G.R. No.

136051 June 8, 2006 USSR engaged the services of Financial Building for the construction of
ALFREDO P. ROSETE, OSCAR P. MAPALO and CHITO P. a multi-level office and staff apartment building at the said lot, , which
ROSETE, Petitioners, would be used by the Trade Representative of the USSR
vs. Forbes Park authorized its construction on USSR’s representation that it
JULIANO LIM and LILIA LIM, Respondents. would be building a residence for its Trade Representative
F: The case is a Complaint for Annulment, Specific Performance When Forbes Park discovered that USSR violated the deed of
with Damages. restrictions, it suspended all permits of entry for the personnel and
R’s filed the said Complaint against P’s seeking to: annul a materials of Financial Building in the said construction site
Deed of Sale executed between the P’s and restore ownership of said Financial Building filed in the RTC Complaint for Injunction and
lands to R’s. P’s filed a MtD which was however denied. P’s filed a Damages with a prayer for Preliminary Injunction against Forbes Park
Forbes Park filed a Motion to Dismiss on the ground that Financial
Petition for Certiorari with the CA to challenge the denial of the MtD.
Building had no cause of action because it was not the real party-in-
Meanwhile, P filed an Answer. Then, R’s filed a Notice to Take interest
Deposition Upon Oral Examination. P’s filed an objection to the Notice the trial court issued a writ of preliminary injunction against Forbes Park
to Take Deposition. RTC denied the objection to the Notice to Take but on appeal, the Court of Appeals nullified it and dismissed the
Deposition. P again filed a Petition for Certiorari with the CA, this time to complaint. Said decision was affirmed by the Supreme Court
contest the denial of the objection to the Notice to Take Deposition. CA After Financial Building’s case was terminated with finality, Forbes Park
filed with the RTC a Complaint for Damages, against Financial Building
dismissed. Hence this Petition for Review on Certiorari.
arising from the violation of its rules and regulations
P’s contend that the taking of their oral depositions should not Financial Building argued that the instant case is barred for failure of
be allowed without leave of court as no answer has yet been served and respondent to set it up as a compulsory counterclaim in the earlier civil
the issues have not yet been joined because their answers were filed ex case
abudanti cautela. ISSUE: whether or not the action filed by Forbes Park is barred
I: WN the taking of oral depositions is proper even without an HELD: YES
Answer and non-joinder of the issues. The instant case is barred due to Forbes Park’s failure to set it up as a
compulsory counterclaim in the injunction suit filed by Financial Building
H/R: YES, the taking of oral depostions is proper. There has
against Forbes Park
actually been an Answer and joinder of issues.  A compulsory counterclaim is one which arises out of or is necessarily
An answer is a pleading in which a defending party sets forth connected with the transaction or occurrence that is the subject matter
his defenses and the failure to file one may render the defending party of the opposing party’s claim. If it is within the jurisdiction of the court
in default. P’s contention that an answer filed ex abundanti cautela (“out and it does not require for its adjudication the presence of third parties
of abundant caution”) is not an answer is untenable. An answer ex over whom the court cannot acquire jurisdiction, such compulsory
abundati cautela does not make their answer any less of an answer. A counterclaim is barred if it is not set up in the action filed by the
opposing party; Thus, a compulsory counterclaim cannot be the subject
look at the answer filed by P reveals that in contained their defenses.
of a separate action but it should instead be asserted in the same suit
P’s argument that the issues of the case have not yet been involving the same transaction or occurrence, which gave rise to it
joined must necessarily fail in light of our ruling that petitioners have tests to determine whether a counterclaim is compulsory or not
filed their answers although the same were made ex abudanti cautela. (1) Are the issues of fact or law raised by the claim and the counterclaim
Issues are joined when all the parties have pleaded their respective largely the same?
theories and the terms of the dispute are plain before the court. In the (2) Would res judicata bar a subsequent suit on defendant’s claim
present case, the issues have been joined when petitioners, as well as absent the compulsory counterclaim rule?
(3) Will substantially the same evidence support or refute plaintiff’s claim
the other defendants, filed their answers.
as well as the defendant’s counterclaim? and
Thus, P’s contention that the lower court erred when it said (4) Is there any logical relation between the claim and the counterclaim?
that the joinder of issues is required in order that taking of depositions
may be availed of is untenable. Under Rule 23, Section 1, a deposition In the case at bar, undoubtedly, the prior Civil Case and the instant case
pending action may be availed of: (1) with leave of court when an arose from the same occurrence – the construction work done by
answer has not yet been filed but after jurisdiction has been obtained Financial Building on the USSR’s lot in Forbes Park Village. The issues
over any defendant or property subject of the action, or (2) without leave of fact and law in both cases are identical
The parties, issues of fact and law in both cases are identical.The
of court after an answer to the complaint has been served. In the instant factual issue is whether the structures erected by Financial Building
case, the taking of the deposition may be availed of even without leave violate Forbes Park’s rules and regulations, whereas the legal issue is
of court because petitioners have already served their answers to the whether Financial Building, as an independent contractor working for the
complaint. USSR, could be enjoined from continuing with the construction and be
G.R. No. 133119. August 17, 2000] held liable for damages if it is found to have violated Forbes Park’s rules
FINANCIAL BUILDING CORPORATION, petitioner, vs . FORBES As a result of the controversy, Financial Building seized the initiative by
PARK ASSOCIATION, INC., respondent filing the prior injunction case, which was anchored on the contention
that Forbes Park’s prohibition on the construction work in the subject
FACTS: premises was improper. The instant case on the other hand was
 USSR owned a residential lot in Forbes Park Village in Makati City. initiated by Forbes Park to compel Financial Building to remove the
same structures it has erected in the same premises involved in the
prior case and to claim damages for undertaking the said
 construction. Thus, the logical relation between the two cases is patent
and it is obvious that substantially the same evidence is involved in the
said cases
 Since Forbes Park filed a motion to dismiss in the earlier civil case, its
existing compulsory counterclaim at that time is now barred
 A compulsory counterclaim is auxiliary to the proceeding in the original
suit and derives its jurisdictional support therefrom. Hence, where there
is no claim against the counterclaimant, the counterclaim is improper
and it must dismissed, more so where the complaint is dismissed at the
instance of the counterclaimant. In other words, if the dismissal of the
main action results in the dismissal of the counterclaim already filed, it
stands to reason that the filing of a motion to dismiss the complaint is an
implied waiver of the compulsory counterclaim because the grant of the
motion ultimately results in the dismissal of the counterclaim
 Thus, the filing of a motion to dismiss and the setting up of a
compulsory counterclaim are incompatible remedies. In the event that a
defending party has a ground for dismissal and a compulsory
counterclaim at the same time, he must choose only one remedy. If he
decides to file a motion to dismiss, he will lose his compulsory
counterclaim. But if he opts to set up his compulsory counterclaim, he
may still plead his ground for dismissal as an affirmative defense in his
answer
 was not the only property of the Sps and submitted in their counter-
1.
2.
3.
1.
Compulsory Counterclaim
Reillo vs. San Jose (2009)
Facts:
Sps. Quiterio and Antonina San Jose were the original
registered owners of a parcel of land located in E. Rod, QC. The Sps.
San Jose had 5 children, Virginia, Virgilio, Galicano, Victoria and
Catalina. The Sps. San Jose had already passed away, as well as their
children Virginia, Virgilio. This case is between heirs. The petitioners are
grandchildren of the Sps. San Jose and the respondents are the other
heirs, the children of Galicano.
In 1999, the respondents filed with the RTC a complaint for
annulment of title, annulment of deed of extra-judicial settlement,
partition and damages against the petitioners. The petitioners executed
the deed of extra-judicial settlement which caused the issuance of a
new TCT in favor of Ma. Teresa Piñon, one of the petitioners.
Petitioners filed their ANSWER WITH COUNTER-PETITION
and with COMPULSORY COUNTERCLAIM denying that the deed of
extrajudicial settlement of estate among heirs was falsified, they also
admitted that the Sps. San Jose had 5 children, that the subject property
petition for partition the list of the other 12 parcels of land which
belonged to the Sps.
Respondents filed a motion for judgment on the pleadings
alleging that the denials made by petitioners were in the form of
negative pregnant, petitioners failed to state the basis that the
questioned deed was NOT falsified, failed to specifically deny the
allegations in the complain and stating in their counter-petition for
partition, impliedly admitted that petitioners were not the SOLE heirs of
the Sps. San Jose. Respondents ALSO filed a reply to answer with
compulsory counterclaim with a motion to dismiss due to failure of the
petitioners to pay the required docket fees for their counter-petition for
partition.
RTC rendered a decision in favor of herein respondents, declaring that
the deed of extrajudicial settlement null and void. RTC found that the
petitioners misrepresented themselves to be the sole heirs and it did not
consider the counter-petition for partition because the corresponding
docket fees were not paid. The CA affirmed the RTC decision
Issues:
Did the RTC err in not admitting the counter-petition for partition and
compulsory counterclaim when it decided the case based on the
pleadings?
Whether or not the dismissal of the counter-petition for partition was
proper due to the non-payment of docket fee?
Whether or not the dismissal of the petitioners counter-petition for
partition will result to multiplicity of suits? (Remember in their counter-
petition they stated that there were 12 other properties of the Sps. San
Jose)
Held:
NO.
Where a motion for judgment on the pleadings is filed, the
essential question is whether there are issues generated by the
pleadings. In a proper case for judgment on the pleadings, there is no
ostensible issue at all because of the failure of the defending party’s
answer to raise an issue
 In this case, respondents’ principal action was for the
annulment of the Deed of Extrajudicial Settlement of Estate Among
Heirs with Waiver of Rights executed by petitioners and annulment of
title on the ground that petitioners stated in the said Deed that they are
the legitimate descendants and sole heirs of the spouses Quiterio and
Antonina. Although petitioners denied in their Answer that the Deed
was falsified, they, however, admitted respondents’ allegation that
spouses Quiterio and Antonina had 5 children, thus, supporting
respondents’ claim that petitioners are not the sole heirs of the
deceased spouses. Petitioners’ denial/admission in his Answer to the
complaint should be considered in its entirety and not truncated parts.
Considering that petitioners already admitted that respondents
Galicano, Victoria, Catalina and Maribeth are the children and
grandchild, respectively, of the spouses Quiterio and Antonina, who
were the original registered owners of the subject property, and thus
excluding respondents from the deed of settlement of the subject
property, there is no more genuine issue between the parties generated
by the pleadings, thus, the RTC committed no reversible error in
rendering the judgment on the pleadings.
In this case, the counterclaim was not compulsory but just
permissive, as such docket fees must be paid.
2. YES.
We also find no merit in petitioners’ contention that the
Counter-Petition for Partition in their Answer was in the nature of a
compulsory counterclaim which does not require the payment of docket
fees.
Respondents’ action was for the annulment of the Deed of
Extrajudicial Settlement, title and partition of the property subject of the
Deed. On the other hand, in the Counter-Petition filed by petitioners in
their Answer to respondents’ complaint, they were asking for the
partition and accounting of the other 12 parcels of land of the deceased
spouses Quiterio and Antonina, which are entirely different from the
subject matter of the respondents’ action. Petitioners’ claim does not
arise out of or is necessarily connected with the action for the
Annulment of the Deed of Extrajudicial Settlement of the property
covered by TCT No. 458396. Thus, payment of docket fees is
necessary before the RTC could acquire jurisdiction over petitioners’
petition for partition.
The rule regarding the payment of docket fees upon the filing
of the initiatory pleading is not without exception. It has been held that if
the filing of the initiatory pleading is not accompanied by payment of
docket fees, the court may allow payment of the fee within reasonable
time but in no case beyond the applicable prescriptive or reglementary
period.
3. NO.
Significantly, in petitioners’ Answer with Counter-Petition for
Partition, they enumerated 12 other parcels of land owned by the
deceased spouses Quiterio and Antonina. They alleged that some of
these properties had already been disposed of by respondents and
some are still generating income under the control and administration of
respondents, and these properties should be collated back by
respondents to be partitioned by all the heirs of the deceased spouses.
It bears stressing that the action filed by respondents in the
RTC was an ordinary civil action for annulment of title, annulment of the
deed of extrajudicial settlement and partition of a parcel of land now
covered by TCT No. M-94400; hence, the authority of the court is limited
to the property described in the pleading. The RTC cannot order the
collation and partition of the other properties which were not included in
the partition that was the subject matter of the respondents’ action for
annulment. Thus, a separate proceeding is indeed proper for the
partition of the estate of the deceased spouses Quiterio and Antonina.
BDO vs Sps Locsin
Sps Locsin had 2 loan agreements with BDO secured by 2 separate
properties respectively. Also, they also had a credit line agreement with
the same bank which was secured by a property of their business
partners, Sps Evidante. Sps Locsins defaulted on their credit line
agreement which prompted the bank to file for extra judicial foreclosure
on all 3 properties. The Sps filed for TRO and injunction saying that the
first property should not be included as the Sps have already paid the
amortizations due on that particular loan agreement. The Public auction
pushed through anyway, but was later nullified. BDO then amended
their petition to include all 3 properties. Before the second public auction
could begin, the Sps filed a case of damages against BDO for basically
the same reasons and the QC RTC for allowing the sale. (Mentioned
only VERY later on the facts that there was a “cross-default”
provision on all agreements, that states that default on one loan
will result in the default of all.) So the Sps, basically lost and their
properties auctioned off. BUT because of the interests and legal
expenses, the proceeds from the sale were not enough, BDO now files
a case for collection of sum of money against the Sps in the
Mandaluyong RTC. The Sps filed a Motion to Dismiss on the ground
that it should have been raised as compulsory counterclaim in their
complaint (for specific performance, damages and nullification of the
public auction), and by failing to raise it as such, it is now "barred by the
rules." RTC denied the sps, but CA ruled in their favor.
Issue: Was the collection of sum of money filed in Mandaluyong RTC a
compulsory counterclaim, and therefore should be dismissed? SC- NO,
it should not be dismissed, strictly speaking, it’s not a compulsory
counterclaim.
Held: (Simply put, the SC held that the cause of action against the sps-
which is the deficiency of the total debt from the proceeds of the sale,
arose only after the decision of the QC RTC, so the latter suit in the
Mandaluyong RTC would definitely constitute another suit.)
The counterclaim must be existing at the time of filing the
answer, though not at the commencement of the action for under
Section 3 of the former Rule 10, the counterclaim or cross-claim which a
party may aver in his answer must be one which he may have "at the
time" against the opposing party. That phrase can only have reference
to the time of the answer. Certainly a premature counterclaim cannot be
set up in the answer. This construction is not only explicit from the
language of the aforecited provisions but also serves to harmonize the
aforecited sections of Rule 10, with section 4 of the same rule which
provides that "a counterclaim . . . which either matured or was acquired
by a party after serving his pleading may, with the permission of the
 court, be presented as a counterclaim . . . by supplemental pleading12.
before judgment."
Thus a party who fails to interpose a counterclaim although
arising out of or is necessarily connected with the transaction or
occurrence of the plaintiff's suit but which did not exist or mature at the
time said party files his answer is not thereby barred from interposing
such claim in a future litigation.
Rule 9 of the Rules of Court provides:
"Sec. 2. Compulsory counterclaim, or cross-claim, not set up barred.
— A compulsory counterclaim, or a cross claim, not set up shall be
barred."
The reason for the rule relating to counterclaims is to avoid multiplicity of
suits and to enable the Courts to dispose of the whole matter in
controversy in one action, and adjustment of defendant's demand by
counterclaim rather than by independent suit.
Asian Construction v. CA and Monark
Facts:
4. Asian Construction (petitioner) entered into a contract of lease of
equipment with Monark (respondent);
5. Respondent filed a complaint for sum of money with damages against
petitioner for the latter’s failure to pay its lease obligations;
6. Petitioner filed a motion to file and admit answer with 3 rd party complaint
against Bethel Overseas Corporation (3 rd party); Petitioner admitted its
indebtedness to respondent but alleged that its failure to pay respondent
was due to Bethel’s failure to pay its overdue obligations to petitioner;
a. It appears that a contract was entered into by Asian Construction
(petitioner) and Bethel for a construction project where the leased
equipment from Monark was used;
7. In its 3rd party complaint, petitioner prays that Bethel be ordered to pay.
It also prayed that judgment be rendered in its favor by dismissing the
complaint and order the 3rd party defendant to pay;
8. The RTC and CA denied the 3rd party complaint and allowed judgment
on the pleadings
a. Judgment on the pleadings  when an answer fails to tender an issue
Issue: Whether the 3rd party complaint is proper? – NO.
Ruling:
9. The purpose of Rule 6, Sec. 11 is to permit a defendant to assert an
independent claim against a 3 rd party which he, otherwise, would assert
in another action, thus preventing multiplicity of suits. All the rights of the
parties concerned would then be adjudicated in one proceeding.
10. The right to file a 3rd party complaint against a 3rd party rests in the
discretion of the trial court. The 3rd party complaint is actually
independent of, separate and distinct from the plaintiff’s complaint, such
that were it not for the rule, it would have to be filed separately from the
original complaint.
11. A pre-requisite to the exercise of such right is that (1) some substantive
basis for a 3rd party claim be found to exist, whether the basis be one of
indemnity, subrogation, contribution or other substantive right; (2) the
bringing of a 3rd party defendant is proper if he would be liable to the
plaintiff or to defendant or both for all or part of the plaintiff’s claim
against the original defendant.
When to implead another as 3rd party defendant: 1) whether it arises out
of the same transaction
In the present case, the claims of respondent against the
petitioner arose out of the contracts of lease and sale; such
