1
A.
1. G.R. No. L-65072 January 31, 1984
APOLINAR R. ROYALES and PRESENTACION GREGORIO, petitioners,
vs.
HON. INTERMEDIATE APPELLATE COURT, JOSE PLANAS, HON. J. CESAR
SANGCO etc., et al., respondents.
Citizens Legal Assistance Office for petitioners.
The Solicitor General for respondents.
ESCOLIN, J.:
Sought to be annulled in this petition for review is a final and
executory judgment rendered by the City Court [now Metropolitan
Trial Court] of Manila in Civil Case No. 057662-CV on ground of lack of
jurisdiction. Petitioners contend that the Court did not acquire
jurisdiction over the case for failure of respondent Jose Planas,
plaintiff therein, to avail of the barangay conciliation process before
the filing of the case in court, as required by P.D. 1508, otherwise
known as the "Katarungang Pambarangay Law."
The facts upon which this issue rests are the following: The spouses
Apolinar R. Royales and Presentacion Gregorio, petitioners herein, are
the lessees of a residential house owned by respondent Jose Planas
located at No. 1866 Int. I, Oroquieta St., Manila. On August 25, 1980,
Planas instituted before the then City Court of Manila an ejectment
suit against petitioners, docketed as Civil Case No. 057662-CV and
assigned to the sala of Judge J. Cesar Sangco.
Issues having been joined, trial on the merits ensued. Respondent
Planas testified on his own behalf and was cross-examined by
petitioners' counsel.
On November 10, 1981, when neither petitioners nor their counsel
appeared at the hearing despite due notice, the case, on motion of
respondent Planas, was considered submitted for decision. On
November 26, 1981, the trial court rendered a decision, the
dispositive portion of which reads:
WHEREFORE, judgment is hereby accordingly rendered ordering
defendants and all persons holding or claiming under them to
immediately vacate the house located at No. 1866 Int. I Oroquieta
Street, Sta. Cruz, Manila, subject of this action and restore possession
thereof to the plaintiff and to pay to the latter;
1. The sum of P1,000.00 as and for attorney's fees; and
2. The costs of suit.
After the decision had become final and executory, Planas filed a
motion for execution and the same was granted by the court.
Execution of the judgment was however restrained by the Regional
Trial Court of Manila upon the filing by petitioners of a petition for
certiorari and prohibition with preliminary injunction, wherein they
assailed the said decision on ground of lack of jurisdiction, allegedly
arising from failure of respondent Planas to submit the dispute to the
Barangay Lupon for conciliation as required by P.D. 1508.
After due hearing, the Regional Trial Court handed down a decision
declaring the judgment of the trial court null and void for having been
rendered without jurisdiction. Having found that "the parties in the
case are residents not only of the same city, but of the same
barangay, i.e., Bgy. 336, Zone 34, District 2, City of Manila," the court
ruled:
Like the court of origin, this court is equally barren of jurisdiction to
take cognizance of the subject controversy which was prematurely
filed with the city court, even before it could be referred to the
barangay authorities for conciliation as explicitly required under P.D.
1508, something the private respondent admittedly failed to do. The
failure to allow the LUPON to act on the controversy at bar prior to the
institution of the instant ejectment case did render the city court, and
even this court, devoid of competence and jurisdiction to pass upon
the present complaint of private respondent. There is, therefore, no
recourse left but to dismiss it, without prejudice to refiling it after due
observance of the formalities prescribed by law on the matter.
Reconsideration of the decision having been denied, respondent
Planas appealed to the Intermediate Appellate Court, which on July
12, 1982 promulgated a decision vacating the judgment of the
Regional Trial Court, thus confirming the decision of the City Court of

Manila. Unable to obtain a reconsideration thereof, petitioners filed
the instant petition before this Court.
The petition is devoid of merit.
In disputes covered by P.D. 1508, as in the case at bar, the barangay
conciliation process is a pre-condition for the filing of an action in
court. This is so provided by Section 6 of the said law:
Section 6. Conciliation, pre-condition to filing of complaint. No
complaint, petition, action or proceeding involving any matter within
the authority of the Lupon as provided in Section 2 hereof shall be
filed or instituted in Court or any other government office for
adjudication unless there has been a confrontation of the parties
before the Lupon Chairman or Pangkat and no conciliation or
settlement had been reached as certified by the Lupon Secretary or
the Pangkat Secretary attested by the Lupon or Pangkat Chairman or
unless the settlement has been repudiated. ...
There is no dispute that prior to the filing of the complaint, the case
was never referred to the Barangay Lupon for conciliation. In fact,
respondent Planas failed to allege in his complaint compliance with
this condition precedent. But is this omission fatal?
Ordinarily, non-compliance with the condition precedent prescribed
by P.D. 1508 could affect the sufficiency of the plaintiff's cause of
action and make his complaint vulnerable to dismissal on ground of
lack of cause of action or prematurity; 1 but the same would not
prevent a court of competent jurisdiction from exercising its power of
adjudication over the case before it, where the defendants, as in this
case, failed to object to such exercise of jurisdiction in their answer
and even during the entire proceedings a quo.
While petitioners could have prevented the trial court from exercising
jurisdiction over the case by seasonably taking exception thereto,
they instead invoked the very same jurisdiction by filing an answer
and seeking affirmative relief from it. What is more, they participated
in the trial of the case by cross-examining respondent Planas. Upon
this premise, petitioners cannot now be allowed belatedly to adopt an
inconsistent posture by attacking the jurisdiction of the court to which
they had submitted themselves voluntary. As this Court ruled in Tijam
vs. Sibonghanoy: 2
2
. . . . . . . a party cannot invoke the jurisdiction of a court to secure
affirmative relief against his opponent and, after obtaining or failing
to obtain such relief, repudiate or question that same jurisdiction
(Dean vs. Dean, 136 Or. 694, 86, A.L.R. 79).
In the case just cited, by way of explaining the rule, it was further said
that the question whether the court had jurisdiction either of the
subject-matter of the action or the parties was not important in such
cases because the party is barred from such conduct not because the
judgment or order of the court is valid and conclusive as an
adjudication, but for the reason that such a practice can not be
tolerated obviously for reasons of public policy.
Furthermore, it has also been held that after voluntarily submitting a
cause and encountering an adverse decision on the merits, it is too
late for the loser to question the jurisdiction or power of the
court . . . . And in Littleton vs. Burges, 16 Wyo. 58, the Court said that
it is not right for a party who has affirmed and invoked the jurisdiction
of a court in a particular matter to secure an affirmative relief, to
afterwards deny that same jurisdiction to escape a penalty.
WHEREFORE, the petition is hereby dismissed and the decision of the
respondent Intermediate Appellate Court in AC-G.R.-SP-00342 is
hereby affirmed. Costs against petitioners.
SO ORDERED.
Fernando, C.J., Teehankee, Makasiar, Aquino, Concepcion, Jr.,
Guerrero, De Castro, Melencio-Herrera, Plana, Relova and Gutierrez,
Jr., JJ., concur.
Separate Opinions
ABAD SANTOS, J., concurring:
A simple ejectment case has gone all the way to this Court and
assigned not to a Division thereof but to the Banc on what appears to
be a legal question of some novelty but which to me does not deserve
the treatment accorded to it. I think it is enough that the case has
gone before the City Court, the Court of First Instance and the Court
of Appeals. But having reached this Court and for this Court only to
affirm the decision of the Court of Appeals, a simple denial of the
petition instead of the full treatment given to it would have been
sufficient and more appropriate.
 3

Separate Opinions

ABAD SANTOS, J., concurring:

A simple ejectment case has gone all the way to this Court and
assigned not to a Division thereof but to the Banc on what appears to
be a legal question of some novelty but which to me does not deserve
the treatment accorded to it. I think it is enough that the case has
gone before the City Court, the Court of First Instance and the Court
of Appeals. But having reached this Court and for this Court only to
affirm the decision of the Court of Appeals, a simple denial of the
petition instead of the full treatment given to it would have been
sufficient and more appropriate.

2. G.R. No. 149266, March 17, 2006
BENJAMIN AND ROSENDA ESPINO, Petitioners versus CARMITA
LEGARDA,
Respondent.
Before us is a Petition for Review on Certiorari[1] assailing the
Decision[2] of the Court of Appeals dated May 10, 2001 and its
Resolution dated July 27, 2001 in CA-G.R. CV No. 54196, entitled
CARMITA LEGARDA, plaintiff-appellee, v. JAIME ABEJA, together with all
persons claiming rights under him, defendant, BENJAMIN AND
ROSENDA ESPINO, defendants-appellants.
On August 1, 1986, Carmita Legarda, respondent, filed with the
Regional Trial Court, Manila, three separate complaints[3] for accion
publiciana[4] against Benjamin Espino, Rosenda Espino, petitioners,
and Jaime Abeja. Respondent alleged that she is the owner of three
lots[5] situated on Altura St., Sta. Mesa, Manila. Petitioners
clandestinely entered the premises and constructed their houses
thereon without the knowledge and consent of her late father, Benito
F. Legarda. Despite demand, petitioners refused to vacate the
premises and remove their improvements. Respondent reported the
matter to Barangay Chairman Epifania Atienza, but petitioners
ignored the summonses issued to them. Respondent prayed that
petitioners be ordered to vacate the lots and to pay reasonable
compensation for the use and occupancy of the premises.
In their separate Answers, petitioners alleged that they cannot be
evicted because the lots are covered by the Urban Land Reform Act
and, therefore, they have priority to buy the lots; that the complaints
failed to allege the dates of respondents demands to vacate; and that
respondent did not resort to conciliation proceedings before the
barangay prior to the filing of the complaints.
After the trial, the lower court rendered a Decision against
petitioners, ordering them to vacate the lots and deliver possession
thereof to respondent, remove all improvements constructed thereon,
and pay reasonable compensation for the use and occupancy of the
premises.
4
Aggrieved, petitioners, with the exception of Abeja, interposed their
joint appeal to the Court of Appeals. On May 10, 2001, the Appellate
Court promulgated its assailed Decision affirming in toto the
Decision[6] of the lower court, holding that:
Defendants-appellants vigorously assert that the case did not
undergo conciliation proceedings in violation of the provisions of
Presidential Decree No. 1508 or the Katarungang Pambarangay Law.
However, plaintiff-appellee presented as evidence a Certification from
Barangay Chairman Epifania Atienza to prove otherwise. Hence, the
act of the barangay chairman in issuing the Certification enjoys the
presumption that his official duty has been regularly performed,
absent any evidence to the contrary. Further, the defendants-
appellants did not object to the presentation of the Certification.
Neither did they question said Certification.
Petitioners filed a Motion for Reconsideration but was denied by the
Court of Appeals on July 27, 2001.[7] Hence, this Petition for Review
on Certiorari.
The main issue for our resolution is whether respondent complied
with the Katarungang Pambarangay Law[8] providing for a
conciliation before any complaint, petition, action or proceeding
involving any matter within the authority of the Lupon of the
barangay shall be filed or instituted in court.
Petitioners contend that while it is true that the complaints alleged
that the barangay chairman issued a Certification to File Action
(attached to the complaints), however, it was not identified or
marked, and worst, not offered as evidence during the trial.
Upon the other hand, respondent maintains that the Certification
need not be formally offered in evidence since it was deemed
admitted by petitioners when they failed to deny the same under oath
in their Answer.
We agree with respondent.
Records show that respondent referred the dispute to the barangay
for conciliation proceedings prior to the filing of the complaints with
 5

the lower court. In fact the Certification to File Action[9] dated June true, then barangay conciliation proceedings becomes truly
21, 1985 states: unnecessary since one of the parties to the case is a judicial person.

This is to certify that the undersigned, in her capacity as Barangay
Chairman of Barangay No. 581, Zone 57, Sampaloc, Manila, exerted
efforts within the last twelve (12) months to bring to an amicable
settlement the controversy between Miss CARMITA LEGARDA of 1011
R. Hidalgo, Quiapo, Manila and Mrs. ROSENDA ESPINO of 618 Altura
Street, Sampaloc, Manila, Mr. BENJAMIN ESPINO, also of 618 Altura
Street, Sampaloc, Manila, and Mr. JAIME ABEJA of 620 Altura Street,
Sampaloc, Manila, in respect to the occupancy of the three (3) last
named persons of Miss LEGARDAs property which makes up the sites
of the houses of said persons.
Nevertheless, no such settlement took place or was possible in view
of the repeated refusal of the same persons to meet with Miss
LEGARDA or her personal representative, Mr. ANTONIO O. SINON,
despite several summons issued to them by the undersigned.
THIS CERTIFICATION is therefore issued to serve as a basis for the
filing of the corresponding complaint or complaints by Miss CARMITA
LEGARDA.
Even assuming that respondent did not refer the dispute to the
barangay for conciliation, still, the trial court could take cognizance of
the case considering that petitioners here did not object to such lack
of conciliation during the hearing.
In Junson v. Martinez,[10] we ruled that non-compliance with the
condition precedent under Presidential Decree No. 1508 does not
prevent a court of competent jurisdiction from exercising its power of
adjudication over a case where the defendants fail to object to such
exercise of jurisdiction. But such objection should be seasonably
made before the court first taking cognizance of the complaint,[11]
and must be raised in the Answer, or in such other pleading allowed
under the Rules of Court.[12]
Evidently, respondent has satisfactorily shown that she complied with
the mandate of the law by referring the dispute to the barangay for
amicable settlement before filing her complaints with the court.

(Sgd.) Epifania Atienza.
As correctly observed by the Court of Appeals, petitioners did not
object to the presentation of the Certification to File Action during the
hearing, thus:
WHEREFORE, this Court DENIES the petition. The challenged Decision
and Resolution of the Court of Appeals in CA-G.R. CV No. 54196 are
AFFIRMED.

Defendants-appellants vigorously assert that the case did not Costs against petitioners.
undergo conciliation proceedings in violation of the provisions of P.D.
No. 1508 or the Katarungang Pambarangay Law. However, plaintiff-
appellee presented as evidence a certification from Barangay
SO ORDERED.
Chairman Epifinia Atienza to prove otherwise. Hence, the act of the
barangay chairman in issuing the certification enjoys the presumption
that his official duty has been regularly performed, absent any
evidence to the contrary. Further, the defendants-appellants did not
object to the presentation of the certification. Neither did they
question said certification. In the separate Answer of defendants-
appellants, they alleged that the owner of the property was not Don
Benito Legarda but Benito Legarda Incorporated. Assuming this to be

3. LIBRADA M. AQUINO, Petitioner versus ERNEST S. AURE,
Respondent.
G.R. No. 153567, February 18, 2008
Before this Court is a Petition for Review on Certiorari[2] under Rule
45 of the Revised Rules of Court filed by petitioner Librada M. Aquino
(Aquino), seeking the reversal and the setting aside of the Decision[3]
dated 17 October 2001 and the Resolution[4] dated 8 May 2002 of
the Court of Appeals in CA-G.R. SP No. 63733. The appellate court, in
its assailed Decision and Resolution, reversed the Decision[5] of the
Regional Trial Court (RTC) of Quezon City, Branch 88, affirming the
Decision[6] of the Metropolitan Trial Court (MeTC) of Quezon City,
Branch 32, which dismissed respondent Ernesto Aures (Aure)
complaint for ejectment on the ground, inter alia, of failure to comply
with barangay conciliation proceedings.
The subject of the present controversy is a parcel of land situated in
Roxas District, Quezon City, with an area of 449 square meters and
covered by Transfer Certificate of Title (TCT) No. 205447 registered
with the Registry of Deeds of Quezon City (subject property).
Aure and E.S. Aure Lending Investors, Inc. (Aure Lending) filed a
Complaint for ejectment against Aquino before the MeTC docketed as
Civil Case No. 17450. In their Complaint, Aure and Aure Lending
alleged that they acquired the subject property from Aquino and her
husband Manuel (spouses Aquino) by virtue of a Deed of Sale[8]
executed on 4 June 1996. Aure claimed that after the spouses Aquino
received substantial consideration for the sale of the subject property,
they refused to vacate the same.
In her Answer,[10] Aquino countered that the Complaint in Civil Case
No. 17450 lacks cause of action for Aure and Aure Lending do not
have any legal right over the subject property. Aquino admitted that
there was a sale but such was governed by the Memorandum of
Agreement[11] (MOA) signed by Aure. As stated in the MOA, Aure
shall secure a loan from a bank or financial institution in his own
name using the subject property as collateral and turn over the
proceeds thereof to the spouses Aquino. However, even after Aure
successfully secured a loan, the spouses Aquino did not receive the
proceeds thereon or benefited therefrom.
6
On 20 April 1999, the MeTC rendered a Decision in Civil Case No.
17450 in favor of Aquino and dismissed the Complaint for ejectment
of Aure and Aure Lending for non-compliance with the barangay
conciliation process, among other grounds. The MeTC observed that
Aure and Aquino are residents of the same barangay but there is no
showing that any attempt has been made to settle the case amicably
at the barangay level. The MeTC further observed that Aure Lending
was improperly included as plaintiff in Civil Case No. 17450 for it did
not stand to be injured or benefited by the suit. Finally, the MeTC
ruled that since the question of ownership was put in issue, the action
was converted from a mere detainer suit to one incapable of
pecuniary estimation which properly rests within the original exclusive
jurisdiction of the RTC. The dispositive portion of the MeTC Decision
reads:
WHEREFORE, premises considered, let this case be, as it is, hereby
ordered DISMISSED. [Aquinos] counterclaim is likewise dismissed.
On appeal, the RTC affirmed the dismissal of the Complaint on the
same ground that the dispute was not brought before the Barangay
Council for conciliation before it was filed in court. In a Decision dated
14 December 2000, the RTC stressed that the barangay conciliation
process is a conditio sine qua non for the filing of an ejectment
complaint involving residents of the same barangay, and failure to
comply therewith constitutes sufficient cause for the dismissal of the
action. The RTC likewise validated the ruling of the MeTC that the
main issue involved in Civil Case No. 17450 is incapable of pecuniary
estimation and cognizable by the RTC. Hence, the RTC ruled:
WHEREFORE, finding no reversible error in the appealed judgment, it
is hereby affirmed in its entirety.
Aures Motion for Reconsideration was denied by the RTC in an
Order[14] dated 27 February 2001.
Undaunted, Aure appealed the adverse RTC Decision with the Court of
Appeals arguing that the lower court erred in dismissing his Complaint
for lack of cause of action. Aure asserted that misjoinder of parties
was not a proper ground for dismissal of his Complaint and that the
MeTC should have only ordered the exclusion of Aure Lending as
plaintiff without prejudice to the continuation of the proceedings in
Civil Case No. 17450 until the final determination thereof. Aure further
asseverated that mere allegation of ownership should not divest the

MeTC of jurisdiction over the ejectment suit since jurisdiction over the
subject matter is conferred by law and should not depend on the
defenses and objections raised by the parties. Finally, Aure contended
that the MeTC erred in dismissing his Complaint with prejudice on the
ground of non-compliance with barangay conciliation process. He was
not given the opportunity to rectify the procedural defect by going
through the barangay mediation proceedings and, thereafter, refile
the Complaint.
On 17 October 2001, the Court of Appeals rendered a Decision,
reversing the MeTC and RTC Decisions and remanding the case to the
MeTC for further proceedings and final determination of the
substantive rights of the parties. The appellate court declared that
the failure of Aure to subject the matter to barangay conciliation is
not a jurisdictional flaw and it will not affect the sufficiency of Aures
Complaint since Aquino failed to seasonably raise such issue in her
Answer. The Court of Appeals further ruled that mere allegation of
ownership does not deprive the MeTC of jurisdiction over the
ejectment case for jurisdiction over the subject matter is conferred by
law and is determined by the allegations advanced by the plaintiff in
his complaint. Hence, mere assertion of ownership by the defendant
in an ejectment case will not oust the MeTC of its summary
jurisdiction over the same. The decretal part of the Court of Appeals
Decision reads:
WHEREFORE, premises considered, the petition is hereby GRANTED -
and the decisions of the trial courts below REVERSED and SET ASIDE.
Let the records be remanded back to the court a quo for further
proceedings for an eventual decision of the substantive rights of the
disputants.
In a Resolution dated 8 May 2002, the Court of Appeals denied the
Motion for Reconsideration interposed by Aquino for it was merely a
rehash of the arguments set forth in her previous pleadings which
were already considered and passed upon by the appellate court in its
assailed Decision.
Aquino is now before this Court via the Petition at bar raising the
following issues:
I.
7
WHETHER OR NOT NON-COMPLIANCE WITH THE BARANGAY
CONCILIATION PROCEEDINGS IS A JURISDICTIONAL DEFECT THAT
WARRANTS THE DISMISSAL OF THE COMPLAINT.
II.
WHETHER OR NOT ALLEGATION OF OWNERSHIP OUSTS THE MeTC OF
ITS JURISDICTION OVER AN EJECTMENT CASE.
The barangay justice system was established primarily as a means of
easing up the congestion of cases in the judicial courts. This could be
accomplished through a proceeding before the barangay courts
which, according to the conceptor of the system, the late Chief Justice
Fred Ruiz Castro, is essentially arbitration in character, and to make it
truly effective, it should also be compulsory. With this primary
objective of the barangay justice system in mind, it would be wholly in
keeping with the underlying philosophy of Presidential Decree No.
1508, otherwise known as the Katarungang Pambarangay Law, and
the policy behind it would be better served if an out-of-court
settlement of the case is reached voluntarily by the parties.[17]
The primordial objective of Presidential Decree No. 1508 is to reduce
the number of court litigations and prevent the deterioration of the
quality of justice which has been brought by the indiscriminate filing
of cases in the courts.[18] To ensure this objective, Section 6 of
Presidential Decree No. 1508[19] requires the parties to undergo a
conciliation process before the Lupon Chairman or the Pangkat ng
Tagapagkasundo as a precondition to filing a complaint in court
subject to certain exceptions[20] which are inapplicable to this case.
The said section has been declared compulsory in nature.[21]
Presidential Decree No. 1508 is now incorporated in Republic Act No.
7160, otherwise known as The Local Government Code, which took
effect on 1 January 1992.
The pertinent provisions of the Local Government Code making
conciliation a precondition to filing of complaints in court, read:
SEC. 412. Conciliation.- (a) Pre-condition to filing of complaint in
court. No complaint, petition, action, or proceeding involving any
matter within the authority of the lupon shall be filed or instituted
directly in court or any other government office for adjudication,
unless there has been a confrontation between the parties before the
lupon chairman or the pangkat, and that no conciliation or settlement

has been reached as certified by the lupon secretary or pangkat
secretary as attested to by the lupon chairman or pangkat chairman
or unless the settlement has been repudiated by the parties thereto.
(b) Where parties may go directly to court. The parties may go
directly to court in the following instances:
(1) Where the accused is under detention;
(2) Where a person has otherwise been deprived of personal liberty
calling for habeas corpus proceedings;
(3) Where actions are coupled with provisional remedies such as
preliminary injunction, attachment, delivery of personal property, and
support pendente lite; and
(4) Where the action may otherwise be barred by the statute of
limitations.
(c) Conciliation among members of indigenous cultural communities.
The customs and traditions of indigenous cultural communities shall
be applied in settling disputes between members of the cultural
communities.
SEC. 408. Subject Matter for Amicable Settlement; Exception Therein.
The lupon of each barangay shall have authority to bring together the
parties actually residing in the same city or municipality for amicable
settlement of all disputes except:
(a) Where one party is the government or any subdivision or
instrumentality thereof;
(b) Where one party is a public officer or employee, and the dispute
relates to the performance of his official functions;
(c) Offenses punishable by imprisonment exceeding one (1) year or
a fine exceeding Five thousand pesos (P5,000.00);
(d) Offenses where there is no private offended party;
(e) Where the dispute involves real properties located in different
cities or municipalities unless the parties thereto agree to submit their
differences to amicable settlement by an appropriate lupon;
(f) Disputes involving parties who actually reside in barangays of
different cities or municipalities, except where such barangay units
8
adjoin each other and the parties thereto agree to submit their
differences to amicable settlement by an appropriate lupon;
(g) Such other classes of disputes which the President may
determine in the interest of justice or upon the recommendation of
the Secretary of Justice.
There is no dispute herein that the present case was never referred
to the Barangay Lupon for conciliation before Aure and Aure Lending
instituted Civil Case No. 17450. In fact, no allegation of such barangay
conciliation proceedings was made in Aure and Aure Lendings
Complaint before the MeTC. The only issue to be resolved is whether
non-recourse to the barangay conciliation process is a jurisdictional
flaw that warrants the dismissal of the ejectment suit filed with the
MeTC.
Aquino posits that failure to resort to barangay conciliation makes
the action for ejectment premature and, hence, dismissible. She
likewise avers that this objection was timely raised during the pre-trial
and even subsequently in her Position Paper submitted to the MeTC.
We do not agree.
It is true that the precise technical effect of failure to comply with the
requirement of Section 412 of the Local Government Code on
barangay conciliation (previously contained in Section 5 of
Presidential Decree No. 1508) is much the same effect produced by
non-exhaustion of administrative remedies -- the complaint becomes
afflicted with the vice of pre-maturity; and the controversy there
alleged is not ripe for judicial determination. The complaint becomes
vulnerable to a motion to dismiss.[22] Nevertheless, the conciliation
process is not a jurisdictional requirement, so that non-compliance
therewith cannot affect the jurisdiction which the court has otherwise
acquired over the subject matter or over the person of the defendant.
[23]
As enunciated in the landmark case of Royales v. Intermediate
Appellate Court[24]:
Ordinarily, non-compliance with the condition precedent prescribed
by P.D. 1508 could affect the sufficiency of the plaintiff's cause of
action and make his complaint vulnerable to dismissal on ground of
lack of cause of action or prematurity; but the same would not
prevent a court of competent jurisdiction from exercising its power of

