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G.R. No.

L-25350 October 4, 1988


WILLIAM
A.
CHITTICK, petitioner,
vs.
HONORABLE COURT OF APPEALS and LAURENCE F. DE PRIDA
PATRICIA CHITTICK, LANE, WILLIAM A. CHITTICK, JR., DAGMAR
CHITTICK GILDERSLEEVE and MARY CHITTICK LYMAN, as alleged
substituted parties for MURIEL M. CHITTICK original party
plaintiff, respondents.
Gonzalo W. Gonzales & Associates for petitioner.
David Guevarra for respondent Laurence F. de Prida.
BIDIN, J.:
This is a petition for review on certiorari of the decision * of respondent Court
of Appeals promulgated on July 31, 1965 in CA-G.R. No. 31327-R, affirming
in all respect the decision ** of the Court of First Instance of Manila, Branch II
in Civil Case No. 6405 entitled Muriel M. Chittick vs. William A. Chittick.
The dispositive portion of the decision which was affirmed by respondent
Court, reads as follows:
In view of the foregoing, judgment is hereby rendered in
favor of the plaintiff and against the defendant by way of
support in arrears for the sum of P21,145.42 or its present
equivalent in dollar at the option of the plaintiff, with interest
at the legal rate from January 12, 1951; and under the
second cause of action for the sum of P9,000.00 with
interest at the rate of 6% from April 29, 1940, plus attorney's
fees in the amount of P900.00, and the costs of the suit.
(R.A. p. 110)
The facts of the case, taken from the decision of the trial court is as follows:
The plaintiff and the defendant, both American citizens, were
married in Washington, U.S.A. on February 12, 1923. They
came to the Philippines in 1924 and made the City of Manila
their permanent residence. Four children were born of the
marriage, namely, Patricia, who was born, on September 12,
1924; William, Jr., on January 8, 1926; Dagmar, on October
6, 1931, and Mary, on January 12, 1933. According to the
defendant, due to plaintiffs infidelity, their marital relation
became strained and they entered into an agreement of

separation, Exhibit A, on May 8, 1937. The document,


Exhibit A, was drawn by Atty. Benjamin S. Ohmick, an
American lawyer, and was duly acknowledged before a
notary public. The pertinent stipulations which are the bases
of plaintiffs two causes of action are found in paragraphs 2
and 3, and read as follows:
2. The husband agrees that he will pay or
cause to be paid to said wife monthly the
sum of FIVE HUNDRED FIFTY PESOS
(P550.00), Philippine Currency, or its
present equivalent in United States
Currency, at the election of the wife, for the
care, maintainance and support of the said
wife and the said minor children. Said
payment shall continue until such time as
the youngest of said minor children arrives
at the age of eighteen (18) years, provided
however, that the said wife in the meantime
does not remarry. Should such marriage
take place, it is understood and agreed that
payments aforesaid shall be reduced by
twenty percent (20%).
3. It is mutually agreed that the community
or conjugal assets of the parties, consisting
of share of stock in various corporations,
together with cash, have a net realizable
value of P22,500.00 which the husband
agrees to divide equally with the wife and
deliver same to her whenever the said wife
secures a final decree of divorce as is
contemplated by her it being understood that
the husband, at his option, may deliver to
the wife the sum of P11,250.00 in full and
complete discharge.
The plaintiff thereafter went to Nevada, U.S.A., and alleging
desertion on the part of her husband, the defendant herein,
the plaintiff obtained a divorce, Exhibit B, on August 30,
1937. Plaintiff stayed in the United States until December
1937, after which she returned to the Philippines. The
defendant complied faithfully with the payment of the
monthly support of P550.00 until the war broke out in
December 1941. With the outbreak of the war, the spouses
and their children were interred in the Sto. Tomas University

concentration camp by the Japanese from January 1942 to


March 3, 1944. Nevertheless, the defendant during the
period of interment, paid to the plaintiff a total of P4,716.00
which according to the defendant, was extended as a loan to
the plaintiff and which was obtained by borrowing from his
friends. After the liberation in March 1945, plaintiff and
defendant and their children were among the first to be sent
back to the United States for medical treatment, arriving in
San Francisco on May 9, 1945. From the arrival of the
parties in San Francisco in May 9, 1945 to January 12, 1951
when Mary, the youngest, reached the age of 18, and when
according to paragraph 2 of Exhibit A, the payment of
support should cease, the defendant paid a total of
$8,145.00. The total amount due to the plaintiff by way of
support, in accordance with paragraph 2 of Exhibit A, from
May 9, 1945 to January 12, 1951 is $18,717.71, thereby,
leaving a balance in favor of the plaintiff in the amount of
$10,572.7l. (Record on Appeal, pp. 84-88).
On October 2, 1948, private respondent commenced an action to recover
from petitioner support in arrears and her share in the conjugal partnership,
in Civil Case No. 6405 of the Court of First Instance of Manila, Branch II,
praying that judgment be rendered in her favor and against defendant, under
the first cause of action, for the sum of $3,442.90, United States currency, or
P6,885.80, Philippine Currency, and the further sum of $110.00 or P220.00
per month from March 1, 1948, both with legal interest from the date of filing
of the complaint until paid and, under the second cause of action, for the sum
of P11,250.00, with legal interest from the date of the filing of this complaint,
until paid, plus the sum of P1,000.00 for attorney's fees, with costs against
defendant. (Record on Appeal, pp. 1-11).
As aforesaid, the trial court rendered a decision in favor of the plaintiff.
On appeal, respondent Court of Appeals on July 31, 1965, affirmed the
decision of the trial court in all respects (Rollo, pp. 82-116). August 5, 1965,
counsel for plaintiff-appellee, private respondent herein, filed a motion with
respondent court for substitution of party plaintiff-appellee, who died in Los
Angeles, California, United States of America on April 25, 1964, by her heirs,
her surviving spouse, Laurence F. de Prida and the legitimate children of the
parties (Rollo, p. 143). The motion was opposed by petitioner herein on the
ground that since the relation between attorney and client ceased with the
death of plaintiff-appellee, counsel cannot present any motion for and in
behalf of the children of the deceased client, unless authorized by the said
children and/or heirs. (Rollo, p. 144). On November 3, 1965, the respondent
Court issued its resolution granting the motion for substitution (Rollo, p. 209).

