ACTIONS

Domagas v. Jensen L-158407, Jan. 17, 2005

Banco Espanol v. Palanca 37 Phil 921
Hernandez v. Rural Bank 81 SCRA 75
Ragray v. Chae Kyung Lee 18 SCRA 450
JURISDICTION
Aleban v. China 22 SCRA 748
Tijam v. Sibonghanoy 23 SCRA 29
De Leon v. CA 245 SCRA 166
Calimlim v. Ramsey 118 SCRA 299
Amarganda v. CA 166 SCRA 203
Lapitan v. Scandia 24 SCRA 479
Good Dev't v. Tutaan 73 SCRA 89
Calo v. Ajax 22 SCRA 996
VENUE
Polytrade v. Blanco 30 SCRA 187
Unimaster v. CA 267 SCRA 759
De Guzman v. Canate Dec. 17, 1975
Sweetlines v. Tevez 83 SCRA 361
Piltel v. Tecson May 7, 2004
RETROACTIVITY OF RULES
Bermejo v. Banares 31 SCRA 764
PCI v. Go Ko 454 SCRA 586
Sun Insurance v. Asuncion 170 SCRA 274
Alvero v. Dela Rosa 76 Phil 428
CONLU v. CA 106 Phil 940

SHOJI v. Harvey 43 Phil 33

Rilloraga v. Arciaga L-23848, Oct. 31, 1967
Liam v. Olympic Sawmill L-30771, May 26,1984
Aldoy v. Camilon, L-60316, Jan. 31, 1983

G.R. No. 130730

October 19, 2001

GENER v De Leon and Faustino

FACTS:
On April 30, 1990, respondent spouses initiated before the MTC of Bulacan an action for
forcible entry against petitioner. They alleged that they are the original claimants and
actual possessors in good faith under a bona fide claim of ownership of a parcel of
agricultural land situated at Poblacion, Norzagaray, Bulacan, They were in peaceful
possession and cultivation of said land until May 8, 1989 when petitioner allegedly
through force, threat and intimidation, unlawfully entered the property and deprived
respondents of the possession thereof, removing the barbed wire fence placed by
respondents on the northern boundary of the land in dispute and transferred it to the
eastern boundary.
Petitioner,denied the material allegations of the complaint and instead alleged that he is
the real owner and lawful and actual possessor of the land in dispute evidenced by a
notarized deed of sale executed by the heir of the previous owner of the land. He
further averred that it was respondents who forcibly entered his lot in question as
evidenced by two (2) criminal cases which petitioner filed, namely, (a) Criminal Case No.

3998 for malicious mischief against Rosendo Buen and Ignacio Cadungcol alias Lolong,
two (2) alleged helpers of the land of Gregorio de Leon, who allegedly entered the
disputed land on October 24, 1988 and destroyed coconut trees, papaya and langka
trees which belonged to petitioner, and (b) Criminal Case No. 4043 against Hugo de
Leon and Rolly de Leon, brothers of Gregorio de Leon, who allegedly entered the
disputed land on March 12, 1989 and destroyed mango trees and other plants belonging
to the petitioner Gener. Thus, considering that his occupation of the land in dispute
allegedly started on October 10, 1988, the Municipal Trial Court has no jurisdiction over
the action since the forcible entry suit filed by respondents was filed beyond the one
year period.
MTC ruled in favor of respondents. RTC reversed and dismissed the complaint for
forcible entry. In its decision, the Regional Trial Court sustained petitioners claim of
ownership of the property in dispute by virtue of having bought such property from the
heir of the former owner thereof. The Regional Trial Court also declared that petitioner
has been in possession of the disputed property since October 10, 1988. CA reinstated
the decision of the MTC.
ISSUE: Whether or not MTC has jurisdiction over the action of forcible entry
HELD: No. MTC has no jurisdiction over the action of forcible entry
In ejectment cases, the only issue for resolution is who is entitled to the physical or
material possession of the property involved, independent of any claim of ownership set
forth by any of the party-litigants. Anyone of them who can prove prior
possession de facto may recover such possession even from the owner
himself.16 Ejectment does not depend on title for relief; the criterion is the right to
possession.17 Thus, priority in time should be the pivotal point in resolving the issue of
possession.
Section 1, Rule 70 of the Revised Rules of Court18 requires that in actions for forcible
entry the plaintiff is allegedly deprived of the possession of land or building by force,
intimidation, threat, strategy, or stealth and that the action shall be filed within one
year from the time of such unlawful deprivation of possession. This requirement implies
that the possession of the disputed land by the defendant is unlawful from the
beginning as he acquired possession thereof by unlawful means. The plaintiff must
allege and prove that he was in prior physical possession of the property in litigation
until he was deprived thereof by the defendant. The one year period within which
to bring an action for forcible entry is generally counted from the date of
actual entry by the defendant on the land.19
To support their allegation of prior possession, herein respondentsprimarily relied upon
the testimonies of Ignacio Cadungol, Teodoro Mendoza, Andres Palad, Balagtas P. San
Pedro, Marcelino Samson, Norman Maclang and respondent Zenaida Faustino. The
appellate court made much of the testimony that it was petitioner who forcibly excluded
respondents from possession of the land on May 8, 1989. In the words of the appellate

court, the "ousting force came in the form of man and machine: [petitioners] son Rolly
Gener and his ramming jeep."
However, the Municipal Trial Court and Court of Appeals totally overlooked the fact that
while petitioner was his own sole witness, his testimony of prior possession was
substantiated by several documentary evidence, which were quite damaging to the
existence of respondents alleged cause of action for forcible entry. This Court noted
that there were two (2) incidents that occurred on October 24, 1988 and March 12, 1989
which resulted in the institution by herein petitioner of criminal complaints for malicious
mischief.
As against the mere testimonial evidence relied upon by respondents that they were
forcibly ejected from the land by petitioner on May 8, 1989, the documentary evidence
of petitioners prior possession, more particularly the evidence of the two (2) incidents
of October 24, 1988 and March 12, 1989, must prevail. Oral testimony, depending as it
does exclusively on human memory, is not as reliable as written or documentary
evidence,22especially when said documentary evidence is not opposed. As Judge Limkin
of Georgia once said, "I would rather trust the smallest slip of paper for truth than the
strongest and most retentive memory ever bestowed on mortal man."23
The Municipal Trial Court of Norzagaray should have taken judicial notice of the said
criminal cases involving the subject parcel of land and pending in its docket. While, as a
general rule, courts are not authorized to take judicial notice of the contents of the
records of other cases, even when such cases have been tried or are pending in the
same court, and notwithstanding the fact that both cases may have been tried or are
actually pending before the same judge, 24 this rule is subject to the exception that "in
the absence of objection and as a matter of convenience to all parties, a court may
properly treat all or any part of the original record of the case filed in its archives as
read into the records of a case pending before it, when with the knowledge of the
opposing party, reference is made to it, by name and number or in some other manner
by which it is sufficiently designated." 25Respondents did not impugn nor object to the
evidence of petitioner on the existence of the said criminal cases of malicious mischief
that sprung from the alleged forcible entry of petitioners alleged property. Thus, the
said Municipal Trial Court should have taken judicial notice of these facts in resolving the
issue of prior possession.
In view of the evidence on the possession of petitioner prior to May 8, 1989,
as shown by the incidents on October 24, 1988 and March 12, 1989, the cause
of action of respondents for forcible entry against the petitioner has already
prescribed when they filed the complaint for ejectment on April 30, 1990.
Because forcible entry cases must be filed within one year from the date of actual entry
on the land.26 Forcible entry is a quieting process and the one year time bar to the
ejectment suit is in pursuance of the summary nature of the action. 27After the lapse of
the one year period, the remedies of the party dispossessed of a parcel of land is to file
either an accion publiciana which is a plenary action to recover the right of possession
or an accion reinvindicatoriawhich is an action to recover ownership as well as for the

recovery of possession.28 Consequently, since respondents cause of action for

forcible entry has prescribed, the Municipal Trial Court was without
jurisdiction to hear and decide the subject ejectment case.
G.R. No. L-29791 January 10, 1978
FRANCISCO S. HERNANDEZ and JOSEFA U. ATIENZA, plaintiffs-appellees,
vs.
RURAL BANK OF LUCENA, INC., CENTRAL BANK OF THE PHILIPPINES, in its
capacity as Liquidator of Rural Bank of Lucena, and JOSE S. MARTINEZ in his
capacity as Receiver of Rural Bank of Lucena,defendants-appellants.
FACTS:
Spouses Francisco S. Hernandez and Josefa U. Atienza obtained from the Rural Bank of
Lucena, Inc. a loan of P6,000 secured by a mortgage on their two lots. Three months
later, Lucena Bank became a distress bank.
Before the expiration of the one-year term of the loan, Hernandez went to the Lucena
bank and offered to pay the loan by means of a check for P6,000 drawn against the
bank by a depositor, the San Pablo Colleges. The Bank however refused to accept the
check for because of adverse events that had disrupted the bank's operations. Later,
however, Hernandez sent the check to the Bank by mail with a request that his
mortgage be cancelled. In the meantime, the Monetary Board had decided to liquidate
the Lucena Bank. In the course of the liquidation proceedings and determination of
receivables , the Associate Superintendent of Banks returned the check to Hernandez
and informed him that, according to the Lucena bank's executive vice-president, the
check could not be applied to the payment of Hernandez' loan because the bank was
already closed when he received the check. Moreover, the check was drawn against the
current deposits of the San Pablo Colleges in the Lucena bank which was in the process
of liquidation. Hernandez was advised to settle his account by paying cash or by means
of a chock drawn against a bank other than the Lucena bank.
Hernandez and his wife filed an action in the Court of First Instance at Lipa City to
compel the Rural Bank of Lucena, Inc., the Central Bank as liquidator, and Jose S.
Martinez as receiver, to accept the check and to execute the cancellation of the real
estate mortgage. Central Bank filed a motion to dismiss. It contended that there was
improper venue because, as the action allegedly involved title to real property, it should
have been instituted in Quezon City where the encumbered lots are situated. It further
contended that since the Lucena bank is under liquidation and is in the hands of a
receiver, its properties and assets are in custodia legis and may, therefore, be reached
only by motion or petition in Civil Case No. 50019 of the Court of First Instance of
Manila. The motion was denied. The lower court later ruled in favor of the Hernandez
spouses.

ISSUE: Whether the action be dismissed on the grounds of: a) improper venue; and/or b)
lack of jurisdiction.
HELD: Yes in both cases. The case is dismissed without prejudice to the right of the
Hernandez spouses to take up with the liquidation court the settlement of their
mortgage obligation
As to the issue on venue--

Section 2(a), Rule 4 of the Rules of Court provides that "actions affecting title to, or for
recovery of possession, or for partition or condemnation of, or foreclosure of mortgage
on, real property, shall be commenced and tried in the province where the property or
any part thereof lies".
Note that the rule mentions an action for foreclosure of a real estate mortgage but does
not mention an action for the cancellation of a real mortgage. In the instant case, the
action is primarily to compel the mortgagee to accept payment of the mortgage debt
and to release the mortgage.
That action, which is not expressive included in the enumeration found in
section 2(a) of Rule 4, does not involve the title to the mortgage lots. It is a
personal action and not a real action. The mortgagee has, not foreclosure the
mortgage, Plaintiffs' title is not in question. They are in possession of the
mortgaged lots.
Hence, the venue of plaintiffs' personal action is the place where the defendant or any
of the defendants resides or may be found, or where the plaintiff or any of the plaintiffs
resides, at the election of the plaintiff (Sec. 2[b], Rule 4).
The plaintiffs in their brief confound a real action with an action in rem and a personal
action with an action in personam. They argue that their action is not an action in rem
and, therefore, it could be brought in a place other than the place where the mortgaged
lots are located.
A real action is not the same as an action in rem and a personal action is not the same
as an action in personam.
In a personal action, the plaintiff seeks the recovery of personal property, the
enforcement of a contract or the recovery of damages. In a real action, the plaintiff
seeks the recovery of real property. or, as indicated in section 2(a) of Rule 4, a real
action Is an action affecting tithe to real property or for the recovery of possession. or
for partition or condemnation of, or foreclosure of a mortage on, real property.

An action in personam is an action against a person on the basis of his personal liability,
while an action in rem is an action against the thing itself, instead of against the person
(1 C. J. S. 943-4), Hence, a real action may at the same time be an action in personam
and not necessary an action in rem.
In this case, the plaintiffs alleged in their complaint that they were residents of San
Juan, Batangas, which in their brief (They characterize as their legal residence and
which appears to be their domicile of origin. On the other hand, it is indicated in the
promissory note and mortgage signed by them and in the Torrens title covering the
mortgaged lots that their residence is at 11 Chicago Street, Cubao, Quezon City, which
apparently is the place where the said lots are located, The plaintiffs did not testify
during the trial. So, they have no testimony in the records as to their actual residence.
We hold that the trial court should have dismissed the action because the
venue thereof was improperly laid in Batangas. The term "resides" in section
2[b] of Rule 4 refers to the place of actual residence or domicile.)
San Juan, Batangas might be the place where the plaintiffs have their domicile or legal
residence but there is no question that 11 Chicago Street, Cubao, Quezon City is their
place of abode or the place where they actually reside. So, the action in this case, which
is a personal action to compel the defendants to honor the check in question and to
Cancel the mortgage, should have been filed in Quezon City if the plaintiffs
intended to use their residence as the basis for their choice of venue.
As to the issue on jurisdiction-We hold that the liquidation court or the Manila court has exclusive jurisdiction to
entertain the claim of the Hernandez spouses that their mortgage obligation had
already been extinguished by means of their tender of the check issued by the San
Pablo Colleges.
At the time the Hernandez spouses filed in 1964 their consignation complaint the
Lucena bank was already under liquidation. The Manila court in its order of March
28,1963 had ordered the officers of the Lucena bank to turn over to the Central Bank or
to the receiver, the Superintendent of Banks, all of its assets, properties and papers.
Among the assets turned over to the receiver was the outstanding or unpaid account of
the Hernandez spouses which appears in the inventory as: "393. Hernandez, Francisco
St., 11 Chicago St., Cubao, Q.C. TCT-34262 3/21/61, P6,000.00" (Exh. 4-CB).
And among the papers or obligations turned over to the receiver was Ledger No. 056
evidencing the deposit of the San Pablo Colleges in the Lucena bank in the sum of
P11,890.16. against which the check for P6,000 was drawn. It was that check which the
Hernandez spouses had issued to pay the mortgage debt to the Lucena bank.
Under the section 29 of the Central Bank Act, republic Act No. 265, when the Monetary
Board, upon information submitted by the Superintendent of the Bank, finds a bank to

be insolvent, it shall be forbid the bank to do the business and it shall take care of its
assets according to law.
In that case, if the Monetary Board finds out that the insolvent bank cannot resume
business with safety to its creditors, it shall through the Solicitor General, file a petition
in the Court of First Instance, praying for the assistance and supervision of the court in
the liquidation of the bank's affairs. Thereafter, the Superintendent of Banks, upon order
of the Monetary Board and under the supervision of the court, shall convert to money
the bank's assets. "Subido es que uno de los deberes primordiales de un depositario es
hacerse cargo immediatemente de todol el activo y pasivo de un banco" (Luy Lam & Co.
vs. Mercantile Bank of China, 71 Phil. 573, 576).
The fact the insolvent bank is forbidden to do business, that its assets are
turn over to the Superintendent of Banks, as a receiver, for conversation into
cash, and that its liquidation is undertaken with judicial intervention means
that, as far as lawful and practicable, all claims against the insolvent bank
and that the liquidation court should be filed in the liquidation proceeding.
The judicial liquidation is intended to prevent multiplicity of actions against the
insolvent bank. The lawmaking body contemplated that for convenience only one court,
if possible, should pass upon the claims against the insolvent bank and that the
liquidation court should assist the Superintended of Banks and control his operations.
In the course of the liquidation, contentious cases might arise wherein a full-dress
hearing would be required and legal issues would have to be resolved. Hence, it would
be necessary in justice to all concerned that a Court of First Instance should assist and
supervise the liquidation and should act umpire and arbitrator in the allowance and
disallowance of claims.
The judicial liquidation is a pragmatic arrangement designed to establish due process
and orderliness in the liquidation of the bank, to obviate the proliferation of litigations
and to avoid injustice and arbitrariness.
In the instant case, the Hernandez spouses, after having become cognizant of the fact
that the Lucena bank was under liquidation, chose to file a separate action against that
bank for redemption and damages. Although residents of Cubao, Quezon City, where
the mortgage lots are located and which was the address used by them in dealing with
the Lucena bank, they chose Lipa City as the venue of their action.
G.R. No. L-21450

