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RULES OF COURT Civil Actions G.R. No.

111077 July 14, 1994

Pursuant to the provisions of section 5 (5) of Article VIII of the Constitution, the Ordinary Civil Actions VIRGILIO B. GESMUNDO and EDNA C. GESMUNDO, petitioners,
Supreme Court hereby adopts and promulgates the following rules concerning the vs.
protection and enforcement of constitutional rights, pleading, practice and JRB REALTY CORPORATION, JAIME R. BLANCO, and HON. OSCAR B. PIMENTEL, in
procedure in all courts, the admission to the practice of law, the Integrated Bar, and his capacity as Presiding Judge of Branch 148 of the Regional Trial Court of Makati,
legal assistance to the underprivileged: RULE 2 respondents.

Cause of Action Virgilio B. Gesmundo on his own and wife's behalf.

RULE 1 Section 1. Ordinary civil actions, basis of. Every ordinary civil action must be Blanco Law Firm for private respondents.
based on a cause of action. (n)
General Provisions
Section 2. Cause of action, defined. A cause of action is the act or omission by
Section 1. Title of the Rules. These Rule shall be known and cited as the Rules of which a party violates a right of another. (n) MENDOZA, J.:
Court. (1)
Section 3. One suit for a single cause of action. A party may not institute more This is a petition for review on certiorari of the order 1 of the Regional Trial Court of
Section 2. In what courts applicable. These Rules shall apply in all the courts, than one suit for a single cause of action. (3a) Makati (Branch 148), dismissing on the ground of improper venue a complaint
except as otherwise provided by the Supreme Court. (n) which the spouses Virgilio B. Gesmundo and Edna C. Gesmundo filed against the JRB
Section 4. Splitting a single cause of action; effect of. If two or more suits are Realty Corporation and Jaime R. Blanco. 2
Section 3. Cases governed. These Rules shall govern the procedure to be instituted on the basis of the same cause of action, the filing of one or a judgment
observed in actions, civil or criminal and special proceedings. upon the merits in any one is available as a ground for the dismissal of the others. The facts of the case are as follows:
(4a)
(a) A civil action is one by which a party sues another for the enforcement or On April 7, 1980, petitioner Virgilio B. Gesmundo, as lessee, and respondent JRB
protection of a right, or the prevention or redress of a wrong, (1a, R2) Section 5. Joinder of causes of action. A party may in one pleading assert, in the Realty Corporation, represented by its president, respondent Jaime R. Blanco, as
alternative or otherwise, as many causes of action as he may have against an lessor, entered into a lease contract covering Room 116, Blanco Suites, at 246
A civil action may either be ordinary or special. Both are governed by the rules for opposing party, subject to the following conditions: Villaruel St., Pasay City, the parties stipulating that the
ordinary civil actions, subject to the specific rules prescribed for a special civil
action. (n) (a) The party joining the causes of action shall comply with the rules on venue for all suits, whether for branch hereof or damages or any cause between the
joinder of parties; LESSOR and the LESSEE, and persons claiming under each, being the courts of
(b) A criminal action is one by which the State prosecutes a person for an act appropriate jurisdiction in Pasay City. . .
or omission punishable by law. (n) (b) The joinder shall not include special civil actions or actions governed by
special rules; On March 19, 1993, petitioners filed the complaint below for damages against
(c) A special proceeding is a remedy by which a party seeks to establish a respondents. They alleged that from April 8, 1980 to November 1992, they had
status, a right, or a particular fact. (2a, R2) (c) Where the causes of action are between the same parties but pertain to been in possession of the leased premises; that on or about November 9, 1992, they
different venues or jurisdictions, the joinder may be allowed in the Regional Trial were; "shocked and stunned" upon receiving respondents' letter terminating their
Section 4. In what case not applicable. These Rules shall not apply to election Court provided one of the causes of action falls within the jurisdiction of said court lease effective November 30, 1992; that no other tenant in the building had been
cases, land registration, cadastral, naturalization and insolvency proceedings, and and the venue lies therein; and sent a similar letter; that during their conversation over the telephone, respondent
other cases not herein provided for, except by analogy or in a suppletory character Blanco told petitioner Virgilio B. Gesmundo that since the Corporation for which the
and whenever practicable and convenient. (R143a) (d) Where the claims in all the causes action are principally for recovery of latter works did not pay him (Blanco) his retainer fees, he did not want petitioners
money, the aggregate amount claimed shall be the test of jurisdiction. (5a) in any of his apartment units; that on November 18, 1992, petitioners sent
Section 5. Commencement of action. A civil action is commenced by the filing of respondents a letter asking for reconsideration of the termination of their lease;
the original complaint in court. If an additional defendant is impleaded in a later Section 6. Misjoinder of causes of action. Misjoinder of causes of action is not a that on November 27, 1992, respondents sent petitioners a statement of accounts
pleading, the action is commenced with regard to him on the dated of the filing of ground for dismissal of an action. A misjoined cause of action may, on motion of a reiterating their letter of November 9, 1992; that on November 28, 1992,
such later pleading, irrespective of whether the motion for its admission, if party or on the initiative of the court, be severed and proceeded with separately. (n) petitioners were forced to vacate the leased premises and consequently they leased
necessary, is denied by the court. (6a) an apartment at P2,500.00 monthly; and that respondents' action was
"unwarranted, unjustified, malicious, abusive, and capricious." Petitioners prayed
Section 6. Construction. These Rules shall be liberally construed in order to for P33,500.00 as actual or compensatory damages; P1,000,000.00 as moral
promote their objective of securing a just, speedy and inexpensive disposition of damages; P50,000.00 as attorney's fees, and costs.
every action and proceeding. (2a)
Respondents moved to dismiss the case on the ground that the venue of the action
had been improperly laid in the RTC of Makati. They contended that pursuant to
their lease contract, the venue of the action was in a court of competent jurisdiction
in Pasay City.
In their opposition to the motion to dismiss, petitioners alleged that their cause of We hold in the negative. We have in the past held stipulations limiting venue as Realty Corporation. Their inclusion in this case is not necessary. What is more, as
action is not based on the lease contract and, therefore, the case is not covered by valid and binding on the contracting parties, 4 based on Rule 4, sec. 3 which already noted, by its terms the stipulation applies not only to the parties to the
the stipulation as to venue. Instead it is governed by the general rule as to venue provides: contract but to "any persons claiming under each."
stated in Rule 4, sec. 2(b). 3 They also alleged that even assuming that the
stipulation is applicable, it does not operate to limit the venue to Pasay City but Venue by agreement. By written agreement of the parties, the venue of an action Petitioners claim that their cause of action is not based on the lease contract
merely provides for an additional forum. may be changed or transferred from one province to another. because it seeks neither its implementation nor its the cancellation. The contention
is also without merit. Petitioners' action is for alleged breach of the lease contract
On May 28, 1990, the trial court dismissed petitioners' action on the ground of In the case at bar, it is clear from the parties' contract that the venue of any action which, it is contended, was terminated to spite them. 11 Petitioners view this act of
improper venue. On July 9, 1993, it denied their motion for reconsideration. which they might bring are the courts of competent jurisdiction in Pasay City, respondents as an abuse of right under arts. 19, 20, and 21 of the Civil Code,
whether the action is for "breach [of the lease agreement] or damages or any other warranting an award of damages. Their cause of action is ultimately anchored on
Hence this petition based on the following grounds: cause between the LESSOR and LESSEE and persons claiming under each." their right under the lease contract and, therefore, they cannot avoid the limitation
as to the venue in that contract.
I. The language used leaves no room for interpretation. It clearly evinces the parties'
intent to limit to the "courts of appropriate jurisdiction of Pasay City" the venue of Nor is there any warrant for petitioners' view that a motion to dismiss on the
THE HONORABLE COURT BELOW ERRED IN CONSIDERING THE ACTION FOR all suits between the lessor and lessee and those between parties claiming under ground of improper venue is based on a "mere technicality" which "does not even
DAMAGES AS REAL ACTION AND NOT PERSONAL. them. This means a waiver of their right to institute action in the courts provided for pretend to invoke justice" and, therefore, must not be sustained. As we have in
in Rule 4, sec. 2(b). other cases 12 held, "procedural rules are not to be belittled or dismissed simply
II. because their non-observance may have resulted in prejudice to a party's
This case, therefore, differs from the cases 5 cited by petitioner. It is true that in substantive rights. Like all rules, they are required to be followed except only for the
THE HONORABLE COURT BELOW ERRED IN CONSIDERING THE LEASE CONTRACT Polytrade Corporation v. Blanco, 6 a stipulation that "The agree to sue and be sued most persuasive of reasons when they may be relaxed to relieve a litigant of an
EXECUTED BETWEEN ONLY ONE OF THE PETITIONERS AND ONLY ONE OF THE in the City of Manila" was held to merely provide an additional forum in the absence injustice not commensurate with the degree of his thoughtlessness in not complying
PRIVATE RESPONDENTS APPLICABLE TO THE INSTANT COMPLAINT. of any qualifying or restrictive words. But here, by laying in Pasay City the venue for with the procedure prescribed." Here what is involved is no less than the parties'
all suits, the parties made it plain that in no other place may they bring suit against agreement to limit the venue of any action between them and those claiming under
III. each other for "breach [of their lease contract] or damages or any other cause them under the contract. Petitioners must abide by that agreement.
between [them] and persons claiming under each [of them]."
THE HONORABLE COURT ERRED IN CONSIDERING THE COMPLAINT AS BASED ON WHEREFORE, the petition is DENIED and the order appealed from is AFFIRMED.
THE CONTRACT OF LEASE. The stipulation in this case is similar to that involved in Hoechst Philippines, Inc. v.
Torres 7 where the parties agreed that "in case of any litigation arising out of this SO ORDERED.
IV. agreement, the venue of any action shall be in the competent courts of the Province
of Rizal." This court held: "No further stipulations are necessary to elicit the thought Narvasa, C.J., Padilla, Regalado and Puno, JJ., concur.
THE HONORABLE COURT BELOW ERRED IN UTILIZING THE VERY ACT COMPLAINED that both parties agreed that any action by either of them would be filed only in the
OF (THE RIGHT ABUSED) TO DEFEAT THE COMPLAINT FILED BY PETITIONERS. competent courts of Rizal province exclusively." 8 The similarity in the language
used in the stipulation in this case and that in the Hoechst case is striking. Again, in
V. Villanueva v. Mosqueda 9 it was stipulated that if the lessor violated the contract of
lease he could be sued in Manila, while if it was the lessee who violated the
THE HONORABLE COURT BELOW ERRED IN ATTEMPTING TO CAUSE THE FILING OF contract, the lessee could be sued in Masantol, Pampanga. It was held that there
THE COMPLAINT IN A JURISDICTION OTHER THAN THE PLACE WHERE ALL THE was an agreement concerning venue of action and that the parties were bound by
PARTIES ARE FOUND WITHOUT ANY JUSTIFIABLE REASON. their agreement. The agreement as to venue was not permissive but mandatory.

VI. Petitioners contend that neither they nor the private respondent Jaime Blanco
reside in Pasay City. This fact is, however, irrelevant to the resolution of the issue in
THE HONORABLE COURT ERRED IN SUSTAINING A DISMISSAL SOLELY GROUNDED this case since parties do stipulate concerning the venue of an action without regard
ON A TECHNICALITY. to their residence. In one case, it was held that the parties stipulated that the venue
of action shall be in the City of Manila. It was held that it was reasonable to infer
VII. that the parties intended to fix the venue of their action, in connection with the
contract sued upon, in the proper court of the City of Manila only, notwithstanding
ASSUMING FOR THE SAKE OF ARGUMENT THAT THE LEASE AGREEMENT IS that neither one was a resident of Manila. 10
APPLICABLE, THE HONORABLE COURT BELOW ERRED IN CONSIDERING THE
PROVISION STIPULATING THE VENUE OF THE ACTION EXCLUSIVISTIC. It is nonetheless contended that the stipulation as to venue is inapplicable because
(1) only one of the petitioners (Virgilio B. Gesmundo) and only one of the private
These contentions boil down to one main issue: whether venue was properly laid in respondents (JRB Realty) are parties to the lease contract and (2) their cause of
the Regional Trial Court of Makati. action is not based on the lease contract.

The contention is without merit. Petitioner Edna C. Gesmundo is the wife of the
lessee Virgilio B. Gesmundo, while Jaime R. Blanco is the president of the lessor JRB
G.R. No. L-44642 February 20, 1989 Accordingly, on September 2, 1972, the trial judge issued an order declaring the The Court notes that Atty. Alfaro had all of ten days after sending his telegrams to
case submitted for decision on the basis of the evidence so far presented by the file a regular motion for postponement, with copies furnished to the private
AURIA LIMPOT, petitioner, parties. 7 respondents, conformably to the Rules of Court. He did not do so. Worse, he simply
vs. assumed that his telegraphic motion would be automatically granted and did not
COURT OF APPEALS, PROV. SHERIFF, Southem Leyte, CONCHITA TAN DE LIM, The petitioner received a copy of this order on October 12, 1972. 8 Ten days later, even bother to check with his client if she had notified the adverse panes of the
MARCELINA LIM GO, RUDELIA LIM GO, DULCITA LIM HORTIGUELA, and EDITO LIM, Atty. "Alfaro filed a motion for reconsideration on the ground of excusable motion as he had requested. He also assumed they would have no objection. Such
respondents. negligence and/or honest mistake, alleging that his chent had misunderstood his assumptions are risky, let alone unjustified. The petitioner cannot contend that she
telegram asking her to notify the private respondent herself as he did not have was denied due process just because her lawyer's assumptions proved to be wrong.
Gilberto C. Alfafara for petitioner. enough money for the additional telegrams. 9 This motion was denied on January
19, 1973. 10 On January 31, 1973, Atty. Alfaro's motion to withdraw as petitioner's Atty. Alfafara complains that he was not informed of the status of the case as he
Gertrudo G. Aquino for private respondents. counsel was granted 11 and Atty. Gilberts C. Alfafara filed his entry of appearance as had requested of the trial court when he entered his appearance as the petitioner's
replacement on March 10, 1973, coupled with the request that the court inform new counsel. The argument, as we understand it, is that the court should not have
him of the status of the case. 12 Decision on the merits was rendered on March rendered its decision on the merits four days later without first acting on his
15,1973, and a copy thereof was received by the petitioner on March 23, 1973. 13 request. Counsel should have known better. His posture was presumptuous. The
CRUZ, J.: On April 16, 1973, she filed a motion for new trial, which was denied on May 14, trial court was not under any obligation to brief him on the progress of the case, the
1973. 14 She was notified of the denial on May 25, 1973. 15 The petitioner filed her records of which were available to him for his own examination. It was for him-or
Rules of procedure are intended to ensure the orderly administration of justice and notice of appeal and appeal bond on May 31, 1973, and the original record on his assistant if he had any-to examine such records for whatever he needed or
the protection of substantive rights in judicial and extrajudicial proceedings. It is a appeal the following day, June 1, 1973. 16 On June 12, the private respondents filed wanted to know. It is fortunate for him in fact that, instead of reproving him as it
mistake to purpose that substantive law and adjective law are contradictory to each a motion to dismiss the petitioner's appeal on the ground of tardiness, followed by could have, the trial court chose merely to ignore his impertinent request.
other or, as has often been suggested, that enforcement of procedural rules should an amended motion on July 5, 1973, amplifying their original motion. 17 After
never be permitted if it will result in prejudice to the substantive rights of the hearing, the trial court dismissed the appeal and ordered the issuance of a writ of The motion for new trial filed by the petitioner was deficient in form because it did
litigants. This is not exactly true; the concept is much misunderstood. As a matter of execution. 18 On August 9, 1973, the petitioner elevated the case on certiorari to not comply with Rule 37, section 2, of the Rules of Court. No afndavit of merit was
fact, the policy of the courts is to give effect to both kinds of law, as complementing the Court of Appeals, which denied the same on July 15, 1976. 19 A motion for attached, as required, to support the claim of honest mistake or excusable
each other, in the just and speedy resolution of the dispute between the parties. reconsideration was likewise denied on AugUst 30, 1976. 20 Notice of this denial negligence when she failed to notify the private respondents of the telegraphic
Observance of both substantive rights is equally guaranteed by due process was received on September 13, 1976, by the petitioner, who came to this Court on motion for postponement. As for the second ground, to wit, the insufficiency of the
whatever the source of such rights, be it the Constitution itself or only a statute or a November 9, 1976, for certiorari under Rule 45 of the Rules of Court. 21 Her evidence to justify the decision, the trial court took pains to refute the petitioner's
rule of court. petition was denied for lack of merit on January 26, 1977 but, upon our contentions, discussing her arguments one by one, and extensively. A careful
reconsideration of the denial, given due course on May 6, 1977, with the parties reading of its order of May 14, 1973, wfll show that the motion was not denied out
being required to file their respective memoranda. 22 Only the private respondents of hand in violation of her right to be heard, as the petitioner suggests.
did so despite the extension granted to but not availed of by the petitioner. The
In the case at bar, the petitioner claims that she has been deprived of her day in case was considered submitted for decision without the memorandum. 23 This is the reason why we cannot agree with the private respondents' submission
court because of a strict adherence to procedural rules and as a consequence that the motion for new trial was merely pro forma and so did not suspend the
prevented from defending her substantive rights. She asks that the decision of the We find no error in the decision of the Court of Appeals. The petitioner has only running of the period for appeal.
Court of Appeals 1 sustaining the trial court be reversed and that the case be herself to blame if judgment was rendered against her in the light of the
remanded to the court a quo for a thorough examination of the issues in contention circumstances above narrated. The Court is not unfamiliar with the ploy resorted to The question of the timeliness of the petitionees appeal was resolved on the basis
between her and the plaintiffs, the private respondents herein. by losing parties of complaining that their right to due process has been violated of the factual findings of both the trial court and the respondent court regarding the
where the rules of procedure they have not observed are applied against them. date the petitioner was notified of the decision of March 15, 1973. The petitioner
Briefly stated, the facts involved in this petition are as follows: Such ploys do not persuade. claims it was March 25, 1973, but the correct date found was March 23, 1973, as
established by the certification made by the postmaster of Cebu City and the
On October 3, 1967, the private respondents filed a complaint for quieting of title The petitioner argues that in denying her motion for postponement and considering registry return card. 24 There is no reason not to accept this determination.
and recovery of possession against the petitioner in the Court of First Instance of the case submitted for decision, the trial court deprived her of ber chance to fully Conformably thereto, we also affirm the dismissal of the appeal on the following
Southern Leyte. 2 After the plaintiffs had rested and following the presentation of ventilate ber side in the land conflict between her and the private respondents. The justification made by the trial court:
one witness for the defendant, Atty. Braulio G. Alfaro, the petitioner's counsel, sent record does not support this contention. On the contrary, it appears that she filed a
on August 12, 1972 a telegraphic motion for the postponement of the hearing set motion for reconsideration in which she argued that she had not understood her From March 23, 1973, the date a copy of thedecision was received by the defendant
for August 22, 1972, alleging physical indisposition because of injuries sustained by counsel's telegram that she take care of informing the private respondents of the to April 16, 1973, the date the motion for new trial was filed a period of twenty-four
him due to a fall from a bus. 3 The petitioner was informed of the motion, also by telegraphic motion for postponement. She was heard by the trial court. If it (24) days has elapsed after excluding the first day. Then from May 25, 1973, the day
telegram, and asked to notify the adverse parties. 4 On the day of the scheduled nevertheless did not accept her explanation of honest mistake or excusable the defendant received a copy of the Order denying her motion for new trial to June
hearing, the motion was opposed by the private respondents for lack of notice and negligence, this did not signify that she was denied due process as she claims. Later, 1, 1973, the day she filed and submitted her Record on Appeal, a period of eight (8)
failure to indicate the date of the resetting. 5 Judge Gibson Ara-ula denied the after the decision on the merits was rendered, her new counsel filed for her a days had elapsed. Adding this eight (8) days to the twenty-four (24) days will give a
motion and said he would continue with the hearing scheduled the following day. motion for new trial, in which she again argued for the setting aside of the decision total of thirty-two (32)days. So that when defendant filed her Notice of Appeal and
However, instead of proceeding with the trial on that date, he required the so she could submit additional evidence to resist the private respondents' claims. If Appeal Bond on May 31, 1973 and the Record on Appeal on June 1, 1973, it was
petitioner, who was present without counsel, to submit proof within five days that the trial court was not convinced that she had a meritorious case, this too did not already beyond the reglementary period of thirty (30) days within which a party
the plaintiffs had been notified of the motion for postponement. 6 No such proof mean that she was deprived of her day in court. may be allowed to appeal. 25
was submitted.
The Court notes that the petitioner could have filed the notice of appeal and the clearly shows that she herself believed that the claimed errors of the trial court
appeal bond within the reglementary period and then asked for an extension to were appropriate for review only in that appeal and not by certiorari. It is obvious
submit the record on appeal if she needed more time to prepare it. No such that when she subsequently filed the petition for certiorari after her appeal had
extention was sought. Among conscientious practitioners, verification of the been dismissed for tardiness, she was availing herself'of the second remedy only as
material dates, especially in connection with the reglementary periods, is a wise and a substitute for her lost appeal. The petitioner forgets that the two remedies are
indispensable precaution. This precaution was not taken in this case. Atty Alfafara's mutually exclusive and not alternative or successive.
chimed mistake of misreading the date when the notice of the decision of March 15,
1973, was received-considering what be calls the ambiguity in the writing of the Recapitulating, we find that the petitioner's counsel did not comply with the
disputed ciphers-is, if anything, but still another proof of his inexcusable requirements of the Rules of Court when he sent the telegraphic motion for
carelessness. It also does not advance the petitioner's cause that she first claimed postponement; that he did not rectify the deficiency even if he had sufficient time
she had received the notice on May 25, 1973, and then, when confronted with to do so before the hearing sought to be postponed; that it was therefore not
evidence to the contrary, averred that she had misread the figure "23" as "25." improper for the trial court to consider the case submitted for decision on the basis
of the evidence presented so far by the parties; that the petitioner had and enjoyed
The petitioner says she was also denied due process when the trial court resolved the chance to be heard through her motion for reconsideration and her subsequent
the motion to dismiss the appeal and the supplemental motion flied later by the motion for new trial; that the alleged erors sought to be reviewed were reversible
private respondents although she had not yet been given an opportunity to file an only in an ordinary appeal, that this appeal was, however, not filed on time; and
opposition to the supplemental motion. She stresses that she learned of the that the petition for certiorari with the respondent court could not be resorted to
amended motion only at the hearing schedule, as she thought, only on the original by the petitioner as a substitute for her dismissed appeal. The respondent court was
motion. We find no such denial. The supplemental motion was actually but an therefore correct in denying the said petition.
amplification of the original motion and merely adduced additional evidence to
support the contention that the appeal had not been filed on time. The second We conclude as we began, by stressing that procedural rules are not to be belittled
motion was based on the same ground invoked in the first motion. By any or dismissed simply because their nonobservance may have resulted in prejudice to
reasonable standard, rejection of this contention by the trial court and the a party's substantive rights, as in this case. Like all rules, they are required to be
respondent court cannot be considered arbitrary. followed except only when for the most persuasive of reasons they may be relaxed
to relieve a litigant of an injustice not commensurate with the degree of his
And now, to rectify her tardiness, the petitioner would ask us to consider ber thoughtlessness in not complying with the procedure prescribed. Such reasons are
subsequent petition for certiorari with the respondent court as a substitute for her not present here. We do not find that compelling justification for the exception
lost appeal. Obviously, this should not be permitted. As we have repeatedly held in sought and so must sustain the respondent court. While it is true that a litigation is
innumerable cases: not a game of technicalities, this does not mean that the Rules of Court may be
ignored at will and at random to the prejudice of the orderly presentation and
... Where another such remedy like an appeal may be taken, certiorari does not lie. assessment of the issues and their just resolution. Justice eschews anarchy.
And, it is by now abundantly clear that certiorari may not be utilized to offset the
adverse effect of failure to appeal. WHEREFORE, the petition is DENIED and the challenged decision of the respondent
court is AFFIRMED, with costs against the petitioner. This decision is immediately
Here, petitioner had the remedy of appeal from the judgment of respondent judge. executory.
In fact, he did attempt to appeal. But his appeal was dismissed by this Court for
failure to pay the docket fee on time. He cannot revive his appeal. He bad lost it SO ORDERED.
through his own fault. certiorari is no substitute for appeal. 26
Narvasa (Chairman), Gancayco, Grio-Aquino and Medialdea, JJ., concur.
Where an appeal would have been an adequate remedy but it was lost through
petitioner's inexcusable negligence, certiorari is not in order.'Time and again, this
Court dismissed petitions for certiorari to annul decisions or final orders which
could have, but were not, appealed. They were dismissed because certiorari cannot
take the place of an appeal. 27

Curiously, while insisting that her appeal was filed on time, the petitioner would
also justify her petition for certiorari with the respondent court as an exception to
the above-discussed rule. The simple justification she offers for her inconsistency is
that the judgment rendered by the trial court in Civil Case No. R-1564 was void ab
initio for violation of due process and therefore correctible by the present petition
for certiorari.

If that be so, the Court can only wonder why she attempted to file her appeal in the
first place instead of coming directly to the respondent court in the petition for
certiorari she claims is proper. The act that she sought to file an ordinary appeal
Requisites of cause of action [G.R. Nos. 92029-30 : December 20, 1990.]
CIVIL ACTION AND SPECIAL PROCEEDING 1. Right of one party
CAUSE OF ACTION AND RIGHT OF ACTION 2. Obligation of the other to respect
3. Breach MOST IMPT!
192 SCRA 507

NICANOR G. DE GUZMAN, JR., Petitioner,


What is CIVIL ACTION and SPECIAL PROCEEDING?
A right of action is the right of the plaintiff to bring an action and to prosecute that vs.
action to final judgment. HON. COURT OF APPEALS, Former Fifth Division, HON. REGIONAL TRIAL COURT,
According to the 1997 Rules of Civil Procedure, Section 3. Cases governed . . .
National Capital Judicial Region, Br. 48, Manila, and ENRIQUE KP. TAN, Respondents.
(a) A civil action is one by which a party sues another for the enforcement
or protection of a right, or the prevention or redress of a wrong, (1a, R2)
Distinguish a CAUSE OF ACTION from a RIGHT OF ACTION.
DECISION
A civil action may either be ordinary or special. Both are governed by the rules for
First the definition of both: A right of action is the right of the plaintiff to bring an
ordinary civil actions, subject to the specific rules prescribed for a special civil
action and to prosecute that action to final judgment. (Marquez vs. Varela, 92 Phil. GANCAYCO, J.:
action. (n)
373) A cause of action is an act or omission by which a party violates a right of
another. A cause of action is the fact or combination of facts which affords a party a right to
(c) A special proceeding is a remedy by which a party seeks to establish a
judicial interference in his behalf. 1 An action means an ordinary suit in a court of
status, a right, or a particular fact.
Now the distinction: (If you are asked the same question in the exam or in the slim justice, by which one party prosecutes another for the enforcement or protection of
chance it will be asked in the bar again, skip the definition and go directly to the a right, or the prosecution or redress of a wrong. 2
What is CAUSE of ACTION and RIGHT of ACTION?
points of distinction.)
The cause of action must always consist of two elements: (1) the plaintiff's primary
According to the 1997 Rules of Civil Procedure, Rule 2 . . .
1) Cause of action is the delict or wrong committed by the defendant, whereas Right right and the defendant's corresponding primary duty, whatever may be the subject
of action refers to the right of the plaintiff to institute the action; to which they relate person, character, property or contract; and (2) the delict or
Section 2. Cause of action, defined. A cause of action is the act or omission by
wrongful act or omission of the defendant, by which the primary right and duty
which a party violates a right of another. (n)
2) Cause of action is created by substantive law, whereas Right of action is regulated have been violated. 3 The cause of action is determined not by the prayer of the
by procedural law; complaint but by the facts alleged. 4
Section 3. One suit for a single cause of action. A party may not institute more
than one suit for a single cause of action. (3a)
3) Right of action may be taken away by the running of statute of limitations, by The term right of action is the right to commence and maintain an action. 5 In the
estoppel or other circumstances which do not affect at all the cause of action. law on pleadings, right of action is distinguished from cause of action in that the
Section 4. Splitting a single cause of action; effect of. If two or more suits are
former is a remedial right belonging to some persons, while the latter is a formal
instituted on the basis of the same cause of action, the filing of one or a judgment
Summary of distinguishment statement of the operative facts that give rise to such remedial right. The former is
upon the merits in any one is available as a ground for the dismissal of the others.
a matter of right and depends on the substantive law, while the latter is a matter of
(4a)
Right of action is the right to commence and prosecute an action to obtain the relief statement and is governed by the law of procedure. 6
sought. Elements:
Section 5. Joinder of causes of action. A party may in one pleading assert, in the
1. Existence of cause of action The right of action springs from the cause of action, but does not accrue until all the
alternative or otherwise, as many causes of action as he may have against an
2. Performance of all conditions precedent to bring the action facts which constitute the cause of action have occurred. 7 When there is an
opposing party, subject to the following conditions:
3. Right to bring an maintain the action must be held by the person instituting it invasion of primary rights, then and not until then does the adjective or remedial
law become operative, and under it arise rights of action. There can be no right of
(a) The party joining the causes of action shall comply with the rules on
action until there has been a wrong a violation of a legal right and it is then
joinder of parties;
given by the adjective law. 8
(b) The joinder shall not include special civil actions or actions governed by
The herein petition for review on Certiorari of a decision of the Court of Appeals
special rules;
dated January 30, 1990 in CA G.R. No. 22481 9 puts into test the sufficiency of the
cause of action of a complaint filed in the Regional Trial Court of Manila.: nad
(c) Where the causes of action are between the same parties but pertain to
different venues or jurisdictions, the joinder may be allowed in the Regional Trial
The undisputed antecedents are that on September 15, 1988, petitioner filed a
Court provided one of the causes of action falls within the jurisdiction of said court
complaint for damages and other equitable reliefs in the trial court, the relevant
and the venue lies therein; and
allegations of which are as follows:
(d) Where the claims in all the causes action are principally for recovery of
"3. Plaintiff and defendant have been friends and in the course of this relationship,
money, the aggregate amount claimed shall be the test of jurisdiction. (5a)
they have exchanged mutual favors and accommodations, including discounting of
check for cash.
Section 6. Misjoinder of causes of action. Misjoinder of causes of action is not a
ground for dismissal of an action. A misjoined cause of action may, on motion of a
4. More than seven (7) years ago, several checks were issued by plaintiff to
party or on the initiative of the court, be severed and proceeded with separately.
defendant in exchange for cash which probably amounted to P280,900.00. In due
time, these checks were either fully paid, settled, extinguished or condoned by
agreement of the parties, and for which reason, plaintiff did not anymore redeem 9. In the circumstances given, defendant has kept possession of the alleged checks
the checks precisely because they have been close and mutual friends. amounting to P280,900.00 at the expense of plaintiff and since the obligation Hence, petitioner filed a petition for Certiorari and mandamus and other relief in
thereunder has either been fully or wholly paid, settled, extinguished, or condoned the Court of Appeals against said orders of the trial court. As earlier stated, on
5.a. Lately, however, plaintiff received from defendant's lawyer a demand letter by agreement of the parties, defendant holds them without just or legal ground and January 30, 1990, the Court of Appeals rendered its decision dismissing the appeal
dated 1988 supposedly detailing out therein the former's obligation to the latter, as is bound to return them to plaintiff. with costs against petitioner.
follows:
10. In writing the letter, Annex A hereof and demanding therein an obligation from Thus, the herein petition whereby petitioner alleges that the trial court committed a
Principal Amount P280,900.00 plaintiff which is not due and owing from the latter, defendant failed to act with grave abuse of discretion in issuing the questioned orders dated November 24, 1988
justice, observe honesty and good faith. and March 17, 1989, and that the Court of Appeals did likewise in dismissing the
(Value of 66 dishonored checks) appeal of petitioner thereby disregarding a question of substance not in accord with
11. To prosecute the instant action, plaintiff has incurred actual expenses in the sum law.
Legal Interest at 235,956.00 of at least P15,000.00.
The petition is impressed with merit.
1% per Month (For 84 12. In the circumstances herein-above given, defendant acted in a wanton, reckless,
oppressive, or malevolent manner. Hence, exemplary damages in the sum of A reading of the complaint shows that it is therein alleged that more than seven (7)
months or 7 years) P200,000.00 should be imposed against the defendant for the public good, in years ago, several checks were issued by petitioner to private respondent in
addition to other damages claimed herein. exchange for cash amounting to P280,900.00; that in due time, said checks were
Attorney's Collection 51,685.00 "either fully paid, settled, extinguished or condoned by agreement of the parties" so
13. Nominal damages should be adjudicated against the defendant in order that the petitioner did not anymore redeem the checks because of their friendship; that on
Fee (At 10% Only) right of plaintiff which has been invaded by the defendant, may be vindicated or August 30, 1988, private respondent's lawyer sent a letter of demand to petitioner
recognized, and not for the purpose of indemnifying the plaintiff for any loss to pay said principal amount plus interest and attorney's fees with a total amount
suffered by the latter. due of P568,541.00, which claim is not due and owing having been settled between
the parties; that in said letter threat of court action was made causing injury to
TOTAL Amount Due P568,541.00 14. To prosecute the case herein, plaintiff has retained the services of counsel at the petitioner; that private respondent illegally withheld the petitioner's checks which
agreed attorney's fees of P75,000.00. should be returned to petitioner; that for private respondent's act of demanding
======== payment for an obligation not due and for the former's failure to act with justice,
WHEREFORE, it is respectfully prayed that, after due hearing judgment be rendered observe honesty and good faith, petitioner prays for relief by way of actual,
Copy of said letter is attached hereto as Annex A and made an integral part hereof. in favor of plaintiff and against defendant, as follows: exemplary and nominal damages, and also prays that the private respondent be
ordered to return to petitioner the checks mentioned in the complaint, and to pay
b. The claim of P568,541.00 is not due and owing from the plaintiff to the defendant 1. Ordering defendant to pay plaintiff the sum of P15,000.00 as actual or the costs.
because, as already stated, the amounts of the checks issued to defendant some compensatory damages;
more than (7) years ago, were either fully paid, settled, extinguished or treated as Contrary to the findings of the lower court and the appellate court that the
condoned by agreement of the parties. 2. Ordering the defendant to pay plaintiff the exemplary damages in the sum of complaint states no cause of action, this Court finds and so holds that it states a
P200,000.00; sufficient cause of action.
6. In the said letter, Annex A hereof, defendant threatened to "institute the proper
action and hold (plaintiff liable for the consequence," in the following manner: 3. Ordering defendant to return to plaintiff the several checks mentioned in Annex It must be remembered that when a party files a motion to dismiss the complaint
A of the complaint and adjudicating nominal damages in favor of plaintiff and for lack of cause of action he is deemed to hypothetically admit the allegations
. . . unfortunately, you had not heeded his (defendant's) request and so we hereby against the defendant; thereof.
inform you that this shall definitely be our last letter to you on this matter and we
are giving you a final period of ten (10) days from receipts hereof to remit full 4. Ordering defendant to pay plaintiff the sum of P75,000.00 for and as attorney's From the allegation of the complaint in this case it appears that, (1) petitioner has a
payment of said sum of P568,541.00, otherwise, without need of further advice to fees; and primary right, because of having paid his obligation to private respondent, to have
you, we shall institute the proper action and hold you liable for the consequence.:- the checks he issued to cover the amount returned to him or otherwise cancelled by
5. Ordering the defendant to pay the costs of the suit.: nad private respondent; and (2) the primary right of was violated when private
7. Defendant knows fully well that the sum of P568,541.00 is not wholly or partly respondent demanded payment of a settled obligation relying on the very checks of
due or owing to him from plaintiff particularly the huge, fantastic, and unwarranted Plaintiff prays for other relief just and proper in the premises of the case." 10 petitioner he had not returned. Consequently, on account of such demand for
claim for alleged legal interests in the sum of P235,956.00 which roughly accounts payment for an obligation duly settled, the petitioner thereby suffered damages 13
for 84% of the alleged principal amount being collected by defendant from plaintiff On October 8, 1988, private respondent filed a motion to dismiss the complaint for and should be afforded such relief as prayed for in the complaint.:-
under his ill-tenored Annex A hereof, and the unwarranted claim for attorney's lack of cause of action and prescription. An opposition thereto was filed by
collection fees of P51,685.00. petitioner to which a reply was made by private respondent. After a rejoinder was Contrary to the observation made by the appellate court, the cause of action had
submitted by petitioner, on November 24, 1988 the trial court dismissed the not prescribed. The cause of action accrued only on August 20, 1988 when in a
8. Plaintiff is very reluctant to file the instant complaint against his defendant friend complaint for failure to state a cause of action. 11 demand letter for payment private respondent thereby committed a wrongful act
but was gravely agitated to do so because of a clearly perceived and palpable injury against petitioner. The complaint was filed promptly on September 15, 1988, well
to him as unequivocally expressed in defendant's letter, Annex A hereof. A motion for reconsideration thereof filed by petitioner, which was opposed by within the four (4) year prescriptive period of an action of this nature. 14
private respondent, and to which a reply was filed by petitioner, was denied by the
trial court on March 17, 1989. 12
WHEREFORE, the petition is GRANTED and the questioned decision of the Court of
Appeals dated January 30, 1990 as well as the questioned orders of the Regional
Trial Court of Manila dated November 24, 1988 and March 17, 1989, are hereby
REVERSED AND SET ASIDE. Let the records of this case be remanded to the trial
court for further proceedings. Costs against private respondent.

SO ORDERED.

Narvasa, Cruz, Grio-Aquino and Medialdea, JJ., concur.