A motion for reconsideration of the decision of respondent court dated July


31, 1965 was filed by petitioner on August 20, 1965 (Rollo, pp. 154-199.) It
was denied by respondent court in another resolution also dated November
3, 1965 (Rollo, p. 210.)
Hence, this petition filed with this Court on November 26, 1965 (Rollo, p.1.)
In a resolution dated January 7, 1966, the Court resolved to dismiss the
petition for lack of merit (Rollo, p. 215-A.)
On January 27, 1966, petitioner tiled a motion for reconsideration of the
Court's resolution of January 7, 1966 (Rollo, p. 217) in view of which the
Court required respondents to answer within ten days from notice, in its
resolution of February 17, 1966 (Rollo, p. 242.) Private respondent Laurence
F. de Prida filed his answer on April 4,1966 (Rollo, p. 247.)
On April 18, 1966, the Court resolved to give due course to the petition
(Rollo, p. 276.) The brief for the petitioner was filed on June 14, 1966 (Reno,
p. 279); the brief for the respondent was filed on August 25, 1966 (Rollo, p.
288.) The reply brief was filed on November 3, 1966 (Rollo, p. 308.)
On January 18, 1967, petitioner filed a manifestation that the Court take
cognizance of two letters of his son William, Jr. stating that the case will filed
by Larry de Prida (his mother's alleged second husband), without his consent
and expressing a desire not to be made a party to the case against his father
(Rollo, p. 309.). Acting on the manifestation the Court required private
respondent to comment thereon, (Rollo, p. 315) which was filed on February
16, 1967 (Rollo, p. 316). A counter manifestation with reference to the
comment of private respondent was filed by petitioner on February 2&, 1967
(Rollo, p. 318.)
Petitioner raised several assignments of errors but the principal conflict in
this case centers on whether or not the decision of respondent Court was
rendered nugatory by the death of plaintiff-appellee Muziel M. Chittick
(private respondent herein) more than one year before its issuance and
before a substitution of heirs could be effected.
The answer is in the affirmative.
Section 16, Rule 3 of the Rules of Court states:
Duty of attorney upon death, incapacity, or incompetency of
party.Whenever a party to a pending case dies, becomes
incapacitated or incompetent, it shall be the duty of his
attorney to inform the court promptly of such death,
incapacity or incompetency, and to give the name and

residence of his executor, administrator, guardian on other


legal representative.
Section 17 of the same Rule likewise, states:
Death of a party.After a party dies and the claim is not
thereby extinguished, the court shall order, upon proper
notice, the legal representative of the deceased to appear
and to be substituted for the deceased, within a period of
thirty (30) days, or within such time as may be granted. If the
legal representative fails to appear within said time, the court
may order the opposing party to procure the appointment of
a legal representative of the deceased within a time to be
specified by the court, and the representative shall
immediately appear for and on behalf of the interest of the
deceased. The court charges involved in procuring such
appointment, if defrayed by the opposing party, may be
recovered as costs. The heirs of the deceased may be
allowed to be substituted for the deceased, without requiring
the appointment of an executor or administrator and the
court may appoint guardian ad litem for the minor heirs.
Private respondent Muriel M. Chittick died in Los Angeles, California, United
States of America, on April 25,1964 while the case was pending with
respondent Court of Appeals. It was only on August 5, 1965, however, that
counsel for private respondent filed a motion for substitution of party plaintiffappellee (Rollo, p. 143) five days after respondent court promulgated its
decision of July 31, 1965, despite Section 16, Rule 3 of the Rules of Court
which clearly provides for a prompt notice of such death to be given to the
Court by the attorney of the deceased. In fact said counsel himself admitted
his lapse in memory, alleging however, that he thought all the while that he
had already complied with the aforementioned sections of Rule 3 and that he
discovered his neglect when he went over the records of the case upon
receipt of the decision promulgated by the Court of Appeals (Rollo, p. 148).
There is no question that this duty applies in this case where a party dies
after filing of the complaint and during the pendency of the case (Doel v.
Teves, 136 SCRA 196 [1985], nor is there any argument against the rule that
counsel's inexcusable negligence is binding on his client. (Llantero v. Court of
Appeals, 105 SCRA 609 [1981], Pulido v. Court of Appeals, 122 SCRA 63
[1983]).
More than that, apart from the fact that there appears to be no compliance
with the procedure laid down in Rule 3, Sections 16 and 17 of the Rules of
Court, in order that a valid substitution maybe effected, all of the Chittick
children who claim that they have no knowledge of such substitution,

expressly and vehemently objected to their being included as plaintiffs


against petitioner, their father (Brief for Petitioner, pp. 33-36).
Consequently, it is evident that the motion for substitution filed by the counsel
for the deceased and which was subsequently approved by the Court of
Appeals is null and void because the party in whose name it was presented
was dead, and therefore, the authority of the attorney to represent her had
ceased (Moran, Vol. I, p. 218,1979 ed.). Furthermore, the said motion was
unauthorized by the plaintiffs in question (private respondents herein) with
the exception of Laurence F. de Prida, the alleged second husband of the
deceased, whose heirship is however also in question. As correctly stated by
petitioner, there should first be a prior determination as to whether or not de
Prida is an heir of the deceased before he can be properly substituted as
such (Brief for Petitioner, pp. 3640).
Under similar circumstances, this Court ruled as follows:
In the present case, there had been no court order for the
legal representative of the deceased to appear, nor had any
such legal representative ever appeared in court to be
substituted for the deceased; neither had the complainant
ever procured the appointment of such legal representative
of the deceased, nor had the heirs of the deceased,
including appellant, ever asked to be allowed to be
substituted for the deceased. As a result, no valid
substitution was effected, consequently, the court never
acquired jurisdiction over appellant for the purpose of
making her a party to the case and making the decision
binding upon her, either personally or as legal representative
of the estate of her deceased mother. (Ferreria, et al. v. Vda.
de Gonzales, et al., 104 Phil. 143).
Going back to the case at bar, it is without question that there was no valid
substitution made and as a consequence, the Court of Appeals never
acquired jurisdiction over the Chittick children nor over the alleged second
husband whose status as heir has still to be determined.
Still further, on November 29, 1977, counsel for petitioner filed with this Court
a Notice of Death of the latter on April 13, 1977 in Makati, Metro Manila
(Rollo, p. 322). Accordingly, even assuming that there was a valid
substitution still this case as a money claim against the defendant petitioner
cannot survive under Sec. 5, Rule 86 of the Rules of Court and should have
been filed against the decedent's estate which is mandatory (De Bautista v.
De Guzman, 125 SCRA 682 [1983]). Nevertheless, since the Chittick children
as heirs of respondent-creditor are also the heirs of petitioner-debtor, the

obligation sued upon had been extinguished by the merger in their persons
of the character of creditor and debtor of the same obligation (Art. 1275, Civil
Code).
WHEREFORE, the appealed decision of the Court of Appeals is hereby
Reversed and Set Aside and the complaint filed against defendant-petitioner
is Dismissed. No costs.
SO ORDERED.

