University of Santo Tomas Faculty of Civil Law
Civil Procedure and Provisional Remedies (CP-PR) Case Digests (1st 90 Cases)1
1
Mendoza, Glenn S.
PRISCILLA ALMA JOSE, petitioner , vs. RAMON C. JAVELLANA, ET AL., respondents . G.R. No. 158239. January 25, 2012. Facts: Margarita Marquez Alma Jose (Margarita) sold for consideration of P160,000.00 to Ramon Javellana (respondent) by deed of conditional sale two parcels of land. They agreed that respondent would pay P80,000.00 upon the execution of the deed and the balance ofP80,000.00 upon the registration of the parcels of land under the Torrens System (the registration being undertaken by Margarita within a reasonable period of time); and that should Margarita become incapacitated, her son and attorney-in-fact, Juvenal M. Alma Jose (Juvenal), and her daughter, Priscilla M. Alma Jose (petitioner), would receive the payment of the balance and proceed with the application for registration.
After Margarita died and with Juvenal having predeceased Margarita without issue, the vendor’s undertaking fell on the shoulders of petitioner , being Margarita’s sole surviving heir. However, petitioner did not comply with the undertaking to cause the registration of the properties under the Torrens System. Faced with petitioner ’s ’s refusal to comply, respondent commenced an action for specific performance, injunction, and damages against her; and that petitioner be ordered to institute registration proceedings and then to execute a final deed of sale in his favor. Petitioner filed a motion to dismiss, stating that the complaint was already barred by prescription; and that the complaint did not state a cause of action.
The Regional Trial Court (RTC) initially denied petitioner ’s ’s motion to dismiss. However, upon her motion for reconsideration, the RTC granted the motion to dismiss. Respondent moved for a reconsideration, but was denied. Accordingly, respondent filed a notice of appeal. Petitioner countered that the RTC order was not appealable; that the appeal was not perfected on time; and that respondent was guilty of forum shopping. It appears that pending the appeal, respondent also filed a petition for certiorari in the Court of Appeals (CA) to assail the June 24, 1999 and June 21, 2000 orders dismissing his complaint. The CA dismissed the petition for certiorari. As to the notice on appeal, the CA reversed and set aside the RTC’s decision and remanded the
PRISCILLA ALMA JOSE, petitioner , vs. RAMON C. JAVELLANA, ET AL., respondents . G.R. No. 158239. January 25, 2012. Facts: Margarita Marquez Alma Jose (Margarita) sold for consideration of P160,000.00 to Ramon Javellana (respondent) by deed of conditional sale two parcels of land. They agreed that respondent would pay P80,000.00 upon the execution of the deed and the balance ofP80,000.00 upon the registration of the parcels of land under the Torrens System (the registration being undertaken by Margarita within a reasonable period of time); and that should Margarita become incapacitated, her son and attorney-in-fact, Juvenal M. Alma Jose (Juvenal), and her daughter, Priscilla M. Alma Jose (petitioner), would receive the payment of the balance and proceed with the application for registration.
After Margarita died and with Juvenal having predeceased Margarita without issue, the vendor’s undertaking fell on the shoulders of petitioner , being Margarita’s sole surviving heir. However, petitioner did not comply with the undertaking to cause the registration of the properties under the Torrens System. Faced with petitioner ’s ’s refusal to comply, respondent commenced an action for specific performance, injunction, and damages against her; and that petitioner be ordered to institute registration proceedings and then to execute a final deed of sale in his favor. Petitioner filed a motion to dismiss, stating that the complaint was already barred by prescription; and that the complaint did not state a cause of action.
The Regional Trial Court (RTC) initially denied petitioner ’s ’s motion to dismiss. However, upon her motion for reconsideration, the RTC granted the motion to dismiss. Respondent moved for a reconsideration, but was denied. Accordingly, respondent filed a notice of appeal. Petitioner countered that the RTC order was not appealable; that the appeal was not perfected on time; and that respondent was guilty of forum shopping. It appears that pending the appeal, respondent also filed a petition for certiorari in the Court of Appeals (CA) to assail the June 24, 1999 and June 21, 2000 orders dismissing his complaint. The CA dismissed the petition for certiorari. As to the notice on appeal, the CA reversed and set aside the RTC’s decision and remanded the
records to the RTC for further proceedings in accordance with law. The CA denied the motion for reconsideration filed by petitioner. Issue: Whether or not the RTC’s decision denying the motion for reconsideration of the order of dismissal a final order and thus, appealable. Ruling: YES. The distinction between a final order and an interlocutory order is well known. The former (final order) disposes of the subject matter in its entirety or terminates a particular proceeding or action, leaving nothing more to be done except to enforce by execution what the court has determined, but the latter (interlocutory order) does not completely dispose of the case but leaves something else to be decided upon. An interlocutory order deals with preliminary matters and the trial on the merits is yet to be held and the judgment rendered . The test to ascertain whether or not an order or a judgment is interlocutory or final is: does the order or judgment leave something to be done in the trial court with respect to the merits of the case? If it does, the order or judgment is interlocutory; otherwise, it is final.
In the instant case, the denial of respondent’s motion for reconsideration left nothing more to be done by the RTC because it confirmed the dismissal of Civil Case No. 79-M-97. It was clearly a final order, not an interlocutory one.
FREDESVINDO S. ALVERO, petitioner , vs. M. L. DE LA ROSA, Judge of First Instance of Manila, JOSE R. VICTORIANO, and MARGARITA VILLARICA, respondents . No. L-286. March 29, 1946 Facts: On June 25, 1945 respondent Jose R. Victoriano (Victoriano) filed a complaint, in the Court of First Instance (CFI) of the City of Manila, against Fredesvindo S. Alvero (petitioner) and one Margarita Villarica (Villarica), alleging two causes of action, to wit, (1) to declare in force the contract of sale, made on October 1, 1940, between Victoriano and Villarica, of two parcels of land in the Manotoc subdivision, Balintawak, in the barrio of Calaanan, Municipality of Caloocan, Rizal, with a combined area of 480 square meters, which land was subsequently sold by said Villarica, in favor of petitioner, on December 31, 1944, for the sum of P100,000 in Japanese military notes; and (2) to declare said subsequent sale null and void. On July 7, 1945, Villarica filed an answer to said complaint, expressly admitting having sold said land to petitioner, for P100,000, on December, 1944, due to the imperative necessity of raising funds with which to provide for herself and family, and that she did not remember the previous sale; at the same time, offering to repurchase said land from petitioner in the sum of P5,000, but that the latter refused to accept the offer. On July 13, 1945, petitioner, in answering said complaint, denied the allegations made therein, and claimed exclusive ownership of the land in question.
Hon. Mariano L. de la Rosa, Judge of the CFI of the City of Manila, on November 16, 1945, rendered his decision in favor of Victoriano. On November 28, 1945, petitioner was notified of said decision; and on December 27, 1945, he filed a motion for reconsideration and a new trial, which were denied on January 3, 1946; and of said order he was notified on January 7, 1946. On January 8, 1946, petitioner filed his notice of appeal and record on appeal simultaneously in the lower court, without filing the P60-appeal bond. On January 14, 1946, Victoriano filed a motion to dismiss the appeal, and at the same time, asked for the execution of the judgment. On January 15, 1946, petitioner filed an
opposition to said motion to dismiss, alleging that on the very same day, January 15, 1946, said appeal bond for P60 had been actually filed, and allege as an excuse, for not filing the said appeal bond, in due time, the illness of his lawyer’s wife, who died on January 10, 1946, and buried the following day. On January 17, 1946, the respondent judge ordered the dismissal of the appeal declaring that although the notice of appeal and record on appeal had been filed in due time, the P60-appeal bond was filed too late. On January 23, 1946, petitioner filed a motion for the reconsideration of the said order dated January 17, 1946, dismissing his appeal; and said motion was denied on January 29, 1946. Hence, the present recourse. Respondents filed their answer to the petition for certiorari, alleging (1) that said petition is defective in form as well as in substance; (2) that there has been no excusable negligence, on the part of the petitioner, or grave abuse of discretion on the part of the respondent judge, in the instant case. Issue: Whether or not the petition is defective in form as well as in substance. Ruling: YES. The period for perfecting petitioner’s appeal commenced from November 28, 1945, when he was notified of the judgment rendered in the case, and expired on December 28, 1945; and, therefore, his notice of appeal and record on appeal filed on January 8, 1946, were filed out of time, and much more his appeal bond, which was only filed on January 15, 1946. Failure to perfect the appeal, within the time prescribed by the Rules of Court, is a cause for the judgment to become final, and the certification of the record on appeal thereafter cannot restore the jurisdiction which has been lost .
DOMINADOR B. BUSTOS, petitioner , vs. ANTONIO G. LUCERO, Judge of First Instance of Pampanga, respondent . No. L-2068. October 20, 1948. Facts: Dominador Bustos (petitioner), an accused in a criminal case, filed a motion with the Court of First Instance (CFI) of Pampanga after he had been bound over to that court for trial, praying that the record of the case be remanded to the justice of the peace court of Masantol, the court of origin, in order that the petitioner might cross-examine the complainant and her witnesses in connection with their testimony, on the strength of which warrant was issued for the arrest of the accused petitioner. Petitioner, assisted by counsel, appeared at the preliminary investigation. In that investigation, the justice of the peace informed him of the charges and asked him if he will plead guilty or not, upon which he entered the plea of not guilty. Then his counsel moved that the complainant present her evidence so that she and her witnesses could be examined and cross-examined in the manner and form provided by law. The fiscal and the private prosecutor objected, invoking Sec. 11 of Rule 108, which provides: “Evidence - which is the "the mode and manner of proving the competent facts and circumstances on which a party relies to establish the fact in dispute in judicial proceedings”
The objection was sustained denying the motion for reconsideration of the petitioner. In view thereof, the petitioner’s counsel announced his intention to renounce his right to present evidence, and the justice of the peace forwarded the case to the CFI. Justice Tuason citing the case of Dequito and Saling Buhay vs.Arellano, G.R. No. L-1336: “The constitutional right of an accused to be confronted by the witnesses against him does not apply to preliminary hearings; nor will the absence of a preliminary examination be an infringement of his right to confront witness. As a matter of fact, preliminary investigation may be done away with entirely without infringing the constitutional right of an accused under the due process clause to a fair trial.”
Issue: Whether or not Sec. 11 of Rule 108 of the Rules of Court infringes Sec. 13, Article VIII, of the Constitution which deals with substantive matters and impairs substantive rights. Ruling: NO. Sec. 11, Rule 108 is an adjective law and not a substantive law or substantive right.
In this case, Justice Tuason also provided the distinctions between a substantive law and remedial law, the former creates substantive rights and the two terms in this respect may be said to be synonymous. Substantive right is a term which includes those rights which one enjoys under the legal system prior to the disturbance of normal relations. (60 C.J., 980.) Substantive law is that part of the law which creates, defines and regulates rights, or which regulates the rights and duties which give rise to a cause of action; that part of the law which courts are established to administer; as opposed to adjective or remedial law, which prescribes the method of enforcing rights or obtains redress for their invasion . (36 C. J., 27; 52 C. J. S., 1026.) While Sec. 11 of Rule 108 denies to the defendant the right to cross-examine witnesses in a preliminary investigation, his right to present his witnesses remains unaffected, and his constitutional right to be informed of the charges against him both at such investigation and at the trial is unchanged . It is fundamentally a procedural law . The Supreme Court held that Sec. 11 of Rule 108 does not curtail the sound discretion of the justice of the peace on the matter. Said section defines the bounds of the defendant’s right in the preliminary investigation.
The foregoing decision was rendered by a divided court. The minority went farther than the majority and denied even any discretion on the part of the justice of the peace or judge holding the preliminary investigation to compel the complainant and his witnesses to testify anew. Upon the foregoing considerations, the present petition is dismissed with costs against the petitioner.
PANAY RAILWAYS INC., petitioner , vs. HEVA MANAGEMENT and DEVELOPMENT CORPORATION, PAMPLONA AGRO-INDUSTRIAL CORPORATION, and SPOUSES CANDELARIA DAYOT and EDMUNDO DAYOT, respondents . G.R. No. 154061. January 25, 2012. Facts: Panay Railways, Inc. (PRI) (petitioner) entered into a Real Estate Mortgage with Traders Royal Bank (TRB) for a loan amounting to P20,000,000.00. The Real Estate Mortgage covers several parcels of land which includes Lot No. 6153. Petitioner excluded certain portions of Lot No. 6153: that already sold to Shell Co., Inc. referred to as 6153-B, a road referred to as 6153-C, and a squatter area known as 6153-D.
Due to petitioner ’s failure to pay its obligations, the properties were extrajudicially foreclosed by the TRB. A Certificate of Sale was issued in favor of the bank as the highest bidder and purchaser. Consequently, the sale of Lot No. 6153 was registered with the Register of Deeds on January 28, 1986 and annotated at the back of the transfer certificates of title (TCT) covering the mortgaged properties. Thereafter, TRB caused the consolidation of the title in its name on the basis of a Deed of Sale and an Affidavit of Consolidation after petitioner failed to exercise the right to redeem the properties. The corresponding TCTs were subsequently issued in the name of the bank. On February 12, 1990, TRB filed a Petition for Writ of Possession against petitioner. During the proceedings, petitioner, through its duly authorized manager and officer-in-charge and with the assistance of counsel, filed a Manifestation and Motion to Withdraw Motion for Suspension of the Petition for the issuance of a writ of possession. The pertinent portions of the Manifestation and Motion state: 4. That PRI recognizes and acknowledges petitioner (TRB) to be the registered owner of Lot 1-A; Lot 3834; Lot 6153; Lot 6158; Lot 6159, and Lot 5 covered by TCT No. T-84233; T-84234; T-84235; T-84236; T-84237, T-84238 and T-45724 respectively, free of liens and encumbrances, except that portion sold to Shell Co. found in Lot 5. That Petitioner (TRB) as registered owner is entitled to peaceful ownership and immediate physical possession of said real properties.
It was only in 1994 that petitioner realized that the extrajudicial foreclosure included some excluded properties in the mortgage contract. Thus, on August 19, 1994, it filed a Complaint for Partial Annulment of Contract to Sell and Deed of Absolute Sale with Addendum; Cancellation of Title No. T-89624; and Declaration of Ownership of Real Property with Reconveyance plus Damages. Meanwhile, respondents filed their respective Motions to Dismiss on these grounds: (1) petitioner had no legal capacity to sue; (2) there was a waiver, an abandonment and an extinguishment of petitioners claim or demand; (3) petitioner failed to state a cause of action; and (4) an indispensable party, namely TRB, was not impleaded. On July 18, 1997, the RTC issued an Order granting the Motion to Dismiss of respondents. It held that the Manifestation and Motion filed by petitioner was a judicial admission of TRBs ownership of the disputed properties. The trial court pointed out that the Manifestation was executed by petitioners duly authorized representative with the assistance of counsel. This admission thus operated as a waiver barring petitioner from claiming otherwise. On August 11, 1997, petitioner filed a Notice of Appeal without paying the necessary docket fees. Immediately thereafter, respondents filed a Motion to Dismiss Appeal on the ground of nonpayment of docket fees. On July 18, 1997, the RTC issued an Order granting the Motion to Dismiss of respondents. It held that the Manifestation and Motion filed by petitioner was a judicial admission of TRBs ownership of the disputed properties. The trial court pointed out that the Manifestation was executed by petitioners duly authorized representative with the assistance of counsel. This admission thus operated as a waiver barring petitioner from claiming otherwise. In its Opposition, petitioner alleged that its counsel was not yet familiar with the revisions of the Rules of Court that became effective only on July 1, 1997. Its representative was likewise not informed by the court personnel that docket fees needed to be paid upon the filing of the Notice of Appeal. Furthermore, it contended that the requirement for the payment of docket fees was not mandatory. It therefore asked the RTC for a liberal interpretation of the procedural rules on appeals. On September 29, 1997, the RTC issued an Order dismissing the appeal citing Sec. 4 of Rule 41 of the Rules of Court. Petitioner thereafter moved for a reconsideration of the Order alleging that the trial court lost jurisdiction over the case after the former had filed the Notice of Appeal. Petitioner also alleged that the court erred in failing to relax procedural rules for the sake of substantial justice. On November 25, 1997, the RTC denied the Motion. On January 28, 1998, petitioner filed with the Court of Appeals (CA) a Petition for Certiorari and Mandamus under Rule 65 alleging that the RTC had no jurisdiction to dismiss the Notice of Appeal, and that the trial court had acted with grave abuse of discretion when it strictly applied procedural rules. On November 29, 2000, the CA rendered its Decision on the Petition. It held that while the failure of petitioner to pay the docket and other lawful fees within the reglementary period was a ground for the dismissal of the appeal pursuant to Sec. 1 of Rule 50 of the Revised Rules of Court, the jurisdiction to do so belonged to the CA and not the trial court. Thus, appellate court ruled that the RTC committed grave abuse of discretion in dismissing the appeal and set aside the latter ’s assailed Order dated 29 September 1997. Thereafter, respondents filed their respective Motions for Reconsideration.
It appears that prior to the promulgation of the CA ’s Decision, this Court issued Administrative Matter (A.M.) No. 00-2-10-SC which took effect on 1 May 2000, amending Rule 4, Sec. 7 and Sec. 13 of Rule 41 of the 1997 Revised Rules of Court. The circular expressly provided that trial courts may, motu proprio or upon motion, dismiss an appeal for being filed out of time or for nonpayment of docket and other lawful fees within the reglementary period. Subsequently, Circular No. 48-2000 was issued on 29 August 2000 and was addressed to all lower courts. By virtue of the amendment to Sec. 41, the CA upheld the questioned Orders of the trial court by issuing the assailed Amended Decision in the present Petition granting respondents Motion for Reconsideration. The CAs action prompted petitioner to file a Motion for Reconsideration alleging that SC Circular No. 48-2000 should not be given retroactive effect. It also alleged that the CA should consider the case as exceptionally meritorious. Petitioners counsel, Atty. Rexes V. Alejano, explained that he was yet to familiarize himself with the Revised Rules of Court, which became effective a little over a month before he filed the Notice of Appeal. He was thus not aware that the nonpayment of docket fees might lead to the dismissal of the case. On May 30, 2002, the CA issued the assailed Resolution denying petitioners Motion for Reconsideration. Issue: Whether or not the CA erred in sustaining the RTCs dismissal of the Notice of Appeal. Ruling: No. Statutes and rules regulating the procedure of courts are considered applicable to actions pending and unresolved at the time of their passage. Procedural laws and rules are retroactive in that sense and to that extent. The effect of procedural statutes and rules on the rights of a litigant may not preclude their retroactive application to pending actions. This retroactive application does not violate any right of a person adversely affected. Neither is it constitutionally objectionable. The reason is that, as a general rule, no vested right may attach to or arise from procedural laws and rules. It has been held that a person has no vested right in any particular remedy, and a litigant cannot insist on the application to the trial of his case, whether civil or criminal, of any other than the existing rules of procedure. More so when, as in this case, petitioner admits that it was not able to pay the docket fees on time. Clearly, there were no substantive rights to speak of when the RTC dismissed the Notice of Appeal .
The argument that the CA had the exclusive jurisdiction to dismiss the appeal has no merit. When this Court accordingly amended Sec. 13 of Rule 41 through A.M. No. 00-2-10-SC, the RTCs dismissal of the action may be considered to have had the imprimatur of the Court. Thus, the CA committed no reversible error when it sustained the dismissal of the appeal, taking note of its directive on the matter prior to the promulgation of its Decision. As early as 1932, in Lazaro v. Endencia, we have held that the payment of the full amount of the docket fees is an indispensable step for the perfection of an appeal. The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fees. Moreover, the right to appeal is not a natural right and is not part of due process. It is merely a statutory privilege, which may be exercised only in accordance with the law. We have repeatedly stated that the term substantial justice is not a magic wand that would automatically compel this Court to suspend procedural rules. Procedural rules are not to be belittled or dismissed simply because their non-observance may result in prejudice to a party’s substantive rights. Like all other rules, they are required to be followed, except only for the most persuasive of reasons when they may be relaxed to relieve litigants of an injustice not commensurate with the degree of their thoughtlessness in not complying with the procedure prescribed.
We cannot consider counsels failure to familiarize himself with the Rules of Court as a persuasive reason to relax the application of the Rules. It is well-settled that the negligence of counsel binds the client. This principle is based on the rule that any act performed by lawyers within the scope of their general or implied authority is regarded as an act of the client. Consequently, the mistake or negligence of the counsel of petitioner may result in the rendition of an unfavorable judgment against it.
FELIX MARTOS, JIMMY ECLANA, RODEL PILONES, RONALDO NOVAL, JONATHAN PAILAGO, ERNESTO MONTANO, DOYONG JOSE, DEO MAMALATEO, ROSELO MAGNO, BONNIE SANTILLAN, ARSENIO GONZALES, ALEX EDRADAN, MICHAEL ERASCA, MARLON MONTANO, VICENTE OLIVEROS, REYNALDO LAMBOSON, DOMINGO ROTA, EDDIE ROTA, ZALDY OLIVEROS, ANTONIO NATIL, HERMIE BUISON, ROGER BUISON, MARIANO LAZATE, JUAN VILLABER, LIMUEL LLANETA, LITO BANTILO, TERSO GARAY, ROWEL BESTOLO, JERRY YORTAS, PASTOR PANTIG, GAVINO NICOLAS, RAFAEL VILLA, FELIX YORTAS, MELVIN GARAY, NEIL DOMINGUEZ, REYNALDO EVANGELISTA, JR., JOSE RAMOS, ELVIN ROSALES, JUN GRANEHO, DANNY ASPARES, SALVEDOR TONLOC, ROLANDO EVANGELISTA, RICKY M. FRANCISCO, EDUARDO ALEGRIA, SALVADOR SANTOS, GREG BISONIA, RUFO CARBILLO, MARVIN MONTERO, DANILO BESSIRE, ALLAN CABALLERO, ORLANDO LIMOS, EDGARDO BICLAR, MANDY MAMALATEO, ALFRED GAJO, ERIC CASTRENCE, ANTHONY MOLINA, JAIME SALIM, ROY SILVA, DANILO BEGORIE, PEPING CELISANA, ERIC RONDA, RUFO CARBANILLO, ROWEL BATA, RICARDO TOLENTINO, ARNEL ARDINEZ, FERDINAND R. ARANDIA, ROMEO R. GARBO, ANTONIO ROTA, REYNIELANDRE QUINTANILLA, JOSELITO HILARIO, JIMMY CAMPANA, DANILO LIDO-AN, EMERSON PENAFLOR, CESAR PABALINAS, JONATHAN MELCHOR, ALEX DAVID, EUTlQUIO ALCALA, MICHAEL CARANDANG, EDUARDO MANUEL, RAMON EVANGELISTA, RUBEN MENDOZA, ERNESTO MENDOZA, RICKY RAMOS, ROBERTO NOVELLA, RUBEN CONDE, DANILO POLISTICO, DOMINGO MENDOZA, FERNANDO SAN GABRIEL, and DOMINGO ROTO, petitioners , vs. NEW SAN JOSE BUILDERS, INC., respondent . G.R. No. 192650. October 24, 2012. FACTS: Questioned in this Petition for Review is the July 31, 2009 Decision of the CA and its June 17, 2010 Resolution, which reversed and set aside the July 30, 2008 Decision and October 28, 2008, Resolution of the NLRC; and reinstated the May 23, 2003 Decision of the Labor Arbiter (LA).
New San Jose Builders, Inc. (hereafter petitioner) is a domestic corporation duly organized and existing under the laws of the Philippines and is engaged in the construction of road, bridges, buildings, and low cost houses primarily for the government. One of the projects of petitioner is the San Jose Plains Project (SJPP), located in Montalban, Rizal. SJPP, which is also known as the “Erap City” calls for the construction of low cost
housing, which are being turned over to the National Housing Authority (NHA) to be awarded to deserving poor families. Private respondents alleged that, on various dates, petitioner hired them on different positions. Sometime in 2000, petitioner was constrained to slow down and suspend most of the works on the SJPP project due to lack of funds of the NHA. Thus, the workers were informed that many of them would be laid off and the rest would be reassigned to other projects. Juan Villaber, Terso Garay, Rowell Batta, Pastor Pantig, Rafael Villa, and Melvin Garay were laid off. While on the other hand, Felix Martos, Ariel Dominguez, Greg Bisonia, Allan Caballera, Orlando Limos, Mandy Mamalateo, Eric Castrence, Anthony Molina, and Roy Silva were among those who were retained and were issued new appointment papers to their respective assignments, indicating therein that they are project employees. However, they refused to sign the appointment papers as project employees and subsequently refused to continue to work. On different dates, three (3) Complaints for Illegal Dismissal and for money claims were filed before the NLRC against petitioner and Jose Acuzar, by private respondents who claimed to be the former employees of petitioner. Petitioner denies that private respondents were illegally dismissed, and alleged that they were project employees, whose employments were automatically terminated upon completion of the project for which they were hired. On the other hand, private respondents claim that petitioner hired them as regular employees, continuously and without interruption, until their dismissal on February 28, 2002. Subsequently, the 3 Complaints were consolidated and assigned to Labor Arbiter Facundo Leda. On May 23, 2003, the LA handed down a decision declaring, among others, that petitioner Felix Martos (Martos) was illegally dismissed and entitled to separation pay, backwages and other monetary benefits; and dismissing, without prejudice, the complaints/claims of the other complainants (petitioners). Both parties appealed the LA decision to the NLRC. Petitioners appealed that part which dismissed all the complaints, without prejudice, except that of Martos. On the other hand, New San Jose Builders, Inc. (respondent) appealed that part which held that Martos was its regular employee and that he was illegally dismissed. On July 30, 2008, the NLRC resolved the appeal by dismissing the one filed by respondent and partially granting that of the other petitioners. After the denial of its motion for reconsideration, respondent filed before the CA a petition for certiorari under Rule 65 of the Rules of Court. On July 31, 2009, the CA rendered a decision reversing and setting aside the July 30, 2008 Decision and the October 28, 2008 Resolution of the NLRC and reinstating the May 23, 2003 Decision of the LA. The CA explained that the NLRC committed grave abuse of discretion in reviving the complaints of petitioners despite their failure to verify the same. Out of the 102 complainants, only Martos verified the position paper and his counsel never offered any explanation for his failure to secure the verification of the others. The CA also held that the NLRC gravely abused its discretion when it took cognizance of petitio ners’ appeal because Rule 41, Section 1(h) of the 1997 Rules of Civil Procedure, as amended, which is suppletory, provides that no appeal may be taken from an order dismissing an action without prejudice. Nevertheless, the CA stated that the factual circumstances of Martos’ employment and his dismissal from work could not equally apply to petitioners because they were not similarly situated. The NLRC did not even bother to look at the evidence on record and inappropriately granted monetary awards to petitioners who had either denied having filed a case or withdrawn the case against respondent. According to the CA, the
position papers should have covered only those claims and causes of action raised in the complaint excluding those that might have been amicably settled. With respect to Martos, the CA ruled that he was a regular employee of respondent and his termination was illegal. It explained that Martos should have been considered a regular employee because there was no indication that he was merely a project employee when he was hired. To show otherwise, respondent should have presented his employment contract for the alleged specific project and the successive employment contracts for the different projects or phases for which he was hired. In the absence of such document, he could not be considered such an employee because his work was necessary and desirable to the respondent’s usual business and that he was not required to sign any employment contract fixing a definite period or duration of his engagement. Thus, Martos already attained the status of a regular employee. Moreover, the CA noted that respondent did not report the termination of Martos’ supposed project employment to the Department of Labor and Employment (DOLE), as required under Department Order No. 19. Being a regular employee, the CA concluded that he was constructively dismissed when he was asked to sign a new appointment paper indicating therein that he was a project employee and that his appointment would be co-terminus with the project. Issues: Whether or not the CA was correct in dismissing the complaints filed by those petitioners who failed to verify their position papers. Ruling: Yes. Sections 4 and 5 of Rule 7 of the 1997 Rules of Civil Procedure provide: Sec. 4. Verification. – Except when otherwise specifically required by law or rule, pleadings need not be under oath, verified or accompanied by affidavit. A pleading is verified by an affidavit that the affiant has read the pleadings and that the allegations therein are true and correct of his personal knowledge or based on authentic records. A pleading required to be verified which contains a verification based on "information and belief" or upon "knowledge, information and belief" or lacks a proper verification, shall be treated as an unsigned pl eading. SEC. 5. Certification against forum shopping. – The plaintiff or principal party shall certify under oath in the complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, a complete statement of the present status thereof; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed.
Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice, unless otherwise provided, upon motion and after hearing. The submission of a false certification or noncompliance with any of the undertakings therein shall constitute indirect contempt of court, without prejudice to the corresponding administrative and criminal actions. If the acts of the party or his counsel clearly constitute willful and deliberate forum shopping, the same shall be ground for summary dismissal with prejudice and shall constitute direct contempt, as well as a cause for administrative sanctions.
The verification requirement is significant, as it is 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. Verification is deemed substantially complied with when, as in this case, one who has ample knowledge to swear to the truth of the allegations in the complaint or petition signs the verification, and when matters alleged in the petition have been made in good faith or are true and correct.
The absence of a proper verification is cause to treat the pleading as unsigned and dismissible. The lone signature of Martos would have been sufficient if he was authorized by his co-petitioners to sign for them. Unfortunately, petitioners failed to adduce proof that he was so authorized. The liberal construction of the rules may be invoked in situations where there may be some excusable formal deficiency or error in a pleading, provided that the same does not subvert the essence of the proceeding and it at least connotes a reasonable attempt at compliance with the rules. Besides, fundamental is the precept that rules of procedure are meant not to thwart but to facilitate the attainment of justice; hence, their rigid application may, for deserving reasons, be subordinated by the need for an apt dispensation of substantial justice in the normal course. They ought to be relaxed when there is subsequent or even substantial compliance, consistent with the policy of liberality espoused by Rule 1, Section 6.14 Not being inflexible, the rule on verification allows for such liberality.
Considering that the dismissal of the other complaints by the LA was without prejudice, the other complainants should have taken the necessary steps to rectify their procedural mistake after the decision of the LA was rendered. They should have corrected this procedural flaw by immediately filing another complaint with the correct verification this time. Surprisingly, they did not even attempt to correct this technical blunder. Worse, they committed the same procedural error when they filed their appeal16 with the NLRC. Under the circumstances, the Court agrees with the CA that the dismissal of the other complaints were brought about by the own negligence and passive attitude of the complainants themselves. Most probably, as the list submitted is not complete with the information as to when each started and when each was dismissed there must be some truth in the claim of respondent that those complainants who failed to affix their signatures in the verification were either not employees of respondent at all or they simply refused to prosecute their complaints. In its position paper, respondent alleged that, aside from the 4 complainants who withdrew their complaints, only 17 out of the more or less 104 complainants appeared on its records as its former project employees or at least known by it to have worked in one of its construction projects. From the sworn statements executed by Felix Yortas, Marvin Batta, Lito Bantillo, Gavino Felix Nicolas, and Romeo Pangacian Martos, they already withdrew their complaints against respondent. Their status and cause of action not being clear and proven, it is just not right that these complaints be considered as similarly situated as Martos and entitled to the same benefits.
MARIA CONSOLACION RIVERA-PASCUAL, petitioner , vs. SPOUSES MARILYN LIM and GEORGE LIM and the REGISTRY OF DEEDS OF VALENZUELA CITY, respondents . G.R. No. 191837, September 19, 2012 Facts: The present controversy involves a parcel of land located in Valenzuela City registered under the name of the Spouses Lim (or private respondents). On September 2004, the petitioner filed before the Office of the Regional Agrarian Reform (RARAD) for Region IV-A a petition to be recognized as a tenant of a property located in Valenzuela City against one Deato. At that time, the property was under Deato’s name. During the pendency of the petition, Deato sold the property to Spouses Lim. The sale was registered on December 2004 leading to the issuance of a TCT in favor of the private respondents. Thus, the petitioner filed a motion on March 2005 to implead the Spouses Lim.
On December 2005, the petition was granted by the Regional Adjudicator (RA). The dispositive portion of the decision includes, inter alia, that the petitioner is the tenant of the subject land by succession from her deceased father and that she should be subrogated to the rights of the private respondents. The judgment of the RA became final. Thus, Consolacion filed a motion for execution to which a writ of execution was issued by the RA on January 2008. Seven days after, the petitioner filed a petition against the private respondents and the Registrar of Deeds praying for the issuance of an order directing Spouses Lim to accept the amount of P10million which she undertook to tender, declare the property redeemed and cancel the TCT. RARAD: The petition was given due course by the RA, the dispositive portion of the decision stating that the property is lawfully redeemed, ordering the private respondents to accept the amount consigned with the DARAB, execute a deed of redemption in favor of the petitioner and directing the RD to cancel the TCT registered in the name of the private respondents and issue a new one in favor of the petitioner. DARAB: The decision of RARAD was reversed. Consolacion moved for reconsideration which the DARAB denied. Court of Appeals (CA): Consolacion filed a petition for review under Rule 43 of the Rules of Court. The CA did not give due course to the petition due to the following technical grounds: a) failure of counsel to indicate in the petition his MCLE Certificate of Compliance or Exemption Number and b) the jurat of Consolacion’s verification and certification against non-forum-shopping failed to indicate any competent
evidence of Consolacion’s identity apart from her community tax certificate. She moved for reconsideration but was denied. Issue: Whether or not the petition should be denied due to the unexplained failure to comply with basic procedural requirements of the Rules of Court. Ruling: Yes. Consolacion and her counsel claimed inadvertence and negligence but they did not explain the circumstances thereof. Absent valid and compelling reasons, the requested leniency and liberality in the observance of procedural rules appears to be an afterthought, hence, cannot be granted . The CA saw no compelling need meriting the relaxation of the rules. Neither did the Court see any. The Court is aware of the exceptional cases where technicalities were liberally construed. However, in these cases, outright dismissal is rendered unjust by the presence of a satisfactory and persuasive explanation. The parties therein who prayed for liberal interpretation were able to hurdle that heavy burden of proving that they deserve an exceptional treatment. It was never the Court’s intent “to forge a bastion for erring litigants to violate the rules with impunity.” The Court will not condone a cavalier attitude towards procedural rules. It is the duty of every member of the bar to comply with these rules. They are not at liberty to seek exceptions should they fail to observe these rules and rationalize their omission by harking on liberal construction . While it is the negligence of Consolacion's counsel that led to this unfortunate result, she is bound by such.
COMMISSIONER OF INTERNAL REVENUE, petitioner , vs. MIRANT PAGBILAO CORPORATION (formerly SOUTHERN ENERGY QUEZON, INC.), respondent . G.R. No. 159593, October 12, 2006. Facts: Migrant Pagbilao Corporation (MPC) is a domestic corporation engaged in the business of power generation and subsequent sale thereof. It is registered with the BIR as VAT registered entity. For the period of April 1, 1996 to December 31, 1996, MPC seasonably filed its quarterly VAT returns reflecting an accumulated input taxes in the amount of P 39, 330,500.00. These taxes were allegedly paid my MPC to the suppliers of capital goods and services.MPC filed an application for a tax refund of the unutilized VAT paid on capital goods. MPC did not wait for an answer from the BIR and filed a petition for review in order to toll the running period for claiming the refund. The BIR Commissioner raised as a defense that the application for refund is still pending and therefore premature. The Commissioner also argued that MPC must produce evidence to prove that it is entitled to the refund, as tax refunds are construed strictly against the tax payer. While the case was pending, Revenue Officers investigated MPC’s application and recommended that MPC’s input taxes should be reduced by P49, 616.40 for unapplied input taxes on capital goods. A third party audit was also conducted and found that the input taxes only amounted to P28, 745,502.The Court of Tax Appeals rule in favor of MPC and granted the tax refund. The Court of Appeals denied the BIR’s petition for review, declaring that th e BIR cannot validly change its theory on the case on appeal. Issue: Whether or not the observance of procedural rules should be relaxed. Ruling: No. The general rule is that a party cannot change his theory of the case on appeal . It was only after the CTA ruled against the BIR, that the latter filed his petition for review before the CA, and for the first time averred that the MPC was a public utility and does not pay VAT, thereby disqualifying it from claiming a refund. The settled rule is that a party cannot change his theory of the case or his cause of action on appeal. It affirms that courts of justice have no jurisdiction or power to decide a question not in issue.
Such a rule has been expressly adopted in Rule 44, Section 15 of the 1997 Rules of Civil Procedure, which provides – SEC. 15. Questions that may be raised on appeal. – Whether or not the appellant has filed a motion for new trial in the court below, he may include in his assignment of errors any question of law or fact that has been raised in the court below and which is within the issues framed by the parties.
SM LAND, INC. (Formerly Shoemart, Inc.) and WATSONS PERSONAL CARE STORES, PHILS., INC., petitioners , vs. CITY OF MANILA, LIBERTY TOLEDO, in her official capacity as the City Treasurer of Manila and JOSEPH SANTIAGO, in his official capacity as the Chief of License Division of the City of Manila, respondents . G.R. No. 197151. October 22, 2012. Facts: On the strength of the provisions of Tax Ordinance Nos. 7988 and 8011, which amended Ordinance No. 7794, also known as the Revenue Code of Manila, herein respondent City of Manila assessed herein petitioners, together with their other sister companies, increased rates of business taxes for the year 2003 and the first to third quarters of 2004. Petitioners and their sister companies paid the additional taxes under protest.
Subsequently, petitioners and their sister companies claimed with herein respondent City Treasurer of Manila a credit or refund of the increased business taxes which they paid for the period abovementioned. However, the City Treasurer denied their claim. Petitioners and their sister companies filed a complaint with the Regional Trial Court (RTC) of Pasay City a Complaint for Refund and/or Issuance of Tax Credit of Taxes Illegally Collected. RTC rendered a summary judgment in favor of herein petitioners. The RTC held that Tax Ordinance Nos. 7988 and 8011, which were the bases of the City of Manila in imposing the assailed additional business taxes on petitioners and their co-plaintiffs, had already been declared null and void by this Court in the case of Coca-Cola Bottlers Philippines, Inc. v. City of Manila. Respondents moved for reconsideration, but the RTC denied the same. The CTA Second Division sustained the ruling of the RTC that Ordinance Nos. 7988 and 8011 are null and void. The CTA Second Division, nonetheless, held that herein petitioners' claims for tax refund should be denied because of their failure to comply with the provisions of the Rules of Court requiring verification and submission of a certificate of non-forum shopping. The CTA Second Division noted that petitioners failed to attach to the complaint filed with the RTC their respective Secretary's Certificates authorizing their supposed representative, a certain Atty. Rex Enrico V. Cruz III (Atty. Cruz), to file the said complaint in their behalf. The
CTA also observed that in the Verification and Certification of Non-Forum Shopping attached to the complaint, petitioner SM Land, Inc. was not included in the list of corporations represented by the person who executed the said Verification and Certification. Aggrieved, petitioners filed a petition for review with the CTA En Banc. The CTA En Banc rendered its assailed Decision affirming in toto the judgment of the CTA S econd Division. Issue: Whether or not Sec. 11, R.A. No. 1125, as amended by republic act no. 9282, clearly did not intend for the thirty (30)-day period to appeal decisions of the regional trial court to the CTA to be extendible. Ruling: The Court is not persuaded by petitioners’ insistence that the 30-day period to appeal decisions of the RTC to the CTA is non-extendible.
Petitioners cited cases decided by this Court wherein it was held that the 30-day period within which to file an appeal with the CTA is jurisdictional and non-extendible. However, these rulings had been superseded by this Court's decision in the case of City of Manila v. Coca-Cola Bottlers, Philippines, Inc., as correctly cited by the CTA En Banc. Suffice it to say that this Court's ruling in the said case is instructive, to wit: xxxx The period to appeal the decision or ruling of the RTC to the CTA via a Petition for Review is specifically governed by Section 11 of Republic Act No. 9282, and Section 3 (a), Rule 8 of the Revised Rules of the CTA. It is crystal clear from the afore-quoted provisions that to appeal an adverse decision or ruling of the RTC to the CTA, the taxpayer must file a Petition for Review with the CTA within 30 days from receipt of said adverse decision or ruling of the RTC. It is also true that the same provisions are silent as to whether such 30-day period can be extended or not. However, Section 11 of Republic Act No. 9282 does state that the Petition for Review shall be filed with the CTA following the procedure analogous to Rule 42 of the Revised Rules of Civil Procedure. Following by analogy, Section 1, Rule 42 of the Revised Rules of Civil Procedure, the 30-day original period for filing a Petition for Review with the CTA under Section 11 of Republic Act No. 9282, as implemented by Section 3 (a), Rule 8 of the Revised Rules of the CTA, may be extended for a period of 15 days. No further extension shall be allowed thereafter, except only for the most compelling reasons, in which case the extended period shall not exceed 15 days. Nonetheless, the Court agrees with petitioners' contention in its second argument that there are compelling reasons in the present case which justify the relaxation of the rules on verification and certification of non-forum shopping. It must be kept in mind that while the requirement of the certification of non-forum shopping is mandatory, nonetheless, the requirements must not be interpreted too literally and, thus, defeat the objective of preventing the undesirable practice of forum shopping .
Time and again, the Court has held that rules of procedure are established to secure substantial justice. Being instruments for the speedy and efficient administration of justice, they must be used to achieve such end, not to derail it. In particular, when a strict and literal application of the rules on nonforum shopping and verification will result in a patent denial of substantial justice, these may be liberally construed .
Edgardo Pinga v. Heirs of German Santiago, G.R. No.170354, June 30, 2006 Facts: Eduardo Pinga, herein petitioner, together with Vicente Saavedra was named as defendants in an injunction case filed by herein respondent Heirs of Santiago. It was alleged in the complaint dated 1998 that Pinga and Saavedra had been unlawlly entering the coco lands of the respondents cutting trees and bamboo grass and gathering fruits of the trees therein.
In his answer with counterclaim, Pinga disputed the ownership over the property by the respondent and claimed the same was owned by his father who was already in possession thereof since 1930s. Furthermore, Pinga alleged that as far back as 1968, there was already an order ejecting the respondents from the property after a complaint for forcible entry was filed by the heirs of Edmundo Pinga. Several years have passed and the trial of the case had not yet been completed due to the several faults of the Respondent (as plaintiff), as when they failed to present evidence. And on 2004, the RTC ordered the dismissal of the action on the ground of Plaintiff's fault to prosecuted the case for unreasonable length of time. At the same time, RTC also allowed Pinga to present his evidence ex parte with respect to his counterclaim. The Respondents filed a Motion for Reconsideration, opting however not to seek that their complaint be reinstated, but praying instead that the entire action be dismissed and Petitioner be disallowed from presenting evidence ex-parte. They argued that the order of the RTC in allowing Pinga to present evidence ex parte would circumvent the principle laid down in established jurisprudence which hold that a counterclaim cannot exist independently from the principal complaint and be adjudicated separately. Thereafter, the RTC granted the Motion for Reconsideration filed by the respondent on the ground that there was no Opposition filed by Pinga. Thus, Petitioner Pinga moved to reconsider the order granting the earlier motion for reconsideration by the respondents but it was denied. Notably, the respondents filed an Opposition to Defendants’ Urgent Motion for Reconsideration, wherein they argued that the prevailing jurisprudential rule is that "compulsory counterclaims cannot be adjudicated independently of plaintiff’s cause of action," and " the dismissal of the complaint carries with it the dismissal of the compulsory counterclaims." Aggrieved, Pinga elevated the case to the Supreme Court by way of petition for review under Rule 45 on a pure question of law regarding the total dismissal of the case.
Issue: Whether or not the dismissal of the complaint necessarily carries the dismissal of the compulsory counterclaim. Ruling: No. The dismissal of the complaint does not necessarily carries with it the dismissal of the compulsory counterclaim.
Under Sec. 3 Rule 17 of the 1997 Rules of Civil Procedure: SEC. 3. Dismissal due to fault of plaintiff. — If, for no justifiable cause, the plaintiff fails to appear on the date of the presentation of his evidence in chief on the complaint, or to prosecute his action for an unreasonable length of time, or to comply with these Rules or any order of the court, the complaint may be dismissed upon motion of defendant or upon the court's own motion, without prejudice to the right of the defendant to prosecute his counterclaim in the same or in a separate action. This dismissal shall have the effect of an adjudication upon the merits, unless otherwise declared by the court.
The Court compared the same with the earlier 1964 Rules of Civil Procedure which was silent on the effect of such dismissal due to failure to prosecute on the pending counterclaims. As a result, there arose what one authority on remedial law characterized as "the nagging question of whether or not the dismissal of the complaint carries with it the dismissal of the counterclaim." The Court also made a lengthy discussion on the difference between Sections 2 and 3 of Rules 17. The dismissal of the complaint under Section 2 is at the instance of plaintiff, for whatever reason he is minded to move for such dismissal, and, as a matter of procedure, is without prejudice unless otherwise stated in the order of the court or, for that matter, in plaintiff's motion to dismiss his own complaint. Section 3 on the other hand, contemplates a dismissal not procured by plaintiff, albeit justified by causes imputable to him. Here, the issue of whether defendant has a pending counterclaim, permissive or compulsory, is not of determinative significance. The dismissal of plaintiff's complaint is evidently a confirmation of the failure of evidence to prove his cause ofaction outlined therein, hence the dismissal is considered, as a matter of evidence, an adjudication on the merits. The complaint can accordingly be dismissed, but relief can nevertheless be granted as a matter of course to defendant on his counterclaim as alleged and proved, with or without any reservation therefor on his part, unless from his conduct, express or implied, he has virtually consented to the concomitant dismissal of his counterclaim. The present rule embodied in Sections 2 and 3 of Rule 17 ordains a more equitable disposition of the counterclaims by ensuring that any judgment thereon is based on the merit of the counterclaim itself and not on the survival of the main complaint. Certainly, if the counterclaim is palpably without merit or suffers jurisdictional flaws which stand independent of the complaint, the trial court is not precluded from dismissing it under the amended rules, provided that the judgment or order dismissing the counterclaim is premised on those defects. At the same time, if the counterclaim is justified, the amended rules now unequivocally protect such complaint from peremptory dismissal by reason of the dismissal of the complaint.
In the Matter of the Petition for the Issuance of a Writ of Amparo in Favor of Lilibeth O. Ladaga vs. Maj. Gen. Reynaldo Mapagu. G.R. No. 189689-91, November 13, 2012. Facts: Petitioners share the common circumstance of having their names included in what is alleged to be a JCICC “AGILA” 3rd Quarter 2007Order of Battle Validation Result of the Philippine Army's 10th Infantry Division (10thID). They perceive that by the inclusion of their names in the said Order of Battle (OB List), they become easy targets of unexplained disappearances or extra legal killings – a real threat to their life, liberty and security. ATTY. LILIBETH O. LADAGA (Atty.Ladaga),first came to know of the existence of the OB List from an undisclosed source on May 21, 2009. In the OB List, it was reflected that the ULTIMATE GOAL is to TRY TO OUSTPGMAON 30 NOV 2007.
On the other hand, Atty. Angela Librado-Trinidad (Atty. Librado-Trinidad), delivered a privileged speech before the members of the Sangguniang Panlungsod to demand the removal of her name from said OB List. The Commission on Human Rights, for its part, announced the conduct of its own investigation into the matter. According to Atty. Librado-Trinidad, in the course of the performance of her dutites and functions, she has not committed any act against national security that would justify the inclusion of her name in the said OB List. She said that sometime in May 2008, two suspicious-looking men tailed her vehicle. Also, on June 23, 2008 three men tried to barge into their house. Meanwhile, Atty. Carlos Isagani T. Zarate was informed that h e was also included on the OB List. In his petition, he alleged that the inclusion of his name in the said OB List was due to his advocacies as a public interest or human rights lawyer. The Petitioners assert that the OB List is really a military hit-list as allegedly shown by the fact that there have already been three victims of extrajudicial killing whose violent deaths can be linked directly to the OB List. On June 16, 2009 filed before the RTC a Petition for the Issuance of a Writ of Amparo. The RTC subsequently issued separate Writs of Amparo, directing the respondents to file a verified written return. In the return of the respondents, they denied authorship of the OB List, and alleged that petitioners failed to show that they were responsible for the alleged threats. After submission of the parties’ respective Position Papers, the RTC issued Orders finding no substantial evidence to show that the perceived threat to petitioners’ life, liberty and security was attributable to the unlawful act or omission of the respondents. The privilege of the Writ was
therefore denied. Issues: Whether or not the totality of evidence satisfies the degree of proof required under the Writ of Amparo. Ruling: No, the evidence does not satisfy degree of proof for the issuance of the Writ of Amparo. The Writ of Amparo was promulgated by the Court pursuant to its rule-making powers in response to the alarming rise in the number of cases of enforced disappearances and extrajudicial killings. It is an extraordinary remedy intended to address violations of, or threats to, the rights to life, liberty or security and that, being a remedy of extraordinary character, is not one to issue on amorphous or uncertain grounds but only upon reasonable certainty . Justifying allegations must support the issuance of the writ, on the following matters:
1. The personal circumstances of the petitioner; 2. The name and personal circumstances of the respondent responsible for the threat, act or omission; 3. The right to life, liberty and security of the aggrieved party violated or threatened with violation by an unlawful act or omission of the respondent and how such threat or violation is committed with the attendant circumstances detailed in supporting affidavits; 4. The investigation conducted specifying the names, personal circumstances and addresses of the investigating authority or individuals; 5. Actions and recourses taken by the petitioner to determine the fate or whereabouts of the aggrieved party and the identity of the person responsible for the threat, act or omission; 6. The relief prayed for. Under the Rule on the Writ of Amparo, the parties shall establish their claims by substantial evidence, and if the allegations in the petition are proven by substantial evidence, the court shall grant the privilege of the writ and such reliefs as may be proper and appropriate . Substantial evidence is that amount of relevant evidence which a reasonable mind might accept as adequate to support a conclusion . Petitioners sought to prove that the inclusion of their names in the OB List presented a real threat to their security by attributing the violent deaths of the other known activists to the inclusion of their names or the names of their militant organizations in the subject OB List. However, the existence of the OB List could not be directly associated with the menacing behaviour of suspicious men or the violent deaths of certain personalities. The Petitioners cannot assert that the inclusion of their names in the OB List is as real a threat as that which brought ultimate harm to the other victims without corroborative evidence from which it can be presumed that the suspicious deaths of these three people were in fact, on account of their militant affiliations. The Petitioners therefore were not able to prove by substantial evidence that there was an actual threat to their rights to life, liberty and security. The mere inclusion of their names in the OB List is not sufficient enough evidence for the issuance of the Writ of Amparo.
Audi AG v. Hon. Jules A. Mejia, in his capacity as Executive Judge of the Regional Trial Court, Alaminos City; Auto ProminenceCorporation; and Proton Pilipinas Corporation G.R. No. 167533, July 27, 2007. Facts: Audi AG, a non-resident foreign company engaged in the manufacture of Audi brand cars, is organized in the Federal Republic of Germany, with principal office at Ingolstadt, Germany. It is not licensed to do business in the Philippines but is suing on an isolated transaction.
On August 1, 1996, Audi AG entered into an Assembly and Distributorship Agreement with Proton. According to the agreement, (1) Proton shall be the sole assembler and distributor of Audi cars in the Philippines; and (2) Audi AG will make representations that Proton will be the exclusive assembler and distributor of Audi cars and local parts manufacturer for export purposes. Relying on Audi AG’s representations, Proton borrowed money to buy (1) assembly plant and distributorship, (2) tools and equipment, (3) showrooms and offices, and (4) license fees and brochures, etc.
Proton later discovers that Audi AG did not include the Philippines in its ASEAN Assembly Strategy program, but only Malaysia. A letter was later sent by Audi AG terminating the agreements. On March 21, 2005, Auto Prominence and Proton filed a complaint for specific performance and injunction (with application for TRO and preliminary injunction) against petitioner Audi AG with the RTC, Alaminos City. After hearing, the Executive Judge ordered the issuance of a TRO and the maintenance of the status quo ante, even prior to the raffle of the case. Audi AG filed a Petition for Certiorari under Rule 65 before the Supreme Court. The respondents challenged the Petition for being filed without a prior Motion for Reconsideration and failure to observe the hierarchy of courts, among others. Issue: Whether or not the petition should be dismissed. Ruling: Yes. First, petitioner failed to file with the trial court the requisite motion for reconsideration of the challenged Order before resorting to the instant recourse. The well-established rule is that a motion for
reconsideration is an indispensable condition before an aggrieved party can resort to the special civil action for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, as amended .
The argument that a motion for reconsideration is unnecessary cannot be accepted. Petitioner may not arrogate unto itself the determination of whether a motion for reconsideration is necessary or not. Its submission runs counter to the purpose of the rule that a motion for reconsideration would afford the erring court or agency an opportunity to rectify the error/s it may have committed without the intervention of a higher court. Such motion is not only an expeditious remedy of an aggrieved party but also obviates an improvident and unnecessary recourse to appellate proceedings. Second, petitioner, by filing directly with this Court its petition, has ignored the established rule on hierarchy of courts. It must be stressed that the Court of Appeals and the Supreme Court have original concurrent jurisdiction over petitions for certiorari. The rule on hierarchy of courts determines the venue of appeals. Such rule is necessary to prevent inordinate demands upon the Courts precious time and attention which are better devoted to matters within its exclusive jurisdiction, and to prevent further overcrowding of the Court’s docket. Audi AG should have filed the petition before the Court of Appeals instead. Procedural rules are not to be disdained as mere technicalities. They may not be ignored to suit the convenience of a party. It ensures the effective enforcement of substantive rights through the orderly and speedy administration of justice. Public order and our system of justice are well served by a conscientious observance by the parties of the procedural rules. COMMISSION ON ELECTIONS, COMELEC CHAIRMAN ALFREDO L. BENIPAYO, COMELEC COMMISSIONERS RESURRECCION Z. BORRA and FLORENTINO A. TUASON, JR., petitioners , vs. JUDGE MA. LUISA QUIJANO-PADILLA, REGIONAL TRIAL COURT OF QUEZON CITY, BRANCH 215 and PHOTOKINA MARKETING CORP., respondents ., G. R. No. 151992. September 18, 2002. Facts: In 1996, the Philippine Congress passed Republic Act No. 8189, otherwise known as the "Voter's Registration Act of 1996," providing for the modernization and computerization of the voters' registration list and the appropriate of funds therefor "in order to establish a clean, complete, permanent and updated list of voters."
Pursuant thereto, the Commission on Elections (COMELEC) promulgated Resolution No. 00-0315 approving in principle the Voter's Registration and Identification System Project (VRIS) Project for brevity). The VRIS Project envisions a computerized database system for the May 2004 Elections. The idea is to have a national registration of voters whereby each registrant's fingerprints will be digitally entered into the system and upon completion of registration, compared and matched with other entries to eliminate double entries. A tamper-proof and counterfeit-resistant voter's identification card will then be issues to each registrant as a visual record of the registration. On September 9, 1999, the COMELEC issued invitations to pre-qualify and bid for the supply and installations of information technology equipment and ancillary services for its VRIS Project. Private respondent Photokina Marketing Corporation (PHOTOKINA) pre-qualified and was allowed to participate as one of the bidders. After the public bidding was conducted, PHOTOKINA's bid in the amount of P6.588 Billion Pesos garnered the highest total weighted score and was declared the winning bidder. Thus, the COMELEC issued Resolution No. 3252, which approves the Notice of Award to PHOTOKINA. The parties then proceeded to formalize the contract, with Commissioner Mehol K. Sadain and Atty. Rodrigo D. Sta. Ana, acting as negotiators for the COMELEC and PHOTOKINA, respectively.However, under Republic Act No. 8760[8] the budget appropriated by Congress for the COMELECs modernization project was only One (1) Billion Pesos and that the actual available funds under the Certificate of Availability of Funds (CAF) issued by the Chief Accountant of the COMELEC was only P1.2 Billion Pesos.
