Rule 15 - Motions

HEARING ON MOTIONS:

1. China Banking Corp. v. Abel, G.R. No. 182547, 10 January 2011, 639 SCRA 134

FACTS:
In a foreclosure sale, China Bank acquired title over respondent Abel’s property at Quezon City, she
having failed to pay her loan. To enforce its ownership, China Bank filed with the RTC an ex parte petition for
the issuance of a writ of possession in its favor.
On October 2, 2003 the RTC rendered a decision, granting China Banks petition and directing the
issuance of a writ of possession over the property in its favor. Abel appealed from this decision but lost her
appeal in the Court of Appeals. She filed a petition for review but failed to. She filed a motion for
reconsideration and a second similar motion without success. The Courts judgment became final and
executory and, eventually, the record of her case was remanded to the RTC for execution.
China Bank filed a motion for execution with the RTC, setting it for hearing on June 8, 2007. On June 7,
2007 Abel filed a motion to cancel and reset the hearing on the ground that she needed more time to
comment on or oppose the banks motion. On June 8, 2007 the RTC granted her the 10-day period she asked
but from notice.

On June 19, 2007, noting Abel’s failure to file her opposition to or comment on the motion for
execution, the RTC issued an Order granting China Banks motion. After being served with the notice to vacate,
Abel filed on June 21, 2007 an omnibus urgent motion for reconsideration and to admit her opposition to the
banks motion for execution. She set her urgent motion for hearing on June 29, 2007. On June 22, 2007,
however, the day after receiving her motion, the RTC denied the same for lack of merit.

On June 25, 2007 the sheriff implemented the writ against Abel and placed China Bank in possession
of the subject property. On even date, Abel filed a petition for certiorari with the CA, assailing the RTCs June 19
and 22, 2007 Orders. On July 2, 2007, a Saturday, Abel took back possession of the premises on the strength of
a Temporary Restraining Order (TRO) that the CA issued on June 29, 2007.

On January 3, 2008 the CA rendered a decision setting aside the assailed orders of the RTC. China
Bank moved for its reconsideration but the CA denied this in an April 9, 2008 Resolution . The CA ruled that
the RTC committed grave abuse of discretion in granting the banks motion for execution, noting that the latter
court gave Abel 10 days from notice of its order, not 10 days from the issuance of such order, within which to
file her opposition. Parenthetically, the shorter period was what she asked for in her motion for
postponement. But there was no proof, said the CA, as to when Abel had notice of the RTCs June 8, 2007 Order
as to determine when the 10-day period actually began to run.

China Bank thus filed this petition for review on certiorari against the CA decision and resolution
denying its motion for reconsideration.

ISSUE: WON the CA erred in setting aside the assailed RTCs Orders on the ground of failure to
observe due process respecting Abel’s right to be heard on the banks motion for execution.
HELD: The CA erred in attributing grave abuse of discretion to the RTC. Although the RTC caused the
issuance of the writ of execution before it could establish that Abel’s 10 days from notice within which to file
her opposition had lapsed, she filed with that court on June 21, 2007 an urgent motion for reconsideration
with her opposition to the motion for execution attached. The Court, acting on her motion, denied it on the
following day, June 22, 2007. Any perceived denial of her right to be heard on the banks motion for execution
had been cured by her motion for reconsideration and the RTCs action on the same.

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 True, Abel gave notice to China Bank that she would submit her motion for reconsideration for the
RTCs consideration on June 29, 2007 but that notice is for the benefit of the bank, not for her, that it may be
heard on the matter. She cannot complain that the court acted on her motion more promptly than she
expected especially since she actually offered no legitimate reason for opposing the issuance of a writ of
possession in the banks favor.

Orders for the issuance of a writ of possession are issued as a matter of course upon the filing of the
proper motion and approval of the corresponding bond since no discretion is left to the court to deny it. The
RTCs issuance of such writ conformably with the express provisions of law cannot be regarded as done
without jurisdiction or with grave abuse of discretion. Such issuance being ministerial, its execution by the
sheriff is likewise ministerial. In truth, the bank has failed to take possession of the property after more than
seven years on account of Abel’s legal maneuverings.

OMNIBUS MOTION RULE:

1. Cruz v. Manila International Airport Authority, G.R. No. 184732, 9 September 2013,
705 SCRA 275

FACTS:
 Petitioner executed a Contract of Lease with MIAA over a property, in order to establish
a commercial arcade for sublease to other businesses.
 She averred that MIAA failed to inform her that part of the leased premises is subject to
an easement of public use since the same was adjacent to Parañaque River.
 As a result, she was not able to obtain a building permit as well as a certificate of
electrical inspection, leading her consequent failure to secure an electrical connection for
the entire leased premises.
 Due to lack of electricity, Cruz’s tenants did not pay rent; hence, she was unable to pay
her own rental obligations to MIAA.
 Further, since some of Cruz’s stalls were located in the easement area, the MMDA
demolished them, causing her to suffer actual damages.
 Thus, Cruz send MIAA her rental computation; however, instead of accepting Cruz’s
payment, MIAA sent a letter terminating the lease contract.
 Petitioner then filed before the RTC Pasig a complaint for breach of contract,
consignation, and damages against MIAA.
 MIAA filed a MD hinged on the following grounds:
o Violation of the certification requirement against forum shopping under Sec. 5, Rule
7 given that the lease contract subject of the Pasig case is the same actionable
document subject of the Manila Case which is a complaint for partial annulment of
contract also filed by petitioner before RTC Manila; and
o Improper venue, since in the complaint for annulment of contract, as well as the
verification/certification and annexes attached thereto, it is indicated that petitioner is
a resident of San Miguel, Manila.

RTC: issued an order dismissing petitioner’s complaint for breach of contract due to forum
shopping since both the Pasig and Manila cases are founded on the same actionable document
between the same parties.
 Petitioner’s MR was denied. Thus, petitioner filed a notice of appeal.
CA: Dismissed the Pasig case. While petitioner did not commit forum shopping, the Pasig case
remained dismissible on the ground of improper venue as petitioner was bound be her judicial
admission that her residence was actually Manila and not is San Juan.
 Petitioner’s MR was denied. Hence, this petitioner.

ISSUE: WON petitioner’s appeal should be dismissed on the basis of improper venue.
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  Petitioner contends that the in ruling on the issue of improper venue, the CA practically
allowed MIAA to pursue a lost appeal, although the latter did not file a notice of appeal
within the proper reglementay period nor pay the prescribed docket fees.
 MIAA maintained that despite raising the issue on improper venue before the CA, the
RTC did not categorically rule on the said issue. As such, it claimed that it could raise the
foregoing ground as one of the issue before the CA.

HELD:
Jurisprudence dictates that the appellee’s role in the appeal process is confined only to the task of
refuting the assigned errors interposed by the appellant. Since the appellee (defending party) is
not the party who instituted the appeal and accordingly has not complied with the procedure
prescribed therefor, he merely assumes a defensive stance and his interest solely relegated to the
affirmance of the judgment appealed from. Keeping in mind that the right to appeal is essentially
statutory in character, it is highly erroneous for the appellee to either assign any error or seek any
affirmative relief or modification of the lower court’s judgment without interposing its own
appeal.

In the case at bar, the Court finds that the CA committed a reversible error in sustaining the
dismissal of the Pasig case on the ground of improper venue because the same was not an error
raised by Cruz who was the appellant before it. Pursuant to the abovementioned principles, the
CA cannot take cognizance of MIAA’s position that the venue was improperly laid since, being
the appellee, MIAA’s participation was confined to the refutation of the appellant’s assignment of
errors. As MIAA’s interest was limited to sustaining the RTC-Pasig City’s judgment, it cannot,
without pursuing its own appeal, deviate from the pronouncements made therein. In particular,
records bear out that the RTC-Pasig City, while granting MIAA’s motion to dismiss, found the
latter’s argument on improper venue to be erroneous. Hence, given that the said conclusion was
not properly contested by MIAA on appeal, the RTC-Pasig City’s ruling on the matter should
now be deemed as conclusive. Corollary, the CA should not have taken this ground into
consideration when it appreciated the case before it. By acting otherwise, it therefore committed
a reversible error, which thereby warrants the reversal of its Decision.

Petitioner granted. CA decision set aside.

Rule 16 - Motion to Dismiss

1. Equitable PCIB v. Court of Appeals, G.R. No. 143556, 16 March 2004, 425 SCRA
544

FACTS: On September 19, 1995, Sta. Rosa Mining Co., Inc., (hereafter Sta. Rosa), respondent
herein, filed before the Regional Trial Court of Quezon City, Branch 222, a complaint for sum of
money and damages against petitioners Philippine Commercial International Bank (now
Equitable-PCIB), Rafael B. Buenaventura, the bank’s former President, and Cynthia F. Lota (Lota,
for brevity), the manager of the Cubao Branch. Sta. Rosa alleged that it lost income opportunity
from its joint venture with Sa Amin sa San Jose Panganiban, Inc. (hereafter Sa Amin).
In its complaint, Sta. Rosa claimed that (1) On October 21, 1993, Sta. Rosa opened a savings
account with petitioner PCIB Cubao branch; (2) On October 22, 1993, it conveyed its interest to
convert its savings account into savings/current/time deposit accounts; (3) Sta. Rosa sought to
obtain from petitioner PCIB checkbooks but was refused allegedly due to a restraining order
from SEC; (4) A verification with the SEC shows that a copy of the restraining order was received
by PCIB only on October 27, 1993, 1:45 p.m.; and (5) The refusal of petitioners to issue
checkbooks and to allow release of the funds prejudiced Sta. Rosa’s stockholders and the
livelihood and social development projects of their joint venture partner, Sa Amin.

On October 6, 1995, petitioners filed a Motion to Dismiss on the grounds that Sta. Rosa was
guilty of forum shopping and that the complaint stated no cause of action. Petitioners averred
that Sta. Rosa was guilty of forum shopping because the amount involved in the case was also
the issue in Civil Case No. 6014, entitled "Sa Amin Sa Jose Panganiban, Inc. v. Sta. Rosa Mining
Co., Inc." before Regional Trial Court of Daet, Camarines Norte, Branch 39. Hence, it should have
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secured whatever relief before the RTC of Daet. Also, according to petitioners, Sta. Rosa had no
cause of action because as judgment debtor in Civil Case No. 6014, Sta. Rosa has lost all rights
over the funds deposited under Savings Account No. 0453-52672-1 since the same had already
been garnished by RTC, Branch 39, in favor of the judgment creditor, Sa Amin.

In an Order5 dated November 7, 1995, the RTC of Quezon City denied herein petitioners’
motion to dismiss. It noted that whether there was malice or not in their alleged defiance of the
Daet court’s garnishment order which would entitle Sta. Rosa to damages could be established
in the course of the trial. It also declared that Sta. Rosa did not engage in forum shopping to
obtain a favorable opinion from the other court because when the Court of Appeals upheld the
orders of garnishment of the Daet court directing petitioners to release the money in favor of Sa
Amin, Sta. Rosa as judgment debtor in Civil Case No. 6014, in effect was able to obtain a
favorable judgment which settled the case once and for all, enabling Sta. Rosa to resume its
business. It likewise disagreed with petitioners’ claim that they did not violate any rights of Sta.
Rosa. It added that defiance of the garnishment order had caused inconvenience not only to Sa
Amin but also to Sta. Rosa, considering that the garnishment order would indirectly benefit Sta.
Rosa.

Petitioners then filed a petition for certiorari, prohibition and mandamus before the Court of
Appeals, which seasonably set aside the order of default of the lower court and directed the
latter to admit petitioners’ Answer and proceed to hear the case on the merits, thus:

WHEREFORE, the order of the public respondent dated March 4, 1998 is RESCINDED AND
AVOIDED. Accordingly, the respondent judge, or whoever is now acting in his place and stead, is
directed to grant the petition for relief filed by the petitioners, admit the petitioners’ answer,
and thereafter proceed to hear the case on the merits. Without costs.

SO ORDERED.13

The CA reasoned that default judgments are frowned upon, so that courts should be liberal in
setting aside orders of default. It disagreed with the lower court’s ruling that petitioners’ motion
for reconsideration was dilatory, for having been set for hearing one month and a half after its
filing, and also pro forma, for merely reiterating the grounds already set forth in the motion to
dismiss. The CA declared that a period of one and a half months is not unreasonable
considering the subject matter of the case and that the motion was filed within the
reglementary period, albeit on the last day for which the Answer should have been filed. It
noted that while the motion reiterated grounds previously relied upon, it also set forth further
pertinent facts and plausible arguments relative to Civil Case No. 6014, hence it cannot be
deemed pro forma, much less intended to delay the inexorable march of events in this case.

ISSUE: Whether or not Civil Case No. Q-95-25073 should be dismissed for failure to state a
cause of action.

HELD: NO. Petitioners contend that Sta. Rosa has no cause of action against them as there was
no bad faith on their part when they refused to release the funds to Sta. Rosa since they were
enjoined by the SEC from releasing the funds. Further, they were willing to release the funds in
compliance with the Order of the Daet court after the denial of their petition for certiorari by
the Court of Appeals were it not for the motion for reconsideration filed by SEC, among others,
which prevented them from doing so.

Sta. Rosa argues that it has a cause of action for damages against petitioners as the bank’s
Cubao Branch Manager, Cynthia Lota, had maliciously misrepresented that she received the SEC
TRO on October 25, 1993 when upon verification with the SEC, it turned out that a copy of the
order was received by Lota only on October 27, 1993. Hence, for refusing to allow the
withdrawal of funds deposited with petitioners, Sta. Rosa avers that its joint venture agreement
with Sa Amin was prejudiced and they failed to realize the expected profits.

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When a motion to dismiss is grounded on the failure to state a cause of action, a ruling thereon
should be based only on the facts alleged in the complaint. The rule is that only the allegations
in the complaint may properly be considered in ascertaining the existence of a cause of action.
Lack of cause of action must appear on the face of the complaint, and its existence may be
determined only by the allegations of the complaint. Consideration of other facts is out of the
question, and any attempt to prove extraneous circumstances is not allowed. Hence, the test of
sufficiency of the facts found in a complaint as constituting a cause of action is whether or not,
admitting the facts alleged, the court can render a valid judgment upon the same in accordance
with the prayer in the complaint.

Sta. Rosa’s claims might be entitled to relief because the allegations would suffice to constitute
a cause of action against petitioners. That petitioners have a valid defense is another matter. At
any rate, matters such as the propriety of refusal to release the funds by petitioners and the
actual date of receipt of the restraining order, among others, are matters for trial. They require
evidentiary proof and support that can be better threshed out not upon a motion to dismiss but
in a full blown trial on the merits. These matters, indeed, would not yet go into the question of
the absence of a cause of action as a ground to dismiss.

