2006 Remedial Law Case Digests

CIVIL PROCEDURE

MIGUELITO LIMACO, ET AL. VS. SHONAN GAKUEN CHILDREN'S HOUSE PHILIPPINES, INC.

G.R. No. 158245. June 30, 2005

Facts: Petitioners are the registered owners of three parcels of agricultural land. They entered into a
Contract of Sale with respondent and agreed that "in the event that the parties herein are unable to effect
the transfer and sale of the said properties in whole or in part in favor of the vendees, all the paid-in
amounts shall be applied to another similar property also owned by the vendors in substitution of the
above-described properties."

Pursuant to the contract, respondent corporation paid the down payment however; it refused to remit any
monthly installment due to petitioners' failure to obtain a clearance and/or approval of the sale of the
subject land from the Department of Agrarian Reform (DAR). Respondent demanded that petitioners either
solve the problem with the land tenants or substitute the lots with another acceptable, suitable and
untenanted land, pursuant to their agreement.

Petitioners informed respondent that they were ready to finalize the transaction in accordance with the legal
opinion of the DAR. In a letter, respondent informed petitioners that the scheme proposed in the DAR
Opinion was "far from acceptable." Respondent offered to purchase the property on a direct sale basis.
Petitioners did not respond to respondent hence, the latter, through counsel, requested the return of its
down payment. As petitioners did not acquiesce, respondent filed a complaint for rescission with damages
with the Regional Trial Court (RTC) of Makati. As a countermove, petitioners filed the instant case for
specific performance with the RTC of Laguna.

Respondent filed a motion to dismiss on the ground of litis pendentia. Petitioners opposed contending that
the instant complaint for specific performance was served on respondent ahead of the service of the
complaint for rescission on petitioners. Later, however, respondent withdrew its motion to dismiss in view of
the order of the RTC of Makati dismissing the complaint for rescission. In its Answer with Counterclaim,
respondent alleged by way of affirmative defense that "specific performance is not possible because the
respondent had already bought another property which is untenanted, devoid of any legal complications
and now converted from agricultural to non-agricultural purpose in accordance with DAR Administrative
Order.

Thereafter, petitioners filed a Motion to Withdraw Complaint considering respondent's special defense that
specific performance was no longer possible. They prayed that their complaint and respondent's
counterclaim be ordered withdrawn or dismissed, arguing that respondent's counterclaim would have no
leg to stand on as it was compulsory in nature.

Issue: Whether respondent's counterclaim should be dismissed.

Held: There are two ways by which an action may be dismissed upon the instance of the plaintiff. First,
dismissal is a matter of right when a notice of dismissal is filed by the plaintiff before an answer or a motion
for summary judgment has been served on him by the defendant. Second, dismissal is discretionary on the
court when the motion for the dismissal of the action is filed by the plaintiff at any stage of the proceedings
other than before service of an answer or a motion for summary judgment. While the dismissal in the first
mode takes effect upon the mere notice of plaintiff without need of a judicial order, the second mode
requires the authority of the court before dismissal of the case may be effected. This is so because in the
dismissal of an action, the effect of the dismissal upon the rights of the defendant should always be taken
into consideration.

In the case at bar, it is undisputed that petitioners filed a Motion to Withdraw Complaint after respondent
already filed its answer with counterclaim. In fact, the reason for their motion for withdrawal was the special
defense of respondent in its answer that substitution was no longer possible as it already bought another
property in lieu of the subject lots under the contract. It is, therefore, inexplicable how petitioners could
argue that their complaint was successfully withdrawn upon the mere filing of a Motion to Withdraw
Complaint when they themselves alleged in this petition that "private respondent objected to the withdrawal
and the Trial Court sustained the objection."

LUCIANO ELLO and GAUDIOSA ELLO, VS. THE COURT OF APPEALS ET AL.

G.R. No. 141255. June 21, 2005

Facts: Respondent Springfield Development Corporation is the owner and actual possessor of a lot
covered by Transfer Certificate of Title (TCT) No. T-92571, while respondent Constantino Jaraula is the
owner and actual possessor of a covered by TCT No. T-63088, both situated at Cagayan de Oro City. The
two lots adjoin each other and were originally parts of a 12-hectare lot which has been developed by
respondents as the Mega Heights Subdivision. Sometime in 1996, petitioner spouses Luciano and
Gaudiosa Ello and their hired personnel surreptitiously and stealthily occupied respondents’ lots, built a
make-shift shed under the trees, and fenced the area they occupied. Respondents then demanded that
petitioners and their hired personnel vacate the area but they refused. Instead, they threatened and
prevented respondents from developing their lots into a subdivision. Thus, respondent Springfield
Development Corporation and Constantino G. Jaraula, filed a complaint against them for forcible entry with
application for preliminary mandatory injunction.

Issue: Whether the Court of Appeals gravely abused its discretion when it dismissed outright petitioners’
petition for review on the sole technical ground that it does not contain the affidavit of service as required by
Section 11 in relation to Section 13, Rule 13 of the 1997 Rules of Civil Procedure.

