Rule 2.
Cause of Action action because there was no perfected contract,
1. Pioneer vs Guadiz. GR No. 156848. Oct 11,
2007
Facts:
On 16 January 1998, Antonio D. Todaro (Todaro)
filed a complaint for sum of money and damages
against Pioneer International, Ltd. (PIL), Pioneer
Concrete Philippines, Inc. (PCPI), Pioneer
Philippines Holdings, Inc. (PPHI), John G.
McDonald (McDonald), and Philip J. Klepzig
(Klepzig).
Todaro alleged that PIL is a corporation duly
organized under Australian laws, while PCPI and
PPHI are corporations duly organized under
Philippine laws. PIL is engaged in the ready-mix
and concrete aggregates business. PIL
established PPHI as the holding company of the
stocks of its operating company in the
Philippines, PCPI. McDonald is the Chief
Executive Officer of PIL’s Hong Kong office while
Klepzig is the President and Managing Director of
PPHI and PCPI. For his part, Todaro further
alleged that he was the managing director of
Betonval Readyconcrete, Inc. (Betonval) from
June 1975 up to his resignation in February 1996.
According to Todaro, PIL contacted him in May
1996 and asked if he could join it in establishing
a pre-mixed concrete plant and in overseeing its
operations in the Philippines. Todaro confirmed
his availability and expressed interest in joining
PIL.
PIL filed, by special appearance, a motion to
dismiss Todaro’s complaint. PIL’s co-defendants,
PCPI, PPHI, and Klepzig, filed a separate motion
to dismiss. PIL asserted that the trial court has no
jurisdiction over PIL because PIL is a foreign
corporation not doing business in the Philippines.
PIL also questioned the service of summons on
it. Assuming arguendo that Klepzig is PIL’s agent
in the Philippines, it was not Klepzig but De Leon
who received the summons for PIL. PIL further
stated that the NLRC, and not the trial court, has
jurisdiction over the subject matter of the action.
It claimed that assuming that the trial court has
jurisdiction over the subject matter of the action,
the complaint should be dismissed on the ground
of forum non-conveniens. Finally, PIL maintained
that the complaint does not state a cause of
and no personal judgment could be rendered by
the trial court against PIL because PIL is a foreign
corporation not doing business in the Philippines
and there was improper service of summons on
PIL.
Trial court ruled in favor of Todaro. The trial court
stated that the merits of a motion to dismiss a
complaint for lack of cause of action are tested on
the strength of the allegation of facts in the
complaint. The trial court found that the
allegations in the complaint sufficiently establish
a cause of action. CA affirmed.
Issue: W/N the trial court has jurisdiction – Yes
Held:
Section 2, Rule 2 of the 1997 Rules of Civil
Procedure states that a cause of action is the act
or omission by which a party violates a right of
another.
The general rule is that the allegations in a
complaint are sufficient to constitute a cause of
action against the defendants if, admitting the
facts alleged, the court can render a valid
judgment upon the same in accordance with the
prayer therein. In the present case, the summary
of Todaro’s allegations states that PIL, PCPI,
PPHI, McDonald, and Klepzig did not fulfill their
contractual obligation to employ Todaro on a
permanent basis in PIL’s Philippine office.
Todaro’s allegations are thus sufficient to
establish a cause of action.
On the issue of lack of cause of action – It is well-
settled that the merits of a motion to dismiss a
complaint for lack of cause of action is tested on
the strength of the allegations of fact contained in
the complaint and no other.
It should be emphasized that the presence of a
cause of action rests on the sufficiency, and not
on the veracity, of the allegations in the complaint.
The veracity of the allegations will have to be
examined during the trial on the merits. In
resolving a motion to dismiss based on lack of
cause of action, the trial court is limited to the four
corners of the complaint and its annexes. It is not
yet necessary for the trial court to examine the
truthfulness of the allegations in the complaint.
Such examination is proper during the trial on the
merits.