2. Aldemita v. Heirs of Silva, G.R. No. 166403, 2 November 2006, 506 SCRA 607

Aldemita v Heirs of Silva (2006)

Petitioner: BENZON ALDEMITA
Respondents: HEIRS OF MELQUIADES SILVA, represented by RAMON VILLORDON, JR
Ponente: J. Austria-Martinez

FACTS:
 A Complaint for Quieting of Title was filed with the RTC by the Heirs of Melquiades Silva,
represented by Ramon G. Villordon, Jr., against the Heirs of Dionisia Vda. De Zabate
(represented by Emelia Deiparine and Benzon O. Aldemita), involving Lot 11330 of Pcs-
945.
 During the pre-trial, the parties made the following stipulations of facts and/or
admissions, to wit:
1) [Petitioner] Aldemita admitted that Lot 11330 has been registered in the name
of Melquiades Silva as shown by Transfer Certificate No. T-18993 of the Registry of
Deeds and has been covered by Tax Declaration No. 25845-R also in the name of
Melquiades Silva;
2) [Petitioner] Aldemita also admitted that the [respondents] in this case have
been the ones in actual physical possession of the lot, except a 2,000-square-meter area
which said he is claiming to be possessed by him;
3) [Petitioner] Aldemita admitted, too, that the document "Kalig-onan sa Palit”
(Exhibit 1), purportedly executed on March 15, 1949 by Melquiades Silva in favor of Vda.
De Zabate involving the land in question, is actually a forged document. He contends,
however that another document, the "Kalig-onan sa Panagpalit nga Dayon" (Exhibit 2)
was also executed by Melquiades Silva in favor of Vda. De Zabate and that the latter was
confirmed by Proferia Silva and Emeliana Zabate Paran in a Deed of Confirmation of
Previous Deed of Sale executed on February 20, 1979.
 The RTC appointed the PNP Regional Crime Laboratory Office VII as commissioner of the
court for the purpose of determining whether the purported signature of Melquiades
Silva in Exhibit 1 and that of Porferia Silva in Exhibit 2.
 The parties manifested through their respective counsel that they would submit the case
for decision without need of trial especially that the findings embodied in the

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 commissioner’s report (that the signature of Silva was indeed forged) have already been
considered as the findings of facts in this case.
 After Aldemita filed a Position Paper with the Court, his counsel Atty. Manuel Paradela
filed a Motion To Withdraw As Counsel. Immediately thereafter, the new counsel for
petitioner Aldemita, Atty. Rodolfo Ugang, Sr., entered his appearance and filed a Motion
to Dismiss for lack of cause of action.
 The Motion averred in main that the respondents should first be declared as heirs of
Melquiades Silva in a special proceeding before they can be considered as real parties-in-
interest to institute the action in this case.
 The RTC denied the Motion for being belatedly filed. The Court also recognized the heirs of
Melquiades Silva as the real parties in interest who could institute an action for quieting of
title. Meanwhile, believing the Silva’s signature had been forged, the documents
denominated as "Kalig-onan Sa Palit" and "Kalig-onan sa Panagpalit nga Dayon," and the
Deed of Confirmation of Previous Deed of Sale were all declared to be null and void.
 The CA affirmed the Decision of the RTC in toto. Hence, the instant Petition.

ISSUE:
WON the evidence were required to prove the authenticity of the documents "Kalig-onan Sa
Palit" and "Kalig-onan sa Panagpalit nga Dayon," and the Deed of Confirmation of Previous Deed
of Sale - No
Ratio:
Aldemita: "Kalig-onan sa Panagpalit nga Dayon" which purports to be a deed of absolute sale
qualifies as an ancient document under Section 21 of Rule 132, and, hence, evidence of
authenticity is not necessary. In view of this, the property in question thus transferred to Emilia
Deiparine as successor-in-interest of Vda. De Zabate. Aldemita then predicates his title by virtue
of The Deed of Sale executed by Emilia Deiparine in his favor.
1. Exhibit 2 cannot be considered an ancient document.
 An ancient document is one that is (1) more than 30 years old, (2) found in the proper
custody, and (3) unblemished by any alteration or by any circumstance of suspicion. It must
on its face appear to be genuine.
 During the pre-trial of the case, the parties agreed to submit the questioned documents to a
commissioner for the purpose of determining whether the purported signatures of
Melquiades Silva in "Kalig-onan sa Panagpalit nga Dayon" and Porferia Silva in Deed of
Confirmation of Previous Deed of Sale are genuine. After the appointed commissioner
submitted his report finding the foregoing signatures as forgeries, the parties manifested
through their respective counsel to submit the case for decision without need of trial since
the findings embodied in the report have already been considered as findings of facts in the
case. Aldemita cannot now spin around and question the findings of the commissioner,
because he agreed that these findings shall be considered as the findings of fact of the case
without necessity of a trial.
2. Moreover, the mere fact that the document designated as "Kalig-onan sa Panagpalit nga
Dayon" (Exhibit 1) would be considered as an ancient document accordingly being more than
thirty (30) years already, it does not follow that its due execution and authenticity need not be
proven considering that in this case, said document is not genuine and is a product of forgery.
Hence, Aldemita should have presented evidence to prove the due execution and authenticity
of the said document which he failed to do so.
 Even the Deed of Confirmation of Previous Deed of Sale purportedly executed by Porferia
Silva and Emiliana Zabate Paran, having likewise reported by the commissioner document
examiner Romeo Varona, that the signature of Porferia Silva was forged, said document has
no legal effect and has not confirmed anything.

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Other Issue:
WON the heirs of Silva were real parties-in-interest who could institute the action in this case –
YES
1. Following Section 1(g), Rule 16 of the Rules of Court, Aldemita’s Motion to Dismiss should
have been filed within the time for but before filing the answer to the complaint or pleading
asserting a claim. As it appears, the motion was filed in the RTC after the case has been
submitted for decision.
2. According to Section 1, Rule 9 of the Rules of Court, only the following defenses are not
waived even if not raised in a motion to dismiss or in the answer: (a) lack of jurisdiction over the
subject matter; (b) litis pendentia; (c) res judicata; and (d) prescription on the action. Failure to
state a cause of action is not an exception in said Rule. Thus, under Section 1, Rule 16, Aldemita
is deemed to have waived this ground and cannot now raise it after the case in the RTC had
been submitted for decision or on appeal to the CA.
3. A reading of the Petition for Quieting of Title readily shows that such pleading states a cause
of action. A cause of action, which is an act or omission by which a party violates the right of
another, has these elements:
1) the legal right of the plaintiff;
2) the correlative obligation of the defendant to respect that legal right; and
3) an act or omission of the defendant that violates such right.19
Here, the respondents alleged that they are the heirs of the late Melquiades Silva and are thus
the true owners of a parcel of land registered in the name of the latter; that the private
documents allegedly executed by the late Melquiades Silva in favor of the predecessors-in-
interest of the Aldemita are forged documents and that the existence of these documents casts
a cloud over the title of the respondents as owners of the property.
4. There are well-recognized exceptions to the rule that the allegations are hypothetically
admitted as true and inquiry is confined to the face of the complaint. Examples are whenever
there is no hypothetical admission of the veracity of allegations if their falsity is subject to
judicial notice, or if such allegations are legally impossible, or if these refer to facts which are
inadmissible in evidence, or if by the record or document included in the pleading these
allegations appear unfounded. Also, inquiry is not confined to the complaint if there is evidence
which has been presented to the court by stipulation of the parties, or in the course of hearings
related to the case. However, none of the exceptions are present in the instant case.
5. During the pre-trial, Aldemitadid not question the capacity of the Heirs of Melquiades Silva to
sue; nor did he question the representation of Ramon G. Villordon, Jr. as administrator of the
estate of the deceased. In fact, Aldemita, in his Pre-Trial Brief delimited the issues only to: (1)
whether the ancient documents are valid; and (2) whether the various transactions are valid. It
is not disputed that the parties manifested to the RTC that they were submitting the case
without the need of trial. Aldemita did not complain in the RTC about the capability of the Heirs
of Melquiades Silva in his Position Paper. It is only after the case had already been submitted for
decision of the RTC that the issue on the capacity of the Heirs was raised through a new
counsel.
6. At any rate, what is established in this case is that petitioner does not have any right to the
subject property and that the Heirs of Melquiades Silva are entitled thereto. As to whether the
persons enumerated in the complaint are actually the heirs may still be threshed out in the
proper proceeding for declaration of heirs and settlement of the Estate of said decedent.
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 3.Westmont Bank v. Funai Phils. Corp., G.R. Nos. 175733 & 180162, 8 July
2015,
762 SCRA 82

FACTS: Respondents Funai Philippines Corporation (Funai) and Spouses Antonio and Sylvia
Yutingco (Sps. Yutingco) obtained loans from Westmont Bank (Westmont), now United
Overseas Bank Phils.secured by several promissory notes (PNs) with different maturity
dates. The PNs commonly provide that in case the same are referred to an attorney-at-law
or a collection agency, or a suit is instituted in court for collection, Sps. Yutingco will be
liable to pay twenty percent (20%) of the total amount due as attorney's fees, exclusive of
costs of suit and other expenses.

However, Funai and Sps. Yutingco (original defendants) defaulted in the payment of the said
loan obligations when they fell due, and ignored Westmont's demands for payment. Hence,
the Westmont filed a complaint for sum of money, with prayer for the issuance of a writ of
preliminary attachment before the RTC.

After an ex-parte hearing, the RTC issued a Writ of Preliminary Attachment ordering the
attachment of the personal and real properties of the original defendants. Furthermore, the
RTC issued another Order, directing the attachment of properties appearing under the
names of other persons, but which were under the control of the original defendants. In
view of the foregoing directives, Sheriff Gerry C. Duncan (Sheriff Duncan) and Sheriff
Cachero levied and seized the properties situated at: (a) No. 9 Northpark Avenue, Bellevue,
Grace Village, Quezon City; and (b) 2nd Level, Phase III, Sta. Lucia East Grand Mall, Cainta,
Rizal (Sta. Lucia).
Pepito Ong Ngo (Ngo), as Acting President of Panamax Corporation (Panamax), filed an
Affidavit of Third-Party Claim over the properties seized in Sta. Lucia, claiming that
Panamax is the true and lawful owner thereof.

Westmont filed an Amended Complaint impeding additional defendants, Panamax, Ngo,

Aimee R. Alba, Richard N. Yu, Annabelle Baesa, and Nenita Resane (additional defendants),
and praying that they be declared as mere alter egos, conduits, dummies, or nominees of
Sps. Yutingco to defraud their creditors, including Westmont.

The RTC ruled that the additional defendants had no participation or any corresponding
duty whatsoever relative to the subject PNs, which were executed only by the original
defendants in favor of Westmont; hence, the latter cannot maintain an action against said
additional defendants. The RTC further held that Westmont's imputation that the additional
defendants acted as dummies, conduits, and alter egos of the original defendants are but
mere inferences of fact, and not a narration of specific acts or set of facts or ultimate facts
required in a complaint to entitle the plaintiff to a remedy in law. Thus, it concluded that the
complaint failed to state a cause of action against the additional defendants.

Due to Westmont's continued refusal to release the seized items, the RTC issued a Break-
Open Order to enforce the writ. However the CA issued a TRO enjoining Sheriffs Duncan
and Cachero from enforcing the writ of execution. The CA process server, Alfredo Obrence,
Jr. (Obrence), duly served a copy of the TRO to the RTC Clerk of Court and informed Sheriff
Cachero over the phone. Notwithstanding, the latter proceeded with the implementation of
the writ of execution.

Westmont's representative who was able to secure a facsimile copy of the TRO showed the
same to Sheriff Cachero who merely ignored it. Meanwhile, various audio, video, and
electrical appliances were taken out from the warehouse and loaded into a truck. Obrence
arrived at the site and served on Sheriff Cachero a duplicate original copy of the TRO.
Nonetheless, the items on the truck were not unloaded and the truck was allowed to leave
the premises. Consequently, a case for indirect contempt was filed by Westmont against
Sheriffs Cachero and Duncan, and Ngo.

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ISSUE: WON Motion to dismiss should be granted on the ground of failure to state cause of
action

HELD: While the facts alleged in the complaint are hypothetically admitted by the
defendant, who moves to dismiss the complaint on the ground of failure to state a cause of
action, it must, nevertheless, be remembered that the hypothetical admission extends only
to the relevant and material facts well pleaded in the complaint, as well as interferes fairly
deductible therefrom. Verily, the filing of the motion to dismiss assailing the sufficiency of
the complaint does not admit the truth of mere epithets of fraud; nor allegations of legal
conclusions; nor an erroneous statement of law; nor mere interferences or conclusions
from facts not stated; nor mere conclusions of law; nor allegations of facts falsity of which is
subject to judicial notice; nor matters of evidence; nor surplusage and irrelevant matter;
nor scandalous matter inserted merely to insult the opposing party; nor to legally
impossible facts; nor to facts which appear unfounded by a record incorporated In the
pleading, or by a document referred to; nor to general averments contradicted by more
specific averments.

4. Aquino v. Quiazon, G.R. No. 201248, 11 March 2015, 753 SCRA 98

-petition for review on certiorari under Rule 45

-complaint for quieting of title

FACTS:
On December 16, 2005, a complaint for Annulment and Quieting of Title was
filed before the RTC-Branch 59 by the petitioners, alleged as the heirs of the late
Epifanio Makam and Severina Bautista, who acquired a house and lot situated in
Magalang, Pampanga, consisting of 557 square meters, by virtue of a Deed of Sale;
that since then, they and their predecessors-in-interest had been in open, continuous,
adverse, and notorious possession for more than a hundred years, constructing houses
and paying real estate taxes on the property;

That sometime in June 2005, they received various demand letters from the
respondents, claiming ownership over the subject property and demanding that they
vacate the same. The Register of Deeds (ROD) of San Fernando, Pampanga thereafter
confirmed that the property had been titled in the name of respondents and declared
that the said title was invalid, ineffective, voidable or unenforceable;

The petitioners claim that they were the true owners of the said property. Hence,
they prayed that the title be cancelled and a new title be issued in their favor.

In their answer, respondents asserted that they were the absolute owners of the
subject and denied the allegations in the complaint and proffered affirmative defenses
with counterclaims. (Ref : A-1)
They argued with 3 main points:

RULING OF RTC
RTC dismissed petitioners' complaint. It found that respondents' predecessors-
in-interest, were declared the absolute owners of the subject property and ruled that the
deed of sale had become invalid having found that petitioners had lost whatever right
they had on the property from the moment the said decision was rendered and an OCT
was issued. Finding that petitioners were not holders of any legal title over the property
and were bereft of any equitable claim thereon. Anent petitioners' argument that only
the complaint may be considered in determining the sufficiency of the cause of action,
the RTC ruled that under Section 2 in relation to Section 6, Rule 16 of the Rules of
Court, a preliminary hearing on the affirmative defense in the answer might be had at
the discretion of the court, during which the parties could present their arguments and
their evidence. RTC denied petitioners' motion for reconsideration.

RULING OF CA

9
 CA likewise dismissed petitioners' appeal. It explained that under Section 6, Rule
16 of the Rules of Court, a court is allowed to conduct a preliminary hearing, motu
proprio, on the defendant's affirmative defenses, including the ground of "lack of cause
of action or failure to state a cause of action."
The rule speaks of affirmative defenses that are grounds for a motion to dismiss.
Indubitably, lack of cause of action or failure to state a cause of action, being one of the
grounds for a motion to dismiss, is included thereby.

To rule otherwise would render nugatory the provision of Section 6, Rule 16 and
would make the holding of a preliminary hearing a plain exercise in futility. The CA gave
credence to the evidence presented by respondents and noted that, except for
petitioners' bare allegation that respondents' title was invalid, there was nothing more to
support the same. The CA, therefore, found that petitioners did not have the title
required to avail of the remedy of quieting of title, while respondents had sufficiently
proven the validity of their Torrens title.