April 15, 1968

SERAFIN
TIJAM,
vs.
MAGDALENO SIBONGHANOY
BAGUIO, defendants,

ET
alias

GAVINO

AL., plaintiffs-appellees,
SIBONGHANOY

and

LUCIA

MANILA SURETY AND FIDELITY CO., INC. (CEBU BRANCH) bonding company and
defendant-appellant.
FACTS:
Spouses Serafin Tijam and Felicitas Tagalog commenced a civil action against the
spouses Magdaleno Sibonghanoy and Lucia Baguio to recover from them the sum of
P1,908.00, with legal interest thereon from the date of the filing of the complaint until
the whole obligation is paid, plus costs. After trial, court rendered judgment in favor of
the plaintiffs, and later issued a writ of execution. The writ having been returned
unsatisfied, the plaintiffs moved for the issuance of a writ of execution against the
Surety's bond . Subsequently, the Surety moved to quash the writ on the ground that
the same was issued without the required summary hearing As the Court denied the
motion, the Surety appealed to the Court of Appeals on grounds without raising the
issue on jurisdiction.
CA affirmed the appealed decision. Surety then filed Motion to Dismiss on the ground of
lack of jurisdiction against CFI Cebu in view of the effectivity of Judiciary Act of 1948 a
month before the filing of the petition for recovery. Act placed original exclusive
jurisdiction of inferior courts all civil actions for demands not exceeding 2,000 exclusive
of interest. CA set aside its earlier decision and referred the case to SC since it has
exclusive jurisdiction over "all cases in which the jurisdiction of any inferior court is in
issue.
ISSUE: WON Surety is estopped from questioning the jurisdiction of the CFI
Cebu for the first time upon appeal
HELD: Yes.
Upon the filing of the first motion for execution against the counter-bond the Surety not
only filed a written opposition thereto praying for its denial but also asked for an
additional affirmative relief that it be relieved of its liability under the counter-bond
upon the grounds relied upon in support of its opposition lack of jurisdiction of the
court a quo not being one of them.
Then, at the hearing on the second motion for execution against the counter-bond, the
Surety appeared, through counsel, to ask for time within which to file an answer or
opposition thereto. This motion was granted, but instead of such answer or opposition,
the Surety filed the motion to dismiss mentioned heretofore.
A party may be estopped or barred from raising a question in different ways and for
different reasons. Thus we speak of estoppel in pais, or estoppel by deed or by record,
and of estoppel by laches.
Laches, in a general sense is failure or neglect, for an unreasonable and unexplained
length of time, to do that which, by exercising due diligence, could or should have been

done earlier; it is negligence or omission to assert a right within a reasonable time,

warranting a presumption that the party entitled to assert it either has abandoned it or
declined to assert it.
The doctrine of laches or of "stale demands" is based upon grounds of public policy
which requires, for the peace of society, the discouragement of stale claims and, unlike
the statute of limitations, is not a mere question of time but is principally a question of
the inequity or unfairness of permitting a right or claim to be enforced or asserted.
It has been held that a party can not invoke the jurisdiction of a court to sure
affirmative relief against his opponent and, after obtaining or failing to obtain
such relief, repudiate or question that same jurisdiction (Dean vs. Dean, 136 Or.
694, 86 A.L.R. 79). In the case just cited, by way of explaining the rule, it was further
said that the question whether the court had jurisdiction either of the subject-matter of
the action or of the parties was not important in such cases because the party is barred
from such conduct not because the judgment or order of the court is valid and
conclusive as an adjudication, but for the reason that such a practice can not be
tolerated obviously for reasons of public policy.
Furthermore, it has also been held that after voluntarily submitting a cause and
encountering an adverse decision on the merits, it is too late for the loser to question
the jurisdiction or power of the court (Pease vs. Rathbun-Jones etc., 243 U.S. 273, 61 L.
Ed. 715, 37 S. Ct. 283; St. Louis etc. vs. McBride, 141 U.S. 127, 35 L. Ed. 659). And in
Littleton vs. Burgess, 16 Wyo. 58, the Court said that it is not right for a party who has
affirmed and invoked the jurisdiction of a court in a particular matter to secure an
affirmative relief, to afterwards deny that same jurisdiction to escape a penalty.
The facts of this case show that from the time the Surety became a quasi-party on July
31, 1948, it could have raised the question of the lack of jurisdiction of the Court of First
Instance of Cebu to take cognizance of the present action by reason of the sum of
money involved which, according to the law then in force, was within the original
exclusive jurisdiction of inferior courts. It failed to do so. Instead, at several stages of
the proceedings in the court a quo as well as in the Court of Appeals, it invoked the
jurisdiction of said courts to obtain affirmative relief and submitted its case for a final
adjudication on the merits. It was only after an adverse decision was rendered by the
Court of Appeals that it finally woke up to raise the question of jurisdiction. Were we to
sanction such conduct on its part, We would in effect be declaring as useless all the
proceedings had in the present case since it was commenced on July 19, 1948 and
compel the judgment creditors to go up their Calvary once more. The inequity and
unfairness of this is not only patent but revolting.

G.R. No. L-13105

August 25, 1960

LUCINA
vs.
ANATALIO SARMIENTO, defendant-appellee.

BAITO, plaintiff-appellant,

FACTS:
Failing to secure a reconsideration of the order entered by the Court of First Instance of
Samar that dismissed her complaint for support on the ground that it has no jurisdiction,
the amount demanded as support being only P720, the plaintiff Lucina Baito appeals
from the order, contending that the Court has jurisdiction over the action she brought
against her husband Anatalio Sarmiento. The appellant contends that regardless of the
amount claimed or demanded jurisdiction is vested exclusively in Courts of First
Instance, because an action for support is not capable of pecuniary estimation. On the
other hand, the appellee maintains that as the demand for support is only P720 and not
more than P2,000 (now P5,000), a justice of the peace or municipal court has
jurisdiction over the case.
ISSUE: Whether the CFI has jurisdiction over the action for support
HELD: Yes.
An action for support does not involve the determination of the amount to be given as
support, but also the relation of the parties, the right to support created by the relation,
the needs of the claimant, the financial resources of the person from whom the support
is sought, all of which are not capable of pecuniary estimation. For this reason, an action
for support falls within the original jurisdiction of Courts of First Instance under section
44(a) of Republic Act No. 296, as amended by Republic Act No. 2613.
G.R. No. L-60316 January 31, 1983
VIOLETA
ALDAY
and
ERNESTO
Yu, petitioners,
vs.
HONORABLE SERAFIN E. CAMILON, as Judge temporarily presiding over Branch
XXV of the Court of First Instance of Rizal (Pasig), SHERIFF OF
PASIG, respondents.
FACTS:
In Aboitiz & Co Inc. v Violets Alday and Ernesto Yu, the lower court ruled against the
petitioners on August 13, 1981. Copy thereof was received by them on September 1,
1981. Within time, petitioners filed on September 4, 1981 a Notice of Appeal and a cash

appeal bond, but without a Record on Appeal. On March 25, 1982, respondent Judge
issued the order granting execution to enforce the decision of the above case since
petitioners had not perfected an appeal within the reglementary period for failure on
their part to file a Record on Appeal within the prescribed period.
Petitioners justify the non-filing of the Record on Appeal by invoking section 39 of the
Judiciary Reorganization Act of 1980 (Batas Pambansa Blg. 129) providing that "no
record on appeal shall, be required to take an appeal." They claim that the Act was
approved on August 14, 1981 and Section 48 thereof specifically provides that it was to
take effect immediately.
ISSUE: Whether or not the provisions of BP 12, insofar that it eliminates the requirement
of a Record of Appeal, is applicable
HELD: Yes. .
Section 44 of BP Blg. 129 specifically providing that its provisions were to be
immediately carried out in accordance with an Executive Order to be issued by the
President and that the old Courts would continue to function until the completion of the
reorganization as declared by the President.
Nonetheless, in Executive Order No. 864, dated January 17, 1983, the President of the
Philippines had declared that the former Courts were deemed automatically abolished
as of 12:00 o'clock midnight of January 17, 1983. The reorganization having been
declared to have been completed, BP Blg. 129 is now in full force and effect. A Record
on Appeal is no longer necessary for taking an appeal. The same proviso appears in
Section 18 of the Interim Rules aid Guidelines issued by this Court on January 11, 1983.
Being procedural in nature, those provisions may be applied retroactively for the benefit
of petitioners, as appellant.
Statutes regulating the procedure of the courts will be construed as
applicable to action's pending and undetermined at the time of their
passage. Procedural laws are retrospective in that sense and to that
extent (People vs. Sumilang, 77 Phil. 764 [1946]).
G.R. No. L-30771 May 28, 1984
LIAM
LAW, plaintiff-appellee,
vs. OLYMPIC SAWMILL CO. and ELINO LEE CHI, defendants-appellants.
This is an appeal by defendants from a Decision rendered by the then Court of First
Instance of Bulacan. The appeal was originally taken to the then Court of Appeals, which
endorsed it to this instance stating that the issue involved was one of law.
It appears that on or about September 7, 1957, plaintiff loaned P10,000.00, without
interest, to defendant partnership and defendant Elino Lee Chi, as the managing
partner. The loan became ultimately due on January 31, 1960, but was not paid on that
date, with the debtors asking for an extension of three months, or up to April 30, 1960.

On March 17, 1960, the parties executed another loan document. Payment of the
P10,000.00 was extended to April 30, 1960, but the obligation was increased by
P6,000.00 as follows:
That the sum of SIX THOUSAND PESOS (P6,000.00), Philippine currency
shall form part of the principal obligation to answer for attorney's fees,
legal interest, and other cost incident thereto to be paid unto the creditor
and his successors in interest upon the termination of this agreement.
Defendants again failed to pay their obligation by April 30, 1960 and, on September 23,
1960, plaintiff instituted this collection case. Defendants admitted the P10,000.00
principal obligation, but claimed that the additional P6,000.00 constituted usurious
interest.
Upon application of plaintiff, the Trial Court issued, on the same date of September 23,
1960, a writ of Attachment on real and personal properties of defendants located at
Karanglan, Nueva Ecija. After the Writ of Attachment was implemented, proceedings
before the Trial Court versed principally in regards to the attachment.
On January 18, 1961, an Order was issued by the Trial Court stating that "after
considering the manifestation of both counsel in Chambers, the Court hereby allows
both parties to simultaneously submit a Motion for Summary Judgment. 1 The plaintiff filed his
Motion for Summary Judgment on January 31, 1961, while defendants filed theirs on February 2, 196l.

On June 26, 1961, the Trial Court rendered decision ordering defendants to pay plaintiff
"the amount of P10,000.00 plus the further sum of P6,000.00 by way of liquidated
damages . . . with legal rate of interest on both amounts from April 30, 1960." It is from
this judgment that defendants have appealed.
We have decided to affirm.
Under Article 1354 of the Civil Code, in regards to the agreement of the parties relative
to the P6,000.00 obligation, "it is presumed that it exists and is lawful, unless the debtor
proves the contrary". No evidentiary hearing having been held, it has to be concluded
that defendants had not proven that the P6,000.00 obligation was illegal. Confirming the
Trial Court's finding, we view the P6,000.00 obligation as liquidated damages suffered
by plaintiff, as of March 17, 1960, representing loss of interest income, attorney's fees
and incidentals.
The main thrust of defendants' appeal is the allegation in their Answer that the
P6,000.00 constituted usurious interest. They insist the claim of usury should have been
deemed admitted by plaintiff as it was "not denied specifically and under oath". 3
Section 9 of the Usury Law (Act 2655) provided:
SEC. 9. The person or corporation sued shall file its answer in writing
under oath to any complaint brought or filed against said person or
corporation before a competent court to recover the money or other
personal or real property, seeds or agricultural products, charged or
received in violation of the provisions of this Act. The lack of taking an

oath to an answer to a complaint will mean the admission of the facts

contained in the latter.
The foregoing provision envisages a complaint filed against an entity which has
committed usury, for the recovery of the usurious interest paid. In that case, if the
entity sued shall not file its answer under oath denying the allegation of usury, the
defendant shall be deemed to have admitted the usury. The provision does not apply to
a case, as in the present, where it is the defendant, not the plaintiff, who is alleging
usury.
Moreover, for sometime now, usury has been legally non-existent. Interest can now be
charged as lender and borrower may agree upon. 4 The Rules of Court in regards to
allegations of usury, procedural in nature, should be considered repealed with retroactive
effect.
Statutes regulating the procedure of the courts will be construed as
applicable to actions pending and undetermined at the time of their
passage. Procedural laws are retrospective in that sense and to that
extent. 5
... Section 24(d), Republic Act No. 876, known as the Arbitration Law, which
took effect on 19 December 1953, and may be retroactively applied to the
case at bar because it is procedural in nature. ... 6

WHEREFORE, the appealed judgment is hereby affirmed, without pronouncement as to

costs.
SO ORDERED.
G.R. No. L-286

March 29, 1946

FREDESVINDO
S.
ALVERO, petitioner,
vs.
M.L. DE LA ROSA, Judge of First Instance of Manila, JOSE R. VICTORIANO, and
MARGARITA VILLARICA,respondents.
Revilla
and
Francisco Claravall for respondents.

Palma

for

petitioner.

DE JOYA, J.:
This is an original petition for certiorari filed in this court.
The record shows that, on June 25, 1945, respondent Jose R. Victoriano had filed a
complaint, in the Court of First Instance of the City of Manila, against petitioner
Fredesvindo S. Alvero and one Margarita Villarica, alleging two causes of action, to wit,
(1) to declare in force the contract of sale, made on October 1, 1940, between said Jose
R. Victoriano and Margarita Villarica, of two (2) parcels of land in the Manotoc
subdivision, Balintawak, in the barrio of Calaanan, municipality of Caloocan, Province of
Rizal, with a combined area of 480 square meters, which land was subsequently sold by
said Villarica, in favor of petitioner Fredesvindo S. Alvero, on December 31, 1944, for the

sum of P100,000 in Japanese military notes; and (2) to declare said subsequent sale null
and void.
On July 7, 1945, Margarita Villarica filed an answer to said complaint, expressly
admitting having sold said land to Fresdesvindo S. Alvero, for P100,000, in December,
1944, due to the imperative necessity of raising funds with which to provide for herself
and family, and that she did not remember the previous sale; at the same time, offering
to repurchase said land from Fredesvindo S. Alvero in the sum of P5,000, but that the
latter refused to accept the offer.
On July 13, 1945, Fredesvindo S. Alvero, in answering said complaint, denied the
allegations made therein, and claimed exclusive ownership of the land in question, and
at the same time set up a counterclaim and crossclaim in his answer, demanding from
Jose R. Victoriano a P200-monthly rent on said property, beginning from February, 1945,
plus P2,000 as damages.
On July 21, 1945, Jose R. Victoriano filed an answer to said counterclaim, denying
Fredesvindo S. Alvero's alleged ownership over said land, and the other allegations
contained in Alvero's answer.
After the trial of the case before the Hon. Mariano L. de la Rosa, Judge of the Court of
First Instance of the City of Manila, one of the respondents in this case, on November
16, 1945, said respondent judge rendered his decision, in which it was declared that the
two (2) parcels of land in question, with a combined area of 480 square meters had
been sold by Margarita Villarica to Jose R. Victoriano, since October 1, 1940, for the sum
of P6,000, on the condition that the purchaser should make a down payment of P1,700,
and a monthly payment of P76.86 in 120 equal monthly installments; that Jose R.
Victoriano continued making said monthly payments until December, 1941, but that
owing to the war-time conditions then existing, Margarita Villarica agreed verbally to
suspend such payments until the restoration of peace; that immediately after said sale
of said land to him, Jose R. Victoriano took possession thereof and made improvements
thereon to the amount of P800, and continued occupying said property until December,
1944, when he abandoned the same to go to evacuation places, but returned thereto in
February, 1945; that Margarita Villarica, having forgotten the sale of said land to Jose R.
Victoriano, sold the same for P100,000 in Japanese military notes, on December 31,
1944, to Fredesvindo S. Alvero, but afterwards offered to repurchase said property from
him, for the sum of P8,000 in genuine Philippine currency, after liberation; that
Fredesvindo S. Alvero presented the deed of sale, executed in his favor, to the Register
of Deeds of the City of Manila, on January 3, 1945, and took possession of said property
in December, 1944, but afterwards found Jose R. Victoriano in the premises in February,
1945; that in the contract of sale executed by Margarita Villarica, in favor of Jose R.
Victoriano, it was agreed that, upon failure of the purchaser to make payments of three
(3) successive mothly installments, the vendor would be free to sell the property again,
forfeiting the payments made, except in the case of force majeure; that there was really
a verbal agreement between Margarita Villarica and Jose Victoriano, made in February,
1942, for the suspension of the payment of the monthly installments until the
restoration of peace; and that although Jose R. Victoriano had presented the deed of
sale, executed in his favor, to the Register of Deeds, in Pasig, Rizal, like Fredesvindo S.
Alvero, he had also failed to secure the transfer of title to his name. And considering
that Jose R. Victoriano's document was older than that of Fredesvindo S. Alvero, and that
he had taken possession of said property, since October 1, 1940, the respondent judge
rendered his decision in favor of Jose R. Victoriano, adjudging to him the title over the

