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BACOLOD-MURCIA MILLING CO., INC. V. FIRST FARMERS MILLING CO., INC.

, 103 SCRA 436 (1981) Facts: Plaintiff-appellant Bacolod-Murcia filed for Injunction and Prohibition with Damages against defendants First Farmers Milling Co., Inc. (FFMC), and others including Administrator Ramon Nolan of the Sugar Quota Administration. Plaintiff alleged that in 1964, the defendant FFMC established and operated a sugar central known as the First Farmers Sugar Central. For the crop years 1964-1966, the other defendants transferred their quota "A" allotments and are actually milling their sugar with the said FFMC. Plaintiff protested the transfer. PNB and National Investment and Development Corporation (NIDC) were included as party defendants since they were creditors of FFMC prior to the instant case, since both loaned to the sugar mill about P16M to in the illegal creation and operation of the mill. This was aggravated by the fact that defendant mill has only a paid up capital stock of P500K, said loans are far beyond the limits fixed by law. Issue: W/N the allegations of the Amended and Supplemental Complaint constituted a sufficient cause of action against the PNB and NIDC. Held: NO, there is no cause of action. The complaint must contain a concise statement of the ultimate facts constituting the plaintiff's cause of action. The test for sufficiency of the facts alleged is whether or not the Court could render a valid judgment as prayed for accepting as true the exclusive facts set forth in the Complaint. The subject complaint does not pass the test. It should be noted that it charges PNB and NIDC with having assisted in the illegal creation and operation of defendant sugar mill. Granting, for the sake of argument, that, indeed, assistance in the "illegal" act was rendered, the same, however, is not supported by well-pleaded averments of facts. Nowhere is it alleged that defendantsappellees had notice, information or knowledge of any flaw, much less any illegality, in their co-defendants' actuations, assuming that there was such a flaw or illegality. This absence is fatal and buoy-up instead the PNB-NIDC's position of lack of cause of action. TANTUICO V. REPUBLIC Facts: PCGG filed for for reconveyance, reversion, accounting, restitution and damages against the Marcos spouses, Kokoy Romualdez, and plaintiff Francisco Tantuico Jr. It is alleged that plaintiff abused his position as COA Chairman and connived and aided the other defendants in illegal disbursements of funds. Plaintiff requested for a bill of particulars to enable him to understand and know with certainty the particular acts allegedly committed by him and which he is now charged with culpability, it is necessary that plaintiff furnish him the particulars sought therein

relative to the averments in paragraphs 2, 9(a), 15, 7 and 17 of the Second Amended Complaint so that he can intelligently prepare his responsive pleading and prepare for trial. However this was denied. Petitioner argues that the allegations of the Second Amended Complaint in Civil Case No. 0035 (PCGG 35) pertaining to him state only conclusions of fact and law, inferences of facts from facts not pleaded and mere presumptions, not ultimate facts as required by the Rules of Court. Issue: W/N the ultimate facts were properly pleaded. Held: NO. The term "ultimate facts" as used in Sec. 3, Rule 3 of the Rules of Court, means the essential facts constituting the plaintiffs cause of action. A fact is essential if it cannot be stricken out without leaving the statement of the cause of action insufficient. . . . (Moran, Rules of Court, Vol. 1, 1963 ed., p. 213). Ultimate facts are important and substantial facts which either directly form the basis of the primary right and duty, or which directly make up the wrongful acts or omissions of the defendant. The term does not refer to the details of probative matter or particulars of evidence by which these material elements are to be established. It refers to principal, determinate, constitutive facts, upon the existence of which, the entire cause of action rests. while the term "evidentiary fact" has been defined in the following tenor: Those facts which are necessary for determination of the ultimate facts; they are the premises upon which conclusions of ultimate facts are based. Womack v. Industrial Comm., 168 Colo. 364,451 P. 2d 761, 764. Facts which furnish evidence of existence of some other fact. 22 Where the complaint states ultimate facts that constitute the three (3) essential elements of a cause of action, namely: (1) the legal right of the plaintiff, (2) the correlative obligation of the defendant, and (3) the act or omission of the defendant in violation of said legal right, the complaint states a cause of action, otherwise, the complaint must succumb to a motion to dismiss on that ground of failure to state a cause of action. In this case, nothing is said in the complaint about the petitioner's acts in execution of the alleged "systematic plan to accumulate ill-gotten wealth", or which are supposed to constitute "flagrant breach of public trust", "gross and scandalous abuse of right and power", and "violations of the Constitution and laws of the Philippines". The complaint does not even allege what duties the petitioner failed to perform, or the particular rights he abused. They are all mere conclusions of law. The allegations in the complaint, above-referred to, pertaining to petitioner are, therefore, deficient in that they merely articulate conclusions of law and presumptions unsupported by factual premises. Hence, without the particulars prayed for in petitioner's motion for a bill of particulars, it can be said the petitioner can not intelligently prepare his responsive pleading and for trial.

METROBANK V. QUILTS Facts: The Board of Directors of Quilts authorized Mr. Senen B. Dizon (Dizon) to mortgage in favor of Metrobank, an property belonging to Quilts. Thus, Metrobank restructured Dizon's existing personal loan in the amount of P700,000.00 secured by his house and lot at Angeles City and the property owned by Quilts. Metrobank received a letter from Atty. Cesar Villanueva, Quilt's counsel offering the amount of P200,000.00 for the cancellation of the mortgage on the property owned by Quilts because, allegedly, "Mr. & Mrs. Senen Dizon had left the Philippines, leaving several creditors." Metrobank refused. Atty. Ranel L. Trinidad, Quilt's new counsel wrote Metrobank reiterating the mortgage cancellation. In addition, counsel claimed that the alleged April 7, 1987 special meeting could not have taken place for lack of the requisite number of directors present to constitute a quorum since the Chairman and 2 other members of the Board of Directors were aboard on that date. Quilts filed a complaint against Metrobank, Dizon and de los Santos for annulment and cancellation of mortgage. Metrobank moved to dismiss the complaint based on 1) lack of jurisdiction and 2) failure to state a cause of action. Judge Reynaldo B. Daway, granted the motion. However, on August 4, 1989, upon Quilt's motion, Judge Daway issued an Order reconsidering and setting aside the dismissal order because the grounds relied upon by Metrobank "did not appear to be indubitable", and deferred the determination of the motion until the trial. Issue: W/N Quilt's complaint sufficiently states a cause of action against Metrobank. Held: NO. An examination of the complaint shows that the allegations therein pertain mostly to the alleged ultra vires acts of Dizon and de los Santos. Paragraph 10 of the complaint, upon which both the trial court and the Court of Appeals premised a case against Metrobank, merely expresses legal conclusions, and is not an averment or allegation of ultimate facts. We agree with Metrobank that the complaint does not contain allegations that Metrobank had prior knowledge of, or could have known with the exercise of due diligence, that the recitals in the Secretary's Certificate were false. The complaint does not even allege specific overt acts which show that Metrobank acted in conspiracy with its co-defendants to defraud Quilts. FAR EAST MARBLE V. CA, 225 SCRA 249 (1993) Facts: Far East received several loans evidenced by promissory notes amounting to about Php 4M, and credit facilities in the form of trust receipts of about P2M from BPI. Far

East refused to pay. Defendant Tabuenas were guarantors and likewise refused to pay despite demands. Thus BPI sought a forclosure for the mortgaged properties. Far East admitted the genuineness of the promissory notes but claimed the defense of prescription and lack of cause of action as it denied that BPI had made prior demands for payment. More than 10 years have elapsed since the dates of maturity of said obligations up to the time the action for foreclosure of the chattel mortgage was filed and it had not received any demand for payment. BPI says that it had sent extrajudicial demands within the 10 year prescriptive period, and in fact presented several written documents whereby Far East acknowledged its debt. Withal, BPI maintained, the 10-year prescriptive period to enforce its written contract had not only been interrupted, but was renewed. Issue: W/N there is a cause of action. Held: YES. A cause of action consists of 3 elements, all of which BPI clearly possesses. Prescription is not a cause of action, but a defense. The TC concluded 2 things: 1) BPIs claim can no longer prosper due to prescription. 2) BPIs allegation of it making repeated requests and demand for payment is vague and incomplete, thus not enough to state a cause of action. This Court believes and holds otherwise. Sec 3 of Rule 6 state that a "complaint is a concise statement of the ultimate facts constituting the plaintiff's cause or causes of action." Further Sec 1 of Rule 8 declares that every pleading, including, a complaint, "shall contain in a methodical and logical form, a plain, concise and direct statement of the ultimate facts omitting the statement of mere evidentiary facts." In the case at bar, the circumstances of BPI extending loans and credits to Far East and the failure of the latter to pay and discharge the same upon maturity are the only ultimate facts which have to be pleaded, although the facts necessary to make the mortgage valid enforceable must be proven during the trial. Clearly then, the general allegation of BPI that "despite repeated requests and demands for payment, Far East has failed to pay" is sufficient to establish BPI's cause of action. Besides,prescription is not a cause of action; it is a defense which, having been raised, be supported by competent evidence. FILIPINAS TEXTILE V. CA, 415 SCRA 635 (2003) Doctrine: Where the answer does not contain any specific denial under oath of the actionable documents upon which the complaint is based, this gives rise to the implied admission of the genuineness and due execution of said documents. As a result, said documents are admissible in evidence despite absence of any formalities required by law.

Facts: Filipinas Textile (Filtex) applied for domestic letters of credit, to finance its buying of raw materials for its textile business, with State Investment House, Inc. (SIHI). SIHI issued the letters of credit of about P3M. Filtex used this to buy from (Indo-Phil, Texfiber and Polyamide). Upon the sale and delivery of the materials, the 3 companies issued sight drafts covering the purchases payable to SIHI. The sight drafts were duly accepted by Filtex. As a security, Filtex issued to SIHI several trust receipts covering goods sold. Also, Villanueva, the other petitioner, executed a surety agreement guaranteeing payment of Filtexs debt to SIHI. Filtex failed to pay its debt despite demand thus, SIHI filed a complaint for the collection of a sum of money against Filtex and Villanueva. Filtex filed an answer but did not specifically deny under oath the genuineness of the actionable documents (LCs, sight drafts, trust receipts, surety agreement). Issue: W/N the documents are admissible in evidence despite the non-payment of DST [Note: The NIRC provides that a document which is required by law to be stamped cannot be admitted in evidence until the requisite stamp has been affixed to it.] Held: Yes. The answer of Filtex did not contain any specific denial under oath of the documents upon which SIHIs complaint was based. This gave rise to the implied admission of the genuineness and due execution of said documents. MALAYAN V. REGIS Facts: When the cargo arrived at the Ninoy Aquino International Airport, it was discharged without exception and forwarded to Peoples Aircargo & Warehousing Corp.s (Paircargos) warehouse for temporary storage pending release by the Bureau of Customs. Paircargo remained in possession of the cargo until 7 March 1995, at which point respondent Regis Brokerage Corp. (Regis) withdrew the cargo and delivered the same to ABB Koppel at its warehouse.6 When the shipment arrived at ABB Koppels warehouse, it was discovered that only 65 of the 120 pieces of motors were actually delivered and that the remaining 55 motors, valued at US$2,374.35, could not be accounted for. The shipment was purportedly insured with Malayan by ABB Koppel. Demand was first made upon Regis and Paircargo for payment of the value of the missing motors, but both refused to pay.8 Thus, Malayan paid ABB Koppel the amount of P156,549.55 apparently pursuant to its insurance agreement, and Malayan was on that basis subrogated to the rights of ABB Koppel against Regis and Paircargo. Malayan contends that the Marine Risk Note is "an open policy per Marine Open Cargo Policy No. OPEN POLICY-0001-00410 issued Issue: W/N Malayans cause of action could stand in court.

