RULE 6, SEC. 3 ZAIDA ALBERTO vs. CA, 2000 FACTS: Spouses Alano retained the legal services of Atty.

Zaida Ruby S. Alberto to represent them before the Securities and Exchange Commission (SEC) in an action to recover real properties, money and other assets that may pertain to them by virtue of their stockholdings in the Natalia Realty, Inc. Both parties formalized their conformity in a retainer agreement, the salient feature of which is for the spouses to pay Atty. Alberto on a contingent basis the following: a) the equivalent in kind of 10% of whatever real estate may be awarded, and b) the sum P200,000.00. In accordance with said Agreement, Atty. Alberto filed on behalf of the spouses a SEC Case, an action for liquidation, accounting and damages against Eugenio S. Baltao and five other persons of Natalia Realty, Inc., and appeared at the hearings thereof. Subsequently, Atty. Alberto learned that the spouses moved to dismiss the SEC Case which motion was confirmed in a manifestation by Baltao and Natalia Realty, Inc. It appeared that during the pendency of the case, the opposing parties reached a settlement without consulting Atty. Alberto. Atty. Alberto only learned of the settlement when she received a copy of a SEC order giving Baltao and Natalia Realty, Inc. 3 days to comment on the spouses' motion to dismiss on account of said settlement. In effect, Baltao and Natalia Realty, Inc. joined the spouses in their motion to dismiss on account of a satisfactory settlement having been reached between them in said SEC case. Accordingly, the said case was dismissed. When confronted, the spouses admitted that a settlement had indeed been reached and that they expected to receive 35 hectares of land. Atty. Alberto demanded the payment of the fees stipulated in their retainer agreement, however, respondent-spouses refused to pay despite repeated demands. Atty. Alberto was thus constrained to file a Complaint for collection of sum of money with damages against respondent-spouses. The RTC declared the attorney's fees awarded in the abovecited decision constitute a lien on the properties subject of the case and ordered the Register of Deeds to annotate said lien on the covering certificates of title and their derivatives. When the above-cited decision became final and executory,

Atty. Alberto caused the issuance of a writ of execution. However, per Sheriff's Return, only P3,500.00 of personal properties of respondent-spouses were levied. Apparently, Natalia Realty, Inc. had sold to the spouses daughter Yolanda Alano, 23 hectares out of the 32.4 hectares given to them as settlement of the SEC case. The sale was executed 6 days before the spouses moved to dismiss the SEC case. This discovery prompted Atty. Alberto to file a complaint, and thereafter, a second Amended Complaint to declare the deed of sale null and void ab initio on the ground that the transfer of the subject parcels of land to Yolanda Alano was simulated. Petitioner likewise caused the annotation of a notice of lis pendens on the transfer certificates of title. ISSUE: WON the complaint of Atty. Alberto has sufficient cause of action. HELD: YES. To determine the sufficiency of a cause of action, only the facts alleged in the complaint and no other should be considered; and that the test of sufficiency of the facts alleged in a petition or complaint to constitute a cause of action is whether, admitting the facts alleged, the court could render a valid judgment upon the same in accordance with the prayer of the petition or complaint. In determining whether allegations of a complaint are sufficient to support a cause of action, it must be borne in mind that the complaint does not have to establish or allege facts proving the existence of a cause of action at the outset; this will have to be done at the trial on the merits of the case. To sustain a motion to dismiss for lack of cause of action, the complaint must show that the claim for relief does not exist. The sufficiency of Atty. Albertos cause of action in the second Amended Complaint is readily apparent. A right in her favor was created by virtue of the retainer agreement executed between her and respondent-spouses. This right was confirmed and upheld by the RTC when it ruled in her favor in the Civil Case for collection of sum of money and damages. Correspondingly, respondent-spouses had the obligation to honor and not to violate the provisions of the retainer agreement it entered into with petitioner.

RATIO: GENERAL RULE: In resolving a motion to dismiss on the ground of failure to state a cause of action, only the averments in the complaint and no other are to be consulted. EXCEPTIONS: First: All documents attached to a complaint, the due execution and genuineness of which are not denied under oath by the defendant, must be considered as part of the complaint without need of introducing evidence thereon. Second: Other pleadings submitted by the parties, in addition to the complaint, may be considered in deciding whether the complaint should be dismissed for lack of cause of action. In other words, a complaint should not be dismissed for insufficiency of cause of action unless it appears clearly from the face of the complaint that the plaintiff is not entitled to any relief under any state of facts which could be proved within the facts alleged therein. In the case at bar, reading of said complaint plus the attached documents and pleadings show that petitioner is entitled to relief.

RULE 6, SEC. 7 EVANGELINE ALDAY vs. FGU INSURANCE, 2001 FACTS: FGU Insurance Corporation filed a complaint with the RTCMakati alleging that Evangeline K. Alday owed it a sum of money representing unliquidated cash advances, unremitted costs of premiums and other charges incurred by petitioner in the course of her work as an insurance agent for the corporation. FGU Insurance also prayed for exemplary damages, attorney's fees, and costs of suit. Alday filed her answer and by way of counterclaim, asserted her right for the payment of a sum of money, representing direct commissions, profit commissions and contingent bonuses earned from 1 July 1986 to 7 December 1986, and for accumulated premium reserves amounting to P500,000.00. In addition, Alday prayed for attorney's fees, litigation expenses, moral damages and exemplary damages for the allegedly unfounded action filed by respondent. FGU Insurance filed a "Motion to Strike Out Answer With Compulsory Counterclaim And To Declare Defendant In Default" because Aldays answer was allegedly filed out of time. However, the trial court denied the motion and similarly rejected FGU Insurances motion for reconsideration. A few weeks later, on FGU Insurance filed a motion to dismiss petitioner's counterclaim, contending that the trial court never acquired jurisdiction over the same because of the non-payment of docket fees by Alday. In response, Alday asked the trial court to declare her counterclaim as exempt from payment of docket fees since it is compulsory and that respondent be declared in default for having failed to answer such counterclaim. ISSUE: WON the counterclaim of Alday is compulsory in nature. HELD: NO. Aldays counterclaim for commissions, bonuses, and accumulated premium reserves is merely permissive. The evidence required to prove petitioner's claims differs from that needed to establish respondent's demands for the recovery of cash accountabilities from petitioner, such as cash advances and costs of premiums. The recovery of respondent's claims is not contingent or dependent upon establishing petitioner's counterclaim, such that conducting

separate trials will not result in the substantial duplication of the time and effort of the court and the parties. However, petitioner's claims for damages, allegedly suffered as a result of the filing by respondent of its complaint, are compulsory. RATIO: A compulsory counterclaim is one which, being cognizable by the regular courts of justice, arises out of or is connected with the transaction or occurrence constituting the subject matter of the opposing party's claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction. In determining whether a counterclaim is compulsory or permissive, summarized as follows: 1) Are the issues of fact and law raised by the claim and counterclaim largely the same? 2) Would res judicata bar a subsequent suit on defendant's claim absent the compulsory counterclaim rule? 3) Will substantially the same evidence support or refute plaintiff's claim as well s defendant's counterclaim? 4) Is there any logical relation between the claim and the counterclaim? Another test is the "compelling test of compulsoriness" which requires "a logical relationship between the claim and counterclaim, that is, where conducting separate trials of the respective claims of the parties would entail a substantial duplication of effort and time by the parties and the court."

RULE 6, SEC. 7 FELIPE YULIENCO vs. CA, 1999 FACTS: A Civil Case was instituted by Advance Capital Corporation (ACC) against Felipe Yulienco to recover the amount of P30,631,162.19 plus interests and penalty, which was apparently extended as a loan to the petitioner, as evidenced by four promissory notes. In its complaint, the ACC alleged that Yulienco failed and refused to pay the amounts reflected in the promissory notes upon their maturity and despite several demands to pay made to the petitioner. Yulienco filed his answer alleging in sum, that the trial court cannot acquire jurisdiction over ACC's complaint because there is another case pending between ACC and him (SP Civil case in RTC-Makati which involves a real action), involving the same subject matter, and that ACC's complaint should have been filed as a necessary and compulsory counterclaim in the said case. ISSUE: WON the counterclaim filed by ACC is a compulsory counterclaim. HELD: NO. Each averment by ACC for the collection of a sum of money covered by the Promissory Notes is not a "matter" that could have been raised as counterclaim in the injunction suit. The Special Civil Case filed in the RTC of Makati City is basically an injunction suit, a petition for prohibition. On the other hand, the Civil Case in the case at bar is an ordinary action for collection of sums of money. The promissory notes in both cases differ from and are not related to each other. There is, therefore, a dissimilarity in the subject matter of both cases arising from separate and distinct transactions and necessarily requiring different evidence to support the divergent claims. More importantly, the "one compelling test of compulsoriness" i.e., the logical relationship between the claim and counterclaim, does not apply here. To reiterate, there is no logical relationship between YULIENCO's petition for injunctive relief and ACC's collection suit, hence separate trials of the respective claims of the parties will not entail a

substantial duplication of effort and time as the factual and/or legal issues involved, as already explained, are dissimilar and distinct. RATIO: A counterclaim is defined as any claim for money or other relief which a defending party may have against an opposing party. A counterclaim is compulsory if: a) it arises out of, or is necessarily connected with, the transaction or occurrence which is the subject matter of the opposing party's claim; b) it does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction; and c) the court has jurisdiction to entertain the claim. In other words, a compulsory counterclaim cannot be made the subject of a separate action but should be asserted in the same suit involving the same transaction or occurrence giving rise to it. The criteria or tests by which the compulsory or permissive nature of specific counterclaims can be determined are as follows: 1) Are the issues of fact and law raised by the claim and counterclaim largely the same? 2) Would res judicata bar a subsequent suit on defendant's claim absent the compulsory counterclaim rule? 3) Will substantially the same evidence support or refute plaintiff's claim as well as defendant's counterclaim?

4) Is there any logical relation between the claim and the

counterclaim?

RULE 6, SEC. 11 SAMALA vs. VICTOR, 1989 FACTS: Plaintiff Emerita C. Jumanan was riding a passenger jeepney on her way from her residence to her place of work at the Department (now Ministry) of Public InformationThe said passenger jeepney, which is owned by defendants Felisa and Tomas Garcia, was then being driven by defendant Virgilio Profeta. While the jeepney was about to make a left turn, a delivery panel of the Luau restaurant driven by Domingo Medina was approaching from the opposite direction, followed by the Saint Raphael Transit passenger bus, owned by third party defendant Purificacion Samala and being driven by third party defendant Leonardo Esguerra. The Saint Raphael Transit passenger bus was running fast and after overtaking a vehicle the Saint Raphael Transit bumped the back portion of the delivery panel so violently and strongly causing the delivery panel to swerve abruptly to the path of the oncoming passenger jeepney in which plaintiff Emerita C. Jumanan was on board. So forceful was the impact of the collision between the delivery panel and the passenger jeepney that several passengers of the jeepney were injured, including plaintiff Emerita C. Jumanan. Jumanan, filed before the CFI of Cavite a complaint for damages arising from physical injuries suffered by her as a passenger of the jeepney allegedly owned and operated by the four-named defendants, spouses Garcia, Jarin and Madlangbayan, and driven by the last named defendant, Profeta. In their separate answers, both Jarin and Madlangbayan denied liability, claiming they no longer owned the passenger jeepney at the time of the incident in question, said ownership having been transferred to the spouses Garcia. While admitting to be the owners of the passenger jeepney, the spouses Garcia nonetheless denied liability, alleging that the vehicular collision complained of was attributable to the fault and negligence of the owner and driver of the Saint Raphael Transit passenger bus. Consequently, a third-party complaint was filed by defendant-spouses Garcia and Virgilio Profeta against Purificacion Samala and Leonardo Esguerra, owner and driver, respectively, of the Saint Raphael Transit Bus. The latter defendants, in turn, filed a fourth-party complaint against the insurer of the Saint Raphael Transit Bus, Imperial Insurance, Inc., which was declared in default for failure to appear at the pre-trial conference.

