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REMEDIAL LAW REVIEW 1 ATTY.

HENEDINO BRONDIAL
COMPILATION OF CASE DIGESTS
2ND Sem 2016-2017

CIVIL PROCEDURE
I. JURISDICTION
DUERO VS. CA
373 SCRA 11

Topic:

Jurisdiction and the application of estoppel

Facts:

Sometime in 1988, according to petitioner, private Eradel entered and occupied petitioner's land
covered by Tax Declaration No. A-16-13-302, located in Baras, San Miguel, Surigao del Sur. As shown in
the tax declaration, the land had an assessed value of P5,240. Petitioner informed respondent that the
land was his, and requested the latter to vacate the land. However, despite repeated demands, private
respondent remained steadfast in his refusal to leave the land.

On June 16, 1995, petitioner filed before the RTC a complaint for Recovery of Possession and
Ownership with Damages and Attorney's Fees against private respondent and two others, namely,
Apolinario and Inocencio Ruena.

Petitioner and the Ruenas executed a compromise agreement, which became the trial court's
basis for a partial judgment rendered on January 12, 1996. In this agreement, the Ruenas recognized and
bound themselves to respect the ownership and possession of Duero. Herein private respondent Eradel
was not a party to the agreement, and he was declared in default for failure to file his answer to the
complaint.

Petitioner presented his evidence ex parte on February 13, 1996. On May 8, 1996, judgment was
rendered in his favor, and private respondent was ordered to peacefully vacate and turn over the lot.

On June 10, 1996, private respondent filed a Motion for New Trial, alleging that he has been
occupying the land as a tenant of Artemio Laurente, Sr., since 1958. He explained that he turned over the
complaint and summons to Laurente in the honest belief that as landlord, the latter had a better right to
the land and was responsible to defend any adverse claim on it. However, the trial court denied the
motion for new trial.

Private respondent then filed before the RTC a Petition for Relief from Judgment, reiterating the
same allegation in his Motion for New Trial. The RTC again denied the Petition.

Private respondent filed a Motion for Reconsideration in which he alleged that the RTC has no
jurisdiction over the case since the value of the land is only P5,240, which is within the jurisdiction of the
MTC. However, the RTC denied the MR.

Private respondent filed with the Court of Appeals, a petition for certiorari which the latter granted.

Issues:

1) Whether RTC has jurisdiction over the case

2) Whether the private respondent Eradel is estopped from questioning the jurisdiction of RTC
after he has successfully sought affirmative relief therefrom

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Ruling:

1) None. The case falls under the jurisdiction of the MTC based on Republic Act 7691 amending
BP 129.

2) No. For estoppel to apply, the action giving rise thereto must be unequivocal and intentional
because, if misapplied, estoppel may become a tool of injustice.

Private respondent, an unschooled farmer, in the mistaken belief that since he was merely a
tenant of the late Artemio Laurente Sr., his landlord, gave the summons to a Hipolito Laurente, one of the
surviving heirs of Artemio Sr., who did not do anything about the summons. For failure to answer the
complaint, private respondent was declared in default.

He then filed a Motion for New Trial in the same court, but such was denied. He filed before the
RTC a Motion for Relief from Judgment. Again, the same court denied his motion, hence he moved for
reconsideration of the denial. In his Motion for Reconsideration, he raised for the first time the RTC's lack
of jurisdiction. This motion was again denied.

Note that private respondent raised the issue of lack of jurisdiction, not when the case was
already on appeal, but when the case, was still before the RTC that ruled him in default, denied his
motion for new trial as well as for relief from judgment, and denied likewise his two motions for
reconsideration

The fundamental rule is that, the lack of jurisdiction of the court over an action cannot be waived
by the parties, or even cured by their silence, acquiescence or even by their express consent. Further, a
party may assail the jurisdiction of the court over the action at any stage of the proceedings and even on
appeal. The appellate court did not err in saying that the RTC should have declared itself barren of
jurisdiction over the action

Citing Javier v CA, the Court reiterated: Under the rules, it is the duty of the court to dismiss an
action 'whenever it appears that the court has no jurisdiction over the subject matter.' (Sec. 2, Rule 9,
Rules of Court)

Thus, the ruling of the CA is affirmed. The decision of the RTC and its Order that private
respondent turn over the disputed land to petitioner, and the Writ of Execution it issued, are annulled and
set aside.

DONATO VS. COURT OF APPEALS


417 SCRA 216

FACTS: Petitioner Antonio T. Donato is the registered owner of a real property located in Manila, covered
by a TCT. On June 7, 1994, petitioner filed a complaint before the MeTC of Manila for forcible entry and
unlawful detainer against 43 named defendants and all unknown occupants of the subject property.
Petitioner alleges that: private respondents had oral contracts of lease that expired at the end of each
month but were impliedly renewed under the same terms by mere acquiescence or tolerance; sometime
in 1992, they stopped paying rent; on April 7, 1994, petitioner sent them a written demand to vacate; the
non-compliance with said demand letter constrained him to file the ejectment case against them.

Of the 43 named defendants, only 20 (private respondents) filed a consolidated Answer dated June 29,
1994 wherein they denied non-payment of rentals. They contend that they cannot be evicted because the
Urban Land Reform Law guarantees security of tenure and priority right to purchase the subject property;

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and that there was a negotiation for the purchase of the lots occupied by them but when the negotiation
reached a passive stage, they decided to continue payment of rentals and tendered payment to
petitioners counsel and thereafter initiated a petition for consignation of the rentals in a civil case while
they await the outcome of the negotiation to purchase.

On April 17, 1997, petitioner filed a MR attaching thereto a photocopy of the certification of non-forum
shopping duly signed by petitioner himself and the relevant records of the MeTC and the RTC. Five days
later, or on April 22, 1997, petitioner filed a Supplement to his MR submitting the duly authenticated
original of the certification of non-forum shopping signed by petitioner.

On June 23, 1997 the CA denied petitioners MR and its supplement, ruling that petitioners subsequent
compliance did not cure the defect in the instant petition.

ISSUE:

1) Whether or not the petitioner has adequately explained his failure to personally sign the certification
which justifies relaxation of the rule. YES

2) Whether or not the failure of the petitioner to comply with Section 3, paragraph b, Rule 6 of the RIRCA,
that is, to append to his petition copies of the pleadings and other material portions of the records as
would support the petition, justifies the outright dismissal of the petition. NO

HELD:

1) YES. The requirement regarding the need for a certification of non-forum shopping in cases filed before
the CA and the corresponding sanction for noncompliance thereto are found in the then prevailing
Revised Circular No. 2891. It provides that the petitioner himself must make the certification against forum
shopping and a violation thereof shall be a cause for the summary dismissal of the multiple petition or
complaint. The rationale for the rule of personal execution of the certification by the petitioner himself is
that it is only the petitioner who has actual knowledge of whether or not he has initiated similar actions or
proceedings in other courts or tribunals; even counsel of record may be unaware of such fact. The Court
has ruled that with respect to the contents of the certification, the rule on substantial compliance may be
availed of. This is so because the requirement of strict compliance with the rule regarding the certification
of non-forum shopping simply underscores its mandatory nature in that the certification cannot be
altogether dispensed with.

We fully agree with petitioner that it was physically impossible for the petition to have been prepared and
sent to the petitioner in the United States, for him to travel from Virginia, U.S.A. to the nearest Philippine
Consulate in Washington, D.C., U.S.A., in order to sign the certification before the Philippine Consul, and
for him to send back the petition to the Philippines within the 15-day reglementary period. Thus, we find
that petitioner has adequately explained his failure to personally sign the certification which justifies
relaxation of the rule.

We have stressed that the rules on forum shopping, which were precisely designed to promote and
facilitate the orderly administration of justice, should not be interpreted with such absolute literalness as to
subvert its own ultimate and legitimate objective which is simply to prohibit and penalize the evils of
forum-shopping. The subsequent filing of the certification duly signed by the petitioner himself should thus
be deemed substantial compliance, pro hac vice.

2) NO. The failure of the petitioner to comply with Section 3, paragraph b, Rule 6 of the RIRCA, that is, to
append to his petition copies of the pleadings and other material portions of the records as would support
the petition, does not justify the outright dismissal of the petition. It must be emphasized that the RIRCA
gives the appellate court a certain leeway to require parties to submit additional documents as may be
necessary in the interest of substantial justice. Under Section 3, paragraph d of Rule 3 of the RIRCA, the
CA may require the parties to complete the annexes as the court deems necessary, and if the petition is

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given due course, the CA may require the elevation of a complete record of the case as provided for
under Section 3(d)(5) of Rule 6 of the RIRCA. At any rate, petitioner attached copies of the pleadings and
other material portions of the records below with his motion for reconsideration. In Jaro vs. Court of
Appeals, the Court reiterated the doctrine laid down in Cusi-Hernandez vs. Diaz and Piglas-Kamao vs.
National Labor Relations Commission that subsequent submission of the missing documents with the
motion for reconsideration amounts to substantial compliance which calls for the relaxation of the rules of
procedure. We find no cogent reason to depart from this doctrine.

Truly, in dismissing the petition for review, the CA had committed grave abuse of discretion amounting to
lack of jurisdiction in putting a premium on technicalities at the expense of a just resolution of the case.

GONZAGA VS. COURT OF APPEALS


394 SCRA 472

FACTS: In 1970, spouses Gonzaga bought a parcel of land from Lucky Home Inc. Said lot was
specifically denominated as Lot No. 19 and which the spouses mortgaged to the Social Security
Commission as a security for their housing loan. Meanwhile, the spouses started to construct their house
on Lot No. 18, and not on Lot No. 19. They mistakenly identified Lot No. 18 as Lot No. 19. Lucky Homes
then informed them of such mistake but the spouses instead offered to buy Lot No. 18 to widen their
premises, thus they continued building their house thereon. However for failure on the part of the spouses
to pay their obligation to the SSS, Lot No. 19 was consequently foreclosed. The title thereto was
cancelled and a new one was issued in the name of SSS. After such foreclosure, the spouses offered to
swap Lot Nos.18 and 19 and demanded from lucky homes to reform their contract. Lucky home however
refused. This prompted the spouses to file an action for reformation of contract with damages before the
RTC. The RTC however dismissed the action for lack of merit and awarded lucky homes moral damages
and attorneys fees. Subsequently then, a writ of execution was issued. Spouses urgently filed a motion to
recall such writ, questioning now the jurisdiction of the RTC on the ground that the case falls within the
jurisdiction of the Housing and land use regulatory board. Subsequently, the spouses went to the CA to
annul RTCs decision. CA dismissed the petition on the ground that the spouses were estopped from
question RTCs jurisdiction pursuant to the case of Tijam.. On the other hand spouses contended that the
doctrine in Tijam case has been abandoned.

ISSUE: Whether the spouses Gonzaga is estopped from questioning the jurisdiction of the trial court?

HELD: Yes. Petitioners claim that the recent decisions of this Court have already abandoned the doctrine
laid down in Tijam vs. Sibonghanoy. We do not agree. In countless decisions, this Court has consistently
held that, while an order or decision rendered without jurisdiction is a total nullity and may be assailed at
any stage, active participation in the proceedings in the court which rendered the order or decision will bar
such party from attacking its jurisdiction.

In the case at bar, it was petitioners themselves who invoked the jurisdiction of the court a quo by
instituting an action for reformation of contract against private respondents. It appears that, in the
proceedings before the trial court, petitioners vigorously asserted their cause from start to finish. Not even
once did petitioners ever raise the issue of the courts jurisdiction during the entire proceedings which
lasted for two years. It was only after the trial court rendered its decision and issued a writ of execution
against them in 1998 did petitioners first raise the issue of jurisdiction and it was only because said
decision was unfavorable to them. Petitioners thus effectively waived their right to question the courts
jurisdiction over the case they themselves filed.

ESCOBAL VS. GARCHITORENA


G.R. No. 124644 February 5, 2004

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TOPIC: Jurisdiction of the court over criminal cases is determined by the allegations in the Information or
the Complaint and the statute in effect at the time of the commencement of the action, unless such statute
provides for a retroactive application thereof.

FACTS: Petitioner is a graduate of PMA and a member of AFP, PH Constabulary, and the Intelligence
Group of PNP. A shootout occurred during a surveillance operation conducted by him and his team.
Petitioner and one Natividad Bombita, Jr. alias Jun Bombita were then indicted for murder before the
RTC. RTC then issued a warrant and petitioner posted bail. RTC also issued an order preventively
suspending petitioner. He was then arraigned and pleaded not guilty. Petitioner, after arraignment, filed a
motion to quash the information on the ground that the court martial, not the RTC, has jurisdiction over
criminal cases involving PNP members and officers.

Pending the resolution of said motion, petitioner filed another motion for the lifting of his suspension. He
also filed an MD averring that since the offense was committed in the performance of his duties, it was the
Sandiganbayan which had exclusive jurisdiction over the same.

RTC denied motion to lift suspension. RTC initially denied MD upon preliminary investigation, finding
that the offense was not committed in the performance of petitioners duties. However, upon MR, RTC
reversed itself and declared that based on the petitioners evidence, he was on official mission when the
shooting occurred. It concluded that the prosecution failed to adduce controverting evidence thereto. It
likewise considered Luz Nacario Nuecas admission in her complaint before the PLEB that the petitioner
was on official mission when the shooting happened. RTC then issued an order directing the prosecutor
to transmit the case to the SB

Presiding Judge of Sandiganbayan ordered the remand of the case to the RTC on the ff grounds:

1. considering that the petitioner had a salary grade of 23.


2. Furthermore, the prosecution had already rested its case and the petitioner had commenced
presenting his evidence in the RTC; following the rule on continuity of jurisdiction, the latter court
should continue with the case and render judgment therein after trial

ISSUE: Which court/ tribunal has jurisdiction over the murder charge against petitioner?

HELD: RTC.

The jurisdiction of the court over criminal cases is determined by the allegations in the Information or the
Complaint and the statute in effect at the time of the commencement of the action, unless such statute
provides for a retroactive application thereof. The jurisdictional requirements must be alleged in the
Information. Such jurisdiction of the court acquired at the inception of the case continues until the case is
terminated.

Under Section 4(a) of P.D. No. 1606 as amended by P.D. No. 1861, the Sandiganbayan had exclusive
jurisdiction in all cases involving the following:

(1) Violations of Republic Act No. 3019, as amended, otherwise known as the Anti-Graft and Corrupt
Practices Act, Republic Act No. 1379, and Chapter II, Section 2, Title VII of the Revised Penal Code;

(2) Other offenses or felonies committed by public officers and employees in relation to their office,
including those employed in government-owned or controlled corporations, whether simple or complexed
with other crimes, where the penalty prescribed by law is higher than prision correccional or imprisonment
for six (6) years, or a fine of P6,000.00 .

However, for the Sandiganbayan to have exclusive jurisdiction under the said law over crimes committed
by public officers in relation to their office, it is essential that the facts showing the intimate relation
between the office of the offender and the discharge of official duties must be alleged in the Information. It
is not enough to merely allege in the Information that the crime charged was committed by the offender in

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relation to his office because that would be a conclusion of law. The amended Information filed with the
RTC against the petitioner does not contain any allegation showing the intimate relation between his
office and the discharge of his duties. Hence, the RTC had jurisdiction over the offense charged when on
November 24, 1995, it ordered the re-amendment of the Information to include therein an allegation that
the petitioner committed the crime in relation to office. The trial court erred when it ordered the elevation
of the records to the Sandiganbayan. It bears stressing that R.A. No. 7975 amending P.D. No. 1606 was
already in effect and under Section 2 of the law:

In cases where none of the principal accused are occupying positions corresponding to salary grade 27
or higher, as prescribed in the said Republic Act No. 6758, or PNP officers occupying the rank of
superintendent or higher, or their equivalent, exclusive jurisdiction thereof shall be vested in the proper
Regional Trial Court, Metropolitan Trial Court, Municipal Trial Court, and Municipal Circuit Trial Court, as
the case may be, pursuant to their respective jurisdiction as provided in Batas Pambansa Blg. 129.

Under the law, even if the offender committed the crime charged in relation to his office but occupies a
position corresponding to a salary grade below 27, the proper Regional Trial Court or Municipal Trial
Court, as the case may be, shall have exclusive jurisdiction over the case. In this case, the petitioner was
a Police Senior Inspector, with salary grade 23. He was charged with homicide punishable by reclusion
temporal. Hence, the RTC had exclusive jurisdiction over the crime charged conformably to Sections 20
and 32 of Batas Pambansa Blg. 129, as amended by Section 2 of R.A. No. 7691.

The petitioners contention that R.A. No. 7975 should not be applied retroactively has no legal basis. It
bears stressing that R.A. No. 7975 is a substantive procedural law which may be applied retroactively.

DUNCANO VS SB
G.R. NO. 191894

TOPIC: Jurisdiction of the SB does not cover Reg. Directors below SG 27

Petition for certiorari under Rule 65 of the Rules of Court (Rules) with prayer for issuance of preliminary
injunction and/or temporary restraining order seeks to reverse and set aside the Resolution and Order of
respondent Sandiganbayan Second Division, which denied petitioner's Motion to Dismiss on the ground
of lack of jurisdiction.

FACTS: Danilo A. Duncano is, the Regional Director of the Bureau of Internal Revenue (BIR) with Salary
Grade 26 as classified under Republic Act (R.A.) No. 6758. Office of the Special Prosecutor (OSP), Office
of the Ombudsman, filed a criminal case against him for violation of Section 8, in relation to Section 11 of
R.A. No. 6713. Duncano filed a Motion to Dismiss with Prayer to Defer the Issuance of Warrant of Arrest
contending that the SB has no jurisdiction to try and hear the case because he is an official of the
executive branch occupying the position of a Regional Director but with a compensation that is classified
as below Salary Grade 27.

ISSUE: WON petitioner falls within the jurisdiction of the SB considering he is a Reg. Director with SG 26.

RULING: Petitioner is not an executive official with Salary Grade 27 or higher. Neither does he hold any
position particularly enumerated in Section 4 (A) (1) (a) to (g). Jurisdiction over the cases falls with the
Regional Trial Court.

The Sandiganbayan has no jurisdiction over violations of Section 3(a) and (e), Republic Act No. 3019, as
amended, unless committed by public officials and employees occupying positions of regional director
and higher with Salary Grade "27" or higher, under the Compensation and Position Classification Act of
1989 (Republic Act No. 6758) in relation to their office.

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DEMOSTHENES P. AGAS, JR., et al. vs PHILIPPINE INTERNATIONAL AIR TERMINALS CO., INC.

G.R. No. 155001, May 5, 2003

TOPIC: Jurisdiction and Hierarchy of Courts

FACTS: Asias Emerging Dragon Corp. (AEDC) submitted a proposal to the DOTC for the development of
NAIA Terminal 3. After a careful examination, the DOTC created the Prequalification Bids and Awards
Committee (PBAC) for the implementation of the project. PBAC however, awarded the project to Phil.
International Air Terminals Co (PIATCO). AEDC filed before the RTC of Pasig a Petition for Nullity of the
Proceedings and for Prohibition. The other air service providers of MIAA also claimed that the awarding of
the project to PIATCO would somehow jeopardize their employment or concession-contracts. PIATCO
commenced an arbitration proceeding before the International Chamber of Commerce against the Govt
of the Philippines acting through the DOTC and MIAA and alleged that Philippine courts are without
jurisdiction to review its case against the government and that the submission of the case to the SC is a
violation of the rule on hierarchy of courts as trial courts have concurrent jurisdiction with the SC with
respect to a special civil action for prohibition, thus, resort must first be had before the trial courts.

ISSUE: Whether the arbitration proceedings availed of by PIATCO deprived the SC of its jurisdiction over
the case?

RULING: No. After a careful examination of the facts of the case, the controversy involves significant legal
questions which the SC cannot just ignore. The rule on the hierarchy of courts will also not prevent the SC
from assuming jurisdiction as the rule may be relaxed when the redress sought cannot be obtained in the
appropriate courts and where exceptional and compelling reasons justify the availment of the remedy.

In the present case, It is easy to discern that exceptional circumstances exist in the cases at bar that call
for the relaxation of the rule. Both petitioners and respondents agree that these cases are of
transcendental importance as they involve the construction and operation of the countrys premier
international airport. Moreover, the crucial issues submitted for resolution are of first impression and they
entail the proper legal interpretation of key provisions of the Constitution, the BOT Law and its
Implementing Rules and Regulations. Thus, considering the nature of the controversy before the Court,
procedural bars may be lowered to give way for the speedy disposition of the instant cases.

It is also established that petitioners in the present case who have presented legitimate interests in the
resolution of the controversy are not parties to the PIATCO Contracts. Accordingly, they cannot be bound
by the arbitration clause and hence, cannot be compelled to submit to arbitration proceedings. A speedy
and decisive resolution of all the critical issues in the present controversy, including those raised by
petitioners, cannot be made before an arbitral tribunal. The object of arbitration is precisely to allow an
expeditious determination of a dispute. This objective would not be met if this Court were to allow the
parties to settle the cases by arbitration as there are certain issues involving non-parties to the PIATCO
Contracts which the arbitral tribunal will not be equipped to resolve.

LIGA NG MGA BARANGAY NATIONAL VS. ATIENZA, JR.


420 SCRA 562

Facts: Liga is the national organization of all the barangays in the Philippines, which pursuant to Section
492 of RA No. 7160 (LGC), constitutes the duly elected presidents of highly-urbanized cities, provincial
chapters, the metropolitan Manila Chapter, and metropolitan political subdivision chapters.

Section 493 of that law provides that the liga at the municipal, city, provincial, metropolitan political
subdivision, and national levels directly elect a president, a vice-president, and 5 members of the board of
directors. All other matters not provided for in the law affecting the internal organization of the leagues of
LGUs shall be governed by their respective constitution and by-laws, which must always conform to the

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provisions of the Constitution and existing laws. Liga adopted and ratified its own Constitution and By-
laws to govern its internal organization. Liga adopted and ratified its own Election Code. Liga came out
with its Calendar of Activities and Guidelines in the Implementation of the Liga Election Code of 2002,
setting the synchronized elections for highly urbanized city chapters, such as the Liga Chapter of Manila,
together with independent component city, provincial, and metropolitan chapters.

