1. G.R. No. L-42799 March 16, 1976 HELD: YES.
respondent court has jurisdiction to determine the issue of
RAFAEL R. RECTO petitioner,
vs.
HON. JUDGE FRANCISCO DE LA ROSA, PRESIDING JUDGE OF THE COURT OF
FIRST INSTANCE OF RIZAL, PASAY CITY BRANCH VII and AURORA R. DE
BARRERA, and CALIXTO ZALDIVAR, respondents.
FACTS: Main controversy Batangas real property; Don Claro Recto as the
counsel, won, issued an order requiring RD to annotate the title as attorneys
charging lien; contingent fee of thereof
Property was occupied by the Municipality of Batangas without agreement
with either Villanueva or his lawyer.
Villanueva then conveyed the property together with all his rights thereon to
his daughter, Pacita Villanueva
Turns out that a contract of sale on installment was entered into betweel
Pacita and herein petitioner and City of Batngas and BatangasCity School
Board; also, cancellation of lien in favor of Don Claro. Upon learning, private
respondent,, widow of Don Claro filed a petition praying for an order settling
aside the order of cancellation of the charging lien and restoring the same,
removing the petitioner as administrator and to account for the proceeds of
the sale.
Petitioner filed a motion. The thrust of said motion and motion opposition
was that the controversy was between mother and son and no earnest effort
to settle the same amycably had been made that the probate court had no
jurisdiction to determine the validity of the documents executed by and
among the heirs of Don Claro, including petitioner and Doa Aurora, which
said petitioner claims to be the basis of his assertion of ownership over the
charging lien or the corresponding attorney's fees of Don Claro in question.
Private respondent's counsel took the opposite view. Resolving the issues
thus raised by the parties, respondent court issued the first impugned order
of November 5, 1975 thus:
(a) that the said "URGENT PETITION" is nothing more than an
incident in the above entitled Special Proceeding and
(b) that this Court has jurisdiction over the aforesaid incident
notwithstanding the fact that it has already approved the
"PROJECT OF PARTITION", dated August 5, 1966, in this said
Special Proceedings.
--- The settlement proceedings of the estate of Don Claro has already been
practically closed by a partition approved by the respondent court, and that
approval has long been final. Now comes the widow and claims that a certain
property belonging to the estate, in the form of attorney's fees already
converted into real property, belongs to the estate and yet was not included
in the partition evidently because it has been disposed of or is being disposed
of by the administrator without the knowledge and consent of the other
heirs, including herself, but the administrator claims, on the other hand, that
his disposition thereof was made by him by virtue of certain documents,
among them a quitclaim executed by no less than his mother, the widow of
the deceased, respondent Doa Aurora, but the latter denies the due
execution and legal efficacy of such quit claims adversly these premises, it is
plain that the controversy between the parties can be settled only in an
appropriate action, since the issue involved is essentially the ownership of
the property in dispute between the estate and an heir who claims adverse
ownership thereof on the basis of an alleged settlement among all the heirs.
ISSUE: WON the probate may take cognizance of issues of ownership
ownership between the parties, regardless of whether or not Section I (j) of
Rule 16 or Article 222 of the Civil Code has been complied with, and
respondent court is hereby enjoined permanently from taking cognizance of
said issue.
2. G.R. No. L-66620 September 24, 1986
REMEDIO V. FLORES, petitioner,
vs.
HON. JUDGE HEILIA S. MALLARE-PHILLIPPS, IGNACIO BINONGCAL &
FERNANDO CALION, respondents.
FACTS
Flores sued the resps for the collection of sum of money with the RTC
The first cause of action alleged in the complaint was against Ignacio
Binongcal for refusing to pay the amount of P11,643 representing cost of
truck tires which he purchased on credit from Flores on various occasions
from August to October, 1981;
The second cause of action was against resp Fernando Calion for allegedly
refusing to pay the amount of P10,212 representing cost of truck tires which
he purchased on credit from pet on several occasions from March, 1981 to
January, 1982.
Binongcal filed a MTD on the ground of lack of jurisdiction since the amount
of the demand against said resp was only P11,643.00, and under Section
19(8) of BP129 the RTC shall exercise exclusive original jurisdiction if the
amount of the demand is more than P20K.
Although another person, Fernando Calion, was allegedly indebted to pet in
the amount of P10,212.00, his obligation was separate and distinct from
that of the other resp. Calion joined in moving for the dismissal of the
complaint.
RTC dismissed the complaint.
ISSUE
WON the trial court correctly ruled on the application of the permissive
joinder of parties
ruling
The lower court has jurisdiction over the case following the "novel" totality
rule introduced in Section 33(l) of BP129 and Section 11 of the Interim Rules.
Section 33(l) of BP129
That where there are several claims or causes of action between the same
or different parties, embodied in the same complaint, the amount of the
demand shall be the totality of the claims in all the causes of action,
irrespective of whether the causes of action arose out of the same or
different transactions. ...
Section 11 of the Interim Rules
Application of the totality rule. In actions where the jurisdiction of the court is
dependent on the amount involved, the test of jurisdiction shall be the
aggregate sum of all the money demands, exclusive only of interest and
costs, irrespective of WON the separate claims are owned by or due to
different parties. If any demand is for damages in a civil action, the amount
thereof must be specifically alleged.
former rule under Section 88 of the Judiciary Act of 1948
Where there are several claims or causes of action between the same
parties embodied in the same complaint, the amount of the demand shall be
the totality of the demand in all the causes of action, irrespective of whether
the causes of action arose out of the same or different transactions; but
where the claims or causes of action joined in a single complaint are
separately owned by or due to different parties, each separate claim shall
furnish the jurisdictional test. ...
comparison of former and present rules
Present Rules Former Rules
Where a Totality of the claims in all Totality of the claims in all
plaintiff sues the causes of action the causes of action
a defendant irrespective of whether the irrespective of whether the
on two or COA arose out of the same COA arose out of the same
more or diff transactions. If the or diff transactions. If the
1
separate total demand exceeds P20K
causes of RTC has jurisdiction
action
If the causes of action are
separate and independent,
their joinder in one
complaint is permissive and
not mandatory, and any
cause of action where the
amount of the demand is
20K or less may be the
subject of a separate
complaint filed with a
metropolitan or MTC.
Two or more Where the claims or causes
plaintiffs of action joined in a single
having a complaint are separately
separate owned by or due to
causes of different parties, each
action against separate claim shall furnish
a defendant the jurisdictional test
join in a single The former rule applied
complaint only to cases of permissive
joinder of parties plaintiff.
However, it was also
applicable to cases of
permissive joinder of
parties defendant.
3. BAYANG VS. CA
total demand exceeds P20K Issue:
RTC has jurisdiction
Whether or not the judgment on the 1st case (civil case no. 1892) constitutes
If the causes of action are res judicata as to bar civil case 2589.
separate and independent,
their joinder in one
complaint is permissive and
not mandatory, and any
cause of action where the Rulings:
amount of the demand is
20K or less may be the Yes.
subject of a separate
complaint filed with a
metropolitan or MTC.
The causes of action in A long line of decisions has consistently held that for res judicata to apply: a)
favor of the two or more the former judgment must be final; b) it must have been rendered by a court
plaintiffs or against the two
having jurisdiction over the subject matter and the parties; c) it must be a
or more defendants should
arise out of the same judgment on the merits; and d) there must be between the first case and the
transaction or series of second case identity of parties, identity of subject matter and Identity of
transactions and there cause of action.
should be a common
question of law or fact, as
provided in Section 6 of
Rule 3. The decision in Civil Case No. 1892 became final and executory on February
2, 1978. There is no dispute that the trial court which rendered that decision
had jurisdiction over the subjectmatter and the parties to the proceeding.
The case was tried on the merits. The parties to Civil Case No. 1892 and the
subsequent Civil Case No. 2589 are the same petitioner and private
respondent now before us.

G.R. NO. 53564

The petitioner would draw a distinction between the land in dispute in Civil
FEBRUARY 27, 1987 Case No. 1892 and the income from that land being claimed in Civil Case
No. 2589. But that is in our view splitting hairs to split a cause of action.
The subjectmatter is essentially the same in both cases as the income is
only a consequence or accessory of the disputed property. We cannot agree
Facts:
that there are involved here two causes of action calling for two separate
cases. The claim for the income from the land was incidental to, and should
Petitioner Juan Bayang filed a complaint for quieting of title with damages
have been raised by Bayang in his earlier claim for, ownership of the land.
against Benigno Biong in the Court of First Instance of Surigao del Norte,
Branch 1, docketed as Civil Case No. 1892. While the case was pending, Biong
succeeded in dispossessing the plaintiff of the land in question and remained
there until January 25, 1978. On February 21, 1972, the case was decided in
We are not unmindful of the argument that affirmance of the challenged
favor of Biong, but the Court of Appeals, reversed the trial court. This
decision of the respondent court will result in the unjust enrichment of Biong
decision became final.
at the expense of Bayang. This assumes, of course, that the petitioner could
have proved his right to the income he now claims belatedly. The point is
that he did not make the proper claim at the proper time and in the proper
proceedings, and he cannot do it now. Whatever right he might have had is
On February 6, 1978, Bayang filed a second case, docketed as Civil Case No.
now deemed waived because of his neglect.
2589, with the CFI of Surigao del Norte, Branch II, seeking to recover from
Biong the incomes earned from the same land from 1970 up to the quarterly
incomes from 1978 until the said land was delivered to the plaintiff. On
August 16, 1978, Biong filed a motion for summary judgment, reiterating the
affirmative defense of res judicata raised in his answer insofar as it related to VILLEGAS vs. CA Sec. 16, Rule 3
the incidents concerning the case prior to January 25, 1978. An opposition to
this motion was duly filed by Bayang. G.R. No. 82562; G.R. No. 82592 (April 11, 1997)