Held: NO. Malayan correctly points out that the Marine Risk Note itself adverts to "Marine Cargo Policy Number Open Policy-0001-00410" as well as to "the standard Marine Cargo Policy and the Companys Marine Open Policy." What the Marine Risk Note bears, as a matter of evidence, is that it is not apparently the contract of insurance by itself, but merely a complementary or supplementary document to the contract of insurance that may have existed as between Malayan and ABB Koppel. And while this observation may deviate from the tenor of the assailed Court of Appeals Decision, it does not presage any ruling in favor of petitioner. Fundamentally, since Malayan failed to introduce in evidence the Marine Insurance Policy itself as the main insurance contract, or even advert to said document in the complaint, ultimately then it failed to establish its cause of action for restitution as a subrogee of ABB Koppel. Malayans right of recovery as a subrogee of ABB Koppel cannot be predicated alone on the liability of the respondent to ABB Koppel, even though such liability will necessarily have to be established at the trial for Malayan to recover. Because Malayans right to recovery derives from contractual subrogation as an incident to an insurance relationship, and not from any proximate injury to it inflicted by the respondents, it is critical that Malayan establish the legal basis of such right to subrogation by presenting the contract constitutive of the insurance relationship between it and ABB Koppel. Without such legal basis, its cause of action cannot survive. Our procedural rules make plain how easily Malayan could have adduced the Marine Insurance Policy. Ideally, this should have been accomplished from the moment it filed the complaint. Since the Marine Insurance Policy was constitutive of the insurerinsured relationship from which Malayan draws its right to subrogation, such document should have been attached to the complaint itself, as provided for in Section 7, Rule 9 of the 1997 Rules of Civil Procedure It was incumbent on Malayan, whose right of subrogation derived from the Marine Insurance Policy, to set forth the substance of such contract in its complaint and to attach an original or a copy of such contract in the complaint as an exhibit. Its failure to do so harbingers a more terminal defect than merely excluding the Marine Insurance Policy as relevant evidence, as the failure actually casts an irremissible cloud on the substance of Malayans very cause of action. Since Malayan alluded to an actionable document, the contract of insurance between it and ABB Koppel, as integral to its cause of action against Regis and Paircargo, the contract of insurance should have been attached to the complaint. KERAMIK INDUSTRIES, INC. V. GUERRERO, 61 SCRA 265 (1974) Facts: Keramik obtained a loan of P2.4M from GSIS. It mortgaged lands, buildings, machineries and equipment in favor of GSIS as a security. Keramik thus, the properties were extrajudicially foreclosed. In the public auction, GSIS was the highest bidder, with a bid of P5.1M.

Keramik sued GSIS asking either for the nullification of the extrajudicial foreclosure or for GSIS to pay it the difference between the GSIS bid and the actual mortgage debt, which is worth P1.6M. Subsequently, Keramik filed a motion for the admission of an amended complaint, which referred to an insurance sum which was an additional security for the loan. Keramik was saying that the proceeds of the insurance and the excess from the auction should be deducted from its debt. GSIS opposed the admission of the amended complaint saying that the amendment altered Keramiks cause of action. Issue: W/N the lower court erred in not allowing the admission of the amended complaint Held: Yes. The lower court should have allowed the admission of the amended complaint because it did not change the cause of action. Keramiks theory is that the mortgaged properties and the insurance proceeds are more than enough to cover the debt it owes to GSIS. Therefore, GSIS should refund to Keramik the excess of these amounts worth P1.6M.The amendment of the complaint referring to the insurance proceeds did not change Keramiks theory of the case and did not introduce a new cause of action. ASSET PRIVATIZATION TRUST V. CA, 324 SCRA 533 (2000) Facts: Galleon Shipping Corp. obtained several foreign loan guarantee accommodations from DBP for the purchase of 5 new vessels and 2 second-hand vessels. Galleon mortgaged the vessels to DBP. Private respondents Sta. Ines Melale Forest Products Corp. (SIM), Cuenca and Tinio were named as joint and solidary debtors with Galleon in this transaction. Galleon defaulted so DBP had to pay Galleons foreign creditors. DBP then foreclosed the mortgage but the proceeds of the auction sale were not enough to cover the debt of Galleon to DBP. At the same time, NDC was instructed by the President under a Letter of Instruction to take over the ownership and operation of Galleon. Cuenca, representing Galleon, and NDC entered into a MOA. However, NDC took over the ownership of Galleon without paying anything and mismanaged its operations. In anticipation of DBPs claim for the deficiency, SIM, Cuenca and Tinio filed a complaint against DBP, NDC and Galleon praying for the issuance of a TRO for DBP to cease from pursuing any action for deficiency until the rights of the parties shall have been declared. It is alleged that it was during NDCs mismanagement that Galleon obtained the debt with DBP. The trial court issued the TRO. Subsequently, SIM, Cuenca and Tinio were granted foreign loan guarantee accommodations by DBP. This was secured by a mortgage over SIMs property in Agusan del Sur. The mortgage contract authorized DBP to take actual possession of the property upon breach. SIM, et. al. were not able to pay DBP on time so DBP took possession of the mortgaged plant and posted 45 security

guards there. SIM (only) filed a motion to admit supplemental complaint, seeking to supplement the original complaint in the previous case. The supplemental complaint prayed for the declaration that DBP is not entitled to foreclose the mortgage. Issue: W/N the supplemental complaint should be admitted. Held: No, it should not be admitted. Sec. 6, Rule 10 of the Rules of Court provides that upon motion of a party, the court may permit him to serve a supplemental pleading setting forth transactions or events which have happened since the date of the pleading sought to be supplemented. A supplemental pleading is meant to supply deficiencies in aid of the original pleading. It DOES NOT OPERTE TO DISPENSE WITH, NOR SUBSTITUTE THE ORIGINAL PLEADING. It does not supersede the original pleading: it assumes that still stands. The issues joined from the original pleading remain as issues to be tried to the action Jurisprudence provides that when the cause of action stated in the supplemental complaint is different from the cause of action found in the original complaint, the supplemental complaint should not be admitted. Based on the facts on the original and supplemental complaint, the court held that the original complaint was based on a cause of action entirely different from that in the supplemental complaint, which arose out of a different set of facts. In the original complaint, SIM et al., sought to prevent DBP from claiming the deficiency resulting from the foreclosure of the mortgages of the vessels; In the supplemental complaint SIM sought to pre-empt the foreclosure of the mortgaged plant in Agusan del Sur. It is telling as well that SIM was the only plaintiff named in this supplemental complaint. If the original pleading should stand, then the other plaintiffs, Cuenca and Tinio should also have been impleaded. This only proves that the latter two plaintiffs have no cause of action against DBP as it is based on entirely different subject matter The 2 complaints have different causes of action and seeks/prays for different things. Note: It was really DBP who was the original petitioner, not APT. APT became involved as a respondent because SIM has been taken over by APT. CAGUNGUN V. PLANTERS DEVELOPMENT BANK, 473 SCRA 259 (2005) Facts: The spouses Vicente and Lapreciosisima Cagungun filed a suit with the RTC of Olongapo City against, then, Country Development Bank (after a merger, known as Planters Development Bank). Vicente Cagungun has since died and was substituted by their children as plaintiff. Country opened an extension office in Olongapo City and the Cagungun spouses opened some accounts with them, 2 of which, they were issued Savings Passbooks, in the name of Purings Dry Goods and Savings and V/L Cagungun. Cagungun spouses claimed that because of the nature of their businesses, requiring daily deposits and their trust to Country, they entrusted and left them with said saving passbooks, with the arrangement that Branch manager, Ruperto Reyes, or a certain Bong and

Ding would collect their funds, round it off and deposit to their account. The remainder of which would then be applied to their mortgage loan balance. The arrangement went well until March 1981, when they received a notice that their loan was past due. Hence, they investigated, finding out that on the dates of October 8, 18, 20 and 31 and November 15, and December 4 and 8, with the use of withdrawal slips, a total of P220,000.00 was withdrawn from their Savings. These withdrawals were invalid for no such withdrawal was authorized, made or received by the depositors, and the signatures of Vicente on the slips were forgeries, as confirmed by the NBI Chief of Questioned Documents Division. Planters did not cooperate with the investigation made by the Cagungun spouses. Furthermore, they explained that the October 8 withdrawal of P20,000.00 and the other withdrawals of a total of P30,000.00, were placed on time deposits by Vicente in 5 accounts held with their children. And the other withdrawals were also made by Vicente in exchange for Managers Checks made in the names of payees Santiago Lee, Rosita Saldana, Benito Yap and Joaquin Aganda. The lower court ruled in favor of the Cagungun spouses, and that the withdrawals were falsified and that their mortgage load is already paid in the amount of P58,297.16. Thus, Planters was held liable to pay actual, moral (for the threat of foreclosure felt by the spouses because of the non-payment to the loan balance) and exemplary damages (for attempting to cover up the misdeeds of its employees), attorneys fees and the cost of suit. Furthermore, it was enjoined to foreclose on the REM. Planters then appealed to CA. CA affirmed the lower courts decision as to the withdrawals but held that the petitioners are not free from their obligation to pay the mortgage loan since the remainder of the sums deposited were not actually applied to the loan and it was held to be an unpaid obligation. Awards for moral and exemplary damages were removed and awards for attorneys fees and litigation expenses were reduced. Cagungun spouses filed for an MR and was denied. Hence, the Petition for Review on Certiorari, assailing the decision of CA. Issue: Whether or not the CA erred in its decision. Held: YES, CA erred in its decision. 1) On the moral damages and exemplary damages The Cagungun spouses are granted moral damages for the reason that Planters was grossly negligent when it allowed the P220,000.00 to be withdrawn and its failure to comply with the instructions. As a settled rule, the gross negligence of the bank in handling the deposit of its clients amounts to bad faith and calls for an award of moral damages. Moral damages are meant to compensate the claimant for any physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar injuries unjustly caused. As a bank, it should have exercised diligence higher than that of a good father of the family. Furthermore, for the non-cooperation of Planters with the investigation initially made by the