transactions are different and separate from those between
Bethel and the petitioner as 3 rd party plaintiff for the construction
of the latter’s project. The controversy between the respondent
and petitioner, on one hand, and that between the petitioner and
Bethel, on the other, are entirely distinct from each other.
SY TIONG SHIOU vs SY CHIM
Topic: Third Party Complaint
GR 174168
FACTS:
4 criminal complaints filed by respondents spouses Sy against petitioner
Sy Tiong Shiou for violation of the corporation code and falsification and
perjury under the RPC alleging that they were stockholders and
directors of Sy Siy Ho and sons (the corporation) who were refused
inspection of the books by petitioners and they later found out that their
shares have been diminished. Sy Tiong Shiou contended that the issues
involved in the civil case for accounting and damagaes pending before
the MTC was a prejudicial question which required the suspension of
the criminal complaints. The Investigating Prosecutor requested for the
suspension of the criminal cases which was approved, spouses Sy MR
denied. DOJ resolved for the suspension of the criminal cases, which
resolution was elevated to the CA. CA granted the petition of the
spouses.
SC ruling: The civil action for accounting and damages do not present a
prejudicial question to the criminal cases, because the latter involved
violations of the RPC when the corporation refused to have the spouses
inspect their records and the falsification of the GIS.
GR 179438 – ETO YUNG RELATED SA TOPIC ON 3 rd PARTY
COMPLAINT
FACTS:
Same parties. Juanita Tan, corporate treasurer and wife of petitioner,
submitted a letter to the board stating that the spouses Sy are the
president and assistant treasurer and reported that there were
irregularities in the cash disbursements of the corporation. The
accounting firm hired by the corporation attributed P67M of unaccounted
receipts to the spouses and a demand letter was later on served on
them. A criminal complaint was lodged against the spouses Sy and they
were removed from their corporate positions and replaced by petitioner
and his wife. The Spouses Sy filed their Motion for Leave to File Third-
Party Complaint, praying that their attached Third Party Complaint be
allowed and admitted against Sy Tiong Shiou and his spouse. In the
said third-party complaint, the Spouses Sy accused Sy Tiong Shiou and
Juanita Tan as directly liable for the corporation’s claim for
misappropriating corporate funds. The RTC granted the motion for leave
to file a 3rd party complaint and summons were issued to petitioners and
they defaulted because they were not properly furnished with the copies
of the pleadings. The CA granted the petition of petitioners and declared
that a third-party complaint is not allowed under the Interim Rules of
Procedure Governing Intra-Corporate Controversies.
SC Ruling: The 3rd party complaint should be allowed. There is a
conflict, for while a third-party complaint is not included in the allowed
pleadings, neither is it among the prohibited ones. Nevertheless, this
conflict may be resolved by following the well-entrenched rule in
statutory construction, that every part of the statute must be interpreted
with reference to the context. A third-party complaint is a claim that a
defending party may, with leave of court, file against a person not a
party to the action, called the third-party defendant, for contribution,
indemnity, subrogation or any other relief, in respect of his opponent’s
claim. It is actually a complaint independent of, and separate and
distinct from the plaintiff’s complaint. Jurisprudence is consistent in
declaring that the purpose of a third-party complaint is to avoid circuitry
of action and unnecessary proliferation of law suits and of disposing
expeditiously in one litigation all the matters arising from one particular
set of facts. The Court finds that a third-party complaint is not, and
should not be prohibited in controversies governed by the Interim Rules.
The logic and justness of this conclusion are rendered beyond question
when it is considered that Sy Tiong Shiou and Juanita Tan are not
complete strangers to the litigation as in fact they are the moving spirit
behind the filing of the principal complaint for accounting and damages
against the Spouses Sy.
A prerequisite to the exercise of such right is that some substantive
basis for a third-party claim be found to exist, whether the basis be one
of indemnity, subrogation, contribution or other substantive right. The
bringing of a third-party defendant is proper if he would be liable to the
plaintiff or to the defendant or both for all or part of the plaintiff’s claim
against the original defendant, although the third-party defendant’s
liability arises out of another transaction. The defendant may implead
another as third-party defendant: (a) on an allegation of liability of the
latter to the defendant for contribution, indemnity, subrogation or any
other relief; (b) on the ground of direct liability of the third-party
defendant to the plaintiff; or (c) the liability of the third-party defendant to
both the plaintiff and the defendant.
G.R. No. L-25889 January 17, 1973
HON. GUILLERMO E. TORRES, as Presiding Judge of the Court
of First Instance of Rizal, Branch VIII, THE PROVINCIAL
SHERIFF OF THE PROVINCE OF RIZAL, JAIME E. LAICO and
LUZ LOS BANOS-LAICO,petitioners-appellants,
vs.
HON. COURT OF APPEALS, JOSE CHIVI and ANGELINA CHIVI
as representative of the deceased MARTA B. CHIVI, respondents-
appellees.
On 1 January 1955 the spouses Isidro Sierra and Antonia
Magtaas sold a parcel of land to Marta B. Chivi. They told her that the
land was not registered either under the Land Registration Act or under
the Spanish Mortgage Law and assuring her that although the land was
covered by a pre-war free patent application, the application had not
been approved and no patent had been issued.
The Sierras made that assurance because Chivi was not
willing to buy the land if it was covered by a patent. They agreed that
the purchase price of P10,800.00 was not to be fully paid until the
vendors could have the land registered under Act 496.
Chivi filed an application for registration of the land. While the
application was pending Chivi, on 24 May 1958, sold her rights and
interests in the land to the herein petitioners-spouses Jaime Laico and
Luz Los Banos for P25,647.00, with the stipulation that should Chivi fail
to secure and transfer title to the Laicos she would return to them twice
the amount.
In December, 1959 the Laicos discovered, and in January, 1960 Chivi
learned, that a free patent title had been previously issued to Isidro
Sierra as early as 26 February 1932.
On 14 June 1960, the Sierras filed a complaint against Marta
B. Chivi, and the Laicos, praying that they (plaintiffs) be allowed to
repurchase the land under the provisions of the Public Land Act. The
Chivis and the Laicos filed their answers to the complaint and counter-
claimed for damages by reason of the alleged bad faith,
misrepresentation and fraudulent acts of the Sierras. The Laicos filed a
cross-claim against the Chivis for collection of twice the amount of the
price paid under their sales contract for the latter's failure to deliver title
to the Laicos.
On 12 March 1964 the Sierras and the Laicos entered into a
compromise to amicably, stipulating that the Laicos were now the
absolute owners of the land and that the Sierras would withdraw their
objection to the reconstitution of the patent title and that said title would
be transferred in the name of the Laicos, who would pay P10,000.00 to
the Sierras; that the Sierras would ask for the dismissal of Civil Case
No. 6184 insofar as the Laicos were concerned and would convert their
action in the case from one for repurchase to one for collection of the
balance of the sales price and of damages against the Chivis; that the
Laicos would pursue their cross-claim against the Chivis and in the
event they obtained a favorable judgment thereon they would pay to the
Sierras one-half (1/2) of any amount awarded to them in excess of the
purchase price of P25,647.00.
The compromise, which was executed without the knowledge
of or notice to the Chivis, was approved by the trial court. On the same
date the court dismissed the counter-claim of the Laicos against the
Sierras. Chivi was not notified of the dismissal.
The court set the case for pre-trial and despite notice to the
Sierras and the Chivis, only cross-claimant Jaime Laico and his counsel
appeared. The court declared the Chivis in default and allowed Laico to
present evidence on the cross-claimt.
TC rendered judgment for the Laicos, sentencing the cross-
defendants to pay them a total amount of P15,000.00, plus costs, and
issued a writ of execution. Pursuant to the writ the sheriff levied upon
the properties of the Chivis and issued a notice that the properties would
be sold at public auction.
Chivis filed with the Court of Appeal a petition for certiorari and
prohibition with preliminary injunction to annul: (1) the order of the trial
court authorizing the Laicos to adduce evidence ex parte on their cross-
claim against Marta B. Chivi; (2) the decision rendered on said cross-
claim.
CA rendered decision declaring null and void all the
proceedings on the cross-claim of the spouses Laico against Chivi. MR
was denied.
W/N the cross-claim in this action can stand after the complaint in the
same action was dismissed with prejudice?
SC = NO.
A cross-claim, as defined in Section 7 of Rule 6 is "any claim
by one party against a co-party arising out of the transaction or
occurrence that is the subject matter either of the original action or of a
counterclaim therein."
The cross-claim of the Laicos against the Chivis was for the
recovery of the sum of P51,294.00, upon the allegations that according
to the contract of sale between them, "should the defendants Chivi fail
to transfer the title to the land in question to the VENDEE (defendant
Laico) then the former shall return to the latter (the aforesaid sum) which
is double the amount of the purchase price received by the defendants
Chivi;" and that "the defendants Chivi are/or will be liable on these
warranties and conditions should the plaintiffs (Sierras) finally obtain
favorable judgment in their favor.
Even viewing the situation in the light most favorable to the
Laicos, their cross-claim on Chivi's warranty to deliver title to them was
so inextricably linked with and so utterly dependent upon the success of
the complaint of the Sierras for the repurchase of the land that when the
complaint was dismissed the cross-claim could not possibly survive. For
as the cross-claimants themselves alleged, the cross-defendants would
be liable on the warranty "should the plaintiffs finally obtain favorable
judgment in their favor"
Apropos is the following statement of the legal principle:
A cross-bill strictly speaking is one brought by a defendant in an equity
suit against ... other defendants in the same suit, touching the matters in
question in the original bill. It is considered as an auxiliary suit
dependent upon the original bill, and can be sustained only on matters
growing out of the original bill. There is a well-defined distinction
between a cross-bill merely defensive in character, and one seeking
affirmative relief. The dismissal of the original bill carries with it a purely
defensive cross-bill but not one seeking affirmative relief.
The cross-claim in this case was purely defensive in nature. It
arose entirely out of the complaint and could prosper only if the plaintiffs
succeeded. Hence, under the principle above enunciated, it could not be
the subject of independent adjudication once it lost the nexus upon
which its life depended.
Under the circumstances above set forth the dismissal of the
cross-claim should have followed the dismissal of the complaint as a
matter of course, without further proceeding; and in setting the said
cross-claim for pre-trial and receiving evidence thereon and then
rendering judgment against the cross-defendants the court committed
such a grave abuse of discretion amounting to lack of jurisdiction
correctible by certiorari.
Munsalud vs NHA
DOCTRINE: INSUFFICIENCY in form and substance, as a ground for
dismissal of the complaint, should not be based on the title or caption,
especially when the allegations of the pleading support an action.
FACTS
Petitioner Winnie Munsalud is the daughter and one of the
compulsory heirs of the late Lourdes Bulado (Bulado). During the
lifetime of Bulado, respondent NHA awarded her a lot. The award was
made pursuant to the “Land for the Landless” program of respondent.
She resided at the said property until her death.
When Bulado died, petitioner Winnie assumed the obligation
to pay the monthly amortizations. Respondent NHA recognized
petitioner spouses’ assumption of obligations as their names were
reflected in the receipts. They were allowed to occupy the lot up to the
present.
Petitioners completed the payments of the amortizations due
on the property. Reflected on the left side portion of the official receipt
evidencing full payment is the annotation “full payment.” Consequently,
petitioners demanded that respondent NHA issue in their favor a deed of
sale and a title over the property. Respondent, however, refused.
Petitioners instituted a complaint for mandamus before the
court a quo.
RTC and CA dismissed the case. Hence this petition.
ISSUE: whether in giving due course to an action, the court is fenced
within the parameters of the title given by plaintiff to the case without
regard to the averments of the pleading / does the trial court have
absolute discretion to dismiss an action on the ground that it is
insufficient in form and substance based alone on its designation
when, from the body and the relief prayed for, it could stand as an action
sufficient in form and substance?
Petitioners’ action designated as mandamus was dismissed
by the trial court on the ground that it is insufficient in form and
substance. This begs the question: when is an action sufficient in form
and when is it sufficient in substance?
HELD:
The petition mandamus reveals that it is sufficient in form. It
has the caption with the name of the court, the name of the parties,
and the docket number. The complaint contains allegations of
petitioners’ claims. It has a prayer and the date when it was prepared.
The signature page shows the signature and name of petitioners’
counsel, the counsel’s IBP, PTR and Roll of Attorney’s Numbers. The
complaint was also verified and accompanied by a certificate of non-
forum shopping and signed by petitioners as plaintiffs. It was filed
personally with the office of the clerk of court.
Now, is the petition insufficient in substance?
Substance is that which is essential and is used in opposition
to form] It is the most important element in any existence, the
characteristic and essential components of anything, the main part, the
essential import, and the purport.
 Substance is one which relates to the material allegations in
the pleading. It is determinative of whether or not a cause of action
exists.
The court a quo anchored the dismissal of petitioners’
complaint on the basis of Rule 65, Section 3 1[25] of the 1997 Rules of
Civil Procedure. It found that there was no reference to any law
which respondent NHA, by reason of its office, trust or station, is
specifically enjoined as a duty to perform. It declared that there was no
allegation in the petition below that respondent is unlawfully excluding
petitioners from using or enjoying any right or office which said
petitioners are entitled to.
Although the complaint was captioned as Mandamus,
petitioners’ averments, as well as the relief sought, called for an
action for specific performance.
The designation or caption is not controlling, more than
the allegations in the complaint, for it is not even an
indispensable part of the complaint.
Instead of focusing on what an action for mandamus should
contain, the court a quo should have proceeded to examine the
essential facts alleged in petitioners’ complaint. For what determines
the nature of the action and which court has jurisdiction over it are the
allegations in the complaint and the character of the relief sought. 2[30]
The trial court is reminded that the caption of the
complaint is not determinative of the nature of the action. 3[32] The
caption of the pleading should not be the governing factor, but rather the
allegations in it should determine the nature of the action, because
even without the prayer for a specific remedy, the courts may
nevertheless grant the proper relief as may be warranted by the facts
alleged in the complaint and the evidence introduced. 4[33]
WHEREFORE, the appealed Decision is REVERSED AND
SET ASIDE. The case is REMANDED to the Regional Trial Court
which is ORDERED to reinstate the case and to conduct trial on the
merits with dispatch.
G.R. No. 149576 August 8, 2006
REPUBLIC OF THE PHILIPPINES, represented by the Land
Registration Authority, Petitioner,
vs.
KENRICK DEVELOPMENT CORPORATION, Respondent.
F: The case is for revocation of Certificates of Title.
R constructed a concrete perimeter fence on a parcel of land
behind the Civil Aviation Training Center of the Air Transportation Office
(ATO). As a result, ATO was dispossessed of some 30,228 square
meters of land. R justified its action with a claim of ownership over the
property based on a TCT in the name of Alfonso Concepcion.
The ATO verified the said TCT with the LRA and found out that
there was no record of such in the Register of Deeds. Hence, the OSG
filed the aforementioned complaint. The R filed its Answer, purportedly
signed by Atty. Garlitos, Jr. as counsel. During the pendency of the
1 plaintiff PIRC filed a Notice of Appeal which respondents opposed on
2 the Interim Rules and Procedures governing intra-corporate
3
4
case, the Senate Blue Ribbon Committee conducted a hearing in aid of
legislation where in Atty. Garlitos, Jr. was summoned. Here, he testified
that the signature on the Answer was not his nor did he authorize
anyone to sign on his behalf.
Hence, the P Republic filed a Motion to Declare R in default
averring that since the Answer was an unsigned pleading, it was a mere
scrap of paper with no legal effect. RTC granted the Motion to Declare in
Default. CA reversed. Hence this Petition.
I: WN the R should be declared in default for failing to file a valid
answer.
H/R: YES because the answer was invalid for being unsigned,
neither could the signing be delegated.
Section 3, Rule 7 provides that a pleading must be signed by
the party or counsel representing him. Therefore, only the signature of
either the party himself or his counsel operates to validly convert a
pleading from one that is unsigned to one that is signed. Counsel’s
authority and duty to sign a pleading are personal to him. He may not
delegate it to just any person. The signature of counsel constitutes an
assurance by him that he has read the pleading; that, to the best of his
knowledge, information and belief, there is a good ground to support it;
and that it is not interposed for delay.
Rule 9.01 of the Code of Professional Responsibility provides:
“A lawyer shall not delegate to any unqualified person the performance
of any task which by law may only be performed by a member of the Bar
in good standing.” Thus, the preparation and signing of a pleading
constitute legal work involving practice of law which is reserved
exclusively for the members of the legal profession. Counsel may
delegate the signing of a pleading to another lawyer but cannot do so in
favor of one who is not. Therefore, the blanket authority respondent
claims Atty. Garlitos entrusted to just anyone was void.
G.R. No. 172449, August 20, 2008
Madara vs. Porillo
FACTS:
Plaintiffs alleged that they were elected PIRC’s directors and officers
and that despite this information, PIRC’s lessee PAGCOR, still
continued to remit its lease rentals to PIRC's former corporate officers
Petitioners filed a first amended complaint before the RTC to order
PAGCOR to pay its monthly lease rentals to petitioners and no other
Respondents countered that they are the bona fide directors and
officers of PIRC
Petitioners filed a second amended complaint alleging that the original
incorporators merely held the initial paid-up stockholdings in trust for the
real stockholders - the petitioners and that despite the election of the
new set of PIRC officers, the respondents continue to unlawfully
exercise possession of the PIRC office
The two amended complaints were consolidated
RTC ruled in favor of the respondents, finding them to be the true and
duly constituted members of the board of directors and the duly elected
officers of PIRC
the ground that the petitioners had taken a wrong mode of review under
controversies which provides the party aggrieved by the decision of a
commercial/corporate court has fifteen (15) days from receipt of the
decision within which to file a Petition for Review under Rule 43 with the
Court of Appeals, not a Notice of Appeal
 
petitioners then filed a Motion to Admit Petition for Review with the
attached Petition for Review with the Court of Appeals

