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Ching Vs Cheng

Facts:
Antonio Ching owned several businesses and properties, among which was Po Wing Properties, Incorporated (Po Wing
Properties). His total assets are alleged to have been worth more than 380 million. While he was unmarried, he had
children from two women.

Ramon Ching alleged that he was the only child of Antonio Ching with his common-law wife, Lucina Santos. Joseph
Cheng and Jaime Cheng, on the other hand, claim to be Antonio Ching’s illegitimate children with his housemaid,
Mercedes Igne.

Lucina Santos alleged that when Antonio Ching fell ill sometime in 1996, he entrusted her with the distribution of his
estate to his heirs if something were to happen to him. She alleged that she handed all the property titles and business
documents to Ramon Ching for safekeeping. Fortunately, Antonio Ching recovered from illness and allegedly demanded
that Ramon Ching return all the titles to the properties and business documents

Ramon Ching allegedly executed an affidavit of settlement of estate, naming himself as the sole heir and adjudicating
upon himself the entirety of Antonio Ching’s estate.

1st Case - (The Chengs) filed a complaint for declaration of nullity of titles against Ramon Ching before the Regional
Trial Court of Manila. This case was docketed as Civil Case No. 98-91046 (the first case).

On March 22, 1999, the complaint was amended, with leave of court, to implead additional defendants, including Po
Wing Properties, of which Ramon Ching was a primary stockholder. After the responsive pleadings had been filed, Po
Wing Properties filed a motion to dismiss on the ground of lack of jurisdiction of the subject matter.29

RTC Manila Branch 6, granted the motion to dismiss on the ground of lack of jurisdiction over the subject matter. Upon
motion of the Chengs’ counsel, however, the Chengs and Lucina Santos were given fifteen (15) days to file the
appropriate pleading. They did not do so.

2nd Case- the Chengs and Lucina Santos filed a complaint for "Annulment of Agreement, Waiver, Extra-Judicial
Settlement of Estate and the Certificates of Title Issued by Virtue of Said Documents with Prayer for Temporary
Restraining Order and Writ of Preliminary Injunction" against Ramon Ching and Po Wing Properties.

On November 11, 2002, the Chengs and Lucina Santos filed a motion to dismiss their complaint in the second case,
praying that it be dismissed without prejudice.

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

On December 9, 2002, Ramon Ching and Po Wing Properties filed a motion for reconsideration of the order dated
November 22, 2002. They argue that the dismissal should have been with prejudice under the "two dismissal rule" of
Rule 17, Section 1 of the 1997 Rules of Civil Procedure, in view of the previous dismissal of the first case.37

3rd Case- During the pendency of the motion for reconsideration, the Chengs and Lucina Santos filed a complaint for
"Disinheritance and Declaration of Nullity of Agreement and Waiver, Affidavit of Extra judicial Agreement, Deed of
Absolute Sale, and Transfer Certificates of Title with Prayer for TRO and Writ of Preliminary Injunction" against Ramon
Ching and Po Wing Properties. This case was docketed as Civil Case No. 02-105251(the third case) and was eventually
raffled to Branch 6.

Ramon Ching and Po Wing Properties filed a motion to dismiss on the ground of res judicata, litis pendencia, forum-
shopping, and failure of the complaint to state a cause of action.

On July 30, 2004, Branch 6 issued an omnibus order resolving both the motion for reconsideration in the second case
and the motion to dismiss in the third case. The trial court denied the motion for reconsideration and the motion to
dismiss, holding that the dismissal of the second case was without prejudice and, hence, would not bar the filing of the
third case.
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ISSUE : Whether the trial court’s dismissal of the second case operated as a bar to the filing of a third case, asper the
"two-dismissal rule";

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

As a general rule, dismissals under Section 1 of Rule 17 are without prejudice except when it is the second time that
the plaintiff caused its dismissal. Accordingly, for a dismissal to operate as an adjudication upon the merits, i.e, with
prejudice to the re-filing of the same claim, the following requisites must be present:

(1) There was a previous case that was dismissed by a competent court;
(2) Both cases were based on or include the same claim;
(3) Both notices for dismissal werefiled by the plaintiff; and
(4) When the motion to dismiss filed by the plaintiff was consented to by the defendant on the ground that the latter paid
and satisfied all the claims of the former.72

The purpose of the "two-dismissal rule" is "to avoid vexatious litigation."73 When a complaint is dismissed a second
time, the plaintiff is now barred from seeking relief on the same claim.

