Boston Equity Resources, Inc. v. CA

Boston Equity Resources, Inc. v. CA Jun. 19, 2013 J. Perez Digest by: Edward Dayog Topic: Judicial Department

FACTS 1. Dec. 24, 1997: Boston Equity filed a complaint for a sum of money, based on a loan of PHP 1.4M, against Spouses Manuel and Lolita Toledo. 2. Mar. 19, 1998: Lolita filed her Answer (which she amended on May 7, 1998) alleging that her husband and co-defendant, Manuel, is already dead when the action was commenced (he died on Jul. 13, 1995). 3. Aug. 5, 1999: Boston Equity filed a motion to require Lolita to disclose the heirs of Manuel. The court granted the motion and Lolita complied therewith. 4. Jan. 18, 2000: Boston Equity filed a Motion for Substitution, praying that Manuel be substituted by his children as party-defendants. This was granted. 5. Oct. 7, 2004: After Boston Equity had already presented its evidence, Lolita filed a Motion to Dismiss the complaint under the following grounds: (1) failure to state a cause of action for plaintiff’s failure to implead an indispensable party; (2) the trial court did not acquire jurisdiction over the person of Manuel pursuant to Sec. 5, Rule 86; (3) the trial court erred in ordering the substitution of the deceased Manuel by his heirs; and (4) the court must also dismiss the case against Lolita in accordance with Sec. 6, Rule 86. 6. Nov. 8, 2004: The trial court denied the motion to dismiss for having been filed out of time, in violation of Sec. 1, Rule 16.1 The motion for reconsideration was likewise denied on the ground that Lolita’s attack on the jurisdiction of the court was then barred by estoppel by laches. 7. Lolita filed a petition for certiorari with the CA questioning the trial court’s denial of the motion to dismiss. 8. The CA granted the petition based on the following grounds: (1) The trial court could not have acquired jurisdiction over the person of defendant Manuel because, at the time the case was filed, he was already dead; (2) The issue on jurisdiction may be raised at any stage of the proceeding, even for the first time on appeal; (3) The complaint should have impleaded not only Lolita but also the estate of Manuel as defendants since the estate of Manuel is an indispensable party. ISSUES: A. Whether or not a petition for certiorari is the proper remedy. No. B. Whether or not the motion to dismiss was filed out of time. Yes.

1

"[W]ithin the time for but before filing the answer to the complaint or pleading asserting a claim, a motion to dismiss may be made x x x."

C. Whether or not Lolita is estopped from questioning the jurisdiction of the court. No, but her allegation had already been waived. D. Whether or not the estate of Manuel is an indispensable party. No. RATIO: A. The special civil action for certiorari is not the proper remedy to assail the denial by the trial court of a motion to dismiss. 1. The order of the trial court denying a motion to dismiss is merely interlocutory, as it neither terminates nor finally disposes of a case and still leaves something to be done by the court before a case is finally decided on the merits. 2. The proper remedy is to appeal after the decision is rendered. 3. Indiana Aerospace University v. CHED: “A writ of certiorari is not intended to correct every controversial interlocutory ruling; it is resorted only to correct a grave abuse of discretion or a whimsical exercise of judgment equivalent to lack of jurisdiction. Its function is limited to keeping an inferior court within its jurisdiction and to relieve persons from arbitrary acts – acts which courts or judges have no power or authority in law to perform. It is not designed to correct erroneous findings and conclusions made by the courts.” B. The motion to dismiss was filed out of time and is dilatory. 1. The timing of the filing violates Sec. 1, Rule 16. Indeed, the motion was filed 6 years and 5 months after Lolita has filed her amended Answer. 2. More importantly, Lolita’s motion to dismiss was filed after Boston Equity has completed the presentation of its evidence, giving credence to the conclusion that the filing of the motion to dismiss was a mere ploy on the part of Lolita to delay the prompt resolution of the case against her. In fact, it was not the first and only motion to dismiss that she filed in the course of the proceedings. Lolita’s act of filing multiple motions likewise lends credibility to the conclusion that she is deliberately impeding the early disposition of the case. C. The issue of lack of jurisdiction over the person of the defendant cannot be raised at any stage of the proceeding and may be waived, unlike that of lack of jurisdiction over the subject matter. 1. Jurisdiction has several aspects: (a) jurisdiction over the subject matter; (b) jurisdiction over the parties; (c) jurisdiction over the issues of the case; and (d) in cases involving property, jurisdiction over the res or the thing which is the subject of the litigation. (Hasegawa v. Kitamura, 2007) 2. In Tijam v. Sibonghanoy, the SC held that estoppel by laches may bar a party from assailing a court’s jurisdiction. However, this rule applies to jurisdiction over the subject matter, not to jurisdiction over the parties.