Saligumba vs. Palanog, G.R. No. 143365, Dec. 4, 2008


The Case
This is a petition for review of the Decision dated 24 May 2000 of the
Regional Trial Court, Branch 5, Kalibo, Aklan (RTC-Branch 5) in Civil Case
No. 5288 for Revival of Judgment. The case is an offshoot of the action for
Quieting of Title with Damages in Civil Case No. 2570.
The Facts
Monica Palanog,
assisted
by
her
husband Avelino Palanog (spouses Palanogs), filed a complaint dated 28
February 1977 for Quieting of Title with Damages against defendants,
spouses
Valeria Saligumba and Eliseo Saligumba,
Sr.
(spouses Saligumbas), before the Regional Trial Court, Branch
3, Kalibo, Aklan (RTC-Branch 3). The case was docketed as Civil Case No.
2570. In the complaint, spouses Palanogs alleged that they have been in
actual, open, adverse and continuous possession as owners for more than
50 years of a parcel of land located in Solido, Nabas, Aklan. The
spouses Saligumbas allegedly prevented them from entering and residing on
the subject premises and had destroyed the barbed wires enclosing the land.
Spouses Palanogs prayed that they be declared the true and rightful owners
of the land in question.
When the case was called for pre-trial on 22 September 1977,
Atty. Edilberto Miralles (Atty. Miralles), counsel for spouses Saligumbas,
verbally moved for the appointment of a commissioner to delimit the land in
question. Rizalino Go, Deputy Sheriff of Aklan, was appointed commissioner
and was directed to submit his report and sketch within 30 days. [1] Present
during the delimitation were spouses Palanogs, spouses Saligumbas, and
Ernesto Saligumba, son of spouses Saligumbas.[2]

After submission of the Commissioners Report, spouses Palanogs,


upon motion, were granted 10 days to amend their complaint to conform with
the items mentioned in the report.[3]
Thereafter, trial on the merits ensued. At the hearing on 1 June 1984,
only the counsel for spouses Palanogs appeared. The trial court issued an
order resetting the hearing to 15 August 1984 and likewise directed
spouses Saligumbas to secure the services of another counsel who should
be ready on that date. [4] The order sent to Eliseo Saligumba, Sr. was
returned to the court unserved with the notation PartyDeceased while the
order sent to defendant Valeria Saligumba was returned with the notation
Party in Manila.[5]
At the hearing on 15 August 1984, spouses Palanogs direct
examination was suspended and the continuation of the hearing was set
on 25 October 1984. The trial court stated that Atty. Miralles, who had not
withdrawn as counsel for spouses Saligumbas despite his appointment as
Municipal Circuit Trial Court judge, would be held responsible for the case of
spouses Saligumbas until he formally withdrew as counsel. The trial court
reminded Atty. Miralles to secure the consent of spousesSaligumbas for his
withdrawal.[6] A copy of this order was sent to Valeria Saligumba but the
same was returned unserved with the notation Party in Manila.[7]
The hearing set on 25 October 1984 was reset to 25 January 1985 and
the trial court directed that a copy of this order be sent to Eliseo Saligumba,
Jr. at COA, PNB, Manila.[8]
The presentation of evidence for spouses Palanogs resumed on 25
January 1985 despite the motion of Atty. Miralles for postponement on the
ground that his client was sick. The exhibits were admitted and plaintiffs
spouses Palanogs rested their case. Reception of evidence for the
defendants spouses Saligumbas was scheduled on 3, 4, and 5 June 1985.[9]
On 3 June 1985, only spouses Palanogs and counsel appeared. Upon
motion of the spouses Palanogs, spouses Saligumbas were deemed to have
waived the presentation of their evidence.
On 3 August 1987, after a lapse of more than two years, the trial court
considered the case submitted for decision.
On 7 August 1987, RTC-Branch 3 rendered a judgment in Civil Case
No. 2570 declaring spouses Palanogs the lawful owners of the subject land
and ordering spouses Saligumbas, their agents, representatives and all
persons acting in privity with them to vacate the premises and restore
possession to spouses Palanogs.

The trial court, in a separate Order dated 7 August 1987, directed that a
copy of the courts decision be furnished plaintiff Monica Palanog and
defendant ValeriaSaligumba.
Thereafter, a motion for the issuance of a writ of execution of the said
decision was filed but the trial court, in its Order dated 8 May 1997, ruled that
since more than five years had elapsed after the date of its finality, the
decision could no longer be executed by mere motion.
Thus, on 9 May 1997, Monica Palanog (respondent), now a widow, filed
a Complaint seeking to revive and enforce the Decision dated 7 August
1987 in Civil Case No. 2570 which she claimed has not been barred by the
statute of limitations. She impleaded petitioners Generoso Saligumba and
Ernesto Saligumba, the heirs and children of the spouses Saligumbas, as
defendants. The case was docketed as Civil Case No. 5288 before the RTCBranch 5.
Petitioner Generoso Saligumba, for himself and in representation
of
his brother Ernesto who was out of the country working as a seaman,
engaged the services of the Public Attorneys Office, Kalibo, Aklan
which
filed a motion for time to allow them to file a responsive
pleading. Petitioner Generoso Saligumbafiled
his
Answer[10] alleging
that:
(1) respondent had no cause of action; (2) the
spouses Saligumbas died while Civil Case No. 2570 was pending and no
order of substitution was issued and hence, the trial was null and void; and
(3) the court did not acquire jurisdiction over the heirs of the
spouses Saligumbas and therefore, the judgment was not binding on them.
Meanwhile, on 19 December 1997, the trial court granted respondents
motion to implead additional defendants namely, Eliseo Saligumba, Jr. and
EduardoSaligumba, who are also the heirs and children of
spouses Saligumbas.[11] They were, however, declared in default on 1
October 1999 for failure to file any responsive pleading. [12]
The Trial Courts Ruling
On 24 May 2000, the RTC-Branch 5 rendered a decision in favor
of respondent ordering the revival of judgment in Civil Case No. 2570. The
trial court ruled that the non-substitution of the deceased spouses did not
have any legal significance. The land subject of Civil Case No. 2570 was the
exclusive property of defendant Valeria Saligumba who inherited the same
from her deceased parents. The death of her husband, Eliseo Saligumba,
Sr., did not change the complexion of the ownership of the property that
would require his substitution. The spouses Saligumbas children, who are
the petitioners in this case, had no right to the property while

