ALEJANDRO BAYOG and JORGE PESAYCO, JR.

, petitioners,
vs.
HON. ANTONIO M. NATINO, Presiding Judge, Regional Trial Court, Branch 12, San Jose, Antique
and ALBERTO MAGDATO, respondents.

[DAVIDE, JR., J]

FACTS:

Alejandro Bayog filed with the Municipal Circuit Trial Court (MCTC) of Patnongon-Bugasong-Valderama,
Antique an ejectment case against Alberto Magdato, an agricultural tenant-lessee who had built a house
over his property. When Magdato, an illiterate farmer, received the Summons from the MCTC to file his
answer within 10 days, he was stricken with pulmonary tuberculosis and was able to consult a lawyer in
San Jose, Antique only after the reglementary period. Hence, when the Answer of Magdato was filed
three days after the lapse of the 10-day period, the MCTC ruled that it could no longer take cognizance
of his Answer and, hence, ordered his ejectment from Bayog’s land.

When his house was demolished in January 1994, Magdato filed a Petition for Relief with the RTC-San
Jose, Antique, claiming that he was a duly instituted tenant in the agricultural property, and that he was
deprived of due process. Bayog, the landowner, moved to dismiss the Petition on the ground of lack of
jurisdiction on the part of the RTC, since a petition for relief from judgment covering a summary
proceeding was a prohibited pleading. The RTC, however, denied his Motion to Dismiss and remanded
the case to the MCTC for proper disposal.

ISSUE:

Whether or not the MCTC acquired jurisdiction over the subject matter in this case?

RULING:

Yes, the MCTC has a jurisdiction in this case. MAGDATO should have been afforded a reasonable
period of time to remove his house, and only after he failed to comply within the given period could a
demolition order have been issued by the court, pursuant to Section 14, Rule 39 of the Rules of Court.

In addition, while it may be said that the MCTC correctly applied the Rule on Summary Procedure in
Civil Case No. 262 since BAYOG's complaint for ejectment therein suppressed the fact of an agrarian
relationship between him and MAGDATO, it should not have refrained from taking cognizance of
MAGDATO's Answer. Although filed late, the Answer asserted that the MCTC had no jurisdiction over
the case in light of the agricultural tenancy relationship between BAYOG and MAGDATO, which is
clearly evidenced by their Agricultural Leasehold Contract and the Certificate of Agricultural Leasehold
issued in MAGDATO's favor by then President Marcos. While this assertion, per se, did not
automatically divest the MCTC of its jurisdiction over the ejectment case, nevertheless, in view of
MAGDATO's defense, the MCTC should have heard and received the evidence for the precise
purpose of determining whether or not it possessed jurisdiction over the case. And upon such
hearing, if tenancy was shown to be at issue, the MCTC should have dismissed the case for lack of
jurisdiction. Verily, if indeed MAGDATO were an agricultural lessee under agrarian law, then the MCTC
was devoid of jurisdiction over the ejectment case.
The MCTC should have met and ruled squarely on the issue of jurisdiction, instead of simply adopting a
strange theory that it could not take cognizance of the answer belatedly filed without exceeding its
jurisdiction under Section 36 of B.P. Blg. 129. Plainly, there is nothing in the said section which bars the
MCTC from taking cognizance of the answer. There is nothing in the said section which bars the MCTC
from taking cognizance of the answer.

GEORGE KATON, petitioner, vs. MANUEL PALANCA JR., LORENZO AGUSTIN,

JESUS GAPILANGO and JUAN FRESNILLO, respondents.

[Panganiban, J.]

