Compulsory Counterclaim

ARTURO C. ALBA, JR.

vs. RAYMUND D. MALAPAJO, RAMIL D. MALAPAJO
[G.R. No. 198752; January 13, 2016]

PERALTA, J.:

FACTS

Arturo C. Alba, Jr. filed a Complaint against respondents for recovery of ownership and/or declaration of nullity or cancellation of title and
damages alleging, among others, that his title was subsequently canceled by virtue of a deed of sale which was forged by respondents
Malapajo; that new TCT No. T-56840 was issued in the name of respondents Malapajo; that the deed of sale was a forged by Malapajos.

Malapajos filed their Answer with Counterclaim contending that the deed was a unilateral document which was presented to them already
prepared and notarized; that before the sale, Arturo had, obtained loans from them and their mother secured by separate real estate
mortgages covering the subject property; that the two real estate mortgages had never been discharged. Malapajos counterclaimed for
damages and for reimbursement of petitioner's loan from them plus the agreed monthly interest in the event that the deed of sale is declared
null and void on the ground of forgery.

Arturo filed a Reply stating, among others, that the court had not acquired jurisdiction over the nature of respondents' permissive
counterclaim. Malapajos’ counterclaims are in the nature of a permissive counterclaim, thus, there must be payment of docket fees.

RTC ruled that the counterclaim is compulsory in nature. On appeal, the CA dismissed the Petition for Certiorari of Arturo. Hence, this
petition.

ISSUE

Whether respondents’ counterclaim, i.e., reimbursement of the loan obtained from them in case the deed of absolute sale is declared null
and void on the ground of forgery, is permissive in nature which requires the payment of docket fees and a certification against forum
shopping for the trial court to acquire jurisdiction over the same.

HELD

YES. Petitioner seeks to recover the subject property by assailing the validity of the deed of sale on the subject property which he allegedly
executed in favor of respondents Malapajo on the ground of forgery. Respondents counterclaimed that, in case the deed of sale is declared
null and void, they be paid the loan petitioner obtained from them plus the agreed monthly interest which was covered by a real estate
mortgage on the subject property executed by petitioner in favor of respondents. There is a logical relationship between the claim and the
counterclaim, as the counterclaim is connected with the transaction or occurrence constituting the subject matter of the opposing party's
claim. Notably, the same evidence to sustain respondents' counterclaim would disprove petitioner's case. In the event that respondents could
convincingly establish that petitioner actually executed the promissory note and the real estate mortgage over the subject property in their
favor then petitioner's complaint might fail. Petitioner's claim is so related logically to respondents' counterclaim, such that conducting
separate trials for the claim and the counterclaim would result in the substantial duplication of the time and effort of the court and the parties.

Since respondents' counterclaim is compulsory, it must be set up in the same action; otherwise, it would be barred forever. If it is filed
concurrently with the main action but in a different proceeding, it would be abated on the ground of litis pendentia; if filed subsequently, it
would meet the same fate on the ground of res judicata. There is, therefore, no need for respondents to pay docket fees and to file a
certification against forum shopping for the court to acquire jurisdiction over the said counterclaim.

[The Court] agree with the RTC’s disquisition in finding that respondents’ counterclaim is compulsory, to wit:

The arguments of the plaintiffs that this transaction is a permissive counterclaim do not convince.

By the manner in which the answer pertaining to this transaction was phrased, the real estate mortgage was the origin of the Deed of
Absolute Sale after the loan of P600,000.00 using the same property as security for the payment thereof was not settled. In short, it is one of
defendants' defenses and controverting evidence against plaintiffs' allegations of falsification of the Deed of Absolute Sale, the property
subject of the Deed of Sale being one and the same property subject of the mortgage.
Dismissal of Action
LIM TECK CHUAN
vs. SERAFIN UY and LEOPOLDA CECILIO, LIM SING CHAN @ HENRY LIM
[G.R. No. 155701; March 11, 2015]

REYES, J.:

FACTS

Serafin Uy filed a Cadastral Case before the RTC praying for the issuance of a new owner’s duplicate TCT in his name which was later
issued. However, it was later recalled because Lim Teck Chuan filed an Opposition alleging that he is one of the legitimate descendants of
Antonio, the former owner of the land in dispute. Meanwhile, Henry Lim executed an Affidavit of Sole Adjudication/Settlement of Estate of
Antonio claiming that he is the sole surviving heir of Antonio. Henry Lim sold the lot to Leopolda.

Serafin Uy then filed a Complaint for Quieting of Title against Leopolda, Henry and Lim. Lim Teck Chuan filed a Cross-claim against
Leopolda. Leopolda filed a counterclaim for damage against Lim Teck Chuan.

However, Serafin and Leopolda later submitted a Joint Motion to Dismiss alleging therein that they have amicably settled their differences
and Leopolda has agreed to waive her counterclaim for damages against Serafin. And that Serafin has already secured a certificate of title to
Lot No. 5357 in his name and has also agreed for the cancellation of the same, and for issuance of a new one, over said Lot 5357, in their
common names.

Lim Teck Chuan filed his opposition praying for the dismissal of the Motion to Dismiss. He alleged that he had valid counterclaims against
Serafin and Leopolda. In his opposition, Lim Teck Chuan prayed that his counterclaims be resolved in the said case. However, the RTC
granted the joint Motion to Dismiss and dismiss the complaint.. Lim Teck Chuan then appealed to the Court via Petition for Review via Rule
45.

ISSUE

Whether or not the RTC correctly ruled for the dismissal of the complaint filed by Serafin by virtue of the Joint Motion to Dismiss by Serafin
and Leopolda as well as the counterclaims of Lim Teck Chuan against the former.

HELD

YES. The RTC granted the Joint Motion to Dismiss upon the behest of Serafin, the plaintiff therein on the main ground that the case had
become moot and academic since his title to Lot 5357 had been allegedly quieted and the reliefs prayed for were obtained.

xxx the RTC erred when it dismissed the case when the present rules state that the dismissal shall be limited only to the complaint. A
dismissal of an action is different from a mere dismissal of the complaint. For this reason, since only the complaint and not the action is
dismissed, the defendant in spite of said dismissal may still prosecute his counterclaim in the same action. Xxx In Pinga, the Court clearly
stated that the dismissal of the complaint does not necessarily result to the dismissal of the counterclaim, abandoning the rulings in Metals
Engineering Resources Corporation v. Court of Appeals, International Container Terminal Services, Inc. v. Court of Appeals, and BA Finance
Corporation v. Co. The Court held that:

At present, even Section 2, concerning dismissals on motion of the plaintiff, now recognizes the right of the defendant to prosecute the
counterclaim either in the same or separate action notwithstanding the dismissal of the complaint, and without regard as to the permissive or
compulsory nature of the counterclaim.

In his commentaries on the 1997 Rules of Civil Procedure, Justice Regalado expounds on the effects of the amendments to Section 2 and 3
of Rule 17:

2. Under this revised section [2], where the plaintiff moves for the dismissal of his complaint to which a counterclaim has been
interposed, the dismissal shall be limited to the complaint. Such dismissal shall be without prejudice to the right of the defendant to
either prosecute his counterclaim in a separate action or to have the same resolved in the same action. Should he opt for the first
alternative, the court should render the corresponding order granting and reserving his right to prosecute his claim in a separate
complaint. Should he choose to have his counterclaim disposed of in the same action wherein the complaint had been dismissed,
he must manifest such preference to the trial court within 15 days from notice to him of plaintiff’s motion to dismiss. These
alternative remedies of the defendant are available to him regardless of whether his counterclaim is compulsory or permissive. x x
x.

In the instant case, the petitioner’s preference to have his counterclaim (and cross-claims) be prosecuted in the same action was timely
manifested. The records show that Serafin and Leopolda furnished the petitioner’s counsel with a copy of their Joint Motion to Dismiss by
posting it (via registered mail) on September 19, 2001. Said motion was filed in court the following day. On October 4, 2001, the petitioner
filed his Opposition/Comment thereto. Copies of the said opposition were personally served upon the opposing parties on the same date. In
paragraph 1.5 of said opposition, the petitioner expressed his preference to have his counterclaim and cross-claim prosecuted in the same
case, as he thus stated:

1.5 That the undersigned defendant manifest to this Honorable Court of his preference that the above[ ]counterclaims and cross-
claims be resolved in the present case.
Compulsory Counterclaim must be pleaded in answer
METOROPLITAN BANK AND TRUST COMPANY
vs. CPR PROMOTIONS AND MARKETING, INC. and SPOUSES REYNOSO
[G.R. No. 200567; June 22, 2015]

VELASCO, JR., J.:

FACTS

CPR Promotions and Marketing, Inc. (CPR Promotions) obtained loans from MBTC covered by fifteen (15) promissory note (PNs) all signed
by Souses Reynoso as Treasurer and President of CPR Promotions, respectively. The loans were secured by two deeds of real estate
mortgage.

