SPOUSES DANILO and CRISTINA DECENA, petitioners, vs.
SPOUSES PEDRO and nevertheless, be joined with the rest of their causes of action for damages,
VALERIA PIQUERO, respondents.
FACTS:
Petitioners Sps. Danilo and Cristina Decena were the owners of a parcel of land,
with a house constructed thereon, located in Parañaque.
On September 7, 1997, petitioners and the respondents Sps. Pedro and Valeria
Piquero, executed a MOA in which petitioners sold the property to the
respondents for P940,250 payable in six (6) installments via postdated checks.
It appears in the MOA that petitioners obliged themselves to transfer the property
to the respondents upon the execution of the MOA with the condition that if two
of the postdated checks would be dishonored by the drawee bank, the
respondents would be obliged to reconvey the property to the petitioners.
On May 17, 1999, the petitioners, then residents of Malolos, Bulacan, filed a
Complaint against the respondents with the RTC of Malolos for the annulment of
the sale/MOA, recovery of possession and damages alleging that they did not
transfer the property to and in the names of the respondents as vendees because
the first two checks drawn and issued by them in payment for the purchase price
of the property were dishonored by the drawee bank, and were not replaced with
cash despite demands. They declared in their complaint that the property subject
of the complaint valued at P6, 900,000.
Respondents filed a MD on the ground of improper venue and lack of jurisdiction
over the property subject matter of the action. Respondents averred that the
principal action of the petitioners for the rescission of the MOA, and the recovery
of the possession of the property is a real action and not a personal one; hence, it
should have been brought in the RTC of Parañaque City, where the property
subject matter of the action was located, and not in the RTC of Malolos, Bulacan,
where the petitioners resided.
In opposition, the petitioners insisted that their action for damages and attorney’s
fees is a personal action and not a real action; hence, it may be filed in the RTC of
Bulacan where they reside. They averred that while their second cause of action
for the recovery of the possession of the property is a real action, the same may,
conformably with Section 5(c), Rule 2 of the Rules of Court.
By way of reply, the respondents averred that Section 5(c), Rule 2 of the Rules of
Court applies only when one or more of multiple causes of action falls within the
exclusive jurisdiction of the first level courts, and the other or others are within
the exclusive jurisdiction of the RTC, and the venue lies therein.
On February 9, 2000, trial court denied the motion for lack of merit. When the
case was re-raffled to Branch 10 of the RTC of Malolos, respondents filed MR
which the court granted and then ordered the dismissal of the complaint. It ruled
that the principal action of the petitioners was a real action and should have been
filed in the RTC of Parañaque City where the property subject matter of the
complaint was located.
Hence, the present recourse.
ISSUE: W/N venue was properly laid by petitioners in the RTC of Malolos.
HELD: NO. Section 5, Rule 2 of the Rules of Court invoked by the petitioners does
not apply. Under the said Rule, a party may, in one pleading, assert, in the
alternative or otherwise, as many causes of action as he may have against an
opposing party subject to the conditions therein enumerated, one of which is
Section 5(c) which reads: Joinder of causes of action. --(c) Where the causes of
action are between the same parties but pertain to different venues or
jurisdiction, the joinder may be allowed in the Regional Trial Court provided one of
the causes of action falls within the jurisdiction of said court and the venue lies
therein; …
The petitioners, as plaintiffs in the court a quo, had only one cause of action
against the respondents, namely, the breach of the MOA upon the latter’s refusal
to pay the first two installments in payment of the property as agreed upon, and
turn over to the petitioners the possession of the real property, as well as the
house constructed thereon occupied by the respondents. The claim for damages
for reasonable compensation for the respondents’ use and occupation of the
property, in the interim, as well as moral and exemplary damages suffered by the
petitioners on account of the breach of contract of the respondents are merely
incidental to the main cause of action, and are not independent or separate
causes of action. The action of the petitioners for the rescission of the MOA on
account of the respondents’ breach thereof and the latter’s failure to return the
premises subject of the complaint to the petitioners, and the respondents’
eviction therefrom is a real action. As such, the action should have been filed in
the proper court where the property is located, namely, in Parañaque City,
conformably with Section 1, Rule 4 of the Rules of Court. Since the petitioners,
who were residents of Malolos, Bulacan, filed their complaint in the said RTC,
venue was improperly laid; hence, the trial court acted conformably with Section
1(c), Rule 16 of the Rules of Court when it ordered the dismissal of the complaint.
SPOUSES DANILO and CRISTINA DECENA, vs. SPOUSES PEDRO and VALERIA
PIQUERO
G.R. No. 155736. March 31, 2005
Facts: Spouses Danilo and Cristina Decena were the owners of a house and lot in
Parañaque City. The petitioners and the respondents, the Spouses Pedro and
Valeria Piquero, executed a Memorandum of Agreement in which the former sold
the property to the latter for P940,250.00 payable in six (6) installments via
postdated checks. The vendees forthwith took possession of the property. It
appears in the MOA that the petitioners obliged themselves to transfer the
property to the respondents upon the execution of the MOA with the condition
that if two of the postdated checks would be dishonored by the drawee bank, the
latter would be obliged to reconvey the property to the petitioners. On May 17,
1999, the petitioners, then residents of Malolos, Bulacan, filed a Complaint
against the respondents with the RTC Malolos, Bulacan, for the annulment of the
sale/MOA, recovery of possession and damages. The petitioners alleged therein
that, they did not transfer the property to and in the names of the respondents as
vendees because the first two checks drawn and issued by them in payment for
the purchase price of the property were dishonored by the drawee bank, and
were not replaced with cash despite demands therefor.
petitioners, as plaintiffs in the court a quo, had only one cause of action against
the respondents, namely, the breach of the MOA upon the latter’s refusal to pay
the first two installments in payment of the property as agreed upon, and turn
over to the petitioners the possession of the real property, as well as the house
constructed thereon occupied by the respondents. The claim for damages for
reasonable compensation for the respondents’ use and occupation of the
property, in the interim, as well as moral and exemplary damages suffered by the
petitioners on account of the aforestated breach of contract of the respondents
are merely incidental to the main cause of action, and are not independent or
separate causes of action. The action of the petitioners for the rescission of the
MOA on account of the respondents’ breach thereof and the latter’s failure to
return the premises subject of the complaint to the petitioners, and the
respondents’ eviction therefrom is a real action. As such, the action should have
been filed in the proper court where the property is located, namely, in
Parañaque City, conformably with Section 1, Rule 4 of the Rules of Court. Since
the petitioners, who were residents of Malolos, Bulacan, filed their complaint in
the said RTC, venue was improperly laid; hence, the trial court acted conformably
with Section 1(c), Rule 16 of the Rules of Court when it ordered the dismissal of
the complaint.

Issue: Whether or not venue was properly laid by the petitioners in the RTC of
Malolos, Bulacan.

Held: After due consideration of the foregoing, we find and so rule that Section
5(c), Rule 2 of the Rules of Court does not apply. This is so because the SPS. PEREZ V HERMANO
[GR NO. 147417] | [July 8,2005] | [Chico-Nazario] March 21, 2000 – petitioners received the order

CASE SUMMARY Must be recit ready. Important facts and ruling of the court plus March 23, 2000 – petitioners moved for motion for reconsideration, which was
basis denied by the trial court on May 25, 2000, and received by petitioners on June 18,
2000.
Petitioners filed a case for the enforcement of contract and damages against
respondent. Respondent filed a motion to dismiss the complaint arguing there August 17, 2000 – petitioners filed original action for certiorari before the CA
was a misjoinder of causes of action, which the RTC granted. The RTC dismissed imputing grave abuse of discretion on the part of the RTC in dismissing the
the MR which was denied, and on appeal through a Rule 65 petition for certiorari, complaint against respondent
the CA dismissed for having been filed beyond the reglementary period. The
CA dismissed the petition for having been filed beyond the reglementary period
Supreme Court ruled first that the case was not filed beyond the reglementary
pursuant to Sec 4 Rule 65 of the 1997 Rules on Civil Procedure amended by A.M.
period, as Section 4 on Rule 65 was amended by AM No. 00-23-SC, which clarified
No. 00-2-03-50
the 60 day rule that such 60-day period starts to run from receipt of notice of the
denial of the MR, if one is filed.. They also said that there was no misjoinder of PROCEDURE SUMMARY
causes of action, as there were various questions of fact and law common to both
Zescon Land, Inc., and respondent Hermano arising from a series of transactions Action (Petition for review, appeal of Decision (RTC: petition denied)
over the same properties. The RTC found that there was no joinder on the parties, CA decision etc.)
hence the misjoinder, but the Supreme Court found that if the joinder involves Civil Case for Enforcement of contract
different parties, as in this case, there must be a question of fact or of law and damages w/ prayer for TRO w/ RTC
common to both parties joined, arising out of the same transaction or series of by PET
transactions. Such questions were sufficiently alleged in the complaint by
Petitioners in their complaint. Motion w/ leave to dismiss the RTC: Motion Granted
complaint due to misjoinder of causes
DOCTRINE copy SCRA syllabus related to the topic if possible of action by RESP
It is well to remember that the joinder of causes of action may involve the same MR by PET RTC: MR Denied
parties or different parties. If the joinder involves different parties, as in this case,
there must be a question of fact or of law common to both parties joined, arising Original Action for Certiorari alleging CA: Petition Dismissed; filed beyond
out of the same transaction or series of transactions. GAD by RTC period

FACTS bullet points Rule 45 to the SC SC: Reversed CA Decision

April 27, 1998 - Petitioners filed a civil case for enforcement of contract and
damages with prayer for the issuance of a TRO and/or preliminary injunction
against respondent before QC RTC.
ISSUE state all issues first. Bold the one related to the subject
Jan 17, 2000 – Respondent filed a “motion with leave to dismiss the complaint or
ordered severed for separate trial” arguing there was a misjoinder of causes of 1. WON PETS FILED WITHIN REGLEMENTARY PERIOD  YES
action under Sec 6 Rule 2 which was granted in an order dated Feb 28, 2000
 2. WON RTC JUDGE GRAVELY ABUSED HIS DISCRETION IN DROPPING THE
CASE DUE TO MISJOINDER OF CAUSES OF ACTION?  YES
2. YES. There was no Misjoinder on Causes of action in the current case.
RATIO Bold important words or phrases
1. WON  YES. Sec 4 was amended by A.M. No. 00-2-03-SC, and
amendment should be applied retroactively because it is considered
curative in nature, as it remedied the confusion caused by the original
Circular No. 39-98
a. At the time petitioners filed their petition for certiorari (August
17, 2000) the rule then prevailing was Sec 4 Rule 65 as amended
by Circular No. 39-98. However, on September 1, 2000, Sec 4 was
amended by A.M. No. 00-2-03- SC to read:
“Sec 4 – The petition shall be filed not later than 60 days from
notice of the judgment or order resolution. In case of a motion for
reconsideration or new trial is timely filed, whether such motion is
required or not, the 60-day period shall be counted from notice of
the denial of said motion.”
i. Under the amendment, the 60-day period starts to run
from receipt of notice of the denial of the MR, if one is
filed.
b. The amendment should be applied retroactively because it is
considered curative in nature, as it remedied the confusion
caused by Circular No. 39-98 (because prior to the amendment, a
party had a fresh period from receipt of the order denying the MR
to file a petition for certiorari)
c. Curative statutes, enacted to cure defects in a prior law or to
validate legal proceedings, by their very essence, are retroactive.
And being a procedural rule, such are construed to be applicable
to actions pending and undetermined at the time of their
passage, and are deemed retroactive.
d. Petitioners had a fresh period of 60 days from June 18. When they
filed on Aug. 17, exactly 60 days had lapsed.
a. The rule on misjoinder of causes of action is found in Sec 6 Rule
2. There is misjoinder of causes of action when the conditions for
joinder under Sec 5 Rule 2 are not met. It is the first condition - on
joinder of parties - that the trial court deemed to be lacking. It is
well to remember that the joinder of causes of action may involve
the same parties or different parties. If the joinder involves
different parties, as in this case, there must be a question of fact
or of law common to both parties joined, arising out of the same
transaction or series of transactions.
b. In herein case, petitioners have adequately alleged in their
complaint that after they had already agreed to enter into a
contract to sell with Zescon Land, Inc., through Sales-Contreras,
the latter also gave them other documents to sign, to wit: A Deed
of Absolute Sale over the same properties but for a lower
consideration, two mortgage deeds over the same properties in
favor of respondent Hermano with accompanying notes and
acknowledgment receipts for Ten Million pesos (P10,000,000)
each. Petitioners claim that Zescon Land, Inc., through Sales-
Contreras, misled them to mortgage their properties which they
had already agreed to sell to the latter
c. Reasonably apparent that there are questions of fact and law
common to both Zescon Land, Inc., and respondent Hermano
arising from a series of transactions over the same properties.
i. Question of fact, of whether or not Zescon Land, Inc.,
indeed misled petitioners to sign the mortgage deeds in
favor of respondent Hermano.
ii. Question of which of the four contracts were validly
entered into by the parties.
 iii. Question of whether or not Zescon Land, Inc., as
represented by Sales-Contreras, and respondent
Hermano committed fraud against petitioners as to make
them liable for damages.

d. Thus, respondent Hermano will definitely be affected if it is

subsequently declared that what was entered into by petitioners
and Zescon Land, Inc., was a Contract of Sale.

e. Prescinding from the foregoing, and bearing in mind that the

joinder of causes of action should be liberally construed as to
effect in one action a complete determination of all matters in
controversy involving one subject matter, we hold that the trial
court committed grave abuse of discretion in severing from the
complaint petitioners cause of action against respondent
Hermano.

