You are on page 1of 19

JURISDICTION

Civil Service Commission Vs. Court Of Appeals, Dr. Dante G. Guevarra And Atty.
Augustus F. Cezar, G.R. No. 176162, October 09, 2012 (ATIENZA)

Facts

Respondents Dante G. Guevarra (Guevarra) and Augustus F. Cezar (Cezar) were the
Officer-in-Charge/President and the Vice President for Administration, respectively, of
the Polytechnic University of the Philippines (PUP) in 2005.

On September 27, 2005, petitioner Honesto L. Cueva (Cueva), then PUP Chief Legal
Counsel, filed an administrative case against Guevarra and Cezar for gross
dishonesty, grave misconduct, falsification of official documents, conduct prejudicial to
the best interest of the service, being notoriously undesirable, and for violating Section
4 of Republic Act (R.A.) No. 6713. Cueva charged Guevarra with falsification of a
public document, specifically the Application for Bond of Accountable Officials and
Employees of the Republic of the Philippines, in which the latter denied the existence
of his pending criminal and administrative cases, despite the fact that Guevarra and
Cezar have 17 cases pending before th Sandiganbayan.

On March 24, 2006, the Civil Service Commission (CSC) formally charged Guevarra
with Dishonesty and Cezar with Conduct Prejudicial to the Best Interest of the Service.
Subsequently, the respondents filed their Motion for Reconsideration and Motion to
Declare Absence of Prima Facie Case. This was denied and Guevarra was
subsequently placed under preventive suspension for ninety (90) days.

Guevarra and Cezar filed a petition for certiorari and prohibition before the CA
essentially questioning the jurisdiction of the CSC. On December 29, 2006, the CA
rendered its Decision granting the petition and nullifying and setting aside the
questioned resolutions of the CSC for having been rendered without jurisdiction citing
EO 292 (Administrative Code of 1987) which states that heads of agencies and
instrumentalities "shall have jurisdiction to investigate and decide matters involving
disciplinary action against officers and employees under their jurisdiction" thereby
bestowing upon the Board of Regents the jurisdiction to investigate and decide
matters involving disciplinary action against respondents Guevarra and Cezar.

ISSUE: WON the Civil Service Commission have jurisdiction over the case?

HELD: YES

According to the SC, the CSC have original jurisdiction over cases filed to it. The CSC,
as the central personnel agency of the government, has the power to discipline its
officials and employees and to hear and decide administrative cases instituted by or
brought before it directly or on appeal.

Based on the constitution, the civil service embraces all branches, subdivisions,
instrumentalities, and agencies of the Government, including government-owned or
controlled corporations with original charters. By virtue of Presidential Decree (P.D.)
No. 1341,

PUP became a chartered state university, thereby making it a government-
owned or controlled corporation with an original charter whose employees are part of
the Civil Service and are subject to the provisions of E.O. No. 292

In the case of Camacho v. Gloria, the SC stated that under E.O. No. 292, a complaint
against a state university official may be filed with either the universitys Board of
Regents or directly with the Civil Service Commission.

This is further emphasized on Sec. 4 of the Uniform Rules on Administrative Cases
stating that The Civil Service Commission shall hear and decide administrative cases
instituted by, or brought before it, directly or on appeal. Also, Sec. 7 of the same rules
further provides that Heads of Departments, agencies, provinces, cities,
municipalities and other instrumentalities shall have original concurrent jurisdiction,
with the Commission, over their respective officers and employees. These rules,
according to the SC, are a reasonable interpretation of EO 292 (Administrative Code).

This concurrent jurisdiction means that if a case is filed to the CSC and the CSC
assumes jurisdiction over the case, then it shall be to the exclusion of other tribunals
exercising concurrent jurisdiction (The disciplinary tribunal of PUP or its Board of
regents in this particular case). Even if the CSC delegates the investigation to other
department or agency like the disciplinary tribunal, it does not deprive the CSC of its
jurisdiction. In the same way, if the Disciplinary tribunal of PUP or its Board of Regents
takes jurisdiction over the case, it shall be to the exclusion of the CSC.

OTHER ISSUES DISCUSSED:

On the issue that EO 292 expressly mentions A complaint may be filed directly with
the Commission by a private citizen against a government official or employee, the
SC held that a literal interpretation is unreasonable as this would mean that only
private citizens can file directly to the CSC and that government employees could only
appeal decisions to CSC. It is unreasonable as it would be tantamount to
disenfranchising government employees. That is why the SC ruled that even
government employees can file directly to the CSC

On WON there is distinction between career and non career: NONE. All members of
the civil service are under the jurisdiction of the CSC, unless otherwise provided by
law. Career or non-career, a civil service official or employee is within the jurisdiction
of the CSC.


Melana v. Tappa, G.R. No. 181303, September 17, 2009 (BOMBALES)
Facts:

Petitioners filed a complaint before the RTC for Reivindicacion, Quieting of Title,
and Damages

against respondents.
Petitioners alleged:
o That they are the owners of a parcel of land they inherited from
Anastacio Danao who died intestate.
o That during the lifetime of Anastacio, he allowed respondents
(Consuelo and her family members) to build on and occupy the
southern portion of the subject property with the agreement that
the property will be vacated at any time Anatacio and his heirs
will need it.
o And that respondents refused to vacate the property despite
petitioners demand and instead claims ownership and built their
respective residences using permanent materials.
Petitioners then referred this land dispute to the Lupong Tagapamayapa for
conciliation.
o During the conciliation proceeding:
Respondents presented documents ostensibly supporting
their claim of ownership.
Petitioner claims that respondents documents were highly
dubious, falsified, and incapable of proving the latters
claim of ownership over the subject property.
Hence, petitioners were compelled to file a complaint with RTC to remove such
cloud from their title.
RTC dismissed the Complaint on the ground of lack of jurisdiction by virtue of RA
7691 or other wise known as Judiciary Reorganization Act of 1980, which vests
the RTC with jurisdiction over real actions, where the assessed value of the
property involved exceeds P20,000.00 and since it was found that the subject
property had a value of less than P20,000.00 (The assessed value was actually-
P410 as evidenced by Tax Dec).
o Clearly, petitioners action to recover the same was outside the
jurisdiction of the RTC.
Petitioners filed an MR and argued that their principal cause of action was for
quieting of title hence the complaint should not have been dismissed, since
Section 1, Rule 63 of the Rules of Court

states that an action to quiet title falls
under the jurisdiction of the RTC.

Issue: W/N RTC committed grave abuse of discretion in dismissing petitioners
Complaint motu proprio.

Ruling: NO
The RTC in dismissing the case, made a distinction b/w the first and 2
nd

paragraph of Section 1, Rule 63 of the Rules of Court, which provides:
Section 1. Who may file petition. Any person
interested under a deed, will, contract or other written instrument,
or whose rights are affected by a statute, executive order or
regulation, ordinance, or any other governmental regulation may,
before breach or violation thereof, bring an action in the
appropriate Regional Trial Court to determine any question of
construction or validity arising, and for a declaration of his rights
or duties, thereunder.
An action for the reformation of an instrument, to quiet
title to real property or remove clouds therefrom, or to consolidate
ownership under Article 1607 of the Civil Code, may be brought
under this Rule.

The first paragraph refers to an action for declaratory relief, which should be brought
before the RTC. The second paragraph, however, refers to a different set of
remedies, which includes an action to quiet title to real property.

The second paragraph must be read in relation to Republic Act No. 7691,
which vests the MTC with jurisdiction over real actions, where the assessed
value of the real property involved does not exceed P50,000.00 in Metro
Manila and P20,000.00 in all other places.

As correctly found by the RTC, the assessed value of the subject property
as stated in Tax Declaration is only P410 therefore petitioners complaint
involving title to and possession of the said property is within the exclusive
original jurisdiction of the MTC not RTC.

Hence, the RTC, in dismissing petitioners Complaint, acted in complete
accord with law and jurisprudence, it cannot be said to have done so with
grave abuse of discretion amounting to lack or excess of jurisdiction.


Herald Black Dacasin VS. Sharon Del Mundo Dacasin, G.R. No. 168785,
February 05, 2010 (BUENAVENTURA)

Facts: Petitioner Herald Dacasin, American, and respondent Sharon Del Mundo
Dacasin, Filipino, were married in Manila in April 1994. They have one daughter,
Stephanie, born on 21 September 1995. In June 1999, respondent sought and
obtained from the Circuit Court, 19
th
Judicial Circuit, Lake County, Illinois (Illinois
court) a divorce decree against petitioner. In its ruling, the Illinois court dissolved the
marriage of petitioner and respondent, awarded to respondent sole custody of
Stephanie and retained jurisdiction over the case for enforcement purposes.

On 28 January 2002, petitioner and respondent executed in Manila a contract
(Agreement) for the joint custody of Stephanie. The parties chose Philippine courts as
exclusive forum to adjudicate disputes arising from the Agreement. Respondent
undertook to obtain from the Illinois court an order relinquishing jurisdiction to
Philippine courts.

In 2004, petitioner sued respondent in the Regional Trial Court of Makati City,
Branch 60 (trial court) to enforce the Agreement. Petitioner alleged that in violation of
the Agreement, respondent exercised sole custody over Stephanie.

Respondent sought the dismissal of the complaint for, among others, lack of
jurisdiction because of the Illinois courts retention of jurisdiction to enforce the divorce
decree.

Issue: Whether the trial court has jurisdiction to take cognizance of petitioners suit
and enforce the Agreement on the joint custody of the parties child.

Ruling of the Court: YES, the trial court has jurisdiction to entertain petitioners suit but
not to enforce the Agreement which is void. However, factual and equity
considerations militate against the dismissal of petitioners suit and call for the remand
of the case to settle the question of Stephanies custody.

Regional Trial Courts Vested With Jurisdiction
to Enforce Contracts

Subject matter jurisdiction is conferred by law. At the time petitioner filed his suit in the
trial court, statutory law vests on Regional Trial Courts exclusive original jurisdiction
over civil actions incapable of pecuniary estimation. An action for specific
performance, such as petitioners suit to enforce the Agreement on joint child custody,
belongs to this species of actions. Thus, jurisdiction-wise, petitioner went to the right
court.

Indeed, the trial courts refusal to entertain petitioners suit was grounded not on its
lack of power to do so but on its thinking that the Illinois courts divorce decree
stripped it of jurisdiction. This conclusion is unfounded. What the Illinois court retained
was jurisdiction x x x for the purpose of enforcing all and sundry the various
provisions of [its] Judgment for Dissolution. Petitioners suit seeks the enforcement
not of the various provisions of the divorce decree but of the post-divorce Agreement
on joint child custody. Thus, the action lies beyond the zone of the Illinois courts so-
called retained jurisdiction.


