Republic of the Philippines

Mindanao State University

COLLEGE OF LAW Iligan Extension
Iligan City

DIGESTED CASES

Submitted by:
Faruzaima M. Esmail
Medori Eden G. Fiel
Hanan C. Ibrahim
Fatma U. Kisol
Noha U. Kisol
Madonna F. Tumada
TEEHANKEE 3rd Year

Submitted to:

Judge Orlando C. Gallardo

Natcher V. Hon. Court of Appeals, et al., G.R. No. 133000, October 2, 2001;
366 SCRA 385
FACTS:
A complaint was filed before Regional Trial Court of Manila, Branch 55 that
the petitioner was alleged that upon the death of her husband Garciano Del
Rosario she through the employment of fraud, misrepresentation and forgery
acquired TCT No. 107443, by making it appear that Graciano executed a Deed of
Sale dated 25 June 1987 in favor of the petitioner resulting in the cancellation of
TCT No. 107443 and the issuance of TCT No. 186059 in the name of Patricia
Natcher. In her answer she denied the allegation and averred that she was legally
married to the late Garciano Del Rosario and thus under the law, she was likewise
considered a compulsory heir of the latter. After the trial, the lower court rendered
its decision nullifying the deed of sale executed by the late Garciano Del Rosario
as it was prohibited by law and cannot be regarded as a valid donation as it was
equally prohibited by law under Article 133 of the New Civil Code. The lower court
further ruled that it may be regarded as an extension of advance inheritance of
Patricia Natcher being a compulsory heir of the deceased. On appeal, the Court of
Appeals reversed and set aside the lower court's decision ratiocinating, inter alia
that it is the probate court that has exclusive jurisdiction to make a just and legal
distribution of the estate. The court a quo, trying an ordinary action for
reconveyance/annulment of title, went beyond its jurisdiction when it performed the
acts proper only in a special proceeding for the settlement of estate of a deceased
person. Thus the court a quo erred in regarding the subject property as an advance
inheritance. What the court should have done was merely to rule on the validity of
the sale and leave the issue on advancement to be resolved in a separate
proceeding instituted for that purpose. Aggrieved, herein petitioner seeks refuge
under our protective mantle through the expediency of Rule 45 of the Rules of
Court and assails the appellate court's decision for being contrary to law and the
facts of the case. Hence this petition
ISSUE:
Whether the RTC failed to observe established rules of procedure governing
the settlement of the estate of Graciano Del Rosario.
HELD:
We concur with the Court of Appeals and find no merit in the instant petition.
Section 3, Rule 1 of the 1997 Rules of Civil Procedure defines civil action and
special proceedings, in this wise: a) A civil action is one by which a party sues
another for the enforcement or protection of a right, or the prevention or redress of
a wrong. "A civil action may either be ordinary or special. Both are governed by the
rules for ordinary civil actions, subject to specific rules prescribed for a special civil
action. c) A special proceeding is a remedy by which a party seeks to establish a
status, a right or a particular fact."
As could be gleaned from the foregoing, there lies a marked distinction
between an action and a special proceeding. An action is a formal demand of one's
right in a court of justice in the manner prescribed by the court or by the law. It is
the method of applying legal remedies according to definite established rules. The
term "special proceeding" may be defined as an application or proceeding to
establish the status or right of a party, or a particular fact. Usually, in special
proceedings, no formal pleadings are required unless the statute expressly so
provides. In special proceedings, the remedy is granted generally upon an
application or motion."
A perusal of the records, specifically the antecedents and proceedings in the
present case, reveals that the trial court failed to observe established rules of
procedure governing the settlement of the estate of Graciano Del Rosario. This
Court sees no cogent reason to sanction the non-observance of these wellentrenched rules and hereby holds that under the prevailing circumstances, a
probate court, in the exercise of its limited jurisdiction, is indeed the best forum to
ventilate and adjudge the issue of advancement as well as other related matters
involving the settlement of Graciano Del Rosario's estate.

Sun Insurance Office Ltd. V. Asuncion, 170 SCRA 275 (1989);

FACTS:
In 1984, Sun Insurance Office, Ltd. was sued by Manuel Tiong before the
Quezon City RTC. In the body of his complaint, Tiong claimed damages amounting
to Php50 million. But said amount was not mentioned in his prayer. He paid a
docket fee of Php210.00 therefore.
At that time, courts in Quezon City were being investigated by the Supreme
Court for under-assessment of docket fees. In 1986, Judge Maximiano Asuncion
ordered Tiong to amend his complaint so that the proper docket fee may be
computed. Tiong complied and in his amended complaint, the body thereof
discussed a damage amounting to Php44 million but the prayer asked for damages
not less than Php10 million.
Based on the not less than Php10 million prayer, the clerk of court
assessed a docket fee of P39,786.00 which Tiong paid. Later, Tiong filed a
supplemental complaint where he was asking an additional Php20 million in
damages. e later paid an additional docket fee therefor of Php80,396.00. The same
was admitted by Judge Asuncion.
Sun Insurance invoked the ruling in Manchester Development vs CA where
it was ruled that the court does not acquire jurisdiction over a case if the proper
docket fee was not paid; that the defect cannot be cured by a supplemental
complaint because if the proper docket fee was not paid in the first place, then
there is no original complaint to supplement nor amend.
The issue raised the Court of Appeals where the CA ruled that Judge
Asuncion is correct but Tiong must pay an additional docket fee of Php62,432.90,
which Tiong complied.

ISSUE:
Whether or not the court acquired jurisdiction over the foregoing case
considering that the correct and proper docket fee has not been paid in the first
place.

HELD:
Yes. The ruling in Manchester was relaxed in this case because Tiong
showed his willingness to pay the additional docket fees unlike in the case
of Manchester where Manchester Development intended to defraud the
government by intentionally omitting the amount of damages it claimed in the
prayer of their complaint.
The Supreme Court also laid down the following rules on docket fees:
1. It is not simply the filing of the complaint or appropriate initiatory pleading, but
the payment of the prescribed docket fee,that vests a trial court with jurisdiction
over the subject matter or nature of the action. Where the filing of the initiatory
pleading is not accompanied by payment of the docket fee, the court may allow
payment of the fee within a reasonable time but in no case beyond the applicable
prescriptive or reglementary period.
2. The same rule applies to permissive counterclaims, third party claims and similar
pleadings, which shall not be considered filed until and unless the filing fee

prescribed therefor is paid. The court may also allow payment of said fee within a
reasonable time but also in no case beyond its applicable prescriptive or
reglementary period.
3. Where the trial court acquires jurisdiction over a claim by the filing of the
appropriate pleading and payment of the prescribed filing fee but, subsequently,
the judgment awards a claim not specified in the pleading, or if specified the same
has been left for determination by the court, the additional filing fee therefor shall
constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court
or his duly authorized deputy to enforce said lien and assess and collect the
additional fee.

Tagay V. Regional Trial Court of Tagum, Davao del Norte, 180 SCRA 433
(1989)
FACTS:
These were 2 separate cases originally filed by Godofredo Pineda at the
RTC of Tagum for recovery of possession (acciones publiciana) against 3
defendants, namely: Antonia Noel, Ponciano Panes, and Maximo Tacay.
Pineda was the owner of 790 sqm land evidenced by TCT No. T-46560. The
previous owner of such land has allowed the 3 defendants to use or occupy the
same by mere tolerance. Pineda, having himself the need to use the property, has
demanded the defendants to vacate the property and pay reasonable rentals
therefore,
but
such
were
refused.
The complaint was challenged in the Motions to Dismiss filed by each defendant
alleging that it did not specify the amounts of actual, nominal, and exemplary
damages, nor the assessed value of the property, that being bars the determination
of
the
RTCs
jurisdiction
in
deciding
the
case.
The Motions to Dismiss were denied but the claims for damages in the complaint
were expunged for failure to specify the amounts. Thus, the defendants filed a
Joint Petition for certiorari, mandamus, prohibition, and temporary restraining order
against
the
RTC.
ISSUE:
Whether or not the amount of damages claimed and the assessed value of
the property are relevant in the determination of the courts jurisdiction in a case for
recovery
of
possession
of
property.
HELD:
Determinative of the courts jurisdiction in a recovery of possession of
property is the nature of the action (one of accion publiciana) and not the value of
the property, it may be commenced and prosecuted without an accompanying
claim for actual, nominal or exemplary damages and such action would fall within
the exclusive original jurisdiction of the RTC. The court acquired jurisdiction upon
the filing of the complaint and payment of the prescribed docket fees.
Where the action is purely for the recovery of money or damages, the docket fees
are assessed on the basis of the aggregate amount claimed, exclusive only of
interests and costs. In this case, the complaint or similar pleading should,
according to Circular No. 7 of this Court, "specify the amount of damages being
prayed for not only in the body of the pleading but also in the prayer, and said
damages shall be considered in the assessment of the filing fees in any case."
Two situations may arise. One is where the complaint or similar pleading sets out a
claim purely for money or damages and there is no precise statement of the
amounts being claimed. In this event the rule is that the pleading will "not be
accepted nor admitted, or shall otherwise be expunged from the record." In other
words, the complaint or pleading may be dismissed, or the claims as to which the
amounts are unspecified may be expunged, although as aforestated the Court
may, on motion, permit amendment of the complaint and payment of the fees
provided the claim has not in the meantime become time-barred. The other is
where the pleading does specify the amount of every claim, but the fees paid are
insufficient; and here again, the rule now is that the court may allow a reasonable
time for the payment of the prescribed fees, or the balance thereof, and upon such
payment, the defect is cured and the court may properly take cognizance of the

action, unless in the meantime prescription has set in and consequently barred the
right of action.
Where the action involves real property and a related claim for damages as well,
the legal fees shall be assessed on the basis of both (a) the value of the property
and (b) the total amount of related damages sought. The Court acquires jurisdiction
over the action if the filing of the initiatory pleading is accompanied by the payment
of the requisite fees, or, if the fees are not paid at the time of the filing of the
pleading, as of the time of full payment of the fees within such reasonable time as
the court may grant, unless, of course, prescription has set in the meantime. But
where-as in the case at bar-the fees prescribed for an action involving real property
have been paid, but the amounts of certain of the related damages (actual, moral
and nominal) being demanded are unspecified, the action may not be dismissed.
The Court undeniably has jurisdiction over the action involving the real property,
acquiring it upon the filing of the complaint or similar pleading and payment of the
prescribed fee. And it is not divested of that authority by the circumstance that it
may not have acquired jurisdiction over the accompanying claims for damages
because of lack of specification thereof. What should be done is simply to expunge
those claims for damages as to which no amounts are stated, which is what the
respondent Courts did, or allow, on motion, a reasonable time for the amendment
of the complaints so as to allege the precise amount of each item of damages and
accept payment of the requisite fees therefore within the relevant prescriptive
period.