adjudication over the case before it, where the defendants, as in this
case, failed to object to such exercise of jurisdiction in their answer
and even during the entire proceedings a quo.
While petitioners could have prevented the trial court from exercising
jurisdiction over the case by seasonably taking exception thereto,
they instead invoked the very same jurisdiction by filing an answer
and seeking affirmative relief from it. What is more, they participated
in the trial of the case by cross-examining respondent Planas. Upon
this premise, petitioners cannot now be allowed belatedly to adopt an
inconsistent posture by attacking the jurisdiction of the court to which
they had submitted themselves voluntarily. x x x (Emphasis supplied.)
In the case at bar, we similarly find that Aquino cannot be allowed to
attack the jurisdiction of the MeTC over Civil Case No. 17450 after
having submitted herself voluntarily thereto. We have scrupulously
examined Aquinos Answer before the MeTC in Civil Case No. 17450
and there is utter lack of any objection on her part to any deficiency
in the complaint which could oust the MeTC of its jurisdcition.
We thus quote with approval the disquisition of the Court of Appeals:
Moreover, the Court takes note that the defendant [Aquino] herself
did not raise in defense the aforesaid lack of conciliation proceedings
in her answer, which raises the exclusive affirmative defense of
simulation. By this acquiescence, defendant [Aquino] is deemed to
have waived such objection. As held in a case of similar
circumstances, the failure of a defendant [Aquino] in an ejectment
suit to specifically allege the fact that there was no compliance with
the barangay conciliation procedure constitutes a waiver of that
defense. x x x.[25]
By Aquinos failure to seasonably object to the deficiency in the
Complaint, she is deemed to have already acquiesced or waived any
defect attendant thereto. Consequently, Aquino cannot thereafter
move for the dismissal of the ejectment suit for Aure and Aure
Lendings failure to resort to the barangay conciliation process, since
she is already precluded from doing so. The fact that Aquino raised
such objection during the pre-trial and in her Position Paper is of no
moment, for the issue of non-recourse to barangay mediation
proceedings should be impleaded in her Answer.
9
As provided under Section 1, Rule 9 of the 1997 Rules of Civil
Procedure:
Sec. 1. Defenses and objections not pleaded. Defenses and
objections not pleaded either in a motion to dismiss or in the answer
are deemed waived. However, when it appears from the pleadings or
the evidence on record that the court has no jurisdiction over the
subject matter, that there is another action pending between the
same parties for the same cause, or that the action is barred by a
prior judgment or by statute of limitations, the court shall dismiss the
claim. (Emphasis supplied.)
While the aforequoted provision applies to a pleading (specifically, an
Answer) or a motion to dismiss, a similar or identical rule is provided
for all other motions in Section 8 of Rule 15 of the same Rule which
states:
Sec. 8. Omnibus Motion. - Subject to the provisions of Section 1 of
Rule 9, a motion attacking a pleading, order, judgment, or proceeding
shall include all objections then available, and all objections not so
included shall be deemed waived.
The spirit that surrounds the foregoing statutory norm is to require
the party filing a pleading or motion to raise all available exceptions
for relief during the single opportunity so that single or multiple
objections may be avoided.[26] It is clear and categorical in Section 1,
Rule 9 of the Revised Rules of Court that failure to raise defenses and
objections in a motion to dismiss or in an answer is deemed a waiver
thereof; and basic is the rule in statutory construction that when the
law is clear and free from any doubt or ambiguity, there is no room for
construction or interpretation.[27] As has been our consistent ruling,
where the law speaks in clear and categorical language, there is no
occasion for interpretation; there is only room for application.[28]
Thus, although Aquinos defense of non-compliance with Presidential
Decree No. 1508 is meritorious, procedurally, such defense is no
longer available for failure to plead the same in the Answer as
required by the omnibus motion rule.
Neither could the MeTC dismiss Civil Case No. 17450 motu proprio.
The 1997 Rules of Civil Procedure provide only three instances when
the court may motu proprio dismiss the claim, and that is when the
pleadings or evidence on the record show that (1) the court has no
jurisdiction over the subject matter; (2) there is another cause of

action pending between the same parties for the same cause; or (3)
where the action is barred by a prior judgment or by a statute of
limitations. Thus, it is clear that a court may not motu proprio dismiss
a case on the ground of failure to comply with the requirement for
barangay conciliation, this ground not being among those mentioned
for the dismissal by the trial court of a case on its own initiative.
Aquino further argues that the issue of possession in the instant case
cannot be resolved by the MeTC without first adjudicating the
question of ownership, since the Deed of Sale vesting Aure with the
legal right over the subject property is simulated.
Again, we do not agree. Jurisdiction in ejectment cases is determined
by the allegations pleaded in the complaint. As long as these
allegations demonstrate a cause of action either for forcible entry or
for unlawful detainer, the court acquires jurisdiction over the subject
matter. This principle holds, even if the facts proved during the trial
do not support the cause of action thus alleged, in which instance the
court -- after acquiring jurisdiction -- may resolve to dismiss the action
for insufficiency of evidence.
The necessary allegations in a Complaint for ejectment are set forth
in Section 1, Rule 70 of the Rules of Court, which reads:
SECTION 1. Who may institute proceedings, and when. Subject to the
provisions of the next succeeding section, a person deprived of the
possession of any land or building by force, intimidation, threat,
strategy, or stealth, or a lessor, vendor, vendee, or other person
against whom the possession of any land or building is unlawfully
withheld after the expiration or termination of the right to hold
possession, by virtue of any contract, express or implied, or the legal
representatives or assigns of any such lessor, vendor, vendee, or
other person may at any time within one (1) year after such unlawful
deprivation or withholding of possession, bring an action in the proper
Municipal Trial Court against the person or persons unlawfully
withholding or depriving of possession, or any person or persons
claiming under them, for the restitution of such possession, together
with damages and costs.
In the case at bar, the Complaint filed by Aure and Aure Lending on 2
April 1997, alleged as follows:
10
2. [Aure and Aure Lending] became the owners of a house and lot
located at No. 37 Salazar Street corner Encarnacion Street, B.F.
Homes, Quezon City by virtue of a deed of absolute sale executed by
[the spouses Aquino] in favor of [Aure and Aure Lending] although
registered in the name of x x x Ernesto S. Aure; title to the said
property had already been issued in the name of [Aure] as shown by a
transfer Certificate of Title , a copy of which is hereto attached and
made an integral part hereof as Annex A;
3. However, despite the sale thus transferring ownership of the
subject premises to [Aure and Aure Lending] as above-stated and
consequently terminating [Aquinos] right of possession over the
subject property, [Aquino] together with her family, is continuously
occupying the subject premises notwithstanding several demands
made by [Aure and Aure Lending] against [Aquino] and all persons
claiming right under her to vacate the subject premises and surrender
possession thereof to [Aure and Aure Lending] causing damage and
prejudice to [Aure and Aure Lending] and making [Aquinos]
occupancy together with those actually occupying the subject
premises claiming right under her, illegal.[29]
It can be inferred from the foregoing that Aure, together with Aure
Lending, sought the possession of the subject property which was
never surrendered by Aquino after the perfection of the Deed of Sale,
which gives rise to a cause of action for an ejectment suit cognizable
by the MeTC. Aures assertion of possession over the subject property
is based on his ownership thereof as evidenced by TCT No. 156802
bearing his name. That Aquino impugned the validity of Aures title
over the subject property and claimed that the Deed of Sale was
simulated should not divest the MeTC of jurisdiction over the
ejectment case.[30]
As extensively discussed by the eminent jurist Florenz D. Regalado in
Refugia v. Court of Appeals[31]:
As the law on forcible entry and unlawful detainer cases now stands,
even where the defendant raises the question of ownership in his
pleadings and the question of possession cannot be resolved without
deciding the issue of ownership, the Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial Courts nevertheless
have the undoubted competence to resolve the issue of ownership
albeit only to determine the issue of possession.
 11

x x x. The law, as revised, now provides instead that when the SO ORDERED.
question of possession cannot be resolved without deciding the issue
of ownership, the issue of ownership shall be resolved only to
determine the issue of possession. On its face, the new Rule on
Summary Procedure was extended to include within the jurisdiction of
the inferior courts ejectment cases which likewise involve the issue of
ownership. This does not mean, however, that blanket authority to
adjudicate the issue of ownership in ejectment suits has been thus
conferred on the inferior courts.

At the outset, it must here be stressed that the resolution of this

particular issue concerns and applies only to forcible entry and
unlawful detainer cases where the issue of possession is intimately
intertwined with the issue of ownership. It finds no proper application
where it is otherwise, that is, where ownership is not in issue, or
where the principal and main issue raised in the allegations of the
complaint as well as the relief prayed for make out not a case for
ejectment but one for recovery of ownership.

Apropos thereto, this Court ruled in Hilario v. Court of Appeals[32]:

Thus, an adjudication made therein regarding the issue of ownership

should be regarded as merely provisional and, therefore, would not
bar or prejudice an action between the same parties involving title to
the land. The foregoing doctrine is a necessary consequence of the
nature of forcible entry and unlawful detainer cases where the only
issue to be settled is the physical or material possession over the real
property, that is, possession de facto and not possession de jure.

In other words, inferior courts are now conditionally vested with

adjudicatory power over the issue of title or ownership raised by the
parties in an ejectment suit. These courts shall resolve the question of
ownership raised as an incident in an ejectment case where a
determination thereof is necessary for a proper and complete
adjudication of the issue of possession.[33]

WHEREFORE, premises considered, the instant Petition is DENIED.

The Court of Appeals Decision dated 17 October 2001 and its
Resolution dated 8 May 2002 in CA-G.R. SP No. 63733 are hereby
AFFIRMED. Costs against the petitioner.
 12

4. G.R. No. L-44903 April 22, 1977 one. It is not always that one who is alien to the family would be
willing to suffer the inconvenience of, much less relish, the delay and
RUFINO MAGBALETA, ROMANA B. MAGBALETA, AND SUSANA G. the complications that wranglings between or among relatives more
BALDOVI, petitioners, vs.HON. ARSENIO M. GONONG AND CATALINO often than not entail. Besides, it is neither practical nor fair that the
MAGBALETA, respondents. determination of the rights of a stranger to the family Who just
happened to have innocently acquired some kind of interest in any
right or property disputed among its members should be made to
Petition for certiorari, Prohibition and mandamus, with preliminary depend on the way the latter would settle their differences among
injunction, against the orders of respondent judge in (Civil Case No. themselves. We find no cause in the reason for being of the provisions
633-IV of the Court of First Instance of Ilocos Norte dated August 31, relied upon by petitioners to give it broader scope than the literal
1916 and October 8, 1976 denying petitioners' motion to dismiss the import thereof warrants.
complaint filed against them notwithstanding that private respondent
is the brother of petitioner Rufino Magbaleta, the husband of the
other petitioner Romana B. Magbaleta, and the suit is to have a parcel WHEREFORE, the petition is dismissed and the restraining order
of land, covered by a Free Patent Title in the name of Rufino, declared issued on November 3, 1976 is hereby lifted. Costs against
to be the property of private respondent, who claims in said complaint petitioners.
that the third petitioner Susana G. Baldovi is trying to take possession
of said land from his representative, contending she had bought the
same from the spouses Rufino and Romana, said orders having been
issued allegedly in violation of Article 222 of the Civil Code and
Section 1 of Rule 16 of the Rules of Court, there being no allegation in
respondent's complaint that his suit, being between members of the
same family, earnest efforts towards a compromise have been made
before the same was filed.

Respondent judge premised his refusal to dismiss the complaint upon

the sole ground that one of the defendants, petitioner Susana G.
Baldovi, the alleged buyer of the land in dispute, is a stranger. hence
the legal provisions abovementioned do not apply.

The Court holds that this ruling of respondent judge is correct. While
indeed, as pointed out by the Code Commission "it is difficult to
imagine a sadder and more tragic spectacle than a litigation between
members of the same family" hence, "it is necessary that every effort
should be made toward a compromise before a litigation is allowed to
breed hate and passion in the family" and "it is known that a lawsuit
between close relatives generates deeper bitterness than between
strangers" (Report of the Code Commission, p. 18), these
considerations do not, however, weigh enough to make it imperative
that such efforts to compromise should be a jurisdictional pre-
requisite for the maintenance of an action whenever a stranger to the
family is a party thereto, whether as a necessary or indispensable

5. G.R. NO. 154132 August 31, 2006
HIYAS SAVINGS and LOAN BANK, INC. versus AUSTRIA-MARTINEZ,
Respondent.
Before the Court is a petition for certiorari under Rule 65 of the Rules
of Court seeking to nullify the Orders[1] of the Regional Trial Court
(RTC) of Caloocan City, Branch 122, dated November 8, 2001[2] and
May 7, 2002[3] denying herein petitioners Motion to Dismiss and
Motion for Partial Reconsideration, respectively.
The antecedent facts are as follows:
On November 24, 2000, Alberto Moreno (private respondent) filed
with the RTC of Caloocan City a complaint against Hiyas Savings and
Loan Bank, Inc. (petitioner), his wife Remedios, the spouses Felipe
and Maria Owe and the Register of Deeds of Caloocan City for
cancellation of mortgage contending that he did not secure any loan
from petitioner, nor did he sign or execute any contract of mortgage
in its favor; that his wife, acting in conspiracy with Hiyas and the
spouses Owe, who were the ones that benefited from the loan, made
it appear that he signed the contract of mortgage; that he could not
have executed the said contract because he was then working
abroad.[4]
On May 17, 2001, petitioner filed a Motion to Dismiss on the ground
that private respondent failed to comply with Article 151 of the Family
Code wherein it is provided that no suit between members of the
same family shall prosper unless it should appear from the verified
complaint or petition that earnest efforts toward a compromise have
been made, but that the same have failed. Petitioner contends that
since the complaint does not contain any fact or averment that
earnest efforts toward a compromise had been made prior to its
institution, then the complaint should be dismissed for lack of cause
of action.[5]
Private respondent filed his Comment on the Motion to Dismiss with
Motion to Strike Out and to Declare Defendants in Default. He argues
that in cases where one of the parties is not a member of the same
family as contemplated under Article 150 of the Family Code, failure
to allege in the complaint that earnest efforts toward a compromise
13
had been made by the plaintiff before filing the complaint is not a
ground for a motion to dismiss. Alberto asserts that since three of the
party-defendants are not members of his family the ground relied
upon by Hiyas in its Motion to Dismiss is inapplicable and unavailable.
Alberto also prayed that defendants be declared in default for their
failure to file their answer on time.[6]
Petitioner filed its Reply to the Comment with Opposition to the
Motion to Strike and to Declare Defendants in Default.[7] Private
respondent, in turn, filed his Rejoinder.[8]
On November 8, 2001, the RTC issued the first of its assailed Orders
denying the Motion to Dismiss, thus:
The court agrees with plaintiff that earnest efforts towards a
compromise is not required before the filing of the instant case
considering that the above-entitled case involves parties who are
strangers to the family. As aptly pointed out in the cases cited by
plaintiff, Magbaleta v. G[o]nong, L-44903, April 25, 1977 and Mendez
v. [B]iangon, L-32159, October 28, 1977, if one of the parties is a
stranger, failure to allege in the complaint that earnest efforts
towards a compromise had been made by plaintiff before filing the
complaint, is not a ground for motion to dismiss.
Insofar as plaintiffs prayer for declaration of default against
defendants, the same is meritorious only with respect to defendants
Remedios Moreno and the Register of Deeds of Kaloocan City. A
declaration of default against defendant bank is not proper
considering that the filing of the Motion to Dismiss by said defendant
operates to stop the running of the period within which to file the
required Answer.[9]
Petitioner filed a Motion for Partial Reconsideration.[10] Private
respondent filed his Comment,[11] after which petitioner filed its
Reply.[12] Thereafter, private respondent filed his Rejoinder.[13]
On May 7, 2002, the RTC issued the second assailed Order denying
petitioners Motion for Partial Reconsideration. The trial court ruled:
Reiterating the resolution of the court, dated November 8, 2001,
considering that the above-entitled case involves parties who are
strangers to the family, failure to allege in the complaint that earnest
efforts towards a compromise were made by plaintiff, is not a ground
for a Motion to Dismiss.

Additionally, the court agrees with plaintiff that inasmuch as it is
defendant Remedios Moreno who stands to be benefited by Art. 151
of the Family Code, being a member of the same family as that of
plaintiff, only she may invoke said Art. 151.[14]
xxx
Hence, the instant Petition for Certiorari on the following grounds:
I. Public respondent committed grave abuse of discretion amounting to lack
or in excess of jurisdiction when he ruled that lack of earnest efforts toward a
compromise is not a ground for a motion to dismiss in suits between husband
and wife when other parties who are strangers to the family are involved in
the suit. Corollarily, public respondent committed grave abuse of discretion
amounting to lack or in excess of jurisdiction when he applied the decision in
the case of Magbaleta v. Gonong instead of the ruling in the case of De
Guzman v. Genato.
II. Public respondent committed grave abuse of discretion amounting to lack
or in excess of jurisdiction when he ruled that a party who is a stranger to the
family of the litigants could not invoke lack of earnest efforts toward a
compromise as a ground for the dismissal of the complaint.[15]
At the outset, the Court notes that the instant Petition for Certiorari
should have been filed with the Court of Appeals (CA) and not with
this Court pursuant to the doctrine of hierarchy of courts. Reiterating
the established policy for the strict observance of this doctrine, this
Court held in Heirs of Bertuldo Hinog v. Melicor[16] that:
Although the Supreme Court, Court of Appeals and the Regional Trial
Courts have concurrent jurisdiction to issue writs of certiorari,
prohibition, mandamus, quo warranto, habeas corpus and injunction,
such concurrence does not give the petitioner unrestricted freedom of
choice of court forum. As we stated in People v. Cuaresma:
This Court's original jurisdiction to issue writs of certiorari is not
exclusive. It is shared by this Court with Regional Trial Courts and
with the Court of Appeals. This concurrence of jurisdiction is not,
however, to be taken as according to parties seeking any of the writs
an absolute, unrestrained freedom of choice of the court to which
application therefor will be directed. There is after all a hierarchy of
courts. That hierarchy is determinative of the venue of appeals, and
also serves as a general determinant of the appropriate forum for
petitions for the extraordinary writs. A becoming regard for that
judicial hierarchy most certainly indicates that petitions for the
14
issuance of extraordinary writs against first level (inferior) courts
should be filed with the Regional Trial Court, and those against the
latter, with the Court of Appeals. A direct invocation of the Supreme
Courts original jurisdiction to issue these writs should be allowed only
when there are special and important reasons therefor, clearly and
specifically set out in the petition. This is [an] established policy. It is
a policy necessary to prevent inordinate demands upon the Courts
time and attention which are better devoted to those matters within
its exclusive jurisdiction, and to prevent further over-crowding of the
Courts docket.
The rationale for this rule is two-fold: (a) it would be an imposition
upon the precious time of this Court; and (b) it would cause an
inevitable and resultant delay, intended or otherwise, in the
adjudication of cases, which in some instances had to be remanded or
referred to the lower court as the proper forum under the rules of
procedure, or as better equipped to resolve the issues because this
Court is not a trier of facts.
Thus, this Court will not entertain direct resort to it unless the redress
desired cannot be obtained in the appropriate courts, and exceptional
and compelling circumstances, such as cases of national interest and
of serious implications, justify the availment of the extraordinary
remedy of writ of certiorari, calling for the exercise of its primary
jurisdiction. Exceptional and compelling circumstances were held
present in the following cases: (a) Chavez vs. Romulo on citizens right
to bear arms; (b) Government of the United States of America vs.
Purganan on bail in extradition proceedings; (c) Commission on
Elections vs. Quijano-Padilla on government contract involving
modernization and computerization of voters registration list; (d)
Buklod ng Kawaning EIIB vs. Zamora on status and existence of a
public office; and (e) Fortich vs. Corona on the so-called Win-Win
Resolution of the Office of the President which modified the approval
of the conversion to agro-industrial area.[17]
In the present case, petitioner failed to advance a satisfactory
explanation as to its failure to comply with the principle of judicial
hierarchy. There is no reason why the instant petition could not have
been brought before the CA. On this basis, the instant petition should
be dismissed.

And even if this Court passes upon the substantial issues raised by
petitioner, the instant petition likewise fails for lack of merit.
Restating its arguments in its Motion for Partial Reconsideration,
petitioner argues that what is applicable to the present case is the
Courts decision in De Guzman v. Genato[18] and not in Magbaleta v.
Gonong,[19] the former being a case involving a husband and wife
while the latter is between brothers.
The Court is not persuaded.
Article 151 of the Family Code provides as follows:
No suit between members of the same family shall prosper unless it
should appear from the verified complaint or petition that earnest
efforts toward a compromise have been made, but that the same
have failed. If it is shown that no such efforts were in fact made, the
case must be dismissed.
This rule shall not apply to cases which may not be the subject of
compromise under the Civil Code.
Article 222 of the Civil Code from which Article 151 of the Family
Code was taken, essentially contains the same provisions, to wit:
No suit shall be filed or maintained between members of the same
family unless it should appear that earnest efforts toward a
compromise have been made, but that the same have failed, subject
to the limitations in Article 2035.[20]
The Code Commission that drafted Article 222 of the Civil Code from
which Article 151 of the Family Code was taken explains:
[I]t is difficult to imagine a sadder and more tragic spectacle than a
litigation between members of the same family. It is necessary that
every effort should be made toward a compromise before a litigation
is allowed to breed hate and passion in the family. It is known that a
lawsuit between close relatives generates deeper bitterness than
between strangers.[21]
In Magbaleta, the case involved brothers and a stranger to the family,
the alleged owner of the subject property. The Court, taking into
consideration the explanation made by the Code Commision in its
report, ruled that:
15
[T]hese considerations do not, however, weigh enough to make it
imperative that such efforts to compromise should be a jurisdictional
pre-requisite for the maintenance of an action whenever a stranger to
the family is a party thereto, whether as a necessary or indispensable
one. It is not always that one who is alien to the family would be
willing to suffer the inconvenience of, much less relish, the delay and
the complications that wranglings between or among relatives more
often than not entail. Besides, it is neither practical nor fair that the
determination of the rights of a stranger to the family who just
happened to have innocently acquired some kind of interest in any
right or property disputed among its members should be made to
depend on the way the latter would settle their differences among
themselves.[22] x x x.
Hence, once a stranger becomes a party to a suit involving members
of the same family, the law no longer makes it a condition precedent
that earnest efforts be made towards a compromise before the action
can prosper.
In the subsequent case of De Guzman, the case involved spouses
and the alleged paramour of the wife. The Court ruled that due to the
efforts exerted by the husband, through the Philippine Constabulary,
to confront the wife, there was substantial compliance with the law,
thereby implying that even in the presence of a party who is not a
family member, the requirements that earnest efforts towards a
compromise have been exerted must be complied with, pursuant to
Article 222 of the Civil Code, now Article 151 of the Family Code.
While De Guzman was decided after Magbaleta, the principle
enunciated in the Magbaleta is the one that now prevails because it is
reiterated in the subsequent cases of Gonzales v. Lopez,[23] Esquivias
v. Court of Appeals,[24] Spouses Hontiveros v. Regional Trial Court,
Branch 25, Iloilo City,[25] and the most recent case of Martinez v.
Martinez.[26] Thus, Article 151 of the Family Code applies to cover
when the suit is exclusively between or among family members.
The Court finds no cogent reason why the ruling in Magbaleta as well
as in all of the aforementioned cases should not equally apply to suits
involving husband and wife.
Petitioner makes much of the fact that the present case involves a
husband and his wife while Magbaleta is a case between brothers.
However, the Court finds no specific, unique, or special circumstance
 16

that would make the ruling in Magbaleta as well as in the

abovementioned cases inapplicable to suits involving a husband and
his wife, as in the present case. In the first place, Article 151 of the
Family Code and Article 222 of the Civil Code are clear that the
provisions therein apply to suits involving members of the same
family as contemplated under Article 150 of the Family Code, to wit:

ART. 150. Family relations include those:

(1) Between husband and wife;

(2) Between parents and children;

(3) Among other ascendants and descendants; and

(4) Among brothers and sisters, whether of the full or half blood.

and Article 217 of the Civil Code, to wit: ART. 217. Family relations
shall include those:
(1) Between husband and wife;

(2) Between parent and child;

(3) Among other ascendants and their descendants;

(4) Among brothers and sisters.