REAL AND PERSONAL ACTION ELEMENTS OF CAUSE OF ACTION Respondent, in his comment, maintains that he held in abeyance the extrajudicial
ACTION in REM foreclosure and sale of the property mortgaged supposed to be held on May 26,
1993 and instead scheduled the same for hearing on June 16, 1993 (which however
ACTION in PERSONAM [A.M. No. RTJ-93-1031. January 28, 1997] did not transpire), to determine two issues: first, whether the venue in Foreclosure
Proceeding No. 93-822 was improperly laid in light of the stipulation in the "Loan
ACTION QUASI in REM RODRIGO B. SUPENA, petitioner, Agreement" duly entered into by both parties and acknowledged before a Notary
vs. Public which provides:
JUDGE ROSALIO G. DE LA ROSA, respondent.
What are REAL and PERSONAL actions? "14) VENUE OF ACTIONS Any action or suit brought under this Agreement or any
DECISION other documents related hereto shall be instituted in the proper Courts of Makati,
1. Real action is one affecting title to or recovery of possession or partition, Metro Manila, Republic of the Philippines."[2]
condemnation, or foreclosure of mortgage on real property HERMOSISIMA, JR., J.:
and, secondly, in order to determine the veracity of the mortgagor's allegation that
2. Personal action covers all others In his verified complaint dated June 16, 1993, Mr. Rodrigo B. Supena, President of the Five Hundred Thousand Pesos (P500,000.00) paid to BPI Agri-Bank last January,
Specific performance for delivery of real property is a personal action Mortgagee BPI Agricultural Development Bank (BAID, for short), charges respondent 1993 does not reflect and does not appear to have been credited or deducted from
Judge Rosalio G. de la Rosa with gross ignorance of the law for issuing an unlawful the accounts of mortgagor. It was, allegedly, under the principle of fair play, equity
Distinguish ACTIONS in REM, in PERSONAM, and QUASI in REM Order, dated May 25, 1993, in Foreclosure Case No. 93-822, entitled, "BPI and substantial justice which compelled him to issue the Order dated May 25,
Agricultural Development Bank v. PQL Realty Incorporated." The Order in effect 1993.[3]
1. Action in rem is one instituted against the whole world. held in abeyance the public auction sale set on May 26, 1993, per Notice of
2. Action in personam is one against a definite defendant. It is intended to subject Extrajudicial Sale of one (1) parcel of land, together with the building and all the We find the respondent judge culpable as charged.
the interest of the defendant on a property to an obligation or lien. improvements existing thereon, described and covered by TCT No. 112644 of the
3. Action quasi-in-rem Registry of Deeds of Manila, on the basis of a mere Ex-Parte Motion to Hold Auction Any judge, worthy of the robe he dons, or any lawyer, for that matter, worth his
When jurisdiction over the person cannot be acquired (usually, non- Sale in Abeyance filed by Mortgagor, PQL Realty Incorporated (PQL, for short). salt, ought to know that different laws apply to different kinds of sales under our
residents) and instead, jurisdiction over the res is acquired, although the jurisdiction. We have three different types of sales, namely: an ordinary execution
owner is still named as defendant, unlike true cases in rem The antecedent facts are as follows: sale, a judicial foreclosure sale, and an extrajudicial foreclosure sale. An ordinary
Ex. by attaching the property of the non- resident execution sale is governed by the pertinent provisions of Rule 39 of the Rules of
The relief granted can only be limited to the res because there is no On April 1, 1993, mortgagee BAID decided to extrajudicially foreclose the Real Court on Execution, Satisfaction and Effect of Judgments. Rule 68 of the Rules,
jurisdiction to grant a personal judgment Estate Mortgage[1] executed by mortgagor PQL in the former's favor. Accordingly, captioned Foreclosure of Mortgage, governs judicial foreclosure sales. On the other
If the person appears, it becomes an action in personam. If the BAID petitioned the Ex-Officio Sheriff of Manila to take the necessary steps for the hand, Act No. 3135, as amended by Act No. 4118, otherwise known as "An Act to
person does not, jurisdiction is limited to the property foreclosure of the mortgaged property and its sale to the highest bidder. Regulate the Sale of Property under Special Powers Inserted in or Annexed to Real
Estate Mortgages," applies in cases of extrajudicial foreclosure sales of real estate
On April 21, 1993, Jesusa P. Maningas, the Clerk of Court and Ex-Officio Sheriff of mortgages.[4]
Manila, issued a Notice of Extrajudicial Sale, scheduling the public auction sale on
May 26, 1993 at 10:00 o'clock a.m. in front of the City Hall Building, Manila. Said The case at bench involves an extrajudicial foreclosure sale of a real estate
notice was subsequently published in the People's Journal Tonight on May 4, 11 and mortgage executed by mortgagor PQL in favor of mortgagee BAID. If the main
19, 1993. concern of respondent judge in holding in abeyance the auction sale in Manila
scheduled on May 26, 1993 was to determine whether or not venue of the
However, on May 25, 1993, or one day before the scheduled sale, the Hon. Rosalio execution sale was improperly laid, he would have easily been enlightened by
G. de la Rosa, in his capacity as Executive Judge of the Regional Trial Court of referring to the correct law, definitely not the Rules of Court, which is Act No. 3135,
Manila, issued an Order holding in abeyance the scheduled public auction sale, on as amended particularly Sections 1 and 2, viz:
the basis of a mere ex-parte motion filed by PQL, a copy of which was received by
mortgagee-complainant only on May 31, 1993. Complainant avers that, said order "SECTION 1. When a sale is made under a special power inserted in or attached to
is, for all practical intents and purposes, a restraining order for an indefinite period, any real estate mortgage hereafter made as security for the payment of money or
issued without the proper case being filed and without the benefit of notice and the fulfillment of any other obligation, the provisions of the following sections shall
hearing, or even an injunction bond from which the mortgagee may seek govern as to the manner in which the sale and redemption shall be effected,
compensation and restitution for the damages it may suffer by reason of the whether or not provision for the same is made in the power.
improper cancellation of the auction sale.
SEC. 2. Said sale cannot be made legally outside of the province in which the
The only ground relied upon by the ex-parte Motion, "that the parties have agreed property sold is situated; and in case the place within said province in which the sale
to hold the foreclosure proceedings in Makati and not in Manila," is patently is to be made is the subject of stipulation, such sale shall be made in said place or in
without merit, according to the complainant, as the venue of foreclosure the municipal building of the municipality in which the property or part thereof is
proceedings is fixed by law and cannot be subject of stipulation. In sum, situated."
complainant submits that the actuations of respondent judge in granting the ex-
parte motion of mortgagor were without basis and highly suspicious.
Here, the real property subject of the sale is situated in Felix Huertas Street, Sta. filing of the same with a "court of justice." Filed elsewhere, as with some other rejected the defense of improper venue and, citing the case of Polytrade, therein
Cruz, Manila.[5] Thus, by express provision of Section 2, the sale cannot be made body or office not a court of justice, the claim may not be categorized under either held:
outside of Manila. Moreover, were the intention of the parties be considered with term.[10] Unlike an action, an extrajudicial foreclosure of real estate mortgage is
respect to venue in case the properties mortgaged be extrajudicially foreclosed, initiated by filing a petition not with any court of justice but with the office of the "x x x. Anent the claim that Davao City had been stipulated as the venue, suffice it
they even unequivocably stipulated in the Deed of Real Estate Mortgage itself under sheriff[11] of the province where the sale is to be made. By no stretch of the to say that a stipulation as to venue does not preclude the filing of suits in the
paragraph 15 that: imagination can the office of the sheriff come under the category of a court of residence of plaintiff or defendant under Section 2 (b), Rule 4, Rules of Court, in the
justice. And as aptly observed by the complainant, if ever the executive judge absence of qualifying or restrictive words in the agreement which would indicate
"xxx xxx xxx comes into the picture, it is only because he exercises administrative supervision that the place named is the only venue agreed upon by the parties. The stipulation
over the sheriff. But this administrative supervision, however, does not change the did not deprive Maningo of his right to pursue remedy in the court specifically
It is hereby agreed that in case of foreclosure of this mortgage under Act 3135, as fact that extrajudicial foreclosures are not judicial proceedings, actions or suits. mentioned in Section 2 (b)-of Rule 4, Rules of Court, Renuntiatio non praesumitur. x
amended by Act 4118, the auction sale, in case of properties situated in the x x.[16]
province, shall be held at the capital thereof."[6] Granting arguendo that an extrajudicial foreclosure sale can be classified as an
"action or suit" (which it is not) and that the venue stipulation in the Loan In Western Minolco v. Court of Appeals,[17] the clause on venue read:
Respondent judge, therefore, had no valid reason to entertain any doubt as to the Agreement would gain relevance, respondent judge still committed a grievous error
propriety of the venue of the auction sale in Manila. The law as well as the intention in holding the auction sale in abeyance due to improper laying of venue. We again "The parties stipulate that the venue of the actions referred to in Section 12.01
of the parties cannot be more emphatic in this regard. quote the subject stipulation for easy reference, to wit: [Article XII of the Agreement] shall be in the City of Manila."

Respondent judge, however, refers to the venue stipulation in the Loan Agreement "14) VENUE OF ACTIONS Any action or suit brought under this Agreement or any The initial action was commenced in the then Court of First Instance of Baguio and
signed by the parties to the effect that, "Any action or suit brought under this other documents related hereto shall be instituted in the proper Courts of Makati, Benguet instead of Manila. This Court took the occasion to reiterate once more the
Agreement or any other documents related hereto shall be instituted in the proper Metro Manila, Republic of the Philippines." Polytrade doctrine:
courts of Makati x x x."[7] And under the pertinent provisions of Rule 4 of the Rules
of Court on Venue of Actions, which provide: Written stipulations as to venue are either mandatory or permissive. In interpreting "x x x. In any event, it is not entirely amiss to restate the doctrine that stipulations
stipulations, inquiry must be made as to whether or not the agreement is restrictive in a contract, which specify a definite place for the institution of an action arising in
"Sec. 2. Venue in Courts of First Instance (a) Real actions. Actions affecting in the sense that the suit may be filed only in the place agreed upon or merely connection therewith, do not, as a rule, supersede the general rules on the matter
title to, or for recovery of possession, or partition or condemnation of, or permissive in that the parties may file their suits not only in the place agreed upon set out in Rule 4 of the Rules of Court, but should be construed merely as an
foreclosure of mortgage on, real property, shall be commenced and tried in the but also in the places fixed by the rules.[12] agreement on an additional forum, not as limiting venue to the specified place.[18]
province where the property or any part thereof lies.
In Polytrade Corporation v. Blanco,[13] the stipulation on venue there involved It is true that there have been early decisions of the Supreme Court inconsistent
Sec. 3. Venue by agreement. By written agreement of the parties the venue of read: with the Polytrade line of cases, notably Bautista v. de Borja.[19] and Hoechst
an action may be changed or transferred from one province to another." Philippines, Inc. v. Torres.[20] However, Lamis Enterprises and Western Minolco
"The parties agree to sue and be sued in the Courts of Manila." followed by Moles v. Intermediate Appellate Court,[21] Hongkong and Shanghai
venue of the auction sale should have been laid in Makati as mutually agreed upon Banking Corporation v. Sherman,[22] Nasser v. Court of Appeals,[23] and Surigao
by the parties. The Court, in ruling that venue had been properly laid in the then Court of First Century Sawmill Co., Inc. v. Court of Appeals[24] settled the matter by treading the
Instance of Bulacan (the place of defendant's residence), said: path blazed by Polytrade. Hence, the inevitable conclusion to be drawn, which
Again, in this regard, we reiterate that the law in point here is Act No. 3135, as respondent judge should have appreciated and followed, is that Bautista and
amended, which is a special law, dealing particularly on extrajudicial foreclosure "x x x. An accurate reading, however, of the stipulation, 'The parties agree to sue Hoechst Philippines have been rendered obsolete by the Polytrade line of cases.
sales of real estate mortgages, and not the general provisions of the Rules of Court and be sued in the Courts of Manila,' does not preclude the filing of suits in the Needless to say, the more recent jurisprudence shall be deemed modificatory of the
on Venue of Actions. In fact, even Section 5, Rule 4, is quite explicit in stating that: residence of plaintiff or defendant. The plain meaning is that the parties merely old ones. Restating the settled rule, therefore, as belabored by this Court in
consented to be sued in Manila. Qualifying or restrictive words which would Philippine Banking Corporation v. Tensuan,[25] venue stipulations in a contract,
"When rule not applicable. This rule shall not apply in those cases where a indicate that Manila and Manila alone is the venue are totally absent therefrom. while considered valid and enforceable, do not as a rule supersede the general rule
specific rule or law provides otherwise." We cannot read into that clause that plaintiff and defendant bound themselves to set forth in Rule 4 of the Revised Rules of Court. In the absence of qualifying or
file suits with respect to the last two transactions in question only or exclusively in restrictive words, they should be considered merely as an agreement on additional
The failure of respondent to recognize this is an utter display of ignorance of the law Manila. For, that agreement did not change or transfer venue. It simply is forum, not as limiting venue to the specified place. They are not exclusive but,
to which he swore to maintain professional competence.[8] Furthermore, provisions permissive. The parties solely agreed to add the courts of Manila as tribunals to rather permissive.
quoted by respondent under Rule 4 pertains to the venue of actions, which an which they may resort. They did not waive their right to pursue remedy in the
extrajudicial foreclosure is not. Section 1, Rule 2 defines an action in this wise: courts specifically mentioned in Section 2 (b) of Rule 4. Renuntiatio non Notwithstanding the above fundamental considerations, respondent judge still
praesumitur."[14] issued the May 25, 1993 Order stopping indefinitely the foreclosure sale scheduled
"Action means an ordinary suit in a court of justice, by which one party prosecutes the following day on May 26, 1993. Clearly, he can be held accountable for
another for the enforcement or protection of a right, or the prevention or redress of In Lamis Ents. v. Lagamon,[15] the promissory note sued on had the following ignorance of the foregoing jurisprudential developments on the applicable rules
a wrong." stipulation: governing venue stipulations.

Hagans v. Wislizenus[9] does not depart from this definition when it states that "In case of litigation, jurisdiction shall be vested in the Court of Davao City." It has been said that when the law transgressed is elementary, the failure to know
"[A]n action is a formal demand of one's legal rights in a court of justice in the or observe it constitutes gross ignorance of the law.[26] In this case, a mere
manner prescribed by the court or by the law. x x x." It is clear that the The collection suit was instituted in the then Court of First Instance of Tagum, reference by respondent judge to Act No. 3135, as opposed to Rule 4 of the Revised
determinative or operative fact which converts a claim into an "action or suit" is the Davao, where the defendant resides, and not in Davao City as stipulated. We Rules of Court, as well as the Deed of the Real Estate Mortgage itself, would dictate
that there is no justification whatsoever for him to hold in abeyance the G.R. No. 79903 July 23, 1992
extrajudicial foreclosure sale scheduled on May 26, 1993 in front of the City Hall of SPLITTING ACTION
Manila. A judge owes it to the public and to the legal profession to know the very CONTECH CONSTRUCTION TECHNOLOGY & DEVELOPMENT CORPORATION, JERRY
law he is supposed to apply to a given controversy as mandated by the Code of A. KHO, WEIJEN A. KHO and WILLEN A. KHO, petitioners,
Judicial Conduct.[27] He is called upon to exhibit more than just a cursory What is splitting of a cause of action? vs.
acquaintance with the statutes and procedural rules.[28] There will be great faith in COURT OF APPEALS and GREENBELT SQUARE, INC., respondents.
the administration of justice if there be a belief on the part of the parties that the Dividing one cause of action into different parts and making each part a separate
occupants of the bench cannot justly be accused of an apparent deficiency in their complaint NOCON, J.:
grasp of legal principles.[29] Unfortunately, respondent judge, instead of inspiring
faith and confidence in the administration of justice, committed a rank disservice to Test: how many wrongs or breaches are there? This is a petition for certiorari and prohibition with preliminary injunction to annul
its cause when he issued the May 25, 1993 Order based on the inapplicable and set aside the decision dated July 24, 1987 of the Court of Appeals 1 directing
provisions of the Rules of Court. Is splitting cause of action a ground for MTD? the Regional Trial Court of Pasig, Branch CLXIV in Civil Case No. 45321 to admit the
No it is Res Judicata and Litis Pendentia amended complaint of respondent Greenbelt Square, Inc. and to proceed with the
As to the second averment of respondent judge, that he issued the May 25, 1993 trial of said case.
Order so as to determine the truthfulness of the mortgagor's allegation that the Is the rule against splitting of causes of action absolute?
P500,000.00 previously paid to the mortgagee BAID was not duly credited nor No. Except: if the reliefs sought for are cognizable by different tribunals. It appears on record that on August 8, 1980, petitioner Contech Construction
deducted from the accounts of the mortgagor, suffice it to state that the same, by An example is an Ejectment suit cannot include recovery for unpaid Technology & Development Corporation, as contractor, and private respondent
no means, provide any justification for the highly questionable actuation of telephone, electric, and water bills, which must be filed in a separate Greenbelt Square, Inc., as owner, entered into an Agreement whereby the former
respondent judge in issuing the subject Order. This matter, respondent judge ought action. undertook the construction, equipping, furnishing and supplying of materials for a
to have known, should have been the subject of a proper court action for the theater and restaurant building for a consideration of P20,069,694.00. 2
purpose of seeking a temporary restraining order with prayer for a possible
injunction to stop the scheduled extrajudicial foreclosure sale. Definitely, a mere Pursuant to said Agreement, petitioners secured from the Philippine British
ex-parte Motion to Hold Auction Sale in Abeyance is not the proper remedy, and Assurance Co., Inc. (Phil-British for brevity), a bond of P2,000.000.00 under Bond
this recourse by PQL evinces a clear attempt on its part to shortcut the entire No. 0746 to guarantee the payment of the labor and materials used in connection
process. Unfortunately, respondent judge fell prey to this scheme, wittingly or with the construction project, 3 from the Metropolitan Insurance Co. (Metropolitan
unwittingly. Instead of providing some legal justification for his irregular conduct in for brevity); P4,000,000.00 under Surety No. 80/G(13)00853 to secure the full and
issuing the questioned Order, this flimsy argument advanced by the respondent faithful performance of the petitioners 4 and Surety No. 80/G(10)00457 for
judge all the more has convinced this Court of his culpability. P2,000,000.00 to guarantee the supply of cement and steel bars needed for said
project. 5
WHEREFORE, the Court, resolving to hold respondent Judge Rosalio G. de la Rosa
administratively liable for gross ignorance of the law, imposes on him a FINE of On October 21, 1981, respondent Corporation terminated the Agreement upon
P2,000.00, the same to be deducted from whatever retirement benefits he may be petitioners' failure to comply with the terms and conditions of said Agreement. 6
entitled to receive from the government. Respondent Corporation, likewise, sent Phil-British and Metropolitan notices of
claim for petitioners' failure to perform their part of the Agreement.
SO ORDERED.
Petitioners, thereafter, withdrew their men and equipments from the construction
Bellosillo, Vitug, and Kapunan, JJ., concur. site and respondent Corporation contracted the services of R.N. Construction Co.,
Padilla, (Chairman), J., took no part, being a former director and counsel for BAID. Inc. to finish the building project. However, upon petitioners' refusal to pay their
obligation to respondent Corporation, the latter, on March 24, 1982, simultaneously
filed with the Court of First Instance of Rizal two separate complaints against
petitioners and their sureties for breach of contract.

In the first complaint which was docketed as Civil Case No. 45321, respondent
Corporation had petitioners and Phil-British as party defendants for the collection of
a sum of money, while the second complaint which was docketed as Civil Case No.
45322, petitioners and Metropolitan were also party defendants for the collection
of a sum of money.

On June 3, 1982, petitioners filed a motion to dismiss the second complaint on the
ground of the pendency of the first complaint likewise between the same parties for
the same cause, which motion was denied by the trial court. However, upon appeal
to the Intermediate Appellate Court, 7 the appellate court on May 4, 1984 held that
there was a splitting of a cause of action when the two complaints were filed
simultaneously, hence, the orders of the trial court dated May 17, 1983 and July 25,
1983 denying the motion to dismiss and the motion for reconsideration were the rule is to avoid multiplicity of suits and in order that the real controversies [G.R. No. L-14718. March 30, 1960.]
nullified. Said decision of the appellate court became final on August 2, 1984. between the parties are presented, their rights are determined and the case
decided on the merits without unnecessary delay. When the situation is such that if VICENTE JIMENEZ, ET AL., Plaintiffs-Appellants,
On August 8, 1984, respondent Corporation filed before the lower court where the the proposed amendment is not allowed, another action would be instituted, thus v.
first complaint was pending, a motion for leave to amend its complaint and to making two actions, two trials, and two appeals possible and probable, the said CARMELO S. CAMARA, ET AL., Defendants-Appellees.
consolidate the two cases, which motion was denied on October 3, 1984. amendment should be admitted. Hence, should the trial court find the allegations in
Accordingly, respondent Corporation filed a motion for reconsideration on October the pleadings to be inadequate, it should allow the party concerned to file proper
29, 1984, which was also denied on January 13, 1987. amendments to pleadings in accordance with the mandate of the Rules of Court Enrique F. Mario for Appellants.
that amendments to pleadings are favored and should be liberally allowed.
Thereafter, respondent Corporation filed a petition for certiorari and mandamus Benedicto, Sumbingco & Associates, for Appellees.
with the appellate court alleging grave abuse of discretion on the part of the trial Applying the foregoing principles to the instant case, there is no doubt that the
court in denying its motion to amend the complaint. respondent Court committed a grave and serious abuse of discretion in not
admitting the amended complaint. The records of the case indicate that the motion SYLLABUS
The appellate court, on July 24, 1987, rendered a decision giving due course to for leave to admit the amended complaint was filed before a responsive pleading
respondent Corporation's petition and directed the trial court to admit the was filed. In fact, no responsive pleading has yet been filed by the private
amended complaint of the respondent corporation. Consequently, petitioner filed a respondents. Their opposition filed on August 15, 1984 is not a responsive pleading ACTIONS; RULE AGAINST SPLITTING OF CAUSES OF ACTION; TWO ACTIONS
motion for reconsideration on August 11, 1987 which was denied on August 27, within the contemplation of the rule. Consequently, the filing by the petitioner of an FOUNDED ON ONE CONTRACT. The two actions in the case at bar are founded on
1987. amended complaint was erroneously denied by the respondent Court, the same one and the same contract, and the rule is that where the covenant or contract is
being a matter of right. Indeed, in such a situation, an error of the trial court in entire and the breach total, there can be only one action. (Blossom & Co. v. Manila
Hence, this petition. refusing such amendment is controllable by mandamus. Gas Corporation, 55 Phil., 226.) When a trial is had, it intended that all matters
growing out of the controversy are to be finally determined in one and the same
Petitioners contend that the appellate court acted without jurisdiction or with grave Moreover, the Court, after assiduously examining and comparing the original and suit. The object is to prevent a multiplicity of actions and to prevent the possibility
abuse of discretion amounting to lack of jurisdiction in admitting the amended amended complaint, is of the opinion that the amendment sought to be included of one part of the cause being tried before one judge which would unnecessarily
complaint of the respondent Corporation, considering that the previous dismissal of did not in any manner change the cause of action nor was it intended for delay, harass the parties and produce needless litigations and accumulate costs. (Pascua v.
the second complaint for violating the rule against splitting a cause of action barred which considerations appear to be the only ground for denying a motion for leave Sideco, 24 Phil., 26; Strong v. Gutierrez Repide, 22 Phil., 9.)
its reinstitution by the amendment of the first complaint. to amend under section 3 of Rule 10 of the Rules of Court. 8

Section 2, Rule 10 of the Revised Rules of Court provides that: Petitioners also contend that the rule of conclusiveness of judgment is applicable in DECISION
this case in view of the finality of the judgment of the appellate court dismissing the
A party may amend his pleading once as a matter of course at any time before a second complaint which was being reintroduced by a mere amendment of the first
responsive pleading is served or, if the pleading is one to which no responsive complaint. In said judgment, it was held that there was a splitting of a cause of BARRERA, J.:
pleading is permitted and the action has not been placed upon the trial calendar, he action in the first and second complaint, therefore the rule against splitting of a
may so amend it at any time within ten (10) days after it is served. cause of action barred the second complaint as enunciated in the cases of Jimenez
vs. Camara 9 and City of Bacolod vs. San Miguel Brewery, 10 resulting in an outright This is an appeal, certified to this Court by the Court of Appeals, from the order of
Under this rule, a party is given a right to file an amended pleading within the time denial of the amended complaint. the Court of First Instance of Negros Occidental (in Civil Case No. 3364), dismissing
and upon the conditions specified in the rule and without the necessity of obtaining plaintiffs complaint to compel defendant Carmelo S. Camara to execute the
leave of court since a party may amend his pleading once as a matter of course at We do not agree. necessary deeds of conveyance of 17 parcels of land in favor of plaintiffs.
any time before a responsive pleading is served. This rule expressly authorizes the
amendment of pleadings in order that all matters in the action in dispute between The rulings in the aforementioned cases are not applicable in the case at bar since Plaintiffs Vicente Jimenez, Arturo Jimenez and Filomeno Jimenez, together with four
the parties may be completely determined in a single proceeding. The amended both cases refer to a situation wherein the second complaint, which cause of action others were originally the registered co-owners of 24 lots, situated in Isabela, Bago
complaint, in the instant case, was filed not to delay nor alter the cause of action of should be included in the first complaint, was filed after a final decision was and La Carlota, Negros Occidental. All 24 lots were mortgaged to the Philippine
the first complaint but rather to obviate the splitting of the cause of action and to rendered on the merits. In this case, the first and second complaint were not yet set National Bank. Due to the owners-mortgagors failure to pay their indebtedness on
obtain a speedy determination of the controversy in one proceeding without regard for pre-trial or trial because petitioners had not yet filed any responsive pleading to time, the said bank foreclosed the mortgage and acquired the said properties in
to technicality. The amended complaint merely impleaded Metropolitan as a party both complaints, therefore the amendment should be allowed since said public auction, subject to redemption. The mortgagors renounced their right of
defendant in the first complaint and included in said complaint the cause of action amendment will not delay the proceeding and there was no change in respondent redemption in favor of one Adriano Golez, who appointed Vicente Jimenez, one of
alleged in the second complaint which was already dismissed. Furthermore, Corporation's cause of action. herein plaintiffs, as his attorney-in-fact.
petitioners had not yet filed any responsive pleading to the first complaint when
respondent corporation filed the motion to amend its complaint. As correctly held WHEREFORE, the petition for certiorari and prohibition with preliminary injunction In order to redeem said properties from the Philippine National Bank, Adriano Golez
by the appellate court: is hereby DENIED for lack of merit. and said Vicente Jimenez obtained the intervention and services of defendant
Carmelo S. Camara, and on December 29, 1931, a document entitled "Escritura de
It is a recognized rule of procedure that pleadings shall be construed liberally so as SO ORDERED. Compromiso de Venta" (Annex A) was duly executed by said bank in favor of
to render substantial justice to the parties and in order that actual merits of the Camara, wherein the former promised to sell to the latter all its rights and interests
controversy may speedily be determined without regard to technicalities and in the Narvasa, C.J. and Regalado, J., concur. in the mortgaged properties for the sum of P55,160.00. To give effectivity to said
most expeditious and inexpensive manner. The judicial attitude has always been contract, the conformity of the judgment debtors was necessary; and this
favorable and liberal in allowing amendments to a pleading. The rationale behind Padilla, J., took no part. conformity was given, subject to the condition that defendant Camara should
reconvey to Adriano Golez whatever rights and interests Camara may acquire from x x x complaint, sustaining the view that since plaintiffs predecessor-in-interest (Adriano
the Philippine National Bank over said properties. Golez), in the previous case No. 306 against the same defendant, sought the
recovery of 7 of the lots mentioned in Annex B in pursuance to the terms thereof,
Simultaneously with the execution of said contract (Annex A), the previous owners- "There is now no question as to the right of the appellant to redeem the properties where he (Golez) could have also demanded the conveyance of the other 17 lots
mortgagors ceded and renounced all their rights, interests, and participations on in question from the appellee, the latter not having appealed, and the only point covered by the same contract Annex B relied upon by the plaintiffs in the present
the redemption of said properties in favor of Adriano Golez. On December 31, 1931, that arises refers to the amount which the appellant has to pay. From the foregoing case, the instant action constitutes but a part of the former and, consequently,
Golez and his attorney- in-fact Vicente Jimenez, with the conformity of the previous observations we are inclined to hold that the appellant should pay to the appellee violates the rule against splitting a cause of action. From this order of dismissal, the
owners- mortgagors executed a contract of lease known as "Escritura de the sum of P5,516.00 less P3,560.00 already paid on said item, or P1,956.00, with 12 plaintiffs have taken the appeal now before us.
Arrendamiento" (Annex B), in favor of defendant Camara over seven (7) of the 24 per cent interest compounded annually from January, 1932, (it being admitted
lots for a period of 8 agricultural years, with 2 years option, and ending with under appellants evidence - transcript, pp. 37-388 - that the sum of P3,560 was We do not believe the lower court committed an error in dismissing the complaint
agricultural year 1941-1942. With the execution of the aforementioned contracts paid at the commencement of the lease contract executed on December 31, 1931), upon the ground stated by it. The cause of action in the previous case No. 306 arose
(Annexes A and B), the possession, control, use and enjoyment of the 7 leased lots plus the sum of P55,541.18. The latter amount which was paid by the appellee on out of the violation of the terms of the contract Annex B by the defendant Camara.
compromising Haciendas Buenavista and Aurelia were delivered to Camara. The January 24, 1945, in Japanese Military notes must be reduced to actual Philippine Plaintiffs cause of action in this case No. 3364 is predicated likewise in the alleged
other properties (17 lots) situated in Bago and La Carlota remained in possession of currency under the Ballantyne Scale, since said disbursement could have been infringement of the same Annex B by the same defendant Camara. Present plaintiffs
plaintiffs. repaid in the same currency by the appellant during the Japanese occupation. After are successors-in-interest of Golez, plaintiff in the first case. There is only one delict
being so reduced, it shall also bear compound interest of twelve per cent per annum or wrong upon which both complaints are based.
By virtue of said contracts (Annexes A and B), Camara, on January 25, 1945, paid the from January 24, 1945.
entire obligation of the mortgaged properties to the Philippine National Bank, in the Plaintiffs, however, argue that there is no splitting of a cause of action because the
amount of P34,541.18 as the balance of said debt, plus interests. As a consequence x x x issue involved in said Civil Case No. 306 war recovery of possession of Haciendas
of said payment (totalling P55,160.00), said bank, on January 3, 1946, executed a Buenavista and Aurelia, after the lease contract (Annex B) expired which defendant
document of absolute sale known as "Escritura de Venta Definitiva" on all of the refused to surrender to Adriano Golez, whereas the issue in the present case is the
aforesaid properties in favor of Camara. Thereafter, Camara caused to be registered "Wherefore, it being understood that the appellant is indebted to the appellee upon reconveyance of the titles of the 17 lots mentioned in the "Escritura de Compromiso
in his name all the said 24 lots in the Office of the Register of Deeds, without notice account of the repurchase price of the land in question only in the sums of de Venta" (Annex A). This is not exactly the case. The two contracts are not separate
to plaintiffs, notwithstanding his commitment under said contracts, Annexes A and P1,956.00, with twelve per cent compound interest from January, 1932, and from or independent of each other. They are both part of a single transaction: to
B, to re-transfer and reconvey all said properties to Adriano Golez, or to his assigns, P296.18 with compound interest of twelve per cent from January 24, 1945, which carry out and facilitate the redemption from the Philippine National Bank of the
successors-in-interests and/or cessioners, the contract of lease (Annex B) having indebtedness should first be settled by the appellant before he is entitled to a mortgaged properties. The lease contract was resorted to provide a mode of
terminated on November 1, 1941. conveyance of the land in question, the appealed judgment is in all other respects payment to the bank of the delivery of 1,000 piculs of sugar a year, which is the
affirmed, except further that the 90-day period fixed therein shall be computed agreed rental of 7 of the mortgaged lots. In fine, both actions are founded on one
Because of Camaras refusal to relinquish possession of the 7 lots comprising from the date this decision becomes final. and the same contract, and the rule is that where the covenant or contract is entire
Haciendas Buenavista and Aurelia notwithstanding the expiration of the lease, a and the breach total, there can be only one action. (Blossom & Co. v. Manila Gas
complaint was filed with the Court of First Instance of Negros Occidental on March "So ordered without costs."cralaw virtua1aw library Corporation, 55 Phil., 226.) . When a trial is hard, it is intended that all matters
16, 1946, docketed in said court as Civil Case No. 306, entitled "Adriano Golez, growing out of the controversy are to be finally determined in one and the same
plaintiff v. Carmelo S. Camara, Defendant." In this case, the true import of the lease In compliance with said decision of this Court, Adriano Golez, on March 26, 1954, suit. The object is to prevent a multiplicity of actions and to prevent the possibility
contract as well as the resulting relationship between the parties, was put in issue. through his attorney-in-fact Vicente Jimenez, deposited with the Clerk of Court of of one part of the cause being tried before one judge which would unnecessarily
From the decision of the lower court in that case, plaintiff appealed to this Court (G. the Court of First Instance of Negros Occidental the sum of P386.33 in cash and harass the parties and produce needless litigations and accumulate costs. (Pascua v.
R. No. L-4460, Golez v. Camara, 93 Phil., 1081), and on October 31, 1953, we P25,000.00 in P.N.B. Cashiers check or a total of P25,386.33. Thereupon, two Sideco, 24 Phil., 26; Strong v. Gutierrez Repide, 22 Phil., 9.)
promulgated a decision in which we said:jgc:chanrobles.com.ph questions arose again in the lower court (1) whether the deposit in check was valid,
and (2) whether Camara was under obligation to reconvey to Golez only the 7 lots There is another reason why the questioned order of the court a quo must be
"From all the circumstances and equities of the case, we are led to the conclusion under lease or all the 24 lots acquired by him from the Philippine National Bank in upheld. Earlier in this opinion, we adverted to the appeal taken by Camara from an
that the relation between the appellant and the appellee was in effect one whereby virtue of the contracts Annexes A and B. The trial court sustained the validity of the order of the trial court in Case No. 306, directing him to reconvey to Golez all the 24
the appellee accommodated the appellant in the sense that he assumed the deposit and also ordered the reconveyance of the 24 lots. Camara appealed from lots in question. That appeal (G. R. No. L-9160, entitled "Adriano Golez, plaintiff-
obligation of paying the price necessary to redeem the undivided portions of this order and again the case reached this Court. appellee v. Carmelo S. Camara, defendant appellant", 101 Phil., 363), was decided
Haciendas Aurelia and Buenavista from the Philippine National Bank, under the by this Court on April 30, 1957, wherein we held that - "It is clear from the foregoing
terms hereinbefore already noted, namely, that P5,516.00 was the down payment Pending this appeal in this Court, (in G. R. No. L-9160)* the present plaintiffs- facts that Camara is bound to convey to Golez, not only the interest of Isidro
and the balance was payable by annual installments of 1,000 piculs of sugar to the appellants, as assignees of Golez, filed the instant case (No. 3364) on March 12, Jimenez, Aurelia Jimenez and Vicente Jimenez Yamson in the seven (7) lots
bank. The appellee, in return, was given by the appellant a leasehold over the 1955, in the Court of First Instance of Occidental Negros against the same Camara, constituting the Haciendas Aurelia and Buenavista, but, also, the other seventeen
latters undivided portions of the two farms, in addition to the possession of the praying, inter alia, that defendant be ordered to execute the necessary deeds of (17) lots described in the promise to sell and in the contract of lease above-
portions already acquired by the bank, with the right of course to receive and enjoy conveyance in their favor of the remaining 17 lots acquired by Camara from the mentioned.
the produce thereof, after deducting only 1,000 piculs of sugar to be delivered to Philippine National Bank in the manner already narrated. On August 8, 1955,
the bank yearly beginning with the crop year 1932-1933. No other rental was paid defendant filed a motion to dismiss, on the grounds that (1) the complaint states no "It is clear from the foregoing facts that Camara is bound to convey to Golez, not
to the owners. Besides, the appellant admits his obligation to pay compound cause of action, and (2) the action is violative of the rule on splitting a cause of only the interest of Isidro Jimenez, Aurelia Jimenez and Vicente Jimenez Yamson in
interest of twelve per cent on the sum of P5,516.00, representing the down action under Sections 3 and 4, Rule 2 of the Rules of Court. the seven (7) lots constituting the Haciendas Aurelia and Buenavista, but also, the
payment made by the appellee to the bank and on other amounts paid upon other seventeen (17) lots described in the promise to sell and in the contract of
account of the purchase price. Resolving said motion to dismiss and the opposition thereto filed by defendant on lease above-mentioned.
August 18, 1955, the court, on August 31, 1955, issued an order dismissing plaintiffs
"It is true that the sale at public auction of the share of Isidoro Jimenez, Aurelia G.R. No. L-25134 October 30, 1969 representing unpaid bottling taxes due with legal rate of interest thereon from the
Jimenez and Vicente Jimenez Yamzon, in said haciendas, was the factor responsible date of the filing of this complaint until complete payment thereof; ... costs, etc."'
for the intervention of Camara in the contracts already adverted to. This fact, and THE CITY OF BACOLOD, plaintiff-appellee,
the circumstances that the property leased to Camara were said haciendas, explain vs. In due time, appellant filed its answer. This was followed by a stipulation of facts
the emphasis given thereto in the pleadings and in the former decisions of the Court SAN MIGUEL BREWERY, INC., defendant-appellant. between the parties, whereupon, the court rendered judgment on November 12,
of First Instance and of this Court. Again, the issues then submitted for 1960; with the following dispositive portion:
determination revolved on the amount to be paid by Golez to Camara, which hinged First Assistant City Fiscal Raymundo O. Rallos for plaintiff-appellee.
primarily on the interpretation of said escritura de arrendamiento thus focusing Picazo and Agcaoili for defendant-appellant. WHEREFORE, San Miguel Brewery Inc. is ordered to pay to the plaintiff the sum of
attention on said contract of lease and on the property leased Haciendas Aurelia P26,306.54 and the tax at the rate of three centavos per case levied in Ordinance
and Buenavista. BARREDO, J.: No. 66 and 150 from March, 1960, and thereafter. Costs against the defendant.