DECISION bullet points. Don’t copy and paste

 Petition GRANTED

 CA Decision REVERSED

 RTC ordered to reinstate Hermano as a defendant

FIRST DIVISION G.R. No. 164041. July 29, 2005

ROSENDO ALBA, minor, represented by his mother and natural guardian, Armi NO. Petition is Dismissed.
A. Alba, and ARMI A. ALBA, in her personal capacity, petitioners, vs. COURT OF
Under Section 2, Rule 47 of the 1997 Revised Rules of Civil Procedure, judgments
APPEALS and ROSENDO C. HERRERA, respondents.
may be annulled on the grounds of lack of jurisdiction and extrinsic fraud.[19]
PONENTE: YNARES-SANTIAGO, J.
Whether or not the trial court acquired jurisdiction over the person of petitioner
Facts: and her minor child depends on the nature of private respondents action, that is,
in personam, in rem or quasi in rem. An action in personam is lodged against a
On 21 October 1996, respondent filed a petition in RTC Manila for cancellation of
person based on personal liability; an action in rem is directed against the thing
entries in the birth certificate of petitioner minor, to wit: (1) minor’s surname
itself instead of the person; while an action quasi in rem names a person as
‘Herrera’; (2) his filiation as father; and (3) marriage to minor’s mother, Armi,
defendant, but its object is to subject that persons interest in a property to a
alleging they are false and that he married only once with Ezperanza Santos.
corresponding lien or obligation.[20]
On 13 January 1997, the RTC issued an Amended Order re - scheduling the
Hence, petitions directed against the thing itself or the res,[21] which concerns
hearing of petition to 26 February 1997. Copy of which was published in ‘Today’ in
the status of a person,[22] like a petition for adoption,[23]annulment of marriage,
its Jan 20, 27, and Feb 3, 1997 issues, and were also sent to Armi at No. 418
[24] or correction of entries in the birth certificate,[25] as in the instant case, are
Arquiza St., Ermita, Manila (address per minor’s birth certificate), Local Civil
actions in rem.
Registrar and Solicitor General.
In an action in personam, jurisdiction over the person of the defendant is
During the hearing, only OSG appeared but filed no opposition, while Armi was
necessary for the court to validly try and decide the case. In a proceeding in rem
not present for she did not receive the Order, the address provided being wrong.
or quasi in rem, jurisdiction over the person of the defendant is not a prerequisite
On 1 April 1997, the RTC granted the petition which became final on 2 June 1997.
to confer jurisdiction on the court, provided that the latter has jurisdiction over
On 24 November 2000, petitioners filed a petition for annulment of judgment
the res. Jurisdiction over the res is acquired either (a) by the seizure of the
with CA on the grounds of extrinsic fraud and lack of jurisdiction over their
property under legal process, whereby it is brought into actual custody of the law;
person.
or (b) as a result of the institution of legal proceedings, in which the power of the
Armi averred that: (1) respondent knew all along of her true address where they court is recognized and made effective.[26]The service of summons or notice to
cohabited as husband of wife, result of which is the minor; and (2) she knew of the defendant is not for the purpose of vesting the court with jurisdiction but
the decision only on 26 February 1998; hence due process was denied. On 27 merely for satisfying the due process requirements.[27]

February 2004, CA dismissed the petition. Motion for reconsideration was denied In the case at bar, the filing with the trial court of the petition for cancellation
hence, the instant petition for certiorari. vested the latter jurisdiction over the res. Substantial corrections or cancellations
of entries in civil registry records affecting the status or legitimacy of a person may
Issues: be effected through the institution of a petition under Rule 108 of the Revised
1. Whether or not jurisdiction over Armi’s person was NOT acquired; and Rules of Court, with the proper Regional Trial Court.[28] Being a proceeding in
rem, acquisition of jurisdiction over the person of petitioner is therefore not
2. Whether or not extrinsic fraud is present, to warrant annulment of required in the present case. It is enough that the trial court is vested with
judgment. jurisdiction over the subject matter.
Ruling:
The service of the order at No. 418 Arquiza St., Ermita, Manila and the publication
thereof in a newspaper of general circulation in Manila, sufficiently complied with
the requirement of due process, the essence of which is an opportunity to be
heard. Said address appeared in the birth certificate of petitioner minor as the
residence of Armi. Considering that the Certificate of Birth bears her signature,
the entries appearing therein are presumed to have been entered with her
approval. Moreover, the publication of the order is a notice to all indispensable
parties, including Armi and petitioner minor, which binds the whole world to the
judgment that may be rendered in the petition. An in rem proceeding is validated
essentially through publication.[29] The absence of personal service of the order
to Armi was therefore cured by the trial courts compliance with Section 4, Rule
108, which requires notice by publication, thus:
SEC. 4. Notice and publication. Upon the filing of the petition, the court shall, by
an order, fix the time and place for the hearing of the same, and cause reasonable
notice thereof to be given to the persons named in the petition. The court shall
also cause the order to be published once a week for three (3) consecutive weeks
in a newspaper of general circulation in the province.
In Barco v. Court of Appeals, the trial court granted a petition for
correction/change of entries in a minors birth certificate to reflect the name of
the minors real father as well as to effect the corresponding change of her
surname. In seeking to annul said decision, the other children of the alleged
father claimed that they are indispensable parties to the petition for correction,
hence, the failure to implead them is a ground to annul the decision of the trial
court. The Court of Appeals denied the petition which was sustained by this Court
on the ground, inter alia, that while petitioner is indeed an indispensable party,
the failure to implead her was cured by the publication of the order of hearing.
Thus
Undoubtedly, Barco is among the parties referred to in Section 3 of Rule108. Her
interest was affected by the petition for correction, as any judicial determination
that June was the daughter of Armando would affect her wards share in the
estate of her father. It cannot be established whether Nadina knew of Mary Joys
existence at the time she filed the petition for correction. Indeed, doubt may
always be cast as to whether a petitioner under Rule 108 would know of all the
parties whose interests may be affected by the granting of a petition. For example,
a petitioner cannot be presumed to be aware of all the legitimate or illegitimate
offsprings of his/her spouse or paramour. The fact that Nadina amended her
petition to implead Francisco and Gustilo indicates earnest effort on her part to
comply with Section 3 as quoted above. Yet, even though Barco was not
impleaded in the petition, the Court of Appeals correctly pointed out that the
defect was cured by compliance with Section 4, Rule 108, which requires notice
by publication, thus:
Section 4. Upon the filing of the petition, the court shall, by order, fix the time and
place for the hearing of the same, and cause reasonable notice thereof to be
given to the persons named in the petition. The court shall also cause the order to
be published once a week for three (3) consecutive weeks in a newspaper of
general circulation in the province.
The purpose precisely of Section 4, Rule 108 is to bind the whole world to the
subsequent judgment on the petition. The sweep of the decision would cover
even parties who should have been impleaded under Section 3, Rule 108, but
were inadvertently left out. The Court of Appeals correctly noted:
The publication being ordered was in compliance with, and borne out by the
Order of January 7, 1985. The actual publication of the September 22, 1983 Order,
conferred jurisdiction upon the respondent court to try and decide the case.
While nobody appeared to oppose the instant petition during the December 6,
1984 hearing, that did not divest the court from its jurisdiction over the case and
of its authority to continue trying the case. For, the rule is well-settled, that
jurisdiction, once acquired continues until termination of the case.
Verily, a petition for correction is an action in rem, an action against a thing and
not against a person. The decision on the petition binds not only the parties
thereto but the whole world. An in rem proceeding is validated essentially
through publication. Publication is notice to the whole world that the proceeding
has for its object to bar indefinitely all who might be minded to make an objection
of any sort against the right sought to be established. It is the publication of such
notice that brings in the whole world as a party in the case and vests the court
with jurisdiction to hear and decide it.[30]
Furthermore, extrinsic fraud, which was private respondents alleged concealment
of Armis present address, was not proven. Extrinsic fraud exists when there is a
fraudulent act committed by the prevailing party outside of the trial of the case,
whereby the defeated party was prevented from presenting fully his side of the
case by fraud or deception practiced on him by the prevailing party.
Here, Armi contended that private respondent is aware of her present address
because they lived together as husband and wife in the condominium unit from
1982 to 1988 and because private respondent continued to give support to their
son until 1998.
To prove her claim, she presented (1) private respondents title over the
condominium unit; (2) receipts allegedly issued to private respondent for
payment of homeowners or association dues; (2) a photocopy of a January 14,
1991 deed of sale of the subject unit in favor of Armi; and (3) the subsequent title
issued to the latter. However, these documents only tend to prove private
respondents previous ownership of the unit and the subsequent transfer thereof
to Armi, but not the claimed live-in relationship of the parties. Neither does the
sale prove that the conveyance of the unit was part of private respondents
support to petitioner minor. Indeed, intimate relationships and family relations
cannot be inferred from what appears to be an ordinary business transaction.
Although the January 14, 1991 deed of sale[31] stated that Armi resides at 1175 L.
Guerrero St., Ermita, Manila, the same is not sufficient to prove that private
respondent has knowledge of Armis address because the former objected to the
offer of the deed for being a mere photocopy.[32] The counsel for petitioners
even admitted that they do not have the original of the deed and that per
certification of the Clerk of Court, the Notary Public who notarized the deed of
sale did not submit a copy of the notarized document as required by the rules.[33]
The deed cannot thus be the basis of ascribing knowledge of Armis address to
private respondent inasmuch as the authenticity thereof was neither admitted by
private respondent nor proven by petitioners.
While Armi presented the alleged love letters/notes from private respondent,
they were only attached as annexes to the petition and not formally offered as
evidence before the Court of Appeals. More importantly, said letters/notes do not
have probative value because they were mere photocopies and never proven to
be an authentic writing of private respondent. In the same vein, the affidavits[34]
of Armi and her sister, Corazon Espiritu, are of no evidentiary weight. The basic
rule of evidence is that unless the affiants themselves are placed on the witness
stand to testify on their affidavits, such affidavits must be rejected for being
hearsay. Stated differently, the declarants of written statements pertaining to
disputed facts must be presented at the trial for cross-examination.[35] Inasmuch
as Armi and her sister were not presented before the Court of Appeals to affirm
the veracity of their affidavits, the same are considered hearsay and without
probative value.
Ei incumbit probotio qui dicit, non qui negat. He who asserts, not he who denies,
must prove.[36] Armis claim that private respondent is aware of her present
address is anchored on the assertion of a live-in relationship and support to her
son. Since the evidence presented by Armi is not sufficient to prove the purported
cohabitation and support, it follows that private respondents knowledge of Armis
address was likewise not proven. Thus, private respondent could not have
deliberately concealed from the court that which was not shown to be known to
him. The Court of Appeals therefore correctly dismissed the petition for
annulment of judgment on the ground of failure to establish extrinsic fraud.
The proper remedy of a party aggrieved by a decision of the Court of Appeals in
an action to annul a judgment of a Regional Trial Court is a petition for review on
certiorari under Rule 45 of the Revised Rules of Civil Procedure, where only
questions of law may be raised. The resort of petitioner to the instant civil action
for certiorari under Rule 65 is therefore erroneous. The special civil action of
certiorari will not be allowed as a substitute for failure to timely file a petition for
review under Rule 45, which should be instituted within 15 days[37] from receipt
of the assailed decision or resolution. The wrong choice of remedy thus provides
another reason to dismiss this petition.[38]
Finally, petitioner failed to establish the merits of her petition to annul the trial
courts decision.
In an action for annulment of judgment, the petitioner must convince the court
that something may indeed be achieved should the assailed decision be annulled.
[39] Under Article 176[40] of the Family Code as amended by Republic Act (RA)
No. 9255, which took effect on March 19, 2004, illegitimate children shall use the
surname of their mother, unless their father recognizes their filiation, in which
case they may bear the fathers surname. In Wang v. Cebu Civil Registrar,[41] it was
held that an illegitimate child whose filiation is not recognized by the father, bears
only a given name and his mothers surname.
The name of the unrecognized illegitimate child identifies him as such. It is only
when said child is recognized that he may use his fathers surname, reflecting his
status as an acknowledged illegitimate child.

In the present case, it is clear from the allegations of Armi that petitioner minor is
an illegitimate child because she was never married to private respondent.

Considering that the latter strongly asserts that he is not the father of petitioner
minor, the latter is therefore an unrecognized illegitimate child. As such, he must
bear the surname of his mother.

G.R. No. 175799

NM ROTHSCHILD & SONS (AUSTRALIA) LIMITED, Petitioner, v. LEPANTO

CONSOLIDATED MINING COMPANY, Respondent.

LEONARDO-DE CASTRO, J.:

FACTS:
Respondent Lepanto Consolidated Mining Company filed with the RTC of Makati
City a Complaint against petitioner NM Rothschild & Sons (Australia) Limited
praying for a judgment declaring the loan and hedging contracts between the
parties void for being contrary to Article 2018 of the Civil Code of the Philippines
and for damages. Upon respondents’ motion, the trial court authorized
respondents counsel to personally bring the summons and Complaint to the
Philippine Consulate General in Sydney, Australia for the latter office to effect
service of summons on petitioner.
The petitioner prayed for the dismissal of the Complaint on the following grounds:
(a) the court has not acquired jurisdiction over the person of petitioner due to the
defective and improper service of summons; (b) the Complaint failed to state a
cause of action and respondent does not have any against petitioner; (c) the
action is barred by estoppel; and (d) respondent did not come to court with clean
hands.
The RTC issued an Order denying the Motion to Dismiss. According to the trial
court, there was a proper service of summons through the Department of Foreign
Affairs (DFA) on account of the fact that the defendant has neither applied for a
license to do business in the Philippines, nor filed with the Securities and
Exchange Commission (SEC) a Written Power of Attorney designating some person
on whom summons and other legal processes maybe served. The trial court also
held that the Complaint sufficiently stated a cause of action. The other allegations
in the Motion to Dismiss were brushed aside as matters of defense which can best
be ventilated during the trial.
ISSUES:
I. Whether petitioner is a real party in interest
II. Whether or not it was proper for the petitioner to resort to a petition for
certiorari with the CA
III. Whether or not the lower courts correctly denied the Motion to Dismiss
HELD:
(1) Respondent points out that as of the date of the filing of the Petition, there is
no such corporation that goes by the name NM Rothschild and Sons (Australia)
Limited. Petitioner claims that NM Rothschild and Sons (Australia) Limited still
exists as a corporation under the laws of Australia under the new name Investec
Australia Limited. We find the submissions of petitioner on the change of its
corporate name satisfactory and resolve not to dismiss the present Petition for
Review on the ground of not being prosecuted under the name of the real party in
interest.
(2) We have held time and again that an order denying a Motion to Dismiss is an
interlocutory order which neither terminates nor finally disposes of a case as it
leaves something to be done by the court before the case is finally decided on the
merits. The general rule, therefore, is that the denial of a Motion to Dismiss
cannot be questioned in a special civil action for Certiorari which is a remedy
designed to correct errors of jurisdiction and not errors of judgment. However, we
have likewise held that when the denial of the Motion to Dismiss is tainted with
grave abuse of discretion, the grant of the extraordinary remedy of Certiorari may
be justified
The resolution of the present Petition therefore entails an inquiry into whether
the Court of Appeals correctly ruled that the trial court did not commit grave
abuse of discretion in its denial of petitioners Motion to Dismiss. A mere error in
judgment on the part of the trial court would undeniably be inadequate for us to
reverse the disposition by the Court of Appeals.
(3) As correctly ruled by both the RTC and the CA, the alleged absence of a cause
of action, the alleged estoppel on the part of petitioner, and the argument that
respondent is in pari delicto in the execution of the challenged contracts, are not
grounds in a Motion to Dismiss as enumerated in Section 1, Rule 16[17] of the
Rules of Court. Rather, such defenses raise evidentiary issues closely related to the
validity and/or existence of respondents alleged cause of action and should
therefore be threshed out during the trial.
As regards the allegation of failure to state a cause of action, while the same is
usually available as a ground in a Motion to Dismiss, said ground cannot be ruled
upon in the present Petition without going into the very merits of the main case.
In the case at bar, respondent asserts in the Complaint that the Hedging Contracts
are void for being contrary to Article 2018[25] of the Civil Code. Respondent
claims that under the Hedging Contracts, despite the express stipulation for
deliveries of gold, the intention of the parties was allegedly merely to compel
each other to pay the difference between the value of the gold at the forward
price stated in the contract and its market price at the supposed time of delivery.
The determination of whether or not the Complaint stated a cause of action
would therefore involve an inquiry into whether or not the assailed contracts are
void under Philippine laws. This is, precisely, the very issue to be determined. The
trial court, therefore, correctly denied the Motion to Dismiss on this ground.

Petitioner alleges that the RTC has not acquired jurisdiction over its person on
account of the improper service of summons. Summons was served on petitioner
through the DFA, with respondents counsel personally bringing the summons and
Complaint to the Philippine Consulate General in Sydney, Australia. Moreover, by
seeking affirmative reliefs from the trial court, petitioner is deemed to have
voluntarily submitted to the jurisdiction of said court. A party cannot invoke the
jurisdiction of a court to secure affirmative relief against his opponent and after
obtaining or failing to obtain such relief, repudiate or question that same
jurisdiction. Consequently, the trial court cannot be considered to have
committed grave abuse of discretion amounting to lack or excess of jurisdiction in
the denial of the Motion to Dismiss on account of failure to acquire jurisdiction
over the person of the defendant.

