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2013

RULE 2

FROM the Course outline of Atty. Suarez 2 MANRESA & SANCHEZ ROMAN 2013

RULE 2

RULE 2.01
CABUTIHAN vs LANDCENTER/SEREDRICA FACTS: Landcenter Construction & Development Corporation sought to recover a parcel of land located in Kay-biga, Paranaque, Metro Manila from the squatters occupying it. They hired Rebecca Cabutihan to facilitate and arrange the recovery and as compensation she will receive 20% of the 107, 047 square meter lot. A deed of assignment was executed. Cabutihan filed with the RTC of Pasig City an action for specific performance alleging that she had complied with her undertakings and that despite repeated demands there was failure on the part of Landcenter to fulfill their obligation to compensate her. Landcenter filed a motion to dismiss on the ground that since her primary objective was to recover real property -- even though her Complaint was for specific performance and damages -- her action should have been instituted in the trial court where the property was situated. ISSUE: Whether or not Cabutihan has filed a proper cause of action filed in the proper court? HELD: Yes. We agree with petitioner. Sections 1 and 2, Rule 4 of the Rules of Court provide an answer to the issue of venue. Actions affecting title to or possession of real property or an interest therein (real actions), shall be commenced and tried in the proper court that has territorial jurisdiction over the area where the real property is situated. On the other hand, all other actions, (personal actions) shall be commenced and tried in the proper courts where the plaintiff or any of the principal plaintiffs resides or where the defendant or any of the principal defendants resides. In the present case, petitioner seeks payment of her services in accordance with the undertaking the parties signed. Breach of contract gives rise to a cause of action for specific performance or for rescission. If petitioner had filed an action in rem for the conveyance of real property, the dismissal of the case would have been proper on the ground of lack of cause of action. JOSE vs BOYON/SOLANO FACTS: Joses lodged a complaint before the RTC for specific performance against Boyons to compel them to facilitate the transfer of ownership of a parcel of land subject of a controverted sale. RTC issued summons to the Boyons. The service of summon did not materialize because the Boyons could not be found in their address. Meanwhile, Joses filed before the trial court an Ex-parte Motion for Leave of Court to Effect Summons by Publication which was granted. Boyons were held in default. Boyons, who were residing in US, were surprised of the resolution of the court and filed a motion questioning the validity of the service of summon effected by the court a quo. Joses alleged that although the action filed was denominated as action for specific performance, it was a quasi in rem because it involves a parcel of land. They further argue that in action quasi in rem involving ownership of land, it is enough that the Court has jurisdiction over the res. Thus, the summon by publication is sufficient. Boyons averred that an action for specific performance is an action in personam. As such, summon by publication is insufficient to acquire jurisdiction over their persons. ISSUE: Whether the action for specific performance is personam or quasi in rem? RULING:It must be noted that extraterritorial service of summons or summons by publication applies only when the action is in rem or quasi in rem. The first is an action against the thing itself

instead of against the defendants person; in the latter, an individ ual is named as defendant, and the purpose is to subject that individuals interest in a piece of property to the obligation or loan burdening it. In the instant case, what was filed before the trial court was an action for specific performance directed against respondents. While the suit incidentally involved a piece of land, the ownership or possession thereof was not put in issue, since they did not assert any interest or right over it. Moreover, the SC has consistently declared that an action for specific performance is an action in personam.

HEIRS of TUAZON vs CA/SY Facts:The heirs of Tuazon here was granted by the RTC Branch 71 of Antipolo Rizal the issuance of a 2nd owner's duplicate of title - in lieu of the lost copy. Victorio et al now filed with the RTC Brance 74 an action for quieting of title and nullification and cancellation of title. Praying that an order be issued to cancel the owner's duplicate issued pursuant to the order of Branch 71. The Heirs of Tuazon averred that Victorio et al had no cause of action to file the case with Branch 74 since the prayer was allegedly to annul the judgment of Branch 71 and hence the proper jurisdiction is with the CA because a court of co-equal jurisdiction cannot annul the said judgment. Hence, the case should be dismissed. RTC: Refused to dismiss. Issue: W/N Victorio et al has a cause of action? Yes! Held: SC ruled that Victorio et al here has a cause of action under Art 476 of the Civil Code - which is for quieting of title. In this case, Victorio et al seeks the removal of the cloud and the affirmation of his ownership over the subject property. Hence, in determining whether there was a cause of action, it is not the requisites for a cause of action that should be considered but the requisites under Art 476 for quieting of title. Here, although relative to the primary relief sought by Victorio et al was for the cancellation of the new title issued to Heirs of Tuazon by virtue of the order of Branch 71, still, Victorio et al's petition before Branch 74 marks out a case for quiting of title, nullification and cancellation of title and not a mere annulment of a final order of the RTC. Furthermore, in this case, what was filed with the RTC was a real action since it affect title or possession of real property which jurisdiction is clearly with the RTC, and not to the CA. DOMAGAS vs JENSEN/TAUTHO FACTS: Filomena Domagas filed a complaint for forcible entry against Vivian Jensen. However, the complaint and summons were not served on her because she was outside the country and was instead received by her brother who was in the subject premises. The MTC rendered a decision in favour of Domagas. On the following year, Jensen filed a complaint against Domagas before the RTC for the nullification of the decision of the MTC contending that the MTC never acquired jurisdiction on her person because she was outside the country and the service of complaint and summons through substituted service on her brother was improper. The RTC rendered a decision in favour of Jensen and nullified the decision of the MTC. The CA affirmed the decision and ruled that the complaint of Domagas was one for ejectment, which is an action quasi in rem thus the summons and complaint should have been via extraterritorial service under Section 15 in relation to section 16, Rule 14 of the Rules of Court. ISSUE: WON the action of Domagas in the MTC is an action quasi in rem or an action in personam

