CIVIL PROCEDURE CASES Amendment (Rule 10)
G.R. No. L-55687 July 30, 1982
JUASING HARDWARE, petitioner, vs. THE HONORABLE RAFAEL T. MENDOZA,
Judge of the Court of First Instance of Cebu, and PILAR DOLLA, respondents.
In this special civil action for certiorari, petitioner Juasing Hardware seeks to annul the
Orders of respondent Judge dated September 5, 1980 and October 21, 1980 issued in
Civil Case No. R-18386.
Records show the pertinent factual and procedural antecedents of the instant Petition to
be as follows:
On August 17, 1979, Juasing Hardware, alleging to be a single proprietorship duly
organized and existing under and by virtue of the laws of the Philippines and represented
by its manager Ong Bon Yong, filed a complaint for the collection of a sum of money
against Pilar Dolla. 1 The complaint charged that defendant Dolla failed and refused to pay,
despite repeated demands, the purchase price of items, materials and merchandise which
she bought from the plaintiff. 2 In her Answer, defendant stated, among others, that she "has
no knowledge about plaintiff's legal personality and capacity to sue as alleged in ... the
complaint." 3 The case proceeded to pre-trial and trial. After plaintiff had completed the
presentation of its evidence and rested its case, defendant filed a Motion for Dismissal of
Action (Demurrer to Evidence) 4 praying that the action be dismissed for plaintiff's lack of legal
capacity to sue. Defendant in said Motion contended that plaintiff Juasing Hardware is a
single proprietorship, not a corporation or a partnership duly registered in accordance with
law, and therefore is not a juridical person with legal capacity to bring an action in court.
Plaintiff filed an Opposition and moved for the admission of an Amended Complaint. 5
Resolving the foregoing controversy, respondent Judge issued the Order dated
September 5, 1980 dismissing the case and denying admission of the Amended
Complaint. Pertinent portions of said Order follow:
The Answer of the defendant to the complaint alleged the lack of legal capacity to
sue of the plaintiff as contained in its affirmative defense. inspite of the allegation
that plaintiff has no legal capacity to sue, the plaintiff insisted in proceeding to
trial instead of amending the Complaint. During the trial, it was found out that the
affirmative defense of defendant of plaintiff's lack of legal capacity to sue is very
evident for plaintiff Juasing Hardware is a single proprietorship which is neither a
partnership nor a corporation. The amendment therefore ' is now too late it being
substantial.
In view of all the foregoing, this case is hereby DISMISSED with costs de oficio. 6
Plaintiff's Motion for Reconsideration of the above Order was denied in another Order
issued by respondent Judge on October 21, 1980. 7
The sole issue in this case is whether or not the lower court committed a grave abuse of
discretion when it dismissed the case below and refused to admit the Amended
Complaint filed by therein plaintiff, now herein petitioner, Juasing Hardware.
Rule 3 of the Revised Rules of Court provides as follows:
Sec. 1. Who may be parties.-Only natural or juridical persons or entities
authorized by law may be parties in a civil action.
Petitioner is definitely not a natural person; nor is it a juridical person as defined in the
New Civil Code of the Philippines thus:
Art. 44. The following are juridical persons:
(1) The State and its political subdivisions;
(2) Other corporations, institutions and entities for public interest or purpose,
created by law; their personality begins as soon as they have been constituted
according to law;
(3) Corporations, partnerships and associations for private interest or purpose to
which the law grants a juridical personality, separate and distinct from that of
each shareholder, partner or member.
Finally, there is no law authorizing sole proprietorships like petitioner to bring suit in
court. The law merely recognizes the existence of a sole proprietorship as a form of
business organization conducted for profit by a single individual, and requires the
proprietor or owner thereof to secure licenses and permits, register the business name,
and pay taxes to the national government. It does not vest juridical or legal personality
upon the sole proprietorship nor empower it to file or defend an action in court.
Thus, the complaint in the court below should have been filed in the name of the owner
of Juasing Hardware. The allegations in the body of the complaint would show that the
suit is brought by such person AS proprietor or owner of the business conducted under
the name and style Juasing Hardware". The descriptive words "doing business as
Juasing Hardware' " may be added in the title of the case, as is customarily done.
1

Be that as it may, petitioner's contention that respondent Judge erred in not allowing the
amendment of the complaint to correct the designation of the party plaintiff in the lower
court, is impressed with merit. Such an amendment is authorized by Rule 10 of the
Revised Rules of Court which provides thus:
Sec. 4. Formal Amendments. A defect in the designation of the parties may be
summarily corrected at any stage of the action provided no prejudice is caused
thereby to the adverse party. (Emphasis supplied.)
Contrary to the ruling of respondent Judge, the defect of the complaint in the instant case
is merely formal, not substantial. Substitution of the party plaintiff would not constitute a
change in the Identity of the parties. No unfairness or surprise to private respondent
Dolla, defendant in the court a quo, would result by allowing the amendment, the
purpose of which is merely to conform to procedural rules or to correct a technical error.
In point is the case of Alonzo vs. Villamor, et al. 8 which applied Sec. 110 of the Code of
Civil Procedure authorizing the court "in furtherance of justice ... (to) allow a party to amend
any pleading or proceeding and at any stage of the action, in either the Court of First Instance
or the Supreme Court, by adding or striking out the name of any party, either plaintiff or
defendant, or by correcting a mistake in the name of a party ..." In the Alonzo case, Fr. Eladio
Alonzo, a priest of the Roman Catholic Church, brought an action to recover from therein
defendants the value of certain properties taken from the Church. The defendants contended
that Fr. Alonzo was not the real party in interest. This Court, speaking through Justice
Moreland, ordered the substitution of the Roman Catholic Apostolic Church in the place and
stead of Eladio Alonzo as party plaintiff, and aptly held in this wise:
... Defect in form cannot possibly prejudice so long as the substantial is clearly
evident. ...
