Ching Vs Cheng

Facts:
Antonio Ching owned several businesses and properties, among which
was Po Wing Properties, Incorporated (Po Wing Properties). His total assets
are alleged to have been worth more than 380 million. While he was
unmarried, he had children from two women.
Ramon Ching alleged that he was the only child of Antonio Ching with his
common-law wife, Lucina Santos. Joseph Cheng and Jaime Cheng, on the
other hand, claim to be Antonio Chings illegitimate children with his
housemaid, Mercedes Igne.
Lucina Santos alleged that when Antonio Ching fell ill sometime in 1996,
he entrusted her with the distribution of his estate to his heirs if
something were to happen to him. She alleged that she handed all the
property titles and business documents to Ramon Ching for safekeeping.
Fortunately, Antonio Ching recovered from illness and allegedly demanded
that Ramon Ching return all the titles to the properties and business
documents
Ramon Ching allegedly executed an affidavit of settlement of estate,
naming himself as the sole heir and adjudicating upon himself the entirety
of Antonio Chings estate.
1st Case - (The Chengs) filed a complaint for declaration of nullity of titles
against Ramon Ching before the Regional Trial Court of Manila. This case
was docketed as Civil Case No. 98-91046 (the first case).
On March 22, 1999, the complaint was amended, with leave of court, to
implead additional defendants, including Po Wing Properties, of which
Ramon Ching was a primary stockholder. After the responsive pleadings
had been filed, Po Wing Properties filed a motion to dismiss on the ground
of lack of jurisdiction of the subject matter.29
RTC Manila Branch 6, granted the motion to dismiss on the ground of lack
of jurisdiction over the subject matter. Upon motion of the Chengs
counsel, however, the Chengs and Lucina Santos were given fifteen (15)
days to file the appropriate pleading. They did not do so.
2nd Case- the Chengs and Lucina Santos filed a complaint for "Annulment
of Agreement, Waiver, Extra-Judicial Settlement of Estate and the
Certificates of Title Issued by Virtue of Said Documents with Prayer for
Temporary Restraining Order and Writ of Preliminary Injunction" against
Ramon Ching and Po Wing Properties.

On November 11, 2002, the Chengs and Lucina Santos filed a motion to
dismiss their complaint in the second case, praying that it be dismissed
without prejudice.
Motion to dismiss granted on the basis that the summons had not yet
been served on Ramon Ching and Po Wing Properties, and they had not
yet filed any responsive pleading. The dismissal of the second case was
made without prejudice.
On December 9, 2002, Ramon Ching and Po Wing Properties filed a motion
for reconsideration of the order dated November 22, 2002. They argue
that the dismissal should have been with prejudice under the "two
dismissal rule" of Rule 17, Section 1 of the 1997 Rules of Civil Procedure,
in view of the previous dismissal of the first case.37
3rd Case- During the pendency of the motion for reconsideration, the
Chengs and Lucina Santos filed a complaint for "Disinheritance and
Declaration of Nullity of Agreement and Waiver, Affidavit of Extra judicial
Agreement, Deed of Absolute Sale, and Transfer Certificates of Title with
Prayer for TRO and Writ of Preliminary Injunction" against Ramon Ching
and Po Wing Properties. This case was docketed as Civil Case No. 02105251(the third case) and was eventually raffled to Branch 6.
Ramon Ching and Po Wing Properties filed a motion to dismiss on the
ground of res judicata, litis pendencia, forum-shopping, and failure of the
complaint to state a cause of action.
On July 30, 2004, Branch 6 issued an omnibus order resolving both the
motion for reconsideration in the second case and the motion to dismiss in
the third case. The trial court denied the motion for reconsideration and
the motion to dismiss, holding that the dismissal of the second case was
without prejudice and, hence, would not bar the filing of the third case.