Via an Ex-Parte Manifestation and Motion dated 20 June 2005, [18] they
asked the Court of Appeals to consider their petition for review as
withdrawn

petitioners then filed before the trial court a Petition for Relief from
Judgment

RTC ruled that its decision had become final and executory and entry of
judgment was in order and denied petitioners’ petition for relief from
judgment. It ordered the execution of the decision.
 RTC cited as basis the procedural errors the plaintiff PIRC committed in
filing a notice of appeal instead of a petition for review, and in later filing
a belated petition for review
 Meanwhile, the Court of Appeals granted the petitioners' Ex-Parte
Manifestation and Motion in, resulting in the withdrawal of the Petition
for Review
 Pending the proceedings in the RTC, petitioners filed a Petition
for Certiorari[24] under Rule 65 with the Court of Appeals, assailing on the
ground of grave abuse of discretion the following orders issued by the
RTC and the various notices issued by the sheriff
 respondents alleged that the petitioners committed forum shopping
 furthermore, when RTC denied their MTD, petitioners filed in their own
and individual capacities another Petition for Certiorari with the Court of
Appeals
 CA however dismissed their petition for lack of merit and forum
shopping
 on appeal to the Supreme Court, petitioners never disclosed all these
material developments
 petitioners argue that the pleadings cited by the Court of Appeals
purportedly showing that the petitioners were parties to the consolidated
cases were filed after the RTC rendered judgment; this is the natural
reaction of persons who, while not parties to the case, were being held
liable under the RTC decision. Thus, the filing of these post-judgment
pleadings cannot mean that they were parties; a mere claim in a post-
judgment pleading that they are parties, which is however negated by
the records of the case, is an inconsequential oversight and should not
be considered as voluntary submission to the jurisdiction of the court
ISSUE: whether or not petitioners committed forum shopping
HELD: YES
 appellate court's dismissal of the first petition on the ground of forum
shopping is correct. Separately from the forum shopping violation before
the Court of Appeals, the petitioners also committed forum shopping and
violated their forum shopping certification in seeking relief from this
Court
 the petitioners indulged in a clear case of forum shopping before the
CA. One of the assailed orders in CA - GR SP No. 90821 was the RTC's
1 July 2005 Order. At the time the petition was filed with the appellate
court, the RTC had yet to resolve the motion for reconsideration of the 1
July 2005 Order. This is a clear case of forum shopping, as the
petitioners sought, at the same time, two separate remedies with two
different judicial venues (the RTC and the Court of Appeals), to obtain
one and the same relief - the nullification of the RTC decision in Civil
Case Nos. 02-228 and 02-238 and its non-enforcement against the
individual petitioners
 despite the fact that what the petitioners filed was a petition
forcertiorari, a recourse that - in the usual course and because of its
nature and purpose - is not covered by the rule on forum shopping
 The exception from the forum shopping rule, however, is true only where
a petition for certiorari is properly or regularly invoked in the usual
course; the exception does not apply when the relief sought, through a
petition for certiorari, is still pending with or has as yet to be decided by
the respondent court, tribunal or body exercising judicial or quasi-judicial
body
In the required sworn certification attached to the petition for review filed
with us, the petitioners stated under oath that they have not commenced
any other action or proceeding involving the same issues in the
Supreme Court, Court of Appeals or any other tribunal or agency, or that
any such action or proceeding is pending with us, the Court of Appeals,
or any other tribunal agency. Despite this certification and undertaking,
the petitioners never disclosed to this Court the pendency of CA-GR SP
No. 91950 or any of its material developments
the petitioners forum-shopped when it filed the present petition. They
also filed with this Court a false certification of non-forum shopping and
blatantly violated as well their undertaking in their sworn certification
 If only for these reasons, the present petition for review must
be summarily dismissed
Verification/Certification
Kaunlaran Lending vs. Uy (2008)
Uy filed a complaint for annulment of REM and related
documents plus damages before RTC Dagupan, against Kainlaran. Uy’s
son Jose and her nephew Virgilio established a buy and sell business
selling 2nd hand cars. They looked for investors until they came across
Kaunlaran who gave a loan. Uy issued an SPA in benalf of Jose, which
mortaged properties to get the loan.
Magno, then the manager of KLII, brought to Loreta’s
residence the loan forms she had earlier signed and another set of loan
forms, together with a blank Solidbank check drawn from the account of
KLII and a check voucher. Magno explained to Uy that the new set of
loan forms would be sent to Manila and that the proceeds of the loan
would be promptly delivered to her residence once she affixes her
signature on the said check and voucher. When Jose returned home
and learned about what transpired during his absence, he confronted
Magno at the KLII office and was told that the documents bearing on the
loan application were already sent to Lelia and that Loreta’s signatures
on the blank Solidbank check and the check voucher were procured on
Lelia’s instructions.
A verification from the Register of Deeds of Quezon
City revealed that the real estate mortgage in favor of KLII to secure
aP800,000 loan was annotated on Loreta’s titles. The copy of the
document on file at the office of the Register of Deeds bore only Uy’s
signature and it was notarized in the absence of Uy.
Uy and Jose thus sent telegrams to KLII and to the Register of
Deeds of Quezon City requesting the setting aside of the transaction
and the denial of registration of the mortgage, respectively, but to no
avail. Concluding that the real estate mortgage, promissory note,
Solidbank check and “the other documents related thereto” were
absolute nullities due to the absence of consideration and vitiated
consent, Loreta prayed for their annulment and for damages.
Uy filed a criminal complaint for estafa against Kaunlaran,
specifically Leila, Wilfredo and Magno. Lelia denied being the owner of
the controlling interest of Kaunlaran

The Court of Appeals, by Decision of April 11, 2002, reversed
the trial court’s decision, declaring the real estate mortgage and
promissory note null and void. Thus it disposed:
Lelia, Wilfredo, and KLII moved for reconsideration which was
[26]
denied, prompting KLII and Lelia to file before this Court the present
petition which faults the appellate court to have
1. gravely abused its discretion and evidently misappreciated the testimony
of Magno Zareno by giving it credence, contrary to the findings of [the
trial court] which heard and saw him testify;
2. erred in giving more credence to the witnesses for the private respondent,
in direct contrast to the findings of [the trial court] which heard the
witnesses and observed their demeanor[;]
3. erred in awarding attorney’s fees of P100,000.00, when the award of
moral and exemplary damages are not awarded. Moreover, the reason
for the award was not explained in the decision.
In her Comment, Uy moves for the dismissal of the petition
due to defective verification and certificate of non-forum shopping,
adding that the petition raises factual issues.
fails in light of this Court’s ruling that
In case of a corporation, it has long been settled that the
certificate [of non-forum shopping] must be signed for and on its behalf
by aspecifically authorized officer or agent who has personal knowledge
of the facts required to be disclosed.
xxxx
Consequently, without the needed proof from the board of
directors, the certificate would be considered defective. Thus, xxx even
the regular officers of a corporation, like the chairman and president,
may not even know the details required in acertificate of non-forum
shopping; they must therefore be authorized by the board of directors
just like any other officer or agent.
The merits of the petition, however, justify the relaxation of the
rule on verification and certificate of non-forum shopping, for from a
review of the records Loreta has not proven by preponderance of
evidence that she was deceived into signing the documents required for
the release of the proceeds of the loan.
Sps Valmonte v Alcala
The Sps Valmonte were the unregistered owners of the apartment that
Alcala was staying in. The wife Valmonte acquired the apartment
through inheritance from her parents. As the Sps were US residents,
they opted to rent it out to Alcala. However, after failing to pay the rent
for many months, the Sps filed, through their lawyer (remember, the Sps
Valmonte were in the US during these proceedings, which brought
about the complications) a case for unlawful detainer against Alcala.
Alcala’s defense was she was already the owner of the apartment as
the Sps already sold it to her. MTC ruled in favor of the Sps, RTC for
Alcala. When it came to the CA, the Sps appeal was dismissed on a
technicality. Since the Sps were residents of the US, they signed their
Verification/Certification of Non-Forum Shopping of their complaint
before a notary public in the US. From there, it will have to be
authenticated in accordance with US law, then sent to the Philippine
consulate then to the Philippines, this was 17 Mar 2005. Their petition
before the CA however was 31 Mar 2005, BUT they Sps’ lawyer
attached a photostatic copy of the Verification with the manifestation that
as soon as the Philippine consulate authenticates the legal document, it
will be forwarded to the court immediately. The CA said “while the
verification/certification was purportedly executed on March 17, 2005,
the petition is dated March 31, 2005. Petitioners could not have actually
read and understood the petition or attested to the truth of the contents
thereof because at the time they executed the verification/certification,
the petition was still inexistent.”
Issue: (basically, was it reasonable of the CA to consider that just
because there is a variance to the date of the verification and the actual
filing of the petition, that the case should be dismissed for not following
the rules on verification?) NO- Remanded to the CA.
Held:
First, the variance of the date, is not too farfetched as the
Petition normally is just prepared by the lawyer, in this case, it was sent
to the Sps via email, “To demand the litigants to read the very same
document that is to be filed before the courts is too rigorous a
requirement; what the Rules require is for a party to read the contents of
a pleading without any specific requirement on the form or manner in
which the reading is to be done.”
Second, the Sps were in the US the entire time. Even if the
Sps promptly filed their verification from the US, it will still have to go to
the real world process of going through the bureaucracy from the US all
the way to the Philippines, also, it was Holy Week when they filed their
verification, holiday in the Philippine Consulate.
Third, the Sps demonstrated utmost good faith when they
attached a photostatic copy of the verifications with the manifestation
that they will submit the originals as soon as they arrive from the
Philippine Consulate.
Fourth, the material allegations filed with the CA are
essentially the same with the petition file with the MTC, which was
properly Verified, “in which petitioners declared under oath that they had
caused the preparation of the complaint through their lawyers and had
read and understood the allegations of the complaint.” The verification
with the CA in this instance would only be a redundancy.
Mactan – Cebu International Airport Authority v. Heirs of
Estanislao Minoza
Facts:
The late Estanislao Minoza entered into a contract of sale of land with
the National Airports Corporation (NAC). The deed of sale had an
assurance that Estanislao can buy the properties back if the lots are no
longer needed. The expansion project did not push through. 40 years
 after, the heirs of Estanislao informed petitioner that they were
exercising the buy back option but was refused to do so.

A motion for intervention with an attached complaint-in-intervention was
filed by the heirs of Filomeno Minoza (intervenors) claiming that they
were the true, legal and legitimate heirs of the late Estanislao Minoza

RTC denied motion for intervention (No verification and certification of
non-forum shopping was included); CA reversed the RTC
1. *As to the lack of verification and certification of non-
forum shopping, the CA opined that the filing of the motion for
reconsideration with an appended complaint-in intervention containing
the required verification and certificate of non-forum shopping amounted
to substantial compliance of the rules
Issue: Whether lack of verification and certification of non-forum
shopping is fatal to the petition? – NO.
Ruling:

The initial lack of complaint-in-intervention of the requisite
verification and certification of non-forum shopping was cured
when the intervenors, in their motion for reconsideration of the
order denying the motion to intervene, appended a complaint-in-
intervention containing the required verification and certificate of
non-forum shopping

As to verification, non-compliance therewith or a defect therein does
not necessarily render the pleading fatally defective. The court may
order its submission or correction, or act on the pleading if the attending
circumstances are such that strict compliance with the Rule may be
dispensed with in order that the ends of justice may be served thereby.
Further, a verification is deemed substantially complied with when one
who has ample knowledge to swear to the truth of the allegations in the
complaint or petition signs the verification, and when matters alleged in
the petition have been made in good faith or are true and correct;

As to the certification against forum shopping, non-compliance
therewith or a defect therein, unlike in verification, is generally not
curable by its subsequent submission or correction thereof, unless there
is a need to relax the Rules on the ground of “substantial compliance” or
presence of “special circumstances or compelling reasons.” Also, the
certification against forum shopping must be signed by all the plaintiffs
or petitioners in a case; otherwise, those who did not sign will be
dropped as parties to the case. Under reasonable or justifiable
circumstances, however, as when all the plaintiffs or petitioners share a
common interest and invoke a common cause of action or defense, the
signature of only one of them in the certification against forum shopping
substantially complies with the Rule
considering that the intervenors in their motion for
reconsideration, appended a complaint-in-intervention with the
required verification and certification of non-forum shopping, the
requirement of the rules was substantially complied with. BUT
attempt to intervene is doomed to fail
MID-PASIG LAND DEVELOPMENT CORPORATION vs TABLANTE
Topic: who can sign without secretary’s certificate
FACTS:
Mid-land is a registered owner of land in pasig. Petitioner was
represented by its president Salonga and he entered into an agreement
with respondent who is the proprietor of ECRM Enterprises. The
agreement was for the lease of the land to Tablante for 3 months for a
Home and Garden Exhibition. At the date of the expiration of the Lease
Agreement, Tablante assigned his rights and interests to Rockland
corporation. Petitioner eventually learned that Tablante executed a
Lease Contract with MC Home Depot whi constructed improvements on
the land. Upon the expiration of the lease, petitioner demanded
respondents to vacate and in order to forestall the ejectment,
respondents filed a specific performance case with the RTC against
petitioner compelling them to renew the lease contract for another 3
years. Petitioner filed an unlawful detainer in the MTC but it was
dismissed for lack of jurisdiction, since the issue was the right of ECRM
to exercise an option to renew the lease of contract incapable of
pecuniary estimation and therefore cognizable by the RTC.
A petition for certiorari was filed with the CA which dismissed the case
on the ground that the verification and certification against non forum
shopping was signed by Merelos, the General Manager of the
corporation without attaching a Corporate Secretary’s certificate or
board resolution authorizing him to sign for and in behalf of petitioner.
ISSUE:
Whether the general manager can sign the verification and certification
even without the corporate secretary certificate? YES
RATIO:
While an individual corporate officer cannot solely exercise any
corporate power without authority from the board, we have
recognized the authority of some corporate officers and we
recognize the authority of the GM to sign the verification and
certification without need for board resolution. In sum, we have
held that the following officials or employees of the company can
sign the verification and certification without need of a board
resolution: (1) the Chairperson of the Board of Directors, (2) the
President of a corporation, (3) the General Manager or Acting
General Manager, (4) Personnel Officer, and (5) an Employment
Specialist in a labor case. From the foregoing, it is thus clear
that the failure to attach the Secretary’s Certificate, attesting to
General Manager Antonio Merelos’s authority to sign the
Verification and Certification of Non-Forum Shopping, should not
be considered fatal to the filing of the petition. Nonetheless, the
requisite board resolution was subsequently submitted to the
CA, together with the pertinent documents. Considering that
petitioner substantially complied with the rules, the dismissal of
the petition was, therefore, unwarranted.