Far East Bank v.Shemberg, G.R. NO. 163878, December 12, 2006 (DORIA)

Petitioner: Far East Bank & Trust Company (FEBTC), a domestic banking
corporation organized and existing under Philippine laws; now managed and
operated by the Bank of the Philippine Islands

Respondents: Shemberg Marketing Corporation, Mackie Industries Corporation,
Benson Industries Incorporated, et. al., all duly registered domestic corporations
based in Pakna-an, Mandaue City

Individual respondents: all surnamed Dacay, are directors and corporate
officers of the said corporations

FACTS:

Prior to 1998, respondents entered into several credit transactions with
petitioner bank, secured by several real estate mortgages on several realties they
owned in Mandaue City. Respondents failed to pay the loans thus petitioner sought to
foreclose the mortgages.
On February 28, 2001, respondents filed with the RTC a Complaint for
Declaratory Relief, Injunction, Damages, and Annulment of Promissory Notes,
Documents, and Contracts. Respondents prayed for reliefs including the issuance of
an ex parte TRO for 72 hours and thereafter, upon summary hearing, a TRO for 20
days.
On March 9, 2001, the RTC granted respondents prayer for the issuance of
a TRO. Far East Bank filed its Answer, Counterclaim, Vigorous Opposition to the
Order (regarding the TRO), and a Motion to Dismiss Based On Affirmative Defenses
alleging, among others, that: the RTC did not acquire jurisdiction over the case for
non-payment of proper docket fees and that such RTC has no jurisdiction to enjoin the
foreclosure proceedings.
On March 27, 2001, the RTC denied petitioners motion to dismiss, stating
that: (1) the question of jurisdiction has not been raised except with the cause of
action regarding the annulment of mortgages. Considering however that an annulment
of mortgage is incapable of pecuniary estimation the court feels that its jurisdiction is
proper.
Petitioner then filed with the CA a petition for certiorari, prohibition, and
mandamus, contending that the trial court acted with grave abuse of discretion
amounting to lack or excess of jurisdiction. The CA eventually dismissed the petition
for certiorari. It held that as the RTC has jurisdiction over the case, its orders or
decisions upon all questions therein, cannot be corrected by the extraordinary writ of
certiorari. Petitioner filed a motion for reconsideration which was still denied by the
CA.

ISSUE: Whether or not the trial court has jurisdiction over the case

RULING: THE RTC HAS JURISDICTION

Here, the primary reliefs prayed for by respondents are the cancellation of
the real estate and chattel mortgages. In Bumayog v. Tumas, the SC ruled that where
the issue involves the validity of a mortgage, the action is one incapable of pecuniary
estimation. In the more recent case of Russell v. Vestil, the SC held that an action
questioning the validity of a mortgage is one incapable of pecuniary estimation. Since
respondents paid the docket fees, as computed by the clerk of court, consequently,
the trial court acquired jurisdiction.

A court acquires jurisdiction over a case only upon the payment of the prescribed fees.
The importance of filing fees cannot be gainsaid for these are intended to take care of
court expenses in the handling of cases in terms of costs of supplies, use of
equipment, salaries and fringe benefits of personnel, and others, computed as to man-
hours used in the handling of each case. Hence, the non-payment or insufficient
payment of docket fees can entail tremendous losses to the government in general
and to the judiciary in particular.

Petitioners contention: the trial court did not acquire jurisdiction over the
case because being a real action without a stated assessment of the value
of properties, there is no adequate basis for computing the proper filing
fees. Hence, it necessarily follows that the fees paid are deficient.

Respondents contention: since the suit primarily involves cancellation of
mortgages, an action incapable of pecuniary estimation, there is an
existing basis for the computation of fees which respondents claim they
have sufficiently complied.

NOTE: Is an action for cancellation of mortgage incapable of pecuniary estimation?

Under Section 19 (1) of Batas Pambansa Blg. 180, as amended by Republic
Act No. 7691, Regional Trial Courts have sole, exclusive, and original jurisdiction to
hear, try, and decide "all civil actions in which the subject of the litigation is incapable
of pecuniary estimation."
In Singsong v. Isabela Sawmill, this Court laid the test for determining
whether the subject matter of an action is incapable of pecuniary estimation, thus:
Ascertain the nature of the principal action or remedy sought. If the action is primarily
for recovery of a sum of money, the claim is considered capable of pecuniary
estimation. Whether the trial court has jurisdiction would depend upon the amount of
the claim. However, where the basic issue is something other than the right to recover
a sum of money, where the money claim is only incidental or a consequence of the
principal relief sought, the action is incapable of pecuniary estimation

RULE 1 GENERAL PROVISIONS

San Miguel Corporation vs. Sandiganbayan G.R. Nos. 104637-38, September 14,
2000, 340 SCRA 289 (FRANCISCO) - Facts too long because 2 cases were
discussed in the case

Doctrine:
- Any compromise agreement concerning sequestered shares falls within the
unquestionnable jurisdiction of and has to be approved by the Sandiganbayan.
- In the exercise of its discretion, the Sandiganbayan can require a party-litigant to
deliver a sequestered property to the PCGG.
- The present anti-graft court known as the Sandiganbayan shall continue to function
and exercise its jurisdiction as now or hereafter may be provided by law.

Facts:
March 26, 1986 - the Coconut Industry Investment Fund Holding Companies
(CIIF) sold 33,133,266 shares of the outstanding capital stock of San Miguel
Corporation to Andres Soriano III of the SMC Group payable in 4 installment
April 1, 1986 - Andres Soriano III paid the initial P500M to the UCPB (CIIFs
administrator). The sale was transacted through the stock exchange and the
shares were registered in the name of Anscor-Hagedorn Securities, Inc. (AHSI).
April 7, 1986 - PCGG then led by the former President of the Senate, the
Honorable Jovito R. Salonga, sequestered the shares of stock subject of the
sale. Due to the sequestration, the SMC Group (hereinafter referred to as the
petitioners) suspended payment of the balance of the purchase price of the
subject stocks. In retaliation, the UCPB Group rescinded the sale.
June 2, 1986 - UCPB and CIIF Holding Companies went to court. They filed a
complaint with the RTC of Makati SMC (petitioner) for confirmation of rescission
of sale with damages.
June 5, 1986 - SMC assailed in the SC (please check page 99, 2
nd
paragraph in
the full text if it is pertaining to SC) the jurisdiction of the Makati RTC on the
ground that primary jurisdiction was vested with the PCGG since the SMC shares
were sequestered shares.
August 10, 1988, SC (please check page 99, 2
nd
paragraph in the full text if it is
pertaining to SC) upheld the petitioners (SMC). SC ordered, among others, the
dismissal of the rescission case filed in the Makati RTC without prejudice to the
ventilation of the parties' claims before the Sandiganbayan.
March 1990, they (SMC and the UCPB group) signed a Compromise Agreement
and Amicable Settlement:
"3.1. The sale of the shares covered by and corresponding to the first
installment of the 1986 Stock Purchase Agreement consisting of Five
Million SMC Shares is hereby recognized by the parties as valid and
effective as of 1 April 1986. Accordingly, said shares and all stock
and cash dividends declared thereon after 1 April 1986 shall pertain,
and are hereby assigned, to SMC. x x x
3.2. The First Installment Shares shall revert to the SMC treasury for
dispersal pursuant to the SMC Stock Dispersal Plan attached as
Annex "A-1" hereof. The parties are aware that these First Installment
Shares shall be sold to raise funds at the soonest possible time for
the expansion program of SMC. x x x
3.3. The sale of the shares covered by and corresponding to the second,
third and fourth installments of the 1986 Stock Purchase Agreement
is hereby rescinded effective 1 April 1986 and deemed null and void,
and of no force and effect. Accordingly, all stock and cash dividends
declared after 1 April 1986 corresponding to the second, third and
fourth installments shall pertain to CIIF Holding Corporations.
xxx"[8](emphasis supplied)
They likewise agreed to pay an "arbitration fee" of 5,500,000 SMC shares
composed of 3,858,831 A shares and 1,641,169 B shares to the PCGG to be
held in trust for the Comprehensive Agrarian Reform Program.
March 23, 1990- the SMC and the UCPB Group filed with the Sandiganbayan a
Joint Petition for Approval of the Compromise Agreement and Amicable
Settlement. The petition was docketed as Civil case no. 0102.
March 29, 1990, the Sandiganbayan motu proprio directed that copies of the
Joint Petition be furnished to E. Cojuangco, Jr., M. Lobregat and others who are
defendants in Civil Case No. 0033. The same SMC shares are the subject of
Civil Case No. 0033 and alleged as part of the alleged ill-gotten wealth of former
President Marcos and his "cronies."
April 25, 1990, the Republic of the Philippines, through the Office of the Solicitor
General (OSG), opposed the Compromise Agreement and Amicable Settlement.
It contended that the involved coco-levy funds, whether in the form of earnings or
dividends therefrom, or in the form of the value of liquidated corporate assets
represented by all sequestered shares (like the value of assets sold/mortgaged
to finance the P500M first installment), or in the form of cash, or, as in the case of
subject "Settlement," in the form of "proceeds" of sale or of "payments" of certain
alleged obligations are public funds. As public funds, the coco-levy funds, in any
form or transformation, are beyond or "outside the commerce," and perforce not
within the private disposition of private individuals.
The reliefs prayed for by the Solicitor General state:
"1. That the "Settlement" be stricken off the record or at most referred
back to the PCGG for serious study and consideration.
2. That this Petition be consolidated with, or treated as a premature
motion or incident in Civil Case No. 0033, and brought by improper
parties. To repeat, the plaintiff Republic through PCGG is not a party to
what in effect will be a judicial compromise in Civil Case No. 0033.
Nowhere does the "Settlement" mention that its terms are subject to the
judicial outcome of this Civil Case No. 0033.