NM ROTHSCHILD & SONS (AUSTRALIA) LIMITED vs LEPANTO CONSOLIDATED

MINING COMPANY

G.R. No. 175799

November 28, 2011

FACTS:

On August 30, 2005, Lepanto Consolidated Mining Company filed with the
Regional Trial Court of Makati City a Complaint against NM Rothschild & Sons
(Australia) Limited praying for a judgment declaring the loan and hedging
contracts between the parties void for being contrary to Article 2018 of the Civil
Code of the Philippines and for damages.
Upon respondent’s motion, the trial court authorized respondent’s counsel to
personally bring the summons and Complaint to the Philippine Consulate General
in Sydney, Australia for the latter office to effect service of summons on petitioner.
On October 20, 2005, petitioner filed a Special Appearance With Motion to
Dismiss praying for the dismissal of the Complaint on the grounds that the court
has not acquired jurisdiction over the person of petitioner due to the defective
and improper service of summons; the Complaint failed to state a cause of action;
respondent does not have any against petitioner; and other grounds.
On December 9, 2005, the trial court issued an Order denying the Motion to
Dismiss providing that there was a proper service of summons through the
Department of Foreign Affairs on account of the fact that the defendant has
neither applied for a license to do business in the Philippines, nor filed with the
Securities and Exchange Commission a Written Power of Attorney designating
some person on whom summons and other legal processes maybe served. The
trial court also held that the Complaint sufficiently stated a cause of action. The
other allegations in the Motion to Dismiss were brushed aside as matters of
defense which can best be ventilated during the trial.
On April 3, 2006, petitioner sought redress via a Petition for Certiorari with the
Court of Appeals, alleging that the trial court committed grave abuse of discretion
in denying its Motion to Dismiss.
On September 8, 2006, the Court of Appeals rendered the assailed Decision
dismissing the Petition for Certiorari.
Hence, petitioner filed the present petition assailing the Decision and Resolution
of the Court of Appeals.
ISSUE:
Whether or not the RTC is considered to have committed grave abuse of
discretion amounting to lack or excess of jurisdiction in the denial of the Motion
to Dismiss on account of its failure to acquire jurisdiction over the person of the
defendant.
HELD:
Petitioner alleges that the RTC has not acquired jurisdiction over its person on
account of the improper service of summons. Summons was served on petitioner
through the DFA, with respondent’s counsel personally bringing the summons and
Complaint to the Philippine Consulate General in Sydney, Australia.
Respondent argues that extraterritorial service of summons upon foreign private
juridical entities is not proscribed under the Rules of Court.
Section 15, Rule 14, however, is the specific provision dealing precisely with the
service of summons on a defendant which does not reside and is not found in the
Philippines.
Breaking down Section 15, Rule 14, it is apparent that there are only four
instances wherein a defendant who is a non-resident and is not found in the
country may be served with summons by extraterritorial service, to wit: (1) when
the action affects the personal status of the plaintiffs; (2) when the action relates
to, or the subject of which is property, within the Philippines, in which the
defendant claims a lien or an interest, actual or contingent; (3) when the relief
demanded in such action consists, wholly or in part, in excluding the defendant
from any interest in property located in the Philippines; and (4) when the
defendant non-resident's property has been attached within the Philippines. In
these instances, service of summons may be effected by (a) personal service out
of the country, with leave of court; (b) publication, also with leave of court; or (c)
any other manner the court may deem sufficient.
Undoubtedly, extraterritorial service of summons applies only where the action is
in rem or quasi in rem, but not if an action is in personam. . On the other hand,
when the defendant or respondent does not reside and is not found in the
Philippines, and the action involved is in personam, Philippine courts cannot try
any case against him because of the impossibility of acquiring jurisdiction over his
person unless he voluntarily appears in court
It is likewise settled that an action in personam is lodged against a person based
on personal liability; an action in rem is directed against the thing itself instead of
the person; while an action quasi in rem names a person as defendant, but its
object is to subject that person’s interest in a property to a corresponding lien or
obligation.
The Complaint in the case at bar is an action to declare the loan and Hedging
Contracts between the parties void with a prayer for damages. It is a suit in which
the plaintiff seeks to be freed from its obligations to the defendant under a
contract and to hold said defendant pecuniarily liable to the plaintiff for entering
into such contract. It is therefore an action in personam, unless and until the
plaintiff attaches a property within the Philippines belonging to the defendant, in
which case the action will be converted to onequasi in rem.

Since the action involved in the case at bar is in personam and since the
defendant, petitioner Rothschild/Investec, does not reside and is not found in the
Philippines, the Philippine courts cannot try any case against it because of the
impossibility of acquiring jurisdiction over its person unless it voluntarily appears
in court

In this regard, respondent vigorously argues that petitioner should be held to have
voluntarily appeared before the trial court when it prayed for, and was actually
afforded, specific reliefs from the trial court.

The Court therefore rule that petitioner, by seeking affirmative reliefs from the
trial court, is deemed to have voluntarily submitted to the jurisdiction of said
court. A party cannot invoke the jurisdiction of a court to secure affirmative relief
against his opponent and after obtaining or failing to obtain such relief, repudiate
or question that same jurisdiction
MERRILL LYNCH FUTURES v. COURT OF APPEALS
Consequently, the trial court cannot be considered to have committed grave
abuse of discretion amounting to lack or excess of jurisdiction in the denial of the G.R. No. 97816; 24 July 1992; Narvasa
Motion to Dismiss on account of failure to acquire jurisdiction over the person of
the defendant. FACTS:

Petition is DENIED.  ML FUTURES (a foreign corporation not licensed to do business in the PH) and
Spouses Lara entered into a "Futures Customer Agreement", in virtue of
which the former agreed to act as the Spouses Laras’ broker for the purchase
and sale of future contracts in the U.S.

o Pursuant to the contract, orders to buy and sell futures contracts

were transmitted to ML FUTURES by the Spouses Lara "through the
facilities of Merrill Lynch Philippines, Inc. (MLPI), a Philippine
corporation and a company servicing ML Futures' customers.
 From the outset, Spouses Lara knew and was duly advised that MLPI was not
a broker in futures contracts, and that it did not have a license from the SEC to
operate as a commodity trading advisor (i.e., an entity which, not being a
broker, furnishes advice on commodity futures to persons who trade in
futures contracts).
 In line with the above mentioned agreement and through MLPI, Spouses Lara
actively traded in futures contracts, including "stock index futures" for 4 years
or so, i.e., from 1983 to October, 1987, there being more or less regular
accounting and corresponding remittances of money (or crediting or debiting)
made between the Spouses and ML FUTURES.
 Because of a loss of US $160,749.69 incurred in respect of 3 transactions
involving "index futures," and after setting this off against an amount of US
$75,913.42 then owing by ML FUTURES to Spouses Lara, the latter became
indebted to ML FUTURES for the ensuing balance of US $84,836.27, which the
latter asked them to pay.
 Spouses Lara however refused to pay this balance, alleging that the
transactions were null and void because MLPI had no license to operate as a
commodity and/or financial futures broker. They further averred that they
had not doing business with ML Futures but with another corporation MLPI.
 As a consequence of such refusal, ML FUTURES filed a complaint with the RTC
QC for the recovery of a debt and interest thereon. Preliminary attachment
issued Ex Parte and the Spouses were duly served with Summons.
 Spouses Lara then filed a Motion to Dismiss on the grounds that (1) ML
FUTURES had no legal capacity to sue and (2) the complaints state no cause of
action.
 RTC granted the Motion to Dismiss. CA affirmed the dismissal. ML FUTURES
appealed to the SC on certiorari.
ISSUES/HELD:
1. WON it was proper for the lower courts to grant the Motion to Dismiss –
NO.
2. WON ML Futures was doing business in the Philippines without license –
YES.
3. WON – in light of the fact that the Laras were fully aware of its lack of
license to do business in the Philippines, and in relation to those
transactions had made payments to, and received money from it for several
years –the Lara Spouses are estopped to impugn ML FUTURES capacity to
sue them in the courts of the forum – YES.
RATIO:
1. WON it was proper for the lower courts to grant the Motion to Dismiss –
NO.
 When such a ground is asserted in a Motion to Dismiss, the general rule
governing evidence on motions applies. However, there was no affidavit or
deposition attached to the Motion to Dismiss or thereafter offered as proof of
the averments of their motion. The motion was not even verified.
 On the ground that the complaint states no cause of action, the test of the
sufficiency of the facts alleged in the complaint as constituting a cause of
action is whether or not, admitting the facts alleged, the court might render a
valid judgment upon the same in accordance with the prayer of the
complaint. Indeed, it is an error for a judge to conduct preliminary hearing
and receive evidence on the affirmative defense of failure of the complaint to
state a cause of action.
2. WON ML FUTURES was doing business in the Philippines without license –
YES.
 The facts on record adequately establish that ML FUTURES, operating in the
US, had indeed done business with the Lara Spouses in the Philippines over
several years, had done so at all times through MLPI, a corporation organized
in this country, and had executed all these transactions without ML FUTURES
being licensed to so transact business here, and without MLPI being
authorized to operate as a commodity futures trading advisor.
 o These are the factual findings of the RTC, CA and the SEC which denied  Given these facts, and assuming that the Lara Spouses were aware from the
MLPI's application to operate as a commodity futures trading advisor, a outset that ML FUTURES had no license to do business in this country and
denial subsequently affirmed by the CA. MLPI, no authority to act as broker for it, it would appear quite inequitable for
the Laras to evade payment of an otherwise legitimate indebtedness due and
 Further, the Laras did transact business with ML FUTURES through its agent
owing to ML FUTURES upon the plea that it should not have done business in
corporation organized in the Philippines, it being unnecessary to determine
this country in the first place, or that its agent in this country, MLPI, had no
whether this domestic firm was MLPI or Merrill Lynch Pierce Fenner & Smith
license either to operate as a "commodity and/or financial futures broker."
(MLPI's alleged predecessor). The fact is that ML FUTURES did deal with
futures contracts in exchanges in the United States in behalf and for the  The general rule that in the absence of fraud of person who has contracted or
account of the Lara Spouses, and that on several occasions the latter received otherwise dealt with an association in such a way as to recognize and in effect
account documents and money in connection with those transactions. admit its legal existence as a corporate body is thereby estopped to deny its
corporate existence in any action leading out of or involving such contract or
 The last transaction executed by ML FUTURES in the Laras's behalf had
dealing, unless its existence is attacked for causes which have arisen since
resulted in a loss amounting to US $160,749.69. In relation to this loss, ML
making the contract or other dealing relied on as an estoppel and this applies
FUTURES had credited the Laras with the amount of US$75,913.42 — which it
to foreign as well as domestic corporations.
(ML FUTURES) then admittedly owed the spouses — and thereafter sought to
collect the balance, US$84,836.27, but the Laras had refused to pay (for the
reasons already above stated).

3. WON – in light of the fact that the Laras were fully aware of its lack of
COMMUNICATION MATERIALS AND DESIGN, INC et al vs. CA et al.
license to do business in the Philippines, and in relation to those
G.R.No.102223
transactions had made payments to, and received money from it for several
August 22, 1996
years –the Lara Spouses are estopped to impugn ML FUTURES capacity to
sue them in the courts of the forum – YES. FACTS: Petitioners COMMUNICATION MATERIALS AND DESIGN, INC., (CMDI) and
ASPAC MULTI-TRADE INC., (ASPAC) are both domestic corporations. Private
 The Laras received benefits generated by their business relations with ML
Respondents ITEC, INC. and/or ITEC, INTERNATIONAL, INC. (ITEC) are corporations
FUTURES. Those business relations, according to the Laras themselves,
duly organized and existing under the laws of the State of Alabama, USA. There is
spanned a period of 7 years; and they evidently found those relations to be of
no dispute that ITEC is a foreign corporation not licensed to do business in the
such profitability as warranted their maintaining them for that not
Philippines.
insignificant period of time; otherwise, it is reasonably certain that they would
have terminated their dealings with ML FUTURES much, much earlier. ITEC entered into a contract with ASPAC referred to as “Representative
Agreement”. Pursuant to the contract, ITEC engaged ASPAC as its “exclusive
 In fact, even as regards their last transaction, in which the Laras allegedly
representative” in the Philippines for the sale of ITEC’s products, in consideration
suffered a loss in the sum of US$160,749.69, the Laras nonetheless still
of which, ASPAC was paid a stipulated commission. Through a “License
received some monetary advantage, for ML FUTURES credited them with the
Agreement” entered into by the same parties later on, ASPAC was able to
amount of US $75,913.42 then due to them, thus reducing their debt to US
incorporate and use the name “ITEC” in its own name. Thus , ASPAC Multi-Trade,
$84,836.27.
Inc. became legally and publicly known as ASPAC-ITEC (Philippines).
One year into the second term of the parties’ Representative Agreement, ITEC
decided to terminate the same, because petitioner ASPAC allegedly violated its
contractual commitment as stipulated in their agreements. ITEC charges the
petitioners and another Philippine Corporation, DIGITAL BASE COMMUNICATIONS,
INC. (DIGITAL), the President of which is likewise petitioner Aguirre, of using
knowledge and information of ITEC’s products specifications to develop their own
line of equipment and product support, which are similar, if not identical to ITEC’s
own, and offering them to ITEC’s former customer.
The complaint was filed with the RTC-Makati by ITEC, INC. Defendants filed a MTD
the complaint on the following grounds: (1) That plaintiff has no legal capacity to
sue as it is a foreign corporation doing business in the Philippines without the
required BOI authority and SEC license, and (2) that plaintiff is simply engaged in
forum shopping which justifies the application against it of the principle of “forum
non conveniens”. The MTD was denied.
Petitioners elevated the case to the respondent CA on a Petition for Certiorari and
Prohibition under Rule 65 of the Revised ROC. It was dismissed as well. MR
denied, hence this Petition for Review on Certiorari under Rule 45.
ISSUE:
1. Did the Philippine court acquire jurisdiction over the person of the petitioner
corporation, despite allegations of lack of capacity to sue because of non-
registration?
2. Can the Philippine court give due course to the suit or dismiss it, on the
principle of forum non convenience?
HELD: petition dismissed.
1. YES; We are persuaded to conclude that ITEC had been “engaged in” or “doing
business” in the Philippines for some time now. This is the inevitable result after a
scrutiny of the different contracts and agreements entered into by ITEC with its
various business contacts in the country. Its arrangements, with these entities
indicate convincingly that ITEC is actively engaging in business in the country.
A foreign corporation doing business in the Philippines may sue in Philippine
Courts although not authorized to do business here against a Philippine citizen or
entity who had contracted with and benefited by said corporation. To put it in
another way, a party is estopped to challenge the personality of a corporation
after having acknowledged the same by entering into a contract with it. And the
doctrine of estoppel to deny corporate existence applies to a foreign as well as to
domestic corporations. One who has dealt with a corporation of foreign origin as
a corporate entity is estopped to deny its corporate existence and capacity.
In Antam Consolidated Inc. vs. CA et al. we expressed our chagrin over this
commonly used scheme of defaulting local companies which are being sued by
unlicensed foreign companies not engaged in business in the Philippines to invoke
the lack of capacity to sue of such foreign companies. Obviously, the same ploy is
resorted to by ASPAC to prevent the injunctive action filed by ITEC to enjoin
petitioner from using knowledge possibly acquired in violation of fiduciary
arrangements between the parties.
2. YES; Petitioner’s insistence on the dismissal of this action due to the
application, or non application, of the private international law rule of forum non
conveniens defies well-settled rules of fair play. According to petitioner, the
Philippine Court has no venue to apply its discretion whether to give cognizance
or not to the present action, because it has not acquired jurisdiction over the
person of the plaintiff in the case, the latter allegedly having no personality to sue
before Philippine Courts. This argument is misplaced because the court has
already acquired jurisdiction over the plaintiff in the suit, by virtue of his filing the
original complaint. And as we have already observed, petitioner is not at liberty to
question plaintiff’s standing to sue, having already acceded to the same by virtue
of its entry into the Representative Agreement referred to earlier.
Thus, having acquired jurisdiction, it is now for the Philippine Court, based on the
facts of the case, whether to give due course to the suit or dismiss it, on the
principle of forum non convenience. Hence, the Philippine Court may refuse to
assume jurisdiction in spite of its having acquired jurisdiction. Conversely, the
court may assume jurisdiction over the case if it chooses to do so; provided, that
the following requisites are met:
1) That the Philippine Court is one to which the parties may conveniently resort
to;
2) That the Philippine Court is in a position to make an intelligent decision as to
the law and the facts; and,
3) That the Philippine Court has or is likely to have power to enforce its decision.
The aforesaid requirements having been met, and in view of the court’s
disposition to give due course to the questioned action, the matter of the present
forum not being the “most convenient” as a ground for the suit’s dismissal,
deserves scant consideration.