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

The dismissal of the first case was done at the instance of the defendant under Rule 16, Section 1(b) of the Rules of
Civil Procedure.

Under Section 5 of the same rule,75 a party may re-file the same action or claim subject to certain exceptions.

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

Petitioners do not deny that the second dismissal was requested by respondents before the service of any responsive
pleadings. Accordingly, the dismissal at this instance is a matter of right that is not subject to the trial court’s discretion.
In O.B. Jovenir Construction and Development Corporation v. Macamir Realty and Development Corporation:

[T]he trial court has no discretion or option to deny the motion, since dismissal by the plaintiff under Section 1, Rule 17
is guaranteed as a matter of right to the plaintiffs. Even if the motion cites the most ridiculous of grounds for dismissal,
the trial court has no choice but to consider the complaint as dismissed, since the plaintiff may opt for such dismissal as
a matter of right, regardless of ground. (Emphasis supplied)

For this reason, the trial court issued its order dated November 22, 2002 dismissing the case, without prejudice.

In granting the dismissal of the second case, the trial court specifically orders the dismissal to be without prejudice. It is
only when the trial court’s order either is silent on the matter, or states otherwise, that the dismissal will be considered
an adjudication on the merits.

However, while the dismissal of the second case was without prejudice, respondents’ act of filing the third case while
petitioners’ motion for reconsideration was still pending constituted forum shopping.

PINGA V. HEIRS OF SANTIAGO

Facts: The heirs of Santiago filed a complaint for injunction against the petitioners for unlawful entry into their land and
harvesting of the various resources found therein such as bamboo, the fruits of their coconut trees etc. The petitioner,
in their answer with counterclaims of forcible entry and damages amounting to P2.1M for the reckless filing of the case,
instead claimed that they were in fact the owners of the land and that the respondents' entry were merely tolerated. The
trial court dismissed the case since the respondent's failed to present their evidence due to their counsel's non-
appearance and several postponements. Their counsel field an MR of the said order, but instead of motioning to reverse
the decision, motioned instead to dismiss the whole action including the counterclaim of the petitioners, and disallow
the petitioners to present evidence ex parte as to their counterclaim. The trial court granted the dismissal of the
counterclaim and averred that the dismissal of the complaint carries with it the dismissal of the counterclaim.
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The petitioners filed a petition for certiorari alleging that the trial court committed grave abuse of discretion when it
dismissed the counterclaim, contrary to the express provision of Rule 17, Sec. 3 which provides that dismissal of the
complaint is without prejudice to the counterclaim.

The defendants averred that the jurisprudence so far, up to BA Finance, held that the dismissal of the complaint carried
with it the dismissal of the counterclaim.

Issue: Does the dismissal of the complaint carry with it the dismissal of the counterclaim?

Held: No. Rule 17, Sec. 3 of the 1997 Rules of Procedure (current). The jurisprudence alleged by the defendant is based
on the 1964 Rules of Procedure via Rule 17 -- which is hereby abandoned by this Decision. There has been no
Jurisprudence for the current Rules, since there has been no opportunity or case to rule on the same up to this moment.

The 1964 Rules of Procedure has been silent on whether the dismissal of the complaint carries with it the dismissal of
the counterclaim, which led to the express inclusion of non-dismissal of the counterclaim via Sec. 3, Rule 17 of the 1997
Rules of Procedure -- as suggested by J. Regalado himself during the drafting of the 1997 Rules, whom has taken a
strong dissenting opinion on the decision of BA Finance.

The revision of the Rule is not without basis since Act. 190 (1901) and the 1940 Rules supports the current 1997 Rule.

The doctrine applies whether the counterclaim is permissive or compulsory, as inferred by the non-qualification of Sec.
3.