ISSUE : Whether the trial courts dismissal of the second case operated as
a bar to the filing of a third case, asper the "two-dismissal rule";

HELD: The dismissal of the second case was without prejudice in view of
the "two-dismissal rule"
As a general rule, dismissals under Section 1 of Rule 17 are without
prejudice except when it is the second time that the plaintiff caused its
dismissal. Accordingly, for a dismissal to operate as an adjudication upon
the merits, i.e, with prejudice to the re-filing of the same claim, the
following requisites must be present:

(1) There was a previous case that was dismissed by a competent court;
(2) Both cases were based on or include the same claim;
(3) Both notices for dismissal werefiled by the plaintiff; and
(4) When the motion to dismiss filed by the plaintiff was consented to by
the defendant on the ground that the latter paid and satisfied all the
claims of the former.72
The purpose of the "two-dismissal rule" is "to avoid vexatious
litigation."73 When a complaint is dismissed a second time, the plaintiff is
now barred from seeking relief on the same claim.
Here, the first case was filed as an ordinary civil action. It was later
amended to include not only new defendants but new causes of action
that should have been adjudicated in a special proceeding. A motion to
dismiss was inevitably filed by the defendants onthe ground of lack of
jurisdiction.
The dismissal of the first case was done at the instance of the defendant
under Rule 16, Section 1(b) of the Rules of Civil Procedure.
Under Section 5 of the same rule,75 a party may re-file the same action or
claim subject to certain exceptions.
Thus, when respondents filed the second case, they were merely refiling
the same claim that had been previously dismissed on the basis of lack of
jurisdiction. When they moved to dismiss the second case, the motion to
dismiss can be considered as the first dismissal at the plaintiffs instance.
Petitioners do not deny that the second dismissal was requested by
respondents before the service of any responsive pleadings. Accordingly,
the dismissal at this instance is a matter of right that is not subject to the
trial courts discretion. In O.B. Jovenir Construction and Development
Corporation v. Macamir Realty and Development Corporation:
[T]he trial court has no discretion or option to deny the motion, since
dismissal by the plaintiff under Section 1, Rule 17 is guaranteed as a
matter of right to the plaintiffs. Even if the motion cites the most
ridiculous of grounds for dismissal, the trial court has no choice but to
consider the complaint as dismissed, since the plaintiff may opt for such
dismissal as a matter of right, regardless of ground. (Emphasis supplied)
For this reason, the trial court issued its order dated November 22, 2002
dismissing the case, without prejudice.
In granting the dismissal of the second case, the trial court specifically
orders the dismissal to be without prejudice. It is only when the trial

courts order either is silent on the matter, or states otherwise, that the
dismissal will be considered an adjudication on the merits.
However, while the dismissal of the second case was without prejudice,
respondents act of filing the third case while petitioners motion for
reconsideration was still pending constituted forum shopping.
PINGA V. HEIRS OF SANTIAGO
Facts: The heirs of Santiago filed a complaint for injunction against the
petitioners for unlawful entry into their land and harvesting of the various
resources found therein such as bamboo, the fruits of their coconut trees
etc. The petitioner, in their answer with counterclaims of forcible entry
and damages amounting to P2.1M for the reckless filing of the case,
instead claimed that they were in fact the owners of the land and that the
respondents' entry were merely tolerated. The trial court dismissed the
case since the respondent's failed to present their evidence due to their
counsel's non-appearance and several postponements. Their counsel field
an MR of the said order, but instead of motioning to reverse the decision,
motioned instead to dismiss the whole action including the counterclaim
of the petitioners, and disallow the petitioners to present evidence ex
parte as to their counterclaim. The trial court granted the dismissal of the
counterclaim and averred that the dismissal of the complaint carries with
it the dismissal of the counterclaim.
The petitioners filed a petition for certiorari alleging that the trial court
committed grave abuse of discretion when it dismissed the counterclaim,
contrary to the express provision of Rule 17, Sec. 3 which provides that
dismissal of the complaint is without prejudice to the counterclaim.
The defendants averred that the jurisprudence so far, up to BA Finance,
held that the dismissal of the complaint carried with it the dismissal of the
counterclaim.
Issue: Does the dismissal of the complaint carry with it the dismissal of
the counterclaim?
Held: No. Rule 17, Sec. 3 of the 1997 Rules of Procedure (current). The
jurisprudence alleged by the defendant is based on the 1964 Rules of
Procedure via Rule 17 -- which is hereby abandoned by this Decision.
There has been no Jurisprudence for the current Rules, since there has
been no opportunity or case to rule on the same up to this moment.
The 1964 Rules of Procedure has been silent on whether the dismissal of
the complaint carries with it the dismissal of the counterclaim, which led
to the express inclusion of non-dismissal of the counterclaim via Sec. 3,
Rule 17 of the 1997 Rules of Procedure -- as suggested by J. Regalado
himself during the drafting of the 1997 Rules, whom has taken a strong
dissenting opinion on the decision of BA Finance.