MERRILL LYNCH FUTURES, INC., petitioner,

vs.
HON. COURT OF APPEALS, and the SPOUSES PEDRO M. LARA and ELISA G.
LARA, respondents.

FACTS:

1. On November 23, 1987, Merrill Lynch Futures, Inc. (hereafter, simply ML

FUTURES) filed a complaint with the Regional Trial Court at Quezon City against
the Spouses Pedro M. Lara and Elisa G. Lara for the recovery of a debt and interest
thereon, damages, and attorney's fees.

2. ML FUTURES alleged the following:

1) that on September 28, 1983 it entered into a Futures Customer Agreement

with the defendant spouses (Account No. 138-12161), in virtue of which it agreed
to act as the latter's broker for the purchase and sale of futures contracts in the
U.S.;
2) that pursuant to the contract, orders to buy and sell futures contracts were
transmitted to ML FUTURES by the Lara Spouses "through the facilities of Merrill
Lynch Philippines, Inc., a Philippine corporation and a company servicing plaintiffs
customers; 2
3) that from the outset, the Lara Spouses "knew and were duly advised that
Merrill Lynch Philippines, Inc. was not a broker in futures contracts," and that it
"did not have a license from the Securities and Exchange Commission to operate
as a commodity trading advisor (i.e., 'an entity which, not being a broker,
furnishes advice on commodity futures to persons who trade in futures
contracts');
4) that in line with the above mentioned agreement and through said Merrill
Lynch Philippines, Inc., the Lara Spouses actively traded in futures contracts,
including "stock index futures" for four years or so, i.e., from 1983 to October,
1987, 3 there being more or less regular accounting and corresponding
remittances of money (or crediting or debiting) made between the spouses and
ML FUTURES;
5) that because of a loss amounting to US$160,749.69 incurred in respect of three
(3) transactions involving "index futures," and after setting this off against an
amount of US$75,913.42 then owing by ML FUTURES to the Lara Spouses, said
spouses became indebted to ML FUTURES for the ensuing balance of
US$84,836.27, which the latter asked them to pay;
6) that the Lara Spouses however refused to pay this balance, "alleging that the
transactions were null and void because Merrill Lynch Philippines, Inc., the
Philippine company servicing accounts of plaintiff, . . had no license to operate as
a 'commodity and/or financial futures broker.'"
3. On January 12, 1988, the Trial Court promulgated an Order sustaining the
motion to dismiss, directing the dismissal of the case and discharging the writ of
preliminary attachment. It later denied ML FUTURES's motion for reconsideration,
by Order dated February 29, 1988. ML FUTURES appealed to the Court of Appeals
which affirmed the TC’s decision. Hence, this petition.
ISSUE:WON the petitioner has the legal capacity to sue.
HELD:
1. The facts on record adequately establish that ML FUTURES, operating in the
United States, had indeed done business with the Lara Spouses in the Philippines
over several years, had done so at all times through Merrill Lynch Philippines, Inc.
(MLPI), a corporation organized in this country, and had executed all these
transactions without ML FUTURES being licensed to so transact business here,
and without MLPI being authorized to operate as a commodity futures trading
advisor. These are the factual findings to both the Trial Court and the Court of
Appeals. These, too, are the conclusions of the Securities & Exchange Commission
which denied MLPI's application to operate as a commodity futures trading
advisor, a denial subsequently affirmed by the Court of Appeals. Prescinding from
the proposition that factual findings of the Court of Appeals are generally
conclusive, the Supreme Court has been cited to no circumstance of substance to
warrant reversal of said Appellate Court's findings or conclusions in this case.
Further, the Laras did transact business with ML FUTURES through its agent
corporation organized in the Philippines, it being unnecessary to determine
whether this domestic firm was MLPI (Merrill Lynch Philippines, Inc.) or Merrill
Lynch Pierce Fenner& Smith (MLPI's alleged predecessor). The fact is that ML
FUTURES did deal with futures contracts in exchanges in the United States in
behalf and for the account of the Lara Spouses, and that on several occasions the
latter received account documents and money in connection with those
transactions. Given these facts, if indeed the last transaction executed by ML
FUTURES in the Laras's behalf had resulted in a loss amounting to US $160,749.69;
that in relation to this loss, ML FUTURES had credited the Laras with the amount
of US $ 75,913.42 — which it (ML FUTURES) then admittedly owed the spouses —
and thereafter sought to collect the balance, US $84,836.27, but the Laras had
refused to pay (for the reasons already above stated).
2. The Laras received benefits generated by their business relations with ML
FUTURES. Those business relations, according to the Larasthemselves, spanned a
period of 7 years; and they evidently found those relations to be of such
profitability as warranted their maintaining them for that not insignificant period
of time; otherwise, it is reasonably certain that they would have terminated their
dealings with ML FUTURES much, much earlier. In fact, even as regards their last
transaction, in which the Laras allegedly suffered a loss in the sum of
US$160,749.69, the Laras nonetheless still received some monetary advantage,
for ML FUTURES credited them with the amount of US $75,913.42 then due to
them, thus reducing their debt to US $84,836.27. Given these facts, and assuming
that the Lara Spouses were aware from the outset that ML FUTURES had no
license to do business in this country and MLPI, no authority to act as broker for
it, it would appear quite inequitable for the Laras to evade payment of an
otherwise legitimate indebtedness due and owing to ML FUTURES upon the plea
that it should not have done business in this country in the first place, or that its
agent in this country, MLPI, had no license either to operate as a "commodity
and/or financial futures broker." Considerations of equity dictate that, at the very
least, the issue of whether the Laras are in truth liable to ML FUTURES and if so in
what amount, and whether they were so far aware of the absence of the requisite
licenses on the part of ML FUTURES and its Philippine correspondent, MLPI, as to
be estopped from alleging that fact as a defense to such liability, should be
ventilated and adjudicated on the merits by the proper trial court.
COMMUNICATION MATERIALS AND DESIGN, INC.
vs.
THE COURT OF APPEALS

FACTS:

1. Petitioners COMMUNICATION MATERIALS AND DESIGN, INC. and ASPAC MULTI-

TRADE INC. are both domestic corporations, while petitioner Francisco S. Aguirre
is their President and majority stockholder. Private Respondents ITEC, INC. and/or
ITEC, INTERNATIONAL, INC. are corporations duly organized and existing under the
laws of the State of Alabama, United States of America (a foreign corporation not
licensed to do business in the Philippines).

2. On August 14, 1987, ITEC entered into a contract with ASPAC referred to as
"Representative Agreement" initially for a term of 24 months and was renewed
for another 24 months. Pursuant to the contract, ITEC engaged ASPAC as its
"exclusive representative" in the Philippines for the sale of ITEC's products, in
consideration of which, ASPAC was paid a stipulated commission (signed by G.A.
Clark and Francisco S. Aguirre, presidents of ITEC and ASPAC).

3. Through a "License Agreement" they’ve entered into on November 10, 1988,

ASPAC was able to incorporate and use the name "ITEC" in its own name. ASPAC
Multi-Trade, Inc. became legally and publicly known as ASPAC-ITEC (Philippines)
which sold electronic products, exported by ITEC, to their sole customer, the
Philippine Long Distance Telephone Company.
4. To facilitate their transactions, ASPAC and PLDT executed a document entitled
"PLDT-ASPAC/ITEC PROTOCOL" which defined the project details for the supply of
ITEC's Interface Equipment in connection with the Fifth Expansion Program of
PLDT.
5. One year into the second term of the Representative Agreement, ITEC decided
to terminate the same because of the alleged violation of ASPAC in its contractual
commitment as stipulated in their agreements.
6. ITEC charged the petitioners and another Philippine Corporation, DIGITAL BASE
COMMUNICATIONS, INC. the President of which is likewise petitioner Aguirre, of
using knowledge and information of ITEC's products specifications to develop
their own line of equipment and product support, which are similar, if not
identical to ITEC's own, and offering them to ITEC's former customer.
7. On January 31, 1991, ITEC, INC. filed a complaint with the Regional Trial Court
of Makati and sought to enjoin, first, preliminarily and then, after trial,
permanently; (1) DIGITAL, CMDI, and Francisco Aguirre and their agents and
business associates, to cease and desist from selling or attempting to sell to PLDT
and to any other party, products which have been copied or manufactured "in like
manner, similar or identical to the products, wares and equipment of plaintiff,"
and (2) defendant ASPAC, to cease and desist from using in its corporate name,
letter heads, envelopes, sign boards and business dealings, plaintiff's trademark,
internationally known as ITEC; and the recovery from defendants in solidum,
damages of at least P500,000.00, attorney's fees and litigation expenses.
8. Defendants filed a motion to dismiss on the following grounds: (1) That plaintiff
has no legal capacity to sue as it is a foreign corporation doing business in the
Philippines without the required BOI authority and SEC license, and (2) that
plaintiff is simply engaged in forum shopping which justifies the application
against it of the principle of "forum non conveniens".
9. RTC denied the MTD for being devoid of legal merit with a rejection of both
grounds relied upon and directed the issuance of a writ of preliminary injunction.
10. Petitioners elevated the case to the Court of Appeals on a Petition for
Certiorari and Prohibition under Rule 65 of the Revised Rules of Court, assailing
and seeking the nullification and the setting aside of the Order and the Writ of
Preliminary Injunction issued by the Regional Trial Court.
11. MR was also filed which was likewise denied. Hence, this Petition for Review
on Certiorari under Rule 45.
ISSUE: Whether or not ITEC has legal capacity to sue in Phil. courts.
HELD: YES. ITEC had been “engaged in” or “doing business” in the Philippines. This
is the inevitable result after a scrutiny of the different contracts and agreements
entered into by ITEC with its various business contacts in the country. Its
arrangements, with these entities indicate convincingly that ITEC is actively
engaging in business in the country.
A foreign corporation doing business in the Philippines may sue in Philippine
Courts although not authorized to do business here against a Philippine citizen or
entity who had contracted with and benefited by said corporation. A party is
estopped to challenge the personality of a corporation after having acknowledged
the same by entering into a contract with it. And the doctrine of estoppel to deny
corporate existence applies to a foreign as well as to domestic corporations. One
who has dealt with a corporation of foreign origin as a corporate entity is
estopped to deny its corporate existence and capacity.
Petitioner’s insistence on the dismissal of this action due to the application, or
non application, of the private international law rule of forum non conveniens
defies well-settled rules of fair play. According to petitioner, the Philippine Court
has no venue to apply its discretion whether to give cognizance or not to the
present action, because it has not acquired jurisdiction over the person of the
plaintiff in the case, the latter allegedly having no personality to sue before
Philippine Courts. This argument is misplaced because the court has already
acquired jurisdiction over the plaintiff in the suit, by virtue of his filing the original
complaint. And as we have already observed, petitioner is not at liberty to
question plaintiff’s standing to sue, having already acceded to the same by virtue
of its entry into the Representative Agreement referred to earlier.
Thus, having acquired jurisdiction, it is now for the Philippine Court, based on the
facts of the case, whether to give due course to the suit or dismiss it, on the
principle of forum non convenience. Hence, the Philippine Court may refuse to
assume jurisdiction in spite of its having acquired jurisdiction. Conversely, the
court may assume jurisdiction over the case if it chooses to do so; provided, that
the following requisites are met:

1) That the Philippine Court is one to which the parties may conveniently
resort to

2. That the Philippine Court is in a position to make an intelligent decision

as to the law and the facts; and,

3. That the Philippine Court has or is likely to have power to enforce its
decision. ALFRED HAHN, petitioner,
The aforesaid requirements having been met, and in view of the court’s vs.
disposition to give due course to the questioned action, the matter of the present COURT OF APPEALS and BAYERSCHE MOTOREN WERKE AKTIENGSELLSCHAFT
forum not being the “most convenient” as a ground for the suit’s dismissal, (BMW), respondents.
deserves scant consideration. Facts:

1. Petitioner Alfred Hahn is a Filipino citizen doing business under the name
and style "Hahn-Manila." On the other hand, private respondent
BayerischeMotorenWerkeAktiengesellschaft (BMW) is a non-Gresident
foreign corporation existing under the laws of the former Federal Republic
of Germany, with principal office at Munich, Germany.

2. On March 7, 1967, Alfred Hahn executed in favor of BMW a "Deed of

Assignment with Special Power of Attorney. Per the agreement, they
"continued business relations as has been usual in the past without a
formal contract."

3. But on February 16, 1993, in a meeting with a BMW representative and

the president of Columbia Motors Corporation (CMC), Jose Alvarez,
petitioner was informed that BMW was arranging to grant the exclusive
dealership of BMW cars and products to CMC, which had expressed
interest in acquiring the same.