Held: Sections 3 and 5, Rule 13 of the 1997 Rules of Civil Procedure, as amended, prescribe two modes of
filing and service of pleadings, motions, notices, orders, judgments and other papers. These are: (a) by
personal delivery, governed by Section 6 of the same Rule; and (b) by mail, under Section 7 thereof.

However, Section 11 of Rule 13 requires that “whenever practicable,” the filing of pleadings and other
papers in court, as well as the service of said papers on the adverse party or his counsel, must be done
“personally.” But if such filing and service were through a different mode, the party concerned must submit
a “written explanation” why they were not done personally.

There is no question that petitioners violated Section 11 of Rule 13 by failing to append the affidavit of
service to their petition for review filed with the Court of Appeals. Petitioners, upon receipt of the Court of
Appeals’ challenged Resolution dismissing outright their petition due to such omission, promptly filed a
motion for reconsideration, readily acknowledging their procedural lapse and attaching therewith the
required affidavit of service. Rules of procedure must be faithfully followed except only when for persuasive
reasons, they may be relaxed to relieve a litigant of an injustice not commensurate with his failure to
comply with the prescribed procedure.

EXECUTION OF COMPROMISE AGREEMENT; DELAY BY ONE PARTY JUSTIFIES EXECUTION

MANILA INTERNATIONAL AIRPORT AUTHORITY VS. ALA INDUSTRIES CORPORATION

G.R. No. 147349. February 13, 2004

Facts: The contract for the structural repair and waterproofing of the IPT and ICT building of the NAIA
airport was awarded, after a public bidding, to respondent ALA. Respondent made the necessary repair
and waterproofing.

After submission of its progress billings to the petitioner, respondent received partial payments. Progress
billing remained unpaid despite repeated demands by the respondent. Meanwhile petitioner unilaterally
rescinded the contract on the ground that respondent failed to complete the project within the agreed
completion date.

Respondent objected to the rescission made by the petitioner and reiterated its claims. The trial court
directed the parties to proceed to arbitration. Both parties executed a compromise agreement and jointly
filed in court a motion for judgment based on the compromise agreement. The Court a quo rendered
judgment approving the compromise agreement.

For petitioner’s failure to pay within the period stipulated, respondent filed a motion for execution to enforce
its claim. Petitioner filed a comment and attributed the delays to its being a government agency. The trial
court denied the respondent’s motion. Reversing the trial court, the CA ordered it to issue a writ of
execution to enforce respondent’s claim. The appellate court ratiocinated that a judgment rendered in
accordance with a compromise agreement was immediately executory, and that a delay was not substantial
compliance therewith.

Issues: 1) Whether or not decision based on compromise agreement is final and executory.

2) Whether or not delay by one party on a compromise justifies execution.

Held: 1) A compromise once approved by final orders of the court has the force of res judicata between the
parties and should not be disturbed except for vices of consent or forgery. Hence, a decision on a
compromise agreement is final and executory. Such agreement has the force of law and is conclusive
between the parties. It transcends its identity as a mere contract binding only upon the parties thereto, as it
becomes a judgment that is subject to execution in accordance with the Rules. Judges therefore have the
ministerial and mandatory duty to implement and enforce it.

2. The failure to pay on the date stipulated was clearly a violation of the Agreement. Thus, non-fulfillment of
the terms of the compromise justified execution. It is the height of absurdity for petitioner to attribute to a
fortuitous event its delayed payment. Petitioner’s explanation is clearly a gratuitous assertion that borders
callousness.

TEMPORARY RESTRAINING ORDER; ISSUANCE OF TRO EX-PARTE; PRELIMINARY INJUNCTION;

DUE PROCESS; PRESUMPTION OF COLD NEUTRALITY OF A JUDGE

BAILINANG MAROHOMBSAR VS. JUDGE SANTOS ADIONG

G.R. No. RTJ-02-1674. January 22, 2004

Facts: Complainant Marohombsar was the defendant in the civil case for injunction. The case was filed by
Yasmira Pangadapun questioning the legality of Marohombsar’s appointment as Provincial Social Welfare
Officer of the DSWD-ARMM. Prior to his appointment, Pangadapun used to occupy said position.

Upon the filing of the said complaint, respondent judge issued a TRO and set the hearing on the application
for the issuance of the preliminary injunction. Summons, together with a copy of the complaint and a notice,
was also served on both parties. Marohombsar filed an ex parte urgent motion to dissolve the TRO.
Pangadapun was given the time to comment. Respondent judge issued an order stating that a preliminary
conference had been held and that both parties had waived the raffle of the case and reset the hearing on
the application for the issuance of a writ of injunction. The judge gave another time to file her comment
again.

During the hearing on the application for the issuance of a writ of preliminary injunction, none of the lawyers
appeared. Hence, respondent judge considered it submitted for resolution and issued the preliminary
injunction. Hence, this complaint for gross ignorance of law, abuse of discretion and conduct unbecoming a
judge.