G.R. No. 94093 August 10, 1993
FAR EAST MARBLE (PHILS.), INC., LUIS R. TABUENA, JR. and
RAMON A. TABUENA, petitioners,
vs.
HONORABLE COURT OF APPEALS and BANK OF PHILIPPINE
ISLANDS, respondents.
On February 5, 1987, herein respondent Bank of the
Philippines Islands (BPI) filed a complaint for foreclosure of chattel
mortgage with replevin against petitioner Far East Marble (Far East),
Ramon A. Tabuena and Luis R. Tabuena, Jr.
In its answer, Far East admitted the genuineness and due
execution of the promissory notes involved in the case, but denied BPI's
allegation that repeated demands for payment were made by BPI on it .
Far East then raised the affirmative defenses of prescription and lack of
cause of action, arguing that since the promissory notes matured in
1976 while BPI filed its action to foreclose the chattel mortgage only in
1987 (or more than 10 years from the time its cause of action accrued),
and there being no demand for payment which would interrupt the
period of prescription for instituting said action, BPI's claims have
prescribed.
BPI countered that its allegation of repeated demands on Far
East for payment sufficiently stated a cause of action; that within ten
years from the time its cause of action accrued in 1976, it sent written
extrajudicial demands on Far East requesting payment of its due and
outstanding obligations; that within that 10-years period, it received
written acknowledgments of debt from Far East; and, that these
demands for payment and acknowledgments of debt effectively
interrupted and renewed the prescriptive period. Worth noting is the fact
that the acknowledgment of debt and the demands for payment,
including the affidavits of BPI's counsel who prepared the demand letter
and that of BPI's messenger who allegedly personally delivered said
letters to Far East were duly annexed to BPI's pleadings.
We now come to petitioner's assigned errors.
The trial court's finding that BPI's claims due to prescription,
can no longer prosper, is inextricably connected with, and underpinned
by, its other conclusion that BPI's allegation that it made "repeated
requests and demands for payment" is not sufficient to state a cause of
action. The trial court held that:
Apart from the fact that the complaint failed to allege that the period of
prescription was interrupted, the phrase "repeated requests and
demands for payment" is vague and incomplete as to establish in the
minds of the defendant, or to enable the Court to draw a conclusion, that
demands or acknowledgment [of debt] were made that could have
interrupted the period of prescription.
W/N the interruption of the prescriptive period to institute an action is an
ULTIMATE FACT which had to be expressly and indispensably pleaded
by BPI in its complaint, and that failure to so alleged such circumstance
is fatal to BPI's cause of action.
SC = We believe and hold otherwise.
Section 3 of Rule 6 state that a "complaint is a concise
statement of the ultimate facts constituting the plaintiff's cause or causes
of action." Further elaborating thereon, Section 1 of Rule 8 declares that
every pleading, including, of course, a complaint, "shall contain in a
methodical and logical form, a plain, concise and direct statement of the
ultimate facts . . . omitting the statement of mere evidentiary facts."
"Ultimate facts" are the essential and substantial facts which either form
the basis of the primary right and duty or which directly make up the
wrongful acts or omissions of the defendant, while "evidentiary facts"
are those which tend to prove or establish said ultimate facts.
What then are the ultimate facts which BPI had to allege in its
complaint so as to sufficiently establish its cause of action?
Basically, a cause of action consists of three elements,
namely: (1) the legal right of the plaintiff; (2) the correlative obligation of
the defendant; and (3) the act or omission of the defendant in violation
of said legal right.
These elements are manifest in BPI's complaint, particularly when it was
therein alleged that: (1) for valuable consideration, BPI granted several
loans, evidenced by promissory notes, and extended credit facilities in
the form of trust receipts to Far East (photocopies of said notes and
receipts were duly attached to the Complaint); (2) said promissory notes
and trust receipts had matured; and (3) despite repeated requests and
demands for payment thereof, Far East had failed and refused to pay.
Clearly then, the general allegation of BPI that "despite
repeated requests and demands for payment, Far East has failed to
pay" is sufficient to establish BPI's cause of action.
Besides, prescription is not a cause of action; it is a defense which,
having been raised, should, as correctly ruled by the Court of Appeals,
be supported by competent evidence. But even as Far East raised the
defense of prescription, BPI countered to the effect that the prescriptive
period was interrupted and renewed by written extrajudicial demands for
payment and acknowledgment by Far East of the debt.
A complaint is sufficient if it contains sufficient notice of the
cause of action even though the allegation may be vague or indefinite,
for in such case, the recourse of the defendant would be to file a motion
for a bill of particulars.
In the case at bar, the circumstances of BPI extending loans and credits
to Far East and the failure of the latter to pay and discharge the same
upon maturity are the only ultimate facts which have to be pleaded,
although the facts necessary to make the mortgage valid enforceable
must be proven during the trial.
In fine, the finding of the trial court that prescription has set in
is primarily premised on a misappreciation of the sufficiency of BPI's
allegation as above discussed. The records will show that the hearing
conducted by the trial court was merely pro forma and the trial judge did
not sufficiently address the issue of whether or not a demand for
payment in fact made by BPI and duly received by herein petitioner Far
East.
WHEREFORE, the instant petition is hereby DENIED.
FILIPINAS TEXTILE VS CA
FACTS: On December 6, 1985, SIHI instituted a Complaint5[4] for the
collection of the sum of P3,118,949.75, with interest, penalties,
exemplary damages, attorneys fees and costs of suit against herein
petitioners Filtex and Villanueva.
In its Complaint, SIHI alleged that sometime in 1983, 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 6[5]
5
6
authorizing Indo-Philippine Textile Mills, Inc. (“Indo-Phil”), Texfiber
Corporation (“Texfiber”), and Philippine Polyamide Industrial Corporation
(“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.
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 agreement7[7] on November 9, 1982, whereby he guaranteed,
jointly and severally with Filtex, the full and punctual payment at maturity
to SIHI of all the indebtedness of Filtex.
In order to ensure the payment of the sight drafts aforementioned,
Filtex executed and issued to SIHI several trust receipts 8[8] of various
dates, which were later extended with the issuance of replacement trust
receipts covering the merchandise sold.
Because of Filtex’s failure to pay its outstanding obligation despite
demand, SIHI filed a Complaint on December 6, 1985 praying that the
petitioners be ordered to pay, jointly and severally, the principal amount
of P3,118,949.75, plus interest and penalties, attorney’s fees, exemplary
damages, costs of suit and other litigation expenses.
In its Answer with Counterclaim,9[9] Filtex interposed special and
affirmative defenses, i.e., the provisions of the trust receipts, as well as
the comprehensive surety agreement, do not reflect the true will and
intention of the parties, full payment of the obligation, and lack of cause
of action. For his part, Villanueva interposed the same special and
affirmative defenses and added that the comprehensive surety
agreement is null and void and damages and attorney’s fees are not
legally demandable.10[10] The petitioners, however, failed to
specifically deny under oath the genuineness and due execution
of the actionable documents upon which the Complaint was
based.
RTC rendered judgment11[11] holding Filtex and Villanueva jointly
and severally liable to SIHI. CA affirmed.]
ISSUE: whether or not the letters of credit, sight drafts, trust receipts
and comprehensive surety agreement are admissible in evidence
despite the absence of documentary stamps thereon as required by the
Internal Revenue Code.12[20]
HELD: yes
We rule in the affirmative. As correctly noted by the respondent, the
Answer with Counterclaim13[21] and Answer,14[22] of Filtex and Villanueva,
respectively, did not contain any specific denial under oath of the letters
7 13
8 14
9 15
10
11
12
of credit, sight drafts, trust receipts and comprehensive surety
agreement upon which SIHI’s Complaint15[23] 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.
Moreover, under Section 173 of the Internal Revenue Code the
liability for payment of the stamp taxes is imposed on “the person
making, signing, issuing, accepting, or transferring” the document. As
correctly pointed out by SIHI, Filtex was the issuer and acceptor of the
trust receipts and sight drafts, respectively, while the letters of credit
were issued upon its application. On the other hand, Villanueva signed
the comprehensive surety agreement. Thus, being among the parties
obliged to pay the documentary stamp taxes, the petitioners are
estopped from claiming that the documents are inadmissible in evidence
for non-payment thereof.
Interestingly, the petitioners questioned the admissibility of these
documents rather belatedly, at the appeal stage even. Their respective
answers16[25] to SIHI’s Complaint were silent on this point. The rule is
well-settled that points of law, theories, issues and arguments not
adequately brought to the attention of the trial court need not, and
ordinarily will not, be considered by a reviewing court as they cannot be
raised for the first time on appeal because this would be offensive to the
basic rules of fair play, justice and due process.17[26]
Hence, the petitioners can no longer dispute the admissibility of
the letters of credit, sight drafts, trust receipts and comprehensive surety
agreement. However, this does not preclude the petitioners from
impugning these documents by evidence of fraud, mistake,
compromise, payment, statute of limitations, estoppel and want of
consideration.18[27]
G.R. No. 152154 July 15, 2003
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
HONORABLE SANDIGANBAYAN (SPECIAL FIRST DIVISION),
FERDINAND E. MARCOS (REPRESENTED BY HIS
ESTATE/HEIRS: IMELDA R. MARCOS, MARIA IMELDA [IMEE]
MARCOS-MANOTOC, FERDINAND R. MARCOS, JR. AND
IRENE MARCOS-ARANETA) AND IMELDA ROMUALDEZ
MARCOS, respondents.
F: The case is a Petition for Forfeiture before the
Sandiganbayan.
16
17
18
 The P seeks that the amount of $356M (now $658M) form of negative expression which carries with it an affirmation or at
deposited in escrow in the PNB be declared as ill-gotten wealth by the least an implication of some kind favorable to the adverse party.
Marcoses. The said amount was initially deposited with Swiss Banks. P Under the foregoing, SJ is proper.
filed with the District Attorney in Zurich, Switzerland, a request for the (Not pertinent to issue on specific denial, but in case asked...)
transfer of the amount to an escrow account in the PNB. After As to the propriety of forfeiture, The law raises the
determination that the funds were indeed ill-gotten wealth, the Swiss prima facie presumption that a property is unlawfully acquired, hence
Federal SC granted the request. Hence, the funds are now in escrow subject to forfeiture, if its amount or value is manifestly disproportionate
with the PNB. P now seeks the Forfeiture of the said amount in its to the official salary and other lawful income of the public officer who
favor. owns it.
In the case at hand, the two elements were estanblished. First, it was proved that the
The R Marcoses filed their Answer and pre-trial ensued. Afgter
Marcoses owned the funds during their incumbency. Second, it was grossly disproportionate to their income. Clearly, the
several resettings, P filed a Motion for Summary Judgment alleging that
amount was ill-gotten and should therefore be forfeited in favor of the P Republic.
the R Marcoses failed to tender a genuine issue. The Sandiganbayan
initially granted, but then reversed itself (M for SJ was denied). Hence G.R. No. L-9531 May 14, 1958
this Petition. WARNER BARNES and CO., LTD., plaintiff-appellee,
I: WN R’s Answer failed to tender a genuine issue. vs.GUILLERMO C. REYES, ET AL., defendants-appellants
H/R: YES, R’s failed to tender a genuine issue by failing to
FACTS:
substantiate their specific denials. Hence, Summary Judgment should
 Petitioners filed against the defendants-appellants an action for
ensue. foreclosure of mortgage
Summary J is based on Rule 35, Sec 1. It is described as a The deed of mortgage sued upon was attached to the complaint as
judgment which a court may render before trial but after both parties Annex "A"
have pleaded. It is ordered by the court upon application by one party, After having been granted an extension, the appellants filed an answer
supported by affidavits, depositions or other documents, with notice alleging:
upon the adverse party who may in turn file an opposition supported
also by affidavits, depositions or other documents. This is after the court 1. That they admit paragraph 1 of the complaint;
2. That the defendants are without knowledge or information sufficient to
summarily hears both parties with their respective proofs and finds that form a belief as to the truth of the material averments of the remainder
there is no genuine issue between them (Auman v. Estenzo). of the complaint; and
In the present case, R failed to tender genuine issues. All they 3. That they hereby reserve the right to present an amended answer with
gave were stock answers like "they have no sufficient knowledge" or special defenses and counterclaim
"they could not recall because it happened a long time ago," and, as to
Mrs. Marcos, "the funds were lawfully acquired," without stating the appellants did not file any amended answer so petitioners moved for
basis of such assertions. judgment on the pleadings on the ground that the answer failed to
Section 10, Rule 8 provides that a defendant must specify tender an issue
each material allegation of fact the truth of which he does not admit. The
purpose of requiring respondents to make a specific denial is to make RTC granted petitioners motion and thereafter rendered a judgment in
them disclose facts which will disprove the allegations of petitioner at their favor
the trial, together with the matters they rely upon in support of such
denial. It is to avoid and prevent unnecessary expenses and waste of the lower court held "that the denial by the defendants of the material
time by compelling both parties to lay their cards on the table, thus allegations of the complaint under the guise of lack of knowledge is a
reducing the controversy to its true terms. general denial so as to entitle the plaintiff to judgment on the pleadings
In the present case, Mrs. Marcos she claimed that the funds
were lawfully acquired. However, she failed to particularly stateISSUE: the whether the allegations made by defendants-appellants sufficient to
ultimate facts surrounding the lawful manner or mode of acquisition of tender a triable issue
the subject funds. Simply put, she merely stated in her answer with the HELD: NO
other respondents that the funds were "lawfully acquired" without Section 7 of Rule 9 of the Rules of court, in allowing the defendant to
controvert material averments not within his knowledge or information,
detailing how exactly these funds were supposedly acquired legally by
provides that "where the defendant is without knowledge or information
them. It is true that one of the modes of specific denial under the rules is sufficient to form a belief as to the truth of material averment, he shall so
a denial through a statement that the defendant is without knowledge or state and this shall have the effect of a denial
information sufficient to form a belief as to the truth of the material Just as the explicit denials of an answer should be either general or
averment in the complaint. However, such a general, self-serving claim specific, so all denials of knowledge or information sufficient to form a
of ignorance of the facts was insufficient to raise an issue. R Marcoses belief should refer either generally to all the averments of the complain"
should have positively stated how it was that they were supposedly thus intended to be denied, or specifically to such as are to be denied by
that particular form of plea. The would be so definite and certain in its
ignorant of the facts alleged. allegation that the pleaders' adversary should not be left in doubt as to
Evidently, this particular denial had the earmark of what is what is admitted, what is denied, and what is covered by denials of
called in the law on pleadings as a negative pregnant, that is, a denial knowledge or information sufficient to form a belief. Under this form of
pregnant with the admission of the substantial facts in the pleading denial employed by the defendant, it would be difficult, if not impossible
responded to which are not squarely denied. A negative pregnant is a to convict him of perjury if it should transpire that some of his denials of
 knowledge, etc., were false, for he could meet the charge by saying that
his denials referred only to matters of which he had in fact no knowledge
or information
 In the case at bar, A copy of the mortgaged deed was attached and
made a part of the complaint. There are also allegations of partial
payments, defaults in the payment of outstanding balance, and a
covenant to pay interest and attorney's fees. It is hard to believe that the
appellants could not have had knowledge or information as to the truth
or falsity of any of said allegations

As a copy of the deed of mortgage formed part of the complaint, it was
easy for and within the power of the appellants, for instance, to
determine and so specifically allege in their answer whether or not they
had executed the alleged mortgage