Upon default in payment by respondents, MBTC filed a petition for extra-judicial foreclosure of the real estate mortgages. The mortgaged
properties, except one, were sold at a public auction sale. Notwithstanding the foreclosure, MBTC alleged that there remained a deficiency
balance of PhP 2,628,520.73, plus interest and charges. Despite petitioner’s repeated demands, however, respondents failed to settle the
alleged deficiency.

Thus, MBTC filed an action for collection of sum of money against respondents. The RTC ruled in favor of MBTC.

Respondents appealed, the CA reversed the RTC decision and ordered MBTC to refund Ph₱722,602.22 to Spouses Reynoso.

MBTC asserts that the CA’s grant of a refund valued at PhP 722,602.22 plus legal interest in favor of respondents is erroneous because
respondents never set up a counterclaim for refund of any amount. Respondents alleged that in their Answer with Compulsory Counterclaim,
they laid-down in detail the excess of teh prices of the foreclosed properties over their obligation.

ISSUE

Whether or not respondents are entitled for the refund of PhP 722,602.22.

HELD

NO. Respondents belatedly raised their compulsory counterclaim

Accordingly, a counterclaim is compulsory if: (a) it arises out of or is necessarily connected with the transaction or occurrence which is the
subject matter of the opposing party’s claim; (b) it does not require for its adjudication the presence of third parties of whom the court cannot
acquire jurisdiction; and (c) the court has jurisdiction to entertain the claim both as to its amount and nature, except that in an original action
before the RTC, the counterclaim may be considered compulsory regardless of the amount.

In determining whether a counterclaim is compulsory or permissive, [the Court] have, in several cases, utilized 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 claims, absent the compulsory counterclaim rule?

(3) Will substantially the same evidence support or refute plaintiff’s claim as well as the defendant’s counterclaim?

(4) Is there any logical relation between the claim and the counterclaim, such that the conduct of separate trials of the respective
claims of the parties would entail a substantial duplication of effort and time by the parties and the court? This test is the
"compelling test of compulsoriness."

Based on the above tests, it is evident that a claim for recovery of the excess in the bid price vis-à-vis the amount due should be interposed
as a compulsory counterclaim in an action for recovery of a deficiency filed by the mortgagee against the debtor-mortgagor. First, in both
cases, substantially the same evidence is needed in order to prove their respective claim. Second, adjudication in favor of one will
necessarily bar the other since these two actions are absolutely incompatible with each other; a debt cannot be fully paid and partially unpaid
at the same time. Third, these two opposing claims arose from the same set of transactions. And finally, if these two claims were to be the
subject of separate trials, it would definitely entail a substantial and needless duplication of effort and time by the parties and the court, for
said actions would involve the same parties, the same transaction, and the same evidence. The only difference here would be in the findings
of the courts based on the evidence presented with regard to the issue of whether or not the bid prices substantially cover the amounts due.

Having determined that a claim for recovery of an excess in the bid price should be set up in the action for payment of a deficiency as a
compulsory counterclaim, [the Court] rule that respondents failed to timely raise the same.

It is elementary that a defending party’s compulsory counterclaim should be interposed at the time he files his Answer, and that failure to do
so shall effectively bar such claim. As it appears from the records, what respondents initially claimed herein were moral and exemplary
damages, as well as attorney’s fees. Then, realizing, based on its computation, that it should have sought the recovery of the excess bid
price, respondents set up another counterclaim, this time in their Appellant’s Brief filed before the CA. Unfortunately, respondents’ belated
assertion proved fatal to their cause as it did not cure their failure to timely raise such claim in their Answer. Consequently, respondents’
claim for the excess, if any, is already barred. With this, we now resolve the substantive issues of this case.
Negative Pregnant
NELSON P. VALDEZ
vs. ATTY. ANTOLIN ALLYSON DABON, JR.
[A.C. No. 7353; November 16, 2015]

Per Curiam:

FACTS

Complainant Nelson charged respondent Atty. Dabon, a Division Clerk of Court of the CA with gross immorality for allegedly carrying on an
adulterous relationship with his wife, Sonia Romero Valdez (Sonia), which was made possible by sexual assaults and maintained through
threat and intimidation.

In his Affidavit-Complaint, Nelson averred, among others, that he is married to Sonia a Court Stenographer of the CA. Sonia admitted to
have had an adulterous and immoral relationship with Atty. Dabon, for a span of more than five years; that he came to know of the
relationship after receiving an anonymous text message hinting/stating about the existence of an illicit affair between the two; and that
initially, Sonia denied the affair but eventually broke down and admitted her sexual liaison with Atty. Dabon when confronted with a text
message he received from Atty. Jocelyn Dabon (Atty. Joy), the wife of the respondent.

Atty. Dabon strongly refuted the accusation against him. In hisAnswer, Atty. Dabon argued, among others, that Nelson had no personal
knowledge of the alleged illicit relationship between him and Sonia and that nowhere in the administrative complaint of Nelson previously
filed before the CA was there any mention of any sexual assault he allegedly committed against Sonia or of an adulterous relationship that
was maintained through threats and intimidation.

The IBP Commission on Bar Discipline (IBP-CBD) rendered his Report and Recommendation, finding that the charge against respondent
Atty. Dabon had been sufficiently proven.

Atty. Dabon filed a motion for reconsideration but it was denied by the IBP Board of Governors. After due consideration, the Court resolves to
adopt the findings and recommendation of the IBP-CBD.

ISSUE

Whether or not the Answer of Atty. Dabon results to Negative Pregnant.

HELD

YES. To begin with, the Court notes from the respondent's Comment that he appeared to be perplexed as to whether or not he would admit
his extramarital liaisons with Sonia. As Investigating Commissioner Chan stated in his report, Atty. Dabon interposed a blanket denial of the
romantic involvement but at the same time, he seemed to have tacitly admitted the illicit affair only that it was not attended by sexual
assaults, threats and intimidations. The Court also observed that he devoted considerable effort to demonstrate that the affair did not amount
to gross immoral conduct and that no sexual abuse, threat or intimidation was exerted upon the person of Sonia, but not once did he
squarely deny the affair itself.

In other words, the respondent's denial is a negative pregnant, a denial coupled with the admission of substantial facts in the pleading
responded to which are not squarely denied. 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. Where a fact is alleged with qualifying or modifying
language and the words of the allegation as so qualified or modified are literally denied, it has been held that the qualifying circumstance
alone is denied while the fact itself is admitted. It is clear from Atty. Dabon's Comment that his denial only pertained as to the existence of a
forced illicit relationship. Without a categorical denial thereof, he is deemed to have admitted his consensual affair with Sonia.
Negative Pregnant
REPUBLIC OF THE PHILIPPINES vs.
SANDIGANBAYAN
[G.R. No. 152154; July 15, 2003]

CORONA, J.:

FACTS

Republic sought, among others, the declaration of the aggregate 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. The funds were previously held by the five account groups, using
various foreign foundations in certain Swiss banks.

Before the case was set for pre-trial, a General Agreement and the Supplemental Agreements were executed by the Marcos children and
then PCGG Chairman. Subsequently, respondent Marcos children filed a motion for the approval of said agreements and for the
enforcement thereof.

The General Agreement specified in one of its premises or "whereas clauses" the fact that petitioner "obtained a judgment from the Swiss
Federal Tribunal that the US$356 million belongs to the Republic of the Philippines.

Mrs. Marcos filed a manifestation claiming she was not a party to the motion for approval of the Compromise Agreement and that she owned
90% of the funds with the remaining 10% belonging to the Marcos estate and that the Swiss deposits were lawfully acquired by them.

Respondents also denied the allegation of petitioner by simply saying that they had no knowledge or information sufficient to form a belief as
to the truth of the allegations against them. Specifically, in their Answer respondent alleged:

22. 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.

Republic then filed a motion for summary judgment pertaining to the forfeiture of the US$356 million, alleging that respondents' admission
made during the pre-trial that they do not have any interest or ownership over the funds subject of the action for forfeiture tenders no genuine
issue or controversy as to any material fact in the present action, thus warranting the rendition of summary judgment.

ISSUE

Whether or not respondents raised any genuine issue of fact which would either justify or negate summary judgment

HELD

YES. Yes. Evidently, this particular denial had the earmark of what is called in the law on pleadings as 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.

In the instant case, the material allegations in paragraph 23 of the said petition were not specifically denied by respondents in paragraph 22
of their answer. 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.

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.
Negative Pregnant

CANELAND SUGAR CORPORATION, petitioners,

vs. HON. REYNALDO M. ALON, LAND BANK OF THE PHILIPPINES, and ERIC B. DE VERA, respondents.
[G.R. No. 142896; September 12, 2007]

AUSTRIA-MARTINEZ, J.:

FACTS

Caneland Sugar Corporation (Caneland) obtained a loan from Land Bank of the Philippines (LBP). Caneland executed a promissory note in
favour of LBP and a Mortgage Trust Indenture and Mortgage Participation. Caneland defaulted in payment, thus LBP foreclosed the
mortgage property.