Hence, the subject petition.

ISSUE:

Whether the CA erred in affirming the dismissal of petitioners' complaint on the

ground of lack of cause of action or failure to state a cause of action.

RULING:

The Court notes that respondents' arguments made no assertion that the
complaint failed to state a cause of action. The court discussed that ground of "lack of
cause of action" has been frequently confused with the ground of "failure to state a
cause of action," and this is the situation prevailing in the present case. The terms were,
in fact, used interchangeably by both the respondents and the lower courts. The
distinction between the grounds of "failure to state a cause of action" and "lack of cause
of action" was aptly discussed in Dabuco vs. Court of Appeals (Ref: A-2).

Although the two grounds were used interchangeably, it can be gleaned from the
decisions of both the trial court and the CA that respondents' defense of "lack of cause
of action" was actually treated as a "failure to state a cause of action," which is a ground
for a motion to dismiss under Rule 16.

The trial court held a preliminary hearing resolving the ground of "lack of cause of
action" pursuant to Section 6 of Rule 16, which allows the court to hold a preliminary
hearing on grounds for dismissal provided in the same rule that have been raised as an
affirmative defense in the answer. (Ref: B-1; Ref B-2)

The familiar test for determining whether a complaint did or did not state a cause
of action against the defendants is whether or not, admitting hypothetically the truth of
the allegations of fact made in the complaint, a judge may validly grant the relief
demanded in the complaint. It is error for the court to take cognizance of external facts
or hold preliminary hearings to determine their existence. If the allegation in a complaint
furnish sufficient basis by which the complaint may be maintained, the same should not
be dismissed regardless of the defenses that may be assessed by the defendants.

In the case at bench, petitioners' cause of action relates to an action to quiet title
under Article 476 of the Civil Code. (ref: C)

In order that an action for quieting of title may prosper, two requisites must
concur: (1) the plaintiff or complainant has a legal or equitable title or interest in the real
property subject of the action; and (2) the deed, claim, encumbrance, or proceeding
claimed to be casting cloud on his title must be shown to be in fact invalid or inoperative
despite its prima facie appearance of validity or legal efficacy.
10
 The petitioners' complaint posted relevant allegations as to the cause of action
for quieting of title.(ref: B) It is readily apparent from the complaint that petitioners
alleged that (1) they had an interest over the subject property by virtue of a Deed of
Sale; and that (2) the title of respondents under TCT No. 213777-R was invalid,
ineffective, voidable or unenforceable.

Hypothetically admitting these allegations as true, as is required in determining

whether a complaint fails to state a cause of action, petitioners may be granted their
claim. The trial court should have limited itself to examining the sufficiency of the
allegations in the complaint. It was proscribed from inquiring into the truth of the
allegations in the complaint or the authenticity of any of the documents referred or
attached to the complaint, as these were deemed hypothetically admitted by the
respondents.

Exceptions and Section 6 of Rule 16 not applicable.

Pointing to the exception that inquiry was not confined to the complaint if
evidence had been presented in the course of hearings related to the case, (ref:D) the
CA ruled that it was within the trial court's discretion to receive and consider other
evidence aside from the allegations in the complaint in resolving a party's affirmative
defense. It held that this discretion was recognized under Section 6 of Rule 16 of the
Rules of Court, which allowed the court to conduct a preliminary hearing, motu proprio,
on the defendant's affirmative defense if no corresponding motion to dismiss was filed.
( ref:E) Respondents answer which raised the affirmative defenses of "lack of cause of
action, prescription, and res judicata,". (ref: F) reveals that they alleged that "plaintiffs
have no valid, legal and sufficient cause of action against the defendants." It is at this
point that it must again be emphasized that it is not "lack or absence of cause of action"
that is a ground for dismissal of the complaint under Rule 16, but rather, that "the
complaint states no cause of action."

The issue submitted to the court was, therefore, the determination of the
sufficiency of the allegations in the complaint to constitute a cause of action and not
whether those allegations of fact were true, as there was a hypothetical admission of
facts alleged in the complaint. An affirmative defense, raising the ground that there is no
cause of action as against the defendants poses a question of fact that should be
resolved after the conduct of the trial on the merits.The lower courts also relied on the
exception that external evidence may be considered when received "in the course of
hearings related to the case.

It is of note that although the trial court might not have erred in holding a
preliminary hearing on the affirmative defenses of prescription and res judicata, it is
readily apparent from the decisions of the lower courts that no disquisition whatsoever
was made on these grounds. It cannot be denied that evidence in support of the ground
of "lack of cause of action" was received and given great weight by the trial court. In
fact, all the evidence given credence by the trial court were only in support of the ground
of "lack of cause of action." This all the more highlights that the trial court erred in
receiving evidence to determine whether the complaint failed to state a cause of action.

Although neither the RTC or the CA ruled on the affirmative defenses of

prescription and res judicata, it appears that this case could not have been dismissed
on these grounds. First, an action to quiet title is imprescriptible if the plaintiffs are in
possession of the property, which is the situation prevailing in the present case. Second,
there appears to be no res judicata nor a violation of the prohibition against forum
shopping considering that Civil Case No. 5487 had been dismissed, without prejudice,
years before petitioners initiated their complaint for quieting of title.

In sum, the trial court erred in dismissing the complaint on the ground of failure to
state a cause of action. Evidence should have been received not during a preliminary

11
hearing under Section 6 of Rule 16, but should have been presented during the course
of the trial.

Court granted the petition and the case is ordered remanded to the RTC for trial
on the merits of the case.

--------------------------------------------------------------------------
Ref:
(A-1)
First, the petitioners "have no valid, legal and sufficient cause of action" against them, because
their deed of sale was spurious and could not prevail over Land Registration decree issued by RTC
Pampanga in favor of their predecessor-in-interest. Petitioners argued that the contention was a
matter of evidence which might only be resolved in a full-blown trial and further argued that the
allegations in their complaint sufficiently stated a cause of action.
Second, the action was barred by prescription and that petitioners were guilty of laches in
asserting their interest over the subject lot, having instituted the action after more than 80 years. They
also raised the settled rule that a title registered under the Torrens system could not be defeated by
adverse, open and notorious possession, or by prescription. Petitioners countered that an action to
quiet title did not prescribe if the plaintiffs were in possession of the property in question. They
argued that they were neither guilty of laches nor were they in possession of the property by mere
tolerance, their possession being in the concept of owner for more than a hundred years.
Third, the action was also barred by res judicata and violated the prohibition against forum
shopping, considering that petitioners had earlier filed a similar case for quieting of title against
respondents and was dismissed. However, petitioners explained that they were not the same
plaintiffs in the civil cape and that the case was dismissed without prejudice.

(A-2)

- failure to state a cause refers to the insufficiency of allegation in the pleading, while lack of cause of
action refers to the insufficiency of factual basis for the action.
-Failure to state a cause may be raised in a Motion to Dismiss under Rule 16, while lack of cause may be
raised any time.
-Dismissal for failure to state a cause can be made at the earliest stages of an action. Dismissal for lack
of cause is usually made after questions of fact have been resolved on the basis of stipulations,
admissions or evidence presented.

(B-1)
Rule 16 of the Rules of Court enumerates the grounds for a motion to dismiss. The pertinent ground is
found under Section 1(g), which reads as follows:
xxxx
(g) That the pleading asserting the claim states no cause of action; xxxx

(B-2)
3. Plaintiffs are the heirs of the late Epifanio Makam and Severina Bautista who acquired a house and lot
on 20 April 1894 situated in Magalang, Pampanga, consisting of Five Hundred Seventy Seven (577)
square meters more or less, by virtue of a Deed of Sale, hereby quoted for ready reference:
xxx
4. From 1894 and up to the present, plaintiffs and through their predecessors-in-interest have been in
open, continuous, adverse and notorious possession for more than a hundred years of the piece of
property mentioned above, constructed their houses thereon and dutifully and faithfully paid the real
estate taxes on the said property;
5. That sometime in June 2005, plaintiffs received various demand letters from defendants demanding
plaintiffs to vacate the premises, claiming ownership of the subject property;
6. That when plaintiffs inquired from the Office of the Register of Deeds of San Fernando, Pampanga,
they were able to confirm that their property had been titled in the name of herein defendants under TCT
No. 213777-R;
7. That the said title is in fact invalid, ineffective, voidable or unenforceable, the existence of which is pre-
judicial to the ownership and possession of plaintiffs who are the true owners and actual possessors of
the above described real property;
8. That equity demands that the said title be surrendered by defendants and cancelled as it is a cloud
upon the legal or equitable title to or interest of plaintiffs over the subject property.

(C)
Article 476. Whenever there is a cloud on title to real property or any interest therein, by reason of any
instrument, record, claim, encumbrance or proceeding which is apparently valid or effective but is in truth
and in fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an action
may be brought to remove such cloud or to quiet title.
An action may also be brought to prevent a cloud from being cast upon title to real property or any interest
therein.

(D)
12
 exceptions to the general rule that allegations are hypothetically admitted as true and inquiry is confined
to the face of the complaint.
First, there is no hypothetical admission of (a) the veracity of allegations if their falsity is subject to judicial
notice; (b) allegations that are legally impossible; (c) facts inadmissible in evidence; and (d) facts which
appear, by record or document included in the pleadings, to be unfounded.28Second, inquiry is not
confined to the complaint if culled (a) from annexes and other pleadings submitted by the parties;29 (b)
from documentary evidence admitted by stipulation which disclose facts sufficient to defeat the claim; or
(c) from evidence admitted in the course of hearings related to the case.30

(E)
Section 6. Pleading grounds as affirmative defenses. - If no motion to dismiss has been filed, any of the
grounds for dismissal provided for in this Rule may be pleaded as an affirmative defense in the answer
and, in the discretion of the court, a preliminary hearing may be had thereon as if a motion to dismiss had
been filed.

(F)
6. Plaintiffs have no valid, legal and sufficient cause of action against the defendants. The alleged "deed
of sale" (Annex "B" -Amended Complaint) is spurious and the same cannot prevail over the Land
Registration Decree No. 122511 issued on June 28, 1919 in Land Registration Case No. 5, LRC Record
No. 128, by the Court of First Instance of Pampanga, in favor of defendants' predecessor-in-interest. In
fact, plaintiffs' predecessors-in-interest were among the oppositors in that land registration proceeding but
after trial the lot in question was awarded, decreed and titled in favor and in the names of defendants'
predecessors-in-interest, as per Original Certificate of Title No. RO-1138 (11376) of the Registry of Deeds
of Pampanga;

7. The instant action, which is actually an action of reconveyance, is already barred by prescription.
Moreover, plaintiffs are guilty of laches in asserting their alleged title or interest over the subject lot. Said
Land Registration Decree No. 122511 was issued on June 28, 1919 and OCT No. RO 1138 (11376) was
issued on May 12, 1922. Clearly, it is much too late for the plaintiffs, after more than eighty (80) long
years to institute this action against the defendants;

xxxx

9. The present action is also barred by res judicata and violates the prohibition against forum shopping.
There was already a prior similar case for quieting of title filed by plaintiffs' predecessor-in-interest against
defendant Jaime Quiazon and his co-owners, before Branch 56 of this Honorable Court, docketed as Civil
Case No. 5487, which was dismissed;32 xxxx (Emphases supplied)

5. Heirs of Dolleton v. Fil-estate, G.R. No. 170750, 7 April 2009, 584 SCRA 409

DOCTRINE
The elementary test for failure to state a cause of action is whether the complaint
alleges facts which if true would justify the relief demanded. The inquiry is into the
sufficiency, not the veracity, of the material allegations.

FACTS
- The Heirs of Tomas Dolleton, Heraclio Orcullo, Remedios San Pedro, et al., Heirs
of Bernardo Millama, Heirs of Agapito Villanueva, et al., Heirs of Hilarion Garcia,
et al., Serafina SP Argana, et al., and Heirs of Mariano Villanueva, et al. filed
before the RTC separate Complaints for Quieting of Title and/or Recovery of
Ownership and Possession with Preliminary Injunction/Restraining Order and
Damages against Fil-Estate Management Inc., Spouses Arturo E. Dy and Susan
Dy, Megatop Realty Development, Inc., and the Register of Deeds of Las Piñas.
o The Complaints were later consolidated.
- The eight Complaints were similarly worded and contained substantially identical
allegations.
o That they had been in continuous, open, and exclusive possession of the
subject properties for more than 90 years until they were forcibly ousted
by armed men.
o They had cultivated the subject properties and religiously paid the real
estate taxes for the same.
o Spouses Dy cannot rely on Transfer Certificates of Title (TCTs) issued by
the Registry of Deeds of Las Piñas in their names, because the subject
properties were not covered by said certificates.

13
 - Respondents filed before the RTC a Motion to Dismiss and Opposition to
Application for a Temporary Restraining Order/Writ of Preliminary Injunction.
They moved for the dismissal of the eight Complaints on the grounds of (1)
prescription; (2) laches; (3) lack of cause of action; and (4) res judicata.
- RTC: Granted respondents Motion to Dismiss for all the complaints. The trial
court determined that the subject properties were already registered in the
names of respondents, and that petitioners were unable to prove by clear and
convincing evidence their title to the said properties.
- CA: Denied the appeal and affirmed the RTC Resolutions stating that the titles to
the subject properties were indefeasible because they were registered under the
Torrens system. Thus, it could not be said that any claim on the subject
properties casts a cloud on their title when they failed to demonstrate a legal or
an equitable title to the same.
o In addition, actions had already prescribed. PD 1529 requires that an
action assailing a certificate of title should be filed within one year after its
issuance and actions assailing fraudulent titles should be filed within 10
years after the said titles were issued but in this case, it took 30 years
before petitioners filed their case.

Hence, this petition.

ISSUE/S
1. W/N the RTC properly granted respondents motion to dismiss

PROVISIONS

Rule 2

Section 1. Ordinary civil actions, basis of. — Every ordinary civil action must be based
on a cause of action. (n)

Section 2. Cause of action, defined. — A cause of action is the act or omission by which
a party violates a right of another. (n)

RULING & RATIO

1. NO

- Respondents seek the dismissal of petitioners Complaints for failure to state a

cause of action.
o This contention is untenable.
- Respondents mistakenly construe the allegations in petitioners Complaints. What
petitioners alleged in their Complaints was that while the subject properties were
not covered by respondents’ certificates of title, nevertheless, respondents
forcibly evicted petitioners therefrom.
o It is not simply a question of whether petitioners’ possession can defeat
respondents’ title to registered land. Instead, an initial determination has to
be made on whether the subject properties were in fact covered by
respondents’ certificates of title.
- Section 2, Rule 2 of the Rules of Civil Procedure defines a cause of action as the
act or omission by which a party violates the right of another.
o Its essential elements are as follows: (1) a right in favor of the plaintiff by
whatever means and under whatever law it arises or is created; (2) an
obligation on the part of the named defendant to respect or not to violate
such right; and (3) an act or omission on the part of such defendant in
violation of the right of the plaintiff or constituting a breach of the obligation
of the defendant to the plaintiff, for which the latter may maintain an action
for recovery of damages or other appropriate relief.
- The elementary test for failure to state a cause of action is whether the complaint
alleges facts which if true would justify the relief demanded. The inquiry is into
the sufficiency, not the veracity, of the material allegations.
14
 - This Court is convinced that each of the Complaints filed by petitioners
sufficiently stated a cause of action. The Complaints alleged that petitioners are
the owners of the subject properties by acquisitive prescription. As owners
thereof, they have the right to remain in peaceful possession of the said
properties and, if deprived thereof, they may recover the same.