"However, neither said compromiso de venta, nor the aforementioned escritura An appeal from the decision of the Court of First Instance of Negros Occidental in its Appellant appealed from the said decision to this Court where it pressed the
de arrendamiento, was limited to a promise to sell or to a contract of lease. The Civil Case No. 7355, ordering the San Miguel Brewery, Inc. to pay to the City of question of the invalidity of the abovementioned taxing ordinances. In that appeal
former involved, also, a cession of the right of redemption, which, although Bacolod the sum of P36,519.10, representing surcharges on certain fees which, (G.R. No. L-18290), however, this Court affirmed the decision appealed from and
ostensibly made (in the promise to sell) in favor of Camara, turns out, in the under existing ordinances of the City of Bacolod, the San Miguel Brewery should upheld the constitutionality of the questioned ordinances and the authority of the
language of the contract of lease which was part of the whole scheme agreed have paid quarterly to the treasurer of the said city for and/or during the period appellee to enact the same. For reasons not extant in the record, it was already
upon by the parties to be por y para el Sr. Adriano Golez. The latter (contract of from July, 1959 to December, 1962, but which were paid only on April 23, 1963. after this decision had become final when appellee moved for the reconsideration
lease) contained, also, a promise to assign or sell in favor of Golez. In any event, said thereof, praying that the same be amended so as to include the penalties and
compromise de venta expressly referred, not only to said haciendas, but, also, to On February 17, 1949, the City Council of Bacolod passed Ordinance No. 66, series surcharges provided for in the ordinances. Naturally, the said motion was denied,
the seventeen (17) other lots therein described. Similarly, the aforementioned of 1949 imposing upon "any person, firm or corporation engaged in the for the reason that "the decision is already final and may not be amended." When
escritura de arrendamiento explicitly states that one of the considerations therefor manufacturer bottling of coca-cola, pepsi cola, tru orange, lemonade, and other soft execution was had before the lower court, the appellee again sought the inclusion
is said compromiso de venta of twenty-four (24) lots, the identification number of, drinks within the jurisdiction of the City of Bacolod, ... a fee of ONE TWENTY- of the surcharges referred to; and once again the move was frustrated by the Court
and the location, area, and the interest held in each of which are specified therein. FOURTH (1/24) of a centavo for every bottle thereof," plus "a surcharge of 2% every of First Instance of Negros Occidental which denied the motion, as follows:
Said deed of lease, moreover, stipulates clearly that una ves hecho el pago de la month, but in no case to exceed 24% for one whole year," upon "such local
cantidad dicha al citado Banco Nacional Filipino, dichas propiedades cubiertas por manufacturers or bottler above-mentioned who will be delinquent on any amount Acting upon the motion dated October 24, 1963, filed by the Assistant City Fiscal,
dicha escritura de compromiso de venta . . . estaran todas entregadas y en posesin of fees due" under the ordinance. Raymundo Rallos, counsel for the plaintiff, and the opposition thereto filed by
del . . . Sr. Adriano Golez. In the light of the foregoing, and considering that the attorneys for the defendants dated November 9, 1963, as well as the reply to the
decision of this Court of October 3, 1953 (Golez v. Camara, 93 Phil., 1081), and that In 1959, this ordinance was amended by Ordinance No. 150, series of 1959, by opposition of counsel for the defendants dated December 5, 1963, taking into
of the former decision of the lower court, fixing the amount to be paid by Golez, increasing the fee to "one-eighth (1/8) of a centavo for every bottle thereof." In consideration that the decision of this Court as affirmed by the Supreme Court does
obviously regarded that payment thereof is a condition precedent to, or the other words, the fee was increased from P0.01 to P0.03 per case of soft drinks. not specifically mention the alleged surcharges claimed by the plaintiff-appellee, the
consideration for the conveyance undertaken to be made by Camara, there is no Appellant refused to pay the additional fee and challenged the validity of the whole Court hereby resolves to deny, as it hereby denies, the aforesaid motion, for not
doubt in our mind that the phrase land in question used in the dispositive part of ordinance. being meritorious.
our aforementioned decision, referred to the twenty-four (24) lots described in both
deeds, and that Camara is bound to convey said twenty-four (24) lots to Golez." Under date of March 23, 1960, appellee sued appellant in Civil Case No. 5693 of the Failing thus in its attempt to collect the surcharge provided for in the ordinances in
(Italics supplied.) Court of First Instance of Negros Occidental, with the corresponding Complaint question, appellee filed a second action (Civil Case No. 7355) to collect the said
alleging, inter alia: surcharges. Under date of July 10, 1964, it filed the corresponding complaint before
In the light of the above ruling by this Court, it is clear that the question involved in the same Court of First Instance of Negros Occidental alleging, inter alia, that:
the instant case has become moot or res adjudicata. 3. That the defendant, Manager of the San Miguel Brewery, Bacolod Coca Cola
Plant, Bacolod Branch since the approval of Ordinance No. 66, Series of 1949 as 6. That soon after the decision of the Honorable Supreme Court affirming
Wherefore, finding no reversible error in the order of the court a quo, the same is amended by Ordinance No. 150, Series of 1959, which took effect on July 1, 1959, the decision of the Hon. Court, the defendant herein on April 23, 1963 paid to the
hereby affirmed, with costs against the plaintiffs- appellants, without prejudice to only paid to the plaintiff herein the P0.01 bottling tax per case of soft drinks thereby City of Bacolod, the amount of ONE HUNDRED FIFTY SIX THOUSAND NINE HUNDRED
their right, as assignees of Adriano Golez, to enforce the decision of this Court in G. refusing to pay the P0.03 bottling tax per case of soft drinks which amounted to TWENTY FOUR PESOS and TWENTY CENTAVOS (P156,924.20) as taxes from July,
R. No. L-9160 above referred to. So ordered. P26,306.54 at P0.02 per case of soft drinks such as coca cola and tru orange 1959 to December, 1962 in compliance with the provision of Section 1, Ordinance
manufactured or bottled by said company as per statement submitted by the No. 66, Series of 1949, as amended by Ordinance No. 150, Series of 1959, which
Paras, C.J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepcin, Reyes, J. Assistant City Treasurer of Bacolod City herewith attached as Annex "C" of this corresponds to the taxes due under said section in the amount of P0.03 per case of
B. L., and Gutierrez David, JJ., concur. complaint; soft soft drinks manufactured by the defendant, but refused and still continued
refusing to pay the surcharge as provided for under Section 4 of Ordinance No. 66,
and praying Series of 1949, as amended by Ordinance No. 150, Series of 1959, which reads as
follows:
... that judgment be rendered for the plaintiff:
"SEC. 4 A surcharge of 2% every month, but in no case to exceed 24% for one
"(a) Ordering the defendant to pay the plaintiff the bottling taxes of P0.03 whole year, shall be imposed on such local manufacturer or bottlers above
per case of soft drinks as provided for in Section 1, Ordinance No. 66, Series of 1949, mentioned who will be delinquent on any amount of fees under the ordinance."
as amended by Ordinance No. 150, Series of 1959, as well as the sum of P26,306.54
which up to now amounted to THIRTY SIX THOUSAND FIVE HUNDRED NINETEEN In the light of these precedents, it cannot be denied that appellant's failure to pay
PESOS AND TEN CENTAVOS (P36,519.10), as shown by the certified statement of the SEC. 3. Splitting a cause of action, forbidden. A single cause of action cannot the bottling charges or taxes and the surcharges for delinquency in the payment
office of the City Treasurer of Bacolod City herewith attached as Annex "E" and be split up into two or more parts so as to be made the subject of different thereof constitutes but one single cause of action which under the above rule can
made an integral part of this complaint; complaints. . be the subject of only one complaint, under pain of either of them being barred if
not included in the same complaint with the other. The error of appellee springs
7. That the said interest and/or penalties to the said bottling taxes which SEC. 4. Effect of splitting. If separate complaints were brought for different from a misconception or a vague comprehension of the elements of a cause of
defendant refused to pay have long been overdue; parts of a single cause of action, the filing of the first may be pleaded in abatement action. The classical definition of a cause of action is that it is "a delict or wrong by
of the others, and a judgment upon the merits in either is available as a bar in the which the rights of the plaintiff are violated by the defendant." Its elements may be
and again praying others. generally stated to be (1) a right existing in favor of the plaintiff; (2) a corresponding
obligation on the part of the defendant to respect such right; and (3) an act or
... that judgment be rendered for the plaintiff: Indeed, this rule against the splitting up of a cause of action is an old one. In fact, it omission of the plaintiff which constitutes a violation of the plaintiff's right which
preceded the Rules of Court or any statutory provision. In Bachrach Motor Co., Inc. defendant had the duty to respect. For purposes, however, of the rule against
(a) Ordering the defendant to pay the penalty and/or interest therein vs. Icarangal et al.,1 this Court already explained its meaning, origin and purpose, splitting up of a cause of action, a clearer understanding can be achieved, if
Section 4 of Ordinance No. 66, Series of 1949, as amended by Ordinance No. 150, thus: together with these elements, the right to relief is considered.
Series of 1959 the total amount of THIRTY SIX THOUSAND FIVE HUNDRED NINETEEN
PESOS and TEN CENTAVOS (P36,519.10), representing the surcharges from August, But, even if we have no such section 708 of our Code of Civil Procedure, or section In the last analysis, a cause of action is basically an act or an omission or several acts
1959 to December, 1962, inclusive, and the 24% penalty computed as of June 30, 59 of the Insolvency Law, we have still the rule against splitting a single cause of or omissions. A single act or omission can be violative of various rights at the same
1964, from the amount of P152,162.90, with legal rate of interest thereon from the action. This rule, though not contained in any statutory provision, has been applied time, as when the act constitutes juridically a violation of several separate and
date of the filing of this complaint until complete payment thereof;" plus costs, etc. by this court in all appropriate cases. Thus, in Santos vs. Moir (36 Phil. 350, 359), we distinct legal obligations. This happens, for example, when a passenger of a
said: "It is well recognized that a party cannot split a single cause of action into parts common carrier, such as a taxi, is injured in a collision thereof with another vehicle
On July 24, 1964, appellant filed a motion to dismiss the case on the grounds that: and sue on each part separately. A complaint for the recovery of personal property due to the negligence of the respective drivers of both vehicles. In such a case,
(1) the cause of action is barred by a prior judgment, and (2) a party may not with damages for detention states a single cause of action which cannot be divided several rights of the passenger are violated, inter alia, (1) the right to be safe from
institute more than one suit for a single cause of action. This motion was denied by into an action for possession and one for damages; and if suit is brought for the negligent acts of either or both the drivers under the law on culpa-acquiliana or
the court a quo in its order dated August 22, 1964; so appellant filed its answer possession only a subsequent action cannot be maintained to recover the damages quasi-delict; (2) the right to be safe from criminal negligence of the said drivers
wherein it substantially reiterated, as affirmative defenses, the above-mentioned resulting from the unlawful detention." In Rubio de Larena vs. Villanueva (53 Phil. under the penal laws; and (3) the right to be safely conducted to his destination
grounds of its motion to dismiss. Thereafter, the parties submitted the case for 923, 927), we reiterated the rule by stating that "... a party will not be permitted to under the contract of carriage and the law covering the same, not counting
judgment on the pleadings, whereupon, the court rendered judgment on March 11, split up a single cause of action and make it the basis for several suits" and that anymore the provisions of Article 33 of the Civil Code. The violation of each of these
1965 with the following dispositive portion: . when a lease provides for the payment of the rent in separate installments, each rights is a cause of action in itself. Hence, such a passenger has at least three causes
installment constitutes an independent cause of action, but when, at the time the of action arising from the same act. On the other hand, it can happen also that
IN VIEW THEREOF, judgment is hereby rendered ordering the defendant San Miguel complaint is filed, there are several installments due, all of them constitute a single several acts or omissions may violate only one right, in which case, there would be
Brewery, Inc. to pay to the plaintiff the sum of P36,519.10 representing the cause of action and should be included in a single complaint, and if some of them only one cause of action. Again the violation of a single right may give rise to more
surcharges as provided in section 4 of Ordinance 66, series of 1949 of the City of are not so included, they are barred. The same doctrine is stated in Lavarro vs. than one relief. In other words, for a single cause of action or violation of a right, the
Bacolod. No costs. Labitoria (54 Phil. 788), wherein we said that "a party will not be permitted to split plaintiff may be entitled to several reliefs. It is the filing of separate complaints for
up a single cause of action and make it a basis for several suits" and that a claim for these several reliefs that constitutes splitting up of the cause of action. This is what
Appellants moved for reconsideration but its motion was denied, hence, the instant partition of real property as well as for improvements constitutes a single cause of is prohibited by the rule.
appeal. action, and a complaint for partition alone bars a subsequent complaint for the
improvements. And in Blossom & Co. vs. Manila Gas Corporation (55 Phil. 226-240), In the case at bar, when appellant failed and refused to pay the difference in
Appellant has only one assignment of error, to wit: we held that "as a general rule a contract to do several things at several times is bottling charges from July 1, 1959, such act of appellant in violation of the right of
divisible in its nature, so as to authorize successive actions; and a judgment appellee to be paid said charges in full under the Ordinance, was one single cause of
THE LOWER COURT ERRED IN FINDING THE APPELLANT LIABLE TO THE APPELLEE recovered for a single breach of a continuing contract or covenant is no bar to suit action, but under the Ordinance, appellee became entitled, as a result of such non-
FOR THE SUM OF P36,519.10 REPRESENTING SURCHARGES AS PROVIDED IN TAX for a subsequent breach thereof. But where the covenant or contract is entire, and payment, to two reliefs, namely: (1) the recovery of the balance of the basic
ORDINANCE NO. 66, SERIES OF 1949, AS AMENDED, OF THE CITY OF BACOLOD. the breach total, there can be only one action, and plaintiff must therein recover all charges; and (2) the payment of the corresponding surcharges, the latter being
his damages. merely a consequence of the failure to pay the former. Stated differently, the
Under this, it argues that the action of appellee cannot be maintained because (1) a obligation of appellant to pay the surcharges arose from the violation by said
party may not institute more than one suit for a single cause of action; and (2) The rule against splitting a single cause of action is intended "to prevent repeated appellant of the same right of appellee from which the obligation to pay the basic
appellee's action for recovery of the surcharges in question is barred by prior litigation between the same parties in regard to the same subject of controversy; to charges also arose. Upon these facts, it is obvious that appellee has filed separate
judgment. protect defendant from unnecessary vexation; and to avoid the costs and expenses complaints for each of two reliefs related to the same single cause of action,
incident to numerous suits." (1 C.J. 1107) It comes from that old maxim nemo debet thereby splitting up the said cause of action.
We find appellant's position essentially correct. There is no question that appellee bis vexare pro una et eadem causa (no man shall be twice vexed for one and the
split up its cause of action when it filed the first complaint on March 23, 1960, same cause). (Ex parte Lange, 18 Wall 163, 168; 21 Law Ed. 872; also U.S. vs. The trial court held that inasmuch as there was no demand in the complaint in the
seeking the recovery of only the bottling taxes or charges plus legal interest, Throckmorton, 98 U.S. 61; 25 Law Ed. 93). And it developed, certainly not as an first case for the payment of the surcharges, unlike in the case of Collector of
without mentioning in any manner the surcharges. original legal right of the defendant, but as an interposition of courts upon Internal Revenue vs. Blas Gutierrez, et al., G.R. No. L-13819. May 25, 1960, wherein
principles of public policy to prevent inconvenience and hardship incident to there was such a demand, there is no bar by prior judgment as to said surcharges,
The rule on the matter is clear. Sections 3 and 4 of Rule 2 of the Rules of Court of repeated and unnecessary litigations. (1 C. J. 1107). the same not having been "raised as an issue or cause of action in Civil Case No.
1940 which were still in force then provided: 5693." This holding is erroneous.
pending case No. 1800 is an action between the same parties for the same cause of
Section 4 of Rule 2, above-quoted, is unmistakably clear as to the effect of the G.R. No. L-23233 September 28, 1967 action, and that the complaint in case No. 1804 violates "the rule against splitting a
splitting up of a cause of action. It says, "if separate complaints are brought for cause of action." Subsequently, or on March 12, 1963, Enguerra sought to have
different parts (reliefs) of a single cause of action, the filing of the first (complaint) LUIS ENGUERRA, plaintiff -appellant, Dolosa declared in default, upon the ground that his motion to dismiss has been
may be pleaded in abatement of the others, and a judgment upon the merits in vs. filed one (1) day late, and that it was merely pro forma, because of which it did not
either is available as a bar in the others." In other words, whenever a plaintiff has ANTONIO DOLOSA, defendant-appellee. suspend the running of the period to file his answer. The Court of First Instance
filed more than one complaint for the same violation of a right, the filing of the first granted the motion to dismiss and denied the motion to declare Dolosa in default. A
complaint on any of the reliefs born of the said violation constitutes a bar to any Esteban Escalante, Jr. for plaintiff-appellant. Ruben M. Paps for defendant-appellee. reconsideration of the orders to this effect having been denied, Enguerra interposed
action on any of the other possible reliefs arising from the same violation, whether the present appeal, directly to the Supreme Court, alleging that the lower court had
the first action is still pending, in which event, the defense to the subsequent erred (a) in not declaring Dolosa in default; and (b) in dismissing the complaint
complaint would be litis pendentia, or it has already been finally terminated, in CONCEPCION, C.J.: herein.
which case, the defense would be res adjudicata.2 Indeed, litis pendentia and res
adjudicata, on the one hand, and splitting up a cause of action on the other, are not
separate and distinct defenses, since either of the former is by law only the result or
effect of the latter, or, better said, the sanction for or behind it. Appeal, by plaintiff Luis Enguerra, from an order of dismissal of the Court of First
Instance of Sorsogon. As regards the first alleged error, Enguerra maintains that the extension of 30 days
It thus results that the judgment of the lower court must be, as it is hereby, granted in the order of February 6, 1963, expired on March 7, 1963, because the
reversed and the complaint of appellee is dismissed. No costs. order stated that said period should be "counted from today," which, Enguerra
maintains, should be understood to mean from February 6 to March 7, 1963. An
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Plaintiff Enguerra was chief baker for the De Lux identical theory was rejected in Ulpiando vs. Court of Agrarian Relations,1 in the
Fernando and Teehankee, JJ., concur. Bakery and Grocery, in Sorsogon, Sorsogon, from June following language:
18, 1959 to October 8, 1961. On December 14, 1961, he filed, with the municipal
court of Sorsogon, Sorsogon, a complaint, against defendant Antonio Dolosa, as
owner of said establishment, to recover the sum of P4,056.00, for unpaid overtime
services allegedly rendered during said period. The court having later dismissed said The petitioners raise procedural questions. On 2
complaint, Enguerra appealed to the Court of First Instance of Sorsogon, where the August 1957 the respondents received a copy of the decision dated 22 July 1957
case was docketed as Civil Case No. 1800. (See Annexes E & F). On
15 August they filed a "petition for extension of time to file motion for
reconsideration," dated 13 August, because of lack of material time to read the
voluminous transcript of stenographic notes and for that reason they could not
Soon thereafter, or on January 24, 1963, Enguerra filed, with the same Court of First readily formulate their arguments in support of the motion for reconsideration
Instance, another complaint against Dolosa, which was docketed as Civil Case No. (Annex F). On the same day, 15
1804, to recover the following: August, the Court entered an order granting the respondents "fifteen (15) days
counted from today within which to file their motion for reconsideration of the
decision rendered on July 29, 1957 (should be
22) in the instant case." (Italics supplied.) On August
1. Termination Pay P392.74 30, the respondents mailed their motion for reconsideration in the post office of
Cuyapo, Nueva Ecija. The petitioners claim that counting from 15
2. Underpayment of wages 64.90 August, the day the 15-day period commenced to run, to 30 August, when the
respondents mailed their
3. Compensatory Damages, unearned income from unjustified dismissal 6,363.22
motion for reconsideration, 16 days already had elapsed, and contend that the
4. Compensatory Damages, unpaid overtime 4,347.89 Court had already lost jurisdiction of the case and could no longer reconsider its
decision dated 22 July.
5. Moral Damages 5,000.00

Exemplary Damages 2,500.00


xxx xxx xxx
Attorney's fees 3,500.00

Rule 28 of the Rules of Court provides:


On motion of Dolosa, he was granted, on February 6,
1963, an extension of 30 days, "counted from to-day," to submit his answer. On
March 8, 1963, he filed, instead, a motion to dismiss, upon the ground that said
"In computing any period of time prescribed or allowed by these rules, by order of 1959 to October 8, 1961, have been violated by the [G.R. No. 111401. October 17, 1996]
court, or by any applicable statute, the day of the act, event, or default after which latter. The alleged violations may have several aspects, such as: 1) underpayment of
the designated period of time begins to run is not to be included. The last day of the wages; 2) nonpayment of overtime; 3) transfer, allegedly equivalent to unjustified ERIBERTO G. VALENCIA, substituted by his heirs: REBECCA S. VDA. DE VALENCIA,
period so computed is to be included, unless it is a Sunday or a legal holiday, in dismissal, and, hence, the claim for separation pay; 4) damages (compensatory, MA. CAROLINA S. VALENCIA, MA. ANTONETTE S. VALENCIA, PETER GELVIC S.
which event the time shall run until the end of the next day which is neither a moral and exemplary, and attorney's fees). Yet, the cause of action the spring VALENCIA, JOSE THERONE S. VALENCIA and MA. SOPHEA S. VALENCIA, petitioners,
Sunday nor a holiday."1awphl.nt from which the right to sue emanates was only one and the same breach of their vs.
contract of employment, without which none of the claims made by plaintiff would COURT OF APPEALS, RICARDO BAGTAS and MIGUEL BUNYE, respondents.
have no leg to stand on.
DECISION
This rule adopts the exclude-the-first and include-the- last day method for
computing any period of time. Therefore, excluding the day when the order PANGANIBAN, J.:
granting their petition for extension of time to file motion for reconsideration was The statutory provisions regarding termination pay, minimum wage, overtime and
entered by the Court (15 August) and including the day the respondents mailed damages are as much a part of said contract of employment as the pertinent Should the action for rescission of a lease contract (commenced by petitioner-lessor
their motion for reconsideration (30 August), only 15 days had elapsed. Hence, the provisions of the Civil Code on obligations and contracts, in general, and on lease against private respondents-lessees) be deemed to bar -- on the ground of litis
respondents' motion for of services, in pendentia -- an action for damages brought by private respondents by reason of
petitioners violation of the restraining orders issued by the Court of Appeals which
reconsideration was filed within the extension of time granted by the Court. particular. The difference between underpayment of wages on a given day and required the parties to maintain the status quo insofar as the lease relationship is
nonpayment of overtime for work done on the same day, is not insofar as the concerned?
cause of action therefore is concerned materially at variance from that which
exists between said underpayment of wages for the day given and the similar The Court answers this query in the negative while resolving the instant petition for
No reason had been advanced, and we find none, to depart from this view, which is underpayment of wages for the next day. Indeed, if one month later, the aggrieved review on certiorari, which assails the Decision[1] of the respondent Court of
in line with the spirit and the letter of our laws and the Rules of Court, and is, laborer should decide to sue the employer for breach of contract, it is obvious that Appeals[2] promulgated on February 18, 1993 in CA-G.R. CV No. 27590, affirming
accordingly, reiterated. the former cannot file a complaint for some effects of such breach, and another the decision[3] of the trial court[4] awarding moral and exemplary damages plus
complaint for its other effects. He must include in the complaint his claim for the attorneys fees to herein private respondents.
underpayment for the aforementioned two (2) days, both being overdue at the time
of the commencement of the action.3 Similarly, if underpayment of the minimum The Facts
As regards the second procedural ground of the objection to the motion to dismiss, wage for a given day or month were coupled with failure or refusal to pay overtime,
it should be noted that a motion is said to be pro forma when it is apparent for the same day or month, a complaint filed thereafter should include both, The facts are not controverted by the parties, and therefore, the factual recitals in
therefrom that the movant has not endeavored to make it reasonably persuasive or underpayment of wages and overtime pay. In other words, Courts should not the trial courts decision, which were quoted by the respondent appellate court in
convincing, his purpose being merely to gain time or to delay the proceedings. In sanction a complaint for one, and another action for the other. Hence, in his own its own Decision, are hereinbelow reproduced:[5]
the case at bar, the motion explicitly states "that there is another action pending complaint herein, plaintiff has, in fact, included his claims for alleged underpayment
between the same parties for the same cause, namely: Luis Enguerra vs. Antonio of wages, overtime, compensatory, moral, and exemplary damages, and attorney's The evidence shows that (private respondents) were lessees of a 24-hectare
Dolosa Civil Case No. 1800, now pending before this Honorable Court;" and "that fees, under one cause of action. fishpond owned by (petitioner as substituted by his heirs) located at Paombong,
the filing of the above entitled case is a violation of the rule against splitting a Bulacan. The lease is covered by a lease contract by and between the said parties
cause of action." (Exh. A). The lease [executed on March 1, 1982] was supposed to have expired on
May 1987, but before the said date, (petitioner) filed [on June 25, 1984] a complaint
He is in estoppel, therefore, to deny that the cause of action asserted in both cases against (private respondents) for the rescission of the lease contract. The Regional
is one and the same. At any rate, it is clear that the overtime claimed in the Trial Court of Malolos, Bulacan which took cognizance of said case issued a writ of
Having thus expressed, not only the legal grounds for the motion, but, also the preliminary Mandatory Injunction ordering (private respondents) to surrender to
particular and concrete facts upon which said grounds rely with specification of present case is the very object of Case No. 1800. Moreover, it is well settled that the (petitioner) possession of the fishpond. In view whereof, (private respondents)
the title and number of the case on which the motion was based and of the court damages incidental to a cause of action cannot be made the subject of a suit filed a Petition for Certiorari with the Intermediate Appellate Court. The said court
before which the case is pending, coupled with the other circumstances independent from the principal cause.4 on September 21, 1984 issued a restraining order enjoining (petitioner) and the
Regional Trial Court from enforcing the mandatory injunction (Exh. J of [private
respondents] and Exh. 11 of [petitioner]).
hereinafter adverted to and appearing in the records of both cases said motion,
manifestly, is not pro forma2 and its presentation suspended the running of the WHEREFORE, the order appealed from should be, as it is hereby, affirmed, with At the hearing in the Intermediate Appellate Court the parties agreed to maintain a
period for the filing of defendant's answer. costs against plaintiff, Luis Enguerra. It is so ordered. status quo and the fishpond hut would be utilized by (private respondents) until the
case is resolved by the Regional Trial Court of Malolos (Exh. N). However, despite
this order of the Appellate Court (petitioner) filed an ex-parte motion for the
designation of a member of the Philippine Constabulary to maintain order in the
The next and most important question for determination is whether or not Civil Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ., place which the Regional Trial Court of Malolos granted. With said order
Case No. 1800 is for the same cause of action as Civil Case No. 1804, both being concur. (petitioner) with the aid of PC men was able to eject plaintiffs from the main hut.
admittedly between the same parties. In this connection, it should be noted that (Petitioner) and their men also dried up a portion of the leased property where
the basis of the complaints in both cases is the same, namely: that Enguerra's rights Bengzon, J.P., J., took no part (private respondents) have previously scattered chemicals and fertilizer to grow fish
as Dolosa's chief baker, from June 18, food. As a result no fish food grew causing damage to (private respondents).
damages in the amount of P20,000.00 and to pay plaintiffs P10,000.00 as and for Petitioner argues that, for the aforesaid reasons, if indeed private respondents
(Private respondents) were also prevented from transferring the bigger fish to a attorneys fees. suffered any damage, they should have filed a compulsory counterclaim or
more spacious portion of the fishpond resulting in death to many fishes which again supplemental pleading for the alleged acts of violation of restraining orders which
caused damages to (private respondents). Subsequently another person came to Petitioner and private respondents, being equally dissatisfied with the decision of are transactions, occurrence or event which have happened since the date of the
the fishpond and introduced himself as the new lessee. The Regional Trial Court of the trial court, appealed to respondent Court. Petitioner alleged litis pendentia and pleading sought to be supplemented.[12] He insists that the filing of a compulsory
Malolos then issued another order (Exh. 5-2) declaring that all the fishes located in contested the award of damages by the trial court; private respondents on the counterclaim is the proper recourse considering that petitioner had posted a bond
the fishpond remain the properties of (private respondents) subject to their other hand were aggrieved that the trial court failed to award actual damages, and in the rescission case to answer for damages that private respondents might suffer
disposal, however the same was not honored by (petitioner). in addition sought an increase in the amount of moral and exemplary damages by reason of the issuance of the preliminary mandatory injunction.[13] He also
granted. ventures to say that the case filed with the Manila court can even be considered as
(Private respondents) then appealed again to the IAC which issued a resolution a form of forum shopping.[14]
enjoining (petitioner) to maintain and observe status quo (Exh. V-VI), and On appeal, respondent Court affirmed the decision of the Manila RTC, and held that
subsequently another resolution categorically declaring (petitioner) Valencia there was no litis pendentia:[8] In fine, petitioner asserts that under the rule on litis pendentia the action for
without right of possession under status quo, and to vacate the main hut of the rescission filed with the Bulacan court bars the action for damages filed in Manila. It
fishpond (Exh. Y). It was only then that (private respondents) gained complete and It is not disputed that there was another suit, Civil Case No. 7554-M, then pending is interesting to note that petitioner does not contest the correctness of the award
total control of the subject fishpond including its huts. before the Regional Trial Court in Bulacan between plaintiffs-appellants and of damages made by respondent Court; he merely insists on the dismissal (?) of the
defendant-appellant. To be sure, that case involved the same property. There, case for damages on the ground of litis pendentia, there being a pending case for
(Private respondents) are now asking [the Regional Trial Court of Manila] for appellant Valencia sought the rescission of the lease contract he had entered into rescission in which private respondents could have asserted their claim for
exemplary damages worth P400,000.00, moral damages of P400,000.00, attorneys with plaintiffs on March 1, 1982. He based his claim upon the alleged failure of damages. This being his lone assigned issue, the clear and unavoidable implication
fees of P100,000.00 and costs of suit. plaintiffs to abide by the stipulations of their agreement. In this case under is that if his contention is struck down, he is deemed to have waived any objection
consideration, plaintiffs Bagtas and Bunye are asking for compensation for the against the award of damages by respondent Court.
A motion to Dismiss was filed by (petitioner) on April 8, 1985 which was opposed by damages that they had sustained by reason of Valencias violation of certain
(private respondents). The motion to Dismiss was denied by the court on March 4, resolutions issued by this Court in (CA)-G.R. SP No. 04283 (Exhs. J & N). Clearly, The Courts Ruling
1986. A Motion for Reconsideration was filed by (petitioner) which was denied by the causes of action in the two cases are not the same; they are founded on
the court. different acts; the rights violated are different; and the reliefs sought are also Petitioners arguments are legally tenuous and patently unmeritorious.
different. Consequently, defendant-appellants submission that lis pendens is a
After (petitioner) filed his Answer, pre-trial was set on November 14, 1986 and the ground for dismissal of plaintiffs suit is not valid. Litis Pendencia and Splitting of a Single Cause of Action
same was terminated on February 26, 1987. Trial on the merits was held on April 3,
1987. The dispositive portion of the now-assailed Decision reads:[9] Before discussing the petition on the merits, it is well to clarify certain concepts at
the outset. If a party-litigant splits his single cause of action, the other action or
The evidence for the prosecution was brought forth through the testimonies of WHEREFORE, judgment is hereby rendered affirming the appealed decision with actions filed may be dismissed by invoking litis pendentia, pursuant to Section 1(e),
Ricardo Bagtas and Miguel Bunye and its Exhibits A to CC. the modification that plaintiffs-appellants [private respondents herein] are hereby Rule 16 of the Revised Rules of Court.[15] A party who splits his single cause of
additionally awarded the sum of P50,000.00 as and for actual damages. Costs action cannot be accused of also violating the rule against litis pendentia as the
Instead of presenting evidence x x x, (petitioner) filed [on February 24, 1989] a against defendant-appellant [herein petitioner]. former, a malpractice, gives rise to the latter, a ground for a motion to dismiss. This
Second Motion to Dismiss which was opposed by counsel for (private respondents). is made clear by Section 4, Rule 2 of the Rules, which speaks of cause and effect:
The Second Motion to Dismiss was denied by the court [on April 13, 1989].[6] Petitioners motion for reconsideration dated March 9, 1993 was denied by
respondent Court. Thus he comes to us seeking relief. Sec. 4. Effect of splitting a single cause of action. -- If two or more complaints are
On August 31, 1989, the (petitioner) Eriberto Valencia testified, however his brought for different parts of a single cause of action, the filing of the first may be
testimony was not terminated in view of the objection of counsel for the (private The Issue pleaded in abatement of the other or others, in accordance with section 1 (e) of
respondents) who claimed that the questions propounded to the witness touched Rule 16, and a judgment upon the merits in any one is available as a bar in the
on matters which have been passed upon by the Regional Trial Court of Malolos. Petitioner raises the following lone legal issue:[10] others.

(Petitioner) contended that proceedings in this court [RTC of Manila] should be THE DENIAL ORDERS AND THE DECISION OF THE MANILA COURT IN CIVIL CASE NO. Now, to the main issues.
suspended until after the case in the Regional Trial Court of Malolos which was 85-29514 AND THE DECISION OF RESPONDENT COURT IN CA-G.R. CV NO. 27590 ARE
appealed to the Court of Appeals is resolved, and filed a Motion to this effect, but NOT IN ACCORD WITH THE LAW AND THE DECISIONS ON LITIS PENDENTIA. No Litis Pendentia
the court denied the same.
Petitioner contends that the error in the Decision lies in its failure to properly This Court has consistently held, in a long line of cases, that the requisites for the
The trial court gave counsel for petitioner time to file the necessary pleadings, as appreciate the complaint filed with the Manila court, which, when taken together existence of litis pendentia as a ground for dismissal of an action are as follows:
prayed for, but he failed to do so. During the subsequent hearing, neither with private respondents documentary and testimonial evidence, discloses that the
petitioner nor his counsel appeared. The trial court thus deemed petitioner to have alleged wrongful acts for which they claimed damages arose out of, were connected 1) identity of parties, or at least such parties as represent the same interest in both
waived his right to present further evidence, and the case was considered with, and/or were incidents of the proceedings in the action for rescission before actions;
submitted for decision. On March 23, 1990, the trial court ruled in favor of private the Bulacan court. Petitioner claims that the action for damages commenced by
respondents, the fallo of its decision reading as follows:[7] private respondents constitutes splitting of a single cause of action which is 2) identity of rights asserted and relief prayed for, the relief being founded on the
prohibited by the Revised Rules of Court.[11] same facts; and
WHEREFORE, premises considered, the court orders defendant (petitioner herein)
to pay the plaintiffs moral damages in the amount of P30,000.00, exemplary
3) the identity with respect to the two preceding particulars in the two cases is such In Jose Cuenco Borromeo, et al., vs. Hon. Intermediate Appellate Court, et al.,[20] obligated to account to the defendant in the injunction suit for all damages, or costs
that any judgment that may be rendered in the pending case, regardless of which this Court capsulized the essence of what is abhorrent in the malpractice of forum- and reasonable counsels fees, incurred or sustained by the latter in case it is
party is successful, would amount to res judicata in the other case.[16] shopping, and the following excerpt shows why there can be no forum-shopping in determined that the injunction was wrongfully issued.[23]
this case:
There may have been identity of parties in the two actions, but the other two In the case at bar, the damages and expenses sustained by private respondents
requisites are not similarly satisfied. The case in Bulacan was of course founded Ultimately, what is truly important to consider in determining whether forum- were a result of the willful contravention by petitioner of the IAC restraining orders,
upon alleged violations by the private respondents as lessees of certain stipulations shopping exists or not is the vexation caused the courts and parties-litigant by a and thus, outside the coverage of the injunction bond.
in their lease contract with petitioner, and therefore, it cannot be gainsaid that the party who asks different courts to rule on the same or related causes and/or to
rights asserted (by petitioner as lessor) and relief sought therein (i.e., rescission of grant the same or substantially the same reliefs, in the process creating the WHEREFORE, in view of the foregoing, the instant petition is hereby DENIED and the
the lease contract) were entirely different from those asserted in Manila. The latter possibility of conflicting decisions being rendered by the different fora upon the appealed Decision and Resolution are AFFIRMED. Costs against petitioner.
case stemmed from the prejudice suffered by private respondents due to same issue.
petitioners violation of the IACs restraining orders for the observance of status quo SO ORDERED.
between the parties, the relief demanded therein consisting of actual, moral and Claim for Damages Not A Compulsory Counterclaim
exemplary damages. Thus, the respondent Court committed no reversible error in Narvasa, C.J. (Chairman), Davide, Jr., Melo, and Francisco, JJ., concur.
holding that the causes of action in the two cases are not the same; they are Petitioner erroneously insists that private respondents claim for damages should
founded on different acts; the rights violated are different; and the reliefs sought have been made through a compulsory counterclaim in the same action for
are also different. rescission. This could not have been done as the same cannot be considered or
treated as a compulsory counterclaim in the Bulacan case. This Court, in an early
The third requisite constitutes the test of identity in the aforestated particulars, and case,[21] stated certain criteria or tests by which the compulsory or permissive
in connection therewith, this Court quoted 1 Cyc., 28[17] thus: nature of specific counterclaims can be determined, summarized as follows:

A plea of the pendency of a prior action is not available unless the prior action is of 1. Are the issues of fact and law raised by the claim and counterclaim largely
such a character that, had a judgment been rendered therein on the merits, such a the same?
judgment would be conclusive between the parties and could be pleaded in bar of
the second action. (underscoring supplied) 2. Would res judicata bar a subsequent suit on defendants claim absent the
compulsory counterclaim rule?
The res judicata test when applied to the two cases in question indicate in no
uncertain terms that regardless of whoever will ultimately prevail in the Bulacan 3. Will substantially the same evidence support or refute plaintiffs claim as well as
case, the final judgment therein -- whether granting or denying rescission of the defendants counterclaim?
lease contract -- will not be conclusive between the parties in the Manila case, and
vice versa. In other words, to our mind, the outcome of the Bulacan case has 4. Is there any logical relation between the claim and the counterclaim?
nothing to do with whether petitioner should be held liable for the damage inflicted
upon private respondents as a result of his violating the IAC restraining orders, the In this instance, the answers to all four queries are in the negative.
two cases having arisen from different acts and environmental circumstances.
Was Injunction Bond Sufficient Protection?
No Forum-Shopping
Petitioners argument that the bond he posted for the issuance by the Bulacan trial
Petitioners allegations to the contrary notwithstanding, forum-shopping is not court of the writ of preliminary mandatory injunction could have answered for the
present in the case at bar. The established rule is that for forum-shopping to exist, damages claimed by private respondents is untenable. Such bond was required for
both actions must involve the same transactions, same essential facts and a specific purpose, to wit:[22]
circumstances and must raise identical causes of actions, subject matter, and
issues.[18] As held by this Court in a recent case:[19] (b) The plaintiff files with the clerk or judge of the court in which the action is
pending a bond executed to the party enjoined, in an amount to be fixed by the
The test for determining whether a party violated the rule against forum shopping court, to the effect that the plaintiff will pay to such party all damages which he may
has been laid down in the 1986 case of Buan vs. Lopez (145 SCRA 34, October 13, sustain by reason of the injunction if the court should finally decide that the plaintiff
1986), also by Chief Justice Narvasa, and that is, forum shopping exists where the was not entitled thereto.
elements of litis pendentia are present or where a final judgment in one case will
amount to res judicata in the other x x x (underscoring supplied) No further scrutiny is necessary. The said bond was supposed to answer only for
damages which may be sustained by private respondents, against whom the
We have already established that litis pendentia could not have been properly mandatory injunction was issued, by reason of the issuance thereof, and not to
pleaded to abate the second action brought in Manila, and that a final judgment in answer for damages caused by the actuations of petitioner, which may or may not
either case would not be res judicata with respect to the other. Thus, the allegation be related at all to the implementation of the mandatory injunction. The purpose of
of forum-shopping must fail. the injunction bond is to protect the defendant against loss or damage by reason of
the injunction in case the court finally decides that the plaintiff was not entitled to
it, and the bond is usually conditioned accordingly. Thus, the bondsmen are
On October 30, 1980, petitioner filed a motion for reconsideration of the said latter
ACTION IN REM AND ACTION PERSONAM Thirteen (13) years after Ching Leng's death, a suit against him was commenced on order but the same was denied by the trial court on April 12, 1981 (pp. 77-79, Ibid.)
December 27, 1978 by private respondent Pedro Asedillo with the Court of First
G.R. No. L-59731 January 11, 1990 Instance of Rizal (now RTC), Branch XXVII, Pasay City docketed as Civil Case No. Petitioner filed an original petition for certiorari with the Court of Appeals but the
6888-P for reconveyance of the abovesaid property and cancellation of T.C.T. No. same was dismissed on September 30, 1981. His motion for reconsideration was
ALFREDO CHING, petitioner, 91137 in his favor based on possession (p. 33, Ibid.). Ching Leng's last known likewise denied on February 10, 1982 (pp. 81-90, Ibid.)
vs. address is No. 44 Libertad Street, Pasay City which appears on the face of T.C.T. No.
THE HONORABLE COURT OF APPEALS & PEDRO ASEDILLO, respondents. 91137 (not No. 441 Libertad Street, Pasay City, as alleged in private respondent's Private respondent Pedro Asedillo died on June 7, 1981 at Makati, Metro Manila
complaint). (Order dated May 29, 1980, p. 55, Ibid.). An amended complaint was during the pendency of the case with the Court of Appeals (p. 106, CA Rollo).
Joaquin E. Chipeco & Lorenzo D. Fuggan for petitioners. filed by private respondent against Ching Leng and/or Estate of Ching Leng on
January 30, 1979 alleging "That on account of the fact that the defendant has been Hence, the instant petition.
Edgardo Salandanan for private respondent. residing abroad up to the present, and it is not known whether the defendant is still
alive or dead, he or his estate may be served by summons and other processes only Private respondent's comment was filed on June 1, 1982 (p. 117, Ibid.) in
by publication;" (p. 38, Ibid.). Summons by publication to Ching Leng and/or his compliance with the resolution dated April 26, 1982 (p. 109, Ibid.) Petitioner filed a
PARAS, J.: estate was directed by the trial court in its order dated February 7, 1979. The reply to comment on June 18, 1982 (p. 159, Ibid ), and the Court gave due course to
summons and the complaint were published in the "Economic Monitor", a the petition in the resolution of June 28, 1982 (p. 191, Ibid.)
This is a petition for review on certiorari which seeks to nullify the decision of newspaper of general circulation in the province of Rizal including Pasay City on
respondent Court of Appeals (penned by Hon. Rodolfo A. Nocon with the March 5, 12 and 19, 1979. Despite the lapse of the sixty (60) day period within Petitioner raised the following:
concurrence of Hon. Crisolito Pascual and Juan A. Sison) in CA-G.R. No. 12358-SP which to answer defendant failed to file a responsive pleading and on motion of
entitled Alfredo Ching v. Hon. M. V. Romillo, et al. which in effect affirmed the counsel for the private respondent, the court a quo in its order dated May 25, 1979, ASSIGNMENTS OF ERROR
decision of the Court of First Instance of Rizal, now Regional Trial Court (penned by allowed the presentation of evidence ex-parte. A judgment by default was rendered
Judge Manuel V. Romillo, Jr. then District Judge, Branch XXVII Pasay City) granting on June 15, 1979, the decretal portion of which reads: I
ex-parte the cancellation of title registered in the name of Ching Leng in favor of
Pedro Asedillo in Civil Case No. 6888-P entitled Pedro Asedillo v. Ching Leng and/or WHEREFORE, finding plaintiffs causes of action in the complaint to be duly WHETHER OR NOT A DEAD MAN CHING LENG AND/OR HIS ESTATE MAY BE VALIDLY
Estate of Ching Leng. substantiated by the evidence, judgment is hereby rendered in favor of the plaintiff SERVED WITH SUMMONS AND DECISION BY PUBLICATION.
and against the defendant declaring the former (Pedro Asedillo) to be the true and
The facts as culled from the records disclose that: absolute owner of the property covered by T.C.T. No. 91137; ordering the II
defendant to reconvey the said property in favor of the plaintiff; sentencing the
In May 1960, Decree No. N-78716 was issued to spouses Maximo Nofuente and defendant Ching Leng and/or the administrator of his estate to surrender to the WHETHER OR NOT AN ACTION FOR RECONVEYANCE OF PROPERTY AND
Dominga Lumandan in Land Registration Case No. N-2579 of the Court of First Register of Deeds of the Province of Rizal the owner's copy of T.C.T. No. 91137 so CANCELLATION OF TITLE IS IN PERSONAM, AND IF SO, WOULD A DEAD MAN
Instance of Rizal and Original Certificate of Title No. 2433 correspondingly given by that the same may be cancelled failing in which the said T.C.T. No. 91137 is hereby AND/OR HIS ESTATE BE BOUND BY SERVICE OF SUMMONS AND DECISION BY
the Register of Deeds for the Province of Rizal covering a parcel of land situated at cancelled and the Register of Deeds of the Province of Rizal is hereby ordered to PUBLICATION.
Sitio of Kay-Biga Barrio of San Dionisio, Municipality of Paranaque, Province of Rizal, issue, in lieu thereof, a new transfer certificate of title over the said property in the
with an area of 51,852 square meters (Exhibit "7", p. 80, CA, Rollo). name of the plaintiff Pedro Asedillo of legal age, and a resident of Estrella Street, III
Makati, Metro Manila, upon payment of the fees that may be required therefor,
In August 1960, 5/6 portion of the property was reconveyed by said spouses to including the realty taxes due the Government. WHETHER OR NOT THE PROCEEDINGS FOR RECONVEYANCE AND CANCELLATION OF
Francisco, Regina, Perfects, Constancio and Matilde all surnamed Nofuente and TITLE CAN BE HELD EX-PARTE.
Transfer Certificate of Title No. 78633 was issued on August 10, 1960 accordingly IT IS SO ORDERED. (pp. 42-44, Ibid.)
(Exhibit "8", pp. 81 and 82, Ibid.). IV
Said decision was likewise served by publication on July 2, 9 and 16, 1979 pursuant
By virtue of a sale to Ching Leng with postal address at No. 44 Libertad Street, Pasay to Section 7 of Rule 13 of the Revised Rules of Court (CA Decision, pp. 83-84, Ibid.). WHETHER OR NOT THE TRIAL COURT ACQUIRED JURISDICTION OVER THE SUBJECT
City, Transfer Certificate of Title No. 91137 was issued on September 18, 1961 and The title over the property in the name of Ching Leng was cancelled and a new MATTER AND THE PARTIES.
T.C.T. No. 78633 was deemed cancelled. (Exhibit "5-2", pp. 76-77 and 83, Ibid.). Transfer Certificate of Title was issued in favor of Pedro Asedillo (p. 77, CA Rollo)
who subsequently sold the property to Villa Esperanza Development, Inc. on V
On October 19, 1965, Ching Leng died in Boston, Massachusetts, United States of September 3, 1979 (pp. 125-126, Ibid.).
America. His legitimate son Alfredo Ching filed with the Court of First Instance of WHETHER OR NOT PRIVATE RESPONDENT IS GUILTY OF LACHES IN INSTITUTING THE
Rizal (now RTC) Branch III, Pasay City a petition for administration of the estate of On October 29, 1979 petitioner Alfredo Ching learned of the abovestated decision. ACTION FOR RECONVEYANCE AFTER THE LAPSE OF 19 YEARS FROM THE TIME THE
deceased Ching Leng docketed as Sp. Proc. No. 1956-P. Notice of hearing on the He filed a verified petition on November 10, 1979 to set it aside as null and void for DECREE OF REGISTRATION WAS ISSUED.
petition was duly published in the "Daily Mirror", a newspaper of general circulation lack of jurisdiction which was granted by the court on May 29, 1980 (penned by
on November 23 and 30 and December 7, 1965. No oppositors appeared at the Hon. Florentino de la Pena, Vacation Judge, pp. 54-59, Rollo). Petitioner's appeal hinges on whether or not the Court of Appeals has decided a
hearing on December 16, 1965, consequently after presentation of evidence question of substance in a way probably not in accord with law or with the
petitioner Alfredo Ching was appointed administrator of Ching Leng's estate on On motion of counsel for private respondent the said order of May 29, 1980 was applicable decisions of the Supreme Court.
December 28, 1965 and letters of administration issued on January 3, 1966 (pp. 51- reconsidered and set aside, the decision dated June 15, 1979 aforequoted
53, Rollo). The land covered by T.C.T. No. 91137 was among those included in the reinstated in the order dated September 2, 1980. (pp. 60-63, Ibid.) Petitioner avers that an action for reconveyance and cancellation of title is in
inventory submitted to the court (p. 75, Ibid.). personam and the court a quo never acquired jurisdiction over the deceased Ching
Leng and/or his estate by means of service of summons by publication in person. The ex-parte proceedings for cancellation of title could not have been held G.R. No. L-31095 June 18, 1976
accordance with the ruling laid down in Ang Lam v. Rosillosa et al., 86 Phil. 448 (Estanislao v. Honrado, supra).
[1950]. JOSE M. HERNANDEZ, petitioner,
The cited case of Perkins v. Dizon, supra is inapplicable to the case at bar since vs.
On the other hand, private respondent argues that an action for cancellation of title petitioner Perkins was a non-resident defendant sued in Philippine courts and DEVELOPMENT BANK OF THE PHILIPPINES and COURT OF FIRST INSTANCE OF
is quasi in rem, for while the judgment that may be rendered therein is not strictly a sought to be excluded from whatever interest she has in 52,874 shares of stocks BATANGAS, LIPA CITY BRANCH, respondents.
judgment in in rem, it fixes and settles the title to the property in controversy and to with Benguet Consolidated Mining Company. The action being a quasi in rem
that extent partakes of the nature of the judgment in rem, hence, service of summons by publication satisfied the constitutional requirement of due process. Tomas Yumol for petitioners.
summons by publication may be allowed unto Ching Leng who on the face of the
complaint was a non-resident of the Philippines in line with the doctrine enunciated The petition to set aside the judgment for lack of jurisdiction should have been Graciano V. Sebastian for respondent Development Bank of the Philippines.
in Perkins v. Dizon, 69 Phil. 186 [1939]. granted and the amended complaint of private respondent based on possession and
filed only in 1978 dismissed outrightly. Ching Leng is an innocent purchaser for value
The petition is impressed with merit. as shown by the evidence adduced in his behalf by petitioner herein, tracing back
the roots of his title since 1960, from the time the decree of registration was issued. MARTIN, J.:
An action to redeem, or to recover title to or possession of, real property is not an
action in rem or an action against the whole world, like a land registration The sole remedy of the landowner whose property has been wrongfully or This is a case which involves the question of proper venue in a real action.
proceeding or the probate of a will; it is an action in personam, so much so that a erroneously registered in another's nameafter one year from the date of the
judgment therein is binding only upon the parties properly impleaded and duly decreeis not to set aside the decree, but respecting the decree as incontrovertible Petitioner Jose M. Hernandez was an employee of private respondent Development
heard or given an opportunity to be heard. Actions in personam and actions in rem and no longer open to review, to bring an ordinary action in the ordinary court of Bank of the Philippines in its Legal Department for twenty-one (21) years until his
differ in that the former are directed against specific persons and seek personal justice for damages if the property has passed unto the hands of an innocent retirement on February 28, 1966 due to illness. On August 12, 1964, in due
judgments, while the latter are directed against the thing or property or status of a purchaser for value (Sy, Sr. v. Intermediate Appellate Court, G.R. No. 66742; Teoville recognition of his unqualified service as Assistant Attorney in its Legal Department,
person and seek judgments with respect thereto as against the whole world. An Development Corporation v. IAC, et al., G.R. No. 75011, June 16, 1988). the private respondent awarded to the petitioner a lot, identified as Lot No. 15,
action to recover a parcel of land is a real action but it is an action in personam, for Block No. W-21, in the private respondent's Housing Project at No. 1 West Avenue,
it binds a particular individual only although it concerns the right to a tangible thing Failure to take steps to assert any rights over a disputed land for 19 years from the Quezon City, containing an area of 810 square meters with a Type E house. On
(Ang Lam v. Rosillosa, supra). date of registration of title is fatal to the private respondent's cause of action on the August 31, 1968, after the petitioner received from the private respondent's
ground of laches. Laches is the failure or neglect, for an unreasonable length of time Housing Project Committee a statement of account of the purchase price of the said
Private respondent's action for reconveyance and cancellation of title being in to do that which by exercising due diligence could or should have been done, lot and house in the total amount of P21,034.56, payable on a monthly amortization
personam, the judgment in question is null and void for lack of jurisdiction over the earlier; it is negligence or omission to assert a right within a reasonable time of P153.32 for a term of fifteen (15) years, he sent to the said Committee a Cashier's
person of the deceased defendant Ching Leng. Verily, the action was commenced warranting a presumption that the party entitled to assert it either has abandoned Check No. 77089 CC, dated -October 21, 1968, issued by the Philippine Banking
thirteen (13) years after the latter's death. As ruled by this Court in Dumlao v. it or declined to assert it (Bailon-Casilao v. Court of Appeals, G.R. No. 78178, April Corporation in the name of his wife in the sum of P21,500.00 to cover the cash and
Quality Plastic Products, Inc. (70 SCRA 475 [1976]) the decision of the lower court 15, 1988; Villamor v. Court of Appeals, G.R. No. 41508, June 27, 1988). full payment of the purchase price of the lot and house awarded to him. However,
insofar as the deceased is concerned, is void for lack of jurisdiction over his person. more than a week thereafter, or on October 29, 1968, the Chief Accountant and
He was not, and he could not have been validly served with summons. He had no The real purpose of the Torrens system is to quiet title to land and to stop forever Comptroller of the private respondent returned to the petitioner ,the
more civil personality. His juridical personality, that is fitness to be subject of legal any question as to its legality. Once a title is registered, the owner may rest secure, aforementioned check, informing him that the private respondent, through its
relations, was lost through death (Arts. 37 and 42 Civil Code). without the necessity of waiting in the portals of the court, or sitting on the Committee on Organization, Personnel and Facilities, had cancelled the award of
"mirador su casa," to avoid the possibility of losing his land (National Grains the lot and house previously awarded to him on the following grounds: (1) that he
The same conclusion would still inevitably be reached notwithstanding joinder of Authority v. IAC, 157 SCRA 388 [1988]). has already retired; (2) that he has only an option to purchase said house and lot;
Ching Leng's estate as co-defendant. it is a well-settled rule that an estate can sue (3) that there are a big number of employees who have no houses or lots; (4) that
or be sued through an executor or administrator in his representative capacity (21 A Torrens title is generally a conclusive evidence of the ownership of the land he has been given his retirement gratuity; and (5) that the awarding of the
Am. Jr. 872). Contrary to private respondent's claims, deceased Ching Leng is a referred to therein (Section 49, Act 496). A strong presumption exists that Torrens aforementioned house and lot to an employee of the private respondent would
resident of 44 Libertad Street, Pasay City as shown in his death certificate and T. C. titles are regularly issued and that they are valid. A Torrens title is incontrovertible better subserve the objective of its Housing Project. Petitioner protested against the
T. No. 91137 and there is an on-going intestate proceedings in the same court, against any "information possessoria" or title existing prior to the issuance thereof cancellation of the award of the house and lot in his favor and demanded from
Branch III commenced in 1965, and notice of hearing thereof duly published in the not annotated on the title (Salamat Vda. de Medina v. Cruz, G.R. No. 39272, May 4, private respondent the restoration of all his rights to said award. However, private
same year. Such misleading and misstatement of facts demonstrate lack of candor 1988). respondent refused.
on the part of private respondent and his counsel, which is censurable.
PREMISES CONSIDERED, (1) the instant petition is hereby GRANTED; (2) the On May 15, 1969 the petitioner filed a complaint in the Court of First Instance of
The complaint for cancellation of Ching Leng's Torrens Title must be filed in the appealed decision of the Court of Appeals is hereby REVERSED and SET ASIDE; (3) Batangas against the private respondent seeking the annulment of the cancellation
original land registration case, RTC, Pasig, Rizal, sitting as a land registration court in the trial court's decision dated June 15, 1979 and the Order dated September 2, of the award of the lot and house in his favor and the restoration of all his rights
accordance with Section 112 of the Land Registration Act (Act No. 496, as amended) 1980 reinstating the same are hereby declared NULL and VOID for lack of thereto. He contends that the cancellation of said award was unwarranted and
not in CFI Pasay City in connection with, or as a mere incident in Civil Case No. 6888- jurisdiction and (4) the complaint in Civil Case No. 6888-P is hereby DISMISSED. illegal for he has already become the owner of said house and lot by virtue of said
P (Estanislao v. Honrado, 114 SCRA 748 [1982]). award on August 12, 1964 and has acquired a vested right thereto, which cannot be
SO ORDERED. unilaterally cancelled without his consent; that he. had requested the private
Section 112 of the same law requires "notice to all parties in interest." Since Ching respondent to restore to him all his rights to said award but the latter refused and
Leng was already in the other world when the summons was published he could not failed and still refuses and fails to comply with said request.
have been notified at all and the trial court never acquired jurisdiction over his
Private respondent filed a motion to dismiss the complaint on the ground of compromise agreement adverted to above, between the Deudors; and defendant FRANCISCO S. HERNANDEZ and JOSEFA U. ATIENZA, plaintiffs-appellees,
improper venue, contending that since the petitioner's action affects the title to a corporations, the latter had acknowledged the right and title of the Deudors in and vs.
house and lot situated in Quezon City, the same should have been commenced in to said lots; and hence, the right and title of the plaintiffs, as successors-in-interest RURAL BANK OF LUCENA, INC., CENTRAL BANK OF THE PHILIPPINES, in its capacity
the Court of First Instance of Quezon City where the real property is located and not of the Deudors; that, by entering into said agreement, defendant corporations had, as Liquidator of Rural Bank of Lucena, and JOSE S. MARTINEZ in his capacity as
in the Court of First Instance of Batangas where petitioner resides. On July 24, 1969, also, waived their right to invoke the indefeasibility of the Torrens title in favor of J. Receiver of Rural Bank of Lucena, defendants-appellants.
the respondent Court sustained the motion to dismiss filed by private respondent M. Tuason & Co., Inc.; and that defendants have no right, therefore, to oust
on the ground of improper venue. plaintiffs from the lots respectively occupied by them and which they claim to be Ciceron B. Angeles & Fabian S. Lombos for appellants.
entitled to hold. Obviously, this action affects, therefore, not only the possession of
Hence, the instant petition to review the order of respondent Court. real property, but, also, the title thereto. Accordingly, it should have been instituted Tomas Yumol and Felipe Dimaculangan for appellees.
in the Court of First Instance of the Province of Rizal in which said property is
The only issue in this petition is whether the action of the petitioner was properly situated (Section 3, Rule 5 of the Rules of Court).
filed in the Court of First Instance of Batangas. It is a well settled rule that venue of
actions or, more appropriately, the county where the action is triable 1 depends to WHEREFORE, the order of dismissal appealed from is set aside and the case is AQUINO, J.:
a great extent on the nature of the action to be filed, whether it is real or personal. remanded for further proceedings and disposition on the merits. No costs.
2 A real action is one brought for the specific recovery of land, tenements, or This case is about the propriety of a separate action to compel a distress rural bank.
hereditaments. 3 A personal action is one brought for the recovery of personal Teehankee (Chairman), Makasiar, Esguerra and Muoz Palma, JJ., concur. which is under Judicial liquidation, to accept a check in payment of a mortgage debt.
property, for the enforcement of some contract or recovery of damages for its The fact are as follows:
breach, or for the recovery of damages for the commission of an injury to the
person or property. 4 Under Section 2, Rule 4 of the Rules of Court, "actions On March 21, 1961 the spouses Francisco S. Hernandez and Josefa U. Atienza
affecting title to, or for recovery of possession, or for partition, or condemnation of , obtained from the Rural Bank of Lucena, Inc. a loan of P6,000 which was payable on
or foreclosure of mortgage in real property, shall be commenced and tried where March 21, 1962. The loan was cured by a mortgage on their two lots situated in
the defendant or any of the defendants resides or may be found, or where the Cubao, Quezon City with a total area of 600 square meters. The interest for one
plaintiff or any of the plaintiffs resides, at the election of the plaintiff". year was paid in advance.

A close scrutiny of the essence of the petitioner's complaint in the court a quo About three months after that loan was obtained, the Lucena Bank became a
would readily show that he seeks the annulment of the cancellation of the award of distress bank. In a letter dated June 6, 1961 the Acting Governor of the Central Bank
the Quezon City lot and house in his favor originally given him by respondent DBP in apprised the stockholders of the Lucena bank that the Monetary Board in its
recognition of his twenty-one years of service in its Legal Department, in pursuance Resolution No. 928, which was approved on June 13, 1961 allegedly after hearing
of his contention that he had acquired a vested right to the award which cannot be the Lucena bank. found that its officers, directors and employees had committed
unilaterally cancelled by respondent without his consent. certain anomalies or had resorted to unsound and unsafe banking practices which
were prejudicial to the government, its depositors and creditors.
The Court agrees that petitioner's action is not a real but a personal action. As
correctly insisted by petitioner, his action is one to declare null and void the The Monetary Board advised the stockholders to reorganize the Lucena bank by
cancellation of the lot and house in his favor which does not involve title and electing a new board of directors and directed that bank (a) not to grant new loans
ownership over said properties but seeks to compel respondent to recognize that or renewals; (b) not to accept deposits from new depositors; (c) to service only the
the award is a valid and subsisting one which it cannot arbitrarily and unilaterally existing deposit accounts and (d) not to issue drafts or make any disbursements
cancel and accordingly to accept the proffered payment in full which it had rejected without the prior approval of Central Bank examiners.
and returned to petitioner.
The Monetary Board gave the warning that, if its directives were not obeyed, the
Such an action is a personal action which may be properly brought by petitioner in Central Bank. would take over the management of the Lucena bank.
his residence, as held in the case of Adamus vs. J.M. Tuason & Co., Inc. 5 where this
Court speaking through former Chief Justice Querube C. Makalintal distinguished The Central Bank Governor informed the Lucena bank that the chief examiner of the
the case from an earlier line of J.M. Tuaxon & Co., Inc. cases involving lot purchasers department of rural banks would oversee the operations of the Lucena bank.
from the Deudors 6, as follows:
That letter of the Central Bank Governor was construed as a directive to the Lucena
... All the allegations as well as the prayer in the complaint show that this is not a bank to suspend operations. The Manila times in its issue of June 21, 1961 carried a
real but a personal action to compel the defendants to execute the news story with the heading "Bank told to suspend operations". The story was
corresponding purchase contracts in favor of the plaintiffs and to pay damages. The accompanied by a picture of depositors who jammed the lobby of the bank trying to
plaintiffs do not claim ownership of the lots in question: they recognize the title of withdraw their money.
the defendant J.M. Tuason & Co., Inc. They do not ask that possession be delivered
to them, for they allege to be in possession. The case cited by the defendants (Abao, Instead of bowing to the will of the Monetary Board, the Lucena bank and its board
et al. vs. J. M. Tuason & Co., Inc. G.R. No. L-16796, Jan. 30, 1962) is therefore not in of directors filed with the Court of First Instance of Manila a complaint dated June
point. In that case, as stated by this Court in its decision, the 'plaintiffs' action is 21, 1961 seeG.R. No. L-29791 January 10, 1978king to restrain the implementation
predicated on the theory that they are 'occupants, landholders,' and 'most' of them of Resolution No. 928 (Civil Case No. 47345).
owners by purchase' of the residential lots in question; that, in consequence of the
Before the expiration of the one-year term of the loan, or on August 22, 1961, In the meantime, the Monetary Board had decided to liquidate the Lucena Bank. Moreover, the chock was drawn against the current deposits of the San Pablo
Hernandez went to the Lucena bank and offered to pay the loan by means of a The Governor of the Central Bank in a letter dated February 8, 1962 enjoined the Colleges in the Lucena bank which was in the process of liquidation. Hernandez was
check for P6,000 dated August 8, 1961 which was drawn against the bank by a Lucena bank from transacting business and advised it to turn over its assets, advised to settle his account by paying cash or by means of a chock drawn against a
depositor, the San Pablo Colleges, and which was payable to Fernandez As the documents and records to the chief bank examiner. The bank building was sealed. bank other than the Lucena bank.
bank's executive vice president was not available, the payment was not
consummated. The following notice was posted at the entrance of the building: Disregarding that suggestion, Hernandez announced to the Associate
Superintendent of Banks in his letter of December 16, 1963 that he was going to
At the time that the check was issued, the San Pablo Colleges, had a deposit in the This bank is temporarily closed pending final decision of the courts as to its status. deposit the said check in the court of First Instance of Lipa City on or before
Lucena bank amounting to P11,890.16 (27 tsn April 25, 1966). Instead of Payments of loans would be accepted; meanwhile, no payments of withdrawals December 26, 1963.
withdrawing P6,000 from that deposit, the San Pablo Colleges chose to issue a check against deposits can be made. Please transact business with the Central Bank's
for that amount w Hernandez. It is not clear whether in August, 1961 the San Pablo representatives only. Instead of filing a consignation complaint, Hernandez enclosed the check with his
Colleges could make a withdrawal from its deposit in the Lucena bank. letter dated January 2, 1964 to the clerk of court of the Court of First Instance at
To head off the liquidation, the Lucena Bank filed with the Court of First Instance of Lipa City. That letter was received in court on January 6, 1964. Hernandez wrote a
On the following day, August 23, Hernandez sent to the bank by registered mail a Lucena City a complaint dated February 12, 1962, praying that the Central Bank be letter dated January 11, 1964 informing the Associate Superintendent of Banks of
photostat of the check and a letter inquiring whether the bank would honor the enjoined from liquidating the said bank. On February 14, the court issued an ex the judicial deposit of the check. Copies of that letter were furnished the Lucena
check and when he should go personally to the bank for that purpose. That letter parte preliminary injunction which it dissolved ten days later (civil Case No. 6471; bank and the San Pablo Colleges.
was received by the bank on August 29. Rural Bank of Lucena, Inc. vs. Arca, L-21146, September 20, 1965, 15 SCRA 66).
It was only on October 12, 1964 when Hernandez and his wife filed an action in the
On August 30, the executive vice-president wrote to Hernandez and informed him On February 14, 1962, the Manila court rendered a decision in Civil Case No. 47345, Court of First Instance at Lipa City to compel the Rural Bank of Lucena, Inc., the
that the check could not be honored for the time being because of adverse events restraining the enforcement of the Monetary Board resolution, which required the Central Bank as liquidator, and Jose S. Martinez as receiver, to accept the check and
that had disrupted the bank's operations. What the vice-president meant was that Lucena bank to undertake a reorganization and to curtail its operations. The Central to execute the cancellation of the real estate mortgage. The Hernandez spouses also
by reason of the letter of the Central Bank Governor dated June 16. 1961 the Bank appealed. (This Court reversed that decision and dismissed the complaint for asked for moral damages in the amount of P10.000 and attorney's fees of P3,000
operations of the Lucena bank were suspended (6 tsn August 15, 1966). injunction. Rural Bank of Lucena, Inc. vs. Central Bank, L-19621, November 29, 1969, (Civil Case No. 1615).
30 SCRA 628).
The vice-president explained that because there was a run the bank its assets were On October 20, 1964 the Central Bank filed a motion to dismiss. It contended that
exhausted, and so the check sent by Hernandez, which check was drawn against the To implement the resolution of the Monetary Board for the Liquidation of the there was improper venue because, as the action allegedly involved title to real
Lucena bank, could not be accepted (16, 21-24 tsn August 15, 1966). Lucena bank, the Central Bank, pursuant to section 29 of its charter and on the property, it should have been instituted in Quezon City where the encumbered lots
assumption that the Lucena bank was insolvent, filed with the Court of first Instance are situated. It Mother contended that since the Lucena bank is under liquidation
The vice-president said that when Hernandez presented the check, the Lucena bank of Manila a petition dated March 27, 1962 for assistance and supervision in the and is in the hands of a receiver, its properties and assets are in custodia legis and
was no longer in a position to honor withdrawals and that had Hernandez paid cash, liquidation of the Lucena bank (Civil Case No. 50019). may, therefore, be reached only by motion or petition in Civil Case No. 50019 of the
his payment would have been accepted. To honor the check would have been Court of First Instance of Manila. The motion was denied.
tantamount to allowing a depositor (San Pablo Colleges) to make a withdrawal but Acting on that petition, the Court of First Instance of Manila issued an order dated
the Lucena bank could not entertain withdrawals without the consent of the Central march 28, 1963, directing the Lucena bank to turn over its assets to the Central To complete the facts, it should be stated that the counsel for the Lucena bank on
Bank examiners (26-28 tsn). Payment by check was a disbursement (31 tsn). Bank's authorized representative. January 30, 1967 offered to compromise the case by stipulating that the Central
Bank would apply the check in question to the mortgage debt of Hernandez if the
Apparently, the vice-president did not take the trouble of asking the Central Bank The Monetary Board in its Resolution No. 426 dated April 2, 1963 designated the balance of the deposit of the San Pablo Colleges would be enough to cover the
examiners whether the payment by check made by Hernandez could be accepted. Superintendent of Banks or his duly authorized representative to take charge of the amount of the check of P6,000 and that, by virtue of that compromise, the
Hernandez himself who should have known that the bank was a distressed bank assets of the Lucena bank. complaint and counterclaim would be dismissed.
which had suspended operations and which was under the supervision of Central
Bank examiners, did not bother to take up his problem with the said examiners. The Board in its resolution of November 27, 1963 ordered the Superintendent of That conditional and equivocal compromise offer fizzled out, because the lawyers of
Banks to convert the assets of the Lucena bank to money. The Lucena bank, by Hernandez and the Central Bank did not assent to it.
Hernandez, in his letter of October 18, 1961, again asked the bank when he could means of certiorari sought to annul the liquidation proceeding . This Court denied
deliver the check. The executive vice-president, in his reply of October 24, told its petition (Rural Bank of Lucena, Inc. vs. Arca, L-21146, September 20, 1965, 15 After trial, the lower court rendered an amended decision dated October 31, 1967,
Hernandez that the bank could not yet honor the check because it had not resumed SCRA 66). ordering the Lucena Bank or the Central Bank, as liquidator, to accept the honor the
its banking operations; that it was awaiting the outcome of a case filed by the bank check, to cancel the mortage, and to pay Hernandez spouses (P25,000 as moral
against the Central Bank; that it might reopen in January, 1962, and that, anyway, Among the accounts receivable of the Lucena bank inventoried by the Central damages (not P10,000 as prayed for the complaint) plus P1,000 as attorney's fees.
the loan would not be due until March 21, 1962. Bank's representative was the account of Hernandez- In a letter dated October 29,
1963 Hernandez informed the Central Bank that he had sent to the Lucena bank on The Lucena bank, the Central Bank and its employee, the receiver, appealed to this
Hernandez sent another letter dated February 1, 1962. Finally, he enclosed the April 25, 1962 the chock for P6,000. He again requested that his mortgage be Court.
original check (duly endorsed) with his letter to the bank dated March 7, 1962, cancelled.
which was sent by registered mail and special delivery. That letter of March 7, The Central Bank contends that the trial court erred (1) in not holding that the
together with the check, was returned to Hernandez because the bank's manager The Associate Superintendent of Banks in his answer dated December 9, 1963 venue was improperly laid; (2) in not holding that it had no jurisdiction because the
was allegedly in Manila. Undeterred, Hernandez again mailed the check to the bank returned the chock to Hernandez and informed him that, according to the Lucena Hernandez spouses should have ventilated their claim in the liquidation proceeding
on April 25, with the request that his mortgage be cancelled. bank's executive vice-president, the check could not be applied to the payment of pending in the Court of First Instance of Manila. instead of filing a separate action in
Hernandez' loan because the bank was already closed when he received the check. the Court of First Instance at Lipa City; (3) in not holding that there was no valid
consignation, (4) in awarding moral damages and attorney's fees, and (5) in ordering testify during the trial. So, they have no testimony in the records as to their actual Those contentions of the Hernandez spouse are untenable. The trial court did not
execution pending appeal in spite of the tact that the assets of the Lucena bank are residence. rule squarely on the Jurisdictional issue raised by the Central Bank and the receiver
in custodia legis or in the custody of the liquidation court and the receiver
appointed by it. We hold that the trial court should have dismissed the action because the venue We hold that the liquidation court or the Manila court has exclusive jurisdiction to
thereof was improperly laid in Batangas. The term "resides" in section 2[b] of Rule 4 entertain the claim of the Hernandez spouses that their mortgage obligation had
On the issue of venue, defendants-appellants contend that the action of the refers to the place of actual residence or domicile.) already been extinguished by means of their tender of the check issued by the San
Hernandez spouses to compel them to honor the check in question and to cancel Pablo Colleges.
the mortgage on their two lots is a real action affecting title to real property which San Juan, Batangas might be the place where the plaintiffs have their domicile or
should have been filed in the Court of First Instance of Rizal at Quezon City where legal residence but there is no question that 11 Chicago Street, Cubao, Quezon City At the time the Hernandez spouses filed in 1964 their consignation complaint the
the mortgaged lots are situated. is their place of abode or the place where they actually reside. So, the action in this Lucena bank was already under liquidation. The Manila court in its order of March
case, which is a personal action to compel the defendants to honor the check in 28,1963 had ordered the officers of the Lucena bank to turn over to the Central
Section 2(a), Rule 4 of the Rules of Court provides that "actions affecting title to, or question and to Cancel the mortgage, should have been filed in Quezon City if the Bank or to the receiver, the Superintendent of Banks, all of its assets, properties and
for recovery of possession, or for partition or condemnation of, or foreclosure of plaintiffs intended to use their residence as the basis for their choice of venue. papers. Among the assets turned over to the receiver was the outstanding or unpaid
mortgage on, real property, shall be commenced and tried in the province where account of the Hernandez spouses which appears in the inventory as: "393.
the property or any part thereof lies". Thus, it was held that venue was improperly laid in a case where plaintiff Jose Hernandez, Francisco St., 11 Chicago St., Cubao, Q.C. TCT-34262 3/21/61,
Coloma filed a complaint in the Court of First Instance of Ilocos Norte, because he P6,000.00" (Exh. 4-CB).
Note that the rule mentions an action for foreclosure of a real estate mortgage but was allegedly a resident of San Nicolas, Ilocos Norte, where he was born and reared,
does not mention an action for the cancellation of a real mortgage. In the instant but his actual residence was at 57 K-6th Kamias, 486 Barangka Drive, Mandaluyong, And among the papers or obligations turned over to the receiver was Ledger No.
case, the action is primarily to compel the mortgagee to accept payment of the Rizal (Koh vs. Court of Appeals, L-40428, December 17, 1975; 70 SCRA 298). 056 evidencing the deposit of the San Pablo Colleges in the Lucena bank in the sum
mortgage debt and to release the mortgage. of P11,890.16. against which the check for P6,000 was drawn. It was that check
In Gracia Fule vs. Court of Appeals, L-404502, November 29, 1976, 74 SCRA 189, it which the Hernandez spouses had issued to pay the mortgage debt to the Lucena
That action, which is not expressive included in the enumeration found in section was held that an intestate proceedings 9 for the settlement of the estate of the bank.
2(a) of Rule 4, does not involve the title to the mortgage lots. It is a personal action deceased Amado G. Garcia was improperly filed in the Court of First Instance of
and not a real action. The mortgagee has, not foreclosure the mortgage, Plaintiffs' Laguna. The deceased was allegedly domiciled in Calamba, Laguna. He was a Under the section 29 of the Central Bank Act, republic Act No. 265, when the
title is not in question. They are in possession of the mortgaged lots. delegate of the first district of Laguna to the constitutional convention. However, at Monetary Board, upon information submitted by the Superintendent of the Bank,
the time of his death he was actually a resident of Quezon City. Hence. the proper finds a bank to be insolvent, it shall be forbid the bank to do the business and it shall
Hence, the venue of plaintiffs' personal action is the place where the defendant or venue of the intestate proceeding was Quezon City. take care of its assets according to law.
any of the defendants resides or may be found, or where the plaintiff or any of the
plaintiffs resides, at the election of the plaintiff (Sec. 2[b], Rule 4). In the foregoing discussion. it is assumed that the plaintiff could bring a separate In that case, if the Monetary Board finds out that the insolvent bank cannot resume
action to compel the defendants honor the check in question in spite of the fact business with safety to its creditors, it shall through the Solicitor General, file a
The plaintiffs in their brief confound a real action with an action in rem and a that the Lucena bank is under liquidation in Civil Case No. 50019 of the Court of First petition in the Court of First Instance, praying for the assistance and supervision of
personal action with an action in personam. They argue that their action is not an Instance of Manila. the court in the liquidation of the bank's affairs. Thereafter, the Superintendent of
action in rem and, therefore, it could be brought in a place other than the place Banks, upon order of the Monetary Board and under the supervision of the court,
where the mortgaged lots are located. The Central Bank contends that such a separate action was not maintainable and shall convert to money the bank's assets. "Subido es que uno de los deberes
that the Hernandez spouse should have ventilated in the liquidation proceeding primordiales de un depositario es hacerse cargo immediatemente de todol el activo
A real action is not the same as an action in rem and a personal action is not the their claim that they had already paid their mortgage debt by means of the check y pasivo de un banco" (Luy Lam & Co. vs. Mercantile Bank of China, 71 Phil. 573,
same as an action in personam. issued by the San Pablo Colleges and that their mortgage should be cancelled. 576).

In a personal action, the plaintiff seeks the recovery of personal property, the The Central Bank points out that the redemption action the Hernandez spouses The fact the insolvent bank is forbidden to do business, that its assets are turn over
enforcement of a contract or the recovery of damages. In a real action, the plaintiff would ultimately affect the funds and property of the Lucena Bank. Hence, the to the Superintendent of Banks, as a receiver, for conversation into cash, and that
seeks the recovery of real property. or, as indicated in section 2(a) of Rule 4, a real liquidation court is the competent tribunal to pass upon the issue as to whether the its liquidation is undertaken with judicial intervention means that, as far as lawful
action Is an action affecting tithe to real property or for the recovery of possession. Hernandez spouses could validly pay their mortage debt by means of the check of and practicable, all claims against the insolvent bank and that the liquidation court
or for partition or condemnation of, or foreclosure of a mortage on, real property. the San Pablo Colleges. should be filed in the liquidation proceeding.

An action in personam is an action against a person on the basis of his personal On the other hand, the Hernandez spouses argue that their action in the Court of The judicial liquidation is intended to prevent multiplicity of actions against the
liability, while an action in rem is an action against the thing itself, instead of against First Instance at Lipa City "deals with a sum of money which is still not in the insolvent bank. The lawmaking body contemplated that for convenience only one
the person (1 C. J. S. 943-4), Hence, a real action may at the same time be an action possession, custody, and administration" of the Central Bank and the receiver; that court, if possible, should pass upon the claims against the insolvent bank and that
in personam and not necessary an action in rem. their action had "nothing to do with the funds and property" held by the receiver; the liquidation court should assist the Superintended of Banks and control his
that the Lucena bank had not lost its juridical personality after it was placed under operations.
In this case, the plaintiffs alleged in their complaint that they were residents of San liquidation, and that the issue as to whether the Lucena bank should have accepted
Juan, Batangas, which in their brief (They characterize as their legal residence and the chock in question was "not in anyway connected with the causes and grounds In the course of the liquidation, contentious cases might arise wherein a full-dress
which appears to be their domicile of origin. On the other hand, it is indicated in the under which the liquidation proceedings were instituted nor with the administration hearing would be required and legal issues would have to be resolved. Hence, it
promissory note and mortgage signed by them and in the Torrens title covering the of the property and funds under liquidation" would be necessary in justice to all concerned that a Court of First Instance should
mortgaged lots that their residence is at 11 Chicago Street, Cubao, Quezon City, assist and supervise the liquidation and should act umpire and arbitrator in the
which apparently is the place where the said lots are located, The plaintiffs did not allowance and disallowance of claims.
writ of execution because the Lucena bank was under liquidation (p. 92, Rollo). G. R. No. 76431 October 16, 1989
The judicial liquidation is a pragmatic arrangement designed to establish due Hence, the Hernandez spouses had to file a claim with the liquidation court. That
process and orderliness in the liquidation of the bank, to obviate the proliferation of court has been pending since September, 1968. FORTUNE MOTORS, (PHILS.) INC., petitioner,
litigations and to avoid injustice and arbitrariness. vs.
Thus, much time, money and effort would have been saved if at the outset the THE HONORABLE COURT OF APPEALS, METROPOLITAN BANK and TRUST
Thus, in the liquidation before the war of the insolvement Mercantile Bank of china, Hernandez spouse filed their claim in the liquidation court. COMPANY, respondents.
various claims were adjudicated by the liquidation Court, which was the court of
First Instance of Manila, pursuant to section 1639 of the Revised Administrative WHEREFORE, the trial court judgment is reversed and set aside. The case is Quirante & Associates Law Office for petitioner.
Code, from which section 29 pf the Central Bank Law was taken. (See In re dismissed without prejudice to the right of the Hernandez spouses to take up with
Liquidation of Mercantile Bank of China: Tan Tiong Tick vs. American Apothecaries the liquidation court the settlement of their mortgage obligation. Costs against the Bautista, Cruz & Associates Law Offices for private respondent.
Co., 65 Phil. 414; Pacific Coast Biscuit Co. vs Chinese Grocers Association, 65 Phil. plaintiffs-appellees.
375; Fletcher American National Bank vs. Ang cheng Lian, 65 Phil. 385; Pacific
Commercial Co. vs. American Apothecaries Co., 65 Phil. 429; Gopoco Grocery vs. SO ORDERED.
Pacific Coast Biscuit co., 65 Phil. 443; Chinese Grocers' Association vs. American PARAS, J.:
Apothecaries Co., 65 Phil. 395; and Yu Ping Kun, 65 Phil. 410). Fernando, (Chairman), Barredo, Antonio and Concepcion, Jr., JJ., concur
This is a petition for review on certiorari seeking the reversal of: (a) the July 30,
There is a ruling that, although the taking over of a bank by state officials for Santos, J., is on leave. 1986 decision of the Court of Appeals in AC-G.R. SP No. 09255 entitled
liquidation does not dissolve the bank, a court has no jurisdiction (after such "Metropolitan Bank & Trust Co. v. Hon. Herminio C. Mariano, et al." dismissing Civil
takeover) to entertain an action or to render a judgment against the bank (9 C.J.S. Case No. 8533218 entitled "Fortune Motors (Phils.) Inc. v. Metropolitan Bank &
852, note 38 citing Bushnell vs. F.W. Woolworth co., 241 Pac. 738. 112 Okl. 297; Trust Co." filed in the Regional Trial Court of Manila, Branch IV for improper venue
State vs. Quigley, 220 Pac. 918, 93 Okl. 296). and (b) the resolution dated October 30, 1986 denying petitioner's motion for
reconsideration.
It has been held that an insolvent bank, which was under the control of the finance
commissioner for liquidation, was without power or capacity to sue or be sued, The undisputed facts of the case are as follows:
prosecute or defend or otherwise function except through the finance
commissioner or liquidator (Wauer vs. Bank of Pendleton, 65 S.W. 2nd 167 228 Mo. On March 29,1982 up to January 6,1984, private respondent Metropolitan Bank
App. 1150). extended various loans to petitioner Fortune Motors in the total sum of
P32,500,000.00 (according to the borrower; or P34,150,000.00 according to the
Suits brought against a bank after the issuance of a notice that the finance Bank) which loan was secured by a real estate mortgage on the Fortune building
commissioner has taken possession of the bank should be dismissed or are barred and lot in Makati, Rizal. (Rollo, pp. 60-62)
for want of jurisdiction (Rouse vs. Bank of Darlington, 41 S.W. 2nd 159; Bartlett vs.
Mc Callister, 289 S.W. 814, 316 Mo. 129). Due to financial difficulties and the onslaught of economic recession, the petitioner
was not able to pay the loan which became due. (Rollo, p. 62)
This Court has already held that after a savings bank was declared insolvent by the
Monetary Board, a depositor could not bring a separate action against it for the For failure of the petitioner to pay the loans, the respondent bank initiated
recovery of his time deposit. His remedy is to intervene in the liquidation extrajudicial foreclosure proceedings. After notices were served, posted, and
proceeding (Central Bank of the Philippines vs. Morfe, L-38427, March 12, 1975, 63 published, the mortgaged property was sold at public auction for the price of
SCRA 144). * P47,899,264.91 to mortgagee Bank as the highest bidder. (Rollo, p. 11)

In the instant case, the Hernandez spouses, after having become cognizant of the The sheriff's certificate of sale was registered on October 24, 1984 with the one-
fact that the Lucena bank was under liquidation, chose to file a separate action year redemption period to expire on October 24,1985. (Rollo, p. 12)
against that bank for redemption and damages. Although residents of Cubao,
Quezon City, where the mortgage lots are located and which was the address used On October 21, 1985, three days before the expiration of the redemption period,
by them in dealing with the Lucena bank, they chose Lipa City as the venue of their petitioner Fortune Motors filed a complaint for annulment of the extrajudicial
action. foreclosure sale alleging that the foreclosure was premature because its obligation
to the Bank was not yet due, the publication of the notice of sale was incomplete,
They ignored the liquidation court. Evidently, one of their objectives was to obtain there was no public auction, and the price for which the property was sold was
against the Lucena bank a judgment for moral damages which they surmised would "shockingly low". (Rollo, pp. 60-68)
not be granted by the Manila liquidation court. They attained more than what they
had originally desired because, instead of the moral damages of P10,00 indicated in Before summons could be served private respondent Bank filed a motion to dismiss
their complaint, the trial court generously awarded them P25,000. the complaint on the ground that the venue of the action was improperly laid in
Manila for the realty covered by the real estate mortgage is situated in Makati,
Not only that. The trial court granted execution pending appeal although it was therefore the action to annul the foreclosure sale should be filed in the Regional
aware that eventually the claim of the Hernandez spouses would have to be Trial Court of Makati. (Rollo, pp. 67-71-A )
submitted to the liquidation court for allowance. The sheriff could not enforce the
The motion was opposed by petitioner Fortune Motors alleging that its action "is a Personal actions upon the other hand, may be instituted in the Court of First G.R. No. L-49475 September 28, 1993
personal action" and that "the issue is the validity of the extrajudicial foreclosure Instance where the defendant or any of the defendants resides or may be found, or Quasi in rem,in personam,
proceedings" so that it may have a new one year period to redeem. (Rollo, pp. 72- where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff JORGE C. PADERANGA, petitioner,
73) (Sec. 1, Rule 4, Revised Rules of Court). vs. in rem
Hon. DIMALANES B. BUISSAN, Presiding Judge, Court of First Instance of
On January 8, 1986 an order was issued by the lower court reserving the resolution A prayer for annulment or rescission of contract does not operate to efface the true Zamboanga del Norte, Branch III and ELUMBA INDUSTRIES COMPANY,
of the Bank's motion to dismiss until after the trial on the merits as the grounds objectives and nature of the action which is to recover real property. (Inton, et al., v. represented by its General Manager, JOSE J. ELUMBA, respondents.
relied upon by the defendant were not clear and indubitable. (Rollo, p. 81) Quintan, 81 Phil. 97, 1948)
A.E. Dacanay for petitioner.
The Bank filed a motion for reconsideration of the order dated January 8, 1986 but An action for the annulment or rescission of a sale of real property is a real action.
it was denied by the lower court in its order dated May 28, 1986. (Rollo, Annex "L" Its prime objective is to recover said real property. (Gavieres v. Sanchez, 94 Phil. Uldarico Mejorada & Associates for private respondent.
pp. 93-96; Annex "N" p. 99) 760,1954)

On June 11, 1986 the respondent Bank filed a petition for certiorari and prohibition An action to annul a real estate mortgage foreclosure sale is no different from an
in the Court of Appeals. (Rollo, Annex "O" pp. 100-115) action to annul a private sale of real property. (Munoz v. Llamas, 87 Phil. 737,1950) BELLOSILLO, J.:

And on July 30, 1986, a decision was issued by the Court of Appeals, the dispositive While it is true that petitioner does not directly seek the recovery of title or We are called upon in this case to determine the proper venue of an action to fix
part of which reads as follows: possession of the property in question, his action for annulment of sale and his the period of a contract of lease which, in the main, also prays for damages.
claim for damages are closely intertwined with the issue of ownership of the
WHEREFORE, the petition for certiorari and prohibition is granted. The complaint in building which, under the law, is considered immovable property, the recovery of Sometime in 1973, petitioner JORGE C. PADERANGA and private respondent
the Civil Case No. 85-33218 is dismissed without prejudice to its being filed in the which is petitioner's primary objective. The prevalent doctrine is that an action for ELUMBA INDUSTRIES COMPANY, a partnership represented by its General Manager
proper venue. Costs against the private respondent. the annulment or rescission of a sale of real property does not operate to efface the JOSE J. ELUMBA, entered into an oral contract of lease for the use of a commercial
fundamental and prime objective and nature of the case, which is to recover said space within a building owned by petition in Ozamiz City. 1 The lease was for an
SO ORDERED. (Rollo, p. 15) real property. It is a real action. Respondent Court, therefore, did not err in indefinite period although the rent of P150.00 per month was paid on a month-to-
dismissing the case on the ground of improper venue (Sec. 2, Rule 4) which was month basis. ELUMBA INDUSTRIES COMPANY utilized the area under lease as the
A motion for reconsideration was filed on August 11, 1986 on the said decision and timely raised (Sec. 1, Rule 16). (Punzalan, Jr. v. Vda. de Lacsamana, 121 SCRA 336, Sales Office of Allied Air Freight in Ozamiz City.
on October 30, 1986 a resolution was issued denying such motion for [1983]).
reconsideration. (Rollo, Annex "O" pp. 121-123; Annex "S" p. 129) On 4 April 1977, PADERANGA subdivided the leased premises into two (2) by
Thus, as aptly decided by the Court of Appeals in a decision penned by then Court of constructing a partition wall in between. He then took possession of the other half,
Hence, the petition for review on certiorari. Appeals Associate Justice now Associate Justice of the Supreme Court Carolina C. which repossession was said to have been undertaken with the acquiescence of the
Grio-Aquino, the pertinent portion reads: "Since an extrajudicial foreclosure of real local manager of ELUMBA, 2 although private respondent maintains that this is not
On June 10, 1987 the Court gave due course to the petition, required the parties to property results in a conveyance of the title of the property sold to the highest the case. 3 At any rate, the validity of the repossession is not here in issue.
file their respective memoranda within twenty (20) days from the notice hereof, bidder at the sale, an action to annul the foreclosure sale is necessarily an action
and pay deposit for costs in the amount of P80.40. affecting the title of the property sold. It is therefore a real action which should be On 18 July 1977, private respondent instituted an action for damages 4 which, at
commenced and tried in the province where the property or part thereof lies." the same time, prayed for the fixing of the period of lease at five (5) years, before
Both parties have filed their respective memoranda, and the case was submitted for the then court of First Instance of Zamboanga del Norte based in Dipolog City. 5
Court's resolution in the resolution dated December 14, 1987. (Rollo,Metrobank's PREMISES CONSIDERED, the instant petition is DENIED for lack of merit and the Petitioner, a resident of Ozamiz City, moved for its dismissal contending that the
Memorandum pp. 45-59; petitioner's memorandum pp.130-136; Res. p. 138) assailed decision of the respondent Court of Appeals is AFFIRMED. action was a real action which should have been filed with the Court of First
Instance of Misamis Occidental stationed in Ozamiz City where the property in
The only issue in this case is whether petitioner's action for annulment of the real SO ORDERED. question was situated.
estate mortgage extrajudicial foreclosure sale of Fortune Building is a personal
action or a real action for venue purposes. Melencio-Herrera (Chairperson), Padilla, Sarmiento and Regalado, JJ., concur. On 6 November 1978, respondent Judge Dimalanes B. Buissan denied the Motion to
Dismiss and held that Civil Case No. 2901 merely involved the enforcement of the
In a real action, the plaintiff seeks the recovery of real property, or as indicated in contract of lease, and while affecting a portion of real property, there was no
Sec. 2 (a) of Rule 4, a real action is an action affecting title to real property, or for question of ownership raised. 6 Hence, venue was properly laid.
the recovery of possession, or for the partition or condemnation of, or foreclosure
of a mortgage on real property. (Comments on the Rules of Court by Moran, Vol. 1, Petitioner pleaded for reconsideration of the order denying his Motion to Dismiss.
p. 122) He contended that while the action did not involve a question of ownership, it was
nevertheless seeking recovery of possession; thus, it was a real action which,
Real actions or actions affecting title to, or for the recovery of possession, or for the consequently, must be filed in Ozamiz City. 7
partition or condemnation of, or foreclosure of mortgage on real property, must be
instituted in the Court of First Instance of the province where the property or any On 4 December 1978, respondent judge denied reconsideration. 8 While admitting
part thereof lies. (Enriquez v. Macadaeg, 84 Phil. 674,1949; Garchitorena v. Register that Civil Case No. 2901 did pray for recovery of possession, he nonetheless ruled
of Deeds, 101 Phil. 1207, 1957) that this matter was not the main issue at hand; neither was the question of
ownership raised. Not satisfied, petitioner instituted the present recourse.
therefore does not operate to efface the fundamental and prime objective of the
PADERANGA argues that inasmuch as ELUMBA seeks to recover possession of the nature of the case which is to recover the one-half portion repossessed by the
portion surrendered to him by the local manager of private respondent, as well as lessor, herein petitioner. 14 Indeed, where the ultimate purpose of an action
to fix the period of lease at five (5) years, Dipolog City could not be the proper involves title to or seeks recovery of possession, partition or condemnation of, or
venue of the action. it being a real action, venue is laid in the court having foreclosure of mortgage on, real property, 15 such an action must be deemed a real
jurisdiction over the territory in which the property lies. action and must perforce be commenced and tried in the province where the
property or any part thereof lies.
ELUMBA counters that the present action is chiefly for damages arising from an
alleged breach in the lease contract; hence, the issue of recovery of possession is Respondent judge, therefore, in denying petitioner's Motion to Dismiss gravely
merely incidental. ELUMBA further argues that the action is one in personam and abused his discretion amounting to lack or excess of jurisdiction.
not in rem. Therefore venue may be laid in the place where plaintiff or defendant
resides at the option of plaintiff. WHEREFORE, the Petition for Prohibition is GRANTED. The Orders of 6 November
1978 and 4 December 1978 of respondent Judge Dimalanes B. Buissan are SET
Private respondent appears to be confused over the difference between personal ASIDE. The branch of the Regional Trial Court of Dipolog City where Civil Case No.
and real actions vis-a-vis actions in personam and in rem. The former determines 2901 may be presently assigned is DIRECTED to DISMISS the case for improper
venue; the latter, the binding effect of a decision the court may render over the venue. This decision is immediately executory.
party, whether impleaded or not.
Costs against private respondent ELUMBA INDUSTRIES COMPANY.
In the case before us, it is indubitable that the action instituted by private
respondent against petitioner affects the parties alone, not the whole world. Hence, SO ORDERED.
it is an action in personam, i.e., any judgment therein is binding only upon the
parties properly impleaded. 9 However, this does not automatically mean that the Cruz, Davide, Jr. and Quiason, JJ., concur.
action for damages and to fix the period of the lease contract is also a personal
action. For, a personal action may not at the same time be an action in rem. In Grio-Aquino, J., is on leave.
Hernandez v. Rural Bank of Lucena, Inc., 10 we held thus

In a personal action, the plaintiff seeks the recovery of personal property, the
enforcement of a contract or the recovery of damages. In a real action, the plaintiff
seeks the recovery of real property, or, as indicated in section 2(a) of Rule 4, a real
action is an action affecting title to real property or for the recovery of possession,
or for partition or condemnation of, or foreclosure of a mortgage on, real property.

An action in personam is an action against a person on the basis of his personal


liability, while an action in rem is an action against the thing itself, instead of against
the person. Hence, a real action may at the same time be an action in personam and
not necessarily an action in rem.

Consequently, the distinction between an action in personam and an action in rem


for purposes of determining venue is irrelevant. Instead, it is imperative to find out
if the action filed is a personal action or real action. After all, personal actions may
be instituted in the Regional Trial Court (then Court of First Instance) where the
defendant or any of the defendants resides or may be found, or where the plaintiff
or any of the plaintiffs resides, at the election of the plaintiff. 11 On the other hand,
real actions should be brought before the Regional Trial Court having jurisdiction
over the territory in which the subject property or part thereof lies. 12

While the instant action is for damages arising from alleged breach of the lease
contract, it likewise prays for the fixing of the period of lease at five (5) years. If
found meritorious, private respondent will be entitled to remain not only as lessee
for another five (5) years but also to the recovery of the portion earlier taken from
him as well. This is because the leased premises under the original contract was the
whole commercial space itself and not just the subdivided portion thereof.

While it may be that the instant complaint does not explicitly pray for recovery of
possession, such is the necessary consequence thereof. 13 The instant action
guilty of "conduct prejudicial to the best interest of the service" for having rulings of this Court already settling all the issues raised by petitioners. It is a very
ORDINARY AND SPECIAL ACTIONS participated in the mass actions and imposed upon them the reduced penalty of desirable and necessary judicial practice that when a court has laid down a principle
six (6) months' suspension. However, in view of the length of time that petitioners of law as applicable to a certain state of facts, it will adhere to that principle and
Distinguish ordinary civil action from special civil action? had been out of the service by reason of the immediate implementation of the apply it to all future cases where the facts are substantially the same. 14 Stare
There is Cause of Action in ordinary civil action. dismissal orders of Secretary Cario, the CSC likewise ordered petitioners' decisis et non quieta movere. Stand by the decisions and disturb not what is
Ex. Special Civil Action like declaratory relief does not need cause of automatic reinstatement in the service without back wages. settled. 15 As early as 18 December 1990 we have categorically ruled in the
action Petitioners were unhappy with the CSC decision. They initially filed petitions for consolidated cases of Manila Public School Teachers Association
certiorari with this Court, docketed as G.R. Nos. 111998, 2 114435-5506, 3 and v. Laguio Jr., 16 and Alliance of Concerned Teachers v. Hon. Isidro Cario 17 that
What is a local action? 116312-19, 4 which were all referred to the Court of the mass actions of September/October 1990 staged by Metro Manila public school
One founded on privity of estates only and there is no privity of contracts teachers "amounted to a strike in every sense of the term, constituting as they did,
Appeals pursuant to Revised Administrative Circular a concerted and unauthorized stoppage of or absence from work which it was said
What is a transitory action? No. 1-95 5 and there re-docketed as CA-G.R. SP No. 37620, CA-G.R. SP No. 37619 teachers' sworn duty to perform, carried out for essentially economic reasons
One founded on privity of contracts between the parties and CA-G.R. SP Nos. 37784, 37808-37014, respectively. On 29 to protest and pressure the Government to correct what, among other
November 1995 the Special Third Division of the Court of Appeals 6 rendered a joint grievances, the strikers perceived to be the unjust or prejudicial implementation of
decision in CA-G.R. SP Nos. 37619-20 dismissing the petitions for lack of merit. 7 The the salary standardization law insofar as they were concerned, the non-payment or
Dela Cruz v Secretary of Manila appellate court ruled that the questioned resolutions of the Civil Service delay in payment of various fringe benefits and allowances to which they were
Commission finding petitioners guilty of conduct prejudicial to the best interest of entitled, and the imposition of additional teaching loads and longer teaching hours."
These consolidated petitions 1 are among several petitions filed with this Court the service were based on reasonable and justifiable grounds; that petitioners' In Rolando Gan v. Civil Service Commission, 18 we denied the claim that the
arising from the much- publicized public school teachers' mass actions of perceived grievances were no excuse for them not to conduct classes and defy the teachers were thereby denied their rights to peaceably assemble and petition the
September/October 1990. Petitioners are public school return-to-work order issued by their superiors; that the immediate execution of the government for redress of grievances reasoning that this constitutional liberty to
teachers from various schools in Metro Manila who were simultaneously charged, dismissal orders of Secretary Cario was sanctioned by Sec. 47, par. (2), of the be upheld, like any other liberty, must be exercised within reasonable limits so as
preventively suspended, and eventually dismissed in October 1990 by then Administrative Code of 1987 (E.O. No. 292) as well as Sec. 37, par. (b), Art. IX of PD not to prejudice the public welfare. But the public school teachers in the case of the
Secretary Isidro D. Cario of the Department of Education, Culture and Sports No. 807, 8 and Sec. 32, Rule XIV of the Omnibus Rules Implementing Book V of E. O. 1990 mass actions did not exercise their constitutional rights within reasonable
(DECS), in decisions issued by him which uniformly read No. 292. Their motion for reconsideration having been denied on 15 May 1997, 9 limits. On the contrary, they committed acts prejudicial to the best interest of the
This is a mutu-propio administrative complaint petitioners then appealed by certiorari to this Court on 26 June 1997, docketed as service by staging the mass protests on regular school days, abandoning their
separately filed by the Secretary of Education, Culture and Sports against the G.R. No. 129221. Meanwhile, on 24 April 1998 the Tenth Division of the Court classes and refusing to go back even after they had been ordered to do so. Had the
following public school teachers . . . . based on the report submitted by their of Appeals 10 rendered a joint decision in CA-G.R. SP No. 37784 and Nos. 37808-14 teachers availed of their free time recess, after classes, weekends or holidays
respective school principals wherein it was alleged that the above-named teachers likewise dismissing the petitions for lack of merit. 11 The appellate court rejected to dramatize their grievances and to dialogue with the proper authorities within the
participated in the mass action/illegal strike in Sept. 19-21, 1990 and subsequently petitioners' contention that they should not have been penalized for participating in bounds of law, no one not the DECS, the CSC or even the Supreme Court could
defied the return-to-work order dated September 17, 1990 issued by this Office, the September/October 1990 mass actions because they were merely exercising have held them liable for their participation in the mass actions.
which acts constitute grave misconduct, gross neglect of duty, gross violation of Civil their constitutional right to free assembly. In so ruling the Court of Appeals cited
Service Law, Rules and Regulations and reasonable office regulations, refusal to Manila Public School Teachers Association v. Laguio, Jr. 12 wherein this Court With respect to our ruling in PBM Employees Organization v. Philippine Blooming
perform official duty, gross insubordination conduct prejudicial to the best ruled that the public school teachers' mass actions of September/October 1990 Mills Co., Inc., 20 invoked by petitioners, we have likewise already ruled in the
interest of the service and absence without official leave (AWOL), in violation were "to all intents and purposes a strike . . . constitut[ing] a concealed and Rolando Gan case 21 that the PBM ruling that the rights of free expression and
of Presidential Decree 807, otherwise known as the Civil Service Decree of the unauthorized stoppage of, or absence from, work which it was the teachers' duty to assembly could not be lightly disregarded as they occupy a preferred position in the
Philippines. perform, undertaken for essentially economic reasons." Petitioners' contention.that hierarchy of civil liberties was not applicable to defend the validity of the 1990
secretary Cario's decision to dismiss them was not supported by evidence was mass actions because what were pitted therein against the rights of free expression
Required to explain within a period of not less than 72 hours but not more than 5 likewise rejected in view of petitioners' admissions and/or failure to refute the and of assembly were inferior property rights while the higher consideration
days from receipt of the complaint, respondents failed to submit the required factual finding that petitioners actually joined the mass actions based on the report involved in the case of the striking teachers was the education of the youth which
answer within the given time up to the present, and despite the denial of their of absences submitted by their respective school principals. Their motion for must, at the very least, be equated with the freedom of assembly and to petition
request for extension of 30 days within which to submit their answers dated reconsideration having been denied in the resolution of 20 August 1996, 13 the government for redress of grievances. 22
September 25, 1990 filed by their counsel, Atty. Gregorio Fabros, in a letter of this petitioners then filed a petition for review on certiorari with this Court on 1 October
Office to him dated Septmber 28, 1990, respondents failed to submit the same, 1996, docketed as G.R. No. 126183. By resolution of 7 October 1997 we We affirmed the foregoing rulings in Bagana v. Court of Appeals 23 by denying a
which failure, is considered a waiver on their part of their right to answer the granted petitioners' motion for the consolidation of G.R. Nos. 126183 and 129221 similar petition filed by another group of teachers who participated in the 1990
charges and to controvert the same. involving as they did common questions of fact and law. mass actions but who claimed to have been merely exercising their constitutional
Petitioners contend that the Court of Appeals grievously erred in affirming the CSC right to free assembly. We held in Bagana that the Court of Appeals committed no
Wherefore, after a careful evaluation of the records, this Office finds the resolutions finding them guilty of conduct prejudicial to the best interest of the reversible error in affirming the CSC resolutions finding the teachers guilty of
respondents guilty as charged. service when their only "offense" was to exercise their constitutional right to conduct prejudicial to the best interest of the service and imposing penalties of six
peaceably assemble and petition the government for redress of their grievances. (6) months' suspension without pay. In Bangalisan v. Court of Appeals 24 we added
In accordance with Memorandum Circular 30 s. 1989 of the Civil Service Moreover petitioners insist that the mass actions of September/October 1990 were that the persistent refusal of the striking teachers to call the mass actions by the
Commission on Guidelines in the Application of Penalty in Administrative Cases, not "strikes" as there was no actual disruption of classes. Petitioners therefore ask conventional term "strike" did not erase the true nature of the mass actions as
the herein respondents are dismissed from Office effective immediately. The for exoneration or, in the alternative, award of back wages for the period of three unauthorized stoppages of work the purpose of which was to obtain a favorable
decisions dismissing petitioners were immediately (3) years when they were not allowed to work while awaiting resolution of their response to the teachers' economic grievances. We again stressed that the teachers
implemented. Petitioners appealed to the Merit Systems Protection Board (MSPB) appeals by the MSPB and CSC, deducting the period of six (6) months' suspension were penalized not because they exercised their right to peaceably assemble but
and then to the Civil Service Commission (CSC). In 1993 the CSC found petitioners eventually meted them. The petitions must be denied in view of previous because of the manner by which such right was exercised, i.e., going on
unauthorized and unilateral absences thus disrupting classes in various schools in the 1990 illegal mass actions. On appeal the CSC while affirming the factual finding
Metro Manila which produced adverse effects upon the students for whose that petitioners indeed participated in the mass the factual finding that petitioners
education the teachers were responsible. But herein petitioners contend that indeed participated in the mass actions found them liable only for conduct
classes were not actually disrupted because substitute teachers were immediately prejudicial to the best interest of the service. Clearly the CSC decision did not
appointed by Secretary Cario. Besides being a purely factual assertion which this proceed from a finding that petitioners did not commit the acts complained of.
Court cannot take cognizance of in a petition for review, the fact that the prompt Having been found to have actually participated in the illegal mass actions although
remedial action taken by Secretary Cario might have partially deflected the found answerable for a lesser offense, petitioners could not be considered as fully
adverse effects of the mass protests did not erase the administrative liability of innocent of the charges against them. 29 Being found liable for a lesser offense is
petitioners for the intended consequences thereof which were the very reason why not equivalent to exoneration. Thus in Bangalisan we denied the
such prompt remedial action became necessary. Considering the foregoing, we find claim for back wages of those teachers who were found to have actually
that respondent Court of Appeals did not err in sustaining the CSC resolutions participated in the 1990 mass actions but granted the claim of one Rodolfo Mariano
finding petitioners guilty of conduct prejudicial to the best interest of the who was absent only because he attended the wake and interment of his
service. As an alternative prayer, petitioners ask that in the event their exoneration grandmother. In Jacinto v. Court of Appeals 31 we again denied the claim for back
is not decreed they be awarded back wages for the period when they were not wages of teachers found to have given cause for their suspension i.e., their
allowed to work by reason of the supposed unjustified immediate implementation unjustified abandonment of classes to the prejudice of their students but granted
of the dismissal orders of Secretary Cario while awaiting resolution of their the claim of Merlinda Jacinto who was absent because of illness. Petitioners do
appeals by the MSPB and CSC. The issue of whether back wages may be awarded not deny, nay they even admit, having participated in the 1990 mass actions. Thus
to teachers ordered reinstated to the service after the dismissal orders of Secretary having given cause for their supension, their prayer for backwages must be denied
Cario were commuted by the CSC to six (6) months' suspension is already settled. conformably with settled rulings of this court.

In Bangalisan v. Court of Appeals 25 we resolved the issue in the negative on the WHEREFORE, the petitions are DENIED and the assailed Decisions of the Court of
ground that the teachers were neither exonerated nor unjustifiably suspended, two Appeals dated 29 November 1995 and 24 April 1996 are AFFIRMED. No costs.
(2) circumstances necessary for the grant of back wages in administrative
disciplinary cases. Like herein petitioners, those in Bangalisan were also teachers SO ORDERED. Davide, Jr., C.J., Romero, Melo, Puno, Vitug, Kapunan, Mendoza,
who participated in the 1990 mass actions for which they were dismissed by Panganiban, Quisumbing, Purisima, Pardo, Buena, and Gonzaga-Reyes, JJ., concur
Secretary Cario but ordered merely suspended for six (6) months by the Civil
Service Commission. On a plea that the immediate implementation of the dismissal
orders of Secretary Cario was unjustified, thus warranting an award of back wages
the Court said As to the immediate execution of the decision of the Secretary
against petitioners, the same is authorized by Section 47, paragraph (2), of
Executive Order No. 292, thus: "The Secretaries and heads of agencies and
instrumentalities, provinces, cities and municipalities shall have jurisdiction to
investigate and decide matters involving disciplinary action against officers and
employees under their jurisdiction. Their decision shall be final in case the penalty
imposed is suspension for not more than thirty days or fine in an amount not
exceeding thirty days' salary. In case the decision rendered by a bureau or office is
appealable to the Commission, the same shall be executory except when the
penalty is removal, in which case the same shall be executory only after
confirmation by the Secretary concerned.
And since it was already the final dismissal orders of Secretary Cario which were
being carried out, immediate implementation even pending appeal was clearly
sanctioned by the aforequoted provision of the Administrative Code of 1987. 26
Hence, being legal, the immediate execution of the dismissal orders could not be
considered unjustified.

The cases cited by petitioners to support their prayer for back salaries, namely,
Abellera v. City of Baguio 27 and Bautista v. Peralta 28 being cases which involved
the unjustified immediate execution of the dismissal orders of the then Civil Service
Commissioner pending appeal to the Civil Service Board of Appeals are therefore
not applicable to justify petitioners' prayer. Neither could petitioners be considered
to have been exonerated from the charges levelled against them by Secretary
Cario from the mere fact that they were found guilty only of conduct prejudicial to
the best interest of the service by the CSC. It must be remembered that Secretary
Cario charged petitioners with grave misconduct, gross neglect of duty, gross
violation of civil service law, rules and regulations, etc., for having participated in
3. Except in respect of claims arising under Sections I and II of the policy, 4. That when the said incident occurred on August 28, 1987, the said ISUZU KBD
NATURE OF ACTION any accident, loss, damage or liability directly or indirectly, proximately or remotely PICK-UP was insured by the defendant for P100,000.00 excluding third-party liability
occasioned by, contributed to by or traceable to, or arising out of, or in connection under Commercial Vehicle Policy No. CV/122415 per Renewal Certificate No. 02189
with flood, typhoon, hurricane, volcanic eruption, earthquake or other convulsion of a copy of which is herewith attached as Annex "B"; and with the premiums and
G.R. No. 84628 November 16, 1989 nature, invasion, the act of foreign enemies, hostilities or warlike operations other expenses thereon duly paid for under Official Receipt No. 691, dated
(whether war be declared or not), civil commotion, mutiny, rebellion, insurrection, September 8, 1986, covering the period from October 1, 1986 to October 1, 1987, a
HEIRS OF ILDEFONSO COSCOLLUELA, SR., INC., petitioner, military or usurped power, or by any direct or indirect consequences of any of the copy of the same being attached hereto as Annex "C";
vs. said occurrences and in the event of any claim hereunder, the insured shall prove
RICO GENERAL INSURANCE CORPORATION, COURT OF APPEALS (11th Division), that the accident, loss or damage or liability arose independently of, and was in no 5. That, the damage on said motor vehicle being a "fait accompli" and that it was
and HON. ENRIQUE T. JOCSON, Judge, Regional Trial Court of Negros Occidental way connected with, or occasioned by, or contributed to, any of the said insured by the defendant at the time it was damaged, it is the obligation of the
Branch, respondents. occurrences, or any consequence thereof, and in default of such proof, the defendant to restore the said vehicle to its former physical and running condition
Company shall not be liable to make any payment in respect of such claim. when it was insured however defendant refused and still refuses and fails, despite
Ildefonso S. Villanueva and Rolando N. Medalla for petitioner. (Emphasis supplied; see Rollo, p. 33,71) demands in writing made by plaintiff and its counsel to that effect, copies of said
letters attached hereto as Annexes "D" & "E";
Limbaga, Bana-ag, Bana-ag & Associates for private respondent. The private respondent alleged that the firing was "an indirect consequence of
rebellion, insurrection or civil commotion." The petitioner opposed the motion, 6. That, for purposes of restoring the ISUZU KBD PICK-UP insured by the
saying that the quoted provision does not apply in the absence of an official defendant to its former physical and running condition when it was insured, as
governmental proclamation of any of the above-enumerated conditions. mentioned above, would cost P80,000.00, which will include repair, repainting,
GUTIERREZ, JR., J.: replacement of spare parts, labor, etc., the said amount having arrived at upon
The trial court ordered the dismissal of the complaint for lack of cause of action inspection and appraisal of the said motor vehicle by knowledgeable and technical
The main issues raised in this petition for review on certiorari are whether the Court stating that the damage arose from a civil commotion or was a direct result thereof. people;
of Appeals erred in: (1) affirming the dismissal by the trial court of the complaint for (Rollo, p. 37)
damages on the ground of lack of cause of action, and in (2) denying due course to a 7. That, as a consequence of defendant's refusal to settle or pay the just claim of
petition for certiorari on the ground that the remedy of the petitioner to assail said A motion for reconsideration filed by the petitioner was denied by the trial court plaintiff, plaintiff has been compelled to hire the legal services of counsel for the
order is appeal. which further noted that "Courts can take effective cognizance of the general civil protection of its rights and interest at the agreed fee of P15,000.00, for and as
disturbance in the country akin to civil war without any executive proclamation of attorney's fees, which sum plaintiff is claiming from the defendant. (At pp. 29-30,
Petitioner, Heirs of Ildefonso Coscoluella, Inc. is a domestic corporation and the the existence of such unsettling condition." (Rollo, p. 38) Rollo)
registered owner of an Isuzu KBD Pick-up truck bearing Motor No. 663296 and Plate
No. LTV-FAW-189. The vehicle was insured with the private respondent Rico A second motion for reconsideration was filed but was later withdrawn. Petitioner further maintains that the order of dismissal was erroneous in that: it
General Insurance Corporation for a consideration of P100,000.00 excluding third overlooked the principle that a motion to dismiss a complaint on the ground of
party liability under Commercial Vehicle Policy No. CV-122415 per Renewal Petitioner filed a notice of appeal which was given due course. However, the trial failure to state a cause of action hypothetically admits the allegations in the
Certificate No. 02189. The premiums and other expenses for insurance paid covered court, stated in its order that "the records of the case will not be transmitted to the complaint; no trial was held for the reception of proof that the firing incident was a
the period from October 1, 1986 to October 1, 1987. Court of Appeals, the appropriate remedy being (a) petition for review by way of direct or indirect result of a civil commotion, mutiny, insurrection or rebellion;
certiorari." In that same order, the trial court took cognizance of the withdrawal of private respondent had the burden of proof to show that the cause was really an
On August 28, 1987 and within the period covered by the insurance, the insured the second motion for reconsideration but noted the police blotter appended to excepted risk; and in any case, the nature of the incident as a "civil disturbance"
vehicle was severely damaged and rendered unserviceable when fired upon by a said motion which showed that "other than M-16 Armalite Rifles (the number of must first be officially proclaimed by the executive branch of the government.
group of unidentified armed persons at Hacienda Puyas, Barangay Blumentritt, which were not specified for unknown reasons), nothing else was taken by the Private respondent, on the other hand, argues that the accident was really a result
Murcia, Negros Occidental. In the same incident, four persons died. attackers." (Rollo, p. 40) of a civil commotion, one of the fatalities being a military officer. (Rollo, p. 59)

Petitioner filed its claim of P80,000.00 for the repair of the vehicle but private Thereafter, the petitioner filed a petition for certiorari with the Court of Appeals. After a review of the records, the Court finds that the allegations set forth in the
respondent, in a letter dated October 8, 1987, refused to grant it. As a consequence, The appellate court denied the petition, affirmed the trial court's dismissal order, complaint sufficiently establish a cause of action. The following are the requisites
the petitioner was prompted to file a complaint with the Regional Trial Court, 6th and also ruled that an appeal in the ordinary course of law, not a special civil action for the existence of a cause of action: (1) a right in favor of the plaintiff by whatever
Judicial Region, Branch 47 at Bacolod City, docketed as Civil Case No. 4707, to of certiorari, is the proper remedy for the petitioner in assailing the dismissal order. means and under whatever law it arises or is created; (2) an obligation on the part
recover the claim of P80,000.00 plus interest and attorney's fees. of the named defendant to respect, or not to violate such right; and (3) an act or
Hence, this petition to review the respondent appellate court's decision. omission on the part of the said defendant constituting a violation of the plaintiff's
The private respondent filed a motion to dismiss alleging that the complaint lacks a right or a breach of the obligation of the defendant to the plaintiff. (Cole v. Vda. de
cause of action because the firing by armed men is a risk excepted under the Petitioner asserts that its complaint states a cause of action since ultimate facts Gregoria, 116 SCRA 670 [1982]; Baliwag Transit, Inc. v. Ople, G. R. No. 57642, March
following provisions in the insurance policy: were alleged as follows: 16, 1989)

The Company shall not be liable under any Section of the Policy in respect of: 3. That, on August 28, 1987, the ISUZU KBD PICK-UP referred to in the preceding The facts as alleged clearly define the existence of a right of the petitioner to a just
paragraph was damaged as a result of an incident at Hda. Puyas, Barangay claim against the insurer for the payment of the indemnity for a loss due to an event
1. xxxxx Blumentritt, Murcia, Negros Occidental, when it was fired upon by a group of against which the petitioner's vehicle was insured. The insurance contract
unidentified armed persons causing even the death of four (4) persons and mentioned therein manifests a right to pursue a claim and a duty on the part of the
2. xxxxx rendering the said vehicle almost totally damaged and unserviceable; insurer or private respondent to compensate the insured in case of a risk insured
against. The refusal of the insurer to satisfy the claim and the consequent loss to the
petitioner in incurring the cost of acquiring legal assistance on the matter affirmative allegations." (Summit Guaranty and Insurance Co., Inc. vs. Court of its appellate capacity affirming, modifying or reversing a decision of a municipal trial
constitutes a violation or an injury brought to the petitioner. Appeals, 110 SCRA 241 [1981]; Tai Tong Chuache & Co. v. Insurance Commissioner, court or lower tribunal. (Section 22, Batas Pambansa Blg. 129 and Section 22 (6) of
158 SCRA 366 [1988]; Paris-Manila Perfume Co. v. Phoenix Assurance Co., 49 Phil. the Interim Rules). In this case, the petitioner assailed the dismissal order of the
There is, therefore, a sufficient cause of action upon which the trial court can render 753 [1926]). Where the insurer denies liability for a loss alleged to be due to a risk Regional Trial Court of a complaint originally filed with it. This adverse order which
a valid judgment. (Taedo v. Bernad, et al; G. R. No. 66520, August 30, 1988). not insured against, but fails to establish the truth of such fact by concrete proofs, had the effect of a judgment on the merits, may be appealed to the Court of
the Court rules that the insurer is liable under the terms and conditions of the policy Appeals by filing a notice of appeal within fifteen (15) days from receipt of notice of
The Court is very much cognizant of the principle that a motion to dismiss on the by which it has bound itself. In this case, the dismissal order without hearing and the order both on questions of law and of fact. (Section 39, Batas Pambansa Blg.
ground of failure to state a cause of action stated in the complaint hypothetically reception of evidence to prove that the firing incident was indeed a result of a civil 129 and Section 19 (a) of the Interim Rules). This was exactly what petitioner did
admits the truth of the facts therein. The Court notes the following limitations on commotion, rebellion or insurrection constitutes reversible error on the part of the after its motion for reconsideration was denied. Unfortunately, the trial judge failed
the hypothetical admission: trial court. to see the propriety of this recourse. And the Court of Appeals compounded the
problem when it denied the petitioner any remedy arising from the Judge's wrong
The hypothetical admission is however limited to the relevant and material facts The Court stresses that it would be a grave and dangerous procedure for the courts instructions.
well pleaded in the complaint and inferences fairly deducible therefrom. The to permit insurance companies to escape liability through a motion to dismiss
admission does not extend to conclusions or interpretations of law: nor does it without the benefit of hearing and evidence every time someone is killed, or as in The filing of the petition for certiorari was proper. Petitioner has satisfactorily
cover allegations of fact the falsity of which is subject to judicial notice. (U. Baez this case,. property is damaged in an ambush. The question on the nature of the shown before the respondent appellate court that the trial judge "acted whimsically
Electric Light Co. v. Abra Electric Cooperative, Inc., 119 SCRA 90 [1982]) firing incident for the purpose of determining whether or not the insurer is liable in total disregard of evidence material to and even decisive of the controversy".
must first be threshed out and resolved in a full-blown trial. (Pure Foods Corp. v. National Labor Relations Commission, G. R. No. 78591, March
Applying the above principle, we hold that the private respondent's motion to 21, 1989).
dismiss hypothetically admits the facts alleged in the complaint. We do not find The evidence to be received does not even have to relate to the existence of an
anything in the complaint which does not deserve admission by the motion since official government proclamation of the nature of the incident because the latter is The extraordinary writ of certiorari is always available where there is no appeal or
there are no "conclusions or interpretations of law" nor "allegations of fact the not an explicit requirement in the exception clause resolved in a mere motion to any other plain, speedy and adequate remedy in the ordinary course of law.
falsity of which is subject to judicial notice." It is clear that the complaint does no dismiss and is, for purposes of this petition for review on certiorari, immaterial. This (Tropical Homes, Inc. v. National Housing Authority, 152 SCRA 540 [1987]; Pure
more and no less than state simply that the van was damaged due to the firing by particular issue on when to take cognizance of a rebellion for purposes of the law on Foods Corp. v. NLRC, supra)
unidentified armed men. Since the complaint does not explicitly state nor intimate contracts and obligations should have been developed during the trial on the merits
civil strife which private respondent insists to be the cause of the damage, the or may have to await remedial legislation in Insurance Law or a decision in a more Since the petitioner was denied the remedy of appeal, the Court deems that a
motion to dismiss cannot go beyond the admission of the facts stated and appropriate case. certiorari petition was in order.
inferences reasonably deducible from them. Any other assertion by the private
respondent is subject to proof. Meanwhile, the sufficiency of the petitioner's cause The petitioner also questions the reasoning of the Court of Appeals in denying due WHEREFORE, considering the foregoing, the petition is hereby GRANTED. The
of action has been shown since, admitting the facts alleged, a valid judgment can be course to the petition for certiorari. The appellate court said that even assuming for decision of the respondent Court of Appeals affirming the dismissal order by the
rendered. the sake of argument that the dismissal order by the trial court was not procedurally Regional Trial Court is hereby REVERSED and SET ASIDE. Let the case be remanded
correct for lack of hearing, there was only an "error of judgment or procedure" to the lower court for trial on the merits.
The private respondent's invocation of the exceptions clause in the insurance policy correctible only by appeal then available in the ordinary course of law and not by a
as the basis for its non-liability and the consequent dismissal of the complaint is special civil action of certiorari which cannot be a substitute for appeal. SO ORDERED.
without merit. We also reiterate the established rule that when the terms of an
insurance contract contain limitations on liability, the court "should construe them The records show that the remedy of appeal was actually intended to be pursued by Fernan, (C.J., Chairman), Feliciano, Bidin and Cortes, JJ., concur.
in such a way as to preclude the insurer from non-compliance with his obligations." petitioner. However, the appeal was rendered unfeasible when the trial judge
(Taurus Taxi Co. Inc. v. Capital Insurance and Surety Company, Inc., 24 SCRA 454 refused to transmit the records to the appellate court. (see Rollo, p. 40) The judge,
[l968]) A policy of insurance with a narration of exceptions tending to work a in effect, ruled out the remedy of appeal which was supposed to be availed of as a
forfeiture of the policy shall be interpreted liberally in favor of the insured and matter of right. In filing a petition for certiorari, the petitioner was acting upon the
strictly against the insurance company or the party for whose benefit they are instructions of the judge. Under a situation where there was no more plain, speedy
inserted. (Eagle Star Insurance, Ltd. v. Chia Yu, 96 Phil. 696 [1955]; Trinidad v. Orient and adequate remedy in the ordinary course of law, the only available recourse was
Protective Asso., 67 Phil. 181 [1939]; Serrano v. Court of Appeals, 130 SCRA 327 to file a special civil action of certiorari to determine whether or not the dismissal
[1984]; and National Power Corp. v. Court of Appeals, 145 SCRA 533 [1986]). order was issued with grave abuse of discretion.

The facts alleged in the complaint do not give a complete scenario of the real nature It is apparent, moreover, that the respondent appellate court failed to appreciation
of the firing incident. Hence, it was incumbent upon the trial judge to have made a the petitioner's predicament. The trial judge, aside from dismissing the complaint
deeper scrutiny into the circumstances of the case by receiving evidence instead of which we now rule to have a sufficient cause of action, likewise prevented an
summarily disposing of the case. Contrary to what the respondent appellate court ordinary appeal to prosper in contravention of what is provided for by the rules of
says, this case does not present a pure question of law but demands a factual procedure.
determination of whether the incident was a result of events falling under the
exceptions to the liability of private respondent contained in the policy of insurance. The April 6, 1988 order of the trial judge stating that the appropriate remedy was a
petition for review by way of certiorari is deplorable. The lower court cannot even
We agree with the petitioner's claim that the burden of proof to show that the distinguish between an original petition for certiorari and a petition for review by
insured is not liable because of an excepted risk is on the private respondent. The way of certiorari. A petition for review before the Court of Appeals could have been
Rules of Court in its Section 1, Rule 131 provides that "each party must prove his availed of if what is challenged is an adverse decision of the Regional Trial Court in
G.R. No. 93073 December 21, 1992 SO ORDERED. 1 appear at the scheduled pre-trial conference despite due notice. Only private
respondent Fermin Canlas filed an Amended Answer wherein he, denied having
REPUBLIC PLANTERS BANK, petitioner, From the above decision only defendant Fermin Canlas appealed to the then issued the promissory notes in question since according to him, he was not an
vs. Intermediate Court (now the Court Appeals). His contention was that inasmuch as officer of Pinch Manufacturing Corporation, but instead of Worldwide Garment
COURT OF APPEALS and FERMIN CANLAS, respondents. he signed the promissory notes in his capacity as officer of the defunct Worldwide Manufacturing, Inc., and that when he issued said promissory notes in behalf of
Garment Manufacturing, Inc, he should not be held personally liable for such Worldwide Garment Manufacturing, Inc., the same were in blank, the typewritten
authorized corporate acts that he performed. It is now the contention of the entries not appearing therein prior to the time he affixed his signature.
CAMPOS, JR., J.: petitioner Republic Planters Bank that having unconditionally signed the nine (9)
promissory notes with Shozo Yamaguchi, jointly and severally, defendant Fermin In the mind of this Court, the only issue material to the resolution of this appeal is
This is an appeal by way of a Petition for Review on Certiorari from the decision * of Canlas is solidarity liable with Shozo Yamaguchi on each of the nine notes. whether private respondent Fermin Canlas is solidarily liable with the other
the Court of Appeals in CA G.R. CV No. 07302, entitled "Republic Planters defendants, namely Pinch Manufacturing Corporation and Shozo Yamaguchi, on the
Bank.Plaintiff-Appellee vs. Pinch Manufacturing Corporation, et al., Defendants, and We find merit in this appeal. nine promissory notes.
Fermin Canlas, Defendant-Appellant", which affirmed the decision ** in Civil Case
No. 82-5448 except that it completely absolved Fermin Canlas from liability under From the records, these facts are established: Defendant Shozo Yamaguchi and We hold that private respondent Fermin Canlas is solidarily liable on each of the
the promissory notes and reduced the award for damages and attorney's fees. The private respondent Fermin Canlas were President/Chief Operating Officer and promissory notes bearing his signature for the following reasons:
RTC decision, rendered on June 20, 1985, is quoted hereunder: Treasurer respectively, of Worldwide Garment Manufacturing, Inc.. By virtue of
Board Resolution No.1 dated August 1, 1979, defendant Shozo Yamaguchi and The promissory motes are negotiable instruments and must be governed by the
WHEREFORE, premises considered, judgment is hereby rendered in favor of the private respondent Fermin Canlas were authorized to apply for credit facilities with Negotiable Instruments Law. 2
plaintiff Republic Planters Bank, ordering defendant Pinch Manufacturing the petitioner Republic Planters Bank in the forms of export advances and letters of
Corporation (formerly Worldwide Garment Manufacturing, Inc.) and defendants credit/trust receipts accommodations. Petitioner bank issued nine promissory Under the Negotiable lnstruments Law, persons who write their names on the face
Shozo Yamaguchi and Fermin Canlas to pay, jointly and severally, the plaintiff bank notes, marked as Exhibits A to I inclusive, each of which were uniformly worded in of promissory notes are makers and are liable as such. 3 By signing the notes, the
the following sums with interest thereon at 16% per annum from the dates the following manner: maker promises to pay to the order of the payee or any holder 4 according to the
indicated, to wit: tenor thereof. 5 Based on the above provisions of law, there is no denying that
___________, after date, for value received, I/we, jointly and severaIly promise to private respondent Fermin Canlas is one of the co-makers of the promissory notes.
Under the promissory note (Exhibit "A"), the sum of P300,000.00 with interest from pay to the ORDER of the REPUBLIC PLANTERS BANK, at its office in Manila, As such, he cannot escape liability arising therefrom.
January 29, 1981 until fully paid; under promissory note (Exhibit "B"), the sum of Philippines, the sum of ___________ PESOS(....) Philippine Currency...
P40,000.00 with interest from November 27, 1980; under the promissory note Where an instrument containing the words "I promise to pay" is signed by two or
(Exhibit "C"), the sum of P166,466.00 which interest from January 29, 1981; under On the right bottom margin of the promissory notes appeared the signatures of more persons, they are deemed to be jointly and severally liable thereon. 6 An
the promissory note (Exhibit "E"), the sum of P86,130.31 with interest from January Shozo Yamaguchi and Fermin Canlas above their printed names with the phrase instrument which begins" with "I" ,We" , or "Either of us" promise to, pay, when
29, 1981; under the promissory note (Exhibit "G"), the sum of P12,703.70 with "and (in) his personal capacity" typewritten below. At the bottom of the promissory signed by two or more persons, makes them solidarily liable. 7 The fact that the
interest from November 27, 1980; under the promissory note (Exhibit "H"), the sum notes appeared: "Please credit proceeds of this note to: singular pronoun is used indicates that the promise is individual as to each other;
of P281,875.91 with interest from January 29, 1981; and under the promissory note meaning that each of the co-signers is deemed to have made an independent
(Exhibit "I"), the sum of P200,000.00 with interest from January 29, 1981. ________ Savings Account ______XX Current Account singular promise to pay the notes in full.