4. On February 24, 1993, petitioner received confirmation of the information

from BMW which, in a letter, expressed dissatisfaction with various
aspects of petitioner's business, mentioning among other things, decline
 in sales, deteriorating services, and inadequate showroom and warehouse
facilities, and petitioner's alleged failure to comply with the standards for
an exclusive BMW dealer.
5. Nonetheless, BMW expressed willingness to continue business relations
with the petitioner on the basis of a "standard BMW importer" contract,
otherwise, it said, if this was not acceptable to petitioner, BMW would
have no alternative but to terminate petitioner's exclusive dealership
effective June 30, 1993.
6. Petitioner protested, claiming that the termination of his exclusive
dealership would be a breach of the Deed of Assignment and insisted that
as long as the assignment of its trademark and device subsisted, he
remained BMW's exclusive dealer in the Philippines because the
assignment was made in consideration of the exclusive dealership.
7. Because of Hahn's insistence, BMW withdrew on March 26, 1993 its offer
of a "standard importer contract" and terminated the exclusive dealer
relationship effective June 30, 1993.
8. On April 29, 1993, BMW proposed that Hahn and CMC jointly import and
distribute BMW cars and parts.
9. Hahn found the proposal unacceptable thus, on May 14, 1993, he filed a
complaint for specific performance and damages against BMW to compel
it to continue the exclusive dealership. Later he filed an amended
complaint to include an application for temporary restraining order and
for writs of preliminary, mandatory and prohibitory injunction to enjoin
BMW from terminating his exclusive dealership.
10. The case was raffled to Branch 104 of the Quezon City Regional Trial
Court, which on June 14, 1993 issued a temporary restraining order.
Summons and copies of the complaint and amended complaint were
served on the private respondent through the Department of Trade and
Industry, pursuant to Rule 14, §14 of the Rules of Court. The order,
summons and copies of the complaint and amended complaint were later
sent by the DTI to BMW via registered mail on June 15, 1993 and received
by the latter on June 24, 1993.
11. On June 30, 1993, the trial court granted the writ of preliminary
injunction upon the filing of a bond of P100, 000.00. On July 13, 1993,
following the posting of the required bond, a writ of preliminary
injunction was issued.
12. On July 1, 1993, BMW moved to dismiss the case, contending that the
trial court did not acquire jurisdiction over it through the service of
summons on the Department of Trade and Industry, because it (BMW)
was a foreign corporation and it was not doing business in the Philippines
and that the execution of the Deed of Assignment was an isolated
transaction; that Hahn was not its agent because the latter undertook to
assemble and sell BMW cars and products without the participation of
BMW and sold other products; and that Hahn was an indentor or
middleman transacting business in his own name and for his own account.
13. Hahn opposed the motion and argued that BMW was doing business in
the Philippines through him as its agent, as shown by the fact that BMW
invoices and order forms were used to document his transactions; that he
gave warranties as exclusive BMW dealer; that BMW officials periodically
inspected standards of service rendered by him; and that he was
described in service booklets and international publications of BMW as a
"BMW Importer" or "BMW Trading Company" in the Philippines.
14. The trial court deferred resolution of the motion to dismiss until after trial
on the merits for the reason that the grounds advanced by BMW in its
motion did not seem to be indubitable.
15. BMW did not file any reconsideration and instead filed a petition
for certiorari with the Court of Appeals.
16. Court of Appeals dismissed petitioner's complaint against BMW and held
that petitioner was a mere indentor or broker and not an agent because
he alone had contacts with individuals or entities interested in acquiring
BMW vehicles.
17. Hence, this appeal by Petitioner contending that the Court of Appeals
erred (1) in finding that the trial court gravely abused its discretion in
deferring action on the motion to dismiss and (2) in finding that private
 respondent BMW is not doing business in the Philippines and, for this
reason, dismissing petitioners case.
ISSUE: WHETHER OR NOT petitioner Alfred Hahn is the agent or distributor in the
Philippines of private respondent BMW.
HELD: YES.The Supreme Court held that agency is shown when Hahn claimed he
took orders for BMW cars and transmits them to BMW. Then BMW fixes the down
payment and pricing charges and will notify Hahn of the scheduled production
month for the orders, and reconfirm the orders by signing and returning to Hahn
the acceptance sheets.
The payment is made by the buyer directly to BMW. Title to cars purchased
passed directly to the buyer and Hahn never paid for the purchase price of BMW
cars sold in the Philippines. Hahn was credited with a commission equal to 14% of
the purchase price upon the invoicing of a vehicle order by BMW. Upon
confirmation in writing that the vehicles had been registered in the Philippines
and serviced by him, he received an additional 3% of the full purchase price. Hahn
performed after-sale services, including, warranty services for which he received
reimbursement from BMW and all orders were on invoices and forms of BMW.
Moreover, the Court distinguished an agent from a broker. The court ruled that an
agent receives a commission upon the successful conclusion of a sale. On the
other hand, a broker earns his pay merely by bringing the buyer and the seller
together, even if no sale is eventually made.
LITONJUA GROUP OF COMPANIES, EDDIE LITONJUA and DANILO LITONJUA,
petitioners,
vs.
TERESITA VIGAN, respondent.
Facts:
1. TERESITA VIGAN’s version: She was hired by the Litonjua Group of
Companies on February 2, 1979 as telex operator. Later, she was assigned
as accounting and payroll clerk under the supervision of DaniloLitonjua.
She had been performing well until 1995, when DaniloLitonjua who was
already naturally a (sic) very ill-tempered, ill-mouthed and violent
employer, became more so due to business problems. The incidents
prompted Vigan to write DaniloLitonjua letters asking why she was
treated so and what was her fault. DaniloLitonjua charged that Vigan had
been hysterical, emotional and created scenes at the office. He even
required her to secure psychiatric assistance. But despite proof that she
was not suffering from psychosis or organic brain syndrome as certified to
by a Psychiatrist of DaniloLitonjua’s choice still she was denied by the
guards entry to her work upon instructions again of DaniloLitonjua. Left
with no alternative, Vigan filed this case for illegal dismissal, alleging she
was receiving a monthly salary of P8,000.00 at the time she was
unlawfully terminated.
2. Litonjuas version: They negate the existence of the Litonjua Group of
Companies and the connection of Eduardo Litonjua thereto. They
 contended that Vigan was employed by ACT Theater, Inc., where
DaniloLitonjua is a Director. They dispute the charge of illegal dismissal for
it was Vigan who ceased to report for work despite notices and likewise
contest the P8,000.00 monthly salary alleged by Vigan, claiming it was
merely P6,850.00.
They claim that Vigan was a habitual absentee. Her performance had been
satisfactory, but then starting March 15, 1996 she had become emotional,
hysterical, uncontrollable and created disturbances at the office with her crying
and shouting for no reason at all. The incident was repeated on April 3, 1996, May
24, 1996 and on June 4, 1996. Thus alarmed, on July 24, 1996 Vigan was required
by management to undergo medical and psychological examination at the
company’s expense and naming three doctors to attend to her. Dr.Baltazar Reyes
and Dr. Tony Perlas of the Philippine General Hospital and Dr. Lourdes Ignacio of
the Medical Center Manila. But they claim that Vigan refused to comply.
On August 2, 1996, Vigan again had another breakdown, hysterical, shouting and
crying as usual for about an hour, and then she just left the premises without a
word. The next day, August 3, 1996, Saturday, she came to the office and
explained she was not feeling well the day before. After that Vigan went AWOL
and did not heed telegram notices from her employer made on August 26, 1996
and on September 9, 1996. She instead filed the instant suit for illegal dismissal."
3. On June 10, 1997, Labor Arbiter Ernesto S. Dinopol rendered his
decision4 finding Vigan diseased and unfit for work under Article 284 of
the Labor Code5 and awarded corresponding separation pay.
4. Vigan appealed the decision to the National Labor Relations Commission
which modified7 the arbiter’s decision by ruling that Art. 284 of the Labor
Code is inapplicable in the instant case but affirmed the legality of the
termination of the complainant based on her having effectively
abandoned her job; the rest of the decision was affirmed. Vigan moved
for a partial reconsideration which was denied in a resolution dated
August 7, 1998.
5. Vigan filed a petition for certiorari with the Court of Appeals which
reversed the NLRC Resolution. It ordered the respondents jointly and
severally to: (a) Reinstate VIGAN if she so desires; or (b) pay her
separation compensation in the sum of P8,000.00 multiplied by her years
of service counted from February 2, 1979 up to the time this Decision
becomes final; and in either case to pay Vigan; (c) full back wages from
the time she was illegally dismissed up to the date of the finality of this
Decision; (d) moral damages in the amount of P40,000.00; (e) exemplary
damages in the amount of P15,000.00; and (f) attorney’s fees of
P10,000.00.
6. Litonjuas filed their motion for reconsideration which was denied. Hence,
the filing of the instant petition for review on certiorari. alleging the
following grounds:
ISSUE: WHETHER OR NOT “LITONJUA GROUP OF COMPANIES", WHICH HAS NO
JURIDICAL PERSONALITY, BUT ONLY A GENERIC NAME TO DESCRIBE THE VARIOUS
COMPANIES WHICH THE LITONJUA FAMILY HAS INTERESTS, CAN BE LEGALLY
CONSTRUED AS RESPONDENT’S EMPLOYER.
HELD: NO . Only natural or juridical persons or entities authorized by law may be
parties to a civil action and every action must be prosecuted and defended in the
name of the real parties in interest.Petitioners’ claim that Litonjua Group of
Companies is not a legal entity with juridical personality hence cannot be a party
to this suit deserves consideration since respondent failed to prove otherwise. In
fact, respondent Vigan’s own allegation in her Memorandum supported
petitioners’ claim that Litonjua group of companies does not exist when she
stated therein that instead of naming each and every corporation of the Litonjua
family where she had rendered accounting and payroll works, she simply referred
to these corporations as the Litonjua group of companies, thus, respondent
merely used such generic name to describe collectively the various corporations
in which the Litonjua family has business interest. Considering the non-existence
of the Litonjua group of companies as a juridical entity and petitioner Eddie
Litonjua’s denial of his connection in any capacity with the ACT Theater, the
supposed company where Vigan was employed, petitioner Eddie Litonjuas should
also be excluded as a party in this case since respondent Vigan failed to prove
Eddie Litonjua’s participation in the instant case. It is respondent Vigan, being the
party asserting a fact, who has the burden of proof as to such fact 10 which
however, she failed to discharge.
IMSON vs CA

FACTS:

This case arose from a vehicular collision involving petitioner's Toyota
Corolla and a Hino diesel truck registered under the names of private
respondents FNCB Finance Corporation and Holiday Hills Stock and
Breeding Farm Corporation. The collision seriously injured petitioner and
totally wrecked his car.

Petitioner filed with the RTC Baguio City a Complaint for Damages against
private respondents as registered owners of the truck; truck driver; the
beneficial owners of the truck and the truck insurer, Western Guaranty
Corporation.

The Complaint prayed that defendants be ordered to pay, jointly and
severally, however defendant’s driver and beneficial owners failed to
answer and were declared in default.

Petitioner and defendant insurer, entered into a compromise agreement
which provided:

o Defendant Western Guaranty Corporation admits that its total

liability under the laws and the insurance contract;

o In full settlement of its liability under the laws and the said
insurance contract, defendant Western Guaranty shall pay
plaintiff (herein petitioner);
 o This compromise agreement shall in no way waive nor prejudice
plaintiffs (herein petitioner's) rights to proceed against the other
defendants with respect the remainder of his claims;
o This compromise agreement shall be a full and final settlement of
the issues between plaintiff (herein petitioner) and defendant
Western Guaranty;
 Trial Court dismissed the complaint for damages, after 18 months the
private respondent moved to dismiss all the cases against the defendants
since they are all indispensable parties under a common cause of action,
the dismissal of the case against defendant insurer must result in the
dismissal of the suit against all of them. The trial court denied the motion.
 Private respondent Holiday Hills Stock and Breeding Farm Corporation
assailed the denial order through a Petition for Certiorari, Prohibition
and Mandamus With Restraining Order filed with respondent Court of
Appeals.
 CA reversed the trial court – applied the doctrine laid down in Lim Tanhu
v. Hon. Ramolete, adverted to essays that in a common cause of action
where all the defendants are indispensable parties, the court's power to
act is integral and cannot be split, such that it cannot relieve any of them
and at the same time render judgment against the rest.
ISSUE: WON the defendants in Civil Case are indispensable parties.
HELD: NO

For Lim Tanhu to apply to the case at bench, it must be established that:
o (1) petitioner has common cause of action against private
respondents and the other defendants in Civil Case No. 248-R;
and
o (2) all the defendants are indispensable parties to the case.

Cause of action has a fixed meaning in this jurisdiction. It is the delict or
wrong by which the right of the plaintiff is violated by the defendant. The
question as to whether a plaintiff has a cause of action is determined by
the averments in the pleadings pertaining to the acts of the defendant.
Whether such acts give him a right of action is determined by substantive
law.

Lim Tanhu will not apply to the case at bench for there is no showing that
petitioner has a common cause of action against the defendants in Civil
Case No. 248-R.

Defendants in Civil Case No. 248-R are not all indispensable parties. An
indispensable party is one whose interest will be affected by the court's
action in the litigation, and without whom no final determination of the
case can be had. The party's interest in the subject matter of the suit and
in the relief sought are so inextricably intertwined with the other parties'
that his legal presence as a party to the proceeding is an absolute
necessity. In his absence there cannot be a resolution of the dispute of
the parties before the court which is effective, complete, or equitable.

Conversely, a party is not indispensable to the suit if his interest in the
controversy or subject matter is distinct and divisible from the interest of
the other parties and will not necessarily be prejudiced by a judgment
which does complete justice to the parties in court. He is not
indispensable if his presence would merely permit complete relief
between him and those already parties to the action, or will simply avoid
multiple litigation.

It is true that all of petitioner's claims in Civil Case No. 248-R is premised
on the wrong committed by defendant truck driver. Concededly, the truck
driver is an indispensable party to the suit.

The other defendants, however, cannot be categorized as indispensable
parties. They are merely proper parties to the case. Proper parties have
been described as parties whose presence is necessary in order to
adjudicate the whole controversy, but whose interests are so far
separable that a final decree can be made in their absence without
affecting them.

It is easy to see that if any of them had not been impleaded as defendant,
the case would still proceed without prejudicing the party not impleaded.
 Thus, if petitioner did not sue Western Guaranty Corporation, the
omission would not cause the dismissal of the suit against the other
defendants.

Even without the insurer, the trial court would not lose its competency to
act completely and validly on the damage suit. The insurer, clearly, is not
an indispensable party in Civil Case No. 248-R.
SERVICEWIDE SPECIALISTS INC. vs CA

Petition is granted, CA’s ruling is set aside, remanded to trial court.
FACTS:

 The litigation concerns a motor vehicle, a Colt Galant Sigma 1600E, 1977
model, 4-door sedan, colored Baikal White, with Serial No. A-121-UL-493
and Engine No. 2G-171-34. The decisions of both the appellate court and
the trial court rest on the following representation of the facts:

 On August 29, 1977, EleuterioBondoc executed and delivered to Carmark

Philippines a promissory note in the sum of P66,119.04, payable in
instalments and in order to secure payment, a chattel mortgage was
executed in favor of Carmark Philippines over the aforementioned motor
vehicle which was subsequently assigned in favor of Filinvest Corporation,
with the conformity of EleuterioBondoc.

 On July 27, 1979, EleuterioBondoc, as vendor, executed a deed of sale

with assumption of mortgage of the balance of the account in favor of
Cesar Dollente which, upon approval by Filinvest Corporation, Cesar
Dollente executed and delivered to Filinvest Corporation a promissory
note in the amount of P37,528.83, payable in instalments.

 On October 26, 1979, Cesar Dollente, as vendor, executed a deed of sale

with assumption of mortgage over the aforementioned vehicle for the
balance of his account in favor of Ernesto Dollente.