ISSUE: What is the nature of a third-party complaint? HELD: The case at bar is one in which the third party defendants are brought into the action as directly liable to the plaintiffs upon the allegation that "the primary and immediate cause as shown by the police investigation of said vehicular collision between the 3 vehicles was the recklessness and negligence and lack of imprudence of the third-party defendant Virgilio (should be Leonardo) Esguerra y Ledesma then driver of the passenger bus." The effects are that "plaintiff and third party are at issue as to their rights respecting the claim" and "the third party is bound by the adjudication as between him and plaintiff." It is not indispensable in the premises that the defendant be first adjudged liable to plaintiff before the third-party defendant may be held liable to the plaintiff, as precisely, the theory of defendant is that it is the third party defendant, and not he, who is directly liable to plaintiff. RATIO: The rule is that, a person not a party to an action may be impleaded by the defendant either (a) on an allegation of liability to the latter; (b) on the ground of direct liability to the plaintiff-, or, (c) both (a) and (b). The situation in (a) is covered by the phrase "for contribution, indemnity or subrogation;" while (b) and (c) are subsumed under the catch all "or any other relief, in respect of his opponent's claim." The situation contemplated by appellants would properly pertain to situation (a) above wherein the third party defendant is being sued for contribution, indemnity or subrogation, or simply stated, for a defendant's "remedy over". It is immaterial that the third-party plaintiff asserts a cause of action against the third party defendant on a theory different from that asserted by the plaintiff against the defendant. It has likewise been held that "a defendant in a contract action may join as third-party defendants those liable to him in tort for the plaintiff s claim against him or directly to the plaintiff.

RULE 6, SEC. 12, 14 LAFARGE vs. CCC, 2004 FACTS: The origins of the present controversy can be traced to the Letter of Intent (LOI) executed by both parties whereby Lafarge Cement Philippines, Inc. (Lafarge) -- on behalf of its affiliates and other qualified entities, including Luzon Continental Land Corporation (LCLC) -- agreed to purchase the cement business of Continental Cement Corporation (CCC). Both parties entered into a Sale and Purchase Agreement (SPA). At the time of the foregoing transactions, Lafarge, LCLC were well aware that CCC had a case pending with the Supreme Court. In anticipation of the liability that the SC might adjudge against CCC, the parties, under the SPA, allegedly agreed to retain from the purchase price a portion of the contract price. This amount was to be deposited in Citibank for payment to APT, the petitioner the pending case. However, Lafarge allegedly refused to apply the sum to the payment to APT, despite the subsequent finality of the Decision in that case in favor of the latter and the repeated instructions of CCC. Fearful that non-payment to APT would result in the foreclosure, not just of its properties covered by the SPA with Lafarge but of several other properties as well, CCC filed before the RTC of Quezon City, a "Complaint with Application for Preliminary Attachment" against Lafarge. The Complaint prayed, among others, that Lafarge be directed to pay the "APT Retained Amount" referred to in their SPA. In the meantime, to avoid being in default and without prejudice to the outcome of their appeal, Lafarge filed their Answer and Compulsory Counterclaims ad Cautelam before the trial court. In their Answer, they denied the allegations in the Complaint. They prayed -- by way of compulsory counterclaims against Respondent CCC, its majority stockholder and president Lim, and its corporate secretary Mariano -- the sums for actual damages, exemplary damages, each as moral damages, and as attorney's fees plus costs of suit. Lafarge alleged that CCC, through Lim and Mariano, had filed the "baseless" Complaint in the Civil Case and procured the Writ of Attachment in bad faith. On behalf of Lim and Mariano who had yet to file any responsive pleading, CCC moved to dismiss petitioners' compulsory counterclaims on grounds that essentially

constituted the very issues for resolution in the instant Petition. ISSUE: WON defendants in civil cases may implead in their counterclaims persons who were not parties to the original complaints. HELD: YES. A counterclaim is defined as any claim for money or other relief which a defending party may have against an opposing party. However, the general rule that a defendant cannot by a counterclaim bring into the action any claim against persons other than the plaintiff admits of an exception under Section 14, Rule 6 which provides that 'when the presence of parties other than those to the original action is required for the granting of complete relief in the determination of a counterclaim or cross-claim, the court shall order them to be brought in as defendants, if jurisdiction over them can be obtained.' The prerogative of bringing in new parties to the action at any stage before judgment is intended to accord complete relief to all of them in a single action and to avert a duplicity and even a multiplicity of suits thereby. The act of Respondent CCC as a solidary debtor -- that of filing a motion to dismiss the counterclaim on grounds that pertain only to its individual co-debtors -- is therefore allowed. However, a perusal of its Motion to Dismiss the counterclaims shows that Respondent CCC filed it on behalf of Co-respondents Lim and Mariano; it did not pray that the counterclaim against it be dismissed. Be that as it may, Respondent CCC cannot be declared in default. Jurisprudence teaches that if the issues raised in the compulsory counterclaim are so intertwined with the allegations in the complaint, such issues are deemed automatically joined. Counterclaims that are only for damages and attorney's fees and that arise from the filing of the complaint shall be considered as special defenses and need not be answered. While Respondent CCC can move to dismiss the counterclaims against it by raising grounds that pertain to individual defendants Lim and Mariano, it cannot file the same Motion on their behalf for the simple reason that it lacks the requisite authority to do so. A corporation has a legal personality entirely separate and distinct from that of its officers and cannot act for and on their behalf, without being so authorized. Thus, unless expressly adopted by Lim and

Mariano, the Motion to Dismiss the compulsory counterclaim filed by Respondent CCC has no force and effect as to them. While a compulsory counterclaim may implead persons not parties to the original complaint, the general rule -- a defendant in a compulsory counterclaim need not file any responsive pleading, as it is deemed to have adopted the allegations in the complaint as its answer -- does not apply. The filing of a responsive pleading is deemed a voluntary submission to the jurisdiction of the court; a new party impleaded by the plaintiff in a compulsory counterclaim cannot be considered to have automatically and unknowingly submitted to the jurisdiction of the court. A contrary ruling would result in mischievous consequences whereby a party may be indiscriminately impleaded as a defendant in a compulsory counterclaim; and judgment rendered against it without its knowledge, much less participation in the proceedings, in blatant disregard of rudimentary due process requirements. The correct procedure in instances such as this is for the trial court, per Section 12 of Rule 6 of the Rules of Court, to "order [such impleaded parties] to be brought in as defendants, if jurisdiction over them can be obtained," by directing that summons be served on them. In this manner, they can be properly appraised of and answer the charges against them. Only upon service of summons can the trial court obtain jurisdiction over them. In summary, the following pronouncements are made: 1. The counterclaims against Respondents CCC, Gregory T. Lim and Anthony A. Mariano are compulsory. 2. The counterclaims may properly implead Respondents Gregory T. Lim and Anthony A. Mariano, even if both were not parties in the original Complaint. 3. Respondent CCC or any of the three solidary debtors (CCC, Lim or Mariano) may include, in a Motion to Dismiss, defenses available to their co-defendants; nevertheless, the same Motion cannot be deemed to have been filed on behalf of the said co-defendants. 4. Summons must be served on Respondents Lim and Mariano before the trial court can obtain jurisdiction over them.

RULE 7, SEC. 2 PCIC vs. PNCC, 2009 FACTS: Philippine National Construction Corporation (PNCC) conducted a public bidding for the supply of labor, materials, tools, supervision, equipment, and other incidentals necessary for the fabrication and delivery of 27 tollbooths. Orlando Kalingo (Kalingo) won in the bidding and was awarded the contract. PNCC issued in favor of Kalingo Purchase Order (P.O.) No. 71024L for 25 units of tollbooths and P.O. No. 71025L for 2 units of tollbooths. These issuances were subject to the condition, among others, that each P.O. shall be covered by a surety bond and that the surety bond shall continue in full force until the supplier shall have complied with all the undertakings and covenants to the full satisfaction of PNCC. Kalingo, hence, posted surety bonds Surety Bond Nos. 27546 and 27547 issued by the PCIC and whose pertinent terms and conditions read: xxx a written extrajudicial demand must first be tendered to the surety, PCIC, within 15 days from the expiration date; otherwise PCIC shall not be liable thereunder and the obligee waives the right to claim or file any court action to collect on the bond. xxx PNCC released 2 checks to Kalingo representing the down payment and Kalingo in turn submitted the 2 PCIC surety bonds securing the down payments, which bonds were accepted by PNCC. Kalingo made partial/initial delivery of 4 units of tollbooths under P.O. No. 71024L. However, the tollbooths delivered were incomplete or were not fabricated according to PNCC specifications. He failed to deliver the other 23 tollbooths up to the time of filing of the complaint; despite demands, he failed and refused to comply with his obligation under the POs. 6 days before the expiration of the surety bonds and after the expiration of the delivery period provided for under the award, PNCC filed a written extrajudicial claim against PCIC notifying it of Kalingos default and demanding the repayment of the down payment on P.O. No. 71024L as secured by PCIC Bond No. 27547. The claim went unheeded despite repeated demands. For this reason, PNCC filed with the RTC Mandaluyong City a complaint for collection of a sum of money against Kalingo and PCIC. PNCC's complaint against PCIC called solely on PCIC Bond No. 27547; it did not raise or

plead collection under PCIC Bond No. 27546 which secured the down payment on P.O. No. 71025L. ISSUE: WON PNCC is entitled to collect under PCIC Bond NO. 27546, although collection thereunder was not specifically raised or pleaded in its complaint, because the bond was attached to the complaint and formed part of the records. HELD: NO. Rule 7, Section 2(c), of the Rules of Court, provides that a pleading shall specify the relief sought, but may add a general prayer for such further or other reliefs as may be deemed just and equitable. Under this rule, a court can grant the relief warranted by the allegation and the proof even if it is not specifically sought by the injured party the inclusion of a general prayer may justify the grant of a remedy different from or together with the specific remedy sought, if the facts alleged in the complaint and the evidence introduced so warrant. NEVERTHELESS, the SC did not grant PNCC the other relief of recovering under PCIC Bond No. 27546 because of the respect due the contractual stipulations of the parties. A general prayer for other reliefs just and equitable appearing on a complaint or pleading normally enables the court to award reliefs supported by the complaint or other pleadings, by the facts admitted at the trial, and by the evidence adduced by the parties, even if these reliefs are not specifically prayed for in the complaint. While it is true that PCICs liability under PCIC Bond No. 27546 would have been clear under ordinary circumstances (considering that Kalingo's default under his contract with PNCC is now beyond dispute), it cannot be denied that the bond contains a written claim provision, and compliance with it is essential for the accrual of PCICs liability and PNCCs right to collect under the bond. This provision is the law between the parties on the matter of liability and collection under the bond. For its failure to file a written claim with PCIC within 15 days from the bonds expiry date, PNCC clearly waived its right to collect under PCIC Bond No. 27546. That, wittingly or unwittingly, PNCC did not collect under one bond in favor of calling on the other creates no other conclusion than that the right to collect under the former had been lost. Consequently, PNCCs cause of action with respect to PCIC Bond No. 27546 cannot juridically exist and no relief therefore may be validly given.

RULE 7, SEC. 4 ROBERN vs. JUDGE JESUS QUITAIN, 1999 FACTS: Robern Development Corporation (Robern) is the registered owner of a parcel of land which the National Power Corporation (NPC) is seeking to expropriate. The property forms part of a proposed low-cost housing project in Inawayan, Binugao, Toril, Davao City. NPC filed a Complaint for Eminent Domain against Robern. Instead of filing an answer, Robern countered with a Motion to Dismiss, alleging: (a) that the Complaint suffered a jurisdictional defect for not showing that the action bore the approval of the NPC board of directors; (b) that Nemesio S. Caete, who signed the verification and certification in the Complaint, was not the president, the general manager or an officer specifically authorized under the NPC charter (RA 6395); (c) that the choice of property to be expropriated was improper, as it had already been intended for use in a lowcost housing project, a public purpose within the contemplation of law; and the choice was also arbitrary, as there were similar properties available within the area. Robern argued that Atty. Caete who signed the verification and certification of non-forum shopping was neither the president nor the general manager of NPC; and that, under Section 15-A of RA 6395, only the NPC chief legal counsel, under the supervision of the Office of the Solicitor General is authorized to handle legal matters affecting the government power corporation. On the other hand, NPC argues that Caete, as its regional legal counsel in Mindanao, is authorized to prepare the Complaint on its behalf. ISSUE: WON the disputed verification and certification of the Complaint by someone other than the president or the general manager of NPC was a fatal jurisdictional defect. HELD: NO. The disputed verification and certification was sufficient in form. Verification is intended to assure that the allegations therein have been prepared in good faith or are true and correct, not mere speculations. Generally, lack of verification is merely a formal defect that is neither jurisdictional nor fatal. Its absence does not divest the trial court of

jurisdiction. The trial court may order the correction of the pleading or act on the unverified pleading, if the attending circumstances are such that strict compliance with the rule may be dispensed with in order to serve the ends of justice.

