's counsel. In submitting the certification of non-forum shopping duly signed by himself in his motion for reconsideration, [25] petitioner has aptly drawn the Court's attention to the physical impossibility of filing the petition for review within the 15-day reglementary period to appeal considering that he is a resident of 1125 South Jefferson Street, Roanoke, Virginia, U.S.A. were he to personally accomplish and sign the certification.We fully agree with petitioner that it was physically
impossible for the petition to have been prepared and sent to the petitioner in the United States, for him to travel from Virginia, U.S.A. to the nearest Philippine Consulate in Washington, D.C., U.S.A., in order to sign the certification before the Philippine Consul, and for him to send back the petition to the Philippines within the 15-day reglementary period. Thus, we find that petitioner has adequately explained his failure to personally sign the certification which justifies relaxation of the rule. YOUNG VS. SENG
Facts: Respondent John Keng Seng (a.k.a. John Sy) filed a complaint for ‘accounting of general agency, injunction, turning over of properties, and damages,’ with the Regional Trial Court of Bacolod City (Branch 53), against petitioner Emilio Young and his wife. The private respondent subsequently filed an Amended Complaint with the same Court. The spouses Young, for their part, filed a Motion to Dismiss the case for lack of cause of action. Consequently, RTC issued an order dismissing the case. Respondent filed an MR of the order of dismissal. RTC denied said MR. John Keng Seng filed another complaint for accounting and damages with the Regional Trial Court of Bacolod City (Branch 44) against the herein petitioner Emilio Young. Young filed a Motion to Dismiss the case on the ground that the “complaint fails to state a good, valid and/or worthwhile cause of action against the defendant.” RTC denied the Motion to Dismiss. The petitioner filed a Motion for Reconsideration of the aforesaid order based on the following grounds: (1) that the complainant failed to state a good, valid and/or worthwhile cause of action as against the defendant; and (2) that the plaintiff had fatally failed to comply with the rule against forum shopping, as he has in fact deliberately submitted a false certification under oath as contained in the complaint in the present suit. Branch 44 granted MR, dismissing case. Petitioner contends that the CA should have ordered the dismissal of the Second Case. Allegedly, respondent was guilty of forum shopping when he deliberately and willfully certified falsely under oath that he had not commenced any other action or petition before any court, tribunal or agency involving the same issue. On the other hand, respondent claims that petitioner waived this ground by failing to raise it in his Motion to Dismiss before the trial court. Issues: Whether petitioner can still raise the alleged violation of the rule on non-forum shopping, even if he failed to cite it as a ground in his Motion to Dismiss the Second Case (waiver) Held: Section 1 of Rule 9 of the Rules of Court provides that defenses and objections not pleaded in a motion to dismiss or in an answer are deemed waived. However, courts shall nonetheless dismiss the claim when it appears from the pleadings or the evidence on record that (1) the court has no jurisdiction over the subject matter, (2) there is another action pending between the same parties for the same cause, (3) the action is barred by prior judgment, or (4) the statute of limitations has been crossed. To determine whether a party violated the rule against forum shopping, the most important factor to ask is whether the elements of litis pendentia are present, or whether a final judgment in one case will amount to res judicata in another. Otherwise stated, the test for determining forum shopping is whether in the two (or more) cases pending, there is identity of parties, rights or causes of action, and reliefs sought. The certification of non-forum shopping made in this case is inaccurate because it does not disclose the filing of the first case (with Branch 53). Had this violation been appropriately brought up in the Motion to Dismiss, it could have resulted in the abatement of the second case (with Branch 44). HOWEVER, the first case was dismissed
because of lack of cause of action. It was thus a dismissal without prejudice; respondent was not barred from filing a new suit against petitioner involving the same facts, but raising a cause of action arising therefrom. In fact, respondent actually filed the Second Case, e ven if he failed to disclose in his certification that he had commenced the First Case against the same defendant, herein petitioner. Furthermore, we must bear in mind that, whenever possible and feasible, procedural rules should be liberally construed to ensure the just, speedy and inexpensive disposition of actions and proceedings on their merits. OSM Shipping Philippines, Inc. vs. NLRC