FACTS:

Petitioner Katon contends that the whole area known as Sombrero Island, located in Tagpait, Aborlan,
Palawan, had been classified from forest land to agricultural land and certified available for disposition
upon his request and at his instance. However, Palawan authorities then favorably endorsed the
request of Respondent Palanca, together with some others, which resulted in the issuance of
homestead patent in Palanca’s favor in 1977 among others. In 1999, filed a petition which seeks to
nullify the homestead patents and original certificates of title issued in favor of the Palanca et al. as well
as the reconveyance of the whole island in his favor. Palanca et al. filed their Answer and Motion to
Dismiss. The trial court dismissed Katon’s Complaint as well as his subsequent motion for
reconsideration.

Katon filed a petition for certiorari with the Court of Appeals (CA). The petition was dismissed motu
proprio pursuant to the appellate court’s residual prerogative. The CA ruled that prescription had already
barred the action for reconveyance, that:

(1) petitioners action was brought 24 years after the issuance of Palancas homestead patent.
(2) Respondents Fresnillo and Palanca had been occupying six hectares of the island since 1965, or 33
years before he took legal steps to assert his right to the property.

Katon questions this dismissal. He submits that the CA erroneously invoked its residual prerogatives
under Section 1 of Rule 9 of the Rules of Court when it motu proprio dismissed the Petition for lack of
jurisdiction and prescription. According to him, residual prerogative refers to the power that the trial
court, in the exercise of its original jurisdiction, may still validly exercise even after perfection of an
appeal. It follows that such powers are not possessed by an appellate court.

Issue:
Whether or not the Court of Appeals is correct in invoking its alleged residual prerogative under Section
1, Rule 9 of the 1997 Rules of Civil Procedure in resolving the Petition on an issue not raised in the
Petition?

Held:

Yes.
Under Section 1 of Rule 9 of the Rules of Court, defenses and objections not pleaded either in a
motion to dismiss or in the answer are deemed waived, except when (1) lack of jurisdiction over
the subject matter, (2) litis pendentia, (3) res judicata and (4) prescription are evident from the
pleadings or the evidence on record. In the four excepted instances, the court shall motu
proprio dismiss the claim or action.

The residual jurisdiction of trial courts is available at a stage in which the court is normally deemed to
have lost jurisdiction over the case or the subject matter involved in the appeal.This stage is reached
upon the perfection of the appeals by the parties or upon the approval of the records on appeal, but
prior to the transmittal of the original records or the records on appeal.

The order of dismissal was not one for the protection and preservation of the rights of the parties,
pending the disposition of the case on appeal. What the CA referred to as residual prerogatives were
the general residual powers of the courts to dismiss an action motu proprio upon the grounds mentioned
in Section 1 of Rule 9 of the Rules of Court and under authority of Section 2 of Rule 1 of the same rules.
In Aldovino v. Alunan, the Court has held that when the plaintiffs own complaint shows clearly that
the action has prescribed, such action may be dismissed even if the defense of prescription has not
been invoked by the defendant. What is essential only, to repeat, is that the facts demonstrating the
lapse of the prescriptive period be otherwise sufficiently and satisfactorily apparent on the record; either
in the averments of the plaintiff's complaint, or otherwise established by the evidence."

PHILIPPINE EXPORT AND FOREIGN LOAN GUARANTEE CORPORATION, petitioner-appellant,

vs.
PHILIPPINE INFRASTRUCTURES, INC., PHILIPPINE BRITISH ASSURANCE CO., INC., THE SOLID
GUARANTY, INC., B.F. HOMES, INC., PILAR DEVELOPMENT CORPORATION and TOMAS F.
AGUIRRE, respondents-appellees.

[AUSTRIA-MARTINEZ, J.]

FACTS:

The petitioner herein filed a collection of sum of money against herein respondents Philippine
Infrastructures, Inc. (PII for brevity), Philippine British Assurance Co., Inc. (PBAC), The Solid Guaranty,
Inc. (Solid), B.F. Homes, Inc. (BF Homes), Pilar Development Corporation (PDC) and Tomas B. Aguirre
(Aguirre). FOr the alleged refusal of the respondents herein to comply with their respective obligation.

