Study Notes

BASIC PRINCIPLES Difference between substantive and remedial law SUBSTANTIVE LAW It creates, defines and regulates rights and duties concerning life, liberty or property, which when violated gives rise to a cause of action.

REMEDIAL LAW It prescribes the methods of enforcing those rights and obligations created by substantive law by providing a procedural system for obtaining redress for the invasion of rights and violations of duties and by prescribing rules as to how suits are filed, tried and decided upon by the courts.

Civil actions, criminal actions, and special proceedings (1) Civil actions— It is one by which a party sues another for the protection of a right or the prevention or redress of a wrong. Its primary purpose is compensatory. Civil actions may be: (a) Ordinary, or (b) Special. Both are governed by rules for ordinary civil actions, subject to specific rules prescribed for special civil actions. (2) Criminal actions— It is one by which the State prosecutes a person for an act or omission punishable by law. Its primary purpose is punishment. (3) Special proceedings— It is a remedy by which a party seeks to establish a status, a right or a particular fact.

GENERAL PROVISIONS (Rule 1) Rule-making power of the Supreme Court The Supreme Court has the constitutional power to promulgate rules concerning: (1) Pleading, (2) Practice, and (3) Procedure. Three (3) limitations on the SC’s rule-making power: (1) The rules shall provide a simplified and inexpensive procedure for the speedy disposition of cases; (2) shall be uniform for courts of the same grade; and (3) shall not diminish, increase, or modify substantive rights. Article 6, Sec. 30, Constitution— No law shall be passed increasing the appellate jurisdiction of the Supreme Court as provided in this Constitution without its advice and concurrence. Procedural and substantive rules Substantive law creates, defines, regulates, and extinguishes rights and obligations, while remedial or procedural law provides the procedure for the enforcement of rights and obligations. Force and effect of Rules of Court The Rules of Court have the force and effect of law, unless they happen to be inconsistent with positive law. Power of Supreme Court to suspend the Rules of Court Whenever demanded by justice, the Supreme Court has the inherent power to (a) suspend its own rules or (b) exempt a particular case from the operation of said rules. May parties change the rules of procedure? General rule: They may not. This is because these are matters of public interest. Exceptions: Matters of procedure which may be  Agreed upon by the parties— Venue may be changed by written agreement of the parties (Rule 4, Sec. 4[b]) SJS ‘13 – Comprehensive Reviewer

Page 1

 

Waived— Venue may be waived if not objected to in a motion to dismiss or in the answer. (Rule 16, Sec. 6); judgment in default may be waived by failure to answer within 15 days. Fall within the discretion of the court— The period to plead may be extended on motion of a party. (Rule 11, Sec. 11); rules of procedure may be relaxed in the interest of justice.

JURISDICTION It is the power and authority of a court to hear, try and decided a case. Power of the court to hear an action or proceedings, and to render a judgment thereon which will bind the parties to such action/proceeding. [Regalado] the capacity of power conferred by the Constitution or law to a court or tribunal to entertain, hear, and determine certain controversies, and render judgment thereon [De Leon] o determined by the allegations in the complaint and the character of the relief sought, not the defenses raised by the defendant • Judicial power includes the duty of the courts of justice: [Art 8, Sec. 1, Consti] 1. To settle actual controversies involving rights which are legally demandable and enforceable; 2. To determine WON there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any government branch/instrumentality. 1. Generally  The statute in force at the time of the commencement of the action determines the jurisdiction of the court.  Before looking into other matters, it is the duty of the court to consider the question of jurisdiction without waiting for it to be raised. • If court has jurisdiction, such must be exercised. Otherwise, it may be enforced by a mandamus proceeding. • If court has no jurisdiction, the court shall dismiss the claim and can do so motu proprio. 





Doctrine of primary jurisdiction— The courts will not resolve a controversy involving a question which is within the jurisdiction of an administrative tribunal. Doctrine of continuing jurisdiction— Once jurisdiction has attached to a court, it retains that jurisdiction until it finally disposes of the case. Hence, it is not lost by • The passage of new laws transferring the jurisdiction to another tribunal except when expressly provided by the statute; • Subsequent filing of a notice of appeal; • The mere fact that a party who is a public official ceased to be in office; or • Finality of judgment (the court still has jurisdiction to enforce and execute it) The filing of the complaint or appropriate initiatory pleading and the payment of the prescribed docket fee vest a trial court with jurisdiction over the subject matter or the nature of the action. • Exception: The court may allow payment of the fee within a reasonable time, but in no case beyond the applicable prescriptive period. [IBP v. Legasto (2006)]

CLASSIFICATIONS OF JURISDICTION .1

.2

.3

GENERAL OR LIMITED/SPECIAL .a

General jurisdiction – power to adjudicate all controversies except those expressly withheld from the plenary powers of the court

.b

Limited/special jurisdiction – restricts the courts jurisdiction only to particular cases and subject to such limitations as may be provided by the governing law

ORIGINAL OR APPELLATE .a

Original jurisdiction – power of the court to take judicial cognizance of a case instituted for judicial action for the first time under conditions provided by law

.b

appellate jurisdiction – authority of a court higher in rank to re-examine the final order or judgment of a lower court which tried the case now elevated for judicial review

EXCLUSIVE OR CONCURRENT .a

exclusive jurisdiction – power to adjudicate a case or proceeding to the exclusion of all other courts at that stage

.b

concurrent/coordinate jurisdiction – power conferred upon different courts, whether of the same or different ranks, to take cognizance at the same stage of the same case in the same or different judicial territories

ELEMENTS OF A VALID EXERCISE OF JURISDICTION (1) Jurisdiction over the subject matter or nature of the case; (2) the parties; (3) the res if jurisdiction over the defendant cannot be acquired; (4) the issue of the case; and (5) Payment of docket fees. Note: -

Jurisdiction over the subject matter is a matter of substantive law. Jurisdiction over the parties, the res and the issues are matters of procedure.

SJS ‘13 – Comprehensive Reviewer

Page 2

-

Jurisdiction over the parties and the res are covered by the rule on summons, while jurisdiction over the issues is subsumed under the rule on pleadings.

(a) As to subject matter Jurisdiction over the subject matter is conferred by the Constitution or by law. Therefore, jurisdiction over the subject matter cannot be conferred by (1) Administrative policy of any court; (2) Court’s unilateral assumption of jurisdiction; (3) Erroneous belief by the court that it has jurisdiction; (4) By contract or by the parties; (5) By agreement, or by any act or omission of the parties, nor by acquiescence of the court; or (6) By the parties’ silence, acquiescence or consent 

General Rule: It is determined by the material allegations of the initiatory pleading (e.g., the complaint), not the answer of the defendant. Once acquired, jurisdiction is not lost because of the defendant’s contrary allegation. Exception: In ejectment cases, where tenancy is averred by way of defense and is proved to be the real issue, the case should be dismissed for not being properly filed with the DARAB.



It is determined by the cause of action alleged, not by the amount substantiated and awarded. Example: If a complaint alleges a recoverable amount of P1M, RTC has jurisdiction even if evidence proves the only P300k may be recovered.

Note: Jurisdiction over the subject matter CANNOT be waived, enlarged or diminished by stipulation of the parties. (b) As to res or property Jurisdiction over the res refers to the court’s jurisdiction over the thing or the property which is the subject of the action. Jurisdiction over the res is acquired by (1) Custodia legis—placing the property or thing under the court’s custody (e.g., attachment) (2) Statutory authority—statute conferring the court with power to deal with the property or thing within its territorial jurisdiction (3) Summons by publication or other modes of extraterritorial service (Rule 14, Sec. 15) (c) As to the issues ISSUE— a disputed point or question to which parties to an action have narrowed down their several allegations and upon which they are desirous of obtaining a decision. Thus, where there is no disputed point, there is no issue. Jurisdiction over the issue may be conferred or determined by (1) Examination of the pleadings— Generally, jurisdiction over the issues is determined by the pleadings of the parties. (2) Pre-trial— It may be conferred by stipulation of the parties in the pre-trial, as when they enter into stipulations of facts and documents or enter into an agreement simplifying the issues of the case (Rule 18, Sec. 2) (3) Waiver— Failure to object to presentation of evidence on a matter not raised in the pleadings. Said issues tried shall be treated as if they had been raised in the pleadings. (d) As to the parties The court acquires jurisdiction over the 

Plaintiff— when he files his complaint



Defendant— i. Valid service of summons upon him, or ii. Voluntary appearance: “The defendant’s voluntary appearance in the action shall be equivalent to service of summons. The inclusion in a motion to dismiss of other grounds aside from lack of jurisdiction over the person of the defendant shall not be deemed a voluntary appearance. (Rule 14, Sec. 20) Examples: When defendant files  The necessary pleading;  A motion for reconsideration;  Petition to set aside judgment of default;  An answer;  Petition for certiorari without questioning the court’s jurisdiction over his person; or  When the parties jointly submit a compromise agreement for approval

SJS ‘13 – Comprehensive Reviewer

Page 3

BUT the filing of an answer should not be treated automatically as a voluntary appearance when such answer is precisely to object to the court’s jurisdiction over the defendant’s person. La Naval v. CA: A defendant should be allowed to put up his own defenses alternatively or hypothetically. It should not be the invocation of available additional defenses that should be construed as a waiver of the defense of lack of jurisdiction over the person, but the failure to raise the defense. Note: Jurisdiction over a non-resident defendant cannot be acquired if the action is in personam. 2. Estoppel to deny jurisdiction HEIRS OF BERTULDO HINOG v. MELICOR (455 SCRA 460, 2005) Since the deceased defendant participated in all stages of the case before the trial court, he is estopped from denying the jurisdiction of the court. The petitioners merely stepped into the shoes of their predecessor and are effectively barred by FACTS: Bertuldo Hinog allegedly occupied and built a small house on a portion of a property owned by respondents Balane for 10 years at a nominal annual rental. After 10 years, Bertuldo refused to heed demands made by respondents to return said portion and to remove the house constructed thereon. Respondents filed a complaint against him. Bertuldo filed his Answer, alleging ownership of the disputed property by virtue of a Deed of Absolute Sale. Bertuldo died without completing his evidence during the direct examination. Bertuldo’s original counsel was replaced by Atty. Petalcorin who entered his appearance as new counsel for the heirs of Bertuldo. Atty. Petalcorin filed a motion to expunge the complaint from the record and nullify all court proceedings on the ground that private respondents failed to specify in the complaint the amount of damages claimed so as to pay the correct docket fees; and that under Manchester doctrine, non-payment of the correct docket fee is jurisdictional. ISSUE: Whether the petitioners are barred by estoppel from questioning the jurisdiction of RTC YES. The petitioners are barred from questioning jurisdiction of the trial court. Although the issue of jurisdiction at any stage of the proceedings as the same is conferred by law, it is nonetheless settled that a party may be barred from raising it on the ground of estoppel. After the deceased Bertuldo participated in all stages of the case before the trial court, the petitioners merely stepped into the shoes of their predecessor and are effectively barred by estoppel from challenging RTC’s jurisdiction. 3. Jurisdiction at the time of filing of action PEOPLE v. CAWALING (293 SCRA 267, 1998) GR: The jurisdiction of a court to try a criminal case is determined by the law in force at the time of the institution of the action. Once the court acquires jurisdiction, it may not be ousted from the case by any subsequent events, such as a new legislation placing such proceedings under the jurisdiction of another tribunal. Exceptions: (1) there is an express provision in the statute, or FACTS: Brothers Vicente and Ronie Elisan were drinking tuba at the kitchenette of one of the accused, Fontamilla. When they were about to leave, they were warned by Luz Venus that the six (6) accused consisting of Mayor Cawaling, four (4) policemen and a civilian, had been watching and waiting for them outside the restaurant. Nevertheless, the two went out and were chased by the armed men. Vicente successfully ran and hid behind a coconut tree while Ronie unfortunately went to the ricefield and was shot to death there. An Information alleging murder was filed in the RTC against the 6 accused. RTC convicted them of murder. On appeal, the appellants questioned the jurisdiction of the RTC over the case, insisting that the Sandiganbayan was the tribunal with jurisdiction since the accused were public officers at the time of the killing. ISSUE: Whether the Sandiganbayan had jurisdiction NO. The jurisdiction of a court to try a criminal case is determined by the law in force at the time of the institution of the action. Once the court acquires jurisdiction, it may not be ousted from the case by any subsequent events, such as a new legislation placing such proceedings under the jurisdiction of another tribunal. Exceptions to this rule arise when: (1) there is an express provision in the statute, or (2) the statute is clearly intended to apply to actions pending before its enactment. Section 4-a-2 of PD 1606, as amended by PD 1861 lists two requisites that must concur before the Sandiganbayan may exercise exclusive and original jurisdiction over a case: (a) the offense was committed by the accused public officer in relation to his office; and (b) the penalty prescribed by law is higher than prision correccional or imprisonment for six (6) years, or higher than a fine of P6,000. Sanchez vs. Demetriou clarified that murder or homicide may be committed both by public officers and by private citizens, and that public office is not a constitutive element of said crime. The relation between the crime and the office contemplated should be direct and not accidental. The Information filed against the appellants contains no allegation that appellants were public officers who committed the crime in relation to their office. The charge was only for murder. In the absence of any allegation that the offense was committed in relation to the office of appellants or was necessarily connected with the discharge of their functions, the regional trial court, not the Sandiganbayan, has jurisdiction to hear and decide the case. SJS ‘13 – Comprehensive Reviewer

Page 4

REGULAR COURTS (MTC, RTC, CA, SC) (See San Beda Reviewer) SPECIAL COURTS (Sandiganbayan) (See San Beda Reviewer) QUASI-JUDICIAL BODIES (SEC, CSC, HLURB) 1. Securities and Exchange Commission (Sec. 5.2, RA 8799) The Commission shall retain jurisdiction over  Pending cases involving intra-corporate disputes submitted for final resolution which should be resolved within one (1) year from the enactment of this Code, and  Jurisdiction over pending suspension of payments/rehabilitation cases filed as of 30 June 2000 until finally disposed.

Civil Service Commission MAGPALE v. CSC (215 SCRA 398, 1992) Under Section 47 of the Administrative Code, the CSC shall decide on appeal all administrative disciplinary cases involving the imposition of “… (d) removal or dismissal from office.” The MPSB decision did not involve dismissal or separation from office, rather, the decision exonerated petitioner and ordered him reinstated to his former position. The MSPB decision was not a proper subject of appeal to the CSC. FACTS: Magpale, port manager of Philippine Ports Authority-Port Management Unit (PPA-PMU) of Tacloban, was found by the Secretary of DOTC guilty of Gross Negligence on two counts: (a) for his failure to account for the 44 units of equipment and (b) for failing to render the required liquidation of his cash advances amounting to P44,877.00 for a period of 4 yrs. He was also found guilty of frequent and unauthorized absences. He was meted the penalty of dismissal from the service with the corresponding accessory penalties. He appealed to the Merit System and Protection Board (MSPB) of the Civil Service Commission (CSC). The MSPB reversed the decision. PPA filed an appeal with the Civil Service Field Office-PPA, which indorsed the appeal to CSC. Magpale moved for the implementation of the MSPB decision which was opposed by the PPA. MSPB ordered the immediate implementation of its decision, which became final and executory. Respondent CSC reversed MPSB’s decision and held Magpale guilty. ISSUE: Whether the law authorized an appeal by the government from an adverse decision of the MSBP NO. Under the Administrative Code of 1987, decisions of the MPSB shall be final, except only “ those involving dismissal or separation from the service which may be appealed to the Commission” While it is true that the CSC does have the power to hear and decide administrative cases instituted by or brought before it directly or on appeal, the exercise of the power is qualified by and should be read together with Sec. 49 of Executive Order 292, which prescribes, among others that “(a) the decision must be appealable.” Under Section 47 of the Administrative Code, the CSC shall decide on appeal all administrative disciplinary cases involving the imposition of: (a) a penalty of suspension for more than 30 days; (b) fine in an amount exceeding 30 days salary; (c) demotion in rank or salary or transfer; or (d) removal or dismissal from office. The MPSB decision did not involve dismissal or separation from office, rather, the decision exonerated petitioner and ordered him reinstated to his former position. The MSPB decision was not a proper subject of appeal to the CSC. Settled is the rule that a tribunal, board, or officer exercising judicial functions acts without jurisdiction if no authority has been conferred by law to hear and decide the case. Housing and Land Use Regulatory Board (HLURB) SANDOVAL v. CAÑEBA (190 SCRA 77, 1991) It is not the ordinary courts but the National Housing Authority (NHA) which has exclusive jurisdiction to hear and decide cases of: (a) unsound real estate business practices; (b) claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project owner, developer, dealer, broker or salesman; and (c) cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lot or condominium unit against the FACTS: Estate Developers and Investors Corporation (Estate) filed a complaint against Nestor Sandoval (Sandoval) in the RTC for the collection of unpaid installments of a subdivision lot, pursuant to a promissory note, plus interest. Sandoval alleges that he suspended payments thereof because of the failure of the developer to develop the subdivision pursuant to their agreement. The RTC ruled in favor of Estate, and ordered Sandoval to pay. A writ of execution was issued which thereafter became final and executory. Sandoval filed a motion to vacate judgment and to dismiss the complaint on the ground that the RTC had no jurisdiction over the subject matter. A motion for reconsideration of the writ of execution was also filed by petitioner. Estate opposed both motions. RTC denied the motion to vacate for the reason that it is now beyond the jurisdiction of the court to do so. A new writ of execution was issued. Sandoval filed a petition alleging that the RTC committed grave abuse of discretion since the exclusive and original jurisdiction over the subject-matter thereof is vested with the Housing and Land Use Regulatory Board (HLURB) pursuant to PD 957. SJS ‘13 – Comprehensive Reviewer

Page 5

ISSUE: Whether the ordinary courts have jurisdiction over the collection of unpaid installments regarding a subdivision lot NO. Under Section 1 of Presidential Decree No. 957 the National Housing Authority (NHA) was given the exclusive jurisdiction to hear and decide certain cases of the following nature: (a) Unsound real estate business practices: (b) Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project owner, developer, dealer, broker or salesman; and (c) Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lot or condominium unit against the owner, developer, dealer, broker or salesman. The exclusive jurisdiction over the case between the petitioner and private respondent is vested not on the RTC but on the NHA. The NHA was re-named Human Settlements Regulatory Commission and thereafter it was re-named as the Housing and Land Use Regulatory Board (HLURB). KINDS OF ACTION 1. As to cause or foundation (Personal or Real) The distinction between a real action and a personal action is important for the purpose of determining the venue of the action. (a) Personal Personal actions are those other than real actions. (Sec. 2, Rule 4) Examples  Action  Action  Action  Action

for specific performance for damages to real property for declaration of the nullity of marriage to compel mortgagee to accept payment of the mortgage debt and release the mortgage

(b) Real An action is real when it affects title to or possession of real property, or an interest therein. (Sec. 1, Rule 4) To be a real action, it is not enough that it deals with real property. It is important that the matter in litigation must also involve any of the following issues: (a) Title; (b) Ownership; (c) Possession; (d) Partition; (e) Foreclosure of mortgage; or (f) Any interest in real property Examples  Action to recover possession of real property plus damages (damages is merely incidental)  Action to annul or rescind a sale of real property 2. As to object (In rem, In personam, Quasi in rem) The distinctions are important (a) to determine whether the jurisdiction of the defendant is required, and (b) to determine the type of summons to be employed (a) In rem An action is in rem when it is directed against the whole world. It is for the determination of the state or condition of a thing. Examples  Probate proceeding  Cadastral proceeding (b) In personam A proceeding in personam is a proceeding to enforce personal rights and obligations brought against the person and is based on the jurisdiction of the person. Its purpose is to impose some responsibility or liability directly upon the person of the defendant. In an action in personam, no one other than the defendant is sought to be held liable. Examples  Action for sum of money  Action for damages (c) Quasi in rem An action quasi in rem is one wherein an individual is named as defendant and the purpose of the proceeding is to subject his interest therein to the obligation or lien burdening the property. Such action deals with the status, ownership or liability of a particular property, but which are intended to operate on these questions only as between the particular parties to the proceedings, and not to ascertain or cut-off the rights or interests of all possible claimants. NOTE: These rules are inapplicable in the following cases: (1) Election cases; SJS ‘13 – Comprehensive Reviewer

Page 6

(2) (3) (4) (5) (6)

Land registration; Cadastral; Naturalization; Insolvency proceedings; Other cases not herein provided for, except by analogy or in a suppletory character, and whenever practicable and convenient. (Sec. 4, Rule 1)

COMMENCEMENT OF ACTION (Sec. 5, Rule 1) A civil action is commenced  by the filing of the original complaint in court, or  on the date of the filing of the later pleading if an additional defendant is impleaded irrespective of whether the motion for its admission, if necessary, is denied by the court. (with respect only to the defendant later impleaded) 1. Condition precedent — matters which must be complied with before a cause of action arises.  When a claim is subject to a condition precedent, compliance must be alleged in the pleading.  Failure to comply with a condition precedent is an independent ground for a motion to dismiss. (Sec. 1 [j], Rule 16) Examples:  Tender of payment before consignation  Exhaustion of administrative remedies  Prior resort to barangay conciliation proceedings  Earnest efforts towards a compromise  Arbitration proceedings, when contract so provides KATARUNGANG PAMBARANGAY (RA 7160) Purpose: To reduce the number of court litigations and prevent the deterioration of the quality of justice which has been brought by the indiscriminate filing of cases in the courts.  Only individuals shall be parties to KB proceedings, no juridical entities.  Parties must personally appear in all KB proceedings and without assistance of counsel or representatives, except for minors and incompetents who may be assisted by their next-of-kin, not lawyers.  Conciliation proceedings required is not a jurisdictional requirement.  NOTE: Failure to undergo the barangay conciliation proceedings is non-compliance of a condition precedent. Hence, a motion to dismiss a civil complaint may be filed. (Sec. 1 [j], Rule 16).  BUT the court may not motu proprio dismiss the case for failure to undergo conciliation. Effect: The amiable settlement and arbitration award shall have the effect of a final judgment of a court upon expiration of 10 days from date thereof, unless: (1) Repudiation of the settlement has been made, or (2) Petition to nullify the award has been filed before the proper city or municipal court Execution shall issue upon expiration of 10 days from settlement. Local Government Code (Secs. 399-422) Sec. 399. Lupong Tagapamayapa. - (a) There is hereby created in each barangay a lupong tagapamayapa, xxx. (f) In barangays where majority of the inhabitants are members of indigenous cultural communities, local systems of settling disputes through their councils of datus or elders shall be recognized without prejudice to the applicable provisions of this Code. Sec. 404. Pangkat ng Tagapagkasundo. - (a) There shall be constituted for each dispute brought before the lupon a conciliation panel to be known as the pangkat ng tagapagkasundo, xxx. Sec. 407. Legal Advice on Matters Involving Questions of Law. - The provincial, city legal officer or prosecutor or the municipal legal officer shall render legal advice on matters involving questions of law to the punong barangay or any lupon or pangkat member whenever necessary in the exercise of his functions in the administration of the katarungang pambarangay. Sec. 408. Subject Matter for Amicable Settlement; Exception Thereto. – - The lupon of each barangay shall have authority to bring together the parties actually residing in the same city or municipality for amicable settlement of all disputes except: xxx (compiled by SC AC 14-93) Sec. 409. Venue. - (a) Disputes between persons actually residing in the same barangay shall be brought for amicable settlement before the lupon of said barangay. (b) Those involving actual residents of different barangays within the same city or municipality shall be brought in the barangay where the respondent or any of the respondents actually resides, at the election of the complainant. (c) All disputes involving real property or any interest therein shall be brought in the barangay where the real property or the larger portion thereof is situated. (d) Those arising at the workplace where the contending parties are employed or at the institution where such parties are enrolled for study, shall be brought in the barangay where such workplace or institution is located. Objections to venue shall be raised in the mediation proceedings before the punong barangay; otherwise, the same shall be deemed waived. Any legal SJS ‘13 – Comprehensive Reviewer

Page 7

question which may confront the punong barangay in resolving objections to venue herein referred to may be submitted to the Secretary of Justice, or his duly designated representative, whose ruling thereon shall be binding. Rules on Venue .1 .2 .3 .4

living in the same barangay – said barangay living in the different barangays within the same city or municipality – barangay where the/a respondent resides, at the option of the complainant involving real property or any interest therein – where the real property or the larger portion thereof is situated arising at the workplace or at the educational institution – where such workplace or institution is located

Sec. 410. Procedure for Amicable Settlement. - (a) Who may initiate proceeding - Upon payment of the appropriate filing fee, any individual who has a cause of action against another individual involving any matter within the authority of the lupon may complain, orally or in writing, to the lupon chairman of the barangay. (b) MEDIATION by lupon chairman - Upon receipt of the complaint, the lupon chairman shall within the next working day summon the respondent(s), with notice to the complainant(s) for them and their witnesses to appear before him for a mediation of their conflicting interests. If he fails in his mediation effort within fifteen (15) days from the first meeting of the parties before him, he shall forthwith set a date for the constitution of the pangkat in accordance with the provisions of this Chapter. (c) Suspension of prescriptive period of offenses - While the dispute is under mediation, conciliation, or arbitration, the prescriptive periods for offenses and cause of action under existing laws shall be interrupted upon filing of the complaint with the punong barangay. The prescriptive periods shall resume upon receipt by the complainant of the complaint or the certificate of repudiation or of the certification to file action issued by the lupon or pangkat secretary : Provided, however, That such interruption shall not exceed sixty (60) days from the filing of the complaint with the punong barangay. (d) Issuance of summons; hearing; grounds for disqualification - The pangkat shall convene not later than three (3) days from its constitution, on the day and hour set by the lupon chairman, to hear both parties and their witnesses, simplify issues, and explore all possibilities for amicable settlement. For this purpose, the pangkat may issue summons for the personal appearance of parties and witnesses before it. In the event that a party moves to disqualify any member of the pangkat by reason of relationship, bias, interest, or any other similar grounds discovered after the constitution of the pangkat, the matter shall be resolved by the affirmative vote of the majority of the pangkat whose decision shall be final. Should disqualification be decided upon, the resulting vacancy shall be filled as herein provided for. (e) Period to arrive at a settlement - The pangkat shall arrive at a settlement or resolution of the dispute within fifteen (15) days from the day it convenes in accordance with this section. This period shall, at the discretion of the pangkat, be extendible for another period which shall not exceed fifteen (15) days, except in clearly meritorious cases. ***Procedure for Amicable Settlement*** .1 .2 .3 .4 .5 .6 .7

Complaint (need not be in writing) with filing fee to the lupon chairman of the barangay (interrupts prescription for at most 60 days) Lupon chairman shall within the next working day summon the respondents, with notice to the complainants for them and their witnesses to appear before him for a mediation if there is failure to mediate within 15 days from the first meeting, pangkat is constituted Pangkat convenes not later than 3 days from constitution, may issue summons In the event that a party moves to disqualify any member of the pangkat on a ground discovered after the constitution, the matter shall be resolved by the affirmative vote of the majority of the pangkat whose decision shall be final. Should disqualification be decided upon, the resulting vacancy shall be filled. The pangkat shall arrive at a settlement or resolution of the dispute within 15 days from the day it convenes, extendible for at most 15 days; may be extended further only in clearly meritorious cases. The prescriptive periods shall resume .a upon receipt by the complainant of )1 the complaint )2 the certificate of repudiation issued by the lupon or pangkat secretary )3 the certification to file action issued by the lupon or pangkat secretary .b lapse of 60 days from filing of complaint with the baranggay chairman

Sec. 411. Form of Settlement. - All amicable settlements shall be in writing, in a language or dialect known to the parties, signed by them, and attested to by the lupon chairman or the pangkat chairman, as the case may be. When the parties to the dispute do not use the same language or dialect, the settlement shall be written in the language or dialect known to them.

Form settlement*** ***

.1 .2

of

in writing in a language or dialect known to the

Sec. 412. CONCILIATION. - (a) Pre-condition to Filing of Complaint in Court. - No complaint, petition, action, or proceeding involving any matter within the authority of the lupon shall be filed or instituted directly in court or any other government office for adjudication, unless there has been a confrontation between the parties before the lupon chairman or the pangkat, and that no conciliation or settlement has been reached as certified by the lupon secretary or pangkat secretary as attested to by the lupon or pangkat chairman or unless the settlement has been repudiated by the parties thereto. (b) Where Parties May Go Directly to Court. – xxx (compiled by SC AC 14-93) (c) Conciliation among members of indigenous cultural communities. - The customs and traditions of indigenous cultural communities shall be applied in settling disputes between members of the cultural communities. GR: Preconditions to filing a complaint in court when the cause of action within the authority of the lupon, either .1

There had been

SJS ‘13 – Comprehensive Reviewer

Page 8

.2

.a

confrontation before the lupon chairman or the pangkat,

.b

no conciliation or settlement has been reached, and

.c

certification by the lupon or pangkat secretary as attested to by the lupon or pangkat chairman that no conciliation or settlement has been reached

or, settlement has been repudiated by the parties thereto

Sec. 413. ARBITRATION. - (a) The parties may, at any stage of the proceedings, agree in writing that they shall abide by the arbitration award of the lupon chairman or the pangkat. Such agreement to arbitrate may be repudiated within five (5) days from the date thereof for the same grounds and in accordance with the procedure hereinafter prescribed. The arbitration award shall be made after the lapse of the period for repudiation and within ten (10) days thereafter. (b) The arbitration award shall be in writing in a language or dialect known to the parties. When the parties to the dispute do not use the same language or dialect, the award shall be written in the language or dialect known to them. Agreement to arbitrate must be in writing. Repudiation of 1.

Agreement to arbitrate – within 5 days from agreement to arbitrate (Sec. 413)

2.

Arbitration award – within 10 days, action for annulment of arbitration award with the MTC (Sec. 416)

3.

Amicable settlement – within 10 days by an affidavit filed with the lupon chairman (Sec. 418)

Sec. 414. Proceedings Open to the Public; Exception. - All proceedings for settlement shall be public and informal: Provided, however, That the lupon chairman or the pangkat chairman, as the case may be, may motu proprio or upon request of a party, exclude the public from the proceedings in the interest of privacy, decency, or public morals. Sec. 415. Appearance of Parties in Person. - In all katarungang pambarangay proceedings, the parties must appear in person without the assistance of counsel or representative, except for minors and incompetents who may be assisted by their next-of-kin who are not lawyers. Sec. 416. Effect of Amicable Settlement and Arbitration Award. - The amicable settlement and arbitration award shall have the force and effect of a final judgment of a court upon the expiration of ten (10) days from the date thereof, unless repudiation of the settlement has been made or a petition to nullify the award has been filed before the proper city or municipal court. However, this provision shall not apply to court cases settled by the lupon under the last paragraph of Section 408 of this Code (non-criminal cases not within the lupon’s authority referred by a court) , in which case the compromise settlement agreed upon by the parties before the lupon chairman or the pangkat chairman shall be submitted to the court and upon approval thereof, have the force and effect of a judgment of said court. Sec. 417. Execution. - The amicable settlement or arbitration award may be enforced by execution by the lupon within six (6) months from the date of the settlement. After the lapse of such time, the settlement may be enforced by action in the appropriate city or municipal court. ***Execution of an amicable settlement or arbitration award in KB*** .1

by motion by the lupon – within 6 months from date of settlement

.2

by action before the inferior courts – after 6 months from date of settlement

Sec. 418. Repudiation. - Any party to the dispute may, within ten (10) days from the date of the settlement, repudiate the same by filing with the lupon chairman a statement to that effect sworn to before him, where the consent is vitiated by fraud, violence, or intimidation. Such repudiation shall be sufficient basis for the issuance of the certification for filing a complaint as hereinabove provided. Grounds for repudiation of settlement: consent vitiated by fraud, violence, or intimidation Sec. 419. Transmittal of Settlement and Arbitration Award to the Court. - The secretary of the lupon shall transmit the settlement or the arbitration award to the appropriate city or municipal court within five (5) days from the date of the award or from the lapse of the ten-day period repudiating the settlement and shall furnish copies thereof to each of the parties to the settlement and the lupon chairman. Sec. 420. Power to Administer Oaths. - The punong barangay, as chairman of the lupong tagapamayapa, and the members of the pangkat are hereby authorized to administer oaths in connection with any matter relating to all proceedings in the implementation of the katarungang pambarangay.

SJS ‘13 – Comprehensive Reviewer

Page 9

A. SUPREME COURT ADMINISTRATIVE CIRCULAR NO. 14-93 back I. All disputes are subject to Barangay conciliation pursuant to the Revised Katarungang Pambarangay Law xxx, and prior recourse thereto is a pre-condition before filing a complaint in court or any government offices, except in the following disputes: 1. Where one party is the government, or any subdivision or instrumentality thereof; 2. Where one party is a public officer or employee, and the dispute relates to the performance of his official functions; 3. Where the dispute involves real properties located in different cities and municipalities, unless the parties thereto agree to submit their difference to amicable settlement by an appropriate Lupon; 4. Any complaint by or against corporations, partnership or juridical entities, since only individuals shall be parties to Barangay conciliation proceedings either as complainants or respondents (Sec. 1, Rule VI, Katarungang Pambarangay Rules); 5. Disputes involving parties who actually reside in barangays of different cities or municipalities, except where such barangay units adjoin each other and the parties thereto agree to submit their differences to amicable settlement by an appropriate Lupon; 6. Offenses for which the law prescribes a maximum penalty of imprisonment exceeding one (1) year or a fine over five thousand pesos (P5,000.00); 7. Offenses where there is no private offended party; 8. Disputes where urgent legal action is necessary to prevent injustice from being committed or further continued, specifically the following: a. Criminal cases where accused is under police custody or detention (see Sec. 412 (b) (1), Revised Katarungang Pambarangay Law); b. Petitions for habeas corpus by a person illegally deprived of his rightful custody over another or a person illegally deprived or on acting in his behalf; c. Actions coupled with provisional remedies such as preliminary injunction, attachment, delivery of personal property and support during the pendency of the action; and d. Actions which may be barred by the Statute of Limitations. 9. Any class of disputes which the President may determine in the interest of justice or upon the recommendation of the Secretary of Justice; 10. Where the dispute arises from the Comprehensive Agrarian Reform Law (CARL) (Sec. 46 & 47, R.A. 6657); 11. Labor disputes or controversies arising from employer-employee relations (Montoya vs. Escayo, et al., 171 SCRA LUMBUAN v. RONQUILLO (489 SCRA 650, 2006) While admittedly no pangkat was constituted, the parties met at the office of the Barangay Chairman for possible settlement. The act of Lumbuan in raising the matter to the Katarungang Pambarangay and the subsequent confrontation of the lessee and lessor before the Lupon Chairman or the pangkat is sufficient compliance with the precondition for filing the case in court. FACTS: Lumbuan (lessor) leased a lot to respondent Ronquillo (lessee) for 3 years at a rental of P5000/month. They agreed that: (a) there will be an annual 10% increase in rent for the next 2 years; and (b) the leased premises shall be used only for lessee’s fastfood business. Ronquillo failed to abide by the conditions, and refused to pay or vacate the leased premises despite Lumbuan’s repeated verbal demands. Lumbuan referred the matter to the Barangay Chairman’s Office but no amicable settlement was reached. The barangay chairman issued a Certificate to File Action. Lumbuan filed an action for Unlawful Detainer with MeTC of Manila which ordered respondent Ronquillo to vacate the leased premises and to pay P46,000 as unpaid rentals. RTC set aside the MeTC decision and directed the parties to go back to the Lupon Chairman or Punong Barangay for further proceedings and to comply strictly with the condition that should the parties fail to reach an amicable settlement, the entire case will be remanded to the MeTC for it to decide the case anew. The CA reversed the RTC and ordered the dismissal of the ejectment case, ruling that when a complaint is prematurely instituted, as when the mandatory mediation and conciliation in the barangay level had not been complied with, the court should dismiss the case and not just remand the records to the court of origin so that the parties may go through the prerequisite proceedings. ISSUE: Whether the CA properly dismissed complaint for failure of the parties to comply with the mandatory mediation and conciliation proceedings in the barangay level NO. It should be noted that although no pangkat was formed since no amicable settlement was reached by the parties before the Katarungang Pambarangay, there was substantial compliance with Section 412(a) of R.A. 7160. While admittedly no pangkat was constituted, the parties met at the office of the Barangay Chairman for possible settlement. Thereby, the act of petitioner Lumbuan in raising the matter to the Katarungang Pambarangay and the subsequent confrontation of the lessee and lessor before the Lupon Chairman or the pangkat is sufficient compliance with the precondition for filing the case in court. This is true notwithstanding the mandate of Section 410(b) of the same law that the Barangay Chairman shall constitute a pangkat if he fails in his mediation efforts. Section 410(b) should be construed together with Section 412, as well as the circumstances obtaining in and peculiar to the case. On this score, it is significant that the Barangay Chairman or Punong Barangay is herself the Chairman of the Lupon under the Local Government Code. SJS ‘13 – Comprehensive Reviewer

Page 10

2. Payment of filing fee Payment of the prescribed docket fee vests a trial court with jurisdiction over the subject matter or nature of the action. The court acquires jurisdiction upon payment of the correct docket fees.  All complaints, petitions, answers, and similar pleadings must specify the amount of damages being prayed for, both in the body of the pleadings and in the assessment of the filing fees.  Manchester v. CA: Any defect in the original pleading resulting in underpayment of the docket fee cannot be cured by amendment, and for all legal purposes, the court acquired no jurisdiction in such case.  BUT nonpayment of filing fees does not automatically cause the dismissal of the case. The fee may be paid within the applicable prescriptive or reglementary period. HEIRS OF BERTULDO HINOG v. MELICOR (455 SCRA 460, 2005) Non-payment at the time of filing does not automatically cause the dismissal of the case, as long as the fee is paid within the applicable prescriptive or reglementary period, more so when the party involved demonstrates a willingness to abide by the rules prescribing such payment. Thus, when insufficient filing fees were initially paid by the plaintiffs and there was no FACTS: Respondents filed a complaint against Bertuldo for recovery of ownership of the premises leased by the latter. Bertuldo alleged ownership of the property by virtue of a Deed of Absolute Sale. Bertuldo died without completing his evidence during the direct examination. Atty. Petalcorin replaced the original counsel and filed a motion to expunge the complaint from the record and nullify all court proceedings on the ground that private respondents failed to specify in the complaint the amount of damages claimed as needed to pay the correct docket fees, and that under Manchester doctrine, non-payment of the correct docket fee is jurisdictional. ISSUE: Whether the nonpayment of the correct docket fee is jurisdictional in the present case NO. While the payment of the prescribed docket fee is a jurisdictional requirement, even its non-payment at the time of filing does not automatically cause the dismissal of the case, as long as the fee is paid within the applicable prescriptive or reglementary period, more so when the party involved demonstrates a willingness to abide by the rules prescribing such payment. Thus, when insufficient filing fees were initially paid by the plaintiffs and there was no intention to defraud the government, the Manchester rule does not apply. SUN INSURANCE OFFICE v. ASUNCION (170 SCRA 274, 1989) Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. Where the trial court acquires jurisdiction over a claim by the filing of the pleading and payment of prescribed filing fees but the judgment awards a claim not specified in the pleading, or if specified the same has been left for the court’s determination, the additional filing fee shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly FACTS Sun Insurance Office, Ltd. (SIOL) filed a complaint against Uy for the consignation of a premium refund on a fire insurance policy with a prayer for the judicial declaration of its nullity. Uy was declared in default for failure to file the required answer within the reglementary period. Uy filed a complaint in the RTC for the refund of premiums and the issuance of a writ of preliminary attachment initially against petitioner SIOL, but thereafter included Philipps and Warby as additional defendants. The complaint sought the payment of actual, compensatory, moral, exemplary and liquidated damages, attorney's fees, expenses of litigation and costs of the suit. Although the prayer in the complaint did not quantify the amount of damages sought said amount may be inferred from the body of the complaint to be about P50,000,000. Uy paid only P210.00 as docket fee, which prompted petitioners' counsel to raise his objection for under-assessment of docket fees. Petitioners allege that while Uy had paid P182,824.90 as docket fee, and considering that the total amount sought in the amended and supplemental complaint is P64,601,623.70, the docket fee that should be paid by private respondent is P257,810.49, more or less. Not having paid the same, petitioners contend that the complaint should be dismissed and all incidents arising therefrom should be annulled. ISSUE: Whether or not a court acquires jurisdiction over case when the correct and proper docket fee has not yet been paid YES. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefore shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee. The same rule applies to permissive counterclaims, third party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefore is paid.

