RULE 6: KINDS OF PLEADING
Ultimate facts mean the important and substantial
146.) Victorina Lazaro vs. Brewmaster International, Inc.
G.R. No. 182779. August 23, 2010
PETITION for review on certiorari of the decision and resolution of the Court of
Appeals.
WHEREFORE, premises considered, the Court of Appeals Decision and Resolution
are hereby AFFIRMED.
FACTS:
Respondent Brewmaster filed a complaint for sum of money in the MTC under
Rules on Summary Procedure, against petitioner Victorina Lazaro and her
spouse. Attached to the complaint were copies of sales invoices which indicated
that said merchandise were sold to “Total (Gas)”. In her answer, Victorina denied
said transactions.
In the preliminary conference, both the petitioner and her spouse did not appear.
Basing its finding on the sales invoices attached, MTC dismissed the complaint as
Brewmaster failed to establish its claim against Victorina. RTC affirmed MTC. The
CA ruled in favor of Brewmaster.
CA found that since Victorina and her spouse failed to appear during the
preliminary conference, judgment should have been rendered as may be
warranted by the facts alleged in the complaint. CA found that MTC’s and RTC’s
reliance on the sales invoices were improper as the same were not actionable
documents.
Petitioner insisted that assuming judgment should be confined to the allegations
in the complaint, no relief must be awarded as the complaint failed to state cause
of action. Hence, this petition.
ISSUE:
Whether the allegations in the complaint was sufficient to state cause of action
RULING:
At the outset, it must be noted that this case falls under Rules on Summary
Procedure. Since defendant (herein petitioner) failed to appear in the
preliminary conference, the court is compelled to render judgment as may be
warranted by the facts alleged in the complaint.
Yes. The basic requirement under the rules of procedure is that a complaint must
make a plain, concise, and direct statement of the ultimate facts on which the
plaintiff relies for his claim.
facts which either directly form the basis of the plaintiff’s primary right and duty
or directly make up the wrongful acts or omissions of the defendant. They refer
to the principal, determinative, constitutive facts upon the existence of which the
cause of action rests. The term does not refer to details of probative matter or
particulars of evidence which establish the material elements.
The test of sufficiency of the facts alleged in a complaint to constitute a cause of
action is whether, admitting the facts alleged, the court could render a valid
judgment upon the same in accordance with the prayer of the petition or
complaint. To determine whether the complaint states a cause of action, all
documents attached thereto may, in fact, be considered, particularly when
referred to in the complaint. We emphasize, however, that the inquiry is into the
sufficiency, not the veracity of the material allegations in the complaint. Thus,
consideration of the annexed documents should only be taken in the context of
ascertaining the sufficiency of the allegations in the complaint.
Contrary to petitioner’s stance, we find that the Complaint sufficiently states a
cause of action. The following allegations in the complaint adequately make up a
cause of action for collection of sum of money against petitioner:
(1) that petitioner and her husband obtained beer and other products worth a
total of P138,502.92 on credit from respondent; and
(2) that they refused to pay the said amount despite demand.
As correctly held by the CA, the sales invoices are not actionable documents. They
were not the bases of respondent’s action for sum of money but were attached to
the Complaint only to provide details on the alleged transactions. They were
evidentiary in nature and not even necessary to be stated or cited in the
Complaint. At any rate, consideration of the attached sales invoices would not
change our conclusion. The sales invoices, naming Total as the purchaser of the
goods, do not absolutely foreclose the probability of petitioner being liable for
the amounts reflected thereon. An invoice is nothing more than a detailed
statement of the nature, quantity, and cost of the thing sold and has been
considered not a bill of sale.
147.) Mongao vs. Pryce Properties Corporation
G.R. No. 156474. August 16, 2005
PETITION for review on certiorari of the decision and resolution of the Court of
Appeals.
WHEREFORE, the instant petition for review is GRANTED.
Page 1 of 48
FACTS:
Petitioner Mongao and respondent Pryce Properties entered into a
memorandum of agreement whereby petitioner agreed to sell to Pryce a parcel
of land with a consideration of 5M. Pryce gave 550k representing earnest money.
The controversy arose when Pryce offered to pay the balance by issuing a check
payable to petitioner Mongao, and another person named Animas. It appears that
Animas is related to Mongao and claimed co-ownership of the land. Pryce refused
to pay the balance solely to Mongao despite repeated demands.
In the action for rescission and damages filed by the petitioner, she also filed a
motion for judgement on the pleadings on the ground that the answer failed to
tender an issue. RTC granted the motion. Pryce elevated the case to the CA, which
reversed the RTC ruling and remanded the case. The CA ruled that there were
actual issues tendered by the respondent’s answer. Hence, the present petition.
ISSUE:
Whether judgment on the pleadings was proper on the ground that the answer
failed to tender an issue.
RULING:
Yes. Judgment on the pleadings is governed by Section 1, Rule 34, essentially it
provides that where an answer “fails to tender an issue, or otherwise admits the
material allegations of the adverse party’s pleading, the court may, on motion of
that party, direct judgment on such pleading.” The answer would fail to tender an
issue, of course, if it does not comply with the requirements for a specific denial;
and it would admit the material allegations of the adverse party’s pleadings not
only where it expressly confesses the truthfulness thereof but also if it omits to
deal with them at all.
Thus, there is joinder of issues when the answer makes a specific denial of the
material allegations in the complaint or asserts affirmative defenses which would
bar recovery by the plaintiff. Where there is proper joinder of issues, the trial
court is barred from rendering judgment based only on the pleadings filed by the
parties and must conduct proceedings for the reception of evidence.
An answer may allege affirmative defenses which may strike down the plaintiff’s
cause of action. An affirmative defense is one which is not a denial of an essential
ingredient in the plaintiff’s cause of action, but one which, if established, will be a
good defense—i.e. an “avoidance” of the claim. Affirmative defenses include
fraud, statute of limitations, release payment, illegality, statute of frauds,
estoppel, former recovery, discharge in bankruptcy, and any other matter by way
of confession and avoidance. When the answer asserts affirmative defenses, there
is proper joinder of issues which must be ventilated in a full-blown trial on the
merits and cannot be resolved by a mere judgment on the pleadings. Allegations
presented in the answer as affirmative defenses are not automatically
characterized as such. Before an allegation qualifies as an affirmative defense, it
must be of such nature as to bar the plaintiff from claiming on his cause of action.
Petitioners’ action for rescission is mainly based on the alleged breach by
respondent of its contractual obligation under the MOA when respondent refused
to effect payment of the purchase price solely to petitioner Mongao. On the other
hand, nothing from the allegations in respondent's answer makes out a proper
joinder of issues. Petitioners’ cause of action for rescission is founded mainly on
a perfected contract of sale allegedly entered into between petitioners and
respondent as embodied in the MOA attached to the complaint. First, the
allegations in respondent's answer do not make out a specific denial that a
contract of sale was perfected between the parties. Second, respondent does not
contest the due execution and/or genuineness of said MOA.
Respondent offered the affirmative defense that the separate demands of
petitioner Mongao and the Animas family compelled it to issue the check payable
to both petitioner Mongao and her Animas. Effectively, the affirmative defense
offered imply an admission by respondent that it effected payment contrary to
the express terms of the contract of sale. Nowhere in the terms of the MOA does
it state that the payment of the purchase price be tendered to any person other
than petitioner Mongao. The averment virtually admits petitioners’ allegation
that respondent corporation committed a breach of its contractual obligation to
petitioners and supports their cause of action for rescission.
In essence, respondent corporation justifies its refusal to tender payment of the
purchase price solely to petitioner Mongao by alleging that the latter was a mere
trustee and not the beneficial owner of the property subject of the sale and
therefore not the proper party to receive payment. Such defense cannot prevent
petitioners from seeking the rescission of the contract of sale. The express terms
of the MOA, the genuineness and due execution of which are not denied, clearly
show that the contract of sale was executed only between petitioner Mongao and
respondent.
148.) Bungcayao, Sr. vs. Fort Ilocandia Property Holdings and Development
Corporation
G.R. No. 170483. April 19, 2010
PETITION for review on certiorari of a decision of the Court of Appeals.
FACTS:
Page 2 of 48
Petitioner was part of a group that called themselves “DSierto”. This group
applied for foreshore lease covering parcels of land along Calayab Beach. The
group was granted provisional permit. Fort Ilocandia Property Holdings also filed
a foreshore lease which included the parcels of land already granted to DSierto.
DENR denied the foreshore application of DSierto as the properties were either
under the title of Ilocandia or were subject of Ilocandia’s foreshore lease
application.
A settlement meeting between DSierto members and Ilocandia was convened
whereby each of the members of DSierto agreed to receive 400k in exchange of
waiver of their claims and vacate the properties. The petitioner Buncayao Sr did
not attend the meeting but instead sent his son in his place. The son of petitioner
was the one who accepted the 400k.
Petitioner now filed an action to declare the settlement void. Respondent filed a
counterclaim for the return of the 400k and for the petitioner to vacate the
property, including damages caused by the delay to Ilocandia’s projects. No
payment of docket fees for the counterclaim was made. In the trial court, the
parties agreed to cancel the quitclaim and the return of 400k. The trial court ruled
in favor of respondent, and found that the property occupied by petitioner was
within the titled property of respondent.
CA affirmed the decision in toto. The CA also held that the counterclaim was
compulsory therefore it did not require payment of docket fees.
Petitioner maintained that the court did not acquire jurisdiction over the
counterclaim due to nonpayment of docket fees. Hence, this petition.
ISSUE
Whether the counterclaim was compulsory so as to be exempted from payment
of docket fees.
RULING
No. A compulsory counterclaim is any claim for money or any relief, which a
defending party may have against an opposing party, which at the time of suit
arises out of, or is necessarily connected with, the same transaction or occurrence
that is the subject matter of the plaintiff’s complaint.13 It is compulsory in the
sense that it is within the jurisdiction of the court, does not require for its
adjudication the presence of third parties over whom the court cannot acquire
jurisdiction, and will be barred in the future if not set up in the answer to the
complaint in the same case. Any other counterclaim is permissive.
The Court has ruled that the compelling test of compulsoriness characterizes a
counterclaim as compulsory if there should exist a logical relationship between
the main claim and the counterclaim.
The criteria to determine whether the counterclaim is compulsory or permissive
are as follows:
(a) Are issues of fact and law raised by the claim and by the counterclaim largely
the same?
(b) Would res judicata bar a subsequent suit on defendant’s claim, absent the
compulsory rule?
(c) Will substantially the same evidence support or refute plaintiff’s claim as well
as defendant’s counterclaim?
(d) Is there any logical relations between the claim and the counterclaim?
The only counterclaim that remained was for the recovery of possession of the
subject property. While this counterclaim was an offshoot of the same basic
controversy between the parties, it is very clear that it will not be barred if not
set up in the answer to the complaint in the same case. Respondent’s second
counterclaim, contrary to the findings of the trial court and the Court of Appeals,
is only a permissive counterclaim. It is not a compulsory counterclaim. It is
capable of proceeding independently of the main case.
The rule in permissive counterclaim is that for the trial court to acquire
jurisdiction, the counterclaimant is bound to pay the prescribed docket fees. Any
decision rendered without jurisdiction is a total nullity and may be struck down
at any time, even on appeal before this Court. In this case, respondent did not
dispute the non-payment of docket fees. Respondent only insisted that its claims
were all compulsory counterclaims. As such, the judgment by the trial court in
relation to the second counterclaim is considered null and void without prejudice
to a separate action which respondent may file against petitioner.
149.) Government Service Insurance System (GSIS) vs. Heirs of Fernando F.
Caballero
G.R. No. 158090. October 4, 2010
PETITION for review on certiorari of the decision and resolution of the Court of
Appeals.
WHEREFORE, the petition is DENIED.
FACTS:
Page 3 of 48
Fernando, the father of the heirs, herein respondent, secured a loan from GSIS
and executed a real estate mortgage subjecting his land as security. Fernando
defaulted in his payment which resulted in the foreclosure of the REM. Fernando
did not redeem the property so GSIS sent a notice of consolidation of title. In view
of continued occupancy of Fernando of the property, GSIS demanded for rental
payments. Fernando on the other hand requested that he be allowed to
repurchase the land thru partial payments. Negotiation as to the repurchase went
on for years but no agreement was concluded.
GSIS then conducted a public bidding for the subject property out of which
Carmelita Mercantile Trading Corp (CMTC) emerged as the highest bidder.
Meanwhile, Fernando passed away. Jocelyn, daughter of Fernando, filed a
complaint for the annulment of the sale for the reasons that Carmelita Ang Hao
had no authority from the board to participate in the bidding, CMTC was not
authorized to acquire real property, and GSIS allowed CMTC to bid despite
knowledge that CMTC has no authority to do so. Petitioner GSIS specifically
denied all the allegations, and filed a counterclaim for the collection of 130k
representing unpaid rentals, and additional 250k for the rentals Fernando
allegedly collected from Carmelita.
RTC ruled in favor of GSIS. The CA affirmed the ruling of RTC, HOWEVER, deleted
the award for counterclaim, there being no payment of docket fees made.
Petitioner GSIS maintained that its counterclaim was compulsory in nature,
hence exempted from payment of docket fees. Hence, this petition.
ISSUE:
Whether the counterclaim was compulsory so as to be exempt from payment of
docket fees.
RULING:
No. The criteria to determine whether the counterclaim is compulsory or
permissive are as follows:
(a) Are issues of fact and law raised by the claim and by the counterclaim largely
the same?
(b) Would res judicata bar a subsequent suit on defendant’s claim, absent the
compulsory rule?
(c) Will substantially the same evidence support or refute plaintiff’s claim as well
as defendant’s counterclaim?
(d) Is there any logical relations between the claim and the counterclaim?
Tested against the above-mentioned criteria, this Court agrees with the CA’s view
that petitioner’s counterclaim for the recovery of the amount representing
rentals collected by Fernando from the CMTC is permissive. The evidence needed
by Fernando to cause the annulment of the bid award, deed of absolute sale and
TCT is different from that required to establish petitioner’s claim for the recovery
of rentals.
The issue in the main action, i.e., the nullity or validity of the bid award, deed of
absolute sale and TCT in favor of CMTC, is entirely different from the issue in the
counterclaim, i.e., whether petitioner is entitled to receive the CMTC’s rent
payments over the subject property when petitioner became the owner of the
subject property by virtue of the consolidation of ownership of the property in
its favor.
The rule in permissive counterclaims is that for the trial court to acquire
jurisdiction, the counterclaimant is bound to pay the prescribed docket fees. This,
petitioner did not do, because it asserted that its claim for the collection of rental
payments was a compulsory counterclaim. Since petitioner failed to pay the
docket fees, the RTC did not acquire jurisdiction over its permissive
counterclaim. The judgment rendered by the RTC, insofar as it ordered Fernando
to pay petitioner the rentals which he collected from CMTC, is considered null
and void. Any decision rendered without jurisdiction is a total nullity and may be
struck down at any time, even on appeal before this Court.
Petitioner further argues that assuming that its counterclaim is permissive, the
trial court has jurisdiction to try and decide the same, considering petitioner’s
exemption from all kinds of fees.
In In Re: Petition for Recognition of the Exemption of the Government Service
Insurance System from Payment of Legal Fees, the Court ruled that the provision
in the Charter of the GSIS, i.e., Section 39 of Republic Act No. 8291, which exempts
it from “all taxes, assessments, fees, charges or duties of all kinds,” cannot operate
to exempt it from the payment of legal fees. This was because, unlike the 1935
and 1973 Constitutions, which empowered Congress to repeal, alter or
supplement the rules of the Supreme Court concerning pleading, practice and
procedure, the 1987 Constitution removed this power from Congress. Hence, the
Supreme Court now has the sole authority to promulgate rules concerning
pleading, practice and procedure in all courts.
150.) Consuelo V. Calo Vs. Ajax International, Incorporated
G.R. No. L-22485, March 13, 1968
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FACTS:
Calo ordered from Ajax International, Inc. a John Shaw wire rope with the length
of 1,200 feet. However, when it was delivered it was found out that it was short
of 300 ft. It then wrote a demand letter to Ajax asking for the completion of
delivery or account adjustment of the alleged undelivered 300 ft rope.
Adolfo Benavides filed a complaint with MTC of Manila against Calo. It alleged
that it acquired the outstanding credit of Calo from Ajax through assignment of
credit.
A judgment by default was entered, and a writ of execution issued, against
plaintiff Calo. The latter resorted to this Court on a petition for certiorari,
prohibition and mandamus. Judgment of default and writ of execution were set
aside and remanded the case for further proceedings.
Calo assisted by her husband, Marcos Calo, filed in the Court of First Instance of
Agusan a complaint against defendant asking (1) that the latter either effect
complete delivery or that she be relieved from paying the balance and (2) that
the latter indemnify her for P12,000 as attorney's fees, damages and expenses of
litigation.
Instead of filing an answer, defendant moved for the dismissal of Civil Case 860
on the ground, inter alia, that the subject thereof was involved and intimately
related to that case initially filed in MTC of Manila. The court a quo sustained the
motion and dismissed the case.
Calo moved for reconsideration and new trial. When this failed, she instituted the
present appeal.
ISSUE:
Whether or not Calo should have filed a counterclaim in the case filed before the
MTC Manila by reason that her claim is a compulsory counterclaim.
RULING:
NO. Calo’s claim is not a compulsory counterclaim hence need not to filed in MTC
Manila.
Notwithstanding that there is no question that it arises out of the same
transaction which is the basis of the complaint and does not require the presence
of third parties over whom the municipal court of Manila could not acquire
jurisdiction. However, Calo’s claim is not a compulsory counterclaim for the
simple reason that the amount thereof exceeds the jurisdiction of the municipal
court. The rule that a compulsory counterclaim not set up is barred, when applied
to the municipal court, presupposes that the amount involved is within the said
court's jurisdiction. Otherwise, as this Court had already noted in Yu Lay v.
Galmes , we would come to the absurd situation where a claim must be filed with
the municipal court which it is prohibited from taking cognizance of, being
beyond its jurisdiction.
Besides, the reason underlying the rule, which is to settle all related controversies
in one sitting only, does not obtain. For, even if the counterclaim in excess of the
amount cognizable by the inferior court is set up, the defendant cannot obtain
positive relief. The Rules allow this only for the defendant to prevent plaintiff
from recovering from him.4 This means that should the court find both plaintiff's
complaint and defendant's counterclaim (for an amount exceeding said court's
jurisdiction) meritorious, it will simply dismiss the complaint on the ground that
defendant has a bigger credit. Since defendant still has to institute a separate
action for the remaining balance of his counterclaim, the previous litigation did
not really settle all related controversies.
151.) INTERNATIONAL CONTAINER TERMINAL SERVICES, INC. Vs. THE HON.
COURT OF APPEALS, HON. EDILBERTO G. SANDOVAL
Rule 65 Was Filed Before SC.
FACTS:
Sharp, Inc., the herein private respondent filed a complaint for prohibition with
prayer for preliminary injunction against the Secretary of Transportation and
Communications, the Philippine Ports Authority (PPA), E. Razon, Inc., and the
International Container Terminal Services Inc., the herein petitioner.
The trial court issued a writ of preliminary injunction upon the posting by Sharp
of a bond by the Integrated Bonding and Insurance Co.
On that same day, the petitioner filed an answer with a compulsory counterclaim
against Sharp for its "unfounded and frivolous action." The petitioner claimed
that as a consequence of the complaint and the writ of preliminary injunction, it
had suffered injuries which "if monetized (would) amount to more than
P100,000,000.00."
The writ of preliminary injunction was nullified by this Court in G.R. No. 82218.
SC held that Sharp was not a proper party to stop the negotiation and awarding
of the contract for the development, management and operation of the Container
Terminal at the Port of Manila. Moreover, the petition was premature because
Page 5 of 48
Sharp had not exhausted the administrative remedies open to it from "the PPA,
the Bidding Committee, and the Office of the President."
the PPA, taking its cue from this decision, filed a motion to dismiss Sharp’s
complaint on the above-stated grounds. This motion was adopted by petitioner
CCTSI in a manifestation.
Judge Edilberto G. Sandoval dismissed the complaint as well as the counterclaim.
ICTSI filed a motion for reconsideration of the order insofar as it dismissed its
counterclaim. Meanwhile, it gave notice to the First Integrated Bonding and
Insurance Co., Inc. that it was claiming damages against Sharp for the revoked
injunction.
The motion for reconsideration was denied. CA affirmed the decision of trial
court.
CCTSI has filed the present petition for review alleging that the order of the trial
court dismissing the counterclaim was issued with grave abuse of discretion.
Specifically, the petitioner contends that the respondent court erred.
ISSUE:
1.Whether or not the dismissal of the complaint will result to the dismissal
of the compulsory counterclaim.
2. Whether a claim for damages can be made in the form of a counterclaim.
RULING:
a. Yes, dismissal of the complaint results dismissal of compulsory
counterclaim unless reserve the right to prosecute it by the defendant.
A counterclaim is compulsory where: (1) it arises out of, or is necessarily
connected with, the transaction or occurrence that is the subject matter of the
opposing party’s claim; (2) it does not require for its adjudication the presence of
third parties of whom the court cannot acquire jurisdiction; and (3) the court has
jurisdiction to entertain the claim.
Tested by these requirements, the petitioner’s counterclaim was clearly
compulsory. The petitioner itself so denominated it. There is no doubt that the
same evidence needed to sustain it would also refute the cause of action alleged
in the private respondent’s complaint; in other words, the counterclaim would
succeed only if the complaint did not. It is obvious from the very nature of the
counterclaim that it could not remain pending for independent adjudication, that
is, without adjudication by the court of the complaint itself on which the
counterclaim was based.
The Court notes that, to begin with, the petitioner itself joined the PPA in moving
for the dismissal of the complaint; or put passively, it did not object to the
dismissal of the private respondent’s complaint. Secondly, the compulsory
counterclaim was so interwined with the complaint that it could not remain
pending for independent adjudication by the court after the dismissal of the
complaint which had provoked the counterclaim in the first place. As a
consequence, the dismissal of the complaint (on the petitioner’s own motion)
operated to also dismiss the counterclaim questioning that complaint.
If it wanted the counterclaim to subsist, it should have objected to the dismissal
of the complaint or at least reserved its right to prosecute it, assuming this would
still be possible. It did neither of these. The petitioner now claims that there is no
law requiring that reservation, but there is no law presuming it either. The
petitioner cannot simply say now that it intended all the time to preserve its
counterclaim when it knew that under Rule 17, Sec. 2 "if a counterclaim has been
pleaded by a defendant prior to the service upon him of a motion to dismiss, the
action shall not be dismissed against the defendant’s objection unless the
counterclaim can remain pending for independent adjudication by the Court."
The counterclaim was not permissive. A counterclaim is permissive if it does not
arise out of nor is it necessarily connected with the subject matter of the opposing
party’s claim. It is not barred even if not set up in the action. 3 The petitioner’s
counterclaim was within the jurisdiction of the trial court. Most importantly, it
had no independent existence, being merely ancillary to the main action. 4 The
petitioner knew all this and did not object to the dismissal of the complaint. On
the contrary, it actually moved to dismiss that main action, and in so doing also
moved, in effect, for the dismissal of its counterclaim.
1. Yes, a claim for damages can be made a subject of a counterclaim in the
main case.
It would seem that the proper practice to be followed in cases where it is desired
to obtain damages by reason of the wrongful issuance of an attachment in favor
of plaintiff that an issue would be tendered on the subject by the defendant in his
answer in the main case. Such a tender would present the question squarely in
that court, and the parties having offered their evidence on the subject, the trial
court could dispose of it along with the principal action. It is not necessary that
the defendant wait until it is determined by a final decision in the main action
that the plaintiff is not entitled to recover in order to present the question of his
right to damages. All questions which are material to the main action or which
are incidental thereto but depending thereon should be presented and litigated
at the same time with the main action, so as to avoid the necessity of subsequent
litigation and consequent loss of time and money.