Valeria Saligumba was still alive. The trial court further found that when
defendant Valeria Saligumba died, her lawyer, Atty. Miralles, did not inform
the court of the death of his client. The trial court thus ruled that the nonsubstitution of the deceased defendant was solely due to the negligence of
counsel. Moreover, petitioner Ernesto Saligumba could not feign ignorance of
Civil Case
No. 2570 as he was present during the delimitation of the
subject land. The trial court likewise held that the decision in Civil Case No.
2570 could not be the subject of a collateral attack. There must be a direct
action for the annulment of the said decision.
Petitioners elevated the matter directly to this Court. Hence, the present
petition.
The Courts Ruling
The instant case is an action for revival of judgment and the judgment
sought to be revived in this case is the decision in the action for quieting of
title with damages in Civil Case No. 2570. This is not one for annulment of
judgment.
An action for revival of judgment is no more than a procedural means of
securing the execution of a previous judgment which has become dormant
after the passage of five years without it being executed upon motion of the
prevailing party. It is not intended to re-open any issue affecting the merits of
the judgment debtors case nor the propriety or correctness of the
first judgment.[13] An action for revival of judgment is a new and independent
action, different and distinct from either the recovery of property case or the
reconstitution case, wherein the cause of action is the decision itself and not
the merits of the action upon which the judgment sought to be enforced is
rendered.[14] Revival of judgment is premised on the assumption that the
decision to be revived, either by motion or by independent action, is already
final and executory.[15]
The RTC-Branch 3 Decision dated 7 August 1987 in Civil Case
No.
2570 had been rendered final and executory by the lapse of time with no
motion for reconsideration nor appeal having been filed. While it may be true
that the judgment in Civil Case No. 2570 may be revived and its execution
may be had, the issue now before us is whether or not execution of judgment
can be issued against petitioners who claim that they are not bound by
the RTC-Branch 3 Decision dated 7 August 1987 in Civil Case No. 2570.
Petitioners contend that the RTC-Branch 3 Decision of 7
1987 in Civil Case No. 2570 is null and void since there was no
substitution of the deceased spouses Saligumbas despite the trial
knowledge that the deceased spouses Saligumbas were no

August
proper
courts
longer

represented by counsel. They argue that they were deprived of due process
and justice was not duly served on them.

and the court may appoint guardian ad litem for the minor
heirs. (Emphasis supplied)

Petitioners argue that the trial court even acknowledged the fact of
death of spouses Saligumbas but justified the validity of the decision
rendered in that case despite lack of substitution because of the negligence
or fault of their counsel. Petitioners contend that the duty of counsel for the
deceased spouses Saligumbas to inform the court of the death of his clients
and to furnish the name and address of the executor, administrator,
heir
or legal representative of the decedent under Rule 3 presupposes
adequate
or active representation by counsel. However, the relation of
attorney
and client was already terminated by the appointment of counsel
on record, Atty. Miralles, as Municipal Circuit Trial Court judge even before
the deaths of the spouses Saligumbas were known. Petitioners invoke the
Order of 1 June 1984 directing the spouses Saligumbas to secure the
services of another lawyer to replace Atty. Miralles. The registered mail
containing that order was returned to the trial court with the notation
that Eliseo Saligumba, Sr. was deceased. Petitioners thus question the
decision in Civil Case
No. 2570 as being void and of no legal effect
because their parents were not duly represented by counsel of record.
Petitioners further argue that they have never taken part in the proceedings
in Civil Case No. 2570 nor did they voluntarily appear or participate in the
case. It is unfair to bind them in a decision rendered against their deceased
parents. Therefore, being a void judgment, it has no legal nor binding effect
on petitioners.

Under the express terms of Section 17, in case of death of a party, and
upon proper notice, it is the duty of the court to order the legal representative
or heir of the deceased to appear for the deceased. In the instant case, it is
true that the trial court, after receiving an informal notice of death by the mere
notation in the envelopes, failed to order the appearance of the legal
representative or heir of the deceased. There was no court order for
deceaseds legal representative or heir to appear, nor did any such legal
representative ever appear in court to be substituted for the deceased.
Neither did the respondent ever procure the appointment of such legal
representative, nor did the heirs ever ask to be substituted.

Civil Case No. 2570 is an action for quieting of title with damages which
is an action involving real property. It is an action that survives pursuant to
Section 1, Rule 87[16] as the claim is not extinguished by the death of a party.
And when a party dies in an action that survives, Section 17 of Rule 3 of the
Revised Rules of Court[17] provides for the procedure, thus:
Section 17. Death of Party. - After a party dies and
the claim is not thereby extinguished, the court shall
order, upon proper notice, the legal representative of the
deceased to appear and to be substituted for the deceased,
within a period of thirty (30) days, or within such time as may
be granted. If the legal representative fails to appear within
said time, the court may order the opposing party to procure
the appointment of a legal representative of the deceased
within a time to be specified by the court, and the
representative shall immediately appear for and on behalf of
the interest of the deceased. The court charges involved in
procuring such appointment, if defrayed by the opposing
party, may be recovered as costs. The heirs of the deceased
may be allowed to be substituted for the deceased, without
requiring the appointment of an executor or administrator