DISPOSITION
IN VIEW OF THE FOREGOING, the instant Petition is GRANTED. The Decision dated
16 September 2005 and Resolution dated 9 December 2005 of the Court of Appeals in
CA-G.R. CV No. 80927 are REVERSED and SET ASIDE. Let the records of the case be
remanded for further proceedings to the Regional Trial Court, Branch 253, of Las Piñas
City, which is hereby ordered to try and decide the case with deliberate speed.

NOTES

The Complaints, which were later consolidated, were docketed as follows:

1. Civil Case No. L-97-0228, which was filed by the Heirs of Tomas Dolleton
covering a parcel of land with an area of 17,681 square meters, located in
Magasawang Mangga, Barrio Pugad Lawin, Las Pias, Rizal under Psu-235279
approved by the Director of the Bureau of Lands on 20 February 1959;
2. Civil Case No. L-97-0229, which was filed by Heraclio Orcullo covering two (2)
parcels of land with the total areas of 14,429 square meters and 2,105 square
meters, respectively, located in Magasawang Mangga, Barrio Pugad Lawin, Las
Pias, Rizal under Lots 1 and 2, Psu-169404 approved by the Director of the
Bureau of Lands on 4 December 1959;
3. Civil Case No. L-97-0230, which was filed by Remedios San Pedro, et al.,
covering a parcel of land with an area of 17,159 square meters, located in Barrio
Pugad Lawin, Las Pias, Rizal under Psu-96901 approved by the Director of the
Bureau of Lands on 21 July 1933;
4. Civil Case No. L-97-0231, which was filed by the Heirs of Bernardo Millama, et
al., covering a parcel of land with an area of 23,359 square meters, located in
Magasawang Mangga, Barrio Pugad Lawin, Las Pias, Rizal under Psu-96905
approved by the Director of the Bureau of Lands on 16 January 1933;
5. Civil Case No. L-97-0236, which was filed by the Heirs of Agapito Villanueva
covering a parcel of land with an area of 10,572 square meters, located in
Magasawang Mangga, Barrio Pugad Lawin, Las Pias, Rizal;
6. Civil Case No. L-97-0237, which was filed by the Heirs of Hilarion Garcia, et al.,
covering a parcel of land with an area of 15,372 square meters, located in
Magasawang Mangga, Barrio Pugad Lawin, Las Pias, Rizal under Psu-96920
approved by the Director of the Bureau of Lands on 16 January 1933;
7. Civil Case No. L-97-0238, which was filed by Serafina SP Argana, et al., covering
a parcel of land with an area of 29,391 square meters, located in Magasawang
Mangga, Barrio Pugad Lawin, Las Pias, Rizal under Psu-96909 approved by the
Director of the Bureau of Lands on 18 January 1933; and
8. Civil Case No. L-97-0239, which was filed by the Heirs of Mariano Villanueva, et
al., covering a parcel of land with an area of 7,454 square meters, located in
Magasawang Mangga, Barrio Pugad Lawin, Las Pias, Rizal under Psu-96910
approved by the Director of the Bureau of Lands on 16 January 1933.

Court’s ruling on other issues in case ASG asks

Complaints are not barred by prescription and laches

While petitioners improperly prayed for the cancellation of respondents TCTs in their
Complaints, there is nothing else in the said Complaints that would support the
15
conclusion that they are either petitions for reopening and review of the decree of
registration under Section 32 of the Property Registration Decree or actions for
reconveyance based on implied trust under Article 1456 of the Civil Code. Instead,
petitioners Complaints may be said to be in the nature of an accion reivindicatoria, an
action for recovery of ownership and possession of the subject properties, from which
they were evicted sometime between 1991 and 1994 by respondents. An accion
reivindicatoria may be availed of within 10 years from dispossession. There is no
showing that prescription had already set in when petitioners filed their Complaints in
1997.

It appears from the records that the RTC did not conduct a hearing to receive evidence
proving that petitioners were guilty of laches. Well-settled is the rule that the elements of
laches must be proven positively. Laches is evidentiary in nature, a fact that cannot be
established by mere allegations in the pleadings and cannot be resolved in a motion to
dismiss. At this stage, therefore, the dismissal of petitioners Complaints on the ground
of laches is premature. Those issues must be resolved at the trial of the case on the
merits, wherein both parties will be given ample opportunity to prove their respective
claims and defenses.

Complaints are not barred by res judicata

There is bar by prior judgment when, as between the first case where the judgment was
rendered, and the second case that is sought to be barred, there is identity of parties,
subject matter, and causes of action. But where there is identity of parties and subject
matter in the first and second cases, but no identity of causes of action, the first
judgment is conclusive only as to those matters actually and directly controverted and
determined and not as to matters merely involved therein. There is conclusiveness of
judgment. Under the doctrine of conclusiveness of judgment, facts and issues actually
and directly resolved in a former suit cannot again be raised in any future case between
the same parties, even if the latter suit may involve a different claim or cause of action.
The identity of causes of action is not required but merely identity of issues.

6. Intramuros Administration v. Contacto, G.R. No. 152576, 5 May 2003, 402

SCRA 581

FACTS: On 21 January 1993, the petitioner and respondent Yvette Contacto entered into a
contract1 for the lease of petitioner’s premises known as "Cantinas de Aduana" (Cantinas) to
the latter to establish a fastfood and restaurant business. The lease was for a period of five
years, from 1 February 1993 to 31 January 1998, at a monthly rental of P36,000. Yvette was to
assume the payment of water and other utility expenses, and secure appropriate licenses and
permits.

In the next two years of the contract, Yvette additionally complained of inadequate facilities of
the Cantinas, which allegedly resulted in the suspension of her license and denial of her permit
applications by the Manila Health Department. She further claimed that in August 1995, she
was constrained to rehabilitate the Cantinas on her own, resulting in the significant increase in
her food sales. During this time, however, Yvette did not pay the stipulated rent. Thus, between
1994 and 1995, the petitioner and Yvette entered into three agreements allowing the latter to
restructure her outstanding obligations. Still, Yvette failed to pay the accrued rentals.

On 16 January 1996, Yvette received a letter from the petitioner requiring her to pay her
unsettled accounts and to vacate the premises under threat of closure, within five days from
receipt of the letter. With the advise of then Secretary of the Department of Tourism Eduardo
Pilapil, she attempted to hold a conference with the petitioner in order to prevent the closure,
but this attempt failed. On 22 January 1996, the scheduled date of the closure, Yvette hurriedly
filed with the Regional Trial Court (RTC) of Manila a complaint for preliminary injunction, with a
prayer for specific performance and damages. She prayed that the petitioner be ordered to (1)

16
desist from enforcing the closure order; (2) offset all the expenses that she incurred or might
incur as a result of assuming petitioner’s obligation to make the leased premises fit for its
intended use; (3) reduce the monthly rental from P36,000 to P18,000, retroactive 1 February
1993 up to the expiration of the contract in 1998; and (4) pay her actual and exemplary
damages, attorney’s fees, and cost of suit. The complaint was docketed as Civil Case No. 96-767-
44.

On 17 September 1998, pending the resolution of Civil Case No. 96-767-44 but after the
expiration of the lease contract, the petitioner filed with the RTC of Manila a complaint7 against
respondent spouses Yvette and Gregorio Contacto. It alleged that the respondents occupied the
leased premises for the entire five years stipulated in the contract; however, they defaulted in
the payment not only of their monthly rentals from May 1995 until 31 January 1998 when they
vacated the leased premises but also the water bills and electric bills. It then prayed that the
respondents be ordered to pay (1) P3,069,225.13,8 representing unpaid rentals, penalty,
surcharges and interest, and electric and water bills after deducting their deposit of P72,000; (2)
P500,000 as exemplary damages; (3) attorneys fees equivalent to 20 percent of the total award;
and (4) interest on the monetary claims. The complaint was docketed as Civil Case No. 98-90835
and assigned to Branch 9 of said court.

On 12 March 1999, the respondents filed in Civil Case No. 98-90835 a Motion to Dismiss on the
ground of litis pendentia,9 i.e., the pendency of Civil Case No. 96-767-44 in Branch 26 of the RTC
of Manila. The RTC denied the motion to dismiss. Hence, the respondents filed with the Court of
Appeals a special civil action for certiorari, docketed as CA-G.R. SP No. 63815. After due
proceedings, the Court of Appeals rendered a decision dated 28 February 2002 granting the
petition; declaring as null and void the 2 December 1999 and 8 September 2000 orders of
Branch 9 of the RTC of Manila; and dismissing Civil Case No. 98-90835 on the ground of litis
pendentia.

ISSUE: Wether the motion to dismiss on the ground of litis pendencia in Civil Case No. 98-90835
should be dismiss?

HELD: Yes. Nonetheless, respondents’ motion to dismiss on the ground of litis pendentia
cannot prosper.

In order to grant a motion to dismiss on the ground of litis pendentia, the following requisites
must concur: (a) there must be an identity of parties, or at least such parties as representing the
same interests in both actions; (b) there must be an identity of rights asserted and reliefs prayed
for, the reliefs being founded on the same facts; and (c) the identity of the two preceding
particulars is such that any judgment rendered in the other action will, regardless of which party
is successful, amount to res judicata in the other.

In the first case, Civil Case No. 96-767-44, respondent Yvette Contacto, as a lessee, asserts her
right under the lease contract to occupy the leased premises and to use the same for the
purpose for which it was intended. On the other hand, in the second case, Civil Case No. 98-
90835, the petitioner asserts its right as a former lessor to demand payment from the
respondents, as former lessees, of the stipulated rentals, penalty, and surcharges, as well as
water and electric bills.

The reliefs prayed for in the first case are anchored on the then impending closure of the leased
premises, as well as the alleged failure or refusal of the petitioner to evict the sidewalk vendors
in the area and improve the facilities in the leased premises. The second case is based on the
refusal of the respondents to pay the monthly rentals from May 1995 up to 31 January 1998
when they vacated the leased premises, as well as the water and electric bills.

17
 From the foregoing, it is clear that there is as between the two actions no identity of rights
asserted and reliefs prayed for, as well as of the facts from which the reliefs are founded. It is
not therefore likely that petitioner’s defense in the first case, which was filed by the
respondents, would be in pursuit of its theory as plaintiff in the second case.

The Court of Appeals, however, overlooked the fact that there is more to determining the
identity of the causes of action than an identity of contract. More fundamental is whether the
cause of action in the second case existed at the time of the filing of the complaint or answer
with counterclaim, as the case may be.

7. Mid Pasig Land v. Court of Appeals, G.R. No. 153751, 8 October 2003, 413
SCRA 204

 Mid-Pasig Land Development Corporation leased a portion of its seized property to

ECRM Enterprises.
 ECRM intended to use the area as staging ground for its Home and Garden Exhibition.
 Under the contract of lease, ECRM agreed to pay the amount of P1,650,000.00 as
rental for three months, inclusive of 10% VAT, with option to renew, that upon
expiration there is no delay of turnover of the property in the same or improved
condition and would remove all temporary improvements at its own expense within 7
days after expiration of the lease.
 ECRM assigned to respondent Rockland Construction Co all its rights under a lease of
agreement including the extension of the lease period.
 After delivering the rental payment for 3 months, R verbally requested for the renewal of
the lease term of 3 years.
 Before the request was acted upon, P retroactively increased the monthly rental to
P770, 000.00 per month effective April 15, 2000 thus R agreed to the increased rate
and paid petitioner the rent differential
 R sub-leased the certain portions, however, a notice from petitioner was served stating
too vacate the property.
 R requesting for a formal 3 year lease contract be executed in its favor, nevertheless P
stated therein that it had not entered in any agreement with the R or among others
 P claimed that the assignment of the lease was not valid since it was done without its
consent and the provisions of lease agreement were violated.
 Respondent filed a complaint for specific performance with prayer for the issuance of a
temporary restraining order/writ of preliminary injunction.
 Petitioner filed a motion to dismiss on the ground that the complaint was anticipatory in
nature, failed to state a cause of action and respondents claim is unenforceable under
the Statute of Frauds
 P filed a supplemental motion seeking its dismissal on the ground of litis pendentia.
 An order was issued denying P motion to dismiss on the ground that R substantially
complied with all the requirements for the filing of an initiatory pleading and that the
complaint clearly stated a cause of action.
 P cannot likewise invoke the Statute of Frauds in seeking the dismissal of the complaint
because the lease contract was already partially executed by the acceptance of rental
payments.
 A motion for reconsideration was thereafter filed by petitioner.
 P motion to dismiss was denied by the TC on the ground that there was
no litis pendentia between Civil Cases for unlawful detainer, because there was no
identity of causes of action.

Issue: W/N the motion to dismiss on the of litis pendentia was proper.

Ruling:
 In order to sustain a dismissal of an action on the ground of litis pendentia, the
following requisites must concur: (a) identity of parties, or at least such as representing
the same interest in both actions; (b) identity of rights asserted and relief prayed for,
the relief being founded on the same facts, and (c) identity in the two cases should be

18
 such that the judgment that may be rendered in the pending case would, regardless of
which party is successful, amount to res judicata in the other.
 No question that parties are one and same.
 RTC reveals that the rights asserted and reliefs prayed for therein are no different
from those pleaded in the MeTC case.
 The only difference between the two cases herein is that R asserts, as a cause of
action, its alleged contractual right to possession of the property in the RTC case,
while the same matter is set forth as its counterclaim in the MeTC case where it is a
defendant. However, the two cases are identical in all other respects, with merely a
reversal of the parties position in the two actions.
 The case is hereby dismissed for the grounds of litis pendentia.