April 18, 1990 Mr. Eduardo M. Cojuangco, Jr. moved to intervene alleging legal
interest in the approval or disapproval of the Compromise Agreement and
Amicable Settlement.
May 24, 1990 - COCOFED, et al. filed an "Omnibus Class Action Motion for
Leave to Intervene and to Admit: (1) Opposition-in-Intervention, and (2)
Compulsory Counter-Petition and Counterclaim for Damages." They alleged that
they are the ultimate beneficial owners of the SMC shares subject of the
Compromise Agreement.
June 18, 1990 - the PCGG filed its Manifestation attaching a copy of the
Resolution of the Commission en banc dated June 15, 1990. PCGG joined the
Solicitor General in praying that the Joint Petition for Approval of Compromise
Agreement should be treated as an incident of Case No. 0033. PCGG, however,
interposed no objection to the implementation of the Compromise Agreement
subject to the incorporation
SMC and the UCPB Group filed their Joint Manifestation accepting the conditions
imposed by PCGG. They also opposed the intervention of COCOFED, et al.
October 12, 1990, SMC moved for early resolution of the Joint Petition for
Approval of the Compromise Agreement and Amicable Settlement together with
its pending incidents.
October 16, 1990, the Sandiganbayan issued an Order integrating Case No.
0102 as an incident of Civil Case No. 0033, thus:
"Considering the interest expressed by the different parties in Civil
Case No. 0033, and considering further that the subject matter of
the amicable settlement which is presented before this Court for
approval, the Court has deemed it best that Civil Case No. 0102
be integrated with, and be made an incident to, Civil Case No.
0033. xxx"
SMC did not challenge the Order.
November 23, 1990, Sandiganbayan deferred consideration of the Compromise
Agreement "until the parties thereto take the initiative to restore the same in the
Court's calendar."
February 5, 1991, it also deferred resolution of Cojuangco's Motion to Intervene.
February 21, 1991 - the UCPB Group filed a Motion to set the Joint Petition for
hearing. In its Order dated February 27, 1991, the Sandiganbayan required the
parties to comment on the propriety of the said court's continuing to entertain the
Compromise Agreement. In compliance with the said Order, SMC filed its
Manifestation dated March 15, 1991 expressly recognizing the jurisdiction of the
Sandiganbayan to rule on the petition for the approval of the compromise
agreement.
June 3, 1991, the Sandiganbayan issued the following Resolution
"It appearing that the sequestered character of the shares of
stock subject of the instant petition for the approval of the
compromise agreement, which are shares of stock in the San
Miguel Corporation in the name of the CIIF Corporations, is
independent of the transaction involving the contracting parties in
the Compromise Agreement between what may be labeled as the
"SMC Group" and the "UCPB Group," and it appearing further
that the said sequestered SMC shares of stock have not been
physically seized nor taken over by the PCGG, so much so that
the reversions contemplated in said Compromise Agreement are
without prejudice to the perpetuation of the sequestration thereon,
until such time as a judgment might be rendered on said
sequestration (which issue is not before this Court as (sic) this
time), and it appearing finally that the PCGG has not interposed
any objection to the contractual resolution of the problems
confronting the "SMC Group" and the "UCPB Group" to the extent
that the sequestered character of the shares in question is not
affected, this Court will await the pleasure of the Presidential
Commission on Good Government before consideration of the
Compromise Agreement is reinstated in the Court's calendar.
While this is, in effect, a denial of the "UCPB Group's"
Motion to set consideration of the Compromise Agreement herein,
this denial is without prejudice to a reiteration of the motion or any
other action by the parties should developments hereafter justify
the same."
July 8, 1991 - Sandiganbayan issued two (2) Orders. The first was to hear the
defendants in Civil Case No. 0033 on the matter of the Compromise Agreement
whether under Civil Case No. 0102 or as an incident to Civil Case No. 0033.37
The second required the petitioners and the UCPB Group as well as PCGG to
formally state in writing the different holders of the SMC shares subject of the
compromise agreement. The Sandiganbayan further ordered PCGG to indicate
on the face of the subject shares their sequestered character.
July 23, 1991, the Sandiganbayan noted the Manifestations of the PCGG, the
petitioners and the UCPB group that the certificates of stock for the subject SMC
shares which are intended to form part of the corporation's treasury shares have
been marked "sequestered" by SMC and are in the custody of the PCGG.
August 5, 1991, the Sandiganbayan issued an order requiring SMC to deliver the
certificates of stock representing the subject matter of the Compromise
Agreement to the PCGG in view of the oral manifestations of Commissioner
Maceren seeking clarification of portions of Sandiganbayan's July 23, 1991
Resolution.
August 9, 1991, the UCPB Group filed a Motion to Allow it to Utilize Dividends on
SMC shares for the payment of the loans of CIIF Companies to UCPB.42 The
motion was granted on September 2, 1991.
August 15, 1991, COCOFED, et al. filed their Urgent Motion to Compel
Surrender of the Cash Dividends pertaining to (a) the 4.5 million SMC shares
allegedly delivered to PCGG in trust for the Comprehensive Agrarian Reform
Program and (b) the SMC shares allegedly delivered to SMC as treasury shares.
August 22, 1991, SMC filed a Manifestation and Motion stating that the SMC
shares have reverted to the SMC treasury as treasury shares and are not entitled
to dividends
October 1, 1991, the Sandiganbayan issued a Resolution allowing COCOFED, et
al. to intervene.46 On March 30, 1992, it denied the separate motions for
reconsideration filed by the petitioners and the UCPB Group.
October 25, 1991, the Sandiganbayan issued another Resolution requiring SMC
to deliver the 25.45 million SMC treasury shares to the PCGG.48 On March 18,
1992, it denied petitioners' Motion for Reconsideration and further ordered SMC
to pay dividends on the said treasury shares and to deliver them to the PCGG.
April 13, 1992, petitioners filed a Motion to Dismiss Intervention and/or Motion for
Clarification with Ad Cautelam Motion to Suspend Time. The motion was denied
in the Sandiganbayan's Resolution dated March 17, 1993.

Before this Court now are two (2) consolidated petitions for certiorari under Rule 65 of
the Rules of Court filed by petitioners San Miguel Corporation, Neptunia
Corporation Limited, Andres Soriano III and Anscor-Hagedorn Securities, Inc.
They seek to annul the following resolutions of the Sandiganbayan:

In G.R. No. 104637-38:
1. The Resolution dated October 25, 1991 reiterating that all Certificates of Stock
representing sequestered shares in the SMC be physically deposited with the PCGG
and requiring SMC to pay the cash dividends due or actually earned by the said
shares and deliver them to PCGG

2. The Resolution dated March 18, 199254 requiring SMC to deliver to the PCGG the
25.45 million shares as well as the cash and/or stock dividends which have accrued
thereto from March 26, 1986 to date and which might have further accrued thereto had
not said shares of stock been declared treasury shares.55

In G.R. No. 109797:
1. The Resolution dated September 30, 1991 allowing COCOFED and other private
respondents to intervene in Case No. 0102 and admitting their Counter-Petition;
2. The Resolution dated March 27, 1992 denying the motions of petitioners and the
UCPB Group for reconsideration of the Resolution dated September 30, 1991; and57
3. The Resolution dated March 17, 1993 denying petitioners' motion to dismiss the
Counter-Petition filed by COCOFED, et al.

Issue/s:
In GR 104637-38
1. Whether or not Sandiganbayan over-reached its jurisdiction and with grave abuse
of discretion amounting to lack of jurisdiction in the case.

In GR 109797
2. Whether or not Sandiganbayan acted without or in excess of jurisdiction or with
grave abuse of discretion in the case.

Held:
1. NO. SC found no grave abuse of discretion on the part of Sandiganbayan when it
ordered the petitioners to deliver the treasury shares to PCGG and pay their
corresponding dividends for the following reasons:

First. The cases at bar do not merely involve a compromise agreement dealing
with private interest. The Compromise Agreement here involves sequestered
shares of stock now worth more than nine (9) billions of pesos, per estimate
given by COCOFED. Their ownership is still under litigation. It is not yet known
whether the shares are part of the alleged ill-gotten wealth of former President
Marcos and his "cronies." Any Compromise Agreement concerning these
sequestered shares falls within the unquestionable jurisdiction of and has to be
approved by the Sandiganbayan. The parties themselves recognized this
jurisdiction. In the Compromise Agreement itself, the petitioners and the UCPB
Group expressly acknowledged the need to obtain the approval by the
Sandiganbayan of its terms and conditions, thus:

The petitioners voluntarily submitted to the jurisdiction of the Sandiganbayan by
asking for the approval of the said Compromise Agreement. They stated in their
Manifestation dated March 15, 1991.

Second. Given its undisputed jurisdiction, the Sandiganbayan ordered that the
treasury shares should be delivered to PCGG and that their dividends should be
paid pending determination of their real ownership which is the key to the
question whether they are part of the alleged ill-gotten wealth of former
President Marcos and his "cronies."

SC cannot condemn and annul this order as capricious. In the exercise of its
discretion, the Sandiganbayan can require a party-litigant to deliver a
sequestered property to the PCGG. We held in Baseco vs. PCGG that "the
power of the PCGG to sequester property claimed to be 'ill-gotten' means to
place or cause to be placed under its possession or control said property, or
any building or office wherein any such property and any records pertaining
thereto may be found, including 'business enterprises and entities,' - - - for the
purpose of preventing the destruction, concealment or dissipation of, and
otherwise conserving and preserving the same - - - until it can be determined,
through appropriate judicial proceedings, whether the property was in truth 'ill-
gotten,' i.e. acquired through or as a result of improper or illegal use or the
conversion of funds belonging to the government or any of its branches,
instrumentalities, enterprises, banks or financial institutions, or by taking undue
advantage of official position, authority, relationship, connection or influence,
resulting in unjust enrichment of the ostensible owner and grave damage and
prejudice to the State."

Petitioners also argue that the Sandiganbayan gravely abused its discretion
when it treated the contracting parties to the Compromise Agreement
differently.They argue that it should not have allowed the dividend income of the
sequestered shares in the name of the CIIF Holding Companies to be applied to
their indebtedness to the UCPB. Again, we do not agree for the order of the
Sandiganbayan is consistent with the need to preserve and enhance the value
of the sequestered assets.

The claim of petitioners to fairness hardly impresses. It is planted on the
assumption that their purchase of the subject shares is above board. The
assumption begs the question for the Sandiganbayan has yet to decide the real
ownership of the subject shares, i.e., whether or not they are part of the alleged
illegal wealth of former President Marcos and his "cronies." Nor have petitioners
shown that they will suffer a legal prejudice if they deliver the shares and the
dividends thereon to the PCGG. It need not be stressed that in the event the
petitioners are found to be the lawful owners of these shares, they will be
awarded the cash and stock dividends which have accrued thereon. We agree
with the conclusion of the Sandiganbayan in its assailed Resolution of March
18, 1992 that "the SMC Group has not justified its desire to retain the custody of
the 25.45 million sequestered shares of stock, which it had converted to
treasury shares despite sequestration, and to retain the dividends due thereon,
on its own merits.

2. NO. SC had the occasion to categorically draw the distinctions between (i) the
Sandiganbayan's exclusive jurisdiction to determine the judicial question of ownership
over sequestered properties and (ii) the incidents of the exercise by the PCGG of its
purely administrative and executive functions as conservator of sequestered
properties, as follows: (Republic vs. Sandiganbayan)
"In other words, neither in Pea nor in any other case did this Court ever say
that orders of sequestration, seizure or take-over of the PCGG or other acts
done in the exercise of its so-called 'primary administrative jurisdiction' are
beyond judicial review, or beyond the power of the courts to reverse or nullify. It
is true, of course, that those acts are entitled to much respect, the findings and
conclusions motivating and justifying them should be accorded great weight,
'like the factual findings of the trial and appellate courts,' and such findings and
conclusions of the PCGG may not be superseded and substituted by the
judgment of the courts. But obviously the principle does not and cannot sanction
arbitrary, whimsical, capricious or oppressive exercise of power and discretion
on the part of the PCGG, or its performance of acts without or in excess of its
authority and competence under the law. And in accordance with applicable
law, review of those acts, and correction or invalidation thereof, when called for,
can only be undertaken by the Sandiganbayan, which has exclusive original
jurisdiction over all cases regarding 'the funds, moneys, assets and properties
illegally acquired or misappropriated by former President Ferdinand E. Marcos,
Mrs. Imelda Romualdez Marcos, their close relatives, subordinates, business
associates, dummies, agents or nominees.'"
For the TWO cases involved:
A final word. The cases at bar involve shares of stock estimated to be worth more than
P9 billion now. These shares were sequestered in 1986 and the government filed Civil
Case No. 0033 in 1987 to determine whether they are part of the alleged ill-gotten
wealth of former President Marcos and his "cronies." We did not set aside the
impugned resolutions of the Sandiganbayan in the cases at bar for they constitute
cautious moves to preserve the character of the sequestered shares pending
determination of their true owners. Be that as it may, we note that Civil Case No. 0033
has remained unresolved by the Sandiganbayan. The delay is no longer tolerable for it
locks in billions of pesos which could well rev-up our sputtering economy. Worse, it
constitutes another embarassing evidence of snail-paced justice, so long lamented but
mostly by our lips alone. The Sandiganbayan must not be the burial ground of cases
of far-reaching importance to our people. It is time for it to write finis to Civil Case No.
0033.
The petitions in G.R. Nos. 104637-38 and in G.R. No. 109797 are DISMISSED. No
costs.