Arba V. Nicolas, et al., G.R. No. 168394, October 6, 2008;

FACTS:
The Philippine Banking Corporation (PBC) was the registered owner of two
parcels of land located in Barangay Mintal, Davao City.
On September 7, 1989, DAR issued a notice of coverage to PBC. The DAR
declared that subject parcels of land fall within the coverage of the Comprehensive
Agrarian Reform Law (CARL) or RA No. 6657. PBC immediately filed its protest.
Despite PBC objections, the DAR caused the cancellation of the titles of the
subject parcels of land. Ownership was transferred to the Republic of the
Philippines. This was followed by the distribution of said land to the farmerbeneficiaries belonging to ARBA by virtue of a CLOA, more particularly described
as Transfer Certificate of Title No. CL-143.
On March 24, 1994, PBC executed a deed of assignment in favor of
respondents, Loreto G. Nicolas and Olimpio R. Cruz. As assignees and
successors-in-interest, respondents continued PBCs protest over DAR's takeover
of their lands.
However, unlike PBC, respondents filed their complaint before the local
DARAB in Tagum City, Davao del Norte. PBC instituted before the RTC a
complaint for reinstatement of title and recovery of possession. In their complaint
with the DARAB, respondents prayed for the cancellation of the CLOA and
reinstatement of titles previously registered under the name of PBC.
On August 28, 1998, the DARAB rendered a decision in favor of
respondents.
Petitioner appealed to the DARAB Central Office which overturned the
decision of its local office.
Respondents then filed a motion for reconsideration and a supplemental
motion for reconsideration. Both were subsequently denied by the DARAB.
Dissatisfied with the Central DARAB ruling, respondents elevated the matter
to the CA.
CA ruled in favour of respondents. Hence, petitioner have restored to the
present recourse which is a petition for review on certiorari of decision of CA.
ISSUES:
Whether or not the Honorable CA erred in not dismissing forthwith the
present case for lack of a cause of action. The respondents herein not having
shown that there was a valid and lawful transfer of subject realty to them to be
possessed of the requisite personality to sue.
HELD:
No. Respondents are the lawful assignees and successors-in-interest of
PBC. Hence, they have a valid cause of action.

A cause of action is defined as "an act or omission of one party in violation

of the legal right or rights of the other; and its essential elements are legal right of
the plaintiff, correlative obligation of the defendant, and act or omission of the
defendant in violation of said legal right." The elements of a cause of action: (1) a
right in favor of 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 the right; and (3) an act or omission on the part of defendant violative of the
right of plaintiff or constituting a breach of an obligation to the latter. It is only when
the last element occurs that a cause of action arises.
The test of sufficiency of facts alleged in the complaint as constituting a
cause of action is whether or not admitting the facts alleged, the court could render
a valid verdict in accordance with the prayer of the complaint. That in determining
sufficiency of cause of action, the court takes into account only the material
allegations of the complaint and no other, is not a hard and fast rule. In some
cases, the court considers the documents attached to the complaint to truly
determine sufficiency of cause of action.
We have ruled that a complaint should not be dismissed for insufficiency of
cause of action if it appears clearly from the complaint and its attachments that
plaintiff is entitled to relief. The converse is also true. The complaint may be
dismissed for lack of cause of action if it is obvious from the complaint and its
annexes that plaintiff is not entitled to any relief.
As lawful assignees, respondents stand to be directly benefited or injured
from the resolution of this case. To protect whatever rights and interests they may
have in the subject lands, they rightfully pursued the actions initiated by their
assignor, PBC. Respondents' action is premised on the prior classification of the
subject land as exempt from the coverage of the CARP.
Wherefore, the petition is DENIED.

Bacolod-Murcia Milling Co. Inc. V. First Farmers Milling Co. Inc. 103 SCRA
436 (1981)
FACTS:
On March 18, 1966, plaintiff-appellant commenced an action for Injunction
and Prohibition with Damages against defendants First Farmers Milling Co., Inc.
(FFMC), various named planters including those similarly situated, and Ramon
Nolan in his capacity as Administrator of the Sugar Quota Administration. It was
alleged that in the year 1964 the defendant FFMC established and operated a
sugar central known as the First Farmers Sugar Central and for the crop years
1964-65 and 1965-66, the defendants transferred their quota "A" allotments to their
co-defendant FFMC. and are actually milling their sugar with the said FFMC which
illegal transfer has been made over the vigorous protest and objections of the
plaintiff, but with the unwarranted, unjustified and likewise illegal approval of their
co-defendant the Sugar Quota Administration.
Defendants FFMC, the adhering planters, and the Sugar Quota
Administrator had filed their respective Answers. On May 2, 1967, plaintiffappellant filed, a Motion to admit Amended and Supplemental Complaint. As
amended, PNB and NIDC were included as new defendants in view of the FFMC
allegation in its Answer that the non-inclusion of PNB and NIDC as party
defendants, "who became creditors of defendant FFMC central prior to the
institution of the instant case, and who therefore are necessary parties, is fatal to
the complaint. The defendants. except the SQA, filed their respective Answer to the
Amended and Supplemental Complaint.
ISSUES:
Whether or not the allegations of the Amended and Supplemental Complaint
constituted a sufficient cause of action against the PNB and NIDC.
HELD:
No. It is basic that the Complaint must contain a concise statement of the
ultimate facts constituting the plaintiff's cause of action. "Ultimate facts" are the
important and substantial facts which either directly form and basis of the plaintiff's
primary right and duty, or directly make up the wrongful acts or omissions by the
defendant.
When the ground for dismissal is that the Complaint states no cause of
action, the rule is that its sufficiency can only be determined by considering the
facts alleged in the Complaint and no other. The court may not consider other
matters outside of the Complaint. Defenses averred by the defendant are not to be
taken into consideration in ruling on the motion. The allegations in the Complaint
must be accepted as true and it is not permissible to go beyond and outside of
them for date or facts. And the test of sufficiency of the facts alleged is whether or
not the Court could render a valid judgment as prayed for accepting as true the
exclusive facts set forth in the Complaint.
The subject Amended and Supplemental Complaint fails to meet the test. It
should be noted that it charges PNB and NIDC with having assisted in the illegal
creation and operation of defendant sugar mill. Granting, for the sake of argument,
that, indeed, assistance in the "illegal" act was rendered, the same, however, is not
supported by well-pleaded averments of facts. Nowhere is it alleged that
defendants-appellees had notice, information or knowledge of any flaw, much less

any illegality, in their co-defendants' actuations, assuming that there was such a
flaw or illegality. This absence is fatal and buoy-up instead the PNB-NIDC's
position of lack of cause of action.

Republic V. Hernandez, G.R. No. 117209, February 9, 1996, 253 SCRA 509
FACTS:
The RTC granted the petition for adoption of Kevin Earl Bartolome Moran
and simultaneously granted the prayer therein for the change of the first name of
said adoptee to Aaron Joseph, to complement the surname Munson y Andrade
which he acquired consequent to his adoption.
Petitioner opposed the inclusion of the relief for change of name in the same
petition for adoption objecting to the joinder of the petition for adoption and the
petitions for the change of name in a single proceeding, arguing that these petition
should be conducted and pursued as two separate proceedings.
Petitioner argues that a petition for adoption and a petition for change of
name are two special proceedings which, in substance and purpose, are different
from and are not related to each other, being respectively governed by distinct sets
of law and rules. Petitioner further contends that what the law allows is the change
of the surname of the adoptee, as a matter of right, to conform with that of the
adopter and as a natural consequence of the adoption thus granted. If what is
sought is the change of the registered given or proper name, and since this would
involve a substantial change of ones legal name, a petition for change of name
under Rule 103 should accordingly be instituted, with the substantive and adjective
requisites therefore being conformably satisfied.
Private respondents, on the contrary, admittedly filed the petition for
adoption with a prayer for change of name predicated upon Section 5, Rule 2
which allows permissive joinder of causes of action in order to avoid multiplicity of
suits and in line with the policy of discouraging protracted and vexatious litigations.
It is argued that there is no prohibition in the Rules against the joinder of adoption
and change of name being pleaded as two separate but related causes of action in
a single petition.
ISSUE:
Whether or not respondent judge erred in granting prayer for the change of
the given or proper name if the adoptee in a petition for adoption.
HELD:
No. Par (1), Art. 189 of the Family Code provides one of the legal effect of
adoption:
(1) For civil purposes, the adopted shall be deemed to be a legitimate child of the
adopters and both shall acquire the reciprocal rights and obligations arising from
the relationship of parent and child, including the right of the adopted to use the
surname of the adopters;
The law allows the adoptee, as a matter of right and obligation, to bear the
surname of the adopter, upon issuance of the decree of adoption. It is the change
of the adoptees surname to follow that of the adopter which is the natural and
necessary consequence of a grant of adoption and must specifically be contained
in the order of the court, in fact, even if not prayed for by petitioner.
However, the given or proper name, also known as first or Christian name,
of the adoptee must remain as it was originally registered in the civil register. The

creation of an adoptive relationship does not confer upon the adopter a license to
change the adoptees registered Christian or first name. The automatic change
thereof, premised solely upon the adoption thus granted, is beyond the purview of
a decree of adoption. Neither is it a mere incident in nor an adjunct of an adoption
proceeding, such that a prayer therefore furtively inserted in a petition for adoption,
as in this case, cannot properly be granted.
The official name of a person whose birth is registered in the civil register is
the name appearing therein. If a change in ones name is desired, this can only be
done by filing and strictly complying with the substantive and procedural
requirements for a special proceeding for change of name under Rule 103 of the
Rules of Court, wherein the sufficiency of the reasons or grounds therefore can be
threshed out and accordingly determined.
A petition for change of name being a proceeding in rem, strict compliance
with all the requirements therefore is indispensable in order to vest the court with
jurisdiction for its adjudication. It is an independent and discrete special
proceeding, in and by itself, governed by its own set of rules. Afortiori, it cannot be
granted by means of any other proceeding. To consider it as a mere incident or an
offshoot of another special proceeding would be to denigrate its role and
significance as the appropriate remedy available under our remedial law system.