Respondent City Council of Manila enacted Ordinance No. 8039, Series of 2002, providing for the
election of representatives of the District Chapters in the City Chapter of Manila and setting the elections
for both chapters 30 days after the barangay elections. Liga sent respondent Mayor of Manila a letter
requesting him that said ordinance be vetoed considering that it encroached upon, or even assumed, the
functions of the Liga through legislation, a function which was clearly beyond the ambit of the powers of
the City Council. Mayor signed and approved the city ordinance.

Issue: Whether or not the Liga properly filed the case directly with the Supreme Court.

Held: No. Even granting arguendo that the present petition is ripe for the extraordinary writ of certiorari,
there is here a clear disregard of the hierarchy of courts. No special and important reason or exceptional
and compelling circumstance has been adduced by the petitioner or the intervenor why direct recourse to
this Court should be allowed.

This Courts original jurisdiction to issue a writ of certiorari (as well as of prohibition, mandamus, quo
warranto, habeas corpus and injunction) is not exclusive, but is concurrent with the RTC and CA in certain
cases.

SC will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate
courts, and exceptional and compelling circumstances justify the availment of the extraordinary remedy of
writ of certiorari, calling for the exercise of its primary jurisdiction. Petitioners reliance on Pimentel v.
Aguirre is misplaced because the non-observance of the hierarchy-of-courts rule wa

MANILA BANKERS LIFE INSURANCE VS. NG KOK WEI


418 SCRA 454

TOPIC: Jurisdiction: Exception to the general rule that jurisdiction is not conferred by consent, silence or
acquiesce estoppel by laches

FACTS: Eddy Ng Kok Wei, respondent, is a Singaporean businessman, purchased a condominium unit at
Valle Verde Terraces. Petitioner, through its President, Mr. Antonio Puyat, executed a Contract to Sell in
favor of respondent which states that the unit shall be substantially completed and delivered to the
respondent within 15 months from Feb. 8, 19989 or on May 8, 1990, and that should there be no
substantial completion and failure to deliver the unit on the date specified, a penalty of 1% of the total
amount paid by respondent shall be charged against petitioner.

Upon his third return to the Phil. and the notices of delivery being sent to him despite the uninhabitable
condition of the unit, he was constrained to demand payment in a letter dated Nov. 21, 1990 for the
damages he sustained but the Corp. ignored his demand prompting him to file with the RTC Makati a
complaint for specific performance and damages.

The RTC found the Corp. liable for the contractual penalty plus moral and exemplary damages. The CA
affirmed the RTC decision.

ISSUE/S: WON the RTC has jurisdiction over the case.

RULING:

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NO, it is the HLURB which has the exclusive jurisdiction to hear and decide cases involving specific
performance of contractual and statutory obligations filed by buyers of condominium units against the
owner, developer, dealer, broker or salesman (Section 1 (c) of PD No. 1344).

While it may be true that the trial court is without jurisdiction over the case, petitioners active participation
in the proceedings estopped it from assailing such lack of it. We have held that it is an undesirable
practice of a party participating in the proceedings and submitting its case for decision and then accepting
the judgment, only if favorable, and attacking it for lack of jurisdiction, when adverse.

OFFICE OF THE COURT ADMINISTRATOR VS. SARDILLO


401 SCRA 583

TOPIC: Jurisdiction

FACTS: Judge Sardido decided a case involving Falsification of Documents. Since one of the defendants
in a case is an RTC judge, he removed the name of the RTC judge from the roster of the defendants.
Judge Sardido's basis for removing the name of the RTC judge is Supreme Court Circular No. 3-89. The
Circular says that "the IBP shall forward to the Supreme Court for appropriate action, all cases involving
judges of lower courts and justices xxx"

In the case, Judge Sardido referred the criminal aspect together with the administrative aspect to the SC.

ISSUE: whether the criminal aspect of the case is cognizable by the SC.

RULING: No. Only the administrative aspect of the case is what must be forwarded to the Supreme
Court. The trial courts retain jurisdiction to try the criminal aspect of a case involving judges. SC Circular
3-89 refers to administrative cases not to criminal cases.

KATON VS. PALANCA


437 SCRA 565

TOPIC: DISMISSAL; MOTU PROPRIO; RESIDUAL JURISDICTION; RESIDUAL PREROGATIVE

FACTS: On August 2, 1963, herein petitioner George Katon filed a request with the District Office of the
Bureau of Forestry in Puerto Princesa, Palawan, for the re-classification of a piece of real property known
as Sombrero Island, located in Tagpait, Aborlan, Palawan for the purpose of eventual conversion or
reclassification from forest to agricultural land, and thereafter for Katon to apply for homestead patent.
Then, in 1965, the Director of Forestry informed the Director of Lands, that since the subject land
was no longer needed for forest purposes, the same is therefore certified and released as agricultural
land for disposition under the Public Land Act.
However, there were also several favorable endorsements that were made to survey the island
under the request of herein respondents. Then, the records show that, on November 8, 1996, one of the
respondents Juan Fresnillo filed a homestead patent application for the portion of the island consisiting of
8.5 hectares and the respondent Jesus Gapilango filed a homestead application on June 8, 1972. The
respondent Manuel Palanca, Jr. was issued a Homestead Patent No. 14527 and OCT No. G-7098 on
March 3, 1875 with an area of 6.84 hectares of Sombrero Island.
Petitioner assails the validity of the homestead patents and original certificates of title covering
certain portions of Sombrero Island issued in favor of respondents on the ground that the same were
obtained through fraud. Petitioner prays for the reconveyance of the whole island in his favor.
The petitioner seeks to nullify the homestead patents and original certificates of title issued in favor of the
respondents covering certain portions of the Sombrero Island as well as the reconveyance of the whole
island in his favor. The petitioner claims that he has the exclusive right to file an application for homestead
patent over the whole island since it was he who requested for its conversion from forest land to

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agricultural land. Respondents aver that they are all bona fide and lawful possessors of their respective
portions and have declared said portions for taxation purposes and that they have been faithfully paying
taxes thereon for twenty years.
Respondents contend that the petitioner has no legal capacity to sue insofar as the island is
concerned because an action for reconveyance can only be brought by the owner and not a mere
homestead applicant and that petitioner is guilty of estoppel by laches for his failure to assert his right
over the land for an unreasonable and unexplained period of time. Respondents filed their Answer with
Special and/or Affirmative Defenses and Counterclaim in due time. On June 30, 1999, they also filed a
Motion to Dismiss on the ground of the alleged defiance by petitioner of the trial courts Order to amend
his Complaint so he could thus effect a substitution by the legal heirs of the deceased, Respondent
Gapilango.The Motion to Dismiss was granted by the RTC in its Order dated July 29, 1999. Petitioners
Motion for Reconsideration of the July 29, 1999 Order was denied by the trial court in its Resolution dated
December 17, 1999, for being a third and prohibited motion. In his Petition for Certiorari before the CA,
petitioner charged the trial court with grave abuse of discretion on the ground that the denied Motion was
his first and only Motion for Reconsideration of the aforesaid Order.

Court of Appeals dismissed the complaint because of prescription invoking residual prerogative.

ISSUE/S: Whether or not the Court of Appeals correct in invoking its alleged residual prerogative under
Section 1, Rule 9 of the 1997 Rules of Civil Procedure in resolving the Petition on an issue not raised in
the Petition?"

RULING: Yes. Under Section 1 of Rule 9 of the Rules of Court, defenses and objections not pleaded
either in a motion to dismiss or in the answer are deemed waived, except when (1) lack of jurisdiction
over the subject matter, (2) litis pendentia, (3) res judicata and (4) prescription are evident from the
pleadings or the evidence on record.

In the four excepted instances, the court shall motu proprio dismiss the claim or action. In Gumabon v.
Larin11 we explained thus:

"x x x [T]he motu proprio dismissal of a case was traditionally limited to instances when the court clearly
had no jurisdiction over the subject matter and when the plaintiff did not appear during trial, failed to
prosecute his action for an unreasonable length of time or neglected to comply with the rules or with any
order of the court. Outside of these instances, any motu proprio dismissal would amount to a violation of
the right of the plaintiff to be heard. Except for qualifying and expanding Section 2, Rule 9, and Section 3,
Rule 17, of the Revised Rules of Court, the amendatory 1997 Rules of Civil Procedure brought about no
radical change. Under the new rules, a court may motu proprio dismiss a claim when it appears from the
pleadings or evidence on record that it has no jurisdiction over the subject matter; when there is another
cause of action pending between the same parties for the same cause, or where the action is barred by a
prior judgment or by statute of limitations. x x x."12 (Italics supplied)

On the other hand, "residual jurisdiction" is embodied in Section 9 of Rule 41 of the Rules of Court, as
follows:

"SEC. 9. Perfection of appeal; effect thereof. A partys appeal by notice of appeal is deemed perfected
as to him upon the filing of the notice of appeal in due time.

"A partys appeal by record on appeal is deemed perfected as to him with respect to the subject matter
thereof upon the approval of the record on appeal filed in due time.

"In appeals by notice of appeal, the court loses jurisdiction over the case upon the perfection of the
appeals filed in due time and the expiration of the time to appeal of the other parties.

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"In appeals by record on appeal, the court loses jurisdiction only over the subject matter thereof upon the
approval of the records on appeal filed in due time and the expiration of the time to appeal of the other
parties.

"In either case, prior to the transmittal of the original record or the record on appeal, the court may issue
orders for the protection and preservation of the rights of the parties which do not involve any matter
litigated by the appeal, approve compromises, permit appeals of indigent litigants, order execution
pending appeal in accordance with Section 2 of Rule 39, and allow withdrawal of the appeal." (Italics
supplied) The "residual jurisdiction" of trial courts is available at a stage in which the court is normally
deemed to have lost jurisdiction over the case or the subject matter involved in the appeal. This stage is
reached upon the perfection of the appeals by the parties or upon the approval of the records on appeal,
but prior to the transmittal of the original records or the records on appeal. In either instance, the trial
court still retains its so-called residual jurisdiction to issue protective orders, approve compromises, permit
appeals of indigent litigants, order execution pending appeal, and allow the withdrawal of the appeal.

The CAs motu proprio dismissal of petitioners Complaint could not have been based, therefore, on
residual jurisdiction under Rule 41. Undeniably, such order of dismissal was not one for the protection and
preservation of the rights of the parties, pending the disposition of the case on appeal. What the CA
referred to as residual prerogatives were the general residual powers of the courts to dismiss an action
motu proprio upon the grounds mentioned in Section 1 of Rule 9 of the Rules of Court and under authority
of Section 2 of Rule 1 of the same rules.

To be sure, the CA had the excepted instances in mind when it dismissed the Complaint motu proprio "on
more fundamental grounds directly bearing on the lower courts lack of jurisdiction" and for prescription of
the action. Indeed, when a court has no jurisdiction over the subject matter, the only power it has is to
dismiss the action.

FIGUEROA VS. PEOPLE


558 SCRA 63

TOPIC : JURSDICTION / ESTOPPEL BY LACHES

FACTS: Petitioner was charged with the crime of reckless imprudence resulting in homicide. The RTC
found him guilty. In his appeal before the CA, the petitioner, for the first time, questioned RTCs
jurisdiction on the case .The CA in affirming the decision of the RTC, ruled that the principle of estoppel
by laches has already precluded the petitioner from questioning the jurisdiction of the RTCthe trial went
on for 4 years with the petitioner actively participating therein and without him ever raising the
jurisdictional infirmity. The petitioner, for his part, counters that the lack of jurisdiction of a court over the
subject matter may be raised at any time even for the first time on appeal. As undue delay is further
absent herein, the principle of laches will not be applicable.Hence, this petition.

ISSUE: WON petitioners failure to raise the issue of jurisdiction during the trial of this case, constitute
laches in relation to the doctrine laid down in Tijam v. Sibonghanoy, notwithstanding the fact that said
issue was immediately raised in petitioners appeal to the CA.

RULING: No. Citing the ruling in Calimlim vs. Ramirez, the Court held that as a general rule, the issue of
jurisdiction may be raised at any stage of the proceedings, even on appeal, and is not lost by waiver or by
estoppel.

Estoppel by laches may be invoked to bar the issue of lack of jurisdiction only in cases in which the
factual milieu is analogous to that of Tijam v. Sibonghanoy.Laches should be clearly present for the
Sibonghanoy doctrine to be applicable, that is, lack of jurisdiction must have been raised so belatedly as

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to warrant the presumption that the party entitled to assert it had abandoned or declined to assert it.In
Sibonghanoy, the party invoking lack of jurisdiction did so only after fifteen years and at a stage when the
proceedings had already been elevated to the CA. Sibonghanoy is an exceptional case because of the
presence of laches. In the case at bar, the factual settings attendant in Sibonghanoy are not present.
Petitioner Atty. Regalado, after the receipt of the Court of Appeals resolution finding her guilty of
contempt, promptly filed a Motion for Reconsideration assailing the said courts jurisdiction based on
procedural infirmity in initiating the action. Her compliance with the appellate courts directive to show
cause why she should not be cited for contempt and filing a single piece of pleading to that effect could
not be considered as an active participation in the judicial proceedings so as to take the case within the
milieu of Sibonghanoy. Rather, it is the natural fear to disobey the mandate of the court that could lead to
dire consequences that impelled her to comply.

The petitioner is in no way estopped by laches in assailing the jurisdiction of the RTC, consideringthat he
raised the lack thereof in his appeal before the appellate court. At that time, no considerable period had
yet elapsed for laches to attach.

Petition for review on certiorari is granted. Criminal case is dismissed.

HANNAH SERANA VS. SANDIGANBAYAN


653 SCRA (7/6/11)
TOPIC: Jurisdiction of Sandiganbayan

FACTS: Serana was a senior student of UP-Cebu who was also appointed by Pres. Estrada as student
regent of UP to serve a one-year term from Jan.1, 2000 to Dec. 31, 2000. On Sept. 2000, petitioner
together with her siblings and relatives, registered with the SEC the Office of the Student Regent
Foundation, Inc (OSFRI). On of the projects of the OSFRI was the renovation of Vinzons Hall in UP
Diliman, and Pres. Estrada gave P15M as financial assistance for the said project. The source of funds,
according to the information, was the Office of the President.

However, the renovation failed to materialize. The succeeding student regent and system-wide alliances
of students conseguently filed a complaint for Malversation of Public Funds and Property with the
Ombudsman. After due investigation, the Ombudsman instituted a criminal case against Serana and her
brother, charging them of Estafa.

Serana moved to quash the Information, contending that the Sandiganbayan does not have jurisdiction
over the offense charged nor over her person in her capacity as UP student regent. She contends that
Estafa falls under Crimes Against Property and not on the chapter on Crimes Committed by Public
Officers, only over which, she argues, the Sandiganbayan has jurisdiction. Furthermore, she argues that it
was not the governement that was duped, but Pres. Estrada, because the money came from the Office of
the President and not from government funds. As to jurisdiction over her person, she contends that as a
UP student regent, she is not a public officer since she merely represents her peers, in contrast to the
other regents who held their positions in an ex officio capacity.

The Sandiganbayan denied her motion for lack of merit.

ISSUE/S: WON Sandiganbayan has jurisdiction over the offense charged and over Serana

RULING: YES. Jurisdiction of Sandiganbayan; Crime of Estafa. Plainly, estafa is one of those felonies
within the jurisdiction of the Sandiganbayan, subject to the twin requirements that: 1) the offense is
committed by public officials and employees mentioned in Section 4(A) of PD No. 1606, as amended, and
that; 2) The offense is committed in relation to their office.

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It is well-established that compensation is not an essential element of public office. At most, it is merely
incidental to the public office. Delegation of sovereign functions of the government, to be exercised by him
for the benefit of the public makes one a public officer.

A UP Student Regent is a Public Officer. A public office is the right, authority, and duty created and
conferred by law, by which for a given period, either fixed or enduring at the pleasure of the power, an
individual is interested with some portion of sovereign functions of the government, to be exercised by
him for the benefit of the public.

Jurisdiction of the Sandiganbayan covers Board of Regents. The Sandiganbayan, also has jurisdiction
over the other officers enumerated in PD No. 1606. In Geduspan v. People, the SC held that while the first
part of Sec. 4(A) covers only officials with Salary grade 27 and higher but who are by express provisions
of law placed under the jurisdiction of the Sandiganbayan as she is placed there by express provisions of
law. Sec. 4(A)(1)(g) of PD No. 1606 explicitly vested the Sandiganbayan with jurisdiction over Presidents,
directors and trustees, or manager of government-owned or controlled corporations, state universities, or
educational foundations. Petitioner falls under this category. As the Sandiganbayan pointed out, the Board
of Regents performs functions similar to those of a board of trustee of a non-stock corporation. By
express mandate of law, petitioner is, indeed, a public officer as contemplated by PD No. 1606.

PAT-OG, SR. VS. CIVIL SERVICE COMMISSION


765 SCRA JUNE 2013

FACTS: Robert Bang-on (Bang-on), then a 14-year old second year high school student of the Antadao
National High School in Sagada, Mountain Province, filed an affidavit-complaint against Pat-og, a third
year high school teacher of the same school, before the Civil Service Commission-Cordillera
Administrative Region (CSC-CAR) for misconduct and a criminal case against Pat-og for the crime of
Less Serious Physical Injury with the Regional Trial Court (RTC) of Bontoc, Mountain Province. Ruling of
the CSC-CAR: In its Decision, dated September 19, 2006, the CSC-CAR found Pat-og guilty of Simple
Misconduct. On December 11, 2006, the motion for reconsideration filed by Pat-og was denied for lack of
merit.

The Ruling of the CSC: In its Resolution, dated April 11, 2007, the CSC dismissed Pat-ogs appeal and
affirmed with modification the decision of the CSC-CAR and adjudged Pat-og guilty of grave misconduct.
Pat-og filed a motion for reconsideration, questioning for the first time the jurisdiction of CSC over the
case. He contended that administrative charges against a public school teacher should have been initially
heard by a committee to be constituted pursuant to the Magna Carta for Public School Teachers. CA
affirmed the resolutions of the CSC. It agreed that Pat-og was estopped from questioning the jurisdiction
of the CSC as the records clearly showed that he actively participated in the proceedings.
CA denied the motion for reconsideration filed by Pat-og. Hence, the present petition with the following

ISSUE: WON CSC has jurisdiction over the administrative case filed against Pat-og?

HELD: In Puse v. Santos-Puse, it was held that the CSC, the Department of Education (DepEd) and the
Board of Professional Teachers-Professional Regulatory Commission (PRC) have concurrent jurisdiction
over administrative cases against public school teachers. Under Article IX-B of the 1987 Constitution, the
CSC is the body charged with the establishment and administration of a career civil service which
embraces all branches and agencies of the government. Executive Order (E.O.) No. 292 (the
Administrative Code of 1987)12 and Presidential Decree (P.D.) No. 807 (the Civil Service Decree of the
Philippines) expressly provide that the CSC has the power to hear and decide administrative disciplinary
cases instituted with it or brought to it on appeal.

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Thus, the CSC, as the central personnel agency of the government, has the inherent power to supervise
and discipline all members of the civil service, including public school teachers. Concurrent jurisdiction is
that which is possessed over the same parties or subject matter at the same time by two or more
separate tribunals. When the law bestows upon a government body the jurisdiction to hear and decide
cases involving specific matters, it is to be presumed that such jurisdiction is exclusive unless it be proved
that another body is likewise vested with the same jurisdiction, in which case, both bodies have
concurrent jurisdiction over the matter. Where concurrent jurisdiction exists in several tribunals, the body
that first takes cognizance of the complaint shall exercise jurisdiction to the exclusion of the others.

BOSTON EQUITY RESOURCES INC. VS. COURT OF APPEALS AND LOLITA G. TOLEDO
G.R. No. 173946, June 19, 2013

TOPIC: JURISDICTION OVER THE PERSONS OF THE PARTIES

FACTS: Petitioner filed a complaint for sum of money with a prayer for issuance of writ of preliminary
attachment against Sps. Manuel and Lolita Toledo. Lolita in her answer alleged that her husband Manuel
is already dead. During the trial, respondent Lolita moved to dismiss the complaint on the following
grounds:

1. Complaint failed to plead an indispensable party;


2. Trial court did not acquire jurisdiction over Manuel pursuant to Section 5, Rule 86 of BP 129 as
amended by RA 7691;
3. Trial court erred in ordering substitution of deceased Manuel by his heirs;
4. Trial court must also dismiss case against Lolita in accordance to Section 6, Rule 86;

RTC denied the motion for having been filed out of time (after 6 years). Respondent appealed to the CA
which granted the petition.

ISSUES:

1. Whether or not the RTC acquired jurisdiction over the person of Manuel;
2. Whether or not respondent may still assail the question of jurisdiction of Manuel on her
motion to dismiss?
RULING:

1. NO, jurisdiction over the person of Manuel was never acquired by the trial court. A defendant
is informed of a case against him when he receives summons. Summons is a writ by
which the defendant is notified of the action brought against him. Service of such writ
is the means by which the court acquires jurisdiction over his person. In the case at
bar, the trial court did not acquire jurisdiction over the person of Manuel since there was no
valid service of summons upon him, precisely because he was already dead even before the
complaint against him and his wife was filed in the trial court.
2. NO. Here, what respondent was questioning in her motion to dismiss before the trial court
was the courts jurisdiction over the person of the defendant Manuel. Thus, the principle of
estoppel by laches finds no application in his case. Instead the principles relating to
jurisdiction are pertinent therein.Since the defense of lack of jurisdiction over the person of a
party to a case is not one of those defenses which are not deemed waived under Section 1 of
Rule 9, such defense must be invoked when an answer or a motion to dismiss if filed in order
to prevent a waiver of the defense. If thee objection is not raised either in a motion to dismiss
or in the answer, the objection to the jurisdiction over the person of the plaintiff or the
defendant is deemed waived by virtue of the first sentence of the above quoted Section 1,
Rule 9 of the Rules of Court.
As a question of jurisdiction raised here is that over the person of Manuel, the same is
deemed waived if not raised in the answer or a motion to dismiss. In any case, respondent

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cannot claim the defense since lack of jurisdiction over the person, being subject to
waiver, is a personal defense which can only be asserted by the party who can thereby
waive it by silence.