Dismissal of Actions

1. Dael v. Sps Beltran, G.R. No. 156470, 30 April 2008, 553 SCRA 182

FACTS:
 respondents sold a land to petitioner

 Petitioner alleged that respondents did not disclose that the land was previously
mortgaged and that an extrajudicial foreclosure over the property had already been
instituted so he was constrained to bid in the extrajudicial sale

 petitioner Frederick Dael filed before the RTC a Complaint for breach of contract and
damages against respondent-spouses Beltran

 respondents filed a Motion to Dismiss on the ground that petitioner had no cause of
action since the contract to sell stated that the vendor was Benedicto Beltran and the
vendee was Frederick George Ghent Dael, not the petitioner.

 in a hearing on the motion, petitioner's counsel, disclosed that petitioner is the

father of Frederick George Ghent Dael whose name appears as the contracting party
in the Contract to Sell. They moved to reset the hearing to enable the petitioner to
withdraw and have the complaint dismissed, amended, or to enter into a
compromise agreement with respondents

 RTC on the same day ordered petitioner to clarify whether or not he and Frederick
George Ghent Dael were one and the same person; whether or not they were
Filipinos and residents of Dumaguete City; and whether or not Frederick George
Ghent Dael was of legal age, and married, as stated in the Contract to Sell

 Petitioner did not comply. Instead, he filed a Notice of Dismissal on February 20,
2002

 RTC dismissed the complaint with prejudice

 Petitioner argued that the RTC erred in dismissing the complaint with
prejudice based on respondents' Motion to Dismiss, and not without prejudice based
on his Notice of Dismissal

 He asserts it is the prerogative of the plaintiff to indicate if the Notice of

Dismissal filed is with or without prejudice and the RTC cannot exercise its
own discretion and dismiss the case with prejudice

 respondents on the other hand counter that the RTC is correct in dismissing the case
with prejudice based on their Motion to Dismiss because they filed their motion
ahead of petitioner who filed his Notice of Dismissal only on February 20, 2002

 They further argue that although it is correct that under the 1997 Rules of
Civil Procedure a complaint may be dismissed by the plaintiff by filing a
notice of dismissal before service of the answer or of a motion for summary
19
 judgment, the petitioner filed the Notice of Dismissal only as an afterthought
after he realized that the Motion to Dismiss was meritorious
ISSUE: Whether or not the RTC was correct in dismissing the action with prejudice
HELD: NO

 Under Section 1, Rule 17 of the 1997 Rules of Civil Procedure it is mandatory that
the trial court issue an order confirming such dismissal and, unless otherwise stated
in the notice, the dismissal is without prejudice and could be accomplished by the
plaintiff through mere notice of dismissal, and not through motion subject to
approval by the court. Dismissal is ipso facto upon notice, and without prejudice
unless otherwise stated in the notice

 The trial court has no choice but to consider the complaint as dismissed,
since the plaintiff may opt for such dismissal as a matter of right, regardless
of the ground

 Section 1 of Rule 17 does not encompass a Motion to Dismiss. The provision

specifically provides that a plaintiff may file a notice of dismissal before service of
the service of the answer or a motion for summary judgment. Thus, upon the filing
of the Notice of Dismissal by the plaintiff, the Motion to Dismiss filed by respondents
became moot and academic and the trial court should have dismissed the case
without prejudice based on the Notice of Dismissal filed by the petitioner

 Moreover, to allow the case to be dismissed with prejudice would erroneously result
inres judicata [18] and imply that petitioner can no longer file a case against
respondents without giving him a chance to present evidence to prove otherwise

2. Ching v. Cheng, G.R. No. 175507, 8 October 2014, 737 SCRA 610

FACTS: Respondent-plaintiffs Joseph Cheng, Jaime Cheng, and Mercedes Igne (the
Chengs) filed a complaint for declaration of nullity of titles against Ramon Ching
before the Regional Trial Court of Manila.

The complaint was amended, with leave of court, to implead additional defendants,
including Po Wing Properties, of which Ramon Ching was a primary stockholder. The
amended complaint was for "Annulment of Agreement, Waiver, Extra-Judicial
Settlement of Estate and the Certificates of Title Issued by Virtue of Said Documents
with Prayer for Temporary Restraining Order and Writ of Preliminary Injunction.".
Sometime after, Lucina Santos filed a motion for intervention and was allowed to
intervene.

After the responsive pleadings had been filed, Po Wing Properties filed a motion to
dismiss on the ground of lack of jurisdiction of the subject matter. The Regional Trial
Court of Manila, Branch 6, granted the motion to dismiss. Upon motion of the Chengs’
counsel, however, the Chengs and Lucina Santos were given fifteen (15) days to file
the appropriate pleading. They did not do so.

The Chengs and Lucina Santos filed a complaint for "Annulment of Agreement,
Waiver, Extra-Judicial Settlement of Estate and the Certificates of Title Issued by
Virtue of Said Documents with Prayer for Temporary Restraining Order and Writ of
Preliminary Injunction" against Ramon Ching and Po Wing Properties (the second
case) and raffled to Branch 20 of the Regional Trial Court of Manila. When Branch 20
was made aware of the first case, it issued an order transferring the case to Branch 6,
considering that the case before it involved substantially the same parties and causes
of action.

The Chengs and Lucina Santos filed a motion to dismiss their complaint in the second
case, praying that it be dismissed without prejudice. RTC Branch 6 issued an order

20
granting the motion to dismiss on the basis that the summons had not yet been
served on Ramon Ching and Po Wing Properties, and they had not yet filed any
responsive pleading. The dismissal of the second case was made without prejudice.

Ramon Ching and Po Wing Properties filed a motion for reconsideration of the order
dated November 22, 2002. They argue that the dismissal should have been with
prejudice under the "two dismissal rule" of Rule 17, Section 1 of the 1997 Rules of
Civil Procedure, in view of the previous dismissal of the first case.

During the pendency of the motion for reconsideration, the Chengs and Lucina
Santos filed a complaint for "Disinheritance and Declaration of Nullity of Agreement
and Waiver, Affidavit of Extra judicial Agreement, Deed of Absolute Sale, and Transfer
Certificates of Title with Prayer for TRO and Writ of Preliminary Injunction" against
Ramon Ching and Po Wing Properties (the third case) and was eventually raffled to
Branch 6.

Ramon Ching and Po Wing Properties filed their comment/opposition to the

application for temporary restraining order in the third case. They also filed a motion
to dismiss on the ground of res judicata, litis pendencia, forum-shopping, and failure
of the complaint to state a cause of action.

RTC Branch 6 issued an omnibus order resolving both the motion for reconsideration
in the second case and the motion to dismiss in the third case. The trial court denied
the motion for reconsideration and the motion to dismiss, holding that the dismissal of
the second case was without prejudice and, hence, would not bar the filing of the third
case.

while their motion for reconsideration in the third case was pending, Ramon Ching
and Po Wing Properties filed a petition for certiorari (the first certiorari case) with the
Court of Appeals, assailing the order which upheld the dismissal of the second case.

The trial court issued an order denying the motion for reconsideration in the third
case. The denial prompted Ramon Ching and Po Wing Properties to file a petition for
certiorari and prohibition with application for a writ of preliminary injunction or the
issuance of a temporary restraining order (the second certiorari case) with the Court
of Appeals.

The Court of Appeals rendered the decision in the first certiorari case dismissing the
petition. The appellate court ruled that Ramon Ching and Po Wing Properties’ reliance
on the "two-dismissal rule" was misplaced since the rule involves two motions for
dismissals filed by the plaintiff only. Upon the denial of their motion for
reconsideration, Ramon Ching and Po Wing Properties filed this present petition for
review under Rule 45 of the Rules of Civil Procedure.

ISSUES:
I. Whether the trial court’s dismissal of the second case operated as a bar to the filing
of a third case, as per the "two-dismissal rule"; and
II. Whether respondents committed forum shopping when they filed the third case
while the motion for reconsideration of the second case was still pending.
III. Whether or not the third case be dismissed should the respondents indeed
committed forum shopping.

RULING:
I. NO. Rule 17 of the Rules of Civil Procedure governs dismissals of actions at the
instance of the plaintiff. Hence, the "two-dismissal rule" under Rule 17, Section 1 of
the Rules of Civil Procedure will not apply if the prior dismissal was done at the

21
instance of the defendant. Dismissals upon the instance of the defendant are
generally governed by Rule 16, which covers motions to dismiss.

As a general rule, dismissals under Section 1 of Rule 17 are without prejudice except
when it is the second time that the plaintiff caused its dismissal. Accordingly, for a
dismissal to operate as an adjudication upon the merits, i.e, with prejudice to the re-
filing of the same claim, the following requisites must be present:
(1) There was a previous case that was dismissed by a competent court;
(2) Both cases were based on or include the same claim;
(3) Both notices for dismissal were filed by the plaintiff; and
(4) When the motion to dismiss filed by the plaintiff was consented to by the
defendant on the ground that the latter paid and satisfied all the claims of the former.

The purpose of the "two-dismissal rule" is "to avoid vexatious litigation."When a

complaint is dismissed a second time, the plaintiff is now barred from seeking relief on
the same claim.

The dismissal of the second case was without prejudice in view of the "two-dismissal
rule"

Here, the first case was filed as an ordinary civil action. It was later amended to
include not only new defendants but new causes of action that should have been
adjudicated in a special proceeding. A motion to dismiss was inevitably filed by the
defendants on the ground of lack of jurisdiction.

The dismissal of the first case was done at the instance of the defendant under Rule
16, Section 1(b) of the Rules of Civil Procedure, which states:
SECTION 1. Grounds.— Within the time for but before filing the answer to the
complaint or pleading asserting a claim, a motion to dismiss may be made on any of
the following grounds:
....
(b) That the court has no jurisdiction over the subject matter of the claim;
....
Under Section 5 of the same rule, a party may re-file the same action or claim subject
to certain exceptions.

Thus, when respondents filed the second case, they were merely refiling the same
claim that had been previously dismissed on the basis of lack of jurisdiction. When
they moved to dismiss the second case, the motion to dismiss can be considered as
the first dismissal at the plaintiff’s instance.

When respondents filed the third case on substantially the same claim, there was
already one prior dismissal at the instance of the plaintiffs and one prior dismissal at
the instance of the defendants.

While it is true that there were two previous dismissals on the same claim, it does not
necessarily follow that the re-filing of the claim was barred by Rule 17, Section 1 of
the Rules of Civil Procedure. The circumstances surrounding each dismissal must first
be examined to determine before the rule may apply, as in this case. Thus, the trial
court's dismissal of the second case is not a bar to the filing of the third case.

II. YES. To determine whether a party violated the rule against forum shopping, the
most important factor to ask is whether the elements of litis pendentia are present, or
whether a final judgment in one case will amount to res judicata in another; otherwise
stated, the test for determining forum shopping is whether in the two (or more) cases
pending, there is identity of parties, rights or causes of action, and reliefs sought.

22
 When respondents filed the third case, petitioners’ motion for reconsideration of the
dismissal of the second case was still pending. Clearly, the order of dismissal was not
yet final since it could still be overturned upon reconsideration, or even on appeal to a
higher court.

The prudent thing that respondents could have done was to wait until the final
disposition of the second case before filing the third case. As it stands, the dismissal
of the second case was without prejudice to the re-filing of the same claim, in
accordance with the Rules of Civil Procedure. In their haste to file the third case,
however, they unfortunately transgressed certain procedural safeguards, among
which are the rules on litis pendentia and res judicata.

The requisites of litis pendentia are: (a) the identity of parties, or at least such as
representing the same interests in both actions; (b) the identity of rights asserted and
relief prayed for, the relief being founded on the same facts; and (c) the identity of the
two cases such that judgment in one, regardless of which party is successful, would
amount to res judicata in the other.

There is no question that there was an identity of parties, rights, and reliefs in the
second and third cases. While it may be true that the trial court already dismissed the
second case when the third case was filed, it failed to take into account that a motion
for reconsideration was filed in the second case and, thus, was still pending.
Considering that the dismissal of the second case was the subject of the first certiorari
case and this present petition for review, it can be reasonably concluded that the
second case, to this day, remains pending.

Hence, when respondents filed the third case, they engaged in forum shopping. Any
judgment by this court on the propriety of the dismissal of the second case will
inevitably affect the disposition of the third case.

III. NO. The rule essentially penalizes the forum shopper by dismissing all pending
actions on the same claim filed in any court. However, the rule on forum shopping will
not strictly apply when it can be shown that (1) the original case has been dismissed
upon request of the plaintiff for valid procedural reasons; (2) the only pending matter
is a motion for reconsideration; and (3) there are valid procedural reasons that serve
the goal of substantial justice for the fresh new· case to proceed.

The motion for reconsideration filed in the second case has since been dismissed and
is now the subject of a petition for certiorari. The third case filed apparently contains
the better cause of action for the plaintiffs and is now being prosecuted by a counsel
they are more comfortable with. Substantial justice will be better served if
respondents do not fall victim to the labyrinth in the procedures that their travails led
them. It is for this reason the Supreme Court denied the petition.

3. Shimizu Phils. Contractors v. Magsalin, G.R. No. 170026, 20 June 2012, 674
SCRA 65

Doctrine: Dismissals of actions for failure of the plaintiff to prosecute is authorized

under Section 3, Rule 17 of the Rules of Court; Procedurally, when a complaint is
dismissed for failure to prosecute and the dismissal is unqualified, the dismissal has the
effect of an adjudication on the merits.

Grounds for Dismissal of a Case Motu Proprio for Failure to Prosecute (S3R17) -
(a) Failure of the plaintiff, without justifiable reasons, to appear on the date of the
presentation of his evidence in chief;
(b) Failure of the plaintiff to prosecute his action for an unreasonable length of time; (c)
Failure of the plaintiff to comply with the Rules of Court; or
(d) Failure of the plaintiff to obey any order of the court.

23
Summary: Shimizu filed a complaint against both Magsalin and FGU Insurance. The
complaint sought Php 2,329,124.60 as actual damages for the breach of contract.
Thereafter, the RTC issued an Order of Dismissal for the case without citing the basis
nor the reasons therefor. The court held that when a complaint is dismissed for failure to
prosecute and the dismissal is unqualified, the dismissal has the effect of an
adjudication on the merits. A trial court should always specify the reasons for a
complaints dismissal so that on appeal, the reviewing court can readily determine the
prima facie justification for the dismissal. The dismissal order clearly violates this rule for
its failure to disclose how and why Shimizu failed to prosecute its complaint. Where the
reasons are absent, a decision (such as the dismissal order) has absolutely nothing to
support it and is thus a nullity.

Facts: The petitioner Shimizu claims that Leticia Magsalin, doing business as Karens
Trading, had breached their subcontract agreement for the supply, delivery, installation,
and finishing of parquet tiles for certain floors in the petitioners Makati City condominium
project called The Regency at Salcedo. The breach triggered the agreements
termination. When Magsalin also refused to return the petitioners unliquidated advance
payment and to account for other monetary liabilities despite demand, the petitioner
sent a notice to respondent FGU Insurance Corporation demanding damages pursuant
to the surety and performance bonds the former had issued for the subcontract.

Shimizu filed a complaint against both Magsalin and FGU Insurance at the RTC of
Makati. The complaint sought P2,329,124.60 as actual damages for the breach of
contract. FGU Insurance was duly served with summons. With respect to Magsalin,
however, the corresponding officers return declared that both she and Karens Trading
could not be located at their given addresses, and that despite further efforts, their new
addresses could not be determined.

FGU Insurance filed a motion to dismiss the complaint. The Shimizu filed its opposition
to the motion. The motion to dismiss was denied as well as the ensuing motion for
reconsideration, and FGU Insurance was obliged to file an answer. To assist the RTC in
acquiring jurisdiction over Magsalin, Shimizu filed a motion for leave to serve summons
on respondent Magsalin by way of publication. Shimizu then filed its reply to FGU
Insurances answer

FGU Insurance filed a motion for leave of court to file a third-party

complaint. Attached to the motion was the subject complaint, with Reynaldo Baetiong,
Godofredo Garcia and Concordia Garcia named as third-party defendants. FGU
Insurance claims that the three had executed counter-guaranties over the surety and
performance bonds it executed for the subcontract with Magsalin and, hence, should be
held jointly and severally liable in the event it is held liable in Civil Case No. 02-488.

RTC admitted the third-party complaint and denied the motion to serve summons by
publication on the ground that the action against respondent Magsalin was in personam.

