University of Santo Tomas

Faculty of Civil Law

Civil Procedure and Provisional Remedies (CP-PR)

Case Digests (1st 90 Cases)1

1
Mendoza, Glenn S.
 PRISCILLA ALMA JOSE, petitioner, vs. RAMON C. JAVELLANA, ET AL., respondents.
G.R. No. 158239. January 25, 2012.

Facts: Margarita Marquez Alma Jose (Margarita) sold for consideration of P160,000.00 to Ramon
Javellana (respondent) by deed of conditional sale two parcels of land. They agreed that respondent would pay
P80,000.00 upon the execution of the deed and the balance ofP80,000.00 upon the registration of the parcels of
land under the Torrens System (the registration being undertaken by Margarita within a reasonable period of
time); and that should Margarita become incapacitated, her son and attorney-in-fact, Juvenal M. Alma Jose
(Juvenal), and her daughter, Priscilla M. Alma Jose (petitioner), would receive the payment of the balance and
proceed with the application for registration.

After Margarita died and with Juvenal having predeceased Margarita without issue, the vendor’s
undertaking fell on the shoulders of petitioner, being Margarita’s sole surviving heir. However, petitioner did
not comply with the undertaking to cause the registration of the properties under the Torrens System. Faced
with petitioner’s refusal to comply, respondent commenced an action for specific performance, injunction, and
damages against her; and that petitioner be ordered to institute registration proceedings and then to execute a
final deed of sale in his favor. Petitioner filed a motion to dismiss, stating that the complaint was already barred
by prescription; and that the complaint did not state a cause of action.

The Regional Trial Court (RTC) initially denied petitioner’s motion to dismiss. However, upon her
motion for reconsideration, the RTC granted the motion to dismiss. Respondent moved for a reconsideration,
but was denied.

Accordingly, respondent filed a notice of appeal. Petitioner countered that the RTC order was not
appealable; that the appeal was not perfected on time; and that respondent was guilty of forum shopping. It
appears that pending the appeal, respondent also filed a petition for certiorari in the Court of Appeals (CA) to
assail the June 24, 1999 and June 21, 2000 orders dismissing his complaint. The CA dismissed the petition for
certiorari. As to the notice on appeal, the CA reversed and set aside the RTC’s decision and remanded the
records to the RTC for further proceedings in accordance with law. The CA denied the motion for
reconsideration filed by petitioner.

Issue: Whether or not the RTC’s decision denying the motion for reconsideration of the order of
dismissal a final order and thus, appealable.

Ruling: YES. The distinction between a final order and an interlocutory order is well known. The
former (final order) disposes of the subject matter in its entirety or terminates a particular proceeding or
action, leaving nothing more to be done except to enforce by execution what the court has determined,
but the latter (interlocutory order) does not completely dispose of the case but leaves something else to be
decided upon. An interlocutory order deals with preliminary matters and the trial on the merits is yet to
be held and the judgment rendered. The test to ascertain whether or not an order or a judgment is
interlocutory or final is: does the order or judgment leave something to be done in the trial court with
respect to the merits of the case? If it does, the order or judgment is interlocutory; otherwise, it is final.

In the instant case, the denial of respondent’s motion for reconsideration left nothing more to be done by
the RTC because it confirmed the dismissal of Civil Case No. 79-M-97. It was clearly a final order, not an
interlocutory one.

FREDESVINDO S. ALVERO, petitioner, vs. M. L. DE LA ROSA, Judge of First Instance of Manila,

JOSE R. VICTORIANO, and MARGARITA VILLARICA, respondents.
No. L-286. March 29, 1946

Facts: On June 25, 1945 respondent Jose R. Victoriano (Victoriano) filed a complaint, in the Court of
First Instance (CFI) of the City of Manila, against Fredesvindo S. Alvero (petitioner) and one Margarita
Villarica (Villarica), alleging two causes of action, to wit, (1) to declare in force the contract of sale, made on
October 1, 1940, between Victoriano and Villarica, of two parcels of land in the Manotoc subdivision,
Balintawak, in the barrio of Calaanan, Municipality of Caloocan, Rizal, with a combined area of 480 square
meters, which land was subsequently sold by said Villarica, in favor of petitioner, on December 31, 1944, for
the sum of P100,000 in Japanese military notes; and (2) to declare said subsequent sale null and void. On July 7,
1945, Villarica filed an answer to said complaint, expressly admitting having sold said land to petitioner, for
P100,000, on December, 1944, due to the imperative necessity of raising funds with which to provide for
herself and family, and that she did not remember the previous sale; at the same time, offering to repurchase
said land from petitioner in the sum of P5,000, but that the latter refused to accept the offer. On July 13, 1945,
petitioner, in answering said complaint, denied the allegations made therein, and claimed exclusive ownership
of the land in question.

Hon. Mariano L. de la Rosa, Judge of the CFI of the City of Manila, on November 16, 1945, rendered
his decision in favor of Victoriano.

On November 28, 1945, petitioner was notified of said decision; and on December 27, 1945, he filed a
motion for reconsideration and a new trial, which were denied on January 3, 1946; and of said order he was
notified on January 7, 1946.

On January 8, 1946, petitioner filed his notice of appeal and record on appeal simultaneously in the
lower court, without filing the P60-appeal bond. On January 14, 1946, Victoriano filed a motion to dismiss the
appeal, and at the same time, asked for the execution of the judgment. On January 15, 1946, petitioner filed an
opposition to said motion to dismiss, alleging that on the very same day, January 15, 1946, said appeal bond for
P60 had been actually filed, and allege as an excuse, for not filing the said appeal bond, in due time, the illness
of his lawyer’s wife, who died on January 10, 1946, and buried the following day. On January 17, 1946, the
respondent judge ordered the dismissal of the appeal declaring that although the notice of appeal and record on
appeal had been filed in due time, the P60-appeal bond was filed too late. On January 23, 1946, petitioner filed
a motion for the reconsideration of the said order dated January 17, 1946, dismissing his appeal; and said
motion was denied on January 29, 1946.

Hence, the present recourse. Respondents filed their answer to the petition for certiorari, alleging (1) that
said petition is defective in form as well as in substance; (2) that there has been no excusable negligence, on the
part of the petitioner, or grave abuse of discretion on the part of the respondent judge, in the instant case.

Issue: Whether or not the petition is defective in form as well as in substance.

Ruling: YES. The period for perfecting petitioner’s appeal commenced from November 28, 1945, when
he was notified of the judgment rendered in the case, and expired on December 28, 1945; and, therefore, his
notice of appeal and record on appeal filed on January 8, 1946, were filed out of time, and much more his
appeal bond, which was only filed on January 15, 1946. Failure to perfect the appeal, within the time
prescribed by the Rules of Court, is a cause for the judgment to become final, and the certification of the
record on appeal thereafter cannot restore the jurisdiction which has been lost.

DOMINADOR B. BUSTOS, petitioner, vs. ANTONIO G. LUCERO, Judge of First Instance of

Pampanga, respondent.
No. L-2068. October 20, 1948.

Facts: Dominador Bustos (petitioner), an accused in a criminal case, filed a motion with the Court of
First Instance (CFI) of Pampanga after he had been bound over to that court for trial, praying that the record of
the case be remanded to the justice of the peace court of Masantol, the court of origin, in order that the
petitioner might cross-examine the complainant and her witnesses in connection with their testimony, on the
strength of which warrant was issued for the arrest of the accused petitioner. Petitioner, assisted by counsel,
appeared at the preliminary investigation. In that investigation, the justice of the peace informed him of the
charges and asked him if he will plead guilty or not, upon which he entered the plea of not guilty. Then his
counsel moved that the complainant present her evidence so that she and her witnesses could be examined and
cross-examined in the manner and form provided by law. The fiscal and the private prosecutor objected,
invoking Sec. 11 of Rule 108, which provides:

“Evidence - which is the "the mode and manner of proving the competent facts and circumstances on which a party
relies to establish the fact in dispute in judicial proceedings”

The objection was sustained denying the motion for reconsideration of the petitioner. In view thereof,
the petitioner’s counsel announced his intention to renounce his right to present evidence, and the justice of the
peace forwarded the case to the CFI.

Justice Tuason citing the case of Dequito and Saling Buhay vs.Arellano, G.R. No. L-1336: “The
constitutional right of an accused to be confronted by the witnesses against him does not apply to preliminary
hearings; nor will the absence of a preliminary examination be an infringement of his right to confront witness.
As a matter of fact, preliminary investigation may be done away with entirely without infringing the
constitutional right of an accused under the due process clause to a fair trial.”
 Issue: Whether or not Sec. 11 of Rule 108 of the Rules of Court infringes Sec. 13, Article VIII, of the
Constitution which deals with substantive matters and impairs substantive rights.

Ruling: NO. Sec. 11, Rule 108 is an adjective law and not a substantive law or substantive right.

In this case, Justice Tuason also provided the distinctions between a substantive law and remedial law,
the former creates substantive rights and the two terms in this respect may be said to be synonymous.
Substantive right is a term which includes those rights which one enjoys under the legal system prior to the
disturbance of normal relations. (60 C.J., 980.) Substantive law is that part of the law which creates, defines
and regulates rights, or which regulates the rights and duties which give rise to a cause of action; that
part of the law which courts are established to administer; as opposed to adjective or remedial law, which
prescribes the method of enforcing rights or obtains redress for their invasion. (36 C. J., 27; 52 C. J. S.,
1026.)

While Sec. 11 of Rule 108 denies to the defendant the right to cross-examine witnesses in a preliminary
investigation, his right to present his witnesses remains unaffected, and his constitutional right to be
informed of the charges against him both at such investigation and at the trial is unchanged.

It is fundamentally a procedural law. The Supreme Court held that Sec. 11 of Rule 108 does not
curtail the sound discretion of the justice of the peace on the matter. Said section defines the bounds of the
defendant’s right in the preliminary investigation.

The foregoing decision was rendered by a divided court. The minority went farther than the majority and
denied even any discretion on the part of the justice of the peace or judge holding the preliminary investigation
to compel the complainant and his witnesses to testify anew. Upon the foregoing considerations, the present
petition is dismissed with costs against the petitioner.
 PANAY RAILWAYS INC., petitioner, vs. HEVA MANAGEMENT and DEVELOPMENT
CORPORATION, PAMPLONA AGRO-INDUSTRIAL CORPORATION, and SPOUSES
CANDELARIA DAYOT and EDMUNDO DAYOT, respondents.
G.R. No. 154061. January 25, 2012.

Facts: Panay Railways, Inc. (PRI) (petitioner) entered into a Real Estate Mortgage with Traders Royal
Bank (TRB) for a loan amounting to P20,000,000.00. The Real Estate Mortgage covers several parcels of land
which includes Lot No. 6153. Petitioner excluded certain portions of Lot No. 6153: that already sold to Shell
Co., Inc. referred to as 6153-B, a road referred to as 6153-C, and a squatter area known as 6153-D.

Due to petitioner’s failure to pay its obligations, the properties were extrajudicially foreclosed by the
TRB. A Certificate of Sale was issued in favor of the bank as the highest bidder and purchaser. Consequently,
the sale of Lot No. 6153 was registered with the Register of Deeds on January 28, 1986 and annotated at the
back of the transfer certificates of title (TCT) covering the mortgaged properties. Thereafter, TRB caused the
consolidation of the title in its name on the basis of a Deed of Sale and an Affidavit of Consolidation after
petitioner failed to exercise the right to redeem the properties. The corresponding TCTs were subsequently
issued in the name of the bank.

On February 12, 1990, TRB filed a Petition for Writ of Possession against petitioner. During the
proceedings, petitioner, through its duly authorized manager and officer-in-charge and with the assistance of
counsel, filed a Manifestation and Motion to Withdraw Motion for Suspension of the Petition for the issuance of
a writ of possession. The pertinent portions of the Manifestation and Motion state:

4. That PRI recognizes and acknowledges petitioner (TRB) to be the registered owner of Lot 1-A; Lot 3834; Lot
6153; Lot 6158; Lot 6159, and Lot 5 covered by TCT No. T-84233; T-84234; T-84235; T-84236; T-84237, T-84238
and T-45724 respectively, free of liens and encumbrances, except that portion sold to Shell Co. found in Lot 5. That
Petitioner (TRB) as registered owner is entitled to peaceful ownership and immediate physical possession of said real
properties.
 It was only in 1994 that petitioner realized that the extrajudicial foreclosure included some excluded
properties in the mortgage contract. Thus, on August 19, 1994, it filed a Complaint for Partial Annulment of
Contract to Sell and Deed of Absolute Sale with Addendum; Cancellation of Title No. T-89624; and
Declaration of Ownership of Real Property with Reconveyance plus Damages.

Meanwhile, respondents filed their respective Motions to Dismiss on these grounds: (1) petitioner had
no legal capacity to sue; (2) there was a waiver, an abandonment and an extinguishment of petitioners claim or
demand; (3) petitioner failed to state a cause of action; and (4) an indispensable party, namely TRB, was not
impleaded.

On July 18, 1997, the RTC issued an Order granting the Motion to Dismiss of respondents. It held that
the Manifestation and Motion filed by petitioner was a judicial admission of TRBs ownership of the disputed
properties. The trial court pointed out that the Manifestation was executed by petitioners duly authorized
representative with the assistance of counsel. This admission thus operated as a waiver barring petitioner from
claiming otherwise.

On August 11, 1997, petitioner filed a Notice of Appeal without paying the necessary docket fees.
Immediately thereafter, respondents filed a Motion to Dismiss Appeal on the ground of nonpayment of docket
fees.

On July 18, 1997, the RTC issued an Order granting the Motion to Dismiss of respondents. It held that
the Manifestation and Motion filed by petitioner was a judicial admission of TRBs ownership of the disputed
properties. The trial court pointed out that the Manifestation was executed by petitioners duly authorized
representative with the assistance of counsel. This admission thus operated as a waiver barring petitioner from
claiming otherwise.

In its Opposition, petitioner alleged that its counsel was not yet familiar with the revisions of the Rules
of Court that became effective only on July 1, 1997. Its representative was likewise not informed by the court
personnel that docket fees needed to be paid upon the filing of the Notice of Appeal. Furthermore, it contended
that the requirement for the payment of docket fees was not mandatory. It therefore asked the RTC for a liberal
interpretation of the procedural rules on appeals.

On September 29, 1997, the RTC issued an Order dismissing the appeal citing Sec. 4 of Rule 41 of the
Rules of Court.

Petitioner thereafter moved for a reconsideration of the Order alleging that the trial court lost jurisdiction
over the case after the former had filed the Notice of Appeal. Petitioner also alleged that the court erred in
failing to relax procedural rules for the sake of substantial justice.

On November 25, 1997, the RTC denied the Motion.

On January 28, 1998, petitioner filed with the Court of Appeals (CA) a Petition for Certiorari and
Mandamus under Rule 65 alleging that the RTC had no jurisdiction to dismiss the Notice of Appeal, and that
the trial court had acted with grave abuse of discretion when it strictly applied procedural rules.

On November 29, 2000, the CA rendered its Decision on the Petition. It held that while the failure of
petitioner to pay the docket and other lawful fees within the reglementary period was a ground for the dismissal
of the appeal pursuant to Sec. 1 of Rule 50 of the Revised Rules of Court, the jurisdiction to do so belonged to
the CA and not the trial court. Thus, appellate court ruled that the RTC committed grave abuse of discretion in
dismissing the appeal and set aside the latter’s assailed Order dated 29 September 1997.

Thereafter, respondents filed their respective Motions for Reconsideration.

 It appears that prior to the promulgation of the CA’s Decision, this Court issued Administrative Matter
(A.M.) No. 00-2-10-SC which took effect on 1 May 2000, amending Rule 4, Sec. 7 and Sec. 13 of Rule 41 of
the 1997 Revised Rules of Court. The circular expressly provided that trial courts may, motu proprio or upon
motion, dismiss an appeal for being filed out of time or for nonpayment of docket and other lawful fees within
the reglementary period. Subsequently, Circular No. 48-2000 was issued on 29 August 2000 and was addressed
to all lower courts.

By virtue of the amendment to Sec. 41, the CA upheld the questioned Orders of the trial court by issuing
the assailed Amended Decision in the present Petition granting respondents Motion for Reconsideration.

The CAs action prompted petitioner to file a Motion for Reconsideration alleging that SC Circular No.
48-2000 should not be given retroactive effect. It also alleged that the CA should consider the case as
exceptionally meritorious. Petitioners counsel, Atty. Rexes V. Alejano, explained that he was yet to familiarize
himself with the Revised Rules of Court, which became effective a little over a month before he filed the Notice
of Appeal. He was thus not aware that the nonpayment of docket fees might lead to the dismissal of the case.

On May 30, 2002, the CA issued the assailed Resolution denying petitioners Motion for
Reconsideration.

Issue: Whether or not the CA erred in sustaining the RTCs dismissal of the Notice of Appeal.

Ruling: No. Statutes and rules regulating the procedure of courts are considered applicable to
actions pending and unresolved at the time of their passage. Procedural laws and rules are retroactive in
that sense and to that extent. The effect of procedural statutes and rules on the rights of a litigant may
not preclude their retroactive application to pending actions. This retroactive application does not violate
any right of a person adversely affected. Neither is it constitutionally objectionable. The reason is that, as
a general rule, no vested right may attach to or arise from procedural laws and rules. It has been held
that a person has no vested right in any particular remedy, and a litigant cannot insist on the application
to the trial of his case, whether civil or criminal, of any other than the existing rules of procedure. More
so when, as in this case, petitioner admits that it was not able to pay the docket fees on time. Clearly,
there were no substantive rights to speak of when the RTC dismissed the Notice of Appeal.

The argument that the CA had the exclusive jurisdiction to dismiss the appeal has no merit. When this
Court accordingly amended Sec. 13 of Rule 41 through A.M. No. 00-2-10-SC, the RTCs dismissal of the action
may be considered to have had the imprimatur of the Court. Thus, the CA committed no reversible error when it
sustained the dismissal of the appeal, taking note of its directive on the matter prior to the promulgation of its
Decision.

As early as 1932, in Lazaro v. Endencia, we have held that the payment of the full amount of the docket
fees is an indispensable step for the perfection of an appeal. The Court acquires jurisdiction over any case only
upon the payment of the prescribed docket fees.

Moreover, the right to appeal is not a natural right and is not part of due process. It is merely a statutory
privilege, which may be exercised only in accordance with the law.

We have repeatedly stated that the term substantial justice is not a magic wand that would automatically
compel this Court to suspend procedural rules. Procedural rules are not to be belittled or dismissed simply
because their non-observance may result in prejudice to a party’s substantive rights. Like all other rules, they
are required to be followed, except only for the most persuasive of reasons when they may be relaxed to relieve
litigants of an injustice not commensurate with the degree of their thoughtlessness in not complying with the
procedure prescribed.
 We cannot consider counsels failure to familiarize himself with the Rules of Court as a persuasive
reason to relax the application of the Rules. It is well-settled that the negligence of counsel binds the client. This
principle is based on the rule that any act performed by lawyers within the scope of their general or implied
authority is regarded as an act of the client. Consequently, the mistake or negligence of the counsel of petitioner
may result in the rendition of an unfavorable judgment against it.

FELIX MARTOS, JIMMY ECLANA, RODEL PILONES, RONALDO NOVAL, JONATHAN

PAILAGO, ERNESTO MONTANO, DOYONG JOSE, DEO MAMALATEO, ROSELO MAGNO,
BONNIE SANTILLAN, ARSENIO GONZALES, ALEX EDRADAN, MICHAEL ERASCA, MARLON
MONTANO, VICENTE OLIVEROS, REYNALDO LAMBOSON, DOMINGO ROTA, EDDIE ROTA,
ZALDY OLIVEROS, ANTONIO NATIL, HERMIE BUISON, ROGER BUISON, MARIANO LAZATE,
JUAN VILLABER, LIMUEL LLANETA, LITO BANTILO, TERSO GARAY, ROWEL BESTOLO,
JERRY YORTAS, PASTOR PANTIG, GAVINO NICOLAS, RAFAEL VILLA, FELIX YORTAS,
MELVIN GARAY, NEIL DOMINGUEZ, REYNALDO EVANGELISTA, JR., JOSE RAMOS, ELVIN
ROSALES, JUN GRANEHO, DANNY ASPARES, SALVEDOR TONLOC, ROLANDO
EVANGELISTA, RICKY M. FRANCISCO, EDUARDO ALEGRIA, SALVADOR SANTOS, GREG
BISONIA, RUFO CARBILLO, MARVIN MONTERO, DANILO BESSIRE, ALLAN CABALLERO,
ORLANDO LIMOS, EDGARDO BICLAR, MANDY MAMALATEO, ALFRED GAJO, ERIC
CASTRENCE, ANTHONY MOLINA, JAIME SALIM, ROY SILVA, DANILO BEGORIE, PEPING
CELISANA, ERIC RONDA, RUFO CARBANILLO, ROWEL BATA, RICARDO TOLENTINO,
ARNEL ARDINEZ, FERDINAND R. ARANDIA, ROMEO R. GARBO, ANTONIO ROTA,
REYNIELANDRE QUINTANILLA, JOSELITO HILARIO, JIMMY CAMPANA, DANILO LIDO-AN,
EMERSON PENAFLOR, CESAR PABALINAS, JONATHAN MELCHOR, ALEX DAVID, EUTlQUIO
ALCALA, MICHAEL CARANDANG, EDUARDO MANUEL, RAMON EVANGELISTA, RUBEN
MENDOZA, ERNESTO MENDOZA, RICKY RAMOS, ROBERTO NOVELLA, RUBEN CONDE,
DANILO POLISTICO, DOMINGO MENDOZA, FERNANDO SAN GABRIEL, and DOMINGO
ROTO, petitioners, vs. NEW SAN JOSE BUILDERS, INC., respondent.
G.R. No. 192650. October 24, 2012.

FACTS: Questioned in this Petition for Review is the July 31, 2009 Decision of the CA and its June 17,
2010 Resolution, which reversed and set aside the July 30, 2008 Decision and October 28, 2008, Resolution of
the NLRC; and reinstated the May 23, 2003 Decision of the Labor Arbiter (LA).

New San Jose Builders, Inc. (hereafter petitioner) is a domestic corporation duly organized and existing
under the laws of the Philippines and is engaged in the construction of road, bridges, buildings, and low cost
houses primarily for the government. One of the projects of petitioner is the San Jose Plains Project (SJPP),
located in Montalban, Rizal. SJPP, which is also known as the “Erap City” calls for the construction of low cost
housing, which are being turned over to the National Housing Authority (NHA) to be awarded to deserving
poor families.

Private respondents alleged that, on various dates, petitioner hired them on different positions.

Sometime in 2000, petitioner was constrained to slow down and suspend most of the works on the SJPP
project due to lack of funds of the NHA. Thus, the workers were informed that many of them would be laid off
and the rest would be reassigned to other projects. Juan Villaber, Terso Garay, Rowell Batta, Pastor Pantig,
Rafael Villa, and Melvin Garay were laid off. While on the other hand, Felix Martos, Ariel Dominguez, Greg
Bisonia, Allan Caballera, Orlando Limos, Mandy Mamalateo, Eric Castrence, Anthony Molina, and Roy Silva
were among those who were retained and were issued new appointment papers to their respective assignments,
indicating therein that they are project employees. However, they refused to sign the appointment papers as
project employees and subsequently refused to continue to work.

On different dates, three (3) Complaints for Illegal Dismissal and for money claims were filed before the
NLRC against petitioner and Jose Acuzar, by private respondents who claimed to be the former employees of
petitioner.

Petitioner denies that private respondents were illegally dismissed, and alleged that they were project
employees, whose employments were automatically terminated upon completion of the project for which they
were hired. On the other hand, private respondents claim that petitioner hired them as regular employees,
continuously and without interruption, until their dismissal on February 28, 2002.

Subsequently, the 3 Complaints were consolidated and assigned to Labor Arbiter Facundo Leda.

On May 23, 2003, the LA handed down a decision declaring, among others, that petitioner Felix Martos
(Martos) was illegally dismissed and entitled to separation pay, backwages and other monetary benefits; and
dismissing, without prejudice, the complaints/claims of the other complainants (petitioners).

Both parties appealed the LA decision to the NLRC. Petitioners appealed that part which dismissed all
the complaints, without prejudice, except that of Martos. On the other hand, New San Jose Builders, Inc.
(respondent) appealed that part which held that Martos was its regular employee and that he was illegally
dismissed. On July 30, 2008, the NLRC resolved the appeal by dismissing the one filed by respondent and
partially granting that of the other petitioners.

After the denial of its motion for reconsideration, respondent filed before the CA a petition for certiorari
under Rule 65 of the Rules of Court.

On July 31, 2009, the CA rendered a decision reversing and setting aside the July 30, 2008 Decision and
the October 28, 2008 Resolution of the NLRC and reinstating the May 23, 2003 Decision of the LA.

The CA explained that the NLRC committed grave abuse of discretion in reviving the complaints of
petitioners despite their failure to verify the same. Out of the 102 complainants, only Martos verified the
position paper and his counsel never offered any explanation for his failure to secure the verification of the
others. The CA also held that the NLRC gravely abused its discretion when it took cognizance of petitioners’
appeal because Rule 41, Section 1(h) of the 1997 Rules of Civil Procedure, as amended, which is suppletory,
provides that no appeal may be taken from an order dismissing an action without prejudice.

Nevertheless, the CA stated that the factual circumstances of Martos’ employment and his dismissal
from work could not equally apply to petitioners because they were not similarly situated. The NLRC did not
even bother to look at the evidence on record and inappropriately granted monetary awards to petitioners who
had either denied having filed a case or withdrawn the case against respondent. According to the CA, the
position papers should have covered only those claims and causes of action raised in the complaint excluding
those that might have been amicably settled.

With respect to Martos, the CA ruled that he was a regular employee of respondent and his termination
was illegal. It explained that Martos should have been considered a regular employee because there was no
indication that he was merely a project employee when he was hired. To show otherwise, respondent should
have presented his employment contract for the alleged specific project and the successive employment
contracts for the different projects or phases for which he was hired. In the absence of such document, he could
not be considered such an employee because his work was necessary and desirable to the respondent’s usual
business and that he was not required to sign any employment contract fixing a definite period or duration of his
engagement. Thus, Martos already attained the status of a regular employee. Moreover, the CA noted that
respondent did not report the termination of Martos’ supposed project employment to the Department of Labor
and Employment (DOLE), as required under Department Order No. 19.

Being a regular employee, the CA concluded that he was constructively dismissed when he was asked to
sign a new appointment paper indicating therein that he was a project employee and that his appointment would
be co-terminus with the project.

Issues: Whether or not the CA was correct in dismissing the complaints filed by those petitioners who
failed to verify their position papers.

Ruling: Yes. Sections 4 and 5 of Rule 7 of the 1997 Rules of Civil Procedure provide:

Sec. 4. Verification. – Except when otherwise specifically required by law or rule, pleadings need not be under oath,
verified or accompanied by affidavit.

A pleading is verified by an affidavit that the affiant has read the pleadings and that the allegations therein are true
and correct of his personal knowledge or based on authentic records. A pleading required to be verified which contains
a verification based on "information and belief" or upon "knowledge, information and belief" or lacks a proper
verification, shall be treated as an unsigned pleading.

SEC. 5. Certification against forum shopping. – The plaintiff or principal party shall certify under oath in the
complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed thereto and
simultaneously filed therewith:

(a) that he has not theretofore commenced any action or filed any claim involving the same issues in any court,
tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (b)
if there is such other pending action or claim, a complete statement of the present status thereof; and (c) if he should
thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that fact within five
(5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed.

Failure to comply with the foregoing requirements shall not be curable by mere amendment of the
complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice,
unless otherwise provided, upon motion and after hearing. The submission of a false certification or non-
compliance with any of the undertakings therein shall constitute indirect contempt of court, without
prejudice to the corresponding administrative and criminal actions. If the acts of the party or his counsel
clearly constitute willful and deliberate forum shopping, the same shall be ground for summary dismissal
with prejudice and shall constitute direct contempt, as well as a cause for administrative sanctions.

The verification requirement is significant, as it is intended to secure an assurance that the allegations in
the pleading are true and correct and not the product of the imagination or a matter of speculation, and that the
pleading is filed in good faith. Verification is deemed substantially complied with when, as in this case, one
who has ample knowledge to swear to the truth of the allegations in the complaint or petition signs the
verification, and when matters alleged in the petition have been made in good faith or are true and correct.
The absence of a proper verification is cause to treat the pleading as unsigned and dismissible. The lone
signature of Martos would have been sufficient if he was authorized by his co-petitioners to sign for them.
Unfortunately, petitioners failed to adduce proof that he was so authorized.

The liberal construction of the rules may be invoked in situations where there may be some
excusable formal deficiency or error in a pleading, provided that the same does not subvert the essence of
the proceeding and it at least connotes a reasonable attempt at compliance with the rules. Besides,
fundamental is the precept that rules of procedure are meant not to thwart but to facilitate the
attainment of justice; hence, their rigid application may, for deserving reasons, be subordinated by the
need for an apt dispensation of substantial justice in the normal course. They ought to be relaxed when
there is subsequent or even substantial compliance, consistent with the policy of liberality espoused by
Rule 1, Section 6.14 Not being inflexible, the rule on verification allows for such liberality.

Considering that the dismissal of the other complaints by the LA was without prejudice, the other
complainants should have taken the necessary steps to rectify their procedural mistake after the decision of the
LA was rendered. They should have corrected this procedural flaw by immediately filing another complaint
with the correct verification this time. Surprisingly, they did not even attempt to correct this technical blunder.
Worse, they committed the same procedural error when they filed their appeal16 with the NLRC. Under the
circumstances, the Court agrees with the CA that the dismissal of the other complaints were brought about by
the own negligence and passive attitude of the complainants themselves.

Most probably, as the list submitted is not complete with the information as to when each started and
when each was dismissed there must be some truth in the claim of respondent that those complainants who
failed to affix their signatures in the verification were either not employees of respondent at all or they simply
refused to prosecute their complaints. In its position paper, respondent alleged that, aside from the 4
complainants who withdrew their complaints, only 17 out of the more or less 104 complainants appeared on its
records as its former project employees or at least known by it to have worked in one of its construction
projects. From the sworn statements executed by Felix Yortas, Marvin Batta, Lito Bantillo, Gavino Felix
Nicolas, and Romeo Pangacian Martos, they already withdrew their complaints against respondent. Their status
and cause of action not being clear and proven, it is just not right that these complaints be considered as
similarly situated as Martos and entitled to the same benefits.
 MARIA CONSOLACION RIVERA-PASCUAL, petitioner, vs. SPOUSES MARILYN LIM and
GEORGE LIM and the REGISTRY OF DEEDS OF VALENZUELA CITY, respondents.
G.R. No. 191837, September 19, 2012

Facts: The present controversy involves a parcel of land located in Valenzuela City registered under the
name of the Spouses Lim (or private respondents). On September 2004, the petitioner filed before the Office of
the Regional Agrarian Reform (RARAD) for Region IV-A a petition to be recognized as a tenant of a property
located in Valenzuela City against one Deato. At that time, the property was under Deato’s name. During the
pendency of the petition, Deato sold the property to Spouses Lim. The sale was registered on December 2004
leading to the issuance of a TCT in favor of the private respondents. Thus, the petitioner filed a motion on
March 2005 to implead the Spouses Lim.

On December 2005, the petition was granted by the Regional Adjudicator (RA). The dispositive portion
of the decision includes, inter alia, that the petitioner is the tenant of the subject land by succession from her
deceased father and that she should be subrogated to the rights of the private respondents. The judgment of the
RA became final. Thus, Consolacion filed a motion for execution to which a writ of execution was issued by the
RA on January 2008. Seven days after, the petitioner filed a petition against the private respondents and the
Registrar of Deeds praying for the issuance of an order directing Spouses Lim to accept the amount of
P10million which she undertook to tender, declare the property redeemed and cancel the TCT.

RARAD: The petition was given due course by the RA, the dispositive portion of the decision stating
that the property is lawfully redeemed, ordering the private respondents to accept the amount consigned with
the DARAB, execute a deed of redemption in favor of the petitioner and directing the RD to cancel the TCT
registered in the name of the private respondents and issue a new one in favor of the petitioner.

DARAB: The decision of RARAD was reversed. Consolacion moved for reconsideration which the
DARAB denied.

Court of Appeals (CA): Consolacion filed a petition for review under Rule 43 of the Rules of Court. The
CA did not give due course to the petition due to the following technical grounds: a) failure of counsel to
indicate in the petition his MCLE Certificate of Compliance or Exemption Number and b) the jurat of
Consolacion’s verification and certification against non-forum-shopping failed to indicate any competent
evidence of Consolacion’s identity apart from her community tax certificate. She moved for reconsideration but
was denied.

Issue: Whether or not the petition should be denied due to the unexplained failure to comply with basic
procedural requirements of the Rules of Court.

Ruling: Yes. Consolacion and her counsel claimed inadvertence and negligence but they did not explain
the circumstances thereof. Absent valid and compelling reasons, the requested leniency and liberality in
the observance of procedural rules appears to be an afterthought, hence, cannot be granted. The CA saw
no compelling need meriting the relaxation of the rules. Neither did the Court see any. The Court is aware of
the exceptional cases where technicalities were liberally construed. However, in these cases, outright dismissal
is rendered unjust by the presence of a satisfactory and persuasive explanation. The parties therein who prayed
for liberal interpretation were able to hurdle that heavy burden of proving that they deserve an exceptional
treatment. It was never the Court’s intent “to forge a bastion for erring litigants to violate the rules with
impunity.” The Court will not condone a cavalier attitude towards procedural rules. It is the duty of
every member of the bar to comply with these rules. They are not at liberty to seek exceptions should
they fail to observe these rules and rationalize their omission by harking on liberal construction. While it
is the negligence of Consolacion's counsel that led to this unfortunate result, she is bound by such.

COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. MIRANT PAGBILAO CORPORATION

(formerly SOUTHERN ENERGY QUEZON, INC.), respondent.
G.R. No. 159593, October 12, 2006.

Facts: Migrant Pagbilao Corporation (MPC) is a domestic corporation engaged in the business of power
generation and subsequent sale thereof. It is registered with the BIR as VAT registered entity. For the period of
April 1, 1996 to December 31, 1996, MPC seasonably filed its quarterly VAT returns reflecting an accumulated
input taxes in the amount of P 39, 330,500.00. These taxes were allegedly paid my MPC to the suppliers of
capital goods and services.MPC filed an application for a tax refund of the unutilized VAT paid on capital
goods. MPC did not wait for an answer from the BIR and filed a petition for review in order to toll the running
period for claiming the refund. The BIR Commissioner raised as a defense that the application for refund is still
pending and therefore premature. The Commissioner also argued that MPC must produce evidence to prove that
it is entitled to the refund, as tax refunds are construed strictly against the tax payer. While the case was
pending, Revenue Officers investigated MPC’s application and recommended that MPC’s input taxes should be
reduced by P49, 616.40 for unapplied input taxes on capital goods. A third party audit was also conducted and
found that the input taxes only amounted to P28, 745,502.The Court of Tax Appeals rule in favor of MPC and
granted the tax refund. The Court of Appeals denied the BIR’s petition for review, declaring that the BIR cannot
validly change its theory on the case on appeal.

Issue: Whether or not the observance of procedural rules should be relaxed.

Ruling: No. The general rule is that a party cannot change his theory of the case on appeal. It was
only after the CTA ruled against the BIR, that the latter filed his petition for review before the CA, and for the
first time averred that the MPC was a public utility and does not pay VAT, thereby disqualifying it from
claiming a refund. The settled rule is that a party cannot change his theory of the case or his cause of
action on appeal. It affirms that courts of justice have no jurisdiction or power to decide a question not in
issue.

Such a rule has been expressly adopted in Rule 44, Section 15 of the 1997 Rules of Civil Procedure,
which provides – SEC. 15. Questions that may be raised on appeal. – Whether or not the appellant has filed a
motion for new trial in the court below, he may include in his assignment of errors any question of law or fact
that has been raised in the court below and which is within the issues framed by the parties.
 SM LAND, INC. (Formerly Shoemart, Inc.) and WATSONS PERSONAL CARE STORES, PHILS.,
INC., petitioners, vs. CITY OF MANILA, LIBERTY TOLEDO, in her official capacity as the City
Treasurer of Manila and JOSEPH SANTIAGO, in his official capacity as the Chief of License Division of
the City of Manila, respondents.
G.R. No. 197151. October 22, 2012.

Facts: On the strength of the provisions of Tax Ordinance Nos. 7988 and 8011, which amended
Ordinance No. 7794, also known as the Revenue Code of Manila, herein respondent City of Manila assessed
herein petitioners, together with their other sister companies, increased rates of business taxes for the year 2003
and the first to third quarters of 2004. Petitioners and their sister companies paid the additional taxes under
protest.

Subsequently, petitioners and their sister companies claimed with herein respondent City Treasurer of
Manila a credit or refund of the increased business taxes which they paid for the period abovementioned.
However, the City Treasurer denied their claim.

Petitioners and their sister companies filed a complaint with the Regional Trial Court (RTC) of Pasay
City a Complaint for Refund and/or Issuance of Tax Credit of Taxes Illegally Collected. RTC rendered a
summary judgment in favor of herein petitioners.

The RTC held that Tax Ordinance Nos. 7988 and 8011, which were the bases of the City of Manila in
imposing the assailed additional business taxes on petitioners and their co-plaintiffs, had already been declared
null and void by this Court in the case of Coca-Cola Bottlers Philippines, Inc. v. City of Manila.

Respondents moved for reconsideration, but the RTC denied the same.

The CTA Second Division sustained the ruling of the RTC that Ordinance Nos. 7988 and 8011 are null
and void. The CTA Second Division, nonetheless, held that herein petitioners' claims for tax refund should be
denied because of their failure to comply with the provisions of the Rules of Court requiring verification and
submission of a certificate of non-forum shopping. The CTA Second Division noted that petitioners failed to
attach to the complaint filed with the RTC their respective Secretary's Certificates authorizing their supposed
representative, a certain Atty. Rex Enrico V. Cruz III (Atty. Cruz), to file the said complaint in their behalf. The
CTA also observed that in the Verification and Certification of Non-Forum Shopping attached to the complaint,
petitioner SM Land, Inc. was not included in the list of corporations represented by the person who executed the
said Verification and Certification.

Aggrieved, petitioners filed a petition for review with the CTA En Banc. The CTA En Banc rendered its
assailed Decision affirming in toto the judgment of the CTA Second Division.

Issue: Whether or not Sec. 11, R.A. No. 1125, as amended by republic act no. 9282, clearly did not
intend for the thirty (30)-day period to appeal decisions of the regional trial court to the CTA to be extendible.

Ruling: The Court is not persuaded by petitioners’ insistence that the 30-day period to appeal decisions
of the RTC to the CTA is non-extendible.

Petitioners cited cases decided by this Court wherein it was held that the 30-day period within which to
file an appeal with the CTA is jurisdictional and non-extendible. However, these rulings had been superseded
by this Court's decision in the case of City of Manila v. Coca-Cola Bottlers, Philippines, Inc., as correctly cited
by the CTA En Banc. Suffice it to say that this Court's ruling in the said case is instructive, to wit:
xxxx
The period to appeal the decision or ruling of the RTC to the CTA via a Petition for Review is specifically
governed by Section 11 of Republic Act No. 9282, and Section 3 (a), Rule 8 of the Revised Rules of the CTA.

It is crystal clear from the afore-quoted provisions that to appeal an adverse decision or ruling of the RTC to the
CTA, the taxpayer must file a Petition for Review with the CTA within 30 days from receipt of said adverse
decision or ruling of the RTC. It is also true that the same provisions are silent as to whether such 30-day period
can be extended or not. However, Section 11 of Republic Act No. 9282 does state that the Petition for Review
shall be filed with the CTA following the procedure analogous to Rule 42 of the Revised
Rules of Civil Procedure.

Following by analogy, Section 1, Rule 42 of the Revised Rules of Civil Procedure, the 30-day original
period for filing a Petition for Review with the CTA under Section 11 of Republic Act No. 9282, as
implemented by Section 3 (a), Rule 8 of the Revised Rules of the CTA, may be extended for a period of 15
days. No further extension shall be allowed thereafter, except only for the most compelling reasons, in which
case the extended period shall not exceed 15 days.

Nonetheless, the Court agrees with petitioners' contention in its second argument that there are
compelling reasons in the present case which justify the relaxation of the rules on verification and certification
of non-forum shopping.

It must be kept in mind that while the requirement of the certification of non-forum shopping is
mandatory, nonetheless, the requirements must not be interpreted too literally and, thus, defeat the
objective of preventing the undesirable practice of forum shopping.

Time and again, the Court has held that rules of procedure are established to secure substantial
justice. Being instruments for the speedy and efficient administration of justice, they must be used to
achieve such end, not to derail it. In particular, when a strict and literal application of the rules on non-
forum shopping and verification will result in a patent denial of substantial justice, these may be liberally
construed.
 Edgardo Pinga v. Heirs of German Santiago, G.R. No.170354, June 30, 2006

Facts: Eduardo Pinga, herein petitioner, together with Vicente Saavedra was named as defendants in an
injunction case filed by herein respondent Heirs of Santiago. It was alleged in the complaint dated 1998 that
Pinga and Saavedra had been unlawlly entering the coco lands of the respondents cutting trees and bamboo
grass and gathering fruits of the trees therein.

In his answer with counterclaim, Pinga disputed the ownership over the property by the respondent and
claimed the same was owned by his father who was already in possession thereof since 1930s. Furthermore,
Pinga alleged that as far back as 1968, there was already an order ejecting the respondents from the property
after a complaint for forcible entry was filed by the heirs of Edmundo Pinga.

Several years have passed and the trial of the case had not yet been completed due to the several faults
of the Respondent (as plaintiff), as when they failed to present evidence. And on 2004, the RTC ordered the
dismissal of the action on the ground of Plaintiff's fault to prosecuted the case for unreasonable length of time.
At the same time, RTC also allowed Pinga to present his evidence ex parte with respect to his counterclaim.

The Respondents filed a Motion for Reconsideration, opting however not to seek that their complaint be
reinstated, but praying instead that the entire action be dismissed and Petitioner be disallowed from presenting
evidence ex-parte. They argued that the order of the RTC in allowing Pinga to present evidence ex parte would
circumvent the principle laid down in established jurisprudence which hold that a counterclaim cannot exist
independently from the principal complaint and be adjudicated separately.

Thereafter, the RTC granted the Motion for Reconsideration filed by the respondent on the ground that
there was no Opposition filed by Pinga. Thus, Petitioner Pinga moved to reconsider the order granting the
earlier motion for reconsideration by the respondents but it was denied. Notably, the respondents filed an
Opposition to Defendants’ Urgent Motion for Reconsideration, wherein they argued that the prevailing
jurisprudential rule is that "compulsory counterclaims cannot be adjudicated independently of plaintiff’s cause
of action," and " the dismissal of the complaint carries with it the dismissal of the compulsory counterclaims."

Aggrieved, Pinga elevated the case to the Supreme Court by way of petition for review under Rule 45 on
a pure question of law regarding the total dismissal of the case.
 Issue: Whether or not the dismissal of the complaint necessarily carries the dismissal of the compulsory
counterclaim.

Ruling: No. The dismissal of the complaint does not necessarily carries with it the dismissal of the
compulsory counterclaim.

Under Sec. 3 Rule 17 of the 1997 Rules of Civil Procedure:

SEC. 3. Dismissal due to fault of plaintiff.—If, for no justifiable cause, the plaintiff fails to appear on the date of the
presentation of his evidence in chief on the complaint, or to prosecute his action for an unreasonable length of time, or
to comply with these Rules or any order of the court, the complaint may be dismissed upon motion of defendant or upon
the court's own motion, without prejudice to the right of the defendant to prosecute his counterclaim in the same or in a
separate action. This dismissal shall have the effect of an adjudication upon the merits, unless otherwise declared by the
court.

The Court compared the same with the earlier 1964 Rules of Civil Procedure which was silent on the
effect of such dismissal due to failure to prosecute on the pending counterclaims. As a result, there arose what
one authority on remedial law characterized as "the nagging question of whether or not the dismissal of the
complaint carries with it the dismissal of the counterclaim."

The Court also made a lengthy discussion on the difference between Sections 2 and 3 of Rules 17. The
dismissal of the complaint under Section 2 is at the instance of plaintiff, for whatever reason he is minded
to move for such dismissal, and, as a matter of procedure, is without prejudice unless otherwise stated in
the order of the court or, for that matter, in plaintiff's motion to dismiss his own complaint. Section 3 on
the other hand, contemplates a dismissal not procured by plaintiff, albeit justified by causes imputable to
him. Here, the issue of whether defendant has a pending counterclaim, permissive or compulsory, is not
of determinative significance. The dismissal of plaintiff's complaint is evidently a confirmation of the
failure of evidence to prove his cause ofaction outlined therein, hence the dismissal is considered, as a
matter of evidence, an adjudication on the merits.

The complaint can accordingly be dismissed, but relief can nevertheless be granted as a matter of course
to defendant on his counterclaim as alleged and proved, with or without any reservation therefor on his part,
unless from his conduct, express or implied, he has virtually consented to the concomitant dismissal of his
counterclaim.

The present rule embodied in Sections 2 and 3 of Rule 17 ordains a more equitable disposition of
the counterclaims by ensuring that any judgment thereon is based on the merit of the counterclaim itself
and not on the survival of the main complaint. Certainly, if the counterclaim is palpably without merit or
suffers jurisdictional flaws which stand independent of the complaint, the trial court is not precluded
from dismissing it under the amended rules, provided that the judgment or order dismissing the
counterclaim is premised on those defects. At the same time, if the counterclaim is justified, the amended
rules now unequivocally protect such complaint from peremptory dismissal by reason of the dismissal of
the complaint.
 In the Matter of the Petition for the Issuance of a Writ of Amparo in Favor of Lilibeth O. Ladaga vs.
Maj. Gen. Reynaldo Mapagu.
G.R. No. 189689-91, November 13, 2012.

Facts: Petitioners share the common circumstance of having their names included in what is alleged to
be a JCICC “AGILA” 3rd Quarter 2007Order of Battle Validation Result of the Philippine Army's 10th Infantry
Division (10thID). They perceive that by the inclusion of their names in the said Order of Battle (OB List), they
become easy targets of unexplained disappearances or extra legal killings–a real threat to their life, liberty and
security. ATTY. LILIBETH O. LADAGA (Atty.Ladaga),first came to know of the existence of the OB List
from an undisclosed source on May 21, 2009. In the OB List, it was reflected that the ULTIMATE GOAL is to
TRY TO OUSTPGMAON 30 NOV 2007.

On the other hand, Atty. Angela Librado-Trinidad (Atty. Librado-Trinidad), delivered a privileged
speech before the members of the Sangguniang Panlungsod to demand the removal of her name from said OB
List. The Commission on Human Rights, for its part, announced the conduct of its own investigation into the
matter. According to Atty. Librado-Trinidad, in the course of the performance of her dutites and functions, she
has not committed any act against national security that would justify the inclusion of her name in the said OB
List. She said that sometime in May 2008, two suspicious-looking men tailed her vehicle. Also, on June 23,
2008 three men tried to barge into their house.

Meanwhile, Atty. Carlos Isagani T. Zarate was informed that he was also included on the OB List. In his
petition, he alleged that the inclusion of his name in the said OB List was due to his advocacies as a public
interest or human rights lawyer. The Petitioners assert that the OB List is really a military hit-list as allegedly
shown by the fact that there have already been three victims of extrajudicial killing whose violent deaths can be
linked directly to the OB List.

On June 16, 2009 filed before the RTC a Petition for the Issuance of a Writ of Amparo. The RTC
subsequently issued separate Writs of Amparo, directing the respondents to file a verified written return. In the
return of the respondents, they denied authorship of the OB List, and alleged that petitioners failed to show that
they were responsible for the alleged threats. After submission of the parties’ respective Position Papers, the
RTC issued Orders finding no substantial evidence to show that the perceived threat to petitioners’ life, liberty
and security was attributable to the unlawful act or omission of the respondents. The privilege of the Writ was
therefore denied.

Issues: Whether or not the totality of evidence satisfies the degree of proof required under the Writ of
Amparo.

Ruling: No, the evidence does not satisfy degree of proof for the issuance of the Writ of Amparo. The
Writ of Amparo was promulgated by the Court pursuant to its rule-making powers in response to the
alarming rise in the number of cases of enforced disappearances and extrajudicial killings. It is an
extraordinary remedy intended to address violations of, or threats to, the rights to life, liberty or security
and that, being a remedy of extraordinary character, is not one to issue on amorphous or uncertain
grounds but only upon reasonable certainty. Justifying allegations must support the issuance of the writ, on
the following matters:

1. The personal circumstances of the petitioner;

2. The name and personal circumstances of the respondent responsible for the threat, act or
omission;
3. The right to life, liberty and security of the aggrieved party violated or threatened with violation
by an unlawful act or omission of the respondent and how such threat or violation is committed
with the attendant circumstances detailed in supporting affidavits;
4. The investigation conducted specifying the names, personal circumstances and addresses of the
investigating authority or individuals;
5. Actions and recourses taken by the petitioner to determine the fate or whereabouts of the
aggrieved party and the identity of the person responsible for the threat, act or omission;
6. The relief prayed for.

Under the Rule on the Writ of Amparo, the parties shall establish their claims by substantial
evidence, and if the allegations in the petition are proven by substantial evidence, the court shall grant
the privilege of the writ and such reliefs as may be proper and appropriate. Substantial evidence is that
amount of relevant evidence which a reasonable mind might accept as adequate to support a conclusion.
Petitioners sought to prove that the inclusion of their names in the OB List presented a real threat to their
security by attributing the violent deaths of the other known activists to the inclusion of their names or the
names of their militant organizations in the subject OB List. However, the existence of the OB List could not be
directly associated with the menacing behaviour of suspicious men or the violent deaths of certain personalities.

The Petitioners cannot assert that the inclusion of their names in the OB List is as real a threat as that
which brought ultimate harm to the other victims without corroborative evidence from which it can be
presumed that the suspicious deaths of these three people were in fact, on account of their militant affiliations.
The Petitioners therefore were not able to prove by substantial evidence that there was an actual threat to their
rights to life, liberty and security. The mere inclusion of their names in the OB List is not sufficient enough
evidence for the issuance of the Writ of Amparo.
 Audi AG v. Hon. Jules A. Mejia, in his capacity as Executive Judge of the Regional Trial Court,
Alaminos City; Auto ProminenceCorporation; and Proton Pilipinas Corporation
G.R. No. 167533, July 27, 2007.

Facts: Audi AG, a non-resident foreign company engaged in the manufacture of Audi brand cars, is
organized in the Federal Republic of Germany, with principal office at Ingolstadt, Germany. It is not licensed to
do business in the Philippines but is suing on an isolated transaction.

On August 1, 1996, Audi AG entered into an Assembly and Distributorship Agreement with Proton.
According to the agreement, (1) Proton shall be the sole assembler and distributor of Audi cars in the
Philippines; and (2) Audi AG will make representations that Proton will be the exclusive assembler and
distributor of Audi cars and local parts manufacturer for export purposes.

Relying on Audi AG’s representations, Proton borrowed money to buy (1) assembly plant and
distributorship, (2) tools and equipment, (3) showrooms and offices, and (4) license fees and brochures, etc.

Proton later discovers that Audi AG did not include the Philippines in its ASEAN Assembly Strategy
program, but only Malaysia. A letter was later sent by Audi AG terminating the agreements.

On March 21, 2005, Auto Prominence and Proton filed a complaint for specific performance and
injunction (with application for TRO and preliminary injunction) against petitioner Audi AG with the RTC,
Alaminos City.

After hearing, the Executive Judge ordered the issuance of a TRO and the maintenance of the status quo
ante, even prior to the raffle of the case. Audi AG filed a Petition for Certiorari under Rule 65 before the
Supreme Court. The respondents challenged the Petition for being filed without a prior Motion for
Reconsideration and failure to observe the hierarchy of courts, among others.

Issue: Whether or not the petition should be dismissed.

Ruling: Yes. First, petitioner failed to file with the trial court the requisite motion for reconsideration of
the challenged Order before resorting to the instant recourse. The well-established rule is that a motion for
reconsideration is an indispensable condition before an aggrieved party can resort to the special civil
action for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, as amended.

The argument that a motion for reconsideration is unnecessary cannot be accepted. Petitioner may not
arrogate unto itself the determination of whether a motion for reconsideration is necessary or not. Its submission
runs counter to the purpose of the rule that a motion for reconsideration would afford the erring court or agency
an opportunity to rectify the error/s it may have committed without the intervention of a higher court. Such
motion is not only an expeditious remedy of an aggrieved party but also obviates an improvident and
unnecessary recourse to appellate proceedings.

Second, petitioner, by filing directly with this Court its petition, has ignored the established rule on
hierarchy of courts. It must be stressed that the Court of Appeals and the Supreme Court have original
concurrent jurisdiction over petitions for certiorari. The rule on hierarchy of courts determines the venue of
appeals. Such rule is necessary to prevent inordinate demands upon the Courts precious time and attention
which are better devoted to matters within its exclusive jurisdiction, and to prevent further overcrowding of the
Court’s docket. Audi AG should have filed the petition before the Court of Appeals instead. Procedural rules
are not to be disdained as mere technicalities. They may not be ignored to suit the convenience of a party.
It ensures the effective enforcement of substantive rights through the orderly and speedy administration
of justice. Public order and our system of justice are well served by a conscientious observance by the
parties of the procedural rules.
COMMISSION ON ELECTIONS, COMELEC CHAIRMAN ALFREDO L. BENIPAYO, COMELEC
COMMISSIONERS RESURRECCION Z. BORRA and FLORENTINO A. TUASON, JR., petitioners,
vs. JUDGE MA. LUISA QUIJANO-PADILLA, REGIONAL TRIAL COURT OF QUEZON CITY,
BRANCH 215 and PHOTOKINA MARKETING CORP., respondents.,
G. R. No. 151992. September 18, 2002.

Facts: In 1996, the Philippine Congress passed Republic Act No. 8189, otherwise known as the "Voter's
Registration Act of 1996," providing for the modernization and computerization of the voters' registration list
and the appropriate of funds therefor "in order to establish a clean, complete, permanent and updated list of
voters."

Pursuant thereto, the Commission on Elections (COMELEC) promulgated Resolution No. 00-0315
approving in principle the Voter's Registration and Identification System Project (VRIS) Project for brevity).
The VRIS Project envisions a computerized database system for the May 2004 Elections. The idea is to have a
national registration of voters whereby each registrant's fingerprints will be digitally entered into the system and
upon completion of registration, compared and matched with other entries to eliminate double entries. A
tamper-proof and counterfeit-resistant voter's identification card will then be issues to each registrant as a visual
record of the registration.

On September 9, 1999, the COMELEC issued invitations to pre-qualify and bid for the supply and
installations of information technology equipment and ancillary services for its VRIS Project. Private
respondent Photokina Marketing Corporation (PHOTOKINA) pre-qualified and was allowed to participate as
one of the bidders. After the public bidding was conducted, PHOTOKINA's bid in the amount of P6.588 Billion
Pesos garnered the highest total weighted score and was declared the winning bidder.

Thus, the COMELEC issued Resolution No. 3252, which approves the Notice of Award to
PHOTOKINA. The parties then proceeded to formalize the contract, with Commissioner Mehol K. Sadain and
Atty. Rodrigo D. Sta. Ana, acting as negotiators for the COMELEC and PHOTOKINA, respectively.However,
under Republic Act No. 8760[8] the budget appropriated by Congress for the COMELECs modernization
project was only One (1) Billion Pesos and that the actual available funds under the Certificate of Availability
of Funds (CAF) issued by the Chief Accountant of the COMELEC was only P1.2 Billion Pesos.
 Subsequently, the COMELEC Chairman Harriet O. Demetriou issued a memorandum to the COMELEC
en banc expressing her objections to the contract. PHOTOKINA, meanwhile, as the winning bidder, wrote
several letters to the COMELEC requesting the formal execution of the contract, but to no avail. Then
Chairman Benipayo announced that the VRIS Project has been scrapped, dropped, junked, or set aside. He
further announced his plan to re-engineer the entire modernization program of the COMELEC, emphasizing his
intention to replace the VRIS Project with his own version, the Triple E Vision.

On October 2, 2001, Senator Edgardo J. Angara directed the creation of a technical working group to
assist the COMELEC in evaluating all programs for the modernization of the COMELEC, which will also
consider the PHOTOKINA contract as an alternative program, and various competing programs for the
purpose.PHOTOKINA then filed with the Regional Trial Court, Branch 215, Quezon City a petition for
mandamus, prohibition and damages (with prayer for temporary restraining order, preliminary prohibitory
injunction and preliminary mandatory injunction) against the COMELEC and all its Commissioners.
PHOTOKINA alleged three causes of action: first, the deliberate refusal of the COMELEC and its
Commissioners to formalize the contract rendered nugatory the perfected contract between them; second, in
announcing that the VRIS Project has been junked and that he has plans to re-engineer the COMELECs entire
modernization program, Chairman Benipayo committed grave abuse of discretion; and third, the COMELECs
failure to perform its duty under the contract has caused PHOTOKINA to incur damages since it has spent
substantial time and resources in the preparation of the bid and the draft contract.