PEOPLE VS. HENRY T. GO


MARCH 25, 2014

FACTS: A certain Ma. Cecilia L. Pesayco filed a complaint with the Office of the Ombudsman against
several individuals for alleged violation of R.A. 3019 (anti-graft).

Among those charged was herein Henry T. Go, who was then the Chairman and President of PIATCO, for
having supposedly conspired with then DOTC Secretary Arturo Enrile in entering into a contract which is
grossly and manifestly disadvantageous to the government. The Office of the Deputy Ombudsman for
Luzon found probable cause to indict, among others, herein Henry T. Go for violation of Section 3(g) of
R.A. 3019. While there was likewise a finding of probable cause against Secretary Enrile, he was no
longer indicted because he died prior to the issuance of the resolution finding probable cause. Thus an
information was filed against Henry before the Sandiganbayan. Sandiganbayan however ordered the
prosecutor to show cause why this case should not be dismissed for lack of jurisdiction over the person of
the accused considering that the accused is a private person and the public official Arturo Enrile, his
alleged co-conspirator, is already deceased, and not an accused in this case.

On the other hand, Henry filed a Motion to Quash the Information filed against him on the ground that the
operative facts adduced therein do not constitute an offense under Section 3(g) of R.A. 3019.

Citing the show cause order of the SB, also contended that, independently of the deceased Secretary
Enrile, the public officer with whom he was alleged to have conspired, Henry, who is not a public officer
nor was capacitated by any official authority as a government agent, may not be prosecuted for violation
of Section 3(g) of R.A. 3019. The prosecution however argued that the SB has exclusive jurisdiction over
Henrys case, even if he is a private person, because he was alleged to have conspired with a public
officer.SB granted Henrys motion to quash.

ISSUE: Whether Henry, a private person, may be indicted for conspiracy in violating Section 3(g) of R.A.
3019 even if the public officer, with whom he was alleged to have conspired, has died prior to the filing of
the Information.

HELD: Yes. It is true that by reason of Secretary Enrile's death, there is no longer any public officer with
whom respondent can be charged for violation of R.A. 3019. It does not mean, however, that the
allegation of conspiracy between them can no longer be proved or that their alleged conspiracy is already
expunged.

The only thing extinguished by the death of Secretary Enrile is his criminal liability. His death did not
extinguish the crime nor did it remove the basis of the charge of conspiracy between him and private
respondent. Stated differently, the death of Secretary Enrile does not mean that there was no public
officer who allegedly violated Section 3 (g) of R.A. 3019. In fact, the Office of the Deputy Ombudsman for
Luzon found probable cause to indict Secretary Enrile for infringement of Sections 3 (e) and (g) of R.A.
3019.14 Were it not for his death, he should have been charged.

The requirement before a private person may be indicted for violation of Section 3(g) of R.A. 3019, among
others, is that such private person must be alleged to have acted in conspiracy with a public officer. The
law, however, does not require that such person must, in all instances, be indicted together with the public
officer. If circumstances exist where the public officer may no longer be charged in court, as in the present
case where the public officer has already died, the private person may be indicted alone.

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CITY OF MANILA VS. JUDGE CUERDO


FEBRUARY 4, 2014

FACTS: The record shows that petitioner City of Manila, through its treasurer, petitioner Liberty Toledo,
assessed taxes for the taxable period from January to December 2002 against private respondents.
Because payment of the taxes assessed was a precondition for the issuance of their business permits,
private respondents were constrained to pay the P19,316,458.77 assessment under protest.

On January 24, 2004, private respondents filed [with the Regional Trial Court of Pasay City] the complaint
denominated as one for "Refund or Recovery of Illegally and/or Erroneously-Collected Local Business
Tax, Prohibition with Prayer to Issue TRO and Writ of Preliminary Injunction".

In its Order dated July 9, 2004, the RTC granted private respondents' application for a writ of preliminary
injunction. Petitioners filed a Motion for Reconsideration but the RTC denied it in its Order 5 dated October
15, 2004.

Petitioners then filed a special civil action for certiorari with the CA assailing the July 9, 2004 and October
15, 2004 Orders of the RTC.

In its Resolution promulgated on April 6, 2006, the CA dismissed petitioners' petition for certiorari holding
that it has no jurisdiction over the said petition. The CA ruled that since appellate jurisdiction over private
respondents' complaint for tax refund, which was filed with the RTC, is vested in the Court of Tax Appeals
(CTA), pursuant to its expanded jurisdiction under Republic Act No. 9282 (RA 9282), it follows that a
petition for certiorari seeking nullification of an interlocutory order issued in the said case should, likewise,
be filed with the CTA.

Petitioners filed a Motion for Reconsideration, 7 but the CA denied it in its Resolution dated November 29,
2006.

ISSUE: Whether or not the Honorable Court of Appeals gravely erred in dismissing the case for lack of
jurisdiction.

RULING: The CTA has jurisdiction over a special civil action for certiorari assailing an interlocutory order
issued by the RTC in a local tax case. In order for any appellate court to effectively exercise its appellate
jurisdiction, it must have the authority to issue, among others, a writ of certiorari. In transferring exclusive
jurisdiction over appealed tax cases to the CTA, it can reasonably be assumed that the law intended to
transfer also such power as is deemed necessary, if not indispensable, in aid of such appellate
jurisdiction. There is no perceivable reason why the transfer should only be considered as partial, not
total.

Consistent with the above pronouncement, the Court has held as early as the case of J.M. Tuason & Co.,
Inc. v. Jaramillo, et al. [118 Phil. 1022 (1963)] that if a case may be appealed to a particular court or
judicial tribunal or body, then said court or judicial tribunal or body has jurisdiction to issue the
extraordinary writ of certiorari, in aid of its appellate jurisdiction. This principle was affirmed in De Jesus v.
Court of Appeals (G.R. No. 101630, August 24, 1992) where the Court stated that a court may issue a
writ of certiorari in aid of its appellate jurisdiction if said court has jurisdiction to review, by appeal or writ of
error, the final orders or decisions of the lower court.

WHEREFORE, the petition is DENIED.

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CITY OF LAPU-LAPU VS. PEZA


NOVEMBER 26, 2014

TOPIC: Doctrine of exhaustion of administrative remedies; Kinds of Jurisdiction.

FACTS: President Ferdinand E. Marcos issued Presidential Decree No. 66 in 1972, declaring as
government policy the establishment of export processing zones in strategic locations in the Philippines.
Presidential Decree No. 66 aime to encourage and promote foreign commerce as a means of making the
Philippines a center of international trade, of strengthening our export trade and foreign exchange
position, of hastening industrialization,of reducing domestic unemployment, and of accelerating the
development of the country.

To carry out this policy, the Export Processing Zone Authority (EPZA) was created to operate, administer,
and manage the export processing zones established in the Port of Mariveles, Bataan and such other
export processing zones that may be created by virtue of the decree.

The decree declared the EPZA non-profit in character with all its revenues devoted to its development,
improvement, and maintenance. To maintain this non-profit character, the EPZA was declared exempt
from all taxes that may be due to the Republic of the Philippines, its provinces, cities, municipalities, and
other government agencies and instrumentalities.

Hence, on October 30, 1995, President Fidel V. Ramos issued Executive Order No. 282, directing the
PEZA to assume and exercise all of the EPZAs powers, functions, and responsibilities as provided in
Presidential Decree No. 66, as amended, insofar as they are not inconsistent with the powers, functions,
and responsibilities of the PEZA, as mandated under the Special Economic Zone Act of 1995. All of
EPZAs properties, equipment, and assets, among others, were ordered transferred to the PEZA.

Meanwhile, the City of Lapu-Lapu, through the Office of the Treasurer, demanded from the PEZA
32,912,350.08 in real property taxes for the period from 1992 to 1998 on the PEZAs properties located in
the Mactan Economic Zone.

The City pointed out that no provision in the Special Economic Zone Act of 1995 specifically exempted the
PEZA from payment of real property taxes, unlike Section 21 of Presidential Decree No. 66 that explicitly
provided for EPZAs exemption. Since no legal provision explicitly exempted the PEZA from payment of
real property taxes, the City argued that it can tax the PEZA.

The City made subsequent demands on the PEZA. In its last reminder dated May 13, 2002, the City
assessed the PEZA 86,843,503.48 as real property taxes for the period from 1992 to 2002.

On September 11, 2002, the PEZA filed a petition for declaratory Relief with the Regional Trial Court of
Pasay City, praying that the trial court declare it exempt from payment of real property taxes.

ISSUE/S: Whether or not The Regional Trial Court of Pasay has jurisdiction to hear, try, and decide the
PEZAs petition for declaratory relief against the City of Lapu-Lapu.

RULING: The Court ruled in the negative.

The court with jurisdiction over petitions for declaratory relief is the Regional Trial Court, the subject
matter of litigation in an action for declaratory relief being incapable of pecuniary estimation.

A special civil action for declaratory relief is filed for a judicial determination of any question of
construction or validity arising from, and for a declaration of rights and duties, under any of the following
subject matters: a deed, will, contract or other written instrument, statute, executive order or regulation,
ordinance, orany other governmental regulation. However, a declaratory judgment may issue only if there
has been "no breach of the documents in question." If the contract or statute subject matter of the action
has already been breached, the appropriate ordinary civil action must be filed. If adequate relief is

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available through another form of action or proceeding, the other action must be preferred over an action
for declaratory relief.

We rule that the PEZA erred in availing itself of a petition for declaratory relief against the City. The City
had already issued demand letters and real property tax assessment against the PEZA, in violation of the
PEZAs alleged tax-exempt status under its charter. The Special Economic Zone Act of 1995, the subject
matter of PEZAs petition for declaratory relief, had already been breached. The trial court, therefore, had
no jurisdiction over the petition for declaratory relief. There are several aspects of jurisdiction.

Jurisdiction over the subject matter is "the power to hear and determine cases of the general class to
which the proceedings in question belong." It is conferred by law, which may either be the Constitution or
a statute. Jurisdiction over the subject matter means "the nature of the cause of action and the relief
sought." Thus, the cause of action and character of the relief sought as alleged in the complaint are
examinedto determine whether a court had jurisdiction over the subject matter. Any decision rendered by
a court without jurisdiction over the subjectmatter of the action is void.

Another aspect of jurisdiction is jurisdiction over the person. It is "the power of a court to render a
personal judgment or to subject the parties in a particular action to the judgment and other rulings
rendered in the action." A court automatically acquires jurisdiction over the person of the plaintiff upon the
filing of the initiatory pleading. With respect to the defendant, voluntary appearance in court or a valid
service of summons vests the court with jurisdiction over the defendants person. Jurisdiction over the
person of the defendant is indispensable in actions in personamor those actions based on a partys
personal liability. The proceedings in an action in personamare void if the court had no jurisdiction over
the person of the defendant.

Jurisdiction over the thing under litigation is acquired either "by the seizure of the property under legal
process, whereby it is brought into actual custody of the law; or as a result of the institution of legal
proceedings, in which the power of the court is recognized and made effective." Jurisdiction over the res
is necessary in actions in rem or those actions "directed against the thing or property or status of a person
and seek judgments with respect thereto as against the whole world." The proceedings in an action in rem
are void if the court had no jurisdiction over the thing under litigation.

In the present case, the Regional Trial Court had no jurisdiction over the subject matter of the action,
specifically, over the remedy sought.

Where the law or contract has already been contravened prior to the filing of an action for declaratory
relief, the courts can no longer assume jurisdiction over the action. In other words, a court has no more
jurisdiction over an action for declaratory relief if its subject has already been infringed or transgressed
before the institution of the action.

The trial court should have dismissed the PEZAs petition for declaratory relief for lack of jurisdiction.

COMMISSIONER OF BIR VS. COURT OF TAX APPEALS


764 SCRA 212

FACTS: Private respondent CBK Power Company Limited is a special purpose entity engaged in all
aspects of (1) design, financing, construction, testing, commissioning, operation, maintenance,
management, and ownership of Kalayaan II pumped storage hydroelectric power plant, the new Caliraya
Spillway in Laguna; and (2) the rehabilitation, expansion, commissioning, operation, maintenance and
management of the Caliraya, Botocan, and Kalayaan I hydroelectric power plants and their related
facilities in Laguna.

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Whereas, Petitioner is the duly appointed Commissioner of Internal Revenue vested with authority to act
and has the power to decide, approve and grant refunds or tax credit of erroneously or illegally collected
internal revenue taxes as provided by law.

Private respondent filed with the CTA two (2) separate judicial claims and later on it was consolidated, for
the issuance of a tax credit certificate in the amount of(P17,784,968.91), and (P31,680,290.87),
respectively, from January to June 2009, representing unutilized input taxes on its local purchases and
importations of goods, local purchases of services, payment of services rendered by non-residents,
including unutilized amortized input taxes, all attributable to zero rated sales.

Petitioner representatives failed to appear during the pre-trial but filed its pre-trial briefs. Atty. Mauricio
was on leave for health reasons while Atty. Sandico, who was then assigned to handle the consolidated
cases, was confused in office procedure, he had to attend the hearing of another case in the CTA's First
Division also at 9:00 a.m., hence, he unintentionally missed the pre-trial conference of the consolidated
cases on the same scheduled dates, thus private respondent moved that petitioner be declared in default.

On January 6, 2012, petitioner filed a Motion to Lift Order of Default alleging that the failure to attend the
pre-trial conference on November 3, 2011 was due to confusion in office procedure in relation to the
consolidation of two (2) cases being handled by a different lawyer. CTA issued resolution denying the
motion to lift order of default, and Motion for Reconsideration. Hence, this petition.

ISSUE/S:

1 Whether CTA gravely abused its discretion when it declared petitioner in default when clearly
petitioners counsel has been actively defending the case?
2 Whether petitioner chose an erroneous remedy when it filed a petition for certiorari under Rule
65?

HELD:

1.Yes, in this case, the CTA gravely abused its discretion when it declared the petitioner in default
because there is no showing that petitioner intentionally disregarded the CTA's authority. Atty. Mauricio,
was not able to attend for health reasons; and Atty. Sandico to whom the consolidated cases were later
on assigned was not able to attend the pre-trial on time on December 1, 2011 as he was attending
another case in another division of the CTA. The SC find nothing to show that petitioner had acted with
the deliberate intention of delaying the proceedings as petitioner had timely filed its pre-trial brief for the
consolidated cases. Also, after petitioner's receipt of the default Order dated December 23, 2011,
petitioner, on January 6, 2012, immediately filed a Motion to lift the order of default, 20 days before the
scheduled ex-parte presentation of private respondent's evidence on January 26, 2012.1avvphi1

The SC said that it is within the CTA's sound judicial discretion to give party-litigants every opportunity to
properly present their conflicting claims on the merits of the controversy without resorting to
technicalities.

2.No, the petitioner chose the right remedy since the CTA Orders are merely interlocutory, no appeal can
be taken therefrom. Section 1, Rule 41 of the 1997 Rules of Civil Procedure, as amended, which applies
suppletorily to proceedings before the Court of Tax Appeals, provides:

Section 1. Subject of appeal. - An appeal may be taken from a judgment or final order that completely
disposes of the case, or of a particular matter therein when declared by these Rules to be appealable.

No appeal may be taken from: x x x x (c) An interlocutory order

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In all the above instances where the judgment or final order is not appealable, the aggrieved party may
file an appropriate special civil action under Rule 65. Hence, petitioner's filing of the instant petition for
certiorari assailing the interlocutory orders issued by the CTA is in conformity with the above-quoted
provision.

An interlocutory order as it did not finally dispose of the case on the merits but will proceed for the
reception of the former's evidence to determine its entitlement to its judicial claim for tax credit certificates.
Even the CTA's subsequent orders denying petitioner's motion to lift order of default and denying
reconsideration thereof are all interlocutory orders since they pertain to the order of default. The SC
REMANDED to the CTA Third Division to give petitioner the chance to present evidence.

LOMONDOT VS. BALINDONG


762 SCRA 494

FACTS: In 1991, Omaira and Lomondot filed with SDC Marawi City a complaint for recovery of
possession and damages with prayer for mandatory injunction and TRO against respondents
Pangandamun and Diaca, claiming they are the owners by succession of parcel of land on which
Pangandamun and Diaca illegally entered and encroached 100 sqm and 200 sqm respectively. The SDC
in 2005 rendered a decision declaring plaintiffs owner of the subject land and ordering defendants to
vacate portions illegally encroached. Respondents appealed with SC but the latter dismissed the petition.
The SDC Decision became final and executory on October 31, 2007 and an entry of judgment was
subsequently made. Petitioners filed a motion for issuance of a writ of execution with prayer for a writ of
demolition which the SDC granted. However, after hearing, the SDC issued a resolution that the motion
for issuance of a Writ of Demolition should be held in abeyance and provided that while the decision has
become final and executory and a Writ of Execution has been issued, there are instances when a Writ of
Execution cannot be enforced as when there is a supervening event that prevents the Sheriff to execute a
Writ of Execution. The fact that the defendants claimed they have not encroached as they have already
complied with the Writ of Execution and their buildings are not within the area claimed by the plaintiffs is,
according to SDC, a supervening event. After attempts for settlement failed, plaintiffs asked anew for a
writ of demolition. At this point in time, the court cannot issue a special order to destroy, demolish or
remove defendants' houses, considering their claim that they no longer encroach any portion of plaintiffs
land. Motion for issuance of a writ of demolition was denied. Petitioners filed with the CA-CDO petition for
certiorari assailing the Orders issued by the SDC. The CA dismissed the petition for lack of jurisdiction
saying that, under RA 9054, it is the Sharia Appellate Court (SAC) which shall exercise jurisdiction over
petition for certiorari; that, however, since SAC has not yet been organized, it cannot take cognizance of
the case as it emanates from the Sharia Courts, which is not among those courts, bodies or tribunals
enumerated under Chapter 1, Section 9 of Batas Pambansa Bilang 129, as amended, over which it can
exercise appellate jurisdiction. Under Republic Act No. 9054, the Shari'a Appellate Court shall exercise
appellate jurisdiction over petitions for certiorari of decisions of the Shari'a District Courts.

ISSUE:

1. Whether or not CA has jurisdiction over decisions of SDC.

2. Whether or not the fact that the defendants claimed they have not encroached as they have
already complied with the Writ of Execution and their buildings are not within the area claimed by
the plaintiffs is a supervening event that can hold the writ of execution in abeyance.

HELD:

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1. YES. In Tomawis v. Hon. Balindong, we stated that: x x x [t]he Sharia Appellate Court has yet to
be organized with the appointment of a Presiding Justice and two Associate Justices. Until such
time that the Sharia Appellate Court shall have been organized, however, appeals or petitions
from final orders or decisions of the SDC filed with the CA shall be referred to a Special Division
to be organized in any of the CA stations preferably composed of Muslim CA Justices. Notably,
Tomawis case was decided on March 5, 2010, while the CA decision was rendered on April 27,
2010. The CA's reason for dismissing the petition, i.e., the decision came from SDC which the CA
has no appellate jurisdiction is erroneous for failure to follow the Tomawis ruling.

2. NO. The SDC Decision dated January31, 2005 ordered respondents to vacate the portions or
areas they had illegally encroached had become final and executory after we affirmed the same
and an entry of judgment was made. Such decision can no longer be modified or amended. In
Dacanay v. Yrastorza, Sr., Once a judgment attains finality, it becomes immutable and
unalterable. This is the doctrine of finality of judgment. In Abrigo v. Flores, 33 we said: x x x a
supervening event is an exception to the execution as a matter of right of a final and immutable
judgment rule, only if it directly affects the matter already litigated and settled, or substantially
changes the rights or relations of the parties therein as to render the execution unjust, impossible
or inequitable. The party who alleges a supervening event to stay the execution should
necessarily establish the facts by competent evidence; otherwise, it would become all too easy to
frustrate the conclusive effects of a final and immutable judgment. In this case, the matter of
whether respondents' houses intruded petitioners' land is the issue in the recovery of possession
complaint filed by petitioners in the SDC which was already ruled upon, thus cannot be
considered a supervening event that would stay the execution of a final and immutable judgment.

II. RULES 1-5


ALDAY VS. FGU INSURANCE
350 SCRA 113

Topics: Jurisdiction, docket fees, permissive counterclaim, compulsory counterclaim

FACTS: Respondent FGU Insurance Corporation filed a complaint with the RTC of Makati alleging that
petitioner Evangeline K. Alday owed it P114,650.76, representing unliquidated cash advances, unremitted
costs of premiums and other charges incurred by petitioner in the course of her work as an insurance
agent for respondent. Respondent also prayed for exemplary damages, attorneys fees, and costs of suit.
Petitioner filed her answer and by way of counterclaim, asserted her right for the payment of
P104,893.45, representing direct commissions, profit commissions and contingent bonuses earned from 1
July 1986 to 7 December 1986, and for accumulated premium reserves amounting to P500,000.00.In
addition, petitioner prayed for attorneys fees, litigation expenses, moral damages and exemplary
damages for the allegedly unfounded action filed by respondent.

Respondent filed a Motion to Strike Out Answer With Compulsory Counterclaim And To Declare
Defendant In Default because petitioners answer was allegedly filed out of time. However, the trial court
denied the motion similarly rejected respondents motion for reconsideration. A few weeks later,
respondent filed a motion to dismiss petitioners counterclaim, contending that the trial court never
acquired jurisdiction over the same because of the non-payment of docket fees by petitioner. In response,
petitioner asked the trial court to declare her counterclaim as exempt from payment of docket fees since it
is compulsory and that respondent be declared in default for having failed to answer such counterclaim.

The trial court granted respondents motion to dismiss petitioners counterclaim and consequently, denied
petitioners motion. The court found petitioners counterclaim to be merely permissive in nature and held

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that petitioners failure to pay docket fees prevented the court from acquiring jurisdiction over the
same. The trial court similarly denied petitioners motion for reconsideration.