No one has been misled by the error in the name of the party plaintiff. If we
should by reason of this error send this case back for amendment and new trial,
there would be on the retrial the same complaint, the same answer, the same
defense, the same interests, the same witnesses, and the same evidence. The
name of the plaintiff would constitute the only difference between the old trial and
the new. In our judgment there is not enough in a name to justify such action.
There is nothing sacred about processes or pleadings, their forms or contents.
Their sole purpose is to facilitate the application of justice to the rival claims of
contending parties. They were created, not to hinder and delay, but to facilitate
and promote, the administration of justice. They do not constitute the thing itself,
which courts are always striving to secure to litigants. They are designed as the
CIVIL PROCEDURE CASES Amendment (Rule 10)
means best adapted to obtain that thing. In other words, they are a means to an
end. When they lose the character of the one and become the other, the
administration of justice is at fault and courts are correspondingly remiss in the
performance of their obvious duty.
The error in this case is purely technical. To take advantage of it for other
purposes than to cure it, does not appeal to a fair sense of justice. Its
presentation as fatal to the plaintiff's case smacks of skill rather than right. A
litigation is not a game of technicalities in which one, more deeply schooled and
skilled in the subtle art of movement and position, entraps and destroys the other.
It is, rather, a contest in which each contending party fully and fairly lays before
the court the facts in issue and then, brushing aside as wholly trivial and
indecisive all imperfections of form and technicalities of procedure, asks that
justice be done upon the merits. Lawsuits, unlike duels, are not to be won by a
rapier's thrust. Technicality, when it deserts its proper office as an aid to justice
and becomes its great hindrance and chief enemy, deserves scant consideration
from courts. There should be no vested rights in technicalities. No litigant should
be permitted to challenge a record of a court ... for defect of form when his
substantial rights have not been prejudiced thereby. 9
We reiterate what this Court had stated in the more recent case of Shaffer vs.
Palma 10 that "(t)he courts should be liberal in allowing amendments to pleadings to avoid
multiplicity of suits and in order that t he real controversies between the parties are presented
and the case decided on the merits without unnecessary delay." 11 This rule applies with more
reason and with greater force when, as in the case at bar, the amendment sought to be made
refers to a mere matter of form and no substantial rights are prejudiced. 12
WHEREFORE, the Petition is hereby granted. The Orders dated September 5, 1980 and
October 21, 1980 are hereby annulled and the lower court is hereby ordered to admit the
Amended Complaint in conformity with the pronouncements in this Decision. No costs.
SO ORDERED.
2

G.R. No. L-46000 March 18, 1985
GLICERIO AGUSTIN (Deceased) as Administrator of the Intestate Estate of Susana
Agustin, petitioner-plaintiff-appellant, vs. LAUREANO BACALAN and the
PROVINCIAL SHERIFF OF CEBU, respondents-defendants-appellees.
The precursor of this case was a complaint for ejectment with damages filed by plaintiff-
appellant Agustin, as adininistrator of the Intestate Estate of Susana Agustin, against
defendant-appellee Bacalan, before the City Court of Cebu.
Bacalan is a lessee of a one-door ground floor space in a building owned by the late
Susana Agustin. Due to nonpayment of rentals despite repeated demands an action to
eject him was filed.
In his complaint, the plaintiff-appellant prayed that the defendant-appellee be ordered to
immediately vacate the place in question, to pay plaintiff-appellant the sum of P2,300.00
representing arrearages in rentals plus the corresponding rentals until he actually
vacates the place, attorney's fees, expenses, and costs.
In his answer, the defendant-appellee included a counter-claim alleging that the present
action was "clearly unfounded and devoid of merits, as it is tainted with malice and bad
faith on the part of the plaintiff for the obvious reason that plaintiff pretty well knows that
defendant does not have any rentals in arrears due to the estate of Susana Agustin, but
notwithstanding this knowledge, plaintiff filed the present action merely to annoy, vex,
embarrass and inconvenience the defendant." He stated, "That by virtue of the
unwarranted and malicious filing of this action by the plaintiff against the defendant, the
latter suffered, and will continue to suffer, actual and moral damages in the amount of no
less than P50,000.00; P10,000.00 in concept of exemplary damages. In addition,
defendant has been compelled to retain the services of undersigned counsel to resist
plaintiffs' reckless, malicious and frivolous claim and to protect and enforce his rights for
which he obligated himself to pay the further sum of P3,500.00 as attorney's fees."
The City Court of Cebu subsequently rendered judgment dismissing the counterclaim
and ordering the defendant to vacate the premises in question and to pay the plaintiff the
sum of P3,887.10 as unpaid back rentals and the sum of P150.00 as attorney's fees'
From this decision, the defendant filed an appeal with Branch Ill of the Court of First
Instance of Cebu. The case was designated as Civil Case No. R-12430.