Page 6 of 48
152.) LUALHATI A. COJUANGCO
Vs. PURIFICACION VILLEGAS
G.R. No. 76838 April 17, 1990
The instant petition for certiorari and prohibition. Rule 65.
FACTS:
Lualhati Aldaba Cojuangco is the widow of Don Juan Cojuangco, the registered
owner of the disputed parcel of residential land situated at San Agustin, Malolos,
Bulacan.
Many years back (about sixty years, according to the municipal trial court) the
parents of private respondent Purificacion Villegas, with the acquiescence of Don
Juan Cojuangco, constructed a residential house and later a structure housing a
bakery on the aforesaid lot. It was understood that they could remain on the land
with his blessings and without paying rentals on condition that they would vacate
the premises when needed by the owner.
After her parent's death, Villegas remained in the property, renovating the same
and spending P300,000.00 in the process. She also leased out a portion of the land
to Siapno Appliances at P600.00 a month without the knowledge and consent of
Don Juan Cojuangco This latter act apparently destroyed her congenial relations
with the landowner because soon thereafter, Don Juan Cojuangco, through his
attorney in fact, demanded that she leave the property. Despite his repeated
written demands for her to surrender possession of the property, Villegas
refused, prompting Cojuangco to institute ejectment proceedings against her
before MTC.
Don Juan Cojuangco died intestate. His wife Lualhati, herein petitioner, together
with nephews and nieces, were sub-constituted as parties-plaintiffs by the order
of the court.
The inferior court dismissed the action for ejectment for lack of jurisdiction. It
cited the unassailable fact that Villegas and her predecessors-in-interest had
been in actual possession of the subject land for no less than sixty years and that
in addition, Villegas asserted an adverse claim of ownership, thus transforming
the suit into an accion publiciana which is properly cognizable by courts of first
instance (now regional trial courts).
CFI reversed the decision of MTC. The trial court then ordered Villegas to vacate
the premises and to surrender possession thereof to herein petitioner Cojuangco.
The case was elevated to the appellate court and to the Supreme Court and in
both instances, herein petitioner Cojuangco's right of possession over the land
was upheld.
Petitioner went to the Regional Trial Court of Malolos, Branch XV, where she filed
a motion for execution of the judgment, which the court granted.
A writ of demolition was issued against Villegas, who did not oppose the ordered
demolition but instead asked the lower court to give her more time.
Before the lapse of the grace period, Villegas filed a separate civil action against
petitioner Cojuangco and the provincial sheriff "for specific performance with
urgent prayer for issuance of a temporary restraining order and preliminary
injunction."
This case, instead of being referred to Branch XV which had earlier issued the
writ of demolition, was raffled to another Malolos branch of the Bulacan Trial
Court, specifically Branch XVII which issued on the same day, a temporary
restraining order enjoining Cojuangco and particularly the sheriff "from
enforcing or implementing the Order of Demolition. This was followed by another
order granting a writ of preliminary injunction.
ISSUE:
1. Whether Villegas can still legally institute a separate independent action
against the adjudged owner of the disputed lot on the ground that
Villegas and her predecessors-in-interest are builders in good faith and
are therefore entitled to recover the value of the improvements they had
introduced on the lot.
2.Whether or not the execution of a final judgment in an ejectment case
may be stayed by a co-equal court in order that the light of
indemnification and retention of an alleged builder in good faith may not
be rendered meaningless or illusory in an independent civil action for
specific performance.
RULING:
1. NO. Villegas should have made it an alternative claim or defense.
Villegas' claim to recover compensation for improvements made on the
land is essentially in the nature of a counterclaim since it is inter-woven
with the fact of possession. Said claim for compensation should have
been presented as a counterclaim in the ejectment suit. It is deemed
Page 7 of 48
 barred if not raised on time and the party in error is precluded from
setting it up in a subsequent litigation.
According to Villegas, the reason why the counterclaim for indemnification was
not made in the original action was because it became a "ripe issue" only after the
ejectment proceedings. Villegas contended that the estoppel of judgment could
only extend to those facts and conditions existing at the time the judgment was
rendered and not to those which supervened before the second suit.
The argument is untenable. In her pleadings, Villegas repeatedly stressed that the
residential house which her parents had constructed was already there on the
questioned lot for as long as she could remember, that she herself has lived there
all her life and that in the honest belief that the land had been "donated" to her
parents by her "Aunt Tecla", she made various improvements and renovation
thereon. Obviously, such declarations on the part of Villegas completely negate
her absurd claim that the factual basis for her subsequent action arose after the
ejectment suit became final.1âwphi1
Villegas should have set forth, simultaneously with the assertion that she was
entitled to the parcel of land by right of inheritance, the alternative claim that
assuming she was not legally entitled to the disputed lot, at least as a builder in
good faith, she has the right to the value of the buildings and improvements which
she and her parents had introduced on the land. 11 And while it may be argued
that the defense of being a builder in good faith would have been inconsistent
with her claim of ownership, in the case of Castle Bros., Wolf and Sons v. Go-Juno
12 the Court held that a party may set forth as many defenses and counterclaims
as he may have, whatever be their nature. These may even be inconsistent with
each other because what is sufficient is that each is consistent with itself.
Since Villegas failed to set up such alternative defense (i.e. a builder in good faith
is entitled to recover the value of improvements) and instead relied on the sole
defense that she inherited the land from her parents, the rejection thereof was a
complete resolution of the controversy between the parties which bars a later
case based upon the unpleaded defense. The adjudication of the issue joined by
the parties in the earlier case constitutes res judicata, the theory being that what
is barred by prior judgment are not only the matters actually raised and litigated
upon, but also such other matters as could have been raised but were not.
2. NO, it will be violation of doctrine of non-interference. "no court has
power to interfere by injunction with the judgments or decrees of a court
of concurrent or coordinate jurisdiction having power to grant the relief
sought by injunction." The various branches of the court of first instance
of a province or city, having as they have the same or equal authority and
exercising as they do concurrent and coordinate jurisdiction, should not,
cannot and are not permitted to interfere with their respective cases,
much less with their orders or judgments. A contrary rule would
obviously lead to confusion and seriously hamper the administration of
justice.
153.) Philtranco Service Enterprises, Inc. Vs.
Felix Paras And Inland Trailways, Inc., And Hon. Court Of Appeals
G.R. No. 161909; April 25, 2012
FACTS:
Felix Paras (Paras for brevity), who hails from Cainta, Rizal is engaged in the buy
and sell of fish products. Sometime on 08 February 1987, on his way home to
Manila from Bicol Region, he boarded a bus, owned and operated by Inland
Trailways, Inc. (Inland for brevity) and driven by its driver Calvin Coner.
The said bus was travelling along Maharlika Highway, Tiaong, Quezon, it was
bumped at the rear by another bus with Plate No. EVB 259, owned and operated
by Philtranco Service Enterprises, Inc.
The said accident bought considerable damage to the vehicles involved and
caused physical injuries to the passengers and crew of the two buses, including
the death of Coner who was the driver of the Inland Bus at the time of the incident.
Paras sustained injuries.
Paras filed a complaint for damages based on breach of contract of carriage
against Inland.
In its answer, defendant Inland denied responsibility, by alleging, among others,
that its driver Coner had observed an utmost and extraordinary care and
diligence to ensure the safety of its passengers. In support of its disclaimer of
responsibility, Inland invoked the Police Investigation Report which established
the fact that the Philtranco bus driver of [sic] Apolinar Miralles was the one which
violently bumped the rear portion of the Inland bus, and therefore, the direct and
proximate cause of Paras’ injuries.
Upon leave of court, Inland filed a third-party complaint against Philtranco and
Apolinar Miralles (Third Party defendants). In this third-party complaint, Inland,
sought for exoneration of its liabilities to Paras, asserting that the latter’s cause
of action should be directed against Philtranco considering that the accident was
caused by Miralles’ lack of care, negligence and reckless imprudence.
RTC ordered that Philtranco and Apolinar Miralles are hereby ordered to pay
plaintiff jointly and severally.
Page 8 of 48
All the parties appealed to the CA on different grounds.
CA affirmed RTC with modification. Aside from paying Paras, it ordered
Philitranco and Miralles to pay Inland as a way of temperate damages.
Philtranco moved for reconsideration, but the CA denied its motion for
reconsideration.
ISSUE:
Whether or not CA committed grave abuse of discretion amounting to lack of
jurisdiction in awarding moral damages to Paras despite the fact that the
complaint had been anchored on breach of contract of carriage.
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 through the third-party complaint filed on
March 2, 1990 was correct. The device of the third-party action, also known as
impleader, was in accord with Section 12, Rule 6 of the Revised Rules of Court,
the rule then applicable, viz:
Section 12. Third-party complaint. – A third-party complaint is a claim that a
defending party may, with leave of court, file against a person not a party to the
action, called the third-party defendant, for contribution, indemnity, subrogation
or any other relief, in respect of his opponent’s claim.

RULING:
NO. CA correctly ruled that Paras can recover moral damages against Philtranco
when its cause of action is based on breach of contract against Inland.
As a general rule, indeed, moral damages are not recoverable in an action
predicated on a breach of contract. This is because such action is not included in
Article 2219 of the Civil Code5 as one of the actions in which moral damages may
be recovered. By way of exception, moral damages are recoverable in an action
predicated on a breach of contract: (a) where the mishap results in the death of a
passenger, as provided in Article 1764,6 in relation to Article 2206, (3),7 of the
Civil Code; and (b) where the common carrier has been guilty of fraud or bad
faith,8 as provided in Article 22209 of the Civil Code.
Accordingly, the requisites for a third-party action are, firstly, that the party to be
impleaded must not yet be a party to the action; secondly, that the claim against
the third-party defendant must belong to the original defendant; thirdly, the
claim of the original defendant against the third-party defendant must be based
upon the plaintiff’s claim against the original defendant; and, fourthly, the
defendant is attempting to transfer to the third-party defendant the liability
asserted against him by the original plaintiff.
As the foregoing indicates, the claim that the third-party complaint asserts
against the third-party defendant must be predicated on substantive law. Here,
the substantive law on which the right of Inland to seek such other relief through
its third-party complaint rested were Article 2176 and Article 2180 of the Civil
Code.

Although this action does not fall under either of the exceptions, the award of
Paras’ cause of action against Inland (breach of contract of carriage) did not need
moral damages to Paras was nonetheless proper and valid. There is no question
to be the same as the cause of action of Inland against Philtranco and its driver
that Inland filed its third-party complaint against Philtranco and its driver in
(tort or quasi-delict) in the impleader. It is settled that a defendant in a contract
order to establish in this action that they, instead of Inland, should be directly
action may join as third-party defendants those who may be liable to him in tort
liable to Paras for the physical injuries he had sustained because of their
for the plaintiff’s claim against him, or even directly to the plaintiff. Indeed, Prof.
negligence. To be precise, Philtranco and its driver were brought into the action
Wright, et al., commenting on the provision of the Federal Rules of Procedure of
on the theory of liability that the proximate cause of the collision between
the United States from which Section 12, supra, was derived, observed so, to
Inland’s bus and Philtranco’s bus had been "the negligent, reckless and
wit:16
imprudent manner defendant Apolinar Miralles drove and operated his driven
unit, the Philtranco Bus.
The third-party claim need not be based on the same theory as the main claim.
For example, there are cases in which the third-party claim is based on an express
The apparent objective of Inland was not to merely subrogate the third-party
indemnity contract and the original complaint is framed in terms of negligence.
defendants for itself, as Philtranco appears to suggest, but, rather, to obtain a
Similarly, there need not be any legal relationship between the third-party
different relief whereby the third-party defendants would be held directly, fully
defendant and any of the other parties to the action. Impleader also is proper
and solely liable to Paras and Inland for whatever damages each had suffered
even though the third party’s liability is contingent, and technically does not
from the negligence committed by Philtranco and its driver. In other words,
Page 9 of 48
come into existence until the original defendant’s liability has been established.
In addition, the words ‘is or may be liable’ in Rule 14(a) make it clear that
impleader is proper even though the third-party defendant’s liability is not
automatically established once the third-party plaintiff’s liability to the original
plaintiff has been determined.
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 the Court has cogently discoursed in Samala v.
Judge Victor:
Appellants argue that since plaintiffs filed a complaint for damages against the
defendants on a breach of contract of carriage, they cannot recover from the
third-party defendants on a cause of action based on quasi-delict. The third party
defendants, they allege, are never parties liable with respect to plaintiff s claim
although they are with respect to the defendants for indemnification,
subrogation, contribution or other reliefs. Consequently, they are not directly
liable to the plaintiffs. Their liability commences only when the defendants are
adjudged liable and not when they are absolved from liability as in the case at
bar.
Quite apparent from these arguments is the misconception entertained by
appellants with respect to the nature and office of a third party complaint.
Section 16, Rule 6 of the Revised Rules of Court defines a third party complaint
as a "claim that a defending party may, with leave of court, file against a person
not a party to the action, called the third-party defendant, for contribution,
indemnification, subrogation, or any other relief, in respect of his opponent’s
claim." In the case of Viluan vs. Court of Appeals, et al., 16 SCRA 742 [1966], this
Court had occasion to elucidate on the subjects covered by this Rule, thus:
... As explained in the Atlantic Coast Line R. Co. vs. U.S. Fidelity & Guaranty Co., 52
F. Supp. 177 (1943:)
‘From the sources of Rule 14 and the decisions herein cited, it is clear that this
rule, like the admiralty rule, ‘covers two distinct subjects, the addition of parties
defendant to the main cause of action, and the bringing in of a third party for a
defendant’s remedy over’. xxx
‘If the third party complaint alleges facts showing a third party’s direct liability to
plaintiff on the claim set out in plaintiff’s petition, then third party ‘shall’ make
his defenses as provided in Rule 12 and his counterclaims against plaintiff as
provided in Rule 13. In the case of alleged direct liability, no amendment (to the
complaint) is necessary or required. The subject-matter of the claim is contained
in plaintiff's complaint, the ground of third party’s liability on that claim is alleged
in third party complaint, and third party’s defense to set up in his answer to
plaintiff's complaint. At that point and without amendment, the plaintiff and third
party are at issue as to their rights respecting the claim.
The provision in the rule that, ‘The third-party defendant may assert any defense
which the third-party plaintiff may assert to the plaintiffs claim,’ applies to the
other subject, namely, the alleged liability of third party defendant. The next
sentence in the rule, ‘The third-party defendant is bound by the adjudication of
the third party plaintiffs liability to the plaintiff, as well as of his own to the
plaintiff or to the third-party plaintiff applies to both subjects. If third party is
brought in as liable only to defendant and judgment is rendered adjudicating
plaintiff's right to recover against defendant and defendant’s rights to recover
against third party, he is bound by both adjudications.That part of the sentence
refers to the second subject. If third party is brought in as liable to plaintiff, then
third party is bound by the adjudication as between him and plaintiff. That refers
to the first subject. If third party is brought in as liable to plaintiff and also over
to defendant, then third party is bound by both adjudications. xxx
Under this Rule, a person not a party to an action may be impleaded by the
defendant either (a) on an allegation of liability to the latter; (b) on the ground of
direct liability to the plaintiff-; or, (c) both (a) and (b). The situation in (a) is
covered by the phrase "for contribution, indemnity or subrogation;" while (b)
and (c) are subsumed under the catch all "or any other relief, in respect of his
opponent’s claim."
The case at bar is one in which the third party defendants are brought into the
action as directly liable to the plaintiffs upon the allegation that "the primary and
immediate cause as shown by the police investigation of said vehicular collision
between (sic) the above-mentioned three vehicles was the recklessness and
negligence and lack of imprudence (sic) of the third-party defendant Virgilio
(should be Leonardo) Esguerra y Ledesma then driver of the passenger bus." The
effects are that "plaintiff and third party are at issue as to their rights respecting
the claim" and "the third party is bound by the adjudication as between him and
plaintiff." It is not indispensable in the premises that the defendant be first
adjudged liable to plaintiff before the third-party defendant may be held liable to
the plaintiff, as precisely, the theory of defendant is that it is the third party
defendant, and not he, who is directly liable to plaintiff. The situation
contemplated by appellants would properly pertain to situation (a) above
wherein the third party defendant is being sued for contribution, indemnity or
subrogation, or simply stated, for a defendant's "remedy over".19
Page 10 of 48
It is worth adding that allowing the recovery of damages by Paras based on quasi-
delict, despite his complaint being upon contractual breach, served the judicial
policy of avoiding multiplicity of suits and circuity of actions by disposing of the
entire subject matter in a single litigation.
154.) SINGAPORE AIRLINES LIMITED Vs.
THE COURT OF APPEALS and PHILIPPINE AIRLINES
G.R. No. 107356 March 31, 1995
WHEREFORE, the decision of the respondent Court of Appeals in CA-G.R. CV No.
20488 dated September 21, 1992, is hereby REVERSED and a new one is entered
ordering private respondent Philippine Airlines to pay, by way of contribution,
petitioner Singapore Airlines one-half (1/2) of the amount it actually paid to
Sancho and Beatriz Rayos in satisfaction of the judgment in Civil Case No. 142252,
dated September 9, 1988.
FACTS:
Sancho Rayos was an overseas contract worker who had a renewed contract with
the Arabian American Oil Company (Aramco) for the period covering April 16,
1980, to April 15, 1981. As part of Aramco's policy, its employees returning to
Dhahran, Saudi Arabia from Manila are allowed to claim reimbursement for
amounts paid for excess baggage of up to 50 kilograms, as long as it is properly
supported by receipt.
Rayos took a Singapore Airlines (SIA) flight to report for his new assignment, with
a 50-kilogram excess baggage for which he paid P4,147.50. Aramco reimbursed
said amount upon presentation of the excess baggage ticket.
Rayos learned that he was one of several employees being investigated by
Aramco for fraudulent claims. He immediately asked his wife Beatriz in Manila to
seek a written confirmation from SIA that he indeed paid for an excess baggage
of 50 kilograms.
SIA's manager, Johnny Khoo, notified Beatriz of their inability to issue the
certification requested because their records showed that only three kilograms
were entered as excess and accordingly charged. SIA issued the certification
requested by the spouses Rayos only after its investigation of the anomaly and
after Beatriz, assisted by a lawyer, threatened it with a lawsuit. Aramco gave
Rayos his travel documents without a return visa. His employment contract was
not renewed.
The spouses Rayos, convinced that SIA was responsible for the non-renewal of
Rayos' employment contract with Aramco, sued it for damages. SIA claimed that
it was not liable to the Rayoses because the tampering was committed by its
handling agent, Philippine Airlines (PAL). It then filed a third-party complaint
against PAL. PAL, in turn, countered that its personnel did not collect any charges
for excess baggage; that it had no participation in the tampering of any excess
baggage ticket; and that if any tampering was made, it was done by SIA's
personnel.
RTC ruled in favor of the plaintiffs. It made SIA liable for damages to Rayoses.
ON THE THIRD PARTY COMPLAINT, the third-party defendant PAL is ordered to
pay defendant and third-party plaintiff SIA whatever the latter has paid the
plaintiffs.
All parties filed an appeal before the CA. PAL claimed that the spouses Rayos had
no valid claim against SIA because it was the inefficiency of Rayos which led to
the non-renewal of his contract with Aramco, and not the alleged tampering of
his excess bagged ticket On the other hand, SIA argued that the only issue in the
said appeal is whether or not it was entitled to reimbursement from PAL
The appellate court disagreed with SIA's contention that PAL could no longer
raise the issue of SIA's liability to the Rayoses and opined "that SIA's answer to
the complaint should inure to the benefit of PAL, and the latter may challenge the
lower court's findings against SIA in favor of plaintiffs-appellees (the Rayos
spouses) for the purpose of defeating SIA's claim against it, and not for the
purpose of altering in any way the executed judgment against SIA." In its answer
to the main complaint, SIA set up the defense that the excess baggage ticket was
indeed tampered with but it was committed by PAL's personnel.
CA absolved PAL from liability.
Hence, this petition for review. SIA contended that PAL cannot validly assail for
the first time on appeal the trial court's decision sustaining the validity of
plaintiff's complaint against SIA if PAL did not raise this issue in the lower court.
ISSUE:
Whether or not appellate court should have restricted its ruling on the right of
SIA to seek reimbursement from PAL, as this was the only issue raised by SIA in
its third-party complaint against PAL.
RULING:
Yes, CA erred.
Page 11 of 48
It must be noted that in the proceedings below, PAL disclaimed any liability to
the Rayoses and imputed the alleged tampering to SIA's personnel. On appeal,
however, PAL changed its theory and averred that the spouses Rayos had no valid
claim against SIA on the around that the non-renewal of Sancho's contract with
Aramco was his unsatisfactory performance rather than the alleged tampering of
his excess baggage ticket. In response to PAL's appeal, SIA argued that it was
improper for PAL to question SIA's liability to the plaintiff, since this was no
longer an issue on account of the finality and, in fact, satisfaction of the judgment.
There is no question that a third-party defendant is allowed to set up in his
answer the defenses which the third-party plaintiff (original defendant) has or
may have to the plaintiff's claim. There are, however, special circumstances
present in this case which preclude third-party defendant PAL from benefiting
from the said principle.
One of the defenses available to SIA was that the plaintiffs had no cause of action,
that is, it had no valid claim against SIA. SIA investigated the matter and
discovered that tampering was, indeed, committed, not by its personnel but by
PAL's. This became its defense as well as its main cause of action in the third-
party complaint it filed against PAL. For its part, PAL could have used the defense
that the plaintiffs had no valid claim against it or against SIA. This could be done
indirectly by adopting such a defense in its answer to the third-party complaint
if only SIA had raised the same in its answer to the main complaint, or directly by
so stating in unequivocal terms in its answer to SIA's complaint that SIA and PAL
were both blameless. Yet, PAL opted to deny any liability which it imputed to
SIA's personnel. It was only on appeal — in a complete turn around of theory —
that PAL raised the issue of no valid claim by the plaintiff against SIA. This simply
cannot be allowed.
While the third-party defendant; would benefit from a victory by the third-party
plaintiff against the plaintiff, this is true only when the third-party plaintiff and
third-party defendant have non-contradictory defenses. Here, the defendant and
third-party defendant had no common defense against the plaintiffs' complaint,
and they were even blaming each other for the fiasco.
Fear of collusion between the third-party plaintiff and the plaintiffs aired by the
appellate court is misplaced if not totally unfounded. The stand of SIA as against
the plaintiffs' claim was transparent from the beginning. PAL was aware of SIA's
defense, and if it was convinced that SIA should have raised the defense of no
valid claim by the plaintiffs, it should have so stated in its answer as one of its
defenses, instead of waiting for an adverse judgment and raising it for the first
time on appeal.
The judgment, therefore, as far as the Rayoses and SIA are concerned, has already
gained finality. What remains to be resolved, as correctly pointed out by
petitioner, is whether it is entitled to reimbursement from PAL, considering that
PAL appealed that part of the decision to the appellate court. This is where the
rule laid down in Firestone becomes applicable.
the Court stated in Firestone case:
The third-party complaint is, therefore, a procedural device whereby a "third
party" who is neither a party nor privy to the act or deed complained of by the
plaintiff, may be brought into the case with leave of court, by the defendant, who
acts as third-party plaintiff to enforce against such third-party defendant a right
for contribution, indemnity, subrogation or any other relief, in respect of the
plaintiff's claim. The third-party complaint is actually independent of and
separate and distinct from the plaintiff's complaint. . . . When leave to file the
third-party complaint is properly granted, the Court renders in effect two
judgments in the same case, one on the plaintiff's complaint and the other on the
third-party complaint. When he finds favorably on both complaints, as in this
case, he renders judgment on the principal complaint in favor of plaintiff against
defendant and renders another judgment on the third-party complaint in favor
of defendant as third-party plaintiff, ordering the third-party defendant to
reimburse the defendant whatever amount said defendant is ordered to pay
plaintiff in the case. Failure of any of said parties in such a case to appeal the
judgment as against him makes such judgment final and executory. By the same
token, an appeal by one party from such judgment does not inure to the
benefit of the other party who has not appealed nor can it be deemed to be
an appeal of such other party from the judgment against him.
