Civpro cases under Rules 10-19

Civil Procedure | February 14, 2014 RULE 10 Amended and Supplemental Pleadings Siasoco vs. Court of Appeals G.R. No. 132753, February 15, 1999, 303 SCRA 186 Doctrine: Notwithstanding the filing of a responsive pleading by one defendant, the complaint may still be amended once, as a matter of right, by the plaintiff in respect to claims against the non-answering defendant(s). The Court also reiterates that certiorari is not the proper remedy to contest a lower court’s final adjudication, since appeal is available as a recourse. Facts: Petitioners were the registered owners of nine parcels of land located in Montalban, Rizal. In December 1994, they began to offer the subject properties for sale. Subsequently, Iglesia ni Cristo (INC) negotiated with the petitioners, but the parties failed to agree on the terms of the purchase. In their letter dated January 8, 1997, petitioners claimed that the INC had not really accepted the offer, adding that, prior to their receipt of the aforementioned reply on December 24, 1996, they had already “contracted” with Carissa for the sale of the said properties “due to the absence of any response to their offer from INC.” Maintaining that a sale had been consummated, INC demanded that the corresponding deed be executed in its favor. Petitioners refused. The ensuing events were narrated by the Court of Appeals, as follows: “On January 14, 1997, private respondent filed a civil suit for [s]pecific [p]erformance and [d]amages against petitioners and Carissa Homes and Development & Properties, Inc (Carissa). “Petitioners filed therein a Motion to Dismiss on the ground of improper venue and lack of capacity to sue. “Carissa Homes filed its answer to the complaint on February 24, 1997. “Pending resolution of petitioners’ Motion to Dismiss, private respondent negotiated with Carissa Homes which culminated in the purchase of the subject properties of Carissa Homes by private respondent. “On April 24, 1997, private respondent filed an [A]mended [C]omplaint, dropping Carissa Homes as one of the defendants and changing the nature of the case to a mere case for damages.

interest of justice, the court will resolve the motion. In the resolution of this court dated August 11, 1997, it state[d] that defendants [were being] given a period of five (5) days within which to file [an] answer to the Amended Complaint. The defendants here obviously refer to the defendants Mario Siasoco, et. al. In the Motion for Suspension filed by the defendants Siasoco, et al., the latter insist on the court resolving the motion to dismiss. As stated in the resolution, the motion to dismiss is now moot and academic because of the Amended Complaint from Specific Performance with Damages to just Damages. For this court to resolve the Motion to Dismiss xxx the first complaint, would be an exercise in futility. The main complaint now is damages and no longer Specific Performance with damages which [was] actually what the Resolution dated August 11, 1997 [was] all about. Be that as it may, the court gives defendants Siasoco, et al. fifteen (15) days from receipt of this Order to file their respective Answers to the Amended Complaint, not from the receipt of the resolution of the Motion to Dismiss which will not be forthcoming.’” RTC’s Decision: RTC (1) admitted the Amended Complaint; (2) dropped Defendant Carissa from the Complaint; and (3) denied the Motion to Declare Defendants Siasoco et al. (herein petitioners) in Default. The second Order denied the Motion for Suspension filed by defendants and directed them to file their answer to plaintiff’s Amended Complaint. CA’s Decision: The Court of Appeals (CA) ruled that although private respondent could no longer amend its original Complaint as a matter of right, it was not precluded from doing so with leave of court. Thus, the CA concluded that the RTC had not acted with grave abuse of discretion in admitting private respondent’s Amended Complaint. Petitioners argued that the trial court where the original Complaint for specific performance had been filed was not the proper venue. Debunking petitioners’ argument, the CA explained that the RTC nevertheless had jurisdiction over the said Complaint. The CA also held that the Amended Complaint did not substantially alter private respondent’s cause of action, since petitioners were not being asked to answer a legal obligation different from that stated in the original Complaint. Issue: WON CA erred in affirming the two Orders of the RTC which had allowed the Amended Complaint? Held/ SC’s Decision: No. The petition is devoid of merit. We sustain the Court of Appeals, but for reasons different from those given in the assailed Decision. Admission of Amended Complaint

“Petitioners filed a Motion to Strike Out Amended Complaint, contending that the complaint cannot be amended without leave of court, since a responsive pleading has been filed. “On August 11, 1997, the first assailed order denying petitioners’ Motion to Strike Out Amended Complaint was rendered. “On August 31, 1997, petitioners filed a Motion for Suspension of Proceeding pending the resolution [by] the respondent court of the Motion to Dismiss earlier filed. “On September 11, 1997, the second assailed order denying petitioners’ Motion to Suspend Proceeding was rendered[;] the Order reads: ‘Filed also last September 1, 1997 [was] a Motion for Suspension by the defendant Siasoco thru their counsel Atty. Clara Dumandang-Singh. Although the court could not consider the motion filed because it violates the new rules on personal service, in the

Petitioners argue that the lower courts erred in admitting the Amended Complaint. Under the Rules, a “party may amend his pleading once as a matter of right at any time before a responsive pleading is served xxx.” When private respondent filed its Amended Complaint, Carissa, the other party-defendant in the original Complaint, had already filed its Answer. Because a responsive pleading had been submitted, petitioners contend that private respondent should have first obtained leave of court before filing its Amended Complaint. This it failed to do. In any event, such leave could not have been granted, allegedly because the amendment had substantially altered the cause of action. This argument is not persuasive. It is clear that plaintiff (herein private respondent) can amend its complaint once, as a matter of right, before a responsive pleading is filed. Contrary to the petitioners’ contention, the fact that Carissa had already filed its Answer did not bar private respondent from amending its original Complaint once, as a matter of right, against herein petitioners. Indeed, where some but not all the defendants have answered, Case Digests for Rules 10-19 | page 1

Civil Procedure | February 14, 2014 plaintiffs may amend their Complaint once, as a matter of right, in respect to claims asserted solely against the non-answering defendants, but not as to claims asserted against the other defendants. The rationale for the aforementioned rule is in Section 3, Rule 10 of the Rules of Court, which provides that after a responsive pleading has been filed, an amendment may be rejected when the defense is substantially altered. Such amendment does not only prejudice the rights of the defendant; it also delays the action. In the first place, where a party has not yet filed a responsive pleading, there are no defenses that can be altered. Furthermore, the Court has held that “[a]mendments to pleadings are generally favored and should be liberally allowed in furtherance of justice in order that every case may so far as possible be determined on its real facts and in order to speed the trial of cases or prevent the circuity of action and unnecessary expense, unless there are circumstances such as inexcusable delay or the taking of the adverse party by surprise or the like, which might justify a refusal of permission to amend.”

to Verzosa being the highest bidder. Verzosa subsequently sold the same land to Martinez On September 5, 1989, the trial court issued an order admitting the amended complaint of Fe Uson. At this point, Verzosa filed with the Court of Appeals CA-G.R. SP No. 18898 for certiorari. He alleged that the said order, admitting the amended complaint was issued with grave abuse of discretion. CA denied certiorari. On May 20, 1991, Fe Uson filed her second amended complaint impleading as additional defendants the Register of Deeds of Alaminos, Pangasinan and Pilar Martinez and praying, among others, the annulment of the latter’s title -- T.C.T. No. 11107. On November 22, 1991, respondent judge issued an order to the effect that the status quo being maintained is the possession of plaintiff Fe Uson of the land (grounded on the time of filing if the original complaint) and that such status quo does not refer to defendant Pilar Martinez being the registered owner.

In the present case, petitioners failed to prove that they were prejudiced by private respondent’s Amended Complaint. True, Carissa had already filed its own Answer. Petitioners, however, have not yet filed any. Moreover, they do not allege that their defense is similar to that of Carissa. On the contrary, private respondent’s claims against the latter and against petitioners are different. Against petitioners, whose offer to sell the subject parcels of land had allegedly been accepted by private respondent, the latter is suing for specific performance and damages for breach of contract. Although private respondent could no longer amend, as a matter of right, its Complaint against Carissa, it could do so against petitioners who, at the time, had not yet filed an answer.

TC: Status Quo is in effect at the time of the original complaint

The amendment did not prejudice the petitioners or delay the action. On the contrary, it simplified the case and tended to expedite its disposition. The Amended Complaint became simply an action for damages, since the claims for specific performance and declaration of nullity of the sale have been deleted.

SC:

WHEREFORE, the Petition is hereby DENIED. Costs against petitioners. Versoza vs. Court of Appeals G.R. No. 119511, November 24, 1998, 299 SCRA 100 DOCTRINE: When the amended complaint does not introduce new issues, causes of action, or demands, the suit is deemed to have commenced on the date the original complaint was filed, not on the date of the filing of the amended complaint FACTS: Fe Giron Uson is the owner of a parcel. She mortgaged the land to Wilfredo Verzosa. Fe Uson failed to pay her entire obligation to Verzosa, prompting the latter to have the mortgage foreclosed. Fe Uson, on August 12, 1988, filed a complaint against Wilfredo Verzosa and the Provincial Sheriff for annulment of mortgage with prayer for the issuance of a writ of preliminary injunction. Verzosa filed a motion to dismiss the complaint. The complaint was dismissed on the ground that it was not personally verified by plaintiff Fe Uson. Fe Uson filed a motion for reconsideration which was granted by the court. She filed her amended complaint which bears the proper verification. Meantime, Verzosa wrote the Provincial Sheriff to proceed with the foreclosure of mortgage. On July 4, 1989, the foreclosure sale was conducted by the sheriff. The property was sold

CA: Affirmed TC ISSUE: WON the suit is deemed to have been filed on the date of the original complaint or the amended complaint HELD: When there is no new issues, cause of action or demands made, it is deemed to have been filed on the date of the original complaint

According to the SC, The “status quo” is the last actual peaceful uncontested situation which precedes a controversy, and its preservation is the office of an injunctive writ. Although the Complaint was subsequently amended, the controversy began when the first Complaint was filed. Petitioners contend that the controversy started only when the Amended Complaint was filed, because the previous Complaints were expunged from the records. Petitioners invoke Ruymann v. Director of Lands, in which the Court ruled that the filing of an amended pleading does not retroact to the date of the filing of the original. However, in Ruymann, the Court held that “an amendment to a complaint which introduces a new or different cause of action, making a new or different demand, is equivalent to a fresh suit upon a new cause of action, and the statute of limitations continues to run until the amendment is filed.” It follows that when the amended complaint does not introduce new issues, causes of action, or demands, the suit is deemed to have commenced on the date the original complaint was filed, not on the date of the filing of the amended complaint. In other words, for demands already included in the original complaint, the suit is deemed to have commenced upon the filing of such original complaint. In short, for purposes of determining the commencement of a suit, the original complaint is deemed abandoned and superseded by the amended complaint only if the amended complaint introduces a new or different cause of action or demand. Chua vs. Court of Appeals G.R. No. 109840, January 21, 1999, 301 SCRA 356 DOCTRINE:Any objection to the admissibility of evidence should be made at the time such evidence is offered or as soon thereafter as the objection to its admissibility becomes Case Digests for Rules 10-19 | page 2

Civil Procedure | February 14, 2014 apparent,otherwise the objection will be considered waived and such evidence will form part of the records of the case as competent and admissible evidence. Rule 10, §5of the Rules of Civil Procedure allows the amendment of the pleadings in order to make them conform to the evidence in the record. FACTS: ● Petitioners were lessees of a commercial unit in Parañaque. The lease was for 5 years, from January 1, 1985 to December 31, 1989. ● The contract expressly provided for the renewal of the lease at the option of the lessees “in accordance with the terms of agreement and conditions set by the lessor.” ● Prior to the expiration of the lease, the parties discussed the possibility of renewing it. They exchanged proposal and counterproposal, but they failed to reach agreement. The dispute was referred to the barangay captain for conciliation but still no settlement was reached by the parties. ● On July 24, 1990, private respondent filed a complaint for unlawful detainer against petitioners MTC: Petitioners were granted an extension of (2) years extension of occupancy of the subject premises starting the date of the filing of the instant complaint On appeal, RTC: ordered petitioners to vacate the premises turn over possession to private respondents CA: affirmed RTC’s decision Arguments and SC Ruling: 1. Petitioners allege that the CA erred in affirming the lower court’s finding that they owe private respondent unpaid rentals because neither the letter of demand nor the complaint for unlawful detainer alleged a claim for unpaid rentals. HELD: o While it is true that there was no express demand in private respondent’s complaint for unlawful detainer against petitioners for the latter’s payment of rental arrearages, private respondent in a pleading filed with the MTC (by way of comment to petitioners’ motion to admit amended answer) it stated “That moreover the unpaid rentals from January 1987 to December 31, 1989 amounts to FORTY TWO THOUSAND THREE HUNDRED SIX PESOS (P42,306.00), exclusive of rentals from January 1 to December 31, 1990 which would be one hundred eighty thousand pesos (P180,000.00) or a total of TWO HUNDRED TWENTY TWO THOUSAND THREE HUNDRED SIX PESOS (222,306.00)” o Then, at the pre-trial of December 17, 1990, among the issues proposed by counsel for private respondent was W/N Defendants are in arrears for the rentals from Dec. 31, 1987 to January 1989, in accordance with the contract. o And since counsel for petitioners did not object to the statement of issues made by plaintiff’s counsel and instead simply stated as their own main issue whether plaintiff had a valid cause of action for ejectment against them as he is not the sole owner of the leased premises, and then averred that “based on this premise, the other issues raised by plaintiff could be dependent on the resolution of the stated issues” . o Obviously, then, petitioners’ rental arrearages from 1986 to 1989 was an issue raised at the pre-trial and on which issue private respondent presented evidence without any objection

from petitioners. Indeed, any objection to the admissibility of evidence should be made at the time such evidence is offered or as soon thereafter as the objection to its admissibility becomes apparent,otherwise the objection will be considered waived and such evidence will form part of the records of the case as competent and admissible evidence. Rule 10, §5of the Rules of Civil Procedure allows the amendment of the pleadings in order to make them conform to the evidence in the record. 2. Petitioners claim that they are entitled to an extension of time to occupy the premises in question. ● HELD : Without merit. After the lease terminated on January 1, 1990 and without the parties thereafter reaching any agreement for its renewal, petitioners became deforciants subject to ejectment from the premises. 3. The appellate court found petitioners guilty of bad faith in refusing to leave the premises. But petitioners contend that they acted in good faith under the belief that they were entitled to an extension of the lease because they had made repairs and improvements on the premises. ● HELD: Devoid of merit. The fact that petitioners allegedly made repairs on the premises in question is not a reason for them to retain the possession of the premises. There is no provision of law which grants the lessee a right of retention over the leased premises on that ground. 4. Lastly, Petitioners contend that the CA erredd in affirming the denial of their counterclaim for damages for their failure to enjoy the peaceful possession of the premises because private respondent allowed vendors to ply their trade at the front portion of the leased premises. Petitioners claim that, as a result, they suffered business losses and moral injuries. ● HELD: There no evidence to support this claim. Petitioners never complained before about the sidewalk vendors occupying a portion of the leased property. It was only after negotiations for renewal of the lease had failed and private respondent had filed a complaint for unlawful detainer against them did they complain about the vendors. WHEREFORE, the decision of the Court of Appeals is AFFIRMED. ●

Asean Pacific v. City of Urdaneta, G.R. No. 162525, September 23, 2008 DOCTRINE: Section 5, Rule 10 of the Rules of Court pertinently provides that if evidence is objected to at the trial on the ground that it is not within the issues raised by the pleadings, the court may allow the pleadings to be amended and shall do so with liberality if the presentation of the merits of the action and the ends of substantial justice will be subserved thereby. FACTS: This case stemmed from a Complaint for annulment of contracts with prayer for preliminary prohibitory injunction and temporary restraining order filed by respondent Waldo C. Del Castillo, in his capacity as taxpayer, against respondents City of Urdaneta and Ceferino J. Capalad doing business under the name JJEFWA Builders, and petitioners Asean Pacific Planners (APP) represented by Ronilo G. Goco and Asean Pacific Planners Construction and Development Corporation (APPCDC) represented by Cesar D. Goco. Del Castillo alleged that then Urdaneta City Mayor Rodolfo E. Parayno entered into five contracts for the preliminary design, construction and management of a four-storey twin cinema commercial center and hotel involving a massive expenditure of public funds amounting to P250 million, funded by a loan from the Philippine National Bank (PNB). For Case Digests for Rules 10-19 | page 3

Civil Procedure | February 14, 2014 minimal work, the contractor was allegedly paid P95 million. Del Castillo also claimed that all the contracts are void because the object is outside the commerce of men. The object is a piece of land belonging to the public domain and which remains devoted to a public purpose as a public elementary school. Additionally, he claimed that the contracts, from the feasibility study to management and lease of the future building, are also void because they were all awarded solely to the Goco family.

consider other evidence to be presented for said admissions may not necessarily prevail over documentary evidence, e.g., the contracts assailed. A party's testimony in open court may also override admissions in the Answer.

In their Answer, APP and APPCDC claimed that the contracts are valid. Urdaneta City Mayor Amadeo R. Perez, Jr., who filed the city's Answer, joined in the defense and asserted that the contracts were properly executed by then Mayor Parayno with prior authority from the Sangguniang Panlungsod. Mayor Perez also stated that Del Castillo has no legal capacity to sue and that the complaint states no cause of action. For respondent Ceferino J. Capalad, Atty. Oscar C. Sahagun filed an Answer with compulsory counterclaim and motion to dismiss on the ground that Del Castillo has no legal standing to sue.

DOCTRINE: Even if the amendment substantially alters the cause of action or defense, such amendment could still be allowed when it is sought to serve the higher interest of substantial justice; prevent delay; and secure a just, speedy and inexpensive disposition of actions and proceedings.

After pre-trial, Urdaneta City allegedly wanted to rectify its position and claimed that inadequate legal representation caused its inability to file the necessary pleadings in representation of its interests.

The first loan was secured by a piece of land as collateral. The second, a bigger loan, was unsecured. Instead, the members of the Board of Directors of AWRI became sureties under a Surety Agreement; all copies thereof, except two, were kept by PBCOM -- of these two kept by the notary public, one copy was retained for his notarial file and the other sent to the Records Management and Archives Office, through the Office of the RTC Clerk of Court.

TC: In its Order dated September 11, 2002, the Regional Trial Court (RTC) of Urdaneta City, Pangasinan, Branch 45, admitted its complaint for consolidation with Del Castillo's complaint, and directed the defendants to answer the city's complaint. In its February 14, 2003 Order,the RTC denied reconsideration of the September 11, 2002 Order. It also granted that the complaint filed by Atty. Jorito C. Peralta be admitted and consolidated with the complaints of Del Castillo and Urdaneta City. CA: CA dismissed the petition on the following grounds: (1) defective verification and certification of non-forum shopping, (2) failure of the petitioners to submit certified true copies of the RTC's assailed orders as mere photocopies were submitted, and (3) lack of written explanation why service of the petition to adverse parties was not personal. CA also denied APP and APPCDC's motion for reconsideration in its February 4, 2004 Resolution. ISSUE: WON Urdaneta City is estopped to reverse admissions in its Answer that the contracts are valid and, in its pre-trial brief, that the execution of the contracts was in good faith. SC/HELD: We disagree. The court may allow amendment of pleadings. Section 5, Rule 10 of the Rules of Court pertinently provides that if evidence is objected to at the trial on the ground that it is not within the issues raised by the pleadings, the court may allow the pleadings to be amended and shall do so with liberality if the presentation of the merits of the action and the ends of substantial justice will be subserved thereby. Objections need not even arise in this case since the Pre-trial Order dated April 1, 2002 already defined as an issue whether the contracts are valid. Thus, what is needed is presentation of the parties' evidence on the issue. Any evidence of the city for or against the validity of the contracts will be relevant and admissible. Note also that under Section 5, Rule 10, necessary amendments to pleadings may be made to cause them to conform to the evidence.

Tiu v. PBCOM, G.R. No. 151932, August 19, 2009

Asian Water Resources, Inc. (AWRI), represented by petitioners, applied and was approved for real estate loans with the Philippine Bank of Communications (PBCOM).

AWRI defaulted. It offered PBCOM all its present properties as dacion en pago. PBCOM denied the request, instead demanding full payment. AWRI failed to respond thus PBCOM filed a complaint for collection against petitioners. In their answer, petitioners alleged that the Surety Agreement was falsified. The words "In his personal capacity" did not yet appear in the document and were merely intercalated thereon without their consent evidenced by a certified photocopy of the Surety Agreement issued by the Records Management and Archives Office showing no entry of the words "In his personal capacity" in the original document. The notarial copy too showed that the words "In his personal capacity" did not appear on the Surety Agreement. PBCOM discovered that the insertion was ordered by the bank auditor. They therefore filed a Reply and Answer to Counterclaim with Motion for Leave of Court to substitute the subject document on the Complaint with the duplicate original copy retrieved from the file of the notary public. PBCOM also admitted its mistake in making the insertion and explained that it was made without the knowledge and consent of the notary public. PBCOM maintained that the insertion was not a falsification, but was made only to speak the truth of the parties’ intentions. PBCOM also contended that petitioners were already primarily liable on the Surety Agreement whether or not the insertion was made, having admitted in their pleadings that they voluntarily executed and signed the Surety Agreement in the original form. PBCOM, invoking a liberal application of the Rules, emphasized that the motion incorporated in the pleading can be treated as a motion for leave of court to amend and admit the amended complaint pursuant to Section 3, Rule 10 of the Rules of Court. RTC DECISION: the RTC issued an Order allowing the substitution of the altered document with the original Surety Agreement, the pertinent portion. A motion for reconsideration filed by the petitioners thereafter was also denied. CA DECISION: Dismissed the case for lack of merit. ISSUE: WON the substitution of the document is valid.

In addition, despite Urdaneta City's judicial admissions, the trial court is still given leeway to Case Digests for Rules 10-19 | page 4

Civil Procedure | February 14, 2014 HELD: Yes. PBCOM’s right under Section 3, Rule 10 of the Rules of Court, to amend its complaint, including the documents annexed thereto, after petitioners have filed their answer, specifically allows amendment by leave of court. The said Section states: SECTION 3. Amendments by leave of court. Except as provided in the next preceding section, substantial amendments may be made only upon leave of court. But such leave may be refused if it appears to the court that the motion was made with intent to delay. Orders of the court upon the matters provided in this section shall be made upon motion filed in court, and after notice to the adverse party, and an opportunity to be heard. This Court has emphasized the import of Section 3, Rule 10 of the 1997 Rules of Civil Procedure in Valenzuela v. Court of Appeals,26 thus: Interestingly, Section 3, Rule 10 of the 1997 Rules of Civil Procedure amended the former rule in such manner that the phrase "or that the cause of action or defense is substantially altered" was stricken-off and not retained in the new rules. The clear import of such amendment in Section 3, Rule 10 is that under the new rules, "the amendment may (now) substantially alter the cause of action or defense." This should only be true, however, when despite a substantial change or alteration in the cause of action or defense, the amendments sought to be made shall serve the higher interests of substantial justice, and prevent delay and equally promote the laudable objective of the rules which is to secure a "just, speedy and inexpensive disposition of every action and proceeding." The granting of leave to file amended pleading is a matter particularly addressed to the sound discretion of the trial court; and that discretion is broad, subject only to the limitations that the amendments should not substantially change the cause of action or alter the theory of the case, or that it was not made to delay the action.Nevertheless, as enunciated in Valenzuela, even if the amendment substantially alters the cause of action or defense, such amendment could still be allowed when it is sought to serve the higher interest of substantial justice; prevent delay; and secure a just, speedy and inexpensive disposition of actions and proceedings. The courts should be liberal in allowing amendments to pleadings to avoid a multiplicity of suits and in order that the real controversies between the parties are presented, their rights determined, and the case decided on the merits without unnecessary delay. This liberality is greatest in the early stages of a lawsuit, especially in this case where the amendment was made before the trial of the case, thereby giving the petitioners all the time allowed by law to answer and to prepare for trial. Furthermore, amendments to pleadings are generally favored and should be liberally allowed in furtherance of justice in order that every case, may so far as possible, be determined on its real facts and in order to speed up the trial of the case or prevent the circuity of action and unnecessary expense. That is, unless there are circumstances such as inexcusable delay or the taking of the adverse party by surprise or the like, which might justify a refusal of permission to amend. In the present case, there was no fraudulent intent on the part of PBCOM in submitting the altered surety agreement. In fact, the bank admitted that it was a mistake on their part to have submitted it in the first place instead of the original agreement. It also admitted that, through inadvertence, the copy that was attached to the complaint was the copy wherein the words "IN HIS PERSONAL CAPACITY" were inserted to conform to the bank’s standard practice. This alteration was made without the knowledge of the notary public. PBCOM’s counsel had no idea that what it submitted was the altered document, thereby necessitating the substitution of the surety agreement with the original thereof, in order that

the case would be judiciously resolved. Verily, it is a cardinal rule of evidence, not just one of technicality but of substance, that the written document is the best evidence of its own contents. It is also a matter of both principle and policy that when the written contract is established as the repository of the parties’ stipulations, any other evidence is excluded, and the same cannot be used to substitute for such contract, or even to alter or contradict the latter. The original surety agreement is the best evidence that could establish the parties’ respective rights and obligations. In effect, the RTC merely allowed the amendment of the complaint, which consequently included the substitution of the altered surety agreement with a copy of the original. It is well to remember at this point that rules of procedure are but mere tools designed to facilitate the attainment of justice. Their strict and rigid application that would result in technicalities that tend to frustrate rather than promote substantial justice must always be avoided. Applied to the instant case, this not only assures that it would be resolved based on real facts, but would also aid in the speedy disposition of the case by utilizing the best evidence possible to determine the rights and obligations of the party- litigants. Moreover, contrary to petitioners’ contention, they could not be prejudiced by the substitution since they can still present the substituted documents as part of the evidence of their affirmative defenses. The substitution did not prejudice petitioners or delay the action. On the contrary, it tended to expedite the determination of the controversy. Besides, the petitioners are not precluded from filing the appropriate criminal action against PBCOM for attaching the altered copy of the surety agreement to the complaint. The substitution of the documents would not, in any way, erase the existence of falsification, if any. The case before the RTC is civil in nature, while the alleged falsification is criminal, which is separate and distinct from another. Thus, the RTC committed no reversible error when it allowed the substitution of the altered surety agreement with that of the original. WHEREFORE, premises considered, the petition is DENIED. The Orders of the Regional Trial Court are AFFIRMED. RULE 12 Bill of Particulars Tantuico, Jr. vs. Republic G. R. No. 89114, December 2, 1991, 204 SCRA 428 Doctrine: The function or purpose of a bill of particulars to define, clarify, particularize, and limit or circumscribe the issues in the case, to expedite the trial, and assist the court. Facts: The Republic of the Philippines, represented by Presidential Commission on Good Government (PCGG) filed a case before Sandiganbayan against Kokoy Romualdez, Ferdinand Marcos et. al. (including Francisco Tantuico) for reconveyance, reversion, accounting, restitution and damages. Tantuico, being the previous chairman of the Commission on Audit, was alleged to have acted in conspiracy with the other defendants for misappropriation, theft of public funds, plunder, and other acts of corruption. Tantuico filed a Motion for Bill of Particulars asking for clarification on several allegations against him, arguing that the Complaint filed was couched in too general terms, not particularly describing acts allegedly committed by him. However, the Sandiganbayan denied his Motion stating that the Complaint was clear and sufficient for Tantuico to know the nature and scope of the cause of action against him. Tantuico filed his Motion for Reconsideration but was also denied. Case Digests for Rules 10-19 | page 5

Civil Procedure | February 14, 2014 Thus, he filed this case with the SC. Issue: W/N the Sandiganbayan acted in grave abuse of discretion in denying Tantuico’s Motion for Bill of Particular. Held: Yes, the Sandiganbayan should have granted Tantuico’s Motion for Bill of Particulars. It must be noted that a complaint must state only ultimate facts, not conclusions of law, constituting the plaintiff's cause or causes of action. This is to inform the defendant clearly and definitely of the claims made against him so that he may be prepared to meet the issues at the trial. The definition of ultimate facts is as follows: important and substantial facts which either directly form the basis of the primary right and duty, or which directly make up the wrongful acts or omissions of the defendant. The term does not refer to the details of probative matter or particulars of evidence by which these material elements are to be established. It refers to principal, determinate, constitutive facts, upon the existence of which, the entire cause of action rests. A perusal of the complaint shows that the allegations against Tantuico were mere conclusions of law unsupported by factual premises.[1] In fact, the complaint does not allege what duties the petitioner failed to perform, or the particular rights he abused. Thus, it failed to inform Tantuico the claims made against him so that he may be prepared to meet the issues at the trial Premises considered, it is correct for Tantuico to file a Bill of Particulars, as the object of which is to amplify or limit a pleading, specify more minutely and particularly a claim or defense set up and pleaded in general terms, give information, not contained in the pleading, to the opposite party and the court as to the precise nature, character, scope, and extent of the cause of action or defense relied on by the pleader, and apprise the opposite party of the case which he has to meet, to the end that the proof at the trial may be limited to the matters specified, and in order that surprise at, and needless preparation for, the trial may be avoided. Uy vs. Court of Appeals G. R. No. L-49059, May 9, 1980, 232 SCRA 579 FACTS: The case started in the municipal court of Solano, Nueva Vizcaya which dismissed the January 1975 complaint for ejectment filed by Busa against herein petitioners. The complaint was based on the ground that petitioners were occupying Busa's lot without any lease contract and without paying any compensation for the use thereof. Busa appealed to the CFI which found that the petitioners occupied Busa's lot and built a school building on the basis of a 15-year lease contract which expired on April 1972. After the lease expired, Busa sent demand letters informing petitioners that he was not renewing the lease and required them to vacate the lot. TC: The CFI held that, as the lease was not renewed and no rentals were paid, Busa was entitled to recover possession of his lot and that petitioners are liable to pay reasonable compensation for their use and occupation. Petitioners appealed to the CA.