PHILIPPINE NATIONAL BANK v SPS. ANGELITO PEREZ AND JOCELYN PEREZ

G.R. No. 187640
June 15, 2011

FACTS:
In 1988, spouses Angelito Perez and Jocelyn Perez (Spouses Perez) obtained a revolving credit line
fromPhilippine National Bank's (PNB's) branch in Cauayan City, Province of Isabela. The credit line was secured by
several chattel mortgages over palay stocks inventory and real estate mortgages over real properties.
Sometime in 2001,Spouses Perez defaulted on their financial obligations, prompting PNB to institute extra-judicial
foreclosure proceedings over the aforementioned securities on November 13 of that year. On November 19, 2001, the
sheriff instituted a Notice ofExtra-Judicial Sale for the mortgaged properties by public auction on December 20,
2001. On November 26, 2001,Spouses Perez filed an Amended Complaint for Release or Discharge of Mortgaged
Properties, Breach of Contract,Declaration of Correct Amount of Obligation, Injunction, Damages, Annulment of Sheriff's
Notice of Extra-Judicial Sale, with a Prayer for the Issuance of a Preliminary Mandatory Injunctive Writ and a Temporary
Restraining Order docketed asCivil Case No. 20-1155.At the hearing of the application for the issuance of the writ,
Spouses Perez and their counsel failed to appear which resulted in the denial of the injunction. This was also the case
in the pre-trial. Spouses Perez alleged that they filed a Motion for Postponement, but on the same date the court issued
its denial and dismissed the case. Spouses Perez filed a Motion for Reconsideration and a Notice of Appeal, which were
both denied. Consequently, Spouses Perez appealed the denial of their Motion for Reconsideration to the CA, which
the CA denied and reasoned that: petitioners trifled with the mandatory character of a pre-trial conference in the speedy
disposition of cases. It is a procedural device intended to clarify and limit the basic issues between the parties and paves
the way for a less cluttered trial and resolution of the case. Its main objective is to simplify, abbreviate and
expedite the trial, or, propitious circumstance permitting (as when the parties can compound or compromise their
differences), even to totally dispense with it altogether.Surprisingly, on April 14, 2005, the CA issued an Amended
Decision granting the Motion for Reconsideration citing that the higher interest of substantial justice should prevail and
not mere technicality. The case was remanded to the trial court. On January 20, 2006, the trial court issued an Order
setting the case for hearing on March 8, 2006.On October 20, 2005, Spouses Perez filed their motion to require PNB to
submit its statement of account for the period beginning 1995 to 2000. On December 9, 2005, PNB also filed a motion
for the production or inspection of books of accounts regarding payments in the years 1997 to 2000 and thereafter, if
any. There being no opposition to the twin motion of [Spouses Perez], the same are hereby granted. Accordingly, let
this case be set for hearing on March 8, 2006 at8:30 o'clock in the morning. PNB, however, failed to receive a copy of
the aforementioned order and was, thus, unable to attend the hearing on March 8, 2006. For failure to appear in today's
pre-trial and for failure to comply with the order of this Court dated January 20, 2006, Spouses Perez are hereby allowed
to adduce evidence. On July 5, 2006, the trial court decided in favor of Spouses Perez. In its Decision, the trial court
denied PNB's Motion for Reconsideration and declared in its judgment that: a. due and full payments were made by
[Spouses Perez] on their principal obligation to PNBb. the Sheriff's Notice of Extrajudicial Sale as null and void, and
enjoining defendant from foreclosing any and allof the properties mortgaged by Spouses Perez. Ordering PNB to pay
[Spouses Perez] the sum of: 1. PHP145,117,306.67 representing the amount overpaid by Spouses Perez under the
revolving credit loan facility and promissory2. PHP2,000,000.00 as moral damages3. 1,500,000 as Exemplary damages.
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PHP1, 000,000.00) as Attorney's Fees and cost of suit.Accordingly, the trial court issued an Order of Execution dated
August 14, 2006. The very next day, a Writ ofExecution was issued to implement the aforesaid order and to demand
payment from PNB. On August 15, 2006, PNB filed a Petition for Relief from Judgment/Order of Execution with
a prayer for the issuance of a writ of preliminary injunction, alleging that the failure to file the Motion for
Reconsideration was due to mistake and/or excusable negligence.Consequently, the CA issued a Resolution dated
November 7, 2006 granting the prayer for a temporary restraining order(TRO) and, likewise, issued a Temporary
Restraining Order directing public respondent, or any person acting for and on his behalf, to CEASE and DESIST from
IMPLEMENTING the assailed Orders dated August 16 and 17, 2006 inCivil Case No. Br. 19-1155 or otherwise
ENFORCING the Order of Execution dated August 14, 2006 or the Writ ofExecution dated August 15, 2006 in said case.
Despite the issuance of the TRO, Spouses Perez were able to garnish Two Million Six Hundred Seventy-SixThousand
One Hundred Forty Pesos and Seventy Centavos (Php 2,676,140.70) from PNB's account with Equitable PCIBank
(EPCIB) on the same date the TRO was issued. On October 23, 2008, the CA issued the assailed Decision in, granting
the petition of PNB. It ruled that the sending of a notice of pre-trial is mandatory and that the Order dated March 8,
2006 issued by the trial court cannot be considered as such. Therefore, the CA held that all orders issued subsequent
to the said order are,likewise, null and void. Hence, PNB and Spouses Perez filed their separate petitions with this Court
assailing both the decision and the resolution of the CA.