Petitioner also contends that the trial court committed grave abuse of
discretion when it ruled that petitioner, not being a member of the same
family as respondent, may not invoke the provisions of Article 151 of the
Family Code.

Suffice it to say that since the Court has ruled that the requirement under
Article 151 of the Family Code is applicable only in cases which are
exclusively between or among members of the same family, it necessarily
follows that the same may be invoked only by a party who is a member of
that same family.

WHEREFORE, the instant Petition for Certiorari is DISMISSED for lack of merit.

Costs against petitioner. SO ORDERED.


6. G.R. No. 185922 January 15, 2014
HEIRS OF DR. MARIANO FAVIS SR. represented by their co-heirs and
Attorneys-in-Fact MERCEDES A. FAVIS and NELLY FAVIS- VILLAFUERTE,
Petitioners,
vs.
JUANA GONZALES, her son MARIANO G. FAVIS, MA. THERESA JOANA D.
FAVIS, JAMES MARK D. FAVIS, all minors represented herein by their
parents SPS. MARIANO FAVIS and LARCELITA D. FAVIS, Respondents.
Before this Court is a petition for review assailing the 10 April 2008
Decision1 and 7 January 2009 Resolution2 of the Court of Appeals in
CA-G.R. CV No. 86497 dismissing petitioners complaint for annulment
of the Deed of Donation for failure to exert earnest efforts towards a
compromise.
Dr. Mariano Favis, Sr. (Dr. Favis) was married to Capitolina Aguilar
(Capitolina) with whom he had seven children named Purita A. Favis,
Reynaldo Favis, Consolacion Favis-Queliza, Mariano A. Favis, Jr., Esther
F. Filart, Mercedes A. Favis, and Nelly Favis-Villafuerte. When
Capitolina died in March 1944, Dr. Favis took Juana Gonzales (Juana)
as his common-law wife with whom he sired one child, Mariano G.
Favis (Mariano). When Dr. Favis and Juana got married in 1974, Dr.
Favis executed an affidavit acknowledging Mariano as one of his
legitimate children. Mariano is married to Larcelita D. Favis (Larcelita),
with whom he has four children, named Ma. Theresa Joana D. Favis,
Ma. Cristina D. Favis, James Mark D. Favis and Ma. Thea D. Favis.
Dr. Favis died intestate on 29 July 1995 leaving the following
properties:
1. A parcel of residential land located at Bonifacio St. Brgy. 1, Vigan,
Ilocos Sur, consisting an area of 898 square meters, more or less,
bounded on the north by Salvador Rivero; on the East by Eleutera
Pena; on the South by Bonifacio St., and on the West by Carmen
Giron; x x x;
2. A commercial building erected on the aforesaid parcel of land with
an assessed value of P126,000.00; x x x;
3. A parcel of residential land located in Brgy. VII, Vigan, Ilocos Sur,
containing an area of 154 sq. ms., more or less, bounded on the North
17
by the High School Site; on the East by Gomez St., on the South by
Domingo [G]o; and on the West by Domingo Go; x x x;
4. A house with an assessed value of P17,600.00 x x x;
5. A parcel of orchard land located in Brgy. VI, Vigan, Ilocos Sur,
containing an area of 2,257 sq. ma. (sic) more or less, bounded on the
North by Lot 1208; on the East by Mestizo River; on the South by Lot
1217 and on the West by Lot 1211-B, 1212 and 1215 x x x.3
Beginning 1992 until his death in 1995, Dr. Favis was beset by various
illnesses, such as kidney trouble, hiatal hernia, congestive heart
failure, Parkinsons disease and pneumonia. He died of
"cardiopulmonary arrest secondary to multi-organ/system failure
secondary to sepsis secondary to pneumonia."4
On 16 October 1994, he allegedly executed a Deed of Donation5
transferring and conveying properties described in (1) and (2) in favor
of his grandchildren with Juana.
Claiming that said donation prejudiced their legitime, Dr. Favis
children with Capitolina, petitioners herein, filed an action for
annulment of the Deed of Donation, inventory, liquidation and
partition of property before the Regional Trial Court (RTC) of Vigan,
Ilocos Sur, Branch 20 against Juana, Spouses Mariano and Larcelita
and their grandchildren as respondents.
In their Answer with Counterclaim, respondents assert that the
properties donated do not form part of the estate of the late Dr. Favis
because said donation was made inter vivos, hence petitioners have
no stake over said properties.6
The RTC, in its Pre-Trial Order, limited the issues to the validity of the
deed of donation and whether or not respondent Juana and Mariano
are compulsory heirs of Dr. Favis.7
In a Decision dated 14 November 2005, the RTC nullified the Deed of
Donation and cancelled the corresponding tax declarations. The trial
court found that Dr. Favis, at the age of 92 and plagued with illnesses,
could not have had full control of his mental capacities to execute a
valid Deed of Donation. Holding that the subsequent marriage of Dr.
Favis and Juana legitimated the status of Mariano, the trial court also
declared Juana and Mariano as compulsory heirs of Dr. Favis. The
dispositive portion reads:WHEREFORE, in view of all the foregoing

considerations, the Deed of Donation dated October 16, 1994 is
hereby annulled and the corresponding tax declarations issued on the
basis thereof cancelled. Dr. Mariano Favis, Sr. having died without a
will, his estate would result to intestacy. Consequently, plaintiffs Heirs
of Dr. Mariano Favis, Sr., namely Purita A. Favis, Reynaldo A. Favis,
Consolacion F. Queliza, Mariano A. Favis, Jr., Esther F. Filart, Mercedes
A. Favis, Nelly F. Villafuerte and the defendants Juana Gonzales now
deceased and Mariano G. Favis, Jr. shall inherit in equal shares in the
estate of the late Dr. Mariano Favis, Sr. which consists of the following:
1. A parcel of residential land located at Bonifacio St. Brgy. 1, Vigan
City, Ilocos Sur, consisting an area of 89 sq. meters more or less,
bounded on the north by Salvador Rivero; on the East by Eleutera
Pena; on the South by Bonifacio St., and on the West by Carmen
Giron;
2. A commercial building erected on the aforesaid parcel of land with
an assessed value of P126,000.00;
3. One-half (1/2) of the house located in Brgy. VI, Vigan City, Ilocos
Sur[,] containing an area of 2,257 sq. meters more or less, bounded
on the north by Lot 1208; on the east by Mestizo River; on the South
by Lot 1217 and on the West by Lot 1211-B, 1212 and 1215.
4. The accumulated rentals of the new Vigan Coliseum in the amount
of One Hundred Thirty [Thousand] (P130,000.00) pesos per annum
from the death of Dr. Mariano Favis, Sr.8
Respondents interposed an appeal before the Court of Appeals
challenging the trial courts nullification, on the ground of vitiated
consent, of the Deed of Donation in favor of herein respondents. The
Court of Appeals ordered the dismissal of the petitioners nullification
case. However, it did so not on the grounds invoked by herein
respondents as appellant.
The Court of Appeals motu proprio ordered the dismissal of the
complaint for failure of petitioners to make an averment that earnest
efforts toward a compromise have been made, as mandated by
Article 151 of the Family Code. The appellate court justified its order
of dismissal by invoking its authority to review rulings of the trial
court even if they are not assigned as errors in the appeal.
Petitioners filed a motion for reconsideration contending that the case
is not subject to compromise as it involves future legitime.
18
The Court of Appeals rejected petitioners contention when it ruled
that the prohibited compromise is that which is entered between the
decedent while alive and compulsory heirs. In the instant case, the
appellate court observed that while the present action is between
members of the same family it does not involve a testator and a
compulsory heir. Moreover, the appellate court pointed out that the
subject properties cannot be considered as "future legitime" but are
in fact, legitime, as the instant complaint was filed after the death of
the decedent.
Undaunted by this legal setback, petitioners filed the instant petition
raising the following arguments:
1. The Honorable Court of Appeals GRAVELY and SERIOUSLY ERRED in
DISMISSING the COMPLAINT.
2. Contrary to the finding of the Honorable Court of Appeals, the
verification of the complaint or petition is not a mandatory
requirement.
3. The Honorable Court of Appeals seriously failed to appreciate that
the filing of an intervention by Edward Favis had placed the case
beyond the scope of Article 151 of the Family Code.
4. Even assuming arguendo without admitting that the filing of
intervention by Edward Favis had no positive effect to the complaint
filed by petitioners, it is still a serious error for the Honorable Court of
Appeals to utterly disregard the fact that petitioners had substantially
complied with the requirements of Article 151 of the Family Code.
5. Assuming arguendo that petitioners cannot be construed as
complying substantially with Article 151 of the Family Code, still, the
same should be considered as a non-issue considering that private
respondents are in estoppel.
6. The dismissal of the complaint by the Honorable Court of Appeals
amounts to grave abuse of discretion amounting to lack and excess of
jurisdiction and a complete defiance of the doctrine of primacy of
substantive justice over strict application of technical rules.
7. The Honorable Court of Appeals gravely and seriuosly erred in not
affirming the decision of the Court a quo that the Deed of Donation is
void.9

In their Comment, respondents chose not to touch upon the merits of
the case, which is the validity of the deed of donation. Instead,
respondents defended the ruling the Court of Appeals that the
complaint is dismissible for failure of petitioners to allege in their
complaint that earnest efforts towards a compromise have been
exerted.
The base issue is whether or not the appellate court may dismiss the
order of dismissal of the complaint for failure to allege therein that
earnest efforts towards a compromise have been made. The appellate
court committed egregious error in dismissing the complaint. The
appellate courts decision hinged on Article 151 of the Family Code,
viz:
Art. 151. No suit between members of the same family shall prosper
unless it should appear from the verified complaint or petition that
earnest efforts toward a compromise have been made, but that the
same have failed. If it is shown that no such efforts were in fact made,
the case must be dismissed.
This rule shall not apply to cases which may not be the subject of
compromise under the Civil Code.
The appellate court correlated this provision with Section 1, par. (j),
Rule 16 of the 1997 Rules of Civil Procedure, which provides:
Section 1. Grounds. Within the time for but before filing the answer
to the complaint or pleading asserting a claim, a motion to dismiss
may be made on any of the following grounds:
xxxx
(j) That a condition precedent for filing the claim has not been
complied with.
The appellate courts reliance on this provision is misplaced. Rule 16
treats of the grounds for a motion to dismiss the complaint. It must be
distinguished from the grounds provided under Section 1, Rule 9
which specifically deals with dismissal of the claim by the court motu
proprio. Section 1, Rule 9 of the 1997 Rules of Civil Procedure
provides:
Section 1. Defenses and objections not pleaded. Defenses and
objections not pleaded either in a motion to dismiss or in the answer
19
are deemed waived. However, when it appears from the pleadings or
the evidence on record that the court has no jurisdiction over the
subject matter, that there is another action pending between the
same parties for the same cause, or that the action is barred by a
prior judgment or by statute of limitations, the court shall dismiss the
claim.
Section 1, Rule 9 provides for only four instances when the court may
motu proprio dismiss the claim, namely: (a) lack of jurisdiction over
the subject matter; (b) litis pendentia ; (c) res judicata ; and (d)
prescription of action.10 Specifically in Gumabon v. Larin,11 cited in
Katon v. Palanca, Jr.,12 the Court held:
x x x [T]he motu proprio dismissal of a case was traditionally limited
to instances when the court clearly had no jurisdiction over the
subject matter and when the plaintiff did not appear during trial,
failed to prosecute his action for an unreasonable length of time or
neglected to comply with the rules or with any order of the court.
Outside of these instances, any motu proprio dismissal would amount
to a violation of the right of the plaintiff to be heard. Except for
qualifying and expanding Section 2, Rule 9, and Section 3, Rule 17, of
the Revised Rules of Court, the amendatory 1997 Rules of Civil
Procedure brought about no radical change. Under the new rules, a
court may motu proprio dismiss a claim when it appears from the
pleadings or evidence on record that it has no jurisdiction over the
subject matter; when there is another cause of action pending
between the same parties for the same cause, or where the action is
barred by a prior judgment or by statute of limitations. x x x.13
The error of the Court of Appeals is evident even if the consideration
of the issue is kept within the confines of the language of Section 1(j)
of Rule 16 and Section 1 of Rule 9. That a condition precedent for
filing the claim has not been complied with, a ground for a motion to
dismiss emanating from the law that no suit between members from
the same family shall prosper unless it should appear from the
verified complaint that earnest efforts toward a compromise have
been made but had failed, is, as the Rule so words, a ground for a
motion to dismiss. Significantly, the Rule requires that such a motion
should be filed "within the time for but before filing the answer to the
complaint or pleading asserting a claim." The time frame indicates
that thereafter, the motion to dismiss based on the absence of the
condition precedent is barred. It is so inferable from the opening

sentence of Section 1 of Rule 9 stating that defense and objections
not pleaded either in a motion to dismiss or in the answer are deemed
waived. There are, as just noted, only four exceptions to this Rule,
namely, lack of jurisdiction over the subject matter; litis pendentia ;
res judicata ; and prescription of action. Failure to allege in the
complaint that earnest efforts at a compromise has been made but
had failed is not one of the exceptions. Upon such failure, the defense
is deemed waived.
It was in Heirs of Domingo Valientes v. Ramas14 cited in P.L. Uy Realty
Corporation v. ALS Management and Development Corporation15
where we noted that the second sentence of Section 1 of Rule 9 does
not only supply exceptions to the rule that defenses not pleaded
either in a motion to dismiss or in the answer are deemed waived, it
also allows courts to dismiss cases motu propio on any of the
enumerated grounds. The tenor of the second sentence of the Rule is
that the allowance of a motu propio dismissal can proceed only from
the exemption from the rule on waiver; which is but logical because
there can be no ruling on a waived ground.
Why the objection of failure to allege a failed attempt at a
compromise in a suit among members of the same family is waivable
was earlier explained in the case of Versoza v. Versoza,16 a case for
future support which was dismissed by the trial court upon the ground
that there was no such allegation of infringement of Article 222 of the
Civil Code, the origin of Article 151 of the Family Code. While the
Court ruled that a complaint for future support cannot be the subject
of a compromise and as such the absence of the required allegation in
the complaint cannot be a ground for objection against the suit, the
decision went on to state thus:
The alleged defect is that the present complaint does not state a
cause of action. The proposed amendment seeks to complete it. An
amendment to the effect that the requirements of Article 222 have
been complied with does not confer jurisdiction upon the lower court.
With or without this amendment, the subject-matter of the action
remains as one for support, custody of children, and damages,
cognizable by the court below.
To illustrate, Tamayo v. San Miguel Brewery, Inc.,17 allowed an
amendment which " merely corrected a defect in the allegation of
plaintiff-appellants cause of action, because as it then stood, the
20
original complaint stated no cause of action." We there ruled out as
inapplicable the holding in Campos Rueda Corporation v. Bautista,18
that an amendment cannot be made so as to confer jurisdiction on
the court x x x. (Italics supplied).
Thus was it made clear that a failure to allege earnest but failed
efforts at a compromise in a complaint among members of the same
family, is not a jurisdictional defect but merely a defect in the
statement of a cause of action. Versoza was cited in a later case as an
instance analogous to one where the conciliation process at the
barangay level was not priorly resorted to. Both were described as a
"condition precedent for the filing of a complaint in Court."19 In such
instances, the consequence is precisely what is stated in the present
Rule. Thus:
x x x The defect may however be waived by failing to make
seasonable objection, in a motion to dismiss or answer, the defect
being a mere procedural imperfection which does not affect the
jurisdiction of the court.20 (Underscoring supplied).
In the case at hand, the proceedings before the trial court ran the full
course. The complaint of petitioners was answered by respondents
without a prior motion to dismiss having been filed. The decision in
favor of the petitioners was appealed by respondents on the basis of
the alleged error in the ruling on the merits, no mention having been
made about any defect in the statement of a cause of action. In other
words, no motion to dismiss the complaint based on the failure to
comply with a condition precedent was filed in the trial court; neither
was such failure assigned as error in the appeal that respondent
brought before the Court of Appeals.
Therefore, the rule on deemed waiver of the non-jurisdictional
defense or objection is wholly applicable to respondent.1wphi1 If the
respondents as parties-defendants could not, and did not, after filing
their answer to petitioners complaint, invoke the objection of
absence of the required allegation on earnest efforts at a
compromise, the appellate court unquestionably did not have any
authority or basis to motu propio order the dismissal of petitioners
complaint.
Indeed, even if we go by the reason behind Article 151 of the Family
Code, which provision as then Article 222 of the New Civil Code was
described as "having been given more teeth"21 by Section 1(j), Rule

16 of the Rule of Court, it is safe to say that the purpose of making
sure that there is no longer any possibility of a compromise, has been
served. As cited in commentaries on Article 151 of the Family Code
This rule is introduced because it is difficult to imagine a sudden and
more tragic spectacle than a litigation between members of the same
family. It is necessary that every effort should be made towards a
compromise before a litigation is allowed to breed hate and passion in
the family. It is known that a lawsuit between close relatives
generates deeper bitterness than between strangers.22
The facts of the case show that compromise was never an option
insofar as the respondents were concerned. The impossibility of
compromise instead of litigation was shown not alone by the absence
of a motion to dismiss but on the respondents insistence on the
validity of the donation in their favor of the subject properties. Nor
could it have been otherwise because the Pre-trial Order specifically
limited the issues to the validity of the deed and whether or not
respondent Juana and Mariano are compulsory heirs of Dr. Favis.
Respondents not only confined their arguments within the pre-trial
order; after losing their case, their appeal was based on the
proposition that it was error for the trial court to have relied on the
ground of vitiated consent on the part of Dr. Favis.
The Court of Appeals ignored the facts of the case that clearly
demonstrated the refusal by the respondents to compromise. Instead
it ordered the dismissal of petitioners complaint on the ground that it
did not allege what in fact was shown during the trial. The error of the
Court of Appeals is patent.
Unfortunately for respondents, they relied completely on the
erroneous ruling of the Court of Appeals even when petitioners came
to us for review not just on the basis of such defective motu propio
action but also on the proposition that the trial court correctly found
that the donation in question is flawed because of vitiated consent.
Respondents did not answer this argument. The trial court stated that
the facts are:
x x x To determine the intrinsic validity of the deed of donation
subject of the action for annulment, the mental state/condition of the
donor Dr. Mariano Favis, Sr. at the time of its execution must be taken
into account. Factors such as his age, health and environment among
others should be considered. As testified to by Dr. Mercedes Favis,
21
corroborated by Dr. Edgardo Alday and Dra. Ofelia Adapon, who were
all presented as expert witnesses, Dr. Mariano Favis, Sr. had long been
suffering from Hiatal Hernia and Parkinsons disease and had been
taking medications for years. That a person with Parkinsons disease
for a long time may not have a good functioning brain because in the
later stage of the disease, 1/3 of death develop from this kind of
disease, and or dementia. With respect to Hiatal Hernia, this is a state
wherein organs in the abdominal cavity would go up to the chest
cavity, thereby occupying the space for the lungs causing the lungs to
be compromised. Once the lungs are affected, there is less
oxygenation to the brain. The Hernia would cause the heart not to
pump enough oxygen to the brain and the effect would be chronic,
meaning, longer lack of oxygenation to the brain will make a person
not in full control of his faculties. Dr. Alday further testified that during
his stay with the house of Dr. Mariano Favis, Sr. (1992-1994), he
noticed that the latter when he goes up and down the stairs will stop
after few seconds, and he called this pulmonary cripple a very
advanced stage wherein the lungs not only one lung, but both lungs
are compromised. That at the time he operated on the deceased, the
left and right lung were functioning but the left lung is practically not
even five (5%) percent functioning since it was occupied by
abdominal organ. x x x.
Dr. Mariano Favis, Sr. during the execution of the Deed of Donation
was already 92 years old; living with the defendants and those years
from 1993 to 1995 were the critical years when he was sick most of
the time. In short, hes dependent on the care of his housemates
particularly the members of his family. It is the contention of the
defendants though that Dr. Mariano Favis, Sr. had full control of his
mind during the execution of the Deed of Donation because at that
time, he could go on with the regular way of life or could perform his
daily routine without the aid of anybody like taking a bath, eating his
meals, reading the newspaper, watching television, go to the church
on Sundays, walking down the plaza to exercise and most importantly
go to the cockpit arena and bet. Dr. Ofelia Adapon, a neurology expert
however, testified that a person suffering from Parkinsons disease
when he goes to the cockpit does not necessarily mean that such
person has in full control of his mental faculties because anyone,
even a retarded person, a person who has not studied and have no
intellect can go to the cockpit and bet. One can do everything but do
not have control of his mind. x x x That Hiatal Hernia creeps in very
 22

insidiously, one is not sure especially if the person has not
complained and no examination was done. It could be there for the
last time and no one will know. x x x.
The Deed of Donation in favor of the defendants Ma. Theresa, Joana
D. Favis, Maria Cristina D. Favis, James Mark D. Favis and Maria Thea
D. Favis, all of whom are the children of Mariano G. Favis, Jr. was
executed on [16 October] 1994, seven (7) months after Dra. Mercedes
Favis left the house of Dr. Favis, Sr. at Bonifacio St., Vigan City, Ilocos
Sur, where she resided with the latter and the defendants.
covered all issues including the correctness of the factual findings of
the trial court. Moreover, remanding the case to the Court of Appeals
would only constitute unwarranted delay in the final disposition of the
case.
WHEREFORE, the Decision of the Court of Appeals is REVERSED and
SET ASIDE and the Judgment of the Regional Trial Court of Vigan,
Ilocos Sur, Branch 20 is AFFIRMED.

Putting together the circumstances mentioned, that at the time of the SO ORDERED.
execution of the Deed of Donation, Dr. Mariano Favis, Sr. was already
at an advanced age of 92, afflicted with different illnesses like Hiatal
hernia, Parkinsons disease and pneumonia, to name few, which
illnesses had the effects of impairing his brain or mental faculties and
the deed being executed only when Dra. Mercedes Favis had already
left his fathers residence when Dr. Mariano Favis, Sr. could have done
so earlier or even in the presence of Dra. Mercedes Favis, at the time
he executed the Deed of Donation was not in full control of his mental
faculties. That although age of senility varies from one person to
another, to reach the age of 92 with all those medications and
treatment one have received for those illnesses, yet claim that his
mind remains unimpaired, would be unusual. The fact that the Deed
of Donation was only executed after Dra. Mercedes Favis left his
father's house necessarily indicates that they don't want the same to
be known by the first family, which is an indicia of bad faith on the
part of the defendant, who at that time had influence over the
donor.23

The correctness of the finding was not touched by the Court of

Appeals. The respondents opted to rely only on what the appellate
court considered, erroneously though, was a procedural infirmity. The
trial court's factual finding, therefore, stands unreversed; and
respondents did not provide us with any argument to have it
reversed.