FACTS: This case originated from a libel suit led by then Assemblyman
Antonio V. Raquiza againstthen Manila Mayor Antonio J. Villegas, who
The trial court, after considering the arguments of the parties, granted the allegedly publicly imputed to him acts constituting violations of the Anti-
motion and rendered a summary Graft and Corrupt Practices Act. He did this on several occasions

judgment on October 30, 1978. The said decision was sustained by the Court (a) a speech before the Lions Club
of Appeals.
(b) public statements in Manila which was coupled with a radio-TV interview;
and
2
(c) a public statement shortly prior to his appearance before the Senate
Committee on Public Works. The Committee, however, observed that all the
allegations in the complaint were based mainly on the uncorroborated
testimony of a certain Pedro U. Fernandez, whose credibility turned out to be
highly questionable. Villegas also failed to submit the original copies of his
documentary evidence. Thus, after thorough investigation, Raquiza was
cleared of all charges by the Committee. An information for libel was led by
the Oce of the City Fiscal of Manila with the then Court of First Instance of
Manila against Villegas. After losing in the 1971 elections, Villegas left for the
United States where he stayed until his death. Nevertheless, trial proceeded
in absentia , by the time of his death in 1984, the prosecution had already
rested its case. Two months after notice of his death, the court issued an
order dismissing the criminal aspect of the case but reserving the right to
resolve its civil aspect. Judge Obien rendered judgment dismissing the
criminal aspect of the case but reserved the right to resolve the civil aspect
by ordering the estate of Villegas to pay plainti. The heirs of Villegas (the
Heirs), through their fathers counsel, Atty. Norberto Quisumbing, appealed
the decision on these three main ground: Whether the trial court, three
months after notice of the death of the accused and before his counsel could
le a memorandum in his behalf, could validly render judgment in the case?
Whether, in the absence of formal substitution of parties, the trial court
could validly render judgment against the heirs and estate of a deceased
accused? The Court of Appeals rendered a decision arming the trial courts
judgment.
ISSUE: Did the death of the accused before nal judgment extinguish his civil
liability?
HELD:NO Death of the accused pending appeal of his conviction extinguishes
his criminal liability as wellas the civil liability based solely thereon. As opined
by Justice Regalado, in this regard, thedeath of the accused prior to nal
judgment terminates his criminal liability and only the civilliability directly
arising from and based solely on the oense committed, i.e., civil liability
exdelicto in senso strictiore. Corollarily, the claim for civil liability survives
notwithstanding the death of (the) accused, if thesame may also be
predicated on a source of obligation other than delict. Where the civil liability
survives, as explained in Number 2 above, an action for recovery
thereformay be pursued but only by way of ling a separate civil action The
source of Villegas civil liability in the present case is the felonious act of libel
he allegedlycommitted. Yet, this act could also be deemed a quasi-delict
within the purview of Article 33 inrelation to Article 1157 of the Civil Code.
The rule on substitution by heirs is not a matter of jurisdiction but a
requirement of due process.The rule on substitution was crafted to protect
every partys right to due process. It wasdesigned to ensure that the
deceased party would continue to be properly represented in thesuit
through his heirs or the duly appointed legal representative of the estate.
G.R. No. L-60544 May 19, 1984
ARSENIO FLORENDO, JR., MILAGROS FLORENDO and BEATRIZ FLORENDO,
petitioners,
vs.
HON. PERPETUA D. COLOMA, Presiding Judge of Branch VII, City Court of
Quezon City; GAUDENCIO TOBIAS, General Manager, National Housing
Authority; Registrar of Deeds for Quezon City; WILLIAM R. VASQUEZ and
ERLINDA NICOLAS, respondents.
FACTS:
The issue in this petition is whether petitioners Florendos, heirs of Adela
Salindon have the right to substitute the original petitioner Adela Salindon.
The original case is about the ejectment case filed by Adela Salindon against
William Vazquez and Silverio Nicolas. The ejectment case originated from the
Adela Salindon v. William Vasquez and Silverio Nicolas case where the court
adjudged the Vazquez and Nicolas as the owner of the land bought by
Salindon with the Philippines Homesite and Housing Corporation. This was
appealed by Salindon claiming that the parties are squatters and that the
RTC has no jurisdiction over the matter as the same is within the PHHC (now
NHA).
On December 11, 1976, Salindon died. There was, however, no substitution
of party; hence Salindon continued to be the appellant in the appealed case.
The deceased Salindon continued to be an adverse party. Meanwhile, after
Salindon's death, her heirs settled her estate and the subject lot were
transferred with a new Transfer Certificate of Title to the petitioners.
The petitioners challenge the proceeding in the Court of Appeals after the
death of the plaintiff-appellant Adela Salindon. They are of the opinion that
since there was no legal representative substituted for Salindon after her
death, the appellate court lost its jurisdiction over the case and
consequently, the proceedings in the said court are null and void.
ISSUE: Whether or not the court lost its jurisdiction after the death of the
original plaintiff Adela Salindon?
HELD: NO. There is no dispute that an ejectment case survives the death of a
party. The supervening death of plaintiff-appellant Salindon did not
extinguish her civil personality (Republic v. Bagtas, 6 SCRA 242; Vda. de
Haberes v. Court of Appeals, 104 SCRA 534).
Section 17, Rule 3 of the Rules of Court provides:
After a party dies and the claim is not thereby
extinguished, the court shall order upon proper notice,
the legal representative of the deceased to appear and
to be substituted for the deceased within a period of
thirty (30) days or within such time as may be granted
...
Section 16 of Rule 3 provides:
Whenever a party to a pending case dies ... it shall be
the duty of his attorney to inform the court promptly
of such death ... and to give the name and residence of
the executor, administrator, guardian or other legal
representative of the deceased
In the case at bar, Salindon's counsel after her death on December 11, 1976
failed to inform the court of Salindon's death. The appellate court could not
be expected to know or take judicial notice of the death of Salindon without
the proper manifestation from Salindon's counsel. In such a case and
considering that the supervening death of appellant did not extinguish her
civil personality; the appellate court was well within its jurisdiction to
proceed as it did with the case.
G.R. No. 91879 July 6, 1992
HEIRS OF MAXIMO REGOSO, petitioners,
vs.
THE HON. COURT OF APPEALS and BELEN CRUZ REGOSO, respondents.
FACTS:
The heirs of Maximo Regoso seek a review of the resolution dated October 9,
1989 of the Court of Appeals in CA-G.R. No. 20183 dismissing the appeal filed
by Regoso's former counsel.
The case involves an action for judicial partition of property with accounting
and damages (Civil Case No. 1464-V-81), which was filed by Belen Cruz-
Regoso against her husband, Maximo Regoso, in the Regional Trial Court,
Branch XV of Malolos, Bulacan.
On November 14, 1988, the trial court rendered a decision, the dispositive
portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of
the plaintiff and against the defendant, as follows:
1. Declaring the land situated at Sampalukan, Calvario,
Meycauayan, Bulacan as paraphernal of the plaintiff
and the building and improvement thereon as conjugal
property of the parties;
3
 2. Declaring the properties situated at Galas, Quezon
City and Echague, Isabela as conjugal properties of the
parties;
3. Requiring the defendant to render an accounting of
all income derived from the aforementioned
properties; and
4. Adjudging the defendant to pay the following
amounts:
a) P5,000.00 as moral damages;
b) P5,000.00 as exemplary
damages; and
c) P5,000.00 as attorney's fees.
With costs against the defendant. (p. 25, Rollo.)
Regoso died on January 17, 1985 after the case had been submitted for
decision, but he was not substituted as defendant by his heirs because,
apparently, the trial court was not informed of his death until the decision
had been promulgated on November 14, 1988.
On November 29, 1988, Regoso's counsel, Attorney Adriano Javier, Sr., filed a
notice of appeal which the trial court approved. The appeal was docketed in
the Court of Appeals as CA-G.R. No. 20183.
The plaintiff, Belen Cruz-Regoso, through counsel, moved to dismiss the
appeal on the ground that the deceased defendant ceased to have legal
personality and that Attorney Javier's authority to represent him was
terminated or expired upon his demise, hence, the notice of appeal filed by
said counsel was invalid, a worthless piece of paper.
The Court of Appeals issued a resolution on October 6, 1989, dismissing the
appeal. It held:
It is a well-established rule that a lawyer-client
relationship is terminated upon the death of the client.
The lawyer's authority to appear for his client
automatically ceases (5 Am. Jur. 282). The only
exceptions are when there is a contract for the
lawyer's services up to judgment, or when his fees are
on a contingent basis, and also when his appearance is
coupled with an interest (7 CJS 945, 946). Since not
one of the above exceptions obtains in this case, it is
obvious that when Attorney Javier filed the notice of
appeal after his client's death, he no longer had any
authority to appear for him. Hence, the notice of
appeal filed by him was a mere scrap of paper and
without any legal effect.
WHEREFORE, the instant appeal is hereby DISMISSED.
(pp.
27-28, Rollo.)
The Motion for reconsideration filed by the heirs' new counsel was likewise
denied by the Court of Appeals.
Hence, the present petition in which the petitioners, as heirs of the late
Maximo Regoso, allege that the Appellate Court erred in dismissing their
appeal and in not declaring that the judgment which the trial court rendered
after the death of said defendant, was null and void.
The petition has no merit.
Under the rules, it is the duty of the attorney for the deceased defendant to
inform the court of his client's death and to furnish the court with the names
and residences of the executor, administrator, or legal representative of the
deceased. Sections 16 and 17, Rule 3 of the Rules of Court provide:
Sec. 16. Duty of attorney upon death, incapacity, or
incompetency of party. Whenever a party to a
pending case dies, becomes incapacitated or
incompetent, it shall be the duty of his attorney to
inform the court promptly of such death, incapacity or
incompetency, and to give the name and residence of
his executor, administrator, guardian or other legal
representative.
Sec. 17. Death of party. After a party dies and the
claim is not thereby extinguished, the court shall order,
upon proper notice, the legal representative of the
deceased to appear and to be substituted for the
deceased, within a period of thirty (30) days, or within
such time as may be granted. If the legal
representative fails to appear within said time, the
court may order the opposing party to procure the
appointment of a legal representative of the deceased
within a time to be specified by the court, and the
representative shall immediately appear for and on
behalf of the interest of the deceased. The court
charges involved in procuring such appointment, if
defrayed by the opposing party, may be recovered as
costs. The heirs of the deceased may be allowed to be
substituted for the deceased, without requiring the
appointment of an executor or administrator and the
court may appoint guardian ad litem for the minor
heirs.
The rules operate on the presumption that the attorney for the deceased
party is in a better position than the attorney for the adverse party to know
about the death of his client and to inform the court of the names and
addresses of his legal representative or representatives.
In the case at bar, no such notice of death, nor a motion for substitution of
the deceased defendant, was ever made. Hence, the trial court could not be
expected to know or take judicial notice of the death of defendant, Maximo
Regoso, without the proper manifestation from his counsel. It must be
remembered that the fault or negligence was Attorney Javier's alone
(Llantero vs. Court of Appeals, 105 SCRA 609; Chittick vs. Court of Appeals,
166 SCRA 219; Pulido vs. CA, 122 SCRA 63).