RULE 7, SEC. 4 CHRISTINE CHUA vs. JORGE TORRES, 2005 FACTS: A complaint for damages was filed by Christine Chua before the RTC of Caloocan City. She impleaded her brother Jonathan Chua as a necessary co-plaintiff. Named as defendants in the suit were Jorge Torres and Antonio Beltran. Torres was the owner of a Caltex Service Center, while Beltran was an employee of the said establishment as the head of its Sales and Collection Division. The complaint alleged that Jonathan Chua issued in favor of the Caltex Service Center his personal RCBC Check in payment for purchases of diesel oil. However, the check was dishonored by the drawee bank when presented for payment on the ground that the account was closed. Beltran then sent Christine Chua a demand letter informing her of the dishonor of the check and demanding the payment thereof. Christine ignored the demand letter on the ground that she was not the one who issued the said check. Without bothering to ascertain who had actually issued the check, Beltran instituted against petitioner a criminal action for violation of B.P. 22. Subsequently, a criminal information was filed against her with the MTC of Caloocan. The MTC then issued a warrant of arrest against petitioner and even looked for her at her medical school. Christine Chua saw this as a malicious prosecution or serious defamation against her, who was not even the one who drew up the check. Hence, the Complaint. While Jonathan Chua was named as a plaintiff to the suit, it was explicitly qualified in the second paragraph of the complaint that he was being impleaded here -in as a necessary party-plaintiff. There was no allegation in the complaint of any damage or injury sustained by Jonathan, and the prayer therein expressly named Christine Chua as the only party to whom Torres and Beltran were sought to recompense. Neither did Jonathan Chua sign any verification or certification against forum-shopping, although Christine Chua did sign an attestation, wherein she identified herself as the principal plaintiff. ISSUE: Whether the absence of the signature in the required verification and certification against forum-shopping of a party misjoined as a plaintiff is a valid ground for the dismissal of the complaint.

HELD: NO. A misjoined party plaintiff has no business participating in the case as a plaintiff in the first place, and it would make little sense to require the misjoined party in complying with all the requirements expected of plaintiffs. The verification requirement is separate from the certification requirement. It is noted that as a matter of practice, the verification is usually accomplished at the same time as the certification against forum-shopping; hence the customary nomenclature, Verification and Certification of Non Forum-Shopping or its variants. Under Rule 4, Sec. 7, the verification requirement is significant, as it is intended to secure an assurance that the allegations in the pleading are true and correct and not the product of the imagination or a matter of speculation, and that the pleading is filed in good faith. The absence of a proper verification is cause to treat the pleading as unsigned and dismissible.

RULE 7, SEC. 5 ARQUIZA vs. CA. 2005 FACTS: Spouses Godofredo V. Arquiza and Remedios D. Arquiza, obtained a loan from Equitable PCIBank for P2.5 million. To secure the payment thereof, they executed a Real Estate Mortgage over their parcel of land covered by a TCT. When the spouses defaulted in the payment of their loan, Equitable PCIBank filed a petition for extrajudicial foreclosure of the real estate mortgage. A public auction was held and during which the mortgaged property, together with all the improvements existing thereon, was sold to the Equitable PCIBank as the highest bidder. Accordingly, a Certificate of Salehttp://www.lawphil.net/judjuris/juri2005/jun2005/gr_16 0479_2005.html - fnt4 over the property was issued in favor of the Equitable PCIBank. This was registered with the Registry of Deeds of Quezon City. Following the expiry date of the redemption period without the Sps. Arquiza having exercised their right to redeem the property, the Equitable PCIBank consolidated its ownership over the subject property. As a consequence, the Registry of Deeds issued TCT in the name of the Equitable PCIBank, cancelling the Sps. Arquizas former title. The Sps. Arquiza filed a complaint against Equitable PCIBank and the sheriffs with RTC of Quezon City for the declaration of the nullity of the promissory note, real estate mortgage and the foreclosure sale and damages with a plea for injunctive relief for the suspension redemption period. Meanwhile, Equitable PCIBank demanded that the Sps. Arquiza vacate and surrender possession of the subject property, but the latter refused to do so. This compelled Equitable PCIBank to file an Ex Parte Petition for Issuance of a Writ of Possession, also with the Quezon City RTC. Instead of acting on the petition and receiving the evidence of the Equitable PCIBank ex parte, the Sps. Arquiza filed their Answer alleging that (1) the Equitable PCIBank failed to incorporate a Certificate of Non-Forum Shopping in its petition; and (2) the petition was abated by the pendency of their complaint in a Civil Case No. involving the non-payment of their mortgage obligation, the validity of the foreclosure sale of the mortgaged property and their failure to redeem the same. The Sps. Arquiza prayed that the trial court dismiss the petition outright. They appended to their answer a copy of their amended and supplemental complaint in the Civil Case. ISSUE: WON a certificate of non-forum shopping was necessary in a petition for the issuance of a writ of possession which is not an initiatory pleading. HELD: NO. The certification against forum shopping is required only in a complaint or other initiatory pleading. The ex parte petition for the issuance of a writ of possession filed by the Equitable PCIBank is not an initiatory pleading. Although the Equitable PCIBank denominated its pleading as a petition, it is, nonetheless, a motion. What distinguishes a motion from a petition or other pleading is not its form or the title given by the party executing it, but rather its purpose. The office of a motion is not to initiate new litigation, but to bring a material but incidental matter arising in the progress of the case in which the motion is filed. A motion is not an independent right or remedy, but is confined to incidental matters in the progress of a cause. It relates to some question that is collateral to the main object of the action and is connected with and dependent upon the principal remedy. An application for a writ of possession is a mere incident in the registration proceeding. Hence, although it was denominated as a "petition," it was in substance merely a motion.

RULE 7, Sec. 5: DEFECTIVE LEVI STRAUSS vs. VOGUE TRADERS, 2005 FACTS: Levi Strauss & Co., the principal based in Delaware, USA, granted Levi Strauss (Phils.) a non-exclusive license to use LEVIS trademark, design, and name in the manufacturing, marketing, distribution, and sale of its clothing and other goods. The licensing agreement was renewed several times, the recent one being under Certificate of Registration No. 1379-A. Levi Strauss (Phils.) discovered the existence of some trademark registrations belonging to Vogue Traders which, in its view, were confusingly similar to its trademarks. Thus, it instituted two cases before the BPTTT for the cancellation of Vogue Traders trademark registrations. Levi Strauss (Phils.) then applied for the issuance of a search warrant on the premises of Vogue Traders Clothing Company, owned by one Tony Lim, with the Regional Trial Court of Manila. The search warrants were enforced and several goods belonging to respondent were seized. Vogue Traders filed a complaint for damages in RTC against Levi Strauss (Phils.). Vogue Traders sought to recover the seized assorted sewing materials, equipment, and finished products or the value thereof, in case the same had been destroyed or impaired as a result of the seizure. ISSUE: WON the certificate of non-forum shopping signed by Atty. Soriano, counsel for Vogue Traders was defective. HELD: YES. The requirement of certification against forum shopping under the Rules is to be executed by the petitioner, or in the case of a corporation, its duly authorized director or officer, but not petitioners counsel whose professional services have been engaged to handle the subject case. The reason is that it is the petitioner who has personal knowledge whether there are cases of similar nature pending with the other courts, tribunals, or agencies. Thus, in the present case, the Court of Appeals should have outrightly dismissed the petition for certiorari filed by the respondent (as therein petitioner in the appeals court) due to the defective certification of non-forum shopping. The

certification made by Atty. Soriano, counsel for the respondent, who is not one of its duly authorized directors or officers, is defective. Even if Atty. Soriano was the "in-house counsel," the fact remains that no board resolution, or even a Secretarys Certificate containing the board resolution, was submitted to show that he was indeed authorized to file the said petition in the Court of Appeals. RATIO: The certification against forum shopping is required to be accomplished by petitioner himself because only the petitioner himself has actual knowledge of whether or not he has initiated similar actions or proceedings in different courts or agencies. Even his counsel may be unaware of such fact as he may only be aware of the action for which he has been retained. As to corporations, the law requires that the certification could be made by its duly authorized director or officer. The Court also stresses that the petitioners non compliance and utter disregard of the rules cannot be rationalized by invoking the policy of liberal construction.

RULE 7, Sec. 5: DEFECTIVE TERESA GABRIEL vs. CA, 2007 FACTS: Teresa Gabriel et. al., are the heirs of the late Atty. Gabriel, who was designated as the sole executor of the last will and testament of the deceased Genaro G. Ronquillo (Ronquillo) whose will was probated in 1978. On the other hand, Ronquillo et. al., are the heirs of the testator Ronquillo. The probate court issued an Order fixing the amount of compensation of Atty. Gabriel as executor. At the time of the filing of the present petition, there has been no final liquidation of the Ronquillo estate. Upon the death of Atty. Gabriel on his uncollected compensation reached Php648,000.00. While still acting as executor, Atty. Gabriel, with prior approval of the probate court, sold three parcels of land. Due to certain disagreements between Atty. Gabriel and Ronquillo et. al., a portion of the proceeds was deposited with the probate court. The said sum included the compensation of Atty. Gabriel. Allegedly, to prevent the release of the compensation, Ronquillo et. al., filed a notice with the probate court that there was a pending tax investigation with the BIR concerning unpaid taxes of the estate from the sale of the land. Teresa Gabriel et. al., filed a Petition for Certiorari, Prohibition and Mandamus with Preliminary Injunction and Prayer for Temporary Restraining Order in the CA. They questioned the twin orders of the probate court, particularly (1) the courts refusal to order the release of the amount representing the compensation of Atty. Gabriel as the executor of the last will and testament; and (2) the courts insistence to hear respondents allegation of non-payment of taxes resulting from the sale of the properties for which reason the compensation of Atty. Gabriel should not be released until resolution by the probate court on this matter. In the meantime, the parties came to an agreement to divide the amount deposited in court. Subsequently, Teresa Gabriel et. al., questioned the Resolution rendered by the CA, the pertinent portion of which reads: xxx The verification and certification of nonforum shopping was signed by only one (Teresa S. Gabriel) of the seven petitioners, and there is no showing or proof that she was duly authorized to sign on behalf of her copetitioners.

ISSUE: WON there was substantial compliance with the certification of non-forum shopping before the CA. HELD: NO. In the petition filed by Teresa Gabriel et. al., in the CA, the verification and the certification against forum shopping were signed by Teresa Gabriel alone, albeit there were seven petitioners therein. In their Memorandum, they proffer the view that the signature of Teresa, being the mother of the rest of the petitioners, should be considered as substantial compliance, for she was willing to take the risk of contempt and perjury should she be found lying. According to them what is fatal is the utter lack of signatory in the certification. Regarding the certification against forum shopping, the Rules of Court provides that the plaintiff or the principal party shall certify under oath in the complaint or other initiatory pleading the requirements as mandated under Section 5, Rule 7. The said requirements are mandatory, and therefore, strict compliance thereof is necessary for the proper administration of justice. The SC has been consistent in stringently enforcing the requirement of verification and certification of non-forum shopping. When there is more than one petitioner, a petition signed solely by one of them is defective, unless he was authorized by his co-parties to represent them and to sign the certification. The attestation contained in the certification of non-forum shopping requires personal knowledge by the party who executed the same. In the instant case, it was not shown that Teresa was authorized by the other petitioners to file the petition. In the certification against forum shopping, the principal party is required to certify under oath as to the matters contained therein and failure to comply with the requirements shall not be curable by amendment but shall be a ground for the dismissal of the case. Personal knowledge of the party executing the same is important and a similar requirement applies to the verification. Thus, the verification and certification signed only by Teresa are utterly defective, and it is within the prerogative of the court to dismiss the petition. RATIO: Substantial compliance will not suffice in a matter involving strict observance. The attestation contained in the certification of non-forum shopping requires personal knowledge by the party who executed the same. To deserve the Court's consideration, petitioners must show reasonable cause for failure to personally sign the certification. They must convince the Court that the outright dismissal of the petition would defeat the administration of justice.