It appears that Eliseo Saligumba, Sr. died on 18 February 1984 while


Valeria Saligumba died on 2 February 1985. No motion for the substitution of
the spouses was filed nor an order issued for the substitution of the
deceased spouses Saligumbas in Civil Case No. 2570. Atty. Miralles and
petitioner Eliseo Saligumba, Jr., despite notices sent to them to appear,
never confirmed the death of Eliseo Saligumba, Sr. and Valeria Saligumba.
The record is bereft of any evidence proving the death of the spouses,
except the mere notations in the envelopes enclosing the trial courts orders
which were returned unserved.
Section 17 is explicit that the duty of the court to order the legal
representative or heir to appear arises only upon proper notice. The
notation Party-Deceased on the unserved notices could not be the proper
notice contemplated by the rule. As the trial court could not be expected to
know or take judicial notice of the death of a party without the proper
manifestation from counsel, the trial court was well within its jurisdiction to
proceed as it did with the case. Moreover, there is no showing that the courts
proceedings were tainted with irregularities. [18]
Likewise, the plaintiff or his attorney or representative could not be
expected to know of the death of the defendant if the attorney for the
deceased defendant did not notify the plaintiff or his attorney of such death
as required by the rules.[19] The judge cannot be blamed for sending copies
of the orders and notices to defendants spouses in the absence of proof of
death or manifestation to that effect from counsel. [20]
Section 16, Rule 3 of the Revised Rules of Court likewise expressly
provides:
SEC. 16. Duty of attorney upon death, incapacity
or incompetency of party. - Whenever a party to a pending
case dies, becomes incapacitated or incompetent, it shall be

the duty of his attorney to inform the court promptly of such


death, incapacity or incompetency, and to give the name and
residence of his executor, administrator, guardian or other
legal representative.
It is the duty of counsel for the deceased to inform the court of the death of
his client. The failure of counsel to comply with his duty under Section 16 to
inform the court of the death of his client and the non-substitution of such
party will not invalidate the proceedings and the judgment thereon if the
action survives the death of such party. The decision rendered shall bind the
partys successor-in-interest.[21]
The rules operate on the presumption that the attorney for the
deceased party is in a better position than the attorney for the adverse party
to know about the death of his client and to inform the court of the name and
address of his legal representative. [22]
Atty. Miralles continued to represent the deceased spouses even after
the latters demise. Acting on their behalf, Atty. Miralles even asked for
postponement of the hearings and did not even confirm the death of his
clients nor his appointment as Municipal Circuit Trial Court judge. These
clearly negate petitioners contention that Atty. Miralles ceased to
be spouses Saligumbas counsel.
Atty. Miralles still
remained
the
counsel
of
the
spouses Saligumbas despite the alleged appointment as judge. Records
show that when Civil Case No. 2570 was called for trial on 25 October 1984,
Atty. Miralles appeared and moved for a postponement. The 25 October
1984 Order reads:
ORDER
Upon petition of Judge Miralles who is still the
counsel on record of this case and who is held responsible
for anything that will happen in this case, postpone the
hearing of this case to JANUARY 25, 1985 AT 8:30 in the
morning. x x x[23]
The trial court issued an Order dated 1 June 1984 directing the defendants to
secure the services of another counsel. This order was sent
to Eliseo Saligumba, Sr. by registered mail but the same was returned with
the notation Party-Deceased while the notice to Valeria Saligumba was
returned with the notation Party inManila. [24] Eliseo Saligumba, Sr. died
on 18 February 1984. When Atty. Miralles appeared in court on 25 October
1984, he did not affirm nor inform the court of the death of his client. There

was no formal substitution. The trial court issued an order resetting the
hearing to 25 January 1985 and directed that a copy of the order be
furnished petitioner Eliseo Saligumba, Jr. at COA, PNB, Manila by registered
mail.[25] When the case was called on 25 January 1985, Atty. Miralles sought
for another postponement on the ground that his client was sick and under
medical treatment in Manila.[26] Again, there was no manifestation from
counsel about the death of Eliseo Saligumba, Sr. The trial court issued an
Order dated 25 January 1985 setting the reception of evidence for the
defendants on 3, 4, and 5 June 1985. A copy of this order was sent
to Eliseo Saligumba, Jr. by registered mail. Nonetheless, as the trial court in
Civil Case No. 5288 declared, the non-substitution of EliseoSaligumba, Sr.
did not have any legal significance as the land subject of Civil Case No. 2570
was the exclusive property of Valeria Saligumba who inherited it from her
deceased parents.
This notwithstanding, when Valeria Saligumba died on 2 February
1985, Atty. Miralles again did not inform the trial court of the death of
Valeria Saligumba. There was no formal substitution nor submission of proof
of death of Valeria Saligumba.
Atty. Miralles was remiss in his duty under
Section 16, Rule 3 of the Revised Rules of Court. The counsel of record is
obligated to protect his clients interest until he is released from his
professional relationship with his client. For its part, the court could recognize
no other representation on behalf of the client except such counsel of record
until a formal substitution of attorney is effected.[27]
An attorney must make an application to the court to withdraw as
counsel, for the relation does not terminate formally until there is a
withdrawal of record; at least, so far as the opposite party is concerned, the
relation otherwise continues until the end of the litigation. [28] Unless properly
relieved, the counsel is responsible for the conduct of the case. [29] Until his
withdrawal shall have been approved, the lawyer remains counsel of record
who is expected by his client as well as by the court to do what the interests
of his client require. He must still appear on the date of hearing for the
attorney-client relation does not terminate formally until there is a withdrawal
of record.[30]
Petitioners should have questioned immediately the validity of the
proceedings absent any formal substitution. Yet, despite the courts alleged
lack of jurisdiction over the persons of petitioners, petitioners never bothered
to challenge the same, and in fact allowed the proceedings to go on until the
trial court rendered its decision. There was no motion for reconsideration,
appeal or even an action to annul the judgment in Civil Case No. 2570.
Petitioners themselves could not feign ignorance of the case since during
the pendency of Civil Case No. 2570, petitioner Ernesto Saligumba, son of
the deceased spouses, was among the persons present during the
delimitation of the land in question before the Commissioner held on 5
November 1977.[31] Petitioner Eliseo Saligumba, Jr. was likewise furnished a

copy of the trial courts orders and notices. It was only the Answer filed by
petitioner Generoso Saligumba in Civil Case No. 5288 that confirmed the
dates when the spouses Saligumbas died and named the latters
children. Consequently, Atty. Miralles was responsible for the conduct of the
case since he had not been properly relieved as counsel of record. His acts
bind his clients and the latters successors-in-interest.
In the present case for revival of judgment, the other petitioners have
not shown much interest in the case. Petitioners Eliseo Saligumba, Jr. and
EduardoSaligumba were declared in default for failure to file their answer.
Petitioner Ernesto Saligumba was out of the country working as a seaman.
Only petitionerGeneroso Saligumba filed an Answer to the complaint. The
petition
filed
in
this
Court
was
signed
only
by
petitioner Generoso Saligumba as someone signed on behalf of petitioner
Ernesto Saligumba without the latters authority to do so.
WHEREFORE, we DENY the petition. We AFFIRM the Decision
dated 24 May 2000 of the Regional Trial Court, Branch 5, Kalibo, Aklan in
Civil Case No. 5288. Costs against petitioners.