Facts: Fermin Guerrerro filed a complaint before the NLRC against OSM and its principal Philippine Carrier Shipping Agency Services Co. (PC-SASCO) for illegal dismissal and non-payment of salaries, overtime pay and vacation pay. He was hired by OSM in behalf of his principal, PCSASCO as a Master Mariner for a contract period of 10 months. However, he was not paid any compensation at all and was forced to disembark the vessel. Despite the services he rendered, no compensation or remuneration was ever paid to him. The Labor Arbiter rendered a decision in favor of Guerrero and ordered OSM and PC-SASCO to pay Guerrero his unpaid salaries and allowances, accrued fixed overtime pay, vacation leave pay and termination pay. The NLRC Third Division affirmed the LA’s decision with a modification of the amount of liability. OSM filed a Petition for Certiorari with the CA but was dismissed for failure to comply with the requirements of Section 3 Rule 46 for OSM only attached a mere machine copy of the LA’s decision and not a duplicate original or certified true copy. Issue: W/N the CA erred in dismissing OSM’s Petition. Held: Section 3 Rule 45 does not require that all supporting papers and documents accompanying a petition be duplicate originals or certified true copies. Even under Rule 65 on certiorari and prohibition, petitions need to be accompanied only by duplicate originals or certified true copies of the questioned judgment, order or resolution. Other relevant documents and pleadings attached to it may be mere machine copies thereof. Since the LA’s decision was not the questioned ruling, it did not have to be certified. What has to be certified was the NLRC decision. And indeed it was. But since the case is now in its ninth year since its inception, its remand to the CA will only unduly delay its disposition. In the interest of substantial justice, the SC will determine W/N petitioner is liable for the unpaid salaries of Guerrero. Petitioner was liable. On behalf of its principal, PC-SASCO, petitioner does not deny hiring Private Respondent Guerrero as master mariner. However, it argues that since he was not deployed overseas, his employment contract became ineffective, because its object was allegedly absent. Petitioner contends that using the vessel in coastwise trade and subsequently chartering it to another principal had the effect of novating the employment contract. We are not persuaded. An employment contract, like any other contract, is perfected at the moment (1) the parties come to agree upon its terms; and (2) concur in the essential elements thereof: (a) consent of the contracting parties, (b) object certain which is the subject matter of the contract and (c) cause of the obligation .23 Based on the perfected contract, Private Respondent Guerrero complied with his obligations thereunder and rendered his services on board the vessel. Contrary to petitioner's contention, the contract had an object, which was the rendition of service by private respondent on board the vessel. The non-deployment of
the ship overseas did not affect the validity of the perfected employment contract. LM POWER ENGINEERING CO. v. CAPITOL INDUSTRIAL CONSTRUCTION GROUPS
FACTS: Petitioner LM Power and Respondent Capitol entered into a Subcontract Agreement [SA] with an arbitration clause involving electrical work at the Third Port of Zamboanga. The SA has the following arbitral clause: "6. The Parties hereto agree that any dispute or conflict as regards to interpretation and implementation of this Agreement which cannot be settled between [respondent] and [petitioner] amicably shall be settled by means of arbitration x x x." Capitol took over some of the work contracted to LM Power. Allegedly, the LM Power had failed to finish it because of its inability to procure materials. Upon completing its task under the SA, LM Power billed Capitol about P6M. Contesting the accuracy of the amount of advances and billable accomplishments listed by the LM Power, Capitol refused to pay. Capitol also took refuge in the termination clause of the SA. That clause allowed it to set off the cost of the work that LM Power had failed to undertake -- due to termination or takeover -- against the amount it owed the latter. Because of the dispute, LM Power filed with the RTC Makati a Complaint for the collection of the amount representing the alleged balance due it under the SA. Instead of submitting an Answer, respondent filed a Motion to Dismiss, alleging that the Complaint was premature, because there was no prior recourse to arbitration. RTC denied the Motion on the ground that dispute did not involve the interpretation or the implementation of the Agreement and was, therefore, not covered by the arbitral clause. ISSUES: Whether or not there exists a dispute between LM Power and Capitol regarding the interpretation and implementation of the Sub-Contract Agreement dated that requires prior recourse to voluntary arbitration; HELD: LM Power claims that there is no conflict regarding the interpretation or the implementation of the Agreement. Thus, without having to resort to prior arbitration, it