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RepublicofthePhilippines
SUPREMECOURT
Manila

SECONDDIVISION

G.R.No.189496February1,2012

D.M.FERRER&ASSOCIATESCORPORATION,Petitioner,
vs.
UNIVERSITYOFSANTOTOMAS,Respondent.

DECISION

SERENO,J.:

BeforeusisaPetitionforReviewonCertiorariunderRule45oftheRevisedRulesofCourt.Petitionerassailsthe
CourtofAppeals(CA)Resolution1promulgatedon26June2009dismissingtheformersPetitionforCertiorari,
andtheResolution2dated3September2009denyingthesubsequentMotionforReconsideration.

Thefactsareundisputed:

On 25 November 2005, petitioner and University of Santo Tomas Hospital, Inc. (USTHI) entered into a Project
Management Contract for the renovation of the 4th and 5th floors of the Clinical Division Building, Nurse Call
RoomandMedicalRecords,MedicalArtsTower,DiagnosticTreatmentBuildingandPayDivisionBuilding.

On various dates, petitioner demanded from USTHI the payment of the construction costs amounting to
P17,558,479.39.However,on16April2008,theUniversityofSantoTomas(UST),throughitsrector,Fr.Rolando
V.DelaRosa,wrotealetterinformingpetitionerthatitsclaimforpaymenthadbeendenied,becausetheProject
ManagementContractwaswithouttherequiredpriorapprovaloftheboardoftrustees.Thus,on23May2008,
petitionerfiledaComplaint3forsumofmoney,breachofcontractanddamagesagainsthereinrespondentUST
andUSTHIwhenthelatterfailedtopaypetitionerdespiterepeateddemands.

In impleading respondent UST, petitioner alleged that the former took complete control over the business and
operationofUSTHI,aswellasthecompletionoftheconstructionproject.

It also pointed out that the Articles of Incorporation of USTHI provided that, upon dissolution, all of the latters
assetsshallbetransferredwithoutanyconsiderationandshallinuretothebenefitofUST.ItappearsthatUSTHI
passedaResolutionon10January2008dissolvingthecorporationbyshorteningitscorporatetermofexistence
from16March2057to31May2008.

Finally,petitionerallegedthatrespondent,throughitsrector,Fr.DelaRosa,O.P.,verballyassuredtheformerof
thepaymentofUSTHIsoutstandingobligations.

Thus, petitioner posited in part that UST may be impleaded in the case under the doctrine of "piercing the
corporate veil," wherein respondent UST and USTHI would be considered to be acting as one corporate entity,
andUSTmaybeheldliablefortheallegedobligationsduetopetitioner.

Subsequently,respondentfileditsMotiontoDismissdated12June2008.4ItallegedthattheComplaintfailedto
stateacauseofaction,andthattheclaimwasunenforceableundertheprovisionsoftheStatuteofFrauds.

On4August2008,JudgeBernelitoR.FernandezofBranch97oftheRegionalTrialCourt(RTC)ofQuezonCity
grantedthemotionanddismissedtheComplaintinsofarasrespondentUSTwasconcerned.5

First,basingitsfindingsonthedocumentssubmittedinsupportoftheComplaint,theRTCheldthatrespondent
wasnotarealpartyininterest,andthatitwasnotprivytothecontractexecutedbetweenUSTHIandpetitioner.
Second,thecourtpointedoutthattheallegedverbalassurancesofFr.DelaRosashouldhavebeeninwritingto
maketheseassurancesbindinganddemandable.
PetitionersoughtareconsiderationoftheRTCOrderandassertedthatonlyallegationsoftheComplaint,andnot
the attached documents, should have been the basis of the trial courts ruling, consistent with the rule that the
causeofactioncanbedeterminedonlyfromthefactsallegedintheComplaint.ItalsoinsistedthattheStatuteof
Fraudswasinapplicable,sinceUSTHIsobligationhadalreadybeenpartiallyexecuted.6

On 5 October 2008, petitioner filed an Urgent Motion for Voluntary Inhibition7 on the ground that Judge
FernandezwasanalumnusofrespondentUST.