ISSUE:
Whether a pre-trial notice is mandatory and, as a consequence, whether the lack of notice of pre-trial voids a
subsequently issued decision.

RULING
:Section 3, Rule 18 of the 1997 Rules on Civil Procedure unequivocally requires that the notice of pre-trial shall be
served on counsel, or on the party who has no counsel." It is elementary in statutory construction that the word
"shall"denotes the mandatory character of the rule. Thus, it is without question that the language of the rule
undoubtedly requires the trial court to send a notice of pre-trial to the parties. More importantly, the notice of pre-trial
seeks to notify the parties of the date, time and place of the pre-trial and to require them to file their respective pre-trial
briefs within the time prescribed by the rules. Its absence, therefore, renders the pre-trial and all subsequent proceedings
null and void.In the case at bar, the order issued by the trial court merely spoke of a "hearing on March 8, 2006" and
requiredPNB "to prepare and complete a statement of account." The said order does not mention anything about a pre-
trial to be conducted by the trial court. In contrast, the Notice of Pre-trial dated August 22, 2002 issued by the trial court
categorically states that a pre-trial is to be conducted, requiring the parties to submit their respective pre-trial briefs. As
such we find that the CA aptly held that the Order dated March 8, 2006, which declared the hearing to be a pre-trial
and allowedSpouses Perez to adduce evidence ex parte, is void. Similarly, its ruling that the Decision dated July 5,
2006 and allsubsequent orders issued pursuant to the said judgment are also null and void, is proper. Necessarily, it
follows that the nullity of the Writ of Execution carries with it the nullity of all acts done which implemented
the writ. This includes the garnishment of Php 2,676,140.70 from PNB's account. Its return to PNB's account is but a
necessary consequence of the void writ.Similarly, the nullity of the Order dated August 17, 2006, which cancelled PNB's
fourteen (14) titles and directed the issuance of new titles to Spouses Perez, has the effect of annulling all the fourteen
(14) titles issued in the name of Spouses Perez. The titles should revert back to PNB. The fourteen (14) new titles issued
to Spouses Angelito Perez and Jocelyn Perez by virtue of the August 17, 2006 Order and all derivative titles issued
therefrom are declared null and void and cancelled. Spouses Angelito Perez and Jocelyn Perez are ordered to pay PNB
the amount ofP2,767,140.70 representing the amount illegally garnished from PNB's account with Equitable PCI Bank
(EPCIB