is entitled to collect the value of the services it rendered through an ordinary action for the collection of a sum of money from Capitol. On the other hand, the latter contends that there is a need for prior arbitration as provided in the Agreement because there are some disparities between the parties positions regarding the extent of the work done, the amount of advances and billable accomplishments, and the set off of expenses incurred by respondent in its take-over of LM Power’s work. We side with Capitol. The dispute arose from the parties’ incongruent positions on whether certain provisions of their Agreement could be applied to the facts. The instant case involves technical discrepancies that are better left to an arbitral body that has expertise in those areas. In any event, the inclusion of an arbitration clause in a contract does not ipso facto divest the courts of jurisdiction to pass upon the findings of arbitral bodies, because the awards are still judicially reviewable under certain conditions. Clearly, the resolution of the dispute between the parties requires a referral to the provisions of their SA. Within the scope of the arbitration clause are discrepancies as to the
amount of advances and billable accomplishments, the application of the provision on termination, and the consequent set-off of expenses. The resolution of the issues disputed by parties lies in the interpretation of the provisions of the SA. Being an inexpensive, speedy and amicable method of settling disputes, arbitration -- along with mediation, conciliation and negotiation -- is encouraged by the Supreme Court. Consistent with the policy of encouraging alternative dispute resolution methods, courts should liberally construe arbitration clauses. Provided such clause is susceptible of an interpretation that covers the asserted dispute, an order to arbitrate should be granted. Any doubt should be resolved in favor of arbitration. Tan vs. Kaakbay Finance Corporation (BADDIRI) 404 SCRA 518
Facts: Petitioner Tan was granted a loan of P4,000,000.00 by private respondent Kaakbay. As collateral, a real estate mortgage on Tan’s parcel of land with the improvements therein was executed. Petitioner failed to pay his obligation. On January 5, 2000, petitioner filed a complaint for Declaration of Nullity, Invalidity and Unenforceability or Annulment of the Promissory Notes purportedly attached to the Real Estate Mortgage, the usurious and void rates of interest and other fees therein appearing, and the Deed of Sale Under Pacto De Retro, and damages, with prayer for Preliminary Injunction and/or Temporary Restraining Order against the private respondents. Petitioner then also filed a Notice of Lis Pendens with the Registry of Deeds of Calamba, Laguna. Respondents, through their new counsel, filed their Answer With Counterclaim. They also filed a Motion for Admission of Counterclaim Without Payment of Fees, on the ground that their counterclaim is compulsory in nature, hence it may be admitted without payment of fees. Trial court granted the respondents’ motion for admission of counterclaim without payment of fees. The Court of Appeals upheld the lower court’s decision. Petitioner alleged that his complaint is based on the unauthorized application of usurious, unconscionable and exorbitant rates of interest and other fees by respondents Kaakbay and Lazaro to petitioner’s loan without the latter’s knowledge, as well as the approval and the falsification of the promissory note supposed to be attached to the Real Estate Mortgage and the Deed of Sale Under Pacto de Retro. Since the evidence to be presented by the respondents to support the genuineness and due execution of the questioned promissory note and the Deed of Sale Under Pacto de Retro as a ground for the specific performance thereof, is not the same as the evidence to be presented by the petitioner as plaintiff in the case below to support his claim of fraud employed by respondents, petitioner asserts the counterclaim cannot be deemed compulsory. He adds that since the respondents demand the payment of the loan and the interests pursuant to the contract of loan, completely inconsistent with his claim that subject documents were a nullity, what respondents had filed is not a compulsory counterclaim. On the other hand, respondents contend that their counterclaims are for payment of the unpaid loan of the petitioner, the compounded interest with annual penalty litigation expenses and attorney’s fees. The respondents say these are all compulsory and not permissive counterclaims. Issue:Whether the counterclaim of respondents is compulsory or permissive in nature Held: The respondents’ counterclaims are compulsory in nature. A counterclaim is compulsory where: (1) it arises out of, or is necessarily connected with