Subsequently, the COMELEC Chairman Harriet O. Demetriou issued a memorandum to the COMELEC en banc expressing her objections to the contract. PHOTOKINA, meanwhile, as the winning bidder, wrote several letters to the COMELEC requesting the formal execution of the contract, but to no avail. Then Chairman Benipayo announced that the VRIS Project has been scrapped, dropped, junked, or set aside. He further announced his plan to re-engineer the entire modernization program of the COMELEC, emphasizing his intention to replace the VRIS Project with his own version, the Triple E Vision. On October 2, 2001, Senator Edgardo J. Angara directed the creation of a technical working group to assist the COMELEC in evaluating all programs for the modernization of the COMELEC, which will also consider the PHOTOKINA contract as an alternative program, and various competing programs for the purpose.PHOTOKINA then filed with the Regional Trial Court, Branch 215, Quezon City a petition for mandamus, prohibition and damages (with prayer for temporary restraining order, preliminary prohibitory injunction and preliminary mandatory injunction) against the COMELEC and all its Commissioners. PHOTOKINA alleged three causes of action: first, the deliberate refusal of the COMELEC and its Commissioners to formalize the contract rendered nugatory the perfected contract between them; second, in announcing that the VRIS Project has been junked and that he has plans to re-engineer the COMELECs entire modernization program, Chairman Benipayo committed grave abuse of discretion; and third, the COMELECs failure to perform its duty under the contract has caused PHOTOKINA to incur damages since it has spent substantial time and resources in the preparation of the bid and the draft contract. Respondent Judge Ma. Luisa Quijano-Padilla issued the first assailed Resolution granting PHOTOKINAs application for a writ of preliminary prohibitory injunction which: (1) grant the application for the issuance of a writ of preliminary prohibitory injunction; and (2) deny the application for the issuance of a writ of preliminary mandatory injunction. Hence, let a writ of preliminary prohibitory injunction issue which enjoins respondents, their agents, successors and assigns from replacing the VRIS Project upon petitioners posting of a bond in the amount of P20,000,000.00, which bond shall answer for whatever damages which may be sustained by reason of the issuance of the said writ, if it turns out that the plaintiffs are not entitled thereto. Both parties filed their respective motions for reconsideration. On February 8, 2002, respondent judge issued the second assailed Resolution denying the COMELECs Omnibus Motion and, this time, granting PHOTOKINAs application for a writ of preliminary mandatory injunction which : (1) deny Respondents Omnibus Motion for the dismissal of this case and for the reconsideration of this Courts Resolution granting the writ of preliminary prohibitory injunction; (2) grant Petitioners Motion dated January 2, 2002 insofar as it prays for the issuance of a writ of preliminary mandatory injunction; (3) Grant the prayer for the reduction of the preliminary prohibitory injunction bond from P20,000,000.00 to P10,000,000.00; (4) Clarify its Resolution dated December 19, 2001 to the extent that the writ of preliminary prohibitory injunction will also enjoin Respondents, their agents, successors and assigns from disregarding the contract for the VRIS Project between Petitioner and Respondent COMELEC; (5) deny Petitioners motion to declare Respondents in default. Hence, the instant petition for certiorari filed by the Office of the Solicitor General (OSG) in behalf of then COMELEC Chairman Alfredo L. Benipayo and Commissioners Resurreccion Z. Borra and Florentino A. Tuason, Jr.. Petitioners contend that: (1) a petition for mandamus and prohibition does not lie to enforce contractual obligations, hence, PHOTOKINAs proper recourse before the Regional Trial Court should have been an action for specific performance; (2) respondent judge, by issuing the injunctive writs, already assumed that the VRIS Project was lawfully awarded by the COMELEC to PHOTOKINA, and that there is a valid perfected contract between them, thus, manifesting her prejudgment; and (3) injunctive writs should not be issued when an action for damages can adequately compensate for the injuries. Petitioners pray that the two assailed Resolutions be nullified and Special Civil Action No. Q-01-45405 be dismissed outright.
PHOTOKINA filed a Comment with Motion to Dismiss, the present petition, on two procedural grounds. First, the petition violates the doctrine of hierarchy of courts. And second, the OSG has no authority and/or standing to file the petition considering that the petitioners have not been authorized by the COMELEC en banc to take such action. Without the concurrence of at least a majority of the members of the COMELEC, neither petitioners nor the OSG could file the petition in behalf of the COMELEC. In refutation of petitioners arguments, PHOTOKINA contends that mandamus is an appropriate remedy since what is involved in Special Civil Action No. Q-01-45405 is the performance of a ministerial duty. PHOTOKINA maintains that mandamus may be availed of by private parties to compel public officers to act on a contract entered into pursuant to law. The petition is impressed with merit. Issues: (1) Whether or not the OSG has no standing to file the present petition since its legal position is contrary to that espoused by the majority of the COMELEC Commissioners.
(2) Whether or not there is a breach of violation of hierarchy of Courts. (3) Whether or not a petition for mandamus is the appropriate remedy to enforce contractual obligations.
Ruling: (1) No, the OSG has standing to file the present petition.
In Orbos vs. Civil Service Commission, the Court ruled: "x x x It is incumbent upon him (Solicitor General) to present to the court what he considers would legally uphold the best interest of the government although it may run counter to a clients position. x x x. "In the present case, it appears that after the Solicitor General studied the issues he found merit in the cause of the petitioner based on the applicable law and jurisprudence. Thus, it is his duty to represent the petitioner as he did by filing this petition. He cannot be disqualified from appearing for the petitioner even if in so doing his representation runs against the interests of the CSC. "This is not the first time that the Office of the Solicitor General has taken a position adverse to his clients like the CSC, the National Labor Relations Commission, among others, and even the People of the Philippines.
Hence, while petitioners stand is contrary to that of the majority of the Commissioners, still, the OSG may represent the COMELEC as long as in its assessment, such would be for the best interest of the government. For, indeed, in the final analysis, the client of the OSG is not the agency but no less than the Republic of the Philippines in whom the plenum of sovereignty resides. Moreover, it must be emphasized that petitioners are also public officials entitled to be represented by the OSG. Under Executive Order No. 292 and Presidential Decree No. 478, the OSG is the lawyer of the government, its agencies and instrumentalities, and its officials or agents. This mandate includes the three petitioners who have been impleaded as public respondents in Special Civil Action No. Q-01-45405. 2. There is no violation of the hierarch of Courts. Suffice it to say that it is not an iron-clad dictum. On several instances where this Court was confronted with cases of national interest and of serious implications, it never hesitated to set aside the rule and proceed with the judicial determination of the case. The case at bar is of similar import. It is in the interest of the State that questions relating to government contracts be settled without delay. This is more so when the contract, as in this case, involves the disbursement of public funds and the modernization of our countrys election process, a project that has long been overdue .
3. No, mandamus is not the proper recourse to enforce the COMELEC's alleged contractual obligations with PHOTOKINA.No rule of law is better settled than that mandamus does not lie to enforce the performance of contractual obligations. As early as 1924, Justice Street, in Quiogue vs. Romualdez, already set forth the justification of this rule, thus: Upon the facts above stated we are of the opinion that the writ of o f mandamus m andamus is not the appropriate, or even an admissible remedy. It is manifest that whatever rights the petitioner may have, upon the facts stated, are derived from her contract with the city; and no rule of law is better settled than that mandamus never lies to enforce the performance of private contracts. x x x The petitioners remedy, if any she has, is by an original action in the Court of First Instance to compel the city to pay the agreed price or to pay damages for the breach of contract. "x x x. As said in Lowe vs. Phelps (14 Bush, 642): It must, therefore, appear upon every application for a mandamus that it is the legal duty of the respondent to do that which it is sought to compel him to do, and that he has upon proper application refused to perform that duty.' (Citing numerous authorities). "It was not intended to aid a plaintiff in the enforcement of a mere contract right, or to take the place of the other remedies provided by law for the adjudication of disputed claims. Looking at the case from the standpoint of appellant, it involves nothing more than an ordinary breach of contract. If, as contended, the appellant had a valid contract with the school board, it also had an adequate remedy at law to recover damages for its breach; and to permit the writ of mandamus to be used for the purpose of enforcing a mere contract right would be a wide departure from the settled practice in respect to the character of cases in which relief by mandamus may ma y be obtained. "In Parrott vs. City of Br idgeport (44 (44 Conn., 180), the writ was refused where the petitioner sought to compel a city to construct a public street in a certain manner agreeably to the terms of a special agreement between the petitioner and the city. In the course of the opinion the court said: "* * * The duty, therefore, if any, which rests upon the city in this regard, is one which it owes to the petitioner as an individual, not to the public, and the special contract is the foundation upon which it rests. But the writ of mandamus has never been considered as an appropriate remedy for the enforcement of contract rights of a private and personal nature and obligations which rest wholly upon contract and which involve no questions of public trusts or official duty. Indeed, strictly speaking, it never lies where the party aggrieved has adequate remedy at law, and its aid is only to be invoked to prevent an absolute failure of justice in cases where ordinary legal processes furnish no relief. (Emphasis supplied) Akin to the Court's rulings cited above, the Court hold that mandamus is not the proper recourse to enforce the COMELEC's alleged contractual obligations with PHOTOKINA. It has other adequate remedy in law. Moreover, the judicial caution that mandamus applies as a remedy only where petitioner's right is founded clearly in law and not when it is doubtful. Legal rights may be enforced by mandamus only if those rights are well-defined, clear and certain. Here, the alleged contract, relied upon by PHOTOKINA as source of its rights which it seeks to be protected, is being disputed, not only on the ground that it was not perfected but also because it is illegal and against public policy. Of course, there are cases in which the writ of mandamus has been used to compel public officers to perform certain acts, but it will be generally observed that in such cases, the contracts have been completely performed by the petitioner, and nothing remained to be done except for the government go vernment to make compensation. These exceptional cases are cited in Isada vs. Bocar where where the act of the respondent public officer has the effect of setting aside contracts already in the process of consummation. In contrast with Isada, the alleged contract here has not yet been fully performed by PHOTOKINA; and though it avers readiness to perform, petitioners raised serious questions as to its validity. Their posture is tenable.
United Claimants Association of NEA v. National Electrification Administration. G.R. NO. 187107. January 31, 2012. Facts: Respondent NEA is a government-owned and/or controlled corporation created in accordance with Presidential Decree No. 269. Under PD 269, the NEA Board is empowered to organize or reorganize NEA’s staffing structure. structure.
In order to enhance and accelerate the electrification of the whole country, including the privatization of the National Power Corporation, RA 9136, otherwise known as the Electric Power Industry Reform Act of 2001 (EPIRA Law), was enacted. The said law provides for the framework for the restructuring of the electric power industry, and that the DOE shall, in consultation with the electric power industry participants and end-users, promulgate the Implementing Rules and Regulations (IRR). Subsequently, the Rules and Regulations to implement RA 9136 were issued wherein it was provided that all the NEA employees and officers are considered terminated and the 965 plantilla positions of NEA vacant. Meanwhile, former President Gloria Macapagal- Arroyo issued EO 119 directing the NEA Board to submit a reorganization plan. Thereafter, the NEA implemented an early retirement program denominated as the "Early "Earl y Leavers Program," giving givin g incentives to those who availed of it and left NEA before the effectivity of the reorganization plan. The other employees were subsequently terminated. Petitioners are former employees of NEA who were terminated from their employment with the implementation of the assailed resolutions. Petitioners initiated an original action for Injunction with the Supreme Court to restrain and/or prevent the implementation of NEA Termination Pay Plan, issued by respondent NEA Board. Petitioners contend that The NEA Board has no power to terminate all the NEA employees, Executive Order No. 119 did not grant the NEA Board the power to terminate all NEA employees, and the assailed resolution were carried out in bad faith. Respondents, on the other hand, argued that the Court has no jurisdiction over the petition, that Injunction is improper since that assailed resolutions have long been implemented, and the assailed resolution was carried out in good faith. Issues: (1) Whether or not the Court has jurisdiction notwithstanding the fact that the action for injunction was filed directly with the SC without regard to the doctrine of hierarchy of courts.
(2) Whether or not Injunction is still available in the case at bar.
Ruling: (1) Yes. While it is true that by virtue of the doctrine of hierarchy of courts, the instant petition should have been filed with the RTC. However, as an exception to this general rule, the principle of hierarchy of courts may be set aside for special and important reasons . Such reason exists in the instant case involving as it does the employment of the entire plantilla of NEA, more than 700 employees all told, who were effectively dismissed from employment in one swift stroke. This to the mind of the Court entails its attention.
(2) Yes. As a rule, the writ of prohibition will not lie to enjoin acts already done. However, as an exception to the rule on mootness, courts will decide a question otherwise moot if it is capable of repetition yet evading review . Similarly, in the instant case, while the assailed resolutions of the NEA Board may have long been implemented, such acts of the NEA Board may well be repeated by other government agencies in the reorganization of their offices. Petitioners have not lost their remedy of injunction.
PHILIPPINE SINTER CORPORATION and PHIVIDEC INDUSTRIAL AUTHORITY, petitioners , vs. CAGAYAN ELECTRIC POWER AND LIGHT CO., INC., respondent . G.R. No. 127371. April 25, 2002. Facts: On January 21, 1987, President Corazon C. Aquino and her Cabinet approved a Cabinet Reform Policy for the power sector and issued a Cabinet Memorandum, Item No. 2 of which provides: “Continue direct connection for industries authorized under the BOI -NPC Memorandum of Understanding of 12 January 1981, until such time as the appropriate regulatory board determines that direct connection of industry to NPC is no longer necessary in the franchise area of the specific utility or cooperative. Determination shall be based in the utility or cooperatives meeting the standards of financial and technical capability with satisfactory guarantees of non prejudice to industry to be set in consultati on with NPC and relevant government agencies and reviewed periodically by the regulatory board.”
Pursuant to such Cabinet Memorandum, respondent Cagayan Electric Power and Light, Co. (CEPALCO), grantee of a legislative franchise to distribute electric power to the municipalities of Villanueva, Jasaan and Tagoloan, and the city of Cagayan de Oro, all of the province of Misamis Oriental, filed with the Energy Regulatory Board (ERB) a petition entitled “In Re: Petition for Implementation of Cabinet Policy Reforms in the Power Sector.” The petition sought the “discontinuation of all existing direct supply of power by the National Power Corporation (NPC, now NAPOCOR) within CEPALCO’s franchise a rea.” The ERB issued a notice of public hearing which was published in the Newspapers and posted in the affected areas. It likewise furnished NAPOCOR and the Board of Investments (BOI) copies of the petition and directed them to submit their comments. The ERB granted the petition of CEPALCO. Subsequently, the motion for reconsideration of NAPOCOR was denied. NAPOCOR then went to the Court of Appeals (CA), and filed a petition for review. The CA dismissed the petition on the ground that the motion for reconsideration filed with the ERB was file out of time, and thus, rendering the decision of the ERB final and executory and can no longer be the subject of a petition for review. Thereafter, NAPOCOR went to the Supreme Court Cou rt (SC) and filed a petition for review on o n certiorari. The SC affirmed the CA’s decision.
To implement the decision of the ERB, CEPALCO wrote Philippine Sinter Corporation (PSC), petitioner, and advised the latter of its desire “to have the power supply of PSC, directly taken from NPC (NAPOCOR), disconnected, cut and transferred” to CEPALCO. PSC is an entity operating its business within the PHIVIDEC Industrial Estate. The Estate is managed and operated by the PHIVIDEC Industrial Authority (PIA). PSC refused the request of CEPALCO, since according to the former there is a contract for power supply between it and NAPOCOR which contract is effective until July 26, 1996. To restrain the execution of the ERB’s decision, PSC and PIA filed an action for injunction with the Regional Trial Court (RTC), Branch 17 of Bacolod City. The RTC rendered judgment in favor PSC and PIA. The motion for reconsideration filed by CEPALCO was denied.
CEPALCO brought the matter to the CA by way of appeal. The CA ruled in favor of CEPALCO, and the motion for reconsideration filed by PSC and PIA was denied. Hence, the present petition to the SC.
Issue: Whether or not a preliminary injunction will prosper against the final and executory decision of the ERB. Ruling: No. The rule is that after a judgment has attained finality, it becomes the ministerial duty of the court to order its execution . No court can interfere by injunction or otherwise restrain such execution. However, this rule admits of exceptions : 1. When facts and circumstances later transpire that would render execution inequitable or unjust, the interested party may ask a competent court to stay the judgment’s execution or prevent its enforcement.
2. A change in the situation of the parties can warrant an injunctive relief. Unfortunately for PSC and PIA, none of the exceptions are present in the instant case, based on the facts of the case.To disturb the final and executory judgment of the ERB through injunction is an utter disregard of the rule on finality of judgments. The Court further said that under Sec.10 Executive Oder No. 172 (the law creating the ERB) review of the decisions of the ERB is lodged with the SC. Where the law provides for an appeal to the SC or CA from Administrative Agencies, this means that the latter are co-equal with the RTCs in terms of rank and stature, and thus, beyond the RTCs control. Hence, this being the case, the RTC cannot interfere with the decision of the ERB.This doctrine of non-interference of trial courts with co-equal administrative bodies is intended to ensure judicial stability in the administration of justice whereby the judgment of a court of competent jurisdiction may not be opened, modified or vacated by any court of concurrent jurisdiction.
Omictin vs. CA and Lagos Facts: Petitioner Vincent E. Omictin, Operations Manager Ad Interim of Saag Phils., Inc., filed a complaint for two counts of estafa with the Office of the City Prosecutor of Makati against private respondent George I. Lagos. He alleged that private respondent, despite repeated demands, refused to return the two company vehicles entrusted to him when he was still the president of Saag Phils., Inc. On February 26, 1999, public prosecutor recommended the indictment of private respondent, and on the same day, respondent was charged with the crime of estafa under Article 315, par. 1(b) of the Revised Penal Code before the Regional Trial Court (RTC).
On June 24, 1999, private respondent filed a motion to suspend proceedings on the basis of a prejudicial question because of a pending petition with the Securities and Exchange Commission (SEC) involving the same parties. It appears that on January 7, 1999, private respondent filed SEC Case No. 01-99-6185 for the declaration of nullity of the respective appointments of Alex Y. Tan and petitioner as President Ad Interim and Operations Manager Ad Interim of Saag Phils., Inc., declaration of dividends, recovery of share in the profits, involuntary dissolution and the appointment of a receiver, recovery of damages and an application for a temporary restraining order (TRO) and injunction against Saag (S) Pte. Ltd., Nicholas Ng, Janifer Yeo, Tan and petitioner. In the action before the SEC, private respondent averred that Saag (S) Pte. Ltd. is a foreign corporation organized and existing under the laws of Singapore. On September 9, 1994, Saag Philippines, Inc. was incorporated with Saag (S) Pte. Ltd. as the majority stockholder. Private respondent was elected as President. Later, due to intra-corporate disputes, president of Saag Singapore resigned and divested their shares in Saag Corporation (Bhd), thereby resulting in a change in the controlling interest in Saag (S) Pte. Ltd. Barely three months after, or on June 23, 1998, private respondent resigned his post as president of Saag Phils., Inc. while still retaining his position as a director of the company. According to private respondent, the joint venture agreement (JVA) between him or Saag Phils., Inc. and Saag (S) Pte. Ltd. provided that should the controlling interest in the latter company, or its parent company Saag Corp. (Bhd), be acquired by any other person or entity without his prior consent, he has the option either to require the other stockholders to purchase his shares or to terminate the JVA and dissolve Saag Phils., Inc. altogether. Petitioner made several requests to the director, and executive director of Saag (S) Pte. Ltd., to call for a board meeting in order to discuss the
following: a) implementation of the board resolution declaring dividends; b) acquisition of private respondents shares by Saag (S) Pte. Ltd.; c) dissolution of Saag Phils., Inc.; and d) the termination of the JVA. Both failed to appear, however, they issued a letter appointing Alex Y. Tan as President Ad Interim of Saag Phils., Inc. Tan, in turn, appointed petitioner Omictin as the company’s Operations Manager Ad Interim. Citing as a reason the absence of a board resolution authorizing the continued operations of Saag Phils., Inc., private respondent retained his possession of the office equipment of the company in a fiduciary capacity as director of the corporation pending its dissolution and/or the resolution of the intra-corporate dispute. He likewise changed the locks of the offices of the company allegedly to prevent Tan and petitioner from seizing company property. Private respondent stressed that Tan’s appointment was invalid because it was in derogation of the company by-laws. As Tan’s appointment did not have the acquiescence of the board of directors, petitioners appointment by the former is likewise allegedly invalid. Thus, neither has the power or the authority to represent or act for Saag Phils., Inc. in an y transaction or action before the SEC or any court of justice.
In a case for estafa, a valid demand made by an offended party is one of the essential elements. It appears from the records that the delay of delivery of the motor vehicles by Lagos to Saag Corporation is by reason of his contention that the demand made by Omictin and Atty. Tan to him to return the subject vehicles is not a valid demand. As earlier mentioned, petitioner filed a case with the SEC questioning therein private respondents appointment. If the SEC should rule that the dissolution of Saag Phils.is proper, or that the appointments of private respondents are invalid, the criminal case will eventually be dismissed due to the absence of one of the essential elements of the crime of estafa.Based on the foregoing, it is clear that a prejudicial question exists which calls for the suspension of the criminal proceedings before the lower court.Incidentally, on January 18, 2001, the SEC case was transferred to the Regional Trial Court (RTC) of Mandaluyong City, Branch 214, pursuant to A.M. No. 00-11-03-SC implementing the Securities and Regulation Code (Republic Act No. 8799) enacted on July 19, 2000, vesting in the RTC’s jurisdiction over intra-corporate disputes. Issue: Whether or not a prejudicial question exists to warrant the suspension of the criminal proceedings pending the resolution of the intra-corporate controversy that was originally filed with the SEC. Ruling: Yes. Here, the case which was lodged originally before the SEC and which is now pending before the RTC of Mandaluyong City by virtue of Republic Act No. 8799 involves facts that are intimately related to those upon which the criminal prosecution is based. Ultimately, the resolution of the issues raised in the intra-corporate dispute will determine the guilt or innocence of private respondent in the crime of estafa filed against him by petitioner before the RTC of Makati.
Since the alleged offended party is Saag Phils., Inc., the validity of the demand for the delivery of the subject vehicles rests upon the authority of the person making such a demand on the company’s behalf. Private respondent is challenging Omictin’s authority to act for Saag Phils., Inc. in the corporate case pending before the RTC of Mandaluyong. Taken in this light, if the supposed authority of petitioner is found to be defective, it is as if no demand was ever made, hence, the prosecution for estafa cannot prosper. By analogy, the doctrine of primary jurisdiction may be applied in this case. The issues raised by petitioner particularly the status of Saag Phils., Inc. vis--vis Saag (S) Pte. Ltd., as well as the question regarding the supposed authority of the latter to make a demand on behalf of the company, are proper subjects for the determination of the tribunal hearing the intra-corporate case which in this case is the RTC of Mandaluyong. These issues would have been referred to the expertise of the SEC in accordance with the doctrine of primary jurisdiction had the case not been transferred to the RTC of Mandaluyong.
The court cannot or will not determine a controversy involving a question which is within the jurisdiction of the administrative tribunal, where the question demands the exercise of sound administrative discretion requiring special knowledge, experience and services in determining technical and intricate matters of fact.
However, the Court believes that the circumstances in the instant case do not proscribe the application of the doctrine, as the role of SEC in determining technical and intricate matters of special competence has been taken on by RTCs by virtue of Republic Act No. 8799. Hence, the RTC of Mandaluyong where the intracorporate case is pending has the primary jurisdiction to determine the issues under contention relating to the status of the domestic corporation, Saag Phils., Inc., and Saag Pte. Ltd.; and the authority of petitioner to act on behalf of the domestic corporation, the determination of which will have a direct bearing on the criminal case. The law recognizes that, in place of the SEC, the regular courts now have the legal competence to decide intracorporate disputes.
REPUBLIC OF THE PHILIPPINES, ET. AL. , Petitioner vs. CARLITO LACAP, Respondent G.R. NO. 158253. March 2, 2007. Facts: Respondent, doing business under the name of Carwin Construction, sought to collect payment for the completed project by virtue of the Contract Agreement with Department of Public Works and Highways (DPWH). The Commission on Audit (COA) disapproved the final release of funds because respondent’s license had expired at the time of the execution of the contract. DPWH Legal Department opined that RA No. 4566 known as Contractor’s License Law, does not provide that a contract entered into after the license has expired is void thus recommended the payment to respondent.
Respondent filed the complaint for Specific Performance and Damages before the Regional Trial Court (RTC). Petitioner, thru the Office of the Solicitor General (OSG) filed a Motion to Dismiss on the ground that complaint states no cause of action and RTC had no jurisdiction since respondent did not appeal the COA decision. Respondent filed an Opposition to the Motion to Dismiss. RTC denied the Motion to Dismiss thus the OSG filed a Motion for Reconsideration but it was likewise denied. OSG filed its Answer invoking defenses of non-exhaustion of administrative remedies and doctrine of non-suability of the State. RTC rendered a decision in favor of Respondent. Dissatisfied, Republic filed an appeal with the Court of Appeals (CA). CA sustained the RTC since the case involved the application of the principle of estoppel against the Republic which is purely a legal question hence this petition. Issues: Republic’s contention is that the CA erred in not finding that Respondent has no cause of action considering that: a. Respondent failed to exhaust administrative remedies; b. It is the COA which has primary jurisdiction to resolve respondent’s money claim. Rulinf: A. No, the CA did not err in holding that respondent did not fail to exhaust administrative remedies. The general rule is that before a party may seek the intervention of the court, he should first avail of all means afforded him by administrative processes. The doctrine of exhaustion of administrative remedies has exceptions such as “where there is unreasonable delay or official inaction that will irretrievably prejudice the complainant” and “where the question involved is purely legal and will ultimately have to be decided by the courts of justice.” Whether a contractor with an expired license at the
time of the execution of its contract is entitled to be paid for completed projects is a pure question of law. RA No. 4566 merely provide for a fine for any contractor who, for a price, contracts without first securing a license. It does not declare as void contracts such contracts. Thus respondent should be paid for the projects he completed but such payment, however, is without prejudice to the payment of fine prescribed under the law. B. No, the CA did not err in holding that COA has no primary jurisdiction because there involved a purely legal question thus final determination on the matter rests not with them but with the courts of justice.
Gabriel Abad, et. al., vs. Regional Trial Court of Manila G.R. No. L-65505. October 12, 1987. Facts: The instant petition for Certiorari originated from a complaint by the petitioner filed on August 18, 1978 against respondent Philippines American General Insurance Company, Inc. for the enforcement of contract and recovery of loss of money basically praying for, among other things, payment of the money value of the respective accumulated sick leave with pay of the separated employees of respondent company either thru retirement, retrenchment or resignation. Instead of filing an answer thereto, PHILAMGEN moved to dismiss the complaint, which the trial court granted in its order dated February 16,1979. After a denial of their motion to reconsider the aforesaid order by the trial court on May 2, 1979, petitioners filed before this Court a petition for Certiorari, docketed as G.R. No. 50563; setting aside the orders dated February 16,1979 and May 2, 1979 and reinstating the dismissed complaint.
The case was remanded to the trial court, unfortunately a fire destroyed the sala wherein the entire records of Civil Case No.117708 were kept, however, it was reconstituted and renumbered as Civil Case No. 82-1324. Thereafter, Philamgen filed its Answer to the complaint. Judicial reorganization took place by the passage of Executive Order No. 864 and the case was re-raffled to respondent Regional Trial Court of Manila. Respondent court motu proprio dismissed the complaint in Civil Case No. 82-1324 declaring that it lacked jurisdiction over the subject matter, being money claims arising from employer-employee relations. Motion for reconsideration filed by petitioner was denied by respondent judge. Hence, this petition for certiorari. Issue: Whether respondent court erred in reversing motu proprio this Honorable Supreme Court`s decision in G.R. No. L-50563 by dismissing once again the petitioner`s action on the erroneous ground of lack of jurisdiction. Ruling: Section 1 of Executive Order No. 864 provides that the Courts of First Instance shall be deemed automatically abolished upon the constitution and organization of the courts provided in Batas Pambansa Blg. 129 as of 12:00 o'clock midnight of January 17, 1983, which re-echoes a sentence in Section 44 of said Act. With the abolition of the Court of First Instance — which was held in G.R. No. 50563 as having jurisdiction over the case, the jurisdiction of said court was abolished with it.
Of course, insofar as the reorganized courts vested with general jurisdiction, Batas Pambansa Blg. 129 was and still the controlling law. When it comes to labor-related actions, however, such as the one at bar, initial jurisdiction is vested on administrative machineries provided for the expeditious settlement of labor or industrial disputes. Art. 217 provides that the labor arbiter shall have original and exclusive jurisdiction to hear and decide cases involving all workers, whether agricultural or non-agricultural, in disputes regarding all money claims of workers, including those based on non-payment or underpayment of wages, overtime compensation, separation pay and other benefits provided by law or appropriate agreement. Except claims for employee`s compensation, social security, medicare and maternity benefits. This provision was in force when the judicial reorganization took place. However, it must be noted that this article of the Labor Code was originally Article 216 of PD 442, but subsequently renumbered to Art. 217, amended by PD 1367 which took effect 1 May 1978, further amended by PD 1691 which took effect 1 May 1980, then further amended by BP Blg. 130 which took effect on 21 August 1981 and finally amended by BP Blg. 227which took effect on 1 June 1982. The Court said that it is not unmindful of the fact that G.R. No. 50563 was decided by the highest Court on the basis of the provisions of Article 217 of the Labor Code,as amended by BP 1367, which took effect on 1 May 1978, but as heretofore indicated, subsequent amendments of the same provision took place. In said decision in G.R. No. 50563, mention was made of the amendment brought about by PD 1367 having been given retroactive application. Following this rule of retrospective application, we can not see any reason why the subsequent amendment to Article 217 of the Labor Code, brought about by PD 1691, BP Blg. 130 and BP Blg. 227 may not also be applied to this action which was filed on 28 August 1978. The Court is not also unaware of that portion of Section 44 of BP Blg. 129 providing that cases pending in the abolished courts shall be transferred to the appropriate courts created in the Act, but it is evident that the phrase 'appropriate courts' must have reference to those courts whose jurisdiction are clearly defined in other parts of the law, otherwise a mere transitory provision will serve to negate the primary and avowed purpose of the judiciary reorganization act. But be that as it may, this provision has hardly any application here because this case is being referred to an administrative machinery which has better facilities of adjudicating the claim more expeditiously as they are not hamstrung by the strict rules of procedure and evidence.
OPTIMA REALTY CORPORATION vs. HERTZ PHIL. EXCLUSIVE CARS, INC. GR NO. 183035. JANUARY 9, 2013. Facts: Petitioner Optima is engaged in the business of leasing and renting out commercial spaces and buildings to its tenants. On December 12, 2002, Optima and Respondent Hertz entered into a Contract of Lease over an office unit and parking slot in the Optima Bulding for a period of 3 years. However, the lease agreement was amended by shortening the lease period ot 2 years and 5 months. The lease period was from October 1, 2003 to February 28, 2006.
Hertz requested Optima a 50% discount on its rent for the months of Maty to August 2005 since Hertz suffered 50% drop in its monthly sales and significant decrease in its personnel’s pro ductivity due to the commencement of renovations in the building. However, Hertz failed to pay its rentals from August to December 2005 and January to February 2006 notwithstanding the fact that Optima granted the former’s request. It also failed to pa y its utility bills. Optima sent a letter to Hertz, reminding the latter if it will renew its contract by a new negotiation between them and upon written notice by the lessee to the lessor at least 90 days before the termination of the lease period. Since Hertz failed to send written notice renewing its contract and it’s desire to negotiate, Optima did not renew the lease. Hertz filed a Complaint for Specific Performance, Injunction, Damages and Sum of money and prayed for the issuance of a TRO and writ of preliminary Injunction against Optima. It sought the issuance of a TRO to enjoin Optima from committing acts which would tend to disrupt it’s peaceful use and possession of the leased premises and wit of preliminary injunction to order Optima to reconnect its utilities. Thereafter, Optima demanded Hertz to surrender and vacate the leased premises and pay P420,967.28 covering rental arrearages, unpaid utility bills and other charges. Due to Hertz’s refusal to vacate the leased premises, Optima filed an action before the MeTC for Unlawful Detainer and Damages with Prayer for the Issuance of a TRO and/or Preliminary Mandatory Injunction against Hertz. MeTC rendered judgment in favor of Optima and ordered Hertz to vacate the leased premises and to oder the amount of P420,967.28 representing its rentals arrearages and utility charger as well as the payment
for the monthly use and occupancy of the premises from March 2006 until possession is restored to the plaintiff in the amount of P54,200 per month. RTC affirmed the decision of the MeTC. However, on appeal, the Court of Appeals reversed and set aside the decision of the RTC. CA ruled that, due to the improper service of summons, the MeTC failed to acquire jurisdiction over the person of respondent Hertz. Optima then filed Petition for review on Certiorari under Rule 45 with the SC Issues: (1) Whether the MeTC properly acquired jurisdiction over the person of respondent Hertz;
(2) Whether the unlawful detainer case is barred by litis pendentia. Ruling: (1) Yes. MeTC acquired jurisdiction over the person of respondent Hertz.Jurisdiction over the person of the defendant may be acquired either by service of summons or by the defendant’s voluntary appearance in court and submission to its authority. In this case, the MeTC acquired jurisdiction over the person of respondent Hertz by reason of the latter’s voluntary appearance in court.In spite of the defective service of summons, the defendant opted to file an Answer with Counterclaim with Leave of Court. Furthermore, it never raised the defense of improper service of summons in its answer with counterclaim.
(2) No. the Unlawful detainer case is not barred by litis pendentia.The Court ruled that while there is identity of parties in both cases, the rights asserted and the reliefs prayed for under the Complaint for Specific Performance and those under the present Unlawful Detainer Complaint are different.The Complaint for Specific Performance seeks to compel Optima to: (1) renegotiate the contract of lease; (2) reconnect the utilities at the leased premises; and (3) pay damages. On the other hand, the unlawful detainer case sought the ejectment of defendant-appellant Hertz from the leased premises and to collect arrears in rentals and utility bills. Rights asserted and the reliefs sought in the two cases are different.
ABUBAKAR A. AFDAL and FATIMA A. AFDAL vs. ROMEO CARLOS G.R. No. 173379. December 1, 2010. Facts: On 18 December 2003, respondent Romeo Carlos (respondent) filed a complaint for unlawful detainer and damages against petitioners, Zenaida Guijabar (Guijabar), et.al before the MTC Laguna. Respondent alleged that petitioners, Guijabar, and all other persons claiming rights under them were occupying, by mere tolerance, a parcel of land in respondent’s name. Respondent claimed that petitioner Abubakar Afdal (petitioner Abubakar) sold the property to him but that he allowed petitioners to stay in the property. On 25 August 2003, respondent demanded that petitioners, Guijabar, and all persons claiming rights under them turn over the property to him because he needed the property for his personal use.Respondent further alleged that petitioners refused to heed his demand and he was constrained to file a complaint before the Lupon ng Tagapamayapa(Lupon). According to respondent, petitioners ignored the notices and the Lupon issued a "certificate to file action." Then, respondent filed the complaint before the MTC.
Three attempts to serve the summons and complaint on petitioners but they failed to file an answer. Respondent filed an ex-parte motion and compliance with position paper submitting the case for decision based on the pleadings on record MTC ruled in favor of respondent and further issued a writ of execution. Petitioners filed a petition for relief from judgment with the MTC. Respondent filed a motion to dismiss or strike out the petition for relief. Subsequently, petitioners manifested their intention to withdraw the petition for relief after realizing that it was a prohibited pleading under the Revised Rule on Summary Procedure. The MTC granted petitioners’ r equest to withdraw the petition for relief. Petitioners filed the petition for relief before the RTC. They alleged that they are the lawful owners of the property which they purchased and denied that they sold the property to respondent. They also pointed out that they never received respondent’s demand letter nor were they informed of, much less participated in, the proceedings before the Lupon. Moreover, petitioners said they were not served a copy of the summons and the complaint. RTC DISMISSED the petition for relief. The court averred that it had no jurisdiction over the petition because the petition should have been filed before the MTC in accordance with Section 1 of Rule 38 of the
Rules of Court which provides that a petition for relief should be filed "in such court and in the same case praying that the judgment, order or proceeding be set aside." Petitioners filed a motion for reconsideration. RTC denied the motion. Hence, this petition. Issues: (1) Whether or not RTC erred in dismissing their petition for relief from judgment.
(2) WON there was a valid service of summons. Ruling: (1) RTC did not err in dismissing the petition for relief from judgment of the MTC. Petitioners cannot file the petition for relief with the MTC because it is a prohibited pleading in an unlawful detainer case. Petitioners cannot also file the petition for relief with the RTC because the RTC has no jurisdiction to entertain petitions for relief from judgments of the MTC. The remedy of petitioners in such a situation is to file a petition for certiorari with the RTC under Rule 65 of the Rules of Court on the ground of lack of jurisdiction of the MTC over the person of petitioners in view of the absence of summons to petitioners.
(2) There was no valid service of summons. In long line of cases, the SC held that the impossibility of personal service justifying availment of substituted service should be explained in the proof of service; why efforts exerted towards personal service failed. The pertinent facts and circumstances attendant to the service of summons must be stated in the proof of service otherwise, the substituted service cannot be upheld.According to the records of the MTC, there were 3 attempts to serve the summons to the defendants. The first was unserved, the second was served to one “Gary Akob” and the last, where the return was duly served but refused to sign.The indorsements in this case failed to state that prompt and personal service on petitioners was rendered impossible. It failed to show the reason why personal service could not be made. It was also not shown that efforts were made to find petitioners personally and that said efforts failed. These requirements are indispensable because substituted service is in derogation of the usual method of service. Failure to faithfully, strictly, and fully comply with the statutory requirements of substituted service renders such service ineffective. Likewise, nowhere in the return of summons or in the records of the case was it shown that Gary Acob, the person on whom substituted service of summons was effected, was a person of suitable age and discretion residing in petitioners’ residence. The process server failed to specify Gary Acob’s age, his relationship to petitioners and to ascertain whether he comprehends the significance of the receipt of the summons and his duty to deliver it to petitioners or at least notify them of said receipt of summons.Jurisdiction over the defendant is acquired either upon a valid service of summons or the defendant’s voluntary appearance in court. If the defendant does not voluntarily appear in court, jurisdiction can be acquired by personal or substituted service of summons as laid out under Sections 6 and 7 of Rule 14 of the Rules of Court, which state:Sec. 6. Service in person on defendant. Whenever practicable, the summons shall be served by handing a copy thereof to the defendant in person, or, if he refuses to receive and sign for it, by tendering it to him.
Sec. 7. Substituted Service. - If, for justifiable causes, the defendant cannot be served within a reasonable time as provided in the preceding section, service may be effected (a) by leaving copies of the summons at the defendant’s residence with some person of suitable age and discretion then residing therein, or (b) by leaving the copies at defendant’s office or regular place of business with some competent person in charge thereof. Any judgment of the court which has no jurisdiction over the person of the defendant is null and void.
FE V. RAPSING et. al v. HON. JUDGE MAXIMINO R. ABLES G.R. No. 171855. 15 October 2012. Facts: Respondents, members of the Alpha Company, 22nd Infantry Battalion, 9th Division of the Philippine Army based at Cabangcalan Detachment, Aroroy, Masbate, alleged to have received information about the presence of armed elements reputed to be New People’s Army partisans in Sitio Gaway-gaway, Barangay Lagta, Baleno, Masbate. Acting on the information, they coordinated with the PNP and proceeded to the place.
Thereat, they encountered armed elements which resulted in an intense firefight. When the battle ceased, seven persons, namely: Teogenes Rapsing, Teofilo Villanueva, Marianito Villanueva, Edwin Aparejado, Isidro Espino, Roque Tome and Norberto Aranilla were found sprawled on the ground lifeless. The post-incident report of the Philippine Army states that a legitimate military operation was conducted and in the course of which, the victims, armed with high-powered firearms, engaged in a shootout with the military. On the other hand, petitioners complained that there was no encounter that ensued and that the victims were summarily executed in cold blood by respondents. After investigation, the NBI recommended to the Provincial Prosecutor of Masbate City that a preliminary investigation be conducted against respondents for the crime of multiple murder. NBI relied on the statements of witnesses who claim that the military massacred helpless and unarmed civilians. Subsequently, the Provincial prosecutor recommended, through a Resolution, the filing of an Information for Multiple Murder. Consequently, respondents were charged with multiple murder. A warrant for the arrest then was issued by the RTC of Masbate City, Branch 47, but before respondents could be arrested, the Judge Advocate General's Office of the AFP filed an Omnibus Motion with the trial court seeking the cases against respondents be transferred to the jurisdiction of the military tribunal. Initially, the trial court denied the motion filed by the JAGO on the ground that respondents have not been arrested. A Motion for Reconsideration was then filed by the JAGO and the trial court granted the Omnibus Motion and the entire records of the case were turned over to the Commanding General of the 9th Infantry Division, Philippine Army, for appropriate action.
Petitioners sought reconsideration of the Order but was denied by the trial court. They alleged that the trial court gravely abused its discretion amounting to excess of jurisdiction when it transferred the criminal case filed against the respondents to the jurisdiction of the military tribunal, as jurisdiction over the same is conferred upon the civil courts by Republic Act No. 7055. On the other hand, the respondents and the Office of the Solicitor General alleged that the acts complained of are service connected and falls within the jurisdiction of the military court. Issue: Whether or not Hon. Judge Maximino Ables gravely abused his discretion amounting to excess of jurisdiction in granting the Motion to Transfer the instant criminal case to the jurisdiction of the Military Court, as said tribunal, based on facts and in law, has no jurisdiction over the murder case. Ruling: Yes. The trial court gravely abused its discretion in not taking cognizance of the case, which actually falls within its jurisdiction.
It is an elementary rule of procedural law that jurisdiction over the subject matter of the case is conferred by law and is determined by the allegations of the complaint irrespective of whether the plaintiff is entitled to recover upon all or some of the claims asserted therein. As a necessary consequence, the jurisdiction of the court cannot be made to depend upon the defenses set up in the answer or upon the motion to dismiss, for otherwise, the question of jurisdiction would almost entirely depend upon the defendant. What determines the jurisdiction of the court is the nature of the action pleaded as appearing from the allegations in the complaint. The averments in the complaint and the character of the relief sought are the matters to be consulted. In the case at bar, the information states that respondents, “conspiring together and mutually helping with one another, taking advantage of their superior strength, as elements of the Philippine Army, armed with their government-issued firearms with intent to kill, by means of treachery and evident premeditation, did then and there willfully, unlawfully and feloniously attack, assault and shoot the victims, hitting them on different parts of their bodies, thereby inflicting upon them multiple gunshot wounds which caused their deaths.”
Murder is a crime punishable under Article 248 of the RPC as amended, and is within the jurisdiction of the RTC. Hence, irrespective of whether the killing was actually justified or not, jurisdiction to try the crime charged against the respondents has been vested upon the RTC by law. In view of the provisions of R.A. 7055, the military tribunals cannot exercise jurisdiction over respondents' case since the offense for which they were charged is not included in the enumeration of “serviceconnected offenses or crimes” as provided for under Section 1 thereof. The said law is very clear that the jurisdiction to try members of the AFP who commit crimes or offenses covered by the RPC, and which are not service-connected, lies with the civil courts. Where the law is clear and unambiguous, it must be taken to mean exactly what it says and the court has no choice but to see to it that its mandate is obeyed. There is no room for interpretation, but only application. Hence, the RTC cannot divest itself of its jurisdiction over the alleged crime of multiple murder.
Mendoza v. Germino and Germino GR No. 165676. Novermber 22, 2010. Facts: Plaintiff was the owner of a 5-hectare land in Soledad, Sta. Rosa, Nueva Ecija. Herein respondent unlawfully entered the said property by means of strategy and stealth, without the knowledge and consent of petitioner, and said respondent refused to vacate the land despite demands.Thus, petitioner filed a complaint for forcible entry with the MTC of Sta. Rosa, Nueva Ecija.Respondent filed an answer claiming that his brother respondent Benigno was the plaintiff’s agricultural lessee and he merely helped the latter in the culti vation as a member of the immediate farm household.After some postponements, plaintiffs moved to remand the case to the Dept. of Agriculture Adjudication Board (DARAB), in view of the tenancy issue raised by respondent Narciso.
The MTC ordered the remand of the case to the DARAB, Cabanatuan City, without a hearing and despite objection by respondent Narciso.Plaintiff afterwards filed an amended complaint with the Provincial Agrarian Reform Adjudicator (PARAD) impleading respondent Benigno (brother). They alleged that a different person was the agricultural lessee of the land, contrary to respondent’s claim that it was his respondent Benigno.Plaintiff further alleged that respondent Benigno unlawfully entered the subject property through strategy and stealth and without their knowledge and consent, and thereafter transferred possession to respondent Narciso. In both cases, respondents refused to vacate despite demands, and also appropriated the fruits therein.The PARAD ruled in favor of plaintiff and that respondents are usurpers considering their failure to prove respondent Benigno as the agricultural lessee, thus, they should vacate the land and pay for damages.Respondents filed a notice of appeal to the DARAB arguing that the MTC’s referral to the DARAB was void.The DARAB affirmed the PARAD holding that it acquired jurisdiction because of the amended complaint that alleged an agrarian dispute.Thus, a petition for review under Rule 43 to the Court of Appeals (CA). The CA ruled that the MTC erred in referring the case to the DARAB since the material allegations and the relief sought were for forcible entry, and that the DARAB did not acquire jurisdiction.CA denied the motion for reconsideration. Issue: Whether or not the DARAB had jurisdiction over the case.
Ruling: No. Jurisdiction is conferred by law. Also, jurisdiction over the subject matter is determined by the allegations in the complaint. Under the law, the MTC has exclusive jurisdiction over ejectment suits which shall be governed by the Revised Rule on Summary Procedure.On the other hand, the DARAB has exclusive and primary jurisdiction to determine and adjudicate all agrarian disputes involving the implementation of the CARP and other similar laws.For a case to involve an agrarian dispute, there must be present the requisites of an agricultural tenancy relationship:
a) Parties are the landowner and the tenant b) Subject is agricultural land. c) There is consent. d) Purpose is agricultural production. e) There is personal cultivation. f) There is shar ing ing of harvest or payment of rental.’ In this case, both the allegations and reliefs prayed for was clearly an action for forcible entry.Also, respondent’s defense of tenancy did not automatically divest the court of its jurisdiction. Precisely, it had to conduct a preliminary conference in order to determine whether it was an ejectment suit or an agrarian dispute and whether it has jurisdiction or none. After all, jurisdiction is not affected by the pleas or theories set by defendant in an answer or motion to dismiss.The amended complaint also did not confer jurisdiction to the DARAB in the absence of any allegation of tenancy relationship between the parties. Remedios Antonino v. The Register of Deeds of Makati City, et al. G.R. No. 185663. June 20, 2012. Facts: Remedios Antonino was a lessee of Tian Tan Su in the latter’s residential property located in Makati City. The lease contract between the parties granted Antonino the right of first refusal should Su sell the property. Later, Su and Antonino had an Undertaking Agreement that Su would sell Antonino the subject property worth P39,500,000.00. However, there was a disagreement as to who between them will pay the capital gains tax, and the sale of the property did not proceed. Antonino then filed a complaint against Su for the reimbursement of the cost of repairs and payment of damages, in the RTC of Makati. Later on, Antonino amended the complaint to include the enforcement of the Undertaking Agreement. The RTC dismissed the complaint based on improper venue and the non-payment of docket fees.
The RTC ruled that the complaint was a personal action and the venue should thus be set based on the respective residence of the plaintiff and the defendant. Antonino, the plaintiff, resided in Muntinlupa City while Su, the defendant, resided in Manila City. Due to the dismissal of the complaint, Su filed an Omnibus Motion praying for the cancellation of the notice of lis pendens on the title of the subject property, and the issuance of a summary judgment. Antonino moved to reconsider, claiming that the action is a real action and that the place where the subject property is located should be the basis for the venue of the complaint. She also presented evidence from the COMELEC which stated that she is a resident of Makati City. Despite these attempts, the RTC denied the motion for reconsideration. Antonino filed another Motion for Reconsideration, claiming and insisting that she followed the rules on motions, despite the fact that Su was only given the notice and copy of the motion for hearing the day before. The RTC denied the Motions for Reconsideration from both parties. It did not cancel the notice of lis pendens and ruled that it did not acquire jurisdiction due to Antonino’s failure to pay pa y the docket fees. The RTC also affirmed its ruling that the action is a personal action and the complaint was properly dismissed due to improper venue. Antonino filed with the CA a petition for the annulment of judgment. The CA dismissed the petition. It held that Antonino failed to prove any exceptional circumstances warranting the remedy of annulment of judgment, and the fact that she failed to appeal within the period allowed. The CA, however, ruled on the merits and further affirmed the RTC’s findings that the action is indeed a personal action to enforce a contract, which further reinforced the dismissal of the complaint based on
improper venue. The CA also ruled that the petition for the annulment of judgment only embraced two circumstances: 1) extrinsic fraud, and 2) lack of jurisdiction. Grave abuse of discretion, according to the CA, did not necessarily include the lack of jurisdiction. A court that abuses its discretion may yet have jurisdiction over a case, while a court that does not have jurisdiction per se cannot abuse it. Antonino filed a motion for reconsideration but was denied by the CA, hence recourse to the SC via petition for review under Rule 45. Issue: Is Antonino’s reliance on the remedy of petition for annulment of judgment against a final and executory order of the RTC proper? Ruling: No, reliance on annulment of judgment is not proper in this case.
Annulment of judgment is an extraordinary remedy that is used when either two of the following circumstances exist: 1) Extrinsic Fraud, and 2) Lack of Jurisdiction. This remedy cannot be availed of if any of the two circumstances are not proven sufficiently. Annulment of judgment is a challenge to the validity of a court’s judgment, and is not to be used lightly. It is antithetical to the concept of finality of judgment. Likewise, annulment of judgment is not an alternative to appeal, as the grounds for appeal are different from the grounds for annulment of judgment. Annulment of judgment cannot be a substitute for a lost appeal. In this case, Antonino failed to appeal the case when she relied on the petition for the annulment of judgment. The RTC’s judgment was already final and executory when wh en the petition was filed. It was due to her own negligence that the period of appeal lapsed before she could timely file one in the CA. Similarly, a second Motion for Reconsideration is an improper remedy when a court denies the first Motion for Reconsideration. The purpose of a Motion for Reconsideration is to allow a court to correct itself before elevating the case on a appeal to a higher court. It cannot be filed twice as a substitute for an appeal. Lastly, grave abuse of discretion is not a ground to annul a final and executory judgment. The RTC was correct in dismissing the complaint based on improper venue as the action was a personal action. The Undertaking Agreement made by both parties being in question, the transfer of ownership of the subject property did not yet pass to Antonino. She failed to prove that there was already an actual or constructive delivery of the property. As the ownership of the property was not an issue, it could not ripen into a real action a ction that would allow the venue venu e Antonino chose for the dismissed action. As the complaint was dismissed for improper venue the other ground, that of the non-payment of docket fees, is redundant to resolve as the RTC decision has become final and executory.
DELFIN LAMSIS, MAYNARD MONDIGUING, JOSE VALDEZ, JR. and Heirs of AGUSTIN KITMA, represented by EUGENE KITMA, Petitioners , vs. MARGARITA SEMON DONG-E, Respondent . Facts: This case involves a conflict of ownership and possession over an untitled parcel of land located in Baguio City and is part of a larger parcel of land. Petitioners are the actual occupants of Lot No. 1, respondent is claiming ownership thereof and is seeking to recover its possession.
According to respondent, her family’s ownership and occupation of Lot No. 1 can be traced as far back as 1922 to her late grandfather, Ap-ap. Upon Ap-ap’s death, the property was inherited by his children, who obtained a survey plan in 1964, which included Lot No. 1.On the same year, they declared the property for taxation purposes in the name of "The Heirs of Ap-ap." which bears a notation that reads: "Reconstructed from an old Tax Declaration No. 363 dated May 10, 1922 per true of same presented."8The heirs of Ap-ap then executed, for a P500.00 consideration, a Deed of Quitclaim in favor of their brother Gilbert Semon (Respondent’s father)
Gilbert Semon together with his wife, allowed his in-laws Manolo Lamsis and Nancy Lamsis-Kitma, to stay on a portion of Lot No. 1 together with their respective families, they were allowed to introduce improvements. When Manolo Lamsis and Nancy Lamsis-Kitma died, their children, petitioners Delfin Lamsis (Delfin) and Agustin Kitma (Agustin), took possession of certain portions of Lot No. 1. Delfin possessed 4,000 square meters of Lot No. 1, while Agustin occupied 5,000 square meters thereof .12 Nevertheless, the heirs of Gilbert Semon tolerated the acts of their first cousins. When Gilbert Semon died, his children extrajudicially partitioned the property among themselves and allotted Lot No. 1 thereof in favor of respondent. Since then, Margarita allegedly paid the realty tax over Lot No. 1 and occupied and improved the property together with her husband; while at the same time, tolerating her first cousins’ occupation of portions of the same lot. This state of affairs changed when petitioners Delfin and Agustin allegedly began expanding their occupation on the subject property and selling portions thereof to petitioners Maynard Mondiguing (Maynard) and Jose Valdez (Jose).Respondent filed a complaint for recovery of ownership, possession, reconveyance and damages against petitioners of Lot No. 1 before the Regional Trial Court (RTC) of Baguio City.
The complaint prayed for the annulment of the sales to Maynard and Jose and for petitioners to vacate the portions of the property which exceed the areas allowed to them by respondent. Margarita claimed that, as they are her first cousins, she is willing to donate to Delfin and Agustin a portion of Lot No. 1, provided that she retains the power to choose such portion. Petitioners denied respondents’s claims of ownership and possession. According to Delfin and Agustin, Lot No. 1 is a public land claimed by the heirs of Joaquin Smith (not parties to the case), which gave their permission for Delfin and Agustin’s parents to occupy the land. They also presented their neighbors who testified that it was Delfin and Agustin as well as their respective parents who occupied Lot No. 1, not respondent and her parents. Delfin and Agustin also assailed the muniments of ownership presented by Respondent as fabricated, unauthenticated, and invalid. It was pointed out that the Deed of Quitclaim, allegedly executed by all of Ap-ap’s children, failed to include two – Rita Bocahan and Stewart Sito.
In order to debunk petitioners’ claim that the Smiths owned the subject property, respondent presented a certified copy of a Resolution from the Land Management Office denying the Smiths’ application for recognition of the subject property as part of their ancestral land, which explains that the application had to be denied because the Smiths did not "possess, occupy or utilize all or a portion of the property x x x. The actual occupants (who were not named in the resolution) whose improvements are visible are not in any way related to the applicant or his co-heirs." To bolster her claim of ownership and possession, respondent introduced as evidence an unnumbered resolution of the Community Special Task Force on Ancestral Lands (CSTFAL) of the Department of Environment and Natural Resources (DENR), acting favorably on her and her siblings’ ancestral land claim. The resolution was not signed by two members of the CSTFAL on the ground that the signing of the unnumbered resolution was overtaken by the enactment of the Republic Act (RA) No. 8371 or the Indigenous People’s Rights Act of 1997 (IPRA). The IPRA removed the authority of the DENR to issue ancestral land claim certificates and transferred the same to the National Commission on Indigenous Peoples (NCIP).The Ancestral Land Application No. Bg-L-064 of the Heirs of Gilbert Semon was transferred to the NCIP, Cordillera Administrative Region, La Trinidad, Benguet and re-docketed as Case No. 05-RHO-CAR-03.The petitioners filed their protest in the said case before the NCIP. The same has been submitted for resolution. The Regional Trial Court ruled in favor of the respondent. It appears that no motion for reconsideration was filed before the trial court. Nevetheless, the trial court issued an Order allowing the petitioners’ Notice of Appeal. The petitioners appealed to the Court of Appeals, which affirmed the RTC. The sole issue resolved by the appellate court was whether the trial court erred in ruling in favor of respondent in light of the adduced evidence. Citing the rule on preponderance of evidence, the CA held that the respondent was able to discharge her burden in proving her title and interest to the subject property. Her documentary evidence were amply supported by the testimonial evidence of her witnesses. In contrast, petitioners only made bare allegations in their testimonies that are insufficient to overcome respondent’s documentary evidence. Petitioners moved for a reconsideration of the adverse decision but the same was denied. Hence this petition. Issues: (1) Whether the appellate court disregarded material facts and circumstances in affirming the trial court’s decision;
(2) If the trial court retains jurisdiction, whether the ancestral land claim pending before the NCIP should take precedence over the reivindicatory action. (3) Whether the trial court has jurisdiction to decide the case in light of the effectivity of RA 8371 or the Indigenous People’s Rights Act of 1997 at the time that the complaint was instituted;
Ruling: (1) Both the trial and the appellate courts ruled that respondent has proven her claims of ownership and possession with a preponderance of evidence. Petitioners argue that the two courts erred in their appreciation of the evidence. They ask the Court to review the evidence of both parties, despite the CA’s finding that the trial court committed no error in appreciating the evidence presented.