Availing of Republic Act 6031 which does away with trials de novo in appeals before it,
the Court of First Instance rendered a decision, the dispositive portion of which reads:
CIVIL PROCEDURE CASES Amendment (Rule 10)
WHEREFORE, based on all the foregoing considerations, the appealed
judgment is hereby set aside. Judgment is hereby required in favor of the
defendant
1. Ordering the plaintiff to pay.
a) P10,000.00 as moral damages;
b) P5,000.00 as exemplary damages;
c) P1,000.00 as attorney's fees; and
2. With costs against plaintiff.
JUDGMENT REVERSED.
No appeal was taken by the plaintiff-appellant. The decision lapsed into finality and
became executory. A writ of execution was issued by virtue of which a notice to sell at
public auction real properties belonging to the estate of Susana Agustin was issued by
the Deputy Sheriff to satisfy judgment in the case. Plaintiff's counsel filed a motion for
reconsideration, confessing his fault and giving the reason why he failed to perfect the
appeal on time. The motion was denied.
Thereafter, with the aid of new counsel, the plaintiff-appellant filed a complaint with
Branch V, Court of First Instance of Cebu, against the defendant and the Deputy Sheriff
of Cebu for the declaration of the nullity of the above-cited decision of Branch III, Court of
First Instance of Cebu in the ejectment case on the ground that the exercise of its
appellate jurisdiction was null and void from the beginning for the following reasons:
(a) It grants relief in the total sum of P16,000.00 (exclusive of costs) distributed
thus:
P10,000.00 as moral damages
P5,000.00 as exemplary damages
P1,000.00 as attorney's fees
which is clearly beyond the jurisdiction of the City Court of Cebu; Section 88 of
the Judiciary Act of 1948, as amended by Rep. Acts Nos. 2613 and 3828, limits
the jurisdiction of the city courts in civil cases to P10,000.00 as the maximum
amount of the demand (exclusive of interest and costs);
3

(b) Moreover, said Decision (Annex "G") grants moral damages to the defendant
in the sum of P10,000.00 which constitutes a grave abuse of discretion
amounting to lack of jurisdiction, there being no evidence to support it and the
subject matter of the suit in Civil Case No. R-13504 being purely contractual
where moral damages are not recoverable.
A motion to dismiss was filed by the defendant on the grounds that the plaintiff has no
cause of action and that the court lacks jurisdiction to declare the nullity of a decision of
another branch of the Court of First Instance of Cebu.
While rejecting the second ground for the motion to dismiss, the court sustained the
defendant and ruled:
Clearly from a reading of the complaint, the plaintiff seeks the annulment of the decision
rendered by the Third Branch of this Court because the award exceeded the jurisdiction
amount cognizable by the City Court of Cebu and the said Branch III of this Court has no
jurisdiction to award the defendants herein (plaintiff in Civil Case No. 12430) an amount
more than P10,000.00;
It is the considered opinion of this Court that this allegation of the herein plaintiff cannot
be availed of as a ground for annulment of a judgment. It may perhaps, or at most, be a
ground for a petition for certiorari. But then, the remedy should be availed of within the
reglementary period to appeal. Nevertheless, even if the plaintiff did take his cause by
certiorari, just the same, it would have been futile....
xxx xxx xxx
In fine, this Court believes that the present complaint fails to allege a valid cause of
action as the same is only a clear attempt at utilizing the remedy for the annulment of the
judgment rendered by this Court in Civil Case No. 12430 to offset the adverse effects of
failure to appeal.
Plaintiff-appellant's motion for reconsideration was denied, prompting him to file an
appeal before the Court of Appeals, which, in a resolution, certified the same to us on the
ground that it involves pure questions of law.
We ruled in Macabingkil v. People's Homesite and Housing Corporation (72 SCRA 326,
citing Reyes v. Barretto-Datu, 94 Phil. 446, 448-449)-
CIVIL PROCEDURE CASES Amendment (Rule 10)
Under our rules of procedure, the validity of a judgment or order of the court, which has
become final and executory, may he attacked only by a direct action or proceeding to
annul the same, or by motion in another case if, in the latter case, the court had no
jurisdiction to enter the order or pronounce the judgment (section 44, Rule 39 of the
Rules of Court). The first proceeding is a direct attack against the order or judgment,
because it is not incidental to, but is the main object of, the proceeding. The other one is
the collateral attack, in which the purpose of the proceedings is to obtain some relief,
other than the vacation or setting aside of the judgment, and the attack is only an
incident. (I Freeman on Judgments, sec. 306, pages 607-608.) A third manner is by a
petition for relief from the judgment order as authorized by the statutes or by the rules,
such as those expressly provided in Rule 38 of the Rules of Court, but in this case it is to
be noted that the relief is granted by express statutory authority in the same action or
proceeding in which the judgment or order was entered ...
The question is thus poised, whether or not the present action for the annulment of the
judgment in the ejectment case is the proper remedy after it has become final and
executory.
To this procedural dilemma, the solution lies in the determination of the validity of
the judgment sought to be annulled, for against a void judgment, plaintiff-appellant's
recourse would be proper.
There is no question as to the validity of the court's decision with respect to the issue of
physical possession of property, the defendant-appellee's right to the same having been
upheld. However, the plaintiff-appellant assails the money judgment handed down by the
court which granted damages to the defendant-appellee. By reason thereof, he seeks the
declaration of the nullity of the entire judgment.
It is the plaintiff-appellant's contention that moral damages may not properly be awarded
in ejectment cases, the only recoverable damages therein being the reasonable
compensation for use and occupancy of the premises and the legal measure of damages
being the fair rental value of the property.