property in question, including all the improvements existing thereon, and dismissed the
counterclaim.
On November 28, 1945, Fredesvindo S. Alvero was notified of said decision; and on
December 27, 1945, he filed a petition for reconsideration and new trial, which was
denied on January 3, 1946; and of said order he was notified on January 7, 1946.
On January 8, 1946, Fredesvindo S. Alvero filed his notice of appeal and record on
appeal simultaneously in the lower court, without filing the P60-appeal bond.
On January 14, 1946, Jose R. Victoriano filed a petition to dismiss the appeal, and at the
same time, asked for the execution of the judgment.
On January 15, 1946, Fredesvindo S. Alvero filed an opposition to said motion to dismiss,
alleging that on the very same day, January 15, 1946, said appeal bond for P60 had
been actually filed, and allege as an excuse, for not filing the said appeal bond, in due
time, the illness of his lawyer's wife, who died on January 10, 1946, and buried the
following day.
On January 17, 1946, the respondent judge, Hon. Mariano L. de la Rosa, ordered the
dismissal of the appeal, declaring that, although the notice of appeal and record on
appeal had been filed in due time, the P60-appeal bond was filed too late.
On January 23, 1946, Fredesvindo S. Alvero filed a petition for the reconsideration of the
said order dated January 17, 1946, dismissing his appeal; and said petition for
reconsideration was denied on January 29, 1946. Hence, this petition for certiorari.
On February 11, 1946, the respondents filed their answer to the petition for certiorari,
alleging (1) that said petition is defective in form as well as in substance; (2) that there
has been no excusable negligence, on the part of the petitioner, or grave abuse of
discretion on the part of the respondent judge, in the instant case.
As already stated, the decision rendered by the respondent judge, Hon. Mariano L. de la
Rosa, was dated November 16, 1945, of which counsel for Fredesvindo S. Alvero was
notified on November 28, 1945; that his motion for reconsideration and new trial was
filed on December 27, 1945, and denied on January 3, 1946, and that said counsel for
Alvero was notified of said order on January 7, 1946; and that he filed his notice of
appeal and record on appeal the following day, to wit, January 8, 1946, and that the
P60-appeal bond was filed only on January 15, 1946.
According to the computation erroneously made by the court, the last day for filing and
perfecting the appeal, in this case, was January 8, 1946, or which date, Fredesvindo S.
Alvero should have filed his (1) notice of appeal, (2) record on appeal, and (3) appeal
bond. But the P60-appeal bond was filed only on January 15, 1946.
Failure to perfect the appeal, within the time prescribed by the rules of court, will cause
the judgment to become final, and the certification of the record on appeal thereafter,
cannot restore the jurisdiction which has been lost. (Roman Catholic Bishop of
Tuguegarao vs. Director of Lands, 34 Phil., 623; Estate of Cordoba and
Zarate vs.Alabado, 34 Phil., 920; and Bermudez vs. Director of Lands, 36 Phil., 774.)

The period within which the record on appeal and appeal bond should be perfected and
filed may, however, be extended by order of the court, upon application made, prior to
the expiration of the original period. (Layda vs.Legaspi, 39 Phil., 83.)
Rules of courts, promulgated by authority of law, have the force and effect of law; and
rules of court prescribing the time within which certain acts must be done, or certain
proceedings taken, are considered absolutely indispensable to the prevention of
needless delays and to the orderly and speedy discharge of judicial business.
(Shioji vs. Harvey, 43 Phil., 333.)
Strict compliance with the rules of court has been held mandatory and imperative, so
that failure to pay the docket fee in the Supreme Court, within the period fixed for that
purpose, will cause the dismissal of the appeal. (Salaveria vs. Albindo, 39Phil., 922.) In
the same manner, on failure of the appellant in a civil case to serve his brief, within the
time prescribed by said rules, on motion of the appellee and notice to the appellant, or
on its own motion, the court may dismiss the appeal. (Shioji vs. Harvey, 43 Phil., 333.)
Counsel for the petitioner Fredesvindo Alvero alleges as an excuse, for his failure to
perfect and file his appeal, in due time, the illness of his wife, which ended in her death
on January 10, 1946, and by which he was greatly affected.
How little, indeed, does one realize that in life he lives in the midst of death; and that
every that passes in a step nearer towards eternity. Yet, notwithstanding the inexorable
laws of human destiny, every mortal fears death, and such fear is worse than death
itself. That is perhaps the reason why those feeling its approach, in their last moments,
want to be surrounded by the ones dearest to their heart, to hear from them words of
tenderness and eternal truth, and thus receive as balm their love and the cheering
influence of the traditional faith, and the consolation of religious hope.
The virtuous and loving wife is the peculiar gift of heaven, and Mother is the name for
God in the innocent lips and hearts of adoring children. "She looketh well to the ways of
her household, and eateth not the bread of idleness." "And her daughters arise up and
call her blessed." And when she dies in the bosom of God, her children find solace in the
contemplation of her eternal bliss, as mirrored in her tranquil beauty.
It is not, therefore, difficult to understand the state of mind of the attorney, and his
intense devotion and ardent affection towards his dying wife.
Unfortunately, counsel for petitioner has created a difficult situation. In his motion for
reconsideration and new trial, dated December 27, 1945, he did not point out
specifically the findings or conclusions in the judgment, are not supported by the
evidence or which are contrary to law, making express reference to the pertinent
evidence or legal provisions, as expressly required by Rule 37, section 2, paragraph (c)
of the Rules of Court. Motions of that kind have been considered as motions pro
forma intended merely to delay the proceeding, and, as such, they cannot and will not
interrupt or suspend the period of time for the perfection of the appeal. (Valdez vs. Jugo,
74 Phil., 49, and Reyes vs. Court of Appeals and Bautista, 74 Phil., 235.) Hence, the
period for perfecting herein petitioner's appeal commenced from November 28, 1945,
when he was notified of the judgment rendered in the case, and expired on December
28, 1945; and, therefore, his notice of appeal and record on appeal filed on January 8,

1946, were filed out of time, and much more so his appeal bond, which was only filed on
January 15, 1946.
It is futile to speak of hospitals, doctors and nurses to minister alone to the needs of the
sick and the dying, who are dearest to us, for our reasoning powers are of little avail
when sorrow or despair rages within.
But human laws are inflexible and no personal consideration should stand in the way of
performing a legal duty.
The attorney for petitioner Fredesvindo S. Alvero could have asked for an extension of
time, within which to file and perfect his appeal, in the court below; but he had failed to
do so, and he must bear the consequences of his act. A strict observance of the rules of
court, which have been considered indispensable to the prevention of needless delays
and to the orderly and speedy dispatch of judicial business, is an imperative necessity.
It may not be amiss to state in this connection that no irreparable damage has been
caused to the petitioner Fredesvindo S. Alvero, as Margarita Villarica, the vendor to the
two, of the land in question, has shown readiness to repair the damage done.
No showing having been made that there had been merely excusable negligece, on the
part of the attorney for petitioner Fredesvindo S. Alvero, and that there had been gave
abuse of sound judicial discretion, on the part of the respondent judge, the petition
for certiorari filed in this case, is, therefore, hereby dismissed, without costs. So ordered.
Moran, C.J., Ozaeta, Paras, Jaranilla, Feria, Pablo, Perfecto, Hilado, Bengzon, and Briones
JJ., concur.
G.R. Nos. 79937-38 February 13, 1989
SUN
INSURANCE
OFFICE,
LTD.,
(SIOL),
E.B.
PHILIPPS
and
D.J.
WARBY, petitioners,
vs.
HON. MAXIMIANO C. ASUNCION, Presiding Judge, Branch 104, Regional Trial
Court, Quezon City and MANUEL CHUA UY PO TIONG, respondents.
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles Law Offices for petitioners.
Tanjuatco, Oreta, Tanjuatco, Berenguer & Sanvicente Law Offices for private
respondent.

GANCAYCO, J.:
Again the Court is asked to resolve the issue of whether or not a court acquires
jurisdiction over a case when the correct and proper docket fee has not been paid.
On February 28, 1984, petitioner Sun Insurance Office, Ltd. (SIOL for brevity) filed a
complaint with the Regional Trial Court of Makati, Metro Manila for the consignation of a
premium refund on a fire insurance policy with a prayer for the judicial declaration of its

nullity against private respondent Manuel Uy Po Tiong. Private respondent as declared in

default for failure to file the required answer within the reglementary period.
On the other hand, on March 28, 1984, private respondent filed a complaint in the
Regional Trial Court of Quezon City for the refund of premiums and the issuance of a writ
of preliminary attachment which was docketed as Civil Case No. Q-41177, initially
against petitioner SIOL, and thereafter including E.B. Philipps and D.J. Warby as
additional defendants. The complaint sought, among others, the payment of actual,
compensatory, moral, exemplary and liquidated damages, attorney's fees, expenses of
litigation and costs of the suit. Although the prayer in the complaint did not quantify the
amount of damages sought said amount may be inferred from the body of the complaint
to be about Fifty Million Pesos (P50,000,000.00).
Only the amount of P210.00 was paid by private respondent as docket fee which
prompted petitioners' counsel to raise his objection. Said objection was disregarded by
respondent Judge Jose P. Castro who was then presiding over said case. Upon the order
of this Court, the records of said case together with twenty-two other cases assigned to
different branches of the Regional Trial Court of Quezon City which were under
investigation for under-assessment of docket fees were transmitted to this Court. The
Court thereafter returned the said records to the trial court with the directive that they
be re-raffled to the other judges in Quezon City, to the exclusion of Judge Castro. Civil
Case No. Q-41177 was re-raffled to Branch 104, a sala which was then vacant.
On October 15, 1985, the Court en banc issued a Resolution in Administrative Case No.
85-10-8752-RTC directing the judges in said cases to reassess the docket fees and that
in case of deficiency, to order its payment. The Resolution also requires all clerks of
court to issue certificates of re-assessment of docket fees. All litigants were likewise
required to specify in their pleadings the amount sought to be recovered in their
complaints.
On December 16, 1985, Judge Antonio P. Solano, to whose sala Civil Case No. Q-41177
was temporarily assigned, issuedan order to the Clerk of Court instructing him to issue a
certificate of assessment of the docket fee paid by private respondent and, in case of
deficiency, to include the same in said certificate.
On January 7, 1984, to forestall a default, a cautionary answer was filed by petitioners.
On August 30,1984, an amended complaint was filed by private respondent including
the two additional defendants aforestated.
Judge Maximiano C. Asuncion, to whom Civil Case No. Q41177 was thereafter assigned,
after his assumption into office on January 16, 1986, issued a Supplemental Order
requiring the parties in the case to comment on the Clerk of Court's letter-report
signifying her difficulty in complying with the Resolution of this Court of October 15,
1985 since the pleadings filed by private respondent did not indicate the exact amount
sought to be recovered. On January 23, 1986, private respondent filed a "Compliance"
and a "Re-Amended Complaint" stating therein a claim of "not less than Pl0,000,000. 00
as actual compensatory damages" in the prayer. In the body of the said second
amended complaint however, private respondent alleges actual and compensatory
damages and attorney's fees in the total amount of about P44,601,623.70.

On January 24, 1986, Judge Asuncion issued another Order admitting the second
amended complaint and stating therein that the same constituted proper compliance
with the Resolution of this Court and that a copy thereof should be furnished the Clerk
of Court for the reassessment of the docket fees. The reassessment by the Clerk of
Court based on private respondent's claim of "not less than P10,000,000.00 as actual
and compensatory damages" amounted to P39,786.00 as docket fee. This was
subsequently paid by private respondent.
Petitioners then filed a petition for certiorari with the Court of Appeals questioning the
said order of Judie Asuncion dated January 24, 1986.
On April 24, 1986, private respondent filed a supplemental complaint alleging an
additional claim of P20,000,000.00 as d.qmages so the total claim amounts to about
P64,601,623.70. On October 16, 1986, or some seven months after filing the
supplemental complaint, the private respondent paid the additional docket fee of
P80,396.00. 1
On August 13, 1987, the Court of Appeals rendered a decision ruling, among others, as
follows:
WHEREFORE, judgment is hereby rendered:
1. Denying due course to the petition in CA-G.R. SP No. 1, 09715 insofar as
it seeks annulment of the order
(a) denying petitioners' motion to dismiss the complaint, as amended, and
(b) granting the writ of preliminary attachment, but giving due course to
the portion thereof questioning the reassessment of the docketing fee,
and requiring the Honorable respondent Court to reassess the docketing
fee to be paid by private respondent on the basis of the amount of
P25,401,707.00. 2
Hence, the instant petition.
During the pendency of this petition and in conformity with the said judgment of
respondent court, private respondent paid the additional docket fee of P62,432.90 on
April 28, 1988. 3
The main thrust of the petition is that the Court of Appeals erred in not finding that the
lower court did not acquire jurisdiction over Civil Case No. Q-41177 on the ground of
nonpayment of the correct and proper docket fee. Petitioners allege that while it may be
true that private respondent had paid the amount of P182,824.90 as docket fee as
herein-above related, and considering that the total amount sought to be recovered in
the amended and supplemental complaint is P64,601,623.70 the docket fee that should
be paid by private respondent is P257,810.49, more or less. Not having paid the same,
petitioners contend that the complaint should be dismissed and all incidents arising
therefrom should be annulled. In support of their theory, petitioners cite the latest ruling
of the Court in Manchester Development Corporation vs. CA, 4 as follows:

The Court acquires jurisdiction over any case only upon the payment of
the prescribed docket fee. An amendment of the complaint or similar
pleading will not thereby vest jurisdiction in the Court, much less the
payment of the docket fee based on the amounts sought in the amended
pleading. The ruling in the Magaspi Case in so far as it is inconsistent with
this pronouncement is overturned and reversed.
On the other hand, private respondent claims that the ruling in Manchester cannot
apply retroactively to Civil Case No. Q41177 for at the time said civil case was filed in
court there was no such Manchester ruling as yet. Further, private respondent avers
that what is applicable is the ruling of this Court in Magaspi v. Ramolete, 5wherein this
Court held that the trial court acquired jurisdiction over the case even if the docket fee paid
was insufficient.
The contention that Manchester cannot apply retroactively to this case is untenable.
Statutes regulating the procedure of the courts will be construed as applicable to
actions pending and undetermined at the time of their passage. Procedural laws are
retrospective in that sense and to that extent. 6
In Lazaro vs. Endencia and Andres, 7 this Court held that the payment of the full amount of
the docket fee is an indispensable step for the perfection of an appeal. In a forcible entry
and detainer case before the justice of the peace court of Manaoag, Pangasinan, after notice
of a judgment dismissing the case, the plaintiff filed a notice of appeal with said court but he
deposited only P8.00 for the docket fee, instead of P16.00 as required, within the
reglementary period of appeal of five (5) days after receiving notice of judgment. Plaintiff
deposited the additional P8.00 to complete the amount of the docket fee only fourteen (14)
days later. On the basis of these facts, this court held that the Court of First Instance did
notacquire jurisdiction to hear and determine the appeal as the appeal was not thereby
perfected.
In Lee vs. Republic, 8 the petitioner filed a verified declaration of intention to become a
Filipino citizen by sending it through registered mail to the Office of the Solicitor General in
1953 but the required filing fee was paid only in 1956, barely 5V2 months prior to the filing
of the petition for citizenship. This Court ruled that the declaration was not filed in
accordance with the legal requirement that such declaration should be filed at least one year
before the filing of the petition for citizenship. Citing Lazaro, this Court concluded that the
filing of petitioner's declaration of intention on October 23, 1953 produced no legal effect
until the required filing fee was paid on May 23, 1956.
In Malimit vs. Degamo, 9 the same principles enunciated in Lazaro and Lee were applied. It
was an original petition for quo warranto contesting the right to office of proclaimed
candidates which was mailed, addressed to the clerk of the Court of First Instance, within the
one-week period after the proclamation as provided therefor by law. 10 However, the required
docket fees were paid only after the expiration of said period. Consequently, this Court held
that the date of such payment must be deemed to be the real date of filing of aforesaid
petition and not the date when it was mailed.
Again, in Garica vs, Vasquez, 11 this Court reiterated the rule that the docket fee must be
paid before a court will act on a petition or complaint. However, we also held that said rule is
not applicable when petitioner seeks the probate of several wills of the same decedent as he
is not required to file a separate action for each will but instead he may have other wills
probated in the same special proceeding then pending before the same court.