The trial court's decision, although adverse to SIA as defendant, made PAL
ultimately answerable for the judgment by ordering the latter to reimburse the
former for the entire monetary award. On appeal, PAL tried to exonerate itself by
arguing that the Rayoses had no valid claim against SIA. From PAL's viewpoint,
this seemed to be the only way to extricate itself from a mess which the court a
quo ascribed to it. This cannot, however, be allowed because it was neither raised
by SIA in its answer to the main complaint nor by PAL in its answer to the third-
party complaint. The prudent thing that PAL should have done was to state in
its answer to the third-party complaint filed by SIA against it everything
that it may conceivably interpose by way of its defense, including specific
denials of allegations in the main complaint which implicated it along with
SIA.
The appellate court was in error when it opined that SIA's answer inured to the
benefit of PAL for the simple reason that the complaint and the third-party
complaint are actually two separate cases involving the same set of facts which is
allowed by the court to be resolved in a single proceeding only to avoid a
Page 12 of 48
multiplicity of actions. Such a proceeding obviates the need of trying two cases,
receiving the same or similar evidence for both, and enforcing separate
judgments therefor. This situation is not, as claimed by the appellate court,
analogous to a case where there are several defendants against whom a
complaint is filed stating a common cause of action, where the answer of some of
the defendants inures to the benefit of those who did not file an answer. While
such a complaint speaks of a single suit, a third-party complaint involves an
action separate and distinct from, although related to the main complaint. A
third-party defendant who feels aggrieved by some allegations in the main
complaint should, aside from answering the third-party complaint, also answer
the main complaint.
The non-renewal of Rayos employment contract was the natural and probable
consequence of the separate tortious acts of SIA and PAL. Under mandate of
Article 2176 of the Civil Code, Rayos is entitled to be compensated for such
damages. Inasmuch as the responsibility of two or more persons, or tort-feasors,
liable for a quasi-delict is joint and several,3 and the sharing as between such
solidary debtors is pro-rata,4 it is but logical, fair, and equitable to require
PAL to contribute to the amount awarded to the Rayos spouses and already
paid by SIA, instead of totally indemnifying the latter.
155.) VIRGINIA S. DIO and H.S. EQUITIES, LTD. Vs.
SUBIC BAY MARINE EXPLORATORIUM, INC., Officer, TIMOTHY DESMOND
G.R. No. 189532; June 11, 2014
This is a Petition for Review on Certiorari pursuant to Rule 45 of the Revised
Rules of Court, assailing the Order of the Regional Trial Court (RTC) of Balanga
City, Bataan, on pure question of law.
FACTS:
Petitioner H.S. Equities, Ltd., (HSE) is a foreign corporation duly organized and
existing under the laws of the British Virgin Islands. It entered into an isolated
transaction subject of the instant case. It is represented in this action by
petitioner Virginia S. Dio (Dio).
Respondent Subic Bay Marine Exploratorium, Inc. (SBME) is a domestic
corporation, duly organized and existing under the Philippine laws and is
represented in this action by its Chief Executive Officer, respondent Timothy
Desmond (Desmond).
In 2002, SBME decided to expand its business by operating a beach resort. For
the business venture to take off, SBME needed to solicit investors. HSE thru its
authorized director, Dio, agreed to invest the amount of US$2,500,000.00 with
SBME by purchasing common shares. The agreement was reduced into writing
wherein HSE, in order to protect its interest in the company, was afforded the
right to appoint a member of the board of directors and the right to veto certain
board resolutions. After HSE initially paid US$200,000.00 for its subscription, it
refused to further lay out money for the expansion project of the SBME due to the
alleged mismanagement in the handling of corporate funds.
Consequently, SBME initiated an intra-corporate dispute before the RTC of
Balanga City, Bataan against petitioners HSE and Dio. SBME essentially alleged
that HSE unjustly refused to pay the balance of its unpaid subscription effectively
jeopardizing the company’s expansion project. Apart from their refusal to honor
their obligation under the subscription contract, it was further alleged by SBME
that Dio tried to dissuade local investors and financial institutions from putting
in capital to SBME by imputing defamatory acts against Desmond. To protect the
interest of the corporation and its stockholders, SBME sought that petitioners be
enjoined from committing acts inimical to the interest of the company.
To refute the claims of respondents, petitioners maintained in their Answer with
Compulsory Counterclaim that it would be highly preposterous for them to
dissuade investors and banks from putting in money to SBME considering that
HSE and Dio are stakeholders of the company with substantial investments
therein. In turn, petitioners countered that their reputation and good name in the
business community were tarnished as a result of the filing of the instant
complaint, and thus prayed that they be indemnified for moral damages and
litigation expenses. Petitioners likewise sought to recover their investment of
US$1,500,000.00 since they were purportedly inveigled by Desmond into putting
in money to SBME under the pretext that they will be accorded with minority
protection rights.
After petitioners filed their Answer with Compulsory Counterclaim, the RTC,
instead of setting the case for pre-trial, motu proprio dismissed the case. The
dismissal was grounded on the defective certificate of non-forum shopping which
was signed by Desmond without specific authority from the Board of Directors of
SBME.
Armed with a board resolution specifically authorizing Desmond to sign the
certificate of non-forum shopping on behalf of SBME, respondents moved that the
case be reinstated. For lack of merit, RTC denied respondents’ motion and
affirmed the dismissal.
Page 13 of 48
Aggrieved, respondents elevated the matter before the Court of Appeals. For
failure of the respondents to file their appellants’ brief, the appellate court
proceeded to dismiss the case and considered it closed and terminated.
After respondents failed to seasonably move for the reconsideration of the
aforementioned Resolution, the dismissal became final and executory.
The procedural incidents before the appellate court having been resolved with
finality, petitioners went back to the RTC to file a motion to set their
counterclaims for hearing which was opposed by the respondents on the ground
that the filing of the compulsory counterclaims was not accompanied by payment
of the required docket fees precluding the court from acquiring jurisdiction over
the case.
Acting on the motions filed by the opposing parties, the RTC granted the motion
to dismiss but not on the ground of non-payment of docket fees. In disallowing
petitioners’ counterclaims to proceed independently of respondents’ complaint,
the lower court pointed out that in view of the dismissal of the main case, which
has already been affirmed with finality by the appellate court, it has already lost
its jurisdiction to act on petitioners’ counterclaim, the compulsory counterclaim
being merely ancillary to the principal controversy.
Thus, petitioners filed this instant Petition for Review on Certiorari on pure
question of law seeking the reversal of the RTC Orders.
ISSUE:
Whether or not the dismissal of the complaint carries with it the dismissal of the
counterclaim
RULING:
No. In the significant case of Pinga v. Heirs of German Santiago, this Court
speaking through Justice Dante Tinga, resolved the nagging question as to
whether or not the dismissal of the complaint carries with it the dismissal of the
counterclaim. Putting to rest the remaining confusion occasioned by Metals
Engineering Resources Corp. v. Court of Appeals24 and BA Finance Corporation v.
Co,25 the Court articulated that, in light of the effectivity of the 1997 Rules of Civil
Procedure, the correct and prevailing doctrine is as follows:
To be certain, when the Court promulgated the 1997 Rules of Civil Procedure,
including the amended Rule17, those previous jural doctrines that were
inconsistent with the new rules incorporated in the 1997 Rules of Civil Procedure
were implicitly abandoned insofar as incidents arising after the effectivity of the
new procedural rules on 1 July 1997. BA Finance, or even the doctrine that a
counterclaim may be necessarily dismissed along with the complaint, clearly
conflicts with the 1997 Rules of Civil Procedure. The abandonment of BA Finance
as doctrine extends as far back as 1997, when the Court adopted the new Rules
of Civil Procedure. If, since then, such abandonment has not been affirmed in
jurisprudence, it is only because no proper case has arisen that would warrant
express confirmation of the new rule. That opportunity is here and now, and we
thus rule that the dismissal of a complaint due to fault of the plaintiff is without
prejudice to the right of the defendant to prosecute any pending counterclaims
of whatever nature in the same or separate action. We confirm that BA Finance
and all previous rulings of the Court that are inconsistent with this present
holding are now abandoned.
As the rule now stands, the nature of the counterclaim notwithstanding, the
dismissal of the complaint does not ipso jure result in the dismissal of the
counterclaim, and the latter may remain for independent adjudication of the
court, provided that such counterclaim, states a sufficient cause of action and
does not labor under any infirmity that may warrant its outright dismissal. Stated
differently, the jurisdiction of the court over the counterclaim that appears to be
valid on its face, including the grant of any relief thereunder, is not abated by the
dismissal of the main action. The court’s authority to proceed with the disposition
of the counterclaim independent of the main action is premised on the fact that
the counterclaim, on its own, raises a novel question which may be aptly
adjudicated by the court based on its own merits and evidentiary support.
In Perkin Elmer Singapore Pte Ltd. v. Dakila Trading Corporartion, 29 a case on all
fours with the present one, we expounded our ruling in Pinga and pointed out
that the dismissal of the counterclaim due to the fault of the plaintiff is without
prejudice to the right of the defendant to prosecute any pending counterclaims
of whatever nature in the same or separate action, thus: Based on the aforequoted
ruling of the Court, if the dismissal of the complaint somehow eliminates the
cause of the counterclaim, then the counterclaim cannot survive. Conversely, if
the counterclaim itself states sufficient cause of action then it should stand
independently of and survive the dismissal of the complaint. Now, having been
directly confronted with the problem of whether the compulsory counterclaim
by reason of the unfounded suit may prosper even if the main complaint had been
dismissed, we rule in the affirmative.
It bears to emphasize that petitioner's counterclaim against respondent is for
damages and attorney's fees arising from the unfounded suit. While respondent's
Complaint against petitioner is already dismissed, petitioner may have very well
Page 14 of 48
already incurred damages and litigation expenses such as attorney's fees since it
was forced to engage legal representation in the Philippines to protect its rights
and to assert lack of jurisdiction of the courts over its person by virtue of the
improper service of summons upon it. Hence, the cause of action of petitioner's
counterclaim is not eliminated by the mere dismissal of respondent's complaint.
Once more, we allow the counterclaim of the petitioners to proceed
independently of the complaint of the respondents.
WHEREFORE, premises considered, the petition is GRANTED. The assailed R TC
Orders dated 3 April 2009 and 26 August 2009 are hereby REVERSED and SET
ASIDE. The case is REMANDED to the Regional Trial Court of Balanga City, Bataan
for further proceedings, on the matter of petitioners Virginia S. Dio and H.S.
Equities, Ltd.'s counterclaims. No pronouncement as to costs.
156.) AIDA PADILLA Vs. GLOBE ASIATIQUE REALTY HOLDINGS
CORPORATION, FILMAL REALTY CORPORATION, DELFIN S. LEE and
DEXTER L. LEE G.R. No. 207376; August 6, 2014
Petition: Petition for review under Rule 45
FACTS:
Philippine National Bank (PNB) entered into several Contracts to Sell (CTS)
Facility Agreements with respondents Globe Asiatique Realty Holdings
Corporation (Globe Asiatique) and Filmal Realty Corporation (Filmal)
represented by Delfin S. Lee and Dexter L. Lee, President and Vice-President,
respectively, of the two corporations. Pursuant to and as a condition for the CTS
Facility availments, respondents executed in favor of PNB several Deeds of
Assignment.
Respondents defaulted in the payment of their outstanding balance, for which
PNB made a formal and final demand upon respondents to pay/settle their
outstanding obligation. In the course of credit monitoring and verification, PNB
claimed it discovered 231 out of 240 Contracts to Sell to have either inexistent
addresses of buyers or the names of the buyers are non-existent or both.
Thereafter, PNB instituted Civil Case for recovery of sum of money and damages
with prayer for writ of preliminary attachment before the RTC of Pasay City.
In their complaint, PNB alleged that respondents falsely represented that they
have valid and subsisting contracts to sell, which evidently showed they had no
intention to pay their loan obligations.
Defendants Globe Asiatique and Filmal also filed their Answer with Counterclaim
denying PNB’s allegations of fraud and misrepresentation particularly after PNB
had accepted payments from the corporations. They further assailed the affidavit
executed by Aida Padilla who they claimed has no personal knowledge of the
subject transactions and there being no allegation of threat or possibility that
defendant corporations will dispose of their properties in fraud of their creditors.
The Pasay City RTC denied defendants’ motion to dismiss.
Meanwhile, in their Complaint filed against Judge Pedro De Leon Gutierrez and
Aida Padilla (both sued in their personal capacity), respondents claimed that
Globe Asiatique and Filmal are well-known and successful real estate developers
whose projects were "being continuously supported by various banks and other
financial institutions prior to the malicious and devastating unfounded civil
action" filed by AidaPadilla (petitioner) which wrought havoc to their businesses
and lives. Respondents sought to hold Judge Gutierrez personally liable for
issuing the writ of preliminary attachment in favor of PNB.
Respondents thus prayed for a judgment ordering petitioner and Judge Gutierrez
to pay moral damages, exemplary damages, litigation expenses, attorney’s fees
and cost of suit.
Judge Gutierrez moved to dismiss the complaint against him while petitioner
filed her Answer With Compulsory Counterclaims, praying for the dismissal of
respondents’ complaint on the following grounds: (1) submission of a false
certification of non-forum shopping by respondents; (2) litis pendentia; (3)
respondents’ failure to attach the alleged actionable document, i.e.the supposed
"new term loan", inviolation of Section 7, Rule 8 of the Rules of Court; (4) failure
to state a cause of action against petitioner; and (5) petitioner cannot be held
personally liable for her official acts done for and in behalf of PNB.
The RTC of Pasig City dismissed the case of respondents claiming damages from
petitioner for lack of jurisdiction. A motion for reconsideration was filed but it
was denied. Petitioner on the other hand, filed a Motion to Set Counterclaims for
Pre-Trial Conference. However, it was denied. Hence, the petitioner came directly
to this Court.
ISSUE:
Whether or not a court can take cognizance of a compulsory counterclaim despite
the fact that the corresponding complaint was dismissed for lack of jurisdiction.
Page 15 of 48
RULING:
Yes. SEC. 7. Compulsory counterclaim.– A compulsory counterclaim is one which,
being cognizable by the regular courts of justice, arises out of or is connected with
the transaction or occurrence constituting the subject matter of the opposing
party’s claim and does not require for its adjudication the presence of third
parties of whom the court cannot acquire jurisdiction. Such a counterclaim must
be within the jurisdiction of the court both as to the amount and the nature
thereof, except that in an original action before the Regional Trial Court, the
counterclaim may be considered compulsory regardless of the amount.
Under the 1997 Rules of Civil Procedure, it is now explicitly provided that the
dismissal of the complaint due to failure of the plaintiff to prosecute his case is
"without prejudice to the right of the defendant to prosecute his counterclaim in
the same or in a separate action."
To be certain, when the Court promulgated the 1997 Rules of Civil Procedure,
including the amended Rule 17, those previous jural doctrines that were
inconsistent with the new rules incorporated in the 1997 Rules of Civil Procedure
were implicitly abandoned insofar as incidents arising after the effectivity of the
new procedural rules on 1 July 1997. Subsequently, in Perkin Elmer Singapore
Pte Ltd. v. Dakila Trading Corporation37 this Court held that while the declaration
in Pinga refers to instances covered by Section 3, Rule 17 on dismissal of
complaints due to the fault of plaintiff, it does not preclude the application of the
same rule when the dismissal was upon the instance of defendant who correctly
argued lack of jurisdiction over its person. Further, in stark departure from
Metals Engineering, we declared that the court’s jurisdiction over respondent’s
complaint is not to be confused with jurisdiction over petitioner’s counterclaim,
Still anchored on the pronouncement in Pinga, we then categorically ruled that a
counterclaim arising from the unfounded suit may proceed despite the dismissal
of the complaint for lack of jurisdiction over the person of defendant-
counterclaimant.
It bears to emphasize that petitioner’s counterclaim against respondent is for
damages and attorney’s fees arising from the unfounded suit. While respondent’s
Complaint against petitioner is already dismissed, petitioner may have very well
already incurred damages and litigation expenses such as attorney’s fees since it
was forced to engage legal representation in the Philippines to protect its rights
and to assert lack of jurisdiction of the courts over its person by virtue of the
improper service of summons upon it. Hence, the cause of action of petitioner’s
counterclaim is not eliminated by the mere dismissal of respondent’s complaint.
In the present case, the RTC of Pasig City should have allowed petitioner’s
counterclaim to proceed notwithstanding the dismissal of respondents’
complaint, the same being compulsory in nature and with its cause not eliminated
by such dismissal. The Pasig City RTC clearly erred in refusing to hear the
counterclaims upon the same ground for dismissal of the complaint, i.e., lack of
jurisdiction in strict observance of the policy against interference with the
proceedings of a co-equal court.
Ironically, while it is the respondents who erroneously and maliciously asked the
Pasig City RTC to pass upon these issues still pending in a co-equal court, for
which reason the said court dismissed their complaint, petitioner was not
allowed to prove her counterclaim by reason of the unfounded suit in the same
case as purportedly it will entail verifying respondents’ claim that they were
prejudiced by the orders and processes in the Pasay City RTC. This situation
exemplifies the rationale in Perkin Elmer Singapore Pte Ltd. 42 on requiring the
petitioner to make the counterclaim in the present action, under threat of losing
such right to claim the same ever again any other court, yet make such right of
the petitioner totally dependent on the fate of the respondents’ complaint.
WHEREFORE, the petition is GRANTED. The Orders dated November 12, 2012
and May 8, 2013 of the Regional Trial Court of Pasig City, Branch 155 in Civil Case
No. 73132 are hereby REVERSED and SET ASIDE. Said court is hereby directed to
proceed with the presentation of evidence in support of the compulsory
counterclaim of petitioner Aida Padilla.
157.) ELIZA ZUNIGA-SANTOS Vs. MARIA DIVINA GRACIA SANTOS-
GRAN** and REGISTER OF DEEDS OF MARIKINA CITY
G.R. No. 197380; October 8, 2014
Petition: Before the Court is a petition for review on certiorari
FACTS:
Petitioner Eliza Zuñiga-Santos (petitioner), filed a Complaint for annulment of
sale and revocation of title against respondents Maria Divina Gracia Santos-Gran
(Gran) and the Register of Deeds of Marikina City before the RTC. The said
complaint was later amended (Amended Complaint).
In her Amended Complaint, petitioner alleged, among others, that: (a) she was
the registered owner of three (3) parcels of land located in the province of Rizal
Page 16 of 48
(subject properties) prior to their transfer in the name of private respondent
Gran; (b) she has a second husband by the name of Lamberto C. Santos
(Lamberto), with whom she did not have any children; (c) she was forced to take
care of Lamberto’s alleged daughter, Gran, whose birth certificate was forged to
make it appear that the latter was petitioner’s daughter; (d) pursuant to void and
voidable documents, i.e., a Deed of Sale, Lamberto succeeded in transferring the
subject properties in favor of and in the name of Gran; (e) despite diligent efforts,
said Deed of Sale could not be located; and (f) she discovered that the subject
properties were transferred to Gran sometime in November 2005. Accordingly,
petitioner prayed, inter alia, that Gran surrender to her the subject properties
and pay damages, including costs of suit.
For her part, Gran filed a Motion to Dismiss, contending, inter alia, that (a) the
action filed by petitioner had prescribed since an action upon a written contract
must be brought within ten (10) years from the time the cause of action accrues,
or in this case, from the time of registration of the questioned documents before
the Registry of Deeds;14 and (b) the Amended Complaint failed to state a cause of
action as the void and voidable documents sought to be nullified were not
properly identified nor the substance thereof set forth, thus, precluding the RTC
from rendering a valid judgment in accordance with the prayer to surrender the
subject properties.
The RTC granted Gran’s motion and dismissed the Amended Complaint for its
failure to state a cause of action, considering that the deed of sale sought to be
nullified was not attached. It likewise held that the certificates of title covering
the subject properties cannot be collaterally attacked and that the action had
already prescribed under Article 1144 of the Civil Code.
Dissatisfied, petitioner elevated the matter to the CA.
The CA sustained the dismissal of petitioner’s Amended Complaint but on the
ground of insufficiency of factual basis. The CA likewise ruled that the action has
not yet prescribed since an action for nullity of void deeds of conveyance is
imprescriptible. Nonetheless, it held that since the Deed of Sale sought to be
annulled was not attached to the Amended Complaint, it was impossible for the
court to determine whether petitioner’s signature therein was a forgery and thus,
would have no basis to order the surrender or reconveyance of the subject
properties.
Aggrieved, petitioner moved for reconsideration and attached, for the first time,
a copy of the questioned Deed of Sale which she claimed to have recently
recovered, praying that the order of dismissal be set aside and the case be
remanded to the RTC for further proceedings.
The CA denied petitioner’s motion and held that the admission of the contested
Deed of Sale at this late stage would be contrary to Gran’s right to due process.
Hence, the instant petition.
ISSUE:
Whether or not the dismissal of petitioner’s Amended Complaint should be
sustained
RULING:
Yes. A complaint states a cause of action if it sufficiently avers the existence of
the three (3) essential elements of a cause of action, namely: (a) a right in favor
of the plaintiff by whatever means and under whatever law it arises or is created;
(b) an obligation on the part of the named defendant to respect or not to violate
such right; and (c) an act or omission on the part of the named defendant violative
of the right of the plaintiff or constituting a breach of the obligation of defendant
to the plaintiff for which the latter may maintain an action for recovery of
damages. If the allegations of the complaint do not state the concurrence of these
elements, the complaint becomes vulnerable to a motion to dismiss on the ground
of failure to state a cause of action.
It is well to point out that the plaintiff’s cause of action should not merely be
"stated" but, importantly, the statement thereof should be "sufficient." This is
why the elementary test in a motion to dismiss on such ground is whether or not
the complaint alleges facts which if true would justify the relief demanded. As a
corollary, it has been held that only ultimate facts and not legal conclusions or
evidentiary facts are considered for purposes of applying the test. This is
consistent with Section 1, Rule 8 of the Rules of Court which states that the
complaint need only allege the ultimate facts or the essential facts constituting
the plaintiff’s cause of action. A fact is essential if they cannot be stricken out
without leaving the statement of the cause of action inadequate. Since the inquiry
is into the sufficiency, not the veracity, of the material allegations, it follows that
the analysis should be confined to the four corners of the complaint, and no other.
A judicious examination of petitioner’s Amended Complaint readily shows
its failure to sufficiently state a cause of action. Contrary to the findings of the
CA, the allegations therein do not proffer ultimate facts which would warrant an
Page 17 of 48
action for nullification of the sale and recovery of the properties in controversy,
hence, rendering the same dismissible.
While the Amended Complaint does allege that petitioner was the registered
owner of the subject properties in dispute, nothing in the said pleading or its
annexes would show the basis of that assertion, either through
statements/documents tracing the root of petitioner’s title or copies of previous
certificates of title registered in her name. Instead, the certificates of title
covering the said properties that were attached to the Amended Complaint are in
the name of Gran. At best, the attached copies of TCT Nos. N-5500 and N-4234
only mention petitioner as the representative of Gran at the time of the covered
property’s registration when she was a minor. Nothing in the pleading, however,
indicates that the former had become any of the properties’ owner. This leads to
the logical conclusion that her right to the properties in question – at least
through the manner in which it was alleged in the Amended Complaint – remains
ostensibly unfounded.
Aside from the insufficiency of petitioner’s allegations with respect to her right
to the subject properties sought to be recovered, the ultimate facts supposedly
justifying the "annulment of sale," by which the reconveyance of the subject
properties is sought, were also insufficiently pleaded.