An unexplained denial of information and belief of a matter of records,
the means of information concerning which are within the control of the
pleader, on are readily accessible to him, is evasive and is insufficient to
constitute an effective denial
 The form of denial adopted by the appellants, although allowed by the
Rules of Court, must be availed of with sincerity and in good faith,—
certainly neither for the purpose of confusing the adverse party as to
what allegations of the complaint are really put in issue nor for, the
purpose of delay

the appellants obviously did not have any defense or wanted to delay
the proceedings
 This rule, specifically authorizing an answer that defendant has no knowledge or information sufficient to
form a belief his to the truth of an averment and giving such answer is not the effect of a denial, does not apply where the
fact as to which want of knowledge is asserted is to the knowledge of the court as plainly and necessarily within the
defendants knowledge that his averment of ignorance must be palpably untrue
 Modes of Specific Denial
Gaza vs. Lim (2003)
Facts:
Gaza purchased a parcel of land in Quezon from Vda de
Urrutia. RD Lucena cancelled the latters title and issued a TCT in favor
of Gaza. The Gazas engaged in lumber and copra business, they
constructed implements on the property. They eventually ceased in the
business, the property was left to the care of Ernesto and eventually
Petil and was padlocked. The Lims are the half-siblings of Gaza, they
claimed they used the same property for their lumber and copra
business, they presented a Lumber Cert of Reg and Mayor’s permit. In
1993 the padlock was destroyed, according to Gaza, his half-siblings
broke the lock of the main gate without the consent of Petil, the care
taker, entered the property and occupied the second floor of the
warehouse and. The Gazas then forcibly opened the 2 nd floor and
occupied it. The Lims filed with the MTC an action for forcible entry
against the Gazas. The Gazas then answered with compulsory
counterclaim, the CCC was dismissed but the decision was for the
Gazas. On appeal, the RTC modified the MTC decision by removing
moral and exemplary damages. The CA reversed the MTC and RTC
decision. The Gazas filed MR but was denied.
Issues:
13. Whether or not the CA erred that there was no implied admission on the
part of the petitioners, of prior and actual possession?
14. Whether or not the CA erred in resolving the issue of implied admission,
not being one of the issues settled in the pre-trial?
Held: YES.
Section 11, Rule 8 of the 1997 Rules of Civil Procedure, as
amended, provides that material averments in the complaint, other than
those as to the amount of unliquidated damages, shall be deemed
admitted when not specifically denied. Section 1019 of the same Rule
provides the manner in which specific denial must be made:
Three (3) modes of specific denial are contemplated by the above
provisions, namely:
(1) by specifying each material allegation of the fact in the complaint, the
truth of which the defendant does not admit, and whenever practicable,
setting forth the substance of the matters which he will rely upon to
support his denial;
(2) by specifying so much of an averment in the complaint as is true and
material and denying only the remainder;
(3) by stating that the defendant is without knowledge or information
sufficient to form a belief as to the truth of a material averment in the
complaint, which has the effect of a denial
The Court of Appeals held that spouses Gaza, petitioners, failed to
deny specifically, in their answer, paragraphs 2, 3 and 5 of the complaint
for forcible entry.
The Court of Appeals then concluded that since petitioners did not
deny specifically in their answer the allegations in the complaint, they
judicially admitted that Ramon and Agnes Lim, respondents, “were in
prior physical possession of the subject property, and the action for
forcible entry which they filed against private respondents (spouses
Gaza) must be decided in their favor. The defense of private
19
"Section 10. Specific Denial. – A defendant must specify each
material allegation of fact the truth of which he does not admit and, whenever
practicable, shall set forth the substance of the matters upon which he relies to
support his denial. Where a defendant desires to deny only a part of an averment,
he shall specify so much of it as is true and material and shall deny only the
remainder. Where a defendant is without knowledge or information sufficient to
form a belief as to the truth of a material averment made in the complaint, he
shall so state, and this shall have the effect of a denial."
respondents that they are the registered owners of the subject property
is unavailing.”
We observe that the Court of Appeals failed to consider paragraph
2 of petitioners’ answer quoted as follows:
"2. That defendants specifically deny the allegations in paragraph 2 and
3 of the complaint for want of knowledge or information sufficient to form
a belief as to the truth thereof, the truth of the matter being those
alleged in the special and affirmative defenses of the defendants;"
Clearly, petitioners specifically denied the allegations contained in
paragraphs 2 and 3 of the complaint that respondents have prior and
continuous possession of the disputed property which they used for their
lumber and copra business. Petitioners did not merely allege they have
no knowledge or information sufficient to form a belief as to truth of
those allegations in the complaint, but added Special and Affirmative
defenses.
"From the allegations of plaintiffs, it appears that their possession of the
subject property was not supported by any concrete title or right,
nowhere in the complaint that they alleged either as an owner or lessee,
hence, the alleged possession of plaintiffs is questionable from all
aspects. Defendants Sps. Napoleon Gaza and Evelyn Gaza being the
registered owner of the subject property has all the right to enjoy the
same, to use it, as an owner and in support thereof, a copy of the
transfer certificate of title No. T-47263 is hereto attached and marked as
Annex "A- Gaza" and a copy of the Declaration of Real Property is
likewise attached and marked as Annex "B- Gaza" to form an integral
part hereof;
"6. That considering that the above-entitled case is an ejectment case,
and considering further that the complaint did not state or there is no
showing that the matter was referred to a Lupon for conciliation under
the provisions of P.D. No. 1508, the Revised Rule on Summary
Procedure of 1991, particularly Section 18 thereof provides that such a
failure is jurisdictional, hence, subject to dismissal;
"7. That the Honorable Court has no jurisdiction over the subject of the
action or suit;
"The complaint is for forcible entry and the plaintiffs were praying for
indemnification in the sum of P350,000.00 for those copra, lumber,
tools, and machinery listed in par. 4 of the complaint and P100,000.00
for unrealized income in the use of the establishment, considering the
foregoing amounts not to be rentals, Section 1 A (1) and (2) of the
Revised Rule on Summary Procedure prohibits recovery of the same,
hence, the Honorable Court can not acquire jurisdiction over the
same. Besides, the defendants Napoleon Gaza and Evelyn Gaza being
the owners of those properties cited in par. 4 of the complaint except for
those copra and two (2) live carabaos outside of the subject premises,
plaintiffs have no rights whatsoever in claiming damages that it may
suffer, as and by way of proof of ownership of said properties cited in
paragraph 4 of the complaint attached herewith are bunched of
documents to form an integral part hereof;
The above-quoted paragraph 2 and Special and Affirmative
Defenses contained in petitioners’ answer glaringly show that petitioners
did not admit impliedly that respondents have been in prior and actual
physical possession of the property. Actually, petitioners are repudiating
vehemently respondents’ possession, stressing that they (petitioners)
are the registered owners and lawful occupants thereof.
Respondents' reliance on Warner Barnes and Co., Ltd. vs.
Reyes in maintaining that petitioners made an implied admission in their
answer is misplaced. In the cited case, the defendants' answer merely
alleged that they were "without knowledge or information sufficient to
form a belief as to the truth of the material averments of the remainder
of the complaint" and "that they hereby reserve the right to present an
amended answer with special defenses and counterclaim." In the instant
case, petitioners enumerated their special and affirmative defenses in
their answer. They also specified therein each allegation in the
complaint being denied by them. They particularly alleged they are the
registered owners and lawful possessors of the land and denied having
 wrested possession of the premises from the respondents throughc. When the shipment arrived at ABB Koppel, it was discovered that only
force, intimidation, threat, strategy and stealth. They asserted that 65 out of 120 pcs of motors were actually delivered and the remaining
respondents' purported possession is "questionable from all could not be accounted for
aspects." They also averred that they own all the personal properties16. The shipment was purportedly insured with Malayan. Petitioner Malayan
enumerated in respondents' complaint, except the two paid ABB Koppel the amount insured and was then subrogated to the
carabaos. Indeed, nowhere in the answer can we discern an implied rights of ABB Koppel against Regis and Paircargo;
admission of the allegations of the complaint, specifically the allegation17. Petitioner Malayan filed a complaint for damages against respondents in
that petitioners have priority of possession. MeTC presenting the Marine Risk Note as proof of insurance on the
Thus, the Court of Appeals erred in declaring that herein petitioners impliedly admitted respondents' allegation that
cargo
they have prior and continuous possession of the property.
18. MeTC ruled that only Regis (respondent) is liable; RTC affirmed MeTC
Casent Realty vs Philbanking but the CA vacated RTC’s judgment
Casent Realty executed 2 promisory notes in favor of Rare Realty (Ona. CA ruled that the Marine Risk Note presented as proof of the insurance
the 2 loans, initially hundreds of thousands pero by the time this case policy was invalid. It also pointed the fact that the Marine Risk Note was
happened, millions na coz of interest). However, Rare assigned the procured after the occurrence of the loss (which is not allowed in
rights to the PNs in favor of Philbanking. Philbanking and Casent on the Insurance Law)
other hand went into a Dacion agreement to erase all indebtedness of Issue: Whether the Marine Risk Note is sufficient? – NO
Casent to Philbanking by conveying all their rights to Iloilo City Ruling:
properties. Philbanking is now collecting on the 2 PNs from Rare.19. Since no insurance policy was presented by petitioner, there is no basis
Casent is contesting that there is no more indebtedness by virtue of the for this court to admit or consider the same.
Dacion agreement and the fact that Philbanking even confirmed such20. Since the Marine Insurance Policy was never presented, there is no
agreement. They felt so strongly about their case that they file for legal basis to consider it in the resolution of the case
Demurer of evidence, which Philbanking didn’t answer to. RTC ruled in21. It is important to note that the Marine Risk note is merely supplementary
favor of Casent. CA overturned stating that the PNs were not part of
to the contract of insurance. The insurance policy should have been
Casent’s debts to the bank but to Rare.
attached to the complaint
Issue: Does respondent's failure to file a Reply and deny the Dacion
22. Section 7, Rule 9 is mandatory! Since petitioner alluded to an
and Confirmation Statement under oath constitute a judicial admission
actionable document, the contract of insurance should have
of the genuineness and due execution of these documents?
been attached to the complaint;
Held: SC ruled partly in favor of Casent, but Philbanking was awarded
23. If a legal claim is irrefragably sourced from an actionable document, the defendants cannot be
the judgment for their claim of money against Casent. (The 2 PNs deprived of the right to examine or utilize said document in order to intelligently raise a defense. The inability or
already matured while still with Rare, long before they assigned them to refusal of the plaintiff to submit such document into evidence constitutes an effective denial of that right of the
Philbanking as security for Rare’s own loans, clearly the PNs are defendant which is ultimately rooted in due process of law.
Casent’s debt to Rare, not the Bank).
“Genuineness merely refers to the fact that the signatures were not
SANTOS, JR. vs PNOC EXPLORATION CORPORATION
falsified and/or whether there was no substantial alteration to the
document. While due execution refers to whether the document was
Topic: no default motu proprio
signed by one with authority.”
Rule 8, Section 8 of the Rules of Court:
FACTS:
Section 8. How to contest such documents. — When an action
or defense is founded upon a written instrument, copied in or attached
PNOC filed a complainr for sum of money against petitioner Pedro
to the corresponding pleading as provided in the preceding section, the
Santos for the unpaid balance of the car loan advanced to him by
genuineness and due execution of the instrument shall be deemed
respondent when he was still a member of its board of directors.
admitted unless the adverse party, under oath, specifically denies them,
Personal service of summons to petitioner failed because he could not
and sets forth, what he claims to be the facts; but the requirement of an
be located in his last known address and the trial court allowed service
oath does not apply when the adverse party does not appear to be a
of summons by publication. Santos failed to file an answer so
party to the instrument or when compliance with an order for an
respondent moved of reception of evidence ex parte and the case was
inspection of the original instrument is refused.
deemed submitted for decision. Santos filed an omnibus MR on the
Since respondent failed to file a Reply, in effect, respondent admitted
ground that the affidavit of service by respondent failed to comply with
the genuineness and due execution of said documents.
the rules as it was not executed by the clerk of court and that he was
On that point Casent is correct, Philbanking DID NOT disprove the
denied due process when he was not notified. Trial court denied MR.
Genuineness and Due execution of the Dacion. that but that is not the
RTC and CA rendered judgment ordering Santos to pay the amount to
real issue, the issue is money and the real fact is that whether the PNs
PNOC
were part of the Dacion in the first place.
Admission of the genuineness and due execution of the Dacion and Confirmation Statement does not prevent the

introduction of evidence showing that the Dacion excludes the promissory notes. ISSUE: was the declaration of Santos in default valid? NO

Malayan Insurance v. Regis Brokerage

RATIO:
Facts:
15. Order of delivery: Since petitioner cannot be served summons personally, summons by
a. Fasco  Paircargo  Regis  ABB Koppel (consignee) publication was resorted to and it was sufficient for the court to obtain
b. Fasco loaded 120 pcs of motors on board China Airlines to deliver the jurisdiction, also he appeared in court. As to the distinction of in
cargo to ABB Koppel; When the cargo arrived at NAIA, it was personam and in rem for summons by publication, the present rule
discharged and forwarded to Paircargo for temporary storage; Regis states that it can be had in any action when the defendant cannot be
withdrew the cargo and delivered the same to ABB Koppel at its found, regardless of whether it is in rem, in personam or quasi in rem.
warehouse. The rules do not require the affidavit of complementary service to be
executed by the clerk of court.
As to DEFAULT
If the defendant fails to file his answer on time, he may be declared in
default upon motion of the plaintiff with notice to the said defendant. In
case he is declared in default, the court shall proceed to render
judgment granting the plaintiff such relief as his pleading may warrant,
unless the court in its discretion requires the plaintiff to submit evidence.
The defaulting defendant may not take part in the trial but shall be
entitled to notice of subsequent proceedings.
In this case, even petitioner himself does not dispute that he failed to file
his answer on time. That was in fact why he had to file an "Omnibus
Motion for Reconsideration and to Admit Attached Answer." But
respondent moved only for the ex partepresentation of evidence, not for
the declaration of petitioner in default.
As is readily apparent, the September 11, 2003 order did not limit itself
to permitting respondent to present its evidence ex parte but in effect
issued an order of default. But the trial court could not validly do that as
an order of default can be made only upon motion of the claiming
party. Since no motion to declare petitioner in default was filed, no
default order should have been issued. Hence, even if petitioner was not
validly declared in default, he could not reasonably demand that copies
of orders and processes be furnished him. Be that as it may, a copy of
the September 11, 2003 order was nonetheless still mailed to petitioner
at his last known address but it was unclaimed.
Monzon v. Sps. Relova, G.R. No. 171827, 17 September 2008.
The RTC, citing the absence of petitioner and her counsel on set
hearing date despite due notice, granted an oral Motion by the
respondents to present evidence ex parte. Thereafter, the RTC rendered
a decision in favor of respondents. The decision mentioned that the
order allowing the ex parte presentation of evidence was due to the
continuous and incessant absences of petitioner and counsel.
Petitioner appealed based on an alleged violation of due process by the
RTC not giving her a chance to present evidence and rendering its
decision immediately after respondents presented their evidence ex
parte. The CA denied the appeal ruling that petitioner has already been
given ample opportunity to present evidence. Petitioner also claims that
she never waived her right to present evidence.
Despite the face that petitioner was declared in default, the RTC
nevertheless applied the effects of default under Sec. 3, Rule 9.
ISSUE: Was petitioner in “default”?
RULING: No, case remanded to the trial court for reception of
evidence.
According to Justice Regalado, the effects of default are followed only in
three instances: (1) when there is actual default for failure to file a
responsive pleading, (2) failure to appear in a pre-trail conference, and
(3) refusal to comply with modes of discovery under the circumstances
in Sec. 3(c), Rule 29.
In PNB v. de Leon, the Court declared that orders of default have the
effect of denying a litigant a chance to be heard, increasing needless
litigation in the appellate court. “While there are instances when a party
may be properly defaulted, these should be the exception rather
than the rule, and should be allowed only in clear cases of
obstinate refusal or inordinate neglect to comply with the orders
of the court.”
It is even worse when the court issues an order not denominated as an
order of default, but provides for the application of effects of default.
Such amounts to the circumvention of the rigid requirements of a default
order, to wit: (1) the court must have validly acquired jurisdiction over
the person of the defendant; (2) the defendant failed to timely file his
answer; and (3) there must be a motion to declare the defendant in
default with notice to the latter.
Petitioner had not failed to file her answer. Neither was notice sent to
petitioner that she would be defaulted, or that the effects of default shall
be imposed upon her. “Mere non-appearance of defendants at an
ordinary hearing and to adduce evidence does not constitute default,
when they have already filed their answer to the complaint within the
reglementary period. It is error to default a defendant after the answer
had already been filed. The policy of the law is to have every litigant’s
case tried on the merits as much as possible; it is for this reason that
judgments by default are frowned upon.”
This does not mean that defendants can get away with failing to attend
hearings despite due notice. Failure to attend, when committed during
hearing dates for the presentation of the complainant’s evidence, would
amount to the waiver of such defendant’s right to object to the evidence
presented during such hearing, and to cross-examine the witnesses
presented therein. However, it would not amount to a waiver of the
defendant’s right to present evidence during the trial dates scheduled for
the reception of evidence for the defense. It would be an entirely
different issue if the failure to attend of the defendant was on a hearing
date set for the presentation of the evidence of the defense, which did
not occur in this case.
Gomez v Montalban (G.R. No. 174414)
When a party has another remedy available to him, which may be either
a motion for new trial or appeal from an adverse decision of the trial
court, and he was not prevented by fraud, accident, mistake or
excusable negligence from filing such motion or taking such appeal, he
cannot avail himself of this petition.
Facts:
Lita Montalban obtained a loan from Elmer Gomez in the amount of
P40,000 with a voluntary proposal on her part to pay 15% interest per
month. Montalban failed to comply with her obligation so Gomez filed a
complaint in the RTC for sum of money. Summons was served but
despite her receipt, she still failed to file an Answer. She was declared in
default and upon motion, Gomez was allowed to present evidence ex
parte. The RTC rendered a decision ordering Montalban to pay Gomez.
Thereafter, respondent filed a Petition for Relief from Judgment alleging
that there was no proper service of summons since there was no
personal service. She alleged that one Mrs. Alicia Dela Torre was not
authorized to receive summons and that her failure to file an Answer
was due to fraud, accident, mistake, excusable negligence (FAME). The
Petition was set for hearing but counsel for respondent failed to appear
before the court hence the dismissal of the Petition.
Montalban filed for a Motion for Reconsideration of the dismissal of the
Petition stating that counsel’s failure to appeal was unintentional to
which the RTC granted. To this instance, Gomez filed a Petition for
Reconsideration.
Issue:
Whether or not the granting of Petition for Relief from Judgment by the
RTC is proper.
Held:
NO. The RTC committed an error in doing so. A Petition for Relief under
Rule 38 is only available against a final and executory judgment and the
grounds include fraud, accident, mistake or excusable negligence.
Discussion on Grounds:
"Mistake" refers to mistake of fact, not of law, which relates to the case.
The word "mistake," which grants relief from judgment, does not apply
and was never intended to apply to a judicial error which the court might
have committed in the trial. Such errors may be corrected by means of
an appeal. This does not exist in the case at bar, because respondent
has in no wise been prevented from interposing an appeal.