Then in Magaspi, 12 this Court reiterated the ruling in Malimit and Lee that a case is deemed
filed only upon payment of the docket fee regardless of the actual date of its filing in court.
Said case involved a complaint for recovery of ownership and possession of a parcel of land
with damages filed in the Court of First Instance of Cebu. Upon the payment of P60.00 for
the docket fee and P10.00 for the sheriffs fee, the complaint was docketed as Civil Case No.
R-11882. The prayer of the complaint sought that the Transfer Certificate of Title issued in
the name of the defendant be declared as null and void. It was also prayed that plaintiff be
declared as owner thereof to whom the proper title should be issued, and that defendant be
made to pay monthly rentals of P3,500.00 from June 2, 1948 up to the time the property is
delivered to plaintiff, P500,000.00 as moral damages, attorney's fees in the amount of
P250,000.00, the costs of the action and exemplary damages in the amount of P500,000.00.
The defendant then filed a motion to compel the plaintiff to pay the correct amount of
the docket fee to which an opposition was filed by the plaintiff alleging that the action
was for the recovery of a parcel of land so the docket fee must be based on its assessed
value and that the amount of P60.00 was the correct docketing fee. The trial court
ordered the plaintiff to pay P3,104.00 as filing fee.
The plaintiff then filed a motion to admit the amended complaint to include the Republic
as the defendant. In the prayer of the amended complaint the exemplary damages
earlier sought was eliminated. The amended prayer merely sought moral damages as
the court may determine, attorney's fees of P100,000.00 and the costs of the action.
The defendant filed an opposition to the amended complaint. The opposition
notwithstanding, the amended complaint was admitted by the trial court. The trial court
reiterated its order for the payment of the additional docket fee which plaintiff assailed
and then challenged before this Court. Plaintiff alleged that he paid the total docket fee
in the amount of P60.00 and that if he has to pay the additional fee it must be based on
the amended complaint.
The question posed, therefore, was whether or not the plaintiff may be considered to
have filed the case even if the docketing fee paid was not sufficient. In Magaspi, We
reiterated the rule that the case was deemed filed only upon the payment of the correct
amount for the docket fee regardless of the actual date of the filing of the complaint;
that there was an honest difference of opinion as to the correct amount to be paid as
docket fee in that as the action appears to be one for the recovery of property the
docket fee of P60.00 was correct; and that as the action is also one, for damages, We
upheld the assessment of the additional docket fee based on the damages alleged in
the amended complaint as against the assessment of the trial court which was based on
the damages alleged in the original complaint.
However,
as
aforecited,
this
Court
overturned Magaspi in Manchester. Manchester involves an action for torts and
damages and specific performance with a prayer for the issuance of a temporary
restraining order, etc. The prayer in said case is for the issuance of a writ of preliminary
prohibitory injunction during the pendency of the action against the defendants'
announced forfeiture of the sum of P3 Million paid by the plaintiffs for the property in
question, the attachment of such property of defendants that may be sufficient to
satisfy any judgment that may be rendered, and, after hearing, the issuance of an order
requiring defendants to execute a contract of purchase and sale of the subject property
and annul defendants' illegal forfeiture of the money of plaintiff. It was also prayed that
the defendants be made to pay the plaintiff jointly and severally, actual, compensatory
and exemplary damages as well as 25% of said amounts as may be proved during the

trial for attorney's fees. The plaintiff also asked the trial court to declare the tender of
payment of the purchase price of plaintiff valid and sufficient for purposes of payment,
and to make the injunction permanent. The amount of damages sought is not specified
in the prayer although the body of the complaint alleges the total amount of over P78
Millon allegedly suffered by plaintiff.
Upon the filing of the complaint, the plaintiff paid the amount of only P410.00 for the
docket fee based on the nature of the action for specific performance where the amount
involved is not capable of pecuniary estimation. However, it was obvious from the
allegations of the complaint as well as its designation that the action was one for
damages and specific performance. Thus, this court held the plaintiff must be assessed
the correct docket fee computed against the amount of damages of about P78 Million,
although the same was not spelled out in the prayer of the complaint.
Meanwhile, plaintiff through another counsel, with leave of court, filed an amended
complaint on September 12, 1985 by the inclusion of another co-plaintiff and
eliminating any mention of the amount of damages in the body of the complaint. The
prayer in the original complaint was maintained.
On October 15, 1985, this Court ordered the re-assessment of the docket fee in the said
case and other cases that were investigated. On November 12, 1985, the trial court
directed the plaintiff to rectify the amended complaint by stating the amounts which
they were asking for. This plaintiff did as instructed. In the body of the complaint the
amount of damages alleged was reduced to P10,000,000.00 but still no amount of
damages was specified in the prayer. Said amended complaint was admitted.
Applying the principle in Magaspi that "the case is deemed filed only upon payment of
the docket fee regardless of the actual date of filing in court," this Court held that the
trial court did not acquire jurisdiction over the case by payment of only P410.00 for the
docket fee. Neither can the amendment of the complaint thereby vest jurisdiction upon
the Court. For all legal purposes there was no such original complaint duly filed which
could be amended. Consequently, the order admitting the amended complaint and all
subsequent proceedings and actions taken by the trial court were declared null and
void. 13
The present case, as above discussed, is among the several cases of under-assessment
of docket fee which were investigated by this Court together with Manchester. The facts
and circumstances of this case are similar toManchester. In the body of the original
complaint, the total amount of damages sought amounted to about P50 Million. In the
prayer, the amount of damages asked for was not stated. The action was for the refund
of the premium and the issuance of the writ of preliminary attachment with damages.
The amount of only P210.00 was paid for the docket fee. On January 23, 1986, private
respondent filed an amended complaint wherein in the prayer it is asked that he be
awarded no less than P10,000,000.00 as actual and exemplary damages but in the body
of the complaint the amount of his pecuniary claim is approximately P44,601,623.70.
Said amended complaint was admitted and the private respondent was reassessed the
additional docket fee of P39,786.00 based on his prayer of not less than P10,000,000.00
in damages, which he paid.
On April 24, 1986, private respondent filed a supplemental complaint alleging an
additional claim of P20,000,000.00 in damages so that his total claim is approximately
P64,601,620.70. On October 16, 1986, private respondent paid an additional docket fee

of P80,396.00. After the promulgation of the decision of the respondent court on August
31, 1987 wherein private respondent was ordered to be reassessed for additional docket
fee, and during the pendency of this petition, and after the promulgation of Manchester,
on April 28, 1988, private respondent paid an additional docket fee of P62,132.92.
Although private respondent appears to have paid a total amount of P182,824.90 for
the docket fee considering the total amount of his claim in the amended and
supplemental complaint amounting to about P64,601,620.70, petitioner insists that
private respondent must pay a docket fee of P257,810.49.
The principle in Manchester could very well be applied in the present case. The pattern
and the intent to defraud the government of the docket fee due it is obvious not only in
the filing of the original complaint but also in the filing of the second amended
complaint.
However, in Manchester, petitioner did not pay any additional docket fee until] the case
was decided by this Court on May 7, 1987. Thus, in Manchester, due to the fraud
committed on the government, this Court held that the court a quo did not acquire
jurisdiction over the case and that the amended complaint could not have been
admitted inasmuch as the original complaint was null and void.
In the present case, a more liberal interpretation of the rules is called for considering
that, unlike Manchester, private respondent demonstrated his willingness to abide by
the rules by paying the additional docket fees as required. The promulgation of the
decision in Manchester must have had that sobering influence on private respondent
who thus paid the additional docket fee as ordered by the respondent court. It triggered
his change of stance by manifesting his willingness to pay such additional docket fee as
may be ordered.
Nevertheless, petitioners contend that the docket fee that was paid is still insufficient
considering the total amount of the claim. This is a matter which the clerk of court of
the lower court and/or his duly authorized docket clerk or clerk in-charge should
determine and, thereafter, if any amount is found due, he must require the private
respondent to pay the same.
Thus, the Court rules as follows:
1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the
payment of the prescribed docket fee, that vests a trial court with jurisdiction over the
subject matter or nature of the action. Where the filing of the initiatory pleading is not
accompanied by payment of the docket fee, the court may allow payment of the fee
within a reasonable time but in no case beyond the applicable prescriptive or
reglementary period.
2. The same rule applies to permissive counterclaims, third party claims and similar
pleadings, which shall not be considered filed until and unless the filing fee prescribed
therefor is paid. The court may also allow payment of said fee within a reasonable time
but also in no case beyond its applicable prescriptive or reglementary period.
3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate
pleading and payment of the prescribed filing fee but, subsequently, the judgment
awards a claim not specified in the pleading, or if specified the same has been left for

determination by the court, the additional filing fee therefor shall constitute a lien on
the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized
deputy to enforce said lien and assess and collect the additional fee.
WHEREFORE, the petition is DISMISSED for lack of merit. The Clerk of Court of the
court a quo is hereby instructed to reassess and determine the additional filing fee that
should be paid by private respondent considering the total amount of the claim sought
in the original complaint and the supplemental complaint as may be gleaned from the
allegations and the prayer thereof and to require private respondent to pay the
deficiency, if any, without pronouncement as to costs.
SO ORDERED.
Fernan (C.J), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Padilla,
Bidin, Sarmiento, Cortes, Grio-Aquino, Medialdea and Regalado, JJ., concur.
G.R. No. 148641. March 31, 2005
PCI
LEASING
AND
FINANCE,
INC., Petitioners,
vs.
EMILY ROSE GO KO, doing business under the name and style of "KD
SURPLUS" and KIDDY LIM CHAO,Respondents.
DECISION
CARPIO MORALES, J.:
Petitioner PCI Leasing and Finance, Inc. comes to this Court via this appeal by certiorari,
challenging the resolutions of the Court of Appeals which dismissed its original action
for certiorari for having been filed beyond the reglementary period.
Respondents Emily Rose Go Ko and Kiddy Lim Chao filed a complaint against petitioner
for Annulment/Reformation of Chattel Mortgage, Annulment of Restructuring
Agreement, Fixing of Correct Principal, Injunction with Prayer for Preliminary Injunction
and Temporary Restraining Order with the Regional Trial Court of Cebu. The complaint
was raffled to Branch 5 of said court, presided by Judge Ireneo Lee Gako, Jr.
The trial court, by Order of February 16, 2000, granted respondents prayer for
preliminary injunction. Petitioner, which received a copy of the Order on February 18,
2000, filed a motion for reconsideration on March 2, 2000. The motion was denied by
Order of May 22, 2000 on the ground that the lifting of the injunction would have
rendered one of the substantive issues of the case moot and academic. Notice of the
Order dated May 22, 2000 was received by counsel for petitioner on June 2, 2000.
On July 31, 2000, or fifty-nine (59) days after receipt of the Order denying its motion for
reconsideration, petitioner filed with the Court of Appeals a petition for certiorari under
Rule 65 with a prayer for a writ of preliminary injunction and/or temporary restraining
order.1 Petitioner claimed that therein public respondent Judge Gako acted with grave
abuse of discretion by issuing the injunction notwithstanding respondents nonentitlement thereto, effectively disposing of the main case without trial, and not holding
that the complaint was filed merely to preempt petitioners filing of a case for replevin.

By Resolution of August 23, 2000, the Court of Appeals, following Section 4, Rule 65 of
the Rules of Court which had incorporated the amendment introduced by this Courts
Circular No. 39-98 effective September 1, 1998, the relevant portion of which reads:
Sec. 4. Where and when petition to be filed.
xxx
If the petitioner has filed a motion for new trial or reconsideration in due time after
notice of said judgment, order, or resolution, the period herein affixed shall be
interrupted. If the motion is denied, the aggrieved party may file the petition [for
Certiorari, Prohibition, or Mandamus] within the remaining period, but which shall not be
less than five (5) days in any event, reckoned from notice of such denial. No extension
of time to file the petition shall be granted except of the most compelling reason and in
no case exceed fifteen (15) days. (Underscoring supplied),
dismissed the petition for having been filed beyond the reglementary period. 2
Thus the appellate court held:
In the case at bar, petitioner received a copy of the assailed order of February 16, 2000
on February 18, 2000.Thirteen (13) days after, or on March 2, 2000, a motion for
reconsideration was filed by petitioner. Receipt of the denial of the motion for
reconsideration was on June 2, 2000. Thirteen (13) days having been consumed,
petitioner had a remaining period of forty seven (47) days within which to file the
petition for review reckoned from June 2, 2000, or until July 19, 2000. The petition
having been filed only on July 31, 2000 is therefore filed twelve (12) days beyond the
reglementary period. Rule 65 is an extraordinary relief that is open so long as it is
availed of within the prescribed period. (Underscoring supplied)
On September 1, 2000, Sec. 4 of Rule 65 was amended anew, by this Courts A.M. No.
00-2-03-SC, FURTHER AMENDING SECTION 4 RULE 65 OF THE 1997 RULES OF CIVIL
PROCEDURE this time reverting to the old rule that the 60-day period of filing a petition
for certiorari, prohibition and mandamus under Rule 65 was to be reckoned from the
date of receipt of the denial of the motion for reconsideration of the assailed order or
motion for new trial. The rule, as thus amended, now states:
Sec. 4. When and where petition filed. The petition may be filed not later than sixty
(60) days from notice of the judgment, order or resolution. In case a motion for
reconsideration or new trial is timely filed, whether such motion is required or not, the
sixty (60) day period shall be counted from notice of the denial of said motion.
x x x (Underscoring supplied)
Petitioner, which received on September 7, 2000 a copy of the appellate courts August
23, 2000 Resolution dismissing its petition, filed a motion for reconsideration thereof on
September 21, 2000. No mention was made of A.M. No. 00-2-03-SC.
By Resolution of June 6, 2001, 3 the appellate court denied petitioners motion for
reconsideration. No mention was also made by it about A.M. No. 00-2-03-SC.

Petitioner now questions the August 23, 2000 and June 6, 2001 resolutions of the Court
of Appeals on the ground that the amendment of Section 4, Rule 65 effected by A.M. No.
00-2-03-SC should have been retroactively applied to its petition, it not having been
finally disposed of at the time the amendment became effective.
The issue in this petition has been squarely resolved in the case of Narzoles v. NLRC.4 It
will suffice for this Court to repeat the ruling therein. Parenthetically, respondents
candidly "admit that they cannot take a contrary stand" in resolving the petition at in
accordance with this Courts ruling in Narzoles.5
There is no question that the amendments brought about by Circular No. 39-98, which
took effect on September 1, 1998, were already in force, and therefore applicable when
petitioners filed their petition. Statutes regulating the procedure of the courts are
applicable to actions pending and undetermined at the time of their passage. Procedural
laws are retroactive in that sense. No vested rights attach to procedural laws .
Consequently, the CA, in accordance with Circular No. 39-98, correctly deducted the 16
days (the fifteenth day was a Sunday) it took for petitioners to file their motion for
reconsideration from the 60 day reglementary period. As petitioners only had the
remaining period of 44 days from 19 October 1998, when it received a copy of the
resolution denying reconsideration, to file the petition for certiorari, or until 8 December
1998, the filing of the petition on 17 December 1998 was nine (9) days too late.
Petitioners, however, claim exception to the retroactive application of Circular No. 39-98
since it would work injustice to them. We do not deem it necessary to rule on this
contention in view of further amendments to Section 4, Rule 65.
The Court has observed that Circular No. 39-98 has generated tremendous confusion
resulting in the dismissal of numerous cases for late filing. This may have been because,
historically, i.e., even before the 1997 revision to the Rules of Civil Procedure, a party
had a fresh period from receipt of the order denying the motion for reconsideration to
file a petition for certiorari. Were it not for the amendments brought about by Circular
No. 39-98, the cases so dismissed would have been resolved on the merits. Hence, the
Court deemed it wise to revert to the old rule allowing a party a fresh 60-day period
from notice of the denial of the motion for reconsideration to file a petition for certiorari.
Earlier this year, the Court resolved, in A.M. No. 00-2-03-SC, to further amend Section 4,
Rule 65 to read as follows:
Sec. 4. When and where petition filed. The petition shall be filed not later than sixty
(60) days from notice of the judgment, order or resolution. In case a motion for
reconsideration or new trial is timely filed, whether such motion is required or not, the
sixty (60) day period shall be counted from notice of the denial of said motion.
The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions
of a lower court or of a corporation, board, officer or person, in the Regional Trial Court
exercising jurisdiction over the territorial area as defined by the Supreme Court. It may
also be filed in the Court of Appeals whether or not the same is in aid of its appellate
jurisdiction or in the Sandiganbayan if it is in aid of its appellate jurisdiction. If it involves
the acts or omissions of a quasi-judicial agency, unless otherwise provided by law or
these rules, the petition shall be filed in and cognizable only by the Court of Appeals.