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HELD: AN ACTION IN PERSONAM, a proceeding in personam is a proceeding to enforce personal rights and obligations brought against the person and is based on the jurisdiction of the person, although it may involved his right to, or exercise of ownership of, specific property, or seek to compel him to control or dispose of it in accordance with the mandate of the court. On the other hand, a proceeding quasi in rem is one brought against persons seeking to subject the property of such persons to the discharge of the claims assailed. Actions quasi in rem deal with the status, ownership or liability of a particular property but which are intended to operate on these questions only as between the particular parties to the proceedings and not to ascertain or cut off the rights or interests of all possible claimants. The judgments therein are binding only upon the parties who joined in the action. In the case at bar, the action of forcible entry is a real action and in personam because the plaintiff seeks to enforce a personal obligation or liability on the defendant under Article 539 of the New Civil Code, for the latter to vacate the property subject of the action, restore physical possession to the plaintiff, and pay actual damages by way of reasonable compensation for his use or occupation of the property. PORTIC vs CRISTOBAL/UY

other hand, in an action to enforce a foreign judgment, the matter left for proof is the foreign judgment itself, and not the facts from which it prescinds. From the lecture of Atty. Suarez: The allegation here of the Marcos estate is that in the enforcement case, the Mijares did not state a cause of action against the Marcos estate, the right, the obligation, the violation and the damages. The SC said that this is not a civil action that you need to prove all these things. This is already a judgment rendered and the proof was already presented in the US court and therefore to establish a cause of action for enforcement of foreign judgment, you dont have to list down the four elements. It is enough that you have the valid judgment. You prove the authenticity and the validity of the judgment itself. The cause of action is not the violation of a right but from the foreign judgment itself. Therefore there are certain cases like an enforcement of a foreign judgment that one doesnt have to state the elements of a cause of action. BIACO vs PCRB/ALABASTRO

MIJARES vs RANADA/YAP FACTS: This case involves an institution of a class action suit filed by the Mijares before the United States Court against the estate of former Philippine President Marcos. Mijares et al in this case alleged having suffered human rights abuses in the hands of military forces during the Marcos regime. Subsequently, the US District Court rendered a final judgment awarding Mijares et al One Billion Nine Hundred Sixty Four Million Five Thousand Eight Hundred Fifty Nine Dollars and Ninety Cents ($1,964,005,859.90). Now, the Mijares et al then filed a complaint with the RTC of Makati for the enforcement of the final judgement rendered by the US District Court awarding to them One Billion Nine Hundred Sixty Four Million Five Thousand Eight Hundred Fifty Nine Dollars and Ninety Cents ($1,964,005,859.90) against the estate of Marcos. ISSUE: Is there a need for a complaint in an enforcement case of a judgment already rendered by a foreign court to contain the elements of a cause of action as required in a civil case? No! HELD: The rules are silent as to what initiatory procedure must be undertaken in order to enforce a foreign judgment in the Philippines. But there is no question that the filing of a civil complaint is an appropriate measure for such purpose. A civil action is one by which a party sues another for the enforcement or protection of a right, and clearly an action to enforce a foreign judgment is in essence a vindication of a right prescinding either from a conclusive judgment upon title or the presumptive evidence of a right. Absent perhaps a statutory grant of jurisdiction to a quasi-judicial body, the claim for enforcement of judgment must be brought before the regular courts. There are distinctions, nuanced but discernible, between the cause of action arising from the enforcement of a foreign judgment, and that arising from the facts or allegations that occasioned the foreign judgment. They may pertain to the same set of facts, but there is an essential difference in the right-duty correlatives that are sought to be vindicated. For example, in a complaint for damages against a tortfeasor, the cause of action emanates from the violation of the right of the complainant through the act or omission of the respondent. On the other hand, in a complaint for the enforcement of a foreign judgment awarding damages from the same tortfeasor, for the violation of the same right through the same manner of action, the cause of action derives not from the tortious act but from the foreign judgment itself. More importantly, the matters for proof are different. Using the above example, the complainant will have to establish before the court the tortious act or omission committed by the tortfeasor, who in turn is allowed to rebut these factual allegations or prove extenuating circumstances. Extensive litigation is thus conducted on the facts, and from there the right to and amount of damages are assessed. On the

FACTS: Ernesto Biaco is the husband of Biaco Ma. Teresa Chaves Biaco. Ernesto obtained several loans from Philippine Countryside Rural Bank. As security for the payment of the said loans, Ernesto executed a real estate mortgage in favor of the bank covering a certain parcel of land and these mortgages were signed by Ernesto and his wife. Having failed to pay these loans when they became due, PRCB sent him a written demand to the amount of P1,080,676.50. This demand, however, remained unheeded. Ernesto received the summons but for unknown reasons, he failed to file an answer. Hence, the spouses Biaco were declared in default. As hearing ensued, the sheriff personally served the adverse judgment to Ernesto Biaco at his office. The Spouses Biaco did nothing until such time that the mortgaged lot was later on sold at a public auction. Since the proceeds thereof were insufficient the Trial Court rendered judgment against the spouses Biaco, levying other properties owned by them to pay their remaining obligation in the amount of P1,369,974.70. This is what prompted Ma. Teresa Biaco, Ernestos wife, to seek the annulment of the Regional Trial Court decision contending, among others, that the trial court failed to acquire jurisdiction because summons were served upon her through her husband without any explanation as to why personal service could not be made. With regard the validity of the service of summons, the appellate court ruled that judicial foreclosure proceedings are actions quasi in rem. As such, jurisdiction over the person of the defendant is not essential as long as the court acquires jurisdiction over the res. Upon reaching the SC, Biaco asserts that even if the action is quasi in rem,personal service of summons is essential in order to afford her due process. The substituted service made by the sheriff to her husband cannot be deemed proper service absent any explanation that efforts had been made to personally serve summons upon her but that such efforts failed. On the other hand, PCRB avers that service of summons upon the defendant is not necessary in actions quasi in rem it being sufficient that the court acquire jurisdiction over the res. ISSUE: Are judicial foreclosure proceedings actions quasi in rem? Yes. HELD: Kinds of actions: 1. An action in personam is an action against a person on the basis of his personal liability. a. In an action in personam, jurisdiction over the person of the defendant is necessary for the court to validly try and decide the case. 2. An action in rem is an action against the thing itself instead of against the person.