San Ildefonso Lines, Inc. V. Court of Appeals, April 24, 1998

FACTS:
At around 3:30 in the afternoon of June 24, 1991, a Toyota Lite Ace Van
being driven by its owner Annie U. Jao and a passenger bus of herein petitioner
San Ildefonso Lines, Inc. (hereafter, SILI) figured in a vehicular mishap at the
intersection of Julia Vargas Avenue and Rodriguez Lanuza Avenue in Pasig, Metro
Manila, totally wrecking the Toyota van and injuring Ms. Jao and her two (2)
passengers

in

the

process.

A criminal case was thereafter filed with the Regional Trial Court of Pasig on
September 18, 1991 charging the driver of the bus, herein petitioner Eduardo
Javier, with reckless imprudence resulting in damage to property with multiple
physical

injuries.

About four (4) months later, or on January 13, 1992, herein private respondent
Pioneer Insurance and Surety Corporation (PISC), as insurer of the van and
subrogee, filed a case for damages against petitioner SILI with the Regional Trial
Court of Manila, seeking to recover the sums it paid the assured under a motor
vehicle insurance policy as well as other damages, totaling P564,500.00
(P454,000.00 as actual/compensatory damages; P50,000.00 as exemplary
damages; P50,000.00 as attorney's fees; P10,000.00 as litigation expenses; and
P500.00 as appearance fees.)

ISSUES:
1) Whether or not if a criminal case was filed, can an independent civil action
based on quasi-delict under Article 2176 of the Civil Code be filed if no reservation
was

made

in

the

said

criminal

case.

2) Whether or not can a subrogee of an offended party maintain an independent

civil action during the pendency of a criminal action when no reservation of the
right to file an independent civil action was made in the criminal action and despite
the fact that the private complainant is actively participating through a private
prosecutor

in

the

aforementioned

criminal

case.

HELD:
WHEREFORE, premises considered, the assailed decision of the Court of
Appeals dated February 24, 1995 and the Resolution dated April 3, 1995 denying
the motion for reconsideration thereof are hereby REVERSED and SET ASIDE.
The "MANIFESTATION AND MOTION TO SUSPEND CIVIL PROCEEDINGS" filed
by

petitioners

is

GRANTED.

Now that the necessity of a prior reservation is the standing rule that shall govern

the institution of the independent civil actions referred to in Rule 111 of the Rules of
Court, past pronouncements that view the reservation requirement as an
"unauthorized amendment" to substantive law - i.e., the Civil Code, should no
longer be controlling. There must be a renewed adherence to the time-honored
dictum that procedural rules are designed, not to defeat, but to safeguard the ends
of substantial justice. And for this noble reason, no less than the Constitution itself
has mandated this Court to promulgate rules concerning the enforcement of rights
with the end in view of providing a simplified and inexpensive procedure for the
speedy disposition of cases which should not diminish, increase or modify
substantive rights. Far from altering substantive rights, the primary purpose of the
reservation is, to borrow the words of the Court in "Caos v. Peralta"
Clearly then, private respondent PISC, as subrogee under Article 2207 of the Civil
Code, is not exempt from the reservation requirement with respect to its damages
suit based on quasi-delict arising from the same act or omission of petitioner Javier
complained of in the criminal case. As private respondent PISC merely stepped
into the shoes of Ms. Jao (as owner of the insured Toyota van), then it is bound to
observe the procedural requirements which Ms. Jao ought to follow had she herself
instituted the civil case.

Flores V. Mallare-Philipps, 144 SCRA 377 (1986)

FACTS:
Flores sued the respondents for refusing to pay him certain amount of
money as alleged in the complaint:
first cause of action alleged in the complaint was against respondent Ignacio
Binongcal for refusing to pay the amount of P11,643.00 representing cost of truck
tires which he purchased on credit from petitioner on various occasions from
August to October, 1981;
second cause of action was against respondent Fernando Calion for
allegedly refusing to pay the amount of P10,212.00 representing cost of truck tires
which he purchased on credit from petitioner on several occasions from March,
1981 to January, 1982.
The action was opposed by an action to dismiss for lack of jurisdiction. Under Sec
19 of BP 129, the regional trial court had exclusive original jurisdiction if the
amount of the demand is more than P20,000. That although, the other respondent
was indebted in the amount of P10, 212.00, his obligation was separate and
distinct from that of the other respondent.
The trial court by Judge Mallare (one of the respondents) dismissed the complaint
for lack of jurisdiction.
Plaintiff appealed by certiorari in Supreme Court.
ISSUES:
Whether or not the trial court correctly ruled on the application of the
permissive joinder of parties under the Rules of Court.
HELD:
In cases of permissive joinder of parties, whether as plaintiffs or as
defendants, under Section 6 of Rule 3, the total of all the claims shall now furnish
the jurisdictional test. Needless to state also, if instead of joining or being joined in
one complaint separate actions are filed by or against the parties, the amount
demanded in each complaint shall furnish the jurisdictional test.
The lower court correctly held that the jurisdictional test is subject to the
rules on joinder of parties pursuant to Section 5 of Rule 2 and Section 6 of Rule 3
of the Rules of Court and that, after a careful scrutiny of the complaint, it appears
that there is a misjoinder of parties for the reason that the claims against
respondents Binongcal and Calion are separate and distinct and neither of which
falls within its jurisdiction.

Section 6 of Rule 3 which provides as follows:

Permissive joinder of parties.-All persons in whom or against whom any
right to relief in respect to or arising out of the same transaction or series of
transactions is alleged to exist, whether jointly, severally, or in the alternative, may,
except as otherwise provided in these rules, join as plaintiffs or be joined as
defendants in one complaint, where any question of law or fact common to all such
plaintiffs or to all such defendants may arise in the action; but the court may make
such orders as may be just to prevent any plaintiff or defendant from being
embarrassed or put to expense in connection with any proceedings in which he
may have no interest.

Ventura V. Hon. Francis J. Militante, et.al., G.R. No. 63145, October 5, 1999,
316 SCRA 226
FACTS:
Private respondent filed a Complaint for a Sum of Money and Damages
against petitioner. During the lifetime of Carlos Ngo he was indebted with the
plaintiff.

Said

obligation

is

already

due

and

demandablea n d t h e d e f e n d a n t t h r u M s . Ven t u r a w h o i s o s t e n s i b l y ta
king care of the properties/estate of deceased Carlos Ngo, refused,
failed and neglected and still continues to refuse, fail and neglect to pay
despite repeated demands. Petitioner moved to dismiss the foregoing complaint
on theg r o u n d t h a t t h e e s t a t e o f C a r l o s N g o h a s n o l e g a l pers
onality, the same being neither a natural nor legal person in contemplation
of law.In his Opposition to Motion to Dismiss, petitioner insisted that since the
money

claim

subject

actuallyr e p r e s e n t s

t h e

of

c o s t s

o f

this

case

a u t o m o t i v e

s p a r e parts/replacements contracted by deceased Carlos Ngoduring

his lifetime for the benefit/business of the family x xx the conjugal partnership x
x x shall be accountable for the payment thereof. Subsequently, private
respondent'sc o u n s e l m a n i f e s t e d t h a t h e i s p o i s e d t o a m e n d t h
e complaint in order to state the correct party defendant that he intends to sue in
this

case. The

public

respondent

g a v e p r i v a t e r e s p o n d e n t f i f t e e n ( 1 5 ) d a y s t o m a k e t h e amendment.
ISSUE:
Whether or not a dead person be named a party defendant in a
court action.
HELD:
We

grant

the

petition.

The

original

complainto f p e t i t i o n e r n a m e d t h e e s t a t e o f C a r l o s N g o a s repr
esented by surviving spouse Ms. Sulpicia Ventura as the defendant. Petitioner
moved to dismiss the same on the ground that the defendant as named
in the complaint had no legal personality. We agree. Neither a dead person nor
his estate may be a party plaintiff in a court action. A deceased person does not
have such legal entity as is necessary to bring action so much so that a
motion to substitute cannot lie and should be denied by the court. An
action begun by a decedent's estate cannot be said to have been begun by a
legal person, since an estate is not a legal entity; such an action is a nullity and
a

motion

to

amend

the

party

plaintiff will

not likewise

lie, there

being nothing before the court to amend. Considering that capacity to be

sued is a correlative of the capacity to sue, to the same extent, a decedent

does not have the capacity to be sued and may not be named a party defendant in
a court action.
It is clear that the original complaint of private
respondent against the estate of Carlos Ngo was a suit against Carlos Ngo
himself who was already dead at the time of the filing of said
complaint. At

that

time,

a n d t h i s , p r i v a t e r e s p o n d e n t a d m i t t e d , n o s p e c i a l proceeding to settle
his estate had been filed in court. As such, the trial court did not acquire jurisdiction
over either the deceased Carlos Ngo or his estate.
To
cure
this
fatal
defect,
private
respondent
amended
his original complaint. In his
amended complaint,
private
respondent
deleted
the
estate
of
Carlos
Ngo
a n d n a m e d p e t i t i o n e r a s t h e d e f e n d a n t . W h e n petitioner, in her
comment
to
the
amended
complaint
,r e a s o n e d t h a t t h e c o n j u g a l p a r t n e r s h i p o f g a i n s
between her and Carlos Ngo was terminated upon the latter's death and that
the
debt
which
he
contracted,a s s u m i n g i t w a s a c h a r g e a g a i n s t t h e c o n j u g a
l property,
could
only
be
paid
after
an
inventory
is
made
in the appropriate testate or intestate proceeding,
private
respondent
simply
reiterated
his
demand
thatp e t i t i o n e r p a y h e r h u s b a n d ' s d e b t w h i c h , h e i n s i s t e d , redounded
to
the
benefit
of
everyone
in
her
family.I t i s t r u e t h a t a m e n d m e n t s t o p l e a d i n g s a r e l i b e r a l l y all
owed in furtherance of justice, in order that every case may so far as
possible be determined on its real facts, and in order to speed the trial of causes or
prevent
the
circuitry
of action and unnecessary expense. But amendments
cannot be
allowed so as to confer jurisdiction upon a court that never acquired it in
the first place. When it is evident that the court has no jurisdiction over
the person and the subject matter and that the pleading is so fatally defective as
not to be susceptible of amendment, or that to permit such
amendment would radically alter the theory and the n a t u r e o f t h e
action, then the
court
should refuse thea m e n d m e n t o f t h e d e f e c t i v e p l e a d i n g a n d o
r d e r t h e dismissal of the case. Moreover, as correctly argued by
petitioner, the conjugal partnership terminates upon the death of either
spouse.A f t e r t h e d e a t h o f o n e o f t h e s p o u s e s , i n c a s e i
t i s necessary to sell any portion of the conjugal property in order to pay
outstanding obligations of the
partnership,
such sale must be made in the manner and with the
formalities established by the Rules of Court for the sale of the property of
deceased persons. Where a complaint is brought against the surviving
spouse for the recovery of an indebtedness chargeable against said conjugal
property, any judgment obtained thereby is void. The proper action should be in
the form of a claim to be filed in the testate or intestate proceedings of the
deceased spouse. In many cases as in the instant one, even after the
deatho f o n e o f t h e s p o u s e s , t h e r e i s n o l i q u i d a t i o n o f t h e con
jugal
partnership. This
does
not mean,
however,
thatt h e c o n j u g a l p a r t n e r s h i p c o n t i n u e s . A n d p r i v a t e r e s p
o n d e n t c a n n o t b e s a i d t o h a v e n o r e m e d y. U n d e r S e c . 6 , R u l e 7 8
o f t h e R e v i s e d R u l e s o f C o u r t , h e m a y apply in court for letters of
administration in his capacity as a p r i n c i p a l c r e d i t o r o f t h e d e c e a s e d