Gochan vs. GochanG.R. No. 146089, December 13, 2001, 372 SCRA 256
(GATCHALIAN)

FACTS:
Respondents were stockholders of the Felix Gochan and Sons Realty
Corporation and the Mactan Realty Development Corporation. Respondents
offered to sell their shares in the two corporations to the individual petitioners in
consideration of the sum of P200,000,000:00. Petitioners accepted and paid the
said amount to respondents. (Receipts were issued and given to the petitioners
as proof)
Respondents, through Crispo Gochan, Jr., required individual petitioners to
execute a "promissory note. The former drafted the promissory note in his own
handwriting and had the same signed by the petitioners. Unbeknown to
petitioners, Crispo Gochan, Jr. inserted in the "promissory note" a phrase that
says, "Said amount is in partial consideration of the sale."
Respondents filed a complaint against petitioners for specific performance and
damages alleging that the petitioners that offered to buy their shares of stock,in
consideration of P200M and multiple properties. Accordingly, respondents
claimed that they are entitled to the conveyance of the properties, in addition to
the amount of P200,000,000.00, which they acknowledge to have received from
petitioners plus damages.
Petitioners filed their answer, raising the following affirmative defenses one of
which is the lack of jurisdiction by the trial court for non-payment of the correct
docket fees;
Trial court ruled in favor of the defendants. It cited that respondents paid the
necessary filing and docket fees of at least P165K.
MR denied. Petition for certiorari with CA dismissed. MR denied. Hence this
petition.

ISSUE:
1. Did the respondent file and pay the necessary docket fees to warrant courts
jurisdiction?
2. What is the real nature of the case?
3. What should be the basis for the assessment of the correct docket fees?

HELD:
1. NO
2. Real action not specific performance
3. Assessed value of the property, or the estimated value

The rule is well-settled that the court acquires jurisdiction over any case only upon the
payment of the prescribed docket fees. In the case of Sun Insurance Office, Ltd.
(SIOL) v. Asuncion,
12
this Court held that 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.

Petitioners, that the complaint is in the nature of a real action which affects title to real
properties; hence, respondents should have alleged therein the value of the real
properties which shall be the basis for the assessment of the correct docket fees.

It is necessary to determine the true nature of the complaint in order to resolve the
issue of whether or not respondents paid the correct amount of docket fees therefor.
In this jurisdiction, the dictum adhered to is that the nature of an action is determined
by the allegations in the body of the pleading or complaint itself, rather than by its title
or heading. The caption of the complaint below was denominated as one for "specific
performance and damages." The relief sought, however, is the conveyance or transfer
of real property, or ultimately, the execution of deeds of conveyance in their favor of
the real properties enumerated in the provisional memorandum of agreement. Under
these circumstances, the case below was actually a real action, affecting as it does
title to or possession of real property.

Real action is one where the plaintiff seeks the recovery of real property or, as
indicated in section 2(a) of Rule 4 (now Section 1, Rule 4 of the 1997 Rules of Civil
Procedure), a real action is an action affecting title to or recovery of possession of real
property.

In the case at bar, therefore, the complaint filed with the trial court was in the nature of
a real action, although ostensibly denominated as one for specific performance.
Consequently, the basis for determining the correct docket fees shall be the assessed
value of the property, or the estimated value thereof as alleged by the claimant

We are not unmindful of our pronouncement in the case of Sun Insurance, to the
effect that in case 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 period. However, the liberal interpretation
of the rules relating to the payment of docket fees as applied in the case of Sun
Insurance cannot apply to the instant case as respondents have never demonstrated
any willingness to abide by the rules and to pay the correct docket fees. Instead,
respondents have stubbornly insisted that the case they filed was one for specific
performance and damages and that they actually paid the correct docket fees therefor
at the time of the filing of the complaint.

NOTE: The parties in the Sun Insurance case expressed willingness to pay the correct
docket fees

De Leon vs. Court of Appeals G.R. No. 104796, March 6, 1998, (GAUDIEL)

FACTS:

A complaint for annulment or rescission of a contract of sale of 2 parcels of
land was filed by private respondents in the Regional Trial Court of Quezon City
against petitioners, praying for the following reliefs: (1) ordering nullification or
rescission of the Contract of Conditional Sale for having violated the rights of plaintiff
(private respondent) guaranteed to them under Article 886 of the Civil Code and/or
violation of the terms and conditions of the said contract, and (2) ordering defendants
(petitioners) to pay plaintiffs (private respondents) attorneys fees in the amount of
P100,000.

Upon the filing of the complaint, the clerk of court required private
respondents to pay docket and legal fees in the total amount of P610.00, broken down
as follows:

P450.00 Docket fee for the Judicial Development Fund under
Official Receipt No. 1877773

150.00 Docket fee for the General Fund under Official Receipt
No. 6834215

10.00 for the Legal Research Fund under Official Receipt No.
6834450.

Petitioners moved for the dismissal of the complaint on the ground that the
trial court did not acquire jurisdiction over the case by reason of private respondents
nonpayment of the correct amount of docket fees. Petitioners contended that in
addition to the fees already paid based on the claim for P100,000.00 for attorneys
fees, private respondents should have paid docket fees in the amount of P21,640.00,
based on the alleged value of the two (2) parcels of land subject matter of the contract
of sale sought to be annulled.

Private respondents filed opposition to the motion to dismiss, arguing that
outright dismissal of their complaint was not warranted on the basis of the alleged
nonpayment of the correct amount of docket fees, considering that the amount paid by
them was that assessed by the clerk of court. Petitioners filed a reply to which private
respondents filed, a rejoinder.

Trial court denied petitioners motion to dismiss but required private
respondents to pay the amount of docket fees based on the estimated value of the
parcels of land in litigation as stated in the complaint.

Private respondents filed a motion for reconsideration but their motion was
denied by the trial court. They therefore, brought the matter to the Court of Appeals
which rendering a decision annulling the orders of the trial court. The appellate court
held that an action for rescission or annulment of contract is not susceptible of
pecuniary estimation and, therefore, the docket fees should not be based on the value
of the real property, subject matter of the contract sought to be annulled or rescinded.

Petitioners moved for reconsideration, but their motion was denied in a
resolution. Hence, a petition for review on certiorari was filed.

ISSUE:

Whether not the basis for the docket fees to be paid for the filing of an
action for annulment or rescission of a contract of sale should be assessed as the
value of the real property, subject matter of the contract, or whether the action should
be considered as one which is not capable of pecuniary estimation and therefore the
fee charged should be a flat rate of P400.00 as provided in Rule 141, 7(b)(1) of the
Rules of Court.

RULING:

The Court holds that Judge Dalisay did not err in considering Civil Case No.
V-144 (Bautista v. Lim case) as basically one for rescission or annulment of contract
which is not susceptible of pecuniary estimation. It agrees with the cases discussion
of actions where the value of the case cannot be estimated, where the court held
that an action for rescission of contract is one which cannot be estimated and
therefore the docket fee for its filing should be the flat amount of P200.00 as then fixed
in the former Rule 141, 5(10). Consequently, the fee for docketing it is P200, an
amount already paid by plaintiff, now respondent Matilda Lim. (She should pay also
the two pesos legal research fund fee, if she has not paid it, as required in Section 4 of
Republic Act No. 3870, the charter of the U.P. Law Center).

Thus, although eventually the result may be the recovery of land, it is the
nature of the action as one for rescission of contract that is controlling. The Court of
Appeals correctly applied the case to the present one.

The applicable basis of the amount of docket fee to be paid is P400 as
based on

Rule 141 of the Rules of Court which provides:

SEC. 7. Clerks of Regional Trial Courts.

xxx

(b) For filing:

1. Actions where the value of the subject
matter cannot be estimated .............
P400.00

RULE 2 CAUSE OF ACTION

Sta. Clara Homeowners Association vs. Gaston G.R. No. 141961, January 23,
2002, 374 SCRA 396 (LESAVA)

Doctrine: A complaint states a cause of action when it contains these three essential
elements: (1) the legal right of the plaintiff, (2) the correlative obligation of the
defendant, and (3) the act or omission of the defendant in violation of the said legal
right.

Facts: Sps. Gaston (respondents) filed a case against Sta. Clara Homeowners Assoc.
(SCHA), petitioner, thru its Board of Directors, security guard, John Doe and Sta.
Clara estate, Inc.

The complaint alleges that when the Sps. bought their lot in the subdivision, there was
no mention or requirement of membership in any homeowners association. From that
time on, they have remained non-members of SCHA. For a time, non-membership
was not an issue in the issuance of a ticket. This arrangement remained undisturbed
until sometime in the middle of March, 1998, when SCHA disseminated a board
resolution which decreed that only its members in good standing were to be issued
stickers for use in their vehicles. Thereafter, on three separate incidents,

Victor M. Gaston, the son of the Sps. who lives with them was required by the guards
on duty employed by SCHA to show his drivers license as a prerequisite to his
entrance to the subdivision and to his residence therein despite their knowing him
personally and the exact location of his residence.

On another incident, The husband was himself prevented from entering the
subdivision and proceeding to his residential abode when petitioner herein security
guards Roger Capillo and a John Doe lowered the steel bar of the KAMETAL gate of
the subdivision and demanded from him his drivers license for identification. The
complaint further alleged that these acts of the petitioners herein done in the presence
of other subdivision owners had caused private respondents to suffer moral damage.

In the hearing for a TRO filed by the respondents, the counsel for the petitioners
informed the court that he would be filing a motion to dismiss the case. In his motion to
dismiss the case, petitioner's lawyer stated the ff. grounds: the trial court ha[d] no
jurisdiction over the case as it involve[d] an intra-corporate dispute between SCHA
and its members. That private respondents, having become lot owners of Sta. Clara
Subdivision after the approval by the SEC of SCHAs articles of incorporation and by-
laws, became members automatically. Moreover, the private respondents allegedly
enjoyed the privileges and benefits of membership in and abided by the rules of the
association, and even attended the general special meeting of the association
members. Their non-payment of the association yearly dues [did] not make them non-
members of SCHA continued the petitioners. And even granting that the private
respondents [were] not members of the association, the petitioners opined that the
HIGC still ha[d] jurisdiction over the case pursuant to Section 1 (a), Rule II of the
Rules of Procedure of the HIGC.

RTC ruled: deny motion to dismiss. finding that there existed no intra-corporate
controversy since the private respondents alleged that they ha[d] never joined the
association; and, thus, the HIGC had no jurisdiction to hear the case.

After this, petitioners filed a motion to resolve defendants motion to dismiss on ground
of lack of cause of action.

RTC issued an order denying the motion.

CA: dismissed the Petition and ruled that the RTC had jurisdiction over the dispute. It
debunked petitioners contention that an intra-corporate controversy existed between
the SCHA and respondents. The CA held that the Complaint had stated a cause of
action. It likewise opined that jurisdiction and cause of action were determined by the
allegations in the complaint and not by the defenses and theories set up in the answer
or the motion to dismiss

Petitioners are now raising that CA erred with the argument that there was no
allegation therein that private respondents were actually prevented from entering the
subdivision and gaining access to their residential abode.