The TC issued a notice setting the case for hearing on June 20, 2003. FGU Insurance
filed a motion to cancel the hearing on the ground that the third-party defendants
had not yet filed their answer. The motion was granted.

Baetiong filed his answer to the third-party complaint. He denied any personal
knowledge about the surety and performance bonds for the subcontract with Magsalin.
Of the (3) persons named as third-party defendants, only Baetiong filed an answer to
the third-party complaint; the officers returns on the summons to the Garcias state that
both could not be located at their given addresses. Incidentally, Shimizu claims, and
Baetiong does not dispute, that it was not served with a copy of Baetiongs
answer.

Shimizu now argues before us that FGU Insurance, which is the plaintiff in the third-
party complaint, had failed to exert efforts to serve summons on the Garcias. It suggests
24
that a motion to serve summons by publication should have been filed for this purpose.
The petitioner also asserts that the RTC should have scheduled a hearing to determine
the status of the summons to the third-party defendants

On Dec 16, 2003, the RTC issued a worded Order Of Dismissal, dismissing Civil
Case No. 02-488: “For failure of [petitioner] to prosecute, the case is hereby
DISMISSED”

The RTC denied Shimizu’s motion for reconsideration prompting the latter to elevate its
case to the CA via a Rule 41 petition for review

FGU Insurance moved for the dismissal of the appeal on the ground of lack of
jurisdiction. It argued that the appeal raised a pure question of law as it did not dispute
the proceedings before the issuance of the December 16, 2003 dismissal order.

Shimizu, on the other hand, insisted that it had raised questions of fact in the appeal
stating that “While, the instant appeal does not involve the merits of the case, the same
involves questions of fact based on the records of the case. It must be emphasized
that the lower courts dismissal of the case based on alleged failure to prosecute on the
part of plaintiff-appellant was too sudden and precipitate.”

The CA agreed with FGU Insurance and dismissed the appeal, and denied as well the
subsequent motion for reconsideration. The petitioner thus filed the present petition for
review on certiorari.

Issue: Whether or not the Order of Dismissal was valid and proper – No.

Held: No, the dismissal order is void.

The nullity of the dismissal order is patent on its face. It simply states its conclusion that
the case should be dismissed for non prosequitur, a legal conclusion, but does not state
the facts on which this conclusion is based.

Dismissals of actions for failure of the plaintiff to prosecute is authorized under Section
3, Rule 17 of the Rules of Court. A plain examination of the December 16, 2003
dismissal order shows that it is an unqualified order and, as such, is deemed to be a
dismissal with prejudice. “Dismissals of actions (under Section 3) which do not
expressly state whether they are with or without prejudice are held to be with prejudice.”
As a prejudicial dismissal, the dismissal order is also deemed to be a judgment on the
merits so that the petitioner’s complaint in Civil Case No. 02-488 can no longer be
refiled on the principle of res judicata. Procedurally, when a complaint is dismissed
for failure to prosecute and the dismissal is unqualified, the dismissal has the
effect of an adjudication on the merits.

As an adjudication on the merits, it is imperative that the dismissal order conform with
Section 1, Rule 36 of the Rules of Court on the writing of valid judgments and final
orders. A trial court should always specify the reasons for a complaints dismissal so that
on appeal, the reviewing court can readily determine the prima facie justification for the
dismissal. The dismissal order clearly violates this rule for its failure to disclose
how and why Shimizu failed to prosecute its complaint. Thus, neither Shimizu nor
the reviewing court is able to know the particular facts that had prompted the prejudicial
dismissal.

We thus agree with Shimizu that the dismissal constituted a denial of due process.
Elementary due process demands that the parties to a litigation be given information on
how the case was decided, as well as an explanation of the factual and legal reasons
that led to the conclusions of the court. Where the reasons are absent, a decision
(such as the dismissal order) has absolutely nothing to support it and is thus a
nullity.
25
Moreover, the Dismissal of Civil Case No. 02-488 is not Supported by the Facts of
the Case.

Based on available records and on the averments of the parties, the following events
were chronologically proximate to the dismissal of the Civil Case: (a) on March 24,
2003, the court admitted FGU Insurances third-party complaint; (b) the trial court
cancelled the June 20, 2003 hearing upon FGU Insurances motion; and (c) on June 16,
2003, Baetiong filed his Answer to the third-party complaint but did not serve it upon the
petitioner.
None of these events square with the grounds specified by Section 3, Rule 17 of the
Rules of Court for the motu proprio dismissal of a case for failure to prosecute.
These grounds are as follows:

(a) Failure of the plaintiff, without justifiable reasons, to appear on the date of the
presentation of his evidence in chief;
(b) Failure of the plaintiff to prosecute his action for an unreasonable length of time; (c)
Failure of the plaintiff to comply with the Rules of Court; or
(d) Failure of the plaintiff to obey any order of the court.

The developments in the present case do not satisfy the stringent standards set
in law and jurisprudence for a non prosequitur. The fundamental test for non prosequitur
is whether, under the circumstances, the plaintiff is chargeable with want of due
diligence in failing to proceed with reasonable promptitude. There must be
unwillingness on the part of the plaintiff to prosecute.

In this case, the parties own narrations of facts demonstrate Shimizu’s willingness to
prosecute its complaint. Indeed, neither FGU Insurance nor Baetiong was able to point
to any specific act committed by Shimizu to justify the dismissal of their case.

While it is discretionary on the trial court to dismiss cases, dismissals of actions should
be made with care. The repressive or restraining effect of the rule amounting to
adjudication upon the merits may cut short a case even before it is fully litigated; a ruling
of dismissal may forever bar a litigant from pursuing judicial relief under the same cause
of action. This court is thus of the opinion that the dismissal of Civil Case No. 02-488 is
not warranted. Neither facts, law or jurisprudence supports the RTCs finding of failure to
prosecute on the part of the petitioner. Hence, the petition is granted. The order of
dismissal is declared null and void.

4. Padilla v. Globe Asiatique, G.R. No. 207376, 6 August 2014, 732 SCRA 416

FACTS: From the years 2005 to 2008, Philippine National Bank (PNB) entered into
several Contracts to Sell (CTS) Facility Agreements2 with respondents Globe Asiatique
Realty Holdings Corporation (Globe Asiatique) and Filmal Realty Corporation (Filmal)
represented by Delfin S. Lee and Dexter L. Lee, President and Vice-President,
respectively, of the two corporations. PNB thereby agreed to make available toGlobe
Asiatique and Filmal CTS Facility in the amount not exceeding 200,000,000.00 to
finance the purchase of certain Accounts Receivables or the in-house installment
receivables of respondents arising from the sale of subdivision houses in their real
estate/housing projects as evidenced by contracts to sell. These availments werelater
increased to a total amount of 1,200,000,000.00.

Sometime in the first quarter of 2010, respondents defaulted in the payment of their
outstanding balance and delivery to PNB of transfer certificates of title corresponding to
the assigned accounts receivables, for which PNB declared them in default under the
CTS Facility Agreements. Subsequently, respondents made partial payments and made
proposals for paying in full its obligation to PNB as shown in the exchange of
correspondence between respondents and PNB.

26
Thereafter, PNB instituted Civil Case No. R-PSY-10-04228-CV (Philippine National
Bank v. Globe Asiatique Realty Holdings Corporation, Filmal Realty Corporation, Delfin
S. Lee and Dexter L. Lee) for recovery of sum of money and damages with prayerfor
writ of preliminary attachment before the RTC of Pasay City.

In their complaint, PNB alleged in detail the fraudulent acts and misrepresentations
committed by respondents in obtaining PNB’s conformity to the CTS Facility
Agreements and the release of various sums to respondents in the total amountof
₱974,377,159.10. PNB accused respondents of falsely representing that they have valid
and subsisting contracts to sell, which evidently showed they had no intention to pay
their loan obligations. The Verification and Certification of Non-Forum Shopping
attached to the complaint was signed byPNB’s Senior Vice-president of the Remedial
Management Group, Aida Padilla, who likewise executed an "Affidavit in Support of the
Application for the Issuance of the Writ of Preliminary Attachment."

ISSUE: Does the dismissal of the complaint due to lack of jurisdiction carry with it the
dismissal of the counterclaims?

HELD: The Supreme Court held that the dismissal of the complaint due to lack of
jurisdiction does not carry with it the dismissal of the counterclaims. The Supreme Court
held thus:

"In this case, petitioner raises the lone issue of whether the Pasig City RTC was correct
in refusing to hear her counterclaims after the dismissal of respondents’ complaint for
lack of jurisdiction. Said issue involves the proper interpretation of the 1997 Rules of
Civil Procedure, as amended, specifically on whether the dismissal of the complaint
automatically results in the dismissal of counterclaims pleaded by the defendant. Since
this is clearly a question of law, petitioner appropriately filed in this Court a Rule 45
petition.

On the lone issue raised in the petition, we rule for the petitioner.

Xxx

Under the 1997 Rules of Civil Procedure, it is now explicitly provided that the dismissal
of the complaint due to failure of the plaintiff to prosecute his case is “without prejudice
to the right of the defendant to prosecute his counterclaim in the same or in a separate
action.” The effect of this amendment on previous rulings on whether the dismissal of a
complaint carries with it the dismissal of the counterclaims as well, was discussed in the
case of Pinga v. The Heirs of German Santiago, thus:

Similarly, Justice Feria notes that “the present rule reaffirms the right of the defendant to
move for the dismissal of the complaint and to prosecute his counterclaim, as stated in
the separate opinion [of Justice Regalado in BA Finance.] Retired Court of Appeals
Justice Herrera pronounces that the amendment to Section 3, Rule 17 settles that
“nagging question” whether the dismissal of the complaint carries with it the dismissal of
the counterclaim, and opines that by reason of the amendments, the rulings in Metals
Engineering, International Container, and BA Finance “may be deemed abandoned.” On
the effect of amendment to Section 3, Rule 17, the commentators are in general
agreement, although there is less unanimity of views insofar as Section 2, Rule 17 is
concerned.

To be certain, when the Court promulgated the 1997 Rules of Civil Procedure, including
the amended Rule 17, those previous jural doctrines that were inconsistent with the new
rules incorporated in the 1997 Rules of Civil Procedure were implicitly abandoned
insofar as incidents arising after the effectivity of the new procedural rules on 1 July
1997. BA Finance, or even the doctrine that a counterclaim may be necessarily
dismissed along with the complaint, clearly conflicts with the 1997 Rules of Civil
Procedure. The abandonment of BA Finance as doctrine extends as far back as 1997,
when the Court adopted the new Rules of Civil Procedure. ... we thus rule that the
27
dismissal of a complaint due to fault of the plaintiff is w ithout prejudice to the right of the
defendant to prosecute a ny pending counterclaims of whatever nature in the same or
separate action. We confirm that BA Finance and all previous rulings of the Court that
are inconsistent with this present holding are now abandoned . (Emphasis supplied.)

Subsequently, in Perkin Elmer Singapore Pte Ltd. v. Dakila Trading Corporation this
Court held that while the declaration in Pinga refers to instances covered by Section 3,
Rule 17 on dismissal of complaints due to the fault of plaintiff, it does not preclude the
application of the same rule when the dismissal was upon the instance of defendant
who correctly argued lack of jurisdiction over its person. Further, in stark departure from
Metals Engineering, we declared that the court’s jurisdiction over respondent’s
complaint is not to be confused with jurisdiction over petitioner’s counterclaim, viz:

......Petitioner seeks to recover damages and attorney’s fees as a consequence of the

unfounded suit filed by respondent against it. Thus, petitioner’s compulsory
counterclaim is only consistent with its position that the respondent wrongfully filed a
case against it and the RTC erroneously exercised jurisdiction over its person.

Distinction must be made in Civil Case No. MC99-605 as to the jurisdiction of the RTC
over respondent’s complaint and over petitioner’s counterclaim – while it may have no
jurisdiction over the former, it may exercise jurisdiction over the latter. The compulsory
counterclaim attached to petitioner’s Answer ad cautelam can be treated as a separate
action, wherein petitioner is the plaintiff while respondent is the defendant. Petitioner
could have instituted a separate action for the very same claims but, for the sake of
expediency and to avoid multiplicity of suits, it chose to demand the same in Civil Case
No. MC99-605. Jurisdiction of the RTC over the subject matter and the parties in the
counterclaim must thus be determined separately and independently from the
jurisdiction of the same court in the same case over the subject matter and the parties in
respondent’s complaint.

xxx

In the present case, the RTC of Pasig City should have allowed petitioner’s
counterclaim to proceed notwithstanding the dismissal of respondents’ complaint, the
same being compulsory in nature and with its cause not eliminated by such dismissal. It
bears stressing that petitioner was hailed to a separate court (Pasig City RTC) even
while the dispute between PNB and respondents was still being litigated, and she
already incurred expenses defending herself, having been sued by respondents in her
personal capacity. The accusations hurled against her were serious (perjury and
misrepresentation in executing the affidavit in support of the application for writ of
attachment before the Pasay City RTC) – with hints at possible criminal prosecution
apart from that criminal complaint already lodged in the Pasig City Prosecutor’s Office.
The Pasig City RTC clearly erred in refusing to hear the counterclaims upon the same
ground for dismissal of the complaint, i.e., lack of jurisdiction in strict observance of the
policy against interference with the proceed ings of a co-equal court."

Rule 18 - Pre-Trial

1. AM No. 12-8-8-SC – Judicial Affidavit Rule

A.M. No. 12-8-8-SC

JUDICIAL AFFIDAVIT RULE

Whereas, case congestion and delays plague most courts in cities, given the huge volume of
cases filed each year and the slow and cumbersome adversarial syste1n that the judiciary has
in place;

28
Whereas, about 40% of criminal cases are dismissed annually owing to the fact that
complainants simply give up con1ing to court after repeated postponements;

Whereas, few foreign businessmen make long-term investments in the Philippines because its
courts are unable to provide ample and speedy protection to their investments, keeping its
people poor;

Whereas, in order to reduce the time needed for completing the testimonies of witnesses in
cases under litigation, on February 21, 2012 the Supreme Court approved for piloting by trial
courts in Quezon City the compulsory use of judicial affidavits in place of the direct testimonies
of witnesses;

Whereas, it is reported that such piloting has quickly resulted in reducing by about two-thirds the
time used for presenting the testimonies of witnesses, thus speeding up the hearing and
adjudication of cases;

Whereas, the Supreme Court Committee on the Revision of the Rules of Court, headed by
Senior Associate Justice Antonio T. Carpio, and the Sub-Committee on the Revision of the
Rules on Civil Procedure, headed by Associate Justice Roberto A. Abad, have recommended
for adoption a Judicial Affidavit Rule that will replicate nationwide the success of the Quezon
City experience in the use of judicial affidavits; and

Whereas, the Supreme Court En Banc finds merit in the recommendation;

NOW, THEREFORE, the Supreme Court En Banc hereby issues and promulgates the following:

Section 1. Scope. - (a) This Rule shall apply to all actions, proceedings, and incidents requiring
the reception of evidence before:

(1) The Metropolitan Trial Courts, the Municipal Trial Courts in Cities, the
Municipal Trial Courts, the Municipal Circuit Trial Courts, and the Shari' a Circuit
Courts but shall not apply to small claims cases under A.M. 08-8-7-SC;

(2) The Regional Trial Courts and the Shari'a District Courts;

(3) The Sandiganbayan, the Court of Tax Appeals, the Court of Appeals, and the
Shari'a Appellate Courts;

(4) The investigating officers and bodies authorized by the Supreme Court to
receive evidence, including the Integrated Bar of the Philippine (IBP); and

(5) The special courts and quasi-judicial bodies, whose rules of procedure are
subject to disapproval of the Supreme Court, insofar as their existing rules of
procedure contravene the provisions of this Rule.1

(b) For the purpose of brevity, the above courts, quasi-judicial bodies, or investigating
officers shall be uniformly referred to here as the "court."