Hence, by merely stating a legal conclusion, the Amended Complaint presented
no sufficient allegation upon which the Court could grant the relief petitioner
prayed for. Thus, said pleading should be dismissed on the ground of failure to
state cause of action, as correctly held by the RTC.
That a copy of the Deed of Sale adverted to in the Amended Complaint was
subsequently submitted by petitioner does not warrant a different course of
action. The submission of that document was made, as it was purportedly
"recently recovered," only on reconsideration before the CA which, nonetheless,
ruled against the remand of the case. An examination of the present petition,
however, reveals no counter-argument against the foregoing actions; hence, the
Court considers any objection thereto as waived.
In any event, the Court finds the Amended Complaint’s dismissal to be in order
considering that petitioner’s cause of action had already prescribed.
To determine when the prescriptive period commenced in an action for
reconveyance, the plaintiff’s possession of the disputed property is material. If
there is an actual need to reconvey the property as when the plaintiff is not in
possession, the action for reconveyance based on implied trust prescribes in ten
(10) years, the reference point being the date of registration of the deed or the
issuance of the title. On the other hand, if the real owner of the property remains
in possession of the property, the prescriptive period to recover titleand
possession of the property does not run against him and in such case,the action
for reconveyance would be in the nature of a suit for quieting of title which is
imprescriptible.41
In the case at bar, a reading of the allegations of the Amended Complaint failed to
show that petitioner remained in possession of the subject properties in dispute.
On the contrary, it can be reasonably deduced that it was Gran who was in
possession of the subject properties.
WHEREFORE, the petition is DENIED. The Decision dated January 10, 2011 and
the Resolution dated June 22, 2011 of the Court of Appeals in CA-G.R. CV No.
87849 are hereby AFFIRMEDwith MODIFICATION in that the Amended
Complaint be dismissed on the grounds of (a) failure to state a cause of action,
and (b) prescription as herein discussed.
158.) PARAMOUNT LIFE & GENERAL INSURANCE CORPORATION VS.
CHERRY T. CASTRO and GLENN ANTHONY T. CASTRO
G.R. No. 195728 April 19, 2016
Petition: Petitions for Review on Certiorari under Rule 45 of the Rules of Court
FACTS:
In 2004, the PPSBI applied for and obtained insurance from Paramount, which
accordingly issued Group Master Policy effective 1 September 2004. Under
Section 20, Article IV of the said policy, "all death benefits shall be payable to the
creditor, PPSBI, as its interest may appeal."
Meanwhile, Virgilio J. Castro (Virgilio) - Cherry's husband and Glenn's father -
obtained a housing loan from the PPSBI. PPSBI required Virgilio to apply for a
mortgage redemption insurance (MRI) from Paramount to cover the loan. In his
application for the said insurance policy, Virgilio named Cherry and Glenn as
beneficiaries. 16 Paramount issued a certificate in his favor, subject to the terms
and conditions of Group Master Policy.
On 26 February 2009, Virgilio died of septic shock. Consequently, a claim was
filed for death benefits under the individual insurance coverage issued under the
group policy. Paramount however denied the claim, on the ground of the failure
Page 18 of 48
of Virgilio to disclose material information, or material concealment or
misrepresentation. It said that when Virgilio submitted his insurance application,
he made some material misrepresentations by answering "no" to questions on
whether he had any adverse health history and whether he had sought medical
advice or consultation concerning it. Because of the alleged material concealment
or misrepresentation, it declared Virgilio's individual insurance certificate (No.
041913) rescinded, null, and absolutely void from the very beginning.22
Paramount filed a Complaint with the RTC. It prayed that Application and
Insurance Certificate covering the individual insurance of Virgilio be declared
null and void by reason of material concealment and misrepresentation. It also
prayed for attorney's fees and exemplary damages.
In their Answer with Counterclaim, the Castro’s argued that Virgilio had not
made any material misrepresentation. They further argued that by approving
Virgilio's application, Paramount was estopped from raising the supposed
misrepresentations. The Castro’s made a counterclaim for actual and exemplary
damages, as well as attorney's fees, for the alleged breach of contract by
Paramount arising from its refusal to honor its obligation as insurer.
G.R. No. 195728
On 29 October 2009, the Castros filed a motion to include the PPSBI as an
indispensable party-defendant. The RTC thereafter denied the motion, reasoning
that Paramount's Complaint could be fully resolved without the PPSBI's
participation.
Consequently, the Castro’s filed a Motion for Leave to File a Third Party-
Complaint and to Admit Attached Third-Party Complaint. This motion was
likewise denied. The Castro’s Motion for Reconsideration was again denied in a
Resolution.
Aggrieved, the Castro’s assailed the RTC Resolutions through a Petition for
Certiorari filed with the CA. They likewise subsequently filed a Motion for Leave
of Court to File and to Admit Attached Supplemental Petition for Review.
In its Decision, the CA partially granted the Petition by allowing a third-party
complaint to be filed against the PPSBI. It ruled that the Castro’s were freed from
the obligation to pay the bank by virtue of subrogation, as the latter would collect
the loan amount pursuant to the MRI issued by Paramount in Virgilio's
favor. Paramount moved for reconsideration, but the CA denied the motion
through a Resolution.
Paramount filed a Petition for Review under Rule 45, arguing that the case could
be fully appreciated and resolved without involving the PPSBI as a third-party
defendant.
ISSUES:
Whether the CA erred in remanding the case to the R TC for the admission of the
Third-Party Complaint against PPSBI
RULING:
Yes. The Castro’s sought to implead the PPSBI as a third-party defendant in the
nullification case instituted by Paramount. They theorized that by virtue of the
death of Virgilio and the mandate of the group insurance policy in relation to his
individual insurance policy, the PPSBI stepped into the shoes of Cherry and
Glenn. According to the Castro’s, upon Virgilio's death, the obligation to pay the
third-party defendant (PPSBI) passed on to Paramount by virtue of the Mortgage
Redemption Insurance, and not to them as Virgilio's heirs.
In this case, the PPSBI, as the mortgagee-bank, required Virgilio to obtain an MRI
from Paramount to cover his housing loan. Paramount undertook to pay the
PPSBI. Paramount, in opposing the PPSBI's inclusion as a third-party defendant,
reasons that it is only seeking the nullification of Virgilio's individual insurance
certificate, and not the group insurance policy forged between it and the PPSBI.
It concludes that the nullification action it filed has nothing to do with the PPSBI.
We disagree. Should Paramount succeed in having the individual insurance
certificate nullified, the PPSBI shall then proceed against the Castro’s. This would
contradict the provisions of the group insurance policy that ensure the direct
payment by the insurer to the bank:
Notwithstanding the provision on Section 22 "No Assignment" of Article IV
Benefit Provisions, and in accordance with provisions of Section 6 "Amendment
of this Policy" under Article II General Provisions of the Group Policy, it is hereby
agreed that all death benefits shall be payable to the Creditor, Philippine
Postal Savings Bank as its interest may appeal.47 (Emphasis supplied.)
In allowing the inclusion of the PPSBI as a third-party defendant, the Court
recognizes the inseparable interest of the bank (as policyholder of the group
policy) in the validity of the individual insurance certificates issued by
Paramount. The PPSBI need not institute a separate case, considering that its
cause of action is intimately related to that of Paramount as against the Castro’s.
Page 19 of 48
The soundness of admitting a third-party complaint hinges on 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 this case, the Castro’s stand to incur a bad debt to the
PPSBI - the exact event that is insured against by Group Master Policy No. G-086
- in the event that Paramount succeeds in nullifying Virgilio's Individual
Insurance Certificate.
Paramount further argues that the propriety of a third-party complaint rests on
whether the possible third-party defendant (in this case PPSBI) can raise the
same defenses that the third-party plaintiffs (the Castro’s) have against the
plaintiff. However, the Rules do not limit the third-party defendant's options to
such a condition. Thus:
Section 13. Answer to third (fourth, etc.)-party complaint. – A third (fourth, etc.)-
party defendant may allege in his answer his defenses, counterclaims or cross-
claims, including such defenses that the third (fourth, etc.)-party plaintiff may
have against the original plaintiffs claim. In proper cases, he may also assert a
counterclaim against the original plaintiff in respect of the latter's claim against
the third-party plaintiff. 49
As seen above, the same defenses the third-party plaintiff has against the original
plaintiff are just some of the allegations a third-party defendant may raise in its
answer. Section 13 even gives the third-party defendant the prerogative to raise
a counterclaim against the original plaintiff in respect of the latter's original claim
against the defendant/third-party plaintiff.
The CA correctly ruled that to admit the Castro’s Third-Party Complaint, in which
they can assert against the PPSBI an independent claim they would otherwise
assert in another action, would prevent multiplicity of suits. Considering also that
the original case from which these. Present Petitions arose has not yet been
resolved, the Court deems it proper to have all the parties air all their possible
grievances in the original case still pending with the RTC.
WHEREFORE, premises considered, the Petitions in G.R. Nos. 195728 and
211329 are DENIED.
RULE 7: PARTS OF A PLEADING
159.) JOSE SALCEDO QUIMPO, petitioner, vs. CATALINO DELA VICTORIA and
FRANCISCA O. DELA VICTORIA, respondents.
G.R. No. L-31822 July 31, 1972
This is a Petition to Review the Decisions of the CFI of Davao
FACTS:
Plaintiffs-respondents filed a complaint against defendant-petitioner with the
CFI of Davao for quieting of title and recovery of possession with damages.
Plaintiffs-respondents filed another case against defendant-petitioner with the
City Court of Davao City for forcible entry over the same parcel of land. In a
motion to dismiss, defendant-petitioner sought the dismissal of the complaint for
forcible entry alleging the pendency of quieting of title case; but the City Court, in
its order, denied the said motion "for the reason that there is no identity of rights
asserted and relief prayed for and for the further reason that it does not appear
that any judgment which would be rendered on the other action will amount to
res adjudicate in the herein case." Defendant-petitioner appealed to the Court of
First Instance reiterating his arguments for the dismissal of the complaint for
forcible entry as stated in his earlier motion in the City Court. His appeal benig
dismissed, defendant filed the herein petition.
ISSUE:
Whether the verification in the complaint for forcible entry does not comply with
Section 6, Rule 7, of the Revised Rules of Court, hence, the complaint is void
HELD:
NO. Catalino dela Victoria, one of the plaintiffs (now respondents) clearly
referred to the allegations in the complaint as having been read by him. However,
while he stated that "they are true and correct," he omitted to state that said
conclusion was reached of his own knowledge. The latter detail, however, is
logically inferable since affiant was a party and it does not appear that he was
verifying upon information and belief. If petitioner entertained doubt about the
true character of the verification, he should have asked that it be made more
definite. Moreover, even if We should find the verification insufficient, that
insufficiency would not render the complaint for forcible entry, or the whole
proceedings in the court below, void. This Court already held in several decisions
that the requirement regarding verification is not jurisdictional, but merely
formal. Thus, while it is true that Section 1, Rule 70, of the Revised Rules of Court
requires the verification of the complaint for forcible entry, the insufficiency of
the same, or its being defective, is not fatal to the jurisdiction of the City Court or
that of the court a quo to which the case was later appealed. With respect to the
second assignment of error, one the grounds for a motion to dismiss under Rule
16 of the Revised Rules of Court is the pendency of another action between the
Page 20 of 48
same parties for the same cause. In order that this ground may be availed of there
must be, between the action under consideration and the other action, (1)
identity of parties, or at least such as representing the same interest in both
actions; (2) identity rights asserted and relief prayed for, the relief being founded
on the same facts; and (3) the identity on the two preceeding particulars should
be such that any judgment which may be rendered on the other action will
regardless which party is successful amount to res adjudicata in the action under
consideration. While there may be identity of parties and subject matter in the
forcible entry case and Civil Case No. 6005, for quieting of title, the rights asserted
and the relief prayed for in the said cases are not the same. In the former case, to
the legal right claimed is possession, while in the latter case, the legal right
asserted is ownership.
160.) SAMEER OVERSEAS PLACEMENT AGENCY VS SANTOS
G.R. 152579. AUGUST 4, 2009
This is a petition for review on certiorari under Rule 45 of the Rules of Court
FACTS:
Private respondents Santos, et al. were recruited by petitioner Sameer Overseas
Placement Agency, Inc. (Sameer) as aluminum products manufacturer operators
for Ensure Company Ltd. of Taiwan (Ensure), under a one-year employment
contract with a basic monthly salary of NT$14,800.00.
Santos, et al. were deployed and were able to work for Ensure. However, they
were repatriated even prior to the expiration of their contracts. Santos, et al. filed
complaints against Sameer before the National Labor Relations Commission
(NLRC) for illegal dismissal, underpayment of salaries, and unauthorized salary
deductions.
Sameer filed a third party complaint against private respondent ASBT
International Management Service, Inc. (ASBT). It claimed that the latter should
be liable for all the contractual obligations of Ensure since Sameers accreditation
was transferred to ASBT on June 9, 1997.
The Labor arbiter ruled that SAMEER should pay Santos et.al.
However upon appeal to the NLRC, it absolved SAMEER and order ASBT to pay
Santos et.al.
ASBT elevated the case to the Court of Appeals via a petition for certiorari under
Rule 65 of the Rules of Court. The CA at first denied the appeal on the ground that
the attached Verification and Certification of Non-Forum Shopping was signed by
Mildred R. Santos as President of ASBT without any proof of authority to sign for
and bind ASBT in the proceedings. ASBT filed a motion for reconsideration of the
Resolution, submitting therewith the necessary board resolution authorizing
corporate president Mildred R. Santos to represent ASBT before the Court of
Appeals. The appellate court granted the motion and reinstated the petition.
Sameer now appeals raising the issue below.
ISSUE:
Whether or not the Petition and the Motion for Reconsideration, signed by
Mildred Santos as corporate president and who is not a member of the Bar,
should be considered unsigned pleadings which produce no legal effect.
RULING:
NO WHEREFORE, the petition is DENIED for lack of merit.
SEC. 3. Signature and address.Every pleading must be signed by the party or
counsel representing him, stating in either case his address which should
not be a post office box.
The signature of counsel constitutes a certificate by him that he has read the
pleading; that to the best of his knowledge, information, and belief there is good
ground to support it; and that it is not interposed for delay.
An unsigned pleading produces no legal effect. However, the court ay, in its
discretion, allow such deficiency to be remedied if it shall appear that the same
was due to mere inadvertence and not intended for delay. Counsel who
deliberately files an unsigned pleading, or signs a pleading in violation of this
Rule, or alleges scandalous or indecent matter therein, or fails to promptly report
to the court a change of his address, shall be subject to appropriate disciplinary
action. (Emphasis supplied.)
Obviously, the rule allows the pleadings to be signed by either the party to the
case or the counsel representing that party. In this case, ASBT, as petitioner,
opted to sign its petition and its motion for reconsideration in its own behalf,
through its corporate president, Mildred R. Santos, who was duly authorized by
ASBTs Board of Directors to represent the company in prosecuting this
case. Therefore, the said pleadings cannot be considered unsigned and without
any legal effect.
161.) ANDERSON VS HO
G.R. NO. 17259. JANUARY 7, 2013
Page 21 of 48

Anderson filed a Complaint for Ejectment against respondent Enrique Ho (Ho)
before the Metropolitan Trial Court (MeTC) of Quezon City. She alleged that
through her mere tolerance, Ho is in possession of her parcel of land at Roosevelt
Avenue, Quezon City. As she was already in need of the said property, Anderson
served upon Ho a Demand Letter to Vacate but despite receipt thereof, Ho
refused. Because of this, Anderson prayed that the MeTC order Ho to vacate the
Roosevelt property and pay her damages and attorneys fees. Ho averred that he
possesses the property not through mere tolerance but as part of his
compensation for services rendered to Anderson. Hence, he is entitled to the
continued possession thereof until such time that the property is sold and he is
paid the 10% of the proceeds of its sale.
MeTC rendered a Decision dismissed the case for lack of cause of action.
The case was appealed to the RTC which also dismissed the same without
prejudice. Anderson filed an MR but the same was denied by the RTC.
Intending to file with the CA a Petition for Review under Rule 42of the Rules of
Court, Anderson’s counsel, Atty. Rommel V. Oliva (Atty. Oliva), filed a Motion for
Extension of Time of 15 days within which to file a petition allegedly due to the
revisions required in the initial draft and on account of heavy pressure of work.
This was granted by the CA.
Subsequently, said counsel sought another extension of 15 days, this time
claiming that the petition had already been finalized and sent to Anderson in
Hawaii, U.S.A. for her to read as well as sign the certification and verification
portion thereof. However, as of the last day of the extended period, the petition
has not yet been sent back, hence, the additional extension being sought.
In the interest of justice, the CA once again granted the said motion for extension.
On June 20, 2005, Atty. Oliva was finally able to file the Petition for Review but
the certification against forum shopping attached thereto was signed by him on
Anderson’s behalf without any accompanying authority to do so. Hence, the CA
dismissed the case as the certification of forum shopping was signed not by the
petitioner herself but by her counsel without authority to do so. A motion for
reconsideration was filed which was also denied by the CA. Thus, petitioner now
invokes before the SC the liberal interpretation of the rules of procedure.
ISSUE: Whether or not the rules on certification against forum shopping may be
relaxed in this case
HELD:
NO. WHEREFORE, the Petition for Review on Certiorari is DENIED.
The need to abide by the Rules of Court and the procedural requirements it
imposes has been constantly underscored by this Court. One of these procedural
requirements is the certificate of non-forum shopping which, time and again, has
been declared as basic, necessary and mandatory for procedural orderliness.
In Vda. De Formoso v. Philippine National Bank, the Court reiterated the
guidelines respecting non-compliance with or submission of a defective
certificate of non-forum shopping, the relevant portions of which are as
follows:cralawlibrary
4) As to certification against forum shopping, non-compliance therewith or a
defect therein, x x x, is generally not curable by its subsequent submission or
correction thereof, unless there is a need to relax the Rule on the ground of
substantial compliance or presence of special circumstances or compelling
reasons.x x x
6) Finally, the certification against forum shopping 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 designating his counsel of record to sign on his behalf. (Emphasis
supplied)
The requirement that it is the petitioner, not her counsel, who should sign the
certificate of non-forum shopping is due to the fact that a "certification is a
peculiar personal representation on the part of the principal 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." "Obviously, it is
the petitioner, and not always the counsel whose professional services have been
retained for a particular case, who is in the best position to know whether she
actually filed or caused the filing of a petition in that case." Per the above
guidelines, however, if a petitioner is unable to sign a certification for reasonable
or justifiable reasons, she must execute an SPA designating her counsel of record
to sign on her behalf. "A certification which had been signed by counsel without
the proper authorization is defective and constitutes a valid cause for the
dismissal of the petition."
In this light, the Court finds that the CA correctly dismissed Andersons Petition
for Review on the ground that the certificate of non-forum shopping attached
thereto was signed by Atty. Oliva on her behalf sans any authority to do so. While
the Court notes that Anderson tried to correct this error by later submitting an
Page 22 of 48
SPA and by explaining her failure to execute one prior to the filing of the petition,
this does not automatically denote substantial compliance. It must be
remembered that a defective certification is generally not curable by its
subsequent correction. And while it is true that in some cases the Court
considered such a belated submission as substantial compliance, it "did so only
on sufficient and justifiable grounds that compelled a liberal approach while
avoiding the effective negation of the intent of the rule on non-forum shopping.
162.) BUAN VS LOPEZ
G.R. NO. 75349. OCTOBER 13, 1986
FACTS:
On August 5, 1986, a Special Civil Action was instituted by the Quiapo Church
Vendors against Respondent Gemiliano Lopez who was the then Acting Mayor of
Manila.
The case prayed for that the Lopez be prohibited from arbitrarily, whimsically
and capriciously revoking or cancelling their licenses or permit as well as from
threatening the physical demolition of their business stalls.There was also a
prayer for issuance of TRO which was granted on the same day.
On July 7, 1986, another Special Civil Action of prohibition with preliminary
injunction was filed by Samahang Kapatiran Sa Hanap Buhay ng Bagong Lipunan
against Lopez in Regional Trial Court of Manila, docketed as Civil Case No.
8636563.
The president of the said organization was Rosalina Buan and its press relations
officer was Liza Ocampo. The two individuals are also the petitioners in the case
at bar. It must be noted that the petitions is grounded on the same facts.
There was also identity of parties or at least such parties represent the same
interests in both actions as well as the identity of rights asserted and relief prayed
for.
ISSUE:
Whether there exist forum shopping.
HELD:
YES. WHEREFORE, the petition is denied for lack of merit
The petition in Case No. 86-36563 is grounded on the same facts as those in the
case at bar: the members of the Samahan had been legitimately engaged "in their
respective business of selling sundry merchandise, more particularly religious
articles, flowers and ornamental plants, and medicinal herbs;" they had been
religiously paying "the corresponding license and permit fees imposed by
prevailing ordinances of the City of Manila," but this notwithstanding they had
been given written notice dated May 3, 1986 emanating from the Mayor's Office,
advising of the cancellation of their permits and their possible relocation to
another site; and these acts "are unjust, illegal arbitrary, oppressive and
constitute grave abuse of discretion on the part of the respondent.
There thus exists between the action before this Court and RTC Case No. 86-
36563 Identity of parties, or at least such parties as represent the same interests
in both actions, as well as Identity of rights asserted and relief prayed for, the
relief being founded on the same facts, and the Identity on the two preceding
particulars is such that any judgment rendered in the other action, will regardless
of which party is successful, amount to res adjudicata in the action under
consideration: all the requisites, in fine, of auter action pendant.
Indeed, the petitioners in both actions, described in their petitions as vendors of
religious articles, herbs and plants, and sundry merchandise around the Quiapo
Church or its "periphery," have incurred not only the sanction of dismissal of their
case before this Court in accordance with Rule 16 of the Rules of Court, but also
the punitive measure of dismissal of both their actions, that in this Court and that
in the Regional Trial Court as well Quite recently, upon substantially Identical
factual premises, the Court en banc had occasion to condemn and penalize the act
of litigants of hearing the same suit in different courts, aptly described as "forum-
shopping," viz:
The acts of petitioners constitute a clear case of forum shopping, an act of
malpractice that is proscribed and condemned as trifling with the courts and
abusing their processes. It is improper conduct that tends to degrade the
administration of justice. The rule has been formalized in Section 17 of the
Interim Rules and Guidelines issued by this Court on January 11, 1983 in
connection with the implementation of the Judiciary Reorganization Act,
specifically with the grant in Section 9 of B.P. Blg. 129 of equal original
jurisdiction to the Intermediate Appellate Court to issue writs of mandamus,
prohibition, etc., and auxiliary writs or processes, whether or not in aid Of its
appellate jurisdiction. Thus, the cited Rule provides that no such petition may be
Page 23 of 48
filed in the Intermediate Appellate Court 'if another similar petition has been filed
or is still pending in the Supreme Court' and vice-versa. The Rule orders that "A
violation of the rule shall constitute contempt of court and shall be a cause for the
summary dismissal of both petitions, without prejudice to the taking of
appropriate action against the counsel or party concerned." The rule applies with
equal force where the party having filed an action in the Supreme Court shops for
the same remedy of prohibition and a restraining order or injunction in the
regional trial court (or vice-versa).
163.) LOQUIAS VS OFFICE OF THE OMBUDSMAN
G.R.139396. AUGUST 15, 2000
Petition for certiorari under Rule 65
FACTS
In a sworn complaint filed with the Office of the Ombudsman-Mindanao, private
respondents against petitioners with violation of Republic Act No. 3019 for their
alleged failure to give the salary increases and benefits provided in Section 20 of
the Magna Carta of Public Health Workers (R.A. 7305) and Local Budget Circulars
Nos. 54, 54-A, 56, 60 and 64 for the health personnel of the local government of
San Miguel, Zamboanga del Sur.