RULE 7, Sec. 5: DEFECTIVE ATTY. BAUTISTA vs. JUDGE CAUSAPIN, 2011 FACTS: The heirs of Baudelio T. Bautista, represented by Delia R. Bautista; the heirs of Aurora T. Bautista, represented by Reynaldo B. Mesina; Elmer B. Polangco; Nancy B. Polangco; and Gabriel Bautista (plaintiffs), through counsel, Atty. Bautista, filed a Complaint for Partition before the RTC against Jose Bautista and Domingo T. Bautista (defendants). Defendants had until January 26, 2006 to file their answer, but on January 24, 2006, they filed a motion for an extension of 15 days within which to file the said pleading. Judge Causapin granted defendants' motion in an Order. In the Resolution of Motion to Hold Defendants in Default Judge Causapin dismissed the complaint without prejudice on the ground that plaintiffs Reynaldo Mesina and Nancy Polangco did not sign the verification and certification on non-forum shopping attached to the complaint, in violation of Rule 7, Section 5 of the Rules of Court. He cited the ruling in Loquias v. Office of the Ombudsman, that "[w]here there are two or more plaintiffs or petitioners, a complaint or petition signed by only one of them is defective, unless he was authorized by his co-parties to represent them and to sign the certification." Consequently, Atty. Bautista filed the present administrative Complaint against Judge Causapin for Gross Ignorance of the Law. Atty. Bautista averred that Judge Causapin, in dismissing the complaint exhibited gross ignorance of the law and utter lack of professional competence. Atty. Bautista disputed the application of Loquias to the Civil Case and insisted that Cavile v. Heirs of Clarita Cavile was the more appropriate jurisprudence. In Cavile, the Supreme Court recognized the execution of the certificate of non-forum shopping by only one of the petitioners, on behalf of all other petitioners therein, as substantial compliance with the Rules of Court. In addition, Judge Causapin cannot motu proprio dismiss a case without complying with Rule 7, Section 5 of the Rules of Court which provides that the dismissal of a case without prejudice shall be upon motion and hearing. Atty. Bautista denied that there were other compulsory heirs who were not impleaded in the complaint in the Civil Case and even if there were, the non-inclusion of compulsory parties was not a valid ground for dismissal of the complaint. ISSUE: WON Judge Causapin was liable for gross ignorance of the law and should have applied the exception to the general rule.

HELD: YES. The SC found that Judge Causapin is administratively liable for gross ignorance of the law and gross misconduct. The rule is that the certificate of non-forum shopping must be signed by all the petitioners or plaintiffs in a case and the signing by only one of them is insufficient. However, the Court has also stressed that the rules on forum shopping, which were designed to promote and facilitate the orderly administration of justice, should not be interpreted with such absolute literalness as to subvert its own ultimate and legitimate objective. The rule of substantial compliance may be availed of with respect to the contents of the certification. This is because the requirement of strict compliance with the provisions regarding the certification of non-forum shopping merely underscores its mandatory nature in that the certification cannot be altogether dispensed with or its requirements completely disregarded. It does not thereby interdict substantial compliance with its provisions under justifiable circumstances. The execution by Thomas George Cavile, Sr. in behalf of all the other petitioners of the certificate of non-forum shopping constitutes substantial compliance with the Rules. All the petitioners, being relatives and co-owners of the properties in dispute, share a common interest thereon. They also share a common defense in the complaint for partition filed by the respondents. Thus, when they filed the instant petition, they filed it as a collective, raising only one argument to defend their rights over the properties in question. There is sufficient basis, therefore, for Thomas George Cavili, Sr. to speak for and in behalf of his co-petitioners that they have not filed any action or claim involving the same issues in another court or tribunal, nor is there other pending action or claim in another court or tribunal involving the same issues. Moreover, it has been held that the merits of the substantive aspects of the case may be deemed as "special circumstance" for the Court to take cognizance of a petition for review although the certification against forum shopping was executed and signed by only one of the petitioners. RATIO: The certificate of non-forum shopping should be signed by all the petitioners or plaintiffs in a case, and that the signing by only one of them is insufficient and constitutes a defect in the petition. The attestation requires personal knowledge by the party executing the same, and the lone signing petitioner cannot be presumed to have personal knowledge of the filing or non-filing by his co-petitioners of any action or claim the same as or similar to the current petition.

RULE 7, Sec. 5: DEFECTIVE CONCEPCION ANCHETA vs. METROBANK, 2005 FACTS: Metrobank filed a petition with the RTC for the issuance of a writ of possession over 7 parcels of covered by TCTs. In its petition, Metrobank alleged that the Maglalang Construction and Development Corporation (Maglalang Corporation) submitted a Real Estate Mortgage executed by Ariel N. Reyes (as attorney-in-fact of the registered owners of the property), to secure the payment of its loans. Upon the corporations failure to pay their loan accounts, Metrobank filed a petition for extrajudicial foreclosure of the real estate mortgage. Subsequently, the property was sold at a public auction, with Metrobank as the highest bidder. The ex-officio sheriff executed a Certificate of Sale which was consolidated later after the mortgagors failed to redeem the property within the period provided. Accordingly, Metrobank executed an Affidavit of Consolidation of Ownership. Thus, in a Letter Metrobank demanded that the mortgagors vacate the property otherwise, it would be impelled to file a petition for a writ of possession in the RTC of Manila. The mortgagors refused to vacate the property. The petition for the issuance of a writ of possession was docketed as an LRC It contained a Verification with Certificate of Non-Forum Shopping executed by Atty. Ramon S. Miranda, the Legal Officer of Metrobanks Legal Division. The RTC granted Metrobanks petition and issued a Writ of Possession. Concepcion R. Ancheta, one of the mortgagors under the Real Estate Mortgage executed in favor of Metrobank, filed an Urgent Motion for Intervention in the LRC case, praying that in the interest of substantial justice, fair play and equity, she be allowed to intervene, and that her opposition-inintervention appended thereto be admitted. Metrobank opposed her motion. But Ancheta insists that the certificate of non-forum shopping incorporated in the petition for a writ of possession filed by respondent Metrobank is defective because Atty. Miranda, the Legal Officer who signed the certification, had no authority to do so. She posits that the board resolution authorizing Atty. Miranda to file the petition was approved only long after the petition for a writ of possession was filed, and as such, did not cure the defect.

ISSUE: WON the certificate of non-forum shopping was defective and was it required for a petition of writ of possession. HELD: NO. A certificate of non-forum shopping is required only in complaints or other initiatory pleadings, and a petition for a writ of possession under Section 7 of Act No. 3135 is not a complaint or an initiatory pleading. An application for a writ of possession is a mere incident in the registration proceeding. Hence, although it was denominated as a petition, it was in substance merely a motion. Such petition for the issuance of a writ of possession is filed in the form of an ex parte motion, inter alia, in the registration or cadastral proceedings if the property is registered. Apropos, as an incident or consequence of the original registration or cadastral proceedings, the motion or petition for the issuance of a writ of possession, not being an initiatory pleading, dispels the requirement of a forum shopping certification. RATIO: The certification against forum shopping is required only in a complaint or other initiatory pleading. The ex parte petition for the issuance of a writ of possession filed by the respondent is not an initiatory pleading. Although the private respondent denominated its pleading as a petition, it is, nonetheless, a motion. What distinguishes a motion from a petition or other pleading is not its form or the title given by the party executing it, but rather its purpose. The office of a motion is not to initiate new litigation, but to bring a material but incidental matter arising in the progress of the case in which the motion is filed. A motion is not an independent right or remedy, but is confined to incidental matters in the progress of a cause. It relates to some question that is collateral to the main object of the action and is connected with and dependent upon the principal remedy.

RULE 7, Sec. 5: FORUM SHOPPING TIRONA vs. JUDGE ALEJO FACTS: Tirona et al., sued Luis Nuez before the MTC of Valenzuela. The suit was docketed as a Civil Case for ejectment. Tirona et al., claimed to be owners of various fishpond lots located at Coloong, Valenzuela. They alleged, among others that: Nuez, unlawfully operated and used Tirona et al., fishpond, despite their demands to vacate the same. Tirona et al., prayed that the court order Nuez to vacate and surrender possession of the fishpond to them. Nuez admitted in his answers that Tirona et al., owned the fishponds, but denied the other allegations. He raised the following affirmative defenses: Tirona et al., action was premature in view of the pendency of a complaint he filed with the Department of Agrarian Reform Adjudication Board (DARAB), where the issue of possession in the concept of tenancy is the same as that raised by Tirona et al., in the Civil Case for ejectment and (3) petitioners are guilty of forumshopping since by they were fully aware of the said DARAB case. He moved that the ejectment suit be dismissed. Tirona et al., also instituted another Civil Case for ejectment against Juanito Ignacio with the MTC of Valenzuela. The allegations were essentially the same as those against Nuez, and they sought the same relief prayed for in other Civil Case. Ignacio raised similar defenses as those offered by Nuez and he also moved for dismissal of the ejectment suit against him. Nuez and Ignacio contend that a comparison between the DARAB Case and the Civil Cases would show the same parties, the same subject matter of controversy, and the same issues. In other words, litis pendentia lies and may be availed of to dismiss the cases for forcible entry filed with the MeTC. Tirona et al., maintain that the petitioner-affiant who subscribed the requisite Affidavit of Non-forum Shopping understood that the issues pending resolution before the DARAB had no relation to the action for forcible entry, and hence had seen no need to report anymore the pendency of the DARAB case. Moreover, Nuez and Ignacio claim that in their pleadings they early enough disclosed the pendency of the DARAB case to the courts hearing the ejectment cases. Hence, they aver that there was no violation whatsoever of the non-forum shopping requirements.

ISSUE: WON the pendency of the DARAB case barred the filing of the civil case and WON the prohibition against forum shopping was violated. HELD: YES. The records disclose that the issue of possession as raised in the forcible entry cases in necessarily included in the question of agricultural tenancy raised in the DARAB case. Tirona et al., actively participated in the latter case and thus, could not have been unaware that the possession of the subject fishponds or parts thereof was in issue before the DARAB. Tirona et al., failure to see that paragraph 1(b), 1(c), or 1(d) of Administrative Circular No. 04-94 applied to them is simply incomprehensible. In certifying under oath that they have no knowledge of any case pending before any other tribunal or agency involving the same issue raised in their forcible entry cases, Tirona et al., were less than candid. To determine whether a party violated the rule against forum shopping, the test applied is whether the elements of litis pendentia are present or whether a final judgment in one case will amount to res judicata in another. The requisites of litis pendentia barred the filing of Civil Cases given the pendency of DARAB Case. Based thereon, the RTC correctly dismissed the forcible entry cases on the additional ground of forum shopping.