the transaction or occurrence that is the subject matter of the opposing party’s claim; (2) it does not require the presence of third parties of whom the court cannot acquire jurisdiction; and (3) the trial court has jurisdiction to e ntertain the claim. To determine whether a counterclaim is compulsory or not, the tests are the following: Are the issues of fact or law raised by the claim and the counterclaim largely the same? Would res judicata bar a subsequent suit on defendant’s claims absent the compulsory counterclaim rule? Will substantially the same evidence support or refute plaintiff’s claim as well as the defendant’s counterclaim? and Is there any logical relation between the claim and the counterclaim? The “compelling test of compulsoriness” is whether there is “a logical relationship between the claim and counterclaim, that is, where conducting separate trials of the respective claims of the parties would entail a substantial duplication of effort and time by the parties and the court.” Petitioner’s complaint was for declaration of nullity, invalidity or annulment of the promissory notes and the usurious and void interest rates appearing therein and the Deed of Sale Under Pacto De Retro. Respondents’ counterclaim was for the payment of the principal amount of the loan, compounded monthly interest and annual penalty interest arising out of the non-payment of the principal loan, litigation expenses and attorney’s fees. There is no dispute as to the principal obligation, but there is a dispute as to the rate and amount of interest. It thus appears that the evidence required to prove petitioner’s claims is similar or identical to that needed to establish respondents’ demands for the payment of unpaid loan from petitioner such as amount of interest rates. Conducting separate trials for the claim and the counterclaim would result in the substantial duplication of the time and effort of the court and the parties. Clearly, this is the situation contemplated under the “compelling test of compulsoriness.” The issues of fact and law raised by both the claim and counterclaim are largely the same, with a logical relation, considering that the two claims arose out of the same circumstances requiring substantially the same evidence. Considering that the counterclaims of respondents are compulsory in nature, payment of docket fees is not required. New Sampaguita Builders v. Estate of Canoso G.R. No. 151447, February 14, 2003
Facts: Estate of Canoso filed an action to rescind a contract of sale of a parcel of land against New Sampaguita Builders. During trial, an amicable settlement was reached and they filed a joint motion to dismiss. Although the terms of the settlement was attached to the joint motion to dismiss, the parties prayed that an order be issued dismissing the case. RTC: Joint Motion to Dismiss granted. Thereafter, the Estate of Canoso filed a motion to enforce the compromise agreement on ground that New Sampaguita Builders violated its terms. New Sampanuita Builders did not appear during the hearing on the motion and no opposition to the motion was filed. RTC granted motion and ordered that a writ of execution be issued against New Sampaguita Builders. (May 24, 2000 order) New Sampaguita builders, after its MR was denied, elevated matter to the CA on a petition for certiorari. While the case was pending before the CA, Estate of Canoso filed an Ex-parte Manifestation before the RTC alleging that the intention
of the parties in submitting the settlement in their motion to dismiss was to have the said terms approved by the court. The RTC realized that it never issued an order approving the compromise agreement between the parties and reversed itself and set-aside the May 24, 2000 order. (October 26, 2000 Order) Estate moved for reconsideration but same was denied. Estate then filed their own petition for certiorari assailing the reversal of the RTC’s earlier order. CA: May 24, 2000 order of the trial court is Reinstated. Issue 1: Forum Shopping [WON there was forum shopping] Held: At first glance, the issues in the 2 cases appear to be similar, primarily because the validity of the writ of execution is in question. However, the issues raised in the 2 petitions are not the same. The issues raised in CA G.R. No. 60916 are whether the Regional Trial Court properly issued the writ of execution despite the final order of dismissal of Civil Case No. C-115, and whether there was indeed a violation of the compromise agreement. The issue in CA G.R. No. 62672 is whether or not the Regional Trial Court had approved the compromise agreement when it dismissed Civil Case No. C-115. In short, the first petition, CA G.R. No. 60916, was not concerned with the approval of the compromise agreement since the parties started with the premise that it was approved and went directly to the issue of the effect of the final order of dismissal and the factual basis for its enforcement. The question of approval of the compromise agreement became an issue only after the Regional Trial Court issued its October 26, 2000 order, reversing the May 24, 2000 order granting the motion to enforce compromise agreement, an action it took notwithstanding the pendency of CA G.R. No. 60916. It bears stressing that forum shopping is the institution of two or more actions or