CAUSE OF ACTION (RULE 2) Cause of Action A cause of action is the act or omission by which a party violates the rights of another. (Sec. 2, Rule 2) SJS ‘13 – Comprehensive Reviewer

Page 11

Every ordinary civil action must be based on a cause of action. (Sec. 1, Rule 2) Elements: (1) A legal right in favor of the plaintiff; (2) A correlative obligation on the part of the named defendant to respect or to not violate such right; and (3) Act or omission on the part of defendant in violation of the right of the plaintiff, or constituting a breach of the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages or other appropriate relief. Distinguished from right of action Cause of action is the reason for bringing an action, the formal statement of operative facts giving rise to a remedial right, and is governed by procedural law. A right of action is the remedy for bringing an action and is solely dependent on substantive law. Right of action, elements (1) There must be a good cause; (2) A compliance with all the conditions precedent to the bringing of the action; and (3) The action must be instituted by the proper party. Splitting a cause of action Splitting of cause of action is the act of dividing a single or indivisible cause of action into several parts or claims and bringing several actions thereon.  A party may not institute more than one suit for a single cause of action. (Sec. 3, Rule 2)  If two or more suits are instituted on the basis of the same cause of action, the filing of one or a judgment upon the merits in any one is available as a ground for the dismissal of the others. (Sec. 4, Rule 2)  Applies also to counterclaims and cross-claims. Examples Single cause of action (Cannot be filed separately)  A suit for the recovery of land and a separate suit to recover the fruits  Action to recover damages to person and action for damages to same person’s car  Action for recovery of taxes and action to demand surcharges resulting from delinquency in payment of said taxes  Action to collect debt and to foreclose mortgage  Action for partition and action for the recovery of compensation on the improvements  Action for annulment of sale and action to recover dividends Distinct causes of action (separate filing allowed)  Action for reconveyance of title over property and action for forcible entry or unlawful detainer  Action for damages to a car in a vehicular accident, and another action for damages for injuries to a passenger other than the owner of the car  Action to collect loan and action for rescission of mortgage  Action based on breach of contract of carriage and action based on quasi-delict JOSEPH v. BAUTISTA (170 SCRA 540, 1989) Where there is only one delict or wrong, there is but a single cause of action regardless of the number of rights that may have been violated belonging to one person. Nevertheless, if only one injury resulted from several wrongful acts, only one cause of action arises. FACTS: Joseph, petitioner, boarded Perez’s cargo truck with a load of livestock. At the highway, the truck driver overtook a tricycle but hit a mango tree when a pick-up truck tried to overtake him at the same time. This resulted to the bone fracture of the petitioner’s leg. Petitioner filed a complaint for damages against Perez, as owner, based on a breach of contract of carriage, and against Sioson and Villanueva, the owner and driver of the pick-up truck, based on quasi-delict. Petitioner impleaded Pagarigan and Vargas, since he could not ascertain who the real owners of the pick-up truck and the cargo truck were. Perez filed a cross-claim against the other respondents for indemnity, in the event that she is ordered to pay. The other respondents paid petitioner's claim for injuries, so they were released from liability. They also paid Perez for her claim of damages. They thereafter filed a Motion to Exonerate and Exclude themselves since they’ve already paid Joseph by way of amicable settlement and Perez’s claim for damages. Perez filed an Opposition to the motion since the release of claim executed by petitioner in favor of the other respondents allegedly inured to his benefit. RTC dismissed the case. ISSUE: Whether the judgment on the compromise agreement under the cause of action based on quasi-delict is a bar to the cause of action for breach of contract of carriage YES. A single act or omission can be violative of various rights at the same time, as when the act constitutes a juridical a violation of several separate and distinct legal obligations. However, where there is only one delict or wrong, there is but a

SJS ‘13 – Comprehensive Reviewer

Page 12

single cause of action regardless of the number of rights that may have been violated belonging to one person. Nevertheless, if only one injury resulted from several wrongful acts, only one cause of action arises. There is no question that petitioner sustained a single injury on his person, which vested in him a single cause of action, albeit with the correlative rights of action against the different respondents through the appropriate remedies allowed by law. Only one cause of action was involved although the bases of recovery invoked by petitioner against the defendants therein were not necessarily identical since the respondents were not identically circumstanced. DEL ROSARIO v. FEBTC (537 SCRA 571, 2007) It is well established, however, that a party cannot, by varying the form of action or adopting a different method of presenting his case, or by pleading justifiable circumstances as herein petitioners are doing, escape the operation of the principle that one and the same cause of action shall not be twice litigated. FACTS: PDCP extended a P4.4 million loan to DATICOR, which that DATICOR shall pay: a service fee of 1% per annum (later increased 6% per annum) on the outstanding balance; 12% per annum interest; and penalty charges 2% per month in case of default. The loans were secured by real estate mortgages over six (6) parcels of land and chattel mortgages over machinery and equipment. DATICOR paid a total of P3 million to PDCP, which the latter applied to interest, service fees and penalty charges. This left them with an outstanding balance of P10 million according to PDCP’s computation. DATICOR filed a complaint against PDCP for violation of the Usury Law and annulment of contract and damages. The CFI dismissed the complaint. The IAC set aside the dismissal and declared void and of no effect the stipulation of interest in the loan agreement. PDCP appealed the IAC's decision to SC. In the interim, PDCP assigned a portion of its receivables from DATICOR to FEBTC for of P5.4 M. FEBTC and DATICOR, in a MOA, agreed to P6.4 million as full settlement of the receivables. SC affirmed in toto the decision of the IAC, nullifying the stipulation of interests. DATICOR thus filed a Complaint for sum of money against PDCP and FEBTC to recover the excess payment which they computed to be P5.3 million. RTC ordered PDCP to pay petitioners P4.035 million, to bear interest at 12% per annum until fully paid; to release or cancel the mortgages and to return the corresponding titles to petitioners; and to pay the costs of the suit. RTC dismissed the complaint against FEBTC for lack of cause of action since the MOA between petitioners and FEBTC was not subject to SC decision, FEBTC not being a party thereto. Petitioners and PDCP appealed to the CA, which held that petitioners' outstanding obligation (determined to be only P1.4 million) could not be increased or decreased by any act of the creditor PDCP, and held that when PDCP assigned its receivables, the amount payable to it by DATICOR was the same amount payable to assignee FEBTC, irrespective of any stipulation that PDCP and FEBTC might have provided in the Deed of Assignment, DATICOR not having been a party thereto, hence, not bound by its terms. By the principle of solutio indebiti, the CA held that FEBTC was bound to refund DATICOR the excess payment of P5 million it received; and that FEBTC could recover from PDCP the P4.035 million for the overpayment for the assigned receivables. But since DATICOR claimed in its complaint only of P965,000 from FEBTC, the latter was ordered to pay them only that amount. Petitioners filed before the RTC another Complaint against FEBTC to recover the balance of the excess payment of P4.335 million. The trial court dismissed petitioners' complaint on the ground of res judicata and splitting of cause of action. It recalled that petitioners had filed an action to recover the alleged overpayment both from PDCP and FEBTC and that the CA Decision, ordering PDCP to release and cancel the mortgages and FEBTC to pay P965,000 with interest became final and executory. ISSUE: Whether FEBTC can be held liable for the balance of the overpayment of P4.335 million plus interest which petitioners previously claimed against PDCP in a previously decided case NO. A cause of action is the delict or the wrongful act or omission committed by the defendant in violation of the primary rights of the plaintiff. In the two cases, petitioners imputed to FEBTC the same alleged wrongful act of mistakenly receiving and refusing to return an amount in excess of what was due it in violation of their right to a refund. The same facts and evidence presented in the first case were the very same facts and evidence that petitioners presented in the second case. A party cannot, by varying the form of action or adopting a different method of presenting his case, or by pleading justifiable circumstances as herein petitioners are doing, escape the operation of the principle that one and the same cause of action shall not be twice litigated. SC held that to allow the re-litigation of an issue that was finally settled as between petitioners and FEBTC in the prior case is to allow the splitting of a cause of action, a ground for dismissal under Section 4 of Rule 2 of the Rules of Court. This rule proscribes a party from dividing a single or indivisible cause of action into several parts or claims and instituting two or more actions based on it. Because the plaintiff cannot divide the grounds for recovery, he is mandated to set forth in his first action every ground for relief which he claims to exist and upon which he relies; he cannot be permitted to rely upon them by piecemeal in successive actions to recover for the same wrong or injury. Both the rules on res judicata and splitting of causes of action are based on the salutary public policy against unnecessary multiplicity of suits—interest reipublicae ut sit finis litium. Re-litigation of matters already settled by a court's final judgment merely burdens the courts and the taxpayers, creates uneasiness and confusion, and wastes valuable time and energy that could be devoted to worthier cases. PROGRESSIVE DEVELOPMENT CORP. v. CA (301 SCRA 367, 1991) SJS ‘13 – Comprehensive Reviewer

Page 13

When a single delict or wrong is committed — like the unlawful taking or detention of the property of another — there is but one single cause of action regardless of the number of rights that may have been violated, and all such rights should be alleged in a single complaint as constituting one single cause of action. In a forcible entry case, the real issue is the physical possession of the real property. The question of damages is merely secondary or incidental, so much so that the amount thereof does not affect the jurisdiction of the court. In other words, the unlawful act of a deforciant in taking possession of a piece of land by means of force and intimidation against the rights of the party actually in possession thereof is a delict or wrong, or a cause of action that gives rise to two (2) remedies, namely, the recovery of possession and recovery of damages arising from the loss of possession, but only to one action. For obvious reasons, both remedies cannot be the subject of two (2) separate and independent actions, one for recovery of possession only, and the other, for FACTS: PDC leased to Westin a parcel of land with a commercial building for 9 years and 3 months, with a monthly rental of approximately P600,000. Westin failed to pay rentals despite several demands. The arrearages amounted to P8,6M. PDC repossessed the leased premises, inventoried the movable properties found within and owned by Westin, and scheduled a public auction for the sale of the movables, with notice to Westin. Westin filed a forcible entry case with the MeTC against PDC for with damages and a prayer for a temporary restraining order and/or writ of preliminary injunction. A TRO enjoined PDC from selling Westin's properties. At the continuation of the hearing, the parties agreed, among others, that Westin would deposit with the PCIB (Bank) P8M to guarantee payment of its back rentals. Westin did not comply with its undertaking, and instead, with the forcible entry case still pending, Westin instituted another action for damages against PDC with the RTC. The forcible entry case had as its cause of action the alleged unlawful entry by PDC into the leased premises out of which three (3) reliefs arose: (a) the restoration by PDC of possession of the leased premises to the lessee; (b) the claim for actual damages due to losses suffered by Westin; and, (c) the claim for attorney’s fees and cost of suit. On the other hand, the complaint for damages prays for a monetary award consisting of moral and exemplary damages; actual damages and compensatory damages representing unrealized profits; and, attorney's fees and costs, all based on the alleged forcible takeover of the leased premises by PDC. PDC filed a motion to dismiss the damage suit on the ground of litis pendencia and forum shopping. The RTC, instead of ruling on the motion, archived the case pending the outcome of the forcible entry case. Westin filed with the RTC an amended complaint for damages, which was granted. It also filed an Urgent Ex-Parte Motion for the Issuance of a TRO and Motion for the Grant of a Preliminary Prohibitory and Preliminary Mandatory Injunction, which were all granted. PDC’s motion to dismiss was denied. Thus, PDC filed with the CA a special civil action for certiorari and prohibition. But the CA dismissed the petition. It clarified that since the damages prayed for in the amended complaint with the RTC were those caused by the alleged highhanded manner with which PDC reacquired possession of the leased premises and the sale of Westin's movables found therein, the RTC and not the MeTC had jurisdiction over the action of damages. ISSUE: Whether Westin may institute a separate suit for damages with the RTC after having instituted an action for forcible entry with damages with the MeTC NO. Sec. 1 of Rule 70 of the Rules of Court provides that all cases for forcible entry or unlawful detainer shall be filed before the MTC which shall include not only the plea for restoration of possession but also all claims for damages and costs arising therefrom. Otherwise expressed, no claim for damages arising out of forcible entry or unlawful detainer may be filed separately and independently of the claim for restoration of possession. Under Sec. 3 of Rule 2 of the Revised Rules of Court, as amended, a party may not institute more than one suit for a single cause of action. Under Sec. 4 of the same Rule, if two or more suits are instituted on the basis of the same cause of action, the filing of one or a judgment upon the merits in any one is available as a ground for the dismissal of the other or others. Westin's cause of action in the forcible entry case and in the suit for damages is the alleged illegal retaking of possession of the leased premises by PDC from which all legal reliefs arise. Simply stated, the restoration of possession and demand for actual damages in the case before the MeTC and the demand for damages with the RTC both arise from the same cause of action, i.e., the forcible entry by PDC into the least premises. The other claims for moral and exemplary damages cannot succeed considering that these sprung from the main incident being heard before the MeTC. Jurisprudence says that when a single delict or wrong is committed — like the unlawful taking or detention of the property of the another — there is but one single cause of action regardless of the number of rights that may have been violated, and all such rights should be alleged in a single complaint as constituting one single cause of action. In a forcible entry case, the real issue is the physical possession of the real property. The question of damages is merely secondary or incidental, so much so that the amount thereof does not affect the jurisdiction of the court. In other words, the unlawful act of a deforciant in taking possession of a piece of land by means of force and intimidation against the rights of the party actually in possession thereof is a delict or wrong, or a cause of action that gives rise to two (2) remedies, namely, the recovery of possession and recovery of damages arising from the loss of possession, SJS ‘13 – Comprehensive Reviewer

Page 14

but only to one action. For obvious reasons, both remedies cannot be the subject of two (2) separate and independent actions, one for recovery of possession only, and the other, for the recovery of damages. That would inevitably lead to what is termed in law as splitting up a cause of action. What then is the effect of the dismissal of the other action? Since the rule is that all such rights should be alleged in a single complaint, it goes without saying that those not therein included cannot be the subject of subsequent complaints for they are barred forever. If a suit is brought for a part of a claim, a judgment obtained in that action precludes the plaintiff from bringing a second action for the residue of the claim, notwithstanding that the second form of action is not identical with the first or different grounds for relief are set for the second suit. This principle not only embraces what was actually determined, but also extends to every matter which the parties might have litigated in the case. This is why the legal basis upon which Westin anchored its second claim for damages, i.e., Art. 1659 in relation to Art. 1654 of the Civil Code, not otherwise raised and cited by Westin in the forcible entry case, cannot be used as justification for the second suit for damages. CGR CORP. V. TREYES (522 SCRA 765, 2007) Petitioners’ filing of an independent action for damages grounded on the alleged destruction of CGR’s property, other than those sustained as a result of dispossession in the Forcible Entry case could not be considered as splitting of a cause of action. FACTS: CGR Corporation, Herman Benedicto and Alberto Benedicto, petitioners, claim to have occupied 37 ha. of public land in Negros Occidental, pursuant to a lease agreement granted to them by the Secretary of Agriculture for a period of 25 years (to last October 2000 to December 2024). On November 2000, however, respondent Treyes allegedly forcibly and unlawfully entered the leased premises and barricaded the entrance to the fishponds of the petitioners. Treyes and his men also harvested tons of milkfish and fingerlings from the petitioners’ ponds. Petitioners then filed a complaint for Forcible Entry with the MTC. Another complaint to claim for damages was also filed by the petitioners against the same respondent Treyes grounded on the allegations that Treyes and his men also destroyed and ransacked the Chapel built by petitioner CGR Corporation and decapitated the heads of the religious figures. ISSUE: Whether during the pendency of a separate complaint for Forcible Entry, the petitioner can independently institute and maintain an action for damages which they claim arose from incidents occurring after the forcible entry of Treyes and his men YES. The only recoverable damages in the forcible entry and detainer cases instituted first by the petitioners with the MTC are the “rents” or fair rental value of the property from the time of dispossession by the respondent. Hence, other damages being claimed by the petitioners must be claimed in another ordinary civil action. It is noteworthy that the second action instituted by the petitioners (complaint for damages) have NO direct relation to their loss of possession of the leased premises – which is the main issue in the first action they instituted. The second action for claim of damages had to do with the harvesting and carting away of milkfish and other marine products, as well as the ransacking of the chapel built by CGR Corp. Clearly, the institution of the two cases is not a splitting of a cause of action, since both are concerned with entirely different issues. ENRIQUEZ v. RAMOS (7 SCRA 265, 1963) An examination of the first complaint filed against appellant in CFI showed that it was based on appellants' having unlawfully stopped payment of the check for P2,500.00 she had issued in favor of appellees; while the complaint in the second and present action was for nonpayment of the balance of P96,000.00 guaranteed by the mortgage. The claim for P2,500.00 was, therefore, a distinct debt not covered by the security. The two causes of action being different, section 4 of Rule 2 does not apply. FACTS: Rodrigo Enriquez and the Dizon spouses sold to Socorro Ramos 11 parcels of land for P101,000. Ramos paid P5,000 downpayment, P2,500 in cash, and with a P2,500.00 check drawn against PNB, and agreed to satisfy the balance of P96,000.00 within 90 days. To secure the said balance, Ramos, in the same deed of sale, mortgaged the 11 parcels in favor of the vendors. Ramos mortgaged a lot on Malinta Estate as additional security, as attorney-in-fact of her four children and as judicial guardian of her minor child. Ramos failed to comply with the conditions of the mortgage, so an action for foreclosure was filed by the vendorsmortgagees. Ramos moved to dismiss, alleging that the plaintiffs previously had filed action against her in the CFI of Manila for the recovery of P2,500.00 paid by check as part of the down payment on the price of the mortgaged lands; that at the time this first suit was filed, the mortgage debt was already accrued and demandable; that plaintiffs were guilty of splitting a single cause of action, and under section 4 of Rule 2 of the Rules of Court, the filing of the first action for P2,500.00 was a defense that could be pleaded in abatement of the second suit. CFI of Quezon City denied the motion to dismiss. Defendant Ramos re-pleaded the averments as a special defense in her answer. The CFI ruled against defendant Ramos; ordered her to pay P96,000.00, with 12% interest, attorney's fees, and the costs SJS ‘13 – Comprehensive Reviewer

Page 15

of the suit; and further decreed the foreclosure sale of the mortgaged properties in case of non-payment within 90 days. Ramos appealed directly to SC, ISSUE: Whether there was splitting of cause of action NO, there is no splitting of cause of action in this case. An examination of the first complaint filed against appellant in CFI showed that it was based on appellants' having unlawfully stopped payment of the check for P2,500.00 she had issued in favor of appellees, while the complaint in the second and present action was for non-payment of the balance of P96,000.00 guaranteed by the mortgage. The claim for P2,500.00 was, therefore, a distinct debt not covered by the security. The two causes of action being different, section 4 of Rule 2 does not apply. Remedy against splitting a single cause of action (a) Motion to dismiss (Sec 1 [e] or [f], Rule 16)— 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: xxx (e) That there is another action pending between the same parties for the same cause; (f) That the cause of action is barred by a prior judgment or by the statute of limitations xxx (b) Answer alleging affirmative defense (Sec. 6, Rule 16)— If no motion to dismiss has been filed, any of the grounds for dismissal provided for in this Rule 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. NOTE: As to which action should be dismissed (the first or second one) would depend upon judicial discretion and the prevailing circumstances of the case.

Joinder of causes of action Joinder of causes of action is the assertion of as many causes of action as a party may have against another in one pleading. It is the process of uniting two or more demands or rights of action in one action.  This is merely permissive, NOT compulsory, because of the use of the word “may” in Sec. 5, Rule 2. It is subject to the following conditions: (a) The party joining the causes of action shall comply with the rules on joinder of parties; i. The right to relief should arise out of the same transaction or series of transaction, and ii. There exists a common question of law or fact. (Sec. 6, Rule 3) (b) The joinder shall not include special civil actions or actions governed by special rules;  Example: An action for claim of money cannot be joined with an action for ejectment, or with an action for foreclosure. (c) Where the causes of action are between the same parties but pertain to different venues or jurisdictions, the joinder may be allowed in the RTC provided i. one of the causes of action falls within the jurisdiction of said court, and ii. the venue lies therein; and (d) Where the claims in all the causes of action are principally for recovery of money, the aggregate amount claimed shall be the test of jurisdiction. (Sec. 5, Rule 2) Misjoinder of causes of action Misjoinder of causes of action is NOT a ground for dismissal of an action. A misjoined cause of action may be severed and proceeded with separately: (a) on motion of a party, or (b) on the initiative of the court. (Sec. 6, Rule 2)

FLORES v. MALLARE-PHILLIPPS (144 SCRA 277, 1986) Application of the Totality Rule under Sect. 33(l) BP129 and Sect. 11 of the Interim Rules is subject to the requirements for the Permissive Joinder of Parties under Sec. 6 of Rule 3. In cases of permissive joinder of parties, the total of all the claims shall be the first jurisdictional test. If instead of a joinder, separate actions are filed by or against the parties, the amount demanded in each

SJS ‘13 – Comprehensive Reviewer

Page 16

FACTS: Binongcal and Calion, in separate transactions, purchased truck tires on credit from Flores. The two allegedly refused to pay their debts, so Flores filed a complaint where the first cause of action was against Binongcal for P11, 643, and the second was against Calion for P10, 212. Binongcal filed a Motion to Dismiss on the ground of lack of jurisdiction since under Sec. 19(8) of BP129 RTC shall exercise exclusive original jurisdiction if the amount of the demand is more than P20, 000, and that the claim against him is less than that amount. He averred further that although Calion was also indebted to Flores, his obligation was separate and distinct from the other, so the aggregate of the claims cannot be the basis of jurisdiction. Calion joined in moving for the dismissal of the complaint during the hearing of the motion. Petitioner opposed the Motion to Dismiss. RTC dismissed the complaint for lack of jurisdiction. ISSUE: Whether RTC has jurisdiction over the case following the Totality Rule YES. The Totality Rule (under Sec. 33 of BP129 and Sec. 11 of the Interim Rules) applies not only to cases where two or more plaintiffs having separate causes of action against a defendant join in a single complaint, but also to cases where a plaintiff has separate causes of action against two or more defendants joined in a single complaint. However, the said causes of action should arise out of the same transaction or series of transactions and there should be a common question of law or fact, as provided in Sec. 6 of Rule 3. In cases of permissive joinder of parties, the total of all the claims shall be the first jurisdictional test. If instead of joining or being joined in one complaint, separate actions are filed by or against the parties, the amount demanded in each complaint shall be the second jurisdictional test. In the case at bar, the lower court correctly held that the jurisdictional test is subject to the Rules on Joinder of Parties pursuant to Sec. 5 of Rule 2 and Sec. 6 of Rule 3 of the Rules of Court. Moreover, after a careful scrutiny of the complaint, It appears that there is a misjoinder of parties for the reason that the claims against Binongcal and Calion are separate and distinct and neither of which falls within its jurisdiction. UNIWIDE HOLDINGS, INC. v. CRUZ (529 SCRA 664, 2007) Exclusive venue stipulation embodied in a contract restricts or confines parties thereto when the suit relates to breach of said contract. But where the exclusivity clause does not make it necessarily encompassing, such that even those not related to the enforcement of the contract should be subject to the exclusive venue, the stipulation designating exclusive venues should be strictly confined to the specific FACTS: Uniwide Holdings, Inc. (UHI) granted Cruz, a 5yr. franchise to adopt and use the "Uniwide Family Store System" for the establishment and operation of a "Uniwide Family Store" in Marikina. The agreement obliged Cruz to pay UHI a P50,000 monthly service fee or 3% of gross monthly purchases, whichever is higher, payable within 5 days after the end of each month without need of formal billing or demand from UHI. In case of any delay in the payment of the monthly service fee, Cruz would be liable to pay an interest charge of 3% per month. It appears that Cruz had purchased goods from UHI’s affiliated companies FPC and USWCI. FPC and USWCI assigned all their rights and interests over Cruz’s accounts to UHI. Cruz had outstanding obligations with UHI, FPC, and USWCI in the total amount of P1,358,531.89, which remained unsettled despite the demands made. Thus UHI filed a complaint for collection of sum of money before RTC of Parañaque Cruz on the following causes of action: (1) P1,327,669.832 in actual damages for failure to pay the monthly service fee; (2) P64,165.96 of actual damages for failure to pay receivables assigned by FPC to UHI; (3) P1,579,061.36 of actual damages for failure to pay the receivables assigned by USWCI to UHI; (4) P250,000.00 of attorney’s fees. Cruz filed a motion to dismiss on the ground of improper venue, invoking Article 27.5 of the agreement which reads: 27.5 Venue Stipulation – The Franchisee consents to the exclusive jurisdiction of the courts of Quezon City, the Franchisee waiving any other venue. Parañaque RTC granted Cruz’s motion to dismiss. Hence, the present petition. ISSUE: Whether a case based on several causes of action is dismissible on the ground of improper venue where only one of the causes of action arises from a contract with exclusive venue stipulation NO. The general rule on venue of personal actions provides actions may be commenced and tried where the plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the principal defendants resides, or in the case of a nonresident defendant, where he may be found, at the election of the plaintiff. The parties may also validly agree in writing on an exclusive venue. The forging of a written agreement on an exclusive venue of an action does not, however, preclude parties from bringing a case to other venues. Where there is a joinder of causes of action between the same parties and one action does not arise out of the contract where the exclusive venue was stipulated upon, the complaint, as in the one at bar, may be brought before other venues provided that such other cause of action falls within the jurisdiction of the court and the venue lies therein. Based on the allegations in petitioner’s complaint, the second and third causes of action are based on the deeds of assignment executed in its favor by FPC and USWCI. The deeds bear no exclusive venue stipulation with respect to the causes of action thereunder. Hence, the general rule on venue applies – that the complaint may be filed in the place where the plaintiff or defendant resides. It bears emphasis that the causes of action on the assigned accounts are not based on a breach of the agreement between UHI and Cruz. They are based on separate, distinct and independent contracts—deeds of assignment in which UHI is the assignee of Cruz’s obligations to the assignors FPC and USWCI. Thus, any action arising from the deeds of assignment cannot be subjected to the exclusive venue stipulation embodied in the agreement. SJS ‘13 – Comprehensive Reviewer

Page 17

Exclusive venue stipulation embodied in a contract restricts or confines parties thereto when the suit relates to breach of said contract. But where the exclusivity clause does not make it necessarily encompassing, such that even those not related to the enforcement of the contract should be subject to the exclusive venue, the stipulation designating exclusive venues should be strictly confined to the specific undertaking or agreement. Otherwise, the basic principles of freedom to contract might work to the great disadvantage of a weak party-suitor who ought to be allowed free access to courts of justice. What is the totality rule? Where the claims in all the causes of action are principally for recovery of money, the aggregate amount claimed shall be the test of jurisdiction. (Sec. 5, Rule 2)

PARTIES TO CIVIL ACTIONS (RULE 3) Parties (Sec. 1, Rule 3) (1) Plaintiff— The plaintiff is the claiming party or the original claiming party and is the one who files the complaint.  It may also apply to a defendant who files a counterclaim, a cross-claim or a third party complaint. (2) Defendant— The defendant refers to the original defending party, and also the defendant in a counterclaim, the cross-defendant, or the third party defendant.  If a counterclaim is filed against the original plaintiff, the latter becomes the defendant. Who may be parties? (Sec. 1, Rule 3) (1) Natural persons (2) Juridical persons (a) The State and its political subdivisions; (b) Other corporations, institutions and entities for public interest or purpose, created by law; and (c) Corporations, partnerships and associations for private interest r purpose to which the law grants a juridical personality, separate and distinct from each shareholder, partner or member. (Art. 44, Civil Code) (3) Entities authorized by law, even if they lack juridical personality (a) Corporation by estoppel (Sec. 21, Corporation Code); (b) Partnership having a capital of P3,000 or more but fails to comply with the registration requirements (Art. 1768, Civil Code); (c) Estate of a deceased person (d) A legitimate labor organization (Art. 242 [e], Labor Code); (e) The Ramon Catholic Church; (f) A dissolved corporation may prosecute and defend in suits which: a. Occur within 3 years after dissolution; and b. Are connected with the settlement and closure of its affairs (Sec. 122, Corporation Code) CLASSIFICATION OF PARTIES Real party-in-interest A real party in interest is the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit.  Unless otherwise authorized by law or these Rules, every action must be prosecuted or defended in the name of the real party in interest. (Sec. 2, Rule 3)  Real interest—a present substantial interest as distinguished from a mere expectancy or a future, contingent subordinate or consequential interest. It is material and direct, as distinguished from a mere incidental interest.  The owner of the right of violated is the real party in interest as plaintiff, and the person responsible for the violation is the real party in interest as defendant. Not real   

party in interest A person who has not taken part in a contract Third party who has not taken part in a compromise agreement Mere agent in a contract of sale

Lack of personality to sue EVANGELISTA v. SANTIAGO (475 SCRA 744)

SJS ‘13 – Comprehensive Reviewer

Page 18

The term "lack of capacity to sue" refers to a plaintiff's general disability to sue, such as on account of minority, insanity, incompetence, lack of juridical personality or any other general disqualifications of a party. "Lack of personality to sue” refers to the fact that the plaintiff is not the real party- in-interest. The first can be a ground for a motion to dismiss based on the ground of lack of legal capacity to sue; whereas the second can be used as a ground for a motion to dismiss based on the fact that the complaint, on the face thereof, evidently states no cause of FACTS: The Subject Property was part of a vast tract of land called “Hacienda Quibiga” which was awarded to Don Hermogenes Rodriguez by the Queen of Spain and evidenced by a Spanish title. Don Ismael Favila, claiming to be one of the heirs and successors-in-interest of Rodriguez, and pursuant to an SPA executed by his “mga kapatid,” assigned portions of the property to the petitioners in exchange for the labor and work they and their predecessors have done on the property. Petitioners were informed that Santiago was planning to evict them; two of them received notices to vacate. Their investigations revealed that the property was included in TCTs which originated from OCT No. 670, and is now in the name of respondent. Petitioners filed an action for declaration of nullity of respondent’s certificates of title on the basis that OCT No. 670 was fake and spurious. As an affirmative defense, respondent claimed that the petitioners had no legal capacity to file the Complaint, and thus, the Complaint stated no cause of action. He averred that since OCT No. 670 was genuine and authentic on its face, then the OCT and all land titles derived therefrom, are incontrovertible, indefeasible and conclusive against the petitioners and the whole world. RTC dismissed the complaint on the ground that the action filed was in effect an action for reversion, and therefore should have been initiated by the OSG, not private individuals. In the end, it concluded that the petitioners were not the owners of the subject property. CA affirmed the RTC, and likewise dismissed the complaint. ISSUE: Whether the respondent’s action is properly based on petitioners’ lack of legal capacity to sue NO. The term "lack of capacity to sue" should not be confused with the term "lack of personality to sue." The former refers to a plaintiff's general disability to sue, such as on account of minority, insanity, incompetence, lack of juridical personality or any other general disqualifications of a party, while the latter refers to the fact that the plaintiff is not the real party- ininterest. The first can be a ground for a motion to dismiss based on the ground of lack of legal capacity to sue; whereas the second can be used as a ground for a motion to dismiss based on the fact that the complaint, on the face thereof, evidently states no cause of action. In the present case, this Court may assume that the respondent is raising the affirmative defense that the Complaint filed by the petitioners before the trial court stated no cause of action because the petitioners lacked the personality to sue, not being the real party-in-interest. ISSUE: Whether the complaint stated no cause of action since petitioners had no personality to sue YES. Petitioners had no personality to file the said action, not being the parties-in-interest, and their Complaint should be dismissed for not stating a cause of action. The action is really one for the removal of a cloud on or quieting of title and according to Article 477 of the Civil Code, the plaintiff in such an action must have legal or equitable title to, or interest in, the real property which is the subject matter of the action. Petitioners failed to establish any legal or equitable title to, or legitimate interest in, the Subject Property so as to justify their right to file an action to remove a cloud on or to quiet title. Also, the title to and possession of the Subject Property by petitioners’ predecessors-in-interest could be traced only as far back as the Spanish title of Rodriguez. Petitioners, having acquired portions of the Subject Property by assignment, could acquire no better title to the said portions than their predecessors-in-interest. Standing to sue DOMINGO v. CARAGUE (456 SCRA 744, 2005) Judicial power is the power to hear and decide cases pending between parties who have the right to sue in courts of law and equity. Corollary to this dictum is the principle of locus standi of a litigant. He who is directly affected and whose interest is immediate and substantial has the standing to sue. Thus, a party must show a personal stake in the outcome of the case or an injury to himself that can be redressed by a favorable decision in order to warrant an invocation of the court’s jurisdiction and justify the exercise of judicial power on his behalf.

SJS ‘13 – Comprehensive Reviewer

Page 19

FACTS: Petitioners Domingo, Gangan and Banaria are retired Chairmen, while Ursal and Cruz are retired Commissioners of COA (Commission on Audit) and the other petitioners are incumbent officers or employees of COA. All claim “to maintain a deepseated abiding interest in the affairs of COA,” especially in its Organizational Restructuring Plan, as concerned taxpayers. These petitioners claim that they were divested of their designations/ranks upon implementation of the COA Organizational Restructuring Plan without just cause and without due process, in violation of Civil Service Law. Moreover, they were deprived of their respective Representation and Transportation Allowances (RATA), thus causing them undue financial prejudice. Petitioners now invoke this Court’s judicial power to strike down the COA Organizational Restructuring Plan for being unconstitutional or illegal. Petitioners invoke Chavez v. Public Estates Authority, Agan, Jr. v. Philippine International Air Terminals Co., Inc. and Information Technology Foundation of the Philippines v. Commission on Elections where the court ruled that where the subject matter of a case is a matter of public concern and imbued with public interest, then this fact alone gives them legal standing to institute the instant petition. Petitioners contend that the COA Organizational Restructuring Plan is not just a mere reorganization but a revamp or overhaul of the COA, which will have an impact upon the rest of the government bodies subject to its audit supervision, thus, should be treated as a matter of transcendental importance. Consequently, petitioners’ legal standing should be recognized and upheld. The respondents, through the OSG assail the standing of the petitioners to file the present case. Among others, they allege that the petitioners: (1) have not shown "a personal stake in the outcome of the case or an actual or potential injury that can be redressed by a favorable decision of the Court, (2) failed to show any "present substantial interest" in teh outcome of the case, nor (3) may the petitioenrs claim that as taxpayers they have legal standing because nowhere in the petition do they claim that public funds are spent in violation of law. ISSUE: Whether the petitioners have standing to sue NO. The Petitioners have not shown any direct and personal interest in the COA Organizational Restructuring Plan. There is no indication that they have sustained or are in imminent danger of sustaining some direct injury as a result of its implementation. In fact, they admitted that “they do not seek any affirmative relief nor impute any improper or improvident act against the respondents” and “are not motivated by any desire to seek affirmative relief from COA or from respondents that would redound to their personal benefit or gain.” Clearly, they do not have any legal standing to file the instant suit. Judicial power is the power to hear and decide cases pending between parties who have the right to sue in courts of law and equity. Corollary to this dictum is the principle of locus standi of a litigant. He who is directly affected and whose interest is immediate and substantial has the standing to sue. Thus, a party must show a personal stake in the outcome of the case or an injury to himself that can be redressed by a favorable decision in order to warrant an invocation of the court’s jurisdiction and justify the exercise of judicial power on his behalf. In Chavez V. PEA, the Court ruled that the petitioner has legal standing since he is a taxpayer and his purpose in filing the petition is to compel the Public Estate Authority (PEA) to perform its constitutional duties with respect to: (a) the right of the citizens to information on matters of public concern; and (b) the application of a constitutional provision intended to insure the equitable distribution of alienable lands of the public domain among Filipino citizens - such were matters of transcendental importance. In Agan,Jr. V. PIATCO, the Court held that petitioners have legal standing as they have a direct and substantial interest to protect. By the implementation of the PIATCO contracts, they stand to lose their source of livelihood, a property right zealously protected by the Constitution and such financial prejudice on their part is sufficient to confer upon them the requisite locus standi. In Information Technology Foundation V. COMELEC, there were two reasons why petitioners’ standing was recognized — (1) the award for the automation of the electoral process was a matter of public concern, imbued with public interest, and (2) the individual petitioners, as taxpayers, asserted a material interest in seeing to it that public funds are properly used. Representative parties Where the action is allowed to be prosecuted or defended by a representative or someone acting in a fiduciary capacity, the beneficiary shall be included in the title of the case and shall be deemed to be the real party in interest. A representative may be (1) a trustee of an express trust, (2) a guardian, (3) an executor or administrator, or (4) a party authorized by law or these Rules. An agent acting in his own name and for the benefit of an undisclosed principal may sue or be sued without joining the principal except when the contract involves things belonging to the principal. (Sec. 3, Rule 3) OPOSA v. FACTORAN (224 SCRA 792, 1993) Petitioners’ personality to sue in behalf of the succeeding generations can only be based on the concept of intergenerational responsibility insofar as the right to a balanced and healthful ecology is concerned, since the subject matter of the complaint is of common and general interest to all citizens of the Philippines.

SJS ‘13 – Comprehensive Reviewer

Page 20

FACTS: The petitioners, all minors, sought the help of the Supreme Court to order the respondent, then Secretary of DENR, to cancel all existing Timber License Agreement (TLA) in the country and to cease and desist from receiving, accepting, processing, renewing or approving new TLAs. They alleged that the massive commercial logging in the country is causing vast abuses on rainforest. They furthered the rights of their generation and the rights of the generations yet unborn to a balanced and healthful ecology. ISSUE: Whether or not the petitioners have a locus standi YES. Locus standi means the right of the litigant to act or to be heard. Under Section 16, Article II of the 1987 constitution: “The state shall protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of nature.” Petitioners, minors assert that they represent their generation as well as generation yet unborn. We find no difficulty in ruling that they can, for themselves, for others of their generation and for the succeeding generations, file a class suit. Their personality to sue in behalf of the succeeding generations can only be based on the concept of intergenerational responsibility insofar as the right to a balanced and healthful ecology is concerned. Such a right, as hereinafter expounded considers the “rhythm and harmony of nature”. Nature means the created world in its entirety. Such rhythm and harmony indispensably include, inter alia, the judicious disposition, utilization, management, renewal and conservation of the country’s forest, mineral, land, waters fisheries, wildlife, off- shore areas and other natural resources to the end that their exploration, development and utilization be equitably accessible to the present as well as future generations. Needless to say, every generation has a responsibility to the next to preserve that rhythm and harmony for the full enjoyment of a balanced and healthful ecology. Put a little differently, the minor’s assertion of their right to a sound environment constitutes, at the same time, the performance of their obligation to ensure the protection of that right for the generations to come. This landmark case has been ruled as a class suit because the subject matter of the complaint is of common and general interest, not just for several but for all citizens of the Philippines. Indispensable parties An indispensable party is a party in interest without whom no final determination can be had of an action. (1) They shall be joined either as plaintiffs or defendants. (Sec. 7, Rule 3) (2) The presence of all indispensable parties is a condition sine qua non for the exercise of judicial power. (3) When an indispensable party is not before the court, the action should

be

dismissed.

NOTE: The failure to join an indispensable party does not result in the outright dismissal of the action. Non-joinder or misjoinder of parties is not a ground for dismissal of an action.  It is when the order of the court to implead the indispensable party goes unheeded may the case be dismissed. (4) Remedy: Parties may be dropped or added by the court on motion of any party, or on its own initiative at any stage of the action and on such terms as are just. (Sec. 11, Rule 3) DOMINGO v. SCHEER (421 SCRA 792, 1993) The joinder of indispensable parties under Sec 7, Rule 3 is mandatory. Without presence of indispensable parties to the suit, the judgment of the court cannot attain real finality. Strangers to a case are not bound by the judgment rendered by the court. The absence of an indispensable party renders all subsequent actions of the court null and void. There is a lack of authority to act not only as to the absent party but also as to those present. The responsibility of impleading all the indispensable parties rest on the petitioner/plaintiff. However, the non-joinder of indispensable parties is not a ground for dismissal FACTS: Vice Consul Jutta Hippelein informed the Philippine Ambassador to Bonn, Germany that respondent Emil Scheer had police records and financial liabilities in Germany. The Board of Commissioners (BOC) therefore cancelled respondent’s permanent residence visa, and ordered his summary deportation and permanent exclusion from the Philippines and inclusion of his name on the Bureaus Blacklist. Respondent filed an Urgent Motion for Reconsideration of the order, but the BOC did not resolve the respondent’s motion. The respondent was neither arrested nor deported. Meanwhile, the District Court of Straubing dismissed the criminal case against the respondent for physical injuries. The German Embassy in Manila, thereafter, issued a temporary passport to the respondent. Respondent informed Commissioner Verceles that his passport had been renewed following the dismissal of the said criminal case. He reiterated his request for the cancellation of the Summary Deportation Order and the restoration of his permanent resident status. The BOC still failed to resolve the respondents Urgent Motion for Reconsideration. In the meantime, petitioner Immigration Commissioner Andrea T. Domingo assumed office, and inquired with German Embassy if the respondent was wanted by the German police. The German Embassy replied in the negative. At about midnight on June 6, 2002, Marine operatives and Bureau of Immigration and Deportation (BID) agents apprehended the respondent in his residence on orders of the petitioner and was held in custody in the BID Manila Office while awaiting his deportation.