The Court of Appeals sustained the trial court, finding that petitioners own admissions, as contained in her
answer, show that her counterclaim is merely permissive.

ISSUES:

1. Is the counterclaim of petitioner permissive or compulsory?


2. Is the counterclaim of petitioner exempt from the payment of docket fees and therefore the court
acquired jurisdiction over the same?

RULING:

1. The counterclaim of petitioner is PERMISSIVE. In Valencia v. Court of Appeals, this Court capsulized the
criteria or tests that may be used in determining whether a counterclaim is compulsory or permissive,
summarized as follows:

1. Are the issues of fact and law raised by the claim and counterclaim largely the same?
2. Would res judicata bar a subsequent suit on defendants claim absent the compulsory
counterclaim rule?
3. Will substantially the same evidence support or refute plaintiffs claim as well as
defendants counterclaim?
4. Is there any logical relation between the claim and the counterclaim?

Another test, applied in the more recent case of Quintanilla v. Court of Appeals, is the compelling
test of compulsoriness which requires a logical relationship between the claim and counterclaim, that is,
where conducting separate trials of the respective claims of the parties would entail a substantial
duplication of effort and time by the parties and the court.

Tested against the abovementioned standards, petitioners counterclaim for commissions,


bonuses, and accumulated premium reserves is merely permissive. The evidence required to prove
petitioners claims differs from that needed to establish respondents demands for the recovery of cash
accountabilities from petitioner, such as cash advances and costs of premiums. The recovery of
respondents claims is not contingent or dependent upon establishing petitioners counterclaim, such that
conducting separate trials will not result in the substantial duplication of the time and effort of the court
and the parties. One would search the records in vain for a logical connection between the parties
claims. This conclusion is further reinforced by petitioners own admissions since she declared in her
answer that respondents cause of action, unlike her own, was not based upon the Special Agents
Contract. However, petitioners claims for damages, allegedly suffered as a result of the filing by
respondent of its complaint, are compulsory.

2. NO. The counterclaim being permissive, in order for the trial court to acquire jurisdiction over the same,
petitioner is bound to pay the prescribed docket fees. 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. 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 allow payment of said fee within a
reasonable time but also in no case beyond its applicable prescriptive or reglementary period.

Meanwhile, the compulsory counterclaim of petitioner for damages based on the filing by
respondent of an allegedly unfounded and malicious suit need not be answered since it is inseparable

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from the claims of respondent. If respondent were to answer the compulsory counterclaim of petitioner, it
would merely result in the former pleading the same facts raised in its complaint.

KOREA TECHNOLOGIES CO., LTD. VS. HON. ALBERT A. LERMA, ET AL. ,


G.R. NO. 143581. JANUARY 7, 2008

TOPIC: Requirement of docket fees and certificate of non-forum shopping in respondents Answer with
counterclaim.

FACTS: Petitioner KOGIES and respondent PGSMC executed a Contract whereby KOGIES would set up
an LPG Cylinder Manufacturing Plant for respondent. Respondent unilaterally cancelled the contract on
the ground that petitioner had altered the quantity and lowered the quality of the machineries and
equipment it delivered.

Petitioner opposed informing the latter that PGSMC could not unilaterally rescind their contract nor
dismantle and transfer the machineries and equipment on mere imagined violations by petitioner.
Petitioner then filed a Complaint for Specific Performance against respondent before the RTC.
Respondent filed its Answer with Compulsory Counterclaim asserting that it had the full right to dismantle
and transfer the machineries and equipment because it had paid for them in full as stipulated in the
contract. KOGIES filed a motion to dismiss respondents counterclaims arguing that when PGSMC filed
the counterclaims, it should have paid docket fees and filed a certificate of non-forum shopping, and that
its failure to do so was a fatal defect. The RTC dismissed the petitioners motion to dismiss respondents
counterclaims as these counterclaims fell within the requisites of compulsory counterclaims.

ISSUE/S: WON payment of docket fees and certificate of non-forum shopping were required in the
respondents Answer with counterclaim?

RULING: NO. The counterclaims of PGSMC were incorporated in its Answer with Compulsory
Counterclaim in accordance with Section 8 of Rule 11, 1997 Revised Rules of Civil Procedure, the rule
that was effective at the time the Answer with Counterclaim was filed. Sec. 8 on existing counterclaim or
cross-claim states, A compulsory counterclaim or a cross-claim that a defending party has at the time he
files his answer shall be contained therein. As to the failure to submit a certificate of forum shopping,
PGSMCs Answer is not an initiatory pleading which requires a certification against forum shopping under
Sec. 524 of Rule 7, 1997 Revised Rules of Civil Procedure. It is a responsive pleading, hence, the courts
a quo did not commit reversible error in denying KOGIES motion to dismiss PGSMCs compulsory
counterclaims. At the time PGSMC filed its Answer incorporating its counterclaims against KOGIES, it
was not liable to pay filing fees for said counterclaims being compulsory in nature. We stress, however,
that effective August 16, 2004 under Sec. 7, Rule 141, as amended by A.M. No. 04-2-04-SC, docket fees
are now required to be paid in compulsory counterclaim or cross-claims.

MERCADO VS. CA
569 SCRA

TOPIC: Jurisdiction, Compulsory and Permissive Counterclaim

FACTS: Leonides Mercado had been distributing respondent San Miguel Corporations (SMCs) beer
products in Manila. SMC extended to him a P7.5 million credit line allowing him to withdraw goods on
credit.

Mercado failed to pay for the items he withdrew on credit. Citing the continuing hold-out agreement (which
allows SMC to encash China Banking Corporation (CBC) certificates of deposit assigned by Mercado), it
asked CBC to release the proceeds of the assigned certificates of deposit.

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Mercado filed an action to annul the continuing hold-out agreement and deed of assignment in the
Regional Trial Court (RTC) of Manila.

SMC filed its answer with counterclaim against Mercado. SMC sought payment of the lees products he
withdrew (or purchased on credit) worth P7,468,153.75.

During trial, Mercado acknowledged the accuracy of SMCs computation of his outstanding liability. Thus,
the RTC dismissed the complaint and ordered Mercado and Eastern Assurance and Surety Corporation
(EASCO) (to the extent of P2.6 million or the value of its bonds) to jointly and severally pay SMC the
amount of P7,468,153.75.The CA affirmed the RTC decision in toto.

Mercado passed away and was substituted by his heirs who filed the petition asserting that the CA erred
in affirming the RTC decision in toto. The said decision (insofar as it ordered Mercado to pay SMC
P7,468,153.75) was void. SMCs counterclaim was permissive in nature. Inasmuch as SMC did not pay
docket fees, the RTC never acquired jurisdiction over the counterclaim.

ISSUE/S: Whether SMCs counterclaim was permissive in nature, whereby payment of docket fees is
necessary for the RTC to acquire jurisdiction.

RULING: No. A counterclaim (or a claim which a defending party may have against any party) may be
compulsory or permissive. A counterclaim that (1) arises out of (or is necessarily connected with) the
transaction or occurrence that is the subject matter of the opposing partys claim; (2) falls within the
jurisdiction of the court and (3) does not require for its adjudication the presence of third parties over
whom the court cannot acquire jurisdiction, is compulsory. Otherwise, a counterclaim is merely
permissive.

When Mercado sought to annul the continuing hold-out agreement and deed of assignment (which he
executed as security for his credit purchases), he in effect sought to be freed from them. While he
admitted having outstanding obligations, he nevertheless asserted that those were not covered by the
assailed accessory contracts. For its part, aside from invoking the validity of the said agreements, SMC
therefore sought to collect the payment for the value of goods Mercado purchased on credit. Thus,
Mercados complaint and SMCs counterclaim both touched the issues of whether the continuing hold-out
agreement and deed of assignment were valid and whether Mercado had outstanding liabilities to SMC.
The same evidence would essentially support or refute Mercados claim and SMCs counterclaim.

Based on the foregoing, had these issues been tried separately, the efforts of the RTC and the parties
would have had to be duplicated. Clearly, SMCs counterclaim, being logically related to Mercados claim,
was compulsory in nature. Consequently, the payment of docket fees was not necessary for the RTC to
acquire jurisdiction over the subject matter.

NAVARRO VS MBTC
429 SCRA 439

FACTS: On November 3, 1994, the private respondent MBTC filed with the RTC of Makati City a petition
for the judicial foreclosure of the real estate mortgage executed by the petitioners in its favor. The RTC
rendered judgment on January 16, 1998 favoring the plaintiff bank to foreclose the properties. The
petitioners received a copy of the Decision on February 10, 1998 and on February 18, 1998 filed a MR.
On March 25, 1998, the trial court issued an Order denying the said motion. The petitioners received their
copy of the order on April 7, 1998. On April 14, 1998, the last day of the reglementary period, the
petitioners filed with the RTC a Notice of Appeal from its January 16, 1998 Decision and March 25, 1998
Order. However, the petitioners failed to pay the requisite docket and other lawful fees. On June 2, 1998,
the RTC correspondingly issued the Writ of Execution prayed for by the respondent MBTC. The
petitioners contends that their secretary was sent to the court to pay fees but was refused by the

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attending clerk. However, the court said that payment of fees are not received by the courts but by the
office of the clerk of court.

The petitioner filed a petition for certiorari with the CA but the CA denied the same.

ISSUE: WON the appeal was perfected.

RULING: NO. In the present case, the petitioners failed to establish any sufficient and satisfactory reason
to warrant a relaxation of the mandatory rule on the payment of appellate docket and other lawful fees.
The

Explanation given by the petitioners counsel for the non-payment was that his secretary, who migrated to
another country, inadvertently failed to pay the docket and other fees when she filed the petitioners notice
of appeal with the court.

The said counsel came to know of the inadvertence only when he received a copy of the RTCs May 27,
1998 Order which denied due course to the appeal for failure to pay the required docket fees. The
explication deserves scant consideration. The SC have reviewed the records and find that the petitioners
failed to show how and when their counsels secretary left the country. Neither did the petitioners submit
any explanation why their counsel failed to ascertain immediately after April 14, 1998 if the requisite
appellate docket and other lawful fees had been paid by the said secretary before her departure. Thus,
putting the blame on the counsels secretary for her failure to perfect the petitioners appeal to the CA is
unjustified.

PROTON PILIPINAS V BANQUE NATIONALE DE PARIS


460 SCRA

TOPIC: Commencement of Action. Payment of the correct docket fees.

FACTS: Proton availed of the credit facilities of BNP and executed a corporate guarantee of the extent of
US$2 million to guarantee its obligation. Under their trust agreement, Proton would receive imported
motor vehicles and hold them in trust for BNP, to be applied to its obligations to it in case the vehicles are
not sold, Proton would return them to BNP with the documents of title.

Proton failed to deliver the proceeds and to return the unsold motor vehicles. Protons guarantors refused
to pay its obligation so BNP filed a complaint ordering them to pay the initial amount of US$2 million with
accrued interest and other related charges. RTC Makati Clerk of Court assessed the docket fees at
P352,000. The petitioners filed a motion to dismiss the complaint by BNP for failure to pay the correct
docket fees thus preventing the RTC from acquiring jurisdiction over the case. In addition, the petitioners
allege the prematurity of the complaint since BNP did not priorly send a demand letter.

The RTC denied the motion to dismiss and the subsequent MR. The CA denied the appeal by way of
certiorari stating that Section 7(a), Rule 141 of the Rules of Court excludes interest accruing from the
principal amount being claimed in the pleading in the computation of the prescribed filing fees. CA denied
their MR.

The petitioners argue that pursuant to Administrative Circular 11-94, interests claimed should be included
in the computation of the docket fees. Thus since BNP underpaid, RTC never acquired jurisdiction over
the case.

ISSUES:
1. Should the computation for payment of docket fees have included the interest claimed by the
complainant?
2. Did the trial court fail to acquire jurisdiction over the case for insufficient docket fees?

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RULING:

1. Yes. The clerk of court should thus have assessed the filing fee by taking into consideration "the total sum
claimed, inclusive of interest, damages of whatever kind, attorney's fees, litigation expenses, and costs,
or the stated value of the property in litigation. In fine, the docket fees paid by respondent were
insufficient.

2. No. When the complaint was filed in 1998, Rule 141 had been amended by Administrative Circular 11-94.
In Manchester Development Corp. vs. CA, this Court held that the court acquires jurisdiction over any
case only upon payment of the prescribed docket fees. However, that the ruling in Manchester was
clarified in Sun Insurance Office, Ltd vs. Asuncion when this Court held that in the former there was an
effort to defraud the government in avoiding to pay the correct docket fees, whereas in the latter the
plaintiff demonstrated his willingness to abide by paying the additional fees as required.

The ruling in Sun Insurance Office was echoed in the 2005 case of Heirs of Bertuldo Hinog v. Hon.
Achilles Melicor:

Plainly, while the payment of the prescribed docket fee is a jurisdictional requirement, even its
non-payment at the time of filing does not automatically cause the dismissal of the case, as long
as the fee is paid within the applicable prescriptive or reglementary period, more so when the
party involved demonstrates a willingness to abide by the rules prescribing such payment. Thus,
when insufficient filing fees were initially paid by the plaintiffs and there was no intention to
defraud the government, the Manchester rule does not apply.

Respondent merely relied on the assessment made by the Clerk of Court which turned out to be incorrect.
Respondent prayed for accrued interest subsequent to August 15, 1998 until finally fully paid. The
complaint having been filed on September 7, 1998, respondents claim includes the interest from August
16, 1998 until such date of filing. Respondent did not, however, pay the filing fee corresponding to its
claim for interest from August 16, 1998 until the filing of the complaint on September 7, 1998. As priorly
discussed, this is required under Rule 141, as amended by Administrative Circular 11-94, which was the
rule applicable at the time. Thus, as the complaint currently stands, respondent cannot claim the interest
from August 16, 1998 until September 7, 1998, unless respondent is allowed by motion to amend its
complaint within a reasonable time and specify the precise amount of interest petitioners owe from August
16, 1998 to September 7, 1998 and pay the corresponding docket fee.

RUBY SHELTER BUILDERS vs. HON. PABLO C. FORMARAN III


G.R. No. 175914 February 10, 2009

TOPIC: Payment of docket fees is not only mandatory, but also jurisdictional

FACTS: Ruby Shelter Builders filed a complaint with the RTC against Tan. It paid the sum of P13,644.25
for docket and other legal fees, as assessed by the Office of the Clerk of Court. The Clerk of Court initially
considered the case as an action incapable of pecuniary estimation and computed the docket and other
legal fees due thereon according to Section 7(b)(1), Rule 141 of the Rules of Court.

Tan filed an Omnibus Motion contending that the case involved real properties, the docket fees for which
should be computed in accordance with Section 7(a), not Section 7(b)(1), of Rule 141 of the Rules of
Court, as amended. Thus, since petitioner did not pay the appropriate docket fees, the RTC did not
acquire jurisdiction over the said case. Hence, respondent Tan asked the RTC to issue an order requiring
petitioner to pay the correct and accurate docket fees pursuant to Section 7(a), Rule 141;.

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ISSUE: Whether or not the RTC acquired jurisdiction over the case.

RULING: No.

In Manchester Development Corporation v. Court of Appeals, the Court explicitly pronounced that "[t]he
court acquires jurisdiction over any case only upon the payment of the prescribed docket fee." Hence, the
payment of docket fees is not only mandatory, but also jurisdictional.

In Sun Insurance Office, Ltd. (SIOL) v. Asuncion, the Court laid down guidelines for the implementation of
its previous pronouncement in Manchester under particular circumstances, to wit:

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.

In the Petition at bar, petitioner did not pay the correct amount of docket fees. Petitioner should pay
docket fees in accordance with Section 7(a), Rule 141 of the Rules of Court, as amended. Consistent with
the liberal tenor of Sun Insurance, the RTC, instead of dismissing outright petitioners Complaint, granted
petitioner time to pay the additional docket fees. Despite the seeming munificence of the RTC, petitioner
refused to pay the additional docket fees assessed against it, believing that it had already paid the correct
amount before, pursuant to Section 7(b)(1), Rule 141.

The docket fees under Section 7(a), Rule 141, in cases involving real property depend on the fair market
value of the same: the higher the value of the real property, the higher the docket fees due. In contrast,
Section 7(b)(1), Rule 141 imposes a fixed or flat rate of docket fees on actions incapable of pecuniary
estimation.

In order to resolve the issue of whether petitioner paid the correct amount of docket fees, it is necessary
to determine the true nature of its Complaint. The dictum adhered to in this jurisdiction is that the nature of
an action is determined by the allegations in the body of the pleading or Complaint itself, rather than by its
title or heading. Petitioner persistently avers that its Complaint is primarily for the annulment of the Deeds
of Absolute Sale. Based on the allegations and reliefs in the Complaint alone, one would get the
impression that the titles to the subject real properties still rest with petitioner; and that the interest of
respondents Tan and Obiedo in the same lies only in the Deeds of Absolute Sale sought to be annulled.
What petitioner failed to mention in its Complaint was that respondents Tan and Obiedo already had the
Memorandum of Agreement, which clearly provided for the execution of the Deeds of Absolute Sale,
registered on the TCTs over the five parcels of land, then still in the name of petitioner.

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Petitioner never expressed surprise when such facts and circumstances were established before the
RTC, nor moved to amend its Complaint accordingly. Even though the Memorandum of Agreement was
supposed to have long been registered on its TCTs over the five parcels of land, petitioner did not pray for
the removal of the same as a cloud on its title. In the same vein, although petitioner alleged that
respondents Tan and Obiedo forcibly took physical possession of the subject real properties, petitioner did
not seek the restoration of such possession to itself. And despite learning that respondents Tan and
Obiedo already secured TCTs over the subject properties in their names, petitioner did not ask for the
cancellation of said titles. The only logical and reasonable explanation is that petitioner is reluctant to
bring to the attention of the Court certain facts and circumstances, keeping its Complaint safely worded,
so as to institute only an action for annulment of Deeds of Absolute Sale. Petitioner deliberately avoided
raising issues on the title and possession of the real properties that may lead the Court to classify its case
as a real action. No matter how fastidiously petitioner attempts to conceal them, the allegations and reliefs
it sought in its Complaint appears to be ultimately a real action, involving as they do the recovery by
petitioner of its title to and possession of the five parcels of land from respondents Tan and Obiedo.

A real action is one in which the plaintiff seeks the recovery of real property; or, as indicated in what is
now Section 1, Rule 4 of the Rules of Court, a real action is an action affecting title to or recovery of
possession of real property.

Section 7, Rule 141 of the Rules of Court, prior to its amendment by A.M. No. 04-2-04-SC, had a specific
paragraph governing the assessment of the docket fees for real action, to wit:

In a real action, the assessed value of the property, or if there is none, the estimated value
thereof shall be alleged by the claimant and shall be the basis in computing the fees.

While it is true that petitioner does not directly seek the recovery of title or possession of the property in
question, his action for annulment of sale and his claim for damages are closely intertwined with the issue
of ownership of the building which, under the law, is considered immovable property, the recovery of
which is petitioner's primary objective. The prevalent doctrine is that an action for the annulment or
rescission of a sale of real property does not operate to efface the fundamental and prime objective and
nature of the case, which is to recover said real property. It is a real action.

A real action indisputably involves real property. The docket fees for a real action would still be
determined in accordance with the value of the real property involved therein; the only difference is in
what constitutes the acceptable value. In computing the docket fees for cases involving real properties,
the courts, instead of relying on the assessed or estimated value, would now be using the fair market
value of the real properties (as stated in the Tax Declaration or the Zonal Valuation of the Bureau of
Internal Revenue, whichever is higher) or, in the absence thereof, the stated value of the same.

WHEREFORE, premises considered, the instant Petition for Review is hereby DENIED. The Decision,
dated 22 November 2006, of the Court of Appeals in CA-G.R. SP No. 94800, which affirmed the Orders
dated 24 March 2006 and 29 March 2006 of the RTC, Branch 22, of Naga City, in Civil Case No. RTC-
2006-0030, ordering petitioner Ruby Shelter Builders and Realty Development Corporation to pay
additional docket/filing fees, computed based on Section 7(a), Rule 141 of the Rules of Court, as
amended, is hereby AFFIRMED. Costs against the petitioner.

ST. LOUIS UNIVERSITY INC. VS. EVANGELINE COBARRUBIAS


626 SCRA 649

TOPIC: DOCKET FEES; APPEALS; PERFECTION; NON-PAYMENT-EFFECTS

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FACTS: Cobarrubias is an associate professor of the petitioner and an active member of the union of
faculty and employees. The Collective Bargaining Agreements contained the following provision that for
teaching employees in college who fail the yearly evaluation, who are retained for three cumulative years
in five years, shall be on forced leave for one regular semester during which period all benefits due them
shall be suspended. Petitioner placed Cobarrubias on forced leave for failing to achieve the required
rating points (85, 77, and 72.9, below the required rating of 87).
To reverse the imposed forced leave, Cobarrubias sought recourse from the CBAs grievance
machinery but the parties failed to settle their dispute. Cobarruubias filed a case for illegal forced leave or
illegal suspension with DOLE but circulation and mediation again failed.
Cobarrubias argued that the CA already resolved the forced leave issue in a prior case between the
parties, CA-G.R. SP No. 90596,8 ruling that the forced leave for teachers who fail their evaluation for
three (3) times within a five-year period should be coterminous with the CBA in force during the same five-
year period. On the other hand, Petitioner argued that said CA decision is not yet final for there is still a
pending appeal.
The VA dismissed the complaint, then Cobarrubias filed with the CA a petition for review under Rule
43 of the Rules of Court, but failed to pay the required filing fees and to attach to the petition copies of the
material portions of the record. The CA responded by dismissing the petition for procedural lapses.
Nevertheless, Cobarrubias filed a motion for reconsiderationand attached copies of the material portions
of the record and the postal money orders.
She maintained that the ends of justice and fair play are better served if the case is decided on its
merits. The CA reinstated the petition.