Herein private respondents were officers of the Association of Municipal Health
Office Personnel of Zamboanga del Sur who instituted the said complaint in
behalf of the 490 members of the said Association.
Petitioners Efren Loquias and Antonio Din, Jr. are the Mayor and Vice-Mayor,
respectively, of San Miguel, Zamboanga del Sur while petitioners Angelito
Martinez II, Lovelyn Biador and Gregorio Faciol, Jr. are members of the
Sangguniang Bayan of the said municipality.
Public respondent Ombudsman Aniano A. Desierto approved the Resolution of
Graft Investigation Officer II Jovito A. Coresis, Jr. of the Office of the Ombudsman-
Mindanao finding "probable cause to conclude that the crime of violation of
Section 3 (e) of RA 3019 has been committed by respondents Mayor, Vice-Mayor,
members of the Sangguniang Bayan and Budget Officer of San Miguel, Zamboanga
del Sur" and that accordingly, the appropriate Information be filed with the
Sandiganbayan.
Petitioners filed a Motion for Reinvestigation with prayer to defer arraignment
and pre-trial alleging that they recognize the salary increases of the health
personnel as a mandatory statutory obligation but the salary increases could not
be implemented because of lack of funds and the municipality had incurred
overdrafts. They further argue that the failure to give salary increases and other
Magna Carta benefits were due to circumstances beyond their control and not
due to any manifest partiality, evident bad faith or gross inexcusable negligence
on their part.
Special Prosecution Officer I Jacqueline J. Ongpauco-Cortel recommended the
dismissal of the case which recommendation was approved by Deputy Special
Prosecutor Robert E. Kallos and concurred in by Special Prosecutor Leonardo P.
Tamayo. This recommendation was, however, disapproved by Ombudsman
Desierto on June 18, 1999 stating in his handwriting that "(T)he crime had
obviously been committed, per OMB Mindanao findings, long before the payment
granting that the accused latters claim/allegation is true."
Meanwhile, petitioners filed a Motion for Reconsideration \alleging that there is
no probable cause in holding that they violated Section 3 (e) of the Anti-Graft and
Corrupt Practices Act. Alleging that the order disapproving the dismissal of the
case constituted denial of the motion for reconsideration, petitioners filed the
present petition.
The Office of the Ombudsman, through the Solicitor General, alleges that the
petition does not comply with Section 5, Rule 7 as the Verification and the
Certification on Non-Forum Shopping were signed only by petitioner Antonio Din
and not by all the petitioners and there is no showing that petitioner Din was
authorized by his co-petitioners to represent them in this case.
Petitioners contend that there was substantial compliance with Section 5, Rule 7
notwithstanding the fact that only one of the petitioners signed the verification
and certification on forum shopping
ISSUE: WON substantial compliance is enough to comply with Section 5, Rule 7.
HELD: NO.
WHEREFORE, the petition for certiorari is hereby DISMISSED for lack of merit.
At the outset, it is noted that the Verification and Certification was signed by
Antonio Din, Jr., one of the petitioners in the instant case. We agree with the
Solicitor General that the petition is defective. Section 5, Rule 7 expressly
provides that it is the plaintiff or principal party who shall certify under
oath that he has not commenced any action involving the same issues in any
court, etc.
Page 24 of 48
Only petitioner Din, the Vice-Mayor of San Miguel, Zamboanga del Sur, signed the
certification. There is no showing that he was authorized by his co-petitioners to
represent the latter and to sign the certification. It cannot likewise be presumed
that petitioner Din knew, to the best of his knowledge, whether his co-petitioners
had the same or similar actions or claims filed or pending.
We find that substantial compliance will not suffice in a matter involving
strict observance by the rules. The attestation contained in the certification on
non-forum shopping requires personal knowledge by the party who executed the
same. Petitioners must show reasonable cause for failure to personally sign the
certification. Utter disregard of the rules cannot justly be rationalized by harking
on the policy of liberal construction.
164.) DOCENA VS LAPESURA
G.R. No. 140153. March 28, 2001
This is a petition for review on certiorari under Rule 45 of the Rules of Court
seeking the nullification of the Court of Appeal
FACTS:
Casiano Hombria filed a Complaint for the recovery of a parcel of land against his
lessees, petitioner-spouses Antonio and Alfreda Docena. The petitioners claimed
ownership of the land based on occupation since time immemorial. A certain
Guillermo Abuda intervened in the case. The trial court ruled in favor of the
petitioners and the intervenor Abuda.
The CA reversed the judgment of the trial court and ordered the petitioners to
vacate the land they have leased from Casiano. The Complaint in Intervention of
Abuda was dismissed. CA ordered the petitioners to vacate the land they have
leased from the plaintiff-appellant [private respondent Casiano Hombria],
excluding the portion which the petitioners reclaimed from the sea and forms part
of the shore, as shown in the Commissioners Report, and to pay the plaintiff-
appellant the agreed rental of P1.00 per year from the date of the filing of the
Complaint until they shall have actually vacated the premises. The Complaint in
Intervention of Abuda was dismissed.
Hombria filed a Motion for Execution of the above decision which has already
become final and executor. Pursuant to the Resolution, the public respondent
sheriff issued an alias Writ of Demolition.
A Petition for Certiorari and Prohibition was filed by the petitioners with the
Court of Appeals, alleging grave abuse of discretion on the part of the trial court
judge in issuing the Orders and of the sheriff in issuing the Writ of Demolition.
The Court of Appeals dismissed the petition on the grounds that the petition was
filed beyond the 60-day period provided under Section 4 of Rule 65 of the 1997
Revised Rules of Civil Procedure as amended by Bar Matter No. 803 effective
September 1, 1998, and that the certification of non-forum shopping attached
thereto was signed by only one of the petitioners
ISSUE: Whether or not the petition be dismissed for the certificate of non-
forum shopping was signed by only one of the petitioners?
HELD: NO.
WHEREFORE, premises considered, the petition is hereby GRANTED.
In the case at bar, however, we hold that the subject Certificate of Non-Forum
Shopping signed by the petitioner Antonio Docena alone should be deemed to
constitute substantial compliance with the rules. There are only two petitioners
in this case and they are husband and wife. Their residence is the subject
property alleged to be conjugal in the instant verified petition. The
Verification/Certification on Non-Forum Shopping attached to the Petition for
Certiorari and Prohibition was signed only by the husband who certified, inter
alia, that he and his wife have not commenced any other action or proceeding
involving the same issues raised in the petition in any court, tribunal or quasi-
judicial agency; that to the best of their knowledge no such action is pending
therein; and that he and his wife undertake to inform the Court within five (5)
days from notice of any similar action or proceeding which may have been filed.
The property subject of the original action for recovery is conjugal. Whether it is
conjugal under the New Civil Code or the Family Code, a fact that cannot be
determined from the records before us, it is believed that the certificate on non-
forum shopping filed in the Court of Appeals constitutes sufficient compliance
with the rules on forum-shopping.
Under the New Civil Code, the husband is the administrator of the conjugal
partnership.In fact, he is the sole administrator, and the wife is not entitled as a
matter of right to join him in this endeavour. The husband may defend the
conjugal partnership in a suit or action without being joined by the wife.
Corollarily, the husband alone may execute the necessary certificate of non-
forum shopping to accompany the pleading. The husband as the statutory
administrator of the conjugal property could have filed the petition for certiorari
and prohibition alone, without the concurrence of the wife. If suits to defend an
interest in the conjugal properties may be filed by the husband alone, with more
reason, he may sign the certificate of non-forum shopping to be attached to the
petition.
Page 25 of 48
Under the Family Code, the administration of the conjugal property belongs to
the husband and the wife jointly. However, unlike an act of alienation or
encumbrance where the consent of both spouses is required, joint management
or administration does not require that the husband and wife always act together.
Each spouse may validly exercise full power of management alone, subject to the
intervention of the court in proper cases as provided under Article 124 of the
Family Code. It is believed that even under the provisions of the Family Code, the
husband alone could have filed the petition for certiorari and prohibition to
contest the writs of demolition issued against the conjugal property with the
Court of Appeals without being joined by his wife. The signing of the attached
certificate of non-forum shopping only by the husband is not a fatal defect.
More important, the signing petitioner here made the certification in his behalf
and that of his wife. The husband may reasonably be presumed to have personal
knowledge of the filing or non-filing by his wife of any action or claim similar to
the petition for certiorari and prohibition given the notices and legal processes
involved in a legal proceeding involving real property. We also see no justifiable
reason why he may not lawfully undertake together with his wife to inform the
court of any similar action or proceeding which may be filed. If anybody may
repudiate the certification or undertaking for having been incorrectly made, it is
the wife who may conceivably do so.
In view of the circumstances of this case, namely, the property involved is a
conjugal property, the petition questioning the writ of demolition thereof
originated from an action for recovery brought against the spouses, and is clearly
intended for the benefit of the conjugal partnership, and the wife, as pointed out
in the Motion for Reconsideration in respondent court, was in the province of
Guian, Samar, whereas the petition was prepared in Metro Manila, a rigid
application of the rules on forum shopping that would disauthorize a husbands
signing the certification in his behalf and that of his wife is too harsh and is clearly
uncalled for.
165.) ART FUENTEBELLA, Park-in-Charge, and ROLLING HILLS MEMORIAL
PARK, INC., vs. DARLICA CASTRO
G.R. No. 150865 June 30, 2006 | AZCUNA, J.:
This is a petition for review seeking the nullification of the resolutions of the CA.
FACTS: Respondent Darlica Castro engaged the funeral services of petitioner
Rolling Hills Memorial Park, Inc. in Bacolod City for the interment of the remains
of her husband.
During the burial, it was discovered that the dimensions of the vault did not
correspond to the measurements of the casket. As a result, the casket was lifted
and placed under the heat of the sun for about one hour in front of all the
mourners while the vault was being prepared. To make matters worse, the
employees of petitioner-corporation measured the casket by using a
spade/shovel.
Insulted by the events that transpired at the funeral, respondent wrote to the
management of petitioner corporation demanding an explanation for its
negligence, but the latter did not respond nor attempt to apologize to the former.
Respondent filed a complaint for damages against the corporation and its Park-
in-Charge Art Fuentebella, jointly and solidarily, before the MTCC of Bacolod City
asking for damages.
Petitioners filed a motion to dismiss on the ground that the MTCC has no
jurisdiction to take cognizance of the case because the amount of damages
exceeds its jurisdiction. Respondent subsequently filed a motion to withdraw the
complaint, which was granted by the MTCC.
Respondent filed a similar complaint with the RTC of Negros Occidental. Attached
in the complaint was the Verification and Certification against Forum Shopping
required.
Petitioners filed a motion to dismiss on the ground that the certification is false
because respondent had previously filed an identical complaint with the MTCC.
The trial court issued an order denying the motion to dismiss. Petitioners filed
with the CA a petition for certiorari. The petition, however, was dismissed.
A perusal of the records discloses that the verification and the certification
against forum shopping was signed by a certain Lourdes Pomperada without any
showing or indication that she is duly authorized by the petitioners to sign for
and in their behalf. Petitioners submitted a Secretary’s Certificate showing the
authorization of Mrs. Lourdes Pomperada to represent the petitioner
corporation. However, there is still no showing that the said Mrs. Lourdes
Pomperada is duly authorized to act for and in behalf of petitioner. Hence, this
petition.
ISSUE:
Whether the complaint should have been dismissed due to false certification
HELD:
Page 26 of 48
YES. It is obligatory that the one signing the verification and certification against
forum shopping on behalf of the principal party or the other petitioners has the
authority to do the same.
Hence, a certification which had been signed without the proper authorization is
defective and constitutes a valid cause for the dismissal of the petition.
This holds true in the present case where the Court of Appeals accordingly
dismissed the petition for lack of proper authorization of the one signing it on
behalf of petitioners.Lourdes Pomperada, the Administrative Manager of
petitioner corporation, who signed the verification and certificate on non-forum
shopping, initially failed to submit a secretary’s certificate or a board resolution
confirming her authority to sign for the corporation, and a special power of
attorney to sign on behalf of co-petitioner Art Fuentebella, who was sued jointly
and solidarily with the corporation in his capacity as officer of the latter.
Hence, in any event, the trial court correctly held that the submission of a false
certification shall constitute indirect contempt of court, without prejudice to the
corresponding administrative and criminal sanctions. This is in accordance with
Section 5, Rule 7 of the Rules of Court.
166.) SANTO TOMAS UNIVERSITY HOSPITAL, Vs. CESAR ANTONIO Y. SURLA
and EVANGELINE SURLA
G.R. No. 129718 August 17, 1998 | VITUG, J.:
FACTS:
Respondent spouses filed a complaint for damages against petitioner Santo
Tomas University Hospital with the RTC of Quezon City predicated on an
allegation by the spouses that their son, Emmanuel Cesar Surla, while confined at
the said hospital for having been born prematurely, had accidentally fallen from
his incubator possibly causing serious harm on the child.
Petitioner hospital filed its Answer with Compulsory Counterclaim asserting that
respondents still owed to it the amount of P82,632.10 representing hospital bills
for Emmanuels confinement at the hospital and making a claim for moral and
exemplary damages by reason of the supposed unfounded and malicious suit
filed against it.
Petitioner received a copy of respondents Reply to Counterclaim that sought for
the dismissal of petitioners counterclaim for its non-compliance with
Administrative Circular No. 04-94 requiring that a complaint and other initiatory
pleadings, such as a counterclaim, cross-claim, third (fourt, etc.) party complaint,
be accompanied with a certificate of non-forum shopping.
In its Rejoinder to respondents Reply to Counterclaim, petitioner contended that
the subject circular should be held to refer only to a permissive counterclaim, an
initiatory pleading not arising out of, nor necessarily connected with, the subject
matter of the plaintiffs claim but not to a compulsory counterclaim spawned by
the filing of a complaint and so intertwined therewith and logically related
thereto that it verily could not stand for independent adjudication.
The trial court dismissed petitioners counterclaim holding that the counterclaim
referred to in said Circular covers both kinds.
Petitioner forthwith elevated the matter to the CA which dismissed the petition
opining that a counterclaim partakes of the nature of a complaint and/or a cause
of action against the plaintiff in a case x x x, only this time it is the original
defendant who becomes the plaintiff. It stands on the same footing and is tested
by the same rules as if it were an independent action.
ISSUE: Whether a compulsory counterclaim pleaded in an Answer be dismissed
on the ground of a failure to accompany it with a certificate of non-forum
shopping
HELD: Partly meritorious. The complaint and other initiatory pleadings referred
to and subject of the Circular are the original civil complaint, counterclaim, cross-
claim, third (fourth, etc.) party complaint or complaint-in-intervention, petition,
or application wherein a party asserts his claim for relief.
It bears stressing that the real office of Administrative Circular No. 04-94 is to
curb the malpractice commonly referred to also as forum-shopping. The language
of the circular distinctly suggests that it is primarily intended to cover an
initiatory pleading or an incipient application of a party asserting a claim for
relief.
The circular in question has not been contemplated to include a kind of claim
which, by its very nature as being auxiliary to the proceedings in the suit and as
deriving its substantive and jurisdictional support therefrom, can only be
appropriately pleaded in the answer and not remain outstanding for independent
resolution except by the court where the main case pends. Prescinding from the
foregoing, the proviso in the second paragraph of Section 5, Rule 8 of the 1997
Rules on Civil Procedure, i.e., that the violation of the anti-forum shopping rule
shall not be curable by mere amendment x x x but shall be cause for the dismissal
of the case without prejudice, being predicated on the applicability of the need
for a certification against forum shopping, obviously does not include a claim
which cannot be independently set up.
Page 27 of 48
Petitioner, nevertheless, is entitled to a mere partial relief. The so called
counterclaim of petitioner really consists of two segregative parts: (1) for unpaid
hospital bills of respondents son, Emmanuel Surla, in the total amount
of P82,632.10; and (2) for damages, moral and exemplary, plus attorney’s fees by
reason of the alleged malicious and unfounded suit filed against it. It is the
second, not the first, claim that the Court here refers to as not being initiatory in
character and thereby not covered by the provisions of Administrative Circular
No. 04-94.
167.) CAGAYAN VALLEY DRUG CORPORATION Vs. COMMISSIONER OF
INTERNAL REVENUE
G.R. No. 151413 February 13, 2008
This petition for review under Rule 45 of the Rules of Court seeks to recall the
Resolution of CA.
FACTS:
Petitioner corporation, a duly licensed retailer of medicine and other
pharmaceutical products operating under the name and style of Mercury Drug
alleged that in 1995, it granted 20% sales discounts to qualified senior citizens
on purchases of medicine pursuant to Republic Act No. (RA) 7432 “Senior
Citizens Act”
Petitioner filed with the Bureau of Internal Revenue (BIR) a claim for tax
refund/tax credit of the full amount of the 20% sales discount it granted to senior
citizens for the year 1995, allegedly totaling to PhP 123,083 in accordance with
Sec. 4 of RA 7432.
The BIRs inaction on petitioners claim for refund/tax credit compelled petitioner
to file on March 18, 1998 a petition for review before the CTA in order to forestall
the two-year prescriptive period under the Tax Code
The CTA rendered a Decision dismissing the petition for review for lack of merit.
Aggrieved, petitioner elevated the matter before the CA. The CA issued the
assailed Resolution dismissing the petition on procedural grounds. The CA held
that the person who signed the verification and certification of absence of forum
shopping, a certain Jacinto J. Concepcion, President of petitioner, failed to adduce
proof that he was duly authorized by the board of directors to do so.
Hence, we have this petition.
ISSUE:
Whether or not the verification and certification of non-forum shopping signed
by the President of petitioner is sufficient compliance with Secs. 4 and 5, Rule 7
of the 1997 Rules of Civil Procedure
HELD:
It must be borne in mind that Sec. 23, in relation to Sec. 25 of the Corporation
Code, clearly enunciates that all corporate powers are exercised, all business
conducted, and all properties controlled by the board of directors. A corporation
has a separate and distinct personality from its directors and officers and can
only exercise its corporate powers through the board of directors. Thus, it is clear
that an individual corporate officer cannot solely exercise any corporate power
pertaining to the corporation without authority from the board of directors. This
has been our constant holding in cases instituted by a corporation.
In a slew of cases, however, we have recognized the authority of some corporate
officers to sign the verification and certification against forum shopping.
In Mactan-Cebu International Airport Authority v. CA, we recognized the
authority of a general manager or acting general manager to sign the verification
and certificate against forum shopping; in Pfizer v. Galan, we upheld the validity
of a verification signed by an employment specialist who had not even presented
any proof of her authority to represent the company; in Novelty Philippines, Inc.,
v. CA, we ruled that a personnel officer who signed the petition but did not attach
the authority from the company is authorized to sign the verification and non-
forum shopping certificate; and in Lepanto Consolidated Mining Company v.
WMC Resources International Pty. Ltd. (Lepanto), we ruled that the Chairperson
of the Board and President of the Company can sign the verification and
certificate against non-forum shopping even without the submission of the
boards authorization.
In sum, we have held that the following officials or employees of the company can
sign the verification and certification without need of a board resolution: (1) the
Chairperson of the Board of Directors, (2) the President of a corporation, (3) the
General Manager or Acting General Manager, (4) Personnel Officer, and (5) an
Employment Specialist in a labor case.
While the above cases do not provide a complete listing of authorized signatories
to the verification and certification required by the rules, the determination of
the sufficiency of the authority was done on a case to case basis. The rationale
applied in the foregoing cases is to justify the authority of corporate officers or
representatives of the corporation to sign the verification or certificate against
forum shopping, being in a position to verify the truthfulness and correctness of
the allegations in the petition.
Page 28 of 48
In the case at bar, we so hold that petitioner substantially complied with Secs. 4
and 5, Rule 7 of the 1997 Revised Rules on Civil Procedure. First, the requisite
board resolution has been submitted albeit belatedly by petitioner. Second, we
apply our ruling in Lepanto with the rationale that the President of petitioner is
in a position to verify the truthfulness and correctness of the allegations in the
petition. Third, the President of petitioner has signed the complaint before the
CTA at the inception of this judicial claim for refund or tax credit.
Consequently, the petition in CA-G.R. SP No. 59778 ought to be reinstated.
168.) FIDEL O. CHUA and FILIDEN REALTY AND DEVELOPMENT
CORPORATION Vs. METROPOLITAN BANK & TRUST COMPANY, ATTY.
ROMUALDO CELESTRA, ATTY. ANTONIO V. VIRAY, ATTY. RAMON MIRANDA
and ATTY. POMPEYO MAYNIGO
G.R. No. 182311 August 19, 2009
This is a Petition for Review on Certiorari under Rule 45 assailing the Decision of
CA.
FACTS:
Petitioner Chua is the president of co-petitioner Filiden Realty Development
Corporation. Petitioners obtained from respondent Metrobank a loan of P4, 000,
000, which was secured by a real estate mortgage (REM) on parcels of land
registered in petitioner Chuas name.
The lawyers of respondent Metrobank demanded that petitioners fully pay and
settle their liabilities. When petitioners still failed to pay their loans, respondent
Metrobank sought to extra-judicially foreclose the REM constituted on the
subject properties.
ISSUE:
Whether or not successively filing Civil Case No. CV-01-0207 and Civil Case No.
CV-05-0402 amounts to forum shopping
HELD:
YES. Forum shopping exists when a party repeatedly avails himself of several
judicial remedies in different courts, simultaneously or successively, all
substantially founded on the same transactions and the same essential facts and
circumstances, and all raising substantially the same issues either pending in or
already resolved adversely by some other court.
Ultimately, what is truly important in determining whether forum shopping
exists or not is the vexation caused the courts and party-litigant by a party who
asks different courts to rule on the same or related causes and/or to grant the
same or substantially the same reliefs, in the process creating the possibility of
conflicting decisions being rendered by the different fora upon the same issue.
Forum shopping can be committed in three ways: (1) filing multiple cases based
on the same cause of action and with the same prayer, the previous case not
having been resolved yet (where the ground for dismissal is litis pendentia); (2)
filing multiple cases based on the same cause of action and the same prayer, the
previous case having been finally resolved (where the ground for dismissal is res
judicata); and (3) filing multiple cases based on the same cause of action, but with
different prayers (splitting of causes of action, where the ground for dismissal is
also either litis pendentia or res judicata).
In the present case, there is no dispute that petitioners failed to state in the
Certificate of Non-Forum Shopping, attached to their Verified Complaint in Civil
Case No. CV-05-0402 before RTC-Branch 195, the existence of Civil Case No. CV-
01-0207 pending before RTC-Branch 258.
Petitioners committed forum shopping by filing multiple cases based on the same
cause of action, although with different prayers.
Forum shopping occurs although the actions seem to be different, when it can be
seen that there is a splitting of a cause of action.
Petitioners would like to make it appear that Civil Case No. CV-01-0207 was
solely concerned with the nullification of the auction sale and certification of sale,
while Civil Case No. CV-05-0402 was a totally separate claim for damages. Yet, a
review of the records reveals that petitioners also included an explicit claim for
damages in their Amended Complaint
Petitioners committed forum shopping by filing multiple cases based on the same
cause of action, although with different prayers.
The Court observes that the damages being claimed by petitioners in their
Complaint in Civil Case No. CV-05-0402 were also occasioned by the supposedly
fictitious foreclosure sale.
If the forum shopping is not considered willful and deliberate, the subsequent
case shall be dismissed without prejudice, on the ground of either litis
pendentia or res judicata. However, if the forum shopping is willful and
deliberate, both (or all, if there are more than two) actions shall be
dismissed with prejudice. In this case, petitioners did not deliberately file Civil
Case No. CV-05-0402 for the purpose of seeking a favorable decision in another
forum. Otherwise, they would not have moved for the consolidation of both
cases. Thus, only Civil Case No. CV-05-0402 is dismissed and the hearing of Civil
Case No. CV-01-0207 before RTC-Branch 258 will be continued.