C a r l o s N g o i f a f t e r thirty (30) days from his death, petitioner failed to apply

for administration or request that administration be granted to some other person.
Samaniego V. Aguila, G.R. No. 125567, June 27, 2000, 334 SCRA 438
FACTS:
The Office of the President granted the exemption from the coverage of the
"Operation Land Transfer Program" the land owned by X. On appeal, the CA
dismissed the petition questioning the decision of the Office for failure to implead
the Office of the President, as they should be considered as indispensable parties.
ISSUE:
Whether or not the Office of the President should be considered as an
indispensable party and must therefore be impleaded pursuant to the Rules.
HELD:
No. An indispensable party is a party in interest without whom no final
determination can be had of an action without that party being impleaded.
Indispensable parties are those with such an interest in the controversy that a final
decree would necessarily affect their rights, or that the court cannot proceed
without their presence. "Interests" within the meaning of this rule, should be
material, directly in issue and to be affected by the decree as distinguished from a
mere incidental interest in the question involved. On the other hand, a nominal or
pro forma party is one who is joined as a plaintiff or defendant, not because such
party has any real interest on the subject matter or because any relief is
demanded, but merely because the technical rules of pleadings require the
presence of such party on the record. In the case at bar, the failure to implead the
Office of the President does not warrant the dismissal of the case as such is
considered as a pro forma party.

Re: Request of Heirs of Passengers of Doa Paz, 159 SCRA 623 (1988)
FACTS:
A complaint for damages amounting to more than P1.5 billion was filed in
the name of the relatives/heirs of the victims of the worst sea disaster in history:
the sinking of the Dona Paz which collided w/ another vessel.
* The complaint was characterized as a class suit
prosecuted by 27 plaintiffs in behalf of approx.. 4,000 people who are all close
relatives/legal heirs of the passengers
They claim that the institution of a class suit is proper bec. the identified plaintiffs
are sufficiently numerous
Together with the complaint was a Motion for Leave to File Case a Pauper Litigant
bec. a big majority of them have no means to finance the filing of the case. On the
same day, their counsel submitted a certification of the City Assessor of Quezon
City: according to the assessment records there is no property registered for
taxation purposes in the names of 7 of the plaintiffs.
The motion to file a case as pauper litigants was granted by Judge Ching Cuangco
to those 7 plaintiffs.
It is this order that the plaintiffs ask this Court to set aside. They ask that all be
allowed to prosecute the case as pauper litigants and be exempt from filing fees.
ISSUE:
Whether or not this case one of a proper class suit.
HELD:
NO. It is not the rule governing class suits (Sec 12, Rule 3 Rules of Court)
that is involved in the proceedings at bar, but that concerning permissive joinder of
parties in Section 6 of the Rule 3.
Similarity:
- The same transaction or series of transactions is involved
- Common questions of fact or law are at issue
Difference:
- In a class suit, there is only one right or cause of action pertaining or belonging in
common to many persons, not separately or severally to distinct individuals
- To distinguish the rule on class suits from that of permissive joinder of parties is
the numerousness of parties involved in a class suit. For a class suit to be allowed,
it is needful inter alia that the parties be so numerous that it would be impracticable
to bring them all before the court.

Heirs of Haberer V. Court of Appeals, 104 SCRA 523 (1981)

FACTS:
This case originated from the CFI of Rizal where the late Florentina Nuguid
Vda. de Haberer as the duly registered owner filed in 1964 and 1965 (11)
complaints for recovery of possession of the parcel of land evidenced by Transfer
Certificate of Title No. 15043 of the Register of Deeds of Rizal issued in her name,
situated at Mandaluyong, Rizal, alleging that private respondents had
surreptitiously entered the land and built their houses thereon.
In the CA, the cases were erroneously dismissed once before, on the
ground that the appeal was allegedly filed out of time. The issue was brought to the
SC which rendered its judgment setting aside the appellate court's dismissal of the
appeal. The cases were remanded to the Court of Appeals where appellant was
required to file printed brief within forty-five days from her receipt of notice. Three
days before the period was to expire, or on June 18, 1975, appellant's counsel
requested for an extension of time within which to file appellant's brief. Respondent
court in a resolution dated June 23, 1975 granted the request and gave appellant a
90-day extension (with warning of no further extension) from receipt on June 27,
1975 or up to September 25, 1975 within which to file the appellant's printed brief.
In the meantime, appellant Florentina Nuguid Vda. de Haberer had died on
May 26, 1975. Appellant's counsel gave respondent court notice of the death of
their and asked for the suspension of the running of the period within which to file
the appellant's brief pending the appointment of an executor of the estate left by
their client in the CFI of Quezon City where a petition for the probate of the alleged
will of the deceased had been filed by another lawyer.
ISSUES:
Whether or not the death of the client automatically terminates or severes
client attorney relationship and gives the counsel no legal standing to participate in
the case.
HELD:
No. ln the absence of a retainer from the heirs or authorized
representatives of his deceased client, the attorney would thereafter have no
further power or authority to appear or take any further action in the case, save to
inform the court of the client's death and take the necessary steps to safeguard the
deceased's rights in the case.
Section 17, Rule 3 of the Rules of Court sets the rule on substitution of
parties in case of death of any of the parties. Under the Rule, it is the court that is
called upon, after notice of a party's death and the claim is not thereby
extinguished, to order upon proper notice the legal representative of the deceased
to appear within a period of 30 days or such time as it may grant. Since no
administrator of the estate of the deceased appellant had yet been appointed as
the same was still pending determination in the CFI of Quezon City, the motion of
the deceased's counsel for the suspension of the running of the period within which
to file appellant's brief was well-taken. More, under the Rule, it should have set a
period for the substitution of the deceased party with her legal representative or
heirs, failing which, the court is called upon to order the opposing party to procure
the appointment of a legal representative of the deceased at the cost of the

deceased's estate, and such representative shall then "immediately appear for and
on behalf of the interest of the deceased."

Bonilla V. Barcena, 71 SCRA 491, 495-496 (1976)

FACTS:
On March 31, 1975 Fortunata Barcena, mother of minors Rosalio Bonilla
andSalvacion Bonilla and wife of Ponciano Bonilla, instituted a civil action in the
Court of FirstInstance of Abra, to quiet title over certain parcels of land located in
Abra. The herein defendants then filed a written motion to dismiss the complaint,
but before the hearing of the said motion, the plaintiffs counsel moved to amend
the complaint which was granted.
The defendants again filed another motion to dismiss the complaint. The
said motion to dismiss was then heard. On August 19, 1975, plaintiffs counsel
received a copy of the order dismissing the complaint and on the 23 rd of the same
month; he moved to set aside the said order. The court denied the MR filed by the
plaintiffs counsel which the counsel later on filed a written manifestation allowing
the minor petitioners to be allowed to substitute their deceased mother. From the
order, the plaintiffs counsel filed a second MR of the order dismissing the
complaint but the same was denied. Hence, this present petition for review.
ISSUE:
Whether or not the action survives even after the death of a party during
thependency of the case.
HELD:
Yes. While it is true that a person who is dead cannot sue in court, yet he
can be substituted by his heirs in pursuing the case up to its completion. Under
Section 16, Rule 3 of the Rules of Court "whenever a party to a pending case dies,
it shall be the duty of his attorney to inform the court promptly of such death, and to
give the name and residence of his executor, administrator, guardian or other legal
representatives." Moreover, Article 777 of the Civil Code provides "that the rights to
the succession are transmitted from the moment of the death of the decedent."
When Fortunata Barcena, therefore, died her claim or right to the parcels of
land in litigation in Civil Case No. 856, was not extinguished by her death but was
transmitted to her heirs upon her death. Her heirs have thus acquired interest in
the properties in litigation and became parties in interest in the case.
In addition, Under Section17, Rule 3 of the Rules of Court "after a party dies
and the claim is not thereby extinguished, the court shall order, upon proper notice,
the legal representative of the deceased to appear and be substituted for the
deceased, within such time as may be granted." The question as to whether an
action survives or not depends on the nature of the action and the damage sued
for.
The claim of the deceased plaintiff which is an action to quiet title over the
parcels of land in litigation affects primarily and principally property and property
rights and therefore is one that survives even after her death. It is, therefore, the
duty of the respondent Court to order the legal representative of the deceased
plaintiff to appear and to be substituted for her. Thus, the action in the instant case
survives.