Chingkoe vs. Republic

G.R. No. 183608 July 31, 2013

Facts:
This petition stemmed from two collection cases filed by the Republic of the Philippines (Republic), represented by the
Bureau of Customs (BOC) before the Regional Trial Court (RTC) of Manila. In the first Complaint for collection of money
and damages, entitled Republic of the Philippines, represented by the Bureau of Customs v. Chiat Sing Cardboard Inc.
(defendant and third party plaintiff) v. Filstar Textile Industrial Corporation, Faustino T Chingkoe (third party defendants),
the Republic alleged that Chiat Sing Cardboard Inc. (Chiat Sing), a corporation that imports goods to the Philippines,
secured in 1997 fake and spurious tax credit certificates from Filstar Textile Industrial Corporation (Filstar), amounting
to six million seventy-six thousand two hundred forty-six pesos (PhP 6,076,246) Meanwhile, in the second Complaint,
entitled Republic of the Philippines, represented by the Bureau of Customs v. Filstar Textile Industrial Corporation the
Republic alleged that in the years 1992-1998, defendant Filstar fraudulently secured 20 tax credit certificates amounting
to fifty-three million six hundred fifty-four thousand six hundred seventy-seven pesos (PhP 53,654,677).

After an Order of consolidation was issued on June 23, 2003, the two cases were jointly heard before the RTC.
Pursuant to a Notice of Mediation Hearing sent to the parties on October 17, 2005, the cases were referred to the
Philippine Mediation Center (PMC) for mandatory mediation. The pre-trial for the consolidated cases was initially set on
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January 9, 2006, but come said date, the report of the mediation has yet to be submitted; hence, on the motion of the
counsel of defendant Chiat Sing, the pre-trial was canceled and rescheduled to February 15, 2006.
On February 15, 2006, the PMC reported that the proceedings are still continuing; thus, the trial court, on motion of the
same counsel for Chiat Sing, moved for the re-setting of the pre-trial to March 17, 2006.Unfortunately, the mediation
proceedings proved to be uneventful, as no settlement or compromise was agreed upon by the parties.
During the March 17, 2006 pre-trial setting, the Office of the Solicitor General (OSG), representing the Republic, failed
to appear. The counsel for defendant Filstar prayed for a period of 10 days within which to submit his motion or
manifestation regarding the plaintiff’s pre-trial brief. The trial court granted the motion, and again ordered a
postponement of the pre-trial to April 19, 2006.
Come the April 19, 2006 hearing, despite having received a copy of the March 17, 2006 Order, the OSG again failed to
appear. It also failed to submit its comment. Thus, counsels for the defendants Filstar, Chiat Sing, and Chingkoe moved
that plaintiff be declared non-suited. Meanwhile, the counsel for BOC requested for an update of their case. In its Order
on the same date, the trial court warned the plaintiffs Republic and BOC that if no comment is submitted and if they fail
to appear during the pre-trial set on May 25, 2006, the court will be constrained to go along with the motion for the
dismissal of the case.
The scheduled May 25, 2006 hearing, however, did not push through, since the trial court judge went on official leave.
The pre-trial was again reset to June 30, 2006.
During the June 30, 2006 pre-trial conference, the OSG again failed to attend. A certain Atty. Bautista Corpin, Jr. (Atty.
Corpin Jr.), appearing on behalf of BOC, was present, but was not prepared for pre-trial. He merely manifested that the
BOC failed to receive the notice on time, and moved for another re-setting of the pre-trial, on the condition that if either
or both lawyers from the BOC and OSG fail to appear, the court may be constrained to dismiss the abovementioned
cases of the BOC for failure to prosecute. Meanwhile, counsels for defendants Chiat Sing, Filstar, and third-party
defendants Faustino T. Chingkoe and Gloria C. Chingkoe, who were all present during the pre-trial, moved for the
dismissal of the case on the ground of respondent’s failure to prosecute. The trial court judge issued an Order resetting
the pre-trial to July 14, 2006.
At the hearing conducted on July 14, 2006, the respective counsels of the defendants were present. Notwithstanding
the warning of the judge given during the previous hearing, that their failure to appear will result in the dismissal of the
cases, neither the OSG nor the BOC attended the hearing. Thus, as moved anew by the respective counsels of the
three defendants, the trial court issued an Order dismissing the case.
The motion for reconsideration of the July 14, 2006 Order was likewise denied by the RTC on August 31, 2007.As
recourse, respondents filed a Petition for Certiorari under Rule 65 before the CA, alleging that the trial court judge acted
with grave abuse of discretion in dismissing the two cases.
CA
In its Decision dated April 30, 2008, the CA granted the petition and remanded the case to the RTC for further
proceedings. In reversing the RTC Order, the CA ruled that the case, being a collection case involving a huge amount
of tax collectibles, should not be taken lightly. It also stated that it would be the height of injustice if the Republic is
deprived of due process and fair play.
ISSUE: Was the trial court’s dismissal of the case in order?
HELD: Yes. This Court finds that the dismissal of the case by the trial court was due to the fault and negligence of
respondent. There is clear negligence and laxity on the part of both the BOC and OSG in handling this case on behalf
of the Republic. Despite several re-settings of the hearing, either or both counsels failed to attend the pre-trial
conference, without giving a justifiably acceptable explanation of their absence. This utter neglect of its duty to attend
the scheduled hearings is what led the trial court to ultimately dismiss the cases. In finding that the dismissal by the trial
court is tainted with grave abuse of discretion, the CA committed reversible error.
Petitioners’ repeated failure to appear at the pre-trial amounted to a failure to comply with the Rules and their non-
presentation of evidence before the trial court was essentially due to their fault.
The inevitable conclusion in this case is that the trial court was merely following the letter of Sec. 5, Rule I 8 of the Rules
of Court in dismissing the case. Thus, the CA committed grave and reversible error in nullifying the Order of dismissal.
The trial court had every reason to dismiss the case, not only due to the Motion to Dismiss filed by the defendants, but
because the Rules of Court itself says so.