SJS ‘13 – Comprehensive Reviewer

Page 21

Respondent’s counsel filed with the BID a motion for bail to secure the respondents temporary liberty and filed with the Court of Appeals a petition for certiorari, prohibition and mandamus with a prayer for temporary restraining order and writ of preliminary injunction, to enjoin the petitioner from proceeding with the respondent’s deportation. The CA issued a TRO. Petitioner argues that the respondent’s petition with the CA should have been dismissed for failure to implead the real party-ininterest, which is the BOC. ISSUE: Whether the BOC was an indispensable party to the petition YES. The BOC was an indispensable party to the petition, BUT the non-joinder of indispensable parties is not a ground for dismissal of the action. The respondent was arrested and detained on the basis of the Summary Deportation Order of the BOC. The petitioner caused the arrest of the respondent in obedience to the said Deportation Order. The respondent, in his Memorandum, prayed that the CA annul not only the Summary Deportation Order of the BOC but also the latter’s Omnibus Resolution, and order the respondent’s immediate release. The respondent also prayed that the CA issue a writ of mandamus for the immediate resolution of his Urgent Motion for Reconsideration. The said motion had to be resolved by the BOC as the order sought to be resolved and reconsidered was issued by it and not by the petitioner alone. The powers and duties of the BOC may not be exercised by the individual members of the Commission. The joinder of indispensable parties is mandatory. Without the presence of indispensable parties to the suit, the judgment of the court cannot attain real finality. Strangers to a case are not bound by the judgment rendered by the court. The absence of an indispensable party renders all subsequent actions of the court null and void. Lack of authority to act not only of the absent party but also as to those present. The responsibility of impleading all the indispensable parties rests on the petitioner/plaintiff. However, the non-joinder of indispensable parties is not a ground for the dismissal of an action. Parties may be added by order of the court on motion of the party or on its own initiative at any stage of the action and/or such times as are just. If the petitioner/plaintiff refuses to implead an indispensable party despite the order of the court, the latter may dismiss the complaint/petition for the petitioner/plaintiffs failure to comply therefor. The remedy is to implead the non-party claimed to be indispensable. The Court may be curing the defect in this case by adding the BOC as party petitioner. Indeed, it may no longer be necessary to do so taking into account the unique backdrop in this case, involving as it does an issue of public interest. After all, the Office of the solicitor General has represented the petitioner in the instant proceedings, as well as the appellate court, and maintained the validity of the deportation order and of the BOC’s Omnibus Resolution. It cannot, thus, be claimed by the State that the BOC was not afforded its day in court, simply because only the petitioner, the chairperson of the BOC, was the respondent in the CA, and the petitioner in the instant recourse. UY v. CA (494 SCRA 535, 2006) An indispensable party is one whose interest will be affected by the court's action in the litigation, and without whom no final determination of the case can be had. The party's interest in the subject matter of the suit and in the relief sought are so inextricably intertwined with the other parties' that his legal presence as a party to the proceeding is an absolute necessity. FACTS: The Heritage Memorial Park is a flagship project of the Bases Conversion Development Authority (BCDA) in Fort Bonifacio. To implement the project, the BCDA entered into Pool Formation Trust Agreement (PFTA) with the PNB and the PEA. BCDA was designated as Project Owner; PEA, the Project Manager; and PNB as the Trustee. PEA, as project manager, is tasked to implement and complete the various engineering works and improvements of Heritage Park. PEA and petitioner Uy, a single proprietorship doing business under the name of Edison Development and Construction, executed a Landscaping and Construction Agreement whereby the petitioner undertook to do all the landscaping, including the construction of a terrasoleum of the Heritage Park. Subsequently, the certificate holders of the project organized themselves into a non-stock, non-profit corporation, the Heritage Park Management Corporation (HPMC), now the private respondent herein. The Heritage Park Executive Committee, however, terminated the construction contracts due to delays and discrepancies. PEA then assumed the duties of the terminated party. Petitioner filed a complaint against the PEA before the Construction Industry Arbitration Commission (CIAC) where it sought to recover payment for its progress billings on the said projects. CIAC ruled in favor of petitioner. Respondent appealed to the CA on the ground that CIAC had no jurisdiction over the subject matter since HPMC was not impleaded as a party, thereby depriving it of its right to be heard. CA ruled in favor of respondent. Hence this petition ISSUE: Whether HPMC is a real party in interest or an indispensable party YES. An indispensable party is one whose interest will be affected by the court's action in the litigation, and without whom no final determination of the case can be had. The party's interest in the subject matter of the suit and in the relief sought are so inextricably intertwined with the other parties' that his legal presence as a party to the proceeding is an absolute necessity. Based on the Construction Agreement, PEA entered into it in its capacity as Project Manager, pursuant to the PFTA. According to the provisions of the PFTA, upon the formation of the HPMC, the PEA would turn over to the HPMC all the contracts relating to the Heritage Park. At the time of the filing of the CIAC Case, PEA ceased to be the Project Manager. Through a Deed of SJS ‘13 – Comprehensive Reviewer

Page 22

Assignment, PEA assigned its interests in all the existing contracts it entered into as the Project Manager for Heritage Park to HPMC. PEA officially turned over to HPMC all the documents and equipment in its possession related to the Heritage Park Project, and petitioner was duly informed of these incidents. Apparently, as of the date of the filing of the CIAC Case, PEA is no longer a party-in-interest. Instead, it is now private respondent HPMC, as the assignee, who stands to be benefited or injured by the judgment in the suit. In its absence, there cannot be a resolution of the dispute of the parties before the court which is effective, complete or equitable. Necessary party or proper party A necessary party is not indispensable to the action since a final determination of the case can be had even when a necessary party is not joined. BUT a necessary party ought to be joined if complete relief is to be accorded to those already parties. (Sec. 8, Rule 3) Non-joinder of necessary party Whenever in any pleading in which a claim is asserted a necessary party is not joined, the pleader shall set forth (1) his name, if known, and (2) shall state why he is omitted. Should the court find the reason for the omission unmeritorious, it may order the inclusion of the omitted necessary party if jurisdiction over his person may be obtained. (Sec. 9, Rule 3) LAPERAL DEV’T. CORP. v. CA (223 SCRA 261, 1993) A proper party is one which ought to be a party if complete relief is to be accorded as between those already parties. A party is indispensable if no final determination can be had of an action unless it is joined either as plaintiff or defendant. FACTS: Atty. Banzon sought to recover attorney’s fees for professional services rendered in several pending and past cases from Laperal, Laperal Dev’t Corp., and Imperial Dev’t Corp., referring to Sunbeams Inc. only as “Mr. Laperal’s Corporation.” This particular civil case was decided on the basis of a Compromise Agreement where Banzon waived all other money claims against the defendants. Subsequently, Banzon filed a complaint against Laperal, Laperal Dev’t, Imperial Dev’t, Sunbeams Convenience Foods, Inc., and Acsay for (1) annulment of a portion of the Compromise Agreement; (2) collection of attorney’s fees for services in the cases rendered for Imperial, Sunbeams, and Laperal Dev’t.; (3) recovery of P10k adjudged to be payable to him as attorney’s fees by Ascario Tuason; and (4) payment to him of nominal damages and attorney’s fees. RTC dismissed the case on the ground that it had no jurisdiction to annul the Compromise Agreement, as approved by an equal and coordinate court. It held that the issue was cognizable by the CA. Moreover, it was held that the Compromise Agreement already covered the plaintiff’s professional services in the questioned cases. The CA affirmed the RTC on the issue of jurisdiction, but held Atty. Banzon entitled to attorney’s fees from Sunbeams Inc. since it was not subject to the compromise agreement which waived all money claims against defendants named therein, having been referred to only as “Mr. Laperal’s corporation.” ISSUE: Whether Sunbeams Inc., is liable to pay attorneys fees NO. Sunbeams Inc., which was referred to in the complaint as “Mr. Laperal’s Corp.” was not named as a party defendant. The private respondent believed that Laperal, being the President of the said company, was directly obligated to him for attorney’s fees due him for his handling of the case for Sunbeams. However, there is no evidence that Sunbeams and Laperal are one and the same person. Sunbeams should have been joined as party defendant in order that the judgment of the lower court could legally affect it. But even if it was not impleaded, the court could still validly proceed with the case because Sunbeams was not an indispensable party but only a proper party. A proper party is one which ought to be a party if complete relief is to be accorded as between those already parties. A party is indispensable if no final determination can be had of an action unless it is joined either as plaintiff or defendant. The Compromise Agreement upon which the decision of the court was based was between plaintiff Atty. Banzon and the defendants represented by Laperal. Thus, since Sunbeams was not a party to this agreement, it could not be affected by it. However, Banzon’s claim for attorney’s fees pertaining to Sunbeams was waived by him not by virtue of the Compromise Agreement, whereby Sunbeams was not a defendant. What militates against his claim is his own judicial admission that he had waived his attorney’s fees for the cases he had handled from 1974-1981 for Laperal and his corporations, including those not impleaded in his complaint. Permissive joinder of parties Parties may be joined in as plaintiffs or defendants in a single complaint when (1) Any right to relief arises out of the same transaction or series of transactions; (2) There is a question of law or fact common to all such plaintiffs or to all such defendants; (3) Such joinder is not otherwise proscribed by the Rules on jurisdiction and venue. BUT the court may make such orders as may be just to prevent any plaintiff or defendant from being embarrassed or put to expense in connection with any proceedings in which he may have no interest. (Sec. 6, Rule 3) Effects of misjoinder and non-joinder of parties A party is misjoined when he is made a party to the action although he should not be impleaded. SJS ‘13 – Comprehensive Reviewer

Page 23

A party is not joined when is supposed to be joined but is not impleaded in the actions. Neither misjoinder nor non-joinder of parties is a ground for dismissal. Parties may be dropped or added by order of the court (1) on motion of any party or on its own initiative (2) at any stage of the action and (3) on such terms as are just. Any claim against a misjoined party may be severed and proceeded with separately. (Sec. 11, Rule 3) NOTE: Failure to obey the order of the court to drop or add a party is a ground for the dismissal of the complaint. (Sec. 3, Rule 17) Class suits A class suit is an action where one or more may sue for the benefit of all.  An action does not become a class suit merely because it is designated as such in the pleadings. It depends upon the attendant facts. Requisites (1) The subject matter of the controversy is one of the common or general interest to many persons (2) The persons are so numerous that it is impracticable to join all as parties, (3) The parties bringing the class suit are sufficiently numerous and representative as to fully protect the interests of all concerned. (4) The representative sues or defends for the benefit of all. NOTE: Any party in interest shall have the right to intervene to protect his individual interest. (Sec. 12, Rule 3) MATHAY v. CONSOLIDATED BANK (58 SCRA 559, 1974) Requirements of a class suit: 1. That the subject matter of the controversy be one of common or general interest to many persons, and 2. That such persons be so numerous as to make it impracticable to bring them all to the court. FACTS: Mathay, Reyes and Dionisio, plaintiffs-appellants and stockholders in the Consolidated Mines, Inc. (CMI) alleged that the latter passed a resolution to organize Consolidated Bank & Trust Co. (CBTC), providing that all CMI stockholders are entitled to subscribe to the capital stock of the proposed bank at par value, and to the same extent and amount as their shareholdings in CMI. Circular letters with Pre-Incorporation Agreements to subscribe were sent to CMI stockholders. Plaintiffs-apellants and other stockholders accomplished and filed their respective pre-incorporation agreements and paid the subscription. However, after some months, the Board of Organizers executed the Articles of Incorporation of the CBTC which reflected that only the six (6) individual defendants paid and subscribed to the initial 50,000 shares. When the paid-in capital stock was increased, the plaintiffappellants and other CMI stockholders were again excluded. The plaintiffs-appellants filed this complaint as a class suit to annul and transfer the subscription and shareholdings of the defendants to them and other stockholders who had been denied the right to subscribe. They alleged as well that some of the defendants falsely certified to the calling of a special stockholders' meeting, when plaintiffs-appellants and other CMI stockholders were not notified thereof. Further, the defendants increased the number of Directors, illegally creating the Position of Director filled up by a defendant, who was incompetent. Sevilla, one of the original plaintiffs, withdrew. Four CMI stockholders filed a motion to intervene, and to join the plaintiffs-appellants on record, Defendants filed a motion to dismiss on the ground that the plaintiffs had no legal standing or capacity to institute the alleged class suit. Some subscribers to the capital stock of the Bank filed separate manifestations that they were opposing and disauthorizing the suit of plaintiffs-appellants. The defendants-appellee filed a supplemental ground for their motion to dismiss for the reason that the stockholders who had abstained at their regular annual meeting unanimously ratified and confirmed all the actuations of the organizers. CFI granted the motion to dismiss, hence the appeal. ISSUE: Whether the instant action could be maintained as a class suit NO. An action does not become a class suit merely because it is designated as such in the pleadings. Whether the suit is or is not a class quit depends upon the attending facts, and the complaint, or other pleading initiating the class action should allege the existence of the necessary facts, to wit, the existence of a subject matter of common interest, and the existence of a class and the number of persons in the alleged class, in order that the court might be enabled to determine whether the members of the class are so numerous as to make it impracticable to bring them all before the court, to contrast the number appearing on the record with the number in the class and to determine whether claimants on record adequately represent the class and the subject matter of general or common interest. The complaint in the instant case explicitly declared that the plaintiffs- appellants instituted the "present class suit under Section 12, Rule 3, of the Rules of Court in. behalf of CMI subscribing stockholders" but did not state the number of said CMI subscribing stockholders so that the trial court could not infer, much less make sure as explicitly required by the sufficiently numerous and representative in order that all statutory provision. SJS ‘13 – Comprehensive Reviewer

Page 24

The interest that ppellants, plaintiffs and intervenors, and the CMI stockholders had in the subject matter of this suit — the portion of stocks offering of the Bank left unsubscribed by CMI stockholders who failed to exercise their right to subscribe on or before January 15, 1963 — was several, not common or general in the sense required by the statute. Each one of the appellants and the CMI stockholders had determinable interest; each one had a right, if any, only to his respective portion of the stocks. No one of them had any right to, or any interest in, the stock to which another was entitled. Even if it be assumed, for the sake of argument, that the appellants and the CMI stockholders suffered wrongs that had been committed by similar means and even pursuant to a single plan of the Interim Board of Organizers of the Bank, the wrong suffered by each of them would constitute a wrong separate from those suffered by the other stockholders, and those wrongs alone would not create that common or general interest in the subject matter of the controversy as would entitle any one of them to bring a class suit on behalf of the others. The right to preemption, it has been said, is personal to each stockholder. By analogy, the right of each of the appellants to subscribe to the waived stocks was personal, and no one of them could maintain on behalf of others similarly situated a representative suit. Defendants (1) Unwilling co-plaintiff An unwilling co-plaintiff is a party who is supposed to be a plaintiff but whose consent to be joined as a plaintiff cannot be obtained, as when he refuses to be a party to the action. In that case, (1) he may be made a defendant and (2) the reason therefor shall be stated in the complaint. (Sec. 10, Rule 3) (2) Alternative defendant Where the plaintiff is uncertain against who of several persons he is entitled to relief, he may join any or all of them as defendants in the alternative, although a right to relief against one may be inconsistent with a right of relief against the other. (Sec. 13, Rule 3) Example: A pedestrian injured in the collision of two vehicles may sue the vehicle owners or drivers in the alternative if he is uncertain whose vehicle caused the injury. (3) Unknown defendant Whenever the identity or name of a defendant is unknown, he may be sued (1) as the unknown owner, heir, devisee, or (2) by such other designation as the case may require; When his identity or true name is discovered, the pleading must be amended accordingly. (Sec. 14, Rule 3) Service Service time as (1) (2)

upon defendant whose identity or whereabouts are unknown. may, by leave of court, be effected by publication in a newspaper of general circulation and in such places and for such the court may order in any action where the defendant is designated as an unknown owner, or the like, or whenever his whereabouts are unknown and cannot be ascertained by diligent inquiry. (Sec. 14, Rule 14)

(4) Entity without juridical personality as defendant When two or more persons not organized as an entity with juridical personality enter into a transaction, they may be sued under the name by which they are generally or commonly known. In the answer of such defendant the names and addresses of the persons composing said entity must all be revealed. (Sec. 15, Rule 3) Service upon entity without juridical personality.— Service may be effected upon all the defendants by serving upon (1) any one of them, or (2) upon the person in charge of the office or place of business maintained in such name. BUT such service shall not bind individually any person whose connection with the entity has, upon due notice, been severed before the action was brought. (Sec. 8, Rule 14) Death of party; duty of counsel (1) If plaintiff dies during pendency of the case Whenever a party to a pending action dies, and the claim is not thereby extinguished, it shall be the duty of his counsel (1) to inform the court within thirty (30) days after such death of the fact thereof, and (2) to give the name and address of his legal representative or representatives. NOTE: This duty is mandatory. Failure of counsel to comply with this duty shall be a ground for disciplinary action. Upon notice of death, action of court Upon receipt of notice of death, the court shall determine whether the claim is extinguished by the death. If the claim does not survive, the court shall dismiss the case. If the claim survives, substitution SJS ‘13 – Comprehensive Reviewer

Page 25

The court shall forthwith order said legal representative or representatives to appear and be substituted within a period of thirty (30) days from notice.  The heirs of the deceased may be allowed to be substituted for the deceased, without requiring the appointment of an executor or administrator and the court may appoint a guardian ad litem for the minor heirs. NOTE: The heirs do not need to first secure the appointment of an administrator.  The court may order the opposing party, within a specified time, to procure the appointment of an executor or administrator for the estate of the deceased if: i. no legal representative is named by the counsel for the deceased party or ii. if the one so named shall fail to appear within the specified period, The latter shall immediately appear for and on behalf of the deceased. The court charges in procuring such appointment, if defrayed by the opposing party, may be recovered as costs. (Sec. 16, Rule 3) Examples of actions which survive the party’s death  Actions arising from delict  Actions based on tortuous conduct of the defendant  Actions to recover real and personal property  Actions to enforce a lien on property  Actions to quieting of title with damages  Ejectment case  Actions for recovery of money (2) If defendant dies, effect of his death depends upon the nature of the pending action When action will not be dismissed The action will be allowed to continue until entry of final judgment when: i. the action is for recovery of money arising from contract, express or implied, and ii. the defendant dies before entry of final judgment in the court in which the action was pending at the time of such death A favorable judgment obtained by the plaintiff therein shall be enforced in the manner especially provided in these Rules for prosecuting claims against the estate of a deceased person. (Sec. 20, Rule 3) Effect of non-substitution of deceased party Non-compliance with the rules on substitution of a deceased party renders the proceedings of the trial court infirm because it acquired no jurisdiction over the person of the legal representative of heirs of the deceased.  However, in an ejectment case, non-substitution of the deceased does not deprive the court of jurisdiction (Florendo Jr. v. Colona) HEIRS OF BERTULDO HINOG v. MELICOR (455 SCRA 460, 2005) Non-compliance with the rule on substitution would render the proceedings and judgment of the trial court infirm because the court acquires no jurisdiction over the persons of the legal representatives or of the heirs on whom the trial and the judgment would be binding. FACTS: Respondents filed a complaint against Bertuldo for recovery of ownership of the premises leased by the latter. Bertuldo alleged ownership of the property by virtue of a Deed of Absolute Sale. Bertuldo died without completing his evidence during the direct examination. Atty. Petalcorin replaced the original counsel and filed a motion to expunge the complaint from the record and nullify all court proceedings on the ground that private respondents failed to specify in the complaint the amount of damages claimed as needed to pay the correct docket fees, and that under Manchester doctrine, non-payment of the correct docket fee is jurisdictional. ISSUE: Whether the proceedings in the trial court are infirm YES. No formal substitution of the parties was effected within thirty (30) days from date of death of Bertuldo, as required by Sec. 16, Rule 3 of the Rules of Court. Needless to stress, the purpose behind the rule on substitution is the protection of the right of every party to due process. It is to ensure that the deceased would continue to be properly represented in the suit through the duly appointed legal representative of his estate. Non-compliance with the rule on substitution would render the proceedings and judgment of the trial court infirm because the court acquires no jurisdiction over the persons of the legal representatives or of the heirs on whom the trial and the judgment would be binding. DE LA CRUZ v. JOAQUIN (464 SCRA 576, 2005)

SJS ‘13 – Comprehensive Reviewer

Page 26

When due process is not violated, as when the right of the representative or heir is recognized and protected, noncompliance or belated formal compliance with the Rules cannot affect the validity of a promulgated decision. Mere failure to substitute for a deceased plaintiff is not a sufficient ground to nullify a trial court's decision. The alleging party must prove that there was an undeniable violation of due process. FACTS: Pedro Joaquin alleged that he had obtained a P9,000 loan, payable after five (5) years, from petitioners, the spouses De la Cruz. To secure the payment of the obligation, he executed a Deed of Sale for a parcel of land in favor of petitioners. The parties also executed another document entitled Kasunduan which allegedly showed the Deed of Sale to be actually an equitable mortgage. Spouses De la Cruz contended that this document was merely an accommodation to allow the repurchase of the property, a right that he failed to exercise. The RTC issued a Decision in Joaquin’s favor, declaring that the parties had entered into a sale with a right of repurchase. It held that respondent had made a valid tender of payment on two separate occasions to exercise his right of repurchase. Accordingly, petitioners were required to reconvey the property upon his payment. CA sustained the ruling of the trial court, and denied reconsideration. It further ordered the substitution by legal representatives, in view of Joaquin’s death. Petitioner’s assert the RTC lacked jurisdiction since the respondent died during the pendency of the case and no substitution was made.

ISSUES: Whether the trial court lost jurisdiction over the case upon the death of Pedro Joaquin NO. Strictly speaking, the rule on the substitution by heirs is not a matter of jurisdiction, but a requirement of due process. Thus, when due process is not violated, as when the right of the representative or heir is recognized and protected, noncompliance or belated formal compliance with the Rules cannot affect the validity of a promulgated decision. Mere failure to substitute for a deceased plaintiff is not a sufficient ground to nullify a trial court's decision. The alleging party must prove that there was an undeniable violation of due process. The records of the present case contain a Motion for Substitution of Party Plaintiff filed before the CA. It was deemed granted and the heirs, to have substituted for the deceased, Pedro Joaquin. There being no violation of due process, the issue of substitution cannot be held as a ground of nullify the court’s decision. LIMBAUAN v. ACOSTA (2006) The instant action for unlawful detainer, like any action for recovery of real property, is a real action and as such survives the death of Faustino Acosta.

FACTS: Faustino Acosta took possession of a parcel of government land which was originally intended to be used as a site for a leprosarium. He subsequently registered the land and built a fence around it. Paulino Calanday intruded upon Acosta’s land without the former’s permission and built a beerhouse on it. Acosta remonstrated so Calanday filed a criminal case for Unjust Vexation and Malicious Mischief; it was however, dismissed. Calanday then conveyed the beerhouse to Juanita Roces who agreed to pay a P60 monthly rental to Acosta. She then conveyed the premises to Charles Limbauan, petitioner in the present case. A few months later, petitioner stopped paying rentals so respondent filed a case for unlawful detainer against respondent. Petitioner reasoned that since the land belonged to the government, respondent had no right to collect rentals therefrom. Hence the suit was never continued. Eight years later, the government converted the parcel of land in which the premises in dispute are included into residential land. Respondent then revived his previous suit of unlawful detainer against petitioner. Unfortunately, Acosta died while the case was still on appeal to the CA. Petitioner avers that the case has become moot and academic since he was not informed of the death of respondent and no proper substitution of parties was instituted. ISSUE: Whether the case has become moot and academic due to the death of respondent and the failure to substitute his heirs as parties to the case NO. It is well settled that the failure of counsel to comply with his duty under Section 16 to inform the court of the death of his client and no substitution of such party is effected, will not invalidate the proceedings and the judgment thereon if the action survives the death of such party. Moreover, the decision rendered shall bind his successor-in-interest. The instant action for unlawful detainer, like any action for recovery of real property, is a real action and as such survives the death of Faustino Acosta. His heirs have taken his place and now represent his interests in the instant petition. Hence, the present case cannot be rendered moot despite the death of respondent. Death or separation of party who is a public officer An action may be continued by or against the successor of the deceased public officer when (1) a public officer is a party in an action in his official capacity and (2) dies, resigns, or otherwise ceases to hold office during its pendency, (3) it is shown within thirty (30) days after the successor takes office or such time as the court may grant, that there is a substantial need for continuing or maintaining the action, and that (4) the successor adopts or continues or threatens to adopt or continue the action of his predecessor. SJS ‘13 – Comprehensive Reviewer

Page 27

(5) the party or officer to be affected, unless expressly assenting thereto, has been given reasonable notice of the application therefor and accorded an opportunity to be heard. (Sec. 17, Rule 3) Incompetency or incapacity If a party becomes incompetent or incapacitated, the court,  upon motion  with notice, may allow the action to be continued by or against the incompetent or incapacitated person assisted by his legal guardian or guardian ad litem. (Sec. 18, Rule 3) Transfer of interest In case of any transfer of interest, the action may be continued by or against the original party, unless the court upon motion directs the person to whom the interest is transferred (1) to be substituted in the action or (2) joined with the original party. (Sec. 19, Rule 3) Indigent party A party may be authorized to litigate his action, claim or defense as an indigent if the court,  upon an ex parte application  and hearing, is satisfied that the party is one who has no money or property sufficient and available for food, shelter and basic necessities for himself and his family. Such authority shall include (1) an exemption from payment of docket and other lawful fees, and (2) of transcripts of stenographic notes which the court may order to be furnished him. The amount of the docket and other lawful fees which the indigent was exempted from paying shall be a lien on any judgment rendered in the case favorable to the indigent, unless the court otherwise provides. Any adverse party may contest the grant of such authority at any time before judgment is rendered by the trial court. If the court should determine after hearing that the party declared as an indigent is in fact a person with sufficient income or property, the proper docket and other lawful fees shall be assessed and collected by the clerk of court. If the payment is not made within the time fixed by the court, execution shall issue or the payment thereof, without prejudice to such other sanctions as the court may impose. (Sec. 21, Rule 3) Notice to Solicitor General The court, in its discretion, may require the appearance of the Solicitor General in any action involving the validity of any (1) treaty, (2) law, (3) ordinance, (4) executive order, (5) presidential decree, (6) rules (7) or regulations, He may be heard in person or through a representative duly designated by him. (Sec. 22, Rule 3) NOTE: Actions filed in the name of the Republic or its agencies and instrumentalities, if not initiated by the Solicitor General shall be summarily dismissed.

VENUE OF ACTIONS (RULE 4) Venue defined Venue is the place or the geographical area where an action is to be filed and tried. It relates only to the place of the suit and not to the jurisdiction of the court.  Venue becomes jurisdiction only in a criminal case.  The parties can waive the venue of a case. Distinguished from jurisdiction VENUE The place where the case is to be heard or tried A matter of procedural law Establishes a relation between plaintiff and defendant, or petitioner

JURISDICTION The authority to hear and determine a case Matter of substantive law Establishes a relation between the court and the subject matter

SJS ‘13 – Comprehensive Reviewer

Page 28

and respondent May be conferred by the act or agreement of the parties Not a ground for motu proprio dismissal, except in summary procedure

Fixed by law and cannot be conferred by agreement of the parties Lack of jurisdiction over the subject matter is a ground for a motu proprio dismissal

Venue of real actions Real action—action affecting title to or possession of real property, or interest therein. Real actions shall be commenced and tried in the proper court which has jurisdiction over the area wherein the real property involved, or a portion thereof, is situated. Forcible entry and detainer actions shall be commenced and tried in the municipal trial court of the municipality or city wherein the real property involved, or a portion thereof, is situated. (Sec. 1, Rule 4) Venue of personal actions Personal actions may be commenced and tried where the plaintiff or any of the principal plaintiffs, or where the defendant or any of the principal defendants resides, at the election of the plaintiff. In the case of a non-resident defendant it may be commenced and tried where he may be found, at the election of the plaintiff. (Sec. 2, Rule 4) Venue of actions against non-residents If any of the defendants (1) does not reside and is not found in the Philippines, and (2) the action affects the personal status of the plaintiff, or any property of said defendant located in the Philippines, the action may be commenced and tried in the court of the place  where the plaintiff resides, or  where the property or any portion thereof is situated or found. Quasi in rem Actions which affect the personal status of the plaintiff are to be filed at the residence of the plaintiff. In rem Actions affecting the property of the defendant in the Philippines shall be filed where the property is located. When rule not applicable This Rule shall not apply— (a) In those cases where a specific rule or law provides otherwise; or (b) Where the parties have validly agreed in writing before the filing of the action on the exclusive venue thereof. (Sec. 4, Rule 4) (a) Where a specific rule or law provides otherwise DIAZ v. ADIONG (219 SCRA 631, 1993)

An offended party who is at the same time a public official can only institute an action arising from libel in 2 venues: (1) the place where he holds office; or (2) the place where the alleged libelous articles were printed and first published Venue in an action arising from libel is only mandatory if it is not waived by defendant. Thus, objections to venue in civil actions arising from libel may be waived; it does not, after all, involve a FACTS: The Mindanao Kris, a newspaper of general circulation in Cotabato City, published in its front page the news article captioned “6-Point Complaint Filed vs. Macumbal,” and in its Publisher’s Notes the editorial, “Toll of Corruption,” which exposed alleged anomalies by key officials in the Regional Office of the DENR. Subsequently, the public officers alluded to instituted separate criminal and civil complaints in the City Prosecutor’s Office and RTC in Marawi City. Diaz, publisher-editor, and Pagandaman, who executed a sworn statement attesting the alleged corruption were named respondents. The City Prosecutor’s Office dismissed the criminal case. SJS ‘13 – Comprehensive Reviewer

Page 29

Thereafter, a civil complaint for damages was filed. Diaz filed an answer, then later moved for the dismissal of the action for damages on the ground that the trial court did not have jurisdiction over the subject matter. He vehemently argued that the complaint should have been filed in Cotabato City and not in Marawi City. The respondent judge denied petitioner’s Motion to Dismiss for lack of merit. ISSUE: Whether the venue was improperly laid NO, petitioner is not correct. Petition is dismissed for lack of merit. The case is remanded to the court of origin for further proceedings. Not one of the respondents held office in Cotabato City nor they held their principal office in that province. It is clear that an offended party who is at the same time a public official can only institute an action arising from libel in 2 venues: (1) the place where he holds office; or (2) the place where the alleged libelous articles were printed and first published. (Art. 360, RPC) Venue was indeed improperly laid. However, unless and until the defendant objects to the venue in a motion to dismiss prior to a responsive pleading, the venue in a motion to dismiss cannot truly be said to have been improperly laid since, for all practical intents and purposes, the venue though technically wrong may yet be considered acceptable to the parties for whose convenience the rules on venue had been devised. Diaz, then, as defendant should have timely challenged the venue laid in Marawi City in a motion to dismiss, pursuant to Rule 4, Sec. 4, of the Rules of Court. Unfortunately, he had already submitted himself to the jurisdiction of trial court when he filed his Answer. Well-settled is the rule that improper venue may be waived and such waiver may occur by laches. Moreover, venue in an action arising from libel is only mandatory if it is not waived by defendant. Thus, objections to venue in civil actions arising from libel may be waived; it does not, after all, involve a question of jurisdiction. The laying of venue is procedural rather than substantive, relating as it does to jurisdiction of the court over the person rather than the subject matter. Venue relates to trial and not jurisdiction. Furthermore, Rule 16, Sec. 1, provides that objections to improper venue must be made in a motion to dismiss before any responsive pleading is filed. Responsive pleadings are those which seek affirmative relief and set up defenses. Having already submitted his person to the jurisdiction of the court, petitioner may no longer object to the venue which, although mandatory in the instant case, is nevertheless waivable. As such, improper venue must be seasonably raised. Otherwise, it may be deemed waived. (b) Where parties have validly agreed in writing on the exclusive venue thereof before the filing of the action The parties may agree on a specific venue which could be in a place where neither of them resides, as long as the agreement is: (1) In writing; (2) Made before the filing of the action; and (3) Exclusive as to the venue. LEGASPI v. REPUBLIC (559 SCRA 410, 2008)

It must be shown that such stipulation as to venue is exclusive. In the absence of qualifying or restrictive words, such as "exclusively," "waiving for this purpose any other venue," "shall only" preceding the designation of venue, "to the exclusion of the other courts," or words of similar import, the stipulation should be deemed as merely an agreement on an additional forum, not as limiting venue to the specified FACTS: Jesusito D. Legaspi, as owner and manager of petitioner J.D. Legaspi Construction, entered into a Construction Agreement with respondent Social Security System (SSS) for the construction of a four-storey building in Baguio City which will serve as respondent's branch office. The Philippine peso collapsed as against the U.S. Dollar in 1997, thus the cost of imported materials which petitioner contracted to use and install on the project shot up, and petitioner incurred expenses more than the original contract price. Petitioner had several meetings with respondent's representatives during which he informed them of his difficulty in meeting his obligations under the contract due to the peso devaluation. After several failed meetings, petitioner sent a letter to respondent requesting an adjustment in the contract price, which was denied by respondent. Hence, petitioner filed a civil action with the RTC. Instead of filing an answer, respondent, represented by the OSG, filed a Motion to Dismiss on the grounds that venue was improperly laid and petitioner had no cause of action. It was respondent's argument that the Construction Agreement provided that all actions may be brought before the proper court in Quezon City and that petitioner waived any other venue. The RTC denied respondent's Motion to Dismiss. Respondent moved to reconsider the Order but this was denied by the RTC. The petition for certiorari with the Court of Appeals was granted. Hence, the present petition for review on certiorari under Rule 45 of the Rules of Court. ISSUE: Whether the stipulation as to venue in this case is controlling YES. As regards restrictive stipulations on venue, jurisprudence instructs that it must be shown that such stipulation is exclusive. In the absence of qualifying or restrictive words, such as "exclusively," "waiving for this purpose any other venue," "shall only" preceding the designation of venue, "to the exclusion of the other courts," or words of similar import, the stipulation should be deemed as merely an agreement on an additional forum, not as limiting venue to the specified place. In the Construction Agreement, petitioner agreed to file any action in Quezon City “expressly waiving any other venue.” This connotes exclusivity of the designated venue. The terms clearly stipulate exclusively the venue where actions arising from the Construction Agreement should be filed. SJS ‘13 – Comprehensive Reviewer

Page 30

Petitioner, however, contends that the case does not arise from the Construction Agreement; hence, it may be filed in Makati City, which is his place of residence. Contrary to petitioner's contention, the allegations in his complaint indubitably show that his cause of action arose from the Construction Agreement.

Waiver of improper venue (1) Express waiver Made through written agreement (2) Implied waiver Made through failure to seasonably object to improper venue in a motion to dismiss or in the answer DACOYCOY v. IAC (195 SCRA 641, 1993)

Where defendant fails to challenge timely the venue in a motion to dismiss as provided by Section 4 of Rule 4 of the Rules of Court, and allows the trial to be held and a decision to be rendered, he cannot on appeal or in a special action be permitted to challenge belatedly the wrong venue, which is deemed waived. FACTS: Petitioner Jesus Dacoycoy, filed before the RTC, Antipolo, Rizal, a complaint against private respondent Rufino de Guzman for the annulment of two deeds of sale involving a parcel of riceland situated in Barrio Estanza, Lingayen, Pangasinan, the surrender of the produce thereof, and damages due to private respondent's refusal to have said deeds of sale set aside upon petitioner's demand. Before summons could be served on private respondent as defendant therein, the RTC issued an order requiring counsel for petitioner to confer with respondent trial judge on the matter of venue. After said conference, the trial court dismissed the complaint on the ground of improper venue. It found, based on the allegations of the complaint, that petitioner's action is a real action as it sought not only the annulment of the deeds of sale but also the recovery of ownership of the subject parcel of riceland located in Estanza, Lingayen, Pangasinan, which is outside the territorial jurisdiction of the trial court. Petitioner appealed to the Intermediate Appellate Court, now Court of Appeals, which in its decision of April 11, 1986, affirmed the order of dismissal of his complaint. ISSUE: Whether or not the trial court can pre-empt the defendant’s prerogative to object to improper venue by motu propio dismissing the case NO. The motu proprio dismissal of petitioner's complaint by respondent trial court on the ground of improper venue is plain error, obviously attributable to its inability to distinguish between jurisdiction and venue. Venue is procedural rather than substantive. It relates to the jurisdiction of the court over the person rather than the subject matter. Provisions relating to venue establish a relation between the plaintiff and the defendant and not between the court and the subject matter. Venue relates to trial not to jurisdiction, touches more of the convenience of the parties rather than the substance of the case. Jurisdiction treats of the power of the court to decide a case on the merits; while venue deals on the locality, the place where the suit may be had. Dismissing the complaint on the ground of improper venue is certainly not the appropriate course of action at this stage of the proceeding, particularly as venue, in inferior courts as well as in the courts of first instance (now RTC), may be waived expressly or impliedly. Where defendant fails to challenge timely the venue in a motion to dismiss as provided by Section 4 of Rule 4 of the Rules of Court, and allows the trial to be held and a decision to be rendered, he cannot on appeal or in a special action be permitted to challenge belatedly the wrong venue, which is deemed waived. Indeed, it was grossly erroneous for the trial court to have taken a procedural short-cut by dismissing motu proprio the complaint on the ground of improper venue without first allowing the procedure outlined in the Rules of Court to take its proper course. How to question improper venue (1) Motion to dismiss— By filing a motion to dismiss before a responsive pleading (answer) on the ground of improper venue (Sec. 1[c], Rule 16) (2) Affirmative defense in answer— By impleading improper venue as an affirmative defense in the answer (Sec. 6, Rule 16)

PLEADINGS (Substantial Requirements) SJS ‘13 – Comprehensive Reviewer

Page 31

In general Pleadings defined Pleadings are the written statements of the respective claims and defenses of the parties submitted to the court for appropriate judgment. (Sec. 1, Rule 6)  Pleadings are not supposed to allege conclusions. It must only aver ultimate facts, or the facts essential to a party’s cause of action or defense.  Evidentiary matters are to be presented during the trial of the case, not in the pleadings. These and conclusions may be subject of a motion to strike.  All pleadings shall be liberally construed.  The intention of the pleader is the controlling factor in construing a pleading and should be read in accordance with its substance, not its form.  Parties are strictly by the allegations, statements or admissions made in his pleadings and cannot be permitted to take a contradictory position. Distinguished from motion A motion is an application for relief other than by a pleading. (Sec. 1, Rule 15) What allowed The claims of a party are asserted in a (1) complaint, (2) counterclaim, (3) cross-claim, (4) third (fourth, etc.)—party complaint, or (5) complaint-in-intervention. The defenses of a party are alleged in the answer to the pleading asserting a claim against him. An answer may be responded to by a reply. (Sec.2, Rule 6) Pleadings allowed under Summary Procedure The only pleadings under the Rules on Summary Procedure are: (1) complaint; (2) compulsory counterclaim; (3) cross-claim pleaded in the answer; and (4) answers. Pleadings not allowed in a petition for writ of amparo or habeas data The following are prohibited motions in the mentioned petitions: (1) counterclaim; (2) cross-claim; (3) third-party complaint; (4) reply; and (5) pleadings in intervention Parts of a pleading (1) Caption— The caption sets forth (1) The name of the court; (2) The title of the action; The title of the action indicates the names of the parties. They shall all be named in the original complaint or petition; but in subsequent pleadings, it shall be sufficient if the name of the first party on each side be stated with an appropriate indication when there are other parties. Their respective participation in the case shall be indicated. (3) The docket number if assigned. NOTE: It is NOT the caption, but the allegations which determine the nature of the action. (2) The Body— The body of the pleading sets forth (1) its designation, (2) the allegations of the party’s claims or defenses, (3) the relief prayed for, and (4) the date of the pleading. (a) Paragraphs.—The allegations in the body of a pleading shall be i. divided into paragraphs so numbered as to be readily identified, ii. each of which shall contain a statement of a single set of circumstances so far as that can be done with convenience. SJS ‘13 – Comprehensive Reviewer

Page 32

A paragraph may be referred to by its number in all succeeding pleadings. (b) Headings— For joined actions: The statement of the first shall be prefaced by the words “first cause of action,” of the second by “second cause of action,” and so on for the others. Paragraphs in the answer addressed to one of several causes of action in the complaint shall be prefaced by the words  “answer to the first cause of action” or “answer to the second cause of action” and so on; Paragraphs of the answer addressed to several causes of action, they shall be prefaced by words to that effect. (c) Relief.—The pleading shall specify the relief sought, BUT it may add a general prayer for such further or other relief as may be deemed just or equitable. • The relief or prayer does not constitute a part of the statement of the cause of action. • The court may grant a relief not prayed for as long as the relief is warranted by the allegations of the complaint and the proof. (d) Date.—Every pleading shall be dated. (Sec. 2, Rule 7) (3) Signature and address— Every pleading must be (1) signed by the party or counsel representing him, and (2) state in either case his address which should not be a post office box. The signature of counsel constitutes a certification (1) that he has read the pleading; (2) that to the best of his knowledge, information, and belief there is good ground to support it; and (3) that it is not interposed for delay. An unsigned pleading produces NO legal effect.  However, the court may, in its discretion, allow such deficiency to be remedied if • it shall appear that the same was due to mere inadvertence and • not intended for delay. Counsel (1) (2) (3) (4)

shall be subject to appropriate disciplinary action if: he deliberately files an unsigned pleading, signs a pleading in violation of this Rule, alleges scandalous or indecent matter therein, or fails to promptly report to the court a change of his address. (Sec 3, Rule 7)

NOTE: Counsel’s authority and duty to sign a pleading are personal to him. Hence, he MAY NOT delegate it to just any person. A blanket authority entrusted to just anyone is void since it will amount to signing by unqualified persons. (4) Verification— General Rule: Pleadings NEED NOT be under oath, verified or accompanied by affidavit. Exception: when otherwise specifically required by law or rule. The follow pleadings must be verified:  Petition to take deposition before action;  Petition for relief from judgment;  Appeal by Certiorari from CA to SC;  Application for Preliminary Injunction or Temporary Restraining Order;  Application for Appointment of a Receiver;  Petition for Certiorari, Prohibition, or Mandamus;  All pleadings of forcible entry and unlawful detainer;  Petition for appointment of general guardian;  Petition of guardian for leave to sell or encumber property of estate;  Petition to declare competency of ward;  Application for Writ of habeas corpus;  Petition for change of name;  Petition for voluntary dissolution of corporation;  Petition to correct entries in civil registry;  Pleadings in Summary Procedure. The following need not be verified but must be under oath:  Denial of genuineness and dues execution of actionable document;  Denial of allegations of usury;  Motion to set aside order of default;  Answer to written interrogatories;  Answer to request for admission.

SJS ‘13 – Comprehensive Reviewer

Page 33

Affidavit         

of merit or supporting affidavit is required in the following: Motion for summary judgment or opposition thereto; Motion for new trial; Affidavit of third-party claim on levied property; Proof required of redemptioner; Complaint with prayer for preliminary attachment; Affidavit of third-party claim on attached property; Motion to dissolve preliminary injunction on ground of irreparable damage to movant while adverse party can be fully compensated Complaint for replevin: Claim against estate of decedent.

How pleading is verified A pleading is verified by an affidavit (1) that the affiant has read the pleading and (2) that the allegations therein are true and correct of his personal knowledge or based on authentic records. NOTE: A (1) (2) (3)

pleading required to be verified shall be treated as an unsigned pleading if it contains a verification based on “information and belief,” upon “knowledge, information and belief,” or lacks a proper verification

Remedies  The court may order the correction of the pleading if lacking verification  The court may also acct on the pleading despite failure to properly verify if under the circumstances, strict compliance with the rules may be dispensed with  The absence of verification may be corrected by requiring an oath. (5) Certification against forum shopping— Forum shopping is the filing of multiple suits in different courts, either simultaneously or successively, involving the same parties, to ask the courts to rule on the same or related causes and/or to grant the same or substantially the same relief.  It is an act of malpractice  The same shall constitute direct contempt, a cause for administrative sanctions, as well as a ground for the summary dismissal of the case with prejudice. The certification against forum shopping is a sworn statement by the plaintiff or principal party certifying in an initiatory pleading: (a) that he has not commenced any action or filed any claim involving the same issues in any court, tribunal or quasijudicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, a complete statement of the present status thereof; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed. NOTE: The certification must be executed by the party NOT the counsel, unless the latter is authorized specifically to do so. A certification signed by the counsel is a defective certification and is a valid cause for dismissal. BUT This rule must be liberally interpreted:  Failure of parties to sign because they were abroad may be a reasonable cause to exempt the parties from compliance with the requirement  Signing by one of the petitioners was held to be substantial compliance  When plaintiff is a juridical person—this may be signed by the properly authorized persons. This requirement is mandatory in the filing of a complaint and other initiatory pleading, but it is NOT jurisdictional. The rule applies also to special civil actions. Initiatory pleadings include (1) Original complaint; (2) Permissive counterclaim; (3) Cross-claim; (4) Third (fourth, etc.)-party complaint; (5) Complaint in intervention; and (6) Petition or application wherein the party asserts his claim or relief. NOTE: No certification required for a compulsory counterclaim since it is NOT an initiatory pleading. Effect of failure to comply (1) It shall NOT be curable by mere amendment of the complaint or other initiatory pleading. (2) BUT it shall be cause for the dismissal of the case without prejudice, unless otherwise provided, upon motion and after hearing. Effect of the submission of a false certification or non-compliance with any of the undertakings therein: (1) Indirect contempt; SJS ‘13 – Comprehensive Reviewer

Page 34

(2) Effect of (1) (2) (3)

Administrative and criminal actions. willful and deliberate forum shopping by the party or his counsel: ground for summary dismissal with prejudice direct contempt, and a cause for administrative sanctions. (Sec. 5, Rule 7)

How to determine existence of forum shopping The most important question is whether the elements of litis pendentia are present OR whether a final judgment in one case will result to res judicata. The TEST is whether in the two or more cases pending, there is: (a) identity of parties; (b) identity of rights or causes of action, and (c) identity of reliefs sought.

HOW ALLEGATIONS MADE In general Every pleading shall contain in a methodical and logical form, a plain, concise and direct statement of the ultimate facts on which the party pleading relies for his claim or defense, as the case may be, omitting the statement of mere evidentiary facts. If a defense relief on is based on law,  the pertinent provisions thereof and  their applicability to him shall be clearly and concisely stated. (Sec. 1, Rule 8) Ultimate facts are those which directly form the basis of the right sought to be enforced, or the defense relied upon. They are the very facts without which, for example, the cause of action stated in a complaint would be insufficient.  Test of sufficiency— If from the facts alleged, a valid judgment may be rendered for the plaintiff, the complaint is prima facie sufficient. No need (1) (2) (3) (4)

to allege the following in the pleadings: evidentiary or probative facts those presumed by law facts of judicial notice inferences, arguments and conclusions of law derived or inferred from the stated ultimate facts

Capacity The following must be averred: (1) Facts showing the capacity of a party to sue or be sued: (2) The authority of a party to sue or be sued in a representative capacity; or (3) The legal existence of an organized association of persons that is made a party. Contesting the capacity of a party A party desiring to raise an issue as to the legal existence of any party or the capacity of any party to sue or be sued in a representative capacity, shall do so by specific denial, which shall include such supporting particulars as are peculiarly within the pleader’s knowledge. (Sec. 4, Rule 8) Specific denial How to make a specific denial: (1) Absolute denial—specify each material allegation of fact the truth of which he does not admit and, whenever practicable, set forth the substance of the matters upon which he relies to support his denial. (2) Partial denial—where only a part of an averment is denied, he specify so much of it as is true and material and deny only the remainder. (3) Denial by disavowal of knowledge—where defendant is without knowledge or information sufficient to form a belief as to the truth of a material averment in the complaint, he shall so state, and this shall have the effect of a denial. (Sec. 10, Rule 8) NOTE: Allegations not specifically denied are deemed admitted. Exception:  amount of unliquidated damages, which must always be proved;  allegations of usury in a complaint to recover usurious interest are admitted if not denied under oath. (Sec. 11, Rule 8) Alternative claims and defenses A party may set forth two or more statements of a claim or defense alternatively or hypothetically, either  in one cause of action or defense or  in separate causes of action or defenses. When two or more statements are made in the alternative and one of them if made independently would be sufficient, the pleading is NOT made insufficient by the insufficiency of one or more of the alternative statements. (Sec. 2, Rule 8) Examples Alternative cause of action: Breach of contract of carriage or tort SJS ‘13 – Comprehensive Reviewer

Page 35

Alternative defense: Payment; even if not paid, action has prescribed Conditions precedent In any pleading a general averment of the performance or occurrence of all conditions precedent shall be sufficient. (Sec. 3, Rule 8) Example: Exhaustion of administrative remedies. Fraud and mistake, condition of mind In all averments, the circumstances constituting the following must be stated with particularity: (1) fraud or (2) mistake NOTE: If the above rule is not complied with,  the complaint may be dismissed, or  the answer may be stricken off the records and he will be declared in default. The following may be averred generally: (1) malice, (2) intent, (3) knowledge or (4) other condition of the mind of a person. (Sec. 5, Rule 8) Judgments In pleading a judgment or decision of a domestic or foreign court, judicial or quasi-judicial tribunal, or of a board or officer, it is sufficient  to aver the judgment or decision without setting forth matter showing jurisdiction to render it. (Sec. 6, Rule 8) Official documents In pleading an official document or official act, it is sufficient to aver:  that the document was issued or the act done in compliance with law. (Sec. 9, Rule 8) Need to bring in new parties When the presence of parties other than those to the original action is required for the granting of complete relief in the determination of a counterclaim or cross-claim, the court shall ORDER them to be brought in as defendants, if jurisdiction over them can be obtained. (Sec. 12, Rule 6)

COMPLAINT Defined and in general The complaint is the pleading alleging the plaintiff’s cause or causes of action. The names and residences of the plaintiff and defendant must be stated in the complaint. (Sec. 3, Rule 6)  It is the first pleading a party filed in court.  It must be in writing. Allegations In general Every pleading shall contain in a methodical and logical form, a plain, concise and direct statement of the ultimate facts on which the party pleading relies for his claim or defense, as the case may be, omitting the statement of mere evidentiary facts. If a defense relief on is based on law,  the pertinent provisions thereof and their applicability to him shall be clearly and concisely stated.