The revision of the Rule is not without basis since Act. 190 (1901) and the
1940 Rules supports the current 1997 Rule.
The doctrine applies whether the counterclaim is permissive or
compulsory, as inferred by the non-qualification of Sec. 3.
PHILIPPINE NATIONAL BANK v SPS. ANGELITO PEREZ AND JOCELYN PEREZ
G.R. No. 187640
June 15, 2011
FACTS:
In 1988, spouses Angelito Perez and Jocelyn Perez (Spouses
Perez) obtained a revolving credit line fromPhilippine National
Bank's (PNB's) branch in Cauayan City, Province of Isabela. The credit line
was secured by several chattel mortgages over palay stocks
inventory and real estate mortgages over real properties.
Sometime in 2001,Spouses Perez defaulted on their financial
obligations, prompting PNB to institute extra-judicial foreclosure
proceedings over the aforementioned securities on November 13 of that
year. On November 19, 2001, the sheriff instituted a Notice ofExtraJudicial Sale for the mortgaged properties by public auction on
December 20, 2001. On November 26, 2001,Spouses Perez filed an
Amended Complaint for Release or Discharge of Mortgaged Properties,
Breach of Contract,Declaration of Correct Amount of Obligation, Injunction,
Damages, Annulment of Sheriff's Notice of Extra-Judicial Sale, with a
Prayer for the Issuance of a Preliminary Mandatory Injunctive Writ and a
Temporary Restraining Order docketed asCivil Case No. 20-1155.At the
hearing of the application for the issuance of the writ, Spouses Perez and
their counsel failed to appear which resulted in the denial of the
injunction. This was also the case in the pre-trial. Spouses Perez alleged
that they filed a Motion for Postponement, but on the same date the court
issued its denial and dismissed the case. Spouses Perez filed a Motion for
Reconsideration and a Notice of Appeal, which were both denied.
Consequently, Spouses Perez appealed the denial of their Motion for
Reconsideration to the CA, which the CA denied and reasoned that:
petitioners trifled with the mandatory character of a pre-trial conference in
the speedy disposition of cases. It is a procedural device intended to
clarify and limit the basic issues between the parties and paves the way
for a less cluttered trial and resolution of the case. Its main
objective is to simplify, abbreviate and expedite the trial, or,
propitious circumstance permitting (as when the parties can compound or
compromise their differences), even to totally dispense with it
altogether.Surprisingly, on April 14, 2005, the CA issued an Amended
Decision granting the Motion for Reconsideration citing that the higher
interest of substantial justice should prevail and not mere technicality. The
case was remanded to the trial court. On January 20, 2006, the trial court
issued an Order setting the case for hearing on March 8, 2006.On October
20, 2005, Spouses Perez filed their motion to require PNB to submit its