1997 Rules of Civil Procedure does not mention
forum non-conveniens as a ground for filing a
motion to dismiss. The propriety of dismissing a
case based on forum non-conveniens requires a
factual determination; hence, it is more properly
considered a matter of defense.
As to the first sub-issue, PIL insists that its sole
act of "transacting" or "doing business" in the
Philippines consisted of its investment in PPHI.
Under Philippine law, PIL’s mere investment in
PPHI does not constitute "doing business."
However, we affirm the lower courts’ ruling and
declare that, based on the allegations in Todaro’s
complaint, PIL was doing business in the
Philippines when it negotiated Todaro’s
employment with PPHI.
Finally, the phrase "doing business in the
Philippines" in the former version of Section 12,
Rule 14 now reads "has transacted business in
the Philippines." The scope is thus broader in that
it is enough for the application of the Rule that the
foreign private juridical entity "has transacted
business in the Philippines."
Thus, we rule that PIL transacted business in the
Philippines and Klepzig was its agent within the
Philippines. However, there was improper service
of summons on PIL since summons was not
served personally on Klepzi
The case is remanded to the trial court for proper
service of summons and trial.
2. Galicia vs Manlinquez. GR No. 155785. April
13, 2008
Facts:
The present case originated from a complaint
filed with the RTC-Romblon by herein petitioners,
in their capacity as heirs of Juan Galicia (Juan),
against Milagros Rico-Glori (Milagros) and her
tenants Dominador Musca and Alfonso Fallar, Jr.
for Recovery of Possession and Ownership,
Annulment of Title, Documents and Other
Papers.
Petitioners contended that their predecessor,
Juan, was the true and lawful owner of a parcel of
land; after years of possession of the said land,
Juan was driven away from the property through
force by the heirs of a certain Ines Ramirez (Ines),
one of whom is defendant Milagros; because of
poverty and lack of knowledge, Juan was not able
to assert his right to the said property but he
informed his children that they own the above-
described parcel of land; and the continuous
possession of the property by Milagros and her
co-defendants, tenants has further deprived
herein petitioners of their right over the same.
Defendants denied the allegations of petitioners
in their complaint asserting that Juan was not the
owner and never took possession of the disputed
lot.
Defendants were declared in default. Petitioners
ex-parte evidence. RTC ruled in favor of
petitioners.
RTC received a Motion for Leave of Court to
Intervene with an attached Answer-in-
Intervention filed by the compulsory heirs of Ines,
among whom are herein respondents, who are
also co-heirs of defendant Milagros. The
intervenors contended that the subject parcel of
land forms part of the estate of Ines which is yet
to be partitioned among them; the outcome of
Civil Case No. OD-306, one way or the other,
would adversely affect their interest; their rights
would be better protected in the said civil case;
and their intervention would not unduly delay, or
in any way prejudice the rights of the original
parties.
RTC denied the said motion to intervene on the
ground that it has already rendered judgment and
under Section 2, Rule 19 of the Rules of Court,
the motion to intervene should have been filed
before rendition of judgment by the trial court.
Respondents filed a petition for annulment of
judgment with the CA anchored on grounds of
lack of jurisdiction over their persons and property
and on extrinsic fraud. CA granted the petition.
Issue: W/N the motion to intervene should be
allowed – Yes
Held:
The rule on intervention, like all other rules of
procedure, is intended to make the powers of the
Court fully and completely available for justice. It
is aimed to facilitate a comprehensive
adjudication of rival claims overriding
technicalities on the timeliness of the filing
thereof. Indeed, in exceptional cases, the Court
has allowed intervention notwithstanding the
rendition of judgment by the trial court.
Since it is not disputed that herein respondents
are compulsory heirs of Ines who stand to be
affected by the judgment of the trial court, the
latter should have granted their Motion to
Intervene and should have admitted their
Answer-in-Intervention.
Section 7, Rule 3 of the Rules of Court, defines
indispensable parties as parties-in-interest
without whom there can be no final determination
of an action. As such, they must be joined either
as plaintiffs or as defendants. The general rule
with reference to the making of parties in a civil
action requires the joinder of all necessary parties
where possible and the joinder of all
indispensable parties under any and all
conditions, their presence being a sine qua non
for the exercise of judicial power. It is precisely
when an indispensable party is not before the
court that the action should be dismissed. 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.