Issue: WON CA erred in not ruling for a dismissal due to lack of action

Held: NO. In the instant case, the records sufficiently establish a cause of action.
First, the Complaint alleged that, under the Constitution, respondents had a right of
free access to and from their residential abode. Second, under the law, petitioners
have the obligation to respect this right. Third, such right was impaired by petitioners
when private respondents were refused access through the Sta. Clara Subdivision,
unless they showed their drivers license for identification.

RTC thus has original and exclusive jurisdiction.

In rendering this Decision, this Court is not prejudging the main issue of whether, in
truth and in fact, private respondents are entitled to a favorable decision by the RTC.
That will be made only after the proper proceedings therein. Later on, if it is proven
during the trial that they are indeed members of the SCHA, then the case may be
dismissed on the ground of lack of jurisdiction. We are merely holding that, on the
basis of the allegations in the Complaint, (1) the RTC has jurisdiction over the
controversy and (2) the Complaint sufficiently alleges a cause of action. Therefore, it is
not subject to attack by a motion to dismiss on these grounds.

Cipriano Centeno vs. Ignacio Centeno G.R. No. 140825, October 13, 2000, 343
SCRA 153 (LIM)

FACTS:
Cipriano Centeno is the owner of two parcels of rice land in Malolos, Bulacan.
The parcels of land were the subject of an earlier case filed before the DAR by
Ignacia Centeno for the cancellation of Certificates of Land Transfer (CLT)
It was established that Cipriano et al had obtained the CLTs for the parcels of
land through fraud and misrepresentation.
Consequently, the Secretary of Agrarian Reform orders the cancellation of the
CLTs in favor of Cipriano et al and ordered the issuance of a CLT in favor of
Ignacia.
Ignacia files a complaint with the Department of Agrarian Reform Adjudication
Board (DARAB) praying for preliminary injunction, ejectment, and damages
against Cipriano, et al.
Ignacia alleges that despite the decision of the DAR recognizing her ownership
over the properties as affirmed by the Office of the President, Cipriano, Leonila
Calonzo and Ramona Adriano have interfered with and prevented respondent
from exercising acts of possession over the properties and kept on harassing,
molesting and disturbing her peaceful possession as well as the enjoyment of
the fruits thereof, to her great damage and prejudice
Cipriano et al insisted that they are better entitled to the possession of the lots
in dispute, having been allegedly in long possession thereof, with their houses
thereon. On the other hand, the award of said lots to respondent is
unauthorized, not only because she has no possession thereof but also
because she has other landholdings in the locality. They averred that the
complaint should be dismissed for lack of cause of action and for lack of
jurisdiction on the part of the DARAB over the case.
The DARAB decides in favor of Ignacia.
Cipriano et al file a petition for review with the Court of Appeals asserting,
(amongst other issues such as jurisdiction) that the complaint states no cause
of action. They contend that respondent cannot claim maintenance of peaceful
possession when she does not in fact have actual possession of the subject
property. They claim that it is they who are in actual possession of said land.
Furthermore, they claim that respondent did not even make a demand for them
to vacate the land; nor did she present evidence to show that their acts of
possession resulted in loss or damage to her.

ISSUE: W/N there is a valid cause of action.

HELD:
Anent petitioners' contention that the complaint states no cause of action, we find this
to be, likewise, without merit. A cause of action is an act or omission of one party in
violation of the legal right or rights of another. The elements of a cause of action are:
(1) a right in favor of the plaintiff by whatever means and under whatever law it arises
or is created; (2) an obligation on the part of the named defendant to respect or not to
violate such right; and (3) an act or omission on the part of such defendant in violation
of the right of the plaintiff or constituting a breach of the obligations of the defendant to
the plaintiff for which the latter may maintain an action for recovery of damages.

In the instant case, the complaint for maintenance of peaceful possession contains the
following allegations, to wit:

FIRST CAUSE OF ACTION

8. Defendants are persistently interfering in and preventing plaintiff's possession and
cultivation of farmlot no. 122, and continue to commit acts tending to eject, oust and
remove the plaintiff therefrom, to her great damage and injury;

9. Similarly, defendants are harassing, molesting and disturbing plaintiff's peaceful
possession of Home Lot No. 111;

SECOND CAUSE OF ACTION

10. Without the knowledge and consent of herein plaintiffs, defendants constructed
two (2) houses on two portions of Home Lot No. 111, one house belonging to
defendant Cipriano Centeno, and the other to defendant Leonila Centeno Calonzo,
but occupied by defendant Ramona Adriano;

11. The construction of said houses is patently illegal and deprives plaintiff of the
possession and enjoyment thereof, to her great damage and injury.[9]

Clearly, the above allegations regarding petitioners' actions with regard to the subject
land, if true, violate respondent's rights as adjudicated by the DARAB; hence, these
constitute causes of action which entitle the respondent to the relief sought.
City Trust Corporation vs. Villanueva G.R. No. 142011, July 19, 2001, 361 SCRA
446 (MAGSUMBOL)

FACTS: Isagani C. Villanueva opened a savings account and current account with
Citytrust Banking Corporation (BANK). On May 1986, Villanueva deposited some
money in his savings account with the Bank's Legaspi Village Branch in Makati.
Realizing that he hadrun out of blan checks, Villanueva requested a new checkbook
from one of the Bank's customer service respresentatives. He then filled up a
checkbook requisition slip with the obligatory particulars, except for his current
account number which he could not remember. He told his predicament to a customer
service representative of the Bank, who in turn assured him that she could supply the
information from the Bank's account records. After signing the requisition slip, he gave
it to the representative.

Rempillo, another customer service representative of the Bank, saw Villanueva's
checkbook requisition slip. SHe took it and checked the Bank's checkbook register
which contained all the names and account numbers of the Bank's clients who were
issued checkbooks. Upon seeing the name "Isagani Villanueva" with Account No. 33-
00446-3 in the checkbook register, Rempillo copied the aforesaid account number on
the space intended for it in Villanueva's requisition slip.

A month after, Villanueva received his requested checkbook. He immediately signed a
check bearing the the amount of P50k payable to the order of Kingly Commodities.
Villanueva delivered the check to Helen Chu, his investment consultant at Kingly
Commodities, with his express instruction to use said check in placing a trading order
at Kingly Commodities' future trading business as soon as a favorable opportunity
presented itself. Two days later, he was informed that a trading order has been placed
in his behalf and the check has been delivered to Kingly Commodities. He then
deposited cash to his savings account to cover the full amount of the check he issued.

However, his check was dishonored due to insufficiency of funds and disparity in the
signature. Villanueva called Kingly Commodities and explained that there was a
mistake in the dishonor and told them to redeposit the check. He called the Bank's
Legaspi Village Branch Operations and inquired about the dishonor of his well-funded
check. The manager assured Villanueva that the check would be honored after the
sufficiency of the funds was ascertained. But 3 days later, he was informed that the
check was again dishonored due to insufficiency of funds and a stop-payment order
he allegedly issued.

Dismayed, Villanueva called up the Bank and inquired from the Manager the reason
for the dishonor of his well-funded check and the alleged stop-payment order he never
issued. The Manager promised to investigate the matter. In the meantime, he was
advised to re-deposit the check.

Villanueva then requested Lawrence Chin of Kingly Commodities to give him until
5:30pm that same day to make good his P50k check. He then proceed to the Bank's
Legaspi Village Branch Office to personally inqure. There he complained that his
trading order was rejected because of the dishonor of the check and that Kingly
Commodities threatened to close his trading account unless his check payment would
be made good before 5:30pm that day. Upon investigation, it appears that the reason
for the dishonor of the check was that the account number assigned to his new
checkbook was the account number of another depositor also named "Isagani
Villanueva" but with a different middle initial.

To resolve the matter, Genuino promised to send to Kingly Commodities a manager's
check for P50k before 5:30pm, the deadline given to Villanueva. She personally called
Kingly Commodities and explained the reason for the dishonor of the check.

On June 30, 1986, Villanueva sent a letter to the Bank addressing the President,
demanding indemnification for alleged losses and damages suffered by him as a
result of the dishonor of his well-funded check. He demanded the amount of P70k as
indemnification for actual damages in the form of lost profits and P2M for moral and
other damages.

The Bank' s Senior VP answered his letter and apologized for the unfortunate
oversight, but reminded VIllanueva that hte dishonor of his check was due to his
failure to state his current account number in his requisition slip. He stated furhter that
as soon as the mistake was discovered, the Bank promptly sent a manager's check to
Kingly COmmodities before the deadline to avoid any damage the dishonor of the
check might have caused.

Failing to obtain a facorable action from the Bank, Villanueva filed a complaint for
damages based on breach of contract and/or quasi-delict before the RTC of Makati.

ISSUE: W/N Villanueva has sufficient cause of action against the Bank

HELD: No.

It is clear from the records that the Bank was able to remedy the caveat of Kingly
Commodities to Villanueva that his trading account would be closed at 5:30pm on
June 26 1986. The Bank was able to issue a manager's check in favor of Kingly
Commodities before the deadline and was able to likewise explaint to Kingly
Commodities the circumstances surrounding the unfortunate situation. Verily, the
alleged embarrasment or inconveniece caused to Villanueva as a result of the incident
was timely and adequately contained, corrected, mitigated, if not entirely eradicated.
Villanueva, thus, failed to support his claim for moral damages.

As for compensatory damages, the SC said that while Villanueva might have suffered
some form of inconvenience and discomfort as a result of the dishonor of his check,
the same could not have been so grave or intolerable as he attempts to portray it.

The SC also said that the award of attorney's fees should also be deleted. As a
general rule, attorney's fees cannot be recovered as part of damages because of the
policy that no premium should be place on the right to litigate. They are not to be
awarded every time a party wins a suit. This award demands factual, legal and
equitable justification.

In view of the foregoing discussion, the SC concluded that Villanueva did not sustain
any compensable injury. If any damage had been suffered at all, it could be equivalent
to damnum absque injuria, i.e., damage wwithout injury or damage or injury inflicted
without injustice, or loss or damage without violation of a legal right, or a wrong done
to a man for which the law provides no remedy.

Macaslang v. Zamora, May 30, 2011, G.R. No. 156375 (MORA)
GR 156375; May 30, 2011

FACTS:

The respondents (Renato and Melba Zamora) filed a complaint for unlawful detainer in
the MTCC, alleging that the petitioner (Dolores Macaslang) sold to the Zamoras a
residential land located in Sabang, DanaoCity and that the Macaslang requested to
be allowed to live in the house with a promise to vacate as soon as she would be
able to find a new residence. They further alleged that despite their demand after a
year, the petitioner failed or refused to vacate the premises.

Despite the due service of the summons and copy of the complaint, the petitioner did
not file her answer. The MTCC declared her in default upon the respondents motion
to declare her in default, and proceeded to receive the respondents oral testimony
and documentary evidence. Thereafter, the MTCC rendered judgment ordering that
Macaslang to vacate the properties in question and to pay Attorneys Fees and the
monthly rental from December 1997 until the time Macaslang shall have vacated the
properties in question.