ISSUE: Whether the CA is correct in reinstating the petition despite the failure of Cobarrubias to pay the
appeal docket fees on time.

HELD: Appeal is not a natural right but a mere statutory privilege, thus, appeal must be made strictly in
accordance with the provision set by law.25 Rule 43 of the Rules of Court provides that appeals from the
judgment of the VA shall be taken to the CA, by filing a petition for review within fifteen days from the
receipt of the notice of judgment.Upon the filing of the petition, the petitioner shall pay to the CA clerk of
court the docketing and other lawful fees; non-compliance with the procedural requirements shall be a
sufficient ground for the petitions dismissal. Thus, payment in full of docket fees within the prescribed
period is not only mandatory, but also jurisdictional. It is an essential requirement, without which, the
decision appealed from would become final and executory as if no appeal has been filed.
Procedural rules are not to be belittled or dismissed simply because their non-observance may have
prejudiced a party's substantive rights; like all rules, they are required to be followed. However, there are
recognized exceptions to their strict observance, such as:

(1) Most persuasive and weighty reasons;


(2) To relieve a litigant from an injustice not commensurate with his failure to comply with the
prescribed procedure;
(3) Good faith of the defaulting party by immediately paying within a reasonable time from the time of
the default;
(4) The existence of special or compelling circumstances;
(5) The merits of the case;
(6) A cause not entirely attributable to the fault or negligence of the party favored by the suspension
of the rules;
(7) A lack of any showing that the review sought is merely frivolous and dilatory;
(8) The other party will not be unjustly prejudiced thereby;
(9) Fraud, accident, mistake or excusable negligence without the appellant's fault;
(10)Peculiar, legal and equitable circumstances attendant to each case;
(11)In the name of substantial justice and fair play;
(12)Importance of the issues involved; and
(13)Exercise of sound discretion by the judge, guided by all the attendant circumstances.

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Thus, there should be an effort, on the part of the party invoking liberality, to advance a reasonable or
meritorious explanation for his/her failure to comply with the rules, in this case, no explanation has been
given.

GIPA VS. SOUTHERN LUZON INSTITUTE


G.R. NO. 177425

TOPIC: Concomitant to the liberal interpretation of the rules of procedure should be an effort on the part
of the party invoking liberality to adequately explain his failure to abide by the rules." Those who seek
exemption from the application of the rule have the burden of proving the existence of exceptionally
meritorious reasons warranting such departure.

Parties to a Civil Action; Rule 3, Sections 2 and 3.

FACTS: On February 26, 1996 respondent Southern Luzon Institute (SLI) filed a complaint for recovery of
ownership and possession with damages against petitioners Gipa and others defendants including a
certain Rosita Montalban (Rosita). During trial, defendant Rosita executed a Special Power of Attorney in
favor of her sister Daisy M. Placer (Placer) authorizing the latter to represent her in the case and to sign
any and all papers in relation thereto.

SLI alleged that it is the absolute owner of a parcel of land situated in Bulan, Sorsogon. However,
petitioners and co-defendants who had been informally occupying portion of the said property refused to
vacate premises despite demand. Petitioners and co-defendants asserted that they did not heed SLIs
demand to vacate as they believe that they have the right to stay on the said property relying on the fact
that they and their predecessors in interest occupied the property since the 1950s.

The RTC ruled in favor of SLI having proven its ownership of the property by preponderance of evidence.
The said court gave weight to the Miscellaneous Sales Application over the property which became the
basis of the issuance of title under its name and testimony of the draftsman of the National Housing
Authority. It rejected the claim of petitioners and co-defendants which only relied on documentary
evidence consisting mostly of tax declarations and other documents which are self-serving and could not
be conclusive evidence of ownership. Petitioners and co-defendants filed a notice of appeal before the
CA.

The CA dismissed the appeal in its resolution since the it was not shown that appellate court docket fees
and other lawful fees were paid. Petitioners and co-defendants promptly filed a motion for reconsideration
to which they attached a certification from the RTC that they paid the appeal fee in the amount of P3000.
The CA granted the motion and reinstated the appeal. Subsequently, the CA through a resolution further
required petitioners and co-defendants to remit within ten days from notice the amount of P30 for legal
research fund which was apparently was not included in the P3000 appeal fee previously paid by them.
Despite the lapse of nine (9) months from their counsels receipt of said resolution, petitioners failed to
comply. Hence, the CA dismissed the appeal for nonpayment of the docket and other lawful fees within
the reglementary period as provided under Section 4 of Rule 41 of the Rules of Court.

ISSUE/S:

1. Whether or not Placer should be included as a petitioner.

2. Whether or not the CA gravely erred in dismissing the appeal for the failure of petitioners to remit the
P30 for legal research fund after having advanced a substantial portion of docket fees.

RULING:

1. The Court in accordance with the disquisition made in this decision impleaded Placer but did not
consider her as petitioner: The caption of the present Petition includes Placer as one of the

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petitioners. In fact, the other petitioners even authorized her to sign the verification and
certification of non-forum shopping in their behalf. A review of the records, however, shows that
she was not one of the defendants before the RTC. Her only participation therein was that she
represented her sister Rosita as one of the defendants by virtue of a Special Power of Attorney
which the latter executed in her favor. Notably in the present Petition, Placer appears to have
been impleaded in her personal capacity and not as Rositas representative. This cannot be done.
It bears emphasizing that an appeal on certiorari, as in this case, is a continuation of the original
suit. Hence, the parties in the original suit must also be the parties in such an appeal. Placer,
therefore, not being a party in the complaint before the RTC has no personality to continue the
same on appeal and cannot be considered as a petitioner. At the most, her only role in this
Petition was to sign the verification and certification of non-forum shopping for and in behalf of
petitioners.

2. The petition fails. Petitioners concede to the fact that payment of the full amount of docket fees
within the prescribed period is not a mere technicality of law or procedure but a jurisdictional
requirement they nevertheless they are praying for the relaxation of the application of the rule on
the payment of the appeal fee in the name of substantial justice and equity. The Court held that
"concomitant to the liberal interpretation of the rules of procedure should be an effort on the part
of the party invoking liberality to adequately explain his failure to abide by the rules. Those who
seek exemption from the application of the rule have the burden of proving the existence of
exceptionally meritorious reason warranting such departure. Petitioners failure to advance any
explanation as to why they failed to pay the correct docket fees or to complete payment of the
same within the period allowed by the CA is thus fatal to their cause. Hence, a departure from the
rule on the payment of the appeal fee is unwarranted.

RELUCIO VS. LOPEZ


373 SCRA 578

TOPIC: REAL PARTY IN INTEREST; NECESSARY PARTY

FACTS: Angelina Meija Lopez filed a petition for Appointment as Sole Administratix of Conjugal
Partnership of Properties, Forfeiture, etc. against her husband Alberto Lopez and Imelda Relucio, for
Alberto abandoned Angelina and her four children and maintained an illicit relationship with Relucio.

A motion to dismiss was filed by Relucio on the ground that Angelina Lopez has no cause of action
against her. The judge of the RTC denied her Motion to Dismiss on the ground that some of the properties
are registered in her name. A motion for reconsideration was filed by Relucio but the same was denied by
the RTC. Relucio then filed a petition for certiorari with the CA which denied the same.
Hence the appeal to the Supreme Court.

ISSUE: Whether Relucio is an indispensable party or only a necessary party.

HELD: Neither.

A real party in interest is one who stands "to be benefited or injured by the judgment of the
suit."In this case, petitioner would not be affected by any judgment in Special Proceedings M-3630.

If petitioner is not a real party in interest, she cannot be an indispensable party. An indispensable party is
one without whom there can be no final determination of an action.19 Petitioner's participation in Special
Proceedings M-36-30 is not indispensable. Certainly, the trial court can issue a judgment ordering Alberto
J. Lopez to make an accounting of his conjugal partnership with respondent, and give support to
respondent and their children, and dissolve Alberto J. Lopez' conjugal partnership with respondent, and
forfeit Alberto J. Lopez' share in property co-owned by him and petitioner. Such judgment would be

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perfectly valid and enforceable against Alberto J. Lopez. Nor can petitioner be a necessary party in
Special Proceedings M-3630.

A necessary party as one who is not indispensable but who ought to be joined as party if
complete relief is to be accorded those already parties, or for a complete determination or
settlement of the claim subject of the action. In the context of her petition in the lower court,
respondent would be accorded complete relief if Alberto J. Lopez were ordered to account for his alleged
conjugal partnership property with respondent, give support to respondent and her children, turn over his
share in the co-ownership with petitioner and dissolve his conjugal partnership or absolute community
property with respondent.

DE CASTRO V. CA
JULY 18, 2002 G.R. NO. 115838

TOPIC: REAL PARTY IN INTEREST; AGENCY

FACTS: Petitioners De Castro were co-owners of four (4) lots located at EDSA corner New York and
Denver Streets in Cubao, Quezon City. In a letter, Francisco Antigo was authorized by the De Castros to
act as real estate broker in the sale of these properties for the amount of P23,000,000.00, five percent
(5%) of which will be given to him as commission.

Antigo found Times Transit Corporation, represented by its president Mr. Rondaris, as a prospective
buyer which desired to buy two (2) lots only, specifically lots 14 and 15. Eventually, the sale of lots 14 and
15 was consummated.

Antigo however received only P48,893.76 as commission. He asserted that his total commission
should be P352,500.00 which is five percent (5%) of the agreed price of P7,050,000.00 paid by Times
Transit Corporation to the De Castro for the two (2) lots. Francisco Artigo then sued petitioners Constante
A. De Castro and Corazon A. De Castro to collect the unpaid balance of his brokers commission from the
De Castros. One of the defenses advanced by the De Castro is that complaint failed to implead their other
siblings who were co-owners as well.

CA: The Court of Appeals affirmed in toto the decision of the trial court.

ISSUE: Whether or not the case should be dismissed

The De Castros argue that Artigos complaint should have been dismissed for failure to implead all the
co-owners of the two lots. The De Castros claim that Artigo always knew that the two lots were co-owned
by Constante and Corazon with their other siblings Jose and Carmela whom Constante merely
represented. The De Castros contend that failure to implead such indispensable parties is fatal to the
complaint since Artigo, as agent of all the four coowners, would be paid with funds co-owned by the four
co-owners.

HELD: No. An indispensable party is one whose interest will be affected by the courts action in the
litigation, and without whom no final determination of the case can be had. The joinder of indispensable
parties is mandatory and courts cannot proceed without their presence. Whenever it appears to the court
in the course of a proceeding that an indispensable party has not been joined, it is the duty of the court to
stop the trial and order the inclusion of such party.

However, the rule on mandatory joinder of indispensable parties is not applicable to the instant case.
Under the note/letter sent by the De Castro to Antigo, a contract of agency was clearly constituted
between Constante and Artigo. Whether Constante appointed Artigo as agent, in Constantes individual or

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representative capacity, or both, the De Castros cannot seek the dismissal of the case for failure to
implead the other co-owners as indispensable parties.

The De Castros admit that the other co-owners are solidarily liable under the contract of agency, citing
Article 1915 of the Civil Code, which reads: Art. 1915. If two or more persons have appointed an agent for
a common transaction or undertaking, they shall be solidarily liable to the agent for all the consequences
of the agency. The solidary liability of the four co-owners, however, militates against the De Castros
theory that the other co-owners should be impleaded as indispensable parties. When the law expressly
provides for solidarity of the obligation, as in the liability of co-principals in a contract of agency, each
obligor may be compelled to pay the entire obligation. The agent may recover the whole compensation
from any one of the co-principals, as in this case.

ORQUIOLA VS. CA
389 SCRA 461

TOPIC: RULE 3 - Section 9. Non-joinder of necessary parties to be pleaded?

FACTS: Pura Kalaw Ledesma was the registered owner of Lot 689 located in Tandang Sora, QC. This
parcel of land was adjacent to certain portions of Lot 707 of the Piedad Estates, registered in the name of
Herminigilda Pedro. Pedro sold Lot 707-A and 707-B to Mariano Lising who then registered both lots and
Lot 707-C in the name of M.B. Lising Realty and subdivided them into smaller lots. Certain portions of the
subdivided lots were sold to third persons including herein petitioners, spouses Victor and Honorata
Orquiola (1964).

Sometime in 1969, Ledesma filed a complaint, docketed as Civil Case No. Q-12918, with the Regional
Trial Court of Quezon City against Herminigilda Pedro and Mariano Lising for allegedly encroaching upon
Lot 689. During the pendency of the action, Tandang Sora Development Corporation replaced Ledesma
as plaintiff by virtue of an assignment of Lot 689 made by Ledesma in favor of said corporation.

On August 21, 1991, the trial court finally adjudged defendants Pedro and Lising jointly and severally
liable for encroaching on plaintiffs land.

To prohibit Judge Baclig of the RTC-QC from issuing a writ of demolition and the Quezon City sheriff from
implementing the alias writ of execution, petitioners filed with the CA a petition for prohibition with prayer
for a restraining order and preliminary injunction on April 17, 1998 on the ground that they bought the
subject parcel of land in good faith and for value, and since they were not impleaded in Civil Case No. Q-
12918, the writ of demolition issued in connection therewith cannot be enforced against them because to
do so would amount to deprivation of property without due process of law.

CA dismissed the petition and held that the petitioners were considered privies who derived their rights
from Lising by virtue of the sale and could be reached by the execution order

ISSUE/S: WON the decision in the Civil Case Q-12918 can be enforced against petitioners even though
they were not impleaded thereto?

RULING: NO, petitioners are not privies (interested in the outcome of the action) and cannot be bound by
the judgment against Lising and his predecessors-in-interests.

The Medina doctrine relied upon by the CA is markedly different from the one before the court. In the
present case, petitioners acquired the lot before the commencement of Civil Case No. Q-12918 and
petitioners acquired the registered title in their own names.

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In other words, the sale to petitioners was made before Pura Kalaw Ledesma claimed the lot. Petitioners
could reasonably rely on Mariano Lisings Certificate of Title which at the time of purchase was still free
from any third party claim.

CHINA BANKING CORPORATION VS. MERCEDES OLIVER


390 SCRA 263

Topic: RULES 1-5, Specifically in this case Rule 3, Sec . 7

FACTS: In August 1995, Pangan Lim, Jr. and a certain Mercedes M. Oliver opened a joint account in
China Banking Corporation (hereinafter Chinabank) at EDSA Balintawak Branch. Lim and Oliver applied
for a P17 million loan, offering as collateral a 7,782 square meter lot located in Tunasan, Muntinlupa and
covered by TCT No. S-50195 in the name of Oliver. The bank approved the application. On November 17,
1995, Lim and Oliver executed in favor of Chinabank a promissory note for P16,650,000, as well as a
Real Estate Mortgage on the property. The mortgage was duly registered and annotated on the original
title under the custody of the Registry of Deeds of Makati and on the owners duplicate copy in the banks
possession. The mortgage document showed Mercedes Olivers address to be No. 95 Malakas Street,
Diliman, Quezon City. For brevity, she is hereafter referred to as OLIVER ONE.

On November 18, 1996, respondent claiming that she is Mercedes M. Oliver with postal office address at
No. 40 J.P. Rizal St., San Pedro, Laguna, filed an action for annulment of mortgage and cancellation of
title with damages against Chinabank, Register of Deeds, and Deputy Register of Deeds of Makati.
Respondent, whom we shall call as OLIVER TWO, claimed that she was the registered and lawful owner
of the land subject of the real estate mortgage; that the owners duplicate copy of the title had always been
in her possession; and that she did not apply for a loan or surrender her title to Chinabank.[2] She prayed
that: (1) the owners duplicate copy surrendered to Chinabank as well as the original title with the Registry
of Deeds be cancelled; (2) the mortgage be declared null and void; and (3) the Registry of Deeds be
ordered to issue a new and clean title in her name.

On January 31, 1997, Chinabank moved to dismiss the case for lack of cause of action and non-joinder of
an indispensable party, the mortgagor. On March 13, 1997, Judge Norma C. Perello issued an order
denying the motion to dismiss. On April 7, 1997, Chinabank filed with the Court of Appeals a petition for
certiorari with prayer for the issuance of a writ of preliminary injunction and/or restraining order to enjoin
enforcement of the March 13, 1997 order and further action on the case. The Court of Appeals directed
respondent Oliver Two to file her comment and deferred action on the prayer for the issuance of the
preliminary injunction pending submission of the comment.

On June 30, 1997, respondent Oliver Two moved to declare petitioner Chinabank in default. She pointed
out that since petitioner received the order denying the motion to dismiss on March 21, 1997, it had only
until April 7, 1997 to file its answer to the complaint. However, until the filing of the motion for default, no
answer had been filed yet. The trial court granted the motion and declared petitioner in default in its order
dated July 17, 1997. Accordingly, the Defendant Bank is declared in default as summons was served on It
as early as December 16, 1996, but until date they have not filed an Answer nor any responsive pleading
and instead, It filed a Motion to Dismiss, which was denied by this Court on March 13, 1997.

The filing of a CERTIORARI to question the Orders by this Court did not toll the period for Defendants to
answer the complaint. Therefore, the reglementary period for the filing of responsive pleading has long
expired. Consequently, petitioner Chinabank filed a supplemental petition on August 11, 1997, seeking
annulment of the July 17, 1997 order. It argued that the special civil action for certiorari filed in the Court
of Appeals interrupted the proceedings before the trial court, thereby staying the period for filing the
answer.

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On June 1, 1998, the Court of Appeals promulgated the assailed decision, finding no grave abuse of
discretion committed by the trial judge in ruling that the Rules of Court provided the manner of impleading
parties to a case and in suggesting that petitioner file an appropriate action to bring the mortgagor within
the courts jurisdiction. As to the judgment by default, the Court of Appeals said that an order denying the
motion to dismiss is interlocutory and may not be questioned through a special civil action for certiorari. In
this case, petitioner Chinabank should have filed its answer when it received the March 13, 1997 order
denying the motion to dismiss. The special civil action for certiorari with the Court of Appeals did not
interrupt the period to file an answer, there being no temporary restraining order or writ of preliminary
injunction issued.

ISSUE: Whether or not the mortgagor Mercedes Oliver, referred to as OLIVER ONE, is an indispensable
party to the case without whom no final determination could be had of an action.

RULING: No. Petitioners contention is far from tenable. An indispensable party is a party in interest,
without whom no final determination can be had of an action. However, mortgagor Oliver Ones absence
from the case does not hamper the trial court in resolving the dispute between respondent Oliver Two and
petitioner. A perusal of Oliver Twos allegations in the complaint below shows that it was for annulment of
mortgage due to petitioners negligence in not determining the actual ownership of the property, resulting
in the mortgages annotation on TCT No. S-50195 in the Registry of Deeds custody. To support said
allegations, respondent Oliver Two had to prove (1) that she is the real Mercedes M. Oliver referred to in
the TCT, and (2) that she is not the same person using that name who entered into a deed of mortgage
with the petitioner. This, respondent Oliver Two can do in her complaint without necessarily impleading
the mortgagor Oliver One. Hence, Oliver One is not an indispensable party in the case filed by Oliver
Two.

Further, a declaration of the mortgages nullity in this case will not necessarily prejudice mortgagor Oliver
One. The bank still needs to initiate proceedings to go after the mortgagor, who in turn can raise other
defenses pertinent to the two of them. A party is also not indispensable if his presence would merely
permit complete relief between him and those already parties to the action, or will simply avoid multiple
litigation, as in the case of Chinabank and mortgagor Oliver One. The latters participation in this case will
simply enable petitioner Chinabank to make its claim against her in this case, and hence, avoid the
institution of another action. Thus, it was the bank who should have filed a third-party complaint or other
action versus the mortgagor Oliver One.

DAVID VS. PARAGAS, JR.


751 SCRA 648

TOPIC: Indispensable and Necessary Parties

FACTS: David, Paragas and Lobrin agreed to venture into a business in Hong Kong. They created
Olympia International, Ltd. (Olympia) under HK laws. Olympia became the exclusive general agent in HK
of PPIs pre-need plans through the General Agency Agreement. Olympia launched the Pares-Pares
program by which planholders would earn points with cash equivalents for successfully enlisting new
subscribers. David was tasked to personally remit said amounts to PP as he was the only signatory
authorized to transact on behalf of Olympia regarding the RCBC accounts. The state of affairs among the
partners went sour upon Lobrins discovery that David failed to remit to PPI the 30% cash equivalent of
the bonus points. The BOD stripped David of his position as a director. It then informed RCBC of his
removal. Constrained by these circumstances, David Filed a complaint for Declaratory Relief, Sum of
Money and Damages before the RTC. He insisted on his entitlement to the commissions due under the
regular and Pares-Pares programs in his capacity as Principal Agent under the General Agency
Agreement with PPI. David filed the supplemental complaint, with a manifestation that an amicable
settlement was struck with Lobrin and Datoy whereby they agreed to withdraw the complaint and

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counterclaims against each other. Lobrin and Olympia through their counsel, confirmed that they had
arrived at a compromise. Paragas questioned the existence of the cited BOD resolution granting Lobrin
the authority to settle the case, as well as the validity of the agreement through an affidavit duly
authenticated by the Philippine Consul, Domingo Lucinario, Jr. He pointed to the fact that Olympia, as an
entity, was never a party in the controversy.

ISSUE: Whether or not Olympia is considered as an indispensable party

RULING: YES. In indispensable party is a party-in-interest without whom no final determination can be
had of an action, and who shall be joined either as plaintiffs or defendants. The joinder of indispensable
parties is mandatory. The presence of indispensable parties is necessary to vest the court with
jurisdiction.

Considering that David was asking for judicial determination of his rights in Olympia, it is without a doubt,
an indispensable party as it stands to be injured or benefited by the outcome of the main proceeding. It
has such an interest in the controversy that a final decree would necessarily affect its rights. Not having
been impleaded, Olympia cannot be prejudiced by any judgment where its interests and properties are
adjudicated in favor of another even if the latter is a beneficial owner. It cannot be said either to have
consented to the judicial approval of the compromise, much less waived substantial rights, because it was
never a party in the proceedings.