Caneland filed with the RTC a complaint for damages, injunction, and nullity of mortgage against the LPB and Court Sheriff, praying for the
issuance of a TRO enjoining LBP and the Sheriff and the declaration of nullity of the mortgage constituted over petitioner’s property
contending that the promissory notes are silent as to whether they are covered by the Mortgage Trust Indenture and Mortgage Participation
on its property covered by TCT No. T-11292, among others.

The RTC hold in abeyance the foreclosure sale. Notwithstanding said directive, another foreclosure sale was scheduled by the RTC ruling
that P.D. 385 provided that “no restraining order, temporary or permanent injunction shall be issued by the court against any government
financial institution in any action taken by such institution in compliance with the mandatory foreclosure provided by said law.”

Caneland filed a Motion for Reconsideration which was denied. It then filed with the CA a Petition for Certiorari and Prohibition with Injunction
which was denid by the CA as well as its subsequent MR.

Hence, this Petition for Review on Certiorari under Rule 45 of the Rules of Court.

ISSUE

Whether the CA erred in finding that the RTC did not commit grave abuse of discretion in not enjoining the extrajudicial foreclosure of the
properties subject of this case.

HELD

NO. Petitioner does not dispute its loan obligation with respondent. Petitioner’s bone of contention before the RTC is that the promissory
notes are silent as to whether they were covered by the Mortgage Trust Indenture and Mortgage Participation on its property covered by TCT
No. T-11292. It does not categorically deny that these promissory notes are covered by the security documents. These vague assertions are,
in fact, negative pregnants, i.e., denials pregnant with the admission of the substantial facts in the pleading responded to which are not
squarely denied. As defined in Republic of the Philippines v. Sandiganbayan, 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."

Petitioner’s allegations do not make out any justifiable basis for the granting of any injunctive relief. Even when the mortgagors were
disputing the amount being sought from them, upon the non-payment of the loan, which was secured by the mortgage, the mortgaged
property is properly subject to a foreclosure sale. This is in consonance with the doctrine that to authorize a temporary injunction, the plaintiff
must show, at least prima facie, a right to the final relief.
Parts of a Pleading; Forum Shopping

PRISCILLA ALMA JOSE, Petitioner,

vs. RAMON C. JAVELLANA, ET AL., Respondents.
[G.R. No. 158239; January 25, 2012]

BERSAMIN, J.:

FACTS

Margarita Marquez Alma Jose (Margarita) sold to Ramon Javellana by deed of conditional sale two parcels of land. They agreed, among
others, that Javellana would pay the balance of ₱80,000.00 upon the registration of the land under the Torrens System by Margarita. Should
Margarita become incapacitated, her son and attorney-in-fact, Juvenal M. Alma Jose (Juvenal), and her daughter, Priscilla, would receive the
payment of the balance and proceed with the application for registration.

After Margarita and Juvenal died, Priscilla did not cause the registration of the properties and, instead, began to improve the properties land.
Javellana filed an action for specific performance, injunction, and damages against Priscilla with the RTC. Priscilla 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 RTC dismissed the Complaint opining that Javellana had no cause of action against Priscilla, Priscilla not being a party in the deed of
conditional sale and that he had never demanded the registration of the land from Margarita or Juvenal, or brought a suit for specific
performance against Margarita or Juvenal.

Javellana iled an appeal to the CA. Javellana also filed a Petition for Certiorari in the CA assailing the RTC order denying his complaint and
his MR praying also that Priscilla be enjoined from further improving the land in dispute. The CA denied the Petition for Certiorari finding that
the RTC did not commit grave abuse of discretion.

The CA, however, ruled in favor of Javellana in his Appeal. Priscilla filed an MR but was denied by the CA. Hence, this petition.

ISSUE

Whether or not Javellana is guilty of forum shopping when he filed an appeal assailing the RTC denial of his Complaint and subsequent MR
and a Petition for Certiorari alleging that the RTC committed grave abuse of discretion in denying his Complaint and MR with the CA.

HELD

NO. Forum shopping is the act of a party litigant against whom an adverse judgment has been rendered in one forum seeking and possibly
getting a favorable opinion in another forum, other than by appeal or the special civil action of certiorari, or the institution of two or more
actions or proceedings grounded on the same cause or supposition that one or the other court would make a favorable disposition. Forum
shopping happens when, in the two or more pending cases, there is identity of parties, identity of rights or causes of action, and identity of
reliefs sought. Where the elements of litis pendentia are present, and where a final judgment in one case will amount to res judicata in the
other, there is forum shopping. For litis pendentia to be a ground for the dismissal of an action, there must be: (a) identity of the parties or at
least such as to represent the same interest in both actions; (b) identity of rights asserted and relief prayed for, the relief being founded on
the same acts; and (c) the identity in the two cases should be such that the judgment which may be rendered in one would, regardless of
which party is successful, amount to res judicata in the other.

For forum shopping to exist, both actions must involve the same transaction, same essential facts and circumstances and must raise
identical causes of action, subject matter and issues. Clearly, it does not exist where different orders were questioned, two distinct causes of
action and issues were raised, and two objectives were sought.

In his appeal in C.A.-G.R. CV No. 68259, Javellana aimed to undo the RTC’s erroneous dismissal of Civil Case No. 79-M-97 to clear the way
for his judicial demand for specific performance to be tried and determined in due course by the RTC; but his petition for certiorari had the
ostensible objective "to prevent (Priscilla) from developing the subject property and from proceeding with the ejectment case until his appeal
is finally resolved," as the CA explicitly determined in its decision in C.A.-G.R. SP No. 60455.

Instead, [the Court] see the situation of resorting to two inconsistent remedial approaches to be the result of the tactical misjudgment by
Javellana’s counsel on the efficacy of the appeal to stave off his caretaker’s eviction from the parcels of land and to prevent the development
of them into a residential or commercial subdivision pending the appeal. In the petition for certiorari, Javellana explicitly averred that his
appeal was "inadequate and not speedy to prevent private respondent Alma Jose and her transferee/assignee xxx from developing and
disposing of the subject property to other parties to the total deprivation of petitioner’s rights of possession and ownership over the subject
property," and that the dismissal by the RTC had "emboldened private respondents to fully develop the property and for respondent Alma
Jose to file an ejectment case against petitioner’s overseer xxx." Thereby, it became far-fetched that Javellana brought the petition for
certiorari in violation of the policy against forum shopping.
Forum Shopping

ELSA D. MEDADO
vs. HEIRS OF THE LATE ANTONIO CONSING
[G.R. No. 186720; February 8, 2012]

REYES, J.:

FACTS

Spouses Medado and the Estate of Consing, as represented by Soledad, executed Deeds of Sale with Assumption of Mortgage for the
former's acquisition from the latter of the Hacienda Sol. Spouses Medado undertook to assume the estate's loan with PNB.

Subsequent to the sale, the Estate of Consing offered the subject lots to the government via the DAR’s Voluntary Offer to Sell (VOS)
program. The Estate of Consing also instituted with the RTC an action for rescission and damages (Civil Case No. 00-11320) against
Spouses Medado, PNB and the Register of Deeds, due to the alleged failure of the spouses to meet the conditions in their agreement.

While Civil Case No. 00-11320 for rescission was pending, LBP issued in favor of the Estate of Consing a certificate of deposit of cash and
agrarian reform bonds, as compensation for the lots covered by the VOS. Spouses Medado filed an action for injunction (797-C) with the
prayer for the issuance of a TRO with the RTC, claiming that they arfe entitled to the said proceeds considering that they had bought the
properties. The RTC granted Spouses Medado's petition.

The heirs of the late Antonio Consing (Consing) filed a Petition for Certiorari. They sought, among others, the dismissal of the complaint for
injunction for violation of the rules on litis pendentia and forum shopping Spouses Medado questioned the authority of Soledad to sign the
petition's certification of non-forum shopping on behalf of her co-petitioners.

The CA granted the Petition for Certiorari ruling that Spouses Medado is guilty of forum shopping. Hence, this petition.

ISSUES

1. Whether or not the CA correctly admitted the petition for certiorari filed before it, notwithstanding alleged deficiencies in its verification
and certification against forum shopping;

2. Whether or not the CA correctly held that the rule against forum shopping was violated by the filing of the complaint for injunction during
the pendency of the action for rescission and damages.

HELD

1. YES. The requirements for verification and certification against forum shopping in the CA petition were substantially complied with.

Xxx records show that Soledad signed the verification and certification against forum shopping on behalf of her co-petitioners by virtue of
a Special Power of Attorney (SPA) attached to the petition filed with the CA. Xxx 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.

In Heirs of Olarte v. Office of the President: The general rule is that the certificate of non-forum shopping must be signed by all the
plaintiffs in a case and the signature of only one of them is insufficient. xxx The rule of substantial compliance may be availed of with
respect to the contents of the certification. This is 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. Thus, under justifiable circumstances, the Court has relaxed the rule requiring the
submission of such certification considering that although it is obligatory, it is not jurisdictional.