REYES v. RTC MAKATI (2008)

SJS ‘13 – Comprehensive Reviewer

Page 36

Allegations of deceit, machination, false pretenses, misrepresentation, and threats are largely conclusions of law that, without supporting statements of the facts to which the allegations of fraud refer, do not sufficiently state an effective cause of action. FACTS: Pedro and Anastacia Reyes, along with their two children Oscar, Rodrigo, owned shares of stock in Zenith Insurance Corporation (Zenith). When Pedro and Anastacia died, Rodrigo owned 4,250 shares while Oscar owned 8,715,637 shares. Pedro’s estate was properly partitioned in the 70’s but Anastacia’s estate was not partitioned (which includes her shares in Zenith). Zenith and Rodrigo filed a complaint designated as a derivative suit with the SEC against Oscar to obtain an accounting of the funds and assets of Zenith which are now or formerly in the control, custody, and/or possession of petitioner Oscar and to determine the shares of stock of deceased Reyes spouses that were “arbitrarily and fraudulently” appropriated by Oscar for himself and which were not collated and taken into account in the partition, distribution, and/or settlement of the estate of the deceased spouses. The complaint prayed that Oscar be ordered to account for all the income from the time he took these shares, and deliver to his brothers and sisters their just and respective shares. In his Answer with Counterclaim, Oscar denied the charge that he illegally acquired the shares of Anastacia, asserting that he purchased the shares with his own funds from Zenith’s unissued stocks, and that the suit is not a bona fide derivative suit because the requisites have not been complied with. He questioned the SEC's jurisdiction to entertain the complaint because it pertains to the settlement of the estate of Anastacia Reyes. The RTC was later conferred with jurisdiction over the matter due to a presidential declaration confirming the former as a special commercial court. Oscar filed a Motion to Declare Complaint as Nuisance or Harassment Suit. The RTC denied the motion and the CA affirmed. Hence this petition ISSUE: Whether the allegations against Oscar were sufficient to hold him guilty of fraud NO. The rule is that a complaint must contain a plain, concise, and direct statement of the ultimate facts constituting the plaintiff's cause of action and must specify the relief sought. Section 5, Rule 8 of the Revised Rules of Court provides that in all averments of fraud or mistake, the circumstances constituting fraud or mistake must be stated with particularity . These rules find specific application to Section 5(a) of P.D. No. 902-A which speaks of corporate devices or schemes that amount to fraud or misrepresentation detrimental to the public and/or to the stockholders. Allegations of deceit, machination, false pretenses, misrepresentation, and threats are largely conclusions of law that, without supporting statements of the facts to which the allegations of fraud refer, do not sufficiently state an effective cause of action. Fraud and mistake are required to be averred with particularity to enable the opposing party to controvert the particular facts allegedly constituting such fraud or mistake. The charges of fraud against Oscar were not properly supported by the required factual allegations. While the complaint contained allegations of fraud purportedly committed by him, these allegations are not particular enough to bring the controversy within the special commercial court's jurisdiction; they are not statements of ultimate facts, but are mere conclusions of law: how and why the alleged appropriation of shares can be characterized as "illegal and fraudulent" were not explained nor elaborated on. Capacity of parties The following must be averred: (1) Facts showing the capacity of a party to sue or be sued: (2) The authority of a party to sue or be sued in a representative capacity; or (3) The legal existence of an organized association of persons that is made a party. Contesting the capacity of a party A party desiring to raise an issue as to the legal existence of any party or the capacity of any party to sue or be sued in a representative capacity, shall do so by specific denial, which shall include such supporting particulars as are peculiarly within the pleader’s knowledge. (Sec. 4, Rule 8) Actions based upon a document Whenever an action or defense is based upon a written instrument or document, the party shall: (1) set forth in the pleading the substance of such instrument or document , and (2) attach the original or a copy thereof an exhibit, which shall be deemed to be a part of the pleading, or (3) set forth said copy be in the pleading with like effect. (Sec. 7, Rule 8) Actionable document is one which is the basis of the claim or defense. Examples:  promissory note  deed of sale  contract NOTE: Letters by parties regarding the actionable document are not actionable documents, but mere evidence of the existence of the actionable document.

To contest an actionable document The party must (1) specifically deny the genuineness and due execution of the document under oath; and SJS ‘13 – Comprehensive Reviewer

Page 37

(2) set forth what he claims to be the facts. NOTE: A mere specific denial is insufficient. The denial must be coupled with an oath; the denial must be verified.  Absence of an oath will be deemed an implied admission of the due execution and genuineness of the document.  When a party is deemed to have admitted genuineness and due execution of an actionable document, defenses implied from said admission are waived (forgery, lack of authority to execute the document, no capacity to sign, non-delivery of the document, defense that the document was not in words and figures as set out in the pleadings)  The following are NOT cut-off by the implied admission since they are unrelated to the genuineness and due execution of the document: (1) Payment; (2) Want of consideration; (3) Illegality of consideration; (4) Usury; (5) Fraud; (6) Prescription, (7) Release; (8) Waiver; (9) Statute of frauds; (10) Estoppel; (11) Former recovery or discharge in bankruptcy, etc. When an oath is not required A specific denial under oath will not apply in the following cases: (1) When the adverse party does not appear to be a party to the document, or (2) When compliance with an order for an inspection of the original instrument is refused. (Sec. 8, Rule 8) ANSWER Defined and in general An answer is a pleading in which a defending party sets forth his defenses. (Sec. 4, Rule 6)  This pleading may be an answer to the complaint, to a counterclaim, or an answer to a cross-claim.  There is NO answer to a reply.  There may be an answer to a third-party complaint or complaint-in-intervention.

Types of defenses Negative A negative defense is the specific denial of the material fact or facts alleged in the pleading of the claimant essential to his cause or causes of action. (Sec. 5[a], Rule 6) A defense is negative when the material averments alleged in the pleading of the claimant are specifically denied. (Sec. 5, Rule 3) How alleged, generally It is alleged in the form of a specific denial.  If the denial is not under Sec. 10, Rule 8, it is deemed a general denial.  A general denial is an admission. Specific denial How to make a specific denial: (1) Absolute denial—specify each material allegation of fact the truth of which he does not admit and, whenever practicable, set forth the substance of the matters upon which he relies to support his denial. (2) Partial denial—where only a part of an averment is denied, he specify so much of it as is true and material and deny only the remainder. (3) Denial by disavowal of knowledge—where defendant is without knowledge or information sufficient to form a belief as to the truth of a material averment in the complaint, he shall so state, and this shall have the effect of a denial. (Sec. 10, Rule 8) Capacity of parties The following must be averred: (1) Facts showing the capacity of a party to sue or be sued: (2) The authority of a party to sue or be sued in a representative capacity; or (3) The legal existence of an organized association of persons that is made a party. Contesting the capacity of a party A party desiring to raise an issue as to the legal existence of any party or the capacity of any party to sue or be sued in a representative capacity, shall do so by specific denial, which shall include such supporting particulars as are peculiarly within the pleader’s knowledge. (Sec. 4, Rule 8) Genuineness of documents SJS ‘13 – Comprehensive Reviewer

Page 38

Whenever an action or defense is based upon a written instrument or document, the party shall: (1) set forth in the pleading the substance of such instrument or document , and (2) attach the original or a copy thereof an exhibit, which shall be deemed to be a part of the pleading, or (3) set forth said copy be in the pleading with like effect. (Sec. 7, Rule 8) Actionable document is one which is the basis of the claim or defense. Examples:  promissory note  deed of sale  contract NOTE: Letters by parties regarding the actionable document are not actionable documents, but mere evidence of the existence of the actionable document. To contest an actionable document The party must (1) specifically deny the genuineness and due execution of the document under oath; and (2) set forth what he claims to be the facts. NOTE: A mere specific denial is insufficient. The denial must be coupled with an oath; the denial must be verified.  Absence of an oath will be deemed an implied admission of the due execution and genuineness of the document.  When a party is deemed to have admitted genuineness and due execution of an actionable document, defenses implied from said admission are waived (forgery, lack of authority to execute the document, no capacity to sign, non-delivery of the document, defense that the document was not in words and figures as set out in the pleadings)  The following are NOT cut-off by the implied admission since they are unrelated to the genuineness and due execution of the document: (1) Payment; (2) Want of consideration; (3) Illegality of consideration; (4) Usury; (5) Fraud; (6) Prescription, (7) Release; (8) Waiver; (9) Statute of frauds; (10) Estoppel; (11) Former recovery or discharge in bankruptcy, etc. When an oath is not required A specific denial under oath will not apply in the following cases: (3) When the adverse party does not appear to be a party to the document, or (4) When compliance with an order for an inspection of the original instrument is refused. (Sec. 8, Rule 8) MEMITA v. MASONGSONG (2007)

The genuineness and due execution of the instrument shall be deemed admitted unless the adverse party, under oath, specifically denies them, and sets forth what he claims to be the facts. A defendant must specify each material allegation of fact the truth of which he does not admit and, whenever practicable, shall set forth the substance of the matters upon which he relies to support his denial. FACTS: Masongsong, under the business name of RM Integrated Services, was the distributor of San Miguel Foods, Inc.’s Magnolia chicken products. He supplied said products on a 25-day payment credit to Memita’s Vicor Store. Masongsong filed a complaint before the RTC, alleging that Memita’s P603,520.50 credit on goods purchased remain unpaid despite his several demands. He also prayed for the issuance of a writ of attachment against Memita. Thereafter, the RTC ordered the issuance of a writ of attachment against Memita, taking into account: (1) the allegations of the verified complaint; (2) the testimonies of Masongsong and Joel Go, his sales person; and (3) Masongsong’s bond. According to the sheriff’s return of service, the Provincial Sheriff issued a notice of levy on attachment to the Registrar of the TO and a notice of embargo to the Register of Deeds of Bacolod City. Memita did not deny that he purchased goods on credit from Masongsong, but based his refusal to pay on the following grounds: (1) questionable deliveries; (2) short deliveries and discrepancies; and (3) possible manipulation of delivery receipts. He made a counterclaim and asked for P300,000 in actual damages for the seizure of two of his vehicles; P500,000 as moral damages; at least P200,000 as exemplary damages; and P150,000 as attorney’s fees. SJS ‘13 – Comprehensive Reviewer

Page 39

The RTC ruled that Masongsong was entitled to the reliefs prayed for. However, Memita filed a notice of appeal with the trial court. In his brief, Memita averred that the trial court erroneously admitted as evidence the machine copies of the seventytwo (72) sales invoices despite the patent lack of proof of due execution and authenticity; and in holding that Memita acknowledged receipt of the deliveries made by Masongsong. The appellate court upheld the trial court’s decision. They said Memita failed to explicitly deny or contest the genuineness and due execution of the receipts or any signatures on the receipts. ISSUES: Whether Memita was able to contest the genuineness and due execution of the 72 sales invoices NO. Without specifying the date of purchase or the receipt number, Memita denied the quantities and value of his purchases. He alleged that there were questionable deliveries and questionable number of kilos per crate, and concluded that Masongsong might have manipulated the delivery receipts. However, he failed to point out any particular Sales Invoice which substantiates his claim of short deliveries or questionable deliveries. The appellate court reiterated the trial court’s position and stated that Memita’s The Answer failed to explicitly deny or contest the genuineness and due execution of any of the receipts nor any of his signatures or that of his authorized representative appearing therein. Section 8 of Rule 8 provides that the genuineness and due execution of the instrument shall be deemed admitted unless the adverse party, under oath, specifically denies them, and sets forth what he claims to be the facts. Memita, in alleging "questionable" and "short" deliveries, in effect alleges that Masongsong committed fraud. Whoever alleges fraud or mistake affecting a transaction must substantiate his allegation, since it is presumed that a person takes ordinary care of his concerns and private concerns have been fair and regular. Memita chose to present evidence which did not "set forth the facts" nor the "substance of the matters upon which he relies to support his denial.” Negative pregnant Denial in the form of a negative pregnant— It is a denial which at the same time involves an affirmative implication favorable to the opposing party, and is thus an admission of an averment to which it is directed. It is a literal denial pregnant with admission.  It does not qualify as a specific denial. It is conceded to be actually an admission.  It is a negative implying also an affirmative and which although stated in a negative form really admits the allegations to which it relates.

PHILIPPINE AMERICAN GENERAL INSURANCE CO., INC. v. SWEET LINES (212 SCRA 194, 1993)

Even granting that petitioner’s averment in their reply amounts to a denial, it has the procedural earmarks a negative pregnant, that is, a denial pregnant with the admission of the substantial facts in the pleadings responded to which are not squarely denied. While the petitioners objected to the validity of such agreement for being contrary to public policy, the existence of the bills of lading and said stipulations were impliedly admitted by them FACTS: In March 1977, the vessel SS "VISHVA YASH" a foreign common carrier, took on board at Baton Rouge, LA, two (2) consignments of cargoes for shipment to Manila and later for transshipment to Davao City, consisting of bags of Low Density Polyethylene both consigned to the order of FEBTC Manila, with arrival notice to TPI in Davao City. The said vessel arrived at Manila and discharged its cargoes in the Port of Manila. For transshipment to Davao, the carrier awaited and made use of the services of M/V "Sweet Love" owned and operated by SLI interisland carrier. Subject cargoes were loaded and were commingled with similar cargoes belonging o other two other companies. The shipments were discharged from the interisland carrier into the custody of the consignee. However, of the 7,000 bags originally contained in 175 pallets, only a total of 5,820 bags were delivered to the consignee in good order condition, leaving a balance of 1,080 bags. Defendants were sued for such losses. Before trial, a compromise agreement was entered into between petitioners, as plaintiffs, and defendants S.C.I. Line and F.E. Zuellig. The trial court granted petitioners motion to dismiss on the ground of said amicable settlement and the case as to S.C.I. Line and F.E. Zuellig was consequently dismissed. CA reversed the RTC on supposed ground of prescription when SLI failed to adduce any evidence in support thereof and that the bills of lading said to contain the shortened periods for filing a claim and for instituting a court action against the carrier were never offered in evidence. ISSUE: Whether the non-inclusion of the controverted bills of lading in the formal offer of evidence would bar respondent from raising the defense of prescription NO. In the case at bar, prescription as an affirmative defense was seasonably raised by SLI in its answer, except that the bills of lading embodying the same were not formally offered in evidence. As petitioners are suing upon SLI's contractual obligation under the contract of carriage as contained in the bills of lading, such bills of lading can be categorized as actionable documents which under the Rules must be properly pleaded either as SJS ‘13 – Comprehensive Reviewer

Page 40

causes of action or defenses, and the genuineness and due execution of which are deemed admitted unless specifically denied under oath by the adverse party. Petitioners failed to controvert the existence of the bills of lading; hence, they impliedly admitted the same when they merely assailed the validity of subject stipulations. Petitioners' failure to specifically deny the existence, much less the genuineness and due execution, of the instruments in question amounts to an admission. Judicial admissions, verbal or written, made by the parties in the pleadings or in the course of the trial or other proceedings in the same case are conclusive, no evidence being required to prove the same, and cannot be contradicted unless shown to have been made through palpable mistake or that no such admission was made. Moreover, when the due execution and genuineness of an instrument are deemed admitted because of the adverse party's failure to make a specific verified denial thereof, the instrument need not be presented formally in evidence for it may be considered an admitted fact. Petitioners failed to touch on the matter of the non-presentation of the bills of lading in their brief and earlier on in the appellate proceedings in this case. Petitioners acknowledged the existence of said bills of lading. By having the cargo shipped on respondent carrier's vessel and later making a claim for loss on the basis of the bills of lading, petitioners for all intents and purposes accepted said bills. Affirmative An affirmative defense is an allegation of a new matter which, while hypothetically admitting the material allegations in the pleading of the claimant would nevertheless prevent or bar recovery by him.  It is not a denial of an essential ingredient in the plaintiff’s cause of action, but one which, if established, will be a good defense, an avoidance of the claim.  It must be of such nature as to bar the plaintiff from claiming on his cause of action.  The plaintiff may deny or controvert it by filing a reply. If no reply is, affirmative defenses are deemed controverted except those which are required to be under oath. The affirmative defenses include (1) fraud, (2) statute of limitations, (3) release, (4) payment, (5) illegality, (6) statute of frauds, (7) estoppel, (8) former recovery, (9) discharge in bankruptcy, and (10) any other matter by way of confession and avoidance

Implied admissions General rule: Defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. Exception: The grounds of (1) Lack of jurisdiction over the subject matter; (2) Litis pendentia (that there is another action pending between the same parties for the same cause); (3) Res judicata (that the action is barred by a prior judgment), and (4) Prescription Periods to plead Answer to the complaint— Within 15 days after service of summons, unless a different period is fixed by the court (Sec. 1, Rule 11) Answer of a defendant foreign private juridical entity.— Within 30 days after receipt of summons where the defendant is (1) a foreign private juridical entity and (2) service of summons is made on the government official designated by law to receive the same. (Sec. 2, Rule 11) Answer to amended complaint: Filed as a matter of right— Within 15 days after being served with a copy of the amended complaint. Not a matter of right— Within 10 days from notice of the Order admitting the same  An answer earlier filed may serve as the answer to the amended complaint, if no new answer is filed. NOTE: This Rule applies to answers to (1) an amended counterclaim, (2) amended cross-claim, (3) amended third (fourth, etc.)— party complaint, and (4) amended complaint-in-intervention. (Sec. 3, Rule 11) SJS ‘13 – Comprehensive Reviewer

Page 41

Waiver of defenses A compulsory counterclaim, or a cross-claim, not set up shall be barred. (Sec. 2, Rule 9) COUNTERCLAIMS Defined and in general A counterclaim is any claim which a defending party may have against an opposing party. (Sec. 6, Rule 6)  It partakes of a complaint by the defendant against the plaintiff  “claim” may refer to a claim for (a) Money; or (b) Some other relief against an opposing party  Upon filing of the counterclaim, the defendant becomes the plaintiff, while the original plaintiff becomes the defendant.  It gives rise to two complaints: the original complaint and the counterclaim. How raised Included in answer A counterclaim may be asserted against an original counter-claimant. (Sec. 9, Rule 6) A compulsory, counterclaim or a cross-claim that a defending party has at the time he files his answer shall be contained therein. (Sec. 8, Rule 11) After answer A counterclaim may be asserted against an original counter-claimant. (Sec. 9, Rule 6) A counterclaim or a cross-claim which either (1) matured or (2) was acquired by a party after serving his pleading may, with the permission of the court, be presented as a counterclaim or a cross-claim by supplemental pleading before judgment. (Sec. 9, Rule 11) Kinds of counterclaims Compulsory A compulsory counterclaim is one which, being cognizable by the regular courts of justice, (1) Arises out of or is connected with the transaction or occurrence constituting the subject matter of the opposing party’s claim and (2) Does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction. (3) Such a counterclaim must be within the jurisdiction of the court both as to the amount and the nature thereof, except that in an original action before the RTC, the counterclaim may be considered compulsory regardless of the amount. (Sec. 7, Rule 6) NOTE: A compulsory counterclaim, or a cross-claim, not set up shall be barred. (Sec. 2, Rule 9)

-It cannot be independently adjudicated BA FINANCE CORP v. CO (224 SCRA 163, 1993)

Compulsory counterclaim, being ancillary to the principal controversy, cannot "remain pending for independent adjudication by the court." Dismissal of the complaint carries with it the dismissal of the compulsory counterclaim. FACTS: BA Finance brought an action recover a sum of money from a credit accommodation in the form of a discounting line which it granted to Rufino Co, and from certain suretyship agreements executed in its favor by his co-respondents. As their counterclaim, respondents alleged overpayments and damages. They asserted that they are no longer indebted to petitioner and

SJS ‘13 – Comprehensive Reviewer

Page 42

are in fact entitled to reimbursement for overpayments. They asked for damages for expenses incurred and inconveniences suffered by them as a result of the filing of the present action. After respondents' Amended Answer to Complaint with Compulsory Counterclaim was admitted, the case was set for Pre-Trial Conference. The conference was repeatedly reset. Counsel for BA Finance failed to attend the Pre-Trial Conference. Consequently, Co moved for dismissal of the case without prejudice. The motion was granted. Respondents moved to set the reception of their evidence in support of their counterclaim. Trial court denied the motion. CA reversed the lower court’s order and directed it to set the reception of their evidence on their counterclaim. Motion for reconsideration was denied, hence the instant petition alleging that the dismissal of the complaint carried with it the dismissal of respondent’s counterclaim. ISSUE: Whether the dismissal of the complaint carries with it the dismissal of the counterclaim YES. A compulsory counterclaim cannot "remain pending for independent adjudication by the court." This is because it is auxiliary to the proceeding in the original suit and merely derives its jurisdictional support therefrom. Thus, if the trial court no longer possesses jurisdiction to entertain the main action of the case, an when it dismisses the same, then the compulsory counterclaim being ancillary to the principal controversy, must likewise be similarly dismissed since no jurisdiction remains for the grant of any relief under the counterclaim. In the case at bar, the same evidence needed to sustain the counterclaim of respondents would also refute the cause of action in petitioner's complaint. If private respondents could successfully show that they actually made overpayments on the credit accommodations extended by petitioner, then the complaint must fail. Therefore the counterclaim is compulsory. However, with the dismissal of the complaint on defendant's own motion, it likewise dismissed the counterclaim questioning the complaint. What the defendants could have done instead of moving for dismissal was to ask the trial court to declare petitioners to be "non-suited" on their complaint so that the latter can no longer present his evidence thereon, and simultaneously move that he be declared as in default on the compulsory counterclaim, and reserve the right to present evidence ex parte on his counterclaim. This will enable defendant who was unjustly haled to court to prove his compulsory counterclaim, which is intertwined with the complaint, because the trial court retains jurisdiction over the complaint and of the whole case. The nondismissal of the complaint, the non-suit notwithstanding, provides the basis for the compulsory counterclaim to remain active and subsisting. -Jurisdiction (both as to amount and nature; exception) MACEDA v. CA (1989)

The MTC does not have original jurisdiction over the counterclaim as it exceeds P20,000, hence the RTC did not have appellate jurisdiction over the claim. FACTS: Spouses Arturo and Maxima emigrated to the U.S. and leased their house and lot to their nephew, Maceda, for P200 per month. With the spouses’ permission, petitioner repaired and renovated the house subject to reimbursement for expenses. The remodeling job cost P40,000. The spouses made plans to reimburse him. Maceda introduced more improvements. When Arturo passed away in the US, his attorney-in-fact promised to sell to Maceda the property for P125,000 after the transfer of title to his widowed aunt. However, it was later sold by the aunt to Mr. Gomez, and the latter to Pablo Zubiri. Ejectment cases were filed against Maceda, but all were dismissed. Maxima died in the US. Zubiri sold the property to Cement Center, Inc., who asked petitioner to vacate because of a housing project it had for its employees. Maceda insisted on being reimbursed for his improvements as the original owners had promised to do. Formal demands to vacate and for payment of P4,000 monthly rental from April 15, 1982 were sent to him by the company. Another ejectment suit was filed against him in the MTC. In his answer to the complaint, Maceda set up a P240,000 counterclaim, the alleged value of his improvements. The MTC ordered him to vacate the premises and pay Cement Center rent. The latter was ordered to reimburse him for the improvements. The RTC set aside the decision and ordered Cement Center to pay Maceda P182,000 as necessary and useful improvements. The CA reversed the decision because of MTC’s lack of jurisdiction, and, in consequence the RTC decision’s lack of legal basis. ISSUE: Whether the MTC had jurisdiction over an ejectment case where the lessee's counterclaim exceeds the court's jurisdictional limit NO. The MTC did not have original jurisdiction over his counterclaim as it exceeds P20,000. Correspondingly, the RTC did not have appellate jurisdiction over the claim. The decision of the MTC awarding Maceda P158,000 on his counterclaim, and that of the RTC raising the award to P182,200, were invalid for lack of jurisdiction. The jurisdiction of the MTC in a civil action for sum of money is limited to a demand that "does not exceed P20,000 exclusive of interest and costs but inclusive of damages of whatever kind." (Sec. 33, subpar. 1, B.P. Blg. 129.) A counterclaim in the municipal or city court beyond that jurisdictional limit may be pleaded only by way of defense to weaken the plaintiffs claim, but not to obtain affirmative relief. -Filing fees and non-forum certification not required Permissive A permissive counterclaim is one which does not arise out of the opposing party’s claim or necessarily connected with the transaction or occurrence constituting the subject matter of the opposing party’s claim.  It is not connected with the plaintiff’s cause of action. SJS ‘13 – Comprehensive Reviewer

Page 43

 

It is NOT barred even if not pleaded in the answer. It may be filed as an independent action by the defendant as plaintiff.

Examples  Counterclaim for damages based on culpa aquiliana in a complaint for collection of a loan  Counterclaim for damages based on quasi-delict  Counterclaim for the payment of the price of a car in an action to recover a piece of land Distinctions between compulsory and permissive counterclaim PERMISSIVE May be set up as an independent action and will not be barred if not in the answer An initiatory pleading Should be accompanied by a certification against forum shopping and when legally required, a certificate to file action by the Lupong Tagapamayapa

Must be answered by the party against whom it is interposed, otherwise, he may be declared in default

Docket and other lawful fees should be paid

COMPULSORY Must be contained in the answer; if it is not set up, it shall be barred Not an initiatory pleading

Does not require certifications

Failure to answer this is NOT a cause for a default declaration. Compulsory counterclaims merely reiterating special defenses are deemed controverted even without a reply No need to pay docket fees BUT NOTE: AM 4-2-04 now requires payment of fees for compulsory counterclaims (Riano)

KOREA EXCHANGE BANK v. GONZALES (456 SCRA 224, 2005)

Forum shopping is a ground for summary dismissal of both initiatory pleadings without prejudice to the taking of appropriate action against the counsel or party concerned. The counterclaims of the PHDI, et al., for moral and exemplary damages were merely permissive; hence, they were mandated to append thereto a certification of non-forum shopping. FACTS: PHDI and Magno et al, filed a complaint in the RTC against Aum, a Korean National and president of PHDI, and the Korea Exchange Bank (KEB). They alleged that through the machination of Aum, KEB granted a $500,000.00 loan to the PHDI with the condition that the said loan be deposited with the KEB in the name of PHDI. Thereafter, the plaintiffs executed a real estate mortgage over their properties as security for the said loan. Under PHDI’s board resolution, only Aum and Mendoza were authorized signatories to all applications for withdrawals from the said accounts. Aum withdrew $160,000.00 from the account by forging Mendoza’s signature. He was made another withdrawal, leaving a balance of $163,000.00. Aum allegedly could not have withdrawn said deposits without the KEB’s connivance. Aum's failure to heed demands for an accounting of the said withdrawals and for the restitution of the said amounts constituted large scale estafa for which they are liable for exemplary and moral damages. The KEB filed a Motion to Dismiss the complaint, which the trial court denied. The KEB filed a petition for certiorari and prohibition with the CA for the nullification of the orders of the RTC. Meanwhile, in another case, KEB filed a Complaint against Magno et al and PHDI before the RTC for sum of money and reformation of the real estate mortgage executed by PHDI. PHDI and Magno, et al. filed a motion to dismiss on the ground of forum shopping, asserting that the KEB should have filed its counterclaim for collection and the reformation of the mortgage in SJS ‘13 – Comprehensive Reviewer

Page 44

the first civil case. They averred that the essential elements of litis pendentia were present. However, the RTC denied the motion to dismiss. PHDI and Magno, et al. therefore filed their answer with counterclaims in the second case where they denied indebtedness to the KEB, alleging the same facts in their complaint in the first civil case. KEB filed a motion to dismiss these counterclaims, alleging that the causes of action for PHDI’s complaint for collection of $160,000.00 and damages, and for the counterclaims in this second case for the set-off of the said amount against its claim of $500,000.00 were identical; hence, their counterclaims should be dismissed for forum shopping. PHDI, et al. opposed the motion to dismiss the complaint, alleging that KEB failed to include forum shopping as a ground in its motion to dismiss their complaint in the first case; hence, it is bound by the omnibus motion rule. PHDI, et al. also opposed the motion to dismiss their counterclaims on the ground that the causes of action in the two cases were unrelated. They asserted that the subject matter, causes of action and the issues in the two cases were different. The RTC denied KEB's motion to dismiss the complaint and motion to dismiss the counterclaims.KEB filed its answer to the counterclaims of the PHDI, et al., in the second case. CA, in a joint decision, affirmed the RTC with respect to the first case, but dismissed respondents’ counterclaims in the second case for forum-shopping. The CA declared that the counterclaims of the PHDI, et al., for moral and exemplary damages were merely permissive; hence, they were mandated to append thereto a certification of non-forum shopping. ISSUE: Whether the counterclaim in the second case should be dismissed for the absence of a certificate of non-forum shopping, and whether the first case should be dismissed for forum shopping YES. In interposing their counterclaim for set-off of the $160,000.00 against their loan of $500,000.00 in the second case, as well as the counterclaims for moral damages, and exemplary damages, the respondents thereby engaged in forum shopping. The general rule is that compliance with the certificate of forum shopping is separate from and independent of the avoidance of the act of forum shopping itself. Forum shopping is a ground for summary dismissal of both initiatory pleadings without prejudice to the taking of appropriate action against the counsel or party concerned. There is forum shopping when, between an action pending before the court and another one, there exist:(a) identity of parties, or at least such parties as represent the same interests in both actions; (b) identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) the identity of the two preceding particulars is such that any judgment rendered in the other action will, regardless of which party is successful, amount to res judicata in the action under consideration. There is forum shopping where a litigant sues the same party against whom another action or actions for the alleged violation of the same right and the enforcement of the same relief is/are still pending. The defense of litis pendentia in one case is a bar to the other/others; and, a final judgment is one that would constitute res judicata and thus would cause the dismissal of the rest. Absolute identity of parties is not required. It is enough that there is substantial identity of parties. Remedies For failure to raise compulsory counterclaim A compulsory counterclaim, or a cross-claim, not set up shall be barred. (Sec. 2, Rule 9)  This refers to a counterclaim defendant has at the time of filing of the answer Oversight, inadvertence, excusable neglect When a pleader fails to set up a counterclaim or a cross-claim through (1) oversight, (2) inadvertence, (3) excusable neglect, or (4) when justice requires, He may, by leave of court, set up the counterclaim or cross-claim by amendment before judgment. (Sec. 10, Rule 11) ANSWER TO COUNTERCLAIM In general An answer is a pleading in which a defending party sets forth his defenses. (Sec. 4, Rule 6) Period to plead A counterclaim or cross-claim must be answered within 10 days from service. (Sec. 4, Rule 11) REPLY Defined and in general A reply is a pleading, the office or function of which is to deny, or allege facts in denial or avoidance of new matters alleged by way of defense in the answer and thereby join or make issue as to such new matters.  A reply is the responsive pleading to an answer, not to counterclaim or cross-claim.  Not mandatory—If a party does not file such reply, all the new matters alleged in the answer are deemed controverted.  If the plaintiff wishes to interpose any claims arising out of the new matters so alleged such claims shall be set forth in an amended or supplemental complaint. (Sec. 10, Rule 6) When required Challenge due to authenticity of documents

SJS ‘13 – Comprehensive Reviewer

Page 45

When an action or defense is founded upon a written instrument, copied in or attached to the corresponding pleading, the genuineness and due execution of the instrument shall be deemed admitted unless the adverse party (1) specifically denies them, and (2) sets forth what he claims to be the facts; (3) under oath. BUT the requirement of an oath does not apply when (1) the adverse party does not appear to be a party to the instrument or (2) when compliance with an order for an inspection of the original instrument is refused. (Sec. 8, Rule 8) CASENT REALTY DEV’T CORP v. PHILBANKING CORPORATION (2007)

When the defense in the answer is based on an actionable document, a Reply specifically denying it under oath must be made; otherwise the genuineness and due execution of the document will be deemed admitted. FACTS: Philbanking Corporation (PhilBanking) filed a complaint against Casent Realty Corporation (Casent) before the RTC for collection on two promissory notes assigned by Rare Realty Corporation. In its Answer, Casent raised, among others, as defenses the Dacion en Pago (Dacion) executed between petitioner and respondent, and the Confirmation Statement issued by respondent stating that petitioner had no loans with the bank as of December 31, 1988. Petitioner then filed a Motion for Judgment on Demurrer to the Evidence, pointing out that the PhilBanking’s failure to file a Reply to the Answer constituted an admission of the genuineness and execution of said documents; and that since the Dacion obliterated petitioner’s obligation covered by the promissory notes, the bank had no right to collect anymore. The RTC ruled in favor of Casent and dismissed the complaint. On appeal, the CA found that under the Deed of Assignment, respondent PhilBanking clearly had the right to proceed against the promissory notes assigned by Rare Realty. ISSUE: Whether respondent’s failure to file a Reply and deny the Dacion and Confirmation Statement under oath constituted a judicial admission of the genuineness and due execution of these documents YES. When an action or defense is founded upon a written instrument, copied in or attached to the corresponding pleading as provided in the preceding section, the genuineness and due execution of the instrument shall be deemed admitted unless the adverse party, under oath, specifically denies them, and sets forth, what he claims to be the facts; but the requirement of an oath does not apply when the adverse party does not appear to be a party to the instrument or when compliance with an order for an inspection of the original instrument is refused. Since respondent failed to file a Reply, in effect, respondent admitted the genuineness and due execution of said documents. This judicial admission should have been considered by the appellate court in resolving the demurrer to evidence. Rule 8, Section 8 specifically applies to actions or defenses founded upon a written instrument, and provide the manner of denying it. It is more controlling than Rule 6, Section 10 which merely provides the effect of failure to file a Reply. Thus, where the defense in the Answer is based on an actionable document, a Reply specifically denying it under oath must be made; otherwise, the genuineness and due execution of the document will be deemed admitted. Since respondent failed to deny the genuineness and due execution of the Dacion and Confirmation Statement under oath, then these are deemed admitted and must be considered by the court in resolving the demurrer to evidence. It must be noted, however, that admission of the genuineness and due execution of the Dacion and Confirmation Statement does not prevent the introduction of evidence showing that the Dacion excludes the promissory notes. Petitioner, by way of defense, should have presented evidence to show that the Dacion includes the promissory notes. THIRD/FOURTH-PARTY COMPLAINT Defined A third (fourth, etc.)-party complaint is a claim that a defending party may, with leave of court, file against a person not a party to the action, called the third (fourth, etc.)—party defendant, for (1) contribution, (2) indemnity, (3) subrogation or (4) any other relief, in respect of his opponent’s claim. (Sec. 11, Rule 6) NOTE: It is NOT proper to file a third-party complaint against one who is already a party to the action, such as against a plaintiff or a co-defendant. But a cross-claim may be filed against them. Remedies when denied When a complaint is dismissed, the third-party complaint is also dismissed. But if the plaintiff appeals the dismissal, the defendant-third-party plaintiff must also appeal to obtain affirmative relief. ANSWER TO THIRD/FOURTH-PARTY COMPLAINT In general A third (fourth, etc.)—party defendant may allege in his answer SJS ‘13 – Comprehensive Reviewer

Page 46

(1) (2) (3) (4) (5)

his defenses, counterclaims, cross-claims, defenses that the third (fourth, etc.)—party plaintiff may have against the original plaintiff’s claim, or a counterclaim against the original plaintiff in respect of the latter’s claim against the third-party plaintiff, in proper cases. (Sec. 13, Rule 6)

Time to plead The same period as the answer to the complaint (Sec. 5, Rule 11): within 15 days from service of summons.

EXTENSION OF TIME TO PLEAD The court may extend the time to plead provided in these Rules: (1) Upon motion and (2) on such terms as may be just. Motion to extend period to plead  Must be in writing, and before filed before the lapse of period  Time to plead can only be extended, no shortened The court may also, upon like terms, allow an answer or other pleading to be filed after the time fixed by these Rules. (Sec. 11, Rule 11)  An order allowing the filing of a late answer or other pleading is interlocutory, and therefore, unappealable. (Formal Requirements) FILING AND SERVICE OF PLEADINGS, MOTIONS AND ORDERS Verification General Rule: Pleadings NEED NOT be under oath, verified or accompanied by affidavit. Exception: when otherwise specifically required by law or rule. The follow pleadings must be verified:  Petition to take deposition before action;  Petition for relief from judgment;  Appeal by Certiorari from CA to SC;  Application for Preliminary Injunction or Temporary Restraining Order;  Application for Appointment of a Receiver;  Petition for Certiorari, Prohibition, or Mandamus;  All pleadings of forcible entry and unlawful detainer;  Petition for appointment of general guardian;  Petition of guardian for leave to sell or encumber property of estate;  Petition to declare competency of ward;  Application for Writ of habeas corpus;  Petition for change of name;  Petition for voluntary dissolution of corporation;  Petition to correct entries in civil registry;  Pleadings in Summary Procedure. The following need not be verified but must be under oath:  Denial of genuineness and dues execution of actionable document;  Denial of allegations of usury;  Motion to set aside order of default;  Answer to written interrogatories;  Answer to request for admission. Affidavit         

of merit or supporting affidavit is required in the following: Motion for summary judgment or opposition thereto; Motion for new trial; Affidavit of third-party claim on levied property; Proof required of redemptioner; Complaint with prayer for preliminary attachment; Affidavit of third-party claim on attached property; Motion to dissolve preliminary injunction on ground of irreparable damage to movant while adverse party can be fully compensated Complaint for replevin: Claim against estate of decedent.