ISSUE: Is the dismissal with or without prejudice?

HELD: Without prejudice.

Section 5, of Rule 18 provides that the dismissal of an action due to the plaintiff’s failure to appear at the pre-trial shall
be with prejudice, unless otherwise ordered by the court.
In view of the huge amount of tax collectibles involved, and considering that taxes are the "lifeblood of the government,"
the dismissal of the case should be without prejudice.

CZARINA T. MALVAR vs. KRFAT FOOD PHILS., INC

G.R. No. 183952; September 9, 2013

FACTS:
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The case initially concerned the execution of a final decision of the Court of Appeals (CA) in a labor litigation, but has
mutated into a dispute over attorney's fees between the winning employee and her attorney after she entered into a
compromise agreement with her employer under circumstances that the attorney has bewailed as designed to prevent
the recovery of just professional fees.

Malvar filed a complaint for illegal suspension and illegal dismissal against KFPI and Bautista in the National Labor
Relations Commission (NLRC). The Labor Arbiter found and declared her suspension and dismissal illegal, and ordered
her reinstatement, and the payment of her full backwages, inclusive of allowances and other benefits, plus attorney’s
fees.

NLRC and CA affirmed the decision of the Labor Arbiter. After the judgment in her favour became final and executor,
Malvar moved for the issuance of writ of execution but the execution failed due to questionable computation of the
award. Malvar requested for the second issuance of the writ of execution and was partially complied with but with protest
on the part of Kraft by filing a TRO for further execution since the computation is incorrect. CA ruled in favour of Kraft.
Thus, Malvar appealed. While her appeal was pending, Malvar and the respondents entered into a compromise
agreement

Thereafter, Malvar filed an undated Motion to Dismiss/Withdraw Case, praying that the appeal be immediately
dismissed/withdrawn in view of the compromise agreement, and that the case be considered closed and terminated.

INTERVENTION
Before the Court could act on Malvar’s Motion to Dismiss/Withdraw Case, the Court received on February 15, 2011 a
so-called Motion for Intervention to Protect Attorney’s Rights from The Law Firm of Dasal, Llasos and Associates,
through its Of Counsel Retired Supreme Court Associate Justice Josue N. Bellosillo (Intervenor), whereby the Intervenor
sought, among others, that both Malvar and KFPI be held and ordered to pay jointly and severally the Intervenor’s
contingent fees.