Hence, petitioners seek a review of questions of fact, which is beyond the province of a Rule 45 petition. Since it raises essentially questions of fact, this assignment of error must be dismissed for it is settled that only questions of law may be reviewed in an appeal by certiorari. (2) The application for issuance of a Certificate of Ancestral Land Title pending before the NCIP is akin to a registration proceeding. It also seeks an official recognition of one’s claim to a particular land and is also in rem. The titling of ancestral lands is for the purpose of "officially establishing" one’s land as an ancestral land. Just like a registration proceeding, the titling of ancestral lands does not vest ownership upon the applicant but only recognizes ownership that has already vested in the applicant by virtue of his and his predecessor-ininterest’s possession of the property since time immemorial. A registration proceeding is not a conclusive adjudication of ownership. In fact, if it is later on found in another case (where the issue of ownership is squarely adjudicated) that the registrant is not the owner of the property, the real owner can file a reconveyance case and have the title transferred to his name. Given that a registration proceeding (such as the certification of ancestral lands) is not a conclusive adjudication of ownership, it will not constitute litis pendentia on a reivindicatory case wh ere the issue is ownership. Since there is no litis pendentia, we cannot agree with petitioners’ contention that respondent committed forum-shopping. Settled is the rule that "forum shopping exists where the elements of litis pendentiaare present or where a final judgment in one case will amount to res judicata in the other."
(3) For the first time in the entire proceedings of this case, petitioners raise the trial court’s alleged lack of jurisdiction over the subject-matter in light of the effectivity of the IPRA at the time that the complaint was filed in 1998. They maintain that, under the IPRA, it is the NCIP which has jurisdiction over land disputes involving indigenous cultural communities and indigenous peoples. As a rule, an objection over subject-matter jurisdiction may be raised at any time of the proceedings. This is because jurisdiction cannot be waived by the parties or vested by the agreement of the parties. Jurisdiction is vested by law, which prevails at the time of the filing of the complaint. An exception to this rule has been carved by jurisprudence. In the seminal case of Tijam v. Sibonghanoy, the Court ruled that the existence of laches will prevent a party from raising the court’s lack of jurisdiction. Laches is defined as the "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 the presumption that the party entitled to assert it either has abandoned or declined to assert it."Wisely, some caseshave cautioned against applying Tijam, except for the most exceptional cases where the factual milieu is similar to Tijam. In Tijam, the surety could have raised the issue of lack of jurisdiction in the trial court but failed to do so. Instead, the surety participated in the proceedings and filed pleadings, other than a motion to dismiss for lack of jurisdiction. When the case reached the appellate court, the surety again participated in the case and filed their pleadings therein. It was only after receiving the appellate court’s adverse decision that the surety awoke from its slumber and filed a motion to dismiss, in lieu of a motion for reconsideration. The CA certified the matter to this Court, which then ruled that the surety was already barred by laches from raising the jurisdiction issue. In case at bar, the application of the Tijam doctrine is called for because the presence of laches cannot be ignored. If the surety in Tijam was barred by laches for raising the issue of jurisdiction for the first time in the
CA, what more for petitioners in the instant case who raised the issue for the first time in their petition before this Court. At the time that the complaint was first filed in 1998, the IPRA was already in effect but the petitioners never raised the same as a ground for dismissal; instead they filed a motion to dismiss on the ground that the value of the property did not meet the jurisdictional value for the RTC. They obviously neglected to take the IPRA into consideration. When the amended complaint was filed in 1998, the petitioners no longer raised the issue of the trial court’s lack of jurisdiction. Instead, they proceeded to trial, all the time aware of the existence of the IPRA as evidenced by the cross-examination conducted by petitioners’ lawyer on the CSTFAL Chairman Guillermo Fianza. In the cross-examination, it was revealed that the petitioners were aware that the DENR, through the CSTFAL, had lost its jurisdiction over ancestral land claims by virtue of the enactment of the IPRA. They assailed the validity of the CSTFAL resolution favoring respondent on the ground that the CSTFAL had been rendered functus officio under the IPRA. Inexplicably, petitioners still did not question the trial court’s jurisdiction.1avvphi1 When petitioners recoursed to the appellate court, they only raised as errors the trial court’s appreciation of the evidence and the conclusions that it derived therefrom. In their brief, they once again assailed the CSTFAL’s resolution as having been rendered functus officio by the enactment of IPRA. But nowhere did petitioners assail the trial court’s ruling for having been rendered without jurisdiction.
It is only before this Court, eight years after the filing of the complaint, after the trial court had already conducted a full-blown trial and rendered a decision on the merits, after the appellate court had made a thorough review of the records, and after petitioners have twice encountered adverse decisions from the trial and the appellate courts — that petitioners now want to expunge all the efforts that have gone into the litigation and resolution of their case and start all over again. This practice cannot be allowed. Thus, even assuming arguendo that petitioners’ theory about the effect of IPRA is correct (a matter which need not be decided here), they are already barred by laches from raising their jurisdictional objection under the circumstances.
Corazon Jalbuena De Leon vs. Court Of Appeals and Uldarico Inayan G.R. No. 96107. June 19, 1995. Facts: Jesus Jalbuena entered into a verbal lease contract with Uldarico Inayan, for one year renewable for the same period. Inayan was allowed to continue with the lease from year to year. Corazon Jalbuena de Leon is the daughter of Jesus and the transferee of the subject property. Inayan ceased paying the agreed rental and instead, asserted dominion over the land. When asked by De Leon to vacate the land, he refused to do so, prompting De Leon to file a complaint before the RTC for "Termination of Civil Law Lease; Recovery of Possession, Recovery of Unpaid Rentals and Damages. Inayan claimed tenancy dispute thus the lower court issued an order adopting the procedure in agrarian cases but still rendered decision Declaring the lease contract between plaintiff and defendant as a civil law lease, and that the same has already been terminated due to defendant's failure to pay his rentals from 1983 up to the present.
On appeal to the CA, Inayan raised the sole issue of jurisdiction and alleged that the lower court, acting as Court of Agrarian Relations, had no jurisdiction over the action. The CA, at first affirmed the trial court's decision, but when an MR filed by Inayan it then set aside its earlier decision and dismissed the civil case for want of jurisdiction. In its amended decision, the appellate court held that petitioner's complaint below was anchored on acción interdictal , a summary action for recovery of physical possession that should have been brought before the proper inferior court. Issue: Whether or not the RTC, then acting as a court of agrarian relations employing agrarian procedure, had jurisdiction to try the suit filed by De Leon? Ruling: Yes. Jurisdiction of the court over the subject matter is conferred only by the Constitution or by law. It is determinable on the basis of allegations in the complaint. In order to determine whether the court below had jurisdiction, it is necessary to first ascertain the nature of the complaint filed before it. A study of the complaint instituted by petitioner in the lower court reveals that the case is, contrary to the findings of the respondent appellate court, not one of unlawful detainer. Not being merely a case of ejectment, the regional trial court possessed jurisdiction to try and resolve the case.
SERAFIN TIJAM, ET AL., Plaintiffs-Appellees , -versus- MAGDALENO SIBONGHANOY ALIAS GAVINO SIBONGHANOY, ET AL., Defendants , MANILA SURETY AND FIDELITY CO., INC. (CEBU BRANCH) bondin g Company and defendant-appell ant . GR No. L-21450. April 15, 1968. Facts: On July 19, 1948, the spouses Serafin Tijam and Felicitas Tagalog filed a civil case in the Court of First Instance of Cebu (CFI) against the spouses Magdaleno Sibonghanoy and Lucia Baguio to recover from them the sum of P1,908.00, with legal interest.
As prayed for in the complaint, a writ of attachment was issued by the court against the Sibonghanoys’ properties, but was soon dissolved after the filing of a counter-bond by the latter and the Manila Surety and Fidelity Co., Inc. Trial Court’s Ruling – Favored the plaintiffs. The plaintiffs moved for the issuance of a writ of execution against the Surety’s bond after the wr it of execution against the defendants was returned unsatisfied. The Surety filed a written opposition against such writ upon two grounds, namely, (1) Failure to prosecute and (2) Absence of a demand upon the Surety for the payment of the amount due under the judgment. The Surety prayed the Court not only to deny the motion for execution against its counter- bond but also the following affirmative relief: “to relieve the herein bonding company of its liability, if any, under the bond in question”. Such motion was denied as there was no previous demand made on the Surety for the satisfaction of the judgment.
Thereafter the necessary demand was made, and upon failure of the Surety to satisfy the judgment, the plaintiffs filed a second motion for execution against the counter-bond. On the date set for the hearing thereon, the Court, upon motion of the Surety’s counsel, granted the latter a period of five days within which to answer the motion. Upon its failure to file such answer, the Court granted the motion for execution and the corresponding writ was issued. Subsequently, the Surety moved to quash the writ on the ground it was issued without the required summary hearing provided for in Section 17 of Rule 59 of the Rules of Court. The Surety, then, appealed to the Court of Appeals. Court of Appeal’s Ruling – Affirmed the orders appealed from (December 11, 1962)
On January 10, 1963, two days after the Court granted it’s motion asking for extension of time to file a motion for reconsideration, Surety filed a motion to dismiss, alleging that since the case was filed on July 19, 1948, a month after the effectivity of the Judiciary Act of 1948, Section 88 of which placed within the original exclusive jurisdiction of inferior courts all civil actions where the value of the subject-matter or the amount of the demand does not exceed P2,000.00, exclusive of interest and costs, the CFI therefore had no jurisdiction to try and decide the case.
On May 20, 1963, Court of Appeals resolved to set aside its decision and to certify the case to the Supreme Court. Issue: Whether or not the Surety is estopped from questioning the jurisdiction of the CFI of Cebu for the first time upon appeal. Ruling: Yes. The Supreme Court believes that the Surety is now barred by laches from invoking such plea, almost fifteen years from the commencement of the action on July 19, 1948, before filing its motion to dismiss on January 12, 1963, raising the question of lack of jurisdiction for the first time.
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 estoppel by deed or by record, and of estoppel by laches. Laches, in a 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. It has been held that a party cannot invoke the jurisdiction of a court to secure affirmative relief against his opponent and, after obtaining or failing to obtain such relief, repudiate or question that same jurisdiction.
The question of whether the court had jurisdiction either of the subject matter of the action or of the parties was not important in such cases because the party is barred from such conduct, not b ecause the judgment or order of the court is valid and conclusive as an adjudication, but for the reason that such a practice cannot be tolerated — obviously for reasons of public policy. Furthermore, it has also been held that after voluntarily submitting a cause and encountering an adverse decision on the merits, it is too late for the loser to question the jurisdiction or power of the court. And in Littleton vs. Burgess, 16 Wyo. 58, the Court said that it is not right for a party who has affirmed and invoked the jurisdiction of a court in a particular matter to secure an affirmative relief, to afterwards deny that same jurisdiction to escape a penalty. The facts of this case show that from the time the Surety became a quasi-party on July 31, 1948, it could have raised the question of the lack of jurisdiction of the Court of First Instance of Cebu to take cognizance of the present action by reason of the sum of money involved which, according to the law then in force, was within the original exclusive jurisdiction of inferior courts. It failed to do so. Instead, at several stages of the proceedings in the court a quo as well as in the Court of Appeals, it invoked the jurisdiction of said courts to obtain affirmative relief and submitted its case for a final adjudication on the merits. It was only after an adverse decision was rendered by the Court of Appeals that it finally woke up to raise the question of jurisdiction. Were We to sanction such conduct on its part, We would in effect be declaring as useless all the proceedings had in
the present case since it was commenced on July 19, 1948 and compel the judgment creditors to go up their Calvary once more. The inequity and unfairness of this is not only patent but revolting.
FIRST CORPORATION, Petitioner , v. FORMER SIXTH DIVISION OF THE COURT OF APPEALS, BRANCH 218 OF THE REGIONAL TRIAL COURT OF QUEZON CITY,** EDUARDO M. SACRIS, and CESAR A. ABILLAR, Respondents . Facts: The case at bar is a Special Civil Action under Rule 65 of the Revised Rules of Civil Procedure seeking to annul, on the ground of grave abuse of discretion amounting to lack or excess of jurisdiction, the decision of the RTC Quezon City, as affirmed by the CA. The petitioner (First Corporation) is a corporation duly organized and existing under the PH laws and engaged primarily in trade. The private respondent (Sacris) is the alleged creditor of the petitioner, while another private respondent (Abillar) had served as the President and Chairman of the Board of the petitioner corporation from 1993 until February 1998.
In 1991, the corporate officers of the petitioner namely: Vicente C. Esmeralda, Edgardo C. Cerbo, Nicolas E. Esposado, Rafael P. La Rosa and Abillar, convinced Sacris to invest in their business as the petitioner needed a fresh equity infusion, particularly in its Rema Tip Top Division, to make viable its continuous operation. The petitioner made a promise of turning such equity into shareholding in the petitioner. While the conversion of such investment into shareholding was still pending, Sacris and the petitioner agreed to consider the same as a loan which shall earn an interest of 1%/month. Accordingly, from the year 1991 up to 1994, private respondent Sacris had already extended a P1.2 million loan to the Rema Tip Top Division of the petitioner. In 1997, Sacris extended another P1 million loan to the petitioner. Thus, from 1991 up to 1997, the total loan extended by Sacris to the petitioner reached a total amount of P2.2 million. All loans were given by Sacris to herein Abillar, as the latter was then the President and Chairman of the Board of Directors of the petitioner. The receipts for the said loans were issued by the petitioner in the name of Abillar. Petitioner failed to convert Sacris's investment/loan into equity or shareholding in the petitioner. In its place, petitioner agreed to pay a monthly interest of 2.5% on the amount of the loan extended to it by Sacris. Petitioner likewise made partial payments of P400,000.00 on the principal obligation and interest payment in the amounts of P33,750.27 and P23,250.00, thus, leaving an outstanding balance of P1.8 million. In the meantime, a Stockholders’ Meeting of the petitioner was held to elect the members of the Board and to elect new set of officers. Abillar was no long re-elected because they had lost their confidence for he had been involved in various anomalies and irregularities during his tenure. Thus, Abillar was ousted.
In 1998, Sacris excuted a Deed of Assignment in favor Abillar, assigning and transferring to Abillar his remaining collectibles due from the petitioner in the amount of P1.8 million. As a consideration, Abillar shal pay Sacris the said outstanding balance due from the petitioner on or before July 30, 1998. Later on, Abillar, by
the virtue of the said deed, filed a complaint for Sum of Monet with Prayer for a Writ of Preliminary Attachment and Damages before the RTC of Pasig against the petitioner. While the said case was still pending, Sacris and Abarilla agreed to rescind the said deed for failure of Abillar fo comply with his undertaking to pay Sacris. Thus, Sacris and Abillar executed a Deed of Rescission of the said deed. Consequently, Sacris made a demand upon the petitioner to pay the outstanding obligation but the latter refused to do so. Before the pre-trial, Sacris filed a Motion for Intervention attaching his Complain-in-Intervention. The RTC Pasig denied the said Motion for Intervention but, however, the trial court admitted the complain in intervention filed by Sacris and dismissed the complaint originally filed by Abillar against the petitioner. The admission of the said complaint prompted the petitioner to file a Petition for Certiorari and Prohibition before the CA. The CA granted the petition filed by the petitioner and issued a writ of certiorari in which the order of the RTC Pasig were set aside. Thus, the CA directed Judge Hernandez to dismiss the complaint with prejudice and to deny the Motion in Intervention without prejudice. Based on the decision of the CA, Sacris filed a complaint for Sum of Money with Damages before the RTC-QC against the petitioner to recover the alleged collectible sum due from the petitioner. The petitioner denied the material allegations stated in the complaint in which it denied having liability to Sacris as it had no knowledge of or consent to the purported transactions or dealings that Sacris may have had with Abillar. Subsequently, petitioner filed a Third-Party Complaint against Abillar alleging that the investment/loan transactions of Sacris, the basis of his cause of action against the petitioner, were all entered into by Abillar without the knowledge, consent, authority and/or approval of the petitioner or of the latter's Board of Directors. The aforesaid transactions were not even ratified by the petitioner or by its Board of Directors. Abillar filed his Answer to the said Third-Party Complaint raising therein the same allegations found in the Complaint filed by Sacris. Pre-trial ensued followed by the trial on the merits. RTC OF QUEZON CITY - It rendered a decision in favor of Sacris and Abillar (private respondents) ordering the petitioner to pay the said balance plus an interest of 24%/annum; pay Abillar P20,000.00 and Sacris P50,000.00; attorney’s fees and cost of suit. COURT OF APPEALS - The petitioner appealed the decision of the RTC QC in which the CA rendered a decision dismissing the appeal filed because it did find any reversible error in the decision of the said RTC. A motion for reconsideration was filed but was also denied by the CA because the CA had already passed upon the issues raised. Issue: WON the remedy of certiorari provoded for under the Rule 65 was properly applied in the case. Ruling: No. The petitioner evidently availed itself of the wrong mode of appeal. It is a well-entrenched rule that this Court is not a trier of facts. This Court will not pass upon the findings of fact of the trial court, especially if they have been affirmed on appeal by the CA. Unless the case falls under the recognized exceptions, the rule should not be disturbed.
In the case at bar, the findings of the RTC QC as well as the CA are properly supported by evidence on record. Both courts found that the alleged loans extended to the petitioner by Sacris were reflected in the petitioner ‘s financial statements, particularly in the years 1992-1993, were contrary to the claim of petitioner. The said financial statements of the petitioner were not the sole bases used by the RTC QC and by the CA in its findings of liability against the petitioner. The RTC QC also took into consideration the pieces of documentary evidence which likewise became the grounds for its findings that indeed, Sacris had extended a loan to petitioner, and that the same was given to Abillar, and received by the petitioner. Those pieces of documentary evidence very well supported the claim of Sacris that the petitioner received money from him through its former President, Abillar. Thus, petitioner cannot claim that it never consented to the act of Abillar of entering into a loan/investment transaction with Sacris, for there are documents that would prove that the money was received by the petitioner, and the latter acknowledged receipt of said money. The same pieces of evidence likewise
confirm the findings of the RTC QC that the petitioner benefited from the said transaction; therefore, it should be held liable for the same amount of its unpaid obligation to Sacris. As the findings of the RTC QC and the CA are supported by evidence, this Court finds no reason to deviate from the heretofore cited rule. It is a fundamental aphorism in law that a review of facts and evidence is not the province of the extraordinary remedy of certiorari, which is extra ordinem - beyond the ambit of appeal. In certiorari proceedings, judicial review does not go as far as to examine and assess the evidence o f the parties and to weigh the probative value thereof. It does not include an inquiry as to the correctness of the evaluation of evidence.Any error committed in the evaluation of evidence is merely an error of judgment that cannot be remedied by certiorari. An error of judgment is one which the court may commit in the exercise of its jurisdiction. An error of jurisdiction is one where the act complained of was issued by the court without or in excess of jurisdiction, or with grave abuse of discretion, which is tantamount to lack or in excess of jurisdiction and which error is correctible only by the extraordinary writ of certiorari. Certiorari will not be issued to cure errors of the trial court in its appreciation of the evidence of the parties, or its conclusions anchored on the said findings and its conclusions of law. It is not for this Court to re-examine conflicting evidence, re-evaluate the credibility of the witnesses or substitute the findings of fact of the court a quo.Since the issues raised by the petitioner in its Petition for Certiorari are mainly factual, as it would necessitate an examination and reevaluation of the evidence on which the RTC QC and the CA based their decisions, the petition should not be given due course. Thus, the remedy of certiorari will not lie to annul or reverse the Decision of the RTC QC, as affirmed by the CA in its decision and resolution. Settled is the rule that the proper remedy from an adverse decision of the CA is an appeal under Rule 45 and not a Petition for Certiorari under Rule 65. Hence, petitioner could have raised the CA, affirming the assailed decision of the RTC QC to this Court via an ordinary appeal under Rule 45 of the 1997 Revised Rules of Civil Procedure. It should be emphasized that the extraordinary remedy of certiorari will not lie when there are other remedies available to the petitioner. Therefore, in availing itself of the extraordinary remedy of certiorari, the petitioner corporation resorted to a wrong mode of appeal.Finally, even if this case will be treated as having been filed under Rule 45, still it will be dismissed for utter lack of merit because this case does not fall under the recognized exceptions wherein this Court is authorized to resolve factual issues.
CHESTER DE JOYA v. JUDGE PLACIDO C. MARQUEZ. G.R. No. 162416. January 31, 2006. Facts: Through petition of certiorari and prohibition, petitioner De Joya seeks to nullify and set aside the warrant of arrest issued by respondent judge against petitioner in Criminal Case No. 03-219952 for violation of Article 315, par. 2(a) of the Revised Penal Code in relation to Presidential Decree (P.D.) No. 1689. Petitioner asserts that respondent judge erred in finding the existence of probable cause that justifies the issuance of a warrant of arrest against him and his co-accused.
Sup reme Court can review the factual findings of the trial court Issues: (1) Whether or not the Supreme (2) Whether or not the petitioner is entitled to seek relief without being submitted to the jurisdiction of the court Ruling: (1) Yes. The general rule is that the Supreme Court does not review the factual findings of the trial court, which include the determination of probable cause for the issuance of warrant of arrest. It is only in exceptional cases where the Court sets aside the conclusions of the prosecutor and the trial judge on the existence of probable cause, that is, when it is necessary to prevent the misuse of the strong arm of the law or to protect the orderly administration of justice. The facts obtaining in this case do not warrant the application of the exception.
(2) No. Petitioner is not entitled to seek relief from Supreme Court nor from the trial court as he continuously refuses to surrender and submit to the court's cou rt's jurisdiction. Justice Florenz D. Regalado explains the requisites for the exercise of jurisdiction and how the court acquires such jurisdiction, thus: x x x Requisites for the exercise of jurisdiction and how the court acquires such jurisdiction: b. Jurisdiction over the defendant or respondent: This is acquired by the voluntary appearance or submission by the defendant or respondent to the court or by coercive process issued by the court to him, generally by the service of summons. There is no exceptional reason in this case to allow petitioner to obtain relief from the courts without submitting to its jurisdiction. On the contrary, his continued refusal to submit to the court's jurisdiction should give this Court more reason to uphold the action of the respondent judge. The purpose of a warrant of arrest is to place the accused under the custody of the law to hold him for trial of the charges against him. His evasive stance shows an intent to circumvent and frustrate the object of this legal process. It should be remembered that he who invokes the court's jurisdiction must first submit to its jurisdiction.
A.L. ANG NETWORK, INC. V. EMMA MONDEJAR, ET AL. Facts: Petitioner filed a complaint for sum of money under the Rule of Procedure for Small Claims Cases before the MTCC, seeking to collect from respondent which represented her unpaid water bills. Petitioner claimed that it was duly authorized to supply water to and collect payment therefor from the homeowners of Regent Pearl Subdivision. In defense, respondent contended that since April 1998 up to February 2003, she religiously paid petitioner the agreed monthly flat rate of P75.00 for her water consumption. Notwithstanding their agreement that the same would be adjusted only upon prior notice to the homeowners, petitioner unilaterally charged her unreasonable and excessive adjustments
MTCC: Respondent should be considered to have fully paid petitioner. Aggrieved, petitioner filed a petition for certiorari under Rule 65 of o f the Rules of Court before the RTC, R TC, ascribing grave abuse of discretion on the part of the MTCC. RTC: dismissing the petition for certiorari, finding that the said petition was only filed to circumvent the non-appealable nature of small claims cases. Issue: Whether or not the RTC erred in dismissing petitioner’s recourse under Rule 65 of the Rules of Court assailing the propriety of the MTCC Decision in the subject small claims case. Ruling: Section 23 of the Rule of Procedure for Small Claims Cases states that: After the hearing, the court shall render its decision on the same day, based on the facts established by the evidence (Form 13-SCC). The decision shall immediately be entered by the Clerk of Court in the court docket for civil cases and a copy thereof forthwith served on the parties. The decision shall be final and unappealable.
Considering the final nature of a small claims case decision under the above-stated rule, the remedy of appeal is not allowed, and the prevailing party may, thus, immediately move for its execution. Nevertheless, the proscription on appeals in small claims cases, similar to other proceedings where appeal is not an available remedy, does not preclude the aggrieved party from filing a petition for certiorari under Rule 65 of the Rules of Court.However, in a long line of cases, the Court has consistently ruled that "the extraordinary writ of certiorari is always available where there is no appeal or any other plain, speedy and adequate remedy in the ordinary course of law."
FIORELLO R. JOSE, vs. ROBERTO ALFUERTO, Et.al. G.R. No. 169380. November 26, 2012. Facts: The dispute involves a parcel of land registered in the name of Rodolfo Chua Sing under Transfer Certificate of Title No. 52594, with an area of 1919 square meters, located in Barangay San Dionisio, Parañaque City. Chua Sing purchased the land in 1991. On April 1, 1999, Chua Sing leased the property to the petitioner. Their contract of lease was neither notarized nor registered with the Parañaque City Registry of Deeds. Significantly, the respondents already occupied the property even before the lease contract was executed. On April 28, 1999, soon after Chua Sing and the petitioner signed the lease contract, the petitioner demanded in writing that the respondents vacate the property within 30 days and that they pay a monthly rental of P1,000.00 until they fully vacate the property. The respondents refused to vacate and to pay rent. On October 20, 1999, the petitioner filed an ejectment case against the respondents before Branch 77 of the Parañaque City MeTC, docketed as Civil Case No. 11344. In this complaint, no mention was made of any proceedings before the barangay. Jose then brought the dispute before the barangay for conciliation.
The barangay issued a Certification to File Action on March 1, 2000. Jose was then able to file an amended complaint, incorporating the proceedings before the barangay before the summons and copies of the complaint were served upon the named defendants. In the Amended Complaint dated March 17, 2000, the petitioner claimed that as lessee of the subject property, he had the right to eject the respondents who unlawfully occupy the land. The petitioner also stated that despite his written demand, the respondents failed to vacate the property without legal justification. He prayed p rayed that th at the court order o rder the respondents; (1) to vacate va cate t he premises; (2) to pay him not less than P41,000.00 a month from May 30,1999 until they vacate the premises; and (3) to pay him attorney’s fees of no less than P50,000.00, and the costs of suit. In their Answer, the respondents likewise pointed out that they have been in possession of the land long before Chua Sing acquired the property in 1991, and that the lease contract between the petitioner and Chua Sing does not affect their right to possess the land. The respondents also presented a Deed of Assignment, dated February 13, 2000, issued by David R. Dulfo in their favor. They argued that the MeTC had no jurisdiction over the case as the issue deals with ownership of the land, and sought the dismissal of the complaint for lack of cause of action and for lack of jurisdiction. They also filed a counterclaim for actual and moral damages for the filing of a baseless and malicious suit. After the required position papers, affidavits and other pieces of evidence were submitted, the MeTC resolved the case in the petitioner’s favor. In its decision of January 27, 2003, the MeTC held that the respondents had no right to possess the land and that their occupation was merely by the owner’s tolerance. It further noted that the respondents could no longer raise the is sue of ownership, as this issue had already been settled: the respondents previously filed a case for the annulment/cancellation of Chua Sing’s title before the RTC, Branch 260, of Parañaque City, which ruled that the registered owner’s title was
genuine and valid. Moreover, the MeTC held that it is not divested of jurisdiction over the case because of the respondents’ assertion of ownership of the property. On these premises, the MeTC ordered the respondents to vacate the premises and to remove all structures introduced on the land; to each pay P500.00 per month from the date of filing of this case until they vacate the premises; and to pay Jose, jointly and severally, the costs of suit and P20,000.00 as attorney’s fees. On appeal before the RTC, the respondents raised the issue, among others, that no legal basis exists for the petitioner’s claim that their occupation was by tolerance, "where the possession of the defendants was illegal at the inception as alleged in the complaint, there can be no tolerance." The RTC affirmed the MeTC decision of January 27, 2003. It issued its decision on October 8, 2003, reiterating the MeTC’s ruling that a case for ejectment was proper. The petitioner, as lessee, had the right to file the ejectment complaint; the respondents occupied the land by mere tolerance and their possession became unlawful upon the petitioner’s demand to vacate on April 28, 1999. The RTC, moreover, noted that the complaint for ejectment was filed on October 20, 1999, or within one year after the unlawful deprivation took place. It cited Pangilinan, et al. v. Hon. Aguilar, etc., et al.18 and Yu v. Lara, et al. to support its ruling that a case for unlawful detainer was appropriate. On March 14, 2005, the Court of Appeals reversed the RTC and MeTC decisions. It ruled that the respondents’ possession of the land was not by the petitioner or his lessor’s tolerance. It defined tolerance not merely as the silence or inaction of a lawful possessor when another occupies his land; tolerance entailed permission from the owner by reason of familiarity or neighborliness. The petitioner, however, alleged that the respondents unlawfully entered the property; thus, tolerance (or authorized entry into the property) was not alleged and there could be no case for unlawful detainer. The respondents’ allegation that they had been in possession of the land before the petitioner’s lessor had acquired it in 1991 supports this finding. Having been in possession of the land for more than a year, the respondents should not be evicted through an ejectment case. The Court of Appeals emphasized that ejectment cases are summary proceedings where the only issue to be resolved is who has a better right to the physical possession of a property. The petitioner’s claim, on the other hand, is based on an accion publiciana: he asserts his right as a possessor by virtue of a contract of lease he contracted after the respondents had occupied the land Issue: Whether or not an action for unlawful detainer is the proper remedy? Ruling: No. it is not the proper remedy. Unlawful detainer is a summary action for the recovery of possession of real property. This action may be filed by a lessor, vendor, vendee, or other person against whom the possession of any land or building is unlawfully withheld after the expiration or termination of the right to hold possession by virtue of any contract, express or implied. In unlawful detainer, the possession of the defendant was originally legal, as his possession was permitted by the plaintiff on account of an express or implied contract between them. However, the defendant’s possession became illegal when the plaintiff demanded that the defendant vacate the subject property due to the expiration or termination of the right to possess under the contract, and the defendant refused to heed such demand. A case for unlawful detainer must be instituted one year from the unlawful withholding of possession.The allegations in the complaint determine both the nature of the action and the jurisdiction of the court. The complaint must specifically allege the facts constituting unlawful detainer. In the absence of these allegations of facts, an action for unlawful detainer is not the proper remedy and the municipal trial court or the MeTC does not have jurisdiction over the case.
NAPOLEON GEGARE vs. HON. COURT OF APPEALS (ELEVENTH DIVISION) AND ARMIE ELMA G.R. No. 83907. September 13, 1989. Facts: The case involves a land wherein the parties obtained equal shares by virtue of a Board Resolution, while respondent does not contest any objections with regard to her share, the petitioner herein wants the entire property.
The land in controversy was located in Dadiangas General Santos City and under the name of Paulino Elma the father of the respondent herein. A reversion case was filed by the Republic of the Philippines against Paulino Elma in the Court of First Instance of South Cotabato, wherein in due course a decision was rendered on January 29, 1973 declaring the title of Paulino Elma null and void and the same was ordered cancelled. The lot was reverted to the mass of public domain subject to disposition and giving preferential right to its actual occupant, Napoleon Gegare. Both petitioner and private respondent filed an application for this lot in the Board of Liquidators. The Board of Liquidators ruled in favor of the petitioner on the ground that the said land was acquired by him by way of negotiated sale. A motion for reconsideration filed by private respondent was favorably considered by the Board in Resolution. Thus, the Board directed the chief of LASEDECO to investigate the occupancy and area of the lot. In this investigation, it was found that only private respondent was the actual occupant so the LASEDECO chief recommended the division of the property between petitioner and private respondent. The Board Resolution on approving said recommendation by dividing the lot equally between the parties at 135.5 square meters each to be disposed to them by negotiated sale. Petitioner filed an action for "Annulment and Cancellation of Partition of Lot to Declare them Null and Void" against private respondent and the Board. Private respondent filed a motion to dismiss the complaint on the following grounds: (1) lack of jurisdiction over the subject matter; (2) petitioner has no capacity to sue; (3) petitioner is not a real party-in-interest; and (4) the action is barred by prior judgment. Private respondent added another ground (5) lack of conciliation efforts pursuant to Section 6 of Presidential Decree No. 1508. Petitioner moved for a reconsideration thereof to which an opposition was filed by private respondent. The motion for reconsideration was granted and private respondent was required to file his responsive pleading. Private respondent filed his answer. Private respondent asked for a preliminary hearing of the grounds for the motion to dismiss in his affirmative defenses. The same was denied. The respondent filed a petition for certiorari and prohibition in the Court of Appeals in which the said petition was granted. Thus petitioner now questions the decision of the Court of Appeals.
Issues: (1) Whether or not Court of Appeals erred in deciding without first serving the summons and a copy of the petition to the respondent now herein the petitioner.
(2) Whether or not the court erred in not dismissing the said case for the respondents herein failed to comply the provisions of P.D. 1508. Ruling: (1) Private respondent disputes this claim by showing that it was at the address of petitioner appearing in the petition at Liwayway Disco Restaurant and Disco Pub, Ilang-Ilang Street, General Santos City, where petitioner was served a copy of private respondent's "Manifestation and Motion for Early Resolution” . Petitioner's counsel was also served a copy of the resolution. Moreover, petitioner's counsel filed a motion seeking a reconsideration of the decision of respondent court which was denied. Therefore, petitioner voluntarily submitted to the jurisdiction of the respondent court and w as never deprived of due process.
(2) True it is that the Board is a government instrumentality but the petitioner and private respondent who are also contending parties in the case are residents of the same barangay so Section 6 of Presidential Decree No. 1508 should apply to them as it provides: Section 6. Conciliation, pre-condition to filing of complaint. No complaint, petition, action or proceeding involving any matter within the authority of the Lupon as provided in Section 2 hereof shall be filed or instituted in court or any other government office for adjudication unless there has been a confrontation of the parties before the Lupon Chairman or the Pangkat and no conciliation or settlement has been reached as certified by the Lupon Secretary or the Pangkat Secretary attested by the Lupon or Pangkat Chairman, or unless the settlement has been repudiated.
The purpose of this confrontation is to enable the parties to settle their differences amicably. If the other only contending party is the government or its instrumentality or subdivision the case falls within the exception but when it is only one of the contending parties, a confrontation should still be undertaken among the other parties.
CLAUDIA RIVERA SANCHEZ v. HONORABLE MARIANO C. TUPAS, Presiding Judge of the Regional Trial Court, Branch XII of Davao City and Private Respondent ALFONSO ESCOVILLA, G.R. No. 76690. February 29, 1988. Facts: Claudia Rivera Sanchez, petitioner and Alfonso Escovilla, private respondent are both occupants of a public agricultural land Identified as Lot 595, Cad-102 located at Budbud, Tibungco, Davao City. Sanchez claims that the area of 450 square meters, more or less, has been in her possession since 1947, long before Escovilla came in and occupied another portion of Lot 595. On the other hand, Escovilla stated that the area being claimed by petitioner is a part of his three-fourth (3/4) of a hectare parcel, the right to which he acquired from its former possessor and owner of the improvements thereon. Sometime in 1966, out of charity and upon their agreement that petitioner will vacate the premises upon demand, he granted petitioner's request to build her house inside the land occupied by him.
Escovilla filed an ejectment case in the City court of Davao against Sanchez. The court rendered judgment through a “Judgment by Compromise”. Sanchez filed a petition to annul judgment in the RTC of Davao. In her petition, she alleged that she was an illiterate and did not know that what he counsel presented which she had signed using her thumbmark was a Compromise Agreement which recognized Escovilla’s prior occupancy of the land in dispute; that she was only able to discover this when she received an Order of Guillermo C. Ferraris, OIC Regional Director of Lands, dropping her petition, together with the petitions of three others, based, allegedly, on their withdrawal, of their claims over the disputed land; that she had never intended to recognize the private respondent as having prior possession and occupancy of the land, the truth of the matter being that she had been in possession of the area of 450 square meters, more or less, since 1947, long before private respondent came in and occupied another portion of Lot 595; that in sheer bad faith, private respondent caused the survey of the entire Lot No. 595 sometime in 1980, which survey became null and void after the same was formally opposed by Eufemio Escovilla, brother of private respondent, before Atty. Uldarico G. Aquino, then District Officer, Bureau of Lands, Davao City; that on January 21, 1982, petitioner and the other occupants Eufemio Escovilla, Damaso Escovilla and Emiliana Monleon, requested the Land District Officer to authorize Geodetic Engineer Timoteo D. Cajipe of the same Office to execute a segregation survey; that the request was granted and the District Land Officer, Atty. Bienvenido Sambrano, directed Engr. Timoteo D. Cajipe to survey the land; that Engr. Cajipe was not able to conduct the segregation survey because private respondent threatened bodily harm on and even death to the survey team, especially against the petitioner and the other actual occupants; and that pursuant to the 1st Indorsement of the District Land Officer dated January 21, 1982, Land Investigator Manuel Flores conducted an investigation of the disputed area. Private respondent, in a Motion to Dismiss dated May 7,1986, moved for the dismissal of the complaint on the grounds that (1) the records of the case do not show that the same has been referred to the barangay court
for confrontation, conciliation or settlement of the parties concerned as required under the provisions of Section 6 of PD 1508, and as ruled by the Supreme Court in Spouses Maria Luisa P. Morata, et al. vs. Spouses Victor Go, et al., G.R. L-62339, October 27, 1983, 125 SCRA 444; and (2) the complaint does not state a cause of action. On May 12, 1986, petitioner filed an Opposition to the Motion to Dismiss on the grounds that (1) the motion to dismiss was filed beyond the period prescribed by the Rules of Court; and (2) the petition states a cause of action. On the same date, May 12,1986, private respondent filed his Answer and his Reply to Opposition to Motion to Dismiss, Opposition to Prayer therein to Declare Defendant in Default, and Manifestation, dated May 12, 1986. On May 26,1986, petitioner filed a Supplemental Opposition to Motion to Dismiss. Respondent Judge in an order dated May 16, 1986, granted the prayer of counsel for private respondent to be allowed one (1) week to file a memorandum in support of his stand, which was to be commented upon within like period by petitioner's counsel; after which, all the pending incidents are to be deemed submitted for the resolution of the Court. On May 29,1986, private respondent submitted his Memorandum. In an Order dated October 10, 1986, respondent Judge sustained private respondent's Motion to Dismiss by dismissing the case for lack of cause of action or prematurity for not having passed the Barangay Court. Issue: Whether or not the RTC gravely erred in dismissing the petition for annulment of judgment because it did not pass Barangay Conciliation. Ruling: Yes. Presidential Decree No. 1508 requires that the parties who actually reside in the same city or municipality should bring their controversy first to the Barangay Court for possible amicable settlement before filing a complaint in court. This requirement is compulsory (as ruled in the cited case of Morato vs. Go, 125 SCRA 444), [1983] and non-compliance of the same could affect the sufficiency of the cause of action and make the complaint vulnerable to dismissal on the ground of lack of cause of action or prematurity (Peregrina vs. Panis, 133 SCRA 75). [1984] It must be borne in mind that the purpose of the conciliation process at the barangay level is to discourage indiscriminate filing of cases in court in order to decongest the clogged dockets and in the process enhance the quality of justice dispensed by courts (Morato, vs. Go, supra).
In the instant case, it will be noted that the ejectment case in the City Court of Davao, Civil Case No. 1710-D, was filed on September 18, 1980, when Presidential Decree No. 1508 was already enforced. However, the records do not show that there was an opposition to the filing of the said ejectment case on the ground that the dispute had not been submitted to the Barangay Court for possible amicable settlement under P.D. 1508. The only logical conclusion therefore is that either such requirement had already been complied with or had been waived. Under either circumstance, there appears to be no reason, much less a requirement that this case be subjected to the provisions of P.D. 1508. In fact, the present controversy is an action for annulment of a compromise judgment which as a general rule is immediately executory (De Guzman vs. Court of Appeals, 137 SCRA 730,[1985]), and accordingly, beyond the authority of the Barangay Court to change or modify. Normally, the instant case should be remanded to the lower court for further proceedings. Nevertheless, a close examination of the records shows that such time-consuming procedure may be dispensed with in resolving the issue at hand. Thus, this Court, in the case of Velasco, et al. vs. Gayapa (G.R. No. 58651, promulgated on July 30,1987), ruled: “Since the main case is manifestly without merit, the order of the lower court dismissing the appeal cannot be impugned. As held in Castro vs. Court of appeals (supra), "a remand for further proceedings therefore, would only result in needless delays — a few more yearn perhaps of a tortuous
journey; through new proceedings in the trial court, the intermediate appeal and another resort to this Court through a petition for review to finally achieve the same result."
PETRA VDA. DE BORROMEO, vs. HON. JULIAN B. POGOY, Municipality/City Trial Court of Cebu City, and ATTY. RICARDO REYES. G.R. No. L-63277. November 29, 1983. Facts: Petitioner herein seeks to stop respondent Judge Julian B. Pogoy of the Municipal Trial Court (MTC) of Cebu City from taking cognizance of an ejectment suit for failure of the plaintiff to refer the dispute to the Barangay Lupon for conciliation.
The intestate estate of the late Vito Borromeo is the owner of a building bearing the deceased’s name, located at F. Ramos St., Cebu City. Said building has been leased and occupied by petitioner Petra Vda. de Borromeo at a monthly rental of P500.00 payable in advance within the first 5 days of the month.
On August 28, 1982, private respondent Atty. Ricardo Reyes, administrator of the estate and a resident of Cebu City, served upon petitioner a letter demanding that she pay the overdue rentals corresponding to the period from March to September 1982, and thereafter to vacate the premises. As petitioner failed to do so, Atty. Reyes instituted on September 16, 1982 an ejectment case against the former in the MTC of Cebu City. The complaint was docketed as Civil Case No. R-23915 and assigned to the sala of respondent judge. On November 12, 1982, petitioner moved to dismiss the case, advancing, among others, the want of jurisdiction of the trial court. Pointing out that the parties are residents of the same city, as alleged in the complaint, petitioner contended that the court could not exercise jurisdiction over the case for failure of respondent Atty. Reyes to refer the dispute to the Barangay Court, as required by PD No. 1508, otherwise known as Katarungang Pambarangay Law. Respondent judge denied the motion to dismiss. He justified the order in this wise: "The Clerk of Court when this case was filed accepted for filing same. That from the acceptance from (sic) filing, with the plaintiff having paid the docket fee to show that the case was docketed in the civil division of this court could be considered as meeting the requirement or precondition for were it not so, the Clerk of Court would not have accepted the filing of the case especially that there is a standing circular from the Chief Justice of the Supreme Court without even mentioning the Letter of Instruction of the President of the Philippines that civil cases and criminal cases with certain exceptions must not be filed without passing the barangay court."
Unable to secure a reconsideration of said order, petitioner came to this Court through this petition for certiorari. In both his comment and memorandum, private respondent admitted not having availed himself of the barangay conciliation process, but justified such omission by citing paragraph 4, section 6 of PD 1508 which allows the direct filing of an action in court where the same may otherwise be barred by the Statute of Limitations, as applying to the case at bar. Issue: Whether or not going through Barangay Conciliation is necessary as a condition precedent in this
case
Ruling: No. The excuse advanced by private respondent is unsatisfactory. Under Article 1147 of the Civil Code, the period for filing actions for forcible entry and detainer is one year, and this period is counted from demand to vacate the premises.
In the case at bar, the letter-demand was dated August 28, 1982, while the complaint for ejectment was filed in court on September 16, 1982. Between these two dates, less than a month had elapsed, thereby leaving at least eleven (11) full months of the prescriptive period provided for in Article 1147 of the Civil Code. Under the procedure outlined in Section 4 of PD 1508, 3 the time needed for the conciliation proceeding before the Barangay Chairman and the Pangkat should take no more than 60 days. Giving private respondent nine (9) months — ample time indeed — within which to bring his case before the proper court should conciliation efforts fail. Thus, it cannot be truthfully asserted, as private respondent would want Us to believe, that his case would be barred by the Statute of Limitations if he had to course his action to the Barangay Lupon. With certain exceptions, PD 1508 makes the conciliation process at the Barangay level a condition precedent for filing of actions in those instances where said law applies. For this reason, Circular No. 22 addressed to "ALL JUDGES OF THE COURTS OF FIRST INSTANCE, CIRCUIT CRIMINAL COURTS, JUVENILE AND DOMESTIC RELATIONS COURT, COURTS OF AGRARIAN RELATIONS, CITY COURTS, MUNICIPAL COURTS AND THEIR CLERKS OF COURT" was issued by Chief Justice Enrique M. Fernando on November 9, 1979. Said Circular reads: "Effective upon your receipt of the certification by the Minister of Local Government and Community Development that all the barangays within your respective jurisdictions have organized their Lupons provided for in Presidential Decree No. 1508, otherwise known as the Katarungang Pambarangay Law, in implementation of the barangay system of settlement of disputes, you are hereby directed to desist from receiving complaints, petitions, actions or proceedings in cases falling within the authority of said Lupons."
While respondent acknowledged said Circular in his order of December 14, 1982, he nevertheless chose to overlook the failure of the complaint in Civil Case No. R-23915 to allege compliance with the requirement of PD 1508. Neither did he cite any circumstance as would place the suit outside the operation of said law. Instead, he insisted on relying upon the pro tanto presumption of regularity in the performance by the clerk of court of his official duty, which to Our mind has been sufficiently overcome by the disclosure by the Clerk of Court that there was no certification to file action from the Lup on or Pangkat secretary attached to the complaint. Be that as it may, the instant petition should be dismissed. Under Section 4(a) of PD No. 1508, referral of a dispute to the Barangay Lupon is required only where the parties thereto are "individuals." An "individual" means "a single human being as contrasted with a social group or institution." Obviously, the law applies only to cases involving natural persons, and not where any of the parties is a juridical person such as a corporation, partnership, corporation sole, testate or intestate, estate, etc. In Civil Case No. R-23915, plaintiff Ricardo Reyes is a mere nominal party who is suing in behalf of the Intestate Estate of Vito Borromeo. While it is true that Section 3, Rule 3 of the Rules of Court allows the administrator of an estate to sue or be sued without joining the party for whose benefit the action is presented or defended, it is indisputable that the real party in interest in Civil Case No. R-23915 is the intestate estate under administration. Since the said estate is a juridical person, plaintiff administrator may file the complaint directly in court, without the same being coursed to the Barangay Lupon for arbitration.
Elmer Peregrina, Adelaida Peregrina and Cecilia Peregrina v. Hon. Domingo Panis. G.R.No. L-56011. October 31, 1984. Facts: A complaint was filed by Spouses Procopio and Carmelita Sanchez against the petitioners in a civil action for damages for alleged disrespect for the dignity, privacy and peace of mind of the spouses under Article 26 of the Civil Code, and for alleged defamation under Article 33 of the same Code. Admittedly, the parties are actual residents of the same barangay in Olongapo City. In fact, they are neighbors. Unquestionably, too, no conciliation proceedings were filed before the Lupon. Thus the complaint filed by the petitioners is silent regarding compliance with the mandatory requirement, nor does it allege that the dispute falls within the excepted cases.
Lower Court: petitioners moved for the dismissal of the complaint. The spouses filed their opposition holding that under Section 6(3) of P.D. No. 1508, the parties may go directly to the Courts if the action is coupled with a provisional remedy such as preliminary attachment. At first, the respondent judge dismissed the Complaint for failure of the spouses to comply with the pre-condition for amicable settlement under P.D. No. 1508, stating that the application for a provisional remedy was merely an afterthought. On motion for reconsideration by the SPOUSES, however, respondent Judge denied the Motion to Dismiss on the ground that under Rule 57, Section 1 of the Rules of Court, the application for attachment can be made at the commencement of the action or any time thereafter. Issue: Whether or not barangay conciliation in this case is a precondition for filing a complaint in the
RTC. Ruling: Yes.cSection 3 of P.D. No. 1508 specifically provides: Disputes between or among persons actually respectively in the same barangay shall be brought for amicable settlement before the Lupon of said barangay. ...
It is also mandated by Section 6 of the same law: Section 6. Conciliation, pre-condition to filing of complaint. — No complaint, petition, action or proceeding involving any matter within the authority of the Lupon as provided. in Section 2 hereof shall be filed or instituted in court or any other government office for adjudication unless there has been a confrontation of the parties before the Lupon Chairman or the Pangkat and no conciliation or settlement has been reached as certified by the Lupon Secretary or the Pangkat Secretary, attested by the Lupon or Pangkat Chairman, or unless the settlement has been repudiated. ...
Morata vs. Go, 125 SCRA 444 (1,,983), and Vda. de Borromeo vs. Pogoy, 126 SCRA 217 (1983) have held that P.D. No. 1508 makes the conciliation process at the Barangay level a condition precedent for the filing of a complaint in Court. Non-compliance with that condition precedent could affect the sufficiency of the plaintiff's cause of action and make his complaint vulnerable to dismissal on the ground of lack of cause of
action or prematurity. The condition is analogous to exhaustion of administrative remedies, or the lack of earnest efforts to compromise suits between family members, lacking which the case can be dismissed. The parties herein fall squarely within the ambit of P.D. No. 1508. They are actual residents in the same barangay and their dispute does not fall under any of the excepted cases.It will have to be held, therefore, that respondent Judge erred in reconsidering his previous Order of dismissal on the ground that the provisional remedy of attachment was seasonably filed. Not only was the application for that remedy merely an afterthought to circumvent the law, but also, fundamentally, a Writ of Attachment is not available in a suit for damages where the amount, including moral damages, is contingent or unliquidated. Prior referral to the Lupon for conciliation proceedings, therefore, was indubitably called for.
Librada M. Aquino vs Ernest S. Aure. G.R. No. 153567. February 18, 2008. Facts: Aure and Es Aure Lending Investors alleged that they acquired the subject property from Spouses Aquino. Aure alleged that after they paid the spouses, the latter refused to vacate the property.Aure filed a complaint for ejectment against the spouses in the MeTC in Quezon City.The spouses counter that Aure lacks cause of action because the latter does not have any legal right over the subject property. They reasoned that Aure did not comply with their MoA.The MeTC ruled that since the question of ownership was put in issue, the action was converted to a suit which is incapable of pecuniary estimation which properly rests within the original exclusive jurisdiction of the RTC. The MeTC also ruled that non-compliance with barangay conciliation process lead to the dismissal of the complaint.On appeal the RTC affirmed the dismissal of the complaint on the same ground that the dispute was not brought before the Barangay Council for conciliation before it was filed in court.The Court of Appeals reversed the MeTC and RTC decisions and remanded the case to the MeTC for further proceedings. Issues: (1) Whether or not non-compliance with the Barangay Conciliation proceedings is a jurisdictional defect that warrants the dismissal of the complaint.
(2) Whether or not the allegation of ownership ousts the MeTC of its jurisdiction over an ejectment case. Ruling: (1) No, the conciliation process is not a jurisdictional requirement, so that non-compliance therewith cannot affect the jurisdiction which the court has otherwise acquired over the subject matter or over the person of the defendant. However, non-compliance will not prevent a court from exercising its power of adjudication over the case before it where the defendants failed to object to such exercise of jurisdiction in their answer and even during the entire proceedings a quo. In the present case, Aquino cannot be allowed to attack the jurisdiction of the MeTC after having participated in the proceedings without objecting.By Aquino’s failure to seasonably object to the deficiency in the complaint, she is deemed to have waived any defect. The issue of non-compliance should be pleaded in the answer.
As provided under Section 1, Rule 9 of the 1997 Rules of Civil Procedure: Sec. 1. Defenses and objections not pleaded. – Defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. However, when it appears from the pleadings or the evidence on record that the court has no jurisdiction over the subject matter, that there is another action pending between the same parties for the same cause, or that the action is barred by a prior judgment or by statute of limitations, the court shall dismiss the claim.
Rule 15: Sec. 8. Omnibus Motion. - Subject to the provisions of Section 1 of Rule 9, a motion attacking a pleading, order, judgment, or proceeding shall include all objections then available, and all objections not so included shall be deemed waived.
(2) No, jurisdiction in ejectment cases is determined by the allegations pleaded in the complaint. As long as these allegations demonstrate a cause of action either for forcible entry or for unlawful detainer, the court acquires jurisdiction over the subject matter.Rule 70 of the Rules of Court: Section 1. Who may institute proceedings, and when. – Subject to the provisions of the next succeeding section, a person deprived of the possession of any land or building by force, intimidation, threat, strategy, or stealth, or a lessor, vendor, vendee, or other person against whom the possession of any land or building is unlawfully withheld after the expiration or termination of the right to hold possession, by virtue of any contract, express or implied, or the legal representatives or assigns of any such lessor, vendor, vendee, or other person may at any time within one (1) year after such unlawful deprivation or withholding of possession, bring an action in the proper Municipal Trial Court against the person or persons unlawfully withholding or depriving of possession, or any person or persons claiming under them, for the restitution of such possession, together with damages and costs.The law provides instead that when the question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved only to determine the issue of possession
Crisanta Alcaraz Miguel v. Jerry D. Montanez. G.R. No. 191336. January 25, 2012. Facts: On February 1, 2001, respondent Jerry Montanez (Montanez) secured a loan of (P143,864.00), payable in one (1) year, or until February 1, 2002, from the petitioner, Crisanta Alcaraz Miguel. The respondent gave as collateral therefor his house and lot located at Block 39 Lot 39 Phase 3, Palmera Spring, Bagumbong, Caloocan City.
Due to the respondents failure to pay the loan, the petitioner filed a complaint against the respondent before the Lupong Tagapamayapa of Barangay San Jose, Rodriguez, Rizal. The parties entered into a Kasunduang Pag-aayos wherein the respondent agreed to pay his loan in installments in the amount of Two Thousand Pesos (P2,000.00) per month, and in the event the house and lot given as collateral is sold, the respondent would settle the balance of the loan in full. However, the respondent still failed to pay, and on December 13, 2004, the Lupong Tagapamayapa issued a certification to file action in court in favor of the petitioner. On April 7, 2005, the petitioner filed before the Metropolitan Trial Court (MeTC) of Makati City, Branch 66, a complaint for Collection of Sum of Money. In his Answer with Counterclaim, the respondent raised the defense of improper venue considering that the petitioner was a resident of Bagumbong, Caloocan City while he lived in San Mateo, Rizal. MTC rendered the decision in favor of petitioner. Upon appeal, RTC affirmed. CA granted the petition of the respondent, reversing and setting aside the judgment made RTC. A new judgment is entered dismissing respondents complaint for collection of sum of money, without prejudice to her right to file the necessary action to enforce the Kasunduang Pag-aayos. The CA went on saying that since the parties entered into a Kasunduang Pag-aayos before the Lupon ng Barangay, such settlement has the force and effect of a court judgment, which may be enforced by execution within six (6) months from the date of settlement by the Lupon ng Barangay, or by court action after the lapse of such time. Considering that more than six (6) months had elapsed from the date of settlement, the CA ruled that the remedy of the petitioner was to file an action for the execution of the Kasunduang Pag-aayos in court and not for collection of sum of money. Consequently, the CA deemed it unnecessary to resolve the issue on venue. Issues: (1) Whether or not a complaint for sum of money is the proper remedy for the petitioner, notwithstanding the Kasunduang Pag-aayos.