The issue of the validity of donation was fully litigated and discussed
by the trial court. Indeed, the trial court's findings were placed at
issue before the Court of Appeals but the appellate court chose to
confine its review to the procedural aspect. The judgment of the Court
of Appeals, even if it dealt only with procedure, is deemed to have

7. [G.R. No. 137359. September 13, 2004]
EDWIN N. TRIBIANA, petitioner, vs. LOURDES M. TRIBIANA,
respondent.
This petition for review on certiorari[1] seeks to reverse the Court of
Appeals Resolutions[2] dated 2 July 1998 and 18 January 1999 in CA-
G.R. SP No. 48049. The Court of Appeals affirmed the Order[3] of the
Regional Trial Court, Branch 19, Bacoor, Cavite (RTC), denying
petitioner Edwin N. Tribianas (Edwin) motion to dismiss the petition
for habeas corpus filed against him by respondent Lourdes Tribiana
(Lourdes).
Edwin and Lourdes are husband and wife who have lived together
since 1996 but formalized their union only on 28 October 1997. On 30
April 1998, Lourdes filed a petition for habeas corpus before the RTC
claiming that Edwin left their conjugal home with their daughter,
Khriza Mae Tribiana (Khriza). Edwin has since deprived Lourdes of
lawful custody of Khriza who was then only one (1) year and four (4)
months of age. Later, it turned out that Khriza was being held by
Edwins mother, Rosalina Tribiana (Rosalina). Edwin moved to dismiss
Lourdes petition on the ground that the petition failed to allege that
earnest efforts at a compromise were made before its filing as
required by Article 151 of the Family Code.
On 20 May 1998, Lourdes filed her opposition to Edwins motion to
dismiss claiming that there were prior efforts at a compromise, which
failed. Lourdes attached to her opposition a copy of the Certification
to File Action from their Barangay dated 1 May 1998.
On 18 May 1998, the RTC denied Edwins motion to dismiss and
reiterated a previous order requiring Edwin and his mother, Rosalina
to bring Khriza before the RTC. Upon denial of his motion for
reconsideration, Edwin filed with the Court of Appeals a petition for
prohibition and certiorari under Rule 65 of the Rules of Civil
Procedure. The appellate court denied Edwins petition on 2 July 1998.
The appellate court also denied Edwins motion for reconsideration.
Hence, this petition.
The Rulings of the RTC and the Court of Appeals
The RTC denied Edwins motion to dismiss on the ground that the
Certification to File Action attached by Lourdes to her opposition
23
clearly indicates that the parties attempted to reach a compromise
but failed.
The Court of Appeals upheld the ruling of the RTC and added that
under Section 412 (b) (2) of the Local Government Code, conciliation
proceedings before the barangay are not required in petitions for
habeas corpus.
The Issue
Edwin seeks a reversal and raises the following issue for resolution:
WHETHER THE TRIAL AND APPELLATE COURTS SHOULD HAVE
DISMISSED THE PETITION FOR HABEAS CORPUS ON THE GROUND OF
FAILURE TO COMPLY WITH THE CONDITION PRECEDENT UNDER
ARTICLE 151 OF THE FAMILY CODE.
The Ruling of the Court
The petition lacks merit.
Edwin argues that Lourdes failure to indicate in her petition for
habeas corpus that the parties exerted prior efforts to reach a
compromise and that such efforts failed is a ground for the petitions
dismissal under Section 1(j), Rule 16 of the 1997 Rules of Civil
Procedure.[4] Edwin maintains that under Article 151 of the Family
Code, an earnest effort to reach a compromise is an indispensable
condition precedent. Article 151 provides:
No suit between members of the same family shall prosper unless it
should appear from the verified complaint or petition that earnest
efforts toward a compromise have been made, but that the same
have failed. If it is shown that no such efforts were in fact made, the
case must be dismissed.
This rule shall not apply to cases which may not be the subject of
compromise under the Civil Code.
Edwins arguments do not persuade us.
It is true that the petition for habeas corpus filed by Lourdes failed to
allege that she resorted to compromise proceedings before filing the
petition. However, in her opposition to Edwins motion to dismiss,
Lourdes attached a Barangay Certification to File Action dated 1 May
1998. Edwin does not dispute the authenticity of the Barangay
 24

Certification and its contents. This effectively established that the The Court of Appeals dismissed Edwins contentions by citing as an
parties tried to compromise but were unsuccessful in their efforts. additional ground the exception in Section 412 (b) (2) of the Local
However, Edwin would have the petition dismissed despite the Government Code (LGC) on barangay conciliation, which states:
existence of the Barangay Certification, which he does not even
dispute. (b) Where the parties may go directly to court. the parties may go
directly to court in the following instances:
Evidently, Lourdes has complied with the condition precedent under
Article 151 of the Family Code. A dismissal under Section 1(j) of Rule xxx
16 is warranted only if there is a failure to comply with a condition 2) Where a person has otherwise been deprived of personal liberty
precedent. Given that the alleged defect is a mere failure to allege calling for habeas corpus proceedings;
compliance with a condition precedent, the proper solution is not an
outright dismissal of the action, but an amendment under Section 1 of xxx.
Rule 10 of the 1997 Rules of Civil Procedure.[5] It would have been a
Under Rule 102 of the 1997 Rules of Civil Procedure, a party may
different matter if Edwin had asserted that no efforts to arrive at a
resort to a habeas corpus proceeding in two instances. The first is
compromise have been made at all.
when any person is deprived of liberty either through illegal
In addition, the failure of a party to comply with a condition precedent confinement or through detention. The second instance is when
is not a jurisdictional defect.[6] Such defect does not place the custody of any person is withheld from the person entitled to such
controversy beyond the courts power to resolve. If a party fails to custody. The most common case falling under the second instance
raise such defect in a motion to dismiss, such defect is deemed involves children who are taken away from a parent by another parent
waived.[7] Such defect is curable by amendment as a matter of right or by a relative. The case filed by Lourdes falls under this category.
without leave of court, if made before the filing of a responsive
The barangay conciliation requirement in Section 412 of the LGC does
pleading.[8] A motion to dismiss is not a responsive pleading.[9] More
not apply to habeas corpus proceedings where a person is deprived of
importantly, an amendment alleging compliance with a condition
personal liberty. In such a case, Section 412 expressly authorizes the
precedent is not a jurisdictional matter. Neither does it alter the cause
parties to go directly to court without need of any conciliation
of action of a petition for habeas corpus. We have held that in cases
proceedings. There is deprivation of personal liberty warranting a
where the defect consists of the failure to state compliance with a
petition for habeas corpus where the rightful custody of any person is
condition precedent, the trial court should order the amendment of
withheld from the person entitled thereto.[13] Thus, the Court of
the complaint.[10] Courts should be liberal in allowing amendments
Appeals did not err when it dismissed Edwins contentions on the
to pleadings to avoid multiplicity of suits and to present the real
additional ground that Section 412 exempts petitions for habeas
controversies between the parties.[11]
corpus from the barangay conciliation requirement.
Moreover, in a habeas corpus proceeding involving the welfare and
The petition for certiorari filed by Edwin questioning the RTCs denial
custody of a child of tender age, the paramount concern is to resolve
of his motion to dismiss merely states a blanket allegation of grave
immediately the issue of who has legal custody of the child.
abuse of discretion. An order denying a motion to dismiss is
Technicalities should not stand in the way of giving such child of
interlocutory and is not a proper subject of a petition for certiorari.
tender age full protection.[12] This rule has sound statutory basis in
[14] Even in the face of an error of judgment on the part of a judge
Article 213 of the Family Code, which states, No child under seven
denying the motion to dismiss, certiorari will not lie. Certiorari is not a
years of age shall be separated from the mother unless the court
remedy to correct errors of procedure.[15] The proper remedy against
finds compelling reasons to order otherwise. In this case, the child
an order denying a motion to dismiss is to file an answer and
(Khriza) was only one year and four months when taken away from
interpose as affirmative defenses the objections raised in the motion
the mother.
to dismiss. It is only in the presence of extraordinary circumstances
 25

evincing a patent disregard of justice and fair play where resort to a

petition for certiorari is proper.[16]

The litigation of substantive issues must not rest on a prolonged

contest on technicalities. This is precisely what has happened in this
case. The circumstances are devoid of any hint of the slightest abuse
of discretion by the RTC or the Court of Appeals. A party must not be
allowed to delay litigation by the sheer expediency of filing a petition
for certiorari under Rule 65 based on scant allegations of grave
abuse. More importantly, any matter involving the custody of a child
of tender age deserves immediate resolution to protect the childs
welfare.

WHEREFORE, we DISMISS the instant petition for lack of merit. We

AFFIRM the Resolutions of the Court of Appeals dated 2 July 1998 and
18 January 1999 in CA-G.R. SP No. 48049. The Regional Trial Court,
Branch 19, Bacoor, Cavite is ordered to act with dispatch in resolving
the petition for habeas corpus pending before it. This decision is
IMMEDIATELY EXECUTORY.

SO ORDERED.

B.
1. G.R. No. 171456 August 9, 2007
UNIWIDE HOLDINGS, INC., petitioner, vs.ALEXANDER M. CRUZ,
respondent.
Petitioner, Uniwide Holdings, Inc. (UHI), whose principal office is
located in Paraaque City, entered into a Franchise Agreement1 (the
agreement) granting respondent, Alexander M. Cruz (Cruz), a five-
year franchise to adopt and use the "Uniwide Family Store System" for
the establishment and operation of a "Uniwide Family Store" along
Marcos Highway, Sta. Cruz, Cogeo, Marikina City.
Article 10.22 of the agreement called for Cruz as franchisee to pay
UHI a monthly service fee of P50,000 or three percent of gross
monthly purchases, whichever is higher, payable within five days
after the end of each month without need of formal billing or demand
from UHI. In case of any delay in the payment of the monthly service
fee, Cruz would, under Article 10.33 of the agreement, be liable to
pay an interest charge of three percent per month.
It appears that Cruz had purchased goods from UHIs affiliated
companies First Paragon Corporation (FPC) and Uniwide Sales
Warehouse Club, Inc. (USWCI).
In August 2002, FPC and USWCI executed Deeds of Assignment4 in
favor of UHI assigning all their rights and interests over Cruzs
accounts payable to them.
As of August 13, 2002, Cruz had outstanding obligations with UHI,
FPC, and USWCI in the total amount of P1,358,531.89, drawing UHI to
send him a letter of even date for the settlement thereof in five days.
His receipt of the letter notwithstanding, Cruzs accounts remained
unsettled.
Thus UHI filed a complaint5 for collection of sum of money before the
Regional Trial Court (RTC) of Paraaque docketed as Civil Case No. 04-
0278 against Cruz on the following causes of action:
First Cause of Action
10. Being entitled to the payment of monthly service fee pursuant to
the FA, which defendant failed to pay despite demand, plaintiff
suffered actual damages in the amount of Phil. Peso: One Million
26
Three Hundred Twenty Seven Thousand Six Hundred Sixty Nine &
83/100 (P1,327,669.83), computed as of 05 April 2004, for which
defendant should be held liable together with legal interest thereon
from the date of filing of this Complaint, until fully paid.
Second Cause of Action
11. Being the assignee of the receivable of FPC, which receivable
defendant failed to pay despite demand, plaintiff suffered actual
damages in the amount of Phil. Peso: Sixty Four Thousand One
Hundred Sixty Five & 96/100 (P64,165.96) for which defendant should
be held liable together with the legal interest thereon computed from
date of receipt of plaintiffs demand letter, or on August 16, 2002 to
be exact, until fully paid.
Third Cause of Action
12. Being the assignee of the receivable of USWCI, which receivable
defendant failed to pay despite demand, plaintiff suffered actual
damages in the total amount of Phil. Peso: One Million Five Hundred
Seventy Nine Thousand Sixty One & 36/100 (P1,579,061.36),
computed as of 05 April 2004, inclusive of the two and a half percent
(2.5%) monthly interest, as and by way of penalty, and the three (3%)
annual interest on the unpaid amount, for which defendant should be
held liable, with legal interest thereon from the date of filing of this
Complaint, until fully paid.
Fourth Cause of Action
13. By reason of defendants obstinate refusal or failure to pay his
indebtedness, plaintiff was constrained to file this Complaint and in
the process incur expenses by way of attorneys fees, which could be
reasonably estimated to reach at least Phil. Peso: Two Hundred Fifty
Thousand (P250,000.00) and for which defendant should be held
answerable for.6 (Emphasis and underscoring supplied)
To the complaint Cruz filed a motion to dismiss7 on the ground of
improper venue, he invoking Article 27.5 of the agreement which
reads:
27.5 Venue Stipulation The Franchisee consents to the exclusive
jurisdiction of the courts of Quezon City, the Franchisee waiving any
other venue.8 (Emphasis supplied)

Branch 258 of the Paraaque RTC, by Order9 of December 12, 2005,
granted Cruzs motion to dismiss.
Hence, the present petition before this Court, raising the sole legal
issue of:
WHETHER A CASE BASED ON SEVERAL CAUSES OF ACTION IS
DISMISSIBLE ON THE GROUND OF IMPROPER VENUE WHERE ONLY
ONE OF THE CAUSES OF ACTION ARISES FROM A CONTRACT WITH
EXCLUSIVE VENUE STIPULATION.10 (Underscoring supplied)
Petitioner contends that nowhere in the agreement is there a mention
of FPC and USWCI, and neither are the two parties thereto, hence,
they cannot be bound to the stipulation on "exclusive venue."
The petition is impressed with merit.
The general rule on venue of personal actions, as in petitioners
complaint for collection of sum of money, is embodied in Section 2,
Rule 4 of the Rules of Court which provides:
Sec. 2. Venue of personal actions. All other actions may be
commenced and tried where the plaintiff or any of the principal
plaintiffs resides, or where the defendant or any of the principal
defendants resides, or in the case of a nonresident defendant, where
he may be found, at the election of the plaintiff. (Emphasis and
underscoring supplied)
The afore-quoted provision is, however, qualified by Section 4 of the
same rule which allows parties, before the filing of the action, to
validly agree in writing on an exclusive venue.11
The forging of a written agreement on an exclusive venue of an action
does not, however, preclude parties from bringing a case to other
venues.
Where there is a joinder of causes of action between the same parties
one of which does not arise out of the contract where the exclusive
venue was stipulated upon, the complaint, as in the one at bar, may
be brought before other venues provided that such other cause of
action falls within the jurisdiction of the court and the venue lies
therein.12
Based on the allegations in petitioners complaint, the second and
third causes of action are based on the deeds of assignment executed
27
in its favor by FPC and USWCI. The deeds bear no exclusive venue
stipulation with respect to the causes of action thereunder. Hence, the
general rule on venue applies that the complaint may be filed in the
place where the plaintiff or defendant resides.13
It bears emphasis that the causes of action on the assigned accounts
are not based on a breach of the agreement between UHI and Cruz.
They are based on separate, distinct and independent contracts-
deeds of assignment in which UHI is the assignee of Cruzs obligations
to the assignors FPC and USWCI. Thus, any action arising from the
deeds of assignment cannot be subjected to the exclusive venue
stipulation embodied in the agreement. So San Miguel Corporation v.
Monasterio14 enlightens:
Exclusive venue stipulation embodied in a contract restricts or
confines parties thereto when the suit relates to breach of said
contract. But where the exclusivity clause does not make it
necessarily encompassing, such that even those not related to the
enforcement of the contract should be subject to the exclusive venue,
the stipulation designating exclusive venues should be strictly
confined to the specific undertaking or agreement. Otherwise, the
basic principles of freedom to contract might work to the great
disadvantage of a weak party-suitor who ought to be allowed free
access to courts of justice.15 (Emphasis and underscoring supplied)
In fine, since the other causes of action in petitioners complaint do
not relate to a breach of the agreement it forged with Cruz
embodying the exclusive venue stipulation, they should not be
subjected thereto. As San Miguel further enlightens:
Restrictive stipulations are in derogation of the general policy of
making it more convenient for the parties to institute actions arising
from or in relation to their agreements. Thus, the restriction should be
strictly construed as relating solely to the agreement for which the
exclusive venue stipulation is embodied. Expanding the scope of such
limitation on a contracting party will create unwarranted restrictions
 28

which the parties might find unintended or worse, arbitrary and

oppressive.16 (Underscoring supplied)

WHEREFORE, the petition is GRANTED. The December 12, 2005 Order

of Regional Trial Court of Paraaque City, Branch 258 in Civil Case No.
04-0278 is SET ASIDE. The case is REMANDED to said court which is
directed to reinstate the case to its docket and conduct further
proceedings thereon with dispatch.

SO ORDERED.

2. G.R. No. 173979 February 12, 2007
AUCTION IN MALINTA, INC. versus WARREN EMBES LUYABEN
Assailed in this petition for review under Rule 45 of the Rules of Court
is the May 31, 2005 Decision[1] of the Court of Appeals in CA-G.R. CV
No. 78456, which held that venue was properly laid before the
Regional Trial Court of Bulanao, Tabuk, Kalinga (Kalinga RTC), and
reversed the trial courts September 3, 2002 Resolution[2] dismissing
the complaint of respondent Warren Embes Lubayen in Civil Case No.
511, on the ground of improper venue.
The facts show that on October 24, 2001, respondent, a resident of
Magsaysay, Tabuk, Kalinga, filed with the Kalinga RTC a complaint[3]
for damages against petitioner Auction in Malinta, Inc., a corporation
with business address at Malinta, Valenzuela City, and engaged in
public auction of heavy equipments, trucks, and assorted
machineries. Respondent alleged that in an auction conducted by
petitioner on May 29, 2001, he was declared the highest bidder for a
wheel loader T.C.M. 75B, series no. 3309. On June 7, 2001, respondent
tendered the payment for the said item but petitioner could no longer
produce the loader. It offered a replacement but failed to deliver the
same up to the filing of the complaint. Hence, respondent instituted
this case to recover actual, moral, and exemplary damages plus
attorneys fees.
Petitioner filed a motion to dismiss on the ground of improper venue.
It argued that the correct venue is the RTC of Valenzuela City
pursuant to the stipulation in the Bidders Application and Registration
Bidding Agreement which states that:
ALL COURT LITIGATION PROCEDURES SHALL BE CONDUCTED IN THE
APPROPRIATE COURTS OF VALENZUELA CITY, METRO MANILA.[4]
In a Resolution dated September 3, 2002, the Kalinga RTC held that
the clear intention of the parties was to limit the venue to the proper
court of Valenzuela City and thus dismissed respondents complaint on
the ground of improper venue.[5]
Aggrieved, respondent appealed to the Court of Appeals which
reversed the Resolution of the Kalinga RTC and reinstated the
complaint. The dispositive portion thereof, reads:
29
WHEREFORE, the Resolution appealed from is hereby REVERSED and
SET ASIDE. The case is remanded to the RTC which is ordered to
reinstate plaintiffs complaint for damages.
SO ORDERED.[6]
Petitioners motion for reconsideration was denied; hence, the instant
petition.
The sole issue is whether the stipulation in the parties Bidders
Application and Registration Bidding Agreement effectively limited the
venue of the instant case exclusively to the proper court of Valenzuela
City.
The Court rules in the negative.
The general rule on the venue of personal actions, as in the instant
case for damages[7] filed by respondent, is embodied in Section 2,
Rule 4 of the Rules of Court. It provides:
Sec. 2. Venue of personal actions. All other actions may be
commenced and tried where the plaintiff or any of the principal
plaintiffs resides, or where the defendant or any of the principal
defendants resides, or in the case of a nonresident defendant, where
he may be found, at the election of the plaintiff.
The aforequoted rule, however, finds no application where the
parties, before the filing of the action, have validly agreed in writing
on an exclusive venue.[8] But the mere stipulation on the venue of an
action is not enough to preclude parties from bringing a case in other
venues. It must be shown that such stipulation is exclusive. In the
absence of qualifying or restrictive words, such as exclusively and
waiving for this purpose any other venue,[9] shall only preceding the
designation of venue,[10] to the exclusion of the other courts,[11] or
words of similar import, the stipulation should be deemed as merely
an agreement on an additional forum, not as limiting venue to the
specified place.[12]
This has been the rule since the 1969 case of Polytrade Corporation
v. Blanco.[13] It was held therein that the clause [t]he parties agree to
sue and be sued in the Courts of Manila, does not preclude the filing
of suits in the court which has jurisdiction over the place of residence
of the plaintiff or the defendant. The plain meaning of the said
provision is that the parties merely consented to be sued in Manila

considering that there are no qualifying or restrictive words which
would indicate that Manila, and Manila alone, is the agreed venue. It
simply is permissive and the parties did not waive their right to
pursue remedy in the courts specifically mentioned in Section 2 of
Rule 4 of the Rules of Court.[14]
The Polytrade doctrine was further applied in the case of Unimasters
Conglomeration, Inc. v. Court of Appeals,[15] which analyzed the
various jurisprudence rendered after the Polytrade case. In
Unimasters, we held that a stipulation stating that [a]ll suits arising
out of this Agreement shall be filed with/in the proper Courts of
Quezon City,[16] is only permissive and does not limit the venue to
the Quezon City courts. As explained in the said case:
In other words, unless the parties make very clear, by employing
categorical and suitably limiting language, that they wish the venue
of actions between them to be laid only and exclusively at a definite
place, and to disregard the prescriptions of Rule 4, agreements on
venue are not to be regarded as mandatory or restrictive, but merely
permissive, or complementary of said rule. The fact that in their
agreement the parties specify only one of the venues mentioned in
Rule 4, or fix a place for their actions different from those specified by
said rule, does not, without more, suffice to characterize the
agreement as a restrictive one. There must, to repeat, be
accompanying language clearly and categorically expressing their
purpose and design that actions between them be litigated only at
the place named by them, regardless of the general precepts of Rule
4; and any doubt or uncertainty as to the parties intentions must be
resolved against giving their agreement a restrictive or mandatory
aspect. Any other rule would permit of individual, subjective judicial
interpretations without stable standards, which could well result in
precedents in hopeless inconsistency.[17]
The rule enunciated in Unimasters and Polytrade was reiterated in
subsequent cases where the following agreements on venue were
likewise declared to be merely permissive and do not limit the venue
to the place specified therein, to wit:
1. If court litigation becomes necessary to enforce collection, an
additional equivalent (sic) to 25% of the principal amount will be
charged. The agreed venue for such action is Makati, Metro Manila,
Philippines.[18]
30
2. In case of litigation hereunder, venue shall be in the City Court or
Court of First Instance of Manila as the case may be for determination
of any and all questions arising thereunder.[19]
Then too, the doctrine that absent qualifying or restrictive words, the
venue shall either be that stated in the law or rule governing the
action or the one agreed in the contract, was applied to an extra-
judicial foreclosure sale under Act No. 3135.[20] In Langkaan Realty
Development, Inc. v. United Coconut Planters Bank,[21] where the
provision on the venue employed the word shall to refer to the place
where the foreclosure will be held, the Court ruled that said provision
lack(s) qualifying or restrictive words to indicate the exclusivity of the
agreed forum, and therefore the stipulated place is considered only as
an additional, not a limiting venue.[22] The said stipulation reads:
It is hereby agreed that in case of foreclosure of this mortgage under
Act 3135, as amended, and Presidential Decree No. 385, the auction
sale shall be held at the capital of the province, if the property is
within the territorial jurisdiction of the province concerned, or shall be
held in the city, if the property is within the territorial jurisdiction of
the city concerned.[23]
In the instant case, the stipulation in the parties agreement, i.e., all
Court litigation procedures shall be conducted in the appropriate
Courts of Valenzuela City, Metro Manila, evidently lacks the restrictive
and qualifying words that will limit venue exclusively to the RTC of
Valenzuela City. Hence, the Valenzuela courts should only be
considered as an additional choice of venue to those mentioned
under Section 2, Rule 4 of the Rules of Court. Accordingly, the present
case for damages may be filed with the (a) RTC of Valenzuela City as
stipulated in the bidding agreement; (b) RTC of Bulanao, Tabuk,
Kalinga which has jurisdiction over the residence of respondent
(plaintiff); or with the (c) RTC of Valenzuela City which has jurisdiction
over the business address of petitioner (defendant). The filing of the
complaint in the RTC of Bulanao, Tabuk, Kalinga, is therefore proper,
respondent being a resident of Tabuk, Kalinga.
The case of Hoechst Philippines, Inc. v. Torres,[24] promulgated in
1978, and invoked by petitioner in its motion to dismiss, had already
been superseded by current decisions on venue. In the said case, the
Court construed the proviso: [i]n case of any litigation arising out of
this agreement, the venue of action shall be in the competent courts
 31

of the Province of Rizal,[25] as sufficient to limit the venue to the

proper court of Rizal. However, in Supena v. De la Rosa,[26] we ruled
that Hoechst had been rendered obsolete by recent jurisprudence
applying the doctrine enunciated in Polytrade.

In sum, we find that the Court of Appeals correctly declared that

venue in the instant case was properly laid with the RTC of Bulanao,
Tabuk, Kalinga.

WHEREFORE, the petition is DENIED. The May 31, 2005 Decision of

the Court of Appeals in CA-G.R. CV No. 78456 which reversed the
September 3, 2002 Resolution of the Regional Trial Court of Bulanao,
Tabuk, Kalinga; reinstated the complaint in Civil Case No. 511; and
remanded the case to the said court, is AFFIRMED.

Costs against petitioner.

SO ORDERED.