Moreover, Olympias absence did not confer upon the RTC the jurisdiction or authority to hear and resolve
the whole controversy. This lack of authority on the part of the RTC which flows from the absence of
Olympia, being an indispensable party, necessarily negates any binding effect of the subject judicially-
approved compromise agreement.

Time and again, the Court has held that the absence of an indispensable party renders all subsequent
actions of the court null and void for want of authority to act, not only as to the absent parties but even to
those present.

LAND BANK OF THE PHILIPPINES VS EDUARDO M. CACAURAN


G.R. No. 191667, April 22, 2015

TOPIC: Indispensable party

FACTS: The Municipality of Agoo entered into two loans with LBP in order to finance a Redevelopment
Plan of the Agoo Public Plaza. The Sangguniang Bayan of the Municipality authorized the mayor Eufranio
Eriguel to enter into a P4M loan with LBP for the Public Plaza and again for the amount of P28M to
construct a commercial center called Agoo Peoples Center within the Plazas premises. The Municipality
used as collateral a 2,323.75 sqm lot at the south-eastern portion of the Plaza. acayuran and other
residents opposed the redevelopment of the Plaza as well as the means of the funding. They claim that
these are highly irregular, violative of the law, and detrimental to public interest resulting in the
desecration of the public plaza. Cacayurans request for the documents relating to the plazas
redevelopment was not granted. Cacayuran invokes his taxpayer right and files a complaint against LBP
and officers of the municipality but does not include the municipality itself as party-defendant. He
questioned the validity of the loan agreements and prays that the redevelopment is enjoined.
The municipal officers moved for the dismissal but were denied. LBP asserted that Cacayuran did not
have any cause of action because he was not privy to the loan agreements.

RTC Ruling: Subject loans are null and void. Resolutions approving the procurement were passed
irregularly and are thus ultra vires. Municipality is not bound so it is the officers that will be held liable.
Plaza lot is property for public use and not valid as collateral.
LBP and the officers appealed to the CA. The municipal officers appeal is deemed abandoned for failing
to file an appellants brief. LBP was given due course.

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CA Ruling: RTC decision affirmed with modification: Vice-Mayor Antonio Eslao is free from personal
liability. Cacayuran has locus standi as resident and the issue is of transcendental importance to public
interest. Resolutions approving the loan are invalidly passed. Plaza lot is invalid as collateral.
Procurement is ultra vires
LBP files petition for certiorari with SC.

Proceedings Before the SC: LBP petition is denied and CA decision affirmed. LBP moves for
reconsideration, Municipality of Agoo files a Motion for Leave to Intervene with Pleading-In-Intervention
Attached praying to be included as party litigant. It contends that being a contracting party to the subject
loans, it is an indispensable party. Cacayuran insists that they are not real party in interest because the
complaint is against the municipal officers in their personal capacity for their ultra vires acts not binding to
the municipality.

Issue: WON the Municipality of Agoo should be deemed an indispensable party to the case

Ruling: YES it is an indispensable party under Sec 7, Rule 3 of the Rules of Court.

Sec 7, Rule 3 mandates that all indispensable parties are to be joined in a suit as it is the party whose
interest will be affected by the courts action and without whom no final determination of the case can be
had. His legal presence is an absolute necessity. Absence of the indispensable party renders all
subsequent actions of the court null and void for want of authority to act.
Failure to implead any indispensable party is not a ground for the dismissal of the complaint. The proper
remedy is to implead them. In this case, Cacayuran failed to implead the Municipality, a real party in
interest and an indispensable party that stands to be directly affected by any judicial resolution. It is the
contracting party and the owner of the public plaza. It stands to be benefited or injured by the judgment of
the case.
The decision of the RTC, affirmed with modification by the CA, and finally affirmed by the SC is not
binding upon the Municipality as it was not impleaded as defendant in the case.

Subject motions are PARTLY GRANTED. Previous decisions are SET ASIDE. Instant case is
REMANDED to the RTC and Cacayuran is DIRECTED to implead all indispensable parties.

LOTTE PHIL. CO., INC V DELA CRUZ ET.AL


G.R. NO. 166302 JULY 28, 2005

TOPIC: INDISPENSIBLE PARTY; NON-JOINDER EFFECTS


FACTS: On December 14, 1995 and yearly thereafter until the year 2000, 7J Maintenance and Janitorial
Services (7J) entered into a contract with petitioner Lotte Phil Co Inc(Lotte) to provide manpower for
needed maintenance, utility, janitorial and other services to the latter. In compliance with the terms and
conditions of the service contract, and to accommodate the needs of Lotte for personnel/workers to do
and perform piece works, respondents Dela Cruz, Mamauag, Cauba, etc,, among others, were hired and
assigned to Lotte as repackers or sealers. However, either in October, 1999 or on February 9, 2000, Lotte
dispensed with their services allegedly due to the expiration/termination of the service contract by Lotte
with 7J. Respondents were never called back again

A labor complaint was filed by respondents against both Lotte and 7J, for illegal dismissal,
regularization, payment of corresponding backwages and related employment benefits, 13 th month pay,
service incentive leave, moral and exemplary damages and attorneys fees based on total judgment
award. Labor Arbiter Cresencio G. Ramos, Jr. rendered judgment declaring 7J as employer of
respondents and finding 7J guilty of illegal dismissal. Respondents appealed to the National Labor
Relations Commission (NLRC) praying that Lotte be declared as their direct employer because 7J is

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merely a labor-only contractor. NLRC affirmed the ruling that 7J is the employer of respondents and solely
liable for their claims. NLRC denied respondents MR.

Lotte prayed that the petition for certiorari filed by respondents in the Court of Appeals be
dismissed for failure to implead 7J who is a party interested in sustaining the proceedings in court,
pursuant to Section 3, Rule 46 of the Revised Rules of Civil Procedure.

Court of Appeals reversed and set aside the rulings of the Labor Arbiter and the NLRC and
declared Lotte as the real employer of respondents and that 7J who engaged in labor-only contracting
was merely the agent of Lotte. Respondents who performed activities directly related to Lottes business
were its regular employees under Art. 280 of the Labor Code. As such, they must be accorded security of
tenure and their services terminated only on just and authorized causes.

ISSUE: WON 7J is an indispensable party and should have been impleaded in respondents petition in
the Court of Appeals?

HELD: YES

An indispensable party is a party in interest without whom no final determination can be had of an
action, and who shall be joined either as plaintiffs or defendants. The joinder of indispensable parties is
mandatory. The presence of indispensable parties is necessary to vest the court with jurisdiction, which is
the authority to hear and determine a cause, the right to act in a case. Thus, without the presence of
indispensable parties to a suit or proceeding, judgment of a court cannot attain real finality. The absence
of an indispensable party renders all subsequent actions of the court null and void for want of authority to
act, not only as to the absent parties but even as to those present.

In the case at bar, 7J is an indispensable party. It is a party in interest because it will be affected
by the outcome of the case. The Labor Arbiter and the NLRC found 7J to be solely liable as the employer
of respondents. The Court of Appeals however rendered Lotte jointly and severally liable with 7J who was
not impleaded by holding that the former is the real employer of respondents. Plainly, its decision directly
affected 7J.

Although 7J was a co-party in the case before the Labor Arbiter and the NLRC, respondents
failed to include it in their petition for certiorari in the Court of Appeals. Hence, the Court of Appeals did
not acquire jurisdiction over 7J. No final ruling on this matter can be had without impleading 7J, whose
inclusion is necessary for the effective and complete resolution of the case and in order to accord all
parties with due process and fair play.

In Domingo v. Scheer, we held that the non-joinder of indispensable parties is not a ground for the
dismissal of an action and the remedy is to implead the non-party claimed to be indispensable. Parties
may be added by order of the court on motion of the party or on its own initiative at any stage of the action
and/or such times as are just. If the petitioner refuses to implead an indispensable party despite the order
of the court, the latter may dismiss the complaint/petition for the petitioner/plaintiffs failure to comply
therefor.

CARABEO VS. DINGCO


647 SCRA 200

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TOPIC: DEATH OF PARTY - EFFECTS

FACTS: On July 10, 1990, petitioner) entered into a contract denominated as "Kasunduan sa Bilihan ng
Karapatan sa Lupa" with Spouses Norberto and Susan Dingco (respondents) whereby petitioner agreed
to sell his rights over a 648 square meter parcel of unregistered land situated in Purok III, Tugatog, Orani,
Bataan to respondents for P38,000.

Sometime in 1994, respondents learned that the alleged problem over the land had been settled and that
petitioner had caused its registration in his name under Transfer Certificate of Title No. 161806. They
thereupon offered to pay the balance but petitioner declined, drawing them to file a complaint before the
Katarungan Pambarangay. No settlement was reached, however, hence, respondent filed a complaint for
specific performance before the RTC of Balanga, Bataan.

After the case was submitted for decision or on January 31, 2001, petitioner passed away. The records do
not show that petitioners counsel informed Branch 1 of the Bataan RTC, where the complaint was
lodged, of his death and that proper substitution was effected in accordance with Section 16, Rule 3,
Rules of Court. Petitioners counsel filed a Notice of Appeal with the CA but the latter affirmed the RTC
Decision. Petitioners motion for reconsideration having been denied, the present petition for review was
filed by Antonio Carabeo, petitioners son.

ISSUE: WON petitioners death rendered respondents complaint against him dismissible.

RULING: NO. The question as to whether an action survives or not depends on the nature of the action
and the damage sued for. In the causes of action which survive, the wrong complained affects primarily
and principally property and property rights, the injuries to the person being merely incidental, while in the
causes of action which do not survive, the injury complained of is to the person, the property and rights of
property affected being incidental. In the present case, respondents are pursuing a property right arising
from the kasunduan, whereas petitioner is invoking nullity of the kasunduan to protect his proprietary
interest. Assuming arguendo, however, that the kasunduan is deemed void, there is a corollary obligation
of petitioner to return the money paid by respondents, and since the action involves property rights, it
survives.

DE LA CRUZ VS JOAQUIN
373 SCRA 11

TOPIC: DEATH OF A PARTY

DOCTRINE: Formal substitution of heirs is not necessary when theyappear, participated, and presented
evidence in the defense of the deceased. When the party to a pending action dies, the claim is not
extinguished. It requires substitution of the deceased.

FACTS: The case originated from a Complaint for the recovery of possession and ownership, the
cancellation of title, and damages, filed by Pedro Joaquin against petitioners in the RTC. The RTC ruled
in favor of respondent ordering herein petitioners to reconvey the property upon his payment. Petitioners
assert that the RTCs Decision was invalid for lack of jurisdiction claiming that respondent died during the
pendency of the case and there being no substitution by the heirs, the trial court allegedly lacked
jurisdiction over the litigation.

ISSUE/S: WON the trial court lost jurisdiction over the case upon the death of Pedro Joaquin?

RULING: NO. When a party to a pending action dies and the claim is not extinguished, the Rules of Court
require a substitution of the deceased. The procedure is specifically governed by Section 16 of Rule 3.
The rule on the substitution of parties was crafted to protect every partys right to due process. The estate

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of the deceased party will continue to be properly represented in the suit through the duly appointed legal
representative. A formal substitution by heirs is not necessary when as in the present case, they
themselves voluntarily appear, participate in the case, and present evidence in defense of the deceased.
These actions negate any claim that the right to due process was violated. The records of the present
case contain a Motion for Substitution of Party Plaintiff filed before the CA. The rule on the substitution
by heirs is not a matter of jurisdiction, but a requirement of due process. Thus, when due process is not
violated, as when the right of the representative or heir is recognized and protected, noncompliance or
belated formal compliance with the Rules cannot affect the validity of a promulgated decision. Mere failure
to substitute for a deceased plaintiff is not a sufficient ground to nullify a trial courts decision. The
alleging party must prove that there was an undeniable violation of due process.

NAVARRO VS ESCOBIDO
606 SCRA 1

TOPIC: Real Parties in Interest, Indispensable Parties

FACTS: Respondent Karen T. Go filed two complaints before the RTC for replevin and/or sum of money
with damages against Navarro. In these complaints, Karen Go prayed that the RTC issue writs of replevin
for the seizure of two (2) motor vehicles in Navarros possession. In his Answers, Navarro alleged as a
special affirmative defense that the two complaints stated no cause of action, since Karen Go was not a
party to the Lease Agreements with Option to Purchase (collectively, the lease agreements) the
actionable documents on which the complaints were based. RTC dismissed the case but set aside the
dismissal on the presumption that Glenn Gos (husband) leasing business is a conjugal property and thus
ordered Karen Go to file a motion for the inclusion of Glenn Go as co-plaintiff as per Rule 4, Section 3 of
the Rules of Court. Navarro filed a petition for certiorari with the CA. According to Navarro, a complaint
which failed to state a cause of action could not be converted into one with a cause of action by mere
amendment or supplemental pleading. CA denied petition.

ISSUE: Whether or not Karen Go is a real party in interest.

RULING: YES. Karen Go is the registered owner of the business name Kargo Enterprises, as the
registered owner of Kargo Enterprises, Karen Go is the party who will directly benefit from or be injured by
a judgment in this case. Thus, contrary to Navarros contention, Karen Go is the real party-in-interest, and
it is legally incorrect to say that her Complaint does not state a cause of action because her name did not
appear in the Lease Agreement that her husband signed in behalf of Kargo Enterprises.

Glenn and Karen Go are effectively co-owners of Kargo Enterprises and the properties registered
under this name; hence, both have an equal right to seek possession of these properties. Therefore, only
one of the co-owners, namely the co-owner who filed the suit for the recovery of the co-owned property, is
an indispensable party thereto. The other co-owners are not indispensable parties. They are not even
necessary parties, for a complete relief can be accorded in the suit even without their participation, since
the suit is presumed to have been filed for the benefit of all co-owners.We hold that since Glenn Go is not
strictly an indispensable party in the action to recover possession of the leased vehicles, he only needs to
be impleaded as a pro-forma party to the suit, based on Section 4, Rule 4 of the Rules, which states:

Section 4.Spouses as parties. Husband and wife shall sue or be sued jointly, except as
provided by law.
Even assuming that Glenn Go is an indispensable party to the action, misjoinder or non-joinder of
indispensable parties in a complaint is not a ground for dismissal of action as per Rule 3, Section
11 of the Rules of Court.

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PACIFIC CONSULTANTS INTERNATIONAL ASIA V. SCHONFELD


516 SCRA (G.R. NO. 166920; FEBRUARY 19, 2007)

Topics: Jurisdiction, venue, forum non conveniens

FACTS: Respondent is a Canadian citizen and was a resident of New Westminster, British Columbia,
Canada. He had been a consultant in the field of environmental engineering and water supply and
sanitation. Pacicon Philippines, Inc. (PPI) is a corporation duly established and incorporated in
accordance with the laws of the Philippines. The president of PPI, Jens Peter Henrichsen, who was also
the director of PCIJ, was based in Tokyo, Japan. Henrichsen commuted from Japan to Manila and vice
versa, as well as in other countries where PCIJ had business.

Respondent was employed by PCIJ, through Henrichsen, as Sector Manager of PPI in its Water and
Sanitation Department. However, PCIJ assigned him as PPI sector manager in the Philippines. His salary
was to be paid partly by PPI and PCIJ. Henrichsen transmitted a letter of employment to respondent in
Canada, requesting him to accept the same and affix his conformity thereto. Respondent made some
revisions in the letter of employment and signed the contract. He then sent a copy to Henrichsen.

Respondent arrived in the Philippines and assumed his position as PPI Sector Manager. He was
accorded the status of a resident alien. Respondent received a letter from Henrichsen informing him that
his employment had been terminated effective August 4, 1999 for the reason that PCIJ and PPI had not
been successful in the water and sanitation sector in the Philippines. However, on July 24, 1999,
Henrichsen, by electronic mail, requested respondent to stay put in his job after August 5, 1999, until such
time that he would be able to report on certain projects and discuss all the opportunities he had
developed.

Respondent filed a Complaint for Illegal Dismissal against petitioners PPI and Henrichsen with the Labor
Arbiter. The Labor Arbiter found, among others, that the January 7, 1998 contract of employment between
respondent and PCIJ was controlling; the Philippines was only the "duty station" where Schonfeld was
required to work under the General Conditions of Employment. PCIJ remained respondents employer
despite his having been sent to the Philippines. Since the parties had agreed that any differences
regarding employer-employee relationship should be submitted to the jurisdiction of the court of arbitration
in London, this agreement is controlling.

On appeal, the NLRC agreed with the disquisitions of the Labor Arbiter and affirmed the latters decision
in toto.

Respondent then filed a petition for certiorari under Rule 65 with the CA. On the issue of venue, the
appellate court declared that, even under the January 7, 1998 contract of employment, the parties were
not precluded from bringing a case related thereto in other venues. While there was, indeed, an
agreement that issues between the parties were to be resolved in the London Court of Arbitration, the
venue is not exclusive, since there is no stipulation that the complaint cannot be filed in any other forum
other than in the Philippines.

ISSUE: Whether or not, the Labor Arbiter has jurisdiction over respondents claim despite the fact that
respondent, a foreign national, was hired abroad by a foreign corporation, executed his employment
contract abroad, and had agreed that any dispute between them "shall be finally settled by the court of
arbitration in London.

RULING: The settled rule on stipulations regarding venue, as held by this Court in the vintage case of
Philippine Banking Corporation v. Tensuan, is that while they are considered valid and enforceable, venue
stipulations in a contract do not, as a rule, supersede the general rule set forth in Rule 4 of the Revised
Rules of Court in the absence of qualifying or restrictive words. They should be considered merely as an

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agreement or additional forum, not as limiting venue to the specified place. They are not exclusive but,
rather permissive. If the intention of the parties were to restrict venue, there must be accompanying
language clearly and categorically expressing their purpose and design that actions between them be
litigated only at the place named by them.

In the instant case, no restrictive words like "only," "solely," "exclusively in this court," "in no other court
save ," "particularly," "nowhere else but/except ," or words of equal import were stated in the
contract.33 It cannot be said that the court of arbitration in London is an exclusive venue to bring forth any
complaint arising out of the employment contract.

Petitioners contend that respondent should have filed his Complaint in his place of permanent residence,
or where the PCIJ holds its principal office, at the place where the contract of employment was signed, in
London as stated in their contract. By enumerating possible venues where respondent could have filed
his complaint, however, petitioners themselves admitted that the provision on venue in the employment
contract is indeed merely permissive.

Petitioners insistence on the application of the principle of forum non conveniens must be rejected. The
bare fact that respondent is a Canadian citizen and was a repatriate does not warrant the application of
the principle for the following reasons:

First. The Labor Code of the Philippines does not include forum non conveniens as a ground for the
dismissal of the complaint.34

Second. The propriety of dismissing a case based on this principle requires a factual determination;
hence, it is properly considered as defense.35

Third. In Bank of America, NT&SA, Bank of America International, Ltd. v. Court of Appeals,36 this Court
held that:

x x x [a] Philippine Court may assume jurisdiction over the case if it chooses to do so; provided, that the
following requisites are met: (1) that the Philippine Court is one to which the parties may conveniently
resort to; (2) that the Philippine Court is in a position to make an intelligent decision as to the law and the
facts; and, (3) that the Philippine Court has or is likely to have power to enforce its decision. x x x

Admittedly, all the foregoing requisites are present in this case.

BPI FAMILY SAVINGS BANK INC. V. SPS. BENEDICTO & TERESITA YUJUICO
G.R. No. 175796, July 22, 2015

Doctrine: An action to recover the deficiency after extrajudicial foreclosure of a real property mortgage is
a personal action because it does not affect title to or possession of real property, or any interest therein.

Facts: In 1996, the City of Manila filed a complaint against the respondents for the expropriation of 5
parcels of land in Tondo, Manila and registered in the name of respondents. 2 of the parcels of land were
mortgaged to the petitioner. In 2000, the Manila RTC rendered its judgment declaring the five parcels of
land expropriated for public use. The petitioner subsequently filed a Motion to, but the RTC denied the
motion for having been "filed out of time." Hence, the petitioner decided to extrajudicially foreclose the
mortgage constituted on the two parcels of land subject of the respondents' loan. After holding the public
auction, the sheriff awarded the two lots to the petitioner as the highest bidder. Claiming a deficiency, the
petitioner sued the respondents to recover such deficiency in the Makati RTC. The respondents moved to
dismiss the complaint on several grounds. The RTC denied the motion to dismiss, while in CA, it granted
the petition, opining Thus, a suit for recovery of the deficiency after the foreclosure of a mortgage is in

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the nature of a mortgage action because its purpose is precisely to enforce the mortgage contract; it is
upon a written contract and upon an obligation of the mortgage-debtor to pay the deficiency which is
created by law. As such, the venue of an action for recovery of deficiency must necessarily be the same
venue as that of the extrajudicial foreclosure of mortgage.

Issues: Whether or not the venue for the collection of deficiency is properly laid.

Held: Yes. It is basic that the venue of an action depends on whether it is a real or a personal action.
According to Section 1, Rule 4 of the Rules of Court, a real action is one that affects title to or possession
of real property, or an interest therein. The real action is to be commenced and tried in the proper court
having jurisdiction over the area wherein the real property involved, or a portion thereof, is situated, which
explains why the action is also referred to as a local action. In contrast, the Rules of Court declares all
other actions as personal actions. Such actions may include those brought for the recovery of personal
property, or for the enforcement of some contract or recovery of damages for its breach, or for the
recovery of damages for the commission of an injury to the person or property. The venue of a personal
action is the place where the plaintiff or any of the principal plaintiffs resides, or where the defendant or
any of the principal defendants resides, or in the case of a non-resident defendant where he may be
found, at the election of the plaintiff, for which reason the action is considered a transitory one. Based on
the distinctions between real and personal actions, an action to recover the deficiency after the
extrajudicial foreclosure of the real property mortgage is a personal action, for it does not affect title to or
possession of real property, or any interest therein. Given the foregoing, the petitioner correctly brought
the case in the Makati RTC because Makati was the place where the main office of the petitioner was
located. We underscore that in civil proceedings, venue is procedural, not jurisdictional, and may be
waived by the defendant if not seasonably raised either in a motion to dismiss or in the answer. Section 1,
Rule 9 of the Rules of Court thus expressly stipulates that defenses and objections not pleaded either in a
motion to dismiss or in the answer are deemed waived.