No extension of time to file the petition shall be granted except for compelling reason
and in no case exceeding fifteen (15) days.
The latest amendments took effect on September 1, 2000, following its publication in
the Manila Bulletin on August 4, 2000 and in the Philippine Daily Inquirer on August 7,
2000, two newspapers of general circulation.
In view of its purpose, the Resolution further amending Section 4, Rule 65 can only be
described as curative in nature, and the principles governing curative statutes are
applicable.
Curative statutes are enacted to cure defects in a prior law or to validate legal
proceedings which would otherwise be void for want of conformity with certain legal
requirements. They are intended to supply defects, abridge superfluities and curb
certain evils. They are intended to enable persons to carry into effect that which they
have designed or intended, but has failed of expected legal consequence by reason of
some statutory disability or irregularity in their own action. They make valid that which,
before the enactment of the statute was invalid. Their purpose is to give validity to acts
done that would have been invalid under existing laws, as if existing laws have been
complied with. Curative statutes, therefore, by their very essence, are retroactive.
Accordingly, while the Resolution states that the same "shall take effect on September
1, 2000, following its publication in two (2) newspapers of general circulation," its
retroactive application cannot be denied. In short, the filing of the petition for certiorari
in this Court on 17 December 1998 is deemed to be timely, the same having been made
within the 60-day period provided under the curative Resolution. We reach this
conclusion bearing in mind that the substantive aspects of this case involves the rights
and benefits, even the livelihood, of petitioner-employees. 6 (Underscoring supplied,
citations omitted)
WHEREFORE, the petition is GRANTED. The August 23, 2000 and June 6, 2001
Resolutions of the Court of Appeals are hereby vacated, and the case is hereby
REMANDED to it for appropriate action in line with the foregoing discussion.
SO ORDERED.
Panganiban, (Chairman), Sandoval-Gutierrez, Corona, and Garcia, JJ., concur.

G.R. No. L-23614 February 27, 1970

PEDRO
M.
vs.
ISIDRO BARRIOS, ET AL., respondents-appellees.
G.R. No. L-23615 February 27, 1970

BERMEJO, petitioner-appellant,

JOVITA
vs.
ISIDRO BARRIOS, ET AL., respondents-appellees.

CARMORIN, petitioner-appellant,

Pedro M. Bermejo for himself and accused Jovita Carmorin as petitioners-appellants.

Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General Antonio G.
Ibarra and Solicitor Augusta M. Amores for respondents-appellees.

ZALDIVAR, J.:
These two cases, being interrelated, are decided together.
These are appeals from the joint decision of the Court of First Instance of Capiz,
rendered on June 3, 1964, dismissing two petitions for certiorari and prohibition with
preliminary injunction: one filed by petitioner Pedro M. Bermejo against City Judge Isidro
Barrios and City Fiscal Quirico Abela of Roxas City, docketed as Special Civil Case No. V2721; and the other filed by petitioner Jovita Carmorin against the same respondents,
docketed as Special Civil Case No. V-2723.
In G.R. No. L-23614, petitioner Pedro M. Bermejo and Julia "Doe" (her identity at the time
was unknown) were charged in the city court of Roxas City, on August 22, 1963, of the
crime of falsification of public or official document in an information filed by the city
fiscal. It was alleged in the information that on or about the 25th day of February 1963,
in Roxas City, the two accused, being private individuals, conspired and confederated
together and mutually helped each other, and willfully and feloniously prepared and
executed a document consisting of an amended petition for habeas corpus entitled
"Pedro M. Bermejo and Jovita Carmorin, petitioners, vs. Jose M. Bernales and Wilfredo
Bernales, respondents", which petition Pedro M. Bermejo signed while Julia "Doe" placed
her thumbmark over the name "Jovita Carmorin", which petition was subscribed and
sworn to by the two accused before the Clerk of Court, and filed in the Court of First
Instance of Capiz, docketed as Special Proceeding No. 2669, thus the two accused
stated and made it appear in the amended petition that the same was signed and sworn
to by Jovita Carmorin as one of the petitioners when in truth and in fact the said Jovita
Carmorin never signed and swore to it, because it was in fact the accused Julia "Doe"
who signed and swore to that petition as Julia Carmorin.
Relying on the certification of the city fiscal that a preliminary investigation had been
conducted by him and that he had examined the witnesses under oath before filing the
information, the City Judge, Hon. Isidro O. Barrios, issued, on August 24, 1963, an order
for the arrest of accused Bermejo. To prevent his incarceration, said accused put up the
necessary bond.
Upon arraignment, Bermejo filed a motion to quash the information alleging in
substance: (1) that the information did not charge an offense because the amended
petition for habeas corpus (in Special Proceeding No. V-2669 of the Court of First
Instance of Capiz), allegedly falsified, is not a document contemplated under the
provisions of Article 172 of the Revised Penal Code, and that in a previous judgment of
the Court of First Instance of Capiz in the habeas corpus proceedings it was declared

that the thumbmark in the amended petition was that of Jovita Carmorin; and (2) that
the court did not acquire jurisdiction over his person because the warrant issued for his
arrest was illegal, Judge Barrios having issued the same without first examining the
witnesses under oath and in the form of searching questions and answers as required
under Republic Act 3828.
The city fiscal filed his opposition to the motion to quash, contending that the petition
for habeas corpus is a public document; that the provisions of Republic Act 3828 are
applicable only to municipal judges and not to city judges; and that the principle of res
judicata, or conclusiveness of judgment, cannot be invoked by the accused. After
Bermejo had filed a supplement to his motion to quash and a reply to the city fiscal's
opposition, respondent City Judge, on October 5, 1963, issued an order denying the
motion to quash.
On October 14, 1963, Bermejo filed his motion for reconsideration, but the same was
denied for lack of merit. Thereupon he filed a petition for certiorari and prohibition with
preliminary injunction before the Court of First Instance of Capiz, naming as respondents
City Judge Isidro Barrios and City Fiscal Quirico Abela, contending that City Fiscal Abela
committed a grave abuse of discretion in filing an information against him without
conducting the proper preliminary investigation, and that the City Judge committed a
grave abuse of discretion in denying his motion to quash, raising practically the same
issues that he raised in the motion to quash before the city court, and praying that
respondent City Judge be enjoined from hearing the criminal case against him during
the pendency of the special civil action in the Court of First Instance.
In G.R. No. L-23615, Jovita Carmorin was charged by respondent City Fiscal Quirico
Abela with perjury, on August 23, 1963, in the same city court of Roxas City (Criminal
Case No. 4452) for allegedly having "subscribed and swore to an affidavit ... that she
was really the one who signed with her thumbmark as Jovita Carmorin ... the amended
petition for habeas corpus ... when in truth and in fact, as she very well knew, she had
not done such act of signing with her thumbmark said petition and it was another
person, who signed with a thumbmark said petition as Jovita Carmorin ... ." The city
fiscal also certified that he had conducted the preliminary investigation in accordance
with law before filing the information.
On the basis of the certification by the city fiscal that he had conducted the proper
preliminary investigation, respondent City Judge Barrios issued an order for the arrest of
accused Carmorin. After posting a bond, said accused, thru her counsel, Atty. Pedro M.
Bermejo (the same person accused in the falsification case), filed a motion to quash the
information, alleging substantially, that the court had not acquired jurisdiction over her
person because the warrant of arrest issued for her arrest was improvidently issued, the
respondent City Judge having issued the same without examining the witnesses
personally in the form of searching questions and answers in violation of "Republic Act
3828, and that no offense was committed by the accused because it had already been
declared by the Court of First Instance of Capiz in the habeas corpus case (Special
Proceedings No. V-2669) that the thumbmark appearing in the petition for habeas
corpus was the true thumbmark of accused Carmorin.
After the city fiscal has filed his opposition to the motion to quash, and the accused, her
reply, on October 15, 1963, City Judge Barrios issued an order denying the motion to
quash. Carmorin's motion for reconsideration having been denied, she likewise filed a
petition for certiorari and prohibition with preliminary injunction with the Court of First

Instance of Capiz, also naming as respondents City Judge Barrios and City Fiscal Abella,
imputing abuse of discretion on the part of City Fiscal Abella in filing an information
against her without conducting the proper preliminary investigation, and on the part of
respondent Judge Barrios in denying her motion to quash, raising the same questions
raised by her in her motion to quash before the city court and also praying that
respondent City Judge be enjoined from hearing the case pending decision of the special
civil action.
On November 22, 1963, respondent city fiscal filed answers to the two petitions,
admitting some of the allegations in the petitions, and denying others; and setting up
the affirmative defense that the orders of respondent City Judge in the criminal cases
against the two petitioners cannot be the subject of the petitions for certiorari and
prohibition before the Court of First Instance of Capiz because the city court of Roxas
City issued said orders in the exercise oaf its concurrent jurisdiction with the Court of
First Instance of Capiz, so that the latter court has no jurisdiction to entertain the
petitions for certiorari and prohibition filed before it, pursuant to Section 87, paragraph
(e) of Republic Act 296, as amended by Section 6 of Republic Act 3828.
Herein petitioners filed their replies to respondents' answers, asserting that the Court of
First Instance of Capiz has jurisdiction to take cognizance of the two cases
for certiorari and prohibition with preliminary injunction. After the parties had filed their
memoranda in support of their respective contentions regarding the jurisdiction of the
court, the Court of First Instance of Capiz issued an order, on January 6, 1964, declaring
that it had jurisdiction to take cognizance of the two special civil actions
for certiorari and prohibition with preliminary injunction, and the court set the hearing of
the two cases for January 24, 1964.
During the hearing of the two cases, which was held jointly, Atty. Bermejo appeared and
testified in his behalf and in behalf of his co-accused Carmorin, while Fiscal Quirico
Abella testified for the prosecution. Thereafter, the parties filed their memoranda. On
June 3, 1964, the Court of First Instance of Capiz rendered a decision dismissing the two
petitions, without pronouncement as to costs. Their joint motion for reconsideration
having been denied, herein petitioners brought the present appeals to this Court.
Before resolving the questions posed in these appeals, We consider it necessary to rule
on the matter regarding the jurisdiction of the Court of First instance of Capiz to take
cognizance of the two petitions for certiorari and prohibition with preliminary
injunction a question that was properly raised by the respondents in the court below,
although this question is not now raised in the appeals. We hold that the Court of First
Instance of Capiz erred in taking cognizance of the two petitions. Section 6 of Republic
Act 3828, amending Section 87, paragraph (c) of the Judiciary Act. of 1948, provides in
part, as follows:
Justices of the peace in the capitals of provinces and subprovinces and
judges of municipal courts shall have like jurisdiction as the Court of First
Instance to try parties charged with an offense committed within their
respective jurisdictions, in which the penalty provided by law does not
exceedprision correccional or imprisonment for not more than six years or
fine not exceeding six thousand pesos or both, and in the absence of the
district judge, shall have like jurisdiction within the province as the Court
of First Instance to hear applications for bail.

All cases filed under the next preceding paragraph with justices of the
peace of capitals and municipal court judges shall be tried and decided on
the merits by the respective justices of the peace or municipal judges.
Proceedings had shall be recorded and decisions therein shall be
appealable direct to the Court of Appeals or the Supreme Court, as the
case may be.1
The crime of falsification of a public or official document by a private individual, of which
petitioner Bermejo is charged in the city court of Roxas City in Criminal Case No. 4451,
is punishable with prision correccional in its medium and maximum periods, while the
crime of perjury of which petitioner Carmorin is charged in Criminal Case No. 4452
before the city court of Roxas City is punishable with arresto mayor in its maximum
period toprision correccional in its minimum period.2 Undoubtedly, these two cases fall
within the concurrent jurisdiction of the city court of Roxas City and the Court of First
Instance of Capiz. This Court, interpreting the aforequoted provision of Republic Act 3828,
ruled that "[w]here the municipal court (city court of Manila) has taken cognizance of a
criminal case in its concurrent jurisdiction with the Court of First Instance, appeal must be
taken direct to the Court of Appeals or the Supreme Court; and where the Court of First
Instance has taken cognizance of such appeal in its appellate jurisdiction and refused to
elevate the case to the Court of Appeals, said Court of First Instance acted without
jurisdiction.3 And this rule applies even if the order is not a judgment on the merits because
in cases of this nature the Court of First Instance exercises no supervisory jurisdiction over
the city court, and having concurrent jurisdiction the city court acts with "like jurisdiction" as
the Court of First Instance.4 It is Our view, therefore, that the decision of the Court of First
Instance of Capiz in Special Civil Cases Nos. 2721 and 2723, now appealed to this Court, is
null and void because said court has no jurisdiction to take cognizance of those cases. The
two special civil actions against the City Judge and the City Fiscal of Roxas City should have
been filed with the Court of Appeals in aid of the latter's appellate jurisdiction over direct
appeals from the decision or order of the city court. We note, however, that the decision of
the Court of First Instance of Capiz is correct insofar as it had dismissed the two petitions in
question.
Be that as it may, however, We believe that the error of the petitioners in filing their
petitions for certiorari and prohibition with preliminary injunction with the Court of First
Instance of Capiz and the error of the latter court in taking cognizance of those petitions
should not deter Us from ruling on the questions raised in the present appeals. The
record shows that these proceedings have been pending for more than six years, and
were We to remand these cases to the courts below so the petitions for certiorari should
be brought up to the Court of Appeals, our action would only cause further delay.
We shall, therefore, decide whether herein petitioners are right in assailing the
correctness or legality of the proceedings in the city court of Roxas City in connection
with the two criminal cases filed against them, as they now contend in the present
appeals.
While petitioners maintain in the court below that the City Fiscal of Roxas City has no
power to initiate the investigation of cases without a previous complaint by an offended
party, they now admit in their brief that under the existing laws he can commence such
preliminary inquiry.5 Nevertheless, petitioner Bermejo contends that before the city fiscal
can conduct such preliminary investigation, there must be a violation of the law, and in the
instant case he avers that there was no violation of law. Basis of his argument is that the
petition for habeas corpus not being a document as contemplated in Article 172 of the
Revised Penal Code, the city fiscal is precluded from conducting the preliminary

investigation, much less from filing the information, because Bermejo could not be
prosecuted for falsification of the alleged public or official document.

The contention of Bermejo is untenable. In the case of U.S. v. Orera,6 a "document" is

defined as a deed, instrument or other duly authorized paper by which something is proved,
evidenced or set forth. In U.S. v. Asensi,7 this Court held that any instrument authorized by a
notary public or a competent public official, with the solemnities required by law, is a public
document. Section 38, Rule 123 of the old Rules of Court, 8 enumerates the following as
public writings:
(a) The written acts or records of the acts of the sovereign authority, of
official bodies and tribunals, and of public officers, legislative, judicial and
executive, whether of the Philippines, or of a foreign country;
(b) Public records, kept in the Philippines, of private writings.
The same principle also obtains in the United States, that "defendant's pleadings and
papers, which were involved in civil actions and which were in custody of county clerk
as ex-oficio clerk of superior court in which action was pending, were 'public documents'
and were within scope of subject matter of statute making alteration of court records an
offense."9 Considering that the petition for habeas corpus (Special Proceedings No. V-2669)
alleged the illegal confinement, or deprivation of liberty, of one Soterania Carmorin, and that
said petition was duly subscribed and sworn to before Clerk of Court Leopoldo B. Dorado and
filed with the Court of First Instance of Capiz, forming, therefore, a part of the court records
in said proceedings, it cannot be disputed that said petition is a public or official document
as contemplated in Articles 171 and 172 of the Revised Penal Code. Petitioner Bermejo,
therefore, cannot say that he committed no crime if it can be shown that, as charged in the
information, he connived or conspired with a certain Julia "Doe" in falsifying said petition by
making it appear that Jovita Carmorin placed her thumbmark therein when in fact she did
not do so.
Petitioner Bermejo likewise complains that notwithstanding his request to be present at
the preliminary investigation, the same was conducted in his absence or behind his
back thus denying him his day in court. We find however, in the record and the
court a quo so found too that on March 11, 1963, a subpoena was issued to Atty.
Pedro M. Bermejo requiring him to appear at the office of the city fiscal of Roxas City on
March 14, 1963 in an investigation. This subpoena was received by Bermejo on March
12, 1963, and on the same day he sent a letter to the city fiscal, which was received by
the latter in the afternoon of the same day, requesting that the investigation be
postponed to March 19, 1963 because he Bermejo had to attend to another case which
was scheduled to be heard on the same date. The city fiscal acceded to his request, but
because the fiscal's office failed to notify him of the hearing on March 19, 1963,
Bermejo was not present when the investigation was conducted on that day. The
preliminary investigation was conducted on the very day requested by Bermejo, and
after finding that there was a prima facie case the city fiscal filed the information
against him on August 22, 1963.
It appears, therefore, that while the city fiscal failed to notify petitioner Bermejo that his
request for postponement was granted, which should have been done, it can also be
said that Bermejo was not entirely blameless if the preliminary investigation was
conducted in his absence. It was he himself who set the date of the investigation in his
request for postponement, but he did not bother to come on the date he fixed. Neither