2. YES. All elements of litis pendentia are present with the filing of the two cases. There is no dispute that there is identity of parties
representing the same interests in the two actions, both involving the estate and heirs of the late Consing on one hand, and Spouses
Medado on the other. The rescission case 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, 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 action, and their interests, are the same.

The two other elements are likewise satisfied. 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.
Forum Shopping

COMMISSION ON APPOINTMENTS
vs. CELSO M. PALER
[G.R. No. 172623; March 3, 2010]

CORONA, J.:

FACTS

Paler was an employee at the COA. He submitted a request for vacation leave for 74 working days – from August 1, 2003 to November 14,
2003. Since he already had an approved leave from June 9 to July 30, 2003, Paler left for the United States on June 8, 2003, without
verifying whether his application for leave (for August 1 – November 14, 2003) was approved or denied.

The Commission Chairman informed Paler that his employment has been terminated due to his continuous 30-day absence without leave
and in accordance with Section 63, CSC Memorandum Circular No. 14, s. 1999.

Paler moved for reconsideration but this was denied on the ground that it was filed beyond the 15-day reglementary period.

On appeal, the CSC reversed and set aside the Commission Chairman's decision, thus reinstating Paler. The Commission filed a motion for
reconsideration but this was denied by the CSC.

Thus, COA filed with the CA a petition for review under Rule 43 of the Rules of Court.

The CA affirmed with modification the CSC resolutions reinstating Paler but with mofifications as Paler already reached the age of retirement.

COA filed a motion for reconsideration but this was denied by the CA. Hence, this petition.

In his comment, Paler assails Atty. Arturo L. Tiu's authority to file the petition and sign the verification and certification of non-forum shopping
on behalf of the Commission Chairman.

ISSUE

Whether or not the Commission Secretary has authority to file the petition and sign the verification and certification of non-forum shopping in
behalf of the Commission Chairman.

HELD

NO. The petitioner in this case is the Commission on Appointments, a government entity created by the Constitution, and headed by its
Chairman. There was no need for the Chairman himself to sign the verification. Its representative, lawyer or any person who personally
knew the truth of the facts alleged in the petition could sign the verification. With regard, however, to the certification of non-forum shopping,
the established rule is that it must be executed by the plaintiff or any of the principal parties and not by counsel. In this case, Atty. Tiu failed
to show that he was specifically authorized by the Chairman to sign the certification of non-forum shopping, much less file the petition in his
behalf. There is nothing on record to prove such authority. Atty. Tiu did not even bother to controvert Paler’s allegation of his lack of authority.
This renders the petition dismissible.
Certification of Non-Forum Shopping; Signature of all Petitioners

ROMEO BASAN, et. al

vs. COCA-COLA BOTTLERS PHILIPPINES
[G.R. Nos. 174365-66; February 4, 2015]

PERALTA, J.:

FACTS

Romeo Basan, et. Al. were employees of Coca-Cola Bottlers Philippines (Coca-Cola). They filed a complaint for illegal dismissal with money
claims against Coca-Cola, alleging that respondent dismissed them without just cause and prior written notice required by law. Coca-Cola
countered that it hired Basan et. al as temporary route helpers to act as substitutes for its absent regular route helpers for a fixed period.

The Labor Arbiter ruled in favor of Basan et. Al and found that they are regular employees, and thus, their dismissal was done contrary to law
in the absence of just cause and prior written notice.

On appeal, the NLRC affirmed the Labor Arbiter’s decision. The subsequent MR filed by Coca-cola having been denied, it filed a Petition for
Certiorari with the CA alleging grave abuse of discretion on the part of the NLRC in finding that petitioners were regular employees. In the
meantime, Basan et. al filed before the Labor Arbiter a Motion for Issuance of a Writ of Execution which was issued by the Labor Arbiter and
was thereafter affirmed by the NLRC.

Coca-Cola filed another Petition for Certiorari claiming that the NLRC committed grave abuse of discretion in directing the execution of a
judgment, the propriety and validity of which was still under determination of the appellate court.

The CA consolidated the two (2) petitions for certiorari and reversed the rulings of the NLRC and the Labor Arbiter. The CA denied
petitioners’ motion for reconsideration. Hence, the instant petition.

Coca-Cola contends that the petition should be denied due course for its verification and certification of non-forum shopping was signed by
only one of the petitioners.

ISSUE

Whether or not the petition should be denied due course for its verification and certification of non-forum shopping was signed by only one of
the petitioners.

HELD

NO. [The Court] hold that while the general rule is that the verification and certification of non-forum shopping must be signed by all the
petitioners in a case, the signature of only one of them, petitioner Basan in this case, appearing thereon may be deemed substantial
compliance with the procedural requirement. Jurisprudence is replete with rulings that the rule on 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. Similarly, this Court has consistently held that
when under reasonable or justifiable circumstances, as when all the petitioners share a common interest and invoke a common cause of
action or defense, as in this case, the signature of only one of them in the certification against forum shopping substantially complies with the
certification requirement. Thus, the fact that the petition was signed only by petitioner Basan does not necessarily result in its outright
dismissal for it is more in accord with substantial justice to overlook petitioners’ procedural lapses. Indeed, the application of technical rules
of procedure may be relaxed in labor cases to serve the demand of justice.
Forum Shopping; Exception to the General Rule that Certification of Non-Forum Shopping must be signed by the petitioner

ANICETO UY
vs. COURT OF APPEALS, et. Al.
[G.R. No. 173186; September 16, 2015]

JARDELEZA, J.:

FACTS

Respondent Naval-Sai is the owner of Lots No. 54-B-8 and No. 54-B-9. Naval-Sai sold Lot No. 54-B-7 to a certain Bobby Adil. Adil sold his
unfinished building on the property to spouses Francisco and Louella Omandac.

Naval-Sai loaned money from a certain Grace Ng. As security, Naval-Sai delivered to Ng TCTs covering the two lots. Ng, on the other hand,
loaned money from Aniceto Uy. As guarantee, she delivered to Uy the two titles.

Subsequently, Uy filed a case for recovery of possession against Francisco Omandac. The RTC ruled in favor of him.

Naval-Sai sought the annulment of the deed of sale allegedly executed by her and Uy ny filing Complaint for Annulment of Deed with
Damages before the RTC. Naval-Sai filed an Amended Complaint asserting that the subject TCTs were already cancelled by virtue of the
assailed deed of sale. Hence, the Amended Complaint added as a relief the declaration of TCTs No. T-62446 and No.T-62447, which were
registered in the name of Uy, as null and void abinitio.Unlike the original complaint, however, the Amended Complaint was not signed by
Naval-Sai, but by her counsel.

In his Anwer with Counterclaim, Uy asserted that jurisdiction has never been acquired over the parties and the subject matter because the
certification against forum shopping in the Amended Complaint was defective, for having been merely signed by Naval-Sai's counsel.

The RTC dismissed the complaint on the grounds of prescription and a defective certification against forum shopping.

On appeal, the CA reversed the RTC ruling finding that there was substantial compliance with the requirement of verification and certification
of non-forum shopping. It noted that the original complaint has a proper verification and certification of non-forum shopping signed by Naval-
Sai herself.

Petitioner filed a MR, which was denied by the CA. Hence, this petition.

ISSUE

Whether or not the Court of Appeals erred when it ruled that Naval-Sai substantially complied with the requirements on certificate for non-
forum shopping.

HELD

YES. A certification against forum shopping is a peculiar and personal responsibility of the party, an assurance given to the court or other
tribunal that there are no other pending cases involving basically the same parties, issues and causes of action. It must be executed by the
party-pleader, not by his counsel. If, however, for reasonable or justifiable reasons, the party-pleader is unable to sign, he must execute a
Special Power of Attorney (SPA) designating his counsel of record to sign on his behalf.

Here, the original complaint contained a proper verification and certification against forum shopping duly signed by Naval-Sai as plaintiff. The
verification and certification in the amended complaint, on the other hand, was only signed by her counsel, Atty. Norberto L. Ela. Atty. Ela
was not authorized to sign on behalf of Naval-Sai, as in fact, she assigned one Rodolfo Florentino as agent. The Court of Appeals pointed
out that in the certification in the amended complaint, Atty. Ela specified that it should be taken and read together with the original complaint.
The Court of Appeals took this as a cautionary move on the part of Naval-Sai, justifying the relaxation of the rules on the ground of
substantial compliance. [The Court] find, however, that this cautionary move is ineffectual because under the Rules of Civil Procedure, an
amended complaint supersedes the original complaint. For all intents and purposes, therefore, the original complaint and its verification and
certification ceased to exist. This, notwithstanding, we find there was still substantial compliance with the Rules.