Cagungun spouses, attempting to cover up the misdeeds of its employees, exemplary damages are also to be awarded. 2) On the mortgage loan obligation The Cagungun spouses insist that they were able to prove that the amounts of P30,000.00 and P118,000.00 were respectively withdrawn from their accounts and that same were not applied as payment for their loan. They maintain that by adding together said amounts, the sum thereof is sufficient to pay their loan and to consider the real estate mortgage as discharged. However, Cagungun spouses never alleged this in their filed complaint; neither did they pray that the amounts be returned to them, or used to off-set the indebtedness. Moreover, in proving this allegation, Planters' counsel objected and attempted to have the testimony stricken off the record on the ground of allegata et probate. Under Section 5, Rule 10 of the Revised Rules of Court, 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 freely, when the presentation of the merits of the action will be subserved thereby and the admission of such evidence would not prejudice the objecting party in maintaining his action or defense upon the merit. Therefore it is clear that when there is an objection on the evidence presented since it is not within the issues set forth in the pleading, an amendment must first be made before such evidence is accepted. If no amendment is made, the evidence objected to cannot be considered. ALARILLA V. OCAMPO, 417 SCRA 601 (2003) Facts: Spouses Isidro de Guzman and Andrea Enriquez were the owners of a registered parcel of land, located in Pedro Gil, Paco, Manila. They thereafter constructed a house thereon. The wife, Andrea, died and was survived by Isidro and their daughter Rosario de Guzman, who was married to Rodolfo Alarilla, Sr. They then executed a REM over the property in favor of Spouses Reynaldo Ocampo and Josephine Llave as security for the payment of their loan. Thereafter, Isidro died and was survived by Rosario and her children with Alarilla, Sr. When the spouses Alarilla Sr. failed to pay the loan despite demands, the Spouses Ocampo filed a petition for the extrajudicial foreclosure of the REM with the Clerk of Court of the RTC of Manila, who was also the Ex-Officio City Sheriff. The property was sold at public auction with the Spouses Ocampo as the highest bidder for P515,430.76. A certificate of sale was issued and registered with the City Register of Deeds. And upon the failure to redeem the property, the Spouses Ocampo executed an affidavit of consolidation of title and TCT was issued under their name. Spouses Alarilla Sr. and the other petitioners, their children filed a complaint against Spouses Ocampo and the Ex-Officio Sheriff with the RTC of Manila. (Allegations in the complaint: 1) the property sold constituted a family home, 2) Isidro failed to liquidate the family home after the death of his wife, which renders the REM executed over the property null and void, 3) Alarilla spouses offered to redeem the property before the lapse of the one-year redemption period, but the Ocampo spouses refused to accept the same, 4) the sheriff sold the property for an amount in excess of

P401,162.96, hence the sale is null and void and 5) Alarilla et al offered to redeem the property for the correct amount due but Ocampo spouses refused to accept hence, the period for redemption had not yet expired.) On November 27, 1995, Reynaldo Ocampo filed a petition for a writ of possession with the RTC of Manila. And there was no opposition to the said petition. The court then issued an order granting the petition and a writ of possession. On the other hand, Alarilla Sr. filed a motion to set aside the order and to dismiss the petition for a writ of possession. The court denied the motion. The petition was appealed to the CA and was denied. Alarilla et al, received a copy of the CA decision on March 3, 2000. On March 20, 2000, they filed an MR. MR was denied, and so they filed a petition for review of the CA decision. (In their petition, Alarilla et al asserted that the REM is null and void for failure to secure the conformity of the beneficiaries of the family home and that they cannot be ousted from the property without the Ocampo spouses filing an ordinary action for the recovery of possession.) CA held that after the expiration of the redemption period and redemption was not made, the writ must issue in order to place the buyer in possession of the foreclosed property such right is absolute and may be obtained through a writ. In this case, the property was not redeemed within the period and the Ocampo spouses had already consolidated ownership over the property. Hence, the petition for review on certiorari the decision of CA, affirming the issue of a writ of possession and denying the motion of Alarilla Sr. Issues: 1) Whether or not Alarilla et als MR of the CA decision was filed out of time. 2) Whether or not the petition should be granted. Held: Held 1) NO. The MR was filed within the reglementary period therefor. Section 1, Rule 22 of the Rules of Court, as amended, provides that where the last day of the period for doing an act as provided by law falls on a Saturday, a Sunday or a legal holiday in the place where the court sits, the time should not run until the next working day. In this case, Alarilla et al had until March 18, 2000 within which to file their MR of the decision of the CA. Since March 18, 2000 was a Saturday, they had until March 20, 2000, the next working day thereafter, to file their motion. They filed their motion on the said date; hence, the motion was filed within the reglementary period therefor. 2) NO. The petition stands to fail on the merits. The one-year period for Alarilla et al to redeem the mortgaged property had already lapsed. A TCT was already issued under the name of Ocampo and as owner, they are entitled to possession as a matter of right. There is no need for Ocampo to file an action to evict Alarilla et al.

Also, any question regarding the validity of the mortgage or its foreclosure cannot be a legal ground for refusing the issuance of a writ of possession. Regardless of whether or not there is a pending action for the nullification of the sale at the public auction, or the foreclosure itself, or even for the nullification of the REM executed over the property, Ocampo, as purchaser at the public auction, is entitled to a writ of possession without prejudice to the outcome of the action filed by Alarilla et al with the RTC of Manila. The writ of possession issued by the trial court must be enforced without delay. It cannot be stymied or thwarted by Alarilla et al by raising issues already raised by them in the civil case. Lastly, Alarilla et al did not oppose the petition for a writ of possession filed by Ocampo in the court a quo. Instead, they filed the complaint for the nullification of the foreclosure proceedings, the sale at public auction and the nullification of the TCT in the name of the Ocampo, with a plea for injunctive relief. SOLAR TEAM ENTERTAINMENT INC. V. RICAFORT, 293 SCRA 661 (1998) Facts: Solar Team Entertainment, as plaintiff, filed before the Paranaque RTC a complaint for recovery of possession and damages with prayer for a writ of replevin against private respondents, Team Image Entertainment, Inc., Felix Co, Jeffrey Cal and King Cuisia. The case was docketed and assigned to public respondent, Judge Helen Bautista-Ricafort. Team Image, et al, as defendants, filed their Answer with Counterclaims. A copy thereof was furnished to Solar Team counsel by registered mail; however, the pleading did not contain any written explanation as to why service was not made personally upon Solar Team. Solar Team filed a motion to expunge the Answer with Counterclaims and to declare Team Image, et al in default, alleging that the latter did not observe the mandate of Section 11 of Rule 13 service and filing of pleadings and other papers must, whenever practicable, be done personally; and if made through other modes, the party concerned must provide a written explanation as to why the service or filing was not done personally. The distance between the office of Team Image, et al counsel is estimated to be 200 meters from the office of Solar Team counsel. Solar Team further alleged that the post office was about 10 times farther from the office of Team Image, et al counsel. Judge Bautista-Ricafort issued an order denying, for lack of merit, Solar Teams motion to expunge the Answer with Counterclaims and to declare Team Image, et al in default. Hence, the instant special civil action of certiorari. Issue: Whether or not Judge Bautista-Ricafort committed grave abuse of discretion, amounting to lack or excess of jurisdiction, when she admitted Team Image, et als "Answer with Counterclaims," notwithstanding violation of Section 11, Rule 13.

Held: NO. Judge Bautista-Ricafort did not commit grave abuse of discretion. Section 5, Rule 13 of the 1997 Rules of Civil Procedure prescribes two modes of service of pleadings, motions, notices, orders, judgments and other papers, namely: (1) personal service; and (2) service by mail. If service cannot be done either personally or by mail, substituted services may be resorted to under Section 8 thereof. Personal service and filing is the general rule. While, resorting to other modes of service and filing is the exception. Thus, whenever personal service or filing is practicable, in light of the circumstances of time, place and person, personal service or filing is mandatory. One may resort to other modes only when personal service or filing is not practicable. But this must be accompanied by a written explanation as to why personal service or filing was not practicable to begin with. In adjudging the plausibility of an explanation, a court shall likewise consider the importance of the subject matter of the case or the issues involved therein, and the prima facie merit of the pleading sought to be expunged for violation of Section 11. The Court cannot rule otherwise, lest they allow circumvention of the innovation introduced by the 1997 Rules in order to obviate delay in the administration of justice. In this case, the proximity between the offices of opposing counsel and between the office of Team Image, et al and the post office were established. And proximity would seem to make personal service most practicable, but exceptions may nonetheless apply. For instance, where the adverse party or opposing counsel to be served with a pleading seldom reports to office and no employee is regularly present to receive pleadings, or where service is done on the last day of the reglementary period and the office of the adverse party or opposing counsel to be served is closed, for whatever reason. While it appeared that there was a prima facie violation of Sec. 11, Rule 13, since the proximity of the offices of opposing counsels was established and there was no valid explanation as to why personal service could not be done, the grant or denial of the motion to expunge remained within the discretion of the trial court. Sec. 6, Rule 1 of provides that the Rules shall be liberally construed to promote the objective of securing a just, speedy and inexpensive disposition of every action/proceeding. The trial court also followed the dictum laid down in Alonso v. Villamor; instead of expunging it from the record, the court exercised its discretion and allowed the case to stand. If motions to expunge or strike out pleadings for violation of Section 11 of Rule 13 were to be indiscriminately resolved under Section 6 of Rule 1, then Section 11 would become meaningless and its sound purpose negated. Nevertheless, the court sustained the challenged ruling of the trial court, but for reasons other than those provided for in the challenged order (The 1997 Rules of Civil Procedure took effect only on 1 July 1997, while the questioned Answer with Counterclaims was filed only on 8 August 1997, or on the 39th day following the effectivity of the 1997 Rules).