statement of account for the period beginning 1995 to 2000. On

December 9, 2005, PNB also filed a motion for the production or
inspection of books of accounts regarding payments in the years 1997 to
2000 and thereafter, if any. There being no opposition to the twin motion
of [Spouses Perez], the same are hereby granted. Accordingly, let this
case be set for hearing on March 8, 2006 at8:30 o'clock in the morning.
PNB, however, failed to receive a copy of the aforementioned order and
was, thus, unable to attend the hearing on March 8, 2006. For failure to
appear in today's pre-trial and for failure to comply with the order of this
Court dated January 20, 2006, Spouses Perez are hereby allowed to
adduce evidence. On July 5, 2006, the trial court decided in favor of
Spouses Perez. In its Decision, the trial court denied PNB's Motion for
Reconsideration and declared in its judgment that: a. due and full
payments were made by [Spouses Perez] on their principal obligation to
PNBb. the Sheriff's Notice of Extrajudicial Sale as null and void, and
enjoining defendant from foreclosing any and allof the properties
mortgaged by Spouses Perez. Ordering PNB to pay [Spouses Perez] the
sum of: 1. PHP145,117,306.67 representing the amount overpaid by
Spouses Perez under the revolving credit loan facility and promissory2.
PHP2,000,000.00 as moral damages3. 1,500,000 as Exemplary damages.
PHP1, 000,000.00) as Attorney's Fees and cost of suit.Accordingly, the trial
court issued an Order of Execution dated August 14, 2006. The very next
day, a Writ ofExecution was issued to implement the aforesaid order and
to demand payment from PNB. On August 15, 2006, PNB filed a Petition
for Relief from Judgment/Order of Execution with a prayer for the
issuance of a writ of preliminary injunction, alleging that the failure to
file the Motion for Reconsideration was due to mistake and/or excusable
negligence.Consequently, the CA issued a Resolution dated November 7,
2006 granting the prayer for a temporary restraining order(TRO) and,
likewise, issued a Temporary Restraining Order directing public
respondent, or any person acting for and on his behalf, to CEASE and
DESIST from IMPLEMENTING the assailed Orders dated August 16 and 17,
2006 inCivil Case No. Br. 19-1155 or otherwise ENFORCING the Order of
Execution dated August 14, 2006 or the Writ ofExecution dated August 15,
2006 in said case.
Despite the issuance of the TRO, Spouses Perez were able to garnish Two
Million Six Hundred Seventy-SixThousand One Hundred Forty Pesos and
Seventy Centavos (Php 2,676,140.70) from PNB's account with Equitable
PCIBank (EPCIB) on the same date the TRO was issued. On October 23,
2008, the CA issued the assailed Decision in, granting the petition of
PNB. It ruled that the sending of a notice of pre-trial is mandatory and that
the Order dated March 8, 2006 issued by the trial court cannot be
considered as such. Therefore, the CA held that all orders issued
subsequent to the said order are,likewise, null and void. Hence, PNB and
Spouses Perez filed their separate petitions with this Court assailing both
the decision and the resolution of the CA.
ISSUE:

Whether a pre-trial notice is mandatory and, as a consequence, whether

the lack of notice of pre-trial voids a subsequently issued decision.
RULING
:Section 3, Rule 18 of the 1997 Rules on Civil Procedure unequivocally
requires that the notice of pre-trial shall be served on counsel, or on the
party who has no counsel." It is elementary in statutory construction that
the word "shall"denotes the mandatory character of the rule. Thus, it is
without question that the language of the rule undoubtedly requires the
trial court to send a notice of pre-trial to the parties. More importantly, the
notice of pre-trial seeks to notify the parties of the date, time and place of
the pre-trial and to require them to file their respective pre-trial briefs
within the time prescribed by the rules. Its absence, therefore, renders the
pre-trial and all subsequent proceedings null and void.In the case at bar,
the order issued by the trial court merely spoke of a "hearing on March 8,
2006" and requiredPNB "to prepare and complete a statement of
account." The said order does not mention anything about a pre-trial to be
conducted by the trial court. In contrast, the Notice of Pre-trial dated
August 22, 2002 issued by the trial court categorically states that a pretrial is to be conducted, requiring the parties to submit their respective
pre-trial briefs. As such we find that the CA aptly held that the Order
dated March 8, 2006, which declared the hearing to be a pre-trial and
allowedSpouses Perez to adduce evidence ex parte, is void. Similarly, its
ruling that the Decision dated July 5, 2006 and allsubsequent orders
issued pursuant to the said judgment are also null and void, is proper.
Necessarily, it follows that the nullity of the Writ of Execution carries
with it the nullity of all acts done which implemented the writ.
This includes the garnishment of Php 2,676,140.70 from PNB's account. Its
return to PNB's account is but a necessary consequence of the void
writ.Similarly, the nullity of the Order dated August 17, 2006, which
cancelled PNB's fourteen (14) titles and directed the issuance of new titles
to Spouses Perez, has the effect of annulling all the fourteen (14) titles
issued in the name of Spouses Perez. The titles should revert back to PNB.
The fourteen (14) new titles issued to Spouses Angelito Perez and Jocelyn
Perez by virtue of the August 17, 2006 Order and all derivative titles
issued therefrom are declared null and void and cancelled. Spouses
Angelito Perez and Jocelyn Perez are ordered to pay PNB the amount
ofP2,767,140.70 representing the amount illegally garnished from PNB's
account with Equitable PCI Bank (EPCIB
Chingkoe vs. Republic
G.R. No. 183608

July 31, 2013

Facts:
This petition stemmed from two collection cases filed by the Republic of
the Philippines (Republic), represented by the Bureau of Customs (BOC)
before the Regional Trial Court (RTC) of Manila. In the first Complaint for
collection of money and damages, entitled Republic of the Philippines,
represented by the Bureau of Customs v. Chiat Sing Cardboard Inc.