The petitioner appealed to the RTC, averring the following as reversible errors,
namely:

1. Extrinsic Fraud was practiced upon defendant-appellant which ordinary
prudence could not have guarded against and by reason of which she has been
impaired of her rights.

2. Defendant-Appellant has a meritorious defense in that there was no actual sale
considering that the absolute deed of sale relied upon by the plaintiff-appell[ees] is a
patent-nullity as her signature therein was procured through fraud and trickery.

and praying through her appeal memorandum, that a judgment be rendered in her
favor and this case be remanded to the Court of Origin , Municipal Trial Court of
Danao City, further proceedings to allow the defendant to present her evidence, and
thereafter, to render a judgment anew.

The RTC dismissed the complaint for failure to state a cause of action and rendered
the petitioners Motion for Execution of Judgment of the lower court, moot.

The respondents appealed to the CA, assailing the RTCs decision for disregarding
the allegations in the complaint in determining the existence or non-existence of a
cause of action.

The CA reversed and set aside the RTCs decision and reinstated the MTCCs
decision in favor of the respondents, disposing:

WHEREFORE,foregoing premises considered, the Petition is hereby GIVEN DUE
COURSE. Resultantly, the impugned decision of the Regional Trial Court is hereby
REVERSED and SET ASIDE for having no basis in fact and in law, and the Decision
of the Municipal Trial Court in Cities REINSTATED and AFFIRMED.

ISSUES:

1. Whether or not the CA correctly found that the RTC committed reversible error in
ruling on issues not raised by the petitioner in her appeal;

Ruling: As an appellate court, the RTC may rule upon an issue not raised on appeal.

In its decision, the CA ruled that the RTC could not resolve issues that were not
assigned by the petitioner in her appeal memorandum, and yet the Trial Court, in its
decision, ruled on issues not raised such as lack of cause of action and no prior
demand to vacate having been made.

Only errors assigned and properly argued on the brief and those necessarily related
thereto, may be considered by the appellate court in resolving an appeal in a civil
case. Based on said clear jurisprudence, the court a quo committed grave abuse of
discretion amounting to lack of jurisdiction when it resolved Defendant-appellees
appeal based on grounds or issues not raised before it, much less assigned by
Defendant-appellee as an error.

Not only that. It is settled that an issue which was not raised during the Trial in the
court below would not be raised for the first time on appeal as to do so would be
offensive to the basic rules of fair play, justice and due process

The petitioner disagrees with the CA and contends that the RTC as an appellate court
could rule on the failure of the complaint to state a cause of action and the lack of
demand to vacate even if not assigned in the appeal.

The Court concurs with the petitioner. The CA might have been correct had the appeal
been a first appeal from the RTC to the CA or another proper superior court, in which
instance Section 8 of Rule 51, which applies to appeals from the RTC to the CA,
imposes the express limitation of the review to only those specified in the assignment
of errors or closely related to or dependent on an assigned error and properly argued
in the appellants brief

But the petitioners appeal herein, being taken from the decision of the MTCC to the
RTC, was governed by a different rule, specifically Section 18 of Rule 70 of the Rules
of Court, to wit:

Section 18. xxxxxx
The judgment or final order shall be appealable to the appropriate
Regional Trial Court which shall decide the same on the basis of the
entire record of the proceedings had in the court of origin and such
memoranda and/or briefs as may be submitted by the parties or
required by the Regional Trial Court. (7a)

As such, the RTC, in exercising appellate jurisdiction, was not limited to the errors
assigned in the petitioners appeal memorandum, but could decide on the basis of the
entire record of the proceedings had in the trial court and such memoranda and/or
briefs as may be submitted by the parties or required by the RTC.

The difference between the procedures for deciding on review is traceable to Section
22 of Batas Pambansa Blg. 12, which provides:

Section 22. Appellate Jurisdiction. Regional Trial Courts shall exercise
appellate jurisdiction over all cases decided by Metropolitan Trial Courts, Municipal
Trial Courts, and Municipal Circuit Trial Courts in their respective territorial
jurisdictions. Such cases shall be decided on the basis of the entire record of the
proceedings had in the court of origin [and] such memoranda and/or briefs as may be
submitted by the parties or required by the Regional Trial Courts. The decision of the
Regional Trial Courts in such cases shall be appealable by petition for review to the
Court of Appeals which may give it due course only when the petition shows prima
facie that the lower court has committed an error of fact or law that will warrant a
reversal or modification of the decision or judgment sought to be reviewed.

As its compliance with the requirement of Section 36 of Batas Pambansa Blg. 129 to
adopt special rules or procedures applicable to such cases in order to achieve an
expeditious and inexpensive determination thereof without regard to technical rules,
the Court promulgated the 1991 Revised Rules on Summary Procedure, whereby it
institutionalized the summary procedure for all the first level courts. Section 21 of the
1991 Revised Rules on Summary Procedures pecifically stated:

Section 21. Appeal. The judgment or final order shall be appealable to the
appropriate Regional Trial Court which shall decide the same in accordance with
Section 22 of Batas Pambansa Blg. 129. The decision of the Regional Trial Court in
civil cases governed by this Rule, including forcible entry and unlawful detainer shall
be immediately executory, without prejudice to a further appeal that may be taken
there from. Section 10 of Rule 70 shall be deemed repealed.

Later on, the Court promulgated the 1997 Rules of Civil Procedure, effective on July 1,
1997, and incorporated in Section 7 of Rule 40 thereof the directive to the RTC to
decide appealed cases on the basis of the entire record of the proceedings had in the
court of origin and such memoranda as are filed, viz:

Section 7. Procedure in the Regional Trial Court.

(a) Upon receipt of the complete record or the record on appeal, the clerk of
court of the Regional Trial Court shall notify the parties of such fact.

(b) Within fifteen (15) days from such notice, it shall be the duty of the
appellant to submit a memorandum which shall briefly discuss the errors imputed to
the lower court, a copy of which shall be furnished by him to the adverse party. Within
fifteen (15) days from receipt of the appellants memorandum, the appellee may file
his memorandum. Failure of the appellant to file a memorandum shall be a ground for
dismissal of the appeal.

(c) Upon the filing of the memorandum of the appellee, or the expiration of the
period to do so, the case shall be considered submitted for decision. The Regional
Trial Court shall decide the case on the basis of the entire record of the proceedings
had in the court of origin and such memoranda as are filed. (n)

As a result, the RTC presently decides all appeals from the MTC based on the entire
record of the proceedings had in the court of origin and such memoranda or briefs as
are filed in the RTC.

Yet, even without the differentiation in the procedures of deciding appeals, the
limitation of the review to only the errors assigned and properly argued in the appeal
brief or memorandum and the errors necessarily related to such assigned error sought
not to have obstructed the CA from resolving the unassigned issues by virtue of their
coming under one or several of the following recognized exceptions to the limitation,
namely:

(a) When the question affects jurisdiction over the subject matter;

(b) Matters that are evidently plain or clerical errors within contemplation of
law;

(c) Matters whose consideration is necessary in arriving at a just decision
and complete resolution of the case or in serving the interests of
justice or avoiding dispensing piecemeal justice;

(d) Matters raised in the trial court and are of record having some bearing
on the issue submitted that the parties failed to raise or that the lower
court ignored;

(e) Matters closely related to an error assigned; and

(f) Matters upon which the determination of a question properly assigned is
dependent.

Consequently, the CA improperly disallowed the consideration and resolution of the
two errors despite their being: (a) necessary in arriving at a just decision and
acomplete resolution of the case; and (b) matters of record having some bearing on
the issues submitted that the lower court ignored.

2. Whether or not the CA correctly found that the complaint stated a valid cause of
action;

Ruling: CA correctly delved into and determined whether or not complaint stated a
cause of action.

The RTC opined that the complaint failed to state a cause of action because the
evidence showed that there was no demand to vacate made upon the petitioner.

The CA disagreed, observing in its appealed decision:

But what is worse is that a careful reading of Plaintiffs-appellants Complaint
would readily reveal that they have sufficiently established (sic) a cause of action
against Defendant-appellee. It is undisputed that as alleged in the complaint and
testified to by Plaintiffs-appellants, a demand to vacate was made before the action for
unlawful detainer was instituted.

A complaint for unlawful detainer is sufficient if it alleges that the withholding of
possession or the refusal is unlawful without necessarily employing the terminology of
the law (Jimenez vs. Patricia, Inc., 340 SCRA 525). In the case at bench, par. 4 of the
Complaint alleges, thus:

4. After a period of one (1) year living in the
aforementioned house, Plaintiff demanded upon defendant to
vacate but she failed and refused;

From the foregoing allegation, it cannot be disputed that a demand to vacate has
not only been made but that the same was alleged in the complaint. How the Regional
Trial Court came to the questionable conclusion that Plaintiffs-appellants had no
cause of action is beyond Us.

The Supreme Court agrees with the CA. A complaint sufficiently alleges a cause of
action for unlawful detainer if it states the following:

(a)Initially, the possession of the property by the defendant was by contract
with or by tolerance of the plaintiff;

(b)Eventually, such possession became illegal upon notice by the plaintiff to
the defendant about the termination of the latters right of possession;

(c)Thereafter, the defendant remained in possession of the property and
deprived the plaintiff of its enjoyment; and

(d)Within one year from the making of the last demand to vacate the
property on the defendant, the plaintiff instituted the complaint for
ejectment.

In resolving whether the complaint states a cause of action or not, only the facts
alleged in the complaint are 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.
Only ultimate facts, not legal conclusions or evidentiary facts, are considered for
purposes of applying the test.

Based on its allegations, the complaint sufficiently stated a cause of action for unlawful
detainer. Firstly, it averred that the petitioner possessed the property by the mere
tolerance of the respondents. Secondly, the respondents demanded that the petitioner
vacate the property, thereby rendering her possession illegal. Thirdly, she remained in
possession of the property despite the demand to vacate. And, fourthly, the
respondents instituted the complaint on March 10, 1999, which was well within a year
after the demand to vacate was made around September of 1998 or later.

Yet, even as the Court rule that the respondents complaint stated a cause of action,
we must find and hold that both the RTC and the CA erroneously appreciated the real
issue to be about the complaints failure to state a cause of action. It certainly was not
so, but the respondents lack of cause of action. Their erroneous appreciation
expectedly prevented the correct resolution of the action.

Failure to state a cause of action and lack of cause of action are really different from
each other. On the one hand, failure to state a cause of action refers to the
insufficiency of the pleading, and is a ground for dismissal under Rule 16 of the Rules
of Court. On the other hand, lack of cause action refers to a situation where the
evidence does not prove the cause of action alleged in the pleading. Justice
Regalado, a recognized commentator on remedial law, has explained the distinction:

xxx What is contemplated, therefore, is a failure to state a cause of action
which is provided in Sec. 1(g) of Rule 16. This is a matter of insufficiency of the
pleading. Sec. 5 of Rule 10, which was also included as the last mode for raising the
issue to the court, refers to the situation where the evidence does not prove a cause of
action. This is, therefore, a matter of insufficiency of evidence. Failure to state a cause
of action is different from failure to prove a cause of action. The remedy in the first is
to move for dismissal of the pleading, while the remedy in the second is to demur to
the evidence, hence reference to Sec. 5 of Rule 10 has been eliminated in this
section. The procedure would consequently be to require the pleading to state a cause
of action, by timely objection to its deficiency; or, at the trial, to file a demurrer to
evidence, if such motion is warranted.