Under the promissory note (Exhibit "D") defendants Pinch Manufacturing No. 1372-00257-6 In the case at bar, the solidary liability of private respondent Fermin Canlas is made
Corporation (formerly named Worldwide Garment Manufacturing, Inc.), and Shozo clearer and certain, without reason for ambiguity, by the presence of the phrase
Yamaguchi are ordered to pay jointly and severally, the plaintiff bank the sum of of WORLDWIDE GARMENT MFG. CORP. "joint and several" as describing the unconditional promise to pay to the order of
P367,000.00 with interest of 16% per annum from January 29, 1980 until fully paid Republic Planters Bank. A joint and several note is one in which the makers bind
These entries were separated from the text of the notes with a bold line which ran themselves both jointly and individually to the payee so that all may be sued
Under the promissory note (Exhibit "F") defendant corporation Pinch (formerly horizontally across the pages. together for its enforcement, or the creditor may select one or more as the object
Worldwide) is ordered to pay the plaintiff bank the sum of P140,000.00 with of the suit. 8 A joint and several obligation in common law corresponds to a civil law
interest at 16% per annum from November 27, 1980 until fully paid. In the promissory notes marked as Exhibits C, D and F, the name Worldwide solidary obligation; that is, one of several debtors bound in such wise that each is
Garment Manufacturing, Inc. was apparently rubber stamped above the signatures liable for the entire amount, and not merely for his proportionate share. 9 By
Defendant Pinch (formely Worldwide) is hereby ordered to pay the plaintiff the sum of defendant and private respondent. making a joint and several promise to pay to the order of Republic Planters Bank,
of P231,120.81 with interest at 12% per annum from July 1, 1981, until fully paid private respondent Fermin Canlas assumed the solidary liability of a debtor and the
and the sum of P331,870.97 with interest from March 28, 1981, until fully paid. On December 20, 1982, Worldwide Garment Manufacturing, Inc. noted to change payee may choose to enforce the notes against him alone or jointly with Yamaguchi
its corporate name to Pinch Manufacturing Corporation. and Pinch Manufacturing Corporation as solidary debtors.
All the defendants are also ordered to pay, jointly and severally, the plaintiff the
sum of P100,000.00 as and for reasonable attorney's fee and the further sum On February 5, 1982, petitioner bank filed a complaint for the recovery of sums of As to whether the interpolation of the phrase "and (in) his personal capacity" below
equivalent to 3% per annum of the respective principal sums from the dates above money covered among others, by the nine promissory notes with interest thereon, the signatures of the makers in the notes will affect the liability of the makers, We
stated as penalty charge until fully paid, plus one percent (1%) of the principal sums plus attorney's fees and penalty charges. The complainant was originally brought do not find it necessary to resolve and decide, because it is immaterial and will not
as service charge. against Worldwide Garment Manufacturing, Inc. inter alia, but it was later amended affect to the liability of private respondent Fermin Canlas as a joint and several
to drop Worldwide Manufacturing, Inc. as defendant and substitute Pinch debtor of the notes. With or without the presence of said phrase, private
With costs against the defendants. Manufacturing Corporation it its place. Defendants Pinch Manufacturing respondent Fermin Canlas is primarily liable as a co-maker of each of the notes and
Corporation and Shozo Yamaguchi did not file an Amended Answer and failed to his liability is that of a solidary debtor.
instrument when completed may be enforced against any person who became a promissory note denominated as Exhibit C, the amount of P166,466.00 with interest
Finally, the respondent Court made a grave error in holding that an amendment in a party thereto prior to its completion, it must be filled up strictly in accordance with from January 29, 1981; under the promissory note denominated as Exhibit D, the
corporation's Articles of Incorporation effecting a change of corporate name, in this the authority given and within a reasonable time... amount of P367,000.00 with interest from January 29, 1981 until fully paid; under
case from Worldwide Garment manufacturing Inc to Pinch Manufacturing the promissory note marked as Exhibit E, the amount of P86,130.31 with interest
Corporation extinguished the personality of the original corporation. Proof that the notes were signed in blank was only the self-serving testimony of from January 29, 1981; under the promissory note marked as Exhibit F, the sum of
private respondent Fermin Canlas, as determined by the trial court, so that the trial P140,000.00 with interest from November 27, 1980 until fully paid; under the
The corporation, upon such change in its name, is in no sense a new corporation, court ''doubts the defendant (Canlas) signed in blank the promissory notes". We promissory note marked as Exhibit G, the amount of P12,703.70 with interest from
nor the successor of the original corporation. It is the same corporation with a chose to believe the bank's testimony that the notes were filled up before they November 27, 1980; the promissory note marked as Exhibit H, the sum of
different name, and its character is in no respect changed. 10 were given to private respondent Fermin Canlas and defendant Shozo Yamaguchi P281,875.91 with interest from January 29, 1981; and the promissory note marked
for their signatures as joint and several promissors. For signing the notes above as Exhibit I, the sum of P200,000.00 with interest on January 29, 1981.
A change in the corporate name does not make a new corporation, and whether their typewritten names, they bound themselves as unconditional makers. We take
effected by special act or under a general law, has no affect on the identity of the judicial notice of the customary procedure of commercial banks of requiring their The liabilities of defendants Pinch Manufacturing Corporation (formerly Worldwide
corporation, or on its property, rights, or liabilities. 11 clientele to sign promissory notes prepared by the banks in printed form with blank Garment Manufacturing, Inc.) and Shozo Yamaguchi, for not having appealed from
spaces already filled up as per agreed terms of the loan, leaving the borrowers- the decision of the trial court, shall be adjudged in accordance with the judgment
The corporation continues, as before, responsible in its new name for all debts or debtors to do nothing but read the terms and conditions therein printed and to sign rendered by the Court a quo.
other liabilities which it had previously contracted or incurred. 12 as makers or co-makers. When the notes were given to private respondent Fermin
Canlas for his signature, the notes were complete in the sense that the spaces for With respect to attorney's fees, and penalty and service charges, the private
As a general rule, officers or directors under the old corporate name bear no the material particular had been filled up by the bank as per agreement. The notes respondent Fermin Canlas is hereby held jointly and solidarity liable with
personal liability for acts done or contracts entered into by officers of the were not incomplete instruments; neither were they given to private respondent defendants for the amounts found, by the Court a quo. With costs against private
corporation, if duly authorized. Inasmuch as such officers acted in their capacity as Fermin Canlas in blank as he claims. Thus, Section 14 of the NegotiabIe Instruments respondent.
agent of the old corporation and the change of name meant only the continuation Law is not applicable.
of the old juridical entity, the corporation bearing the same name is still bound by SO ORDERED.
the acts of its agents if authorized by the Board. Under the Negotiable Instruments The ruling in case of Reformina vs. Tomol relied upon by the appellate court in
Law, the liability of a person signing as an agent is specifically provided for as reducing the interest rate on the promissory notes from 16% to 12% per annum Narvasa, C.J., (Chairman), Feliciano, Regalado and Nocon, JJ., concur.
follows: does not squarely apply to the instant petition. In the abovecited case, the rate of
12% was applied to forebearances of money, goods or credit and court judgemets
Sec. 20. Liability of a person signing as agent and so forth. Where the instrument thereon, only in the absence of any stipulation between the parties.
contains or a person adds to his signature words indicating that he signs for or on
behalf of a principal , or in a representative capacity, he is not liable on the In the case at bar however , it was found by the trial court that the rate of interest is
instrument if he was duly authorized; but the mere addition of words describing him 9% per annum, which interest rate the plaintiff may at any time without notice,
as an agent, or as filling a representative character, without disclosing his principal, raise within the limits allowed law. And so, as of February 16, 1984 , the plaintiff had
does not exempt him from personal liability. fixed the interest at 16% per annum.

Where the agent signs his name but nowhere in the instrument has he disclosed the This Court has held that the rates under the Usury Law, as amended by Presidential
fact that he is acting in a representative capacity or the name of the third party for Decree No. 116, are applicable only to interests by way of compensation for the use
whom he might have acted as agent, the agent is personally liable to take holder of or forebearance of money. Article 2209 of the Civil Code, on the other hand,
the instrument and cannot be permitted to prove that he was merely acting as governs interests by way of damages. 15 This fine distinction was not taken into
agent of another and parol or extrinsic evidence is not admissible to avoid the consideration by the appellate court, which instead made a general statement that
agent's personal liability. 13 the interest rate be at 12% per annum.

On the private respondent's contention that the promissory notes were delivered to Inasmuch as this Court had declared that increases in interest rates are not subject
him in blank for his signature, we rule otherwise. A careful examination of the notes to any ceiling prescribed by the Usury Law, the appellate court erred in limiting the
in question shows that they are the stereotype printed form of promissory notes interest rates at 12% per annum. Central Bank Circular No. 905, Series of 1982
generally used by commercial banking institutions to be signed by their clients in removed the Usury Law ceiling on interest rates. 16
obtaining loans. Such printed notes are incomplete because there are blank spaces
to be filled up on material particulars such as payee's name, amount of the loan, In the 1ight of the foregoing analysis and under the plain language of the statute
rate of interest, date of issue and the maturity date. The terms and conditions of and jurisprudence on the matter, the decision of the respondent: Court of Appeals
the loan are printed on the note for the borrower-debtor 's perusal. An incomplete absolving private respondent Fermin Canlas is REVERSED and SET ASIDE. Judgement
instrument which has been delivered to the borrower for his signature is governed is hereby rendered declaring private respondent Fermin Canlas jointly and severally
by Section 14 of the Negotiable Instruments Law which provides, in so far as liable on all the nine promissory notes with the following sums and at 16% interest
relevant to this case, thus: per annum from the dates indicated, to wit:

Sec. 14. Blanks: when may be filled. Where the instrument is wanting in any Under the promissory note marked as exhibit A, the sum of P300,000.00 with
material particular, the person in possesion thereof has a prima facie authority to interest from January 29, 1981 until fully paid; under promissory note marked as
complete it by filling up the blanks therein. ... In order, however, that any such Exhibit B, the sum of P40,000.00 with interest from November 27, 1980: under the
G.R. No. 94093 August 10, 1993 6. That on various dates and for valuable consideration, the defendant Far mortgage securing said obligations was filed, it had not received from BPI or its
East received from and was extended by . . . plaintiff predecessor any demand for payment and thus, it had "labored under the belief
FAR EAST MARBLE (PHILS.), INC., LUIS R. TABUENA, JR. and RAMON A. TABUENA, Bank . . . credit facilities in the form of Trust Receipts, photo copies of which are that they [the obligations] have already been written off" in the books of BPI.
petitioners, hereto attached and made integral parts hereof as Annexes E, F, G, H, I and J. Moreover, Far East denied the genuineness and due execution of the trust receipts
vs. and of the Statement of Account (pp. 78-79, Rollo). A motion to hear affirmative
HONORABLE COURT OF APPEALS and BANK OF PHILIPPINE ISLANDS, respondents. 7. That said Trust Receipts . . . have long matured and despite repeated defenses was attached to the answer.
requests and demands for payment thereof with interests and related charges due
Minerva C. genevea for petitioners. Far East has failed and refused to pay. The amount due on said Trust Receipts with On March 16, 1987, BPI filed an opposition to the motion to hear affirmative
interests and related charges as of 10 September 1986 is P2,170,476.62 as itemized defenses, alleging that its cause of action against Far East have not prescribed, since
Sabino B. Padilla IV for Bank of the Philippines Islands. in a statement of account, copy of which is attached hereto and made an integral within 10 years from the time its cause of action accrued, various written
part hereof as extrajudicial demands (attached thereto as Annexes "A" and
Annex K. "A-1") were sent by BPI and received by Far East. Moreover, BPI offered several
written documents whereby Far East supposedly acknowledged its debt to BPI
MELO, J.: 8. That because of far East's failure and refusal to pay its long past due (Annexes "B" to "B-6). Withal, BPI maintained, the ten-years prescriptive period to
obligations under the Trust Receipts above alleged, plaintiff was constrained to file enforce its written contract had not only been interrupted, but was renewed.
This has reference to a petition for review by certiorari seeking the reversal of the this suit . . .
decision of the Court of Appeals dated June 26, 1990, in CA-G.R. CV No. 14404 On the same date, BPI filed a motion for summary judgment on the ground that
(Bellosillo (P), Marigomen, Sempio-Diy, JJ.) which set aside the order of the Regional xxx xxx xxx since Far East had admitted the genuineness and due execution of the promissory
Trial Court of the National Capital Judicial Region (Manila, Branch XIV), dated June 1, notes and the deed of chattel mortgage annexed to its complaint, there was no
1987 and remanded the case to the court a quo for further proceedings on the 10. That in September 1976 Far East executed in favor of . . . plaintiff Bank . . genuine issue as to any material fact, thus entitling BPI to a favorable judgment as a
grounds that the complaint for foreclosure of chattel mortgage with replevin had . a Chattel Mortgage, photocopy of which is attached hereto and made an integral matter of law in regard to its causes of action and on its right to foreclose the
not prescribed and that, there being a cause of action, further proceedings, part hereof as Annex L, to secure the payment of its loan obligations including chattel mortgage.
including the resolution of the motion for summary judgment may be pursued. interests and related charges. . .
On June 1, 1987, the trial court issued an order to the following effect:
The antecedent facts of the case may be chronicled as follows: xxx xxx xxx
WHEREFORE, the Court issues this Order:
On February 5, 1987, herein respondent Bank of the Philippines Islands (BPI) filed a CAUSE OF ACTION AGAINST INDIVIDUAL DEFENDANTS RAMON A. TABUENA AND
complaint for foreclosure of chattel mortgage with replevin against petitioner Far LUIS R. TABUENA, JR. 1 Dismissing the complaint against the defendant Far East Marble (Phils.) Inc. for
East Marble (Phils.), Inc. (Far East), Ramon A. Tabuena and Luis R. Tabuena, Jr. which lack of cause of action and on grounds of pre[s]cription:
was docketed as Civil Case No. 87-39345 of Branch XIV of the Regional Trial Court of 13. That in September 1976, defendants Ramon A. Tabuena and Luis R.
the National Capital Judicial Region stationed in Manila. Tabuena, Jr. executed in favor of . . . plaintiff Bank . . . a "continuing guaranty" 2 Denying for lack of merit the Motion for Summary Judgment and the
photocopy of which is attached hereto and made a part hereof as Annex M, Supplemental Motion for Summary Judgment;
The complaint pertinently alleged: whereby they bind themselves, jointly and severally, to answer for the loan
obligations to the Bank of defendant Far East. 3 Striking off from the records the order of March 6, 1987 and recalling the writ
FIRST CAUSE OF ACTION AGAINST FAR EAST of replevin issued by this Court, and dismissing all the contempt charges;
14. That despite requests and demands for their payment of Far East's long
2. That on various dates and for valuable consideration, the defendant Far past due accounts, said defendants Ramon A. Tabuena and Luis R. Tabuena, Jr. have 4 Ordering the Sheriff to desist permanently from enforcing the writ of seizure
East received from Commercial Bank and Trust Company . . . now merged with and failed and refused to pay said Far East accounts and have already defaulted in their and to return all the property seized by him under the Writ of Replevin, to the
into the plaintiff bank . . . several loans evidenced by promissory notes executed by solidary obligation under said "continuing Guaranty." defendant Far East Marble (Phils.) Inc. immediately from receipt of a copy of this
said Far East, photo copies of which are attached hereto and made integral parts order, and in case of his failure to do so, the value thereof shall be charged against
hereof as Annexes A, B and C. 15. That because of the failure and refusal of defendants Ramon A. Tabuena the replevin bond. (pp. 89-90, Rollo.)
and Luis R. Tabuena, Jr. in bad faith to pay Far East's past due accounts under their
3. That said promissory notes . . . .have long matured but despite repeated solidary obligation stipulated in said "Continuing Guaranty,". . . plaintiff has been An appeal therefrom was forthwith interposed by BPI, assailing the findings of the
requests and demands for payment thereof with interests and related charges due, constrained to file suit against them . . . trial court with respect to its finding that BPI's cause of action has prescribed and
Far East has failed and refused to pay. The account due on said promissory notes (pp. 32-36, Rollo.) the consequent denial of the motion for summary judgment.
with interests and related charges as of 10 September 1986 is P4,471,854.32
itemized in a statement of account, copy of which is attached hereto and made a On March 10, 1987, Far East filed an answer with compulsory counterclaim On June 26, 1990, the Court of Appeals rendered a decision setting aside the June 1,
part hereof as Annex D admitting the genuineness and due execution of the promissory notes attached as 1987 order of the court of origin and remanding the case to said court for further
Annexes A, B, and C to the complaint, but alleging further that said notes became proceedings, "including the resolution anew of plaintiff's motion for summary
4. That because of Far East's failure and refusal in bad faith to pay its long due and demandable on November 19, 1976, respectively. On the basis of the judgment . . ., reception of the evidence of the parties and, thereafter, to decide the
past due obligations under the promissory notes above alleged, plaintiff was maturity dates of the notes, Far East thereupon raised the affirmative defenses of case as the facts may warrant." (pp. 98-99, Rollo.)
constrained to file this suit . . . prescription and lack of cause of action as it denied the allegation of the complaint
that BPI had made previous repeated requests and demands for payment. Far East Hence, the instant petition for review on certiorari filed by Far East, anchored on
SECOND CAUSE OF ACTION AGAINST FAR EAST claimed that during the more than 10 years which elapsed from the dates of the following assigned errors:
maturity of said obligations up to the time the action for foreclosure of the chattel
I repeated requests and demands for payment thereof, Far East had failed and Section 3 of Rule 6 state that a "complaint is a concise statement of the ultimate
refused to pay. Thus BPI sought foreclosure of the chattel mortgage securing such facts constituting the plaintiff's cause or causes of action." Further elaborating
THE COURT OF APPEALS ERRED WHEN IT DISREGARDED THE FINDINGS OF THE TRIAL indebtedness. thereon, Section 1 of Rule 8 declares that every pleading, including, of course, a
COURT THAT PRESCRIPTION HAS SET IN OBLIVIOUS OF THE FACT THAT THIS complaint, "shall contain in a methodical and logical form, a plain, concise and
FINDING WAS REACHED AFTER DUE HEARING. In its answer (Rollo, p. 78), Far East admitted the genuineness and due execution of direct statement of the ultimate facts . . . omitting the statement of mere
the promissory notes involved in the case, but denied BPI's allegation that repeated evidentiary facts." "Ultimate facts" are the essential and substantial facts which
II demands for payment were made by BPI on it. Far East then raised the affirmative either form the basis of the primary right and duty or which directly make up the
defenses of prescription and lack of cause of action, arguing that since the wrongful acts or omissions of the defendant (Tantuico, Jr. vs. Republic of the Phil.,
THE COURT OF APPEALS GRAVELY ERRED IN RULING FOR A REOPENING OF THE promissory notes matured in 1976 while BPI filed its action to foreclose the chattel et al., 204 SCRA 428 [1991]), while "evidentiary facts" are those which tend to prove
TRIAL FOR THE RECEPTION OF EVIDENCE ON BOTH ISSUES OF PRESCRIPTION AND mortgage only in 1987 (or more than 10 years from the time its cause of action or establish said ultimate facts.
SUMMARY JUDGMENT WHEN THESE WERE ALREADY TRIED AND WEIGHED BY THE accrued), and there being no demand for payment which would interrupt the period
TRIAL COURT. of prescription for instituting said action, BPI's claims have prescribed. What then are the ultimate facts which BPI had to allege in its complaint so as to
sufficiently establish its cause of action?
III BPI, however, countered that its allegation of repeated demands on Far East for
payment sufficiently stated a cause of action; that within ten years from the time its Basically, a cause of action consists of three elements, namely: (1) the legal right of
THE COURT OF APPEALS ERRED IN ASSUMING JURISDICTION OVER THE CASE cause of action accrued in 1976, it sent written extrajudicial demands on Far East the plaintiff; (2) the correlative obligation of the defendant; and (3) the act or
CONSIDERING THAT THE ISSUES RAISED THEREIN INVOLVE PURE QUESTIONS OF requesting payment of its due and outstanding obligations; that within that 10- omission of the defendant in violation of said legal right (Nabus vs. Court of Appeals,
LAW. (p. 14, Rollo.) years period, it received written acknowledgments of debt from Far East; and, that et al., 193 SCRA 732 [1991]); Rebollido vs. Court of Appeals et al., 170 SCRA 800
these demands for payment and acknowledgments of debt effectively interrupted [1989]). These elements are manifest in BPI's complaint, particularly when it was
The issue of jurisdiction being basis, we shall endeavor to dispose of it ahead of the and renewed the prescriptive period. Worth noting is the fact that the therein alleged that: (1) for valuable consideration, BPI granted several loans,
other topics raised by petitioners acknowledgment of debt and the demands for payment, including the affidavits of evidenced by promissory notes, and extended credit facilities in the form of trust
BPI's counsel who prepared the demand letter and that of BPI's messenger who receipts to Far East (photocopies of said notes and receipts were duly attached to
Petitioner Far East maintains the position that the Court of Appeals stepped beyond allegedly personally delivered said letters to Far East were duly annexed to BPI's the Complaint); (2) said promissory notes and trust receipts had matured; and (3)
the limits of its authority when it assumed jurisdiction over the appeal filed by BPI pleadings. despite repeated requests and demands for payment thereof, Far East had failed
inasmuch as said appeal raised only the pure questions of law or whether or not the and refused to pay.
trial court erred: (1) in dismissing BPI's complaint for lack of cause of action; (2) in From the foregoing exchange of pleading, the conflicting allegations of fact by the
finding that BPI's cause of action had prescribed; and (3) in ruling that BPI is not contending parties sprung forth. It is thus quite obvious that the controversy Clearly then, the general allegation of BPI that "despite repeated requests and
entitled to summary judgment on its causes of action against Far East. centered on, and the doubt arose with respect to, the very existence of previous demands for payment, Far East has failed to pay" is sufficient to establish BPI's
Consequently, Far East contends, BPI should have taken its case directly to this demands for payment allegedly made by BPI on petitioner Far East, receipt of which cause of action. Besides, prescription is not a cause of action; it is a defense which,
Court. was denied by the latter. This dispute or controversy inevitably raised a question of having been raised, should, as correctly ruled by the Court of Appeals (DBP vs.
fact. Such being the case, the appeal taken by BPI to the Court of Appeals was Ozarraga, 15 SCRA 48 [1965]), be supported by competent evidence. But even as Far
There is no dispute with respect to the fact that when an appeal raises only pure proper. East raised the defense of prescription, BPI countered to the effect that the
questions of law, it is only this Court which has jurisdiction to entertain the same prescriptive period was interrupted and renewed by written extrajudicial demands
(Article VIII, Section 5 (2) (e), 1987 Constitution; Rule 45, Rules of Court; see also We now come to petitioner's first two assigned errors. for payment and acknowledgment by Far East of the debt.
Santos, Jr. vs. Court of Appeals, 152 SCRA 378 [1987]). On the other hand, appeals
involving both questions of law and fact fall within the exclusive appellate The trial court's finding that BPI's claims due to prescription, can no longer prosper, A complaint is sufficient if it contains sufficient notice of the cause of action even
jurisdiction of the Court of Appeals. At this point, there seems to be a need to is inextricably connected with, and underpinned by, its other conclusion that BPI's though the allegation may be vague or indefinite, for in such case, the recourse of
distinguish a question of law from a question of fact. allegation that it made "repeated requests and demands for payment" is not the defendant would be to file a motion for a bill of particulars (Ramos vs. Condez,
sufficient to state a cause of action. Moreover, in its questioned Order (Rollo, p. 88) 20 SCRA 1146 [1967]). It is indeed the better rule that, pleadings, as well as
It has been held in a number of cases (Medina vs. Asistio, Jr., 191 SCRA 218 [1990]; dated June 1, 1987, the trial court held that: remedial laws, should be liberally construed so that the litigants may have ample
Gan vs. Licup Design Group, Inc., G.R. NO. 94264, July 24, 1990, En Banc, Minute opportunity to prove their respective claims so as to avoid possible denial of
Resolution; Pilar Development Corp. vs. Intermediate Appellate Court, et al., 146 Apart from the fact that the complaint failed to allege that the period of substantial justice due to legal technicalities (Adamo, et al. vs. Intermediate
SCRA 215 [1986]; Ramos vs. Pepsi-Cola Bottling Co., 19 SCRA 289 [1967]; prescription was interrupted, the phrase "repeated requests and demands for Appellate Court, et al., 191 SCRA 195 [1990]).
Consolidated Mines, Inc. vs. Court of Tax Appeals, et al., 58 SCRA 618 [1974]), that payment" is vague and incomplete as to establish in the minds of the defendant, or
there is a "question of law" when there is doubt or difference of opinion as to what to enable the Court to draw a conclusion, that demands or acknowledgment [of In the case at bar, the circumstances of BPI extending loans and credits to Far East
the law is on certain state of facts and which does not call for an examination of the debt] were made that could have interrupted the period of prescription. (p. 88, and the failure of the latter to pay and discharge the same upon maturity are the
probative value of the evidence presented by the parties-litigants. On the other Rollo.). only ultimate facts which have to be pleaded, although the facts necessary to make
hand, there is a "question of fact" when the doubt or controversy arises as to the the mortgage valid enforceable must be proven during the trial (Ortiz v. Garcia, 15
truth or falsity of the alleged facts. Simply put, when there is no dispute as to fact, Seemingly, therefore, the trial court believed that the interruption of the Phil. 192 [1910]).
the question of whether or not the conclusion drawn therefrom is correct is a prescriptive period to institute an action is an ULTIMATE FACT which had to be
question of law. expressly and indispensably pleaded by BPI in its complaint, and that failure to so In fine, the finding of the trial court that prescription has set in is primarily premised
alleged such circumstance is fatal to BPI's cause of action. on a misappreciation of the sufficiency of BPI's allegation as above discussed. The
In the case at bar, BPI alleged in its complaint (Rollo, p. 42) that on various dates records will show that the hearing conducted by the trial court was merely pro
and for valuable consideration, it extended to Far East several loans, evidenced by We believe and hold otherwise. forma and the trial judge did not sufficiently address the issue of whether or not a
promissory notes, and credit facilities in the form of trust receipts, and that despite
demand for payment in fact made by BPI and duly received by herein petitioner Far G.R. No. 74938-39 January 17, 1990 agreeable, she will sell it to another person. After receiving the letter, plaintiff
East. turned over the letter to his counsel, Atty. Sugay. Gaw Ching claims that he is not in
ANGELINA J. MALABANAN, petitioner, a position to buy the property at P5,000.00 per square meter because it was
WHEREFORE, the instant petition is hereby DENIED and the decision of the Court of vs. expensive. Subsequently, Gaw Ching tried to pay the rent for June, 1980, but
Appeals hereby AFFIRMED. No special pronouncement is made as to costs. GAW CHING and THE INTERMEDIATE APPELLATE COURT, respondents. Malabanan refused to accept it. Plaintiff's counsel advised him to deposit the
rentals in a bank which he did, after which, his counsel wrote Malabanan informing
SO ORDERED. G.R. No. L-75524-25 January 17, 1990 her about the deposit (Exh. B). On October 2, 1980, plaintiff received another letter
from defendant Malabanan which he gave to his counsel who told him that said
Feliciano, Bidin, Romero and Vitug, JJ., concur. LEONIDA CHY SENOLOS, LEONARD CHAN and LEONSO CHY CHAN, petitioners, defendant is offering the house and lot at P5,000.00 per square meter and that if he
vs. is not agreeable, she will sell the premises to another person at P4,000.00 per
INTERMEDIATE APPELLATE COURT and GAW CHING, respondents. square meter. Plaintiff testified that he was willing to buy the subject property at
P4,000.00 but hastened to add that it was still expensive and did not ask his counsel
Puruganan, Chato, Chato, Chato & Tan and Romero, Lagman, Torres, Arrieta & to write Malabanan about it. So, also, it was the opinion of his counsel that it was
Evangelista for petitioners in 75524-25. not necessary to reply because the context of the letter was invariably a threat. On
November 3, 1980, plaintiff received another letter from Defendant Malabanan,
Quiason, Makalintal, Barot & Torres for petitioners in 74938-39. informing him that the premises in question had already been sold to defendant
Leonida Senolos. This time, Atty. Sugay sent a reply dated November 24, 1980,
Limqueco & Macaraeg Law Office and Herminio T. Sugay for respondent Gaw Ching. requesting that the pertinent documents of the sale be sent to them but according
to plaintiff, they were not furnished a copy of said sale. Consequently, plaintiff
RESOLUTION received a letter from Atty. Techico dated December 5, 1980 demanding that he
vacate the premises and to pay the arrearages in rentals from October to
December, as they were more importantly, going to repair and convert the dwelling
into a warehouse. Atty. Sugay sent a reply dated February 17, 1981 (Exh. C)
FELICIANO, J.: requesting Atty. Techico to furnish them with the Deed of Sale and TCT because he
doubted the veracity of the sale. It took a long time before Atty. Sugay's letter was
The two (2) Petitions before us G.R. Nos. 74938-39 and 75524-25 assail the answered and he was never furnished a copy of the Deed of Sale and Transfer
decision of the then Intermediate Appellate Court in A.C.-G.R. CV Nos. 05136-05137 Certificate of Title. After exerting all efforts, plaintiff finally was able to procure a
dated 31 January 1986, which reversed the decision of the Regional Trial Court in copy of the Deed of Sale and TCT No. 14789 (Exh- A) which reflected that the date of
two (2) consolidated cases, namely: Civil Case No. R-81-416 and Civil Case No. R-82- entry of the Deed of Sale was December 9, 1980, whereas the Deed of Sale was
6789. Upon motion of petitioners, we ordered the consolidation of the two (2) dated August 23, 1979 (Exh. I). Plaintiff then told Atty. Sugay to file a civil case
Petitions. against defendants. On October 7, 1981, Atty. Techico sent a reply to Atty. Sugay's
letter of February 17, 1981 (Exh K). Plaintiff presented the receipt of rentals he paid
Respondent Gaw Ching instituted two (2) cases against petitioners Angelina (Exhs. L to L-6). He deposited the monthly rentals which Malabanan refused to
Malabanan, Leonida Senolos, et al. in connection with the sale of piece of land accept, with the Pacific Banking Corporation (Exh. M). At a later period, plaintiff had
located in Binondo, Manila. The first case, Civil Case No. R-81-416, sought to annul to move out of the premises when it was demolished by the defendant. Gaw Ching
such sale and to enjoin the demolition of a building standing on that piece of land, however, admitted that he was not yet a Filipino Citizen at the time the offer to sell
and also prayed for the award of damages. The second case, Civil Case No. G.R. 82- was made, i.e., on April 27, 1980, May 13, 1980 and October 2, 1980 and that he
6798, demanded damages from petitioner Senolos for bringing about the became a Filipino citizen only on October 7, 1980, when he was issued a certificate
demolition of the building. of naturalization (Exh. 1-Malabanan). He did not, however, inform Malabanan on
the matter of his newly acquired citizenship. Likewise, Gaw Ching admitted that he
The following facts found by the trial court, and adopted and incorporated by the did not make any counter-offer in writing so as to price the property.
appellate court, are undisputed:
As to plaintiffs claim for damages, he testified, that this was motivated by the
Evidence for plaintiff showed that Gaw Ching has been leasing the house and lot incident on November 16, 1981, while he was on the ground floor, when there was
located [in] 697-699 Asuncion Street, Binondo, Manila from Mr. Jabit since 1951. a sudden brownout, and around 50 people came thereat, climbed the roof with the
Plaintiff conducted his business (Victoria Blacksmith Shop) on the ground floor and use of a ladder, cut the electric wires and started banging the roof. Plaintiff, his wife,
lived on the second floor. When Mr. Jabit died, his daughter, defendant Malabanan and mother-in-law were in the house and about 7 laborers were in the shop when
continued to lease the premises to plaintiff but at an increased rental of P1,000.00 the incident happened. Plaintiff then immediately called up Atty. Sugay and told him
per month. Before the increase, Gaw Ching paid P700.00 per month, as evidenced that Leonida Senolos called some people to demolish the house. Plaintiff further
by receipts of rentals. There was no written contract of lease between plaintiff and testified that ... he was not notified of the demolition. . . . On that same day, Atty.
Mr. Jabit as to its duration but the rentals were evidently, paid monthly. On April 27, Sugay arrived at about 10:00 a.m. and told plaintiff that he was going to the City
1980, Angelina Malabanan told him that she was selling the house and lot for Hall. When Atty. Sugay came back, he was with Roldan (Building Inspector), who
P5,000.00 per square meter. Plaintiff told her however, that the price is prohibitive. ordered that the demolition be stopped, but Leonida Senolos refused to heed the
On May 13, 1980, defendant Malabanan wrote plaintiff, reiterating that she was order. Atty. Sugay and Roldan went back to the City Hall. . . . At about 3:00 p.m.,
selling the house and lot at P5,000.00 per square meter and that if he is not Atty. Sugay came back with another person from the City Hall who presented a
letter to Leonida Senolos to which defendant affixed her signature. The formal appellees (petitioners herein) after the issuance of the cease-and-desist order on From these legal provisions it is deduced that it is the interest had in a given
letter was dated November 6, 1981 addressed to Leonida Senolos by Romulo del October 30, 1981. contract, that is the determining reason of the right which lies in favor of the party
Rosario, City Engineer and Building Officer. Upon receipt of the letter, the obligated principally or subsidiarily to enable him to bring an action for the nullity of
policeman remained but the demolition continued. Plaintiff together with Atty. While holding that the land in question was located outside the Urban Land Reform the contract in which he intervened, and, therefore, he who has no right in a
Sugay, and the City Hall official, went to the police precinct where the City Hall Zone declared by Proclamations Nos. 1767 and 1967, the majority ruled that contract is not entitled to prosecute an action for nullity, for, according to the
Official talked with somebody in the precinct. It was only when they returned to the circumstances surrounding the sale of the land to petitioner Senolos had rendered precedents established by the courts, the person who is not a party to a contract
premises at about 4:00 p.m. with a policeman that the demolition was stopped. . . . that sale null and void. The majority were here referring to the finding that when nor has any cause of action or representation from those who intervened therein, is
petitioner Malabanan offered in October 1980 to sell the land involved to manifestly without right of action and personality such as to enable him to assail the
On cross examination, plaintiff admitted that he received a letter from the Office of respondent Gaw Ching at P5,000.00 per square meter, that land had already been validity of the contract. (Decisions of the Supreme Court of Spain, of April 18, 1901,
the City Engineer dated July 29, 1981 (Exh. 1-Senolos) condemning the building. He sold to petitioner Senolos as early as August 1979 for only P1,176.48 per square and November 23, 1903, pronounced in cases requiring an application of the
also admitted that he was furnished a copy of the Demolition Order (Exh. 2-Senolos) meter. On the matter of the demolition of the building, the majority held that the preinserted article 1302 of the Civil Code. 5
to which he affixed his signature. same was unwarranted and that even if petitioner Senolos had a demolition order,
Mr. Justice Torres went on to indicate a possible qualification to the above general
After receiving Exhibits "I" and "2," Gaw Ching still refused to vacate the premises that order of demolition was valid only if there are no more tenants residing in the principle, that is, a situation where a non-party to a contract could be allowed to
because he was told that the building was still in good condition and he continued building. If there are tenants and they refused to vacate, the order of demolition is bring an action for declaring that contract null:
paying the monthly rental. unavailing. It could not rise higher than the Civil Code and the Rules of Court. 3
He who is not the party obligated principally or subsidiarily in a contract may
On redirect, plaintiff declared that after receiving the notice of the City Engineer, he In the instant Petitions for Certiorari, petitioners assail both the annulment of the perhaps be entitled to exercise an action for nullity, if he is prejudiced in his rights
filed a complaint with the Ministry of Public Works and Highways by reason of deed of sale and the grant of P350,000.00 worth of "moral, exemplary and actual with respect to one of the contracting parties; but, in order that such be the case, it
which, the MPWH issued an order that the demolition to be stopped. (Exh. 3). damages" to respondent Gaw Ching. is indispensable to show the detriment which positively would result to him from
the contract in which he had no intervention
xxx xxx xxx We believe that the Petitions must be granted.
xxx xxx xxx
Another witness presented by plaintiff was Felix Tienzo, Actg. Chief of Enforcement I
Division, (Ministry of Public Works and Highways). . . (Emphasis supplied)
The firmly settled rule is that strangers to a contract cannot sue either or both of
Mr. Felix Tienzo believes that the City of Manila was correct in ordering the the contracting parties to annul and set aside that contract. Article 1397 of the Civil There is an important and clear, albeit implicit, limitation upon the right of a person
demolition of the building but he intended to hold in abeyance the demolition of Code embodies that rule in the following formulation: who is in fact injured by the very operation of a contract between two (2) third
the building only in obedience to the order of the MPWH. However, both Mr. Tienzo parties to sue to nullify that contract: that contract may be nullified only to the
and Mr. Roldan claim that they do not usually receive an order from the MPWH Art. 1397. The action for the annulment of contracts may be instituted by all who extent that such nullification is absolutely necessary to protect the plaintiff's lawful
stopping the demolitions. are thereby obliged principally or subsidiarily. However, persons who are capable rights. It may be expected that in most instances, an injunction restraining the
cannot allege the incapacity of those with whom they contracted; nor can those carrying out of acts in fact injurious to the plaintiff's rights would be sufficient and
xxx xxx xxx 1 who exerted intimidation, violence, or undue influence, or employed fraud, or that there should be no need to set aside the contract itself which is a res inter alios
caused mistake base their action upon these flaws of the contract. (Emphasis acta and which may have any number of other provisions, implementation of which
On 10 August 1984, the trial court rendered a decision which upheld the validity of supplied) might have no impact at all upon the plaintiff's rights and interests.
the contract of sale between petitioner Malabanan and petitioner Senolos. The trial
court declared that petitioner Malabanan had not violated Sections 4 and 6 of Article 1397 itself follows from Article 1311 of the Civil Code which establishes the What is important for present purposes is that respondent Gaw Ching, admittedly a
Presidential Decree No. 1517 in relation to Presidential Proclamation No. 1893 and fundamental rule that: stranger to the contract of sale of a piece of land between petitioners Malabanan
Letter of Instruction (LOI) No. 935 which provide for a preemptive right on the part and Senolos inter se, does not fall within the possible exception recognized in
of a lessee over leased property. The trial court stressed that respondent Gaw Ching Art. 1311. Contracts take effect only between the parties, their assigns and heirs, Ibanez v. Hongkong & Shanghai Bank. In the first place, Gaw Ching had no legal right
had been given ample opportunity to exercise any right of first refusal he might except in case where the rights and obligations arising from the contract are not of preemption in respect of the house and lot here involved. The majority opinion of
have had, but he had chosen not to do so. transmissible by their nature, or by stipulation or by provision of law. The heir is not the appellate court itself explicitly found that the subject piece of land is located
liable beyond the value of the property he received from the decedent. outside the Urban Land Reform Zones declared pursuant to P.D. No. 1517. 7 Even
Respondent Gaw Ching went on appeal to the then Intermediate Appellate Court. assuming for purposes of argument merely, that the land here involved was in fact
By a vote of three (3) to two (2), the appellate court voted to reverse the decision of xxx xxx xxx embraced in a declared Urban Land Reform Zone (which it was not), Gaw Ching
the trial court and hence to nullify the contract of sale between petitioners would still not have been entitled to a right of preemption in respect of the land
Malabanan and Senolos inter se. 2 The majority also held that the transaction (Emphasis supplied) sold. In Santos v. Court of Appeals, 8 this Court held that the preemptive or
between petitioners was vitiated by fraud, deceit and bad faith allegedly causing redemptive rights of a lessee under P.D. No. 1517 exists only in respect of the urban
damage to respondent Gaw Ching. Petitioners were held liable jointly and severally As long ago as 1912, this Court in Ibanez v. Hongkong and Shanghai Bank, 4 pointed land under lease on which the tenant or lessee had built his home and in which he
to respondent for moral, exemplary and actual damages in the amount of out that it is the existence of an interest in a particular contract that is the basis of had resided for ten (10) years or more and that, in consequence, where both land
P350,000.00 and for attorney's fees in the amount of P20,000.00 one's right to sue for nullification of that contract and that essential interest in a and building belong to the lessor, that preemptive or redemptive right was simply
given contract is, in general, possessed only by one who is a party to the contract. In not available under the law.
for the indulgence in inequitous conduct to plaintiff-appellant's (respondent Gaw Ibanez, Mr. Justice Torres wrote:
Ching) prejudice and for the unwarranted demolition of the building by defendants- Finally, we are unable to understand the respondent appellate court's view that
respondent Gaw Ching having been a long-time tenant of the property in question,
had acquired a preferred right to purchase that property. This holding is simply Senolos could only be conceived as having been carried out in a manner consistent
bereft of any legal basis. We know of no law, outside the Urban Land Reform Zone Verily, the present action before the Court is procedurally and substantially correct only with utmost care. Conversely, its indiscriminate destruction is contrary to the
or P.D. No. 1517, that grants such a right to a lessee no matter how long the period in abating a nuisance. This exercise of police power is not only being cordoned interest of the defendant Senolos as it is a truism that every bit of useful material
of the lease has been. If such right existed at all, it could only have been created by sanitaired [sic] by the doctrinal pronouncements, the provisions of Art. 482 in should be preserved either for use of, or for profit of the owner. It would be sheer
contract; 9 respondent Gaw Ching does not, however, pretend that there had been relation to Art. 436 of the Civil Code, Sections 275 and 276 of the compilation of folly to assume that the demolition team would have taken a selective method of
such a contractual stipulation between him and petitioners. ordinances of the City of Manila but also by Rule VII, par. 5 of the implementing care for the still serviceable materials of the house and a destructive stance for the
Rules and Regulations of the National Building Code of the Philippines (P.D. 1096). properties of the occupants. Understandably, the unorthodox position taken by
In the second place, assuming once again, for present purposes only, that Indeed, the latter law does not authorize any person other than the owner, to plaintiff would not only lose his residence but also his place of business.
respondent Gaw Ching did have a preemptive right to purchase the land from appeal the order of the City Engineer to the Ministry of Public Works and Highways.
petitioner Malabanan (which he did not), it must be stressed that petitioner This is the position espoused by the City Legal Officer of Manila in defense of the By and large, the basis for the claim for damages do not physically nor imaginatively
Malabanan did thrice offer the land to Gaw Ching but the latter had consistently City Engineer and the Mayor, in opposition to the move of the plaintiff to dismiss exist, for it has defied reason and common sense. 11
refused to buy. Since Gaw Ching did not in fact accept the offer to sell and did not the order of demolition as improvidently issued.
buy the land, he suffered no prejudice, and could not have suffered any prejudice, We note that the majority opinion chose to disregard the above conclusions of fact
by the sale of the same piece of land to petitioner Senolos. No fraud was thus The demolition was invariably a valid exercise of police power which may be of the trial court and instead quoted extensively from respondent Gaw Ching's brief
worked upon him notwithstanding his insinuation that the sale of the land to ordered done by the authorities or caused to be done at the expense of the owner. and, presumably relied upon such brief The majority opinion, however, failed to
petitioner Senolos had preceded the offer of the same piece of land to himself. The exigency is made more demanding especially, the demolition, when it was indicate why it preferred Gaw Ching's version of the facts set out in his brief over
ordered stopped thru an order inadvertently issued, as it was not as a consequence the trial court's findings. No indication was offered where the trial court had fallen
In the third place, and contrary to the holding of the majority appellate court of an appeal by the owner of the building, but by the lessee, was during its last into error or what evidence had been misapprehended by it. In this situation, the
opinion, the fact that Gaw Ching had been lessee of the house and lot was simply stages. Court considers that it must go back to the trial court's findings of fact in line with
not enough basis for a right to bring an action to set aside the contract of sale the time-honored rule that such findings are entitled to great respect from
between the petitioners inter se. A lessee, it is elementary, cannot attack the title of It therefore stands to reason that the order of demolition which is unquestionably appellate courts since the trial court judge had the opportunity to examine the
his lessor over the subject matter of the lease. 10 Moreover, the lease contract legal could not be stopped by an inoperative administrative order, assuming that evidence directly and to listen to the witnesses and observe their demeanor while
between petitioner Malabanan and respondent Gaw Ching must in any case be held the appeal to the MPWH could validly be filed by the lessee, as it was filed only testifying.
to have lapsed when the leased house was condemned and the order of demolition during the finishing touches of a demolition. Decidedly, the move exude
issued. physiological features of delay. This is compounded by the failure of the MPWH to It appears therefore that firstly, the order of condemnation or demolition had been
act assertively, which in a sense, could be interpreted as an admission that the issued by the proper authorities which order was valid and subsisting at the time
II issuance of the order was inopportune. the demolition was actually carried out. Secondly, under Section 5.3 of Rule VII
entitled "Abandonment/Demolition of Buildings" of the Rules and Regulations
We consider next petitioners' claim that the appellate court erred grievously in On the claim for damages predicated on (4) whether or not there was an Implementing the National Building Code of the Philippines (P.D. No. 1096, as
imposing upon them an award of P350,000.00 for "moral, exemplary and actual indscriminate careless handling and pilferage of the properties of the plaintiff, amended dated 19 February 1977), an order for demolition may be appealed, by
damages" not only because petitioners had "indulged in inequitous conduct to causing their loss or destruction: the owner of the building or installation to be demolished, to the Secretary of Public
[respondent Gaw Ching's] prejudice" but also "for the unwarranted demolition of Works and Highways. In the case at bar, it was respondent Gaw Ching, a lessee
the building by [petitioners] after the issuance of the cease and desist order on It is readily explained that between October 5, 1981 to November 6,1981, plaintiff merely of the building condemned that sought to block the implementation of the
October 30, 1981." could have avoided the misplaced fear, but assuming without having necessarily to demolition order. It does not even appear from the record whether or not Gaw
concede that he was not able to guard against an actual demolition on November 6, Ching actually filed a formal appeal to the Secretary, even though he was not
Here again, we are compelled to hold that the appellate court lapsed into reversible 1981, rendering him so helpless, and prompting him to just sit on the sidewalk and entitled to do so. What does appear from the record 12 is that Gaw Ching's counsel,
error. The relevant conclusions of fact which the trial court arrived at are set out in watch the demolition team wreck the building indiscriminately, thereby causing Atty. Sugay, was able to obtain a letter dated 6 November 1981 from the Office of
its decision in the following manner: destruction and loss of his personal properties, such as: (a) office equipment; (b) the City Engineer and Building Official, enclosing a xerox copy of a letter from the
assorted tools; (c) machines; (d) finished products; and (e) steel box containing Assistant Secretary for Operations, Ministry of Public Works and Highways,
On the legality of the demolition necessarily raising the question: (3) whether or not jewelries. The claim is almost too good to be true, considering first, that these items "directing this office to hold the demolition in abeyance." This letter, which did not
plaintiff was notified within a reasonable period of time of the demolition, and a were so huge that they could not be spirited away without being noticed and, purport to set aside the order of demolition, was served upon the demolition team
fortiori whether this admittedly exercise of police power, the validity of which was secondly; it has been established that there was a policeman detailed to the on site while the demolition was in progress. After some hesitation, the demolition
already being determined by the Court could be stopped by a pretenatural [sic] demolition scene from the start of the said demolition, to whom he could have was in fact stopped. 13
administrative order from the office of the Assistant Secretary for Operation of the easily reported the matter, caused the apprehension of the culprits, and prevent the
MPWH brought about by an appeal by a person other than the owner of the loss of his personal properties, thirdly, he could have grabbed the steel box It is worth noting that officials from the Office of the City Engineer, City of Manila,
building, which office had not done anything to immediately forestall the imminent containing jewelries if this were the last thing he would have done. Waiting idly by testified that it was not "normal practice to receive an order from the Ministry of
injury to person and damage to property. (Please see P.D. 1096, Rule XII, Sec. 5 the sidewalk and watching your properties pilfered by persons whom you could Public Works and Highways stopping demolitions."
thereof). have successfully identified at the time and referring the matter to the policeman
on duty, which plaintiff did not do, is certainly against the natural order of things In the fourth place, respondent Gaw Ching, in the action that he had filed before the
In the first place, the claim of the plaintiff that the demolition of the house rented and the legal presumption that a person takes great care of his concern. Plaintiff Regional Trial Court of Manila to set aside the contract of sale between petitioners
by him came as a surprise, is fiercely contradicted by his own evidence. A copy of strongly relies on the alleged illegal and indiscriminate destruction of his properties Malabanan and Senolos, had sought preliminary injunction precisely to restrain the
the demolition order is attached to the complaint as Annex "L", now marked as as basis for his claim for damages. Truth to tell, there was no suddenness or implementation of the order for demolition. That application for preliminary
Exhibit "9" for the defendant Senolos, unmistakably show that plaintiff received a indiscriminate destruction of plaintiffs property nor pilferage thereof, as alleged, in injunction was denied by the trial court and the order for demolition was
copy of the order of demolition from the City Engineer's Office, approved by the the demolition of the house owned by the defendant. The order was lawful as it was implemented only after such denial. Thus, there was no subsisting court order
Mayor, on October 5, 1981. an abatement of a nuisance and the dismantling of the house owned by defendant restraining the demolition at the time such demolition was carried out.
In the fifth place, Gaw Ching had ample notice of the demolition order and had WHAT IS MEANT BY ACTION
adequate time to remove his belongings from the premises if he was minded to
obey the order for demolition. He chose not to obey that order. If he did suffer any
lossesthe trial court did not believe his claims that he didhe had only himself to G.R. No. L-24772 May 27, 1968
blame.
RUPERTO G. CRUZ, ET AL., plaintiffs-appellees,
ACCORDINGLY, The Court Resolved to GRANT the Petition and to REVERSE and SET vs.
ASIDE the Decision of the then Intermediate Appellate Court dated 31 January 1986 FILIPINAS INVESTMENT and FINANCE CORPORATION, defendant-appellant.
and its Resolution dated 5 June 1986, in AC-G.R. CV Nos. 05136-05137. The Decision
of the trial court dated 10 August 1984 in consolidated Civil Cases Nos. R-81-416 Villareal, Almacen, Navarra and Associates for plaintiffs-appellees.
and R-82-6798, is hereby REINSTATED. No pronouncement as to costs. Sycip, Salazar, Luna, Manalo and Feliciano for defendant-appellant.