The supervening death of the defendant, Maximo Regoso, did not extinguish
his wife's action for partition of their conjugal assets, for it is an action that
survives. The trial of the case on the merits was already finished before the
defendant died. Since it was not informed about that event, the trial court
may not be faulted for proceeding to render judgment without ordering the
substitution of the deceased defendant. Its judgment is valid and binding
upon the defendant's legal representatives or successors-in-interest, insofar
as his interest in the property subject of the action is concerned (Florendo, et
al. vs. Coloma, et al., 129 SCRA 304).
Attorney Javier's appeal from the decision of the trial court was correctly
dismissed by the appellate court for upon the death of Maximo Regoso,
Attorney Javier's authority to represent him also expired. Then notice of
appeal, which Attorney Javier filed on behalf of the decedent was an
unauthorized pleading, hence, invalid (Barrameda, et al. vs. Barbara, et al., 90
Phil. 718; Caseas vs. Rosales, 19 SCRA 462).
However, the validity of the judgment of the trial court was not affected by
the defendant's demise for the action survived. The decision is binding and
enforceable against the successors-in-interest of the deceased litigant by title
subsequent to the commencement of the action [Section 49(b) Rule 39, Rules
of Court; Florendo, et al. vs. Coloma, et al., 129 SCRA 304].
4
This is in line with the following provisions of the Rules of Court:
Sec. 49. EFFECT OF JUDGMENTS.The effect of a
judgment or final order rendered by a court or judge of
the Philippines, having jurisdiction to pronounce the
judgment or order, maybe as follows:
xxx xxx xxx
(b) In other cases the judgment or order is, with
respect to the matter directly adjudged or as to any
other matter that could have been raised in relation
thereto, conclusive between the parties and their
successors-in-interest by title subsequent to the
commencement of the action or special proceeding,
litigating for the same thing and under the same title
and in the same capacity. (Section 49(b), Rule 39, New
Rules of Court.)
Thus, a judgment in an ejectment case may be enforced not only against
defendants therein but also against the members of their family, their
relatives, or privies who derived their right of possession from the
defendants (Ariem vs. De los Angeles, 49 SCRA 343). The same rule applies to
the successors-in-interest of a deceased party in an action that survives, if
the decision should go against the latter (Florendo, Jr. vs. Coloma, 129 SCRA
304, 305.)
WHEREFORE, the petition for review is hereby DENIED.
SO ORDERED.
230 Phil. 172
PARAS, J.:
This is a petition for review on certiorari seeking the reversal of: (a) the
Order dated January 26, 1978 of the Court of First Instance of Rizal, Q.C. Br.
XVIII deferring the resolution of the Motion to Dismiss until the trial on the
merits, for the reason that the grounds relied upon were not indubitable
(Rollo, p. 56); (b) the Order dated March 20, 1978 denying the Motion for
Reconsideration of aforesaid Order (Rollo, pp. 59-60).
The facts of the case are is follows:
Petitioner-developer (CAPITALIST, for short) and respondents-owners
entered into a Subdivision Contract, (Annex "A") on October 7, 1956, (pp. 25-
28), Rollo); which provides among other things that the CAPITALIST:
shall have full possession of the land situated in Gumaca,
Quezon Province, in order to survey, sub-divide it into
commercial and residential lots, and eventually sell them
(1) after the introduction of improvements thereon as required
by the National Planning Commission as follows:
The sub-division shall be provided with 10 to 15 meter-
wide avenues, but no road shall be less than 10 meters
"a) wide.
The sub-division shall be provided with water and
electrical facilities, all at the expense of the CAPITALIST,
(b) if the present electrical plant so permits.
The sub-division shall be provided with an adequate
(c) drainage system.
(d) All other improvements required by the National
Planning Commission."
shall bear all the expenses in connection therewith including
payment of real estate taxes and the above-mentioned
(2) impositions while said lots remain unsold and
shall have full and exclusive power and authority and shall
exercise full discretion in the development and sale of the
(3)
lots in the sub-division including the fixing of the prices
thereof.
On the other hand, the OWNERS: (1) shall retain title over the land and all
sales shall be made in their names; (2) shall hold in reserve 9,622 sq.m., the
location of which shall be determined by both parties and (3) shall receive as
fixed participation 40% of the gross receipts of the subdivision based on the
actual prices of the sales (Rollo, pp. 26-28).
On September 9, 1977, the private respondents as plaintiffs filed their
complaint in Civil Case No. 23788 for accounting, breach of contract and
damages and termination of contract against the petitioner before the Court
of First Instance of Rizal, Branch I, Quezon City, (p. 19, Rollo) alleging among
others that petitioner-developer failed to comply with his obligations
embodied in the subdivision contract, specifically, petitioner failed (a) to
construct avenues and roads 10 to 15 meters wide with water and electrical
facilities and an adequate drainage system; (b) to pay the tax assessments,
fees and impositions on the property and (c) to render full accounting of the
sales made for the determination the 40% share of the plaintiffs to the gross
cash receipts that will accrue to them. (Rollo, pp. 21-22).
Because of the alleged breach, private respondents demand the termination
of the contract and the turn over of all torrens titles to the lots, all contracts
of sale, records and other pertinent papers and claim P20,000.00 as moral
damages, P20,000.00 exemplary damages and P16,000.00 as compensatory
damages including attorney's fees and P30,000.00 for unrealized
profits. (Rollo, pp. 22-23).
The defendant below upon summons and within the reglementary period to
file responsive pleading filed his Motion to Dismiss the complaint on the
following grounds: (1) venue is improperly laid; (2) no valid cause of action;
and (3) the action is barred by estoppel and laches. (pp. 31-41, Rollo).
On January 26, 1978, respondent Judge in his first assailed Order deferred
resolution of the motion to dismiss until the trial on the merits. (Rollo, p. 56).
The petitioner, defendant below, filed his motion for reconsideration of
aforesaid Order which motion was denied by respondent Judge in his Order
dated March 20, 1978 (Rollo, pp. 59-60).
Hence, this petition.
The private respondents in compliance with the Court's Resolution of June 7,
1978 (Rollo, p. 63) filed their Comment. (Rollo, pp. 67-70).
The First Division of this Court in its Resolution dated July 24, 1978 gave due
course to the petition requiring both parties to file simultaneously their res-
pective Memoranda within thirty (30) days from notice. (p. 72,
Rollo). Petitioner filed his Memorandum on October 2, 1978 (Rollo, pp. 79-
87) while private respondents failed to file their Memorandum.
Hence this case was submitted for decision without private respondents'
memorandum in the resolution of November 10, 1978, (Rollo, p. 89).
The main issue in this case is whether or not the action brought by
respondent-owners is a real action as contended by the petitioner or a
personal action as held by the respondent court. (Order dated March 20,
1978, Rollo, pp. 59-60).
The petition is impressed with merit.
The records show that the property in question is situated in Gumaca,
province of Quezon and the subdivision contract upon which the complaint
5
was predicated was also executed in Gumaca, Quezon. As correctly stated by
petitioner, although the complaint does not pray explicitly for recovery of
possession, such is the necessary consequence of the cancellation or
rescission (resolution) of the Subdivision Contract. The termination of said
contract entails the delivery of possession of the land, at least the unsold lots
to private respondents as well as the Torrens Titles thereof. The demand for
damages, aside from being merely incidental to the action, arises from
private respondents' interests in the land. Proper venue should therefore be
laid in Quezon Province where the land is situated. (Rollo, pp. 83-84).
This issue has already been decided by this Court in an analogous case, De
Jesus v. Coloso (1 SCRA 274 [1961] where the Court ruled that where it is
alleged that the contract has been breached, a reason for which the other
party demands its rescission (resolution) and the return of the property
subject thereof, the action is an action for the recovery of the possession of
land and in accordance with Section 3 of Rule 5 of the Rules of Court, the
action should be filed where the property is situated. This ruling was
reiterated in a recent decision of this Court, Punsalan, Jr. vs. Vda. de
Lacsamana (121 SCRA 336 [1983]).
The rules of venue are dictated by convenience. They are precisely
constituted to forstall conflicting decisions by different courts on the issue of
ownership and possession. "To sanction respondents' flagrant evasion of the
rule on venue of a real action is to tolerate a palpable manipulatory abuse or
perversion of the right to litigate." Lim vs. Argel, G.R. No. L-42800, July 30,
1979, 92 SCRA 238, 243-244 [1979]).
PREMISES CONSIDERED, the assailed Orders are SET ASIDE, and the
complaint is hereby DISMISSED on the ground of improper venue. Costs
against private respondents.
SO ORDERED.
DACOYCOY V. IAC G.R. # 74854
FACTS
On March 22, 1983, Dacoycoy, a resident of Balanti, Cainta, Rizal,
filed before the Rizal RTC, a complaint against private respondent
de Guzman praying for the annulment of 2 deeds of sale involving
a parcel of riceland in Barrio Estanza, Lingayen, Pangasinan, the
surrender of the produce thereof and damages for private
respondent's refusal to have said deeds of sale set aside upon
petitioner's demand.
On May 25, 1983, before summons could be served on de
Guzman, the RTC Executive Judge issued an order requiring
counsel for petitioner to confer with respondent trial judge on the
matter of venue. After said conference, the RTC dismissed the
complaint on the ground of improper venue.
o It found, based on the allegations of the complaint, that
petitioner's action is a real action as it sought not only the
annulment of the aforestated deeds of sale but also the
recovery of ownership of the subject parcel of riceland
located in Pangasinan, outside its territorial jurisdiction.
Petitioner appealed to the IAC, which affirmed the order of
dismissal of his complaint.
ISSUE
W/N the trial court may motu proprio dismiss a complaint on the
ground of improper venue?? NO
HELD
The motu proprio dismissal of petitioner's complaint by the RTC
on the ground of improper venue is plain error, attributable to its
inability to distinguish between jurisdiction and venue.
Questions or issues relating to venue of actions are basically
governed by Rule 4 of the Revised Rules of Court. It is said that
the laying of venue is procedural rather than substantive. It
relates to the jurisdiction of the court over the person rather
than the subject matter. Provisions relating to venue establish a
relation between the plaintiff and the defendant and not
between the court and the subject matter. Venue relates to trial
not to jurisdiction, touches more of the convenience of the
parties rather than the substance of the case.
Jurisdiction treats of the power of the court to decide a case on
the merits; while venue deals on the locality, the place where the
suit may be had.
In Luna vs. Carandang, we emphasized:
1. A Court of First Instance has jurisdiction over suits
involving title to, or possession of, real estate wherever
situated in the Philippines, subject to the rules on venue
of actions;
2. Rule 4, Section 2, of the Rules of Court requiring that an
action involving real property shall be brought in the
Court of First Instance of the province where the land lies
is a rule on venue of actions, which may be waived
expressly or by implication.
In the instant case, even granting for a moment that the action of
petitioner is a real action, respondent trial court would still have
jurisdiction over the case, it being a regional trial court vested
with the exclusive original jurisdiction over "all civil actions
which involve the title to, or possession of, real property, or any
interest therein . . ." in accordance with Section 19 (2) of Batas
Pambansa Blg. 129. With respect to the parties, there is no
dispute that it acquired jurisdiction over the plaintiff Dacoycoy,
the moment he filed his complaint for annulment and damages.
Respondent trial court could have acquired jurisdiction over the