The Intervenor indicated that Malvar’s precipitate action had baffled, shocked and even embarrassed the Intervenor,
because it had done everything legally possible to serve and protect her interest. It added that it could not recall any
instance of conflict or misunderstanding with her, for, on the contrary, she had even commended it for its dedication and
devotion to her case. According to the Intervenor, it was certain that the compromise agreement was authored by the
respondents to evade a possible loss of P182,000,000.00 or more as a result of the labor litigation, but considering the
Intervenor’s interest in the case as well as its resolve in pursuing Malvar’s interest, they saw the Intervenor as a major
stumbling block to the compromise agreement that it was then brewing with her. Obviously, the only way to remove the
Intervenor was to have her terminate its services as her legal counsel. This prompted the Intervenor to bring the matter
to the attention of the Court to enable it to recover in full its compensation based on its written agreement with her.

Opposing the Motion for Intervention, Malvar stresses that there was no truth to the Intervenor’s claim to defraud it of
its professional fees; that the Intervenor lacked the legal capacity to intervene because it had ceased to exist after Atty.
Marwil N. Llasos resigned from the Intervenor and Atty. Richard B. Dasal became barred from private practice upon his
appointment as head of the Legal Department of the Small Business Guarantee and Finance Corporation, a government
subsidiary; and that Atty. Llasos and Atty. Dasal had personally handled her case.

Malvar adds that even assuming, arguendo, that the Intervenor still existed as a law firm, it was still not entitled to
intervene for the following reasons, namely: firstly, it failed to attend to her multiple pleas and inquiries regarding the
case, as when communications to the Intervenor through text messages were left unanswered; secondly, maintaining
that this was a justifiable cause to dismiss its services, the Intervenor only heeded her repeated demands to withdraw
from the case when Atty. Dasal was confronted about his appointment to the government subsidiary; thirdly, it was
misleading and grossly erroneous for the Intervenor to claim that it had rendered to her full and satisfactory services
when the truth was that its participation was strictly limited to the preparation, finalization and submission of the petition
for review with the Supreme Court; and finally, while the Intervenor withdrew its services on October 5, 2009, the
compromise agreement was executed with the respondents on December 9, 2010 and notarized on December 14,
2010, after more than a year and two months, dispelling any badge of bad faith on their end.

ISSUE:
Whether or not the Motion for Intervention to protect attorney’s rights can prosper, and, if so, how much could it recover
as attorney’s fees.

RULING:
YES. A compromise agreement is a contract, whereby the parties undertake reciprocal obligations to avoid litigation, or
put an end to one already commenced. The client may enter into a compromise agreement with the adverse party to
terminate the litigation before a judgment is rendered therein. If the compromise agreement is found to be in order and
not contrary to law, morals, good customs and public policy, its judicial approval is in order. A compromise agreement,
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once approved by final order of the court, has the force of res judicata between the parties and will not be disturbed
except for vices of consent or forgery.

A client has an undoubted right to settle her litigation without the intervention of the attorney, for the former is generally
conceded to have exclusive control over the subject matter of the litigation and may at any time, if acting in good faith,
settle and adjust the cause of action out of court before judgment, even without the attorney’s intervention. It is important
for the client to show, however, that the compromise agreement does not adversely affect third persons who are not
parties to the agreement.

By the same token, a client has the absolute right to terminate the attorney-client relationship at any time with or without
cause. But this right of the client is not unlimited because good faith is required in terminating the relationship. The
limitation is based on Article 19 of the Civil Code, which mandates that “[e]very person must, in the exercise of his rights
and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.” The
right is also subject to the right of the attorney to be compensated. This is clear from Section 26, Rule 138 of the Rules
of Court, which provides:

Section 26. Change of attorneys. - An attorney may retire at any time from any action or special proceeding, by the
written consent of his client filed in court. He may also retire at any time from an action or special proceeding, without
the consent of his client, should the court, on notice to the client and attorney, and on hearing, determine that he ought
to be allowed to retire. In case of substitution, the name of the attorney newly employed shall be entered on the docket
of the court in place of the former one, and written notice of the change shall be given to the adverse party.