[The Court] have ruled that the general rule is that non-compliance or a defect in the certification is not curable by its subsequent submission
or correction. However, there are cases where [the Court] exercised leniency and relaxed the rules on the ground of substantial compliance,
the presence of special circumstances or compelling reasons. The rules on forum-shopping are designed to promote and facilitate the orderly
administration of justice and "should not be interpreted with such absolute literalness as to subvert its own ultimate and legitimate objective
or the goal of all rules of procedure— which is to achieve substantial justice as expeditiously as possible."
 EDUARDO BANDILLION, v.
LA FILIPINA UYGONGCO CORPORATION (LFUC)
[G.R. No. 202446, September 16, 2015]

PERALTA, J.:

FACTS

Eduardo Bandillion, et al. are truck drivers and employees of La Filipina Uygongco Corporation (LFUC). They filed a complaint for violation of
labor standard laws against LFUC before the DOLE Region VI. The case reached the Supreme Court which ruled in favor of Bandillon, et. Al.

Bandillion, et al filed a Motion for Execution before the DOLE Region VI. It was discovered that Regional Director on August 28, 2006, had
already issued an Order directing LFUC to pay Bandillion, et al their wages, holiday pay, rest day and overtime pay.

DOLE Region VI issued a Writ of Execution on July 15, 2008. After being served with the writ, LFUC filed a Petition for Certiorari and
Injunction with the CA, seeking to set aside the writ of execution.

LFUC was not yet served with August 28, 2006 Order when it filed the petition for certiorari. Upon receiving a copy of August 28, 2006 Order,
LFUC filed with DOLE Region VI a MR (treated as an Appeal) of the Order. It called the said order a "Compliance Order" that was allegedly
issued in grave abuse of discretion for it deprived LFUC of its right to due process to adduce evidence to refute the workers' allegations.

Meanwhile, the Petition for Certiorari before the CA was duly opposed by Bandillon, et. Al. as well as by the DOLE-VI Regional Director, who
alleged that the petition had been rendered moot and academic by LFUC's filing of a motion for reconsideration of the Order dated August
28, 2006.

Acting DOLE Secretary, denied the appeal of LFUC. LFUC filed a MR, but the same was denied.

The Court of Appeals promulgated its Decision remanding the case to the DOLE Regional Director, Region VI for the reception of evidence
for all the parties, and the re-computation of monetary awards.

The employees filed a MR of the appellate court's decision but, was denied. Hence, this petition for review on certiorari by Bandillon, et. Al.
employees.

In its Comment, respondent LFUC reported that a number of the employees did not sign the Special Power of Attorney for them to be
represented in this petition by their union president, Ronaldo C. Payda.

ISSUE

Whether or not the petition by Bandillon, et. Al. was defective as not all the petitioners signed the Certification of Non-Forum Shopping.

Whether or not the case decided by the Court of Appeals in CA-G.R. SP No. 03690 has been rendered moot by herein respondent LFUC's
filing of a motion for reconsideration (treated as an appeal) of the Order dated August 28, 2006 of the DOLE-VI Regional Director.

HELD

NO. According to prevailing jurisprudence, neither the fact that Payda alone signed the petition's verification and certification against forum
shopping, nor the fact that the SPA authorizing the filing of the petition was not signed by all petitioners, invalidate nor render the petition
defective, as the present case is one of those instances when the rules are interpreted more liberally in order to attain substantial justice. We
hold that Payda's lone signature and the SPA signed by most of the petitioners already substantially comply with the requirements for a
properly and validly filed petition.

Xxx The SPA was signed by the great majority of the persons named as petitioners in the case. [The Court] hold the same to have duly
complied with the jurisprudential guidelines on the rules on verification and certification against forum shopping as outlined above.

While Payda alone signed, per the SPA, the petition is neither invalid nor defective as LFUC alleges because, as for the verification
requirement, Payda signed as one who has "ample knowledge to swear to the truth of the petition's allegations," being himself a petitioner
and the employees' union president who personally knows the story and facts of the case; and as for the certification against forum shopping,
Payda, as a co-employee of his co-petitioners, "shares a common interest and invokes a common cause of action or defense" as the rest
and, as their attorney-in-fact tasked to initiate the action, he himself has the knowledge of whether or not he has initiated similar actions or
proceedings in different courts or agencies. Both already satisfy the guidelines' requirements on when a lone signature of a petitioner
substantially complies with the requirements for a valid verification and certification against forum shopping.

YES. There is no question that as a result of LFUC's pursuit of the two simultaneous remedies, the rulings of the Court of Appeals on the
petition for certiorari and the DOLE Secretary on LFUC's motion for reconsideration are now essentially conflicting, as the former bars any
execution and instead directs a further hearing of certain evidence, while the latter states that such evidence had the chance to be heard and
execution should now proceed as a matter of course. Such conflict is exactly the scenario that the rules against forum shopping try to avert.

xxx the elements of litis pendentia, are present in the case at bar sipce, in both the petition with the Court of Appeals as well as in the motion
filed with the DOLE-VI Regional Director, the parties are inarguably the same, the causes of action and the reliefs prayed for are essentially
the same, tile factual scenarios under which the reliefs are prayed for are the same and the identity of these is such that a decision in one
case would amount to res judicata in the other action, the elements of res judicata being: (1) the judgment sought to bar the new action must
be final; (2) the decision must have been rendered by a court having jurisdiction over the subject matter and the parties; (3) the disposition of
the case must be a judgment on the merits; and (4) there must be as between the first and second action, identity of parties, subject matter,
and causes of action. Truly, in the case at bar, the disposition of the Court of Appeals in the petition for certiorari would bar any pending
resolution of the subject motion by the DOLE-VI Regional Director, or vice-versa, as they both delve with the same parties, the same cause
of action, and essentially the same relief; so that the two remedies can not co-exist and only the appropriate one should remain.

LFUC's acts of forum shopping are willfull and deliberate and the penalty therefor is that both its petition with the Court of Appeals and
motion for reconsideration before the DOLE-VI Regional Director should face dismissal or denial.80 But even if there were no such
"willfulness and deliberateness" on LFUC's part, the penalty for forum shopping is still dismissal of one of the actions but not necessarily of
the newer one. In the case at bar, although the motion for reconsideration with the Regional Director came later than the petition for certiorari
filed with the Court of Appeals, We have previously held that in such a situation, it is the earlier action - the petition for certiorari — that must
be dismissed. [The Court] have ruled that the petition for certiorari is, in fact, an act of forum shopping that must yield to the motion for
reconsideration (treated by DOLE-VI Regional Director as an appeal) which is the appropriate and adequate remedy.
Parts of a Pleading; Failure to state MCLE Compliance number

PEOPLE OF THE PHILIPPINES

vs. JESUS A. ARROJADO
[G.R. No. 207041, November 09, 2015]

PERALTA, J.:

FACTS

Jesus Arrojado was charged with the crime of murder by the Office of the City Prosecutor of Roxas City, Capiz before the RTC.

Arrojado filed a Motion to Dismiss the Information on the ground that the investigating prosecutor who filed the said Information failed to
indicate therein the number and date of issue of her Mandatory Continuing Legal Education (MCLE) Certificate of Compliance, as required
by Bar Matter No. 1922 (B.M. No. 1922).

Petiitoner filed its Comment/Opposition contending, among others, that the lack of proof of MCLE compliance by the prosecutor who
prepared and signed the Information should not prejudice the interest of the State in filing charges against persons who have violated the
law; and that administrative edict cannot prevail over substantive or precedural law, by imposing additional requirements for the sufficiency of
a criminal information.

The RTC dismissed the case without prejudice.

Petitioner then filed a Petition for Certiorari and/or mandamus with the CA which was denied by the appellate court. Petitioner’s subsequent
Motion for Reconsideration was likewise denied by the CA. Hence, the present petition for review on certiorari. Petitioner contends that the
failure of the investigating prosecutor to indicate in the Information the number and date of issue of her MCLE Certificate of Compliance is a
mere formal defect and is not a valid ground to dismiss the subject Information which is otherwise complete in form and substance.

ISSUE

Whether or not Court of Appeals erred when it ruled that the failure of the investigating prosecutor to indicate her mcle compliance number
and date of issuance thereof in the information against respondent Jesus A. Arrojado warranted the dismissal of the same.

HELD

NO. As to petitioner's contention that the failure of the investigating prosecutor to indicate in the subject Information the number and date of
issue of her MCLE Certificate of Compliance is a mere formal defect and is not a valid ground to dismiss such Information, suffice it to state
that B.M. No. 1922 categorically provides that "[f]ailure to disclose the required information would cause the dismissal of the case and the
expunction of the pleadings from the records.” xxx Since the trial court's dismissal of the subject Information was based on a clear and
categorical provision of a rule issued by this Court, the court a quo could not have committed a capricious or whimsical exercise of judgment
nor did it exercise its discretion in an arbitrary or despotic manner. Thus, the CA did not commit error in dismissing petitioner's petition for
certiorari.

The Court is neither persuaded by petitioner's invocation of the principle on liberal construction of procedural rules by arguing that such
liberal construction "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 connotes at least a reasonable attempt at compliance with the Rules." The
prosecution has never shown any reasonable attempt at compliance with the rule enunciated under B.M. No. 1922. Even when the motion
for reconsideration of the RTC Order dismissing the subject Information was filed, the required number and date of issue of the investigating
prosecutor's MCLE Certificate of Compliance was still not included nor indicated. Thus, in the instant case, absent valid and compelling
reasons, the requested leniency and liberality in the observance of procedural rules appear to be an afterthought, hence, cannot be granted.