defendant either by his voluntary appearance in court and his
submission to its authority, or by the coercive power of legal
process exercised over his person.
o Although petitioner contends that, he requested the City
Sheriff of Olongapo City or his deputy to serve the summons
on de Guzman at his residence, it does not appear that said
service had been properly effected or that private
respondent had appeared voluntarily in court or filed his
answer to the complaint. At this stage, respondent trial
court should have required petitioner to exhaust the various
alternative modes of service of summons under Rule 14 of
the Rules of Court, i.e., personal service under Section 7,
substituted service under Section 8, or service by publication
under Section 16 when the address of the defendant is
unknown and cannot be ascertained by diligent inquiry.
o Dismissing the complaint on the ground of improper venue
is certainly not the appropriate course of action at this stage
of the proceeding, particularly as venue, in inferior courts as
well as in the CFI (now RTC), may be waived expressly or
impliedly. Where defendant fails to challenge timely the
venue in a motion to dismiss as provided by Section 4 of
Rule 4 of the Rules of Court, and allows the trial to be held
and a decision to be rendered, he cannot on appeal or in a
special action be permitted to challenge belatedly the
wrong venue, which is deemed waived.
Thus, unless and until the defendant objects to the venue in a
motion to dismiss, the venue cannot be truly said to have been
improperly laid, as for all practical intents and purposes, the
venue, though technically wrong, may be acceptable to the
parties for whose convenience the rules on venue had been
devised. The trial court cannot pre-empt the defendant's
prerogative to object to the improper laying of the venue by
motu proprio dismissing the case.
IAC decision is reversed and set aside. The complaint before the RTC is
revived and reinstated.
Unimaster Conglomeration Inc. vs. Court of Appeals
FACTS:
1. Kubota Agri-Machinery Philippines, Inc. and Unimasters Conglomeration,
Inc. entered into a Dealership Agreement for Sales and Services of the
former's products in Samar and Leyte Provinces.
6
2. The Dealership Agreement contained a stipulation that All suits arising
out of this Agreement shall be filed with / in the proper Courts of Quezon
City
3. Five years later, Umimasters filed an action in the RTC of Tacloban against
Kubota, Reynaldo Go and Metrobank for damages and breach of contracts,
and injunction with prayer for temporary restraining order.
4. Kubota filed two motions One for the dismissal of the case on the ground
of improper venue .The other prayed for the transfer of the injunction
hearing its counsel was not available.
5. The court issued an order allowing the issuance of preliminary injunction
and a motion denying the motion to dismiss on the reason that Umimasters
place of business is in Tacloban City while Kubotas principal place of
business is in Quezon City. In accord with the the Rules of Court, the proper
venue would either be Quezon City or Tacloban City at the election of the
plaintiff. Hence, the filing in the RTC of Tacloban is proper.
6. Kubota appealed both orders on the grounds they were issued with grave
abuse of discretion in a special action for certiorari and prohibition filed with
the CA. Kubota asserted that RTC of Tacloban had no jurisdiction was
improperly laid.
7. The Court of Appeals decided in favor of Kubota and it held that: the
stipulation respecting venue in its Dealership Agreement with UNIMASTERS
did in truth limit the venue of all suits arising thereunder only and exclusively
to the proper courts of Quezon City
8. Subsequently, Unimasters filed a motion for reconsideration but was
turned down by the appellate court.
ISSUE:
WON the venue stipulations in a contract has the effect of limiting the venue
to a specified place.
RULING: NO. The Polytrade doctrine was applied in the case at bar. This
doctrine enunciated that as long as the stipulation does not set forth
qualifying or restrictive words to indicate that the agreed place alone and
none other is the venue of the action, the parties do not lose the option of
choosing the venue
Absence of qualifying or restrictive words, venue stipulations in a contract
should be considered merely as agreement on additional forum, not as
limiting venue to the specified place. Unless the parties make very clear, by
employing categorical and suitably limiting language, that they wish the
venue of actions between them to be laid only and exclusively at a definite
place, and to disregard the prescriptions of Rule 4, agreements on venue are
not to be regarded as mandatory or restrictive, but merely permissive, or
complementary of said rule. Absent additional words and expressions
definitely and unmistakably denoting the parties' desire and intention that
actions between them should be ventilated only at the place selected by
them, Quezon City -- or other contractual provisions clearly evincing the
same desire and intention -- the stipulation should be construed, not as
confining suits between the parties only to that one place, Quezon City, but
as allowing suits either in Quezon City or Tacloban City, at the option of the
plaintiff (UNIMASTERS in this case).
Meliton vs. Court of Appeals
FACTS:
1. Nelia Ziga filed a complaint against Lydia Meliton for rescission of a
contract of lease over a parcel of land with RTC of Naga City.
2. In her answer, Lydia Meliton denied the material avernments of the
complaint and setting up 3 counterclaims for the recovery of the value of her
demolished kitchenette in leased land, and for the improvements, and
damages.
3. The court dismissed the complaint based on the motion of Ziga contending
that the cause of action had already been moot and academic by the
expiration of the leased contract.
4.Melitons counterclaim s were also dismissed for non-payment of docket
fees. The trial court said that it had not acquired jurisdiction because of the
non-payment of the docket fees.
5. Spouses Lydia Meliton and Virgilio Meliton filed a complaint against Ziga
for recovery of the same amounts involved and alleged in their counterclaims
in the previous case and assigned to Branch 27 of the same trial court.
6.Ziga filed a motion to dismiss the complaint on the ground that the cause
of action was barred by a prior judgment in the previous case. But the court
denied her motion to dismiss on the ground that the dismissal of the
Meliton's counterclaims in the previous case is not an adjudication on the
merits because the court did not acquire jurisdiction over the counterclaims
for failure of Meliton to pay the docket fees, and for this reason, the said
dismissal does not constitute a bar to the filing of the later complaint. She
also filed a motion for reconsideration but the same was subsequently
denied.
7. Aggrieved, Ziga filed a petition for certiorari filed a petition
for certiorari with the SC. Then, the higher court, in its resolution, referred
the case to the Court of Appeals for proper determination and disposition
pursuant to Section 9, paragraph 1, of B.P. Blg. 129.
8. The CA found that Melitons counterclaim The Melitons' counterclaim
against the Ziga is a compulsory counterclaim, it having arisen out of or being
necessarily connected with the transaction or occurrence subject matter of
Zigas complaint. The failure of the Melitons to seek a reconsideration of the
dismissal of their counterclaim or to take an appeal rendered the dismissal
final; and such dismissal barred the prosecution of their counterclaim by
another action.
9. The Melitons challenged the judgment of the CA and praying for its
annulment.
ISSUES:
1. WON the counterclaims of the petitioners are compulsory in nature.
2. WON the petioners are barred from asserting their counterclaims having
failed to seek reconsideration or to take an appeal from the order of
dismissal of the same.
RULING:
1. YES. The counterclaims of the petitioners are compulsory in nature.
Section 4 of Rule 9 of the Rules of Court enumerates the requisites
compulsory counterclaim, to wit;(a) it arises out of, or is necessarily
connected with, the transaction or occurrence which is the subject matter of
the opposing party's claim; (b) it does not require for its adjudication the
presence of third parties of whom the court cannot acquire jurisdiction; and
(c) the court has jurisdiction to entertain the claim.
7
It has been postulated that while a number of criteria have been advanced
for the determination of whether the counterclaim is compulsory or
permissive, the one compelling test of compulsoriness is the logical
relationship between the claim alleged in the complaint and that in the
counterclaim, e.i., where conducting separate trials of the respective claims
of the parties would entail a substantial duplication of effort and time, as
where they involve many of the same factual and/or legal issues.
In the case at bar, all the requisites of a compulsory counterclaim are
present. The counterclaimsare logically related to the complaint. Private
respondent Zigas complaint was for rescission of the contract of lease due to
petitioner Lydia Meliton's breach of her obligations under the said contract.
On the other hand, petitioner's counterclaims were for damages for unlawful
demolition of the improvements. Both the claims of petitioners and private
respondent arose from the same contract of lease. To state it diffently, They
are offshoots of the same basic controversy between the parties, e.i., the
right of either to the possession of the property.
2. NO. The petitioners are not barred from asserting claims in a separate
suit.
While it is true,as stated in Section 4, Rule 9 of the Rules of Court, that a
counterclaim not set up shall be barred if it arises out of or is necessarily
connected with the transaction or occurrence that is the subject matter of
the opposing party's claim and does not require for its adjudication the
presence of third parties of whom the court cannot acquire jurisdiction,
cannot be applied to the case at bar.
Firstly, where a compulsory counterclaim is made the subject of a separate
suit, it may be abated upon a plea of auter action pendant or litis
pendentia and/or dismissed on the ground of res judicata, depending on the
stage or status of the other suit. The action in the case at bar cannot be
dismissed either on the ground of litis pendentia since there is no other
pending action between the same parties and for the same cause, nor on the
ground of res judicata. Also, the dismissal of the counterclaims of the
petitioners because of failure to pay docket fees does not constitute does not
constitute res judicata, there having been no consideration and adjudication
of the case on the merits.
Secondly, a reading of the order of dismissal will show that the trial court, in
dismissing the complaint of private respondent, did not intend to prejudice
the claims of petitioners by barring the subsequent judicial enforcement
thereof.
The failure of petitioners to seek reconsideration of or to take an appeal
from the order of dismissal of the counterclaim should not prejudice their
right to file their claims in a separate action because they were thereby made
to understand and believe that their counterclaims were merely permissive
and could be the subject of a separate and independent action. Had the trial
court correctly specified that petitioners' counterclaims were compulsory,
petitioners could have objected to the dismissal sought by private
respondent on the ground that said counterclaims could not remain pending
for independent adjudication
SANTO TOMAS UNIVERSITY HOSPITAL, petitioner vs. CESAR ANTONIO Y.
SURLA and EVANGELINE SURLA, respondents.
DECISION
VITUG, J.:
Can a compulsory counterclaim pleaded in an Answer be dismissed on
the ground of a failure to accompany it with a certificate of non-forum
shopping? This question is the core issue presented for resolution in the
instant petition.
First, a factual background.
On 26 December 1995, respondent spouses filed a complaint for
damages against petitioner Santo Tomas University Hospital with the
Regional Trial Court of Quezon City predicated on an allegation by the
spouses that their son, Emmanuel Cesar Surla, while confined at the said
hospital for having been born prematurely, had accidentally fallen from his
incubator on 16 April 1995 possibly causing serious harm on the child. The
case was raffled and assigned to Branch 226 of the Regional Trial Court of
Quezon City, presided over by the Hon. Leah S. Domingo-Regala, and there
docketed Civil Case No. Q-95-25977.
On 28 February 1996, petitioner hospital filed its Answer with
Compulsory Counterclaim asserting that respondents still owed to it the
amount of P82,632.10 representing hospital bills for Emmanuels