CLEDERA V. SARMIENTO, 39 SCRA 552 (1971) Petitioners: provincial governor, vice governor and members of the provincial board Facts: The private respondents in this case (names not mentioned) were employees of the provincial government of Camarines Sur and paid under the plantilla of personnel of the road and bridge fund budget. The provincial board of the province of Camarines Sur passed a resolution which approved the road and bridge fund budget of the province for the fiscal year 1968-1969 and abolished the postions of herein private respondents, who as a consequence filed before the respondent Judge sitting at Naga City for prohibition and/or mandamus with damages seeking their reinstatement and payment of back salaries as well as the restoration of their respective positions previously occupied by them in the plantilla of personnel of the road and bridge fund bugdget. (the detailed facts are not that important in this case because whats important is the filing of the motions) July 10, 1969 parties agreed that civil cases be decided jointly and parties were given five days from July 14 to July 19 to submit their respective memoranda July 18, 1969 private respondents filed a motion to re-open the cases and to allow them to present additional evidence consisting of the budget and plantilla of personnel of the road and bridge fund for the fiscal year September 10, 1969 respondent Judge Sarmiento denied the motion seeking to reopen the two cases November 3, 1969 private respondents filed a motion for reconsideration of the aforesaid order, which motion does not contain any notice at all setting the time, date and place of hearing November 20, 1969 private respondents filed a request addressed to the clerk of court to set for hearing on November 24, 1969, expressly stating that a copy of the same was delivered to the Provincial Fiscal that same day, November 20, 1069 (Basically, in the above mentioned facts whats important to remember is how the respondents filed a motion for reconsideration without setting time, date and place of hearing. The rest are just jibberjabber) November 26, 1969 judge issued an order requiring petitioners to submit within five days from receipt their opposition to private respondents motion for reconsideration; but respondents did not submit an opposition December 4, 1969 Judge set aside its order of September 10, 1969 and reopened the two cases and allowed respondents to present additional evidence to further substantiate the claim of respondents that items were abolished in bad faith April 27, 1970 Judge issued a decision in favor of private respondents and directed their immediate reinstatement and payment of back salaries May 12, 1970 Fiscal, cousel for petitioners, received a copy of the decision dated April 27, 1970 June 8, 1970 Petitioners filed a 15-page motion dated June 6 for reconsideration of decision together with a notice of hearing addressed to the clerk of court

However, June 16, 1970, respondents filed a motion for execution on the ground that the decision had already become final since no appeal therefrom had been interposed and perfected by petitioners within 30 days from the receipt of May 12, 1970 decision The respondents contention was that even if the petitioners actually filed their motion for reconsideration dated June 6, the motion was fatally defective, proforma, and should not be considered x x x because it failed to comply with the MANDATORY and ELEMNTARY provisions of Sec 2 of Rule 37 in relation to Secs 4, 5, 6 of Rule 15 of the Rules of Court; consequently the filing of the such motion for reconsideration x x x did not and should not toll the running of the period of appeal The judge granted the private respondents motion for execution relying on the past cases that requirements of Secs 4, 5, and 6 of Rule 15 of the rules of court are mandatory in relation to Sec 2 of Rule 37 of the Revised Rules of Court The contention of the petitioners was that what the law prohibits is not the absence of previous notice, but the absolute absence thereof and lack of opportunity to be heard. Issue: Whether or not the motions filed by the petitioners comply with the requirements of the Revised Rules of Court (Sec 2 of Rule 37 in relation to Secs 4, 5, 6 of Rule 15 of the Rules of Court) or whether or not a fatally defective notice could be considered a valid notice which could toll the running of the prescriptive period Held: The petitioners thought relied on cases that dealt with motions which initially did not contain not were accompanied by any notice of hearing. While the motion in the case at bar contains a notice of hearing but deficient, does not preclude the application of the rule; because the notice of the hearing in the present case is fatally defective, for it failed to indicate the place and time of hearing of the motion as required by Section 2 of Rule 37 in relation to Sections 4, 5, 6 of Rule 15, and therefore the same is, as stated by the respondent Judge, worse than no notice at all The rules are clear and couched in a language understandable to any college student, WON he is a student of law. Sections 4 and 5 of Rule 15 require that notice shall be directed to the parties concerned AND state the time and place for the hearing of the motion, which shall be served at least three days before the hearing thereof, together with a copy of the motion and other supporting documents. This is done to give the opposing party an opportunity to contest the motion and be heard thereon. There is no ambiguity in the rules: failure to give the three-day notice prior to hearing vitiates the same. To emphasize once more, the directives in Section 2 of Rule 37 and Sections 4, 5, and 6 of Rule 5 of the Revised Rules of Court are as mandatory as they are clear and simple; and non compliance therewith is fatal to the cause of the movant, because the mere filing of the motion for reconsideration, without the requisite notice of hearing, does not toll the running of the period for appeal. Unless the movant has the time and place of hearing in the notice and serves the adverse party with the same, the court would have no way to determine whether the party agrees to 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 to file his reply or opposition. The rules commanding the movant to serve of the adverse party a written notice of the motion (Section 2, Rule 37) and that the notice of hearing "shall be directed to the parties concerned, and shall estate the time and place for the hearing of the motion" (Section 5, Rule 15), do not provide for any qualifications, much less exceptions. To stray from the rules reaffirmed in the cases cited by the Supreme Court would form dangerous precedent. It would be subversive to the stability of the Rules of Court and jurisprudence thereon. It shall cause problems to the Bench, the Bar and the general public, who would be subjected to an irritating uncertainty as to when one should follow the rules laid down and when they can be ignored. CRUZ V. CA, 388 SCRA 72 (2002) DOCTRINE: Proof of service is mandatory from the language of the rule, proof of service is mandatory. Without such proof of service to the adverse party, a motion is nothing but an empty formality deserving no judicial cognizance, x x x If service is by registered mail, proof of service consists of 1) Affidavit of the person mailing 2) registry receipt, BOTH must be appended to the motion. Absent one or the other, there is no proof of service. Facts: The City Prosecutor of Manila charged petitioner (Cruz) with the crime of Estafa thru Falsification of Public Document before the Manila RTC. Cruz executed before a notary public an Affidavit of Self-Adjudication of a parcel of land stating that she was the sole surviving heir of the registered owner when in fact she knew that there were other surviving heirs. Since the offended party did not reserve the right to reserve a separate civil action arising from the criminal fofense, the civil action was deemed instituted in the criminal case. January 17, 1994 the RTC rendered decision acquitting Cruz on the ground of reasonable doubt. In the same decision, the RTC rendered a decision on the civil aspect, ordering the return to the surviving heirs of the parcel of land located in Bulacan January 28, 1994 Cruz received a copy of the decision February 10, 1994 Cruz filed by registered mail an MR dated February 7, 1994, assailing the RTCs ruling on the civil aspect of the criminal case. Cruz furnished City Prosecutor a copy of the motion by registered mail April 18, 1994 RTC denied MR there is nothing to show that the Office of the City Prosecutor was actually furnished or served with a copy of the said Motion for Reconsideration within the reglementary period of fifteen (15) days from receipt by the accused on January 28, 1994 of a copy of the Courts decision dated January 17, 1994, so that the same is already final and executory, let the Motion for Reconsideration be Denied for lack of merit Cruz moved for another MR but it was also denied. Due to this, Cruz appealed for certiorari and mandamus with the Court of appeals to nullify orders of RTC. Rulings of the CA:

The CA affirmed the rulings of the RTC. It also declared in part: Section 10, Rule 13, Rules of Court, provides as follows: SEC. 10. Proof of Service. Proof of personal service shall consist of a written admission of the party served, or the affidavit of the party serving, containing a full statement of the date, place and manner of service. If the service is by ordinary mail, proof thereof shall consist of an affidavit of the person mailing of facts showing compliance with Section 5 of this rule. If service is made by registered mail, proof shall be made by such affidavit and the registry receipt issued by the mailing office. The registry return card shall be filed immediately upon receipt thereof by the sender, or in lieu thereof the letter unclaimed together with the certified or sworn copy of the notice given by the postmaster to the addressee. It is clear that in case service is done thru registered mail, proof of service shall be made by: a) affidavit of person mailing and b) registry receipt issued by the mailing office. BOTH MUST CONCUR. In the current case, there was no such affidavit, nor registry receipt attached. The respondent judge cannot be said to have committed an act in GADLEJ. Petitioner contends that both copies of the MR were sent to the trial court and the city prosecutor via registered mail on February 10, 1994. She relied on jurisprudence that the date of the mailing is the date of the filing and argued that the date of both motions was on February 10, 1994; therefore it was filed within the 15-day period. The Court of Appeals, noting that petitioner received a copy of the decision on January 28, 1994, stated that petitioner had until February 12, 1994 to appeal the decision or file a motion for reconsideration. The Court of Appeals ruled that petitioner, by filing a motion for reconsideration without any proof of service, merely filed a scrap of paper and not a motion for reconsideration. Hence, the reglementary period of petitioner to appeal continued to run and lapsed after the 15-day period, making the trial courts decision final and executory. Issue: Whether the CA erred in not finding that the prosecution was duly furnished with a copy of the MR of Cruz or whether Cruzs motion for reconsideration dated February 7, 1994 Held: The SC agreed with the CA that petitioner failed to comply with the mandatory requirements on proof of service insofar as the public prosecutor is concerned. The Court has stressed time and again that non-compliance with Sections 4, 5 and 6 of Rule 15 is a fatal defect. The well-settled rule is that a motion which fails to comply with Sections 4, 5, and 6 of Rule 15 is a useless piece of paper. If filed, such motion is not entitled to judicial cognizance and does not stop the running of the reglementary period for filing the requisite pleading.[14] Section 6 of Rule 15 reads: SEC. 6. - Proof of service to be filed with motions. No motion shall be acted upon by the court, without proof of service of the notice thereof.

It is clear that proof of service is mandatory, without which a motion is nothing more than an empty formality deserving no judicial cognizance. Section 13 of Rule 13 further requires that: SEC. 13. Proof of Service. x x x. If service is made by registered mail, proof shall be made by such affidavit and the registry receipt issued by the mailing office. The registry return card shall be filed immediately upon its receipt by the sender, or in lieu thereof the unclaimed letter together with the certified or sworn copy of the notice given by the postmaster to the addressee. Service made by registered mail requires both the affidavit of the person mailing and the registry receipt, else there can be no proof of service. As stated earlier, Cruz failed to attach both the affidavit and the registry receipt, as required by the rules. It is, on its face, a mere scrap of paper. However, in this case, only the civil aspect was point of contention. The city prosecutor could not be considered as the proper party to be mailed the proof of service, it was the offended party, her fellow surviving heirs. Thus the SC gave Cruz five days from the receipt of the SC Decision to send the required proof of service to the heirs. KKK FOUNDATION, INC. V. BARGAS, 541 SCRA 432 (2007) Facts: KKK Foundation filed a complaint for annulment of extra-judicial foreclosure of REM and Nullification of sherrifs auction sale for prayer for the issuance of temporary restraining order and writ of preliminary injunction. KKK foundation alleged: 1) sale was made with fraud 2) sherriff did not post requisite notice of sherrifs sale 3) extrajudicial foreclosure was fatally defective since it ought to foreclose properties of two different entities 4) awarded and sold to Imelda Angeles for an inadequate bid 5) all were sold en masse The judge Calderon-Bargas issued a temporary restraining order preventing Angeles from consolidating her ownership to the foreclosed properties. They also executed a compromise agreement. Petitioner, subsequently, filed an Urgent Ex Parte Motion to recall compromise agreement since other property owner and other trustees of petitioner were not consulted The judge issued an order: Record shows that the Urgent Ex-Parte Motion to Recall Compromise Agreement and Motion to Approve Compromise Agreement both failed to comply with Sec[s]. 4 and 5, Rule 15 of the Civil Procedure. Both proceedings have no specific date of hearing. The reason why the Motion to Approve Compromise Agreement up to now has not yet been acted upon was that it has no date of hearing. WHEREFORE, the Urgent Ex-Parte Motion to Recall Compromise Agreement and the Motion to [Approve] Compromise Agreement are considered mere scrap[s] of paper.