RULE 7, SEC. 5: FORUM SHOPPING NORDIC ASIA vs. CA 2004 FACTS: Sextant Maritime, S.A., (Sextant) borrowed US$5,300,000 from Nordic Asia Limited and Bankers Trust Company. The loan amount was used by Sextant to purchase the vessel M/V "Fylyppa." As security for the loan, a First Preferred Mortgage over the vessel M/V "Fylyppa" was constituted in favor of Nordic Asia. Sextant eventually defaulted on the loan, prompting petitioners to institute extrajudicial foreclosure proceedings under P.D. 1521. By coincidence, the same day that extrajudicial proceedings were instituted, Nam Ung Marine Co., Ltd., manning agent of the vessel, and 27 crew members filed a collection case before the RTC of Manila. The object of the suit was to claim their preferred maritime liens under the Code of Commerce and P.D. 1521, consisting of unpaid wages, overtime pay, allowances and other benefits due to them for services rendered on board the vessel and for the manning and provisioning thereof. Impleaded defendants were M/V "Fylyppa" (the vessel), Maritime (the registered owner of the vessel), P.V. Christensen Lines (time-charterer of the vessel), Theil Bolvinkel Shipping, A.S. (ship manager) and Jibfair Shipping (the alleged local ship agent of the vessel). After filing the complaint, the manning agent and the crewmen were able to cause the arrest of the vessel. Upon learning of the collection case, Nordic Asia filed with the RTC a motion for leave to intervene in the collection case. It alleged that they hold a mortgage over the vessel and that their intervention is only for the purpose of opposing the crew members' unfounded and grossly exaggerated claim. After the intervention was granted, Nordic Asia were able to discharge the attachment over vessel by putting up a counterbond. Jibfair Shipping filed a motion to dismiss. The RTC rendered a decision, ordering the defendants to pay, among others, the wages of the crewmen and Nam Ung Marine Ltd.'s agency fees and other expenses incurred for manning the vessel during its last voyage. It further ordered the counterbond posted by Nordic Asia to answer for all the awards. Nordic Asia appealed the decision to the CA (the "Appeal Case"). Subsequently, upon motion by respondents, the RTC issued an order of execution pending appeal. In response, Nordic

Asia instituted another action with the CA to question the execution pending appeal. This second case was the "Certiorari Case". The Certiorari Case was first disposed of by the CA. The order of execution pending appeal was affirmed in all respects, excluding the portion allowing the immediate execution on moral damages, attorney's fees, litigation expenses and interest, as they cannot be the subject of an execution pending appeal. This decision eventually became final and executory. As for the Appeal Case, the CA affirmed the decision of the RTC in all respects and dismissed the appeal. It is this decision that was elevated to the Court through a petition for review on certiorari. ISSUE: WON Nordic Asia is guilty of forum shopping. HELD: NO. On the issue of forum-shopping, the SC found that although the Certiorari Case was supposed to be strictly limited to questioning the order of execution pending appeal, petitioners also sought to reverse the main decision by asking the CA to declare it null and void and to set aside the evidence received ex-parte. Nordic Asia, however, claim that when they filed the second case before the CA, they divulged the other case earlier filed. Thus, by their disclosure, they should not be considered to have committed forum shopping. Ordinarily, as held by the Court, even if a party admits in the certification of non-forum shopping the existence of other related cases pending before another body, this fact alone does not exculpate such party who is obviously and deliberately seeking a more friendly forum for his case. In this case, however, after hearing the parties in oral argument and after careful study of their memoranda submitted thereafter, the SC is of the view that Nordic Asias acts in this case fall short of forum shopping. Considering that Nordic Asia did inform the Court of Appeals when it filed the Certiorari Case of the fact of the earlier filing of the Appeal Case, and considering, further, the absence of bad faith on petitioners' part or any deliberate intention to mislead the courts, the finding that they engaged in forum shopping should be reconsidered.

RULE 7, SEC. 5: FORUM SHOPPING MANUEL LAXINA vs. OMBUDSMAN, 2005 FACTS: Manuel D. Laxina, Sr. was Barangay Chairman of Brgy. Batasan Hills, Quezon City. Evangeline Ursal (Ursal), Barangay Clerk of Batasan Hills, Quezon City, filed with the NBI a complaint for attempted rape against Laxina. He was subsequently charged with sexual harassment before the RTC of Quezon City. Ursal brought before the DILG a complaint-affidavit charging Laxina with grave misconduct for the alleged attempted rape. However, the DILG referred the complaint to the Quezon City Council (City Council) for appropriate action. Said complaint was docketed as Adm. Case before the City Council. Thereafter, Ursal filed with the Office of the Ombudsman a similar complaint-affidavit charging Laxina with grave misconduct, docketed as OMB ADM Case. Ursal filed his counter-affidavit and attached thereto the affidavits of two witnesses. The Administrative Adjudication Bureau (AAB) of the Office of the Ombudsman exonerated Laxina from the charge, dismissing the complaint for lack of substantial evidence. However, upon review, and with the approval of the Ombudsman, hewas found guilty of grave misconduct and meted the penalty of dismissal, with forfeiture of material benefits, per its Memorandum Order. Laxina sought reconsideration of the adjudication, alleging lack of jurisdiction on the part of the Ombudsman, but the motion was denied. Meanwhile, Ursal asked the City Council to waive its jurisdiction in favor of the Ombudsman. The City Council merely noted Ursals motion.http://sc.judiciary.gov.ph/jurisprudence/2005/sep20 05/153155.htm - _ftn13 Laxina sought the review of the Ombudsmans Memorandum Order before the CA, arguing among others that: Ursals filing of the same administrative case before the Office of the Ombudsman and the City Council through the DILG warranted the dismissal of both cases. Laxina claims that estoppel cannot apply to him because he never invoked the jurisdiction of the Ombudsman, much less sought affirmative relief therefrom. Arguing that he has no obligation to disclose the fact that there is another identical case pending before another forum since he is not the one who instituted the identical cases, he reiterates the rule that

when two or more courts have concurrent jurisdiction, the first to validly acquire jurisdiction takes it to the exclusion of the other or the rest. ISSUE: WON the rule on forum-shopping applies in this case. HELD: NO. The rule on forum-shopping applies only to judicial cases or proceedings, and not to administrative cases. Laxina has not cited any rule or circular on forum-shopping issued by the Office of the Ombudsman or that of the City Council. In fact, it was only when the Ombudsman, in an Administrative Order required that a Certificate of Non-Forum Shopping be attached to the written complaint against a public official or employee. Supreme Court Administrative Circulars Nos. 0494 and 28-91adverted to by Laxina mention only initiatory pleadings in a court of law when another case is pending before other tribunals or agencies of the government as the pleadings to which the rule on forum-shopping applies. Ursal filed identical complaint-affidavits before the City Council, through the DILG, and the Office of the Ombudsman. A review of the said complaints-affidavits shows that far from being the typical initiatory pleadings referred to in the above-mentioned circulars, they merely contain a recital of the alleged culpable acts of Laxina. Ursal did not make any claim for relief, nor pray for any penalty for Laxina.

RULE 8, SEC. 1 MARIE JAO vs. CHINA BANKING, 2006 FACTS: Marie Nacua-Jao (Jao) filed a Complaint with the RTC of Cavite against Spouses Gan, Hsien and China Banking Corporation (CBC) for Recovery of Property, Declaration of Nullity of Deeds and Title and Damages. In said Complaint, Jao alleged that she is the lawful owner of a parcel of land with improvements registered in her name under a TCT. Before leaving Cebu, she entrusted the owner's duplicate copy to Hsien. The following year, she wrote Hsien demanding the return of the owner's duplicate copy of but the latter failed to comply. Jao later found out that Hsien had sold the subject property to Spouses Gan by virtue of a Deed of Sale and that the latter had caused the cancellation of Jaos TCT and the issuance in their names (Sps. Gan) of a new TCT covering the subject property. Jap also discovered that Spouses Gan mortgaged said property to CBC as security for a loan which mortgage was annotated on the TCT. She then wrote Spouses Gan and CBC, demanding the reconveyance of the subject property; but her demand went unheeded. Thus, she filed the Complaint not only against Spouses Gan and Hsien but also against CBC and prayed that the RTC nullify Sps. Gans TCT and restore Jaos own TCT, cancel the mortgage in favor of CBC, and order defendants to pay her damages and attorney's fees.http://www.lawphil.net/judjuris/juri2006/oct2006/gr_1 49468_2006.html - fnt12 There is much ado over the alleged failure of Jao to specify the form and extent of CBCs participation in the questioned sale and mortgage. ISSUE: WON the statement in the complaint which states that CBC 'connived and conspired' with Spouses Gan is a statement of the ultimate fact. HELD: YES. Paragraph 15 of the Complaint -- which states that CBC 'connived and conspired' with Spouses Gan to effect the questioned mortgage -- a statement of the ultimate fact that CBC participated in the fraudulent mortgage of the property. Ultimate facts refer to the principal, determinative, constitutive facts upon the existence of which the cause of

action rests. The term does not refer to details of probative matter or particulars of evidence which establish the material elements. The words 'connived and conspired' may seem to CBC general and indefinite, but vagueness is not a ground for a motion to dismiss, the proper recourse being a motion for a bill of particulars. Neither may it be said that the Complaint fails to state a cause of action merely because it did not traverse the issue of whether respondent is a mortgagee in good faith. We already ruled that the claim that a mortgagee is one in good faith is a matter of defense which should be determined during the trial. The dismissal of a complaint before resolution of that issue would certainly be precipitate, as it was in this case. With the foregoing disquisition, the second and third issues have become academic. Suffice it to state that respondent is an indispensable party as, without it, no complete judgment on the prayer for nullification of the TCT on which its mortgage is annotated may be rendered.http://www.lawphil.net/judjuris/juri2006/oct2006/ gr_149468_2006.html - fnt38

RULE 8, SEC. 2 PCIC vs. PNCC, 2009 FACTS: Philippine National Construction Corporation (PNCC) conducted a public bidding for the supply of labor, materials, tools, supervision, equipment, and other incidentals necessary for the fabrication and delivery of 27 tollbooths. Orlando Kalingo (Kalingo) won in the bidding and was awarded the contract. PNCC issued in favor of Kalingo Purchase Order (P.O.) No. 71024L for 25 units of tollbooths and P.O. No. 71025L for 2 units of tollbooths. These issuances were subject to the condition, among others, that each P.O. shall be covered by a surety bond and that the surety bond shall continue in full force until the supplier shall have complied with all the undertakings and covenants to the full satisfaction of PNCC. Kalingo, hence, posted surety bonds Surety Bond Nos. 27546 and 27547 issued by the PCIC and whose pertinent terms and conditions read: xxx a written extrajudicial demand must first be tendered to the surety, PCIC, within 15 days from the expiration date; otherwise PCIC shall not be liable thereunder and the obligee waives the right to claim or file any court action to collect on the bond. xxx PNCC released 2 checks to Kalingo representing the down payment and Kalingo in turn submitted the 2 PCIC surety bonds securing the down payments, which bonds were accepted by PNCC. Kalingo made partial/initial delivery of 4 units of tollbooths under P.O. No. 71024L. However, the tollbooths delivered were incomplete or were not fabricated according to PNCC specifications. He failed to deliver the other 23 tollbooths up to the time of filing of the complaint; despite demands, he failed and refused to comply with his obligation under the POs. 6 days before the expiration of the surety bonds and after the expiration of the delivery period provided for under the award, PNCC filed a written extrajudicial claim against PCIC

notifying it of Kalingos default and demanding the repayment of the down payment on P.O. No. 71024L as secured by PCIC Bond No. 27547. The claim went unheeded despite repeated demands. For this reason, PNCC filed with the RTC Mandaluyong City a complaint for collection of a sum of money against Kalingo and PCIC. PNCC's complaint against PCIC called solely on PCIC Bond No. 27547; it did not raise or plead collection under PCIC Bond No. 27546 which secured the down payment on P.O. No. 71025L. ISSUE: WON PNCC has sufficiently established an alternative cause of action in its claim under only one of the PCIC Bonds. HELD: NO. The fundamental rule is that reliefs granted a litigant are limited to those specifically prayed for in the complaint; other reliefs prayed for may be granted only when related to the specific prayer(s) in the pleadings and supported by the evidence on record. Necessarily, any such relief may be granted only where a cause of action therefor exists, based on the complaint, the pleadings, and the evidence on record. Each of the two bonds is a distinct contract by itself, subject to its own terms and conditions. They each contain a provision that the surety, PCIC, will not be liable for any claim not presented to it in writing within 15 days from the expiration of the bond, and that the obligee (PNCC) thereby waives its right to claim or file any court action against the surety (PCIC) after the termination of 15 days from the time its cause of action accrues. Hence, when PNCC complied with the written claim provision, but only with respect to PCIC Bond No. 27547, it does not mean that it complied with the provision with respect to PCIC Bond No. 27546. Under the circumstances, PNCCs cause of action with respect to PCIC Bond No. 27546 did not and cannot exist, such that no relief for collection thereunder may be validly awarded. Liability on a bond is contractual in nature and is ordinarily restricted to the obligation expressly assumed therein. We have repeatedly held that the extent of a surety's liability is determined only by the clause of the contract of suretyship and by the conditions stated in the bond. It cannot be extended by implication beyond the terms of the contract.

any other disposition of the said goods. Filtex likewise agreed to hand the proceeds, as soon as received, to SIHI to apply against any indebtedness of the former to the latter. Because of Filtexs failure to pay its outstanding obligation despite demand, SIHI filed a Complaint praying that the petitioners be ordered to pay, jointly and severally, the principal amount plus interest and penalties, attorn eys fees, exemplary damages, costs of suit and other litigation expenses. ISSUE: WON the letters of credit, sight drafts, trust receipts and comprehensive surety agreement are admissible in evidence. HELD: YES. The Answer with Counterclaim and Answer, of Filtex and Villanueva, respectively, did not contain any specific denial under oath of the letters of credit, sight drafts, trust receipts and comprehensive surety agreement upon which SIHIs Complaint was based, thus giving rise to the implied admission of the genuineness and due execution of these documents. Under Sec. 8, Rule 8 of the Rules of Court, when an action or defense is founded upon a written instrument, copied in or attached to the corresponding pleading as provided in the preceding section, the genuineness and due execution of the instrument shall be deemed admitted unless the adverse party, under oath, specifically denies them, and sets forth what he claims to be the facts. In Benguet Exploration, Inc. vs. Court of Appeals, the SC ruled that the admission of the genuineness and due execution of a document means that the party whose signature it bears admits that he voluntarily signed the document or it was signed by another for him and with his authority; that at the time it was signed it was in words and figures exactly as set out in the pleading of the party relying upon it; that the document was delivered; and that any formalities required by law, such as a seal, an acknowledgment, or revenue stamp, which it lacks, are waived by him.