Page 29 of 48
169.) ABOITIZ EQUITY VENTURES, INC. Vs. VICTOR S. CHIONGBIAN,
BENJAMIN D. GOTHONG, and CARLOS A. GOTHONG LINES, INC. (CAGLI)
G.R. No.197530 July 9, 2014
This is a petition for review on certiorari assailing the decision of RTC.
FACTS:
Aboitiz Shipping Corporation ("ASC"), principally owned by the Aboitiz family,
CAGLI, principally owned by the Gothong family, and William Lines, Inc. ("WLI"),
principally owned by the Chiongbian family, entered into an agreement (the
"Agreement"), whereby ASC and CAGLI would transfer their shipping assets to
WLI in exchange for WLI’s shares of stock. WLI, in turn, would run their merged
shipping businesses and, henceforth, be known as WG&A, Inc. ("WG&A").
The Agreement required all disputes arising out of or in connection with the
Agreement to be settled by arbitration.
CAGLI gave more than what was stipulated, but the excess was returned. Later
on, claimed that the excess was not yet returned.
AEV acquired the shares of ASC and WLI and renamed the business to ATSC.
CAGLI filed applications for arbitration ("first complaint") against respondent
Chiongbian, ATSC, ASC, and petitioner AEV, before the Cebu City RTC for the
return of the excess inventories.
AEV filed a motion to dismiss arguing that CAGLI failed to state a cause of action
as there was no agreement to arbitrate between CAGLI and AEV. AEV pointed out
it AEV was never a party to the Agreement.
The Cebu City RTC issued an order dismissing the first complaint with respect to
AEV. It sustained AEV’s assertion that there was no agreement binding AEV and
CAGLI to arbitrate CAGLI’s claim.
The Cebu City RTC issued an order directing the parties remaining in the first
complaint (after the discharge of AEV) to proceed with arbitration.
CAGLI filed a notice of dismissal withdrawing the first complaint which the RTC
allowed.
CAGLI, now joined by respondent Benjamin D. Gothong, filed a second application
for arbitration ("second complaint") before the Cebu City RTC.
AEV filed a motion to dismiss the second complaint on the following grounds: (1)
forum shopping; (2) failure to state a cause of action; (3) res judicata; and (4) litis
pendentia. Cebu City Regional Trial Court denied AEV's motion to dismiss.
Aggrieved, AEV filed the present petition.
ISSUE: Whether the complaint in Civil Case No. CEB-37004 constitutes forum
shopping and/or is barred by res judicata and/or litis pendentia
HELD: YES. The complaint in Civil Case
No. CEB-37004 constitutes forum shopping and is barred by res judicata.
To determine whether a party violated the rule against forum shopping, the most
important factor to ask is whether the elements of litis pendentia are present, or
whether a final judgment in one case will amount to res judicata in another;
otherwise stated, the test for determining forum shopping is whether in the two
(or more) cases pending, there is identity of parties, rights or causes of action,
and reliefs sought.
First, between the first and second complaints, there is identity of parties. The
first complaint was brought by CAGLI as the sole plaintiff against Victor S.
Chiongbian, ATSC, and AEV as defendants. In the second complaint, CAGLI was
joined by Benjamin D. Gothong as (co-)plaintiff. As to the defendants, ATSC was
deleted while Chiongbian and AEV were retained.
While it is true that the parties to the first and second complaints are not
absolutely identical, this court has clarified that, for purposes of forum shopping,
"[a]bsolute identity of parties is not required [and that it] is enough that there is
substantial identity of parties."
Second, there is identity in subject matter and cause of action. There is identity in
subject matter as both complaints are applications for the same relief. There is
identity in cause of action as both complaints are grounded on the right to be paid
for or to receive the value of excess inventories (and the supposed corresponding
breach thereof) as spelled out in Annex SL-V.
The first and second complaints are both applications for arbitration and are
founded on the same instrument — Annex SL-V. Moreover, the intended
arbitrations in both complaints cater to the same ultimate purpose, i.e., that
CAGLI may recover the value of its supposedly unreturned inventories earlier
delivered to WLI/WG&A/ATSC.
Third, the order dated December 4, 2009 of the Cebu City Regional Trial Court,
Branch 20, which dismissed the first complaint with respect to AEV, attained
finality when CAGLI did not file a motion for reconsideration, appealed, or, in any
other manner, questioned the order.
Fourth, the parties did not dispute that the December 4, 2009 order was issued
by a court having jurisdiction over the subject matter and the parties. Specifically
Page 30 of 48
as to jurisdiction over the parties, jurisdiction was acquired over CAGLI as
plaintiff when it filed the first complaint and sought relief from the Cebu City
Regional Trial Court, Branch 20; jurisdiction over defendants AEV, ATSC, and
Victor S. Chiongbian was acquired with the service of summons upon them. Fifth,
the dismissal of the first complaint with respect to AEV was a judgment on the
merits. As explained in Cabreza, Jr. v. Cabreza: A judgment may be considered as
one rendered on the merits "when it determines the rights and liabilities of the
parties based on the disclosed facts, irrespective of formal, technical or dilatory
objections"; or when the judgment is rendered "after a determination of which
party is right, as distinguished from a judgment rendered upon some preliminary
or formal or merely technical point."
In sum, the requisites for res judicata have been satisfied and the second
complaint should, thus, have been dismissed. From this, it follows that CAGLI
committed an act of forum shopping in filing the second complaint. CAGLI
instituted two suits in two regional trial court branches, albeit successively and
not simultaneously. It asked both branches to rule on the exact same cause and
to grant the exact same relief. CAGLI did so after it had obtained an unfavorable
decision (at least with respect to AEV) from the Cebu City Regional Trial Court,
Branch 20. These circumstances afford the reasonable inference that the second
complaint was filed in the hopes of a more favorable ruling.
Notwithstanding our pronouncements sustaining AEV’s allegations that CAGLI
engaged in forum shopping and that the second complaint was barred by res
judicata, we find that at the time of the filing of the second complaint, AEV had
already been discharged from the proceedings relating to the first complaint.
Thus, as between AEV and CAGLI, the first complaint was no longer pending at
the time of the filing of the second complaint. Accordingly, the second complaint
could not have been barred by litis pendentia.
170.) ZARSONA MEDICAL CLINIC Vs.
PHILIPPINE HEALTH INSURANCE CORPORATION
G.R. No. 191225; October 13, 2014
Before the Court is a petition for review on certiorari under Rule 45 of the Rules
of Court, questioning the Resolutions of the Court of Appeals.
FACTS:
A complaint was filed against petitioner Zarsona Medical Clinic (ZMC) for
violation of Section 149 of the Republic Act No. 7875 or the National Health
Insurance Act of 1995. Section 149 penalizes any health care provider that
increases the period of actual confinement of any patient with revocation of
accreditation.
ZMC filed a claim with the Philippine Health Insurance Corporation (Philhealth)
on the confinement of National Health Insurance Program (NHIP) member Lorna
M. Alestre (Alestre) on 10-12 August 2003. Said claim was denied on the ground
of "extended confinement." It was stated on the claim form that Alestre was
admitted to ZMC on 6 August 2003 and was discharged on 12 August 2003. It was
also revealed in her Salaysay3 dated 12 January 2004 that Alestre’s actual
confinement at ZMC was on 10-11 August 2003. Alestre, who is a teacher at Rizal
Elementary School, was found to have reported for work on 12 August 2003.
In defense of ZMC, Dr. Sylvia Bragat (Dr. Bragat), its Medical Director, stated that
ZMC’s Midwife/Clerk Jennifer R. Acuram (Acuram) committed an honest mistake
when she wrote 6-12 August 2003 as the confinement period in the claim form.
Dr. Bragat asserted that the hospital had in fact claimed only for two (2) days.
Acuram acknowledged her mistake in her Affidavit of Explanation.4
ZMC also presented an Affidavit of Explanation from Alestre recanting her
previous Salaysay. Alestre explained that the previous statement she gave does
not reflect the truth because she was protecting herself when she logged-in at the
school’s time record on 12 August 2003 when she was supposedly still confined
at ZMC. Alestre narrated that she and her son were admitted at ZMC on 10 August
2003 and was discharged on 12 August 2003. And that on 12 August 2003, she
managed to slip out of the hospital and report for work. She then went back to
ZMC to attend to her child and process her discharge papers. Dr. Ariel dela Cruz,
attending physician of Alestre, confirmed that the ordered Alestre’s discharge on
12 August 2003.6
The Philhealth Arbiter gave more evidentiary weight to the signature of Alestre
in the school’s attendance logbook which established the fact that she reported
for work on 12 August 2003.
ZMC was found liable for the charge of "Extending Period of Confinement" in
violation of R.A. No. 7875 and was meted the penalty of suspension from
participating in the NHIP for a period of three (3) months and a fine of
₱10,000.00.
ZMC appealed but the Philhealth Board of Directors (the Board) dismissed the
appeal and affirmed the Decision of the Philhealth Arbiter.
The Board noted that Alestre could not possibly be in ZMC and in the school at
the same time on 12 August 2003 while her son was still confined at the hospital.
Page 31 of 48
ZMC filed a petition for review with the Court of Appeals putting in the forefront
of its arguments Alestre’s Affidavit of Explanation. ZMC admitted to Alestre’s
recantation but in its defense, ZMC emphasized that the Affidavit, being notarized
and executed under oath, should weigh more than the Salaysay, which was not
so.
Acting on the petition, the Court of Appeals directed the petitioner to RECTIFY
within five (5) days from notice, the following deficiencies in its petition: (1)
failure to attach the Special Power of Attorney executed by the petitioner Zarsona
Medical Clinicin favor of Ma. Irene M. Hao, authorizing the latter to execute the
verification and certification of nonforum shopping; (2) failure of the petitioner
to attach the certified true copy of the assailed decision of the Board of Directors
of the Philippine Health Insurance Corporation as required under Rule 43,
Section 6(c) of the Revised Rules of Court; (3) failure of the petitioner’s counsel,
Atty. John Tracy F. Cagas, to indicate the dates and places of issuance of his IBP
and PTR Receipts as well as his Roll of Attorneys Number.
Further action on the petition is held in abeyance pending the petitioner’s
compliance on these matters.8
ZMC filed its Compliance, but the he Court of Appeals dismissed the petition for
failure on the part of ZMC to attach a valid SPA. The appellate court found the SPA
defective on the ground that it does not explicitly authorize Dr. Bragat to sign and
execute the required verification and certification of nonforum shopping in this
case.
ZMC moved for reconsideration but it was denied for lack of merit. Hence, this
petition for review.
ISSUE:
Whether the SPA is sufficient to authorize Dr. Bragat to sign the verification and
certification of non-forum shopping in the petition filed before the Court of
Appeals.
RULING:
Yes. As to certification against forum shopping, non-compliance therewith or a
defect therein, unlike in verification, is generally not curable by its subsequent
submission or correction thereof, unless there is a need to relax the Rule on the
ground of "substantial compliance" or presence of "special circumstances or
compelling reasons." Rule 7, Section 5 of the Rules of the Court, requires that the
certification should be signed by the "petitioner or principal party" himself. The
rationale behind this is "because only the petitioner himself has actual knowledge
of whether or not he has initiated similar actions or proceedings indifferent
courts or agencies."13
In this case, Philhealth found the SPA defective. The defects in the SPA
notwithstanding, we rule in favor of ZMC. Time and again, we had espoused the
doctrine that provisions of the Rules of Court should be liberally construed in
order to promote their objective of securing a just, speedy and inexpensive
disposition of every action and proceeding. Otherwise put, the rule requiring a
certification of forum shopping to accompany every initiatory pleading, or the
verification for that matter "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."17 While it is true that the rules of procedure are intended to promote
rather than frustrate the ends of justice, and the swift unclogging of court docket
is a laudable objective, it nevertheless must not be met at the expense of
substantial justice. This Court has time and again reiterated the doctrine that the
rules of procedure are mere tools aimed at facilitating the attainment of justice,
rather than its frustration. A strict and rigid application of the rules must always
be eschewed when it would subvert the primary objective of the rules, that is, to
enhance fair trials and expedite justice. Technicalities should never be used to
defeat the substantive rights of the other party. Every party-litigant must be
affordedthe amplest opportunity for the proper and just determination of his
cause, free from the constraints of technicalities.18
We choose to apply liberality becauseof the substantial merit of the petition.
Based on the foregoing, we reverse the finding of Philhealth and hold that ZMC is
not guilty of extending the period of confinement.
WHEREFORE, the petition is GRANTED. The Resolution of the Court or Appeals
in CA-G.R. SP No. 02489-MIN dismissing the petition is REVERSED and SET
ASIDE. Philhcalth Board Resolution No. 1151, Series or 2008 is SET ASIDE.
171.) METROPOLITAN BANK & TRUST COMPANY Vs. HON. SALVADOR
ABAD SANTOS RTC, Br. 65
G.R. No. 157867; December 15, 2009
This petition for review on certiorari, seeks to reverse and set aside the decision
and subsequent ruling on motion for reconsideration of the Court of Appeals
FACTS:
Page 32 of 48
 Respondent Manfred Jacob De Koning (De Koning) obtained a loan from
Metrobank. To secure the payment of this loan, De Koning executed a real estate
mortgage (REM) in favor of Metrobank over a condominium unit and all its
improvements.
When De Koning failed to pay his loan despite demand, Metrobank instituted
extrajudicial foreclosure proceedings against the REM. Metrobank was the
highest bidder at the public auction of the condominium unit and a Certificate of
Sale was issued in the bank's favor. Metrobank duly registered this Certificate of
Sale with the Registry of Deeds for Makati City.
De Koning failed redeem the property. Thus, Metrobank demanded that he turn
over possession of the condominium unit. When De Koning refused, Metrobank
filed with the RTC Makati, Branch 65, an ex parte petition for a writ of possession
over the foreclosed property.
The lower court issued an order setting the ex parte hearing of Metrobanks
petition and directing that a copy of the order be given to De Koning to inform
him of the existence of the proceedings.
During the scheduled ex parte hearing, De Koning’s counsel appeared and
manifested that he filed a motion to dismiss on the ground that Metrobanks
petition violated Section 5, Rule 7 of the Rules of Court (Rules) which requires the
attachment of a certification against forum shopping to a complaint or other
initiatory pleading.
The RTC agreed with De Koning and dismissed Metrobanks. The lower court
denied Metrobanks motion for reconsideration. Metrobank thus elevated the
matter to the CA on a petition for certiorari.
The CA affirmed the dismissal of Metrobanks ptition. It explained that Section 5,
Rule 7 of the Rules is not limited to actions, but covers any initiatory pleading that
asserts a claim for relief. Since Metrobanks petition for writ of possession is an
initiatory pleading, it must perforce be covered by this rule. Thus, Metrobanks
failure to disclose in the verification and certification the existence of the two
cases filed by De Koning, involving the issue of Metrobanks right to foreclose on
the property, rendered the petition dismissible.
The CA denied Metrobanks subsequent motion for reconsideration. Hence, this
petition for review on certiorari.
ISSUE:
Whether or not a petition for a writ of possession requires a certificate against
non-forum shopping
RULING:
No. In Sps. Arquiza v. CA, where we said:
The certification against forum shopping is required only in a complaint or
other initiatory pleading. The ex parte petition for the issuance of a writ of
possession filed by the respondent is not an initiatory pleading. Although
the private respondent denominated its pleading as a petition, it is, nonetheless,
a motion. What distinguishes a motion from a petition or other pleading is not
its form or the title given by the party executing it, but rather its purpose. The
office of a motion is not to initiate new litigation, but to bring a material but
incidental matter arising in the progress of the case in which the motion is filed. A
motion is not an independent right or remedy, but is confined to incidental
matters in the progress of a cause. It relates to some question that is collateral to
the main object of the action and is connected with and dependent upon the
principal remedy. An application for a writ of possession is a mere incident in the
registration proceeding. Hence, although it was denominated as a petition, it was
in substance merely a motion. Thus, the CA correctly made the following
observations:
Such petition for the issuance of a writ of possession is filed in the form of an ex
parte motion, inter alia, in the registration or cadastral proceedings if the
property is registered. Apropos, as an incident or consequence of the original
registration or cadastral proceedings, the motion or petition for the issuance of a
writ of possession, not being an initiatory pleading, dispels the requirement of a
forum-shopping certification. Axiomatic is that the petitioner need not file a
certification of non-forum shopping since his claims are not initiatory in
character (Ponciano vs. Parentela, Jr., 331 SCRA 605 [2000])
Since a petition for a writ of possession under Section 7 of Act No. 3135, as
amended, is neither a complaint nor an initiatory pleading, a certificate against
non-forum shopping is not required. The certificate that Metrobank attached to
its petition is thus a superfluity that the lower court should have disregarded.
WHEREFORE, premises considered, we GRANT the petition. The Decision of the
Court of Appeals in CA-G.R. SP No. 62325 dated November 21, 2002, as well as
the orders of the Regional Trial Court of Makati City, Branch 65 in LRC Case No.
M-4068 dated September 18, 2000 and October 23, 2000, is REVERSED and SET
ASIDE. LRC Case No. M-4068 is ordered remanded to the Regional Trial Court of
Page 33 of 48
Makati City, Branch 65, for further proceedings and proper disposition. Costs
against respondent Manfred Jacob De Koning.
172.) Senator Leila De Lima vs. HON. JUANITA GUERRERO, in her capacity
as Presiding Judge, Regional Trial Court of Muntinlupa City, Branch 204,
PEOPLE OF THE PHILIPPINES, P/DIR. GEN. RONALD M. DELA ROSA, in his
capacity as Chief of the Philippine National Police, PSUPT. PHILIP GIL M.
PHILIPPS, in his capacity as Director, Headquarters Support Service, SUPT.
ARNEL JAMANDRON APUD, in his capacity as Chief, PNP Custodial Service
Unit, and ALL PERSONS ACTING UNDER THEIR CONTROL, SUPERVISION,
INSTRUCTION OR DIRECTION IN RELATION TO THE ORDERS THAT MAY BE
ISSUED BY THE COURT, G.R. No. 229781, October 10, 2017, Velasco, Jr. J.
Facts: This is a petition for certiorari and prohibition. The Congress conducted
several inquiries on the proliferation of dangerous drugs syndicated at the New
Bilibid Prison. Pursuant to DOJ D.O. No. 790 the four cases were consolidated and
the Panel Prosecutors, was directed to conduct the requisite preliminary
investigation. De Lima filed an Omnibus Motion to Immediately Endorse the
Cases to the Office of the Ombudsman and for the Inhibition of the Panel of
Prosecutors and the Secretary of Justice ("Omnibus Motion"). It argued that the
Ombudsman has the exclusive authority and jurisdiction to hear the complaints
and that there is evident partiality on the part of the DOJ Panel. It was denied. The
petition for certiorari and prohibition assailing the jurisdiction of the DOJ Panel
over the complaints against her is still pending.
Meanwhile the DOJ Panel, absent any restraining order from the CA, proceeded
with the conduct of the preliminary investigation and, as a result, recommended
the filing of three (3) Informations against De Lima. One of the Informations was
docketed as Criminal Case No. 17-16518 and raffled off to Branch 204, presided
by respondent judge. This Information charging petitioner for violation of Section
5 in relation to Section (jj), Section 26(b), and Section 28 of Republic Act No. (RA)
9165. Petitioner filed a MQ raising the following grounds: the RTC lacks
jurisdiction over the offense charged against petitioner; the DOJ Panel lacks
authority to file the Information; the Information charges more than one offense;
the allegations and the recitals of facts do not allege the corpus delicti of the
charge; the Information is based on testimonies of witnesses who are not
qualified to be discharged as state witnesses; and the testimonies of these
witnesses are hearsay.
Respondent Judge after finding probable cause issued a warrant of arrest,
without no recommendation for bail against De Lima. PNP Investigation and
Detection Group served the Warrant of Arrest committing the petitioner to the
custody of PNP Custodial Center.
On February 27, 2017, petitioner repaired to this court via the present petition,
praying for the following reliefs:
a. Granting a writ of certiorari annulling and setting aside the Order dated 23
February 2017, the Warrant of Arrest dated the same date, and the Order dated
24 February 2017 of the Regional Trial Court - Branch 204, Muntinlupa City, in
Criminal Case No. 17-165 entitled People of the Philippines versus Leila M De
Lima, et al.;
b. Granting a writ of prohibition enjoining and prohibiting respondent judge from
conducting further proceedings until and unless the Motion to Quash is resolved
with finality;
c. Issuing an order granting the application for the issuance of temporary
restraining order (TRO) and a writ of preliminary injunction to the proceedings;
and
d. Issuing a Status Quo Ante Order restoring the parties to the status prior to the
issuance of the Order and Warrant of Arrest, both dated February 23, 201 7,
thereby recalling both processes and restoring petitioner to her liberty and
freedom.
OSG interposed the petition. The OSG argued that the petition should be
dismissed as De Lima failed to show that she has no other plain, speedy, and
adequate remedy. Further, the OSG posited that the petitioner did not observe
the hierarchy of courts and violated the rule against forum shopping. On
substantive grounds, the OSG asserted inter alia that the RTC has jurisdiction
over the offense charged against the petitioner, that the respondent judge
observed the constitutional and procedural rules, and so did not commit grave
abuse of discretion, in the issuance of the assailed orders and warrant
In the meantime, the OSG filed a Manifestation dated March 13, 2017, claiming
that petitioner falsified the juratsappearing in the: (1) Verification and
Certification against Forum Shopping page of her petition; and (2) Affidavit of
Merit in support of her prayer for injunctive relief.
Issue: WON petitioner, in filing the present petition, violated the rule against
forum shopping given the pendency of the Motion to Quash the Information
before the Regional Trial Court of Muntinlupa City in Criminal Case No. 17-165
Page 34 of 48
and the Petition for Certiorari filed before the Court of Appeals in C.A. G.R. SP No.
149097, assailing the preliminary investigation conducted by the DOJ Panel.
Decision:
Yes. The test to determine the existence of forum shopping is whether the
elements of litis pendentia, or whether a final judgment in one case amounts to
res judicata in the other. Forum shopping therefore exists when the following
elements are present: (a) identity of parties, or at least such parties representing
the same interests in both actions; (b) identity of rights asserted and reliefs
prayed for, the relief being founded on the same facts; and (c) the identity of the
two preceding particulars, 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 presence of the first requisite is at once apparent. The petitioner is an
accused in the criminal case below, while the respondents in this case, all
represented by the Solicitor General, have substantial identity with the
complainant in the criminal case still pending before the trial court.
As for the second requisite, even a cursory reading of the petition and the Motion
to Quash will reveal that the arguments and the reliefs prayed for are essentially
the same. In both, petitioner advances the RTC's supposed lack of jurisdiction
over the offense, the alleged multiplicity of offenses included in the Information;
the purported lack of the corpus delicti of the charge, and, basically, the non-
existence of probable cause to indict her. And, removed of all non-essentials, she
essentially prays for the same thing in both the present petition and the Motion
to Quash: the nullification of the Information and her restoration to liberty and
freedom.
With the presence of the first two requisites, the third one necessarily obtains in
the present case. Should we grant the petition and declare the RTC without
jurisdiction over the offense, the RTC is bound to grant De Lima's Motion to Quash
in deference to this Court's authority. In the alternative, if the trial court rules on
the Motion to Quash in the interim, the instant petition will be rendered moot and
academic. On the ground of forum shopping alone, the petition merits immediate
dismissal.
WHEREFORE, the instant petition for prohibition and certiorari is DISMISSED for
lack of merit. The Regional Trial Court of Muntinlupa City, Branch 204 is ordered
to proceed with dispatch with Criminal Case N6.17-165.