3. [G.R. No. 125027. August 12, 2002]
ANITA MANGILA, petitioner, vs. COURT OF APPEALS and LORETA
GUINA, respondents.
This is a petition fore review on certiorari under Rule 45 of the Rules
of Court, seeking to set aside the Decision[1] of the Court of Appeals
affirming the Decision[2] of the Regional Trial Court, Branch 108,
Pasay City. The trial court upheld the writ of attachment and the
declaration of default on petitioner while ordering her to pay private
respondent P109,376.95 plus 18 percent interest per annum, 25
percent attorneys fees and costs of suit.
The Facts
Petitioner Anita Mangila (petitioner for brevity) is an exporter of sea
foods and doing business under the name and style of Seafoods
Products. Private respondent Loreta Guina (private respondent for
brevity) is the President and General Manager of Air Swift
International, a single registered proprietorship engaged in the freight
forwarding business.
Sometime in January 1988, petitioner contracted the freight
forwarding services of private respondent for shipment of petitioners
products, such as crabs, prawns and assorted fishes, to Guam (USA)
where petitioner maintains an outlet. Petitioner agreed to pay private
respondent cash on delivery. Private respondents invoice stipulates a
charge of 18 percent interest per annum on all overdue accounts. In
case of suit, the same invoice stipulates attorneys fees equivalent to
25 percent of the amount due plus costs of suit.[3]
On the first shipment, petitioner requested for seven days within
which to pay private respondent. However, for the next three
shipments, March 17, 24 and 31, 1988, petitioner failed to pay private
respondent shipping charges amounting to P109, 376.95.[4]
Despite several demands, petitioner never paid private respondent.
Thus, on June 10, 1988, private respondent filed Civil Case No. 5875
before the Regional Trial Court of Pasay City for collection of sum of
money.
On August 1, 1988, the sheriff filed his Sheriffs Return showing that
summons was not served on petitioner. A woman found at petitioners
house informed the sheriff that petitioner transferred her residence to
32
Sto. Nio, Guagua, Pampanga. The sheriff found out further that
petitioner had left the Philippines for Guam.[5]
Thus, on September 13, 1988, construing petitioners departure from
the Philippines as done with intent to defraud her creditors, private
respondent filed a Motion for Preliminary Attachment. On September
26, 1988, the trial court issued an Order of Preliminary Attachment[6]
against petitioner. The following day, the trial court issued a Writ of
Preliminary Attachment.
The trial court granted the request of its sheriff for assistance from
their counterparts in RTC, Pampanga. Thus, on October 28, 1988,
Sheriff Alfredo San Miguel of RTC Pampanga served on petitioners
household help in San Fernando, Pampanga, the Notice of Levy with
the Order, Affidavit and Bond.[7]
On November 7, 1988, petitioner filed an Urgent Motion to Discharge
Attachment[8] without submitting herself to the jurisdiction of the
trial court. She pointed out that up to then, she had not been served a
copy of the Complaint and the summons. Hence, petitioner claimed
the court had not acquired jurisdiction over her person.[9]
In the hearing of the Urgent Motion to Discharge Attachment on
November 11, 1988, private respondent sought and was granted a re-
setting to December 9, 1988. On that date, private respondents
counsel did not appear, so the Urgent Motion to Discharge
Attachment was deemed submitted for resolution.[10]
The trial court granted the Motion to Discharge Attachment on
January 13, 1989 upon filing of petitioners counter-bond. The trial
court, however, did not rule on the question of jurisdiction and on the
validity of the writ of preliminary attachment.
On December 26, 1988, private respondent applied for an alias
summons, which the trial court issued on January 19, 1989.[11] It was
only on January 26, 1989 that summons was finally served on
petitioner.[12]
On February 9, 1989, petitioner filed a Motion to Dismiss the
Complaint on the ground of improper venue. Private respondents
invoice for the freight forwarding service stipulates that if court
litigation becomes necessary to enforce collection xxx the agreed
venue for such action is Makati, Metro Manila.[13] Private respondent
filed an Opposition asserting that although Makati appears as the

stipulated venue, the same was merely an inadvertence by the
printing press whose general manager executed an affidavit[14]
admitting such inadvertence. Moreover, private respondent claimed
that petitioner knew that private respondent was holding office in
Pasay City and not in Makati.[15] The lower court, finding credence in
private respondents assertion, denied the Motion to Dismiss and gave
petitioner five days to file her Answer. Petitioner filed a Motion for
Reconsideration but this too was denied.
Petitioner filed her Answer[16] on June 16, 1989, maintaining her
contention that the venue was improperly laid.
On June 26, 1989, the trial court issued an Order setting the pre-trial
for July 18, 1989 at 8:30 a.m. and requiring the parties to submit their
pre-trial briefs. Meanwhile, private respondent filed a Motion to Sell
Attached Properties but the trial court denied the motion.
On motion of petitioner, the trial court issued an Order resetting the
pre-trial from July 18, 1989 to August 24, 1989 at 8:30 a.m..
On August 24, 1989, the day of the pre-trial, the trial court issued an
Order[17] terminating the pre-trial and allowing the private
respondent to present evidence ex-parte on September 12, 1989 at
8:30 a.m.. The Order stated that when the case was called for pre-
trial at 8:31 a.m., only the counsel for private respondent appeared.
Upon the trial courts second call 20 minutes later, petitioners counsel
was still nowhere to be found. Thus, upon motion of private
respondent, the pre-trial was considered terminated.
On September 12, 1989, petitioner filed her Motion for
Reconsideration of the Order terminating the pre-trial. Petitioner
explained that her counsel arrived 5 minutes after the second call, as
shown by the transcript of stenographic notes, and was late because
of heavy traffic. Petitioner claims that the lower court erred in
allowing private respondent to present evidence ex-parte since there
was no Order considering the petitioner as in default. Petitioner
contends that the Order of August 24, 1989 did not state that
petitioner was declared as in default but still the court allowed private
respondent to present evidence ex-parte.[18]
On October 6, 1989, the trial court denied the Motion for
Reconsideration and scheduled the presentation of private
respondents evidence ex-parte on October 10, 1989.
33
On October 10, 1989, petitioner filed an Omnibus Motion stating that
the presentation of evidence ex-parte should be suspended because
there was no declaration of petitioner as in default and petitioners
counsel was not absent, but merely late.
On October 18, 1989, the trial court denied the Omnibus Motion.[19]
On November 20, 1989, the petitioner received a copy of the Decision
of November 10, 1989, ordering petitioner to pay respondent
P109,376.95 plus 18 percent interest per annum, 25 percent
attorneys fees and costs of suit. Private respondent filed a Motion for
Execution Pending Appeal but the trial court denied the same.
The Ruling of the Court of Appeals
On December 15, 1995, the Court of Appeals rendered a decision
affirming the decision of the trial court. The Court of Appeals upheld
the validity of the issuance of the writ of attachment and sustained
the filing of the action in the RTC of Pasay. The Court of Appeals also
affirmed the declaration of default on petitioner and concluded that
the trial court did not commit any reversible error.
Petitioner filed a Motion for Reconsideration on January 5, 1996 but
the Court of Appeals denied the same in a Resolution dated May 20,
1996.
Hence, this petition.
The Issues
The issues raised by petitioner may be re-stated as follows:
I.WHETHER RESPONDENT COURT ERRED IN NOT HOLDING THAT THE
WRIT OF ATTACHMENT WAS IMPROPERLY ISSUED AND SERVED;
II.WHETHER THERE WAS A VALID DECLARATION OF DEFAULT;
III.WHETHER THERE WAS IMPROPER VENUE.
IV.WHETHER RESPONDENT COURT ERRED IN DECLARING THAT
PETITIONER IS OBLIGED TO PAY P109, 376.95, PLUS ATTORNEYS FEES.
[20]
The Ruling of the Court
Improper Issuance and Service of Writ of Attachment

Petitioner ascribes several errors to the issuance and implementation
of the writ of attachment. Among petitioners arguments are: first,
there was no ground for the issuance of the writ since the intent to
defraud her creditors had not been established; second, the value of
the properties levied exceeded the value of private respondents
claim. However, the crux of petitioners arguments rests on the
question of the validity of the writ of attachment. Because of failure to
serve summons on her before or simultaneously with the writs
implementation, petitioner claims that the trial court had not acquired
jurisdiction over her person and thus the service of the writ is void.
As a preliminary note, a distinction should be made between issuance
and implementation of the writ of attachment. It is necessary to
distinguish between the two to determine when jurisdiction over the
person of the defendant should be acquired to validly implement the
writ. This distinction is crucial in resolving whether there is merit in
petitioners argument.
This Court has long settled the issue of when jurisdiction over the
person of the defendant should be acquired in cases where a party
resorts to provisional remedies. A party to a suit may, at any time
after filing the complaint, avail of the provisional remedies under the
Rules of Court. Specifically, Rule 57 on preliminary attachment speaks
of the grant of the remedy at the commencement of the action or at
any time thereafter.[21] This phrase refers to the date of filing of the
complaint which is the moment that marks the commencement of the
action. The reference plainly is to a time before summons is served on
the defendant, or even before summons issues.
In Davao Light & Power Co., Inc. v. Court of Appeals,[22] this Court
clarified the actual time when jurisdiction should be had:
It goes without saying that whatever be the acts done by the Court
prior to the acquisition of jurisdiction over the person of defendant -
issuance of summons, order of attachment and writ of attachment -
these do not and cannot bind and affect the defendant until and
unless jurisdiction over his person is eventually obtained by the court,
either by service on him of summons or other coercive process or his
voluntary submission to the courts authority. Hence, when the sheriff
or other proper officer commences implementation of the writ of
attachment, it is essential that he serve on the defendant not only a
copy of the applicants affidavit and attachment bond, and of the
34
order of attachment, as explicitly required by Section 5 of Rule 57, but
also the summons addressed to said defendant as well as a copy of
the complaint xxx. (Emphasis supplied.)
Furthermore, we have held that the grant of the provisional remedy of
attachment involves three stages: first, the court issues the order
granting the application; second, the writ of attachment issues
pursuant to the order granting the writ; and third, the writ is
implemented. For the initial two stages, it is not necessary that
jurisdiction over the person of the defendant be first obtained.
However, once the implementation of the writ commences, the court
must have acquired jurisdiction over the defendant for without such
jurisdiction, the court has no power and authority to act in any
manner against the defendant. Any order issuing from the Court will
not bind the defendant.[23]
In the instant case, the Writ of Preliminary Attachment was issued on
September 27, 1988 and implemented on October 28, 1988.
However, the alias summons was served only on January 26, 1989 or
almost three months after the implementation of the writ of
attachment.
The trial court had the authority to issue the Writ of Attachment on
September 27 since a motion for its issuance can be filed at the
commencement of the action. However, on the day the writ was
implemented, the trial court should have, previously or
simultaneously with the implementation of the writ, acquired
jurisdiction over the petitioner. Yet, as was shown in the records of the
case, the summons was actually served on petitioner several months
after the writ had been implemented.
Private respondent, nevertheless, claims that the prior or
contemporaneous service of summons contemplated in Section 5 of
Rule 57 provides for exceptions. Among such exceptions are where
the summons could not be served personally or by substituted service
despite diligent efforts or where the defendant is a resident
temporarily absent therefrom x x x. Private respondent asserts that
when she commenced this action, she tried to serve summons on
petitioner but the latter could not be located at her customary
address in Kamuning, Quezon City or at her new address in Guagua,
Pampanga.[24] Furthermore, respondent claims that petitioner was

not even in Pampanga; rather, she was in Guam purportedly on a
business trip.
Private respondent never showed that she effected substituted
service on petitioner after her personal service failed. Likewise, if it
were true that private respondent could not ascertain the
whereabouts of petitioner after a diligent inquiry, still she had some
other recourse under the Rules of Civil Procedure.
The rules provide for certain remedies in cases where personal
service could not be effected on a party. Section 14, Rule 14 of the
Rules of Court provides that whenever the defendants whereabouts
are unknown and cannot be ascertained by diligent inquiry, service
may, by leave of court, be effected upon him by publication in a
newspaper of general circulation x x x. Thus, if petitioners
whereabouts could not be ascertained after the sheriff had served the
summons at her given address, then respondent could have
immediately asked the court for service of summons by publication on
petitioner.[25]
Moreover, as private respondent also claims that petitioner was
abroad at the time of the service of summons, this made petitioner a
resident who is temporarily out of the country. This is the exact
situation contemplated in Section 16,[26] Rule 14 of the Rules of Civil
Procedure, providing for service of summons by publication.
In conclusion, we hold that the alias summons belatedly served on
petitioner cannot be deemed to have cured the fatal defect in the
enforcement of the writ. The trial court cannot enforce such a
coercive process on petitioner without first obtaining jurisdiction over
her person. The preliminary writ of attachment must be served after
or simultaneous with the service of summons on the defendant
whether by personal service, substituted service or by publication as
warranted by the circumstances of the case.[27] The subsequent
service of summons does not confer a retroactive acquisition of
jurisdiction over her person because the law does not allow for
retroactivity of a belated service.
Improper Venue
Petitioner assails the filing of this case in the RTC of Pasay and points
to a provision in private respondents invoice which contains the
following:
35
3. If court litigation becomes necessary to enforce collection, an
additional equivalent (sic) to 25% of the principal amount will be
charged. The agreed venue for such action is Makati, Metro Manila,
Philippines.[28]
Based on this provision, petitioner contends that the action should
have been instituted in the RTC of Makati and to do otherwise would
be a ground for the dismissal of the case.
We resolve to dismiss the case on the ground of improper venue but
not for the reason stated by petitioner.
The Rules of Court provide that parties to an action may agree in
writing on the venue on which an action should be brought.[29]
However, a mere stipulation on the venue of an action is not enough
to preclude parties from bringing a case in other venues.[30] The
parties must be able to show that such stipulation is exclusive. Thus,
absent words that show the parties intention to restrict the filing of a
suit in a particular place, courts will allow the filing of a case in any
venue, as long as jurisdictional requirements are followed. Venue
stipulations in a contract, while considered valid and enforceable, do
not as a rule supersede the general rule set forth in Rule 4 of the
Revised Rules of Court.[31] In the absence of qualifying or restrictive
words, they should be considered merely as an agreement on
additional forum, not as limiting venue to the specified place.[32]
In the instant case, the stipulation does not limit the venue
exclusively to Makati. There are no qualifying or restrictive words in
the invoice that would evince the intention of the parties that Makati
is the only or exclusive venue where the action could be instituted.
We therefore agree with private respondent that Makati is not the
only venue where this case could be filed.
Nevertheless, we hold that Pasay is not the proper venue for this
case.
Under the 1997 Rules of Civil Procedure, the general rule is venue in
personal actions is where the defendant or any of the defendants
resides or may be found, or where the plaintiff or any of the plaintiffs
resides, at the election of the plaintiff.[33] The exception to this rule
is when the parties agree on an exclusive venue other than the places
mentioned in the rules. But, as we have discussed, this exception is
not applicable in this case. Hence, following the general rule, the

instant case may be brought in the place of residence of the plaintiff
or defendant, at the election of the plaintiff (private respondent
herein).
In the instant case, the residence of private respondent (plaintiff in
the lower court) was not alleged in the complaint. Rather, what was
alleged was the postal address of her sole proprietorship, Air Swift
International. It was only when private respondent testified in court,
after petitioner was declared in default, that she mentioned her
residence to be in Better Living Subdivision, Paraaque City.
In the earlier case of Sy v. Tyson Enterprises, Inc.,[34] the reverse
happened. The plaintiff in that case was Tyson Enterprises, Inc., a
corporation owned and managed by Dominador Ti. The complaint,
however, did not allege the office or place of business of the
corporation, which was in Binondo, Manila. What was alleged was the
residence of Dominador Ti, who lived in San Juan, Rizal. The case was
filed in the Court of First Instance of Rizal, Pasig. The Court there held
that the evident purpose of alleging the address of the corporations
president and manager was to justify the filing of the suit in Rizal,
Pasig instead of in Manila. Thus, the Court ruled that there was no
question that venue was improperly laid in that case and held that the
place of business of Tyson Enterpises, Inc. is considered as its
residence for purposes of venue. Furthermore, the Court held that the
residence of its president is not the residence of the corporation
because a corporation has a personality separate and distinct from
that of its officers and stockholders.
In the instant case, it was established in the lower court that
petitioner resides in San Fernando, Pampanga[35] while private
respondent resides in Paraaque City.[36] However, this case was
brought in Pasay City, where the business of private respondent is
found. This would have been permissible had private respondents
business been a corporation, just like the case in Sy v. Tyson
Enterprises, Inc. However, as admitted by private respondent in her
Complaint[37] in the lower court, her business is a sole proprietorship,
and as such, does not have a separate juridical personality that could
enable it to file a suit in court.[38] In fact, there is no law authorizing
sole proprietorships to file a suit in court.[39]
A sole proprietorship does not possess a juridical personality separate
and distinct from the personality of the owner of the enterprise.[40]
36
The law merely recognizes the existence of a sole proprietorship as a
form of business organization conducted for profit by a single
individual and requires its proprietor or owner to secure licenses and
permits, register its business name, and pay taxes to the national
government.[41] The law does not vest a separate legal personality
on the sole proprietorship or empower it to file or defend an action in
court.[42]
Thus, not being vested with legal personality to file this case, the sole
proprietorship is not the plaintiff in this case but rather Loreta Guina
in her personal capacity. In fact, the complaint in the lower court
acknowledges in its caption that the plaintiff and defendant are Loreta
Guina and Anita Mangila, respectively. The title of the petition before
us does not state, and rightly so, Anita Mangila v. Air Swift
International, but rather Anita Mangila v. Loreta Guina. Logically then,
it is the residence of private respondent Guina, the proprietor with the
juridical personality, which should be considered as one of the proper
venues for this case.
All these considered, private respondent should have filed this case
either in San Fernando, Pampanga (petitioners residence) or Paraaque
(private respondents residence). Since private respondent
(complainant below) filed this case in Pasay, we hold that the case
should be dismissed on the ground of improper venue.
Although petitioner filed an Urgent Motion to Discharge Attachment in
the lower court, petitioner expressly stated that she was filing the
motion without submitting to the jurisdiction of the court. At that
time, petitioner had not been served the summons and a copy of the
complaint.[43] Thereafter, petitioner timely filed a Motion to
Dismiss[44] on the ground of improper venue. Rule 16, Section 1 of
the Rules of Court provides that a motion to dismiss may be filed
[W]ithin the time for but before filing the answer to the complaint or
pleading asserting a claim. Petitioner even raised the issue of
improper venue in his Answer[45] as a special and affirmative
defense. Petitioner also continued to raise the issue of improper
venue in her Petition for Review[46] before this Court. We thus hold
that the dismissal of this case on the ground of improper venue is
warranted.
 37

The rules on venue, like other procedural rules, are designed to insure
a just and orderly administration of justice or the impartial and
evenhanded determination of every action and proceeding.
Obviously, this objective will not be attained if the plaintiff is given
unrestricted freedom to choose where to file the complaint or petition.
[47]

We find no reason to rule on the other issues raised by petitioner.

WHEREFORE, the petition is GRANTED on the grounds of improper

venue and invalidity of the service of the writ of attachment. The
decision of the Court of Appeals and the order of respondent judge
denying the motion to dismiss are REVERSED and SET ASIDE. Civil
Case No. 5875 is hereby dismissed without prejudice to refiling it in
the proper venue. The attached properties of petitioner are ordered
returned to her immediately.

SO ORDERED.

4. [G.R. No. 151037. June 23, 2005]
SAN MIGUEL CORPORATION, petitioner, vs. TROY FRANCIS L.
MONASTERIO, respondent.
This appeal by certiorari seeks to reverse and set aside the
Decision[1] dated July 16, 2001, and the Resolution[2] dated
November 27, 2001, of the Court of Appeals in CA-G.R. SP No. 52622.
The Court of Appeals dismissed the special civil action for certiorari
filed by San Miguel Corporation (SMC)[3] assailing the Orders[4] of
the Regional Trial Court of Naga City, Branch 20, which denied its
Motion to Dismiss on the ground of improper venue and the
subsequent Motion for Reconsideration in Civil Case No. RTC98-4150.
The facts are as follows:
On August 1, 1993, petitioner SMC entered into an Exclusive
Warehouse Agreement[5] (hereafter EWA for brevity) with SMB
Warehousing Services (SMB), represented by its manager, respondent
Troy Francis L. Monasterio. SMB undertook to provide land, physical
structures, equipment and personnel for storage, warehousing and
related services such as, but not limited to, segregation of empty
bottles, stock handling, and receiving SMC products for its route
operations at Sorsogon, Sorsogon and Daet, Camarines Norte.
The agreement likewise contained a stipulation on venue of actions,
to wit:
26. GENERAL PROVISIONS
-b. Should it be necessary that an action be brought in court to
enforce the terms of this Agreement or the duties or rights of the
parties herein, it is agreed that the proper court should be in the
courts of Makati or Pasig, Metro Manila, to the exclusion of the other
courts at the option of the COMPANY.[6] [Underscoring supplied.]-
On November 3, 1998, respondent Monasterio, a resident of Naga
City, filed a complaint docketed as Civil Case No. RTC98-4150 for
collection of sum of money against petitioner before the Regional Trial
Court of Naga City, Branch 20.
In his Complaint,[7] Monasterio claimed P900,600 for unpaid
cashiering fees. He alleged that from September 1993 to September
1997 and May 1995 to November 1997, aside from rendering service
38
as warehouseman, he was given the additional task of cashiering in
SMCs Sorsogon and Camarines Norte sales offices for which he was
promised a separate fee. He claims that of approximately 290 million
pesos in cash and checks of the sales office and the risks of pilferage,
theft, robbery and hold-up, he had assumed what amounted to
approximately 35 million pesos per annum for Sorsogon, Sorsogon,
and 60 million pesos for Daet, Camarines Norte. He also said that he
hired personnel for the job. Respondent added that it was only on
December 1, 1997, that petitioner SMC started paying him P11,400
per month for his cashiering services.
Monasterio demanded P82,959.32 for warehousing fees, P11,400 for
cashiering fees for the month of September, 1998, as well as
exemplary damages, and attorneys fees in the amount of P500,000
and P300,000, respectively.[8]
On November 19, 1998, SMC filed a Motion to Dismiss[9] on the
ground of improper venue. SMC contended that respondents money
claim for alleged unpaid cashiering services arose from respondents
function as warehouse contractor thus the EWA should be followed
and thus, the exclusive venue of courts of Makati or Pasig, Metro
Manila is the proper venue as provided under paragraph 26(b) of the
Exclusive Warehouse Agreement. SMC cites in its favor Section 4(b) in
relation to Section 2 of Rule 4[10] of the Rules of Court allowing
agreement of parties on exclusive venue of actions.
Respondent filed an Opposition[11] contending that the cashiering
service he rendered for the petitioner was separate and distinct from
the services under the EWA. Hence, the provision on venue in the
EWA was not applicable to said services. Hence, respondent insists
that in accordance with Section 2 of Rule 4 of the Rules of Court the
venue should be in Naga City, his place of residence.
On February 22, 1999, the Regional Trial Court, of Naga City, Branch
20 issued an Order[12] denying petitioners motion to dismiss. The
court held that the services agreed upon in said contract is limited to
warehousing services and the claim of plaintiff in his suit pertains to
the cashiering services rendered to the defendant, a relationship
which was not documented, and is certainly a contract separate and
independent from the exclusive warehousing agreements.[13]
SMCs subsequent Motion for Reconsideration was likewise denied.[14]
While the motion was pending, the respondent filed an Amended

Complaint[15] deleting his claim for unpaid warehousing and
cashiering fees but increasing the exemplary damages from P500,000
to P1,500,000.[16]
Petitioner elevated the controversy to the Court of Appeals by way of
a special civil action for certiorari with a prayer for the issuance of a
Temporary Restraining Order and/or Writ of Preliminary Injunction,
imputing grave abuse of discretion on the RTC Naga City for denying
its motion to dismiss and subsequent motion for reconsideration.
On June 11, 1999, during the pendency of the certiorari petition SMC
filed before the trial court an answer ex abundanti cautela[17] with a
compulsory counterclaim for moral and exemplary damages and
attorneys fees. SMC averred lack of cause of action, payment, waiver,
abandonment and extinguishment.
In its decision dated July 16, 2001, the Court of Appeals found
respondents claim for cashiering services inseparable from his claim
for warehousing services, thus, the venue stipulated in the EWA is the
proper venue. However, the Court of Appeals noted that prior to the
filing of SMCs petition, respondent Monasterio filed an amended
complaint to which SMC filed an answer. Thus, the Court of Appeals
dismissed San Miguels petition for certiorari, stating that the case was
already moot and academic.
Petitioner filed a motion for reconsideration which was denied by the
Court of Appeals. Hence, this petition wherein petitioner raises the
following as issues:[18]
1. Whether or not this Honorable Court may review the finding of the
Court of Appeals that the Complaint and Amended Complaint were
filed in the wrong venue.
2. Assuming arguendo that this Honorable Court may review the
finding of the Court of Appeals that the Complaint and Amended
Complaint were filed in the wrong venue, whether or not such finding
should be reversed.
3. Whether or not the Court of Appeals gravely erred in ruling that
SMCs Petition For Certiorari has become moot and academic in view
of the filing of Monasterios Amended Complaint and SMCs Answer (Ex
Abundanti Cautela).[19]
39
In our view, two issues only require resolution: (1) Did the RTC of
Naga City err in denying the motion to dismiss filed by SMC alleging
improper venue? (2) Did the CA gravely err in ruling that SMCs
petition for certiorari has become moot?
On disputes relating to the enforcement of the rights and duties of the
contracting parties, the venue stipulation in the EWA should be
construed as mandatory. Nothing therein being contrary to law,
morals, good custom or public policy, this provision is binding upon
the parties.[20] The EWA stipulation on venue is clear and
unequivocal, thus it ought to be respected.
However, we note that the cause of action in the complaint filed by
the respondent before the RTC of Naga was not based on the EWA,
but concern services not enumerated in the EWA. Records show also
that previously, respondent received a separate consideration of
P11,400 for the cashiering service he rendered to SMC. Moreover, in
the amended complaint, the respondents cause of action was
specifically limited to the collection of the sum owing to him for his
cashiering service in favor of SMC. He already omitted petitioners
non-payment of warehousing fees. As previously ruled, allegations in
the complaint determines the cause of action or the nature of the
case.[21] Thus, given the circumstances of this case now before us,
we are constrained to hold that it would be erroneous to rule, as the
CA did, that the collection suit of the respondent did not pertain solely
to the unpaid cashiering services but pertain likewise to the
warehousing services.[22]
Exclusive venue stipulation embodied in a contract restricts or
confines parties thereto when the suit relates to breach of the said
contract. But where the exclusivity clause does not make it
necessarily all encompassing, such that even those not related to the
enforcement of the contract should be subject to the exclusive venue,
the stipulation designating exclusive venues should be strictly
confined to the specific undertaking or agreement. Otherwise, the
basic principles of freedom to contract might work to the great
disadvantage of a weak party-suitor who ought to be allowed free
access to courts of justice.
Restrictive stipulations are in derogation of the general policy of
making it more convenient for the parties to institute actions arising
from or in relation to their agreements.[23] Thus, the restriction
 40

should be strictly construed as relating solely to the agreement for

which the exclusive venue stipulation is embodied. Expanding the
scope of such limitation on a contracting party will create
unwarranted restrictions which the parties might find unintended or
worse, arbitrary and oppressive.