"Fraud," on the other hand, must be extrinsic or collateral, that is, the
kind which prevented the aggrieved party from having a trial or
presenting his case to the court,or was used to procure the judgment
without fair submission of the controversy. This is not present in the
case at hand as respondent was not prevented from securing a fair trial
and was given the opportunity to present her case.
Negligence to be excusable must be one which ordinary diligence and
prudence could not have guarded against. Under Section 1 Rule 38, the
"negligence" must be excusable and generally imputable to the party
because if it is imputable to the counsel, it is binding on the client. To
follow a contrary rule and allow a party to disown his counsel's conduct
would render proceedings indefinite, tentative, and subject to reopening
by the mere subterfuge of replacing counsel. What the aggrieved litigant
should do is seek administrative sanctions against the erring counsel
and not ask for the reversal of the court's ruling.
In Tuason v CA, the court explained the nature of a Petition for Relief
from Judgment:
“A petition for relief from judgment is an equitable remedy that is allowed
only in exceptional cases where there is no other available or adequate
remedy. When a party has another remedy available to him, which may
be either a motion for new trial or appeal from an adverse decision of
the trial court, and he was not prevented by fraud, accident, mistake or
excusable negligence from filing such motion or taking such appeal, he
cannot avail himself of this petition. Indeed, relief will not be granted to a
party who seeks avoidance from the effects of the judgment when the
loss of the remedy at law was due to his own negligence; otherwise the
petition for relief can be used to revive the right to appeal which had
been lost thru inexcusable negligence.”
In the case, Montalban contended that judgment was entered against
her through mistake or fraud because she was not duly served
summons. However, under the discussion of the following grounds, the
SC sees no merit in her petition.
*Petition for Relief from Judgment is set aside.
G.R. No. 151098 March 21, 2006
ERLINDA GAJUDO, FERNANDO GAJUDO, JR., ESTELITA
GAJUDO, BALTAZAR GAJUDO and DANILO ARAHAN CHUA,
Petitioners,  The complaint was still denominated as one for Injunction with prayer for
vs.
1
TRADERS ROYAL BANK, Respondent.
F: The case is a Complaint for Annulment of Real Estate
Mortgage filed by the P’s against the R Bank.
P Chua obtained a loan from the R secured by a real estate
mortgage. P Chua failed to pay, hence extra-judicial foreclosure and
auction sale ensued. After the auction sale, P Chua offered to buy back
the property and R agreed to sell it back. However, the R suddenly
changed its position, increasing the payment of P to the current market
value of the foreclosed property. Hence the aforementioned complaint
was filed.
During trial, a conflagration hit the Quezon City Hall and
destroyed the records of the case. The P’s refiled the complaint. R failed
to answer. P’s filed a Motion to Declare R in Default for failing to file an
answer despite being served with Summons. Upon proof that summons
was indeed served, the RTC issued an Order of Default against R and
allowed presentation of evidence ex parte. R filed a Motion to Set Aside
the Order of Default and averred that the failure to file its Answer was
due to a mistake of the typist and inadvertence of counsel. RTC denied
the motion. CA ruled that the Order of Default was proper. Hence this
appeal.
I: WN the quantum of proof in default judgment is different that
that required in civil cases (i.e. preponderance of evidence).
H/R: NO, default judgment still requires presentation of evidence
amounting to a preponderance of evidence.
Petitioners argue that the quantum of evidence for judgments
flowing from a default order under Section 3 of Rule 9 is not the same
as that provided for in Section 1 of Rule 133 (preponderance of
evidence).
Favorable relief can be granted only after the court has
ascertained that the relief is warranted by the evidence offered and the
facts proven by the presenting party. It would be meaningless to require
presentation of evidence if every time the other party is declared in
default, a decision would automatically be rendered in favor of the non-
defaulting party and exactly according to the tenor of his prayer. This is
not contemplated by the Rules nor is it sanctioned by the due process
clause. (Pascua v. Florendo)
The court is not supposed to admit that which is basically
incompetent. Although the defendant would not be in a position to
object, justice requires that only legal evidence should be considered
against him. If the evidence presented should not be sufficient to justify
a judgment for the plaintiff, the complaint must be dismissed. And if an
unfavorable judgment should be justifiable, it cannot exceed in amount
or be different in kind from what is prayed for in the complaint. (Lim
Tanhu v. Ramolete)
Any advantage they may have gained from the ex parte presentation of evidence does not lower
the degree of proof required.
[G.R. No. 158401, January 28, 2008]
PHILIPPINE PORTS AUTHORITY, Petitioner, vs. WILLIAM
GOTHONG & ABOITIZ (WG&A), INC., Respondent
FACTS:
WG&A for brevity is a duly organized domestic corporation engaged in
the shipping industry
PPA, on the other hand, is a government-owned and controlled
company created to operate and administer the country's sea port and
port facilities.
WG&A and PPA entered into a lease contract wherein WG&A leased the
Marine Slip Way of PPA until such time that PPA turns over its
operations to the winning bidder for the North Harbor Modernization
Project
PPA allegedly terminated the contract prior to the expiration period
which prompted WG&A to file on November 28, 2001, an Injunction suit
before the RTC. It likewise prayed for the issuance of a temporary
restraining order to arrest the evacuation. In its complaint, it also sought
recovery of damages for breach of contract and attorney's fees.
On December 11, 2001, WG&A amended its complaint for the first time
TRO. In the said amended pleading, the petitioner 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. It likewise included, as its third cause of
action, the additional relief in its prayer, that should the petitioner be
forced to vacate the said facility, it should be deemed as entitled to be
refunded of the value of the improvements it introduced in the leased
property
Following the first amendment in the WG&A's complaint, PPA submitted
its answer on January 23, 2002
Meanwhile, the TRO was denied by the trial court by way of an order
dated January 16, 2002
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.
Also, it included as its fourth cause of action and additional relief in its
prayer, the reformation of the contract as it failed to express or embody
the true intent of the contracting parties
PPA opposed the amendment on the ground that the reformation sought
for by the petitioner constituted substantial amendment, which if
granted, will substantially alter the latter's cause of action and theory of
the case
  RTC denied the Admission of the Second Amended Complaint
 RTC applied the old Section 3, Rule 10 of the Rules of Court instead of
the the 1997 Rules of Civil Procedure, amending Section 3, Rule 10
OLD SECTION 3, RULE 10:
Section 3. Amendments by leave of court. – After the case is set for
hearing, substantial amendments may be made only upon leave of
court. But such leave may be refused if it appears to the court that
the motion was made with intent to delay the action or that the cause of
action or defense is substantially altered. Orders of the court upon the
matters provided in this section shall be made upon motion filed in court,
and after notice to the adverse party, and an opportunity to be heard
NEW SECTION 3, RULE 10:
SECTION 3. Amendments by leave of court. Except as provided in the
next preceding section, substantial amendments may be made only
upon leave of court. But such leave may be refused if it appears to the
court that the motion was made with intent to delay. Orders of the court
upon the matters provided in this section shall be made upon motion
filed in court, and after notice to the adverse party, and an opportunity to
be heard
 On appeal, CA directed the RTC to admit respondent's second
amended complaint pursuant to Section 3, Rule 10 of the 1997 Rules of
Civil Procedure
ISSUE: whether or not the second amended complaint should be admitted
HELD: YES
 RTC erred in applying the old Sec. 3 , Rule 10 instead of the provisions
of the 1997 Rules of Civil Procedure
 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
 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
When Amendments Allowed
Quirao vs. Quirao (2003)
Facts:
Respondents filed a complaint for recovery of possession,
ownership and damages against the petitioners. The respondents claim
that the owner of the subject property, sugarland was owned by the late
Leopoldo Quirao, the respondents are his widow and son.
In their answer, the petitioners claim that the sugarland was
owned by their grandfather, Segundo Clarito. AFTER filing their answer,
petitioners filed a motion to dismiss, citing an Extra-judicial partition with
sale of the subject property executed by respondents in favor of a
certain De Juan. So they argue that since the respondents are no longer
owners, they have no standing to file the complaint.
The case underwent pre-trial, trial ensued and respondents
rested their case. Petitioners then filed a “Motion for leave of court to
admit attached amended answer”, they sought to add an alternative
defense that even if respondents were owners of the property by
inheritance, the respondents executed a deed of extra-judicial partition
of property in favor of De Juan. WHEREIN DE JUAN sold part of the
property to them (petitioners), evidenced by a deed of sale and a receipt
of partial payment.
Issue: Whether or not an amended answer is still allowed even after
pre-trial conference, after the respondents rested their case?
Held: YES.
In the case at bar, petitioners filed their motion for leave of court to
admit amended answer only after respondents have rested their case.
Petitioners argue that the error was due to the oversight of the three
previous counsels. Petitioners’ fourth counsel also claims that he
learned of the alternative defense late as his clients (petitioners herein)
did not inform him of the Deed of Sale. Allegedly, they relied on the
advice of their previous counsels that the said deed of sale “was a mere
scrap of paper because it was not signed by Carlito de
Juan.” Respondents contend that petitioners’ motion is too late in the
day.
Petitioners’ motion for admission of amended answer may be a
little tardy but this by itself is not a cause for its denial. Their amended
answer alleges that respondents no longer own the subject property
having sold the same to de Juan who, in turn, sold the property to
petitioners. These allegations, if correct, are vital to the disposition of the
case at bar. The interest of justice and equity demand that they be
considered to avoid a result that is iniquitous. Truth cannot be barred by
technical rules. For this reason, our ruling case law holds that
amendments to pleadings are generally favored and should be liberally
allowed in furtherance of justice so that every case may so far as
possible be determined on its real facts and in order to prevent
the circuity of action.
Bautista vs. Maya-Maya Cottages
Allowed Amendments
Sps Bautista claimed to be the owner of a property in Nasugbu,
Batangas by virtue of an OCT. Maya-maya cottages filed for the
cancellation of the cancellation of the title, alleging “without any color of
right and through dubious means.” Sps filed a motion to dismiss stating
that maya-maya has no cause of action, and that as a private
corporation, cannot own real property. The RTC granted the MTD.
Maya-maya then filed an MR and motion for leave to file amended
complaint for quieting of title. The RTC approved, thus reversing the first
MTD. The CA affirmed.
Issue: Is Maya-maya already prohibited from filing an amendment?
Held: (Indeed, they can.)
Section 2, Rule 10 of the 1997 Rules of Civil Procedure, as amended,
provides:
“SEC. 2. Amendments as a matter of right. – A party may amend his
pleading once as a matter of right at any time before a responsive
pleading is served or, in the case of a reply, at any time within ten (10)
days after it is served.”
The above provision clearly shows that before the filing of any
responsive pleading, a party has the absolute right to amend his
pleading, regardless of whether a new cause of action or change in
theory is introduced. It is settled that a motion to dismiss is not the
responsive pleading contemplated by the Rule. Records show that
petitioners had not yet filed a responsive pleading to the original
complaint. What they filed was a motion to dismiss. It follows that
respondent, as a plaintiff, may file an amended complaint even after the
original complaint was ordered dismissed, provided that the order of
dismissal is not yet final, as in this case.
CAGUNGUN vs PLANTERS DEVELOPMENT BANK
Topic: Conform to evidence
FACTS:
The Cagungun spouses filed suit with RTC against Country
Development Bank. Vicente Cagungun died and was substituted by his
children as plaintiff while Country entered into merger whose name has
been changed to Planters Development Bank. Country had opened an
extension office in Olongapo and among their first customers were the
Cagungun spouses who had diverse business interests in the locality
and they opened some accounts. The Cagungun spouses claimed and
testified that the exigencies of their business required them to deposit
daily so they entrusted and left with the bank the savings pass books.
The Cagungun spouses received a letter from Country telling them that
their loan was past due and that payment was being demanded. This
prompted them to investigate and despite difficulties, because they had
connections, they were able to access and pry information and found
that there were invalid withdrawals which were unauthorized, made or
received by depositors with forged signatures of Vicente Cagungun. The
lower court ruled that the withdrawals were not made by petitioners and
the signatures of Cagungun appearing therein were falsified as
confirmed by an NBI handwriting expert. The court also considered
petitioners to have paid their mortgage loan in view of the instructions to
apply funds adequate for the purpose. For not applying the savings of
petitioners in the savings account as payment to their loan thereby
causing the threatened foreclosure of the real estate mortgage over
their house and lot, and for allowing the unauthorized withdrawals
through the falsified deposit slips, the lower court held respondent liable
to pay for moral damages. Exemplary damages were also awarded for
the refusal to give access to bank records. Attorney’s fees were also
awarded.
The CA agreed that the money withdrawn were without the knowledge
and authority of petitioners but however held that petitioners are not free
from the obligation to pay the loan for though the same was not paid for
failure to comply with the instructions of petitioners, it remained an
unpaid obligation. It removed the award of exemplary and moral
damages.
RULING:
The award for moral and exemplary damages is proper. As to
the more pertinent parts of the ruling related to the topic, Petitioners
claim that the CA erred in deleting the portions of the RTC decision
declaring their mortgage loan paid and enjoining foreclosure. They insist
that they were able to prove that certain amounts were withdrawn from
their account and they were not applied to pay the loan and that the
amounts were sufficient to pay their loan and the real estate mortgage
would have been discharged.
Looking at the complaint filed by petitioners, there is no allegation that
said amounts were withdrawn from their accounts and that same were
not applied as payments for their loan. Petitioners likewise did not ask
in their prayer that said amounts be returned to them or that they be
used to off-set their indebtedness to respondent. Moreover, when
petitioners tried to prove this allegation, counsel for respondent objected
and attempted to have the testimony thereon stricken off the record.
Under Section 5, Rule 10 of the Revised Rules of Court, if
evidence is objected to at the trial on the ground that it is not within the
issues made by the pleadings, the Court may allow the pleadings to be
amended freely when the presentation of the merits of the action will be
subserved thereby and the admission of such evidence would not
prejudice the objecting party in maintaining his action or defense upon
the merit. Said section reads:
Sec. 5. Amendment to conform to or authorize presentation of
evidence. – When issues not raised by the pleadings are tried by
express or implied consent of the parties, they shall be treated in all
respects, as if they had been raised in the pleadings. Such amendment
of the pleadings as may be necessary to cause them to conform to the
evidence and to raise these issues may be made upon motion of any
party at any time, even after judgment but failure to amend does not
affect the result of the trial of these issues. If evidence is objected to at
the trial on the ground that it is not within the issues made by the
pleadings, the court may allow the pleadings to be amended and shall
do so freely when presentation of the merits of the action will be
subserved thereby and the objecting party fails to satisfy the court that
the admission of such evidence would prejudice him in maintaining his
action or defense upon the merits. The court may grant a continuance
to enable the objecting party to meet such evidence.
It is thus clear that when there is an objection on the evidence
presented because it is not within the issues made by the pleadings, an
amendment must be made before accepting such evidence. If no
amendment is made, the evidence objected to can’t be considered. In
the case before us, the trial court, there being an objection on the
evidence being presented by respondent, failed to order the amendment
of the complaint. Thus, we are constrained not to consider evidence
regarding the amounts allegedly withdrawn from their accounts. With
this ruling, it follows that the outstanding loan of petitioners in the
remains unpaid.
As regards respondent’s right to exercise its right to foreclosure of
the real estate mortgage on petitioners’ property, we rule that
respondent cannot exercise such right under the circumstances
obtaining. It will be the height of inequity if we allow such a thing.
DO-ALL METAL INDUSTRIES, ET AL v. SECURITY BANK (2011)
The Lim family, thru Do-All Metal Industries, owed money from
Security Bank. Since they were unable to pay their indebtedness, they
assigned their property in Pasig City to the Bank as payment
thereof. Thereafter, the Bank agreed to lease the property to
the Lims, indicating that should the bank opt to sell the property, the
Lims, thru DMI, shall be given the right of first refusal.
Eventually, the Bank decided to sell the property, offering it
first to the Lims. However, no agreement regarding the purchase price
was reached by the parties. Because of this, the Bank posted
security guards around the area and prevented the Lims
from entering the property.
Alleging that they suffered damages due to the Bank’s
malicious conduct, the Lims sued the Bank for damages. They also
asked for an injunction against the Bank to allow them to enter the
premises. Upon checking the premises however, they
discovered that some of their personal properties are missing.
They thus filed a supplemental complaint against the Bank alleging an
additional P27M.
Issue:
W/N damages may be awarded based on the a
l l e g a t i o n s i n a s u p p l e m e n t a l complaint without prior payment
of docket fees?
SC = NO.
After-judgment lien, which implies that payment depends on a
successful execution of the judgment, applies to cases where the filing
fees were incorrectly assessed or paid or where the court has discretion
to fix the amount of the award. None of these circumstances obtain in
this case.
On the contrary, the Lims specified an actual amount from the
very beginning. And despite the issue having been raised in the Bank’s
Motion for Reconsideration before the RTC, they still did not pay
the corresponding docket fee. They merely said that they did not yet pay
the fees because the RTC had not assessed them for it.
A supplemental complaint is like any complaint and the
rule is that the filing fees d u e o n a c o m p l a i n t n e e d t o b e
p a i d u p o n i t s f i l i n g . Th e r u l e s d o n o t r e q u i r e t h e court to
make special assessments in cases of supplemental complaints.
Consequently, the trial court should have treated their
Supplemental Complaint as not filed.
Alarilla vs Ocampo
FACTS
The petitioners assert that the real estate mortgage executed by
the Spouses De Guzman on March 9, 1993 is null and void for failure to
secure the conformity of the beneficiaries of the family home as required
by Article 158 of the Family Code of the Philippines. Although the
respondents are entitled to a writ of possession under Section 7 of Act
No. 3135, the said provision has been repealed by the Family Code of
the Philippines, as provided for in Article 211 thereof. The petitioners
also contend that the petitioners cannot be ousted from the property
without the respondents filing an ordinary action for the recovery of
possession of the same, to give the mortgagors an opportunity to be
heard not only on the issue of possession of the property but also on the
obligations of the mortgagors under the real estate mortgage.
For its part, the CA noted that:
After expiration of the redemption period without redemption being
made, the writ must issue in order to place the buyer in possession of
the foreclosed property (Veloso, et al. vs. Intermediate Appellate Court,
supra). The right to such possession is absolute; it may be obtained
thru a writ which may be applied for ex-parte pursuant to Sec. 7 of Act
No. 3135, as amended (Navarra vs. Court of Appeals, 204 SCRA 850).
The subject property was not redeemed within the one-year
period. Being the successful bidder in the foreclosure sale, appellee
had consolidated ownership over the property, for which TCT No.
224439 was issued to him. In IFC Service Leasing and Acceptance
Corp. vs. Nera (19 SCRA 181), the Supreme Court stated that “if under
Section 7 of Act No. 3135, the court has the power, on the ex-parte
application of the purchaser, to issue a writ of possession during the
period of redemption, there is no reason why it should not also have the
same power after the expiration of that period, especially where, as in
this case, a new title has already been issued in the name of the
purchaser.”20[5]
The respondents posit that the decision of the CA had become
final and executory when the petitioners filed their motion for
reconsideration of the decision only on March 20, 2000 or seventeen
(17) days after being served a copy of the said decision. Furthermore,
the CA did not commit any reversible error in its decision on the merits
of the petition.
ISSUES:
(a) whether the petitioners’ motion for reconsideration of the decision of
the CA was filed out of time; and
(b) on its merits, whether the petition should be granted.
HELD:
A. The petitioners’ motion for reconsideration of the CA decision was
filed within the reglementary period therefor.
Section 1, Rule 22 of the Rules of Court, as amended, and as
applied in several cases, provides that where the last day of the period
for doing an act as provided by law falls on a Saturday, a Sunday or a
legal holiday in the place where the court sits, the time should not run
until the next working day. In this case, the petitioners had until March
18, 2000 within which to file their motion for the reconsideration of the
decision of the CA. Since March 18, 2000 was a Saturday, the
petitioners had until March 20, 2000, the next working day thereafter, to
file their motion. The petitioners filed their motion on the said date;
hence, the motion was filed within the reglementary period therefor. 21[6]
B. The petition, however, stands to fail on the merits.
First. The one-year period for the petitioners to redeem the Petitioner maintains that paragraph 12, subparagraphs a to e, of the
mortgaged property had already lapsed. Title to the property had expanded complaint "illustrate the essential acts pertaining to the
already been consolidated under the name of the respondent. As the conspirational acts" between Cruz and former President Marcos.
owner of the property, the respondent is entitled to its possession ISSUES:
as a
22[7]
matter of right. The issuance of a writ of possession over the property
by the court is merely a ministerial function. There is no need for the
respondent to file an action to evict the petitioners from the property and
himself take possession thereof.
Second. Any question regarding the validity of the mortgage or its
foreclosure cannot be a legal ground for refusing the issuance of a writ
of possession. Regardless of whether or not there is a pending action
20
21
22
for the nullification of the sale at public auction, or the foreclosure itself,
or even for the nullification of the real estate mortgage executed by the
petitioners over the property, the respondent as purchaser at public
auction is entitled to a writ of possession without prejudice to the
outcome of the action filed by the petitioners with the Regional Trial
Court of Manila docketed as Civil Case No. 95-75769.23[8]
Third. The writ of possession issued by the trial court must be
enforced without delay. It cannot be stymied or thwarted by the
petitioners by raising issues already raised by them in Civil Case No.
95-75769.
Fourth. The petitioners did not even oppose the petition for a writ
of possession filed by the respondent in the court a quo. Instead, they
filed the complaint for the nullification of the foreclosure proceedings,
the sale at public auction and the nullification of TCT No. T-224439
issued by the Register of Deeds of Manila in the name of the
respondent, with a plea for injunctive relief.
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED.
Costs against the petitioners.
G.R. No. 148154 December 17, 2007
Republic vs. SB and Marcos
FACTS:
The administration of then President Corazon C. Aquino sued former
President Ferdinand E. Marcos and former First Lady Imelda
Romualdez-Marcos, and their alleged cronies or dummies before the
anti-graft court to recover the alleged ill-gotten wealth that they amassed
Roman A. Cruz, Jr. is the alleged crony in this case
In the complaint filed by the PCGG through the Solicitor General, Cruz
allegedly purchased, in connivance with the Marcoses, assets whose
values are disproportionate to their legal income.
summonses on the Marcoses were served at Hawaii but they failed to
answer and were declared in default
order of default was later on set aside on the Marcoses’ motion
Ferdinand Marcos, Sr. Died and was substituted by his son, Ferdinand
Marcos, Jr.
instead of filing an answer, respondent filed a Motion For Bill of
Particulars praying for clearer statements of the allegations which he
called "mere conclusions of law, too vague and general to enable
defendants to intelligently answer
respondent wanted clarification on the specific nature, manner and
extent of participation of his father in the acquisition of the assets cited
above under Cruz; particularly whether former President Marcos was a
beneficial owner of these properties; and the specific manner in which
he acquired such beneficial control
Also, respondent wanted to know the specific nature, manner, time and
extent of support, participation and collaboration of his father in the
alleged transactions with Cruz
The PCGG opposed the motion, arguing that the requested particulars
were evidentiary matters
The anti-graft court granted the motion for bill of particulars
Petitioner insists that respondent impliedly admitted that the complaint
sufficiently averred factual matters with definiteness to enable him to
properly prepare a responsive pleading because he was able to prepare
a draft answer, as stated in his second and third motions for extension
1) what is the effect of the granting of the bill of particulars
2) whether or not the motion for bill of particulars was properly
granted by the anti-graft court
HELD:
 the effect is that the default order against the former president is
deemed lifted
 considering that the pendency of the motion for a bill of particulars
interrupts the period to file a responsive pleading; and considering that
no real injury would result to the interests of petitioner with the granting
of the motion for a bill of particulars, the three motions for extensions of
time to file an answer, and the motion with leave to file a responsive
pleading, the anti-graft court has validly clothed respondent with the
authority to represent his deceased father
23
 While it is true that there was no positive act on the part of the court to
lift the default order because there was no motion nor order to that
effect, the anti-graft court's act of granting respondent the opportunity to
file a responsive pleading meant the lifting of the default order on terms
the court deemed proper in the interest of justice
2) YES
 the allegations against former President Marcos appear obviously
couched in general terms. They do not cite the ultimate facts to show
how the Marcoses acted "in unlawful concert" with Cruz in illegally
amassing assets, property and funds in amounts disproportionate to
Cruz's lawful income, except that the former President Marcos was the
president at the time