BIACO VS. COUNTRY SIDE RURAL BANK


515 SCRA 106

FACTS: Biaco vs Countryside Rural Bank Ernesto Biaco is the husband of petitioner Ma. Teresa Chaves
Biaco. Ernesto obtained several loans from the respondent bank as evidenced by promissory notes. As
security for the payment of the said loans, Ernesto executed a real estate mortgage in favor of the bank
covering the parcel of land described in Original Certificate of Title (OCT) No. P-14423. The real estate
mortgages bore the signatures of the spouses Biaco. When Ernesto failed to settle the above-mentioned
loans on its due date, respondent bank through counsel sent him a written demand . The written demand,
however, proved futile prompting respondent bank to file a complaint for foreclosure of mortgage against
the spouses Ernesto and Teresa Biaco before the RTC of Misamis Oriental. Summons was served to the
spouses Biaco through Ernesto at his office. Ernesto received the summons but for unknown reasons, he
failed to file an answer. Hence, the spouses Biaco were declared in default upon motion of the respondent
bank. The respondent bank was allowed to present its evidence ex parte before the Branch Clerk of Court
who was then appointed by the court as Commissioner.

RTC rendered decision in favor of respondent. In case of non-payment within the period, the Sheriff of
this Court is ordered to sell at public auction the mortgaged Lot, a parcel of registered land to satisfy the
mortgage debt, and the surplus if there be any should be delivered to the defendants spouses ERNESTO
and MA. THERESA [CHAVES] BIACO. In the event however[,] that the proceeds of the auction sale of the
mortgage[d] property is not enough to pay the outstanding obligation, the defendants are ordered to pay
any deficiency of the judgment as their personal liability. Petitioner sought the annulment of the Regional
Trial Court decision contending that extrinsic fraud prevented her from participating in the judicial
foreclosure proceedings. According to her, she came to know about the judgment in the case only after

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the lapse of more than six (6) months after its finality. . She moreover asserted that the trial court failed to
acquire jurisdiction because summons were served on her through her husband without any explanation
as to why personal service could not be made. Petitioner further argues that the deficiency judgment is a
personal judgment which should be deemed void for lack of jurisdiction over her person.

CA ruled that judicial foreclosure proceedings are actions quasi in rem. As such, jurisdiction over the
person of the defendant is not essential as long as the court acquires jurisdiction over the res. Noting that
the spouses Biaco were not opposing parties in the case, the Court of Appeals further ruled that the fraud
committed by one against the other cannot be considered extrinsic fraud.

ISSUE: WON CA erred in ruling that there was no fraud perpetrated by respondent upon her thereby
violating her right to due process?

HELD: The appellate court acted well in ruling that there was no fraud perpetrated by respondent bank
upon petitioner, noting that the spouses Biaco were co-defendants in the case and shared the same
interest. Whatever fact or circumstance concealed by the husband from the wife cannot be attributed to
respondent bank.

An action in personam is an action against a person on the basis of his personal liability. An action in rem
is an action against the thing itself instead of against the person. An action quasi in rem is one wherein an
individual is named as defendant and the purpose of the proceeding is to subject his interest therein to
the obligation or lien burdening the property.

In an action in personam, jurisdiction over the person of the defendant is necessary for the court to validly
try and decide the case. In a proceeding in rem or quasi in rem, jurisdiction over the person of the
defendant is not a prerequisite to confer jurisdiction on the court provided that the court acquires
jurisdiction over the res. Jurisdiction over the res is acquired either (1) by the seizure of the property
under legal process, whereby it is brought into actual custody of the law; or (2) as a result of the institution
of legal proceedings, in which the power of the court is recognized and made effective. In a proceeding in
rem or quasi in rem, the only relief that may be granted by the court against a defendant over whose
person it has not acquired jurisdiction either by valid service of summons or by voluntary submission to its
jurisdiction, is limited to the res. Similarly, in this case, while the trial court acquired jurisdiction over the
res, its jurisdiction is limited to a rendition of judgment on the res. It cannot extend its jurisdiction beyond
the res and issue a judgment enforcing petitioners personal liability. In doing so without first having
acquired jurisdiction over the person of petitioner, as it did, the trial court violated her constitutional right to
due process, warranting the annulment of the judgment rendered in the case.

BAUTISTA VS. UNANGST


557 SCRA 256

DOCKET FEES; FAILURE TO PAY; INCORRECT ASSESSMENT

FACTS: In 1996, Hamilton Salak rented a car from Benjamin BAUTISTA who failed to return the car after
three (3) days prompting the latter to file a complaint against him demanding the sum of P232, 372.00 as
payment for car rental fees, fees incurred in locating the car, attorney's fees and other incidental
expenses.

Salak and his common-law wife, Shirley UNANGST, expressed willingness to pay but since they were
then short on cash, they sold to BAUTISTA a house and lot with right to repurchase, specifying, among
others, that: (1) UNANGST, as vendor, shall pay capital gains tax, current real estate taxes and utility bills
pertaining to the property; (2) if UNANGST fails to repurchase the property within 30 days from the date of

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the deed, she and her assigns shall immediately vacate the premises and deliver its possession to
petitioner without need of a judicial order; and (3) UNANGST refusal to do so will entitle petitioner to take
immediate possession of the property.

UNANGST failed to repurchase the property within the stipulated period. As a result, BAUTISTA filed a
complaint for specific performance or recovery of possession, for sum of money, for consolidation of
ownership and damages against UNANGST.

The RTC ruled in favor of Petitioner Bautista.

Respondents failed to interpose a timely appeal. However, on September 10, 2004, respondent Unangst
filed a petition for relief pursuant to Section 38 of the 1997 Rules on Civil Procedure. She argued that she
learned of the decision of the RTC only on September 6, 2004 when she received a copy of the motion for
execution filed by petitioner.

Petitioner, on the other hand, moved for the dismissal of respondents petition on the ground that the latter
paid an insufficient sum of P200.00 as docket fees. It appears that respondent Unangst initially paid
P200.00 as docket fees as this was the amount assessed by the Clerk of Court of the RTC. Said amount
was insufficient as the proper filing fees amount to P1,715.00. Nevertheless, the correct amount was
subsequently paid by said respondent on February 22, 2005.

The RTC granted the petition for relief. Subsequently, it directed respondents to file a notice of appeal
within twenty-four (24) hours from receipt of the order. Accordingly, on February 23, 2005, respondents
filed their notice of appeal.

CA found that the respondents had perfected an appeal via petition for relief to be able to appeal
judgment even when the fees were paid beyond the period prescribed to bring such action. It also
reversed the decision of the RTC finding the Deed of Sale with Right to Repurchase a document of sale
executed by the respondent in favor of the petitioner and in further holding such contract as one of
equitable mortgage (Sales issue). Hence the case.

ISSUE(S): Whether the respondent perfected the appeal despite not paying the proper docket fees on
time

HELD: Yes. On this issue, respondent counters that the belated payment of proper docket fees was not
due to their fault but to the improper assessment by the Clerk of Court. Respondent asserts the ruling of
the CA that the court may extend the time for the payment of the docket fees if there is a justifiable reason
for the failure to pay the correct amount. Moreover, respondent argues that petitioner failed to contest the
RTC Order dated February 21, 2004 that allowed the payment of supplementary docket fees. Petitioner
failed to file a motion for reconsideration or a petition for certiorari to the higher court to question said
order.

We agree with respondents. Their failure to pay the correct amount of docket fees was due to a justifiable
reason.

The right to appeal is a purely statutory right. Not being a natural right or a part of due process, the right
to appeal may be exercised only in the manner and in accordance with the rules provided therefor. For
this reason, payment of the full amount of the appellate court docket and other lawful fees within the
reglementary period is mandatory and jurisdictional. Nevertheless, as this Court ruled in Aranas v.
Endona, the strict application of the jurisdictional nature of the above rule on payment of appellate docket
fees may be mitigated under exceptional circumstances to better serve the interest of justice. It is always
within the power of this Court to suspend its own rules, or to except a particular case from their operation,
whenever the purposes of justice require it.

In not a few instances, the Court relaxed the rigid application of the rules of procedure to afford the parties
the opportunity to fully ventilate their cases on the merits. This is in line with the time-honored principle

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that cases should be decided only after giving all parties the chance to argue their causes and defenses.
For, it is far better to dispose of a case on the merit which is a primordial end, rather than on a
technicality, if it be the case that may result in injustice. The emerging trend in the rulings of this Court is
to afford every party-litigant the amplest opportunity for the proper and just determination of his cause,
free from the constraints of technicalities.

Considering the foregoing, there is a need to suspend the strict application of the rules so that the
petitioners would be able to fully and finally prosecute their claim on the merits at the appellate level
rather than fail to secure justice on a technicality, for, indeed, the general objective of procedure is to
facilitate the application of justice to the rival claims of contending parties, bearing always in mind that
procedure is not to hinder but to promote the administration of justice.

III. RULES 6-9


ALMA JOSE VS. JAVELLANA
664 SCRA 1

APPEALS; FORUM SHOPPING; FRESH PERIOD RULE

On September 8, 1979, Margarita Marquez Alma Jose (Margarita) sold for consideration of
P160,000.00 to respondent Ramon Javellana by deed of conditional sale two parcels of land with areas of
3,675 and 20,936 square meters located in Barangay Mallis, Guiguinto, Bulacan. They agreed that
Javellana would pay P80,000.00 upon the execution of the deed and the balance of P80,000.00 upon the
registration of the parcels of land under the Torrens System (the registration being undertaken by
Margarita within a reasonable period of time); and that should Margarita become incapacitated, her son
and attorney-in-fact, Juvenal M. Alma Jose (Juvenal), and her daughter, petitioner Priscilla M. Alma Jose,
would receive the payment of the balance and proceed with the application for registration.

After Margarita died and with Juvenal having predeceased Margarita without issue, the vendors
undertaking fell on the shoulders of Priscilla, being Margaritas sole surviving heir. However, Priscilla did
not comply with the undertaking to cause the registration of the properties under the Torrens System, and,
instead, began to improve the properties by dumping filling materials therein with the intention of
converting the parcels of land into a residential or industrial subdivision.

Faced with Priscillas refusal to comply, Javellana commenced on February 10, 1997 an action
for specific performance, injunction, and damages against her in the Regional Trial Court in Malolos,
Bulacan (RTC). Javellana prayed for the issuance of a temporary restraining order or writ of preliminary
injunction to restrain Priscilla from dumping filling materials in the parcels of land; and that Priscilla be
ordered to institute registration proceedings and then to execute a final deed of sale in his favor.

Priscilla filed a motion to dismiss, stating that the complaint was already barred by prescription;
and that the complaint did not state a cause of action, which was initially denied. However, upon her MR
RTC reversed its decision and granted the motion to dismiss, opining that Javellana had no cause of
action against her due to her not being bound to comply with the terms of the deed of conditional sale for
not being party thereto.

Javellana moved for reconsideration. The RTC denied the motion for reconsideration for lack of
any reason to disturb the order of the RTC was not appealable; that the appeal was not perfected on time;

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and that Javellana was guilty of forum shopping. It appears that pending the appeal, Javellana also filed a
petition for certiorari in the CA to assail the June 24, 1999 and June 21, 2000 orders dismissing his
complaint. The CA dismissed the petition for certiorari. As to the notice on appeal, the CA reversed and
set aside the RTC decision and remanded the records to the RTC.

The CA denied the motion for reconsideration filed by Priscilla.

ISSUE:

1. Whether or not the order of the RTC on June 21, 2000 was not appealable?

2. Whether or not the notice of appeal was belatedly filed?

3. Whether or not Javellana was guilty of forum shopping?

HELD:

1. Yes. The denial of the motion for reconsideration of the order of dismissal was a final order and
appealable. First of all, the denial of Javellanas motion for reconsideration left nothing more to be done
by the RTC because it confirmed the dismissal of Civil Case No. 79-M-97. It was clearly a final order, not
an interlocutory one.

The Court has distinguished between final and interlocutory orders in Pahila-Garrido v. Tortogo,
thuswise: The distinction between a final order and an interlocutory order is well known. The first disposes
of the subject matter in its entirety or terminates a particular proceeding or action, leaving nothing more to
be done except to enforce by execution what the court has determined, but the latter does not completely
dispose of the case but leaves something else to be decided upon. An interlocutory order deals with
preliminary matters and the trial on the merits is yet to be held and the judgment rendered. The test to
ascertain whether or not an order or a judgment is interlocutory or final is: does the order or judgment
leave something to be done in the trial court with respect to the merits of the case? If it does, the order or
judgment is interlocutory; otherwise, it is final.

And, secondly, whether an order is final or interlocutory determines whether appeal is the correct
remedy or not. A final order is appealable, to accord with the final judgment rule enunciated in Section 1,
Rule 41 of the Rules of Court to the effect that "appeal may be taken from a judgment or final order that
completely disposes of the case, or of a particular matter therein when declared by these Rules to be
appealable;" but the remedy from an interlocutory one is not an appeal but a special civil action for
certiorari.

2. Yes.

The appeal was made on time pursuant to Neypes v. CA

The Court meanwhile adopted the fresh period rule in Neypes v. Court of Appeals, by which an
aggrieved party desirous of appealing an adverse judgment or final order is allowed a fresh period of 15
days within which to file the notice of appeal in the RTC reckoned from receipt of the order denying a
motion for a new trial or motion for reconsideration. Under the rule, Javellanas notice of appeal filed on
July 19, 2000 was timely filed pursuant to the fresh period rule.

3. No.

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Forum shopping is the act of a party litigant against whom an adverse judgment has been
rendered in one forum seeking and possibly getting a favorable opinion in another forum, other than by
appeal or the special civil action of certiorari, or the institution of two or more actions or proceedings
grounded on the same cause or supposition that one or the other court would make a favorable
disposition. Forum shopping happens when, in the two or more pending cases, there is identity of parties,
identity of rights or causes of action, and identity of reliefs sought. Where the elements of litis pendentia
are present, and where a final judgment in one case will amount to res judicata in the other, there is forum
shopping.

For litis pendentia to be a ground for the dismissal of an action, there must be: (a) identity of the
parties or at least such as to represent the same interest in both actions; (b) identity of rights asserted and
relief prayed for, the relief being founded on the same acts; and (c) the identity in the two cases should be
such that the judgment which may be rendered in one would, regardless of which party is successful,
amount to res judicata in the other.

For forum shopping to exist, both actions must involve the same transaction, same essential facts
and circumstances and must raise identical causes of action, subject matter and issues. Clearly, it does
not exist where different orders were questioned, two distinct causes of action and issues were raised,
and two objectives were sought.

In his appeal in C.A.-G.R. CV No. 68259, Javellana aimed to undo the RTCs erroneous dismissal
of Civil Case No. 79-M-97 to clear the way for his judicial demand for specific performance to be tried and
determined in due course by the RTC; but his petition for certiorari had the ostensible objective "to
prevent (Priscilla) from developing the subject property and from proceeding with the ejectment case until
his appeal is finally resolved," as the CA explicitly determined in its decision in C.A.-G.R. SP No. 60455.

Nor were the dangers that the adoption of the judicial policy against forum shopping designed to
prevent or to eliminate attendant. The first danger, i.e., the multiplicity of suits upon one and the same
cause of action, would not materialize considering that the appeal was a continuity of Civil Case No. 79-
M-97, whereas C.A.-G.R. SP No. 60455 dealt with an independent ground of alleged grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of the RTC. The second danger, i.e., the
unethical malpractice of shopping for a friendly court or judge to ensure a favorable ruling or judgment
after not getting it in the appeal, would not arise because the CA had not yet decided C.A.-G.R. CV No.
68259 as of the filing of the petition for certiorari.

MEDADO VS. HEIRS OF ANTONIO CONSUING


665 SCRA 534

TOPIC: Verification and Certification

FACTS: (Spouses Medado) and Estate of Consing executed Deeds of Sale with Assumption of Mortgage
of the property identified as Hacienda.

As part of the deal, Spouses Medado undertook to assume the estate's loan with (PNB). Subsequent to
the sale, however, the Estate of Consing offered the subject lots to the government. Estate of Consing
also instituted with the RTC, an action for rescission and damages against Spouses Medado due to the
alleged failure of the spouses to meet the conditions in their agreement.

In the meantime while the case for rescission was pending, Land Bank issued in favor of the Estate of
Consing a certificate of deposit of cash as compensation for the lots. Spouses Medado feared that LBP
would release the full proceeds thereof to the Estate of Consing, they institute an action for injunction to

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restrain LBP from releasing the remaining amount of the proceeds of the lots to Estate of Consing, and
restraining the Estate of Consing from receiving these proceeds

RTC granter the injunction (Medado) and the Writ of Preliminary Injunction was issued. The writ was
implemented 1 day before the hearing for the motion for reconsideration filed by Heirs of Consing. Feeling
aggrieved, the heirs of the late Antonio Consing (Consing) questioned the RTC's order via a petition
for certiorari filed with the CA. They sought, among other reliefs, the dismissal of the complaint for
injunction for violation of the rules on litis pendentia and forum shopping.

On the matter of the absence of a motion for reconsideration of the trial court's order before resorting to a
petition for certiorari, the heirs explained that the implementation of the questioned writs rendered their
motion for reconsideration moot and academic. The heirs argued that their case was within the
exceptions to the general rule that a petition under Rule 65 will not lie unless a motion for reconsideration
is first filed.

CA NULLIFIED and SET ASIDE the ruling of RTC.

The CA ruled that the RTC gravely abused its discretion in taking cognizance of Civil Case for
injunction during the pendency of Civil Case for rescission and damages as this violates the rule
against forum shopping.

ISSUES: Whether or not the requirement for verification and certification against forum shopping
complied with by the heris of consing when the same is solely signed by Soledad- administratix?

RULING: The requirements for verification and certification against forum shopping in the CA petition
were substantially complied with, following settled jurisprudence. Where the petitioners are immediate
relatives, who share a common interest in the property subject of the action, the fact that only one of the
petitioners executed the verification or certification of forum shopping will not deter the court from
proceeding with the action.

The Court has consistently held that verification of a pleading is a formal, not a jurisdictional, requirement
intended to secure the assurance that the matters alleged in a pleading are true and correct. Thus, the
court may simply order the correction of unverified pleadings or act on them and waive strict compliance
with the rules. It is deemed substantially complied with when one who has ample knowledge to swear to
the truth of the allegations in the complaint or petition signs the verification; and when matters alleged in
the petition have been made in good faith or are true and correct. It was based on this principle that this
Court had also allowed herein petitioner, via our Resolution dated April 22, 2009, a chance to submit a
verification that complied with Section 4, Rule 7 of the Rules of Court, as amended, instead of the Court
dismissing the petition outright.

COA VS. PALER


614 SCRA

Topic: Authority to file petition and sign the verification and certification of non-forum shopping / appeal
despite having been filed beyond the reglementary period

Facts: Celso M. Paler was a Supervising Legislative Staff Officer II with the Technical Support Service of
the COA. Mr. Paner submitted a request for vacation leave for 74 working days then left for the U.S.
without verifying whether the application for leave was approved. Comm. Chairman informed Paler that
he was being dropped from the roll of employees due to his continuous 30-day absence without leave and
in accordance with CSC Memorandum Circular No. 14, s. 1999. Mr. Paner moved for MR with the Comm.
Chairman, was denied; on appeal, CSC reversed and set aside the Comm. Chairman's decision. (Rule
43) CA affirmed CSC resolution; hence Rule 45.

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Issue/s:

1 WON Commission Secretary may file the petition and sign the verification and certification of non-
forum shopping in behalf of the Commission Chairman;
2 WON appeal may prosper despite having been filed beyond the reglementary period.

Ruling/s:

1 Representatives, lawyers or any person who personally knew the truth of the facts alleged in the
petition could sign the verification. However, as to the certification of non-forum shopping, the
established rule is that it must be executed by the plaintiff or any of the principal parties and not
by counsel. Lack of authority, (certification of non-forum shopping) dismissible.

2 Procedural rules need not be strictly observed if appeal is meritorious. it is within the power of
this Court to temper rigid rules in favor of substantial justice. While it is desirable that the Rules of
Court be faithfully and even meticulously observed, courts should not be so strict about
procedural lapses that do not really impair the proper administration of justice. If the rules are
intended to ensure the orderly conduct of litigation, it is because of the higher objective they seek
which is the protection of substantive rights of the parties.

BENGUET EXPLORATION INC. VS. CA


351 SCRA

DOCTRINE: Authenticity and due execution constitutes only 4 things: (1) that the document was signed;
(2) that the document complied with all the formalities under the laws; (3) that when the document was
signed, it was in the original form without any alteration; and (4) that the document was delivered.

FACTS: Petitioner Benguet Exploration, Inc. (Benguet) filed a complaint for damages against
SeawoodShipping and Switzerland General Insurance, Co., Ltd.

Rogelio Lumibao, marketing assistant of Benguet, was in charge of exportation. His responsibilities
included the documentation of export products, presentations with banks, and other duties connected with
the export of products. He explained that private respondent Seawood Shipping was chartered by
petitioner Benguet to transport copper concentrates. The bill of lading stated that the cargo, consisting of
2,243.496 wet metric tons of copper concentrates, was loaded on board Sangkulirang No. 3 at Poro
Point, San Fernando, La Union. It was insured by Switzerland Insurance (marine insurance policy was
marked. When the cargo was unloaded in Japan, however, Rogelio Lumibao received a report dated
August 19, 1985, from a surveyor in Japan stating that the cargo was 355 metric tons short of the amount
stated in the bill of lading. For this reason, petitioner Benguet made a claim of the loss to Seawood
Shipping and Switzerland Insurance. In its letter, dated August 21, 1985, petitioner Benguet made a
formal demand for the value of the alleged shortage. As both Seawood Shipping and Switzerland
Insurance refused the demand, petitioner Benguet brought these cases against Seawood Shipping and
Switzerland Insurance.