Moreover, since convenience is the raison detre of the rules on venue,

[24] venue stipulation should be deemed merely permissive, and that
interpretation should be adopted which most serves the parties
convenience.[25] Contrawise, the rules mandated by the Rules of
Court should govern.[26] Accordingly, since the present case for the
collection of sum of money filed by herein respondent is a personal
action,[27] we find no compelling reason why it could not be
instituted in the RTC of Naga City, the place where plaintiff resides.

Having settled the issue on venue, we need not belabor the issue of
whether SMCs petition has become moot.

WHEREFORE, it is hereby ruled that no reversible error was

committed by the Regional Trial Court of Naga City, Branch 20, in
denying petitioners motion to dismiss. Said RTC is the proper venue of
the amended complaint for a sum of money filed by respondent
against petitioner San Miguel Corporation, in connection with his
cashiering services. The case is hereby REMANDED to the RTC of
Naga City, Branch 20, for further proceedings on respondents
amended complaint, without further delay. Costs against petitioner.
SO ORDERED.

5. [G.R. No. 156966. May 7, 2004]
PILIPINO TELEPHONE CORPORATION, petitioner, vs. DELFINO TECSON,
respondent.
The facts, by and large, are undisputed.
On various dates in 1996, Delfino C. Tecson applied for six (6) cellular
phone subscriptions with petitioner Pilipino Telephone Corporation
(PILTEL), a company engaged in the telecommunications business,
which applications were each approved and covered, respectively, by
six mobiline service agreements.
On 05 April 2001, respondent filed with the Regional Trial Court of
Iligan City, Lanao Del Norte, a complaint against petitioner for a Sum
of Money and Damages. Petitioner moved for the dismissal of the
complaint on the ground of improper venue, citing a common
provision in the mobiline service agreements to the effect that -
Venue of all suits arising from this Agreement or any other suit
directly or indirectly arising from the relationship between PILTEL and
subscriber shall be in the proper courts of Makati, Metro Manila.
Subscriber hereby expressly waives any other venues.[1]
In an order, dated 15 August 2001, the Regional Trial Court of Iligan
City, Lanao del Norte, denied petitioners motion to dismiss and
required it to file an answer within 15 days from receipt thereof.
Petitioner PILTEL filed a motion for the reconsideration, through
registered mail, of the order of the trial court. In its subsequent order,
dated 08 October 2001, the trial court denied the motion for
reconsideration.
Petitioner filed a petition for certiorari under Rule 65 of the Revised
Rules of Civil Procedure before the Court of Appeals.
The Court of Appeals, in its decision of 30 April 2002, saw no merit in
the petition and affirmed the assailed orders of the trial court.
Petitioner moved for a reconsideration, but the appellate court, in its
order of 21 January 2003, denied the motion.
There is merit in the instant petition.
Section 4, Rule 4, of the Revised Rules of Civil Procedure[2] allows the
parties to agree and stipulate in writing, before the filing of an action,
41
on the exclusive venue of any litigation between them. Such an
agreement would be valid and binding provided that the stipulation
on the chosen venue is exclusive in nature or in intent, that it is
expressed in writing by the parties thereto, and that it is entered into
before the filing of the suit. The provision contained in paragraph 22
of the Mobile Service Agreement, a standard contract made out by
petitioner PILTEL to its subscribers, apparently accepted and signed
by respondent, states that the venue of all suits arising from the
agreement, or any other suit directly or indirectly arising from the
relationship between PILTEL and subscriber, shall be in the proper
courts of Makati, Metro Manila. The added stipulation that the
subscriber expressly waives any other venue[3] should indicate,
clearly enough, the intent of the parties to consider the venue
stipulation as being preclusive in character.
The appellate court, however, would appear to anchor its decision on
the thesis that the subscription agreement, being a mere contract of
adhesion, does not bind respondent on the venue stipulation.
Indeed, the contract herein involved is a contract of adhesion. But
such an agreement is not per se inefficacious. The rule instead is that,
should there be ambiguities in a contract of adhesion, such
ambiguities are to be construed against the party that prepared it. If,
however, the stipulations are not obscure, but are clear and leave no
doubt on the intention of the parties, the literal meaning of its
stipulations must be held controlling.[4]
A contract of adhesion is just as binding as ordinary contracts. It is
true that this Court has, on occasion, struck down such contracts as
being assailable when the weaker party is left with no choice by the
dominant bargaining party and is thus completely deprived of an
opportunity to bargain effectively. Nevertheless, contracts of adhesion
are not prohibited even as the courts remain careful in scrutinizing
the factual circumstances underlying each case to determine the
respective claims of contending parties on their efficacy.
In the case at bar, respondent secured six (6) subscription contracts
for cellular phones on various dates. It would be difficult to assume
that, during each of those times, respondent had no sufficient
opportunity to read and go over the terms and conditions embodied
in the agreements. Respondent continued, in fact, to acquire in the
 42

pursuit of his business subsequent subscriptions and remained a

subscriber of petitioner for quite sometime.

In Development Bank of the Philippines vs. National Merchandising

Corporation,[5] the contracting parties, being of age and
businessmen of experience, were presumed to have acted with due
care and to have signed the assailed documents with full knowledge
of their import. The situation would be no less true than that which
obtains in the instant suit. The circumstances in Sweet Lines, Inc. vs.
Teves,[6] wherein this Court invalidated the venue stipulation
contained in the passage ticket, would appear to be rather peculiar to
that case. There, the Court took note of an acute shortage in inter-
island vessels that left passengers literally scrambling to secure
accommodations and tickets from crowded and congested counters.
Hardly, therefore, were the passengers accorded a real opportunity to
examine the fine prints contained in the tickets, let alone reject them.

A contract duly executed is the law between the parties, and they are
obliged to comply fully and not selectively with its terms. A contract
of adhesion is no exception.[7]

WHEREFORE, the instant petition is GRANTED, and the questioned

decision and resolution of the Court of Appeals in CA-G.R. SP No.
68104 are REVERSED and SET ASIDE. Civil Case No. 5572 pending
before the Regional Trial Court of Iligan City, Branch 4, is DISMISSED
without prejudice to the filing of an appropriate complaint by
respondent against petitioner with the court of proper venue. No
costs.

SO ORDERED.

6. UNIVERSAL ROBINA CORPORATION versus ALBERT LIM, doing
business under the name and style New H-R Grocery.
G.R. No. 154338, October 5, 2007
Before us is a Petition for Review on Certiorari under Rule 45 of the
1997 Rules of Civil Procedure, as amended, assailing the Resolutions
dated January 16, 2002 and July 1, 2002 of the Court of Appeals in
CA-G.R. SP No. 67368.
The present controversy stemmed from a contract of sale between
Universal Robina Corporation, petitioner, and Albert Lim, respondent.
Pursuant to the contract, petitioner sold to respondent grocery
products in
the total amount of P808,059.88. After tendering partial payments,
respondent refused to settle his obligation despite petitioners
repeated demands.
Thus, on May 31, 1999, petitioner filed with the Regional Trial Court,
Branch 227, Quezon City, a complaint against respondent for a sum of
money, docketed as Civil Case No. Q-99-37791.[1]
On June 22, 1999, the trial court issued an Order dismissing the
complaint motu proprio on grounds of lack of jurisdiction and
improper venue, thus:
The case is misplaced with respect to jurisdiction and venue. There is
not even a remote connection by the parties to Quezon City, where
this Regional Trial Court sits, the plaintiff corporation has principal
office at Pasig City and the defendant is, as provided in the complaint,
from Laoag City.
Wherefore, premises considered, this case is hereby DISMISSED
without prejudice for improper venue and for lack of jurisdiction.[2]
Accordingly, petitioner filed a motion for reconsideration together
with an amended complaint alleging that the parties agreed that the
proper venue for any dispute relative to the transaction is Quezon
City.
In an Order dated October 11, 1999, the trial court granted the
motion and admitted petitioners amended complaint.
43
On December 6, 1999, summons was served upon respondent. For his
failure to file an answer seasonably and upon motion of petitioner, the
trial court issued an Order dated September 12, 2000 declaring him in
default and allowing petitioner to present its evidence ex parte.[3]
However, on April 17, 2001, the trial court, still unsure whether venue
was properly laid, issued an Order directing petitioner to file a
memorandum of authorities on whether it can file a complaint in
Quezon City.[4] Subsequently, on May 11, 2001, the trial court again
issued an Order dismissing the complaint on the ground of improper
venue, thus:
It appears that there is no connection whatsoever between Quezon
City and the parties. Plaintiffs official place of business is in Pasig
whereas the defendants residence is stated to be in Laoag City both
stipulated in the Complaint. The filing is based on the stipulation at
the back of the delivery receipt that venue shall be in Quezon City ---
which is not even stated in the Complaint nor admitted to have been
signed by the defendant.
WHEREFORE, premises considered, venue is hereby declared to have
been improperly laid. This case is hereby dismissed without prejudice
to filing in the proper venue.[5]
Petitioner filed a motion for reconsideration but it was denied by the
trial court in its Resolution dated August 15, 2001.[6]
Petitioner then filed with the Court of Appeals a petition for review.
But it was dismissed due to petitioners failure to attach thereto an
explanation why copies of the petition were not served by personal
service but by registered mail, in violation of Section 11, Rule 14 of
the 1997 Rules of Civil Procedure, as amended.[7] Petitioner filed a
motion for reconsideration but it was likewise denied by the appellate
court in a Resolution dated July 1, 2002, thus:
After a careful assessment of the petitioners motion for
reconsideration of the Resolution dated March 21, 2002 dismissing
the instant case for failure to comply with Section 11, Rule 14, this
Court finds the reasons therein alleged to be not well-taken.
Moreover, Supreme Court Circular No. 1-88 and Administrative
Circular No. 3-96, provide that subsequent compliance with the
requirements of a petition for review/certiorari shall not warrant
reconsideration of the order of dismissal unless the court is fully

satisfied that the non-compliance with the said requirements was not
in any way attributable to the party, despite due negligence on his
part, and that there are highly justifiable and compelling reasons for
the court to make such other disposition as it may deem just and
equitable.
We find such reasons wanting in the present case.
Besides, after a restudy of the facts, law and jurisprudence, as well as
the dispositions already contained in the assailed Resolutions of
public respondent, we find the present petition for certiorari to be
patently without merit, and the questions raised therein are too
unsubstantial to require consideration.
WHEREFORE, the motion for reconsideration is hereby DENIED for
utter lack of merit.[8]
Hence, this petition.
The fundamental issue being raised is whether the trial court may
dismiss motu proprio petitioners complaint on the ground of improper
venue.
Sections 2 and 4, Rule 4 of the same Rules provide:
Sec. 2. Venue of personal actions. All other actions may be
commenced and tried where the plaintiff or any of the principal
plaintiffs resides, or where the defendant or any of the principal
defendants resides, or in the case of a non-resident defendant where
he may be found, at the election of the plaintiff.
Sec. 4. When Rule not applicable. This Rule shall not apply
(a) In those cases where a specific rule or law provides otherwise; or
(b) Where the parties have validly agreed in writing before the filing
of the action on the exclusive venue thereof.
Clearly, in personal actions, the plaintiff may commence an action
either in the place of his or her residence or the place where the
defendant resides. However, the parties may agree to a specific
venue which could be in a place where neither of them resides.
44
Corollarily, Section 1, Rule 9 of the same Rules provides for the
instances when the trial court may motu proprio dismiss a claim,
thus:
Section 1. Defenses and objections not pleaded.
Defenses and objections not pleaded either in a motion to dismiss or
in the answer are deemed waived. However, when it appears from the
pleadings or the evidence on record that the court has no jurisdiction
over the subject matter, that there is another action pending between
the same parties for the same cause, or that the action is barred by a
prior judgment or by statute of limitations, the court shall dismiss the
claim.
Implicit from the above provision is that improper venue not
impleaded in the motion to dismiss or in the answer is deemed
waived. Thus, a court may not dismiss an action motu proprio on the
ground of improper venue as it is not one of the grounds wherein the
court may dismiss an action motu proprio on the basis of the
pleadings.
In Dacoycoy v. Intermediate Appellate Court,[9] this Court held that a
trial court may not motu proprio dismiss a complaint on the ground of
improper venue, thus:
Dismissing the complaint on the ground of improper venue is
certainly not the appropriate course of action at this stage of the
proceedings, particularly as venue, in inferior courts as well as in the
courts of first instance (now RTC), may be waived expressly or
impliedly. Where the defendant fails to challenge timely the venue in
a motion to dismiss as provided by Section 4 of Rule 4 of the Rules of
Court, and allows the trial to be held and a decision to be rendered,
he cannot on appeal or in a special action be permitted to belatedly
challenge the wrong venue, which is deemed waived.
Indeed, it was grossly erroneous for the trial court to have taken a
procedural short-cut by dismissing motu proprio the complaint on the
ground of improper venue without first allowing the procedure
outlined in the rules of court to take its proper course. Although we
are for the speedy and expeditious resolution of cases, justice and
fairness take primary importance. The ends of justice require that
respondent trial court faithfully adhere to the rules of procedure to
 45

afford not only the defendant, but the plaintiff as well, the right to be
heard on his cause.

In Rudolf Lietz Holdings Inc. v. Registry of Deeds of Paraaque,[10] the

Court likewise held that a trial court may not motu proprio dismiss a
complaint on the ground of improper venue, thus:

Rule 9, Section 1 of the 1997 Rules of Civil Procedure states that

defenses and objections not pleaded either in a motion to dismiss or
in the answer are deemed waived. The court may only dismiss an
action motu proprio in case of lack of jurisdiction over the subject
matter, litis pendentia, res judicata and prescription. Therefore, the
trial court in this case erred when it dismissed the petition motu
proprio. It should have waited for a motion to dismiss or a responsive
pleading from respondent, raising the objection or affirmative defense
of improper venue, before dismissing the petition.

In the instant case, respondent, despite proper service of summons,

failed to file an answer and was thus declared in default by the trial
court. Verily, having been declared in default, he lost his standing in
court and his right to adduce evidence and present his defense,[11]
including his right to question the propriety of the venue of the action.

WHEREFORE, the Petition for Review is GRANTED. The assailed

Resolutions of the Court of Appeals in CA-G.R. SP No. 67368 are
REVERSED. The Regional Trial Court, Branch 227, Quezon City is
ordered to REINSTATE Civil Case No. Q-99-37791 and conduct an ex
parte hearing for the reception of petitioners evidence and dispose of
the case with dispatch.

SO ORDERED.

C.
1. G.R. No. L-27343 February 28, 1979
MANUEL G. SINGSONG, JOSE BELZUNCE, AGUSTIN E. TONSAY, JOSE L.
ESPINOS, BACOLOD SOUTHERN LUMBER YARD, and OPPEN, ESTEBAN,
INC., plaintiffs-appellees,
vs.
ISABELA SAWMILL, MARGARITA G. SALDAJENO and her husband
CECILIO SALDAJENO LEON GARIBAY, TIMOTEO TUBUNGBANUA, and
THE PROVINCIAL SHERIFF OF NEGROS OCCIDENTAL, defendants,
MARGARITA G. SALDAJENO and her husband CECILIO SALDAJENO,
defendants-appellants.
This is an appeal to the Court of Appeals from the judgment of the
Court of First Instance of Negros Occidental in Civil Cage No. 5343,
entitled "Manuel G. Singson, et all vs. Isabela Sawmill, et al.,", the
dispositive portion of which reads:
IN VIEW OF THE FOREGOING CONSIDERATIONS, it is hereby held. (1)
that the contract, Appendix "F", of the Partial Stipulation of Facts, Exh.
"A", has not created a chattel mortgage lien on the machineries and
other chattels mentioned therein, all of which are property of the
defendant partnership "Isabela Sawmill", (2) that the plaintiffs, as
creditors of the defendant partnership, have a preferred right over the
assets of the said partnership and over the proceeds of their sale at
public auction, superior to the right of the defendant Margarita G.
Saldajeno, as creditor of the partners Leon Garibay and Timoteo
Tubungbanua; (3) that the defendant Isabela Sawmill' is indebted to
the plaintiff Oppen, Esteban, Inc. in the amount of P1,288.89, with
legal interest thereon from the filing of the complaint on June 5, 1959;
(4) that the same defendant is indebted to the plaintiff Manuel G.
Singsong in the total amount of P5,723.50, with interest thereon at
the rate of 1 % per month from May 6, 1959, (the date of the
statements of account, Exhs. "L" and "M"), and 25% of the total
indebtedness at the time of payment, for attorneys' fees, both
interest and attorneys fees being stipulated in Exhs. "I" to "17",
inclusive; (5) that the same defendant is indebted to the plaintiff
Agustin E. Tonsay in the amount of P933.73, with legal interest
thereon from the filing of the complaint on June 5, 1959; (6) that the
same defendant is indebted to the plaintiff Jose L. Espinos in the
46
amount of P1,579.44, with legal interest thereon from the filing of the
complaint on June 5, 1959; (7) that the same defendant is indebted to
the plaintiff Bacolod Southern Lumber Yard in the amount of
Pl,048.78, with legal interest thereon from the filing of the complaint
on June 5, 1959; (8) that the same defendant is indebted to the
plaintiff Jose Belzunce in the amount of P2,052.10, with legal interest
thereon from the filing of the complaint on June 5. 1959; (9) that the
defendant Margarita G. Saldajeno, having purchased at public auction
the assets of the defendant partnership over which the plaintiffs have
a preferred right, and having sold said assets for P 45,000.00, is
bound to pay to each of the plaintiffs the respective amounts for
which the defendant partnership is held indebted to, them, as above
indicated and she is hereby ordered to pay the said amounts, plus
attorneys fees equivalent to 25% of the judgment in favor of the
plaintiff Manuel G. Singson, as stipulated in Exhs. "I" "to I-17",
inclusive, and 20% of the respective judgments in favor of the other
plaintiffs, pursuant to. Art. 2208, pars. (5) and (11), of the Civil Code
of the Philippines; (10) The defendants Leon Garibay and Timoteo
Tibungbanua are hereby ordered to pay to the plaintiffs the respective
amounts adjudged in their favor in the event that said plaintiffs
cannot recover them from the defendant Margarita G. Saldajeno and
the surety on the bond that she has filed for the lifting of the
injunction ordered by this court upon the commencement of this case.
The cross-claim cf the defendant Margarita G. Saldajeno against the
defendants Leon Garibay arid Timoteo Tubungbanua is hereby
discussed Margarita G. Saldajeno shall pay the costs.
SO ORDERED. 1
In a resolution promulgated on February 3, 1967, the Court of Appeals
certified the records of this case to the Supreme Court "considering
that the resolution of this appeal involves purely questions or
question of law over which this Court has no jurisdiction ... 2
On June 5. 1959, Manuel G. Singsong, Jose Belzunce, Agustin E.
Tonsay, Jose L. Espinos, Bacolod Southern Lumber Yard, and Oppen,
Esteban, Inc. filed in the Court of first Instance of Negros Occidental,
Branch I, against "Isabela Sawmill", Margarita G. Saldajeno and her
husband Cecilio Saldajeno, Leon Garibay, Timoteo Tubungbanua and
the Provincial Sheriff of Negros Occidental a complaint the prayer of
which reads:

WHEREFORE, the plaintiffs respectfully pray:
(1) That a writ of preliminary injunction be issued restraining the
defendant Provincial Sheriff of Negros Occidental from proceeding
with the sales at public auction that he advertised in two notices
issued by him on May 18, 1959 in connection with Civil Case No. 5223
of this Honorable Court, until further orders of this Court; and to make
said injunction permanent after hearing on the merits:
(2) That after hearing, the defendant partnership be ordered; to
pay to the plaintiff Manuel G. Singson the sum of P3,723.50 plus 1%
monthly interest thereon and 25% attorney's fees, and costs; to pay
to the plaintiff JoseBelzunce the sum of P2,052.10, plus 6% annual
interest thereon and 25% for attorney's fees, and costs;to pay to the
plaintiff Agustin E. Tonsay the sum of P993.73 plus 6% annual interest
thereon and 25% attorney's fees, and costs; to pay to the plaintiff
Bacolod Southern Lumber Yard the sum of P1,048.78, plus 6% annual
interest thereon and 25% attorney's fees, and costs; and to pay to the
plaintiff Oppen, Esteban, Inc. the sum of P1,350.89, plus 6% annual
interest thereon and 25% attorney's fees and costs:
(3) That the so-called Chattel Mortgage executed by the
defendant Leon Garibay and Timoteo Tubungbanua in favor of the
defendant Margarita G. Saldajeno on May 26, 1958 be declared null
and void being in fraud of creditors of the defendant partnership and
without valuable consideration insofar as the said defendant is
concerned:
(4) That the Honorable Court order the sale of public auction of
the assets of the defendnat partnership in case the latter fails to pay
the judgment that the plaintiffs may recover in the action, with
instructions that the proceeds of the sale b e applied in payment of
said judgment before any part of saod proceeds is paid to the
defendant Margarita G. Saldajeno;
(5) That the defendant Leon Garibay, Timoteo Tubungbanua, and
Margarita G. Saldajeno be declared jointly liable to the plaintifs for
whatever deficiency may remain unpaid after the proceeds of the sale
of the assets of the defendnt partnership are supplied in payment of
the judgment that said plaintiffs may recover in this action;
47
(6) The plaintiffs further pray for all other remedies to which the
Honorable Court will find them entitled to, with costs to the
defendants.
Bacolod City, June 4, 1959. 3
The action was docketed as Civil Case No. 5343 of said court.
In their amended answer, the defendants Margarita G. Saldajeno and
her husband, Cecilio Saldajeno, alleged the following special and
affirmative defenses:
xxx xxx xxx
2. That the defendant Isabela Sawmill has been dissolved by
virtue of an action entitled "In the matter of: Dissolution of Isabela
Sawmill as partnership, etc. Margarita G. Saldajeno et al. vs. Isabela
Sawmill, et al., Civil Case No. 4787, Court of First Instance of Negros
Occidental;
3. That as a result of the said dissolution and the decision of the
Court of First Instance of Negros Occidental in the aforesaid case, the
other defendants herein Messrs. Leon Garibay and Timoteo
Tubungbanua became the successors-in-interest to the said defunct
partnership and have bound themselves to answere for any and all
obligations of the defunct partnership to its creditors and third
persons;
4. That to secure the performance of the obligations of the other
defendants Leon Garibay and Timoteo Tubungbanua to the answering
defendant herein, the former have constituted a chattel mortgage
over the properties mentioned in the annexes to that instrument
entitled "Assignment of Rights with Chattel Mortgage" entered into on
May 26, 1968 and duly registered in the Register of Deeds of Negros
Occidental on the same date:
5. That all the plaintiffs herein, with the exceptionof the plaintiff
Oppen, Esteban, Inc. are creditors of Messrs. Leon Garibay and
Timoteo Tubungbanua and not of the defunct Isabela Sawmill and as
such they have no cause of action against answering defendant
herein and the defendant Isabela Sawmill;
6. That all the plaintiffs herein, except for the plaintiff Oppen,
Esteban, Inc. granted cash advances, gasoline, crude oil, motor oil,

grease, rice and nipa to the defendants Leon Garibay and Timoteo
Tubungbanua with the knowledge and notice that the Isabela Sawmill
as a former partnership of defendants Margarita G. Isabela Sawmill as
a former partnership of defendants Margarita G. Saldajeno, Leon
Garibay and Timoteo Tubungbanua, has already been dissolved;
7. That this Honorable Court has no jurisdictionover the claims of
the plaintiffs Oppen, Esteban, Inc., Agustin R. Tonsay, Jose L. Espinos,
and the Bacolod Southern Lumber Yard, it appearing that the amounts
sought to be recovered by them in this action is less than P2,000.00
each, exclusive of interests;
8. That in so far as the claims of these alleged creditors plaintiffs
are concerned, there is a misjoinder of parties because this is not a
class suit, and therefore this Honorable Court cannot take
jurisdictionof the claims for payment;
9. That the claims of plaintiffs-creditors, except Oppen, Esteban,
Inc. go beyond the limit mentioned inthe statute of frauds, Art. 1403
of the Civil Code, and are therefor unenforceable, even assuming that
there were such credits and claims;
10. That this Honorable Court has no jurisdiction in this case for it
is well settled in law and in jurisprudence that a court of first instance
has no power or jurisdiction to annul judgments or decrees of a
coordinate court because other function devolves upon the proper
appellate court; (Lacuna, et al. vs. Ofilada, et al., G.R. No. L-13548,
September 30, 1959; Cabigao vs. del Rosario, 44 Phil. 182; PNB vs.
Javellana, 49 O.G. No. 1, p.124), as it appears from the complaint in
this case to annul the decision of this same court, but of another
branch (Branch II, Judge Querubin presiding). 4
Said defendants interposed a cross-claim against the defendsants
Leon Garibay and Timoteo Tubungbanua praying "that in the event
that judgment be rendered ordering defendant cross claimant to pay
to the plaintiffs the amount claimed in the latter's complaint, that the
cross claimant whatever amount is paid by the latter to the plaintiff in
accordance to the said judgment. ... 5
After trial, judgment was rendered in favor of the plaintiffs and
against the defendants.
48
The defendants, Margarita G. Saldajeno and her husband Cecilio
Saldajeno, appealed to the Court of Appeals assigning the following
errors:
I. THE COURT A QUO ERRED IN ASSUMING JURISDICTION OVER THE
CASE.
II.THE COURT A QUO ERRED IN HOLDING THAT THE ISSUE WITH
REFERENCE TO THE WITHDRAWAL OF DEFENDANT-APPELLANT
MARGARITA G. SALDAJENO FROM THE PARTNERSHIP "SABELA
SAWMILL" WAS WHETHER OR NOT SUCH WITHDRAWAL CAUSED THE
"COMPLETE DISAPPEARANCE" OR "EXTINCTION" OF SAID
PARTNERSHIP.
III.THE COURT A QUO ERRED IN OT HOLDING THAT THE WITHDRAWAL
OF DEFENDANT-APPELLANT MARGARITA G. SALDAJENO AS A PARTNER
THEREIN DISSOLVED THE PARTNERSHIP "ISABELA SAWMILL" (FORMED
ON JAN. 30, 1951 AMONG LEON GARIBAY, TIMOTEO TUBUNGBANUA
AND SAID MARGARITA G. SALDAJENO).
IV.THE COURT A QUO ERRED IN ISSUING THE WRIT OF PRELIMINARY
INJUNCTION.
V.THE COURT A QUO ERRED IN HOLDING THAT THE CHATTEL
MORTGAGE DATED MAY 26, 1958, WHICH CONSTITUTED THE
JUDGMENT IN CIVIL CASE NO. 4797 AND WHICH WAS FORECLOSED IN
CIVIL CASE NO. 5223 (BOTH OF THE COURT OF FIRST INSTANCE OF
NEGROS OCCIDENTAL) WAS NULL AND VOID.
VI.THE COURT A QUO ERRED IN HOLDING THAT THE CHATTLES
ACQUIRED BY DEFENDANT-APPELLANT MARGARITA G. SALDAJENO IN
THE FORECLOSURE SALE IN CIVIL CASE NO. 5223 CONSTITUTED 'ALL
THE ASSETS OF THE DEFENDNAT PARTNERSHIP.
VII.THE COURT A QUO ERRED IN HOLDING THAT DEFENDANT-
APPELLANT MARGARITA G. SALDAJENO BECAME PRIMARILY LIABLE TO
THE PLAINTFFS-APPELLEES FOR HAVING ACQUIRED THE MORTGAGED
CHATTLES IN THE FORECLOSURE SALE CONDUCTED IN CONNECTION
WITH CIVIL CASE NO. 5223.
VIII.THE COURT A QUO ERRED IN HOLDING DEFENDANT-APPELLANT
MARGARITA G. SALDAJENO LIABLE FOR THE OBLIGATIONS OF MESSRS.
LEON GARIBAY AND TIMOTEO TUBUNGBANUA, INCURRED BY THE
LATTER AS PARTNERS IN THE NEW 'ISABELA SAWMILL', AFTER THE