confinement at the hospital and making a claim for moral and exemplary
damages, plus attorneys fees, by reason of the supposed unfounded and
malicious suit filed against it.
On 21 March 1996, petitioner received a copy of respondents Reply to
Counterclaim, dated 12 March 1996, that sought, inter alia, the dismissal of
petitioners counterclaim for its non-compliance with Supreme Court
Administrative Circular No. 04-94 requiring that a complaint and other
initiatory pleadings, such as a counterclaim, cross-claim, third (fourt, etc.)
party complaint, be accompanied with a certificate of non-forum shopping.
In its Rejoinder to respondents Reply to Counterclaim, petitioner
contended that the subject circular should be held to refer only to a
permissive counterclaim, an initiatory pleading not arising out of, nor
necessarily connected with, the subject matter of the plaintiffs claim but not
to a compulsory counterclaim spawned by the filing of a complaint and so
intertwined therewith and logically related thereto that it verily could not
stand for independent adjudication. Petitioner concluded that, since its
counterclaim was compulsory in nature, the subject circular did not perforce
apply to it.[1]
In its Order of 22 March 1996, the trial court dismissed petitioners
counterclaim,it held:
Administrative Circular No. 04-94 provides; among others:
The complaint and other initiatory pleadings referred to and subject of this
Circular are the original civil complaint, counterclaim, cross-claim, third
(fourth, etc) party complaint, or complaint-in-intervention, petition or
application wherein a party asserts his claim on (sic) relief.
It will be noted that the counterclaim does not distinguish whether the same
should be permissive or compulsory, hence this Court finds that the
counterclaim referred to in said Circular covers both kinds.
WHEREFORE, the counterclaim of defendant is hereby DISMISSED. Let the
pre-trial of this case be set on May 14, 1996 at 2:00 oclock in the afternoon
xxx[2]
On 16 April 1996, petitioner filed before the same court an Omnibus
Motion seeking a clarification of the courts Order of 14 March 1996 denying
respondents Reply to Counterclaim and reconsideration of the 22nd March
1996 Order dismissing the compulsory counterclaim.[3] On 22 April 1996,
petitioner received a copy of the courts Order, dated 16 April 1996, which
pertinently read:
WHEREFORE, the Order dated March 14, 1996 is hereby clarified as follows:
xxxxxxxxx
The Reply to counterclaim filed by counsel for plaintiffs is hereby NOTED.
SO ORDERED.
8
"The Motion for Reconsideration of this Courts Order dated March 22, 1996
is hereby DENIED. The pre-trial conference set on May 14, 1996 will go on as
scheduled.[4]
Petitioner forthwith elevated the matter to the Court of Appeals by way of a
special civil action for certiorari under Rule 65, Revised Rules of Court,
asseverating grave abuse of discretion by public respondent in dismissing the
compulsory counterclaim and in espousing the view that Administrative
Circular No. 04-94 should apply even to compulsory counterclaims.
The Court of Appeals, in its Decision promulgated on 12 March 1997,
dismissed the petition for certiorari; it opined:
x x x the Supreme Court circular aforequoted requires without equivocation
that to the original civil complaint, counterclaim, cross-claim, third
(fourth,etc.) party complainant, or complaint-in-intervention, petition, or
application wherein a party asserts his claim for relief to be filed in all courts
and agencies other than the Supreme Court and the Court of Appeals must
be annexed and simultaneously filed therewith the required certification
under oath to avoid forum shopping or multiple filing of petitions and
complaints. Non-compliance therewith is a cause for the dismissal of the
complainant, petition, application or other initiatory pleading. Included in
such initiatory pleading is the defendants counterclaim, permissive or
compulsory.
A counterclaim partakes of the nature of a complaint and/or a cause of
action against the plaintiff in a case x x x, only this time it is the original
defendant who becomes the plaintiff. It stands on the same footing and is
tested by the same rules as if it were an independent action.[5]
In its present recourse, petitioner contends that
The Court of Appeals (has) committed serious, evident and palpable error in
ruling that:
5.1 THE SPECIAL CIVIL ACTION OF CERTIORARI UNDER RULE 65 OF THE
REVISED RULES OF COURT IS UNAVAILING. THE DISMISSAL OF THE
COMPULSORY COUNTERCLAIM BEING A FINAL ORDER, THE PETITIONER
SHOULD HAVE TAKEN AN APPEAL THEREFROM; AND
5.2 ADMINISTRATIVE CIRCULAR NO. 04-94 OF THIS HONORABLE
COURT LIKEWISE APPLIES TO BOTH KINDS OF COUNTERCLAIMS,
PERMISSIVE AND COMPULSORY.[6]
The petition is partly meritorious.
The appellate court ruled that the dismissal of the counterclaim, being
a final order, petitioners remedy was to appeal therefrom and, such appeal
being then available, the special civil action for certiorari had been
improperly filed.
The concept of a final judgment or order, distinguished form an
interlocutory issuance, is that the former decisively puts to a close, or
disposes of a case or a disputed issue leaving nothing else to be done by the
court in respect thereto. Once that judgment or order is rendered, the
adjudicative task of the court is likewise ended on the particular matter
involved.[7] An order is interlocutory, upon the other hand, if its effects would
only be provisional in character and would still leave substantial proceedings
to be further had by the issuing court in order to put the controversy to
rest.[8]
The order of the trial court dismissing petitioners counterclaim was a
final order since the dismissal, although based on a technicality, would
require nothing else to be done by the court with respect to the specific
subject except only to await the possible filing during the reglementary
period of a motion for reconsideration or the taking of an appeal therefrom.
As a rule, errors of judgment, as well as of procedure, neither relating
to the jurisdiction of the court nor involving grave abuse of discretion, are
not reviewable by the extraordinary remedy of certiorari.[9] As long as a court
acts within its jurisdiction and does not gravely abuse its discretion in the
exercise thereof, any supposed error committed by it will amount to nothing
more than an error of judgment reviewable by a timely appeal and not
assailable by a special civil action for certiorari.[10] This rule however, is not a
rigid and inflexible technicality.This Court has not too infrequently given due
course to a petition for certiorari, even when the proper remedy would have
been an appeal, where valid and compelling considerations could warrant
such a recourse.[11] Certiorari has been deemed to be justified, for instance,
in order to prevent irreparable damage and injury to a party where the trial
judge has capriciously and whimsically exercised his judgment, or where an
ordinary appeal would simply be inadequate to relieve a party from the
injurious effects of the judgment complained of.[12]
In the case at bar, an appeal from the dismissal of the counterclaim,
although not totally unavailable, could have well been ineffective, if not
futile, as far as petitioner is concerned since no single piece of evidence has
yet been presented by it, the opportunity having been foreclosed by the trial
court, on the dismissed counterclaim which could form part of the records to
be reviewed by the appellate court. The object of procedural law is not to
cause an undue protraction of the litigation, but to facilitate the adjudication
of conflicting claims and to serve, rather than to defeat, the ends of
justice.[13]
The opinion of this Court on the next issue persuades it to accept,
tested by the foregoing disquisition, the instant petition for its consideration.
The pertinent provisions of Administrative Circular No. 04-94 provide:
1 The plaintiff, petitioner, applicant or principal party seeking relief in the
complaint, petition, application or other initiatory pleading shall certify under
oath in such original pleading, or in a sworn certification annexed thereto
and simultaneously filed therewith, to the truth of the following facts and
undertakings: (a) he has not theretofore commenced any other action or
proceeding involving the same issues in the Supreme Court, the Court of
Appeals, or any other tribunal or agency; (b) to the best of his knowledge, no
such action or proceeding is pending in the Supreme Court, the Court of
Appeals, or any other tribunal or agency; (c) if there is any such action or
proceeding which is either pending or may have been terminated, he must
state the status thereof; and (d) if he should thereafter learn that a similar
action or proceeding has been filed or is pending before the Supreme Court,
the Court of Appeals or any other tribunal or agency, he undertakes to report
that fact within five (5) days therefrom to the court or agency wherein the
original pleading and sworn certification contemplated here have been filed.
The complaint and other initiatory pleadings referred to and subject of this
Circular are the original civil complaint, counterclaim, cross-claim third
(fourth, etc.) party complaint or complaint-in-intervention, petition, or
application wherein a party asserts his claim for relief. (Emphasis supplied)
It bears stressing, once again, that the real office of Administrative
Circular No. 04-94, made effective on 01 April 1994, is to curb the
malpractice commonly referred to also as forum-shopping. It is an act of a
party against whom an adverse judgment has been rendered in one forum of
seeking and possibly getting a favorable opinion in another forum, other than
by appeal or the special civil action of certiorari, or the institution of two or
more actions or proceedings grounded on the same cause on the supposition
tha tone or the other court would make a favorable disposition.[14] The
language of the circular distinctly suggests that it is primarily intended to
cover an initiatory pleading or an incipient application of a party asserting a
claim for relief.[15]
It should not be too difficult, the foregoing rationale of the circular
aptly taken, to sustain the view that the circular in question has not, in fact,
been contemplated to include a kind of claim which, by its very nature as
being auxiliary to the proceedings in the suit and as deriving its substantive
and jurisdictional support therefrom, can only be appropriately pleaded in
the answer and not remain outstanding for independent resolution except by
the court where the main case pends. Prescinding from the foregoing,
the provisio in the second paragraph of Section 5, Rule 8 of the 1997 Rules on
Civil Procedure, i.e., that the violation of the anti-forum shopping rule shall
not be curable by mere amendment x x x but shall be cause for the dismissal
of the case without prejudice, being predicated on the applicability of the
9
need for a certification against forum shopping, obviously does not include a
claim which cannot be independently set up.
Petitioner, nevertheless, is entitled to a mere partial relief. The so
called counterclaim of petitioner really consists of two segregative parts: (1)
for unpaid hospital bills of respondents son, Emmanuel Surla, in the total
amount of P82,632.10; and (2) for damages, moral and exemplary, plus
attorneys fees by reason of the alleged malicious and unfounded suit filed
against it.[16] It is the second, not the first, claim that the Court here refers to
as not being initiatory in character and thereby not covered by the provisions
of Administrative Circular No. 04-94.
WHEREFORE, the appealed decision is hereby modified in that the
claim for moral, exemplary damages and attorneys fees in Civil Case No. Q-
95-25977 of petitioner is ordered reinstated. The temporary restraining
order priorly issued by this Court is lifted. No costs.
SO ORDERED.
236 scra 1994 case)
G.R. No. 103200 August 31, 1994
an order shall be made summarily directing the parties
to proceed with the arbitration in accordance with the
terms thereof.
The court shall decide all motions, petitions or
application filed under the provisions of this Act, within
ten days after such motions, petitions, or applications
have been heard by it.
In chronology, the events that have led to the case at bench are detailed in
the appealed decision of respondent appellate court, which we here
reproduce in toto.
Original action for Certiorari and Prohibition for
Annulment of the Orders, dated April 26, 1990 and
June 22, 1990, respectively, of Branch LXI, Regional
Trial Court, Angeles City, in Special Case No. 6024 for
Enforcement of ARBITRATION Agreement with
Damages. Petitioner assails that portion of subject
Order of April 26, 1990, stating as follows:

LA NAVAL DRUG CORPORATION, petitioner, (1) Petitioner's claim for

vs. damages predicated on alleged
THE HONORABLE COURT OF APPEALS and WILSON C. YAO, respondents. tortuous acts of respondents La
Naval Drug corporation such as
their alleged interference and
Jerome T. Paras for petitioner. dilatory tactics, etc. in the
implementation of the
Quasha, Asperilla, Ancheta, Pea & Nolasco for private respondent. Arbitration Agreement in the
Contract of Lease, thereby
compelling among others the
petitioner to go to Court for
redress; and respondent La
Naval Drug Corporation's
VITUG, J.: counterclaim for damages may
be entertained by this Court in a
hearing not summary for
In an effort to declog the courts of an increasing volume of work load and,
the purpose, under the Rules of
most importantly, in order to accord contending parties with expenditious
Court.
alternatives for settling disputes, the law authorities, indeed encourages, out
of court settlements or adjudications. Compromises and arbitration are
widely known and used as such acceptable methods of resolving adversarial (2) A preliminary hearing of the
claims. special and affirmative defense
to show that Petitioner has not
cause of action against
Arbitrations, in particular, is governed by a special law, Republic Act 876,
respondent's claim for damages
suppletory to which are laws and rules of general application. This case
is denied; a resolution on this
before us concerns the jurisdiction of courts, in relation to the provisions of
issue is deferred after the trial of
Section 6 of Republic Act No. 876, and, in that respect, the applicability of the
the case on the merits.
doctrine of estoppel. The law (R.A. 876), specifically Section 6 thereof,
provides:
And challenges the Order of June 22, 1990 denying its
motion for reconsideration of the said earlier Order.
Sec. 6. Hearing by court. A party aggrieved by the
failure, neglect or refusal of another to perform under
an agreement in writing providing for arbitration may From the petition below of respondent Yao, it appears
petition the court for an order directing that such that he is the present owner of a commercial building a
arbitration proceed in the manner provided for in such portion of which is leased to petitioner under a
agreement. Five days notice in writing of the hearing of contract of lease executed on December 23, 1993 with
such application shall be served either personally or by the former owner thereof, La Proveedora, Inc., which
registered mail upon the party in default. The court contract expired on April 30, 1989. However,
shall hear the parties, and upon being satisfied that the petitioner exercised its option to lease the same
making of the agreement or such failure to comply building for another five years. But petitioner and
therewith is not in issue, shall make an order directing respondent Yao disagreed on the rental rate, and to
the parties to proceed to arbitration in accordance resolve the controversy, the latter, thru written notices
with the terms of the agreement. If the making of the to the former, expressed his intention to submit their
agreement or default be in issue the court shall disagreement to arbitration, in accordance with
proceed to summarily hear such issue. If the finding be Republic Act 876, otherwise known as the Arbitration
that no agreement in writing providing for arbitration Law, and paragraph 7 of their lease contract, providing
was made, or that there is no default in the proceeding that:
thereunder, the proceeding shall be dismissed. If the
finding be that a written provision for arbitration was
7. . . . Should the parties fail to
made and there is a default in proceeding thereunder,
agree on the rate of rentals, the
10
 same shall be submitted to a
group of Arbitrators composed
of three (3) members, one to be
appointed by LESSOR, another
by LESSEE and the third one to
be agreed upon by the two
arbitrators previously chosen
and the parties hereto shall
submit to the decision of the
arbitrators.
Thus, on May 6, 1989, respondent Yao appointed
Domingo Alamarez, Jr. as his arbitrator, while on June
5, 1989, petitioner chose Atty. Casiano Sabile as its
arbitrator. The confirmation of the appointment of
Aurelio Tupang, as third arbitrator, was held in
abeyance because petitioner instructed Atty. Sabile to
defer the same until its Board of Directors could
convene and approve Tupang's appointment.
Respondent Yao theorizes that this was petitioner's
design to delay the arbitration proceedings, in violation
of the Arbitration Law, and the governing stipulation of
their contract of lease.
On the basis of the aforesaid allegations, respondent
Yao prayed that after summary hearing pursuant to
Section 6 of the Arbitration Law, Atty. Casiano Sabile
and Domingo Alamarez be directed to proceed with
the arbitration in accordance with Section 7 of subject
Contract of Lease and the applicable provisions of the
Arbitration law, by appointing and confirming the
appointment of the Third Arbitrator; and that the
Board of Three Arbitrators be ordered to immediately
convene and resolve the controversy before it,
pursuant to Section 12 and the succeeding sections of
the Arbitration Law. (Annex "A," Petition.)
In its Answer with Counterclaim (Annex "C," Petition),
petitioner here specifically denied the averments of
the petition below; theorizing that such petition is
premature since respondent Yao has not yet formally
required arbitrators Alamarez and Sabile to agree on
the third arbitrator, within ten (10) days from notice,
and that the delay in the arbitration was due to
respondent Yao's failure to perform what is incumbent
upon him, of notifying and thereafter, requiring both
arbitrators to appoint the third member of the Board
of Arbitrators. According to petitioner, it actually gave
arbitrators Sabile and Alamarez a free hand in choosing
the third arbitrator; and, therefore, respondent Yao
has no cause of action against it (petitioner). By way of
Counterclaim, petitioner alleged that it suffered actual
damages of P100,000.00; and incurred attorney's fees
of P50,000.00, plus P500.00 for every court
appearance of its counsel.
On October 20, 1989, respondent Yao filed an
amended petition for "Enforcement of Arbitration
Agreement with Damages;" praying that petitioner be
ordered to pay interest on the unpaid rents, at the
prevailing rate of interest in commercial banks, and
exemplary damages of at least P250,000.00.
On October 24, 1989, despite petitioner's opposition to
the motion to admit the amended petition, the
respondent court admitted the same.
On October 31, 1989, petitioner answered the
amended petition; contending, among others, that the
amended petition should be dismissed on the ground
of non-payment of the requisite filing fees therefor;
and it being in the nature of an ordinary civil action, a
full blown and regular trial, is necessary; so that
respondent Yao's proposition for a summary hearing of
the arbitration issue and separate trial for his claim for
damages is procedurally untenable and implausible.
Invoking Section 5, Rule 16 of the Rules of Court,
petitioner presented a "Motion to Set Case for
Preliminary Hearing" of its special and affirmative
defenses, which are grounds fro a motion to dismiss.
In its Order of November 14, 1989, the respondent
court announced that the two arbitrators chose Mrs.
Eloisa R. Narciso as the third arbitrator. And on
November 21, 1989, it ordered the parties to submit
their position papers on the issue as to whether or not
respondent Yao's claim for damages may be litigated
upon in the summary proceeding for enforcement of
arbitration agreement. It likewise informed the parties
that petitioner's Motion to Set Case for Preliminary
Hearing" of Special and Affirmative Defenses would be
resolved together with the question of damages.
On April 26, 1990, the aforequoted assailed Order
issued. In moving for reconsideration of the said Order,
petitioner argued that in Special Case No. 6024, the
respondent court sits as a special court exercising
limited jurisdiction and is not competent to act on
respondent Yao's claim for damages, which poses an
issue litigable in an ordinary civil action. But the
respondent court was not persuaded by petitioner's
submission. On June 22, 1990, it denied the motion for
reconsideration. (Rollo, pp. 89-93).
While the appellate court has agreed with petitioner that, under Section 6 of
Republic Act No. 876, a court, acting within the limits of its special
jurisdiction, may in this case solely determine the issue of whether the
litigants should proceed or not to arbitration, it, however, considered
petitioner in estoppel from questioning the competence of the court to
additionally hear and decide in the summary proceedings private
respondent's claim for damages, it (petitioner) having itself filed similarly its
own counterclaim with the court a quo.
It is hardly disputable that when a court is called upon to exercise limited and
special jurisdiction, that court cannot stray to matters outside the area of its
declared authority or beyond what has been expressly invested by law
(Elumbaring vs. Elumbaring, 12 Phil. 384, 387), particularly, such as in this
instance, where the proceedings are summary in nature.
Prefatorily, recalling the distinctions, pertinent to the case, between the
court's lack of jurisdiction over the person of the defendant, on the one
hand, and its lack of jurisdiction over the subject matter or the nature of the
action, upon the other hand, should be useful.
The lack of jurisdiction over the person of the defendant may be waived
either expressly or impliedly. When a defendant voluntarily appears, he is
deemed to have submitted himself to the jurisdiction of the court. If he so
wishes not to waive this defense, he must do so seasonably by motion for
the purpose of objecting to the jurisdiction of the court; otherwise, he shall
be deemed to have submitted himself to that jurisdiction. The decisions
promulgated heretofore by this Court would likewise seemingly apply
estoppel to bar the defendant from pursuing that defense by alleging in his
answer any other issue for dismissing the action.
A citation of a few of our decisions might be apropos.
In Wang Laboratories, Inc., vs. Mendoza (156 SCRA 44), this Court has ruled
that if the defendant, besides setting up in a motion to dismiss his objection
to the jurisdiction of the court, alleges at the same time any other ground for
11
dismissing the action, he is deemed to have submitted himself to the
jurisdiction of the court. In the process, it has equated the matter to a
situation where, such as in Immaculata vs. Judge Navarro, et al. (146 SCRA
5), the defendant invokes an affirmative relief against his opponent.
In De Midgely vs. Judge Ferandos (64 SCRA 23, 31), the Court elaborated
thusly:
We are of the opinion that the lower court has
acquired jurisdiction over the person of Mrs. Midgely
by reason of her voluntary appearance. The
reservation in her motion to dismiss that she was
making a special appearance to contest the court's
jurisdiction over her person may be disregarded.
It may be disregarded because it was nullified by the
fact that in her motion to dismiss she relied not only
on the ground of lack of jurisdiction over her person
but also on the ground that there was no showing that
earnest efforts were exerted to compromise the case
and because she prayed "for such other relief as" may
be deemed "appropriate and proper."
xxx xxx xxx
When the appearance is by motion for the purpose of
objecting to the jurisdiction of the court over the
person, it must be for the sole and separate purpose of
objecting to the jurisdiction of the court. If his motion
is for any other purpose than to object to the
jurisdiction of the court over his person, he thereby
submits himself to the jurisdiction of the court. A
special appearance by motion made for the purpose of
objecting to the jurisdiction of the court over the
person will be held to be a general appearance, if the
party in said motion should, for example, ask for a
dismissal of the action upon the further ground that
the court had no jurisdiction over the subject matter.