However, the RTC approved the compromise agreement and granted private respondents writ of execution Issue: Whether or not the judge committed grave abuse of discretion when it GRANTED private respondents motion for issuance of writ of execution although the same was filed without an accompanying notice of hearing Held: Courts have 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. Service of a copy of a motion containing a notice of the time and the place of hearing of that motion is a mandatory requirement, and the failure of movants to comply with these requirements renders their motions fatally defective. However, there are exceptions to the strict application of this rule. These exceptions are: (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; (2) where the interest of substantial justice will be served; (3) where the resolution of the motion is addressed solely to the sound and judicious discretion of the court; and (4) where the injustice to the adverse party is not commensurate with the degree of his thoughtlessness in not complying with the procedure prescribed. A notice of hearing is an integral component of procedural due process to afford the adverse parties a chance to be heard before a motion is resolved by the court. Through such notice, the adverse party is given time to study and answer the arguments in the motion. The records show that Angeles' Motion for the Issuance of the Writ of Execution contained a notice for hearing, there was no date and time. The SC still found that petitioner was not denied procedural due process. Upon received the Motion, the Trial Court gave the petitioner 10 days to file a comment and only ruled upon the expiration of such period. Clearly, Angeles was given time to study and comment on the motion for which reason the very purpose of a notice of hearing had been achieved. The notice requirement is not a ritual to be followed blindly. Procedural due process is not based solely on a mechanical and literal application that renders any deviation inexorably fatal. Instead, procedural rules are liberally construed to promote the objective and assist in obtaining a just, speedy and inexpensive determination of the action/proceeding. Notes: - A motion without notice of hearing is a mere scrap of paper, and a pro forma motion for reconsideration does not suspend the running of the period to appeal. - Section 2, Rule 37 of Rules of court providing that a pro forma motion for new trial or reconsideration shall not toll the reglementary period of appeal does not apply to an original petition for certiorari and mandamus under rule 65.

ANECO REALTY DEVELOPMENT CORPORATION DEVELOPMENT CORPORATION, 560 SCRA 182 (2008)

V.

LANDEX

Facts: Fernandez Hermanos Development, Inc. (FHDI) is the original owner of a tract of land in QC, which it subdivided into thirty-nine (39) lots. Later, it sold twenty-two (22) lots to petitioner Aneco and the remaining seventeen (17) lots to respondent Landex. Landex then constructed a concrete wall on one of its lots, to which Aneco filed a complaint for injunction with the RTC of QC to restrain the construction of the said wall. Aneco also filed two supplemental complaints seeking its demolishment and damages. Landex filed an answer alleging that Aneco was not deprived access to its own lots since it (Aneco) has its own entrance along Miller, Resthaven and San Francisco streets. Landex also claimed that FHDI sold ordinary lots, not subdivision lots, to Aneco based on the express stipulation in the deed of sale that FHDI was not interested in pursuing its own subdivision project. The RTC rendered a decision granting the complaint for injunction. Landex moved for reconsideration. It however failed to include a notice of hearing in its MR as required under Section 5, Rule 15 of the 1997 Rules of Civil Procedure. Thereafter, Landex corrected the defect by filing a motion setting a hearing for its MR. The RTC acted on and set a hearing on the MR, on which Aneco failed to attend. RTC gave Aneco additional time to file a comment on the MR. The RTC then issued an order granting Landexs MR, so Aneco appealed to the CA. The latter court affirmed the RTC order and also denied Anecos subsequent MR, so Aneco filed a petition or appeal by certiorari (Rule 45) in the Supreme Court (the present petition). Issue: (Remember: Landex failed to include a notice of hearing in its MR filed in the RTC) W/N the RTC and CA erred in liberally (as opposed to strictly) applying the rule on notice of hearing under Section 5, Rule 15 of the 1997 Rules of Procedure. (NO) Held: Procedural rules promote the orderly resolution of cases so they must be followed, but it is also true that they are mere tools designed to facilitate the attainment of justice. Their strict and rigid application should be relaxed when they hinder rather promote substantial justice. Public policy dictates that court cases, as much as possible, be resolved on the merits and not on mere technicalities. In this case, the RTC and CA exercised sound discretion in opting for a liberal application on the rules of notice of hearing and it will not be interfered with by the SC, absent grave abuse or palpable error. Section 6, Rule 1 of the 1997 Rules of Civil

Procedure mandate a liberal construction of the rules to promote the objectives of just, speedy, and inexpensive disposition of every action and proceeding. The requirement of a notice of hearing in every contested motion is part of due process of law, as this alerts the opposing party of a pending motion in court and gives him an opportunity to oppose it. What the rule forbids is not the mere absence of a notice of hearing in a contested motion but the unfair surprise caused by the lack of notice. If the opposing party is given a sufficient opportunity to oppose a defective motion, the procedural lapse is deemed cured and the intent of the rule is substantially complied. In the case at bar, Aneco was afforded procedural due process since it was given an opportunity to file a comment within a reasonable time. It cannot argue unfair surprise, as it even filed a comment on the MR. Since there is no substantial injury or unfair prejudice, the RTC and CA correctly ignored the procedural defect. ***On the substantial aspect: The complaint for injunction against Landex should be dismissed. Article 430 of the Civil Code gives every owner the right to enclose or fence his land by means of walls. And as owner of the land, Landex is within his right to fence his property. Also, Aneco assert the road lot under the old subdivision project of FHDI because it knew at the time of the sale that it was buying ordinary lots, not subdivision lots, from FHDI. BORJE V. CFI OF MISAMIS OCCIDENTAL, 88 SCRA 576 (1979) Facts: Atty. Borje alleged that he is the counsel of the water consuming public of Ozamiz City who were against the increased rates imposed by the Misamis Occidental Water District (MOWD for short nalang). He allegedly received water bills from MOWD without indication of the meter readings, consumption and payable amount, so he refused to pay the blank bills. For such failure, his water service was cut. Borje filed an action for damages with mandatory injunction with the CFI of Misamis Occidental. The latter issued an order to reconnect Borjes water service. MOWD and its chairman filed a motion to dismiss the complaint on two grounds: 1) lack of jurisdiction of the CFI since the nature of the action appearing in the complaint is within the field of special civil action, and 2) there is another pending case between the same parties for the same cause. The CFI, through Judge Genato, issued an order dismissing the case, not on the basis of the grounds alleged by MOWDs motion to dismiss by on the ground that there was no malice or bad faith in the cutting of Borjes water service. Borje contends that the CFI has gravely abused its discretion when it dismissed the case without any evidence presented by both parties, hence it filed the present petition for certiorati and/or mandamus. Issue: W/N the CFI acted with grave abuse of discretion. (YES)

Held: The order of dismissal is not premised on the grounds alleged by MOWDs motion to dismiss. Dismissals of actions on grounds not alleged in the motion to dismiss is improper, for in so doing, a court in effect dismisses an action motu proprio without giving the plaintiffs a chance to argue the point and without receiving any arguments or evidence on the question. There was a need of presentation of proof for the allegations of each of the parties. For CFI to make a finding of lack of malice or bad faith on the part of MOWD from the pleadings and then decree the dismissal of the case is violative of due process. CFI, in the exercise of sound discretion, should have refused to consider and decide in a summary manner and should have allowed the parties to present proof in support of their respective stand. This is because the right to a hearing, which is the right of the parties interested or affected to present their respective cases and submit evidence in support thereof, is one of the primary cardinal rights of litigants. Summary or outright dismissals of actions are not proper where there are factual matters in dispute which need presentation and appreciation of evidence. The demands of a fair and wise administration of justice call for faithful adherence to legal precepts on procedure which ensure to litigants the opportunity to present their evidence and secure a ruling on all the issues presented in their respective pleadings. ANDAYA V. ABADIA, 228 SCRA 705 (1993) Facts: Andaya filed an action for Injunction and Damages with Restraining Order and/or Preliminary Injunction against respondents Abadia et al. before the RTC of Quezon City. He alleges that respondents, as directors of Armed Forces and Police Savings and Loan Association, Inc. (AFPSLAI), illegally and maliciously reorganized the management to oust him from his (Andaya) position as President and General Manager. The RTC granted the prayer of petition for TRO. Abadia et al. filed an Urgent Motion to Dismiss on the ground that the complaint raised intra-corporate controversies over which the Securities and Exchange Commission (SEC) and not the RTC has exclusive original jurisdiction. Andaya filed a consolidated Opposition and also an amended complaint impleading as additional defendants the Central Bank Governor, Central Bank SRDC Managing Director and Central Bank SES Acting Director. Abadia et al. filed an Omnibus Motion contending that the filing of an amended complaint seeking to confer jurisdiction on the court was improper and should not be allowed (it seeks the dismissal of the Amended Complaint). RTC Judge Santiago issued an order dismissing the case for lack of jurisdiction since the causes of action are matters covered by the AFPSLAI By-Laws, which are

corporate matters over which the SEC has jurisdiction. While the order mentioned the amended complaint, it made no express disposition thereon. Andaya seeks the reversal of the order on the alleged procedural infirmity that despite the filing of an Amended Complaint, which rendered respondents Urgent Motion to Dismiss (for the original complaint) functus officio, the RTC, without first admitting the Amended Complaint, dismissed the case against respondents. (The Omnibus Motion was already filed when the RTC rendered the order resolving, not the Omnibus Motion, but the Urgent Motion to Dismiss. Ordinarily, the filing of the Omnibus Motion should render the Urgent Motion to Dismiss superseded. Andaya thus posits that the RTC was precluded from acting not only on the Urgent Motion to Dismiss because it was deemed superseded, but also on the Omnibus Motion because no hearing was had thereon thus leaving the assailed orders without basis to lean on.) Issue: W/N the order of dismissal by the RTC is procedurally infirmed. (NO) Held: -------------------***First, on the substantial aspect: The allegations against respondents in the amended complaint unquestionably reveal intra-corporate controversies cleverly concealed, although unsuccessfully, by use of civil law terms and phrases. While it may be said that corporate acts also give rise to civil liability for damages, it does not follow that the case is necessarily taken out of the jurisdiction of SEC as it may award damages which can be considered consequential in the exercise of its adjudicative powers. In intra-corporate matters such as those affecting the corporation, its directors, trustees, officers, shareholders, the issue of consequential damages may just as well be resolved and adjudicated by the SEC. Moreover, mere allegations of violation of the provisions of the Civil Code on human relations do not necessarily call for the application of the provisions of the Civil Code in place of AFPSLAI By-Laws. The Omnibus Motion already comprehended the lone issue raised in the Urgent Motion to Dismiss (i.e., the court has no jurisdiction over intra-corporate matters) and upon which ground the RTC dismissed the case against respondents. -------------------The previous hearing on the Urgent Motion to Dismiss cured the defect of absence of hearing on the Omnibus Motion but only insofar as said issue was concerned. What is important is that Andaya was heard on that issue, hence, due process was observed. Moreover, the Omnibus Motion made an express statement adopting the arguments in the Urgent Motion to Dismiss. Besides, even if the Urgent Motion to Dismiss may have been deemed superseded, the Court is not precluded from considering the same which still remains in the record. The foregoing notwithstanding, remedial rights and privileges under the Rules of Court are utterly useless in a forum that has no jurisdiction over the case. It should be noted that the RTC dismissed the case against respondents on the ground that it has no jurisdiction over the subject matter thereof which mainly involves intra-corporate controversies.