(2) Whether or not the CA should have decided the case on the merits rather than remand the case for the enforcement of the Kasunduang Pag-aayos.
Ruling: (1) Yes. Because the respondent failed to comply with the terms of the Kasunduang Pag-aayos, said agreement is deemed rescinded pursuant to Article 2041 of the New Civil Code and the petitioner can insist on his original demand. Perforce, the complaint for collection of sum of money is the proper remedy.
The petitioner points out that the cause of action did not arise from the Kasunduang Pag-aayos but on the respondents breach of the original loan agreement. This Court agrees with the petitioner. It is true that an amicable settlement reached at the barangay conciliation proceedings, like the Kasunduang Pag-aayos in this case, is binding between the contracting parties and, upon its perfection, is immediately executory insofar as it is not contrary to law, good morals, good customs, public order and public policy. This is in accord with the broad precept of Article 2037 of the Civil Code, viz: A compromise has upon the parties the effect and authority of res judicata; but there shall be no execution except in compliance with a judicial compromise.
Being a by-product of mutual concessions and good faith of the parties, an amicable settlement has the force and effect of res judicata even if not judicially approved. It must be emphasized, however, that enforcement by execution of the amicable settlement, either under the first or the second remedy, is only applicable if the contracting parties have not repudiated such settlement within ten (10) days from the date thereof in accordance with Section 416 of the Local Government Code. If the amicable settlement is repudiated by one party, either expressly or impliedly, the other party has two options, namely, to enforce the compromise in accordance with the Local Government Code or Rules of Court as the case may be, or to consider it rescinded and insist upon his original demand. This is in accord with Article 2041 of the Civil Code, which qualifies the broad application of Article 2037, viz: If one of the parties fails or refuses to abide by the compromise, the other party may either enforce the compromise or regard it as rescinded and insist upon his original demand. In the case of Leonor v. Sycip, the Supreme Court (SC) had the occasion to explain this provision of law. It ruled that Article 2041 does not require an action for rescission, and the aggrieved party, by the breach of compromise agreement, may just consider it already rescinded. In the instant case, the respondent did not comply with the terms and conditions of the Kasunduang Pagaayos. Such non-compliance may be construed as repudiation because it denotes that the respondent did not intend to be bound by the terms thereof, thereby negating the very purpose for which it was executed. (2) Yes. Considering that the Kasunduang Pag-aayos is deemed rescinded by the non-compliance of the respondent of the terms thereof, remanding the case to the trial court for the enforcement of said agreement is clearly unwarranted.
Remedio Flores v. Hon. Judge Heila Mallare-Phillipps, Ignacio Binongcal and Fernando Calion G.R. No. L-66620. September 24, 1986. Facts: Petitioner Flores appealed by certiorari to the Supreme Court the order of Respondent Judge Mallare-Phillipps of RTC Baguio in dismissing the former's complaint for lack of jurisdiction. As the records show, the complaint consists of two causes of action; the first was against Ignacio Binongcal who refused to pa y the truck tires amounting to P11,643 which he purchased from Petitioner Flores in separate ocassions from August-October 1981; and the second was against Fernando Callion who also refused to pay an amount of P10,212 representing the cost of truck tires that he also bought from the petitioner.
Respondent Binongcal moved to dismiss the complaint on the ground of lack of jurisdiction since the amount being demanded against him does not fall under the jurisdiction of the regional trial court pursuant to Sec.19(8) of BP Blg.129 which provides that the RTC will only have jurisdiction if the amount being claimed exceeds P20,000. He also alleged that his transaction with the Petitioner is separate and distinct from that of his co-defendant Calion. During the Hearing on the Motion to Dismiss, Respondent Callion joined in moving for the dismissal of the complaint for the same ground of lack of jurisdiction. Thereafter, Respondent Judge Mallare Phillipps rendered a decision dismissing the complaint of Petitioner Flores.Petitioner maintains that the RTC has the jurisdiction over the casd followinf the 'novel' totality rule introduced in Sec.33 of BP 129 and Sec.11 of Interim Rules.The pertinent portion of Section 33(l) of BP129 reads as follows: ... Provided,That where there are several claims or causes of action between the same or different parties, embodied in the same complaint, the amount of the demand shall be the totality of the claims in all the causes of action, irrespective of whether the causes of action arose out of the same or different transactions. ...
Section 11 of the Interim Rules provides thus:Application of the totality rule - In actions where the jurisdiction of the court is dependent on the amount involved, the test of jurisdiction shall be the aggregate sum of all the money demands, exclusive only of interest and costs, irrespective of whether or not the separate claims are owned by or due to different parties. If any demand is for damages in a civil action, the amount thereof must be specifically alleged. Issues: (1) Whether or not the trial court's order of dismissing the case is proper.
(2) Whether or not the trial court correctly ruled on the application of permissive joinder of parties under the Rules of Court. Rulinh: (1) Yes. The trial court's decision in dismissing the case is proper. In cases of permissive joinder of parties, whether as plaintiffs or as defendants, under Section 6 of Rule 3, the total of all the claims shall now furnish the jurisdictional test. Needless to state also, if instead of joining or being joined in one complaint separate actions are filed by or against the parties, the amount demanded in each complaint shall furnish the jurisdictional test.In the case at bar, the lower court correctly held that the jurisdictional test is subject to the rules on joinder of parties pursuant to Section 5 of Rule 2 and Section 6 of Rule 3 of the Rules of
Court and that, after a careful scrutiny of the complaint, it appears that there is a misjoinder of parties for the reason that the claims against respondents Binongcal and Calion are separate and distinct and neither of which falls within its jurisdiction of the RTC. Section 6 of Rule 3 which provides as follows: Permissive joinder of parties.-All persons in whom or against whom any right to relief in respect to severally, or in the alternative, may, except as otherwise provided in these rules, join as plaintiffs or be joined as defendants in one complaint, where any question of law or fact common to all such plaintiffs or to all such defendants may arise in the action; but the court may make such orders as may be just to prevent any plaintiff or defendant from being embarrassed or put to expense in connection with any proceedings in which he may have no interest. Ramon Ching and Po Wing Properties v. Hon. Jansen Rodriguez et al. G.R. NO. 192828. November 28, 2011 Facts: The private respondents filed a Complaint against the Ramon Ching (Ramon), Po Wing Properties and Stronghold Insurance Company, Global Business Bank, Inc. (formerly PhilBank), Elena Tiu Del Pilar, Asia Atlantic Resources Ventures, Inc., Registers of Deeds of Manila an d Malabon, and all persons claiming rights or titles from Ramon and his successors-in-interest.
In the Complaint, the respondents alleged the following as causes of action: First Cause of Action. 1. They are the heirs of Lim San, also known as Antonio Ching / Tiong Cheng / Ching Cheng Suy (Antonio). 2. Respondents Joseph Cheng (Joseph) and Jaime Cheng (Jaime) are allegedly the children of Antonio with his common-law wife, respondent Mercedes Igne (Mercedes). 3. Respondent Lucina Santos (Lucina) claimed that she was also a common-law wife of Antonio. 4. The respondents averred that Ramon misrepresented himself as Antonio's and Lucina's son when in truth and in fact, he was adopted and his birth certificate was merely simulated. 5. Antonio died of a stab wound. Police investigators identified Ramon as the prime suspect and he now stands as the lone accused in a criminal case for murder filed against him. Warrants of arrest issued against him have remained unserved as he is at large. 6. From the foregoing circumstances and upon the authority of Article 919of the New Civil Code (NCC), the respondents concluded that Ramon can be legally disinherited, hence, prohibited from receiving any share from the estate of Antonio. Second Cause of Action . 1. Ramon misrepresented that there were only six real estate properties left b y Antonio. 2. Ramon had illegally transferred to his name the titles to the said properties. Further, there are two other parcels of land, cash and jewelries, plus properties in Hongkong, which were in Ramon's possession. Third Cause of Action . 1. Mercedes, being of low educational attainment, was sweet-talked by Ramon into surrendering to him a Global Business Bank, Inc. (Global Bank) Certificate of Time Deposit of P4,000,000.00 in the name of Antonio, and the certificates of title covering two condominium units in Binondo which were purchased by Antonio using his own money but which were registered in Ramon's name. 2. Ramon also fraudulently misrepresented to Joseph, Jaime and Mercedes that they will promptly receive their complete shares, exclusive of the stocks in Po Wing Properties, Inc. (Po Wing),
from the estate of Antonio. Exerting undue influence, Ramon had convinced them to execute an Agreement which was not complied with. 3. Further, Lucina was not informed of the execution of the said instruments and had not received any amount from Ramon. Hence, the instruments are null and void. Fourth Cause of Action . 1. Antonio's 40,000 shares in Po Wing, which constitute 60% of the latter's total capital stock, were illegally transferred by Ramon to his own name through a forged document of sale executed after Antonio died. 2. Po Wing owns a ten-storey building in Binondo. Ramon's claim that he bought the stocks from Antonio before the latter died is baseless. Further, Lucina's shares in Po Wing had also banished into thin air through Ramon's machinations. Fifth Cause of Action . 1. Ramon executed an Affidavit of Extra-Judicial Settlement of Estate adjudicating solely to himself Antonio's entire estate to the prejudice of the respondents. By virtue of the said instrument, new TCTs covering eight real properties owned by Antonio were issued in Ramon's name. 2. Relative to the Po Wing shares, the Register of Deeds of Manila had required Ramon to post a Surety Bond conditioned to answer for whatever claims which may eventually surface in connection with the said stocks. Co-defendant Stronghold Insurance Company issued the bond in Ramon's behalf. Sixth Cause of Action . 1. Ramon sold Antonio's two parcels of land in Navotas to co-defendant Asia Atlantic Business Ventures, Inc. Another parcel of land, which was part of Antonio's estate, was sold by Ramon to co-defendant Elena Tiu Del Pilar at an unreasonably low price. 2. By reason of Ramon's lack of authority to dispose of any part of Antonio's estate, the conveyances are null and void ab initio. Since Ramon is at large, his wife, Belen Dy Tan Ching, now manages Antonio's estate. She has no intent to convey to the respondents their shares in the estate of Antonio.The Amended Complaint, which impleaded Metrobank as successor-in-interest of Global, also added a seventh cause of action relative to the existence of a Certificate of Premium Plus Acquisition (CPPA) in the amount of P4,000,000.00 originally issued by PhilBank to Antonio. The respondents prayed that they be declared as the rightful owners of the CPPA and that it be immediately released to them. Alternatively, the respondents prayed for the issuance of a hold order relative to the CPPA to preserve it during the pendency of the case. Petitioners filed a Motion to Dismiss on the respondents' Amended Complaint on the alleged ground of the RTC's lack of jurisdiction over the subject matter of the Complaint. The petitioners argued that since the Amended Complaint sought the release of the CPPA to the respondents, the latter's declaration as heirs of Antonio, and the propriety of Ramon's disinheritance, the suit partakes of the nature of a special proceeding and not an ordinary action for declaration of nullity. Hence, jurisdiction pertains to a probate or intestate court and not to the RTC acting as an ordinary court. RTC issued an Order denying the petitioners' Motion to Dismiss on the ground that the action delves mainly on the question of ownership of the properties described in the complaint. Also, the issue of disinheritance can be fully settled after a trial on the merits. And at this stage, it has not been sufficiently established whether or not there is a will. CA affirmed this decision.
Issue: Whether or not the RTC should have granted Motion to Dismiss on the ground that the filiation with Antonio of Ramon and the determination of the extent of Antonio's estate can only be resolved in a special proceeding. Ruling: NO, RTC ACTED CORRECTLY BY DENYING MOTION TO DISMISS.
Although the respondents' Complaint and Amended Complaint sought, among others, the disinheritance of Ramon and the release in favor of the respondents of the CPPA now under Metrobank's custody, remains to be an ordinary civil action, and not a special proceeding pertaining to a settlement court. A special proceeding is a remedy by which a party seeks to establish a status, a right, or a particular fact. It is distinguished from an ordinary civil action where a party sues another for the enforcement or protection of a right, or the prevention or redress of a wrong. To initiate a special proceeding, a petition and not a complaint should be filed.An action for reconveyance and annulment of title with damages is a civil action, whereas matters relating to settlement of the estate of a deceased person such as advancement of property made by the decedent, partake of the nature of a special proceeding, which concomitantly requires the application of specific rules as provided for in the Rules of Court. Under Article 916 of the NCC, disinheritance can be effected only through a will wherein the legal cause therefor shall be specified. While the respondents in their Complaint and Amended Complaint sought the disinheritance of Ramon, no will or any instrument supposedly effecting the disposition of Antonio's estate was ever mentioned. The petitioners argue that the prayers in the Amended Complaint, seeking the release in favor of the respondents of the CPPA under Metrobank's custody and the nullification of the instruments subject of the complaint, necessarily require the determination of the respondents' status as Antonio's heirs.It bears stressing that what the respondents prayed for was that they be declared as the rightful owners of the CPPA which was in Mercedes' possession prior to the execution of the Agreement and Waiver. The respondents also prayed for the alternative relief of securing the issuance by the RTC of a hold order relative to the CPPA to preserve Antonio's deposits with Metrobank during the pendency of the case. It can thus be said that the respondents' prayer relative to the CPPA was premised on Mercedes' prior possession of and their alleged collective ownership of the same, and not on the declaration of their status as Antonio's heirs. Further, it also has to be emphasized that the respondents were parties to the execution of an agreeement prayed to be nullified. Hence, even without the necessity of being declared as heirs of Antonio, the respondents have the standing to seek for the nullification of the instruments in the light of their claims that there was no consideration for their execution, and that Ramon exercised undue influence and committed fraud against them. In the event that the RTC will find grounds to grant the reliefs prayed for by the respondents, the only consequence will be the reversion of the properties subject of the dispute to the estate of Antonio. Civil Case No. 02-105251 was not instituted to conclusively resolve the issues relating to the administration, liquidation and distribution of Antonio's estate, hence, not the proper subject of a special proceeding for the settlement of the estate of a deceased person under Rules 73-91 of the Rules of Court.The respondents' resort to an ordinary civil action before the RTC may not be strategically sound, because a settlement proceeding should thereafter still follow, if their intent is to recover from Ramon the properties alleged to have been illegally transferred in his name. Be that as it may, RTC cannot be restrained from taking cognizance of respondents' Complaint and Amended Complaint as the issues raised and the prayers indicated therein are matters which need not be threshed out in a special proceeding.
Paglaum Management and Development Corp. and Health Marketing Technologies, Inc., v. Union Bank of the Philippines, Notary Public John Doe, and Register of Deeds of Cebu City and Cebu Province G.R. No. 179018. April 17, 2013. Facts: In 1994, Union Bank of the Philippines extended HealthTech a credit line in the amount of ₱10 Million. To secure the obligation, PAGLAUM executed three Real Estate Mortgages over its three real properties in Cebu Province on behalf of HealthTech and in favor of Union Bank.
The original contract states that the venue of all suits and actions shall be commenced in “Makati, Metro Manila, or in the place where any of the Mortgaged Properties is located, at the absolute option of the Mortgagee, the parties hereto waiving any other venue.” Health Tech and Union Bank thereafter increased the credit line but omitted Makati City as the venue in the subsequent agreements. In 1997, financial crisis badly hit Health Tech’s business which made it difficult for Health Tech to meet its obligations. A restructuring agreement was entered stating that all actions shall be commenced in in Makati City, with both parties waiving any other venue.
Health Tech defaulted still. Union Bank extrajudicially foreclosed the three mortgaged properties. Health Tech thereafter filed a Complaint for Annulment of Sale and Titles with Damages before the RTC of Makati City. Union Bank filed a motion to dismiss based on improper venue, among others. The RTC dismissed the case. The Court of Appeals affirmed the decision of the trial court. Issue: Whether or not Makati City is the proper venue to assail the foreclosure of the subject real estate mortgage. Ruling: YES. The complaint filed in this case is a real action. Accordingly, Sec. 1, Rule 4 provides that the said case should be tried “in the proper court which has jurisdiction over the area wherein the real property involved, or a portion thereof, is situated.”
But Sec. 3 (b), Rule 4 allows real actions to bee commenced and tried in a court other than where the property is situated in instances where the parties have previously and validl y agreed in writing on the exclusive venue thereof. In this case, such an agreement exist. The Restructuring Agreement clearly reveals the intention of the parties to implement a restrictive venue stipulation, which applies not only to the principal obligation, but also to the mortgages. The phrase waiving any other venue plainly shows that the choice of Makati City as the venue for actions arising out of or in connection with the Restructuring Agreement and the Collateral, with the Real Estate Mortgages being explicitly defined as such, is exclusive.
Note that in the absence of qualifying or restrictive words, the venue stipulation should only be deemed as an agreement on an additional forum, and not as a restriction on a specified place. This is not the case here based on the words “waiving any other venue.”
Sps. Domingo M. Belen and Dominga P. Belen vs. Hon. Pablo R. Chavez et al. G.R. No. 175334. March 26, 2008. Facts: Spouses Silvestre and Patricia Pacleb filed a petition against spouses Domingo and Dominga Belen before the RTC of Rosario, Batangas. It was alleged that spouses Pacleb secured a judgment by default in a case rendered by a Judge John W. Green of the Superior Court of the State of California. In this judgment, spouses Belen were ordered to pay spouses Pacleb the amount of $56,204.69 representing loan repayment and share in the profits plus interest and costs of suit. The summons was served on spous es Belen’s address in San Gregorio, Alaminos, Laguna, and was received b y Marcelo M. Belen.
Atty. Reynaldo Alcantara entered his appearance as counsel for spouses Belen and subsequently filed an answer alleging that they were actually residents of California, USA. In the answer it was also claimed that their liability had been extinguished by a release of abstract judgment issued in the same collection case. Spouses Belen failed to attend the scheduled pre-trial conference, and because of this, the RTC ordered the ex parte presentation of evidence for spouses Pacleb before the branch clerk of court. Atty. Alcantara filed a motion to dismiss, citing the judgment of dismissal issued by the Superior Court of the State of California, which allegedly dismissed the case before it involving the same parties. The RTC denied the motion to dismiss. Through a motion, Atty. Alcantara sought the reinstatement of the motion to dismiss by attaching a copy of the said foreign judgment. Spouses Pacleb on the other hand filed a motion for the amendment of the complaint. The amended complaint averred that they were constrained to withdraw their complaint against spouses Belen from the California court because of the prohibitive cost of litigation, which withdrawal was favorably considered by said court. Spouses Belen and Atty. Alcantara failed to appear at the rescheduled pretrial conference. The RTC therefore declared them in default and allowed Spouses Pacleb to present evidence ex parte.Following this, Atty. Alcantara passed away without the RTC being informed of such fact.On 5 August 2003, the RTC rendered a Decision ordering spouses Belen to pay spouses Pacleb.A copy of the RTC decision intended for Atty. Alcantara was returned with the notation “Addressee Deceased.” A copy of the RTC decision was then sent to the purported address of petitioners in San Gregorio, Alaminos, Laguna and was received by a certain Leopoldo Avecilla.After the promulgation of the RTC decision, Spouses Pacleb filed an ex parte motion for preliminary attachment. Afterward, RTC directed the issuance of a writ of execution. the real properties belonging to spouses Belen were levied upon and the public auction.Subsequently, Atty. Carmelo B. Culvera entered his appearance as counsel for Spouses Belen. He then filed a Motion to Quash Writ of Execution, and Atty. Culvera averring that he received a copy thereof only on 29 December 2003 subsequently filed A Notice of Appeal from the RTC Decision.The RTC denied the motion and Atty. Culvera’s subsequent motion for reconsideration of said order. Spouses Belen then filed a Rule 65 petition before the Court of Appeals. The Court of Appeals dismissed the Petition for Certiorari.Spouses Belen appealed before the Supreme Court, which it denied because it is not accompanied by a valid verification and certification of nonforum
shopping. They sought reconsideration, which the Court granted. The Court also ordered the reinstatement of the petition and the filing of a comment. Issues: (1) Whether or not the RTC acquired jurisdiction over the persons of spouses Belen through either the proper service of summons or the appearance of the late Atty. Alcantara on behalf of petitioners.
(2) WON there was a valid service of the copy of the RTC decision on them.
Ruling: (1) Yes, RTC acquired jurisdiction over spouses Belen. Courts acquire jurisdiction over the plaintiffs upon the filing of the complaint. On the other hand, jurisdiction over the defendants in a civil case is acquired either through the service of summons upon them or through their voluntary appearance in court and their submission to its authority. Jurisdiction over the person of a resident defendant who does not voluntarily appear in court can be acquired by personal service of summons. If he cannot be personally served, substituted service may be made. If he is temporarily out of the country, any of the following modes of service may be resorted to: (1) substituted service; (2) personal service outside the country, with leave of court; (3) service by publication, also with leave of court; or (4) any other manner the court may deem sufficient.
However, in an action in personam in which the defendant is a nonresident who does not voluntarily submit himself to the authority of the court, personal service of summons within the state is essential to the acquisition of jurisdiction over his person. This is only possible if the defendant is physically present in the country. Otherwise, the court cannot acquire jurisdiction over his person and therefore cannot validly try and decide the case against him. On the other hand, in a proceeding in rem or quasi in rem, jurisdiction over the person of the defendant is not a prerequisite to confer jurisdiction on the court provided that the court acquires jurisdiction over the res. Nonetheless, summons must be served upon the defendant not for the purpose of vesting the court with jurisdiction but merely for satisfying the due process requirements. Thus, where the defendant is a nonresident who is not found in the Philippines and (1) the action affects the personal status of the plaintiff; (2) the action relates to, or the subject matter of which is property in the Philippines in which the defendant has or claims a lien or interest; (3) the action seeks the exclusion of the defendant from any interest in the property located in the Philippines; or (4) the property of the defendant has been attached in the Philippines — service of summons may be effected by (a) personal service out of the country, with leave of court; (b) publication, also with leave of court; or (c) any other manner the court may deem sufficient. The action filed against spouses Belen is for the enforcement of a foreign judgment in a complaint for breach of contract whereby they were ordered to pay spouses Pacleb the monetary award. It is in the nature of an action in personam because the latter are suing to enforce their personal rights under said judgment. As such, jurisdiction over the person of the defendant who does not voluntarily submit himself to the authority of the court is necessary for the court to validly try and decide the case through personal service or, if this is not possible and he cannot be personally served, substituted service. In this case, spouses Belen have been permanent residents of California, U.S.A. since the filing of the action up to the present. In the answer, Atty. Alcantara had already averred that petitioners were residents of California, U.S.A. and that he was appearing only upon the instance of petitioners’ relatives. Moreover, private respondents’ attorney-in-fact, Joselito Rioveros, testified that he knew petitioners to be former residents of Alaminos, Laguna but are now living in California, U.S.A. However, Spouses Belen voluntarily submitted themselves through Atty. Alcantara to the jurisdiction of the RTC, by allowing him to file motions and pleadings. (2) No, there was no valid service of the copy of the decision of the RTC. As a general rule, when a party is represented by counsel of record, service of orders and notices must be made upon said attorney and
notice to the client and to any other lawyer, not the counsel of record, is not notice in law. The exception to this rule is when service upon the party himself has been ordered by the court. In this case, a copy of the RTC decision was sent first to Atty. Alcantara, petitioners’ counsel of record, but it was returned unserved in view of the demise of Atty. Alcantara. Thus, a copy was subsequently sent to petitioners’ “last known address in San Gregorio, Alaminos, Laguna,” which was received by a certain Leopoldo Avecilla. The subsequent service on petitioners’ purported “last known address” by registered mail is defective because it does not comply with the requisites on service by registered mail, which presupposes that the present address of the party is known, and the person receiving it must be authorized to receive such service. Since the filing of the complaint, petitioners could not be physically found in the country because they had already become permanent residents of California, U.S.A. The service of the RTC decision at spouses Belen’s former address in Alaminos, Laguna is defective and does not bind petitioners. Planters Development Bank v. Julie Chandumal. G. R. No. 195619. September 5, 2012. Facts: The instant case stemmed from a contract to sell a parcel of land with improvements, between BF Homes, Inc. (BF Homes) and herein respondent Julie Chandumal (Chandumal). The property subject of the contract is located in Talon Dos, Las Piñas City.
Chandumal paid her monthly amortizations from December 1990 until May 1994 when she began to default in her payments. In a Notice of Delinquency and Rescission of Contract with Demand to Vacate4 dated July 14, 1998, PDB gave Chandumal a period of thirty (30) days from receipt within which to settle her installment arrearages together with all its increments; otherwise, all her rights under the contract shall be deemed extinguished and terminated and the contract declared as rescinded. Despite demand, Chandumal still failed to settle her obligation. On June 18, 1999, an action for judicial confirmation of notarial rescission and delivery of possession was filed by PDB against Chandumal. PDB alleged that despite demand, Chandumal failed and/or refused to pay the amortizations as they fell due; hence, it caused the rescission of the contract by means of notarial act. According to PDB, it tried to deliver the cash surrender value of the subject property in the amount of P 10,000.00; however, the defendant was unavailable for such purpose. Consequently, summons was issued and served by deputy sheriff Roberto T. Galing (Sheriff Galing). According to his return, Sheriff Galing attempted to personally serve the summons upon Chandumal on July 15, 19 and 22, 1999 but it was unavailing as she was always out of the house on said dates. Hence, the sheriff caused substituted service of summons on August 5, 1999 by serving the same through Chandumal’s mother who acknowledged receipt thereof. For her failure to file an answer within the prescribed period, PDB filed an ex parte motion to declare Chandumal in default. And on January 12, 2001, the RTC issued an Order granting the motion of PDB. On February 23, 2001, Chandumal filed an Urgent Motion to Set Aside Order of Default and to Admit Attached Answer. She maintained that she did not receive the summons and/or was not notified of the same. She further alleged that her failure to file an answer within the reglementary period was due to fraud, mistake or excusable negligence. Chandumal alleged the following defenses: (a) contrary to the position of PDB, the latter did not make any demand for her to pay the unpaid monthly amortization; and (b) PDB did not tender or offer to give the cash surrender value of the property in an amount equivalent to fifty percent (50%) of the actual total payment made, as provided for under Section 3(b) of R.A. No. 6552. Moreover, Chandumal claimed that since the total payment she made amounts to P 782,000.00, the corresponding cash surrender value due her should be P391,000.00. The RTC denied Chandumal’s motion to set aside the order of default. Her motion for reconsideration was also denied for lack of merit.11 Hence, the RTC allowed PDB to present its evidence ex parte.
On May 31, 2004, the RTC rendered a Decision13 in favor of PDB. Chandumal appealed to the CA. The CA, without ruling on the propriety of the judicial confirmation of the notarial rescission, rendered the assailed decision nullifying the RTC decision due to invalid and ineffective substituted service of summons. PDB filed a motion for reconsideration but the CA in its Resolution dated February 16, 2011 denied it. Issues: (1) Whether or not there was a valid substituted service of summon s.
(2) Whether or not Chandumal voluntarily submitted to the jurisdiction of the trial.court. Ruling: (1) There was no valid substituted service of summons.
In this case, the sheriff resorted to substituted service of summons due to his failure to serve it personally. In Manotoc v. Court of Appeals, the Court detailed the requisites for a valid substituted service of summons, summed up as follows: (1) impossibility of prompt personal service – the party relying on substituted service or the sheriff must show that the defendant cannot be served promptly or there is impossibility of prompt service; (2) specific details in the return – the sheriff must describe in the Return of Summons the facts and circumstances surrounding the attempted personal service; (3) a person of suitable age and discretion – the sheriff must determine if the person found in the alleged dwelling or residence of defendant is of legal age, what the recipient’s relationship with the defendant is, and whether said person comprehends the significance of the receipt of the summons and his duty to immediately deliver it to the defendant or at least notify the defendant of said receipt of summons, which matters must be clearly and specifically described in the Return of Summons; and (4) a competent person in charge, who must have sufficient knowledge to understand the obligation of the defendant in the summons, its importance, and the prejudicial effects arising from inaction on the summons. In applying the foregoing requisites in the instant case, the CA correctly ruled that the sheriff’s return failed to justify a resort to substituted service of summons. According to the CA, the Return of Summons does not specifically show or indicate in detail the actual exertion of efforts or any positive step taken by the officer or process server in attempting to serve the summons personally to the defendant. The return merely states the alleged whereabouts of the defendant without indicating that such information was verified from a person who had knowledge thereof.25 Indeed, the sheriff’s return shows a mere perfunctory attempt to cause personal service of the summons on Chandumal. There was no indication if he even asked Chandumal’s mother as to her specific whereabouts except that she was "out of the house", where she can be reached or whether he even tried to await her return. The "efforts" exerted by the sheriff clearly do not suffice to justify substituted service and his failure to comply with the requisites renders such service ineffective.
(2) Yes, respondent voluntarily submitted to the jurisdiction of the trial court. Despite that there was no valid substituted service of summons, the Court, nevertheless, finds that Chandumal voluntarily submitted to the jurisdiction of the trial court. Section 20, Rule 14 of the Rules of Court states: Sec. 20. Voluntary appearance. – The defendant’s voluntary appearance in the action shall be equivalent to service of summons. The inclusion in a motion to dismiss of other grounds aside from lack of jurisdiction over the person of the defendant shall not be deemed a voluntary appearance.
When Chandumal filed an Urgent Motion to Set Aside Order of Default and to Admit Attached Answer, she effectively submitted her person to the jurisdiction of the trial court as the filing of a pleading where one seeks an affirmative relief is equivalent to service of summons and vests the trial court with jurisdiction over the
defendant’s person. Thus, it was ruled that the filing of motions to admit answer, for additional time to file answer, for reconsideration of a default judgment, and to lift order of default with motion for reconsideration is considered voluntary submission to the trial court’s jurisdiction.27 The Court notes that aside from the allegation that she did not receive any summons, Chandumal’s motion to set aside order of default and to admit attached answer failed to positively assert the trial court’s lack of jurisdiction. In fact, what was set forth therein was the substantial claim that PDB failed to comply with the requirements of R.A. No. 6552 on payment of cash surrender value,28 which already delves into the merits of PDB’s cause of action. In addition, Chandumal even appealed the RTC decision to the CA, an act which demonstrates her recognition of the trial court’s jurisdiction to render said judgment. Given Chandumal’s voluntary submission to the jurisdiction of the trial court, the RTC, Las Piñas City, Branch 255, had all authority to render its Decision dated May 31, 2004. The CA, therefore, erred in nullifying said RTC decision and dispensing with the resolution of the substantial issue raised herein, i.e., validity of the notarial rescission. Instead, however, of remanding this case to the CA, the Court will resolve the same considering that the records of the case are already before us and in order to avoid any further delay.
Yu vs. Pacleb, etc. G.R. No. 172172. February 24, 2009. Facts: Respondent Baltazar N. Pacleb and his late first wife, Angelita Chan, are the registered owners of a parcel of land, which became the subject of three (3) documents purporting to transfer its ownership. a Deed of Absolute Sale was entered into between Spouses Baltazar N. Pacleb and Angelita Chan and Rebecca Del Rosario. Subsequently, a Deed of Absolute Sale was entered into between Rebecca Del Rosario and Ruperto L. Javier (Javier), and thereafter a Contract to Sell was entered into between Javier and petitioner spouses Ernesto V. Yu and Elsie Ong Yu. Javier undertook to deliver possession of the Langcaan Property and to sign a deed of absolute sale within thirty (30) days from execution of the contract. All these aforementioned sales were not registered.
Petitioner spouses Yu filed with the Regional Trial Court a Complaint for specific performance and damages against Javier to compel the latter to deliver to them ownership and possession, as well as title to the subject property. In their Complaint, they alleged that Javier represented to them that the Langcaan Property was not tenanted. However, when they had already paid an initial payment, they discovered that the land was tenanted by one Ramon Pacleb. Thereafter, petitioner spouses and Javier verified from Ramon if he was willing to vacate the property and the latter was agreeable. Javier then promised to make arrangements with Ramon to vacate the property and to pay the latter his disturbance compensation. Hence, they proceeded to enter into a Contract to Sell canceling the Agreement mentioned. However, Javier failed to comply with his obligations. Javier did not appear in the proceedings and was declared in default. Judgment was eventually rendered against him by the RTC, and the same attained finality. Petitioner spouses and Ramon Pacleb and the latter’s wife, then executed an agreement whereby petitioner spouses paid Ramon the amount of P500,000 in exchange for the waiver of his tenancy rights over the property. Respondent filed a Complaint for annulment of deed of sale and other documents arising from it. He alleged that the deed of sale purportedly executed between him and his late first wife and Rebecca Del Rosario was spurious as their signatures thereon were forgeries. Respondent moved to have summons served upon Rebecca Del Rosario by publication since the latter’s address could not be found. The trial court, however, denied his motion. Respondent then moved to dismiss the case, and the trial court granted the motion dismissing the case without prejudice. Thereafter, on November 23, 1995, petitioner spouses filed an action for forcible entry against respondent with the Municipal Trial Court (MTC). They alleged that they had prior physical possession of the property through their trustee, Ramon, until the latter was ousted by respondent. MTC ruled in favor of petitioner spouses, which decision was affirmed by the Regional Trial Court. However, the Court of Appeals set aside the decisions of the lower courts and found that it was respondent who had prior physical possession of the property as shown by his payment of real estate taxes thereon. Respondent then filed the instant case for removal of cloud from title with damages of the subject property. Respondent alleged that the deed of sale between him and his late first wife and Rebecca Del Rosario, who is not known to them, could not have been possibly executed on the date appearing thereon. He alleged that on said date, he was residing in the United States and his late first wife, Angelita Chan, died twenty years ago.
During the pendency of the instant case before the trial court, respondent died without having testified on the merits of his case. Hence, he was substituted by his surviving spouse. Subsequently, trial court dismissed respondent’s case and held that petitioner spouses are purchasers in good faith. Further, the trial court held that the previous decision on petitioner spouses’ action for specific performance against Javier is already final and can no longer be altered. Accordingly, the trial court ordered the cancellation of the certificate of title of the property in the name of respondent and the issuance of a new title in the name of petitioner spouses. On appeal by respondent, the Court of Appeals reversed and set aside the decision of the trial court. The Court of Appeals ruled that petitioner spouses are not purchasers in good faith and that the previous decision did not transfer ownership of the property to them.
Issue: Whether or not ownership over the subject property was properly vested in petitioner spouses by virtue of the previous Decision in the specific performance case and such Decision is binding and conclusive to the property as well as to the respondents. Ruling: No. It has been held in an unbroken string of cases that an action for specific performance is an action in personam. It is well-settled that an action for specific performance praying for the execution of a deed of sale in connection with an undertaking in a contract, such as the contract to sell, in this instance, is an action in personam. The action for specific performance and damages filed by petitioner spouses against Javier is to compel performance of the latter’s undertakings under their Contract to Sell. As correctly held by the Court of Appeals, its object is to compel Javier to accept the full payment of the purchase price, and to execute a deed of absolute sale over the property in their favor. The obligations of Javier under the contract to sell attach to him alone, and do not burden the subject property. Being a judgment in personam, it is binding only upon the parties properly impleaded therein and duly heard or given an opportunity to be heard. Therefore, it cannot bind respondent since he was not a party therein. Neither can respondent be considered as privy thereto since his signature and that of his late first wife, Angelita Chan, were forged in the deed of sale.
GOODLAND COMPANY, INC., petitioner , vs. ASIA UNITED BANK, CHRISTINE T. CHAN, FLORANTE DEL MUNDO, ENGRACIO M. ESCASINAS, JR., in his official capacity as Clerk of Court & Ex-Officio Sheriff in the Regional Trial Court of Makati City, NORBERTO B. MAGSAJO, in his official capacity as Sheriff IV of the Regional Trial Court of Makati City, and RONALD A. ORTILE, in his official capacity as the Register of Deeds for Makati City, respondents . G.R. No. 195546. March 14, 2012. GOODLAND COMPANY, INC., petitioner , vs. ASIA UNITED BANK, ABRAHAM CO, ATTY. JOEL T. PELICANO AND THE REGISTER OF DEEDS OF MAKATI CITY, respondents . G.R. No. 195561. March 14, 2012. Facts: Sometime in July 1999, petitioner Goodland Company, Inc. (petitioner) mortgaged its two parcels of land situated in Sta. Rosa, Laguna and covered by Transfer Certificate of Title (TCT) Nos. 321672 and 321673 (“Laguna Properties”). The Third Party Real Estate Mortgage (REM) secured the loans extended by respondent Asia United Bank (“AUB”) to Radio Marine Network (Smartnet), Inc. (RMNSI), doing business as Smartnet Philippines, under the latter’s P250,000,000.00 Omnibus C redit Line with AUB.
In addition to the aforesaid collaterals, petitioner executed a Third Party REM over its 5,801-square meter property located at Pasong Tamo St., Makati City (“Makati Property”) covered by TCT No. 114645. The REMs, both signed by Gilbert G. Guy, President of Goodland Company, Inc., were duly registered by AUB with the Registry of Deeds for Calamba, Laguna and Registry of Deeds for Makati City, and annotated on the said titles. Subsequently, however, petitioner repudiated the REMs by claiming that AUB and its officers unlawfully filled up the blank mortgage forms and falsified the entries therein. The Laguna properties were the subject of two suits filed by petitioner to forestall their imminent foreclosure, and similar actions were likewise instituted by petitioner involving the Makati property which is the subject of the present case. However, the only subject of the present petition is the Makati Property. The Laguna Properties were the subject of separate petitions. Petitioner instituted two suits involving the Makati Property. The first suit filed by petitioner was an action for an annulment of the REM covering the Makati Property on the ground of its fraudulent and irregular execution and registration. (Civil Case No. 03-045). This action was filed before the Regional Trial Court (RTC), Branch 56 of Makati City. On the other hand, the second suit filed by petitioner prayed for injunctive relief and/or nullification of the extrajudicial foreclosure sale which petitioner alleged to be procedurally and legally defective. (Civil Case No. 06-1032). This action was filed before the RTC, Branch 145 of Makati City. The RTC (Branch 145) issued an Order denying petitioner’s application for the issuance of a writ of preliminary injunction, as well as respondents’ motion to dismiss based on forum shopping, non-payment of
correct docket fees and failure to state a cause of action. However, the court reserved the issuance of the corresponding order requiring petitioner to pay the appropriate docket fees after respondents shall have submitted what they believed should have been the correct computation thereof. On motion of respondents, Civil Case No. 06-1032 was consolidated with Civil Case No. 03-045. Prior to the consolidation, respondents moved to dismiss with prejudice the two cases on the grounds of forum shopping, and that no jurisdiction was acquired by the RTC in Civil Case No. 03-045 for failure to pay the proper docket and other legal fees. In a Joint Order, the RTC (Branch 56) dismissed with prejudice the complaints in both cases. Petitioner filed two separate motions for reconsideration, which the RTC likewise denied. Petitioner again filed separate appeals before the Court of Appeals (CA), which were docketed under only one case (CA-G.R. CV No. 90418). The appellate court sustained the dismissal made by trial court on the ground of forum shopping, but not on the ground of improper docket and other legal fees. Issue: Whether or not petitioner violated the rule against forum shopping. Ruling: Yes. For forum shopping can be said to exist, the following must concur: (1) identity of parties, or at least such parties as represent the same interests in both actions, (2) identity of rights asserted and relief prayed for, the relief being founded on the same facts, and (3) the identity of the two preceding particulars is such that any judgment rendered in the other action will, regardless of which party is successful, amount to res judicata in the action under consideration. The Court ruled that these elements are present in the instant case.
There is identity of parties in the instant case notwithstanding that in the first case (Civil Case No. 03045), only one bank officer (Co), the notary public (Pelicano) and the Register of Deeds were impleaded along with AUB as defendants, whereas in the second case (Civil Case No. 06-1032), AUB and its two officers (Chan and Del Mundo), along with the RTC Clerk of Court (Escasinas, Jr.), Sheriff (Magsajo) and the Register of Deeds of Makati City (Ortile) were the named defendants. The parties in both cases are substantially the same as they represent the same interests and offices/positions, and who were impleaded in their respective capacities with corresponding liabilities/duties under the claims asserted. The prayer for relief in the two cases was based on the same attendant facts in the execution of REMs over petitioner’s properties in favor of AUB. While the extrajudicial foreclosure of mortgage, consolidation of ownership in AUB and issuance of title in the latter’s name were set forth only in the se cond case (Civil Case No. 06-1032), these were simply the expected consequences of the REM transaction in the first case (Civil Case No. 03-045). These eventualities are precisely what petitioner sought to avert when it filed the first case. Undeniably then, the injunctive relief sought against the extrajudicial foreclosure, as well as the cancellation of the new title in the name of the creditor-mortgagee AUB, were all premised on the alleged nullity of the REM due to its allegedly fraudulent and irregular execution and registration — the same facts set forth in the first case. In both cases, petitioner asserted its right as owner of the property subject of the REM, while AUB invoked the rights of a foreclosing creditor-mortgagee. With respect to identity of cause of action, a cause of action is defined in Section 2, Rule 2 of the Rules of Court as the act or omission by which a party violates the right of another. The Court made reference to the test in determining whether or not the causes of action in the first and second cases are identical, to wit: would the same evidence support and establish both the present and former cause of action? If so, the former recovery is a bar; if otherwise, it does not stand in the way of the former action. In the first case, petitioner alleged the fraudulent and irregular execution and registration of the REM which violated its right as owner who did not consent thereto, while in the second case petitioner cited further violation of its right as owner when AUB foreclosed the property, consolidated its ownership and obtained a
new TCT in its name. Considering that the aforesaid violations of petitioner’s right as owner in the two cases both hinge on the binding effect of the REM, i.e., both cases will rise or fall on the issue of the validity of the REM, it follows that the same evidence will support and establish the first and second causes of action. The procedural infirmities or non-compliance with legal requirements for extrajudicial foreclosure raised in the second case were but additional grounds in support of the injunctive relief sought against the foreclosure which was, in the first place, illegal on account of the mortgage contract’s nullity. Evidently, petitioner never relied solely on the alleged procedural irregularities in the extrajudicial foreclosure when it sought the reliefs in the second case.
Lastly, Under Sec. 7, Rule 5 of the Rules of Court: The plaintiff is required under oath to certify, among others, his undertaking to report to the court the fact of filing of a similar case, failing which shall be cause for the dismissal of the case, to wit: “(c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed. …non-compliance with any of the undertakings therein shall constitute indirect contempt of court, without prejudice to the corresponding administrative and criminal actions. If the acts of the party or his counsel clearly constitute willful and deliberate forum shopping, the same shall be ground for summary dismissal with prejudice and shall constitute direct contempt, as well as a cause for administrative sanctions.”
The Court ruled that petitioner’s act of forum shopping was deliberate and malicious considering that it knowingly filed Civil Case No. 06-1032 despite the pendency of Civil Case No. 03-045. This being the case, the act of petitioner is punishable by and results in the summary dismissal of the actions filed. Both Civil Case No. 03-045 and Civil Case No. 06-1032 are therefore correctly dismissed with prejudice.
Imelda Relucio vs. Angelina Mejia Lopez Facts: Private respondent Angelina Mejia Lopez filed a petition for APPOINTMENT AS SOLE ADMINISTRATRIX OF CONJUGAL PARTNERSHIP OF PROPERTIES, FORFEITURE, ETC., against defendant Alberto Lopez and petitioner Imelda Relucioin a special proceeding. In the petition, privaterespondent alleged that sometime in 1968, defendant Lopez, who is legally married to the private respondent, abandoned the latter and their four legitimate children; that he arrogated unto himself full and exclusive control and administration of the conjugal properties, spending and using the same for his sole gain and benefit to the total exclusion of the private respondent and their four children; that defendant Lopez, after abandoning his family, maintained an illicit relationship and cohabited with herein petitioner since 1976.
It was further alleged that defendant Lopez and petitioner Relucio, during their period of cohabitation since 1976, have amassed a fortune consisting mainly of stockholdings in Lopez-owned or controlled corporations, residential, agricultural, commercial lots, houses, apartments and buildings, cars and other motor vehicles, bank accounts and jewelry. In order to avoid defendant Lopez obligations as a father and husband, he excluded the private respondent and their four children from sharing or benefiting from the conjugal properties and the income or fruits therefrom. He placed substantial portions of these conjugal properties in the name of petitioner Relucio. On December 8, 1993, a Motion to Dismiss the Petition was filed by herein petitioner on the ground that private respondent has no cause of action against her. An Order dated February 10, 1994 was issued by the judge denying petitioner Relucio’s Motion to Dismiss on the ground that she is impleaded as a necessary or indispensable party because some of the subject properties are registered in her name and defendant Lopez, or solely in her name. Issues: (1) Whether respondents petition for appointment as sole administratrix of the conjugal property, accounting, etc. against her husband Alberto J. Lopez established a cause of action against petitioner.
(2) Whether petitioner’s inclusion as party defendant is essential in the proceedings for a complete adjudication of the controversy. Ruling: (1) No, the complaint is by an aggrieved wife against her husband.Nowhere in the allegations does it appear that relief is sought against petitioner. Respondent’s causes of action were all against her husband.
The first cause of action is for judicial appointment of respondent as administratrix of the conjugal partnership or absolute community property arising from her marriage to Alberto J. Lopez. Petitioner is a complete stranger to this cause of action. Article 128 of the Family Code refers only to spouses. Art 128: “If a spouse without just cause abandons the other or fails to comply with his or her obligations to the family, the aggrieved spouse may petition the court for receivership, for judicial separation of property, or for authority to be the sole administrator of the conjugal partnership property xxx”
Respondent alleges that Alberto J. Lopez is her husband. Therefore, her first cause of action is against Alberto J. Lopez. There is no right-duty relation between petitioner and respondent that can possibly support a cause of action. The second cause of action is for an accounting by respondent husband. The accounting of conjugal partnership arises from or is an incident of marriage. Petitioner has nothing to do with the marriage between respondent Alberto J. Lopez. Hence, no cause of action can exist against petitioner on this ground. The third cause of action is essentially for forfeiture of Alberto J. Lopez share in property co-owned by him and petitioner. It does not involve the issue of validity of the co-ownership between Alberto J. Lopez and petitioner. The issue is whether there is basis in law to forfeit Alberto J. Lopez share.Respondents asserted right to forfeit extends to Alberto J. Lopez share alone, such cause of action, however, pertains to Alberto J. Lopez, not petitioner.The respondent also sought support. Support cannot be compelled from a stranger. (2) No, petitioner would not be affected by any judgment in Special Proceeding. If petitioner is not a real party in interest, she cannot be an indispensable party. An indispensable party is one without whom there can be no final determination of an action. Petitioner’s participation in Special Proceeding is not indispensable.The trial court can issue a judgment ordering Alberto J. Lopez to make an accounting of his conjugal partnership with respondent, and give support to respondent and their children, and dissolve Alberto J. Lopez conjugal partnership with respondent, and forfeit Alberto J. Lopez share in property co-owned by him and petitioner. Such judgment would be perfectly valid and enforceable only against Alberto J. Lopez. In the context of her petition in the lower court, respondent would be accorded complete relief if Alberto J. Lopez were ordered to account for his alleged conjugal partnership property with respondent, give support to respondent and her children, turn over his share in the co-ownership with petitioner and dissolve his conjugal partnership or absolute community property with respondent. Petitioner is not a necessary party because her cause of action is against her husband, not the petitioner.
JUANA COMPLEX I HOMEOWNERS ASSOCIATION, ET. AL., Petitioner vs. FIL-ESTATE LAND INC., ET. AL., Respondent G.R. NO. 152272. MARCH 5, 2012. Facts: Juana Complex I together with its individual residents and other neighboring subdivisions instituted a complaint for damages as a class suit representing the regular commuters and motorists of Juana Complex I (Juana) and neighboring subdivisions who were deprived of the use of La Paz Road (Road) , against Fil-Estate (Fil-Estate). The complaint alleged that Juana et.al. were regular commuters and motorists who constantly travelled Road for more than ten years until Fil-Estate excavated and permanently closed the Road.
Juana prayed for the immediate issuance of a Temporary Restraining Order (TRO) or a writ of preliminary injunction (WPI) to enjoin Fil-Estate from stopping and intimidating them in their use of the Roas. A TRO was issued ordering Fil-Estate for 20 days to stop preventing or harassing Juana from using the Road. The Regional Trial Court (RTC) conducted several hearings to determine the propriety of the issuance of WPI. Fil-Estate filed a Motion to Dismiss arguing that complaint failed to state a cause of action and that it was improperly files as a class suit. RTC granted WPI thus Fil-Estate filed a Motion for Reconsideration. RTC then issued Omnibus Order denying both Motion to Dismiss and Motion for Reconsideration file by Fil-Estate. Not satisfied, Fil-Estate filed a petition foe certiorari and prohibit before the Court of Appeals (CA) to annul the Order and Omnibus Order issued by RTC contending that Juana failed to state a cause of action, improperly filed class suit and failed to show that Juana had a clear and unmistakable right to the use of the Road since Road was a Torrens registered private road and there was neither a voluntary nor legal easement constituted over it. CA partially granted petition on the merit of the last contention. Hence, this petition for review. Issues: (1) Whether or not the complaint states a cause of action;
(2) Whether the complaint has been properly properl y filed as a class suit; (3) Whether or not a WPI is warranted. Ruling: (1) Yes, the complaint states a cause of action. Whether the complaint states a cause of action is determined by its averments regarding the acts committed by the defendant. Thus, contains a concise statement of the ultimate or essential facts constituting plaintiff’s cause of action. First, Juana’s averments show a demandable right over Road. Second, there is an alleged violation of such right by Fil-Estate when they excavated and prevented Juana from using it. Third, Juana consequently suffered injury.
(2) Yes, the complaint has been properly filed as a class suit. The necessary elements of a class suit are present in this case namely: common interest, numerous parties affected and sufficient number of parties bringing the class suit. The suit is clearly one that benefits all commuters and motorists who use the Road. (3) No, the WPI is not warranted. A WPI under Sec. 3, Rule 58 is available to prevent a threatened or continuous irremediable injury to parties before their claims can be thoroughly studied and adjudicated. The requisites for its issuance are (1) existence of clear and unmistakable right that must be protected and (2) an urgent and paramount necessity for the writ to prevent serious damage. Juana failed to establish a prima facie
proof of violation of their right to justify issuance of WPI. Their right to use the Road R oad is disputable since Juana has no clear legal right therein. Juana merely anchor their purported right over the Road on the bare allegation that they use the Road for more than ten yeas. A mere allegation does not meet the standard of proof that would warrant issuance of WPI.
Misamis Occidental II Cooperatives, Inc. Vs Virgilio S. David. G.R. No. 129928. August 25,2005. Facts: Private respondent Virgilio S. David, a supplier of electrical hardware, filed a case for specific performance and damages against MOELCI II, a rural electric cooperative in Misamis Occidental. The case was essentially a collection suit, predicated on a document attached as Annex A to the Amended Complaint that according to David is the contract pursuant to which he sold to MOELCI II one unit of 10 MVA Transformer.
MOELCI II filed its Answer to Amended Complaint, affirmative defenses which constitutes grounds for dismissal. These grounds were lack of cause of action, there being allegedly no enforceable contract between the parties under the Statute of Frauds and improper venue. MOELCI II in essence argued that the document attached as Annex A was only a quotation letter and not a contract as alleged by David. Thus, it contends that David`s Amended Complaint is dismissible for failure to state a cause of action. David contended in the main that because a motion to dismiss on the ground of failure to state a cause of action is required to be based only on the allegations of the complaint, the “quotation letter”, being merely an attachment to the complaint and not part of its allegations, cannot be inquired into. MOELCI II filed a rejoinder to the opposition in which it asserted that a complaint cannot be separated from its annexes; hence the trial court in resolving a motion to dismiss on the ground of failure to state a cause of action must consider the complaint`s annexes. The RTC, issued an order denying MOELCI II`s motion for preliminary hearing of affirmative defenses. The Court of Appeals dismissed MOELCI II`s petition holding that the allegations in David`s complaint constitutes a cause of action. Petitioner is now before the Supreme Court seeking a review of the appelate court`s pronouncements, MOELCI II asserts that the Court of Appeals committed serious error in: 1) ruling that the resolution of its motion to dismiss on the ground for lack of cause of action necessitated hearing by the trial court with the end in view of determining whether or not the document attached as Annex A to the Amended Complaint is a contract as alleged in the body of the pleading; and 2) not ordering the trial court to dismiss the amended complaint on the lack of cause of action. Issue: Whether the Court of Appeals erred in dismissing the petition for certiorari and in holding that the trial court did not commit grave abuse of discretion in denying petitioner`s Motion. Ruling: There is no error in the ruling of the Court of Appeals.
Under the old Rules of Court a preliminary hearing permitted under Section 5, Rule 16, is not a mandatory even when the same is prayed for. It rests largely on the sound dicretion of the court. Such interpretation is now specifically expressed in the 1997 Rules of Civil Procedure. Section 6, Rule 16 provides that a grant of preliminary hearing rests on the sound discretion of the court.
Moreover, as MOELCI II`s Motion is anchored on the ground that the Complaint allegedly stated no cause of action, a preliminary hearing thereon is more than unnecessary as it constitutes an erroneous and improvident move. No error therefore could be ascribed asc ribed to the trial court in the denial of such Motion. To determine the existence of a cause of action, ony the statements in the complaint may be properly considered. It is error for the court to take cognizance of external facts of hold preliminary hearing to determine their existence. If the allegations in a complaint furnish sufficient basis by which the complaint can be maintained, the same should not be dismissed regardless of the defenses that may be averred by the defendants. The test of sufficiency of facts alleged in the complaint as constituting a cause of action is whether or not admitting the facts alleged, the court could render a valid verdict in accordance with the prayer of said complaint. It has been hypothetically admitted that the parties had entered into a contract sale, David bound himself to supply petitioner 1 unit of MVA Power transformer plus 69 KV Line Accessories; that despite written and verbal demands, petitioner has failed to pay the price thereof. Contrary to MOELCI II`s assertion, Annex A is not an “undisguied quotation letter”. While Annex A is captioned as such, the presence of the signatures of both the General Manager and the Chairman of the Committee of Management immediately below the word “CONFORME” appearing on the document`s last page lends credulity to David`s contention that there was, or o r might have hav e been, a meeting of minds on the terms embodied therein. Thus, the appendage of Annex A does not entirely serve to snuff out David`s claim.
Finally, we do not agree with MOELCI II`s contention that the Court of Appeals sanctioned the trial court`s deferment of the resolution of MOELCI II`s Motion. The trial court squarely denied the Motion and not merely deferred its resolution. Thus, there is no deferment to speak of that should be enjoined.
PNB vs. GATEWAY PROPERTY HOLDINGS, INC. G.R. No. 181485. FEBRUARY 15, 2012. Facts: Respondent GPHI was a subsidiary company of Gateway Electronics Company (GEC). GEC obtained long term loans from the Land Bank of the Philippines (LBP) in the amount of P600 million and the loans were secured by mortgages executed by GEC over its properties.LBP invited other banks to lend money to GEC. It is alleged that LBP agreed to submit the mortgaged properties to it by GEC as part of the latters assets that will be covered by a Mortgage Trust Indenture (MTI), ensuring that all participating banks in the loan syndicate will have equal security position. LBP and a consortium of banks entered into a Memorandum of Understanding (MOU), whereby LBP agreed to release the mortgaged properties to the consortium of banks on the basis of an MTI. The participating banks released funds in favor of GEC. Petitioner PNB became part of this consortium of creditor banks.
GEC then requested PNB to convert its long-term loans into a Convertible Omnibus Credit Line due to its difficulty in paying its obligation. PNB approved such a conversion subject to certain conditions- GPHI was made a co-borrower in the agreement and was obligated to execute in favor of PNB a real estate mortgage over two parcels of land.GEC filed a complaint for specific performance against LBP due to the latter’s refusal to share the mortgaged properties with the consortium of creditor banks. PNB demanded payment from GEC and when the latter discovered the former’s intent to foreclose the REM, it prayed that a (TRO) be issued to enjoin PNB from foreclosing on the properties of GPHI and judgment be issued declaring that the real estate mortgage involving the properties of GPHI and executed in favor of PNB is null and void. GPHI contended that the understanding between GEC and PNB is that the GPHI properties would stand merely as a temporary security pending the outcome of case filed by GEC against LBP.