CA: The CA dismissed the petition. Petitioners' MR was also denied. Petitioners did not appeal from the decision; hence, entry of judgment was made on July 1978. About 3 months later, the petitioners filed the instant petition contending that the municipal court had no jurisdiction over the case and, therefore, the proceedings there and in the other courts are void. The lack of jurisdiction is based on the theory that petitioners (as defendants) pleaded in the municipal court the defense that the lease was renewed by virtue of the provision in the contract that it "shall be for a period of 15 years renewable at the option of the Lessee". Hence, it was necessary for the municipal court to interpret the renewal clause and thus the action was transformed from an unlawful detainer case into an action that is "incapable of pecuniary estimation" which falls within the exclusive original jurisdiction of the CFI. ISSUE: W/N the action was beyond the jurisdiction of the Municipal Court being one that is incapable of pecuniary estimation rather than an unlawful detainer case? SC: NO. Original jurisdiction belongs to the Municipal Court; action is a valid unlawful detainer case. Petition dismissed. Judgment of the CFI should be enforced. The complaint in the municipal court was for ejectment based on the demands to vacate, the last of which was a July 1974 letter, wherein Busa required the petitioners to vacate his lot, remove their improvements and pay P150 a month as the reasonable compensation for the use of the lot. The filing of the ejectment or unlawful detainer action was within the 1year period counted from the last demand. The inferior court's jurisdiction in an ejectment case is determined by the nature of the action set forth in the complaint. Even if this case involved the interpretation of the renewal clause of the lease contract, it was, nevertheless, within the exclusive original jurisdiction of the municipal court because the petitioners were ejected not because of the non-renewal of the lease but because of nonpayment of rentals. Consequently, we cannot apply to this case the ruling that where the case hinges on the correct interpretation of the renewal clause of the lease contract, the action is not for unlawful detainer but one which is not susceptible of pecuniary estimation and is beyond the competence of the municipal court. As already stated, the CFI ejected the petitioners on the ground of nonpayment of rental. Furthermore, the jurisdictional issue as to the case not being susceptible of pecuniary estimation was never raised by the petitioners in the municipal court and in the CFI nor in their brief in the CA. They assailed for the first time the municipal court's jurisdiction on that ground in their MR in the CA. Therefore, there is some basis for Busa's contention that the CFI decided the case in the exercise of its original jurisdiction without any objection on the part of the petitioners and that they are estopped to question the jurisdiction of the municipal court, although ordinarily jurisdiction over the subject matter cannot be waived and lack of jurisdiction may be raised anytime.

Case Digests for Rules 10-19 | page 6

Civil Procedure | February 14, 2014 Republic v. Sandiganbayan, G.R. No. 148154, December 17, 2007 Doctrine: Default judgments are frowned upon, and the SC has been advising the courts below to be liberal in setting aside default orders to give both parties every chance to present their case fairly without resort to technicality; Judicial experience shows that resort to motions for bills of particulars is sometimes intended for delay or, even if not so intended, actually result in delay since the reglementary period for filing a responsive pleading is suspended and the subsequent proceedings are likewise set back in the meantime. The 1991 Virata-Mapa Doctrine prescribes a motion for a bill of particulars, not a motion to dismiss, as the remedy for perceived ambiguity or vagueness of acomplaint for the recovery of ill-gotten wealth. Facts: ● ● ●

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The main issue in this case is the propriety of filing and granting of a motion for a bill of particulars filed for the estate of a defaulting and deceased defendant (Pres. F. Marcos). Roman Cruz is impleaded as an alleged crony of President Marcos. ○ Cruz, then Pres and GM of GSIS, Pres of PAL, Pres and owner of Hyatt Hotel. Chairman of Commercial Bank of Manila, When the PCGG went after the cronies, in hopes of recovering the wealth he and his family (Marcoses) and cronies amassed during his reign, an alias summons was served upon him in Hawaii, his place of exile. Since he was not able to file a responsive pleading, he was then declared in default, upon motion by the Republic of the Philippines. When the order of exile was lifted after the death of the fallen President, his wife, Mrs. Marcos moved to set aside the order of default, which motion was granted by the Sandiganbayan. ○ Sandiganbayan: found that a myriad of events, such as their exile, President Marcos’ ill health and numerous other civil and criminal suits against the latter was reasonable cause to lift the order of default. The President’s son, Ferdinand Marcos, Jr. (BongBong), as the executor of his father’s estate, petitioned the court for extension of time to file a responsive pleading, which the court granted. ○ However, instead of filing an answer, Bong-Bong filed a Motion For Bill of Particulars, praying for clearer statements of the allegations which he called “mere conclusions of law, too vague and general to enable defendants to intelligently answer.” ■ Sandiganbayan: upheld respondent, explaining that the allegations against former President Marcos were vague, general, and were mere conclusions of law. It pointed out that the accusations did not specify the ultimate facts of former President Marcos' participation in Cruz's alleged accumulation of ill-gotten wealth, effectively preventing respondent from intelligently preparing an answer. It noted that this was not the first time the same issue was raised before it, and stressed that this Court had consistently ruled in favor of the motions for bills of particulars of the defendants in the other ill-gotten wealth cases involving the Marcoses. ■ The PCGG opposed the motion, arguing that the requested particulars were evidentiary matters; that the motion was dilatory. The Republic argued that since Bong-Bong filed a motion for extension of time to file an answer, the Sandiganbayan should not have accepted the former’s motion

for bill of particulars. ○ It argued that the charges were clear, and that other parties, such as Cruz, also linked to the controversy of ill-gotten wealth, have already filed their own answers, thus proving that the complaint was not in fact couched in too general terms. ISSUE: Did the court commit grave abuse of discretion amounting to lack or excess of jurisdiction in granting respondent's motion for a bill of particulars as executor of former President Marcos' estates considering that the deceased defendant was then a defaulting defendant when the motion was filed? (found on SCRA page 444) HELD NO. In his motion for a bill of particulars, respondent wanted clarification on the specific nature, manner and extent of participation of his father in the acquisition of the assets cited above under Cruz; particularly whether former President Marcos was a beneficial owner of these properties; and the specific manner in which he acquired such beneficial control. While the allegations as to the alleged specific acts of Cruz were clear, they were vague and unclear as to the acts of the Marcos couple who were allegedly "in unlawful concert with" the former. There was no factual allegation in the original and expanded complaints on the collaboration of or on the kind of support extended by former President Marcos to Cruz in the commission of the alleged unlawful acts constituting the alleged plunder. All the allegations against the Marcoses, aside from being maladroitly laid, were couched in general terms. The alleged acts, conditions and circumstances that could show the conspiracy among the defendants were not particularized and sufficiently set forth by petitioner. SC: Resolutions of Sandiganbayan affirmed. Add’l notes: A motion for bill of particulars becomes moot and academic where, prior to its filing, the defendant has already filed his answer and several other pleadings. Estardante v. People, G.R. Nos. 156851-55, February 18, 2008 DOCTRINE: While the Bill of Particulars is not allowed under the Rules of Procedure of the Office of the Ombudsman and therefore should not be the basis for determining what specific criminal charges should be filed against herein petitioner, it behooves the Ombudsman to accord the petitioner her basic rights to due process in the conduct of the preliminary investigation. FACTS: Petitioner was the school principal of the Ramon Torres National High School (RTNHS). On 1998, a group of concerned RTNHS teachers, composed of the Faculty and Personnel Club Officers and department heads (private complainants), sent an undated letter to the Schools Division attaching a list of 15 irregularities allegedly committed by the petitioner, which the private complainants requested to be investigated. Two complaints were eventually filed by private complainants against petitioner with the Office of the Ombudsman-Visayas. The Ombudsman-Visayas forwarded the complaint City Prosecutor for preliminary Case Digests for Rules 10-19 | page 7

Civil Procedure | February 14, 2014 investigation. The City Prosecutor served the petitioner with a subpoena on August 28, 2000 and another on August 30, 2000, requiring her to submit her counter-affidavit \

2.

Instead of filing a counter-affidavit, petitioner filed before the City Prosecutor a Motion for Bill of Particulars with Motion for Extension of Time to File Counter-Affidavit. In the Motion for Bill of Particulars, petitioner alleged that there were no specific criminal charges that were stated in the subpoenas. Thus, petitioner insisted that she cannot intelligently prepare her counter-affidavit unless the criminal charges and the laws she violated are specified.

HELD:

On March 10, 2000, the City Prosecutor issued an Order attaching the private complainants’ Bill of Particulars pertinent portions of which read: Complaint 23 & 25 The principal Ms. Estandarte accepted cash and in kind donations without being properly channeled and accounted first by the property custodian and the cash without first deposited in the Trust Fund. xxxx and directing the petitioner to file her counter-affidavit. Petitioner filed her counter-affidavit limiting herself only to the charges specified in the Bill of Particulars. Thereafter, the City Prosecutor referred the case back to the Ombudsman The latter found sufficient grounds to hold petitioner liable for five counts of violation of Section 3(e) of R.A. No. 3019, as amended, or the Anti-Graft and Corrupt Practices Act, and filed before the RTC the corresponding Informations. On May 21, 2002, petitioner filed a Motion for Reinvestigation before the RTC on the ground that she cannot allegedly be charged with violation of Sections 68 and 69 of Presidential Decree (P.D.) No. 1445 since she was not a collecting officer. She also asserts that she cannot be charged under Section 3(e) of R.A. No. 3019, as the acts which she was charged with, did not constitute “manifest partiality, evident bad faith or inexcusable negligence.” TC: On September 24 2002, RTC denied MR. Feeling aggrieved, the petitioner filed a Motion for Reconsideration of the September 24, 2002 Order. Petitioner maintains that when the five Informations for the violation of Section 3(e) of R.A. No. 3019 were filed by the Ombudsman, her right to due process was violated; and that the Ombudsman in effect went beyond the Bill of Particulars filed by the private complainants. In the other assailed Order dated December 20, 2002, the RTC denied the Motion for Reconsideration. Hence, herein petition. ISSUES: 1.

WON the Ombudsman-Visayas erred in not considering the Bill of Particulars submitted by the private complainants and should have limited the charges filed against the petitioner to the crimes mentioned in the Bill of Particulars -- NO

WON the Ombudsman violate the petitioner’s right to due process when it went beyond the bill of particulars – remanded to rtc for determination

FIRST ISSUE: The Office of the Solicitor General (OSG) counters that a bill of particulars is not allowed by Administrative Order No. 7, entitled Rules of Procedure in the Office of the Ombudsman (A.O. No. 7); and that therefore the Ombudsman cannot be bound by the Bill of Particulars submitted by private complainants. The Court agrees with the OSG. Clearly, the act of the prosecutor in granting the petitioner’s Motion for Bill of Particulars is an act contrary to the express mandate of A.O. No. 7, to wit: Section 4. Procedure- The preliminary investigation of cases falling under the jurisdiction of the Sandiganbayan and Regional Trial Courts shall be conducted in the manner prescribed in Section 3, Rule 112 of the Rules of Court, subject to the following provisions: xxxx d) No motion to dismiss shall be allowed except for lack of jurisdiction. Neither may a motion for a bill of particulars be entertained. If the respondent desires any matter in the complainant’s affidavit to be clarified, the particularization thereof may be done at the time of clarificatory questioning in the manner provided in paragraph (f) of this section. The Court finds the argument of petitioner that when the City Prosecutor was deputized by the Ombudsman to conduct the preliminary investigation, any action taken therein is, in effect, an action of the Ombudsman, who is bound by the act of the City Prosecutor in granting the Motion for Bill of Particulars, and is not tenable. Section 31 of R.A. No. 6770 or The Ombudsman Act of 1989 expressly provides that those designated or deputized to assist the Ombudsman shall be under his supervision and control. Indubitably, when the City Prosecutor is deputized by the Office of the Ombudsman, he comes under the “supervision and control” of the Ombudsman which means that he is subject to the power of the Ombudsman to direct, review, approve, reverse or modify the prosecutor’s decision. Consequently, in the present case, petitioner has no valid basis for insisting that the Ombudsman-Visayas must be bound by the erroneous act of the City Prosecutor in granting petitioner’s Motion for Bill of Particulars. Laws and jurisprudence grant the Office of the Ombudsman the authority to reverse or nullify the acts of the prosecutor pursuant to its power of control and supervision over deputized prosecutors. Hence, it was within the prerogative of the Ombudsman-Visayas not to consider the Bill of Particulars submitted by the private complainants. SECOND ISSUE: Petitioner claims that her right to due process was violated when the Ombudsman-Visayas filed the Informations charging her with violations of R.A. No. 3019, which went beyond the charges specified in the Bill of Particulars. Petitioner further argues that since there were no criminal charges stated in the subpoenas served on her on August 28, 2000 and August 30, 2000, she was not properly informed of the nature of the crime which she was supposed to Case Digests for Rules 10-19 | page 8

Civil Procedure | February 14, 2014 answer in her counter-affidavit While the Bill of Particulars is not allowed under the Rules of Procedure of the Office of the Ombudsman and therefore should not be the basis for determining what specific criminal charges should be filed against herein petitioner, it behooves the Ombudsman to accord the petitioner her basic rights to due process in the conduct of the preliminary investigation. In the pleadings submitted before this Court, petitioner complained that the subpoenas served on her did not state the law allegedly violated by her. In the Motion for Bill of Particulars she filed before the City Prosecutor, she declared that she was served with “subpoena together with the documents attached therein.” However, after a thorough examination of the records, the Court does not find the subpoenas and the alleged documents served on her. Absent the subpoenas and the documents attached to the subpoenas, how could it be intelligently determined whether she was fully apprised of the acts complained of and imputed to her; whether she was given the opportunity to submit an appropriate counter-affidavit to the charges; and whether the charges in the five Informations filed against petitioner were based on the same acts complained of and stated in the subpoena and the documents attached thereto? While there is no rule that the initial complaint filed against an accused with the prosecutor’s office should specifically state the particular law under which he is being charged, it is a basic elementary rule that the complaint should specifically allege the criminal acts complained of, so as to enable the accused to prepare his answer or counteraffidavit accurately and intelligently. The determination of the issue whether the criminal charges were indeed alleged or specified in the subpoenas and in the documents attached thereto, is a factual issue and therefore outside the province of this Court. It is a well-settled rule that the Supreme Court is not the proper venue in which to consider a factual issue, as it is not a trier of facts. In resolving the question whether petitioner was denied due process, the RTC or this Court cannot rely on the disputable presumption that official duties have been regularly performed. The RTC should have required the petitioner to submit the subpoenas and the attached documents served on her to enable it to examine the same and resolve whether the petitioner’s right to be informed was violated. It was only upon ascertaining this fact that the RTC could have validly determined whether petitioner was denied due process.

Request for extradition need not be filed in court, rather only need be received by the requested state. The request, as well as the accompanying documents, are valid despite lack of authentication. The pertinent extradition law does not provide for a requirement of authentication for the provisional arrest. Moreover, the authenticated copies of the decision or sentence imposed upon Munoz by HK and the warrant of arrest has already been received by the Phil. Furthermore, the extradition agreement only requires authentication for the request of extradition and not for the provisional arrest Facts: The Hong Kong Magistrate’s Court issued a warrant for the arrest of Munoz for accepting bribes in violation of a HK ordinance and for conspiring to defraud. Later, the Philippines DOJ was requested by the Mutual Legal Assistance Unit of the Hong Kong DOJ for the provisional arrest of Munoz pursuant to the RP-HK Extradition Agreement. The request was forwarded to the NBI. TC: Subsequently, a warrant for the arrest of Munoz was issued by the RTC. CA: Munoz filed with the CA a petition for certiorari, prohibition and mandamus with application forpreliminary mandatory injunction and/or writ of habeas corpus assailing the validity of the Order of Arrest, which the CA granted on the ff. grounds: 1) that the request was unauthenticated and merefacsimile copies which are insufficient to form a basis for its issuance; 2) that the 20 day period underPD 1069 or the Philippine extradition law was not amended by the RP-HK extradition agreement whichprovides for a 45 day period for provisional arrest; 3) the judge issued it without having personallydetermined the existence of probable cause; and 4) the requirement of dual criminality under thePhilippine extradition law has not been satisfied as the crimes complained of are not punishable by Philippine laws. Cuevas, as Sec. of DOJ filed the instant petition. Munoz filed for release contending that since he has been detained beyond 20 days, the maximum for the provisional arrest, without a request for extradition being received by the DOJ, he should be released.Cuevas, on the other hand, avers that: i) The Philippine DOJ had already received a formal request for extradition.

WHEREFORE, the petition is PARTIALLY GRANTED. The assailed Orders dated September 24, 2002 and December 20, 2002 of the Regional Trial Court of BagoCity, Branch 62 are SET ASIDE. The case is remanded to the trial court for determination whether petitioner was denied due process in the conduct of the preliminary investigation.

ii) There was urgency for the provisional arrestiii)The municipal law does not subordinate an international agreement iii) The supporting documents for the request need not be authenticated iv) There was factual and legal bases in determining probable cause v) The offense of accepting an advantage as an agent is punishable under the Anti-Graftand Corrupt Practices Act

RULE 13 Filing and Service of Pleadings, Judgments and Other Papers

Issue:

Justice Serafin R. Cuevas vs. Juan Antonio Muñoz G.R. No. 140520, December 18, 2000 Doctrine:

(1) Whether the provisional warrant of arrest issued by the RTC was void NO (2) Whether the request for extradition need to be filed in court NO SC: Sec. 20 of PD 1069 provides that the requesting state may, pursuant to the Case Digests for Rules 10-19 | page 9

Civil Procedure | February 14, 2014 relevant treaty or convention and while the same remains in force, request for the provisional arrest of the accused, pending receipt of the request for extradition. In urgent cases, the person sought may, in accordance with the law of the requested Party, be provisionally arrested on the application of the requesting Party. There was urgency in the present case as there was a concern of Munoz being a flight risk if he will be informed of the pending request for extradition especially given the fact that if he will be found guilty of the charges against him, the penalties are of such gravity as to increase the probability of Munoz absconding if allowed provisional liberty. Sec. 20 (d) of PD 1069 provides that if within a period of 20 days after the provisional arrest the Secretary of Foreign Affairs has not received the request for extradition, the accused shall be released from custody. While the RP-HK Extradition Agreement provides for 45 days. Cuevas’ argument that the latter agreement amended PD 1069 has been rendered moot and academic by the fact that the Phil. DOJ had already received a request for extradition as early as 12 days after his provisional arrest. Contrary to Munoz’s contention, the request for extradition need not be filed in court, rather only need be received by the requested state. The request, as well as the accompanying documents, are valid despite lack of authentication. The pertinent extradition law does not provide for a requirement of authentication for the provisional arrest. Moreover, the authenticated copies of the decision or sentence imposed upon Munoz by HK and the warrant of arrest has already been received by the Phil. Furthermore, the extradition agreement only requires authentication for the request of extradition and not for the provisional arrest. Provisional arrest is a solution to the impending risk of flight as the process of preparing a formal request for extradition and its accompanying documents is time-consuming and leakage-prone. Thus, it is an accepted practice for the requesting state to rush its request in the form of a telex or diplomatic cable or facsimile. The temporary hold on private respondent’s privilege of notice and hearing is a soft restraint on his right to due process which will not deprive him of fundamental fairness should he decide to resist the request for his extradition to HK. There is no denial of due process as long as fundamental fairness is assured a party. As to Munoz’ contention that it should be the Foreign Diplomat who should send the request for provisional arrest, as required by PD 1069, the invoked provision only provides for the request for extradition and not the provisional arrest. There is sufficient compliance with the law if the request for provisional arrest is made by an official who is authorized by the government of the requesting state to make such a request and the authorization is communicated to the requested state.

AFP Mutual Benefit Association vs. Court of Appeals G.R. No. 104769, March 2, 2000 Doctrine: Notice of Lis Pendens… there is no such action as one for annotation of lis pendens. A notice of lis pendens is not ad can not be sought as a principal action for relief as the notice of lis pendens is ordinarily recorded without the intervention of the court… In case the annotation of Lis Pendens is denied by the Register of Deeds, the same could be appealed en consulta to the commissioner of Land Registration, and the resolution may then be appealed to the CA...The annotation of notice of Lis Pendens on the titles of the property is not proper in cases where the action is in personam Facts: Ivestco Inc. was the owner of (6) parcels of land. Investco then agreed to sell the (6) parcels of land to Solid Homes. Solid Homes would be given (5) years to pay the balance in semi-annual installments. After paying (4) semi annual installments and a portion of the fifth installment, Solid Homes made no further payment. Likewise, the postdated checks were dishonored.

Investco filed a case with the Court of First Instance a claim to collect from Solid Homes the remaining balance. Solid Homes, likewise filed with the trial court a complaint alleging that the purchase pruce under the contract was not yet due. As such, it prayed for dismissal. Solid Homes then filed with the Register of Deeds a notice of lis pendens. However, the notice was not annotated on the titles in the name of Investco. Investco then executed a deed of absolute sale to AFP Mutual Benefit Association Inc (AFP MBAI). AFP MBAI then verified the records of the Register of Deeds, and Metropolitan Trial Court and found the absence of any lis pendens. AFP MBAI completed its payments and the Register of Deeds issued Transfer Certificates. Solid Homes prayed that the Register of Deeds be ordered to annotate the titles registered in the name of Investco the notice of lis pendens Issue: Whether Solid Homes is entitled to the annotation of its notice of lis pendens? Held: NO, Investco’s complaint was an action to cellect sums of money, and damages to recover from Solid Homes unpaid installments on the purchase price of the property. In such a case, the annotation of notice of lis pendens on the titles of property was not proper as the action is in personam. The Doctrine of Lis Pendens is inapplicable to this case. Notice of Lis Pendens is not and can not be sought as a principal action for relief. The notice is but an incident to an extra-judicial action. Lis Pendens is intended merely as constructive advice to warn people who deal with such property Eduardo Fernandez, et al vs. Court of Appeals G.R. No. 115813, October 16, 2000 Doctrine: The trial court's inherent power to cancel a notice of lis pendens is exercised only under exceptional circumstances, such as: where such circumstances are imputable to the party who caused the annotation; where the litigation was unduly prolonged to the prejudice of the other party because of several continuances procured by petitioner; where the case which is the basis for the lis pendens notation was dismissed for non-prosequitur on the part of the plaintiff; or where judgment was rendered against the party who caused such a notation. Facts: Petition involves Lot 435 of the Bacolod cadastre originally titled to petitioners' predecessor-in-interest, Prudencio Fernandez. After Fernandez acquired ownership of the lot, he tried to eject private respondent Jesus Ciocon and some other occupants off the property. Allegedly, Ciocon asked Fernandez that he be given a "last chance" to repurchase the lot. Fernandez refused. After this rejection Ciocon instituted a civil case (Civil Case No. 7687) for reconveyance of the land or what remains of it after deducting portions already sold to others. Ciocon claimed he had paid for the full reconveyance price to Fernandez on February 7, 1958 for which Fernandez signed a receipt. Fernandez through his guardian ad litem denied receiving any money from Ciocon and averred that Ciocon's receipt was a forgery. Fernandez died and is now substituted by his heirs. Respondents Levita Llera, Hospicio Pedrina, Rufo Calves, and Monserrat Villalba were intervenors in said suit who claimed that they had purchased portions of Lot 435 from Ciocon. Another case (Civil Case No. 7723) was filed by was filed by Alfonso Jardenil, Anunciacion Jover, and Vicente Urbanozo claiming that they had purchased portions of the lot as well from Ciocon. RTC: noting that the parties were indifferent about submitting to a decision based on extant but incomplete records proceeded to render judgment dismissing both complaints and Case Digests for Rules 10-19 | page 10

Civil Procedure | February 14, 2014 ordering private respondent Ciocon and the intervenors to deliver immediate possession of Lot No. 435 to the heirs of Fernandez.

The motion for reconsideration of the dismissal of the petition was denied. Hence, this petition.

Private respondents and intervenors timely filed their notices of appeal Judge Jocson (same judge in RTC), issued an Order requiring the parties to state in writing within fifteen (15) days whether or not they agree to have the records transmitted to the Court of Appeals with incomplete transcripts of stenographic notes, and if they should fail to reply after fifteen (15) days from receipt of the order, the court would consider the parties' silence as conformity and order the transmittal of the extant records to the Court of Appeals.

Issue: WON the the cancellation of lis pendens was issued without jurisdiction and in violation of due process and fundamental rules of procedure? Held: YES. The order of cancellation of notation of lis pendens was based on the ex parte approval of the motion for execution pending appeal of the trial court's second decision. This order is fatally flawed, for being the result of a hearing ex parte, hence without notice to the adverse party and thereby violative of due process.

After a month, Court ordered transmittal of the records to the appellate court. Court of Appeals noted the incompleteness of the records and ordered the re-taking and completion of missing testimonies. Ciocon filed a Motion to have Above-Entitled Cases Decided Anew, which Judge Jocson granted. Judge Jocson reasoned that since the cases were decided on the basis of the records taken by his predecessor, and without the testimony of Roberto Tolentino, the handwriting expert who testified on the alleged forgery of Fernandez' signature, granting the motion was in the best interest of justice. 2nd judgment of RTC (by Judge Jocson): In the second decision, the judge explained that the Court of Appeals, after receiving the notices of appeal and the incomplete records, "remanded" the case and ordered the re-taking of the testimonies of witnesses Ciocon and Tolentino. The second decision was a complete reversal of the first decision and directed the return of the disputed lot to Ciocon and intervenors except the portions still being litigated. It also ordered the cancellation of the new title issued to Fernandez and the issuance of a new title in the name of Jesus Ciocon and intervenors. Oct. 25 Petitioners appealed the second decision. → day after: Ciocon moved for execution pending appeal. → 6 days after: trial court granted the motion ex parte. The TCT in the name of Fernandez was cancelled and a new TCT was issued in the name of respondent Ciocon. petitioners' motion for reconsideration of the order was denied. Ciocon filed a motion asking that the Register of Deeds of Bacolod City be directed to cancel entries in TCT No. T-164785, particularly Entries Nos. 44213, 1063, 5121, 5381 and 13188 upon the plaintiff's filing of additional bond of P300,000.00. → Entry No. 178073, the notice of lis pendens involved in Civil Case No. 7687 and 7723, was not among the entries listed in the motion. → only after a month, Entry No. 178073 was annotated. → Judge Jocson ordered the cancellation of the entries of the notices of lis pendens Ciocon then sold the subject property to one Eduardo Gargar who was issued with a new TCT in Gargar’s name. Gargar immediately mortgaged the property to the Rizal Commercial and Banking Corporation to secure a loan for P2,000,000.00. Trial court issued another Order, directing the transmittal of the records to the Court of Appeals. Petitioners filed a petition for certiorari, prohibition and mandamus with application for preliminary injunction under Rule 65 to annul and set aside the Order of the RTC cancelling the lis pendens notations in the TCT, and its Decision setting aside its original decision for having been issued without jurisdiction.

The cancellation order of the notice of lis pendens in this case, Entry No. 178073, should be set aside for three reasons. First, it was granted ex parte. Petitioners were deprived of their right to be heard on notice. Second, there was no showing that the annotation of the notice was for the purpose of molesting the adverse party, nor that it was not necessary to protect the rights of those who sought the annotation. And third, at the time of the order of cancellation of the notice, the trial court no longer had jurisdiction. While the trial court has inherent power to cancel a notice of lis pendens, such power is exercised under express provisions of law. A notice of lis pendens is an announcement to the whole world that a particular real property is in litigation. Such announcement is founded upon public policy and necessity, the purpose of which is to keep the properties in litigation within the power of the court until the litigation is terminated and to prevent the defeat of the judgment or decree by subsequent alienation. Under Sec. 14 of Rule 13 of the 1997 Rules of Civil Procedure, a notice of lis pendens may be canceled only after proper showing that the purpose of its annotation is for molesting the adverse party, or that it is not necessary to protect the rights of the party who caused it to be annotated. The trial court's inherent power to cancel a notice of lis pendens is exercised only under exceptional circumstances, such as: where such circumstances are imputable to the party who caused the annotation; where the litigation was unduly prolonged to the prejudice of the other party because of several continuances procured by petitioner; where the case which is the basis for the lis pendens notation was dismissed for non-prosequitur on the part of the plaintiff; or where judgment was rendered against the party who caused such a notation. In such instances, said notice is deemed ipso facto cancelled. These exceptional circumstances are not present in this case. It will be noted that although the case took long to resolve, it was not due to petitioners. Petitioners had in fact been adjudged owners of the lot in the first decision and it was private respondents who filed a motion that the case be decided anew, despite a timely notice of appeal from the first decision. Furthermore, it was the Court of Appeals which ordered the re-taking of the lost testimonies, which the trial court erroneously took as a "remand" of the case, resulting in a second decision which was also timely appealed. The records mentioned no such order to ''remand'' by the Court of Appeals. The cancellation of the lis pendens notations should not have been ordered since there had been no final judgment yet, the decisions having been timely appealed. A notice of lis pendens cannot be ordered cancelled on an ex parte motion, much less without any motion at all. There should be notice to the party who caused the annotation so that he may be heard to object to the cancellation of his notice and show to the court that the notice of lis pendens is necessary to protect his rights and is not merely to molest the other party. Private respondent Ciocon's motion to cancel certain notices of lis pendens did not include a request to cancel Entry No. 178073 in particular, and it certainly could not have been Case Digests for Rules 10-19 | page 11

Civil Procedure | February 14, 2014 included since the entry was annotated in the TCT only a month after the filing of the motion. However, Judge Jocson's order of cancellation included Entry No. 178073. → a notice of lis pendens cannot be ordered cancelled on an ex parte motion, much less without any motion at all. There should be notice to the party who caused the annotation so that he may be heard to object to the cancellation of his notice and show to the court that the notice of lis pendens is necessary to protect his rights and is not merely to molest the other party.

that military men who interrogated them employed threats, tortures and other forms of violence on them in order to obtain incriminatory information or confessions and in order to punish them; that all violations of plaintiffs constitutional rights were part of a concerted and deliberate plan to forcibly extract information and incriminatory statements from plaintiffs and to terrorize, harass and punish them, said plans being previously known to and sanctioned by defendants. Plaintiffs sought actual/compensatory and exemplary damages and attorney's fees.