A complaint states a cause of action if it avers the existence of the three essential
elements of a cause of action, namely:

(a) The legal right of the plaintiff;

(b) The correlative obligation of the defendant; and

(c) The act or omission of the defendant in violation of said legal right.

If the allegations of the complaint do not aver the concurrence of these elements, the
complaint becomes vulnerable to a motion to dismiss on the ground of failure to state
a cause of action. Evidently, it is not the lack or absence of a cause of action that is a
ground for the dismissal of the complaint but the fact that the complaint states no
cause of action. Failure to state a cause of action may be raised at the earliest stages
of an action through a motion to dismiss, but lack of cause of action may be raised at
any time after the questions of fact have been resolved on the basis of the
stipulations, admissions, or evidence presented.

Having found that neither Exhibit C nor Exhibit E was a proper demand to vacate,
considering that Exhibit C (the respondents letter dated February 11, 1998)
demanded the payment ofP1,101,089.90, and Exhibit E (their letter dated January 21,
1999) demanded the payment ofP1,600,000.00, the RTC concluded that the demand
alleged in the complaint did not constitute a demand to pay rent and to vacate the
premises necessary in an action for unlawful detainer. It was this conclusion that
caused the RTC to confuse the defect as failure of the complaint to state a cause of
action for unlawful detainer.

The Court held that the RTC erred even in that regard.

To begin with, it was undeniable that Exhibit D (the respondents letter dated April 28,
1998) constituted the demand to vacate that validly supported their action for unlawful
detainer, because of its unmistakable tenor as a demand to vacate, which the
following portion indicates:

This is to give notice that since the mortgage to your property has long expired
and that since the property is already in my name, I will be taking over the occupancy
of said property two (2) months from date of this letter.


Exhibit D, despite not explicitly using the word vacate, relayed to the petitioner the
respondents desire to take over the possession of the property by giving her no
alternative except to vacate. The word vacate, according to Golden Gate Realty
Corporation v. Intermediate Appellate Court, is not a talismanic word that must be
employed in all notices to vacate.


RULE 3 PARTIES TO CIVIL ACTION

Korea Exchange Bank vs. Filkor Business Integrated, Inc. G.R. No. 138292, April
10, 2002, 380 SCRA 381 (PEREZ)


FACTS

On January 9, 1997, Filkor borrowed US$140,000 from petitioner Korea
Exchange Bank, payable on July 9, 1997. Of this amount, only US$40,000 was
paid by Filkor
In addition, Filkor executed nine trust receipts in favor of petitioner. However,
Filkor failed to turn over to petitioner the proceeds from the sale of the goods, or
the goods themselves as required by the trust receipts in case Filkor could not
sell them.
Filkor also negotiated to petitioner the proceeds of seventeen letters of credit.
When petitioner tried to collect the proceeds of the letters of credit by presenting
the bills of exchange drawn to collect the proceeds, they were dishonored
because of discrepancies
Prior to all the above, in order to secure payment of all its obligations, Filkor
executed a Real Estate Mortgage on February 9, 1996. It mortgaged to
petitioner the improvements belonging to it constructed on the lot it was leasing
at the Cavite Export Processing Zone Authority
As respondents failed to fulfill their obligations, petitioner filed Civil Case No. N-
6689 in the Regional Trial Court of Cavite City, docketed as Korea Exchange
Bank vs. Filkor Business Integrated, Inc.
In its complaint, petitioner prayed that (a) it be paid by respondents under its
twenty-seven causes of action; (b) the property mortgaged be foreclosed and
sold at public auction in case respondents failed to pay petitioner within ninety
days from entry of judgment; and (c) other reliefs just and equitable be granted.
The defendants denied the allegations based on the fact that the provided
documents were mere photocopies
Moreover, although the RTC granted letter (a) of the petition, it ruled that
petitioner had already abandoned its claim under letter (b) because it only filed a
simple collection case

ISSUES:

1) Is the petitioner entitled to summary proceedings? Yes
2) Is petitioners complaint before the trial court an action for foreclosure of a real
estate mortgage, or an action for collection of a sum of money? REM
3) Is the appeal correctly lodged before SC rather than with the Court of Appeals? SC

HELD:
1) Yes. A summary of judgment is one granted by the court upon motion by a party
for an expeditious settlement of the case, there appearing from the pleadings,
depositions, admissions and affidavits that there are no important questions or
issues of fact involved (except as to the amount of damages) and that, therefore,
the moving party is entitled to a judgment as a matter of law (Sections 1, 2, 3,
Rule 35, 1997 Rules of Civil Procedure). In the case at bar, there is clearly no
substantial triable issue, since it appears that Defendants denied all material
allegations of the complaint only because the documents attached were mere
photocopies. Hence, the motion for summary judgment filed by plaintiff is proper.

2) The plaintiffs allegation satisfies in part the requirements of Section 1, Rule 68 of
the 1997 Rules of Civil Procedure on foreclosure of real estate mortgage, which
provides:
SECTION 1. Complaint in action for foreclosure. In an action for the foreclosure of a
mortgage or other encumbrance upon real estate, the complaint shall set forth
the date and due execution of the mortgage; its assignments, if any; the names
and residences of the mortgagor and the mortgagee; a description of the
mortgaged property; a statement of the date of the note or other documentary
evidence of the obligation secured by the mortgage, the amount claimed to be
unpaid thereon; and the names and residences of all persons having or claiming
an interest in the property subordinate in right to that of the holder of the
mortgage, all of whom shall be made defendants in the action.

In Paragraph 183 of the plaintiffs allegation, the date and due execution of the
real estate mortgage are alleged. The properties mortgaged are stated and
described therein as well. In addition, the names and residences of respondent
Filkor, as mortgagor, and of petitioner, as mortgagee, are alleged in paragraphs
1 and 2 of the complaint.[13] The dates of the obligations secured by the
mortgage and the amounts unpaid thereon are alleged in petitioners first to
twenty-seventh causes of action.[14]
Moreover, the very prayer of the complaint before the trial court states that
judgment be rendered to foreclose the said property, and have it sold at public
auction in case defendants fail to pay plaintiff within ninety (90) days from entry
of judgment.
o Section 2 of Rule 68 of the 1997 Rules of Civil Procedure, provides
that payment shall be rendered 90 120 days from date of
judgment. Otherwise such default would lead to the foreclosure of
defendants property

3) Appeal was appropriately filed with the SC because it involves a question of law.
This is pursuant to Section 1 of Rule 45 of the 1997 Rules of Civil Procedure
What the petitioner impugns is the determination by the trial court
of the nature of action filed by petitioner, based on the allegations
in the complaint. Such a determination as to the correctness of
the conclusions drawn from the pleadings undoubtedly involves a
question of law.


Relucio vs. Mejia Lopez G.R. No. 138497, January 16, 2002, 373 SCRA 578
(SUPAPO)

Subject guide: Real Party in Interest; Necessary Party

Facts:
Angelina Mejia Lopez (legal wife) filed a petition for APPOINTMENT AS SIX OF
CONJUGAL PARTNERSHIP OF PROPERTIES, FORFEITURE, ETC., Alberto Lopez
(husband) and Imelda Relucio, in the RTC of Makati.

In the petition, Angelina alleged that Alberto, 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.
It was further alleged that Alberto and Relucio, during their period of cohabitation since
1976, have amassed a fortune. And, that Alberto placed substantial portions of these
conjugal properties in the name of Relucio.

A Motion to Dismiss the Petition was filed by Relucio on the ground that Angelina has
no cause of action against her. Respondent Judge denied the 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. The Motion for reconsideration was also denied. CA denied her
Petition for Certiorari.

Issue:

Whether Relucios inclusion as party defendant is essential in the proceedings for a
complete adjudication of the controversy. (Whether Relucio is a real party in
interest/necessary party/indispensable party)

Held: No.

Nowhere in the allegations does it appear that relief is sought against petitioner.
Respondents 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. The
administration of the property of the marriage is entirely between them, to the
exclusion of all other persons. 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. In fact, none of the three elements of a cause of action exists.
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, if any there be, in property co-owned by
him with petitioner.
Respondents asserted right to forfeit extends to Alberto J. Lopez share alone.
Failure of Alberto J. Lopez to surrender such share, assuming the trial court finds in
respondents favor, results in a breach of an obligation to respondent and gives rise to
a cause of action. Such cause of action, however, pertains to Alberto J. Lopez, not
petitioner.
The respondent also sought support. Support cannot be compelled from a stranger.
The action in Special Proceedings is, to use respondent Angelina M. Lopez own
words, one by an aggrieved wife against her husband. References to petitioner in the
common and specific allegations of fact in the complaint are merely incidental, to set
forth facts and circumstances that prove the causes of action alleged against Alberto
J. Lopez.

Finally, as to the moral damages, respondents claim for moral damages is against
Alberto J. Lopez, not petitioner.

A real party in interest is one who stands to be benefited or injured by the judgment of
the suit. In this case, petitioner would not be affected by any judgment in Special
Proceedings.

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. Petitioners participation in Special Proceedings M-3630 is not indispensable.
Certainly, 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 against Alberto J.
Lopez.
Nor can petitioner be a necessary party in Special Proceedings. A necessary party as
one who is not indispensable but who ought to be joined as party if complete relief is
to be accorded those already parties, or for a complete determination or settlement of
the claim subject of the action. 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.
Judgment: the Court GRANTS the petition and REVERSES the decision of the Court
of Appeals. The Court DISMISSES Special Proceedings M-3630 of the RTC, Makati,
Branch 141 as against petitioner.