Jurisdiction is vested by law and cannot be conferred or waived by the parties or even the judge. Hence, even on appeal, and even if the parties do not raise the issue of jurisdiction, the reviewing court is not precluded from ruling that it has no jurisdiction over the case. The last sentence of Section 2, Rule 9, Rules of Court, expressly states: "Whenever it appears that the court has no jurisdiction over the subject matter, it shall dismiss the action." The Rule uses the word "shall," leaving the court no choice under the given situation but to dismiss the case. The same Rule also uses the phrase "whenever it appears," which means, at any time after the complaint or amended complaint is filed, because the lack of jurisdiction may be apparent from the allegations therein. Therefore, even if there is no answer/motion to dismiss filed, the court can dismiss the case for want of jurisdiction. In this sense, dismissal for lack of jurisdiction can be ordered by the court motu propio. Applying this notion to the case at bar, considering that the dismissal of the case was due to lack of jurisdiction, it becomes insignificant whether the court acted on the Urgent Motion to Dismiss or on the Omnibus Motion requiring notice as per Sections 4 and 6 of Rule 15. REPUBLIC V. GLASGOW, 542 SCRA 95 (2008) FACTS: On July 18, 2003, the Republic filed a complaint in the RTC Manila for civil forfeiture of assets (with urgent plea for issuance of temporary restraining order [TRO] and/or writ of preliminary injunction) against the bank deposits in the account maintained by Glasgow in CSBI. The case was filed pursuant to RA 9160 (the AntiMoney Laundering Act of 2001). Acting on the Republics urgent plea for the issuance of a TRO, the executive judge4 of RTC Manila issued a 72-hour TRO dated July 21, 2003. After hearing, the trial court issued an order granting the issuance of a writ of preliminary injunction. Meanwhile, summons to Glasgow was returned "unserved" as it could no longer be found at its last known address. The Republic then filed a verified omnibus motion for the issuance of alias summons and leave of court to serve summons by publication. The trial court granted the former but was silent on the latter. Later on the court archived the case allegedly for failure of the Republic to serve the alias summons. The Republic then filed an ex parte omnibus motion to have the case reinstated and resolve its pending motion to serve summons by publication. The result was that the trial court ordered the reinstatement of the case and directed it to serve the alias summons on Glasglow and CSBI (but didnt rule again for the motion with regard to serving the summons by publication as it was premature). On July 12, 2004, the Republic , through the OSG, received a copy of the sheriffs return dated June 30, 2004 stating that the alias summons was returned "unserved" as Glasgow was no longer holding office at the given address since July 2002 and left no forwarding address. The Republics motion for leave of court to serve summons by publication remained unresolved. Thus, on August 11, 2005, the Republic filed a manifestation and ex parte motion to resolve its motion for leave of court to serve summons by publication.

On August 12, 2005, the OSG received a copy of Glasgows "Motion to Dismiss (By Way of Special Appearance)" dated August 11, 2005. It alleged that (1) the court had no jurisdiction over its person as summons had not yet been served on it; (2) the complaint was premature and stated no cause of action as there was still no conviction for estafa or other criminal violations implicating Glasgow and (3) there was failure to prosecute on the part of the Republic. The Republic opposed Glasgows motion to dismiss. It contended that its suit was an action quasi in rem where jurisdiction over the person of the defendant was not a prerequisite to confer jurisdiction on the court. It asserted that prior conviction for unlawful activity was not a precondition to the filing of a civil forfeiture case and that its complaint alleged ultimate facts sufficient to establish a cause of action. It denied that it failed to prosecute the case. The trial court dismissed the case on the following grounds: (1) improper venue as it should have been filed in the RTC of Pasig where CSBI, the depository bank of the account sought to be forfeited, was located; (2) insufficiency of the complaint in form and substance and (3) failure to prosecute. It lifted the writ of preliminary injunction and directed CSBI to release to Glasgow or its authorized representative the funds in CA-005-10-000121-5. Raising questions of law, the Republic filed this petition. ISSUE: W/N the complaint for civil forfeiture was correctly dismissed on grounds of improper venue, insufficiency in form and substance and failure to prosecute. (NO) HELD 1. The complaint was filed in the proper venue Inasmuch as Glasgow never questioned the venue of the Republics complaint for civil forfeiture against it, how could the trial court have dismissed the complaint for improper venue? On November 15, 2005, this Court issued A.M. No. 05-11-04-SC, the Rule of Procedure in Cases of Civil Forfeiture, under RA 9160. The order dismissing the Republics complaint for civil forfeiture of Glasgows account in CSBI has not yet attained finality on account of the pendency of this appeal. Thus, the Rule of Procedure in Cases of Civil Forfeiture applies to the Republics complaint.Moreover, Glasgow itself judicially admitted that the Rule of Procedure in Cases of Civil Forfeiture is "applicable to the instant case." Section 3, Title II (Civil Forfeiture in the Regional Trial Court) of the Rule of Procedure in Cases of Civil Forfeiture provides: Sec. 3. Venue of cases cognizable by the regional trial court. A petition for civil forfeiture shall be filed in any regional trial court of the judicial region where the monetary instrument, property or proceeds representing, involving, or relating to an unlawful activity or to a money laundering offense are located; provided, however, that where all or any portion of the monetary instrument, property or proceeds is located outside the Philippines,

the petition may be filed in the regional trial court in Manila or of the judicial region where any portion of the monetary instrument, property, or proceeds is located, at the option of the petitioner. Therefore, the venue of civil forfeiture cases is any RTC of the judicial region where the monetary instrument, property or proceeds representing, involving, or relating to an unlawful activity or to a money laundering offense are located. Pasig City, where the account sought to be forfeited in this case is situated, is within the National Capital Judicial Region (NCJR). Clearly, the complaint for civil forfeiture of the account may be filed in any RTC of the NCJR. Since the RTC Manila is one of the RTCs of the NCJR, it was a proper venue of the Republics complaint for civil forfeiture of Glasgows account. 2. The complaint was sufficient in form and substance In a motion to dismiss a complaint based on lack of cause of action, the question submitted to the court for determination is the sufficiency of the allegations made in the complaint to constitute a cause of action and not whether those allegations of fact are true, for said motion must hypothetically admit the truth of the facts alleged in the complaint. In a motion to dismiss for failure to state a cause of action, the focus is on the sufficiency, not the veracity, of the material allegations. The test of the sufficiency of the facts alleged in the complaint is whether or not, admitting the facts alleged, the court could render a valid judgment upon the same in accordance with the prayer of the complaint. Section 4, Title II of the Rule of Procedure in Cases of Civil Forfeiture provides: Sec. 4. Contents of the petition for civil forfeiture. - The petition for civil forfeiture shall be verified and contain the following allegations: (a) The name and address of the respondent; (b) A description with reasonable particularity of the monetary instrument, property, or proceeds, and their location; and (c) The acts or omissions prohibited by and the specific provisions of the Anti-Money Laundering Act, as amended, which are alleged to be the grounds relied upon for the forfeiture of the monetary instrument, property, or proceeds; and [(d)] The reliefs prayed for. Here, the verified complaint of the Republic contained the following allegations: (a) the name and address of the primary defendant therein, Glasgow; (b) a description of the proceeds of Glasgows unlawful activities with particularity, as well as the location thereof, in the amount of P21,301,430.28 maintained with CSBI; (c) the acts prohibited by and the specific provisions of RA 9160, as amended, constituting the grounds for the forfeiture of the said proceeds. In particular, suspicious transaction reports showed that Glasgow engaged in unlawful activities of estafa and violation of the Securities Regulation Code; the proceeds of the unlawful activities were transacted and deposited with CSBI thereby making them appear to have originated from legitimate sources; as

such, Glasgow engaged in money laundering (under Section 4, RA 9160, as amended); and the AMLC subjected the account to freeze order and (d) the reliefs prayed for The form and substance of the Republics complaint substantially conformed with Section 4, Title II of the Rule of Procedure in Cases of Civil Forfeiture. In relation thereto, Rule 12.2 of the Revised Implementing Rules and Regulations of RA 9160, as amended, states: Rule 12.2. When Civil Forfeiture May be Applied. When there is a SUSPICIOUS TRANSACTION REPORT OR A COVERED TRANSACTION REPORT DEEMED SUSPICIOUS AFTER INVESTIGATION BY THE AMLC, and the court has, in a petition filed for the purpose, ordered the seizure of any monetary instrument or property, in whole or in part, directly or indirectly, related to said report, the Revised Rules of Court on civil forfeiture shall apply. The injunctive writ issued on August 8, 2003 removed account no. CA-005-10000121-5 from the effective control of either Glasgow or CSBI or their representatives or agents and subjected it to the process of the court. Since account no. CA-005-10-000121-5 of Glasgow in CSBI was (1) covered by several suspicious transaction reports and (2) placed under the control of the trial court upon the issuance of the writ of preliminary injunction, the conditions provided in Section 12(a) of RA 9160, as amended, were satisfied. Hence, the Republic, represented by the AMLC, properly instituted the complaint for civil forfeiture. Whether or not there is truth in the allegation that account no. CA-005-10-000121-5 contains the proceeds of unlawful activities is an evidentiary matter that may be proven during trial. The complaint, however, did not even have to show or allege that Glasgow had been implicated in a conviction for, or the commission of unlawful activities/violation of SEC Code as a criminal conviction for an unlawful activity is not a prerequisite for the institution of a civil forfeiture proceeding. Stated otherwise, a finding of guilt for an unlawful activity is not an essential element of civil forfeiture. Thus, regardless of the absence, pendency or outcome of a criminal prosecution for the unlawful activity or for money laundering, an action for civil forfeiture may be separately and independently prosecuted and resolved. 3. There was no failure to prosecute Immediately after the complaint was filed, the trial court ordered its deputy sheriff/process server to serve summons and notice of the hearing on the application for issuance of TRO and/or writ of preliminary injunction. The subpoena to Glasgow was, however, returned unserved as Glasgow "could no longer be found at its given address" and had moved out of the building since August 1, 2002. As the summons on Glasgow was returned "unserved," and considering that its whereabouts could not be ascertained despite diligent inquiry, the Republic filed a verified omnibus motion. While the trial court issued an alias summons in its order dated October 15, 2003, it kept quiet on the prayer for leave of court to serve summons by publication.