Respondent Judge Ma. Luisa Quijano-Padilla issued the first assailed Resolution granting
PHOTOKINAs application for a writ of preliminary prohibitory injunction which: (1) grant the application for
the issuance of a writ of preliminary prohibitory injunction; and (2) deny the application for the issuance of a
writ of preliminary mandatory injunction. Hence, let a writ of preliminary prohibitory injunction issue which
enjoins respondents, their agents, successors and assigns from replacing the VRIS Project upon petitioners
posting of a bond in the amount of P20,000,000.00, which bond shall answer for whatever damages which may
be sustained by reason of the issuance of the said writ, if it turns out that the plaintiffs are not entitled thereto.

Both parties filed their respective motions for reconsideration.

On February 8, 2002, respondent judge issued the second assailed Resolution denying the COMELECs
Omnibus Motion and, this time, granting PHOTOKINAs application for a writ of preliminary mandatory
injunction which : (1) deny Respondents Omnibus Motion for the dismissal of this case and for the
reconsideration of this Courts Resolution granting the writ of preliminary prohibitory injunction; (2) grant
Petitioners Motion dated January 2, 2002 insofar as it prays for the issuance of a writ of preliminary mandatory
injunction; (3) Grant the prayer for the reduction of the preliminary prohibitory injunction bond from
P20,000,000.00 to P10,000,000.00; (4) Clarify its Resolution dated December 19, 2001 to the extent that the
writ of preliminary prohibitory injunction will also enjoin Respondents, their agents, successors and assigns
from disregarding the contract for the VRIS Project between Petitioner and Respondent COMELEC; (5) deny
Petitioners motion to declare Respondents in default.

Hence, the instant petition for certiorari filed by the Office of the Solicitor General (OSG) in behalf of
then COMELEC Chairman Alfredo L. Benipayo and Commissioners Resurreccion Z. Borra and Florentino A.
Tuason, Jr..

Petitioners contend that: (1) a petition for mandamus and prohibition does not lie to enforce contractual
obligations, hence, PHOTOKINAs proper recourse before the Regional Trial Court should have been an action
for specific performance; (2) respondent judge, by issuing the injunctive writs, already assumed that the VRIS
Project was lawfully awarded by the COMELEC to PHOTOKINA, and that there is a valid perfected contract
between them, thus, manifesting her prejudgment; and (3) injunctive writs should not be issued when an action
for damages can adequately compensate for the injuries. Petitioners pray that the two assailed Resolutions be
nullified and Special Civil Action No. Q-01-45405 be dismissed outright.
 PHOTOKINA filed a Comment with Motion to Dismiss, the present petition, on two procedural
grounds. First, the petition violates the doctrine of hierarchy of courts. And second, the OSG has no authority
and/or standing to file the petition considering that the petitioners have not been authorized by the COMELEC
en banc to take such action. Without the concurrence of at least a majority of the members of the COMELEC,
neither petitioners nor the OSG could file the petition in behalf of the COMELEC.

In refutation of petitioners arguments, PHOTOKINA contends that mandamus is an appropriate remedy

since what is involved in Special Civil Action No. Q-01-45405 is the performance of a ministerial duty.
PHOTOKINA maintains that mandamus may be availed of by private parties to compel public officers to act on
a contract entered into pursuant to law.
The petition is impressed with merit.

Issues: (1) Whether or not the OSG has no standing to file the present petition since its legal position is
contrary to that espoused by the majority of the COMELEC Commissioners.

(2) Whether or not there is a breach of violation of hierarchy of Courts.

(3) Whether or not a petition for mandamus is the appropriate remedy to enforce contractual obligations.

Ruling: (1) No, the OSG has standing to file the present petition.

In Orbos vs. Civil Service Commission, the Court ruled:

"x x x It is incumbent upon him (Solicitor General) to present to the court what he considers would legally uphold the
best interest of the government although it may run counter to a clients position. x x x.
"In the present case, it appears that after the Solicitor General studied the issues he found merit in the cause of the
petitioner based on the applicable law and jurisprudence. Thus, it is his duty to represent the petitioner as he did by
filing this petition. He cannot be disqualified from appearing for the petitioner even if in so doing his representation
runs against the interests of the CSC.

"This is not the first time that the Office of the Solicitor General has taken a position adverse to his clients like the CSC,
the National Labor Relations Commission, among others, and even the People of the Philippines.

Hence, while petitioners stand is contrary to that of the majority of the Commissioners, still, the OSG may
represent the COMELEC as long as in its assessment, such would be for the best interest of the government.
For, indeed, in the final analysis, the client of the OSG is not the agency but no less than the Republic of the
Philippines in whom the plenum of sovereignty resides. Moreover, it must be emphasized that petitioners are
also public officials entitled to be represented by the OSG. Under Executive Order No. 292 and Presidential
Decree No. 478, the OSG is the lawyer of the government, its agencies and instrumentalities, and its officials or
agents. This mandate includes the three petitioners who have been impleaded as public respondents in Special
Civil Action No. Q-01-45405.

2. There is no violation of the hierarch of Courts. Suffice it to say that it is not an iron-clad dictum. On
several instances where this Court was confronted with cases of national interest and of serious
implications, it never hesitated to set aside the rule and proceed with the judicial determination of the
case. The case at bar is of similar import. It is in the interest of the State that questions relating to
government contracts be settled without delay. This is more so when the contract, as in this case, involves
the disbursement of public funds and the modernization of our countrys election process, a project that
has long been overdue.
 3. No, mandamus is not the proper recourse to enforce the COMELEC's alleged contractual obligations
with PHOTOKINA.No rule of law is better settled than that mandamus does not lie to enforce the performance
of contractual obligations. As early as 1924, Justice Street, in Quiogue vs. Romualdez, already set forth the
justification of this rule, thus: Upon the facts above stated we are of the opinion that the writ of mandamus is
not the appropriate, or even an admissible remedy. It is manifest that whatever rights the petitioner may have,
upon the facts stated, are derived from her contract with the city; and no rule of law is better settled than that
mandamus never lies to enforce the performance of private contracts. x x x The petitioners remedy, if any she
has, is by an original action in the Court of First Instance to compel the city to pay the agreed price or to pay
damages for the breach of contract.

"x x x. As said in Lowe vs. Phelps (14 Bush, 642):

It must, therefore, appear upon every application for a mandamus that it is the legal duty of the respondent to do
that which it is sought to compel him to do, and that he has upon proper application refused to perform that
duty.' (Citing numerous authorities).

"It was not intended to aid a plaintiff in the enforcement of a mere contract right, or to take the place of the
other remedies provided by law for the adjudication of disputed claims. Looking at the case from the standpoint
of appellant, it involves nothing more than an ordinary breach of contract. If, as contended, the appellant had a
valid contract with the school board, it also had an adequate remedy at law to recover damages for its breach;
and to permit the writ of mandamus to be used for the purpose of enforcing a mere contract right would be a
wide departure from the settled practice in respect to the character of cases in which relief by mandamus may be
obtained.
"In Parrott vs. City of Bridgeport (44 Conn., 180), the writ was refused where the petitioner sought to compel a
city to construct a public street in a certain manner agreeably to the terms of a special agreement between the
petitioner and the city. In the course of the opinion the court said:

"* * * The duty, therefore, if any, which rests upon the city in this regard, is one which it owes to the petitioner
as an individual, not to the public, and the special contract is the foundation upon which it rests. But the writ of
mandamus has never been considered as an appropriate remedy for the enforcement of contract rights of a
private and personal nature and obligations which rest wholly upon contract and which involve no questions of
public trusts or official duty. Indeed, strictly speaking, it never lies where the party aggrieved has adequate
remedy at law, and its aid is only to be invoked to prevent an absolute failure of justice in cases where ordinary
legal processes furnish no relief. (Emphasis supplied)

Akin to the Court's rulings cited above, the Court hold that mandamus is not the proper recourse to
enforce the COMELEC's alleged contractual obligations with PHOTOKINA. It has other adequate remedy in
law. Moreover, the judicial caution that mandamus applies as a remedy only where petitioner's right is founded
clearly in law and not when it is doubtful. Legal rights may be enforced by mandamus only if those rights are
well-defined, clear and certain. Here, the alleged contract, relied upon by PHOTOKINA as source of its rights
which it seeks to be protected, is being disputed, not only on the ground that it was not perfected but also
because it is illegal and against public policy.

Of course, there are cases in which the writ of mandamus has been used to compel public officers to
perform certain acts, but it will be generally observed that in such cases, the contracts have been completely
performed by the petitioner, and nothing remained to be done except for the government to make compensation.
These exceptional cases are cited in Isada vs. Bocar where the act of the respondent public officer has the effect
of setting aside contracts already in the process of consummation. In contrast with Isada, the alleged contract
here has not yet been fully performed by PHOTOKINA; and though it avers readiness to perform, petitioners
raised serious questions as to its validity. Their posture is tenable.
 United Claimants Association of NEA v. National Electrification Administration.
G.R. NO. 187107. January 31, 2012.

Facts: Respondent NEA is a government-owned and/or controlled corporation created in accordance

with Presidential Decree No. 269. Under PD 269, the NEA Board is empowered to organize or reorganize
NEA’s staffing structure.

In order to enhance and accelerate the electrification of the whole country, including the privatization of
the National Power Corporation, RA 9136, otherwise known as the Electric Power Industry Reform Act of 2001
(EPIRA Law), was enacted. The said law provides for the framework for the restructuring of the electric power
industry, and that the DOE shall, in consultation with the electric power industry participants and end-users,
promulgate the Implementing Rules and Regulations (IRR). Subsequently, the Rules and Regulations to
implement RA 9136 were issued wherein it was provided that all the NEA employees and officers are
considered terminated and the 965 plantilla positions of NEA vacant. Meanwhile, former President Gloria
Macapagal- Arroyo issued EO 119 directing the NEA Board to submit a reorganization plan. Thereafter, the
NEA implemented an early retirement program denominated as the "Early Leavers Program," giving incentives
to those who availed of it and left NEA before the effectivity of the reorganization plan. The other employees
were subsequently terminated. Petitioners are former employees of NEA who were terminated from their
employment with the implementation of the assailed resolutions.

Petitioners initiated an original action for Injunction with the Supreme Court to restrain and/or prevent
the implementation of NEA Termination Pay Plan, issued by respondent NEA Board. Petitioners contend that
The NEA Board has no power to terminate all the NEA employees, Executive Order No. 119 did not grant the
NEA Board the power to terminate all NEA employees, and the assailed resolution were carried out in bad faith.
Respondents, on the other hand, argued that the Court has no jurisdiction over the petition, that Injunction is
improper since that assailed resolutions have long been implemented, and the assailed resolution was carried out
in good faith.

Issues: (1) Whether or not the Court has jurisdiction notwithstanding the fact that the action for
injunction was filed directly with the SC without regard to the doctrine of hierarchy of courts.

(2) Whether or not Injunction is still available in the case at bar.

 Ruling: (1) Yes. While it is true that by virtue of the doctrine of hierarchy of courts, the instant petition
should have been filed with the RTC. However, as an exception to this general rule, the principle of hierarchy
of courts may be set aside for special and important reasons. Such reason exists in the instant case involving
as it does the employment of the entire plantilla of NEA, more than 700 employees all told, who were
effectively dismissed from employment in one swift stroke. This to the mind of the Court entails its attention.

(2) Yes. As a rule, the writ of prohibition will not lie to enjoin acts already done. However, as an
exception to the rule on mootness, courts will decide a question otherwise moot if it is capable of
repetition yet evading review. Similarly, in the instant case, while the assailed resolutions of the NEA Board
may have long been implemented, such acts of the NEA Board may well be repeated by other government
agencies in the reorganization of their offices. Petitioners have not lost their remedy of injunction.

PHILIPPINE SINTER CORPORATION and PHIVIDEC INDUSTRIAL AUTHORITY, petitioners, vs.

CAGAYAN ELECTRIC POWER AND LIGHT CO., INC., respondent.
G.R. No. 127371. April 25, 2002.

Facts: On January 21, 1987, President Corazon C. Aquino and her Cabinet approved a Cabinet Reform
Policy for the power sector and issued a Cabinet Memorandum, Item No. 2 of which provides:

“Continue direct connection for industries authorized under the BOI-NPC Memorandum of Understanding of 12
January 1981, until such time as the appropriate regulatory board determines that direct connection of industry to NPC
is no longer necessary in the franchise area of the specific utility or cooperative. Determination shall be based in the
utility or cooperatives meeting the standards of financial and technical capability with satisfactory guarantees of non-
prejudice to industry to be set in consultation with NPC and relevant government agencies and reviewed periodically by
the regulatory board.”

Pursuant to such Cabinet Memorandum, respondent Cagayan Electric Power and Light, Co.
(CEPALCO), grantee of a legislative franchise to distribute electric power to the municipalities of Villanueva,
Jasaan and Tagoloan, and the city of Cagayan de Oro, all of the province of Misamis Oriental, filed with the
Energy Regulatory Board (ERB) a petition entitled “In Re: Petition for Implementation of Cabinet Policy
Reforms in the Power Sector.” The petition sought the “discontinuation of all existing direct supply of power by
the National Power Corporation (NPC, now NAPOCOR) within CEPALCO’s franchise area.”

The ERB issued a notice of public hearing which was published in the Newspapers and posted in the
affected areas. It likewise furnished NAPOCOR and the Board of Investments (BOI) copies of the petition and
directed them to submit their comments.

The ERB granted the petition of CEPALCO. Subsequently, the motion for reconsideration of
NAPOCOR was denied.

NAPOCOR then went to the Court of Appeals (CA), and filed a petition for review. The CA dismissed
the petition on the ground that the motion for reconsideration filed with the ERB was file out of time, and thus,
rendering the decision of the ERB final and executory and can no longer be the subject of a petition for review.

Thereafter, NAPOCOR went to the Supreme Court (SC) and filed a petition for review on certiorari. The
SC affirmed the CA’s decision.
 To implement the decision of the ERB, CEPALCO wrote Philippine Sinter Corporation (PSC),
petitioner, and advised the latter of its desire “to have the power supply of PSC, directly taken from NPC
(NAPOCOR), disconnected, cut and transferred” to CEPALCO. PSC is an entity operating its business within
the PHIVIDEC Industrial Estate. The Estate is managed and operated by the PHIVIDEC Industrial Authority
(PIA).

PSC refused the request of CEPALCO, since according to the former there is a contract for power
supply between it and NAPOCOR which contract is effective until July 26, 1996.

To restrain the execution of the ERB’s decision, PSC and PIA filed an action for injunction with the
Regional Trial Court (RTC), Branch 17 of Bacolod City. The RTC rendered judgment in favor PSC and PIA.
The motion for reconsideration filed by CEPALCO was denied.

CEPALCO brought the matter to the CA by way of appeal. The CA ruled in favor of CEPALCO, and
the motion for reconsideration filed by PSC and PIA was denied.

Hence, the present petition to the SC.

Issue: Whether or not a preliminary injunction will prosper against the final and executory decision of
the ERB.

Ruling: No. The rule is that after a judgment has attained finality, it becomes the ministerial duty
of the court to order its execution. No court can interfere by injunction or otherwise restrain such execution.
However, this rule admits of exceptions:

1. When facts and circumstances later transpire that would render execution inequitable or unjust, the interested
party may ask a competent court to stay the judgment’s execution or prevent its enforcement.

2. A change in the situation of the parties can warrant an injunctive relief.

Unfortunately for PSC and PIA, none of the exceptions are present in the instant case, based on the facts of
the case.To disturb the final and executory judgment of the ERB through injunction is an utter disregard of the
rule on finality of judgments.

The Court further said that under Sec.10 Executive Oder No. 172 (the law creating the ERB) review of the
decisions of the ERB is lodged with the SC. Where the law provides for an appeal to the SC or CA from
Administrative Agencies, this means that the latter are co-equal with the RTCs in terms of rank and stature, and
thus, beyond the RTCs control. Hence, this being the case, the RTC cannot interfere with the decision of the
ERB.This doctrine of non-interference of trial courts with co-equal administrative bodies is intended to ensure
judicial stability in the administration of justice whereby the judgment of a court of competent jurisdiction may
not be opened, modified or vacated by any court of concurrent jurisdiction.
 Omictin vs. CA and Lagos

Facts: Petitioner Vincent E. Omictin, Operations Manager Ad Interim of Saag Phils., Inc., filed a
complaint for two counts of estafa with the Office of the City Prosecutor of Makati against private respondent
George I. Lagos. He alleged that private respondent, despite repeated demands, refused to return the two
company vehicles entrusted to him when he was still the president of Saag Phils., Inc. On February 26, 1999,
public prosecutor recommended the indictment of private respondent, and on the same day, respondent was
charged with the crime of estafa under Article 315, par. 1(b) of the Revised Penal Code before the Regional
Trial Court (RTC).

On June 24, 1999, private respondent filed a motion to suspend proceedings on the basis of a prejudicial
question because of a pending petition with the Securities and Exchange Commission (SEC) involving the same
parties. It appears that on January 7, 1999, private respondent filed SEC Case No. 01-99-6185 for the
declaration of nullity of the respective appointments of Alex Y. Tan and petitioner as President Ad Interim and
Operations Manager Ad Interim of Saag Phils., Inc., declaration of dividends, recovery of share in the profits,
involuntary dissolution and the appointment of a receiver, recovery of damages and an application for a
temporary restraining order (TRO) and injunction against Saag (S) Pte. Ltd., Nicholas Ng, Janifer Yeo, Tan and
petitioner.

In the action before the SEC, private respondent averred that Saag (S) Pte. Ltd. is a foreign corporation
organized and existing under the laws of Singapore. On September 9, 1994, Saag Philippines, Inc. was
incorporated with Saag (S) Pte. Ltd. as the majority stockholder. Private respondent was elected as President.

Later, due to intra-corporate disputes, president of Saag Singapore resigned and divested their shares in
Saag Corporation (Bhd), thereby resulting in a change in the controlling interest in Saag (S) Pte. Ltd. Barely
three months after, or on June 23, 1998, private respondent resigned his post as president of Saag Phils., Inc.
while still retaining his position as a director of the company. According to private respondent, the joint venture
agreement (JVA) between him or Saag Phils., Inc. and Saag (S) Pte. Ltd. provided that should the controlling
interest in the latter company, or its parent company Saag Corp. (Bhd), be acquired by any other person or
entity without his prior consent, he has the option either to require the other stockholders to purchase his shares
or to terminate the JVA and dissolve Saag Phils., Inc. altogether. Petitioner made several requests to the
director, and executive director of Saag (S) Pte. Ltd., to call for a board meeting in order to discuss the
following: a) implementation of the board resolution declaring dividends; b) acquisition of private respondents
shares by Saag (S) Pte. Ltd.; c) dissolution of Saag Phils., Inc.; and d) the termination of the JVA.

Both failed to appear, however, they issued a letter appointing Alex Y. Tan as President Ad Interim of
Saag Phils., Inc. Tan, in turn, appointed petitioner Omictin as the company’s Operations Manager Ad Interim.
Citing as a reason the absence of a board resolution authorizing the continued operations of Saag Phils., Inc.,
private respondent retained his possession of the office equipment of the company in a fiduciary capacity as
director of the corporation pending its dissolution and/or the resolution of the intra-corporate dispute. He
likewise changed the locks of the offices of the company allegedly to prevent Tan and petitioner from seizing
company property.

Private respondent stressed that Tan’s appointment was invalid because it was in derogation of the
company by-laws. As Tan’s appointment did not have the acquiescence of the board of directors, petitioners
appointment by the former is likewise allegedly invalid. Thus, neither has the power or the authority to
represent or act for Saag Phils., Inc. in any transaction or action before the SEC or any court of justice.

In a case for estafa, a valid demand made by an offended party is one of the essential elements. It
appears from the records that the delay of delivery of the motor vehicles by Lagos to Saag Corporation is by
reason of his contention that the demand made by Omictin and Atty. Tan to him to return the subject vehicles is
not a valid demand. As earlier mentioned, petitioner filed a case with the SEC questioning therein private
respondents appointment.

If the SEC should rule that the dissolution of Saag Phils.is proper, or that the appointments of private
respondents are invalid, the criminal case will eventually be dismissed due to the absence of one of the essential
elements of the crime of estafa.Based on the foregoing, it is clear that a prejudicial question exists which calls
for the suspension of the criminal proceedings before the lower court.Incidentally, on January 18, 2001, the
SEC case was transferred to the Regional Trial Court (RTC) of Mandaluyong City, Branch 214, pursuant to
A.M. No. 00-11-03-SC implementing the Securities and Regulation Code (Republic Act No. 8799) enacted on
July 19, 2000, vesting in the RTC’s jurisdiction over intra-corporate disputes.

Issue: Whether or not a prejudicial question exists to warrant the suspension of the criminal proceedings
pending the resolution of the intra-corporate controversy that was originally filed with the SEC.

Ruling: Yes. Here, the case which was lodged originally before the SEC and which is now pending
before the RTC of Mandaluyong City by virtue of Republic Act No. 8799 involves facts that are intimately
related to those upon which the criminal prosecution is based. Ultimately, the resolution of the issues raised in
the intra-corporate dispute will determine the guilt or innocence of private respondent in the crime of estafa
filed against him by petitioner before the RTC of Makati.

Since the alleged offended party is Saag Phils., Inc., the validity of the demand for the delivery of the
subject vehicles rests upon the authority of the person making such a demand on the company’s behalf. Private
respondent is challenging Omictin’s authority to act for Saag Phils., Inc. in the corporate case pending before
the RTC of Mandaluyong. Taken in this light, if the supposed authority of petitioner is found to be defective, it
is as if no demand was ever made, hence, the prosecution for estafa cannot prosper.

By analogy, the doctrine of primary jurisdiction may be applied in this case. The issues raised by
petitioner particularly the status of Saag Phils., Inc. vis--vis Saag (S) Pte. Ltd., as well as the question regarding
the supposed authority of the latter to make a demand on behalf of the company, are proper subjects for the
determination of the tribunal hearing the intra-corporate case which in this case is the RTC of Mandaluyong.
These issues would have been referred to the expertise of the SEC in accordance with the doctrine of primary
jurisdiction had the case not been transferred to the RTC of Mandaluyong.
 The court cannot or will not determine a controversy involving a question which is within the
jurisdiction of the administrative tribunal, where the question demands the exercise of sound
administrative discretion requiring special knowledge, experience and services in determining technical
and intricate matters of fact.

However, the Court believes that the circumstances in the instant case do not proscribe the application of
the doctrine, as the role of SEC in determining technical and intricate matters of special competence has been
taken on by RTCs by virtue of Republic Act No. 8799. Hence, the RTC of Mandaluyong where the intra-
corporate case is pending has the primary jurisdiction to determine the issues under contention relating to the
status of the domestic corporation, Saag Phils., Inc., and Saag Pte. Ltd.; and the authority of petitioner to act on
behalf of the domestic corporation, the determination of which will have a direct bearing on the criminal case.
The law recognizes that, in place of the SEC, the regular courts now have the legal competence to decide intra-
corporate disputes.

REPUBLIC OF THE PHILIPPINES, ET. AL. , Petitioner vs. CARLITO LACAP, Respondent
G.R. NO. 158253. March 2, 2007.

Facts: Respondent, doing business under the name of Carwin Construction, sought to collect payment
for the completed project by virtue of the Contract Agreement with Department of Public Works and Highways
(DPWH). The Commission on Audit (COA) disapproved the final release of funds because respondent’s license
had expired at the time of the execution of the contract. DPWH Legal Department opined that RA No. 4566
known as Contractor’s License Law, does not provide that a contract entered into after the license has expired is
void thus recommended the payment to respondent.

Respondent filed the complaint for Specific Performance and Damages before the Regional Trial Court
(RTC). Petitioner, thru the Office of the Solicitor General (OSG) filed a Motion to Dismiss on the ground that
complaint states no cause of action and RTC had no jurisdiction since respondent did not appeal the COA
decision. Respondent filed an Opposition to the Motion to Dismiss. RTC denied the Motion to Dismiss thus the
OSG filed a Motion for Reconsideration but it was likewise denied. OSG filed its Answer invoking defenses of
non-exhaustion of administrative remedies and doctrine of non-suability of the State. RTC rendered a decision
in favor of Respondent.

Dissatisfied, Republic filed an appeal with the Court of Appeals (CA). CA sustained the RTC since the
case involved the application of the principle of estoppel against the Republic which is purely a legal question
hence this petition.

Issues: Republic’s contention is that the CA erred in not finding that Respondent has no cause of action
considering that:
a. Respondent failed to exhaust administrative remedies;
b. It is the COA which has primary jurisdiction to resolve respondent’s money claim.

Rulinf: A. No, the CA did not err in holding that respondent did not fail to exhaust administrative
remedies. The general rule is that before a party may seek the intervention of the court, he should first
avail of all means afforded him by administrative processes. The doctrine of exhaustion of administrative
remedies has exceptions such as “where there is unreasonable delay or official inaction that will
irretrievably prejudice the complainant” and “where the question involved is purely legal and will
ultimately have to be decided by the courts of justice.” Whether a contractor with an expired license at the
time of the execution of its contract is entitled to be paid for completed projects is a pure question of law. RA
No. 4566 merely provide for a fine for any contractor who, for a price, contracts without first securing a license.
It does not declare as void contracts such contracts. Thus respondent should be paid for the projects he
completed but such payment, however, is without prejudice to the payment of fine prescribed under the law.

B. No, the CA did not err in holding that COA has no primary jurisdiction because there involved a
purely legal question thus final determination on the matter rests not with them but with the courts of
justice.

Gabriel Abad, et. al., vs. Regional Trial Court of Manila

G.R. No. L-65505. October 12, 1987.

Facts: The instant petition for Certiorari originated from a complaint by the petitioner filed on August
18, 1978 against respondent Philippines American General Insurance Company, Inc. for the enforcement of
contract and recovery of loss of money basically praying for, among other things, payment of the money value
of the respective accumulated sick leave with pay of the separated employees of respondent company either thru
retirement, retrenchment or resignation. Instead of filing an answer thereto, PHILAMGEN moved to dismiss the
complaint, which the trial court granted in its order dated February 16,1979. After a denial of their motion to
reconsider the aforesaid order by the trial court on May 2, 1979, petitioners filed before this Court a petition for
Certiorari, docketed as G.R. No. 50563; setting aside the orders dated February 16,1979 and May 2, 1979 and
reinstating the dismissed complaint.

The case was remanded to the trial court, unfortunately a fire destroyed the sala wherein the entire
records of Civil Case No.117708 were kept, however, it was reconstituted and renumbered as Civil Case No.
82-1324. Thereafter, Philamgen filed its Answer to the complaint. Judicial reorganization took place by the
passage of Executive Order No. 864 and the case was re-raffled to respondent Regional Trial Court of Manila.

Respondent court motu proprio dismissed the complaint in Civil Case No. 82-1324 declaring that it
lacked jurisdiction over the subject matter, being money claims arising from employer-employee relations.
Motion for reconsideration filed by petitioner was denied by respondent judge. Hence, this petition for
certiorari.

Issue: Whether respondent court erred in reversing motu proprio this Honorable Supreme Court`s
decision in G.R. No. L-50563 by dismissing once again the petitioner`s action on the erroneous ground of lack
of jurisdiction.

Ruling: Section 1 of Executive Order No. 864 provides that the Courts of First Instance shall be deemed
automatically abolished upon the constitution and organization of the courts provided in Batas Pambansa Blg.
129 as of 12:00 o'clock midnight of January 17, 1983, which re-echoes a sentence in Section 44 of said Act.
With the abolition of the Court of First Instance — which was held in G.R. No. 50563 as having jurisdiction
over the case, the jurisdiction of said court was abolished with it.
 Of course, insofar as the reorganized courts vested with general jurisdiction, Batas Pambansa Blg. 129
was and still the controlling law. When it comes to labor-related actions, however, such as the one at bar, initial
jurisdiction is vested on administrative machineries provided for the expeditious settlement of labor or industrial
disputes.

Art. 217 provides that the labor arbiter shall have original and exclusive jurisdiction to hear and decide
cases involving all workers, whether agricultural or non-agricultural, in disputes regarding all money claims of
workers, including those based on non-payment or underpayment of wages, overtime compensation, separation
pay and other benefits provided by law or appropriate agreement. Except claims for employee`s compensation,
social security, medicare and maternity benefits. This provision was in force when the judicial reorganization
took place. However, it must be noted that this article of the Labor Code was originally Article 216 of PD 442,
but subsequently renumbered to Art. 217, amended by PD 1367 which took effect 1 May 1978, further amended
by PD 1691 which took effect 1 May 1980, then further amended by BP Blg. 130 which took effect on 21
August 1981 and finally amended by BP Blg. 227which took effect on 1 June 1982.

The Court said that it is not unmindful of the fact that G.R. No. 50563 was decided by the highest Court
on the basis of the provisions of Article 217 of the Labor Code,as amended by BP 1367, which took effect on 1
May 1978, but as heretofore indicated, subsequent amendments of the same provision took place. In said
decision in G.R. No. 50563, mention was made of the amendment brought about by PD 1367 having been given
retroactive application. Following this rule of retrospective application, we can not see any reason why the
subsequent amendment to Article 217 of the Labor Code, brought about by PD 1691, BP Blg. 130 and BP Blg.
227 may not also be applied to this action which was filed on 28 August 1978.

The Court is not also unaware of that portion of Section 44 of BP Blg. 129 providing that cases pending
in the abolished courts shall be transferred to the appropriate courts created in the Act, but it is evident that the
phrase 'appropriate courts' must have reference to those courts whose jurisdiction are clearly defined in other
parts of the law, otherwise a mere transitory provision will serve to negate the primary and avowed purpose of
the judiciary reorganization act. But be that as it may, this provision has hardly any application here because
this case is being referred to an administrative machinery which has better facilities of adjudicating the claim
more expeditiously as they are not hamstrung by the strict rules of procedure and evidence.
 OPTIMA REALTY CORPORATION vs. HERTZ PHIL. EXCLUSIVE CARS, INC.
GR NO. 183035. JANUARY 9, 2013.

Facts: Petitioner Optima is engaged in the business of leasing and renting out commercial spaces and
buildings to its tenants. On December 12, 2002, Optima and Respondent Hertz entered into a Contract of Lease
over an office unit and parking slot in the Optima Bulding for a period of 3 years. However, the lease agreement
was amended by shortening the lease period ot 2 years and 5 months. The lease period was from October 1,
2003 to February 28, 2006.

Hertz requested Optima a 50% discount on its rent for the months of Maty to August 2005 since Hertz
suffered 50% drop in its monthly sales and significant decrease in its personnel’s productivity due to the
commencement of renovations in the building.

However, Hertz failed to pay its rentals from August to December 2005 and January to February 2006
notwithstanding the fact that Optima granted the former’s request. It also failed to pay its utility bills.

Optima sent a letter to Hertz, reminding the latter if it will renew its contract by a new negotiation
between them and upon written notice by the lessee to the lessor at least 90 days before the termination of the
lease period. Since Hertz failed to send written notice renewing its contract and it’s desire to negotiate, Optima
did not renew the lease.

Hertz filed a Complaint for Specific Performance, Injunction, Damages and Sum of money and prayed
for the issuance of a TRO and writ of preliminary Injunction against Optima. It sought the issuance of a TRO to
enjoin Optima from committing acts which would tend to disrupt it’s peaceful use and possession of the leased
premises and wit of preliminary injunction to order Optima to reconnect its utilities.

Thereafter, Optima demanded Hertz to surrender and vacate the leased premises and pay P420,967.28
covering rental arrearages, unpaid utility bills and other charges. Due to Hertz’s refusal to vacate the leased
premises, Optima filed an action before the MeTC for Unlawful Detainer and Damages with Prayer for the
Issuance of a TRO and/or Preliminary Mandatory Injunction against Hertz.

MeTC rendered judgment in favor of Optima and ordered Hertz to vacate the leased premises and to
oder the amount of P420,967.28 representing its rentals arrearages and utility charger as well as the payment
for the monthly use and occupancy of the premises from March 2006 until possession is restored to the plaintiff
in the amount of P54,200 per month.

RTC affirmed the decision of the MeTC. However, on appeal, the Court of Appeals reversed and set
aside the decision of the RTC. CA ruled that, due to the improper service of summons, the MeTC failed to
acquire jurisdiction over the person of respondent Hertz.

Optima then filed Petition for review on Certiorari under Rule 45 with the SC

Issues: (1) Whether the MeTC properly acquired jurisdiction over the person of respondent Hertz;

(2) Whether the unlawful detainer case is barred by litis pendentia.

Ruling: (1) Yes. MeTC acquired jurisdiction over the person of respondent Hertz.Jurisdiction over the
person of the defendant may be acquired either by service of summons or by the defendant’s voluntary
appearance in court and submission to its authority. In this case, the MeTC acquired jurisdiction over the person
of respondent Hertz by reason of the latter’s voluntary appearance in court.In spite of the defective service of
summons, the defendant opted to file an Answer with Counterclaim with Leave of Court. Furthermore, it never
raised the defense of improper service of summons in its answer with counterclaim.

(2) No. the Unlawful detainer case is not barred by litis pendentia.The Court ruled that while there is
identity of parties in both cases, the rights asserted and the reliefs prayed for under the Complaint for Specific
Performance and those under the present Unlawful Detainer Complaint are different.The Complaint for Specific
Performance seeks to compel Optima to: (1) renegotiate the contract of lease; (2) reconnect the utilities at the
leased premises; and (3) pay damages. On the other hand, the unlawful detainer case sought the ejectment of
defendant-appellant Hertz from the leased premises and to collect arrears in rentals and utility bills. Rights
asserted and the reliefs sought in the two cases are different.
 ABUBAKAR A. AFDAL and FATIMA A. AFDAL vs. ROMEO CARLOS
G.R. No. 173379. December 1, 2010.

Facts: On 18 December 2003, respondent Romeo Carlos (respondent) filed a complaint for unlawful
detainer and damages against petitioners, Zenaida Guijabar (Guijabar), et.al before the MTC Laguna.
Respondent alleged that petitioners, Guijabar, and all other persons claiming rights under them were occupying,
by mere tolerance, a parcel of land in respondent’s name. Respondent claimed that petitioner Abubakar Afdal
(petitioner Abubakar) sold the property to him but that he allowed petitioners to stay in the property. On 25
August 2003, respondent demanded that petitioners, Guijabar, and all persons claiming rights under them turn
over the property to him because he needed the property for his personal use.Respondent further alleged that
petitioners refused to heed his demand and he was constrained to file a complaint before the Lupon ng
Tagapamayapa(Lupon). According to respondent, petitioners ignored the notices and the Lupon issued a
"certificate to file action." Then, respondent filed the complaint before the MTC.

Three attempts to serve the summons and complaint on petitioners but they failed to file an answer.
Respondent filed an ex-parte motion and compliance with position paper submitting the case for decision based
on the pleadings on record

MTC ruled in favor of respondent and further issued a writ of execution.

Petitioners filed a petition for relief from judgment with the MTC. Respondent filed a motion to dismiss
or strike out the petition for relief. Subsequently, petitioners manifested their intention to withdraw the petition
for relief after realizing that it was a prohibited pleading under the Revised Rule on Summary Procedure. The
MTC granted petitioners’ request to withdraw the petition for relief.

Petitioners filed the petition for relief before the RTC. They alleged that they are the lawful owners of
the property which they purchased and denied that they sold the property to respondent. They also pointed out
that they never received respondent’s demand letter nor were they informed of, much less participated in, the
proceedings before the Lupon. Moreover, petitioners said they were not served a copy of the summons and the
complaint.

RTC DISMISSED the petition for relief. The court averred that it had no jurisdiction over the petition
because the petition should have been filed before the MTC in accordance with Section 1 of Rule 38 of the
Rules of Court which provides that a petition for relief should be filed "in such court and in the same case
praying that the judgment, order or proceeding be set aside."

Petitioners filed a motion for reconsideration. RTC denied the motion. Hence, this petition.

Issues: (1) Whether or not RTC erred in dismissing their petition for relief from judgment.

(2) WON there was a valid service of summons.

Ruling: (1) RTC did not err in dismissing the petition for relief from judgment of the MTC. Petitioners
cannot file the petition for relief with the MTC because it is a prohibited pleading in an unlawful detainer case.
Petitioners cannot also file the petition for relief with the RTC because the RTC has no jurisdiction to entertain
petitions for relief from judgments of the MTC. The remedy of petitioners in such a situation is to file a petition
for certiorari with the RTC under Rule 65 of the Rules of Court on the ground of lack of jurisdiction of the
MTC over the person of petitioners in view of the absence of summons to petitioners.

(2) There was no valid service of summons. In long line of cases, the SC held that the impossibility of
personal service justifying availment of substituted service should be explained in the proof of service; why
efforts exerted towards personal service failed. The pertinent facts and circumstances attendant to the service of
summons must be stated in the proof of service otherwise, the substituted service cannot be upheld.According to
the records of the MTC, there were 3 attempts to serve the summons to the defendants. The first was unserved,
the second was served to one “Gary Akob” and the last, where the return was duly served but refused to
sign.The indorsements in this case failed to state that prompt and personal service on petitioners was rendered
impossible. It failed to show the reason why personal service could not be made. It was also not shown that
efforts were made to find petitioners personally and that said efforts failed. These requirements are
indispensable because substituted service is in derogation of the usual method of service. Failure to faithfully,
strictly, and fully comply with the statutory requirements of substituted service renders such service ineffective.
Likewise, nowhere in the return of summons or in the records of the case was it shown that Gary Acob, the
person on whom substituted service of summons was effected, was a person of suitable age and discretion
residing in petitioners’ residence.

The process server failed to specify Gary Acob’s age, his relationship to petitioners and to ascertain
whether he comprehends the significance of the receipt of the summons and his duty to deliver it to petitioners
or at least notify them of said receipt of summons.Jurisdiction over the defendant is acquired either upon a valid
service of summons or the defendant’s voluntary appearance in court. If the defendant does not voluntarily
appear in court, jurisdiction can be acquired by personal or substituted service of summons as laid out under
Sections 6 and 7 of Rule 14 of the Rules of Court, which state:Sec. 6. Service in person on defendant. -
Whenever practicable, the summons shall be served by handing a copy thereof to the defendant in person, or, if
he refuses to receive and sign for it, by tendering it to him.

Sec. 7. Substituted Service. - If, for justifiable causes, the defendant cannot be served within a
reasonable time as provided in the preceding section, service may be effected (a) by leaving copies of the
summons at the defendant’s residence with some person of suitable age and discretion then residing therein, or
(b) by leaving the copies at defendant’s office or regular place of business with some competent person in
charge thereof.

Any judgment of the court which has no jurisdiction over the person of the defendant is null and void.
 FE V. RAPSING et. al v. HON. JUDGE MAXIMINO R. ABLES
G.R. No. 171855. 15 October 2012.

Facts: Respondents, members of the Alpha Company, 22nd Infantry Battalion, 9th Division of the
Philippine Army based at Cabangcalan Detachment, Aroroy, Masbate, alleged to have received information
about the presence of armed elements reputed to be New People’s Army partisans in Sitio Gaway-gaway,
Barangay Lagta, Baleno, Masbate. Acting on the information, they coordinated with the PNP and proceeded to
the place.

Thereat, they encountered armed elements which resulted in an intense firefight. When the battle ceased,
seven persons, namely: Teogenes Rapsing, Teofilo Villanueva, Marianito Villanueva, Edwin Aparejado, Isidro
Espino, Roque Tome and Norberto Aranilla were found sprawled on the ground lifeless. The post-incident
report of the Philippine Army states that a legitimate military operation was conducted and in the course of
which, the victims, armed with high-powered firearms, engaged in a shootout with the military.

On the other hand, petitioners complained that there was no encounter that ensued and that the victims
were summarily executed in cold blood by respondents. After investigation, the NBI recommended to the
Provincial Prosecutor of Masbate City that a preliminary investigation be conducted against respondents for the
crime of multiple murder. NBI relied on the statements of witnesses who claim that the military massacred
helpless and unarmed civilians.

Subsequently, the Provincial prosecutor recommended, through a Resolution, the filing of an

Information for Multiple Murder. Consequently, respondents were charged with multiple murder.

A warrant for the arrest then was issued by the RTC of Masbate City, Branch 47, but before respondents
could be arrested, the Judge Advocate General's Office of the AFP filed an Omnibus Motion with the trial court
seeking the cases against respondents be transferred to the jurisdiction of the military tribunal.

Initially, the trial court denied the motion filed by the JAGO on the ground that respondents have not
been arrested. A Motion for Reconsideration was then filed by the JAGO and the trial court granted the
Omnibus Motion and the entire records of the case were turned over to the Commanding General of the 9th
Infantry Division, Philippine Army, for appropriate action.
 Petitioners sought reconsideration of the Order but was denied by the trial court. They alleged that the
trial court gravely abused its discretion amounting to excess of jurisdiction when it transferred the criminal case
filed against the respondents to the jurisdiction of the military tribunal, as jurisdiction over the same is conferred
upon the civil courts by Republic Act No. 7055.

On the other hand, the respondents and the Office of the Solicitor General alleged that the acts
complained of are service connected and falls within the jurisdiction of the military court.

Issue: Whether or not Hon. Judge Maximino Ables gravely abused his discretion amounting to excess of
jurisdiction in granting the Motion to Transfer the instant criminal case to the jurisdiction of the Military Court,
as said tribunal, based on facts and in law, has no jurisdiction over the murder case.

Ruling: Yes. The trial court gravely abused its discretion in not taking cognizance of the case, which
actually falls within its jurisdiction.

It is an elementary rule of procedural law that jurisdiction over the subject matter of the case is conferred
by law and is determined by the allegations of the complaint irrespective of whether the plaintiff is entitled to
recover upon all or some of the claims asserted therein. As a necessary consequence, the jurisdiction of the
court cannot be made to depend upon the defenses set up in the answer or upon the motion to dismiss, for
otherwise, the question of jurisdiction would almost entirely depend upon the defendant. What determines the
jurisdiction of the court is the nature of the action pleaded as appearing from the allegations in the complaint.
The averments in the complaint and the character of the relief sought are the matters to be consulted.

In the case at bar, the information states that respondents, “conspiring together and mutually helping
with one another, taking advantage of their superior strength, as elements of the Philippine Army, armed with
their government-issued firearms with intent to kill, by means of treachery and evident premeditation, did then
and there willfully, unlawfully and feloniously attack, assault and shoot the victims, hitting them on different
parts of their bodies, thereby inflicting upon them multiple gunshot wounds which caused their deaths.”

Murder is a crime punishable under Article 248 of the RPC as amended, and is within the jurisdiction of
the RTC. Hence, irrespective of whether the killing was actually justified or not, jurisdiction to try the crime
charged against the respondents has been vested upon the RTC by law.

In view of the provisions of R.A. 7055, the military tribunals cannot exercise jurisdiction over
respondents' case since the offense for which they were charged is not included in the enumeration of “service-
connected offenses or crimes” as provided for under Section 1 thereof. The said law is very clear that the
jurisdiction to try members of the AFP who commit crimes or offenses covered by the RPC, and which are not
service-connected, lies with the civil courts. Where the law is clear and unambiguous, it must be taken to mean
exactly what it says and the court has no choice but to see to it that its mandate is obeyed. There is no room for
interpretation, but only application. Hence, the RTC cannot divest itself of its jurisdiction over the alleged crime
of multiple murder.
 Mendoza v. Germino and Germino
GR No. 165676. Novermber 22, 2010.

Facts: Plaintiff was the owner of a 5-hectare land in Soledad, Sta. Rosa, Nueva Ecija. Herein respondent
unlawfully entered the said property by means of strategy and stealth, without the knowledge and consent of
petitioner, and said respondent refused to vacate the land despite demands.Thus, petitioner filed a complaint for
forcible entry with the MTC of Sta. Rosa, Nueva Ecija.Respondent filed an answer claiming that his brother
respondent Benigno was the plaintiff’s agricultural lessee and he merely helped the latter in the cultivation as a
member of the immediate farm household.After some postponements, plaintiffs moved to remand the case to
the Dept. of Agriculture Adjudication Board (DARAB), in view of the tenancy issue raised by respondent
Narciso.

The MTC ordered the remand of the case to the DARAB, Cabanatuan City, without a hearing and
despite objection by respondent Narciso.Plaintiff afterwards filed an amended complaint with the Provincial
Agrarian Reform Adjudicator (PARAD) impleading respondent Benigno (brother). They alleged that a different
person was the agricultural lessee of the land, contrary to respondent’s claim that it was his respondent
Benigno.Plaintiff further alleged that respondent Benigno unlawfully entered the subject property through
strategy and stealth and without their knowledge and consent, and thereafter transferred possession to
respondent Narciso. In both cases, respondents refused to vacate despite demands, and also appropriated the
fruits therein.The PARAD ruled in favor of plaintiff and that respondents are usurpers considering their failure
to prove respondent Benigno as the agricultural lessee, thus, they should vacate the land and pay for
damages.Respondents filed a notice of appeal to the DARAB arguing that the MTC’s referral to the DARAB
was void.The DARAB affirmed the PARAD holding that it acquired jurisdiction because of the amended
complaint that alleged an agrarian dispute.Thus, a petition for review under Rule 43 to the Court of Appeals
(CA).

The CA ruled that the MTC erred in referring the case to the DARAB since the material allegations and
the relief sought were for forcible entry, and that the DARAB did not acquire jurisdiction.CA denied the motion
for reconsideration.

Issue: Whether or not the DARAB had jurisdiction over the case.
 Ruling: No. Jurisdiction is conferred by law. Also, jurisdiction over the subject matter is determined by
the allegations in the complaint. Under the law, the MTC has exclusive jurisdiction over ejectment suits which
shall be governed by the Revised Rule on Summary Procedure.On the other hand, the DARAB has exclusive
and primary jurisdiction to determine and adjudicate all agrarian disputes involving the implementation of the
CARP and other similar laws.For a case to involve an agrarian dispute, there must be present the requisites of
an agricultural tenancy relationship:

a) Parties are the landowner and the tenant

b) Subject is agricultural land.
c) There is consent.
d) Purpose is agricultural production.
e) There is personal cultivation.
f) There is sharing of harvest or payment of rental.’

In this case, both the allegations and reliefs prayed for was clearly an action for forcible entry.Also,
respondent’s defense of tenancy did not automatically divest the court of its jurisdiction. Precisely, it had to
conduct a preliminary conference in order to determine whether it was an ejectment suit or an agrarian dispute
and whether it has jurisdiction or none. After all, jurisdiction is not affected by the pleas or theories set by
defendant in an answer or motion to dismiss.The amended complaint also did not confer jurisdiction to the
DARAB in the absence of any allegation of tenancy relationship between the parties.
Remedios Antonino v. The Register of Deeds of Makati City, et al.
G.R. No. 185663. June 20, 2012.

Facts: Remedios Antonino was a lessee of Tian Tan Su in the latter’s residential property located in
Makati City. The lease contract between the parties granted Antonino the right of first refusal should Su sell the
property. Later, Su and Antonino had an Undertaking Agreement that Su would sell Antonino the subject
property worth P39,500,000.00. However, there was a disagreement as to who between them will pay the
capital gains tax, and the sale of the property did not proceed. Antonino then filed a complaint against Su for the
reimbursement of the cost of repairs and payment of damages, in the RTC of Makati. Later on, Antonino
amended the complaint to include the enforcement of the Undertaking Agreement. The RTC dismissed the
complaint based on improper venue and the non-payment of docket fees.

The RTC ruled that the complaint was a personal action and the venue should thus be set based on the
respective residence of the plaintiff and the defendant. Antonino, the plaintiff, resided in Muntinlupa City while
Su, the defendant, resided in Manila City. Due to the dismissal of the complaint, Su filed an Omnibus Motion
praying for the cancellation of the notice of lis pendens on the title of the subject property, and the issuance of a
summary judgment. Antonino moved to reconsider, claiming that the action is a real action and that the place
where the subject property is located should be the basis for the venue of the complaint. She also presented
evidence from the COMELEC which stated that she is a resident of Makati City. Despite these attempts, the
RTC denied the motion for reconsideration. Antonino filed another Motion for Reconsideration, claiming and
insisting that she followed the rules on motions, despite the fact that Su was only given the notice and copy of
the motion for hearing the day before.

The RTC denied the Motions for Reconsideration from both parties. It did not cancel the notice of lis
pendens and ruled that it did not acquire jurisdiction due to Antonino’s failure to pay the docket fees. The RTC
also affirmed its ruling that the action is a personal action and the complaint was properly dismissed due to
improper venue. Antonino filed with the CA a petition for the annulment of judgment.

The CA dismissed the petition. It held that Antonino failed to prove any exceptional circumstances
warranting the remedy of annulment of judgment, and the fact that she failed to appeal within the period
allowed. The CA, however, ruled on the merits and further affirmed the RTC’s findings that the action is indeed
a personal action to enforce a contract, which further reinforced the dismissal of the complaint based on
improper venue. The CA also ruled that the petition for the annulment of judgment only embraced two
circumstances: 1) extrinsic fraud, and 2) lack of jurisdiction. Grave abuse of discretion, according to the CA,
did not necessarily include the lack of jurisdiction. A court that abuses its discretion may yet have jurisdiction
over a case, while a court that does not have jurisdiction per se cannot abuse it. Antonino filed a motion for
reconsideration but was denied by the CA, hence recourse to the SC via petition for review under Rule 45.

Issue: Is Antonino’s reliance on the remedy of petition for annulment of judgment against a final and
executory order of the RTC proper?

Ruling: No, reliance on annulment of judgment is not proper in this case.

Annulment of judgment is an extraordinary remedy that is used when either two of the following
circumstances exist: 1) Extrinsic Fraud, and 2) Lack of Jurisdiction. This remedy cannot be availed of if any of
the two circumstances are not proven sufficiently. Annulment of judgment is a challenge to the validity of a
court’s judgment, and is not to be used lightly. It is antithetical to the concept of finality of judgment. Likewise,
annulment of judgment is not an alternative to appeal, as the grounds for appeal are different from the grounds
for annulment of judgment. Annulment of judgment cannot be a substitute for a lost appeal. In this case,
Antonino failed to appeal the case when she relied on the petition for the annulment of judgment. The RTC’s
judgment was already final and executory when the petition was filed. It was due to her own negligence that the
period of appeal lapsed before she could timely file one in the CA. Similarly, a second Motion for
Reconsideration is an improper remedy when a court denies the first Motion for Reconsideration. The purpose
of a Motion for Reconsideration is to allow a court to correct itself before elevating the case on a appeal to a
higher court. It cannot be filed twice as a substitute for an appeal. Lastly, grave abuse of discretion is not a
ground to annul a final and executory judgment. The RTC was correct in dismissing the complaint based on
improper venue as the action was a personal action. The Undertaking Agreement made by both parties being in
question, the transfer of ownership of the subject property did not yet pass to Antonino. She failed to prove that
there was already an actual or constructive delivery of the property. As the ownership of the property was not an
issue, it could not ripen into a real action that would allow the venue Antonino chose for the dismissed action.

As the complaint was dismissed for improper venue the other ground, that of the non-payment of docket
fees, is redundant to resolve as the RTC decision has become final and executory.
DELFIN LAMSIS, MAYNARD MONDIGUING, JOSE VALDEZ, JR. and Heirs of AGUSTIN KITMA,
represented by EUGENE KITMA, Petitioners, vs. MARGARITA SEMON DONG-E, Respondent.

Facts: This case involves a conflict of ownership and possession over an untitled parcel of land located
in Baguio City and is part of a larger parcel of land. Petitioners are the actual occupants of Lot No. 1,
respondent is claiming ownership thereof and is seeking to recover its possession.

According to respondent, her family’s ownership and occupation of Lot No. 1 can be traced as far back
as 1922 to her late grandfather, Ap-ap. Upon Ap-ap’s death, the property was inherited by his children, who
obtained a survey plan in 1964, which included Lot No. 1.On the same year, they declared the property for
taxation purposes in the name of "The Heirs of Ap-ap." which bears a notation that reads: "Reconstructed from
an old Tax Declaration No. 363 dated May 10, 1922 per true of same presented."8The heirs of Ap-ap then
executed, for a P500.00 consideration, a Deed of Quitclaim in favor of their brother Gilbert Semon
(Respondent’s father)

Gilbert Semon together with his wife, allowed his in-laws Manolo Lamsis and Nancy Lamsis-Kitma, to
stay on a portion of Lot No. 1 together with their respective families, they were allowed to introduce
improvements. When Manolo Lamsis and Nancy Lamsis-Kitma died, their children, petitioners Delfin Lamsis
(Delfin) and Agustin Kitma (Agustin), took possession of certain portions of Lot No. 1.

Delfin possessed 4,000 square meters of Lot No. 1, while Agustin occupied 5,000 square meters
thereof.12 Nevertheless, the heirs of Gilbert Semon tolerated the acts of their first cousins. When Gilbert Semon
died, his children extrajudicially partitioned the property among themselves and allotted Lot No. 1 thereof in
favor of respondent. Since then, Margarita allegedly paid the realty tax over Lot No. 1 and occupied and
improved the property together with her husband; while at the same time, tolerating her first cousins’
occupation of portions of the same lot.

This state of affairs changed when petitioners Delfin and Agustin allegedly began expanding their
occupation on the subject property and selling portions thereof to petitioners Maynard Mondiguing (Maynard)
and Jose Valdez (Jose).Respondent filed a complaint for recovery of ownership, possession, reconveyance and
damages against petitioners of Lot No. 1 before the Regional Trial Court (RTC) of Baguio City.
 The complaint prayed for the annulment of the sales to Maynard and Jose and for petitioners to vacate
the portions of the property which exceed the areas allowed to them by respondent. Margarita claimed that, as
they are her first cousins, she is willing to donate to Delfin and Agustin a portion of Lot No. 1, provided that she
retains the power to choose such portion.

Petitioners denied respondents’s claims of ownership and possession. According to Delfin and Agustin,
Lot No. 1 is a public land claimed by the heirs of Joaquin Smith (not parties to the case), which gave their
permission for Delfin and Agustin’s parents to occupy the land. They also presented their neighbors who
testified that it was Delfin and Agustin as well as their respective parents who occupied Lot No. 1, not
respondent and her parents. Delfin and Agustin also assailed the muniments of ownership presented by
Respondent as fabricated, unauthenticated, and invalid. It was pointed out that the Deed of Quitclaim, allegedly
executed by all of Ap-ap’s children, failed to include two – Rita Bocahan and Stewart Sito.

In order to debunk petitioners’ claim that the Smiths owned the subject property, respondent presented a
certified copy of a Resolution from the Land Management Office denying the Smiths’ application for
recognition of the subject property as part of their ancestral land, which explains that the application had to be
denied because the Smiths did not "possess, occupy or utilize all or a portion of the property x x x. The actual
occupants (who were not named in the resolution) whose improvements are visible are not in any way related to
the applicant or his co-heirs."

To bolster her claim of ownership and possession, respondent introduced as evidence an unnumbered
resolution of the Community Special Task Force on Ancestral Lands (CSTFAL) of the Department of
Environment and Natural Resources (DENR), acting favorably on her and her siblings’ ancestral land claim.

The resolution was not signed by two members of the CSTFAL on the ground that the signing of the
unnumbered resolution was overtaken by the enactment of the Republic Act (RA) No. 8371 or the Indigenous
People’s Rights Act of 1997 (IPRA). The IPRA removed the authority of the DENR to issue ancestral land
claim certificates and transferred the same to the National Commission on Indigenous Peoples (NCIP).The
Ancestral Land Application No. Bg-L-064 of the Heirs of Gilbert Semon was transferred to the NCIP,
Cordillera Administrative Region, La Trinidad, Benguet and re-docketed as Case No. 05-RHO-CAR-03.The
petitioners filed their protest in the said case before the NCIP. The same has been submitted for resolution.

The Regional Trial Court ruled in favor of the respondent. It appears that no motion for reconsideration
was filed before the trial court. Nevetheless, the trial court issued an Order allowing the petitioners’ Notice of
Appeal.

The petitioners appealed to the Court of Appeals, which affirmed the RTC. The sole issue resolved by
the appellate court was whether the trial court erred in ruling in favor of respondent in light of the adduced
evidence. Citing the rule on preponderance of evidence, the CA held that the respondent was able to discharge
her burden in proving her title and interest to the subject property. Her documentary evidence were amply
supported by the testimonial evidence of her witnesses. In contrast, petitioners only made bare allegations in
their testimonies that are insufficient to overcome respondent’s documentary evidence. Petitioners moved for a
reconsideration of the adverse decision but the same was denied. Hence this petition.

Issues: (1) Whether the appellate court disregarded material facts and circumstances in affirming the
trial court’s decision;

(2) If the trial court retains jurisdiction, whether the ancestral land claim pending before the NCIP
should take precedence over the reivindicatory action.

(3) Whether the trial court has jurisdiction to decide the case in light of the effectivity of RA 8371 or the
Indigenous People’s Rights Act of 1997 at the time that the complaint was instituted;
 Ruling: (1) Both the trial and the appellate courts ruled that respondent has proven her claims of
ownership and possession with a preponderance of evidence. Petitioners argue that the two courts erred in their
appreciation of the evidence. They ask the Court to review the evidence of both parties, despite the CA’s
finding that the trial court committed no error in appreciating the evidence presented.

Hence, petitioners seek a review of questions of fact, which is beyond the province of a Rule 45 petition.
Since it raises essentially questions of fact, this assignment of error must be dismissed for it is settled that only
questions of law may be reviewed in an appeal by certiorari.