RULE 8, SEC. 8 FILTEX & VILLANUEVA vs. CA, 2003 FACTS: State Investment House, Inc. (SIHI) instituted a Complaint for the collection of sum of money with interest, penalties, exemplary damages, attorneys fees and costs of suit against Filtex and Villanueva. In its Complaint, SIHI alleged that Filtex applied for domestic letters of credit to finance the purchase of various raw materials for its textile business. Finding the application to be in order, SIHI issued on various dates domestic letters of credit authorizing Indo-Phil, Texfiber, and Polyamide to value on SIHI such drafts as may be drawn by said corporations against Filtex for an aggregate amount not exceeding P3,737,988.05. Filtex used these domestic letters of credit to cover its purchase of various textile materials from Indo-Phil, Texfiber and Polyamide. Upon the sale and delivery of the merchandise, Indo-Phil, Texfiber and Polyamide issued several sight drafts payable to the order of SIHI, which were duly accepted by Filtex. Subsequently, the sight drafts were negotiated to and acquired in due course by SIHI which paid the value thereof to Indo-Phil, Texfiber and Polyamide for the account of Filtex. Allegedly by way of inducement upon SIHI to issue the aforesaid domestic letters of credit and to value the sight drafts issued by Indo-Phil, Texfiber and Polyamide, Villanueva executed a comprehensive surety agreement whereby he guaranteed, jointly and severally with Filtex, the full and punctual payment at maturity to SIHI of all the indebtedness of Filtex. The essence of the comprehensive surety agreement was that it shall be a continuing surety until such time that the total outstanding obligation of Filtex to SIHI had been fully settled. In order to ensure the payment of the sight drafts, Filtex executed and issued to SIHI several trust receipts covering the merchandise sold. Under the trust receipts, Filtex agreed to hold the merchandise in trust for SIHI, with liberty to sell the same for SIHIs account but without authority to make

RULE 9, SEC. 1 ANUNCIATION vs. BOCANEGRA, 2009 FACTS: Sps. Anunciacion filed before the RTC, Manila, a complaint for Quieting of Title and Cancellation of TCT. Bocanegra, through their counsel, Atty. Norby C. Caparas, Jr., filed a Motion to Dismiss on the ground that the complaint stated no cause of action. The Anunciacion spouses filed an Opposition to the Supplemental Motion to Dismiss. Thereafter, the Bocanegras filed a Second Supplemental Motion to Dismiss and Manifestation citing, inter alia, the following ground, xxx That the court has no jurisdiction over the person of the defending party. xxx The trial court sustained the Bocanegras and dismissed the complaint for lack of jurisdiction over their persons as defendants. It was only in the Bocanegras Second Supplemental Motion to Dismiss that they, for the first time raised the courts lack of jurisdiction over their person as defendants on the ground that summons were allegedly not properly served upon them. The filing of the said Second Supplemental Motion to Dismiss did not divest the court of its jurisdiction over the person of the Bocanegras who had earlier voluntarily appeared before the trial court by filing their motion to dismiss and the supplemental motion to dismiss. ISSUE: WON the Bocanegras can still raise the issue that the court had no jurisdiction over the person of the defending party when it was not raise in their first Motion To Dismiss. HELD: NO MORE. The Bocanegras, through counsel, filed a motion to dismiss with only one ground, i.e., that the pleading asserting the claim "states no cause of action." The filing of the Motion to Dismiss, without invoking the lack of jurisdiction over the person of the Bocanegras, is deemed a voluntary appearance on their part under the provision of the Rules. The dismissal of the complaint on the ground of lack of jurisdiction over the person of the respondents after they had voluntarily appeared before the trial court clearly constitutes

grave abuse of discretion amounting to lack of jurisdiction or in excess of jurisdiction on the part of the RTC. Quite apart from their voluntary appearance, Bocanegras Supplemental Motion to Dismiss and Second Supplemental Motion to Dismiss were clearly in violation of Rule 15, Section 8 in relation to Rule 9, Section 1 of the Rules. Rule 15, Section 8 of the Rules provides: Sec. 8. Omnibus motion. Subject to the provisions of Section 1 of Rule 9, a motion attacking a pleading, order, judgment, or proceeding shall include all objections then available, and all objections not so included shall be deemed waived. Rule 9, Section 1, in turn, states: Sec. 1. Defenses and objections not pleaded. Defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. However, when it appears from the pleadings or the evidence on record that the court has no jurisdiction over the subject matter, that there is another action pending between the same parties for the same cause, or that the action is barred by prior judgment or by statute of limitations, the court shall dismiss the claim. Applying the foregoing rules, the Bocanegras failure to raise the alleged lack of jurisdiction over their persons in their very first motion to dismiss was fatal to their cause. They are already deemed to have waived that particular ground for dismissal of the complaint. The trial court plainly abused its discretion when it dismissed the complaint on the ground of lack of jurisdiction over the person of the Bocanegras. Under the Rules, the only grounds the court could take cognizance of, even if not pleaded in the motion to dismiss or answer, are: (a) lack of jurisdiction over the subject matter; (b) existence of another action pending between the same parties for the same cause; and (c) bar by prior judgment or by statute of limitations. RATIO: The trial courts act of entertaining supplemental motions to dismiss which raise grounds that are already deemed waived, is not proper. To do so would encourage lawyers and litigants to file piecemeal objections to a complaint in order to delay or frustrate the prosecution of the plaintiffs cause of action.

RULE 9, SEC. 1 AQUINO vs. AURE, 2008 FACTS: Aure and E.S. Aure Lending Investors, Inc. (Aure Lending) filed a Complaint for ejectment against Aquino before the MeTC. In their Complaint, Aure and Aure Lending alleged that they acquired the subject property from Aquino and her husband Manuel (spouses Aquino) by virtue of a Deed of Sale. Aure claimed that after the spouses Aquino received substantial consideration for the sale of the subject property, they refused to vacate the same. In her Answer, Aquino countered that the Complaint in the Civil Case lacks cause of action for Aure and Aure Lending do not have any legal right over the subject property. Aquino admitted that there was a sale but such was governed by the Memorandum of Agreement (MOA) signed by Aure. As stated in the MOA, Aure shall secure a loan from a bank or financial institution in his own name using the subject property as collateral and turn over the proceeds thereof to the spouses Aquino. However, even after Aure successfully secured a loan, the spouses Aquino did not receive the proceeds thereon or benefited therefrom. Aquinos answer before the MeTC lacked any objection on her part to any deficiency in the complaint (that there was lack of conciliation proceedings). The MeTC rendered a Decision in favor of Aquino and dismissed the Complaint for ejectment of Aure and Aure Lending for non-compliance with the barangay conciliation process, among other grounds. Aure appealed the decision. Eventually, the CA declared that the failure of Aure to subject the matter to barangay conciliation is not a jurisdictional flaw and it will not affect the sufficiency of Aures Complaint since Aquino failed to seasonably raise such issue in her Answer. Aquino on the other hand avers that she did raise her objection during the pre-trial and even subsequently in her Position Paper submitted to the MeTC. ISSUE: WON Aquinos defense of non-compliance with the conciliation proceedings may still be availed even if it was not pleaded in her Answer.

HELD: NO. Although Aquinos defense of non-compliance with the conciliation proceeding is meritorious, procedurally, such defense is no longer available for failure to plead the same in the Answer as required by the omnibus motion rule. The failure of a defendant [Aquino] in an ejectment suit to specifically allege the fact that there was no compliance with the barangay conciliation procedure constitutes a waiver of that defense. By Aquinos failure to seasonably object to the deficiency in the Complaint, she is deemed to have already acquiesced or waived any defect attendant thereto. Consequently, Aquino cannot thereafter move for the dismissal of the ejectment suit for Aure and Aure Lendings failure to resort to the barangay conciliation process, since she is already precluded from doing so. The fact that Aquino raised such objection during the pre-trial and in her Position Paper is of no moment, for the issue of non-recourse to barangay mediation proceedings should be impleaded in her Answer. The spirit that surrounds the foregoing statutory norm is to require the party filing a pleading or motion to raise all available exceptions for relief during the single opportunity so that single or multiple objections may be avoided. It is clear and categorical in Section 1, Rule 9 of the Revised Rules of Court that failure to raise defenses and objections in a motion to dismiss or in an answer is deemed a waiver thereof. Neither could the MeTC dismiss the Civil Case motu proprio. The 1997 Rules of Civil Procedure provide only three instances when the court may motu proprio dismiss the claim, and that is when the pleadings or evidence on the record show that (1) the court has no jurisdiction over the subject matter; (2) there is another cause of action pending between the same parties for the same cause; or (3) where the action is barred by a prior judgment or by a statute of limitations. Thus, it is clear that a court may not motu proprio dismiss a case on the ground of failure to comply with the requirement for barangay conciliation, this ground not being among those mentioned for the dismissal by the trial court of a case on its own initiative.

RULE 9, SEC. 3 VIRON vs. PANTRANCO, 2003 FACTS: Viron Transportation Co., Inc., filed a complaint for damages against Pantranco North Express Co., Inc. and Damaso V. Ventura, with the RTC of Manila. Viron alleged that its bus was hit and bumped from behind the rear left portion by a Pantranco Bus thereby causing actual damage as well other costs representing costs of repair and/or replacement of parts, plus labor as well as loss of expected income, etc. The court issued an order declaring Pantranco as in default and setting the reception, ex parte, of the evidence of Viron. Pantranco Co., Inc., through Atty. Pekas, filed a motion to lift order of default. Appended to the motion was the Secretary's Certificate that said counsel was authorized by the respondent company. The court issued an order granting the motion and lifting its order of default against Pantranco. During the pre-trial conference, only Virons counsel appeared. On Virons motion, the court issued an order declaring Pantranco as in default and allowing the Viron to continue presenting its evidence, ex parte. Subsequently, Viron forthwith offered its documentary evidence and rested its case. The court issued an order on the same day declaring that the case was submitted for decision as of said date. The Office of the Government Corporate Counsel (OGCC) entered its appearance as counsel for Pantranco. The court rendered judgment in favor of Viron. Pantranco, through the OGCC, filed a motion to lift and/or set aside the trial court's Order of Default. It averred that because of the numerous cases involved in the turn over, the previous counsel of record failed to move for a reconsideration of the default order. Thus, when the instant case reached the OGCC, the undersigned counsel made the discovery and is thus filing the instant motion. The failure of the previous counsel may be considered as excusable negligence. In this case, the Pantranco assailed the order of the trial court declaring them as in default and prayed that the order and decision of the trial court be set aside and the case remanded to the trial court to enable them to cross-examine Virons witnesses as well as to adduce their evidence. The issue of the propriety of a second pre-trial conference after the trial court lifted its Order of Default was intertwined with the issues posed by the respondents in their brief. ISSUE: WON in declaring Pantranco as in default and in not lifting the order declaring it as in default is proper.