Meanwhile, the Republic continued to exert efforts to obtain information from other government agencies on the whereabouts or current status of respondent Glasgow if only to save on expenses of publication of summons. Its efforts, however, proved futile. The records on file with the Securities and Exchange Commission provided no information. Other inquiries yielded negative results. On July 12, 2004, the Republic received a copy of the sheriffs return dated June 30, 2004 stating that the alias summons had been returned "unserved" as Glasgow was no longer holding office at the given address since July 2002 and left no forwarding address. Still, no action was taken by the trial court on the Republics motion for leave of court to serve summons by publication. Thus, on August 11, 2005, the Republic filed a manifestation and ex parte motion to resolve its motion for leave of court to serve summons by publication. It was at that point that Glasgow filed a motion to dismiss by way of special appearance, which the Republic vigorously opposed. Strangely, to say the least, the trial court issued the assailed order granting Glasgows motion. While there was admittedly a delay in the proceeding, it could not be entirely or primarily ascribed to the Republic. That Glasgows whereabouts could not be ascertained was not only beyond the Republics control, it was also attributable to Glasgow which left its principal office address without informing the Securities and Exchange Commission or any official regulatory body (like the Bureau of Internal Revenue or the Department of Trade and Industry) of its new address. Moreover, as early as October 8, 2003, the Republic was already seeking leave of court to serve summons by publication 4. Service of summons may be by publication This Court declared that the rule is settled that forfeiture proceedings are actions in rem. The same principle applies in cases for civil forfeiture under RA 9160, as amended, since both cases do not terminate in the imposition of a penalty but merely in the forfeiture of the properties either acquired illegally or related to unlawful activities in favor of the State. As an action in rem, it is a proceeding against the thing itself instead of against the person. In actions in rem or quasi in rem, jurisdiction over the person of the defendant is not a prerequisite to conferring jurisdiction on the court, provided that the court acquires jurisdiction over the res. Nonetheless, summons must be served upon the defendant in order to satisfy the requirements of due process. For this purpose, service may be made by publication as such mode of service is allowed in actions in rem and quasi in rem. Section 8, Title II of the Rule of Procedure in Cases of Civil Forfeiture provides: (b) Where the respondent is designated as an unknown owner or whenever his whereabouts are unknown and cannot be ascertained by diligent inquiry, service may, by leave of court, be effected upon him by publication of the notice of the petition in a newspaper of general circulation in such places and for such time as the court may order. In the event that the cost of

publication exceeds the value or amount of the property to be forfeited by ten percent, publication shall not be required. (emphasis supplied) In the end he complaint for forfeiture of the Republic of the Philippines, represented by the Anti-Money Laundering Council, is REINSTATED. Case remanded to RTC to try the case. DAR V. ABDULWAHID, 547 SCRA 30 (2008) Doctrine: The Department of Agrarian Reform Adjudication Board (DARAB) is vested with primary and exclusive jurisdiction to determine and adjudicate agrarian reform matters, including all matters involving the implementation of the agrarian reform program. Thus, when a case is merely an incident involving the implementation of the Comprehensive Agrarian Reform Program (CARP), then jurisdiction remains with the DARAB, and not with the regular courts. Facts: On December 28, 2000, Yupangco Cotton Mills, Inc. (Yupangco) filed a complaint for Recovery of Ownership and Possession, Violations of R.A. Nos. 6657 and 3844[,] as amended, Cancellation of Title, Reconveyance and Damages with Prayer for the Issuance of Preliminary Mandatory Injunction and/or Temporary Restraining Order against Buenavista Yupangco Agrarian Reform Beneficiaries Association, Inc. (BYARBAI), the DAR and the Land Bank of the Philippines before the RTC of Zamboanga City On January 26, 2001, the DAR filed a Motion to Dismiss on the following grounds: (a) Yupangcos causes of action were not within the jurisdiction of the RTC, (b) forum shopping, and (c) litis pendentia. On November 6, 2001, the RTC denied the Motion to Dismiss, ruling that Yupangcos action was within the jurisdiction of the RTC pursuant to Section 19 of BP 129. DAR and BYARBAI filed an MR but got denied. It elevated the case to CA but the court just affirmed the decision of RTC, finding that the action falls within the jurisdiction of the regular courts and not the DARAB because Yupangco primarily sought the recovery and possession of the subject parcel of land. Hence the petition at bar. Issue: W/N CA erred when it upheld the jurisdiction of the [RTC] purely on the ground that [Yupangco] primarily seeks the recovery of ownership and possession of subject parcel of land, jurisdiction over which is lodged with regional trial courts, not the DARAB (YES) Held: It is the rule that the jurisdiction of a tribunal, including a quasi-judicial office or government agency, over the nature and subject matter of a petition or complaint is determined by the material allegations therein and the character of the relief prayed for, irrespective of whether the petitioner or complainant is entitled to any or all of such reliefs. It is a well-settled rule that jurisdiction is determined by considering not only the status/relationship of the parties but also the nature of the issues or questions that is the subject of the controversy.

THUS, if the issues between the parties are intertwined with the resolution of an issue within the exclusive jurisdiction of the DARAB, it must be addressed and resolved by the Board. Also settled is that jurisdiction should be determined by considering not only the status or relationship of the parties but also the nature of the issues or questions that is the subject of the controversy. THUS, if the issues between the parties are intertwined with the resolution of an issue within the exclusive jurisdiction of the DARAB, such dispute must be addressed and resolved by the Board. In the case at bar, the complaint filed by Yupangco seems at first to be within the jurisdiction of the RTC, as it has been denominated as a Recovery of Ownership and Possession, Violations of R.A. Nos. 6657 and 3844[,] as amended, Cancellation of Title, Reconveyance and [D]amages with Prayer for the Issuance of Preliminary Mandatory Injunction and/or Temporary Restraining Order.. But as correctly pointed out by the DAR, the allegations of the complaint actually impugn the CARP coverage of the landholding involved and its redistribution to farmer beneficiaries, and seek to effect a reversion thereof to the original owner, Yupangco. Yupangco alleged that hes the registered owner of certain parcels of land and it was placed by DAR under the CARP and 4 TCTs over the land were issued in favor BYARBAI; that DAR issued the TCTs BYARBAI without paying him just compensation; that since majority of the BYARBAI members arent his employees therefore they shouldnt have been given preference as being entitled to the lands; that he was prejudiced as the lands were suddenly taken away from him; that the real motive the transfer was to convert the land into rice production resulting in the destruction of coffee plantations and other crops, which was illegal and in violation of the law (RA 6657 and RA 3844- Agri Land Reform Code). He also alleged in its complaint that other acts were committed with the purpose of land speculation, for business or industrial purpose, for immediate sale thereof for business profits and not for planting, care and tending of the coconut plantation, which would defeat the purposes and policies of the Agrarian Reform Laws and breached the conditions of the questioned award of the land, rendering the acquisition by or distribution to BYARBAI as the tenant-tillers of the land null and void, and thus reverting back the ownership and possession thereof to Yupangco. These allegations show that Yupangco sought the recovery of the property by disputing its inclusion in the CARP and imputing errors in the enforcement of the law pertaining to agrarian reform. Under Section 50 of R.A. No. 6657 (CARP LAW), all matters involving the implementation of agrarian reform are within the DARs primary, exclusive and original jurisdiction, and at the first instance, only the DARAB as the DARs quasijudicial body, can determine and adjudicate all agrarian disputes, cases, controversies, and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program and other agrarian laws and their implementing rules and regulations. Ultimately, the complaint in the petition at bar seeks for the RTC to cancel Certificates of Land Ownership Awards (CLOAs) issued to the beneficiaries and the TCTs issued pursuant thereto.!!

These are reliefs, which the RTC cannot grant, since the complaint essentially prays for the annulment of the coverage of the disputed property within the CARP, which is but an incident involving the implementation of the CARP. These are matters relating to terms and conditions of transfer of ownership from landlord to agrarian reform beneficiaries over which DARAB has primary and exclusive original jurisdiction, pursuant to Section 1(f), Rule II, DARAB New Rules of Procedure. Section 1, Rule II, 2002 DARAB Rules of Procedure and reiterated that: The DARAB has exclusive original jurisdiction over cases involving the rights and obligations of persons engaged in the management, cultivation and use of all agricultural lands covered by the Comprehensive Agrarian Reform Law. f) Cases involving the issuance of Certificate of Land Transfer (CLT), Certificate of landownership Award (CLOA) and Emancipation Patent (EP) and the administrative correction thereof; The decision of CA has been REVERSED: therefore RTC has no jurisdiction over the case EVANGELISTA V. SANTIAGO, 457 SCRA 744 (2005) Facts: In their Complaint, Evangelista et al (petitioners) alleged that they occupied and possessed parcels of land, located in Sitio Panayawan, Montalban (now Rodriquez), Province of Rizal, by virtue of several Deeds of Assignment, dated 15 April 1994 and 02 June 1994, executed by a certain Ismael Favila y Rodriguez. According to the Deeds of Assignment, 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. Ismael Favila claimed to be one of the heirs and successors-in-interest of Don Hermogenes Rodriguez. Acting as Attorney-in-Fact pursuant to a Special Power of Attorney executed by his "mga kapatid" on 25 February 1965, Ismael Favila signed the aforementioned Deeds of Assignment, assigning portions of the Subject Property to the petitioners, each portion measuring around 500 to 1,000 square meters, in exchange for the labor and work done on the Subject Property by the petitioners and their predecessors. Petitioners said that it was brought to their attention that Santiago was planning to evict them from the Subject Property. Two of the petitioners had actually received notices to vacate. Their investigations revealed that the Subject Property was included in TCTs originating from OCT 670 which was issued in the name of Santiago. OCT No. 670 was issued in the name of Santiagos mother, Isabel Manahan Santiago, pursuant to Decree No. 10248, through which the whole property was awarded in her favor by the Court of Land Registration. Consequently, OCT No. 670 was cancelled and TCT No. T-53028 was issued exclusively in her name. On 28 December 1968, the mom executed a Deed of Donation transferring the property to her son, Santiago