How pleading is verified A pleading is verified by an affidavit SJS ‘13 – Comprehensive Reviewer

Page 47

(3) that the affiant has read the pleading and (4) that the allegations therein are true and correct of his personal knowledge or based on authentic records. NOTE: A (4) (5) (6)

pleading required to be verified shall be treated as an unsigned pleading if it contains a verification based on “information and belief,” upon “knowledge, information and belief,” or lacks a proper verification

Remedies  The court may order the correction of the pleading if lacking verification  The court may also acct on the pleading despite failure to properly verify if under the circumstances, strict compliance with the rules may be dispensed with  The absence of verification may be corrected by requiring an oath. Certification against forum shopping Forum shopping is the filing of multiple suits in different courts, either simultaneously or successively, involving the same parties, to ask the courts to rule on the same or related causes and/or to grant the same or substantially the same relief.  It is an act of malpractice  The same shall constitute direct contempt, a cause for administrative sanctions, as well as a ground for the summary dismissal of the case with prejudice. The certification against forum shopping is a sworn statement by the plaintiff or principal party certifying in an initiatory pleading: (d) that he has not commenced any action or filed any claim involving the same issues in any court, tribunal or quasijudicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (e) if there is such other pending action or claim, a complete statement of the present status thereof; and (f) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed. NOTE: The certification must be executed by the party NOT the counsel, unless the latter is authorized specifically to do so. A certification signed by the counsel is a defective certification and is a valid cause for dismissal. BUT This rule must be liberally interpreted:  Failure of parties to sign because they were abroad may be a reasonable cause to exempt the parties from compliance with the requirement  Signing by one of the petitioners was held to be substantial compliance This requirement is mandatory in the filing of a complaint and other initiatory pleading, but it is NOT jurisdictional. The rule applies also to special civil actions. Initiatory pleadings include (7) Original complaint; (8) Permissive counterclaim; (9) Cross-claim; (10) Third (fourth, etc.)-party complaint; (11) Complaint in intervention; and (12) Petition or application wherein the party asserts his claim or relief. NOTE: No certification required for a compulsory counterclaim since it is NOT an initiatory pleading. Effect of failure to comply (1) It shall NOT be curable by mere amendment of the complaint or other initiatory pleading. (2) BUT it shall be cause for the dismissal of the case without prejudice, unless otherwise provided, upon motion and after hearing. Effect of the submission of a false certification or non-compliance with any of the undertakings therein: (1) Indirect contempt; (2) Administrative and criminal actions. Effect of (1) (2) (3)

willful and deliberate forum shopping by the party or his counsel: ground for summary dismissal with prejudice direct contempt, and a cause for administrative sanctions. (Sec. 5, Rule 7)

How to determine existence of forum shopping The most important question is whether the elements of litis pendentia are present OR whether a final judgment in one case will result to res judicata. The TEST is whether in the two or more cases pending, there is: (d) identity of parties; (e) identity of rights or causes of action, and (f) identity of reliefs sought. AO-AS v. CA SJS ‘13 – Comprehensive Reviewer

Page 48

(491 SCRA 353, 2006)

If the forum shopping is not considered willful and deliberate, the subsequent cases shall be dismissed without prejudice on one of the two grounds mentioned above. However, if the forum shopping is willful and deliberate, both (or all, if there are more than two) actions shall be dismissed with prejudice. FACTS: The Lutheran Church in the Philippines (LCP) has local Lutheran congregations in three districts, managed by seven directors—two for each district, and one as the national president. Three districts were added, thus a total of eleven (11) directors managed the LCP. Controversies arose when the board of directors terminated the services of Eclesio Hipe, business mana45ger and corporate secretary. The Ao-As group, former LCP directors and officers, filed SEC-SICD Case No. 3587 against the Batong group, the LCP directors at that time. The case sought accounting and damages, and appointment of a management committee. Its causes of action are: (a) non-liquidation and/or non-accounting of the P64,000 proceeds of the La Trinidad land transaction; (b) onliquidation and/or unaccounting of P323,750 worth of cash advances; (c) dissipation of the P4.8M general fund; (d) nonregistration of LCP’s land in Leyte; (e) severance of church-partnership with Lutheran Church-Missouri Synod; and (f) transfer of corporate books. Several other cases were also instituted against the Batong group. An NLRC case questioned the board resolutions which terminated employees, a Civil Case questioned another board resolution authorizing the transfer of corporate records, and another SEC-SICD Case (No. 3524) questioned the legality of the 11 members of the LCP Board. Also, in another SEC Case (No. 3556), a motion was made to appoint a management committee. This motion was denied since the same is an incident of SEC Case 3587. After hearing in SEC Case 3587, the SEC-SICD ordered the creation of a management committee and declared all board resolutions passed by the LCP board void ab initio. The CA, however, ruled that the Ao-As group were guilty of forum shopping. ISSUE: Whether the Ao-As group is guilty of forum shopping NO. The six grounds originally relied upon by the Ao-As group in SEC Case 3587 are entirely different from the causes of action in the NRLC, Civil, and the two other SEC cases. It is true that the causes of action in the latter cases were included as additional grounds in Case 3587 for the appointment of properties and assets of LCP which may have come into their possession during their incumbency as officers and/or directors of LCP. However, the creation of a management committee and the prayer for accounting could not have been asked for in the labor and forcible entry cases. As regards the other SEC Cases, though, the Ao-As group could have indeed prayed for the creation of the management committee and the accounting of the funds of the LCP. In fact, the petitioner in SEC-SICD Case No. 3556 had prayed for the appointment of a management committee in a motion which was subsequent to the filing of SEC-SICD Case No. 3857. SEC dismissed Case No. 3556 considering that it was one of the incidents of Case No. 3857. In effect, it was denied on the ground of litis pendentia. However, this is not a case of willful and deliberate forum shopping and, hence, the Case No. 3857 should not be dismissed. The reason for this is the strict evidentiary requirement needed to grant a prayer to create a management committee. The SEC has the power to create a management committee when there is “imminent danger of dissipation, loss, wastage or destruction of assets or other properties or paralization of business operations” It should be difficult to deduce the "imminent danger of dissipation, loss, wastage or destruction of assets or other properties" from an allegation of a single act of previous misappropriation or dissipation on the part of the Batong group. It is often only when the previous misappropriations and dissipations have become extensive and out of control that it can be candidly said that there is an imminent danger of further dissipation. The Ao-As group cannot be faulted therefore for not praying for the creation of a management committee in the first couple of cases it filed with the SEC, and neither can they be faulted for using the causes of action in previously filed cases to prove their allegation of imminent dissipation. We cannot rule out the possibility that the danger of imminent dissipation of the corporate assets became apparent only in the acts of the respondents subsequent to the filing of the first two SEC cases. As the present jurisprudence now stands, forum shopping can be committed in three ways: (1) filing multiple cases based on the same cause of action and with the same prayer, the previous case not having been resolved yet (litis pendentia); (2) filing multiple cases based on the same cause of action and the same prayer, the previous case having been finally resolved (res judicata); and (3) filing multiple cases based on the same cause of action but with different prayers (splitting of causes of action, where the ground for dismissal is also either litis pendentia or res judicata). If the forum shopping is not considered willful and deliberate, the subsequent cases shall be dismissed without prejudice on one of the two grounds mentioned above. However, if the forum shopping is willful and deliberate, both (or all, if there are more than two) actions shall be dismissed with prejudice. Forum shopping certificate for a corporation When plaintiff is a juridical person—this may be signed by the properly authorized persons. PAL v. FASAP (479 SCRA 605, 2006)

SJS ‘13 – Comprehensive Reviewer

Page 49

Only individuals vested with authority by a valid board resolution may sign the certificate of non-forum shopping in behalf of a corporation. In addition, proof of said authority must be attached. Failure to provide a certificate of non-forum shopping is sufficient ground to dismiss the petition. Likewise, the petition is subject to dismissal if a certification was submitted unaccompanied by proof of the signatory’s authority. FACTS: Flight Attendants and Stewards Association of the Philippines (FASAP) and Bhagwani filed a complaint for unfair labor practice, illegal suspension and illegal dismissal against PAL and some of its officers before the NLRC Labor Arbiter The Labor Arbiter upheld FASAP and Bhagwani and, ordered PAL to pay them damages. The NLRC modified the decision, setting aside the finding that PAL was guilty of unfair labor practice, but affirming the rest of the decision. PAL filed a petition for certiorari with the CA, accompanied by a Certification of Non-Forum Shopping executed by Cesar Lamberte and Susan Del Carmen, VP Human Resources and Asst. VP Cabin Services of PAL, respectively, who are not parties to the case. The certification was without proof that the two affiants had authority to sign in behalf of petitioners. The CA dismissed the case for failure to show the affiants’ authority to sign for PAL and for failure of the other petitioners to join in the execution of the certification. A motion for reconsideration was filed with a Secretary’s Certificate attached evidencing that affiants Lamberte and Del Carmen have been authorized by board resolution to initiate and/or cause to be filed on behalf of PAL petitions and pleadings in all labor-related cases. A perusal of the Secretary’s Certificate submitted reveals that the authority to cause the filing of the petition was granted on February 15, 2000. The petition, on the other hand, was filed on January 24, 2000 and was dismissed by the CA on January 31, 2000. As to the other petitioners, it was argued that they are mere nominal parties so that their failure to execute the certification does not justify dismissal of the petition. CA denied the motion. ISSUE: Whether the certification of non-forum shopping was properly executed NO. The certification of non-forum shopping attached was without proof of authority to sign. When a motion for reconsideration was filed, a Secretary’s Certificate was submitted as proof that the board of directors of PAL had authorized the two to execute the certificate. Nonetheless, the Court finds that this belated submission is an insufficient compliance with the certification requirement. The required certification must be valid at the time of filing of the petition. An invalid certificate cannot be remedied by the subsequent submission of a Secretary’s Certificate that vests authority only after the petition had been filed. At the time the certification was signed, Lamberte and Del Carmen were not duly authorized and, consequently, their signing and attestations were not in representation of PAL. This effectively translates to a petition that was filed without a certification at all as none was issued by PAL, the principal party to the case. Rule 65, Section 1, in relation to Rule 46, Section 3 of the Rules of Court requires the certification of non-forum shopping to be executed by the corresponding petitioner or petitioners. As no distinction is made as to which party must execute the certificate, this requirement is made to apply to both natural and juridical entities. When the petitioner is a corporation, the certification should be executed by a natural person. Furthermore, not just any person can be called upon to execute the certification, although such a person may have personal knowledge of the facts to be attested to. The power of a corporation to sue in any court is generally lodged with the board of directors, who can delegate the physical acts needed to sue, which may be performed only by natural persons, to its attorneys-in-fact by a board resolution, if not already authorized under the corporate by-laws. Thus, only individuals vested with authority by a valid board resolution may sign the certificate of non-forum shopping in behalf of a corporation. In addition, proof of said authority must be attached. Failure to provide a certificate of non-forum shopping is sufficient ground to dismiss the petition. Likewise, the petition is subject to dismissal if a certification was submitted unaccompanied by proof of the signatory’s authority. Filing and service defined Filing—the act of presenting the pleading or other paper to the clerk of court Service—the act of providing a party with a copy of the pleading or paper concerned.  If any party has appeared by counsel, service upon him shall be made upon his counsel or one of them, unless service upon the party himself is ordered by the court.  Where one counsel appears for several parties, he shall only be entitled to one copy of any paper served upon him by the opposite side. (Sec. 2, Rule 3) Coverage This Rule governs (1) the filing of all pleadings and other papers, and (2) the service thereof EXCEPT those for which a different mode of service is prescribed (Sec. 1, Rule 13) Papers required to be filed and served— (1) judgments, (2) resolutions, SJS ‘13 – Comprehensive Reviewer

Page 50

(3) orders, (4) pleading subsequent to the complaint, (5) written motions, (6) notices, (7) appearances, (8) demands, (9) offers of judgment, or (10) similar papers shall be filed with the court, and served upon the parties affected (Sec. 4, Rule 13) Modes of service There are two modes of service of pleadings, motions, orders, judgments and other papers: (1) personally, or (2) by mail In general, filing The filing of pleadings, appearances, motions, notices, orders, judgments and all other papers shall be made (1) Personally— By presenting the original copies thereof, plainly indicated as such, personally to the clerk of court • the clerk of court shall endorse on the pleading the date and hour of filing. (2) By mail— By sending them by registered mail. • The date of the mailing of motions, pleadings, or any other papers or payments or deposits, as shown by the post office stamp on the envelope or the registry receipt, shall be considered as the date of their filing, payment, or deposit in court. The envelope shall be attached to the record of the case. (Sec. 3, Rule 13) In general, service Service of pleadings, motions, notices, orders, judgments and other papers shall be made either (1) personally or (2) by mail. (Sec. 5, Rule 13) Service (1) (2) (3)

of judgments, final orders, or resolutions.—Judgments, final orders or resolutions shall be served personally by registered mail, or by publication, at the expense of the prevailing party, in cases where a party was a. summoned by publication, and b. has failed to appear in the action. (Sec. 9, Rule 13)

Personal Personal service of the papers may be made (1) by delivering personally a copy to the party or his counsel, (2) by leaving it in his office with his clerk or with a person having charge thereof, or (3) by leaving the copy, between 8am and 6pm, at the party’s or counsel’s residence, if known, with a person of sufficient age and discretion then residing therein, in cases where a. no person is found in his office, b. his office is not known, or c. he has no office, then. (Sec. 6, Rule 13) Mail Service (1) (2) (3) (4) (5)

by registered mail shall be made by depositing the copy in the office, in a sealed envelope, plainly addressed to the party or his counsel at his office, if known, otherwise at his residence, if known, with postage fully prepaid, and with instructions to the postmaster to return the mail to the sender after ten (10) days if undelivered.

Service by ordinary mail may be done if no registry service is available in the locality of either the sender or the addressee (Sec. 7, Rule 13) Substituted service Substituted service is made if service of pleadings, motions, notices, resolutions, orders and other papers cannot be made under the two preceding sections, the office and place of residence of the party or his counsel being unknown. Substituted service is done (1) by delivering the copy to the clerk of court, with proof of failure of both personal service and (2) service by mail. The service is complete at the time of such delivery. (Sec. 8, Rule 13) Priority Whenever practicable, the service and filing of pleadings and other papers shall be done personally. SJS ‘13 – Comprehensive Reviewer

Page 51

  

A resort to other modes must be accompanied by a written explanation why the service or filing was not done personally. Exception: Papers emanating from the court. A violation of this Rule may be cause to consider the paper as not filed. (Sec. 11, Rule 13)

Upon party in default (Sec. 3, Rule 9) A defending party shall be declared in default when (1) Ground: He fails to answer within the time allowed therefor, the court shall, (2) The claiming party files a motion to declare the defending party in default, furnishing proof of failure to answer (3) Said party gives notice of such motion to the defending party, The court shall proceed to render judgment granting the claimant such relief as his pleading may warrant,  unless the court in its discretion requires the claimant to submit evidence.  Such reception of evidence may be delegated to the clerk of court. (1a, R18) (a) Effect of order of default.—A party in default shall be entitled to notice of subsequent proceedings but NOT to take part in the trial. (b) Relief from order of default.—A party declared in default may at any time after notice thereof and before judgment file a motion under oath to set aside the order of default upon proper showing that his failure to answer was due to fraud, accident, mistake or excusable negligence and that he has a meritorious defense. In such case, the order of default may be set aside on such terms and conditions as the judge may impose in the interest of justice. (c) Effect of partial default.—When a pleading asserting a claim states a common cause of action against several defending parties, some of whom answer and the others fail to do so, the court shall try the case against all upon the answers thus filed and render judgment upon the evidence presented. (d) Extent of relief to be awarded.—A judgment rendered against a party in default shall not exceed the amount or be different in kind from that prayed for nor award unliquidated damages. (e) Where no defaults allowed.—If the defending party in an action for annulment or declaration of nullity of marriage or for legal separation fails to answer, the court shall order the prosecuting attorney to investigate whether or not a collusion between the parties exists, and if there is no collusion, to intervene for the State in order to see to it that the evidence submitted is not fabricated. (Sec. 3, Rule 9) Completion of service Personal service—  upon actual delivery Service by ordinary mail—  upon the expiration of ten (10) days after mailing, unless the court otherwise provides. Service by registered mail—  upon actual receipt by the addressee, or  after five (5) days from the date he received the first notice of the postmaster, whichever date is earlier. (Sec. 10, Rule 13) Proof of filing and service The filing of a pleading or paper shall be proved by Personal service (1) its existence in the record of the case; (2) the written or stamped acknowledgment of its filing by the clerk of court on a copy of the same, if it is not in the record, but is claimed to have been filed personally; Registered mail (1) by the registry receipt and (2) by the affidavit of the person who did the mailing, containing a. a full statement of the date and place of depositing the mail in the post office in a sealed envelope addressed to the court, b. with postage fully prepaid, and c. with instructions to the postmaster to return the mail to the sender after ten (10) days if not delivered. (Sec. 12, Rule 13) The service of a pleading or paper shall be proved by Personal service (1) written admission of the party served, (2) the official return of the server, or (3) the affidavit of the party serving, containing a full statement of the date, place and manner of service. Ordinary mail SJS ‘13 – Comprehensive Reviewer

Page 52

(1) affidavit of the person mailing of facts showing compliance with section 7 of this Rule. • Service by ordinary mail may be done if no registry service is available in the locality of either the sender or the addressee (Sec. 7, Rule 13) Registered Mail— (1) such affidavit and (2) the registry receipt issued by the mailing office. 

NOTE: The registry return card shall be filed immediately upon its receipt by the sender, or in lieu thereof of the unclaimed letter together with the certified or sworn copy of the notice given by the postmaster to the addressee. (Sec. 13, Rule 13)

Lis pendens A notice of lis pendens may be recorded in the office of the registry of deeds of the province in which the property is situated (1) by the plaintiff and the defendant; (2) in an action affecting the title or the right of possession of real property, (3) when affirmative relief is claimed in the answer, Said notice shall contain (1) the names of the parties (2) the object of the action or defense, and (3) a description of the property in that province affected thereby. Effects (1) Constructive notice to a purchaser or encumbrancer from the time of filing such notice for record. (2) Is notice only against the parties designated by their real names. Cancellation The notice of lis pendens hereinabove mentioned may be cancelled (1) only upon order of the court, (2) after proper showing that a. the notice is for the purpose of molesting the adverse party, or b. that it is not necessary to protect the rights of the party who caused it to be recorded. (Sec. 14, Rule 13)

AMENDED AND SUPPLEMENTAL PLEADINGS Amendments In general Pleadings may be amended (1) by adding or striking out an allegation or the name of any party, or (2) by correcting a mistake in the name of a party or a mistaken or inadequate allegation or description in any other respect Purpose: So that the actual merits of the controversy may speedily be determined, without regard to technicalities, and in the most expeditious and inexpensive manner. Liberality BARFEL DEV’T. CORP v. CA (223 SCRA 268)

As a general policy, liberality in allowing amendments is greatest in the early stages of a law suit, decreases as it progresses and changes at times to a strictness amounting to a prohibition. This is further restricted by the condition that the amendment should not prejudice the adverse party or place him at a disadvantage. FACTS: Barfel sold to Reginas two parcels of land with two houses erected thereon in Ayala Alabang, stipulating that the Barfel will apply the payment of the cash portion of the purchase price to the removal of any and all liens on the properties. The contract stated that apart from a BPI mortgage and the Deed of Restrictions annotated at the back of the title, the subject property was free from all liens. Reginas made the downpayment upon signing the agreement. SJS ‘13 – Comprehensive Reviewer

Page 53

It was later discovered that there was apparently a second mortgage with the PISO/Central Bank. Upon this information, Victor Barrios assured the buyer that the second mortgage has been reduced and that he will submit the necessary documents to support a legal and valid acceptable arrangement for the release of such mortgage. Thereafter, the PSB granted Reginas loan, which again subjected aforesaid properties to a mortgage. PSB now promises to pay directly to BPI from the proceeds of the loan and pay the sellers the purchase price. The latter conformed to the arrangement. Given the prior assurance of a workable arrangement regarding the Central Bank mortgage, the buyers now manifested its willingness to pay P2M ahead of the proceeds for the PSB loan. Notwithstanding such negotiations however, the sellers here are in gross and evident bad faith and malicious breach of contract for they have failed to comply with the obligation to release the second mortgage. BPI further averred that the sellers actually disauthorized them to consummate the transaction despite previous arrangements. Reginas and Zaragoza filed a complaint for specific performance and damages against Barfel and the Spouses Barrios. Pre-trial was conducted and both parties presented evidence. During Barfel’s presentation, Reginas filed a motion for leave to file an amended complaint and motion to admit the same. The amendment sought to implead PISO bank as additional party defendant and compel it to accept payment of the existing second mortgage from Reginas, since no complete relief can be had unless the second mortgage is released. Barfel opposed. The RTC admitted the amended complaint. The CA sustained the lower court’s order saying that the amendment was made without intent to delay the action. The essence of liberal construction was accorded by the courts. ISSUE: Whether the amended complaint should be allowed NO. The amendment was made with intent to delay the action and substantially alters the cause of action of Reginas and the defense of Barfel. After the case is set for hearing, substantial amendments may be made only upon leave of court. Such leave may be refused if it appears that the motion was made with intent to delay the action or that the cause of action or defense is substantially altered. (Sec. 3, Rule 10) The amendment sought by private respondents, which is to include a new party defendant at a late stage in the proceeding, is not a formal but a substantial one. Private respondents will have to present additional evidence on the PISO second mortgage. The effect would be to start trial anew with the parties recasting their theories of the case. The correct amount of the second mortgage owed by petitioners to PISO bank (apparently a controverted point), would have to be litigated and this could be time consuming. As a general policy, liberality in allowing amendments is greatest in the early stages of a law suit, decreases as it progresses and changes at times to a strictness amounting to a prohibition. This is further restricted by the condition that the amendment should not prejudice the adverse party or place him at a disadvantage. Form When any pleading is amended, the following shall be filed: (1) a new copy of the entire pleading, (2) incorporating the amendments, which shall be indicated by appropriate marks,. (Sec. 7, Rule 13) Effect An amended pleading supersedes the pleading it amends.  However, admissions in superseded pleadings may be received in evidence against the pleader; and  Claims or defenses alleged therein not incorporated in the amended pleading shall be deemed waived. (Sec. 8, Rule 10) Kinds Formal amendment A defect in the designation of the parties and other clearly clerical or typographical errors may be summarily corrected by the court at any stage of the action,  at its initiative or on motion,  provided so no prejudice is caused thereby to the adverse party. (Sec. 4, Rule 10) Substantial amendments Matter of right A party may amend his pleading once as a matter of right  at any time before a responsive pleading is served or,  in the case of a reply, at any time within ten (10) days after it is served. (Sec. 2, Rule 10) Matter of discretion 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.  Substantial amendments may be made only (1) upon motion filed in court, and (2) after notice to the adverse party, and an opportunity to be heard. (Sec. 3, Rule 10) To conform to evidence Amendment to conform to evidence Issues not raised by pleadings may be deemed as if they were raised: (1) When issues are not raised by the pleadings, and (2) They are tried with the express or implied consent of the parties Such amendment of the pleadings as may be necessary SJS ‘13 – Comprehensive Reviewer

Page 54

  may be (1) (2)

to cause them to conform to the evidence and to raise these issues made upon motion of any party at any time, even after judgment;

Failure to amend Failure to amend does not affect the result of the trial of these issues. Amendment to authorize presentation of evidence This amendment may be made  if evidence is objected to at the trial on the ground that it is not within the issues made 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 served thereby. The court may grant a continuance to enable the amendment to be made. (Sec. 5, Rule 10) SWAGMAN HOTELS & TRAVEL, INC. v. CA (2008)

The curing effect under Section 5 of Rule 10 of the 1997 Rules of Civil Procedure is applicable only if a cause of action exists at the time the complaint is filed, but the complaint is defective for failure to allege the essential facts. A complaint whose cause of action has not yet accrued cannot be cured or remedied by an amended or supplemental pleading alleging the existence or accrual of a cause of action while the case is pending. FACTS: Swagman Hotels and Travel, Inc., obtained from respondent Neal B. Christian loans evidenced by three promissory notes dated 1997, each in the amount of $50,000 payable after three years (200) from its date with a 15% interest per annum payable every three months. Later on, Christian informed the Swagman that he was terminating the loans and demanded from the latter payment in the total amount of $150,000 plus the unpaid interests of $13,500. In 1999, Christian filed a complaint for the unpaid loans, alleging that petitioner, instead of paying the 15% monthly interest, started paying only 6%. Swagman filed an Answer, raising as defense the lack of cause of action of the principal obligations because the three promissory notes were not yet due and demandable. The trial court ruled that the first two promissory notes were already due and demandable and ordered Swagman to pay the amount of the checks plus 6% interest. It ruled that although at the time of the complaint, the notes were not yet due and demandable, it was cured when they became due during the trial. ISSUE: Whether or not lack of cause of action may be cured by evidence presented during the trial and amendments to conform to the evidence NO. Amendments of pleadings are allowed under Rule 10 in order that the actual merits of a case may be determined in the most expeditious and inexpensive manner without regard to technicalities, and that all other matters included in the case may be determined in a single proceeding, thereby avoiding multiplicity of suits. Section 5 thereof applies to situations wherein evidence not within the issues raised in the pleadings is presented by the parties during the trial, and to conform to such evidence the pleadings are subsequently amended on motion of a party. The curing effect under Section 5 is applicable only if a cause of action in fact exists at the time the complaint is filed, but the complaint is defective for failure to allege the essential facts. It thus follows that a complaint whose cause of action has not yet accrued cannot be cured or remedied by an amended or supplemental pleading alleging the existence or accrual of a cause of action while the case is pending. Such an action is prematurely brought and is, therefore, a groundless suit, which should be dismissed by the court upon proper motion seasonably filed by the defendant. The underlying reason for this rule is that a person should not be summoned before the public tribunals to answer for complaints which are immature. Remedies Periods to answer Amendments Amendment as a matter of right— The defendant shall answer the same within fifteen (15) days after being served with a copy thereof. Amendment not a matter of right— The defendant shall answer within ten (10) days from notice of the Order admitting the same.  An answer earlier filed may serve as the answer to the amended complaint, if no new answer is filed. SJS ‘13 – Comprehensive Reviewer

Page 55

Applicability This Rule shall apply to the answer to (1) an amended counterclaim, (2) amended cross-claim, (3) amended third (fourth, etc.)— party complaint, and (4) amended complaint-in-intervention. (Sec. 3, Rule 11) Supplemental complaint This may be answered within ten (10) days from notice of the order admitting the same, unless a different period is fixed by the court.  If no new or supplemental answer is filed— The answer to the complaint shall serve as the answer to the supplemental complaint. (Sec. 7, Rule 11) Supplemental pleadings A supplemental pleading setting forth transactions, occurrences or events which have happened since the date of the pleading sought to be supplemented may be permitted (1) upon motion of a party (2) reasonable notice and (3) upon such terms as are just Period to answer The adverse party may plead thereto within ten (10) days from notice of the order admitting the supplemental pleading. (Sec. 6, Rule 11) Distinguished from amended pleadings SHOEMART, INC. v. CA (190 SCRA 189, 1990)

A supplemental pleading supplies deficiencies in aid of an original pleading not to entirely substitute the latter. FACTS: Anson Emporium Corp. (Anson) leased from Shoemart portion of a building for two years. The lease stipulated that if after termination of the lease, Shoemart permits Anson to remain, the lease shall be understood to be on a month to month basis in the absence of a contrary written agreement. Anson remained in possession after the two-year period but on an increased rental. Four years later, Shoemart terminated the lease and gave notice to Anson to vacate, which the latter refused. A complaint for ejectment was filed against him with the MTC. Shoemart asked for, and was granted, leave to file supplemental complaint which alleged that the rental of all tenants of the premises had been increased to P45,142.00, which Anson refused to pay. Anson alleged that Shoemart’s claim for increased rentals has been barred. MTC ruled for Anson. The RTC reversed the judgment and ordered Anson to vacate the premises and to pay P34,622 and P45,142 respectively for the two lease agreements, with 1% interest from October 1977. Shoemart filed a motion for reconsideration of the award of damages, saying it is less than what is really due. RTC granted this motion. CA affirmed the ejectment of respondent but reduced the damages awarded by stating that the 1% interest will start to run from October 1987. Private respondent sought the correction of the clerical error regarding date of the effectivity of the payment for damages. Said motion was granted Petitioner's motion for reconsideration seeking the reinstatement of the RTC’s decision was denied. CA ruled that petitioner’s claim for damages is limited to the P45,142 alleged in the supplemental complaint. ISSUE: Whether the subsequently amended complaint in the case at bar renders the original complaint abandoned or inexistent NO. Petitioner's recovery is not limited by the amount of P45,142.00 prayed for in the supplemental complaint as increased rental. This is not a case of a complaint subsequently amended, the effect of which is to render the original complaint abandoned or inexistent and let the amendment take form as the sole substitute upon which the case stands for trial. A supplemental complaint or pleading supplies deficiencies in aid of an original pleading, not to entirely substitute the latter. A perusal of the original complaint shows that it prayed, among others, that the private respondent be ordered to pay petitioner P34,622.00 and all other rentals and charges that may be due until respondent vacates the premises. Petitioner, therefore, did not foreclose its right to demand increased rentals that may be recovered expressed in terms of the fair rental value or the reasonable compensation for the use and occupation of the real property. Unlike in an amended complaint, the original complaint exists side by side with the supplemental complaint. The supplemental pleading merely served to aver supervening facts which were then not ripe for judicial relief when the original pleading was filed. Supplemental pleadings are meant to supply deficiencies in aid of the original pleading and not to dispense with the latter. The failure of petitioner to amend its complaint or file additional supplemental pleadings to allege subsequent rental increases is of no moment. In view of the failure of private respondent to object to the presentation of evidence showing that there were four (4) rental increases on the subject premises although three (3) of said increases are not alleged in the pleadings, judgment may be rendered validly as regards the said increases or issues which shall be considered as if they have been raised in the pleadings. As found by the RTC, private respondent did not controvert the evidence submitted by petitioner in determining the fair rental value of the premises including those imposed on all other tenants of petitioner occupying the Makati Arcade. If, indeed, the rental SJS ‘13 – Comprehensive Reviewer

Page 56

increases were unconscionable, respondent should have at least presented evidence to substantiate its claim. The burden of proof to show that the rental demanded is unconscionable or exorbitant rests upon private respondent as the lessee. Private respondent failed to discharge its burden when it omitted to present any evidence at all on what it considers is the fair rental value other than what were submitted by petitioner. As a matter of fact, all the other tenants did not question the reasonableness of the rental increases BILL OF PARTICULARS/INTERVENTION Bill of particulars Also called bill of definite statement  It is a motion that applies to any pleading which in the perception of the movant contains ambiguous allegations (Riano)  If a complaint makes out a cause of action, the ambiguity in some allegations or failure to allege facts with sufficient particularity does not justify the filing of a motion to dismiss. The proper remedy is to file a motion for bill of particulars. Office and Purpose  To seek an order from court directing the pleader to submit a bill of particulars which avers matters with “sufficient definiteness or particularity” to enable the movant to file his responsive pleading. (Sec. 1, Rule 12)  “The proper preparation of an intelligent answer requires information as to the precise nature, character, scope and extent of the cause of action in order that the pleader may be able to squarely meet the issues raised, thereby circumscribing them within determined confines and preventing surprises during trial, and in order that he may set forth his defenses which may not be so readily availed of if the allegation controverted are vague, indefinite, uncertain or are mere general conclusions” (Virata v. Sandiganbayan)  “The proper office of a bill of particulars is to inform the opposite party and the court of the precise nature and character of the ccause of action.” (Tan v. Sandiganbayan)

VIRATA v. SANDIGANBAYAN (221 SCRA 52, 1993)

Object and purpose of a Bill of particular: (1) Amplify or limit a pleading (2) Specify more minutely and particularly a claim or defense set up and pleaded in general terms (3) 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 (4) Apprise the opposite party of the case which he has to meet (5) Define, clarify, particularize, and limit or circumscribe the issues in the case (6) Expedite the trial, and assist the court (7) Prevent injustice or do justice in the case when that cannot be accomplished without the aid of such a bill. (8) Proper preparation of a responsive pleading (9) Proper preparation of an intelligent answer. FACTS: Cesar Virata was among the forty-four co-defendants of Benjamin (Kokoy) Romualdez in a complaint filed by the Sandiganbayan. The complaint was amended thrice, the last amendment thereto is denominated as Second Amended Complaint. The plaintiff alleged four actionable wrongs against petitioner: (1) his participation in the reduction of the electric franchise tax and the tariff duty of fuel oil imports by all public utilities (2) his participation in the the approval of the '3-Year Program for the Extension of MERALCO's Services to Areas’ (3) his participation in the formation of Erectors Holdings, Inc. and (4) his acting as a dummy of corporations controlled by Romualdez and Marcos. Petitioner moved to dismiss the case on various grounds including the failure of the expanded Second Amended Complaint to state a cause of action. The motion was denied by Sandiganbayan. SC affirmed the Sandiganbayan, and advised petitioner that if he perceive some ambiguity or vagueness therein, the remedy is not a motion to dismiss, but rather for a bill of particulars. SJS ‘13 – Comprehensive Reviewer

Page 57

Petitioner filed a motion for bill of particulars, claiming that the general and sweeping allegations of the Second Amended Complaint and the purported illegal acts imputed to them as well as the alleged causes of actions are vague and ambiguous. They are not averred with sufficient definiteness or particularity as would enable defendant Virata to properly prepare his answer or responsive pleading. Sandiganbayan partially granted the motion; of the four actionable wrongs, it granted the motion with respect only to the fourth, since the other three actionable wrongs are not squarely under the Tantuico case. Not satisfied with the partial grant of the motion, petitioner filed the instant petition under Rule 65 of the Revised Rules of Court. ISSUE: Whether the Motion for Bill of Particulars should be granted totally YES. It was grave error for the Sandiganbayan to state that "[a]lleging the specific nature, character, time and extent of the phrase 'active collaboration' would be a mere surplus age and would not serve any useful purpose" for precisely, without any amplification or particularization thereof, the petitioner would be hard put in meeting the charges squarely and in pleading appropriate defenses. Nor can We accept the public respondent's postulation that "any question as to the validity or legality of the transactions involved in the charges against defendant-movant is irrelevant and immaterial in the resolution of the instant incident, inasmuch as the same is a matter of defense which shall have its proper place during the trial on the merits, and on the determination of the liability of defendant-movant after the trial proper." This is absurd, for how may the petitioner set up a defense at the time of trial if in his own answer he was not able to plead such a defense precisely because of the vagueness or indefiniteness of the allegations in the complaint? Unless he pleads the defense in his answer, he may be deprived of the right to present the same during the trial because of his waiver thereof. Since the issues have not as yet been joined and no evidence has so far been adduced by the parties the Sandiganbayan was in no position to conclude that the matters which the. petitioner seeks are "within his intimate or personal knowledge." It is the office or function, as well as object or purpose, of a bill of particulars to (1) amplify or limit a pleading, (2) specify more minutely and particularly a claim or defense set up and pleaded in general terms, (3) 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 (4) apprise the opposite party of the case which he has to meet, (a) to the end that the proof at the trial may be limited to the matters specified, and (b) in order that surprise at, and needless preparation for, the trial may be avoided, and (c) that the opposite party may be aided in framing his answering pleading and preparing for trial. It has also been stated that it is the function or purpose of a bill of particulars to (5) define, clarify, particularize, and limit or circumscribe the issues in the case, to (6) expedite the trial, and assist the court. A general function or purpose of a bill of particulars is to (7) prevent injustice or do justice in the case when that cannot be accomplished without the aid of such a bill. Moreover, the phrase "to enable him properly to prepare his responsive pleading . . ." in Section 1 of Rule 12 implies not just the opportunity to (8) properly prepare a responsive pleading but also to (9) prepare an intelligent answer. The proper preparation of an intelligent answer requires information as to the precise nature, character, scope and extent of the cause of action in order that the pleader may be able to squarely meet the issues raised, thereby circumscribing them within determined confines and, preventing surprises during the trial, and in order that he may set forth his defenses which may not be so readily availed of if the allegations controverted are vague, indefinite, uncertain or are mere general conclusions. What is beyond its scope  “The complaint for which a bill for a more definite statement is sought need only inform the defendant of the essential (or ultimate) facts to enable him, the defendant, to prepare his answer… Any more ‘particulars’ in that event would be evidentiary in character, which must be adduced at the trial proper.” (Tan v. Sandiganbayan) Notes: • • •



If the purpose is for preparation for trial, the appropriate remedy is to avail discovery procedures or pre-trial. It is erroneous to require disclosure of evidence relied upon by the adverse party in a motion for bill of particulars. A motion for bill of particulars to require a pleader to set forth matters showing jurisdiction of a court to render its judgment is not proper.

To clarify allegations in the pleading

TAN v. SANDIGANBAYAN (180 SCRA 34, 1989)

The complaint for which a bill for a more definite statement is sought, need only inform the defendant of the essential (or ultimate) facts to enable the defendant to prepare an intelligent answer. FACTS: The PCGG filed a complaint against the twenty-two petitioners, together with the late Ferdinand Marcos, Mrs. Imelda Marcos, Don Ferry, and Federico Moreno, praying, among others, for the return and reconveyance of all funds and other property impressed with constructive trust in favor of PCGG and the Filipino people, as well as funds and other property acquired by Defendants by abuse of right and power and through unjust enrichment. Subsequently, the PCGG filed an Expanded Complaint. In essence, these are what the PCGG says: 1. The petitioner Lucio Tan was Mr. Marcos' business partner; 2. Through undue influence, coercion, and abuse of light they acquired shareholdings from various firms, and built a business empire therefrom; SJS ‘13 – Comprehensive Reviewer

Page 58

3. 4. 5.

The remaining petitioners acted as their "dummies, nominees, or agents"; Together with the Marcoses, they maneuvered their way into these firms and acquired control thereof; The same were accomplished through unacceptable machinations such as insider trading and similar acts, in violation of existing laws; 6. They also unjustly enriched the petitioners at the expense of the Republic of the Philippines and the Filipino people. Notwithstanding this, the twenty-two petitioners moved for a bill of particulars.The respondent Court denied the petitioners' motion, and denied reconsideration. The petitioners submit that the PCGG's averments are made up of bare generalizations, presumptuous conclusions of fact and law, and plain speculations, for which a motion for a more definite statement or for a bill of particulars allegedly lies. The Sandiganbayan's decided that Paragraphs 14 to 15, inclusive of the Expanded Complaint, had already supplied or provided the specifications and particulars theretofore lacking in the original Complaint. ISSUE: Whether the Motion for Bill of Particulars should be granted NO. The foregoing allegations of the PCGG are actionable wrongs that are proper for a complaint. The PCGG's Complaint/Expanded Complaint is garbled in many respects, but this is no excuse for sloth on the part of the petitioners. The Complaint/Expanded Complaint is complete enough to perish fears of the PCGG pulling a surprise subsequently. It is not the office of a bill of particulars to supply material allegations necessary to the validity of a pleading, or to change a cause of action or defense stated in the pleading, or to state a cause of action or defense other than the one stated. Also it is not the office or function, or a proper object, of a bill of particulars to set forth the pleader's theory of his cause of action or a rule of evidence on which he intends to rely, or to furnish evidential information whether such information consists of evidence which the pleader proposes to introduce or of facts which constitute a defense or offset for the other party or which will enable the opposite party to establish an affirmative defense not yet pleaded. The PCGG's complaint (as amended) does set out allegations, however confusingly put in print, which, interrelated to one another, are enough to support a formal civil charge. If the petitioners are not aware of the PCGG's asseverations, the remedy is to deny the same in their answer for lack of "knowledge or information sufficient to form a belief as to the truth of the said averments. They cannot, however, demand for any more particulars without actually making the PCGG expose its evidence unnecessarily before the trial stage. When to file It should be filed before a responsive pleading.  If directed to a complaint, 15 days after service of summons  If directed to a counterclaim, 10 days from service of the counterclaim  If directed to a reply, 10 days from the service of said reply Requisites The motion shall point out (a) defects complained of; (b) paragraphs wherein they are contained; and (c) the details desired. Action of the court (Sec. 2, Rule 12) Upon receipt of the motion, which the clerk must immediately bring to the court’s attention, the court may (a) deny the motion outright; (b) grant the motion outright; or (c) hold a hearing on the motion. Compliance with order (Sec. 3, Rule 12) If the motion is granted, in whole or in part,  within 10 days from notice of the order,  unless court fixes a different period If order is not obeyed, or in case of insufficient compliance, the court may (a) order the striking out of a. the pleading, or b. portions thereof, or (b) make such orders as it deems just

INTERVENTION Intervention is the legal proceeding by which a person who is not a party to the action is permitted by the court to become a party by intervening in a pending action after meeting the conditions and requirements set by the Rules of Court.  It is a remedy by which a third party becomes a litigant therein to enable him to protect or preserve a right or interest which may be affected by such proceeding.  It is never and independent proceeding, but is ancillary and supplemental to an existing litigation.  It cannot alter the nature of the action and the issues already joined.  It is neither compulsory nor mandatory but only optional and permissive Legal interest— One that is actual and material, direct and of an immediate character, not merely contingent or expectant so that the intervenor will either gain or lose by the direct legal operation of the judgment Requisites; Who may intervene— SJS ‘13 – Comprehensive Reviewer

Page 59

(1) There must be a motion for intervention filed before rendition of judgment by the trial court; and (2) The movant must be a person who has a legal interest a. in the matter in litigation, b. in the success of either of the parties, or an interest against both, or c. 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. (3) The intervention must not unduly delay or prejudice the adjudication of the rights of the original parties and that the intervenor’s rights may not be fully protected in a separate proceeding. (Sec. 1, Rule 19) He may, with leave of court, be allowed to intervene in the action. The court shall consider (1) whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and (2) whether or not the intervenor’s rights may be fully protected in a separate proceeding. (Sec. 1, Rule 19) Time to intervene— The motion to intervene may be filed at any time before rendition of judgment by the trial court.  A copy of the pleading-in-intervention shall be attached to the motion and served on the original parties. (Sec. 2, Rule 19) Pleadings-in-intervention— The intervenor shall file a complaint-in-intervention if he asserts a claim against either or all of the original parties. He shall file an answer-in-intervention if he unites with the defending party in resisting a claim against the latter. (Sec. 3, Rule 19) Answer to complaint-in-intervention— The answer to the complaint-in-intervention shall be filed within fifteen (15) days from notice of the order admitting the same, unless a different period is fixed by the court. (Sec. 4, Rule 19)

Ancillary to pending action SAW v. CA (195 SCRA 740)

Intervention is "an act or proceeding by which a third person is permitted to become a party to an action or proceeding between other persons, and which results merely in the addition of a new party or parties to an original action, for the purpose of hearing and determining at the same time all conflicting claims which may be made to the subject matter in litigation. It is not an independent proceeding, but an ancillary and supplemental one which, in the nature of things, unless otherwise provided for by the statute or Rules of Court, must be in subordination to the main proceeding. It may be laid down as a general rule that an intervenor is limited to the field of litigation open to the original parties. FACTS: Equitable Banking Corporation (Equitable) filed a collection suit with preliminary attachment against Freeman, Inc. (Freeman) and Saw Chiao Lian, its President and General Manager. The petitioners (Ruben Saw, et al.) moved to intervene, alleging that (1) the loan transactions between Chiao Lian and Equitable were not approved by the stockholders representing at least 2/3 of corporate capital; (2) Chiao Lian had no authority to contract such loans; and (3) there was collusion between the officials of Freeman and Equitable in securing the loans. The motion to intervene was denied, and the petitioners appealed to the Court of Appeals. Meanwhile, Equitable and Chiao Lian entered into a compromise agreement which was approved by the lower court. However, it was not complied with, so Equitable secured a writ of execution, and two lots owned by Freeman, Inc. were levied upon and sold at public auction. The CA sustained the denial of the motion for intervention, holding that the compromise agreement will not necessarily prejudice petitioners whose rights to corporate assets are at most inchoate, prior to the dissolution of Freeman, and that intervention under Sec. 2, Rule 12 of the Revised Rules of Court is proper only when one's right is actual, material, direct and immediate and not simply contingent or expectant.

SJS ‘13 – Comprehensive Reviewer

Page 60

ISSUE: Whether petitioners may be allowed to intervene in the action NO. To allow intervention, [a] it must be shown that the movant has legal interest in the matter in litigation, or otherwise qualified; and [b] consideration must be given as to whether the adjudication of the rights of the original parties may be delayed or prejudiced, or whether the intervenor's rights may be protected in a separate proceeding or not. Both requirements must concur as the first is not more important than the second. The interest which entitles a person to intervene in a suit between other parties must be in the matter in litigation and of such direct and immediate character that the intervenor will either gain or lose by the direct legal operation and effect of the judgment. Here, the interest, if it exists at all, of petitioners-movants is indirect, contingent, remote, conjectural, consequential and collateral. While a share of stock represents a proportionate or aliquot interest in the property of the corporation, it does not vest the owner thereof with any legal right or title to any of the property, his interest in the corporate property being equitable or beneficial in nature. Shareholders are in no legal sense the owners of corporate property, which is owned by the corporation as a distinct legal person. Intervention is "an act or proceeding by which a third person is permitted to become a party to an action or proceeding between other persons, and which results merely in the addition of a new party or parties to an original action, for the purpose of hearing and determining at the same time all conflicting claims which may be made to the subject matter in litigation. It is not an independent proceeding, but an ancillary and supplemental one which, in the nature of things, unless otherwise provided for by the statute or Rules of Court, must be in subordination to the main proceeding. It may be laid down as a general rule that an intervenor is limited to the field of litigation open to the original parties. In the case at bar, there is no more principal action to be resolved as a writ of execution had already been issued by the lower court and the claim of Equitable had already been satisfied. The decision of the lower court had already become final and in fact had already been enforced. There is therefore no more principal proceeding in which the petitioners may intervene. Exception METROPOLITAN BANK & TRUST CO. v. PRESIDING JUDGE (182 SCRA 820, 1990)

The intervenor in a pending case is entitled to be heard like any other party. An intervenor’s petition showing it to be entitled to affirmative relief will be preserved and heard regardless of the disposition of the principal action. FACTS: Metrobank loaned Good Earth Emporium (GEE) P4.9M, and the latter mortgaged its air conditioning units as security. Said units were purchased from Raycor Air Control systems. However, Raycor was not completely paid by GEE on the installation costs to the extent of P150,000. When GEE was foreclosed by BPI Consortium, Metrobank filed a complaint for replevin to recover the units. The defendants consortium filed their answer. Subsequently, Raycor filed a motion for leave to intervene, which was granted. The complaint was later dismissed with prejudice when the parties agreed to a compromise settlement, without informing the intervenor Raycor. ISSUE: Whether or not the intervenor in a pending case is entitled to be heard like any other party YES. There is here no final dismissal of the main case. The aforementioned order of the lower court has the effect not only of allowing the intervention suit to proceed but also of vacating its previous order of dismissal. The reinstatement of the case in order to try and determine the claims and rights of the intervenor is proper. The joint motion of therein plaintiff and the original defendants to dismiss the case, without notice to and consent of the intervenor, has the effect of putting to rest only the respective claims of the said original parties inter se but the same cannot in any way affect the claim of private respondent which was allowed by the court to intervene without opposition from the original parties. After the intervenor has appeared in the action, the plaintiff has no absolute right to put the intervenor out of court by the dismissal of the action. The parties to the original suit have no power to waive or otherwise annul the substantial rights of the intervenor. When an intervening petition has been filed, a plaintiff may not dismiss the action in any respect to the prejudice of the intervenor. It has even been held that the simple fact that the trial court properly dismissed plaintiff s action does not require dismissal of the action of the intervenor. An intervenor has the right to claim the benefit of the original suit and to prosecute it to judgment. The right cannot be defeated by dismissal of the suit by the plaintiff after the filing of the petition and notice thereof to the other parties. A person who has an interest in the subject matter of the action has the right, on his own motion, to intervene and become a party to the suit, and even after the complaint has been dismissed, may proceed to have any actual controversy established by the pleadings determined in such action. The trial court's dismissal of plaintiff’s action does not require dismissal of the action of the intervenor. The intervenor in a pending case is entitled to be heard like any other party. A claim-in-intervention that seeks affirmative relief prevents a plaintiff from taking a voluntary dismissal of the main action. Where a complaint in intervention was filed before plaintiff's action had been expressly dismissed, the intervenor's complaint was not subject to dismissal on the ground that no action was pending, since dismissal of plaintiffs action did not affect the rights of the intervenor or affect the dismissal of intervenor's complaint. An intervenor's petition showing it to be entitled to affirmative relief will be preserved and heard regardless of the disposition of the principal action.