Since no TRO was issued by the Court, PNB was able to foreclosed the mortgaged properties. Thereafter, GPHI filed a Petition for Annulment of Foreclosure of Mortgage. GPHI argued that, in conducting the foreclosure proceedings, the sheriff failed to observe the requirement of Section 4 of Act No. 3135 that the sale shall be made at public auction. RTC dismissed the case and ruled that both the civil cases involved the same parties, substantially identical causes of action and reliefs prayed for, the reliefs being founded on the same facts. Where a single cause of action has been split and pursuant to Rule 16, Section 1(e) of the 1997 Rules on Civil Procedure, the Motion to Dismiss filed by PNB, on the ground that there is another action pending between the same parties for the same cause, or litis pendentia is proper. On appeal, the CA set aside the decision of the RTC and ruled that the third requisite of litis pendentia (the identity in the two cases should be such that the judgment that may be rendered in one would, regardless of which party is successful, amount to res adjudicata to the other) is not present Issue: Whether or not the requisites of litis pendentia exist to warrant the d ismissal of Civil Case for Annulment of the Foreclosure Sale.
Ruling: Yes. All the requisites of litis pendentia exist.
There is litis pendentia if the following requisites are present: (a) identity of parties, or at least such parties as represent the same interests in both actions; (b) identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) the identity of the two preceding particulars is such that any judgment rendered in the other action, will, regardless of which party i s successful, amount to res judicata in the action under consideration. As to the first requisite, GPHI is the plaintiff in both civil cases while PNB is the party against whom GPHI is asserting a claim. As to the second requisite, allegations in Civil for Annulment of the Real Estate Mortgage and Annulment of the Foreclosure Sale reveal that the said cases invoke the same fundamental issue which is the temporary nature of the security that was to be provided by the mortgaged properties of GPHI. As to the third requisite, While the appeal of the dismissal of Annulment of the Foreclosure Sale was still pending with the Court of Appeals, GPHI filed on a Motion for Leave to Amend Complaint to Conform to the Evidence in Civil Case Annulment of the Real Estate Mortgage. GPHI stated therein that after the parties presented their evidence, the fact of foreclosure and the acquisition of the mortgaged properties by PNB were duly established. In the accompanying Amended Complaint in Annulment of the Real Estate Mortgage, GPHI prayed, for the declaration of the nullity of the foreclosure and auction sale of the mortgaged properties. As a consequence of such an action, the two cases that GPHI filed before the court a quo henceforth contained an identity of rights asserted and reliefs prayed for, the relief being founded on the same factual allegations.
JOVITO R. SALONGA vs. WARNER, BARNES AND CO., LTD. G.R. No. L-2246. January 31, 1951. Facts: Westchester Fire Insurance Company of New York entered into a contract with Tina J. Gamboa whereby said company insured one case of rayon yardage which said Tina J. Gamboa shipped from San Francisco, California to Manila, Philippines and consigned to Jovito Salonga, plaintiff herein. According to the contract of insurance, the insurance company undertook to pay to the sender or her consignee the damages that may be caused to the goods shipped subject to the condition that the liability of the company will be limited to the actual loss which the insured may suffer not to the exceed the sum of P2,000. The ship arrived in Manila, and the shipment was later on examined by C. B. Nelson and Co., marine surveyors, at the request of the plaintiff, and in their examination the surveyors found a shortage in the shipment in the amount of P1,723,12.
Plaintiff filed a claim for damages in the amount of P1,723.12 against the American President Lines, agents of the ship, demanding settlement, and when no action was taken on this claim, plaintiff demanded payment thereof from Warner, Barnes and Co., Ltd., as agent of the insurance company in the Philippines, and this agent having refused to pay the claim, plaintiff instituted the present action. After trial, at which both parties presented their respective eviden ce, the court rendered judgment against Jovito Salonga. The motion for reconsideration filed by the defendant having been denied, the case was appealed to this court. Issue: Whether or not the trial court erred in holding that defendant, as agent of Westchester Fire Insurance Company of New York, United States of America, is responsible upon the insurance claim subject to the suit. Ruling: Yes.
1. Defendant has no contractual relation with either plaintiff or his consignor It is a well known rule that a contractual obligation or liability, or an action ex-contractu, must be founded upon a contract, oral or written, either express or implied. This is axiomatic. If there is no contract, there is no corresponding liability, and no cause of action may arise therefrom. This is what is provided for in article 1257 of the Civil Code. This article provides that contracts are binding upon the parties who make them and their heirs, excepting, with respect to the latter, where the rights and obligations are not transmissible, and when the contract contains a stipulation in favor of a third person, he may demand its fulfillment if he gives notice of his acceptance before it is revoked. Warner, Barnes and Co., as principal or agent, did not make any contract, either oral or written, with the plaintiff. The contracts were made between the respective insurance companies and the insured, and were made by the insurance companies, through Warner, Barnes and Co., as their agent. The defendant has not taken part, directly or indirectly, in the contract in question. The evidence shows that the defendant did not enter into any contract either with the plaintiff or his consignor — Tina J. Gamboa.
The contract of marine insurance was made and executed only by and between the Westchester Fire Insurance Company of New York and Tina J. Gamboa. The contract was entered in New York. There is nothing therein which may affect, in favor or adversely, the defendant, the fulfillment of which may be demanded by or against it. That contract is purely bilateral, binding only upon Gamboa and the insurance company. When the lower court, therefore, imposed upon the defendant an obligation which it has never assumed, either expressly or impliedly, or when it extended to the defendant the effects of a contract which was entered into exclusively by and between the Westchester Fire Insurance Company of New York and Tina J. Gamboa, the error it has committed is evident. This is contrary to law.
2. Defendant is not a real party in interest in this case. NO. Section 2, Rule 3 of the Rules of Court requires that "every action must be prosecuted in the name of the real party in interest." In the case at bar, the defendant issued upon in its capacity as agent of Westchester Fire Insurance Company of New York in spite of the fact that the insurance contract has not been signed by it. As aforementioned, the defendant did not assume any obligation thereunder either as agent or as a principal. It cannot, therefore, be made liable under said contract, and hence it can be said that this case was filed against one who is not the real party in interest. The court further held that the action should have been filed against its principal, the Westchester Fire Insurance Company of New York. 3. Defendant is a settlement and adjustment agent of the foreign insurance company (agency). As such agent it has the authority to settle all the losses and claims that may arise under the policies that may be issued by or in behalf of said company in accordance with the instructions it may receive from time to time from its principal. An adjustment and settlement agent is no different from any other agent from the point of view of his responsibility, for he also acts in a representative capacity. Whenever he adjusts or settles a claim, he does it in behalf of his principal, and his action is binding not upon himself but upon his principal, and the scope and extent of the functions of an adjustment and settlement agent do not include personal liability. His functions are merely to settle and adjust claims in behalf of his principal if those claims are proven and undisputed, and if the claim is disputed or is disapproved by the principal, like in the instant case, the agent does not assume any personal liability. The recourse of the insured is to press his claim against the principal. An insurance adjuster is ordinarily a special agent for the person or company for whom he acts, and his authority is prima facie coextensive with the business intrusted to him. . . An adjuster does not discharge functions of a quasi-judicial nature, but represents his employer, to whom he owes faithful service, and for his acts, in the employer's interest, the employer is responsible so long as the acts are done while the agent is acting within the scope of his employment. (45 C. J. S., 1338-1340.) 4. A judgment for or against an agent in no way binds the real party in interest. If the party sued upon is not the proper party, any decision that may be rendered against him would be futile, for it cannot be enforced or executed. The effort that may be employed will be wasted. Such would be the result of this case if it will be allowed to proceed against the defendant, for even if a favorable judgment is obtained against it, it cannot be enforced because the real party is not involved. The defendant cannot be made to pay for something it is not responsible.
The court stated that the correct remedy would be for the Plaintiff to bring the principal into this case or make it come under the courts in this jurisdiction in accordance with the procedure indicated in section 14, Rule 7, of the Rules of Court concerning litigations involving foreign corporations. This rule says that if the defendant is a foreign corporation and it has not designated an agent in the Philippines on whom service may be made in case of litigation, such service may be made on any agent it may have in the Philippines. The Westchester Fire Insurance Company of new York comes within the import of this rule for even if it has not designated an agent as required by law, it has however a settling agent who may serve the purpose. In other words, an action may be brought against said insurance company in the Philippines and the process may be served on the defendant to give our courts the necessary jurisdiction.
HON. CARLOS O. FORTICH, et. al v. HON. RENATO C. CORONA G.R. No. 131457. April 24, 1998. Facts: This case involves a 144-hectare land located at San Vicente, Sumilao, Bukidnon, owned by the Norberto Quisumbing, Sr. Management and Development Corporation, one of the petitioners. The property is covered by TCT No. 14371 of the Registry of Deeds of the Province of Bukidnon. Said land was leased as a pineapple plantation to the Philippine Packing Corporation, now Del Monte Philippines, Inc. for a period of 10 years under the Crop Producer and Growers Agreement duly annotated in the certificate of title. The lease expired in April, 1994.
However, during the existence of the lease, DAR placed the entire 144-hectare property under compulsory acquisition and assessed the land value at P2.38 million. NQSRMDC resisted the DAR’s action. A writ of prohibition with preliminary injunction was granted by the DAR Adjudication Board, ordering the DAR Region X Director, the Provincial Agrarian Reform Officer, the Municipal Agrarian Reform Office of Sumilao, Bukidnon, the Land Bank of the Philippines, and their authorized representatives to desist from pursuing any activity or activities concerning the subject land until further orders.
Despite the order, DAR Regional Director issued a memorandum directing the Land Bank to open a trust account for P2.38 million in the name of NQSRMDC and to conduct summary proceedings to determine the just compensation of the subject property. NQSRMDC objected to these moves and filed an Omnibus Motion to enforce the DARAB order and to nullify the summary proceedings undertaken by the DAR Regional Director and Land Bank on the valuation of the subject property. DARAB acted favorably on the Omnibus Motion by a ordering the DAR Regional Director and Land Bank to seriously comply with the terms of the order; nullifying the DAR Regional Directors memorandum and the summary proceedings conducted pursuant thereto; and directing the Land Bank to return the claim folder of Petitioner NQSRMDCs subject property to the DAR until further orders. Land Bank complied with the DARAB order. In the meantime, the Provincial Development Council of Bukidnon, headed by Governor Carlos O. Fortich, passed Resolution No. 6, designating certain areas along Bukidnon-Sayre Highway as part of the Bukidnon Agro-Industrial Zones where the subject property is situated. Pursuant to Section 20 of R.A. No. 7160 (LGC), the Sangguniang Bayan of Sumilao, Bukidnon, enacted Ordinance No. 24 converting or re-classifying 144 hectares of land in Brgy. San Vicente, said Municipality, from agricultural to industrial/institutional with a view of providing an opportunity to attract investors who can inject new economic vitality, provide more jobs and raise the income of its people. Bukidnon Provincial Board expressed its support for the proposed project on the basis of a Joint Committee Report submitted by its Committee on Laws, Committee on Agrarian Reform and Socio-Economic Committee.
The NQSRMDC Proposal was adopted by the DTI, Bukidnon Provincial Office, as one of its flagship projects. The same was likewise favorably recommended by the Provincial Development Council of Bukidnon; the municipal, provincial and regional office of the DAR; the Regional Office of the DENR; the Executive Director, signing By Authority of PAUL G. DOMINGUEZ, Office of the President Mindanao; the Secretary of DILG; and Undersecretary of DECS Wilfredo D. Clemente. In the same vein, the National Irrigation Administration Bukidnon and Kisolon-San Vicente Irrigators Multi-Purpose Cooperative interposed NO OBJECTION to the proposed conversion as long as the development cost of the irrigation systems thereat which is P2,377.00 per hectare be replenished by the developer and also it will provide more economic benefits to the community in terms of outside investments that will come and employment opportunities that will be generated by the projects to be put up. Notwithstanding the foregoing favorable recommendation, however, DAR Secretary Garilao issued an Order denying the instant application for the conversion of the subject land from agricultural to agro-industrial and, instead, placed the same under the compulsory coverage of CARP and directed the distribution thereof to all qualified beneficiaries. A Motion for Reconsideration of the aforesaid Order was filed but was denied. Thus, the DAR Secretary ordered the DAR Regional Director to proceed with the compulsory acquisition and distribution of the property. Governor Fortich appealed he order of denial to the Office of the President and prayed for the conversion/reclassification of the subject land as the same would be more beneficial to the people of Bukidnon. To prevent the enforcement of the DAR Secretary’s order, NQSRMDC filed with the Court of Appeals a petition for certiorari, prohibition with preliminary injunction. CA issued a Resolution, ordering the parties to observe status quo pending resolution of the petition.
In resolving the appeal, the Office of the President, through then Executive Secretary Ruben D. Torres, issued a Decision, reversing the DAR Secretary’s decision. DAR filed a motion for reconsideration of the OP decision, however, it was denied for having been filed beyond the reglementary period of 15 days. The said order further declared that the OP decision had already become final and executory. Subsequently, some alleged farmer-beneficiaries staged a strike in front of the DAR compound in Quezon City on October 9, 1997, protesting the Decision of the Office of the President, issued through then Executive Secretary Ruben D. Torres, which approved the conversion of a 144-hectare land from agricultural to agro-industrial/institutional area. This led the Office of the President, through then Deputy Executive Secretary Renato C. Corona, to issue the so-called Win-Win Resolution on November 7, 1997, substantially modifying its earlier Decision after it had already become final and executory. The said Resolution modified the approval of the land conversion to agro-industrial area only to the extent of 44 hectares, and ordered the remaining 100 hectares to be distributed to qualified farmer-beneficiaries. Strikers urged the Court to annul and set aside the Win-Win Resolution and to enjoin respondent Secretary Ernesto D. Garilao of the DAR from implementing the said Resolution. Gov. Fortich et. al. filed the present petition for certiorari, prohibition under Rule 65 and injunction with urgent prayer for a temporary restraining order and/or writ of preliminary injunction under Rule 58 against then Deputy Executive Secretary Renato C. Corona and DAR Secretary Ernesto D. Garilao.
A Motion For Leave To Intervene was filed by alleged farmer-beneficiaries claiming that they are real parties in interest as they were previously identified by respondent DAR as agrarian reform beneficiaries on the 144-hectare property subject of this case. The motion was opposed by the petitioners. In seeking the nullification of the Win-Win Resolution, the petitioners claim that the Office of the President was prompted to issue the said resolution after a very well-managed hunger strike led by fake farmer beneficiary Linda Ligmon succeeded in pressuring and/or politically blackmailing the Office of the President to come up with this purely political decision to appease the farmers, by reviving and modifying the Decision of 29 March 1996 which has been declared final and executory in an Order. Thus, petitioners further allege, respondent then Deputy Executive Secretary Renato C. Corona committed grave abuse of discretion and acted beyond his jurisdiction when he issued the questioned Resolution of 7. Issues: (1) Whether or not an error of jurisdiction not an error of judgment which is reviewable by an appeal under Rule 43.
(2) Whether or not the petitioners committed a forum-shopping. Ruling: (1) No. It is true that under Rule 43, appeals from awards, judgments, final orders or resolutions of any quasi-judicial agency exercising quasi-judicial functions, including the Office of the President, may be taken to the Court of Appeals by filing a verified petition for review within 15 days from notice of the said judgment, final order or resolution, whether the appeal involves questions of fact, of law, or mixed questions of fact and law.
However, the remedy prescribed in Rule 43 is inapplicable considering that the present petition contains an allegation that the challenged resolution is patently illegaland was issued with grave abuse of discretion and beyond his jurisdiction= when said resolution substantially modified the earlier OP Decision which had long become final and executory. Thus, the appropriate remedy to annul and set aside the assailed resolution is an original special civil action for certiorari under Rule 65, as what the petitioners have correctly done.The office of a writ of certiorari is restricted to truly extraordinary cases cases in which the act of the lower court or quasi-judicial body is wholly void. Section 1 of Rule 65 mandates that the person aggrieved by the assailed illegal act may file a verified petition for certiorari in the proper court. The proper cou rt where the petition must be filed is stated in Section 4 of Rule 65 provides that the Supreme Court, Court of Appeals and Regional Trial Court have original concurrent jurisdiction to issue a writ of certiorari, prohibitionand mandamus. But the jurisdiction of these three courts are also delineated in that, if the challenged act relates to acts or omissions of a lower court or of a corporation, board, officer or person, the petition must be filed with the Regional Trial Court which exercises jurisdiction over the territorial area as defined by the Supreme Court. And if it involves the act or omission of a quasi-judicial agency, the petition shall be filed only with the Court of Appeals, unless otherwise provided by law or the Rules of Court. But the Supreme Court has the full discretionary power to take cognizance of the petition filed directly to it if compelling reasons, or the nature and importance of the issues raised, warrant. (2) No. There is forum-shopping whenever, as a result of an adverse opinion in one forum, a party seeks a favorable opinion (other than by appeal or certiorari) in another. The principle applies not only with respect to suits filed in the courts but also in connection with litigation commenced in the courts while an administrative proceeding is pending, as in this case, in order to defeat administrative processes and in anticipation of an
unfavorable administrative ruling and a favorable court ruling. This specially so, as in this case, where the court in which the second suit was brought, has no jurisdiction It is clear from the above-quoted rule that the petitioners are not guilty of forum shopping. The test for determining whether a party has violated the rule against forum shopping is where a final judgment in one case will amount to res adjudicata in the action under consideration. A cursory examination of the cases filed by the petitioners does not show that the said cases are similar with each other. The petition for certiorari in the Court of Appeals sought the nullification of the DAR Secretarys order to proceed with the compulsory acquisition and distribution of the subject property. Samaniego, et al. v. Aguila, et al. GR No. 125567. June 27, 2000. Facts: Petitioners are tenants in a landholding owned by respondents’ mother with an aggregate area of 10.4496 hectares in Patul, Santiago, Isabela.The subject land was identified by the DAR-Region 2 as covered by the Operation Land Transfer Program of the government. After sometime, respondent’s mother on their behalf filed a petition for exemption from the coverage of PD 27 (Land Reform Program). Thus, petitioners opposed the application for respondents’ mother transferred the title of the lands to respondents in violation of the rules and regulations of the DAR.
The Regional Director granted the application for exemption. The decision was affirmed on appeal to the DAR, which was reversed by the same on motion of the petitioners. Thus, DAR denied the application for exemption and declared petitioners as rightful farmer-beneficiaries of the land.Respondents appealed to the Office of the President which set aside the decision of the DAR and reinstated DAR’s prior decision. On appeal in the CA, the petition was dismissed for failure to implead the Office of the President (OP) as an indispensable party (as the one whose decision and resolution is being questioned). Joinder of indispensable parties is mandatory. Failure to implead the OP was fatal and the petition must be dismissed. Issue: Whether or not the OP was an indispensable party and had to be impleaded. Ruling: No. At the time the petitioners brought the case to the CA, the rule on appeals to the said court from quasi- judicial agencies was that, “petition for review shall (a) state the full names of the parties, without impleading the court or agencies either as petitioners or respondents.”
Also, the CA was not an indispensable party or a party in interest without whom no final determination can be had of an action without being impleaded. Indispensable parties are those with such an interest in the matter that a final decree would necessarily affect their rights and the court cannot proceed without their presence. The word “interest” in this rule should be material, directly in issue and to be affected by the decree, as distinguished from a mere incidental interest in the question involved, as opposed to a nominal or pro forma party who is joined as a plaintiff or defendant, not because such party has any real interest in the subject matter or because any relief is demanded, but merely because the technical rules of pleadings require the presence of such party on the record. Thus, the OP not having any interest in the case except to entertain appeals from the DAR, is not an indispensable party.CA was ordered to decide on the matter.
Theodore and Nancy Ang, etc. v. Spouses Alan and Em Ang. G.R. No. 186993. August 22, 2012. Facts: Spouses Alan and Em Ang, the respondents, obtained a loan worth $300,000 from Theodore and Nancy Ang, the petitioners. When the loan became demandable, respondent spouses executed a Promissory Note promising to pay the loan and 10% annual interest on demand. Petitioners made several demands but respondents failed to pay, their obligation amounting to $719, 627.21 inclusive of the 10% interest. Theodore and Nancy Ang, the petitioners, were residing in Los Angeles, California. They executed a Special Power of Attorney in favor of one Atty. Eldrige Marvin Aceron in order for him to file an action against the respondent spouses. Atty. Aceron filed a complaint for the collection of a sum of money with the RTC of Quezon City, his residence. The respondent spouses moved to dismiss, on the ground of improper venue. They contend that the complaint against them may be filed in the where either the petitioners or respondents reside. Respondent spouses reside in Bacolod City. The RTC denied the motion to dismiss, ruling that Atty. Aceron as the attorneyin-fact may use his residence as basis for the venue of the action. Respondents filed a petition for certiorari with the CA based on their earlier ground and on the ground that Atty. Aceron, a mere attorney-in-fact, is not the real party in interest; that his residence should not be considered in determining the proper venue for the complaint. The CA reversed the RTC and dismissed the complaint filed by the petitioners. The CA held that the complaint should have been filed in Bacolod City instead. Petitioners moved to reconsider but were denied by the CA Issue: Did the CA commit an error of law when it ruled that the complaint must be dismissed on the ground of improper venue? Ruling: No, the CA did not commit an error of law.
While the fixing of the venue in personal actions may be done for the convenience of the plaintiffs and their witnesses, the choice is not left to the caprice of the plaintiff. The Rules of court still regulate the fixing of the venue for filing a personal action. The collection of a sum of money is a personal action in order to enforce a contract. The Rules of Court give the plaintiff the choice where to file the action; whether in the place where the plaintiff resides or in the place where the defendant resides. However, the plaintiffs in this case do not reside in the Philippines. Philippine Courts do not have jurisdiction over persons residing abroad. Hence, the only choice left for venue was the residence of the defendant. Atty. Aceron, the attorney-in-fact of the petitioners is not a real party in interest for the court to consider his residence as a basis for setting the venue. He is only a representative of the petitioners, and under Rule 3, sec. 3 of the Rules of Court “the beneficiary shall be included in the title of the case and shall be deemed to be the real party in interest”. Atty. Aceron did not subrogate petitioners as real parties in interest, he merely represents them. The real party in interest still remains Theodore Ang and Nancy Ang; Atty. Aceron cannot replace their residence with that of his own for purposes of setting the venue. The rules of venue are designed to facilitate the just and orderly administration of justice. This objective will be frustrated if the plaintiffs are given unbridled freedom to choose the venue, as they may have ulterior motives for filing the complaint in a specific court of their choosing.
SIMNY G. GUY, GERALDINE G. GUY, GLADYS G. YAO, and the HEIRS OF THE LATE GRACE G. CHEU, Petitioners , vs. GILBERT G. GUY, Respondent . Facts: With 519,997 shares of stock as reflected in Stock Certificate Nos. 004-014, herein respondent Gilbert G. Guy (Gilbert) practically owned almost 80 percent of the 650,000 subscribed capital stock of GoodGold Realty & Development Corporation (GoodGold).
GoodGold’s remaining shares were divided among Francisco Guy (Francisco) with 130,000 shares, Simny Guy (Simny), Benjamin Lim and Paulino Delfin Pe, with one share each, respectively.Gilbert is the son of spouses Francisco and Simny.Simny, one of the petitioners, however, alleged that it was she and her husband who established GoodGold, putting the bulk of its shares under Gilbert’s name.
Simny claimed that with their eldest son, Gaspar G. Guy (Gaspar), having entered the Focolare Missionary in 1970s, renouncing worldly possessions,2 she and Francisco put the future of the Guy group of companies in Gilbert’s hands.Simny further claimed that upon the advice of their lawyers, upon the incorporation of GoodGold, they issued stock certificates reflecting the shares held by each stockholder duly signed by Francisco as President and Atty. Emmanuel Paras as Corporate Secretary, with corresponding blank endorsements at the back of each certificate – including Stock Certificate Nos. 004-014 under Gilbert’s name. These certificates were all with Gilbert’s irrevocable endorsement and power of attorney to have these stocks transferred in the books of corporation.All of these certificates were always in the undisturbed possession of the spouses Francisco and Simny, including Stock Certificate Nos. 004-014.
In 1999, Francisco instructed Benjamin Lim, to collaborate with Atty. Emmanuel Paras, to redistribute GoodGold’s shareholdings evenly among his children, while maintaining a proportionate share for himself and his wife, Simny.Accordingly, some of GoodGold’s certificates were cancelled and new ones were issued to represent the redistribution of GoodGold’s shares of stock. The new certificates of stock were signed by Francisco and Atty. Emmanuel Paras, as President and Corporate Secretary, respectively. In September 2004, or five years after the redistribution of GoodGold’s shares of stock, Gilbert filed with the Regional Trial Court (RTC) of Manila, a Complaint for the "Declaration of Nullity of Transfers of Shares in GoodGold and of General Information Sheets and Minutes of Meeting, and for Damages with Application for a Preliminary Injunctive Relief," against petitioners, alleging, among others, that no stock certificate ever existed;that his signature at the back of the spurious Stock Certificate Nos. 004-014 which purportedly endorsed the same and that of the corporate secretary, Emmanuel Paras, at the obverse side of the certificates were forged, and, hence, should be nullified. Gilbert, however, withdrew the complaint, after the National Bureau of Investigation (NBI) submitted a report to the RTC of Manila authenticating Gilbert’s signature in the endorsed certificates. The present controversy arose, when in 2008, three years after the complaint with the RTC of Manila was withdrawn, Gilbert again filed a complaint, this time, with the RTC of Mandaluyong, captioned as "IntraCorporate Controversy: For the Declaration of Nullity of Fraudulent Transfers of Shares of Stock Certificates, Fabricated Stock Certificates, Falsified General Information Sheets, Minutes of Meetings, and Damages with
Application for the Issuance of a Writ of Preliminary and Mandatory Injunction," against petitioners.Gilbert alleged that he never signed any document which would justify and support the transfer of his shares to his siblings. He also denied the existence of the certificates of stocks. According to him, "there were no certificates of stocks under his name for the shares of stock subscribed by him were never issued nor delivered to him from the time of the inception of the corporation. Gilbert added that the Amended General Information Sheets (GIS) of GoodGold for the years 2000 to 2004 which his siblings submitted to the Securities and Exchange Commission (SEC) were spurious as these did not reflect his true shares in the corporation which supposedly totaled to 595,000 shares;16 that no valid stockholders’ annual meeting for the year 2004 was held, hence proceedings taken thereon, including the election of corporate officers were null and void;17 and, that his siblings are foreign citizens, thus, cannot own more than forty percent of the authorized capital stock of the corporation. Gilbert also asked in his complaint for the issuance of a Writ of Preliminary and Mandatory Injunction to protect his rights.In an Order dated 30 June 2008,20 the RTC denied Gilbert’s Motion for Injunctive Relief 21 which constrained him to file a motion for reconsideration, and, thereafter, a Motion for Inhibition against Judge Edwin Sorongon, praying that the latter recuse himself from further taking part in the case.Gilbert’s siblings filed a manifestation claiming that the complaint is a nuisance and h arassment suit. In an Order dated 6 November 2008,22 the RTC denied the motion for inhibition, as well as dismissed the case, declaring it a nuisance and harassment suit.This constrained Gilbert to assail the above Order before the Court of Appeals (CA). In a Decision dated 27 May 2009, the CA upheld Judge Sorongon’s refusal to inhibit.The CA, in the same decision, also denied Gilbert’s Petition for the Issuance of Writ of Preliminary Injunction for failure to establish a clear and unmistakable right that was violated as required under Section 3, rule 58 of the 1997 Rules of Civil Procedure. The CA, however, found merit on Gilbert’s contention that the complaint should be heard on the merits.
Hence, these consolidated petitions. G.R. No. 189486 is a Petition for Review under Rule 45 of the Rules of Court filed by petitioners which prays that this Court declare Civil Case No. SEC-MC08-112, a harassment or nuisance suit. Meanwhile, during the pendency of G.R. No. 189486, the trial court set the pre-trial conference on the case subject of this controversy, constraining the petitioners to file a Motion to defer the pre-trial, which was, however, denied by the court a quo. The denial of the petitioners’ motion to defer pre-trial, compelled them to file with this Court a Petition for Certiorari with Urgent Application for the Issuance of TRO and/or A Writ of Preliminary Injunction, docketed as G.R. No. 189699.
Because of the pendency of the G.R. No. 189486 before us, the petitioners deemed proper to question the said denial before us as an incident arising from the main controversy.29 Ruling:
The absence of an indispensable party in a case renders all subsequent actions of the court null and void for want of authority to act, not only as to the absent parties but even as to those present. It bears emphasis that this controversy started with Gilbert’s complaint filed with the RTC of Mandaluyong City in his capacity as stockholder, director and Vice-President of GoodGold.34 Gilbert’s complaint essentially prayed for the return of his original 5 19,997 shares in GoodGold, by praying that the court declare that "there were no valid transfers of the contested shares to defendants and Francisco.”
The transfer of the shares cannot be, as Gilbert wanted, declared entirely fraudulent without including those of Francisco who owns almost a third of the total number. Francisco, in both the 2004 and 2008 complaints, is an indispensable party without whom no final determination can be had for the following reasons: (a) the complaint prays that the shares now under the name of the defendants and Francisco be declared fraudulent; (b) Francisco owns 195,000 shares some of which, Gilbert prays be returned to him; (c) Francisco signed the certificates of stocks evidencing the alleged fraudulent shares previously in the name of Gilbert. The inclusion of the shares of Francisco in the complaint makes Francisco an indispensable party. Moreover, the pronouncement about the shares of Francisco would impact on the hereditary rights of the contesting parties or on the conjugal properties of the spouses to the effect that Francisco, being husband of Simny and father of the other contesting parties, must be included for, otherwise, in his absence, there cannot be a determination between the parties already before the court which is effective, complete, or equitable. It bears emphasis that Gilbert, while suing as a stockholder against his co-stockholders, should have also impleaded GoodGold as defendant. His complaint also prayed for the annulment of the 2004 stockholders’ annual meeting, the annulment of the 2004 election of the board of directors and of its officers, the annulment of 2004 GIS submitted to the SEC, issuance of an order for the accounting of all monies and rentals of GoodGold, and the issuance of a writ of preliminary and mandatory injunction. We have made clear that GoodGold is a separate juridical entity distinct from its stockholders and from its directors and officers. The trial court, acting as a special commercial court, cannot settle the issues with finality without impleading GoodGold as defendant. Like Francisco, and for the same reasons, GoodGold is an indispensable party which Gilbert should have impleaded as defendant in his complaint. Allegations of deceit, machination, false pretenses, misrepresentation, and threats are largely conclusions of law that, without supporting statements of the facts to which the allegations of fraud refer, do not sufficiently state an effective cause of action.
"In all averments of fraud or mistake, the circumstances constituting fraud or mistake must be stated with particularity" to "appraise the other party of what he is to be called on to answer, and so that it may be determined whether the facts and circumstances alleged amount to fraud." These particulars would necessarily include the time, place and specific acts of fraud committed. "The reason for this rule is that an allegation of fraud concerns the morality of the defendant’s conduct and he is entitled to know fully the ground on which the allegations are made, so he may have every opportunity to prepare his case to clear himself at the trial." Tested against established standards, we find that the charges of fraud which Gilbert accuses his siblings are not supported by the required factual allegations. In Reyes v. RTC of Makati, which we now reiterate, mutatis mutandis, while the complaint contained allegations of fraud purportedly committed by his siblings, these allegations are not particular enough to bring the controversy within the special commercial court’s jurisdiction; they are not statements of ultimate facts, but are mere conclusions of law: how an d why the alleged
transfer of shares can be characterized as "fraudulent" were not explained and elaborated on. As emphasized in Reyes: Not every allegation of fraud done in a corporate setting or perpetrated by corporate officers will bring the case within the special commercial court’s jurisdiction. To fall within this jurisdiction, there must be sufficient nexus showing that the corporation’s nature, structure, or powers were used to facilitate the fraudulent device or scheme. Significantly, no corporate power or office was alleged to have facilitated the transfer of Gilbert’s shares. How the petitioners perpetrated the fraud, if ever they did, is an indispensable allegation which Gilbert must have had alleged with particularity in his complaint, but which he failed to. Failure to specifically allege the fraudulent acts in intra-corporate controversies is indicative of a harassment or nuisance suit and may be dismissed motu proprio.
In ordinary cases, the failure to specifically allege the fraudulent acts does not constitute a ground for dismissal since such a defect can be cured by a bill of particulars. Thus: Failure to allege fraud or mistake with as much particularity as is desirable is not fatal if the general purport of the claim or defense is clear, since all pleadings should be so construed as to do substantial justice. Doubt as to the meaning of the pleading may be resolved by seeking a bill of particulars. A bill of particulars may be ordered as to a defense of fraud or mistake if the circumstances constituting fraud or mistake are not stated with the particularity required b y the rule. The above-stated rule, however, does not apply to intra-corporate controversies. It did not escape us that Gilbert, instead of particularly describing the fraudulent acts that he complained of, just made a sweeping denial of the existence of stock certificates by claiming that such were not necessary, GoodGold being a mere family corporation.As sweeping and bereft of particulars is his claim that he "is unaware of any document signed by him that would justify and support the transfer of his shares to herein petitioners." Even more telling is the contradiction between the denial of the existence of stock certificates and the denial of the transfer of his shares of stocks "under his name under the books of the corporations." Even beyond the vacant pleadings, its nature as nuisance is palpable. To recapitulate, it was only after five years following the redistribution of GoodGold’s shares of stock, that Gilbert filed with the RTC of Manila a complaint. Gilbert withdrew this complaint after the NBI submitted a report to the RTC of Manila authenticating Gilbert’s signature in the endorsed certificates. And, it was only after three years from the withdrawal of the Manila complaint, that Gilbert again filed in 2008 a complaint also for declaration of nullity of the transfer of the shares of stock, this time with the RTC of Mandaluyong. When a stock certificate is endorsed in blank by the owner thereof, it constitutes what is termed as "street certificate," so that upon its face, the holder is entitled to demand its transfer his name from the issuing corporation. With Gilbert’s failur e to allege specific acts of fraud in his complaint and his failure to rebut the NBI report, this Court pronounces, as a consequence thereof, that the signatures appearing on the stock certificates, including his blank endorsement thereon were authentic. With the stock certificates having been endorsed in blank by Gilbert, which he himself delivered to his parents, the same can be cancelled and transferred in the names of herein petitioners.
In Santamaria v. Hongkong and Shanghai Banking Corp.,61 this Court held that when a stock certificate is endorsed in blank by the owner thereof, it constitutes what is termed as "street certificate," so that upon its face, the holder is entitled to demand its transfer into his name from the issuing corporation. Such certificate is deemed quasi-negotiable, and as such the transferee thereof is justified in believing that it belongs to the holder and transferor. While there is a contrary ruling, as an exception to the general rule enunciated above, what the Court held in Neugene Marketing Inc., et al., v CA,62 where stock certificates endorsed in blank were stolen from the possession of the beneficial owners thereof constraining this Court to declare the transfer void for lack of delivery and want of value, the same cannot apply to Gilbert because the stock certificates which Gilbert endorsed in blank were in the undisturbed possession of his parents who were the beneficial owners thereof and who themselves as such owners caused the transfer in their names. Indeed, even if Gilbert’s parents were not the beneficial owners, an endorsement in blank of the stock certificates coupled with its delivery, entitles the holder thereof to demand the transfer of said stock certificates in his name from the issuing corporation.
LIVING @ SENSE, INC. vs. MALAYAN INSURANCE COMPANY, INC. G.R. No. 193753. September 26, 2012. Facts: Petitioner was the main contractor of the FOC Network Project of Globe Telecom in Mindanao. Petitioner entered into a Sub-Contract Agreement (Agreement) with Dou Mac, Inc. (DMI), under which the latter was tasked to undertake an underground open-trench work. Petitioner required DMI to give a bond, in the event that DMI fails to perform its obligations under the Agreement.
Thus, DMI secured surety and performance bonds, both in the amount of P 5,171,488.00, from respondent Malayan Insurance Company, Inc. (respondent) to answer: (1) for the unliquidated portion of the downpayment, and (2) for the loss and damage that petitioner may suffer, respectively, should DMI fail to perform its obligations under the Agreement. Under the bonds, respondent bound itself jointly and severally liable with DMI. The Department of Public Works and Highways (DPWH) issued a work-stoppage order against DMI after finding the latter’s work unsatisfactory . DMI failed to adopt corrective measures, prompting petitioner to terminate the Agreement and seek indemnification from respondent in the total amount of P 1,040,895.34. However, respondent effectively denied petitioner’s claim on the ground that the lia bility of its principal, DMI, should first be ascertained before its own liability as a surety attaches. Hence, the instant complaint, premised on respondent’s liability under the surety and performance bonds secured by DMI.
Respondent claimed that DMI is an indispensable party that should be impleaded and whose liability should first be determined before respondent can be held liable. On the other hand, petitioner asserted that respondent is a surety who is directly and primarily liable to indemnify petitioner, and that the bond is "callable on demand" in the event DMI fails to perform its obligations under the Agreement. Issue: Whether or not DMI is an indispensable party in this case. Ruling: No. DMI is not an indispensable party because petitioner can claim indemnity directly from respondent, having made itself jointly and severally liable with DMI for the obligation under the bonds. Therefore, the failure to implead DMI is not a ground to dismiss the case, even if the same was without prejudice. The term "jointly and severally" expresses a solidary obligation granting petitioner, as creditor, the right to proceed against its debtors. The nature of the solidary obligation under the surety does not make one an indispensable party.An indispensable party is a party-in-interest without whom no final determination can be had of an action, and who shall be joined mandatorily either as plaintiffs or defendants. The presence of indispensable parties is necessary to vest the court with jurisdiction, thus, without their presence to a suit or proceeding, the judgment of a court cannot attain real finality. The absence of an indispensable party renders all subsequent actions of the court null and void for want of authority to act, not only as to the absent parties but even as to those present.When DMI secured the surety and performance bonds from respondent in compliance
with petitioner’s requirement, respondent bound itself "jointly and severally" with DMI for the damages and actual loss that petitioner may suffer should DMI fail to perform its obligations.
PHILIP L. GO, PACIFICO Q. LIM and ANDREW Q. LIM Petitioners, vs. DISTINCTION PROPERTIES DEVELOPMENT AND CONSTRUCTION, INC. Respondent. G.R. No. 194024. April 25, 2012. Facts: Philip L. Go, Pacifico Q. Lim and Andrew Q. Lim (petitioners) are registered individual owners of condominium units in Phoenix Heights Condominium Pasig City, Metro Manila. Respondent Distinction Properties Development and Construction, Inc. (DPDCI) is the real estate developer of Phoenix Heights Condominium, with principal office at Binondo, Manila.
In February 1996, Pacifico Lim, one of the incorporators and the then president of DPDCI, executed a Master Deed and Declaration of Restrictions (MDDR) of Phoenix Heights Condominium, which was filed with the Registry of Deeds. As the developer, DPDCI undertook, among others, the marketing aspect of the project, the sale of the units and the release of flyers and brochures. Thereafter, Phoenix Heights Condominium Corporation (PHCC) was formally organized and incorporated. Sometime in 2000, DPDCI turned over to PHCC the ownership and possession of the condominium units, except for the two saleable commercial units/spaces: 1. G/F Level BAS covered by Condominium Certificate of Title (CCT) No. 21030 utilized as the PHCC’s administration office, and 2. G/F Level 4-A covered by CCT No. PT-27396/C-136-II used as living quarters by the building administrator. Although used by PHCC, DPDCI was assessed association dues for these two units. In March 1999, petitioner Lim filed an Application for Alteration of Plan pertaining to the construction of 22 storage units in the spaces adjunct to the parking area of the building, but was disapproved as such would obstruct light and ventilation. In August 2004, through its Board, PHCC approved a settlement offer from DPDCI for the set-off of the latter’s association dues arrears with the assignment of title over CCT Nos. 21030 and PT -27396/C-136-II and their conversion into common areas. The said settlement likewise included the reversion of the 22 storage spaces into common areas. With the conformity of PHCC, DPDCI’s application for alteration (conversion of unconstructed 22 storage units and units GF4-A and BAS from saleable to common areas) was granted by the Housing and Land Use Regulatory Board (HLURB). In August 2008, petitioners, as condominium unit-owners, filed a complaint before the HLURB against DPDCI for unsound business practices and violation of the MDDR, alleging that the latter committed
misrepresentation in their circulated flyers and brochures as to the facilities or amenities that would be available in the condominium and failed to perform its obligation to comply with the MDDR. In defense, DPDCI denied that it had breached its promises and representations to the public concerning the facilities in the condominium. It alleged that the brochure attached to the complaint was "a mere preparatory draft" and not the official one actually distributed to the public, and that the said brochure contained a disclaimer as to the binding effect of the supposed offers therein. Also, DPDCI questioned the petitioners’ personality to sue as the action was a derivative suit. HLURB Ruling – Favored the petitioners, holding as invalid the agreement entered into between DPDCI and PHCC, as to the alteration or conversion of the subject units into common areas, which it previously approved, for the reason that it was not approved by the majority of the members of PHCC as required under Section 13 of the MDDR. Further stating that DPDCI’s defense, that the brochure was a mere draft, was against human experience and a convenient excuse to avoid its obligation to provide the facility of the project and that the case was not a derivative suit but one which involved contracts of sale of the respective units between the complainants and DPDCI, hence, within its jurisdiction pursuant to Section 1, Presidential Decree (P.D.) No. 957 (The Subdivision and Condominium Buyers’ Protective Decree), as amended. Aggrieved, DPDCI filed with the CA its Petition for Certiorari and Prohibition on the ground that the HLURB decision was a patent nullity constituting an act without or beyond its jurisdiction and that it had no other plain, speedy and adequate remedy in the course of law. Court of Appeals Ruling – Favored DPDCI, setting aside HLURB’s decision (March 17, 2010) and holding that HLURB had no jurisdiction over the complaint filed by petitioners as the controversy did not fall within the scope of the administrative agency’s authority under P.D. No. 957. The HLURB not only relied heavily on the brochures which, according to the CA, did not set out an enforceable obligation on the part of DPDCI, but also erroneously cited Section 13 of the MDDR to support its finding of contractual violation. The CA held that jurisdiction over PHCC, an indispensable party, was neither acquired nor waived by estoppel. It held that, in any event, the action should be dismissed because the absence of PHCC, an indispensable party, rendered all subsequent actuations of the court void, for want of authority to act, not only as to the absent parties but even as to those present. Finally, the CA held that the rule on exhaustion of administrative remedies could be relaxed. Appeal was not a speedy and adequate remedy as jurisdictional questions were continuously raised but ignored by the HLURB. In the present case, however, "[t]he bottom line is that the challenged decision is one that had been rendered in excess of jurisdiction, if not with grave abuse of discretion amounting to lack or excess of jurisdiction." Petitioners filed a motion for reconsideration, which was denied b y the CA. Hence this petition. Issues: (1) Whether or not the HLURB has jurisdiction over the complaint filed by the petitioners.
(2) Whether or not PHCC is an indispensable party. (3) Whether or not the rule on exhaustion of administrative remedies applies in this case. Ruling: (1) No. Jurisdiction over the subject matter of a case is conferred by law and determined by the allegations in the complaint which comprise a concise statement of the ultimate facts constituting the plaintiff's cause of action. The nature of an action, as well as which court or body has jurisdiction over it, is determined based on the allegations contained in the complaint of the plaintiff, irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein. The averments in the complaint and the
character of the relief sought are the ones to be consulted. Once vested by the allegations in the complaint, jurisdiction also remains vested irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein. Thus, it was ruled that the jurisdiction of the HLURB to hear and decide cases is determined by the nature of the cause of action, the subject matter or property involved and the parties. To determine if HLURB has jurisdiction over petitioners’ cause of action, an examination of the laws defining the HLURB’s jur isdiction and authority becomes imperative. P.D. No. 957, specifically Section 3, granted the National Housing Authority (NHA) the "exclusive jurisdiction to regulate the real estate trade and business." Then came P.D. No. 134421 expanding the jurisdiction of the NHA (now HLURB), as follows: SECTION 1. In the exercise of its functions 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, dealer, broker or salesman.
The HLURB is given a wide latitude in characterizing or categorizing acts which may constitute unsound business practice or breach of contractual obligations in the real estate trade. This grant of expansive jurisdiction to the HLURB does not mean, however, that all cases involving subdivision lots or condominium units automatically fall under its jurisdiction. The mere relationship between the parties, i.e., that of being subdivision owner/developer and subdivision lot buyer, does not automatically vest jurisdiction in the HLURB. For an action to fall within the exclusive jurisdiction of the HLURB, the decisive element is the nature of the action as enumerated in Section 1 of P.D. 1344. On this matter, we have consistently held that the concerned administrative agency, the National Housing Authority (NHA) before and now the HLURB, has jurisdiction over complaints aimed at compelling the subdivision developer to comply with its contractual and statutory obligations. The complaint filed by petitioners alleged causes of action that apparently are not cognizable by the HLURB considering the nature of the action and the reliefs sought. A perusal of the complaint discloses that petitioners are actually seeking to nullify and invalidate the duly constituted acts of PHCC - the April 29, 2005 Agreement entered into by PHCC with DPDCI and its Board Resolution which authorized the acceptance of the proposed offsetting/settlement of DPDCI’s indebtedness and approval of the conversion of certain units from saleable to common areas. As it is clear that. (2) Yes. The acts being assailed are those of PHHC; this case cannot prosper for failure to implead such proper party. An indispensable party is defined as one who has such an interest in the controversy or subject matter that a final adjudication cannot be made, in his absence, without injuring or affecting that interest. Under Section 7, Rule 3 of the Rules of Court, "parties in interest without whom no final determination can be had of an action shall be joined as plaintiffs or defendants." If there is a failure to implead an indispensable party, any judgment rendered would have no effectiveness. It is "precisely ‘when an indispensable party is not before the court (that) an action should be dismissed.’ The absence of an indispensable party renders all subsequent actions of the court null and void for want of authority to act, not only as to the absent parties but even to those present." The purpose of the rules on joinder of indispensable parties is a complete determination of all issues not only between the parties
themselves, but also as regards other persons who may be affected by the judgment. A decision valid on its face cannot attain real finality where there is want of indispensable parties. The Supreme Court has held that when it appears of record that there are other persons interested in the subject matter of the litigation, who are not made parties to the action, it is the duty of the court to suspend the trial until such parties are made either plaintiffs or defendants. The burden of procuring the presence of all indispensable parties is on the plaintiff. The evident purpose of the rule is to prevent the multiplicity of suits by requiring the person arresting a right against the defendant to include with him, either as co-plaintiffs or as co-defendants, all persons standing in the same position, so that the whole matter in dispute may be determined once and for all in one litigation. From all indications, PHCC is an indispensable party and should have been impleaded, either as a plaintiff or as a defendant, in the complaint filed before the HLURB as it would be directly and adversely affected by any determination therein. To belabor the point, the causes of action, or the acts complained of, were the acts of PHCC as a corporate body. The cause of action rightfully pertains to PHCC. Petitioners cannot exercise the same except through a derivative suit. In the complaint, however, there was no allegation that the action was a derivative suit. In fact, in the petition, petitioners claim that their complaint is not a derivative suit. The Court ruled that for a derivative suit to prosper, it is required that the minority stockholder suing for and on behalf of the corporation must allege in his complaint that he is suing on a derivative cause of action on behalf of the corporation and all other stockholders similarly situated who may wish to join him in the suit. It is a condition sine qua non that the corporation be impleaded as a party because not only is the corporation an indispensable party, but it is also the present rule that it must be served with process. The judgment must be made binding upon the corporation in order that the corporation may get the benefit of the suit and may not bring subsequent suit against the same defendants for the same cause of action. In other words, the corporation must be joined as party because it is its cause of action that is being litigated and because judgment must be a res adjudicata against it. Without PHCC as a party, there can be no final adjudication of the HLURB’s judgment. (3) No. The Court agrees with the position of the CA that the circumstances prevailing in this case warranted a relaxation of the rule on exhaustion of administrative remedies. The doctrine of exhaustion of administrative remedies is a cornerstone of our judicial system. The thrust of the rule is that courts must allow administrative agencies to carry out their functions and discharge their responsibilities within the specialized areas of their respective competence. The doctrine of exhaustion of administrative remedies and the doctrine of primary jurisdiction are not ironclad rules. In the case of Republic of the Philippines v. Lacap, the Court enumerated the numerous exceptions to these rules, namely: (a) where there is estoppel on the part of the party invoking the doctrine; (b) where the challenged administrative act is patently illegal, amounting to lack of jurisdiction; (c) where there is unreasonable delay or official inaction that will irretrievably prejudice the complainant; (d) where the amount involved is relatively so small as to make the rule impractical and oppressive; (e) where the question involved is purely legal and will ultimately have to be decided by the courts of justice; (f) where judicial intervention is urgent; (g) where the application of the doctrine may cause great and irreparable damage; (h) where the controverted acts violate due process; (i) where the issue of non-exhaustion of administrative remedies has been rendered moot; (j) where there is no other plain, speedy and adequate remedy; (k) where strong public interest is involved; and (l) in quo warranto proceedings.44 [Underscoring supplied]
The situations (b) and (e) in the foregoing enumeration obtain in this case. The challenged decision of the HLURB is patently illegal having been rendered in excess of jurisdiction, if not with grave abuse of discretion amounting to lack or excess of jurisdiction. Also, the issue on jurisdiction is purely legal which will have to be decided ultimately by a regular court of law. There is a question of law when the doubt or difference arises as to what the law is on a certain state of facts, and not as to the truth or the falsehood of alleged facts. Said question at best could be resolved only tentatively by the administrative authorities. The final decision on the matter rests not with them but with the courts of justice. Exhaustion of administrative remedies does not apply, because nothing of an administrative nature is to be or can be done. The issue does not require technical knowledge and experience but one that would involve the interpretation and application of law.
Sepulveda, Sr. v. Pelaez. G.R. No. 152195. January 31, 2005. Facts: The case at bar is a petition for review on certiorari under Rule 45 of the Rules of Court. The private respondent (Atty. Pelaez) filed a complaint against his grand uncle (Sepulveda, Sr.) with the CFI Cebu for the recovery of possession and ownership of his ½ undivided share of several parcels of land; his undivided 1/3 share in several other lots and for the partition among the co-owners. The 11 lots among the 25 parcels of lands which Atty. Pelaez’s mother, Dulce Sepulveda, inherited from her grandmother under the project of partition which was submitted by Sepulveda, Sr. as the administrator of the formers estate, duly approved by the said CFI in a Special Proceeding. Under the said deed, Sepulveda, Sr. appeared to be the owner of an undivided portion of Lot No. 28199, while his brother and Dulces uncle Santiago Sepulveda, was the undivided owner of ½ of the parcels of land covered by T.D. Nos. 18197, 18193 and 28316. Dulce and her uncles, Pedro and Santiago, were likewise indicated therein as the co-owners of the 11 other parcels of land, each with an undivided 1/3 share thereof.
Private Respondent’s Contention:
It alleged that his mother Dulce died intestate, and aside from himself, was survived by her husband Rodolfo Pelaez and her mother Carlota Sepulveda. Dulces grandfather Vicente Sepulveda died intestate and Dulce was then only about 4 years old. According to the Atty. Pelaez, his grandmother Carlota repeatedly demanded the delivery of her mothers share in the 11 parcels of land, but Sepulveda, Sr. who by then was the Municipal Mayor of Tudela, refused to do so. Dulce, likewise, later demanded the delivery of her share in the eleven parcels of land, but Pedro Sepulveda, Sr. still refused, claiming that he needed to continue to possess the property to reap the produce therefrom which he used for the payment of the realty taxes on the subject properties. The Atty. Pelaez alleged that he himself demanded the delivery of his mothers share in the subject properties on so many occasions, the last of which was in 1972, to no avail. Atty. Pelaez further narrated that his granduncle executed an affidavit, stating that he was the sole heir of Dionisia when she died intestate, when, in fact, the latter was survived by her three sons, Santiago, Pedro and Vicente. Pedro Sepulveda, Sr. also executed a Deed of Absolute Sale the property covered by T.D. No. 19804 (T.D. No. 35090) in favor of the City of Danao for P7,492.00. According to the Atty. Pelaez, his granduncle received this amount without Atty. Pelaez’ knowledge. Two causes of actions were raised in the case at bar; the common to the first and second causes of action are the following: ordering the defendant to pay the plaintiff the amount of P50,000.00 as moral damages, exemplary damages, to deliver to the plaintiff the latters share of the fruits of the 11 parcels of land, the litigation expenses, attorney’s fee of P12,000.00 and granting the plaintiff such other reliefs and remedies as he may be entitle to in accordance with the law and equity. Petitioner’s Contention:
Sepulveda, Sr. admitted having executed a deed of sale over the parcel of land covered by T.D. No. 19804 in favor of Danao City, but averred that the latter failed to pay the purchase price thereof; besides, the private respondent had no right to share in the proceeds of the said sale. He likewise denied having received an y demand for the delivery of Dulces share of the subject properties from the latters mother Carlota, or from the private respondent. During the trial, Sepulveda, Sr. died intestate. A petition for the settlement of his estate was filed with the RTC of Cebu, docketed as Special Proceeding No. SF-37. His daughter, petitioner Socorro Sepulveda Lawas, was appointed administratrix of his estate. In compliance with the decision of this Court in Lawas v. Court of Appeal, the petitioner substituted the deceased. To prove the delivery of Dulces share under the project of partition, the petitioner presented the Affidavit of Consolidation she executed in October 1940 covering thirteen (13) of the twenty-five (25) parcels of land which were deeded to her under the Project of Partition, as well as the Order of the then CFI in Special Proceeding No. 778-R, denying Carlotas motion for the reconstitution of the records of the said case, and for the delivery of Dulces share in the eleven parcels of land. The court likewise declared therein that Dulce, through her grandchildren and her mother, Carlota, had already received her share of the estate from Pedro Sepulveda, Sr. as early as January 10, 1938. According to the petitioner, Dulce and Pedro Sepulveda, Sr. had a verbal agreement wherein the eleven parcels of land covered by the complaint would serve as the latters compensation for his services as administrator of Dionisias estate. Thus, upon the termination of Special Proceeding No. 778-0, and subsequent to the distribution of the shares of Dionisias heirs, Pedro Sepulveda, Sr. then became the sole owner of Dulces shares. The petitioner likewise adduced evidence that Santiago Sepulveda died intestate and was survived by his wife, Paz Velez Sepulveda and their then minor children. It was pointed out that the private respondent failed to implead Paz Sepulveda and her minor children as parties-defendants in the complaint. It was further claimed that Pedro Sepulveda, Sr. declared the property covered by T.D. No. 18199 under his name for taxation purposes since the beginning of 1948. It was likewise alleged that the eleven (11) parcels of land deeded to Dulce under the Project of Partition had been declared for taxation purposes under the name of Pedro Sepulveda since 1974, and that he and his heirs paid the realty taxes thereon. RTC - The trial court ruled that the private respondents action for reconveyance based on constructive trust had not yet prescribed when the complaint was filed; that he was entitled to a share in the proceeds of the sale of the property to Danao City; and that the partition of the subject property among the adjudicatees thereof was in order. COURT OF APPEALS - It affirmed the decision of the RTC. Issue: WHETHER OR NOT THE REGIONAL TRIAL COURT IN DANAO CITY THAT PAYMENT WAS MADE BY DANAO CITY FOR ONE (1) OF THE ELEVEN (11) PARCELS INVOLVED IN THE CASE AND OF WHICH HEREIN RESPONDENT SHOULD BE PAID BY PETITIONER ONE THIRD (1/3) OF THE PURCHASE PRICE. Ruling: The petition is granted for the sole reason that the respondent failed to implead as parties, all the indispensable parties in his complaint.