Neither can a notice of lis pendens be ordered cancelled upon the mere filing of a bond by the party on whose title the notice is annotated. The ultimate purpose of the annotation which is to keep the properties in litigation within the power of the court and to prevent the defeat of the judgment by subsequent alienation will be rendered meaningless if private respondents are allowed to file a bond, regardless of the amount, in substitution of said notice. Aberca et al. v. Ver, et al., G.R. No. 166216, March 14, 2012 SUMMARY: This petition for certiorari presents vital issues not heretofore passed upon by this Court. It poses the question whether the suspension of the privilege of the writ of habeas corpus bars a civil action for damages for illegal searches conducted by military personnel and other violations of rights and liberties guaranteed under the Constitution. If such action for damages may be maintained, who can be held liable for such violations: only the military personnel directly involved and/or their superiors as well. FACTS: SUMMARY: This petition for certiorari presents vital issues not heretofore passed upon by this Court. It poses the question whether the suspension of the privilege of the writ of habeas corpus bars a civil action for damages for illegal searches conducted by military personnel and other violations of rights and liberties guaranteed under the Constitution. If such action for damages may be maintained, who can be held liable for such violations: only the military personnel directly involved and/or their superiors as well. FACTS: This case stems from alleged illegal searches and seizures and other violations of the rights and liberties of plaintiffs by various intelligence units of the Armed Forces of the Philippines, known as Task Force Makabansa (TFM) ordered by General Fabian Ver "to conduct pre-emptive strikes against known communist-terrorist (CT) underground houses in view of increasing reports about CT plans to sow disturbances in Metro Manila," Plaintiffs allege, among others, that complying with said order, elements of the TFM raided several places, employing in most cases defectively issued judicial search warrants; that during these raids, certain members of the raiding party confiscated a number of purely personal items belonging to plaintiffs; that plaintiffs were arrested without proper warrants issued by the courts; that for some period after their arrest, they were denied visits of relatives and lawyers; that plaintiffs were interrogated in violation of their rights to silence and counsel;

A motion to dismiss was filed by defendants, through their counsel, then Solicitor-General Estelito Mendoza, alleging that (1) plaintiffs may not cause a judicial inquiry into the circumstances of their detention in the guise of a damage suit because, as to them, the privilege of the writ of habeas corpus is suspended; (2) assuming that the courts can entertain the present action, defendants are immune from liability for acts done in the performance of their official duties; and (3) the complaint states no cause of action against the defendants. Opposition to said motion to dismiss was filed by plaintiffs. The Regional Trial Court (Judge Fortun Presiding) issued a resolution granting the motion to dismiss. It found that (1) the plaintiffs may not cause a judicial inquiry into the circumstances of their detention in the guise of a damage suit because, as to them, the privilege of the writ of habeas corpus is suspended; (2) that assuming that the court can entertain the present action, defendants are immune from liability for acts done in the performance of their official duties; and (3) that the complaint states no cause of action against defendants, since there is no allegation that the defendants named in the complaint confiscated plaintiffs' purely personal properties in violation of their constitutional rights, and with the possible exception of Major Rodolfo Aguinaldo and Sergeant Bienvenido Balabo committed acts of torture and maltreatment, or that the defendants had the duty to exercise direct supervision and control of their subordinates or that they had vicarious liability as employers under Article 2180 of the Civil Code. The lower court stated, "After a careful study of defendants' arguments, the court finds the same to be meritorious and must, therefore, be granted. On the other hand, plaintiffs' arguments in their opposition are lacking in merit." A motion to set aside the order dismissing the complaint and a supplemental motion for reconsideration was filed by the plaintiffs. Judge Fortun issued an order voluntarily inhibiting himself from further proceeding in the case and leaving the resolution of the motion to set aside the order of dismissal to Judge Lising, "to preclude any suspicion that he (Judge Fortun) cannot resolve [the] aforesaid pending motion with the cold neutrality of an impartial judge and to put an end to plaintiffs assertion that the undersigned has no authority or jurisdiction to resolve said pending motion." This order prompted plaintiffs to reesolve an amplificatory motion for reconsideration signed in the name of the Free Legal Assistance Group (FLAG) of Mabini Legal Aid Committee, by Attys. Joker P. Arroyo, Felicitas Aquino and Arno Sanidad on April 12, 1984. On May 2,1984, the defendants filed a comment on said amplificatory motion for reconsideration. In an order dated May 11, 1984, the trial court, Judge Esteban Lising, Presiding, without acting on the motion to set aside order of November 8, 1983, issued an order stating that as appearing from the records, several plaintiffs failed to file a motion to reconsider the Order of November 8, 1983, dismissing the complaint, nor interposed an appeal therefrom within the reglementary period, as prayed for by the defendants, said Order is now final against said plaintiffs. Case Digests for Rules 10-19 | page 12

Civil Procedure | February 14, 2014 The plaintiffs filed a motion for reconsideration on May 28,1984, alleging that it was not true that several of the plaintiffs failed to file a motion to reconsider the order of November 8, 1983 dismissing the complaint, within the reglementary period. Plaintiffs claimed that the motion to set aside the order of November 8, 1983 and the amplificatory motion for reconsideration was filed for all the plaintiffs, although signed by only some of the lawyers.

FACTS: In 1994, petitioner FEU-NRMF (a medical institution organized and existing under the Philippine laws), and respondent union (a legitimate labor organization and is the duly recognized representative of the rank and file employees of petitioner), entered into a CBA that will expire on 30 April 1996. In view of the forthcoming expiry, respondent union sent a letter-proposal to petitioner FEU-NRMF stating their economic and non-economic proposals for thenegotiation of the new CBA.

The RTC denied such motions nevertheless. Hence this petition for certriorari. ISSUE (relevant to CivPro): W/N The RTC erred in dismissing the complaint with respect to plaintiffs Rogelio Aberca, Danilo de la Puente, Marco Palo, Alan Jazminez, Alex Marcelino, Elizabeth Protacio-Marcelino, Alfredo Mansos and Rolando Salutin (the "several plaintiffs" mentioned earlier), on the basis of the alleged failure of said plaintiffs to file a motion for reconsideration of the court's resolution of November 8, 1983, granting the respondent's motion to dismiss?

Petitioner FEU-NRMF rejected respondent union’s demands and proposed to maintain the same provisions of the old CBA reasoning that due to financial constraints, it cannot afford to accede to a number of their demands. In an effort to arrive at a compromise, subsequent conciliation proceedings were conducted before the NCMB, but the negotiation failed. Respondent union filed a Notice of Strike before NCMB on the ground of bargaining deadlock.

HELD: Yes.

Union staged a strike.

It is undisputed that a timely motion to set aside said order of November 8, 1983 was filed by 'plaintiffs, through counsel. True, the motion was signed only by Atty. Joker P. Arroyo, counsel for Benjamin Sesgulido; Atty. Antonio Rosales, counsel for Edwin Lopez and Manuel Martin Guzman; Atty. Pedro B. Ella, Jr., counsel for Nestor Bodino and Carlos Palma; Atty. Arno V. Sanidad, counsel for Arturo Tabara; Atty. Felicitas S. Aquino, counsel for Joseph Olayer; and Atty. Alexander Padilla, counsel for Rodolfo Benosa.

Petitioner FEU-NRMF filed a Petition for the Assumption of Jurisdiction or for Certification of Labor Dispute with the NLRC, underscoring the fact that it is a medical institution engaged in the business of providing healthcare for its patients. Secretary of Labor granted the petition and an Order assuming jurisdiction over the labor dispute was issued, thereby prohibiting any strike or lockout and enjoining the parties from committing any acts which may exacerbate the situation.

But the body of the motion itself clearly indicated that the motion was filed on behalf of all the plaintiffs. And this must have been also the understanding of defendants' counsel himself for when he filed his comment on the motion, he furnished copies thereof, not just to the lawyers who signed the motion, but to all the lawyers of plaintiffs, to wit: Attys. Jose Diokno, Procopio Beltran, Rene Sarmiento, Efren Mercado, Augusto Sanchez, Antonio Rosales, Pedro Efla Jr., Arno Sanidad, Alexander Padilla, Joker Arroyo, Rene Saguisag, Ramon Esguerra and Felicitas S. Aquino.

September 6, 1996, Francisco Escuadra, the NLRC process server, certified that, on September 5, 1996 at around 4:00 P.M., he attempted to serve a copy of the Assumption of Jurisdiction Order (AJO) to the union officers but since no one was around at the strike area, he just posted copies of the said Order at several conspicuous places within the premises of the hospital.

In filing the motion to set aside the resolution of November 8, 1983, the signing attorneys did so on behalf of all the plaintiff. They needed no specific authority to do that. The authority of an attorney to appear for and in behalf of a party can be assumed, unless questioned or challenged by the adverse party or the party concerned, which was never done in this case. Thus, it was grave abuse on the part of respondent judge to take it upon himself to rule that the motion to set aside the order of November 8, 1953 dismissing the complaint was filed only by some of the plaintiffs, when by its very language it was clearly intended to be filed by and for the benefit of all of them. It is obvious that the respondent judge took umbrage under a contrived technicality to declare that the dismissal of the complaint had already become final with respect to some of the plaintiffs whose lawyers did not sign the motion for reconsideration. Such action tainted with legal infirmity cannot be sanctioned.

Striking employees continued holding a strike until 12 September 1996, claiming that they had no knowledge that the Secretary of Labor already assumed jurisdiction over the pending labor dispute as they were not able to receive a copy of the AJO. Secretary of Labor issued another Order directing all the striking employees to return to work and the petitioner FEU-NRMF to accept them under the same terms and conditions prevailing before the strike. A Return to Work Agreement was executed by the disputing parties. Subsequently, petitioner FEU-NRMF filed a case before the NLRC, contending that respondent union staged the strike in defiance of the AJO, hence, it was illegal. LABOR ARBITER: LA declared the strike illegal and allowed dismissal of union officers for conducting the strike in defiance of the AJO. NLRC: NLRC affirmed in toto the Decision of the LA.

FEU-NRMF v. FEU-NRMF AFW, G.R. No. 168362, October 16, 2006 DOCTRINE: Personal service effectively ensures that the notice desired under the constitutional requirement of due process is accomplished. If, however, efforts to find the party concerned personally would make prompt service impossible, service may be completed by substituted service, that is, by leaving a copy, between the hours of eight in the morning and six in the evening, at the party’s or counsel’s residence, if known, with a person of sufficient age and discretion then residing therein.

CA:CA granted the Petition and reversed the Resolutions of NLRC. ISSUE: W/N the service of the AJO was validly effected by the process server so as to bind the respondent union and hold them liable for the acts committed subsequent to the issuance of the said Order.

Case Digests for Rules 10-19 | page 13

Civil Procedure | February 14, 2014 HELD: The process server resorted to posting the Order when personal service was rendered impossible since the striking employees were not present at the strike area. This mode of service, however, is not sanctioned by either the NLRC Revised Rules of Procedure or the Revised Rules of Court. The pertinent provisions of the NLRC Revised Rules of Procedure read: “Section 6. Service of Notices and Resolutions. (a) Notices or summons and copies of orders, shall be served on the parties to the case personally by the Bailiff or duly authorized public officer within 3 days from receipt thereof or by registered mail; Provided that in special circumstances, service of summons may be effected in accordance with the pertinent provisions of the Rules of Court; Provided further, that in cases of decisions and final awards, copies thereof shall be served on both parties and their counsel or representative by registered mail; Provided further, that in cases where a party to a case or his counsel on record personally seeks service of the decision upon inquiry thereon, service to said party shall be deemed effected upon actual receipt thereof; Provided finally, that where parties are so numerous, service shall be made on counsel and upon such number of complainants, as may be practicable, which shall be considered substantial compliance with Article 224(a) of the Labor Code, as amended.” An Order issued by the Secretary of Labor assuming jurisdiction over the labor dispute is not a final judgment for it does not dispose of the labor dispute with finality. Consequently, the rule on service of summons and orders, and not the proviso on service of decisions and final awards, governs the service of the Assumption of Jurisdiction Order. Under the NLRC Revised Rules of Procedure, service of copies of orders should be made by the process server either personally or through registered mail. However, due to the urgent nature of the AJO and the public policy underlying the injunction carried by the issuance of the said Order, service of copies of the same should be made in the most expeditious and effective manner, without any delay, ensuring its immediate receipt by the intended parties as may be warranted under the circumstances. Thus, personal service is the proper mode of serving the AJO. It is also provided under the same rules that in special circumstances, service of summons may be effected in accordance with the pertinent provisions of the Rules of Court.

effecting substituted service, in case personal service is impossible by the absence of the party concerned. Clearly, personal service effectively ensures that the notice desired under the constitutional requirement of due process is accomplished. If, however, efforts to find the party concerned personally would make prompt service impossible, service may be completed by substituted service, that is, by leaving a copy, between the hours of eight in the morning and six in the evening, at the party’s or counsel’s residence, if known, with a person of sufficient age and discretion then residing therein. Substituted service derogates the regular method of personal service. It is therefore required that statutory restrictions for effecting substituted service must be strictly, faithfully and fully observed. Failure to comply with this rule renders absolutely void the substituted service along with the proceedings taken thereafter. The underlying principle of this rigid requirement is that the person, to whom the orders, notices or summons are addressed, is made to answer for the consequences of the suit even though notice of such action is made, not upon the party concerned, but upon another whom the law could only presume would notify such party of the pending proceedings. Applying this principle in the case at bar, presumption of receipt of the copies of the Assumption of Jurisdiction Order could not be lightly inferred from the circumstances considering the adverse effect in case the parties failed to heed to the injunction directed by such Order. Worthy to note that in a number of cases, we have ruled that defiance of the assumption and return-to-work orders of the Secretary of Labor after he has assumed jurisdiction is a valid ground for the loss of employment status of any striking union officer or member. Employment is a property right of which one cannot be deprived of without due process.Due process here would demand that the respondent union be properly notified of the Assumption of Jurisdiction Order of the Secretary of Labor enjoining the strike and requiring its members to return to work. Thus, there must be a clear and unmistakable proof that the requirements prescribed by the Rules in the manner of effecting personal or substituted service had been faithfully complied with. Merely posting copies of the Assumption of Jurisdiction Order does not satisfy the rigid requirement for proper service outlined by the above stated rules. Needless to say, the manner of service made by the process server was invalid and irregular. Respondent union could not therefore be adjudged to have defied the said Order since it was not properly apprised thereof. Accordingly, the strike conducted by the respondent union was valid under the circumstances. SC: DENIED

Parenthetically, the manner upon which personal service may be made is prescribed by the following provisions of the Revised Rules of Court: Rule 13. Filing and Service of Pleadings, Judgments And Other Papers. Section 6. Personal service. – Service of the papers may be made by delivering personally a copy to the party or his counsel, or by leaving it in his office with his clerk or with a person having charge thereof. if no person is found in his office, or his office is not known, or he has no office, then by leaving a copy, between the hours of eight in the morning and six in the evening, at the party’s or counsel’s residence, if known, with a person of sufficient age and discretion then residing therein. Let it be recalled that the process server merely posted copies of the Assumption of Jurisdiction Order in conspicuous places in the hospital. Such posting is not prescribed by the rules, nor is it even referred to when the said rules enumerated the different modes of

Atlantic Erectors v. Herbal Cove, G.R. No. 148568, March 20, 2003 DOCTRINE: Civil Procedure; Actions; Lis Pendens; Generally only instances which a notice of lis pendens may be availed of; Annotation also applies to suits seeking to establish a right to, or an equitable estate or interest in a specific real property, to enforce a lien, a charge or an encumbrance against it. – As a general rule, the only instances in which a notice of lis pendens may be availed of are as follows: (a)an action to recover a possession of real estate; (b) an action for partition; and (c) any other court proceedings that directly affect the title to the land of the building thereon or the use or the occupation thereof. Additionally, this Court has held that resorting to lis pendens is not necessarily confined to cases that involve title to or possession of real property. This annotation also applies to suits seeking to establish a right to, or an equitable estate or interest in, a specific real property; or to enforce a lien, a charge or an encumbrance against it. Case Digests for Rules 10-19 | page 14

Civil Procedure | February 14, 2014 Same; Same; Same; The annotation of a notice of lis pendens on titles to properties is not proper in cases wherein the proceedings instituted are actions in personam. – When a complaint or an action is determined by the courts to be in personam, the rationale for or purpose of the notice of lis pendens ceases to exist. To be sure, this Court has expressly and categorically declared that the annotation of a notice of lis pendens on title to properties is not proper in cases wherein the proceedings instituted are actions in personam. FACTS: On June 20, 1996, Herbal Cove Realty Corp. (respondent) and Atlantic Erectors, Inc. (petitioner) entered into a Construction Contract whereby the former agreed to construct four (4) units of townhouses and one (1) single detached unit for an original contract price of P15,726,745.19 which was later adjusted to P16,726,745.19 as a result of additional works. The contract period is 180 days commencing on July 7, 1996 and to terminate on January 7, 1997. AEI claimed that the said period was not followed due to reasons attributable to respondent, namely: suspension orders, additional works, force majeure, and unjustifiable acts of omission or delay on the part of said respondent. Respondent, however, denied such claim and instead pointed to AEI as having exceeded the 180 day contract period aggravated by defective workmanship and utilization of materials which are not in compliance with specifications. xxx

xxx

xxx

On November 21, 1997, Atlantic Erectors, Inc. filed a complaint for sum of money with damages with the Regional Trial Court of Makati. In said initiatory pleading, AEI asked for the following reliefs: 'AFTER DUE NOTICE AND HEARING, to order x x x defendant to: 1. Pay plaintiff the sum of P4,854,229.94 for the unpaid construction services already rendered; 2. To x x x pay plaintiff the sum of P1,595,551.00 for the construction materials, equipment and tools of plaintiff held by defendant; 3. To x x x pay plaintiff the sum of P2,250,000.00 for the [loss] x x x of expected income from the construction project; 4. [T]o x x x pay plaintiff the sum of P800,000.00 for the cost of income by way of rental from the equipment of plaintiff held by defendants; 5. To x x x pay plaintiff the sum of P5,000,000.00 for moral damages; 6. To x x x pay plaintiff the sum of P5,000,000.00 for exemplary damages; 7. To x x x pay plaintiff the sum equivalent of 25% of the total money claim plus P200,000.00 acceptance fee and P2,500.00 per court appearance; 8. To x x x pay the cost of suit.' On the same day of November 21, 1997, AEI filed a notice of lis pendens for annotation of the pendency of the civil case on titles TCTs nos. T-30228, 30229, 30230, 30231 and 30232. When the lots covered by said titles were subsequently subdivided into 50 lots, the notices of lis pendens were carried over to the titles of the subdivided lots, i.e., Transfer Certificate of Title Nos. T-36179 to T-36226 and T-36245 to T-36246 of the Register of Deeds of Tagaytay City. On January 30, 1998, Herbal Cove Realty Corp. and x x x Ernest L. Escaler, filed a Motion to Dismiss petitioner's Complaint for lack of jurisdiction and for failure to state a cause of action. They claimed that the Makati RTC has no jurisdiction over the subject matter of the

case because the parties' Construction Contract contained a clause requiring them to submit their dispute to arbitration. xxx

xxx

xxx

On March 17, 1998, Makati RTC Judge dismissed the Complaint as against Herbal Cove for AEI’s failure to comply with a condition precedent to the filing of a court action which is the prior resort to arbitration and as against x x x Escaler for failure of the Complaint to state a cause of action x x x. AEI filed a Motion for Reconsideration of the March 17, 1998 dismissal order. Herbal Cove filed its Opposition thereto. On April 24, 1998, Herbal Cove filed a Motion to Cancel Notice of Lis Pendens. It argued that the notices of lis pendens are without basis because petitioner's action is a purely personal action to collect a sum of money and recover damages and x x x does not directly affect title to, use or possession of real property. RTC Judge granted respondent's Motion to Cancel Notice of Lis Pendens x x x: AEI filed a Motion for Reconsideration of the aforesaid July 30, 1998 Order to which Herbal Cove filed an Opposition. In a November 4, 1998 Order of RTC Makati while finding no merit in the grounds raised by AEI in its Motion for Reconsideration, reversed his July 30, 1998 Order and reinstated the notices of lis pendens CA reinstated the RTC Order granting Herbal Cove’s Motion to Cancel the Notice of Lis Pendens. According to the appellate court, the re-annotation of those notices was improper for want of any legal basis. It specifically cited Section 76 of Presidential Decree No. 1529 (the Property Registration Decree). The decree provides that the registration of such notices is allowed only when court proceedings directly affect the title to, or the use or the occupation of, the land or any building thereon. The CA opined that the Complaint filed by petitioner in Civil Case No. 97-2707 was intended purely to collect a sum of money and to recover damages. The appellate court ruled that the Complaint did not aver any ownership claim to the subject land or any right of possession over the buildings constructed thereon. It further declared that absent any claim on the title to the buildings or on the possession thereof, the notices of lis pendens had no leg to stand on. The appellate court further explained that the re-annotation of the Notice of Lis Pendens was no longer warranted after the court a quo had ruled that the latter had no jurisdiction over the case. The former held that the rationale behind the principle of lis pendens -- to keep the subject matter of the litigation within the power of the court until the entry of final judgment -- was no longer applicable. The reason for such inapplicability was that the Makati RTC already declared that it had no jurisdiction or power over the subject matter of the case. Finally, the CA opined that petitioner's Complaint had not alleged or claimed, as basis for the continued annotation of the Notice of Lis Pendens, the lien of contractors and laborers under Article 2242 of the New Civil Code. Moreover, petitioner had not even referred to any lien of whatever nature. Verily, the CA ruled that the failure to allege and claim the contractor's lien did not warrant the continued annotation on the property titles of Respondent Herbal Cove. Case Digests for Rules 10-19 | page 15

Civil Procedure | February 14, 2014 enforcement as follows: ISSUE: Whether or not money claims representing cost of materials for and labor on the houses constructed on a property [are] a proper lien for annotation of lis pendens on the property title. HELD: (Petition has no merit) As a general rule, the only instances in which a notice of lis pendens may be availed of are as follows: (a) an action to recover possession of real estate; (b) an action for partition; and (c) any other court proceedings that directly affect the title to the land or the building thereon or the use or the occupation thereof. Additionally, this Court has held that resorting to lis pendens is not necessarily confined to cases that involve title to or possession of real property. This annotation also applies to suits seeking to establish a right to, or an equitable estate or interest in, a specific real property; or to enforce a lien, a charge or an encumbrance against it. Apparently, petitioner proceeds on the premise that its money claim involves the enforcement of a lien. Since the money claim is for the nonpayment of materials and labor used in the construction of townhouses, the lien referred to would have to be that provided under Article 2242 of the Civil Code. This provision describes a contractor's lien over an immovable property as follows: "Art. 2242. With reference to specific immovable property and real rights of the debtor, the following claims, mortgages and liens shall be preferred, and shall constitute an encumbrance on the immovable or real right: xxx

xxx

xxx

"(3) Claims of laborers, masons, mechanics and other workmen, as well as of architects, engineers and contractors, engaged in the construction, reconstruction or repair of buildings, canals or other works, upon said buildings, canals or other works; "(4) Claims of furnishers of materials used in the construction, reconstruction, or repair of buildings, canals or other works, upon said buildings, canals or other works." However, a careful examination of petitioner's Complaint, as well as the reliefs it seeks, reveals that no such lien or interest over the property was ever alleged. The Complaint merely asked for the payment of construction services and materials plus damages, without mentioning -- much less asserting -- a lien or an encumbrance over the property. Verily, it was a purely personal action and a simple collection case. It did not contain any material averment of any enforceable right, interest or lien in connection with the subject property. As it is, petitioner's money claim cannot be characterized as an action that involves the enforcement of a lien or an encumbrance, one that would thus warrant the annotation of the Notice of Lis Pendens. Indeed, the nature of an action is determined by the allegations of the complaint. Even assuming that petitioner had sufficiently alleged such lien or encumbrance in its Complaint, the annotation of the Notice of Lis Pendens would still be unjustified, because a complaint for collection and damages is not the proper mode for the enforcement of a contractor's lien. In J.L. Bernardo Construction v. Court of Appeals, the Court explained the concept of a contractor's lien under Article 2242 of the Civil Code and the proper mode for its

"Articles 2241 and 2242 of the Civil Code enumerate certain credits which enjoy preference with respect to specific personal or real property of the debtor. Specifically, the contractor's lien claimed by the petitioners is granted under the third paragraph of Article 2242 which provides that the claims of contractors engaged in the construction, reconstruction or repair of buildings or other works shall be preferred with respect to the specific building or other immovable property constructed. "However, Article 2242 finds application when there is a concurrence of credits, i.e., when the same specific property of the debtor is subjected to the claims of several creditors and the value of such property of the debtor is insufficient to pay in full all the creditors. In such a situation, the question of preference will arise, that is, there will be a need to determine which of the creditors will be paid ahead of the others. Fundamental tenets of due process will dictate that this statutory lien should then only be enforced in the context of some kind of a proceeding where the claims of all the preferred creditors may be bindingly adjudicated, such as insolvency proceedings." Clearly then, neither Article 2242 of the Civil Code nor the enforcement of the lien thereunder is applicable here, because petitioner's Complaint failed to satisfy the foregoing requirements. Nowhere does it show that respondent's property was subject to the claims of other creditors or was insufficient to pay for all concurring debts. Moreover, the Complaint did not pertain to insolvency proceedings or to any other action in which the adjudication of claims of preferred creditors could be ascertained. Another factor negates the argument of petitioner that its money claim involves the enforcement of a lien or the assertion of title to or possession of the subject property: the fact that it filed its action with the RTC of Makati, which is undisputedly bereft of any jurisdiction over respondent's property in Tagaytay City. Certainly, actions affecting title to or possession of real property or the assertion of any interest therein should be commenced and tried in the proper court that has jurisdiction over the area, where the real property involved or a portion thereof is situated. If petitioner really intended to assert its claim or enforce its supposed lien, interest or right over respondent's subject properties, it would have instituted the proper proceedings or filed a real action with the RTC of Tagaytay City, which clearly had jurisdiction over those properties. Narciso Peña, a leading authority on the subject of land titles and registration, gives an explicit exposition on the inapplicability of the doctrine of lis pendens to certain actions and proceedings that specifically include money claims. He explains in this wise: "By express provision of law, the doctrine of lis pendens does not apply to attachments, levies of execution, or to proceedings for the probate of wills, or for administration of the estate of deceased persons in the Court of First Instance. Also, it is held generally that the doctrine of lis pendens has no application to a proceeding in which the only object sought is the recovery of a money judgment, though the title or right of possession to property be incidentally affected. It is essential that the property be directly affected, as where the relief sought in the action or suit includes the recovery of possession, or the enforcement of a lien, or an adjudication between conflicting claims of title, possession, or the right of possession to specific property, or requiring its transfer or sale" Peña adds that even if a party initially avails itself of a notice of lis pendens upon the filing of a case in court, such notice is rendered nugatory if the case turns out to be a purely personal action. We quote him as follows:

Case Digests for Rules 10-19 | page 16

Civil Procedure | February 14, 2014 "It may be possible also that the case when commenced may justify a resort to lis pendens, but during the progress thereof, it develops to be purely a personal action for damages or 18 otherwise. In such event, the notice of lis pendens has become functus officio." (Emphasis supplied) Thus, when a complaint or an action is determined by the courts to be in personam, the rationale for or purpose of the notice of lis pendens ceases to exist. To be sure, this Court has expressly and categorically declared that the annotation of a notice of lis pendens on titles to properties is not proper in cases wherein the proceedings instituted are actions in personam. Petition is hereby DENIED and the assailed CA Decision AFFIRMED RULE 14 Summons Sps. Mariano Madrigal and Julieta Madrigal vs. Court of Appeals G.R. No. 129955, November 26, 1999 Doctrine: · Sec 6 requires that summons must be served personally on the defendant. However, should personal service be unattainable, substituted service may be availed of under Section 7 · Sec. 7. “Substituted Service.- If, for justifiable causes, the defendant cannot be served within a reasonable time…, service may be effected (a) by leaving copies of the summons at the defendant’s residence with some person of suitable age and discretion residing therein…” · The impossibility of personal service justifying availment of substituted service should be explained in the proof of service; why efforts exerted towards personal service failed. The pertinent facts and circumstances attendant to the service of summons must be stated in the proof of service or Officer’s Return; otherwise, the substituted service cannot be upheld Facts: · Joseph Aquino and Josefina Aquino (SPS AQUINO) brought a Complaint for recovery of possession with damages against Mariano F. Madrigal (MARIANO) and Intercity Properties, Inc., (INTERCITY) before the Makati RTC · The summons and complaint were duly served on INTERCITY but not on MARIANO, as reported in the Return of the Process Server. · Alias summons were issued upon motion of the Sps Aquino. · Since MARIANO was not in his residence despite several attempts to look for him, substituted service of summons was resorted to by “leaving a copy of the summons together with the complaint and its annexes to his wife, Julieta S. Madrigal, a person of suitable age and discretion and who acknowledged receipt thereof xxx.” The return of service bore her signature · During pre-trial, INTERCITY and its counsel failed to appear, despite due notice. So, INTERCITY was declared in default · For failure to file an answer, MARIANO was also declared in default and Sps Aquino adduced their evidence ex-parte · Judgment by Default[i] was rendered. Copy of such decision was duly received by Mariano. · Thereafter, Mariano presented a Motion to Lift Order of Default, contending that the trial court never acquired jurisdiction over his person as he was not personally served with summons together with the complaint, and that the complaint was defective because his

wife who, according to movant, is an indispensable party, was not impleaded as a party. · On December 29, 1995, the same motion was amended to pray for the setting aside of the said decision. · RTC: Both motions were denied. Motion for Reconsideration was also denied. · CA: Sps Mariano filed original action for Certiorari before the CA, to annul the aforesaid orders allegedly issued with grave abuse of discretion. CA dismissed the petition Issues: (1) WON service of summons to petitioner MARIANO was valid (2) WON the Order denying the motion to lift order of default, after rendition of the decision by the trial court, was proper (3) WON JULIETA is an indispensable party in the action for recovery of possession of property with damages against MARIANO - NO Held: (1) On the first issue, petitioners theorize that there was no valid service of summons because the substituted service of summons effected on JULIETA was improper, absent any proof of impossibility of personal service as required under Section 6, Rule 14 of the Rules of Court. The CA however opined that “the averments in the Officer’s Return coupled with the finding by the lower Court that there had been earlier attempts to serve summons upon the petitioner, are sufficient compliance with the requirements for substituted service.” Sec 6 requires that summons must be served personally on the defendant. However, should personal service be unattainable, substituted service may be availed of under Section 7 of the same rule: Sec. 7. “Substituted Service.- If, for justifiable causes, the defendant cannot be served within a reasonable time…, service may be effected (a) by leaving copies of the summons at the defendant’s residence with some person of suitable age and discretion residing therein…” In a long line of cases,[ii] this Court held that the impossibility of personal service justifying availment of substituted service should be explained in the proof of service; why efforts exerted towards personal service failed. The pertinent facts and circumstances attendant to the service of summons must be stated in the proof of service or Officer’s Return; otherwise, the substituted service cannot be upheld. It bears stressing that since service of summons, especially for actions in personam, is essential for the acquisition of jurisdiction over the person of the defendant,[iii] the resort to a substituted service must be duly justified. Failure to do so would invalidate all subsequent proceedings on jurisdictional grounds. To determine whether there was such an observance and substituted service was warranted under the premises, it is necessary for the Court to carefully peruse and evaluate the Sheriff’s Return which reported: (1) That on several occasions, at reasonable hours of the day, the Deputized Process Server, tried to serve upon MARIANO the summons together with the complaint; (2) That diligent efforts were exerted by the said Deputized Process Server; (3) That service of summons was then made on MARIANO’s wife, JULIETA, a person of suitable age and discretion who acknowledged receipt thereof.[iv] The Sheriff’s certificate of service of summons is prima facie evidence of the facts therein set out. To overcome the presumption of regularity of performance of official functions in favor of such Sheriff’s Return, the evidence against it must be clear and convincing. Petitioner having been unable to come forward with the requisite quantum of proof to the contrary, the presumption of regularity of performance on the part of the Sheriff in the case stands. MARIANO theorized that he was completely unaware of subject action brought against him and he only learned about it when his sister-in-law handed to him a brown envelope containing a copy of the Decision because he was separated from his wife, JULIETA, at the Case Digests for Rules 10-19 | page 17

Civil Procedure | February 14, 2014 time of service of summons, and was then a stay-in employee of Via Marine Corporation. As between the Sheriff’s Return, which carries with it a presumption of regularity, and MARIANO’s self-serving assertion that he did not know of the case, the Sheriff’s Return is undoubtedly more deserving of faith and credit. On MARIANO’s argument that the Sheriff’s or Process Server’s Return is couched in broad and general terms, and does not state the material dates, the court held that while the Sheriff’s Return is silent on the facts and circumstances engendering the impossibility of personal service of summons upon MARIANO, within a reasonable time, it can be deduced therefrom that alias summons had to be issued. Under the Rules of Court, alias summons is issued when the summons is returned without being served on any of the defendants. These alias summons were issued in compliance with the law. (2) The court also held that MARIANO’s cause could not since the remedy he opted to avail of is not the proper recourse under the attendant circumstances. He could have interposed a motion for reconsideration or for new trial and should such a motion be denied or not ruled upon with dispatch by the trial court, petitioners could have appealed the judgment by default within the reglementary period. (3) The Court is bound by the factual finding a quo that SPOUSES AQUINO are the registered owners of subject lot which they purchased from INTERCITY. As a general rule, in an appeal by certiorari under Rule 45, questions of fact are not to be delved into and passed upon by this Court, which is bound by the factual findings by the trial court. Verily, the Court is not a trier of facts. Petition is DENIED and the decision of the CA is AFFIRMED Eduardo Fernandez, et. al vs. Court of Appeals G.R. No. 115813, October 16, 2000 DOCTRINE: The   trial   court’s   inherent   power   to   cancel   a   notice   of   lis   pendens   is   exercised   only   under   exceptional   circumstances,   such   as:   where   such   circumstances   are   imputable   to   the   party   who   caused   the   annotation;   where   the   litigation   was   unduly   prolonged   to   the   prejudice   of   the   other  party  because  of  several  continuances  procured  by  petitioner;  where  the  case  which  is  the   basis  of  the  lis  pendens  notation  was  dismissed  for  non-­‐prosequitur  on  the  part  of  the  plaintiff  or   where   judgment   was   rendered   against   the   party   who   caused   such   notation.   These   exceptional   circumstances  are  not  present  in  this  case. Facts ●

● ● ●

This   petition   involves   Lot   435   of   the   Bacolod   cadastre   originally   titled   to   petitioners’   predecessor-­‐in-­‐interest,   Prudencio   Fernandez.   After   Fernandez   acquired   ownership   of   the  lot,  he  tried  to  eject  private  respondent  Jesus  Ciocon  and  some  other  occupants  off   the   property.   Allegedly,   Ciocon   asked   Fernandez   that   he   be   given   a   “last   chance”   to   repurchase   the   lot.   Fernandez   refused.   After   this   rejection,   on   September   21,   1985,   Ciocon  instituted  against  Fernandez  Civil  Case  No.  7687  before  Branch  47  of  the  RTC  of   Negros   Occidental   for   reconveyance   of   the   land   or   what   remains   of   it   after   deducting   portions  already  sold  to  others Ciocon   claimed   that   he   had   already   paid   for   the   full   reconveyance   price,   and   that   Fernandez  had  already  signed  this.  Fernandez  on  the  other  hand  denied  this   Fernandez   died   on   January   23,   1966.   He   was   substituted   in   the   civil   suit   by   his   heirs   namely:   Dominadora,4   and   their   children   Eduardo,   Teresita,   Leticia,   Adolfo,   Gloria,   Zenaida  and  Esmerna.   Private  respondents  Llera,  Pedrina,  Calves,  and  Villalba  were  intervenors  in  said  suit  who   claimed  that  they  had  purchased  portions  of  Lot  435  from  Ciocon  

TC:  Sided  with  petitioner,  but  later  on  sided  with  respondent.  It  cancelled  notice  of  Lis  Pendens  in   the  TCT  pertaining  to  the  Civil  Cases  filed  by  respondent CA: Affirmed decision of the TC Issue: Was the cancellation of the Lis Pendens proper? Held: No, Costs against Private Respondents.While   the   trial   court   has   inherent   power   to   cancel   a   notice   of   lis   pendens,   such   power   is   exercised   under   express   provisions   of   law.   A   notice   of   lis  pendens  is  an  announcement  to  the  whole  world  that  a  particular  real  property  is  in  litigation.   Such  announcement  is  founded  upon  public  policy  and  necessity,  the  purpose  of  which  is  to  keep   the  properties  in  litigation  within  the  power  of  the  court  until  the  litigation.  tion  is  terminated  and   to  prevent  the  defeat  of  the  judgment  or  decree  by  subsequent  alienation.  Under  Sec.  24,  Rule  14   of  the  Rules  of  Court,  now  Sec.  14  of  Rule  13  of  the  1997  Rules  of  Civil  Procedure,  a  notice  of  lis   pendens   may   be   cancelled   only   after   proper   showing   that   the   purpose   of   its   annotation   is   for   molesting   the   adverse   party,   or   that   it   is   not   necessary   to   protect   the   rights   of   the   party   who   caused   it   to   be   annotated.   We   have   scrutinized   the   records   but   found   no   showing   that   the   annotation   was   caused   by   petitioners   merely   to   molest   private   respondents,   nor   that   it   was   not   needed   to   protect   petitioners’   rights.   The   peculiar   and   exceptional   circumstances   of   the   case,   as   in   the   rendering   of   two   conflicting   decisions   by   the   same   judge,   indubitably   manifest   that   the   annotation   was   not   merely   to   molest   the   other   party   but   was   needed   to   protect   petitioners’   interest   from   any   hasty   transfer   of   the   property   to   another,   making   recovery   of   the   property   extremely  complicated.  This  is  exactly  what  happened  in  this  case  when  the  notice  of  lis  pendens   was  cancelled. Moreover,  An  order  of  cancellation  of  notation  of  lis  pendens  which  is  a  result  of  a  hearing  ex  parte   is   fatally   flawed   because   it   is   issued   without   notice   to   the   adverse   party   and   thereby   violative   of   due  process. E.B. Villarosa & Partner co. Ltd. vs. Hon. Benito G.R. No. 136426, August 4, 1999 Facts: Petitioner is a limited partnership with principal office address at Davao City and branch offices at Prañaque City and Cagayan de Oro City. Petitioner and private respondent exevuted a Deed of Sale with Development Agreement wherein the former agreed to develop certain parcels of land located at Barrio Carmen, Cagayan de Oro into a housing subdivision for low cost housing units. They further agreed that in case of litigation, the venue shall be in the proper courts of Makati. Private respondent filed a Complaint for Breach of Contract and Damages against petitioner, before the RTC of Makati for failure to comply with its contractual obligation in that, other than a few unfinished low cost houses, there were no substantial development. Summons, together with the complaint, were served upon the defendant, through its Branch Manager at Cagayan de Oro. Petitioner filed a Special Appearance with Motion to Dismiss on the ground of improper service of summons and for lack of jurisdiction over their person. Private respondent, meanwhile, filed a Motion to Declare Defendant in Default, alleging that no Answer has been filed despite its receipt of the summons. Further, in its opposition to the Motion to Dismiss, private respondent alleged that, the summons and the complaint was actually received by petitioner through its branch manager, and that the purpose of the rule is to bring home the corporation notice of the filing of the action. The trail court dismissed the Motion to Dismiss, as well as declaring petitioner in default, Case Digests for Rules 10-19 | page 18

Civil Procedure | February 14, 2014 stating that, since the summons and the copy of the complaint were in fact received by the corporation, there was substantial compliance with the rule on service of summons and consequently, it validly acquired jurisdiction over the petitioner.

2.

Doctrine of substantial compliance. (See Held. "In Porac Trucking Inc. ...")

3.

It is not allowable to merely infer actual receipt of summons by the corporation through the person on whom the summons was served - for there to be substantial compliance, actual receipt of summons by the corporation through the person served must be shown.

4.

Receipt by a defendant corporation of the summons and complaint cannot be inferred from the fact that it filed a Motion to Dismiss the case.

A Motion for Reconsideration was filed, wherein petitioner alleged that, the new Rules did not liberalize but, restricted the service of summons on persons enumerated therein. Issue: WON the trial court acquired jurisdiction over the petitioner? Held: We agree with the petitioner. The designation of persons or officers who are authorized to accept summons for a domestic corporation or partnership is now limited and more clearly specified in Sec. 11, Rule 14, of the 1007 Rule of Civil Procedure. The rule now states “general manager” instead of only “manager”; “corporate secretary” instead of “secretary”; and “treasurer” instead of “cashier.” The phrase “agent, or any of its directors” is conspicuously deleted in the new rule. The aforesaid terms were obviously ambiguous and susceptible of broad and sometimes illogical interpretations, especially the word ‘agent’ of the corporation. The rule must be strictly observed. Service must be made to one named in the statute. Even prior to the effectivity of the 1997 Rules, a strict compliance with the mode of service is necessary to confer jurisdiction of the court over a corporation. The officer upon whom service is made must be one who is named in the statute; otherwise the service is insufficient.

FACTS: Herein petitioner executed a Real Estate Mortgage in favor of respondent Tan. The former defaulted. Respondent Tan filed against petitioner a complaint for foreclosure of mortgage in the Cebu RTC. Summons and a copy of the complaint were served upon petitioner through a certain Lynverd Cinches, described in the sheriff's return as "a Draftsman, a person of sufficient age and (discretion) working therein, he is the highest ranking officer or Officer-in-Charge of defendant's Corporation, to receive processes of the Court." Petitioner moved for the dismissal of the complaint on the ground that there was no valid service of summons upon it, as a result of which the trial court did not acquire jurisdiction over it. Petitioner invoked Rule 14, §13 of the 1964 Rules of Court and contended that service on Lynverd Cinches, as alleged in the sheriff's return, was invalid as he is not one of the authorized persons on whom summons may be served and that, in fact, he was not even its employee. TC: denied petitioner's Motion to Dismiss. MR DENIED.

The purpose is to render it reasonably certain that the corporation will receive prompt and proper notice in an action against it or to insure that the summons be served on a representative so integrated with the corporation that such person will know what to do with legal papers served on him. Liberal construction rule cannot be invoked and utilized as a substitute for the plain legal requirements as to the manner in which summons should be served on a domestic corporation. Accordingly, the service of summons upon the branch manager at its branch office at Cagayan de Oro, instead of upon the general manager of its principal office at Davao City is improper. Consequently, the trial court did not acquire jurisdiction over the person of the petitioner. NOTE: Court also held that, the filing of a motion to dismiss, whether or not belatedly filed by the petitioner, his authorized agent or attorney, precisely objecting to the jurisdiction of the court over the person of the petitioner can by no means be deemed a submission to the jurisdiction of the court. Millenium Industrial Corporation vs. Tan G.R. No. 131724, February 28, 2000 Subject guide: Service upon domestic private juridical entity (Note: Relate this with Rule 14, Sec 11) DOCTRINES: 1. Service of summons upon a defendant corporation must be on a representative so integrated with the corporation sued as to make it a priori presumable that he will realize his responsibilities and know what he should do with any legal papers received by him.

CA: dismissed the petition. The appellate court ruled that although petitioner denied Lynverd Cinches' authority to receive summons for it, its actual receipt of the summons could be inferred from its filing of a motion to dismiss, hence, the purpose for issuing summons had been substantially achieved. Moreover, it was held, by including the affirmative defense that it had already paid its obligation and praying for other reliefs in its Motion to Dismiss, petitioner voluntarily submitted to the jurisdiction of the court. ISSUE: Whether or not service of summons upon a mere draftsman who is not one of those upon whom summons may be served in case of a defendant corporation as mentioned in the rules is valid. HELD: NO Summons is the means by which the defendant in a case is notified of the existence of an action against him and, thereby, the court is conferred jurisdiction over the person of the defendant. If the defendant is corporation, Rule 14, §13 requires that service of summons be made upon the corporation’s president, manager, secretary, cashier, agent, or any of its directors. The rationale of the rule is that service must be made on a representative so integrated with the corporation sued as to make it a priori presumable that he will realize his responsibilities and know what he should do with any legal papers received by him. Petitioner contends that the enumeration in Rule 14, §13 is exclusive and that service of summons upon one who is not enumerated therein is invalid. This is the general rule. However, it is settled that substantial compliance by serving summons on persons other than those mentioned in the above rule may be justified. In G & G Trading Corporation v. Court of Appeals, we ruled that although the service of summons was made on a person not enumerated in Rule 14, §13, if it appears that the summons and complaint were in fact received by the corporation, there is substantial compliance with the rule as its purpose has been attained. Case Digests for Rules 10-19 | page 19

Civil Procedure | February 14, 2014 In Porac Trucking, Inc. v. Court of Appeals, this Court enumerated the requisites for the application of the doctrine of substantial compliance, to wit: (a) there must be actual receipt of the summons by the person served, i.e., transferring possession of the copy of the summons from the Sheriff to the person served; (b) the person served must sign a receipt or the sheriff's return; and (c) there must be actual receipt of the summons by the corporation through the person on whom the summons was actually served. The third requisite is the most important for it is through such receipt that the purpose of the rule on service of summons is attained. In this case, there is no dispute that the first and second requisites were fulfilled. With respect to the third, the appellate court held that petitioner's filing of a motion to dismiss the foreclosure suit is proof that it received the copy of the summons and the complaint. There is, however, no direct proof of this or that Lynverd Cinches actually turned over the summons to any of the officers of the corporation. In contrast, in our cases applying the substantial compliance rule, there was direct evidence, such as the admission of the corporation's officers, of receipt of summons by the corporation through the person upon whom it was actually served. The question is whether it is allowable to merely infer actual receipt of summons by the corporation through the person on whom summons was served. We hold that it cannot be allowed. For there to be substantial compliance, actual receipt of summons by the corporation through the person served must be shown. Where a corporation only learns of the service of summons and the filing of the complaint against it through some person or means other than the person actually served, the service of summons becomes meaningless. This is particularly true in the present case where there is serious doubt if Lynverd Cinches, the person on whom service of summons was effected, is in fact an employee of the corporation. Except for the sheriff's return, there is nothing to show that Lynverd Cinches was really a draftsman employed by the corporation. SC Ruling: the decision of the Court of Appeals is REVERSED and the complaint against petitioner is DISMISSED. Asiavest Limited vs. Court of Appeals G.R. No. 128803, September 15, 1998 DOCTRINE: In actions in personam, the Court must acquire jurisdiction by the service of summons, otherwise the judgment is unenforceable. FACTS: Antonio Heras was sued on the basis of his personal guarantee of the obligations of Compania Hermanos de Navegacion S.A. Asiavest filed a complaint in 1987 against Heras to pay the amount awarded by a court in Hong Kong in 1984 and 1987 related to his guarantee. This is equivalent to more than 1.8M US dollars plus interests, fixed costs and attorney’s fees. Heras filed a Motion to Dismiss. Before this was decided, a fire razed the records of the QC Court, plaintiff filed a motion for reconstitution of case records – this was granted. Eventually, motion to dismiss was denied. Note that during this time, Heras was living in HK but returned to the Philippines when the judgment was already being enforced. He claimed that he never received a copy of the foreign judgment, but Asiavest claims that the service of summons was given to Heras when the SSHG Law Firm messenger gave a copy to Heras’ son-in-law, Dionisio Lopez. TC: In favor of Asiavest. Ruled that the Hong Kong court judgment had been duly proved, it is a presumptive evidence of a right as between the parties; hence, the party impugning it

had the burden to prove want of jurisdiction over his person. HERAS failed to discharge that burden. Therefore, judgment enforceable. Asiavest filed a MR to increase award, Heras appealed with the CA. CA: MR was granted BUT CA reversed TC’s decision, dismissing the case. It underscored the fact that a foreign judgment does not of itself have any extraterritorial application. For it to be given effect, the foreign tribunal should have acquired jurisdiction over the person and the subject matter. If such tribunal has not acquired jurisdiction, its judgment is void. ISSUES: Whether or not the foreign judgment (in HK) can be enforced against Heras in the Philippines? NO Is there want of jurisdiction, want of notice to the party (JURISDICTION and NOTICE RELEVANT ISSUE IN THIS CASE), collusion, fraud or clear mistake of law or fact that allows for non-enforcement of foreign judgements? YES HELD: NO, can’t be enforced. Although the foreign judgment was duly authenticated (Asiavest was able to adduce evidence in support thereto) and Heras was never able to overcome the validity of it, it cannot be enforced against Heras here in the Philippines because Heras was not properly served summons. Hence, as far as Philippine law is concerned, the Hong Kong court has never acquired jurisdiction over Heras. This means then that Philippine courts cannot act to enforce the said foreign judgment. The action against Heras is an action in personam and as far as Hong Kong is concerned, Heras is a non resident. He is a non resident because prior to the judgment, he already abandoned Hong Kong. The Hong Kong law on service of summons in in personam cases against non residents was never presented in court hence processual presumption is applied where it is now presumed that Hong Kong law in as far as this case is concerned is the same as Philippine laws. And under our laws, in an action in personam wherein the defendant is a non-resident who does not voluntarily submit himself to the authority of the court, personal service of summons within the state is essential to the acquisition of jurisdiction over her person. This method of service is possible if such defendant is physically present in the country. If he is not found therein, the court cannot acquire jurisdiction over his person and therefore cannot validly try and decide the case against him. Without a personal service of summons, the Hong Kong court never acquired jurisdiction. Needless to say, the summons tendered to Lopez was an invalid service because the same does not satisfy the requirement of personal service. SC: Affirmed CA decision. Manotoc v. Court of Appeals, G.R. No. 130974, August 16, 2006 DOCTRINE Requirement of Material Data in Servicing Summons – There should be a clear valid reason cited in the Return why efforts to locate proved inadequate, to reach the conclusion that personal service has become impossible or unattainable. Requirement of Extraordinary Efforts to Effect Summons – Before resorting to substituted service, a plaintiff must demonstrate an effort in good faith to locate the defendant through more direct means. Requirements of Recipient for Substituted Service – there are two (2) requirements under Case Digests for Rules 10-19 | page 20

Civil Procedure | February 14, 2014 the Rules: (1) recipient must be a person of suitable age and discretion; and (2) recipient must reside in the house or residence of defendant. FACTS Respondent Trajano seeks the enforcement of a foreign court’s judgment rendered by the United States District Court of Honolulu, Hawaii, USA, for wrongful death of deceased Archimedes Trajano committed by military intelligence officials of the Philippines allegedly under the command, direction, authority, supervision, tolerance, sufferance and/or influence of defendant Manotoc, pursuant to the provisions of Rule 39 of the then Revised Rules of Court. The trial court issued a Summons addressed to petitioner at her place in Alexandra Homes, Pasig City. The Summons and a copy of the Complaint were allegedly served upon (Mr.) Macky de la Cruz, an alleged caretaker. When petitioner failed to file her Answer, the trial court declared her in default. Petitioner filed a Motion to Dismiss on the ground of lack of jurisdiction of the trial court over her person due to an invalid substituted service of summons. The grounds to support the motion were: (1) the address of defendant indicated in the Complaint (Alexandra Homes) was not her dwelling, residence, or regular place of business as provided in Section 8, Rule 14 of the Rules of Court; (2) the party (de la Cruz), who was found in the unit, was neither a representative, employee, nor a resident of the place; (3) the procedure prescribed by the Rules on personal and substituted service of summons was ignored; (4) defendant was a resident of Singapore; and (5) whatever judgment rendered in this case would be ineffective and futile. RTC Decision The trial court rejected Manotoc’s Motion to Dismiss, basing their judgment on the strength of documentary evidence presented by respondent. It held that petitioner was a resident of Alexandra Homes, which was also the residence of her husband. The Disembarkation/Embarkation Card and Certification issued by the Assitant Property Administrator of Alexandra Homes were just hearsay. The Certification did not even refer to the date when the substituted service was effected. Her Passport as proof of her residence in SG was rejected as it merely show the dates of her departure and arrival in the Philippines.

defendant’s voluntary appearance in court. When the defendant does not voluntarily submit to the court’s jurisdiction or when there is no valid service of summons, “any judgment of the court which has no jurisdiction over the person of the defendant is null and void.” In an action strictly in personam, personal service on the defendant is the preferred mode of service, that is, by handing a copy of the summons to the defendant in person. If defendant, for excusable reasons, cannot be served with the summons within a reasonable period, then substituted service can be resorted to. While substituted service of summons is permitted, “it is extraordinary in character and in derogation of the usual method of service.” Hence, it must faithfully and strictly comply with the prescribed requirements and circumstances authorized by the rules. Indeed, “compliance with the rules regarding the service of summons is as much important as the issue of due process as of jurisdiction.” Invalid Substituted Service The Return readily reveals the absence of material data on the serious efforts to serve the Summons on petitioner Manotoc in person. There is no clear valid reason cited in the Return why those efforts proved inadequate, to reach the conclusion that personal service has become impossible or unattainable. It cannot be determined how many times, on what specific dates, and at what hours of the day the attempts were made. It has not been shown that respondent Trajano or Sheriff Cañelas, who served such summons, exerted extraordinary efforts to locate petitioner. Before resorting to substituted service, a plaintiff must demonstrate an effort in good faith to locate the defendant through more direct means. Granting that such a general description be considered adequate, there is still a serious nonconformity from the requirement that the summons must be left with a “person of suitable age and discretion” residing in defendant’s house or residence. Thus, there are two (2) requirements under the Rules: (1) recipient must be a person of suitable age and discretion; and (2) recipient must reside in the house or residence of defendant. Both requirements were not met. In this case, the Sheriff’s Return lacks information as to residence, age, and discretion of Mr. Macky de la Cruz, aside from the sheriff’s general assertion that de la Cruz is the “resident caretaker” of petitioner as pointed out by a certain Ms. Lyn Jacinto, alleged receptionist and telephone operator of Alexandra Homes. With the petitioner’s allegation that Macky de la Cruz is not her employee, servant, or representative, it is necessary to have additional information in the Return of Summons. Besides, Mr. Macky de la Cruz’s refusal to sign the Receipt for the summons is a strong indication that he did not have the necessary “relation of confidence” with petitioner. To protect petitioner’s right to due process by being accorded proper notice of a case against her, the substituted service of summons must be shown to clearly comply with the rules.

Manotoc filed a Petition for Certiorari and Prohibition before the CA. CA Decision CA upheld the lower court. It held that the trial court had acquired jurisdiction over petitioner as there was a valid substituted service pursuant to Section 8, Rule 14 of the old Revised Rules of Court. ISSUE WON there was a valid substituted service of summons on petitioner for the trial court to acquire jurisdiction.

Due to non-compliance with the prerequisites for valid substituted service, the proceedings held before the trial court perforce must be annulled. On the issue whether petitioner Manotoc is a resident of Alexandra Homes, our findings that the substituted service is void has rendered the matter moot and academic. Even assuming that Alexandra Homes Room 104 is her actual residence, such fact would not make an irregular and void substituted service valid and effective.

HELD

Sansio v. Mogol, G.R. No. 177007, July 14, 2009

Acquisition of Jurisdiction Jurisdiction over the defendant is acquired either upon a valid service of summons or the

Doctrines: ● Section 6, Rule 14 of the ROC does not require that the service of summons on Case Digests for Rules 10-19 | page 21

Civil Procedure | February 14, 2014

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the defendant in person must be effected only at the latter’s residence as stated in the summons. Summons upon a respondent or a defendant must be served by handing a copy thereof to him in person or, if he refuses to receive it, by tendering it to him. The essence of personal service is the handing or tendering of a copy of the summons to the defendant himself, wherever he may be found; that is, wherever he may be, provided he is in the Philippines. Service of summons in the persons of the defendants is generally preferred over substituted service.