Issues: 1) Whether or not TRO ex parte is allowed in the instant case.

2) Whether or not trial-type hearing is essential to due process.

3) Whether or not respondent judge erred in ordering the issuance of the writ of preliminary injunction.

Held: 1) A TRO is generally granted without notice to the opposite party and is intended only as a restraint
on him until the propriety of granting a temporary injunction can be determined. It goes no further than to
preserve the status quo until that determination. Respondent judge was justified in issuing the TRO ex
parte due to his assessment of the urgency of the relief sought.

2) In applications for preliminary injunction, the dual requirement of prior notice and hearing before
injunction may issue has been relaxed to the point that not all petitions for preliminary injunction need
undergo a trial-type hearing, it being doctrinal that a formal or trial-type hearing is not, at all times and in all
instances, essential to due process. The essence of due process is that a party is afforded a reasonable
opportunity to be heard and to present any evidence he may have in support of his defense. It is a rule that
a party cannot claim that he has been denied due process when he was given the opportunity to present
his position.

3) As a matter of public policy, the acts of a judge in his official capacity are not subject to disciplinary action
even though such acts are erroneous, provided he acts in good faith and without malice. Respondent
judge, or any other member of the bench for that matter, is presumed to have acted regularly and in the
manner that preserves the ideal of the cold neutrality of an impartial judge implicit in the guarantee of due
process.

SERVICE OF SUMMONS, SUBSTITUTED SERVICE; SEVICE BY PUBLICATION; ACTIONS IN REM;

ACTIONS QUASI IN REM

SPOUSES PATRICK AND RAFAELA JOSE VS. SPOUSES HELEN AND ROMEO BOYON

G.R. No. 147369. October 23, 2003

Facts: Petitioners lodged a complaint for specific performance against respondents to compel them to
facilitate the transfer of ownership of a parcel of land subject of a controverted sale. The RTC issued a
summons to respondents. As per return of the summons, substituted service was resorted to by the
process server allegedly because efforts to serve personally to re respondents failed. Meanwhile,
petitioners filed before the RTC an ex parte motion for leave of court to effect summons by publication and
the judge issued an order granting the same. The respondents were declared in default and as a
consequence of the declaration of default, petitioners were allowed to submit their evidence ex parte.

Helen Boyon, who was then in United Sates, was surprised to learn from her sister of the resolution issued
by the court. Respondents filed an Ad Cautelam motion questioning, among others, the validity of the
service of summons effected by the court a quo. The court issued an order denying the said motion on the
basis of the defaulted respondent supposed loss of standing in court. Once again, the respondents raised
the issue of the jurisdiction of the trial court via a motion for reconsideration and the same was denied. The
petitioners moved for the execution of the controverted judgment which the judge granted.

Thereafter, respondents filed before the CA a petition for certiorari which held that the trial court had no
authority to issue the questioned resolution and orders.

Issue: Whether or not summons by publication can validly serve in the instant case.
Held: In general, courts acquire jurisdiction over the person of the defendant by the service of summons,
such service may be done personal or substituted service, where the action is in personam and the
defendant is in the Philippines. However, extraterritorial service of summons or summons by publication
applies only when the action is in rem or quasi in rem. That is, the action against the thing itself instead of
against the defendant’s person if the action is in rem or an individual is named as defendant and the
purpose is to subject the individual’s interest in a piece of property to the obligation or loan burdening it if
quasi in rem.

In the instant case, what was filed before the trial court was an action for specific performance directed
against respondents. While the suit incidentally involved a piece of land, the ownership or possession
thereof was not put in issue. Moreover, court has consistently declared that an action for specific
performance is an action in personam. Hence, summons by publication cannot be validly served.

JURISDICTION; RTC

RADIO COMMUNICATIONS OF THE PHILIPPINES, INC. VS. COURT OF APPEALS

386 SCRA 67. August 1, 2002

Facts: Private respondent Manuel Dulawon filed with the Regional Trial Court a complaint for breach of
contract of lease with damages against petitioner Radio Communications of the Philippines, Inc. (RCPI).
Petitioner filed a motion to dismiss the complaint for lack of jurisdiction contending that it is the Municipal
Trial Court which has jurisdiction as the complaint is basically one for collection of unpaid rentals.

Issue: Whether or not the RTC has jurisdiction over the complaint filed by private respondent.

Held: RTC has jurisdiction over the complaint. The averments in the complaint reveal that the suit filed by
private respondent was primarily one for specific performance as it was aimed to enforce their three-year
lease contract which would incidentally entitle him to monetary awards if the court should find that the
subject contract of lease was breached. As alleged therein, petitioner’s failure to pay rentals due for the
period from January to March 1997, constituted a violation of their contract which had the effect of
accelerating the payment of monthly rentals for the years 1997 and 1998. Clearly, the action for specific
performance, irrespective of the amount of the rentals and damages sought to be recovered, is incapable of
pecuniary estimation, hence, cognizable exclusively by the RTC.