(Syllabus, Flores vs. Zurbito, supra, at page 751. That
rule was followed in Ocampo vs. Mina and Arejola, 41
Phil. 308).
The justification for the rule was expressed in Republic vs. Ker and Companry,
Ltd. (18 SCRA 207, 213-214), in this wise:
We observed that the motion to dismiss filed on April
14, 1962, aside from disputing the lower court's
jurisdiction over defendant's person, prayed for
dismissal of the complaint on the ground that
plaintiff's cause of action had prescribed. By
interposing such second ground in its motion to
dismiss, Ker & Co., Ltd. availed of an affirmative
defense on the basis of which it prayed the court to
resolve controversy in its favor. For the court to validly
decide the said plea of defendant Ker & Co., Ltd., it
necessarily had to acquire jurisdiction upon the latter's
person, who, being the proponent of the affirmative
defense, should be deemed to have abandoned its
special appearance and voluntarily submitted itself to
the jurisdiction of the court.
Voluntary appearance cures defects of summons, if
any, Such defect, if any, was further cured when
defendant filed its answer to the complaint. A
defendant can not be permitted to speculate upon the
judgment of the court by objecting to the court's
jurisdiction over its person if the judgment is adverse
to it, and acceding to jurisdiction over its person if and
when the judgment sustains its defenses.
The doctrine of estoppel is predicated on, and has its origin in, equity which,
broadly defined, is justice according to natural law and right. It is a principle
intended to avoid a clear case of injustice. The term is hardly distinguishable
from a waiver of right. Estoppel, like its said counterpart, must be
unequivocal and intentional for, when misapplied, it can easily become a
most convenient and effective means of injustice. Estoppel is not understood
to be a principle that, as a rule, should prevalently apply but, such as it
concededly is, as a mere exception from the standard legal norms of general
application that can be invoked only in highly exceptional and justifiable
cases.
Tested by the above criteria, the Court sees it propitious to re-examine
specifically the question of whether or not the submission of other issues in a
motion to dismiss, or of an affirmative defense (as distinguished from an
affirmative relief) in an answer, would necessarily foreclose, and have the
effect of a waiver of, the right of a defendant to set up the court's lack of
jurisdiction over the person of the defendant.
Not inevitably.
Section 1, Rule 16, of the Rules of Court, provides that a motion to dismiss
may be made on the following grounds:
(a) That the court has no jurisdiction over the person of
the defendant or over the subject of the action or suit;
(b) That the court has no jurisdiction over the nature of
the action or suit;
(c) The venue is improperly laid;
(d) That the plaintiff has no legal capacity to sue;
(e) That there is another action pending between the
same parties for the same cause;
(f) That the cause of action is barred by a prior
judgment or by statute of limitations;
(g) That the complaint states no cause of action;
(h) That the claim or demand set forth in the plaintiff's
pleading has been paid, waived, abandoned, or
otherwise extinguished;
( i ) That the claim on which the action or suit is
founded is unenforceable under the provisions of the
statute of frauds;
( j ) That the suit is between members of the same
family and no earnest efforts towards a compromise
have been made.
Any ground for dismissal in a motion to dismiss, except improper venue,
may, as further set forth in Section 5 of the same rule, be pleaded as an
affirmative defense and a preliminary hearing may be had thereon as if a
motion to dismiss had been filed. An answer itself contains the negative, as
well as affirmative, defenses upon which the defendant may rely (Section 4,
Rule 6, Rules of Court). A negative defense denies the material facts averred
in the complaint essential to establish the plaintiff's cause of action, while an
affirmative defense in an allegation of a new matter which, while admitting
the material allegations of the complaint, would, nevertheless, prevent or
bar recovery by the plaintiff. Inclusive of these defenses are those mentioned
in Rule 16 of the Rules of Court which would permit the filing of a motion to
dismiss.
12
In the same manner that the plaintiff may assert two or more causes of
action in a court suit, a defendant is likewise expressly allowed, under
Section 2, Rule 8, of the Rules of Court, to put up his own defenses
alternatively or even hypothetically. Indeed, under Section 2, Rule 9, of the
Rules of Court, defenses and objections not pleaded either in a motion to
dismiss or in an answer, except for the failure to state a cause of action, are
deemed waived. We take this to mean that a defendant may, in fact, feel
enjoined to set up, along with his objection to the court's jurisdiction over his
person, all other possible defenses. It thus appears that it is not the
invocation of any of such defenses, but the failure to so raise them, that can
result in waiver or estoppel. By defenses, of course, we refer to the grounds
provided for in Rule 16 of the Rules of Court that must be asserted in a
motion to dismiss or by way of affirmative defenses in an answer.
Mindful of the foregoing, in Signetics Corporation vs. Court of Appeals and
Freuhauf Electronics Phils., Inc. (225 SCRA 737, 738), we lately ruled:
This is not to say, however, that the petitioner's right
to question the jurisdiction of the court over its person
is now to be deemed a foreclosed matter. If it is true,
as Signetics claims, that its only involvement in the
Philippines was through a passive investment in Sigfil,
which it even later disposed of, and that TEAM Pacific
is not its agent, then it cannot really be said to be
doing business in the Philippines. It is a defense,
however, that requires the contravention of the
allegations of the complaint, as well as full ventilation,
in effect, of the main merits of the case, which should
not thus be within the province of a mere motion to
dismiss. So, also, the issue posed by the petitioner as
to whether a foreign corporation which has done
business in the country, but which has ceased to do
business at the time of the filing of a complaint, can
still be made to answer for a cause of action which
accrued while it was doing business, is another matter
that would yet have to await the reception and
admission of evidence. Since these points have
seasonably been raised by the petitioner, there should
be no real cause for what may understandably be its
apprehension, i.e., that by its participation during the
trial on the merits, it may, absent an invocation of
separate or independent reliefs of its own, be
considered to have voluntarily submitted itself to the
court's jurisdiction.
Lack of jurisdiction over the subject matter of the suit is yet another matter.
Whenever it appears that the court has no jurisdiction over the subject
matter, the action shall be dismissed (Section 2, Rule 9, Rules of Court). This
defense may be interposed at any time, during appeal (Roxas vs. Rafferty, 37
Phil. 957) or even after final judgment (Cruzcosa vs. Judge Concepcion, et al.,
101 Phil. 146). Such is understandable, as this kind of jurisdiction is conferred
by law and not within the courts, let alone the parties, to themselves
determine or conveniently set aside. In People vs. Casiano (111 Phil. 73 93-
94), this Court, on the issue of estoppel, held:
The operation of the principle of estoppel on the
question of jurisdiction seemingly depends upon
whether the lower court actually had jurisdiction or
not. If it had no jurisdiction, but the case was tried and
decided upon the theory that it had jurisdiction, the
parties are not barred, on appeal, from assailing such
jurisdiction, for the same "must exist as a matter of
law, and may not be conferred by consent of the
parties or by estoppel" (5 C.J.S., 861-863). However, if
the lower court had jurisdiction, and the case was
heard and decided upon a given theory, such, for
instance, as that the court had no jurisdiction, the
party who induced it to adopt such theory will not be
permitted, on appeal, to assume an inconsistent
position that the lower court had jurisdiction. Here,
the principle of estoppel applies. The rule that
jurisdiction is conferred by law, and does not depend
upon the will of the parties, has not bearing thereon.
The rule was reiterated in Calimlim vs. Ramirez (118 SCRA 399, 406), and
quite recently, in Southeast Asian Fisheries Development Center-Aquaculture
Department vs. National Labor Relations Commission (206 SCRA 283).
Jurisdiction over the nature of the action, in concept, differs from jurisdiction
over the subject matter. Illustrated, lack of jurisdiction over the nature of the
action is the situation that arises when a court, which ordinarily would have
the authority and competence to take a case, is rendered without it either
because a special law has limited the exercise of its normal jurisdiction on a
particular matter or because the type of action has been reposed by law in
certain other courts or quasi-judicial agencies for determination.
Nevertheless, it can hardly be questioned that the rules relating to the
effects of want of jurisdiction over the subject matter should apply with
equal vigor to cases where the court is similarly bereft of jurisdiction over the
nature of the action.
In summary, it is our considered view, as we now so hereby express,
that
(1) Jurisdiction over the person must be seasonably raised, i.e., that it is
pleaded in a motion to dismiss or by way of an affirmative defense in an
answer. Voluntary appearance shall be deemed a waiver of this defense. The
assertion, however, of affirmative defenses shall not be constructed as an
estoppel or as a waiver of such defense.
(2) Where the court itself clearly has no jurisdiction over the subject matter
or the nature of the action, the invocation of this defense may be done at
any time. It is neither for the courts nor the parties to violate or disregard
that rule, let alone to confer that jurisdiction, this matter being legislative in
character. Barring highly meritorious and exceptional circumstances, such as
hereinbefore exemplified, neither estoppel nor waiver shall apply.
In the case at bench, the want of jurisdiction by the court is indisputable,
given the nature of the controversy. The arbitration law explicitly confines
the court's authority only to pass upon the issue of whether there is or there
is no agreement in writing providing for arbitration. In the affirmative, the
statute ordains that the court shall issue an order "summarily directing the
parties to proceed with the arbitration in accordance with the terms
thereof." If the court, upon the other hand, finds that no such agreement
exists, "the proceeding shall be dismissed." The proceedings are summary in
nature.
All considered, the court a quo must then refrain from taking up the claims of
the contending parties for damages, which, upon the other hand, may be
ventilated in separate regular proceedings at an opportune time and venue.
The circumstances obtaining in this case are far, we hold, from justifying the
application of estoppel against either party.
WHEREFORE, the decision of the Court of Appeals and the orders of the trial
court in question are SET ASIDE. The court a quo, in the instant proceedings,
is ordered to DESIST from further hearing private respondent's claim, as well
as petitioner's counterclaim, for damages. No costs.
SO ORDERED.
PNB vs Perez et al (16 scra 270)
G.R. No. L-20412 February 28, 1966
PHILIPPINE NATIONAL BANK, plaintiff-appellant,
vs.
AMANDO M. PEREZ, ET AL., defendants-appellees.
13
J.C. Jimenez for the plaintiff-appellant. 1950, the date the writ of execution Exhibit B-1 was signed.
T. Besa for the defendants-appellees. However, the instant case was filed with this Court on March 22,
1961, thereby showing that whether from February 2, 1950 or
February 24, 1950, more than eleven (11) years have already
BAUTISTA ANGELO, J.:
elapsed.