(2) The application for issuance of a Certificate of Ancestral Land Title pending before the NCIP is akin to a
registration proceeding. It also seeks an official recognition of one’s claim to a particular land and is also in
rem. The titling of ancestral lands is for the purpose of "officially establishing" one’s land as an ancestral land.
Just like a registration proceeding, the titling of ancestral lands does not vest ownership upon the applicant but
only recognizes ownership that has already vested in the applicant by virtue of his and his predecessor-in-
interest’s possession of the property since time immemorial.

A registration proceeding is not a conclusive adjudication of ownership. In fact, if it is later on found in

another case (where the issue of ownership is squarely adjudicated) that the registrant is not the owner of the
property, the real owner can file a reconveyance case and have the title transferred to his name. Given that a
registration proceeding (such as the certification of ancestral lands) is not a conclusive adjudication of
ownership, it will not constitute litis pendentia on a reivindicatory case where the issue is ownership.

Since there is no litis pendentia, we cannot agree with petitioners’ contention that respondent committed
forum-shopping. Settled is the rule that "forum shopping exists where the elements of litis pendentiaare present
or where a final judgment in one case will amount to res judicata in the other."

(3) For the first time in the entire proceedings of this case, petitioners raise the trial court’s alleged lack of
jurisdiction over the subject-matter in light of the effectivity of the IPRA at the time that the complaint was filed
in 1998. They maintain that, under the IPRA, it is the NCIP which has jurisdiction over land disputes involving
indigenous cultural communities and indigenous peoples.

As a rule, an objection over subject-matter jurisdiction may be raised at any time of the proceedings. This is
because jurisdiction cannot be waived by the parties or vested by the agreement of the parties. Jurisdiction is
vested by law, which prevails at the time of the filing of the complaint.

An exception to this rule has been carved by jurisprudence. In the seminal case of Tijam v. Sibonghanoy, the
Court ruled that the existence of laches will prevent a party from raising the court’s lack of jurisdiction. Laches
is defined as the "failure or neglect, for an unreasonable and unexplained length of time, to do that which, by
exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a right
within a reasonable time, warranting the presumption that the party entitled to assert it either has abandoned or
declined to assert it."Wisely, some caseshave cautioned against applying Tijam, except for the most exceptional
cases where the factual milieu is similar to Tijam.

In Tijam, the surety could have raised the issue of lack of jurisdiction in the trial court but failed to do so.
Instead, the surety participated in the proceedings and filed pleadings, other than a motion to dismiss for lack of
jurisdiction. When the case reached the appellate court, the surety again participated in the case and filed their
pleadings therein. It was only after receiving the appellate court’s adverse decision that the surety awoke from
its slumber and filed a motion to dismiss, in lieu of a motion for reconsideration. The CA certified the matter to
this Court, which then ruled that the surety was already barred by laches from raising the jurisdiction issue.

In case at bar, the application of the Tijam doctrine is called for because the presence of laches cannot be
ignored. If the surety in Tijam was barred by laches for raising the issue of jurisdiction for the first time in the
CA, what more for petitioners in the instant case who raised the issue for the first time in their petition before
this Court.

At the time that the complaint was first filed in 1998, the IPRA was already in effect but the petitioners
never raised the same as a ground for dismissal; instead they filed a motion to dismiss on the ground that the
value of the property did not meet the jurisdictional value for the RTC. They obviously neglected to take the
IPRA into consideration.

When the amended complaint was filed in 1998, the petitioners no longer raised the issue of the trial court’s
lack of jurisdiction. Instead, they proceeded to trial, all the time aware of the existence of the IPRA as
evidenced by the cross-examination conducted by petitioners’ lawyer on the CSTFAL Chairman Guillermo
Fianza. In the cross-examination, it was revealed that the petitioners were aware that the DENR, through the
CSTFAL, had lost its jurisdiction over ancestral land claims by virtue of the enactment of the IPRA. They
assailed the validity of the CSTFAL resolution favoring respondent on the ground that the CSTFAL had been
rendered functus officio under the IPRA. Inexplicably, petitioners still did not question the trial court’s
jurisdiction.1avvphi1

When petitioners recoursed to the appellate court, they only raised as errors the trial court’s appreciation of
the evidence and the conclusions that it derived therefrom. In their brief, they once again assailed the
CSTFAL’s resolution as having been rendered functus officio by the enactment of IPRA. But nowhere did
petitioners assail the trial court’s ruling for having been rendered without jurisdiction.

It is only before this Court, eight years after the filing of the complaint, after the trial court had already
conducted a full-blown trial and rendered a decision on the merits, after the appellate court had made a thorough
review of the records, and after petitioners have twice encountered adverse decisions from the trial and the
appellate courts — that petitioners now want to expunge all the efforts that have gone into the litigation and
resolution of their case and start all over again. This practice cannot be allowed.

Thus, even assuming arguendo that petitioners’ theory about the effect of IPRA is correct (a matter which
need not be decided here), they are already barred by laches from raising their jurisdictional objection under the
circumstances.
 Corazon Jalbuena De Leon vs. Court Of Appeals and Uldarico Inayan
G.R. No. 96107. June 19, 1995.

Facts: Jesus Jalbuena entered into a verbal lease contract with Uldarico Inayan, for one year renewable
for the same period. Inayan was allowed to continue with the lease from year to year. Corazon Jalbuena de Leon
is the daughter of Jesus and the transferee of the subject property. Inayan ceased paying the agreed rental and
instead, asserted dominion over the land. When asked by De Leon to vacate the land, he refused to do so,
prompting De Leon to file a complaint before the RTC for "Termination of Civil Law Lease; Recovery of
Possession, Recovery of Unpaid Rentals and Damages. Inayan claimed tenancy dispute thus the lower court
issued an order adopting the procedure in agrarian cases but still rendered decision Declaring the lease contract
between plaintiff and defendant as a civil law lease, and that the same has already been terminated due to
defendant's failure to pay his rentals from 1983 up to the present.

On appeal to the CA, Inayan raised the sole issue of jurisdiction and alleged that the lower court, acting
as Court of Agrarian Relations, had no jurisdiction over the action. The CA, at first affirmed the trial court's
decision, but when an MR filed by Inayan it then set aside its earlier decision and dismissed the civil case for
want of jurisdiction. In its amended decision, the appellate court held that petitioner's complaint below was
anchored on acción interdictal , a summary action for recovery of physical possession that should have been
brought before the proper inferior court.

Issue: Whether or not the RTC, then acting as a court of agrarian relations employing agrarian
procedure, had jurisdiction to try the suit filed by De Leon?

Ruling: Yes. Jurisdiction of the court over the subject matter is conferred only by the Constitution or by
law. It is determinable on the basis of allegations in the complaint. In order to determine whether the court
below had jurisdiction, it is necessary to first ascertain the nature of the complaint filed before it. A study of the
complaint instituted by petitioner in the lower court reveals that the case is, contrary to the findings of the
respondent appellate court, not one of unlawful detainer. Not being merely a case of ejectment, the regional trial
court possessed jurisdiction to try and resolve the case.
 SERAFIN TIJAM, ET AL., Plaintiffs-Appellees, -versus- MAGDALENO SIBONGHANOY ALIAS
GAVINO SIBONGHANOY, ET AL., Defendants, MANILA SURETY AND FIDELITY CO., INC.
(CEBU BRANCH) bonding Company and defendant-appellant.
GR No. L-21450. April 15, 1968.

Facts: On July 19, 1948, the spouses Serafin Tijam and Felicitas Tagalog filed a civil case in the Court
of First Instance of Cebu (CFI) against the spouses Magdaleno Sibonghanoy and Lucia Baguio to recover from
them the sum of P1,908.00, with legal interest.

As prayed for in the complaint, a writ of attachment was issued by the court against the Sibonghanoys’
properties, but was soon dissolved after the filing of a counter-bond by the latter and the Manila Surety and
Fidelity Co., Inc.

Trial Court’s Ruling – Favored the plaintiffs.

The plaintiffs moved for the issuance of a writ of execution against the Surety’s bond after the writ of
execution against the defendants was returned unsatisfied. The Surety filed a written opposition against such
writ upon two grounds, namely, (1) Failure to prosecute and (2) Absence of a demand upon the Surety for the
payment of the amount due under the judgment. The Surety prayed the Court not only to deny the motion for
execution against its counter-bond but also the following affirmative relief: “to relieve the herein bonding
company of its liability, if any, under the bond in question”. Such motion was denied as there was no previous
demand made on the Surety for the satisfaction of the judgment.

Thereafter the necessary demand was made, and upon failure of the Surety to satisfy the judgment, the
plaintiffs filed a second motion for execution against the counter-bond.

On the date set for the hearing thereon, the Court, upon motion of the Surety’s counsel, granted the latter
a period of five days within which to answer the motion. Upon its failure to file such answer, the Court granted
the motion for execution and the corresponding writ was issued. Subsequently, the Surety moved to quash the
writ on the ground it was issued without the required summary hearing provided for in Section 17 of Rule 59 of
the Rules of Court. The Surety, then, appealed to the Court of Appeals.

Court of Appeal’s Ruling – Affirmed the orders appealed from (December 11, 1962)
 On January 10, 1963, two days after the Court granted it’s motion asking for extension of time to file a
motion for reconsideration, Surety filed a motion to dismiss, alleging that since the case was filed on July 19,
1948, a month after the effectivity of the Judiciary Act of 1948, Section 88 of which placed within the original
exclusive jurisdiction of inferior courts all civil actions where the value of the subject-matter or the amount of
the demand does not exceed P2,000.00, exclusive of interest and costs, the CFI therefore had no jurisdiction to
try and decide the case.

On May 20, 1963, Court of Appeals resolved to set aside its decision and to certify the case to the
Supreme Court.

Issue: Whether or not the Surety is estopped from questioning the jurisdiction of the CFI of Cebu for the
first time upon appeal.

Ruling: Yes. The Supreme Court believes that the Surety is now barred by laches from invoking such
plea, almost fifteen years from the commencement of the action on July 19, 1948, before filing its motion to
dismiss on January 12, 1963, raising the question of lack of jurisdiction for the first time.

A party may be estopped or barred from raising a question in different ways and for different reasons.
Thus we speak of estoppel in pais, of estoppel by deed or by record, and of estoppel by laches.

Laches, in a general sense, is failure or neglect, for an unreasonable and unexplained length of time, to
do that which, by exercising due diligence, could or should have been done earlier; it is negligence or omission
to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has
abandoned it or declined to assert it.

The doctrine of laches or of “stale demands” is based upon grounds of public policy which requires, for
the peace of society, the discouragement of stale claims and, unlike the statute of limitations, is not a mere
question of time but is principally a question of the inequity or unfairness of permitting a right or claim to be
enforced or asserted. It has been held that 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.

The question of whether the court had jurisdiction either of the subject matter of the action or of the
parties was not important in such cases because the party is barred from such conduct, not because the judgment
or order of the court is valid and conclusive as an adjudication, but for the reason that such a practice cannot be
tolerated — obviously for reasons of public policy.

Furthermore, it has also been held that after voluntarily submitting a cause and encountering an adverse
decision on the merits, it is too late for the loser to question the jurisdiction or power of the court. And in
Littleton vs. Burgess, 16 Wyo. 58, the Court said that it is not right for a party who has affirmed and invoked
the jurisdiction of a court in a particular matter to secure an affirmative relief, to afterwards deny that same
jurisdiction to escape a penalty.

The facts of this case show that from the time the Surety became a quasi-party on July 31, 1948, it could
have raised the question of the lack of jurisdiction of the Court of First Instance of Cebu to take cognizance of
the present action by reason of the sum of money involved which, according to the law then in force, was within
the original exclusive jurisdiction of inferior courts. It failed to do so. Instead, at several stages of the
proceedings in the court a quo as well as in the Court of Appeals, it invoked the jurisdiction of said courts to
obtain affirmative relief and submitted its case for a final adjudication on the merits. It was only after an adverse
decision was rendered by the Court of Appeals that it finally woke up to raise the question of jurisdiction. Were
We to sanction such conduct on its part, We would in effect be declaring as useless all the proceedings had in
the present case since it was commenced on July 19, 1948 and compel the judgment creditors to go up their
Calvary once more. The inequity and unfairness of this is not only patent but revolting.

FIRST CORPORATION, Petitioner, v. FORMER SIXTH DIVISION OF THE COURT OF APPEALS,

BRANCH 218 OF THE REGIONAL TRIAL COURT OF QUEZON CITY,** EDUARDO M. SACRIS,
and CESAR A. ABILLAR, Respondents.

Facts: The case at bar is a Special Civil Action under Rule 65 of the Revised Rules of Civil Procedure
seeking to annul, on the ground of grave abuse of discretion amounting to lack or excess of jurisdiction, the
decision of the RTC Quezon City, as affirmed by the CA. The petitioner (First Corporation) is a corporation
duly organized and existing under the PH laws and engaged primarily in trade. The private respondent (Sacris)
is the alleged creditor of the petitioner, while another private respondent (Abillar) had served as the President
and Chairman of the Board of the petitioner corporation from 1993 until February 1998.

In 1991, the corporate officers of the petitioner namely: Vicente C. Esmeralda, Edgardo C. Cerbo,
Nicolas E. Esposado, Rafael P. La Rosa and Abillar, convinced Sacris to invest in their business as the
petitioner needed a fresh equity infusion, particularly in its Rema Tip Top Division, to make viable its
continuous operation. The petitioner made a promise of turning such equity into shareholding in the petitioner.
While the conversion of such investment into shareholding was still pending, Sacris and the petitioner agreed to
consider the same as a loan which shall earn an interest of 1%/month. Accordingly, from the year 1991 up to
1994, private respondent Sacris had already extended a P1.2 million loan to the Rema Tip Top Division of the
petitioner.

In 1997, Sacris extended another P1 million loan to the petitioner. Thus, from 1991 up to 1997, the total
loan extended by Sacris to the petitioner reached a total amount of P2.2 million. All loans were given by Sacris
to herein Abillar, as the latter was then the President and Chairman of the Board of Directors of the petitioner.
The receipts for the said loans were issued by the petitioner in the name of Abillar. Petitioner failed to convert
Sacris's investment/loan into equity or shareholding in the petitioner. In its place, petitioner agreed to pay a
monthly interest of 2.5% on the amount of the loan extended to it by Sacris. Petitioner likewise made partial
payments of P400,000.00 on the principal obligation and interest payment in the amounts of P33,750.27 and
P23,250.00, thus, leaving an outstanding balance of P1.8 million.

In the meantime, a Stockholders’ Meeting of the petitioner was held to elect the members of the Board
and to elect new set of officers. Abillar was no long re-elected because they had lost their confidence for he had
been involved in various anomalies and irregularities during his tenure. Thus, Abillar was ousted.

In 1998, Sacris excuted a Deed of Assignment in favor Abillar, assigning and transferring to Abillar his
remaining collectibles due from the petitioner in the amount of P1.8 million. As a consideration, Abillar shal
pay Sacris the said outstanding balance due from the petitioner on or before July 30, 1998. Later on, Abillar, by
the virtue of the said deed, filed a complaint for Sum of Monet with Prayer for a Writ of Preliminary
Attachment and Damages before the RTC of Pasig against the petitioner. While the said case was still pending,
Sacris and Abarilla agreed to rescind the said deed for failure of Abillar fo comply with his undertaking to pay
Sacris. Thus, Sacris and Abillar executed a Deed of Rescission of the said deed. Consequently, Sacris made a
demand upon the petitioner to pay the outstanding obligation but the latter refused to do so.

Before the pre-trial, Sacris filed a Motion for Intervention attaching his Complain-in-Intervention. The
RTC Pasig denied the said Motion for Intervention but, however, the trial court admitted the complain in
intervention filed by Sacris and dismissed the complaint originally filed by Abillar against the petitioner. The
admission of the said complaint prompted the petitioner to file a Petition for Certiorari and Prohibition before
the CA. The CA granted the petition filed by the petitioner and issued a writ of certiorari in which the order of
the RTC Pasig were set aside. Thus, the CA directed Judge Hernandez to dismiss the complaint with prejudice
and to deny the Motion in Intervention without prejudice.

Based on the decision of the CA, Sacris filed a complaint for Sum of Money with Damages before the
RTC-QC against the petitioner to recover the alleged collectible sum due from the petitioner. The petitioner
denied the material allegations stated in the complaint in which it denied having liability to Sacris as it had no
knowledge of or consent to the purported transactions or dealings that Sacris may have had with Abillar.
Subsequently, petitioner filed a Third-Party Complaint against Abillar alleging that the investment/loan
transactions of Sacris, the basis of his cause of action against the petitioner, were all entered into by Abillar
without the knowledge, consent, authority and/or approval of the petitioner or of the latter's Board of Directors.
The aforesaid transactions were not even ratified by the petitioner or by its Board of Directors. Abillar filed his
Answer to the said Third-Party Complaint raising therein the same allegations found in the Complaint filed by
Sacris. Pre-trial ensued followed by the trial on the merits.

RTC OF QUEZON CITY - It rendered a decision in favor of Sacris and Abillar (private respondents)
ordering the petitioner to pay the said balance plus an interest of 24%/annum; pay Abillar P20,000.00 and
Sacris P50,000.00; attorney’s fees and cost of suit.

COURT OF APPEALS - The petitioner appealed the decision of the RTC QC in which the CA rendered
a decision dismissing the appeal filed because it did find any reversible error in the decision of the said RTC. A
motion for reconsideration was filed but was also denied by the CA because the CA had already passed upon
the issues raised.

Issue: WON the remedy of certiorari provoded for under the Rule 65 was properly applied in the case.

Ruling: No. The petitioner evidently availed itself of the wrong mode of appeal. It is a well-entrenched
rule that this Court is not a trier of facts. This Court will not pass upon the findings of fact of the trial court,
especially if they have been affirmed on appeal by the CA. Unless the case falls under the recognized
exceptions, the rule should not be disturbed.

In the case at bar, the findings of the RTC QC as well as the CA are properly supported by evidence on
record. Both courts found that the alleged loans extended to the petitioner by Sacris were reflected in the
petitioner ‘s financial statements, particularly in the years 1992-1993, were contrary to the claim of petitioner.
The said financial statements of the petitioner were not the sole bases used by the RTC QC and by the CA in its
findings of liability against the petitioner. The RTC QC also took into consideration the pieces of documentary
evidence which likewise became the grounds for its findings that indeed, Sacris had extended a loan to
petitioner, and that the same was given to Abillar, and received by the petitioner. Those pieces of documentary
evidence very well supported the claim of Sacris that the petitioner received money from him through its former
President, Abillar. Thus, petitioner cannot claim that it never consented to the act of Abillar of entering into a
loan/investment transaction with Sacris, for there are documents that would prove that the money was received
by the petitioner, and the latter acknowledged receipt of said money. The same pieces of evidence likewise
confirm the findings of the RTC QC that the petitioner benefited from the said transaction; therefore, it should
be held liable for the same amount of its unpaid obligation to Sacris. As the findings of the RTC QC and the CA
are supported by evidence, this Court finds no reason to deviate from the heretofore cited rule.

It is a fundamental aphorism in law that a review of facts and evidence is not the province of the
extraordinary remedy of certiorari, which is extra ordinem - beyond the ambit of appeal. In certiorari
proceedings, judicial review does not go as far as to examine and assess the evidence of the parties and to weigh
the probative value thereof. It does not include an inquiry as to the correctness of the evaluation of
evidence.Any error committed in the evaluation of evidence is merely an error of judgment that cannot be
remedied by certiorari. An error of judgment is one which the court may commit in the exercise of its
jurisdiction. An error of jurisdiction is one where the act complained of was issued by the court without or in
excess of jurisdiction, or with grave abuse of discretion, which is tantamount to lack or in excess of jurisdiction
and which error is correctible only by the extraordinary writ of certiorari. Certiorari will not be issued to cure
errors of the trial court in its appreciation of the evidence of the parties, or its conclusions anchored on the said
findings and its conclusions of law. It is not for this Court to re-examine conflicting evidence, re-evaluate the
credibility of the witnesses or substitute the findings of fact of the court a quo.Since the issues raised by the
petitioner in its Petition for Certiorari are mainly factual, as it would necessitate an examination and re-
evaluation of the evidence on which the RTC QC and the CA based their decisions, the petition should not be
given due course. Thus, the remedy of certiorari will not lie to annul or reverse the Decision of the RTC QC, as
affirmed by the CA in its decision and resolution.

Settled is the rule that the proper remedy from an adverse decision of the CA is an appeal under Rule 45
and not a Petition for Certiorari under Rule 65. Hence, petitioner could have raised the CA, affirming the
assailed decision of the RTC QC to this Court via an ordinary appeal under Rule 45 of the 1997 Revised Rules
of Civil Procedure. It should be emphasized that the extraordinary remedy of certiorari will not lie when there
are other remedies available to the petitioner. Therefore, in availing itself of the extraordinary remedy of
certiorari, the petitioner corporation resorted to a wrong mode of appeal.Finally, even if this case will be treated
as having been filed under Rule 45, still it will be dismissed for utter lack of merit because this case does not
fall under the recognized exceptions wherein this Court is authorized to resolve factual issues.
 CHESTER DE JOYA v. JUDGE PLACIDO C. MARQUEZ.
G.R. No. 162416. January 31, 2006.

Facts: Through petition of certiorari and prohibition, petitioner De Joya seeks to nullify and set aside
the warrant of arrest issued by respondent judge against petitioner in Criminal Case No. 03-219952 for violation
of Article 315, par. 2(a) of the Revised Penal Code in relation to Presidential Decree (P.D.) No. 1689. Petitioner
asserts that respondent judge erred in finding the existence of probable cause that justifies the issuance of a
warrant of arrest against him and his co-accused.

Issues: (1) Whether or not the Supreme Court can review the factual findings of the trial court

(2) Whether or not the petitioner is entitled to seek relief without being submitted to the jurisdiction of
the court

Ruling: (1) Yes. The general rule is that the Supreme Court does not review the factual findings of the
trial court, which include the determination of probable cause for the issuance of warrant of arrest. It is only in
exceptional cases where the Court sets aside the conclusions of the prosecutor and the trial judge on the
existence of probable cause, that is, when it is necessary to prevent the misuse of the strong arm of the law or to
protect the orderly administration of justice. The facts obtaining in this case do not warrant the application of
the exception.

(2) No. Petitioner is not entitled to seek relief from Supreme Court nor from the trial court as he
continuously refuses to surrender and submit to the court's jurisdiction. Justice Florenz D. Regalado explains the
requisites for the exercise of jurisdiction and how the court acquires such jurisdiction, thus: x x x Requisites for
the exercise of jurisdiction and how the court acquires such jurisdiction: b. Jurisdiction over the defendant or
respondent: This is acquired by the voluntary appearance or submission by the defendant or respondent to the
court or by coercive process issued by the court to him, generally by the service of summons. There is no
exceptional reason in this case to allow petitioner to obtain relief from the courts without submitting to its
jurisdiction. On the contrary, his continued refusal to submit to the court's jurisdiction should give this Court
more reason to uphold the action of the respondent judge. The purpose of a warrant of arrest is to place the
accused under the custody of the law to hold him for trial of the charges against him. His evasive stance shows
an intent to circumvent and frustrate the object of this legal process. It should be remembered that he who
invokes the court's jurisdiction must first submit to its jurisdiction.
 A.L. ANG NETWORK, INC. V. EMMA MONDEJAR, ET AL.

Facts: Petitioner filed a complaint for sum of money under the Rule of Procedure for Small Claims
Cases before the MTCC, seeking to collect from respondent which represented her unpaid water bills. Petitioner
claimed that it was duly authorized to supply water to and collect payment therefor from the homeowners of
Regent Pearl Subdivision. In defense, respondent contended that since April 1998 up to February 2003, she
religiously paid petitioner the agreed monthly flat rate of P75.00 for her water consumption. Notwithstanding
their agreement that the same would be adjusted only upon prior notice to the homeowners, petitioner
unilaterally charged her unreasonable and excessive adjustments

MTCC: Respondent should be considered to have fully paid petitioner. Aggrieved, petitioner filed a
petition for certiorari under Rule 65 of the Rules of Court before the RTC, ascribing grave abuse of discretion
on the part of the MTCC.

RTC: dismissing the petition for certiorari, finding that the said petition was only filed to circumvent the
non-appealable nature of small claims cases.

Issue: Whether or not the RTC erred in dismissing petitioner’s recourse under Rule 65 of the Rules of
Court assailing the propriety of the MTCC Decision in the subject small claims case.

Ruling: Section 23 of the Rule of Procedure for Small Claims Cases states that: After the hearing, the
court shall render its decision on the same day, based on the facts established by the evidence (Form 13-SCC).
The decision shall immediately be entered by the Clerk of Court in the court docket for civil cases and a copy
thereof forthwith served on the parties. The decision shall be final and unappealable.

Considering the final nature of a small claims case decision under the above-stated rule, the remedy of
appeal is not allowed, and the prevailing party may, thus, immediately move for its execution. Nevertheless, the
proscription on appeals in small claims cases, similar to other proceedings where appeal is not an available
remedy, does not preclude the aggrieved party from filing a petition for certiorari under Rule 65 of the Rules of
Court.However, in a long line of cases, the Court has consistently ruled that "the extraordinary writ of certiorari
is always available where there is no appeal or any other plain, speedy and adequate remedy in the ordinary
course of law."
 FIORELLO R. JOSE, vs. ROBERTO ALFUERTO, Et.al.
G.R. No. 169380. November 26, 2012.

Facts: The dispute involves a parcel of land registered in the name of Rodolfo Chua Sing under Transfer
Certificate of Title No. 52594, with an area of 1919 square meters, located in Barangay San Dionisio,
Parañaque City. Chua Sing purchased the land in 1991. On April 1, 1999, Chua Sing leased the property to the
petitioner. Their contract of lease was neither notarized nor registered with the Parañaque City Registry of
Deeds. Significantly, the respondents already occupied the property even before the lease contract was
executed. On April 28, 1999, soon after Chua Sing and the petitioner signed the lease contract, the petitioner
demanded in writing that the respondents vacate the property within 30 days and that they pay a monthly rental
of P1,000.00 until they fully vacate the property. The respondents refused to vacate and to pay rent. On October
20, 1999, the petitioner filed an ejectment case against the respondents before Branch 77 of the Parañaque City
MeTC, docketed as Civil Case No. 11344. In this complaint, no mention was made of any proceedings before
the barangay. Jose then brought the dispute before the barangay for conciliation.

The barangay issued a Certification to File Action on March 1, 2000. Jose was then able to file an
amended complaint, incorporating the proceedings before the barangay before the summons and copies of the
complaint were served upon the named defendants. In the Amended Complaint dated March 17, 2000, the
petitioner claimed that as lessee of the subject property, he had the right to eject the respondents who unlawfully
occupy the land. The petitioner also stated that despite his written demand, the respondents failed to vacate the
property without legal justification. He prayed that the court order the respondents; (1) to vacate the premises;
(2) to pay him not less than P41,000.00 a month from May 30,1999 until they vacate the premises; and (3) to
pay him attorney’s fees of no less than P50,000.00, and the costs of suit.

In their Answer, the respondents likewise pointed out that they have been in possession of the land long
before Chua Sing acquired the property in 1991, and that the lease contract between the petitioner and Chua
Sing does not affect their right to possess the land. The respondents also presented a Deed of Assignment, dated
February 13, 2000, issued by David R. Dulfo in their favor. They argued that the MeTC had no jurisdiction over
the case as the issue deals with ownership of the land, and sought the dismissal of the complaint for lack of
cause of action and for lack of jurisdiction. They also filed a counterclaim for actual and moral damages for the
filing of a baseless and malicious suit. After the required position papers, affidavits and other pieces of evidence
were submitted, the MeTC resolved the case in the petitioner’s favor. In its decision of January 27, 2003, the
MeTC held that the respondents had no right to possess the land and that their occupation was merely by the
owner’s tolerance. It further noted that the respondents could no longer raise the issue of ownership, as this
issue had already been settled: the respondents previously filed a case for the annulment/cancellation of Chua
Sing’s title before the RTC, Branch 260, of Parañaque City, which ruled that the registered owner’s title was
genuine and valid. Moreover, the MeTC held that it is not divested of jurisdiction over the case because of the
respondents’ assertion of ownership of the property.

On these premises, the MeTC ordered the respondents to vacate the premises and to remove all
structures introduced on the land; to each pay P500.00 per month from the date of filing of this case until they
vacate the premises; and to pay Jose, jointly and severally, the costs of suit and P20,000.00 as attorney’s fees.
On appeal before the RTC, the respondents raised the issue, among others, that no legal basis exists for the
petitioner’s claim that their occupation was by tolerance, "where the possession of the defendants was illegal at
the inception as alleged in the complaint, there can be no tolerance." The RTC affirmed the MeTC decision of
January 27, 2003. It issued its decision on October 8, 2003, reiterating the MeTC’s ruling that a case for
ejectment was proper.

The petitioner, as lessee, had the right to file the ejectment complaint; the respondents occupied the land
by mere tolerance and their possession became unlawful upon the petitioner’s demand to vacate on April 28,
1999. The RTC, moreover, noted that the complaint for ejectment was filed on October 20, 1999, or within one
year after the unlawful deprivation took place. It cited Pangilinan, et al. v. Hon. Aguilar, etc., et al.18 and Yu v.
Lara, et al. to support its ruling that a case for unlawful detainer was appropriate. On March 14, 2005, the Court
of Appeals reversed the RTC and MeTC decisions. It ruled that the respondents’ possession of the land was not
by the petitioner or his lessor’s tolerance. It defined tolerance not merely as the silence or inaction of a lawful
possessor when another occupies his land; tolerance entailed permission from the owner by reason of familiarity
or neighborliness. The petitioner, however, alleged that the respondents unlawfully entered the property; thus,
tolerance (or authorized entry into the property) was not alleged and there could be no case for unlawful
detainer.

The respondents’ allegation that they had been in possession of the land before the petitioner’s lessor
had acquired it in 1991 supports this finding. Having been in possession of the land for more than a year, the
respondents should not be evicted through an ejectment case. The Court of Appeals emphasized that ejectment
cases are summary proceedings where the only issue to be resolved is who has a better right to the physical
possession of a property. The petitioner’s claim, on the other hand, is based on an accion publiciana: he asserts
his right as a possessor by virtue of a contract of lease he contracted after the respondents had occupied the land

Issue: Whether or not an action for unlawful detainer is the proper remedy?

Ruling: No. it is not the proper remedy. Unlawful detainer is a summary action for the recovery of
possession of real property. This action may be filed by a lessor, vendor, vendee, or other person against whom
the possession of any land or building is unlawfully withheld after the expiration or termination of the right to
hold possession by virtue of any contract, express or implied. In unlawful detainer, the possession of the
defendant was originally legal, as his possession was permitted by the plaintiff on account of an express or
implied contract between them. However, the defendant’s possession became illegal when the plaintiff
demanded that the defendant vacate the subject property due to the expiration or termination of the right to
possess under the contract, and the defendant refused to heed such demand. A case for unlawful detainer must
be instituted one year from the unlawful withholding of possession.The allegations in the complaint determine
both the nature of the action and the jurisdiction of the court. The complaint must specifically allege the facts
constituting unlawful detainer. In the absence of these allegations of facts, an action for unlawful detainer is not
the proper remedy and the municipal trial court or the MeTC does not have jurisdiction over the case.
 NAPOLEON GEGARE vs. HON. COURT OF APPEALS (ELEVENTH DIVISION) AND ARMIE
ELMA
G.R. No. 83907. September 13, 1989.

Facts: The case involves a land wherein the parties obtained equal shares by virtue of a Board
Resolution, while respondent does not contest any objections with regard to her share, the petitioner herein
wants the entire property.

The land in controversy was located in Dadiangas General Santos City and under the name of Paulino
Elma the father of the respondent herein. A reversion case was filed by the Republic of the Philippines against
Paulino Elma in the Court of First Instance of South Cotabato, wherein in due course a decision was rendered
on January 29, 1973 declaring the title of Paulino Elma null and void and the same was ordered cancelled. The
lot was reverted to the mass of public domain subject to disposition and giving preferential right to its actual
occupant, Napoleon Gegare.

Both petitioner and private respondent filed an application for this lot in the Board of Liquidators. The
Board of Liquidators ruled in favor of the petitioner on the ground that the said land was acquired by him by
way of negotiated sale. A motion for reconsideration filed by private respondent was favorably considered by
the Board in Resolution. Thus, the Board directed the chief of LASEDECO to investigate the occupancy and
area of the lot. In this investigation, it was found that only private respondent was the actual occupant so the
LASEDECO chief recommended the division of the property between petitioner and private respondent. The
Board Resolution on approving said recommendation by dividing the lot equally between the parties at 135.5
square meters each to be disposed to them by negotiated sale.

Petitioner filed an action for "Annulment and Cancellation of Partition of Lot to Declare them Null and
Void" against private respondent and the Board. Private respondent filed a motion to dismiss the complaint on
the following grounds: (1) lack of jurisdiction over the subject matter; (2) petitioner has no capacity to sue; (3)
petitioner is not a real party-in-interest; and (4) the action is barred by prior judgment. Private respondent added
another ground (5) lack of conciliation efforts pursuant to Section 6 of Presidential Decree No. 1508.
Petitioner moved for a reconsideration thereof to which an opposition was filed by private respondent. The
motion for reconsideration was granted and private respondent was required to file his responsive pleading.
Private respondent filed his answer. Private respondent asked for a preliminary hearing of the grounds for the
motion to dismiss in his affirmative defenses. The same was denied.

The respondent filed a petition for certiorari and prohibition in the Court of Appeals in which the said
petition was granted. Thus petitioner now questions the decision of the Court of Appeals.
 Issues: (1) Whether or not Court of Appeals erred in deciding without first serving the summons and a
copy of the petition to the respondent now herein the petitioner.

(2) Whether or not the court erred in not dismissing the said case for the respondents herein failed to
comply the provisions of P.D. 1508.

Ruling: (1) Private respondent disputes this claim by showing that it was at the address of petitioner
appearing in the petition at Liwayway Disco Restaurant and Disco Pub, Ilang-Ilang Street, General Santos City,
where petitioner was served a copy of private respondent's "Manifestation and Motion for Early Resolution” .
Petitioner's counsel was also served a copy of the resolution. Moreover, petitioner's counsel filed a motion
seeking a reconsideration of the decision of respondent court which was denied. Therefore, petitioner
voluntarily submitted to the jurisdiction of the respondent court and was never deprived of due process.

(2) True it is that the Board is a government instrumentality but the petitioner and private respondent
who are also contending parties in the case are residents of the same barangay so Section 6 of Presidential
Decree No. 1508 should apply to them as it provides:

Section 6. Conciliation, pre-condition to filing of complaint. No complaint, petition, action or proceeding involving any
matter within the authority of the Lupon as provided in Section 2 hereof shall be filed or instituted in court or any other government
office for adjudication unless there has been a confrontation of the parties before the Lupon Chairman or the Pangkat and no
conciliation or settlement has been reached as certified by the Lupon Secretary or the Pangkat Secretary attested by the Lupon or
Pangkat Chairman, or unless the settlement has been repudiated.

The purpose of this confrontation is to enable the parties to settle their differences amicably. If the other
only contending party is the government or its instrumentality or subdivision the case falls within the exception
but when it is only one of the contending parties, a confrontation should still be undertaken among the other
parties.
 CLAUDIA RIVERA SANCHEZ v. HONORABLE MARIANO C. TUPAS, Presiding Judge of the
Regional Trial Court, Branch XII of Davao City and Private Respondent ALFONSO ESCOVILLA,
G.R. No. 76690. February 29, 1988.

Facts: Claudia Rivera Sanchez, petitioner and Alfonso Escovilla, private respondent are both occupants
of a public agricultural land Identified as Lot 595, Cad-102 located at Budbud, Tibungco, Davao City. Sanchez
claims that the area of 450 square meters, more or less, has been in her possession since 1947, long before
Escovilla came in and occupied another portion of Lot 595. On the other hand, Escovilla stated that the area
being claimed by petitioner is a part of his three-fourth (3/4) of a hectare parcel, the right to which he acquired
from its former possessor and owner of the improvements thereon. Sometime in 1966, out of charity and upon
their agreement that petitioner will vacate the premises upon demand, he granted petitioner's request to build her
house inside the land occupied by him.

Escovilla filed an ejectment case in the City court of Davao against Sanchez. The court rendered
judgment through a “Judgment by Compromise”.

Sanchez filed a petition to annul judgment in the RTC of Davao. In her petition, she alleged that she was
an illiterate and did not know that what he counsel presented which she had signed using her thumbmark was a
Compromise Agreement which recognized Escovilla’s prior occupancy of the land in dispute; that she was only
able to discover this when she received an Order of Guillermo C. Ferraris, OIC Regional Director of Lands,
dropping her petition, together with the petitions of three others, based, allegedly, on their withdrawal, of their
claims over the disputed land; that she had never intended to recognize the private respondent as having prior
possession and occupancy of the land, the truth of the matter being that she had been in possession of the area of
450 square meters, more or less, since 1947, long before private respondent came in and occupied another
portion of Lot 595; that in sheer bad faith, private respondent caused the survey of the entire Lot No. 595
sometime in 1980, which survey became null and void after the same was formally opposed by Eufemio
Escovilla, brother of private respondent, before Atty. Uldarico G. Aquino, then District Officer, Bureau of
Lands, Davao City; that on January 21, 1982, petitioner and the other occupants Eufemio Escovilla, Damaso
Escovilla and Emiliana Monleon, requested the Land District Officer to authorize Geodetic Engineer Timoteo
D. Cajipe of the same Office to execute a segregation survey; that the request was granted and the District Land
Officer, Atty. Bienvenido Sambrano, directed Engr. Timoteo D. Cajipe to survey the land; that Engr. Cajipe was
not able to conduct the segregation survey because private respondent threatened bodily harm on and even death
to the survey team, especially against the petitioner and the other actual occupants; and that pursuant to the 1st
Indorsement of the District Land Officer dated January 21, 1982, Land Investigator Manuel Flores conducted an
investigation of the disputed area.

Private respondent, in a Motion to Dismiss dated May 7,1986, moved for the dismissal of the complaint
on the grounds that (1) the records of the case do not show that the same has been referred to the barangay court
for confrontation, conciliation or settlement of the parties concerned as required under the provisions of Section
6 of PD 1508, and as ruled by the Supreme Court in Spouses Maria Luisa P. Morata, et al. vs. Spouses Victor
Go, et al., G.R. L-62339, October 27, 1983, 125 SCRA 444; and (2) the complaint does not state a cause of
action.

On May 12, 1986, petitioner filed an Opposition to the Motion to Dismiss on the grounds that (1) the
motion to dismiss was filed beyond the period prescribed by the Rules of Court; and (2) the petition states a
cause of action.

On the same date, May 12,1986, private respondent filed his Answer and his Reply to Opposition to
Motion to Dismiss, Opposition to Prayer therein to Declare Defendant in Default, and Manifestation, dated May
12, 1986.

On May 26,1986, petitioner filed a Supplemental Opposition to Motion to Dismiss.

Respondent Judge in an order dated May 16, 1986, granted the prayer of counsel for private respondent
to be allowed one (1) week to file a memorandum in support of his stand, which was to be commented upon
within like period by petitioner's counsel; after which, all the pending incidents are to be deemed submitted for
the resolution of the Court.

On May 29,1986, private respondent submitted his Memorandum.

In an Order dated October 10, 1986, respondent Judge sustained private respondent's Motion to Dismiss
by dismissing the case for lack of cause of action or prematurity for not having passed the Barangay Court.

Issue: Whether or not the RTC gravely erred in dismissing the petition for annulment of judgment
because it did not pass Barangay Conciliation.

Ruling: Yes. Presidential Decree No. 1508 requires that the parties who actually reside in the same city
or municipality should bring their controversy first to the Barangay Court for possible amicable settlement
before filing a complaint in court. This requirement is compulsory (as ruled in the cited case of Morato vs. Go,
125 SCRA 444), [1983] and non-compliance of the same could affect the sufficiency of the cause of action and
make the complaint vulnerable to dismissal on the ground of lack of cause of action or prematurity (Peregrina
vs. Panis, 133 SCRA 75). [1984] It must be borne in mind that the purpose of the conciliation process at the
barangay level is to discourage indiscriminate filing of cases in court in order to decongest the clogged dockets
and in the process enhance the quality of justice dispensed by courts (Morato, vs. Go, supra).

In the instant case, it will be noted that the ejectment case in the City Court of Davao, Civil Case No. 17-
10-D, was filed on September 18, 1980, when Presidential Decree No. 1508 was already enforced. However,
the records do not show that there was an opposition to the filing of the said ejectment case on the ground that
the dispute had not been submitted to the Barangay Court for possible amicable settlement under P.D. 1508.
The only logical conclusion therefore is that either such requirement had already been complied with or had
been waived. Under either circumstance, there appears to be no reason, much less a requirement that this case
be subjected to the provisions of P.D. 1508. In fact, the present controversy is an action for annulment of a
compromise judgment which as a general rule is immediately executory (De Guzman vs. Court of Appeals, 137
SCRA 730,[1985]), and accordingly, beyond the authority of the Barangay Court to change or modify.

Normally, the instant case should be remanded to the lower court for further proceedings. Nevertheless,
a close examination of the records shows that such time-consuming procedure may be dispensed with in
resolving the issue at hand. Thus, this Court, in the case of Velasco, et al. vs. Gayapa (G.R. No. 58651,
promulgated on July 30,1987), ruled: “Since the main case is manifestly without merit, the order of the lower
court dismissing the appeal cannot be impugned. As held in Castro vs. Court of appeals (supra), "a remand for
further proceedings therefore, would only result in needless delays — a few more yearn perhaps of a tortuous
journey; through new proceedings in the trial court, the intermediate appeal and another resort to this Court
through a petition for review to finally achieve the same result."

PETRA VDA. DE BORROMEO, vs. HON. JULIAN B. POGOY, Municipality/City Trial Court of Cebu
City, and ATTY. RICARDO REYES.
G.R. No. L-63277. November 29, 1983.

Facts: Petitioner herein seeks to stop respondent Judge Julian B. Pogoy of the Municipal Trial Court
(MTC) of Cebu City from taking cognizance of an ejectment suit for failure of the plaintiff to refer the dispute
to the Barangay Lupon for conciliation.

The intestate estate of the late Vito Borromeo is the owner of a building bearing the deceased’s name,
located at F. Ramos St., Cebu City. Said building has been leased and occupied by petitioner Petra Vda. de
Borromeo at a monthly rental of P500.00 payable in advance within the first 5 days of the month.

On August 28, 1982, private respondent Atty. Ricardo Reyes, administrator of the estate and a resident
of Cebu City, served upon petitioner a letter demanding that she pay the overdue rentals corresponding to the
period from March to September 1982, and thereafter to vacate the premises. As petitioner failed to do so, Atty.
Reyes instituted on September 16, 1982 an ejectment case against the former in the MTC of Cebu City. The
complaint was docketed as Civil Case No. R-23915 and assigned to the sala of respondent judge.

On November 12, 1982, petitioner moved to dismiss the case, advancing, among others, the want of
jurisdiction of the trial court. Pointing out that the parties are residents of the same city, as alleged in the
complaint, petitioner contended that the court could not exercise jurisdiction over the case for failure of
respondent Atty. Reyes to refer the dispute to the Barangay Court, as required by PD No. 1508, otherwise
known as Katarungang Pambarangay Law. Respondent judge denied the motion to dismiss. He justified the
order in this wise:

"The Clerk of Court when this case was filed accepted for filing same. That from the acceptance from (sic) filing, with the
plaintiff having paid the docket fee to show that the case was docketed in the civil division of this court could be considered as
meeting the requirement or precondition for were it not so, the Clerk of Court would not have accepted the filing of the case especially
that there is a standing circular from the Chief Justice of the Supreme Court without even mentioning the Letter of Instruction of the
President of the Philippines that civil cases and criminal cases with certain exceptions must not be filed without passing the barangay
court."

Unable to secure a reconsideration of said order, petitioner came to this Court through this petition for
certiorari. In both his comment and memorandum, private respondent admitted not having availed himself of
the barangay conciliation process, but justified such omission by citing paragraph 4, section 6 of PD 1508
which allows the direct filing of an action in court where the same may otherwise be barred by the Statute of
Limitations, as applying to the case at bar.

Issue: Whether or not going through Barangay Conciliation is necessary as a condition precedent in this
case
 Ruling: No. The excuse advanced by private respondent is unsatisfactory. Under Article 1147 of the
Civil Code, the period for filing actions for forcible entry and detainer is one year, and this period is counted
from demand to vacate the premises.

In the case at bar, the letter-demand was dated August 28, 1982, while the complaint for ejectment was
filed in court on September 16, 1982. Between these two dates, less than a month had elapsed, thereby leaving
at least eleven (11) full months of the prescriptive period provided for in Article 1147 of the Civil Code. Under
the procedure outlined in Section 4 of PD 1508, 3 the time needed for the conciliation proceeding before the
Barangay Chairman and the Pangkat should take no more than 60 days. Giving private respondent nine (9)
months — ample time indeed — within which to bring his case before the proper court should conciliation
efforts fail. Thus, it cannot be truthfully asserted, as private respondent would want Us to believe, that his case
would be barred by the Statute of Limitations if he had to course his action to the Barangay Lupon.

With certain exceptions, PD 1508 makes the conciliation process at the Barangay level a condition
precedent for filing of actions in those instances where said law applies. For this reason, Circular No. 22
addressed to "ALL JUDGES OF THE COURTS OF FIRST INSTANCE, CIRCUIT CRIMINAL COURTS,
JUVENILE AND DOMESTIC RELATIONS COURT, COURTS OF AGRARIAN RELATIONS, CITY
COURTS, MUNICIPAL COURTS AND THEIR CLERKS OF COURT" was issued by Chief Justice Enrique
M. Fernando on November 9, 1979. Said Circular reads:
"Effective upon your receipt of the certification by the Minister of Local Government and Community Development that all
the barangays within your respective jurisdictions have organized their Lupons provided for in Presidential Decree No. 1508,
otherwise known as the Katarungang Pambarangay Law, in implementation of the barangay system of settlement of disputes, you are
hereby directed to desist from receiving complaints, petitions, actions or proceedings in cases falling within the authority of said
Lupons."

While respondent acknowledged said Circular in his order of December 14, 1982, he nevertheless chose
to overlook the failure of the complaint in Civil Case No. R-23915 to allege compliance with the requirement of
PD 1508. Neither did he cite any circumstance as would place the suit outside the operation of said law. Instead,
he insisted on relying upon the pro tanto presumption of regularity in the performance by the clerk of court of
his official duty, which to Our mind has been sufficiently overcome by the disclosure by the Clerk of Court that
there was no certification to file action from the Lupon or Pangkat secretary attached to the complaint.

Be that as it may, the instant petition should be dismissed. Under Section 4(a) of PD No. 1508, referral
of a dispute to the Barangay Lupon is required only where the parties thereto are "individuals." An "individual"
means "a single human being as contrasted with a social group or institution." Obviously, the law applies only
to cases involving natural persons, and not where any of the parties is a juridical person such as a corporation,
partnership, corporation sole, testate or intestate, estate, etc.

In Civil Case No. R-23915, plaintiff Ricardo Reyes is a mere nominal party who is suing in behalf of the
Intestate Estate of Vito Borromeo. While it is true that Section 3, Rule 3 of the Rules of Court allows the
administrator of an estate to sue or be sued without joining the party for whose benefit the action is presented or
defended, it is indisputable that the real party in interest in Civil Case No. R-23915 is the intestate estate under
administration. Since the said estate is a juridical person, plaintiff administrator may file the complaint directly
in court, without the same being coursed to the Barangay Lupon for arbitration.
 Elmer Peregrina, Adelaida Peregrina and Cecilia Peregrina v. Hon. Domingo Panis.
G.R.No. L-56011. October 31, 1984.

Facts: A complaint was filed by Spouses Procopio and Carmelita Sanchez against the petitioners in a
civil action for damages for alleged disrespect for the dignity, privacy and peace of mind of the spouses under
Article 26 of the Civil Code, and for alleged defamation under Article 33 of the same Code. Admittedly, the
parties are actual residents of the same barangay in Olongapo City. In fact, they are neighbors. Unquestionably,
too, no conciliation proceedings were filed before the Lupon. Thus the complaint filed by the petitioners is
silent regarding compliance with the mandatory requirement, nor does it allege that the dispute falls within the
excepted cases.

Lower Court: petitioners moved for the dismissal of the complaint. The spouses filed their opposition
holding that under Section 6(3) of P.D. No. 1508, the parties may go directly to the Courts if the action is
coupled with a provisional remedy such as preliminary attachment. At first, the respondent judge dismissed the
Complaint for failure of the spouses to comply with the pre-condition for amicable settlement under P.D. No.
1508, stating that the application for a provisional remedy was merely an afterthought.

On motion for reconsideration by the SPOUSES, however, respondent Judge denied the Motion to
Dismiss on the ground that under Rule 57, Section 1 of the Rules of Court, the application for attachment can be
made at the commencement of the action or any time thereafter.

Issue: Whether or not barangay conciliation in this case is a precondition for filing a complaint in the
RTC.

Ruling: Yes.cSection 3 of P.D. No. 1508 specifically provides: Disputes between or among persons
actually respectively in the same barangay shall be brought for amicable settlement before the Lupon of said
barangay. ...

It is also mandated by Section 6 of the same law:

Section 6. Conciliation, pre-condition to filing of complaint. — No complaint, petition, action or proceeding involving any
matter within the authority of the Lupon as provided. in Section 2 hereof shall be filed or instituted in court or any other government
office for adjudication unless there has been a confrontation of the parties before the Lupon Chairman or the Pangkat and no
conciliation or settlement has been reached as certified by the Lupon Secretary or the Pangkat Secretary, attested by the Lupon or
Pangkat Chairman, or unless the settlement has been repudiated. ...

Morata vs. Go, 125 SCRA 444 (1,,983), and Vda. de Borromeo vs. Pogoy, 126 SCRA 217 (1983) have
held that P.D. No. 1508 makes the conciliation process at the Barangay level a condition precedent for the filing
of a complaint in Court. Non-compliance with that condition precedent could affect the sufficiency of the
plaintiff's cause of action and make his complaint vulnerable to dismissal on the ground of lack of cause of
action or prematurity. The condition is analogous to exhaustion of administrative remedies, or the lack of
earnest efforts to compromise suits between family members, lacking which the case can be dismissed.

The parties herein fall squarely within the ambit of P.D. No. 1508. They are actual residents in the same
barangay and their dispute does not fall under any of the excepted cases.It will have to be held, therefore, that
respondent Judge erred in reconsidering his previous Order of dismissal on the ground that the provisional
remedy of attachment was seasonably filed. Not only was the application for that remedy merely an
afterthought to circumvent the law, but also, fundamentally, a Writ of Attachment is not available in a suit for
damages where the amount, including moral damages, is contingent or unliquidated. Prior referral to the Lupon
for conciliation proceedings, therefore, was indubitably called for.

Librada M. Aquino vs Ernest S. Aure.

G.R. No. 153567. February 18, 2008.

Facts: Aure and Es Aure Lending Investors alleged that they acquired the subject property from
Spouses Aquino. Aure alleged that after they paid the spouses, the latter refused to vacate the property.Aure
filed a complaint for ejectment against the spouses in the MeTC in Quezon City.The spouses counter that Aure
lacks cause of action because the latter does not have any legal right over the subject property. They reasoned
that Aure did not comply with their MoA.The MeTC ruled that since the question of ownership was put in
issue, the action was converted to a suit which is incapable of pecuniary estimation which properly rests within
the original exclusive jurisdiction of the RTC. The MeTC also ruled that non-compliance with barangay
conciliation process lead to the dismissal of the complaint.On appeal the RTC affirmed the dismissal of the
complaint on the same ground that the dispute was not brought before the Barangay Council for conciliation
before it was filed in court.The Court of Appeals reversed the MeTC and RTC decisions and remanded the case
to the MeTC for further proceedings.

Issues: (1) Whether or not non-compliance with the Barangay Conciliation proceedings is a
jurisdictional defect that warrants the dismissal of the complaint.

(2) Whether or not the allegation of ownership ousts the MeTC of its jurisdiction over an ejectment case.

Ruling: (1) No, the conciliation process is not a jurisdictional requirement, so that non-compliance
therewith cannot affect the jurisdiction which the court has otherwise acquired over the subject matter or over
the person of the defendant. However, non-compliance will not prevent a court from exercising its power of
adjudication over the case before it where the defendants failed to object to such exercise of jurisdiction in their
answer and even during the entire proceedings a quo. In the present case, Aquino cannot be allowed to attack
the jurisdiction of the MeTC after having participated in the proceedings without objecting.By Aquino’s failure
to seasonably object to the deficiency in the complaint, she is deemed to have waived any defect. The issue of
non-compliance should be pleaded in the answer.

As provided under Section 1, Rule 9 of the 1997 Rules of Civil Procedure:

Sec. 1. Defenses and objections not pleaded. – Defenses and objections not pleaded either in a motion to dismiss or in the
answer are deemed waived. However, when it appears from the pleadings or the evidence on record that the court has no jurisdiction
over the subject matter, that there is another action pending between the same parties for the same cause, or that the action is barred by
a prior judgment or by statute of limitations, the court shall dismiss the claim.

Rule 15: Sec. 8. Omnibus Motion. - Subject to the provisions of Section 1 of Rule 9, a motion attacking
a pleading, order, judgment, or proceeding shall include all objections then available, and all objections not so
included shall be deemed waived.
 (2) No, jurisdiction in ejectment cases is determined by the allegations pleaded in the complaint. As long
as these allegations demonstrate a cause of action either for forcible entry or for unlawful detainer, the court
acquires jurisdiction over the subject matter.Rule 70 of the Rules of Court: Section 1. Who may institute
proceedings, and when. – Subject to the provisions of the next succeeding section, a person deprived of the
possession of any land or building by force, intimidation, threat, strategy, or stealth, or a lessor, vendor, vendee,
or other person against whom the possession of any land or building is unlawfully withheld after the expiration
or termination of the right to hold possession, by virtue of any contract, express or implied, or the legal
representatives or assigns of any such lessor, vendor, vendee, or other person may at any time within one (1)
year after such unlawful deprivation or withholding of possession, bring an action in the proper Municipal Trial
Court against the person or persons unlawfully withholding or depriving of possession, or any person or persons
claiming under them, for the restitution of such possession, together with damages and costs.The law provides
instead that when the question of possession cannot be resolved without deciding the issue of ownership, the
issue of ownership shall be resolved only to determine the issue of possession
 Crisanta Alcaraz Miguel v. Jerry D. Montanez.
G.R. No. 191336. January 25, 2012.

Facts: On February 1, 2001, respondent Jerry Montanez (Montanez) secured a loan of (P143,864.00),
payable in one (1) year, or until February 1, 2002, from the petitioner, Crisanta Alcaraz Miguel. The respondent
gave as collateral therefor his house and lot located at Block 39 Lot 39 Phase 3, Palmera Spring, Bagumbong,
Caloocan City.

Due to the respondents failure to pay the loan, the petitioner filed a complaint against the respondent
before the Lupong Tagapamayapa of Barangay San Jose, Rodriguez, Rizal. The parties entered into a
Kasunduang Pag-aayos wherein the respondent agreed to pay his loan in installments in the amount of Two
Thousand Pesos (P2,000.00) per month, and in the event the house and lot given as collateral is sold, the
respondent would settle the balance of the loan in full. However, the respondent still failed to pay, and on
December 13, 2004, the Lupong Tagapamayapa issued a certification to file action in court in favor of the
petitioner.

On April 7, 2005, the petitioner filed before the Metropolitan Trial Court (MeTC) of Makati City,
Branch 66, a complaint for Collection of Sum of Money. In his Answer with Counterclaim, the respondent
raised the defense of improper venue considering that the petitioner was a resident of Bagumbong, Caloocan
City while he lived in San Mateo, Rizal.

MTC rendered the decision in favor of petitioner. Upon appeal, RTC affirmed. CA granted the petition
of the respondent, reversing and setting aside the judgment made RTC. A new judgment is entered dismissing
respondents complaint for collection of sum of money, without prejudice to her right to file the necessary action
to enforce the Kasunduang Pag-aayos.

The CA went on saying that since the parties entered into a Kasunduang Pag-aayos before the Lupon ng
Barangay, such settlement has the force and effect of a court judgment, which may be enforced by execution
within six (6) months from the date of settlement by the Lupon ng Barangay, or by court action after the lapse
of such time. Considering that more than six (6) months had elapsed from the date of settlement, the CA ruled
that the remedy of the petitioner was to file an action for the execution of the Kasunduang Pag-aayos in court
and not for collection of sum of money. Consequently, the CA deemed it unnecessary to resolve the issue on
venue.

Issues: (1) Whether or not a complaint for sum of money is the proper remedy for the petitioner,
notwithstanding the Kasunduang Pag-aayos.

(2) Whether or not the CA should have decided the case on the merits 
rather than remand the case for
the enforcement of the Kasunduang Pag-aayos.
 Ruling: (1) Yes. Because the respondent failed to comply with the terms of the Kasunduang Pag-aayos,
said agreement is deemed rescinded pursuant to Article 2041 of the New Civil Code and the petitioner can insist
on his original demand. Perforce, the complaint for collection of sum of money is the proper remedy.