Lawas V. Court of Appeals, 146 SCRA 173 (1986)

FACTS:
Private respondent Pacifico Pelaez filed a Complaint on December 6, 1972
against petitioner's father, Pedro Sepulveda, for ownership and partition of certain
parcels of land. Defendant Pedro Sepulveda filed his answer dated December 31,
1972 resisting the claim and raising the special defenses of laches, prescription
and failure to ventilate in a previous special proceeding. During the presentation of
evidence for the plaintiff, the defendant died on March 25, 1975. On May 21, 1975,
counsels for the deceased defendant filed a notice of death wherein were
enumerated the thirteen children and surviving spouse of the deceased.
Notwithstanding the manifestation of the former counsels of the deceased
defendant, the respondent trial judge set the case for hearing on January 13, 1976
and sent the notice of hearing to said counsels. On January 28, 1976, the
respondent trial judge rendered a decision against the heirs of the deceased
defendant.
On July 9, 1976, petitioner, who had been appointed judicial administratrix of
the estate of the deceased defendant and who was one of the heirs who had filed
an Answer on February 19, 1976, filed a motion to intervene and/or substitute the
deceased defendant. On August 25, 1976, the respondent trial judge denied the
motion for the reason that the decision had already become final. Petitioner then
filed a special civil action of certiorari with the Court of Appeals to annul the
proceedings in the respondent trial court. However, the Court of Appeals dismissed
the petition for certiorari. Hence, the present appeal.
ISSUE:
Whether the proceedings conducted by the respondent trial judge after the
death of the deceased defendant are null and void.
HELD:
The appeal is meritorious.
Section 16 of Rule 3 provides as follows:
"Duty of attorney upon death, incapacity, or incompetency of party. Whenever a
party to a pending case dies, becomes incapacitated or incompetent, it shall be the
duty of his attorney to inform the court promptly of such death, incapacity or
incompetency, and to give the name and residence of his executor, administrator,
guardian or other legal representative."
The former counsels for the deceased defendant, Pedro Sepulveda,
complied with this rule by filing a notice of death on May 21, 1975. They also
correctly manifested in open court at the hearing of the case on November 27,
1975, that with the death of their client their contract with him was also terminated
and none of the heirs of the deceased had renewed the contract, and the heirs had
instead engaged the services of other lawyers in the intestate proceedings.
Section 17 of Rule 3 provides as follows:
"Death of party. After a party dies and the claim is not thereby extinguished,
the court shall order, upon proper notice, the legal representative of the deceased
to appear and to be substituted for the deceased, within a period of thirty (30) days,
or within such time as may be granted. If the legal representative fails to appear
within said time, the court may order the opposing party to procure the appointment
of a legal representative of the deceased within a time to be specified by the court,
and the representative shall immediately appear for and on behalf of the interest of
the deceased. The court charges involved in procuring such appointment, if

defrayed by the opposing party, may be recovered as costs. The heirs of the
deceased may be allowed to be substituted for the deceased, without requiring the
appointment of an executor or administrator and the court may appoint guardian ad
litem for the minor heirs."
In the case at bar, in view of the pendency of Special Proceeding No. 37-SF,
Intestate Estate of Pedro Sepulveda, and the pending application of petitioner to be
appointed judicial administratrix of the estate, the respondent trial judge should
have awaited the appointment of petitioner and granted her motion to substitute the
deceased defendant.In view of the foregoing, the Court rules that the proceedings
conducted by the respondent trial judge after the death of the deceased defendant
are null and void.
WHEREFORE, the decision of the Court of Appeals is REVERSED; the
petition for certiorari is GRANTED; petitioner is ordered substituted for
the deceased defendant, Pedro Sepulveda; and the proceedings
conducted by the respondent trial judge after the death of the deceased
defendant, including the decision rendered by him on January 28, 1976,
are set aside; with costs against private respondent.

Raymund V. Court of Appeals, 166 SCRA 50, 54 (1988);

FACTS:
A complaint was filed for damages with the Regional Trial Court of Iloilo by
Santiago Bitera against Carlos Bell Raymond and Agustin Alba. The latter moved
to dismiss the action on the ground of improper venue. The petitioner averred that
the private respondent resides at the so-called UPSUMCO Compound, Bais City,
he being the officer-in-charge of the business firm known as UPSUMCO, which
has offices at Bais and Manjuyod, Negros Oriental and the address indicated in his
complaint that his address as 240-C Jalandoni Street, Iloilo City is admittedly a
temporary residence of the private respondent. The Trial Court however denied
their motion to dismiss. They then filed a special civil action of certiorari and
prohibition with the Court of Appeals but dismissed the same hence this petition.
ISSUE:
Whether the Regional Trial Court and the Court of Appeals committed
reversible legal errors in not dismissing the case of Biteras action on the grounds
of improper venue.
HELD:
Yes. According to Section 2, Rule 4 of the Rules of Court, personal actions,
such as Bitera's, "may be commenced and tried where the defendant or any of the
defendants resides or may be found, or where the plaintiff or any of the plaintiffs
resides, at the election of the plaintiff." The term, where a person "resides," or
"residence," may be understood as synonymous with domicile: as referring to a
person's "permanent home, the place to which, whenever absent for business or
pleasure, one intends to return," and it has been held that "a man can have but one
domicile at a time." This court held that 'resides' should be viewed or understood in
its popular sense, meaning the personal, actual or physical habitation of a person,
actual residence or place of abode. It signifies physical presence in a place and
actual stay thereat. In this popular sense, the term means merely residence, that
is, personal residence, not legal residence or domicile. Residence simply requires
bodily presence as an inhabitant in a given place, while domicile requires bodily
presence in that place and also an intention to make it one's domicile . . ."
It therefore clearly appears that both the respondent Judge and the Court of
Appeals, the former in the first instance and the latter on review, committed
reversible legal error, if not grave abuse of discretion, in not dismissing Bitera's
action despite the fact that its venue had clearly been improperly laid, and had
been seasonably objected to on that ground by petitioners in a motion to dismiss.
WHEREFORE, the questioned Order of the respondent Judge denying petitioner's
motion to dismiss and the Decision of the Court of Appeals affirming said order are
REVERSED AND SET ASIDE.

Young Auto Supply Inc. V. Court of Appeals, 233 SCRA 670 (1993)
FACTS:
On June 10, 1988, petitioners filed a complaint against Roxas in the
Regional Trial Court, Branch 11, Cebu City, praying that Roxas be ordered to pay
petitioners the sum of P3,400,000.00 or that full control of the three markets be
turned over to YASCO and Garcia. The complaint also prayed for the forfeiture of
the partial payment of P4,600,000.00 and the payment of attorney's fees and
costs. Roxas filed two motions for extension of time to submit his answer. But
despite said motion, he failed to do so causing petitioners to file a motion to have
him declared in default. Roxas then filed, through a new counsel, a third motion for
extension of time to submit a responsive pleading. On August 19, 1988, the trial
court declared Roxas in default. The order of default was, however, lifted upon
motion of Roxas. On August 22, 1988, Roxas filed a motion to dismiss on the
grounds that: "1. The complaint did not state a cause of action due to non-joinder
of indispensable parties; 2. The claim or demand set forth in the complaint had
been waived, abandoned or otherwise extinguished; and 3. The venue was
improperly laid"
After a hearing, wherein testimonial and documentary evidence were
presented by both parties, the trial court in an Order dated February 8, 1991
denied Roxas' motion to dismiss. After receiving said order, Roxas filed another
motion for extension of time to submit his answer. He also filed a motion for
reconsideration, which the trial court denied in its Order dated April 10, 1991 for
being pro-forma. Roxas was again declared in default, on the ground that his
motion for reconsideration did not toll the running of the period to file his answer.
On May 3, 1991, Roxas filed an unverified Motion to Lift the Order of Default which
was not accompanied with the required affidavit of merit. But without waiting for the
resolution of the motion, he filed a petition for certiorari with the Court of Appeals.
The Court of Appeals sustained the findings of the trial court with regard to the first
two grounds raised in the motion to dismiss but ordered the dismissal of the
complaint on the ground of improper venue. A subsequent motion for
reconsideration by petitioner was to no avail. Hence this petition.
ISSUE:
Whether the Court of Appeals erred in holding that venue should be in
Pasay City, and not in Cebu City where both petitioners/plaintiffs are residents and
not finding Roxas is estopped from questioning the choice of venue.
HELD:
The petition is meritorious.
The Court of Appeals erred in holding that the venue was improperly laid in Cebu
City. In the Regional Trial Courts, all personal actions are commenced and tried in
the province or city where the defendant or any of the defendants resides or may
be found, or where the plaintiff or any of the plaintiffs resides, at the election of the
plaintiff [Sec. 2(b) Rule 4, Revised Rules of Court]. There are two plaintiffs in the

case at bench: a natural person and a domestic corporation. Both plaintiffs aver in
their complaint that they are residents of Cebu City, thus: "1.1 Plaintiff Young Auto
Supply Co., Inc. ("YASCO") is a domestic corporation duly organized and existing
under Philippine laws with principal place of business at M.J. Cuenco Avenue,
Cebu City. It also has a branch office at 1708 Dominga Street, Pasay City, Metro
Manila. Plaintiff Nemesio Garcia is of legal age, married, Filipino Citizen and with
business address at Young Auto Supply Co., Inc., M.J. Cuenco Avenue, Cebu City.
Plaintiff. A corporation has no residence in the same sense in which this term is
applied to a natural person. But for practical purposes, a corporation is in a
metaphysical sense a resident of the place where its principal office is located as
stated in the articles of incorporation. The Corporation Code precisely requires
each corporation to specify in its articles of incorporation the "place where the
principal office of the corporation is to be located which must be within the
Philippines" (Sec. 14 [3]). The purpose of this requirement is to fix the residence of
a corporation in a definite place, instead of allowing it to be ambulatory.
If it was Roxas who sued YASCO in Pasay City and the latter questioned the venue
on the ground that its principal place of business was in Cebu City, Roxas could
argue that YASCO was in estoppel because it misled Roxas to believe that Pasay
City was its principal place of business. But this is not the case before us. With the
finding that the residence of YASCO for purposes of venue is in Cebu City, where
its principal place of business is located, it becomes unnecessary to decide
whether Garcia is also a resident of Cebu City and whether Roxas was in estoppel
from questioning the choice of Cebu City as the venue.
WHEREFORE, the petition is GRANTED. The decision of the Court of
Appeals appealed from is SET ASIDE and the Order dated February 8, 1991 of the
Regional Trial Court is REINSTATED.