A client may at any time dismiss his attorney or substitute another in his place, but if the contract between client and
attorney has been reduced to writing and the dismissal of the attorney was without justifiable cause, he shall be entitled
to recover from the client the full compensation stipulated in the contract. However, the attorney may, in the discretion
of the court, intervene in the case to protect his rights. For the payment of his compensation the attorney shall have a
lien upon all judgments for the payment of money, and executions issued in pursuance of such judgment, rendered in
the case wherein his services had been retained by the client.

In fine, it is basic that an attorney is entitled to have and to receive a just and reasonable compensation for services
performed at the special instance and request of his client. The attorney who has acted in good faith and honesty in
representing and serving the interests of the client should be reasonably compensated for his service.

MCIAA v Heirs of Minoza

G.R. No. 186045
February 2, 2011

Facts:
*A complaint for Reconveyance, Cancellation of Defendants Title, Issuance of New Title to Plaintiffs and Damages was
filed by Leila M. Hermosisima (Leila) for herself and on behalf of the other heirs of the late Estanislao Mioza.
*Leila claimed that their predecessors-in-interest, specifically, Adriana, Patricio, and Santiago, children of Estanislao
Mioza, executed a Deed of Sale on February 15, 1950 conveying the subject lots to the NAC on the assurance made
by the latter that they (Leilas predecessors-in-interest) can buy the properties back if the lots are no longer needed.
*More than forty years after the sale, plaintiffs informed the NACs successor-in-interest, the Mactan-Cebu
International Airport Authority (MCIAA), that they were exercising the buyback option of the agreement, but the MCIAA
refused to allow the repurchase on the ground that the sale was in fact unconditional.
*Before the MCIAA could present evidence in support of its case, a Motion for Intervention, with an attached
Complainant-in-Intervention was filed by the heirs of Filomeno T. Mioza, the heirs of Pedro T, Mioza and the Heirs of
Florencia T. Mioza, who claimed to be the true, legal, and legitimate heirs of the late Estanislao Mioza.
*The intervenors alleged in their complaint that the plaintiffs in the main case are not related to the late spouses
Estanislao Mioza and Inocencia Togono whose true and legitimate children were their predecessors.
*The RTC of Cebu City, Branch 22, issued an Order denying the Motion for Intervention holding that the rights being
claimed by the intervenors should be asserted in and would be fully protected by a separate proceeding. Moreover, if
the motion was granted, it would unduly delay the proceedings in the instant case.
*CA reversed holding that the determination of the true heirs of the late Estanislao Mioza is not only a collateral, but the
focal issue of the case. In addition, to grant the motion for intervention would avoid multiplicity of suits.

Issue:
Whether or not CA erred in allowing the intervetntion

Held:
 3B, 2016-2017
CIVPRO CASE DIGESTS

Yes. Intervention is a remedy by which a third party, not originally impleaded in the proceedings, becomes a litigant
therein to enable him, her or it to protect or preserve a right or interest which may be affected by such proceedings. The
rules provide that the court must take into consideration whether or not the intervention will unduly delay or prejudice
the adjudication of the rights of the original parties, and
whether or not the intervenors right or interest can be adequately pursued and protected in a separate proceeding.
In the case at bar, the intervenors are claiming that they are the legitimate heirs of Estanislao Mioza and Inocencia
Togono and not the original plaintiffs represented by Leila Hermosisima. True, if their allegations were later proven to
be valid claims, the intervenors would surely have a legal interest in the matter in litigation. Nonetheless, this Court has
ruled that the interest contemplated by law must be actual, substantial, material, direct and immediate, and not simply
contingent or expectant. It must be of such direct and immediate character that the intervenor will either gain or lose by
the direct legal
operation and effect of the judgment.
In addition to resolving who the true and legitimate heirs of Estanislao Mioza and Inocencia Togono are, the parties
would also present additional evidence in support of this new allegation of fraud, deceit, and bad faith and resolve issues
of conflicting claims of ownership, authenticity of certificates of titles, and regularity in their acquisition. Verily, this would
definitely cause unjust delay in the adjudication of the rights claimed by the original parties.
The allowance or disallowance of a motion for intervention rests on the sound discretion of the court after consideration
of the appropriate circumstances. It is not an absolute right