As gleaned from the material averments of the complaint and the reliefs prayed for therein, the private respondent, as plaintiff therein, sought the recovery of the ownership and possession of the ten (10) parcels of land and the partition thereof; and for the payment of his share in the proceeds of the sale of the property which Pedro Sepulveda, Sr. sold to Danao City amounting to P7,492.00, which Pedro Sepulveda, Sr. claimed was left unpaid. It appears that when the private respondent filed the complaint, his father, Rodolfo Pelaez, was still alive. Thus, when his mother Dulce Pelaez died intestate on March 2, 1944, her husband Rodolfo and their son,
the private respondent, survived her. Under Article 996 of the New Civil Code, Rodolfo Pelaez, as surviving spouse, is entitled to a portion in usufruct equal to that corresponding by way of legitime to each of the legitimate children who has not received any betterment. The rights of the usufructuary are provided in Articles 471 to 490 of the old Civil Code. Under articles 807 and 834 of the old Civil Code the surviving spouse is a forced heir and entitled to a share in usufruct in the estate of the deceased spouse equal to that which by way of legitime corresponds or belongs to each of the legitimate children or descendants who have not been bettered or have not received any share in the one-third share destined for betterment. The right of the surviving spouse to have a share in usufruct in the estate of the deceased spouse is provided by law of which such spouse cannot be deprived and which cannot be ignored. Of course, the spouse may waive it but the waiver must be express. Section 1, Rule 69 of the Rules of Court provides that in an action for partition, all persons interested in the property shall be joined as defendants. Thus, all the co-heirs and persons having an interest in the property are indispensable parties; as such, an action for partition will not lie without the joinder of the said parties. The mere fact that Pedro Sepulveda, Sr. has repudiated the co-ownership between him and the respondent does not deprive the trial court of jurisdiction to take cognizance of the action for partition, for, in a complaint for partition, the plaintiff seeks, first, a declaration that he is a co-owner of the subject property; and, second, the conveyance of his lawful shares. In the present action, the private respondent, as the plaintiff in the trial court, failed to implead the following indispensable parties: his father, Rodolfo Pelaez; the heirs of Santiago Sepulveda, namely, Paz Sepulveda and their children; and the City of Danao which purchased the property covered by T.D. 19804 (T.D. No. 35090) from Pedro Sepulveda, Sr. and maintained that it had failed to pay for the purchase price of the property. Rodolfo Pelaez is an indispensable party he being entitled to a share in usufruct, equal to the share of the respondent in the subject properties. There is no showing that Rodolfo Pelaez had waived his right to usufruct. RULE 3, SEC. 7.Compulsory joinder of indispensable parties. Parties in interest without whom no final determination can be had of an action shall be joined either as plaintiffs or defendants. Indeed, the presence of all indispensable parties is a condition sine qua non for the exercise of judicial power. It is precisely when an indispensable party is not before the court that the action should be dismissed. Thus, the plaintiff is mandated to implead all the indispensable parties, considering that the absence of one such party renders all subsequent actions of the court null and void for want of authority to act, not only as to the absent parties but even as to those present. One who is a party to a case is not bound by any decision of the court, otherwise, he will be deprived of his right to due process. Without the presence of all the other heirs as plaintiffs, the trial court could not validly render judgment and grant relief in favor of the private respondent. The failure of the private respondent to implead the other heirs as parties-plaintiffs constituted a legal obstacle to the trial court and the appellate courts exercise of judicial power over the said case, and rendered any orders or judgments rendered therein a nullity. To reiterate, the absence of an indispensable party renders all subsequent actions of the court null and void for want of authority to act, not only as to the absent parties but even as to those present. Hence, the trial court should have ordered the dismissal of the complaint.
VICTORIANO BORLASA, ET AL. v. VICENTE POLISTICO, ET AL. G.R. No. L-22909. January 28, 1925. FACTS: The plaintiffs and defendants, together with several hundred other persons, formed an association under the name of Turuhan Polistico & Co. Polistico, the principal defendant herein, was elected president and treasurer of the association, and his house in Lilio, Laguna, was made its principal place of business. Under the by-laws, each member obligated himself to pay to Polistico, before 3 o'clock in the afternoon of every Sunday the sum of 50 centavos, except that on every fifth Sunday the amount was P1, if the president elected to call this amount, as he always did. It is alleged that from April, 1911, until April, 1917, the sums of money mentioned above were paid weekly by all of the members of the society with few irregularities. The inducement to these weekly contributions was found in provisions of the by-laws to the effect that a lottery should be conducted weekly among the members and that the successful member should be paid the amount collected each week, from which, however, the president-treasurer of the society was to receive the sum of P200, to be held by him as funds of the society, to which, Polistico allegedly received P74,000.
Borlasa and others filed an action against Vicente Polistico and others, chiefly for the purpose of securing the dissolution of Turuhan Polistico & Co., and to compel the defendants to account for and surrender the money and property of the association in order that its affairs may be liquidated and its assets applied according to law. The defendants in the complaint are the members of the board of directors of the association. In an amended answer the defendants raised the question of lack of parties and set out a list of some hundreds of persons whom they alleged should be brought in as parties defendant on the ground, among others, that they were in default in the payment of their dues to the association. The court made an order requiring the plaintiffs to amend their complaint within a stated period so as to include all of the members of theTurnuhan Polistico & Co. either as plaintiffs or defendants. The plaintiffs excepted to this order, but acquiesced to the extent of amending their complaint by adding as additional parties plaintiff some hundreds of persons. The defendants demurred to the amended complaint on the ground that it showed on its face a lack of necessary parties. The trial judge having sustained a demurrer for defect of parties and the plaintiffs electing not to amend, the cause was dismissed, and from this order an appeal was taken by the plaintiffs to Supreme Court. ISSUE: Whether or not all the members of the association must be pleaded either as plaintiffs or defendants. HELD: NO. The situation involved is precisely the one contemplated in section 118 of the Code of Civil Procedure, where one or more may sue for the benefit of all. It is evident from the showing made in the complaint, and from the proceedings in the court below, that it would be impossible to make all of the persons in interest parties to the cases and to require all of the members of the association to be joined as parties would be tantamount to a denial of justice.
The general rule with reference to the making of parties in a civil action requires, of course, the joinder of all necessary parties wherever possible, and the joinder of all indispensable parties under any and all conditions, the presence of those latter being a sine qua non of the exercise of judicial power. The class suit contemplates an exceptional situation where there are numerous persons all in the same plight and all together constituting a constituency whose presence in the litigation is absolutely indispensable to the administration of justice. Here the strict application of the rule as to indispensable parties would require that each and every individual in the class should be present. But at this point the practice is so far relaxed as to permit the suit to proceed, when the class is sufficient represented to enable the court to deal properly and justly with that interest and with all other interest involved in the suit. In the class suit, then, representation of a class interest which will be affected by the judgment is indispensable; but it is not indispensable to make each member of the class an actual party. The addition of some hundreds of persons to the number of the plaintiffs, was unnecessary, and as the presence of so many parties is bound to prove embarrassing to the litigation from death or removal. Upon the return of this record to the lower court for further proceedings, the plaintiff shall again amend their complaint by dismissing as to unnecessary parties plaintiffs, but retaining a sufficient number of responsible persons to secure liability for costs and fairly to present all the members of the association. The order appealed from is reversed, the demurrer of the defendants based upon supposed lack of parties is overruled, and the defendants are required to answer to the amended complaint within the time allowed by law and the rules of the court.
Oposa vs Factoran GR No. 101083. July 30 1993. FACTS: A taxpayer’s class suit was filed by minors Juan Antonio Oposa, et al., representing their generation and generations yet unborn, and represented by their parents against Fulgencio Factoran Jr., Secretary of DENR. They prayed that judgment be rendered ordering the defendant, his agents, representatives and other persons acting in his behalf to:
1. Cancel all existing Timber Licensing Agreements (TLA) in the country; 2. Cease and desist from receiving, accepting, processing, renewing, or appraising new TLAs: and granting the plaintiffs “such other reliefs just and equitable unde r the premises.” They alleged that they have a clear and constitutional right to a balanced and healthful ecology and are entitled to protection by the State in its capacity as parens patriae. Furthermore, they claim that the act of the defendant in allowing TLA holders to cut and deforest the remaining forests constitutes a misappropriation and/or impairment of the natural resources property he holds in trust for the benefit of the plaintiff minors and succeeding generations. The defendant filed a motion to dismiss the complaint on the following grounds: 1. Plaintiffs have no cause of action against him; 2. The issues raised by the plaintiffs is a political question which properly pertains to the legislative or executive branches of the government. ISSUE: Whether or not the petitioner-minors have a cause of action in filing a class suit to prevent the misappropriation or impairment of Philippine rainforests. HELD: Yes. Petitioner-minors assert that they represent their generation as well as generations to come. The Supreme Court ruled that they can, for themselves, for others of their generation, and for the succeeding generation, file a class suit. Their personality to sue in behalf of succeeding generations is based on the concept of intergenerational responsibility insofar as the right to a balanced and healthful ecology is concerned. Such a right considers the “rhythm and harmony of nature” which indispensably include, inter alia, the judicious disposition, utilization, management, renewal and conservation of the country’s forest, mineral, land, waters, fisheries, wildlife, offshore areas and other natural resources to the end that their exploration, development, and utilization be equitably accessible to the present as well as the future generations. Needless to say, every generation has a responsibility to the next to preserve that rhythm and harmony for the full enjoyment of a balanced and healthful ecology. Put a little differently, the minor’s assertion of their right to a sound environment constitutes at the same time, the performance of their obligation to ensure the protection of that right for the generations to come.
Ortigas & Co., Limited Partnership v. Ruiz, 148 SCRA 326 FACTS: The case involves a large tract of land located in the boundaries of Pasig, Rizal and Ortigas wherein the said petitioners thru their predecessors-in-interest "Provincial del Santisima Nombre de Jesus de Agustinos Calzados," has been in continuous possession since 1862 or 125 years ago, as confirmed by the Court in Compana Agricola de Ultramar v. Marcos Domingo, et al., 6 Phil. 246 (1906), when it affirmed the decision of the Court of Land Registration declaring the Compana Agricola de Ultramar, also one of petitioner's predecessors-in-interest, owner of the lands in question to the exclusion of the claims of contestants or any persons holding under them. Said titles are in the Registry of Deeds of Rizal.
Pedro del Rosario and three others in behalf of 104 others, as a class suit, filed a civil case against the petitioner alleging that said title of the petitioner should be declared as null and void for lack of publication in the land registry proceedings and declaring that they are the lawful owners of the said land. Another civil case was instituted by Inocencio Bernardo and five others in behalf of 37 others, as a class suit, concerning another portion of the said land. Said case was identical to the case file by Pedro del Rosario and others.An urgent ex-parte motion of private respondents, opposing among others, petitioner's construction of fences and high walls, roads, streets and canals on the land in dispute.In the resolution of the Supreme Court directed the issuance of a writ of preliminary injunction upon petitioner's filing of a bond in the sum of ten thousand pesos (P10,000.00), enjoining respondent Court from enforcing the restraining order. ISSUE: Whether or not there is a valid class suit. HELD: No. The Supreme Court cited the case of (Borlaza v. Polistico, 47 Phil. 348; Newsweek, Inc. v. The Intermediate Appellate Court, et al., G.R. No. 63559, promulgated May 30, 1986) where in it stated that, “It is not a case where one or more may sue for the benefit of all or where the representation of class interest affected by the judgment or decree is indispensable to make each member of the class an actual party.”Furthermore, class suit will not lie because each defendant has an interest only in the particular portion of the said land that each of them occupies. They do not have any common interest in the subject matter in controversy.
RIVIERA FILIPINA, INC., v. COURT OF APPEALS, JUAN L. REYES, (now deceased), substituted by his heirs, namely, Estefania B. Reyes, Juanita R. de la Rosa, Juan B. Reyes, Jr. and Fidel B. Reyes, PHILIPPINE CYPRESS CONSTRUCTION & DEVELOPMENT CORPORATION, CORNHILL TRADING CORPORATION and URBAN DEVELOPMENT BANK. G.R. No. 117355. April 5, 2002. FACTS: Respondent Juan L. Reyes (Reyes) executed a Contract of Lease with Riviera. The ten-year (10) renewable lease of Riviera, which started on August 1, 1982, involved a 1,018 square meter parcel of land located along EDSA, Quezon City, covered and described in Transfer Certificate of Title No. 186326 of the Registry of Deeds of Quezon City in the name of Juan L. Reyes. The subject land is mortgaged in favor of Prudential Bank. Since Reyes’ loan remained unpaid, the bank extrajudicially foreclosed the property. At the auction sale, the bank was declared as the highest bidder. The redemption period was set to expire on March 7, 1989. Realizing that he could not possibly raise in time the money needed to redeem the subject property, Reyes decided to sell the same. Recognizing Riviera’s right of first refusal, the subject land was first offered to Riviera, through its President Vicente C. Angeles. The first offer made by Reyes was at 5,000/sqm. However, Angeles bargained at 3,500/sqm. After seven months, Angeles offered to buy the property at 4,000/sqm. Reyes did not accept the offer as he wanted to sell it at 6,000/sqm. At this point, no agreement was still arrived. On Nov. 2, 1988,Reyes, through its counsel, sent a letter informing Riviera that Reyes was selling the property at 6,000/sqm and that Riviera is given 10 days to purchase the property. As reply, Riviera sent a letter making an offer at 5,000/sqm. However, still no agreement was made between the parties.
Meanwhile, on December 4, 1988, Reyes confided to Rolando P. Traballo, a close family friend and President of Cypress, his predicament about the nearing expiry date of the redemption period of the foreclosed mortgaged property with Prudential Bank, the money for which he could not raise on time thereby offering the subject property to him for Six Thousand Pesos (P6,000.00) per square meter. Traballo expressed interest in buying the said property, told Reyes that he will study the matter and suggested for them to meet the next day. They met the next day, December 5, 1988, at which time Traballo bargained for Five Thousand Three Hundred Pesos (P5,300.00) per square meter. After considering the reasons cited by Traballo for his quoted price, Reyes accepted the same. However, since Traballo did not have the amount with which to pay Reyes, he told the latter that he will look for a partner for that purpose. Reyes told Traballo that he had already afforded Riviera its right of first refusal but they cannot agree because Riviera’s final offer was for Five Thousand Pesos (P5,000.00) per square meter. Sometime in January 1989, apprehensive of the impending expiration in March 1989 of the redemption period of the foreclosed mortgaged property with Prudential Bank and the deal between Re yes and Traballo was not yet formally concluded, Reyes decided to approach anew Riviera. For this purpose, he requested his nephew, Atty. Estanislao Alinea, to approach Angeles and find out if the latter was still interested in buying the subject property and ask him to raise his offer for the purchase of the said property a little higher. As instructed, Atty. Alinea met with Angeles and asked the latter to increase his offer of Five Thousand Pesos (P5,000.00) per square meter but Angeles said that his offer is Five Thousand Pesos (P5,000.00) per square meter.
Following the meeting, Angeles sent a letter dated February 4, 1989 to Reyes, through Atty. Alinea, that his offer is Five Thousand Pesos (P5,000.00) per square meter payment of which would be fifty percent (50%) down within thirty (30) days upon submission of certain documents in three (3) days, the balance payable in five (5) years in equal monthly installments at twelve percent (12%) interest in diminishing balance.With the terms of this second offer, Angeles admittedly downgraded the previous offer of Riviera on December 2, 1988. Atty. Alinea conveyed to Reyes Riviera’s offer of Five Thousand Pesos (P5,000.00) per square meter but Reyes did not agree. Consequently, Atty. Alinea contacted again Angeles and asked him if he can increase his price. Angeles, however, said he cannot add anymore. Reyes did not expressly offer his subject property to Riviera at the price of Five Thousand Three Hundred Pesos (P5,300.00) per square meter. Sometime in February 1989, Cypress and its partner in the venture, Cornhill Trading Corporation, were able to come up with the amount sufficient to cover the redemption money, with which Reyes paid to the Prudential Bank to redeem the subject property. On May 1, 1989, a Deed of Absolute Sale covering the subject property was executed by Reyes in favor of Cypress and Cornhill for the consideration of Five Million Three Hundred Ninety Five Thousand Four Hundred Pesos (P5,395,400.00). On the same date, Cypress and Cornhill mortgaged the subject property to Urban Development Bank for Three Million Pesos (P3,000,000.00). Thereafter, Riviera sought from Reyes, Cypress and Cornhill a resale of the subject property to it claiming that its right of first refusal under the lease contract was violated. After several unsuccessful attempts, Riviera filed the suit to compel Reyes, Cypress, Cornhill and Urban Development Bank to transfer the disputed title to the land in favor of Riviera upon its payment of the price paid by Cypress and Cornhill.Both the trial court and the appellate court rendered judgment in favor of Reyes. ISSUE: Whether or not the CA committee a grave abuse of discretion tantamount to lack or excess of its jurisdiction in deciding petitioner’s appeal at a time when the principal appellee is allegedly dead and no proper substitution of the alleged deceased party has been made; Hence, the decision of the CA and its resolution denying reconsideration, is null and void. HELD: No. On the last error attributed to the Court of Appeals which is the effect on the jurisdiction of the appellate court of the non-substitution of Reyes, who died during the pendency of the appeal, the Court notes that when Riviera filed its petition with this Court and assigned this error, it later filed on October 27, 1994 a Manifestation with the Court of Appeals stating that it has discovered that Reyes is already dead, in view of which the appellate court issued a Resolution dated December 16, 1994 which noted the manifestation of Riviera and directed the counsel of Reyes to submit a copy of the latter’s death certificate and to file the proper motion for substitution of party.Complying therewith, the necessary motion for substitution of deceased Reyes, who died on January 7, 1994, was filed by the heirs, namely, Estefania B. Reyes, Juanita R. de la Rosa, Juan B. Reyes, Jr. and Fidel B. Reyes. Acting on the motion for substitution, the Court of Appeals granted the same.
Notwithstanding the foregoing, Section 16 and 17 of Rule 3 of the Revised Rules of Court, upon which Riviera anchors its argument, has already been amended by the 1997 Rules of Civil Procedure. Even applying the old Rules, the failure of a counsel to comply with his duty under Section 16 of Rule 3 of the Revised Rules of Court, to inform the court of the death of his client and no substitution of such is effected, will not invalidate the proceedings and the judgment thereon if the action survives the death of such party, as this case does, since the death of Reyes did not extinguish his civil personality. The appellate court was well within its jurisdiction to proceed as it did with the case since the death of a party is not subject to its judicial notice. Needless to stress, the purpose behind the rule on substitution of parties is the protection of the right of every party to due process.
SOCORRO SEPULVEDA LAWAS, vs. COURT OF APPEALS, HON. BERNARDO LL. SALAS, [as Judge, CFI, Cebu, Branch VIII], and PACIFICO PELAEZ. G.R. No. L-45809. December 12, 1986. FACTS: This is an appeal by certiorari under Rule 45 of the Revised Rules of Court from the decision of the Court of Appeals which dismissed the petition for certiorari under, Rule 65 of said Rules against respondent Judge Bernardo L. Salas of the Court of First Instance (CFI) of Cebu. The antecedent facts are briefly as follows:
Private respondent Pacifico Pelaez filed a Complaint on December 6, 1972 against petitioner's father, Pedro Sepulveda, for ownership and partition of certain parcels of land. Defendant Pedro Sepulveda filed his Answer dated December 31, 1972 resisting the claim and raising the special defenses of laches, prescription and failure to ventilate in a previous special proceeding. During the presentation of evidence for the plaintiff, the defendant died on March 25, 1975. On May 21, 1975, counsels for the deceased defendant filed a notice of death wherein were enumerated the thirteen children and surviving spouse of the deceased. On May 5, 1975, petitioner filed a petition for letters of administration and she was appointed judicial administratrix of the estate of her late father in July, 1976. At the hearing of the case on November 27, 1975, Attys. Domingo Antigua and Serafin Branzuela, former counsels for the deceased defendant, manifested in open court that with the death of their client, their contract with him was also terminated and none of the thirteen children nor the surviving spouse had renewed the contract, but instead they had engaged the services of other lawyers in the intestate proceedings. Notwithstanding the manifestation of the former counsels of the deceased defendant, the respondent trial judge set the case for hearing on January 13, 1976 and sent the notice of hearing to said counsels. On January 13, 1976, the respondent trial judge issued three orders. The first order substituted the heirs of the deceased defendant, namely, his thirteen children and surviving spouse, as defendants; the second order authorized Atty. Teodoro Almase, counsel for the plaintiff, to present his evidence in the absence of Attys. Antigua and Branzuela and the third order treated the case submitted for decision, after the plaintiff had presented his evidence and rested his case, and directed that said counsels and the fourteen heirs of the deceased defendant be furnished copies thereof. On January 28, 1976, the respondent trial judge rendered a decision against the heirs of the deceased defendant. On February 19, 1976, ten of the children of the deceased defendant, who apparently did not know that a decision had already been rendered, filed an Answer in-substitution of the deceased defendant through their counsel Atty. Jesus Yray. This was denied admission by the respondent trial judge for being already moot and academic because of the earlier decision. On March 9, 1976, the widow and two other children of the deceased defendant, through their counsel Atty. Delfin Quijano, filed a motion for substitution and for reconsideration of the decision dated January 28, 1976. On April 7, 1976, the respondent trial judge issued an order setting aside his decision and setting the case in the calendar for cross-examination of the plaintiff, Pacifico Pelaez, with a proviso that said order was applicable only to the three heirs who had filed the motion. On July 14, 1976, the respondent trial judge lifted
the order setting aside his decision, despite the verbal petition for postponement of the hearing made by one of the three heirs on the ground of the absence of their counsel. On July 9, 1976, petitioner, who had been appointed judicial administratrix of the estate of the deceased defendant and who was one of the heirs who had filed an Answer on February 19, 1976, filed a motion to intervene and/or substitute the deceased defendant. On August 25, 1976, the respondent trial judge denied the motion for the reason that the decision had already become final. Petitioner then filed a special civil action of certiorari with the Court of Appeals to annul the proceedings in the respondent trial court. However, the Court of Appeals dismissed the petition for certiorari. Hence, the present appeal. ISSUE: Whether or not the CFI and CA erred in its decision for failure to comply with Sec. 16, Rule 3, Rules of Court. HELD: Yes. The appeal is meritorious. Section 16 of Rule 3 provides as follows: Duty of attorney upon death, incapacity, or incompetency of party. — Whenever a party to a pending case dies, becomes incapacitated or incompetent, it shall be the duty of his attorney to inform the court promptly of such death, incapacity or incompetency, and to give the name and residence of his executor, administrator, guardian or other l egal representative.
The former counsels for the deceased defendant, Pedro Sepulveda, complied with this rule by filing a notice of death on May 21, 1975. They also correctly manifested in open court at the hearing of the case on November 27, 1975, that with the death of their client their contract with him was also terminated and none of the heirs of the deceased had renewed the contract, and the heirs had instead engaged the services of other lawyers in the intestate proceedings. Both the respondent trial judge and the CA erred in considering the former counsels of the deceased defendant as counsels for the heirs of the deceased. The statement in the decision of the CA that "the appearance of the lawyers of their deceased father in court on January 13, 1976 carries the presumption that they were authorized by the heirs of the deceased defendant" is erroneous. Moreover, such a presumption was not warranted in view of the manifestation of said lawyers in open court on November 27, 1975 that they were not representing the heirs of the deceased defendant. Consequently, when on the same date, November 27, 1975, the respondent trial judge issued an order setting the continuation of the trial of the case on January 13, 1976, with notices sent to Atty. Almase for the plaintiff and Attys. Antigua and Branzuela for the deceased defendant, he acted with grave abuse of discretion amounting to excess of jurisdiction. It was only at the hearing on January 13, 1976 that the respondent trial judge issued an order substituting the deceased defendant with his fourteen heirs. This was followed with an order authorizing counsel for the plaintiff to present his evidence in the absence of Attys. Antigua and Branzuela, and lastly, an order treating the case as submitted for decision. In the order of the respondent trial judge dated November 10, 1976, denying petitioner's motion for reconsideration of the order denying her motion for intervention, mention was made of the delayed arrival of Attys. Antigua and Branzuela at the hearing on January 13, 1976 and of their being allowed to cross-examine the plaintiff himself. The refusal of said former counsels of the deceased defendant to cross-examine the plaintiff was justified —
... in view of the intervening event of appellant's death and the interposition of the equally established principle that the relationship of attorney and client is terminated by the death of the client, as acknowledged by respondent court itself as well as respondents. In the absence of a retainer from the heirs or authorized representatives of his deceased defendant the attorney would have no further power or authority to appear or take any further action in the case, save to inform the court of the client's death and take the necessary steps to safeguard the decedent's rights in the case. (Vda. de Haberer vs. Court of Appeals, May 26, 1981, 104 SCRA 534, 540)
Moreover, as above stated, petitioner had as early as May 5, 1975 filed a petition for letters of administration, and the same was granted in July, 1975. Section 17 of Rule 3 provides as follows: Death of party. After a party dies and the claim is not thereby extinguished, the court shag order, upon proper notice, the legal representative of the deceased to appear and to be substituted for the deceased, within a period of thirty (30) days, or within such time as may be granted. If the legal representative fails to appear within said time, the court may order the opposing party to procure the appointment of a legal representative of the deceased within a time to be specified by the court, and the representative shall immediately appear for and on behalf of the interest of the deceased. The court charges involved in procuring such appointment, if defrayed by the opposing party, may be recovered as costs. The heirs of the de ceased may be allowed to be substituted for the deceased, without requiring the appointment of an executor or administrator and the court may appoint guardian ad litem for the minor heirs.
As this Court has held: ... Under the Rule, it is the court that is called upon, after notice of a party's death and the claim is not thereby extinguished, to order upon proper notice the legal representative of the deceased to appear within a period of 30 days or such time as it may grant. Since no administrator of the estate of the deceased appellant had yet been appointed as the same was still pending determination in the Court of First Instance of Quezon City, the motion of the deceased's counsel for the suspension of the running of the period within which to file appellant's brief was well-taken. More, under the Rule, it should have set a period for the substitution of the deceased party with her legal representative or heirs, failing which, the court is called upon to order the opposing party to procure the appointment of a legal representative of the deceased at the cost of the deceased's estate, and such representative shall then 'immediately appear for and on behalf of the interest of the deceased.
Respondent court gravely erred in not following the Rule and requiring the appearance of the legal representative of the deceased and instead dismissing the appeal of the deceased who yet had to be substituted in the pending appeal Thus, it has been held that when a party dies in an action that survives, and no order is issued by the court for the appearance of the legal representative or of the heirs of the deceased in substitution of the deceased, and as a matter of fact no such substitution has ever been effected, the trial held by the court without such legal representatives or heirs and the judgment rendered after such trial are null and void because the court acquired no jurisdiction over the persons of the legal representatives or of the heirs upon whom the trial and the judgment would be binding. (Ordoveza vs. Raymundo, 63 Phil 275 [1936]; Obut vs. Court of Appeals, et al., 70 SCRA 546) (Vda. de Haberer vs. Court of Appeals, supra, p. 541. Under the said Rule, priority is given to the legal representative of the deceased, that is, the executor or administrator of his estate. It is only in cases of unreasonable delay in the appointment of an executor or administrator, or in cases where the heirs resort to an extrajudicial settlement of the estate, that the court may adopt the alternative of allowing the heirs of the deceased to be substituted for the deceased. In the case at bar, in view of the pendency of Special Proceeding No. 37-SF Intestate Estate of Pedro Sepulveda, and the pending application of petitioner to be appointed judicial administratrix of the estate, the respondent trial judge should have awaited the appointment of petitioner and granted her motion to substitute the deceased defendant. While the lower courts correctly held that the death of Pedro Sepulveda did not obliterate his verified Answer to the Complaint filed by private respondent and that the Answer filed by the ten heirs and the Answer filed by the Administratrix were both unnecessary, the said heirs or the administratrix could, with leave of court, file an Amended Answer. In view of the foregoing, the Court rules that the proceedings conducted by the respondent trial judge after the death of the deceased defendant are null and void.
Armand Nocum and the Philippine Daily Inquirer v. Lucio Tan. G.R. No. 145022. September 23, 2005. FACTS: On September 27, 1998, Lucio Tan filed a complaint against reporter Armand Nocum, Capt. Florendo Umali, ALPAP and Inquirer with the Regional Trial Court of Makati seeking moral and exemplary damages for the alleged malicious and defamatory imputations contained in a news article. INQUIRER and NOCUM filed their joint answer, dated October 27, 1998, wherein they alleged that: (1) the complaint failed to state a cause of action; (2) the defamatory statements alleged in the complaint were general conclusions without factual premises; (3) the questioned news report constituted fair and true report on the matters of public interest concerning a public figure and therefore, was privileged in nature; and (4) malice on their part was negated by the publication in the same article of plaintiffs or PALs side of the dispute with the pilots union. ALPAP and UMALI likewise filed their joint answer, dated October 31, 1998, and alleged therein that: (1) the complaint stated no cause of action; (2) venue was improperly laid; and (3) plaintiff Lucio Tan was not a real party in interest. It appeared that the complaint failed to state the residence of the complainant at the time of the alleged commission of the offense and the place where the libelous article was printed and first published.
RTC Makati: Dismissed the complaint without prejudice on the ground of improper venue. Tan filed an Omnibus Motion dated February 24, 1999, seeking reconsideration of the dismissal and admission of the amended complaint. It included, inter alia, that: the questioned article was printed and first published in the City of Makati and that the questioned caricature was printed and first published in the City of Makati. RTC Makati: admitted the amended complaint and deemed set aside the previous order of dismissal, inter alia, that: The mistake or deficiency in the original complaint appears now to have been cured in the Amended Complaint which can still be properly admitted, pursuant to Rule 10 of the 1997 Rules of Civil Procedure, inasmuch as the Order of dismissal is not yet final. Besides, there is no substantial amendment in the Amended Complaint which would affect the defendants’ defenses and their Answers. The Amendment is merely formal, contrary to the contention of the defendants that it is substantial. CA: Two petitions for certiorari were filed, one filed by petitioners and the other by defendants Umali and ALPAP. The two petitions were consolidated. In April 2000, it ordered the dismissal of the petition and thereby affirming the RTC decision. Motions for reconsideration was filed but was denied. On 11 December 2000, the Court required respondent Tan to comment on the petition filed by petitioners.Respondent filed his comment on 22 January 2001[4] to which petitioners filed a reply on 26 April 2001.In a Manifestation filed on 19 February 2001, respondent stated that the petition[6] filed by defendants Umali and ALPAP has already been denied by the Court in a resolution dated 17 January 2001.On 20 August 2003, the Court resolved to give due course to the petition and required the parties to submit their respective memoranda within thirty (30) days from notice. Both petitioners and respondent complied. ISSUE: Whether or not the RTC of Makati has jurisdiction over the case upon the filing of the original complaint for damages.
HELD: Yes. It is settled that jurisdiction is conferred by law based on the facts alleged in the complaint since the latter comprises a concise statement of the ultimate facts constituting the plaintiff's causes of action. In the case at bar, after examining the original complaint, we find that the RTC acquired jurisdiction over the case when the case was filed before it. From the allegations thereof, respondent’s cause of action is for damages arising from libel, the jurisdiction of which is vested with the RTC.
Petitioners are confusing jurisdiction with venue. Hon. Florenz D. Regalado differentiated jurisdiction and venue as follows: (a) Jurisdiction is the authority to hear and determine a case; venue is the place where the case is to be heard or tried; (b) Jurisdiction is a matter of substantive law; venue, of procedural law; (c) Jurisdiction establishes a relation between the court and the subject matter; venue, a relation between plaintiff and defendant, or petitioner and respondent; and, (d) Jurisdiction is fixed by law and cannot be conferred by the parties; venue may be conferred by the act or agreement of the parties. In the case at bar, the additional allegations in the Amended Complaint that the article and the caricature were printed and first published in the City of Makati referred only to the question of venue and not jurisdiction. These additional allegations would neither confer jurisdiction on the RTC nor would respondents failure to include the same in the original complaint divest the lower court of its jurisdiction over the case. Respondents failure to allege these allegations gave the lower court the power, upon motion by a party, to dismiss the complaint on the ground that venue was not properly laid. The rules on venue in Article 360 as follows: 1. Whether the offended party is a public official or a private person, the criminal action may be filed in the Court of First Instance of the province or city where the libelous article is printed and first published. 2. If the offended party is a private individual, the criminal action may also be filed in the C ourt of First Instance of the province where he actually resided at the time of the commission of the offense.
3. If the offended party is a public officer whose office is in Manila at the time of the commission of the offense, the action may be filed in the Court of First Instance of Manila.
4. If the offended party is a public officer holding office outside of Manila, the action may be filed in the Court of First Instance of the province or city where he held office at the time of the commission of the offense. It is a well-established rule that venue has nothing to do with jurisdiction, except in criminal actions. Assuming that venue were properly laid in the court where the action was instituted, that would be procedural, not a jurisdictional impediment. In fact, in civil cases, venue may be waived. Consequently, by dismissing the case on the ground of improper venue, the lower court had jurisdiction over the case. Apparently, the herein petitioners recognized this jurisdiction by filing their answers to the complaint, albeit, questioning the propriety of venue, instead of a motion to dismiss. The Court held that dismissal of the complaint by the lower court was proper considering that the complaint, indeed, on its face, failed to allege neither the residence of the complainant nor the place where the libelous article was printed and first published. Nevertheless, before the finality of the dismissal, the same may still be amended as in fact the amended complaint was admitted, in view of the court a quos jurisdiction, of which it was never divested. In so doing, the court acted properly and without any grave abuse of discretion. Petitioners argument that the lower court has no jurisdiction over the case because respondent failed to allege the place where the libelous articles were printed and first published would have been tenable if the case filed were a criminal case. The failure of the original complaint to contain such information would be fatal
because this fact involves the issue of venue which goes into the territorial jurisdiction of the court. This is not to be because the case before us is a civil action where venue is not jurisdictional.
Paglaum Management & Development Corp. and Health Marketing Technologies, Inc., vs Union Bank of the Philippines, Notary Public John Doe, and Register of Deeds of Cebu City and Cebu Province. G.R. No. 179018. June 18, 2012. FACTS: Paglaum Management and Development Corporation is the registered owner of three parcels of land located in Cebu. Union Bank extended HealthTech a credit line and to secure this obligation Paglaum exectuted three Real Estate Mortgages in favor of Union Bank. The parties entered into a Restructuring Agreement, which states that any action or proceeding arising out of the transaction shall be commenced in Makati City, with both parties waiving any other venue. The restructuring was due to HealthTech’s f ailure to meet its obligations after the Asian financial crisis adversely affected its business. Despite the restructuring, Heatltech still failed to pay its obligation which prompted Union Bank to institute foreclosure proceedings. Union Bank extra-judicially foreclosed the mortgaged properties. The bank filed a Petition for Consolidation of Title after it won the auction sale.
HealthTech later filed a Complaint for Annulment of Sale and Titles with Damages and Application for Temporary Restraining Order and Writ of Injunction, praying for: (a) the issuance of a temporary restraining order, and later a writ of preliminary injunction, directing Union Bank to refrain from exercising acts of ownership over the foreclosed properties; (b) the annulment of the extra-judicial foreclosure of real properties; (c) the cancellation of the registration of the Certificates of Sale and the resulting titles issued; (d) the reinstatement of PAGLAUMs ownership over the subject properties; and (e) the payment of damages. The complaint was filed in Makati City. Union Bank filed a motion to dismiss of the grounds of, lack of jurisdiction over the issuance of the injunctive relief, improper venue, and lack of authority if the person who signed the Complaint. This motion was granted resulting in the dismissal of the case. Paglaum and HealhTech elevated the case to the CA but was denied. Now, PAGLAUM and HealthTech argue that: (a) the Restructuring Agreement governs the choice of venue between the parties, and (b) the agreement on the choice of venue must be interpreted with the convenience of the parties in mind and the view that any obscurity therein was caused by Union Bank. ISSUE: Whether or not Makati City is the proper venue to assail the foreclosure of the subject real estate mortgage. HELD: Yes, Makati City is the proper venue to assail the foreclosure of the subject real estate mortgage.
In the present case, although the action is a real action, where the properties are situated in Cebu, Paglaum and Union Bank have stipulated that the venue of any case arising from their transaction would be in Makati City. The phrase “ waive any other venue” shows that the choice of venue was only Makati City According to Section 1of Rule 4 of the Rules of Court: Venue of real actions. Actions affecting title to or possession of real property, or interest therein, shall be commenced and tried in the proper court which has jurisdiction over the area wherein the real property involved, or a portion thereof, is situated. Forcible entry and detainer actions shall be commenced and tried in the municipal trial court of the municipality or city wherein the real property involved, or a portion thereof, is situated
According to Sec 3. Rule 4 of the Rules of Court: Sec. 3. When Rule not applicable. This Rule shall not apply a) In those cases where a specific rule or law provides otherwise; or b) Where the parties have validly agreed in writing before the filing of the action on the exclusive venue thereof According to the Supreme Court in Sps. Lantin v. Lantion, “the general rules on venue of actions shall not apply where the parties, before the filing of the action, have validly agreed in writing on an exclusive venue. The mere stipulation on the venue of an action, however, is not enough to preclude parties from bringing a case in other venues. The parties must be able to show that such stipulation is exclusive. In the absence of qualifying or restrictive words, the stipulation should be deemed as merely an agreement on an additional forum, not as limiting venue to the specified place.” Motion for Reconsideration April 17, 2013 Union Bank for the first time, raised three new arguments. First that the restructuring agreement was null and void because the condition precedent that the borrower should not be in default, was not complied with. Second even if the Restructuring Agreement is enforceable, it was only between Health Tech and Union Bank. PAGLAUM was a party only to the Real Estate Mortgages (which was entered into before the Restructuring Agreement) and not to the Restructuring Agreement. Therefore, the venue insofar as it is concerned is exclusively in Cebu City pursuant to the venue stipulation in the mortgage contracts. Third, that the RTC’s assumption of jurisdiction over the case was without basis because, the Complaint being an accion reinvindicatoria the assessed value of the real property determines which court has jurisdiction. It further argues that the complaint does not show the assessed value of the parcels of land. The Supreme Court denied the Motion for Reconsideration because the issues were raised for the first time in a motion for reconsideration. All new issues or defences were deemed waived because they should have been brought up in the first opportunity.
Polytrade Corp. v. Blanco, 30 SCRA 187 FACTS: Suit before the Court of First Instance of Bulacan on four causes of action to recover the purchase price of rawhide delivered by plaintiff to defendant. Plaintiff corporation has its principal office and place of business in Makati, Rizal. Defendant is a resident of Meycauayan, Bulacan. Defendant moved to dismiss upon the ground of improper venue. He claims that by contract suit may only be lodged in the courts of Manila. The Bulacan court overruled him. He did not answer the complaint. In consequence, a default judgment was rendered against him on September 21, 1966, thus: WHEREFORE, judgment is hereby rendered in favor of plaintiff and against defendant ordering defendant to pay plaintiff the following amounts: First Cause of Action — P60,845.67, with interest thereon at 1% a month from May 9, 1965 until the full amount is paid. Second Cause of Action — P51,952.55, with interest thereon at 1% a month from March 30, 1965 until the full amount is paid. Third Cause of Action — P53,973.07, with interest thereon at 1% a month from July 3, 1965 until the full amount is paid. Fourth Cause of Action — P41,075.22, with interest thereon at 1% a month until the full amount is paid. In addition, defendant shall pay plaintiff attorney's fees amounting to 25% of the principal amount due in each cause of action, and the costs of the suit. The amount of P400.00 shall be deducted from the total amount due plaintiff in accordance with this judgment.
Defendant appealed. ISSUE: Whether or not venue was properly laid in the province of Bulacan where defendant is a resident. HELD: Yes, venue was proper. Section 2 (b), Rule 4 of the Rules of Court on venue of personal actions triable by courts of first instance — and this is one — provides that such "actions may be commenced and tried where the defendant or any of the defendants resides or may be found, or where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff." Qualifying this provision in Section 3 of the same Rule which states that venue may be stipulated by written agreement — "By written agreement of the parties the venue of an action may be changed or transferred from one province to another."
Defendant places his case upon Section 3 of Rule 4 just quoted. According to defendant, plaintiff and defendant, by written contracts covering the four causes of action, stipulated that: "The parties agree to sue and be sued in the Courts of Manila." This agreement is valid. Defendant says that because of such covenant he can only be sued in the courts of Manila. We are thus called upon to shake meaning from the terms of the agreement just quoted. No such stipulation appears in the contracts covering the first two causes of action. The general rule set forth in Section 2 (b), Rule 4, governs, and as to said two causes of action, venue was properly laid in Bulacan, the province of defendant's residence. The stipulation adverted to is only found in the agreements covering the third and fourth causes of action. An accurate reading, however, of the stipulation, "The parties agree to sue and be sued in the Courts of Manila," does not preclude the filing of suits in the residence of plaintiff or defendant.
The plain meaning is that the parties merely consented to be sued in Manila. Qualifying or restrictive words which would indicate that Manila and Manila alone is the venue are totally absent therefrom. We cannot read into that clause that plaintiff and defendant bound themselves to file suits with respect to the last two transactions in question only or exclusively in Manila. It simply is permissive. The parties solely agreed to add the courts of Manila as tribunals to which they may resort. They did not waive their right to pursue remedy in the courts specifically mentioned in Section 2(b) of Rule 4. Renuntiatio non praesumitur.
Sweet Lines Inc. v. Hon. Judge Bernardo Teves, Leovigildo Tandog Jr. and Rogelio Tiro. G.R. No. L-37750. May 19, 1978. FACTS: Respondents Atty. Leovigildo Tandog and Rogelio Tiro bought two tickets in the branch office of Sweet Lines at Cagayan de Oro City (CDO) for Voyage 90 aswere scheduled to board in the petitioner’s vessel M/S Sweet Hope bound for Tagbilaran City via the port of Cebu. However, upon knowing that the vessel will not anymore proceed to Bohol, Tandog and Tiro went again to the branch office of Sweet Lines for proper relocation to M/S Sweet Town. And while on board on the said vessel, the two were forced to hide at the cargoes section of the ship to avoid the inspection being conducted by the Philippine Coastguard since the vessel already reached its passenger capacity. During the trip, Tandog and Tiro alleged that they were exposed to the scorching heat of the sun and dust coming from the cargoes. They also claimed that the tickets they bought in CDO were dishonored as they were constrained to pay for other tickets. The incident prompted Tandog and Tiro to sue Sweet Lines for damages and for breach of contract of carriage before the CFI of Misamis Oriental.
Sweet Lines moved to dismiss the case on the ground of improper venue basing the said dismissal on the condition printed at the back of the tickets that where in any case, all actions arising out of the conditions and provisions of the said tickets shall only be filed in the courts in the city of Cebu. Thereafter, Respondent Judge Teves denied the motion to dismiss filed by Sweet Lines which thereafter filed a motion for reconsideration from the order of denial but to no avail. Thus, Sweet Lines filed an instant petition for prohibition for preliminary injunction to the Supreme Court praying that the respondent judge be restrained from proceeding further with the case filed by Tandog and Tiro for grave abuse of discretion amounting to lack of jurisdiction. Sweet Lines contends that the condition printed on the tickets is valid and enforceable since Tandog and Tiro acceded to it when they purchased the same in CDO and took its vessel M/S Sweet Town as a relocation vessel. They also argued that the condition is binding among the respondents since it is a valid waiver of venue. On the other hand, respondents countered that the said condition is invalid considering that the same is not an essential element of the contract of carriage, being in itself a separate agreement which requires the mutual consent of both parties. They also claimed that such condition is prepared solely by Sweet Lines by which they could not refuse, leaving them no choice but to pay and avail the said tickets out of necessity. ISSUES: (1) Whether or not the condition printed at the back of the ticket which limits the venue of actions arising from the contract of carriage is valid and enforceable.
(2) Whether or not the condition constitutes a valid waiver as to venue HELD: (1) No. The condition printed on the ticket is void and unenforceable.
The one involved in the case is a contract of adhesion in which the validity and/or enforceability will have to be determined by peculiar circumstances obtaining in each case and the nature of the conditions or terms sought to be enforced. Generally, contracts of adhesion are drafted and prepared only by one party and is sought to be accepted or adhered by the other party who cannot change the same and who are thus made to adhere thereto on the “take it” or “leave it” basis. Because of such imbalance nature of this kind of contract, jurisprudence formulated certain guidelines in the determination of their validity and enforceability in order to
establish justice and fair play by placing the weaker party on equal footing with another who solely prepared the same. In the case at bar, the Court ruled that such condition imposed on the ticket by petitioner Sweet Lines is void and unenforceable for it would be unfair, considering that Sweet Lines is engaged in inter-land shipping transportation business, to bind passengers to the terms of conditions printed at the back of the tickets and prejudice their rights and interests to file suits against the petitioner as it solely imposed that such actions should only be filed in the courts of Cebu city. And under these circumstances, it is hardly just and proper to expect the passengers to examine their tickets received from crowded/congested counters, more often than not during rush hours, for conditions that may be printed much charge them with having consented to the conditions, so printed, especially if there are a number of such conditions in fine print, as in this case. With regard to the rules on venue, the Court held that: “The condition cited above is subversive of public policy on transfers of venue of actions. For, although venue may be changed or transferred from one province to another by agreement of the parties in writing in relation to Rule 4, Section 3, of the Rules of Court, such agreement will not be held valid where it practically negates the action of the claimants, such as the private respondents herein. The philosophy underlying the provisions on transfer of venue of actions is the convenience of the plaintiffs as well as his witnesses and to promote the ends of justice. Considering the expense and trouble a passenger residing outside of Cebu City would incur to prosecute a claim in the City of Cebu, he would most probably decide not to file the action at all. The condition will thus defeat, instead of enhance, the ends of justice. Upon the other hand, petitioner has branches or offices in the respective ports of call of its vessels and can afford to litigate in any of these places. Hence, the filing of the suit in the CFI of Misamis Oriental, as was done in the instant case, will not cause inconvenience to, much less prejudice, petitioner”.
Republic of the Philippines vs. Sandiganbayan et al. G.R. No. 152154. July 15, 2003. FACTS: In December 1991, Republic, through the Presidential Commission on Good Government (PCGG), filed a petition for forfeiture before the Sandiganbayan, pursuant to Republic Act 1379. The petition sought the declaration of the amount of US$356 million (now estimated to be more than US$658 million inclusive of interest) deposited in escrow in the PNB, as ill-gotten wealth of the Marcos family. The funds were previously deposited in Swiss banks under the name of various foreign foundations.
Before the case was set for pre-trial, the Marcos children and then PCGG Chairman Magtanggol Gunigundo executed a “General Agreement and the Supplemental Agreements” (hereafter “Agreements”), dated December 28, 1993, for a global settlement of the assets of the Marcos family. The Agreement specified in its whereas clause that the Philippine government had "obtained a judgment from the Swiss Federal Tribunal on December 21, 1990, that the US$356 million belongs in principle to the Republic of the Philippines provided certain conditionalities are met...” Subsequently, the Marcos children filed a motion for the approval of said Agreements. While hearings were being conducted on the said motion, the Republic filed a motion for summary judgment and/or judgment on the pleadings. The Sandiganbayan initially granted Republic's motion for summary judgment on the ground that “there is no issue of fact which calls for the presentation of evidence. ” However, it later reversed itself and denied the motion for summary judgment on the ground that the original copies of the authenticated Swiss deci sions and their "authenticated translations" have not been submitted to the court. ISSUES:
1. 2. 3. 4. 5. 6. 7.
Whether or not Certiorari lies. Whether or not there can be Summary Judgment. Whether or not the Marcoses were able to specifically deny allegations. Whether or not the Republic is Guilty of Estopppel by Laches. Whether or not the Forfeiture was proper. Whether or not Admissions remain binding even if document which contained it is declared defective. Whether or not the Non-Joinder of Indispensible Party Deprives the Court of Jurisdiction to Try the Case.
HELD: Propriety of Certiorari when Remedy of Appeal is Available
1. This case was treated as an exception to the general rule governing petitions for certiorari. Normally, decisions of the Sandiganbayan are brought before this Court under Rule 45, not Rule 65.[20] But where the case is undeniably ingrained with immense public interest, public policy and deep historical repercussions, certiorari is allowed notwithstanding the existence and availability of the remed y of appeal. 2. In all the alleged ill-gotten wealth cases filed by the PCGG, this Court has seen fit to set aside technicalities
and formalities that merely serve to delay or impede judicious resolution. Propriety of Summary Judgment
3. The respondent Marcoses failed to raise any genuine issue of fact in their pleadings. Thus, on motion of petitioner Republic, summary judgment should take place as a matter of right. 4. Summary judgment is a judgment which a court may render before trial but after both parties have pleaded. It is ordered by the court upon application by one party, supported by affidavits, depositions or other documents, with notice upon the adverse party who may in turn file an opposition supported also by affidavits, depositions or other documents. This is after the court summarily hears both parties with their respective proofs and finds that there is no genuine issue between them. (See Auman vs. Estenzo) 5. Summary judgment is sanctioned in this jurisdiction by Section 1, Rule 35 of the 1997 Rules of Civil Procedure, to wit: SECTION 1. Summary judgment for claimant.- A party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain a declaratory relief may, at any time after the pleading in answer thereto has been served, move with supporting affidavits, depositions or admissions for a summary judgment in his favor upon all or any part thereof. 6. Summary judgment is proper when there is clearly no genuine issue as to any material fact in the action . The theory of summary judgment is that, although an answer may on its face appear to tender issues requiring trial, if it is demonstrated by affidavits, depositions or admissions that those issues are not genuine but sham or fictitious, the Court is justified in dispensing with the trial and rendering summary judgment for petitioner. 7. It is the law itself which determines when summary judgment is called for. Under the rules, summary judgment is appropriate when there are no genuine issues of fact requiring the presentation of evidence in a full blown trial. Even if on their face the pleadings appear to raise issue, if the affidavits, depositions and admissions show that such issues are not genuine, then summary judgment as prescribed by the rules must ensue as a matter of law. Marcoses failed to tender any genuine issue in their answer
8. A genuine issue is an issue of fact which calls for the presentation of evidence as distinguished from an issue which is fictitious and contrived, set up in bad faith or patently lacking in substance so as not to constitute a genuine issue for trial. 9. The Court finds that respondent Mrs. Marcos and the Marcos children indubitably failed to tender genuine issues in their answer to the petition for forfeiture. Their defenses of "lack o f knowledge for lack of privity" or "(inability to) recall because it happened a long time ago" or, on the part of Mrs. Marcos, that "the funds were lawfully acquired" are fully insufficient to tender genuine issues. Respondent Marcoses' defenses were a sham and evidently calibrated to compound and confuse the issues. Since no genuine issue was raised, the case became ripe for summary judgment Marcoses failed to specifically deny allegations
10. In their answer, respondents failed to specifically deny each and every allegation contained in the petition for forfeiture in the manner required by the rules. As to Mrs Marcos, her assertion that the funds were lawfully acquired is unaccompanied by any factual support which can prove, by the presentation of evidence at a hearing, that indeed the funds were acquired legitimately by the Marcos family
11. It is true that one of the modes of specific denial under the rules is a denial through a statement that the defendant is “without knowledge or information sufficient to form a belief as to the truth of the material averment in the complaint.” The question, however, is whether the kind of denial in respondents' answer qualifies as the specific denial called for by the rules. We do not think so. If an allegation directly and specifically charges a party with having done, performed or committed a particular act which the latter did not in fact do, perform or commit, a categorical and express denial must be made . (see Morales vs. Court of Appeals) 12. It is worthy to note that the pertinent documents attached to the petition for forfeiture were even signed personally by respondent Mrs. Marcos and her late husband, Ferdinand E. Marcos, indicating that said documents were within their knowledge. How could respondents therefore claim lack of sufficient knowledge or information regarding the existence of the Swiss bank deposits and the creation of five groups of accounts when Mrs. Marcos and her late husband personally masterminded and participated in the formation and control of said foundations? This is a fact respondent Marcoses were never able to explain. 13. When matters regarding which respondents claim to have no knowledge or information sufficient to form a belief are plainly and necessarily within their knowledge, their alleged ignorance or lack of information will not be considered a specific denial. An unexplained denial of information within the control of the pleader, or is readily accessible to him, is evasive and is insufficient to constitute an effective denial. Simply put, a profession of ignorance about a fact which is patently and necessarily within the pleader's knowledge or means of knowing is as ineffective as no denial at all. Respondents' ineffective denial thus failed to properly tender an issue and the averments contained in the petition for forfeiture were deemed judicially admitted by them Negative pregnant
14. The denial of respondents in paragraph 22 of their answer was worded as follows: “ Respondents specifically DENY paragraph 23 insofar as it alleges that Respondents clandestinely stashed the country's wealth in Switzerland and hid the same under layers and layers of foundations and corporate entities for being false, the truth being that Respondents' aforesaid properties were lawfully acquired .” 15. This particular denial is in the nature of a negative pregnant, that is, a denial pregnant with the admission of the substantial facts in the pleading responded to which are not squarely denied. It was in effect an admission of the averments it was directed at. Stated otherwise, a negative pregnant is a form of negative expression which carries with it an affirmation or at least an implication of some kind favorable to the adverse party. It is a denial pregnant with an admission of the substantial facts alleged in the pleading. Where a fact is alleged with qualifying or modifying language and the words of the allegation as so qualified or modified are literally denied, has been held that the qualifying circumstances alone are denied while the fact itself is admitted. 16. The denial contained in paragraph 22 of the answer was focused on the averment in paragraph 23 of the petition for forfeiture that "Respondents clandestinely stashed the country's wealth in Switzerland and hid the same under layers and layers of foundations and corporate entities." Paragraph 22 of the respondents' answer was thus a denial pregnant with admissions of the following substantial facts: (1) the Swiss bank deposits existed and (2) that the estimated sum thereof was US$356 million as of December, 1990. 17. Therefore, the allegations in the petition for forfeiture on the existence of the Swiss bank deposits in the sum of about US$356 million, not having been specifically denied by respondents in their answer, were deemed admitted by them pursuant to Section 11, Rule 8 of the 1997 Revised Rules on Civil Procedure: “ Material averment in the complaint, xxx shall be deemed admitted when not specifically denied .”