DISSOLUTION OF THE OLD PARTNERSHIP IN WHICH SAID MARGARITA
G. SALDAJENO WAS A PARTNER.
IX.THE COURT A QUO ERRED IN HOLDING DEFENDANT-APPELLANT
MARGARITA G. SALDAJENO LIABLE TO THE PLAINTIFFS-APPELLEES FOR
ATTORNEY'S FEES.
X.THE COURT A QUO ERRED IN NOT DISMISSING THE COMPLAINT OF
THE PLAINTIFFS-APPELLEES.
XI.THE COURT A QUO ERRED IN DISMISSING THE CROSS-CLAIM OF
DEFENDANT-APPELLANT MARGARITA G. SALDAJENO AGAINST CROSS-
DEFENDANTS LEON GARIBAY AND TIMOTEO TUBUNGBANUA. 6
The facts, as found by the trial court, are:
At the commencement of the hearing of the case on the merits the
plaintiffs and the defendant Cecilio and Margarita g. Saldajeno
submittee a Partial Stipulation of Facts that was marked as Exh. "A".
Said stipulation reads as folows:
1. That on January 30, 1951 the defendants Leon Garibay,
Margarita G. Saldejeno, and Timoteo Tubungbanua entered into a
Contract of Partnership under the firm name "Isabela Sawmill", a copy
of which is hereto attached Appendix "A".
2. That on February 3, 1956 the plaintiff Oppen, Esteban, Inc.
sold a Motor Truck and two Tractors to the partnership Isabela Sawmill
for the sum of P20,500.00. In order to pay the said purcahse price,
the said partnership agreed to make arrangements with the
International Harvester Company at Bacolod City so that the latter
would sell farm machinery to Oppen, Esteban, Inc. with the
understanding that the price was to be paid by the partnership. A
copy of the corresponding contract of sle is attached hereto as
Appendix "B".
3. That through the method of payment stipulated in the contract
marked as Appendix "B" herein, the International Harvester Company
has been paid a total of P19,211.11, leaving an unpaid balance of
P1,288.89 as shown in the statements hereto attached as Appendices
"C", "C-1", and "C-2".
4. That on April 25, 1958 Civil Case No. 4797 was filed by the
spouses Cecilio Saldajeno and Margarita G. Saldajeno against the
49
Isabela Sawmill, Leon Garibay, and Timoteo Tubungbanua, a copy of
which Complaint is attached as Appendix 'D'.
5. That on April 27, 1958 the defendants LeonGaribay, Timoteo
Tubungbanua and Margarita G. Saldajeno entered into a
"Memorandum Agreement", a copy of which is hereto attached as
Appendix 'E' in Civil Case 4797 of the Court of First Instance of Negros
Occidental.
6. That on May 26, 1958 the defendants Leon Garibay, Timoteo
Tubungbanua and Margarita G. Saldajeno executed a document
entitled "Assignment of Rights with Chattel Mortgage", a copy of
which documents and its Annexes "A" to "A-5" forming a part of the
record of the above mentioned Civil Case No. 4797, which deed was
referred to in the Decision of the Court ofFirst Instance of Negros
Occidental in Civil Case No. 4797 dated May 29, 1958, a copy of
which is hereto attached as Appendix "F" and "F-1" respectively.
7. That thereafter the defendants Leon Garibay and Timoteo
Tubungbanua did not divide the assets and properties of the "Isabela
Sawmill" between them, but they continued the business of said
partnership under the same firm name "Isabela Sawmill".
8. That on May 18, 1959 the Provincial Sheriff of Negros
Occidental published two (2) notices that he would sell at public
auction on June 5, 1959 at Isabela, Negros Occidental certain trucks,
tractors, machinery, officeequipment and other things that were
involved in Civil Case No. 5223 of the Court of First Instance of Negros
Occidental, entitled "Margarita G. Saldajeno vs. Leon Garibay, et al."
See Appendices "G" and "G-1".
9. That on October 15, 1969 the Provincial Sheriff of Negros
Occidental executed a Certificate ofSale in favor of the defendant
Margarita G. Saldajeno, as a result of the sale conducted by him on
October 14 and 15, 1959 for the enforcement of the judgment
rendered in Civil Case No. 5223 of the Court of First Instance of
Negros Occidental, a certified copy of which certificte of sale is hereto
attached as Appendix "H".
10. That on October 20, 1959 the defendant Margarita G.
Saldajeno executed a deed of sale in favor of the Pan Oriental Lumber
Company transfering to the latter for the sum of P45,000.00 the
trucks, tractors, machinery, and other things that she had purchashed

at a public auction referred to in the foregoing paragraph, a certified
true copy of which Deed of Sale is hereto attached as Appendix "I".
11. The plaintiffs and the defendants Cecilio Saldajeno and
Margarita G. Saldajeno reserve the right to present additional
evidence at the hearing of this case.
Forming parts of the above copied stipulation are documents that
were marked as Appendices "A", "B", "C", "C-1", "C-2", "D", "E", "F",
"F-1", "G", "G-1", "H", and "I".
The plaintiffs and the defendants Cecilio and Margarita G. Saldajeno
presented additional evidence, mostly documentary, while the cross-
defendants did not present any evidence. The case hardly involves
quetions of fact at all, but only questions of law.
The fact that the defendnat 'Isabela Sawmill' is indebted to
theplaintiff Oppen, Esteban, Inc. in the amount of P1,288.89 as the
unpaid balance of an obligation of P20,500.00 contracted on February
3, 10956 is expressly admitted in paragraph 2 and 3 of the
Stipulation, Exh. "A" and its Appendices "B", "C", "C-1", and "C-2".
The plaintiff Agustin E. Tonssay proved by his own testimony and his
Exhs. "B" to"G" that from October 6, 1958 to November 8, 1958 he
advanced a total of P4,200.00 to the defendant 'Isabela Sawmill'.
Agaist the said advances said defendant delivered to Tonsay
P3,266.27 worth of lumber, leavng an unpaid balance of P933.73,
which balance was confirmed on May 15, 1959 by the defendant Leon
Garibay, as Manager of the defendant partnership.
The plaintiff Manuel G. Singsong proved by his own testimony and by
his Exhs. "J" to "L" that from May 25, 1988 to January 13, 1959 he sold
on credit to the defendnat "Isabela Sawmill" rice and bran, on account
of which business transaction there remains an unpaid balance of
P3,580.50. The same plaintiff also proved that the partnership ownes
him the sum of P143.00 for nipa shingles bought from him on credit
and unpaid for.
The plaintiff Jose L. Espinos proved through the testimony of his
witness Cayetano Palmares and his Exhs. "N" to "O-3" that he owns
the "Guia Lumber Yard", that on October 11, 1958 said lumber yard
advanced the sum of P2,500.00 to the defendant "Isabela Sawmill",
that against the said cash advance, the defendant partnership
50
delivered to Guia Lumber Yard P920.56 worth of lumber, leaving an
outstanding balance of P1,579.44.
The plaintiff Bacolod Southern Lumber Yard proved through the
testimony of the witness Cayetano Palmares an its Exhs. "P" to "Q-1"
that on October 11, 1958 said plaintiff advanced the sum of
P1,500.00 to the defendsant 'Isabela Sawmill', that against the said
cash advance, the defendant partnership delivered to the said
plaintiff on November 19, 1958 P377.72 worth of lumber, and P73.54
worth of lumber on January 27, 1959, leaving an outstanding balance
of P1,048.78.
The plaintiff Jose Balzunce proved through the testimony of Leon
Garibay whom he called as his witness, and through the Exhs. "R" to
"E" that from September 14, 1958 to November 27, 1958 he sold to
the defedant "Isabela Sawmill" gasoline, motor fuel, and lubricating
oils, and that on account of said transactions, the defendant
partnersip ownes him an unpaid balance of P2,052.10.
Appendix "H" of the stipulation Exh. "A" shows that on October 13 and
14, 1959 the Provincial Sheriff sold to the defendant Margrita G.
Saldajeno for P38,040.00 the assets of the defendsant "Isabela
Sawmill" which the defendants Leon G. Garibay and Timoteo
Tubungbanua had mortgaged to her, and said purchase price was
applied to the judgment that she has obtained against he said
mortgagors in Civil Case No. 5223 of this Court.
Appendix "I" of the same stipulation Exh. "A" shows that on October
20, 1959 the defendant Margarita G. Saldajeno sold to the PAN
ORIENTAL LUMBER COMPANY for P45,000.00 part of the said
properties that she had bought at public aucton one week before.
xxx xxx xxx 7
It is contended by the appellants that the Court of First Instance of
Negros Occidental had no jurisdiction over Civil Case No. 5343
because the plaintiffs Oppen, Esteban, Inc., Agustin R. Tonsay, Jose L.
Espinos and the Bacolod Southern Lumber Yard sought to collect sums
of moeny, the biggest amount of which was less than P2,000.00 and,
therefore, within the jurisdiction of the municipal court.
This contention is devoid of merit because all the plaintiffs also asked
for the nullity of the assignment of right with chattel mortgage
entered into by and between Margarita G. Saldajeno and her former

partners Leon Garibay and Timoteo Tubungbanua. This cause of
action is not capable of pecuniary estimation and falls under the
jurisdiction of the Court of First Instnace. Where the basic issue is
something more than the right to recover a sum of money and where
the money claim is purely incidental to or a consequence of the
principal relief sought, the action is as a case where the subject of the
litigation is not capable of pecuniary estimation and is cognizable
exclusively by the Court of First Instance.
The jurisdiction of all courts in the Philippines, in so far as the
authority thereof depends upon the nature of litigation, is defined in
the amended Judiciary Act, pursuant to which courts of first instance
shall have exclusive original jurisdiction over any case the subject
matter of which is not capable of pecuniary estimation. An action for
the annulment of a judgment and an order of a court of justice
belongs to the category. 8
In determining whether an action is one the subject matter of which is
not capable of pecuniary estimation this Court has adopted the
criterion of first ascertaining the nature of the principal action or
remedy sought. If it is primarily for the recovery of a sum of money,
the cliam is considered capable of pecuniary estimation, and whether
jurisdiciton is in the municipal courts or in the courts of first instance
would depend on the amount of the claim. However, where the basic
issue is something other than the right to recover a sum of money,
where the money claim is purely incidental to, or a consequence of,
the principal relief sought, this Court has considered such actions as
cases where the subject ogf the litigation may not be estimated in
terms of money, and are cognizable exclusively by courts of first
instance.
In Andres Lapitan vs. SCANDIA, Inc., et al., 9 this Court held:
Actions for specific performance of contracts have been expressly
prounounced to be exclusively cognizable by courts of first instance:
De Jesus vs. Judge Garcia, L-26816, February 28, 1967;
Manufacturers' Distributors, Inc. vs. Yu Siu Liong, L-21285, April 29,
1966. And no cogent reason appears, and none is here advanced by
the parties, why an actin for rescission (or resolution) should be
differently treated, a "rescission" being a counterpart, so to speak, of
"specific performance'. In both cases, the court would certainly have
to undertake an investigation into facts that would justify one act of
51
the other. No award for damages may be had in an action for
resicssion without first conducting an inquiry into matters which
would justify the setting aside of a contract, in the same manner that
courts of first instance would have to make findings of fact and law in
actions not capable of pecuniary estimnation espressly held to be so
by this Court, arising from issues like those arised in Arroz v. Alojado,
et al., L-22153, March 31, 1967 (the legality or illegality of the
conveyance sought for and the determination of the validity of the
money deposit made); De Ursua v. Pelayo, L-13285, April 18, 1950
(validity of a judgment); Bunayog v. Tunas, L-12707, December 23,
1959 (validity of a mortgage); Baito v. Sarmiento, L-13105, August 25,
1960 (the relations of the parties, the right to support created by the
relation, etc., in actions for support); De Rivera, et al. v. Halili, L-
15159, September 30, 1963 (the validity or nullity of documents upon
which claims are predicated). Issues of the same nature may be
raised by a party against whom an action for rescission has been
brought, or by the plaintiff himself. It is, therefore, difficult to see why
a prayer for damages in an action for rescission should be taken as
the basis for concluding such action for resiccison should be taken as
the basis for concluding such action as one cpable of pecuniary
estimation - a prayer which must be included in the main action if
plaintiff is to be compensated for what he may have suffered as a
result of the breach committed by defendant, and not later on
precluded from recovering damages by the rule against splitting a
cause of action and discouraging multiplicitly of suits.
The foregoing doctrine was reiterated in The Good Development
Corporation vs. Tutaan, 10 where this Court held:
On the issue of which court has jurisdiction, the case of SENO vs.
Pastolante, et al., is in point. It was ruled therein that although the
purposes of an action is to recover an amount plus interest which
comes within the original jurisidction of the Justice of the Peace Court,
yet when said action involves the foreclosure of a chattel mortgage
covering personal properties valued at more than P2,000, (now
P10,000.00) the action should be instituted before the Court of First
Instance.
In the instanct, case, the action is to recover the amount of P1,520.00
plus interest and costs, and involves the foreclosure of a chattel
mortgage of personal properties valued at P15,340.00, so that it is

clearly within the competence of the respondent court to try and
resolve.
In the light of the foregoing recent rulings, the Court of First Instance
of Negros Occidental did no err in exercising jurisidction over Civil
Case No. 5343.
The appellants also contend that the chattel mortgage may no longer
be annulled because it had been judicially approved in Civil Case No.
4797 of the Court of First Instance of Negros Occidental and said
chattel mortgage had been ordered foreclosed in Civil Case No. 5223
of the same court.
On the question of whether a court may nullify a final judgment of
another court of co-equal, concurrent and coordinate jusridiction, this
Court originally ruled that:
A court has no power to interfere with the judgments or decrees of a
court of concurrent or coordinate jurisdiction having equal power to
grant the relief sought by the injunction.
The various branches of the Court of First Instance of Manila are in a
sense coordinate courts and cannot be allowed to interfere with each
others' judgments or decrees. 11
The foregoing doctrine was reiterated in a 1953 case 12 where this
Court said:
The rule which prohibits a Judge from intertering with the actuations
of the Judge of another branch of the same court is not infringed
when the Judge who modifies or annuls the order isued by the other
Judge acts in the same case and belongs to the same court (Eleazar
vs. Zandueta, 48 Phil. 193. But the rule is infringed when the Judge of
a branch of the court issues a writ of preliminary injunction in a case
to enjoint the sheriff from carrying out an order by execution issued in
another case by the Judge of another branch of the same court.
(Cabigao and Izquierdo vs. Del Rosario et al., 44 Phil. 182).
This ruling was maintained in 1967. In Mas vs. Dumaraog, 13 the
judgment sought to be annulled was rendered by the Court of First
Instance of Iloilo and the action for annullment was filed with the
Court of First Instance of Antique, both courts belonging to the same
Judicial District. This Court held that:
52
The power to open, modify or vacant a judgment is not only
possessed by but restricted to the court in which the judgment was
rendered.
The reason of this Court was:
Pursuant to the policy of judicial stability, the judgment of a court of
competent jurisdiction may not be interfered with by any court
concurrrent jurisdiction.
Again, in 1967 this Court ruled that the jurisdiction to annul a
judgement of a branch of the court of First Instance belongs solely to
the very same branch which rendered the judgement. 14
Two years later, the same doctrine was laid down in the Sterling
Investment case. 15
In December 1971, however, this court re-examined and reversed its
earlier doctrine on the matter. In Dupla v. Court of Appeals, 16 this
Tribunal, speaking through Mr. Justice Villamor declared:
... the underlying philosophy expressed in the Dumara-og case, the
policy of judicial stability, to the end that the judgment of a court of
competent jurisdiction may not be interfered with by any court of
concurrent jurisdiction may not be interfered with by any court of
concurrent jurisdiciton, this Court feels that this is as good an
occasion as any to re-examine the doctrine laid down ...
In an action to annul the judgment of a court, the plaintiff's cause of
action springs from the alleged nullity of the judgment based on one
ground or another, particularly fraud, which fact affords the plaintiff a
right to judicial interference in his behalf. In such a suit the cause of
action is entirely different from that in the actgion which grave rise to
the judgment sought to be annulled, for a direct attack against a final
and executory judgment is not a incidental to, but is the main object
of the proceeding. The cause of action in the two cases being distinct
and separate from each other, there is no plausible reason why the
venue of the action to annul the judgment should necessarily follow
the venue of the previous action ...
The present doctrine which postulate that one court or one branch of
a court may not annul the judgment of another court or branch, not
only opens the door to a violation of Section 2 of Rule 4, (of the Rules
of Court) but also limit the opportunity for the application of said rule.

Our conclusion must therefore be that a court of first instance or a
branch thereof has the authority and jurisdiction to take cognizance
of, and to act in, suit to annul final and executory judgment or order
rendered by another court of first instance or by another branch of
the same court...
In February 1974 this Court reiterated the ruling in the Dulap case. 17
In the light of the latest ruling of the Supreme Court, there is no doubt
that one branch of the Court of First Instance of Negros Occidental
can take cognizance of an action to nullify a final judgment of the
other two branches of the same court.
It is true that the dissolution of a partnership is caused by any partner
ceasing to be associated in the carrying on of the business. 18
However, on dissolution, the partnershop is not terminated but
continuous until the winding up to the business. 19
The remaining partners did not terminate the business of the
partnership "Isabela Sawmill". Instead of winding up the business of
the partnership, they continued the business still in the name of said
partnership. It is expressly stipulated in the memorandum-agreement
that the remaining partners had constituted themselves as the
partnership entity, the "Isabela Sawmill". 20
There was no liquidation of the assets of the partnership. The
remaining partners, Leon Garibay and Timoteo Tubungbanua,
continued doing the business of the partnership in the name of
"Isabela Sawmill". They used the properties of said partnership.
The properties mortgaged to Margarita G. Saldajeno by the remaining
partners, Leon Garibay and Timoteo Tubungbanua, belonged to the
partnership "Isabela Sawmill." The appellant, Margarita G. Saldajeno,
was correctly held liable by the trial court because she purchased at
public auction the properties of the partnership which were
mortgaged to her.
It does not appear that the withdrawal of Margarita G. Saldajeno from
the partnership was published in the newspapers. The appellees and
the public in general had a right to expect that whatever, credit they
extended to Leon Garibay and Timoteo Tubungbanua doing the
business in the name of the partnership "Isabela Sawmill" could be
enforced against the proeprties of said partnership. The judicial
foreclosure of the chattel mortgage executed in favor of Margarita G.
53
Saldajeno did not relieve her from liability to the creditors of the
partnership.
The appellant, margrita G. Saldajeno, cannot complain. She is partly
to blame for not insisting on the liquidaiton of the assets of the
partnership. She even agreed to let Leon Garibay and Timoteo
Tubungbanua continue doing the business of the partnership "Isabela
Sawmill" by entering into the memorandum-agreement with them.
Although it may be presumed that Margarita G. Saldajeno had action
in good faith, the appellees aslo acted in good faith in extending
credit to the partnership. Where one of two innocent persons must
suffer, that person who gave occasion for the damages to be caused
must bear the consequences. Had Margarita G. Saldajeno not entered
into the memorandum-agreement allowing Leon Garibay and Timoteo
Tubungbanua to continue doing the business of the aprtnership, the
applees would not have been misled into thinking that they were still
dealing with the partnership "Isabela Sawmill". Under the facts, it is of
no moment that technically speaking the partnership "Isabela
Sawmill" was dissolved by the withdrawal therefrom of Margarita G.
Saldajeno. The partnership was not terminated and it continued
doping business through the two remaining partners.
The contention of the appellant that the appleees cannot bring an
action to annul the chattel mortgage of the propertiesof the
partnership executed by Leon Garibay and Timoteo Tubungbanua in
favor of Margarita G. Saldajeno has no merit.
As a rule, a contract cannot be assailed by one who is not a party
thereto. However, when a contract prejudices the rights of a third
person, he may file an action to annul the contract.
This Court has held that a person, who is not a party obliged
principally or subsidiarily under a contract, may exercised an action
for nullity of the contract if he is prejudiced in his rights with respect
 54

to one of the contracting parties, and can show detriment which

would positively result to him from the contract in which he has no
intervention. 21

The plaintiffs-appellees were prejudiced in their rights by the

execution of the chattel mortgage over the properties of the
partnership "Isabela Sawmill" in favopr of Margarita G. Saldajeno by
the remaining partners, Leon Garibay and Timoteo Tubungbanua.
Hence, said appelees have a right to file the action to nullify the
chattel mortgage in question.

The portion of the decision appealed from ordering the appellants to

pay attorney's fees to the plaintiffs-appellees cannot be sustained.
There is no showing that the appellants displayed a wanton disregard
of the rights of the plaintiffs. Indeed, the appellants believed in good
faith, albeit erroneously, that they are not liable to pay the claims.

The defendants-appellants have a right to be reimbursed whatever

amounts they shall pay the appellees by their co-defendants Leon
Garibay and Timoteo Tubungbanua. In the memorandum-agreement,
Leon Garibay and Timoteo Tubungbaun undertook to release
Margarita G. Saldajeno from any obligation of "Isabela Sawmill" to
third persons. 22

WHEREFORE, the decision appealed from is hereby affirmed with the

elimination of the portion ordering appellants to pay attorney's fees
and with the modification that the defendsants, Leon Garibay and
Timoteo Tubungbanua, should reimburse the defendants-appellants,
Margarita G. Saldajeno and her husband Cecilio Saldajeno, whatever
they shall pay to the plaintiffs-appellees, without pronouncement as
to costs.