FACTS: Petitioner Sansio Philippines, Inc. is a domestic corporation that is engaged in the business of manufacturing and selling appliances and other related products. Petitioner filed a Complaint for Sum of Money and Damages against respondent spouses Mogol before the MeTC of Manila. At the request of herein petitioner, the process server of the MeTC of Manila served the summons and the copy of the complaint on respondent spouses Mogol at the courtroom of the MeTC. Respondent spouses were in the said premises, as they were waiting for the scheduled hearing of the criminal cases filed by petitioner against respondent Alicia for violations of BP 22. Upon being so informed of the summons and the complaint, respondent spouses Mogol referred the same to their counsel, who was also present in the courtroom. The counsel of respondent spouses Mogol took hold of the summons and the copy of the complaint and read the same. Thereafter, he pointed out to the process server that the summons and the copy of the complaint should be served only at the address that was stated in both documents, i.e., at Lucena City, and not anywhere else. The counsel of respondent spouses Mogol apparently gave back the summons and the copy of the complaint to the process server and advised his clients not to obtain a copy and sign for the same. As the process server could not convince the respondent spouses Mogol to sign for the aforementioned documents, he proceeded to leave the premises of the courtroom. The process server of the MeTC of Manila issued a Return on Service of Summons, declaring that the original and duplicate copies of the Summons were returned unserved. Petitioner filed a Motion to Declare [Respondents] in Default. Petitioner averred that the summons and the copy of the complaint were already validly served upon the respondent spouses Mogol at the courtroom of the MeTC. From the date of said service up to the time of the filing of the above-stated motion, respondent spouses Mogol had yet to file any responsive pleading. Through a special appearance of their counsel, respondent spouses Mogol filed an Opposition to the Motion to Declare [Respondents] in Default. Respondent spouses Mogol averred the service should have been effected at the respondent spouses’ residential address, as stated in the summons and the copy of the complaint. MeTC: The MeTC of Manila ruled that Section 6, Rule 14 of the ROC does not specify where service is to be effected.. Respondent spouses Mogol were, thus, validly served with summons and a copy of the complaint. For failing to file any responsive pleading before the lapse of the reglementary period therefor, the Motion to Declare [Respondents] in Default filed by petitioner was declared to be meritorious. Respondent spouses Mogol filed an MR on the above Order, but the same was denied by the MeTC of Manila. Respondent spouses filed a Petition for Certiorari, Prohibition and/or Injunction before the RTC of Manila against Judge de Castro, Jr. of the MeTC of Manila, and herein petitioner. Respondent spouses insisted there was no valid service of summons per return of the

process server, which was binding on the MeTC judge, who did not acquire jurisdiction over the persons of respondent spouses. They contended that the MeTC of Manila acted with grave abuse of discretion amounting to lack or excess of jurisdiction in declaring them in default. RTC: The RTC of Manila issued an Order dismissing the petition. It held that Section 6, Rule 14 of the ROC does not mandate that summons be served strictly at the address provided by the plaintiff in the complaint. Contrarily, said provision states that the service of summons may be made wherever such is possible and practicable. Therefore, it did not matter much that the summons and the copy of the complaint in this case were served inside the courtroom of the MeTC of Manila, Branch 24, instead of the address at Lucena City. The primordial consideration was that the service of summons was made in the person of the respondent spouses Mogol. CA: Reversed the decision of the RTC and held that there was no valid service of summons. ISSUE: WON there was a valid service of summons to the respondent spouses. HELD: YES; A summon is a writ by which the defendant is notified of the action brought against him or her. In a civil action, jurisdiction over the defendant is acquired either upon a valid service of summons or the defendant’s voluntary appearance in court. When the defendant does not voluntarily submit to the court’s jurisdiction, or when there is no valid service of summons, any judgment of the court, which has no jurisdiction over the person of the defendant, is null and void. Where the action is in personam, i.e., one that seeks to impose some responsibility or liability directly upon the person of the defendant through the judgment of a court, and the defendant is in the Philippines, the service of summons may be made through personal or substituted service in the manner provided for in Sections 6 and 7, Rule 14 of the ROC, which read: SEC. 6. Service in person on defendant. – Whenever practicable, the summons shall be served by handing a copy thereof to the defendant in person, or, if he refuses to receive and sign for it, by tendering it to him. SEC. 7. Substituted service. – If, for justifiable causes, the defendant cannot be served within a reasonable time as provided in the preceding section, service may be effected (a) by leaving copies of the summons at the defendant’s residence with some person of suitable age and discretion then residing therein; or (b) by leaving the copies at defendant’s office or regular place of business with some competent person in charge thereof. It is well-established that summons upon a respondent or a defendant must be served by handing a copy thereof to him in person or, if he refuses to receive it, by tendering it to him. The essence of personal service is the handing or tendering of a copy of the summons to the defendant himself, wherever he may be found; that is, wherever he may be, provided he is in the Philippines. In the instant case, the Court finds that there was already a valid service of summons in the persons of respondent spouses Mogol. The act of the counsel of respondent spouses Mogol of receiving the summons and the copy of the complaint already constituted receipt on the part of his clients, for the same was done with the latter’s behest and consent. Already accomplished was the operative act of “handing” a copy of the summons to respondent spouses in person. Thus, jurisdiction over the persons of the respondent spouses Mogol was already acquired by the MeTC of Manila. That being said, the subsequent act of the counsel of respondent spouses of returning the summons and the Case Digests for Rules 10-19 | page 22

Civil Procedure | February 14, 2014 copy of the complaint to the process server was no longer material. Section 6, Rule 14 of the ROC does not require that the service of summons on the defendant in person must be effected only at the latter’s residence as stated in the summons. On the contrary, said provision is crystal clear that, whenever practicable, summons shall be served by handing a copy thereof to the defendant; or if he refuses to receive and sign for it, by tendering it to him. Nothing more is required. Much more important than considerations of practicality, however, is the fact that respondent spouses Mogol based their case on a wrong appreciation of the above-stated provisions of the ROC. Respondent spouses principally argue that Section 6 of Rule 14 cannot be singled out without construing the same with Section 7. Axiomatically, Sections 6 and 7 of Rule 14 of the ROC cannot be construed to apply simultaneously. Said provisions do not provide for alternative modes of service of summons, which can either be resorted to on the mere basis of convenience to the parties. Under our procedural rules, service of summons in the persons of the defendants is generally preferred over substituted service. As to the reliance of the CA on the second paragraph of the Return on Service of Summons stating that the original and duplicate copies of the Summons were returned “UNSERVED,” the Court finds the same utterly misplaced. A simple reading of the first paragraph of the Return on Service of Summons, which contains the circumstances surrounding the service of the summons on the persons of the respondent spouses Mogol, manifestly reveals that the summons and the copy of the complaint were already validly served on the said respondents. They merely refused to receive or obtain a copy of the same.

removed her right ovary against her will, and losing the same (Quite morbid but might be asked). She amended the complaint and included herein private respondent Agudo. Thus, summons were subsequently issued to them. The summon for Agudo was served thru her husband Alfredo Agudo, who received and signed the same as private respondent was out of the country. On March 30, 2004, private respondent filed a Motion to Dismiss on the ground that the RTC had not acquired jurisdiction over her as she was not properly served with summons, since she was temporarily out of the country; that service of summons on her should conform to Section 16, Rule 14 of the Rules of Court. Petitioner filed her Opposition to the motion to dismiss, arguing that a substituted service of summons on private respondent's husband was valid and binding on her; that service of summons under Section 16, Rule 14 was not exclusive and may be effected by other modes of service, i.e., by personal or substituted service. On May 7, 2004, the RTC issued its assailed Order granting private respondent's motion to dismiss. It found that while the summons was served at private respondent's house and received by respondent's husband, such service did not qualify as a valid service of summons on her as she was out of the country at the time the summons was served, thus, she was not personally served a summons; and even granting that she knew that a complaint was filed against her, nevertheless, the court did not acquire jurisdiction over her person as she was not validly served with summons; that substituted service could not be resorted to since it was established that private respondent was out of the country, thus, Section 16, Rule 14 provides for the service of summons on her by publication.

Although We find lamentable the apparently erroneous statement made by the process server in the aforesaid second paragraph – an error that undoubtedly added to the confusion of the parties to this case – the same was, nonetheless, a mere conclusion of law, which does not bind the independent judgment of the courts. Indeed, it cannot be said that because of such a statement, respondent spouses Mogol had the right to rely on said return informing them that the summons had been unserved, thus justifying their non-filing of any responsive pleading.

Petitioner claims that the RTC committed a grave abuse of discretion in ruling that Section 16, Rule 14, limits the service of summons upon the defendant-resident who is temporarily out of the country exclusively by means of extraterritorial service,i.e., by personal service or by publication

In fine, we rule that jurisdiction over the persons of the respondent spouses Mogol was validly acquired by the MeTC in this case. For their failure to file any responsive pleading to the Complaint filed against them, in violation of the order of the said court as stated in the summons, respondent spouses Mogol were correctly declared in default.

CA: Certiorari case straight to SC

TC: No proper service of summon as respondent is outside the country and therefore, publication is necessary

ISSUE: WON proper summons were made to private respondent Aguda HELD: YES.

WHEREFORE, premises considered, the Petition for Review on Certiorari under Rule 45 is GRANTED

Palma v. Galvez, G.R.No. 165273, March 10, 2010 DOCTRINE: Because Section 16 of “also,” it is therefore not mandatory.

Rule 14 on summons uses the words “may” and

FACTS: On July 28, 2003, petitioner Leah Palma filed with the RTC an action for damages against the Philippine Heart Center (PHC), Dr. Danilo Giron and Dr. Bernadette O. Cruz, alleging that the defendants committed professional fault, negligence and omission for having

SC: According to the SC, in civil cases, the trial court acquires jurisdiction over the person of the defendant either by the service of summons or by the latter’s voluntary appearance and submission to the authority of the former. Private respondent was a Filipino resident who was temporarily out of the Philippines at the time of the service of summons; thus, service of summons on her is governed by Section 16, Rule 14 of the Rules of Court, which provides: Sec. 16. Residents temporarily out of the Philippines. – When an action is commenced against a defendant who ordinarily resides within the Philippines, but who is temporarily out of it, service may, by leave of court, be also effected out of the Philippines, as under the preceding section. (Emphasis supplied)

Case Digests for Rules 10-19 | page 23

Civil Procedure | February 14, 2014 The RTC found that since private respondent was abroad at the time of the service of summons, she was a resident who was temporarily out of the country; thus, service of summons may be made only by publication. However, the SC do not agree. In Montefalcon v. Vasquez, the SC has already ruled that because Section 16 of Rule 14 uses the words “may” and “also,” it is not mandatory. Other methods of service of summons allowed under the Rules may also be availed of by the serving officer on a defendant-resident who is temporarily out of the Philippines. Thus, if a resident defendant is temporarily out of the country, any of the following modes of service may be resorted to: (1) substituted service set forth in section 7 ( formerly Section 8), Rule 14; (2) personal service outside the country, with leave of court; (3) service by publication, also with leave of court; or (4) in any other manner the court may deem sufficient. In Montalban v. Maximo, the SC held that substituted service of summons under the present Section 7, Rule 14 of the Rules of Court in a suit in personam against residents of the Philippines temporarily absent therefrom is the normal method of service of summons that will confer jurisdiction on the court over such defendant

RULE 15 Motions Gan vs. Reyes ,G.R. No. 145527 May 28, 2002 Doctrine: Petitioner argued that the writ of execution is void on the ground that he was not notified of its issuance. o SC said such a plea in unacceptable for enough has been done by petitioner to delay the execution of the writ. It also said that technicality should be an aid to justice and not its great hindrance and chief enemy. Hence, if the writ of execution would be voided on this ground alone, then procedural rules which were primarily drafted to protect parties in the realm of constitutional guarantees would acquire a new sanctity at the expense of equity and justice. Facts: · Bernadette S. Pondevida wrote petitioner (GAN) a letter demanding support for their "love child." Petitioner, in his reply, denied paternity of the child. · Bernadette thereafter instituted in behalf of her daughter a complaint against petitioner for support with prayer for support pendente lite. · Petitioner moved to dismiss on the ground that the complaint failed to state a cause of action. He argued that since Francheska's certificate of birth indicated her father as "UNKNOWN," there was no legal or factual basis for the claim of support. · His motion, however, was denied by the trial court. · Despite denial of his motion, petitioner failed to file his answer within the reglementary period. · Private respondent moved that petitioner be declared in default, which motion was granted. · In its Order declaring petitioner in default the TRIAL COURT noted that petitioner's Motion to Admit Answer was filed more than 90 days after the expiration of the reglementary period, and only after private respondent moved that petitioner be declared in default. · Hence, the court received the evidence of private respondent ex parte. · After finding that the claim of filiation and support was adequately proved, the trial court rendered its decision ordering petitioner to recognize

private respondent Francheska Joy S. Pondevida as his illegitimate child and support her with P20,000.00 every month and was also ordered to pay the accumulated arrears of P20,000.00 per month from the day she was born · Private respondent moved for execution of the judgment of support, which the trial court granted by issuing a writ of execution. · Petitioner appealed the Judgment to the CA alleging that the writ was issued without notice to him hence it was invalid and seeks the setting aside of the default order and the judgment rendered thereafter for the reason that should he be allowed to prove his defense of adultery, the claim of support would be most likely denied. · CA dismissed the petition on the ratiocination that under Sec. 4, Rule 39 of the 1997 Rules of Civil Procedure judgments for support are immediately executory and cannot be stayed by an appeal Issue: W/N the writ of execution is valid? Ruling: There is no evidence indeed to justify the setting aside of the writ on the ground that it was issued beyond the legitimate bounds of judicial discretion. · Section 4, Rule 39, of the Rules of Court clearly states that, unless ordered by the trial court, judgments in actions for support are immediately executory and cannot be stayed by an appeal. This is an exception to the general rule which provides that the taking of an appeal stays the execution of the judgment and that advance executions will only be allowed if there are urgent reasons therefor. o To consider then petitioner's argument that there should be good reasons for the advance execution of a judgment would violate the clear and explicit language of the rule mandating immediate execution. · As to petitioner’s contention to annul the writ of execution on the ground that he was not notified of its issuance. o SC said such a plea in unacceptable for enough has been done by petitioner to delay the execution of the writ. ● Records show that in partial fulfillment of the writ of execution petitioner surrendered a sedan which apparently was not his as it was later ordered released to a third party who laid claim over the levied vehicle. Also, petitioner filed before the Court of Appeals a Motion for Leave to Deposit in Court Support Pendente Lite promising to deposit the amount due as support every 15th of the month, but to date has not deposited any amount in complete disavowal of his undertaking. o It also said that technicality should be an aid to justice and not its great hindrance and chief enemy. Hence, if the writ of execution would be voided on this ground alone, then procedural rules which were primarily drafted to protect parties in the realm of constitutional guarantees would acquire a new sanctity at the expense of equity and justice. · Lastly, the court ruled that the money and property adjudged for support and education should and must be given presently and without delay because if it had to wait the final judgment, the children may in the meantime have suffered because of lack of food or have missed and lost years in school because of lack of funds. Mutilan vs. Adiong Adm. Matter No. RTJ-00-1581, July 2, 2002 (take note of the dates) DOCTRINE: Rule 15, Sections 4 and 6, of the Revised Rules of Court explicitly provides that every motion required to be heard shall include a notice of hearing, which should be Case Digests for Rules 10-19 | page 24

Civil Procedure | February 14, 2014 sent to the other party at least three days before the date of hearing, unless the court sets the hearing on shorter notice. FACTS: An administrative complaint charging Judge Santos Adiong of the Regional Trial Court of Marawi City, Branch 8, with gross ignorance of the law, incompetence, and violation of the Anti-graft and Corrupt Practices Act, has been filed by Governor Mahid Mutilan of the Province of Lanao del Sur before the Office of the Court Administrator which involves unpaid salaries of the petitioners from the provincial government. Complainant claims that Judge Adiong has assumed jurisdiction over the petition immediately upon its filing without conducting any raffle, and that the judge has issued an order requiring the provincial government to answer within ten (10) days from receipt of the petition without it having first been served on complainant. It would appear that in an order, dated 24 September 1998, Judge Adiong granted the motion of the petitioners to declare the respondents in default. Upon learning of the order of default, the provincial government, through its counsel Attorney Johnny Marohombsar, filed a motion to set aside the order of default and scheduled its hearing on 14 October 1998. Judge Adiong, nevertheless, rendered on 5 October 1998, promulgated the following day, a judgment ordering the provincial government of Lanao del Sur “to process, sign and approve the claim vouchers of the petitioners and to pay their just and valid claims in the total amount of P562,966.93; to pay jointly and severally in their official capacities as such respondents to the petitioners the sum of P500,000.00 for moral damages; to pay or indemnify jointly and severally the petitioners the sum of P30,000.00 plus 10% of petitioners’ total claims as attorney’s fees and to pay the costs.” A copy of the decision was served on and received by the Provincial Government of Lanao del Sur on 6 October 1998. On the same day, the petitioners filed a joint motion for garnishment on any account or accounts of the Province of Lanao del Sur, Governor Mahid Mutilan, and the Provincial Treasurer with the Philippine National Bank (PNB), Marawi City, for payment of the adjudged claims which was forthwith granted by Judge Adiong. On 8 October 1998, the petitioners filed a motion for contempt and asking that the PNB immediately release the funds to satisfy the judgment. In an order, dated 09 October 1998, Judge Adiong, acting on the motion, ordered the PNB to immediately release the funds and the bank manager to explain within 72 hours why she should not be cited for contempt. In a memorandum, dated 9 October 1998, Sandra M. Ambor, Senior Assistant Manager of the PNB, ordered the release of the amount of P1,154,263.62 to the court in SPC Civil Case No. 507-98. Subsequently, Judge Adiong issued an order, dated 9 October 1998, directing Sheriff Rimbang Paniambaan to encash the check and disposed of it in accordance with the decision of 5 October 1998. Juge Adiong maintained that the complaint was a form of harassment against him due to the adverse rulings suffered by complainant. He denied the charge that no raffle was conducted. He averred that he had issued an order requiring complainant to answer the petition for mandamus which order was duly served. For failing to file an answer within the reglementary period, the respondents were, upon motion filed by the petitioners, declared in default. Subsequently, a judgment by default was served on the provincial government. Respondent judge maintained that Attorney Johnny Marohombsar, counsel for the provincial government, only filed his entry of appearance when he submitted the motion to lift the order of default on 05 October 1998. OCA: OCA found respondent judge to have ignored established rules and legal principles, and it recommended that respondent judge be ordered to pay a fine of one thousand pesos (P1,000.00), with a stern warning that a repetition of the same or similar act would be dealt with severely.

SC/HELD: SC affirmed OCA’s findings with modification (fine raised to 5k) The Court agrees with the Investigating Justice. A perusal of the motion to declare the respondent in SPC Civil Case No. 507-98 in default, as well as the joint motion for garnishment filed by the petitioners, shows non-compliance with the proof of service and notice of hearing requirements. Rule 15, Sections 4 and 6, of the Revised Rules of Court explicitly provides that every motion required to be heard shall include a notice of hearing, which should be sent to the other party at least three days before the date of hearing, unless the court sets the hearing on shorter notice. Proof of service is mandatory. The Court has invariably held that a motion without a notice of hearing is a mere scrap of paper.Respondent judge has acted too swiftly; he has granted petitioners’ motion to declare the respondents in default, as well as the joint motion for garnishment, without giving the provincial government the opportunity to be heard. Clearly, respondent judge has ignored a fundamental rule. Bacelonia v. Court of Appeals, G.R. No. 143440, February 11, 2004 FACTS: Private respondents Victorino and Olivia Bolos filed a complaint for damages against herein petitioners including Simeon Roxas-Cu and Daniel Cariño before the RTC. The case stemmed from a vehicular accident, involving a tamaraw-type school shuttle service vehicle and a 6 x 6 Isuzu cargo truck,resulting in the untimely demise of private respondents’ daughter, Jemelee Bolos. Jemelee was on board the school shuttle service vehicle. Petitioners-spouses Graciano, Sr. and Serena Bacelonia were named defendants in the said complaint for damages as owners/operators of the school shuttle service that figured in the accident. Graciano Bacelonia, Jr. was the driver thereof. The other defendants therein, Simeon Roxas-Cu and Daniel Cariño were the owner and the driver of the cargo truck, respectively. The petitioners filed their answer with special and affirmative defenses and counterclaim while their co-defendants, Simeon Roxas-Cu and Daniel Cariño, filed their answer with affirmative defenses and cross-claim. Meanwhile, it appears that, prior to the filing of the complaint by the private respondents, petitioners filed a complaint for damages arising from the said accident against their codefendants, from which they entered into a compromise agreement leading to the dismissal of said case. Petitioners filed a motion to be dropped as defendants on the ground that a compromise agreement had already been entered into by the parties. The petitioners opined in essence that their co-defendants, Simeon Roxas-Cu and Daniel Cariño, had explicitly admitted sole responsibility for the vehicular accident by entering into the compromise agreement. Thus, they (the Bacelonias) should be excluded as defendants. However, their co-defendants, Simeon Roxas-Cu and Daniel Cariño, filed an opposition substantially contending that resjudicata does not obtain insofar as the present case is concerned, and that, on the contrary, they never admitted any responsibility for the accident. The trial court resolved to deny the motion of the petitioners to be dropped as defendants from the case for lack of merit. Petitioners filed a motion for reconsideration. On the same day, Petitioners also filed a separate motion to cancel the hearing for the presentation of evidence for the defense earlier scheduled so that their motion for reconsideration may not be rendered moot and Case Digests for Rules 10-19 | page 25

Civil Procedure | February 14, 2014 academic. Private respondents opposed the twin motions of the petitioners for lack of merit. RTC DECISION: The trial court denied the motion for reconsideration. CA DECISION: The petitioners maintained that they were not accorded their right to due process when their motion for reconsideration was denied by the trial court. However, the petition was dismissed for being premature and for lack of merit. The appellate court explained that the questioned order of the trial court was interlocutory and could not be assailed in a petition for certiorari and that, moreover, res judicata did not apply insofar as the claim was concerned. The subsequent motion for reconsideration was also denied. ISSUE: WON the Court of Appeals exceeded its jurisdiction when it dismissed the MR. HELD: No. The motion for reconsideration of the trial court’s resolution on January 10, 2000 was filed by the petitioners on January 31, 2000. The date and time of hearing thereof was set by the petitioners on February 15, 2000 at 8:30 o’clock in the morning. In this connection, Rule 15, Section 5 of the Revised Rules of Court on motions provides:

It should be pointed out that the motion to cancel the scheduled hearing on February 3, 2000 filed on January 31, 2000 by the petitioners was itself scheduled to be heard on February 3, 2000 which latter date, incidentally, was previously set by the trial court for reception of defendants’ evidence. Admittedly, the petitioners were present during the hearing on said date to argue on the merits of their motion to cancel. On the same occasion, the private respondents objected to the motion to cancel the hearing on February 3, 2000, arguing that no compelling reason existed to grant the said pending motion; they proposed instead that petitioners avail of the said setting to argue their motion for reconsideration. Despite the denial by the trial court of their motion to cancel, and a subsequent directive for them to argue their motion for reconsideration on February 3, 2000, the petitioners chose to ignore the same. The petitioners thus had only themselves to blame for not having been heard on their motion for reconsideration. WHEREFORE, the instant petition for review on certiorari is hereby DENIED. Republic v. Peralta, G.R. No. 150327, June 18, 2003

Section 5. Notice of hearing.- The notice of hearing shall be addressed to all parties concerned, and shall specify the time and date of the hearing which must not be later than ten (10) days after the filing of the motion. It is clear then that the scheduled hearing of the said motion for reconsideration was beyond the period specified by the Revised Rules of Court which was not later than ten (10) days after the filing of the motion, or no later than February 10, 2000. Significantly, the above provision of Rule 15, Section 5 uses the mandatory term "must" in fixing the period within which the motion shall be scheduled for hearing. A motion that fails to religiously comply with the mandatory provision of Rule 15, Section 5 is pro forma and presents no question which merits the attention and consideration of the court. The mandatory character of Rule 15, Section 5 of the Revised Rules of Court becomes specially significant in this case, considering the claim of the private respondents that the petitioners have been engaging in dilatory tactics, an imputation not without factual basis. As borne by the records, herein petitioners and their co-defendants, Simeon Roxas-Cu and Daniel Cariño, entered into a compromise agreement on April 27, 1995 that led to the dismissal by the trial court of the complaint in Civil Case No. Q-95-23169 on April 28, 1995. This compromise agreement was already interposed by the petitioners as one of the special and affirmative defenses in their answer to the complaint for damages in Civil Case No. Q-98-33149. Thus it was no longer legally possible for the petitioners to file the Motion to Exclude on September 24, 1999 in Civil Case No. Q-98-33149 (actually a motion to dismiss the case against them), based on a compromise agreement that did not even bind the complainants (herein private respondents) who were not parties thereto. At such stage, the private respondents were already winding up the presentation of their evidence in Civil Case No. Q-98-33149. Upon the denial of their Motion to Exclude on January 10, 2000, the petitioners filed the subject motion for reconsideration on January 31, 2000. In addition, they moved to cancel the scheduled hearing for the initial presentation of their evidence already scheduled on February 3, 2000 ostensibly to give way to oral arguments in support of their motion for reconsideration which, as above discussed, was pro forma. By their actuations, it can be conclusively presumed that the petitioners had no other intention but to delay the proceedings in Civil Case No. Q-98-33149.

Doctrine: The requirements entombed in Sections 4 and 5 of Rule 15 of the Rules of Court are mandatory and non-compliance therewith is fatal and renders the motion pro forma; a worthless piece of paper which the clerk of court has no right to receive and which the court has no authority to act upon. Facts: The Bureau of Forest Development (BFD) utilized a property covered in Davao City, covered by TCT No. T-134231. However, Peralta et. al., claimed ownership over TCT No. T-134231 and demanded BFD to vacate the premises. Thus, a case was filed in RTC. RTC: The RTC ruled in favor of Peralta et. al., acknowledging their right over the subject property. The BFD, through the Office of the Solicitor General (OSG), filed a Motion for Reconsideration (MR). However, the MR was expunged due to the lack of notice of hearing as required by the Rules of Court. In turn, BFD filed its Notice of Appeal to the RTC. However, the RTC ruled that it failed to file its Notice of Appeal within the reglementary period, dismissing their appeal. Thus, BFD filed appealed the case to the CA CA: Upon filing a Petition for Certiorari by the BFD, the CA ruled in favor of Peralta et. al., affirming that the Motion for Reconsideration was defective due to the lack of notice of hearing as required by the Rules of Court. Consequently, BFD’s period to appeal expired, making the Decision of the RTC final and executory. Issue: W/N RTC acted in grave abuse of discretion in not accepting BFD’s Motion for Reconsideration due to lack of notice of hearing as required by the Rules of Court. Held: No, the RTC is correct in not acknowledging BFD’s Motion for Reconsideration.. Section 2, Rule 37 of the Rules of Court provides that a motion for reconsideration or a motion for a new trial shall be made in writing stating the ground or grounds therefor, a written notice of which shall be served by the movant on the adverse party. Such written notice is that prescribed in Sections 4 and 5, Rule 15 of the Rules of Court. Under Section 4, paragraph 2 of said rule, a notice of hearing on a motion shall be served by the movant Case Digests for Rules 10-19 | page 26

Civil Procedure | February 14, 2014 to all the parties concerned at least three days before the date of hearing. Section 5 of the same rule requires that the notice of hearing shall be directed to the parties concerned and shall state the time and place of the hearing of the motion.

increase from the National Power Corporation (NPC) was not implemented yet due to a restraining order issued by the Supreme Court. ZANECO in its answer, assailed the jurisdiction of the trial court over the case.

The requirements entombed in Sections 4 and 5 of Rule 15 of the Rules of Court are mandatory and non-compliance therewith is fatal and renders the motion pro forma; a worthless piece of paper which the clerk of court has no right to receive and which the court has no authority to act upon. In cases of motions for a new trial or for the reconsideration of a judgment, the running of the period for appeal is not tolled by the mere filing or pendency of said motion. Although the petitioners filed the motion for reconsideration dated May 30, 1997 within the reglementary period, said motion failed to comply with Sections 4 and 5 of Rule 15. Furthermore, the OSG offered no valid justification for its failure to comply with Sections 4 and 5, Rule 15 of the Rules of Court except the self-serving claim of Solicitor Evaristo M. Padilla that his omission was sheer inadvertence, caused by heavy pressure of work in preparing numerous pleadings and in the almost daily attendance in court for naturalization cases and those for nullity of marriage, among others. N.B. However, prescinding from all the foregoing, this Court grants not only petitioners’ plea that it suspend its own rule on the perfection of appeals but also directs the reopening of the trial of the case for the parties to adduce their respective evidence. The Court excepts this case from the said rule in the interest of justice, to avert a grave miscarriage of justice to the State through the negligence of the OSG. SC: IN LIGHT OF ALL THE FOREGOING, the decision of the Court of Appeals in CA-G.R. SP No. 53440 is REVERSED AND SET ASIDE. The Orders of the Regional Trial Court of Davao City, Branch 13, dated February 5, 1999 and May 5, 1999 in Civil Case No. 23,16894 are SET ASIDE. The said Regional Trial Court is DIRECTED to reopen the trial to enable the parties to adduce their respective evidence. The Office of the Solicitor General is hereby directed to represent the petitioners during the trial. No costs. RULE 16 Motion to Dismiss Province of Zamboanga Del Norte vs. Court of Appeals G.R. No. 109853, October 11, 2000 DOCTRINE: The premature invocation of the jurisdiction of the trial court warrants the dismissal of the case. FACTS: Petitioner Province of Zamboanga del Norte (represented by Gov. Isagani S. Amatong) filed with the RTC, a complaint against Zamboanga del Norte Electric Cooperative (ZANECO) for "Illegal Collection Of Power Bills And Preliminary Injunction With Restraining Order."

The RTC issued a writ of preliminary injunction ordering respondent to desist from imposing, charging, billing and collecting the FCC and other additional charges upon its end-users in Zamboanga del Norte and the cities of Dipolog and Dapitan and to refrain from cutting off the electric lines of those who refused to pay the questioned charges, pending determination of the litigation. ZANECO filed with the RTC a motion requesting the court to set for hearing the affirmative defenses set in its answer, asking for the dismissal of the case. (Motion to Dismiss) RTC: RTC denied ZANECO’s motion to dismiss. The court ruled that (1) the nullity of the charges imposed are matters not capable of pecuniary estimation and thus fall within the jurisdiction of the regional trial court; and (2) it is futile to file a complaint with the National Electrification Administration (NEA) or the NPC considering that charges imposed by respondent emanated from these agencies. ZANECO filed an MR. The RTC denied ZANECO’s MR. Respondent appealed to the CA. CA: CA reversed the RTC decision. The RTC was ordered to dismiss the complaint. Hence, this petition. Petitioner assails the imposition of the FCC and Incremental Costs Charge (ICC) as void, illegal, and unconstitutional for lack of notice, hearing and consultation of the parties affected, and without prior authority from the ERB. Petitioner rationalized that the Energy Regulatory Board (ERB) has jurisdiction by virtue of EO 172, Section 3 (a) in that ERB is empowered to fix and regulate the prices of petroleum products. Since the FCC was imposed to compensate the cost of diesel fuel, a petroleum product, then such imposition must be approved by the ERB. Petitioner also maintains that the case qualifies as an exception to the rule on exhaustion of administrative remedies, basing its argument on the unconstitutionality and arbitrariness of the imposition of the charges. ISSUE: (These issues are interrelated to the M2D topic) 1. Whether jurisdiction is vested in the ERB, the trial court, or the NEA. 2. W/N the case qualifies as an exception to the rule on exhaustion of administrative remedies which would make the grant of a motion to dismiss improper.

Petitioner alleged that as per electric bills issued by ZANECO, respondent increased the Fuel Compensating Charge (FCC) and Interim Adjustment charges. As a result, the electric bills of the consumers almost doubled in amount. Petitioner claimed that the increase was arbitrary and illegal, and that the Energy Regulatory Board (ERB) did not sanction the collections.

SC: The decision of the CA in setting aside the trial court’s orders and ordering the trial court to dismiss the complaint is AFFIRMED in toto.

Petitioner further alleged that ZANECO cannot increase the bills since the power rate

HELD: Case Digests for Rules 10-19 | page 27

Civil Procedure | February 14, 2014 1.

The real issue is not the compensation of the cost of diesel fuel used to feed the generating set in Mindanao. The complaint was for "Illegal Collection of Power Bills." Since the complaint is one questioning the increase in the power rates, the proper body to investigate the case is the National Electrification Administration (NEA). The regulation and fixing of power rates to be charged by electric cooperatives remain within the jurisdiction of the NEA, despite the enactment of EO 172, creating the Energy Regulatory Board. The issue raised in the complaint is the legality of the imposition of the FCC or ICC. Despite the fact that diesel fuel was used to run its machinery, the fact is that ZANECO charged its consumers to compensate for the increase in the price of fuel. Petitioner did not question the price of diesel fuel. Rather, it questioned the charges passed on to its end users as a result of increase in the price of fuel. And the body with the technical expertise to determine whether or not the charges are legal is the NEA. Thus, a party questioning the rates imposed by an electric cooperative may file a complaint with the NEA as it is empowered to conduct hearings and investigations and issue such orders on the rates that may be charged. In case a party feels aggrieved by any order, ruling or decision of the NEA, he may file a petition for review before the CA.