Plaintiff-appellant loses sight of the fact that the money judgment was awarded the
defendant-appellee in the concept of a counterclaim. A defending party may set up a
claim for money or any other relief which he may have against the opposing party in a
counterclaim (Section 6, Rule 6, Revised Rules of Court). And the court may, if
warranted, grant actual, moral, or exemplary damages as prayed for. The grant of moral
damages, in the case at bar, as a counterclaim, and not as damages for the unlawful
detention of property must be upheld. However, the amount thereof is another matter.
4

Plaintiff-appellant raises the issue of whether or not the Court of First Instance may, in an
appeal, award the defendant-appellee's counterclaim in an amount exceeding or beyond
the jurisdiction of the court of origin.
It is well-settled that a court has no jurisdiction to hear and determine a set-off or
counterclaim in excess of its jurisdiction (Section 5, Rule 5, Revised Rules of Court; Ago
v. Buslon, 10 SCRA 202). A counterclaim beyond the court's jurisdiction may only be
pleaded by way of defense, the purpose of which, however, is only to defeat or weaken
plaintiff's claim, but not to obtain affirmative relief (Section 5, Rule 5, Revised Rules of
Court). Nevertheless, the defendant-appellee, in the case at bar, set up his claim in
excess of the jurisdiction of the city court as a compulsory counterclaim. What is the legal
effect of such a move?
Pertinent to our disposition of this question is our pronouncement in the case of Hyson
Tan, et al. v. Filipinas Compania de Seguros, et al., (G.R. No. L-10096, March 23, 1956)
later adopted in Pindangan Agricultural Co., Inc. v. Dans (6 SCRA 14) and the later case
of One Heart Club, Inc. v. Court of Appeals (108 SCRA 416) to wit:
xxx xxx xxx
... An appellant who files his brief and submits his case to the Court of Appeals for
decision, without questioning the latter's jurisdiction until decision is rendered therein,
should be considered as having voluntarily waives so much of his claim as would exceed
the jurisdiction of said Appellate Court; for the reason that a contrary rule would
encourage the undesirable practice of appellants submitting their cases for decision to
the Court of Appeals in expectation of favorable judgment, but with intent of attacking its
jurisdiction should the decision be unfavorable. ...
Thus, by presenting his claim voluntarily before the City Court of Cebu, the defendant-
appellee submitted the same to the jurisdiction of the court. He became bound thereby.
The amount of P10,000.00 being the jurisdictional amount assigned the City Court of
Cebu, whose jurisdiction the defendant-appellee has invoked, he is thereby deemed to
have waived the excess of his claim beyond P10,000.00. It is as though the defendant-
appellee had set up a counterclaim in the amount of P10,000.00 only. May the Court of
First Instance then, on appeal, award defendant-appellee's counterclaim beyond that
amount?
The rule is that a counterclaim not presented in the inferior court cannot be entertained in
the Court of First Instance on appeal (Francisco, The Revised Rules of Court in the
Philippines, Vol. III, p. 26, citing the cases of Bernardo v. Genato, 11 Phil. 603 and Yu
CIVIL PROCEDURE CASES Amendment (Rule 10)
Lay v. Galmes, 40 Phil. 651). As explained in Yu Lay v. Galmes "Upon an appeal to a
court of first instance from the judgment of a justice of the peace, it is not possible,
without changing the purpose of the appeal, to alter the nature of the question raised by
the complaint and the answer in the original action. There can be no doubt, therefore, of
the scope of the doctrine laid down in the several decisions of the Court. Consequently,
We hold that, upon an appeal to the Court of First Instance, the plaintiff as well as the
defendant cannot file any pleading or allegation which raises a question essentially
distinct from that raised and decided in the justice of the peace court. "This rule was
reiterated in cases from Ng Cho Cio v. Ng Diong (1 SCRA 275) to Development Bank of
the Philippines v. Court of Appeals (116 SCRA 636).
Thus, the defendant-appellee's counterclaim beyond P10,000.00, the jurisdictional
amount of the city Court of Cebu, should be treated as having been deemed waived. It is
as though it has never been brought before trial court. It may not be entertained on
appeal.
The amount of judgment, therefore, obtained by the defendant-appellee on appeal,
cannot exceed the jurisdiction of the court in which the action began. Since the trial court
did not acquire jurisdiction over the defendant's counterclaim in excess of the
jurisdictional amount, the appellate court, likewise, acquired no jurisdiction over the same
by its decisions or otherwise. Appellate jurisdiction being not only a continuation of the
exercise of the same judicial power which has been executed in the court of original
jurisdiction, also presupposes that the original and appellate courts are capable of
participating in the exercise of the same judicial power (See 2 Am. Jur. 850; Stacey
Cheese Company v. R.E. Pipkin, Appt. 155 NC 394, 71 S.E. 442, 37 LRA 606) It is the
essential criterion of appellate jurisdiction that it revises and corrects the proceedings in
a cause already instituted, and does not create that cause (See 2 Am. Jur 850 citing
Marbury v. Madison, 1 Cranch US, 137, 2 L. ed. 60).
It is, of course, a well-settled rule that when court transcends the limits prescribed for it
by law and assumes to act where it has no jurisdiction, its adjudications will be utterly
void and of no effect either as an estoppel or otherwise (Planas v. Collector of Internal
Revenue, 3 SCRA 395; Parades v. Moya, 61 SCRA 526). The Court of First Instance, in
the case at bar, having awarded judgment in favor of the defendant-appellee in excess of
its appellate jurisdiction to the extent of P6,000.00 over the maximum allowable award of
P10,000.00, the excess is null and void and of no effect. Such being the case, an action
to declare the nullity of the award as brought by the plaintiff-appellant before the Court of
First Instance of Cebu, Branch V is a proper remedy.