In any event, to avoid inordinate delays in the disposition of cases brought about by a counsel's failure to indicate in his or her pleadings the
number and date of issue of his or her MCLE Certificate of Compliance, this Court issued an En Bane Resolution, dated January 14, 2014
which amended B.M. No. 1922 by repealing the phrase "Failure to disclose the required information would cause the dismissal of the case
and the expunction of the pleadings from the records" and replacing it with "Failure to disclose the required information would subject the
counsel to appropriate penalty and disciplinary action." Thus, under the amendatory Resolution, the failure of a lawyer to indicate in his or her
pleadings the number and date of issue of his or her MCLE Certificate of Compliance will no longer result in the dismissal of the case and
expunction of the pleadings from the records. Nonetheless, such failure will subject the lawyer to the prescribed fine and/or disciplinary
action.

In light of the above amendment, while the same was not yet in effect at the time that the subject Information was filed, the more prudent and
practical thing that the trial court should have done in the first place, so as to avoid delay in the disposition of the case, was not to dismiss the
Information but to simply require the investigating prosecutor to indicate therein the number and date of issue of her MCLE Certificate of
Compliance.
 FERNANDO MEDICAL ENTERPRISES, INC.
vs. WESLEYAN UNIVERSITY PHILIPPINES, INC.
[G.R. No. 207970; January 20, 2016]

BERSAMIN, J.:

FACTS

Fernando entered into contract with Wesleyan whereby it undertook to delivered to and installed medical equipment and supplies at
Wesleyan’s hospital. Wesleyan had an unpaid balance of P54,654,195.54. However, on February 11, 2009, Fernando and Wesleyan,
respectively represented by Rafael P. Fernando and Guillermo T. Maglaya, Sr., entered into an agreement whereby the former agreed to
reduce its claim to only P50,400,000.00.

Subsequently, Wesleyan notified Fernando that its new administration is rescinding its contract for being defective; and that it was declining
to recognize the February 11, 2009 agreement because of the lack of approval by its Board of Trustees and for having been signed by
Maglaya whose term of office had expired.

Fernando filed a Complaint for sum of money in the RTC. Wesleyan’s MR was denied.

Wesleyan thereafter filed its answer wherein it denied, among others, “The allegations in Paragraphs Nos. 6, 7 and 8 of the complaint are for
lack of knowledge or information sufficient to form a belief as to the truth or falsity thereof, inasmuch as the alleged transactions were
undertaken during the term of office of the past officers of defendant Wesleyan University-Philippines.

Fernando filed its Motion for Judgment Based on the Pleadings, alleging that Wesleyan’s Answer admitted the material allegations of its
complaint and thus did not tender any issue as to such allegation. Wesleyan opposed the Motion alleging that it had specifically denied the
matrial allegations in the complaint. The RTC denied the Motion. On appeal, the the CA ruled that Wesleyan failed to tender an issue.
However, it ruled that a judgment on the pleadings would be improper because the outstanding balance due to the petitioner remained to be
an issue in the face of the allegations of the respondent in its complaint for rescission in the RTC in Cabanatuan City.

ISSUE

Whether or not Wesleyan sufficiently denied the material allegation in the complaint of Fernando.

HELD

NO. The answer admits the material allegations of ultimate facts of the adverse party’s pleadings not only when it expressly confesses the
truth of such allegations but also when it omits to deal with them at all. The controversion of the ultimate facts must only be by specific denial.
Section 10, Rule 8 of the Rules of Court recognizes only three modes by which the denial in the answer raises an issue of fact. The first is by
the defending party specifying each material allegation of fact the truth of which he does not admit and, whenever practicable, setting forth
the substance of the matters upon which he relies to support his denial. The second applies to the defending party who desires to deny only
a part of an averment, and the denial is done by the defending party specifying so much of the material allegation of ultimate facts as is true
and material and denying only the remainder. The third is done by the defending party who is without knowledge or information sufficient to
form a belief as to the truth of a material averment made in the complaint by stating so in the answer. Any material averment in the complaint
not so specifically denied are deemed admitted except an averment of the amount of unliquidated damages.

In Civil Case No. 09-122116, the respondent expressly admitted paragraphs no. 2, 3, 4, 5, 9 and 10 of the complaint. The admission related
to the petitioner’s allegations on: (a) the four transactions for the delivery and installation of various hospital equipment; (b) the total liability of
the respondent; (c) the payments made by the respondents; (d) the balance still due to the petitioner; and (e) the execution of the February
11, 2009 agreement. The admission of the various agreements, especially the February 11, 2009 agreement, significantly admitted the
petitioner’s complaint. To recall, the petitioner’s cause of action was based on the February 11, 2009 agreement, which was the actionable
document in the case. The complaint properly alleged the substance of the February 11, 2009 agreement, and contained a copy thereof as
an annex. Upon the express admission of the genuineness and due execution of the February 11, 2009 agreement, judgment on the
pleadings became proper.

The respondent denied paragraphs no. 6, 7 and 8 of the complaint "for lack of knowledge or information sufficient to form a belief as to the
truth or falsity thereof, inasmuch as the alleged transactions were undertaken during the term of office of the past officers of defendant
Wesleyan University-Philippines." Was the manner of denial effective as a specific denial?

[The Court] answer the query in the negative. Xxx Considering that paragraphs no. 6, 7 and 8 of the complaint averred matters that the
respondent ought to know or could have easily known, the answer did not specifically deny such material averments. It is settled that denials
based on lack of knowledge or information of matters clearly known to the pleader, or ought to be known to it, or could have easily been
known by it are insufficient, and constitute ineffective or sham denials.
Specific Denial; Actionable Document

GO TONG ELECTRICAL SUPPLY CO., INC. and GEORGE C. GO

vs. BPI FAMILY SAVINGS BANK, INC., substituted by PHILIPPINE INVESTMENT ONE [SPV-AMC], INC.,
[G.R. No. 187487; June 29, 2015]

PERLAS-BERNABE, J.:

FACTS

Go Tong Electrical had applied for and was granted financial assistance by DBS Bank of the Philippines (formerly BSA). Go Tong Electrical,
represented by Go, among others, obtained a loan from DBS for which Go Tong Electrical executed Promissory Note in favor of DBS. As
additional security, Go executed a Comprehensive Surety Agreement (CSA) covering any and all obligations undertaken by Go Tong
Electrical, including the aforesaid loan. Upon default of petitioners, DBS filed a complaint against petitioners.

In their Answer with Counterclaim, petitioners merely stated that they "specifically deny" the allegations under the complaint. Of particular
note is their denial of the execution of the loan agreement, the PN, and the CSA "for being self-serving and pure conclusions intended to suit
[respondent's] purposes.

The RTC ruled in favor of DBS, ordering petitioners to jointly and severally pay DBS. On appeal by petitioners, the CA affirmed RTC’s
decision. Susequent MR by petitioners was denied. Hence, this petition.

ISSUE

Whether or not the CA erred in upholding the RTC's ruling.

HELD

NO. The petition lacks merit. The Court concurs with the CA Decision holding that the genuineness and due execution of the loan documents
in this case were deemed admitted by petitioners under the parameters of Section 8, Rule 8 of the Rules which provides:

SEC. 8. How to contest such documents. - When an action or defense is founded upon a written instrument, copied in or attached to the
corresponding pleading as provided in the preceding Section, the genuineness and due execution of the instrument shall be deemed
admitted unless the adverse party, under oath, specifically denies them, and sets forth what he claims to be the facts; but the requirement of
an oath does not apply when the adverse party does not appear to be a party to the instrument or when compliance with an order for an
inspection of the original instrument is refused.

A reading of the Answer shows that petitioners failed to specifically deny the execution of the Credit Agreement, PN, and CSA under the
auspices of the above-quoted rule. The mere statement in paragraph 4 of their Answer, i.e., that they "specifically deny" the pertinent
allegations of the Complaint "for being self-serving and pure conclusions intended to suit plaintiffs purposes," does not constitute an effective
specific denial as contemplated by law. Verily, a denial is not specific simply because it is so qualified by the defendant. Stated otherwise, a
general denial does not become specific by the use of the word "specifically." Neither does it become so by the simple expedient of coupling
the same with a broad conclusion of law that the allegations contested are "self-serving" or are intended "to suit plaintiffs purposes."