of improper venue, citing a common provision in the mobiline service


agreements to the effect that "Venue of all suits arising from this Agreement or any other suit
directly or indirectly arising from the relationship between PILTEL
and subscriber shall be in the proper courts of Makati, Metro Manila.
Subscriber hereby expressly waives any other venues." 1
In an order, dated 15 August 2001, the Regional Trial Court of Iligan City,
Lanao del Norte, denied petitioners motion to dismiss and required it to file
an answer within 15 days from receipt thereof.
Petitioner PILTEL filed a motion for the reconsideration, through registered
mail, of the order of the trial court. In its subsequent order, dated 08 October
2001, the trial court denied the motion for reconsideration.
Petitioner filed a petition for certiorari under Rule 65 of the Revised Rules of
Civil Procedure before the Court of Appeals.

SO ORDERED.

G. R. No. 156966

The Court of Appeals, in its decision of 30 April 2002, saw no merit in the
petition and affirmed the assailed orders of the trial court. Petitioner moved
for a reconsideration, but the appellate court, in its order of 21 January 2003,
denied the motion.

May 7, 2004

PILIPINO
TELEPHONE
vs.
DELFINO TECSON, respondent.

CORPORATION, petitioner,

There is merit in the instant petition.

On various dates in 1996, Delfino C. Tecson applied for six (6) cellular phone
subscriptions with petitioner Pilipino Telephone Corporation (PILTEL), a
company engaged in the telecommunications business, which applications
were each approved and covered, respectively, by six mobiline service
agreements.

Section 4, Rule 4, of the Revised Rules of Civil Procedure 2 allows the parties
to agree and stipulate in writing, before the filing of an action, on the
exclusive venue of any litigation between them. Such an agreement would be
valid and binding provided that the stipulation on the chosen venue is
exclusive in nature or in intent, that it is expressed in writing by the parties
thereto, and that it is entered into before the filing of the suit. The provision
contained in paragraph 22 of the "Mobile Service Agreement," a standard
contract made out by petitioner PILTEL to its subscribers, apparently
accepted and signed by respondent, states that the venue of all suits arising
from the agreement, or any other suit directly or indirectly arising from the
relationship between PILTEL and subscriber, "shall be in the proper courts of
Makati, Metro Manila." The added stipulation that the subscriber "expressly
waives any other venue" 3 should indicate, clearly enough, the intent of the
parties to consider the venue stipulation as being preclusive in character.

On 05 April 2001, respondent filed with the Regional Trial Court of Iligan City,
Lanao Del Norte, a complaint against petitioner for a "Sum of Money and
Damages." Petitioner moved for the dismissal of the complaint on the ground

The appellate court, however, would appear to anchor its decision on the
thesis that the subscription agreement, being a mere contract of adhesion,
does not bind respondent on the venue stipulation.

DECISION
VITUG, J.:
The facts, by and large, are undisputed.

Indeed, the contract herein involved is a contract of adhesion. But such an


agreement is not per se inefficacious. The rule instead is that, should there
be ambiguities in a contract of adhesion, such ambiguities are to be
construed against the party that prepared it. If, however, the stipulations are
not obscure, but are clear and leave no doubt on the intention of the parties,
the literal meaning of its stipulations must be held controlling. 4
A contract of adhesion is just as binding as ordinary contracts. It is true that
this Court has, on occasion, struck down such contracts as being assailable
when the weaker party is left with no choice by the dominant bargaining party
and is thus completely deprived of an opportunity to bargain effectively.
Nevertheless, contracts of adhesion are not prohibited even as the courts
remain careful in scrutinizing the factual circumstances underlying each case
to determine the respective claims of contending parties on their efficacy.
In the case at bar, respondent secured six (6) subscription contracts for
cellular phones on various dates. It would be difficult to assume that, during
each of those times, respondent had no sufficient opportunity to read and go
over the terms and conditions embodied in the agreements. Respondent
continued, in fact, to acquire in the pursuit of his business subsequent
subscriptions and remained a subscriber of petitioner for quite sometime.
In Development Bank of the Philippines vs. National Merchandising
Corporation,5 the contracting parties, being of age and businessmen of
experience, were presumed to have acted with due care and to have signed
the assailed documents with full knowledge of their import. The situation
would be no less true than that which obtains in the instant suit. The
circumstances in Sweet Lines, Inc. vs. Teves,6 wherein this Court invalidated
the venue stipulation contained in the passage ticket, would appear to be
rather peculiar to that case. There, the Court took note of an acute shortage
in inter-island vessels that left passengers literally scrambling to secure
accommodations and tickets from crowded and congested counters. Hardly,
therefore, were the passengers accorded a real opportunity to examine the
fine prints contained in the tickets, let alone reject them.
A contract duly executed is the law between the parties, and they are obliged
to comply fully and not selectively with its terms. A contract of adhesion is no
exception.7
WHEREFORE, the instant petition is GRANTED, and the questioned
decision and resolution of the Court of Appeals in CA-G.R. SP No. 68104 are
REVERSED and SET ASIDE. Civil Case No. 5572 pending before the
Regional Trial Court of Iligan City, Branch 4, is DISMISSED without prejudice
to the filing of an appropriate complaint by respondent against petitioner with
the court of proper venue. No costs.

SO ORDERED.

Hyatt Elevators and Escalators Corp. vs. Goldstar Elevators Phils.