5

The nullity of such portion of the decision in question, however, is not such as to affect
the conclusions reached by the court in the main case for ejectment. As held in Vda. de
Pamintuan v. Tiglao (53 Phil. 1) where the amount set up by the defendant was not
proper as a defense and it exceeded the inferior court's jurisdiction, it cannot be
entertained therein, but the court's jurisdiction over the main action will remain
unaffected. Consequently, the decision over the main action, in the case at bar, must
stand, best remembering that a counter-claim, by its very nature, is a cause of action
separate and independent from the plaintiff's claim against the defendant.
WHEREFORE, the decision of the Court of First Instance of Cebu, Branch III in Civil
Case No. R-12430 for ejectment is hereby DECLARED NULL AND VOID insofar as it
awards damages on the defendant-appellee's counterclaim in excess of P6,000.00
beyond its appellate jurisdiction. The decision in all other respects is AFFIRMED. The
order of the Court of First Instance of Cebu, Branch V dismissing Civil Case No. R-13462
for declaration of nullity of judgment with preliminary injunction is hereby MODIFIED,
Civil Case No. R-13462 is ordered DISMISSED insofar as the decision sought to be
annulled upholds the defendant's right to possession of the disputed property. The
defendant's counterclaim for damages is GRANTED to the extent of TEN THOUSAND
(P10,000.00) PESOS. The grant of SIX THOUSAND (P6,000.00) PESOS in excess of
such amount is hereby declared NULL and VOID, for having been awarded beyond the
jurisdiction of the court. SO ORDERED.
G.R. No. 131175 August 28, 2001
SPOUSES JOVITO VALENZUELA and NORMA VALENZUELA, SPOUSES ALFREDO
QUIAZON and BELLA GONZALES QUIAZON, SPOUSES EDUARDO DE GUZMAN
and JULIETA DE GUZMAN, DE GUZMAN DEVELOPMENT CORPORATION,
SKYFREIGHT BROKERAGE, INC., ATTY. ROMULO R. BOBADILA and WEB-HEGG
CONSTRUCTION RESOURCES, INCORPORATED, petitioners, vs. HONORABLE
COURT OF APPEALS and SPOUSES MANUEL T. DE GUIA and LETICIA MARIANO
DE GUIA and the REGISTER OF DEEDS OF PARAAQUE CITY, METRO
MANILA, respondents.
In resolving the propriety of the amendment of the complaint in the present case, which
motion to amend was filed after the lapse of fifteen years from the filing of the initiatory
pleading sought to be amended, this Court painstakingly considered not only the peculiar
circumstances obtaining, but also accorded premium to the legal truism that "adjective
law is not the counterfoil of substantive law" and that the rules of procedure must not be
perverted into engines of injustice.1
CIVIL PROCEDURE CASES Amendment (Rule 10)
Sought to be reversed in the instant petition for review on certiorari is the decision 2 of the
Court of Appeals dated 15 August 1997 in C.A. G.R. SP. No. 44185, which nullified and
set aside the orders dated 11 November 1996 3and 06 February 1997 of the Regional
Trial Court (RTC) of Pasay City, Branch 231, in Civil Case No. PQ-9412-P. The subject
orders of the RTC denied private respondents' motion to admit amended complaint dated
18 March 1997.
Similarly impugned is the resolution4 of the Court of Appeals dated 24 October 1997,
denying private respondents' motion for reconsideration.
The factual antecedents and proceedings unfold.
On 10 September 1981, herein private respondents spouses Manuel and Leticia De Guia
filed a complaint for specific performance and damages docketed as Civil Case No. PQ-
9412-P5 against herein petitioners spouses Jovito and Norma Valenzuela before the then
Court of First Instance of Rizal in Pasay City. The complaint prayed, among others, that
the Spouses Valenzuela be ordered to execute in favor of private respondents the
necessary deed of sale covering the two (2) parcels of land allegedly subject of a
contract to sell between said parties.
On 16 September 1981, private respondents spouses De Guia, upon discovering that the
subject real properties were sold and transferred by the spouses Valenzuela to herein
co-petitioners spouses Alfredo and Bella Gonzales Quiazon, filed Civil Case No. PQ
9432-P6 for annulment of sale, cancellation of title and damages, against spouses
Valenzuela, spouses Quiazon, and the Register of Deeds of Pasay City. In the complaint,
private respondents spouses De Guia prayed specifically for the annulment of the deed
of sale executed by the spouses Valenzuela in favor of the spouses Quiazon,
cancellation of TCT Nos. 39396 and 39397 in the name of spouses Quiazon, and the
reinstatement of TCT No. 39142 in the name of the spouses Valenzuela, or in the
alternative, the reconveyance of the subject properties by the spouses Quiazon to
spouses Valenzuela.
On 13 October 1981, private respondents spouses De Guia amended their complaint in
Civil Case No. PQ-9432-P impleading Webb-Hegg Construction Resources, Inc. as
additional defendant.
On 19 January 1983, spouses De Guia filed in Civil Case No. PQ-9432-P a Motion to
Admit Second Amended Complaint impleading as additional defendant Gerardo
Villacorta. Prior to the resolution of such pending motion, Civil Case No. PQ-9432-P was
transferred to the Regional Trial Court of Makati, Branch 133 pursuant to the Judiciary
6

Reorganization Law (B.P. Blg. 129). As a result of the transfer of the case, Civil Case No.