 On September 28, 1979, Ernesto Dollente executed and delivered to

Filinvest Corporation a promissory note for the sum of P37,528.83,
payable in monthly instalments, secured by a chattel mortgage executed
between Cesar Dollente and Ernesto Dollente.
 Filinvest Corporation assigned all its rights and interests on the
promissory note and chattel mortgage to plaintiff, with notice to Ernesto
Dollente.
 Ernesto Dollente failed to pay monthly installments, plaintiff demanded
from said defendant the payment of the entire balance, which includes
interest thereon and to return the motor vehicle in question. However he
refused to pay and to return the motor vehicle.
 This case was filed and, upon its filing, a writ of seizure was issued and the
same was implemented by the sheriff. A counter-replevin bond having
been filed, defendant Armando Custodio, Jr. had obtained possession of
the mortgaged vehicle.
 Defendant’s evidence shows that, on September 8, 1978, defendant
Armando Custodio, Jr. obtained the motor vehicle in question by purchase
from Ernesto Dollente. Ernesto Dollente bought the same on April 14,
1978 from Venus Motor Sales. When defendant bought the said vehicle
from Ernesto Dollente, he was issued a clearance from the Constabulary
Highway Patrol Group.
 Since then defendant has possessed the vehicle in question which was
registered in Urdaneta, Pangasinan.
 Lower court ruled in favour of petitioner, Ernesto Dollente's breach of the
chattel mortgage should not bind him, because he is not a privy to such
contract, is hardly acceptable, for the reason that the registration of the
chattel mortgage is an effective and binding notice to him of its existence.
 The transaction of Ernesto Dollente, which led to the transfer of the
registration of this motor vehicle in favor of defendant Armando Custodio,
Jr., is doubtful and must have been conveniently arranged or manipulated
to effect this transfer.
 It is settled that once a mortgage is registered with the Register of Deeds
and in the Land Transportation Commission, it is binding against anybody,
including defendant Armando Custodio, Jr.
 On appeal to it, the Court of Appeals saw merit in the contention of
private respondent that the dismissal at the instance of petitioner himself
of the amended complaint against Ernesto Dollente after a failure of
summons on him, was "fatal to the entire action" Dollente being, in the
considered view of the appellate court, an indispensable party to the
proceedings.
ISSUE: WON the plaintiff (herein petitioner) who has predicated his right on being
the mortgagee of a chattel mortgage should implead the mortgagor in his
complaint that seeks to recover possession of the encumbered property in order
to effect its foreclosure.
HELD: YES

In a suit for replevin, a clear right of possession must be established. A
foreclosure under a chattel mortgage may properly be commenced only
once there is default on the part of the mortgagor of his obligation
secured by the mortgage.

The replevin in the instant case has been sought to pave the way for the
foreclosure of the object covered by the chattel mortgage. The conditions
essential for that foreclosure would be to show, firstly, the existence of
the chattel mortgage and, secondly, the default of the mortgagor.

These requirements must be established since the validity of the plaintiffs
exercise of the right of foreclosure are inevitably dependent thereon.

It would thus seem, considering particularly an adverse and
independent claim of ownership by private respondent, that the lower
court acted improvidently when it granted the dismissal of the complaint
against Dollente, albeit on petitioner's (then plaintiff) plea, on the ground
that the "non-service of summons upon Ernesto Dollente (would) only
delay the determination of the merits of the case, to the prejudice of the
parties."

An indispensable party is one whose interest will be affected by the
court's action in the litigation, and without whom no final determination
of the case can be had. The party's interest in the subject matter of the
suit and in the relief sought are so inextricably intertwined with the other
parties' that his legal presence as a party to the proceeding is an absolute
necessity. In his absence there cannot be a resolution of the dispute of
the parties before the court which is effective, complete, or equitable. PANTRANCO NORTH EXPRESS vs STANDARD INSURANCE COMPANY

Conversely, a party is not indispensable to the suit if his interest in the
controversy or subject matter is distinct and divisible from the interest of
the other parties and will not necessarily be prejudiced by a judgment FACTS:
which does complete justice to the parties in court. He is not  In the afternoon of October 28, 1984, Crispin Gicale was driving the
indispensable if his presence would merely permit complete relief passenger jeepney owned by his mother Martina Gicale, respondent
between him and those already parties to the action or will simply avoid herein. It was then raining.
multiple litigation.

 While driving north bound along the National Highway in Talavera, Nueva
Failure of summons upon Ernesto Dollente, per the Sheriffs Return dated Ecija, a passenger bus, owned by Pantranco North Express, Inc., petitioner,
July 19, 1983, is said to have been due to defendant's being no longer a driven by Alexander Buncan, also a petitioner, was trailing behind.
resident "at the given address as per information gathered from the
present occupant of the premises."  When the two vehicles were negotiating a curve along the highway, the

passenger bus overtook the jeepney. In so doing, the passenger bus hit
It appears that the remedial measures provided in Rule 14 of the Rules of the left rear side of the jeepney and sped away.
Court regrettably have not been properly availed of; for instance,
substitute service of summons under Section 8 thereof could have been  Crispin reported the incident to the Talavera Police Station and
resorted to. respondent Standard Insurance Co., Inc. (Standard), insurer of the

jeepney. The total cost of the repair was P21,415.00, but respondent
CA’s decision is affirmed. Standard paid only P8,000.00. Martina Gicale shouldered the balance
of P13,415.00.

 Standard and Martina, respondents, demanded reimbursement from

petitioners Pantranco and its driver Alexander Buncan, but they refused.
This prompted respondents to file with the Regional Trial Court (RTC),
Branch 94, Manila, a complaint for sum of money.

 Petitioners specifically denied the allegations in the complaint and

averred that it is the Metropolitan Trial Court, not the RTC, which has
jurisdiction over the case.
  Trial court favored respondents Standard and Martina, affirmed by CA -
Totality Rule provided for under Sec. 19, Batas PambansaBilang 129, it is
the sum of the two claims that determines the jurisdictional amount; total
of the two claims is definitely more than P20,000.00 which at the time of
the incident in question was the jurisdictional amount of the Regional
Trial Court.
ISSUE: a. WON the trial court has jurisdiction over the subject of the action
considering that respondents’ respective cause of action against petitioners did
not arise out of the same transaction nor are there questions of law and facts
common to both petitioners and respondents. YES
b. WON there is permissive joinder in this case. YES
HELD:
A. As previously stated, respondents’ cause of action against petitioners arose out
of the same transaction. Thus, the amount of the demand shall be the totality of
the claims
Respondent Standard’s claim is P8,000.00, while that of respondent Martina
Gicale is P13,415.00, or a total ofP21,415.00. Section 19 of B.P. Blg. 129 provides
that the RTC has "exclusive original jurisdiction over all other cases, in which the
demand, exclusive of interest and cost or the value of the property in controversy,
amounts to more than twenty thousand pesos (P20,000.00)."
Clearly, it is the RTC that has jurisdiction over the instant case. It bears emphasis
that when the complaint was filed, R.A. 7691 expanding the jurisdiction of the
Metropolitan, Municipal and Municipal Circuit Trial Courts had not yet taken
effect. It became effective on April 15, 1994.
B. Permissive joinder of parties requires that:
o (a) the right to relief arises out of the same transaction or series
of transactions;
o (b) there is a question of law or fact common to all the plaintiffs
or defendants; and
o (c) such joinder is not otherwise proscribed by the provisions of
the Rules on jurisdiction and venue.
In this case, there is a single transaction common to all, that is, Pantranco’s bus
hitting the rear side of the jeepney. There is also a common question of fact, that
is, whether petitioners are negligent. There being a single transaction common to
both respondents, consequently, they have the same cause of action against
petitioners.
To determine identity of cause of action, it must be ascertained whether the same
evidence which is necessary to sustain the second cause of action would have
been sufficient to authorize a recovery in the first.
Here, had respondents filed separate suits against petitioners, the same evidence
would have been presented to sustain the same cause of action. Thus, the filing
by both respondents of the complaint with the court below is in order. Such
joinder of parties avoids multiplicity of suit and ensures the convenient, speedy
and orderly administration of justice.
Section 5(d), Rule 2 of the same Rules provides:
"Sec. 5. Joinder of causes of action. – A party may in one pleading assert, in the
alternative or otherwise, as many causes of action as he may have against an
opposing party, subject to the following conditions:x x x (d) Where the claims in all
the causes of action are principally for recovery of money the aggregate amount
claimed shall be the test of jurisdiction."
The above provision presupposes that the different causes of action which are
joined accrue in favor of the same plaintiff/s and against the same defendant/s
and that no misjoinder of parties is involved.
The issue of whether respondents’ claims shall be lumped together is determined
by paragraph (d) of the above provision. This paragraph embodies the "totality
rule" as exemplified by Section 33 (1) of B.P. Blg. 129 which states, among others,
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."
Petition is denied. CA’s decision is affirmed.
SIOK PING TANG vs SUBIC BAY DISTRIBUTION INC

FACTS:

 Petitioner is doing business under the name and style of Able Transport.
Respondent Subic Bay Distribution, Inc. (SBDI) entered in two
Distributorship Agreements with petitioner and Able Transport in April
2002.

 Under the Agreements, respondent, as seller, will sell, deliver or procure

to be delivered petroleum products, and petitioner, as distributor, will
purchase, receive and pay for its purchases from respondent. The two
Agreements had a period of one year, commencing on October 2001 to
October 2002, which shall continue on an annual basis unless terminated
by either party upon thirty days written notice to the other prior to the
expiration of the original term or any extension thereof.

 Section 6.3 of the Distributorship Agreement provides that respondent

may require petitioner to put up securities, real or personal, or to furnish
respondent a performance bond issued by a bonding company chosen by
the latter to secure and answer for petitioner's outstanding account, and
or faithful performance of her obligations as contained or arising out of
the Agreement.

 Thus, petitioner applied for and was granted a credit line by the United
Coconut Planters Bank (UCPB), International Exchange Bank (IEBank), and
Security Bank Corporation (SBC). Petitioner also applied with the Asia
United Bank (AUB) an irrevocable domestic standby letter of credit in
favor of respondent. All these banks separately executed several
undertakings setting the terms and conditions governing the drawing of
money by respondent from these banks.