Respondent BF Homes filed a Motion to Dismiss on the ground that it is undergoing rehabilitation
receivership in the Securities and Exchange Commission (SEC) and pursuant to P.D. 902-A, the trial
court has no jurisdiction to try the case. Respondent PII also filed a Motion to Dismiss on the ground
that the complaint states no cause of action since it does not allege that petitioner has suffered any
damage, loss or penalty because of the guarantees petitioner had extended for and on behalf of
respondent PII.

On February 19, 1992, petitioner filed a Motion to Amend Complaint to Conform to Evidence6 pursuant
to Section 5, Rule 10 of the Revised Rules of Court, seeking to amend Paragraph 17 and the pertinent
portion of the prayer in the complaint.
Judge Joselito J. Dela Rosa, issued the assailed Order dated December 7, 1992, dismissing the case
without prejudice on the ground of failure of the complaint to state a cause of action, thus in effect,
reversing the Order dated June 10, 1987 issued by Judge Lagman five years earlier.

A petition for review on certiorari was filed by petitioner against the Regional Trial Court with the
Supreme court which ordered that the case should be resolved to the CA for disposition considering that
under Section 9 of Batas Pambansa Blg. 129, the Intermediate Appellate Court (Court of Appeals) now
exercises exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or
awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions.
Which later on re-docketed and dismissed the case.

ISSUE:

1. Whether or not granting the motion to dismiss filed years back motu propio on the premise that his
predecessor judge was in error because "there was no cause of action at the time of the filing of the
complaint" is contrary to law and jurisprudence?
2. Whether or not the honorable court of appeals’ affirmation of the regional trial court judge’s order in
not allowing the amendment of the complaint to conform to the evidence presented without objections,
is contrary to law and jurisprudence.

HELD:

1. Yes, indeed, prior to the 1997 Rules of Civil Procedure, an order dismissing an action may be
appealed by ordinary appeal as what happened in Lucas vs. Mariano and Vda. de Haberer vs.
Martinez,cited by the Court of Appeals in its assailed decision. However, in the advent of the 1997
Rules of Civil Procedure, Section 1(h), Rule 41 thereof expressly provides that no appeal may be taken
from an order dismissing an action without prejudice. It may be subject of a special civil action for
certiorari under Rule 65 of the Rules of Court, as amended by the said 1997 Rules of Civil Procedure.
Considering that the assailed decision of the Court of Appeals was promulgated in 1994, respondent
appellate court could not have committed any grave abuse of discretion in dismissing CA-G.R. SP No.
31483.

2.Yes, the Court of Appeals committed a reversible error in sustaining the trial court decision.

it was patently erroneous on the part of the trial court not to have allowed the amendments as to make
the complaint conform to petitioner’s evidence that was presented without any objection from
respondents. The trial court likewise patently acted with grave abuse of discretion or in excess of its
jurisdiction amounting to lack of jurisdiction when, acting on a mere motion to amend the complaint, it
erroneously dismissed the complaint on the ground of failure to state a cause of action.

It is settled that even if the complaint be defective, but the parties go to trial thereon, and the plaintiff,
without objection, introduces sufficient evidence to constitute the particular cause of action which it
intended to allege in the original complaint, and the defendant voluntarily produces witnesses to meet
the cause of action thus established, an issue is joined as fully and as effectively as if it had been
previously joined by the most perfect pleadings. Likewise, when issues not raised by the pleadings are
tried by express or implied consent of the parties, they shall be treated in all respects as if they had
been raised in the pleadings.
Evidently, herein respondents’ failure to object to the evidence at the time it is presented in court is fatal
to their cause inasmuch as whatever perceived defect the complaint had was cured by the introduction
of petitioner’s evidence proving actual loss sustained by petitioner due to payment made by it to PNB.

Thus, the contention of respondents that the amendment would introduce a subsequently acquired
cause of action as there was none at the time the original complaint was filed, is untenable.