PQ-9432-P was redocketed as Civil Case No. 2723.
On 20 May 1983, the RTC of Makati, Branch 133 issued an order admitting the second
amended complaint. Upon motion of the defendants therein, however, Civil Case No.
2723 was returned to. RTC-Pasay, where herein private respondents spouses De Guia
filed a motion to admit third amended complaint seeking to implead spouses De
Guzman, De Guzman Development Corporation, Skyfreight Brokerage, Inc. and Lawyer
Romeo Bobadilla, as additional defendants.
On 30 May 1984, the RTC-Pasay issued an omnibus order 7 denying the motion to admit
the third amended complaint and declaring as automatically vacated the order of RTC-
Makati, Branch 133, which admitted the second amended complaint. Upon denial of their
motion for reconsideration, private respondents spouses De Guia then filed a petition for
certiorari and prohibition before the appellate court, docketed as CA G.R. SP. No. 04518.
On 27 March 1990, after a preliminary hearing on the affirmative defenses of pendency
of another action and splitting a cause of action, the lower court issued an order
dismissing the complaint in Civil Case No. PQ-9432-P. Private respondents spouses De
Guia appealed the dismissal of said case before the Court of Appeals which on 30 March
1994, affirmed the dismissal order of the lower court. Aggrieved, private respondents
spouses De Guia filed a petition before the Supreme Court assailing the decision of the
Court of Appeals.
In a Resolution dated 24 July 1995, the High Court dismissed the petition for having
been filed beyond the reglementary period. Private respondents moved to reconsider,
which motion the Supreme Court denied via a resolution dated 30 September 1995.
Upon motion of spouses Quiazon in Civil Case Nos. PQ-9412-P and PQ-9432-P, the
lower court issued an order dated 17 January 1996 directing the cancellation of the
Notice of Lis Pendens under Entry No. 81-11596 and Entry No. 81-12186 and the
Adverse Claim under Entry No. 81-11601 on TCT Nos. 39386 and 39397 in the name of
spouses Quiazon. On 02 February 1996, private respondents sought to reconsider the
trial court's order.
On 18 March 1996, private respondents filed a motion to admit amended complaint in
Civil Case No. PQ-9412-P. Prior to the resolution of the two pending motions, private
respondents filed a motion for the inhibition of the presiding judge of Branch 117, RTC-
Pasay. In an order dated 17 April 1996, the court granted the motion for inhibition
CIVIL PROCEDURE CASES Amendment (Rule 10)
resulting in the re-raffle of Civil Case No. PQ-9412-P to Branch 231, presided by Judge
Cesar Z. Ylagan.
In an order dated 11 November 1996, Judge Ylagan denied the motion to admit
amended complaint prompting herein private respondents spouses De Guia to file a
motion for reconsideration which the lower court denied.
Private respondents elevated the lower court's order denying the motion to admit
amended complaint to the Court of Appeals.
On 15 August 1997, the Court of Appeals rendered the assailed decision the decretal
portion of which declares:
"WHEREFORE, the instant petition for certiorari and mandamus is hereby
GRANTED. Consequently, the orders dated November 11, 1996 and February 6,
1997 are SET ASIDE and respondent is ordered to admit petitioners' amended
complaint dated March 18,1997."
On 05 November 1997, the RTC-Pasay, Branch 231 issued an order 8 admitting the
amended complaint, pursuant to the decision of the Court of Appeals dated 15 August
1997. Herein petitioners filed with the lower court a manifestation with motion to
reconsider9 to the effect that they would file a "petition for review on certiorari" before the
Supreme Court, to which manifestation private respondents filed an opposition.
Petitioners then filed a reply to the opposition after which the lower court, in an order
dated 23 January, decreed "that the admission of the amended complaint and service of
summons are hereby held in abeyance until after the Supreme Court has resolved the
case before it which has effectively placed this court on notice."
On 17 December 1997, herein petitioners filed the instant petition where this Court is
tasked in the main to resolve the propriety of the amendment of the complaint in Civil
Case No. PQ-9412-P. Petitioners argue, among others, that the amendment should not
be allowed inasmuch as the introduction of amendments to the complaint in Civil Case
No. PQ-9412-P would, in effect, "radically and substantially change the cause of action
and theory" of the case.
The Court sanctions the amendment of the complaint and resolves to strike down the
petition. At the this point, a review of the pertinent provisions regarding amendments is in
order. Section 1, Rule 10 of the 1997 Rules of Civil Procedure explicitly provides:
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"SECTION 1. Amendment in general. - Pleadings may be amended by adding or
striking out an allegation or the name of any party, or by correcting a mistake in
the name of a party or a mistaken or inadequate allegation or description in any
other respect, so that the actual merits of the controversy may speedily be
determined, without regard to technicalities, and in the most expeditious and
inexpensive manner." (emphasis ours)
Equally important is Section 3, Rule 10 of the Rules:
"SECTION 3. Amendments by leave of court. - Except as provided in the next
preceding section, substantial amendments may be made only upon leave of
court. But such leave may be refused if it appears to the court that the motion
was made with intent to delay. Orders of the court upon the matters provided in
this section shall be made upon motion filed in court, and after notice to the
adverse party, and an opportunity to be heard."