The petitioner points out that the cause of action did not arise from the Kasunduang Pag-aayos but on
the respondents breach of the original loan agreement. This Court agrees with the petitioner. It is true that an
amicable settlement reached at the barangay conciliation proceedings, like the Kasunduang Pag-aayos in this
case, is binding between the contracting parties and, upon its perfection, is immediately executory insofar as it
is not contrary to law, good morals, good 
customs, public order and public policy.

This is in accord with the broad precept of Article 2037 of the Civil Code, viz:
A compromise has upon the parties the effect and authority of res judicata; but there shall be no execution except in
compliance with a judicial compromise.

Being a by-product of mutual concessions and good faith of the parties, an amicable settlement has the
force and effect of res judicata even if not judicially approved.

It must be emphasized, however, that enforcement by execution of the amicable settlement, either under
the first or the second remedy, is only applicable if the contracting parties have not repudiated such settlement
within ten (10) days from the date thereof in accordance with Section 416 of the Local Government Code. If the
amicable settlement is repudiated by one party, either expressly or impliedly, the other party has two options,
namely, to enforce the compromise in accordance with the Local Government Code or Rules of Court as the
case may be, or to consider it rescinded and insist upon his original demand. This is in accord with Article 2041
of the Civil Code, which qualifies the broad application of Article 2037, viz:
If one of the parties fails or refuses to abide by the compromise, the other party may either enforce the
compromise or regard it as rescinded and insist upon his original demand.

In the case of Leonor v. Sycip, the Supreme Court (SC) had the occasion to explain this provision of
law. It ruled that Article 2041 does not require an action for rescission, and the aggrieved party, by the breach of
compromise agreement, may just consider it already rescinded.

In the instant case, the respondent did not comply with the terms and conditions of the Kasunduang Pag-
aayos. Such non-compliance may be construed as repudiation because it denotes that the respondent did not
intend to be bound by the terms thereof, thereby negating the very purpose for which it was executed.

(2) Yes. Considering that the Kasunduang Pag-aayos is deemed rescinded by the non-compliance of the
respondent of the terms thereof, remanding the case to the trial court for the enforcement of said agreement is
clearly unwarranted.
 Remedio Flores v. Hon. Judge Heila Mallare-Phillipps, Ignacio Binongcal and Fernando Calion
G.R. No. L-66620. September 24, 1986.

Facts: Petitioner Flores appealed by certiorari to the Supreme Court the order of Respondent Judge
Mallare-Phillipps of RTC Baguio in dismissing the former's complaint for lack of jurisdiction. As the records
show, the complaint consists of two causes of action; the first was against Ignacio Binongcal who refused to pay
the truck tires amounting to P11,643 which he purchased from Petitioner Flores in separate ocassions from
August-October 1981; and the second was against Fernando Callion who also refused to pay an amount of
P10,212 representing the cost of truck tires that he also bought from the petitioner.

Respondent Binongcal moved to dismiss the complaint on the ground of lack of jurisdiction since the
amount being demanded against him does not fall under the jurisdiction of the regional trial court pursuant to
Sec.19(8) of BP Blg.129 which provides that the RTC will only have jurisdiction if the amount being claimed
exceeds P20,000. He also alleged that his transaction with the Petitioner is separate and distinct from that of his
co-defendant Calion. During the Hearing on the Motion to Dismiss, Respondent Callion joined in moving for
the dismissal of the complaint for the same ground of lack of jurisdiction. Thereafter, Respondent Judge Mallare
Phillipps rendered a decision dismissing the complaint of Petitioner Flores.Petitioner maintains that the RTC
has the jurisdiction over the casd followinf the 'novel' totality rule introduced in Sec.33 of BP 129 and Sec.11 of
Interim Rules.The pertinent portion of Section 33(l) of BP129 reads as follows:

... Provided,That where there are several claims or causes of action between the same or different parties, embodied in the
same complaint, the amount of the demand shall be the totality of the claims in all the causes of action, irrespective of whether the
causes of action arose out of the same or different transactions. ...

Section 11 of the Interim Rules provides thus:Application of the totality rule - In actions where the
jurisdiction of the court is dependent on the amount involved, the test of jurisdiction shall be the aggregate sum
of all the money demands, exclusive only of interest and costs, irrespective of whether or not the separate
claims are owned by or due to different parties. If any demand is for damages in a civil action, the amount
thereof must be specifically alleged.

Issues: (1) Whether or not the trial court's order of dismissing the case is proper.

(2) Whether or not the trial court correctly ruled on the application of permissive joinder of parties under
the Rules of Court.

Rulinh: (1) Yes. The trial court's decision in dismissing the case is proper. In cases of permissive
joinder of parties, whether as plaintiffs or as defendants, under Section 6 of Rule 3, the total of all the claims
shall now furnish the jurisdictional test. Needless to state also, if instead of joining or being joined in one
complaint separate actions are filed by or against the parties, the amount demanded in each complaint shall
furnish the jurisdictional test.In the case at bar, the lower court correctly held that the jurisdictional test is
subject to the rules on joinder of parties pursuant to Section 5 of Rule 2 and Section 6 of Rule 3 of the Rules of
Court and that, after a careful scrutiny of the complaint, it appears that there is a misjoinder of parties for the
reason that the claims against respondents Binongcal and Calion are separate and distinct and neither of which
falls within its jurisdiction of the RTC.

Section 6 of Rule 3 which provides as follows: Permissive joinder of parties.-All persons in whom or
against whom any right to relief in respect to severally, or in the alternative, may, except as otherwise provided
in these rules, join as plaintiffs or be joined as defendants in one complaint, where any question of law or fact
common to all such plaintiffs or to all such defendants may arise in the action; but the court may make such
orders as may be just to prevent any plaintiff or defendant from being embarrassed or put to expense in
connection with any proceedings in which he may have no interest.

Ramon Ching and Po Wing Properties v. Hon. Jansen Rodriguez et al.

G.R. NO. 192828. November 28, 2011

Facts: The private respondents filed a Complaint against the Ramon Ching (Ramon), Po Wing
Properties and Stronghold Insurance Company, Global Business Bank, Inc. (formerly PhilBank), Elena Tiu Del
Pilar, Asia Atlantic Resources Ventures, Inc., Registers of Deeds of Manila and Malabon, and all persons
claiming rights or titles from Ramon and his successors-in-interest.

In the Complaint, the respondents alleged the following as causes of action:

First Cause of Action.

1. They are the heirs of Lim San, also known as Antonio Ching / Tiong Cheng / Ching Cheng Suy
(Antonio).
2. Respondents Joseph Cheng (Joseph) and Jaime Cheng (Jaime) are allegedly the children of
Antonio with his common-law wife, respondent Mercedes Igne (Mercedes).
3. Respondent Lucina Santos (Lucina) claimed that she was also a common-law wife of Antonio.
4. The respondents averred that Ramon misrepresented himself as Antonio's and Lucina's son when
in truth and in fact, he was adopted and his birth certificate was merely simulated.
5. Antonio died of a stab wound. Police investigators identified Ramon as the prime suspect and he
now stands as the lone accused in a criminal case for murder filed against him. Warrants of arrest
issued against him have remained unserved as he is at large.
6. From the foregoing circumstances and upon the authority of Article 919of the New Civil Code
(NCC), the respondents concluded that Ramon can be legally disinherited, hence, prohibited
from receiving any share from the estate of Antonio.
Second Cause of Action.
1. Ramon misrepresented that there were only six real estate properties left by Antonio.
2. Ramon had illegally transferred to his name the titles to the said properties. Further, there are two
other parcels of land, cash and jewelries, plus properties in Hongkong, which were in Ramon's
possession.
Third Cause of Action.
1. Mercedes, being of low educational attainment, was sweet-talked by Ramon into surrendering to
him a Global Business Bank, Inc. (Global Bank) Certificate of Time Deposit of P4,000,000.00 in
the name of Antonio, and the certificates of title covering two condominium units in Binondo
which were purchased by Antonio using his own money but which were registered in Ramon's
name.
2. Ramon also fraudulently misrepresented to Joseph, Jaime and Mercedes that they will promptly
receive their complete shares, exclusive of the stocks in Po Wing Properties, Inc. (Po Wing),
 from the estate of Antonio. Exerting undue influence, Ramon had convinced them to execute an
Agreement which was not complied with.
3. Further, Lucina was not informed of the execution of the said instruments and had not received
any amount from Ramon. Hence, the instruments are null and void.
Fourth Cause of Action.
1. Antonio's 40,000 shares in Po Wing, which constitute 60% of the latter's total capital stock, were
illegally transferred by Ramon to his own name through a forged document of sale executed after
Antonio died.
2. Po Wing owns a ten-storey building in Binondo. Ramon's claim that he bought the stocks from
Antonio before the latter died is baseless. Further, Lucina's shares in Po Wing had also banished
into thin air through Ramon's machinations.
Fifth Cause of Action.
1. Ramon executed an Affidavit of Extra-Judicial Settlement of Estate adjudicating solely to
himself Antonio's entire estate to the prejudice of the respondents. By virtue of the said
instrument, new TCTs covering eight real properties owned by Antonio were issued in Ramon's
name.
2. Relative to the Po Wing shares, the Register of Deeds of Manila had required Ramon to post a
Surety Bond conditioned to answer for whatever claims which may eventually surface in
connection with the said stocks. Co-defendant Stronghold Insurance Company issued the bond in
Ramon's behalf.
Sixth Cause of Action.
1. Ramon sold Antonio's two parcels of land in Navotas to co-defendant Asia Atlantic Business
Ventures, Inc. Another parcel of land, which was part of Antonio's estate, was sold by Ramon to
co-defendant Elena Tiu Del Pilar at an unreasonably low price.
2. By reason of Ramon's lack of authority to dispose of any part of Antonio's estate, the
conveyances are null and void ab initio.

Since Ramon is at large, his wife, Belen Dy Tan Ching, now manages Antonio's estate. She has no intent
to convey to the respondents their shares in the estate of Antonio.The Amended Complaint, which impleaded
Metrobank as successor-in-interest of Global, also added a seventh cause of action relative to the existence of a
Certificate of Premium Plus Acquisition (CPPA) in the amount of P4,000,000.00 originally issued by PhilBank
to Antonio. The respondents prayed that they be declared as the rightful owners of the CPPA and that it be
immediately released to them. Alternatively, the respondents prayed for the issuance of a hold order relative to
the CPPA to preserve it during the pendency of the case.

Petitioners filed a Motion to Dismiss on the respondents' Amended Complaint on the alleged ground of
the RTC's lack of jurisdiction over the subject matter of the Complaint. The petitioners argued that since the
Amended Complaint sought the release of the CPPA to the respondents, the latter's declaration as heirs of
Antonio, and the propriety of Ramon's disinheritance, the suit partakes of the nature of a special proceeding and
not an ordinary action for declaration of nullity. Hence, jurisdiction pertains to a probate or intestate court and
not to the RTC acting as an ordinary court.

RTC issued an Order denying the petitioners' Motion to Dismiss on the ground that the action delves
mainly on the question of ownership of the properties described in the complaint. Also, the issue of
disinheritance can be fully settled after a trial on the merits. And at this stage, it has not been sufficiently
established whether or not there is a will. CA affirmed this decision.
 Issue: Whether or not the RTC should have granted Motion to Dismiss on the ground that the filiation
with Antonio of Ramon and the determination of the extent of Antonio's estate can only be resolved in a special
proceeding.

Ruling: NO, RTC ACTED CORRECTLY BY DENYING MOTION TO DISMISS.

Although the respondents' Complaint and Amended Complaint sought, among others, the disinheritance
of Ramon and the release in favor of the respondents of the CPPA now under Metrobank's custody, remains to
be an ordinary civil action, and not a special proceeding pertaining to a settlement court.

A special proceeding is a remedy by which a party seeks to establish a status, a right, or a particular fact.
It is distinguished from an ordinary civil action where a party sues another for the enforcement or protection of
a right, or the prevention or redress of a wrong. To initiate a special proceeding, a petition and not a complaint
should be filed.An action for reconveyance and annulment of title with damages is a civil action, whereas
matters relating to settlement of the estate of a deceased person such as advancement of property made by the
decedent, partake of the nature of a special proceeding, which concomitantly requires the application of specific
rules as provided for in the Rules of Court.

Under Article 916 of the NCC, disinheritance can be effected only through a will wherein the legal
cause therefor shall be specified. While the respondents in their Complaint and Amended Complaint sought the
disinheritance of Ramon, no will or any instrument supposedly effecting the disposition of Antonio's estate was
ever mentioned.

The petitioners argue that the prayers in the Amended Complaint, seeking the release in favor of the
respondents of the CPPA under Metrobank's custody and the nullification of the instruments subject of the
complaint, necessarily require the determination of the respondents' status as Antonio's heirs.It bears stressing
that what the respondents prayed for was that they be declared as the rightful owners of the CPPA which was in
Mercedes' possession prior to the execution of the Agreement and Waiver. The respondents also prayed for the
alternative relief of securing the issuance by the RTC of a hold order relative to the CPPA to preserve Antonio's
deposits with Metrobank during the pendency of the case. It can thus be said that the respondents' prayer
relative to the CPPA was premised on Mercedes' prior possession of and their alleged collective ownership of
the same, and not on the declaration of their status as Antonio's heirs.

Further, it also has to be emphasized that the respondents were parties to the execution of an
agreeement prayed to be nullified. Hence, even without the necessity of being declared as heirs of Antonio, the
respondents have the standing to seek for the nullification of the instruments in the light of their claims that
there was no consideration for their execution, and that Ramon exercised undue influence and committed fraud
against them.

In the event that the RTC will find grounds to grant the reliefs prayed for by the respondents, the only
consequence will be the reversion of the properties subject of the dispute to the estate of Antonio. Civil Case
No. 02-105251 was not instituted to conclusively resolve the issues relating to the administration, liquidation
and distribution of Antonio's estate, hence, not the proper subject of a special proceeding for the settlement of
the estate of a deceased person under Rules 73-91 of the Rules of Court.The respondents' resort to an ordinary
civil action before the RTC may not be strategically sound, because a settlement proceeding should thereafter
still follow, if their intent is to recover from Ramon the properties alleged to have been illegally transferred in
his name. Be that as it may, RTC cannot be restrained from taking cognizance of respondents' Complaint and
Amended Complaint as the issues raised and the prayers indicated therein are matters which need not be
threshed out in a special proceeding.
Paglaum Management and Development Corp. and Health Marketing Technologies, Inc., v. Union Bank
of the Philippines, Notary Public John Doe, and
Register of Deeds of Cebu City and Cebu Province
G.R. No. 179018. April 17, 2013.

Facts: In 1994, Union Bank of the Philippines extended HealthTech a credit line in the amount of ₱10
Million. To secure the obligation, PAGLAUM executed three Real Estate Mortgages over its three real
properties in Cebu Province on behalf of HealthTech and in favor of Union Bank.

The original contract states that the venue of all suits and actions shall be commenced in “Makati, Metro
Manila, or in the place where any of the Mortgaged Properties is located, at the absolute option of the
Mortgagee, the parties hereto waiving any other venue.” Health Tech and Union Bank thereafter increased the
credit line but omitted Makati City as the venue in the subsequent agreements.

In 1997, financial crisis badly hit Health Tech’s business which made it difficult for Health Tech to meet
its obligations. A restructuring agreement was entered stating that all actions shall be commenced in in Makati
City, with both parties waiving any other venue.

Health Tech defaulted still. Union Bank extrajudicially foreclosed the three mortgaged properties.
Health Tech thereafter filed a Complaint for Annulment of Sale and Titles with Damages before the RTC of
Makati City.

Union Bank filed a motion to dismiss based on improper venue, among others. The RTC dismissed the
case. The Court of Appeals affirmed the decision of the trial court.

Issue: Whether or not Makati City is the proper venue to assail the foreclosure of the subject real estate
mortgage.

Ruling: YES. The complaint filed in this case is a real action. Accordingly, Sec. 1, Rule 4 provides that
the said case should be tried “in the proper court which has jurisdiction over the area wherein the real property
involved, or a portion thereof, is situated.”

But Sec. 3 (b), Rule 4 allows real actions to bee commenced and tried in a court other than where the
property is situated in instances where the parties have previously and validly agreed in writing on the exclusive
venue thereof.

In this case, such an agreement exist. The Restructuring Agreement clearly reveals the intention of the
parties to implement a restrictive venue stipulation, which applies not only to the principal obligation, but also
to the mortgages. The phrase waiving any other venue plainly shows that the choice of Makati City as the venue
for actions arising out of or in connection with the Restructuring Agreement and the Collateral, with the Real
Estate Mortgages being explicitly defined as such, is exclusive.
 Note that in the absence of qualifying or restrictive words, the venue stipulation should only be deemed
as an agreement on an additional forum, and not as a restriction on a specified place. This is not the case here
based on the words “waiving any other venue.”

Sps. Domingo M. Belen and Dominga P. Belen vs. Hon. Pablo R. Chavez et al.
G.R. No. 175334. March 26, 2008.

Facts: Spouses Silvestre and Patricia Pacleb filed a petition against spouses Domingo and Dominga
Belen before the RTC of Rosario, Batangas. It was alleged that spouses Pacleb secured a judgment by default in
a case rendered by a Judge John W. Green of the Superior Court of the State of California. In this judgment,
spouses Belen were ordered to pay spouses Pacleb the amount of $56,204.69 representing loan repayment and
share in the profits plus interest and costs of suit. The summons was served on spouses Belen’s address in San
Gregorio, Alaminos, Laguna, and was received by Marcelo M. Belen.

Atty. Reynaldo Alcantara entered his appearance as counsel for spouses Belen and subsequently filed an
answer alleging that they were actually residents of California, USA. In the answer it was also claimed that their
liability had been extinguished by a release of abstract judgment issued in the same collection case.

Spouses Belen failed to attend the scheduled pre-trial conference, and because of this, the RTC ordered
the ex parte presentation of evidence for spouses Pacleb before the branch clerk of court. Atty. Alcantara filed a
motion to dismiss, citing the judgment of dismissal issued by the Superior Court of the State of California,
which allegedly dismissed the case before it involving the same parties.

The RTC denied the motion to dismiss. Through a motion, Atty. Alcantara sought the reinstatement of
the motion to dismiss by attaching a copy of the said foreign judgment. Spouses Pacleb on the other hand filed a
motion for the amendment of the complaint. The amended complaint averred that they were constrained to
withdraw their complaint against spouses Belen from the California court because of the prohibitive cost of
litigation, which withdrawal was favorably considered by said court.

Spouses Belen and Atty. Alcantara failed to appear at the rescheduled pre-trial conference. The RTC
therefore declared them in default and allowed Spouses Pacleb to present evidence ex parte.Following this,
Atty. Alcantara passed away without the RTC being informed of such fact.On 5 August 2003, the RTC rendered
a Decision ordering spouses Belen to pay spouses Pacleb.A copy of the RTC decision intended for Atty.
Alcantara was returned with the notation “Addressee Deceased.” A copy of the RTC decision was then sent to
the purported address of petitioners in San Gregorio, Alaminos, Laguna and was received by a certain Leopoldo
Avecilla.After the promulgation of the RTC decision, Spouses Pacleb filed an ex parte motion for preliminary
attachment. Afterward, RTC directed the issuance of a writ of execution. the real properties belonging to
spouses Belen were levied upon and the public auction.Subsequently, Atty. Carmelo B. Culvera entered his
appearance as counsel for Spouses Belen. He then filed a Motion to Quash Writ of Execution, and Atty. Culvera
averring that he received a copy thereof only on 29 December 2003 subsequently filed A Notice of Appeal from
the RTC Decision.The RTC denied the motion and Atty. Culvera’s subsequent motion for reconsideration of
said order. Spouses Belen then filed a Rule 65 petition before the Court of Appeals.

The Court of Appeals dismissed the Petition for Certiorari.Spouses Belen appealed before the Supreme
Court, which it denied because it is not accompanied by a valid verification and certification of non-forum
shopping. They sought reconsideration, which the Court granted. The Court also ordered the reinstatement of
the petition and the filing of a comment.

Issues: (1) Whether or not the RTC acquired jurisdiction over the persons of spouses Belen through
either the proper service of summons or the appearance of the late Atty. Alcantara on behalf of petitioners.

(2) WON there was a valid service of the copy of the RTC decision on them.

Ruling: (1) Yes, RTC acquired jurisdiction over spouses Belen. Courts acquire jurisdiction over the
plaintiffs upon the filing of the complaint. On the other hand, jurisdiction over the defendants in a civil case is
acquired either through the service of summons upon them or through their voluntary appearance in court and
their submission to its authority. Jurisdiction over the person of a resident defendant who does not voluntarily
appear in court can be acquired by personal service of summons. If he cannot be personally served, substituted
service may be made. If he is temporarily out of the country, any of the following modes of service may be
resorted to: (1) substituted service; (2) personal service outside the country, with leave of court; (3) service by
publication, also with leave of court; or (4) any other manner the court may deem sufficient.

However, in an action in personam in which the defendant is a non-resident who does not voluntarily
submit himself to the authority of the court, personal service of summons within the state is essential to the
acquisition of jurisdiction over his person. This is only possible if the defendant is physically present in the
country. Otherwise, the court cannot acquire jurisdiction over his person and therefore cannot validly try and
decide the case against him.

On the other hand, in a proceeding in rem or quasi in rem, jurisdiction over the person of the defendant
is not a prerequisite to confer jurisdiction on the court provided that the court acquires jurisdiction over the res.
Nonetheless, summons must be served upon the defendant not for the purpose of vesting the court with
jurisdiction but merely for satisfying the due process requirements. Thus, where the defendant is a non-resident
who is not found in the Philippines and (1) the action affects the personal status of the plaintiff; (2) the action
relates to, or the subject matter of which is property in the Philippines in which the defendant has or claims a
lien or interest; (3) the action seeks the exclusion of the defendant from any interest in the property located in
the Philippines; or (4) the property of the defendant has been attached in the Philippines—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.

The action filed against spouses Belen is for the enforcement of a foreign judgment in a complaint for
breach of contract whereby they were ordered to pay spouses Pacleb the monetary award. It is in the nature of
an action in personam because the latter are suing to enforce their personal rights under said judgment. As such,
jurisdiction over the person of the defendant who does not voluntarily submit himself to the authority of the
court is necessary for the court to validly try and decide the case through personal service or, if this is not
possible and he cannot be personally served, substituted service. In this case, spouses Belen have been
permanent residents of California, U.S.A. since the filing of the action up to the present. In the answer, Atty.
Alcantara had already averred that petitioners were residents of California, U.S.A. and that he was appearing
only upon the instance of petitioners’ relatives. Moreover, private respondents’ attorney­in­fact, Joselito
Rioveros, testified that he knew petitioners to be former residents of Alaminos, Laguna but are now living in
California, U.S.A. However, Spouses Belen voluntarily submitted themselves through Atty. Alcantara to the
jurisdiction of the RTC, by allowing him to file motions and pleadings.

(2) No, there was no valid service of the copy of the decision of the RTC. As a general rule, when a
party is represented by counsel of record, service of orders and notices must be made upon said attorney and
notice to the client and to any other lawyer, not the counsel of record, is not notice in law. The exception to this
rule is when service upon the party himself has been ordered by the court. In this case, a copy of the RTC
decision was sent first to Atty. Alcantara, petitioners’ counsel of record, but it was returned unserved in view of
the demise of Atty. Alcantara. Thus, a copy was subsequently sent to petitioners’ “last known address in San
Gregorio, Alaminos, Laguna,” which was received by a certain Leopoldo Avecilla. The subsequent service on
petitioners’ purported “last known address” by registered mail is defective because it does not comply with the
requisites on service by registered mail, which presupposes that the present address of the party is known, and
the person receiving it must be authorized to receive such service. Since the filing of the complaint, petitioners
could not be physically found in the country because they had already become permanent residents of
California, U.S.A. The service of the RTC decision at spouses Belen’s former address in Alaminos, Laguna is
defective and does not bind petitioners.
Planters Development Bank v. Julie Chandumal.
G. R. No. 195619. September 5, 2012.

Facts: The instant case stemmed from a contract to sell a parcel of land with improvements, between BF
Homes, Inc. (BF Homes) and herein respondent Julie Chandumal (Chandumal). The property subject of the
contract is located in Talon Dos, Las Piñas City.

Chandumal paid her monthly amortizations from December 1990 until May 1994 when she began to
default in her payments. In a Notice of Delinquency and Rescission of Contract with Demand to Vacate4 dated
July 14, 1998, PDB gave Chandumal a period of thirty (30) days from receipt within which to settle her
installment arrearages together with all its increments; otherwise, all her rights under the contract shall be
deemed extinguished and terminated and the contract declared as rescinded. Despite demand, Chandumal still
failed to settle her obligation.

On June 18, 1999, an action for judicial confirmation of notarial rescission and delivery of possession
was filed by PDB against Chandumal. PDB alleged that despite demand, Chandumal failed and/or refused to
pay the amortizations as they fell due; hence, it caused the rescission of the contract by means of notarial act.
According to PDB, it tried to deliver the cash surrender value of the subject property in the amount of P
10,000.00; however, the defendant was unavailable for such purpose.

Consequently, summons was issued and served by deputy sheriff Roberto T. Galing (Sheriff Galing).
According to his return, Sheriff Galing attempted to personally serve the summons upon Chandumal on July 15,
19 and 22, 1999 but it was unavailing as she was always out of the house on said dates. Hence, the sheriff
caused substituted service of summons on August 5, 1999 by serving the same through Chandumal’s mother
who acknowledged receipt thereof.

For her failure to file an answer within the prescribed period, PDB filed an ex parte motion to declare
Chandumal in default. And on January 12, 2001, the RTC issued an Order granting the motion of PDB.

On February 23, 2001, Chandumal filed an Urgent Motion to Set Aside Order of Default and to Admit
Attached Answer. She maintained that she did not receive the summons and/or was not notified of the same.
She further alleged that her failure to file an answer within the reglementary period was due to fraud, mistake or
excusable negligence. Chandumal alleged the following defenses: (a) contrary to the position of PDB, the latter
did not make any demand for her to pay the unpaid monthly amortization; and (b) PDB did not tender or offer
to give the cash surrender value of the property in an amount equivalent to fifty percent (50%) of the actual total
payment made, as provided for under Section 3(b) of R.A. No. 6552. Moreover, Chandumal claimed that since
the total payment she made amounts to P 782,000.00, the corresponding cash surrender value due her should be
P391,000.00.

The RTC denied Chandumal’s motion to set aside the order of default. Her motion for reconsideration
was also denied for lack of merit.11 Hence, the RTC allowed PDB to present its evidence ex parte.
 On May 31, 2004, the RTC rendered a Decision13 in favor of PDB.

Chandumal appealed to the CA. The CA, without ruling on the propriety of the judicial confirmation of
the notarial rescission, rendered the assailed decision nullifying the RTC decision due to invalid and ineffective
substituted service of summons.

PDB filed a motion for reconsideration but the CA in its Resolution dated February 16, 2011 denied it.

Issues: (1) Whether or not there was a valid substituted service of summons.

(2) Whether or not Chandumal voluntarily submitted to the jurisdiction of the trial.court.

Ruling: (1) There was no valid substituted service of summons.

In this case, the sheriff resorted to substituted service of summons due to his failure to serve it
personally. In Manotoc v. Court of Appeals, the Court detailed the requisites for a valid substituted service of
summons, summed up as follows: (1) impossibility of prompt personal service – the party relying on substituted
service or the sheriff must show that the defendant cannot be served promptly or there is impossibility of
prompt service; (2) specific details in the return – the sheriff must describe in the Return of Summons the facts
and circumstances surrounding the attempted personal service; (3) a person of suitable age and discretion – the
sheriff must determine if the person found in the alleged dwelling or residence of defendant is of legal age, what
the recipient’s relationship with the defendant is, and whether said person comprehends the significance of the
receipt of the summons and his duty to immediately deliver it to the defendant or at least notify the defendant of
said receipt of summons, which matters must be clearly and specifically described in the Return of Summons;
and (4) a competent person in charge, who must have sufficient knowledge to understand the obligation of the
defendant in the summons, its importance, and the prejudicial effects arising from inaction on the summons.

In applying the foregoing requisites in the instant case, the CA correctly ruled that the sheriff’s return
failed to justify a resort to substituted service of summons. According to the CA, the Return of Summons does
not specifically show or indicate in detail the actual exertion of efforts or any positive step taken by the officer
or process server in attempting to serve the summons personally to the defendant. The return merely states the
alleged whereabouts of the defendant without indicating that such information was verified from a person who
had knowledge thereof.25 Indeed, the sheriff’s return shows a mere perfunctory attempt to cause personal
service of the summons on Chandumal. There was no indication if he even asked Chandumal’s mother as to her
specific whereabouts except that she was "out of the house", where she can be reached or whether he even tried
to await her return. The "efforts" exerted by the sheriff clearly do not suffice to justify substituted service and
his failure to comply with the requisites renders such service ineffective.

(2) Yes, respondent voluntarily submitted to the jurisdiction of the trial court.

Despite that there was no valid substituted service of summons, the Court, nevertheless, finds that
Chandumal voluntarily submitted to the jurisdiction of the trial court.

Section 20, Rule 14 of the Rules of Court states:

Sec. 20. Voluntary appearance. – The defendant’s voluntary appearance in the action shall be equivalent to service of
summons. The inclusion in a motion to dismiss of other grounds aside from lack of jurisdiction over the person of the defendant shall
not be deemed a voluntary appearance.

When Chandumal filed an Urgent Motion to Set Aside Order of Default and to Admit Attached Answer,
she effectively submitted her person to the jurisdiction of the trial court as the filing of a pleading where one
seeks an affirmative relief is equivalent to service of summons and vests the trial court with jurisdiction over the
defendant’s person. Thus, it was ruled that the filing of motions to admit answer, for additional time to file
answer, for reconsideration of a default judgment, and to lift order of default with motion for reconsideration is
considered voluntary submission to the trial court’s jurisdiction.27 The Court notes that aside from the
allegation that she did not receive any summons, Chandumal’s motion to set aside order of default and to admit
attached answer failed to positively assert the trial court’s lack of jurisdiction. In fact, what was set forth therein
was the substantial claim that PDB failed to comply with the requirements of R.A. No. 6552 on payment of cash
surrender value,28 which already delves into the merits of PDB’s cause of action. In addition, Chandumal even
appealed the RTC decision to the CA, an act which demonstrates her recognition of the trial court’s jurisdiction
to render said judgment.

Given Chandumal’s voluntary submission to the jurisdiction of the trial court, the RTC, Las Piñas City,
Branch 255, had all authority to render its Decision dated May 31, 2004. The CA, therefore, erred in nullifying
said RTC decision and dispensing with the resolution of the substantial issue raised herein, i.e., validity of the
notarial rescission. Instead, however, of remanding this case to the CA, the Court will resolve the same
considering that the records of the case are already before us and in order to avoid any further delay.
 Yu vs. Pacleb, etc.
G.R. No. 172172. February 24, 2009.

Facts: Respondent Baltazar N. Pacleb and his late first wife, Angelita Chan, are the registered owners of
a parcel of land, which became the subject of three (3) documents purporting to transfer its ownership. a Deed
of Absolute Sale was entered into between Spouses Baltazar N. Pacleb and Angelita Chan and Rebecca Del
Rosario. Subsequently, a Deed of Absolute Sale was entered into between Rebecca Del Rosario and Ruperto L.
Javier (Javier), and thereafter a Contract to Sell was entered into between Javier and petitioner spouses Ernesto
V. Yu and Elsie Ong Yu. Javier undertook to deliver possession of the Langcaan Property and to sign a deed of
absolute sale within thirty (30) days from execution of the contract. All these aforementioned sales were not
registered.

Petitioner spouses Yu filed with the Regional Trial Court a Complaint for specific performance and
damages against Javier to compel the latter to deliver to them ownership and possession, as well as title to the
subject property. In their Complaint, they alleged that Javier represented to them that the Langcaan Property
was not tenanted. However, when they had already paid an initial payment, they discovered that the land was
tenanted by one Ramon Pacleb. Thereafter, petitioner spouses and Javier verified from Ramon if he was willing
to vacate the property and the latter was agreeable. Javier then promised to make arrangements with Ramon to
vacate the property and to pay the latter his disturbance compensation. Hence, they proceeded to enter into a
Contract to Sell canceling the Agreement mentioned. However, Javier failed to comply with his obligations.
Javier did not appear in the proceedings and was declared in default. Judgment was eventually rendered against
him by the RTC, and the same attained finality. Petitioner spouses and Ramon Pacleb and the latter’s wife, then
executed an agreement whereby petitioner spouses paid Ramon the amount of P500,000 in exchange for the
waiver of his tenancy rights over the property.

Respondent filed a Complaint for annulment of deed of sale and other documents arising from it. He
alleged that the deed of sale purportedly executed between him and his late first wife and Rebecca Del Rosario
was spurious as their signatures thereon were forgeries. Respondent moved to have summons served upon
Rebecca Del Rosario by publication since the latter’s address could not be found. The trial court, however,
denied his motion. Respondent then moved to dismiss the case, and the trial court granted the motion dismissing
the case without prejudice. Thereafter, on November 23, 1995, petitioner spouses filed an action for forcible
entry against respondent with the Municipal Trial Court (MTC). They alleged that they had prior physical
possession of the property through their trustee, Ramon, until the latter was ousted by respondent. MTC ruled in
favor of petitioner spouses, which decision was affirmed by the Regional Trial Court. However, the Court of
Appeals set aside the decisions of the lower courts and found that it was respondent who had prior physical
possession of the property as shown by his payment of real estate taxes thereon. Respondent then filed the
instant case for removal of cloud from title with damages of the subject property. Respondent alleged that the
deed of sale between him and his late first wife and Rebecca Del Rosario, who is not known to them, could not
have been possibly executed on the date appearing thereon. He alleged that on said date, he was residing in the
United States and his late first wife, Angelita Chan, died twenty years ago.
 During the pendency of the instant case before the trial court, respondent died without having testified
on the merits of his case. Hence, he was substituted by his surviving spouse. Subsequently, trial court dismissed
respondent’s case and held that petitioner spouses are purchasers in good faith. Further, the trial court held that
the previous decision on petitioner spouses’ action for specific performance against Javier is already final and
can no longer be altered. Accordingly, the trial court ordered the cancellation of the certificate of title of the
property in the name of respondent and the issuance of a new title in the name of petitioner spouses. On appeal
by respondent, the Court of Appeals reversed and set aside the decision of the trial court. The Court of Appeals
ruled that petitioner spouses are not purchasers in good faith and that the previous decision did not transfer
ownership of the property to them.

Issue: Whether or not ownership over the subject property was properly vested in petitioner spouses by
virtue of the previous Decision in the specific performance case and such Decision is binding and conclusive to
the property as well as to the respondents.

Ruling: No. It has been held in an unbroken string of cases that an action for specific performance is an
action in personam. It is well-settled that an action for specific performance praying for the execution of a deed
of sale in connection with an undertaking in a contract, such as the contract to sell, in this instance, is an action
in personam. The action for specific performance and damages filed by petitioner spouses against Javier is to
compel performance of the latter’s undertakings under their Contract to Sell. As correctly held by the Court of
Appeals, its object is to compel Javier to accept the full payment of the purchase price, and to execute a deed of
absolute sale over the property in their favor. The obligations of Javier under the contract to sell attach to him
alone, and do not burden the subject property. Being a judgment in personam, it is binding only upon the parties
properly impleaded therein and duly heard or given an opportunity to be heard. Therefore, it cannot bind
respondent since he was not a party therein. Neither can respondent be considered as privy thereto since his
signature and that of his late first wife, Angelita Chan, were forged in the deed of sale.
 GOODLAND COMPANY, INC., petitioner, vs. ASIA UNITED BANK, CHRISTINE T. CHAN,
FLORANTE DEL MUNDO, ENGRACIO M. ESCASINAS, JR., in his official capacity as Clerk of Court
& Ex-Officio Sheriff in the Regional Trial Court of Makati City, NORBERTO B. MAGSAJO, in his
official capacity as Sheriff IV of the Regional Trial Court of Makati City, and RONALD A. ORTILE, in
his official capacity as the Register of Deeds for Makati City, respondents.
G.R. No. 195546. March 14, 2012.

GOODLAND COMPANY, INC., petitioner, vs. ASIA UNITED BANK, ABRAHAM CO, ATTY. JOEL
T. PELICANO AND THE REGISTER OF DEEDS OF MAKATI CITY, respondents.
G.R. No. 195561. March 14, 2012.

Facts: Sometime in July 1999, petitioner Goodland Company, Inc. (petitioner) mortgaged its two
parcels of land situated in Sta. Rosa, Laguna and covered by Transfer Certificate of Title (TCT) Nos. 321672
and 321673 (“Laguna Properties”). The Third Party Real Estate Mortgage (REM) secured the loans extended by
respondent Asia United Bank (“AUB”) to Radio Marine Network (Smartnet), Inc. (RMNSI), doing business as
Smartnet Philippines, under the latter’s P250,000,000.00 Omnibus Credit Line with AUB.

In addition to the aforesaid collaterals, petitioner executed a Third Party REM over its 5,801-square meter
property located at Pasong Tamo St., Makati City (“Makati Property”) covered by TCT No. 114645. The
REMs, both signed by Gilbert G. Guy, President of Goodland Company, Inc., were duly registered by AUB
with the Registry of Deeds for Calamba, Laguna and Registry of Deeds for Makati City, and annotated on the
said titles.

Subsequently, however, petitioner repudiated the REMs by claiming that AUB and its officers
unlawfully filled up the blank mortgage forms and falsified the entries therein. The Laguna properties were the
subject of two suits filed by petitioner to forestall their imminent foreclosure, and similar actions were likewise
instituted by petitioner involving the Makati property which is the subject of the present case.

However, the only subject of the present petition is the Makati Property. The Laguna Properties were the
subject of separate petitions.

Petitioner instituted two suits involving the Makati Property. The first suit filed by petitioner was an
action for an annulment of the REM covering the Makati Property on the ground of its fraudulent and irregular
execution and registration. (Civil Case No. 03-045). This action was filed before the Regional Trial Court
(RTC), Branch 56 of Makati City.

On the other hand, the second suit filed by petitioner prayed for injunctive relief and/or nullification of
the extrajudicial foreclosure sale which petitioner alleged to be procedurally and legally defective. (Civil Case
No. 06-1032). This action was filed before the RTC, Branch 145 of Makati City.

The RTC (Branch 145) issued an Order denying petitioner’s application for the issuance of a writ of
preliminary injunction, as well as respondents’ motion to dismiss based on forum shopping, non-payment of
correct docket fees and failure to state a cause of action. However, the court reserved the issuance of the
corresponding order requiring petitioner to pay the appropriate docket fees after respondents shall have
submitted what they believed should have been the correct computation thereof.

On motion of respondents, Civil Case No. 06-1032 was consolidated with Civil Case No. 03-045. Prior
to the consolidation, respondents moved to dismiss with prejudice the two cases on the grounds of forum
shopping, and that no jurisdiction was acquired by the RTC in Civil Case No. 03-045 for failure to pay the
proper docket and other legal fees.

In a Joint Order, the RTC (Branch 56) dismissed with prejudice the complaints in both cases. Petitioner
filed two separate motions for reconsideration, which the RTC likewise denied.

Petitioner again filed separate appeals before the Court of Appeals (CA), which were docketed under
only one case (CA-G.R. CV No. 90418). The appellate court sustained the dismissal made by trial court on the
ground of forum shopping, but not on the ground of improper docket and other legal fees.

Issue: Whether or not petitioner violated the rule against forum shopping.

Ruling: Yes. For forum shopping can be said to exist, the following must concur: (1) identity of parties,
or at least such parties as represent the same interests in both actions, (2) identity of rights asserted and relief
prayed for, the relief being founded on the same facts, and (3) the identity of the two preceding particulars is
such that any judgment rendered in the other action will, regardless of which party is successful, amount to res
judicata in the action under consideration. The Court ruled that these elements are present in the instant case.

There is identity of parties in the instant case notwithstanding that in the first case (Civil Case No. 03-
045), only one bank officer (Co), the notary public (Pelicano) and the Register of Deeds were impleaded along
with AUB as defendants, whereas in the second case (Civil Case No. 06-1032), AUB and its two officers (Chan
and Del Mundo), along with the RTC Clerk of Court (Escasinas, Jr.), Sheriff (Magsajo) and the Register of
Deeds of Makati City (Ortile) were the named defendants. The parties in both cases are substantially the same
as they represent the same interests and offices/positions, and who were impleaded in their respective capacities
with corresponding liabilities/duties under the claims asserted.

The prayer for relief in the two cases was based on the same attendant facts in the execution of REMs
over petitioner’s properties in favor of AUB. While the extrajudicial foreclosure of mortgage, consolidation of
ownership in AUB and issuance of title in the latter’s name were set forth only in the second case (Civil Case
No. 06-1032), these were simply the expected consequences of the REM transaction in the first case (Civil Case
No. 03-045). These eventualities are precisely what petitioner sought to avert when it filed the first case.
Undeniably then, the injunctive relief sought against the extrajudicial foreclosure, as well as the cancellation of
the new title in the name of the creditor-mortgagee AUB, were all premised on the alleged nullity of the REM
due to its allegedly fraudulent and irregular execution and registration—the same facts set forth in the first case.
In both cases, petitioner asserted its right as owner of the property subject of the REM, while AUB invoked the
rights of a foreclosing creditor-mortgagee.

With respect to identity of cause of action, a cause of action is defined in Section 2, Rule 2 of the Rules
of Court as the act or omission by which a party violates the right of another. The Court made reference to the
test in determining whether or not the causes of action in the first and second cases are identical, to wit: would
the same evidence support and establish both the present and former cause of action? If so, the former recovery
is a bar; if otherwise, it does not stand in the way of the former action.

In the first case, petitioner alleged the fraudulent and irregular execution and registration of the REM
which violated its right as owner who did not consent thereto, while in the second case petitioner cited further
violation of its right as owner when AUB foreclosed the property, consolidated its ownership and obtained a
new TCT in its name. Considering that the aforesaid violations of petitioner’s right as owner in the two cases
both hinge on the binding effect of the REM, i.e., both cases will rise or fall on the issue of the validity of the
REM, it follows that the same evidence will support and establish the first and second causes of action. The
procedural infirmities or non-compliance with legal requirements for extrajudicial foreclosure raised in the
second case were but additional grounds in support of the injunctive relief sought against the foreclosure which
was, in the first place, illegal on account of the mortgage contract’s nullity. Evidently, petitioner never relied
solely on the alleged procedural irregularities in the extrajudicial foreclosure when it sought the reliefs in the
second case.

Lastly, Under Sec. 7, Rule 5 of the Rules of Court:

The plaintiff is required under oath to certify, among others, his undertaking to report to the court the fact of filing of a
similar case, failing which shall be cause for the dismissal of the case, to wit:
“(c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that
fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed.
…non-compliance with any of the undertakings therein shall constitute indirect contempt of court, without prejudice to the
corresponding administrative and criminal actions. If the acts of the party or his counsel clearly constitute willful and
deliberate forum shopping, the same shall be ground for summary dismissal with prejudice and shall constitute direct
contempt, as well as a cause for administrative sanctions.”

The Court ruled that petitioner’s act of forum shopping was deliberate and malicious considering that it
knowingly filed Civil Case No. 06-1032 despite the pendency of Civil Case No. 03-045. This being the case, the
act of petitioner is punishable by and results in the summary dismissal of the actions filed. Both Civil Case No.
03-045 and Civil Case No. 06-1032 are therefore correctly dismissed with prejudice.
 Imelda Relucio vs. Angelina Mejia Lopez

Facts: Private respondent Angelina Mejia Lopez filed a petition for APPOINTMENT AS SOLE
ADMINISTRATRIX OF CONJUGAL PARTNERSHIP OF PROPERTIES, FORFEITURE, ETC., against
defendant Alberto Lopez and petitioner Imelda Relucioin a special proceeding. In the petition, private-
respondent alleged that sometime in 1968, defendant Lopez, who is legally married to the private respondent,
abandoned the latter and their four legitimate children; that he arrogated unto himself full and exclusive control
and administration of the conjugal properties, spending and using the same for his sole gain and benefit to the
total exclusion of the private respondent and their four children; that defendant Lopez, after abandoning his
family, maintained an illicit relationship and cohabited with herein petitioner since 1976.

It was further alleged that defendant Lopez and petitioner Relucio, during their period of cohabitation
since 1976, have amassed a fortune consisting mainly of stockholdings in Lopez-owned or controlled
corporations, residential, agricultural, commercial lots, houses, apartments and buildings, cars and other motor
vehicles, bank accounts and jewelry. In order to avoid defendant Lopez obligations as a father and husband, he
excluded the private respondent and their four children from sharing or benefiting from the conjugal properties
and the income or fruits therefrom. He placed substantial portions of these conjugal properties in the name of
petitioner Relucio.

On December 8, 1993, a Motion to Dismiss the Petition was filed by herein petitioner on the ground that
private respondent has no cause of action against her.

An Order dated February 10, 1994 was issued by the judge denying petitioner Relucio’s Motion to
Dismiss on the ground that she is impleaded as a necessary or indispensable party because some of the subject
properties are registered in her name and defendant Lopez, or solely in her name.

Issues: (1) Whether respondents petition for appointment as sole administratrix of the conjugal property,
accounting, etc. against her husband Alberto J. Lopez established a cause of action against petitioner.

(2) Whether petitioner’s inclusion as party defendant is essential in the proceedings for a complete
adjudication of the controversy.

Ruling: (1) No, the complaint is by an aggrieved wife against her husband.Nowhere in the allegations
does it appear that relief is sought against petitioner. Respondent’s causes of action were all against her
husband.

The first cause of action is for judicial appointment of respondent as administratrix of the conjugal
partnership or absolute community property arising from her marriage to Alberto J. Lopez. Petitioner is a
complete stranger to this cause of action. Article 128 of the Family Code refers only to spouses.

Art 128: “If a spouse without just cause abandons the other or fails to comply with his or her obligations
to the family, the aggrieved spouse may petition the court for receivership, for judicial separation of property, or
for authority to be the sole administrator of the conjugal partnership property xxx”
 Respondent alleges that Alberto J. Lopez is her husband. Therefore, her first cause of action is against
Alberto J. Lopez. There is no right-duty relation between petitioner and respondent that can possibly support a
cause of action.

The second cause of action is for an accounting by respondent husband. The accounting of conjugal
partnership arises from or is an incident of marriage.
Petitioner has nothing to do with the marriage between respondent Alberto J. Lopez. Hence, no cause of action
can exist against petitioner on this ground.
The third cause of action is essentially for forfeiture of Alberto J. Lopez share in property co-owned by
him and petitioner. It does not involve the issue of validity of the co-ownership between Alberto J. Lopez and
petitioner. The issue is whether there is basis in law to forfeit Alberto J. Lopez share.Respondents asserted right
to forfeit extends to Alberto J. Lopez share alone, such cause of action, however, pertains to Alberto J. Lopez,
not petitioner.The respondent also sought support. Support cannot be compelled from a stranger.

(2) No, petitioner would not be affected by any judgment in Special Proceeding.

If petitioner is not a real party in interest, she cannot be an indispensable party. An indispensable party is
one without whom there can be no final determination of an action. Petitioner’s participation in Special
Proceeding is not indispensable.The trial court can issue a judgment ordering Alberto J. Lopez to make an
accounting of his conjugal partnership with respondent, and give support to respondent and their children, and
dissolve Alberto J. Lopez conjugal partnership with respondent, and forfeit Alberto J. Lopez share in property
co-owned by him and petitioner. Such judgment would be perfectly valid and enforceable only against Alberto
J. Lopez.

In the context of her petition in the lower court, respondent would be accorded complete relief if Alberto
J. Lopez were ordered to account for his alleged conjugal partnership property with respondent, give support to
respondent and her children, turn over his share in the co-ownership with petitioner and dissolve his conjugal
partnership or absolute community property with respondent. Petitioner is not a necessary party because her
cause of action is against her husband, not the petitioner.
 JUANA COMPLEX I HOMEOWNERS ASSOCIATION, ET. AL., Petitioner
vs. FIL-ESTATE LAND INC., ET. AL., Respondent
G.R. NO. 152272. MARCH 5, 2012.

Facts: Juana Complex I together with its individual residents and other neighboring subdivisions
instituted a complaint for damages as a class suit representing the regular commuters and motorists of Juana
Complex I (Juana) and neighboring subdivisions who were deprived of the use of La Paz Road (Road) , against
Fil-Estate (Fil-Estate). The complaint alleged that Juana et.al. were regular commuters and motorists who
constantly travelled Road for more than ten years until Fil-Estate excavated and permanently closed the Road.

Juana prayed for the immediate issuance of a Temporary Restraining Order (TRO) or a writ of
preliminary injunction (WPI) to enjoin Fil-Estate from stopping and intimidating them in their use of the Roas.
A TRO was issued ordering Fil-Estate for 20 days to stop preventing or harassing Juana from using the Road.
The Regional Trial Court (RTC) conducted several hearings to determine the propriety of the issuance of WPI.
Fil-Estate filed a Motion to Dismiss arguing that complaint failed to state a cause of action and that it was
improperly files as a class suit. RTC granted WPI thus Fil-Estate filed a Motion for Reconsideration. RTC then
issued Omnibus Order denying both Motion to Dismiss and Motion for Reconsideration file by Fil-Estate. Not
satisfied, Fil-Estate filed a petition foe certiorari and prohibit before the Court of Appeals (CA) to annul the
Order and Omnibus Order issued by RTC contending that Juana failed to state a cause of action, improperly
filed class suit and failed to show that Juana had a clear and unmistakable right to the use of the Road since
Road was a Torrens registered private road and there was neither a voluntary nor legal easement constituted
over it. CA partially granted petition on the merit of the last contention. Hence, this petition for review.

Issues: (1) Whether or not the complaint states a cause of action;

(2) Whether the complaint has been properly filed as a class suit;

(3) Whether or not a WPI is warranted.

Ruling: (1) Yes, the complaint states a cause of action. Whether the complaint states a cause of action is
determined by its averments regarding the acts committed by the defendant. Thus, contains a concise statement
of the ultimate or essential facts constituting plaintiff’s cause of action. First, Juana’s averments show a
demandable right over Road. Second, there is an alleged violation of such right by Fil-Estate when they
excavated and prevented Juana from using it. Third, Juana consequently suffered injury.

(2) Yes, the complaint has been properly filed as a class suit. The necessary elements of a class suit are
present in this case namely: common interest, numerous parties affected and sufficient number of parties
bringing the class suit. The suit is clearly one that benefits all commuters and motorists who use the Road.

(3) No, the WPI is not warranted. A WPI under Sec. 3, Rule 58 is available to prevent a threatened or
continuous irremediable injury to parties before their claims can be thoroughly studied and adjudicated. The
requisites for its issuance are (1) existence of clear and unmistakable right that must be protected and (2) an
urgent and paramount necessity for the writ to prevent serious damage. Juana failed to establish a prima facie
proof of violation of their right to justify issuance of WPI. Their right to use the Road is disputable since Juana
has no clear legal right therein. Juana merely anchor their purported right over the Road on the bare allegation
that they use the Road for more than ten yeas. A mere allegation does not meet the standard of proof that would
warrant issuance of WPI.

Misamis Occidental II Cooperatives, Inc. Vs Virgilio S. David.

G.R. No. 129928. August 25,2005.

Facts: Private respondent Virgilio S. David, a supplier of electrical hardware, filed a case for specific
performance and damages against MOELCI II, a rural electric cooperative in Misamis Occidental. The case was
essentially a collection suit, predicated on a document attached as Annex A to the Amended Complaint that
according to David is the contract pursuant to which he sold to MOELCI II one unit of 10 MVA Transformer.

MOELCI II filed its Answer to Amended Complaint, affirmative defenses which constitutes grounds for
dismissal. These grounds were lack of cause of action, there being allegedly no enforceable contract between
the parties under the Statute of Frauds and improper venue. MOELCI II in essence argued that the document
attached as Annex A was only a quotation letter and not a contract as alleged by David. Thus, it contends that
David`s Amended Complaint is dismissible for failure to state a cause of action.

David contended in the main that because a motion to dismiss on the ground of failure to state a cause of
action is required to be based only on the allegations of the complaint, the “quotation letter”, being merely an
attachment to the complaint and not part of its allegations, cannot be inquired into.

MOELCI II filed a rejoinder to the opposition in which it asserted that a complaint cannot be separated
from its annexes; hence the trial court in resolving a motion to dismiss on the ground of failure to state a cause
of action must consider the complaint`s annexes.

The RTC, issued an order denying MOELCI II`s motion for preliminary hearing of affirmative defenses.
The Court of Appeals dismissed MOELCI II`s petition holding that the allegations in David`s complaint
constitutes a cause of action.

Petitioner is now before the Supreme Court seeking a review of the appelate court`s pronouncements,
MOELCI II asserts that the Court of Appeals committed serious error in: 1) ruling that the resolution of its
motion to dismiss on the ground for lack of cause of action necessitated hearing by the trial court with the end
in view of determining whether or not the document attached as Annex A to the Amended Complaint is a
contract as alleged in the body of the pleading; and 2) not ordering the trial court to dismiss the amended
complaint on the lack of cause of action.

Issue: Whether the Court of Appeals erred in dismissing the petition for certiorari and in holding that
the trial court did not commit grave abuse of discretion in denying petitioner`s Motion.

Ruling: There is no error in the ruling of the Court of Appeals.

Under the old Rules of Court a preliminary hearing permitted under Section 5, Rule 16, is not a
mandatory even when the same is prayed for. It rests largely on the sound dicretion of the court. Such
interpretation is now specifically expressed in the 1997 Rules of Civil Procedure. Section 6, Rule 16 provides
that a grant of preliminary hearing rests on the sound discretion of the court.
 Moreover, as MOELCI II`s Motion is anchored on the ground that the Complaint allegedly stated no
cause of action, a preliminary hearing thereon is more than unnecessary as it constitutes an erroneous and
improvident move. No error therefore could be ascribed to the trial court in the denial of such Motion.

To determine the existence of a cause of action, ony the statements in the complaint may be properly
considered. It is error for the court to take cognizance of external facts of hold preliminary hearing to determine
their existence. If the allegations in a complaint furnish sufficient basis by which the complaint can be
maintained, the same should not be dismissed regardless of the defenses that may be averred by the defendants.

The test of sufficiency of facts alleged in the complaint as constituting a cause of action is whether or
not admitting the facts alleged, the court could render a valid verdict in accordance with the prayer of said
complaint.

It has been hypothetically admitted that the parties had entered into a contract sale, David bound himself
to supply petitioner 1 unit of MVA Power transformer plus 69 KV Line Accessories; that despite written and
verbal demands, petitioner has failed to pay the price thereof.

Contrary to MOELCI II`s assertion, Annex A is not an “undisguied quotation letter”. While Annex A is
captioned as such, the presence of the signatures of both the General Manager and the Chairman of the
Committee of Management immediately below the word “CONFORME” appearing on the document`s last
page lends credulity to David`s contention that there was, or might have been, a meeting of minds on the terms
embodied therein. Thus, the appendage of Annex A does not entirely serve to snuff out David`s claim.

Finally, we do not agree with MOELCI II`s contention that the Court of Appeals sanctioned the trial
court`s deferment of the resolution of MOELCI II`s Motion. The trial court squarely denied the Motion and not
merely deferred its resolution. Thus, there is no deferment to speak of that should be enjoined.
 PNB vs. GATEWAY PROPERTY HOLDINGS, INC.
G.R. No. 181485. FEBRUARY 15, 2012.

Facts: Respondent GPHI was a subsidiary company of Gateway Electronics Company (GEC). GEC
obtained long term loans from the Land Bank of the Philippines (LBP) in the amount of P600 million and the
loans were secured by mortgages executed by GEC over its properties.LBP invited other banks to lend money
to GEC. It is alleged that LBP agreed to submit the mortgaged properties to it by GEC as part of the latters
assets that will be covered by a Mortgage Trust Indenture (MTI), ensuring that all participating banks in the
loan syndicate will have equal security position. LBP and a consortium of banks entered into a Memorandum of
Understanding (MOU), whereby LBP agreed to release the mortgaged properties to the consortium of banks on
the basis of an MTI. The participating banks released funds in favor of GEC. Petitioner PNB became part of this
consortium of creditor banks.

GEC then requested PNB to convert its long-term loans into a Convertible Omnibus Credit Line due to
its difficulty in paying its obligation. PNB approved such a conversion subject to certain conditions- GPHI was
made a co-borrower in the agreement and was obligated to execute in favor of PNB a real estate mortgage over
two parcels of land.GEC filed a complaint for specific performance against LBP due to the latter’s refusal to
share the mortgaged properties with the consortium of creditor banks.

PNB demanded payment from GEC and when the latter discovered the former’s intent to foreclose the
REM, it prayed that a (TRO) be issued to enjoin PNB from foreclosing on the properties of GPHI and judgment
be issued declaring that the real estate mortgage involving the properties of GPHI and executed in favor of PNB
is null and void. GPHI contended that the understanding between GEC and PNB is that the GPHI properties
would stand merely as a temporary security pending the outcome of case filed by GEC against LBP.

Since no TRO was issued by the Court, PNB was able to foreclosed the mortgaged properties.