did he try to find out what action the city fiscal had taken on his request for
postponement, on any day before the date of the hearing set by him, although he is
living in Roxas City where the city fiscal holds his office. Moreover, the information was
filed five months later, and this petitioner never inquired, at least as to the status of his
case. This behavior of petitioner cannot merit Our approval. It is obvious that he failed
to employ the standard of care or reasonable diligence that is expected of him. His
unwarranted absence on the day of the hearing which he himself requested, coupled
with his seeming indifference or unconcern about his case, is a clear indication that he
was guilty of gross negligence in the protection of his rights. If he did not have his day
in court, it was because of his own negligence. If he was really interested to attend the
investigation, as he now pretends, he should have taken pains to communicate with the
city fiscal. This Court had ruled that in the application of the principle of due process,
what is sought to be safeguarded is not lack of previous notice but the denial of
opportunity to be heard. 10 Since petitioner Bermejo was afforded the opportunity to appear
at the preliminary investigation but did not take advantage of it, he has no one to blame but
himself. Anyway, said petitioner's rights can still be amply protected in the regular trial of
the case against him in the city court where he can cross examine the witnesses and
present his evidence. 11
Furthermore, even assuming that the city fiscal did not notify petitioners, but had
conducted the preliminary investigations ex parte, their rights to due process could not
have been violated for they are not entitled as of right to preliminary investigation. The
numerous authorities 12 supporting this view are not rendered obsolete, as claimed by
petitioners, because Section 14, Rule 112 of the new Rules of Court invoked by them has no
application in their cases, it appearing that the new Rules of Court took effect on January 1,
1964 while the preliminary investigations conducted by the city fiscal were conducted in
1963. 13 The Rules of Court are not penal statutes, and they cannot be given retroactive
effect. 14
Having arrived at the conclusion that respondent city fiscal did not abuse his discretion
in conducting the preliminary investigations and that he filed the informations against
herein petitioners in accordance with law, there is, therefore, no merit in the assertion of
petitioners that the warrants of arrest issued for their arrest were illegal. Besides,
granting arguendo that the orders of arrest were tainted with irregularity, still the
posting by petitioners of their bail bonds amounted to a waiver of the effect of said
defects.
There is merit in the assertion that the warrant of arrest was irregularly
issued. Section 87 of the Judiciary Act as amended by Republic Act 3828
requires that the Municipal Judge issuing the same,personally, examine
under oath the witnesses, and by searching questions and answers which
are to be reduced to writing. Here, instead of searching questions and
answers, we have only the affidavits of respondent and her one witness.
Moreover, said affidavits were sworn to before Judge Cabungcal, not
before Judge Juntereal who issued the warrant of arrest.
However, the giving of bail bond by petitioner constitutes a waiver of the
irregularity attending her arrest. Besides, by her other personal
appearances before the municipal court and the court a quo, petitioner
voluntarily submitted herself to the court's jurisdiction. Hence, the
absence of preliminary examination becomes moot already, the court
having acquired jurisdiction over the person of petitioner and could

therefore proceed with the preliminary investigation proper." (Doce v.

Branch II, Court of First Instance of Quezon, et al., supra; Luna v. Plaza, L27511, November 29, 1968).
The other point raised by petitioners in their contention that the respondent City Judge
abused his discretion in denying their motion to quash is that there was a judicial
declaration in the habeas corpus case (Special Proceedings No. V-2669) that the
thumbmark appearing in the petition was the genuine thumbmark of Jovita Carmorin,
and that pronouncement is now conclusive so that they cannot be prosecuted for
falsification or perjury, as the case may be. This particular question should rather be
submitted and threshed out in the city court during the trial. The record of the habeas
corpus proceeding is not before Us, and We have no means of knowing what actually
transpired in that proceeding. The proper determination of this question will involve not
only the introduction and consideration of evidence, but also calls for a detailed inquiry
on the principle of estoppel by, or conclusiveness of, judgment.
Also devoid of merit is the other error pointed to by petitioners with respect to the
alleged admission by respondents that they acted illegally, capriciously, or in excess of
jurisdiction. A cursory examination of their answers would reveal that what was
admitted by respondent was the fact of the filing by petitioners of their pleadings, but
not the allegations contained therein, for, as shown in the record, respondents have
staunchly defended their acts and insisted that their actuations are legal or in
accordance with law.
IN VIEW OF THE FOREGOING, the decision of the Court of First Instance of Capiz in
Special Civil Cases Nos. 2721 and 2723 is set aside for having been rendered by the
court without jurisdiction, and the instant appeals are dismissed. We declare that the
warrants of arrests issued, and the informations filed, in Criminal Cases Nos. 4451 and
4452 of the City Court of Roxas City, are in accordance with law, and these cases should
be remanded to the City Court of Roxas City for trial on the merits. No pronouncement
as to costs. It is so ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Castro, Fernando, Teehankee, Barredo
and Villamor, JJ., concur.

[G.R. No. 156966. May 7, 2004]

PILIPINO
TELEPHONE
CORPORATION, petitioner,
vs. DELFINO TECSON, respondent.
DECISION
VITUG, J.:

The facts, by and large, are undisputed.

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.
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 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.
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.
There is merit in the instant petition.

Section 4, Rule 4, of the Revised Rules of Civil Procedure 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 should indicate, clearly enough, the intent of the parties to
consider the venue stipulation as being preclusive in character.
[2]

[3]

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.
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, 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, 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.
[5]

[6]

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 CAG.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.
Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.
[G.R. No. 119657. February 7, 1997]

UNIMASTERS
CONGLOMERATION,
INC., petitioner,
vs.
COURT OF APPEALS and KUBOTA AGRI-MACHINERY
PHILIPPINES, INC., respondents.
DECISION
NARVASA, C.J.:

The appellate proceeding at bar turns upon the interpretation of a

stipulation in a contract governing venue of actions thereunder arising.
On October 28, 1988 Kubota Agri-Machinery Philippines, Inc. (hereafter,
simply KUBOTA) and Unimasters Conglomeration, Inc. (hereafter, simply
UNIMASTERS) entered into a "Dealership Agreement for Sales and Services"
of the former's products in Samar and Leyte Provinces. The contract
contained, among others:
[1]

1) a stipulation reading: "** All suits arising out of this Agreement

shall be filed with / in the proper Courts of Quezon City," and
2) a provision binding UNIMASTERS to obtain (as it did in fact obtain)
a credit line with Metropolitan Bank and Trust Co.-Tacloban Branch in
the amount of P2,000,000.00 to answer for its obligations to
KUBOTA.
Some five years later, or more precisely on December 24, 1993,
UNIMASTERS filed an action in the Regional Trial Court of Tacloban City
against KUBOTA, a certain Reynaldo Go, and Metropolitan Bank and Trust
Company-Tacloban Branch (hereafter, simply METROBANK) for damages for
breach of contract, and injunction with prayer for temporary restraining

order. The action was docketed as Civil Case No. 93-12-241 and assigned to
Branch 6.
On the same day the Trial Court issued a restraining order enjoining
METROBANK from "authorizing or effecting payment of any alleged obligation
of ** (UNIMASTERS) to defendant ** KUBOTA arising out of or in connection
with purchases made by defendant Go against the credit line caused to be
established by ** (UNIMASTERS) for and in the amount of P2 million covered
by defendant METROBANK ** or by way of charging ** (UNIMASTERS) for any
amount paid and released to defendant ** (KUBOTA) by the Head Office of
METROBANK in Makati, Metro-Manila **." The Court also set the application
for preliminary injunction for hearing on January 10, 1994 at 8:30 o'clock in
the morning.
On January 4, 1994 KUBOTA filed two motions. One prayed for dismissal
of the case on the ground of improper venue (said motion being set for
hearing on January 11, 1994). The other prayed for the transfer of the
injunction hearing to January 11, 1994 because its counsel was not available
on January 10 due to a prior commitment before another court.
KUBOTA claims that notwithstanding that its motion to transfer hearing
had been granted, the Trial Court went ahead with the hearing on the
injunction incident on January 10, 1994 during which it received the direct
testimony of UNIMASTERS' general manager, Wilford Chan; that KUBOTA's
counsel was "shocked" when he learned of this on the morning of the 11th,
but was nonetheless instructed to proceed to cross-examine the witness;
that when said counsel remonstrated that this was unfair, the Court reset the
hearing to the afternoon of that same day, at which time Wilford Chan was
recalled to the stand to repeat his direct testimony. It appears that crossexamination of Chan was then undertaken by KUBOTA's lawyer with the
"express reservation that ** (KUBOTA was) not (thereby) waiving and/or
abandoning its motion to dismiss;" and that in the course of the crossexamination, exhibits (numbered from 1 to 20) were presented by said
attorney who afterwards submitted a memorandum in lieu of testimonial
evidence.
[2]

On January 13, 1994, the Trial Court handed down an Order authorizing
the issuance of the preliminary injunction prayed for, upon a bond
of P2,000,000.00. And on February 3, 1994, the same Court promulgated an
Order denying KUBOTA's motion to dismiss. Said the Court:
[3]

"The plaintiff UNIMASTERS Conglomeration is holding its

principal place of business in the City of Tacloban while the
defendant ** (KUBOTA) is holding its principal place of
business in Quezon City. The proper venue therefore pursuant
to Rules of Court would either be Quezon City or Tacloban City
at the election of the plaintiff. Quezon City and Manila (sic), as
agreed upon by the parties in the Dealership Agreement, are
additional places other than the place stated in the Rules of
Court. The filing, therefore, of this complaint in the Regional
Trial Court in Tacloban City is proper."
Both orders were challenged as having been issued with grave abuse of
discretion by KUBOTA in a special civil action of certiorari and prohibition filed
with the Court of Appeals, docketed as CA-G.R. SP No. 33234. It contended,
more particularly, that (1) the RTC had "no jurisdiction to take cognizance of
** (UNIMASTERS') action considering that venue was improperly laid," (2)
UNIMASTERS had in truth "failed to prove that it is entitled to the ** writ of
preliminary injunction;" and (3) the RTC gravely erred "in denying the motion
to dismiss."
[4]

The Appellate Court agreed with KUBOTA that -- in line with the Rules of
Court and this Court's relevant rulings -- the stipulation respecting venue in
its Dealership Agreement with UNIMASTERS did in truth limit the venue of all
suits arising thereunder only and exclusively to "the proper courts of Quezon
City." The Court also held that the participation of KUBOTA's counsel at the
hearing on the injunction incident did not in the premises operate as a
waiver or abandonment of its objection to venue; that assuming that
KUBOTA's standard printed invoices provided that the venue of actions
thereunder should be laid at the Court of the City of Manila, this was
inconsequential since such provision would govern "suits or legal actions
between petitioner and its buyers" but not actions under the Dealership
Agreement between KUBOTA and UNIMASTERS, the venue of which was
controlled by paragraph No. 7 thereof; and that no impediment precludes
issuance of a TRO or injunctive writ by the Quezon City RTC against
METROBANK-Tacloban since the same "may be served on the principal office
of METROBANK in Makati and would be binding on and enforceable against,
METROBANK branch in Tacloban."
[5]

[7]

[6]

After its motion for reconsideration of that decision was turned down by
the Court of Appeals, UNIMASTERS appealed to this Court.Here, it ascribes to
the Court of Appeals several errors which it believes warrant reversal of the
verdict, namely:
[8]

1) "in concluding, contrary to decisions of this ** Court, that the

agreement on venue between petitioner (UNIMASTERS) and private
respondent (KUBOTA) limited to the proper courts of Quezon City the
venue of any complaint filed arising from the dealership agreement
between ** (them);"
2) "in ignoring the rule settled in Philippine Banking Corporation vs.
Tensuan, that 'in the absence of qualifying or restrictive words,
venue stipulations in a contract should be considered merely as
agreement on additional forum, not as limiting venue to the
specified place;" and in concluding, contrariwise, that the agreement
in the case at bar "was the same as the agreement on venue in
the Gesmundo case," and therefore, the Gesmundo case was
controlling; and
[9]

3) "in concluding, based solely on the self-serving narration of **

(KUBOTA that its) participation in the hearing for the issuance of a **
preliminary injunction did not constitute waiver of its objection to
venue."
The issue last mentioned, of whether or not the participation by the
lawyer of KUBOTA at the injunction hearing operated as a waiver of its
objection to venue, need not occupy the Court too long. The record shows
that when KUBOTA's counsel appeared before the Trial Court in the morning
of January 11, 1994 and was then informed that he should cross-examine
UNIMASTERS' witness, who had testified the day before, said counsel drew
attention to the motion to dismiss on the ground of improper venue and
insistently attempted to argue the matter and have it ruled upon at the time;
and when the Court made known its intention (a) "to (resolve first the) issue
(of) the injunction then rule on the motion to dismiss," and (b) consequently
its desire to forthwith conclude the examination of the witness on the
injunction incident, and for that purpose reset the hearing in the afternoon of
that day, the 11th, so that the matter might be resolved before the lapse of

the temporary restraining order on the 13th, KUBOTA's lawyer told the Court:
"Your Honor, we are not waiving our right to submit the Motion to
Dismiss." It is plain that under these circumstances, no waiver or
abandonment can be imputed to KUBOTA.
[10]

The essential question really is that posed in the first and second
assigned errors, i.e., what construction should be placed on the stipulation in
the Dealership Agreement that "(a)ll suits arising out of this Agreement shall
be filed with/in the proper Courts of Quezon City."
Rule 4 of the Rules of Court sets forth the principles generally governing
the venue of actions, whether real or personal, or involving persons who
neither reside nor are found in the Philippines or otherwise. Agreements on
venue are explicitly allowed. "By written agreement of the parties the venue
of an action may be changed or transferred from one province to
another." Parties may by stipulation waive the legal venue and such waiver
is valid and effective being merely a personal privilege, which is not contrary
to public policy or prejudicial to third persons. It is a general principle that a
person may renounce any right which the law gives unless such renunciation
would be against public policy.
[11]

[12]

Written stipulations as to venue may be restrictive in the sense that the

suit may be filed only in the place agreed upon, or merely permissive in that
the parties may file their suit not only in the place agreed upon but also in
the places fixed by law (Rule 4, specifically). As in any other agreement,
what is essential is the ascertainment of the intention of the parties
respecting the matter.
Since convenience is the raison d'etre of the rules of venue, it is easy to
accept the proposition that normally, venue stipulations should be deemed
permissive merely, and that interpretation should be adopted which most
serves the parties' convenience. In other words, stipulations designating
venues other than those assigned by Rule 4 should be interpreted as
designed to make it more convenient for the parties to institute actions
arising from or in relation to their agreements; that is to say, as simply
adding to or expanding the venues indicated in said Rule 4.
[13]

On the other hand, because restrictive stipulations are in derogation of

this general policy, the language of the parties must be so clear and
categorical as to leave no doubt of their intention to limit the place or places,
or to fix places other than those indicated in Rule 4, for their actions. This is

easier said than done, however, as an examination of precedents involving

venue covenants will immediately disclose.
In at least thirteen (13) cases, this Court construed the venue stipulations
involved as merely permissive. These are:

1. Polytrade Corporation v. Blanco, decided in 1969.

the venue stipulation was as follows:

[14]

In this case,

"The parties agree to sue and be sued in the Courts of Manila."

This Court ruled that such a provision "does not preclude the filing of
suits in the residence of the plaintiff or the defendant. The plain
meaning is that the parties merely consented to be sued in
Manila. Qualifying or restrictive words which would indicate that
Manila and Manila alone is the venue are totally absent therefrom. It
simply is permissive. The parties solely agreed to add the courts of
Manila as tribunals to which they may resort. They did not waive
their right to pursue remedy in the courts specifically mentioned in
Section 2(b) of Rule 4."
The Polytrade doctrine was reiterated expressly or implicitly in
subsequent cases, numbering at least ten (10).
2. Nicolas v. Reparations Commission, decided in 1975.
case, the stipulation on venue read:

[15]

In this

"** (A)ll legal actions arising out of this contract ** may be brought
in and submitted to the jurisdiction of the proper courts in the City of
Manila."
This Court declared that the stipulation does not clearly show the
intention of the parties to limit the venue of the action to the City of
Manila only. "It must be noted that the venue in personal actions is
fixed for the convenience of the plaintiff and his witnesses and to
promote the ends of justice. We cannot conceive how the interest of
justice may be served by confining the situs of the action to Manila,
considering that the residences or offices of all the parties, including

the situs of the acts sought to be restrained or required to be done,

are all within the territorial jurisdiction of Rizal. ** Such agreements
should be construed reasonably and should not be applied in such a
manner that it would work more to the inconvenience of the parties
without promoting the ends of justice."
3. Lamis Ents. v. Lagamon, decided in 1981. Here, the stipulation in
the promissory note and the chattel mortgage specifed Davao City
as the venue.
[16]

The Court, again citing Polytrade, stated that the provision "does not
preclude the filing of suits in the residence of plaintiff or defendant
under Section 2(b), Rule 4, Rules of Court, in the absence of
qualifying or restrictive words in the agreement which would
indicate that the place named is the only venue agreed upon by the
parties. The stipulation did not deprive ** (the affected party) of his
right to pursue remedy in the court specifically mentioned in Section
2(b) of Rule 4, Rules of Court. Renuntiato non praesumitur."
4. Capati v. Ocampo, decided in 1982. In this case, the provision of
the contract relative to venue was as follows:
[17]

" ** (A)ll actions arising out, or relating to this contract may be

instituted in the Court of First Instance of the City of Naga."
The Court ruled that the parties "did not agree to file their suits
solely and exclusively with the Court of First Instance of Naga;" they
"merely agreed to submit their disputes to the said court without
waiving their right to seek recourse in the court specifically
indicated in Section 2 (b), Rule 4 of the Rules of Court."
5. Western Minolco v. Court of Appeals, decided in 1988.
provision governing venue read:

[18]

Here, the

"The parties stipulate that the venue of the actions referred to in

Section 12.01 shall be in the City of Manila."