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3. An action quasi in rem is one wherein an individual is named as defendant and the purpose of the proceeding is to subject his interest therein to the obligation or lien burdening the property. a. In both proceedings in rem or quasi in rem, jurisdiction over the person of the defendant is not a prerequisite to confer jurisdiction on the court provided that the court acquires jurisdiction over the res, thru: i. the seizure of the property under legal process, whereby it is brought into actual custody of the law ii. as a result of the institution of legal proceedings, in which the power of the court is recognized and made effective In the case at bar, a judicial foreclosure proceeding is an action quasi in rem, as such, this proceeding instituted by PCRB undoubtedly vested the trial court with jurisdiction over the res. Therefore, jurisdiction over the person of Biaco is not required to confer jurisdiction on the court, it being sufficient that the trial court is vested with jurisdiction over the subject matter. What is the effect of the lack of service of summons to the jurisdiction of the trial court? Since the trial court acquired jurisdiction over the res, its jurisdiction is limited to a rendition of judgment ONLY on the res. El Banco Espaol-Filipino v. Palanca, foreclosure and attachment proceedings are both actions quasi in rem. As such, jurisdiction over the person of the (non-resident) defendant is not essential. Service of summons on a non-resident defendant who is not found in the country is required, not for purposes of physically acquiring jurisdiction over his person but simply in pursuance of the requirements of fair play, so that: 1. he may be informed of: a. the pendency of the action against him and b. the possibility that property belonging to him or in which he has an interest may be subjected to a judgment in favor of another, and that 2. he may thereby be accorded an opportunity to defend in the action, should he be so minded. De Midgely v. Ferandos, et. al. and Perkins v. Dizon, et al, in a proceedingin rem or quasi in rem, the ONLY relief that may be granted by the court against a defendant over whose person it has not acquired jurisdiction is limited to those over the res. In this case, the trial court cannot extend its jurisdiction beyond the res and issue a judgment enforcing Biacos personal liability. In doing so without first having acquired jurisdiction over the person of Biaco, and merely serving the summons to her husband Ernesto: 1. the trial court violated her constitutional right to due process which, in effect, 2. will warrant the annulment of the judgment rendered in the case.

(3) the act or omission of the defendant in violation of said legal right. If these elements are absent, the complaint becomes vulnerable to dismissal on the ground of failure to state a cause of action. If a defendant moves to dismiss the complaint on the ground of lack of cause of action, he is regarded as having hypothetically admitted all the averments thereof. The test of sufficiency of the facts found in a complaint as constituting a cause of action is whether or not admitting the facts alleged, the court can render a valid judgment upon the same in accordance with the prayer thereof. The hypothetical admission extends to the relevant and material facts well pleaded in the complaint and inferences fairly deducible therefrom. Hence, if the allegations in the complaint furnish sufficient basis by which the complaint can be maintained, the same should not be dismissed regardless of the defense that may be assessed by the defendant. In the case at bar, there is no question that the petition asserts a right in favor of Campos (as to the IPOs) and the correlative obligation of MKSE to respect Campos right. However, the terms right and obligation are not magic words that would automatically lead to the conclusion that such petition sufficiently states a cause of action. Rights and obligation are legal terms with specific legal meaning. A right is a claim or title to an interest in anything whatsoever that is enforceable by law. An obligation is defined in the Civil Code as a juridical necessity to give, to do or not to do. Art. 1157. Obligations arise from: (1) Law; (2) Contracts; (3) Quasi-contracts; (4) Acts or omissions punished by law; and (5) Quasi-delicts. Therefore, an obligation imposed on a person, and the corresponding right granted to another, must be rooted in at least one of these five sources. In the case at bar, the petition utterly failed to lay down the source or basis of respondents right or petitioners obligation. A review of the petition reveals that the allocation of IPO shares was merely alleged to have been done in accord with a practice normally observed by the members of the stock exchange. A practice as a general rule, is not a source of a legally demandable or enforceable right. There is nothing in the petition that Campos, by virtue of his position as Chairman Emeritus of MKSE, was granted by law, contract, or any other legal source, the right to subscribe to the IPOs. Since Campos failed to establish the basis or authority for his alleged right to the IPO shares, his petition is dismissed.

RULE 2.02
ALBERTO vs CA/ANIMA

MAKATI STOCK EXCHANGE vs CAMPOS/ALVAR FACTS: FACTS: Campos was a member and Chairman Emeritus of MKSE (Makati Stock Exchange). He has always enjoyed the right given to all other members to get IPO shares (Initial Public Offerings). However, the Board of Directors of MKSE passed a resolution to stop giving Campos the IPOs he is entitled to. This prompted Campos to file a petition before the SEC, asking for the nullification of the resolution, delivery of IPO shares, and payment of damages. MKSE filed a motion to dismiss on the ground that the petition failed to state a cause of action. Campos on the other hand, insists on the sufficiency of the petition and seeks the continuation of the proceedings. ISSUE: W/N the petition failed to state a cause of action YES HELD: A cause of action is the act or omission by which a party violates a right of another. A complaint states a cause of action where it contains three essential elements of a cause of action, namely: (1) the legal right of the plaintiff, (2) the correlative obligation of the defendant, and

Spouses Alano retained the legal services of Atty. Alberto to represent them before the securities and Exchange Commission. In their retainer agreement, the spouses will pay Atty. Alberto on a contingent basis which is the equivalent in kind of whatever real estate that may be awarded. However, Atty. Alberto learned that the spouses moved to dismiss the SEC case during the pendency of the case, the opposing parties reached a settlement without consulting her. When confronted, the spouses admitted that they are expected to receive 35 hectares of land. So, Atty. Alberto demanded payment but the spouses refused, thus she filed a complaint for collection of sum of money against the spouses which the RTC granted. However, upon the Sheriffs return, only P3, 500 of personal properties were levied. Apparently, Natalia realty sold to the spouses daughter Yolanda a little over 23 hectares out of the 32.4 hectares given.

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This prompted Atty. Alberto to file a second amended complaint to declare the sale null and void. The RTC and CA dismissed the complaint for insufficiency of cause of action since Atty. Alberto is not a party to the sale and Yolanda is not a party to the retainer agreement. ISSUE: Whether or not Atty. Albertos complaint sufficiently state a cause of action. HELD: YES! In Paraaque Kings vs. Court of Appeals the Supreme Court held that: to determine the sufficiency of a cause of action, only the facts alleged in the complaint and no other should be considered; and that the test of sufficiency of facts alleged in a petition or complaint to constitute a cause of action is whether, admitting the facts alleged, the court could render a valid judgment upon the same in accordance with the prayerof the petition or complaint. A cause of action exists if the following elements are present.

1. 2. 3.

1. A right in favor of the plaintiff by whatever means and under whatever law it arises or is created. 2. An obligation of the part of the named defendant to respect or not to violate such right; and 3. An act or omission on the part of such defendant violate of the right of plaintiff for which the latter may maintain an action for recovery or damages.