The Court clarifies that while the "[ f]ailure to deny the genuineness and due execution of an actionable document does not preclude a party
from arguing against it by evidence of fraud, mistake, compromise, payment, statute of limitations, estoppel and want of consideration [nor]
bar a party from raising the defense in his answer or reply and prove at the trial that there is a mistake or imperfection in the writing, or that it
does not express the true agreement of the parties, or that the agreement is invalid or that there is an intrinsic ambiguity in the writing," none
of these defenses were adequately argued or proven during the proceedings of this case.
Actionable Document; Due Execution

BENGUET EXPLORATION, INC., petitioner,

vs. COURT OF APPEALS, SWITZERLAND GENERAL INSURANCE, CO., LTD., and SEA WOOD SHIPPING, INC., respondents.
[G.R. No. 117434; February 9, 2001]

MENDOZA, J.:

FACTS

Sea Wood Shipping chartered Benguet Exploration to transport copper concentrates from La Union to Japan. The cargo was insured by
Switzerland Insurance. When the cargo was unloaded in Japan, it was 355 metric tons short of the amount stated in the bill of lading.
Benguet then sought payment from Switzerland Insurance and Sea Wood but they refused the demand. Hence, Benguet filed a complaint for
damages against Searwood and Switzerland insurance before the RTC.

The RTC dismissed the case. On appeal by Benguet, the CA affirmed the dismissal. Hence, this petition.

Benguet contends that the Court of Appeals gravely erred in ruling that it failed to establish the loss or shortage of the subject cargo because
such loss was sufficiently established by documentary and testimonial evidence, as well as the admissions of private respondents. It argues
that documents regarding the tonnage of the copper concentrates have been properly identified and that the bill of lading, the Certificate of
Weight, and the Mate's Receipt, all of which stated that 2,243.496 wet metric tons of copper concentrates were loaded on the ship, create a
prima facie presumption that such amount was indeed what was loaded on the vessel. Benguet asserts that the Draft Survey Report of OMIC
was sufficient evidence to prove that the cargo which arrived in Japan had a shortage of 355 metric tons. Benguet contends that the
genuineness and due execution of the documents presented, i.e., Bill of Lading, Certificate of Loading, Certificate of Weight, Mate's Receipt,
were properly established by the testimony of its witness, Ernesto Cayabyab, and that as a result, there is a prima facie presumption that
their contents are true.

ISSUE

Whether or not the genuineness and due execution of the documents presented, i.e., Bill of Lading, Certificate of Loading, Certificate of
Weight, Mate's Receipt, were properly established by the testimony of Benguet’s witness, Ernesto Cayabyab.

HELD

NO. The admission of the due execution and genuineness of a document simply means that "the party whose signature it bears admits that
he signed it or that it was signed by another for him with his authority; that at the time it was signed it was in words and figures exactly as set
out in the pleading of the party relying upon it; that the document was delivered; and that any formal requisites required by law, such as a
seal, an acknowledgment, or revenue stamp, which it lacks, are waived by him." In another case, we held that "When the law makes use of
the phrase 'genuineness and due execution of the instrument' it means nothing more than that the instrument is not spurious, counterfeit, or
of different import on its face from the one executed."

In this case, respondents presented evidence which casts doubt on the veracity of these documents. Respondent Switzerland Insurance
presented Export Declaration No. 1131/85 (Exh. 11) which petitioner's own witness, Rogelio Lumibao, prepared, in which it was stated that
the copper concentrates to be transported to Japan had a gross weight of only 2,050 wet metric tons or 1,845 dry metric tons, 10 percent
more or less. On the other hand, Certified Adjusters, Inc., to which Switzerland Insurance had referred petitioner's claim, prepared a report
which showed that a total of 2,451.630 wet metric tons of copper concentrates were delivered at Poro Point.

Considering the discrepancies in the various documents showing the actual amount of copper concentrates transported to Poro Point and
loaded in the vessel, there is no evidence of the exact amount of copper concentrates shipped. Thus, whatever presumption of regularity in
the transactions might have risen from the genuineness and due execution of the Bill of Lading, Certificate of Weight, Certificate of Loading,
and Mate's Receipt was successfully rebutted by the evidence presented by respondent Switzerland Insurance which showed disparities in
the actual weight of the cargo transported to Poro Point and loaded on the vessel. This fact is compounded by the admissions made by
Lumibao and Cayabyab that they had no personal knowledge of the actual amount of copper concentrates loaded on the vessel.
Third-Party Complaint; Judgment on the Pleadings

ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION

vs. COURT OF APPEALS and MONARK EQUIPMENT CORPORATION
[G.R. No. 160242; May 17, 2005]

CALLEJO, SR., J.:

FACTS

ACDC leased some equipments and machineries from Monark. ACDC used the leased equipments for its power plant in Mauban, Quezon.
However, ACDC failed, despite demands, to pay the rentals therefor.

Monark filed a Complaint for a sum of money with damages against the ACDC with the RTC of Quezon City.

ACDC filed a motion to file and admit answer with third-party complaint against Becthel. In its answer, ACDC admitted its indebtedness to
MEC in the amount of P5,071,335.86 but alleged the as special and affirmative defenses, among others, that Becthel fails and refuses to pay
its overdue obligation in connection with the leased equipment used by ACDC to comply with its contracted services to Becthel resulting to
the failure of ACDC to pay MEC.

MEC opposed the motion of ACDC to file a third-party complaint against Becthel on the ground that the defendant had already admitted its
principal obligation to MEC in the amount of P5,071,335.86; the transaction between it and ACDC, on the one hand, and between ACDC and
Becthel, on the other, were independent transactions.

The trial court denied the motion of ACDC for leave to file a third-party complaint and granted the motion of MEC which was considered by
the court as Motion for Judgment on the Pleadings. On appeal by ACDC, the CA affirmed the RTC. Hence, this petition.

ISSUE

Whether or not the third-party complaint by ACDC should be allowed.

HELD

NO. The bringing of a third-party defendant is proper if he would be liable to the plaintiff or to the defendant or both for all or part of the
plaintiff’s claim against the original defendant, although the third-party defendant’s liability arises out of another transaction. The defendant
may implead another as third-party defendant (a) on an allegation of liability of the latter to the defendant for contribution, indemnity,
subrogation or any other relief; (b) on the ground of direct liability of the third-party defendant to the plaintiff; or (c) the liability of the third-
party defendant to both the plaintiff and the defendant. There must be a causal connection between the claim of the plaintiff in his complaint
and a claim for contribution, indemnity or other relief of the defendant against the third-party defendant.

In Capayas v. Court of First Instance, the Court made out the following tests: (1) whether it arises out of the same transaction on which the
plaintiff’s claim is based; or whether the third-party claim, although arising out of another or different contract or transaction, is connected with
the plaintiff’s claim; (2) whether the third-party defendant would be liable to the plaintiff or to the defendant for all or part of the plaintiff’s claim
against the original defendant, although the third-party defendant’s liability arises out of another transaction; and (3) whether the third-party
defendant may assert any defenses which the third-party plaintiff has or may have to the plaintiff’s claim.

In this case, the claims of the respondent, as plaintiff in the RTC, against the petitioner as defendant therein, arose out of the contracts of
lease and sale; such transactions are different and separate from those between Becthel and the petitioner as third-party plaintiff for the
construction of the latter’s project in Mauban, Quezon, where the equipment leased from the respondent was used by the petitioner. The
controversy between the respondent and the petitioner, on one hand, and that between the petitioner and Becthel, on the other, are thus
entirely distinct from each other. There is no showing in the proposed third-party complaint that the respondent knew or approved the use of
the leased equipment by the petitioner for the said project in Quezon. Becthel cannot invoke any defense the petitioner had or may have
against the claims of the respondent in its complaint, because the petitioner admitted its liabilities to the respondent for the amount
of P5,075,335.86. The barefaced fact that the petitioner used the equipment it leased from the respondent in connection with its project with
Becthel does not provide a substantive basis for the filing of a third-party complaint against the latter. There is no causal connection between
the claim of the respondent for the rental and the balance of the purchase price of the equipment and parts sold and leased to the petitioner,
and the failure of Becthel to pay the balance of its account to the petitioner after the completion of the project in Quezon.

Considering that the petitioner admitted its liability for the principal claim of the respondent in its Answer with Third-Party Complaint, the trial
court did not err in rendering judgment on the pleadings against it.
Failure to appear in Pre-Trial Conference

SPOUSES ROLANDO and HERMINIA SALVADOR

vs. SPOUSES ROGELIO AND ELIZABETH RABAJA and ROSARIO GONZALES
[G.R. No. 199990; February 4, 2015]

MENDOZA, J.:

FACTS

Spouses Salvador entered into a Contract to Sell with Spouses Rabaja involving a parcel of land owned by Salvadors. Spouses Rabaja
made an initial payment to Gonzales in the presence of Herminia. Subsequent payments were made to Gonzales pursuant to a SPA.
However, Spouses Salvador complained to Spouses Rabaja that they did not receive any payment from Gonzales. Spouses Rabaja then
suspend further payment of the purchase price; and as a consequence, they received a notice to vacate the subject property from Spouses
Salvador for non-payment of rentals.

Spouses Salvador instituted an action for ejectment against Spouses Rabaja. In turn, Spouses Rabaja filed an action for rescission of
contract against Spouses Salvador and Gonzales.