(defendant and third party plaintiff) v. Filstar Textile Industrial Corporation,

Faustino T Chingkoe (third party defendants), the Republic alleged that
Chiat Sing Cardboard Inc. (Chiat Sing), a corporation that imports goods to
the Philippines, secured in 1997 fake and spurious tax credit certificates
from Filstar Textile Industrial Corporation (Filstar), amounting to six million
seventy-six thousand two hundred forty-six pesos (PhP 6,076,246)
Meanwhile, in the second Complaint, entitled Republic of the Philippines,
represented by the Bureau of Customs v. Filstar Textile Industrial
Corporation the Republic alleged that in the years 1992-1998, defendant
Filstar fraudulently secured 20 tax credit certificates amounting to fiftythree million six hundred fifty-four thousand six hundred seventy-seven
pesos (PhP 53,654,677).
After an Order of consolidation was issued on June 23, 2003, the two cases
were jointly heard before the RTC.
Pursuant to a Notice of Mediation Hearing sent to the parties on October
17, 2005, the cases were referred to the Philippine Mediation Center (PMC)
for mandatory mediation. The pre-trial for the consolidated cases was
initially set on January 9, 2006, but come said date, the report of the
mediation has yet to be submitted; hence, on the motion of the counsel of
defendant Chiat Sing, the pre-trial was canceled and rescheduled to
February 15, 2006.
On February 15, 2006, the PMC reported that the proceedings are still
continuing; thus, the trial court, on motion of the same counsel for Chiat
Sing, moved for the re-setting of the pre-trial to March 17,
2006.Unfortunately, the mediation proceedings proved to be uneventful,
as no settlement or compromise was agreed upon by the parties.
During the March 17, 2006 pre-trial setting, the Office of the Solicitor
General (OSG), representing the Republic, failed to appear. The counsel for
defendant Filstar prayed for a period of 10 days within which to submit his
motion or manifestation regarding the plaintiffs pre-trial brief. The trial
court granted the motion, and again ordered a postponement of the pretrial to April 19, 2006.
Come the April 19, 2006 hearing, despite having received a copy of the
March 17, 2006 Order, the OSG again failed to appear. It also failed to
submit its comment. Thus, counsels for the defendants Filstar, Chiat Sing,
and Chingkoe moved that plaintiff be declared non-suited. Meanwhile, the
counsel for BOC requested for an update of their case. In its Order on the
same date, the trial court warned the plaintiffs Republic and BOC that if no
comment is submitted and if they fail to appear during the pre-trial set on
May 25, 2006, the court will be constrained to go along with the motion
for the dismissal of the case.
The scheduled May 25, 2006 hearing, however, did not push through,
since the trial court judge went on official leave. The pre-trial was again
reset to June 30, 2006.
During the June 30, 2006 pre-trial conference, the OSG again failed to
attend. A certain Atty. Bautista Corpin, Jr. (Atty. Corpin Jr.), appearing on
behalf of BOC, was present, but was not prepared for pre-trial. He merely
manifested that the BOC failed to receive the notice on time, and moved