2.

Before a party is allowed to seek the intervention of the courts, it is a pre-condition that he avail himself of all administrative processes afforded him. Hence, if a remedy within the administrative machinery can be resorted to by giving the administrative officer every opportunity to decide on a matter that comes within his jurisdiction, then such remedy must be exhausted first before the court’s power of judicial review can be sought. The premature resort to the court is fatal to one’s cause of action. Accordingly, absent any finding of waiver or estoppel, the case may be dismissed for lack of cause of action. The doctrine of exhaustion of administrative remedies is not without its practical and legal reasons. Indeed, resort to administrative remedies entails lesser expenses and provides for speedier disposition of controversies. Our courts of justice for reason of comity and convenience will shy away from a dispute until the system of administrative redress has been completed and complied with so as to give the administrative agency every opportunity to correct its error and to dispose of the case. The principle of exhaustion of administrative remedies has certain exceptions as embodied in various cases. This doctrine is a relative one and is flexible depending on the peculiarity and uniqueness of the factual and circumstantial settings of a case. It is disregarded: (1) when there is a violation of due process; (2) when the issue involved is purely a legal question; (3) when the administrative action is patently illegal and amounts to lack or excess of jurisdiction; (4) when there is estoppel on the part of the administrative agency concerned; (5) when there is irreparable injury; (6) when the respondent is a department secretary whose acts, as an alter ego of the President, bears the implied and assumed approval of the latter; (7) when to require exhaustion of administrative remedies would be unreasonable; (8) when it would amount to a nullification of a claim; (9) when the subject matter is a private land in land case proceedings; (10) when the rule does not provide a plain, speedy and adequate remedy; (11) when there are circumstances indicating the urgency of judicial intervention; and unreasonable delay would greatly prejudice the complainant; (12) when no administrative review is provided by law; (13) where the

rule of qualified political agency applies; and (14) when the issue of non-exhaustion of administrative remedies has been rendered moot. Petitioner fails to show that the instant case falls under any of the exceptions. Mere allegation of arbitrariness will not suffice to vest in the trial court the power that has been specifically granted by law to special government agencies. The doctrine of primary jurisdiction does not warrant a court to arrogate unto itself the authority to resolve a controversy, the jurisdiction over which is initially lodged with an administrative body of special competence. It is a basic rule that the court will not interfere in matters which are addressed to the sound discretion of government agencies entrusted with the regulation of activities coming under the special technical knowledge and training of such agencies. In fact, a party with an administrative remedy must not merely initiate the prescribed administrative procedure to obtain relief, but also pursue it to its appropriate conclusion before seeking judicial intervention. The underlying principle of the rule on exhaustion of administrative remedies rests on the presumption that when the administrative body, or grievance machinery, is afforded a chance to pass upon the matter, it will decide the same correctly. The premature invocation of the jurisdiction of the trial court warrants the dismissal of the case.

Tourist Duty Free Shops, inc. vs The Hon. Sandiganbayan G.R. No. 107395, January 26, 2000, 323 SCRA 358 Doctrine: If no motion to dismiss has been filed, an of the grounds for dismissal provided for in the Rules may be pleaded as an affirmative defense in the answer and, in the discretion of the court, a preliminary hearing may be had thereon as if a motion to dismiss had been filed. Dissenting Opinion: A recognized test fro identity is to discover whether a judgment in the prior action would be conclusive on the liability sought to be enforced in the second and would thereby support the pleas of res judicata. Facts: ●

● ●

This petition seeks to nullify and set aside the Resolutions of the Sandiganbayan, Second Division, dated June 15, 1992 and September 23, 1992, which (1) dismissed the complaint for injunction and specific performance filed by petitioner against private respondents; and (2) denied the motion for reconsideration thereof, respectively. The PCGG, through Commissioner Bautista, issued a sequestration order against petitioner. PCGG filed with the Sandiganbayan a complaint for reconveyance, reversion, accounting, restitution and damages against 4 Tantocos, Dominador Santiago, sps Ferdinand Marcos (Civil Case No. 0008) The complaint alleged, among others. ○ Defendants . . . collaborated in the latter's scheme, devices and stratagems to appropriate and conceal the ownership of assets illegally obtained to the grave damage of Plaintiff among others. Case Digests for Rules 10-19 | page 28

Civil Procedure | February 14, 2014 ●

● ●

● ●

●

●

Petitioner assailed the sequestration order via a complaint for injunction and specific performance against herein respondents before the Sandiganbayan (Civil Case No. 0142) ○ In its complaint, petitioner alleged that the writ of sequestration is void because: ■ (1) it was issued without any investigation; ■ (2) all the assets, funds and properties of petitioner were lawfully acquired and earned; ■ (3) the writ of sequestration was signed by only one of the five commissioners of the respondent PCGG; and ■ (4) the respondent PCGG has not filed any action against petitioner to recover the latter's assets, funds and properties, nor has it registered any list of the sequestered assets with the respondent Sandiganbayan pursuant to Section 26, 5 Article XVIII of the 1987 Constitution and therefore, the writ of sequestration is now deemed automatically lifted. ○ As regards respondent Bank of America (BA) and respondent Rizal Commercial Banking Corporation (RCBC), petitioner asserts that said banks refuse to comply with their contractual obligation to allow herein petitioner to withdraw its funds and to honor its checks. Petitioner likewise filed an ex-parte motion to assign the case to the Second Division of the Sandiganbayan praying that the complaint be assigned to the said division where Civil Case No. 0008 is pending. December 23, 1991. Sandiganbayan issued a Resolution requiring the private respondents to file their answers. In its answer, respondent PCGG asserts inter alia: ○ (1) that the writ of sequestration is valid and implemented within the bounds of law; ○ (2) that the PCGG is not the proper party-in-interest but the Republic of the Philippines; ○ (3) that the Republic and the PCGG are immune from suit; and ○ (4) that the case should be dismissed on the ground of litis pendencia or should be consolidated with Civil Case No. 0008 where the subject assets and funds deposited with respondents BA and RCBC are 8 among those placed under sequestration. Respondent RCBC and BA filed their separate answers basically contending that they are merely obeying the writ of sequestration issued by respondent PCGG and that the case should be merely between petitioner and respondent PCGG. March 23, 1992. Petitioner filed a motion for immediate relief pendente lite. The motion was granted in a Resolution dated April 8, 1992. ○ RCBC was ordered to honor the checks of the petitioner issued in payment. ○ May 7, 1992. Petitioner filed another omnibus motion praying for the reconsideration of the aforesaid resolution, to resolve its pending motion for issuance of a writ of preliminary mandatory injunction and to set the case for pre-trial conference. June 15, 1992. Sandiganbayan, without acting on the pending motion of herein petitioner, issued the now assailed Resolution, the decretal portion of which reads ○ WHEREFORE, premises considered, the instant case is hereby dismissed, without costs, and without prejudice to the re-filing by plaintiff of the proper motions in Civil Case No. 0008. Consequently, all pending incidents herein are hereby deemed moot and academic. Petitioner moved for reconsideration alleging that respondent Sandiganbayan

erred in dismissing the case motu proprio and in dismissing the case based on 14 litis pendencia, a ground not enumerated in Section 1, Rule 16 of the Rules of Court. Issue/s: 1. 2.

Whether or not Sandiganbayan dismissed the case without any motion to dismiss having filed by the PCGG. NO. Whether or not Sandiganbayan erred in dismissing the case on the ground of litis pendencia. YES

Held: 1. No. It is erroneous for petitioner to claim that respondent Sandiganbayan dismissed the case without any motion to dismiss having been filed by the private respondent. The dismissal of petitioner's complaint was prayed for by respondent PCGG in its answer and other pleadings. In its answer, the respondent PCGG alleged that: 14. This case should be dismissed on the ground of litis pendencia or there is another action pending involving the same parties for the same cause, i.e. "Republic of the Philippines vs. Bienvenido Tantoco, et al, Civil Case No. 0008; or should be consolidated and/or treated a mere incident of Civil Case No. 0008. 15. The subject assets and funds, deposited with defendants Rizal Commercial Banking Corporation (RCBC) and Bank of America (BA) sequestered by PCGG are among the assets of the defendants in Civil Case No. 0008; Hence, while no motion to dismiss was filed, respondent PCGG has been constantly pleading for the dismissal of the case in its answer and in the subsequent pleadings submitted to the respondent Sandiganbayan. This is allowed under Section 6, Rule 16 of the Rules of Court which provides that if no motion to dismiss has been filed, any of the grounds for dismissal provided for in the Rules may be pleaded as an affirmative defense in the answer and, in discretion of the court, a preliminary hearing may be had thereon as if a motion to dismiss had been filed. A preliminary hearing on the affirmative defense invoking any of the grounds for dismissal is not even mandatory as may be shown from the use of the word "may" in the above rule. 2. Yes. Nonetheless, it was erroneous for the Sandiganbayan to dismiss this case on the ground of litis pendencia. The requisiutes of litis pendencia, to note, are the following: 1. Identify of parties or of representation in both cases, 2. Identify of rights asserted and relief prayed for, 3. The relief must be founded on the same facts and the same basis, and 4. Identity in the two preceding particulars should be such that any judgment which may be rendered in the other action, will, regardless of which party is successful, amount to res judicata on the action under consideration. These requisites are absent in this case. For one, there are no identity of parties in the present case and Civil Case No. 0008. Here, petitioner, RCBA and BA are not parties in Civil Case No. 0008. Neither are the defendants in the latter case parties to the present case. Also, there is no identity of rights asserted and relief prayed for. The action in Civil Case No. 0008 involved "reconveyance, reversion, accounting, restitution and damages" against defendants therein which does not include petitioner, RCBC or BA, while the main thrust of the instant case is for specific performance against RCBC and BA. The evident and logical conclusion then is that any decision that may be rendered in any of these two cases cannot constitute res judicata on the other. The instant case and Civil Case No. 0008, therefore, ought to be resolved independently. To merge the former with the latter case via mere motion is clearly unwarranted.

Case Digests for Rules 10-19 | page 29

Civil Procedure | February 14, 2014 SC: The Resolutions of the respondent Sandiganbayan dated June 15, 1992 and September 23, 1992 are hereby REVERSED and SET ASIDE.

the answer, if apparent on the face of the complaint. HELD: NO

Dino vs. Court of Appeals G.R. No. 113564, June 23, 2001, 359 SCRA 91 DOCTRINE: (T)rial courts have authority and discretion to dismiss an action on the ground of prescription when the parties' pleadings or other facts on record show it to be indeed time-barred; and it may do so on the basis of a motion to dismiss (Sec. 1,f, Rule 16, Rules of Court), or an answer which sets up such ground as an affirmative defense (Sec. 5, Rule 16), or even if the ground is alleged after judgment on the merits, as in a motion for reconsideration; or even if the defense has not been asserted at all, as where no statement thereof is found in the pleadings; or where a defendant has been declared in default. 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." FACTS: Petitioners spouses Dino, doing business under the trade name "Candy Claire Fashion Garment" are engaged in the business of manufacturing and selling shirts. Respondent Sio is part owner and general manager of a manufacturing corporation doing business under the trade name "Universal Toy Master Manufacturing." Petitioners and respondent Sio entered into a contract whereby the latter would manufacture for the petitioners 20,000 pieces of vinyl frogs and 20,000 pieces of vinyl mooseheads. These frogs and mooseheads were to be attached to the shirts petitioners would manufacture and sell. Respondent Sio delivered the products. The last delivery was made on September 28, 1988. Petitioner fully paid the agreed price. Subsequently, petitioners returned to respondent 29,772 pieces of frogs and mooseheads for failing to comply with the approved sample. Petitioners then demanded from the respondent a refund of the purchase price of the returned goods in the amount of P208,404.00. As respondent Sio refused to pay, petitioners filed on July 24, 1989 an action for collection of a sum of money RTC Manila.

The contract executed by and between the petitioners and the respondent was a contract for a piece of work. Petitioners aver that they discovered the defects in respondent's products when customers in their (petitioners') shirt business came back to them complaining that the frog and moosehead figures attached to the shirts they bought were torn. Petitioners allege that they did not readily see these hidden defects upon their acceptance. A hidden defect is one which is unknown or could not have been known to the vendee. Article 1567 provides for the remedies available to the vendee in case of hidden defects, viz: "Art. 1567. In the cases of Articles 1561, 1562, 1564, 1565 and 1566, the vendee may elect between withdrawing from the contract and demanding a proportionate reduction of the price, with damages in either case." By returning the 29,772 pieces of vinyl products to respondent and asking for a return of their purchase price, petitioners were in effect "withdrawing from the contract" as provided in Art. 1567. The prescriptive period for this kind of action is provided in Art. 1571 of the New Civil Code, viz: "Art. 1571. Actions arising from the provisions of the preceding ten articles shall be barred after six months from the delivery of the thing sold. There is no dispute that respondent made the last delivery of the vinyl products to petitioners on September 28, 1988. It is also settled that the action to recover the purchase price of the goods petitioners returned to the respondent was filed on July 24, 1989, more than nine months from the date of last delivery. Petitioners having filed the action three months after the six-month period for filing actions for breach of warranty against hidden defects stated in Art. 1571, the appellate court dismissed the action. Petitioners fault the ruling on the ground that it was too late in the day for respondent to raise the defense of prescription. The law then applicable to the case at bar, Rule 9,

TC: TC ruled in favor of the petitioners. Respondent Sio sought recourse in the Court of Appeals which affirmed the trial court’s decision. Respondent then filed a Motion for Reconsideration and a Supplemental Motion for Reconsideration alleging therein that the petitioners' action for collection of sum of money based on a breach of warranty had already prescribed. CA: Respondent court reversed its decision and dismissed petitioners' Complaint for having been filed beyond the prescriptive period. "Even if there is failure to raise the affirmative defense of prescription in a motion to dismiss or in an appropriate pleading (answer, amended or supplemental answer) and an amendment would no longer be feasible, still prescription, if apparent on the face of the complaint may be favorably considered ISSUE: WON CA erred in dismissing the petitioner’s complaint and holding that the defense of prescription would still be considered despite the fact that it was not raised in

Sec. 2 of the Rules of Court, provides: "Defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived; except the failure to state a cause of action . . . " Thus, they claim that since the respondent failed to raise the defense of prescription in a motion to dismiss or in its answer, it is deemed waived and cannot be raised for the first time on appeal in a motion for reconsideration of the appellate court's decision. As a rule, the defense of prescription cannot be raised for the first time on appeal. However, this is not a hard and fast rule. In Gicano v. Gegato, we held: ". . .(T)rial courts have authority and discretion to dismiss an action on the ground of prescription when the parties' pleadings or other facts on record show it to be indeed time-barred; and it may do so on the basis of a motion to dismiss (Sec. 1,f, Rule 16, Rules of Court), or an answer which sets up such ground as an affirmative defense (Sec. 5, Rule 16), or even if the Case Digests for Rules 10-19 | page 30

Civil Procedure | February 14, 2014 ground is alleged after judgment on the merits, as in a motion for reconsideration; or even if the defense has not been asserted at all, as where no statement thereof is found in the pleadings; or where a defendant has been declared in default. 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." In Aldovino, et al. v. Alunan, et al., the Court en banc reiterated the Garcia v. Mathis doctrine cited in the Gicano case that when the plaintiff's own complaint shows clearly that the action has prescribed, the action may be dismissed even if the defense of prescription was not invoked by the defendant. It is apparent in the records that respondent made the last delivery of vinyl products to the petitioners on September 28, 1988. Petitioners admit this in their Memorandum submitted to the trial court and reiterate it in their Petition for Review. It is also apparent in the Complaint that petitioners instituted their action on July 24, 1989. The issue for resolution is whether or not the respondent Court of Appeals could dismiss the petitioners' action if the defense of prescription was raised for the first time on appeal but is apparent in the records. Following the Gicano doctrine that allows dismissal of an action on the ground of prescription even after judgment on the merits, or even if the defense was not raised at all so long as the relevant dates are clear on the record, we rule that the action filed by the petitioners has prescribed. The dates of delivery and institution of the action are undisputed. There are no new issues of fact arising in connection with the question of prescription, thus carving out the case at bar as an exception from the general rule that prescription if not impleaded in the answer is deemed waived. Even if the defense of prescription was raised for the first time on appeal in respondent's Supplemental Motion for Reconsideration of the appellate court's decision, this does not militate against the due process right of the petitioners. On appeal, there was no new issue of fact that arose in connection with the question of prescription, thus it cannot be said that petitioners were not given the opportunity to present evidence in the trial court to meet a factual issue. Equally important, petitioners had the opportunity to oppose the defense of prescription in their Opposition to the Supplemental Motion for Reconsideration filed in the appellate court and in their Petition for Review in this Court. WHEREFORE, the petition is DENIED and the impugned decision of the Court of Appeals dated January 24, 1994 is AFFIRMED. No costs. Indians Aerospace University vs. Commission on Higher Education (CHED) G.R. No. 139371, April 4, 2001, 356 SCRA 367 GAUDIEL Doctrine: A writ of certiorari is not intended to correct every controversial interlocutory ruling, it is resorted only to correct grave abuse of discretion. In the case at bar, there was no grave abuse of discretion in the lower court’s denial of the Motion to Dismiss since the acts of CHED such as declaring in a newspaper that Indiana was ordered closed for illegal advertisement, undermined the public's confidence in Indiana as an educational institution.

Facts: CHED received a letter from the Chairman of Professional Regulatory Commission inquiring whether Indiano Aerospace already acquired university status in view of its advertisement as such in Manila Bulletin. Upon investigation, it was verified from SEC that Indiana School of Aeronautics failed to amend its articles if Incorporation to change its name to Indiana Aerospace University. Thus, CHED ordered it to desist from using the term University. Prior thereto, Indiana Aerospace filed a complaint for damages with a prayer for Writ of Preliminary Injunction. CHED, on the other hand filed a motion to Dismiss. The lower court dismissed the Motion to Dismiss and Granted Indiana’s prayer for Preliminary Injunction. Likewise, Indiana Aerospace filed before the lower court a Motion to declare CHED in Default. CHED filed a Motion for Extension of Time to File its Answer TC: The lower court ruled on Indiana’s motion to declare CHED in Default and directed it to present evidence ex parte. CA: CA ruled that Indiana had no cause of action against CHE since it failed to show that it had been granted university status by CHED, and ruled that CHED should not have been declared in default since its Answer had long been filed before the lower court ruled upon Indiana’s Motion to declare it in default. Issue: Was the certiorari petition properly and timely filed because it was filed out of time and was not preceded by a motion for reconsideration in the RTC? HELD: Yes. SC: CHED’s Petition for Certiorari was seasonable filed. In computing its timeliness, what should have been considered is the date when the respondent received the Order declaring it in default. In the case at bar, CHED was able to comply with the 60day reglamentary period to file its Petition for Certiorari. As to its contention that a motion for reconsideration should precede the petition for certiorari, the general rule is that the lower court should be given the opportunity to correct itself and thus a motion for reconsideration should precede a petitioner for certiorari. However, exception to such are: a) when issues are purely legal; b) public interest is involved; c) extreme urgency; d) special circumstances so warrant. In the case at bar, regulation of educational institutions is invested with public interest; thus there is not need to resort first to a motion for reconsideration. Lastly, an order denying a motion to dismiss is interlocutory; the proper remedy is to appeal after a decision has been rendered. A writ of certiorari is not intended to correct every controversial interlocutory ruling, it is resorted only to correct grave abuse of discretion. In the case at bar, there was no grave abuse of discretion in the lower court’s denial of the Motion to Dismiss since the acts of CHED such as declaring in a newspaper that Indiana was ordered closed for illegal advertisement, undermined the public's confidence in Indiana as an educational institution. Case Digests for Rules 10-19 | page 31

Civil Procedure | February 14, 2014 This was a clear statement of a sufficient cause of action. Doctrine: San Lorenzo Village Association, Inc. vs. Court of Appeals G. R. No. 116826, March 26, 1998, 288 SCRA 115 Doctrines: 1) A complaint states a cause of action where it contains (3) essential elements of a cause of action a. The legal right of the plaintiff b. The correlative obligation of the defendant c. The act or omission of the defendant in violation of the said right 2) A motion to dismiss on the ground of failure to state a cause of action in the complaint hypothetically admits the truth of the facts alleged therein. However, the admissions do not extend to conclusions or interpretations of law, nor does it cover allegations of fact the falsity of which is subject to judicial notice 3) It is not “lack or absence of cause of action” that is a ground for dismissal of the complaint, but rather that the complaint states no cause of action Facts: Almeda Development was the owner the parcel of land situated in San Lorenzo Village. In the Transfer Certificates, the owner of the said land is required to be a member of San Lorenzo Village Association, the lot shall only be used for residential purposes, and buildings shall not be higher than 5 meters above ground. The said restrictions were imposed by San Lorenzo Company. Almeda Development prayed for the issuance of TRO directing San Lorenzo Company to cease and desist from making petitioner a member of the village association and prohibiting the petitioner to construct taller buildings San Lorenzo Village Association filed a motion to dismiss on the ground of lack of cause of action and ADEC’s lack of personality to sue. It alleges that ADEC was not a registered owner of the land covered by the Transfer Certificate of Title and that the sale of the property by the previous owner to Almeda Development could not bind 3rd parties.

Facts: The vessel MV "SUGAR ISLANDER" arrived at the port of Manila carrying a cargo of soybean meal in bulk consigned to several consignees, one of which was the Metro Manila Feed Millers Association (Metro). Discharging of cargo from vessel to barges commenced. From the barges, the cargo was allegedly offloaded, rebagged and reloaded on consignee’s delivery trucks. Respondent, however, claims that when the cargo [was] weighed on a licensed truck scale a shortage of 255.051 metric tons valued at P1,621,171.16 was discovered. Such shipment was insured with private respondent against all risk in the amount of P19,976,404.00. Petitioners refuse to settle their liabilities. Insurer paid consignee Metro. Sometimes later, as alleged subrogee of Metro, private respondent filed a complaint for damages against herein petitioners. Within the reglementary period to file an Answer, petitioners filed a Motion to Dismiss the complaint on the ground that respondent’s claim is premature, the same being arbitrable. Private respondent filed its Opposition thereto and petitioners filed their Reply to Opposition. RTC issued an order deferring hearing on the Motion to Dismiss until the trial and directing petitioners to file their Answer. → Petitioners moved to reconsider said Order → Denied by RTC (on the ground that the reason by which its Motion to Dismiss and Motion for Reconsideration relies upon is a defense that must be proven with their evidence). Petitioners filed their Answer with Counterclaim and Crossclaim alleging therein that plaintiff, herein respondent, did not comply with the arbitration clause of the charter party; hence, the complaint was allegedly prematurely filed. → RTC set case for pre-trial. Petitioners filed a Motion to Defer Pre-Trial and Motion to Set for Preliminary Hearing the Affirmative Defense of Lack of Cause of Action for Failure to comply with Arbitration Clause → Private respondent did not file an Opposition to the said Motion to Set for Preliminary Hearing. RTC: Issued an Order denying Petitioners’ Motion for Reconsideration.

Issue: Whether there is Almeda Development has a cause of action against San Lorenzo Village Association? Held: YES, Almeda Development has a cause of action. When Almeda Development purchased the property from the previous owner, it became the a successor in interest of the vendor, if not the owner of the property. Hence the restrictions in the title should be nullified not only because it is contrary to law but also because the condition under which they were imposed had ceased to exist. The averments in the complaint like the title of Almeda Development’s vendor, the execution of the sale by the said vendor to Almeda, the status as the vendor’s successor in interest, and the altered physical improvement in Pasay road , are well within the hypothetical admission principle. As such, the averments satisfy the (3) elements of cause of action California and Hawaiian Sugar Company; Pacific Gulf Marine, Inc. and C.G. Sharp & Company vs. Pioneer Insurance and Surety Corporation G.R. No. 139273, November 28, 2000, 346 SCRA 214

CA: Affirmed the RTC. CA held that petitioners cannot rely on Section 5, Rule 16 because a Motion to Dismiss had previously been filed. Further, it ruled that the arbitration clause provided in the charter party did not bind respondent. "Petitioners’ reliance on said provision is misplaced. The abovementioned provision contemplates a situation where no motion to dismiss is filed. If a motion to dismiss has been filed, as in the case at bar, Section 5, Rule 16 of the Old Rules of Court will not come into play. Furthermore, the same provision gives the judge discretion whether to set for preliminary hearing the grounds for affirmative defenses. Respondent judge deferred the hearing and determination of the Motion to Dismiss until the trial since the ground relied upon by petitioners therein did not appear to be indubitable. Petitioners then filed their Answer as ordered by the Court again raising as an affirmative defense lack of cause of action for failure to comply with [the] arbitration clause, praying for the dismissal of the complaint against them, and filing afterwards a Motion to Set for Preliminary Hearing the Affirmative Defense of lack of Cause of Action. In effect, petitioners are asking the trial court to set aside its Order denying the Case Digests for Rules 10-19 | page 32

Civil Procedure | February 14, 2014 Motion to Dismiss and Order denying the Motion for Reconsideration thereof. Issues: 1) WON CA erred in denying petitioners’ Motion for Preliminary Hearing the affirmative defense for lack of cause of action? YES. 2) WON CA committed grave abuse of discretion? YES. Held: 1) YES. Section 5, Rule 16 of the pre-1997 Rules of Court, reads: "Sec. 5. Pleading grounds as affirmative defenses. - Any of the grounds for dismissal provided for in this Rule, except improper venue, may be pleaded as an affirmative defense, and a preliminary hearing may be had thereon as if a motion to dismiss had been filed." Section 6, Rule 16 of the 1997 Rules specifically provides that a preliminary hearing on the affirmative defenses may be allowed only when no motion to dismiss has been filed. Section 6, however, must be viewed in the light of Section 3 of the same Rule, which requires courts to resolve a motion to dismiss and prohibits them from deferring its resolution on the ground of indubitability. Clearly then, Section 6 disallows a preliminary hearing of affirmative defenses once a motion to dismiss has been filed because such defense should have already been resolved. In the present case, however, the trial court did not categorically resolve petitioners’ Motion to Dismiss, but merely deferred resolution thereof. The present Rules are consistent with Section 5, Rule 16 of the pre-1997 Rules of Court, because both presuppose that no motion to dismiss had been filed; or in the case of the pre-1997 Rules, if one has been filed, it has not been unconditionally denied. Hence, the ground invoked may still be pleaded as an affirmative defense even if the defendant’s Motion to Dismiss has been filed but not definitely resolved, or if it has been deferred as it could be under the pre-1997 Rules. 2) Due to this, CA can be held to have committed a grave abuse of discretion for denying the motion for a preliminary hearing. Undeniably, a preliminary hearing is not mandatory, but subject to the discretion of the trial court. In the light of the circumstances in this case, though, we find that the lower court committed grave abuse of discretion in refusing to grant the Motion. We note that the trial court deferred the resolution of petitioners’ Motion to Dismiss because of a single issue. It was apparently unsure whether the charter party that the bill of lading referred to was indeed the Baltimore Berth Grain Charter Party submitted by petitioners.1âwphi1

20, 2002, 377 SCRA 459 FACTS: Carmel Development, Inc. filed with the Regional Trial Court of Caloocan City a Complaint for recovery of possession with preliminary injunction against the DECS and the Caloocan City School Board (“School Board” for brevity). Carmel sought to recover possession of a parcel of land covered by Transfer Certificate of Title No. (64007)15807, allegedly occupied by the Pangarap Elementary School and the Pangarap High School which were established by the Department of Education. The DECS filed a Motion for Extension of Time to File Answer dated April 16, 1998 as well as a Manifestation with Motion to Dismiss dated April 24, 1998. On April 27, 1998, Carmel filed a Motion to Declare Defendants in Default alleging that the period to answer had already lapsed since the subpoenas were served upon the DECS and the School Board on April 2, 1998 and March 2, 1998, respectively. On the same day, April 27, 1998, the trial court granted the motion declaring the DECS and the School Board in default and allowing Carmel to present its evidence ex parte. In an Order dated April 29, 1998, the trial court declared the “Motion for Extension of Time to File Answer filed on April 28, 1998 by the DECS and the School Board as moot and academic.” Thereafter, in an Order dated April 30, 1998, the trial court declared that “no action shall be taken on the Manifestation with Motion to Dismiss filed on April 30, 1998 by the Department of Education and the School Board considering that the defendants have already been declared in default and have lost their standing in court.” On May 14, 1998, the DECS filed a Motion for Reconsideration of the Orders dated April 27, 29 and 30, 1998 and to Lift Order of Default. It contended that it seasonably filed its motion for extension of time to file its answer on April 16, 1998. It also claimed that it filed its motion to dismiss within the reglementary period. It explained that the summons issued on March 23, 1998 was received by the School Board on March 27, 1998 and not on March 2, 1998 as erroneously found by the trial court. The Department of Education further claimed that Carmel failed to notify and furnish it with a copy of the motion to declare it in default. Aside from praying for the lifting of the order of default, the Department of Education likewise sought the dismissal of the case for violation of Supreme Court Administrative Circular No. 04-94 on forum shopping. Carmel filed an Opposition on June 8, 1998. In an Order dated June 15, 1998, the trial court set aside its orders dated April 27, 29 and 30, 1998 and lifted the order of default. The trial court, however, denied the dismissal of the case, explaining thus:

Considering that there was only one question, which may even be deemed to be the very touchstone of the whole case, the trial court had no cogent reason to deny the Motion for Preliminary Hearing. Indeed, it committed grave abuse of discretion when it denied a preliminary hearing on a simple issue of fact that could have possibly settled the entire case. Verily, where a preliminary hearing appears to suffice, there is no reason to go on to trial. One reason why dockets of trial courts are clogged is the unreasonable refusal to use a process or procedure, like a motion to dismiss, which is designed to abbreviate the resolution of a case.