Inc. G.R. No. 161026, October 24, 2005.
Well established in our jurisprudence is the rule that the residence of a
corporation is the place where its principal office is located, as stated in its
Articles of Incorporation.
The Case
Before us is a Petition for Review [1] on Certiorari, under Rule 45 of
the Rules of Court, assailing the June 26, 2003 Decision[2] and the November
27, 2003 Resolution[3] of the Court of Appeals (CA) in CA-GR SP No. 74319.
The decretal portion of the Decision reads as follows:
WHEREFORE, in view of the foregoing, the
assailed Orders dated May 27, 2002 and October 1, 2002 of
the RTC, Branch 213, Mandaluyong City in Civil Case No.
99-600, are hereby SET ASIDE. The said case is hereby
ordered DISMISSED on the ground of improper venue.[4]
The assailed
Reconsideration.

Resolution

denied

petitioners

Motion

for

The Facts
The relevant facts of the case are summarized by the CA in this
wise:
Petitioner [herein Respondent] Goldstar Elevator
Philippines, Inc. (GOLDSTAR for brevity) is a domestic
corporation primarily engaged in the business of marketing,
distributing, selling, importing, installing, and maintaining
elevators and escalators, with address at 6 th Floor, Jacinta II
Building, 64 EDSA, Guadalupe, Makati City.
On the other hand, private respondent [herein
petitioner] Hyatt Elevators and Escalators Company (HYATT
for brevity) is a domestic corporation similarly engaged in the
business of selling, installing and maintaining/servicing
elevators, escalators and parking equipment, with address at
the 6th Floor, Dao I Condominium, Salcedo St., Legaspi
Village, Makati, as stated in its Articles of Incorporation.

On February 23, 1999, HYATT filed a Complaint for


unfair trade practices and damages under Articles 19, 20
and 21 of the Civil Code of the Philippines against LG
Industrial Systems Co. Ltd. (LGISC) and LG International
Corporation (LGIC), alleging among others, that: in 1988, it
was appointed by LGIC and LGISC as the exclusive
distributor of LG elevators and escalators in the Philippines
under a Distributorship Agreement; x x x LGISC, in the latter
part of 1996, made a proposal to change the exclusive
distributorship agency to that of a joint venture partnership;
while it looked forward to a healthy and fruitful negotiation for
a joint venture, however, the various meetings it had with
LGISC and LGIC, through the latters representatives, were
conducted in utmost bad faith and with malevolent
intentions; in the middle of the negotiations, in order to put
pressures upon it, LGISC and LGIC terminated the Exclusive
Distributorship Agreement;
x x x [A]s a consequence,
[HYATT] suffered P120,000,000.00 as actual damages,
representing
loss
of
earnings
and
business
opportunities, P20,000,000.00 as damages for its reputation
and goodwill, P1,000,000.00 as and by way of exemplary
damages, and P500,000.00 as and by way of attorneys
fees.
On March 17, 1999, LGISC and LGIC filed a Motion
to Dismiss raising the following grounds: (1) lack of
jurisdiction over the persons of defendants, summons not
having been served on its resident agent; (2) improper
venue; and (3) failure to state a cause of action. The [trial]
court denied the said motion in an Order dated January 7,
2000.
On March 6, 2000, LGISC and LGIC filed an
Answer with Compulsory Counterclaim ex abundante
cautela. Thereafter, they filed a Motion for Reconsideration
and to Expunge Complaint which was denied.
On December 4, 2000, HYATT filed a motion for
leave of court to amend the complaint, alleging that
subsequent to the filing of the complaint, it learned that
LGISC transferred all its organization, assets and goodwill,
as a consequence of a joint venture agreement with Otis
Elevator Company of the USA, to LG Otis Elevator Company
(LG OTIS, for brevity). Thus, LGISC was to be substituted or
changed to LG OTIS, its successor-in-interest. Likewise, the

motion averred that x x x GOLDSTAR was being utilized by


LG OTIS and LGIC in perpetrating their unlawful and
unjustified acts against HYATT. Consequently, in order to
afford complete relief, GOLDSTAR was to be additionally
impleaded as a party-defendant. Hence, in the Amended
Complaint, HYATT impleaded x x x GOLDSTAR as a partydefendant, and all references to LGISC were
correspondingly replaced with LG OTIS.
On December 18, 2000, LG OTIS (LGISC) and
LGIC filed their opposition to HYATTs motion to amend the
complaint. It argued that: (1) the inclusion of GOLDSTAR as
party-defendant would lead to a change in the theory of the
case since the latter took no part in the negotiations which
led to the alleged unfair trade practices subject of the case;
and (b) HYATTs move to amend the complaint at that time
was dilatory, considering that HYATT was aware of the
existence of GOLDSTAR for almost two years before it
sought its inclusion as party-defendant.
On January 8, 2001, the [trial] court admitted the
Amended Complaint. LG OTIS (LGISC) and LGIC filed a
motion for reconsideration thereto but was similarly rebuffed
on October 4, 2001.
On April 12, 2002, x x x GOLDSTAR filed a Motion
to Dismiss the amended complaint, raising the following
grounds: (1) the venue was improperly laid, as neither
HYATT nor defendants reside in Mandaluyong City, where
the original case was filed; and (2) failure to state a cause of
action against [respondent], since the amended complaint
fails to allege with certainty what specific ultimate acts x x x
Goldstar performed in violation of x x x Hyatts rights. In the
Order dated May 27, 2002, which is the main subject of the
present petition, the [trial] court denied the motion to dismiss,
ratiocinating as follows:
Upon perusal of the factual and legal
arguments raised by the movantsdefendants, the court finds that these are
substantially the same issues posed by the
then defendant LG Industrial System Co.
particularly the matter dealing [with] the
issues of improper venue, failure to state
cause of action as well as this courts lack of
jurisdiction. Under the circumstances

obtaining, the court resolves to rule that the


complaint sufficiently states a cause of
action and that the venue is properly laid. It
is significant to note that in the amended
complaint, the same allegations are adopted
as in the original complaint with respect to
the Goldstar Philippines to enable this court
to adjudicate a complete determination or
settlement of the claim subject of the action
it appearing preliminarily as sufficiently
alleged in the plaintiffs pleading that said
Goldstar Elevator Philippines Inc., is being
managed and operated by the same Korean
officers of defendants LG-OTIS Elevator
Company and LG International Corporation.
On June 11, 2002, [Respondent] GOLDSTAR filed a
motion for reconsideration thereto. On June 18, 2002,
without waiving the grounds it raised in its motion to dismiss,
[it] also filed an Answer Ad Cautelam. On October 1, 2002,
[its] motion for reconsideration was denied.
From the aforesaid Order denying x x x Goldstars
motion for reconsideration, it filed the x x x petition for
certiorari [before the CA] alleging grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of the
[trial] court in issuing the assailed Orders dated May 27,
2002 and October 1, 2002.[5]

The Issue
In its Memorandum, petitioner submits this sole issue for our
consideration:
Whether or not the Court of Appeals, in reversing
the ruling of the Regional Trial Court, erred as a matter of
law and jurisprudence, as well as committed grave abuse of
discretion, in holding that in the light of the peculiar facts of
this case, venue was improper[.][7]
This Courts Ruling

The Petition has no merit.