Thereafter, GPHI filed a Petition for Annulment of Foreclosure of Mortgage. GPHI argued that, in
conducting the foreclosure proceedings, the sheriff failed to observe the requirement of Section 4 of Act No.
3135 that the sale shall be made at public auction.

RTC dismissed the case and ruled that both the civil cases involved the same parties, substantially
identical causes of action and reliefs prayed for, the reliefs being founded on the same facts. Where a single
cause of action has been split and pursuant to Rule 16, Section 1(e) of the 1997 Rules on Civil Procedure, the
Motion to Dismiss filed by PNB, on the ground that there is another action pending between the same parties
for the same cause, or litis pendentia is proper.

On appeal, the CA set aside the decision of the RTC and ruled that the third requisite of litis pendentia
(the identity in the two cases should be such that the judgment that may be rendered in one would, regardless of
which party is successful, amount to res adjudicata to the other) is not present

Issue: Whether or not the requisites of litis pendentia exist to warrant the dismissal of Civil Case for
Annulment of the Foreclosure Sale.
 Ruling: Yes. All the requisites of litis pendentia exist.

There is litis pendentia if the following requisites are present: (a) identity of parties, or at least such
parties as represent the same interests in both actions; (b) identity of rights asserted and relief prayed for, the
relief being founded on the same facts; and (c) the identity of the two preceding particulars is such that any
judgment rendered in the other action, will, regardless of which party is successful, amount to res judicata in the
action under consideration.

As to the first requisite, GPHI is the plaintiff in both civil cases while PNB is the party against whom
GPHI is asserting a claim.

As to the second requisite, allegations in Civil for Annulment of the Real Estate Mortgage and
Annulment of the Foreclosure Sale reveal that the said cases invoke the same fundamental issue which is the
temporary nature of the security that was to be provided by the mortgaged properties of GPHI.

As to the third requisite, While the appeal of the dismissal of Annulment of the Foreclosure Sale was
still pending with the Court of Appeals, GPHI filed on a Motion for Leave to Amend Complaint to Conform to
the Evidence in Civil Case Annulment of the Real Estate Mortgage. GPHI stated therein that after the parties
presented their evidence, the fact of foreclosure and the acquisition of the mortgaged properties by PNB were
duly established. In the accompanying Amended Complaint in Annulment of the Real Estate Mortgage, GPHI
prayed, for the declaration of the nullity of the foreclosure and auction sale of the mortgaged properties. As a
consequence of such an action, the two cases that GPHI filed before the court a quo henceforth contained an
identity of rights asserted and reliefs prayed for, the relief being founded on the same factual allegations.
 JOVITO R. SALONGA vs. WARNER, BARNES AND CO., LTD.
G.R. No. L-2246. January 31, 1951.

Facts: Westchester Fire Insurance Company of New York entered into a contract with Tina J. Gamboa
whereby said company insured one case of rayon yardage which said Tina J. Gamboa shipped from San
Francisco, California to Manila, Philippines and consigned to Jovito Salonga, plaintiff herein. According to the
contract of insurance, the insurance company undertook to pay to the sender or her consignee the damages that
may be caused to the goods shipped subject to the condition that the liability of the company will be limited to
the actual loss which the insured may suffer not to the exceed the sum of P2,000. The ship arrived in Manila,
and the shipment was later on examined by C. B. Nelson and Co., marine surveyors, at the request of the
plaintiff, and in their examination the surveyors found a shortage in the shipment in the amount of P1,723,12.

Plaintiff filed a claim for damages in the amount of P1,723.12 against the American President Lines,
agents of the ship, demanding settlement, and when no action was taken on this claim, plaintiff demanded
payment thereof from Warner, Barnes and Co., Ltd., as agent of the insurance company in the Philippines, and
this agent having refused to pay the claim, plaintiff instituted the present action.

After trial, at which both parties presented their respective evidence, the court rendered judgment against
Jovito Salonga. The motion for reconsideration filed by the defendant having been denied, the case was
appealed to this court.

Issue: Whether or not the trial court erred in holding that defendant, as agent of Westchester Fire
Insurance Company of New York, United States of America, is responsible upon the insurance claim subject to
the suit.

Ruling: Yes.

1. Defendant has no contractual relation with either plaintiff or his consignor

It is a well known rule that a contractual obligation or liability, or an action ex-contractu, must be
founded upon a contract, oral or written, either express or implied. This is axiomatic. If there is no contract,
there is no corresponding liability, and no cause of action may arise therefrom. This is what is provided for in
article 1257 of the Civil Code. This article provides that contracts are binding upon the parties who make them
and their heirs, excepting, with respect to the latter, where the rights and obligations are not transmissible, and
when the contract contains a stipulation in favor of a third person, he may demand its fulfillment if he gives
notice of his acceptance before it is revoked.

Warner, Barnes and Co., as principal or agent, did not make any contract, either oral or written, with the
plaintiff. The contracts were made between the respective insurance companies and the insured, and were made
by the insurance companies, through Warner, Barnes and Co., as their agent.

The defendant has not taken part, directly or indirectly, in the contract in question. The evidence shows
that the defendant did not enter into any contract either with the plaintiff or his consignor — Tina J. Gamboa.
The contract of marine insurance was made and executed only by and between the Westchester Fire Insurance
Company of New York and Tina J. Gamboa. The contract was entered in New York. There is nothing therein
which may affect, in favor or adversely, the defendant, the fulfillment of which may be demanded by or against
it. That contract is purely bilateral, binding only upon Gamboa and the insurance company. When the lower
court, therefore, imposed upon the defendant an obligation which it has never assumed, either expressly or
impliedly, or when it extended to the defendant the effects of a contract which was entered into exclusively by
and between the Westchester Fire Insurance Company of New York and Tina J. Gamboa, the error it has
committed is evident. This is contrary to law.

2. Defendant is not a real party in interest in this case.

NO. Section 2, Rule 3 of the Rules of Court requires that "every action must be prosecuted in the name
of the real party in interest." In the case at bar, the defendant issued upon in its capacity as agent of Westchester
Fire Insurance Company of New York in spite of the fact that the insurance contract has not been signed by it.
As aforementioned, the defendant did not assume any obligation thereunder either as agent or as a principal. It
cannot, therefore, be made liable under said contract, and hence it can be said that this case was filed against
one who is not the real party in interest.

The court further held that the action should have been filed against its principal, the Westchester Fire
Insurance Company of New York.

3. Defendant is a settlement and adjustment agent of the foreign insurance company (agency).

As such agent it has the authority to settle all the losses and claims that may arise under the policies that
may be issued by or in behalf of said company in accordance with the instructions it may receive from time to
time from its principal.

An adjustment and settlement agent is no different from any other agent from the point of view of his
responsibility, for he also acts in a representative capacity. Whenever he adjusts or settles a claim, he does it in
behalf of his principal, and his action is binding not upon himself but upon his principal, and the scope and
extent of the functions of an adjustment and settlement agent do not include personal liability. His functions are
merely to settle and adjust claims in behalf of his principal if those claims are proven and undisputed, and if the
claim is disputed or is disapproved by the principal, like in the instant case, the agent does not assume any
personal liability. The recourse of the insured is to press his claim against the principal.

An insurance adjuster is ordinarily a special agent for the person or company for whom he acts, and his
authority is prima facie coextensive with the business intrusted to him. . .

An adjuster does not discharge functions of a quasi-judicial nature, but represents his employer, to
whom he owes faithful service, and for his acts, in the employer's interest, the employer is responsible so long
as the acts are done while the agent is acting within the scope of his employment. (45 C. J. S., 1338-1340.)

4. A judgment for or against an agent in no way binds the real party in interest.

If the party sued upon is not the proper party, any decision that may be rendered against him would be
futile, for it cannot be enforced or executed. The effort that may be employed will be wasted. Such would be the
result of this case if it will be allowed to proceed against the defendant, for even if a favorable judgment is
obtained against it, it cannot be enforced because the real party is not involved. The defendant cannot be made
to pay for something it is not responsible.
 The court stated that the correct remedy would be for the Plaintiff to bring the principal into this case or
make it come under the courts in this jurisdiction in accordance with the procedure indicated in section 14, Rule
7, of the Rules of Court concerning litigations involving foreign corporations. This rule says that if the
defendant is a foreign corporation and it has not designated an agent in the Philippines on whom service may be
made in case of litigation, such service may be made on any agent it may have in the Philippines.

The Westchester Fire Insurance Company of new York comes within the import of this rule for even if it
has not designated an agent as required by law, it has however a settling agent who may serve the purpose. In
other words, an action may be brought against said insurance company in the Philippines and the process may
be served on the defendant to give our courts the necessary jurisdiction.
 HON. CARLOS O. FORTICH, et. al v. HON. RENATO C. CORONA
G.R. No. 131457. April 24, 1998.

Facts: This case involves a 144-hectare land located at San Vicente, Sumilao, Bukidnon, owned by the
Norberto Quisumbing, Sr. Management and Development Corporation, one of the petitioners. The property is
covered by TCT No. 14371 of the Registry of Deeds of the Province of Bukidnon. Said land was leased as a
pineapple plantation to the Philippine Packing Corporation, now Del Monte Philippines, Inc. for a period of 10
years under the Crop Producer and Growers Agreement duly annotated in the certificate of title. The lease
expired in April, 1994.

However, during the existence of the lease, DAR placed the entire 144-hectare property under
compulsory acquisition and assessed the land value at P2.38 million.

NQSRMDC resisted the DAR’s action. A writ of prohibition with preliminary injunction was granted by
the DAR Adjudication Board, ordering the DAR Region X Director, the Provincial Agrarian Reform Officer,
the Municipal Agrarian Reform Office of Sumilao, Bukidnon, the Land Bank of the Philippines, and their
authorized representatives to desist from pursuing any activity or activities concerning the subject land until
further orders.

Despite the order, DAR Regional Director issued a memorandum directing the Land Bank to open a
trust account for P2.38 million in the name of NQSRMDC and to conduct summary proceedings to determine
the just compensation of the subject property. NQSRMDC objected to these moves and filed an Omnibus
Motion to enforce the DARAB order and to nullify the summary proceedings undertaken by the DAR Regional
Director and Land Bank on the valuation of the subject property.

DARAB acted favorably on the Omnibus Motion by a ordering the DAR Regional Director and Land
Bank to seriously comply with the terms of the order; nullifying the DAR Regional Directors memorandum and
the summary proceedings conducted pursuant thereto; and directing the Land Bank to return the claim folder of
Petitioner NQSRMDCs subject property to the DAR until further orders. Land Bank complied with the DARAB
order.

In the meantime, the Provincial Development Council of Bukidnon, headed by Governor Carlos O.
Fortich, passed Resolution No. 6, designating certain areas along Bukidnon-Sayre Highway as part of the
Bukidnon Agro-Industrial Zones where the subject property is situated.

Pursuant to Section 20 of R.A. No. 7160 (LGC), the Sangguniang Bayan of Sumilao, Bukidnon, enacted
Ordinance No. 24 converting or re-classifying 144 hectares of land in Brgy. San Vicente, said Municipality,
from agricultural to industrial/institutional with a view of providing an opportunity to attract investors who can
inject new economic vitality, provide more jobs and raise the income of its people.

Bukidnon Provincial Board expressed its support for the proposed project on the basis of a Joint
Committee Report submitted by its Committee on Laws, Committee on Agrarian Reform and Socio-Economic
Committee.
 The NQSRMDC Proposal was adopted by the DTI, Bukidnon Provincial Office, as one of its flagship
projects. The same was likewise favorably recommended by the Provincial Development Council of Bukidnon;
the municipal, provincial and regional office of the DAR; the Regional Office of the DENR; the Executive
Director, signing By Authority of PAUL G. DOMINGUEZ, Office of the President Mindanao; the Secretary of
DILG; and Undersecretary of DECS Wilfredo D. Clemente.

In the same vein, the National Irrigation Administration Bukidnon and Kisolon-San Vicente Irrigators
Multi-Purpose Cooperative interposed NO OBJECTION to the proposed conversion as long as the development
cost of the irrigation systems thereat which is P2,377.00 per hectare be replenished by the developer and also it
will provide more economic benefits to the community in terms of outside investments that will come and
employment opportunities that will be generated by the projects to be put up.

Notwithstanding the foregoing favorable recommendation, however, DAR Secretary Garilao issued an
Order denying the instant application for the conversion of the subject land from agricultural to agro-industrial
and, instead, placed the same under the compulsory coverage of CARP and directed the distribution thereof to
all qualified beneficiaries.

A Motion for Reconsideration of the aforesaid Order was filed but was denied.

Thus, the DAR Secretary ordered the DAR Regional Director to proceed with the compulsory
acquisition and distribution of the property. Governor Fortich appealed he order of denial to the Office of the
President and prayed for the conversion/reclassification of the subject land as the same would be more
beneficial to the people of Bukidnon.

To prevent the enforcement of the DAR Secretary’s order, NQSRMDC filed with the Court of Appeals a
petition for certiorari, prohibition with preliminary injunction. CA issued a Resolution, ordering the parties to
observe status quo pending resolution of the petition.

In resolving the appeal, the Office of the President, through then Executive Secretary Ruben D. Torres,
issued a Decision, reversing the DAR Secretary’s decision.

DAR filed a motion for reconsideration of the OP decision, however, it was denied for having been filed
beyond the reglementary period of 15 days. The said order further declared that the OP decision had already
become final and executory.

Subsequently, some alleged farmer-beneficiaries staged a strike in front of the DAR compound in
Quezon City on October 9, 1997, protesting the Decision of the Office of the President, issued through then
Executive Secretary Ruben D. Torres, which approved the conversion of a 144-hectare land from agricultural to
agro-industrial/institutional area.

This led the Office of the President, through then Deputy Executive Secretary Renato C. Corona, to
issue the so-called Win-Win Resolution on November 7, 1997, substantially modifying its earlier Decision after
it had already become final and executory. The said Resolution modified the approval of the land conversion to
agro-industrial area only to the extent of 44 hectares, and ordered the remaining 100 hectares to be distributed to
qualified farmer-beneficiaries.

Strikers urged the Court to annul and set aside the Win-Win Resolution and to enjoin respondent
Secretary Ernesto D. Garilao of the DAR from implementing the said Resolution.

Gov. Fortich et. al. filed the present petition for certiorari, prohibition under Rule 65 and injunction with
urgent prayer for a temporary restraining order and/or writ of preliminary injunction under Rule 58 against then
Deputy Executive Secretary Renato C. Corona and DAR Secretary Ernesto D. Garilao.
 A Motion For Leave To Intervene was filed by alleged farmer-beneficiaries claiming that they are real
parties in interest as they were previously identified by respondent DAR as agrarian reform beneficiaries on the
144-hectare property subject of this case. The motion was opposed by the petitioners.

In seeking the nullification of the Win-Win Resolution, the petitioners claim that the Office of the
President was prompted to issue the said resolution after a very well-managed hunger strike led by fake farmer-
beneficiary Linda Ligmon succeeded in pressuring and/or politically blackmailing the Office of the President to
come up with this purely political decision to appease the farmers, by reviving and modifying the Decision of
29 March 1996 which has been declared final and executory in an Order.

Thus, petitioners further allege, respondent then Deputy Executive Secretary Renato C. Corona
committed grave abuse of discretion and acted beyond his jurisdiction when he issued the questioned
Resolution of 7.

Issues: (1) Whether or not an error of jurisdiction not an error of judgment which is reviewable by an
appeal under Rule 43.

(2) Whether or not the petitioners committed a forum-shopping.

Ruling: (1) No. It is true that under Rule 43, appeals from awards, judgments, final orders or resolutions
of any quasi-judicial agency exercising quasi-judicial functions, including the Office of the President, may be
taken to the Court of Appeals by filing a verified petition for review within 15 days from notice of the said
judgment, final order or resolution, whether the appeal involves questions of fact, of law, or mixed questions of
fact and law.

However, the remedy prescribed in Rule 43 is inapplicable considering that the present petition contains
an allegation that the challenged resolution is patently illegaland was issued with grave abuse of discretion and
beyond his jurisdiction= when said resolution substantially modified the earlier OP Decision which had long
become final and executory.

Thus, the appropriate remedy to annul and set aside the assailed resolution is an original special civil
action for certiorari under Rule 65, as what the petitioners have correctly done.The office of a writ of certiorari
is restricted to truly extraordinary cases cases in which the act of the lower court or quasi-judicial body is
wholly void.

Section 1 of Rule 65 mandates that the person aggrieved by the assailed illegal act may file a verified
petition for certiorari in the proper court. The proper court where the petition must be filed is stated in Section 4
of Rule 65 provides that the Supreme Court, Court of Appeals and Regional Trial Court have original
concurrent jurisdiction to issue a writ of certiorari, prohibitionand mandamus. But the jurisdiction of these three
courts are also delineated in that, if the challenged act relates to acts or omissions of a lower court or of a
corporation, board, officer or person, the petition must be filed with the Regional Trial Court which exercises
jurisdiction over the territorial area as defined by the Supreme Court. And if it involves the act or omission of a
quasi-judicial agency, the petition shall be filed only with the Court of Appeals, unless otherwise provided by
law or the Rules of Court. But the Supreme Court has the full discretionary power to take cognizance of the
petition filed directly to it if compelling reasons, or the nature and importance of the issues raised, warrant.

(2) No. There is forum-shopping whenever, as a result of an adverse opinion in one forum, a party seeks
a favorable opinion (other than by appeal or certiorari) in another. The principle applies not only with respect to
suits filed in the courts but also in connection with litigation commenced in the courts while an administrative
proceeding is pending, as in this case, in order to defeat administrative processes and in anticipation of an
unfavorable administrative ruling and a favorable court ruling. This specially so, as in this case, where the court
in which the second suit was brought, has no jurisdiction

It is clear from the above-quoted rule that the petitioners are not guilty of forum shopping. The test for
determining whether a party has violated the rule against forum shopping is where a final judgment in one case
will amount to res adjudicata in the action under consideration. A cursory examination of the cases filed by the
petitioners does not show that the said cases are similar with each other. The petition for certiorari in the Court
of Appeals sought the nullification of the DAR Secretarys order to proceed with the compulsory acquisition and
distribution of the subject property.
Samaniego, et al. v. Aguila, et al.
GR No. 125567. June 27, 2000.

Facts: Petitioners are tenants in a landholding owned by respondents’ mother with an aggregate area of
10.4496 hectares in Patul, Santiago, Isabela.The subject land was identified by the DAR-Region 2 as covered by
the Operation Land Transfer Program of the government. After sometime, respondent’s mother on their behalf
filed a petition for exemption from the coverage of PD 27 (Land Reform Program). Thus, petitioners opposed
the application for respondents’ mother transferred the title of the lands to respondents in violation of the rules
and regulations of the DAR.

The Regional Director granted the application for exemption. The decision was affirmed on appeal to
the DAR, which was reversed by the same on motion of the petitioners. Thus, DAR denied the application for
exemption and declared petitioners as rightful farmer-beneficiaries of the land.Respondents appealed to the
Office of the President which set aside the decision of the DAR and reinstated DAR’s prior decision.

On appeal in the CA, the petition was dismissed for failure to implead the Office of the President (OP)
as an indispensable party (as the one whose decision and resolution is being questioned). Joinder of
indispensable parties is mandatory. Failure to implead the OP was fatal and the petition must be dismissed.

Issue: Whether or not the OP was an indispensable party and had to be impleaded.

Ruling: No. At the time the petitioners brought the case to the CA, the rule on appeals to the said court
from quasi-judicial agencies was that, “petition for review shall (a) state the full names of the parties, without
impleading the court or agencies either as petitioners or respondents.”

Also, the CA was not an indispensable party or a party in interest without whom no final determination
can be had of an action without being impleaded. Indispensable parties are those with such an interest in the
matter that a final decree would necessarily affect their rights and the court cannot proceed without their
presence.

The word “interest” in this rule should be material, directly in issue and to be affected by the decree, as
distinguished from a mere incidental interest in the question involved, as opposed to a nominal or pro forma
party who is joined as a plaintiff or defendant, not because such party has any real interest in the subject matter
or because any relief is demanded, but merely because the technical rules of pleadings require the presence of
such party on the record. Thus, the OP not having any interest in the case except to entertain appeals from the
DAR, is not an indispensable party.CA was ordered to decide on the matter.
 Theodore and Nancy Ang, etc. v. Spouses Alan and Em Ang.
G.R. No. 186993. August 22, 2012.

Facts: Spouses Alan and Em Ang, the respondents, obtained a loan worth $300,000 from Theodore and
Nancy Ang, the petitioners. When the loan became demandable, respondent spouses executed a Promissory
Note promising to pay the loan and 10% annual interest on demand. Petitioners made several demands but
respondents failed to pay, their obligation amounting to $719, 627.21 inclusive of the 10% interest. Theodore
and Nancy Ang, the petitioners, were residing in Los Angeles, California. They executed a Special Power of
Attorney in favor of one Atty. Eldrige Marvin Aceron in order for him to file an action against the respondent
spouses. Atty. Aceron filed a complaint for the collection of a sum of money with the RTC of Quezon City, his
residence. The respondent spouses moved to dismiss, on the ground of improper venue. They contend that the
complaint against them may be filed in the where either the petitioners or respondents reside. Respondent
spouses reside in Bacolod City. The RTC denied the motion to dismiss, ruling that Atty. Aceron as the attorney-
in-fact may use his residence as basis for the venue of the action. Respondents filed a petition for certiorari with
the CA based on their earlier ground and on the ground that Atty. Aceron, a mere attorney-in-fact, is not the real
party in interest; that his residence should not be considered in determining the proper venue for the complaint.
The CA reversed the RTC and dismissed the complaint filed by the petitioners. The CA held that the complaint
should have been filed in Bacolod City instead. Petitioners moved to reconsider but were denied by the CA

Issue: Did the CA commit an error of law when it ruled that the complaint must be dismissed on the
ground of improper venue?

Ruling: No, the CA did not commit an error of law.

While the fixing of the venue in personal actions may be done for the convenience of the plaintiffs and
their witnesses, the choice is not left to the caprice of the plaintiff. The Rules of court still regulate the fixing of
the venue for filing a personal action.

The collection of a sum of money is a personal action in order to enforce a contract. The Rules of Court
give the plaintiff the choice where to file the action; whether in the place where the plaintiff resides or in the
place where the defendant resides. However, the plaintiffs in this case do not reside in the Philippines.
Philippine Courts do not have jurisdiction over persons residing abroad. Hence, the only choice left for venue
was the residence of the defendant.

Atty. Aceron, the attorney-in-fact of the petitioners is not a real party in interest for the court to consider
his residence as a basis for setting the venue. He is only a representative of the petitioners, and under Rule 3,
sec. 3 of the Rules of Court “the beneficiary shall be included in the title of the case and shall be deemed to be
the real party in interest”. Atty. Aceron did not subrogate petitioners as real parties in interest, he merely
represents them. The real party in interest still remains Theodore Ang and Nancy Ang; Atty. Aceron cannot
replace their residence with that of his own for purposes of setting the venue. The rules of venue are designed to
facilitate the just and orderly administration of justice. This objective will be frustrated if the plaintiffs are given
unbridled freedom to choose the venue, as they may have ulterior motives for filing the complaint in a specific
court of their choosing.
SIMNY G. GUY, GERALDINE G. GUY, GLADYS G. YAO, and the HEIRS OF THE LATE GRACE G.
CHEU, Petitioners, vs. GILBERT G. GUY, Respondent.

Facts: With 519,997 shares of stock as reflected in Stock Certificate Nos. 004-014, herein respondent
Gilbert G. Guy (Gilbert) practically owned almost 80 percent of the 650,000 subscribed capital stock of
GoodGold Realty & Development Corporation (GoodGold).

GoodGold’s remaining shares were divided among Francisco Guy (Francisco) with 130,000 shares,
Simny Guy (Simny), Benjamin Lim and Paulino Delfin Pe, with one share each, respectively.Gilbert is the son
of spouses Francisco and Simny.Simny, one of the petitioners, however, alleged that it was she and her husband
who established GoodGold, putting the bulk of its shares under Gilbert’s name.

Simny claimed that with their eldest son, Gaspar G. Guy (Gaspar), having entered the Focolare
Missionary in 1970s, renouncing worldly possessions,2 she and Francisco put the future of the Guy group of
companies in Gilbert’s hands.Simny further claimed that upon the advice of their lawyers, upon the
incorporation of GoodGold, they issued stock certificates reflecting the shares held by each stockholder duly
signed by Francisco as President and Atty. Emmanuel Paras as Corporate Secretary, with corresponding blank
endorsements at the back of each certificate – including Stock Certificate Nos. 004-014 under Gilbert’s name.

These certificates were all with Gilbert’s irrevocable endorsement and power of attorney to have these
stocks transferred in the books of corporation.All of these certificates were always in the undisturbed possession
of the spouses Francisco and Simny, including Stock Certificate Nos. 004-014.

In 1999, Francisco instructed Benjamin Lim, to collaborate with Atty. Emmanuel Paras, to redistribute
GoodGold’s shareholdings evenly among his children, while maintaining a proportionate share for himself and
his wife, Simny.Accordingly, some of GoodGold’s certificates were cancelled and new ones were issued to
represent the redistribution of GoodGold’s shares of stock. The new certificates of stock were signed by
Francisco and Atty. Emmanuel Paras, as President and Corporate Secretary, respectively.

In September 2004, or five years after the redistribution of GoodGold’s shares of stock, Gilbert filed
with the Regional Trial Court (RTC) of Manila, a Complaint for the "Declaration of Nullity of Transfers of
Shares in GoodGold and of General Information Sheets and Minutes of Meeting, and for Damages with
Application for a Preliminary Injunctive Relief," against petitioners, alleging, among others, that no stock
certificate ever existed;that his signature at the back of the spurious Stock Certificate Nos. 004-014 which
purportedly endorsed the same and that of the corporate secretary, Emmanuel Paras, at the obverse side of the
certificates were forged, and, hence, should be nullified.

Gilbert, however, withdrew the complaint, after the National Bureau of Investigation (NBI) submitted a
report to the RTC of Manila authenticating Gilbert’s signature in the endorsed certificates.

The present controversy arose, when in 2008, three years after the complaint with the RTC of Manila
was withdrawn, Gilbert again filed a complaint, this time, with the RTC of Mandaluyong, captioned as "Intra-
Corporate Controversy: For the Declaration of Nullity of Fraudulent Transfers of Shares of Stock Certificates,
Fabricated Stock Certificates, Falsified General Information Sheets, Minutes of Meetings, and Damages with
Application for the Issuance of a Writ of Preliminary and Mandatory Injunction," against petitioners.Gilbert
alleged that he never signed any document which would justify and support the transfer of his shares to his
siblings.

He also denied the existence of the certificates of stocks. According to him, "there were no certificates
of stocks under his name for the shares of stock subscribed by him were never issued nor delivered to him from
the time of the inception of the corporation.

Gilbert added that the Amended General Information Sheets (GIS) of GoodGold for the years 2000 to
2004 which his siblings submitted to the Securities and Exchange Commission (SEC) were spurious as these
did not reflect his true shares in the corporation which supposedly totaled to 595,000 shares;16 that no valid
stockholders’ annual meeting for the year 2004 was held, hence proceedings taken thereon, including the
election of corporate officers were null and void;17 and, that his siblings are foreign citizens, thus, cannot own
more than forty percent of the authorized capital stock of the corporation.

Gilbert also asked in his complaint for the issuance of a Writ of Preliminary and Mandatory Injunction
to protect his rights.In an Order dated 30 June 2008,20 the RTC denied Gilbert’s Motion for Injunctive
Relief21 which constrained him to file a motion for reconsideration, and, thereafter, a Motion for Inhibition
against Judge Edwin Sorongon, praying that the latter recuse himself from further taking part in the
case.Gilbert’s siblings filed a manifestation claiming that the complaint is a nuisance and harassment suit.

In an Order dated 6 November 2008,22 the RTC denied the motion for inhibition, as well as dismissed
the case, declaring it a nuisance and harassment suit.This constrained Gilbert to assail the above Order before
the Court of Appeals (CA).

In a Decision dated 27 May 2009, the CA upheld Judge Sorongon’s refusal to inhibit.The CA, in the
same decision, also denied Gilbert’s Petition for the Issuance of Writ of Preliminary Injunction for failure to
establish a clear and unmistakable right that was violated as required under Section 3, rule 58 of the 1997 Rules
of Civil Procedure.

The CA, however, found merit on Gilbert’s contention that the complaint should be heard on the merits.

Hence, these consolidated petitions.

G.R. No. 189486 is a Petition for Review under Rule 45 of the Rules of Court filed by petitioners which
prays that this Court declare Civil Case No. SEC-MC08-112, a harassment or nuisance suit.

Meanwhile, during the pendency of G.R. No. 189486, the trial court set the pre-trial conference on the
case subject of this controversy, constraining the petitioners to file a Motion to defer the pre-trial, which was,
however, denied by the court a quo.

The denial of the petitioners’ motion to defer pre-trial, compelled them to file with this Court a Petition
for Certiorari with Urgent Application for the Issuance of TRO and/or A Writ of Preliminary Injunction,
docketed as G.R. No. 189699.

Because of the pendency of the G.R. No. 189486 before us, the petitioners deemed proper to question
the said denial before us as an incident arising from the main controversy.29

Ruling:
 The absence of an indispensable party in a case renders all subsequent actions of the court null and void
for want of authority to act, not only as to the absent parties but even as to those present.

It bears emphasis that this controversy started with Gilbert’s complaint filed with the RTC of
Mandaluyong City in his capacity as stockholder, director and Vice-President of GoodGold.34

Gilbert’s complaint essentially prayed for the return of his original 519,997 shares in GoodGold, by
praying that the court declare that "there were no valid transfers of the contested shares to defendants and
Francisco.”

The transfer of the shares cannot be, as Gilbert wanted, declared entirely fraudulent without including
those of Francisco who owns almost a third of the total number.

Francisco, in both the 2004 and 2008 complaints, is an indispensable party without whom no final
determination can be had for the following reasons: (a) the complaint prays that the shares now under the name
of the defendants and Francisco be declared fraudulent; (b) Francisco owns 195,000 shares some of which,
Gilbert prays be returned to him; (c) Francisco signed the certificates of stocks evidencing the alleged
fraudulent shares previously in the name of Gilbert.

The inclusion of the shares of Francisco in the complaint makes Francisco an indispensable party.
Moreover, the pronouncement about the shares of Francisco would impact on the hereditary rights of the
contesting parties or on the conjugal properties of the spouses to the effect that Francisco, being husband of
Simny and father of the other contesting parties, must be included for, otherwise, in his absence, there cannot be
a determination between the parties already before the court which is effective, complete, or equitable.

It bears emphasis that Gilbert, while suing as a stockholder against his co-stockholders, should have also
impleaded GoodGold as defendant. His complaint also prayed for the annulment of the 2004 stockholders’
annual meeting, the annulment of the 2004 election of the board of directors and of its officers, the annulment
of 2004 GIS submitted to the SEC, issuance of an order for the accounting of all monies and rentals of
GoodGold, and the issuance of a writ of preliminary and mandatory injunction. We have made clear that
GoodGold is a separate juridical entity distinct from its stockholders and from its directors and officers. The
trial court, acting as a special commercial court, cannot settle the issues with finality without impleading
GoodGold as defendant. Like Francisco, and for the same reasons, GoodGold is an indispensable party which
Gilbert should have impleaded as defendant in his complaint.

Allegations of deceit, machination, false pretenses, misrepresentation, and threats are largely
conclusions of law that, without supporting statements of the facts to which the allegations of fraud refer, do not
sufficiently state an effective cause of action.

"In all averments of fraud or mistake, the circumstances constituting fraud or mistake must be stated
with particularity" to "appraise the other party of what he is to be called on to answer, and so that it may be
determined whether the facts and circumstances alleged amount to fraud." These particulars would necessarily
include the time, place and specific acts of fraud committed. "The reason for this rule is that an allegation of
fraud concerns the morality of the defendant’s conduct and he is entitled to know fully the ground on which the
allegations are made, so he may have every opportunity to prepare his case to clear himself at the trial."

Tested against established standards, we find that the charges of fraud which Gilbert accuses his siblings
are not supported by the required factual allegations. In Reyes v. RTC of Makati, which we now reiterate,
mutatis mutandis, while the complaint contained allegations of fraud purportedly committed by his siblings,
these allegations are not particular enough to bring the controversy within the special commercial court’s
jurisdiction; they are not statements of ultimate facts, but are mere conclusions of law: how and why the alleged
transfer of shares can be characterized as "fraudulent" were not explained and elaborated on. As emphasized in
Reyes:

Not every allegation of fraud done in a corporate setting or perpetrated by corporate officers will bring
the case within the special commercial court’s jurisdiction. To fall within this jurisdiction, there must be
sufficient nexus showing that the corporation’s nature, structure, or powers were used to facilitate the fraudulent
device or scheme.

Significantly, no corporate power or office was alleged to have facilitated the transfer of Gilbert’s
shares. How the petitioners perpetrated the fraud, if ever they did, is an indispensable allegation which Gilbert
must have had alleged with particularity in his complaint, but which he failed to.

Failure to specifically allege the fraudulent acts in intra-corporate controversies is indicative of a

harassment or nuisance suit and may be dismissed motu proprio.

In ordinary cases, the failure to specifically allege the fraudulent acts does not constitute a ground for
dismissal since such a defect can be cured by a bill of particulars. Thus:

Failure to allege fraud or mistake with as much particularity as is desirable is not fatal if the general
purport of the claim or defense is clear, since all pleadings should be so construed as to do substantial justice.
Doubt as to the meaning of the pleading may be resolved by seeking a bill of particulars.

A bill of particulars may be ordered as to a defense of fraud or mistake if the circumstances constituting
fraud or mistake are not stated with the particularity required by the rule.

The above-stated rule, however, does not apply to intra-corporate controversies. It did not escape us that
Gilbert, instead of particularly describing the fraudulent acts that he complained of, just made a sweeping denial
of the existence of stock certificates by claiming that such were not necessary, GoodGold being a mere family
corporation.As sweeping and bereft of particulars is his claim that he "is unaware of any document signed by
him that would justify and support the transfer of his shares to herein petitioners." Even more telling is the
contradiction between the denial of the existence of stock certificates and the denial of the transfer of his shares
of stocks "under his name under the books of the corporations."

Even beyond the vacant pleadings, its nature as nuisance is palpable. To recapitulate, it was only after
five years following the redistribution of GoodGold’s shares of stock, that Gilbert filed with the RTC of Manila
a complaint. Gilbert withdrew this complaint after the NBI submitted a report to the RTC of Manila
authenticating Gilbert’s signature in the endorsed certificates.

And, it was only after three years from the withdrawal of the Manila complaint, that Gilbert again filed
in 2008 a complaint also for declaration of nullity of the transfer of the shares of stock, this time with the RTC
of Mandaluyong.

When a stock certificate is endorsed in blank by the owner thereof, it constitutes what is termed as
"street certificate," so that upon its face, the holder is entitled to demand its transfer his name from the issuing
corporation.

With Gilbert’s failure to allege specific acts of fraud in his complaint and his failure to rebut the NBI
report, this Court pronounces, as a consequence thereof, that the signatures appearing on the stock certificates,
including his blank endorsement thereon were authentic. With the stock certificates having been endorsed in
blank by Gilbert, which he himself delivered to his parents, the same can be cancelled and transferred in the
names of herein petitioners.
 In Santamaria v. Hongkong and Shanghai Banking Corp.,61 this Court held that when a stock certificate
is endorsed in blank by the owner thereof, it constitutes what is termed as "street certificate," so that upon its
face, the holder is entitled to demand its transfer into his name from the issuing corporation. Such certificate is
deemed quasi-negotiable, and as such the transferee thereof is justified in believing that it belongs to the holder
and transferor.

While there is a contrary ruling, as an exception to the general rule enunciated above, what the Court
held in Neugene Marketing Inc., et al., v CA,62 where stock certificates endorsed in blank were stolen from the
possession of the beneficial owners thereof constraining this Court to declare the transfer void for lack of
delivery and want of value, the same cannot apply to Gilbert because the stock certificates which Gilbert
endorsed in blank were in the undisturbed possession of his parents who were the beneficial owners thereof and
who themselves as such owners caused the transfer in their names. Indeed, even if Gilbert’s parents were not the
beneficial owners, an endorsement in blank of the stock certificates coupled with its delivery, entitles the holder
thereof to demand the transfer of said stock certificates in his name from the issuing corporation.
 LIVING @ SENSE, INC. vs. MALAYAN INSURANCE COMPANY, INC.
G.R. No. 193753. September 26, 2012.

Facts: Petitioner was the main contractor of the FOC Network Project of Globe Telecom in Mindanao.
Petitioner entered into a Sub-Contract Agreement (Agreement) with Dou Mac, Inc. (DMI), under which the
latter was tasked to undertake an underground open-trench work. Petitioner required DMI to give a bond, in the
event that DMI fails to perform its obligations under the Agreement.

Thus, DMI secured surety and performance bonds, both in the amount of P 5,171,488.00, from
respondent Malayan Insurance Company, Inc. (respondent) to answer: (1) for the unliquidated portion of the
downpayment, and (2) for the loss and damage that petitioner may suffer, respectively, should DMI fail to
perform its obligations under the Agreement. Under the bonds, respondent bound itself jointly and severally
liable with DMI.

The Department of Public Works and Highways (DPWH) issued a work-stoppage order against DMI
after finding the latter’s work unsatisfactory. DMI failed to adopt corrective measures, prompting petitioner to
terminate the Agreement and seek indemnification from respondent in the total amount of P 1,040,895.34.

However, respondent effectively denied petitioner’s claim on the ground that the liability of its principal,
DMI, should first be ascertained before its own liability as a surety attaches. Hence, the instant complaint,
premised on respondent’s liability under the surety and performance bonds secured by DMI.

Respondent claimed that DMI is an indispensable party that should be impleaded and whose liability
should first be determined before respondent can be held liable. On the other hand, petitioner asserted that
respondent is a surety who is directly and primarily liable to indemnify petitioner, and that the bond is "callable
on demand" in the event DMI fails to perform its obligations under the Agreement.

Issue: Whether or not DMI is an indispensable party in this case.

Ruling: No. DMI is not an indispensable party because petitioner can claim indemnity directly from
respondent, having made itself jointly and severally liable with DMI for the obligation under the bonds.
Therefore, the failure to implead DMI is not a ground to dismiss the case, even if the same was without
prejudice. The term "jointly and severally" expresses a solidary obligation granting petitioner, as creditor, the
right to proceed against its debtors. The nature of the solidary obligation under the surety does not make one an
indispensable party.An indispensable party is a party-in-interest without whom no final determination can be
had of an action, and who shall be joined mandatorily either as plaintiffs or defendants. The presence of
indispensable parties is necessary to vest the court with jurisdiction, thus, without their presence to a suit or
proceeding, the judgment of a court cannot attain real finality. The absence of an indispensable party renders all
subsequent actions of the court null and void for want of authority to act, not only as to the absent parties but
even as to those present.When DMI secured the surety and performance bonds from respondent in compliance
with petitioner’s requirement, respondent bound itself "jointly and severally" with DMI for the damages and
actual loss that petitioner may suffer should DMI fail to perform its obligations.

PHILIP L. GO, PACIFICO Q. LIM and ANDREW Q. LIM Petitioners, vs. DISTINCTION
PROPERTIES DEVELOPMENT AND CONSTRUCTION, INC. Respondent.
G.R. No. 194024. April 25, 2012.

Facts: Philip L. Go, Pacifico Q. Lim and Andrew Q. Lim (petitioners) are registered individual owners
of condominium units in Phoenix Heights Condominium Pasig City, Metro Manila. Respondent Distinction
Properties Development and Construction, Inc. (DPDCI) is the real estate developer of Phoenix Heights
Condominium, with principal office at Binondo, Manila.

In February 1996, Pacifico Lim, one of the incorporators and the then president of DPDCI, executed a
Master Deed and Declaration of Restrictions (MDDR) of Phoenix Heights Condominium, which was filed with
the Registry of Deeds. As the developer, DPDCI undertook, among others, the marketing aspect of the project,
the sale of the units and the release of flyers and brochures.

Thereafter, Phoenix Heights Condominium Corporation (PHCC) was formally organized and
incorporated. Sometime in 2000, DPDCI turned over to PHCC the ownership and possession of the
condominium units, except for the two saleable commercial units/spaces:

1. G/F Level BAS covered by Condominium Certificate of Title (CCT) No. 21030 utilized as the
PHCC’s administration office, and
2. G/F Level 4-A covered by CCT No. PT-27396/C-136-II used as living quarters by the building
administrator.

Although used by PHCC, DPDCI was assessed association dues for these two units.

In March 1999, petitioner Lim filed an Application for Alteration of Plan pertaining to the construction
of 22 storage units in the spaces adjunct to the parking area of the building, but was disapproved as such would
obstruct light and ventilation.

In August 2004, through its Board, PHCC approved a settlement offer from DPDCI for the set-off of the
latter’s association dues arrears with the assignment of title over CCT Nos. 21030 and PT-27396/C-136-II and
their conversion into common areas.

The said settlement likewise included the reversion of the 22 storage spaces into common areas. With
the conformity of PHCC, DPDCI’s application for alteration (conversion of unconstructed 22 storage units and
units GF4-A and BAS from saleable to common areas) was granted by the Housing and Land Use Regulatory
Board (HLURB).

In August 2008, petitioners, as condominium unit-owners, filed a complaint before the HLURB against
DPDCI for unsound business practices and violation of the MDDR, alleging that the latter committed
misrepresentation in their circulated flyers and brochures as to the facilities or amenities that would be available
in the condominium and failed to perform its obligation to comply with the MDDR.

In defense, DPDCI denied that it had breached its promises and representations to the public concerning
the facilities in the condominium. It alleged that the brochure attached to the complaint was "a mere preparatory
draft" and not the official one actually distributed to the public, and that the said brochure contained a
disclaimer as to the binding effect of the supposed offers therein. Also, DPDCI questioned the petitioners’
personality to sue as the action was a derivative suit.

HLURB Ruling – Favored the petitioners, holding as invalid the agreement entered into between DPDCI
and PHCC, as to the alteration or conversion of the subject units into common areas, which it previously
approved, for the reason that it was not approved by the majority of the members of PHCC as required under
Section 13 of the MDDR. Further stating that DPDCI’s defense, that the brochure was a mere draft, was against
human experience and a convenient excuse to avoid its obligation to provide the facility of the project and that
the case was not a derivative suit but one which involved contracts of sale of the respective units between the
complainants and DPDCI, hence, within its jurisdiction pursuant to Section 1, Presidential Decree (P.D.) No.
957 (The Subdivision and Condominium Buyers’ Protective Decree), as amended.

Aggrieved, DPDCI filed with the CA its Petition for Certiorari and Prohibition on the ground that the
HLURB decision was a patent nullity constituting an act without or beyond its jurisdiction and that it had no
other plain, speedy and adequate remedy in the course of law.

Court of Appeals Ruling – Favored DPDCI, setting aside HLURB’s decision (March 17, 2010) and
holding that HLURB had no jurisdiction over the complaint filed by petitioners as the controversy did not fall
within the scope of the administrative agency’s authority under P.D. No. 957. The HLURB not only relied
heavily on the brochures which, according to the CA, did not set out an enforceable obligation on the part of
DPDCI, but also erroneously cited Section 13 of the MDDR to support its finding of contractual violation.

The CA held that jurisdiction over PHCC, an indispensable party, was neither acquired nor waived by
estoppel. It held that, in any event, the action should be dismissed because the absence of PHCC, an
indispensable party, rendered all subsequent actuations of the court void, for want of authority to act, not only
as to the absent parties but even as to those present.

Finally, the CA held that the rule on exhaustion of administrative remedies could be relaxed. Appeal was
not a speedy and adequate remedy as jurisdictional questions were continuously raised but ignored by the
HLURB. In the present case, however, "[t]he bottom line is that the challenged decision is one that had been
rendered in excess of jurisdiction, if not with grave abuse of discretion amounting to lack or excess of
jurisdiction."

Petitioners filed a motion for reconsideration, which was denied by the CA. Hence this petition.

Issues: (1) Whether or not the HLURB has jurisdiction over the complaint filed by the petitioners.

(2) Whether or not PHCC is an indispensable party.

(3) Whether or not the rule on exhaustion of administrative remedies applies in this case.

Ruling: (1) No. Jurisdiction over the subject matter of a case is conferred by law and determined by the
allegations in the complaint which comprise a concise statement of the ultimate facts constituting the plaintiff's
cause of action. The nature of an action, as well as which court or body has jurisdiction over it, is determined
based on the allegations contained in the complaint of the plaintiff, irrespective of whether or not the plaintiff is
entitled to recover upon all or some of the claims asserted therein. The averments in the complaint and the
character of the relief sought are the ones to be consulted. Once vested by the allegations in the complaint,
jurisdiction also remains vested irrespective of whether or not the plaintiff is entitled to recover upon all or
some of the claims asserted therein. Thus, it was ruled that the jurisdiction of the HLURB to hear and decide
cases is determined by the nature of the cause of action, the subject matter or property involved and the parties.

To determine if HLURB has jurisdiction over petitioners’ cause of action, an examination of the laws
defining the HLURB’s jurisdiction and authority becomes imperative. P.D. No. 957, specifically Section 3,
granted the National Housing Authority (NHA) the "exclusive jurisdiction to regulate the real estate trade and
business." Then came P.D. No. 134421 expanding the jurisdiction of the NHA (now HLURB), as follows:

SECTION 1. In the exercise of its functions to regulate the real estate trade and business and in addition to its powers provided for in
Presidential Decree No. 957, the National Housing Authority shall have exclusive jurisdiction to hear and decide cases of the
following nature:
(a) Unsound real estate business practices;
(b) Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project owner,
developer, dealer, broker or salesman; and
(c) Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lot or condominium
unit against the owner, developer, dealer, broker or salesman.

The HLURB is given a wide latitude in characterizing or categorizing acts which may constitute
unsound business practice or breach of contractual obligations in the real estate trade. This grant of expansive
jurisdiction to the HLURB does not mean, however, that all cases involving subdivision lots or condominium
units automatically fall under its jurisdiction.

The mere relationship between the parties, i.e., that of being subdivision owner/developer and
subdivision lot buyer, does not automatically vest jurisdiction in the HLURB. For an action to fall within the
exclusive jurisdiction of the HLURB, the decisive element is the nature of the action as enumerated in Section 1
of P.D. 1344. On this matter, we have consistently held that the concerned administrative agency, the National
Housing Authority (NHA) before and now the HLURB, has jurisdiction over complaints aimed at compelling
the subdivision developer to comply with its contractual and statutory obligations.

The complaint filed by petitioners alleged causes of action that apparently are not cognizable by the
HLURB considering the nature of the action and the reliefs sought. A perusal of the complaint discloses that
petitioners are actually seeking to nullify and invalidate the duly constituted acts of PHCC - the April 29, 2005
Agreement entered into by PHCC with DPDCI and its Board Resolution which authorized the acceptance of the
proposed offsetting/settlement of DPDCI’s indebtedness and approval of the conversion of certain units from
saleable to common areas.
As it is clear that.

(2) Yes. The acts being assailed are those of PHHC; this case cannot prosper for failure to implead such
proper party.

An indispensable party is defined as one who has such an interest in the controversy or subject matter
that a final adjudication cannot be made, in his absence, without injuring or affecting that interest. Under
Section 7, Rule 3 of the Rules of Court, "parties in interest without whom no final determination can be had of
an action shall be joined as plaintiffs or defendants."

If there is a failure to implead an indispensable party, any judgment rendered would have no
effectiveness. It is "precisely ‘when an indispensable party is not before the court (that) an action should be
dismissed.’ The absence of an indispensable party renders all subsequent actions of the court null and void for
want of authority to act, not only as to the absent parties but even to those present." The purpose of the rules on
joinder of indispensable parties is a complete determination of all issues not only between the parties
themselves, but also as regards other persons who may be affected by the judgment. A decision valid on its face
cannot attain real finality where there is want of indispensable parties.

The Supreme Court has held that when it appears of record that there are other persons interested in the
subject matter of the litigation, who are not made parties to the action, it is the duty of the court to suspend the
trial until such parties are made either plaintiffs or defendants.

The burden of procuring the presence of all indispensable parties is on the plaintiff. The evident purpose
of the rule is to prevent the multiplicity of suits by requiring the person arresting a right against the defendant to
include with him, either as co-plaintiffs or as co-defendants, all persons standing in the same position, so that
the whole matter in dispute may be determined once and for all in one litigation.

From all indications, PHCC is an indispensable party and should have been impleaded, either as a
plaintiff or as a defendant, in the complaint filed before the HLURB as it would be directly and adversely
affected by any determination therein.

To belabor the point, the causes of action, or the acts complained of, were the acts of PHCC as a
corporate body.

The cause of action rightfully pertains to PHCC. Petitioners cannot exercise the same except through a
derivative suit. In the complaint, however, there was no allegation that the action was a derivative suit. In fact,
in the petition, petitioners claim that their complaint is not a derivative suit. The Court ruled that for a derivative
suit to prosper, it is required that the minority stockholder suing for and on behalf of the corporation must allege
in his complaint that he is suing on a derivative cause of action on behalf of the corporation and all other
stockholders similarly situated who may wish to join him in the suit. It is a condition sine qua non that the
corporation be impleaded as a party because not only is the corporation an indispensable party, but it is also the
present rule that it must be served with process. The judgment must be made binding upon the corporation in
order that the corporation may get the benefit of the suit and may not bring subsequent suit against the same
defendants for the same cause of action. In other words, the corporation must be joined as party because it is its
cause of action that is being litigated and because judgment must be a res adjudicata against it.

Without PHCC as a party, there can be no final adjudication of the HLURB’s judgment.

(3) No. The Court agrees with the position of the CA that the circumstances prevailing in this case
warranted a relaxation of the rule on exhaustion of administrative remedies.

The doctrine of exhaustion of administrative remedies is a cornerstone of our judicial system. The thrust
of the rule is that courts must allow administrative agencies to carry out their functions and discharge their
responsibilities within the specialized areas of their respective competence.

The doctrine of exhaustion of administrative remedies and the doctrine of primary jurisdiction are not
ironclad rules. In the case of Republic of the Philippines v. Lacap, the Court enumerated the numerous
exceptions to these rules, namely: (a) where there is estoppel on the part of the party invoking the doctrine; (b)
where the challenged administrative act is patently illegal, amounting to lack of jurisdiction; (c) where there is
unreasonable delay or official inaction that will irretrievably prejudice the complainant; (d) where the amount
involved is relatively so small as to make the rule impractical and oppressive; (e) where the question involved is
purely legal and will ultimately have to be decided by the courts of justice; (f) where judicial intervention is
urgent; (g) where the application of the doctrine may cause great and irreparable damage; (h) where the
controverted acts violate due process; (i) where the issue of non-exhaustion of administrative remedies has been
rendered moot; (j) where there is no other plain, speedy and adequate remedy; (k) where strong public interest is
involved; and (l) in quo warranto proceedings.44 [Underscoring supplied]
 The situations (b) and (e) in the foregoing enumeration obtain in this case.

The challenged decision of the HLURB is patently illegal having been rendered in excess of jurisdiction,
if not with grave abuse of discretion amounting to lack or excess of jurisdiction. Also, the issue on jurisdiction
is purely legal which will have to be decided ultimately by a regular court of law.

There is a question of law when the doubt or difference arises as to what the law is on a certain state of
facts, and not as to the truth or the falsehood of alleged facts. Said question at best could be resolved only
tentatively by the administrative authorities. The final decision on the matter rests not with them but with the
courts of justice. Exhaustion of administrative remedies does not apply, because nothing of an administrative
nature is to be or can be done. The issue does not require technical knowledge and experience but one that
would involve the interpretation and application of law.
 Sepulveda, Sr. v. Pelaez.
G.R. No. 152195. January 31, 2005.

Facts: The case at bar is a petition for review on certiorari under Rule 45 of the Rules of Court. The
private respondent (Atty. Pelaez) filed a complaint against his grand uncle (Sepulveda, Sr.) with the CFI Cebu
for the recovery of possession and ownership of his ½ undivided share of several parcels of land; his undivided
1/3 share in several other lots and for the partition among the co-owners. The 11 lots among the 25 parcels of
lands which Atty. Pelaez’s mother, Dulce Sepulveda, inherited from her grandmother under the project of
partition which was submitted by Sepulveda, Sr. as the administrator of the formers estate, duly approved by the
said CFI in a Special Proceeding. Under the said deed, Sepulveda, Sr. appeared to be the owner of an undivided
portion of Lot No. 28199, while his brother and Dulces uncle Santiago Sepulveda, was the undivided owner of
½ of the parcels of land covered by T.D. Nos. 18197, 18193 and 28316. Dulce and her uncles, Pedro and
Santiago, were likewise indicated therein as the co-owners of the 11 other parcels of land, each with an
undivided 1/3 share thereof.

Private Respondent’s Contention:

It alleged that his mother Dulce died intestate, and aside from himself, was survived by her husband
Rodolfo Pelaez and her mother Carlota Sepulveda. Dulces grandfather Vicente Sepulveda died intestate and
Dulce was then only about 4 years old. According to the Atty. Pelaez, his grandmother Carlota repeatedly
demanded the delivery of her mothers share in the 11 parcels of land, but Sepulveda, Sr. who by then was the
Municipal Mayor of Tudela, refused to do so. Dulce, likewise, later demanded the delivery of her share in the
eleven parcels of land, but Pedro Sepulveda, Sr. still refused, claiming that he needed to continue to possess the
property to reap the produce therefrom which he used for the payment of the realty taxes on the subject
properties. The Atty. Pelaez alleged that he himself demanded the delivery of his mothers share in the subject
properties on so many occasions, the last of which was in 1972, to no avail.

Atty. Pelaez further narrated that his granduncle executed an affidavit, stating that he was the sole heir
of Dionisia when she died intestate, when, in fact, the latter was survived by her three sons, Santiago, Pedro and
Vicente. Pedro Sepulveda, Sr. also executed a Deed of Absolute Sale the property covered by T.D. No. 19804
(T.D. No. 35090) in favor of the City of Danao for P7,492.00. According to the Atty. Pelaez, his granduncle
received this amount without Atty. Pelaez’ knowledge.

Two causes of actions were raised in the case at bar; the common to the first and second causes of action
are the following: ordering the defendant to pay the plaintiff the amount of P50,000.00 as moral damages,
exemplary damages, to deliver to the plaintiff the latters share of the fruits of the 11 parcels of land, the
litigation expenses, attorney’s fee of P12,000.00 and granting the plaintiff such other reliefs and remedies as he
may be entitle to in accordance with the law and equity.

Petitioner’s Contention:
 Sepulveda, Sr. admitted having executed a deed of sale over the parcel of land covered by T.D. No.
19804 in favor of Danao City, but averred that the latter failed to pay the purchase price thereof; besides, the
private respondent had no right to share in the proceeds of the said sale. He likewise denied having received any
demand for the delivery of Dulces share of the subject properties from the latters mother Carlota, or from the
private respondent.

During the trial, Sepulveda, Sr. died intestate. A petition for the settlement of his estate was filed with
the RTC of Cebu, docketed as Special Proceeding No. SF-37. His daughter, petitioner Socorro Sepulveda
Lawas, was appointed administratrix of his estate. In compliance with the decision of this Court in Lawas v.
Court of Appeal, the petitioner substituted the deceased.

To prove the delivery of Dulces share under the project of partition, the petitioner presented the
Affidavit of Consolidation she executed in October 1940 covering thirteen (13) of the twenty-five (25) parcels
of land which were deeded to her under the Project of Partition, as well as the Order of the then CFI in Special
Proceeding No. 778-R, denying Carlotas motion for the reconstitution of the records of the said case, and for the
delivery of Dulces share in the eleven parcels of land. The court likewise declared therein that Dulce, through
her grandchildren and her mother, Carlota, had already received her share of the estate from Pedro Sepulveda,
Sr. as early as January 10, 1938.

According to the petitioner, Dulce and Pedro Sepulveda, Sr. had a verbal agreement wherein the eleven
parcels of land covered by the complaint would serve as the latters compensation for his services as
administrator of Dionisias estate. Thus, upon the termination of Special Proceeding No. 778-0, and subsequent
to the distribution of the shares of Dionisias heirs, Pedro Sepulveda, Sr. then became the sole owner of Dulces
shares. The petitioner likewise adduced evidence that Santiago Sepulveda died intestate and was survived by his
wife, Paz Velez Sepulveda and their then minor children. It was pointed out that the private respondent failed to
implead Paz Sepulveda and her minor children as parties-defendants in the complaint. It was further claimed
that Pedro Sepulveda, Sr. declared the property covered by T.D. No. 18199 under his name for taxation
purposes since the beginning of 1948. It was likewise alleged that the eleven (11) parcels of land deeded to
Dulce under the Project of Partition had been declared for taxation purposes under the name of Pedro Sepulveda
since 1974, and that he and his heirs paid the realty taxes thereon.

RTC - The trial court ruled that the private respondents action for reconveyance based on constructive
trust had not yet prescribed when the complaint was filed; that he was entitled to a share in the proceeds of the
sale of the property to Danao City; and that the partition of the subject property among the adjudicatees thereof
was in order.

COURT OF APPEALS - It affirmed the decision of the RTC.