Unimasters Conglomeration, Inc. V. Court of Appeals, 267 SCRA 759 (1997)

FACTS:
Kubota Agri-Machinery
Inc. entered into a Dealership
products in Samar and Leyte
stipulation that All suits arising
Courts of Quezon City

Philippines, Inc. and Unimasters Conglomeration,

Agreement for Sales and Services of the former's
Provinces. The Dealership Agreement contained a
out of this Agreement shall be filed with / in the proper

Five years later, Umimasters filed an action in the RTC of Tacloban against
Kubota, Reynaldo Go and Metrobank for damages and breach of contracts, and
injunction with prayer for temporary restraining order.
Kubota filed two motions One for the dismissal of the case on the ground of
improper venue .The other prayed for the transfer of the injunction hearing its counsel
was not available.
The court issued an order allowing the issuance of preliminary injunction and a
motion denying the motion to dismiss on the reason that Umimasters place of business
is in Tacloban City while Kubotas principal place of business is in Quezon City. In
accord with the Rules of Court, the proper venue would either be Quezon City or
Tacloban City at the election of the plaintiff. Hence, the filing in the RTC of Tacloban is
proper.
Kubota appealed both orders on the grounds they were issued with grave abuse
of discretion in a special action for certiorari and prohibition filed with the CA. Kubota
asserted that RTC of Tacloban had no jurisdiction was improperly laid.
The Court of Appeals decided in favor of Kubota and it held that: the stipulation
respecting venue in its Dealership Agreement with UNIMASTERS did in truth limit the
venue of all suits arising thereunder only and exclusively to the proper courts of Quezon
City
Subsequently, Unimasters filed a motion for reconsideration but was turned down
by the appellate court.
ISSUE:
Whether or not the venue stipulations in a contract has the effect of limiting the
venue to a specified place.
HELD:
No. The Polytrade doctrine was applied in the case at bar. This doctrine
enunciated that as long as the stipulation does not set forth qualifying or restrictive
words to indicate that the agreed place alone and none other is the venue of the action,
the parties do not lose the option of choosing the venue.
Absence of qualifying or restrictive words, venue stipulations in a contract should
be considered merely as agreement on additional forum, not as limiting venue to the
specified place.
Unless the parties make very clear, by employing categorical and suitably limiting
language, that they wish the venue of actions between them to be laid only and
exclusively at a definite place, and to disregard the prescriptions of Rule 4, agreements
on venue are not to be regarded as mandatory or restrictive, but merely permissive, or
complementary of said rule.

Absent additional words and expressions definitely and unmistakably denoting

the parties' desire and intention that actions between them should be ventilated only at
the place selected by them, Quezon City -- or other contractual provisions clearly
evincing the same desire and intention -- the stipulation should be construed, not as
confining suits between the parties only to that one place, Quezon City, but as allowing
suits either in Quezon City or Tacloban City, at the option of the plaintiff (UNIMASTERS
in this case).

Meliton V. Court of Appeals, 216 SCRA 485 (1992)

FACTS:
On June 22, 1988, private respondent Ziga filed a complaint against herein
petitioner for rescission of a contract of lease over a parcel of land situated at Elias
Angeles Street, Naga City. Alleged as grounds therefor were said petitioner's failure, as
lessee, to deposit the one month rental and to pay the monthly rentals due; her
construction of a concrete wall and roof on the site of a demolished house on the leased
premises without the lessor's written consent; and here unauthorized sublease of the
leased property to a third party.
On July 29, 1988, petitioner Lydia Meliton filed an answer to the complaint
denying the material averments thereof and setting up three counterclaims for recovery
of the value of her kitchenette constructed on the leased parcel of land and which was
demolished by private respondent, the value of the improvements introduced in the
kitchenette to beautify it and moral damages with litigation expenses.
ISSUES:
1. Whether or not the counterclaims of petitioners are compulsory in nature;
2.Whether or not petitioner, having failed to seek reconsideration of or to take an appeal
from the order of dismissal of their counterclaims, are already barred from asserting the
same in another action.
HELD:
1. Yes. Considering Section 4 of Rule 9 of the Rules of Court, a counterclaim is
compulsory if (a) it arises out of, or is necessarily connected with, the transaction or
occurrence which is the subject matter of the opposing party's claim; (b) it does not
require for its adjudication the presence of third parties of whom the court cannot
acquire jurisdiction; and (c) the court has jurisdiction to entertain the claim.
one compelling test of compulsoriness" is the logical relationship between the
claim alleged in the complaint and that in the counterclaim, that is, where conducting
separate trials of the respective claims of the parties would entail a substantial
duplication of effort and time, as where they involve many of the same factual and/or
legal issues.
All the requisites of a compulsory counterclaim are present. Private respondent's
complaint was for rescission of the contract of lease due to petitioner Lydia Meliton's
breach of her obligations under the said contract. On the other hand, petitioner's
counterclaims were for damages for unlawful demolition of the improvements she
introduced pursuant to her leasehold occupancy of the premises, as well as for the filing
of that civil suit which is contended to be clearly unfounded. Both the claims therein of
petitioners and private respondent arose from the same contract of lease.
2. No. It is indeed the rule, embodied in Section 4, Rule 9 of the Rules of Court,
that a counterclaim not set up shall be barred if it arises out of or is necessarily
connected with the transaction or occurrence that is the subject matter of the opposing
party's claim and does not require for its adjudication the presence of third parties of
whom the court cannot acquire jurisdiction. However, said rule is not applicable to the
case at bar.

Contrary to the claim of private respondent, it cannot be said that therein

petitioners failed to duly interpose their causes of action as counterclaims in the
previous action. Petitioners' claims were duly set up as counterclaims in the prior case
but the same were dismissed by reason of non-payment of docket fees. The ruling of
respondent Court of Appeals to the effect that the failure of petitioners to appeal or to
move for reconsideration of the said order of dismissal bars them from asserting their
claims in another action cannot be upheld.
where a compulsory counterclaim is made the subject of a separate suit, it may
be abated upon a plea of auter action pendant or litis pendentia and/or dismissed on the
ground of res judicata, depending on the stage or status of the other suit. Both defenses
are unavailing to private respondent. The present action cannot be dismissed either on
the ground of litis pendentia since there is no other pending action between the same
parties and for the same cause, nor on the ground of res judicata.
In order that a prior judgment will constitute a bar to a subsequent case, the
following requisites must concur: (1) the judgment must be final; (2) the judgment must
have been rendered by a court having jurisdiction over the subject matter and the
parties; (3) the judgment must be on the merits; and (4) there must be between the first
and second actions, identity of parties, of subject matter, and of causes of action.

Loyola V. Court of Appeals, 245 SCRA 477 (1995);

FACTS:
It appears that in the barangay election of 9 May 1994, the petitioner was
proclaimed on 10 May 1994 by the Barangay Board of Canvassers as the duly elected
Punong Barangay of barangay Poblacion of the Municipality of Tangalan, Aklan.
On 18 May 1994, private respondent Aniceto Fernandez III, the defeated candidate for
Punong Barangay, filed with the 4th MCTC of Macato-Tangalan an election protest
against the petitioner which was docketed as Election Protest Case No. 94-02. On the
same date, respondent Judge Eduardo R. Avelino of the said court issued an order
directing the issuance of summons to the petitioner, directing the latter to answer the
petition within five days from receipt thereof, and setting the hearings of the case for 25
May to 31 1994. The protest was not accompanied by a certification of non-forum
shopping required under Administrative Circular No. 04-94 of this Court which took
effect on 1 April 1994. However, the following day or on 19 May 1994, in compliance
with the said circular, the private respondent submitted to the MCTC his certification of
non-forum
shopping.
On 25 May 1994, the petitioner filed a motion to dismiss the protest for the private
respondent's failure to strictly comply with Administrative Circular No. 04-94. He claims
that the filing of the certification on 19 May 1994 was merely the private respondents
desperate
attempt
to
cure
the
jurisdictional
flaw
of
his
petition.
ISSUES:
(1) whether Administrative Circular No. 04-94 is mandatory and jurisdictional; and
(2) whether it is applicable in election cases.
HELD:
I. By the clear language of the second sanction imposed by Administrative Circular No.
04-94,
to
wit:
2. Any violation of this Circular shall be a cause for the dismissal of the Complaint,
petition, application or other initiatory pleading, upon motion and after hearing. However
any clearly wilful and deliberate forum shopping by any party and his counsel through
the filing of multiple complaints or other initiatory pleadings to obtain favorable action
shall be a ground for summary dismissal thereof and shall constitute direct contempt of
court. Furthermore, the submission of a false certification or non-compliance with the
undertaking therein, as provided in Paragraph 1 hereof, shall constitute indirect
contempt of court, without prejudice to disciplinary proceedings against the counsel and
the
filing
of
a
criminal
action
against
the
guilty
party.
It
is
evident
that
the
Circular
is
mandatory.
It is not, however, jurisdictional. jurisdiction over the subject or nature of the action is
conferred by law. Otherwise stated, there is lack of jurisdiction over the nature of the

action where the type of action is reposed by law in certain other courts.
Substantial compliance with the Circular is sufficient.
In this case, it is a fact that the certification of non-forum shopping was filed by
the private respondent on 19 May 1994, a day after he filed his election protest. Since
the proclamation of the results of the election was made by the barangay board of
canvassers on 10 May 1994, the private respondent, pursuant to Section 9 of R.A.
6679, 5 had ten days therefrom until 20 May 1994 within which to file an election
protest. The filing of the certification was therefore still within the period for filing an
election protest. Accordingly, although the certification was not filed simultaneously with
the initiatory pleading, its filing within the reglementary period was a substantial
compliance
with
Administrative
Circular
No.
04-94.
The fact that the Circular requires that it be strictly complied with merely underscores its
mandatory nature in that it cannot be dispensed with or its requirements altogether
disregarded, but it does not thereby interdict substantial compliance with its provisions
under justifiable circumstances.