William Uy and Rodel Roxas vs. Court of Appeals G.R. No. 120465, September 9,
1999, 314 SCRA 69 (VELASCO)

FACTS:
Petitioners William Uy and Rodel Roxas are agents authorized to sell eight
parcels of land by the owners thereof. They offered to sell these lots to National
Housing Authority (NHA) to be utilized and developed as a housing project.
Of the eight parcels of land, only five were paid for by the NHA because of the
report it received from the Land Geosciences Bureau of the Department of
Environment and Natural Resources (DENR) that the remaining area is located at an
active landslide area and therefore, not suitable for development into a housing
project. NHA therefore cancelled the sale over the three parcels of land.
Petitioners filed a Complaint for Damages against NHA. After trial, the RTC
rendered a decision declaring the cancellation of the contract to be justified. However,
they awarded damages to petitioners in the amount as agreed upon in their contract of
sale. Upon appeal, the CA reversed the decision of the trial court. It held that since
there was sufficient justifiable basis in cancelling the sale, it saw no reason for the
award of damages. The CA also noted that petitioners were mere attorneys-in-fact
and, therefore, not the real parties-in-interest in the action before the trial court.
The CA explained that in the complaint, they alleged themselves to be the
sellers agents for the 8 parcels of land. This obviously shows that they acted as
attorneys-in-fact of the lot owners who are the real parties in interest but who were
omitted to be pleaded as party-plaintiffs in the case. The case should be properly
dismissed as the rule is that: every action must be prosecuted in the name of the real
parties-in-interest (Section 2, Rule 3, Rules of Court).
ISSUE: WON Uy and Roxas are real parties-in-interest.
HELD: No.
Petitioners in this case brought the action for damages in their own name and
in their own behalf, claiming damages for unearned income and advances. This
contention is unmeritorious.
Section 2, Rule 3 of the Rules of Court requires that every action must be
prosecuted and defended in the name of the real party-in-interest. The real party-in-
interest is the party who stands to be benefited or injured by the judgment or the party
entitled to the avails of the suit.
Petitioners in this case do not have this right. Article 1311 of the Civil Code
states:
Contracts take effect only between the parties, their assigns, and heirs, except
in case where the rights and obligations arising from the contract are not
transmissible by their nature, or by stipulation, or by provision of law. x x x.
If a contract should contain some stipulation in favor of a third person, he may
demand its fulfillment provided he communicated his acceptance to the obligor
before its revocation. A mere incidental benefit or interest of a person is not
sufficient. The contracting parties must have clearly and deliberately
conferred a favor upon a third person.
PARTIES
Petitioners are not parties to the contract of sale between their principals and
NHA. They are mere agents of the owners of the land subject of the sale. Since a
contract may be violated only by the parties thereto as against each other, the real
parties-in-interest, either as plaintiff or defendant, in an action upon that contract must,
generally, either be parties to said contract.
HEIRS
Neither has there been any allegation, much less proof, that petitioners are the
heirs of their principals.
ASSIGNS
An agent, in his own behalf, may bring an action founded on a contract made
for his principal, as an assignee of such contract under the law on agency. In its
Comment, it further expounded that the customs of business or the course of conduct
between the principal and the agent may indicate that an agent who ordinarily has
merely a security interest is a transferee of the principals rights under the contract and
as such is permitted to bring suit. If the agent has settled with his principal with the
understanding that he is to collect the claim against the obligor by way of reimbursing
himself for his advances and commissions, the agent is in the position of an assignee
who is the beneficial owner of the chose in action. He has an irrevocable power to
sue in his principals name.
Petitioners, however, have not shown that they are assignees of their
principals to the subject contracts. While they alleged that they made advances and
that they suffered loss of commissions, they have not established any agreement
granting them the right to receive payment and out of the proceeds to reimburse for
advances and commissions before turning the balance over to the principal[s].
THIRD PARTIES
In this case, it does not appear that petitioners are beneficiaries of a
stipulation pour autrui under the second paragraph of Article 1311 of the Civil Code.
Indeed, there is no stipulation in any of the Deeds of Absolute Sale clearly and
deliberately conferring a favor to any third person.
Section 372 (2) of the Restatement of the Law on Agency (Second) states:
(2) An agent does not have such an interest in a contract as to entitle him to
maintain an action at law upon it in his own name merely because he is
entitled to a portion of the proceeds as compensation for making it or because
he is liable for its breach.
The Comment on the above subsection also says that the fact that an agent
who makes a contract for his principal will gain or suffer loss by the performance or
nonperformance of the contract by the principal or by the other party thereto does not
entitle him to maintain an action on his own behalf against the other party for its
breach. An agent entitled to receive a commission from his principal upon the
performance of a contract which he has made on his principals account does not,
from this fact alone, have any claim against the other party for breach of the contract,
either in an action on the contract or otherwise. An agent who is not a promisee
cannot maintain an action at law against a purchaser merely because he is entitled to
have his compensation or advances paid out of the purchase price before payment to
the principal.
As petitioners are not parties, heirs, assignees, or beneficiaries of a stipulation
pour autrui under the contracts of sale, they do not, under substantive law, possess
the right they seek to enforce. Therefore, they are not the real parties-in-interest in
this case.

Clara Espiritu Borlongan v. Consuelo Madrideo G.R. No. 120267, January 25,
2000, 323 SCRA 248 (VILLAFUERTE)

Facts:

Petitioners Clara Borlongan,et. al and private respondent Consuelo Madrideo
occupied Dalisay Tongko-Camachos lot. Private respondent filed an unlawful detainer
case against petitioners claiming that she is the sole lessee and that petitioners
possession was by her mere tolerance. Camacho, the owner of the lot, testified that
both petitioners and defendant were rightful lessees.

Issues: 1. Who has the burden of proof?
2. Whether private respondent is the real party-in-interest

Held:

1. Private respondent has the burden of proof. In civil cases the burden of proof to be
established by preponderance of evidence is on the plaintiff who is the party asserting
the affirmative of an issue. He has the burden of presenting evidence required to
obtain a favorable judgment, and he, having the burden of proof, will be defeated if no
evidence were given on either side.

Private respondent as plaintiff in the unlawful detainer action had the burden to prove
her allegations inasmuch as she claims that she has a better right as lessee against
petitioners. However, she failed miserably to meet the burden of proof.

Private respondent basically relied on the receipts of her rental payments. At best,
those receipts by themselves alone simply confirm that she is a lessee, and not that
she is the only lessee of the property. Moreover, the owner of the property, Ma.
Dalisay Tongko-Camacho, has been unwavering in her declaration that petitioners are
also lessees of her property. When faced with Camachos undeviating
acknowledgment, private respondents claim turns nil. Private respondent never
rebutted Camachos recognition of the legitimate status of petitioners as lessees. This
omission creates an adverse inference that such uncontroverted evidence speaks of
the truth. Accordingly, as against the undisputed sworn declaration by the owner of the
property who is more knowledgeable of the subsisting contract concerning her land,
private respondents claim lacks buoyancy.

2. No. Private respondent is not the real party-in-interest. One who has no right or
interest to protect cannot invoke the jurisdiction of the court as party-plaintiff in action
for it is jurisprudentially ordained that every action must be prosecuted or defended in
the name of the real party in interest. A "real party in interest" is one who stands to be
benefited or injured by the judgment in the suit, or the party entitled to the avails of the
suit. In the instant case, private respondent is not a real party in interest inasmuch as
she failed to establish her claim of being the sole lessee of the disputed property or
the sublessor of petitioners. Thus, dismissal of the case for lack of cause of action was
properly ordered by the Metropolitan Trial Court, as affirmed by the Regional Trial
Court on appeal.

International Express Travel vs. Court of Appeals G.R. No. 119020, October 19,
2000, 343 SCRA 674 (CHING)

Facts:
International Express Travel & Tour Services, Inc. (IETTI) offered its travel services as
a travel agency to the Philippine Football Federation (PFF) through its president, Henri
Kahn. PFF accepted the offer.

IETTI secured airline tickets for the trips to the SEA Games in Kuala Lumpur and other
trips and in turn, PFF made two partial payments. Since payment is not yet complete,
IETTI wrote a demand letter to Kahn and received two payments but no other
payment was made afterwards despite repeated demands.

IETTI filed a civil case before RTC against Henri Kahn in his personal capacity as
President of PFF and impleaded PFF as an alternative defendant for the unpaid
balance. Kahn filed his answer with counterclaim, while PFF failed to file its answer
and was declared in default by the trial court. Afterwards, the trial court rendered
judgment and ruled in favor of IETTI and declared Henri Kahn personally liable for the
unpaid obligation for failure to prove the corporate existence of PFF. The complaint of
IETTI against PFF and the counterclaims of Henri Kahn were dismissed, with costs
against Kahn. Only Henri Kahn elevated the decision to the Court of Appeals.

CA rendered a decision reversing the trial court. The Court of Appeals took judicial
notice of the existence of PFF as a national sports association; as such, PFF is
empowered to enter into contracts through its agents and should be liable for the
contract entered into by its agent.

IETTI filed a motion for reconsideration and as an alternative prayer pleaded that PFF
be held liable for the unpaid obligation but was denied by CA so IETTI filed the petition
with the Supreme Court.

According to Kahn, IETTI has no cause of action against him either in his personal
capacity or in his official capacity as president of PFF because he did not guarantee
payment but merely acted as an agent of PFF which has a separate and distinct
juridical personality.

Issue: Whether Kahn should be made personally liable for the unpaid obligations of
the Philippine Football Federation.

Held:
Yes.

PFF is not automatically considered a national sports association. It must first be
recognized and accredited by the Philippine Amateur Athletic Federation and the
Department of Youth and Sports Development. In this case, this was never
substantiated by Kahn; thus, PFF is not a national sports association within the
purview of the aforementioned laws and does not have corporate existence of its own.

It follows that Kahn should be held liable for the unpaid obligations of PFF. Under the
law, any person acting or purporting to act on behalf of a corporation which has no
valid existence assumes such privileges and becomes personally liable for contract
entered into or for other acts performed as such agent. Thus, Kahn is therefore
personally liable for the contract entered into by PFF with IETTI. As president of the
PFF, Kahn is presumed to have known about the corporate existence or non-
existence of PFF.

A voluntary unincorporated association, like PFF has no power to enter into, or to
ratify, a contract. The contract entered into by its officers or agents on behalf of such
association is not binding on, or enforceable against it. The officers or agents are
themselves personally liable.

RULE 4 VENUE OF ACTIONS

AUCTION IN MALINTA, INC., VS. WARREN EMBES LUYABEN, G.R. NO. 173979,
February 12, 2007 (PABALAN)

Doctrine:
Mere stipulation on the venue of an action is not enough to preclude parties from
bringing a case in other venues. It must be shown that such stipulation is exclusive.

Facts:
Warren Embes Luyaben won in the auction of petitioner. Respondent paid for the
equipment but petitioner was not able to produce the same.
Luyaben then filed a complaint for damages against Auction in Malinta, Inc.
(AIMI) in RTC-Kalinga where Luyaben resides.
AIMI moved to dismiss the complaint on the ground of improper venue by
invoking the following stipulation in the Bidders Application and Registration
Bidding Agreement which states that: ALL COURT LITIGATION PROCEDURES
SHALL BE CONDUCTED IN THE APPROPRIATE COURTS OF VALENZUELA
CITY, METRO MANILA.

Issue:
WON stipulation in the Agreement effectively limits the venue of the case exclusively
to the proper court of Valenzuela City? -- NO.

Held:
The SC held that mere stipulation on the venue of an action is not enough to preclude
parties from bringing a case in other venues. It must be shown that such stipulation is
exclusive. In the absence of qualifying or restrictive words, such as exclusively and
waiving for this purpose any other venue, shall only preceding the designation of
venue, to the exclusion of the other courts, or words of similar import, the stipulation
should be deemed as merely an agreement on an additional forum, not as limiting
venue to the specified place.

In the instant case, the stipulation in the parties agreement, i.e., all Court litigation
procedures shall be conducted in the appropriate Courts of Valenzuela City, Metro
Manila, evidently lacks the restrictive and qualifying words that will limit venue
exclusively to the RTC of Valenzuela City. Hence, the Valenzuela courts should only
be considered as an additional choice of venue to those mentioned under Section 2,
Rule 4.
Being that Kalinga is where the aggrieved party resides, RTC-Kalinga is a proper
venue for the case at bar, following Rule 4 Section 2 of the Rules of Civil Procedure,
which states that:
Sec. 2. Venue of personal actions. All other actions may be commenced and tried
where the plaintiff or any of the principal plaintiffs resides, or where the defendant or
any of the principal defendants resides, or in the case of a nonresident defendant,
where he may be found, at the election of the plaintiff.

You might also like