Issue: WHETHER OR NOT THE REGIONAL TRIAL COURT IN DANAO CITY THAT PAYMENT
WAS MADE BY DANAO CITY FOR ONE (1) OF THE ELEVEN (11) PARCELS INVOLVED IN THE
CASE AND OF WHICH HEREIN RESPONDENT SHOULD BE PAID BY PETITIONER ONE THIRD (1/3)
OF THE PURCHASE PRICE.

Ruling: The petition is granted for the sole reason that the respondent failed to implead as parties, all
the indispensable parties in his complaint.

As gleaned from the material averments of the complaint and the reliefs prayed for therein, the private
respondent, as plaintiff therein, sought the recovery of the ownership and possession of the ten (10) parcels of
land and the partition thereof; and for the payment of his share in the proceeds of the sale of the property which
Pedro Sepulveda, Sr. sold to Danao City amounting to P7,492.00, which Pedro Sepulveda, Sr. claimed was left
unpaid. It appears that when the private respondent filed the complaint, his father, Rodolfo Pelaez, was still
alive. Thus, when his mother Dulce Pelaez died intestate on March 2, 1944, her husband Rodolfo and their son,
the private respondent, survived her. Under Article 996 of the New Civil Code, Rodolfo Pelaez, as surviving
spouse, is entitled to a portion in usufruct equal to that corresponding by way of legitime to each of the
legitimate children who has not received any betterment. The rights of the usufructuary are provided in Articles
471 to 490 of the old Civil Code.

Under articles 807 and 834 of the old Civil Code the surviving spouse is a forced heir and entitled to a
share in usufruct in the estate of the deceased spouse equal to that which by way of legitime corresponds or
belongs to each of the legitimate children or descendants who have not been bettered or have not received any
share in the one-third share destined for betterment. The right of the surviving spouse to have a share in usufruct
in the estate of the deceased spouse is provided by law of which such spouse cannot be deprived and which
cannot be ignored. Of course, the spouse may waive it but the waiver must be express.

Section 1, Rule 69 of the Rules of Court provides that in an action for partition, all persons interested in
the property shall be joined as defendants.

Thus, all the co-heirs and persons having an interest in the property are indispensable parties; as such, an
action for partition will not lie without the joinder of the said parties. The mere fact that Pedro Sepulveda, Sr.
has repudiated the co-ownership between him and the respondent does not deprive the trial court of jurisdiction
to take cognizance of the action for partition, for, in a complaint for partition, the plaintiff seeks, first, a
declaration that he is a co-owner of the subject property; and, second, the conveyance of his lawful shares.

In the present action, the private respondent, as the plaintiff in the trial court, failed to implead the
following indispensable parties: his father, Rodolfo Pelaez; the heirs of Santiago Sepulveda, namely, Paz
Sepulveda and their children; and the City of Danao which purchased the property covered by T.D. 19804 (T.D.
No. 35090) from Pedro Sepulveda, Sr. and maintained that it had failed to pay for the purchase price of the
property. Rodolfo Pelaez is an indispensable party he being entitled to a share in usufruct, equal to the share of
the respondent in the subject properties. There is no showing that Rodolfo Pelaez had waived his right to
usufruct.

RULE 3, SEC. 7.Compulsory joinder of indispensable parties. Parties in interest without whom no final
determination can be had of an action shall be joined either as plaintiffs or defendants.

Indeed, the presence of all indispensable parties is a condition sine qua non for the exercise of judicial
power. It is precisely when an indispensable party is not before the court that the action should be dismissed.
Thus, the plaintiff is mandated to implead all the indispensable parties, considering that the absence of one such
party renders all subsequent actions of the court null and void for want of authority to act, not only as to the
absent parties but even as to those present. One who is a party to a case is not bound by any decision of the
court, otherwise, he will be deprived of his right to due process. Without the presence of all the other heirs as
plaintiffs, the trial court could not validly render judgment and grant relief in favor of the private respondent.
The failure of the private respondent to implead the other heirs as parties-plaintiffs constituted a legal obstacle
to the trial court and the appellate courts exercise of judicial power over the said case, and rendered any orders
or judgments rendered therein a nullity.

To reiterate, the absence of an indispensable party renders all subsequent actions of the court null and
void for want of authority to act, not only as to the absent parties but even as to those present. Hence, the trial
court should have ordered the dismissal of the complaint.
 VICTORIANO BORLASA, ET AL. v. VICENTE POLISTICO, ET AL.
G.R. No. L-22909. January 28, 1925.

FACTS: The plaintiffs and defendants, together with several hundred other persons, formed an association
under the name of Turuhan Polistico & Co. Polistico, the principal defendant herein, was elected president and
treasurer of the association, and his house in Lilio, Laguna, was made its principal place of business. Under the
by-laws, each member obligated himself to pay to Polistico, before 3 o'clock in the afternoon of every Sunday
the sum of 50 centavos, except that on every fifth Sunday the amount was P1, if the president elected to call this
amount, as he always did. It is alleged that from April, 1911, until April, 1917, the sums of money mentioned
above were paid weekly by all of the members of the society with few irregularities. The inducement to these
weekly contributions was found in provisions of the by-laws to the effect that a lottery should be conducted
weekly among the members and that the successful member should be paid the amount collected each week,
from which, however, the president-treasurer of the society was to receive the sum of P200, to be held by him
as funds of the society, to which, Polistico allegedly received P74,000.

Borlasa and others filed an action against Vicente Polistico and others, chiefly for the purpose of
securing the dissolution of Turuhan Polistico & Co., and to compel the defendants to account for and surrender
the money and property of the association in order that its affairs may be liquidated and its assets applied
according to law. The defendants in the complaint are the members of the board of directors of the association.

In an amended answer the defendants raised the question of lack of parties and set out a list of some
hundreds of persons whom they alleged should be brought in as parties defendant on the ground, among others,
that they were in default in the payment of their dues to the association.

The court made an order requiring the plaintiffs to amend their complaint within a stated period so as to
include all of the members of theTurnuhan Polistico & Co. either as plaintiffs or defendants. The plaintiffs
excepted to this order, but acquiesced to the extent of amending their complaint by adding as additional parties
plaintiff some hundreds of persons. The defendants demurred to the amended complaint on the ground that it
showed on its face a lack of necessary parties. The trial judge having sustained a demurrer for defect of parties
and the plaintiffs electing not to amend, the cause was dismissed, and from this order an appeal was taken by
the plaintiffs to Supreme Court.

ISSUE: Whether or not all the members of the association must be pleaded either as plaintiffs or defendants.

HELD: NO. The situation involved is precisely the one contemplated in section 118 of the Code of Civil
Procedure, where one or more may sue for the benefit of all. It is evident from the showing made in the
complaint, and from the proceedings in the court below, that it would be impossible to make all of the persons
in interest parties to the cases and to require all of the members of the association to be joined as parties would
be tantamount to a denial of justice.
 The general rule with reference to the making of parties in a civil action requires, of course, the joinder
of all necessary parties wherever possible, and the joinder of all indispensable parties under any and all
conditions, the presence of those latter being a sine qua non of the exercise of judicial power. The class suit
contemplates an exceptional situation where there are numerous persons all in the same plight and all together
constituting a constituency whose presence in the litigation is absolutely indispensable to the administration of
justice. Here the strict application of the rule as to indispensable parties would require that each and every
individual in the class should be present. But at this point the practice is so far relaxed as to permit the suit to
proceed, when the class is sufficient represented to enable the court to deal properly and justly with that interest
and with all other interest involved in the suit. In the class suit, then, representation of a class interest which will
be affected by the judgment is indispensable; but it is not indispensable to make each member of the class an
actual party.
The addition of some hundreds of persons to the number of the plaintiffs, was unnecessary, and as the
presence of so many parties is bound to prove embarrassing to the litigation from death or removal. Upon the
return of this record to the lower court for further proceedings, the plaintiff shall again amend their complaint
by dismissing as to unnecessary parties plaintiffs, but retaining a sufficient number of responsible persons to
secure liability for costs and fairly to present all the members of the association.

The order appealed from is reversed, the demurrer of the defendants based upon supposed lack of parties
is overruled, and the defendants are required to answer to the amended complaint within the time allowed by
law and the rules of the court.
 Oposa vs Factoran
GR No. 101083. July 30 1993.

FACTS: A taxpayer’s class suit was filed by minors Juan Antonio Oposa, et al., representing their generation
and generations yet unborn, and represented by their parents against Fulgencio Factoran Jr., Secretary of
DENR. They prayed that judgment be rendered ordering the defendant, his agents, representatives and other
persons acting in his behalf to:

1. Cancel all existing Timber Licensing Agreements (TLA) in the country;

2. Cease and desist from receiving, accepting, processing, renewing, or appraising new TLAs:
and granting the plaintiffs “such other reliefs just and equitable under the premises.”

They alleged that they have a clear and constitutional right to a balanced and healthful ecology and are
entitled to protection by the State in its capacity as parens patriae. Furthermore, they claim that the act of the
defendant in allowing TLA holders to cut and deforest the remaining forests constitutes a misappropriation
and/or impairment of the natural resources property he holds in trust for the benefit of the plaintiff minors and
succeeding generations.

The defendant filed a motion to dismiss the complaint on the following grounds:

1. Plaintiffs have no cause of action against him;

2. The issues raised by the plaintiffs is a political question which properly pertains to the legislative or
executive branches of the government.

ISSUE: Whether or not the petitioner-minors have a cause of action in filing a class suit to prevent the
misappropriation or impairment of Philippine rainforests.

HELD: Yes. Petitioner-minors assert that they represent their generation as well as generations to come. The
Supreme Court ruled that they can, for themselves, for others of their generation, and for the succeeding
generation, file a class suit. Their personality to sue in behalf of succeeding generations is based on the concept
of intergenerational responsibility insofar as the right to a balanced and healthful ecology is concerned. Such a
right considers the “rhythm and harmony of nature” which indispensably include, inter alia, the judicious
disposition, utilization, management, renewal and conservation of the country’s forest, mineral, land, waters,
fisheries, wildlife, offshore areas and other natural resources to the end that their exploration, development, and
utilization be equitably accessible to the present as well as the future generations. Needless to say, every
generation has a responsibility to the next to preserve that rhythm and harmony for the full enjoyment of a
balanced and healthful ecology. Put a little differently, the minor’s assertion of their right to a sound
environment constitutes at the same time, the performance of their obligation to ensure the protection of that
right for the generations to come.
 Ortigas & Co., Limited Partnership v. Ruiz, 148 SCRA 326

FACTS: The case involves a large tract of land located in the boundaries of Pasig, Rizal and Ortigas wherein
the said petitioners thru their predecessors-in-interest "Provincial del Santisima Nombre de Jesus de Agustinos
Calzados," has been in continuous possession since 1862 or 125 years ago, as confirmed by the Court in
Compana Agricola de Ultramar v. Marcos Domingo, et al., 6 Phil. 246 (1906), when it affirmed the decision of
the Court of Land Registration declaring the Compana Agricola de Ultramar, also one of petitioner's
predecessors-in-interest, owner of the lands in question to the exclusion of the claims of contestants or any
persons holding under them. Said titles are in the Registry of Deeds of Rizal.

Pedro del Rosario and three others in behalf of 104 others, as a class suit, filed a civil case against the
petitioner alleging that said title of the petitioner should be declared as null and void for lack of publication in
the land registry proceedings and declaring that they are the lawful owners of the said land.

Another civil case was instituted by Inocencio Bernardo and five others in behalf of 37 others, as a class
suit, concerning another portion of the said land. Said case was identical to the case file by Pedro del Rosario
and others.An urgent ex-parte motion of private respondents, opposing among others, petitioner's construction
of fences and high walls, roads, streets and canals on the land in dispute.In the resolution of the Supreme Court
directed the issuance of a writ of preliminary injunction upon petitioner's filing of a bond in the sum of ten
thousand pesos (P10,000.00), enjoining respondent Court from enforcing the restraining order.

ISSUE: Whether or not there is a valid class suit.

HELD: No. The Supreme Court cited the case of (Borlaza v. Polistico, 47 Phil. 348; Newsweek, Inc. v. The
Intermediate Appellate Court, et al., G.R. No. 63559, promulgated May 30, 1986) where in it stated that, “It is
not a case where one or more may sue for the benefit of all or where the representation of class interest affected
by the judgment or decree is indispensable to make each member of the class an actual party.”Furthermore,
class suit will not lie because each defendant has an interest only in the particular portion of the said land that
each of them occupies. They do not have any common interest in the subject matter in controversy.
RIVIERA FILIPINA, INC., v. COURT OF APPEALS, JUAN L. REYES, (now deceased), substituted by
his heirs, namely, Estefania B. Reyes, Juanita R. de la Rosa, Juan B. Reyes, Jr. and Fidel B. Reyes,
PHILIPPINE CYPRESS CONSTRUCTION & DEVELOPMENT CORPORATION, CORNHILL
TRADING CORPORATION and URBAN DEVELOPMENT BANK.
G.R. No. 117355. April 5, 2002.

FACTS: Respondent Juan L. Reyes (Reyes) 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. The subject land is mortgaged in favor of
Prudential Bank. Since Reyes’ loan remained unpaid, the bank extrajudicially foreclosed the property. At the
auction sale, the bank was declared 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. Recognizing Riviera’s right of first refusal, the subject land was first offered to
Riviera, through its President Vicente C. Angeles. The first offer made by Reyes was at 5,000/sqm. However,
Angeles bargained at 3,500/sqm. After seven months, Angeles offered to buy the property at 4,000/sqm. Reyes
did not accept the offer as he wanted to sell it at 6,000/sqm. At this point, no agreement was still arrived. On
Nov. 2, 1988,Reyes, through its counsel, sent a letter informing Riviera that Reyes was selling the property at
6,000/sqm and that Riviera is given 10 days to purchase the property. As reply, Riviera sent a letter making an
offer at 5,000/sqm. However, still no agreement was made between the parties.

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.

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.

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. Estanislao Alinea, 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.
 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.

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.
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).

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.Both the trial
court and the appellate court rendered judgment in favor of Reyes.

ISSUE: Whether or not the CA committee a grave abuse of discretion tantamount to lack or excess of its
jurisdiction in deciding petitioner’s appeal at a time when the principal appellee is allegedly dead and no proper
substitution of the alleged deceased party has been made; Hence, the decision of the CA and its resolution
denying reconsideration, is null and void.

HELD: No. On the last error attributed to the Court of Appeals which is the effect on the jurisdiction of the
appellate court of the non-substitution of Reyes, who died during the pendency of the appeal, the Court notes
that when Riviera filed its petition with this Court and assigned this error, it later filed on October 27, 1994 a
Manifestation with the Court of Appeals stating that it has discovered that Reyes is already dead, in view of
which the appellate court issued a Resolution dated December 16, 1994 which noted the manifestation of
Riviera and directed the counsel of Reyes to submit a copy of the latter’s death certificate and to file the proper
motion for substitution of party.Complying therewith, the necessary motion for substitution of deceased Reyes,
who died on January 7, 1994, was filed by the heirs, namely, Estefania B. Reyes, Juanita R. de la Rosa, Juan B.
Reyes, Jr. and Fidel B. Reyes. Acting on the motion for substitution, the Court of Appeals granted the same.

Notwithstanding the foregoing, 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.
 SOCORRO SEPULVEDA LAWAS, vs. COURT OF APPEALS, HON. BERNARDO LL. SALAS, [as
Judge, CFI, Cebu, Branch VIII], and PACIFICO PELAEZ.
G.R. No. L-45809. December 12, 1986.

FACTS: This is an appeal by certiorari under Rule 45 of the Revised Rules of Court from the decision of the
Court of Appeals which dismissed the petition for certiorari under, Rule 65 of said Rules against respondent
Judge Bernardo L. Salas of the Court of First Instance (CFI) of Cebu. The antecedent facts are briefly as
follows:

Private respondent Pacifico Pelaez filed a Complaint on December 6, 1972 against petitioner's father,
Pedro Sepulveda, for ownership and partition of certain parcels of land. Defendant Pedro Sepulveda filed his
Answer dated December 31, 1972 resisting the claim and raising the special defenses of laches, prescription and
failure to ventilate in a previous special proceeding. During the presentation of evidence for the plaintiff, the
defendant died on March 25, 1975. On May 21, 1975, counsels for the deceased defendant filed a notice of
death wherein were enumerated the thirteen children and surviving spouse of the deceased.

On May 5, 1975, petitioner filed a petition for letters of administration and she was appointed judicial
administratrix of the estate of her late father in July, 1976. At the hearing of the case on November 27, 1975,
Attys. Domingo Antigua and Serafin Branzuela, former counsels for the deceased defendant, manifested in
open court that with the death of their client, their contract with him was also terminated and none of the
thirteen children nor the surviving spouse had renewed the contract, but instead they had engaged the services
of other lawyers in the intestate proceedings. Notwithstanding the manifestation of the former counsels of the
deceased defendant, the respondent trial judge set the case for hearing on January 13, 1976 and sent the notice
of hearing to said counsels.

On January 13, 1976, the respondent trial judge issued three orders. The first order substituted the heirs
of the deceased defendant, namely, his thirteen children and surviving spouse, as defendants; the second order
authorized Atty. Teodoro Almase, counsel for the plaintiff, to present his evidence in the absence of Attys.
Antigua and Branzuela and the third order treated the case submitted for decision, after the plaintiff had
presented his evidence and rested his case, and directed that said counsels and the fourteen heirs of the deceased
defendant be furnished copies thereof.

On January 28, 1976, the respondent trial judge rendered a decision against the heirs of the deceased
defendant. On February 19, 1976, ten of the children of the deceased defendant, who apparently did not know
that a decision had already been rendered, filed an Answer in-substitution of the deceased defendant through
their counsel Atty. Jesus Yray. This was denied admission by the respondent trial judge for being already moot
and academic because of the earlier decision.

On March 9, 1976, the widow and two other children of the deceased defendant, through their counsel
Atty. Delfin Quijano, filed a motion for substitution and for reconsideration of the decision dated January 28,
1976. On April 7, 1976, the respondent trial judge issued an order setting aside his decision and setting the case
in the calendar for cross-examination of the plaintiff, Pacifico Pelaez, with a proviso that said order was
applicable only to the three heirs who had filed the motion. On July 14, 1976, the respondent trial judge lifted
the order setting aside his decision, despite the verbal petition for postponement of the hearing made by one of
the three heirs on the ground of the absence of their counsel.

On July 9, 1976, petitioner, who had been appointed judicial administratrix of the estate of the deceased
defendant and who was one of the heirs who had filed an Answer on February 19, 1976, filed a motion to
intervene and/or substitute the deceased defendant. On August 25, 1976, the respondent trial judge denied the
motion for the reason that the decision had already become final.

Petitioner then filed a special civil action of certiorari with the Court of Appeals to annul the
proceedings in the respondent trial court. However, the Court of Appeals dismissed the petition for certiorari.
Hence, the present appeal.

ISSUE: Whether or not the CFI and CA erred in its decision for failure to comply with Sec. 16, Rule 3, Rules
of Court.

HELD: Yes. The appeal is meritorious. Section 16 of Rule 3 provides as follows:

Duty of attorney upon death, incapacity, or incompetency of party. — Whenever a party to a pending case dies, becomes
incapacitated or incompetent, it shall be the duty of his attorney to inform the court promptly of such death, incapacity or
incompetency, and to give the name and residence of his executor, administrator, guardian or other legal representative.

The former counsels for the deceased defendant, Pedro Sepulveda, complied with this rule by filing a
notice of death on May 21, 1975. They also correctly manifested in open court at the hearing of the case on
November 27, 1975, that with the death of their client their contract with him was also terminated and none of
the heirs of the deceased had renewed the contract, and the heirs had instead engaged the services of other
lawyers in the intestate proceedings.

Both the respondent trial judge and the CA erred in considering the former counsels of the deceased
defendant as counsels for the heirs of the deceased. The statement in the decision of the CA that "the
appearance of the lawyers of their deceased father in court on January 13, 1976 carries the presumption that
they were authorized by the heirs of the deceased defendant" is erroneous. Moreover, such a presumption was
not warranted in view of the manifestation of said lawyers in open court on November 27, 1975 that they were
not representing the heirs of the deceased defendant.

Consequently, when on the same date, November 27, 1975, the respondent trial judge issued an order
setting the continuation of the trial of the case on January 13, 1976, with notices sent to Atty. Almase for the
plaintiff and Attys. Antigua and Branzuela for the deceased defendant, he acted with grave abuse of discretion
amounting to excess of jurisdiction.

It was only at the hearing on January 13, 1976 that the respondent trial judge issued an order substituting
the deceased defendant with his fourteen heirs. This was followed with an order authorizing counsel for the
plaintiff to present his evidence in the absence of Attys. Antigua and Branzuela, and lastly, an order treating the
case as submitted for decision.

In the order of the respondent trial judge dated November 10, 1976, denying petitioner's motion for
reconsideration of the order denying her motion for intervention, mention was made of the delayed arrival of
Attys. Antigua and Branzuela at the hearing on January 13, 1976 and of their being allowed to cross-examine
the plaintiff himself.

The refusal of said former counsels of the deceased defendant to cross-examine the plaintiff was
justified —
 ... in view of the intervening event of appellant's death and the interposition of the equally established principle that the
relationship of attorney and client is terminated by the death of the client, as acknowledged by respondent court itself as well as
respondents. In the absence of a retainer from the heirs or authorized representatives of his deceased defendant the attorney would
have no further power or authority to appear or take any further action in the case, save to inform the court of the client's death and
take the necessary steps to safeguard the decedent's rights in the case. (Vda. de Haberer vs. Court of Appeals, May 26, 1981, 104
SCRA 534, 540)

Moreover, as above stated, petitioner had as early as May 5, 1975 filed a petition for letters of
administration, and the same was granted in July, 1975. Section 17 of Rule 3 provides as follows:

Death of party. After a party dies and the claim is not thereby extinguished, the court shag order, upon proper notice, the legal
representative of the deceased to appear and to be substituted for the deceased, within a period of thirty (30) days, or within such time
as may be granted. If the legal representative fails to appear within said time, the court may order the opposing party to procure the
appointment of a legal representative of the deceased within a time to be specified by the court, and the representative shall
immediately appear for and on behalf of the interest of the deceased. The court charges involved in procuring such appointment, if
defrayed by the opposing party, may be recovered as costs. The heirs of the de ceased may be allowed to be substituted for the
deceased, without requiring the appointment of an executor or administrator and the court may appoint guardian ad litem for the minor
heirs.

As this Court has held:

... Under the Rule, it is the court that is called upon, after notice of a party's death and the claim is not thereby extinguished,
to order upon proper notice the legal representative of the deceased to appear within a period of 30 days or such time as it may grant.
Since no administrator of the estate of the deceased appellant had yet been appointed as the same was still pending determination in
the Court of First Instance of Quezon City, the motion of the deceased's counsel for the suspension of the running of the period within
which to file appellant's brief was well-taken. More, under the Rule, it should have set a period for the substitution of the deceased
party with her legal representative or heirs, failing which, the court is called upon to order the opposing party to procure the
appointment of a legal representative of the deceased at the cost of the deceased's estate, and such representative shall then
'immediately appear for and on behalf of the interest of the deceased.

Respondent court gravely erred in not following the Rule and requiring the appearance of the legal
representative of the deceased and instead dismissing the appeal of the deceased who yet had to be substituted
in the pending appeal Thus, it has been held that when a party dies in an action that survives, and no order is
issued by the court for the appearance of the legal representative or of the heirs of the deceased in substitution
of the deceased, and as a matter of fact no such substitution has ever been effected, the trial held by the court
without such legal representatives or heirs and the judgment rendered after such trial are null and void because
the court acquired no jurisdiction over the persons of the legal representatives or of the heirs upon whom the
trial and the judgment would be binding. (Ordoveza vs. Raymundo, 63 Phil 275 [1936]; Obut vs. Court of
Appeals, et al., 70 SCRA 546) (Vda. de Haberer vs. Court of Appeals, supra, p. 541.

Under the said Rule, priority is given to the legal representative of the deceased, that is, the executor or
administrator of his estate. It is only in cases of unreasonable delay in the appointment of an executor or
administrator, or in cases where the heirs resort to an extrajudicial settlement of the estate, that the court may
adopt the alternative of allowing the heirs of the deceased to be substituted for the deceased.

In the case at bar, in view of the pendency of Special Proceeding No. 37-SF Intestate Estate of Pedro
Sepulveda, and the pending application of petitioner to be appointed judicial administratrix of the estate, the
respondent trial judge should have awaited the appointment of petitioner and granted her motion to substitute
the deceased defendant. While the lower courts correctly held that the death of Pedro Sepulveda did not
obliterate his verified Answer to the Complaint filed by private respondent and that the Answer filed by the ten
heirs and the Answer filed by the Administratrix were both unnecessary, the said heirs or the administratrix
could, with leave of court, file an Amended Answer.

In view of the foregoing, the Court rules that the proceedings conducted by the respondent trial judge
after the death of the deceased defendant are null and void.
 Armand Nocum and the Philippine Daily Inquirer v. Lucio Tan.
G.R. No. 145022. September 23, 2005.

FACTS: On September 27, 1998, Lucio Tan filed a complaint against reporter Armand Nocum, Capt. Florendo
Umali, ALPAP and Inquirer with the Regional Trial Court of Makati seeking moral and exemplary damages for
the alleged malicious and defamatory imputations contained in a news article. INQUIRER and NOCUM filed
their joint answer, dated October 27, 1998, wherein they alleged that: (1) the complaint failed to state a cause of
action; (2) the defamatory statements alleged in the complaint were general conclusions without factual
premises; (3) the questioned news report constituted fair and true report on the matters of public interest
concerning a public figure and therefore, was privileged in nature; and (4) malice on their part was negated by
the publication in the same article of plaintiffs or PALs side of the dispute with the pilots union. ALPAP and
UMALI likewise filed their joint answer, dated October 31, 1998, and alleged therein that: (1) the complaint
stated no cause of action; (2) venue was improperly laid; and (3) plaintiff Lucio Tan was not a real party in
interest. It appeared that the complaint failed to state the residence of the complainant at the time of the alleged
commission of the offense and the place where the libelous article was printed and first published.

RTC Makati: Dismissed the complaint without prejudice on the ground of improper venue.

Tan filed an Omnibus Motion dated February 24, 1999, seeking reconsideration of the dismissal and
admission of the amended complaint. It included, inter alia, that: the questioned article was printed and first
published in the City of Makati and that the questioned caricature was printed and first published in the City of
Makati.

RTC Makati: admitted the amended complaint and deemed set aside the previous order of dismissal,
inter alia, that: The mistake or deficiency in the original complaint appears now to have been cured in the
Amended Complaint which can still be properly admitted, pursuant to Rule 10 of the 1997 Rules of Civil
Procedure, inasmuch as the Order of dismissal is not yet final. Besides, there is no substantial amendment in the
Amended Complaint which would affect the defendants’ defenses and their Answers. The Amendment is
merely formal, contrary to the contention of the defendants that it is substantial.

CA: Two petitions for certiorari were filed, one filed by petitioners and the other by defendants Umali
and ALPAP. The two petitions were consolidated. In April 2000, it ordered the dismissal of the petition and
thereby affirming the RTC decision. Motions for reconsideration was filed but was denied.

On 11 December 2000, the Court required respondent Tan to comment on the petition filed by
petitioners.Respondent filed his comment on 22 January 2001[4] to which petitioners filed a reply on 26 April
2001.In a Manifestation filed on 19 February 2001, respondent stated that the petition[6] filed by defendants
Umali and ALPAP has already been denied by the Court in a resolution dated 17 January 2001.On 20 August
2003, the Court resolved to give due course to the petition and required the parties to submit their respective
memoranda within thirty (30) days from notice. Both petitioners and respondent complied.

ISSUE: Whether or not the RTC of Makati has jurisdiction over the case upon the filing of the original
complaint for damages.
HELD: Yes. It is settled that jurisdiction is conferred by law based on the facts alleged in the complaint since
the latter comprises a concise statement of the ultimate facts constituting the plaintiff's causes of action. In the
case at bar, after examining the original complaint, we find that the RTC acquired jurisdiction over the case
when the case was filed before it. From the allegations thereof, respondent’s cause of action is for damages
arising from libel, the jurisdiction of which is vested with the RTC.

Petitioners are confusing jurisdiction with venue. Hon. Florenz D. Regalado differentiated jurisdiction
and venue as follows: (a) Jurisdiction is the authority to hear and determine a case; venue is the place where the
case is to be heard or tried; (b) Jurisdiction is a matter of substantive law; venue, of procedural law; (c)
Jurisdiction establishes a relation between the court and the subject matter; venue, a relation between plaintiff
and defendant, or petitioner and respondent; and, (d) Jurisdiction is fixed by law and cannot be conferred by the
parties; venue may be conferred by the act or agreement of the parties.

In the case at bar, the additional allegations in the Amended Complaint that the article and the caricature
were printed and first published in the City of Makati referred only to the question of venue and not jurisdiction.
These additional allegations would neither confer jurisdiction on the RTC nor would respondents failure to
include the same in the original complaint divest the lower court of its jurisdiction over the case. Respondents
failure to allege these allegations gave the lower court the power, upon motion by a party, to dismiss the
complaint on the ground that venue was not properly laid.

The rules on venue in Article 360 as follows:

1. Whether the offended party is a public official or a private person, the criminal action may be filed in the
Court of First Instance of the province or city where the libelous article is printed and first published.

2. If the offended party is a private individual, the criminal action may also be filed in the Court of First Instance
of the province where he actually resided at the time of the commission of the offense.

3. If the offended party is a public officer whose office is in Manila at the time of the commission of the offense,
the action may be filed in the Court of First Instance of Manila.

4. If the offended party is a public officer holding office outside of Manila, the action may be filed in the
Court of First Instance of the province or city where he held office at the time of the commission of the
offense.

It is a well-established rule that venue has nothing to do with jurisdiction, except in criminal actions.
Assuming that venue were properly laid in the court where the action was instituted, that would be procedural,
not a jurisdictional impediment. In fact, in civil cases, venue may be waived. Consequently, by dismissing the
case on the ground of improper venue, the lower court had jurisdiction over the case. Apparently, the herein
petitioners recognized this jurisdiction by filing their answers to the complaint, albeit, questioning the propriety
of venue, instead of a motion to dismiss.

The Court held that dismissal of the complaint by the lower court was proper considering that the
complaint, indeed, on its face, failed to allege neither the residence of the complainant nor the place where the
libelous article was printed and first published. Nevertheless, before the finality of the dismissal, the same may
still be amended as in fact the amended complaint was admitted, in view of the court a quos jurisdiction, of
which it was never divested. In so doing, the court acted properly and without any grave abuse of discretion.

Petitioners argument that the lower court has no jurisdiction over the case because respondent failed to
allege the place where the libelous articles were printed and first published would have been tenable if the case
filed were a criminal case. The failure of the original complaint to contain such information would be fatal
because this fact involves the issue of venue which goes into the territorial jurisdiction of the court. This is not
to be because the case before us is a civil action where venue is not jurisdictional.

Paglaum Management & Development Corp. and Health Marketing Technologies, Inc., vs Union Bank of
the Philippines, Notary Public John Doe, and Register of Deeds of Cebu City and Cebu Province.
G.R. No. 179018. June 18, 2012.

FACTS: Paglaum Management and Development Corporation is the registered owner of three parcels of land
located in Cebu. Union Bank extended HealthTech a credit line and to secure this obligation Paglaum exectuted
three Real Estate Mortgages in favor of Union Bank. The parties entered into a Restructuring Agreement, which
states that any action or proceeding arising out of the transaction shall be commenced in Makati City, with both
parties waiving any other venue. The restructuring was due to HealthTech’s failure to meet its obligations after
the Asian financial crisis adversely affected its business. Despite the restructuring, Heatltech still failed to pay
its obligation which prompted Union Bank to institute foreclosure proceedings. Union Bank extra-judicially
foreclosed the mortgaged properties. The bank filed a Petition for Consolidation of Title after it won the auction
sale.

HealthTech later filed a Complaint for Annulment of Sale and Titles with Damages and Application for
Temporary Restraining Order and Writ of Injunction, praying for: (a) the issuance of a temporary restraining
order, and later a writ of preliminary injunction, directing Union Bank to refrain from exercising acts of
ownership over the foreclosed properties; (b) the annulment of the extra-judicial foreclosure of real properties;
(c) the cancellation of the registration of the Certificates of Sale and the resulting titles issued; (d) the
reinstatement of PAGLAUMs ownership over the subject properties; and (e) the payment of damages. The
complaint was filed in Makati City.

Union Bank filed a motion to dismiss of the grounds of, lack of jurisdiction over the issuance of the
injunctive relief, improper venue, and lack of authority if the person who signed the Complaint. This motion
was granted resulting in the dismissal of the case. Paglaum and HealhTech elevated the case to the CA but was
denied.
Now, PAGLAUM and HealthTech argue that: (a) the Restructuring Agreement governs the choice of venue
between the parties, and (b) the agreement on the choice of venue must be interpreted with the convenience of
the parties in mind and the view that any obscurity therein was caused by Union Bank.

ISSUE: Whether or not Makati City is the proper venue to assail the foreclosure of the subject real estate
mortgage.

HELD: Yes, Makati City is the proper venue to assail the foreclosure of the subject real estate mortgage.

In the present case, although the action is a real action, where the properties are situated in Cebu,
Paglaum and Union Bank have stipulated that the venue of any case arising from their transaction would be in
Makati City. The phrase “ waive any other venue” shows that the choice of venue was only Makati City

According to Section 1of Rule 4 of the Rules of Court: Venue of real actions. Actions affecting title to
or possession of real property, or interest therein, shall be commenced and tried in the proper court which has
jurisdiction over the area wherein the real property involved, or a portion thereof, is situated.
Forcible entry and detainer actions shall be commenced and tried in the municipal trial court of the municipality
or city wherein the real property involved, or a portion thereof, is situated
 According to Sec 3. Rule 4 of the Rules of Court: Sec. 3. When Rule not applicable. This Rule shall not
apply
a) In those cases where a specific rule or law provides otherwise; or
b) Where the parties have validly agreed in writing before the filing of the action on the exclusive venue
thereof

According to the Supreme Court in Sps. Lantin v. Lantion, “the general rules on venue of actions shall
not apply where the parties, before the filing of the action, have validly agreed in writing on an exclusive venue.
The mere stipulation on the venue of an action, however, is not enough to preclude parties from bringing a case
in other venues. The parties must be able to show that such stipulation is exclusive. In the absence of qualifying
or restrictive words, the stipulation should be deemed as merely an agreement on an additional forum, not as
limiting venue to the specified place.”

Motion for Reconsideration April 17, 2013

Union Bank for the first time, raised three new arguments. First that the restructuring agreement was
null and void because the condition precedent that the borrower should not be in default, was not complied with.
Second even if the Restructuring Agreement is enforceable, it was only between Health Tech and Union Bank.
PAGLAUM was a party only to the Real Estate Mortgages (which was entered into before the Restructuring
Agreement) and not to the Restructuring Agreement. Therefore, the venue insofar as it is concerned is
exclusively in Cebu City pursuant to the venue stipulation in the mortgage contracts. Third, that the RTC’s
assumption of jurisdiction over the case was without basis because, the Complaint being an accion
reinvindicatoria the assessed value of the real property determines which court has jurisdiction. It further argues
that the complaint does not show the assessed value of the parcels of land.

The Supreme Court denied the Motion for Reconsideration because the issues were raised for the first
time in a motion for reconsideration. All new issues or defences were deemed waived because they should have
been brought up in the first opportunity.
 Polytrade Corp. v. Blanco, 30 SCRA 187

FACTS: Suit before the Court of First Instance of Bulacan on four causes of action to recover the purchase
price of rawhide delivered by plaintiff to defendant. Plaintiff corporation has its principal office and place of
business in Makati, Rizal. Defendant is a resident of Meycauayan, Bulacan. Defendant moved to dismiss upon
the ground of improper venue. He claims that by contract suit may only be lodged in the courts of Manila. The
Bulacan court overruled him. He did not answer the complaint. In consequence, a default judgment was
rendered against him on September 21, 1966, thus:

WHEREFORE, judgment is hereby rendered in favor of plaintiff and against defendant ordering defendant to pay plaintiff
the following amounts:

First Cause of Action — P60,845.67, with interest thereon at 1% a month from May 9, 1965 until the
full amount is paid.

Second Cause of Action — P51,952.55, with interest thereon at 1% a month from March 30, 1965 until the
full amount is paid.

Third Cause of Action — P53,973.07, with interest thereon at 1% a month from July 3, 1965 until the
full amount is paid.

Fourth Cause of Action — P41,075.22, with interest thereon at 1% a month until the full amount is paid.

In addition, defendant shall pay plaintiff attorney's fees amounting to 25% of the principal amount due in each cause of
action, and the costs of the suit. The amount of P400.00 shall be deducted from the total amount due plaintiff in accordance with this
judgment.

Defendant appealed.

ISSUE: Whether or not venue was properly laid in the province of Bulacan where defendant is a resident.

HELD: Yes, venue was proper. Section 2 (b), Rule 4 of the Rules of Court on venue of personal actions triable
by courts of first instance — and this is one — provides that such "actions may be commenced and tried 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." Qualifying this provision in Section 3 of the same Rule which states that
venue may be stipulated by written agreement — "By written agreement of the parties the venue of an action
may be changed or transferred from one province to another."

Defendant places his case upon Section 3 of Rule 4 just quoted. According to defendant, plaintiff and
defendant, by written contracts covering the four causes of action, stipulated that: "The parties agree to sue and
be sued in the Courts of Manila." This agreement is valid. Defendant says that because of such covenant he can
only be sued in the courts of Manila. We are thus called upon to shake meaning from the terms of the agreement
just quoted.

No such stipulation appears in the contracts covering the first two causes of action. The general rule set
forth in Section 2 (b), Rule 4, governs, and as to said two causes of action, venue was properly laid in Bulacan,
the province of defendant's residence. The stipulation adverted to is only found in the agreements covering the
third and fourth causes of action. An accurate reading, however, of the stipulation, "The parties agree to sue and
be sued in the Courts of Manila," does not preclude the filing of suits in the residence of plaintiff or defendant.
 The plain meaning is that the parties merely consented to be sued in Manila. Qualifying or restrictive
words which would indicate that Manila and Manila alone is the venue are totally absent therefrom. We cannot
read into that clause that plaintiff and defendant bound themselves to file suits with respect to the last two
transactions in question only or exclusively in Manila. It simply is permissive.

The parties solely agreed to add the courts of Manila as tribunals to which they may resort. They did not
waive their right to pursue remedy in the courts specifically mentioned in Section 2(b) of Rule 4. Renuntiatio
non praesumitur.
 Sweet Lines Inc. v. Hon. Judge Bernardo Teves, Leovigildo Tandog Jr. and Rogelio Tiro.
G.R. No. L-37750. May 19, 1978.

FACTS: Respondents Atty. Leovigildo Tandog and Rogelio Tiro bought two tickets in the branch office of
Sweet Lines at Cagayan de Oro City (CDO) for Voyage 90 aswere scheduled to board in the petitioner’s vessel
M/S Sweet Hope bound for Tagbilaran City via the port of Cebu. However, upon knowing that the vessel will
not anymore proceed to Bohol, Tandog and Tiro went again to the branch office of Sweet Lines for proper
relocation to M/S Sweet Town. And while on board on the said vessel, the two were forced to hide at the
cargoes section of the ship to avoid the inspection being conducted by the Philippine Coastguard since the
vessel already reached its passenger capacity. During the trip, Tandog and Tiro alleged that they were exposed
to the scorching heat of the sun and dust coming from the cargoes. They also claimed that the tickets they
bought in CDO were dishonored as they were constrained to pay for other tickets. The incident prompted
Tandog and Tiro to sue Sweet Lines for damages and for breach of contract of carriage before the CFI of
Misamis Oriental.

Sweet Lines moved to dismiss the case on the ground of improper venue basing the said dismissal on the
condition printed at the back of the tickets that where in any case, all actions arising out of the conditions and
provisions of the said tickets shall only be filed in the courts in the city of Cebu.

Thereafter, Respondent Judge Teves denied the motion to dismiss filed by Sweet Lines which thereafter
filed a motion for reconsideration from the order of denial but to no avail. Thus, Sweet Lines filed an instant
petition for prohibition for preliminary injunction to the Supreme Court praying that the respondent judge be
restrained from proceeding further with the case filed by Tandog and Tiro for grave abuse of discretion
amounting to lack of jurisdiction.

Sweet Lines contends that the condition printed on the tickets is valid and enforceable since Tandog and
Tiro acceded to it when they purchased the same in CDO and took its vessel M/S Sweet Town as a relocation
vessel. They also argued that the condition is binding among the respondents since it is a valid waiver of venue.
On the other hand, respondents countered that the said condition is invalid considering that the same is not an
essential element of the contract of carriage, being in itself a separate agreement which requires the mutual
consent of both parties. They also claimed that such condition is prepared solely by Sweet Lines by which they
could not refuse, leaving them no choice but to pay and avail the said tickets out of necessity.

ISSUES: (1) Whether or not the condition printed at the back of the ticket which limits the venue of actions
arising from the contract of carriage is valid and enforceable.

(2) Whether or not the condition constitutes a valid waiver as to venue

HELD: (1) No. The condition printed on the ticket is void and unenforceable.

The one involved in the case is a contract of adhesion in which the validity and/or enforceability will
have to be determined by peculiar circumstances obtaining in each case and the nature of the conditions or
terms sought to be enforced. Generally, contracts of adhesion are drafted and prepared only by one party and is
sought to be accepted or adhered by the other party who cannot change the same and who are thus made to
adhere thereto on the “take it” or “leave it” basis. Because of such imbalance nature of this kind of contract,
jurisprudence formulated certain guidelines in the determination of their validity and enforceability in order to
establish justice and fair play by placing the weaker party on equal footing with another who solely prepared the
same.

In the case at bar, the Court ruled that such condition imposed on the ticket by petitioner Sweet Lines is
void and unenforceable for it would be unfair, considering that Sweet Lines is engaged in inter-land shipping
transportation business, to bind passengers to the terms of conditions printed at the back of the tickets and
prejudice their rights and interests to file suits against the petitioner as it solely imposed that such actions should
only be filed in the courts of Cebu city. And under these circumstances, it is hardly just and proper to expect the
passengers to examine their tickets received from crowded/congested counters, more often than not during rush
hours, for conditions that may be printed much charge them with having consented to the conditions, so printed,
especially if there are a number of such conditions in fine print, as in this case.

With regard to the rules on venue, the Court held that:

“The condition cited above is subversive of public policy on transfers of venue of actions. For, although
venue may be changed or transferred from one province to another by agreement of the parties in writing in
relation to Rule 4, Section 3, of the Rules of Court, such agreement will not be held valid where it practically
negates the action of the claimants, such as the private respondents herein. The philosophy underlying the
provisions on transfer of venue of actions is the convenience of the plaintiffs as well as his witnesses and to
promote the ends of justice. Considering the expense and trouble a passenger residing outside of Cebu City
would incur to prosecute a claim in the City of Cebu, he would most probably decide not to file the action at all.
The condition will thus defeat, instead of enhance, the ends of justice. Upon the other hand, petitioner has
branches or offices in the respective ports of call of its vessels and can afford to litigate in any of these places.
Hence, the filing of the suit in the CFI of Misamis Oriental, as was done in the instant case, will not cause
inconvenience to, much less prejudice, petitioner”.
 Republic of the Philippines vs. Sandiganbayan et al.
G.R. No. 152154. July 15, 2003.

FACTS: In December 1991, Republic, through the Presidential Commission on Good Government (PCGG),
filed a petition for forfeiture before the Sandiganbayan, pursuant to Republic Act 1379. The petition sought the
declaration of the amount of US$356 million (now estimated to be more than US$658 million inclusive of
interest) deposited in escrow in the PNB, as ill-gotten wealth of the Marcos family. The funds were previously
deposited in Swiss banks under the name of various foreign foundations.

Before the case was set for pre-trial, the Marcos children and then PCGG Chairman Magtanggol Gunigundo
executed a “General Agreement and the Supplemental Agreements” (hereafter “Agreements”), dated December
28, 1993, for a global settlement of the assets of the Marcos family. The Agreement specified in its whereas
clause that the Philippine government had "obtained a judgment from the Swiss Federal Tribunal on December
21, 1990, that the US$356 million belongs in principle to the Republic of the Philippines provided certain
conditionalities are met...”

Subsequently, the Marcos children filed a motion for the approval of said Agreements. While hearings were
being conducted on the said motion, the Republic filed a motion for summary judgment and/or judgment on the
pleadings.

The Sandiganbayan initially granted Republic's motion for summary judgment on the ground that “there is no
issue of fact which calls for the presentation of evidence.” However, it later reversed itself and denied the
motion for summary judgment on the ground that the original copies of the authenticated Swiss decisions and
their "authenticated translations" have not been submitted to the court.

ISSUES:

1. Whether or not Certiorari lies.

2. Whether or not there can be Summary Judgment.
3. Whether or not the Marcoses were able to specifically deny allegations.
4. Whether or not the Republic is Guilty of Estopppel by Laches.
5. Whether or not the Forfeiture was proper.
6. Whether or not Admissions remain binding even if document which contained it is declared defective.
7. Whether or not the Non-Joinder of Indispensible Party Deprives the Court of Jurisdiction to Try the
Case.

HELD:

Propriety of Certiorari when Remedy of Appeal is Available

1. This case was treated as an exception to the general rule governing petitions for certiorari. Normally,
decisions of the Sandiganbayan are brought before this Court under Rule 45, not Rule 65.[20] But where the
case is undeniably ingrained with immense public interest, public policy and deep historical repercussions,
certiorari is allowed notwithstanding the existence and availability of the remedy of appeal.

2. In all the alleged ill-gotten wealth cases filed by the PCGG, this Court has seen fit to set aside technicalities
and formalities that merely serve to delay or impede judicious resolution.

Propriety of Summary Judgment

3. The respondent Marcoses failed to raise any genuine issue of fact in their pleadings. Thus, on motion of
petitioner Republic, summary judgment should take place as a matter of right.

4. Summary judgment is a judgment which a court may render before trial but after both parties have pleaded.
It is ordered by the court upon application by one party, supported by affidavits, depositions or other
documents, with notice upon the adverse party who may in turn file an opposition supported also by affidavits,
depositions or other documents. This is after the court summarily hears both parties with their respective proofs
and finds that there is no genuine issue between them. (See Auman vs. Estenzo)

5. Summary judgment is sanctioned in this jurisdiction by Section 1, Rule 35 of the 1997 Rules of Civil
Procedure, to wit:

SECTION 1. Summary judgment for claimant.- A party seeking to recover upon a claim, counterclaim, or
cross-claim or to obtain a declaratory relief may, at any time after the pleading in answer thereto has been
served, move with supporting affidavits, depositions or admissions for a summary judgment in his favor upon
all or any part thereof.

6. Summary judgment is proper when there is clearly no genuine issue as to any material fact in the
action. The theory of summary judgment is that, although an answer may on its face appear to tender issues
requiring trial, if it is demonstrated by affidavits, depositions or admissions that those issues are not genuine but
sham or fictitious, the Court is justified in dispensing with the trial and rendering summary judgment for
petitioner.

7. It is the law itself which determines when summary judgment is called for. Under the rules, summary
judgment is appropriate when there are no genuine issues of fact requiring the presentation of evidence in a full-
blown trial. Even if on their face the pleadings appear to raise issue, if the affidavits, depositions and admissions
show that such issues are not genuine, then summary judgment as prescribed by the rules must ensue as a matter
of law.

Marcoses failed to tender any genuine issue in their answer

8. A genuine issue is an issue of fact which calls for the presentation of evidence as distinguished from an issue
which is fictitious and contrived, set up in bad faith or patently lacking in substance so as not to constitute a
genuine issue for trial.

9. The Court finds that respondent Mrs. Marcos and the Marcos children indubitably failed to tender genuine
issues in their answer to the petition for forfeiture. Their defenses of "lack of knowledge for lack of privity" or
"(inability to) recall because it happened a long time ago" or, on the part of Mrs. Marcos, that "the funds were
lawfully acquired" are fully insufficient to tender genuine issues. Respondent Marcoses' defenses were a sham
and evidently calibrated to compound and confuse the issues. Since no genuine issue was raised, the case
became ripe for summary judgment

Marcoses failed to specifically deny allegations

10. In their answer, respondents failed to specifically deny each and every allegation contained in the petition
for forfeiture in the manner required by the rules. As to Mrs Marcos, her assertion that the funds were lawfully
acquired is unaccompanied by any factual support which can prove, by the presentation of evidence at a
hearing, that indeed the funds were acquired legitimately by the Marcos family
11. It is true that one of the modes of specific denial under the rules is a denial through a statement that the
defendant is “without knowledge or information sufficient to form a belief as to the truth of the material
averment in the complaint.” The question, however, is whether the kind of denial in respondents' answer
qualifies as the specific denial called for by the rules. We do not think so. If an allegation directly and
specifically charges a party with having done, performed or committed a particular act which the latter
did not in fact do, perform or commit, a categorical and express denial must be made. (see Morales vs.
Court of Appeals)

12. It is worthy to note that the pertinent documents attached to the petition for forfeiture were even signed
personally by respondent Mrs. Marcos and her late husband, Ferdinand E. Marcos, indicating that said
documents were within their knowledge. How could respondents therefore claim lack of sufficient knowledge
or information regarding the existence of the Swiss bank deposits and the creation of five groups of accounts
when Mrs. Marcos and her late husband personally masterminded and participated in the formation and control
of said foundations? This is a fact respondent Marcoses were never able to explain.

13. When matters regarding which respondents claim to have no knowledge or information sufficient to form a
belief are plainly and necessarily within their knowledge, their alleged ignorance or lack of information will not
be considered a specific denial. An unexplained denial of information within the control of the pleader, or is
readily accessible to him, is evasive and is insufficient to constitute an effective denial. Simply put, a
profession of ignorance about a fact which is patently and necessarily within the pleader's knowledge or
means of knowing is as ineffective as no denial at all.Respondents' ineffective denial thus failed to properly
tender an issue and the averments contained in the petition for forfeiture were deemed judicially admitted by
them

Negative pregnant

14. The denial of respondents in paragraph 22 of their answer was worded as follows: “Respondents
specifically DENY paragraph 23 insofar as it alleges that Respondents clandestinely stashed the country's
wealth in Switzerland and hid the same under layers and layers of foundations and corporate entities for being
false, the truth being that Respondents' aforesaid properties were lawfully acquired.”

15. This particular denial is in the nature of a negative pregnant, that is, a denial pregnant with the admission of
the substantial facts in the pleading responded to which are not squarely denied. It was in effect an admission of
the averments it was directed at. Stated otherwise, a negative pregnant is a form of negative expression
which carries with it an affirmation or at least an implication of some kind favorable to the adverse
party. It is a denial pregnant with an admission of the substantial facts alleged in the pleading. Where a fact is
alleged with qualifying or modifying language and the words of the allegation as so qualified or modified are
literally denied, has been held that the qualifying circumstances alone are denied while the fact itself is
admitted.

16. The denial contained in paragraph 22 of the answer was focused on the averment in paragraph 23 of the
petition for forfeiture that "Respondents clandestinely stashed the country's wealth in Switzerland and hid the
same under layers and layers of foundations and corporate entities." Paragraph 22 of the respondents' answer
was thus a denial pregnant with admissions of the following substantial facts: (1) the Swiss bank deposits
existed and (2) that the estimated sum thereof was US$356 million as of December, 1990.

17. Therefore, the allegations in the petition for forfeiture on the existence of the Swiss bank deposits in the
sum of about US$356 million, not having been specifically denied by respondents in their answer, were deemed
admitted by them pursuant to Section 11, Rule 8 of the 1997 Revised Rules on Civil Procedure: “Material
averment in the complaint, xxx shall be deemed admitted when not specifically denied.”
Motion for Summary Judgment allowed at any stage of the litigation

18. Petitioner moved for summary judgment after pre-trial and before its scheduled date for presentation of
evidence. Respondent Marcoses argue that, by agreeing to proceed to trial during the pre-trial conference,
petitioner "waived" its right to summary judgment.

19. The phrase "anytime after the pleading in answer thereto has been served" in Section 1, Rule 35 of our
Rules of Civil Procedure means "at any stage of the litigation." Whenever it becomes evident at any stage of the
litigation that no triable issue exists, or that the defenses raised by the defendant(s) are sham or frivolous,
plaintiff may move for summary judgment. A contrary interpretation would go against the very objective of the
Rule on Summary Judgment which is to "weed out sham claims or defenses thereby avoiding the expense and
loss of time involved in a trial."

20. Petitioner Republic could validly move for summary judgment any time after the respondents' answer was
filed or, for that matter, at any subsequent stage of the litigation. The fact that petitioner agreed to proceed to
trial did not in any way prevent it from moving for summary judgment, as indeed no genuine issue of fact was
ever validly raised by respondent Marcoses.

Republic not Guilty of Estopppel by Laches

21. Estoppel by laches is the failure or neglect for an unreasonable or unexplained length of time to do that
which, by exercising due diligence, could or should have been done earlier, warranting a presumption that the
person has abandoned his right or declined to assert it. In effect, therefore, the principle of laches is one of
estoppel because "it prevents people who have slept on their rights from prejudicing the rights of third parties
who have placed reliance on the inaction of the original parties and their successors-in-interest".

22. Records show that petitioner was in fact never remiss in pursuing its case against respondent Marcoses
through every remedy available to it, including the motion for summary judgment.

23. In invoking the doctrine of estoppel by laches, respondents must show not only unjustified inaction but also
that some unfair injury to them might result unless the action is barred.

24. But even assuming for the sake of argument that laches had already set in, the doctrine of estoppel or
laches does not apply when the government sues as a sovereign or asserts governmental rights. Nor can
estoppel validate an act that contravenes law or public policy.

Propriety of Forfeiture

25. The law raises the prima facie presumption that a property is unlawfully acquired, hence subject to
forfeiture, if its amount or value is manifestly disproportionate to the official salary and other lawful income of
the public officer who owns it. (See Sections 2 and 6 of Republic Act No. 1379)

26. The total accumulated salaries of Mr and Mrs Marcos amounted to P2,319,583.33. Converted to U.S.
dollars on the basis of the corresponding peso-dollar exchange rates prevailing during the applicable period
when said salaries were received, the total amount had an equivalent value of US$304,372.43. Since the
President and his family were constitutionally prohibited from receiving any other emolument during their
tenure, their only known lawful income of $304,372.43 can therefore legally and fairly serve as basis for
determining the existence of a prima facie case of forfeiture of the Swiss funds.

Admissions remain binding even if document which contained it is declared defective

27. The General and Supplemental Agreements were declared by the court to be null and void. Respondent
therefore insist that nothing in those agreements could thus be admitted in evidence against them.

28. The declaration of nullity of said agreements was premised on the following constitutional and statutory
infirmities: (1) the grant of criminal immunity to the Marcos heirs was against the law; (2) the PCGG's
commitment to exempt from all forms of taxes the properties to be retained by the Marcos heirs was against the
Constitution; and (3) the government's undertaking to cause the dismissal of all cases filed against the Marcoses
pending before the Sandiganbayan and other courts encroached on the powers of the judiciary. The reasons
relied upon by the Court never in the least bit even touched on the veracity and truthfulness of respondents'
admission with respect to their ownership of the Swiss funds.

29. The declaration of nullity of the two agreements rendered the same without legal effects but it did not
detract from the admissions of the respondents contained therein. The admissions made in said agreements
remain binding on the respondents

30. A written statement is nonetheless competent as an admission even if it is contained in a document which is
not itself effective for the purpose for which it is made, either by reason of illegality, or incompetency of a party
thereto, or by reason of not being signed, executed or delivered. Accordingly, contracts have been held as
competent evidence of admissions, although they may be unenforceable.

Judicial Admission

31. An admission made in the pleadings cannot be controverted by the party making such admission and
becomes conclusive on him, and that all proofs submitted by him contrary thereto or inconsistent therewith
should be ignored, whether an objection is interposed by the adverse party or not.

32. In the absence of a compelling reason to the contrary, respondents' judicial admission of ownership of the
Swiss deposits is definitely binding on them.

Admission by Privies and Admission by Co-Parties

33. Section 31, Rule 130 of the Rules of Court, provides: “ Where one derives title to property from another,
the act, declaration, or omission of the latter, while holding the title, in relation to the property, is evidence
against the former”

34. The declarations of a person are admissible against a party whenever a "privity of estate" exists between the
declarant and the party, the term "privity of estate" generally denoting a succession in rights. Consequently, an
admission of one in privity with a party to the record is competent. Without doubt, privity exists among the
respondents in this case. And where several co-parties to the record are jointly interested in the subject matter of
the controversy, the admission of one is competent against all.

Non-Joinder of Indispensible Party Does Not Deprive Court of Jurisdiction to Try the Case

35. Republic did not err in not impleading the foreign foundations. Section 7, Rule 3 of the 1997 Rules of Civil
Procedure, provides for the compulsory joinder of indispensable parties. Generally, an indispensable party must
be impleaded for the complete determination of the suit. However, failure to join an indispensable party does
not divest the court of jurisdiction since the rule regarding indispensable parties is founded on equitable
considerations and is not jurisdictional. Thus, the court is not divested of its power to render a decision even
in the absence of indispensable parties, though such judgment is not binding on the non-joined party.