Petitioners contend that the foregoing provisions of the 1997 Rules of Civil Procedure
cannot be applied in the case at bar. We do not agree. Elementary is the rule in this
jurisdiction that one does not have a vested right in procedural rules, thus:
"Statutes regulating the procedure of courts will be considered as applicable to
actions pending and undetermined at the time of their passage. Procedural laws
are retroactive in that sense and to that extent. The fact that procedural statutes
may somehow affect the litigants' rights may not preclude their retroactive
application to pending actions. The retroactive application of procedural laws is
not violative of any right of a person who may feel that he is adversely affected.
Nor is the retroactive application of procedural statutes constitutionally
objectionable. The reason is that as a general rule, no vested right may attach to,
nor arise from procedural laws. It has been held that "a person has no vested
right in any particular remedy, and a litigant cannot insist on the application to the
trial of his case, whether civil or criminal, of any other than the existing rules of
procedure."10 (emphasis ours)
Interestingly, Section 3, Rule 10 of the 1997 Rules of Civil Procedure 11 amended the
former rule12 in such manner that the phrase "or that the cause of action or defense is
substantially altered" was stricken-off and not retained in the new rules. The clear import
of such amendment in Section 3, Rule 10 is that under the new rules, "the amendment
may (now) substantially alter the cause of action or defense." 13 This should only be true,
however, when despite a substantial change or alteration in the cause of action or
defense, the amendments sought to be made shall serve the higher interests of
CIVIL PROCEDURE CASES Amendment (Rule 10)
substantial justice, and prevent delay and equally promote the laudable objective of the
rules which is to secure a "just, speedy and inexpensive disposition of every action and
proceeding.
Thus, granting arguendo that the amendment of the complaint in Civil Case No. PQ-
9432-P would substantially alter or change the cause of action or defense in said
controversy, this Court nonetheless holds that in the higher interest of substantial justice,
the introduction of amendments to the complaint is apropos at this particular instance to
forestall further delay in the resolution of the actual merits of the parties' respective
claims and defenses. To reiterate, the Rules of Court seek to eliminate undue reliance on
technical rules and to make litigation as inexpensive, as practicable and as convenient
as can be done.14 Rules of procedure, after all, are but tools designed to facilitate the
attainment of justice, such that when rigid application of the rules tends to frustrate rather
than promote substantial justice, the Supreme Court is empowered to suspend their
operation.15 This Court will not hesitate to set aside technicalities in favor of what is fair
and just.16
As the records would readily reveal, the instant case Civil Case No. PQ-9412-P
has already dragged and suffered protracted delay for a span of twenty years, borne by
countless legal skirmishes between the party litigants involving principally entanglement
on technical niceties and procedural rules. In fact, the procedural incidents and
interlocutory matters relating to this controversy, to wit, Civil Case No. PQ-9412-P and its
related case Civil Case No. PQ-9432-P, have reached no less than the portals of this
Court at least twice first, as to the specific issue of the propriety of admission of a third
amended complaint in Civil Case No. PQ-9432 and second, as to the particular query on
the validity of the dismissal of Civil Case No. PQ-9432-P, on the ground of litis pendentia.
By and large, due to the multifarious procedural incidents involving these two suits, albeit
issues concededly not to be outrightly dismissed as less important, the actual merits of
the controversy have yet to reach their full adjudication, resolution and determination.
Under these circumstances, particularly considering the dismissal of Civil Case No. PQ-
9432-P on ground of litis pendentia, the disallowance of the amendment of the complaint
in Civil Case No. PQ-9412-P would, to our mind, necessarily result in an even greater
delay in the disposition and adjudication of the actual merits of the case, which run
counter to the hallowed office and cardinal objective of the Rules to provide, at each
possible instance, an expeditious and full resolution of issues involving the respective
rights and liabilities of the parties under substantive law.
True enough, the delay that has so characterized the adjudication of the merits of this
case which original complaint was filed practically two decades ago has not
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escaped the attention of this Court. Thus, in the interest of substantial justice, this Court
allows the introduction of amendments to the complaint in Civil Case No. PQ-9412-P so
as to afford the party-litigants the full and genuine opportunity to substantiate their
respective claims and defenses and for the trial court to finally resolve the matters
relating to the merits of the case.
Besides, the defendants sought to be impleaded in Civil Case No. PQ-9412-P are not left
without justifiable recourse. To this end, the law in no uncertain terms provide for the
necessary legal implements and the adoption of effective means and defenses
sanctioned by the Rules, wherein both parties in the controversy may very well advance
and protect their respective legal interests. By sanctioning the introduction of
amendments to the complaint, the issues shall at last be viewed, so to speak, in the clear
light of day and substantial matters therein shall not anymore be lost in the abyss of
technicalities and procedural jargon.
On this matter, the discourse of the Court of Appeals is elucidating:
"With the dismissal of Civil Case No. PQ-9432-P in which petitioners (herein
private respondents spouses De Guia) seek the annulment of the sale made by
spouses Valenzuela in favor of spouses Quiazon, complete relief could be
obtained by petitioners only by the admission of the amended complaint. Without
the amendment, a favorable judgment for petitioners would be meaningless, if
not futile, as the properties covered by the contract to sell which they seek to
enforce had already been sold to spouses Quiazon, who are among those
sought to be impleaded as additional defendants in the amended complaint.