Motion for Summary Judgment allowed at any stage of the litigation
18. Petitioner moved for summary judgment after pre-trial and before its scheduled date for presentation of evidence. Respondent Marcoses argue that, by agreeing to proceed to trial during the pre-trial conference, petitioner "waived" its right to summary judgment. 19. The phrase "anytime after the pleading in answer thereto has been served" in Section 1, Rule 35 of our Rules of Civil Procedure means "at any stage of the litigation." Whenever it becomes evident at any stage of the litigation that no triable issue exists, or that the defenses raised by the defendant(s) are sham or frivolous, plaintiff may move for summary judgment. A contrary interpretation would go against the very objective of the Rule on Summary Judgment which is to "weed out sham claims or defenses thereby avoiding the expense and loss of time involved in a trial." 20. Petitioner Republic could validly move for summary judgment any time after the respondents' answer was filed or, for that matter, at any subsequent stage of the litigation. The fact that petitioner agreed to p roceed to trial did not in any way prevent it from moving for summary judgment, as indeed no genuine issue of fact was ever validly raised by respondent Marcoses. Republic not Guilty of Estopppel by Laches
21. Estoppel by laches is the failure or neglect for an unreasonable or unexplained length of time to do that which, by exercising due diligence, could or should have been done earlier, warranting a presumption that the person has abandoned his right or declined to assert it. In effect, therefore, the principle of laches is one of estoppel because "it prevents people who have slept on their rights from prejudicing the rights of third parties who have placed reliance on the inaction of the original parties and their successors-in-interest". 22. Records show that petitioner was in fact never remiss in pursuing its case against respondent Marcoses through every remedy available to it, including the motion for summary judgment. 23. In invoking the doctrine of estoppel by laches, respondents must show not only unjustified inaction but also that some unfair injury to them might result unless the action is barred. 24. But even assuming for the sake of argument that laches had already set in, the doctrine of estoppel or laches does not apply when the government sues as a sovereign or asserts governmental rights . Nor can estoppel validate an act that contravenes law or public policy. Propriety of Forfeiture
25. The law raises the prima facie presumption that a property is unlawfully acquired, hence subject to forfeiture, if its amount or value is manifestly disproportionate to the official salary and other lawful income of the public officer who owns it. (See Sections 2 and 6 of Republic Act No. 1379) 26. The total accumulated salaries of Mr and Mrs Marcos amounted to P2,319,583.33. Converted to U.S. dollars on the basis of the corresponding peso-dollar exchange rates prevailing during the applicable period when said salaries were received, the total amount had an equivalent value of US$304,372.43. Since the President and his family were constitutionally prohibited from receiving any other emolument during their tenure, their only known lawful income of $304,372.43 can therefore legally and fairly serve as basis for determining the existence of a prima facie case of forfeiture of the Swiss funds. Admissions remain binding even if document which contained it is declared defective
27. The General and Supplemental Agreements were declared by the court to be null and void. Respondent
therefore insist that nothing in those agreements could thus be admitted in evidence against them. 28. The declaration of nullity of said agreements was premised on the following constitutional and statutory infirmities: (1) the grant of criminal immunity to the Marcos heirs was against the law; (2) the PC GG's commitment to exempt from all forms of taxes the properties to be retained by the Marcos heirs was against the Constitution; and (3) the government's undertaking to cause the dismissal of all cases filed against the Marcoses pending before the Sandiganbayan and other courts encroached on the powers of the judiciary. The reasons relied upon by the Court never in the least bit even touched on the veracity and truthfulness of respondents' admission with respect to their ownership of the Swiss funds. 29. The declaration of nullity of the two agreements rendered the same without legal effects but it did not detract from the admissions of the respondents contained therein. Th e admissions made in said agreements remain binding on the respondents 30. A written statement is nonetheless competent as an admission even if it is contained in a document which is not itself effective for the purpose for which it is made, either b y reason of illegality, or incompetency of a party thereto, or by reason of not being signed, executed or delivered. Accordingly, contracts have been held as competent evidence of admissions, although they may be unenforceable. Judicial Admission
31. An admission made in the pleadings cannot be controverted by the party making such admission and becomes conclusive on him, and that all proofs submitted by him contrary thereto or inconsistent therewith should be ignored, whether an objection is interposed by the adverse party or not. 32. In the absence of a compelling reason to the contrary, respondents' judicial admission of ownership of the Swiss deposits is definitely binding on them. Admission by Privies and Admission by Co-Parties
33. Section 31, Rule 130 of the Rules of Court, provides: “ Where on e derives title to property from another, the act, declaration, or omission of the latter, while holding the title, in relation to the property, is e vidence against the former” 34. The declarations of a person are admissible against a party whenever a "privity of estate" exists between the declarant and the party, the term "privity of estate" generally denoting a succession in rights. Consequently, an admission of one in privity with a party to the record is competent. Without doubt, privity exists among the respondents in this case. And where several co-parties to the record are jointly interested in the subject matter of the controversy, the admission of one is competent against all. Non-Joinder of Indispensible Party Does Not Deprive Court of Jurisdiction to Try the Case
35. Republic did not err in not impleading the foreign foundations. Section 7, Rule 3 of the 1997 Rules of Civil Procedure, provides for the compulsory joinder of indispensable parties. Generally, an indispensable party must be impleaded for the complete determination of the suit. However, failure to join an indispensable party does not divest the court of jurisdiction since the rule regarding indispensable parties is founded on equitable considerations and is not jurisdictional. Thus, the court is not divested of its power to render a decision even in the absence of indispensable parties, though such judgment is not binding on the non-joined party . 36. There are two essential tests of an indispensable party: (1) can relief be afforded the plaintiff without the presence of the other party? and (2) can the case be decided on its merits without prejudicing the rights of the other party? There is, however, no fixed formula for determining who is an indispensable party; this can onl y be
determined in the context and by the facts of the particular suit or litigation. 37. The foreign foundations were set up to conceal the illegally acquired funds of the Marcos spouses. Thus, they were simply the res in the action for recovery of ill-gotten wealth and did not have to be impleaded for lack of cause of action or ground to implead them. 38. As to corporations organized with ill-gotten wealth, but are not themselves guilty of misappropriation, fraud or other illicit conduct - in other words, the companies themselves are not the object or thing involved in the action, the res thereof - there is no need to implead them either. Indeed, their impleading is not proper on the strength alone of their having been formed with ill-gotten funds, absent any other particular wrongdoing on their part 39. Assuming arguendo, however, that the foundations were indispensable parties, the failure of petitioner to implead them was a curable error. The Rules of Court prohibit the dismissal of a suit on the ground of non joinder or misjoinder of parties and allows the amendment of the complaint at any stage of the proceedings, through motion or on order of the court on its own initiative. Failure to submit authenticated translations of the Swiss decision not fatal to Republic's cause
40. The presentation of the authenticated translations of the original copies of the Swiss decision was not de rigueur for the Sandiganbayan to make findings of fact and reach its conclusions. In short, the Sandiganbayan's decision was not dependent on the determination of the Swiss courts. For that matter, neither is this Court's. 41. The release of the Swiss funds held in escrow in the PNB is dependent solely on the decision of this jurisdiction that said funds belong to the petitioner Republic. What is important is our own assessment of the sufficiency of the evidence to rule in favor of either petitioner Republic or respondent Marcoses. In this instance, despite the absence of the authenticated translations of the Swiss decisions, the evidence on hand tilts convincingly in favor of petitioner Republic. 42. The respondent Marcoses failed to justify the lawful nature of their acquisition of the said assets. Hence, the Swiss deposits should be considered ill-gotten wealth and forfeited in favor of the State in accordance with Section 6 of RA 1379
Philtranco Services Enterprises, Inc. v. Felix Paras and Inland Trailways, Inc. and Hon. Court of Appeals. G.R. No. 161909. April 25, 2012. FACTS: Felix Paras, on his way home to Manila from Bicol Region, he boarded a bus owned and operated by Inland Trailways, Inc.While the said bus was travelling along Maarlika Highway, Tiaong Quezon, around 3:50am of 09 February 1987, it was bumped at the rear by another bus owned and operated by Philtranco Service Enterprises, Inc. As a result of the strong and violent impact, the Inland bus was pushed forward and smashed into a cargo truck parked along the outer right portion of the highway and the shoulder thereof.
The accident brought considerable damage to the vehicles, caused physical injuries to the passengers and crew of the two buses, and took the life of Inland’s driver. Paras also suffered from contusions, dislocation of the hip, and fractures.Inland refused to give financial assistance to Paras, and the latter filed a complaint for breach of contract of carriage against Inland. In its defense, Inland claims that the proximate cause of the injuries of Paras was the bus of Philtranco. Inland, with leave of court, filed a third party complaint against Philtranco and its bus driver. The RTC ordered Philtranco and its driver to pay damages to Paras. All parties appealed to the CA which affirmed the liability of Philtranco and its driver. It awarded moral dama ges and exemplary damages. ISSUE: Whether or not the award of moral damages and temperate damages is improper. HELD: No. There is no issue that the proximate cause of the injury of Paras and material damage to Inland is caused by the negligence of Philtranco and its driver.
1. Award of moral damages proper. As a general rule, indeed, moral damages are not recoverable in an action predicated on a breach of contract. By way of exception, it may be recoverable even if an action is predicated on breach of contract where (a) the mishap results in death of a passenger, and (b) where the common carrier has been guilty of fraud or bad faith. In this case, even if this action does not fall under either exception, the award is proper. Undeniably, Inland filed its third-party complaint against Philtranco and its driver in order to establish in this action that they, instead of Inland, should be directly liable to Paras for the physical injuries he had sustained because of their negligence. The apparent objective of Inland was to obtain a different relief whereby the third-party defendants would be held directly, fully and solely liable to Paras and Inland for whatever damages each had suffered from the negligence committed by Philtranco and its driver. In other words, Philtranco and its driver were charged here as joint tortfeasors who would be jointly and severally be liable to Paras and Inland. Impleading Philtranco and its driver under a third party complaint is correct. The impleader of new parties under this rule is proper only when a right to relief exists under the applicable substantive law. The substantive law backing Inland’s claim is Art. 2176 and Art. 2180 of the Civil Code, which deals with quasidelicts and vicarious liability of employers over the acts or omissions of their emplo yees, respectively.
The institution of the third party complaint is also properly made. The requisites for a third-party action are: (1) The party to be impleaded must not yet be a party to the action; (2) that the claim against the third-party defendant must belong to the original defendant; (3) the claim of the original defendant against the third-party defendant must be based upon the plaintiffs claim against the original defendant; and, (4) the defendant is attempting to transfer to the third-party defendant the liability asserted against him by the original plaintiff. Paras cause of action against Inland (breach of contract of carriage) did not need to be the same as the cause of action of Inland against Philtranco and its driver (tort or quasi-delict) in the impleader. The third-party claim need not be based on the same theory as the main claim. Nor was it a pre-requisite for attachment of the liability to Philtranco and its driver that Inland be first declared and found liable to Paras for the breach of its contract of carriage with him as precisely, the theory of defendant is that it is the third party defendant, and not he, who is directly liable to plaintiff. 2. Award of temperate damages proper. Actual damages, to be recoverable, must not only be capable of proof, but must actually be proved with a reasonable degree of certainty. The reason is that the court cannot simply rely on speculation, conjecture or guesswork in determining the fact and amount of damages, but there must be competent proof of the actual amount of loss, credence can be given only to claims which are duly supported by receipts. In this case, although both Paras and Inland both suffered from the negligence of Philtranco and its driver, they were unable to show sufficient proof as to the actual amount of loss they sustained. Nevertheless, the award of Temperate Damages was proper, per Art. 2224 of the Civil Code, which states that: “Temperate or moderate damages, which are more than nominal but less than compensatory damages, may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be proved with certainty.”
Temperate damages are allowed because there are cases where from the nature of the case, definite proof of pecuniary loss cannot be offered, although the court is convinced that there has been such loss. Such obtains in this case. It is relevant to clarify that awarding the temperate damages (for the substantial pecuniary losses corresponding to Paras’ surgeries and rehabilitation and for the irreparability of Inlands damaged bus) and the actual damages to compensate lost earnings and costs of medicines give rise to no incompatibility. These damages cover distinct pecuniary losses suffered by Paras and Inland, and do not infringe the statutory prohibition against recovering damages twice for the same act or omission.
FELIX MARTOS, ET. AL. VS. NEW SAN JOSE BUILDERS, INC. G.R. NO. 192650. OCTOBER 24, 2012. FACTS: New San Jose Builders, Inc. (respondent) is a domestic corporation engaged in the construction of road, bridges, buildings, and low cost houses primarily for the government. One of the projects of respondent is the San Jose Plains Project (SJPP), located in Montalban, Rizal. SJPP, which is also known as the "Erap City" calls for the construction of low cost housing, which are being turned over to the National Housing Authority to be awarded to deserving poor families.
Sometime in 2000, respondent was constrained to suspend most of the works on the SJPP project due to lack of funds of the National Housing Authority. The workers were, thus, informed that many of them would be laid off and the rest would be reassigned to other projects. Juan Villaber, Terso Garay, Rowell Batta, Pastor Pantig, Rafael Villa, and Melvin Garay were laid off. On the other hand, Felix Martos (Martos), Ariel Dominguez, Greg Bisonia, Allan Caballera, Orlando Limos, Mandy Mamalateo, Eric Castrence, Anthony Molina, and Roy Silva were among those who were issued new appointment papers to their respective assignments, indicating therein that they were project employees. However, they refused to sign the appointment papers as project employees and subsequently refused to continue to work. Three Complaints were consolidated and assigned to the Labor Arbiter (LA). Ruling of the Labor Arbiter
On May 23, 2003, the LA handed down a decision declaring, that Martos was illegally dismissed and entitled to separation pay, backwages and other monetary benefits; and, dismissing, without prejudice, the claims of the other complainants (petitioners). Ruling of the NLRC
Both parties appealed the LA decision to the NLRC. And on July 30, 2008, the NLRC resolved the appeal by dismissing the one filed by respondent and partially granting that of the other petitioners. Respondents were ordered to pay respondents their salary differentials, service incentive leave pay, and 13th month pay, using, as basis, the computation made on the claims of complainant Felix Martos. Ruling of the CA
After the denial of its motion for reconsideration, respondent filed before the CA a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, as amended, raising the issue of commission of grave abuse of discretion by NLRC as to holding Martos regular employee, as to reviving complaints of the petitioners despite failure to verify the same, and as to granting relief in favor of complainants who did not even render service. On July 31, 2009, the CA rendered a decision reversing and setting aside the Decision and Resolution of the NLRC and reinstating the Decision of the LA. The CA found that the NLRC committed grave abuse of discretion in reviving the complaints of petitioners despite their failure to verify the same. Out of the 102 complainants, only Martos verified the position paper and his counsel never offered any explanation for his failure to secure the verification of the others. The CA also held that the NLRC gravely abused its discretion when it took cognizance of petitioners’
appeal because Rule 41, Section 1(g) of the 1997 Rules of Civil Procedure, as amended, which is suppletory, provides that no appeal may be taken from an order dismissing an action without prejudice. With respect to Martos, the CA ruled that he was a regular employee of respondent and his termination constitute constructive illegal dismissal. It explained that Martos should have been considered a regular employee because there was no indication that he was merely a project employee when he was hired. To show otherwise, respondent should have presented his employment contract for the alleged specific project and the successive employment contracts for the different projects or phases for which he was hired. In the absence of such document, he could not be considered a project employee because his work was necessary and desirable to the respondent’s usual business and that he was not required to sign any employment contract fixing a definite period or duration of his engagement. Notwithstanding, the respondent also failed to report the termination of Martos’ supposed project employment to the Department of Labor and Employment, as required under Department Order No. 19. ISSUES: Whether or not the CA is correct in dismissing the complaints filed by those petitioners who failed to verify their position papers. HELD: Yes. The absence of a proper verification is cause to treat the pleading as unsigned and dismissible. The verification requirement is significant, as it is 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. Verification is deemed substantially complied with when, as in this case, one who has ample knowledge to swear to the truth of the allegations in the complaint or petition signs the verification, and when matters alleged in the petition have been made in good faith or are true and correct. The lone signature of Martos would have been sufficient if he was authorized by his co-petitioners to sign for them. Unfortunately, petitioners failed to adduce proof that he was so authorized. Considering that the dismissal of the other complaints by the LA was without prejudice, the other complainants should have taken the necessary steps to rectify their procedural mistake after the decision of the LA was rendered. They should have corrected this procedural flaw by immediately filing another complaint with the correct verification this time. Surprisingly, they did not even attempt to correct this technical blunder. Worse, they committed the same procedural error when they filed their appeal with the NLRC. The petitioners were given a chance by the CA to comply with the Rules when they filed their motion for reconsideration, but they refused to do so. Despite the opportunity given to them to make all of them sign the verification and certification of non-forum shopping, they still failed to comply. Thus, the CA was constrained to deny their motion and affirm the earlier resolution.
Georgia T. Estel vs. Heirs of Recaredo P. Diego, Sr. G.R. No. 174082. January 16, 2012. FACTS: A Complaint for Forcible Entry, Damages and Injunction with Application for Temporary Restraining Order filed by Recaredo P. Diego, Sr., and Recaredo R. Diego, Jr. with the Municipal Trial Court in Cities (MTCC) of Gingoog City, Misamis Oriental. They alleged that:
1. On April 16, 1991, they entered into a contract of sale of a 306 – squaremeter parcel of land with Georgia Estel 2. After receiving the amount of P17,000.00 as downpayment, Estel delivered the physical and material possession of the subject property to them; 3. They had been in actual, adverse and uninterrupted possession of the lot; 4. July 20, 1995, Estel, together with her two sons and five other persons, uprooted the fence surrounding the disputed lot, after which they entered its premises and then cut and destroyed the trees and plants found therein; 5. The Diegos prayed for the restoration of their possession, for the issuance of a permanent injunction against Estel as well as payment of damages, attorne y’s fees and costs of suit. On July 26, 1995, the MTCC issued a Temporary Restraining Order against Estel and any person acting in her behalf. In her Answer with Special/Affirmative Defenses and Counterclaims, she d enied the material allegations in the Complaint, and contended that: 1. The Diegos were never in possession of the lot; 2. Estel had the full possession and absolute ownership of the lot 3. The agreement she entered into with the Diegos for the sale of the lot had been abrogated;she even offered to return the amount she received from them, but they refused to accept 4. The subject of the deed of sale between her and the Diegos and what has been delivered to respondents was actually Lot 16 which is adjacent to the disputed Lot 19; 5. That the improvements found on the subject lot were not destroyed, and in fact, any improvements therein were planted by her parents. MTCC rendered a Decision dismissing Estel’s counter claim and ordered her, her agents and representatives: 1. To vacate the premises of the land in question and return the same to the plaintiffs; 2. To pay plaintiffs P100.00 a month as rentals ; P5,000.00 representing the value of the fence and plants damaged by the defendants as actual damages; P20,000.00 as and for attorney’s fees; P2,000.00 for litigation expenses.
Estel appealed to the RTC of Gingoog City. The RTC rendered its Decision affirming the decision of the MTC. She then filed a petition for review with the CA. The CA promulgated its Decision which affirmed the Decision of the RTC. She filed a Motion for Reconsideration, but the CA denied it. She therefore appealed before the Supreme Court.
ISSUES: (1) Whether or not MTCC acquired jurisdiction over the subject matter of the complaint on the grounds that the Diegos failed to allege the location of the disputed parcel of land in their complaint, and that there was failure to specifically allege facts constitutive of forcible entry in the complai nt.
(2) Whether or not the defects in the Verification and Certification of Non-forum Shopping in the Complaint will make it an unsigned pleading. HELD: (1) No, the Supreme Court does not agree with Estel. Estel did not raise the issue of jurisdiction or venue in her Answer filed with the MTCC. Even if the geographical location of the subject property was not alleged in the Complaint, she failed to seasonably object to it in her Affirmative Defense, and even actively participated in the proceedings before the MTCC. Thus, she is already estopped from raising the said issue in the CA or before this Court.
Since the Complaint is for forcible entry, the jurisdiction over the subject matter of the case is, thus, upon the MTCC of Gingoog City. The question whether or not the suit was brought in the place where the land in dispute is located was no more than a matter of venue. Since there was no objection on the part of Estel, her objection became a pure technicality. As to the Diegos’ failure to allege facts constitutive of forcible entry, it is settled that in actions for forcible entry, two allegations are mandatory for the municipal court to acquire jurisdiction: the plaintiff must allege his prior physical possession of the property, and he must also allege that he was deprived of his possession by means of force, intimidation, threats, strategy, and stealth.
In this case, it is clear that the Diegos sufficiently alleged in their Complaint the material facts constituting forcible entry, as they explicitly claimed that they had prior physical possession of the subject property since its purchase from Estel. They also particularly described in their complaint how Estel, her two sons and five other persons, encroached upon the subject property and dispossessed them of the same. (2) The alleged defect in the verification was not raised before the MTCC. Even granting that this matter was properly raised before the court a quo, the Court finds that there is no procedural defect that would have warranted the outright dismissal of respondents’ complaint as there is compliance with the requirement regarding verification. A reading of the Diegos’ verification reveals that they complied with the the rule on verification; they confirmed that they had read the allegations in the Complaint which were true and correct based on their personal knowledge. Verification is deemed substantially complied with when one who has ample knowledge to swear to the truth of the allegations in the complaint or petition signs the verification, and when matters alleged in the petition have been made in good faith or are true and correct. As to the Diegos’ certification on non-forum shopping, a reading of their Verification/Certification reveals that they, in fact, certified therein that they have not commenced any similar action before any other court or tribunal and to the best of their knowledge no such other action is pending therein. The only missing statement is their undertaking that if they should thereafter learn that the same or similar action has been filed or is pending, they shall report such fact to the court. This, notwithstanding, the Court finds that there has been substantial compliance on the part of respondents.
It is settled that with respect to the contents of the certification against forum shopping, the rule of substantial compliance may be availed of because the requirement of strict compliance with the provisions regarding the certification of nonforum shopping merely underscores its mandatory nature in that the certification cannot be altogether dispensed with or its requirements completely disregarded. Based on the foregoing, the petition was denied.
Pascual and Santos, Inc. v. The Members of the Tramo Wakas Neighborhood Association, Inc. G.R. No. 144880. November 17, 2004. FACTS: The Members of Tramo Wakas Neighborhood Association, represented by Dominga Magno (respondents), lodged before the Presidential Action Center a petition praying that ownership over three parcels of land be awarded to them. In their petition, respondents alleged that petitioner claims ownership of the subject lots which they have openly, peacefully and continuously occupied since 1957. The petition was referred to the Land Management Bureau (LMB) for investigation and hearing. The petition was eventually decided by the Director of the LMB in favor of the respondents. Its Motion for Reconsideration having been denied, petitioner lodged an appeal before the Office of the DENR Secretary, which was subsequently dismissed for lack of merit and affirmed the decision of the Director of the LMB. Petitioner’s appeal to the Office of the President was likewise dismissed.
Petitioner subsequently filed its Petition for Review with the CA, praying that judgment be rendered (1) reversing and setting aside the OP Decision and the DENR, and (2) declaring the subject lots as no longer forming part of the public domain and have been validly acquired by petitioner; or in the alternative, (1) allowing it to present additional evidence in support of its claim to the subject lots, (2) reversing and setting aside the aforementioned Decisions and Order of the OP and the DENR, and (3) declaring the subject lots as no longer forming part of the public domain and have been validly acquired by petitioner. By Resolution, the CA dismissed the appeal due to infirm Verification and Certification of non-forum shopping. The Verification and Certification of non-forum shopping was signed merely by Estela Lombos and Anita Pascual who allege that they are the duly authorized representatives of petitioner corporation, without showing any proof whatsoever of such authority. For another, and importantly, the petition for review was filed a day after the period petitioner corporation was supposed to do so. Petitioner filed a Motion for Reconsideration, arguing that there was no showing that the persons acting on its behalf were not authorized to do so. Attached to the Motion was a Secretary's Certificate showing that petitioner's Board of Directors approved a Resolution on appointing Estela Lombos and Anita Pascual, incumbent directors of the corporation, as its duly authorized representatives who may sign all papers, execute all documents, and do such other acts as may be necessary to prosecute the petition for review. CA denied the MR. Hence, petitioner filed a Petition for Review on Certiorari to the SC. ISSUE: WHETHER OR NOT THE PERSONS WHO EXECUTED THE VERIFICATION AND CERTIFICATION OF NON-FORUM SHOPPING ATTACHED TO PSI'S MANIFESTATION/PETITION FOR REVIEW FILED WITH THE COURT OF APPEALS WERE AUTHORIZED TO DO SO. RULING:Yes. The requirement under the Rules of Court that the petitioner should sign the certificate of nonforum shopping applies even to corporations, considering that the mandatory directives of the Rules of Court make no distinction between natural and juridical persons. It is undisputed that when the petition for certiorari was filed with the CA, there was no proof attached thereto that Lombos and Pascual were authorized to sign the verification and non-forum shopping certification. Subsequent to the CA's dismissal of the petition, however, petitioner filed a motion for reconsideration to which it attached a certificate issued by its board secretary stating that on February 11, 2000 or prior to the filing of the petition, Lombos and Pascual had been authorized by petitioner's board of directors to file the petition before the CA. This Court has ruled that the subsequent
submission of proof of authority to act on behalf of a petitioner corporation justifies the relaxation of the Rules for the purpose of allowing its petition to be given due course. It must also be kept in mind that while the requirement of the certificate of non-forum shopping is mandatory, nonetheless the requirements must not be interpreted too literally and thus defeat the objective of p reventing the undesirable practice of forum shopping.
ELSA D. MEDADO, petitioner , vs. HEIRS OF THE LATE ANTONIO CONSING, as represented by DR. SOLEDAD CONSING, respondents . G.R. No. 186720. February 8, 2012. FACTS: Sometime in 1996, Spouses Meritus Rey Edado and, herein petitioner, Elsa D. Medado and the estate of the late Antonio Consing (Estate of Consing), as represented by Soledad Consing, executed Deeds of Sale with Assumption of Mortgage, wherein the latter sold to the said spouses the property known as Hacienda Sol situated in Cadiz City. As part of the deal, Spouses Medado assumed the loan obligation of the Estate of Consing with the Philippine National Bank (PNB).
Subsequently, however, the Estate of Consing offered the subject property to the government through the Department of Agrarian Reform’s Voluntary Offer to Sell (VOS) Program. The Estate of Consing instituted an action for rescission and damages (Civil Case No. 00-11320) with the Regional Trial Court (RTC) Branch 44 of Bacolod City against the Spouses Medado, PNB and the Register of Deeds (RD) of Cadiz City, due to alleged failure of the Spouses Medado to meet the conditions in their agreement. During the pendency of the Civil Case No. 00-11320, the Land Bank of the Philippines (LBP) issued in favor of the Estate of Consing a certificate of deposit of cash and agrarian reform bonds, as compensation for the property covered by the VOS. Because of the fear of the Spouses Medado that the whole proceeds of the VOS might be released to the Estate of Consing, since the former believed that they the ones entitled to such proceeds by virtue of the Deeds of Assignment with Assumption of Mortgage, Spouses Medado filed an action for injunction with prayer for the issuance of temporary restraining order (TRO) with the RTC, Branch 60 of Cadiz City (Civil Case No. 797-C). Spouses Medado prayed that a writ of prohibitory injunction be issued to restrain LBP from releasing the remaining amount of the VOS proceeds to the Estate of Consing, and restraining the Estate of Consing from receiving these proceeds; and also prayed for the issuance of a writ of mandatory injunction to compel LBP to release the remaining amount of the VOS to the spouses. The RTC, Branch 60 of Cadiz City ruled in favor of Spouses Medado under Civil Case No. 797-C. And despite the motion for reconsideration filed by the Estate of Consing, the said court issued the writs prayed for by Spouses Medado. Thus, the Heirs of the late Antonio Consing (Heirs of Consing) withdrew their motion for reconsideration and went to the Court of Appeals (CA) and filed a petition for certiorari. It should be noted that the petition filed by the Heirs of Consing was signed only by Soledad Consing and not by all of the petitioners in the CA. The appellate court ruled in favor the Estate of Consing. The subsequent motion for reconsideration filed by Spouses Medado was denied by the CA. Hence, the present petition to the Supreme Court (SC). ISSUES: (1) Whether or not the CA was correct in admitting the petition for certiorari despite the fact that said petition was defective because of the deficiencies in the verification and certification against forum shopping. (Petition was signed only by Soledad Consing)
(2) Whether or not the CA was correct in admitting the petition for certiorari of the Heirs of Consing although no motion for reconsideration was filed with the lower court which rendered the judgment being assailed. (3) Whether or not there exists a violation of the rule against forum shopping in this case. HELD: (1) Yes, the CA correctly admitted the petition despite the mentioned defect. The Court said that by looking at the records, Soledad Consing possesses a Special Power of Attorney (SPA) wherein Soldedad Consing was given the authority “to protect, sue, prosecute, defend and adopt whatever action necessary and proper relative and with respect to her co-heirs’ right, interest and participation over the subject property.”
According to the Court, the authority of Soledad includes the filing of an appeal before the CA, including the execution of a verification and certification against forum shopping therefor, being acts necessary “to protect, sue, prosecute, defend and adopt whatever action necessary and proper” in relation to . their r igh ts over the subject pr opert ies The Court further said that the verification requirement 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 and that where the petitioners are immediate relatives, who share a common interest in the property subject of the action, the fact that only one of the petitioners executed the verification or certification of forum shopping will not deter the court from proceeding with the action . Furthermore, it was held that verification of a pleading is a formal, not a jurisdictional, requirement intended to secure the assurance that the matters alleged in a pleading are true and correct. Thus, the Court may simply order the correction of unverified pleadings or act on them and waive strict compliance with the Rules. It is deemed substanti all y compli ed with when one who has ample knowledge to swear to the truth of the allegations in the complaint or petition signs the verification; and when matters alleged in the petition have been made in good faith or are true and correct . (2) Yes. Although as a general rule, a special civil action for certiorari cannot be filed without filing a motion for reconsideration with the court which the rendered the decision sought to be assailed, this rule admits of exceptions such as: a. where the order is a patent nullity because the court a quo had no jurisdiction; b. where the questions raised in the certiorari proceeding have been duly raised and passed upon by the lower court, or are the same as those raised and passed upon in the lower court; c. where there is an urgent necessity for the resolution of the question, and any further delay would prejudice the interests of the Government or of the petitioner, or the subject matter of the action is perishable; d. where, under the circumstances, a motion for reconsideration would be useless ; e. where the petitioner was deprived of due process and there is extreme urgency of relief; f. where, in a criminal case, relief from an order of arrest is urgent and the grant of such relief by the trial court is improbable; g. where the proceedings in the lower court are a nullity for lack of due process; h. where the proceedings were ex parte or in which the petitioner had no opportunity to object; and i. where the issue raised is one purely of law or where public interest is involved.” According to the Court, the present case falls under exception letter (d) where, under the circumstances, a motion for reconsideration would be useless. In the present case, the Court agreed with the CA when the latter court held that a motion for reconsideration, or the resolution of the trial court thereon, had become useless given that the particular acts which the movants (Heirs of Consing) sought to prevent by the filing
of the motion were already carried out . Significantly, the Heirs of Consing had filed a motion for reconsideration of the RTC’s order, but withdrew it only after the trial court had decided to implement the writs notwithstanding the pendency of the motion and just a day before the scheduled hearing on said motion.
(3) Yes. There is forum shopping when the following requisites concur: (1) identity of parties, or at least such parties as represent the same interests in both actions, (2) identity of rights asserted and relief prayed for, the relief being founded on the same facts, and (3) the identity of the two preceding particulars is such that any judgment rendered in the other action will, regardless of which party is successful, amount to res judicata in the action under consideration . The Court ruled that theses requisites are present in this case. There is identity of parties representing the same interests in the two actions (Civil Case No. 00-11320 and Civil Case No. 797-C), both involving the estate and heirs of the late Consing on one hand, and Spouses Medado on the other. The rescission case (Civil Case No. 00-11320) names “Soledad T. Consing, for herself and as administratrix of the estate of Antonio Consing” as plaintiff, with “Spouses Meritus Rey and Elsa Medado, PNB and the Register of Deeds of Cadiz City” as respondents. The injunction case (Civil Case No. 797-C), on the other hand, was instituted by Spouses Medado, against “LBP and the Heirs of the Late Antonio Consing, as represented by Dra. Soledad Consing.” The primary litigants in the two actions, and their interests, are the same. There is an identity of rights asserted and reliefs prayed for in the two cases, with the reliefs being founded on the same set of facts. In both cases, the parties claim their supposed right as owners of the subject properties. They all anchor their claim of ownership on the deeds of absolute sale which they had executed, and the law applicable thereto. They assert their respective rights, with Spouses Medado as buyers and the heirs as sellers, based on the same set of facts that involve the deeds of sale’s contents and their validity. Both actions necessarily involve a ruling on the validity of the same contract as against the same parties. Thus, the identity of the two cases is such as would render the decision in the rescission case res judicata in the injunction case, and vice versa. It does not even matter that one action is for the enforcement of the parties’ agreements, while the other action is for the rescission thereof .
The Court also mentioned the relevant factors that courts must consider when they have to determine which case should be dismissed, given the pendency of two actions , to wit: (1) The date of filing, with preference generally given to the first action filed to be retained; (2) Whether the action sought to be dismissed was filed merely to pre-empt the latter action or to anticipate its filing and lay the basis for its dismissal; and (3) Whether the action is the appropriate vehicle for litigating the issues between the parties.
Vivian T. Ramirez, et al. v. Mar Fishing Co., Inc., et al. G.R. No. 168208. June 13, 2012. FACTS: On 28 June 2001, respondent Mar Fishing Co., Inc. (Mar Fishing), engaged in the business of fishing and canning of tuna, sold its principal assets to co-respondent Miramar Fishing Co., Inc. (Miramar) through public bidding. The proceeds of the sale were paid to the Trade and Investment Corporation of the Philippines (TIDCORP) to cover Mar Fishings outstanding obligation in the amount of ₱897,560,041.26. In view of that transfer, Mar Fishing issued a Memorandum dated 23 October 2001 informing all its workers that the company would cease to operate by the end of the month.
On 29 October 2001 or merely two days prior to the months end, it notified the Department of Labor and Employment (DOLE) of the closure of its business operations. Thereafter, Mar Fishing’s labor union, Mar Fishing Workers Union NFL and Miramar entered into a Memorandum of Agreement. The Agreement provided that the acquiring company, Mir amar, shall absorb Mar Fishing’s regular rank and file employees whose performance was satisfactory, without loss of seniority rights and privileges previously enjoyed. Unfortunately, petitioners, who worked as rank and file employees, were not hired or given separation pay by Miramar. Thus, petitioners filed Complaints for illegal dismissal with money claims before the Arbitration Branch of the National Labor Relations Commission (NLRC). The Labor Arbiter (LA) found that Mar Fishing had necessarily closed its operations, considering that Miramar had already bought the tuna canning plant. By reason of the closure, petitioners were legally dismissed for authorized cause. In addition, even if Mar Fishing reneged on notifying the DOLE within 30 days prior to its closure, that failure did not make the dismissals void. Consequently, the LA ordered Mar Fishing to give separation pay to its workers. However, the NLRC reversed the decision of the LA and pierced the veil of corporate fiction and ruled that Mar Fishing and Miramar were one and the same entity, since their officers were the same. Hence, both companies were ordered to solidarily pay the monetary claims. On reconsideration, the NLRC modified its ruling by imposing liability only on Mar Fishing. The labor court held that petitioners had no cause of action against Miramar, since labor contracts cannot be enforced against the transferee of an enterprise in the absence of a stipulation in the contract that the transferee assumes the obligation of the transferor. However, finding that only 3 of the 228 petitioners signed the Verification and Certification against forum shopping, the CA instantly dismissed the action for certiorari against the 225 other petitioners without ruling on the substantive aspects of the case. By means of a Manifestation with Omnibus Motion, petitioners submitted a Verification and Certification against forum shopping executed by 161 signatories. In the said pleading, petitioners asked the CA to reconsider by invoking the rule that technical rules do not strictly apply to labor cases. Still, the CA denied petitioners contentions holding that even though litigation is not a game of technicalities, it does not follow that the Rules of Court must be ignored. ISSUES: Whether the CA gravely erred in dismissing their Petition for Review on the ground that their pleading lacked a Verification and Certification against forum shopping.
HELD: No, the Rules of Court provide that a petition for certiorari must be verified and accompanied by a sworn certification of non-forum shopping. Failure to comply with these mandatory requirements shall be sufficient ground for the dismissal of the petition. Considering that only 3 of the 228 named petitioners signed the requirement, the CA dismissed the case against them, as they did not execute a Verification and Certification against forum shopping. The lack of certification against forum shopping is not curable by mere amendment of a complaint, but shall be a cause for the dismissal of the case without prejudice. Indeed, the general rule is that subsequent compliance with the requirements will not excuse a party's failure to comply in the first instance. Thus, on procedural aspects, the appellate court correctly dismissed the case. However, this Court has recognized that the merit of a case is a special circumstance or compelling reason that justifies the relaxation of the rule requiring verification and certification of non -forum shopping.
ATTY. FE Q. PALMIANO-SALVADOR, Petitioner , vs. CONSTANTINO ANGELES, Respondent . G.R. No. 171219. September 3, 2012. FACTS: Respondent is one of the registered owners of a parcel of land at Sampaloc, Manila as evidence by a Transfer Certificate of Title. The subject parcel of land was occupied by Galiga from 1979 to 1993 as a lessee with a lease of contract. Subsequently, Petitioner alleged she bought on 1993 the subject parcel of land from Galiga who represented that he was the owner, being one in possession. Petitioner remained in possession of said property. Respondent sent a letter to petitioner demanding the latter to vacate the property which was not heeded by petitioner.
Thus, Angeles filed, thru one Diaz, a complaint for ejectment with the Metropolitan Trial Court of Manila (MeTC). MeTC rendered its decision in favor of Angeles. In appeal filed by Salvador, she alleged that Diaz, who filed the complaint, had no authority from Angeles at the time of the filing of the suit. The appeal was denied by the Regional Trial Court (RTC). The Motion for Reconsideration filed by Salvador was likewise denied. Petitioner elevated the case to the Court of Appeals (CA) via petition for review but was dismissed. The CA affirmed the factual findings of lower courts that Galiga was a mere lessee of respondent hence Galiga could not have validly transferred ownership to peitioner. Hence, the present petition. ISSUE: Whether or not the court acquired jurisdiction over the complaint and the plaintiff. HELD: No, the court did not acquire jurisdiction over the complaint and the plaintiff. The complaint filed in the MeTC was filed in the name of the respondent but it was one Diaz who executed the verification and certification alleging therein that he was respondent’s attorney-in-fact. No copy of any document attached to the complaint to prove Diaz/s allegation regarding the authority supposedly granted to him. In fact, it was only more than ayear after the complaint was filed that respondent attached to his Reply to Salvador a document entitled Special Power of Attorney (SPA) supposedly executed in favor of Diaz. However, said SPA was executed only more than a month after the complaint was filed appearing to have been notarize by one Robert McGuire of Santa Barbara County. No certification from Philippine Consulate in San Francisco, CA, USA, that said person is indeed a notary public. There is nothing on record to show that Diaz had been authorized. Thus, the effect is as held by the Court in Tamondong v. CA, if a complaint is filed for and in behalf of the plaintiff by one who is not authorize to do so, the complaint is not deemed filed. An unauthorize complaint does not produce any legal effect. Hence, the court has no jurisdiction over the complaint and the plaintiff.
In order that the court to have authority to dispose of the case on the merits, it must acquire jurisdiction over the subject matter and the parties. Courts acquire jurisdiction over the plaintiffs upon filing of the complaint and to be bound by the decision, a party should first be subjected to the court’s jurisdiction. Since no valid complaint was ever filed witht the MeTC, it did not acquire jurisdcition over the person of Angeles. Thus, all proceedings before the MeTC were null and void.
Ceroferr Realty Corporation vs. Court of Appeals and Ernesto D. Santiago. G.R. No. 139539. February 5, 2002. FACTS: Plaintiff filed with the Regional Trial Court a complaint against defendant Ernesto D. Santiago for “damages and injunction, with preliminary injunction.” In the complaint, Ceroferr prayed that Santiago and his agenst be enjoined from claiming possession and ownership aver Lot. 68 of the Tala Estate Subdivision, Quezon City; that Santiago and his agents be prevented from making use of the vacant lot as a jeepney terminal; that Santiago be ordered to pay Ceroferr P650.00 daily as lost income for the use of the lot until possession is restored to the latter; and that Santiago be directed to pay plaintiff Ceroferr moral, actual and exemplary damages and attorney`s fees, plus expenses of litigation.
In his Answer, defendant Santiago alleged that the vacant lot referred to in the complaint was within Lot no. 90 of the Tala Estate Subdivision; that he was not claiming any portion of Lot. 68 claimed by Cereforr; that he had legal right to fence Lot. 90 since this belonged to him, and he had permit for the purpose; that Cereforr had no color of right over Lot. 90 and, hence, was not entitled to an injunction to prevent Santiago from exercising acts of ownership thereon; and that the complaint did not state a cause of action. There was a verification survey, followed by a relocation survey, whereby it would appear that the vacant lot is inside Lot. 68. The outcome of the survey was vigorously objected to by defendant who insisted that the area is inside his lot. It thus became clear, at least from the view point of the defendant, that the case would no longer, merely involves a simple case of collection of damages and injunction which was the main objective of the complaint but a review of the title of defendant vis-a-vis that of the plaintiff. At this point, defendant filed a motion to dismiss the complaint premised primarily on his contention that the trial court cannot adjudicate the issue of damages without passing over the conflictong claims of ownership of the parties over the disputed portion. The trial court issued the order that dismissed the case for lack of cause of action and lack of jurisdiction. Plaintiff appealed this decision but the Court of Appeals promulgated a decision dismissing the appeal. Hence, this appeal. ISSUE: (1) Whether Ceroferr`s complaint states a sufficient cause of action.
(2) Whether the trial court has jurisdiction to determine the identity and location of the vacant lot involved in the case. HELD: (1) The rule of procedure require that the complaint must state a concise statement of the ultimate facts or essential facts constituting the plaintiff`s cause of action. A fact is essential if it cannot be stricken out without leaving the statement cause of action inadequate. A complaint states a cause of action when it has three indispensable elements, namely: 1) a right in favor of the plaintiff by whatever means and under whatever law it arises or created; 2) an obligation on the part of the named defendant to respect or not to violate such right; 3) an act or omission on the part of such defendant violative of the right of plaintiff or constituting a breach of the
obligation of defendant to the plaintiff for which the latter may maintain an action for recovery for damages. If these elements are not extant, the complaint becomes vulnerable to a motion to dismiss on the ground of failure to state a cause of action. These elements are present in the case at bar. A defendant who moves to dismiss the complaint on the ground of lack of cause of action, as in this case, hypothetically admits all the averments thereof. The test of sufficiency of the facts found in a complaint as constituting a cause of action is whether or not admitting the facts alleged the court can render a valid judgment upon the same in accordance with the prayer thereof. The hypothetical admission extends to the relevant and material facts well pleaded in the complaint and inferences fairly deducible therefrom. Hence, if the allegations in the complaint furnish sufficient basis by which the complaint can be maintained, the same should not be dismissed regardless of the defense that may be assessed by the defendants. In this case, petitioner Ceroferr's cause of action has been sufficiently averred in the complaint. If it were admitted that the right of ownership of petitioner Ceroferr to the peaceful use and possession of Lot 68 was violated by respondent Santiago's act of encroachment and fencing of the same, then petitioner Ceroferr would be entitled to damages. (2) On the issue of jurisdiction, we hold that the trial court had jurisdiction to determine the identity and location of the vacant lot in question. While the lack of jurisdiction of a court may be raised at any stage of an action, the party raising such question may be estopped if he has actively taken part in the very proceedings which he questions and he only objects to the court`s jurisdiction because the judgment or the order subsequesntly rendered is adversed to him. In this caseoo, respondent Santiago may be considered estopped to question the jurisdiction of the trial court for he took an active part in the case. In his answer, respondent Santiago did not question the jurisdiction of the trial court to grant the reliefs prayed for in the complaint. His geodetic engineers were present in the first and second surveys that the LRA conducted. It was only when the second survey report showed results adverse to his case that he submitted a motion to dismiss.
Asian Construction and Development Corp. vs. Lourdes K. Mendoza FACTS: On January 6, 2000, respondent Lourdes K. Mendoza, sole proprietor of Highett Steel Fabricators (Highett), filed before the Regional Trial Court (RTC) a Complaint for a sum of money, against petitioner Asian Construction and Development Corporation, a duly registered domestic corporation. In the complaint, respondent alleged that from the period August 7, 1997 to March 4, 1998, petitioner purchased from Highett various fabricated steel materials and supplies amounting to P1,206,177.00, exclusive of interests; that despite demand, petitioner failed and/or refused to pay; and that due to the failure and/or refusal of petitioner to pay the said amount, respondent was compelled to engage the services of counsel.
Petitioner moved for a bill of particulars on the ground that no copies of the purchase orders and invoices were attached to the complaint to enable petitioner to prepare a responsive pleading to the complaint. To prove her case, respondent presented the testimonies of the salesman of Highett who confirmed the delivery of the supplies and materials to petitioner, and the General Manager of Highett. Petitioner argues that a charge or sales invoice is not an actionable document; thus, petitioners failure to deny under oath its genuineness and due execution does not constitute an admission thereof. Petitioner likewise insists that respondent was not able to prove her claim as the invoices offered as evidence were not properly authenticated by her witnesses. Lastly, petitioner claims that the CA erred in affirming the award of attorneys fees as the RTC decision failed to expressly state the basis for the award thereof. Respondent maintains that charge invoices are actionable documents, and that these were properly identified and authenticated by witness Tejero, who testified that upon delivery of the supplies and materials, the invoices were stamped received by petitioners employee. The RTC ruled in favor of the respondent and ordered the payment of the principal amount of the supplies and the amount of the accrued interest, 150,000 as attorney's fees and cost of suit. The CA modified the decision of the RTC. ISSUE: WHETHER THE CHARGE INVOICES ARE ACTIONABLE DOCUMENTS. HELD: No, the charge invoices are not actionable documents.
From the provision of Rule 8 Sec. 7 of Rules of Court, a document is actionable when an action or defense is grounded upon such written instrument or document. In the instant case, the Charge Invoices are not actionable documents per se as these only provide details on the alleged transactions. These documents need not be attached to or stated in the complaint as these are evidentiary in nature. In fact, respondent's cause of action is not based on these documents but on the contract of sale between the parties.
SPOUSES FERNANDO and MA. ELENA SANTOS vs. LOLITA ALCAZAR G.R. No. 183034. March 12, 2014. FACTS: Respondent Alcazar was the proprieter of Legazpi Color Center (LCC). Alcazar filed a complaint for sum of money against petitioners for the collection of the value of paint and construction materials in the amount of 1,456,000. The Acknowledgment executed by Petitioner Fernando was the basis of Alcazar’s cause of action. Under the said Acknowledgment, Petitioner Fernando acknowledged his obligation with LCC to pay the value of the paint and construction materials in the amount of 1,456,000.
Petitioners specifically denied the allegations of Alcazar and contended that the actionable document does not reflect their real indebtedness as well as the true contract or intention of the parties. The document does not reflect the correct amount which is only P600,000. Thus, petitioners sought the dismissal of the Complaint. Petitioners filed a Demurrer to Evidence and argued that the Acknowledgment presented in court was not an original copy, hence, inadmissible. Trial court denied petitioners’ demurrer and scheduled the presentation of petitioners’ evidence. Thereafter, petitioners moved to reset the scheduled on the ground that on the scheduled hearing, their counsel was to appear in another scheduled case. However, the trial court denied the motion to reset for lack of merit and for violating Section 4, Rule 15 of the Rules of Civil Procedure. The trial court declared that the petitioners have waived their right to present evidence. Petitioners filed a petition for certiorari to the CA and questioned the denial of their demurrer but the CA sustained the TC’s denial of their demurrer. Regional Trial Court’s Decision: RTC rendered judgment in favor of respondent Alcazar and ordered petitioners to pay plaintiff the sum of 1,456,000 plus interest, litigation and attorney’s fees. It held that petitioners admitted that they entered into transactions with Alcazar for the delivery of paint and construction materials and that from the Acknowledgment, petitioners admitted that their un paid obligation is P1,456,000. CA’s Decision: On appeal, the petitioners alleged that the RTC erred in allowing Alcazar to present her evidence ex parte. It sustained the trial court’s denial of petitioners’ demurrer. The CA held that petitioners failed to deny specifically under oath the genuineness and due execution of the Acknowledgment, consequently, its genuineness and due execution are deemed admitted, there was thus no need to present the original thereof, and petitioners’ liability was sufficiently established. ISSUE: Whether or not the Pre-trial Conference is a sham as there are no records to show that it was conducted.
HELD: No. Court found them to be without merit. A pre-trial conference was held, and that petitioners' representative was present therein. Moreover, the proceedings were covered by the required pre-trial order, which may itself be considered a record of the pre-trial. In said order, the November 8, 2005 pre-scheduled hearing was particularly specified. Thus, from the very start, petitioners knew of the November 8 hearing; if they failed to attend, no fault may be attributed to the trial court.
D.M. FERRER & ASSOCIATES CORPORATION v. UNIVERSITY OF SANTO TOMAS G.R. No. 189496. February 1, 2012. FACTS: Petitioner and University of Santo Tomas Hospital, Inc. entered into a Project Management Contract for the renovation of the 4th and 5thfloors of the Clinical Division Building, Nurse Call Room and Medical Records, Medical Arts Tower, Diagnostic Treatment Building and P ay Division Building.
On various dates, petitioner demanded from USTHI the payment of the construction costs amounting to P17,558,479.39. However, UST, through its rector, Fr. Rolando V. Dela Rosa, wrote a letter informing petitioner that its claim for payment had been denied, because the Project Management Contract was without the required prior approval of the board of trustees. Thus, petitioner filed a Complaint for sum of money, breach of contract and damages against herein respondent UST and USTHI when the latter failed to pay petitioner despite repeated demands. In impleading respondent UST, petitioner alleged that the former took complete control over the business and operation of USTHI, as well as the completion of the construction project. It also pointed out that the Articles of Incorporation of USTHI provided that, upon dissolution, all of the latter’s assets shall be transferred without any consideration and shall inure to the benefit of UST. It appears that USTHI passed a Resolution dissolving the corporation by shortening its corporate term of existence. Finally, petitioner alleged that respondent, through its rector, Fr. Dela Rosa, O.P., verbally assured the former of the payment of USTHIs outstanding obligations. Thus, petitioner posited in part that UST may be impleaded in the case under the doctrine of piercing the corporate veil, wherein respondent UST and USTHI would be considered to be acting as one corporate entity, and UST may be held liable for the alleged obligations due to petitioner. Subsequently, respondent filed its Motion to Dismiss. It alleged that the Complaint failed to state a cause of action, and that the claim was unenforceable under the provisions of the Statute of Frauds. RTC Quezon City granted the motion and dismissed the Complaint insofar as respondent UST was concerned, on the ground that respondent was not a real party-in-interest, and that it was not privy to the contract executed between USTHI and petitioner. Second, the court pointed out that the alleged verbal assurances of Fr. Dela Rosa should have been in writing to make these assurances binding and demandable. Petitioner sought a reconsideration of the RTC Order and asserted that only allegations of the Complaint, and not the attached documents, should have been the basis of the trial court’s ruling, consistent with the rule that the cause of action can be determined only from the facts alleged in the Complaint. It also insisted that the Statute of Frauds was inapplicable, since USTHI’s obligation had already been partially executed. The Motion for Reconsideration filed by petitioner was dimissed, upholding the initial findings that respondent UST was not a real party-in-interest, and that Fr. Dela Rosas alleged assurances of payment were unenforceable.
Subsequently, petitioner filed a Petition for Certiorari under Rule 65 with the CA, alleging that the trial court committed grave abuse of discretion when it granted respondents Motion to Dismiss on the basis of the documents submitted in support of the Complaint, and not solely on the allegations stated therein. It pointed out that the allegations raised questions of fact and law, which should have been threshed out during trial, when both parties would have been given the chance to present evidence supporting their respective allegations. CA issued the assailed Resolution and dismissed the Petition on the ground that a petition under Rule 65 is the wrong remedy to question the RTCs Order that completely disposes of the case. Instead, petitioner should have availed itself of an appeal under Rule 41 of the Rules of Court. Petitioner moved for a reconsideration of the Resolution, pointing out that the present case falls under the enumerated exceptions of Rule 41, in particular, while the main case is still pending, no appeal may be made from a judgment or final order for or against one or more of several parties or in separate claims, counterclaims, cross-claims and third-party complaints. CA denied the Motion for Reconsideration through its second assailed Resolution, holding that the motion raised no new issues or substantial grounds that would merit the reconsideration of the court. ISSUE: (1) Whether the CA erred in dismissing the Petition for Certiorari by failing to consider the exception in Sec. 1(g) of Rule 41 of the Rules of Court.
(2) Whether the trial court committed grave abuse of discretion when it held that the Complaint stated no cause of action. HELD: (1) Yes.A petition for certiorari under Rule 65 is the proper remedy to question the dismissal of an action against one of the parties while the main case is still pending.
In Jan-Dec Construction Corp. v. Court of Appeals, the Court ruled that the CA erred in dismissing petitioner's petition for certiorari from the Order of the RTC dismissing the complaint against respondent. While Section 1, Rule 41 of the 1997 Rules of Civil Procedure states that an appeal may be taken only from a final order that completely disposes of the case, it also provides several exceptions to the rule, to wit: (a) an order denying a motion for new trial or reconsideration; (b) an order denying a petition for relief or any similar motion seeking relief from judgment; (c) an interlocutory order; (d) an order disallowing or dismissing an appeal; (e) an order denying a motion to set aside a judgment by consent, confession or compromise on the ground of fraud, mistake or duress, or any other ground vitiating consent; (f) an order of execution; (g) a judgment or final order for or against one or more of several parties or in separate claims, counterclaims, crossclaims and third-party complaints, while the main case is pending, unless the court allows an appeal therefrom; and (h) an order dismissing an action without prejudice. In the foregoing instances, the aggrieved party may file an appropriate special civil action for certiorari under Rule 65. (2) Yes. In Abacan v. Northwestern University, Inc., the Court ruled that it is settled that the existence of a cause of action is determined by the allegations in the complaint. In resolving a motion to dismiss based on the failure to state a cause of action, only the facts alleged in the complaint must be considered. The test is whether the court can render a valid judgment on the complaint based on the facts alleged and the prayer asked for. Indeed, the elementary test for failure to state a cause of action is whether the complaint alleges facts which if true would justify the relief demanded. Only ultimate facts and not legal conclusions or evidentiary facts, which should not be alleged in the complaint in the first place, are considered for purposes of applying the test. While it is admitted that respondent UST was not a party to the contract, petitioner posits that the former is nevertheless liable for the construction costs. In support of its position, petitioner alleged that (1) UST and USTHI are one and the same corporation; (2) UST stands to benefit from the assets of USTHI by virtue of the
latters Articles of Incorporation; (3) respondent controls the business of USTHI; and (4) USTs officials have performed acts that may be construed as an acknowledgement of respondents liability to petitioner. Obviously, these issues would have been best resolved during trial. The RTC therefore committed grave abuse of discretion when it dismissed the case against respondent for lack of cause of action. The trial court relied on the contract executed between petitioner and USTHI, when the court should have instead considered merely the allegations stated in the Complaint. La Mallorca v. Court of Appeals, Mariano Beltran, et al. G.R. No. L-20761. July 27, 1966. FACTS: Private respondents (Mariano Beltran being the husband, and his wife), with their three minor daughters at about noontime, boarded a Pambusco Bus at San Fernando, Pampanga. It was owned and operated by defendant. Private respondents were carrying with them at the time four pieces of baggage. The conductor of the bus then issued tickets to them, except to two of the daughters, who were below the height requirement at which the fare was charged.When the bus reached Anao, it stopped there to allow the passengers bound therefor to get down. Among these were the private respondents and their children. Private respondent husband went back to the bus to retrieve his bayong which he left behind. However, he did not notice that one of his daughters followed him. When he was waiting for the conductor to hand him the bayong, the bus started to leave without the signal of the conductor, then it stopped again.Nevertheless, sensing that the bus is again about to move, private respondent husband veered away from the same. At the same time, he noticed people gathering around the body of a child who turned out to be his daughter, with her skull crushed and already without life.
Thus, private respondents filed an action to recover damages, which was granted by the trial court for breach of contract of carriage.On appeal, the Court of Appeals agreed that the contract of carriage had already terminated, but still made petitioner liable on the basis of q uasi-delict. ISSUE: Whether or not La Mallorca (petitioner) is be liable. HELD: Yes. Although private respondents alighted at the designated place, insofar as the husband is concerned, the relationship of passenger and carrier still subsisted due to the fact that the bayong which he was supposed to claim was still in the bus. The issue to be determined is whether the carrier was also liable for the safety of the child. The recognized rule is that the relation of carrier and passenger does not automatically cease when the passenger alighted. The latter must have had a reasonable time or opportunity to leave the carrier’s premises. A “reasonableness” is to be determined by the circumstances.
It must be noted that the bus did not observe a carrier’s obligation to exercise “utmost diligence” of a “very cautious person” when it commenced to leave without the signal of the conductor. Also, the presence of private respondents near the bus was not unreasonable since they still have a part of their baggage in the bus. Thus, they are still to be considered as passengers and entitled to protection under the contract of carriage.