for another re-setting of the pre-trial, on the condition that if either or both
lawyers from the BOC and OSG fail to appear, the court may be
constrained to dismiss the abovementioned cases of the BOC for failure to
prosecute. Meanwhile, counsels for defendants Chiat Sing, Filstar, and
third-party defendants Faustino T. Chingkoe and Gloria C. Chingkoe, who
were all present during the pre-trial, moved for the dismissal of the case
on the ground of respondents failure to prosecute. The trial court judge
issued an Order resetting the pre-trial to July 14, 2006.
At the hearing conducted on July 14, 2006, the respective counsels of the
defendants were present. Notwithstanding the warning of the judge given
during the previous hearing, that their failure to appear will result in the
dismissal of the cases, neither the OSG nor the BOC attended the hearing.
Thus, as moved anew by the respective counsels of the three defendants,
the trial court issued an Order dismissing the case.
The motion for reconsideration of the July 14, 2006 Order was likewise
denied by the RTC on August 31, 2007.As recourse, respondents filed a
Petition for Certiorari under Rule 65 before the CA, alleging that the trial
court judge acted with grave abuse of discretion in dismissing the two
cases.
CA
In its Decision dated April 30, 2008, the CA granted the petition and
remanded the case to the RTC for further proceedings. In reversing the
RTC Order, the CA ruled that the case, being a collection case involving a
huge amount of tax collectibles, should not be taken lightly. It also stated
that it would be the height of injustice if the Republic is deprived of due
process and fair play.
ISSUE: Was the trial courts dismissal of the case in order?
HELD: Yes. This Court finds that the dismissal of the case by the trial court
was due to the fault and negligence of respondent. There is clear
negligence and laxity on the part of both the BOC and OSG in handling
this case on behalf of the Republic. Despite several re-settings of the
hearing, either or both counsels failed to attend the pre-trial conference,
without giving a justifiably acceptable explanation of their absence. This
utter neglect of its duty to attend the scheduled hearings is what led the
trial court to ultimately dismiss the cases. In finding that the dismissal by
the trial court is tainted with grave abuse of discretion, the CA committed
reversible error.
Petitioners repeated failure to appear at the pre-trial amounted to a
failure to comply with the Rules and their non-presentation of evidence
before the trial court was essentially due to their fault.
The inevitable conclusion in this case is that the trial court was merely
following the letter of Sec. 5, Rule I 8 of the Rules of Court in dismissing
the case. Thus, the CA committed grave and reversible error in nullifying
the Order of dismissal. The trial court had every reason to dismiss the
case, not only due to the Motion to Dismiss filed by the defendants, but
because the Rules of Court itself says so.
ISSUE: Is the dismissal with or without prejudice?

HELD: Without prejudice.

Section 5, of Rule 18 provides that the dismissal of an action due to the
plaintiffs failure to appear at the pre-trial shall be with prejudice, unless
otherwise ordered by the court.
In view of the huge amount of tax collectibles involved, and considering
that taxes are the "lifeblood of the government," the dismissal of the case
should be without prejudice.
CZARINA T. MALVAR vs. KRFAT FOOD PHILS., INC
G.R. No. 183952; September 9, 2013
FACTS:
The case initially concerned the execution of a final decision of the Court
of Appeals (CA) in a labor litigation, but has mutated into a dispute over
attorney's fees between the winning employee and her attorney after she
entered into a compromise agreement with her employer under
circumstances that the attorney has bewailed as designed to prevent the
recovery of just professional fees.
Malvar filed a complaint for illegal suspension and illegal dismissal against
KFPI and Bautista in the National Labor Relations Commission (NLRC). The
Labor Arbiter found and declared her suspension and dismissal illegal, and
ordered her reinstatement, and the payment of her full backwages,
inclusive of allowances and other benefits, plus attorneys fees.
NLRC and CA affirmed the decision of the Labor Arbiter. After the
judgment in her favour became final and executor, Malvar moved for the
issuance of writ of execution but the execution failed due to questionable
computation of the award. Malvar requested for the second issuance of
the writ of execution and was partially complied with but with protest on
the part of Kraft by filing a TRO for further execution since the
computation is incorrect. CA ruled in favour of Kraft. Thus, Malvar
appealed. While her appeal was pending, Malvar and the respondents
entered into a compromise agreement
Thereafter, Malvar filed an undated Motion to Dismiss/Withdraw Case,
praying that the appeal be immediately dismissed/withdrawn in view of
the compromise agreement, and that the case be considered closed and
terminated.
INTERVENTION
Before the Court could act on Malvars Motion to Dismiss/Withdraw Case,
the Court received on February 15, 2011 a so-called Motion for
Intervention to Protect Attorneys Rights from The Law Firm of Dasal,
Llasos and Associates, through its Of Counsel Retired Supreme Court
Associate Justice Josue N. Bellosillo (Intervenor), whereby the Intervenor
sought, among others, that both Malvar and KFPI be held and ordered to
pay jointly and severally the Intervenors contingent fees.