 Petitioner allegedly failed to pay her obligations to respondent despite

demand, thus, respondent tried to withdraw from these bank
undertakings.
 Petitioner then filed with the Regional Trial Court (RTC) of Quezon City
separate petitions against the banks for declaration of nullity of the
several bank undertakings and domestic letter of credit which they issued
with the application for the issuance of a temporary restraining order
(TRO) and writ of preliminary injunction.
 Petitioner asked for the annulment of the bank undertakings/letter of
credit which she signed on the ground that the prevailing market rate at
the time of respondent's intended drawings with which petitioner will be
charged of as interests and penalties is oppressive, exorbitant,
unreasonable and unconscionable rendering it against public morals and
policy; banks merely required the submission of a mere certification from
the company (respondent) that the customer (petitioner) has not paid its
account (and its statement of account of the client) without first verifying
the truthfulness of the alleged petitioner's total liability to the drawer
thereon.
 The court then issued an Ordergranting the TRO and requiring petitioner
to implead respondent as an indispensable party and for the latter to
submit its position paper on the matter of the issuance of the injunction.
Petitioner and respondent submitted their respective position papers.
 The RTC found that both respondent and petitioner have reasons for the
enforcement or non-enforcement of the bank undertakings, however, as
to whether said reasons were justifiable or not, in view of the attending
circumstances, the RTC said that these can only be determined after a full
blown trial. It ruled that the outright denial of petitioner's prayer for the
issuance of injunction, even if the evidence warranted the reasonable
probability that real injury will occur if the relief for shall not be granted in
favor of petitioner, will not serve the ends of justice.
 Respondent filed with the CA a petition for certiorari with prayer for the
issuance of a TRO and writ of preliminary injunction against respondent
Judge Pizarro and petitioner.
 CA issued a Resolution granting the TRO prayed for by respondent after
finding that it was apparent that respondent has a legal right under the
bank undertakings issued by UCPB, SBC, and IEBank; and that until those
undertakings were nullified, respondent's rights under the same should
be maintained.
 CA issued a Supplemental Resolution wherein the Domestic Standby
Letter of Credit issued by AUB was ordered included among the bank
undertakings, to which respondent has a legal right.
 CA said that the grant or denial of an injunction rests on the sound
discretion of the RTC which should not be intervened, except in clear
cases of abuse.
 Nonetheless, the CA continued that the RTC should avoid issuing a writ of
preliminary injunction which would, in effect, dispose of the main case
without trial. It found that petitioner was questioning the validity of the
bank undertakings and letter of credit for being oppressive, unreasonable
and unconscionable.
 However, as provided under the law, private transactions are presumed to
be fair and regular and that a person takes ordinary care of his concerns.
 The CA ruled that the RTC's issuance of the injunction, which was
premised on the abovementioned justification, would be a virtual
acceptance of petitioner's claim, thus, already a prejudgment of the main
case. It also said that contracts are presumed valid until they are voided
by a court of justice, thus, until such time that petitioner has presented
sufficient evidence to rebut such presumption, her legal right to the writ is
doubtful.
 As to petitioner's claim of respondent's non-filing of a motion for
reconsideration before resorting to a petition for certiorari, the CA said
that it is not a rigid rule, as jurisprudence had said, that when a definite
question has been properly raised, argued and submitted in the RTC and
the latter had decided the question, a motion for reconsideration is no
longer necessary before filing a petition for certiorari.
 The court found that both parties had fully presented their sides on the
issuance of the writ of preliminary injunction and that the RTC had
squarely resolved the issues presented by both parties. Thus, respondent
could not be faulted for not filing a motion for reconsideration.
ISSUE: WON the banks are indispensable parties in this case.
HELD: NO (TAKE NOTE OF PARTIES’ CONTENTIONS ON pp. 464-466 of SCRA)
We find that the banks are not indispensable parties in the petition for certiorari
which respondent filed in the CA assailing the RTC Order dated December 17,
2002. In fact, several circumstances would show that the banks are not parties
interested in the matter of the issuance of the writ of preliminary injunction,
whether in the RTC or in the CA.
First. During the hearing of petitioner's prayer for the issuance of a TRO, the RTC,
in open court, elicited from the lawyer-representatives of the four banks their
position in the event of the issuance of the TRO, and all these representatives
invariably replied that they will abide and/or submit to the sound judgment of the
court.
Second. When the RTC issued its Order dated December 17, 2002 granting the
issuance of the writ of preliminary injunction, the banks could have challenged
the same if they believe that they were aggrieved by such issuance. However, they
did not, and such actuations were in consonance with their earlier position that
they would submit to the sound judgment of the RTC.
Third.When respondent filed with the CA the petition for certiorari with prayer for
the issuance of a TRO and writ of preliminary injunction, and a TRO was
subsequently issued, copies of the resolution were also sent to the banks,
although not impleaded, yet the latter took no action to question their non-
inclusion in the petition. Notably, the SBC filed an Urgent Motion for Clarification
on whether or not the issuance of the TRO has the effect of restraining the bank
from complying with the writ of preliminary injunction issued by the RTC or
nullifying /rendering ineffectual the said writ. In fact, SBC even stated that the
motion was filed for no other purpose, except to seek proper guidance on the
issue at hand so that whatever action or position it may take with respect to the
CA resolution will be consistent with its term and purposes.
Fourth. When the CA rendered its assailed Decision nullifying the injunction
issued by the RTC, and copies of the decision were furnished these banks, not one
of these banks ever filed any pleading to assail their non-inclusion in the certiorari
proceedings.
Indeed, the banks have no interest in the issuance of the injunction, but only the
petitioner. The banks' interests as defendants in the petition for declaration of
nullity of their bank undertakings filed against them by petitioner in the RTC are
separable from the interests of petitioner for the issuance of the injunctive relief.
Clearly, in filing the petition for certiorari, respondent should join as party
defendant with the court or judge, the person interested in sustaining the
proceedings in the court, and it shall be the duty of such person to appear and
defend, both in his own behalf and in behalf of the court or judge affected by the
proceedings.
In this case, there is no doubt that it is only the petitioner who is the person
interested in sustaining the proceedings in court since she was the one who
sought for the issuance of the writ of preliminary injunction to enjoin the banks
from releasing funds to respondent. As earlier discussed, the banks are not parties
interested in the subject matter of the petition. Thus, it is only petitioner who
should be joined as party defendant with the judge and who should defend the
judge's issuance of injunction.
Concededly, the settled rule is that a motion for reconsideration is a condition
sine qua non for the filing of a petition for certiorari. Its purpose is to grant an
opportunity for the court to correct any actual or perceived error attributed to it
by the re-examination of the legal and factual circumstances of the case.
The rule is, however, circumscribed by well-defined exceptions, such as
o (a) where the order is a patent nullity, as where the court a quo
had no jurisdiction;
o (b) where the questions raised in the certiorari proceeding have
been duly raised and passed upon by the lower court, or are the
same as those raised and passed upon in the lower court;
o (c) where there is an urgent necessity for the resolution of the
question and any further delay would prejudice the interests of
the Government or of the petitioner or the subject matter of the
action is perishable;
o (d) where, under the circumstances, a motion for reconsideration
would be useless;
o (e) where petitioner was deprived of due process and there is
extreme urgency for relief;
o (f) where, in a criminal case, relief from an order of arrest is
urgent and the granting of such relief by the trial court is
improbable;
o (g) where the proceedings in the lower court are a nullity for lack
of due process; (h) where the proceedings were ex parte, or in
which the petitioner had no opportunity to object; and
o (i) where the issue raised is one purely of law or where public
interest is involved.
 Petition is denied, CA’s decision is affirmed.
Vda. De Salazar vs. CA, PrimitivoNepomuceno and EmerencianaNepomunceno
Facts:
Both Nepomuceno filed separate complaints with the court of agrarian relations
of Malolos, Bulacan,for ejectment on the ground of personalcultivation and
conversion of land for useful non-agricultural purposes against petitioner's
deceased husband, Benjamin Salazar. The case went through the agrarian court
and RTC from 1970 to 1993 and decided in favour of the Nepomucenos. Which an
appeal was interposed in the name of Benjamin Salazar on the ground of that
Nepomucenos failed to satisfy the requirements pertaining to personal cultivation
and conversion of the landholdings into non-agricultural uses. However it was
rejected. A year later, petitioner assailed the decision of the trial court before the
CA by way of petition for annulment of judgement. That it did not have
jurisdiction over her and the other heirs of her husband that said husband had
already died on Oct 3 1991 which the trial still proceeded and rendered its
decision on Aug 23 1993 w/o affecting the substitution under rule 3 sec 17 Rules
of court.CA ruled in favor of the validity of the challenged decision.
Issue: W/N there formal substitution of heirs in not necessary?
Held: Yes. The CA correctly ruled that formal substitution of heirs is not necessary
when the heirs themselves voluntarily appeared, participated in the case and
presented evidence in defense of deceased defendant. As expounded by CA:
jurisprudential rule is that failure to make the substitution is a jurisdictional
defect, purpose of this procedural rule is to comply with due process
requirements. For the case to continue, the real party in interest must be
substituted for the deceased. The real party in interest is the one who would be
affected by the judgment. It could be the administrator or executor or the heirs. In
the instant case, the heirs are the proper substitutes. Substitution gives them the
opportunity to continue the defense for the deceased. Substitution is important
because such opportunity to defend is a requirement to comply with due process.
The following are the active participation of the heirs in the defence after the
death of Salazar:
1.lawyer did not stop representing the deceased which lasted for about two more
years, counsel was allowed by the petitioner who was well aware of the instant
Facts:
litigation to continue appearing as counsel until August 23, 1993 when the
challenged decision was rendered.
2.The wife testified in court and declared that her husband is already deceased.
She new therefore that there was a litigation against her husband, which her and
her childrens interest are involve.
3.The petition for judgement was filed 1 and ½ after the decision was rendered.
4.Jurisdiction by estoppel, which jurisdiction over the person may be acquired by
simple appearance of the person in court.
Consequently, it undeniably being evident that the heirs themselves sought their
day in court and exercise their right to due process. The ejectment being an action
involving recovery of real property, is a real action which is not extinguished by
death. And that a judgement in an ejectment case is conclusive between the
parties and their successors in interest by title subsequent to the commencement
of the action. Petition dismiss.
STATE INVESTMENT HOUSE VS. CA
 Cheng Ban Yek (CBY) is a domestic corp. engaged in business of
manufacturing edible oil bearing the brand “BAGUIO OIL” and in the
conduct of its business, it incurred millions of pesos obligation tp Pet. SIHI
and ALLIED BANKING CORP who is the creditor of SIHI.
 CBY and SIHI entered into an Agreement for the restructuring of CBY's
obligations to its creditors but excluding ALLIED.
 Mortgage Indenture was executed by CBY and FOUR SEAS as mortgagors
and SIHI as mortgagees involving 23 parcels of registered land and
improvements.
 CBY defaulted in the payment of its obligations which are due and
demandable. SIHI notified the creditor's committee of CBY that it would
institute proceedings for the enforcement of the remedies under the
Mortgage indenture and later on the committee authorized SIHI to
institute the appropriate foreclosure proceedings.
 SIHI instituted with the Respondent Court an action for foreclosure of
mortgage.
 ALLIED prayed for the dismissal of the complaint.
 SIHI then entered into a DEED OF ASSIGNMENT with FIL NIPPON
transferring all rights, interests, claims and cause of action arising out
from the agreement, which the latter agreed to assume all obligations of
SIHI.
 FIL NIPPON later on filed a “Motion for Substitution of Party Plaintiff
which was opposed by ALLIED on the grounds that it has a counterclaim
against SIHI arising from irregularities, excesses, abuses and inimical acts
commited by CBY.
 The respondent court (RTC)finding no legal basis for the objection of
ALLIED, the MOTION was granted.
 ALLIED MR was denied.
  CA: granted the petition for certiorari filed by ALLIED.
 Hence this petition for review on certiorari.
ISSUE:W/N the substitution of SIHI by its assignee FIL NIPPON improper?
HELD:NEGATIVE.
Sec 19, Rule 3: transfer of interestin case of any transfer of interest, the action
may be continued by or against the original party, unless the court upon motion
directs the person to whom the interest is transferred to be substituted in the
action or joined with the original party.
It has been held that a transferee PENDENTE LITE does not hav to be included or
impleaded by name in order to be bound by judgement because the action or suit
may be continued for or against the original party or to the transferor and still be
binding on the transferee.
FIL NIPPON as transferee of SIHI's interestspendentelite, is not even an
indispensable party in the case.
RIVIERA FILIPINA, INC. vs. COURT OF APPEALS
Facts:
1. November 23, 1982, respondent Juan L. Reyes (Reyes, for brevity)
executed a Contract of Lease with Riviera. The ten-year (10)
renewable lease of Riviera, which started on August 1, 1982, involved
a 1,018 square meter parcel of land located along Edsa, Quezon City,
covered and described in Transfer Certificate of Title No. 186326 of
the Registry of Deeds of Quezon City in the name of Juan L. Reyes.
2. The said parcel of land was subject of a Real Estate Mortgage
executed by Reyes in favor of Prudential Bank. Since the loan with
Prudential Bank remained unpaid upon maturity, the mortgagee
bank extrajudicially foreclosed the mortgage thereon. At the public
auction sale, the mortgagee bank emerged as the highest
bidder. The redemption period was set to expire on March 7,
1989. Realizing that he could not possibly raise in time the money
needed to redeem the subject property, Reyes decided to sell the
same.
3. Reyes offered to sell the subject property to Riviera, through its
President Vicente C. Angeles, for Five Thousand Pesos (P5,000.00)
per square meter. However, Angeles bargained for Three Thousand
Five Hundred Pesos (P3,500.00) per square meter. Since Reyes was
not amenable to the said price and insisted on Five Thousand Pesos
(P5,000.00) per square meter, Angeles requested Reyes to allow him
to consult the other members of the Board of Directors of Riviera.
4. Seven (7) months later, or sometime in October 1988, Angeles
communicated with Reyes Riviera’s offer to purchase the subject
property for Four Thousand Pesos (P4,000.00) per square
meter. However, Reyes did not accept the offer. This time he asked
for Six Thousand Pesos (P6,000.00) per square meter since the value
of the property in the area had appreciated in view of the plans of
Araneta to develop the vicinity.
5. In a letter dated November 2, 1988, Atty. Irineo S. Juan, acting as
counsel for Reyes, informed Riviera that Reyes was selling the subject
property for Six Thousand Pesos (P6,000.00) per square meter, net of
 capital gains and transfer taxes, registration fees, notarial fees and all
other attendant charges.
6. To answer the foregoing letter and confirm their telephone
conversation on the matter, Riviera sent a letter dated November 22,
1988 to Atty. Juan, counsel for Reyes, expressing Riviera’s interest to
purchase the subject property and that Riviera is already negotiating
with Reyes which will take a couple of days to formalize. Riviera
increased its offer to Five Thousand Pesos (P5,000.00) per square
meter but Reyes did not accede to said price as it was still lower than
his quoted price of Six Thousand Pesos (P6,000.00) per square meter.
Angeles asked Reyes to give him until the end of November 1988 for
Riviera’s final decision.
7. In a letter dated December 2, 1988, Angeles wrote Reyes confirming
Riviera’s intent to purchase the subject property for the fixed and
final price of Five Thousand Pesos (P5,000.00) per square meter,
complete payment within sixty (60) to ninety (90) days which “offer
is what we feel should be the market price of your property.” Angeles
asked that the decision of Reyes and his written reply to the offer be
given within fifteen (15) days since there are also other properties
being offered to them at the moment.
8. In response to the foregoing letter, Atty. Juan sent a letter to Riviera
dated December 5, 1988 informing Riviera that Riviera’s offer is not
acceptable to his client. He further expressed, “let it be made clear
that, much as it is the earnest desire of my client to really give you
the preference to purchase the subject property, you have
unfortunately failed to take advantage of such opportunity and thus
lost your right of first refusal in sale of said property.”
9. Meanwhile, on December 4, 1988, Reyes confided to Rolando P.
Traballo, a close family friend and President of Cypress, his
predicament about the nearing expiry date of the redemption period
of the foreclosed mortgaged property with Prudential Bank, the
money for which he could not raise on time thereby offering the
subject property to him for Six Thousand Pesos (P6,000.00) per
square meter. Traballo expressed interest in buying the said
property, told Reyes that he will study the matter and suggested for
them to meet the next day.
10. They met the next day, December 5, 1988, at which time Traballo
bargained for Five Thousand Three Hundred Pesos (P5,300.00) per
square meter. After considering the reasons cited by Traballo for his
quoted price, Reyes accepted the same. However, since Traballo did
not have the amount with which to pay Reyes, he told the latter that
he will look for a partner for that purpose. Reyes told Traballo that he
had already afforded Riviera its right of first refusal but they cannot
agree because Riviera’s final offer was for Five Thousand Pesos
(P5,000.00) per square meter.
11. Sometime in January 1989, apprehensive of the impending
expiration in March 1989 of the redemption period of the foreclosed
mortgaged property with Prudential Bank and the deal between
Reyes and Traballo was not yet formally concluded, Reyes decided to
approach anew Riviera. For this purpose, he requested his nephew,
Atty. EstanislaoAlinea, to approach Angeles and find out if the latter
was still interested in buying the subject property and ask him to
raise his offer for the purchase of the said property a little higher. As
instructed, Atty. Alinea met with Angeles and asked the latter to
increase his offer of Five Thousand Pesos (P5,000.00) per square
meter but Angeles said that his offer is Five Thousand Pesos
(P5,000.00) per square meter.
12. Following the meeting, Angeles sent a letter dated February 4, 1989
to Reyes, through Atty. Alinea, that his offer is Five Thousand Pesos
(P5,000.00) per square meter payment of which would be fifty
percent (50%) down within thirty (30) days upon submission of
certain documents in three (3) days, the balance payable in five (5)
years in equal monthly installments at twelve percent (12%) interest
in diminishing balance. With the terms of this second offer, Angeles
admittedly downgraded the previous offer of Riviera on December 2,
1988.
13. Atty. Alinea conveyed to Reyes Riviera’s offer of Five Thousand Pesos
(P5,000.00) per square meter but Reyes did not agree. Consequently,
 Atty. Alinea contacted again Angeles and asked him if he can increase
his price. Angeles, however, said he cannot add anymore. Reyes did
not expressly offer his subject property to Riviera at the price of Five
Thousand Three Hundred Pesos (P5,300.00) per square meter.
14. Sometime in February 1989, Cypress and its partner in the venture,
Cornhill Trading Corporation, were able to come up with the amount
sufficient to cover the redemption money, with which Reyes paid to
the Prudential Bank to redeem the subject property. On May 1, 1989,
a Deed of Absolute Sale covering the subject property was executed
by Reyes in favor of Cypress and Cornhill for the consideration of Five
Million Three Hundred Ninety Five Thousand Four Hundred Pesos
(P5,395,400.00). On the same date, Cypress and Cornhill mortgaged
the subject property to Urban Development Bank for Three Million
Pesos (P3,000,000.00).
15. Thereafter, Riviera sought from Reyes, Cypress and Cornhill a resale
of the subject property to it claiming that its right of first refusal
under the lease contract was violated. After several unsuccessful
attempts, Riviera filed the suit to compel Reyes, Cypress, Cornhill and
Urban Development Bank to transfer the disputed title to the land in
favor of Riviera upon its payment of the price paid by Cypress and
Cornhill.
16. Following trial on the merits, the trial court dismissed the complaint
of Riviera as well as the counterclaims and cross-claims of the other
parties.
17. Dissatisfied with the decision of the trial court, both parties appealed
to the Court of Appeals. However, the appellate court, through its
Special Seventh Division, rendered a Decision dated June 6, 1994
which affirmed the decision of the trial court in its entirety.
18. From this decision, Riviera filed a motion for reconsideration, but the
appellate court denied the same.
Issue:WON the CA erred on deciding the petitioner’s appeal at the time when the
principal appellee is allegedly dead and no proper substitution of the alleged
deceases party has been made.
Held: NO.
Section 16 and 17 of Rule 3 of the Revised Rules of Court, upon which Riviera
anchors its argument, has already been amended by the 1997 Rules of Civil
Procedure. Even applying the old Rules, the failure of a counsel to comply with his
duty under Section 16 of Rule 3 of the Revised Rules of Court, to inform the court
of the death of his client and no substitution of such is effected, will not invalidate
the proceedings and the judgment thereon if the action survives the death of
such party, as this case does, since the death of Reyes did not extinguish his civil
personality. The appellate court was well within its jurisdiction to proceed as it
did with the case since the death of a party is not subject to its judicial
notice. Needless to stress, the purpose behind the rule on substitution of parties
is the protection of the right of every party to due process. This purpose has been
adequately met in this case since both parties argued their respective positions
through their pleadings in the trial court and the appellate court. Besides, the
Court has already acquired jurisdiction over the heirs of Reyes by voluntarily
submitting themselves to our jurisdiction.
Shorter Version po: Ito ungsa sales naten! 
Facts:
1. In 1982, Reyes executed a 10-year (renewable)Contract of Lease with
Riviera Filipina over a parcel of land in EDSA. Under such contract, the
lessee is given aright of first refusal should the lessor decide to sell the
property during the terms of the lease.
2. Such property was subject of a mortgage executed by Reyes in favor of
Prudential Bank. Since Reyes failed to pay the loan with the bank, it
foreclosed the mortgage and it emerged as the highest bidder in the
auction sale.
3. Realizing that he could not redeem the property, Reyes decided to sell it
and offered it to Riviera Filipina for P5,000/sqm. However, it bargained for
P3,500/sqm. Reyes rejected such offer. After 7 months, it again bargained
for P4,000/sqm, which again was rejected by Reyes who asked for
 P6,000/sqm price. After 2 months, it again bargained for P5,000/sqm, but
since Reyes insisted on P6,000/sqm price, he rejected Riviera's offer.
4. Nearing the expiry of the redemption period, Reyes and Traballo (his
friend) agreed that the latter would buy the same for P5,300. But such
deal was not yet formally concluded and negotiations with Riviera Filipina
once again transpired but to no avail.
5. In 1989, Cypress and Cornhill Trading were able to come up with the
amount sufficient to cover the redemption money, with which Reyes paid
to Prudential Bank to redeem the property. Subsequently, a Deed of
Absolute Sale was executed in favor of Cypress and Cornhill for P5.4M.
Cypress and Cornhill mortgaged the property in favor of Urban Dev. Bank
for P3M. Riviera Filipina filed a suit against Reyes, Cypress and Cornhill on
the ground that they violated its right of first refusal under the lease
contract.
6. RTC ruled in favor of Reyes, Cypress, and Cornhill. On appeal, CA affirmed
the decision of the RTC.
Ang vs.Ang
FACTS:
On September 2, 1992, spouses Alan and EmAng (respondents) obtained a loan in
the amount of US$300,000.00 from Theodore and Nancy Ang (petitioners). On
even date, the respondents executed a promissory notein favor of the petitioners
wherein they promised to pay the latter the said amount, with interest at the rate
of ten percent (10%) per annum, upon demand. However, despite repeated
demands, the respondents failed to pay the petitioners.
Thus, on August 28, 2006, the petitioners sent the respondents a demand letter
asking them to pay their outstanding debt which, at that time, already amounted
to (US$719,671.23), inclusive of the ten percent (10%) annual interest that had
accumulated over the years. Notwithstanding the receipt of the said demand
letter, the respondents still failed to settle their loan obligation.
On August 6, 2006, the petitioners, who were then residing in Los Angeles,
California, United States of America (USA), executed their respective Special
Powers of Attorney in favor of Attorney Eldrige Marvin B. Aceron (Atty. Aceron) for
the purpose of filing an action in court against the respondents. On September 15,
2006, Atty. Aceron, in behalf of the petitioners, filed a Complaint for collection of
sum of money with the RTC of Quezon City against the respondents.
Issues: WON Atty. Aceron, being merely a representative of the petitioners, is not
the real party in interest in the case.
Held:Atty. Aceron, despite being the attorney-in-fact of the petitioners, is not a
real party in interest in the case below. Section 2, Rule 3 of the Rules of Court
reads:
Sec. 2.Parties in interest. – A real party in interest is the party who stands to be
benefited or injured by the judgment in the suit, or the party entitled to the avails
of the suit. Unless otherwise authorized by law or these Rules, every action must
be prosecuted or defended in the name of the real party in interest.
Interest within the meaning of the Rules of Court means material interest or an
interest in issue to be affected by the decree or judgment of the case, as
distinguished from mere curiosity about the question involved. A real party in
interest is the party who, by the substantive law, has the right sought to be
enforced.
Applying the foregoing rule, it is clear that Atty. Aceron is not a real party in
interest in the case below as he does not stand to be benefited or injured by any
judgment therein. He was merely appointed by the petitioners as their attorney-
in-fact for the limited purpose of filing and prosecuting the complaint against the
respondents. Such appointment, however, does not mean that he is subrogated
into the rights of petitioners and ought to be considered as a real party in interest.
Being merely a representative of the petitioners, Atty. Aceron in his personal
capacity does not have the right to file the complaint below against the
respondents. He may only do so, as what he did, in behalf of the petitioners – the
real parties in interest. To stress, the right sought to be enforced in the case below
belongs to the petitioners and not to Atty.
Aceron. Clearly, an attorney-in-fact is not a real party in interest.
FORTUNE MOTORS v CA
FACTS: On March 29,1982 up to January 6,1984, private respondent Metropolitan
Bank 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
Bank) which loan was secured by a real estate mortgage on the Fortune building
and lot in Makati, Rizal.
Due to financial difficulties and the onslaught of economic recession, the
petitioner was not able to pay the loan which became due.
For failure of the petitioner to pay the loans, the respondent bank initiated
extrajudicial foreclosure proceedings. After notices were served, posted, and
published, the mortgaged property was sold at public auction for the price of
P47,899,264.91 to mortgagee Bank as the highest bidder.
The sheriff's certificate of sale was registered on October 24, 1984 with the one-
year redemption period to expire on October 24,1985.
On October 21, 1985, three days before the expiration of the redemption period,
petitioner Fortune Motors filed a complaint for annulment of the extrajudicial
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, there was no public auction, and the price for which the property was
sold was "shockingly low".
Before summons could be served private respondent Bank filed a motion to
dismiss 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, therefore the action to annul the foreclosure sale should be filed in the
Regional Trial Court of Makati.
The motion was opposed by petitioner Fortune Motors alleging that its action "is
a personal action" and that "the issue is the validity of the extrajudicial
foreclosure proceedings" so that it may have a new one year period to redeem.
On January 8, 1986 an order was issued by the lower court reserving the
resolution of the Bank's motion to dismiss until after the trial on the merits as the
grounds relied upon by the defendant were not clear and indubitable.
The Bank filed a motion for reconsideration of the order dated January 8, 1986
but it was denied by the lower court in its order dated May 28, 1986.
The respondent Bank filed a petition for certiorari and prohibition in the Court of
Appeals and it was granted. The complaint in the Civil Case No. 85-33218 is
dismissed without prejudice to its being filed in the proper venue.
A motion for reconsideration was filed on August 11, 1986 on the said decision
and on October 30, 1986 a resolution was issued denying such motion for
reconsideration.
Hence, the petition for review on certiorari.