All 3 elements are present in the case at bar. The sufficiency of Atty. Albertos cause of action in the second amended complaint is readily apparent. A right in her favor was created by a virtue of the retainer agreement executed between her and the spouses. Correspondingly, the spouses had the obligation to honor and not to violate the provisions of the retainer agreement. Unfortunately, the spouses breached their obligation under the retainer agreement when they refused and failed to pay Atty. Albertos attorneys fees in accordance with their agreement. Worse, when Atty. Alberto moved for the issuance of a writ of execution, she discovered that the spouses had no more leviableproperties except a few personal properties amounting to only P3, 500. In fact, by virtue of the sale of Yolanda, Atty. Alberto not only had a cause of action against the spouses but likewise, against Yolanda. Clearly, all these instances which were alleged and enumerated in the second amended complaint constitute a sufficient cause of action on the part of Atty. Alberto. CHU vs CUNANAN/ARAFOL FACTS:Spouses Chu and Trinidad Cunana entered into a deed of sale with assumption of mortgage. Since Trinidad cunanan was not able to pay the price due and subsequently without the knowledge of Spouses Chu, the latter instituted a civil case of recovery against Canunan. 5 years thereafter chu amended the complaint to seek for annulment of the deed of sale with assumption of mortgage. However, the parties herein entered into a comprise agreement which was duly approved by the RTC. Stipulated under the Compromise agreement whereby the Cunanans transferred to the Chus their 50% share in all the parcels of land situated in Saguin, San Fernando, Pampanga registered in the name of Cool Town Realty( 3 out of 5 parcels of land) for and in consideration of the full settlement of their case. Thereafter the, spouses brought another civil case seeking the cancellation of the TCT and impleaded cunanan as defendant. ISSUE: WON there is a splitting of a single cause of action SC HELD: Yesyesyoh! To limit the compromise agreement only to the three lots mentioned therein would contravene the avowed objective of Civil Case No. G-1936 to enforce or to rescind the entire deed of sale with assumption of mortgage. Such interpretation is akin to saying that the Cunanans separately sold the five lots, which is not the truth. For

one, Civil Case No. G-1936 did not demand separate amounts for each of the purchased lots. Also, the compromise agreement did not state that the value being thereby transferred to the petitioners by the Cunanans corresponded only to that of thethree lots. Apparently, the petitioners were guilty of splitting their single cause of action to enforce or rescind the deed of sale with assumption of mortgage. Splitting a single cause of action is the act of dividing a single or indivisible cause of action into several parts or claims and instituting two or more actions upon them.[26] A single cause of action or entire claim or demand cannot be split up or divided in order to be made the subject of two or more different actions. [27] Thus, Section 4, Rule 2 of the Rules of Court expressly prohibits splitting of a single cause of action, viz: Section 4. Splitting a single cause of action; effect of. If two or more suits are instituted on the basis of the same cause of action, the filing of one or a judgment upon the merits in any one is available as a ground for the dismissal of the others. (4a) The petitioners were not at liberty to split their demand to enforce or rescind the deed of sale with assumption of mortgage and to prosecute piecemeal or present only a portion of the grounds upon which a special relief was sought under the deed of sale with assumption of mortgage, and then to leave the rest to be presented in another suit; otherwise, there would be no end to litigation.[28] Their splitting violated the policy against multiplicity of suits, whose primary objective was to avoid unduly burdening the dockets of the courts. Their contravention of the policy merited the dismissal of Civil Case No. 12251 on the ground of bar by res judicata.

ZEPADA vs CHINA BANK/BAJENTING FACTS: Spouses Expedito and Alice Zepeda filed a complaint for nullification of foreclosure proceedings and loan documents with damages against Chinabank before the RTC. They alleged that on June 1995, they obtained a loan from Chinabank secured by a Real Estate Mortgage over a parcel of land. Spouses Zepeda subsequently encountered difficulties in paying their loan obligations hence they requested for restructuring which was allegedly granted by Chinabank. Hence, they were surprised when Chinabank extrajudicially foreclosed the subject property on October 2001 where it emerged as the highest bidder. Chinabank was issued a Provisional Certificate of Sale and upon the spouses failure to redeem the property, ownership was consolidated in its favor. Furthermore, spouses Zepeda allege that the foreclosure proceedings should be annulled for failure to comply with the posting and publication requirements. Chinabank filed a motion to dismiss the complaint, which the trial court denied. On appeal, the CA ruled that compelling reasons warrant the dismissal of the complaint, one of which is that the complaint states no cause of action. CA ruled that the complaint failed to state a cause of action because the spouses admitted that they failed to redeem the property and that ownership of the same was consolidated in the name of Chinabank. ISSUE: WON the complaint states a cause of action. YES HELD: A cause of action is a formal statement of the operative facts that give rise to a remedial right. The question of whether the complaint states a cause of action is determined by its averments regarding the acts committed by the defendant. Thus it "must contain a concise statement of the ultimate or essential facts constituting the plaintiffs cause of action." Failure to make a sufficient allegation of a cause of action in the complaint "warrants its dismissal."

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As defined in Section 2, Rule 2 of the Rules of Court, a cause of action is the act or omission by which a party violates the right of another. Its essential elements are as follows: 1. A right in favor of the plaintiff by whatever means and under whatever law it arises or is created; 2. An obligation on the part of the named defendant to respect or not to violate such right; and 3. Act or omission on the part of such defendant in violation of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages or other appropriate relief. It is, thus, only upon the occurrence of the last element that a cause of action arises, giving the plaintiff the right to maintain an action in court for recovery of damages or other appropriate relief. In determining whether an initiatory pleading states a cause of action, "the test is as follows: admitting the truth of the facts alleged, can the court render a valid judgment in accordance with the prayer?" To be taken into account are only the material allegations in the complaint; extraneous facts and circumstances or other matters somewhere else are not considered. The court may consider in addition to the complaint the appended annexes or documents, other pleadings of the plaintiff, or admissions in the records. In the instant case, spouses Zepeda specifically alleged that Chinabank acted in bad faith when it extrajudicially foreclosed the mortgaged property notwithstanding the approval of the restructuring of their loan obligation. They claimed that with such approval, Chinabank made them believe that foreclosure would be held in abeyance. They also alleged that the proceeding was conducted without complying with the posting and publication requirements. Assuming these allegations to be true, spouses Zepeda can validly seek the nullification of the foreclosure since the alleged restructuring of their debt would effectively modify the terms of the original loan obligations and accordingly supersede the original mortgage thus making the subsequent foreclosure void. Similarly, the allegation of lack of notice if subsequently proven renders the foreclosure a nullity in line with prevailing jurisprudence. Therefore, the allegations in the complaint are sufficient to establish a cause of action for nullifying the foreclosure of the mortgaged property. The fact that the spouses admitted that they failed to redeem the property and that the title was consolidated in Chinabanks name did not preclude them from seeking to nullify the extrajudicial foreclosure.