RULE 8: MANNER OF MAKING ALLEGATIONS IN A PLEADING
173.) 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
Petition for review on certiorari
FACTS:
Bpi field a complaint against Go Tong Electrical and its President (George Go)
seeking the latter be held jointly and severally for the payment of their loan
obligation in the aggregate amount of ₱87,086,398.71. Go Tong Electrical had
applied for and was granted financial assistance by the then Bank of South East
Asia (BSA). Subsequently, DBS7 Bank of the Philippines, Inc. (DBS) became the
successor in interest of BSA. The application for financial assistance was renewed
on January 6, 1999 through a Credit Agreement. Go Tong Electrical executed
Promissory Note which indicated that Go Tong Electrical bound itself to pay a
default penalty interest at the rate of one percent (1%) per month in addition to
the current interest rate,11 as well as attorney’s fees equivalent to twenty-five
percent (25%) of the amount sought to be recovered. Gio also executed a
Comprehensive Surety Agreement13 (CSA) covering any and all obligations
undertaken by Go Tong Electrical.
In their answer with counterclaim, petitioners merely stated that they
"specifically deny" 19 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. By
way of special and affirmative defenses, petitioners argued, among others, that:
(a) the real party-in-interest should be DBS and not respondent; (b) no demand
was made upon them; and (c) Go cannot be held liable under the CSA since there
was supposedly no solidarity of debtors.
During trial, respondent presented Ricardo 0. Suñio23 (Suñio ), the Account
Officer handling petitioners' loan accounts, as its witness. Sunio attested to the
existence of petitioners' loan obligation in favor of respondent. On cross-
examination, Suñio nonetheless admitted that he had no knowledge of how the
PN was prepared, executed, and signed, nor did he witness its signing. For their
part, petitioners presented Go Tong Electrical's Finance Officer, Jocelyn
Page 35 of 48
Antonette Lim, who testified that Go Tong Electrical was able to pay its loan,
albeit partially.
RTC ruled in favor of the respondent thereby ordering petitioners to jointly and
severally pay the former. It found that respondent had amply demonstrated by
competent evidence that it was entitled to the reliefs it prayed for. Particularly,
respondent's documentary evidence - the authenticity of which the RTC observed
to be undisputed - showed the existence of petitioners' valid and demandable
obligation.
Unconvinced, petitioners appealed35 to the CA. CA sustained the RTC's ruling in
toto. CA discredited petitioners' argument that respondent's sole witness, Suñio,
was incompetent to testify on the documentary evidence presented as he had no
personal knowledge of the loan documents' execution,38 given that petitioners, in
their Answer, did not deny under oath the genuineness and due execution of the
PN and CSA and, hence, are deemed admitted under Section 8, Rule 8 of the Rules
of Court (Rules).
After having been denied of their motion for reconsideration, the petitioners
elevated the case to the Supreme Court.
ISSUE:
Whether 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 of Court.
RULING:
Yes, the genuineness and due execution of the loan documents in this case were
deemed admitted by petitioners.
Sec. 8, Rule of the ROC 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,"44 does not
constitute an effective specific denial as contemplated by law.45Verily, 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."46 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."
In an earlier case, the SC has expounded on how to deny the genuineness and due
execution of an actionable document. The defendant must declare under oath
that he did not sign the document or that it is otherwise false or fabricated.
Neither does the statement of the answer to the effect that the instrument was
procured by fraudulent representation raise any issue as to its genuineness or
due execution. On the contrary such a plea is an- admission both of the
genuineness and due execution thereof, since it seeks to avoid the instrument
upon a ground not affecting either. To add, Section 8, Rule 8 of the Rules further
requires that the defendant "sets forth what he claims to be the facts," which
requirement, likewise, remains absent from the Answer in this case.
Thus, with said pleading failing to comply with the "specific denial under oath"
requirement under Section 8, Rule 8 of the Rules, the proper conclusion, as
arrived at by the CA, is that petitioners had impliedly admitted the due execution
and genuineness of the documents evidencing their loan obligation to
respondent.
174.) Concepcion V. Vda. De Daffon, Petitioner, Vs. The Honorable Court Of
Appeals
G.R. No. 129017. August 20, 2002
FACTS:
Concepcion Villamor was married to the late Amado Daffon, with whom she begot
one son, Joselito Daffon. Joselito married Lourdes Osmea, and they bore six
children, namely, Aileen, Joselito Jr., Ana Vanesa, Leila, Julius and Suzette.
Amado passed away on January 21, 1982. His son, Joselito, died on October 25,
1990.
On January 21, 1994, respondents Lourdes Osmea Vda. De Daffon, together with
her six minor children, instituted an action for partition against petitioner
Concepcion Villamor Vda. de Daffon before the RTC of Danao City. Respondents
alleged that Amado left several real and personal properties which formed part
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of his conjugal partnership. Joselito being a forced heir of Amado was entitled to
at least one half of Amados estate, consisting of his share in the said conjugal
properties. However, the said properties were never partitioned between
petitioner and Joselito. After Joselitos death, petitioners behavior towards
respondents, her daughter-in-law and grandchildren, changed. She claimed
absolute ownership over all the properties and deprived them of the fruits
thereof. Thus, respondents prayed that the conjugal properties of Amado Daffon
and petitioner be partitioned.
Petitioner filed a Motion to Dismiss on the grounds of (1) lack of jurisdiction over
the subject matter of the case; (2) failure of the complaint to state a cause of
action; and (3) waiver, abandonment and extinguishment of the obligation. She
argued that the trial court cannot take cognizance of the action for partition
considering her claim of absolute ownership over the properties; and that
respondents themselves admitted that petitioner has repudiated the co-
ownership.
RTC denied the Motion to Dismiss which prompted the petitioner to file a petition
for certiorari with CA. CA dismissed the petition. (No mention of CA’s
ratiocination). Petitioner then filed a petition for review before the Supreme
Court
ISSUE:
Whether CA gravely erred in not holding that the trial courts denial of petitioners
motion to dismiss the complaint based on failure to state a cause of action is
reviewable by the special civil action of certiorari.
RULING:
There is no merit in the petition.
It should be stressed that in the determination of whether a complaint fails to
state a cause of action, only the statements in the complaint may be properly
considered.[9]Moreover, a defendant who moves to dismiss the complaint on the
ground of lack of cause of action 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 the case at bar, the complaint sufficiently alleged that defendant (i.e., petitioner
herein) was married to Amado Quiros Daffon and that they begot an only son in
Joselito Daffon.[11]The complaint further alleged that Joselito Daffon later got
married to herein plaintiff Lourdes Osmea and before the former died on October
25, 1990 he sired the six (6) children who are now plaintiffs with their
mother.[12] This, to our mind, was sufficient allegation that Joselito Daffon was a
legitimate son of the spouses Amado and Concepcion Daffon; and that plaintiffs
(i.e., respondents herein) were likewise legitimate heirs of Joselito
Daffon. Admitting the truth of these averments, there was, therefore, no need to
inquire whether respondent minor children were duly acknowledged by the
deceased Amado Daffon. To be sure, the illegitimacy of the said children and the
lack of acknowledgment are matters which petitioner may raise as a defense in
her answer and threshed out by the court during a full-blown trial.
In the same vein, there is no need for the complaint to specifically allege
respondents claim of co-ownership of the properties. The complaint needs only
to allege the ultimate facts on which the plaintiffs rely for their claim (Rule 8,
Section 1).
175.) Segundino Toribio Vs. The Hon. Judge Abdulwahid A. Bidin
G.R. No. L-57821 January 17, 1985
FACTS:
Engracio Francisco and Juliana Esteban were the registered owners of the parcel
of land Zamboanga. At the death of said spouses, they were survived by their ten
(10) children who inherited their state in equal pro indiviso shares.
Subsequently, the property was subdivided among the heirs and a portion was
allotted to the Justa Francisco. Justa died and was survived among by eight (8)
children namely: Dionoso, Eufremia, Alfonso, Rafael, Petrona, Olegario,
Segundino and Eusebia, all surnamed Toribio.
Eufremia, Alfonso and Petrona, sold their in the property to Ramon Ledesma.
Rafael also sold his share to Dinisio who, in turn, sold the same to Ramon
Ledesma. Thus, the latter acquired four (4) shares out of eight (8) shares, or a ½
pro indiviso share.
Subsequently, Dionisio sold his own hereditary share in the aforesaid estate of
his mother to Juanito Camacho, who by said sale acquired a 1/8 pro indiviso
share of the property.
The three other heirs, petitioners SegundinoEusebia and Olegario alleging that
their shares had never been sold nor in any wise transferred or disposed to
others filed a case against herein private respondents for recovery of hereditary
rights. How Juanito Camacho, who was entitled to only a total area of 931 square
meters, nor, how one Dalmacio Ramos, Jr., acquired ¼ share of the property was
allegedly not known to them.
Page 37 of 48

In their answer, the defendants-respondents alleged that the shares of plaintiffs-
petitioners had likewise been sold to DionisioToribio, their brother, who, in turn,
sold the same to Juanito Camacho and Dalmacio Ramos. The alleged sale from
petitioners to Dionisio and the sale from Dionisio to the respondents were
evidenced by deeds of sale, xerox copies of which were appended to and made an
integral part of the respondents' partition agreement between the respondents
and also a xerox copy of the respondents' transfer certificates of title.
While testifying during the trial, EusebiaToribio was asked whether she executed
any sale of her share in the parcel of land in litigation. The counsel for private
respondents objected, raising the proper mode of contesting the genuineness of
an actionable document pursuant to Sections 7 and 8, Rule 8 of the Revised Rules
of Court. The trial court sustained the objection.
Petitioners, thereupon, filed a constancia with a motion for reconsideration
stating that the documents submitted by the respondents were merely
evidentiary in nature, not a cause of action or defense, the due execution and
genuineness of which they had to prove. They alleged that the subject of litigation
was the hereditary shares of plaintiffs-petitioners, not any document. They stated
that the defense consisting mainly of transfer certificates of titles in the
respondents' names originating from the sale from petitioners to Dionisio and
from the latter to the respondents were merely evidentiary in nature. They
argued that a simple specific denial without oath is sufficient. The court denied
the motion for reconsideration. The documents attached to the respondents'
answer and made an integral part thereof were declared to be the very
foundation or basis of the respondents' defense and not merely evidentiary in
nature.
Hence, this petition for review on certiorari.
ISSUE:
Whether or not the deeds of sale allegedly executed by the petitioners in favor of
their brother Dionisio Toribio and appended to the respondents' answer are
merely evidentiary in nature or the very foundation of their defense which must
be denied under oath by the petitioner.
RULING:
It is clear that the respondents anchor their defense on the deeds of sale by virtue
of which the hereditary rights of all the petitioners over Lot 1943-B were sold,
transferred, and conveyed in favor of their brother, DionisioToribio, who in turn
sold the same to herein respondents. The deed of sale executed by the petitioners
in favor of their brother Dionisio is an essential and indispensable part of their
defense to the allegation that the petitioners had never disposed of their
property.
The proper procedure was for the petitioners to specifically deny under oath the
genuineness and due execution of the questioned deeds of sale and to set forth
what they claim to be the facts. However, the oversight or negligence of
petitioners' counsel in not properly drafting a reply to the answer and an answer
to the counter claim is not necessarily fatal to their cause.
The complaint was verified under oath by the petitioners.
The petitioners' counsel was obviously lulled into complacency by two factors.
First, the plaintiffs, now petitioners, had already stated under oath that they
never sold, transferred, or disposed of their shares in the inheritance to others.
Second, the usual procedure is for a defendant to specifically deny under oath the
genuineness and due execution of documents set forth in and annexed to
the complaint. Somehow, it skipped counsel's attention that the rule refers to
either an action or a defense based upon a written instrument or document. It
applies to both plaintiffs and defendants.
Under the facts of this case, the private respondents were placed on adequate
notice by Paragraph 11 of the verified complaint that they would be caned upon
during trial to prove the genuineness or due execution of the disputed deeds of
sale.
Moreover, the heirs of Olegario Toribio, his widow and minor children
represented by their mother, are among the plaintiffs-petitioners. They are not
parties to the deeds of sale allegedly executed by their father, aunt, and uncle.
They are not required to deny the deeds of sale under oath. The private
respondents will still have to introduce evidence to establish that the deeds of
sale are genuine and that they were truly executed by the parties with authority
to dispose of the disputed property.
WHEREFORE, the order of the respondent court dated July 20, 1981 is hereby
REVERSED and SET ASIDE. The Regional Trial Court which took over the cases of
the respondent court is ordered to receive the petitioners' evidence regarding
the genuineness and due execution of the disputed deeds of sale.
176.) Basilia Bough And Gustavus Bough Vs.
Matilde Cantiveros And Presbitera Hanopol
G.R. No. 13300 September 29, 1919
Page 38 of 48
FACTS:
This action was begun in the Court of First Instance of Leyte, pursuant to a
complaint by means of which the plaintiffs Basilia Bough and Gustavus Bough
sought to have themselves put in possession of the property covered by the deed
of sale, and to require the defendant Matilde Cantiveros to pay the plaintiffs the
sum of five hundreds pesos by way of damages, and to pay the costs.
Matilde Cantiveros answered with a general denial and a special defense, not
sworn to, in which she asked that judgment be rendered declaring the contract
of sale theretofore made between herself and Basilia Bough null.
The plaintiffs, thereupon, denied under oath the genuineness and due execution
of the so-called donation intervivos set forth in the answer
Matilde Cantiveros is reputed to be the richest resident of the municipality of
Carigara, Leyte. In the latter part of the year 1913, she was the owner of various
parcels of realty of the value of thirty thousand pesos or more
On December 24, 1912, Matilde Cantiveros and her husband Jose Vasquez, signed
a marital contract of separation
At this time there lived with Matilde Cantiveros, Basilia Hanopol, a cousin and
protege since childhood, who was married to Gustavus Bough. For this reason,
Gustavus Bough was regarded by Matilde Cantiveros with great confidence, even
as her child.
Through the influence of Gustavus Bough, who brought a story to Matilde
Cantiveros that her husband Jose Vasquez was in town and might contest the
contract for the separation of the conjugal property, Matilde Cantiveros was
induced to sign a fictitious contract of sale of all her property to Basilia Bough.
This document, introduced in evidence as Exhibit A, was prepared in due from
and acknowledged before a notary public, the amount of the consideration, ten
thousand pesos, being last inserted with a pen. By this deed, Matilde Cantiveros
purported to convey sixty-three parcels of land, the real value of which was over
thirty thousand pesos, for ten thousand pesos, although no evidence that any
such sum ever passed between the parties was introduced, to her cousin, Basilia
Bough.
In order to reassure Matilde Cantiveros that they would not take advantage of the
fictitious sale, Gustavus Bough and Basilia Bough prepared and signed another
document, introduced in evidence as Exhibit 1, which is a donation by them to
Matilde Cantiveros of all the property mentioned in Exhibit A, to be effective in
case of the death of themselves and their children before the death of Matilde
Cantiveros.
The defendant, Matilde Cantiveros, has remained in possession of the property
After trial, judgment was rendered by the Honorable W. E. McMahon, judge of
first instance, in favor of the defendants, declaring the deed of sale, Exhibit A,
fictitious, null, and without effect, and absolving the defendants from the
complaint, with costs against the plaintiffs
It is from this judgment through the ordinary means of perfection of a bill of
exceptions that the case is brought to THE SUPREME COURT.
ISSUE:
Whether or not the failure to specifically deny the genuiness and the due
execution of the instruments is fatal to the defense of Matilde Cantiveros.
RULING:
The Supreme Court held that although the defendants did not deny the
genuineness and due execution of the contract of sale of December 9, 1913, under
oath, yet the defendants could properly set up the defenses of fraud and want of
consideration.
In this instance, the grantor, reposing faith in the integrity of the grantee, and
relying on a suggested occurrence, which did not in fact take place, was made the
dupe of the grantee, and led into an agreement against public policy. The party
asking to be relieved from the agreement which she was induced to enter into by
means of fraud, was thus in delicto, but not in pari delicto with the other party.
The deed was procured by misrepresentation and fraud sufficient to vitiate the
transaction. The rights of creditors are not affected. We feel that justice will be
done if we place the grantor in the position in which she was before these
transactions were entered into
177.) Hibberd Vs.. Rohde and McMillian
G.R. No. L-8418 December 9 1915
FACTS:
According to the testimony of the defendant Rohde, McMillian was in the retail
liquor business and secured a stock of merchandise valued at P1,200 from Brand
& Hibberd and sold it. Alleging that they delivered the merchandise to him on
deposit only, Brand & Hibberd filed a complaint of estafa against McMillian. In
order to protect his client, Rodhe agreed to sign a promissory note on the
Page 39 of 48
condition that Brand & Hibberd would withdraw the estafa complaint.
After the execution of the note, Brand & Hibberd moved in the justice court that
the estafa complaint be dismissed and this motion was granted by the presiding
justice. In the order dismissing the complaint, the justice stated that, from the
evidence introduced at the hearing he was convinced that there was no sufficient
basis for a criminal action, but that the controversy was of a civil character.
After defaulting on the payments, the petitioners filed a suit enforcing the
promissory note. Only Rohde appeared and answered but did not enter a denial
on the genuineness and the execution of the note. He only raised the special
defense of illegality of consideration. The trial court ruled in favor of Rohde, since
the consideration of the promissory note was the compromise of a public offense.
ISSUE:
Whether Rohde was barred from questioning the legality of the note due to not
having verified specific denial of the genuiness and due execution of the note.
RULING:
By the admission of the genuineness and due execution of an instrument, as the
term is used in section 103 of the Code of Civil Procedure, is meant 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. Hence, such defenses as that the signature is a forgery; or that it was
unauthorized, as In the case of an agent signing for his principal, or one signing:
in behalf of a partnership, or of a corporation; or that, in the case of the latter, that
the corporation was not authorized under its charter to sign the instrument; or
that the party charged signed the instrument in some other capacity than that
alleged in the pleading setting it out; or that it was never delivered; are cut off by
the admission of its genuineness and due execution. 

To interpret section 103 of the Code of Civil Procedure, according to the plaintiff
“as to prohibit such a defense as illegality of consideration” which is clearly a
defense of new matter, would pro tanto repeal the second paragraph of Sec. 94
which permits a defendant to answer by “A statement of any new matter
constituting a defense or counterclaim.”
178.) Jabalde v. PNB
G.R. No. L-18401 April 27, 1963
FACTS:
Jabalde seeks to recover the amount of P10,000 he allegedly deposited with the
Philippine National Bank (PNB) P5,000.00 in genuine Philippine currency on 21
July 1941 and another P5,000.00 on 30 August 1943 in mixed genuine Philippine
currency and Japanese military notes. The complaint recites the printed wording
of plaintiff's passbook, and allegedly reproduces page one thereof, reciting it to
be as follows:
Philippine National Bank
Manila, Philippines
in account with
July 21, 1941 P5,000.00
AUG. 30, 1943 5,000.00
The defendant's answer was not under oath. They admit the making of the
deposits but deny the dates of deposit. The bank alleges that the true dates were
21 July 1944 and 30 August 1944, and avers that the dates were knowingly and
unlawfully altered by Jabalde.
The CFI dismissed the case after finding that the date entries in the passbook
were tampered with. The years of both entries are obscured with a blot of black
ink.
Appellant insists that the dates of deposit were really 21 July 1941 and 30 August
1943, and were made in Philippine money and Japanese military notes,
respectively.
ISSUE:
Whether the bank's failure to deny under oath the entries in the passbook as
"copied" in the complaint constitutes an admission of the genuineness and due
execution of the document
RULING:
NO. Ordinarily, such failure is an admission. However, this rule cannot apply in
the present case because the plaintiff introduced evidence purporting to support
his allegations of deposit on the dates he wanted the court to believe, and offered
no objection during the trial to the testimonies of defendant's witnesses and
documentary evidence showing different dates of deposit. By these acts, the
Page 40 of 48
plaintiff waived the defendant's technical admission through failure to deny
under oath the genuineness and due execution of the document.
Where written instrument set forth in answer is not denied by affidavit, yet if
evidence in respect to that matter, and tending to show that instrument is not
genuine, or was not delivered, is introduced by plaintiff without objection on part
of defendant, or motion to strike out, and is met by counter-evidence on part of
defendant, the latter ought not to be permitted to claim that genuineness and due
execution of instrument are admitted.
179.) Mahilum vs. Ilano
GR No. 197923 June 22, 2015
FACTS:
Mahilum is the registered owner of a parcel of land. She entrusted the original
owner’s duplicate copy of the TCT to Perez – a purported real estate broker – who
will assist petitioner in obtaining a loan using the TCT as collateral.
After several months, petitioner demanded the return of the title, but Perez failed
to produce the same. Perez admitted that the title was lost. Thus, petitioner
executed an Affidavit of Loss.
Petitioner received a letter from the Registry of Deeds informing her that the
owner’s duplicate copy was not lost, but that it was presented to the registry by
respondents, spouses Ilano, who claimed that the property covered by the title
was sold to them.
Petitioner confronted respondents, who showed her a notarized Agreement and
undated Deed of Absolute Sale, on which documents petitioner’s purported
signatures were affixed. These documents indicate that petitioner sold the
property to respondents.
Petitioner told respondents that she did not execute these documents, and that
her purported signatures therein were in fact falsified and forged. She demanded
the return of the TCT, but respondents refused to surrender the title to her. They
claimed that the property was sold to them by Perez and "a companion."
Petitioner instituted against the respondents and Perez a complaint for
annulment of agreement and sale alleging that the document was falsified.
Respondent filed an Answer with Counterclaim raising as a defense that the
complaint failed to state a cause of action because no allegation that respondents
were purchasers in bad faith was made and that they bought the property from
Perez without notice of any defect in the title.
After petitioner presented its evidence, the respondents filed a demurrer to
evidence arguing that no allegation was made that they were purchasers in bad
faith.
The trial court denied the demurrer for lack of merit since during the pre-trial,
the issue of whether Spouses Ilano were buyers in good faith and for value was
submitted to the court. Being so, this can only be resolved upon presentation of
evidence by the parties.
Respondents went up to the CA via a Petition for Certiorari insisting that the
complaint failed to include an allegation that the respondents were purchasers in
bad faith thus, the complaint does not contain all the facts constituting plaintiff’s
cause of action. The CA set aside the decision of the trial court and agreed with
the respondents that complaint failed to allege bad faith in the complaint.
ISSUE:
Whether the failure to allege bad faith in the complaint is a fatal defect
considering that the subject documents were merely forged
RULING:
NO. The allegations in respondents’ pleadings reveal that they already knew
petitioner’s identity, having met her even before the filing of the complaint. Thus,
they should not have referred to the supposed seller as " another person herein
named as ‘Jane Doe’ whose identity is yet to be established who introduced
herself as Ruby Ruth Serrano" or "the person who introduced herself as Ruby
Ruth Serrano" if indeed it was petitioner herself who appeared and signed the
agreement and deed of sale in question. They should have categorically alleged
that they bought the property from petitioner herself if indeed this was so. Their
ambiguous allegations constitute a negative pregnant, which is in effect an
admission.
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.
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 circumstances alone are denied while the fact itself is admitted.
"If an allegation is not specifically denied or the denial is a negative pregnant, the
allegation is deemed admitted." "Where a fact is alleged with some qualifying or
Page 41 of 48
modifying language, and the denial is conjunctive, a 'negative pregnant' exists,
and only the qualification or modification is denied, while the fact itself is
admitted." "A denial in the form of a negative pregnant is an ambiguous pleading,
since it cannot be ascertained whether it is the fact or only the qualification that
is intended to be denied." "Profession of ignorance about a fact which is patently
and necessarily within the pleader's knowledge, or means of knowing as
ineffectual, is no denial at all.'