The Philippine National Bank filed on March 22, 1961 before the Court of
Wherefore, the order appealed from is affirmed. No costs.
First Instance of Manila a complaint for revival of a judgment rendered on
December 29, 1949 against Amando M. Perez, Gregorio Pumuntoc and
Virginia de Pumuntoc pursuant to the provisions of Section 6, Rule 39 of the
Rules of Court. It was alleged therein that said judgment was rendered more
than five years ago but that since then less than ten years had elapsed, and
that judgment be rendered reviving the one entered on December 29, 1949
sentencing the defendants to pay jointly and severally the outstanding
balance of P7,699.49 as of February 9, 1961, with interest thereon of 10%
per annum from February 10, 1961, plus 10% of the amount due as
attorney's fees and costs of suit.

Defendants Gregorio Pumuntoc and Virginia de Pumuntoc failed to file their

answer within the reglementary period for which reason they were declared
in default. Defendant Amando M. Perez, who was summoned by publication,
also failed to file his answer, whereupon he was also declared in default, and
though he later filed an answer the same was stricken out from the record.

Thereupon, plaintiff submitted its evidence, but when the case was
submitted for the decision, the court a quo dismissed the complaint on the
ground that plaintiff's cause of action had already prescribed under Articles
1144 and 1152 of the Civil Code.

Plaintiff filed a motion for reconsideration contending that, since prescription

is a defense that can only be set up by defendants, the court could not motu
proprio consider it as basis for dismissal, but this motion was denied.

Plaintiff took the present appeal.

It appears that, when defendants were declared in default, plaintiff was

allowed to present its evidence from which it was established that in the
previous case between the same parties (Civil Case No. 9048) a decision was
rendered on December 29, 1949 ordering defendants to pay plaintiff the sum
of P3,783.78, with 8% interest from December 21, 1949 until fully paid, plus
the corresponding attorney's fees and costs of suit. This decision became
final on February 2, 1950, or 30 days from the date the same was received by
the parties. As a matter of fact, the writ issued for its execution bears the
date of February 24, 1950. However, the instant case was filed with the
court a quo only on March 22, 1961, thereby showing that more than 11
years had already elapsed on the date of the filing of the action.

Since under Section 6, Rule 39 of the Rules of Court a judgment which was
rendered more than five years after it had become final can only be revived
before it is barred by the statute of limitations, and an action for the
enforcement of judgment can only be brought within 10 years from the time
the judgment becomes final (Articles 1144 and 1152, Civil Code), it follows
that plaintiff's action has already prescribed as found by the court a quo. In
other words, while plaintiff's complaint alleges that the previous judgment
was rendered more than five years but less than ten years since its rendition,
the very evidence of the plaintiff, however, shows that the present action
was filed after the lapse of more than 10 years. 1wph1.t

It is true that the defense of prescription can only be considered if the same
is invoked as such in the answer of the defendant and that in this particular
instance no such defense was invoked because the defendants had been
declared in default, but such rule does not obtain when the evidence shows
that the cause of action upon which plaintiff's complaint is based is already
barred by the statute of limitations. Thus, the court a quo made on this point
the following finding:

. . . Since the defendants did not elect to appeal the decision

against them, the same became final on February 2, 1950 or thirty
(30) days from receipt by the parties of copies of the decision.
Said decision must at the least have become final on February 24,
14