The court restated the doctrine that a stipulation in a contract fixing

a definite place for the institution of an action arising in connection
therewith, does not ordinarily supersede the general rules set out in
Rule 4, and should be construed merely as an agreement on an
additional forum, not as limiting venue to the specified place.
6. Moles v. Intermediate Appellate Court, decided in 1989. In this
proceeding, the Sales Invoice of a linotype machine stated that the
proper venue should be Iloilo.
[19]

This Court held that such an invoice was not the contract of sale of
the linotype machine in question; consequently the printed
provisions of the invoice could not have been intended by the
parties to govern the sale of the machine, especially since said
invoice was used for other types of transactions. This Court said: "It
is obvious that a venue stipulation, in order to bind the parties, must
have been intelligently and deliberately intended by them to
exclude their case from the reglementary rules on venue. Yet, even
such intended variance may not necessarily be given judicial
approval, as, for instance, where there are no restrictive or
qualifying words in the agreement indicating that venue cannot be
laid in any place other than that agreed upon by the parties, and in
contracts of adhesion."
7. Hongkong and Shanghai Banking Corp. v. Sherman, decided in
1989. Here the stipulation on venue read:
[20]

" ** (T)his guarantee and all rights, obligations and liabilities arising
hereunder shall be construed and determined under and may be
enforced in accordance with the laws of the Republic of
Singapore. We hereby agree that the Courts in Singapore shall have
jurisdiction over all disputes arising under this guarantee **."
This Court held that due process dictates that the stipulation be
liberally construed. The parties did not thereby stipulate that only
the courts of Singapore, to the exclusion of all the others, had

jurisdiction. The clause in question did not operate to divest

Philippine courts of jurisdiction.
8. Nasser v. Court of Appeals, decided in 1990, in which the venue
stipulation in the promissory notes in question read:
[21]

" ** (A)ny action involving the enforcement of this contract shall be

brought within the City of Manila, Philippines."
The Court's verdict was that such a provision does not as a rule
supersede the general rule set out in Rule 4 of the Rules of Court,
and should be construed merely as an agreement on an additional
forum, not as limiting venue to the specified place.
9. Surigao Century Sawmill Co., Inc. v. Court of Appeals, decided in
1993: In this case, the provision concerning venue was contained
in a contract of lease of a barge, and read as follows:
[22]

" ** (A)ny disagreement or dispute arising out of the lease shall be

settled by the parties in the proper court in the province of Surigao
del Norte."
The venue provision was invoked in an action filed in the Regional
Trial Court of Manila to recover damages arising out of marine
subrogation based on a bill of lading. This Court declared that since
the action did not refer to any disagreement or dispute arising out of
the contract of lease of the barge, the venue stipulation in the latter
did not apply; but that even assuming the contract of lease to be
applicable, a statement in a contract as to venue does not preclude
the filing of suits at the election of the plaintiff where no qualifying
or restrictive words indicate that the agreed place alone was the
chosen venue.
10. Philippine Banking Corporation v. Hon. Salvador Tensuan, etc.,
Circle Financial Corporation, et al., decided in 1993. Here, the
stipulation on venue was contained in promissory notes and read as
follows:
[23]

"I/We hereby expressly submit to the jurisdiction of the courts of

Valenzuela any legal action which may arise out of this promissory
note."
This Court held the stipulation to be merely permissive since it did
not lay the venue in Valenzuela exclusively or mandatorily. The plain
or ordinary import of the stipulation is the grant of authority or
permission to bring suit in Valenzuela; but there is not the slightest
indication of an intent to bar suit in other competent courts. The
Court stated that there is no necessary or customary connection
between the words "any legal action" and an intent strictly to limit
permissible venue to the Valenzuela courts. Moreover, since the
venue stipulations include no qualifying or exclusionary terms,
express reservation of the right to elect venue under the ordinary
rules was unnecessary in the case at bar. The Court made clear that
"to the extent Bautista and Hoechst Philippines are inconsistent with
Polytrade (an en banc decision later in time than Bautista) and
subsequent
cases
reiterating Polytrade, Bautista andHoechst
Philippines have been rendered obsolete by the Polytrade line of
cases."
11. Philippine Banking Corporation v. Hon. Salvador Tensuan, etc.,
Brinell Metal Works Corp., et al., decided in 1994: In this case the
subject promissory notes commonly contained a stipulation reading:
[24]

"I/we expressly submit to the jurisdiction of the courts of Manila, any

legal action which may arise out of this promissory note."
the Court restated the rule in Polytrade that venue stipulations in a
contract, absent any qualifying or restrictive words, should be
considered merely as an agreement on additional forum, not limiting
venue to the specified place. They are not exclusive, but rather,
permissive. For to restrict venue only to that place stipulated in the
agreement is a construction purely based on technicality; on the
contrary, the stipulation should be liberally construed. The Court
stated: "The later cases of Lamis Ents v. Lagamon [108 SCRA

1981], Capati v. Ocampo [113 SCRA 794 [1982], Western Minolco v.

Court of Appeals[167 SCRA 592 [1988], Moles v. Intermediate
Appellate Court [169 SCRA 777 [1989], Hongkong and Shanghai
Banking Corporation v. Sherman [176 SCRA 331], Nasser v. Court of
Appeals [191 SCRA 783 [1990] and just recently, Surigao Century
Sawmill Co. v. Court of Appeals [218 SCRA 619 [1993], all treaded
the path blazed by Polytrade. The conclusion to be drawn from all
these is that the more recent jurisprudence shall properly be
deemed modificatory of the old ones."
The lone dissent observed: "There is hardly any question that a
stipulation of contracts of adhesion, fixing venue to a specified place
only, is void for, in such cases, there would appear to be no valid
and free waiver of the venue fixed by the Rules of Courts. However,
in cases where both parties freely and voluntarily agree on a
specified place to be the venue of actions, if any, between them,
then the only considerations should be whether the waiver (of the
venue fixed by the Rules of Court) is against public policy and
whether the parties would suffer, by reason of such waiver, undue
hardship and inconvenience; otherwise, such waiver of venue should
be upheld as binding on the parties. The waiver of venue in such
cases is sanctioned by the rules on jurisdiction."
Still other precedents adhered to the same principle.
12. Tantoco v. Court of Appeals, decided in 1977. Here, the parties
agreed in their sales contracts that the courts of Manila shall have
jurisdiction over any legal action arising out of their transaction. This
Court held that the parties agreed merely to add the courts of
Manila as tribunals to which they may resort in the event of suit, to
those indicated by the law: the courts either of Rizal, of which
private respondent was a resident, or of Bulacan, where petitioner
resided.
[25]

13. Sweet Lines, Inc. v. Teves, promulgated in 1987. In this case, a

similar stipulation on venue, contained in the shipping ticket issued
by Sweet Lines, Inc. (as Condition 14) -[26]

" ** that any and all actions arising out or the condition and
provisions of this ticket, irrespective of where it is issued, shall be
filed in the competent courts in the City of Cebu"
-- was declared unenforceable, being subversive of public policy. The
Court explained that the philosophy on transfer of venue of actions
is the convenience of the plaintiffs as well as his witnesses and to
promote the ends of justice; and considering the expense and
trouble a passenger residing outside of Cebu City would incur to
prosecute a claim in the City of Cebu, he would most probably
decide not to file the action at all.
On the other hand, in the cases hereunder mentioned, stipulations on
venue were held to be restrictive, or mandatory.

1. Bautista vs. De Borja, decided in 1966. In this case, the contract

provided that in case of any litigation arising therefrom or in
connection therewith, the venue of the action shall be in the City of
Manila. This Court held that without either party reserving the right
to choose the venue of action as fixed by law, it can reasonably be
inferred that the parties intended to definitely fix the venue of the
action, in connection with the contract sued upon in the proper
courts of the City of Manila only, notwithstanding that neither party
is a resident of Manila.
[27]

2. Gesmundo v. JRB Realty Corporation, decided in 1994.

lease contract declared that

[28]

Here the

" ** (V)enue for all suits, whether for breach hereof or damages or
any cause between the LESSOR and LESSEE, and persons claiming
under each, ** (shall be) the courts of appropriate jurisdiction in
Pasay City. . ."

This Court held that: "(t)he language used leaves no room for
interpretation. It clearly evinces the parties' intent to limit to the
'courts of appropriate jurisdiction of Pasay City' the venue for all
suits between the lessor and the lessee and those between parties
claiming under them. This means a waiver of their right to institute
action in the courts provided for in Rule 4, sec. 2(b)."
3. Hoechst Philippines, Inc. v. Torres, decided much earlier, in
1978, involved a strikingly similar stipulation, which read:
[29]

" ** (I)n case of any litigation arising out of this agreement, the
venue of any action shall be in the competent courts of the Province
of Rizal."
This Court held: "No further stipulations are necessary to elicit the
thought that both parties agreed that any action by either of them
would be filed only in the competent courts of Rizal province
exclusively."
4. Villanueva v. Mosqueda, decided in 1982. In this case, it was
stipulated that if the lessor violated the contract of lease he could
be sued in Manila, while if it was the lessee who violated the
contract, the lessee could be sued in Masantol, Pampanga. This
Court held that there was an agreement concerning venue of action
and the parties were bound by their agreement. "The agreement as
to venue was not permissive but mandatory."
[30]

5. Arquero v. Flojo, decided in 1988. The condition respecting

venue -- that any action against RCPI relative to the transmittal of a
telegram must be brought in the courts of Quezon City alone -- was
printed clearly in the upper front portion of the form to be filled in by
the sender. This Court held that since neither party reserved the
right to choose the venue of action as fixed by Section 2 [b], Rule 4,
as is usually done if the parties mean to retain the right of election
so granted by Rule 4, it can reasonably be inferred that the parties
intended to definitely fix the venue of action, in connection with the
written contract sued upon, in the courts of Quezon City only.
[31]

An analysis of these precedents reaffirms and emphasizes the

soundness of the Polytrade principle. Of the essence is the
ascertainment of the parties' intention in their agreement governing
the venue of actions between them. That ascertainment must be
done keeping in mind that convenience is the foundation of venue
regulations, and that that construction should be adopted which
most conduces thereto. Hence, the invariable construction placed on
venue stipulations is that they do not negate but merely
complement or add to the codal standards of Rule 4 of the Rules of
Court. In other words, unless the parties make very clear, by
employing categorical and suitably limiting language, that they wish
the venue of actions between them to be laid only and exclusively at
a definite place, and to disregard the prescriptions of Rule 4,
agreements on venue are not to be regarded as mandatory or
restrictive, but merely permissive, or complementary of said
rule. The fact that in their agreement the parties specify only one of
the venues mentioned in Rule 4, or fix a place for their actions
different from those specified by said rule, does not, without more,
suffice to characterize the agreement as a restrictive one. There
must, to repeat, be accompanying language clearly and
categorically expressing their purpose and design that actions
between them be litigated only at the place named by them,
regardless of the general precepts of Rule 4; and any doubt or
uncertainty as to the parties' intentions must be resolved against
giving their agreement a restrictive or mandatory aspect. Any other
rule would permit of individual, subjective judicial interpretations
without stable standards, which could well result in precedents in
hopeless inconsistency.
[32]

The record of the case at bar discloses that UNIMASTERS has its
principal place of business in Tacloban City, and KUBOTA, in Quezon
City. Under Rule 4, the venue of any personal action between them
is "where the defendant or any of the defendants resides or may be
found, or where the plaintiff or any of the plaintiffs resides, at the
election of the plaintiff." In other words, Rule 4 gives UNIMASTERS
[33]

the option to sue KUBOTA for breach of contract in the Regional Trial
Court of either Tacloban City or Quezon City.
But the contract between them provides that " ** All suits arising
out of this Agreement shall be filed with/in the proper Courts of
Quezon City," without mention of Tacloban City. The question is
whether this stipulation had the effect of effectively eliminating the
latter as an optional venue and limiting litigation between
UNIMASTERS and KUBOTA only and exclusively to Quezon City.
In light of all the cases above surveyed, and the general postulates
distilled therefrom, the question should receive a negative
answer. Absent additional words and expressions definitely and
unmistakably denoting the parties' desire and intention that actions
between them should be ventilated only at the place selected by
them, Quezon City -- or other contractual provisions clearly evincing
the same desire and intention -- the stipulation should be construed,
not as confining suits between the parties only to that one place,
Quezon City, but as allowing suits either in Quezon City or Tacloban
City, at the option of the plaintiff (UNIMASTERS in this case).
One last word, respecting KUBOTA's theory that the Regional Trial
Court had "no jurisdiction to take cognizance of ** (UNIMASTERS')
action considering that venue was improperly laid." This is not an
accurate statement of legal principle. It equates venue with
jurisdiction; but venue has nothing to do with jurisdiction, except in
criminal actions. This is fundamental. The action at bar, for the
recovery of damages in an amount considerably in excess
of P20,000.00, is assuredly within the jurisdiction of a Regional Trial
Court. Assuming that venue were improperly laid in the Court
where the action was instituted, the Tacloban City RTC, that would
be a procedural, not a jurisdictional impediment -- precluding
ventilation
of
the
case
before
that
Court
of
wrong
venue notwithstanding that the subject matter is within its
jurisdiction. However, if the objection to venue is waived by the
[34]

[35]

failure to set it up in a motion to dismiss, the RTC would proceed in

perfectly regular fashion if it then tried and decided the action.
[36]

This is true also of real actions. Thus, even if a case "affecting title
to, or for recovery of possession, or for partition or condemnation of,
or foreclosure of mortgage on, real property" were commenced in a
province or city other than that "where the property or any part
thereof lies," if no objection is seasonably made in a motion to
dismiss, the objection is deemed waived, and the Regional Trial
Court would be acting entirely within its competence and authority
in proceeding to try and decide the suit.
[37]

[38]

[39]

WHEREFORE, the appealed judgment of the Court of Appeals is

REVERSED, the Order of the Regional Trial Court of Tacloban City, Branch 6,
dated February 3, 1994, is REINSTATED and AFFIRMED, and said Court is
DIRECTED to forthwith proceed with Civil Case No. 93-12-241 in due course.
SO ORDERED.
Padilla, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan,
Mendoza, Francisco, Hermosisima, Jr. Panganiban, and Torres, Jr., JJ., concur.
Regalado, J., See concurring opinion.
G.R. No. L-27033

October 31, 1969

POLYTRADE
vs.
VICTORIANO BLANCO, defendant-appellant.

CORPORATION, plaintiff-appellee,

Paredes,
Poblador,
Cruz
and
Nazareno
for
Isidro T. Almeda and Mario T. Banzuela for defendant-appellant.

plaintiff-appellee.

SANCHEZ, J.:
Suit before the Court of First Instance of Bulacan on four causes of action to recover the
purchase price of rawhide delivered by plaintiff to defendant. 1 Plaintiff corporation has
its principal office and place of business in Makati, Rizal. Defendant is a resident of
Meycauayan, Bulacan. Defendant moved to dismiss upon the ground of improper venue.
He claims that by contract suit may only be lodged in the courts of Manila. The Bulacan
court overruled him. He did not answer the complaint. In consequence, a default
judgment was rendered against him on September 21, 1966, thus:

WHEREFORE, judgment is hereby rendered in favor of plaintiff and against

defendant ordering defendant to pay plaintiff the following amounts:

First
Cause
Action

of

P60,845.67, with interest thereon at 1% a month from May 9, 1965

until the full amount is paid.

Second Cause of
Action

P51,952.55, with interest thereon at 1% a month from March 30,

1965 until the full amount is paid.