HELD: NO. A second pre-trial conference after an order of default had been lifted was not sanctioned by the Rules of Court and case law. What the trial court should have done after lifting its Order of Default was to set the case for hearing on the merits with due notice to the parties. When the trial court lifted its Order and set the case for a pre-trial conference, the said pre-trial conference was the second set by the trial court and not merely a continuation of the pre-trial terminated. The lifting of the Order of the court had the effect of restoring to the respondents their right to notice of subsequent proceedings and to take part in the trial. The Order of the trial court did not revert the action to the pre-trial stage or authorize much less render mandatory a second pre-trial. There is nothing in the Rules that empowers or authorizes the court to call a second pre-trial hearing after it has called a first pre-trial duly attended by the parties, and lacking such authority, the court perforce lacks the authority to declare a failure to prosecute on the part of plaintiff for failing to attend such second pre-trial; it also lacks the authority to declare the defendant 'as in default' by reason of the latter's failure to be present at the said second pre-trial. Instead of setting the case for a second pre-trial the trial court should have set the case for hearing for the crossexamination by Pantranco of Virons first witness and for it (petitioner) to present other witnesses and thereafter rest its case. By setting the case for a second pre-trial, the trial court acted without authority; hence, the notice of pre-trial conference issued by the branch clerk of court setting the pre-trial and the trial court's order of even date declaring the Pantranco as in default for their failure to appear therein are null and void. Consequently, the judgment of the trial court is likewise null and void. While it may be true that in jurisprudence, the parties may agree to hold a second pre-trial after the first pre-trial was aborted and the order of default of the court lifted, however, said ruling is not applicable in this case because there is no proof on record that Pantranco agreed to a second pre-trial. Although Pantranco received the Notice of Pre-Trial Conference but did not file any motion to set aside the same, however, the omission did not constitute consent to the second pre-trial. For if Pantranco consented to a second pretrial, they should have appeared during the pre-trial conference set. Pantranco and their counsel did not.

RULE 9, SEC. 3 BDO vs. TANSIPEK, 2009 FACTS: JOCI, a domestic corporation engaged in the construction business in Cebu City, filed a complaint against Philippine Commercial and Industrial Bank (PCIB) in the Regional RTC of Makati City. The Complaint alleges that JOCI entered into a contract with Duty Free Philippines, Inc. for the construction of a Duty Free Shop in Mandaue City. As actual construction went on, progress billings were made. Payments were received by JOCI directly or through herein respondent John Tansipek, its authorized collector. Payments received by respondent Tansipek were initially remitted to JOCI. However, payment through PNB Check was not turned over to JOCI. Instead, respondent Tansipek endorsed said check and deposited the same to his account in PCIB. PCIB allowed the said deposit, despite the fact that the check was crossed for the deposit to payees account only, and despite the alleged lack of authority of respondent Tansipek to endorse said check. PCIB refused to pay JOCI the full amount of the check despite demands made by the latter. JOCI prayed for the payment of the amount of the check and damages. PCIB filed a Motion to Admit Amended Third-Party Complaint. The amendment consisted in the correction of the caption, so that PCIB appeared as Third-Party Plaintiff and Tansipek as Third-Party Defendant. Upon Motion, respondent Tansipek was granted time to file his Answer to the Third-Party Complaint. He was, however, declared in default for failure to do so. The Motion to Reconsider the Default Order was denied. Banco de Oro-EPCI, Inc., as successor-in-interest to PCIB, filed the instant Petition for Review on Certiorari, assailing the Decision and Resolution of the Court of Appeals (finding that it was an error for the trial court to have acted on PCIBs motion to declare respondent Tansipek in default). ISSUE; WON it was proper for Tansipek to file a Motion for Reconsideration instead of a Motion to Lift Order of Default. HELD: NO. Tansipeks remedy against the Order of Default was erroneous from the very beginning. Tansipek should have filed a Motion to Lift Order of Default, and not a Motion for Reconsideration, pursuant to Section 3(b), Rule 9.

Section 3(b), Rule 9 of the Rules of Court: (b) Relief from order of default.A party declared in default may at any time after notice thereof and before judgment file a motion under oath to set aside the order of default upon proper showing that his failure to answer was due to fraud, accident, mistake or excusable negligence and that he has a meritorious defense. In such case, the order of default may be set aside on such terms and conditions as the judge may impose in the interest of justice. A Motion to Lift Order of Default is different from an ordinary motion in that the Motion should be verified; and must show fraud, accident, mistake or excusable neglect, and meritorious defenses. The allegations of (1) fraud, accident, mistake or excusable neglect, and (2) of meritorious defenses must concur. Assuming for the sake of argument, however, that respondent Tansipeks Motion for Reconsideration may be treated as a Motion to Lift Order of Default, his Petition for Certiorari on the denial thereof has already been dismissed with finality by the Court of Appeals. Respondent Tansipek did not appeal said ruling of the Court of Appeals to this Court. The dismissal of the Petition for Certiorari assailing the denial of respondent Tansipeks Motion constitutes a bar to the retrial of the same issue of default under the doctrine of the law of the case. RATIO: It is important to note that a party declared in default respondent Tansipek in this case is not barred from appealing from the judgment on the main case, whether or not he had previously filed a Motion to Set Aside Order of Default, and regardless of the result of the latter and the appeals therefrom. However, the appeal should be based on the Decisions being contrary to law or the evidence already presented, and not on the alleged invalidity of the default order.

RULE 10, SEC. 1 Sps. TIRONA vs. JUDGE ALEJO, 2001 FACTS: Tirona et al., sued Luis Nuez and Juanito Ignacio separately, before the MTC of Valenzuela. The suit was docketed as a Civil Cases for ejectment. Tirona et al., claimed to be owners of various fishpond lots. They alleged, among others that: Nuez and Ignacio, unlawfully operated and used Tirona et al., fishpond, despite their demands to vacate the same. Tirona et al., prayed that the court order Nuez and Ignacio to vacate and surrender possession of the fishpond to them. Nuez and Ignacio admitted in their answers that Tirona et al., owned the fishponds, but denied the other allegations. Nuez raised the affirmative defense that: Tirona et al., action was premature in view of the pendency of a complaint he filed with the DARAB, where the issue of possession in the concept of tenancy is the same as that raised by Tirona et al., in the Civil Case for ejectment. He therefore moved that the ejectment suit be dismissed. The cases were later dismissed. The RTC also dismissed the civil cases when raised on appeal. Tirona et al., then filed with the RTC a joint Motion for Leave to Amend Complaint in the civil cases and a Motion for Reconsideration, together with the proposed Amended Complaints. But these were denied. Tirona et al., contended that the averment of the identities of the persons in possession of the disputed properties at the time of the forcible entry thereunto is not jurisdictional in character. They argue that the deficiency, if any, could have been remedied by amended or supplemental pleadings or by the submission of admissible evidence. They pointed out that the MeTC, had received evidence of their actual possession, resulting in a finding of fact of actual possession in its Decision. It was, therefore, an error for the RTC to have disregarded said finding of fact on the ground that the requisites for the MeTC to acquire jurisdiction over the forcible entry cases had not been complied with. It was likewise error for the RTC to have denied the admission of petitioners' Amended Complaints. ISSUE: WON the deficiency in the complaint (the allegation of prior physical possession) was remedied when Tirona et. al., submitted their Amended Complaints.

HELD: NO. The policy in this jurisdiction, (as a general rule) is that amendments to pleadings are favored and liberally allowed in the interests of substantial justice. Thus, amendments of the complaint may be allowed even if an order for its amendments of the complaint may be allowed even if an order for its dismissal has been issued so long as the motion to amend is filed before the order of dismissal acquired finality. Note, however, that it is not a hard and fast rule. An amendment is not allowed where the court has no jurisdiction over the original complaint and the purpose of the amendment is to confer jurisdiction upon the court, or where the action originally pleaded in the complaint was outside the jurisdiction of the court. In the case at bar, the SC found that the proposed amendments included the allegation that they were in prior physical possession of the disputed fishponds before said possession was allegedly disturbed. Clearly, the purpose is to sidestep the RTC ruling that MeTC had no jurisdiction. Over their complaints and allow the inferior court to acquire jurisdiction. This was not allowed by the SC. Where the court of origin had no jurisdiction over the original complaint in the first place, amendments may not be had. It is axiomatic that before an amendment can be permitted, the trial court must have acquired jurisdiction over the case in the first instance. The Complaints in the Civil Cases failed to allege prior physical possession of the property on the part of Tirona et al. All that is alleged is unlawful deprivation of their possession by Nuez and Ignacio. The deficiency is fatal to Tirona et als' actions before the MeTC of Valenzuela. Such bare allegation is insufficient for the MeTC to acquire jurisdiction. No reversible error was, therefore, committed by the RTC when it held that the MeTC acquired no jurisdiction over the Civil Cases for failure of the complaints to aver physical possession by Tirona et al.

RULE 10, SEC 3 PPA vs. WG&A, 2008 FACTS: After the expiration of the lease contract of Veterans Shipping Corporation over the Marine Slip Way in the North WG&A requested PPA for it to be allowed to lease and operate the said facility. Thereafter, a memorandum addressed to the Secretary of the DOTC and the General Manager of PPA, stating to the effect that ECC has approved the request of WG&A to lease the Marine Slip Way until such time that PPA turns over its operations to the winning bidder for the North Harbor Modernization Project. Pursuant to the said Memorandum, a Contract of Lease was prepared by PPA. Thereafter, in accordance with the stipulations made in the lease agreement, PPA surrendered possession of the Marine Slip Way in favor WG&A. However, believing that the said lease already expired on PPA subsequently sent a letter to WG&A directing the latter to vacate the contested premises and to turnover the improvements made therein pursuant to the terms and conditions agreed upon in the contract. In response, WG&A wrote PPA urging the latter to reconsider its decision to eject the former. Said request was denied by the PPA via a letter. WG&A commenced an Injunction suit before the RTC of Manila. WG&A claims that the PPA unjustly, illegally and prematurely terminated the lease contract. It likewise prayed for the issuance of a temporary restraining order to arrest the evacuation. In its complaint, petitioner also sought recovery of damages for breach of contract and attorney's fees. WG&A amended its complaint for the first time. The complaint was still denominated as one for Injunction with prayer for TRO. In the said amended pleading, WG&A incorporated statements to the effect that PPA is already estopped from denying that the correct period of lease is "until such time that the North Harbor Modernization Project has been bidded out to and operations turned over to the winning bidder. Following the first amendment in the WG&As complaint, PPA submitted its Answer. Meanwhile, the TRO sought by the former was denied by the trial court by way of an order. WG&A later moved for the reconsideration of the said Order. Shortly thereafter, WG&A filed a Motion to Admit Attached Second Amended Complaint. This time, however, the complaint was already captioned as one for Injunction with Prayer for Temporary Restraining Order and/or Writ of

Preliminary Injunction and damages and/or for Reformation of Contract. The admission of the second amended complaint met strong opposition from the PPA. It postulated that the reformation sought for by WG&A constituted substantial amendment, which if granted, will substantially alter the latter's cause of action and theory of the case. ISSUE: WON the admission of the second amendment complaint is proper. HELD: YES. Section 3, Rule 10 amended the former rule in such manner that the phrase "or that the cause of action or defense is substantially altered" was stricken-off and not retained in the new rules. The clear import of such amendment in Section 3, Rule 10 is that under the new rules, "the amendment may (now) substantially alter the cause of action or defense." This should only be true, however, when despite a substantial change or alteration in the cause of action or defense, the amendments sought to be made shall serve the higher interests of substantial justice, and prevent delay and equally promote the laudable objective of the rules which is to secure a "just, speedy and inexpensive disposition of every action and proceeding." The application of the old Rules by the RTC almost five years after its amendment by the 1997 Rules of Civil Procedure patently constitutes grave abuse of discretion.