The Intervenor indicated that Malvars precipitate action had baffled,

shocked and even embarrassed the Intervenor, because it had done
everything legally possible to serve and protect her interest. It added that
it could not recall any instance of conflict or misunderstanding with her,
for, on the contrary, she had even commended it for its dedication and
devotion to her case. According to the Intervenor, it was certain that the
compromise agreement was authored by the respondents to evade a
possible loss of P182,000,000.00 or more as a result of the labor litigation,
but considering the Intervenors interest in the case as well as its resolve
in pursuing Malvars interest, they saw the Intervenor as a major
stumbling block to the compromise agreement that it was then brewing
with her. Obviously, the only way to remove the Intervenor was to have
her terminate its services as her legal counsel. This prompted the
Intervenor to bring the matter to the attention of the Court to enable it to
recover in full its compensation based on its written agreement with her.
Opposing the Motion for Intervention, Malvar stresses that there was no
truth to the Intervenors claim to defraud it of its professional fees; that
the Intervenor lacked the legal capacity to intervene because it had
ceased to exist after Atty. Marwil N. Llasos resigned from the Intervenor
and Atty. Richard B. Dasal became barred from private practice upon his
appointment as head of the Legal Department of the Small Business
Guarantee and Finance Corporation, a government subsidiary; and that
Atty. Llasos and Atty. Dasal had personally handled her case.
Malvar adds that even assuming, arguendo, that the Intervenor still
existed as a law firm, it was still not entitled to intervene for the following
reasons, namely: firstly, it failed to attend to her multiple pleas and
inquiries regarding the case, as when communications to the Intervenor
through text messages were left unanswered; secondly, maintaining that
this was a justifiable cause to dismiss its services, the Intervenor only
heeded her repeated demands to withdraw from the case when Atty.
Dasal was confronted about his appointment to the government
subsidiary; thirdly, it was misleading and grossly erroneous for the
Intervenor to claim that it had rendered to her full and satisfactory
services when the truth was that its participation was strictly limited to
the preparation, finalization and submission of the petition for review with
the Supreme Court; and finally, while the Intervenor withdrew its services
on October 5, 2009, the compromise agreement was executed with the
respondents on December 9, 2010 and notarized on December 14, 2010,
after more than a year and two months, dispelling any badge of bad faith
on their end.
ISSUE:
Whether or not the Motion for Intervention to protect attorneys rights can
prosper, and, if so, how much could it recover as attorneys fees.
RULING:

YES. A compromise agreement is a contract, whereby the parties

undertake reciprocal obligations to avoid litigation, or put an end to one
already commenced. The client may enter into a compromise agreement
with the adverse party to terminate the litigation before a judgment is
rendered therein. If the compromise agreement is found to be in order and
not contrary to law, morals, good customs and public policy, its judicial
approval is in order. A compromise agreement, once approved by final
order of the court, has the force of res judicata between the parties and
will not be disturbed except for vices of consent or forgery.
A client has an undoubted right to settle her litigation without the
intervention of the attorney, for the former is generally conceded to have
exclusive control over the subject matter of the litigation and may at any
time, if acting in good faith, settle and adjust the cause of action out of
court before judgment, even without the attorneys intervention. It is
important for the client to show, however, that the compromise
agreement does not adversely affect third persons who are not parties to
the agreement.
By the same token, a client has the absolute right to terminate the
attorney-client relationship at any time with or without cause. But this
right of the client is not unlimited because good faith is required in
terminating the relationship. The limitation is based on Article 19 of the
Civil Code, which mandates that [e]very person must, in the exercise of
his rights and in the performance of his duties, act with justice, give
everyone his due, and observe honesty and good faith. The right is also
subject to the right of the attorney to be compensated. This is clear from
Section 26, Rule 138 of the Rules of Court, which provides:
Section 26. Change of attorneys. - An attorney may retire at any time from
any action or special proceeding, by the written consent of his client filed
in court. He may also retire at any time from an action or special
proceeding, without the consent of his client, should the court, on notice
to the client and attorney, and on hearing, determine that he ought to be
allowed to retire. In case of substitution, the name of the attorney newly
employed shall be entered on the docket of the court in place of the
former one, and written notice of the change shall be given to the adverse
party.
A client may at any time dismiss his attorney or substitute another in his
place, but if the contract between client and attorney has been reduced to
writing and the dismissal of the attorney was without justifiable cause, he
shall be entitled to recover from the client the full compensation
stipulated in the contract. However, the attorney may, in the discretion of
the court, intervene in the case to protect his rights. For the payment of
his compensation the attorney shall have a lien upon all judgments for the
payment of money, and executions issued in pursuance of such judgment,
rendered in the case wherein his services had been retained by the client.