The 1991 Virata-Mapa Doctrine42 prescribes a motion for a bill of
particulars, not a motion to dismiss, as the remedy for perceived
ambiguity or vagueness of a complaint for the recovery of ill-gotten
wealth,43 which was similarly worded as the complaint in this case. That
doctrine provided protective precedent in favor of respondent when he
filed his motion for a bill of particulars

While the allegations as to the alleged specific acts of Cruz were clear,
they were vague and unclear as to the acts of the Marcos couple who
were allegedly "in unlawful concert with" the former. There was no
factual allegation in the original and expanded complaints on the
collaboration of or on the kind of support extended by former President
Marcos to Cruz in the commission of the alleged unlawful acts
constituting the alleged plunder. All the allegations against the
Marcoses, aside from being maladroitly laid, were couched in general
terms. The alleged acts, conditions and circumstances that could show
the conspiracy among the defendants were not particularized and
sufficiently set forth by petitioner
 Phrases like "in flagrant breach of public trust and of their fiduciary obligations as public officers
with grave and scandalous abuse of right and power and in brazen violation of the Constitution and laws,"
"unjust enrichment," "embarked upon a systematic plan to accumulate ill-gotten wealth," "arrogated unto himself
all powers of government," are easy and easy to read; they have potential media quotability and they evoke
passion with literary flair, not to mention that it was populist to flaunt those statements in the late 1980s. But
they are just that, accusations by generalization. Motherhood statements they are, although now they might be
a politically incorrect expression and an affront to mothers everywhere, although they best describe the
accusations against the Marcoses in the case at bar
Personal Filing and Service
Maceda vs. Vda. De Macatangay (2006)
Facts:
Petitioner Sonia Maceda and Bonifacio Macatangay were
married, and had one child. They separated and executed a
“Kasunduan” where they agreed to live separately. Macatangay soon
lived with Carmen, they had 3 children. Macatangay passed away, he
was a member of the SSS. His common law wife, Carmen filed a death
benefit application with the SSS Lucena branch, the latter denied her
application stating that Sonia was the primary beneficiary.
Sonia filed a death benefit application. The 3 illegitimate
children likewise filed their separate applications for the death benefit.
Sonias application was granted. Bonifacio’s mother, respondent Vda de
Macatangay filed a petition before the Social Security Commission
(SSC) that she was the designated beneficiary together with the 3 illegit
children. SSS QC intervened, stating that Sonia was not dependent
upon Bonifacio for support and cannot be considered the primary
beneficiary. The SSC taking into consideration the Kasunduan as proof
that Sonia was no longer dependent for support on Bonifacio.
Sonia filed a petition for review before the CA which was
dismissed outright for failing to include a written explanation as to why
respondents were not personally served copies of the petition.
Issue: Whether or not the petition should be dismissed due to Sonia’s
failure to include a written explanation as to why respondents were not
personally served copies of the petition?
Held: No.
Personal service and filing are preferred for obvious
reasons. Plainly, such should expedite action or resolution on a
pleading, motion or other paper; and conversely, minimize, if not
eliminate, delays likely to be incurred if service or filing is done by mail,
considering the inefficiency of the postal service. Likewise, personal
service will do away with the practice of some lawyers who, wanting to
appear clever, resort to the following less than ethical practices:
serving or filing pleadings by mail to catch opposing counsel off-guard,
thus leaving the latter with little or no time to prepare, for instance,
responsive pleadings or an opposition; or
(2) upon receiving notice from the post office that the registered
containing the pleading of or other paper from the adverse party may be
claimed, unduly procrastinating before claiming the parcel, or, worse,
not claiming it at all, thereby causing undue delay in the disposition of
such pleading or other papers.
If only to underscore the mandatory nature of this innovation
to our set of adjective rules requiring personal service whenever
practicable, Section 11 of Rule 13 then gives the court
the discretion to consider a pleading or paper as not filed if the
other modes of service or filing were not resorted to and no
written explanation was made as to why personal service was
not done in the first place. The exercise of discretion must,
necessarily consider the practicability of personal service, for
Section 11 itself begins with the clause “whenever practicable ”.
We thus take this opportunity to clarify that under Section 11,
Rule 13 of the 1997 Rules of Civil Procedure,
personal service and filing is the general rule, and resort to other modes
of service and filing, the exception. Henceforth, whenever personal
service or filing is practicable, in the light of the circumstances of time,
place and person, personal service or filing is mandatory. Only when
personal service or filing is not practicable may resort to other modes be
had, which must then be accompanied by a written explanation as to
why personal service or filing was not practicable to begin with. In
adjudging the plausibility of an explanation, a court shall likewise
consider the importance of the subject matter of the case or the issues
involved therein, and the prima facie merit of the pleading sought to be
expunged for violation of Section 11.
In the case at bar, the address of respondent’s counsel is
Lopez, Quezon, while petitioner Sonia’s counsel’s
is LucenaCity. Lopez, Quezon is 83 kilometers away
from Lucena City Such distance makes personal service
impracticable. As inMusa v. Amor, a written explanation why service
was not done personally “might have been superfluous.”
As this Court held in Tan v. Court of Appeals, liberal
construction of a rule of procedure has been allowed where, among
other cases, “the injustice to the adverse party is not commensurate
with the degree of his thoughtlessness in not complying with the
procedure prescribed.”
Without preempting the findings of the Court of Appeals on the
merits of petitioners’ petition in CA G.R. No. 73038, if petitioners’
allegations of fact and of law therein are true and the outright dismissal
of their petition is upheld without giving them the opportunity to prove
their allegations, petitioner Sonia would be deprived of her rightful death
benefits just because of the Kasunduan she forged with her
husband Macatangay which contract is, in the first place, unlawful. The
resulting injustice would not be commensurate to petitioners’ counsel’s
“thoughtlessness” in not explaining why respondents were not
personally served copies of the petition.