(respondent herein), who subsequently secured TCTs No. 281660, No. N-39258 and No. 205270 in his own name. Petitioners filed with the trial court, on 29 April 1996, an action for declaration of nullity of respondents certificates of title on the basis that OCT No. 670 was fake and spurious. On the other hand the respondentcontends that the allegations in the Complaint are without basis in law and in fact; that the petitioners had no legal capacity to file the complaint therefore having no cause of action. And since OCT No. 670 was genuine and authentic on its face, then OCT No. 670 and all of respondents land titles derived therefrom, are incontrovertible, indefeasible and conclusive against the petitioners and the whole world.Respondent argued that the Spanish title, on which petitioners based their claim, was neither indefeasible nor imprescriptible. He pointed out that any action against his certificates of title already prescribed, especially with regard to OCT No. 670, which was issued in 1913 or more than 83 years prior to the filing of the Complaint by the petitioners. Lastly, respondent denied knowing the petitioners, much less, threatening to evict them. In the instant case, the trial court held a preliminary hearing. During said hearing, petitioners presented their lone witness, Engineer Placido Naval, a supposed expert on land registration laws. In response to questions from the judge, Engineer Naval answered that a parcel of land titled illegally would revert to the State if the Torrens title was cancelled, and that it was the State, through the Office of the Solicitor General, that should file for the annulment or cancellation of the title. Respondent, on the other hand, did not present any evidence but relied on all the pleadings and documents he had so far submitted to the trial court. The trial court ruled in favor of the respondent and dismissed the complaint. It held that a parcel of land titled illegally will revert to the State as it is the State who must file the corresponding case of annulment of title through the OSG and a land illegally titled in the name of private individual, the State through the Office of the Solicitor General should file the corresponding case for cancellation of title. It also said that after having gone through with the "Deed of Assignment/s" purportedly executed by and between a certain Ismael Favila y Rodriguez and the plaintiffs, which is the principal if not the only basis of plaintiffs claim ownership and possession of the subject parcel of land, the same does not hold water in a manner of speaking, for being self-serving. Suffice it to say that there is no showing that plaintiffs complied with the said law i.e. to "apply for registration of their lands under Act No. 496, within six (6) months from the effectivity of this decree (February 16, 1976). Thereafter, Spanish titles cannot be used as evidence of land ownership in any registration proceedings under the Torrens System.This being the case and likewise being clear that plaintiffs were not the lawful owners of the land subject of this case, for they did not comply with PD 892, the said plaintiffs do not have the legal standing to bring before this Court the instant complaint. Petitioners filed an MR, which got denied by the RTC. Thereafter, petitioners appealed to the CA but it just affirmed the RTCs decision and dismissed the complaint. Now, petitioners file a petition for review under rule 45 praying for the reversal of the CAs decision.

Issues 1. Whether the lower courts dismissal of the petitioners complaint should be proscribed by the rules of evidence it being based inter alia on Engr. Navals testimony, which was indisputably not based on facts but conclusion of law. Whether the lower courts dismissal of petitioners complaint should be proscribed by the rules of evidence it being done sans ample evidence except bare allegations of respondent. Whether the provision of P.D. 892, i.e., Spanish titles cannot be used as evidence of land ownership in any registration proceedings under the Torrens system, holds of an exception. Whether an action for quieting of title, specifically where petitioners are in possession of subject land, can be subject of prescription.

2. 3. 4.

Held: The Court believes that the trial court rightfully dismissed petitioners Complaint, but for reasons different from those relied upon by the trial court and the Court of Appeals. According to the respondent, petitioners had no legal capacity to file the Complaint, and thus, the Complaint filed before the trial court stated no cause of action. Before anything else, it should be clarified that "the plaintiff has no legal capacity to sue and "the pleading asserting the claim states no cause of action" are two different grounds for a motion to dismiss or are two different affirmative defenses. Among the grounds for a motion to dismiss under the Rules of Court are lack of legal capacity to sue and that the complaint states no cause of action. Lack of legal capacity to sue means that the plaintiff is not in the exercise of his civil rights, or does not have the necessary qualification to appear in the case, or does not have the character or representation he claims. On the other hand, a case is dismissible for lack of personality to sue upon proof that the plaintiff is not the real party-in-interest, hence grounded on failure to state a cause of action. The term "lack of capacity to sue" should not be confused with the term "lack of personality to sue." While the former refers to a plaintiffs general disability to sue, such as on account of minority, insanity, incompetence, lack of juridical personality or any other general disqualifications of a party, the latter refers to the fact that the plaintiff is not the real party- in-interest. Correspondingly, 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. The affirmative defense that the Complaint stated no cause of action, similar to a motion to dismiss based on the same ground, requires a hypothetical admission of the facts alleged in the Complaint. In a motion to dismiss a complaint based on lack of cause of action, the question submitted to the court for determination is the sufficiency of the allegations of fact made in the complaint to constitute a cause of action, and not on whether these allegations of fact are true, for said motion must hypothetically admit the truth of the facts alleged in the complaint; that the test of the sufficiency of the facts alleged in the complaint is whether or not, admitting the facts alleged, the court could render a valid judgment upon the same in accordance with the prayer of said complaint. Stated otherwise, the insufficiency of the cause of action

must appear in the face of the complaint in order to sustain a dismissal on this ground, for in the determination of whether or not a complaint states a cause of action, only the facts alleged therein and no other matter may be considered, and the court may not inquire into the truth of the allegations, and find them to be false before a hearing is had on the merits of the case; and it is improper to inject in the allegations of the complaint facts not alleged or proved, and use these as basis for said motion. The trial court should have limited itself to examining the sufficiency of the allegations in the Complaint. It was proscribed from inquiring into the truth of the allegations in the Complaint or the authenticity of any of the documents referred or attached to the Complaint, since these are deemed hypothetically admitted by the respondent. The trial court evidently erred in making findings as to the authenticity of the Deeds of Assignment executed by Ismael Favila in favor of petitioners and questioning the existence and execution of the Special Power of Attorney in favor of said Ismael Favila by his siblings. These matters may only be resolved after a proper trial on the merits. Indeed, petitioners Complaint filed before the trial court was captioned as an action for declaration of nullity of respondents certificates of title. However, the caption of the pleading should not be the governing factor, but rather the allegations therein should determine the nature of the action, because even without the prayer for a specific remedy, the courts may nevertheless grant the proper relief as may be warranted by the facts alleged in the Complaint and the evidence introduced. An ordinary civil action for declaration of nullity of certificates of title is not the same as an action for reversion. The difference between them lies in the allegations as to the character of ownership of the realty whose title is sought to be nullified. In an action for reversion, the pertinent allegations in the complaint would admit State ownership of the disputed land. On the other hand, a cause of action for declaration of nullity of a certificate of title would require allegations of the plaintiffs ownership of the contested lot prior to the issuance of such free patent and certificate of title as well as the defendants fraud or mistake, as the case may be, in successfully obtaining these documents of title over the parcel of land claimed by plaintiff. The real party-ininterest is not the State but the plaintiff who alleges a pre-existing right of ownership over the parcel of land in question even before the grant of title to the defendant In their Complaint, petitioners never alleged that the Subject Property was part of the public domain. On the contrary, petitioners asserted title over the Subject Property by virtue of their actual, physical, open, continuous and adverse possession thereof, in the concept of owners, by themselves and through their predecessors-in-interest, since time immemorial. The Deeds of Assignment executed in their favor and attached to their Complaint referred to a Spanish title granted by the Queen of Spain to their predecessor-in-interest, Don Hermogenes Rodriguez. Clearly, petitioners are asserting private title over the Subject Property, and consequently, their action could not be one for reversion. In their instant Petition, petitioners further averred that rather than an action for nullity of respondents certificates of title, theirs was more appropriately an action to remove a cloud on or to quiet their title over the Subject Property. Even

as this Court agrees with the petitioners that their action was one for removal of a cloud on or quieting of title, it does arrive at the same conclusion as the trial court and the Court of Appeals that 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. According to Article 477 of the Civil Code, the plaintiff, in an action to remove a cloud on or to quiet title, 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 in their Complaint that they had 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. Title to real property refers to that upon which ownership is based. In their Complaint, petitioners claimed title to the Subject Property by virtue of their actual and continuous possession of the same since time immemorial, by themselves and through their predecessors-in-interest. There existed a contradiction when petitioners based their claim of title to the Subject Property on their possession thereof since time immemorial, and at the same time, on the Spanish title granted to Don Hermogenes Rodriguez. Possession since time immemorial carried the presumption that the land had never been part of the public domain or that it had been private property even before the Spanish conquest.If the Subject Property was already private property before the Spanish conquest, then it would have been beyond the power of the Queen of Spain to award or grant to anyone. The title to and possession of the Subject Property by petitioners predecessors-ininterest could be traced only as far back as the Spanish title of Don Hermogenes Rodriguez. Petitioners, having acquired portions of the Subject Property by assignment, could acquire no better title to the said portions than their predecessorsin-interest, and hence, their title can only be based on the same Spanish title. Absent any allegation in the petitioners' complaint that their predecessors-in-interest complied with P.D. No. 892, that it could be assumed that they failed to do so. Since they failed to comply with P.D. No. 892, then the successors of Don Hermogenes Rodriguez were already enjoined from presenting the Spanish title as proof of their ownership of the property in registration proceedings. Because of the inherent weakness of a Spanish title, the applicant for registration of the same under the Torrens system must also show proof of actual possession of the real property, in order to discount the possibility that someone else has acquired better title to the property by virtue of prescription. Therefore, the fact that petitioners were in actual possession of the Subject Property when they filed the Complaint with the trial court on 29 April 1996 does not exclude them from the application of P.D. No. 892, and their Spanish title remains inadmissible as evidence of their ownership of the Subject Property, whether in a land registration proceeding or in an action to remove a cloud on or to quiet title. Petitioners failed to allege any other basis for their titles in the Complaint, aside from possession since time immemorial, which the Court had already controverted; and Spanish title, which is ineffective to prove ownership of the property. As such, without legal or equitable title to the Subject Property, the petitioners lacked the personality to file an action for removal of a cloud on, or quieting of, title and their Complaint was properly dismissed for failing to state a cause of action. In view

of the dismissal of the case on this ground, it is already unnecessary for this Court to address the issue of prescription of the action. The SC affirms the decision of the CA and RTC. The complaint is dismissed.

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