SUMMONS (RULE 14) Definition and purpose SJS ‘13 – Comprehensive Reviewer

Page 61

Summons is the writ by which the defendant is notified of the action brought against him.  The issuance of summons is mandatory on the part of the court.  In an action in personam, the purpose of summons is not only to notify the defendant of the action, but also to acquire jurisdiction over his person.  Service of summons is required even if the defendant is aware of the filing of the action against him.  In an action in rem or quasi in rem, the purpose of summons is mainly to satisfy the constitutional requirements of due process. Duty to issue The clerk of court shall issue the corresponding summons to the defendants (1) upon the filing of the complaint and (2) payment of the requisite legal fees. (Sec. 1, Rule 14) Issuance of alias summons— If a summons is returned without being served on any or all of the defendants, the server: (1) shall also serve a copy of the return on the plaintiff’s counsel, (2) stating the reasons for the failure of service, (3) within five (5) days from such failure. The clerk may issue an alias summons (1) on demand of the plaintiff, (2) if the summons has been lost, or (3) if the summons has been returned without being served (Sec. 5, Rule 14) Form Content The summons shall be (1) directed to the defendant, (2) signed by the clerk of court, and (3) under seal. The summons shall contain: (a) the name of the court and the names of the parties to the action; (b) a direction that the defendant answer within the time fixed by these Rules; and (c) a notice that unless the defendant so answers, plaintiff will take judgment by default and may be granted the relief applied for. A copy of the complaint and order for appointment of guardian ad litem, if any, shall be attached to the original and each copy of the summons. (3a) If with leave of court It shall be made (1) by motion, (2) in writing, (3) supported by affidavit of the plaintiff or some person on his behalf, and (4) setting forth the grounds for the application. (Sec. 17, Rule 14) Who serves The summons may be served by (1) the sheriff, (2) his deputy, (3) other proper court officer, or (4) any suitable person authorized by the court issuing the summons, for justifiable reasons. (Sec. 3, Rule 14) On whom In general The clerk of court shall issue the corresponding summons to the defendants. (Sec. 1, Rule 14) Service in person on defendant— Whenever practicable, the summons shall be served (1) by handing a copy thereof to the defendant in person, or (2) by tendering it to him, if he refuses to receive and sign for it. (Sec. 6, Rule 14) Entity without juridical personality When persons associated in an entity without juridical personality are sued under the name by which they are generally or commonly known, service may be effected (1) upon all the defendants by serving upon any one of them, or (2) upon the person in charge of the office or place of business maintained in such name.

SJS ‘13 – Comprehensive Reviewer

Page 62

BUT such service shall not bind individually any person whose connection with the entity has, upon due notice, been severed before the action was brought. (Sec. 8, Rule 14) Associations Domestic Service upon domestic private juridical entity— Service may be made on (1) the president, (2) managing partner, (3) general manager, (4) corporate secretary, (5) treasurer, or (6) in-house counsel. (Sec. 11, Rule 14) List exclusive E.B. VILLAROSA & PARTNER CO., LTD. V. BENITO (312 SCRA 65, 1999)

The 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. The officer upon whom service is made must be the one stated in the statute otherwise the service is insufficient. FACTS: Petitioner E.B. Villarosa, a limited partnership, and private respondent Benita executed a deed of sale with development agreement wherein Villarosa agreed to develop certain parcels of land belonging to Benito into a housing subdivision for the construction of low cost housing units. They further agreed that in case of litigation arising from any dispute, the venue shall be in the proper courts of Makati. The private respondent subsequently filed a Complaint for Breach of Contract and Damages against the petitioner before the Trial Court of Makati for lack of developments within the aforesaid properties. The Service of Summons as well as the complaint was served upon the branch manager in Cagayan de Oro. Plaintiff filed a Special Motion to Dismiss alleging that the summons was improperly served and for lack of jurisdiction over the person of the defendant. Respondent says that the Service was improperly served since it was given to an employee in its branch office and not to one of the persons enunciated in Rule 14 section 11 of the ROC. The trial court ruled in favor of respondent hence this petition. ISSUE: Whether the service of summons on the branch manager was proper NO. Section 11, Rule 14 allows service to the general manager, not the branch manager. The maxim expression unios est exclusion alterius applies in this case. The enumeration of persons whom summons may be served is restricted, limited and exclusive. The new rule specifically changed the proper recipient of a service from a mere manager to a general manager in order to prevent ambiguous and illogical interpretations in the future. The court therefore acquires no jurisdiction over the person of the defendant. In the case at bar, since the service was given to a mere branch manager in one of petitioner’s branches instead of the general manager in its main office in Davao, such service is deemed insufficient. The courts therefore did not acquire jurisdiction over the person of the petitioner. Public corporation When the defendant is the Republic of the Philippines, service may be effected on the Solicitor General. In case of a province, city or municipality, or like public corporations, service may be effected on (1) its executive head, or (2) on such other officer or officers as the law or the court may direct. (Sec. 13, Rule 14) Minors When the defendant is a minor, service shall be made (1) upon him personally and (2) on his legal guardian if he has one, or if none, upon his guardian ad litem whose appointment shall be applied for by the plaintiff, or (3) on his father or mother, In the case of a minor, service may also be made. (Sec. 10, Rule 14) Insane, incompetents When the defendant is insane or otherwise an incompetent, service shall be made (1) upon him personally and (2) on his legal guardian if he has one, or if none, upon his guardian ad litem whose appointment shall be applied for by the plaintiff. (Sec. 10, Rule 14) SJS ‘13 – Comprehensive Reviewer

Page 63

Prisoners When the defendant is a prisoner confined in a jail or institution, service shall be effected upon him  by the officer having the management of such jail or institution who is deemed deputized as a special sheriff for said purpose. (Sec. 9, Rule 14) Unknown defendant or whereabouts unknown Where the defendant is (1) designated as an unknown owner, or the like, or (2) whenever his whereabouts are unknown and cannot be ascertained by diligent inquiry, Service may, by leave of court, be effected upon him by (1) publication in a newspaper of general circulation and (2) in such places and for such time as the court may order. (Sec. 14, Rule 14) Whether in rem, quasi in rem or personal Residents temporarily out When any 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 by extraterritorial service. (Sec. 16, Rule 14) MONTEFALCON v. VASQUEZ (554 SCRA 513, 2008)

The normal method of service of summons on one temporarily absent is by substituted service because personal service abroad and service by publication are not ordinary means of summoning defendants. Summons in a suit in personam against a temporarily absent resident may be by substituted service as domiciliaries of a State are always amenable to suits in personam therein. FACTS: Dolores P. Montefalcon filed a Complaint for acknowledgment and support against Ronnie S. Vasquez before the RTC, alleging that her son Laurence Montefalcon is the illegitimate child of Vasquez. She prayed that Vasquez be obliged to give support to Laurence, whose certificate of live birth he signed as father. A sheriff tried to serve the summons and complaint on Vasquez in Aro-aldao, Nabua, Camarines Sur. Vasquez's grandfather received them as Vasquez was in Manila. Vasquez's mother returned the documents to the clerk of court, who informed the court of the non-service of summons. Petitioners then filed a motion to declare Vasquez in default, which was denied for lack of proper service of summons. The court issued an alias summons on Vasquez at Taguigupon petitioners' motion. A Taguig deputy sheriff served it by substituted service on Vasquez's caretaker. Another alias summons was issued, also received by the caretaker. On petitioners' motion, the trial court declared Vasquez in default for failure to file an answer despite the substituted service of summons. Vasquez was furnished with court orders and notices of the proceedings at his last known address, but these were returned as he had allegedly moved to another place and left no new address. In 2001, the court granted petitioners' prayers. The court added that Vasquez admitted the truth of the allegations by his silence. In the same year, Vasquez surfaced and filed a notice of appeal which petitioners opposed. Appeal was granted. Before the appellate court, he argued that the trial court never acquired jurisdiction over his person. The appellate court noted that the service of summons on Vasquez was "defective" as there was no explanation of impossibility of personal service and an attempt to effect personal service. Petitioners argued that any attempt at personal service of summons was needless as Vasquez already left for abroad as an overseas seafarer when the sheriff served the summons in Taguig. The appellate court, however, denied the motion. ISSUE: Whether there was a valid substituted service of summons YES. To acquire jurisdiction over the person of a defendant, service of summons must be personal, or if this is not feasible within a reasonable time, then by substituted service. It is of judicial notice that overseas Filipino seafarers are contractual employees. As an overseas seafarer, Vasquez was a Filipino resident temporarily out of the country. Hence, service of summons on him is governed by Rule 14, Section 16, which referred to extraterritorial service. 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-seaman. Obviously, personal service of summons was not practicable since the defendant was temporarily out of the country. To proceed with personal service of summons on a defendant-seaman who went on overseas contract work would not only be impractical and futile, it would also be absurd. The substituted service in Taguig was valid and justified because previous attempts were made by the sheriffs to serve the summons, but to no avail. Also, the caretaker who received the alias summons was of suitable age and discretion, then residing at Vasquez's dwelling. There is no quarrel that it was really Vasquez's residence, as evidenced by his employment

SJS ‘13 – Comprehensive Reviewer

Page 64

contract, executed under the supervision and authority of the POEA. It can be presumed that the caretaker must have informed him one way or another of the suit upon his return after finishing his nine-month contract with Fathom Ship Management. In Montalban v. Maximo, we held that the normal method of service of summons on one temporarily absent is by substituted service because personal service abroad and service by publication are not ordinary means of summoning defendants. Summons in a suit in personam against a temporarily absent resident may be by substituted service as domiciliaries of a State are always amenable to suits in personam therein. More importantly, the absence in the final sheriff's return of a statement about the impossibility of personal service does not conclusively prove that the service is invalid. Such failure should not unduly prejudice petitioners if what was undisclosed was in fact done. The sheriff's certificate of service of summons is prima facie evidence of the facts set out in it. Only clear and convincing evidence may overcome its presumption of regularity. Given the circumstances in the present case, we agree that the presumption of regularity in the performance of duty on the part of the sheriff stands. Non-resident When the defendant (1) does not reside and is not found in the Philippines, and (2) the action affects a. the personal status of the plaintiff or b. relates to, or the subject of which is, property within the Philippines, in which the defendant has or claims a lien or interest, actual or contingent; or c. in which the relief demanded consists, wholly or in part, in excluding the defendant from any interest therein, or d. the property of the defendant has been attached within the Philippines, Service may, by leave of court, be effected out of the Philippines (1) by personal service as under section 6; or (2) by publication in a newspaper of general circulation in such places and for such time as the court may order, • in which case a copy of the summons and order of the court shall be sent by registered mail to the last known address of the defendant, (3) or in any other manner the court may deem sufficient. Any order granting such leave shall specify a reasonable time, which shall not be less than sixty (60) days after notice, within which the defendant must answer. (Sec. 15, Rule 14) in rem, quasi in rem SANTOS v. PNOC (556 SCRA 272, 2008)

Where the defendant could not be personally served with summons despite diligent efforts to locate his whereabouts, he may properly be served with summons of publication. FACTS: PNOC Exploration Corp. (respondent) filed a complaint for a sum of money against Pedro T. Santos, Jr. (petitioner), seeking to collect the P698,502.10 unpaid balance of the car loan advanced to Santos when he was still member of the board of directors. Personal service of summons to Santos failed because he could not be located in his last known address despite earnest efforts to do so. On PNOC’s motion, the trial court allowed service of summons by publication. PNOC then caused the publication of the summons in Remate, a newspaper of general circulation in the Philippines. Thereafter, PNOC submitted the affidavit of publication of the advertising manager of Remate and an affidavit of service of the PNOC’s employee to the effect that he sent a copy of the summons by registered mail to Santos’ last known address. When Santos failed to file his answer, PNOC moved the case be set for the reception of its evidence ex parte. The trial court granted the motion. An omnibus motion for reconsideration was then sought by Santos, alleging that the affidavit of service submitted by PNOC failed to comply with Sec. 19, Rule 14, as it was not executed by the Clerk of Court. He also claimed denial of due process for he was not notified of the trial court’s order. PNOC opposed the motion and insisted that it complied with the rules on service by publication. The trial court denied Santos’ motion. ISSUE: Whether there is improper service of summons because summons by publication only applies to actions in rem, and not in personam NO. Since petitioner could not be personally served with summons despite diligent efforts to locate his whereabouts, respondent sought and was granted leave of court to effect service of summons upon him by publication in a newspaper of general circulation. Thus, petitioner was properly served with summons by publication. The in rem/in personam distinction was significant under the old rule because it was silent as to the kind of action to which the rule was applicable. Because of this silence, the Court limited the application of the old rule to in rem actions only. This has been changed. The present rule expressly states that it applies "[i]n any action where the defendant is designated as an unknown owner, or the like, or whenever his whereabouts are unknown and cannot be ascertained by diligent inquiry." Thus, it now applies to any action, whether in personam, in rem or quasi in rem. Service of summons by publication is proved by the affidavit of the printer, his foreman or principal clerk, or of the editor, business or advertising manager of the newspaper which published the summons. The service of summons by publication is complemented by service of summons by registered mail to the defendant's last known address. This complementary service is SJS ‘13 – Comprehensive Reviewer

Page 65

evidenced by an affidavit "showing the deposit of a copy of the summons and order for publication in the post office, postage prepaid, directed to the defendant by registered mail to his last known address." The rules, however, do not require that the affidavit of complementary service be executed by the clerk of court. While the trial court ordinarily does the mailing of copies of its orders and processes, the duty to make the complementary service by registered mail is imposed on the party who resorts to service by publication. The trial court acquired jurisdiction over the person of petitioner by his own voluntary appearance in the action against him. This was equivalent to service of summons and vested the trial court with jurisdiction over the person of petitioner. Modes of service Personal Whenever practicable, the summons shall be served (1) by handing a copy thereof to the defendant in person, or (2) by tendering it to him, if he refuses to receive and sign for it. (Sec. 6, Rule 14) Substituted 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. (Sec. 7, Rule 14) ROBINSON v. MIRALLES (510 SCRA 678, 2006)

Under our procedural rules, personal service is generally preferred over substituted service, the latter mode of service being a method extraordinary in character. For substituted service to be justified, the following circumstances must be clearly established: (a) personal service of summons within a reasonable time was impossible; (b) efforts were exerted to locate the party; and (c) the summons was served upon a person of sufficient age and discretion residing at the party’s residence or upon a competent person in charge of the party’s office or place of business. Failure to do so would invalidate all FACTS: Respondent Celita Miralles filed a complaint for collection of sum of money against petitioner Remelita Robinson, alleging that $20,054 was borrowed by Robinson, as shown in the MOA they both executed. Summons was served on Robinson at her given address. However, per return of service of the Sheriif, petitioner no longer resides there. Thus, the trial court issued an alias summons to be served at Muntinlupa City, petitioner’s new address. Again, the Sheriff reported twice thereafter that the summons could not be served on petitioner. Sheriff Pontente, who was to serve the summons interposed that he was stopped by the Security Guard of Alabang Hills Village because they were allegedly told by Robinson not to let anyone proceed to her house if she is not around. Despite the explanations of the Sheriff, the guards didn’t let him in. Thereafter, the Sheriff just left a copy of the complaint to a guard, who refused to affix his signature on the original copy, so he will be the one to give the summons to petitioner Robinson. Eventually, petitioner Robinson was declared in default for her failure to file an answer seasonably despite service of summons. The trial court rendered its decision in favor of Miralles ordering Robinson to pay her obligations plus cost of damages. A copy of the court Order was sent to petitioner by registered mail at her new address and a writ of execution was also issued. Robinson filed a petition for relief from the judgment by default. She claimed that summons was improperly served upon her, thus, the trial court never acquired jurisdiction over her and that all its proceedings are void. Petitioner Robinson contends that the service of the summons upon the subdivision guard is not in compliance with Section 7, Rule 14 since he is not related to her or staying at her residence, as required by the rule. ISSUE: Whether the substituted service of summons effected is valid YES. Although the SC have ruled that the statutory requirements of substituted service must be followed strictly, faithfully, and fully and any substituted service other than that authorized by the Rules is considered ineffective, the Court frowns upon an overly strict application of the Rules. It is the spirit, rather than the letter of the procedural rules, that governs. Obviously, it was impossible for the sheriff to effect personal or substituted service of summons upon petitioner. We note that she failed to controvert the sheriff’s declaration. Nor did she deny having received the summons through the security SJS ‘13 – Comprehensive Reviewer

Page 66

guard. Considering her strict instruction to the security guard, she must bear its consequences. Thus, we agree with the trial court that summons has been properly served upon petitioner and that it has acquired jurisdiction over her. Where the action is in personam 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 1997 Rules of Procedure, as amended. Under our procedural rules, personal service is generally preferred over substituted service, the latter mode of service being a method extraordinary in character. For substituted service to be justified, the following circumstances must be clearly established: (a) personal service of summons within a reasonable time was impossible; (b) efforts were exerted to locate the party; and (c) the summons was served upon a person of sufficient age and discretion residing at the party’s residence or upon a competent person in charge of the party’s office or place of business. Failure to do so would invalidate all subsequent proceedings on jurisdictional grounds. Publication Where the defendant is (1) designated as an unknown owner, or the like, or (2) whenever his whereabouts are unknown and cannot be ascertained by diligent inquiry, Service may, by leave of court, be effected upon him by (1) publication in a newspaper of general circulation and (2) in such places and for such time as the court may order. (Sec. 14, Rule 14) Extraterritorial When the defendant (1) does not reside and is not found in the Philippines, and (2) the action affects a. the personal status of the plaintiff or b. relates to, or the subject of which is, property within the Philippines, in which the defendant has or claims a lien or interest, actual or contingent; or c. in which the relief demanded consists, wholly or in part, in excluding the defendant from any interest therein, or d. the property of the defendant has been attached within the Philippines, Service may, by leave of court, be effected out of the Philippines (4) by personal service as under section 6; or (5) by publication in a newspaper of general circulation in such places and for such time as the court may order, • in which case a copy of the summons and order of the court shall be sent by registered mail to the last known address of the defendant, (6) or in any other manner the court may deem sufficient. Any order granting such leave shall specify a reasonable time, which shall not be less than sixty (60) days after notice, within which the defendant must answer. (Sec. 15, Rule 14) Residents temporarily out of the Philippines. When any 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 by extraterritorial service. (Sec. 16, Rule 14) VALMONTE v. CA (252 SCRA 92, 1996)

As petitioner Lourdes Valmonte is a nonresident who is not found in the Philippines, service of summons on her must be in accordance with Rule 14, §17. Such service, to be effective outside the Philippines, must be made either (1) by personal service; (2) by publication in a newspaper of general circulation in such places and for such time as the court may order, in which case a copy of the summons and order of the court should be sent by registered mail to the last known address of the defendant; or (3) in any

FACTS: Rosita Dimalanta, sister of petitioner Lourdes Valmonte, filed a complaint for partition of real property and accounting of rentals against petitioners Valmonte spouses. Lourdes Valmonte is a foreign resident. The RTC denied private respondent's motion to declare petitioner Lourdes A. Valmonte in default. A motion for reconsideration was similarly denied. Private respondent filed a petition for certiorari, prohibition and mandamus with the Court of Appeals. The Court of Appeals rendered a decision granting the petition and declaring Lourdes in default. A copy of the appellate court's decision was received by petitioner Lourdes’ husband at his Manila law office and in Seattle, Washington.

SJS ‘13 – Comprehensive Reviewer

Page 67

ISSUE: Whether in an action for partition filed against her and her husband, who is also her attorney, summons intended for her may be served on her husband, who has a law office in the Philippines NO. Private respondent's action, which is for partition and accounting under Rule 69, is in the nature of an action quasi in rem. Such an action is essentially for the purpose of affecting the defendant's interest in a specific property and not to render a judgment against him. As petitioner Lourdes Valmonte is a nonresident who is not found in the Philippines, service of summons on her must be in accordance with Rule 14, §17. Such service, to be effective outside the Philippines, must be made either (1) by personal service; (2) by publication in a newspaper of general circulation in such places and for such time as the court may order, in which case a copy of the summons and order of the court should be sent by registered mail to the last known address of the defendant; or (3) in any other manner which the court may deem sufficient.

PERKIN ELMER SINGAPORE v. DAKILA TRADING (530 SCRA 170)

Extraterritorial service of summons applies only where the action is in rem or quasi in rem, but not if an action is in personam. FACTS: Dakila Trading Corp (Dakila) entered into a Distribution Agreement with Perkin-Elmer Singapore Pte. Ltd. (PES) which appointed Dakila as sole distributor of its products in the Philippines. PES was obligated to give Dakila a commission for the sale of its products in the Philippines. Dakila was granted the right to purchase and sell the products of PES. The agreement further stipulated that Dakila shall order the products of PES, which it shall sell in the Philippines, either from PES itself or from PEIP. However, PES unilaterally terminated the Distribution Agreement, prompting Dakila to file before the RTC a Complaint for Collection of Sum of Money and Damages with Prayer for Issuance of a Writ of Attachment against PES and its affiliate, PerkinElmer Instruments Philippines Corporation (PEIP). RTC denied respondent’s prayer. Dakila filed Ex-Parte Motions for Issuance of Summons and for Leave of Court to Deputize Dakila’s General Manager (DGM) to Serve Summons Outside of the Philippines. RTC granted this motion. Thus, an Alias Summons was issued by the RTC to PES. But the said Alias Summons was served and received by Perkin-Elmer Asia (PEA), a corporation allegedly unrelated to PES. PEIP moved to dismiss the Complaint filed by Dakila. PEA, on the other hand, sent letters to Dakila and RTC to inform them of the wrongful service of summons. Accordingly, Dakila filed an Ex-Parte Motion to Admit Amended Complaint, together with the Amended Complaint claiming that (1) PEA had become a sole proprietorship owned by the PES, (2) PES changed its name to PEA, (3) such changes did not avoid its due and outstanding obligations to Dakila, and (4) the name of PES in the complaint should be changed to PEA. RTC admitted the Amended Complaint. Dakila filed another Motion for the Issuance of Summons and for Leave of Court to Deputize DGM to serve summons outside the Philippines. RTC granted the motion. RTC thus issued summons and the DGM went to Singapore and served summons on PES. Meanwhile, RTC denied the Motion to Dismiss filed by PEIP, compelling the latter to file its Answer to the Amended Complaint. PES filed with the RTC a Special Appearance and Motion to Dismiss the Amended Complaint, which were denied. It held that even though the Amended Complaint is primarily for damages, it does relate to a property of PES, to which the latter has a claim interest, or an actual or contingent lien, which will make it fall under one of the requisites for extraterritorial service. PES filed a Petition for Certiorari under Rule 65 with application for temporary restraining order and/or preliminary injunction before the CA. The CA affirmed the RTC Orders. ISSUE: Whether summons were properly served under the 2nd or 4th instance of extra-territorial service NO. Extraterritorial service of summons applies only where the action is in rem or quasi in rem, but not if an action is in personam. In the case at bar, there can never be a valid extraterritorial service of summons upon it, because the case involving collection of a sum of money and damages is an action in personam, as it deals with the personal liability of PES by reason of the alleged unilateral termination of the Distribution Agreement. The objective sought in Dakila’s Complaint was to establish a claim against PES. Moreover, The action instituted by Dakila affects the parties alone, not the whole world. Thus, being an action in personam, personal service of summons within the Philippines is necessary in order for the RTC to validly acquire jurisdiction over the person of PES, and this is not possible in the present case because the PES is a nonresident and is not found within the Philippines. Dakila’s allegation in its Amended Complaint that PES had personal property within the Philippines in the form of shares of stock in PEIP did not make the case fall under any of the four instances mentioned in Section 15, Rule 14 of the Rules of Court, as to convert the action in personam to an action in rem or quasi in rem and, subsequently, make the extraterritorial service of summons upon the petitioner valid. The 2nd instance for extra-territorial service has no application in the case. The action for collection of a sum of money and damages was purely based on the personal liability of the PES. For the action to be one falling under the 2 nd instance, the main subject matter of the action must be the property itself of the PES in the Philippines and in such instance, judgment will be limited to the res. However, the allegations made by the respondent that the petitioner has property within the Philippines in support of its application for the issuance of a writ of attachment was actually denied by the RTC. Neither does the allegation that PES had personal property within the Philippines in the form of shares of stock in PEIP convert the case from an action in personam to one quasi in rem, so as to qualify said case under the 4 th instance of extraterritorial service. What is required is not a mere allegation of the existence of personal property belonging to the non-resident defendant within the Philippines but that the non-resident defendant’s personal property located within the Philippines must have

SJS ‘13 – Comprehensive Reviewer

Page 68

been actually attached. Evidently, PES’s personal property within the Philippines, in the form of shares of stock in PEIP, had not been attached; hence, the case for collection of sum of money and damages remains an action in personam. In the case at bar, there can never be a valid extraterritorial service of summons upon it, because the case involving collection of a sum of money and damages is an action in personam, as it deals with the personal liability of PES by reason of the alleged unilateral termination of the Distribution Agreement. The objective sought in Dakila’s Complaint was to establish a claim against PES. Moreover, The action instituted by Dakila affects the parties alone, not the whole world. Thus, being an action in personam, personal service of summons within the Philippines is necessary in order for the RTC to validly acquire jurisdiction over the person of PES, and this is not possible in the present case because the PES is a nonresident and is not found within the Philippines. Dakila’s allegation in its Amended Complaint that PES had personal property within the Philippines in the form of shares of stock in PEIP did not make the case fall under any of the four instances mentioned in Section 15, Rule 14 of the Rules of Court, as to convert the action in personam to an action in rem or quasi in rem and, subsequently, make the extraterritorial service of summons upon the petitioner valid. Registered mail invalid service of summons Voluntary appearance The defendant’s voluntary appearance in the action shall be equivalent to service of summons. The inclusion in a motion to dismiss of other grounds aside from lack of jurisdiction over the person of the defendant shall not be deemed a voluntary appearance. (Sec. 20, Rule 14) CEZAR v. RICAFORT-BAUTISTA (506 SCRA 322, 2006)

The SC still holds that jurisdiction was validly acquired by the trial court. Although the substituted service upon him of summons was defective, said defect was cured by his voluntary appearance. FACTS: Private respondent Specified Materials Corporation filed a Complaint for collection of sum of money against petitioner Cezar due to the latter’s failure to pay the construction materials it purportedly purchased under a credit line extended by private respondent. At the time of the institution of the action, petitioner’s obligation stood at P1,860,000.00, and under the terms of the credit arrangement, materials sold to petitioner were supposed to be paid within 30 days from date of delivery, subject to a 3% interest per month for delayed payments. After the filing of the complaint, summons was issued, and this was received by a certain Robles. As petitioner failed to file his answer to the complaint, private respondent moved that he be declared in default. This motion was granted. Private respondent filed a Motion to Admit Amended Complaint alleging that it erroneously computed petitioner’s obligation to be P1,860,000.00, when it should have amounted to P2,005,000.00. A copy of the motion and the Amended Complaint were personally received by petitioner as evidenced by his signatures thereon. The Amended Complaint was ordered admitted. The court ruled in favor of plaintiff. Petitioner, by way of special appearance, argued that the trial court did not acquire jurisdiction over his person. This motion was denied. Petitioner filed before the CA a Petition for Annulment of Judgment, Preliminary Injunction with Prayer for Temporary Restraining Order. This petition was dismissed for “failure to attach an affidavit of merit alleging the facts supporting the good and substantial defense, as well as the affidavits of witnesses or document supporting the defense.” Petitioner filed a motion for reconsideration but this was denied. Following this set-back, petitioner filed before this Court a Petition for Review on Certiorari of the resolutions of the CA, which was also denied for failure to comply with procedural requirements. Our resolution became final and executory. Private respondent filed a Motion for Execution before the trial court. ISSUE: Whether the court acquired jurisdiction over the person of the petitioner by virtue of the substituted service of summons effected by the sheriff NO. The person who allegedly received the summons was identified in the sheriff’s return as Arsenio Robles, was not petitioner’s employee, was a native of Batangas and was merely peddling mango seedlings within the vicinity of his office when the summons was served. In the event that summons cannot be served within a reasonable time, the Rules permit that substituted service may be resorted to. In this case, the sheriff employed the substituted service of summons. The defect, however, in the manner in which he implemented this mode of service of summons is readily apparent on the face of the return. It must be emphasized that laws providing for modes other than the personal service of summons must be strictly followed in order for the court to acquire jurisdiction over the person of respondent or defendant. As the sheriff’s return in the present case does not contain any statement with regard to the impossibility of personal service the same is patently defective and so the presumption of regularity in the performance of official functions will not lie. ISSUE: Whether petitioner’s voluntary appearance cured the defect in service of summons. YES. In Flores v. Zurbito, we held that an appearance in whatever form without expressly objecting to the jurisdiction of the court over the person, is a submission to the jurisdiction of the court over the person of the defendant or respondent, thus: He may appear without such formal appearance and thus submit himself to the jurisdiction of the court. He may appear by presenting a motion, for example, and unless by such appearance he specifically objects to the jurisdiction of the court, he thereby gives his assent to the jurisdiction of the court over his person. Hence, in this case, petitioner’s filing of a Motion for Re-setting of the Hearing effectively cured the defect of the substituted service of summons. Petitioner’s insistence of lack of jurisdiction over his person is utterly lacking in any legal basis. LHUILLER v. BRITISH AIRWAYS SJS ‘13 – Comprehensive Reviewer

Page 69

(615 SCRA 380, 2010)

A defendant who files a motion to dismiss, assailing the jurisdiction of the court over his person, together with other grounds raised therein, is not deemed to have appeared voluntarily before the court FACTS: Lhuillier took respondent British Airway’s flight 548 from London, United Kingdom to Rome, Italy. Once on board, she allegedly requested Halliday, one of the respondent’s flight attendants, to assist her in placing her hand-carried luggage in the overhead bin. However, Halliday allegedly refused to help and assist her, and even sarcastically remarked that "If I were to help all 300 passengers in this flight, I would have a broken back!" Petitioner further alleged that when the plane was about to land in Rome, Italy, another flight attendant, Kerrigan, singled her out from among all the passengers in the business class section to lecture on plane safety. Allegedly, Kerrigan made her appear to the other passengers to be ignorant, uneducated, stupid, and in need of lecturing on the safety rules and regulations of the plane. Affronted, petitioner assured Kerrigan that she knew the plane’s safety regulations being a frequent traveler. Thereupon, Kerrigan allegedly thrust his face a mere few centimeters away from that of the petitioner and menacingly told her that "We don’t like your attitude." Upon arrival in Rome, petitioner complained to respondent’s ground manager and demanded an apology. However, the latter declared that the flight stewards were "only doing their job." Thus, petitioner filed the complaint for damages. Summons, together with a copy of the complaint, was served on the respondent through Echevarria, General Manager of Euro-Philippine Airline Services, Inc. Respondent, by way of special appearance through counsel, filed a Motion to Dismiss on grounds of lack of jurisdiction over the case and over the person of the respondent. Respondent alleged that only the courts of London, United Kingdom or Rome, Italy, have jurisdiction over the complaint for damages pursuant to the Warsaw Convention. Thus, since respondent is domiciled in London; respondent’s principal place of business is in London; petitioner bought her ticket in Italy (through Jeepney Travel S.A.S, in Rome); and Rome, Italy is petitioner’s place of destination, then it follows that the complaint should only be filed in the proper courts of London, United Kingdom or Rome, Italy. Likewise, it was alleged that the case must be dismissed for lack of jurisdiction over the person of the respondent because the summons was erroneously served on Euro-Philippine Airline Services, Inc. which is not its resident agent in the Philippines. Instead of filing a Comment/Opposition, petitioner filed an Urgent Ex-Parte Motion to Admit Formal Amendment to the Complaint and Issuance of Alias Summons. Petitioner alleged that upon verification with the SEC, she found out that the resident agent of respondent in the Philippines is Alonzo Q. Ancheta. Subsequently, petitioner filed a Motion to Resolve Pending Incident and Opposition to Motion to Dismiss. ISSUE: Whether British Airways, in filing its motion to dismiss may be deemed as having in fact and in law submitted itself to the jurisdiction of the lower court, NO. The Warsaw Convention has the force and effect of law in this country. The Warsaw Convention applies because the air travel, where the alleged tortious conduct occurred, was between the United Kingdom and Italy, which are both signatories to the Warsaw Convention. Since the Warsaw Convention applies in the instant case, then the jurisdiction over the subject matter of the action is governed by the provisions of the Warsaw Convention. Respondent, in seeking remedies from the trial court through special appearance of counsel, is not deemed to have voluntarily submitted itself to the jurisdiction of the trial court. Thus, a defendant who files a motion to dismiss, assailing the jurisdiction of the court over his person, together with other grounds raised therein, is not deemed to have appeared voluntarily before the court. What the rule on voluntary appearance means is that the voluntary appearance of the defendant in court is without qualification, in which case he is deemed to have waived his defense of lack of jurisdiction over his person due to improper service of summons. A special appearance before the court––challenging its jurisdiction over the person through a motion to dismiss even if the movant invokes other grounds––is not tantamount to estoppel or a waiver by the movant of his objection to jurisdiction over his person; and such is not constitutive of a voluntary submission to the jurisdiction of the court. In this case, the special appearance of the counsel of respondent in filing the Motion to Dismiss and other pleadings before the trial court cannot be deemed to be voluntary submission to the jurisdiction of the said trial court. Return of service When the service has been completed, the server shall, (1) within five (5) days therefrom, (2) serve a copy of the return, personally or by registered mail, to the plaintiff’s counsel, and (3) shall return the summons to the clerk who issued it, (4) accompanied by proof of service. (Sec. 4, Rule 14) Proof of service The proof of service of a summons shall be (1) made in writing by the server and (2) shall set forth the manner, place, and date of service; (3) shall specify any papers which have been served with the process and (4) the name of the person who received the same; and (5) shall be sworn to when made by a person other than a sheriff or his deputy. (Sec. 18, Rule 14) Publication If the service has been made by publication, service may be proved by (1) the affidavit of the printer, his foreman or principal clerk, or of the editor, business or advertising manager, SJS ‘13 – Comprehensive Reviewer

Page 70

(2) an attached copy of the publication, and (3) an affidavit showing the deposit of a copy of the summons and order for publication in the post office, postage prepaid, directed to the defendant by registered mail to his last known address. (Sec. 19, Rule 14)

MOTIONS (RULE 15) In general A motion is an application for relief other than by a pleading. (Sec. 1, Rule 15) Form General rule: All motions shall be in writing. Exceptions: (1) Motions made in open court or (2) Motions made in the course of a hearing or trial. (Sec. 2, Rule 15) Generally The Rules applicable to pleadings shall apply to written motions so far as concerns (1) caption, (2) designation, (3) signature, and (4) other matters of form. (Sec. 10, Rule 15) May be oral General rule: All motions shall be in writing. Exception Motions made in open court or in the course of a hearing or trial. (Sec. 2, Rule 15)

Motion for leave A motion for leave to file a pleading or motion shall be accompanied by the pleading or motion sought to be admitted. (Sec. 9, Rule 15) Prohibited motion The following pleadings and motions are prohibited in a summary procedure: (1) Motion to dismiss except on the ground of lack of jurisdiction over subject matter and failure to comply with barangay conciliation proceedings; (2) Motion for new trial, or for reconsideration of a judgment, or for reopening of trial; (3) Petition for relief from judgment; (4) Motion for extension of time to file pleadings, affidavits and other papers; (5) Memoranda; (6) Petition for certiorari, and mandamus or prohibition against an interlocutory order of the court; (7) Motion to declare the defendant in default; (8) Dilatory motions for postponement (9) Reply; (10) Third-party complaints; (11) Interventions. The following are prohibited in Small Claims Cases: (1) Motion to dismiss the complaint, except on ground of lack of jurisdiction’ (2) Motion for bill of particulars; (3) Motion for new trial, or for reconsideration of a judgment, or for reopening of trial; (4) Petition for relief from judgment; (5) Motion for extension of time to file pleadings, affidavits and other papers; (6) Memoranda; (7) Petition for certiorari, and mandamus or prohibition against an interlocutory order of the court; (8) Motion to declare the defendant in default; (9) Dilatory motions for postponement (10) Reply; (11) Third-party complaints; (12) Interventions. Contents A motion shall (1) state the relief sought to be obtained (2) the grounds upon which it is based, and (3) shall be accompanied by supporting affidavits and other papers, if required by these Rules or necessary to prove facts alleged therein. (Sec. 3, Rule 15)

SJS ‘13 – Comprehensive Reviewer

Page 71

Omnibus motion rule A motion attacking a pleading, order, judgment, or proceeding shall include all objections then available, and all objections not so included shall be deemed waived. (Sec. 8, Rule 15)

Exceptions The court shall dismiss the claim when it appears from the pleadings or the evidence on record that (1) the court has no jurisdiction over the subject matter, (2) there is another action pending between the same parties for the same cause, or that (3) the action is barred by a prior judgment or (4) barred by the statute of limitations. (Sec. 1, Rule 9) Notice of hearing General Rule: Every written motion shall be set for hearing by the applicant. Exception: Motions which the court may act upon without prejudicing the rights of the adverse party. (Sec. 4, Rule 15) NOTE: Every written motion required to be heard and the notice of the hearing thereof shall be served (1) in such a manner as to ensure its receipt by the other party (2) at least three (3) days before the date of hearing, unless the court for good cause sets the hearing on shorter notice. Notice of hearing— The notice of hearing shall be (1) addressed to all parties concerned, and (2) shall specify the time and date of the hearing which must not be later than ten (10) days after the filing of the motion. (Sec. 5, Rule 15) General rule: without compliance — scrap of paper A motion which does not meet the requirements of Sections 4 and 5 of Rule 15 is a mere scrap of paper which the clerk of court has not right to receive and the trial court has no authority to act upon. Defective notice of hearing VICTORY LINER, INC. v. MALINIAS (2007)

Under Sections 5 and 6 of Rule 15, the notice of hearing shall be addressed to the parties concerned and shall specify the time and date of the hearing of the motion; no motion shall be acted upon by the court without proof of service of the notice thereof, except when the court is satisfied that the rights of the adverse party are not affected. FACTS: A vehicular collision happened between petitioner Victory Liner, Inc. (VLI) and an Isuzu Truck used by respondent Michael Malinias. No one died, but both vehicles were damaged. Malinias filed a complaint for damages against petitioner and the bus driver, Leoncio Bulaong with the MTC, alleging pecuniary damage to the truck worth P47,180 representing lost income for the non-use of the truck. After pre-trial, the bus driver was dropped as defendant in the case. During trial, respondent finished presenting his evidence and rested his case. Counsel for petitioner VLI filed a motion to withdraw as counsel, but the same was denied. When the case was called for reception of petitioner’s evidence, no appearance was made for the bus company. Respondent thus moved that petitioner be declared to have waived its right to adduce evidence in its favor. The case was deemed submitted for judgment and the MTC ruled in favor of respondent Malinias, ordering VLI to pay him. VLI’s new counsel filed a Motion for Reconsideration. The Notice of Hearing therein stated: "Please submit the foregoing Motion for Reconsideration for hearing before the CA at a schedule and time convenient to the Court and the parties.” The MTC ruled that the notice did not conform with the mandatory requirements of Section 5, Rule 15, and that the motion was thus a mere scrap of paper which did not suspend the period to appeal. Petitioner VLI thereafter filed a Notice of Appeal and a motion for the inhibition by the MTC, which was granted. The case was assigned to a new MTC judge, who was tasked to rule on the Notice of Appeal. The MTC ruled that it had been filed beyond the reglementary period. Again, the MTC reiterated its initial judgment in favor of Malinias since the fatally defective MR did not toll the reglementary period for appeal. The RTC affirmed the judgment of the MTC and held the decision final and executory. ISSUE: Whether the Notice of Hearing filed was defective YES. The most crucial failure on the part of petitioner was to file a Motion for Reconsideration of the MTC Judgment which contained a defective Notice of Hearing, failing as it did to set a date for hearing. Under Sections 5 and 6 of Rule 15, the notice of hearing shall be addressed to the parties concerned and shall specify the time and date of the hearing of the motion; no SJS ‘13 – Comprehensive Reviewer

Page 72

motion shall be acted upon by the court without proof of service of the notice thereof, except when the court is satisfied that the rights of the adverse party are not affected. Unless the movant sets the time and place of hearing, the court will be unable to determine whether the adverse party agrees or objects to the motion, and if he objects, to hear him on his objection, since the rules themselves do not fix any period within which he may file his reply or opposition. Not only did the defect render the motion for reconsideration itself unworthy of consideration, it more crucially failed to toll the period to appeal. A motion without a notice of hearing is pro forma, a mere scrap of paper that does not toll the period to appeal, and upon the expiration of the 15-day period, the questioned order or decision becomes final and executory. That did not mean that petitioner was left bereft of further remedies under our Rules. For one, petitioner could have assailed the MTC’s denial of the Motion for Reconsideration through a special civil action for certiorari under Rule 65 alleging grave abuse of discretion amounting to lack of jurisdiction on the part of the MTC in denying the motion. If that remedy were successful, the effect would have been to void the MTC’s denial of the Motion for Reconsideration, thus allowing petitioner to again pursue such motion as a means towards the filing of a timely appeal. Another remedy for the petitioner is found under Rule 38, which governs petitions for relief from judgment. Indeed, Section 2, Rule 38 finds specific application in this case, as it provides that "[w]hen a judgment or final order is rendered by any court in a case, and a party thereto, by fraud, accident, mistake, or excusable negligence, has been prevented from taking an appeal, he may file a petition [for relief from denial of appeal] in such court and in the same case praying that the appeal be given due course."36 Such petition should be filed within sixty (60) days after the petitioner learns of the judgment or final order, and not more than six (6) months after such judgment or final order was entered. The facts of this case indicate that petitioner could have timely resorted to this remedy. Exceptions Motions which may be granted ex parte An ex parte motion does not require that parties be hard. An example is a motion to set the case for pre-trial. NOTE: A motion to dismiss, a motion for judgment on the pleadings, and a summary judgment are litigated motions. Where adverse party had opportunity to oppose LANTO v. DIMAPORO (16 SCRA 599, 1966)