But assuming that the carrier-passenger relationship had already ceased, petitioner may still be held liable for negligence of its driver, which shall fall under quasi-delict.
Ledda v. BPI. G.R. No. 200868. November 21, 2012. FACTS: Anita Ledda was a client of Bank of the Philippine Islands (BPI) who was issued a pre-approved credit card. This credit card and its terms and conditions were delivered to Ledda; Ledda began to subsequently use the credit card for various purchases of goods, services, and cash advances. Ledda defaulted in the payment of her credit card obligations. BPI sent a demand letter on September 26, 2007, but this was received in Ledda on October 2, 2007 who defaulted payment nonetheless. BPI thus filed a complaint of the collection of a sum of money against Ledda, allegedly amounting to P548,143.73. BPI filed the complaint in the RTC of Makati City. The RTC declared Ledda in default for failing to file an Answer within the period prescribed despite the service of the complaint and summons. Ledda somehow managed to file a motion for reconsideration, which was granted by the RTC and thus allowed her to file her Answer Ad Cautelam. Ledda and her counsel, however, failed to appear during the Pre-Trial. BPI was thus allowed to present evidence ex-parte. The RTC later ruled in favor of BPI, making Ledda liable for the alleged amount of P548,143.73 plus a 6% monthly interest. Ledda appealed to the CA, which denied her appeal but modified the RTC’s decision. The CA rejected Ledda’s argument that the credit card’s terms and conditions were actionable documents governed by Rule 8, sec. 7 of the Rules of Civil Procedure. The CA held that BPI’s cause of action sprang from Ledda’s availment of the bank’s credit facilities via the credit card and her refusal to pay the obligation it created. The CA used the case of Macalinao vs BPI in order to reduce the payment of interest. The Macalinao case also concerned the default in payment of a credit card obligation, but the bank therein imposed a 9.25% interest per month penalty, amounting to 111% per annum, which the court deemed exorbitant and unconscionable. The CA reduced Ledda’s credit card obligations to P322, 138 as the principal by deducting P225,000.15 as interests and charges from the original P548,143.73 amount. The CA also granted Attorney’s fees to BPI as per the Macalinao case. Ledda moved to reconsider, but was denied by the CA. Ledda went to the SC via a petition for Review. ISSUE: Did the CA err in holding that the credit card’s terms and conditions were not actionable do cuments under Rule 8, sec. 7 of the Rules of Civil Procedure? HELD: No, the CA was correct in ruling that the credit car d’s terms and conditions were not actionable documents under the Rules of Civil Procedure.
Rule 8, section 7 provides: Section 7. Action or defense based on document. — Whenever an action or defense is based upon a written instrument or document, the substance of such instrument or document shall be set forth in the pleading, and the original or a copy thereof shall be attached to the pleading as an exhibit, which shall be deemed to be a part of the pleading, or said copy may with like effect be set forth in the pleading.
As the rule itself states, the cause of action must be based on a document to be attached to the complaint. BPI’s cause of action, however, was not solely based on the credit card’s terms and conditions. It was also based on Ledda’s 1) acceptance of the credit card, 2) use of the credit card to purchase goods or services or advances in cash, and 3) her default in the payment of her obligations. As such, BPI had a sufficient cause of action with or without the attachment of the credit card’s terms and conditions.
FINANCIAL BUILDING CORPORATION, petitioner , vs. FORBES PARK ASSOCIATION, INC., respondent . FACTS: The then Union of Soviet Socialist Republic (hereafter, USSR) was the owner of a residential lot located at Forbes Park Village in Makati City. The USSR engaged the services of Financial Building for the construction of a multi-level building building at the said lot. Forbes Park reminded the USSR of existing regulations authorizing only the construction of a single-family residential building in each lot within the village. It also elicited a reassurance from the USSR that such restriction has been complied with. Despite this, Financial Building submitted to the Makati City Government a second building plan for the construction of a multi-level apartment building, which was different from the first plan for the construction of a residential building submitted to Forbes Park. Forbes Park discovered the second plan and subsequent ocular inspection confirmed the violation of the deed of restrictions. Thus, it enjoined further construction work. Forbes Park suspended all permits of entry for the personnel and materials of Financial Building in the said construction site. The parties attempted to meet to settle their differences but it did not push through. Financial Building filed in the Regional Trial Court of Makati, Metro Manila, a Complaint for Injunction and Damages with a prayer for Preliminary Injunction against Forbes Park. The latter, in turn, filed a Motion to Dismiss on the ground that Financial Building had no cause of action because it was not the real party-in-interest. The trial court issued a writ of preliminary injunction against Forbes Park but the Court of Appeals nullified it and dismissed the complaint. The Supreme Court affirmed the said dismissal in a Resolution. After Financial Building’s case was terminated with finality, Forbes Park sought to vindicate its rights by filing with the Regional Trial Court of Makati a Complaint for Damages, against Financial Building arising from the violation of its rules and regulations. The trial court rendered its decision in favor of Forbes Park. Financial Building appealed the said decision to the Court of Appeals, which affirmed the decision of the RTC. ISSUE: Whether or not Forbes Park is barred in claiming damages? HELD: Yes. The instant case is barred due to Forbes Park’s failure to set it up as a compulsory counterclaim in the prior injunction suit initiated by Financial Building against Forbes Park.
A compulsory counterclaim is one which arises out of or is necessarily connected with the transaction or occurrence that is the subject matter of the opposing party’s claim.15 If it is within the jurisdiction of the court and it does not require for its adjudication the presence of third parties over whom the court cannot acquire jurisdiction, such compulsory counterclaim is barred if it is not set up in the action filed by the opposing party. Thus, a compulsory counterclaim cannot be the subject of a separate action but it should instead be asserted in the same suit involving the same transaction or occurrence, which gave rise to it.17 To determine whether a counterclaim is compulsory or not, we have devised the following tests: (1) Are the issues of fact or law raised by the claim and the counterclaim largely the same? (2) Would res judicata bar a subsequent suit on defendant’s claim absent the compulsory counterclaim rule? (3) Will substantially the same evidence support or refute plaintiff’s claim as well as the defendant’s counterclaim? and (4) Is there any logical relation between the claim and the counterclaim? Affirmative answers to the above queries indicate the existence of a compulsory counterclaim. Second. Since Forbes Park filed a motion to dismiss in Civil Case No. 16540, its existing compulsory counterclaim at that time is now barred.A compulsory counterclaim is auxiliary to the proceeding in the original
suit and derives its jurisdictional support therefrom.19 A counterclaim presupposes the existence of a claim against the party filing the counterclaim. Hence, where there is no claim against the counterclaimant, the counterclaim is improper and it must dismissed, more so where the complaint is dismissed at the instance of the counterclaimant.20 In other words, if the dismissal of the main action results in the dismissal of the counterclaim already filed, it stands to reason that the filing of a motion to dismiss the complaint is an implied waiver of the compulsory counterclaim because the grant of the motion ultimately results in the dismissal of the counterclaim.Thus, the filing of a motion to dismiss and the setting up of a compulsory counterclaim are incompatible remedies. In the event that a defending party has a ground for dismissal and a compulsory counterclaim at the same time, he must choose only one remedy. If he decides to file a motion to dismiss, he will lose his compulsory counterclaim. But if he opts to set up his compulsory counterclaim, he may still plead his ground for dismissal as an affirmative defense in his answer.21 The latter option is obviously more favorable to the defendant although such fact was lost on Forbes Park.The ground for dismissal invoked by Forbes Park was lack of cause of action. There was no need to plead such ground in a motion to dismiss or in the answer since the same was not deemed waived if it was not pleaded.22 Nonetheless, Forbes Park still filed a motion to dismiss and thus exercised bad judgment in its choice of remedies. Thus, it has no one to blame but itself for the consequent loss of its counterclaim as a result of such choice.
Natividad Lim vs. National Power Corporation, and Spouses Roberto Ll. Arcinue and Arabela Arcinue G.R. No. 178789. November 14, 2012. FACTS: Respondent National Power Corporation (NPC) filed an expropriation suit against petitioner Natividad B. Lim (Lim) before the Regional Trial Court (RTC) of Lingayen, covering Lots 2373 and 2374 that the NPC needed for its Sual Coal-Fired Thermal Power Project. Since Lim was residing in the United States, the court caused the service of summons on her through her tenant, a certain Wilfredo Tabongbong.The RTC ordered the issued writ of possession in NPC’s favor, however, Lim, represented by her husband Delfin, filed an omnibus motion to dismiss the action and to suspend the writ of possession, questioning the RTC’s jurisdiction over Lim’s person and the nature of the action.Respondent spouses Roberto and Arabela Arcinue (the Arcinues) filed a motion for leave to admit complaint in intervention, alleging that they owned and were in possession of Lot 2374, one of the two lots subject of the expropriation. The RTC granted the Arcinues’ motion and required both the NPC and Lim to answer the complaint-in-intervention within 10 days from receipt of its order.When Lim and the NPC still did not file their answers to the complaint-in-intervention after 10 months, the Arcinues filed a motion for judgment by default. Lim sought to expunge the motion on the ground that it lacked the requisite explanation why the Arcinues resorted to service by registered mail rather than to personal service. At the scheduled hearing of the motion, Lim’s counsel did not appear. The NPC for its part manifested that it did not file an answer since its interest lay in determining who was entitled to just compensation.The RTC issued an order of default against both Lim and the NPC. The RTC pointed out that the Arcinues’ failure to explain their resort to service by registered mail had alread y been cured by the manifestation of Lim’s counsel that he received a copy of the Arcinues’ motion 10 days before its scheduled hearing.Lim filed a motion for reconsideration to lift the default order but the Court denied the motion, prompting Lim to file a petition for certiorari before the Court of Appeals. The CA rendered a decision that affirmed the RTC’s order of default. Lim filed a motion for reconsideration but the CA denied it, prompting her to file the present petition for review. ISSUES: (1) Whether or not there is a valid order of default of the RTC entered against Lim.
(2) Whether or not there is grave abuse of discretion on the part of the RTC in allowing respondent spouses’ failure to explain in their motion why they served a copy of it on the adverse party by registered mail rather than by personal service. HELD: (1) No. Section 4, Rule 19 of the Rules of Civil Procedure requires the original parties to file an answer to the complaint-in-intervention within 15 days from notice of the order admitting the same, unless a different period is fixed by the court. This changes the procedure under the former rule where such an answer was regarded as optional.
Thus, Lim’s failure to file the required answer can give rise to default. She remained una ble to show that her failure to file the required answer was due to fraud, accident, mistake, or excusable negligence. And, although she claimed that she had a meritorious defense, she was unable to specify what constituted such defense.
(2) No. The Court finds no such grave abuse of discretion, notwithstanding that the Arcinues' failed to explain their resort to service by registered mail rather than by personal service, the fact is that Lim's counsel expressly admitted having received a copy of the Arcinues' motion for judgment 10 days before its scheduled
hearing. This means that the Arcinues were diligent enough to file their motion by registered mail long before the scheduled hearing. Personal service is required precisely because it often happens that hearings do not push through because, while a copy of the motion may have been served by registered mail before the date of the hearing, such is received by the adverse party already after the hearing. Thus, the rules prefer personal service. But it does not altogether prohibit service by registered mail when such service, when adopted, ensures as in this case receipt by the adverse party.
MAGDIWANG REALTY CORPORATION, RENATO P. DRAGON and ESPERANZA TOLENTINO, Petitioners , vs. THE MANILA BANKING CORPORATION, substituted by FIRST SOVEREIGN ASSET MANAGEMENT (SPV-AMC), INC., Respondent . G.R. No. 195592. September 5, 2012. FACTS: The case stems from a complaint for sum of money filed on April 18, 2000 before the Regional Trial Court (RTC), Makati City by herein respondent, The Manila Banking Corporation (TMBC), against herein petitioners, Magdiwang Realty Corporation (Magdiwang), Renato P. Dragon (Dragon) and Esperanza Tolentino (Tolentino), after said petitioners allegedly defaulted in the payment of their debts under the five promissory notes they executed in favor of TMBC, which contained the following terms: Promissory Note No. 4953 December 27, 1976 (Maturity Date) Php500,000.00 (Amount) Promissory Note No. 10045 March 27, 1982 (Maturity Date) Php500,000.00 (Amount) Promissory Note No. 10046 March 27, 1982 (Maturity Date) Php500,000.00 (Amount) Promissory Note No. 10047 March 27, 1982 (Maturity Date) Php500,000.00 (Amount) Promissory Note No. 10048 March 27, 1982 (Maturity Date) Php500,000.00 (Amount)
All promissory notes included stipulations on the payment of interest and additional charges in case of default by the debtors. Despite several demands for payment made by TMBC, the petitioners allegedly failed to heed to the bank’s demands, prompting the filing of the complaint for sum of mone y. Instead of filing a responsive pleading with the trial court, the petitioners filed on October 12, 2000, which was notably beyond the fifteen (15)-day period allowed for the filing of a responsive pleading, a Motion for Leave to Admit Attached Motion to Dismiss5 and a Motion to Dismiss, raising therein the issues of novation, lack of cause of action against individuals Dragon and Tolentino, and the impossibility of the novated contract due to a subsequent act of the Congress. The motions were opposed by the respondent TMBC, via its Opposition which likewise asked that the petitioners be declared in default for their failure to file their responsive pleading within the period allowed under the law. RTC Order – Declared the petitioners in default. While this Court appreciates the efforts and tenacity shown by defendants’ counsel for having prepared a lengthy pleading for his clients in so short a time, the Court will have to rule that the Motion to Dismiss was nonetheless filed out of time, hence, there is sufficient basis to declare defendants in default.
The petitioners’ motion for reconsideration was denied by the trial court in its Or der dated August 2, 2005. The ex parte presentation of evidence by the bank before the trial court’s Presiding Judge was scheduled in the same Order.Unsatisfied with the RTC orders, the petitioners filed with the CA a petition for certiorari.CA Ruling on R TC’s Order of Default – Affirmed RTC’s order of default, holding that the RTC did not commit grave abuse of discretion when it declared herein petitioners in default. The denial of petitioners’ motion for reconsideration prompted the filing of a petition for review on certiorari before this Court, which, through its Resolutions dated March 5, 2008 and June 25, 2008, denied the petition for lack of merit.In the meantime, TMBC’s presentation of evidence ex parte proceeded before Presiding Judge Oscar B. Pimentel of the RTC of Makati City.
RTC ruled in favor of TMBC (May 20, 2007). Petitioner’s motion for reconsideration was denied by the trial co
urt, hence, it filed an appeal with the
CA. While appeal was pending before the appellate court, TMBC and First Sovereign Asset Management (SPVAMC), Inc. (FSAMI) filed a Joint Motion for Substitution, asking that TMBC be substituted by FSAMI after the former executed in favor of the latter a Deed of Assignment covering all of its rights, title and interest over the loans subject of the case. CA Ruling – Dismissed the petitioner’s appeal (October 11, 2010) and AFF IRMED RTC’s decision. On the issue of prescription, the CA cited the rule that the prescriptive period is interrupted in any of the following instances: (1) when an action is filed before the court; (2) when there is a written extrajudicial demand by the creditors; and (3) when there is any written acknowledgment of the debt by the debtor. The prescriptive period was legally interrupted on September 19, 1984 when the defendants-appellants, through several letters, proposed for the restructuring of their loans until the plaintiff-appellee sent its final demand letter on September 10, 1999. Indeed, the period during which the defendants-appellants were seeking reconsideration for the non-settlement of their loans and proposing payment schemes of the same should not be reckoned against it. When prescription is interrupted, all the benefits acquired so far from the lapse of time cease and, when prescription starts anew, it will be entirely a new one. This concept should not be equated with suspension where the past period is included in the computation being added to the period after prescription is resumed. Consequently, when the plaintiff-appellee sent its final demand letter to the defendants appellants, thus, foreclosing all possibilities of reaching a settlement of the loans which could be favorable to both parties, the period of ten years within which to enforce the five promissory notes under Article 1142 of the New Civil Code began to run again and, therefore, the action filed on April 18, 2000 to compel the defendants-appellants to pay their obligations under the promissory notes had not prescribed. The defense of novation was also rejected by the CA, citing the absence of two requirements for a valid novation, namely: (1) the clear and express release of the original debtor from the obligation upon the assumption by the new debtor of the obligation; and (2) the consent of the creditor thereto. ISSUES: (1) Whether or not the prescriptive period was legally interrupted on September 19, 1984 when petitioners proposed restructuring of their loans.
(2) Whether or not the principle of novation by the substitution of debtors was erroneously employed by the petitioners to extricate themselves from the obligation to the respondent.
HELD: (1) Yes. The ten (10)-year prescriptive period to file an action based on the subject promissory notes was interrupted by the several letters exchanged between the parties. This is in conformity with the second and third circumstances under Article 1155 of the New Civil Code (NCC) which provides that the prescription of actions is interrupted when: (1) they are filed before the court; (2) there is a written extrajudicial demand by the creditors; and (3) there is any written acknowledgment of the debt by the debtor. In TMBC’s complaint against the petitioners, the bank sufficiently made the allegations on its service and the petitioners’ receipt of the subject demand letters, even attaching thereto copies thereof for the trial court’s consideration.
During the bank’s presentation of evidence ex parte, the testimony of witness Mr. Megdonio Isanan was also offered to further support the claim on the demand made by the bank upon the petitioners. In the absence of a timely objection from the petitioners on these claims, no error can be imputed on the part of the trial court, and even the appellate court, in taking due consideration thereof.
As against the bare denial belatedly made by the petitioners of their receipt of the written extrajudicial demands made by TMBC, especially of the letter of September 10, 1999 which was the written demand sent closest in time to the institution of the civil case, the appreciation of evidence and pronouncements of the trial court in its Order dated November 5, 2007 shall stand. In addition to these, we take note that letters prior to the letter of September 1999 also form part of the case records, and the existence of said letters were not directly denied by the petitioners. (2) No. No evidence was presented to adequately establish that such novation ensued. What the letters being invoked by the petitioners as supposedly establishing novation only indicate that efforts on a repayment scheme were exerted by the parties. However, nowhere in the records is it indicated that such novation ever materialized.
Philippine Tourism Authority vs. Philippine Golf Development & Equiptment. G.R. No. 176628. March 19, 2012. FACTS: The case at bar is a petition for Certiorari under Rule 65 of the 1997 Rules of Civil Procedure, to annul the decision of the CA in which it dismissed the petition for annulment of judgment which sought to set aside the decision of the RCT Muntinlupa City. The said RTC held that the Philippine Tourism Authority (PTA) liable for its unpaid obligation to Philippine Golf Development & Equipment, Inc. (PHILGOLF).
PTA, an agency of the Department of Tourism, whose main function is to bolster and promote tourism, entered into a contract with Atlantic Erectors, Inc. (AEI) for the construction of the Intramuros Golf Course Expansion Projects for a contract price of P57,954,647.94. The civil works of the project commenced. Since AEI was incapable of constructing the golf course aspect of the project, it entered into a sub-contract agreement with PHILGOLF, a duly organized domestic corporation, to build the golf course amounting to P27,000,000.00. The sub-contract agreement also provides that PHILGOLF shall submit its progress billings directly to PTA and, in turn, PTA shall directly pay PHILGOLF. PHILGOLF filed a collection suit against PTA amounting to P11,820,550.53, plus interest, for the construction of the golf course. Within the period to file a responsive pleading, PTA filed a motion for extension of time to file an answer. The RTC granted the motion for extension of time. PTA filed another motion for extension of time to file an answer. The RTC again granted the motion. RTC Muntinlupa City Despite the RTCs liberality of granting two successive motions for extension of time, PTA failed to answer the complaint. Thus, the RTC rendered a judgment of default ruling in favor of the defendant which ordered the defendant to pay the plaintiff the said outstanding obligation plus interest of 12% per annum, attorney’s fees, cost of litigation, moral damages, nominal damages and exemplary damages. Court of Appeals PTA seasonably appealed the case to the CA. But before the appeal of PTA could be perfected, PHILGOLF already filed a motion for execution pending appeal with the RTC. The RTC granted the motion and a writ of execution pending appeal was issued against PTA. A notice of garnishment was issued against PTAs bank account at the LBP NAIA-BOC Branch to fully satisfy the judgment. PTA filed a petition for certiorari with the CA, imputing grave abuse of discretion on the part of the RTC for granting the motion for execution pending appeal. The CA ruled in favor of PTA and set aside the order granting the motion for execution pending appeal. PTA withdrew its appeal of the RTC decision and, instead, filed a petition for annulment of judgment under Rule 47 of the Rules of Court. The petition for annulment of judgment was premised on the argument that the gross negligence of PTAs counsel prevented the presentation of evidence before the RTC. CA dismissed the petition for annulment of judgment for lack of merit. PTA questions this CA action in the present petition for certiorari. ISSUES: (1) Whether or not the negligence of the PTAs counsel amounted to an extrinsic fraud warranting an annulment of judgment.
(2) Whether or not that since PTA is a government entity, it should not be bound by the inactions or negligence of its counsel.
(3) Whether or not a petition for annulment of judgment is a proper remedy. HELD: The Rules of Court specifically provides for deadlines in actions before the court to ensure an orderly disposition of cases. PTA cannot escape these legal technicalities by simply invoking the negligence of its counsel. This practice, if allowed, would defeat the purpose of the Rules on periods since every party would merely lay the blame on its counsel to avoid any liability. The rule is that a client is bound by the acts, even mistakes, of his counsel in the realm of procedural technique,and unless such acts involve gross negligence that the claiming party can prove, the acts of a counsel bind the client as if it had been the latters acts
(1) No. Extrinsic fraud refers to any fraudulent act of the prevailing party in the litigation which is committed outside of the trial of the case, whereby the unsuccessful party has been prevented from exhibiting fully his case, by fraud or deception practiced on him by his opponent. Under the doctrine of this cited case, we do not see the acts of PTAs counsel to be constitutive of extrinsic fraud. The records reveal that the judgment of default was sent via registered mail to PTAs counsel. However, PTA never availed of the remedy of a motion to lift the order of default. Since the failure of PTA to present its evidence was not a product of any fraudulent acts committed outside trial, the RTC did not err in declaring PTA in default. (2) No. PTA was acting in a proprietary character. PTA also erred in invoking state immunity simply because it is a government entity. The application of state immunity is proper only when the proceedings arise out of sovereign transactions and not in cases of commercial activities or economic affairs. The State, in entering into a business contract, descends to the level of an individual and is deemed to have tacitly given its consent to be sued. Since the said project partakes of a proprietary character entered into between PTA and PHILGOLF, PTA cannot avoid its financial liability by merely invoking immunity from suit. (3) No. Annulment of Judgment is not the proper remedy. PTAs appropriate remedy was only to appeal the RTC decision. Annulment of Judgment under Rule 47 of the Rules of Court is a recourse equitable in character and allowed only in exceptional cases where the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies are no longer available through no fault of petitioner. In this case, appeal was an available remedy. There is no extraordinary reason for a petition for annulment of judgment, nor was there any adequate explanation on why the remedy for new trial or petition for relief could not be used. The Court is actually at a loss why PTA had withdrawn a properly filed appeal and substituted it with another petition, when PTA could have merely raised the same issues through an ordinary appeal. Lastly, a special civil action under Rule 65 of the Rules of Court is only available in cases when a tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law. It is not a mode of appeal, and cannot also be made as a substitute for appeal. It will not lie in cases where other remedies are available under the law. In sum, PTA had the remedy of appealing the RTC decision to the CA and, thereafter, to the Court. Under the circumstances, the Court find no adequate reason to justify the elevation of this case to the CA and then to the Court, under Rule 65 of the Rules of Court.
LETICIA DIONA, represented by her Attorney-in-Fact, MARCELINA DIONA, vs. ROMEO A. BALANGUE, SONNY A. BALANGUE, REYNALDO A. BALANGUE, and ESTEBAN A. BALANGUE, JR. G.R. No. 173559. January 7, 2013. FACTS: The great of a relief neither sought by the party in whose favor it was given not supported by the evidence presented violates the opposing party’s right to due process and may be declared void ab initio in a proper proceeding.Petitioner filed a Petition for Review on Certiorari assailing the resolution granting the Petition for Annulment of Judgment filed by the respondents seeking to nullify that portion of the Regional Trial Court (RTC), Branch 75, Valenzuela City awarding petitioner 5% monthly interest rate for the principal amount of the loan respondent obtained from her. The Petition likewise assails the CA’s Resolution denying petitioner’s Motion for Reconsideration.
In 1991, respondents obtained a loan of P45,000.00 from petitioner payable in six months and secured by a Real Estate Mortgage over their property located in Marulas, Valenzuela. When the debt became due, respondents failed to pay notwithstanding demand. Thus, petitioner filed with the RTC a Complaint praying that respondents be ordered to pay the principal obligation, the damages, attorney’s fees, and to issue a decree of foreclosure for the sale at public auction of the aforementioned parcel of land. Respondents were served with summons thru respondent Sonny A. Balangue (Sonny). With the assistance of Atty. Arthur C. Coroza (Atty. Coroza) of the Public Attorney’s Office, they filed a Motion to Extend Period to Answer. Despite the requested extension, however, respondents failed to file any responsive pleadings. Thus, upon motion of the petitioner, the RTC declared them in default and allowed petitioner to present her evidence ex parte. RTC decided in favour of the petitioner, ordering the respondents to pay the petitioner, among others, the sum of FORTY FIVE THOUSAND (P45,000.00) PESOS, representing the unpaid principal loan obligation plus interest at 5% per month. Subsequently, petitioner filed a Motion for Execution, alleging that respondents did not interpose a timely appeal. However, respondents filed a Motion to Set Aside Judgment dated January 26, 2001, claiming that not all of them were duly served with summons and that they had no knowledge of the case because their co-respondent Sonny did not inform them about it. They prayed that the RTC’s Decision be set aside and a new trial be conducted. RTC ordered the issuance of a Writ of Execution. In order to satisfy the writ, petitioner moved for the public auction of the mortgaged property, which the RTC granted. The property was sold in her favour for P420,000.00. Respondents filed a Motion to Correct/Amend Judgment and To Set Aside Execution Sale, claiming that the parties did not agree in writing on any rate of interest and that petitioner merely sought for a 12% per annum interest in her Complaint. Surprisingly, the RTC awarded 5% monthly interest (or 60% per annum) which increased their indebtedness from P124,400.00 to P652,000.00. RTC granted respondents’ motion and accordingly modified the interest rate awarded from 5% monthly to 12% per annum. Then, respondents deposited the total amount of P126,650.00.
Petitioner elevated the matter to the CA via a Petition for Certiorari under Rule 65 of the Rules of Court. CA declared that the RTC exceeded its jurisdiction in awarding the 5% monthly interest but at the same time pronouncing that the RTC gravely abused its discretion in subsequently reducing the rate of interest to 12% per
annum. Furthermore, the court held that the proper remedy is not to amend the judgment but to declare that portion as a nullity. Void judgment for want of jurisdiction is no judgment at all, it cannot be the source of any right nor the creator of any obligation, and no legal rights can emanate from it. CA annulled the said order. Respondents filed with the CA a Petition for Annulment of Judgment and Execution Sale with Damages, contending that the portion of the RTC Decision granting petitioner 5% monthly interest rate is in gross violation of Section 3(d) of Rule 9 of the Rules of Court and of their right to due process. According to respondents, the loan did not carry any interest. Ruling of the Court of Appeals. Initially, the CA denied due course to the Petition. Upon respondents’ motion, it reinstated and granted the Petition and set aside portions of the RTC’s Decision. The CA ruled that aside from being unconscionably excessive, the monthly interest rate of 5% was not agreed upon by the parties and that petitioner’s Complaint clearly sought only the legal rate of 12% per annum. Following the mandate of Section 3(d) of Rule 9 of the Rules of Court, the CA concluded that the awarded rate of interest is void for being in excess of the relief sought in the Complaint. Petitioner’s motion for reconsideration was denied by the CA.
ISSUE: Whether or not the CA erred when it granted respondents’ petition for annulment of judgment of the decision of the RTC despite the fact that said decision has become final and already executed contrary to the Doctrine of Immutability of Judgment. HELD: No . The award of 5% monthly interest violated respondent’s right to due process and, hence, the same may be set aside in a Petition for Annulment of Judgment filed under Rule 47 of the Rules of Court.
A Petition for Annulment of Judgment under Rule 47 of the Rules of Court is a remedy granted only under exceptional circumstances where a party, without fault on his part, has failed to avail of the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies. Said rule explicitly provides that it is not available as a substitute for a remedy which was lost due to the party’s own neglect in promptly availing of the same. "The underlying reason is traceable to the notion that annulling final judgments goes against the grain of finality of judgment. Litigation must end and terminate sometime and somewhere, and it is essential to an effective administration of justice that once a judgment has become final, the issue or cause involved therein should be laid to rest." While under Section 2, Rule 47 of the Rules of Court a Petition for Annulment of Judgment may be based only on the grounds of extrinsic fraud and lack of jurisdiction, jurisprudence recognizes lack of due process as additional ground to annul a judgment. Grant of 5% monthly interest is way beyond the 12% per annum interest sought in the Complaint and smacks of violation of due process. It is settled that courts cannot grant a relief not prayed for in the pleadings or in excess of what is being sought by the party. Due process considerations require that judgments must conform to and be supported by the pleadings and evidence presented in court. It is improper to enter an order which exceeds the scope of relief sought by the pleadings, absent notice which affords the opposing party an opportunity to be heard with respect to the proposed relief. The fundamental purpose of the requirement that allegations of a complaint must provide the measure of recovery is to prevent surprise to the defendant. The reason behind Section 3(d), Rule 9 of the Rules of Court is to safeguard defendant’s right to due process against unforeseen and arbitrarily issued judgment. Thi s is akin to the very essence of due process. It embodies "the sporting idea of fair play" and forbids the grant of relief on matters where the defendant was not given the opportunity to be heard thereon. In the case at bench, the award of 5% monthly interest rate is not supported both by the allegations in the pleadings and the evidence on record. The Real Estate Mortgage executed by the parties does not include any provision on interest. Clearly, the RTC’s award of 5% monthly interest or 60% per annum lacks basis and disregards due process. It violated the due process requirement because respondents were not informed of the possibility that the RTC may award 5% monthly interest. They were deprived of reasonable opportunity to
refute and present controverting evidence as they were made to believe that the complainant petitioner was seeking for what she merely stated in her Complaint. Neither can the grant of the 5% monthly interest be considered subsumed by petitioner’s general prayer for "other reliefs and remedies just and equitable under the premises x x x." To repeat, the court’s grant of relief is limited only to what has been prayed for in the Complaint or related thereto, supported by evidence, and covered by the party’s cause of action. Besides, even assuming that the awarded 5% monthly or 60% per annum interest was properly alleged and proven during trial, the same remains unconscionably excessive and ought to be equitably reduced in accordance with applicable jurisprudence. Respondents’ former counsel was grossly negligent in handling the case of his clients; respondents did not lose ordinary remedies of new trial, petition for relief, etc. through their own fault. Ordinarily, the mistake, negligence or lack of competence of counsel binds the client. A recognized exception to the rule is when the lawyers were grossly negligent in their duty to maintain their client’s cause and such amounted to a deprivation of their client’s property without due process of law. In which case, the courts must step in and accord relief to a client who suffered thereby.
Had the counsel carefully read the judgment it would have caught his attention and compelled him to take the necessary steps to protect the interest of his client. But he did not. Judging from how re spondents’ former counsel handled the cause of his clients, there is no doubt that he was grossly negligent in protecting their rights, to the extent that they were deprived of their property without due process of law. The Court is appalled by petitioner ’s invocation of the doctrine of immutability of judgment. Petitioner does not contest as she even admits that the RTC made a glaring mistake in awarding 5% monthly interest. Amazingly, she wants to benefit from such erroneous award. The Court cannot allow this injustice to happen.
MANCHESTER DEVELOPMENT V. CA MANCHESTER DEVELOPMENT V. CA FACTS: A complaint for specific performance was filed by Manchester Development Corporation against City Land Development Corporation to compel the latter to execute a deed of sale in favor Manchester. Manchester also alleged that City Land forfeited the former’s tender of payment for a certain transaction thereby causing damages to Manchester amounting to P78,750,000.00. This amount was alleged in the body of their Complaint but it was not reiterated in the PRAYER of same complaint.
Manchester paid a docket fee of P410.00 only. Said docket fee is premised on the allegation of Manchester that their action is primarily for specific performance hence it is incapable of pecuniary estimation. The court ruled that there is an under assessment of docket fees hence it ordered Manchester to amend its complaint. Manchester complied but what it did was to lower the amount of claim for damages to P10M. Said amount was however again not stated in the prayer. ISSUE: Whether or not the amended complaint should be admitted. HELD: The amended complaint should not be admitted.
The docket fee, its computation, should be based on the original complaint. A case is deemed filed only upon payment of the appropriate docket fee regardless of the actual date of filing in court. Here, since the proper docket fee was not paid for the original complaint, it’s as if there is no complaint to speak of. As a consequence, there is no original complaint duly filed which can be amended. So, any subsequent proceeding taken in consideration of the amended complaint is void. Manchester’s defense that this case is primarily an action for specific performance is not merited. The Supreme Court ruled that based on the allegations and the prayer of the complaint, this case is an action for damages and for specific performance. Hence, it is capable of pecuniary estimation.
Further, the amount for damages in the original complaint was already provided in the body of the complaint. Its omission in the PRAYER clearly constitutes an attempt to evade the payment of the proper filing fees. To stop the happenstance of similar irregularities in the future, the Supreme Court ruled that from this case on, all complaints, petitions, answers and other similar pleadings should specify the amount of damages being prayed for not only in the body of the pleading but also in the prayer, and said damages shall be considered in the assessment of the filing fees in any case. Any pleading that fails to comply with this requirement shall not bib accepted nor admitted, or shall otherwise be expunged from the record
SUN INSURANCE OFFICE, LTD. (SIOL), E. B. PHILLIPS AND D. J. WARBY vs. HON. MAXIMIANO C. ASUNCION, Presiding Judge, and MANUEL CHUA UY PO TIONG. G.R. No. 79937-38. February 13, 1989. FACTS: Sun Insurance filed a complaint for the consignation of a premium refund on a fire insurance policy with a prayer for the judicial declaration of its nullity against private respondent Manuel Uy Po Tiong with the RTC of Makati. Private respondent as declared in default for failure to file the required answer within the reglementary period. Later, Tiong also filed a case against Sun Insurance for the refund of premiums and the issuance of a writ of preliminary attachment, seeking the payment of actual, compensatory, moral, exemplary and liquidated damages, attorney’s fees, expenses of litigation, and costs of suit with the RTC of Quezon City. However, the amount of damages sought by Tiong was not specified, though it can be inferred from the body of the complaint that it's around P50 million. Tiong only paid P210 as docket fee for his complaint which prompted Sun Insurance to raise an objection, which was disregarded by the then presiding judge of the case Judge Jose Castro.
Upon the order of the SC, the records of the complaint filed by Tiong along with 22 other cases assigned to the branches of the RTC of Quezon City were under investigation for under-assessment of docket fees. Later, the SC returned the records to the RTC and were re-raffled to the other judges of the said court with the exclusion of Judge Castro. The SC also ordered the judges, through a Resolution, to reassess the docket fees of the re-raffled cases and that in case of deficiency, to order its payment. The clerks of court were also required to issue certificates of re-assessment of docket fees. However, the clerk of court who was assigned to reassess the docket fee of the complaint filed by Tiong had a difficulty complying with the Resolution because the exact amount sought to be recovered was not indicated in the complaint. Thus, the now presiding Judge Maximiano Asuncion required the parties to comment on the clerk of court's report. Tiong filed a "Compliance" and a "Re-Amended Complaint" and indicated P10 million as actual compensatory damages in his prayer. But, in the second amended complaint Tiong filed, he alleged P44, 601, 623.70 as actual and compensatory damages and attorney's fees. Judge Asuncion admitted the second amended complaint and the clerk of court reassessed the docket fee to be P39, 786, which was subsequently paid by Tiong. Sun Insurance questioned the order of Judge Asuncion admitting the second amended complaint with the CA. However, while the case filed by Sun Insurance was still pending in the CA, Tiong filed another supplemental complaint claiming an additional P20 million as damages, making his total claim for damages to be P64, 601, 623.70. Seven months after filing said supplemental complaint, Tiong paid the additional docket fee of P80, 396. Subsequently, the CA ruled on the petition filed by Sun Insurance. The CA ordered the RTC to reassess the docket fee to be paid by Tiong on the basis of the amount of P25, 401, 707. The case was then elevated to the SC. But during the pendency of this petition in the SC and after the promulgation of the decision in Manchester, Tiong complied with the CA's decision and paid an additional docket fee of P62, 132.92 based on the amount stipulated by the CA. Thus, Tiong paid a total of P182, 824. 90 as docket fee. Sun Insurance (Pet): The docket fee paid by Tiong is not sufficient. Tiong should pay a total of P257, 810.49 because the total damages Tiong actually sought was P64, 601, 620.70. Pursuant to the ruling in Manchester, Tiong's complaint should be dismissed and all incidents arising therefrom should be annulled for Tiong's failure to pay the proper docket fee. Tiong (Res): The ruling in Manchester cannot be applied retroactively. At the time the complaint was instituted, the Manchester ruling was not yet made. The correct jurisprudence to apply in the case, then, is the Magaspi v. Ramolete doctrine wherein the SC held that the trial court acquired jurisdiction over the case even if the docket fee paid was insufficient.
ISSUES: (1) Whether or not the Manchester ruling can be applied retroactively.
(2) Whether or not Tiong can be considered to have filed the case even if the docket fee paid was insufficient and that the trial court can be considered to have acquired jurisdiction over the case. HELD: (1) Yes, The contention that Manchester cannot apply retroactively to this case is untenable. Statutes regulating the procedure of the courts will be construed as applicable to actions pending and undetermined at the time of their passage. Procedural laws are retrospective in that sense and to that extent.
(2) Yes, although there was an obvious intent on the part of TIong to defraud the government of the docket fee due through his amendments in his complaints, a more liberal interpretation of the rules is called for considering that, unlike in the Manchester case, Tiong demonstrated his willingness to abide by the rules by paying the additional docket fees as required. Thus, even if the Manchester ruling was applied, the SC, through this case provided the following guidelines regarding docket fees: 1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. 2. The same rule applies to permissive counterclaims, third party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period. 3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee. This petition was then dismissed. The Clerk of Court was also instructed to reassess and determine the additional filing fee to be paid by Tiong considering the total amount of the claim sought in his original complaint and supplemental complaint; and to require Tiong to pay the deficiency.
Ballatan v. CA, 304 SCRA 34 FACTS: Eden Ballatan, together with other petitioners, is living in and registered owners of Lot No. 24. Respondent Winston Go is living in and registered owners of Lot No. 25 and 26. And Li Ching Yao is living in and the registered owner of Lot. 27. The Lots are adjacent to each other.
When Ballatan constructed her house in her lot, she noticed that the concrete fence and side pathway of the adjoining house of respondent Winston Go encroached on the entire length of the eastern side of her property. She was informed by her contractor of this discrepancy, who then told respondent Go of the same. Respondent, however, claims that his house was built within the parameters of his father’s lot; and that this lot was surveyed by engineer Jose Quedding of the Araneta Institute of Agriculture. Petitioner called the attention on the matter and so the latter authorized another survey of the land by Engineer Quedding. The latter then did the survey twice which led to the conclusion that Lots Nos 25, 26 (owned by respondent Go) and 27 (owned by Li Ching Yao) moved westward to the eastern boundary of Lot 24 (owned by petitioner Ballatan.) – (it was later on discovered by the courts that Go encroached 42 square meters from the property of Ballatan and Yao encroached 37 square meters on Go’s property, all of which were in GOOD FAITH) Ballatan made written demands to the respondent to remove their improvements and since the latter wasn’t answering the petitioner filed accion publiciana in court. Go’s filed their “Answer with Third-Party Complaint” impleading as third party defendants respondents Li Ching Yaoand including Engineer Quedding as well as the Araneta Institute of Agriculture. RTC ruled in favor of the petitioner ordering respondent Go to demolish their improvements and pay damages to Petitioner but dismissing the third-party complaint. CA affirmed the dismissal of the third party-complaint as to Araneta Institute of Agriculture but reinstated the the complaint against Yao and the Engineer. CA also affirmed the demolition and damages awarded to petitioner and added that Yao should also pay respondent for his encroachment of respondent Go’s property. Jose Quedding was also ordered to pay attorney’s fees for his negligence. ISSUE: Whether or not the CA erred in not dismissing the third-party complaint due to non-payment of any filing or docket fees HELD: No. The Decision of the Court of Appeals dismissing the third-party complaint against Araneta Institute of Agriculture is affirmed.
The Answer with Third-Party Complaint was admitted by the trial court without the requisite payment of filing fees, particularly on the Go's prayer for damages. The trial court did not award the Go's any damages. It dismissed the third-party complaint. The Court of Appeals, however, granted the third-party complaint in part by ordering third-party defendant Jose N. Quedding to pay the Go's the sum of P5,000.00 as attorney's fees. The appellate court correctly dismissed the third-party complaint against Araneta Institute of Agriculture. The claim that the discrepancy in the lot areas was due to Araneta Institute of Agriculture's fault was not proved. The appellate court, however, found that it was the erroneous survey by Engineer Quedding that triggered these discrepancies. And it was this survey that respondent Winston Go relied upon in constructing his house on his father's land. He built his house in the belief that it was entirely within the parameters of his father's land. In short, respondents Go had no knowledge that they encroached on petitioners'
lot. They are deemed builders in good faith until the time petitioner Ballatan informed them of their encroachment on her property. Sps. Go v. Tong. G.R. No. 151942. November 27, 2003. FACTS: Petitioner Juana Tan Go (petitioner Juana) purchased a cashier’s check dated September 13, 1996 from the Far East Bank and Trust Company (FEBTC) Lavezares, Binondo Branch in the amount of P500,000.00, payable to Johnson Y. Tong (respondent).
On petitioner Juanas’ instruction, the cashier’s check bore the words ‘Final Payment/Quitclaim’ after the name of payee respondent allegedly to insure that respondent would honor his commitment that he would no longer ask for further payments for his interest in the informal business partnership which he and she had earlier dissolved.After the check was delivered to respondent, he deposited it with the inscribed words already erased, hence, it was not honored.Respondents counsel subsequently wrote to the manager of FEBTC Lavezares Branch informing that the words Final Payment/Quitclaim on the check had been unintentionally and inadvertently erased without being initialed by the bank or the purchaser thereof and thus requesting that the check be replaced with another payable to ‘Johnson Tong-Final Settlement/Quitclaim’ with the same amount, the bank charges therefor to be paid by his client-respondent. FEBTC did not grant the request of respondent’s counsel, hence, respondent filed a complaint against FEBTC and petitioner Juana and her husband Gregorio Go at the Manila RTC, for sum of money, damages, and attorney’s fees.Petitioners Juana and her husband and FEBTC, answering the complaint, alleged that the erasure of the words Final Payment/Quitclaim was intentional on respondents’ part, reflective of his intentio n to collect more from petitioner Juana, hence, the non-issuance of a replacement check was justified.During the pendency of the case, petitioners’ son, George Tan Go, filed a criminal complaint against respondent for falsification of the check. The criminal complaint was, however, subsequently dismissed by the Manila Prosecutors Office.
On August 25, 1998, respondent filed a Motion for Leave to File a Supplemental Complaint and to Admit the Attached Supplemental Complaint which Supplemental Complaint alleged that petitioners used their son to file the criminal complaint for falsification against him which caused damages, hence, prayed for an increase in the amount of moral and exemplary damages sought to be recovered from P2.5 million to P55 million and prayed for the award of actual damages of P58,075.00. The motion was set for hearing on September 4, 1998. Copy of the motion to petitioners was sent by registered mail. By Order of September 4, 1998, Public Respondent granted the motion and admitted the Supplemental Complaint noting that petitioners had been furnished copy of the Motion for Leave but that there had been no comment thereon.Inadequately, Petitioners and FEBTCs Comment-Opposition were subsequently filed. More so, Petitioners and FEBTC filed their respective Motions for Reconsideration of the Order.On November 18, 1998, petitioners filed a Manifestation of Deposit and deposited to the RTC Clerk of Court the amount of P500,000.00 representing the amount of the check, subject to the condition that it shall remain deposited until the disposition of the case. Petitioners and FEBTCs separate Motions for Reconsideration of the September 4, 1998 Order were later denied by Order of December 4, 1998, hence, petitioners filed their Answer to the Supplemental Complaint with Counterclaim, alleging as Special Affirmative defenses that their son George took it upon himself to file it in his own right, without their involvement in any way and that public respondent cannot prosecute his Supplemental Complaint, and the same should be dismissed, unless the corresponding docket fee and legal fees for the monetary claims in the amount of P55,057,075.00 are paid for. On February 5, 1999, public respondent, acting on the verbal manifestation/motion of respondents counsel, allowed the release of petitioners P500,000.00 deposit to respondent.By order of November 17, 1999,
public respondent, in the interest of justice and because of the huge amount of outlay involved, allowed respondent to first deposit P25,000.00 on or before December 15, 1999 and P20,000.00 every month thereafter until the full amount of docket fees is paid, and only then shall the deposits be considered as payment of docket fees.By order of April 11, 2000, Petitioners Motion for Reconsideration of the November 17, 1999 Order was denied. Ruling of the Court of Appeals
On May 30, 2000, Petitioners, by a Petition for Certiorari before the CA, alleged that respondent judge committed grave abuse of discretion when he issued the Orders of February 5, 1999 allowing the release of the P500,000.00 deposit to respondent, November 17, 1999 allowing the payment, on staggered basis, of the docket fees for the Supplemental Complaint and April 11, 2000 denying the Motion for Reconsideration of the November 17, 1999 Order. According to the CA, petitioners failed to assail, within the prescribed period, respondent judges February 5, 1999 Order allowing the release of the money deposited by them. It was only in their May 30, 2000 Petition before the CA that they questioned the Order. Moreover, the appellate court held that, anyway, respondent was entitled to the deposit, which represented the amount indicated on the check that belonged to him. As to the November 17, 1999 Order allowing respondent to pay the docket fee on a staggered basis and the April 11, 2000 Order denying the Motion for Reconsideration thereof, the CA held that payment of the prescribed docket fee within a reasonable period is permitted but in no case beyond the applicable prescriptive or regular period. In that case, the court a quo opined that the docket fee payment scheme imposed by the respondent judge cannot be said to have been issued with grave abuse of discretion. Hence, Petitioner appeal to the Supreme Court assailing the Decision and Resolution of the Court of Appeals (CA) denying their petition and petitioners’ Motion for Reconsideration. ISSUES: (1) Whether or not the Petition for Certiorari under Rule 65 was proper.
(2) Whether or not respondent judge and the CA erred in allowing respondent to pay the docket fee on a staggered basis. (3) Whether or not public respondent Judge Juan Nabong committed grave abuse of discretion in not suspending the proceedings pending appeal with the Honorable Court of Appeals, and in refusing to inhibit himself. HELD: (1) No. The proper remedy should be based on Rule 45 as what is assailed is an error of judgment of the CA and not that of grave abuse of discretion amounting to lack or excess jurisdiction. When an error of judgment of the CA is brought up to this Court for review, the action is properly designated as a petition for review and not a special civil action. Thus, while the instant Petition is one for certiorari under Rule 65 of the Rules of Court, the assigned errors are properly addressed in a petition for review under Rule 45. Accordingly, when parties adopt an improper remedy, their petitions may be dismissed outright. However, the Supreme Court is empowered by the Constitution, in the interest of substantial justice, to provide leniency on procedural technicalities in order to rule speedily on cases and demonstrate that even without the procedural infirmity, the Petition should be rejected due to its lack of merits.For certiorari under Rule 65 to lie, there must be an abuse of discretion committed of which must be grave, as when power is exercised arbitrarily or despotically by reason of passion or personal hostility; and such exercise must be so patent and gross as to amount to an evasion of positive duty, or to a virtual refusal to perform it or to act in contemplation of law. These conditions are absolutely wanting in the present case.
(2) No. Plainly, while the payment of the prescribed docket fee is a jurisdictional requirement, even its nonpayment 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. In the case of Sun Insurance v. Asuncion, thus held: It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee that vests a trial court with jurisdiction over the subject-matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. As a rule, docket fees should be paid upon the filing of the initiatory pleadings. However, for cogent reasons to be determined by the trial judge, staggered payment thereof within a reasonable period may be allowed. Unless grave abuse of discretion is demonstrated, the discretion of the trial judge in granting staggered payment shall not be disturbed. (3) No. Because they were never raised before the CA. It is well-settled that parties are not permitted to raise before this Court issues that were not taken up below.
NATIONAL STEEL CORPORATION, vs. COURT OF APPEALS, HON. ARSENIO J. MAGPALE, and JOSE MA. P. JACINTO. G.R. No. 123215. February 2, 1999. FACTS: This is a petition for review on certiorari of the decision, dated September 11, 1995, of the Court of Appeals, which dismissed the special civil action for certiorari filed by petitioner National Steel Co rporation (NSC) to set aside the order, dated April 6, 1994, of the Regional Trial Court, Branch LVII, City of Makati. In the said order, the trial court denied the motion of petitioner NSC to dismiss the complaint for recovery of personal property which private respondent Jose P. Jacinto had filed.
Private respondent Jacinto was the former owner of record of 100 shares of stock of the Manila Golf and Country Club (MGCC) now owned by and registered in the name of petitioner NSC. On February 9, 1990, he filed a complaint against the NSC, alleging that: 4. In or about 1970, for valuable considerations, Manila Golf and Country Club, Inc. (MGCCI) issued its Stock Certificate No. 1361 to plaintiff representing 100 shares of MGCCI. 5. From about 1972 up to the early part of February 1986, plaintiff was in abroad and could not return to the Philippines for reasons beyond his control. 6. When plaintiff returned to the Philippines in 1986, he discovered that Stock Certificate No. 1361 had been cancelled and a replacement Stock Certificate had been issued in the name of NSC. 7. The cancellation and transfer of plaintiffs Stock Certificate No. 1361 is void for the reasons that: there was no meeting of minds, there was no specific contract between plaintiff and NSC or any party covering the alleged transfer nor was there any consideration for the same. 8. Despite repeated demands upon NSC to return and re-transfer plaintiffs 100 shares in MGCCI formerly covered by said Stock Certificate No. 1361, NSC failed and refused and still fails and refuses to comply with the same. 9. MGCCIs act in cancelling plaintiffs stock certificate No. 1361 and issuing a replacement certificate in the name of NSC is without basis and illegal considering that there was no valid document evidencing the assignment, sale or transfer by plaintiff to NSC of MGCCI stock certificate No. 1361. 10. In consequence of NSC and MGCCIs illegal act in causing the cancellation and transfer of plaintiffs Stock Certificate No. 1361 unto NSCs name: 10.1. Plaintiff suffered mental anguish for which an award of moral damages of P1 Million is proper; 10.2. Plaintiff was constrained to litigate and secure the services of counsel for a fee of P100,000.00 and for which NSC and MGCCI should be held liable.
Based on the foregoing allegations, Jacinto prayed: WHEREFORE, it is respectfully prayed that judgment be rendered: 1. Ordering NSC to execute a deed of assignment re-transferring unto plaintiff the MGCCI certificate issued to the former in replacement of Stock Certificate No. 1361 and to surrender said Deed of Assignment, together with the MGCCI certificate issued to NSC (in replacement of Stock Certificate No. 1361) for cancellation thereof and to order MGCCI to cancel said stock certificate and issue a new one in the name of Jose Ma. P. Jacinto; 2. If for any reason whatsoever NSC fails or refuses to execute the deed of assignment and surrender NSCs replacement stock certificate, MGCCI be ordered to: 2.1. Cancel in its stock and transfer book the stock certificate issued to NSC issued in replacement of certificate No. 1361; 2.2. Issue a new stock certificate in the name of NSC or the stock certificate that might have been issued in replacement thereof. 2.3. Declare as lost and of no force and effect the MGCCI stock certificate now outstanding and registered in the name of NSC. 3. Ordering NSC and MGCCI to pay plaintiff, jointly and severally: 3.1. P1 Million as moral damages; and 3.2. P100,000.00 as attorneys fees.
Other reliefs are also prayed for. NSC sought the dismissal of the complaint on the ground of prescription, but its motion was denied by the trial court in an order, dated November 9, 1990. NSC brought a special civil action for certiorari in the CA, but again its petition was dismissed by the appellate court on August 30, 1991. Its attempt to secure review in this Court failed as its petition was dismissed in a resolution, dated
March 18, 1992. NSC then filed its answer, after which trial was held. It thereafter filed a motion to dismiss the complaint against it on the ground of lack of jurisdiction. It alleged: Plaintiff paid docket and other fees totalling P4,040.00. The certification of Clerk of Court Ma. Corazon Cecelia P. Cuba is attached as Annex A: 2. Under Sec. 7(a) of Rule 141, as amended by the Resolution of the Supreme Court En Banc dated September 4, 1990, the docket fees for filing an action . . . .is P600 for the first P150,000.00 and P5.00 for each P1,000.00 in excess of P150,000.00. 3. The actual value of the MGCCI share certificate as of February, 1990, when the complaint was filed, was P5,511,000.00. A certification issued by the MGCCI attesting to the fair market value of a MGCCI share is attached as Annex B. 4. This means that the correct docket fee for the filing of plaintiffs complaint is approximately P26,805.00 and not P4,040.00 which is the amount plaintiff actually paid. .... 6. The failure of plaintiff to pay the correct filing fees on February 13, 1990 meant that this court did not acquire jurisdiction over plaintiffs action. Under the ruling of Sun Insurance, and as explained below, the plaintiff cannot now pay the deficiency in the filing fees because it is already beyond the applicable prescriptive or reglementary period.
The trial court denied petitioners motion in an order, dated April 6, 1994. Hence, the latter brought a special civil action for certiorari in the CA, but its petition was dismissed on September 11, 1995. The CA ruled: The principal relief, or prayer in private respondents complaint is specific, for the NSC to execute a deed of assignment re-transferring unto plaintiff the MGCCI certificate x x x in replacement of stock certificate No. 1861 x x x. There is no allegation in the complaint of any quantified amount and/or of the actual value of the stock certificate in question. There is also no separate cause of action and/or prayer in the face of the complaint that private respondent, even in the alternative, prayed that if the principal relief is unavailing, that defendants be ordered to pay him the actual or equivalent value of the stock certificate, hence there is even no reason or basis to move for a more definite statement or for a bill of particulars of any matter which is not averred in the complaint with sufficient definiteness or particularity to enable petitioner to properly prepare for a more responsive pleading or to prepare for trial. Perspicaciously, what should guide the office of the Clerk of Court, RTC, Makati, Metro Manila, in assessing the correct docket fees for the filing of the complaint in Civil Case No. 90-4051, when it was filed on February 13, 1990, is what is alleged and prayed for in the complaint. It would be uncalled for and baseless for the clerk of court to consider at that point in time the supposed actual value of the MGCCI share certificate as of February, 1990, x x x (in the amount of) P5,511,000.00, and then and there assess an additional docket fee of P22,765.00 (P26,805.00 minus P4,040.00), precisely because the said sum of P5,511,000.00 is not alleged in the body of the complaint, and which is not also sought to be recovered in the action. There can be no divergence of opinion from the allegations, designation and the reliefs prayed for, as clearly and definitively spelled out in the face of the complaint, that private respondents principal relief is for petitioner NSC to execute a deed of assignment re-transferring unto plaintiff the MGCCI certificate issued to the former in replacement of stock certificate No. 1861 x x x. And there also appears to be no hint of any intention on the part of private respondent to mislead the clerk of court in assessing the correct fees, or to evade the payment of the correct fees. Hence, this petition. ISSUE: (1) Whether or not this case is one for specific performance rather th an for recovery of property.
(2) Whether or not the trial court has jurisdiction over the case despite the incorrect payment by Jacinto of the docket fees. HELD: (1) No. It is one for the recovery of damages.