RULE 10, SEC. 5 AZOLLA FARMS vs. CA and SAVINGS BANK, 2004 FACTS: Francis R. Yuseco, Jr., is the Chairman, President and CEO of Azolla Farms International Philippines (Azolla Farms). Azolla Farms undertook to participate in the National Azolla Production Program wherein it will purchase all the Azolla produced by the Azolla beneficiaries in the amount not exceeding the peso value of all the inputs provided to them. To finance its participation, Azolla Farms applied for a loan with Credit Manila, Inc., which the latter endorsed to Savings Bank. The loan having been approved, Yuseco executed a promissory note. The net proceeds was released to FNCB Finance, the mortgagee of a lot with residential house owned by Yuseco. With the release of the proceeds, FNCB Finance released the mortgage, and in turn, the property was mortgaged to Savings Bank as collateral for the loan. Yuseco and Francisco Bargas also executed an assignment of their shares of stock in Azolla Farms as additional security. Yuseco then executed two other promissory notes. However, the Azolla Farms project collapsed. Blaming Savings Bank, Yuseco and Azolla Farms filed RTC Manila, a complaint for damages. In essence, their complaint alleges that Savings Bank unjustifiably refused to promptly release the remaining balance which impaired the timetable of the project and inevitably affected the viability of the project resulting in its collapse, and resulted in their failure to pay off the loan. Thus, petitioners pray for actual damages, among others. Savings Bank filed its Answer denying the allegations in the complaint. It contends that there was evidence that Yuseco was using the loan proceeds for expenses totally unrelated to the project and they decided to withhold the remaining amount until Yuseco gave the assurance that the diversion of the funds will be stopped. Savings Bank believed that the 90day interval between the two tranches could not have impaired the operation of the project, and petitioners' subsequent receipt of the proceeds confirmed their agreement to the terms of the loan. After Savings Bank, as defendant, rested its case, Yuseco and Azolla Farms filed a Motion to Admit Amended Complaint alleging that the testimony of defense witness raised the issue of the invalidity of the promissory notes and the real estate mortgage. Yuseco and Azolla Farms sought the amendment of the complaint to conform to the issues and evidence presented.

ISSUE: WON the trial court erred in admitting Yuseco and Azolla Farmss amended complaint. HELD: NO. It was Yuseco and Azolla Farms belief that Savings Banks evidence justified the amendment of their complaint. The trial court agreed thereto and admitted the amended complaint. On this score, courts are given the discretion to allow amendments of pleadings to conform to the evidence presented during the trial. Verily, the trial court cannot be faulted for admitting the amended complaint as it had the discretion to do so. RATIO: RULE 10, Sec. 5 envisions two scenarios. Firstwhen evidence is introduced on an issue not alleged in the pleadings and no objection was interjected; and Second when evidence is offered on an issue not alleged in the pleadings but this time an objection was interpolated. In cases where an objection is made, the court may nevertheless admit the evidence where the adverse party fails to satisfy the court that the admission of the evidence would prejudice him in maintaining his defense upon the merits, and the court may grant him a continuance to enable him to meet the new situation created by the evidence. INSTANCES WHEN PLEADINGS ARE TREATED AS AMENDED EVEN IF THE PLEADINGS WERE ACTUALLY NOT AMENDED: There have been instances where the Court has held that even without the necessary amendment, the amount proved at the trial may be validly awarded, where we said that if the facts shown entitled plaintiff to relief other than that asked for, no amendment to the complaint was necessary, especially where defendant had himself raised the point on which recovery was based. The appellate court could treat the pleading as amended to conform to the evidence although the pleadings were actually not amended. Amendment is also unnecessary when only clerical error or non substantial matters are involved. The rule on amendment need not be applied rigidly, particularly where no surprise or prejudice is caused the objecting party. Where there is a variance in the defendant's pleadings and the evidence adduced by it at the trial, the Court may treat the pleading as amended to conform with the

evidence.http://www.lawphil.net/judjuris/juri2004/nov2 004/gr_138085_2004.html - fnt24 RULE 10, SEC. 6 PLANTERS DEVELOPMENT vs. LZK HOLDINGS, 2005 FACTS: LHDC, and the PDB entered into a "Loan Agreement" whereby the former was extended a credit accommodation. The amount was to be used to finance the ongoing construction of the 7-storey AGZ Building. To secure the loan, the LHDC executed in favor of the PDB a real estate mortgage where the AGZ Building was then being constructed. Subsequently, the latter executed two promissory notes in favor of the PDB. Thereafter, the LHDC executed a Deed of Assignment in favor of the PDB, wherein it assigned to the latter all its rental incomes from its AGZ Building, the same to be applied as payment of its obligations. For non-payment of loan, non-compliance with the terms and conditions of the Deed of Assignment, and failure to comply with the conditions of the promissory notes, the PDB caused the extra-judicial foreclosure of the real estate mortgage. PDB filed with the RTC of Makati City, a complaint against the LHDC for "Annulment of Extrajudicial Foreclosure, Mortgage Contract, Promissory Notes and for Damages." The PDB filed in due course its answer, traversing the material allegations thereof and interposing a counterclaim for attorneys fees and costs. After a reply to the answer had been filed, the LHDC moved that the case be set for a pre-trial conference, after which the parties submitted their respective pre-trial briefs. Just before the scheduled pre-trial, the LHDC filed a "Motion for Leave to file a Supplemental Complaint" to cover occurrences subsequent to the original complaint. LHDC filed an Urgent Motion for the Issuance of a Temporary Restraining Order and Writ of Preliminary Injunction, seeking to restrain the PDB from consolidating its title over the foreclosed property pending the final determination of the Civil Case. PDB jointly opposed the supplemental complaint and urgent motion, contending that the latter had "miserably failed to establish any right in this regard." As to the supplemental complaint, it argued that what goes against its admission is the fact that the supplemental matters involved therein would bring into the case new causes of action, distinct from those mentioned in the original complaint. It also pointed out the lack of verification of the said supplemental complaint. The RTC and eventually the CA granted admission of the Supplemental Complaint of the LHDC.

ISSUE: WON the admittance of the Supplemental Complaint of LHDC was proper. HELD: YES. While a matter stated in a supplemental complaint should have some relation to the cause of action set forth in the original pleading, the fact that the supplemental pleading technically states a new cause of action should not be a bar to its allowance but only a factor can be considered by the court in the exercise of its discretion; and of course, a broad definition of "cause of action" should be applied here as elsewhere. In the present case, the issue as to whether the PDB stopped the payment of rentals and the application thereof on the perceived loan deficiency of the LHDC, is a new matter that occurred after the filing of the original complaint. However, the relief for damages, the collection of the rentals and the application thereof by the PDB to the perceived loan deficiency of the LHDC are germane to, and are in fact, intertwined with the cause of action of nullification of the real estate mortgage and the extrajudicial foreclosure thereof, as well as the sale at public auction. It is LHDCs contention that PDB remained liable to it for rentals, and until title to the property had been lawfully consolidated with the PDB. RATIO: A supplemental pleading only serves to bolster or adds something to the primary pleading. A supplement exists side by side with the original. It does not replace that which it supplements. Moreover, a supplemental pleading assumes that the original pleading is to stand and that the issues joined with the original pleading remained an issue to be tried in the action. It is but a continuation of the complaint. Its usual office is to set up new facts which justify, enlarge or change the kind of relief with respect to the same subject matter as the controversy referred to in the original complaint. The purpose of the supplemental pleading is to bring into the records new facts which will enlarge or change the kind of relief to which the plaintiff is entitled; hence, any supplemental facts which further develop the original right of action, or extend to vary the relief, are available by way of supplemental complaint even though they themselves constitute a right of action. The parties may file supplemental pleadings only to supply deficiencies in aid of an original pleading, but not to introduce new and independent causes of action. When the cause of action stated in the supplemental complaint is different from the causes of action mentioned in the original complaint, the court should not admit the supplemental

complaint. However, a broad definition of causes of action should be applied. RULE 10, SEC. 6, 7 APT vs. CA, 2000 FACTS: The petition originated from a transaction between the DBP and Galleon Shipping Corporation. Galleon obtained several "foreign loan guarantee accommodations" from DBP for the acquisition of 7 vessels. To secure payment thereof, Galleon mortgaged the vessels to DBP. Named joint and solidary debtors with Galleon in such transaction were SIM, Cuenca and Tinio. Due to Galleon's default in the payment of its obligations, DBP had to "make good its guarantees to Galleon's foreign creditors." DBP foreclosed the mortgage but the proceeds of the auction sales conducted after the extrajudicial foreclosure of the mortgage on the vessels, yielded a deficiency. Apparently in anticipation of DBP's claim for the said deficiency, SIM, Cuenca and Tinio lodged a complaint against DBP, NDC and Galleon before the RTC Makati for the issuance of a temporary restraining order, and that the injunction that the court would grant be made permanent; that they be declared as "no longer liable to the defendants under the Deed of Undertaking, pledge, mortgages, and other accessory contracts between the parties;" that the contracts be declared as having been extinguished and the plaintiffs released from any and all responsibilities therefor, and that the NDC be declared the absolute owner of Galleon among other things. Meanwhile, the DBP granted SIM, Cuenca and Tinio foreign loan guarantee accommodations. The transactions were secured by a mortgage over certain parcels of land owned by SIM in Agusan del Sur. The mortgage contract authorized DBP to take actual possession of the mortgaged property upon breach of any of the conditions therein stipulated. Thus, when the mortgagor failed to pay their amortizations on time, the DBP took the initial step to foreclose the mortgage by taking possession of the mortgaged plant site in Agusan del Sur. SIM took DBP's action as a "retaliatory move." It sought to supplement the original complaint in the Civil Case by filing a "Motion to Admit Supplemental Complaint." It alleged that DBP's taking possession of the said plant was a "new development" between the parties and in violation of the writ of preliminary injunction issued and therefore,

warranted the admission of the supplemental complaint pursuant to Section 6, Rule 10 of the Rules of Court. In the original complaint, what SIM, Cuenca and Tinio sought to prevent by their prayer for an injunction was the DBP's intention to go after them for the deficiency resulting from the foreclosure of the mortgages of 7 vessels of Galleon. On the other hand, the cause of action stated in the supplemental complaint was the DBP's initial act of posing security guards in SIM's Agusan del Norte plant preparatory to the foreclosure of the mortgage of the same plant, allegedly in contravention of the writ of preliminary injunction issued by the trial court. The supplemental complaint, however, states a fact that is entirely distinct from those in the original complaint. It alleges that the DBP's taking over the Agusan del Sur plant of SIM could not have been, in pursuance of any agreement between SIM and the DBP because the mortgage that was entered into between those parties "does not provide extrajudicial and forcible taking over of the mortgaged properties by defendant DBP." Although the thrust of the allegations in the supplemental complaint was to create a connection or relation between it and the original complaint, the same allegations reveal the fact that its filing was impelled by the imminence of the foreclosure of the mortgage, that is different from and outside of the subject matter of the complaint. ISSUE: WON the proscription against multiplicity of suits be properly invoked to allow the filing of a supplemental complaint involving basically the same parties as those in the original complaint but with a cause of action arising from a transaction distinct from that sued upon in the original complaint. HELD: NO. Granting that SIM's purpose in filing the supplemental complaint was to effect a joinder of causes of action to avoid multiplicity of suits, it must fail just the same. In this case, the ultimate problem in the original complaint as far as SIM, Cuenca and Tinio are concerned is how to prevent the DBP from pursuing the amount of deficiency after an extrajudicial foreclosure sale of the mortgaged vessels. In the supplemental complaint, what SIM seeks to pre-empt is the foreclosure of the mortgage of its Agusan del Sur plant. As regards the issues of jurisdiction and venue, the original complaint clearly presents a personal action between the

parties as it aims for a declaration of non-liability of private respondents under the contracts wherein they are solidarily liable with Galleon. On the other hand, the supplemental complaint is actually a real action as it was filed for the "specific recovery of land, tenements, or hereditaments." RATIO: Under Rule 10, Sec. 6, a supplemental pleading is meant to supply deficiencies in aid of the original pleading and not to dispense with or substitute the latter. It is not like an amended pleading which is a substitute for the original one. It does not supersede the original, but assumes that the original pleading is to stand. The issues joined under the original pleading remain as issues to be tried in the action. When the cause of action stated in the supplemental complaint is different from the cause of action mentioned in the original complaint, the court should not admit the supplemental complaint. A supplemental complaint should, as the name implies, supply only deficiencies in aid of an original complaint. It should contain only causes of action relevant and material to the plaintiffs right and which help or aid the plaintiffs right or defense. The supplemental complaint must be based on matters arising subsequent to the original complaint related to the claim or defense presented therein, and founded on the same cause of action. It cannot be used to try a new matter or a new cause of action.