Thereafter, Judge Fernandez issued an Order8 inhibiting himself from the case, which was consequently re
raffledtoBranch76presidedbyJudgeAlexanderS.Balut.

On16April2009,JudgeBalutdismissedtheMotionforReconsiderationfiledbypetitioner,9upholdingtheinitial
findings of Judge Fernandez declaring that respondent UST was not a real partyininterest, and that Fr. Dela
Rosasallegedassurancesofpaymentwereunenforceable.

Subsequently,petitionerfiledaPetitionforCertiorariunderRule65withtheCA.10Petitionerallegedthatthetrial
court committed grave abuse of discretion when it granted respondents Motion to Dismiss on the basis of the
documents submitted in support of the Complaint, and not solely on the allegations stated therein. Petitioner
pointedoutthattheallegationsraisedquestionsoffactandlaw,whichshouldhavebeenthreshedoutduringtrial,
whenbothpartieswouldhavebeengiventhechancetopresentevidencesupportingtheirrespectiveallegations.

However,on26June2009,theCAissuedtheassailedResolutionanddismissedthePetitiononthegroundthat
apetitionunderRule65isthewrongremedytoquestiontheRTCsOrderthatcompletelydisposesofthecase.
Instead,petitionershouldhaveavaileditselfofanappealunderRule41oftheRulesofCourt.

Petitioner moved for a reconsideration of the Resolution.11 It pointed out that the present case falls under the
enumerated exceptions of Rule 41, in particular, while the main case is still pending, no appeal may be made
fromajudgmentorfinalorderfororagainstoneormoreofseveralpartiesorinseparateclaims,counterclaims,
crossclaimsandthirdpartycomplaints.

On 3 September 2009, the CA denied the Motion for Reconsideration through its second assailed Resolution,
holding that the motion raised no new issues or substantial grounds that would merit the reconsideration of the
court.

HencethisPetition.

Petitioner raises two grounds in the present Petition: first, whether the CA erred in dismissing the Petition for
CertioraribyfailingtoconsidertheexceptioninSec.1(g)ofRule41oftheRulesofCourtsecond,whetherthe
trialcourtcommittedgraveabuseofdiscretionwhenitheldthattheComplaintstatednocauseofaction.

Weruleforpetitioner.

RespondentinsiststhatpetitionershouldhavefirstfiledanoticeofappealbeforetheRTC,andtheappealshould
havebeensubsequentlydeniedbeforerecoursetotheCAwasmade.Thiscontentionholdsnowater.

In JanDec Construction Corp. v. Court of Appeals,12 we held that a petition for certiorari under Rule 65 is the
proper remedy to question the dismissal of an action against one of the parties while the main case is still
pending.ThisisthegeneralruleinaccordancewithRule41,Sec.1(g).Inthatcase,ruledthus:

Evidently,theCAerredindismissingpetitioner'spetitionforcertiorarifromtheOrderoftheRTCdismissingthe
complaintagainstrespondent.WhileSection1,Rule41ofthe1997RulesofCivilProcedurestatesthatanappeal
maybetakenonlyfromafinalorderthatcompletelydisposesofthecase,italsoprovidesseveralexceptionsto
therule,towit:(a)anorderdenyingamotionfornewtrialorreconsideration(b)anorderdenyingapetitionfor
relief or any similar motion seeking relief from judgment (c) an interlocutory order (d) an order disallowing or
dismissing an appeal (e) an order denying a motion to set aside a judgment by consent, confession or
compromise on the ground of fraud, mistake or duress, or any other ground vitiating consent (f) an order of
execution (g) a judgment or final order for or against one or more of several parties or in separate claims,
counterclaims,crossclaimsandthirdpartycomplaints,whilethemaincaseispending,unlessthecourtallowsan
appeal therefrom and (h) an order dismissing an action without prejudice. In the foregoing instances, the
aggrievedpartymayfileanappropriatespecialcivilactionforcertiorariunderRule65.