Third Cause
Action

of

P53,973.07, with interest thereon at 1% a month from July 3, 1965

until the full amount is paid.

Fourth
Action

of

P41,075.22, with interest thereon at 1% a month 2 until the full

amount is paid.

Cause

In addition, defendant shall pay plaintiff attorney's fees amounting to 25% of the
principal amount due in each cause of action, and the costs of the suit. The
amount of P400.00 shall be deducted from the total amount due plaintiff in
accordance with this judgment.
Defendant appealed.
1. The forefront question is whether or not venue was properly laid in the province of
Bulacan where defendant is a resident.
Section 2 (b), Rule 4 of the Rules of Court on venue of personal actions triable by courts
of first instance and this is one provides that such "actions may be commenced
and tried where the defendant or any of the defendants resides or may be found, or
where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff."
Qualifying this provision in Section 3 of the same Rule which states that venue may be
stipulated by written agreement "By written agreement of the parties the venue of an
action may be changed or transferred from one province to another."
Defendant places his case upon Section 3 of Rule 4 just quoted. According to defendant,
plaintiff and defendant, by written contracts covering the four causes of action,
stipulated that: "The parties agree to sue and be sued in the Courts of Manila." This
agreement is valid.3 Defendant says that because of such covenant he can only be sued
in the courts of Manila. We are thus called upon to shake meaning from the terms of the
agreement just quoted.
But first to the facts. No such stipulation appears in the contracts covering the first two
causes of action. The general rule set forth in Section 2 (b), Rule 4, governs, and as to

said two causes of action, venue was properly laid in Bulacan, the province of
defendant's residence.
The stipulation adverted to is only found in the agreements covering the third and
fourth causes of action. An accurate reading, however, of the stipulation, "The parties
agree to sue and be sued in the Courts of Manila," does not preclude the filing of suits in
the residence of plaintiff or defendant. The plain meaning is that the parties merely
consented to be sued in Manila. Qualifying or restrictive words which would indicate that
Manila and Manila alone is the venue are totally absent therefrom. We cannot read into
that clause that plaintiff and defendant bound themselves to file suits with respect to
the last two transactions in question only or exclusively in Manila. For, that agreement
did not change or transfer venue. It simply is permissive. The parties solely agreed to
add the courts of Manila as tribunals to which they may resort. They did not waive their
right to pursue remedy in the courts specifically mentioned in Section 2(b) of Rule
4. Renuntiatio non praesumitur.
Illuminating on this point is Engel vs. Shubert Theatrical Co., 151 N.Y.S. 593, 594. And
this, became there the stipulation as to venue is along lines similar to the present. Said
stipulation reads: "In case of dispute, both contracting parties agree to submit to the
jurisdiction of the Vienna courts." And the ruling is: "By the clause in question the
parties do not agree to submit their disputes to the jurisdiction of the Viennese court,
and to those courts only. There is nothing exclusive in the language used. They do agree
to submit to the Viennese jurisdiction, but they say not a word in restriction of the
jurisdiction of courts elsewhere; and whatever may be said on the subject of the legality
of contracts to submit controversies to courts of certain jurisdictions exclusively, it is
entirely plain that such agreements should be strictly construed, and should not be
extended by implication."
Venue here was properly laid.
2. Defendant next challenges the lower court's grant to plaintiff of interest at the rate of
one per centum per month. Defendant says that no such stipulation as to right of
interest appears in the sales confirmation orders which provided: "TERMS 60 days
after delivery with interest accruing on postdated cheques beyond 30 days." The flaw in
this argument lies in that the interest and the rate thereof are expressly covenanted in
the covering trust receipts executed by defendant in favor of plaintiff, as follows: "All
obligations of the undersigned under this agreement of trust shall bear interest at the
rate of one per centum (1%) per month from the date due until paid."
On this score, we find no error.
3. Defendant protests the award of attorneys' fees which totals P51,961.63, i.e., 25% of
the total principal indebtedness of P207,846.51 (exclusive of interest). Defendant's
thesis is that the foregoing sum is "exorbitant and unconscionable."
To be borne in mind is that the attorneys' fees here provided is not, strictly speaking,
the attorneys' fees recoverable as between attorney and client spoken of and regulated
by the Rules of Court. Rather, the attorneys' fees here are in the nature of liquidated
damages and the stipulation therefor is aptly called a penal clause. 4 It has been said
that so long as such stipulation does not contravene law, morals, or public order, it is
strictly binding upon defendant. 5 The attorneys' fees so provided are awarded in favor of

the litigant, not his counsel. It is the litigant, not counsel, who is the judgment creditor
entitled to enforce the judgment by execution.6
The governing law then is Article 2227 of the Civil Code, viz.: "Liquidated damages,
whether intended as an indemnity or a penalty, shall be equitably reduced if they are
iniquitous or unconscionable." For this reason, we do not really have to strictly view the
reasonableness of the attorneys' fees in the light of such factors as the amount and
character of the services rendered, the nature and importance of the litigation, and the
professional character and the social standing of the attorney. We do concede, however,
that these factors may be an aid in the determination of the iniquity or
unconscionableness of attorneys' fees as liquidated damages.
May the attorneys' fees (P51,961.63) here granted be tagged as iniquitous or
unconscionable? Upon the circumstances, our answer is in the negative. Plaintiff's
lawyers concededly are of high standing. More important is that this case should not
have gone to court. It could have been easily avoided had defendant been faithful in
complying with his obligations. It is not denied that the rawhide was converted into
leather and sold by defendant. He raises no defense. In fact, he did not even answer the
complaint in the lower court, and was thus declared in default. Nor does he deny the
principal liability. Add to all these the fact that the writ of attachment issued below upon
defendant's properties yielded no more than P400 and the picture is complete. The
continued maintenance by defendant of the suit is plainly intended for delay. The
attorneys' fees awarded cannot be called iniquitous or unconscionable.
In the very recent case of Universal Motors Corporation vs. Dy Hian Tat (1969), 28 SCRA
161, 170, we allowed attorneys' fees in the form of liquidated damages at the rate of
25% of the total amount of the indebtedness. Here, the trial court has already reduced
the attorneys' fees from the stipulated 25% "of the total amount involved, principal and
interest, then unpaid" to only 25% of the principal amount due. There is no reason why
such judgment should be disturbed.
FOR THE REASON GIVEN, the appealed judgment is hereby affirmed, except that
interest granted, in reference to the fourth cause of action, should start from March 24,
1965.
Costs against defendant-appellant. So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro, Fernando, Teehankee
and Barredo, JJ.,concur.

Footnotes
G.R. No. L-27033

October 31, 1969

POLYTRADE
vs. VICTORIANO BLANCO, defendant-appellant.
FACTS:

CORPORATION, plaintiff-appellee,

Suit before the Court of First Instance of Bulacan on four causes of action to recover the
purchase price of rawhide delivered by plaintiff to defendant.1 Plaintiff corporation has
its principal office and place of business in Makati, Rizal. Defendant is a resident of
Meycauayan, Bulacan. Defendant moved to dismiss upon the ground of improper venue.
He claims that by contract suit may only be lodged in the courts of Manila. The Bulacan
court overruled him. He did not answer the complaint. In consequence, a default
judgment was rendered against him on September 21, 1966, thus:
WHEREFORE, judgment is hereby rendered in favor of plaintiff and against
defendant ordering defendant to pay plaintiff the following amounts:

First
Cause
Action

of

P60,845.67, with interest thereon at 1% a month from May 9, 1965

until the full amount is paid.

Second Cause of
Action

P51,952.55, with interest thereon at 1% a month from March 30,

1965 until the full amount is paid.

Third Cause
Action

of

P53,973.07, with interest thereon at 1% a month from July 3, 1965

until the full amount is paid.

Fourth
Action

of

P41,075.22, with interest thereon at 1% a month 2 until the full

amount is paid.

Cause

In addition, defendant shall pay plaintiff attorney's fees amounting to 25% of the
principal amount due in each cause of action, and the costs of the suit. The
amount of P400.00 shall be deducted from the total amount due plaintiff in
accordance with this judgment.
Defendant appealed.
1. The forefront question is whether or not venue was properly laid in the province of
Bulacan where defendant is a resident.
Section 2 (b), Rule 4 of the Rules of Court on venue of personal actions triable by courts
of first instance and this is one provides that such "actions may be commenced
and tried where the defendant or any of the defendants resides or may be found, or
where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff."
Qualifying this provision in Section 3 of the same Rule which states that venue may be
stipulated by written agreement "By written agreement of the parties the venue of an
action may be changed or transferred from one province to another."

Defendant places his case upon Section 3 of Rule 4 just quoted. According to defendant,
plaintiff and defendant, by written contracts covering the four causes of action,
stipulated that: "The parties agree to sue and be sued in the Courts of Manila." This
agreement is valid.3 Defendant says that because of such covenant he can only be sued
in the courts of Manila. We are thus called upon to shake meaning from the terms of the
agreement just quoted.
But first to the facts. No such stipulation appears in the contracts covering the first two
causes of action. The general rule set forth in Section 2 (b), Rule 4, governs, and as to
said two causes of action, venue was properly laid in Bulacan, the province of
defendant's residence.
The stipulation adverted to is only found in the agreements covering the third and
fourth causes of action. An accurate reading, however, of the stipulation, "The parties
agree to sue and be sued in the Courts of Manila," does not preclude the filing of suits in
the residence of plaintiff or defendant. The plain meaning is that the parties merely
consented to be sued in Manila. Qualifying or restrictive words which would indicate that
Manila and Manila alone is the venue are totally absent therefrom. We cannot read into
that clause that plaintiff and defendant bound themselves to file suits with respect to
the last two transactions in question only or exclusively in Manila. For, that agreement
did not change or transfer venue. It simply is permissive. The parties solely agreed to
add the courts of Manila as tribunals to which they may resort. They did not waive their
right to pursue remedy in the courts specifically mentioned in Section 2(b) of Rule
4. Renuntiatio non praesumitur.
Illuminating on this point is Engel vs. Shubert Theatrical Co., 151 N.Y.S. 593, 594. And
this, became there the stipulation as to venue is along lines similar to the present. Said
stipulation reads: "In case of dispute, both contracting parties agree to submit to the
jurisdiction of the Vienna courts." And the ruling is: "By the clause in question the
parties do not agree to submit their disputes to the jurisdiction of the Viennese court,
and to those courts only. There is nothing exclusive in the language used. They do agree
to submit to the Viennese jurisdiction, but they say not a word in restriction of the
jurisdiction of courts elsewhere; and whatever may be said on the subject of the legality
of contracts to submit controversies to courts of certain jurisdictions exclusively, it is
entirely plain that such agreements should be strictly construed, and should not be
extended by implication."
Venue here was properly laid.
2. Defendant next challenges the lower court's grant to plaintiff of interest at the rate of
one per centum per month. Defendant says that no such stipulation as to right of
interest appears in the sales confirmation orders which provided: "TERMS 60 days
after delivery with interest accruing on postdated cheques beyond 30 days." The flaw in
this argument lies in that the interest and the rate thereof are expressly covenanted in
the covering trust receipts executed by defendant in favor of plaintiff, as follows: "All
obligations of the undersigned under this agreement of trust shall bear interest at the
rate of one per centum (1%) per month from the date due until paid."
On this score, we find no error.

3. Defendant protests the award of attorneys' fees which totals P51,961.63, i.e., 25% of
the total principal indebtedness of P207,846.51 (exclusive of interest). Defendant's
thesis is that the foregoing sum is "exorbitant and unconscionable."
To be borne in mind is that the attorneys' fees here provided is not, strictly speaking,
the attorneys' fees recoverable as between attorney and client spoken of and regulated
by the Rules of Court. Rather, the attorneys' fees here are in the nature of liquidated
damages and the stipulation therefor is aptly called a penal clause. 4 It has been said
that so long as such stipulation does not contravene law, morals, or public order, it is
strictly binding upon defendant. 5 The attorneys' fees so provided are awarded in favor of
the litigant, not his counsel. It is the litigant, not counsel, who is the judgment creditor
entitled to enforce the judgment by execution.6
The governing law then is Article 2227 of the Civil Code, viz.: "Liquidated damages,
whether intended as an indemnity or a penalty, shall be equitably reduced if they are
iniquitous or unconscionable." For this reason, we do not really have to strictly view the
reasonableness of the attorneys' fees in the light of such factors as the amount and
character of the services rendered, the nature and importance of the litigation, and the
professional character and the social standing of the attorney. We do concede, however,
that these factors may be an aid in the determination of the iniquity or
unconscionableness of attorneys' fees as liquidated damages.
May the attorneys' fees (P51,961.63) here granted be tagged as iniquitous or
unconscionable? Upon the circumstances, our answer is in the negative. Plaintiff's
lawyers concededly are of high standing. More important is that this case should not
have gone to court. It could have been easily avoided had defendant been faithful in
complying with his obligations. It is not denied that the rawhide was converted into
leather and sold by defendant. He raises no defense. In fact, he did not even answer the
complaint in the lower court, and was thus declared in default. Nor does he deny the
principal liability. Add to all these the fact that the writ of attachment issued below upon
defendant's properties yielded no more than P400 and the picture is complete. The
continued maintenance by defendant of the suit is plainly intended for delay. The
attorneys' fees awarded cannot be called iniquitous or unconscionable.
In the very recent case of Universal Motors Corporation vs. Dy Hian Tat (1969), 28 SCRA
161, 170, we allowed attorneys' fees in the form of liquidated damages at the rate of
25% of the total amount of the indebtedness. Here, the trial court has already reduced
the attorneys' fees from the stipulated 25% "of the total amount involved, principal and
interest, then unpaid" to only 25% of the principal amount due. There is no reason why
such judgment should be disturbed.
FOR THE REASON GIVEN, the appealed judgment is hereby affirmed, except that
interest granted, in reference to the fourth cause of action, should start from March 24,
1965.

G.R. No. L-22485

CONSUELO V. CALO, doing business under the trade name CVC Lumber Industries,
assisted by MARCOS M. CALO, plaintiffs-appellants, vs AJAX INTERNATIONAL,
INCORPORATED, defendant-appellee.

FACTS:
Calo ordered from Ajax International, Inc., 1,200 ft. of John Shaw wire rope at P2.85
per foot evidenced by Charge Order No. 37071. When the wire rope was however
delivered, the same was found short of 300 ft.
In the meantime, a complaint docketed as Civil Case No. IV-93062 was filed in the
Municipal Court of Manila by one Adolfo Benavides who claimed to have acquired
the outstanding credit account of Calo from defendant Ajax International, Inc.
Charge Order No. 37071 was among those included in the assigned account. Later,
Calo filed Civil Case No. 860 for specific performance or discharge from obligation,
and damages.
Defendant moved for the dismissal of Civil Case 860 on the ground, inter alia, that
the subject thereof was involved and intimately related to that in Civil Case No. IV93062 of the Municipal Court of Manila. This was granted and the case was
dismissed on the ground that plaintiff's claim is a compulsory counter-claim that
should be filed in the latter case.
ISSUE: Whether or not plaintiffs claim is a compulsory counterclaim hence must be
dismissed and instead filed in Civil Case No. IV-93062 of the Municipal Court of
Manila
HENCE: NO.
There is no question that it arises out of the same transaction which is the basis of
the complaint in Civil Case No. IV-93062 and does not require the presence of third
parties over whom the municipal court of Manila could not acquire jurisdiction.
However, plaintiff's claim is not a compulsory counterclaim in Civil Case No. IV93062 for the simple reason that the amount thereof exceeds the jurisdiction of the
municipal court. The rule that a compulsory counterclaim not set up is barred, when
applied to the municipal court, presupposes that the amount involved is within the
said court's jurisdiction. Otherwise, as this Court had already noted in Yu Lay v.
Galmes [[3]] we would come to the absurd situation where a claim must be filed
with the municipal court which it is prohibited from taking cognizance of, being
beyond its jurisdiction.
Besides, the reason underlying the rule, which is to settle all related controversies in
one sitting only, does not obtain. For, even if the counterclaim in excess of the
amount cognizable by the inferior court is set up, the defendant cannot obtain
positive relief. The Rules allow this only for the defendant to prevent plaintiff from
recovering from him.[[4]] This means that should the court find both plaintiff's
complaint and defendant's counterclaim (for an amount exceeding said court's
jurisdiction) meritorious, it will simply dismiss the complaint on the ground that
defendant has a bigger credit. Since defendant still has to institute a separate

action for the remaining balance of his counterclaim, the previous litigation did not
really settle all related controversies.
Plaintiff Calo's claim of P12,000.00 not being a compulsory counterclaim in Civil
Case No. VI-93062, it need not be filed there. The pendency then of said civil case
could not be pleaded in abatement of Civil Case No. 860. Consequently, the lower
court erred in dismissing plaintiff's complaint.