alleged in the complaint as constituting a cause of action is whether or not admitting the facts alleged, the court could render a valid verdict in accordance with the prayer of the complaint.[14] That in determining sufficiency of cause of action, the court takes into account only the material allegations of the complaint and no other, is not a hard and fast rule. In some cases, the court considers the documents attached to the complaint to truly determine sufficiency of cause of action.[15] We have ruled that a complaint should not be dismissed for insufficiency of cause of action if it appears clearly from the complaint and its attachments that the plaintiff is entitled to relief.[16] The converse is also true. The complaint may be dismissed for lack of cause of action if it is obvious from the complaint and its annexes that the plaintiff is not entitled to any relief. In this case, we note that annexed to the subject complaint are the three contracts governing the rights and obligations between petitioner and respondent, namely the contract for civil structure and architecture, the contract for plumbing and fire protection, and the contract for millworks. Records show that recurring in each of the said contracts is the provision that payment by petitioner shall be subject to its timely receipt of similar payments from Fil-Estate. The said provision, found in each of the aforesaid contracts, is quoted below: On the face of the said attached contracts, which define and delimit the rights and obligations of the parties, clearly require a specific condition before petitioner may be held liable for payment. The complaint, however, failed to state that the said condition had been fulfilled. Without the said condition having taken place, petitioner cannot be said to have breached its obligation to pay. We thus hold that respondents complaint, taken with the contracts annexed to it, failed to pass the test of sufficiency of cause of action. Thus, the said complaint should have been dismissed on the ground of failure to state a cause of action.

PERKINS vs DAKILA/LUMANAG FACTS:Perkins a foreign corporation engage in the selling of scientific and analytical materials and appliances. While Dakila a domestic corporation. Dakila filed a casefor recovery of sum of money with damages against Perkins. Dakila alleged that in 1990 it entered into a distribution agreement with Perkins. The agreement grants Dakila the right to be the exclusive distributor of Perkins products in the Philippines. But in 1997 Perkins unilaterally terminated the contract. Perkins filed a motion to dismiss, one of its ground was failure to state cause f action in the complaint. RTC denied Perkins' motion CA affirmed it hence this petition ISSUE: WON THE COMPLAINT SUFFICIENTLY STATES CAUSE OF ACTION HELD: YES to establish that there is cause of action it is sufficient that the right obligation and the violation is alleged in the complaint. in the herein case the complaint clearly and sufficiently states the cause of action.further, the elements are present in the complaint plaintiff rights- Dakila's right to be the sole distributor of Perkins' product under the agreement Obligation of defendant- Perkins to respect the said agreement Violation of Plaintiff's right- Unilaterally terminated the contract. therefore since the complaint contains the elements of cause of action, it should not be dismissed and the rtc and ca correctly ruled the denial of Perkins motion to dismiss.

FLUOR DANIEL vs EB VILLAROSA/BASADRE FACTS: Daniel entered into an agreement with Fil-Estate for the construction of a resort. Daniel then engaged the services of Vilarosa for the project. However, Fil-Estate failed to satisfy Daniel the progress billings. The project was suspended and Daniel failed to pay Villarosa. Villarosa demanded payment from Daniel failed to pay and believing it was in bad faith, Villarosa filed a complaint for sum of money and damages against Daniel before the RTC of Makati. Daniel filed a motion to dismiss on the ground that the complaint failed to state a cause of action. ISSUE 1: WON the complaint sufficiently states a cause of action? NO. ISSUE 2: WON the annexes attached to the complaint should be considered in determining WON Villarosas complaint sufficiently stated a cause of action. YES. HELD: The essential elements of a cause of action are as follows: 1) A right in favor of the plaintiff by whatever means and under whatever law it arises or is created; 2) An obligation on the part of the defendant not to violate such right; and 3) An act or omission on the part of the defendant in violation of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages or other relief.[12] It is, thus, only upon the occurrence of the last element that a cause of action arises, giving the plaintiff a right to file an action in court for recovery of damages or other relief.[13] The test of sufficiency of facts

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PIONEER vs GUADIZ/CAMELLO FACTS: Pioneer engaged the services of Todaro to manage the operation of its ready-mix and concrete aggregate business in the Phils. It was aggreed by them that Todaro will initially be employed as a consultant and in the event that pioneer decides to establish its principal business in the phils, the latter will employ Todaro on a permanent basis. However, when pioneer eventually decided to establish its principal business in the Phils, it did not permanently employ todaro; worse, it terminated his services. Todaro filed for collection of sum of money and damages based on culpa contractual and on the provisions of human relations, specifically art 19 and 21 (Torts). Pioneer filed a motion to dismiss contending that the complaint filed by Todaro stated no cause of action because there was no valid and preexisiting contractual relation between them. ISSUE: WON the complaint filed by Todaro against Pioneer stated a viable cause of action. YES HELD: The allegations in the complaint stated two causes of action one for culpa contractual and the other one based on tort. For a cause of action to exist, all its elements must be present. In this case, all the elements for a cause of action exist. 1. right pertaining to the plaintiff - right of Todaro under the contract to be employed permanently in the event pioneer decides to invest in the phils. 2. Obligation of the defendant not to violate such right obligation of pioneer to comply with what has been stipulated in the contract. Also, pioneer has an obligation to comply with the law on human relations to act with justice, give Todaro his due and observe honesty and gf (Article 19 CC); obligation not to violate the rights of Todaro in a manner which is contract to morals, good customs, public policy (Article 21). 3. Violation of the plaintiffs right by the defendant giving rise to an action for damages Pioneer violated Todaros right when it breached the contract and when it committed a tort. It must be emphasized that the main contention of Pioneer in its motion to dismiss the complaint for lack of cause of action dwells principally on the absence of pre-existing contractual relation between them. The SC said that WON the contention is true does not affect the presence of a cause of action, especially as in this case where the allegations in the complaint are sufficient to establish the same. The SC was clear that the test to determine WON a motion to dismiss a complaint for lack of cause of action is meritorious depends on the strength of the allegations contained in the complaint and not on the veracity thereof. The reason is that, in resolving a motion to dismiss for lack of cause of action, the court cannot look beyond what is provided in the complaint. WON the allegations stated in the complaint are true is examined, not in resolving a motion to dismiss, but during trial on the merits. Nevertheless, the court ruled that assuming arguendo that there was indeed no perfected contract between Pioneer and Guadiz, the complaint still stated a viable cause of action for Tort, which does not require the presence of a pre-exisiting contractual relation. FACTS:

DOLLETON vs FIL-ESTATE/CANADA

Heirs of Dolleton et.al filed a complaint for recovery of possession and damages among others against Fil-estate alleging that the latter through force and intimidation ejected them from the property, which they were occupying for more than 90 years through their predecessors in-interest. Fil-estate on the other hand move to dismiss the case on the ground that the complaints failed to sufficiently state a cause of action, reasoning that they have registered the properties and titles were already issued by ROD of Las Pinas in their names. ISSUE: WON the complaints sufficiently stated a cause of action HELD: Yes. Section 2, Rule 2 of the Rules of Civil Procedure defines a cause of action as the act or omission by which a party violates the right of another. Its essential elements are as follows: a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; an obligation on the part of the named defendant to respect or not to violate such right; and an act or omission on the part of such defendant in violation of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff, for which the latter may maintain an action for recovery of damages or other appropriate relief.