36. There are two essential tests of an indispensable party: (1) can relief be afforded the plaintiff without the
presence of the other party? and (2) can the case be decided on its merits without prejudicing the rights of the
other party? There is, however, no fixed formula for determining who is an indispensable party; this can only be
determined in the context and by the facts of the particular suit or litigation.

37. The foreign foundations were set up to conceal the illegally acquired funds of the Marcos spouses. Thus,
they were simply the res in the action for recovery of ill-gotten wealth and did not have to be impleaded for lack
of cause of action or ground to implead them.

38. As to corporations organized with ill-gotten wealth, but are not themselves guilty of misappropriation, fraud
or other illicit conduct - in other words, the companies themselves are not the object or thing involved in the
action, the res thereof - there is no need to implead them either. Indeed, their impleading is not proper on the
strength alone of their having been formed with ill-gotten funds, absent any other particular wrongdoing on
their part

39. Assuming arguendo, however, that the foundations were indispensable parties, the failure of petitioner to
implead them was a curable error. The Rules of Court prohibit the dismissal of a suit on the ground of non-
joinder or misjoinder of parties and allows the amendment of the complaint at any stage of the proceedings,
through motion or on order of the court on its own initiative.

Failure to submit authenticated translations of the Swiss decision not fatal to Republic's cause

40. The presentation of the authenticated translations of the original copies of the Swiss decision was not de
rigueur for the Sandiganbayan to make findings of fact and reach its conclusions. In short, the Sandiganbayan's
decision was not dependent on the determination of the Swiss courts. For that matter, neither is this Court's.

41. The release of the Swiss funds held in escrow in the PNB is dependent solely on the decision of this
jurisdiction that said funds belong to the petitioner Republic. What is important is our own assessment of the
sufficiency of the evidence to rule in favor of either petitioner Republic or respondent Marcoses. In this
instance, despite the absence of the authenticated translations of the Swiss decisions, the evidence on hand tilts
convincingly in favor of petitioner Republic.

42. The respondent Marcoses failed to justify the lawful nature of their acquisition of the said assets. Hence, the
Swiss deposits should be considered ill-gotten wealth and forfeited in favor of the State in accordance with
Section 6 of RA 1379
 Philtranco Services Enterprises, Inc. v. Felix Paras and
Inland Trailways, Inc. and Hon. Court of Appeals.
G.R. No. 161909. April 25, 2012.

FACTS: Felix Paras, on his way home to Manila from Bicol Region, he boarded a bus owned and operated by
Inland Trailways, Inc.While the said bus was travelling along Maarlika Highway, Tiaong Quezon, around
3:50am of 09 February 1987, it was bumped at the rear by another bus owned and operated by Philtranco
Service Enterprises, Inc. As a result of the strong and violent impact, the Inland bus was pushed forward and
smashed into a cargo truck parked along the outer right portion of the highway and the shoulder thereof.

The accident brought considerable damage to the vehicles, caused physical injuries to the passengers
and crew of the two buses, and took the life of Inland’s driver. Paras also suffered from contusions, dislocation
of the hip, and fractures.Inland refused to give financial assistance to Paras, and the latter filed a complaint for
breach of contract of carriage against Inland. In its defense, Inland claims that the proximate cause of the
injuries of Paras was the bus of Philtranco. Inland, with leave of court, filed a third party complaint against
Philtranco and its bus driver.

The RTC ordered Philtranco and its driver to pay damages to Paras. All parties appealed to the CA
which affirmed the liability of Philtranco and its driver. It awarded moral damages and exemplary damages.

ISSUE: Whether or not the award of moral damages and temperate damages is improper.

HELD: No. There is no issue that the proximate cause of the injury of Paras and material damage to Inland is
caused by the negligence of Philtranco and its driver.

1. Award of moral damages proper.

As a general rule, indeed, moral damages are not recoverable in an action predicated on a breach of
contract. By way of exception, it may be recoverable even if an action is predicated on breach of contract where
(a) the mishap results in death of a passenger, and (b) where the common carrier has been guilty of fraud or bad
faith.

In this case, even if this action does not fall under either exception, the award is proper. Undeniably,
Inland filed its third-party complaint against Philtranco and its driver in order to establish in this action that
they, instead of Inland, should be directly liable to Paras for the physical injuries he had sustained because of
their negligence. The apparent objective of Inland was to obtain a different relief whereby the third-party
defendants would be held directly, fully and solely liable to Paras and Inland for whatever damages each had
suffered from the negligence committed by Philtranco and its driver. In other words, Philtranco and its driver
were charged here as joint tortfeasors who would be jointly and severally be liable to Paras and Inland.

Impleading Philtranco and its driver under a third party complaint is correct. The impleader of new
parties under this rule is proper only when a right to relief exists under the applicable substantive law. The
substantive law backing Inland’s claim is Art. 2176 and Art. 2180 of the Civil Code, which deals with quasi-
delicts and vicarious liability of employers over the acts or omissions of their employees, respectively.
 The institution of the third party complaint is also properly made. The requisites for a third-party action
are:
(1) The party to be impleaded must not yet be a party to the action;

(2) that the claim against the third-party defendant must belong to the original defendant;

(3) the claim of the original defendant against the third-party defendant must be based upon the plaintiffs
claim against the original defendant; and,

(4) the defendant is attempting to transfer to the third-party defendant the liability asserted against him
by the original plaintiff.

Paras cause of action against Inland (breach of contract of carriage) did not need to be the same as the
cause of action of Inland against Philtranco and its driver (tort or quasi-delict) in the impleader. The third-party
claim need not be based on the same theory as the main claim.

Nor was it a pre-requisite for attachment of the liability to Philtranco and its driver that Inland be first
declared and found liable to Paras for the breach of its contract of carriage with him as precisely, the theory of
defendant is that it is the third party defendant, and not he, who is directly liable to plaintiff.

2. Award of temperate damages proper.

Actual damages, to be recoverable, must not only be capable of proof, but must actually be proved with
a reasonable degree of certainty. The reason is that the court cannot simply rely on speculation, conjecture or
guesswork in determining the fact and amount of damages, but there must be competent proof of the actual
amount of loss, credence can be given only to claims which are duly supported by receipts.

In this case, although both Paras and Inland both suffered from the negligence of Philtranco and its
driver, they were unable to show sufficient proof as to the actual amount of loss they sustained. Nevertheless,
the award of Temperate Damages was proper, per Art. 2224 of the Civil Code, which states that:

“Temperate or moderate damages, which are more than nominal but less than compensatory damages,
may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from
the nature of the case, be proved with certainty.”

Temperate damages are allowed because there are cases where from the nature of the case, definite proof of
pecuniary loss cannot be offered, although the court is convinced that there has been such loss. Such obtains in
this case.

It is relevant to clarify that awarding the temperate damages (for the substantial pecuniary losses
corresponding to Paras’ surgeries and rehabilitation and for the irreparability of Inlands damaged bus) and the
actual damages to compensate lost earnings and costs of medicines give rise to no incompatibility. These
damages cover distinct pecuniary losses suffered by Paras and Inland, and do not infringe the statutory
prohibition against recovering damages twice for the same act or omission.
 FELIX MARTOS, ET. AL. VS. NEW SAN JOSE BUILDERS, INC.
G.R. NO. 192650. OCTOBER 24, 2012.

FACTS: New San Jose Builders, Inc. (respondent) is a domestic corporation engaged in the construction of
road, bridges, buildings, and low cost houses primarily for the government. One of the projects of respondent is
the San Jose Plains Project (SJPP), located in Montalban, Rizal. SJPP, which is also known as the "Erap City"
calls for the construction of low cost housing, which are being turned over to the National Housing Authority to
be awarded to deserving poor families.

Sometime in 2000, respondent was constrained to suspend most of the works on the SJPP project due to
lack of funds of the National Housing Authority. The workers were, thus, informed that many of them would be
laid off and the rest would be reassigned to other projects. Juan Villaber, Terso Garay, Rowell Batta, Pastor
Pantig, Rafael Villa, and Melvin Garay were laid off. On the other hand, Felix Martos (Martos), Ariel
Dominguez, Greg Bisonia, Allan Caballera, Orlando Limos, Mandy Mamalateo, Eric Castrence, Anthony
Molina, and Roy Silva were among those who were issued new appointment papers to their respective
assignments, indicating therein that they were project employees. However, they refused to sign the
appointment papers as project employees and subsequently refused to continue to work. Three Complaints
were consolidated and assigned to the Labor Arbiter (LA).

Ruling of the Labor Arbiter

On May 23, 2003, the LA handed down a decision declaring, that Martos was illegally dismissed and
entitled to separation pay, backwages and other monetary benefits; and, dismissing, without prejudice, the
claims of the other complainants (petitioners).

Ruling of the NLRC

Both parties appealed the LA decision to the NLRC. And on July 30, 2008, the NLRC resolved the
appeal by dismissing the one filed by respondent and partially granting that of the other petitioners.
Respondents were ordered to pay respondents their salary differentials, service incentive leave pay, and 13th
month pay, using, as basis, the computation made on the claims of complainant Felix Martos.

Ruling of the CA

After the denial of its motion for reconsideration, respondent filed before the CA a petition for certiorari
under Rule 65 of the 1997 Rules of Civil Procedure, as amended, raising the issue of commission of grave
abuse of discretion by NLRC as to holding Martos regular employee, as to reviving complaints of the
petitioners despite failure to verify the same, and as to granting relief in favor of complainants who did not even
render service. On July 31, 2009, the CA rendered a decision reversing and setting aside the Decision and
Resolution of the NLRC and reinstating the Decision of the LA.

The CA found that the NLRC committed grave abuse of discretion in reviving the complaints of
petitioners despite their failure to verify the same. Out of the 102 complainants, only Martos verified the
position paper and his counsel never offered any explanation for his failure to secure the verification of the
others. The CA also held that the NLRC gravely abused its discretion when it took cognizance of petitioners’
appeal because Rule 41, Section 1(g) of the 1997 Rules of Civil Procedure, as amended, which is suppletory,
provides that no appeal may be taken from an order dismissing an action without prejudice.

With respect to Martos, the CA ruled that he was a regular employee of respondent and his termination
constitute constructive illegal dismissal. It explained that Martos should have been considered a regular
employee because there was no indication that he was merely a project employee when he was hired. To show
otherwise, respondent should have presented his employment contract for the alleged specific project and the
successive employment contracts for the different projects or phases for which he was hired. In the absence of
such document, he could not be considered a project employee because his work was necessary and desirable to
the respondent’s usual business and that he was not required to sign any employment contract fixing a definite
period or duration of his engagement. Notwithstanding, the respondent also failed to report the termination of
Martos’ supposed project employment to the Department of Labor and Employment, as required under
Department Order No. 19.

ISSUES: Whether or not the CA is correct in dismissing the complaints filed by those petitioners who failed to
verify their position papers.

HELD: Yes. The absence of a proper verification is cause to treat the pleading as unsigned and dismissible. The
verification requirement is significant, as it is intended to secure an assurance that the allegations in the pleading
are true and correct and not the product of the imagination or a matter of speculation, and that the pleading is
filed in good faith. Verification is deemed substantially complied with when, as in this case, one who has ample
knowledge to swear to the truth of the allegations in the complaint or petition signs the verification, and when
matters alleged in the petition have been made in good faith or are true and correct. The lone signature of
Martos would have been sufficient if he was authorized by his co-petitioners to sign for them. Unfortunately,
petitioners failed to adduce proof that he was so authorized. Considering that the dismissal of the other
complaints by the LA was without prejudice, the other complainants should have taken the necessary steps to
rectify their procedural mistake after the decision of the LA was rendered. They should have corrected this
procedural flaw by immediately filing another complaint with the correct verification this time. Surprisingly,
they did not even attempt to correct this technical blunder. Worse, they committed the same procedural error
when they filed their appeal with the NLRC. The petitioners were given a chance by the CA to comply with the
Rules when they filed their motion for reconsideration, but they refused to do so. Despite the opportunity given
to them to make all of them sign the verification and certification of non-forum shopping, they still failed to
comply. Thus, the CA was constrained to deny their motion and affirm the earlier resolution.
 Georgia T. Estel vs. Heirs of Recaredo P. Diego, Sr.
G.R. No. 174082. January 16, 2012.

FACTS: A Complaint for Forcible Entry, Damages and Injunction with Application for Temporary Restraining
Order filed by Recaredo P. Diego, Sr., and Recaredo R. Diego, Jr. with the Municipal Trial Court in Cities
(MTCC) of Gingoog City, Misamis Oriental. They alleged that:

1. On April 16, 1991, they entered into a contract of sale of a 306 –square-meter parcel of land with
Georgia Estel
2. After receiving the amount of P17,000.00 as downpayment, Estel delivered the physical and material
possession of the subject property to them;
3. They had been in actual, adverse and uninterrupted possession of the lot;
4. July 20, 1995, Estel, together with her two sons and five other persons, uprooted the fence
surrounding the disputed lot, after which they entered its premises and then cut and destroyed the trees and
plants found therein;
5. The Diegos prayed for the restoration of their possession, for the issuance of a permanent injunction
against Estel as well as payment of damages, attorney’s fees and costs of suit.

On July 26, 1995, the MTCC issued a Temporary Restraining Order against Estel and any person acting
in her behalf.

In her Answer with Special/Affirmative Defenses and Counterclaims, she denied the material allegations
in the Complaint, and contended that:

1. The Diegos were never in possession of the lot;

2. Estel had the full possession and absolute ownership of the lot
3. The agreement she entered into with the Diegos for the sale of the lot had been abrogated;she even
offered to return the amount she received from them, but they refused to accept
4. The subject of the deed of sale between her and the Diegos and what has been delivered to
respondents was actually Lot 16 which is adjacent to the disputed Lot 19;
5. That the improvements found on the subject lot were not destroyed, and in fact, any improvements
therein were planted by her parents.

MTCC rendered a Decision dismissing Estel’s counterclaim and ordered her, her agents and
representatives: 1. To vacate the premises of the land in question and return the same to the plaintiffs; 2. To pay
plaintiffs P100.00 a month as rentals ; P5,000.00 representing the value of the fence and plants damaged by the
defendants as actual damages; P20,000.00 as and for attorney’s fees; P2,000.00 for litigation expenses.

Estel appealed to the RTC of Gingoog City. The RTC rendered its Decision affirming the decision of the
MTC. She then filed a petition for review with the CA. The CA promulgated its Decision which affirmed the
Decision of the RTC. She filed a Motion for Reconsideration, but the CA denied it. She therefore appealed
before the Supreme Court.
ISSUES: (1) Whether or not MTCC acquired jurisdiction over the subject matter of the complaint on the
grounds that the Diegos failed to allege the location of the disputed parcel of land in their complaint, and that
there was failure to specifically allege facts constitutive of forcible entry in the complaint.

(2) Whether or not the defects in the Verification and Certification of Non-forum Shopping in the
Complaint will make it an unsigned pleading.

HELD: (1) No, the Supreme Court does not agree with Estel.
Estel did not raise the issue of jurisdiction or venue in her Answer filed with the MTCC. Even if the
geographical location of the subject property was not alleged in the Complaint, she failed to seasonably object
to it in her Affirmative Defense, and even actively participated in the proceedings before the MTCC. Thus, she
is already estopped from raising the said issue in the CA or before this Court.

Since the Complaint is for forcible entry, the jurisdiction over the subject matter of the case is, thus,
upon the MTCC of Gingoog City. The question whether or not the suit was brought in the place where the land
in dispute is located was no more than a matter of venue. Since there was no objection on the part of Estel, her
objection became a pure technicality.

As to the Diegos’ failure to allege facts constitutive of forcible entry, it is settled that in actions for
forcible entry, two allegations are mandatory for the municipal court to acquire jurisdiction: the plaintiff must
allege his prior physical possession of the property, and he must also allege that he was deprived of his
possession by means of force, intimidation, threats, strategy, and stealth.

In this case, it is clear that the Diegos sufficiently alleged in their Complaint the material facts
constituting forcible entry, as they explicitly claimed that they had prior physical possession of the subject
property since its purchase from Estel. They also particularly described in their complaint how Estel, her two
sons and five other persons, encroached upon the subject property and dispossessed them of the same.

(2) The alleged defect in the verification was not raised before the MTCC. Even granting that this matter
was properly raised before the court a quo, the Court finds that there is no procedural defect that would have
warranted the outright dismissal of respondents’ complaint as there is compliance with the requirement
regarding verification. A reading of the Diegos’ verification reveals that they complied with the the rule on
verification; they confirmed that they had read the allegations in the Complaint which were true and correct
based on their personal knowledge.

Verification is deemed substantially complied with when one who has ample knowledge to swear to the
truth of the allegations in the complaint or petition signs the verification, and when matters alleged in the
petition have been made in good faith or are true and correct.

As to the Diegos’ certification on non­forum shopping, a reading of their Verification/Certification

reveals that they, in fact, certified therein that they have not commenced any similar action before any other
court or tribunal and to the best of their knowledge no such other action is pending therein. The only missing
statement is their undertaking that if they should thereafter learn that the same or similar action has been filed or
is pending, they shall report such fact to the court. This, notwithstanding, the Court finds that there has been
substantial compliance on the part of respondents.

It is settled that with respect to the contents of the certification against forum shopping, the rule of
substantial compliance may be availed of because the requirement of strict compliance with the provisions
regarding the certification of non-forum shopping merely underscores its mandatory nature in that the
certification cannot be altogether dispensed with or its requirements completely disregarded.
Based on the foregoing, the petition was denied.
 Pascual and Santos, Inc. v. The Members of the Tramo Wakas Neighborhood Association, Inc.
G.R. No. 144880. November 17, 2004.

FACTS: The Members of Tramo Wakas Neighborhood Association, represented by Dominga Magno
(respondents), lodged before the Presidential Action Center a petition praying that ownership over three parcels
of land be awarded to them. In their petition, respondents alleged that petitioner claims ownership of the subject
lots which they have openly, peacefully and continuously occupied since 1957. The petition was referred to the
Land Management Bureau (LMB) for investigation and hearing. The petition was eventually decided by the
Director of the LMB in favor of the respondents. Its Motion for Reconsideration having been denied, petitioner
lodged an appeal before the Office of the DENR Secretary, which was subsequently dismissed for lack of merit
and affirmed the decision of the Director of the LMB. Petitioner’s appeal to the Office of the President was
likewise dismissed.

Petitioner subsequently filed its Petition for Review with the CA, praying that judgment be rendered (1)
reversing and setting aside the OP Decision and the DENR, and (2) declaring the subject lots as no longer
forming part of the public domain and have been validly acquired by petitioner; or in the alternative, (1)
allowing it to present additional evidence in support of its claim to the subject lots, (2) reversing and setting
aside the aforementioned Decisions and Order of the OP and the DENR, and (3) declaring the subject lots as no
longer forming part of the public domain and have been validly acquired by petitioner.

By Resolution, the CA dismissed the appeal due to infirm Verification and Certification of non-forum
shopping. The Verification and Certification of non-forum shopping was signed merely by Estela Lombos and
Anita Pascual who allege that they are the duly authorized representatives of petitioner corporation, without
showing any proof whatsoever of such authority. For another, and importantly, the petition for review was filed
a day after the period petitioner corporation was supposed to do so. Petitioner filed a Motion for
Reconsideration, arguing that there was no showing that the persons acting on its behalf were not authorized to
do so. Attached to the Motion was a Secretary's Certificate showing that petitioner's Board of Directors
approved a Resolution on appointing Estela Lombos and Anita Pascual, incumbent directors of the corporation,
as its duly authorized representatives who may sign all papers, execute all documents, and do such other acts as
may be necessary to prosecute the petition for review. CA denied the MR. Hence, petitioner filed a Petition for
Review on Certiorari to the SC.

ISSUE: WHETHER OR NOT THE PERSONS WHO EXECUTED THE VERIFICATION AND
CERTIFICATION OF NON-FORUM SHOPPING ATTACHED TO PSI'S MANIFESTATION/PETITION
FOR REVIEW FILED WITH THE COURT OF APPEALS WERE AUTHORIZED TO DO SO.

RULING:Yes. The requirement under the Rules of Court that the petitioner should sign the certificate of non-
forum shopping applies even to corporations, considering that the mandatory directives of the Rules of Court
make no distinction between natural and juridical persons. It is undisputed that when the petition for certiorari
was filed with the CA, there was no proof attached thereto that Lombos and Pascual were authorized to sign the
verification and non-forum shopping certification. Subsequent to the CA's dismissal of the petition, however,
petitioner filed a motion for reconsideration to which it attached a certificate issued by its board secretary
stating that on February 11, 2000 or prior to the filing of the petition, Lombos and Pascual had been authorized
by petitioner's board of directors to file the petition before the CA. This Court has ruled that the subsequent
submission of proof of authority to act on behalf of a petitioner corporation justifies the relaxation of the Rules
for the purpose of allowing its petition to be given due course. It must also be kept in mind that while the
requirement of the certificate of non-forum shopping is mandatory, nonetheless the requirements must not be
interpreted too literally and thus defeat the objective of preventing the undesirable practice of forum shopping.

ELSA D. MEDADO, petitioner, vs. HEIRS OF THE LATE ANTONIO CONSING, as represented by DR.
SOLEDAD CONSING, respondents.
G.R. No. 186720. February 8, 2012.

FACTS: Sometime in 1996, Spouses Meritus Rey Edado and, herein petitioner, Elsa D. Medado and the estate
of the late Antonio Consing (Estate of Consing), as represented by Soledad Consing, executed Deeds of Sale
with Assumption of Mortgage, wherein the latter sold to the said spouses the property known as Hacienda Sol
situated in Cadiz City. As part of the deal, Spouses Medado assumed the loan obligation of the Estate of
Consing with the Philippine National Bank (PNB).

Subsequently, however, the Estate of Consing offered the subject property to the government through
the Department of Agrarian Reform’s Voluntary Offer to Sell (VOS) Program. The Estate of Consing instituted
an action for rescission and damages (Civil Case No. 00-11320) with the Regional Trial Court (RTC) Branch 44
of Bacolod City against the Spouses Medado, PNB and the Register of Deeds (RD) of Cadiz City, due to
alleged failure of the Spouses Medado to meet the conditions in their agreement.

During the pendency of the Civil Case No. 00-11320, the Land Bank of the Philippines (LBP) issued in
favor of the Estate of Consing a certificate of deposit of cash and agrarian reform bonds, as compensation for
the property covered by the VOS.

Because of the fear of the Spouses Medado that the whole proceeds of the VOS might be released to the
Estate of Consing, since the former believed that they the ones entitled to such proceeds by virtue of the Deeds
of Assignment with Assumption of Mortgage, Spouses Medado filed an action for injunction with prayer for the
issuance of temporary restraining order (TRO) with the RTC, Branch 60 of Cadiz City (Civil Case No. 797-C).
Spouses Medado prayed that a writ of prohibitory injunction be issued to restrain LBP from releasing the
remaining amount of the VOS proceeds to the Estate of Consing, and restraining the Estate of Consing from
receiving these proceeds; and also prayed for the issuance of a writ of mandatory injunction to compel LBP to
release the remaining amount of the VOS to the spouses.

The RTC, Branch 60 of Cadiz City ruled in favor of Spouses Medado under Civil Case No. 797-C. And
despite the motion for reconsideration filed by the Estate of Consing, the said court issued the writs prayed for
by Spouses Medado. Thus, the Heirs of the late Antonio Consing (Heirs of Consing) withdrew their motion for
reconsideration and went to the Court of Appeals (CA) and filed a petition for certiorari. It should be noted that
the petition filed by the Heirs of Consing was signed only by Soledad Consing and not by all of the petitioners
in the CA.

The appellate court ruled in favor the Estate of Consing. The subsequent motion for reconsideration filed
by Spouses Medado was denied by the CA. Hence, the present petition to the Supreme Court (SC).

ISSUES: (1) Whether or not the CA was correct in admitting the petition for certiorari despite the fact that said
petition was defective because of the deficiencies in the verification and certification against forum shopping.
(Petition was signed only by Soledad Consing)
 (2) Whether or not the CA was correct in admitting the petition for certiorari of the Heirs of Consing
although no motion for reconsideration was filed with the lower court which rendered the judgment being
assailed.

(3) Whether or not there exists a violation of the rule against forum shopping in this case.

HELD: (1) Yes, the CA correctly admitted the petition despite the mentioned defect. The Court said that by
looking at the records, Soledad Consing possesses a Special Power of Attorney (SPA) wherein Soldedad
Consing was given the authority “to protect, sue, prosecute, defend and adopt whatever action necessary and
proper relative and with respect to her co-heirs’ right, interest and participation over the subject property.”

According to the Court, the authority of Soledad includes the filing of an appeal before the CA,
including the execution of a verification and certification against forum shopping therefor, being acts
necessary “to protect, sue, prosecute, defend and adopt whatever action necessary and proper” in relation to
their rights over the subject properties.

The Court further said that the verification requirement is simply intended to secure an assurance
that the allegations in the pleading are true and correct, and not the product of the imagination or a
matter of speculation, and that the pleading is filed in good faith and that where the petitioners are
immediate relatives, who share a common interest in the property subject of the action, the fact that only
one of the petitioners executed the verification or certification of forum shopping will not deter the court
from proceeding with the action.

Furthermore, it was held that verification of a pleading is a formal, not a jurisdictional, requirement
intended to secure the assurance that the matters alleged in a pleading are true and correct. Thus, the Court
may simply order the correction of unverified pleadings or act on them and waive strict compliance with
the Rules. It is deemed substantially complied with when one who has ample knowledge to swear to the
truth of the allegations in the complaint or petition signs the verification; and when matters alleged in the
petition have been made in good faith or are true and correct.

(2) Yes. Although as a general rule, a special civil action for certiorari cannot be filed without
filing a motion for reconsideration with the court which the rendered the decision sought to be assailed,
this rule admits of exceptions such as:

a. where the order is a patent nullity because the court a quo had no jurisdiction;
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;
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;
d. where, under the circumstances, a motion for reconsideration would be useless;
e. where the petitioner was deprived of due process and there is extreme urgency of relief;
f. where, in a criminal case, relief from an order of arrest is urgent and the grant of such relief by the
trial court is improbable;
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
i. where the issue raised is one purely of law or where public interest is involved.”

According to the Court, the present case falls under exception letter (d) where, under the circumstances,
a motion for reconsideration would be useless. In the present case, the Court agreed with the CA when the latter
court held that a motion for reconsideration, or the resolution of the trial court thereon, had become
useless given that the particular acts which the movants (Heirs of Consing) sought to prevent by the filing
of the motion were already carried out. Significantly, the Heirs of Consing had filed a motion for
reconsideration of the RTC’s order, but withdrew it only after the trial court had decided to implement the writs
notwithstanding the pendency of the motion and just a day before the scheduled hearing on said motion.

(3) Yes. There is forum shopping when the following requisites concur: (1) identity of parties, or at
least such parties as represent the same interests in both actions, (2) identity of rights asserted and relief
prayed for, the relief being founded on the same facts, and (3) the identity of the two preceding
particulars is such that any judgment rendered in the other action will, regardless of which party is
successful, amount to res judicata in the action under consideration. The Court ruled that theses requisites
are present in this case.

There is identity of parties representing the same interests in the two actions (Civil Case No. 00-11320
and Civil Case No. 797-C), both involving the estate and heirs of the late Consing on one hand, and Spouses
Medado on the other. The rescission case (Civil Case No. 00-11320) names “Soledad T. Consing, for herself
and as administratrix of the estate of Antonio Consing” as plaintiff, with “Spouses Meritus Rey and Elsa
Medado, PNB and the Register of Deeds of Cadiz City” as respondents. The injunction case (Civil Case No.
797-C), on the other hand, was instituted by Spouses Medado, against “LBP and the Heirs of the Late Antonio
Consing, as represented by Dra. Soledad Consing.” The primary litigants in the two actions, and their interests,
are the same.

There is an identity of rights asserted and reliefs prayed for in the two cases, with the reliefs being
founded on the same set of facts. In both cases, the parties claim their supposed right as owners of the subject
properties. They all anchor their claim of ownership on the deeds of absolute sale which they had executed, and
the law applicable thereto. They assert their respective rights, with Spouses Medado as buyers and the heirs as
sellers, based on the same set of facts that involve the deeds of sale’s contents and their validity. Both actions
necessarily involve a ruling on the validity of the same contract as against the same parties. Thus, the identity of
the two cases is such as would render the decision in the rescission case res judicata in the injunction case, and
vice versa.

It does not even matter that one action is for the enforcement of the parties’ agreements, while the
other action is for the rescission thereof.

The Court also mentioned the relevant factors that courts must consider when they have to
determine which case should be dismissed, given the pendency of two actions, to wit:

(1) The date of filing, with preference generally given to the first action filed to be retained;
(2) Whether the action sought to be dismissed was filed merely to pre-empt the latter action or to
anticipate its filing and lay the basis for its dismissal; and
(3) Whether the action is the appropriate vehicle for litigating the issues between the parties.
 Vivian T. Ramirez, et al. v. Mar Fishing Co., Inc., et al.
G.R. No. 168208. June 13, 2012.

FACTS: On 28 June 2001, respondent Mar Fishing Co., Inc. (Mar Fishing), engaged in the business of fishing
and canning of tuna, sold its principal assets to co-respondent Miramar Fishing Co., Inc. (Miramar) through
public bidding. The proceeds of the sale were paid to the Trade and Investment Corporation of the Philippines
(TIDCORP) to cover Mar Fishings outstanding obligation in the amount of ₱897,560,041.26. In view of that
transfer, Mar Fishing issued a Memorandum dated 23 October 2001 informing all its workers that the company
would cease to operate by the end of the month.

On 29 October 2001 or merely two days prior to the months end, it notified the Department of Labor and
Employment (DOLE) of the closure of its business operations. Thereafter, Mar Fishing’s labor union, Mar
Fishing Workers Union NFL and Miramar entered into a Memorandum of Agreement. The Agreement provided
that the acquiring company, Miramar, shall absorb Mar Fishing’s regular rank and file employees whose
performance was satisfactory, without loss of seniority rights and privileges previously enjoyed. Unfortunately,
petitioners, who worked as rank and file employees, were not hired or given separation pay by Miramar.

Thus, petitioners filed Complaints for illegal dismissal with money claims before the Arbitration Branch
of the National Labor Relations Commission (NLRC). The Labor Arbiter (LA) found that Mar Fishing had
necessarily closed its operations, considering that Miramar had already bought the tuna canning plant. By
reason of the closure, petitioners were legally dismissed for authorized cause. In addition, even if Mar Fishing
reneged on notifying the DOLE within 30 days prior to its closure, that failure did not make the dismissals void.
Consequently, the LA ordered Mar Fishing to give separation pay to its workers. However, the NLRC reversed
the decision of the LA and pierced the veil of corporate fiction and ruled that Mar Fishing and Miramar were
one and the same entity, since their officers were the same.

Hence, both companies were ordered to solidarily pay the monetary claims. On reconsideration, the
NLRC modified its ruling by imposing liability only on Mar Fishing. The labor court held that petitioners had
no cause of action against Miramar, since labor contracts cannot be enforced against the transferee of an
enterprise in the absence of a stipulation in the contract that the transferee assumes the obligation of the
transferor.

However, finding that only 3 of the 228 petitioners signed the Verification and Certification against
forum shopping, the CA instantly dismissed the action for certiorari against the 225 other petitioners without
ruling on the substantive aspects of the case.

By means of a Manifestation with Omnibus Motion, petitioners submitted a Verification and

Certification against forum shopping executed by 161 signatories. In the said pleading, petitioners asked the CA
to reconsider by invoking the rule that technical rules do not strictly apply to labor cases. Still, the CA denied
petitioners contentions holding that even though litigation is not a game of technicalities, it does not follow that
the Rules of Court must be ignored.

ISSUES: Whether the CA gravely erred in dismissing their Petition for Review on the ground that their
pleading lacked a Verification and Certification against forum shopping.
HELD: No, the Rules of Court provide that a petition for certiorari must be verified and accompanied by a
sworn certification of non-forum shopping. Failure to comply with these mandatory requirements shall be
sufficient ground for the dismissal of the petition. Considering that only 3 of the 228 named petitioners signed
the requirement, the CA dismissed the case against them, as they did not execute a Verification and
Certification against forum shopping. The lack of certification against forum shopping is not curable by mere
amendment of a complaint, but shall be a cause for the dismissal of the case without prejudice. Indeed, the
general rule is that subsequent compliance with the requirements will not excuse a party's failure to comply in
the first instance. Thus, on procedural aspects, the appellate court correctly dismissed the case. However, this
Court has recognized that the merit of a case is a special circumstance or compelling reason that justifies the
relaxation of the rule requiring verification and certification of non-forum shopping.
 ATTY. FE Q. PALMIANO-SALVADOR, Petitioner, vs. CONSTANTINO ANGELES, Respondent.
G.R. No. 171219. September 3, 2012.

FACTS: Respondent is one of the registered owners of a parcel of land at Sampaloc, Manila as evidence by a
Transfer Certificate of Title. The subject parcel of land was occupied by Galiga from 1979 to 1993 as a lessee
with a lease of contract. Subsequently, Petitioner alleged she bought on 1993 the subject parcel of land from
Galiga who represented that he was the owner, being one in possession. Petitioner remained in possession of
said property. Respondent sent a letter to petitioner demanding the latter to vacate the property which was not
heeded by petitioner.

Thus, Angeles filed, thru one Diaz, a complaint for ejectment with the Metropolitan Trial Court of
Manila (MeTC). MeTC rendered its decision in favor of Angeles. In appeal filed by Salvador, she alleged that
Diaz, who filed the complaint, had no authority from Angeles at the time of the filing of the suit. The appeal
was denied by the Regional Trial Court (RTC). The Motion for Reconsideration filed by Salvador was likewise
denied. Petitioner elevated the case to the Court of Appeals (CA) via petition for review but was dismissed. The
CA affirmed the factual findings of lower courts that Galiga was a mere lessee of respondent hence Galiga
could not have validly transferred ownership to peitioner. Hence, the present petition.

ISSUE: Whether or not the court acquired jurisdiction over the complaint and the plaintiff.

HELD: No, the court did not acquire jurisdiction over the complaint and the plaintiff. The complaint filed in the
MeTC was filed in the name of the respondent but it was one Diaz who executed the verification and
certification alleging therein that he was respondent’s attorney-in-fact. No copy of any document attached to the
complaint to prove Diaz/s allegation regarding the authority supposedly granted to him. In fact, it was only
more than ayear after the complaint was filed that respondent attached to his Reply to Salvador a document
entitled Special Power of Attorney (SPA) supposedly executed in favor of Diaz. However, said SPA was
executed only more than a month after the complaint was filed appearing to have been notarize by one Robert
McGuire of Santa Barbara County. No certification from Philippine Consulate in San Francisco, CA, USA, that
said person is indeed a notary public. There is nothing on record to show that Diaz had been authorized. Thus,
the effect is as held by the Court in Tamondong v. CA, if a complaint is filed for and in behalf of the plaintiff by
one who is not authorize to do so, the complaint is not deemed filed. An unauthorize complaint does not
produce any legal effect. Hence, the court has no jurisdiction over the complaint and the plaintiff.

In order that the court to have authority to dispose of the case on the merits, it must acquire jurisdiction
over the subject matter and the parties. Courts acquire jurisdiction over the plaintiffs upon filing of the
complaint and to be bound by the decision, a party should first be subjected to the court’s jurisdiction. Since no
valid complaint was ever filed witht the MeTC, it did not acquire jurisdcition over the person of Angeles. Thus,
all proceedings before the MeTC were null and void.
 Ceroferr Realty Corporation vs. Court of Appeals and Ernesto D. Santiago.
G.R. No. 139539. February 5, 2002.

FACTS: Plaintiff filed with the Regional Trial Court a complaint against defendant Ernesto D. Santiago for
“damages and injunction, with preliminary injunction.” In the complaint, Ceroferr prayed that Santiago and his
agenst be enjoined from claiming possession and ownership aver Lot. 68 of the Tala Estate Subdivision,
Quezon City; that Santiago and his agents be prevented from making use of the vacant lot as a jeepney terminal;
that Santiago be ordered to pay Ceroferr P650.00 daily as lost income for the use of the lot until possession is
restored to the latter; and that Santiago be directed to pay plaintiff Ceroferr moral, actual and exemplary
damages and attorney`s fees, plus expenses of litigation.

In his Answer, defendant Santiago alleged that the vacant lot referred to in the complaint was within Lot
no. 90 of the Tala Estate Subdivision; that he was not claiming any portion of Lot. 68 claimed by Cereforr; that
he had legal right to fence Lot. 90 since this belonged to him, and he had permit for the purpose; that Cereforr
had no color of right over Lot. 90 and, hence, was not entitled to an injunction to prevent Santiago from
exercising acts of ownership thereon; and that the complaint did not state a cause of action.

There was a verification survey, followed by a relocation survey, whereby it would appear that the
vacant lot is inside Lot. 68. The outcome of the survey was vigorously objected to by defendant who insisted
that the area is inside his lot.

It thus became clear, at least from the view point of the defendant, that the case would no longer, merely
involves a simple case of collection of damages and injunction which was the main objective of the complaint
but a review of the title of defendant vis-a-vis that of the plaintiff. At this point, defendant filed a motion to
dismiss the complaint premised primarily on his contention that the trial court cannot adjudicate the issue of
damages without passing over the conflictong claims of ownership of the parties over the disputed portion.

The trial court issued the order that dismissed the case for lack of cause of action and lack of
jurisdiction. Plaintiff appealed this decision but the Court of Appeals promulgated a decision dismissing the
appeal.

Hence, this appeal.

ISSUE: (1) Whether Ceroferr`s complaint states a sufficient cause of action.

(2) Whether the trial court has jurisdiction to determine the identity and location of the vacant lot
involved in the case.

HELD: (1) The rule of procedure require that the complaint must state a concise statement of the ultimate facts
or essential facts constituting the plaintiff`s cause of action. A fact is essential if it cannot be stricken out
without leaving the statement cause of action inadequate. A complaint states a cause of action when it has three
indispensable elements, namely: 1) a right in favor of the plaintiff by whatever means and under whatever law it
arises or created; 2) an obligation on the part of the named defendant to respect or not to violate such right; 3)
an act or omission on the part of such defendant violative of the right of plaintiff or constituting a breach of the
obligation of defendant to the plaintiff for which the latter may maintain an action for recovery for damages. If
these elements are not extant, the complaint becomes vulnerable to a motion to dismiss on the ground of failure
to state a cause of action.

These elements are present in the case at bar.

A defendant who moves to dismiss the complaint on the ground of lack of cause of action, as in this
case, hypothetically admits all the averments thereof. The test of sufficiency of the facts found in a complaint as
constituting a cause of action is whether or not admitting the facts alleged the court can render a valid judgment
upon the same in accordance with the prayer thereof. The hypothetical admission extends to the relevant and
material facts well pleaded in the complaint and inferences fairly deducible therefrom. Hence, if the allegations
in the complaint furnish sufficient basis by which the complaint can be maintained, the same should not be
dismissed regardless of the defense that may be assessed by the defendants.

In this case, petitioner Ceroferr's cause of action has been sufficiently averred in the complaint. If it were
admitted that the right of ownership of petitioner Ceroferr to the peaceful use and possession of Lot 68 was
violated by respondent Santiago's act of encroachment and fencing of the same, then petitioner Ceroferr would
be entitled to damages.

(2) On the issue of jurisdiction, we hold that the trial court had jurisdiction to determine the identity and
location of the vacant lot in question.

While the lack of jurisdiction of a court may be raised at any stage of an action, the party raising such
question may be estopped if he has actively taken part in the very proceedings which he questions and he only
objects to the court`s jurisdiction because the judgment or the order subsequesntly rendered is adversed to him.

In this caseoo, respondent Santiago may be considered estopped to question the jurisdiction of the trial
court for he took an active part in the case. In his answer, respondent Santiago did not question the jurisdiction
of the trial court to grant the reliefs prayed for in the complaint. His geodetic engineers were present in the first
and second surveys that the LRA conducted. It was only when the second survey report showed results adverse
to his case that he submitted a motion to dismiss.
 Asian Construction and Development Corp. vs. Lourdes K. Mendoza

FACTS: On January 6, 2000, respondent Lourdes K. Mendoza, sole proprietor of Highett Steel Fabricators
(Highett), filed before the Regional Trial Court (RTC) a Complaint for a sum of money, against petitioner Asian
Construction and Development Corporation, a duly registered domestic corporation. In the complaint,
respondent alleged that from the period August 7, 1997 to March 4, 1998, petitioner purchased from Highett
various fabricated steel materials and supplies amounting to P1,206,177.00, exclusive of interests; that despite
demand, petitioner failed and/or refused to pay; and that due to the failure and/or refusal of petitioner to pay the
said amount, respondent was compelled to engage the services of counsel.

Petitioner moved for a bill of particulars on the ground that no copies of the purchase orders and
invoices were attached to the complaint to enable petitioner to prepare a responsive pleading to the complaint.
To prove her case, respondent presented the testimonies of the salesman of Highett who confirmed the delivery
of the supplies and materials to petitioner, and the General Manager of Highett.

Petitioner argues that a charge or sales invoice is not an actionable document; thus, petitioners failure to
deny under oath its genuineness and due execution does not constitute an admission thereof. Petitioner likewise
insists that respondent was not able to prove her claim as the invoices offered as evidence were not properly
authenticated by her witnesses. Lastly, petitioner claims that the CA erred in affirming the award of attorneys
fees as the RTC decision failed to expressly state the basis for the award thereof.

Respondent maintains that charge invoices are actionable documents, and that these were properly
identified and authenticated by witness Tejero, who testified that upon delivery of the supplies and materials,
the invoices were stamped received by petitioners employee.

The RTC ruled in favor of the respondent and ordered the payment of the principal amount of the
supplies and the amount of the accrued interest, 150,000 as attorney's fees and cost of suit. The CA modified the
decision of the RTC.

ISSUE: WHETHER THE CHARGE INVOICES ARE ACTIONABLE DOCUMENTS.

HELD: No, the charge invoices are not actionable documents.

From the provision of Rule 8 Sec. 7 of Rules of Court, a document is actionable when an action or
defense is grounded upon such written instrument or document. In the instant case, the Charge Invoices are not
actionable documents per se as these only provide details on the alleged transactions. These documents need not
be attached to or stated in the complaint as these are evidentiary in nature. In fact, respondent's cause of action
is not based on these documents but on the contract of sale between the parties.
 SPOUSES FERNANDO and MA. ELENA SANTOS vs. LOLITA ALCAZAR
G.R. No. 183034. March 12, 2014.

FACTS: Respondent Alcazar was the proprieter of Legazpi Color Center (LCC). Alcazar filed a complaint for
sum of money against petitioners for the collection of the value of paint and construction materials in the
amount of 1,456,000. The Acknowledgment executed by Petitioner Fernando was the basis of Alcazar’s cause
of action. Under the said Acknowledgment, Petitioner Fernando acknowledged his obligation with LCC to pay
the value of the paint and construction materials in the amount of 1,456,000.

Petitioners specifically denied the allegations of Alcazar and contended that the actionable document
does not reflect their real indebtedness as well as the true contract or intention of the parties. The document does
not reflect the correct amount which is only P600,000. Thus, petitioners sought the dismissal of the Complaint.
Petitioners filed a Demurrer to Evidence and argued that the Acknowledgment presented in court was not an
original copy, hence, inadmissible. Trial court denied petitioners’ demurrer and scheduled the presentation of
petitioners’ evidence. Thereafter, petitioners moved to reset the scheduled on the ground that on the scheduled
hearing, their counsel was to appear in another scheduled case. However, the trial court denied the motion to
reset for lack of merit and for violating Section 4, Rule 15 of the Rules of Civil Procedure. The trial court
declared that the petitioners have waived their right to present evidence.

Petitioners filed a petition for certiorari to the CA and questioned the denial of their demurrer but the CA
sustained the TC’s denial of their demurrer.

Regional Trial Court’s Decision: RTC rendered judgment in favor of respondent Alcazar and ordered
petitioners to pay plaintiff the sum of 1,456,000 plus interest, litigation and attorney’s fees. It held that
petitioners admitted that they entered into transactions with Alcazar for the delivery of paint and construction
materials and that from the Acknowledgment, petitioners admitted that their unpaid obligation is P1,456,000.

CA’s Decision: On appeal, the petitioners alleged that the RTC erred in allowing Alcazar to present her
evidence ex parte.

It sustained the trial court’s denial of petitioners’ demurrer. The CA held that petitioners failed to deny
specifically under oath the genuineness and due execution of the Acknowledgment, consequently, its
genuineness and due execution are deemed admitted, there was thus no need to present the original thereof, and
petitioners’ liability was sufficiently established.

ISSUE: Whether or not the Pre-trial Conference is a sham as there are no records to show that it was conducted.

HELD: No. Court found them to be without merit. A pre-trial conference was held, and that petitioners'
representative was present therein. Moreover, the proceedings were covered by the required pre-trial order,
which may itself be considered a record of the pre-trial. In said order, the November 8, 2005 pre-scheduled
hearing was particularly specified. Thus, from the very start, petitioners knew of the November 8 hearing; if
they failed to attend, no fault may be attributed to the trial court.
 D.M. FERRER & ASSOCIATES CORPORATION v. UNIVERSITY OF SANTO TOMAS
G.R. No. 189496. February 1, 2012.

FACTS: Petitioner and University of Santo Tomas Hospital, Inc. entered into a Project Management Contract
for the renovation of the 4th and 5thfloors of the Clinical Division Building, Nurse Call Room and Medical
Records, Medical Arts Tower, Diagnostic Treatment Building and Pay Division Building.

On various dates, petitioner demanded from USTHI the payment of the construction costs amounting to
P17,558,479.39. However, UST, through its rector, Fr. Rolando V. Dela Rosa, wrote a letter informing
petitioner that its claim for payment had been denied, because the Project Management Contract was without
the required prior approval of the board of trustees. Thus, petitioner filed a Complaint for sum of money, breach
of contract and damages against herein respondent UST and USTHI when the latter failed to pay petitioner
despite repeated demands.

In impleading respondent UST, petitioner alleged that the former took complete control over the
business and operation of USTHI, as well as the completion of the construction project. It also pointed out that
the Articles of Incorporation of USTHI provided that, upon dissolution, all of the latter’s assets shall be
transferred without any consideration and shall inure to the benefit of UST. It appears that USTHI passed a
Resolution dissolving the corporation by shortening its corporate term of existence.

Finally, petitioner alleged that respondent, through its rector, Fr. Dela Rosa, O.P., verbally assured the
former of the payment of USTHIs outstanding obligations.

Thus, petitioner posited in part that UST may be impleaded in the case under the doctrine of piercing the
corporate veil, wherein respondent UST and USTHI would be considered to be acting as one corporate entity,
and UST may be held liable for the alleged obligations due to petitioner.

Subsequently, respondent filed its Motion to Dismiss. It alleged that the Complaint failed to state a cause
of action, and that the claim was unenforceable under the provisions of the Statute of Frauds.

RTC Quezon City granted the motion and dismissed the Complaint insofar as respondent UST was
concerned, on the ground that respondent was not a real party-in-interest, and that it was not privy to the
contract executed between USTHI and petitioner. Second, the court pointed out that the alleged verbal
assurances of Fr. Dela Rosa should have been in writing to make these assurances binding and demandable.

Petitioner sought a reconsideration of the RTC Order and asserted that only allegations of the
Complaint, and not the attached documents, should have been the basis of the trial court’s ruling, consistent
with the rule that the cause of action can be determined only from the facts alleged in the Complaint. It also
insisted that the Statute of Frauds was inapplicable, since USTHI’s obligation had already been partially
executed.

The Motion for Reconsideration filed by petitioner was dimissed, upholding the initial findings that
respondent UST was not a real party-in-interest, and that Fr. Dela Rosas alleged assurances of payment were
unenforceable.
 Subsequently, petitioner filed a Petition for Certiorari under Rule 65 with the CA, alleging that the trial
court committed grave abuse of discretion when it granted respondents Motion to Dismiss on the basis of the
documents submitted in support of the Complaint, and not solely on the allegations stated therein. It pointed out
that the allegations raised questions of fact and law, which should have been threshed out during trial, when
both parties would have been given the chance to present evidence supporting their respective allegations.

CA issued the assailed Resolution and dismissed the Petition on the ground that a petition under Rule 65
is the wrong remedy to question the RTCs Order that completely disposes of the case. Instead, petitioner should
have availed itself of an appeal under Rule 41 of the Rules of Court.

Petitioner moved for a reconsideration of the Resolution, pointing out that the present case falls under
the enumerated exceptions of Rule 41, in particular, while the main case is still pending, no appeal may be made
from a judgment or final order for or against one or more of several parties or in separate claims, counterclaims,
cross-claims and third-party complaints.

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

ISSUE: (1) Whether the CA erred in dismissing the Petition for Certiorari by failing to consider the exception
in Sec. 1(g) of Rule 41 of the Rules of Court.

(2) Whether the trial court committed grave abuse of discretion when it held that the Complaint stated
no cause of action.

HELD: (1) Yes.A petition for certiorari under Rule 65 is the proper remedy to question the dismissal of an
action against one of the parties while the main case is still pending.

In Jan-Dec Construction Corp. v. Court of Appeals, the Court ruled that the CA erred in dismissing
petitioner's petition for certiorari from the Order of the RTC dismissing the complaint against respondent. While
Section 1, Rule 41 of the 1997 Rules of Civil Procedure states that an appeal may be taken only from a final
order that completely disposes of the case, it also provides several exceptions to the rule, to wit: (a) an order
denying a motion for new trial or reconsideration; (b) an order denying a petition for relief or any similar
motion seeking relief from judgment; (c) an interlocutory order; (d) an order disallowing or dismissing an
appeal; (e) an order denying a motion to set aside a judgment by consent, confession or compromise on the
ground of fraud, mistake or duress, or any other ground vitiating consent; (f) an order of execution; (g) a
judgment or final order for or against one or more of several parties or in separate claims, counterclaims, cross-
claims and third-party complaints, while the main case is pending, unless the court allows an appeal therefrom;
and (h) an order dismissing an action without prejudice. In the foregoing instances, the aggrieved party may file
an appropriate special civil action for certiorari under Rule 65.

(2) Yes. In Abacan v. Northwestern University, Inc., the Court ruled that it is settled that the existence of
a cause of action is determined by the allegations in the complaint. In resolving a motion to dismiss based on
the failure to state a cause of action, only the facts alleged in the complaint must be considered. The test is
whether the court can render a valid judgment on the complaint based on the facts alleged and the prayer asked
for. Indeed, the elementary test for failure to state a cause of action is whether the complaint alleges facts which
if true would justify the relief demanded. Only ultimate facts and not legal conclusions or evidentiary facts,
which should not be alleged in the complaint in the first place, are considered for purposes of applying the test.

While it is admitted that respondent UST was not a party to the contract, petitioner posits that the former
is nevertheless liable for the construction costs. In support of its position, petitioner alleged that (1) UST and
USTHI are one and the same corporation; (2) UST stands to benefit from the assets of USTHI by virtue of the
latters Articles of Incorporation; (3) respondent controls the business of USTHI; and (4) USTs officials have
performed acts that may be construed as an acknowledgement of respondents liability to petitioner.

Obviously, these issues would have been best resolved during trial. The RTC therefore committed grave
abuse of discretion when it dismissed the case against respondent for lack of cause of action. The trial court
relied on the contract executed between petitioner and USTHI, when the court should have instead considered
merely the allegations stated in the Complaint.
La Mallorca v. Court of Appeals, Mariano Beltran, et al.
G.R. No. L-20761. July 27, 1966.

FACTS: Private respondents (Mariano Beltran being the husband, and his wife), with their three minor
daughters at about noontime, boarded a Pambusco Bus at San Fernando, Pampanga. It was owned and operated
by defendant. Private respondents were carrying with them at the time four pieces of baggage. The conductor of
the bus then issued tickets to them, except to two of the daughters, who were below the height requirement at
which the fare was charged.When the bus reached Anao, it stopped there to allow the passengers bound therefor
to get down. Among these were the private respondents and their children. Private respondent husband went
back to the bus to retrieve his bayong which he left behind. However, he did not notice that one of his daughters
followed him. When he was waiting for the conductor to hand him the bayong, the bus started to leave without
the signal of the conductor, then it stopped again.Nevertheless, sensing that the bus is again about to move,
private respondent husband veered away from the same. At the same time, he noticed people gathering around
the body of a child who turned out to be his daughter, with her skull crushed and already without life.

Thus, private respondents filed an action to recover damages, which was granted by the trial court for
breach of contract of carriage.On appeal, the Court of Appeals agreed that the contract of carriage had already
terminated, but still made petitioner liable on the basis of quasi-delict.

ISSUE: Whether or not La Mallorca (petitioner) is be liable.

HELD: Yes. Although private respondents alighted at the designated place, insofar as the husband is
concerned, the relationship of passenger and carrier still subsisted due to the fact that the bayong which he was
supposed to claim was still in the bus. The issue to be determined is whether the carrier was also liable for the
safety of the child. The recognized rule is that the relation of carrier and passenger does not automatically cease
when the passenger alighted. The latter must have had a reasonable time or opportunity to leave the carrier’s
premises. A “reasonableness” is to be determined by the circumstances.

It must be noted that the bus did not observe a carrier’s obligation to exercise “utmost diligence” of a
“very cautious person” when it commenced to leave without the signal of the conductor. Also, the presence of
private respondents near the bus was not unreasonable since they still have a part of their baggage in the bus.
Thus, they are still to be considered as passengers and entitled to protection under the contract of carriage.

But assuming that the carrier-passenger relationship had already ceased, petitioner may still be held
liable for negligence of its driver, which shall fall under quasi-delict.
 Ledda v. BPI.
G.R. No. 200868. November 21, 2012.

FACTS: Anita Ledda was a client of Bank of the Philippine Islands (BPI) who was issued a pre-approved
credit card. This credit card and its terms and conditions were delivered to Ledda; Ledda began to subsequently
use the credit card for various purchases of goods, services, and cash advances. Ledda defaulted in the payment
of her credit card obligations. BPI sent a demand letter on September 26, 2007, but this was received in Ledda
on October 2, 2007 who defaulted payment nonetheless. BPI thus filed a complaint of the collection of a sum of
money against Ledda, allegedly amounting to P548,143.73. BPI filed the complaint in the RTC of Makati City.
The RTC declared Ledda in default for failing to file an Answer within the period prescribed despite the service
of the complaint and summons. Ledda somehow managed to file a motion for reconsideration, which was
granted by the RTC and thus allowed her to file her Answer Ad Cautelam. Ledda and her counsel, however,
failed to appear during the Pre-Trial. BPI was thus allowed to present evidence ex-parte. The RTC later ruled in
favor of BPI, making Ledda liable for the alleged amount of P548,143.73 plus a 6% monthly interest. Ledda
appealed to the CA, which denied her appeal but modified the RTC’s decision. The CA rejected Ledda’s
argument that the credit card’s terms and conditions were actionable documents governed by Rule 8, sec. 7 of
the Rules of Civil Procedure. The CA held that BPI’s cause of action sprang from Ledda’s availment of the
bank’s credit facilities via the credit card and her refusal to pay the obligation it created. The CA used the case
of Macalinao vs BPI in order to reduce the payment of interest. The Macalinao case also concerned the default
in payment of a credit card obligation, but the bank therein imposed a 9.25% interest per month penalty,
amounting to 111% per annum, which the court deemed exorbitant and unconscionable. The CA reduced
Ledda’s credit card obligations to P322, 138 as the principal by deducting P225,000.15 as interests and charges
from the original P548,143.73 amount. The CA also granted Attorney’s fees to BPI as per the Macalinao case.
Ledda moved to reconsider, but was denied by the CA. Ledda went to the SC via a petition for Review.

ISSUE: Did the CA err in holding that the credit card’s terms and conditions were not actionable documents
under Rule 8, sec. 7 of the Rules of Civil Procedure?

HELD: No, the CA was correct in ruling that the credit card’s terms and conditions were not actionable
documents under the Rules of Civil Procedure.

Rule 8, section 7 provides:

Section 7. Action or defense based on document. — Whenever an action or defense is based upon a written instrument or
document, the substance of such instrument or document shall be set forth in the pleading, and the original or a copy thereof shall be
attached to the pleading as an exhibit, which shall be deemed to be a part of the pleading, or said copy may with like effect be set forth
in the pleading.

As the rule itself states, the cause of action must be based on a document to be attached to the complaint.
BPI’s cause of action, however, was not solely based on the credit card’s terms and conditions. It was also
based on Ledda’s 1) acceptance of the credit card, 2) use of the credit card to purchase goods or services or
advances in cash, and 3) her default in the payment of her obligations. As such, BPI had a sufficient cause of
action with or without the attachment of the credit card’s terms and conditions.
 FINANCIAL BUILDING CORPORATION, petitioner, vs. FORBES PARK ASSOCIATION, INC.,
respondent.