ISSUE: Whether petitioner's action for annulment of the real estate mortgage Since an extrajudicial foreclosure of real property results in a conveyance of the
extrajudicial foreclosure sale of Fortune Building is a personal action or a real title of the property sold to the highest bidder at the sale, an action to annul the
action for venue purposes. foreclosure sale is necessarily an action affecting the title of the property sold. It is
therefore a real action which should be commenced and tried in the province
HELD: Petition Denied.Real Action.
where the property or part thereof lies.
In a real action, the plaintiff seeks the recovery of real property, or as indicated in
Sec. 2 (a) of Rule 4, a real action is an action affecting title to real property, or for
the recovery of possession, or for the partition or condemnation of, or foreclosure
of a mortgage on real property.

Real actions or actions affecting title to, or for the recovery of possession, or for
the 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 part thereof lies.

Personal actions upon the other hand, may be instituted in the 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.

A prayer for annulment or rescission of contract does not operate to efface the
true objectives and nature of the action which is to recover real property.

An action for the annulment or rescission of a sale of real property is a real action.
Its prime objective is to recover said real property. An action to annul a real
estate mortgage foreclosure sale is no different from an action to annul a private
sale of real property.

While it is true that petitioner does not directly seek the recovery of title or
possession of the property in question, his action for annulment of sale and his
claim for damages are closely intertwined with the issue of ownership of the
building which, under the law, is considered immovable property, the recovery of
which is petitioner's primary objective. The prevalent doctrine is that an action for
the annulment or rescission of a sale of real property does not operate to efface
the fundamental and prime objective and nature of the case, which is to recover
said real property. It is a real action. Respondent Court, therefore, did not err in
dismissing the case on the ground of improper venue (Sec. 2, Rule 4) which was
timely raised (Sec. 1, Rule 16).
 2. Clavecilla Radio System filed a motion to dismiss the complaint on the
grounds that it states no cause of action and that the venue is improperly
laid.

3. City Judge, on September 18, 1963, denied the motion to dismiss for lack
of merit and set the case for hearing.

4. Hence, the Clavecilla Radio System filed a petition for prohibition with
preliminary injunction with the Court of First Instance praying that the
City Judge, Honorable Agustin Antillon, be enjoined from further
proceeding with the case on the ground of improper venue.

5. CFI held that the Clavecilla Radio System may be sued either in Manila
where it has its principal office or in Cagayan de Oro City where it may be
served, as in fact it was served, with summons through the Manager of its
branch office in said city.

6. Clavecilla Radio System appealed to SC and contends that the suit against
it should be filed in Manila where it holds its principal office.

ISSUE: WON the suit against CLAVECILLIA RADIO SYSTEM it should be filed in
Manila where it holds its principal office or in CDO.

HELD: MANILA.It is clear that the case for damages filed with the city court is
based upon tort and not upon a written contract. Section 1 of Rule 4 of the New
CLAVECILLIA RADIO SYSTEM, petitioner-appellant,
Rules of Court, governing venue of actions in inferior courts, provides in its
vs.
paragraph (b) (3) that when "the action is not upon a written contract, then in the
HON. AGUSTIN ANTILLON, as City Judge of the Municipal Court of Cagayan de
municipality where the defendant or any of the defendants resides or may be
Oro City
served with summons."
and NEW CAGAYAN GROCERY, respondents-appellees.
Settled is the principle in corporation law that the residence of a corporation is
FACTS:
the place where its principal office is established. Since it is not disputed that the
1. June 22, 1963- New Cagayan Grocery filed a complaint against the Clavecilla Radio System has its principal office in Manila, it follows that the suit
Clavecilla Radio System alleging that on March 12, 1963, CLAVECILLIA against it may properly be filed in the City of Manila.
omitted the word NOT between the words "WASHED" and "AVAILABLE,"
As stated in Evangelista vs. Santos, et al., supra, the laying of the venue of an
in a letter addressed to NEW CAGAYAN GROCERY for transmittal in the
action is not left to plaintiff's caprice because the matter is regulated by the Rules
Cagayan de Oro branch office, thus changing entirely the contents and
of Court. Applying the provision of the Rules of Court, the venue in this case was
purport of the same and causing the said addressee to suffer damages.
improperly laid.

Young Auto Supply vs. Court of Appeals
Facts: On 28 October 1987, Young Auto Supply Co. Inc. (YASCO) represented by
Nemesio Garcia, its president, Nelson Garcia and Vicente Sy, sold all of their
shares of stock in Consolidated Marketing & Development Corporation (CMDC) to
George C. Roxas. The purchase price was P8,000,000.00 payable as follows: a
down payment of P4,000,000.00 and the balance of P4,000,000.00 in four
postdated checks of P1,000,000.00 each. Immediately after the execution of the
agreement, Roxas took full control of the four markets of CMDC. However, the
vendors held on to the stock certificates of CMDC as security pending full
payment of the balance of the purchase price. The first check of P4,000,000.00,
representing the down payment, was honored by the drawee bank but the four
other checks representing the balance of P4,000,000.00 were dishonored. In the
meantime, Roxas sold one of the markets to a third party. Out of the proceeds of
the sale, YASCO received P600,000.00, leaving a balance of P3,400,000.00.
Subsequently, Nelson Garcia and Vicente Sy assigned all their rights and title to
the proceeds of the sale of the CMDC shares to Nemesio Garcia. On 10 June 1988,
YASCO and Garcia filed a complaint against Roxas in the Regional Trial Court,
Branch 11, Cebu City, praying that Roxas be ordered to pay them the sum of
P3,400,000.00 or that full control of the three markets be turned over to YASCO
and Garcia. The complaint also prayed for the forfeiture of the partial payment of
P4,600,000.00 and the payment of attorney's fees and costs. Failing to submit his
answer, and on 19 August 1988, the trial court declared Roxas in default. The
order of default was, however, lifted upon motion of Roxas. On 22 August 1988,
Roxas filed a motion to dismiss. After a hearing, wherein testimonial and
documentary evidence were presented by both parties, the trial court in an Order
dated 8 February 1991 denied Roxas' motion to dismiss. After receiving said order,
Roxas filed another motion for extension of time to submit his answer. He also
filed a motion for reconsideration, which the trial court denied in its Order dated
10 April 1991 for being pro-forma. Roxas was again declared in default, on the
ground that his motion for reconsideration did not toll the running of the period
to file his answer. On 3 May 1991, Roxas filed an unverified Motion to Lift the
Order of Default which was not accompanied with the required affidavit of merit.
But without waiting for the resolution of the motion, he filed a petition for
certiorari with the Court of Appeals. The Court of Appeals dismissal of the
complaint on the ground of improper venue. A subsequent motion for
reconsideration by YASCO was to no avail. YASCO and Garcia filed the petition.
Issue: Whether the venue for the case against YASCO and Garcia in Cebu City was
improperly laid.
Held: A corporation has no residence in the same sense in which this term is
applied to a natural person. But for practical purposes, a corporation is in a
metaphysical sense a resident of the place where its principal office is located as
stated in the articles of incorporation. The Corporation Code precisely requires
each corporation to specify in its articles of incorporation the "place where the in Bacolod City which was the subject matter of the contract. This was denied by
principal office of the corporation is to be located which must be within the the respondent court upon the ground that the action was in personam.
Philippines." The purpose of this requirement is to fix the residence of a
Issue: Whether or not the venue was properly laid
corporation in a definite place, instead of allowing it to be ambulatory. Actions
cannot be filed against a corporation in any place where the corporation Held: Negative. Although the immediate remedy sought by Cacnio is to compel
maintains its branch offices. The Court ruled that to allow an action to be petitioner to accept payment made by the former, it is obvious that this relief is
instituted in any place where the corporation has branch offices, would create merely the first step to establish Cacnio’s title to the property. Moreover,
confusion and work untold inconvenience to said entity. By the same token, a Cacnio’s complaint is a means resorted to by him in order that he could retain the
corporation cannot be allowed to file personal actions in a place other than its possession of said property. In short, venue in the main case was improperly laid
principal place of business unless such a place is also the residence of a co- and the CFI of QC should have properly granted the motion to dismiss
plaintiff or a defendant. With the finding that the residence of YASCO for purposes
of venue is in Cebu City, where its principal place of business is located, it
becomes unnecessary to decide whether Garcia is also a resident of Cebu City and
whether Roxas was in estoppel from questioning the choice of Cebu City as the
venue. The decision of the Court of Appeals was set aside.

Dr. Antonio Lizares vs. Hon. Hermogenes Caluag (QC- CFI Judge) and Flaviano
Cacnio

Facts:

Flaviano Cacnio alleged that he brought from petitioner Lizares on installment Lot
4, Block 1 of the Sinkang Subdivision in Bacolod City. Cacnio received a letter of
demand from Lizares representing arrears in the payment of installment plus
regular and overdue interest.

Cacnio then sent a check drawn by one Antonio Bernardo in favor of Lizares. But
according to Cacnio, Lizares refused the check and returned it. Cacnio instituted a
civil case in the CFI of Quezon City, praying for compensatory damages plus
attorney’s fees.

Petitioner Lizares moved to dismiss the case on the ground that the venue is
improperly laid, for the action affects title to or possession of real property locates