Fernan C.J., Gutierrez, Jr. and Corts, JJ., concur. REYES, J.B.L., J.:

Bidin J., took no part. Appeal interposed by Filipinas Investment & Finance Corporation from the decision
of the Court of First Instance of Rizal (Quezon City) in Civil Case No. Q-
7949.1vvphi1.nt

In the action commenced by Ruperto G. Cruz and Felicidad V. Vda. de Reyes in the
Court of First Instance of Rizal (Civil Case No. Q-7949), for cancellation of the real
estate mortgage constituted on the land of the latter 1 in favor of defendant
Filipinas Investment & Finance Corporation (as assignee of the Far East Motor
Corporation), the parties submitted the case for decision on the following
stipulation of facts:

1. Their personal circumstances and legal capacities to sue and be sued;

2. That on July 15, 1963, plaintiff Ruperto G. Cruz purchased on installments, from
the Far East Motor Corporation, one (1) unit of Isuzu Diesel Bus, described in the
complaint, for P44,616.24, Philippine Currency, payable in installments of P1,487.20
per month for thirty (30) months, beginning October 22, 1963, with 12 % interest
per annum, until fully paid. As evidence of said indebtedness, plaintiff Cruz executed
and delivered to the Far East Motor Corporation a negotiable promissory note in the
sum of P44,616.24, ...;

3. That to secure the payment of the promissory note, Annex "A", Cruz executed in
favor of the seller, Far East Motor Corporation, a chattel mortgage over the
aforesaid motor vehicle...;

4. That as no down payment was made by Cruz, the seller, Far East Motor
Corporation, on the very improvements thereon, in San Miguel, Bulacan...; same
date, July 15, 1963, required and Cruz agreed to give, additional security for his
obligation besides the chattel mortgage, Annex "B"; that said additional security
was given by plaintiff Felicidad Vda. de Reyes in the form of SECOND MORTGAGE on
a parcel of land owned by her, together with the building and

5. That said land has an area of 68,902 square meters, more or less, and covered by
Transfer Certificate of Title No. 36480 of the Registry of Deeds of Bulacan in the
name of plaintiff Mrs. Reyes; and that it was at the time mortgaged to the
Development Bank of the Philippines to secure a loan of P2,600.00 obtained by Mrs.
Reyes from that bank;

6. That also on July 15, 1963, the Far East Motor Corporation for value received
indorsed the promissory note and assigned all its rights and interest in the Deeds of
Chattel Mortgage and in the Deed of Real Estate Mortgage (Annexes "A", "B" and foreclosure of the chattel mortgage on the bus barred further action against the obligation. Defendant-appellant, however, sought to collect the supported
"B-l") to the defendant, Filipinas Investment & Finance Corporation, with due notice additional security put up by plaintiff Reyes. Consequently, the real estate mortgage deficiency by going against the real estate mortgage which was admittedly
of such assignment to the plaintiffs...; constituted on the land of said plaintiff was ordered cancelled and defendant was constituted on the land of plaintiff Reyes as additional security to guarantee the
directed to pay the plaintiffs attorney's fees in the sum of P200.00. Defendant filed performance of Cruz' obligation, claiming that what is being withheld from the
7. That plaintiff Cruz defaulted in the payment of the promisory note (Annex "A") ; the present appeal raising the same questions presented in the lower court. vendor, by the proviso of Article 1484 of the Civil Code, is only the right to recover
that the only sum ever paid to the defendant was Five Hundred Pesos (P500.00) on "against the purchaser", and not a recourse to the additional security put up, not by
October 2, 1963, which was applied as partial payment of interests on his principal There is no controversy that, involving as it does a sale of personal property on the purchaser himself, but by a third person.
obligation; that, notwithstanding defendant's demands, Cruz made no payment on installments, the pertinent legal provision in this case is Article 1484 of the Civil
any of the installments stipulated in the promissory note; Code of the Philippines, 2 which reads: There is no merit in this contention. To sustain appellant's argument is to overlook
the fact that if the guarantor should be compelled to pay the balance of the
8. That by reason of Cruz's default, defendant took steps to foreclose the chattel ART. 1484. In a contract of sale of personal property the price of which is payable in purchase price, the guarantor will in turn be entitled to recover what she has paid
mortgage on the bus; that said vehicle had been damaged in an accident while in installments, the vendor may exercise any of the following remedies: from the debtor vendee (Art. 2066, Civil Code) ; so that ultimately, it will be the
the possession of plaintiff Cruz; vendee who will be made to bear the payment of the balance of the price, despite
(1) Exact fulfillment of the obligation, should the vendee fail to pay; the earlier foreclosure of the chattel mortgage given by him. Thus, the protection
9. That at the foreclosure sale held on January 31, 1964 by the Sheriff of Manila, the given by Article 1484 would be indirectly subverted, and public policy overturned.
defendant was the highest bidder, defendant's bid being for Fifteen Thousand Pesos (2) Cancel the sale, should the vendee's failure to pay cover two or more
(P15,000.00)...; installments; Neither is there validity to appellant's allegation that, since the law speaks of
"action", the restriction should be confined only to the bringing of judicial suits or
10. That the proceeds of the sale of the bus were not sufficient to cover the (3) Foreclose the chattel mortgage on the thing sold, if one has been constituted, proceedings in court.
expenses of sale, the principal obligation, interests, and attorney's fees, i.e., they should the vendee's failure to pay cover two or more installments. In this case, he
were not sufficient to discharge fully the indebtedness of plaintiff Cruz to the shall have no further action against the purchaser to recover any unpaid balance of The word "action" is without a definite or exclusive meaning. It has been invariably
defendant; the price. Any agreement to the contrary shall be void. defined as

11. That on February 12, 1964, preparatory to foreclosing its real estate mortgage The aforequoted provision is clear and simple: should the vendee or purchaser of a ... the legal demand of one's right, or rights; the lawful demand of one's rights in the
on Mrs. Reyes' land, defendant paid the mortgage indebtedness of Mrs. Reyes to personal property default in the payment of two or more of the agreed form given by law; a demand of a right in a court of justice; the lawful demand of
the Development Bank of the Philippines, in the sum of P2,148.07, the unpaid installments, the vendor or seller has the option to avail of any one of these three one's right in a court of justice; the legal and formal demand of ones rights from
balance of said obligation...; remedies either to exact fulfillment by the purchaser of the obligation, or to another person or party, made and insisted on in a court of justice; a claim made
cancel the sale, or to foreclose the mortgage on the purchased personal property, if before a tribunal; an assertion in a court of justice of a right given by law; a demand
12. That pursuant to a provision in the real estate mortgage contract, authorizing one was constituted. These remedies have been recognized as alternative, not or legal proceeding in a court of justice to secure one's rights; the prosecution of
the mortgagee to foreclose the mortgage judicially or extra-judicially, defendant on cumulative, 3 that the exercise of one would bar the exercise of the others. 4 It may some demand in a court of justice; the means by which men litigate with each
February 29, 1964 requested the Provincial Sheriff of Bulacan to take possession of, also be stated that the established rule is to the effect that the foreclosure and other; the means that the law has provided to put the cause of action into effect;....
and sell, the land subject of the Real Estate Mortgage, Annex "B-1", to satisfy the actual sale of a mortgaged chattel bars further recovery by the vendor of any (Gutierrez Hermanos vs. De la Riva, 46 Phil. 827, 834-835).
sum of P43,318.92, the total outstanding obligation of the plaintiffs to the balance on the purchaser's outstanding obligation not so satisfied by the sale. 5 And
defendant, as itemized in the Statement of Account, which is made a part hereof as the reason for this doctrine was aptly stated in the case of Bachrach Motor Co. vs. Considering the purpose for which the prohibition contained in Article 1484 was
Annex "F"...; Millan, supra, thus: intended, the word "action" used therein may be construed as referring to any
judicial or extrajudicial proceeding by virtue of which the vendor may lawfully be
13. That notices of sale were duly posted and served to the Mortgagor, Mrs. Reyes, Undoubtedly the principal object of the above amendment 6 was to remedy the enabled to exact recovery of the supposed unsatisfied balance of the purchase price
pursuant to and in compliance with the requirements of Act 3135...; abuses committed in connection with the foreclosure of chattel mortgages. This from the purchaser or his privy. Certainly, an extrajudicial foreclosure of a real
amendment prevents mortgagees from seizing the mortgaged property, buying it at estate mortgage is one such proceeding.
14. That on March 20, 1964, plaintiff Reyes through counsel, wrote a letter to the foreclosure sale for a low price and then bringing suit against the mortgagor for a
defendant asking for the cancellation of the real estate mortgage on her land, but deficiency judgment. The almost invariable result of this procedure was that the The provision of law and jurisprudence on the matter being explicit, so that this
defendant did not comply with such demand as it was of the belief that plaintiff's mortgagor found himself minus the property and still owing practically the full litigation could have been avoided, the award by the lower court of attorney's fees
request was without any legal basis; amount of his original indebtedness. Under this amendment the vendor of personal to the plaintiff's in the sum of P200.00 is reasonable and in order.
property, the purchase price of which is payable in installments, has the right to
15. That at the request of the plaintiffs, the provincial Sheriff of Bulacan held in cancel the sale or foreclose the mortgage if one has been given on the property. However, we find merit in appellant's complaint against the trial court's failure to
abeyance the sale of the mortgaged real estate pending the result of this action. Whichever right the vendor elects he need not return to the purchaser the amount order the reimbursement by appellee Vda. de Reyes of the amount which the
of the installments already paid, "if there be in agreement to that effect". former paid to the Development Bank of the Philippines, for the release of the first
Passing upon the issues which, by agreement of the parties, were limited to (1) Furthermore, if the vendor avails himself of the right to foreclose the mortgage the mortgage on the land of said appellee. To the extent that she was benefited by such
"Whether defendant, which has already extrajudicially foreclosed the chattel amendment prohibits him from bringing an action against the purchaser for the payment, plaintiff-appellee Vda. de Reyes should have been required to reimburse
mortgage executed by the buyer, plaintiff Cruz, on the bus sold to him on unpaid balance. the appellant.
installments, may also extrajudicially foreclose the real estate mortgage constituted
by plaintiff Mrs. Reyes on her own land, as additional security, for the payment of It is here agreed that plaintiff Cruz failed to pay several installments as provided in WHEREFORE, the decision appealed from is modified, by ordering plaintiff-appellee
the balance of Cruz' Obligation, still remaining unpaid"; and (2) whether or not the the contract; that there was extrajudicial foreclosure of the chattel mortgage on the Felicidad Vda. de Reyes to reimburse to defendant-appellant Filipinas Investment &
contending parties are entitled to attorney's fees the court below, in its decision said motor vehicle; and that defendant-appellant itself bought it at the public Finance Corporation the sum of P2,148.07, with legal interest thereon from the
of April 21, 1965, sustained the plaintiffs' stand and declared that the extrajudicial auction duly held thereafter, for a sum less than the purchaser's outstanding
finality of this decision until it is fully paid. In all other respects, the judgment of the G.R. No. 75919 May 7, 1987 3. Upon the filing of the complaint there was an honest difference of opinion as to
court below is affirmed, with costs against the defendant-appellant. the nature of the action in the Magaspi case. The complaint was considered as
MANCHESTER DEVELOPMENT CORPORATION, ET AL., petitioners, primarily an action for recovery of ownership and possession of a parcel of land. The
Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro and Angeles, JJ., vs. damages stated were treated as merely to the main cause of action. Thus, the
concur. COURT OF APPEALS, CITY LAND DEVELOPMENT CORPORATION, STEPHEN ROXAS, docket fee of only P60.00 and P10.00 for the sheriff's fee were paid. 6
Fernando, J., is on leave. ANDREW LUISON, GRACE LUISON and JOSE DE MAISIP, respondents.
In the present case there can be no such honest difference of opinion. As maybe
Tanjuatco, Oreta and Tanjuatco for petitioners. gleaned from the allegations of the complaint as well as the designation thereof, it
is both an action for damages and specific performance. The docket fee paid upon
Pecabar Law Offices for private respondents. filing of complaint in the amount only of P410.00 by considering the action to be
merely one for specific performance where the amount involved is not capable of
RESOLUTION pecuniary estimation is obviously erroneous. Although the total amount of damages
sought is not stated in the prayer of the complaint yet it is spelled out in the body of
the complaint totalling in the amount of P78,750,000.00 which should be the basis
of assessment of the filing fee.
GANCAYCO, J.:
4. When this under-re assessment of the filing fee in this case was brought
Acting on the motion for reconsideration of the resolution of the Second Division of to the attention of this Court together with similar other cases an investigation was
January 28,1987 and another motion to refer the case to and to be heard in oral immediately ordered by the Court. Meanwhile plaintiff through another counsel
argument by the Court En Banc filed by petitioners, the motion to refer the case to with leave of court filed an amended complaint on September 12, 1985 for the
the Court en banc is granted but the motion to set the case for oral argument is inclusion of Philips Wire and Cable Corporation as co-plaintiff and by emanating any
denied. mention of the amount of damages in the body of the complaint. The prayer in the
original complaint was maintained. After this Court issued an order on October 15,
Petitioners in support of their contention that the filing fee must be assessed on the 1985 ordering the re- assessment of the docket fee in the present case and other
basis of the amended complaint cite the case of Magaspi vs. Ramolete. 1 They cases that were investigated, on November 12, 1985 the trial court directed
contend that the Court of Appeals erred in that the filing fee should be levied by plaintiffs to rectify the amended complaint by stating the amounts which they are
considering the amount of damages sought in the original complaint. asking for. It was only then that plaintiffs specified the amount of damages in the
body of the complaint in the reduced amount of P10,000,000.00. 7 Still no amount
The environmental facts of said case differ from the present in that of damages were specified in the prayer. Said amended complaint was admitted.

1. The Magaspi case was an action for recovery of ownership and On the other hand, in the Magaspi case, the trial court ordered the plaintiffs to pay
possession of a parcel of land with damages. 2 While the present case is an action the amount of P3,104.00 as filing fee covering the damages alleged in the original
for torts and damages and specific performance with prayer for temporary complaint as it did not consider the damages to be merely an or incidental to the
restraining order, etc. 3 action for recovery of ownership and possession of real property. 8 An amended
complaint was filed by plaintiff with leave of court to include the government of the
2. In the Magaspi case, the prayer in the complaint seeks not only the Republic as defendant and reducing the amount of damages, and attorney's fees
annulment of title of the defendant to the property, the declaration of ownership prayed for to P100,000.00. Said amended complaint was also admitted. 9
and delivery of possession thereof to plaintiffs but also asks for the payment of
actual moral, exemplary damages and attorney's fees arising therefrom in the In the Magaspi case, the action was considered not only one for recovery of
amounts specified therein. 4 However, in the present case, the prayer is for the ownership but also for damages, so that the filing fee for the damages should be the
issuance of a writ of preliminary prohibitory injunction during the pendency of the basis of assessment. Although the payment of the docketing fee of P60.00 was
action against the defendants' announced forfeiture of the sum of P3 Million paid found to be insufficient, nevertheless, it was held that since the payment was the
by the plaintiffs for the property in question, to attach such property of defendants result of an "honest difference of opinion as to the correct amount to be paid as
that maybe sufficient to satisfy any judgment that maybe rendered, and after docket fee" the court "had acquired jurisdiction over the case and the proceedings
hearing, to order defendants to execute a contract of purchase and sale of the thereafter had were proper and regular." 10 Hence, as the amended complaint
subject property and annul defendants' illegal forfeiture of the money of plaintiff, superseded the original complaint, the allegations of damages in the amended
ordering defendants jointly and severally to pay plaintiff actual, compensatory and complaint should be the basis of the computation of the filing fee. 11
exemplary damages as well as 25% of said amounts as maybe proved during the
trial as attorney's fees and declaring the tender of payment of the purchase price of In the present case no such honest difference of opinion was possible as the
plaintiff valid and producing the effect of payment and to make the injunction allegations of the complaint, the designation and the prayer show clearly that it is
permanent. The amount of damages sought is not specified in the prayer although an action for damages and specific performance. The docketing fee should be
the body of the complaint alleges the total amount of over P78 Million as damages assessed by considering the amount of damages as alleged in the original complaint.
suffered by plaintiff. 5
As reiterated in the Magaspi case the rule is well-settled "that a case is deemed filed
only upon payment of the docket fee regardless of the actual date of filing in court .
12 Thus, in the present case the trial court did not acquire jurisdiction over the case G.R. Nos. 88075-77 December 20, 1989
by the payment of only P410.00 as docket fee. Neither can the amendment of the and
complaint thereby vest jurisdiction upon the Court. 13 For an legal purposes there is MAXIMO TACAY, PONCIANO PANES and ANTONIA NOEL, petitioners,
no such original complaint that was duly filed which could be amended. vs. 4) that he (Pineda) be granted such "further relief and remedies ... just and
Consequently, the order admitting the amended complaint and all subsequent REGIONAL TRIAL COURT OF TAGUM Davao del Norte, Branches 1 and 2, Presided equitable in the premises.
proceedings and actions taken by the trial court are null and void. by Hon. Marcial Fernandez and Hon. Jesus Matas, respectively, PATSITA
GAMUTAN, Clerk of Court, and GODOFREDO PINEDA, respondents. The prayer of each complaint contained a handwritten notation (evidently made by
The Court of Appeals therefore, aptly ruled in the present case that the basis of plaintiff's counsel) reading, "P5,000.00 as and for," immediately above the
assessment of the docket fee should be the amount of damages sought in the Eduardo C. De Vera for petitioners. typewritten words, "Actual damages, as proven," the intention apparently being to
original complaint and not in the amended complaint. make the entire phrase read, " P5,000.00 as and for actual damages as proven. 5
RESOLUTION
The Court cannot close this case without making the observation that it frowns at Motions to dismiss were filed in behalf of each of the defendants by common
the practice of counsel who filed the original complaint in this case of omitting any counsel . 6 Every motion alleged that the Trial Court had not acquired jurisdiction of
specification of the amount of damages in the prayer although the amount of over the case
P78 million is alleged in the body of the complaint. This is clearly intended for no NARVASA, J.:
other purpose than to evade the payment of the correct filing fees if not to mislead . . . for the reason that the ... complaint violates the mandatory and clear provision
the docket clerk in the assessment of the filing fee. This fraudulent practice was In the Regional Trial Court at Tagum, Davao del Norte, 1 three of Circular No. 7 of the ... Supreme Court dated March 24,1988, by failing to specify
compounded when, even as this Court had taken cognizance of the anomaly and all the amounts of damages which plaintiff is claiming from defendant;" and
ordered an investigation, petitioner through another counsel filed an amended (3) actions for recovery of possession (acciones publicianas 2 ) were separately
complaint, deleting all mention of the amount of damages being asked for in the instituted by Godofredo Pineda against three (3) defendants, docketed as follows: . . . for ... failure (of the complaint) to even allege the basic requirement as to the
body of the complaint. It was only when in obedience to the order of this Court of assessed value of the subject lot in dispute.
October 18, 1985, the trial court directed that the amount of damages be specified 1) vs. Antonia Noel Civil Case No. 2209
in the amended complaint, that petitioners' counsel wrote the damages sought in Judge Matas denied the motion to dismiss filed in Civil Case No. 2210 but ordered
the much reduced amount of P10,000,000.00 in the body of the complaint but not 2) vs. Ponciano Panes Civil Case No. 2210 the expunction of the "allegations in paragraph 11 of the ... complaint regarding
in the prayer thereof. The design to avoid payment of the required docket fee is moral as well as nominal damages . 7 On motion of defendant Panes, Judge Matas
obvious. 3) vs. Maximo Tacay Civil Case No. 2211. later ordered the striking out, too, of the "handwritten amount of 'P5,000. 00 as and
for.' including the typewritten words 'actual damages as proven' ... in sub-paragraph
The Court serves warning that it will take drastic action upon a repetition of this Civil Cases Numbered 2209 and 2211 were raffled to Branch I of the Trial Court, b of paragraph 4 in the conclusion and prayer of the complaint ..." 8
unethical practice. presided over by Judge Marcial Hernandez. Civil No. 2210 was assigned to Branch 2,
presided over by Judge Jesus Matas. The motions to dismiss submitted in Civil Cases Numbered 2211 and 2209 were also
To put a stop to this irregularity, henceforth all complaints, petitions, answers and denied in separate orders promulgated by Judge Marcial Fernandez. 9 His Order in
other similar pleadings should specify the amount of damages being prayed for not The complaints 3 all alleged the same essential facts (1) Pineda was the owner of a Case No. 2209 dated March 15, 1989 (a) declared that since the "action at bar is for
only in the body of the pleading but also in the prayer, and said damages shall be parcel of land measuring 790 square meters, his ownership being evidenced by TCT Reivindicatoria, Damages and Attorney's fees ... (d)efinitely this Court has the
considered in the assessment of the filing fees in any case. Any pleading that fails to No. T-46560; (2) the previous owner had allowed the defendants to occupy portions exclusive jurisdiction," (b) that the claims for actual, moral and nominal damages
comply with this requirement shall not bib accepted nor admitted, or shall of the land by mere tolerance; (3) having himself need to use the property, Pineda "are only one aspect of the cause of action," and (c) because of absence of
otherwise be expunged from the record. had made demands on the defendants to vacate the property and pay reasonable specification of the amounts claimed as moral, nominal and actual damages, they
rentals therefor, but these demands had been refused; and (4) the last demand had should be "expunged from the records."
The Court acquires jurisdiction over any case only upon the payment of the been made more than a year prior to the commencement of suit. The complaints
prescribed docket fee. An amendment of the complaint or similar pleading will not prayed for the same reliefs, to wit: Ascribing grave abuse of discretion to both Judges Matas and Fernandez in the
thereby vest jurisdiction in the Court, much less the payment of the docket fee rendition of the Orders above described, the defendants in all three (3) actions have
based on the amounts sought in the amended pleading. The ruling in the Magaspi 1) that plaintiff be declared owner of the areas occupied by the defendants; filed with this Court a "Joint Petition" for certiorari, prohibition and mandamus, with
case 14 in so far as it is inconsistent with this pronouncement is overturned and prayer for temporary restraining order and/or writ of preliminary prohibitory
reversed. 2) that defendants and their "privies and allies" be ordered to vacate and injunction," praying essentially that said orders be annulled and respondent judges
deliver the portions of the land usurped by them; directed to dismiss all the complaints "without prejudice to private respondent
WHEREFORE, the motion for reconsideration is denied for lack of merit. Pineda's re-filing a similar complaint that complies with Circular No. 7." The joint
3) that each defendant be ordered to pay: petition (a) re-asserted the proposition that because the complaints had failed to
SO ORDERED. state the amounts being claimed as actual, moral and nominal damages, the Trial
1) P 2,000 as monthly rents from February, 1987; Courts a quo had not acquired jurisdiction over the three (3) actions in question-
indeed, the respondent Clerk of Court should not have accepted the complaints
2 ) Actual damages, as proven; which initiated said suits, and (b) it was not proper merely to expunge the claims for
damages and allow "the so-called cause of action for "reivindicatoria" remain for
3) Moral and nominal damages as the Honorable Court may fix ; trial" by itself. 10