FACTS: The then Union of Soviet Socialist Republic (hereafter, USSR) was the owner of a residential lot
located at Forbes Park Village in Makati City. The USSR engaged the services of Financial Building for the
construction of a multi-level building building at the said lot. Forbes Park reminded the USSR of existing
regulations authorizing only the construction of a single-family residential building in each lot within the
village. It also elicited a reassurance from the USSR that such restriction has been complied with. Despite this,
Financial Building submitted to the Makati City Government a second building plan for the construction of a
multi-level apartment building, which was different from the first plan for the construction of a residential
building submitted to Forbes Park. Forbes Park discovered the second plan and subsequent ocular inspection
confirmed the violation of the deed of restrictions. Thus, it enjoined further construction work. Forbes Park
suspended all permits of entry for the personnel and materials of Financial Building in the said construction site.
The parties attempted to meet to settle their differences but it did not push through. Financial Building filed in
the Regional Trial Court of Makati, Metro Manila, a Complaint for Injunction and Damages with a prayer for
Preliminary Injunction against Forbes Park. The latter, in turn, filed a Motion to Dismiss on the ground that
Financial Building had no cause of action because it was not the real party-in-interest. The trial court issued a
writ of preliminary injunction against Forbes Park but the Court of Appeals nullified it and dismissed the
complaint. The Supreme Court affirmed the said dismissal in a Resolution. After Financial Building’s case was
terminated with finality, Forbes Park sought to vindicate its rights by filing with the Regional Trial Court of
Makati a Complaint for Damages, against Financial Building arising from the violation of its rules and
regulations. The trial court rendered its decision in favor of Forbes Park. Financial Building appealed the said
decision to the Court of Appeals, which affirmed the decision of the RTC.

ISSUE: Whether or not Forbes Park is barred in claiming damages?

HELD: Yes. The instant case is barred due to Forbes Park’s failure to set it up as a compulsory counterclaim in
the prior injunction suit initiated by Financial Building against Forbes Park.

A compulsory counterclaim is one which arises out of or is necessarily connected with the transaction or
occurrence that is the subject matter of the opposing party’s claim.15 If it is within the jurisdiction of the court
and it does not require for its adjudication the presence of third parties over whom the court cannot acquire
jurisdiction, such compulsory counterclaim is barred if it is not set up in the action filed by the opposing party.

Thus, a compulsory counterclaim cannot be the subject of a separate action but it should instead be
asserted in the same suit involving the same transaction or occurrence, which gave rise to it.17 To determine
whether a counterclaim is compulsory or not, we have devised the following tests: (1) Are the issues of fact or
law raised by the claim and the counterclaim largely the same? (2) Would res judicata bar a subsequent suit on
defendant’s claim absent the compulsory counterclaim rule? (3) Will substantially the same evidence support or
refute plaintiff’s claim as well as the defendant’s counterclaim? and (4) Is there any logical relation between the
claim and the counterclaim? Affirmative answers to the above queries indicate the existence of a compulsory
counterclaim.

Second. Since Forbes Park filed a motion to dismiss in Civil Case No. 16540, its existing compulsory
counterclaim at that time is now barred.A compulsory counterclaim is auxiliary to the proceeding in the original
suit and derives its jurisdictional support therefrom.19 A counterclaim presupposes the existence of a claim
against the party filing the counterclaim. Hence, where there is no claim against the counterclaimant, the
counterclaim is improper and it must dismissed, more so where the complaint is dismissed at the instance of the
counterclaimant.20 In other words, if the dismissal of the main action results in the dismissal of the
counterclaim already filed, it stands to reason that the filing of a motion to dismiss the complaint is an implied
waiver of the compulsory counterclaim because the grant of the motion ultimately results in the dismissal of the
counterclaim.Thus, the filing of a motion to dismiss and the setting up of a compulsory counterclaim are
incompatible remedies. In the event that a defending party has a ground for dismissal and a compulsory
counterclaim at the same time, he must choose only one remedy. If he decides to file a motion to dismiss, he
will lose his compulsory counterclaim. But if he opts to set up his compulsory counterclaim, he may still plead
his ground for dismissal as an affirmative defense in his answer.21 The latter option is obviously more
favorable to the defendant although such fact was lost on Forbes Park.The ground for dismissal invoked by
Forbes Park was lack of cause of action. There was no need to plead such ground in a motion to dismiss or in
the answer since the same was not deemed waived if it was not pleaded.22 Nonetheless, Forbes Park still filed a
motion to dismiss and thus exercised bad judgment in its choice of remedies. Thus, it has no one to blame but
itself for the consequent loss of its counterclaim as a result of such choice.
 Natividad Lim vs. National Power Corporation, and Spouses Roberto Ll. Arcinue and Arabela Arcinue
G.R. No. 178789. November 14, 2012.

FACTS: Respondent National Power Corporation (NPC) filed an expropriation suit against petitioner Natividad
B. Lim (Lim) before the Regional Trial Court (RTC) of Lingayen, covering Lots 2373 and 2374 that the NPC
needed for its Sual Coal-Fired Thermal Power Project. Since Lim was residing in the United States, the court
caused the service of summons on her through her tenant, a certain Wilfredo Tabongbong.The RTC ordered the
issued writ of possession in NPC’s favor, however, Lim, represented by her husband Delfin, filed an omnibus
motion to dismiss the action and to suspend the writ of possession, questioning the RTC’s jurisdiction over
Lim’s person and the nature of the action.Respondent spouses Roberto and Arabela Arcinue (the Arcinues) filed
a motion for leave to admit complaint in intervention, alleging that they owned and were in possession of Lot
2374, one of the two lots subject of the expropriation. The RTC granted the Arcinues’ motion and required both
the NPC and Lim to answer the complaint-in-intervention within 10 days from receipt of its order.When Lim
and the NPC still did not file their answers to the complaint-in-intervention after 10 months, the Arcinues filed a
motion for judgment by default. Lim sought to expunge the motion on the ground that it lacked the requisite
explanation why the Arcinues resorted to service by registered mail rather than to personal service. At the
scheduled hearing of the motion, Lim’s counsel did not appear. The NPC for its part manifested that it did not
file an answer since its interest lay in determining who was entitled to just compensation.The RTC issued an
order of default against both Lim and the NPC. The RTC pointed out that the Arcinues’ failure to explain their
resort to service by registered mail had already been cured by the manifestation of Lim’s counsel that he
received a copy of the Arcinues’ motion 10 days before its scheduled hearing.Lim filed a motion for
reconsideration to lift the default order but the Court denied the motion, prompting Lim to file a petition for
certiorari before the Court of Appeals. The CA rendered a decision that affirmed the RTC’s order of default.
Lim filed a motion for reconsideration but the CA denied it, prompting her to file the present petition for
review.

ISSUES: (1) Whether or not there is a valid order of default of the RTC entered against Lim.

(2) Whether or not there is grave abuse of discretion on the part of the RTC in allowing respondent
spouses’ failure to explain in their motion why they served a copy of it on the adverse party by registered mail
rather than by personal service.

HELD: (1) No. Section 4, Rule 19 of the Rules of Civil Procedure requires the original parties to file an answer
to the complaint-in-intervention within 15 days from notice of the order admitting the same, unless a different
period is fixed by the court. This changes the procedure under the former rule where such an answer was
regarded as optional.

Thus, Lim’s failure to file the required answer can give rise to default. She remained unable to show that
her failure to file the required answer was due to fraud, accident, mistake, or excusable negligence. And,
although she claimed that she had a meritorious defense, she was unable to specify what constituted such
defense.

(2) No. The Court finds no such grave abuse of discretion, notwithstanding that the Arcinues' failed to
explain their resort to service by registered mail rather than by personal service, the fact is that Lim's counsel
expressly admitted having received a copy of the Arcinues' motion for judgment 10 days before its scheduled
hearing. This means that the Arcinues were diligent enough to file their motion by registered mail long before
the scheduled hearing.

Personal service is required precisely because it often happens that hearings do not push through
because, while a copy of the motion may have been served by registered mail before the date of the hearing,
such is received by the adverse party already after the hearing. Thus, the rules prefer personal service. But it
does not altogether prohibit service by registered mail when such service, when adopted, ensures as in this case
receipt by the adverse party.
MAGDIWANG REALTY CORPORATION, RENATO P. DRAGON and ESPERANZA TOLENTINO,
Petitioners, vs. THE MANILA BANKING CORPORATION, substituted by FIRST SOVEREIGN
ASSET MANAGEMENT (SPV-AMC), INC., Respondent.
G.R. No. 195592. September 5, 2012.

FACTS: The case stems from a complaint for sum of money filed on April 18, 2000 before the Regional Trial
Court (RTC), Makati City by herein respondent, The Manila Banking Corporation (TMBC), against herein
petitioners, Magdiwang Realty Corporation (Magdiwang), Renato P. Dragon (Dragon) and Esperanza Tolentino
(Tolentino), after said petitioners allegedly defaulted in the payment of their debts under the five promissory
notes they executed in favor of TMBC, which contained the following terms:

Promissory Note No. 4953

December 27, 1976 (Maturity Date)
Php500,000.00 (Amount)

Promissory Note No. 10045

March 27, 1982 (Maturity Date)
Php500,000.00 (Amount)

Promissory Note No. 10046

March 27, 1982 (Maturity Date)
Php500,000.00 (Amount)

Promissory Note No. 10047

March 27, 1982 (Maturity Date)
Php500,000.00 (Amount)

Promissory Note No. 10048

March 27, 1982 (Maturity Date)
Php500,000.00 (Amount)

All promissory notes included stipulations on the payment of interest and additional charges in case of
default by the debtors. Despite several demands for payment made by TMBC, the petitioners allegedly failed to
heed to the bank’s demands, prompting the filing of the complaint for sum of money.

Instead of filing a responsive pleading with the trial court, the petitioners filed on October 12, 2000,
which was notably beyond the fifteen (15)-day period allowed for the filing of a responsive pleading, a Motion
for Leave to Admit Attached Motion to Dismiss5 and a Motion to Dismiss, raising therein the issues of
novation, lack of cause of action against individuals Dragon and Tolentino, and the impossibility of the novated
contract due to a subsequent act of the Congress.

The motions were opposed by the respondent TMBC, via its Opposition which likewise asked that the
petitioners be declared in default for their failure to file their responsive pleading within the period allowed
under the law.

RTC Order – Declared the petitioners in default.

While this Court appreciates the efforts and tenacity shown by defendants’ counsel for having prepared
a lengthy pleading for his clients in so short a time, the Court will have to rule that the Motion to Dismiss was
nonetheless filed out of time, hence, there is sufficient basis to declare defendants in default.
 The petitioners’ motion for reconsideration was denied by the trial court in its Order dated August 2,
2005. The ex parte presentation of evidence by the bank before the trial court’s Presiding Judge was scheduled
in the same Order.Unsatisfied with the RTC orders, the petitioners filed with the CA a petition for certiorari.CA
Ruling on RTC’s Order of Default – Affirmed RTC’s order of default, holding that the RTC did not commit
grave abuse of discretion when it declared herein petitioners in default.

The denial of petitioners’ motion for reconsideration prompted the filing of a petition for review on
certiorari before this Court, which, through its Resolutions dated March 5, 2008 and June 25, 2008, denied the
petition for lack of merit.In the meantime, TMBC’s presentation of evidence ex parte proceeded before
Presiding Judge Oscar B. Pimentel of the RTC of Makati City.

RTC ruled in favor of TMBC (May 20, 2007).

Petitioner’s motion for reconsideration was denied by the trial co urt, hence, it filed an appeal with the
CA.

While appeal was pending before the appellate court, TMBC and First Sovereign Asset Management (SPV-
AMC), Inc. (FSAMI) filed a Joint Motion for Substitution, asking that TMBC be substituted by FSAMI after
the former executed in favor of the latter a Deed of Assignment covering all of its rights, title and interest over
the loans subject of the case.

CA Ruling – Dismissed the petitioner’s appeal (October 11, 2010) and AFFIRMED RTC’s decision.

On the issue of prescription, the CA cited the rule that the prescriptive period is interrupted in any of the
following instances: (1) when an action is filed before the court; (2) when there is a written extrajudicial
demand by the creditors; and (3) when there is any written acknowledgment of the debt by the debtor.

The prescriptive period was legally interrupted on September 19, 1984 when the defendants-appellants,
through several letters, proposed for the restructuring of their loans until the plaintiff-appellee sent its final
demand letter on September 10, 1999. Indeed, the period during which the defendants-appellants were seeking
reconsideration for the non-settlement of their loans and proposing payment schemes of the same should not be
reckoned against it. When prescription is interrupted, all the benefits acquired so far from the lapse of time
cease and, when prescription starts anew, it will be entirely a new one.

This concept should not be equated with suspension where the past period is included in the computation
being added to the period after prescription is resumed. Consequently, when the plaintiff-appellee sent its final
demand letter to the defendants appellants, thus, foreclosing all possibilities of reaching a settlement of the
loans which could be favorable to both parties, the period of ten years within which to enforce the five
promissory notes under Article 1142 of the New Civil Code began to run again and, therefore, the action filed
on April 18, 2000 to compel the defendants-appellants to pay their obligations under the promissory notes had
not prescribed.

The defense of novation was also rejected by the CA, citing the absence of two requirements for a valid
novation, namely: (1) the clear and express release of the original debtor from the obligation upon the
assumption by the new debtor of the obligation; and (2) the consent of the creditor thereto.

ISSUES: (1) Whether or not the prescriptive period was legally interrupted on September 19, 1984 when
petitioners proposed restructuring of their loans.

(2) Whether or not the principle of novation by the substitution of debtors was erroneously employed by
the petitioners to extricate themselves from the obligation to the respondent.
HELD: (1) Yes. The ten (10)-year prescriptive period to file an action based on the subject promissory notes
was interrupted by the several letters exchanged between the parties. This is in conformity with the second and
third circumstances under Article 1155 of the New Civil Code (NCC) which provides that the prescription of
actions is interrupted when: (1) they are filed before the court; (2) there is a written extrajudicial demand by the
creditors; and (3) there is any written acknowledgment of the debt by the debtor. In TMBC’s complaint against
the petitioners, the bank sufficiently made the allegations on its service and the petitioners’ receipt of the subject
demand letters, even attaching thereto copies thereof for the trial court’s consideration.

During the bank’s presentation of evidence ex parte, the testimony of witness Mr. Megdonio Isanan was
also offered to further support the claim on the demand made by the bank upon the petitioners. In the absence of
a timely objection from the petitioners on these claims, no error can be imputed on the part of the trial court,
and even the appellate court, in taking due consideration thereof.

As against the bare denial belatedly made by the petitioners of their receipt of the written extrajudicial
demands made by TMBC, especially of the letter of September 10, 1999 which was the written demand sent
closest in time to the institution of the civil case, the appreciation of evidence and pronouncements of the trial
court in its Order dated November 5, 2007 shall stand.

In addition to these, we take note that letters prior to the letter of September 1999 also form part of the
case records, and the existence of said letters were not directly denied by the petitioners.

(2) No. No evidence was presented to adequately establish that such novation ensued. What the letters
being invoked by the petitioners as supposedly establishing novation only indicate that efforts on a repayment
scheme were exerted by the parties. However, nowhere in the records is it indicated that such novation ever
materialized.
 Philippine Tourism Authority vs. Philippine Golf Development & Equiptment.
G.R. No. 176628. March 19, 2012.

FACTS: The case at bar is a petition for Certiorari under Rule 65 of the 1997 Rules of Civil Procedure, to annul
the decision of the CA in which it dismissed the petition for annulment of judgment which sought to set aside
the decision of the RCT Muntinlupa City. The said RTC held that the Philippine Tourism Authority (PTA)
liable for its unpaid obligation to Philippine Golf Development & Equipment, Inc. (PHILGOLF).

PTA, an agency of the Department of Tourism, whose main function is to bolster and promote tourism,
entered into a contract with Atlantic Erectors, Inc. (AEI) for the construction of the Intramuros Golf Course
Expansion Projects for a contract price of P57,954,647.94. The civil works of the project commenced. Since
AEI was incapable of constructing the golf course aspect of the project, it entered into a sub-contract agreement
with PHILGOLF, a duly organized domestic corporation, to build the golf course amounting to P27,000,000.00.
The sub-contract agreement also provides that PHILGOLF shall submit its progress billings directly to PTA
and, in turn, PTA shall directly pay PHILGOLF.

PHILGOLF filed a collection suit against PTA amounting to P11,820,550.53, plus interest, for the
construction of the golf course. Within the period to file a responsive pleading, PTA filed a motion for
extension of time to file an answer. The RTC granted the motion for extension of time. PTA filed another
motion for extension of time to file an answer. The RTC again granted the motion.

RTC Muntinlupa City

Despite the RTCs liberality of granting two successive motions for extension of time, PTA failed to
answer the complaint. Thus, the RTC rendered a judgment of default ruling in favor of the defendant which
ordered the defendant to pay the plaintiff the said outstanding obligation plus interest of 12% per annum,
attorney’s fees, cost of litigation, moral damages, nominal damages and exemplary damages.

Court of Appeals
PTA seasonably appealed the case to the CA. But before the appeal of PTA could be perfected,
PHILGOLF already filed a motion for execution pending appeal with the RTC. The RTC granted the motion
and a writ of execution pending appeal was issued against PTA. A notice of garnishment was issued against
PTAs bank account at the LBP NAIA-BOC Branch to fully satisfy the judgment. PTA filed a petition for
certiorari with the CA, imputing grave abuse of discretion on the part of the RTC for granting the motion for
execution pending appeal. The CA ruled in favor of PTA and set aside the order granting the motion for
execution pending appeal.

PTA withdrew its appeal of the RTC decision and, instead, filed a petition for annulment of judgment
under Rule 47 of the Rules of Court. The petition for annulment of judgment was premised on the argument that
the gross negligence of PTAs counsel prevented the presentation of evidence before the RTC. CA dismissed the
petition for annulment of judgment for lack of merit. PTA questions this CA action in the present petition for
certiorari.

ISSUES: (1) Whether or not the negligence of the PTAs counsel amounted to an extrinsic fraud warranting an
annulment of judgment.

(2) Whether or not that since PTA is a government entity, it should not be bound by the inactions or
negligence of its counsel.
 (3) Whether or not a petition for annulment of judgment is a proper remedy.

HELD: The Rules of Court specifically provides for deadlines in actions before the court to ensure an orderly
disposition of cases. PTA cannot escape these legal technicalities by simply invoking the negligence of its
counsel. This practice, if allowed, would defeat the purpose of the Rules on periods since every party would
merely lay the blame on its counsel to avoid any liability. The rule is that a client is bound by the acts, even
mistakes, of his counsel in the realm of procedural technique,and unless such acts involve gross negligence that
the claiming party can prove, the acts of a counsel bind the client as if it had been the latters acts

(1) No. Extrinsic fraud refers to any fraudulent act of the prevailing party in the litigation which is
committed outside of the trial of the case, whereby the unsuccessful party has been prevented from exhibiting
fully his case, by fraud or deception practiced on him by his opponent. Under the doctrine of this cited case, we
do not see the acts of PTAs counsel to be constitutive of extrinsic fraud. The records reveal that the judgment
of default was sent via registered mail to PTAs counsel. However, PTA never availed of the remedy of a motion
to lift the order of default. Since the failure of PTA to present its evidence was not a product of any fraudulent
acts committed outside trial, the RTC did not err in declaring PTA in default.

(2) No. PTA was acting in a proprietary character. PTA also erred in invoking state immunity simply
because it is a government entity. The application of state immunity is proper only when the proceedings arise
out of sovereign transactions and not in cases of commercial activities or economic affairs. The State, in
entering into a business contract, descends to the level of an individual and is deemed to have tacitly given its
consent to be sued. Since the said project partakes of a proprietary character entered into between PTA and
PHILGOLF, PTA cannot avoid its financial liability by merely invoking immunity from suit.

(3) No. Annulment of Judgment is not the proper remedy. PTAs appropriate remedy was only to appeal
the RTC decision. Annulment of Judgment under Rule 47 of the Rules of Court is a recourse equitable in
character and allowed only in exceptional cases where the ordinary remedies of new trial, appeal, petition for
relief or other appropriate remedies are no longer available through no fault of petitioner. In this case, appeal
was an available remedy. There is no extraordinary reason for a petition for annulment of judgment, nor was
there any adequate explanation on why the remedy for new trial or petition for relief could not be used. The
Court is actually at a loss why PTA had withdrawn a properly filed appeal and substituted it with another
petition, when PTA could have merely raised the same issues through an ordinary appeal.

Lastly, a special civil action under Rule 65 of the Rules of Court is only available in cases when a
tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or
his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no
appeal, or any plain, speedy, and adequate remedy in the ordinary course of law. It is not a mode of appeal, and
cannot also be made as a substitute for appeal. It will not lie in cases where other remedies are available under
the law.

In sum, PTA had the remedy of appealing the RTC decision to the CA and, thereafter, to the Court.
Under the circumstances, the Court find no adequate reason to justify the elevation of this case to the CA and
then to the Court, under Rule 65 of the Rules of Court.
 LETICIA DIONA, represented by her Attorney-in-Fact, MARCELINA DIONA, vs.
ROMEO A. BALANGUE, SONNY A. BALANGUE, REYNALDO A. BALANGUE, and ESTEBAN A.
BALANGUE, JR.
G.R. No. 173559. January 7, 2013.

FACTS: The great of a relief neither sought by the party in whose favor it was given not supported by the
evidence presented violates the opposing party’s right to due process and may be declared void ab initio in a
proper proceeding.Petitioner filed a Petition for Review on Certiorari assailing the resolution granting the
Petition for Annulment of Judgment filed by the respondents seeking to nullify that portion of the Regional
Trial Court (RTC), Branch 75, Valenzuela City awarding petitioner 5% monthly interest rate for the principal
amount of the loan respondent obtained from her. The Petition likewise assails the CA’s Resolution denying
petitioner’s Motion for Reconsideration.

In 1991, respondents obtained a loan of P45,000.00 from petitioner payable in six months and secured
by a Real Estate Mortgage over their property located in Marulas, Valenzuela. When the debt became due,
respondents failed to pay notwithstanding demand. Thus, petitioner filed with the RTC a Complaint praying that
respondents be ordered to pay the principal obligation, the damages, attorney’s fees, and to issue a decree of
foreclosure for the sale at public auction of the aforementioned parcel of land.

Respondents were served with summons thru respondent Sonny A. Balangue (Sonny). With the
assistance of Atty. Arthur C. Coroza (Atty. Coroza) of the Public Attorney’s Office, they filed a Motion to
Extend Period to Answer. Despite the requested extension, however, respondents failed to file any responsive
pleadings. Thus, upon motion of the petitioner, the RTC declared them in default and allowed petitioner to
present her evidence ex parte.

RTC decided in favour of the petitioner, ordering the respondents to pay the petitioner, among others,
the sum of FORTY FIVE THOUSAND (P45,000.00) PESOS, representing the unpaid principal loan obligation
plus interest at 5% per month.

Subsequently, petitioner filed a Motion for Execution, alleging that respondents did not interpose a
timely appeal. However, respondents filed a Motion to Set Aside Judgment dated January 26, 2001, claiming
that not all of them were duly served with summons and that they had no knowledge of the case because their
co-respondent Sonny did not inform them about it. They prayed that the RTC’s Decision be set aside and a new
trial be conducted.

RTC ordered the issuance of a Writ of Execution. In order to satisfy the writ, petitioner moved for the
public auction of the mortgaged property, which the RTC granted. The property was sold in her favour for
P420,000.00. Respondents filed a Motion to Correct/Amend Judgment and To Set Aside Execution Sale,
claiming that the parties did not agree in writing on any rate of interest and that petitioner merely sought for a
12% per annum interest in her Complaint. Surprisingly, the RTC awarded 5% monthly interest (or 60% per
annum) which increased their indebtedness from P124,400.00 to P652,000.00.

RTC granted respondents’ motion and accordingly modified the interest rate awarded from 5% monthly
to 12% per annum. Then, respondents deposited the total amount of P126,650.00.

Petitioner elevated the matter to the CA via a Petition for Certiorari under Rule 65 of the Rules of Court.
CA declared that the RTC exceeded its jurisdiction in awarding the 5% monthly interest but at the same time
pronouncing that the RTC gravely abused its discretion in subsequently reducing the rate of interest to 12% per
annum. Furthermore, the court held that the proper remedy is not to amend the judgment but to declare that
portion as a nullity. Void judgment for want of jurisdiction is no judgment at all, it cannot be the source of any
right nor the creator of any obligation, and no legal rights can emanate from it. CA annulled the said order.
Respondents filed with the CA a Petition for Annulment of Judgment and Execution Sale with Damages,
contending that the portion of the RTC Decision granting petitioner 5% monthly interest rate is in gross
violation of Section 3(d) of Rule 9 of the Rules of Court and of their right to due process. According to
respondents, the loan did not carry any interest. Ruling of the Court of Appeals. Initially, the CA denied due
course to the Petition. Upon respondents’ motion, it reinstated and granted the Petition and set aside portions of
the RTC’s Decision. The CA ruled that aside from being unconscionably excessive, the monthly interest rate of
5% was not agreed upon by the parties and that petitioner’s Complaint clearly sought only the legal rate of 12%
per annum. Following the mandate of Section 3(d) of Rule 9 of the Rules of Court, the CA concluded that the
awarded rate of interest is void for being in excess of the relief sought in the Complaint.

Petitioner’s motion for reconsideration was denied by the CA.

ISSUE: Whether or not the CA erred when it granted respondents’ petition for annulment of judgment of the
decision of the RTC despite the fact that said decision has become final and already executed contrary to the
Doctrine of Immutability of Judgment.

HELD: No. The award of 5% monthly interest violated respondent’s right to due process and, hence, the same
may be set aside in a Petition for Annulment of Judgment filed under Rule 47 of the Rules of Court.

A Petition for Annulment of Judgment under Rule 47 of the Rules of Court is a remedy granted only
under exceptional circumstances where a party, without fault on his part, has failed to avail of the ordinary
remedies of new trial, appeal, petition for relief or other appropriate remedies. Said rule explicitly provides that
it is not available as a substitute for a remedy which was lost due to the party’s own neglect in promptly
availing of the same. "The underlying reason is traceable to the notion that annulling final judgments goes
against the grain of finality of judgment. Litigation must end and terminate sometime and somewhere, and it is
essential to an effective administration of justice that once a judgment has become final, the issue or cause
involved therein should be laid to rest."

While under Section 2, Rule 47 of the Rules of Court a Petition for Annulment of Judgment may be
based only on the grounds of extrinsic fraud and lack of jurisdiction, jurisprudence recognizes lack of due
process as additional ground to annul a judgment. Grant of 5% monthly interest is way beyond the 12% per
annum interest sought in the Complaint and smacks of violation of due process. It is settled that courts cannot
grant a relief not prayed for in the pleadings or in excess of what is being sought by the party. Due process
considerations require that judgments must conform to and be supported by the pleadings and evidence
presented in court. It is improper to enter an order which exceeds the scope of relief sought by the pleadings,
absent notice which affords the opposing party an opportunity to be heard with respect to the proposed relief.
The fundamental purpose of the requirement that allegations of a complaint must provide the measure of
recovery is to prevent surprise to the defendant. The reason behind Section 3(d), Rule 9 of the Rules of Court is
to safeguard defendant’s right to due process against unforeseen and arbitrarily issued judgment. This is akin to
the very essence of due process. It embodies "the sporting idea of fair play" and forbids the grant of relief on
matters where the defendant was not given the opportunity to be heard thereon.

In the case at bench, the award of 5% monthly interest rate is not supported both by the allegations in the
pleadings and the evidence on record. The Real Estate Mortgage executed by the parties does not include any
provision on interest. Clearly, the RTC’s award of 5% monthly interest or 60% per annum lacks basis and
disregards due process. It violated the due process requirement because respondents were not informed of the
possibility that the RTC may award 5% monthly interest. They were deprived of reasonable opportunity to
refute and present controverting evidence as they were made to believe that the complainant petitioner was
seeking for what she merely stated in her Complaint.

Neither can the grant of the 5% monthly interest be considered subsumed by petitioner’s general prayer
for "other reliefs and remedies just and equitable under the premises x x x." To repeat, the court’s grant of relief
is limited only to what has been prayed for in the Complaint or related thereto, supported by evidence, and
covered by the party’s cause of action. Besides, even assuming that the awarded 5% monthly or 60% per annum
interest was properly alleged and proven during trial, the same remains unconscionably excessive and ought to
be equitably reduced in accordance with applicable jurisprudence.

Respondents’ former counsel was grossly negligent in handling the case of his clients; respondents did
not lose ordinary remedies of new trial, petition for relief, etc. through their own fault. Ordinarily, the mistake,
negligence or lack of competence of counsel binds the client. A recognized exception to the rule is when the
lawyers were grossly negligent in their duty to maintain their client’s cause and such amounted to a deprivation
of their client’s property without due process of law. In which case, the courts must step in and accord relief to a
client who suffered thereby.

Had the counsel carefully read the judgment it would have caught his attention and compelled him to
take the necessary steps to protect the interest of his client. But he did not. Judging from how respondents’
former counsel handled the cause of his clients, there is no doubt that he was grossly negligent in protecting
their rights, to the extent that they were deprived of their property without due process of law.

The Court is appalled by petitioner’s invocation of the doctrine of immutability of judgment. Petitioner
does not contest as she even admits that the RTC made a glaring mistake in awarding 5% monthly interest.
Amazingly, she wants to benefit from such erroneous award. The Court cannot allow this injustice to happen.
 MANCHESTER DEVELOPMENT V. CA MANCHESTER DEVELOPMENT V. CA

FACTS: A complaint for specific performance was filed by Manchester Development Corporation against City
Land Development Corporation to compel the latter to execute a deed of sale in favor Manchester. Manchester
also alleged that City Land forfeited the former’s tender of payment for a certain transaction thereby causing
damages to Manchester amounting to P78,750,000.00. This amount was alleged in the body of their Complaint
but it was not reiterated in the PRAYER of same complaint.

Manchester paid a docket fee of P410.00 only. Said docket fee is premised on the allegation of
Manchester that their action is primarily for specific performance hence it is incapable of pecuniary estimation.
The court ruled that there is an under assessment of docket fees hence it ordered Manchester to amend its
complaint. Manchester complied but what it did was to lower the amount of claim for damages to P10M. Said
amount was however again not stated in the prayer.

ISSUE: Whether or not the amended complaint should be admitted.

HELD: The amended complaint should not be admitted.

The docket fee, its computation, should be based on the original complaint. A case is deemed filed only
upon payment of the appropriate docket fee regardless of the actual date of filing in court. Here, since the
proper docket fee was not paid for the original complaint, it’s as if there is no complaint to speak of. As a
consequence, there is no original complaint duly filed which can be amended. So, any subsequent proceeding
taken in consideration of the amended complaint is void.

Manchester’s defense that this case is primarily an action for specific performance is not merited. The
Supreme Court ruled that based on the allegations and the prayer of the complaint, this case is an action for
damages and for specific performance. Hence, it is capable of pecuniary estimation.

Further, the amount for damages in the original complaint was already provided in the body of the
complaint. Its omission in the PRAYER clearly constitutes an attempt to evade the payment of the proper filing
fees. To stop the happenstance of similar irregularities in the future, the Supreme Court ruled that from this case
on, all complaints, petitions, answers and other similar pleadings should specify the amount of damages being
prayed for not only in the body of the pleading but also in the prayer, and said damages shall be considered in
the assessment of the filing fees in any case. Any pleading that fails to comply with this requirement shall not
bib accepted nor admitted, or shall otherwise be expunged from the record
 SUN INSURANCE OFFICE, LTD. (SIOL), E. B. PHILLIPS AND D. J. WARBY vs. HON.
MAXIMIANO C. ASUNCION, Presiding Judge, and MANUEL CHUA UY PO TIONG.
G.R. No. 79937-38. February 13, 1989.

FACTS: Sun Insurance filed a complaint for the consignation of a premium refund on a fire insurance policy
with a prayer for the judicial declaration of its nullity against private respondent Manuel Uy Po Tiong with the
RTC of Makati. Private respondent as declared in default for failure to file the required answer within the
reglementary period. Later, Tiong also filed a case against Sun Insurance for the refund of premiums and the
issuance of a writ of preliminary attachment, seeking the payment of actual, compensatory, moral, exemplary
and liquidated damages, attorney’s fees, expenses of litigation, and costs of suit with the RTC of Quezon City.
However, the amount of damages sought by Tiong was not specified, though it can be inferred from the body of
the complaint that it's around P50 million. Tiong only paid P210 as docket fee for his complaint which
prompted Sun Insurance to raise an objection, which was disregarded by the then presiding judge of the case
Judge Jose Castro.

Upon the order of the SC, the records of the complaint filed by Tiong along with 22 other cases assigned
to the branches of the RTC of Quezon City were under investigation for under-assessment of docket fees. Later,
the SC returned the records to the RTC and were re-raffled to the other judges of the said court with the
exclusion of Judge Castro. The SC also ordered the judges, through a Resolution, to reassess the docket fees of
the re-raffled cases and that in case of deficiency, to order its payment. The clerks of court were also required to
issue certificates of re-assessment of docket fees. However, the clerk of court who was assigned to reassess the
docket fee of the complaint filed by Tiong had a difficulty complying with the Resolution because the exact
amount sought to be recovered was not indicated in the complaint. Thus, the now presiding Judge Maximiano
Asuncion required the parties to comment on the clerk of court's report.

Tiong filed a "Compliance" and a "Re-Amended Complaint" and indicated P10 million as actual
compensatory damages in his prayer. But, in the second amended complaint Tiong filed, he alleged P44, 601,
623.70 as actual and compensatory damages and attorney's fees. Judge Asuncion admitted the second amended
complaint and the clerk of court reassessed the docket fee to be P39, 786, which was subsequently paid by
Tiong. Sun Insurance questioned the order of Judge Asuncion admitting the second amended complaint with the
CA. However, while the case filed by Sun Insurance was still pending in the CA, Tiong filed another
supplemental complaint claiming an additional P20 million as damages, making his total claim for damages to
be P64, 601, 623.70. Seven months after filing said supplemental complaint, Tiong paid the additional docket
fee of P80, 396.

Subsequently, the CA ruled on the petition filed by Sun Insurance. The CA ordered the RTC to reassess
the docket fee to be paid by Tiong on the basis of the amount of P25, 401, 707. The case was then elevated to
the SC. But during the pendency of this petition in the SC and after the promulgation of the decision in
Manchester, Tiong complied with the CA's decision and paid an additional docket fee of P62, 132.92 based on
the amount stipulated by the CA. Thus, Tiong paid a total of P182, 824. 90 as docket fee.

Sun Insurance (Pet): The docket fee paid by Tiong is not sufficient. Tiong should pay a total of P257,
810.49 because the total damages Tiong actually sought was P64, 601, 620.70. Pursuant to the ruling in
Manchester, Tiong's complaint should be dismissed and all incidents arising therefrom should be annulled for
Tiong's failure to pay the proper docket fee.

Tiong (Res): The ruling in Manchester cannot be applied retroactively. At the time the complaint was
instituted, the Manchester ruling was not yet made. The correct jurisprudence to apply in the case, then, is the
Magaspi v. Ramolete doctrine wherein the SC held that the trial court acquired jurisdiction over the case even if
the docket fee paid was insufficient.
ISSUES: (1) Whether or not the Manchester ruling can be applied retroactively.

(2) Whether or not Tiong can be considered to have filed the case even if the docket fee paid was
insufficient and that the trial court can be considered to have acquired jurisdiction over the case.

HELD: (1) Yes, The contention that Manchester cannot apply retroactively to this case is untenable. Statutes
regulating the procedure of the courts will be construed as applicable to actions pending and undetermined at
the time of their passage. Procedural laws are retrospective in that sense and to that extent.

(2) Yes, although there was an obvious intent on the part of TIong to defraud the government of the
docket fee due through his amendments in his complaints, a more liberal interpretation of the rules is called for
considering that, unlike in the Manchester case, Tiong demonstrated his willingness to abide by the rules by
paying the additional docket fees as required.

Thus, even if the Manchester ruling was applied, the SC, through this case provided the following
guidelines regarding docket fees:

1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the
prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the action.
Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may
allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or
reglementary period.

2. The same rule applies to permissive counterclaims, third party claims and similar pleadings, which
shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow
payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or
reglementary period.

3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and
payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the
pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor
shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized
deputy to enforce said lien and assess and collect the additional fee.

This petition was then dismissed. The Clerk of Court was also instructed to reassess and determine the
additional filing fee to be paid by Tiong considering the total amount of the claim sought in his original
complaint and supplemental complaint; and to require Tiong to pay the deficiency.
 Ballatan v. CA, 304 SCRA 34

FACTS: Eden Ballatan, together with other petitioners, is living in and registered owners of Lot No. 24.
Respondent Winston Go is living in and registered owners of Lot No. 25 and 26. And Li Ching Yao is living in
and the registered owner of Lot. 27. The Lots are adjacent to each other.

When Ballatan constructed her house in her lot, she noticed that the concrete fence and side pathway of
the adjoining house of respondent Winston Go encroached on the entire length of the eastern side of her
property. She was informed by her contractor of this discrepancy, who then told respondent Go of the same.
Respondent, however, claims that his house was built within the parameters of his father’s lot; and that this lot
was surveyed by engineer Jose Quedding of the Araneta Institute of Agriculture.

Petitioner called the attention on the matter and so the latter authorized another survey of the land by
Engineer Quedding. The latter then did the survey twice which led to the conclusion that Lots Nos 25, 26
(owned by respondent Go) and 27 (owned by Li Ching Yao) moved westward to the eastern boundary of Lot 24
(owned by petitioner Ballatan.) –(it was later on discovered by the courts that Go encroached 42 square meters
from the property of Ballatan and Yao encroached 37 square meters on Go’s property, all of which were in
GOOD FAITH)

Ballatan made written demands to the respondent to remove their improvements and since the latter
wasn’t answering the petitioner filed accion publiciana in court. Go’s filed their “Answer with Third-Party
Complaint” impleading as third party defendants respondents Li Ching Yaoand including Engineer Quedding as
well as the Araneta Institute of Agriculture.

RTC ruled in favor of the petitioner ordering respondent Go to demolish their improvements and pay
damages to Petitioner but dismissing the third-party complaint.

CA affirmed the dismissal of the third party-complaint as to Araneta Institute of Agriculture but
reinstated the the complaint against Yao and the Engineer. CA also affirmed the demolition and damages
awarded to petitioner and added that Yao should also pay respondent for his encroachment of respondent Go’s
property. Jose Quedding was also ordered to pay attorney’s fees for his negligence.

ISSUE: Whether or not the CA erred in not dismissing the third-party complaint due to non-payment of any
filing or docket fees

HELD: No. The Decision of the Court of Appeals dismissing the third-party complaint against Araneta Institute
of Agriculture is affirmed.

The Answer with Third-Party Complaint was admitted by the trial court without the requisite payment
of filing fees, particularly on the Go's prayer for damages. The trial court did not award the Go's any damages. It
dismissed the third-party complaint. The Court of Appeals, however, granted the third-party complaint in part
by ordering third-party defendant Jose N. Quedding to pay the Go's the sum of P5,000.00 as attorney's fees.

The appellate court correctly dismissed the third-party complaint against Araneta Institute of
Agriculture. The claim that the discrepancy in the lot areas was due to Araneta Institute of Agriculture's fault
was not proved. The appellate court, however, found that it was the erroneous survey by Engineer Quedding
that triggered these discrepancies. And it was this survey that respondent Winston Go relied upon in
constructing his house on his father's land. He built his house in the belief that it was entirely within the
parameters of his father's land. In short, respondents Go had no knowledge that they encroached on petitioners'
lot. They are deemed builders in good faith until the time petitioner Ballatan informed them of their
encroachment on her property.

Sps. Go v. Tong.
G.R. No. 151942. November 27, 2003.

FACTS: Petitioner Juana Tan Go (petitioner Juana) purchased a cashier’s check dated September 13,
1996 from the Far East Bank and Trust Company (FEBTC) Lavezares, Binondo Branch in the amount of
P500,000.00, payable to Johnson Y. Tong (respondent).

On petitioner Juanas’ instruction, the cashier’s check bore the words ‘Final Payment/Quitclaim’ after the
name of payee respondent allegedly to insure that respondent would honor his commitment that he would no
longer ask for further payments for his interest in the informal business partnership which he and she had earlier
dissolved.After the check was delivered to respondent, he deposited it with the inscribed words already erased,
hence, it was not honored.Respondents counsel subsequently wrote to the manager of FEBTC Lavezares Branch
informing that the words Final Payment/Quitclaim on the check had been unintentionally and inadvertently
erased without being initialed by the bank or the purchaser thereof and thus requesting that the check be
replaced with another payable to ‘Johnson Tong-Final Settlement/Quitclaim’ with the same amount, the bank
charges therefor to be paid by his client-respondent.

FEBTC did not grant the request of respondent’s counsel, hence, respondent filed a complaint against
FEBTC and petitioner Juana and her husband Gregorio Go at the Manila RTC, for sum of money, damages, and
attorney’s fees.Petitioners Juana and her husband and FEBTC, answering the complaint, alleged that the erasure
of the words Final Payment/Quitclaim was intentional on respondents’ part, reflective of his intention to collect
more from petitioner Juana, hence, the non-issuance of a replacement check was justified.During the pendency
of the case, petitioners’ son, George Tan Go, filed a criminal complaint against respondent for falsification of
the check. The criminal complaint was, however, subsequently dismissed by the Manila Prosecutors Office.

On August 25, 1998, respondent filed a Motion for Leave to File a Supplemental Complaint and to
Admit the Attached Supplemental Complaint which Supplemental Complaint alleged that petitioners used their
son to file the criminal complaint for falsification against him which caused damages, hence, prayed for an
increase in the amount of moral and exemplary damages sought to be recovered from P2.5 million to P55
million and prayed for the award of actual damages of P58,075.00. The motion was set for hearing on
September 4, 1998. Copy of the motion to petitioners was sent by registered mail.

By Order of September 4, 1998, Public Respondent granted the motion and admitted the Supplemental
Complaint noting that petitioners had been furnished copy of the Motion for Leave but that there had been no
comment thereon.Inadequately, Petitioners and FEBTCs Comment-Opposition were subsequently filed. More
so, Petitioners and FEBTC filed their respective Motions for Reconsideration of the Order.On November 18,
1998, petitioners filed a Manifestation of Deposit and deposited to the RTC Clerk of Court the amount of
P500,000.00 representing the amount of the check, subject to the condition that it shall remain deposited until
the disposition of the case.

Petitioners and FEBTCs separate Motions for Reconsideration of the September 4, 1998 Order were
later denied by Order of December 4, 1998, hence, petitioners filed their Answer to the Supplemental
Complaint with Counterclaim, alleging as Special Affirmative defenses that their son George took it upon
himself to file it in his own right, without their involvement in any way and that public respondent cannot
prosecute his Supplemental Complaint, and the same should be dismissed, unless the corresponding docket fee
and legal fees for the monetary claims in the amount of P55,057,075.00 are paid for.

On February 5, 1999, public respondent, acting on the verbal manifestation/motion of respondents

counsel, allowed the release of petitioners P500,000.00 deposit to respondent.By order of November 17, 1999,
public respondent, in the interest of justice and because of the huge amount of outlay involved, allowed
respondent to first deposit P25,000.00 on or before December 15, 1999 and P20,000.00 every month thereafter
until the full amount of docket fees is paid, and only then shall the deposits be considered as payment of docket
fees.By order of April 11, 2000, Petitioners Motion for Reconsideration of the November 17, 1999 Order was
denied.

Ruling of the Court of Appeals

On May 30, 2000, Petitioners, by a Petition for Certiorari before the CA, alleged that respondent judge
committed grave abuse of discretion when he issued the Orders of February 5, 1999 allowing the release of the
P500,000.00 deposit to respondent, November 17, 1999 allowing the payment, on staggered basis, of the docket
fees for the Supplemental Complaint and April 11, 2000 denying the Motion for Reconsideration of the
November 17, 1999 Order.

According to the CA, petitioners failed to assail, within the prescribed period, respondent judges
February 5, 1999 Order allowing the release of the money deposited by them. It was only in their May 30, 2000
Petition before the CA that they questioned the Order. Moreover, the appellate court held that, anyway,
respondent was entitled to the deposit, which represented the amount indicated on the check that belonged to
him.

As to the November 17, 1999 Order allowing respondent to pay the docket fee on a staggered basis and
the April 11, 2000 Order denying the Motion for Reconsideration thereof, the CA held that payment of the
prescribed docket fee within a reasonable period is permitted but in no case beyond the applicable prescriptive
or regular period. In that case, the court a quo opined that the docket fee payment scheme imposed by the
respondent judge cannot be said to have been issued with grave abuse of discretion.

Hence, Petitioner appeal to the Supreme Court assailing the Decision and Resolution of the Court of
Appeals (CA) denying their petition and petitioners’ Motion for Reconsideration.

ISSUES: (1) Whether or not the Petition for Certiorari under Rule 65 was proper.

(2) Whether or not respondent judge and the CA erred in allowing respondent to pay the docket fee on a
staggered basis.

(3) Whether or not public respondent Judge Juan Nabong committed grave abuse of discretion in not
suspending the proceedings pending appeal with the Honorable Court of Appeals, and in refusing to inhibit
himself.

HELD: (1) No. The proper remedy should be based on Rule 45 as what is assailed is an error of judgment of
the CA and not that of grave abuse of discretion amounting to lack or excess jurisdiction. When an error of
judgment of the CA is brought up to this Court for review, the action is properly designated as a petition for
review and not a special civil action. Thus, while the instant Petition is one for certiorari under Rule 65 of the
Rules of Court, the assigned errors are properly addressed in a petition for review under Rule 45.
Accordingly, when parties adopt an improper remedy, their petitions may be dismissed outright. However, the
Supreme Court is empowered by the Constitution, in the interest of substantial justice, to provide leniency on
procedural technicalities in order to rule speedily on cases and demonstrate that even without the procedural
infirmity, the Petition should be rejected due to its lack of merits.For certiorari under Rule 65 to lie, there must
be an abuse of discretion committed of which must be grave, as when power is exercised arbitrarily or
despotically by reason of passion or personal hostility; and such exercise must be so patent and gross as to
amount to an evasion of positive duty, or to a virtual refusal to perform it or to act in contemplation of law.
These conditions are absolutely wanting in the present case.
 (2) No. Plainly, while the payment of the prescribed docket fee is a jurisdictional requirement, even its
nonpayment at the time of filing does not automatically cause the dismissal of the case, as long as the fee is paid
within the applicable prescriptive or reglementary period; more so when the party involved demonstrates a
willingness to abide by the rules prescribing such payment.

In the case of Sun Insurance v. Asuncion, thus held: It is not simply the filing of the complaint or
appropriate initiatory pleading, but the payment of the prescribed docket fee that vests a trial court with
jurisdiction over the subject-matter or nature of the action. Where the filing of the initiatory pleading is not
accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but
in no case beyond the applicable prescriptive or reglementary period. As a rule, docket fees should be paid upon
the filing of the initiatory pleadings. However, for cogent reasons to be determined by the trial judge, staggered
payment thereof within a reasonable period may be allowed. Unless grave abuse of discretion is demonstrated,
the discretion of the trial judge in granting staggered payment shall not be disturbed.

(3) No. Because they were never raised before the CA. It is well-settled that parties are not permitted to
raise before this Court issues that were not taken up below.
NATIONAL STEEL CORPORATION, vs. COURT OF APPEALS, HON. ARSENIO J. MAGPALE, and
JOSE MA. P. JACINTO.
G.R. No. 123215. February 2, 1999.

FACTS: This is a petition for review on certiorari of the decision, dated September 11, 1995, of the Court of
Appeals, which dismissed the special civil action for certiorari filed by petitioner National Steel Corporation
(NSC) to set aside the order, dated April 6, 1994, of the Regional Trial Court, Branch LVII, City of Makati. In
the said order, the trial court denied the motion of petitioner NSC to dismiss the complaint for recovery of
personal property which private respondent Jose P. Jacinto had filed.

Private respondent Jacinto was the former owner of record of 100 shares of stock of the Manila Golf and
Country Club (MGCC) now owned by and registered in the name of petitioner NSC. On February 9, 1990, he
filed a complaint against the NSC, alleging that:

4. In or about 1970, for valuable considerations, Manila Golf and Country Club, Inc. (MGCCI) issued its Stock Certificate
No. 1361 to plaintiff representing 100 shares of MGCCI.
5. From about 1972 up to the early part of February 1986, plaintiff was in abroad and could not return to the Philippines for
reasons beyond his control.
6. When plaintiff returned to the Philippines in 1986, he discovered that Stock Certificate No. 1361 had been cancelled and a
replacement Stock Certificate had been issued in the name of NSC.
7. The cancellation and transfer of plaintiffs Stock Certificate No. 1361 is void for the reasons that: there was no meeting of
minds, there was no specific contract between plaintiff and NSC or any party covering the alleged transfer nor was there any
consideration for the same.
8. Despite repeated demands upon NSC to return and re-transfer plaintiffs 100 shares in MGCCI formerly covered by said
Stock Certificate No. 1361, NSC failed and refused and still fails and refuses to comply with the same.
9. MGCCIs act in cancelling plaintiffs stock certificate No. 1361 and issuing a replacement certificate in the name of NSC is
without basis and illegal considering that there was no valid document evidencing the assignment, sale or transfer by plaintiff
to NSC of MGCCI stock certificate No. 1361.
10. In consequence of NSC and MGCCIs illegal act in causing the cancellation and transfer of plaintiffs Stock Certificate No.
1361 unto NSCs name:
10.1. Plaintiff suffered mental anguish for which an award of moral damages of P1 Million is proper;
10.2. Plaintiff was constrained to litigate and secure the services of counsel for a fee of P100,000.00 and for which NSC and
MGCCI should be held liable.

Based on the foregoing allegations, Jacinto prayed:

WHEREFORE, it is respectfully prayed that judgment be rendered:

1. Ordering NSC to execute a deed of assignment re-transferring unto plaintiff the MGCCI certificate issued to the former in
replacement of Stock Certificate No. 1361 and to surrender said Deed of Assignment, together with the MGCCI certificate
issued to NSC (in replacement of Stock Certificate No. 1361) for cancellation thereof and to order MGCCI to cancel said
stock certificate and issue a new one in the name of Jose Ma. P. Jacinto;
2. If for any reason whatsoever NSC fails or refuses to execute the deed of assignment and surrender NSCs replacement stock
certificate, MGCCI be ordered to:
2.1. Cancel in its stock and transfer book the stock certificate issued to NSC issued in replacement of certificate No. 1361;
2.2. Issue a new stock certificate in the name of NSC or the stock certificate that might have been issued in replacement
thereof.
2.3. Declare as lost and of no force and effect the MGCCI stock certificate now outstanding and registered in the name of
NSC.
3. Ordering NSC and MGCCI to pay plaintiff, jointly and severally:

3.1. P1 Million as moral damages; and

3.2. P100,000.00 as attorneys fees.

Other reliefs are also prayed for. NSC sought the dismissal of the complaint on the ground of
prescription, but its motion was denied by the trial court in an order, dated November 9, 1990. NSC brought a
special civil action for certiorari in the CA, but again its petition was dismissed by the appellate court on August
30, 1991. Its attempt to secure review in this Court failed as its petition was dismissed in a resolution, dated
March 18, 1992. NSC then filed its answer, after which trial was held. It thereafter filed a motion to dismiss the
complaint against it on the ground of lack of jurisdiction. It alleged:

Plaintiff paid docket and other fees totalling P4,040.00. The certification of Clerk of Court Ma. Corazon Cecelia P. Cuba is
attached as Annex A:
2. Under Sec. 7(a) of Rule 141, as amended by the Resolution of the Supreme Court En Banc dated September 4, 1990, the
docket fees for filing an action . . . .is P600 for the first P150,000.00 and P5.00 for each P1,000.00 in excess of P150,000.00.
3. The actual value of the MGCCI share certificate as of February, 1990, when the complaint was filed, was P5,511,000.00.
A certification issued by the MGCCI attesting to the fair market value of a MGCCI share is attached as Annex B.
4. This means that the correct docket fee for the filing of plaintiffs complaint is approximately P26,805.00 and not P4,040.00
which is the amount plaintiff actually paid.
....
6. The failure of plaintiff to pay the correct filing fees on February 13, 1990 meant that this court did not acquire jurisdiction
over plaintiffs action. Under the ruling of Sun Insurance, and as explained below, the plaintiff cannot now pay the deficiency
in the filing fees because it is already beyond the applicable prescriptive or reglementary period.

The trial court denied petitioners motion in an order, dated April 6, 1994. Hence, the latter brought a
special civil action for certiorari in the CA, but its petition was dismissed on September 11, 1995. The CA
ruled:

The principal relief, or prayer in private respondents complaint is specific, for the NSC to execute a deed
of assignment re-transferring unto plaintiff the MGCCI certificate x x x in replacement of stock certificate No.
1861 x x x.

There is no allegation in the complaint of any quantified amount and/or of the actual value of the stock
certificate in question. There is also no separate cause of action and/or prayer in the face of the complaint that
private respondent, even in the alternative, prayed that if the principal relief is unavailing, that defendants be
ordered to pay him the actual or equivalent value of the stock certificate, hence there is even no reason or basis
to move for a more definite statement or for a bill of particulars of any matter which is not averred in the
complaint with sufficient definiteness or particularity to enable petitioner to properly prepare for a more
responsive pleading or to prepare for trial.

Perspicaciously, what should guide the office of the Clerk of Court, RTC, Makati, Metro Manila, in
assessing the correct docket fees for the filing of the complaint in Civil Case No. 90-4051, when it was filed on
February 13, 1990, is what is alleged and prayed for in the complaint. It would be uncalled for and baseless for
the clerk of court to consider at that point in time the supposed actual value of the MGCCI share certificate as of
February, 1990, x x x (in the amount of) P5,511,000.00, and then and there assess an additional docket fee of
P22,765.00 (P26,805.00 minus P4,040.00), precisely because the said sum of P5,511,000.00 is not alleged in
the body of the complaint, and which is not also sought to be recovered in the action.

There can be no divergence of opinion from the allegations, designation and the reliefs prayed for, as
clearly and definitively spelled out in the face of the complaint, that private respondents principal relief is for
petitioner NSC to execute a deed of assignment re-transferring unto plaintiff the MGCCI certificate issued to
the former in replacement of stock certificate No. 1861 x x x. And there also appears to be no hint of any
intention on the part of private respondent to mislead the clerk of court in assessing the correct fees, or to evade
the payment of the correct fees. Hence, this petition.

ISSUE: (1) Whether or not this case is one for specific performance rather than for recovery of property.

(2) Whether or not the trial court has jurisdiction over the case despite the incorrect payment by Jacinto
of the docket fees.

HELD: (1) No. It is one for the recovery of damages.

 Petitioner NSC correctly argues that the action in this case is for the recovery of property rather than for
specific performance and, hence, the docket fee should be based on the value of the property sought to be
recovered. It is similar to an action in which petitioner seeks the execution of a deed of sale of a parcel of land
in his favor. Such action has been held to be for the recovery of the real property and not for specific
performance since his primary objective is to regain the ownership and possession of the parcel of land.

As in this case, plaintiff, herein private respondent Jacinto, seeks the execution in his favor of a deed of
assignment of shares of stock, it follows that the action is for the recovery of personal property, the main
purpose of which is to regain the ownership and possession of the said shares of stock.

Accordingly, as petitioner NSC contends, Jacinto should pay docket fees based on the value of the
shares of stock and the amount of damages he seeks to recover. Under Rule 141, 7(a) of the Rules of Court as it
stood at the time of the filing of the complaint against petitioner, docket fees for ordinary civil actions should be
based on the total sum claimed, exclusive of interest, or the stated value of the property in litigation. Thus, the
docket fees should be computed on the basis of the value of the property and the amount of related damages
claimed, exclusive of interest. As we held in Tacay v. Regional Trial Court, where the action involves real
property and a related claim for damages as well, the legal fees shall be assessed on the basis of both (a) the
value of the property and (b) the total amount of related damages sought. The Court acquires jurisdiction over
the action if the filing of the initiatory pleading is accompanied by the payment of the requisite fees, or, if the
fees are not paid at the time of the filing of the pleading, as of the time of full payment of the fees within such
reasonable time as the court may grant, unless, of course, prescription has set in in the meantime.

(2) Yes. It does not follow, however, that the trial court should have dismissed the complaint for failure
of private respondent to pay the correct amount of docket fees. Although the payment of the proper docket fees
is a jurisdictional requirement, the trial court may allow the plaintiff in an action to pay the same within a
reasonable time before the expiration of the applicable prescriptive or reglementary period. If the plaintiff fails
to comply with this requirement, the defendant should timely raise the issue of jurisdiction or else he would be
considered in estoppel. In the latter case, the balance between the appropriate docket fees and the amount
actually paid by the plaintiff will be considered a lien on any award he may obtain in his favor.

In the case at bar, petitioner NSC filed in 1990 a motion to dismiss but did not raise this point. Instead it
based his motion on prescription. Upon the denial by the trial court of its motion to dismiss, it filed an answer,
submitted its pre-trial brief, and participated in the proceedings before the trial court. It was only in 1993 more
than three years after filing its motion to dismiss that petitioner NSC again filed a motion to dismiss the action
on the ground of lack of jurisdiction. Clearly, petitioner is estopped from raising this issue. Indeed, while the
lack of jurisdiction of a court may be raised at any stage of an action, nevertheless, the party raising such
question may be estopped if he has actively taken part in the very proceedings which he questions and he only
objects to the courts jurisdiction because the judgment or the order subsequently rendered is adverse to him.