The elementary test for failure to state a cause of action is whether the complaint alleges facts which if true would justify the relief demanded. The inquiry is into the sufficiency, not the veracity, of the material allegations. If the allegations in the complaint furnish sufficient basis on which it can be maintained, it should not be dismissed regardless of the defense that may be presented by the defendant. This Court is convinced that each of the Complaints filed by petitioners sufficiently stated a cause of action. The Complaints alleged that petitioners are the owners of the subject properties by acquisitive prescription. As owners thereof, they have the right to remain in peaceful possession of the said properties and, if deprived thereof, they may recover the same. Section 428 of the Civil Code provides that: Article 428. The owner has the right to enjoy and dispose of a thing without other limitations than those established by law. The owner has also a right of action against the holder and possessor of the thing in order to recover it.Petitioners averred that respondents had violated their rights as owner of the subject properties by evicting the former therefrom by means of force and intimidation. Respondents allegedly retained possession of the subject properties by invoking certificates of title covering other parcels of land. Resultantly, petitioners filed the cases before the RTC in order to recover possession of the subject properties, to prevent respondents from using their TCTs to defeat petitioners rights of ownership and possession over said subject properties, and to claim damages and other reliefs that the court may deem just and equitable. FORT DEVELOPMENT vs CASTRO/CEBALLO

SANTIAGO vs ONG/CERBO FACTS: This is an action for annulment of titles, injunction, damages and restraining order. Plaintiffs, the heirs of Jose G. Santiago, allege in their Complaint that their father and his brother Juan G. Santiago, both deceased, were registered co-owners of a parcel of land containing an area of 31,853 square meters located at Catmon, Sta. Maria, Bulacan, That on May 26, 1992, Juan Santiago, while confined at the Chinese General Hospital, Intensive Care Unit, allegedly sold a portion of the above lot, measuring 10,926 square meters, to a two (2) year old child Mark Vincent Ong with the participation of defendant Aurea Santiago,

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Juans wife, as evidenced by a Deed of Sale over a Portion of Land, dated May 26, 1992. Both signatures of the latter in the said two (2) documents, according to plaintiffs, were spurious, forged and falsified by defendants who stood to benefit from it. Defendants Vicente Ong and Mark Vincent Ong, father and son respectively, were able to secure a title over the disputed lot by virtue of the falsified deed of sale and a supposed Partition Agreement dated October 15, 1994 executed by Jose Santiago and Juan Santiago who were long deceased before said date, having died on May 25, 1990 and September 21, 1992, respectively. Later on, Aurea Santiago allegedly managed to obtain a title covering the remaining 20,927 square meters, Title No. T213216(M) issued on November 18, 1994 in the names of both Jose and Juan Santiago diminishing thereby the share of herein plaintiffs in the property. The Trial Courts Ruling In its Decision dated 30 September 1999, the trial court partly denied the petitioners claims. The trial court declared that Juan Santiago was well within his rights as a co-owner when he sold 10,926 square meters of the co-owned lot. Petitioners have no reason to complain or impugn the sale. Despite the allegations of forgery, the Ongs have in their favor the presumption of good faith in buying a portion of the co-owned lot. Vicente Ongs testimony that the late Juan Santiagos representatives carried out the documentation and registration of the property remained uncontradicted. The trial court decreed that TCT No. 213216(M) issued in the names of Juan and Jose Santiago has no legal basis. Petitioners are thus entitled to 15,000 square meters, more or less, or one-half of the 31,853 square meters of the subject property. The Ruling of the Appellate Court In its Decision promulgated on 14 November 2003, the appellate court affirmed the decision of the trial court. The appellate court declared that Juan Santiagos sale of an undivided portion consisting of 10,926 square meters of co-owned property remains valid. Petitioners are not the real parties in interest possessing the character of a contracting party, or of heirs or assigns of the vendor. Only the estate of Juan Santiago, to the exclusion of petitioners, stands to be benefited or injured by the decision in the present case. There is a lack of convincing and credible proof to support the allegations of fraud with respect to the Absolute Deed of Sale and the Affidavit of Non-Tenancy. There is also an absence of satisfactory evidence to dispute the apparent irregularity on the signatures of Juan and Jose Santiago on the subdivision, consolidation and partition agreement. ISSUE: The Issues Petitioners insist that they are the real parties in interest to bring the instant suit and that they have a cause of action against the respondents. Furthermore, petitioners assert that the Deed of Absolute Sale is void. Finally, the partition of the remaining portion of the lot cannot be done in accordance with the trial courts decision. RULING: The Ruling of the Court The petition has no merit. We see no reason to overturn the findings of fact of the trial and appellate courts. Therefore, we do not divert from their rulings. Petitioners are not real parties in interest and therefore have no cause of action in bringing the present case. A real party in interest is the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit.[6] A cause of action is the act or omission by which a party violates a right of another.[7] In the present case, there is no dispute that Juan Santiago owned half of the subject lot while the other half belonged to his brother Jose. Juan Santiago merely exercised his right when he sold a portion of his undivided half to Mark Vincent L. Ong. Petitioners question Juans transaction even though petitioners are neither parties to the contract nor heirs or assigns of Juan Santiago.[8] Juan Santiago left a probated will leaving all his properties to his wife Aurea, to the exclusion of petitioners. As heirs of Jose Santiago, co-owner of the subject property, petitioners may only question the sale if their right of preemption under the Civil Code of the Philippines[9] was disregarded, and they wish to exercise such right. However, petitioners do not seek to exercise the right of preemption. Thus, they are not real parties in interest in the present case. We likewise affirm the lower courts ruling on the validity of the Deed of Sale, even though petitioners have no personality to question the same before this Court. Apart from their allegations, petitioners failed to prove that Juan Santiago was incapacitated to contract at the time of the execution of the Deed of Sale. Finally, we affirm the lower courts ruling that TCT No. 213216(M) issued in the names of Jose and Juan Santiago be nullified and a new one issued to reflect the shares in the remaining portions of the subject property. The estate of Juan Santiago

can only claim 5,000 square meters, more or less, of the remaining 20,927 square meters of the subject property.