Existence of a cause of action or lack of it is determined by a reference to the facts averred in the challenged pleading. The question raised in the motion is purely one of law. In this posture, oral arguments on the motion are reduced to an unnecessary ceremony and should be overlooked. FACTS: Resolution No. 7, adopted by the Provincial Board of Lanao del Norte, reverted a previous salary appropriation for the position of Assistant Provincial Assessor to the general fund. In effect, that position then held by petitioner was then abolished. He sought relief to various government officials, including the President but was disappointed. He then went to the court seeking mandamus praying for annulment of the resolution, payment of backwages, restatement of salary appropriations as well as reinstatement. Respondents moved to dismiss stating lack of cause of action. Petitioner’s counsel moved to postpone the hearing, but failed to appear. The court below granted such motion and dismissed said petition. Hence this appeal. ISSUE: Whether the dismissal order issued without any hearing on the motion to dismiss is void NO. Petitioner was given the chance to adduce his case, yet it is because of his constant absences that he was unable to present his arguments. One good reason for the statutory requirement of hearing on a motion is to enable the suitors to adduce evidence to support their claims. But here the Motion to Dismiss is grounded on the lack of cause of action. Existence of a cause of action or lack of it is determined by a reference to the facts averred in the challenged pleading. The question raised in the motion is purely one of law. In this posture, oral arguments on the motion are reduced to an unnecessary ceremony and should be overlooked. The hearing for the Motion to Dismiss was set, yet the petitioner failed to appear (only his counsel showed up). Moreover, without any clear showing to the contrary, there is a presumption of regularity within the actions of the court with regard to entertaining motions. In the case at bar, petitioner failed to show irregularity within the courts. VLASON ENTERPRISES CORP v. CA (330 SCRA 26, 1999)

SJS ‘13 – Comprehensive Reviewer

Page 73

(1) Where the counsel failed object on the ground of lack of notice to a Motion addressed to a former counsel, and was granted by the trial court 30 days to file his opposition to it, the circumstances clearly justify a departure from the literal application of the notice of hearing rule. (2) The issuance of an order of default is a condition sine qua non in order that a judgment by default be clothed with validity. Furthermore, it is a legal impossibility to declare a party-defendant to be in default before it was validly served summons. FACTS: Duraproof sought to enforce its preferred salvors lien by filing with the RTC a petition for certiorari, prohibition and mandamus assailing the actions of the Customs Officers in forfeiting the vessel and cargo owned by Omega, which Duraproof contracted to repair. It impleaded PPA and Med Line Philippines, Inc. as respondents. Duraproof amended its petition to include the former District Collector, and other companies involved, including Vlason Enterprises. In both Petitions, Duraproof failed to allege anything pertaining to Vlason Enterprises, or any prayer for relief against it. Summonses for the amended Petition were served. Duraproof moved several times to declare the respondents it impleaded in default. Out of those respondents, only the following were declared by RTC in default: the Singkong Trading Co., Commissioner Mison, M/V Star Ace and Omega. Duraproof filed an ex parte Motion to present evidence against the defaulting respondents, which was granted. Duraproof alleged that Vlason Enterprises, through constant intimidation and harassment in utilizing the PPA Management of La Union, caused Duraproof to incur heavy overhead expenses, causing irreparable damages of about P3 Million worth of ship tackles, rigs, and appurtenances including radar antennas and apparatuses, which were taken surreptitiously by persons working for Vlason Enterprises or its agents. The RTC ruled that in favor of Duraproof and ordered Vlason to pay P3 Million worth of damages. Duraproof and the other companies entered into a compromise agreement, except Vlason. Duraproof moved for the execution of judgment. The Motion was granted and a Writ of Execution was issued. Vlason Enterprises filed a Motion for Reconsideration addressed to Duraproof’s counsel, Atty. Concepcion, on the ground that it was allegedly not impleaded as a defendant, served summons or declared in default, and hence Duraproof may not present evidence against it in default. Duraproof opposed the Motion, arguing that it was a mere scrap of paper due to its defective notice of hearing. RTC reversed its Decision, finding that there never was issued an order of default against Vlason Enterprises, so there could not have been any valid default-judgment rendered against it. The CA ruled that there was no need to serve summons anew on Vlason Enterprises, since it had been served summons when the second amended petition was filed; and that Vlason Enterprisess Motion for Reconsideration was defective and void, because it contained no notice of hearing addressed to the counsel of Duraproof in violation of Rule 16, Section 4 of the Rules of Court. ISSUE: Whether the motion for reconsideration filed by Vlason was void for not containing a notice of hearing to Duraproof’s counsel NO. The Motion contained a notice of hearing sent to Atty. Concepcion who had already died and had since been substituted by Duraproof’s new counsel, Atty. Desierto. Although Rule 15 of the Rules of Court requires Vlason Enterprises to address and to serve on the counsel of Duraproof the notice of hearing of the Motion for Reconsideration, the case at bar, however, is far from ideal. First, Vlason Enterprises was not validly summoned and it did not participate in the trial of the case in the lower court; thus, it was understandable that Vlason Enterprises would not be familiar with the parties and their counsels. Second, Atty. Desierto entered his appearance only as collaborating counsel, who is normally not entitled to notices even from this Court. Third, Duraproof made no manifestation on record that Atty. Concepcion was already dead. Besides, it was Atty. Concepcion who signed the Amended Petition, wherein Vlason Enterprises was first impleaded as respondent and served a copy thereof. Naturally, Vlason Enterprisess attention was focused on this pleading, and it was within its rights to assume that the signatory to such pleading was the counsel for Duraproof. The Court has consistently held that a motion which does not meet the requirements of Sections 4 and 5 of Rule 15 of the Rules of Court is considered a worthless piece of paper, which the clerk of court has no right to receive and the trial court has no authority to act upon. However, there are exceptions to the strict application of this rule. These exceptions include: “(1) where a rigid application will result in a manifest failure or miscarriage of justice; especially if a party successfully shows that the alleged defect in the questioned final and executory judgment is not apparent on its face or from the recitals contained therein.” The present case falls under such exception since Vlason Enterprises was not informed of any cause of action or claim against it. All of a sudden, the vessels which Vlason Enterprises used in its salvaging business were levied upon and sold in execution to satisfy a supposed judgment against it. To allow this to happen simply because of a lapse in fulfilling the notice requirement which, as already said, was satisfactorily explained would be a manifest failure or miscarriage of justice. Circumstances in the case at bar show that Duraproof was not denied procedural due process, and that the very purpose of a notice of hearing had been served. On the day of the hearing, Atty. Desierto did not object to the said Motion for SJS ‘13 – Comprehensive Reviewer

Page 74

lack of notice to him; in fact, he was furnished in open court with a copy of the motion and was granted by the trial court thirty days to file his opposition to it. These circumstances clearly justify a departure from the literal application of the notice of hearing rule. In other cases, after the trial court learns that a motion lacks such notice, the prompt resetting of the hearing with due notice to all the parties is held to have cured the defect. Proof of service No written motion set for hearing shall be acted upon by the court without proof of service thereof. (Sec. 6, Rule 15) Hearing of motion General rule: All motions shall be scheduled for hearing on Friday afternoons, or if Friday is a non-working day, in the afternoon of the next working day Exception: Motions requiring immediate action. (Sec. 7, Rule 15)

MOTION TO DISMISS (RULE 16) Four general types of motion to dismiss under the Rules (1) Motion to dismiss before answer (Rule 16) (2) Motion to dismiss by plaintiff (Rule 17) (3) Motion to dismiss on demurrer to evidence after plaintiff has rested his case (Rule 33) (4) Motion to dismiss appeal either in RTC (Sec. 31, Rule 41), CA (Sec. 1, Rule 50) or SC (Sec. 5, Rule 56) Grounds A motion to dismiss may be made on any of the following grounds: (a) That the court has no jurisdiction over the person of the defending party; (b) That the court has no jurisdiction over the subject matter of the claim; (c) That venue is improperly laid; (d) That the plaintiff has no legal capacity to sue; (e) That there is another action pending between the same parties for the same cause; (f) That the cause of action is barred by a prior judgment or by the statute of limitations; (g) That the pleading asserting the claim states no cause of action; (h) That the claim or demand set forth in the plaintiff’s pleading has been paid, waived, abandoned, or otherwise extinguished; (i) That the claim on which the action is founded is unenforceable under the provisions of the statute of frauds; and (j) That a condition precedent for filing the claim has not been complied with. Lack of jurisdiction BOTICANO v. CHU (148 SCRA 541, 1987)

Defect in service of summons cannot be raised for the first time on appeal. Defects in jurisdiction arising from irregularities in the commencement of the proceedings, defective process or even absence of process may be waived by a failure to make seasonable objections. FACTS: While loaded with logs, and properly parked by its driver Maximo Dalangin at the shoulder of the national highway in Nueva Ecija, Boticano’s Bedford truck was hit and bumped at the rear by another Bedford truck owned by private respondent Chu, Jr. and driven by Sigua, the former’s co-defendant in the case. Chu agreed to shoulder the expenses of the repair of the damaged truck of the latter, but he failed to pay the same. Summons was issued but was returned unserved because Sigua was no longer connected with San Pedro Saw Mill, while Chu was properly served through the receipt by his wife of such summons. Boticano moved to dismiss the case against Sigua and to declare Chu in default for failure to file responsive pleadings within the reglementary period. The motion was granted by the lower court allowing petitioner to adduce his evidence ex parte. The RTC found Chu responsible for the fault of his driver. Chu filed a notice of appeal and a motion to extend to file his record on appeal. Boticano motioned to dismiss the appeal, which Chu’s counsel opposed. In the end, Chu’s record on appeal was approved. The case was brought to the CA, which set aside the RTC and remanded the case to the court of origin for summons to be properly served on Chu and for proceedings to be taken. On appeal, Boticano questioned the CA’s ruling that jurisdiction over Chu’s person was not acquired. ISSUE: Whether the question of jurisdiction over the person of the defendant can be raised for the first time on appeal NO. However, one of the circumstances considered by the Court as indicative of waiver by defendant-appellant of any alleged defect if jurisdiction over his person arising from defective or even want of process, is his failure to raise the question of jurisdiction in the CFI and at the first opportunity. Defects in jurisdiction arising from irregularities in the commencement of the proceedings, defective process or even absence of process may be waived by a failure to make seasonable objections. During the SJS ‘13 – Comprehensive Reviewer

Page 75

stages of the proceedings, in the case at bar, defendant-appellant could have questioned the jurisdiction of the lower court. But he did not. Chu here had voluntarily submitted himself to the court’s jurisdiction. Thus, jurisdiction was properly acquired by the trial court over the person of respondent thru both service of summons and voluntary appearance in court; he was properly declared in default for not having filed any answer; despite respondent’s failure to file a motion to set aside the declaration of default, he has the right to appeal the default of judgment but in the appeal only the evidence of the petitioner may be considered, respondent not having adduced any defense evidence. Res judicata DEL ROSARIO v. FEBTC (537 SCRA 571, 2007)

Res judicata “bar by prior judgment,” as a ground to dismiss the case has four essential requisites: a) finality of the former judgment; b) the court which rendered it had jurisdiction over the subject matter and the parties; c) it must be a judgment on the merits; and d) there must be, between the first and second actions, identity of parties, subject matter and causes of action. FACTS: PDCP extended a P4.4 million loan to DATICOR, which stipulated that DATICOR shall pay: a service fee of 1% per annum (later increased 6% per annum) on the outstanding balance; 12% per annum interest; and penalty charges 2% per month in case of default. The loans were secured by real estate mortgages over six (6) parcels of land and chattel mortgages over machinery and equipment. DATICOR paid a total of P3 million to PDCP, which the latter applied to interest, service fees and penalty charges. This left them with an outstanding balance of P10 million, according to PDCP’s computation. DATICOR filed a complaint against PDCP for violation of the Usury Law and annulment of contract and damages. The CFI dismissed the complaint. The IAC set aside the dismissal and declared void and of no effect the stipulation of interest in the loan agreement. PDCP appealed the IAC's decision to SC. In the interim, PDCP assigned a portion of its receivables from DATICOR to FEBTC for of P5.4 M. FEBTC and DATICOR, in a MOA, agreed to P6.4 million as full settlement of the receivables. SC affirmed in toto the decision of the IAC, nullifying the stipulation of interests. DATICOR thus filed a Complaint for sum of money against PDCP and FEBTC to recover the excess payment which they computed to be P5.3 million. RTC ordered PDCP to pay petitioners P4.035 million, to bear interest at 12% per annum until fully paid; to release or cancel the mortgages and to return the corresponding titles to petitioners; and to pay the costs of the suit. RTC dismissed the complaint against FEBTC for lack of cause of action since the MOA between petitioners and FEBTC was not subject to SC decision, FEBTC not being a party thereto. Petitioners and PDCP appealed to the CA, which held that petitioners' outstanding obligation (determined to be only P1.4 million) could not be increased or decreased by any act of the creditor PDCP, and held that when PDCP assigned its receivables, the amount payable to it by DATICOR was the same amount payable to assignee FEBTC, irrespective of any stipulation that PDCP and FEBTC might have provided in the Deed of Assignment, DATICOR not having been a party thereto, hence, not bound by its terms. By the principle of solutio indebiti, the CA held that FEBTC was bound to refund DATICOR the excess payment of P5 million it received; and that FEBTC could recover from PDCP the P4.035 million for the overpayment for the assigned receivables. But since DATICOR claimed in its complaint only of P965,000 from FEBTC, the latter was ordered to pay them only that amount. Petitioners filed before the RTC another Complaint against FEBTC to recover the balance of the excess payment of P4.335 million. The trial court dismissed petitioners' complaint on the ground of res judicata and splitting of cause of action. It recalled that petitioners had filed an action to recover the alleged overpayment both from PDCP and FEBTC and that the CA Decision, ordering PDCP to release and cancel the mortgages and FEBTC to pay P965,000 with interest became final and executory. ISSUE: Whether the action should be dismissed on the ground of res judicata YES. There is no doubt that the judgment on appeal relative to the first civil case was a final judgment. Not only did it dispose of the case on the merits, it also became executory as a consequence of the denial of FEBTC’s motion for reconsideration and appeal. In fact, authorities tend to widen rather than restrict the doctrine of res judicata on the ground that public as well as private interest demands the ending of suits by requiring the parties to sue once and for all in the same case all the special proceedings and remedies to which they are entitled. Section 47 of Rule 39 lays down two main rules. Section 49(b) enunciates the first rule of res judicata known as “bar by prior judgment” or “estoppel by judgment,” which states that the judgment or decree of a court of competent jurisdiction on the merits concludes the parties and their privies to the litigation and constitutes a bar to a new action or suit involving the same cause of action either before the same or any other tribunal. Stated otherwise, “bar by former judgment” makes the judgment rendered in the first case an absolute bar to the subsequent action since that judgment is conclusive not only as to the matters offered and received to sustain it but also as to SJS ‘13 – Comprehensive Reviewer

Page 76

any other matter which might have been offered for that purpose and which could have been adjudged therein. It is in this concept that the term res judicata is more commonly and generally used as a ground for a motion to dismiss in civil cases. The second rule of res judicata embodied in Section 47(c), Rule 39 is “conclusiveness of judgment.” This rule provides that any right, fact, or matter in issue directly adjudicated or necessarily involved in the determination of an action before a competent court in which a judgment or decree is rendered on the merits is conclusively settled by the judgment therein and cannot again be litigated between the parties and their privies whether or not the claim or demand, purpose, or subject matter of the two suits is the same. It refers to a situation where the judgment in the prior action operates as an estoppel only as to the matters actually determined or which were necessarily included therein. The case at bar satisfies the four essential requisites of “bar by prior judgment,” viz: a) finality of the former judgment; b) the court which rendered it had jurisdiction over the subject matter and the parties; c) it must be a judgment on the merits; and d) there must be, between the first and second actions, identity of parties, subject matter and causes of action.

Failure to state a cause of action HALIMAO v. VILLANUEVA (253 SCRA 1, 1996)

The rule that a motion to dismiss is to be considered as a hypothetical admission of the facts alleged in the complaint applies more particularly to cases in which the ground for dismissal is the failure of the complaint to state a cause of action. FACTS: Reynaldo Halimao wrote a letter to the Chief Justice, alleging that respondents, without lawful authority and armed with armalites and handguns, forcibly entered the Oo Kian Tiok Compound in Cainta, Rizal, of which complainant was caretaker. Complainant prayed that an investigation be conducted and that respondents be disbarred. Respondents Villanueva et. al. filed a comment, claiming that the complaint is a mere duplication of the complaint filed by Danilo Hernandez in Administrative Case No. 3835, which this Court had already dismissed for lack of merit. They pointed out that both complaints arose from the same incident and the same acts complained of and that Danilo Hernandez, who filed the prior case, is the same person whose affidavit is attached to the complaint in this case. Co-respondent Ferrer claimed that the two complaints were filed for the purpose of harassing him because he was the principal lawyer of Atty. Daniel Villanueva in two cases before the SEC. This case was referred to the IBP, whose Board of Governors dismissed the case. The Investigating Commissioner found that the complaint is barred by the decision in Administrative Case No. 3835 which involved the same incident. The complaints in the two cases were similarly worded. Complainant filed a motion for reconsideration of the resolution of the IBP Board of Governors, alleging that the commissioner erroneously dismissed the complaint since the respondents are deemed to have admitted the allegations of the complaint against them by filing a motion to dismiss ISSUE: Whether the respondents hypothetically admitted petitioner’s allegations by filing a motion to dismiss NO. The rule that a motion to dismiss is to be considered as a hypothetical admission of the facts alleged in the complaint applies more particularly to cases in which the ground for dismissal is the failure of the complaint to state a cause of action. This rule does not apply to other grounds for dismissal. In such cases, the hypothetical admission is limited to the facts alleged in the complaint which relate to and are necessary for the resolution of these grounds as preliminary matters involving substantive or procedural laws, but not to the other facts of the case. Two motions for reconsideration of this resolution were filed by the complainant therein, both of which were denied. While the complainant (Danilo Hernandez) in Administrative Case No. 3835 is different from the complainant in the present case, the fact is that they have an identity of interest, as the Investigating Commissioner ruled. Both complainants were employed at the Oo Kian Tiok Compound at the time of the alleged incident. Both complain of the same act allegedly committed by respondents. The resolution of this Court in Administrative Case No. 3835 is thus conclusive in this case, it appearing that the complaint in this case is nothing but a duplication of the complaint of Danilo Hernandez in the prior case. TAN v. CA (295 SCRA 247, 1998)

SJS ‘13 – Comprehensive Reviewer

Page 77

General rule: Averments in the complaint are deemed hypothetically admitted upon filing of a Motion to Dismiss grounded on failure to state a cause of action Exceptions: Motion to Dismiss does not admit the following: 1) Epithets of fraud 2) Allegations of legal conclusions 3) Erroneous statements of law 4) Inferences or conclusions from facts not stated 5) Conclusions of law 6) Allegations of fact, falsity of which is subject to judicial notice 7) Matters of evidence 8) Surplusage and irrelevant matter 9) Scandalous or insulting matter 10) Legally impossible facts 11) Unfounded facts by record incorporated in pleading or document General averments contradicted FACTS: Tan Keh sold two parcels of land to Tan Kiat, but failed to effect the immediate transfer of the properties since Tan Kiat was still a foreign national at the time of the sale. Nevertheless Tan Keh secured the sale by executing a lease contract of 40 years in favor of Tan Kiat. Four years later, Tan Keh sold the properties to his brother, Tan. Tan knowingly held the property in trust for Tan Kiat until the latter acquires Filipino citizenship. The new TCTs were issued in the name of Tan as trustee of Tan Kiat. Tank Keh and Tan executed another lease contract to secure the conveyance of the property to Tan Kiat. Tan Kiat never paid rental and no demand for rentals was made on him. Tan Died. Tan Kiat thereafter demanded for the conveyance of the property as he was finally a naturalized Filipino. Petitioners failed to convey them. Tan Kiat filed a complaint for recovery of property. Petitioners moved for its dismissal based, among others, on failure to state a cause of action. RTC dismissed complaint acceding to all grounds set forth by the petitioners. CA reversed and ordered that case be remanded for further proceedings. ISSUE: Whether the complaint stated no cause of action YES. Averments in the complaint are deemed hypothetically admitted upon filing of a Motion to Dismiss grounded on failure to state a cause of action. But there are also limitations to such rule. In the case at bar, the “trust theory” claimed by Tan Kiat does not hold water. The lease contract as evidenced by document attached with the Motion to Dismiss and admitted by Tan Kiat already belies the latter’s claim of ownership. There is an apparent lessor-lessee relationship. Ownership of Tan is further supported by the annotated mortgage on the back of the TCT which Tan executed in favor of a bank so as to secure a loan. In truth, By the very nature of a mortgage contract, Tan could not have mortgage the property if he was not the real owner. Having failed to prove the trust relationship, it may be gleaned from the allegations that the transaction was a double sale instead. Since Tan had the TCT in his name, he is presumed to have the better right. Statute of Frauds ASIA PRODUCTION CO., INC. v. PANO (205 SCRA 458, 1992)

Under Article 1403, the contracts concerned are simply "unenforceable" and the requirement that they—or some note or memorandum thereof — be in writing refers only to the manner they are to be proved. It goes without saying then, that the statute will apply only to executory rather than executed contracts. Partial execution is even enough to bar the application of the statute.

SJS ‘13 – Comprehensive Reviewer

Page 78

FACTS: Respondents Hua and Dy, owners of a building constructed on a lot leased from Lucio San Andres and located in Bulacan, sold the building to the petitioners for P170,000.00, with the assurance that respondents will also assign to them the contract of lease over the land. The above agreement and promise were not reduced to writing. Private respondents undertook to deliver the deed of conveyance over the building and the deed of assignment of the contract of lease within sixty (60) days upon the P20,000 downpayment. The balance was to be paid in monthly installments. Petitioners paid the downpayment and issued eight (8) postdated checks for the payment of the eight (8) monthly installments. Petitioners constructed a weaving factory on the leased lot. Unfortunately, private respondents, despite extensions granted, failed to comply with their undertaking to execute the deed of sale and to assign the contract despite the fact that they were able to encash the checks in the total amount of P30,000. Worse, the lot owner made it plain to petitioners that he was unwilling to give consent to the assignment of the lease unless petitioners agreed to certain onerous terms, such as an increase in rental, or the purchase of the land at a very unconscionable price. Petitioners removed all their property, machinery and equipment from the building, vacated the same and returned its possession to private respondents. They demanded from the latter the return of their partial payment for the purchase price of the building in the total sum of P50,000, which respondents refused to return. Petitioner filed a complaint for recovery and of actual, moral and exemplary damages and attorney's fees with the CFI. Hua was declared in default. Dy filed a motion to dismiss the complaint on the ground that the claim on which the action is based — an alleged purchase of a building which is not evidenced by any writing — cannot be proved by parol evidence since Article 1356 in relation to Article 1358 of the Civil Code requires that it should be in writing. The RTC granted the motion to dismiss on the ground that the complaint is barred by the Statute of Frauds. Their motion for reconsideration was denied for the reason that the oral contract in this case was not removed from the operation of the Statute of Frauds because there was no full or complete performance by the petitioners of the contract as required by Jurisprudence. ISSUE: Whether petitioner’s action is barred by the Statute of Frauds NO. Article 1403 of the Civil Code declares the following contracts, among others, as unenforceable, unless they are ratified: The purpose of the statute is to prevent fraud and perjury in the enforcement of obligations depending for their evidence on the unassisted memory of witnesses by requiring certain enumerated contracts and transactions to be evidenced by a writing signed by the party to be charged. It was not designed to further or perpetuate fraud. Under Article 1403, the contracts concerned are simply "unenforceable" and the requirement that they—or some note or memorandum thereof — be in writing refers only to the manner they are to be proved. It goes without saying then, that the statute will apply only to executory rather than executed contracts. Partial execution is even enough to bar the application of the statute. The instant case is not for specific performance of the agreement to sell the building and to assign the leasehold right, but to recover the partial payment for the agreed purchase price of the building. By their motion to dismiss, private respondents theoretically or hypothetically admitted the truth of the allegations of fact in the complaint. The action is definitely not one for specific performance; hence the Statute of Frauds does not apply. And even if it were for specific performance, partial execution thereof by petitioners effectively bars the private respondents from invoking it. Condition precedent SUNVILLE TIMBER PRODUCTS, INC. v. ABAD (206 SCRA 482, 1992)

The doctrine of exhaustion of administrative remedies calls for resort first to the appropriate administrative authorities in the resolution of a controversy falling under their jurisdiction before the same may be elevated to the courts of justice for review. FACTS: Sunville Timber Products (Sunville) was granted a Timber License Agreement (TLA), authorizing it to cut, remove and utilize timber within the concession area covering 29,500 hectares of forest land in Zamboanga del Sur, for a period of 10 years. The respondents filed a petition with the DENR for the cancellation of the TLA and with the RTC for injunction in a civil case, both on the ground of serious violations of its conditions and the provisions of forestry laws. Sunville moved to dismiss this case on the ground that the plaintiffs had not yet exhausted administrative remedies, among others. The motion to dismiss and the motion for reconsideration were denied. The CA sustained the RTC’s decision. CA held that the doctrine of exhaustion of administrative remedies was not without exception and pointed to the several instances approved by this Court where it could be dispensed with. The applicable exception was the urgent need for judicial intervention because City Council of Pagadian requested the Bureau of Forest Development to reserve 1,000 hectares in Lison Valley. This request remained unacted upon. Instead a TLA covering 29,500 hectares, including the area requested, was given to petitioner Sunville. Due to the erosion caused by Sunville’s logging operations heavy floods have occurred in areas adjoining the logging concessions. Thus, it is urgent that indiscriminate logging be stopped. Sunville contends that the doctrine of exhaustion of administrative remedies was not correctly applied ISSUE: Whether the application of the doctrine of exhaustion of administrative remedies is correct NO. The doctrine of exhaustion of administrative remedies calls for resort first to the appropriate administrative authorities in the resolution of a controversy falling under their jurisdiction before the same may be elevated to the courts of justice for review. There is the explicit language of pertinent laws vesting in the DENR the power and function "to regulate the development, disposition, extraction, exploration and use of the country's forests" and "to exercise exclusive jurisdiction" in the SJS ‘13 – Comprehensive Reviewer

Page 79

"management and disposition of all lands of the public domain," and in the Forest Management Bureau the responsibility for the enforcement of the forestry laws aid regulations here claimed to have been violated. This comprehensive conferment clearly implies at the very least that the DENR should be allowed to rule in the first instance on any controversy coming under its express powers before the courts of justice may intervene. The charge involves factual issues calling for the presentation of supporting evidence. Such evidence is best evaluated first by the administrative authorities, employing their specialized knowledge of the agreement and the rules allegedly violated, before the courts may step in to exercise their powers of review. Who files How pleaded Period A motion to dismiss may be filed within the time for but before filing the answer to the complaint or pleading asserting a claim. (Sec. 1, Rule 16) As affirmative defense If no motion to dismiss has been filed, (1) any of the grounds for dismissal provided for in this Rule may be pleaded as an affirmative defense in the answer, and (2) a preliminary hearing may be had thereon as if a motion to dismiss had been filed, in the discretion of the court, (Sec. 6, Rule 16) -counterclaim which may be prosecuted in same or separate action refers to permissive counterclaim Hearing and resolution Hearing At the hearing of the motion, the parties shall submit (1) their arguments on the questions of law and (2) their evidence on the questions of fact involved except those not available at that time. NOTE: 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. 2, Rule 16) Resolution of motion After the hearing, the court may (1) dismiss the action or claim, (2) deny the motion, or (3) 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. (Sec. 3, Rule 6)

MUNICIPALITY OF BINAN v. CA (219 SCRA 69, 1993)

Preliminary Hearing under Sec 5, Rule 16 is not mandatory even when the same is prayed for, It rests largely on the sound discretion of the trial court. A preliminary hearing on an affirmative defense for failure to state a cause of action is not necessary. FACTS: Petitioner Municipality of Binan filed for unlawful detainer against private respondent Garcia, stating that it was no longer amenable to the renewal of its 25-year lease contract with private respondent over the premises involved because of its pressing need to use the same for national and provincial offices. Garcia filed his answer to the complaint saying that the contract of lease had not yet expired and, assuming that it had expired, he has exercised his option to stay in the premises for another 25 years as expressly provided in the said contract. Petitioner filed its reply. Subsequently private respondent filed a "Motion for Preliminary Hearing as if a Motion to Dismiss Has Been Filed" on the ground that the complaint states no cause of action, reiterating his previous argument. The MTC ordered private respondent to vacate the premises. Private respondent filed a "Manifestation/Motion" in the nature of a motion to dismiss, praying that the same be first resolved instead of rendering judgment on the pleadings. Also, private respondent filed a notice of appeal to the RTC. Petitioner filed a motion for discretionary execution, which was granted. A writ of execution was issued directing the deputy sheriff to enforce the terms. Private respondent filed with the CA an appeal on the ground that the lower court failed to conduct a preliminary hearing as prayed by his previous motion. CA granted private respondent’s appeal

SJS ‘13 – Comprehensive Reviewer

Page 80

ISSUE: Whether or not a preliminary hearing for a Motion to Dismiss is mandatory NO. It cannot be said that the lower court committed a grave abuse of discretion or exceeded its jurisdiction when it failed to conduct a preliminary hearing, as prayed for in private respondent's "Motion for Preliminary Hearing as if a Motion to Dismiss Has Been Filed," before rendering judgment on the merits of the case. The motion of private respondent is anchored on the ground that the complaint states no cause of action since the original term of 25 years stipulated in the contract of lease had not yet expired and assuming that it had expired, private respondent had made known to petitioner his exclusive option to renew it for another 25 years. Section 5, Rule 16 allows the grounds for a motion to dismiss to be set up as affirmative defenses in the answer if no motion to dismiss has been filed. However, contrary to the claim of private respondent, the preliminary hearing permitted under the said provision is not mandatory even when the same is prayed for. It rests largely on the discretion of the trial court. The use of the word "may" in said provision shows that such a hearing is not a matter of right demandable from the trial court. Where the provision reads "may," this word shows that it is not mandatory but discretional. It is an auxiliary verb indicating liberty, opportunity, permission and possibility. Moreover, a preliminary hearing on an affirmative defense for failure to state a cause of action is not necessary. It is a well-settled rule that in a motion to dismiss based on the ground that the complaint fails to state a cause of action, the question submitted to the court for determination is the sufficiency of the allegations in the complaint itself. Whether those allegations are true or not is beside the point, for their truth is hypothetically admitted by the motion. In other words, to determine sufficiency of the cause of action, only the facts alleged in the complaint, and no other should be considered. - preliminary hearing not mandatory - preliminary hearing on an affirmative defense or failure to state a cause of action not necessary Effects Of dismissal An order granting a motion to dismiss based on the following shall bar the refiling of the same action or claim: (1) That the cause of action is barred by a prior judgment or by the statute of limitations; (2) That the claim or demand set forth in the plaintiff’s pleading has been paid, waived, abandoned, or otherwise extinguished; (3) That the claim on which the action is founded is unenforceable under the provisions of the statute of frauds; and NOTE: They are still subject to the right of appeal . (Sec. 5, Rule 16) -appealable; refiling barred if motion based on Sec. 1 (f), (h), and (i) On periods for pleading If the motion is denied— the movant shall file his answer within the balance of the period prescribed by Rule 11 to which he was entitled at the time of serving his motion, BUT not less than five (5) days in any event, from his receipt of the notice of the denial. If the pleading is ordered to be amended— He shall file his answer within the period prescribed by Rule 11 counted from service of the amended pleading, unless the court provides a longer period. (Sec. 4, Rule 16) On other grounds and omnibus motion rule A motion attacking a pleading, order, judgment, or proceeding shall include all objections then available, and all objections not so included shall be deemed waived. (Sec. 8, Rule 15) Exceptions The court shall dismiss the claim when it appears from the pleadings or the evidence on record that (1) the court has no jurisdiction over the subject matter, (2) there is another action pending between the same parties for the same cause, or that (3) the action is barred by a prior judgment or (4) barred by the statute of limitations. (Sec. 1, Rule 9) Remedies If motion granted – appeal or refile complaint If motion denied – file answer, unless without jurisdiction, in which case, Rule 65 petition NPC v. CA (185 SCRA 169, 1990)

SJS ‘13 – Comprehensive Reviewer

Page 81

As a general rule, whenever a motion is denied, the petitioner should file an answer, go to trial and if the decision is adverse, reiterate the issue on appeal. However, if the court who denies the motion acts without or in excess of jurisdiction or with grave abuse of discretion the proper move is to proceed to a higher court for relief. FACTS: FINE Chemicals, a company engaged in the manufacturing of plastics applied with the NPC for direct power connection. Meralco assured that it had the capabilities to serve FINE but that to allow direct connections will be detrimental to other consumers since they’ll shoulder the additional subsidy burden. However, NPC went on with the plan anyway and provided its services with FINE. Because of this, Meralco filed a petition for Prohibition, Mandamus and Damages with Preliminary Injunction with the RTC. FINE countered saying that Injuction would be moot since the service has already been consummated and the facilities have been installed and are functional. Meralco amended its petition by incorporating an application for a writ of preliminary mandatory injunction. FINE moved to dismiss the amended petition on the ground of insufficiency of the allegations in the petition to plead a cause of action. The trial judge allowed Meralco to adduce evidence over FINE’s objection. FINE then filed a manifestation adopting its Motion to Dismiss but was denied. Undaunted, FINE proceeded directly to the CA and filed a petition for Certiorari, Prohibition and Mandamus. CA dismissed. Hence this petition. ISSUE: Whether Meralco’s petition in the lower court should be dismissed YES. As a general rule, whenever a motion is denied, the petitioner should file an answer, go to trial and if the decision is adverse, reiterate the issue on appeal. However, if the court who denies the motion acts without or in excess of jurisdiction or with grave abuse of discretion the proper move is to proceed to a higher court for relief. It would be unfair to require the defendant to undergo the ordeal and expense of trial under such circumstances as the remedy of appeal would not be plain and adequate. More importantly, petitioner’s motion to dismiss is based on the ground that the complaint states no cause of action, so that there is no need for a full blown trial. It is also important to note that the courts will strive to settle the controversy in a single proceeding leaving no root or branch to bear the seeds of future litigation.

DISMISSAL OF ACTIONS (RULE 17) Upon notice by plaintiff—before answer A complaint may be dismissed by the plaintiff (1) by filing a notice of dismissal (2) at any time before service of the answer or of a motion for summary judgment. Upon such notice being filed, the court shall issue an order confirming the dismissal.  The court does not have to approve the dismissal because it has no discretion on the matter.  Before an answer or motion for summary judgment has been served upon plaintiff, dismissal by the plaintiff is a matter of right.  It occurs as of the filing of the notice, not upon court’s confirmation. General rule: The dismissal made by filing a notice of dismissal is without prejudice. Exceptions: (1) The notice otherwise states; and (2) When filed by a plaintiff who has once dismissed in a competent court an action based on or including the same claim, in which case the notice operates as an adjudication upon the merits. (Sec. 1, Rule 17)

O.B. JOVENIR v. MACAMIR REALTY (2006)

SJS ‘13 – Comprehensive Reviewer

Page 82

The trial court has no discretion or option to deny the motion, since dismissal by the plaintiff under Section 1, Rule 17 is guaranteed as a matter of right to the plaintiffs. Even if the motion cites the most ridiculous of grounds for dismissal, the trial court has no choice but to consider the complaint as dismissed, since the plaintiff may opt for such dismissal as a matter of right, regardless of ground. FACTS: Macamir Realty and the Miranda Spouses (principal stockholders) filed a complaint against Jovenir Construction, seeking the annulment of the construction project entered into by private respondents with Jovenir, as well as for damages. Jovenir n allegedly misrepresented itself as a legitimate contractor. Madeja and Mangrobang, Jr., the impleaded defendants, filed their respective motions to dismiss. Madeja alleged that while the spouses Miranda had initiated the complaint on behalf of Macamir Realty, the real party-in-interest, they failed to attach any Board Resolution authorizing them to file suit on behalf of the corporation. Madeja, a member of the Board of Directors of Macamir Realty, averred as a fact that said Board had not authorized the spouses Miranda to initiate the complaint against Jovenir Realty. Ten (10) days after the filing of the complaint, private respondents filed a Motion to Withdraw Complaint, alleging that during the initial hearing on the prayer for preliminary injunction their counsel discovered a supposed technical defect in the complaint that may be a ground for the dismissal of this case. Thus, they prayed to be allowed to withdraw the complaint without prejudice. Jovenir Construction filed an opposition. However, just one day earlier, private respondents filed another complaint against the same defendants save for Madeja, and seeking the same reliefs as the first complaint. This time, a Board Resolution authorizing the spouses to file the Complaint on behalf of Macamir Realty was attached to the complaint. This second complaint was also filed with the Makati RTC. The Verification and Certification of Non-Forum Shopping in the second complaint was accomplished by Rosauro Miranda. Eleven (11) days after the filing of the Motion to Withdraw Complaint and seven (7) days after the filing of the second Complaint, the Makati RTC granted the Motion to Withdraw Complaint. The RTC noted an action may be dismissed by the plaintiffs even without Order of the Court by filing a notice of dismissal at anytime before the service of the answer under Rule 17, Section 1 of the Rules of Court, and accordingly considered the complaint withdrawn without prejudice. Jovenir filed a Motion to Dismiss the second complaint on the ground of forum-shopping. They pointed out that at the time of the filing of the second complaint, the first complaint was still pending. The Makati RTC denied the Motion to Dismiss. This Order was affirmed by the CA ISSUE: Whether the dismissal was improper since Macamir filed a Motion for Withdrawal instead of the required Notice of Dismissal NO. Section 1, Rule 17 of the 1964 Rules of Civil Procedure stated: Dismissal by the plaintiff — An action may be dismissed by the plaintiff without order of court by filing a notice of dismissal at any time before service of the answer or of a motion for summary judgment. Unless otherwise stated in the notice, the dismissal is without prejudice, except that a notice operates as an adjudication upon the merits when filed by a plaintiff who has once dismissed in a competent court an action based on or including the same claim. A class suit shall not be dismissed or compromised without the approval of the court. Indubitably, the provision ordained the dismissal of the complaint by the plaintiff as a matter of right at any time before service of the answer. The plaintiff was accorded the right to dismiss the complaint without the necessity of alleging in the notice of dismissal any ground nor of making any reservation. Evidently, respondents had the right to dismiss their complaint by mere notice when Jovenir had not yet served their answer on respondents. The Motion to Withdraw Complaint makes clear respondents’ "desire to withdraw the complaint without prejudice." That respondents resorted to a motion to effect what they could have instead by mere notice may be indicative of a certain degree of ignorance of procedural rules on the part of respondents’ counsel. Yet such "error," if it could be called as such, should hardly be of fatal consequence. Petitioners posit that the "remedy" of filing a notice of dismissal is not exclusive, respondents having the "option" of securing the court’s approval to the dismissal. On the contrary, the trial court has no discretion or option to deny the motion, since dismissal by the plaintiff under Section 1, Rule 17 is guaranteed as a matter of right to the plaintiffs. Even if the motion cites the most ridiculous of grounds for dismissal, the trial court has no choice but to consider the complaint as dismissed, since the plaintiff may opt for such dismissal as a matter of right, regardless of ground. While the Motion to Withdraw Complaint is styled as a "motion" and contains a "prayer", these are innocuous errors and superfluities that do not detract from its being a notice of dismissal made under said Section 1 of Rule 17 and which ipso facto dismissed the case. It is a hornbook rule that it is not the caption of a pleading but the allegations thereat that determines its nature. Thus, the complaint could be properly considered as having been dismissed or withdrawn as of the filing of the Motion to Withdraw Complaint. Accordingly, when respondents filed their new complaint relating to the same cause of action on, the old complaint was no longer pending. As noted at the onset, the 1997 Rules of Civil Procedure now requires that upon the filing of such notice, the court issue an order confirming the dismissal. The new requirement is intended to qualify the right of a party to dismiss the action before the adverse party files an answer or asks for summary judgment. Still, there is no cause to apply the 1997 Rules retroactively to this case. A plaintiff’s right to cause the dismissal of his complaint under the 1964 rules was unqualified. Procedural rules may not be given retroactive effect if vested rights would be disturbed, or if their application would not be feasible or would work injustice. SJS ‘13 – Comprehensive Reviewer

Page 83

Upon motion of plaintiff—after answer SEC. 2. Dismissal upon motion of plaintiff.—Except as provided in the preceding section, a complaint shall not be dismissed at the plaintiff’s instance save upon approval of the court and upon such terms and conditions as the court deems proper. If a counterclaim has been pleaded by a defendant prior to the service upon him of the plaintiff’s motion for dismissal, the dismissal shall be limited to the complaint. The dismissal shall be without prejudice to the right of the defendant to prosecute his counter claim in a separate action unless within fifteen (15) days from notice of the motion he manifests his preference to have his counterclaim resolved in the same action. Unless otherwise specified in the order, a dismissal under this paragraph shall be without prejudice. A class suit shall not be dismissed or compromised without the approval of the court. (2a) Effect of counterclaim Due to fault of plaintiff SEC. 3. Dismissal due to fault of plaintiff.—If, for no justifiable cause, the plaintiff fails to appear on the date of the presentation of his evidence in chief on the complaint, or to prosecute his action for an unreasonable length of time, or to comply with these Rules or any order of the court, 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. This dismissal shall have the effect of an adjudication upon the merits, unless otherwise declared by the court. (3a) CRUZ v. CA (2006)

Rule 17, Sec. 3 enumerates the instances where the complaint may be dismissed due to plaintiff's fault: (1) if he fails to appear on the date for the presentation of his evidence in chief; (2) if he fails to prosecute his action for an unreasonable length of time; or (3) if he fails to comply with the rules or any order of the court. Once a case is dismissed for failure to prosecute, this has the effect of an adjudication on the merits and is understood to be with prejudice to the filing of another action unless otherwise provided in the order of dismissal. In other words, unless there be a qualification in the order of dismissal that it is without prejudice, the dismissal FACTS: There are 4 cases involved in this controversy. 1st case: Unlawful Detainer before the MTC of Gapan, Nueva Ecija, decided in 1998 in favor of petitioner Cruz and Concepcion. 2nd case: Quieting of Title before the RTC of Gapan, Nueva Ecija which was dismissed for failure to prosecute as evidenced by the RTC in 2000. (Civil Case 1600) 3rd case: Suit for Injunction filed before the RTC of Gapan City, which was dismissed on ground of res judicata – because there was substantial identity of parties with the 2 nd case. 4th case: Annulment of Title With Damages filed with RTC of Gapan City, where petitioners interposed a Motion for Outright Dismissal of Civil Case, where the court granted the Motion for Outright dismissal on g reasoned that:ounds of res judicata and accion pendente lite, after finding that – (1) the 3rd case involve the same parties, subject matter and issue as that in the 1st case and 2nd case; (2) in all 3 cases, Mariano Bunag was included as party-plaintiff and Ernestina Concepcion as partydefendant; (3) the subject matter is a 1,160 sq.m parcel of land in San Nicolas, Gapan City;l (4) and the issue is who between the 2 parties has the lawful title over the same. The court hereby sentenced guilty of indirect Contempt of Court by reason of non-disclosure of Cases 1 and 2 in the Certificate/Verification of their complaint – as required by Section 5, Rule 7 of the ROC. The respondents filed a MFR which the Court granted by setting aside the order which granted the defendant’s Motion for the Outright Dismissal and the order citing the plaintiffs and counsel guilty for contempt of court. The court thereby ordered the defendants to file their answer/responsive pleading within 15 days from receipt of the Court order. Petitioners then appealed in the CA and the CA dismissed the petition for lack of merit, reasoning that there is no identity of parties between Case 1 and the instant case for the simple reason that plaintiffs in the case at bar were not parties in Case 1. Also, the plaintiffs and their counsel can not be said to have violated the rule against forum shopping. Plaintiffs and their counsel did not file Case 1 and therefore they are not obligated to inform this Court that they have filed a similar action involving the same issue with other court. In their comment, respondents Bunag and Vda. de Bunag maintain that the CA did not err when it held that there was no res judicata in the case at bar. Petitioners claim that res judicata applies in this case because all the elements thereof are present, which are - (1) there must be a final judgment or order; (2) said judgment or order must be on the merits; (3) the Court rendering the same must have jurisdiction on the subject matter and the parties; and (4) there must be between the two cases identity of parties, identity of subject matter, and identity of causes of action. SJS ‘13 – Comprehensive Reviewer