“The Court after considering the arguments in support of and against the motion resolves as it hereby RESOLVED to grant the same. The interest of justice would be better served if the defendants shall be allowed to file their answer to enable them to ventilate their defenses and to enable the plaintiff to prove its causes of action and claims against the defendant, setting aside technicalities. This objective could only be attained in a full-blown trial. The defendants likewise moved for the dismissal of the case for the alleged violation by the Plaintiff of the Supreme Court Administrative Circular No. 04-94. The Court finds, however, substantial compliance of the aforesaid circular, hence the motion for the dismissal of this case is hereby DENIED.”

Republic of the Philippines vs. Carmel Development, Inc. G.R. No. 142572, February

The Department of Education filed a Manifestation with Motion for Reconsideration of the Order dated June 15, 1998. It contended that the trial court’s finding of “substantial Case Digests for Rules 10-19 | page 33

Civil Procedure | February 14, 2014 compliance” with the Supreme Court Circular had “no factual or legal bases to stand on.” It also maintained that Carmel is engaged in forum shopping. Carmel filed its Opposition dated July 31, 1998 claiming that the issues in the other pending cases are different. On August 17, 1998, the trial court issued an Order denying the Department of Education’s motion for reconsideration, reasoning out as follows: “x x x. Aside from the bare assertion that the instant case is similar to the cases pending before Branch 126, RTC, Caloocan City, no other proof, however, has been submitted by the movants to support the same. Moreover, in the case of Kavinta vs. Castillo, Jr., 249 SCRA 604, our court ruled that `Administrative Circular No. 04-94 is mandatory but substantial compliance therewith is sufficient.’” x x x.” Dissatisfied, the DECS filed a petition for certiorari under Rule 65 of the 1997 Revised Rules of Civil Procedure before the Court of Appeals seeking to annul the trial court’s orders dated June 15, 1998 and August 17, 1998. Carmel filed a Comment as well as a Supplemental Comment while the Department of Education filed its Reply. On August 16, 1999, the Court of Appeals dismissed the Department of Education’s petition for certiorari and denied on March 17, 2000 the motion to reconsider the same. Hence, this Petition. ISSUE (Relevant to CivPro): Whether or not the Court of Appeals erred in not ruling that grave abuse of discretion was committed by the RTC when the latter denied petitioner’s motion to dismiss notwithstanding the fact that private respondent’s pleading shows litis pendentia HELD: Yes. The DECS takes exception to the finding of the Court of Appeals that no fault may be attributed to the trial court when it denied its motion to dismiss on the ground of litis pendentia since “petitioner did not attach to its Motion to Dismiss and Motion for Reconsideration the proper pleadings in said civil cases to show that the civil cases and the complaint filed before respondent judge involve the same issues of ownership and possession.” The DECS alleged in its Manifestation with Motion to Dismiss that Carmel is engaged in forum shopping and did not inform the court that plaintiff and defendants are parties in two other civil cases pending before Branch 126 of the Regional Trial Court of Caloocan City involving the same issues of ownership and possession of subject land, namely: “1. Civil Case No. 17762, entitled: Carmel Farms vs. Clarita M. Martinez et al., an action to enjoin public respondents from pursuing the construction of the proposed additional school building of Pangarap High School on plaintiffs’ lots; 2. Civil Case No. C-16181, entitled Pangarap Neighborhood Association Inc. vs. Carmel Farms, et. al for Declaration of Ownership and/or Quieting of Title, Cancellation of Annotation with Damages.” The Court of Appeals, in brushing aside this issue, agreed with the trial court that no proof was attached to the Motion to Dismiss and to the Motion for Reconsideration to support this allegation. Sections 2 and 3 of Rule 16 (Motion to Dismiss) of the 1997 Rules allow the presentation

of evidence during the hearing on the motion to dismiss as follows: “SEC. 2. Hearing of motion. – At the hearing of the motion, the parties shall submit their arguments on the questions of law and their evidence on the questions of fact involved except those not available at that time. Should the case go to trial, the evidence presented during the hearing shall automatically be part of the evidence of the party presenting the same. SEC. 3. Resolution of motion. – After the hearing, the court may dismiss the action or claim, deny the motion, or order the amendment of the pleading. The court shall not defer the resolution of the motion for the reason that the ground relied upon is not indubitable. In every case, the resolution shall state clearly and distinctly the reasons therefor.” These sections provide that at the hearing of the motion, the parties shall submit all arguments and evidence then available. If the case goes to trial, the evidence presented shall automatically constitute part of the evidence of the party who presented the same. Thus, it is not necessary to attach to the motion to dismiss the evidence required to establish the movant’s cause and failure to do so is not fatal to his case. The requisites in order that an action may be dismissed on the ground of litis pendentia are: (a) the identity of parties, or at least such as representing the same interest in both actions; (b) the identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) the identity of the two cases such that judgment in one, regardless of which party is successful, would amount to res judicata in the other. Forum shopping exists where the elements of litis pendentia are present or where a final judgment in one case will amount to res judicata in the other. The Department of Education points out that aside from Civil Case No. 18264, subject of the instant petition, there are two other cases pending before another court involving identical parties, issues and reliefs prayed for. The Department of Education asserts that in Civil Case No. 18264, Carmel seeks to recover possession against the Department of Education and the School Board the parcel of land allegedly occupied by Pangarap High School. In Civil Case No. 17762, Carmel seeks to enjoin Clarita M. Martinez, school principal of Pangarap High School and a representative of the Department of Education, from proceeding with the construction of additional school buildings on the same parcel of land. Meanwhile, Civil Case No. C-16181 is an action for declaration of ownership and quieting of title involving the same parcel of land. In sum, the Department of Education argues that all three cases revolve around the same parties' conflicting claims of ownership and possession over the same parcel of land. Carmel posits the contrary and insists that there can be no litis pendentia or forum shopping. According to Carmel, the Department of Education and the School Board are not parties in Civil Case No. C-16181 which involves ownership of a parcel of land. It also claims that Civil Case No. 17762 is an injunction case to enjoin the school principal and other defendants from constructing additional school buildings. It further contends that these cases are different from Civil Case No. 18264, subject of the instant petition, which is an action for recovery of possession. To bolster its stance, Carmel points out that assuming it obtains a favorable judgment in the injunction case, this would not automatically entitle it to eject the Department of Education or recover possession of the property and that a separate action for this purpose is necessary. An important issue of fact exists - whether there are two other similar cases pending in another court as alleged in the motion to dismiss. Since resolution of this issue requires presentation of proof, the trial court should not have decided the issue without giving the Case Digests for Rules 10-19 | page 34

Civil Procedure | February 14, 2014 parties an opportunity to present proof of their respective stand in a hearing duly held for that purpose. In light of Sections 2 and 3 of Rule 16, the appellate court erred in finding that there was no grave abuse of discretion on the part of the trial court in precipitately denying the motion to dismiss without so much as a hearing and giving the party concerned an opportunity to present its proof. Verily, the charge of forum shopping or litis pendentia, which works havoc upon orderly judicial procedure, requires the presentation of proof and the Department of Education should have been given an opportunity to do so. Heirs of Loreto Maramag v.Maramag, G.R. No. 181132, June 5, 2009 FACTS: The petition alleged that: (1) petitioners were the legitimate wife and children of Loreto Maramag (Loreto), while respondents were Loreto’s illegitimate family; (2) Eva de Guzman Maramag (Eva) was a concubine of Loreto and a suspect in the killing of the latter, thus, she is disqualified to receive any proceeds from his insurance policies from Insular Life Assurance Company, Ltd. (Insular) and Great Pacific Life Assurance Corporation (Grepalife); (3) the illegitimate children of Loreto—Odessa, Karl Brian, and Trisha Angelie— were entitled only to one-half of the legitime of the legitimate children, thus, the proceeds released to Odessa and those to be released to Karl Brian and Trisha Angelie were inofficious and should be reduced; and (4) petitioners could not be deprived of their legitimes, which should be satisfied first. In answer, Insular admitted that Loreto misrepresented Eva as his legitimate wife and Odessa, Karl Brian, and Trisha Angelie as his legitimate children, and that they filed their claims for the insurance proceeds of the insurance policies; that when it ascertained that Eva was not the legal wife of Loreto, it disqualified her as a beneficiary and divided the proceeds among Odessa, Karl Brian, and Trisha Angelie, as the remaining designated beneficiaries; and that it released Odessa’s share as she was of age, but withheld the release of the shares of minors Karl Brian and Trisha Angelie pending submission of letters of guardianship. Insular alleged that the complaint or petition failed to state a cause of action insofar as it sought to declare as void the designation of Eva as beneficiary, because Loreto revoked her designation as such in Policy No. A001544070 and it disqualified her in Policy No. A001693029; and insofar as it sought to declare as inofficious the shares of Odessa, Karl Brian, and Trisha Angelie, considering that no settlement of Loreto’s estate had been filed nor had the respective shares of the heirs been determined. Insular further claimed that it was bound to honor the insurance policies designating the children of Loreto with Eva as beneficiaries pursuant to Section 53 of the Insurance Code. In its own answer with compulsory counterclaim, Grepalife alleged that Eva was not designated as an insurance policy beneficiary; that the claims filed by Odessa, Karl Brian, and Trisha Angelie were denied because Loreto was ineligible for insurance due to a misrepresentation in his application form that he was born on December 10, 1936 and, thus, not more than 65 years old when he signed it in September 2001; that the case was premature, there being no claim filed by the legitimate family of Loreto; and that the law on succession does not apply where the designation of insurance beneficiaries is clear. TC: The trial court issued a Resolution, the dispositive portion of which reads – WHEREFORE, the motion to dismiss incorporated in the answer of defendants Insular Life and Grepalife is granted with respect to defendants Odessa, Karl Brian and Trisha Maramag. The action shall proceed with respect to the other defendants Eva Verna de Guzman, Insular Life and Grepalife.

CA: It dismissed the appeal for lack of jurisdiction, holding that the decision of the trial court dismissing the complaint for failure to state a cause of action involved a pure question of law. ISSUES: ● In determining the merits of a motion to dismiss for failure to state a cause of action, may the Court consider matters which were not alleged in the Complaint, particularly the defenses put up by the defendants in their Answer? ● In granting a motion for reconsideration of a motion to dismiss for failure to state a cause of action, did not the Regional Trial Court engage in the examination and determination of what were the facts and their probative value, or the truth thereof, when it premised the dismissal on allegations of the defendants in their answer – which had not been proven? HELD: THE PETITION SHOULD BE DENIED. The grant of the motion to dismiss was based on the trial court’s finding that the petition failed to state a cause of action, as provided in Rule 16, Section 1(g), of the Rules of Court, which reads – SECTION 1. Grounds. – Within the time for but before filing the answer to the complaint or pleading asserting a claim, a motion to dismiss may be made on any of the following grounds: xxxx (g) That the pleading asserting the claim states no cause of action. A cause of action is the act or omission by which a party violates a right of another. A complaint states a cause of action when it contains the three (3) elements of a cause of action—(1) the legal right of the plaintiff; (2) the correlative obligation of the defendant; and (3) the act or omission of the defendant in violation of the legal right. If any of these elements is absent, the complaint becomes vulnerable to a motion to dismiss on the ground of failure to state a cause of action. When a motion to dismiss is premised on this ground, the ruling thereon should be based only on the facts alleged in the complaint. The court must resolve the issue on the strength of such allegations, assuming them to be true. The test of sufficiency of a cause of action rests on whether, hypothetically admitting the facts alleged in the complaint to be true, the court can render a valid judgment upon the same, in accordance with the prayer in the complaint. This is the general rule. However, this rule is subject to well-recognized exceptions, such that there is no hypothetical admission of the veracity of the allegations if: 1. the falsity of the allegations is subject to judicial notice; 2. such allegations are legally impossible; 3.the allegations refer to facts which are inadmissible in evidence; 4. by the record or document in the pleading, the allegations appear unfounded; or 5. there is evidence which has been presented to the court by stipulation of the parties or in the course of the hearings related to the case. In this case, it is clear from the petition filed before the trial court that, although petitioners are the legitimate heirs of Loreto, they were not named as beneficiaries in the insurance Case Digests for Rules 10-19 | page 35

Civil Procedure | February 14, 2014 policies issued by Insular and Grepalife. The basis of petitioners’ claim is that Eva, being a concubine of Loreto and a suspect in his murder, is disqualified from being designated as beneficiary of the insurance policies, and that Eva’s children with Loreto, being illegitimate children, are entitled to a lesser share of the proceeds of the policies. They also argued that pursuant to Section 12 of the Insurance Code, Eva’s share in the proceeds should be forfeited in their favor, the former having brought about the death of Loreto. Thus, they prayed that the share of Eva and portions of the shares of Loreto’s illegitimate children should be awarded to them, being the legitimate heirs of Loreto entitled to their respective legitimes. It is evident from the face of the complaint that petitioners are not entitled to a favorable judgment in light of Article 2011 of the Civil Code which expressly provides that insurance contracts shall be governed by special laws, i.e., the Insurance Code. Section 53 of the Insurance Code states— SECTION 53. The insurance proceeds shall be applied exclusively to the proper interest of the person in whose name or for whose benefit it is made unless otherwise specified in the policy. Pursuant thereto, it is obvious that the only persons entitled to claim the insurance proceeds are either the insured, if still alive; or the beneficiary, if the insured is already deceased, upon the maturation of the policy. The exception to this rule is a situation where the insurance contract was intended to benefit third persons who are not parties to the same in the form of favorable stipulations or indemnity. In such a case, third parties may directly sue and claim from the insurer. Petitioners are third parties to the insurance contracts with Insular and Grepalife and, thus, are not entitled to the proceeds thereof. Accordingly, respondents Insular and Grepalife have no legal obligation to turn over the insurance proceeds to petitioners. SC: DENIED RULE 17 Dismissal of Action Producers Bank of the Phils. v. CA, G.R. No. 125468, Oct. 9, 2000, 342 SCRA 327

million peso loan of New Cotton, claiming that he never signed nor authorized anyone to sign the surety in his behalf. He avers that the signature appearing on the surety agreement was a forgery. On February 27, 1990, petitioner filed a motion to reinstate the order of attachment, which was opposed by private respondent Kho. At the hearing, the trial court noted that there was no return of service of the summonses to New Cotton, Lan Shing Chin and Shin May Wan. The trial judge deferred consideration of the motion until said summonses were duly served. On June 22, 1990, Kho filed a manifestation and motion alerting the trial court that trial had not yet commenced one and a half years since the case was filed. Kho moved for scheduling of pre-trial conference and thereafter trial, without having to await for the return of the service of summonses. On June 28, 1990, the trial court denied private respondent Kho's motion and ordered the court's process server to immediately serve the summonses on the other three respondents. The summonses, however, remained unserved. On July 6, 1990, petitioner filed a motion for service of summons by publication against aforesaid respondents. One year and seven months had lapsed since the complaint was filed, and over one year since petitioner knew summonses could not be served personally or by substituted service. On August 14, 1990, the court granted petitioner's application for service of summons by publication. The summonses and a copy of the complaint were published in The Philippine Star. On November 20, 1990, Kho moved to dismiss the complaint for failure to prosecute. The same was denied by the court in an order dated March 21, 1991, which also set for April 16, 1991, the hearing for the reinstatement of the writ of preliminary attachment. On June 3, 1991, the trial court granted petitioner's application for preliminary attachment but only as against New Cotton Corp., Lan Shing Chin and Shin May Wan. It denied attachment as to Kho. Due to setting and re-setting of pre trial conference by petitioner and respondent, the pre-trial took one year and seven months.

FACTS: Producers Bank of the Philippines filed a complaint with prayer for preliminary attachment against New Cotton (Phil.) Corporation concerning a loan of three million pesos. The bank alleged that private respondent Lan Shing Chin, New Cotton's president, issued Promissory Note No. PC 015/88, for said amount. As agreed by the parties, the loan would mature in 55 days, or on May 16, 1988.It was renewed once, with maturity on July 15, 1988. Private respondents allegedly failed to pay the loans on their due dates. Hence the complaint was filed before the Regional Trial Court. The court issued an order granting the writ. It approved the attachment bond on February 6, 1989. Later, the court recalled its order dated February 6, 1989 approving the bond.

Even before trial began, on January of 1993, petitioner filed for urgent motion to reset scheduled hearings. It explained that its principal witness was still abroad on a business trip, and two other witnesses were unavailable. Kho did not object. The lower court granted the motion to re-set with stern warning that should petitioner fail to present its evidence, the court would consider petitioner’s right to present evidence waived.

On June 7, 1989, petitioner filed a motion for the issuance of summons, which the trial court granted. Only private respondent Wilson Kho was served summons through substituted service. The whereabouts of the other defendants were unknown. The corporation had already ceased operations. Lan Shing Chin and Shin Man Wan, the two other defendants who were not Filipinos, were reportedly already in Hongkong.

On March, the respondent’s counsel moved for postponement of trial explaining that he has prior court commitments. Note that the motion for postponement by the respondent was triggered by the re-scheduling of previous hearings on motion of petitioner. Petitioner did not object. Trial court re-set the presentation of petitioner’s evidence to July. Before July, petitioner’s counsel filed another motion for postponement on hearings because he had to leave for the province to arbitrate a peaceful settlement of a land dispute among members of his family.

Only Kho filed an answer and received by the trial court on July 21, 1989. Kho denied the genuineness and due execution of the surety (bond) agreement guaranteeing the six

Before the scheduled hearing on February 9, 1993 and despite the stern warning from the court, the peritioner filed its fourth motion for postponement because its witnesses can not attend the trial because of prior commitments. The respondent did not object and the trial court set the hearing on March.

Case Digests for Rules 10-19 | page 36

Civil Procedure | February 14, 2014 Respondent (FINALLY!) opposed any further postponements and undue delays. He prayed for dismissal of the case. RTC – finding no merit in the reasons for postponement and finding respondent’s opposition well taken, issued an order dismissing the complaint for failure of the petitioner to prosecute the case. CA – affirmed the RTC decision. ISSUES: 1. W/n the appellate court err in affirming the trial court's ruling that the complaint ought to be dismissed for failure to prosecute? NO 2. Should the dismissal be with or without prejudice? WITH PREJUDICE HELD: Undoubtedly, in the present case, five years have been an unreasonably long time for a defendant to wait for the outcome of a trial which has yet to commence and on which his family, fortune and future depend. In a number of previous cases, we have consistently warned that courts must ensure that litigations are prosecuted and resolved with dispatch. We also held that although the grant or denial of postponements rests entirely on the sound discretion of the judge, we cautioned that the exercise of that discretion must be reasonably and wisely exercised. Postponements should not be allowed except on meritorious grounds, in light of the attendant circumstances. Deferment of the proceedings may be allowed or tolerated especially where the deferment would cause no substantial prejudice to any party. "The desideratum of a speedy disposition of cases should not, if at all possible, result in the precipitate loss of a party's right to present evidence and either in the plaintiff's being non-suited or of the defendant's being pronounced liable under an exparte judgment." While a court can dismiss a case on the ground of non-prosequitur, the real test for the exercise of such power is whether, under the circumstances, plaintiff is chargeable with want of due diligence in failing to proceed with reasonable promptitude. Recall that here the complaint was filed on December 9, 1988. In two years and four months, the court issued a writ of attachment, upon application of petitioner, recalled the writ, then, only on April 27, 1990, when petitioner moved for reinstatement of the writ, did the court observe that there were no returns of the service of summonses to three other defendants. Without any manifestation from either parties, nor any application for service of summonses by publication, the trial court appropriately ruled to defer deliberations on the motion to reinstate the writ of attachment until the summonses were served. When Kho moved that pre-trial be set without having to await for the service of summonses upon the other respondents, the court again correctly ruled to deny the motion. It was only on July 6, 1990, that petitioner filed a motion for service of summons by publication. Although Section 1, Rule 14 of the Rules, imposes upon the clerk of court the duty to serve summons, this does not relieve the plaintiff of his own duty to prosecute the case diligently. If the clerk had been negligent, it was plaintiff's duty to call the court's attention to that fact. The non-performance of that duty by plaintiff is an express ground for dismissing an action. If there were no means of summoning any of the defendants, plaintiffs should have so informed the court and moved for their exclusion from the complaint, within a reasonable period of time, so that the case could be disposed of one way or another and the administration of justice would not suffer delay. Plaintiffs should have asked that the defendants be summoned by

publication at the earliest possible time. In this case, it was not petitioner who called the court's attention that summons had not been served on the other defendants, it was private respondent Kho who did. The bank was aware, as early as June 7, 1989, after the first order to serve summonses was issued, the summonses could not be served on the three other defendants. It was already aware then that the corporation was already dissolved and Lan Shing Chin and Shin May Wan were reportedly in Hongkong. It took more than one year, before the bank acted and applied for service of summons by publication. There was also inordinate delay during pre-trial, primarily caused by petitioner. In four instances, specifically on August 3, 1991, September 17, 1991, May 8, 1992, and July 13, 1992, pre-trial conferences were re-set either because petitioner bank's counsel for witnesses could not appear. Finally, when trial commenced, in fact even before it did, petitioner moved for postponements, in all, three times. Respondent Kho, while indeed asking for the longer postponement, was understandably constrained to ask for re-setting only because his calendar had been so disrupted by the constant earlier postponements upon motions of petitioner. In numerous instances, this court refused to disturb orders of dismissal for failure to prosecute. Some dismissals were ordered because of delays for a period of four years, or even less. Given the circumstances elucidated above, we hold that the appellate court did not err nor abuse its discretion when it upheld the trial court's dismissal of the complaint for failure to prosecute for five years. Lastly, petitioner takes issue against the Court of Appeals' holding that the dismissal for failure to prosecute should be without prejudice to filing the case anew. Section 3 of Rule 17 is clear that the dismissal of an action for failure to prosecute shall have the effect of adjudication on the merits, unless otherwise provided by the court. By way of exception to the rule that a dismissal on the ground of failure to prosecute under Section 3 of Rule 17 is a dismissal with prejudice, Delos Reyes v. Capule, 102 Phil 467 (1957), held that in a case not tried on the merits and whose dismissal was due to the negligence of counsel rather than the plaintiff, in the interest of justice, the dismissal of the case should be decreed to be without prejudice to the filing of a new action. However, unlike De los Reyes, the present case involves as plaintiff/petitioner a prominent bank, that employs a staff of lawyers and possesses significant resources. It cannot plead paucity of means, including legal talent it could retain. Petitioner's counsel inexplicably failed to secure the presence of witnesses when required, failed to appear during pre-trial and trial duly set, failed to seasonably appeal, failed to timely move for reconsideration, failed to brief his substitute lawyer; and failed to diligently pursue the service of summonses. These are acts of negligence, laxity and truancy which the bank management could have very easily avoided or timely remedied. One's sympathy with the bank and its counsel could not avail against apparent complacency, if not delinquency, in the conduct of a litigation. For failure to diligently pursue its complaint, it trifled with the right of respondent to speedy trial. It also sorely tried the patience of the court and wasted its precious time and attention. In the light of the foregoing circumstances, to declare the dismissal in this case without prejudice would open the floodgate to possible circumvention of Section 3, Rule 17 of the Rules of Court on dismissal with prejudice for failure to prosecute. It would frustrate the protection against unreasonable delay in the prosecution of cases and violate the constitutional mandate of speedy dispensation of justice which would in time erode the people's confidence in the judiciary. We find that, as held by the trial Case Digests for Rules 10-19 | page 37

Civil Procedure | February 14, 2014 court and concurred in by the appellate court, the dismissal of petitioner's complaint is with prejudice and should have the effect of adjudication on the merits. Gallardo-Corro vs. Gallardo G.R. No. 136228, January 30,2001, 350 SCRA 568 Pinga v. Heirs of Santiago, G.R. No. 170354, June 30, 2006 Doctrine: Under Section 3, Rule 17 of the 1997 Rules of Civil Procedure, the dismissal of the complaint due to the fault of plaintiff does not necessarily carry with it the dismissal of the counterclaim, compulsory or otherwise. In fact, the dismissal of the complaint is without prejudice to the right of defendants to prosecute the counterclaim. Facts: The Heirs of Santiago filed an injunction against Pinga alleging that Pinga had been unlawfully entering the coco lands of the respondent cutting wood and bamboos and harvesting the fruits of the coconut trees. As a counterclaim, Pinga contests the ownership of the lands to which Pinga was harvesting the fruits. However, due to failures of Heirs of Santiago to attend the hearings, the court ordered the dismissal of said case. Respondents thus filed an MR not to reinstate the case but to ask for the entire action to be dismissed and not to allow petitioner to present evidence ex parte. RTC: granted the MR, hence the counterclaim was dismissed. RTC ruled that compulsory counterclaims cannot be adjudicated independently of plaintiff·s cause of action vis a vis the dismissal of the complaint carries with it the dismissal of the counterclaim.

This does not, however, mean that there is likewise such absence of evidence to prove defendant's counterclaim although the same arises out of the subject matter of the complaint which was merely terminated for lack of proof. To hold otherwise would not only work injustice to defendant but would be reading a further provision into Section 3 and wresting a meaning therefrom although neither exists even by mere implication. Thus understood, the complaint can accordingly be dismissed, but relief can nevertheless be granted as a matter of course to defendant on his counterclaim as alleged and proved, with or without any reservation therefor on his part, unless from his conduct, express or implied, he has virtually consented to the concomitant dismissal of his counterclaim.The present rule embodied in Sections 2 and 3 of Rule 17 ordains a more equitable disposition of the counterclaims by ensuring that any judgment thereon is based on the merit of the counterclaim itself and not on the survival of the main complaint. Certainly, if the counterclaim is palpably without merit or suffers jurisdictional flaws which stand independent of the complaint, the trial court is not precluded from dismissing it under the amended rules, provided that the judgment or order dismissing the counterclaim is premised on those defects. At the same time, if the counterclaim is justified, the amended rules now unequivocally protect such counterclaim from peremptory dismissal by reason of the dismissal of the complaint. RULE 18 Pre-Trial 2004 Guidelines on Pre-Trial and Modes of Discovery Judicial Dispute Resolution Rule De Guia vs. De Guia G.R. No. 135384, April 4, 2001, 356 SCRA 287

CA: Affirmed

Facts:

Petitioner then elevates it to the SC by way of Rule 45 on pure questions of law. (Santiagos motive: They just asked for the dismissal of their entire case so that their ownership wouldn·t be put in controversy in the counterclaim)

Plaintiffs Mariano, Apolonia, Tomosa and Irene, all surnamed De Guia, filed with the trial court a complaint for partition against defendatnts Ciriaco, Leon, Victorina and Pablo De Guia, alleging that real properties were inherited by plaintiffs and defendants from their predecessors-in-interest, an that the latter unjustly refused to have the properties subdivided among them.

Issue: Whether or not dismissal of original complaint affects that of the compulsory counter claims? Held: NO PETITION GRANTED. The counterclaims, in this case, can stand on its own. Rule 17 Sec 3 provides: ´If for any cause, the plaintiff fails to appear on the date of his presentation of his evidence x x x the complaint may be dismissed upon motion of the defendant or upon the court’s own motion, without prejudice to the right of the defendant to prosecute his counterclaim in the same or in a separate action. The dismissal of the complaint does not carry with the dismissal of the counterclaim, compulsory or otherwise. In fact, the dismissal of the complaint is without prejudice to the right of defendants to prosecute his counterclaim. Section 3 contemplates a dismissal not procured by plaintiff, albeit justified by causes imputable to him and which, in the present case, was petitioner's failure to appear at the pre-trial. This situation is also covered by Section 3, as extended by judicial interpretation, and is ordered upon motion of defendant or motu proprio by the court. Here, the issue of whether defendant has a pending counterclaim, permissive or compulsory, is not of determinative significance. The dismissal of plaintiff's complaint is evidently a confirmation of the failure of evidence to prove his cause of action outlined therein, hence the dismissal is considered, as a matter of evidence, an adjudication on the merits.

The Branch Clerk of Court issued a Notice setting the case for pre-trial conference on June 18, 1992., 8:30am. Copies of siad notices were sent by registered mail to parties and their counsel. It turned out that both defendants and counsel failed to attend the pre-trial conference. It appears, however, that the notice was only received on June 18, 1992 and by their counsel on June 17, 1992. Defendants were declared in default and plaintiffs were allowed to present their evidence ex-parte. Judgement was rendered ordering the partition of the parcels of land, after the Motion for Reconsideration declaring the defendants in default was denied. Issue: WON service of notice for pre-trial to defendants was valid? Held: For the guidance of the bench and bar, therefore, the Court in reaffirming the rulin that notice of pre-trial must be served seperately upon the party and his counsel of record, restates that while service of such notice to party may be made directly to the party, it is Case Digests for Rules 10-19 | page 38

Civil Procedure | February 14, 2014 best that trial courts uniformly serve such notice to party through or care of his counsel at counsel's address with the express imposition upon counsel of the obligation of notfying the party of the date, time and place of the pre-trial conference and assuring that the party either appear thereat or deliver counsel a written authority to represent the party with power to compromise the case, with the warning that a party who fails to do may be non-suited or declared in default. Before, being declared non-suited or considered in default, parties and their counsel must be shown to have been served with notice of the pretrial conference. If served only on the counsel, the notice must expressly direct him or her to inform the client of the date, the time and the place of the pretrial conference. The absence of such notice renders the proceeding void, and the judgement rendered therein cannot acquire finality and may be attacked directly or collaterally. Notice did not contain any imposition or directive that counsel infrom client of the pretrial conference, merely stating that, “You are hereby notified that the above-entitled case will th be heard before this court on the 18 day of June. NOTE: What was applied was Section 1, Rule 20 of the pre-1997 Rules of Civil Procedure.