As to the question of whether the trial court
acquired jurisdiction over the persons of herein
respondents, the Court has held that the filing of
motions seeking affirmative relief, such as, to
admit answer, for additional time to file answer,
for reconsideration of a default judgment, and to
lift order of default with motion for
reconsideration, are considered voluntary
submission to the jurisdiction of the court.
3. Genesis Investment vs Ebarasabal. GR No.
181622. Nov 20, 2013
Facts:
On November 12, 2003, herein respondents filed
against herein petitioners a Complaint for
Declaration of Nullity of Documents, Recovery of
Shares, Partition, Damages and Attorney's Fees
with RTC-Cebu.
Petitioners filed a Motion to Dismiss contending
that the RTC has no jurisdiction to try the case on
the ground that, as the case involves title to or
possession of real property or any interest therein
and since the assessed value of the subject
property does not exceed ₱20k, the action falls
within the jurisdiction of the MTC. RTC granted
MtoD.
Respondents filed a Motion for Partial
Reconsideration, arguing that their complaint
consists of several causes of action, including
one for annulment of documents, which is
incapable of pecuniary estimation and, as such,
falls within the jurisdiction of the RTC. RTC
granted, held that it is incapable of pecuniary
estimation. CA affirmed.
Issue: W/N RTC has jurisdiction – Yes
Held:
It is true that one of the causes of action of
respondents pertains to the title, possession and
interest of each of the contending parties over the
contested property, the assessed value of which
falls within the jurisdiction of the MTC. However,
a complete reading of the complaint would readily
show that, based on the nature of the suit, the
allegations therein, and the reliefs prayed for, the
action is within the jurisdiction of the RTC.
As stated above, it is clear from the records that
respondents' complaint was for "Declaration of
Nullity of Documents, Recovery of Shares,
Partition, Damages and Attorney's Fees." In filing
their Complaint with the RTC, respondents
sought to recover ownership and possession of
their shares in the disputed parcel of land by
questioning the due execution and validity of the
Deed of Extrajudicial Settlement with Sale as well
as the Memorandum of Agreement entered into
by and between some of their co-heirs and herein
petitioners. Aside from praying that the RTC
render judgment declaring as null and void the
said Deed of Extrajudicial Settlement with Sale
and Memorandum of Agreement, respondents
likewise sought the following: (1) nullification of
the Tax Declarations subsequently issued in the
name of petitioner Cebu Jaya Realty, Inc.; (2)
partition of the property in litigation; (3)
reconveyance of their respective shares; and (3)
payment of moral and exemplary damages, as
well as attorney's fees, plus appearane fees.
Clearly, this is a case of joinder of causes of
action which comprehends more than the issue of
partition of or recovery of shares or interest over
the real property in question but includes an
action for declaration of nullity of contracts and
documents which is incapable of pecuniary
estimation.

In determining whether an action is one the

subject matter of which is not capable of
pecuniary estimation, this Court has adopted the
criterion of first ascertaining the nature of the
principal action or remedy sought. If it is primarily
for the recovery of a sum of money, the claim is
considered capable of pecuniary estimation, and
whether jurisdiction is in the municipal courts or in
the courts of first instance would depend on the
amount of the claim. However, where the basic
issue is something other than the right to recover
a sum of money, where the money claim is purely
incidental to, or a consequence of, the principal
relief sought, this Court has considered such
actions as cases where the subject of the
litigation may not be estimated in terms of money,
and are cognizable by courts of first instance [now
Regional Trial Courts].

Moreover, it is provided under Section 5 (c), Rule

2 of the Rules of Court that where the causes of
action are between the same parties but pertain
to different venues or jurisdictions, the joinder
may be allowed in the RTC provided one of the
causes of action falls within the jurisdiction of said
court and the venue lies therein.