In the Ejectment Case, the MeTC ruled in favour of Spouses Salvador which was reversed by the RTC on appeal by Spouses Rabaja. On
appeal by Spouses Salvador, the CA reinstated the MeTC decision which became final and executory for failure of Spouses Rabaja to
appeal.

In the Recission Case, Spouses Salvador filed their answer contending that there was no meeting of the minds between the parties and that
the SPA in favor of Gonzales was falsified. They further averred that they did not receive any payment from Spouses Rabaja through
Gonzales. During the pre-trial conference, Spouses Salvador and their counsel failed to attend on the rescheduled date. Consequently, the
RTC declared Spouses Salvador in default and allowed Spouses Rabaja to present their evidence ex parte.

The RTC ruled in favour of Spouses Rabaja. It held that the signature of Spouses Salvador affixed in the contract to sell appeared to be
authentic. On appeal to the CA, the appellate court affirmed the decision of the RTC.

ISSUE

Whether or not the RTC correctly declared Spouses Salvador in default for failre to appear in the pre-trial conference.

HELD

NO. xxx the Court reiterates the rule that the failure to attend the pre-trial conference does not result in the default of an absent party. Under
the 1997 Rules of Civil Procedure, a defendant is only declared in default if he fails to file his Answer within the reglementary period. On the
other hand, if a defendant fails to attend the pre-trial conference, the plaintiff can present his evidence ex parte.

xxx the failure of a party to appear at the pre-trial has indeed adverse consequences. If the absent party is the plaintiff, then his case shall be
dismissed. If it is the defendant who fails to appear, then the plaintiff is allowed to present his evidence ex parte and the court shall render
judgment based on the evidence presented. Thus, the plaintiff is given the privilege to present his evidence without objection from the
defendant, the likelihood being that the court will decide in favor of the plaintiff, the defendant having forfeited the opportunity to rebut or
present its own evidence. The stringent application of the rules on pre-trial is necessitated from the significant role of the pre-trial stage in the
litigation process. Pretrial is an answer to the clarion call for the speedy disposition of cases.

There is no dispute that Spouses Salvador and their counsel failed to attend the pre-trial conference set on February 4, 2005 despite proper
notice. Spouses Salvador aver that their non-attendance was due to the fault of their counsel as he forgot to update his calendar. This
excuse smacks of carelessness, and indifference to the pre-trial stage. It simply cannot be considered as a justifiable excuse by the Court.
As a result of their inattentiveness, Spouses Salvador could no longer present any evidence in their favor. Spouses Rabaja, as plaintiffs,
were properly allowed by the RTC to present evidence ex parte against Spouses Salvador as defendants. Considering that Gonzales as co-
defendant was able to attend the pre-trial conference, she was allowed to present her evidence. The RTC could only render judgment based
on the evidence presented during the trial.
 BANCO DE ORO-EPCI, INC. (formerly Equitable PCI Bank)
vs. JOHN TANSIPEK
[G.R. No. 181235; July 22, 2009]

CHICO-NAZARIO, J.:

FACTS

JOCI entered into a contract with Duty Free Philippines, Inc. for the construction of a Duty Free Shop. Payments were received by JOCI
directly or through John Tansipek, its authorized collector. Payments received by Tansipek were initially remitted to JOCI. However, payment
through PNB Check No. 0000302572 was not turned over to JOCI. Instead, Tansipek endorsed said check and deposited the same to his
account in PCIB. PCIB allowed the said deposit, despite the fact that the check was crossed for the deposit to payee’s account only, and
despite the alleged lack of authority of respondent Tansipek to endorse said check. PCIB refused to pay JOCI the full amount of the check
despite demands made by the latter.

JOCI then filed a complaint against Banco De Oro-EPCI (Formerly PCIB) in the RTC.

PCIB filed a Motion to Dismiss the Complaint on the grounds that (1) an indispensable party was not impleaded, and (2) therein plaintiff JOCI
had no cause of action against PCIB. The RTC denied PCIB’s Motion to Dismiss. PCIB filed its answer and likewise moved for leave for the
court to admit its third-party complaint against Tansipek.

Tansipek failed to file an answer. Thus, he was declared in default. Tansipek filed a Motion for Reconsideration of the Default Order. Upon
denial thereof, Tansipek filed a Petition for Certiorari with the Court of Appeals, which was dismissed for failure to attach the assailed Orders.
Tansipek’s Motion for Reconsideration with the Court of Appeals was denied for having been filed out of time. Respondent Tansipek did not
appeal said denial to this Court.

ISSUE

Whether or not the default order against Tansipek is correct.

HELD

Respondent Tansipek’s remedy against the Order of Default was erroneous from the very beginning. Respondent Tansipek should have filed
a Motion to Lift Order of Default, and not a Motion for Reconsideration, pursuant to Section 3(b), Rule 9 of the Rules of Court:

(b) Relief from order of default.—A party declared in default may at any time after notice thereof and before judgment file a motion under oath
to set aside the order of default upon proper showing that his failure to answer was due to fraud, accident, mistake or excusable negligence
and that he has a meritorious defense. In such case, the order of default may be set aside on such terms and conditions as the judge may
impose in the interest of justice.

A Motion to Lift Order of Default is different from an ordinary motion in that the Motion should be verified; and must show fraud, accident,
mistake or excusable neglect, and meritorious defenses. The allegations of (1) fraud, accident, mistake or excusable neglect, and (2) of
meritorious defenses must concur.

Assuming for the sake of argument, however, that respondent Tansipek’s Motion for Reconsideration may be treated as a Motion to Lift
Order of Default, his Petition for Certiorari on the denial thereof has already been dismissed with finality by the Court of Appeals. Respondent
Tansipek did not appeal said ruling of the Court of Appeals to this Court. The dismissal of the Petition for Certiorari assailing the denial of
respondent Tansipek’s Motion constitutes a bar to the retrial of the same issue of default under the doctrine of the law of the case.

“It may be stated as a rule of general application that, where the evidence on a second or succeeding appeal is substantially the same as
that on the first or preceding appeal, all matters, questions, points, or issues adjudicated on the prior appeal are the law of the case on all
subsequent appeals and will not be considered or readjudicated therein.”

The issue of the propriety of the Order of Default had already been adjudicated in Tansipek’s Petition for Certiorari with the Court of Appeals.
As such, this issue cannot be readjudicated in Tansipek’s appeal of the Decision of the RTC on the main case. Once a decision attains
finality, it becomes the law of the case, whether or not said decision is erroneous. Having been rendered by a court of competent jurisdiction
acting within its authority, the judgment may no longer be altered even at the risk of legal infirmities and errors it may contain.
Default

FARIDA YAP BITTE, et. Al.

Vs. SPS. FRED and ROSA ELSA SERRANO JONAS
[G.R. No. 212256; December 9, 2015]

MENDOZA, J.:

FACTS

Rosa Elsa executed an SPA, granting her mother, Andrea, the authority to sell the land in dispute. The property was offered to them for sale
by Cipriano, who showed them the SPA in favor of Andrea. Cipriano received from them the respective amounts of ₱200,000.00 and then
₱400,000.00 as advance payments for the property. Rosa subsequently revoked the SPA.

Spouses Bitte and Rosa negotiated but failed to reach a final agreement. Rosa then withdrew from the transaction.

Spouses Bitte filed before the RTC a Complaint for Specific Performance with Damages seeking to Compel Rosa, Andrea and Cipriano to
transfer to their names the tiltle over the subject property.

While the case was pending, Andrea sold the subject property to Spouses Bitte through a deed of absolute sale, dated February 25, 1997.

During the pre-trial conference of the Complaint for Specific Performance, Spouses Bitte failed to appear. Consequently, RTC dismissed
their complaint and set the reception of Rosa’s counterclaim for hearing.

Spouses Jonas, on the other hand, filed before the RTC a complaint for Annulment of TCT and Recovery of Possession, Injuction and
Damages against Spouses Bitte contending that the sale by Andrea of the property was made without authority. The cases were
consolidated. Spouses Bitte were again declared in default by the RTC for their failure to attend the pre-trial.

The RTC ruled in favour of Spouses Jonas. On appeal by Spouses Bitte, CA reversed the ruling. Hence, this appeal.

Spouses Jonas contende that being dedclared in default, Spouses Bitte already lost the legal personality to resort to the present petition.

ISSUE

Whether or not Spouses Bitte lost legal personality to appeal due to the RTC order declaring them in default.

HELD

NO. The rule is that “right to appeal from the judgment by default is not lost and can be done on grounds that the amount of the judgment is
excessive or is different in kind from that prayed for, or that the plaintiff failed to prove the material allegations of his complaint, or that the
decision is contrary to law.”15 If a party who has been declared in default has in his arsenal the remedy of appeal from the judgment of
default on the basis of the decision having been issued against the evidence or the law, that person cannot be denied the remedy and
opportunity to assail the judgment in the appellate court. Despite being burdened by the circumstances of default, the petitioners may still use
all other remedies available to question not only the judgment of default but also the judgment on appeal before this Court. Those remedies
necessarily include an appeal by certiorari under Rule 45 of the Rules of Court.