Ernesto Cayabyab had been with Benguet for 13 years and, at the time of his testimony, he was secretary
of Nil Alejandre, manager of Benguet. According to Cayabyab, he was sent to the warehouse at La Union
to assist in the loading of the copper concentrates. These copper concentrates were to be loaded on the
ship Sangkulirang No. 3. Cayabyab said he was present when the cargo was loaded on the ship, as
evidenced by the Certificate of Loading, Certificate of Weight, and the Mate's Receipt all dated July 28,
1985. According to Cayabyab, the Marine Surveyor and the Chief Mate would go around the boat to
determine how much was loaded on the ship. Cayabyab stated that he saw petitioner Benguet's
representative and his immediate superior, Mr. Alejandre, and the Inspector of Customs, Mr. Cardenas,
sign the Certificate of Weight. Cayabyab also witnessed the ship captain sign the Certificate of Weight,

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which stated therein that 2,243.496 wet metric tons of copper concentrates were loaded on the ship.
Cayabyab likewise confirmed the authenticity of the Mate's Receipt, saying that he witnessed the Chief
Mate sign the document.

Petitioner contends that the genuineness and due execution of the documents presented, i.e., Bill of
Lading, Certificate of Loading, Certificate of Weight, Mates Receipt, were properly established by the
testimony of its witness, Ernesto Cayabyab, and that as a result, there is a prima facie presumption that
their contents are true.

ISSUE: Whether the genuineness and due execution of the documents presented were properly
established by the testimony of the plaintiffs witness, resulting to prima facie presumption that their
contents are true.

RULING: This contention has no merit. The admission of the due execution and genuineness of a
document simply means that the party whose signature it bears admits that he signed it or that it was
signed by another for him with his authority; that at the time it was signed it was in words and figures
exactly as set out in the pleading of the party relying upon it; that the document was delivered; and that
any formal requisites required by law, such as a seal, an acknowledgment, or revenue stamp, which it
lacks, are waived by him. Genuineness and due execution of the instrument means nothing more than
that the instrument is not spurious, counterfeit, or of different import on its face from the one executed.

It is equally true, however, that execution can only refer to the actual making and delivery, but it cannot
involve other matters without enlarging its meaning beyond reason. The only object of the rule was to
enable a plaintiff to make out a prima facie, not a conclusive case, and it cannot preclude a defendant
from introducing any defense on the merits which does not contradict the execution of the instrument
introduced in evidence.

Respondents presented evidence which casts doubt on the veracity of these documents. Switzerland
Insurance presented Export Declaration No. 1131/85 which petitioners own witness, Rogelio Lumibao,
prepared, in which it was stated that the copper concentrates to be transported to Japan had a gross
weight of only 2,050 wet metric tons or 1,845 dry metric tons, 10 percent more or less. On the other hand,
Certified Adjusters, Inc., to which Switzerland Insurance had referred petitioners claim, prepared a report
which showed that a total of 2,451.630 wet metric tons of copper concentrates were delivered at Poro
Point. As the report stated: It is to be pointed out that there were no actual weighing made at Benguet
Explorations site. The procedure done was that after weighing the trucks before and after unloading at
Poro Point, the weight of the load was determined and entered on Philex Trip Ticket which was later on
copied and entered by the truck driver on Benguet Exploration, Inc.s Transfer Slip.

Considering the discrepancies in the various documents showing the actual amount of copper
concentrates transported to Poro Point and loaded in the vessel, there is no evidence of the exact amount
of copper concentrates shipped.

Thus, whatever presumption of regularity in the transactions might have risen from the genuineness and
due execution of the Bill of Lading, Certificate of Weight, Certificate of Loading, and Mates Receipt was
successfully rebutted by the evidence presented by Switzerland Insurance which showed disparities in
the actual weight of the cargo transported to Poro Point and loaded on the vessel. This fact is
compounded by the admissions made by Lumibao and Cayabyab that they had no personal knowledge of
the actual amount of copper concentrates loaded on the vessel.

In the face of these admissions, appellants claim of loss or shortage is placed in serious doubt, there
being no other way of verifying the accuracy of the figures indicated in appellants documentary evidence
that could confirm the alleged loss of 355.736 MT. Notwithstanding the figure stated in Bill of Lading No.

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PP/0-1 that 2,243.496 WMT of copper concentrates was loaded by appellant at the port of origin, it should
be stressed that this is merely prima facie evidence of the receipt by the carrier of said cargo as described
in the bill of lading. Thus, it has been held that recitals in the bill of lading as to the goods shipped raise
only a rebuttable presumption that such goods were delivered for shipment and as between the consignor
and a receiving carrier, the fact must outweigh the recital. Resultingly, the admissions elicited from
appellants witnesses that they could not confirm the accuracy of the figures indicated in their
documentary evidence with regard to the actual weight of the cargo loaded at the port of origin and that
unloaded at the port of destination, in effect rebuts the presumption in favor of the figure indicated in the
bill of lading.

ASIAN CONST. & DEV. CORP. VS. CA


458 SCRA

DOCTRINE: There must be a causal connection between the claim of the plaintiff in his complaint and a
claim for contribution, indemnity or other relief of the defendant against the third-party defendant.

FACTS: The original plaintiff in this case, Monark Equipment Corporation (MEC), filed a collection suit
with damages against Asian Construction and Development Corporation (ACDC) for non-payment of
rentals of the several leased equipment amounting to P5,071,335,86. ACDC, on the other hand, filed a
motion to file and admit answer with third-party complaint against Becthel Overseas Corporation (BOC)
alleging by way of special and affirmative defense that while it is true ACDC is indebted to MEC in the
amount of P5,071,335,86, the same cannot be complied with because BOC is yet to pay ACDC the
contracted services it rendered which includes the use of the subject equipment at its project site and
therefore, as a result, BOC should be impleaded as a third-party defendant in this case. MEC opposed it
by filing a motion for summary judgment alleging that since there was no genuine issue as to the
monetary obligation of ACDC to MEC, the only issue left for the trial court to resolve is the amount of
attorneys fees and cost of litigation. Furthermore, MEC also added that the demand set forth by ACDC in
its special and affirmative defense partook the nature of a negative pregnant and that there was a need
for a hearing in its claim for damages.

Both the RTC and CA ruled denying the motion filed by ACDC and in favor of MEC.

ISSUE: Whether or not the lower courts erred in denying the third-party complaint filed by ACDC

RULING: No. There is no showing in the proposed third-party complaint that the respondent knew or
approved the use of the leased equipment by the petitioner for the said project in Quezon. BOC cannot
invoke any defense the petitioner had or may have against the claims of the respondent in its complaint,
because the petitioner admitted its liabilities to the respondent for the amount of P5,075,335.86. The
barefaced fact that the petitioner used the equipment it leased from the respondent in connection with its
project with BOC does not provide a substantive basis for the filing of a third-party complaint against the
latter. There is no causal connection between the claim of the respondent for the rental and the balance of
the purchase price of the equipment and parts sold and leased to the petitioner, and the failure of BOC to
pay the balance of its account to the petitioner after the completion of the project in Quezon.

The controversy between the respondent and the petitioner, on one hand, and that between the petitioner
and BOC, on the other, are thus entirely distinct from each other. Hence, the denial of the third-party
complaint by the courts were proper.

BANCO DE ORO VS. TANSIPEK


593 SCRA 456

TOPIC: Motion to lift order of default

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FACTS: The Complaint alleges that J. O. Construction, Inc (JOCI) entered into a contract with Duty Free
Philippines, Inc. as actual construction went on, progress billings were made. Payments were received by
JOCI directly or through herein respondent John Tansipek, its authorized collector. Payments received by
respondent Tansipek were initially remitted to JOCI. However, payment through PNB Check in the amount
of P4,050,136.51 was not turned over to JOCI but instead, Tansipek deposited the same to his account in
PCIB. PCIB allowed the said deposit, despite the fact that the check was crossed for the deposit to
payees account only, and despite the alleged lack of authority of Tansipek to endorse said check. PCIB
refused to pay JOCI the full amount of the check despite demands made by the latter.

PCIB filed a Motion to Dismiss the Complaint. The RTC denied PCIBs Motion to Dismiss.

PCIB filed a Motion to Admit Amended Third-Party Complaint. Upon Motion, respondent Tansipek was
granted time to file his Answer to the Third-Party Complaint. He was, however, declared in default for
failure to do so. The Motion to Reconsider the Default Order was denied. Upon being declared in default,
respondent Tansipek filed a Motion for Reconsideration of the Default Order. Upon denial thereof,
Tansipek filed a Petition for Certiorari with the Court of Appeals, which was dismissed for failure to attach
the assailed Orders. Respondent Tansipeks Motion for Reconsideration with the Court of Appeals was
denied for having been filed out of time.

ISSUE: Whether or not the motion for reconsideration of the default order was the correct remedy

HELD: NO. Respondent Tansipeks remedy against the Order of Default was erroneous from the very
beginning. Respondent Tansipek should have filed a Motion to Lift Order of Default, and not a Motion for
Reconsideration pursuant to Section 3 (b), Rule 9 of the Rules of Court.

A Motion to Lift Order of Default is different from an ordinary motion in that the Motion should be verified;
and must show fraud, accident, mistake or excusable neglect, and meritorious defenses. The allegations
of (1) fraud, accident, mistake or excusable neglect, and (2) of meritorious defenses must concur.

It is important to note that a party declared in default respondent Tansipek in this case is not barred
from appealing from the judgment on the main case, whether or not he had previously filed a Motion to
Set Aside Order of Default, and regardless of the result of the latter and the appeals therefrom. However,
the appeal should be based on the Decisions being contrary to law or the evidence already presented,
and not on the alleged invalidity of the default order.

REPUBLIC VS. SANDIGANBAYAN


406 SCRA 190

DOCTRINE: Authenticity and due execution constitutes only 4 things: (1) that the document was signed;
(2) that the document complied with all the formalities under the laws; (3) that when the document was
signed, it was in the original form without any alteration; and (4) that the document was delivered.

DENIALS; NEGATIVE PREGNANT; SUMMARY JUDGMENT

FACTS: On December 17, 1991, petitioner Republic, through the PCGG, represented by the OSG, filed a
petition for forfeiture before the Sandiganbayan entitled Republic of the Philippines vs. Ferdinand E.
Marcos, represented by his Estate/Heirs and Imelda R. Marcos. In said case, petitioner sought the
declaration of the aggregate amount of US$356 million deposited in escrow in the PNB, as ill-gotten
wealth. In addition, the petition sought the forfeiture of US$25 million and US$5 million in treasury notes
which exceeded the Marcos couple's salaries, other lawful income as well as income from legitimately
acquired property.

On October 18, 1993, respondents Imelda R. Marcos, Maria Imelda M. Manotoc, Irene M. Araneta and
Ferdinand R. Marcos, Jr. filed their answer. Before the case was set for pre-trial, a General Agreement

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and the Supplemental Agreements were executed by the Marcos children and then PCGG Chairman
Magtanggol Gunigundo for a global settlement of the assets of the Marcos family. Subsequently,
respondent Marcos children filed a motion for the approval of said agreements and for the enforcement
thereof. Hearings were conducted by the Sandiganbayan on the motion to approve the
General/Supplemental Agreements.

On October 18, 1996, petitioner filed a motion for summary judgment and/or judgment on the pleadings.
Respondent Mrs. Marcos filed her opposition thereto which was later adopted by respondents Mrs.
Manotoc, Mrs. Araneta and Ferdinand, Jr. The Sandiganbayan denied petitioner's motion for summary
judgment and/or judgment on the pleadings on the ground that the motion to approve the compromise
agreement "(took) precedence over the motion for summary judgment." Respondent Mrs. Marcos filed a
manifestation on May 26, 1998 claiming she was not a party to the motion for approval of the
Compromise Agreement and that she owned 90% of the funds with the remaining 10% belonging to the
Marcos estate. After the pre-trial and the issuance of the pre-trial order and supplemental pre-trial order
dated, the case was set for trial.

After several resettings, petitioner filed another motion for summary judgment pertaining to the forfeiture
of the US$356 million. The Sandiganbayan granted petitioner's motion for summary judgment. Hence,
petitioner filed a petition for certiorari under Rule 65 arguing that the Sandiganbayan committed grave
abuse of discretion amounting to lack or excess of jurisdiction.

ISSUE: WON Summary Judgment is proper; WON respondents raised any genuine issue of fact which
would either justify or negate summary judgment.

RULING: YES. Summary Judgment is proper.

The SC finds that respondent Mrs. Marcos and the Marcos children indubitably failed to tender genuine
issues in their answer to the petition for forfeiture. A genuine issue is an issue of fact which calls for the
presentation of evidence as distinguished from an issue which is fictitious and contrived, set up in bad
faith or patently lacking in substance so as not to constitute a genuine issue for trial. Respondents'
defenses of "lack of knowledge for lack of privity" or "(inability to) recall because it happened a long time
ago" or, on the part of Mrs. Marcos, that "the funds were lawfully acquired" are fully insufficient to tender
genuine issues. Respondent Marcoses' defenses were a sham and evidently calibrated to compound and
confuse the issues.
Moreover, respondents failed to specifically deny each and every allegation contained in the petition for
forfeiture in the manner required by the rules. All they gave were stock answers like "they have no
sufficient knowledge" or "they could not recall because it happened a long time ago," and, as to Mrs.
Marcos, "the funds were lawfully acquired," without stating the basis of such assertions.

If an allegation directly and specifically charges a party with having done, performed or committed a
particular act which the latter did not in fact do, perform or commit, a categorical and express denial must
be made. Here, despite the serious and specific allegations against them, the Marcoses responded by
simply saying that they had no knowledge or information sufficient to form a belief as to the truth of such
allegations.
Such a general, self-serving claim of ignorance of the facts alleged in the petition for forfeiture was
insufficient to raise an issue. Respondent Marcoses should have positively stated how it was that they
were supposedly ignorant of the facts alleged.

Evidently, this particular denial had the earmark of what is called in the law on pleadings as a negative
pregnant, that is, a denial pregnant with the admission of the substantial facts in the pleading
responded to which are not squarely denied. It was in effect an admission of the averments it was
directed at. Stated otherwise, a negative pregnant is a form of negative expression which carries with it an
affirmation or at least an implication of some kind favorable to the adverse party. It is a denial pregnant
with an admission of the substantial facts alleged in the pleading. Where a fact is alleged with qualifying

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or modifying language and the words of the allegation as so qualified or modified are literally denied, has
been held that the qualifying circumstances alone are denied while the fact itself is admitted.

Therefore, the allegations in the petition for forfeiture on the existence of the Swiss bank deposits in the
sum of about US$356 million, not having been specifically denied by respondents in their answer, were
deemed admitted by them pursuant to Section 11, Rule 8 of the 1997 Revised Rules on Civil
Procedure: Material averment in the complaint, xxx shall be deemed admitted when not specifically
denied.

Further, when matters regarding which respondents claim to have no knowledge or information sufficient
to form a belief are plainly and necessarily within their knowledge, their alleged ignorance or lack of
information will not be considered a specific denial. An unexplained denial of information within the control
of the pleader, or is readily accessible to him, is evasive and is insufficient to constitute an effective
denial. Simply put, a profession of ignorance about a fact which is patently and necessarily within the
pleader's knowledge or means of knowing is as ineffective as no denial at all. Thus, the general denial of
the Marcos children of the allegations in the petition for forfeiture "for lack of knowledge or information
sufficient to form a belief as to the truth of the allegations since they were not privy to the transactions"
cannot rightfully be accepted as a defense because they are the legal heirs and successors-in-interest of
Ferdinand E. Marcos and are therefore bound by the acts of their father vis-a-vis the Swiss funds.

Furthermore, their opposition to the motion for Summary Judgment was not accompanied by affidavits,
depositions or admissions as required by Section 3, Rule 35 of the 1997 Rules on Civil Procedure: x x x
The adverse party may serve opposing affidavits, depositions, or admissions at least three (3) days
before hearing.
After hearing, the judgment sought shall be rendered forthwith if the pleadings, supporting affidavits,
depositions, and admissions on file, show that, except as to the amount of damages, there is no genuine
issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

The absence of opposing affidavits, depositions and admissions to contradict the sworn declarations in
the Republic's motion only demonstrated that the averments of such opposition were not genuine and
therefore unworthy of belief. In sum, mere denials, if unaccompanied by any fact which will be admissible
in evidence at a hearing, are not sufficient to raise genuine issues of fact and will not defeat a motion for
summary judgment.

A summary judgment is one granted upon motion of a party for an expeditious settlement of the case, it
appearing from the pleadings, depositions, admissions and affidavits that there are no important
questions
or issues of fact posed and, therefore, the movant is entitled to a judgment as a matter of law.

SUMMARY JUDGMENT was described as a judgment which a court may render before trial but after both
parties have pleaded. It is ordered by the court upon application by one party, supported by affidavits,
depositions or other documents, with notice upon the adverse party who may in turn file an opposition
supported also by affidavits, depositions or other documents. This is after the court summarily hears both
parties with their respective proofs and finds that there is no genuine issue between them.

Summary judgment is sanctioned in this jurisdiction by Section 1, Rule 35 of the 1997 Rules of Civil
Procedure:
SECTION 1. Summary judgment for claimant.- A party seeking to recover upon a claim, counterclaim, or
cross-claim or to obtain a declaratory relief may, at any time after the pleading in answer thereto has been
served, move with supporting affidavits, depositions or admissions for a summary judgment in his favor
upon all or any part thereof.

Summary judgment is proper when there is clearly no genuine issue as to any material fact in the action.
The theory of summary judgment is that, although an answer may on its face appear to tender issues
requiring trial, if it is demonstrated by affidavits, depositions or admissions that those issues are not

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genuine but sham or fictitious, the Court is justified in dispensing with the trial and rendering summary
judgment for petitioner

CANELAND SUGAR CORPORATION VS. ALON


533 SCRA 28

TOPIC: Negative Pregnant

FACTS: On July 15, 1999, Caneland Sugar Corporation (petitioner) filed with the Regional Trial Court
(RTC) of Silay City, Branch 40, a complaint for damages, injunction, and nullity of mortgage against the
Land Bank of the Philippines (respondent) and Sheriff Eric B. de Vera, praying for the following reliefs:
issuance of a temporary restraining order enjoining respondent and the Sheriff from proceeding with the
auction sale of petitioners property; declaration of nullity of any foreclosure sale to be held; declaration of
nullity of the mortgage constituted over petitioners property in favor of respondent; and award of
damages.
On July 21, 1999, the RTC issued an Order holding in abeyance the auction sale set on July 23, 1999, as
agreed upon by the parties. Notwithstanding said directive, another foreclosure sale was scheduled on
October 15, 1999. Per RTC Order dated October 14, 1999, the October 15 scheduled sale was held in
abeyance; but re-scheduled the sale on November 15, 1999 for the following reasons:

However, P.D. 385 provides that it shall be mandatory for government financial institution to foreclose
collaterals and/or securities for any loan, credit accommodations and/or guarantees granted by them
whenever the arrearages on such account, including accrued interest and other charges amount to at
least 20% of the total outstanding obligation as appearing in the books of the financial institution.
Moreover, no restraining order, temporary or permanent injunction shall be issued by the court against
any government financial institution in any action taken by such institution in compliance with the
mandatory foreclosure provided by said law. x x x The defendant Land Bank of the Philippines and Eric B.
De Vera, Sheriff of this Court, are hereby authorized to proceed with the extrajudicial foreclosure sale on
November 15, 1999.

Petitioner filed a Motion for Reconsideration of the trial courts Order, but this was denied. Petitioner then
filed with the Court of Appeals (CA) a Petition for Certiorari and Prohibition with Injunction which it denied
due course and dismissed for lack of merit. Petitioner sought reconsideration of the Decision, which was
eventually denied by the CA. Hence, the present Petition for Review on Certiorari under Rule 45 of the
Rules of Court

ISSUE: Whether the CA erred in finding that the RTC did not commit grave abuse of discretion in not
enjoining the extrajudicial foreclosure of the properties subject of this case.

HELD: Without first resolving the foregoing issue, the Court finds that the petition should be denied for the
sole reason that the act sought to be enjoined by petitioner is already fait accompli. In Transfield
Philippines, Inc. v. Luzon Hydro Corporation, the Court held that

[I]njunction would not lie where the acts sought to be enjoined have already become fait accompli or an
accomplished or consummated act. In Ticzon v. Video Post Manila, Inc. this Court ruled that where the
period within which the former employees were prohibited from engaging in or working for an enterprise
that competed with their former employer the very purpose of the preliminary injunction has expired, any
declaration upholding the propriety of the writ would be entirely useless as there would be no actual case
or controversy between the parties insofar as the preliminary injunction is concerned.

Records show that the foreclosure sale which petitioner sought to be enjoined by the RTC has already
been carried out by the Sheriff, and in fact, a Certificate of Sale dated June 26, 2000 was issued to
respondent. There is, therefore, no more actual case or controversy between the parties insofar as the
RTCs refusal to enjoin the sale is concerned, and any resolution by the Court of the impropriety or

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propriety of the RTCs refusal to issue any restraining or injunctive relief against the foreclosure sale will
serve no purpose but merely lend further addle to Civil Case pending before the RTC.

Petitioner does not dispute its loan obligation with respondent. Petitioners bone of contention before the
RTC is that the promissory notes are silent as to whether they were covered by the Mortgage Trust
Indenture and Mortgage Participation on its property. It does not categorically deny that these promissory
notes are covered by the security documents. These vague assertions are, in fact, negative pregnants,
i.e., denials pregnant with the admission of the substantial facts in the pleading responded to which are
not squarely denied. As defined in Republic of the Philippines v. Sandiganbayan, a negative pregnant is a
form of negative expression which carries with it an affirmation or at least an implication of some kind
favorable to the adverse party. It is a denial pregnant with an admission of the substantial facts alleged in
the pleading. Where a fact is alleged with qualifying or modifying language and the words of the allegation
as so qualified or modified are literally denied, has been held that the qualifying circumstances alone are
denied while the fact itself is admitted.

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