Employees Compensation Commission V. Court of Appeals, 257 SCRA 717, 723

(1996)
FACTS:
The assailed Decision of the respondent Court of Appeals reversed a ruling by
petitioner, a government agency organized under P.D. 422, as amended, holding that
private respondent, a policeman's widow, is not entitled to compensation. The facts are
not disputed and are quoted by the assailed Decision 4 from the reversed judgment of
petitioner
as
follows:
The deceased was a member of the Mandaluyong Police Station, assigned at the Pasig
Provincial Jail as 2nd Shift Jailer with tour of duty from 7:00 P.M. to 7:00 A.M. He had
been serving the Mandaluyong Police Station for more than twenty years, since he first
entered the service on April 1, 1964, until his death on November 19, 1988.
The appellant subsequent filed a claim for compensation benefits under PD 626, as
amended. The System denied the claim on the ground that at the time of the accident
the deceased was supposed to be at the Pasig Provincial Jail as 2nd Shift Jailer and
with a specific duty to perform, in a particular place, his presence in the Mandaluyong
Police Station, although he was a member of the same, clearly reflects the fact that he
was "there merely to accompany his son who was requested to be interviewed by the
Officer-in-case Pfc. Carlos Villaruel pertaining to the stabbing incident which ultimately
led to a family feud." In the other words according to the System, "he was plainly acting
as a father to his son, an act which is purely personal, foreign and unrelated to his
employment. His having been killed at the place where he was not required to be and
while he was not in the performance of his duty, cannot be considered to have arisen
out
of
and
in
the
course
of
employment.
Appellant requested a reconsideration of the respondent's [GSIS] ruling saying that the
contingency happened in the police station where her husband is a member although at
that time of the contingency her husband was assigned at the Pasig Provincial Jail.
Respondent [GSIS], nonetheless, took a firm stand prompting appellant to elevate her
case
to
this
Commission
for
review.
On July 31, 1991, petitioner Commission affirmed the holding of the GSIS that the death
of private respondent's husband is not compensable under P.D. 626, as amended. On
appeal, respondent Court reversed petitioner Commission via its assailed Decision.
ISSUES:
(1) Did petitioner engage in "forum-shopping" in filing this petition?
The
First
Issue:
Forum-Shopping
The
herein
petition
should
be
denied.
In Buan vs. Lopez, 5 this Court, speaking through Mr. Chief Justice Andres R. Narvasa,
ruled that forum-shopping exists where the elements of litis pendencia are present or
where a final judgment in one case will amount to res judicata in the other:
There thus exists between the action before this Court and RTC Case No. 86-36563
identity of parties, or at least such parties as represent the same interests in both
actions, as well as identity of rights asserted and relief prayed for, the relief being

founded on the same facts, and the identity on the two preceding particulars is such that
any judgment rendered in the other action, will, regardless of which party is successful,
amount to res adjudicata in the action under consideration: all the requisites, in fine, of
auter
action
pendant.
Xxx
xxx
xxx
As already observed, there is between the action at bar and RTC Case No. 86-36563,
an identity as regards parties, or interests represented, rights asserted and relief
sought, as well as basis thereof, to a degree sufficient to give rise to the ground for
dismissal known as auter action pendant or lis pendens. That same identity puts into
operation the sanction of twin dismissals just mentioned. The application of this sanction
will prevent any further delay in the settlement of the controversy which might ensue
from attempts to seek reconsideration of or to appeal from the Order of the Regional
Trial Court in Civil Case No. 86-36563 promulgated on July 15, 1986, which dismissed
the
petition
upon
grounds
which
appear
persuasive.
The test therefore in determining the presence of forum-shopping is whether in the two
(or more cases) pending there is identity of (a) parties, (b) rights or causes of action and
(c)
reliefs
sought.
Applying the above test, there is no question that there is identity of cause of action and
reliefs sought between this petition and the petition in G.R. No. 115040. The very same
decision of the respondent Court of Appeals in CA-G.R. SP No. 28487 promulgated by
the same Fifth division and by the same ponente is sought to be set aside in both
petitions before this Court. However, the Solicitor General, as counsel for petitioner,
insists that there is no identity of parties inasmuch as the petitioner in G.R. No. 115040
is the Government Service Insurance System as represented by the Government
Corporate Counsel while the petitioner now before us is the Employees' Compensation
Commission. The Solicitor General also avers that he observed Administrative Circular
No. 28-91 proscribing forum-shopping, because he attached a certification 6 to the
herein petition expressly mentioning the dismissal of the petition in G.R. No. 115040, as
follows:
3. Except for the petition for review filed by the Government Service Insurance System
in this Court on June 9, 1994 and which was subsequently dismissed per its resolution
dated June 27, 1994, I have no knowledge of such other action or proceeding that is
pending in this Court, the Court of Appeals or any tribunal or agency; . . .
The Solicitor General misses the point. Forum-shopping does not require a literal
identity of parties. It is sufficient that there is identity of interests represented. 7 That
there is identity of interests represented in the two cases filed before us 8 is clearly
shown by the very allegations of the petition 9 in G.R. No. 115040, as follows:
Petitioner Government Service Insurance System is a government owned and
controlled corporation, in charge with (sic) the administration of the Employees'
Compensation programs and with office address at the GSIS Headquarters Bldg.,
Financial Center (Reclamation Area), Roxas Boulevard, Pasay City where it can be
served with legal notices and whose decision was affirmed by the ECC but was
reversed by the respondent Honorable Court of Appeals which is now the subject of this
petition.
.
.
.
The Solicitor General also argues that the petition in G.R. No. 115040 was dismissed
"on the basis of technicality and not on the merits, i.e., GSIS failed to comply with the
requirements provided under Circular 1-88 and 19-91." This is an inaccurate statement
as the honorable counsel of the Republic conveniently neglected to add that in the entry

of judgment in G.R. No. 115040, this Court's resolution had an important last paragraph,
which
reads:
Besides, even if the petition was filed on time, it would still be dismissed, as petitioner
failed to show that a reversible error was committed by the appellate court.
The above holding is an adjudication on the merits, as this Court in effect adopted the
questioned
Decision
as
its
own.
10
Be that as it may, we should add that to be more accurate, private respondent should
have alleged res judicata, and not forum-shopping, as defense because the decision in
G.R. No. 115040 had already become final and executory. In fact, it has been recorded
in the Book of Entries of Judgments on July 28, 1994. Forum-shopping applies only
when the two (or more) cases are still pending. 11 Thus, Circular 28-91, among other
things, authorizes their "twin dismissal."

Uy V. Contreras, 237 SCRA 167 (1994);

FACTS:
Petitioner Felicidad Uy subleased from respondent Susanna Atayde the other
half of the second floor of a building. She operated therein a beauty parlor. The
sublease contract expired; however, the petitioner was not able to remove all her
personal properties. An argument arose between the petitioner and Atayde when the
former sought to withdraw from the premises her remaining properties. The argument
degenerated into a scuffle between the petitioner, on the one hand, and Atayde and
several of Ataydes employees, including private respondent Winnie Javier. Respondent
had themselves medically examined for the alleged injuries inflicted on them by the
petitioner. Respondents filed a complaint with the Barangay. The confrontation of the
parties was scheduled by the Barangay, only petitioner appeared. The Barangay
then reset the confrontation. The office of provincial prosecutor filed two informations for
slight physical injuries against the petitioner with MTC. Respondent MTC Judge ordered
the petitioner to submit her counter-affidavit and those of her witnesses. Petitioner
submitted and specifically alleged the prematurity of filing of the case for failure to
undergo conciliation proceedings. Petitioner filed a motion to dismiss. Respondent
Judge Contreras denied the motion. Same as the MR. Petition filed a special civil action
for certiorari in the SC.
ISSUE:
Whether or not respondent Judge Contreras abused his discretion.
HELD:
Yes. In the proceedings before the court, petitioner and respondent had in mind
only PD1508. None knew of the repeal of the decree by the Local Government Code of
1991.The Office of the Provincial Prosecutor should have exerted enough diligence to
inquire from respondents if prior referral to the lupon was necessary. Respondent Judge
did not do any better. His total unawareness of the Local Government Code of 1991 is
disturbing.

Guerrero V. RTC of Ilocos Norte, Branch XVI, 229 SCRA 274 (1994)
FACTS:
Guerrero and Pedro are brothers in law , their respective wives being sisters.
Filed by petitioner as an accion publicana against private respondent, this case
assumed another dimension when it was dismissed by respondent Judge on the ground
that the parties being brother-in-law the complaint should have alleged that earnest
efforts were first exerted towards a compromise.
ISSUE:
Whether or not brothers by affinity are considered members of the same family.
HELD:
Considering that Art. 151 herein-quoted starts with the negative word No, the
requirement is mandatory 4 that the complaint or petition, which must be verified, should
allege that earnest efforts towards a compromise have been made but that the same
failed, so that if it is shown that no such efforts were in fact made, the case must be
dismissed.
No. The court already ruled in Gayon v. Gayon that the enumeration of brothers and
sisters as members of the same family does not comprehend sisters-in-law

Lichauco V. Guash, 76 Phil 5 (1946);

FACTS:
The plaintiff and appellee commenced this action of forcible entry in the
Municipal Court of Manila, alleging that the defendant entered and occupied
the premises in question without the knowledge and consent of the plaintiff and refused
to vacate the same notwithstanding plaintiff's demands, and that on account of such
illegal detainer the plaintiff has suffered damages in the amount of P200 a month. From
the judgment of the Municipal Court against the defendant, the said defendant appealed
to the Court of First Instance and there filed an answer. On May 29, 1945, the plaintiff
filed a motion asking for judgment on the pleadings, in accordance with section 10 of
Rule 35. Upon said motion the trial court rendered judgment (a) ordering the defendant
to vacate the premises at 1406 Rizal Avenue, Manila, and to return the same to the
plaintiff, and (b) adjudging the defendant to pay to the plaintiff a rental of P100 a month
from March 1, 1945, until he vacates the premises, and to pay the costs. Hence this
present petition.
ISSUES:
1. Whether or not the trial court erred in rendering judgment on the pleadings.
2. Whether or not the trial court erred in trying the case without due notice to the
defendant and/or his counsel.
3. Whether or not the trial court erred in rendering judgment against the defendant and the appellant.
HELD:
No. The first assignment of error is sustainable only in so far as the judgment
appealed from orders the defendant to pay to the plaintiff a monthly rental of
P100.Defendant's answer was a mere general denial; it did not deal specifically with
each material allegation of fact and did not set forth the substance of the matters upon
which he would rely to support his denial, as required by section 7 of Rule 9. The
complaint did not allege and claim rent from the defendant under a contract with the
latter; it claimed damages from him on account of his having entered, occupied, and
detained the premises in question without plaintiff's knowledge and consent. As the
amount of those damage was not deemed admitted by the general denial, it was
incumbent upon the plaintiff to prove it. In a judgment upon the pleadings the plaintiff is
entitled to only what is deemed admitted.
No. The second assignment of error to the effect that the defendant or his
counsel was not served with notice of trial is untenable for the reason that when one of
the parties is entitled to and asks for judgment on the pleadings no trial is necessary.
No. The third assignment of error is a mere consequence of the first and needs
no further discussion. Conformably to the vote of the majority, the judgment of the trial
court is modified by reducing to P35 the amount of monthly rental which the defendant
shall pay to the plaintiff from March 1, 1945, until said defendant vacates the premises,
and is affirmed in all other respects, with costs against the defendant in the three
instances.