Page 84

On the other hand, private respondents argue the contrary alleging that the 2nd and 4 th elements are lacking. ISSUE: Whether there was a proper dismissal of the Civil Case 1600 (a case prior to the case at bar) - which is a necessary element for res judicata to attach. YES. Under the rule of res judicata, also known as “bar by prior judgment,” a final judgment rendered by a Court having jurisdiction of the subject matter and of the parties, is conclusive in a subsequent case between the same parties and their successor-in-interest, litigating for the same thing and under the same title and in the same capacity. On the 2nd element of res judicata – that (2) said judgment or order must be on the merits, the private respondents argue that the dismissal of CASE 2 (Quieting of Title) was not a dismissal on the merits. The dismissal of this case, they claim, will not bar the filing of the instant case, Case 4 (for Annulment of Title) because there was neither litigious consideration of the evidence nor any stipulations submitted by the parties at the trial. In fact, there was no pre-trial conference and that after four years of court inactivity, the case was dismissed for failure to prosecute. The SC ruled that the argument raised by the respondents is UNTENABLE. Section 3 of Rule 17 of the ROC provides: Section 3. Dismissal due to fault of plaintiff. – If, for no justifiable cause, the plaintiff fails to appear on the date of the presentation of his evidence in chief on the complaint, or to prosecute his action for an unreasonable length of time, or to comply with these Rules or any order of the court, 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. This dismissal shall have the effect of an adjudication upon the merits, unless otherwise declared by the court. The rule enumerates the instances where the complaint may be dismissed due to plaintiff's fault: (1) if he fails to appear on the date for the presentation of his evidence in chief; (2) if he fails to prosecute his action for an unreasonable length of time; or (3) if he fails to comply with the rules or any order of the court. Once a case is dismissed for failure to prosecute, this has the effect of an adjudication on the merits and is understood to be with prejudice to the filing of another action unless otherwise provided in the order of dismissal. In other words, unless there be a qualification in the order of dismissal that it is without prejudice, the dismissal should be regarded as an adjudication on the merits and is with prejudice. In the case at bar, the order dismissing Case 2 / Civil Case No. 1600 is based on the failure of the plaintiffs as well as counsel to appear on several settings despite due notices, precisely for the reception of plaintiffs’ evidence, upon motion of the defendant through Atty. Mark Arcilla, this case is dismissed for failure to prosecute. It is clear from the afore-mentioned order that said case was dismissed, upon petitioners’ motion, for failure of private respondents and their counsel to attend several scheduled hearings for the presentation of their evidence. Since the order did not contain a qualification whether same is with or without prejudice, following Section 3, it is deemed to be with prejudice and shall have the effect of an adjudication on the merits. A ruling based on a motion to dismiss, without any trial on the merits or formal presentation of evidence, can still be a judgment on the merits. Effect on counterclaim PINGA v. SANTIAGO (2006)

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: Petitioner Eduardo Pinga was named as one of two defendants in a complaint for injunction filed in RTC Zamboanga del Sur, by respondent Heirs of German Santiago, represented by Fernando Santiago. The Complaint alleged in essence that petitioner Pinga and co-defendant Saavedra had been unlawfully entering the coco lands of the respondent, cutting wood and bamboos and harvesting the fruits of the coconut trees therein. Respondents prayed that petitioner Pinga and Saavedra be enjoined from committing "acts of depredation" on their properties, and ordered to pay damages. In their Amended Answer with Counterclaim, petitioner and his co-defendant disputed respondents’ ownership of the properties in question, asserting that petitioner’s father, Edmundo, from whom defendants derived their interest in the properties, had been in possession thereof since the 1930s. By July of 2005, the trial of the case had not yet been completed. Moreover, respondents, as plaintiffs, had failed to present their evidence. It appears that the RTC already ordered the dismissal of the complaint after respondents’ counsel had sought the postponement of the hearing scheduled then. However, the order of dismissal was subsequently reconsidered by the RTC in an Order dated 9 June 2005, which took into account the assurance of respondents’ counsel that he would give priority to that case. At the hearing, plaintiffs’ counsel on record failed to appear, sending in his stead a representative who sought the postponement of the hearing. Counsel for defendants (who include herein petitioner) opposed the move for postponement and moved instead for the dismissal of the case. The RTC noted that it was obvious that respondents had failed to prosecute the case for an unreasonable length of time, in fact not having presented their evidence yet. On that ground, the complaint was dismissed. At the same time, the RTC allowed defendants "to present their evidence ex-parte." Respondents filed a Motion for Reconsideration . RTC granted respondents’ Motion for Reconsideration and dismissing the counterclaim. Petitioner Pinga filed a Motion for Reconsideration, but the same was denied by the RTC. Respondents filed an Opposition to Defendants’ Urgent Motion for Reconsideration, wherein they argued that that "compulsory counterclaims cannot SJS ‘13 – Comprehensive Reviewer

Page 85

be adjudicated independently of plaintiff’s cause of action," and "a conversu, the dismissal of the complaint carries with it the dismissal of the compulsory counterclaims." 1 The matter was elevated to this Court directly by way of a Petition for Review under Rule 45 on a pure question of law ISSUE: Whether the dismissal of the complaint necessarily carries the dismissal of the compulsory counterclaim NO. 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. On a prefatory note, the RTC, in dismissing the counterclaim, did not expressly adopt respondents’ argument that the dismissal of their complaint extended as well to the counterclaim. Instead, the RTC justified the dismissal of the counterclaim on the ground that "there is no opposition to [plaintiff’s] Motion for Reconsideration [seeking the dismissal of the counterclaim]." This explanation is hollow, considering that there is no mandatory rule requiring that an opposition be filed to a motion for reconsideration without need for a court order to that effect; and, as posited by petitioner, the "failure to file an opposition to the Plaintiff’s Motion for Reconsideration is definitely not one among the established grounds for dismissal [of the counterclaim]." Still, the dismissal of the counterclaim by the RTC betrays at very least a tacit recognition of respondents’ argument that the counterclaim did not survive the dismissal of the complaint. At most, the dismissal of the counterclaim over the objection of the defendant (herein petitioner) on grounds other than the merits of the counterclaim, despite the provisions under Rule 17 of the 1997 Rules of Civil Procedure, constitutes a debatable question of law, presently meriting justiciability through the instant action. The doctrine that the complaint may not be dismissed if the counterclaim cannot be independently adjudicated is not available to, and was not intended for the benefit of, a plaintiff who prevents or delays the prosecution of his own complaint. Otherwise, the trial of counterclaims would be made to depend upon the maneuvers of the plaintiff, and the rule would offer a premium to vexing or delaying tactics to the prejudice of the counterclaimants. It is in the same spirit that we have ruled that a complaint may not be withdrawn over the opposition of the defendant where the counterclaim is one that arises from, or is necessarily connected with, the plaintiff’s action and cannot remain pending for independent adjudication. Accordingly, the RTC clearly erred when it ordered the dismissal of the counterclaim, since Section 3, Rule 17 mandates that the dismissal of the complaint is without prejudice to the right of the defendant to prosecute the counterclaim in the same or separate action. If the RTC were to dismiss the counterclaim, it should be on the merits of such counterclaim. Reversal of the RTC is in order, and a remand is necessary for trial on the merits of the counterclaim. PERKIN ELMER v. DAKILA TRADING (2007)

Extraterritorial service of summons applies only where the action is in rem or quasi in rem, but not if an action is in personam. FACTS: Dakila Trading Corp (Dakila) entered into a Distribution Agreement with Perkin-Elmer Singapore Pte. Ltd. (PES) which appointed Dakila as sole distributor of its products in the Philippines. PES was obligated to give Dakila a commission for the sale of its products in the Philippines. Dakila was granted the right to purchase and sell the products of PES. The agreement further stipulated that Dakila shall order the products of PES, which it shall sell in the Philippines, either from PES itself or from PEIP. However, PES unilaterally terminated the Distribution Agreement, prompting Dakila to file before the RTC a Complaint for Collection of Sum of Money and Damages with Prayer for Issuance of a Writ of Attachment against PES and its affiliate, PerkinElmer Instruments Philippines Corporation (PEIP). RTC denied respondent’s prayer. Dakila filed Ex-Parte Motions for Issuance of Summons and for Leave of Court to Deputize Dakila’s General Manager (DGM) to Serve Summons Outside of the Philippines. RTC granted this motion. Thus, an Alias Summons was issued by the RTC to PES. But the said Alias Summons was served and received by Perkin-Elmer Asia (PEA), a corporation allegedly unrelated to PES. PEIP moved to dismiss the Complaint filed by Dakila. PEA, on the other hand, sent letters to Dakila and RTC to inform them of the wrongful service of summons. Accordingly, Dakila filed an Ex-Parte Motion to Admit Amended Complaint, together with the Amended Complaint claiming that (1) PEA had become a sole proprietorship owned by the PES, (2) PES changed its name to PEA, (3) such changes did not avoid its due and outstanding obligations to Dakila, and (4) the name of PES in the complaint should be changed to PEA. RTC admitted the Amended Complaint. Dakila filed another Motion for the Issuance of Summons and for Leave of Court to Deputize DGM to serve summons outside the Philippines. RTC granted the motion. RTC thus issued summons and the DGM went to Singapore and served summons on PES. Meanwhile, RTC denied the Motion to Dismiss filed by PEIP, compelling the latter to file its Answer to the Amended Complaint. PES filed with the RTC a Special Appearance and Motion to Dismiss the Amended Complaint, which were denied. It held that even though the Amended Complaint is primarily for damages, it does relate to a property of PES, to which the latter has a claim interest, or an actual or contingent lien, which will make it fall under one of the requisites for extraterritorial service. PES filed a Petition for Certiorari under Rule 65 with application for temporary restraining order and/or preliminary injunction before the CA. The CA affirmed the RTC Orders. ISSUE: Whether summons were properly served under the 2nd or 4th instance of extra-territorial service NO. Extraterritorial service of summons applies only where the action is in rem or quasi in rem, but not if an action is in personam. In the case at bar, there can never be a valid extraterritorial service of summons upon it, because the case involving collection of a sum of money and damages is an action in personam, as it deals with the personal liability of PES by reason of the alleged unilateral termination of the Distribution Agreement. The objective sought in Dakila’s Complaint was to establish a claim against PES. Moreover, The action instituted by Dakila affects the parties alone, not the whole world. SJS ‘13 – Comprehensive Reviewer

Page 86

Thus, being an action in personam, personal service of summons within the Philippines is necessary in order for the RTC to validly acquire jurisdiction over the person of PES, and this is not possible in the present case because the PES is a nonresident and is not found within the Philippines. Dakila’s allegation in its Amended Complaint that PES had personal property within the Philippines in the form of shares of stock in PEIP did not make the case fall under any of the four instances mentioned in Section 15, Rule 14 of the Rules of Court, as to convert the action in personam to an action in rem or quasi in rem and, subsequently, make the extraterritorial service of summons upon the petitioner valid. The 2nd instance for extra-territorial service has no application in the case. The action for collection of a sum of money and damages was purely based on the personal liability of the PES. For the action to be one falling under the 2 nd instance, the main subject matter of the action must be the property itself of the PES in the Philippines and in such instance, judgment will be limited to the res. However, the allegations made by the respondent that the petitioner has property within the Philippines in support of its application for the issuance of a writ of attachment was actually denied by the RTC. Neither does the allegation that PES had personal property within the Philippines in the form of shares of stock in PEIP convert the case from an action in personam to one quasi in rem, so as to qualify said case under the 4 th instance of extraterritorial service. What is required is not a mere allegation of the existence of personal property belonging to the non-resident defendant within the Philippines but that the non-resident defendant’s personal property located within the Philippines must have been actually attached. Evidently, PES’s personal property within the Philippines, in the form of shares of stock in PEIP, had not been attached; hence, the case for collection of sum of money and damages remains an action in personam. In the case at bar, there can never be a valid extraterritorial service of summons upon it, because the case involving collection of a sum of money and damages is an action in personam, as it deals with the personal liability of PES by reason of the alleged unilateral termination of the Distribution Agreement. The objective sought in Dakila’s Complaint was to establish a claim against PES. Moreover, The action instituted by Dakila affects the parties alone, not the whole world. Thus, being an action in personam, personal service of summons within the Philippines is necessary in order for the RTC to validly acquire jurisdiction over the person of PES, and this is not possible in the present case because the PES is a nonresident and is not found within the Philippines. Dakila’s allegation in its Amended Complaint that PES had personal property within the Philippines in the form of shares of stock in PEIP did not make the case fall under any of the four instances mentioned in Section 15, Rule 14 of the Rules of Court, as to convert the action in personam to an action in rem or quasi in rem and, subsequently, make the extraterritorial service of summons upon the petitioner valid. Remedy of plaintiff KO v. PNB (419 SCRA 298, 2006)

Considering that an order of dismissal for failure to prosecute has the effect of an adjudication on the merits, petitioners’ counsel should have filed a notice of appeal with the appellate court within the reglementary period. Instead of filing a petition under Rule 45 of the Rules of Court, the proper recourse was an ordinary appeal with the Court of Appeals under Rule 41. FACTS: This is a petition for review on certiorari assailing the Order of the Regional Trial Court of Laoag City.The case stemmed from an action filed by petitioners in the trial court for Annulment of Mortgage, Extra-judicial Foreclosure Sale, Annulment of Transfer Certificate and Deed of Sale with a Prayer for Preliminary Injunction and Restraining Order. The complaint alleged that the assailed mortgage and the foreclosure proceedings were null and void since the written consent of petitioners, as beneficiaries of the mortgaged property, were not secured. Respondent bank denied the claim and alleged that in the execution of the mortgage, petitioners in fact gave their consent. During the course of the proceedings, petitioners and their counsel failed to attend a scheduled trial. Upon motion of respondent bank, the complaint was dismissed. When the case was called, Atty. Lorenzo Castillo, counsel for the plaintiffs did not appear despite proper notice. No plaintiff appeared. Atty. Eduardo Alcantara, counsel for defendant bank appeared. Atty. Alcantara manifested that there were numerous occasions in the past when plaintiffs and counsel did not attend. He pointed out that there is an apparent lack of interest on the part of plaintiff to prosecute the action. He moved to dismiss the case on that legal ground. Petitioners filed a motion for reconsideration claiming that they have been continuously pursuing negotiations with respondent bank to purchase back the property and have gained positive results. Respondent bank countered that from the time the complaint was filed, a period of three years had elapsed but petitioners failed to prosecute their case, showing lack of interest in the early resolution thereof. The trial court denied the motion for reconsideration. ISSUE: Whether the petitioners, who failed to attend a scheduled trial and dismissed by the court, may file a petition for review on certiorari under Rule 45 NO. On the procedural aspect, we find that petitioners erred in filing a petition for review on certiorari under Rule 45 of the Rules of Court instead of filing an appeal with the Court of Appeals. Section 3, Rule 17 of the Rules of Court provides: SEC. 3. Dismissal due to fault of plaintiff.—If, for no justifiable cause, the plaintiff fails to appear on the date of the presentation of his evidence in chief on the complaint, or to prosecute his action for an unreasonable length of time, or to comply with these Rules or any order of the court, the complaint may be dismissed upon the motion of the defendant SJS ‘13 – Comprehensive Reviewer

Page 87

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. This dismissal shall have the effect of an adjudication upon the merits, unless otherwise declared by the court. Upon the order of dismissal, petitioners’ counsel filed a timely motion for reconsideration which was denied by the trial court. The rule is clear. In order to perfect an appeal all that is required is a pro forma notice of appeal. Perhaps due to failure to file a notice of appeal within the remaining two days of the appeal period, petitioners’ counsel instead filed the instant petition. The rules of procedure, however, do not exist for the convenience of the litigants. These rules are established to provide order to and enhance the efficiency of our judicial system. They are not to be trifled with lightly or overlooked by mere expedience of invoking "substantial justice." Procedural law has its own rationale in the orderly administration of justice, namely, to ensure the effective enforcement of substantive rights by providing for a system that obviates arbitrariness, caprice, despotism or whimsicality in the settlement of disputes. The enforcement of procedural rules is not antithetical to the substantive rights of the litigants. The expeditious disposition of cases is as much the duty of the plaintiff as the court. It must be remembered that a defendant in a case likewise has the right to the speedy disposition of the action filed against him 7 considering that any delay in the proceedings entail prolonged anxiety and valuable time wasted. In the case at bar, three years have since lapsed from the filing of the complaint on May 3, 2002 and the order of dismissal on April 27, 2005. Petitioners’ failure to prosecute their case and proceed with the trial during the span of three years leads to no other conclusion than that petitioners have no interest in seeing their case terminated at the earliest possible time; or that petitioners’ case is unmeritorious from inception. Whichever the case may be, the dismissal order of the trial court stand and is now immutable. Petitioners cannot claim that they were deprived of due process. True, the right to due process safeguards the opportunity to be heard and to submit any evidence one may have in support of his claim or defense. Nonetheless, we have time and again held that where the opportunity to be heard, either through verbal arguments or pleadings, is accorded, and the party can "present its side" or defend its "interest in due course," there is no denial of due process. What the law proscribes is the lack of opportunity to be heard. Petitioners had the opportunity to present their case and claim the relief they seek. But their inadvertence and lack of circumspect renders the trial court’s order dismissing their case final and executory. Dismissal of counterclaim SEC. 4. Dismissal of counterclaim, cross-claim, or third-party complaint.—The provisions of this Rule shall apply. to the dismissal of any counterclaim, cross-claim, or third-party complaint. A voluntary dismissal by the claimant by notice as in section 1 of this Rule, shall be made before a responsive pleading or a motion for summary judgment is served or, if there is none, before the introduction of evidence at the trial or hearing. (4n)

DEFAULT (Rule 9, Sec. 3) Nature in general A defending party shall be declared in default when (1) Ground: He fails to answer within the time allowed therefor, the court shall, (2) The claiming party files a motion to declare the defending party in default, furnishing proof of failure to answer (3) Said party gives notice of such motion to the defending party, The court shall proceed to render judgment granting the claimant such relief as his pleading may warrant,  unless the court in its discretion requires the claimant to submit evidence.  Such reception of evidence may be delegated to the clerk of court. (1a, R18) (a) Effect of order of default.—A party in default shall be entitled to notice of subsequent proceedings but NOT to take part in the trial. (b) Relief from order of default.—A party declared in default may at any time after notice thereof and before judgment file a motion under oath to set aside the order of default upon proper showing that his failure to answer was due to fraud, accident, mistake or excusable negligence and that he has a meritorious defense. In such case, the order of default may be set aside on such terms and conditions as the judge may impose in the interest of justice. (c) Effect of partial default.—When a pleading asserting a claim states a common cause of action against several defending parties, some of whom answer and the others fail to do so, the court shall try the case against all upon the answers thus filed and render judgment upon the evidence presented. (d) Extent of relief to be awarded.—A judgment rendered against a party in default shall not exceed the amount or be different in kind from that prayed for nor award unliquidated damages. (e) Where no defaults allowed.—If the defending party in an action for annulment or declaration of nullity of marriage or for legal separation fails to answer, the court shall order the prosecuting attorney to investigate whether or not a collusion between the parties exists, and if there is no collusion, to intervene for the State in order to see to it that the evidence submitted is not fabricated. (Sec. 3, Rule 9) When may a defendant be declared in default? (1) Failure to file answer (2) Failure to furnish copy of answer SJS ‘13 – Comprehensive Reviewer

Page 88

(3) Failure to appear at pre-trial (4) Failure to comply with modes of discovery When allowed Effect GAJUDO v. TRB (2006)

No incompatibility bet. Section 3, Rule 9 of the 1997 Rules of Civil Procedure and the rule on preponderance of evidence under Section 1, Rule 133 of the Rules of Court FACTS: Ps filed a complaint before RTC of QC against R seeking for annulment of the extra-judicial foreclosure and auction sale made by city sheriff of parcel of land covered by TCT No. 16711 of the RD of QC the conventional redemption thereof, and prayed for damages and the issuance of a writ of preliminary injunction. Complaint alleged that: P Chua obtained a loan from R bank in the amount of P75k secured by a real estate mortgage over a parcel of land, and owned in common by Ps. the loan was not paid, R commenced extra-judicial foreclosure, property was sold in the auction sale to R for the sum of P24.9k Such sale was tainted with irregularity because, the bid price was shockingly or unconscionably, low; that the other Ps (Gajudos) failed to redeem the property due to their lack of knowledge of their right of redemption, and want of sufficient education; that Chua offered to buy back, and R also agreed to sell back, the foreclosed property, on the understanding that Chua would pay Rthe amount of P40k, the sum that the bank paid at the auction sale, plus interest; that Chua made an initial payment P4k,; that, in a sudden change of position, R wrote Chua asking that he could repurchase the property, but based on the current market value thereof; R wrote Chua requiring him to tender a new offer. R filed its answer with counterclaim, asserting that the foreclosure sale of the mortgaged property was done in accordance with law; and that the bid price was neither unconscionable, nor shockingly low; that Ps slept on their rights when they failed to redeem the property within the one year statutory period. "Pre-trial having been concluded, the parties entered upon trial, a big conflagration hit the City Hall of QC (amazing!) which destroyedthe records of the case. After the records were reconstituted, the foreclosed property was sold by R to the Ceroferr Realty Corporation, and that the notice of lis pendens annotated on the certificate of title had already been cancelled. P with leave of court, amended their complaint, but the Trial Court dismissed the case ‘without prejudice’ due to P’s failure to pay additional filing fees. P re-filed the complaint with the same Court, impleading as additional defendants the Ceroferr Realty Corporation and additional cause of action, that new defendants conspired with R in canceling the notice of lis pendens. Summons was served on R,P filed a motion to set case for pre-trial, which motion was denied by the TC in its Order of on the ground that R bank has not yet filed its answer. P filed a motion to declare R in default, alleging that no answer has been filed despite the service of summons. TC declared the motion submitted for resolution upon submission by Ps of proof of service of the motion on R. Upon giving proof, R was declared in default. P were allowed by the Court allowed to present evidence ex parte. A partial decision was made. R filed a motion to set aside partial decision by default and admit that their Answer with counterclaim: averred that the erroneous filing of said answer was due to an honest mistake of the typist and inadvertence of its counsel.Motion was denied. Respondent bank appealed the Partial Decision to the CA which ruled in favor of R. ISSUE: Whether CA erred in failing to apply the provisions of Section 3, Rule 9 of the 1997 Rules of Civil Procedure and in applying instead the rule on preponderance of evidence under Section 1, Rule 133 of the Rules of Court. NO. The Petition has no merit. Ps argue that the quantum of evidence for judgments flowing from a default order under Section 3 of Rule 9 is not the same as that provided for in Section 1 of Rule 133. Between the two rules, there is no incompatibility that would preclude the application of either one of them. To begin with, Section 3 of Rule 9 governs the procedure which the trial court is directed to take when a defendant fails to file an answer. According to this provision, the court "shall proceed to render judgment granting the claimant such relief as his pleading may warrant," subject to the court’s discretion on whether to require the presentation of evidence ex parte. The same provision also sets down guidelines on the nature and extent of the relief that may be granted. In particular, the court’s judgment "shall not exceed the amount or be different in kind from that prayed for nor award unliquidated damages." parties must rely on the strength of their own evidence, not upon the weakness of the defense offered by their opponent. This principle holds true, especially when the latter has had no opportunity to present evidence because of a default order. A defaulted defendant is not actually thrown out of court. While in a sense it may be said that by defaulting he leaves himself at the mercy of the court, the rules see to it that any judgment against him must be in accordance with law. The evidence to support the plaintiff’s cause is, of course, presented in his absence, but the court is not supposed to admit that which is basically incompetent. Although the defendant would not be in a position to object, elementary justice requires that only legal evidence should be considered against him. If the evidence presented should not be sufficient to justify a judgment for the plaintiff, the complaint must be dismissed. And if an unfavorable judgment should be justifiable, it cannot exceed in amount or be different in kind from what is prayed for in the complaint. In sum, while petitioners were allowed to present evidence ex parte under Section 3 of Rule 9, they were not excused from establishing their claims for damages by the required quantum of proof under Section 1 of Rule 133. Stated differently, any advantage they may have gained from the ex parte presentation of evidence does not lower the degree of proof required. Clearly then, there is no incompatibility between the two rules. SJS ‘13 – Comprehensive Reviewer

Page 89

VLASON ENTERPRISES v. CA (310 SCRA 26, 1999)

(1) Where the counsel failed object on the ground of lack of notice to a Motion addressed to a former counsel, and was granted by the trial court 30 days to file his opposition to it, the circumstances clearly justify a departure from the literal application of the notice of hearing rule. (2) The issuance of an order of default is a condition sine qua non in order that a judgment by default be clothed with validity. Furthermore, it is a legal impossibility to declare a party-defendant to be in default before it was validly served summons. FACTS: Seizure proceedings were held over the cargo of Omega’s vessel, M/V Star Ace, while it was docked in the PPA compound at La Union. La Union was hit by 3 typhoons, which damaged the vessel. Because of this, Omega entered into a salvage agreement with Duraproof Services to secure and repair the vessel for $1 million and fifty percent (50%) of the cargo after all expenses, cost and taxes. The District Collector of Customs lifted the warrant of seizure, but the Customs Commissioner declined to issue a clearance; instead, he forfeited the vessel and its cargo. This prompted Duraproof to enforce its preferred salvors lien by filing with the RTC a petition for certiorari, prohibition and mandamus assailing the actions of the Customs Officers, and impleading PPA and Med Line Philippines, Inc. as respondents. Duraproof amended its petition to include the former District Collector, and other companies involved, including Vlason Enterprises. In both Petitions, Duraproof failed to allege anything pertaining to Vlason Enterprises, or any prayer for relief against it. Summonses for the amended Petition were served. Duraproof moved several times to declare the respondents it impleaded in default. Out of those respondents, only the following were declared by RTC in default: the Singkong Trading Co., Commissioner Mison, M/V Star Ace and Omega. Duraproof filed an ex parte Motion to present evidence against the defaulting respondents, which was granted. Duraproof alleged that Vlason Enterprises, through constant intimidation and harassment in utilizing the PPA Management of La Union, caused Duraproof to incur heavy overhead expenses, causing irreparable damages of about P3 Million worth of ship tackles, rigs, and appurtenances including radar antennas and apparatuses, which were taken surreptitiously by persons working for Vlason Enterprises or its agents. The RTC ruled that in favor of Duraproof and ordered Vlason to pay P3 Million worth of damages. Duraproof and the other companies entered into a compromise agreement, except Vlason. Duraproof moved for the execution of judgment. The Motion was granted and a Writ of Execution was issued. Vlason Enterprises filed a Motion for Reconsideration addressed to Duraproof’s counsel, Atty. Concepcion, on the ground that it was allegedly not impleaded as a defendant, served summons or declared in default, and hence Duraproof may not present evidence against it in default. Duraproof opposed the Motion, arguing that it was a mere scrap of paper due to its defective notice of hearing. Despite this Motion, the auction sale was conducted. The trial court ordered the deputy sheriffs to cease and desist from implementing the Writ of Execution and from levying on the personal property of the defendants. The order was unheeded. Duraproof filed with the CA a Petition for Certiorari and Prohibition to nullify the cease and desist orders of the trial court. CA issued a TRO against the RTC order. Vlason received from a notice to pay Duraproof P3 million. Not having any knowledge of the CA case to which it was not impleaded, Vlason filed with the RTC a Motion to Dismiss. The sheriff levied Vlason Enterprises’ properties, so the latter filed a special appearance before the CA, praying for the lifting of the levy on its properties or, alternatively, for a temporary restraining order against their auction until its Motion for Reconsideration was resolved by the trial court. RTC reversed its Decision, finding that there never was issued an order of default against Vlason Enterprises, so there could not have been any valid default-judgment rendered against it. The CA allowed Duraproof to implead Vlason in the CA case. Thereafter, the CA rendered the assailed Decision, stating that the decision of the RTC had become final and executory, never having been disputed or appealed to a higher court, and that the lower court may now take appropriate action on the urgent ex-parte motion for issuance of a writ of execution. The CA clarified that there was no need to serve summons anew on Vlason Enterprises, since it had been served summons when the second amended petition was filed; and that Vlason Enterprisess Motion for Reconsideration was defective and void, because it contained no notice of hearing addressed to the counsel of Duraproof in violation of Rule 16, Section 4 of the Rules of Court. Vlason Enterprises filed (1) a Motion for Clarification, praying for a declaration that the trial court Decision against it was not valid; and (2) a partial Motion for Reconsideration, seeking to set aside the assailed Decision insofar as the latter affected it. The RTC issued a Writ of Possession by virtue of which Duraproof took possession of Vlason’s barge Lawin. Hence, this Petition. ISSUE: Whether the RTC default judgment was binding on Vlason NO. Vlason was never declared in default. The trial court denied Motion of Duraproof to declare all the defendants in default, but it never acted on the latters subsequent Motion to declare Vlason Enterprises likewise.The RTC declared in default SJS ‘13 – Comprehensive Reviewer

Page 90

only Atty. Eddie Tamondong, as well as the other defendants Hon. Salvador Mison, M/V Star Ace, Omega Sea Transport Co., Inc. of Panama and Sinkong Trading Co., but despite due notice to them, they failed to appear. Even Duraproof cannot pinpoint which trial court order held petitioner in default. More important, the trial court admitted that it never declared petitioner in default. There could not have been any valid default-judgment rendered against it. The issuance of an order of default is a condition sine qua non in order that a judgment by default be clothed with validity. Furthermore, it is a legal impossibility to declare a party-defendant to be in default before it was validly served summons. Order of default When some answer and others default Extent of relief to be awarded Where not allowed Procedure after order of default -render judgment -hearing ex parte Remedy from order of default Motion to set aside RAMNANI v. CA (221 SCRA 582, 1993)

A satisfactory showing by the movant of the existence of fraud, accident, mistake or excusable neglect is an indispensable requirement for the setting aside of a judgment of default or order of default. FACTS: The Dizons filed a case for a sum of money against the Ramnanis’ failure to remit the value of jewelry that the latter received from the former on a consignment basis. Josephine Ramnani submitted an answer with counterclaim stating the fact that it was the Dizons who owed them money. Pre-Trial was set but the Ramnanis did not show up hence they were declared in default. The court later received the evidence of the Dizons ex parte due to the Ramnanis status of default. Lower court ruled in favor of the Dizons. Ramnanis stated a meritorious defense as an excuse to set aside their order of default. They stated that the obligation was entered into by Mrs Dizon without Mr. Dizon’s consent ergo void. It was, however, denied. A Petition for Certiorari was filed with the CA imputing error despite their meritorious defense. Denied since the CA ruled that certiorari is a remedy only for errors of jurisdiction, not errors in judgement. ISSUE: Whether the order of default against the petitioners should be set aside NO. Remedies for a party held in default: 1.) Anytime after discovery thereof & before judgement: FAME +meritorious defense 2.) If judgment already rendered upon discovery but before it becomes final and executory: motion for new trial. 3.) After it becomes final and executory: petition for relief under Section 2 of rule 8 4.) Appeal from judgment as contrary to the evidence or to the law. In the case at bar, the petitioner failed to prove that they were unable to attend the pre-trial hearing due to FAME.

Remedies from judgment by default Before finally Motion for reconsideration or new trial Appeal MARTINEZ v. REPUBLIC (2006)

A defendant party declared in default retains the right to appeal from the judgment by default on the ground that the plaintiff failed to prove the material allegations of the complaint, or that the decision is contrary to law, even without need of the prior filing of a motion to set aside the order of default.

SJS ‘13 – Comprehensive Reviewer

Page 91

FACTS: Jose R. Martinez filed a petition for the registration in his name of three (3) parcels of land he allegedly purchased from his uncle. He claimed continuous possession of the lots; that the lots had remained unencumbered; and that they became private property through prescription pursuant to Section 48(b) of CA No. 141. The OSG was furnished a copy of the petition. The trial court set the case for hearing and directed the publication of the corresponding Notice of Hearing in the Official Gazette. The OSG, in behalf of the Republic of the Philippines, opposed the petition. Despite the opposition filed by the OSG, the RTC issued an order of general default, even against the Republic of the Philippines. This ensued when during the hearing of even date, no party appeared before the Court to oppose Martinez’s petition. RTC received Martinez’s oral and documentary evidence and concluded that Martinez and his predecessors-in-interest had been for over 100 years in possession characterized as continuous, open, public, and in the concept of an owner. The RTC thus decreed the registration of the three (3) lots in the name of Martinez. From this Decision, the OSG filed a Notice of Appeal, which was approved by the RTC. However, after the records had been transmitted to the CA, the RTC received a letter from the LRA stating that only two of the lots sought to be registered were referred to in the Notice of Hearing published in the Official Gazette, and that the third lot was omitted due to the lack of an approved survey plan for that property. LRA manifested that this lot should not have been adjudicated to Martinez for lack of jurisdiction. This letter was referred by the RTC to the Court of Appeals for appropriate action. The CA reversed the RTC and ordered the dismissal of the petition for registration. It found the evidence presented by Martinez as insufficient to support the registration of the subject lots. Martinez directly assailed the CA decision before the SC, claiming that the OSG no longer had personality to oppose the petition, or appeal its allowance by the RTC, following the order of general default. ISSUE: Whether an order of general default bars the Republic from interposing an appeal from the trial court’s subsequent decision NO. We hold that a defendant party declared in default retains the right to appeal from the judgment by default on the ground that the plaintiff failed to prove the material allegations of the complaint, or that the decision is contrary to law, even without need of the prior filing of a motion to set aside the order of default. By 1997, the doctrinal rule concerning the remedies of a party declared in default had evolved into a fairly comprehensive restatement as offered in Lina v. Court of Appeals: a) The defendant in default may, at any time after discovery thereof and before judgment, file a motion, under oath, to set aside the order of default on the ground that his failure to answer was due to fraud, accident, mistake or excusable neglect, and that he has meritorious defenses; (Sec 3, Rule 18) b) If the judgment has already been rendered when the defendant discovered the default, but before the same has become final and executory, he may file a motion for new trial under Section 1(a) of Rule 37; c) If the defendant discovered the default after the judgment has become final and executory, he may file a petition for relief under Section 2 of Rule 38; and d) He may also appeal from the judgment rendered against him as contrary to the evidence or to the law, even if no petition to set aside the order of default has been presented by him. (Sec. 2, Rule 41) The fourth remedy, that of appeal, is anchored on Section 2, Rule 41 of the 1964 Rules. Yet even after that provision’s deletion under the 1997 Rules, the Court did not hesitate to expressly rely again on the Lina doctrine, including the pronouncement that a defaulted defendant may appeal from the judgment rendered against him. Yet even if it were to assume the doubtful proposition that this contested right of appeal finds no anchor in the 1997 Rules, the doctrine still exists, applying the principle of stare decisis. Jurisprudence applying the 1997 Rules has continued to acknowledge the Lina doctrine which embodies this right to appeal as among the remedies of a defendant, and no argument in this petition persuades the Court to rule otherwise. NOTE: The RTC appears to have issued the order of general default simply on the premise that no oppositor appeared before it on the hearing. But it cannot be denied that the OSG had already duly filed its Opposition to Martinez’s petition long before the said hearing. It was improper to declare the oppositor in default simply because he failed to appear on the day set for the initial healing. Strangely, the OSG did not challenge the propriety of the default order. It would thus be improper for the Court to make a pronouncement on the validity of the default order since the same has not been put into issue.

After finality Petition for relief from judgment Annulment of judgment Is certiorari a proper remedy? JAO v. CA (251 SCRA 391, 1995)

The proper remedy of a party wrongly declared in default is either to appeal from the judgment by default or to file a petition for relief from judgment, and not certiorari. FACTS: Due to the non-appearance of the petitioner Jao & Company, Inc., during the hearing on the merits, the Regional Trial Court of Manila, Branch 51 — upon motion of herein private respondent Top Service, Inc. — issued an order dated April 14, 1989 declaring said petitioner in default and allowed evidence to be presented ex-parte. The petitioner however filed an answer. On May 26, 1989, the trial court rendered a decision ordering Jao to pay Top Service the agreed rentals with 12% interest. A writ of preliminary injunction was issued by the RTC. By virtue of such decision, Top Service stated that Jao’s counsel had withdrawn his SJS ‘13 – Comprehensive Reviewer

Page 92

appearance in the trial court and left no forwarding address. No notice of the said order of default and the decision could be given it. The former contends that the latter’s remedy was timely appeal, which the latter failed to perfect. ISSUE: Whether the decision of the trial court, promulgated on May 26, 1989, became final YES. Under ordinary circumstances, the proper remedy of a party wrongly declared in default is either to appeal from the judgment by default or to file a petition for relief from judgment, and not certiorari. A default judgment is an adjudication on the merits and is, thus, appealable. Since appeal is the proper remedy, the extraordinary writ of certiorari will not lie. Petitioner contends that it could not be bound by the questioned Order of April 14, 1989 declaring it in default and the subsequent Decision of May 20, 1989 because it did not receive copies thereof. Respondents counter that such non-service was due to petitioner's fault in not furnishing the trial court with its "forwarding address" after its counsel withdrew his appearance. This Court is not in a position to settle this issue of fact — as indeed the Supreme Court does not decide such questions. But it is not disputed that after receipt of the decision, petitioner filed a motion for reconsideration. Thus, whatever defects — if indeed there was any — may have been committed by the trial court in failing to give constructive notice of its erroneous default order was cured by petitioner's voluntary filing of the said motion for reconsideration. Upon denial thereof, petitioner should have appealed. But instead of doing that, it opted for the wrong remedy of certior

INDIANA AEROSPACE UNIVERSITY v. CHED (356 SCRA 367, 2001)

The remedies available to a defendant VALIDLY declared in default are as follows: (1) a motion to set aside the order of default under Section 3(b), Rule 9 of the Rules of Court, if the default was discovered before judgment could be rendered; (2) a motion for new trial under Section 1(a) of Rule 37, if the default was discovered after judgment but while appeal is still available; (3) a petition for relief under Rule 38, if judgment has become final and executory; and (4) an appeal from the judgment under Section 1, Rule 41, even if no petition to set aside the order of default has been resorted to. FACTS: In 1996, the Chairman of the Technical Panel for Engineering, Architecture, and Maritime Education (TPRAM) of CHED, received a letter from Douglas Macias –Chairman of the Board of Aeronautical Engineering, PRC inquiring whether petitioner Indiana Aerospace University had already acquired university status in view of their representation in the advertisement in the Manila Bulletin. After investigation, it was found that there was a violation committed by the IAU when it used the term “university” when it had not yet complied with the basic requirement of being a university as prescribed in CHED Memoradum. Respondent CHED inquired from the SEC as to the status of the registered name of petitioner and it was affirmed that IAU (registered as Indiana School of Aeronautics, Inc.) had not amended its Articles of Incorporation to change its name to a “university.” CHED ordered IAU to desist from using the word “university.” IAU through its chairman and founder appealed to the Order of CHED averring that the school will encounter difficulties and suffer damages if it will not be allowed to use the word “university” in its school name. Prior to the court decision granting the Cease and Desist Order filed by CHED, petitioner IAU filed Complaint for Damages before the Court. Respondent CHED then filed a Special Appearance with Motion to Dismiss the Complaint for damages. Petitioner IAU filed Opposition to the Motion to Dismiss. The TC Judge denied respondent CHED’s motion to dismiss and issued a writ of preliminary injunction in favor of IAU. The TC Judge also directed CHED to file its Answer to the decision within 15 days from the receipt of the Court Order – which was August 15, 1998. On September 22, 1998, petitioner IAU filed Motion to Declare Respondent in Default pursuant to Section 9, Section 3 of RROC. On the same day, respondent CHED filed for Motion for Extension of Time to File its Answer until November 18, 1998, but CHED submitted its Answer however on November 17, 1998. On November 11, petitioner IAU filed its Opposition to the Motion for Extension of Time to File respondent’s Answer. Trial Judge rendered its Decision and granted petitioner’s motion to declare respondent CHED in Default. Respondent CHED consequently filed with the CA a petition for certiorari arguing that the RTC had committed grave abuse of discretion in declaring respondent CHED in default despite its Filing of an Answer. The CA ruled that respondent CHED should NOT have been declared in default, because its answer had been filed long before the RTC ruled upon petitioner’s Motion to declare respondent in default. Thus, respondent had not obstinately refused to file an Answer; on the contrary, its failure to do so on time was due to excusable negligence. (an express exception to being declared in default under Rule 9, SecTion 3). Thus, IAU instituted case at bar to appeal the CA decision. ISSUE: Whether respondent CHED should be declared in default despite its filing of an answer, and whether its failure to file answer on time be excused on ground that it was due to excusable negligence SJS ‘13 – Comprehensive Reviewer

Page 93

NO. The SC agreed with respondent CHED that certiorari was the only plain, speedy and adequate remedy in the ordinary course of law, because the default Order had improvidently been issued. The remedies available to a defendant declared in default are as follows: (1) a motion to set aside the order of default under Section 3(b), Rule 9 of the Rules of Court, if the default was discovered before judgment could be rendered; (2) a motion for new trial under Section 1(a) of Rule 37, if the default was discovered after judgment but while appeal is still available; (3) a petition for relief under Rule 38, if judgment has become final and executory; and (4) an appeal from the judgment under Section 1, Rule 41, even if no petition to set aside the order of default has been resorted to. These remedies, however, are available only to a defendant who has been validly declared in default. Such defendant irreparably loses the right to participate in the trial. On the other hand, a defendant improvidently declared in default may retain and exercise such right after the order of default and the subsequent judgment by default are annulled, and the case remanded to the court of origin. The former is limited to the remedy set forth in section 2, paragraph 3 of Rule 41 of the pre 1997 Rules of Court, and can therefore contest only the judgment by default on the designated ground that it is contrary to evidence or law. The latter, however, has the following options: to resort to this same remedy; to interpose a petition for certiorari seeking the nullification of the order of default, even before the promulgation of a judgment by default; or in the event that judgment has been rendered, to have such order and judgment declared void. In prohibiting appeals from interlocutory orders, the law does not intend to accord executory force to such writs, particularly when the effect would be to cause irreparable damage. If in the course of trial, a judge proceeds without or in excess of jurisdiction, this rule prohibiting an appeal does not leave the aggrieved party without any remedy. In a case like this, a special civil action of certiorari is the plain, speedy and adequate remedy. (as such as what CHED had done). Herein respondent CHED controverts the judgment by default, not on the ground that it is unsubstantiated by evidence or that it is contrary to law, but on the ground that it is intrinsically void for having been rendered pursuant to a patently invalid order of default.

SJS ‘13 – Comprehensive Reviewer

Page 94