"x x x The inquiry should be as to whether or not the amendment is necessary to
enable the parties, particularly petitioners, to obtain complete relief in just one
proceeding. As above stated, the non-inclusion of spouses Quiazon and others
who may have acquired rights or interest in the properties in question will render
the relief originally sought in Civil Case No. PQ-9412-P incomplete without the
sale or transfer to spouses Quiazon being nullified; hence, the need for the
amendment. x x x
"x x x Needless to state, the court is of the considered opinion that admission of
the amended complaint is not only necessary to afford complete relief to the
parties; it will also forestall any further need to institute other actions or
proceedings arising from the transaction subject matter of Civil Case No. PQ-
9412-P. x x x"
CIVIL PROCEDURE CASES Amendment (Rule 10)
Inasmuch as herein private respondents, in its amended complaint, likewise pray for
reconveyance of the real property, considering that the subject parcels of land were
transferred in the name of spouses Quiazon who notably were not impleaded in the
original complaint in Civil Case No. PQ-9412-P, it bears to stress that "owners of property
over which reconveyance is asserted are indispensable parties without whom no relief is
available and without whom the court can render no valid judgment." 17
Additionally, petitioners stubbornly maintain that the principle of res judicata, specifically
the doctrine of conclusiveness of judgment, should find application in the instant case so
as to preclude the court from resolving anew the propriety of the amendment in Civil
Case No. PQ-9412-P, which issue, according to petitioner, was previously passed upon
and determined in Civil Case No. PQ-9432-P.
The contention is without basis. Res judicata, either in the concept of bar by former
judgment or conclusiveness of judgment, cannot be applied to the present case.
In Vda. De Cruzo vs. Carriaga, Jr.,18 this Court speaking through Mr. Justice Florenz
Regalado, inked an enlightening discourse on the subject:
"The doctrine of res judicata thus lays down two main rules which may be stated
as follows: 1) The judgment or decree of a court of competent jurisdiction on the
merits concludes the parties and their privies to the litigation and constitutes a
bar to a new action or suit involving the same cause of action either before the
same or any other tribunal; and 2) Any right, fact, or matter in issue directly
adjudicated or necessarily involved in the determination of an action before a
competent court in which a judgment or decree is rendered on the merits is
conclusively settled by the judgment therein and cannot again be litigated
between the parties and their privies whether or not the claim or demand,
purpose or subject matter of the two suits is the same. These two main rules
mark the distinction between the principles governing the two typical cases in
which a judgment may operate as evidence. In speaking of these cases, the first
general rule above stated, and which corresponds to the aforequoted paragraph
(b) of Section 49, is referred to as 'bar by former judgment' while the second
general rule, which is embodied in paragraph (c) of the same section, is known
as 'conclusiveness of judgment.'
"Stated otherwise, when we speak of res judicata in its concept as a 'bar by
former judgment.' the judgment rendered in the first case is an absolute bar to
the subsequent action wince said judgment is conclusive not only as to the
matters offered and received to sustain that judgment but also as to any other
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matter which might have been offered for that purpose and which could have
been adjudged therein. This is the concept in which the term res judicata is more
commonly and generally used and in which it is understood as the bar by prior
judgment constituting a ground for a motion to dismiss in civil cases.
"On the other hand, the less familiar concept or less terminological usage of res
judicata as a rule on conclusiveness of judgment refers to the situation where the
judgment in the prior action operates as an estoppel only as to the matters
actually determined therein or which were necessarily included therein.
Consequently, since other admissible and relevant matters which the parties in
the second action could properly offer are not concluded by the said judgment,
the same is not a bar to or a ground for dismissal of the second action.
"At bottom, the other elements being virtually the same, the fundamental
difference between the rule of res judicata as a bar by former judgment and as
merely a rule on the conclusiveness of judgment is that, in the first, there is an
identity in the cause of action in both cases involved whereas, in the second, the
cause of action in the first case is different from that in the second case."
(emphasis ours)
Proceeding from the foregoing disquisition, the principle of res judicata, requires the
concurrence of the following requisites:19
"a) The former judgment or order must be final;
"b) It must be a judgment or order on the merits, that is, it was rendered after a
consideration of the evidence or stipulations submitted by the parties at the trial
of the case;
"c) It must have been rendered by a court having jurisdiction over the subject
matter and the parties; and
"d) There must be, between the first and second actions, identity of parties, of
subject matter and of cause of action. This requisite is satisfied if the two actions
are substantially between the same parties." (emphasis ours)
CIVIL PROCEDURE CASES Amendment (Rule 10)
For want of the second requisite, to wit, that the judgment must be rendered on the
merits, the instant case is thus removed from the operation of the principle of res
judicata. Stated differently, if the judgment is not on the merits, it cannot be considered
as a conclusive adjudication of the controversy. Consequently, a judgment dismissing an
action for want of jurisdiction, or because of the pendency of another action between the
same parties and for the same cause, or a judgment absolving a defendant because he
was not served with summons, or a dismissal on the ground of misjoinder cannot operate
as res adjudicata on the merits.20
To this end, it must be noted that the dismissal of Civil Case No. PQ-9432-P was due
to litis pendentia or the pendency of another action, obviously referring to Civil Case No.
PQ-9412-P. Applying the foregoing doctrines, the judgment dismissing Civil Case No.
PQ-9432-P, on the ground of litis pendentia, cannot be considered an adjudication on the
merits.21 Clearly then, res judicata cannot apply.
WHEREFORE, premises considered, the assailed decision of the Court of Appeals in
C.A. G.R. SP. No. 44185 is AFFIRMED and the instant petition is DENIED for lack of
merit. Accordingly, the Regional Trial Court of Pasay City Branch 231, is hereby ordered
to admit herein private respondents' amended complaint in Civil Case No. PQ-9412-P, to
issue the necessary summons to all impleaded defendants therein and to resolve the
case with dispatch.
SO ORDERED.
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