El Hogar Filipino V. Santos Investments, Inc., 74 Phil 79 (1943)

FACTS:
Plaintiff is suing defendant for rents upon two causes of action. Under the first
cause of action it is alleged that defendant occupied rooms 303 and 305 of the Crystal
Arcade belonging to the plaintiff from November 10, 1936, to September 30, 1939,
under a written contract of lease at an agreed monthly rental of P260, but failed to pay
the rents corresponding to the months of February to September, 1939, inclusive,
aggregating the sum of P2,080. Under the second cause of action it is alleged that
defendant also occupied room 334 of the same building from May, 1937, to September,
1939, at an agreed monthly rental of P95, but failed to pay the rents corresponding to
the months of January to September, 1939, inclusive, aggregating the sum of P855.
ISSUES:
Whether or not denials are not specific and its effect.
HELD:
Section 6 of Rule 9 provides that the answer shall contain either a specific denial
or a statement of matters in avoidance of the cause or causes of action asserted in the
complaint; section 7 says that the defendant must deal specifically with each material
allegation of fact the truth of which he does not admit and, whenever practicable, shall
set forth the substance of the matters which he will rely upon to support his denial; and
section 8 provides that a material averment in the complaint other than that as to the
amount of damage, shall be deemed admitted when not specifically denied. It will be
noted that this rule does away with a general denial, in contrast with section 94 of the
former Code of Civil Procedure which expressly allowed it and provided that "a general
denial only puts in issue the material allegations of the complaint."
Defendant's answer wherein it merely "denies generally and specifically each
and every allegation contained in each and every paragraph of the complaint," is but a
general denial. It is not a specific denial under section 7 of Rule 9, because it does not
deal specifically with each material allegation of fact, nor does it set forth the substance
of the matters upon which the defendant relies to support his denial. It does not serve
the purpose of requiring the defendant to make a specific denial, which is to compel him
to specify the matters which he intends to disprove and disclose the matters upon which
he relies to support his denial, thereby limiting the issues and avoiding unnecessary
delays and surprises. Under the old procedure the plaintiff was compelled by
defendant's mere general denial to prove facts alleged in the complaint which the
defendant did not even attempt to dispute. The new procedure does away with that
unnecessary burden. (Moran on the Rules of Court, volume 1, page 93.)

Tijam V. Sibonghanoy, 23 SCRA 29 (1968);

FACTS:
Tijam filed for recovery of P1,908 + legal interest from Sibongahanoy. Defendants
filed a counter bond with Manila Surety and Fidelity Co (Surety). Judgement was in
favour of the plaintiffs, a writ of execution was issued against the defendant. Defendants
moved for writ of execution against surety which was granted. Surety moved to quash
the writ but was denied, appealed to CA without raising the issue on lack of jurisdiction.
CA affirmed the appealed decision. Surety then filed Motion to Dismiss on the ground of
lack of jurisdiction against CFI Cebu in view of the effectivity of Judiciary Act of 1948 a
month before the filing of the petition for recovery. Act placed original exclusive
jurisdiction of inferior courts all civil actions for demands not exceeding 2,000 exclusive
of interest. CA set aside its earlier decision and referred the case to SC since it has
exclusive jurisdiction over "all cases in which the jurisdiction of any inferior court is in
issue.
ISSUE:
Whether or not surety bond is estopped from questioning the jurisdiction of the
CFI

Cebu

for

the

first

time

upon

appeal.

HELD:
YES, SC believes that that the Surety is now barred by laches from invoking this
plea after almost fifteen years before the Surety filed its motion to dismiss raising the
question of lack of jurisdiction for the first time - A party may be estopped or barred from
raising a question in different ways and for different reasons. Thus we speak of estoppel
in pais, or estoppel by deed or by record, and of estoppel by laches. Laches, in a
general sense is failure or neglect, for an unreasonable and unexplained length of time,
to do that which, by exercising due diligence, could or should have been done earlier Furthermore, it has also been held that after voluntarily submitting a cause and
encountering an adverse decision on the merits, it is too late for the loser to question
the jurisdiction or power of the court -"undesirable practice" of a party submitting his
case for decision and then accepting the judgment, only if favorable, and attacking it for
lack

of

jurisdiction,

when

adverse.

The surety insists that the lower court should have granted its motion to quash the writ
of execution because the same was issued without the summary hearing - Summary
hearing is "not intended to be carried on in the formal manner in which ordinary actions
are prosecuted" (83 C.J.S. 792). It is, rather, a procedure by which a question is
resolved "with dispatch, with the least possible delay, and in preference to ordinary legal

and regular judicial proceedings" (Ibid, p. 790). What is essential is that "the defendant
is notified or summoned to appear and is given an opportunity to hear what is urged
upon him, and to interpose a defense, after which follows an adjudication of the rights of
the parties - In the case at bar, the surety had been notified of the plaintiffs' motion for
execution and of the date when the same would be submitted for consideration. In fact,
the surety's counsel was present in court when the motion was called, and it was upon
his request that the court a quo gave him a period of four days within which to file an
answer. Yet he allowed that period to lapse without filing an answer or objection. The
surety cannot now, therefore, complain that it was deprived of its day in court.
The orders appealed from are affirmed.

La Naval Drug Corp. V. Court of Appeals, 236 SCRA 78, 91 (1994)

FACTS:
In 1989, a conflict between La Naval Drug Corporation and a certain Wilson Yao
arose regarding a lease contract. Yao invoked a provision in the lease contract whereby
pursuant to R.A. 876 (Arbitration Law), they should refer the matter to arbitration.
Hence, the parties agreed to refer the issue to three arbitrators however, certain
complications arose when they were choosing a third arbitrator. This prompted Yao
to go to court to demand the arbitrators to proceed with the arbitration. Yao went to the
regional trial court (Angeles City) and the case was filed as a summary proceeding case
under R.A. 876. Yao also prayed for an award for damages in his favor.
In its answer, La Naval asserted that the case should be dismissed as it was filed
prematurely; La Naval questioned Yaos claim for damages as it averred that the same
should be litigated independently and not in the same summary proceeding case.
However, La Naval also posed a counterclaim.
The RTC resolved the matter regarding the arbitrators (it appointed a third arbitrator).
The RTC also ruled that La Naval is estopped from questioning Yaos claim for
damages for being out of jurisdiction as La Naval itself filed a counterclaim for damages.
ISSUE:
Whether or not the RTC has jurisdiction over the claims for damages between
parties.
HELD:
No. R.A. 876 is clear that summary proceedings under said law shall only involve
the matter of arbitration. The parties claims for damages must be litigated in another
civil case.
The Supreme Court went on to discuss that where the court clearly has no
jurisdiction over the subject matter, in this case the claim and counterclaim for damages,
the court must dismiss the case (in this case, the claim and counterclaim for
damages). Lack of jurisdiction over the subject matter as a defense may be raised at
any time. Failure to raise such defense shall not estop the defendant from raising such
defense (as opposed to the defense of lack of jurisdiction over the person which is
deemed waived if the defendant voluntarily appeared if defendant voluntarily
appeared, then he is estopped from raising that defense).

Tui Po V. Bautista, 103 SCRA 388 (1981);

FACTS:
Private respondent, Juan Pambuan, Jr., filed a Complainant for Reconveyance
and Damages of approximately P400,000.00 against petitioners before the Court of
First Instance of Rizal, Pasay City (Civil Case No. 5023-P) for an alleged wrongful sale
at public auction of a certain real property. Petitioners presented their Answer with a
counter-claim, on account of the 11 malicious and unfounded action," for moral
damages in the amount of P600,000.00; actual and compensatory damages of
P100,000.00; exemplary damages of P50,000.00; attorney's fees of P30,000.00, plus
P200.00 per appearance of counsel as representation and travelling expenses.
On the same day that they filed their Answer, petitioners filed an ex- parte Motion for
exemption from payment of legal fees on their counterclaim alleging that it was
compulsory in nature and that under section 5(a), Rule 141, only a permissive
counterclaim is subject to payment of legal fees.
Since the Branch Clerk of Court required petitioners to deposit the amount of P1,410.00
pending resolution by the Court, petitioners complied subject to refund. That was on
March 15, 1976. Petitioners' Motion remained unresolved notwithstanding reiterations
made on May 5, 1978, January 12, 1979 and on August 20, 1979. Eventually, on
December 28, 1979, respondent Judge denied petitioners' Motion for refund on the
ground that petitioners' counterclaim is permissive and not compulsory. The
reconsideration prayed for by petitioners was denied by respondent Judge on August
26, 1980. It is these two Orders that are assailed in this Petition, to which we gave due
course on February 2, 1981.
ISSUES:
Whether or not claim for Attorneys Fees is in the nature of a compulsory
counterclaim.
HELD:
In respect of attorney's fees, it should be held that where a claim therefore arises
out of the filing of the complaint they, too, should be considered as in the nature of a
compulsory counterclaim. They should be pleaded or prayed for in the answer to the
complaint in order to be recoverable, otherwise, they would be barred.

Chavez V. Sandiganbayan, 193 SCRA 282 (1991)

FACTS:
Civil case was filed against Enrile in the Sandiganbayan for alleged
illegal

activities

made

by

Enril e during the

Marcos

era. Enrirle

filed a motion to dismiss and compulsory counter-claim. In the counter-claim

Enrile moved to implead Chavez and other PCGG officials on the basis that
the case field agaisnt him was a harassment suit. The motion to implead
Chavez and others was granted by the Sandiganbayan. Chavez and the PCGG
officials raised the defense that they are immune from suit by virtue of Sec. 4
of Executive Order NO. 1. It was found in the records of the PCGG, declared by Jovito
Salonga, the there are no proof linking Enrile with the illegal activities
performed by Marcos. It was further averred that the case filed against Enrile was
instigated by Sol. Gen. Chavez. Sol. Gen. Chavez defended himself by saying
that he was acting as a counsel and cannot by made a defendant in a counterclaim.
ISSUES:
Whether or not Sol. Gen. Chavez can be made liable for
d a m a g e s i n f i l i n g t h e s u i t a g a i n s t Enrile.
HELD:
The court held that the grounds for allowing the compulsory counter-claim of
Enrile was based on the malice or bad faith of Chavez in filing the suit. It was further
stated by the court that immunity from suit is granted only because of the fact that the
Commission has a multitude of task. Immunity for suit on members of the PCGG and
other public officers is available only if such officers are acting in good faith and in the
performance of their duty. If the acts done are tainted with bad faith or in excess of
authority they can be held liable personally for damages. In the case at bar the Sol.
Gen. exceeded his authority and his act is tainted with bad faith by filing
baseless suit against Enrile. His office does not give him the license to prosecute
recklessly to the injury of another. Thus he is made liable fro his actions in the opinion of
the court.