Section 2. Submission of Judicial Affidavits and Exhibits in lieu of direct testimonies. - (a) The
parties shall file with the court and serve on the adverse party, personally or by licensed courier
service, not later than five days before pre-trial or preliminary conference or the scheduled
hearing with respect to motions and incidents, the following:

(1) The judicial affidavits of their witnesses, which shall take the place of such
witnesses' direct testimonies; and

(2) The parties' docun1entary or object evidence, if any, which shall be attached
to the judicial affidavits and marked as Exhibits A, B, C, and so on in the case of
the complainant or the plaintiff, and as Exhibits 1, 2, 3, and so on in the case of
the respondent or the defendant.

(b) Should a party or a witness desire to keep the original document or object evidence
in his possession, he may, after the same has been identified, marked as exhibit, and
authenticated, warrant in his judicial affidavit that the copy or reproduction attached to
29
 such affidavit is a faithful copy or reproduction of that original. In addition, the party or
witness shall bring the original document or object evidence for comparison during the
preliminary conference with the attached copy, reproduction, or pictures, failing which
the latter shall not be admitted.

This is without prejudice to the introduction of secondary evidence in place of the original when
allowed by existing rules.

Section 3. Contents of judicial Affidavit. - A judicial affidavit shall be prepared in the language
known to the witness and, if not in English or Filipino, accompanied by a translation in English or
Filipino, and shall contain the following:

(a) The name, age, residence or business address, and occupation of the witness;

(b) The name and address of the lawyer who conducts or supervises the examination of
the witness and the place where the examination is being held;

(c) A statement that the witness is answering the questions asked of him, fully conscious
that he does so under oath, and that he may face criminal liability for false testimony or
perjury;

(d) Questions asked of the witness and his corresponding answers, consecutively
numbered, that:

(1) Show the circumstances under which the witness acquired the facts upon
which he testifies;

(2) Elicit from him those facts which are relevant to the issues that the case
presents; and

(3) Identify the attached documentary and object evidence and establish their
authenticity in accordance with the Rules of Court;

(e) The signature of the witness over his printed name; and

(f) A jurat with the signature of the notary public who administers the oath or an officer
who is authorized by law to administer the same.

Section 4. Sworn attestation of the lawyer. - (a) The judicial affidavit shall contain a sworn
attestation at the end, executed by the lawyer who conducted or supervised the examination of
the witness, to the effect that:

(1) He faithfully recorded or caused to be recorded the questions he asked and

the corresponding answers that the witness gave; and

(2) Neither he nor any other person then present or assisting him coached the
witness regarding the latter's answers.

(b) A false attestation shall subject the lawyer mentioned to disciplinary action, including
disbarment.

Section 5. Subpoena. - If the government employee or official, or the requested witness, who is
neither the witness of the adverse party nor a hostile witness, unjustifiably declines to execute a
judicial affidavit or refuses without just cause to make the relevant books, documents, or other
things under his control available for copying, authentication, and eventual production in court,
the requesting party may avail himself of the issuance of a subpoena ad testificandum or duces
tecum under Rule 21 of the Rules of Court. The rules governing the issuance of a subpoena to
the witness in this case shall be the same as when taking his deposition except that the taking
of a judicial affidavit shal1 be understood to be ex parte.

Section 6. Offer of and objections to testimony in judicial affidavit. - The party presenting the
judicial affidavit of his witness in place of direct testimony shall state the purpose of such
testimony at the start of the presentation of the witness. The adverse party may move to
disqualify the witness or to strike out his affidavit or any of the answers found in it on ground of
30
inadmissibility. The court shall promptly rule on the motion and, if granted, shall cause the
marking of any excluded answer by placing it in brackets under the initials of an authorized court
personnel, without prejudice to a tender of excluded evidence under Section 40 of Rule 132 of
the Rules of Court.

Section 7. Examination of the witness on his judicial affidavit. - The adverse party shall have
the right to cross-examine the witness on his judicial affidavit and on the exhibits attached to the
same. The party who presents the witness may also examine him as on re-direct. In every case,
the court shall take active part in examining the witness to determine his credibility as well as
the truth of his testimony and to elicit the answers that it needs for resolving the issues.

Section 8. Oral offer of and objections to exhibits. - (a) Upon the termination of the testimony of
his last witness, a party shall immediately make an oral offer of evidence of his documentary or
object exhibits, piece by piece, in their chronological order, stating the purpose or purposes for
which he offers the particular exhibit.

(b) After each piece of exhibit is offered, the adverse party shall state the legal ground
for his objection, if any, to its admission, and the court shall immediately make its ruling
respecting that exhibit.

(c) Since the documentary or object exhibits form part of the judicial affidavits that
describe and authenticate them, it is sufficient that such exhibits are simply cited by their
markings during the offers, the objections, and the rulings, dispensing with the
description of each exhibit.

Section 9. Application of rule to criminal actions. - (a) This rule shall apply to all criminal
actions:

(1) Where the maximum of the imposable penalty does not exceed six years;

(2) Where the accused agrees to the use of judicial affidavits, irrespective of the
penalty involved; or

(3) With respect to the civil aspect of the actions, whatever the penalties involved
are.

(b) The prosecution shall submit the judicial affidavits of its witnesses not later than five
days before the pre-trial, serving copies if the same upon the accused. The complainant
or public prosecutor shall attach to the affidavits such documentary or object evidence
as he may have, marking them as Exhibits A, B, C, and so on. No further judicial
affidavit, documentary, or object evidence shall be admitted at the trial.

(c) If the accused desires to be heard on his defense after receipt of the judicial affidavits
of the prosecution, he shall have the option to submit his judicial affidavit as well as
those of his witnesses to the court within ten days from receipt of such affidavits and
serve a copy of each on the public and private prosecutor, including his documentary
and object evidence previously marked as Exhibits 1, 2, 3, and so on. These affidavits
shall serve as direct testimonies of the accused and his witnesses when they appear
before the court to testify.

Section 10. Effect of non-compliance with the judicial Affidavit Rule. - (a) A party who fails to
submit the required judicial affidavits and exhibits on time shall be deemed to have waived their
submission. The court may, however, allow only once the late submission of the same provided,
the delay is for a valid reason, would not unduly prejudice the opposing party, and the defaulting
party pays a fine of not less than P 1,000.00 nor more than P 5,000.00 at the discretion of the
court.

(b) The court shall not consider the affidavit of any witness who fails to appear at the
scheduled hearing of the case as required. Counsel who fails to appear without valid
cause despite notice shall be deemed to have waived his client's right to confront by
cross-examination the witnesses there present.

(c) The court shall not admit as evidence judicial affidavits that do not conform to the
content requirements of Section 3 and the attestation requirement of Section 4 above.
31
 The court may, however, allow only once the subsequent submission of the compliant
replacement affidavits before the hearing or trial provided the delay is for a valid reason
and would not unduly prejudice the opposing party and provided further, that public or
private counsel responsible for their preparation and submission pays a fine of not less
than P 1,000.00 nor more than P 5,000.00, at the discretion of the court.

Section 11. Repeal or modification of inconsistent rules. - The provisions of the Rules of Court
and the rules of procedure governing investigating officers and bodies authorized by the
Supreme Court to receive evidence are repealed or modified insofar as these are inconsistent
with the provisions of this Rule.1âwphi1

The rules of procedure governing quasi-judicial bodies inconsistent herewith are hereby
disapproved.

Section 12. Effectivity. - This rule shall take effect on January 1, 2013 following its publication in
two newspapers of general circulation not later than September 15, 2012. It shall also apply to
existing cases.

Manila, September 4, 2012.

2. Paredes v. Verano, G.R. No. 164375, 12 October 2006, 504 SCRA 264

Facts:
1. The legal battle between the parties began with a complaint for the establishment
of a right of way filed by the petitioners against respondents. The complaint
culminated in a judgment by compromise.

2. In the Compromise Agreement, respondent Cosme Hinunangan granted a 2

meter-wide right of way in favor of petitioners in consideration of the amount of
Php 6,000.00 which petitioners agreed to pay.

3. Alleging that petitioners had blocked the passage way in violation of the
Compromise Agreement, respondents filed a complaint for specific performance
with damages against petitioners.

4. In their answer, petitioners denied having violated the Compromise Agreement,

and alleged that like them, respondents were not actual residents of Barangay
Tagnipa where the “road right of way” was established and that respondent
Cosme had already sold his only remaining lot in the vicinity to petitioner
Paredes.

5. Petitioners filed a motion to dismiss on the ground of lack of action. TC-DENIED.

6. Pre-trial was initially set for 24 April 2003, but this was reset to 3 June 2003. But
the pre-trial set on 3 June 2003 did not push through either because none of the
parties appeared. So, pre-trial was reset to 11 November 2003. However,
petitioner Baybay was present in court along with other defendants was called.
RTC was informed then of a proposed settlement between the parties, although
Baybay qualified his reaction by telling the court that he would first have to inform
his lawyer of the said propodal.

7. RTC reset the pre-trial for 23 January 2004.

8. Before the new pre-trial date, counsel for petitioners filed a Manifestation of
Willingness to Settle With Request for Cancellation dated 5 January 2004.

32
 9. The hearing did push through on 23 January 2004. The private respondents and
their counsel were present. So were petitioners Baybay and Paredes, and co-
defendant Alago, but not their counsel.

10. RTC allowed respondents to present their evidence ex parte, “for failure of the
defendants’ counsel to appear before the RTC.

11. Motion for recon – DENIED.

12. Petition for certiorari – CA – dismissed for failure to attach duplicate orig copies
of annexes to petition as well as other pleadings relevant and pertinent to the
petition.

13. Motion for recon with motion to admit additional exhibits – DENIED. CA ruled that
even with the submission by petitioners of the required pleadings and
documents, the instant petition must nevertheless failed. It conceded that under
Sec 5 Rule 18 of the 1997 Rules of Civil Procedure, it is the failure of the
defendant, and not defendant’s counsel, to appear at the pre-trial that would
serve cause to allow plaintiff to present evidence ex parte.

Issue: Whether the absence of the counsel for defendants at the pre-trial, with all
defendants themselves present, is a ground to declare defendants in default and to
authorize plaintiffs to present evidence ex parte.
Held: No.

Section 4. Appearance of parties. — It shall be the duty of the parties and their counsel
to appear at the pre-trial. The non-appearance of a party may be excused only if a valid
cause is shown therefor or if a representative shall appear in his behalf fully authorized
in writing to enter into an amicable settlement, to submit to alternative modes of dispute
resolution, and to enter into stipulations or admissions of facts and of documents.

Section 5. Effect of failure to appear. — The failure of the plaintiff to appear when so
required pursuant to the next preceding section shall be cause for dismissal of the
action. The dismissal shall be with prejudice, unless other-wise ordered by the court. A
similar failure on the part of the defendant shall be cause to allow the plaintiff to present
his evidence ex parte and the court to render judgment on the basis thereof.

Section 4 imposes the duty on litigating parties and their respective counsel
during pre-trial. The provision also provides for the instances where the non-
appearance of a party may be excused. Nothing, however, in Sec 4 provides for a
sanction should the parties or their respective counsel be absent during pre-trial. The
penalty is provided for in Sec 5 which penalizes the failure to appear of either the
plaintiff or the defendant, and not their respective counsel.

The absence of counsel for defendants at pretrial does not ipso facto authorize
the judge to declare the defendant as in default and order the presentation of evidence
ex parte. Nothing in the rules of court sanctions the presentation of evidence ex parte
upon instances when counsel for defendant is absent during pre-trial. The Rules do not
countenance stringent construction at the expense of justice and equity.

3. Saguid v. Court of Appeals, G.R. No. 150611, 10 June 2003, 403 SCRA 678

Facts: Gina and Saguid decided to cohabit as husband and wife without the benefit of
marriag. They acquired properties during their cohabitation but ended after nine years.
Gina filed a complaint for partition and recovery of personal property with receivership
against petitioner. The court ordered petitioner to file the pre-trial brief but he failed to do
so. The trial court declared him in default. He filed a motion for reconsideration but was
denied.
33
Gina was allowed to present evidence ex parte. A decision was rendered in favor of
Gina. The CA affirmed the decision and ruled that the propriety of order which declared
the petitioner in default became moot and academic in view of the effectivity of the 1997
Rules of Civil Procedure. It explained that the new rule now requires the filing of pre-trial
brief and the defendant’s non-compliance entitles the plaintiff to present evidence ex
parte.

Issue: Whether the trial court erred in allowing Gina to present evidence ex parte.

Held: Under Seciton 6 of Rule 18 of 1997 Rules of Civil Procedure, the failure of the
defendant to file a pre-trial brief shall have the same effect as failure to appear at the
pre-trial, the plaintiff may present evidence ex parte and court shall render judgment on
the basis thereof. The remedy of the defendant is to file a motion for reconsideration
showing his failure has a valid and meritorious defense.

In the case at bar, petitioner insists that his failure to file pre-trial is justified because he
was not represented by counsel. The justification is not sufficient to set aside the order
directing private respondent to present evidence ex parte, in as much as the petitioner
chose at his own risk not to be represented by counsel. Even without the assistance of
a lawyer, petitioner was able to file a motion for extension to file answer, the required
answer stating therein the special and affirmative defenses, and several other motions.
If it were true that petitioners did not understand the importance of order directing him to
file a pre-trial brief, he could have inquired from the court and file a motion for extension
of time to file the brief. Pre-trial rules are not to be belittled or dismissed because their
non-observance may result in prejudice to a party’s substantive rights. Like all rules,
they should be followed except only for the most persuasive reason to relax the
application of the rules. In civil cases, while assistance of a lawyer is desirable, it is not
indispensable.

However, the CA erred in its ruling. While the rules may indeed be applied retroactively,
the same is not called for in the case at bar. Even before the 1997 Rules took effect, the
filing of the brief was required under an SC-Circular.