In fine, it is basic that an attorney is entitled to have and to receive a just

and reasonable compensation for services performed at the special
instance and request of his client. The attorney who has acted in good
faith and honesty in representing and serving the interests of the client
should be reasonably compensated for his service.

MCIAA v Heirs of Minoza

G.R. No. 186045
February 2, 2011
Facts:
*A complaint for Reconveyance, Cancellation of Defendants Title, Issuance
of New Title to Plaintiffs and Damages was filed by Leila M. Hermosisima
(Leila) for herself and on behalf of the other heirs of the late Estanislao
Mioza.
*Leila claimed that their predecessors-in-interest, specifically, Adriana,
Patricio, and Santiago, children of Estanislao Mioza, executed a Deed of
Sale on February 15, 1950 conveying the subject lots to the NAC on the
assurance made by the latter that they (Leilas predecessors-in-interest)
can buy the properties back if the lots are no longer needed.
*More than forty years after the sale, plaintiffs informed the NACs
successor-in-interest, the Mactan-Cebu
International Airport Authority (MCIAA), that they were exercising the
buyback option of the agreement, but the MCIAA refused to allow the
repurchase on the ground that the sale was in fact unconditional.
*Before the MCIAA could present evidence in support of its case, a Motion
for Intervention, with an attached Complainant-in-Intervention was filed by
the heirs of Filomeno T. Mioza, the heirs of Pedro T, Mioza and the Heirs of
Florencia T. Mioza, who claimed to be the true, legal, and legitimate heirs
of the late Estanislao Mioza.
*The intervenors alleged in their complaint that the plaintiffs in the main
case are not related to the late spouses Estanislao Mioza and Inocencia
Togono whose true and legitimate children were their predecessors.
*The RTC of Cebu City, Branch 22, issued an Order denying the Motion for
Intervention holding that the rights being claimed by the intervenors
should be asserted in and would be fully protected by a separate
proceeding. Moreover, if the motion was granted, it would unduly delay
the proceedings in the instant case.
*CA reversed holding that the determination of the true heirs of the late
Estanislao Mioza is not only a collateral, but the focal issue of the case. In
addition, to grant the motion for intervention would avoid multiplicity of
suits.
Issue:
Whether or not CA erred in allowing the intervetntion

Held:
Yes. Intervention is a remedy by which a third party, not originally
impleaded in the proceedings, becomes a litigant therein to enable him,
her or it to protect or preserve a right or interest which may be affected
by such proceedings. The rules provide that the court must take into
consideration whether or not the intervention will unduly delay or
prejudice the adjudication of the rights of the original parties, and
whether or not the intervenors right or interest can be adequately pursued
and protected in a separate proceeding.
In the case at bar, the intervenors are claiming that they are the
legitimate heirs of Estanislao Mioza and Inocencia Togono and not the
original plaintiffs represented by Leila Hermosisima. True, if their
allegations were later proven to be valid claims, the intervenors would
surely have a legal interest in the matter in litigation. Nonetheless, this
Court has ruled that the interest contemplated by law must be actual,
substantial, material, direct and immediate, and not simply contingent or
expectant. It must be of such direct and immediate character that the
intervenor will either gain or lose by the direct legal
operation and effect of the judgment.
In addition to resolving who the true and legitimate heirs of Estanislao
Mioza and Inocencia Togono are, the parties would also present additional
evidence in support of this new allegation of fraud, deceit, and bad faith
and resolve issues of conflicting claims of ownership, authenticity of
certificates of titles, and regularity in their acquisition. Verily, this would
definitely cause unjust delay in the adjudication of the rights claimed by
the original parties.
The allowance or disallowance of a motion for intervention rests on the
sound discretion of the court after consideration of the appropriate
circumstances. It is not an absolute right.