RULE 2.03-04
LAPANDAY vs ESPITA/CERVANTES

AGUSTIN vs MARIANO/CUABO FACTS: Delos Santos owns apartment units, one of which was occupied by Agustin by virtue of a verbal agreement and on a monthly basis. On May 2000, Delos Santos filed the first complaint for ejectment against Agustin on the ground of personal need of the premises. The case was dismissed by MTC holding that Delos Santos did not comply with the requirements under the law when the ground for ejectment is personal need of the premises. On October 2002, delos Santos filed the second ejectment case, this time the ground invoked by delos santos is the failure to vacate by Agustin despite Notice of termination of contract of lease and lapse of 30-day grace period. Agustin argued that the case should be dismissed on the ground that the first and second ejectment case filed against him has the same cause of action therefore the second ejectment case is barred by the filing and judgment of the first ejectment case. ISSUE: WON there is splitting of cause of action in this case that would warrant the dismissal of the second ejectment case? HELD: NO, the first and second cause of action are similar but not identical and that they did not exist simultaneously. SC held in this case that in unlawful detainer cases, the subject matter is the lease contract and the cause of action is the breach thereof. It should be noted that the lease contract entered into is on a monthly basis, that is, there is a new lease contract every lapse of 30 day period. Hence, there is no identity of Subject matter. Since there is no identity of subject matter between the two cases, it is but logical to conclude that there is likewise no identity of causes of action. A cause of action is the act or omission by which a party violates the legal right of the other. In the first action for ejectment, respondents cause of action consists of petitioners continued possession of the premises in violation of respondents' legal rights under the provisions of the amended Rent Control Act, which rights were deemed included into the lease contract existing at the time of the filing of the case in May 2000. On the other hand, the cause of action in the second suit only materialized when petitioner refused to vacate the premises despite receipt of the notice of termination of lease sent by respondents on October 10, 2002 and the expiration of the 30-day grace period given him. From that moment on, petitioners possession of the leased premises became unlawful and a new cause of action accrued. Hence, the cause of action in the present case for ejectment only arose subsequent to the dismissal of the first ejectment suit dated January 9, 2002. Therefore, while the causes of action in the first and second ejectment suits are similar in that both consist of unlawful possession by petitioner, they are not identical. Each act of refusal to vacate by petitionerone in May 2000 and another in October 2002 breached separate and distinct lease contractswhich consequently gave birth to separate and distinct causes of action. Petitioners contention that there is but one single cause of action in the two ejectment suits must perforce fail.

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YAP vs PDCP/DATUKON

RULE 2.05
FABRE vs CA/DIESTO FACTS: The minibus owned by Sps. Fabre and driven by Cabil met an accident sometime in Nov.2,1984. Amyline Antonio and other passengers got injured. Thus, they brought this case against sps. Fabre and Cabil for damages they have suffered. RTC ruled that sps. Fabre were solidarily liable with the driver Cabil, but only infavor of the fellowship and Amyline Antonio because they were the only ones who adduced evidence for their claim, to which the CA affirmed but only insofar as to Amyline Antonio's claim. ISSUE: WON there is joinder of causes of action in this case. RULING: Yes. SC held in a number of cases that it was permitted for plaintiffs to allege alternative causes of action and join as many parties as may be liable on such causes of action so long as the plaintiffs do not recover twice for the same injury. This is actually an illustration of condition 1, where there is a joinder of parties. As to passengers, they may join together in filing one complaint. As to the defendants, who were the bus owner and the driver they may be joined together for there is common question of fact and law arising from one transaction which is separate and distinct but it concurred to produce one injury. And finally, as to the cause of action which is breach of contract of carriage as the carrier(Art 2180) and quasi-delict(Art 2176) to the driver. (Note: Accdng sa lecture ni Ma'am ni ha, di man gud ni namention sa case, kanang nakahighlight ra naa didto, basta mao ni akong pagkasabot.)

FACTS: Sammy Yap obtained a loan from PDCP Development Bank, Inc. (PDCP). As security, Sammys parents, petitioners Simon Yap and Milagros Guevarra, executed a third-party mortgage on their land and warehouse. The mortgage agreement provided that PDCP may extrajudicially foreclose the property in case Sammy failed to pay the loan. Sammy issued a promissory note and six postdated checks in favor of PDCP as additional securities for the loan. When Sammy defaulted on the payment of his loan, PDCP presented the six checks to the drawee bank but the said checks were dishonored. This prompted PDCP to file a complaint against Sammy for six counts of violation of BP 22. PDCP filed an application for extrajudicial foreclosure of mortgage on the property of petitioners which served as principal security for Sammys loan. Petitioners filed in the RTC of San Carlos City, Pangasinan a complaint for injunction sought to stop the foreclosure sale on the ground that PDCP waived its right to foreclose the mortgage on their property when it filed the BP 22 cases against Sammy. Petitioners argue that, when Sammy was sued for six counts of violation of BP 22, PDCP should have been deemed to have simultaneously filed for collection of the amount represented by the checks. The civil aspect of the case was naturally an action for collection of Sammys obligation to PDCP. PDCP clearly elected a remedy. PDCP should not be allowed to pursue another, like foreclosure of mortgage. ISSUE: Is the case an example of a splitting a single cause of action? NO! Here the remedies are to be applied in alternative but the reliefs sought were not split. All the remedies may be availed of unless they are to be applied alternatively. Reliefs are not allowed to be split because it will violate section 3 of rule 2. SC HELD - So as not to create any misunderstanding, however, the point should be underscored that the creditors obvious purpose when it forecloses on mortgaged property is to obtain payment for a loan which the debtor is unable or unjustifiably refuses to pay. The rationale is the same if the creditor opts to sue the debtor for collection. Thus, it is but logical that a creditor who obtains a personal judgment against the debtor on a loan waives his right to foreclose on the mortgage securing the loan. Otherwise, the creditor becomes guilty of splitting a single cause of action for the debtors inability (or unjustified refusal) to pay his debt. Nemo debet bis vexare pro una et eadem causa. No man shall be twice vexed for one and the same cause. In the light of Circular 57-97 and Section 1(b), Rule 111 of the Rules of Court, the same rule applies when the creditor sues the debtor for BP 22 and thereafter forecloses on the mortgaged property. Thus, we state the rule at present. If the debtor fails (or unjustly refuses) to pay his debt when it falls due and the debt is secured by a mortgage and by a check, the creditor has three options against the debtor and the exercise of one will bar the exercise of the others. He may pursue either of the three but not all or a combination of them.