Sole Issue:
Venue
The resolution of this case rests upon a proper understanding of
Section 2 of Rule 4 of the 1997 Revised Rules of Court:
Sec. 2. Venue of personal actions. All other
actions may be commenced and tried where the plaintiff or
any of the principal plaintiff resides, or where the defendant
or any of the principal defendant resides, or in the case of a
non-resident defendant where he may be found, at the
election of the plaintiff.

Ruling of the Court of Appeals


The CA ruled that the trial court had committed palpable error
amounting to grave abuse of discretion when the latter denied respondents
Motion to Dismiss. The appellate court held that the venue was clearly
improper, because none of the litigants resided in Mandaluyong City, where
the case was filed.
According to the appellate court, since Makati was the principal place
of business of both respondent and petitioner, as stated in the latters Articles
of Incorporation, that place was controlling for purposes of determining the
proper venue. The fact that petitioner had abandoned its principal office in
Makati years prior to the filing of the original case did not affect the venue
where personal actions could be commenced and tried.

Hence, this Petition.[6]

Since both parties to this case are corporations, there is a need to


clarify the meaning of residence. The law recognizes two types of persons:
(1) natural and (2) juridical. Corporations come under the latter in
accordance with Article 44(3) of the Civil Code.[8]

Residence is the permanent home -- the place to which, whenever


absent for business or pleasure, one intends to return. [9] Residence is vital
when dealing with venue.[10] A corporation, however, has no residence in the
same sense in which this term is applied to a natural person. This is
precisely the reason why the Court in Young Auto Supply Company v. Court
of Appeals[11] ruled that for practical purposes, a corporation is in a
metaphysical sense a resident of the place where its principal office is
located as stated in the articles of incorporation. [12] Even before this ruling, it
has already been established that the residence of a corporation is the place
where its principal office is established.[13]
This Court has also definitively ruled that for purposes of venue, the
term residence is synonymous with domicile.[14] Correspondingly, the Civil
Code provides:
Art. 51. When the law creating or recognizing them,
or any other provision does not fix the domicile of juridical
persons, the same shall be understood to be the place
where their legal representation is established or where they
exercise their principal functions.[15]
It now becomes apparent that the residence or domicile of a juridical
person is fixed by the law creating or recognizing it. Under Section 14(3) of
the Corporation Code, the place where the principal office of the corporation
is to be located is one of the required contents of the articles of incorporation,
which shall be filed with the Securities and Exchange Commission (SEC).
In the present case, there is no question as to the residence of
respondent. What needs to be examined is that of petitioner. Admittedly,
[16]
the latters principal place of business is Makati, as indicated in its Articles
of Incorporation. Since the principal place of business of a corporation
determines its residence or domicile, then the place indicated in petitioners
articles of incorporation becomes controlling in determining the venue for this
case.
Petitioner argues that the Rules of Court do not provide that when
the plaintiff is a corporation, the complaint should be filed in the location of its
principal office as indicated in its articles of incorporation. [17] Jurisprudence
has, however, settled that the place where the principal office of a
corporation is located, as stated in the articles, indeed establishes its
residence.[18] This ruling is important in determining the venue of an action by
or against a corporation,[19] as in the present case.
Without merit is the argument of petitioner that the locality stated in
its Articles of Incorporation does not conclusively indicate that its principal
office is still in the same place. We agree with the appellate court in its

observation that the requirement to state in the articles the place where the
principal office of the corporation is to be located is not a meaningless
requirement. That proviso would be rendered nugatory if corporations were
to be allowed to simply disregard what is expressly stated in their Articles of
Incorporation.[20]
Inconclusive are the bare allegations of petitioner that it had closed
its Makati office and relocated to Mandaluyong City, and that respondent was
well aware of those circumstances. Assuming arguendo that they transacted
business with each other in the Mandaluyong office of petitioner, the fact
remains that, in law, the latters residence was still the place indicated in its
Articles of Incorporation. Further unacceptable is its faulty reasoning that the
ground for the CAs dismissal of its Complaint was its failure to amend its
Articles of Incorporation so as to reflect its actual and present principal
office. The appellate court was clear enough in its ruling that the Complaint
was dismissed because the venue had been improperly laid, not because of
the failure of petitioner to amend the latters Articles of Incorporation.
Indeed, it is a legal truism that the rules on the venue of personal
actions are fixed for the convenience of the plaintiffs and their witnesses.
Equally settled, however, is the principle that choosing the venue of an action
is not left to a plaintiffs caprice; the matter is regulated by the Rules of Court.
[21]
Allowing petitioners arguments may lead precisely to what this Court
was trying to avoid in Young Auto Supply Company v. CA:[22] the creation of
confusion and untold inconveniences to party litigants. Thus enunciated the
CA:
x x x. To insist that the proper venue is the actual
principal office and not that stated in its Articles of
Incorporation would indeed create confusion and work untold
inconvenience. Enterprising litigants may, out of some
ulterior motives, easily circumvent the rules on venue by the
simple expedient of closing old offices and opening new
ones in another place that they may find well to suit their
needs.[23]
We find it necessary to remind party litigants, especially corporations,
as follows:
The rules on venue, like the other procedural rules,
are designed to insure a just and orderly administration of
justice or the impartial and evenhanded determination of
every action and proceeding. Obviously, this objective will
not be attained if the plaintiff is given unrestricted freedom to
choose the court where he may file his complaint or petition.

The choice of venue should not be left to the


plaintiffs whim or caprice. He may be impelled by some
ulterior motivation in choosing to file a case in a particular
court even if not allowed by the rules on venue. [24]
WHEREFORE, the Petition is hereby DENIED, and the assailed
Decision and Resolution AFFIRMED. Costs against petitioner.
SO ORDERED.