Rule 19 - Intervention

1. Mactan-Cebu International Airport Authority v. Heirs of Minoza, G.R. No. 186045, 2

February 2011, 641 SCRA 520

FACTS:
On July 6, 1998, a Complaint for Reconveyance, Cancellation of
Defendants Title, Issuance of New Title to Plaintiffs and Damages
was filed by Leila M. Hermosisima (Leila) for herself and on behalf
of the other heirs of the late Estanislao Mioza. The complaint
alleged that Leilas late great grandfather, Estanislao Mioza, was
the registered owner of Cadastral Lot Nos. 986 and 991-A, located
at Banilad Estate, Cebu City, per TCT Nos. RT-6101 (T-10534) and
RT-6102 (T10026). It was, likewise, alleged that the late Estanislao
Mioza had three children, namely, Adriana, Patricio, and Santiago,
all surnamed Mioza. In the late 1940s, the National Airports
Corporation (NAC) embarked in an expansion project of the Lahug
Airport. For said purpose, the NAC acquired several properties
which surrounded the airport either through negotiated sale or
through expropriation. Among the properties that were acquired
by the NAC through a negotiated sale were Lot Nos. 986 and 991-
A.
34
Leila claimed that their predecessors-in-interest, specifically,
Adriana, Patricio, and Santiago executed a Deed of Sale on
February 15, 1950 conveying the subject lots to the NAC on the
assurance made by the latter that they (Leilas predecessors-in-
interest) can buy the properties back if the lots are no longer
needed. Consequently, they sold Lot No. 986 to the NAC for
only P157.20 and Lot No. 991-A for P105.40. However, the
expansion project did not push through. More than forty years
after the sale, plaintiffs informed the NACs successor-in-interest,
the Mactan-Cebu International Airport Authority (MCIAA), that
they were exercising the buy-back option of the agreement, but
the MCIAA refused to allow the repurchase on the ground that the
sale was in fact unconditional.
The MCIAA, through the Office of the Solicitor General (OSG), filed
an Answer with Counterclaim.
After the parties filed their respective pleadings, trial ensued.
On November 16, 1999, before the MCIAA could present evidence
in support of its case, a Motion for Intervention, with an attached
Complainant-in-Intervention, was filed before the Regional Trial
Court (RTC) of Cebu City, Branch 22, by the heirs of Filomeno T.
Mioza, represented by Laureano M. Mioza; the heirs of Pedro T,
Mioza, represented by Leoncio J. Mioza; and the Heirs of Florencia
T. Mioza, represented by Antonio M. Urbiztondo (Intervenors), who
claimed to be the true, legal, and legitimate heirs of the late
Estanislao Mioza. The intervenors alleged in their complaint (1)
that the plaintiffs in the main case are not related to the late
spouses Estanislao Mioza and Inocencia Togono whose true and
legitimate children were: Filomeno, Pedro, and Florencia, all
surnamed Mioza; (2) that, on January 21, 1958, Adriana, Patricio,
and Santiago, executed, in fraud of the intervenors, an
Extrajudicial Settlement of the Estate of the late spouses
Estanislao Mioza and Inocencia Togono and adjudicated unto
themselves the estate of the deceased spouses; and (3) that, on
February 15, 1958, the same Adriana, Patricio, and Santiago,
fraudulently, deceitfully, and in bad faith, sold Lot Nos. 986 and
991-A to the NAC.

On February 18, 2000, the RTC of Cebu City, Branch 22, issued an
Order denying the Motion for Intervention.

In denying the motion, the trial court opined that the ownership of
the subject lots was merely a collateral issue in the action. The
principal issue to be resolved was whether or not the heirs of the
late Estanislao Mioza whoever they may be have a right to
repurchase the said lots from the MCIAA. Consequently, the rights
being claimed by the intervenors should be asserted in and would
be fully protected by a separate proceeding. Moreover, if the
motion was granted, it would unduly delay the proceedings in the
instant case. Finally, the complaint-in-intervention was flawed,

35
considering that it was not verified and does not contain the
requisite certification of non-forum shopping.

The intervenors filed a Motion for Reconsideration, to which was

attached a Complaint-in-Intervention with the required Verification
and Certificate of Non-Forum Shopping. However, the RTC denied
the motion in its Order dated July 25, 2000.

Aggrieved, the intervenors sought recourse before the CA.

In ruling for the intervenors, the CA ratiocinated that contrary to
the findings of the trial court, the determination of the true heirs
of the late Estanislao Mioza is not only a collateral, but the focal
issue of the case, for if the intervenors can prove that they are
indeed the true heirs of Estanislao Mioza, there would be no more
need to determine whether the right to buy back the subject lots
exists or not as the MCIAA would not have acquired rights to the
subject lots in the first place. In addition, to grant the motion for
intervention would avoid multiplicity of suits. As to the lack of
verification and certification on non-forum shopping, the CA
opined that the filing of the motion for reconsideration with an
appended complaint-in-intervention containing the required
verification and certificate of non-forum shopping amounted to
substantial compliance of the Rules.

ISSUE: The court of appeals (cebu city) gravely erred in allowing

respondents to intervene?

HELD: YES

At the outset, on the procedural aspect, contrary to petitioners

contention, the initial lack of the complaint-in-intervention of the
requisite verification and certification on non-forum shopping was
cured when the intervenors, in their motion for reconsideration of
the order denying the motion to intervene, appended a complaint-
in-intervention containing the required verification and certificate
of non-forum shopping.

Moreover, as to the certification against forum shopping, non-

compliance therewith or a defect therein, unlike in verification, is
generally not curable by its subsequent submission or correction
thereof, unless there is a need to relax the Rules on the ground of
substantial compliance or presence of special circumstances or
compelling reasons. Also, the certification against forum shopping
must be signed by all the plaintiffs or petitioners in a case;
otherwise, those who did not sign will be dropped as parties to the
case. Under reasonable or justifiable circumstances, however, as
when all the plaintiffs or petitioners share a common interest and
invoke a common cause of action or defense, the signature of
only one of them in the certification against forum shopping
substantially complies with the Rule.

36
Intervention is a remedy by which a third party, not originally
impleaded in the proceedings, becomes a litigant therein to
enable him, her or it to protect or preserve a right or interest
which may be affected by such proceedings. It is a proceeding in a
suit or action by which a third person is permitted by the court to
make himself a party, either joining plaintiff in claiming what is
sought by the complaint, or uniting with defendant in resisting the
claims of plaintiff, or demanding something adversely to both of
them; the act or proceeding by which a third person becomes a
party in a suit pending between others; the admission, by leave of
court, of a person not an original party to pending legal
proceedings, by which such person becomes a party thereto for
the protection of some right of interest alleged by him to be
affected by such proceedings.

Section 1, Rule 19 of the Rules of Court:

Under this Rule, intervention shall be allowed when a person has
(1) a legal interest in the matter in litigation; (2) or in the success
of any of the parties; (3) or an interest against the parties; (4) or
when he is so situated as to be adversely affected by a
distribution or disposition of property in the custody of the court
or an officer thereof. Moreover, the court must take into
consideration whether or not the intervention will unduly delay or
prejudice the adjudication of the rights of the original parties, and
whether or not the intervenors right or interest can be adequately
pursued and protected in a separate proceeding.

In the case at bar, the intervenors are claiming that they are the
legitimate heirs of Estanislao Mioza and Inocencia Togono and not
the original plaintiffs represented by Leila Hermosisima. True, if
their allegations were later proven to be valid claims, the
intervenors would surely have a legal interest in the matter in
litigation. Nonetheless, this Court has ruled that the interest
contemplated by law must be actual, substantial, material, direct
and immediate, and not simply contingent or expectant. It must
be of such direct and immediate character that the intervenor will
either gain or lose by the direct legal operation and effect of the
judgment. Otherwise, if persons not parties to the action were
allowed to intervene, proceedings would become unnecessarily
complicated, expensive and interminable

2. Ombudsman v. Sison, G.R No. 185954, 16 February 2010, 612 SCRA 702

FACTS: On October 11, 2004, the Isog Han Samar Movement, represented by Fr. Noel Labendia
of the Diocese of Calbayog, Catbalogan, Samar, filed a letter-complaint addressed to then
Ombudsman, Hon. Simeon Marcelo, accusing Governor Milagrosa T. Tan and other local public
officials of the Province of Samar, including respondent Maximo D. Sison, of highly anomalous
transactions entered into by them amounting to several millions of pesos. Sison was the
Provincial Budget Officer.

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The letter-complaint stemmed from the audit investigation dated August 13, 2004 conducted by
the Legal and Adjudication Office (LAO), Commission on Audit (COA), which found, among
others, that various purchases totaling PhP 29.34 million went without proper bidding
procedures and documentations; that calamity funds were expended without a State of
Calamity having been declared by the President; and that purchases for rice, medicines, electric
fans, and cement were substantially overpriced.

On January 24, 2005, the Office of the Ombudsman, through Director Jose T. De Jesus, Jr., found
basis to proceed with the administrative case against the impleaded provincial officials of
Samar, docketed as OMB-C-A-05-0051-B. The latter were then required to file their counter-
affidavits and countervailing evidence against the complaint.

On May 6, 2005, Sison submitted his Position Paper to the Office of the Ombudsman and
reiterated that he had not participated in the alleged anomalous purchases and use of public
funds by the Province of Samar.

On August 22, 2006, the Office of the Ombudsman rendered a Decision, finding Sison and
several other local officials of the Province of Samar guilty of grave misconduct, dishonesty, and
conduct prejudicial to the best interest of the service and dismissing him from service.

Aggrieved, Sison appealed to the CA via a Petition for Review under Rule 43, docketed as CA-
G.R. SP No. 96611. On June 26, 2008, the CA rendered a decision reversing and setting aside the
decision of the Office of the Ombudsman against Sison.

In ruling thus, the CA held that the Office of the Ombudsman failed to adduce substantial
evidence in order to convict Sison. On July 22, 2008, the Office of the Ombudsman filed an
Omnibus Motion for Intervention and to Admit Attached Motion for Reconsideration, which was
subsequently denied by the CA in its assailed resolution of December 18, 2008.

ISSUE: Whether the [CA] gravely erred in denying petitioner's right to intervene in the
proceedings, considering that (a) the Office of the Ombudsman has sufficient legal interest
warranting its intervention in the proceedings before the [CA] since it rendered the subject
decision pursuant to its administrative authority over public officials and employees; and (b)
contrary to the appellate court a quo's ruling, petitioner Office of the Ombudsman filed its
Omnibus Motion to Intervene and to Admit Attached Motion for Reconsideration on a patently
erroneous decision of the [CA] which has not yet attained finality.

HELD: To warrant intervention under Rule 19 of the Rules of Court, two requisites must concur:
(1) the movant has a legal interest in the matter in litigation; and (2) intervention must not
unduly delay or prejudice the adjudication of the rights of the parties, nor should the claim of
the intervenor be capable of being properly decided in a separate proceeding. The interest,
which entitles one to intervene, must involve the matter in litigation and of such direct and
immediate character that the intervenor will either gain or lose by the direct legal operation and
effect of the judgment.

The Office of the Ombudsman is not an appropriate party to intervene in the instant case. It
must remain partial and detached. More importantly, it must be mindful of its role as an
adjudicator, not an advocate.

It is an established doctrine that judges should detach themselves from cases where their
decisions are appealed to a higher court for review. The raison d'etre for such a doctrine is the
fact that judges are not active combatants in such proceeding and must leave the opposing
parties to contend their individual positions and the appellate court to decide the issues
without the judges' active participation. When judges actively participate in the appeal of their
judgment, they, in a way, cease to be judicial and have become adversarial instead.

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It should be noted that the Office of the Ombudsman was aware of the appeal filed by Sison.
The Rules of Court provides that the appeal shall be taken by filing a verified petition for review
with the CA, with proof of service of a copy on the court or agency a quo. Clearly, the Office of
the Ombudsman had sufficient time within which to file a motion to intervene. As such, its
failure to do so should not now be countenanced. The Office of the Ombudsman is expected to
be an "activist watchman," not merely a passive onlooker.

In this case, it cannot be denied that the Omnibus Motion for Intervention was belatedly filed.
As we held in Rockland Construction Co., Inc. v. Singzon, Jr., no intervention is permitted after a
decision has already been rendered.

In light of the foregoing considerations, all other issues raised in the petition are rendered moot
and academic and no further discussion is necessary.

3. Pacana –Contreras v. Rovila Water Supply, Inc., G.R. No. 168979, 2 December
2013, 711 SCRA 219

FACTS:

Petitioners Rebecca Pacaña-Contreras and Rosalie Pacaña, children of Lourdes Teves Pacaña and
Luciano Pacaña, filed the present case against Rovila Inc., Earl, Lilia, Dalla and Marisa for
accounting and damages. The petitioners filed the complaint in their own names although
Rosalie was authorized by Lourdes through a sworn declaration and special power of attorney
(SPA).

The respondents filed a motion to dismiss on the grounds, among others, that the petitioners are
not the real parties in interest to institute and prosecute the case and that they have no valid cause
of action against the respondents.

The RTC denied the respondents’ motion to dismiss as well as respondents’ motion for
reconsideration.

The respondents filed a petition for certiorari under Rule 65 of the Rules of Court with the Court
of Appeals, invoking grave abuse of discretion in the denial of their motion to dismiss. The CA
granted the petition and ruled that the RTC committed grave abuse of discretion as the petitioners
filed the complaint and the amended complaint as attorneys-in-fact of their parents. As such, they
are not the real parties in interest and cannot bring an action in their own names.
The petitioners filed the present petition and argued, among others, that in annulling the
interlocutory orders, the CA unjustly allowed the motion to dismiss which did not conform to the
rules. Specifically, the motion was not filed within the time for, but before the filing of, the
answer to the amended complaint, nor were the grounds raised in the answer. Citing Section 1,
Rule 9 of the Rules of Court, the respondents are deemed to have waived these grounds, as
correctly held by the RTC.

The respondents argued that the grounds invoked in their motion to dismiss were timely raised,
pursuant to Section 2, paragraphs g and i, Rule 18 of the Rules of Court. Specifically, the nature
and purposes of the pre-trial include, among others, the dismissal of the action, should a valid
ground therefor be found to exist; and such other matters as may aid in the prompt disposition of
the action. Finally, the special civil action of certiorari was the proper remedy in assailing the
order of the RTC.

ISSUE: Whether the petition for certiorari under Rule 65 is a proper remedy for a denial of a
motion to dismiss attended by grave abuse of discretion.

RULING: YES.

We find the petition meritorious.

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In Barrazona v. RTC, Branch 61, Baguio City, the Court held that while an order denying a
motion to dismiss is interlocutory and non-appealable, certiorari and prohibition are proper
remedies to address an order of denial made without or in excess of jurisdiction. The writ of
certiorari is granted to keep an inferior court within the bounds of its jurisdiction or to prevent it
from committing grave abuse of discretion amounting to lack or excess of jurisdiction.

The motion to dismiss in the present case based on failure to state a cause of action was not
timely filed and was thus waived.

Rule 9 of the Rules of Court which states that defenses and objections not pleaded either in a
motion to dismiss or in the answer are deemed waived, except for the following grounds: 1) the
court has no jurisdiction over the subject matter; 2) litis pendencia; 3) res judicata; and 4)
prescription. Therefore, the grounds not falling under these four exceptions may be considered as
waived in the event that they are not timely invoked. As the respondents’ motion to dismiss was
based on the grounds which should be timely invoked, material to the resolution of this case is
the period within which they were raised. Both the RTC and the CA found that the motion to
dismiss was only filed after the filing of the answer and after the pre-trial had been concluded.

The Court cannot uphold the dismissal of the present case based on the grounds invoked by the
respondents which they have waived for failure to invoke them within the period prescribed by
the Rules.

Therefore, the RTC did not commit grave abuse of discretion in issuing the assailed orders
denying the respondents’ motion to dismiss and motion for reconsideration.

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