3. A reading of Sec. 1, Rule 92 and Sec. 8, Rule 153 would show that the issue of lack of jurisdiction over the parties is a matter of defense that may be waived if not properly pleaded, unlike the issue of lack of jurisdiction over the subject matter, which may be raised at any stage of the proceedings. 4. While it is true that the trial court never acquired jurisdiction over the person of Manuel, either by summons or by his voluntary appearance, for the reason the he was already dead when the complaint was filed, the rule is a party cannot have the case dismissed as against him if what he is invoking is that the court failed to acquire jurisdiction over the person of another party. This was illustrated in the case of Sarsaba v. Vda. de Te where the court held, “We cannot countenance petitioner’s argument that the complaint against the other defendants should have been dismissed, considering that the RTC never acquired jurisdiction over the person of Sereno. The court’s failure to acquire jurisdiction over one’s person is a defense which is personal to the person claiming it. Obviously, it is now impossible for Sereno to invoke the same in view of his death. Neither can petitioner invoke such ground, on behalf of Sereno, so as to reap the benefit of having the case dismissed against all of the defendants.” D. The spouses are solidarily liable on the debt. The estate of Manuel is not an indispensable party. Indispensable Party Has such an interest in the controversy or subject matter of a case that a final adjudication cannot be made in his or her absence, without injuring or affecting that interest Has an interest in the subject matter of such nature that a final decree cannot be made without affecting that interest or leaving the controversy in such a condition that its final determination may be wholly inconsistent with equity and good conscience A person in whose absence there cannot be a determination between the parties already before the court which is effective, complete or equitable Must be included in an action before it may properly proceed

Not Indispensable Party His interest in the controversy or subject matter is separable from the interest of the other parties, so that it will not necessarily be directly or injuriously affected by a decree which does complete justice between them

His presence would merely permit complete relief between him or her and those already parties to the action, or if he or she has no interest in the subject matter of the action It is not a sufficient reason to declare a person to be an indispensable party simply because his or her presence will avoid multiple litigations

2

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

3

“Subject to the provisions of Section 1 of Rule 9, a motion attacking a pleading, order, judgment, or proceeding shall include all objections then available, and all objections not so included shall be deemed waived.”

1. The contract states that the spouses jointly and severally promise to pay Boston Equity. The provisions and stipulations of the contract were then followed by the respective signatures of respondent as "MAKER" and her husband as "COMAKER." Thus, pursuant to Art. 1216 of the Civil Code4, Boston Equity may collect the entire amount of the obligation from respondent only. 2. In other words, the collection case can proceed and the demands of petitioner can be satisfied by respondent only, even without impleading the estate of Manuel. Consequently, the estate of Manuel is not an indispensable party to petitioner’s complaint for sum of money. 3. In Manila Surety & Fidelity Co., Inc. v. Villarama, the SC held that, “Construing Section 698 of the Code of Civil Procedure from whence [Section 6, Rule 87] was taken, this Court held that where two persons are bound in solidum for the same debt and one of them dies, the whole indebtedness can be proved against the estate of the latter, the decedent’s liability being absolute and primary; x x x. It is evident from the foregoing that Section 6 of Rule 87 provides the procedure should the creditor desire to go against the deceased debtor, but there is certainly nothing in the said provision making compliance with such procedure a condition precedent before an ordinary action against the surviving solidary debtors…” FALLO: Petition granted.

4

“The creditor may proceed against any one of the solidary debtors or some or all of them simultaneously. The demand made against one of them shall not be an obstacle to those which may subsequently be directed against the others, so long as the debt has not been fully collected.”