In the present case, the Order of the RTC dismissing the complaint against respondent is a final order
because it terminates the proceedings against respondent but it falls within exception (g) of the Rule
since the case involves two defendants, Intermodal and herein respondent and the complaint against
Intermodalisstillpending.Thus,theremedyofaspecialcivilactionforcertiorariavailedofbypetitioner
beforetheCAwasproperandtheCAerredindismissingthepetition.(Emphasissupplied)
Clearly,inthecaseatbar,theCAalsoerredwhenitdismissedthePetitionfiledbeforeit.

Anent the second issue, we also agree with petitioner that the Complaint states a cause of action against
respondentUST.InAbacanv.NorthwesternUniversity,Inc.,13wesaid:

Itissettledthattheexistenceofacauseofactionisdeterminedbytheallegationsinthecomplaint. Inresolvinga
1 w p h i1

motiontodismissbasedonthefailuretostateacauseofaction,onlythefactsallegedinthecomplaintmustbe
considered.Thetestiswhetherthecourtcanrenderavalidjudgmentonthecomplaintbasedonthefactsalleged
and the prayer asked for. Indeed, the elementary test for failure to state a cause of action is whether the
complaint alleges facts which if true would justify the relief demanded. Only ultimate facts and not legal
conclusions or evidentiary facts, which should not be alleged in the complaint in the first place, are
consideredforpurposesofapplyingthetest.(Emphasissupplied)

While it is admitted that respondent UST was not a party to the contract, petitioner posits that the former is
neverthelessliablefortheconstructioncosts.Insupportofitsposition,petitionerallegedthat(1)USTandUSTHI
are one and the same corporation (2) UST stands to benefit from the assets of USTHI by virtue of the latters
ArticlesofIncorporation(3)respondentcontrolsthebusinessofUSTHIand(4)USTsofficialshaveperformed
actsthatmaybeconstruedasanacknowledgementofrespondentsliabilitytopetitioner.

Obviously,theseissueswouldhavebeenbestresolvedduringtrial.TheRTCthereforecommittedgraveabuseof
discretionwhenitdismissedthecaseagainstrespondentforlackofcauseofaction.Thetrialcourtreliedonthe
contract executed between petitioner and USTHI, when the court should have instead considered merely the
allegationsstatedintheComplaint.

WHEREFORE, in view of the foregoing, the Petition is GRANTED. Branch 76 of the Regional Trial Court of
QuezonCityisherebyorderedtoREINSTATErespondentUniversityofSantoTomasasadefendantinC.C.No.
0862635.

SOORDERED.

MARIALOURDESP.A.SERENO
AssociateJustice

WECONCUR:

ANTONIOT.CARPIO
AssociateJustice
Chairperson

ARTUROD.BRION DIOSDADOM.PERALTA*
AssociateJustice AssociateJustice

JOSEPORTUGALPEREZ
AssociateJustice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was
assignedtothewriteroftheopinionoftheCourtsDivision.

ANTONIOT.CARPIO
AssociateJustice
Chairperson,SecondDivision

CERTIFICATION

PursuanttoSection13,ArticleVIIIoftheConstitutionandtheDivisionChairpersonsAttestation,Icertifythatthe
conclusionsintheaboveDecisionhadbeenreachedinconsultationbeforethecasewasassignedtothewriterof
theopinionoftheCourtsDivision.

RENATOC.CORONA
ChiefJustice

Footnotes
 *AdditionalmemberinlieuofAssociateJusticeBienvenidoL.Reyes,whorecusedhimselffromthecase
duetoprioractionintheCourtofAppeals,perRaffledated30January2012.
1PennedbyAssociateJusticeMarleneGonzalesSison,withAssociateJusticesBienvenidoL.Reyesand
IsaiasP.Dicdicanconcurringrollo,pp.3436.

2Id.at3839.

3Id.at4051.

4Id.at108115.

5Id.at145147.

6Id.at148155

7Id.at178182.

8Id.at183.

9Id.at197198.

10Id.at199217.

11Id.at223230.

12517Phil.96,105(2006).

13495Phil.123,133(2005).

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