proceedings grounded on the same cause on the supposition that one or the other court would make a favorable disposition. This is not what happened here, where we have two parties, each filing their own separate petitions, against two different orders. Issue 2: Propriety of Issuance of October 26, 2000 Order [WON the RTC may still continue to hear the matter and issue orders concerning the May 24, 2000 order, despite the fact that the CA had already taken cognizance of the issue] Held: Once questions on the force and effect of the May 24, 2000 order had been elevated to the Court of Appeals, the Regional Trial Court effectively lost jurisdiction to act on the same matter. As along as the issues are pending before the Court of Appeals, the Regional Trial Court cannot interfere with or preempt whatever action or decision the Court of Appeals may take. The Court of Appeals properly set aside the October 26, 2000 order since the RTC no longer had jurisdiction to reconsider the May 24, 2000 order, after the same was elevated to the Court of Appeals. GENERAL MILLING v. NLRC
Facts: Complaint for illegal dismissal was filed by Cacho against the Corporation. The Labor Arbiter found for the petitioner and the NLRC affirmed the Arbiter’s decision. Upon appeal to the CA, the petition was denied for the failure of the petitioner to attach the board resolution to prove that the person who signed the Certification of non-forum shopping was duly authorized by the board of directors of the corporation. Corporation filed an MR, attached the corresponding board resolution. MR denied. Corporation filed the instant petition for review.
Issue: WON the CA erred in dismissing its appeal for the corporation’s failure to comply with the certification requirement Held: SC granted the petition for review. In this case, petitioner-corporation complied with the procedural requirement except that it was not accompanied by a board resolution or a secretary’s certificate that the person who signed it was duly authorized to represent petitioner in the case. The attaching of the board resolution with the MR was substantial compliance with the procedural requirements. Rules of procedure are intended to promote, rather than frustrate, the ends of justice. Technical and procedural rules are intended to help secure, not suppress, the cause of justice and deviation from the rigid enforcement of the rules may be allowed to attain that prime objective for the dispensation of justice is the core reason for the existence of courts. Heirs of Amrocio Kionisala vs. Heirs of Honorio Dacut
Facts: The heirs of Honorio Dacut filed a complant for declaration of nullity of titles, reconveyance amd damages against the heirs of Kionisala. This complaint involved 2 parcels of land located in Pongol, Libona, Bukidnon. Each party was issued free patents and certificates of titles. However, Heirs of Dacut claimed absolute ownership over the two lands even prior to the issuance of the corresponding free patends and certificates of title. Dacut heirs claimed that their late father Honorio Dacut acquired the said parcels of land from a certain Blasito Yacapin and from then on was in possession thereof exclusively, adversely and in the concept of owner for more than 30 years. They alleged that their father even rented the same to Philippine Packing Corporation for more than 20 years. That they discovered that Kionisala heirs fraudulently applied free patent the said parcels of land and as a result thereof certificates of titles had been issued to them. Thus, the patents issued to Kionisala heris are null and void, the same having been issued fraudulently. Further, they alleged that the DENR not having any jurisdiction on the properties the same not being anymore public but already a private property. The trial court dismissed the complaint on the ground that the cause of action of private respondents was truly for reversion so that only the Director of Lands could have filed that complaint. The CA reversed the TC ruling that the allegations were comprehensive enough to constitute a cause of action for reconveyance. ISSUE: Whether oor not the complaint is sufficient to allege an action for reversion. HELD: The test of the sufficiency of the facts to constitute a cause of action is whether admitting the facts alleged the court could render a valid judgment upon the same in accordance with the prayer of the complaint. In answering this query, only the facts asserted in the complaint must be taken into account without modification although with reasonable inferences therefrom. Applying the test to the case at bar, we rule that the complaint does not allege an action for reversion which private respondents would obviously have no right to initiate, but that it sufficiently states either a cause of action for declaration of nullity of free patents and certificates of title over Lot 1015 and Lot 1017 or alternatively a cause of action for reconveyance of these two pieces of realty, wherein in either case private respondents are the real parties in interest.