4) P30,000.00, "as attorney's fees, and representation fees of P5,000.00 per The joint petition should be, as it is hereby, dismissed.
day of appearance;" 4
It should be dismissed for failure to comply with this Court's Circular No. 1-88 correct filing fees if not to mislead the docket clerk, in the assessment of the filing value of the estate," on the other. 18 There are, in other words, as already above
(effective January 1, 1989). The copies of the challenged Orders thereto attached 11 fee." The following rules were therefore set down: intimated, actions or proceedings involving real property, in which the value of the
were not certified by the proper Clerk of Court or his duly authorized property is immaterial to the court's jurisdiction, account thereof being taken
representative. Certification was made by the petitioners' counsel, which is not 1. All complaints, petitions, answers, and similar pleadings should specify the merely for assessment of the legal fees; and there are actions or proceedings,
allowed. amount of damages being prayed for not only in the body of the pleading but also in involving personal property or the recovery of money and/or damages, in which the
the prayer, and said damages shall be considered in the assessment of the filing fees value of the property or the amount of the demand is decisive of the trial court's
The petition should be dismissed, too, for another equally important reason. It fails in any case. competence (aside from being the basis for fixing the corresponding docket fees).
to demonstrate any grave abuse of discretion on the part of the respondent Judges 19
in rendering the Orders complained of or, for that matter, the existence of any 2. Any pleading that fails to comply with this requirement shall not be accepted nor
proper cause for the issuance of the writ of mandamus. On the contrary, the orders admitted, or shall otherwise be expunged from the record. Where the action is purely for the recovery of money or damages, the docket fees
appear to have correctly applied the law to the admitted facts. are assessed on the basis of the aggregate amount claimed, exclusive only of
3. The Court acquires jurisdiction over any case only upon the payment of the interests and costs. In this case, the complaint or similar pleading should, according
It is true that the complaints do not state the amounts being claimed as actual, prescribed docket fee. An amendment of the complaint or similar pleading will not to Circular No. 7 of this Court, "specify the amount of damages being prayed for not
moral and nominal damages. It is also true, however, that the actions are not thereby vest jurisdiction in the Court, much less the payment of the docket fee only in the body of the pleading but also in the prayer, and said damages shall be
basically for the recovery of sums of money. They are principally for recovery of based on the amount sought in the amended pleading. considered in the assessment of the filing fees in any case."
possession of real property, in the nature of an accion publiciana. Determinative of
the court's jurisdiction in this type of actions is the nature thereof, not the amount The clarificatory and additional rules laid down in Sun Insurance Office, Ltd. v. Two situations may arise. One is where the complaint or similar pleading sets out a
of the damages allegedly arising from or connected with the issue of title or Asuncion, supra, read as follows: claim purely for money or damages and there is no precise statement of the
possession, and regardless of the value of the property. Quite obviously, an action amounts being claimed. In this event the rule is that the pleading will "not be
for recovery of possession of real property (such as an accion plenaria de possesion) 1. It is not simply the filing of the complaint or appropriate initiatory pleading, but accepted nor admitted, or shall otherwise be expunged from the record." In other
or the title thereof, 12 or for partition or condemnation of, or the foreclosure of a (also) the payment of the prescribed docket fee that vests a trial court with words, the complaint or pleading may be dismissed, or the claims as to which the
mortgage on, said real property 13 - in other words, a real action-may be jurisdiction over the subject-matter or nature of the action. Where the filing of the amounts are unspecified may be expunged, although as aforestated the Court may,
commenced and prosecuted without an accompanying claim for actual, moral, initiatory pleading is not accompanied by payment of the docket fee, the court may on motion, permit amendment of the complaint and payment of the fees provided
nominal or exemplary damages; and such an action would fall within the exclusive, allow payment of the fee within a reasonable time but in no case beyond the the claim has not in the meantime become time-barred. The other is where the
original jurisdiction of the Regional Trial Court. applicable prescriptive or reglementary period. pleading does specify the amount of every claim, but the fees paid are insufficient;
and here again, the rule now is that the court may allow a reasonable time for the
Batas Pambansa Bilang 129 provides that Regional Trial Courts shall exercise 2. The same rule applies to permissive counterclaims, third-party claims payment of the prescribed fees, or the balance thereof, and upon such payment,
exclusive original jurisdiction inter alia over "all civil actions which involve the title and similar pleadings, which shall not be considered filed until and unless the filing the defect is cured and the court may properly take cognizance of the action, unless
to, or possession of, real property, or any interest therein, except actions for fee prescribed therefor is paid. The court may also allow payment of said fee within in the meantime prescription has set in and consequently barred the right of action.
forcible entry into and unlawful detainer of lands or buildings, original jurisdiction a reasonable time but also in no case beyond its applicable prescriptive or
over which is conferred upon Metropolitan Trial Courts, Municipal Trial Courts, and reglementary period. Where the action involves real property and a related claim for damages as well, the
Municipal Circuit Trial Courts." 14 The rule applies regardless of the value of the real legal fees shall be assessed on the basis of both (a) the value of the property and (b)
property involved, whether it be worth more than P20,000.00 or not, infra. The rule 3. Where the trial court acquires jurisdiction over a claim by the filing of the the total amount of related damages sought. The Court acquires jurisdiction over
also applies even where the complaint involving realty also prays for an award of appropriate pleading and payment of the prescribed filing fee but, subsequently, the action if the filing of the initiatory pleading is accompanied by the payment of
damages; the amount of those damages would be immaterial to the question of the the judgment awards a claim not specified in the pleading, or if specified, the same the requisite fees, or, if the fees are not paid at the time of the filing of the pleading,
Court's jurisdiction. The rule is unlike that in other cases e.g., actions simply for has been left for determination by the court, the additional filing fee therefor shall as of the time of full payment of the fees within such reasonable time as the court
recovery of money or of personal property, 15 or actions in admiralty and maritime constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court may grant, unless, of course, prescription has set in the meantime. But where-as in
jurisdiction 16 in which the amount claimed, 17 or the value of the personal or his duly authorized deputy to enforce said lien and assess and collect the the case at bar-the fees prescribed for an action involving real property have been
property, is determinative of jurisdiction; i.e., the value of the personal property or additional fee. paid, but the amounts of certain of the related damages (actual, moral and nominal)
the amount claimed should exceed twenty thousand pesos (P20,000.00) in order to being demanded are unspecified, the action may not be dismissed. The Court
be cognizable by the Regional Trial Court. As will be noted, the requirement in Circular No. 7 that complaints, petitions, undeniably has jurisdiction over the action involving the real property, acquiring it
answers, and similar pleadings should specify the amount of damages being prayed upon the filing of the complaint or similar pleading and payment of the prescribed
Circular No. 7 of this Court, dated March 24, 1988, cannot thus be invoked, as the for not only in the body of the pleading but also in the prayer, has not been altered. fee. And it is not divested of that authority by the circumstance that it may not have
petitioner does, as authority for the dismissal of the actions at bar. That circular, What has been revised is the rule that subsequent "amendment of the complaint or acquired jurisdiction over the accompanying claims for damages because of lack of
avowedly inspired by the doctrine laid down in Manchester Development similar pleading will not thereby vest jurisdiction in the Court, much less the specification thereof. What should be done is simply to expunge those claims for
Corporation v. Court of appeals, 149 SCRA 562 (May 7, 1987), has but limited payment of the docket fee based on the amount sought in the amended pleading," damages as to which no amounts are stated, which is what the respondent Courts
application to said actions, as shall presently be discussed. Moreover, the rules the trial court now being authorized to allow payment of the fee within a did, or allow, on motion, a reasonable time for the amendment of the complaints so
therein laid down have since been clarified and amplified by the Court's subsequent reasonable time but in no case beyond the applicable prescriptive or reglementary as to allege the precise amount of each item of damages and accept payment of the
decision in Sun Insurance Office, Ltd. (SIOL) v. Asuncion, et al., G.R. Nos. 79937-38, period. Moreover, a new rule has been added, governing awards of claims not requisite fees therefor within the relevant prescriptive period.
February 13, 1989. specified in the pleading - i.e., damages arising after the filing of the complaint or
similar pleading-as to which the additional filing fee therefor shall constitute a lien WHEREFORE, the petition is DISMISSED, without pronouncement as to costs.
Circular No. 7 was aimed at the practice of certain parties who omit from the prayer on the judgment.
of their complaints "any specification of the amount of damages," the omission Fernan, C.J., Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco,
being "clearly intended for no other purposes than to evade the payment of the Now, under the Rules of Court, docket or filing fees are assessed on the basis of the Padilla, Bidin, Sarmiento, Cortes, Grio-Aquino, Medialdea and Regalado, JJ.,
"sum claimed," on the one hand, or the "value of the property in litigation or the concur.
G.R. No. 105180 July 5, 1993 According to the testimony of Benjamin Tandoc, in the afternoon of April 23, 1985,
On the Second Cause of Action he was riding in his Toyota car at the backseat thereof with Jose Sison, while his
PANTRANCO NORTH EXPRESS, INC., petitioner, son-in-law Patricio Mamenta was driving. They had come from Binalonan,
vs. 2. To pay the heirs of deceased Patricio Mamenta the following sums of Pangasinan and were cruising along the MacArthur Highway bound towards the
HONORABLE COURT OF APPEALS, Heirs of BENJAMIN TANDOC y DELA CRUZ, money: south. While they were negotiating a sharp curve in Bacag, Villasis, Pangasinan
DAISY TANDOC MAMENTA in her behalf and in behalf of her minor children where no overtaking was allowed, as shown by two (2) yellow parallel lines painted
DAPHNE MOREN-MAMENTA and PATRICIA DAYAN MAMENTA, respondents. a) Death Indemnity P 30,000.00 in the center of the highway, a Pantranco bus bound northward for Baguio City
b) Funeral & related Expenses 54,450.00 overtook several vehicles and was coming towards the Toyota car. Tandoc told
Teodoro C. Fernandez for petitioner. c) Loss of Earning Capacity 133,333.33 Mamenta to go to the shoulder of the road, seeing that the Pantranco was running
d) Moral Damages 50,000.00 very fast and was about to collide with the car. However, before Mamenta could
Cipriano P. Famorca for private-respondent. e) Exemplary Damages 30,000.00 swerve towards the shoulder, the Pantranco bus bumped the left front side of the
car, which was pushed up towards the shoulder. At that moment the car was a also
TOTAL P297,783.33 bumped from behind by another Pantranco bus which had been following it, thus
causing the car to be sandwiched between the two (2) Pantranco buses.
DAVIDE, JR., J.: Plus costs.
As a result of the impact, Mamenta died. Tandoc lost consciousness, and when he
On 23 April 1985 at about 3:00 p.m., a vehicular accident occurred along the PNEI appealed the decision to the Court of Appeals which docketed the case as CA- regained it the following morning, he was already at the Urdaneta Sacred Heart
MacArthur Highway at Barangay Bacag, Villasis, Pangasinan involving two buses G.R. CV No. 26220. Hospital. His left elbow was dislocated and he sustained lacerated wounds in his left
owned and operated by the Pantranco North Express, Inc, (PNEI) and a Toyota eyebrow, left eyelids, and left upper lips.
Corona car owned by Vice-Mayor Benjamin Tandoc of Tayug, Pangasinan which was In a decision 7 promulgated on 31 March 1992, the Court of Appeals affirmed with
then being driven by his son-in-law, Patricio Mamenta. As a result of the three- modification the judgment of the trial court. The modification consists in the Jose Sison corroborated the testimony of Tandoc on how the incident happened,
vehicle collision, Patricio Mamenta and Samson de Vera, who was the driver of one reduction of the awards for the value of the car and for funeral and related maintaining that the Pantranco bus had overtaken several vehicles before its front
of the PNEI buses, died, while Benjamin Tandoc, Jose Sison (an occupant of the expenses to P80,000.00 and P8,000.00, respectively. left side hit the car at its left front portion. He too lost consciousness and regained it
Toyota car) and several passengers of the PNEI buses suffered physical injuries. The at the Urdaneta Emergency Hospital at about 6:00 P.M. He suffered two (2) broken
Toyota car was a total wreck. Still dissatisfied, PNEI came to this Court via this petition for review on certiorari ribs.
under Rule 45 of the Rules of Court and alleges the following grounds in support
On 23 July 1985, Benjamin Tandoc and the heirs of Patricio Mamenta, namely, his thereof: Upon the other hand, Pedro Duay, the driver of the Pantranco Bus No. 1122 which
wife, Daisy Tandoc-Mamenta, and his minor children, Daphne and Patricia Dayan, had been following the Toyota car of Tandoc, testified that while he was cruising the
filed a complaint for damages against PNEI and the Philippine National Bank (PNB) 1. THE HONORABLE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION curved portion of MacArthur Highway at Bgy. Bacag, the Toyota car overtook and
with the Regional Trial Court of Tayug, Pangasinan. The PNB was impleaded because IN HOLDING THAT THE LOWER COURT DID NOT ERR IN ASSUMING JURISDICTION passed his bus to a distance of about five (5) meters and while the said car was still
it is allegedly the mortgagee, receiver, and/or owner of PNEI, hence an OVER THE CASE DESPITE NON- PAYMENT OF REQUIRED DOCKET FEES. at the center lane of the highway going towards Manila, an oncoming Pantranco Bus
indispensable party. The complaint was docketed as Civil Case No. T-1721. 1 PNEI No. 1202 bumped the car, causing it to be thrown towards the right side of the
filed its Answer with Counterclaim on 22 August 1985. 2 PNB filed a motion to 2. EVEN ASSUMING, WITHOUT ADMITTING, THAT THE LOWER COURT DID highway. After the impact, Duay said, the Pantranco Bus No. 1202 rammed his bus
dismiss 3 and upon its denial 4 by the trial court, it filed its Answer with NOT ERR IN ASSUMING JURISCTION (sic) OVER THE CASE, THE COURT OF APPEALS on the left front portion thereof. As a result of the incident he suffered a fractured
Counterclaim. 5 GRAVELY ABUSED ITS DISCRETION IN UPHOLDING THE AWARD FOR LOSS OF right leg and his left chin and jaw were also injured.
EARNING CAPACITY OF BENJAMIN TANDOC.
On 17 June 1987, during the pendency of the case, Benjamin Tandoc died of a heart The conductor of bus No. 1122, Edgardo Cayanan, testified that when the incident
attack. He was substituted by his heirs. 3. THE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION IN took place, he had his back turned towards the driver and he was facing the rear
UPHOLDING THE LOWER COURT'S AWARD FOR ATTORNEY'S (sic) FEES. part of the bus because he was then talking to two (2) women passengers regarding
On 15 December 1989, the trial court rendered a decision 6 dismissing the student tickets, hence he did not see what actually happened.
complaint against the PNB but holding the PNEI liable to the plaintiffs as follows: 4. THE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION IN
DISREGARDING THE RULE ON RES GESTAE. Another witness, however, testified for the defense. He was Leonardo Lopez, Jr., a
On the First Cause of Action member of the INP in Paniqui, Tarlac, who stated that at the time of the incident he
5. THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT IT WAS THE and his family were riding in a Mazda mini-bus going home to Tarlac from a beach
1. To pay the heirs of deceased Benjamin Tandoc the following sums of DRIVER OF PANTRANCO BUS NO. 1202 WHO WAS RESPONSIBLE FOR THE ACCIDENT. resort in La Union. He stated that the car tried to overtake but did not make it and it
money: 8 was hit by a Pantranco bus going to Baguio City, while another Pantranco bus also
hit the car at its rear portion. He took shots of the incident and then gave them to
a) Hospitalization and Medical Expenses P 17,211.55 The factual findings of the Court of Appeals are as follows: an employee of the Pantranco.
b) Value of Car 100,000.00
c) Loss of Earning Capacity 300,000.00 The plaintiffs and the defendant PNEI have conflicting versions of the incident that Faced with these conflicting versions as to which vehicle actually overtook vehicles
d) Moral Damages 150,000.00 resulted in a mishap which killed not only Patricio Mamenta and caused physical in a no overtaking-zone, the lower court gave credence to the version of the
e) Exemplary Damages 30,000.00 injuries not only to Benjamin Tandoc but also to several others who were plaintiffs, which was supported by the findings of the policemen who conducted an
f) Attorney's fees 80,000.00 passengers of the two (2) Pantranco buses that figured in the accident. on the spot investigation of the incident.

TOTAL P677,211.55
Pat. Renario B. Acosta of the Integrated National Police of Villasis, Pangasinan, a the incident actually happened". The court took note of the fact that Pat. Acosta We shall now resolve the questions of law which are raised in the first to the third
police investigator since 1972, and the OIC of the Investigation Section of the Villasis had been a police investigator for thirteen (13) years and was the chief investigator assigned errors: whether or not the public respondent gravely abused its discretion
Police Station conducted an investigation of the incident. We quote pertinent of their police station; that his report was based on interviews with plaintiff Tandoc, (a) in holding that the lower court did not err in assuming jurisdiction over the case
portions of the written report he submitted: from residents near the place of the incident, especially one Arcadio Menor, who despite the non-payment of the required docket fees, (b) in sustaining the award of
was in his store some 40 to 50 meters away from the scene; and more importantly, P300,000.00 for the loss of earning capacity of Benjamin Tandoc, and (c) in
2. Detailed investigations revealed that the above-mentioned PANTRANCO his own visual inspection of the damages sustained by the three (3) vehicles upholding the trial court's award of P80,000.00 for attorney's fees. As to the first, it
with Body No. 1202 was then in the process of overtaking within the prohibitive involved in the incident. is not altogether correct to say that the required docket fees were not paid. There
zone, as shown by the double yellow line in the center of the road, and without was only a deficiency in the payment of such. The public respondent ruled as
taking the necessary precaution to avoid damage to and loss of lives and properties, On the other hand, Maj. Bascos relied heavily for his Spot Report on the version of a follows:
and considering the several vehicles ahead proceeding north direction and while in certain Pat. Jose Abrenica who was supposedly at the scene at the time of the
the process of overtaking by taking the western lane of the MacArthur Highway, incident. However, as the trial court stated, Pat. Abrenica was not presented as a The records show that the plaintiffs paid a filing fee of P600.00 and a legal research
bumped and sideswiped the oncoming Toyota Car hereto above mentioned. After witness and it is doubted whether he was actually at the scene, since his name was fee of P30.00, as evidenced by O.R. No. 3711618 and O.R. No. 6035087,
the impact, the said car turned on its side and finally rested on the western side of never mentioned in the testimonies of Patrolmen Acosta or Pituc or of the other respectively. The defendant-appellant never raised the issue of inadequate filing
the shoulder of the road facing East direction. The said PANTRANCO bus with Body defense witnesses. Furthermore, there is no showing that Major Bascos is qualified fees in the court below. It now invokes the ruling in Manchester Development
No. 1202 went further along the same lane intended for oncoming vehicles coming as a traffic accident investigator. The mere fact that he is a superior officer of Pat Corporation vs. Court of Appeals, 149 SCRA 562 where the Supreme Court held that
from the North, again collided and bumped head-on another PANTRANCO Acosta does not make his report more credible. Moreover, there is no explanation all complaints, petitions, answers and other similar pleadings should specify the
passenger bus with Body No. 1122 coming from the North proceeding southward for the fact that Major Bascos had to prepare his own separate report when, as he amount of damages being prayed for, not only in the body of the pleading but also
direction. After the impact, both PANTRANCO buses finally rested on the western admitted, he saw Patrolmen Acosta and Pituc already in the scene conducting their in the prayer, and said damages shall be considered in the assessment of filing fees
shoulder of the highway, wherein the rear portion of Bus No. 1122 was facing on-the-spot investigation. in any case, and that any pleading that fails to comply with this requirement shall
Northeast direction, while the rear portion of Bus No. 1202 was facing Southeast not be accepted or admitted, or shall otherwise be expunged from the records; and
direction both buses were occupying the western portion of the MacArthur We find no reason to disagree with the conclusion of the trial court that it was in that the court acquires jurisdiction over any case only upon payment of the
Highway. fact the driver of the Pantranco bus No. 1202 who was responsible for the accident. prescribed docket fee.
Thus it is, that the defendant PNEI is liable for the damages caused by its said
3. That the probable impact between the PANTRANCO Bus with Body No. employee by virtue of the provisions of the Civil Code. 9 In the case of Sun Insurance Office, Ltd. (SIOL) vs. Asuncion, 170 SCRA 274, however,
1202 and the Toyota Car took place near the western edge of the asphalt pavement the High Court made a more liberal interpretation of the rules, considering that the
of the highway as evidenced by the scattered pieces of glasses and other objects The errors assigned by the petitioner are not strictly errors of law. The fourth and private respondent therein demonstrated his willingness to abide by the said rules
found on the surface of the road; while the point of impact between the two buses fifth assigned errors even raise purely factual issues notwithstanding the claim in by paying the additional docket fees required. When the petitioner in the said case
was likewise indicated on the attached sketch taken and prepared by Pat. Ruben V. the fourth that the public respondent "abused its discretion in disregarding the rule contended that the fee paid by the respondent was still insufficient, the Supreme
Pituc of this unit. In both cases, the impact took place at the lane intended for on res gestae." Said fourth assigned error merely involves the question as to whose Court stated that the clerk of court and/or his duly authorized docket clerk or clerk
vehicles coming from the north proceeding south direction. testimony and spot report whether that of Patrolman Acosta or that of Major in charge should determine if any amount is due and, thereafter, require the private
Basco should be given full faith and credit. respondent to pay the same.
Another policeman, Pat. Ruben Pituc, prepared a sketch at the scene of the
incident. We shall first dispose of these factual issues. The Supreme Court then said:

The defense had tried to discredit the investigation report of Pat. Acosta by Well-entrenched is the general rule that the jurisdiction of this Court in cases 3. Where the trial court acquires jurisdiction over a claim by the filing of the
presenting Police Major Romeo Basco, then Station Commander of the INP in brought before it from the Court of Appeals is limited to reviewing or revising errors appropriate pleading and payment of the prescribed filing fee but, subsequently the
Villasis. Major Basco testified that upon knowing that a vehicular accident happened of law; findings of fact of the latter are conclusive 10 for it is not the function of this judgment awards a claim not specified in the pleading, or if specified the same has
in Barangay Bacag, he went to the scene where he saw Patrolmen Acosta and Pituc Court to analyze or weigh such evidence all over again. It is only in exceptional cases been left for determination by the court, the additional filing fee therefor shall
still conducting their investigation. He made a Spot Report to the effect that: where this Court may review findings of fact of the Court of Appeals. 11 In the constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court
instant case, both the trial court and the public respondent found that it was the or his duly authorized deputy to enforce said lien and assess and collect the
Investigation conducted disclosed that both buses were bound Manila and Baguio driver of the petitioner's bus no. 1202 who was responsible for the accident and additional fee.
City, when the above-mentioned car tried to overtake bus bound Manila. At this that Patrolman Acosta is more credible than Major Basco. Petitioner has not shown
juncture, Pantranco (sic) bus bound Baguio City, while on its full speed, bumped said to us that such findings and conclusions fall within any of the exceptions to this rule. In the case now before us, we do not find the plaintiffs had the intention of evading
car which resulted to their instant death and simultaneously collided with the As regards the so-called spot report of Major Basco which the petitioner describes the payment of the required docket fees and, applying the rule in the case
Manila bound bus which caused damages on both vehicle. to be part of the res gestae, the petitioner has a misconception of what res gestae hereinabove cited, we hold that the lower court did not err when it assumed
is, which, as it should have known, relates to the admissibility of evidence and not jurisdiction over the case. 13
Major Bascos claimed that he based this report on the investigation conducted by to its weight and sufficiency. In the instant case, there was no evidence which was
Pat. Abrenica and the information given by the residents of the place. He stated that offered as part of the res gestae, hence, none could have been denied admission by The guiding rules laid down by this Court in Sun Insurance Office, Ltd., (SIOL) vs.
Pat. Acosta was not in charge of investigation while Pat. Pituc only prepared a the trial court and the public respondent. In any event, if there was one, the Asuncion 14 are as follows:
sketch but was not an investigator. He informed the court that his own investigation petitioner miserably failed to show or prove the presence of the requisites of res
prevails over that of the others when there is a discrepancy. He, however, gestae, viz.: (1) that the principal act be a startling occurrence, (2) that the 1. It is not simply the filing of the complaint or appropriate initiatory
confirmed that he agreed with the sketch prepared by Pat. Pituc. statements were made before the declarant had time to contrive or devise, and (3) pleading, but the payment of the prescribed docket fee, that vests a trial court with
that the statements must concern the occurrence in question and its immediately jurisdiction over the subject-matter or nature of the action. Where a filing of the
We agree with the trial court when it gave more weight to the findings of Pat. attending circumstances. 12 initiatory pleading is not accompanied by payment of the docket fee, the court may
Acosta, "it possessing the earmarks of truth and credibility insofar as it stated how
allow payment of the fee within a reasonable time but in no case beyond the of the requisite fees, or, if the fees are not paid at the time of the filing of the d) To pay to PNEI attorney's fees of P50,000.00 plus appearance and
applicable prescriptive or reglementary period. pleading, as of the time of full payment of the fees within such reasonable time as expenses of litigation in the amount of P500.00 per hearing. 19
the court may grant, unless, of course, prescription has set in the meantime. But
2. The same rule applies to permissive counterclaims, third-party claims where as in the case at bar the fees prescribed for an action involving real The petitioner raised the issue regarding jurisdiction for the first time in its Brief
and similar pleadings, which shall not be considered filed until and unless the filing property have been paid, but the amounts of certain of the related damages (actual, filed with the public respondent in CA-G.R. CV No. 26220 on 2 February 1991. 20
fee prescribed therefor is paid. The court may also allow the payment of said fee moral and nominal) being demanded are unspecified, the action may not be After vigorously participating in all stages of the case before the trial court and even
within a reasonable time but also in no case beyond its applicable prescriptive or dismissed. The Court undeniably has jurisdiction over the action involving real invoking the trial court's authority in order to ask for affirmative relief, the
reglementary period. property, acquiring it upon the filing of the complaint or similar pleading and petitioner is effectively barred by estoppel from challenging the trial court's
payment of the prescribed fee. And it is not divested of that authority by the jurisdiction. Although the issue of jurisdiction may be raised at any stage of the
3. Where the trial court acquires jurisdiction over a claim by the filing of the circumstance that it may not have acquired jurisdiction over the accompanying proceedings as the same is conferred by law, it is nonetheless settled that a party
appropriate pleading and payment of the prescribed filing fee but, subsequently, claims for damages because of lack of specification thereof. What should be done is may be barred from raising it on ground of laches or estoppel. 21 The deficiency in
the judgment awards a claim not specified in the pleading, or if specified the same simply to expunge those claims for damages as to which no amounts are stated, the payment of the docket fees must, however, be considered a lien on the
has been left for determination by the court, the additional filing fee therefor shall which is what the respondent Court did, or allow, on motion, a reasonable time for judgment which must be remitted to the clerk of court of the court a quo upon the
constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court the amendment of the complaints so as to allege the precise amount of each item execution of the judgment.
or his duly authorized deputy to enforce said alien and assess and collect the of damages and accept payment of the requisite fees therefor within the relevant
additional fee. prescriptive period. Petitioner's contention that the Court of Appeals erred in upholding the award of
damages for loss of earning capacity of Benjamin Tandoc in the amount of
We further clarified the rules in Tacay vs. Regional Trial Court of Tagum, Davao del In Central Bank of the Philippines vs. Court of Appeals, 16 we held that the P300,000.00 is meritorious. The only possible basis for such an award is the public
Norte: 15 prescriptive period mentioned in the Sun Insurance case: respondent's statement, culled from the decision of the trial court, that, per
Tandoc's testimony, he used to earn P3 million annually and that at the time of the
Now, under the Rules of Court, docket and filing fees are assessed on the basis of refers to the period in which a specific action must be filed. It means that in every accident, he was about to negotiate a P1.5 million contract with Minister Hipolito
the "sum claimed," on the one hand, or the "value of the property in litigation or case, the docket fee must be paid before the lapse of the prescriptive period. which he was unable to get because he was by then already disabled. 22 However,
the value of the estate," on the other. There are, in other words, as already above Chapter 3, Title V, Book III of the Civil Code is the principal law governing Tandoc testified that his business resumed operations after stopping for only about
intimated, actions or proceedings involving real property, in which the value of the prescription of actions. a month. 23 As to the alleged contract he was about to negotiate with Minister
property is immaterial to the court's jurisdiction, account thereof being taken Hipolito, there is no showing that the same has been awarded to him. If Tandoc was
merely for assessment of the legal fees; and there are actions or proceedings, Ideally then, the private respondents should have specified the amount of their about to negotiate a contract with Minister Hipolito, there was no assurance that
involving personal property or the recovery of money and/or damages, in which the claims for moral and exemplary damages and for loss of earning capacity so that the the former would get it or that the latter would award the contract to him since
value of the property or the amount of the demand is decisive of the trial court's clerk of court of the trial court may be able to compute the requisite docket fees. there was the requisite public bidding. The claimed loss of profit arising out of that
competence (aside from being the basis for fixing the corresponding docket fees). However, considering the attendant circumstances in this case, the pronouncement alleged contract which was still to be negotiated is a mere expectancy. Tandoc's
of the public respondent on the issue of jurisdiction should be sustained. For one, claim that he could have earned P2 million in profits is highly speculative, and no
Where the action is purely for the recovery of money or damages, the docket fees the complaint in this case was filed on 28 July 1985 or one (1) year, nine (9) months concrete evidence was presented to prove the same. The only unearned income to
are assessed on the basis of the aggregate amount claimed, exclusive only of and fourteen (14) days before the promulgation of the decision in Manchester which Tandoc is entitled to from the evidence presented is that for the one-month
interests and costs. In this case, the complaint or similar pleading should, according Development Corporation vs. Court of Appeals. 17 While it is true that in Sun period during which his business was interrupted, which is P6,125.00, considering
to Circular No. 7 of this Court, "specify the amount of damages being prayed for not Insurance we declared that the Manchester ruling applies retrospectively, the fact that his annual net income was P73,500.00. 24
only in the body of the pleading but also in the prayer, and said damages shall be remains that in the instant case, the last witness for the plaintiff's evidence in chief
considered in the assessment of the filing fees in any case." testified on 20 August 1986, 18 or long before the Manchester decision was There is, however, no merit in the petitioner's claim with respect to attorney's fees.
promulgated, and although the trial court decided this case on 15 December 1989, While attorney's fees and expenses of litigation are not recoverable as a matter of
Two situations may arise. One is where the complaint or similar pleading sets out a the petitioner never raised the issue of jurisdiction arising from the insufficiency of right if not stipulated upon, Article 2208 of the Civil Code allows their recovery in
claim purely for money or damages and there is no precise statement of the the docket fees paid either in its answer or in any subsequent pleading. On the specific instances, among which are:
amounts being claimed. In this event the rule is that the pleading will "not be contrary, it not only resisted the claims of the plaintiffs but even invoked the
accepted nor admitted, or shall otherwise be expunged from the record." In other jurisdiction of the trial court in its counterclaims wherein it prayed for judgment xxx xxx xxx
words, the complaint or pleading may be dismissed, or the claims as to which the ordering the plaintiffs solidarily:
amounts are unspecified may be expunged, although as aforestated the Court may, (1) When exemplary damages are awarded;
on motion, permit amendment of the complaint and payment of the fees provided a) To reimburse to PNEI the amount of P753,548.00 representing advances
the claim has not in the meantime become time-barred. The other is where the made by it as alleged in paragraph 8 of the counterclaim with interest thereon at (2) When the defendant's act or omission has compelled the plaintiff to . . .
pleading does specify the amount of every claim, but the fees paid are insufficient; the rate of 16% p.a. from the date the amounts were advanced until the same is incur expenses to protect his interest;
and here again, the rule now is that the court may allow a reasonable time for the fully reimbursed;
payment of the prescribed fees, or the balance thereof, and upon such payment, xxx xxx xxx
the defect is cured and the court may properly take cognizance of the action, unless b) To reimburse to PNEI any amounts which may be advanced in future
in the meantime prescription has set in and consequently barred the right of action. dates to the other injured passengers with interest thereon; (11) In any other case where the court deems it just and equitable that
attorney's fees and expenses of litigation should be recovered.
Where the action involves real property and a related claim for damages as well, the c) To pay to PNEI the amount of P101,781.47 representing actual expenses
legal fees shall be assessed on the basis of both (a) the value of the property and (b) for the repairs of Bus No. 1122 and Bus No. 1202 and to pay the unearned revenue xxx xxx xxx
the total amount of the related damages sought. The Court acquires jurisdiction during the period when the said busses were under repair;
over the action if the filing of the initiatory pleading is accompanied by the payment
In the instant case, exemplary damages were awarded by the trial court which the
public respondent sustained. There can as well be no doubt that because of the PAYMENT OF DOCKET FEES
tortious act of the petitioner, the private respondents were compelled to incur
expenses to protect their interest. Finally, considering the attendant circumstances G.R. No. L-19827 April 6, 1923
in this case, we are of the opinion that justice and equity warrant the recovery of
attorney's fees. However, as directed by the last paragraph of the said Article 2208, GUTIERREZ HERMANOS, Plaintiff-Appellee,
"[i]n all cases, the attorney's fees and expenses of litigation must be reasonable." vs.
The award of P80,000.00 as attorney's fees in the first cause of action (re claim of ANTONIO DE LA RIVA, Defendant-Appellant.
Benjamin Tandoc) and none in the second cause of action (re death of Patricio
Mamenta) breaches the parameters of reasonableness. It should be reduced to Alfredo Chicote for appellant.
P25,000.00. Eduardo Gutierrez Repide and Felix Socias for appellee.

Finally, in accordance with prevailing jurisprudence, the death indemnity of ROMUALDEZ, J.:
P30,000.00 is increased to P50,000.00.
The point at issue in this case is whether or not the judgment rendered by this court
WHEREFORE, the instant petition is partly GRANTED and the challenged decision of on January 12, 1909, 1 in the case R. G. No. 4604 and No. 4244 of the Court of First
the Court of Appeals in CA-G.R. CV No. 26220 is hereby MODIFIED by: (a) reducing Instance of Manila is effective between the parties in that case. Said parties were
the award of damages for loss of earning capacity of Benjamin Tandoc from notified of that judgment on February 13, 1909, and the record of the case was
P300,000.00 to P6,125.00, (b) reducing the award for attorney's fees from returned to the Court of First Instance of origin, the same having been recorded and
P80,000.00 to P25,000.00, and (c) increasing the death indemnity to P50,000.00. In filed in said court on the 15th of the same month and year (folio 485 of said record).
all other respects, the decision is AFFIRMED.
On the 25th of the same month and year, the plaintiff, winner in that case,
The deficiency in the payment of the docket fees, to be computed by the clerk of presented his bill of costs in the Court of First Instance, to which the case had been
court of the trial court, shall constitute a lien on the judgment. returned.

No pronouncement as to costs. On the 24th of February, 1914, the plaintiff moved the Court of First Instance to
enter judgment in accordance with said decision of this court which modified the
SO ORDERED. judgment involved in that appeal, sentencing the defendant to pay plaintiff, instead
of P94,222.50, the sum of P93,963.30 with interest thereon at 8 per cent per annum
Feliciano, Bidin, Romero and Melo, JJ., concur. from January 1, 1906 with costs. Granting this motion, the Court of First Instance
rendered judgment in harmony with the opinion of this court.

On March 19, 1918, a writ of execution was issued upon that judgment, which was
returned unsatisfied to the Court of First Instance, no property of the defendant
having been found.

On the 5th of November of the same year a new execution was issued, of which no
return appears to have been made.

On the 15th of February, 1922, the plaintiff brought suit against the same
defendant, praying that judgment be rendered reviving, and giving effect to the
judgment in question.

The first point that presents itself for our consideration is whether the period of five
years fixed by section 443 of the Code of Civil Procedure within which an execution
can be issued upon a judgment must be computed from February 26, 914, the date
of the judgment entered by the Court of First Instance in accordance with the
decision of this court, or from January 12, 1909, the date of the judgment of this
court.

If the former proposition is correct then the writs of execution issued on the 19th of
March, and 5th of November, 1918, were within the five-year period fixed by said
section 443 of the Code of Civil Procedure. But if said period of five years begins to
run not from February 26, 1914, but from January 12, 1909, then said executions
issued in the year 1918 are of no legal effect.
Therefore the writs of execution issued in the year 1918 were issued long after the
To solve this question, it is necessary to determine the legal effect of the judgment UNITED STATES OF AMERICA period of five years fixed by the legal provision just quoted and consequently they
entered by the Court of First Instance on February 26, 1914. The plaintiff alleges have no legal effect.
that such judgment was entered in accordance with the dispositive part of the SUPREME COURT OF THE PHILIPPINE ISLANDS
decision of this court wherein, among other things, it is said: The other point remaining to be considered has reference to the action brought by
GUTIERREZ HERMANOS, the plaintiff by the filing of a complaint on February 15, 1922, from which this
Twenty days after notification of this decision, let judgment be entered in Plaintiffs and appellee, appeal originated. The question at issue is whether or not this action is tenable,
accordance herewith, and ten days thereafter, let the record be remanded to the taking into account the date it was filed. It is based on section 447 of the Code of
court of origin for proper proceedings. VERSUS Civil Procedure, the English and Spanish texts of which are as follows:

It is argued that as in this decision it is ordered that judgment be entered in ANTONIO DE LA RIVA, Enforcement of judgment after lapse of five years. - In all cases, a judgment may be
accordance therewith, the Court of First Instance, at the instance of the plaintiff, Defendant and appellant. enforced after the lapse of five years from the date of its entry, and before the
entered such a judgment on February 26, 1914. But such an order of this court was same shall have been barred by any statute of limitation, by an action instituted in
not, and could have been, addressed to the Court of First Instance, because right JUDGMENT regular form, by complaint, as other actions are instituted.
after that order it was directed that, after the entry of such a judgment in
accordance with the decision, the record be remanded to the court of origin for February 3, 1909. Del cumplimiento de la sentencia despues de trancurridos cinco aos. - En todos los
proper proceedings. Under these orders it was impossible for the Court of First casos puede exigirse el cumplimiento de una sentencia despues del vencimiento de
Instance to enter judgment before the record of the case was remanded thereto. 16 Judgment Book cinco aos desde la fecha de su inscripcion y antes que quede prescrita, por virtud
Register No. 4604. de cualquier ley de prescripcion, mediante demanda interpuesta en la forma
This order of the Supreme Court, which is usually contained in its decisions, is in acostumbrada.
harmony with the provision of section 506 of the Code of Civil Procedure and rules This Court having regularly acquired jurisdiction for the trial of the above entitled
33 and 34 of the Rules of this court, which are as follows: cause, submitted by both parties for decision, after consideration thereof by the [Enforcement of the judgment trancurridos after five years. - In all cases it can be
court upon the record, its decision and order for judgment having been filed on the enforced in a statement after the expiry of five years from the date of registration
SEC. 506 ( Code of Civil Procedure). - In all cases heard by the Supreme Court on bills 12th day of January, nineteen hundred and nine; chanrobles virtual law library and before it is prescribed, by virtue of any statute of limitation, by application filed
of exception, its judgments shall be remitted to the Courts of First Instance from in the normal manner.]
which the actions respectively came into the Supreme Court; and for this purpose it By virtue thereof the judgment of the Court of First Instance of Manila dated
shall be the duty of the clerk of the Supreme Court, within ten days after the close twenty-first day of May, nineteen hundred and seven, and from which this appeal The question that presents itself for our consideration is whether or not the
of any term, to remit to the clerks of Courts of First Instance, notices of all was taken is hereby modified by changing the amount of P94,222.50 therein stated judgment under discussion has already prescribed, to solve which it would be
judgments of the Supreme Court in actions brought from the Courts of First Instance for P93,963.30, and as thus modified, said judgment is affirmed, and it is ordered necessary to determine when the period of prescription of said judgment has begun
respectively. Upon receiving the notice so remitted, the clerk of the Court of First that judgment be entered against the defendant for the sum of P93,963.30, with to run. If it began on the day it was rendered, that is to say, February 3, 1909, then
Instance shall entered the same upon his docket and file the notice with the other interest thereon at the rate of eight per centum per annum from January 1, 1906, the complaint which was filed on February 15, 1922, cannot prosper because the
papers in the action. with the costs in the court below, and without special pronouncement as to the judgment has already prescribed, inasmuch as from the first to the last of said dates
costs on this appeal. more than ten years have elapsed which is the period of prescription of judgment
The judgment so remitted shall be executed by the Court of First Instance, in the under section 43, No. 1, of the Code of Civil Procedure.
same manner as though the action had not been carried to the Supreme Court. But It is further ordered that . . . recover from . . . the sum of P as costs.
the Supreme Court may, by special order, direct any particular judgment to be Civil actions other than for the recovery of real property can only be brought within
remitted to the proper Court of First Instance at any time, without awaiting the end (Sgd.) J. E. BLANCO the following periods after the right of action accrues: chanrobles virtual law library
of the term. Clerk of the Supreme Court of the
Philippine Islands 1. Within ten years: An action upon agreement, contract, or promise in
Art. 33 ( Rules of the Supreme Court). - Upon the publication of the decision, the writing, or upon the judgment or decree of a court. . . .
clerk shall mail notice thereof to the respective parties or their counsel, and Therefore the judgment entered by the Court of First Instance on February 26,
judgment shall not be entered until ten days after such publication. 1914, is not the judgment ordered by the Supreme Court to be entered, for such But if the period of limitation did not begin to run on February 3, 1909, but after the
judgment had already been entered by the clerk of this court on February 3, 1909. lapse of the five years within which the plaintiff could get an execution upon said
Art. 34 ( Rules of the Supreme Court). - Five days after entry of judgment the clerk Such a judgment of the Court of First Instance under date of February 26, 1914, was judgment, then under the section just quoted, the complaint by which this action
shall remand the case to the lower court, unless notice is given, pursuant to rule 40 and is an unnecessary proceeding and has no legal effect. was commenced was presented on time, having been filed before the expiration of
of intention to petition the Supreme Court of the United State for a writ of the prescriptive period. But in adopting this view, we encounter a serious difficulty
certiorari, in which event the mittimus shall be stayed pending action by this court The true and legally effective judgment is the one entered by the clerk of the and that is the fact that section 447 of the Code of Civil Procedure above quoted
upon such notice. Supreme Court on February 3, 1909. And from this date the five years mentioned in provides that and before the same shall have been barred. So that the action
section 443 of the Code of Civil Procedure must be, and are computed, which provided in this section must be brought before the judgment prescribes. If the
The judgement that the Supreme Court ordered entered in accordance with its section provides: words we have underscored had not been added to this provision, it would not be
decision was the one to be entered by the clerk of said court before remanding the difficult to hold that the action referred to in this section may be brought within ten
case to the court origin. And as the matter of fact, the clerk of the Supreme Court The party in whose favor judgment is given, may, at any time within five years after years from the expiration of the five years within which execution can be issued
on February 3, 1909, entered the judgement required by said court to be entered, the entry thereof, have a writ of execution issued for its enforcement, as upon the judgment, considerable, without admitting, that the action provided by
which is on folio 499 of the record of said civil case No. 4244, and which literally is hereinafter provided. law in said section accrues and exists only after the expiration of the five years fixed
as follows: for the execution of the judgement. But it must be noted in the first place that in
interpreting this section 447 of the Code of Civil Procedure, we must not, according In the third place, if it is held that after the expiration of the five years within which 4, 1914, and the ten years limitation did not begin to run until then and will not
to the maxim " noscitur a sociis," lose sight of the provisions concerning the execution can be issued upon a judgment, the winning party has still ten years expire until February 3, 1924. It may be noted that we are dealing with a limitation
prescription above-mentioned; and construing said section 447 in this way, the within which to revive it, then the judgment would not prescribe until after fifteen of action and not with prescription of title.
conclusion one arrives at is that after the expiration of the five years within which years, which is against No. 1 of section 43 of the same Code.
execution can be issued upon a judgment, the winning party can revive it only in the With all due respect, I am unable to understand the argument that the word
manner therein provided so long as the period of ten years does not expire from the And it cannot be said that such is the letter, and much less, the intention of the law, "action" in the chapter on limitation of actions in section 447 of the Code of Civil
date of said judgment, according to section 43, No. 1, of the same Code. for there is nothing is section 447 of the said Code, making this new period different Procedure has a different meaning from the definition of the word given in section 1
from the one prescribed in said section 43, No. 1, or reconciling these two of the same Code.
In the second place, it cannot be said that the cause of action of the winning party provisions, there being no other way of reconciling them than to say that after the
to enforce a judgment accrues only after the expiration of the five years within expiration of the first five years next following the judgment, there remain to the Avancea, J., concur.
which he may obtain an execution. The right of said winning party to enforce the victorious party only another five years to revive it.
judgment against the defeated party, begins to exist the moment the judgment is
final; and this right, according to our Code of Procedure, consists in having an Prescription is a matter of positive legislation and cannot be established by mere
execution of the judgment issued during the first five years next following, and in implications or deductions.
commencing after that period the proceeding provided in section 447 to revive it,
and this latter remedy can be pursued only before the judgment prescribed, that is The views of the courts as to the character of statutes of limitation have varied
to say, during the five years next following. It is so much an action to ask for an considerably. Originally such a statute was regarded as one of repose and not one of
execution as it is to file a complaint for reviving it, because, as we know, by action is presumption. Subsequently the tendency of judicial opinions was that the statute
meant the legal demand of the right or rights one may have. was one of presumption rather than of repose. Following this the courts again
viewed with favor the doctrine first advanced, and adopted the view, which prevails
Many definitions of the term "action" have been given by the courts. It has been at the present day, to the effect that it is a statute or repose, the object of which is
defined as the legal demand of one's right, or rights; the lawful demand of one's to suppress fraudulent and stale claims from springing up at great distances of time,
rights, or rights; the lawful demand of one's rights in the form given by law; a and surprising the parties or their representatives, when all the proper vouchers
demand of a right in a court of justice; the lawful demand of one's right in a court of and evidence are lost, or the facts have become obscure from the lapse of time, or
justice; the legal and formal demand of one's right from another person or party, the defective memory or death or removal of witnesses. . . . (17 R. C. L., 664, 665.)
made and insisted on in a court of justice; a claim made before a tribunal; an
assertion in a court of justice of a right given by law; a demand or legal proceeding As a consequence of all of the foregoing, the writs of execution issued in the year
in a court of justice to secure one's rights; the prosecution of some demand in a 1918 upon the judgment of February 3, 1909, are of no legal effect and the herein
court of justice; the means by which men litigate with each other; the means that complaint filed February 15, 1922, was presented after said judgment has
the law has provided to put the cause of action into effect; the formal means or prescribed.
method of pursuing and recovering one's right in a court of justice; the rightful
method of obtaining in court what is due to any one; the prescribed mode of Wherefore the conclusion is inevitable that the plaintiff has no right to bring this
enforcing a right in the proper tribunal; a remedial instrument of justice whereby action and its complaint must be dismissed.
redress is obtained for any wrong committed or right withheld; a proceeding in
court, whether of equity or law; a suit or process by which a demand is made of a For all of the foregoing the judgment appealed from is reversed, and the complaint
right, in a court of justice; a proceeding at law to enforce a private right or to dismissed, without express finding as to costs. So ordered.
redress a private wrong; a civil proceeding taken in a court of law to enforce a right;
a judicial proceeding for the prevention or redress of a wrong; a proceeding by one Araullo, C.J., Street Malcolm and Villamor JJ., concur.
party against another to try their mutual rights; an ordinarily proceeding in a court
of Justice by which one party prosecutes another for the enforcement or protection
of a right, the redress or prevention of a wrong, or the punishment of a public Separate Opinions
offense; a judicial proceeding which will, if prosecuted effectually, result in a
judgment. (1 Corpus Juris, pp. 924, 925.) OSTRAND, J., dissenting: chanrobles virtual law library

As may be seen, this word action has many meanings among which is included not I dissent. The action is brought under section 447 of the Code of Civil Procedure to
only the bringing of a suit in court, but also the claiming of a right one may have, revive a judgment and the limitation for such an action is ten years (subs. 1, sec. 43,
such as the right to have an execution issued upon a favorable judgment. Code of Civil Procedure). The statute of limitations does not begin to run before the
cause of action accrues. There can, of course, be no cause of action for revival of a
The definition given by our Code of Civil Procedure of the word action has not live judgment and it stands to reason that an action cannot be brought until there is
escaped our attention, which definition describes an ordinarily action; but this a cause of action, namely after the expiration of five years from the date of the
narrow meaning of the word action is not the one to be given when it is desired to entry of the judgment which it is sought to revive.
define what is the meant by cause of action in section 43 of said Code. This is the
more true in this case because in the Spanish translation of said section 1, the word Assuming, therefore, that under the practice which, perhaps, has been generally
action in not defined, but instead the meaning of the word " juicio" is explained. followed here, the judgment in question might be considered entered as of the date
of February 3, 1909, the cause of action for its revival did not accrue until February

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