The pre-trial in this case is already closed and terminated. The MERCADERs filed a Supplemental Pleading insisting the consummation of the lease-purchase option with the payment of the earnest money. The DBP filed its Opposition to the Supplemental Pleading. Trial proceeded with the parties presenting evidence tending to establish their respective allegations. Thereafter, the trial court ordered the Manreals dropped from the case. The MERCADERs offered no objection. In its decision, the trial court reiterated the three issues ascertained in the pre-trial order and resolved all of them in favor of the MERCADERs. On the first issue, the trial court found that the "DBP had unnecessarily and unjustifiably made xxx [Bernardo] Mercader understand that his second option [lease-purchase] would be more or less approved, except that the approval will come from Manila." Anent the second issue, the trial court also believed "quite firmly" that the "DBP could not have escaped having a foreknowledge of the existence of the prior unrecorded lease" as the "possession and cultivation of Bernardo Mercader xxx [was] a matter of open, notorious and public knowledge in the area." In resolving the third issue, the court first acknowledged that it is a "court of equity and not merely a court of law" and the "DBP is not authorized to keep real propert[y] longer than ten years or so;" then the court "required [the] DBP to set aside the area affected by the prior unregistered lease, known to [it], when [it] accepted the mortgage."

Mercader vs. DBP G.R. No. 130699, May 12, 2000, 332 SCRA 82 In relation to our subject matter: The issue on lease-purchase option was not raised in the original pleading but was included in the pre-trial order and in the supplemental pleading, which was filed after the pre-trial. Can the new issue be decided by the RTC? See HELD. DOCTRINES: 1. a supplemental pleading was meant to supply deficiencies in aid of the original pleading, and not to dispense with the latter. 2.

Well-known is the rule that departure from procedure may be forgiven where they do not appear to have impaired the substantial rights of the parties.

3.

Pre-trial; The pre-trial is primarily intended to make certain that all issues necessary to the disposition of a case are properly raised.

FACTS: Spouses Mercader entered a lease contract with Manreals. Said lot was mortgaged to DBP. DBP wanted to foreclose said property. Thus, Mercaders prayed that DBP to "respect their interests by excluding these from the foreclosure proceedings, or if the foreclosure takes place, declare the same null and void.

CA: On appeal, the Court of Appeals found that the trial court erred in treating the leasepurchase option as a controversial issue considering that it was "outside the parties' pleadings." But invoking the Supreme Court's decision in Castro v. Court of Appeals, the Court of Appeals, as already earlier adverted to, reversed and set aside the appealed judgment. It entered a new one declaring that the MERCADERs were not entitled to any compensation from the DBP. In this petition for review, the MERCADERs assert that in issuing the challenged decision, the Court of Appeals contravened Section 4, Rule 20 and Section 5, Rule 10 of the Rules of Court by holding that the trial court should not have taken cognizance of the leasepurchase option as a controversial issue since it was not raised in the pleadings. They maintain that the trial court correctly took cognizance of the lease-purchase option because it was part and parcel of the pre-trial stages, the determination of which will prevent future litigation thereon. They also pray that in the event of a favorable judgment, this Court should refer the case back to the Court of Appeals for a determination of whether the trial court erred in finding that the lease-purchase option was already consummated. For its part, the DBP contends that the MERCADERs raise questions of facts which are not reviewable on appeal and that it had opposed and objected to in and at all stages of the trial, all attempts by the MERCADERs to introduce evidence on the lease-purchase option. ISSUE: Whether the lease-purchase option was properly raised in the pleadings

Trial court: Pre-trial took place. In the pre-trial order, the parties agreed that the only issue[s] to be resolved in this case are as follows: 1. Whether the plaintiff [are] entitled to specific performance of said agreement; 2. Whether the defendant bank can be compelled to recognize the lease contract entered into between the spouses plaintiff Bernardo Mercader and Gelacio Manreal; and 3. Whether the foreclosure proceedings of the contract between the defendant bank is null and void.

HELD: YES. This Court agrees with the MERCADERs and finds that the Court of Appeals erred in disregarding as material the lease-purchase option on the ground that it was not raised in the pleadings. If the Court of Appeals adverts to the lack of reference to the lease-purchase option in the initiatory pleadings, this can be simply explained by the fact that the trial court only took cognizance thereof when it became an integral component of the pre-trial proceedings. That is why the lease-purchase option was included firstly, in the pre-trial order as one of the issues to be resolved at trial and secondly, in the supplemental Case Digests for Rules 10-19 | page 39

Civil Procedure | February 14, 2014 pleading subsequently filed by the MERCADERs on 7 November 1985. As a supplemental pleading, it served to aver supervening facts which were then not ripe for judicial relief when the original pleading was filed. As such, it was meant to supply deficiencies in aid of the original pleading, and not to dispense with the latter. Hence, it was patently erroneous for the Court of Appeals to pronounce that the lease-purchase option was not raised in the pleadings. The DBP was even quite aware and knowledgeable of the supplemental pleading because it filed an opposition thereto. The records however reveal that the trial court did not promptly rule on the motion to admit the supplemental pleading. And during trial, the trial court also failed to rule on the prompt objection interposed by the DBP’s counsel to the MERCADERs’ introduction of evidence relative to said lease-purchase option. But undisputed is the trial court's eventual admission in open court of the MERCADERs’ supplemental pleading. The records also show that not only did the DBP’s counsel began to rigorously crossexamine Bernardo Mercader on the lease-purchase option, he also subjected his witness Mr. Ruben Carpio, then Chief of the Collection Department, DBP to an intensive direct examination covering said subject matter. He also offered as evidence the DBP’s letter indicating the three options to the MERCADERs as Exhibit "1" and the lease-purchase option contained therein as Exhibit "1-A." The DBP is undoubtedly estopped from questioning the trial court’s inclusion of the leasepurchase option as a controversial issue. This action of the trial court finds anchor on Section 4, Rule 20 of the Rules of Court which reads: Section 4. Record of pre-trial results. -- After the pre-trial the court shall make an order which recites the action taken at the conference, the amendments allowed to the pleadings, and the agreements made by the parties as to any of the matters considered. Such order shall limit the issues for trial to those not disposed of by admissions or agreements of counsel and when entered controls the subsequent course of the action, unless modified before trial to prevent manifest injustice. Indeed, the pre-trial is primarily intended to make certain that all issues necessary to the disposition of a case are properly raised. The purpose is to obviate the element of surprise, hence, the parties are expected to disclose at the pre-trial conference all issues of law and fact which they intend to raise at the trial, except such as may involve privileged or impeaching matter. In the case at bar, the pre-trial order included as integral to the complete adjudication of the case the issue of whether the MERCADERs can demand specific performance from the DBP relative to the lease-purchase option. Thus, the element of surprise that the provision on pre-trial attempts to preclude was satisfied. The surprise factor was further eliminated, as already earlier mentioned and merely to reiterate here, with the DBP's (1) motion to oppose the supplemental pleading, (2) objection to the introduction of evidence connected thereto, (3) later information from the trial court of its definitive ruling admitting the supplemental pleading, (4) own introduction of evidence related thereto, and finally, by its (5) intensive participation in the direct and crossexamination of witnesses whose testimonies included said topic. In any case, the filing and consequent admission of the supplemental pleading by the trial court validated the issues embraced in the pre-trial order. SC Ruling: petition is GRANTED DUE COURSE. Judgment and resolution of CA are SET ASIDE. The case is REFERRED BACK to CA. Alcaraz v. Court of Appeals, G.R. No. 152202, G.R. No. 152202, July 28, 2006

DOCTRINE: A charge of arbitrariness and bias against the trial court, in this case against the judge as well as all the court personnel, is a serious charge that must be substantiated. Bare allegations of partiality will not suffice. It must be shown that the trial court committed acts or engaged in conduct clearly indicative of bias or pre-judgment against a party. FACTS: Case of collection of sum of money filed by Equitable Credit Card Network against Crisostomo Alcaraz Equitable is sue a credit card to Alcaraz. Alcaraz however accumulated unpain credit despite demand for payment. (Equivalent to 192,000 pesos for the peso account and 8,970 dollars for the dollar account). Alcaraz admitted using the credit card, but contested the amount because he was given the credit card voluntarily and he did not sign the “Terms and Conditions” regarding the interest (he was contesting the interest amounts). Thus, he claims that the case is premature. When a case was filed, Alcaraz was declared in default and Equitable presented evidence ex parte. (NOTE: Alcaraz was in default because he and his legal counsel were both sick). TC: Rules in favor of Equitable. Alcaraz’s motion for new trial was denied. Alcaraz appealed. CA: Affirmed TC decision, only changed the amount Alcaraz was to pay (lessened interest total to 12%). ISSUES: W/N the TC violated Alcaraz right to due process of law when Equitable was allowed to present evidence ex parte? NO W/N the monetary award ordered by the CA is in accordance w evidence, law and jurisprudence? YES. HELD: NO, petition is without merit. Due process issue: The trial court clearly has the discretion on whether to grant or deny a motion to postpone and/or reschedule the pretrial conference in accordance with the circumstances then obtaining in the case. This must be so as it is the trial court which was able to witness firsthand the events as they unfolded in the trial of a case. Postponements, while permissible, must not be countenanced except for clearly meritorious grounds and in light of the attendant circumstances. The trial court's discretion on this matter, however, is not unbridled. The trial courts are well advised to reasonably and wisely exercise such discretion. This Court will not hesitate to strike down clearly arbitrary acts or orders of the lower court. This, however, is not the situation in this case. While it is true that private respondent Equitable and inclement weather have on occasion caused the postponement of the pretrial conference, the repeated resetting of the pretrial conference was primarily due to the petitioner. In the case at bar, both petitioner Alcaraz and his counsel did not appear at the scheduled pretrial. Instead, it was the petitioner's wife alone who made the verbal manifestation on behalf of her husband and his counsel while presenting an unverified medical certificate on the latter's behalf. As correctly observed by the Court of Appeals, the records are bereft of any medical certificate, verified or unverified, in the name of petitioner Alcaraz to establish the cause of his absence at the pretrial conference. Even assuming arguendo that petitioner Alcaraz and Atty. Ibuyan's absence on the February 23, 1999 pretrial conference is due to justifiable causes, the petitioner is represented by a law firm and not by Atty. Ibuyan alone. As such, any of the latter's partners or associates could have appeared before the court and participate in the pretrial or at least make the proper motion for Case Digests for Rules 10-19 | page 40

Civil Procedure | February 14, 2014 postponement if necessary. A charge of arbitrariness and bias against the trial court, in this case against the judge as well as all the court personnel, is a serious charge that must be substantiated. Bare allegations of partiality will not suffice. It must be shown that the trial court committed acts or engaged in conduct clearly indicative of bias or pre-judgment against a party. The petitioner failed to do so in this case. The disallowance of a motion for postponement is not sufficient to show arbitrariness and partiality of the trial court. Monetary award issue: The petitioner never disputed his use of the credit card issued to him by the private respondent. While he maintains that there is a "great disparity" between the amount of credit he availed of and what was actually being collected from him by the private respondent, nowhere in the records of this case, however, did petitioner Alcaraz contest any specific purchase or cash advance charged to the credit card, whether the peso or the dollar account. The evidence sustains the claim of private respondent Equitable that petitioner Alcaraz is what is known as a pre-screened client. When a client is classified as pre-screened, the usual screening procedures of prospective cardholders, such as the filing of an application form and submission of other relevant documents prior to the issuance of a credit card, are dispensed with and the credit card is issued outright. Upon receipt of the card, the prescreened client has the option of accepting or rejecting the credit card. In the case at bar, petitioner Alcaraz signified his acceptance of the credit card by signing and subsequently using the same. This, however, without more, does not confer "honorary membership" status to the petitioner. BUT, the petitioner should not be condemned to pay the interests and charges provided in the Terms and Conditions on the mere claim of the private respondent without any proof of the former's conformity and acceptance of the stipulations contained therein. Even if we are to accept the private respondent's averment that the stipulation quoted earlier is printed at the back of each and every credit card issued by private respondent Equitable, such stipulation is not sufficient to bind the petitioner to the Terms and Conditions without a clear showing that the petitioner was aware of and consented to the provisions of this document. This, the private respondent failed to do. THUS, Alcaraz is liable to pay only the credit he utilized and not the stipulated monthly interest. However, since an extra-judicial demand was made, the 12% imposed by the CA is proper.

(DAR) placed the entire 144-hectare property under compulsory acquisition and assessed the land value at P2.38 million. - NQSRMDC resisted the DAR’s action. It sought and was granted a writ of prohibition with preliminary injunction. - Despite the order, the DAR Regional Director issued a memorandum directing the Land Bank to open a trust account for P2.38 million in the name of NQSRMDC and to conduct summary proceedings to determine the just compensation of the subject property. NQSRMDC filed an Omnibus Motion to enforce the order and to nullify the summary proceedings. The motion was granted. - Meanwhile, the municipality issued an Ordinance converting or re-classifying the land from agricultural to industrial/institutional. An application for approval of conversion was duly submitted. The DAR, however, denied such application. Thus, it ordered the DAR Regional Director “to proceed with the compulsory acquisition and distribution of the property.” - Governor Fortich appealed the order of denial to the Office of the President and prayed for the conversion/reclassification of the subject land as the same would be more beneficial to the people of Bukidnon. - To prevent the enforcement of the DAR Secretary’s order, NQSRMDC, on June 29, 1995, filed with the Court of Appeals a petition for certiorari, prohibition with preliminary injunction. - The Office of the President issued a Decision in reversing the DAR Secretary’s decision. It approved the application for conversion of the land. It also granted NQSRMDC’s petition. DAR appealed for reconsideration. - In compliance with the OP decision, NQSRMDC donated 4 hectares from the subject land to DECS for the establishment of the high school. When NQSRMDC was about to transfer the title, it discovered that the title over the subject property was no longer in its name. It found out that during the pendency of both the Petition for Certiorari, Prohibition, with Preliminary Injunction it filed against DAR in the Court of Appeals and the appeal to the President filed by Governor Carlos O. Fortich, the DAR, without giving just compensation, caused the cancellation of NQSRMDC’s title and had it transferred in the name of the Republic of the Philippines. Thereafter, DAR caused the issuance of Certificates of Land Ownership Award (CLOA) and had it registered in the name of 137 farmer-beneficiaries.

SC: Petition dismissed.

Hon. Carlos O. Fortich, et. al vs. Hon. Renato C. Corona, et al., G.R. No. 131457, August 19, 1999, 312 SCRA 751

- NQSRMDC filed a complaint with the RTC of Malaybalay, Bukidnon for annulment and cancellation of title, damages and injunction against DAR and 141 others. The RTC then issued a Temporary Restraining Order and a Writ of Preliminary Injunction restraining the DAR and 141 others from entering, occupying and/or wresting from NQSRMDC the possession of the subject land.

FACTS - The case involves a 144-hectare land located at San Vicente, Sumilao, Bukidnon, owned by the Norberto Quisumbing, Sr. Management and Development Corporation (NQSRMDC), one of the petitioners.

- Meanwhile, an Order was issued by then Executive Secretary Torres denying DAR’s motion for reconsideration for having been filed beyond the reglementary period of fifteen (15) days. The OP decision had already become final and executory. The DAR filed a second motion for reconsideration.

- In 1984, the land was leased as a pineapple plantation to Del Monte for a period of ten (10) years. The lease expired in April 1994.

- The said writ of preliminary injunction issued by the RTC was challenged by some alleged farmers before the Court of Appeals.

- In October, 1991, during the existence of the lease, the Department of Agrarian Reform

- Some alleged farmer-beneficiaries began their hunger strike in front of the DAR

RULE 19 Intervention

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Civil Procedure | February 14, 2014 Compound in Quezon City to protest the OP Decision. Some persons claiming to be farmer-beneficiaries of the NQSRMDC property filed a motion for intervention (styled as Memorandum In Intervention) asking that the OP Decision allowing the conversion of the entire 144-hectare property be set aside. Office of the President - The Office of the President resolved the strikers’ protest by issuing the so-called “Win/Win” Resolution penned by then Deputy Executive Secretary Corona. It modified the previous OP Decision to the effect that only 44 hectares of the land should be converted, and that the remaining 100 hectares be distributed to qualified farmer-beneficiaries. No CA, Elevated to the SC - Governor Fortich with Mayor Baula of Sumilao, Bukidnon and NQSRMDC filed the present petition for certiorari, prohibition (under Rule 65 of the Revised Rules of Court) and injunction with urgent prayer for a temporary restraining order and/or writ of preliminary injunction (under Rule 58, ibid.), against then Deputy Executive Secretary Renato C. Corona and DAR Secretary Ernesto D. Garilao. - A Motion For Leave To Intervene was filed by alleged farmer-beneficiaries, through counsel, claiming that they are real parties in interest as they were “previously identified by respondent DAR as agrarian reform beneficiaries on the 144-hectare” property subject of this case. ISSUE WON Motion to Intervene filed by alleged famer-beneficiaries was meritorious. HELD No In their motion, movants contend that they are the farmer-beneficiaries of the land in question, hence, are real parties in interest. To prove this, they attached in their motion a Master List of Farmer-Beneficiaries. Apparently, the alleged master list was made pursuant to the directive in the dispositive portion of the assailed “Win-Win” Resolution which directs the DAR “to carefully and meticulously determine who among the claimants are qualified farmer-beneficiaries.” However, a perusal of the said document reveals that movants are those purportedly “Found Qualified and Recommended for Approval.” In other words, movants are merely recommendee farmer-beneficiaries. The rule in this jurisdiction is that a real party in interest is a party who would be benefited or injured by the judgment or is the party entitled to the avails of the suit. Real interest means a present substantial interest, as distinguished from a mere expectancy or a future, contingent, subordinate or consequential interest. Undoubtedly, movants’ interest over the land in question is a mere expectancy. Ergo, they are not real parties in interest. Furthermore, the challenged resolution upon which movants based their motion is, as intimated earlier, null and void. Hence, their motion for intervention has no leg to stand on. OTHER CIVPRO ISSUES: 1. Was the proper remedy a Petition for Review with the CA in accordance with Rule 43? No. Under Rule 43, appeals from awards, judgments, final orders or resolutions of any quasijudicial agency exercising quasi-judicial functions, including the Office of the President, may be taken to the Court of Appeals by filing a verified petition for review within fifteen (15) days from notice of the said judgment, final order or resolution, whether the appeal involves

questions of fact, of law, or mixed questions of fact and law. In this case, Rule 43 is inapplicable considering that the present petition contains an allegation that the challenged resolution is “patently illegal” and was issued with “grave abuse of discretion” and “beyond his (Corona’s) jurisdiction” when said resolution substantially modified the earlier OP Decision of March 29, 1996 which had long become final and executory. The issue raised here involves an error of jurisdiction, not an error of judgment which is reviewable by an appeal under Rule 43. Thus, the appropriate remedy to annul and set aside the assailed resolution is an original special civil action for certiorari under Rule 65, as what the petitioners have correctly done. 2. Did the petitioners failed to file a motion for reconsideration of the “Win-Win” Resolution before filing the present petition? No. Said motion is not necessary when the questioned resolution is a patent nullity. 3. Is NQSRMDC guilty of forum shopping? No. Forum shopping exists where the elements of litis pendentia are present or where a final judgment in one case will amount to res judicata in the other. Said cases filed do not show that they are similar to each other. 4. Can the previous final and executory OP decision still be modified? No. “SEC. 7. Decisions/resolutions/orders of the Office of the President shall, except as otherwise provided for by special laws, become final after the lapse of fifteen (15) days from receipt of a copy thereof by the parties, unless a motion for reconsideration thereof is filed within such period. “Only one motion for reconsideration by any one party shall be allowed and entertained, save in exceptionally meritorious cases.” It is further provided for in Section 9 that “The Rules of Court shall apply in a suppletory character whenever practicable.” Therefore, the assailed “Win-Win” Resolution which substantially modified the Decision of March 29, 1996 after it has attained finality, is utterly void. Looyuko v. Court of Appeals G.R. No. 102696, July 12, 2001, 361 SCRA 150 Doctrines: ● Intervention can no longer be allowed in a case already terminated by final judgment ● In exceptional cases, such as when intervenors were indispensable parties, the Court has allowed intervention notwithstanding the rendition of judgment by the trial court. ● Intervention. – A person may, before or during a trial be permitted by the court, in its discretion, to intervene in an action, if he has legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or when he is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or of an officer thereof (Note: There are 4 consolidated petitions in this case) Nature: Disputed in these consolidated cases is a house and lot located in Mandaluyong, Case Digests for Rules 10-19 | page 42

Civil Procedure | February 14, 2014 previously owned by the Spouses Tomas and Linda Mendoza. Bitterly contesting the property are the spouses’ various creditors as well as the creditors’ alleged assignee. One set of creditors includes Albert Looyuko and Jose Uy. Their lawyer, Atty. Victoria Cuyos, has also annotated her attorney’s lien over the property. Antonia Gutang and her children David and Elizabeth, who have substituted their father, comprise another set. Both sets of creditors rest their claim upon separate levies on execution and their supposed purchase of the property at public auction. Schubert Tanuliong, who purports to be Looyuko et al.’s and the Gutangs’ assignee also files a claim. Facts: On December 2, 1976, spouses Tomas and Linda Mendoza executed a mortgage over the subject property in favor of FGU Insurance Corporation (creditor). The mortgage was registered with the Register of Deeds of Pasig. RTC: As the spouses failed to satisfy the obligation secured by the mortgage, FGU filed an action with the RTC of Manila against said spouses. The latter filed an Answer but failed to appear during the pre-trial. Consequently, the Spouses Mendoza were declared as in default and evidence were received ex-parte. No appeal was taken from the RTC order and the same subsequently became final and executory. RTC issued a writ of execution. The deputy sheriff in a public bidding sold the parcel of land to FGU, the highest bidder. Before the new TCT could be issued, however, the Spouses Gutang filed a motion for intervention and to set aside the judgment of the RTC, alleging that they are the new registered owners of the property. In an Order the RTC allowed the motion for intervention, holding that the failure of FGU to implead the Spouses in the action for foreclosure deprived the latter of due process. The RTC thus set aside its Decision and all orders issued subsequent and related thereto. Thereafter, Looyuko et al., and Tanunliong filed their respective motions for intervention, which the RTC granted as well. CA: FGU filed a petition for certiorari, prohibition and mandamus in the Court of Appeals, arguing that the trial court committed grave abuse of discretion in granting the motions for intervention since the RTC decision, as amended, was already final and executory. CA upheld decision of RTC. Issue: Were the motions for intervention filed proper considering that the case was already final and executory? Held: No. However, in exceptional cases such as when intervenors were indispensable parties, the Court has allowed intervention notwithstanding the rendition of judgment by the trial court. Section 2, Rule 12 of the Rules of Court, the law prevailing at the time, read as follows: Intervention. – A person may, before or during a trial be permitted by the court, in its discretion, to intervene in an action, if he has legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or when he is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or of an officer thereof. [Italics supplied.] In the present case, the motions for intervention were filed after judgment had already been rendered, indeed when the case was already final and executory. Certainly, intervention

can no longer be allowed in a case already terminated by final judgment. Intervention is merely collateral or accessory or ancillary to the principal action, and not an independent proceeding; it is an interlocutory proceeding dependent on or subsidiary to the case between the original parties. Where the main action ceases to exist, there is no pending proceeding wherein the intervention may be based. Here, there is no more pending principal action wherein the Spouses Gutang and Looyuko et al. may intervene. In exceptional cases, the Court has allowed intervention notwithstanding the rendition of judgment by the trial court. In Director of Lands vs. Court of Appeals, intervention was allowed even when the petition for review of the assailed judgment was already submitted for decision in the Supreme Court. Recently in Mago vs. Court of Appeals, the Court granted intervention despite the case having become final and executory. It must be noted, however, that in both these cases, the intervenors were indispensable parties. This is not so in the case at bar. The Register of Deeds is ordered to issue a new TCT in the name of FGU Insurance Corporation. International Pipes, Inc. and ITALIT Construction and Development Corporation v. F.F. Cruz & Co., Inc. G.R. No. 127543, August 16, 2001, 363 SCRA 329 Asian Terminals v. Ricafort, G.R. No. 166901, October 27, 2006 Doctrines: o A court which has no jurisdiction over the principal action has no jurisdiction over a complaint-in-intervention. o Intervention presupposes the pendency of a suit in a court of competent jurisdiction. o Jurisdiction of intervention is governed by jurisdiction of the main action Facts: o Respondents were duly-licensed importers of vehicles. Sometime in April and May 1998,they imported 72 second hand right-hand drive buses from Japan. When the shipment arrived at the South Harbor, Port of Manila, the District Collector of Customs impounded the vehicles and ordered them stored at the warehouse of the Asian Terminals, Inc. (ATI),a customs-bonded warehouse under the custody of the Aviation and Cargo Regional Division. o Conformably with Section 2607 of the Tariff and Customs Code, the District Collector of Customs issued Warrants of Distraint 3 against the shipment and set the sale at public auction on September 10, 1998. o The vehicles were seized by virtue of Section 1, Republic Act (RA) No. 8506, which took effect on February 22, 1998, which provides that "it shall be unlawful for any person to import, cause the importation of, register, cause the registration of, use or operate any vehicle with its steering wheel right hand side thereof in any highway, street or road, whether private or public, or at the national or local x x x." o On November 11, 1998, the importers filed a complaint with the RTC of Parañaque City,against the Secretary of Finance, Customs Commissioner, and the Chief Executive of the Societe Generale de Surillee, for replevin with prayer for the issuance of a writ of preliminary and mandatory injunction and damages. o They contend that the importation of right-hand drive vehicles is not prohibited under RA No. 8506 provided that conversion kits are included in the imported vehicles. o RTC granted writ of replevin. o Petitioner ATI filed a third party claim against respondent importers for unpaid Case Digests for Rules 10-19 | page 43

Civil Procedure | February 14, 2014 o o o

warehouse dues. Trial court dismissed the complaint along with the Third Party Claim/Motion for Intervention as the latter is only it being only an accessory to the principal case. ATI moved to reconsider and was denied. ATI then appealed to the CA which ruled that the RTC had no jurisdiction over the complaint filed by respondents. o Under the Customs and Tariff Code, the Collector of Customs sitting in seizure and forfeiture proceedings had the exclusive jurisdiction to hear and determine all questions relating on the seizure and forfeiture of dutiable goods. o Since it was bereft of jurisdiction in the principal case, it also had no jurisdiction over the third party claim/complaint in intervention as such is only ancillary and supplemental. Instant Case

o

o

o

Issue: W/N the RTC has jurisdiction over the instant case W/N the replevin it issued was valid. RULING:The Trial Court has no jurisdiction. Replevin is VOID o Section 602 of the Tariffs and Customs Code provides that the Bureau of Customs shall exercise exclusive jurisdiction over seized and forfeited cars. o Under Section 2301 of the TCC, the Collector of Customs is empowered to make a seizure of cargoes and issue a receipt for the detention thereof: SEC. 2301. Warrant for Detention of Property-Cash Bond. – Upon making any seizure,the Collector shall issue a warrant for the detention of the property; and if the owner or importer desires to secure the release of the property for legitimate use, the Collector shall, with the approval of the Commissioner of Customs, surrender it upon the filing of a cash bond, in an amount to be fixed by him, conditioned upon the payment of the appraised value of the article and/or any fine, expenses and costs which may be adjudged in the case: X X X o As the Court ruled in Jao v. Court of Appeals, Regional Trial Courts are devoid of any competence to pass upon the validity or regularity of seizure and forfeiture proceedings conducted by the Bureau of Customs and to enjoin or otherwise interfere with these proceedings. o It is the Collector of Customs, sitting in seizure and forfeiture proceedings, who has exclusive jurisdiction to hear and determine all questions touching on the seizure and forfeiture of dutiable goods. o Thus, the RTC had no jurisdiction to take cognizance of the petition for replevin by respondents herein, issue the writ of replevin and order its enforcement. The Collector of Customs had already seized the vehicles and set the sale thereof at public auction. The RTC should have dismissed the petition for replevin at the outset. By granting the plea of respondents (plaintiffs below) for the seizure of the vehicles and the transfer of custody to the court, the RTC acted without jurisdiction over the action and the vehicles subject matter thereof. o It bears stressing that the forfeiture of seized goods in the Bureau of Customs is a proceeding against the goods and not against the owner. It is in the nature of a proceeding in rem, i.e., directed against the res or imported articles and entails a determination of the legality of their importation. In this proceeding, it is, in legal contemplation, the property itself which commits the violation and is treated as the offender, without reference whatsoever to the character or conduct of the owner. o In fine, the initial orders of the RTC granting the issuance of the writ of replevin and its implementation are void

o

While it is true that the District Collector of Customs allowed the release of the vehicles and the transfer thereof to the custody of the RTC upon the payment by the private respondents of the required taxes, duties and charges, he did not thereby lose jurisdiction over the vehicles; neither did it vest jurisdiction on the RTC to take cognizance of and assume jurisdiction over the petition for replevin. As very well explained by the Office of the Solicitor General, the District Collector of Customs agreed to transfer the vehicles to the custody of the RTC since the latter had ordered the arrest of those who would obstruct the implementation of the writ. The District Collector of Customs had yet to resolve whether to order the vehicles forfeited in favor of the government, in light of the opinion of the Secretary of Justice that, under RA No. 8506,the importation was illegal. The RTC cannot be faulted for dismissing petitioner’s complaint-inintervention.Considering that it had no jurisdiction over respondents’ action and over the shipment subject of the complaint, all proceedings before it would be void. The RTC had no jurisdiction to take cognizance of the complaint-in-intervention and act thereon except to dismiss the same. Moreover, considering that intervention is merely ancillary and supplemental to the existing litigation and never an independent action, the dismissal of the principal action necessarily results in the dismissal of the complaint-in-intervention. Likewise, a court which has no jurisdiction over the principal action has no jurisdiction over a complaint-in-intervention. Intervention presupposes the pendency of a suit in a court of competent jurisdiction. Jurisdiction of intervention is governed by jurisdiction of the main action

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