BERNARDO vs CA/GONZALES

DECENA vs PIQUERO/JAMBANGAN

FACTS: Spouses Decena executed a Memorandum of Agreement with spouses Piquero for the sale of a parcel of land. It was stipulated therein that if the 2 postdated checks be dishonored by the bank, the buyers will have the obligation to reconvey the land to the sellers. The checks were dishonored. Hence, Spouses Decena filed a Complaint3 against spouses Piquero in the RTC of Malolos, Bulacan, for the annulment of MOA, recovery of possession and damages. Now, spouse Piquero filed a motion to dismiss the complaint on the ground of improper venue and lack of jurisdiction over the property subject matter of the action. They averred that the principal action of Decena for the rescission of the MOA, and the recovery of the possession of the property is a real action and not a personal one; hence, it should have been brought in the RTC of Paraaque City, where the property subject matter of the action was located, and not in the RTC of Malolos, Bulacan, where the Decenas resided. Decenas insisted that while their second cause of action for the recovery of the possession of the property is a real action, the same may, nevertheless, be joined with the rest of their causes of action for damages, conformably with Section 5(c), Rule 2 of the Rules of Court. ISSUE: Whether or not Sec. 5(2) of Rule 2 is applicable. HELD: No. A joinder of causes of action is the uniting of two or more demands or right of action in a complaint. The question of the joinder of causes of action involves in particular cases a preliminary inquiry as to whether two or more causes of action are alleged. 13 In declaring whether more than one cause of action is alleged, the main thrust is whether more than one primary right or subject of controversy is

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present. Other tests are whether recovery on one ground would bar recovery on the other, whether the same evidence would support the other different counts and whether separate actions could be maintained for separate relief;14 or whether more than one distinct primary right or subject of controversy is alleged for enforcement or adjudication.15

causes of action are principally for recovery of money, the aggregate amount claimed shall be the test of jurisdiction. All claims for damages should be considered in determining the jurisdiction of the court regardless of whether they arose from a single cause of action or several causes of action. Hence, jurisdiction in this case remains with the RTC considering that the total amount claimed, inclusive of the moral and exemplary damages is P490,000 and since it is the claim for all kinds of damages that is the basis of determining the jurisdiction of courts whether the claims for damages arise from the same or different causes

A cause of action may be single although the plaintiff seeks a variety of remedies. The mere fact that the plaintiff prays for multiple reliefs does not indicate that he has stated more than one cause of action. The prayer may be an aid in interpreting the petition and in determining whether or not more than one cause of action is pleaded.16 If the allegations of the complaint show one primary right and one wrong, only one cause of action is alleged even though other matters are incidentally involved, and although different acts, methods, elements of injury, items of claims or theories of recovery are set forth. 17 Where two or more primary rights and wrongs appear, there is a joinder of causes of action.

of action.

TERANA vs DE SAGUN/JUYO

FACTS: The respondent Antonio Simuangco (respondent) owned a house and lot at 138 J.P. Laurel St., Nasugbu, Batangas, which he leased to the petitioner. The petitioner demolished the leased house and erected a new one in its place.5 The respondent alleged that this was done without his consent.6 When the respondent discovered what the petitioner did, he immediately confronted her and advised her to vacate the premises.9 She refused. The respondent thus filed a complaint for unlawful detainer12 against the petitioner on April 16, 1997 on the ground of the petitioners violation of the terms of the Contract of Lease.13 The respondent prayed for the petitioners ejectment of the leased property, and for the award of P70,000.00, representing the cost of the materials from the demolished house, attorneys fees, and costs.14 ISSUE: WON an action for ejectment may be properly joined with action for recovery of damages/ or reimbursement. HELD: No. An action for reimbursement or for recovery of damages may not be properly joined with the action for ejectment. The former is an ordinary civil action requiring a full-blown trial, while an action for unlawful detainer is a special civil action which requires a summary procedure. The joinder of the two actions is specifically enjoined by Section 5 of Rule 2 of the Rules of Court, which provides: Section 5. Joinder of causes of action. A party may in one pleading assert, in the alternative or otherwise, as many causes of action as he may have against an opposing party, subject to the following conditions: (a) The party joining the causes of action shall comply with the rules on joinder of parties; (b) The joinder shall not include special civil actions or actions governed by special rules; (c) Where the causes of action are between the same parties but pertain to different venues or jurisdictions, the joinder may be allowed in the Regional Trial Court provided one of the causes of action falls within the jurisdiction of said court and the venue lies therein; and (d) Where the claims in all the causes of action are principally for recovery of money, the aggregate amount claimed shall be the test of jurisdiction.

After due consideration of the foregoing, we find and so rule that Section 5(c), Rule 2 of the Rules of Court does not apply. This is so because Decenas, as plaintiffs in the court a quo, had only one cause of action against the respondents, namely, the breach of the MOA upon the latters refusal to pay the first two installments in payment of the property as agreed upon, and turn over to the petitioners the possession of the real property, as well as the house constructed thereon occupied by the respondents. The claim for damages is merely incidental to the main cause of action, and are not independent or separate causes of action. INIEGO vs PURUGANAN/JUEZAN FACTS: This involves a complaint for quasi-delict and damages filed with the RTC by Santos against Pinion, the driver of a truck involved in a traffic accident and against Iniego, as owner of the truck and employer of Pinion. The total amount of damages being claimed is P490,000. Iniego filed a motion to dismiss the complaint on the ground that the RTC has no jurisdiction over the cause of action of the case. Iniego asserts that only the actual damages amounted to P40,000 shall be included and exclude the moral and exemplary damages claimed by Santos from the computation of the total amount of damages for jurisdictional purposes because the said moral and exemplary damages arose, not from quasi-delict but from Iniegos refusal to pay the actual damages. According to him, the moral and exemplary damages are not direct consequences of the alleged negligent act. Santos, on the other hand, maintains that the RTC has exclusive jurisdiction because the cause of action is the claim for damages which exceeds P400,000. ISSUE: Whether or not the moral and exemplary damages claimed by Santos shall be included in the computation in determining the test of jurisdiction. RULING: The SC held yes, the moral and exemplary damages shall be included in the computation and further ruled that the amount of damages claimed is within the jurisdiction of the RTC since it is the claim for all kinds of damages that is the basis of determining the jurisdiction of courts, whether the claims for damages arise from the same or different causes of action. Rule 2, Section 5 of the Rules of Court allows a party to assert as may causes as he may have against the opposing party. Subsection d of the said section provides that where the claims in all such joined

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