Andy Quelnan vs VHF Philippines
Service by registered mail
VHF filed an ejectment case against Quelnan in the MeTC. Substituted
service of summons was sent to his wife. Quelnan failed to answer
which prompted the court to release its ruling in favor of VHF. The
decision was sent through registered mail, but Quelnan failed to claim it
even after 3 notices. When the notice to vacate came, Quelnan file a
Petition for relief of Judgment from the RTC. RTC agreed, stating there
was excusable negligence when the wife apparently tore the summons
in anger.
Issues:
(1) If a party fails to claim his copy of the adverse decision which was
sent through registered mail, when is he deemed to have knowledge of
said decision?
(2) Will the presumption of completeness of service of a registered mail
matter under Rule 13, Section 10 of the 1997 Rules of Civil Procedure
apply in relation to the 60-day period for filing a petition for relief from
judgment under Rule 38, Section 3 of the Rules?
Held: (Quelnan’s position that he had no knowledge of the decision and
that he was not sent the summons is untenable, 1) there was valid
SUBSTITUTED SERVICE 2)he received 3 NOTICES for the decision.)
Relief from judgment under Rule 38 is a legal remedy
whereby a party seeks to set aside a judgment rendered against him by
a court whenever he was unjustly deprived of a hearing or was
prevented from taking an appeal, in either case, because of fraud,
accident, mistake or excusable neglect.
Section 3 of Rule 38 reads:
SEC. 3. Time for filing petition; contents and verification. — A petition
provided for in either of the preceding sections of this Rule must be
verified, filed within sixty (60) days after the petitioner learns of the
judgment, final order, or other proceeding to be set aside, and not more
than six (6) months after such judgment or final order was entered, or
such proceeding was taken; and must be accompanied with affidavits,
showing the fraud, accident, mistake or excusable negligence relied
upon and the facts constituting the petitioner’s good and substantial
cause of action or defense, as the case may be. (Emphasis supplied)
Clear it is from the above that a petition for relief from judgment must be
filed within: (a) 60 days from knowledge of judgment, order or other
proceedings to be set aside; and (b) six (6) months from entry of such
judgment, order or other proceeding. These two periods must concur.
Both periods are also not extendible and never interrupted. Indeed,
relief is allowed only in exceptional cases as when there is no other
available or adequate remedy.
when he became aware of the judgment subject of his petition for relief.
The records clearly reveal that a copy of the MeTC decision was sent to
petitioner through registered mail at his given address on November 25,
1992. It should be noted that petitioner was not represented by counsel
during the proceedings before the MeTC. The first notice to him by the
postmaster to check his mail was on November 25, 1992. Thereafter,
subsequent notices were sent by the postmaster on December 7, 1992
and December 11, 1992. For sure, a certification that the registered mail
was unclaimed by the petitioner and thus returned to the sender after
three successive notices was issued by the postmaster. Hence, service
of said MeTC decision became effective five (5) days after November
25, 1992, or on November 30, 1992, conformably with Rule 13, Section
10 of the 1997 Rules of Civil Procedure, which reads:
SEC. 10. Completeness of Service. − Personal service is complete upon
actual delivery. Service by ordinary mail is complete upon the expiration
of ten (10) days after mailing, unless the court otherwise provides.
Service by registered mail is complete upon actual receipt by the
addressee, or after five (5) days from the date he received the first
notice of the postmaster, whichever date is earlier. (Emphasis supplied)
There is no doubt that under the Rules, service by registered mail is
complete upon actual receipt by the addressee. However, if the
addressee fails to claim his mail from the post office within five (5) days
from the date of the first notice, service becomes effective upon t
he expiration of five (5) days therefrom.[14] In such a case, there arises
a presumption that the service was complete at the end of the said five-
day period. This means that the period to appeal or to file the necessary
pleading begins to run after five days from the first notice given by the
postmaster. This is because a party is deemed to have received and to
have been notified of the judgment at that point.
With the reality that petitioner was first notified by the postmaster on
November 25, 1992, it follows that service of a copy of the MeTC
decision was deemed complete and effective five (5) days therefrom or
on November 30, 1992. Necessarily, the 60-day period for filing a
petition for relief must be reckoned from such date (November 30, 1992)
as this was the day when actual receipt by petitioner is presumed. In
short, petitioner was deemed to have knowledge of the MeTC decision
on November 30, 1992. The 60-day period for filing a petition for relief
thus expired on January 29, 1993. Unfortunately, it was only on May 24,
1993, or 175 days after petitioner was deemed to have learned of the
judgment that he filed his petition for relief with the RTC. Indubitably, the
petition was filed way beyond the 60-day period provided by law.
SPS. BELEN vs HONORABLE CHAVEZ
Topic: Service by registered mail
FACTS:
The private respondents spouses Pacleb, represented by their Atty.
Rioveros, filed before the RTC of Batangas an action for enforcement of
a foreign judgment against petitioner spouses Belen. The complaint
alleged that the private respondents secured a judgment by default from
the Superior Court of Californiaand the judgment ordered petitioners to
pay respondents an amount representing the loan payment and share in
the profits plus interesr and costs of suit. The summons was served on
petitioners’ address in Laguna, as was alleged in the complaint, and
received by Marcelino Belen. Atty. Alcantara filed an answer alleging
that contrary to respondents’ averment, petitioners were actually
residents of California, USA and that the liability was extinguished by a
release of abstract judgment in the same collection case. In view of
petitioners’ failure to attend trial,the RTC ordered the ex parte
presentation of evidence but before such took place, Atty. Alcantara filed
a MTD citing the judgment of dismissal issued by the SC of California.
For failure to present a copy of the alleged judgment, the MTD was
denied. Petitioners and Atty. Alcantara failed to appear at the pre-trial
conference thus the RTC declared petitioners in default and allowed the
ex parte presentation of evidence. Atty. Alcantara passed away without
the RTC being informed and the RTC rendered a decision ordering
petitioners to pay. A copy of the RTC decision intended for Atty.
Alcantara was returned with the notation "Addressee Deceased." A copy
of the RTC decision was then sent to the purported address of
petitioners in San Gregorio, Alaminos, Laguna and was received by a
certain Leopoldo Avecilla. Meanwhile, immediately after the
promulgation of the RTC decision, private respondents filed an ex-parte
motion for preliminary attachment which the RTC granted. Private
respondents sought the execution of the RTC decision. The RTC
directed the issuance of a writ of execution. Upon the issuance of a writ
of execution, the real properties belonging to petitioners were levied
upon and the public auction. Atty. Carmelo B. Culvera entered his
appearance as counsel for petitioners. Atty. Culvera filed a Motion to
Quash Writ of Execution (With Prayer to Defer Further Actions). He later
filed a Notice of Appeal from the RTC Decision averring that he received
a copy thereof only on 29 December 2003. The CA dismissed the
petition for certiorari of petitioners.
ISSUES:
whether the RTC acquired jurisdiction over the persons of petitioners
through either the proper service of summons or the appearance of the
late Atty. Alcantara on behalf of petitioners
whether there was a valid service of the copy of the RTC decision on
petitioners.
RULING:
On one hand, courts acquire jurisdiction over the plaintiffs upon the filing
of the complaint. On the other hand, jurisdiction over the defendants in a
civil case is acquired either through the service of summons upon them
or through their voluntary appearance in court and their submission to
its authority. As a rule, if defendants have not been summoned, the
court acquires no jurisdiction over their person, and a judgment
rendered against them is null and void. To be bound by a decision, a
party should first be subject to the court’s jurisdiction. In an action in
personam wherein the defendant is a non-resident who does not
voluntarily submit himself to the authority of the court, personal service
of summons within the state is essential to the acquisition of jurisdiction
over her person. This method of service is possible if such defendant is
physically present in the country. If he is not found therein, the court
cannot acquire jurisdiction over his person and therefore cannot validly
try and decide the case against him. The action filed against petitioners,
prior to the amendment of the complaint, is for the enforcement of a
foreign judgment in a complaint for breach of contract whereby
petitioners were ordered to pay private respondents the monetary
award. It is in the nature of an action in personam because private
respondents are suing to enforce their personal rights under said
judgment.
Applying the foregoing rules on the service of summons to the instant
case, in an action in personam, jurisdiction over the person of the
defendant who does not voluntarily submit himself to the authority of the
court is necessary for the court to validly try and decide the case
through personal service or, if this is not possible and he cannot be
personally served, substituted service as provided in Rule 14, Sections
6-7. If defendant cannot be served with summons because he is
temporarily abroad, but otherwise he is a Philippine resident, service of
summons may, by leave of court, be effected out of the Philippines
under Rule 14, Section 15. In all of these cases, it should be noted,
defendant must be a resident of the Philippines, otherwise an action in
personam cannot be brought because jurisdiction over his person is
essential to make a binding decision.
However, the records of the case reveal that herein petitioners have
been permanent residents of California, U.S.A. since the filing of the
action up to the present. From the time Atty. Alcantara filed an answer
purportedly at the instance of petitioners’ relatives, it has been
consistently maintained that petitioners were not physically present in
the Philippines. In the answer, Atty. Alcantara had already averred that
petitioners were residents of California, U.S.A. and that he was
appearing only upon the instance of petitioners’ relatives.
We now come to the question of whether the service of a copy of the
RTC decision on a certain Teodoro Abecilla is the proper reckoning point
in determining when the RTC decision became final and executory. The
Court of Appeals arrived at its conclusion on the premise that Teodoro
Abecilla acted as petitioners’ agent when he received a copy of the RTC
decision. As a general rule, when a party is represented by counsel of
record, service of orders and notices must be made upon said attorney
and notice to the client and to any other lawyer, not the counsel of
record, is not notice in law. The exception to this rule is when service
upon the party himself has been ordered by the court. In the instant
case, a copy of the RTC decision was sent first to Atty. Alcantara,
petitioners’ counsel of record. However, the same was returned
unserved in view of the demise of Atty. Alcantara. Thus, a copy was
subsequently sent to petitioners’ "last known address in San Gregorio,
Alaminos, Laguna," which was received by a certain Leopoldo Avecilla.
Undoubtedly, upon the death of Atty. Alcantara, the lawyer-client relationship between him and petitioners has
ceased, thus, the service of the RTC decision on him is ineffective and did not bind petitioners. The subsequent
service on petitioners’ purported "last known address" by registered mail is also defective because it does not
comply with the requisites under the aforequoted Section 7 of Rule 13 on service by registered mail. Section 7
of Rule 13 contemplates service at the present address of the party and not at any other address of the party.
Service at the party’s former address or his last known address or any address other than his present address
does not qualify as substantial compliance with the requirements of Section 7, Rule 13. Therefore, service by
registered mail presupposes that the present address of the party is known and if the person who receives the
same is not the addressee, he must be duly authorized by the former to receive the paper on behalf of the party
GCP vs Precipe
FACTS
On April 18, 1990, private respondent filed the herein complaint
for damages for physical injuries sustained by him as a passenger of
petitioner’s bus.
On November 2, 1995, respondent court [3] rendered a decision in
favor of the private respondent ordering the petitioner to pay the former.
Copy of the decision sent to petitioner was returned for the reason that it
had “moved” (residence), while copy sent to Atty. Arnold M. Aquino, then
petitioner’s counsel, was returned “unserved” being unclaimed.
Petitioner states that a copy of the decision was personally delivered by
the Civil Docket Clerk of the trial court on Atty. Aquino who had refused
to receive the same saying he was no longer counsel for the petitioner,
although no notice of withdrawal as counsel was filed by him in court.
On April 11, 1996, private respondent filed a motion for
execution of the judgment, copy furnished to Atty. Arnold M. Aquino and
petitioner which the court granted on October 9, 1996. The assailed writ
of execution was correspondingly issued, which petitioner received on
October 30, 1996.
On November 5, 1996, Atty. Jose de Luna entered his
appearance as new counsel for the petitioner with motion for
reconsideration of the order dated October 9, 1996 granting the motion
for execution or the quashal of the writ of execution on the ground that
petitioner had not been duly notified of the decision.
On November 9, 1996, petitioner received a Notice of Demand
for Payment from the deputies of the Ex-officio Sheriff of the RTC of
Cagayan attaching thereto copies of the writ of execution and the
decision. On November 14, 1996, petitioner filed a Notice of Appeal.
Two(2) months later, on January 23, 1997, the respondent court issued
the assailed resolution denying petitioners’ motion for reconsideration or
to quash writ of execution.
Petitioner went to the CA on a petition for certiorari claiming that
the denial of the respondent Judge of its motion for reconsideration was
tainted with grave abuse of discretion since he was not duly notified of
the decision and there is no legal and factual basis for the issuance of
the writ of execution.[5] The appellate court found no such abuse of
discretion and dismissed the petition. [6] It likewise denied petitioner’s
motion for reconsideration.[7]
Hence, the present petition for review on certiorari alleging
that:
ISSUES
WHETHER THE COURT OF APPEALS COMMITED A GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OF JURISDICTION OR IN
EXCESS OF IT IN FINDING THAT THE UNJUSTIFIABLE REFUSAL OF
PETITIONER’S COUNSEL ON RECORD TO RECEIVE IN OPEN
COURT A COPY OF THE SUBJECT DECISION IS ONLY A MERE
NEGLIGENCE OF COUNSEL AND THEREFORE, BINDS
PETITIONER, HENCE, THE DECISION HAD BECOME FINAL AND
EXECUTORY.
WHETHER THE COURT OF APPEALS COMMITTED GRAVE ABUSE
OF DISCRETION IN AFFIRMING THE DECISION OF RESPONDENT
JUDGE, BY CITING JURISPRUDENCE ON “NEGLIGENCE OF
COUNSEL BINDS HIS CLIENT” WHICH IS NOT APPLICABLE IN THE
INSTANT CASE BECAUSE THEY HAVE DIFFERENT FACTS.[8]
HELD:
I. The Court does not agree.
Jurisprudence is replete with pronouncements that clients are
bound by the actions of their counsel in the conduct of their case. [14] If it
were otherwise, and a lawyer’s mistake or negligence was admitted as a
reason for the opening of a case, there would be no end to litigation so
long as counsel had not been sufficiently diligent or experienced or
learned.[15]
The only exception to the general rule is when the counsel’s
actuations are gross or palpable, resulting in serious injustice to client,
that courts should accord relief to the party.[16] Indeed, if the error or
negligence of the counsel did not result in the deprivation of due
process to the client, nullification of the decision grounded on grave
abuse of discretion is not warranted.[17]
In this case, while Atty. Aquino, counsel of petitioner, was far from
being vigilant in protecting the interest of his client, his infractions cannot
be said to have deprived petitioner of due process that would justify
deviation from the general rule that clients are bound by the actions of
their counsel.
HELD 2
The fact that Atty. Aquino refused to receive a copy of the decision
and no substituted service was effected does not erase the fact that a
copy of the trial court decision had earlier been sent by registered mail
to Atty. Aquino which was returned for the reason that he has moved. [27]
This is sufficient service of the decision on petitioner since service upon
counsel of record at his given address is service to petitioner. [28] As
explained in Macondray & Co., Inc. vs. Provident Insurance Corp. :[29]
If counsel moves to another address without informing the court
of that change, such omission or neglect is inexcusable and will not stay
the finality of the decision. “The court cannot be expected to take judicial
notice of the new address of a lawyer who has moved or to ascertain on
its own whether or not the counsel of record has been changed and who
the new counsel could possibly be or where he probably resides or
holds office.”[30]
The rule is that when a party is represented by counsel in an
action in court, notices of all kinds including motions, pleadings and
orders must be served on the counsel. And notice to such counsel is
notice to the client.[31] Notice sent to counsel of record is binding upon
the client and the neglect or failure of counsel to inform him of an
adverse judgment resulting in the loss of his right to appeal is not a
ground for setting aside a judgment, valid and regular on its face. [32]
While the rule admits of exceptions, in order to prevent a
miscarriage of justice,[33] no such circumstance is here present as
petitioner was duly accorded due process.
This Court has also held that in cases where service was
made on the counsel of record at his given address, notice sent to
petitioner itself is not even necessary.[34] Even then, in the present case,
the trial court had sent a copy of the decision to petitioner’s known
address which was returned however for the reason that it has moved.
[35]
In this case, petitioner was able to actively defend its case in
court. It also knew that Atty. Aquino was no longer its counsel months
before the decision was rendered, unlike in People’s Homesite, yet it did
not take steps to hire a new one to protect its interests.
Costs against petitioner.
G.R. no. 169970 January 20, 2009
PROTACIO VICENTE AND DOMINGA VICENTE, represented by
Rondolf Vicente, Petitioners,
vs.
DELIA SOLEDAD AVERA and RONBERTO VALINO, Sheriff IV,
Regional Trial Court, Branch 70, Pasig City, Respondents.
F: Jovencio Rebuquiao was the registered owner of the property
in dispute. He executed a Deed of Absolute Sale in favor of P Sps
Vicente. Subsequently, he executed another Deed of Absolute Sale in
favor of R Avera and her then husband.
R Avera would eventually file a Petition for Declaration of
Nullity of Marriage docketed as a JDRC Case. She asserted exclusive
ownership over the property in dispute and a Notice of Lis Pendens was
issued. Eventually a TCT in the names of the P’s was issued despite the
Notice of lis pendens.
In the JDRC case, a judgment was rendered in favor of R
Avera ordering that the property in dispute be put in the custody of R
Avera and not her husband. A Writ of Execution was issued and
enforced by the R Sheriff Valino.
Thus, P filed for Injunction against R Sheriff. RTC ordered a
TRO. CA reversed. Hence this appeal.
P’s contend that they are not bound by the judgment in the
JDRC Case because they are not parties to the case notwithstanding
the Notice of Lis pendens.
I: WN the P’s are bound by the judgment in the JDRC case
because of the Notice of lis pendens.
H/R: NO, the Notice of lis pendens in the JDRC case does not bind
the P’s.
Section 24, Rule 14 of the 1964 Rules of Civil Procedure
provides that a purchaser of the property affected by the Notice of lis
pendens is deemed to have constructive notice of the pendency of the
action only from the time of filing such notice. Section 14, Rule 13 of the
1997 Rules of Civil Procedure reiterates this rule. Thus, a notice of lis
pendens affects a transferee pendente lite, who by virtue of the notice,
is bound by any judgment, which may be rendered for or against the
transferor, and his title is subject to the results of the pending litigation.
Once a notice of lis pendens has been duly registered, any subsequent
transaction affecting the land involved would have to be subject to the
outcome of the litigation. A purchaser who buys registered land with full
notice of the fact that it is in litigation between the vendor and a third
party stands in the shoes of his vendor and his title is subject to the
incidents of the pending litigation.
In the case at bar, the notice of lis pendens does not affect petitioners’
title to the property in dispute. A notice of lis pendens concerns litigation
between a transferor and a third party. The notice of lis pendens does
not concern litigation involving Rebuquiao, who transferred his title to
the property in dispute to petitioners, and his title. The notice of lis
pendens pertains to the JDRC case, an action for nullity of the marriage
between Avera and Domingo. Since Rebuquiao’s title to the property in
dispute is not subject to the results of the JDRC case, petitioners’ title to
the same property is also not subject to the results of the JDRC case.