Finally, petitioner's complaint in Civil Case No. LP-07-0109 clearly states that in
the execution of the agreement and deed of absolute sale, respondents and Perez
acted in bad faith and connived in the forgery. Specifically, paragraph 18 of her
complaint states, as follows:
18. That by reason of the actuations of the defendants in facilitating the execution
of the aforesaid falsified documents, and adamant refusal to return to plaintiffs
the duplicate original owner's copy of their title, which were all done with evident
bad faith, the plaintiffs suffered and continue to suffer sleepless nights, wounded
feelings, besmirched reputation, serious anxiety and other similar feelings,
which, when quantified, can reasonably be compensated with the sum of Fifty
Thousand (₱50,000.00) Pesos, as moral damages.
Thus, the CA' s pronouncement - that nowhere in the complaint is it alleged that
respondents were purchasers in bad faith - is patently erroneous. The primary
ground for reversing the trial court's denial of respondents' demurrer is
therefore completely unfounded. Besides, the action itself, which is grounded on
forgery, necessarily presupposes the existence of bad faith.
180.) Titan Construction v. David
GR No. 169548 March 15, 2010
FACTS:
Spouses Manuel and Martha David acquired a lot located at White Plains, Quezon
City which was registered in the name of Martha. The spouses separated de facto,
and no longer communicated with each other.
Sometime later, Manuel discovered that Martha sold the property to Titan
Construction. Thus, Manuel filed a complaint for annulment of contract and
reconveyance against Titan before the RTC of Quezon City alleginig that the sale
executed was without his knowledge and consent.
Titan, in its Answer, claimed that it was a buyer in good faith and for value
because it relied on an SPA signed by Manuel which authorized Martha to dispose
of the property on behalf of the spouses.
Manuel, in his reply, claimed that the SPA was spurious and that the signature
was a forgery.
The RTC issued a decision invalidating the Deed of Sale and ordered Titan to
reconvey the property to Martha and Manuel. The CA affirmed the decision of the
trial court.
ISSUE:
Whether Manuel’s failure to specifically deny the genuineness and due execution
of the SPA in his reply is an admission of the veracity of the said document
RULING:
NO. While it is true that the reply of Manuel alleging that the SPA was forged was
not made under oath, the complaint, which was verified by Manuel under oath,
alleged that the sale was executed by the wife without his knowledge and
consent. In Toribio v. Bidin, it was held that where the verified complaint alleged
that the plaintiff never sold or disposed of the property, the defendants were
placed on adequate notice that they would be called upon during trial to prove
the genuineness and due execution of the disputed sale.While Section 8, rule 8 is
mandatory, it is a discovery procedure and must be reasonably construed to
attain its purpose, and in a way as not to effect a denial of substantial justice.
Moreover, during the pre-trial, Titan requested for stipulation that the special
power of attorney was signed by Manuel authorizing his wife to sell the subject
property, but Manuel refused to admit the genuineness of said special power of
attorney and stated that he is presenting an expert witness to prove that his
signature in the special power of attorney is a forgery. However, Titan did not
register any objection
While it is true that the SPA was notarized, it is no less true that there were
defects in the notarization which mitigate against a finding that the SPA was
either genuine or duly executed. Curiously, the details of Manuels Community Tax
Certificate are conspicuously absent, yet Marthas are complete. The absence of
Manuels data supports his claim that he did not execute the same and that his
signature thereon is a forgery. Moreover, we have Manuels positive testimony
that he never signed the SPA, in addition to the expert testimony that the
signature appearing on the SPA was not Manuels true signature.
The SPA purportedly signed by Manuel is spurious and void as correctly found by
the RTC which the CA affirmed.
The sale is void in the absence of Manuel’s consent since the property was part of
the conjugal partnership.
Page 42 of 48
181.) Consolidated Bank v. Del Monte Motor Works
July 29, 2005 GR No. 143338
FACTS:
Solidbank filed a complaint for recovery of sum of money against Del Monte
Motor Works before the RTC of Manila alleging that it extended a loan in favor of
respondents who bound themselves jointly and severally to pay under a
promissory note and that respondent defaulted on their payment. Petitioner
attached to its complaint as Annexes A, B, and C, respectively, a photocopy of the
promissory note supposedly executed by respondents, a copy of the demand
letter, and statement of account of respondent’s loan.
Respondent, in its answer, denied “generally and specifically the allegations
contained in paragraphs 3, 4, 5, 6, 7 and 8 thereof for lack of knowledge and
information sufficient to form a belief as to the truth of the matters therein
alleged” and that “the promissory note in question is void for want of valid
consideration as defendant herein did not receive any consideration at all.”
Petitioner made its formal offer of evidence. However, the original copy of Exhibit
A could no longer be found, instead, petitioner sought the admission of the
duplicate original of the promissory note. The trial court admitted it into
evidence.
Respondent insisted that the due execution and genuineness of the promissory
note were note established.
The trial court dismissed the case which the CA affirmed.
ISSUE:
Whether respondents were able to generally and specifically deny under oath the
genuineness and due execution of the promissory note
HELD:
NO. Respondent’s denial do not constitute an effective specific denial as
contemplated by law. In the early case of Songco vs. Sellner, the Court expounded
on how to deny the genuineness and due execution of an actionable
document, viz.:
. . . This means that the defendant must declare under oath that he did not sign
the document or that it is otherwise false or fabricated. Neither does the
statement of the answer to the effect that the instrument was procured by
fraudulent representation raise any issue as to its genuineness or due execution.
On the contrary such a plea is an admission both of the genuineness and due
execution thereof, since it seeks to avoid the instrument upon a ground not
affecting either.
This being the case, there was no need for petitioner to present the original of the
promissory note in question. Their judicial admission with respect to the
genuineness and execution of the promissory note sufficiently established their
liability to petitioner regardless of the fact that petitioner failed to present the
original of said note.
Indeed, when the defendant fails to deny specifically and under oath the due
execution and genuineness of a document copied in a complaint, the plaintiff need
not prove that fact as it is considered admitted by the defendant.
182.) Luistro v. CA
GR No. 158819 April 16, 2009
FACTS:
First Gas Power Corp. entered into an agreement with Meralco and Napocor
requiring the former to design and construct a power transmission line in
Batangas.
Pursuant to the agreement, First Gas entered into a contract of easement of right-
of-way with Antero Luistro.
Luistro’s counsel wrote First Gas for temporary stoppage of works that would
endanger the life and health of the person in the vicinity. The concern was
considered closed by NPC.
Luistro filed a complaint for rescission or modification of contract of easement
with damages against First Gas alleging that by means of fraud and machinations,
they were able to convince him to enter into the contract since they told him that
the transmission line was supposed to be 20 meters away from his house but was
only 7 meters directly underneath the transmission.
Respondent filed a motion to dismiss on the ground that petitioner failed to state
a cause of action in his complaint.
The trial court denied the motion. A petition to the CA was filed which set aside
the order of the trial court and ruled that it could not sustain the allegation of
fraud because petitioner failed to state with particularity the circumstances
constituting the alleged fraud.
ISSUE:
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Whether the complaint alleges fraud with particularity as required under Section
5, Rule 8
RULING:
NO. The complaint falls short of the requirement that fraud must be stated with
particularity. The complaint merely states:
“4. That sometime in the year of 1997, the consolidator-facilitator of the
Defendants FGPC and Balfour by means of fraud and machinations of words were
able to convince[] the plaintiff to enter into CONTRACT OF EASEMENT OF RIGHT
OF WAY wherein the latter granted in favor of the defendant FGPC the right to
erect [its] Tower No. 98 on the land of the plaintiff situated at Barangay Maigsing
Dahilig, Lemery 4209 Batangas including the right to Install Transmission Lines
over a portion of the same property for a consideration therein stated, a xerox
copy of said contract is hereto attached as [] ANNEXES A up to A-4 of the
complaint;
5. That the said contract, (Annexes A up to A-4) was entered into by the
plaintiff under the MISREPRESENTATION, PROMISES, FALSE AND FRAUDULENT
ASSURANCES AND TRICKS of the defendants[.]”
Not only did petitioner fail to allege with particularity the fraud allegedly
committed by respondent. A review of the Contract shows that its contents were
explained to petitioner.
There is clearly no basis for the allegation that petitioner only signed the Contract
because of fraud perpetrated by respondent.
183.) Capitol Motors Corporations Vs. Nemesio I. Yabut
G.R. No. L-28140 March 19, 1970
FACTS:
Capitol Motors Corporations filed a complaint against Nemesio I. Yabut. It was
therein averred that the defendant executed in favor of the plaintiff a promissory
note (copy of which was attached to the complaint) for the sum of P30,134.25,
payable in eighteen (18) equal monthly installments with interest at 12% per
annum, the first installment to become due on June 10, 1965, that it was
stipulated in the promissory note that should the defendant fail to pay two (2)
successive installments, the principal sum remaining unpaid would immediately
become due and demandable and the defendant would, by way of attorney's fees
and costs of collection, be obligated to the plaintiff for an additional sum
equivalent to 25% of the principal and interest due;
The sum remaining unpaid on the promissory note was P30,754.79, including
accrued interest; that the defendant defaulted in the payment of two (2)
successive installments, and likewise failed to pay the interest due on the
promissory note; and that in spite of demands by the plaintiff, the defendant
failed and refused to pay the said principal sum and interest due.
Prayer was made that the defendant be ordered to pay the plaintiff the sum of
P30,754.79, as well as the interest due thereon from February 23, 1966, and an
additional sum equivalent to 25% of the amount due, plus costs.
The plaintiff filed a motion for judgment on the pleadings, on the ground that the
defendant, not having set forth in his answer the substance of the matters relied
upon by him to support his denial, had failed to deny specifically the material
allegations of the complaint, hence, must be deemed to have admitted them
After hearing on the motion, the court issued an order granting the said motion
and considering the case submitted for decision on the basis of the pleadings; the
court rendered judgment granting in toto the plaintiff's prayer in its complaint.
In this appeal, defendant-appellant contends that the court a quo erred in
considering him as having failed to deny specifically the material allegations of
the complaint, and, consequently, in deciding the case on the basis of the
pleadings.
ISSUE:
Whether paragraph 2 of defendant-appellant's answer constitutes a specific
denial under Section 10, Rule 8
RULING:
NO. PREMISES CONSIDERED, the judgment appealed from is affirmed.
We do not think so. In Warner Barnes & Co., Ltd. vs. Reyes, et al, this Court said that
the rule authorizing an answer to the effect that the defendant has no knowledge
or information sufficient to form a belief as to the truth of an averment and giving
such answer the effect of a denial, does not apply where the fact as to which want
of knowledge is asserted, is so plainly and necessarily within the defendant's
knowledge that his averment of ignorance must be palpably untrue. In said case
the suit was one for foreclosure of mortgage, and a copy of the deed of mortgage
was attached to the complaint; thus, according to this Court, it would have been
easy for the defendants to specifically allege in their answer whether or not they
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had executed the alleged mortgage. The same thing can be said in the present
case, where a copy of the promissory note sued upon was attached to the
complaint.
With regard to the plea of lack of knowledge or information set up in paragraph 3
of the answer, this Court's decision in Warner Barnes vs. Reyes, 103 Phil. 662, 665,
is authority for the proposition that this form of denial must be availed of with
sincerity and good faith, not for the purpose of confusing the other party, nor for
purposes of delay. Yet, so lacking in sincerity and good faith is this part of the
answer that defendants-appellants go to the limit of denying knowledge or
information as to whether they (defendants) were in the premises (Marsman Bldg.)
on January 4, 1961, as averred in paragraph 4 of the complaint. Yet whether such a
fact was or was not true could not be unknown to these defendants.
It becomes evident from all the above doctrines that a mere allegation of
ignorance of the facts alleged in the complaint, is insufficient to raise an issue; the
defendant must aver positively or state how it is that he is ignorant of the facts so
alleged.
There are two other reasons why the present appeal must fail. First. The present
action is founded upon a written instrument attached to the complaint, but
defendant-appellant failed to deny under oath the genuineness and due
execution of the instrument; hence, the same are deemed admitted. (Section 8,
Rule 8 of the Revised Rules of Court) Second. Defendant-appellant did not oppose
the motion for judgment on the pleadings filed by plaintiff appellee; neither has
he filed a motion for reconsideration of the order of September 13, 1966, which
deemed the case submitted for decision on the pleadings, or of the decision
rendered on January 9, 1967.
184. ANTAM CONSOLIDATED VS CA
G.R. No. L-61523 July 31, 1986
FACTS:
On 9 April 1981, Stokely Van Camp. Inc. filed a complaint against Banahaw Milling
Corporation, Antam Consolidated,Inc., Tambunting Trading Corporation, Aurora
Consolidated Securities and Investment Corporation, and United CoconutOil
Mills, Inc. (Unicom) for collection of sum of money.
Stokely alleged the following in its complaint that it is a corporation organized
and existing under the laws of the state of Indiana, U.S.A.
Stokely and Capital City were not engaged in business in the Philippines prior to
the commencement of the suit so that Stokely is not licensed to do business in
this country and is not required to secure such license;
Capital City and Coconut Oil Manufacturing (Phil.) Inc. (Comphil) with the latter
acting through its broker Rothschild Brokerage Company, entered into a contract
wherein Comphil undertook to sell and deliver and Capital City agreed to buy 500
long tons of crude coconut oil to be delivered but Comphil failed to deliver the
coconut oil so that Capital City covered its coconut oil needs in the open market
at a price substantially in excess of the contract and sustained a loss of
US$103,600; that to settle Capital City's loss under the contract, the parties
entered into a second contract wherein Comphil undertook to buy and Capital
City agreed to sell 500 long tons of coconut crude oil under the same terms and
conditions but at an increased
The second contract states that "it is a wash out against RBS 3655" so that
Comphil was supposed to repurchase the undelivered coconut oil at US $0.3925
from Capital City by paying the latter the sum of US$103,600.00 which is the same
amount of loss that Capital City sustained under the first contract; that Comphil
again failed to pay said amount, so to settle Capital City's loss, it entered into a
third contract with Comphil wherein the latter undertook to sell and deliver and
Capital City agreed to buy the same quantity of crude coconut oil to be delivered
in April/May 1979 at the c.i.f. price of US$0.3425/lb.;
The latter price was 9.25 cents/lb. or US$103,600 for 500 long tons below the
then current market price of 43.2 cents/lb.and by delivering said quantity of
coconut oil to Capital City at the discounted price, Comphil was to have settled
itsUS$103,600 liability to Capital City;
Comphil failed to deliver the coconut oil so Capital City notified the former that it
was in default and Capital City sustained damages in the amount of US$175,0008.
After repeated demands from Comphil to pay the said amount, the latter still
refuses to pay the same.
Stokely further prayed that a writ of attachment be issued against any and all the
properties of Antam, et al. in an amountsufficient to satisfy any lien of judgment
that Stokely may obtain in its action.
After demands were made by respondent on Comphil, the Tambuntings ceased
to be directors and officers of Comphiland were replaced by their five employees,
who were managers of Tambunting's pawnshops and said employees causedthe
name of Comphil to be changed to "Banahaw Milling Corporation" and authorized
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one of the Tambuntings, Antonio P.Tambunting, Jr., who was at that time neither
a director nor officer of Banahaw to sell its oil mill
Unicom has taken over the entire operations and assets of Banahaw because the
entire and outstanding capital stock of the latter was sold to the former;
All of the issued and outstanding capital stock of Comphil are owned by the
Tambuntings who were the directors andofficers of Comphil and who were the
ones who benefited from the sale of Banahaw's assets or shares to Unicom;
All of the petitioners evaded their obligation to respondent by the devious
scheme of using Tambunting employees to replace the Tambuntings in the
management of Banahaw and disposing of the oil mill of Banahaw or their entire
interests to Unicom
Respondent has reasonable cause to believe and does believe that the coconut oil
mill, which is the only substantial asset of Banahaw is about to be sold or removed
so that unless prevented by the Court there will probably be no assets of Banahaw
to satisfy its claim.
The trial court ordered the issuance of a writ of attachment in favor of Stokely
upon the latter's deposit of a bond in the amount of P1,285,000.00.Stokely filed a
motion for reconsideration to reduce the attachment bond.
Antam, et al. filed a motion to dismiss the complaint on the ground that Stokely,
being a foreigncorporation not licensed to do business in the Philippines, has no
personality to maintain the suit.
Thereafter, the trial courtissued an order, dated 10 August 1981, reducing the
attachment bond to P500,000.00 and denying the motion to dismiss by Antam, et
al. on the ground that the reason cited therein does not appear to be indubitable.
Antam, et al. filed a petition for certiorari before the Intermediate Appellate
Court. The appellate court dismissed the petition. Antam, etal. filed a motion for
reconsideration but the same was denied
ISSUE:
WON Stokely, being a foreigncorporation not licensed to do business in the
Philippines, has no personality to maintain the suit.
RULING:
NO. As we have held in Eastboard Navigation Ltd. v. Juan Ysmael and Co., Inc.
(d) While plaintiff is a foreign corporation without license to transact
business in the Philippines, it does not follow that it has no capacity to
bring the present action. Such license is ' not necessary because it is not
engaged in business in the Philippines. In fact, the transaction herein
involved is the first business undertaken by plaintiff in the Philippines,
although on a previous occasion plaintiff's vessel was chartered by the
National Rice and Corn Corporation to carry rice cargo from abroad to the
Philippines. These two isolated transactions do not constitute engaging in
business in the Philippines within the purview of Sections 68 and 69 of the
Corporation Law so as to bar plaintiff from seeking redress in our courts
We agree with the respondent that it is a common ploy of defaulting local
companies which are sued by unlicensed foreign companies not engaged in
business in the Philippines to invoke lack of capacity to sue. The respondent cites
decisions from 1907 to 1957 recognizing and rejecting the improper use of this
procedural tactic. The doctrine of lack of capacity to sue based on failure to first
acquire a local license is based on considerations of sound public policy. It
intended to favor domestic corporations who enter was never into solitary
transactions with unwary foreign firms and then repudiate their obligations
simply because the latter are not licensed to do business in this country. The
petitioners in this case are engaged in the exportation of coconut oil, an export
item so vital in our country's economy. They filed this petition on the ground that
Stokely is an unlicensed foreign corporation without a bare allegation or showing
that their defenses in the collection case are valid and meritorious. We cannot
fault the two courts below for acting as they did.
185. STEELCASE INC. VS DESIGN INTERNATIONAL SELECTIONS .
G.R. No. 171995. April 18, 2012
FACTS:
Petitioner Steelcase, Inc. ("Steelcase") is a foreign corporation existing under the
laws of Michigan, United States of America (U.S.A.), and engaged in the
manufacture of office furniture with dealers worldwide. Respondent Design
International Selections, Inc. ("DISI") is a corporation existing under Philippine
Laws and engaged in the furniture business, including the distribution of
furniture.
Sometime in 1986 or 1987, Steelcase and DISI orally entered into a dealership
agreement whereby Steelcase granted DISI the right to market, sell, distribute,
install, and service its products to end-user customers within the Philippines. The
business relationship continued smoothly until it was terminated sometime in
January 1999 after the agreement was breached with neither party admitting any
fault. Steelcase filed a complaint for sum of money against DISI alleging, among
Page 46 of 48
others, that DISI had an unpaid account of US$600,000.00. Steelcase prayed that
DISI be ordered to pay actual or compensatory damages, exemplary damages,
attorney’s fees, and costs of suit. Among the counter-arguments raised, DISI
alleged that the complaint failed to state a cause of action and to contain the
required allegations on Steelcase’s capacity to sue in the Philippines despite the
fact that Steelcase was doing business in the Philippines without the required
license to do so. Consequently, it posited that the complaint should be dismissed
because of Steelcase’s lack of legal capacity to sue in Philippine courts.
The Regional Trial Court (RTC) dismissed the complaint and granted the
temporary restraining order prayed for by DISI. The RTC stated that in requiring
DISI to meet the Dealer Performance Expectation and in terminating the
dealership agreement with DISI based on its failure to improve its performance
in the areas of business planning, organizational structure, operational
effectiveness, and efficiency, Steelcase unwittingly revealed that it participated in
the operations of DISI. Despite a showing that DISI transacted with the local
customers in its own name and for its own account, the RTC stated that any doubt
in the factual environment should be resolved in favor of a pronouncement that
a foreign corporation was doing business in the Philippines, considering the
twelve-year period that DISI had been distributing Steelcase products in the
Philippines. The RTC concluded that Steelcase was "doing business" in the
Philippines, as contemplated by the Foreign Investments Act of 1991, and since
it did not have the license to do business in the country, it was barred from
seeking redress from our courts until it obtained the requisite license to do so.
Steelcase moved for the reconsideration of the dismissal but the same was
denied.
Aggrieved, Steelcase appealed the case to the Court of Appeals. The Court of
Appeals rendered its Decision affirming the RTC orders, ruling that Steelcase was
a foreign corporation doing or transacting business in the Philippines without a
license. Steelcase filed a motion for reconsideration but it was denied by the
Court of Appeals.
Steelcase filed a Petition for Review with the Supreme Court.
ISSUE:
Whether or not DISI is estopped from challenging the Steelcases legal capacity to
sue.
RULING:
YES. DISI is estopped
It cannot be denied that DISI entered into a dealership agreement with Steelcase
and profited from it for 12 years from 1987 until 1999. DISI admits that it
complied with its obligations under the dealership agreement by exerting more
effort and making substantial investments in the promotion of Steelcase
products. It also claims that it was able to establish a very good reputation and
goodwill for Steelcase and its products, resulting in the establishment and
development of a strong market for Steelcase products in the Philippines.
Because of this, DISI was very proud to be awarded the Steelcase International
Performance Award for meeting sales objectives, satisfying customer needs,
managing an effective company and making a profit.[21]
Unquestionably, entering into a dealership agreement with Steelcase charged
DISI with the knowledge that Steelcase was not licensed to engage in business
activities in the Philippines. This Court has carefully combed the records and
found no proof that, from the inception of the dealership agreement in 1986 until
September 1998, DISI even brought to Steelcases attention that it was improperly
doing business in the Philippines without a license. It was only towards the latter
part of 1998 that DISI deemed it necessary to inform Steelcase of the impropriety
of the conduct of its business without the requisite Philippine license. It should,
however, be noted that DISI only raised the issue of the absence of a license with
Steelcase after it was informed that it owed the latter US$600,000.00 for the sale
and delivery of its products under their special credit arrangement.
By acknowledging the corporate entity of Steelcase and entering into a dealership
agreement with it and even benefiting from it, DISI is estopped from questioning
Steelcases existence and capacity to sue.
Consistent with the Courts ruling in Communication Materials and Design, Inc. v.
Court of Appeals
A foreign corporation doing business in the Philippines may
sue in Philippine Courts although not authorized to do business here
against a Philippine citizen or entity who had contracted with and
benefited by said corporation. To put it in another way, a party is estopped
to challenge the personality of a corporation after having acknowledged
the same by entering into a contract with it. And the doctrine of estoppel
to deny corporate existence applies to a foreign as well as to domestic
corporations. One who has dealt with a corporation of foreign origin as a
corporate entity is estopped to deny its corporate existence and capacity:
The principle will be applied to prevent a person contracting with a foreign
corporation from later taking advantage of its noncompliance with the
statutes chiefly in cases where such person has received the benefits of the
contract.
Page 47 of 48
 The rule is deeply rooted in the time-honored axiom of
Commodum ex injuria sua non habere debet no person ought to
derive any advantage of his own wrong. This is as it should be
for as mandated by law, every person must in the exercise of his
rights and in the performance of his duties, act with justice, give
everyone his due, and observe honesty and good faith.

Rimbunan Hijau Group of Companies v. Oriental Wood Processing Corporation

The rule is that a party is estopped to challenge the personality of a corporation

after having acknowledged the same by entering into a contract with it. And the
doctrine of estoppel to deny corporate existence applies to foreign as well as to
domestic corporations; one who has dealt with a corporation of foreign origin as
a corporate entity is estopped to deny its existence and capacity. The principle
will be applied to prevent a person contracting with a foreign corporation from
later taking advantage of its noncompliance with the statutes, chiefly in cases
where such person has received the benefits of the contract.

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