SO ORDERED.
 55

2. G.R. No. 134230 July 17, 2002 ordering defendant (Jovenal Ouano) to vacate the premises and
restore the lots to their original condition; pay plaintiff (PGTT)
P100,000.00 as damages per year, beginning October, 1996 until he
JOVENAL OUANO, petitioner, shall have vacated the premises and restored the lots to their original
condition; pay P100,000.00 as attorney's fees; and pay P50,000.00 as
vs. expenses of litigation.
PGTT INTERNATIONAL INVESTMENT CORPORATION and HON. JUDGE
RAMON G. CODILLA, JR., respondents.
"Plaintiff prays for such other reliefs and remedies, just and equitable
under the premises."2
SANDOVAL-GUTIERREZ, J.:

On February 5, 1998, Ouano filed a motion to dismiss the complaint

on the ground that it is the Municipal Trial Court (MTC), not the RTC,
PGTT International Investment Corporation (PGTT), respondent, is a
which has jurisdiction over it considering that the assessed value of
corporation duly organized under existing laws, with address at
the lots involved is only P2,910, as indicated in the latest tax
YASCO Bldg., M. J. Cuenco Ave., Cebu City.
declaration,3 citing Section 19 (paragraph 2) and Section 33
(paragraph 3) of Batas Pambansa Bilang 129 (The Judiciary
Reorganization Act of 1980), as amended by Republic Act No. 7691.4
On December 11, 1997, PGTT filed with the Regional Trial Court (RTC),
Branch 20, Cebu City, a verified complaint against Jovenal Ouano,
petitioner, docketed as Civil Case No. CEB- 21319, entitled "PGTT
In its opposition to Ouanos motion, PGTT contends that the RTC has
INTERNATIONAL INVESTMENT CORPORATION, Plaintiff, vs. JUVENAL
jurisdiction since the market value of the lots is P49,760.00.5 Besides,
OUANO, Defendant," for "Recovery of Ownership and Possession of
the complaint is not only an action for recovery of ownership and
Real Property and Damages."1 In its complaint, PGTT alleged that it is
possession of real property, but also for damages exceeding
the owner of Lot Nos. 1-10, Block 2 of the Sunnymeade Crescent
P100,000.00, over which claim the RTC has exclusive original
Subdivision located at Pit-os, Talamban, Cebu City. Sometime in
jurisdiction under Section 19 (paragraph 8) of the same law.
October of 1996, PGTT found that Ouano uprooted the concrete
monuments of the said lots, plowed them and planted corn thereon.
Despite PGTTs demand that he vacate the lots and restore them to
their original condition, Ouano refused, claiming he is the owner and On March 6, 1998, the RTC, presided by Judge Ramon G. Codilla, Jr.,
lawful possessor of the 380 square meters he occupied. Due to issued an Order denying the motion to dismiss, holding that:
Ouanos wrongful act, PGTT was deprived of the use of its property
and suffered damages in the amount of P100,000.00 a year. Likewise,
PGTT was constrained to file the subject action and hired the services "This court believes that this court has jurisdiction to try this case
of his counsel for P100,000.00. PGTT prayed: considering that the real properties consist of ten parcels of land in a
subdivision and the court takes note that there is a discrepancy
somewhere by the Office of the City Assessor in the Assessment of
"WHEREFORE, in view of all the foregoing, it is most respectfully the parcels of land for only less than P2,000.00 and that the
prayed that after due notice and hearing, judgment be rendered government is very much at a loss by these unrealistic valuation."6

Ouano filed a motion for reconsideration but was likewise denied by
the RTC in its Order dated May 27, 1998. The trial court ruled it has
jurisdiction over the case because "(i)t is of judicial knowledge that
the real properties situated in Cebu City command a higher valuation
than those indicated in the tax declaration. The observation of
plaintiffs (PGTTs) counsel as to the issue on damages is likewise
sustained considering that, being a corporation, it may have incurred
damages in the form of unrealized profits."7
Hence the present petition for certiorari filed by Ouano under Rule 65
of the 1997 Rules of Civil Procedure, as amended, assailing the Orders
of respondent judge dated March 6, 1998 and May 27, 1998 as having
been issued with grave abuse of discretion amounting to lack or
excess of jurisdiction.
At the outset, it is necessary to stress that a direct recourse to this
Court is highly improper, for it violates the established policy of strict
observance of the judicial hierarchy of courts.8 We need to reiterate,
for the guidance of petitioner, that this Courts original jurisdiction to
issue a writ of certiorari (as well as prohibition, mandamus, quo
warranto, habeas corpus and injunction) is concurrent with the Court
of Appeals (CA), as in the present case, and with the RTCs in proper
cases within their respective regions.9 However, this concurrence of
jurisdiction does not grant a party seeking any of the extraordinary
writs the absolute freedom to file his petition with the court of his
choice. This Court is a court of last resort, and must so remain if it is
to satisfactorily perform the functions assigned to it by the
Constitution and immemorial tradition.10 The hierarchy of courts
determines the appropriate forum for such petitions. Thus, petitions
for the issuance of such extraordinary writs against the first level
("inferior") courts should be filed with the RTC, and those against the
latter, with the CA.11 A direct invocation of this Courts original
jurisdiction to issue these writs should be allowed only when there are
special and important reasons therefor, clearly and specifically set out
in the petition. This is the established policy. It is a policy that is
necessary to prevent inordinate demands upon this Courts time and
attention which are better devoted to those matters within its
56
exclusive jurisdiction, and to prevent further over-crowding of its
docket.12 Unfortunately, the instant petition does not allege any
special and compelling reason to justify a direct recourse to this
Court. However, we deem it more appropriate and practical to resolve
the controversy in order to avoid further delay, but only in this
instance.
The lone issue for our resolution is whether the RTC has jurisdiction
over Civil Case No. CEB-21319.
The complaint seeks to recover from private respondent the
ownership and possession of the lots in question and the payment of
damages. Since the action involves ownership and possession of real
property, the jurisdiction over the subject matter of the claim is
determined by the assessed value, not the market value, thereof,
pursuant to Batas Pambansa Blg. 129, as amended by R.A. 7691.
Section 33 (paragraph 3) of the said law provides:
"Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial
Courts and Municipal Circuit Trial Courts in Civil Cases. Metropolitan
Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts
shall exercise:
x x x.
(3) Exclusive original jurisdiction in all civil actions which involve title
to, or possession of, real property, or any interest therein where the
assessed value of the property or interest therein does not exceed
Twenty Thousand Pesos (P20,000.00) or, in civil actions in Metro
Manila, where such assessed value does not exceed Fifty Thousand
Pesos (P50,000.00) exclusive of interest, damages of whatever kind,
attorneys fees, litigation expenses and costs: Provided, That in cases
of land not declared for taxation purposes, the value of such property
shall be determined by the assessed value of the adjacent lots.

x x x." (Emphasis ours)
Likewise, Section 19 (paragraph 2) of the same law reads:
"Sec. 19. Jurisdiction in civil cases. - The Regional Trial Court shall
exercise exclusive original jurisdiction:
x x x.
(2) In all civil actions, which involve the title to, or possession of, real
property, or any interest therein, where the assessed value of the
property involved exceeds Twenty Thousand Pesos (P20,000.00) or,
for civil actions in Metro Manila, where such value exceeds Fifty
Thousand Pesos (P50,000.00) except actions for forcible entry into
and unlawful detainer of lands or buildings, original jurisdiction over
which is conferred upon the Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts;
x x x." (Emphasis ours)
It is undisputed that the assessed value of the property involved, as
shown by the corresponding tax declaration, is only P2,910.00. As
such, the complaint is well within the MTCs P20,000.00 jurisdictional
limit.
The finding of respondent judge that the value of the lots is higher
than that indicated in the tax declaration and that, therefore, the RTC
has jurisdiction over the case is highly speculative. It is elementary
that the tax declaration indicating the assessed value of the property
57
enjoys the presumption of regularity as it has been issued by the
proper government agency.
Respondent judge further held that since the complaint also seeks the
recovery of damages exceeding P100,000.00, then it is within the
competence of the RTC pursuant to Section 19 (paragraph 8) of Batas
Pambansa Blg. 129, as amended by R.A. 7691, which states:
"SEC. 19. Jurisdiction in civil cases. Regional Trial Courts shall
exercise exclusive original jurisdiction:
xxx
"(8) In all other cases in which the demand, exclusive of interest,
damages of whatever kind, attorneys fees, litigation expenses, and
costs or the value of the property in controversy exceeds One
Hundred Thousand Pesos (P100,000.00) or, in such other cases in
Metro Manila, where the demand, exclusive of the above mentioned
items exceeds Two hundred thousand pesos (P200,000.00)."
(Emphasis ours)
The above provision does not apply to the instant case. It is
applicable only to "all other cases" other than an action involving title
to, or possession of real property in which the assessed value is the
controlling factor in determining the courts jurisdiction. Besides, the
same provision explicitly excludes from the determination of the
jurisdictional amount the demand for "interest, damages of whatever
kind, attorneys fees, litigation expenses, and costs". The exclusion of
such damages is reiterated in Section 33, paragraph 3 of the same
Batas Pambansa Blg. 129, as amended, quoted earlier. The said
damages are merely incidental to, or a consequence of, the main
cause of action for recovery of ownership and possession of real
property. In this connection, this Court issued Administrative Circular
No. 09-94 setting the guidelines in the implementation of R.A. 7691.
Paragraph 2 states:
 58

"2. The exclusion of the term damages of whatever kind in

determining the jurisdictional amount under Section 19 (8) and
Section 33 (1) of B.P. Blg. 129, as amended by R.A. 7691, applies to
cases where the damages are merely incidental to or a consequence
of the main cause of action. However, in cases where the claim for
damages is the main cause of action, or one of the causes of action,
the amount of such claim shall be considered in determining the
jurisdiction of the court." (Emphasis ours)

We thus find that in issuing the assailed orders denying petitioners

motion to dismiss, thus taking cognizance of the case, the RTC
committed grave abuse of discretion.

WHEREFORE, the instant petition is GRANTED. The assailed Orders

issued by respondent RTC on March 6, 1998 and May 27, 1998 in Civil
Case No. CEB-21319 are SET ASIDE. Accordingly, the complaint is
ordered DISMISSED.

SO ORDERED.

3. IRENE SANTE AND REYNALDO SANTE,- versus -HON. EDILBERTO T.
CLARAVALL, in his capacity as Presiding Judge of Branch 60, Regional
Trial Court of Baguio City, and VITA N. KALASHIAN,
G.R. No. 173915,February 22, 2010
Before this Court is a petition for certiorari[1] under Rule 65 of the
1997 Rules of Civil Procedure, as amended, filed by petitioners Irene
and Reynaldo Sante assailing the Decision[2] dated January 31, 2006
and the Resolution[3] dated June 23, 2006 of the Seventeenth
Division of the Court of Appeals in CA-G.R. SP No. 87563. The assailed
decision affirmed the orders of the Regional Trial Court (RTC) of
Baguio City, Branch 60, denying their motion to dismiss the complaint
for damages filed by respondent Vita Kalashian against them.
The facts, culled from the records, are as follows:
On April 5, 2004, respondent filed before the RTC of Baguio City a
complaint for damages[4] against petitioners. In her complaint,
docketed as Civil Case No. 5794-R, respondent alleged that while she
was inside the Police Station of Natividad, Pangasinan, and in the
presence of other persons and police officers, petitioner Irene Sante
uttered words, which when translated in English are as follows, How
many rounds of sex did you have last night with your boss, Bert? You
fuckin bitch! Bert refers to Albert Gacusan, respondents friend and
one (1) of her hired personal security guards detained at the said
station and who is a suspect in the killing of petitioners close relative.
Petitioners also allegedly went around Natividad, Pangasinan telling
people that she is protecting and cuddling the suspects in the
aforesaid killing. Thus, respondent prayed that petitioners be held
liable to pay moral damages in the amount of P300,000.00;
P50,000.00 as exemplary damages; P50,000.00 attorneys fees;
P20,000.00 litigation expenses; and costs of suit.
Petitioners filed a Motion to Dismiss[5] on the ground that it was the
Municipal Trial Court in Cities (MTCC) and not the RTC of Baguio, that
had jurisdiction over the case. They argued that the amount of the
claim for moral damages was not more than the jurisdictional amount
of P300,000.00, because the claim for exemplary damages should be
excluded in computing the total claim.
On June 24, 2004,[6] the trial court denied the motion to dismiss
citing our ruling in Movers-Baseco Integrated Port Services, Inc. v.
59
Cyborg Leasing Corporation.[7] The trial court held that the total
claim of respondent amounted to P420,000.00 which was above the
jurisdictional amount for MTCCs outside Metro Manila. The trial court
also later issued Orders on July 7, 2004[8] and July 19, 2004,[9]
respectively reiterating its denial of the motion to dismiss and
denying petitioners motion for reconsideration.
Aggrieved, petitioners filed on August 2, 2004, a Petition for Certiorari
and Prohibition,[10] docketed as CA-G.R. SP No. 85465, before the
Court of Appeals. Meanwhile, on July 14, 2004, respondent and her
husband filed an Amended Complaint[11] increasing the claim for
moral damages from P300,000.00 to P1,000,000.00. Petitioners filed a
Motion to Dismiss with Answer Ad Cautelam and Counterclaim, but
the trial court denied their motion in an Order[12] dated September
17, 2004.
Hence, petitioners again filed a Petition for Certiorari and
Prohibition[13] before the Court of Appeals, docketed as CA-G.R. SP
No. 87563, claiming that the trial court committed grave abuse of
discretion in allowing the amendment of the complaint to increase the
amount of moral damages from P300,000.00 to P1,000,000.00. The
case was raffled to the Seventeenth Division of the Court of Appeals.
On January 23, 2006, the Court of Appeals, Seventh Division,
promulgated a decision in CA-G.R. SP No. 85465, as follows:
WHEREFORE, finding grave abuse of discretion on the part of [the]
Regional Trial Court of Baguio, Branch 60, in rendering the assailed
Orders dated June 24, 2004 and July [19], 2004 in Civil Case No. 5794-
R the instant petition for certiorari is GRANTED. The assailed Orders
are hereby ANNULLED and SET ASIDE. Civil Case No. 5794-R for
damages is ordered DISMISSED for lack of jurisdiction.
SO ORDERED.[14]
The Court of Appeals held that the case clearly falls under the
jurisdiction of the MTCC as the allegations show that plaintiff was
seeking to recover moral damages in the amount of P300,000.00,
which amount was well within the jurisdictional amount of the MTCC.
The Court of Appeals added that the totality of claim rule used for
determining which court had jurisdiction could not be applied to the

instant case because plaintiffs claim for exemplary damages was not
a separate and distinct cause of action from her claim of moral
damages, but merely incidental to it. Thus, the prayer for exemplary
damages should be excluded in computing the total amount of the
claim.
On January 31, 2006, the Court of Appeals, this time in CA-G.R. SP No.
87563, rendered a decision affirming the September 17, 2004 Order
of the RTC denying petitioners Motion to Dismiss Ad Cautelam. In the
said decision, the appellate court held that the total or aggregate
amount demanded in the complaint constitutes the basis of
jurisdiction. The Court of Appeals did not find merit in petitioners
posture that the claims for exemplary damages and attorneys fees
are merely incidental to the main cause and should not be included in
the computation of the total claim.
The Court of Appeals additionally ruled that respondent can amend
her complaint by increasing the amount of moral damages from
P300,000.00 to P1,000,000.00, on the ground that the trial court has
jurisdiction over the original complaint and respondent is entitled to
amend her complaint as a matter of right under the Rules.
Unable to accept the decision, petitioners are now before us raising
the following issues:
I.
WHETHER OR NOT THERE WAS GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION ON THE PART
OF THE (FORMER) SEVENTEENTH DIVISION OF THE HONORABLE
COURT OF APPEALS WHEN IT RESOLVED THAT THE REGIONAL TRIAL
COURT OF BAGUIO CITY BRANCH 60 HAS JURISDICTION OVER THE
SUBJECT MATTER OF THE CASE FOR DAMAGES AMOUNTING TO
P300,000.00;
II.
WHETHER OR NOT THERE WAS GRAVE ABUSE OF DISCRETION ON THE
PART OF THE HONORABLE RESPONDENT JUDGE OF THE REGIONAL
TRIAL COURT OF BAGUIO BRANCH 60 FOR ALLOWING THE
COMPLAINANT TO AMEND THE COMPLAINT (INCREASING THE
AMOUNT OF DAMAGES TO 1,000,000.00 TO CONFER JURISDICTION
OVER THE SUBJECT MATTER OF THE CASE DESPITE THE PENDENCY OF
60
A PETITION FOR CERTIORARI FILED AT THE COURT OF APPEALS,
SEVENTH DIVISION, DOCKETED AS CA G.R. NO. 85465.[15]
In essence, the basic issues for our resolution are:
1) Did the RTC acquire jurisdiction over the case? and
2) Did the RTC commit grave abuse of discretion in allowing
the amendment of the complaint?
Petitioners insist that the complaint falls under the exclusive
jurisdiction of the MTCC. They maintain that the claim for moral
damages, in the amount of P300,000.00 in the original complaint, is
the main action. The exemplary damages being discretionary should
not be included in the computation of the jurisdictional amount. And
having no jurisdiction over the subject matter of the case, the RTC
acted with grave abuse of discretion when it allowed the amendment
of the complaint to increase the claim for moral damages in order to
confer jurisdiction.
In her Comment,[16] respondent averred that the nature of her
complaint is for recovery of damages. As such, the totality of the
claim for damages, including the exemplary damages as well as the
other damages alleged and prayed in the complaint, such as
attorneys fees and litigation expenses, should be included in
determining jurisdiction. The total claim being P420,000.00, the RTC
has jurisdiction over the complaint.
We deny the petition, which although denominated as a petition for
certiorari, we treat as a petition for review on certiorari under Rule 45
in view of the issues raised.
Section 19(8) of Batas Pambansa Blg. 129,[17] as amended by
Republic Act No. 7691,[18] states:
SEC. 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise
exclusive original jurisdiction:
xxxx
(8) In all other cases in which the demand, exclusive of interest,
damages of whatever kind, attorneys fees, litigation expenses, and
costs or the value of the property in controversy exceeds One
hundred thousand pesos (P100,000.00) or, in such other cases in

Metro Manila, where the demand, exclusive of the abovementioned
items exceeds Two hundred thousand pesos (P200,000.00).
Section 5 of Rep. Act No. 7691 further provides:
SEC. 5. After five (5) years from the effectivity of this Act, the
jurisdictional amounts mentioned in Sec. 19(3), (4), and (8); and Sec.
33(1) of Batas Pambansa Blg. 129 as amended by this Act, shall be
adjusted to Two hundred thousand pesos (P200,000.00). Five (5)
years thereafter, such jurisdictional amounts shall be adjusted further
to Three hundred thousand pesos (P300,000.00): Provided, however,
That in the case of Metro Manila, the abovementioned jurisdictional
amounts shall be adjusted after five (5) years from the effectivity of
this Act to Four hundred thousand pesos (P400,000.00).
Relatedly, Supreme Court Circular No. 21-99 was issued declaring that
the first adjustment in jurisdictional amount of first level courts
outside of Metro Manila from P100,000.00 to P200,000.00 took effect
on March 20, 1999. Meanwhile, the second adjustment from
P200,000.00 to P300,000.00 became effective on February 22, 2004
in accordance with OCA Circular No. 65-2004 issued by the Office of
the Court Administrator on May 13, 2004.
Based on the foregoing, there is no question that at the time of the
filing of the complaint on April 5, 2004, the MTCCs jurisdictional
amount has been adjusted to P300,000.00.
But where damages is the main cause of action, should the amount of
moral damages prayed for in the complaint be the sole basis for
determining which court has jurisdiction or should the total amount of
all the damages claimed regardless of kind and nature, such as
exemplary damages, nominal damages, and attorneys fees, etc., be
used?
In this regard, Administrative Circular No. 09-94[19] is instructive:
xxxx
2. The exclusion of the term damages of whatever kind in
determining the jurisdictional amount under Section 19 (8) and
Section 33 (1) of B.P. Blg. 129, as amended by R.A. No. 7691, applies
to cases where the damages are merely incidental to or a
consequence of the main cause of action. However, in cases where
the claim for damages is the main cause of action, or one of the
61
causes of action, the amount of such claim shall be considered in
determining the jurisdiction of the court. (Emphasis ours.)
In the instant case, the complaint filed in Civil Case No. 5794-R is for
the recovery of damages for the alleged malicious acts of petitioners.
The complaint principally sought an award of moral and exemplary
damages, as well as attorneys fees and litigation expenses, for the
alleged shame and injury suffered by respondent by reason of
petitioners utterance while they were at a police station in
Pangasinan. It is settled that jurisdiction is conferred by law based on
the facts alleged in the complaint since the latter comprises a concise
statement of the ultimate facts constituting the plaintiffs causes of
action.[20] It is clear, based on the allegations of the complaint, that
respondents main action is for damages. Hence, the other forms of
damages being claimed by respondent, e.g., exemplary damages,
attorneys fees and litigation expenses, are not merely incidental to or
consequences of the main action but constitute the primary relief
prayed for in the complaint.
In Mendoza v. Soriano,[21] it was held that in cases where the claim
for damages is the main cause of action, or one of the causes of
action, the amount of such claim shall be considered in determining
the jurisdiction of the court. In the said case, the respondents claim of
P929,000.06 in damages and P25,000 attorneys fees plus P500 per
court appearance was held to represent the monetary equivalent for
compensation of the alleged injury. The Court therein held that the
total amount of monetary claims including the claims for damages
was the basis to determine the jurisdictional amount.
Also, in Iniego v. Purganan,[22] the Court has held:
The amount of damages claimed is within the jurisdiction of the RTC,
since it is the claim for all kinds of damages that is the basis of
determining the jurisdiction of courts, whether the claims for
damages arise from the same or from different causes of action.
xxxx
Considering that the total amount of damages claimed was
P420,000.00, the Court of Appeals was correct in ruling that the RTC
had jurisdiction over the case.
Lastly, we find no error, much less grave abuse of discretion, on the
part of the Court of Appeals in affirming the RTCs order allowing the
 62

amendment of the original complaint from P300,000.00 to

P1,000,000.00 despite the pendency of a petition for certiorari filed
before the Court of Appeals. While it is a basic jurisprudential
principle that an amendment cannot be allowed when the court has
no jurisdiction over the original complaint and the purpose of the
amendment is to confer jurisdiction on the court,[23] here, the RTC
clearly had jurisdiction over the original complaint and amendment of
the complaint was then still a matter of right.[24]

WHEREFORE, the petition is DENIED, for lack of merit. The Decision

and Resolution of the Court of Appeals dated January 31, 2006 and
June 23, 2006, respectively, are AFFIRMED. The Regional Trial Court of
Baguio City, Branch 60 is DIRECTED to continue with the trial
proceedings in Civil Case No. 5794-R with deliberate dispatch.

No costs.

SO ORDERED.

4. [G.R. No. 160384. April 29, 2005]
CESAR T. HILARIO, for himself and as Attorney-in-Fact of IBARRA,
NESTOR, LINA and PRESCILLA, all surnamed HILARIO, petitioners, vs.
ALLAN T. SALVADOR, respondent.
HEIRS OF SALUSTIANO SALVADOR, namely, REGIDOR M. SALVADOR
and VIRGINIA SALVADOR-LIM, respondents-intervenors.
This is a petition for review on certiorari under Rule 45 of the Revised
Rules of Court of the Decision[1] of the Court of Appeals (CA) in CA-
G.R. CV No. 63737 as well as its Resolution[2] denying the motion for
the reconsideration of the said decision.
The Antecedents
On September 3, 1996, petitioners Cesar, Ibarra, Nestor, Lina and
Prescilla, all surnamed Hilario, filed a complaint with the Regional Trial
Court (RTC) of Romblon, Romblon, Branch 71, against private
respondent Allan T. Salvador. They alleged therein, inter alia, as
follows:
2. That, the plaintiffs are co-owners by inheritance from Concepcion
Mazo Salvador of a parcel of land designated as Cad. Lot No. 3113-
part, located at Sawang, Romblon, Romblon, which property was
[adjudged] as the hereditary share of their father, Brigido M. Hilario,
Jr. when their father was still single, and which adjudication was
known by the plaintiffs[] fathers co-heirs;
3. That, sometime in 1989, defendant constructed his dwelling unit of
mixed materials on the property of the plaintiffs father without the
knowledge of the herein plaintiffs or their predecessors-in-interest;
4. That, demands have been made of the defendant to vacate the
premises but the latter manifested that he have (sic) asked the prior
consent of their grandmother, Concepcion Mazo Salvador;
5. That, to reach a possible amicable settlement, the plaintiffs
brought the matter to the Lupon of Barangay Sawang, to no avail,
evidenced by the CERTIFICATE TO FILE ACTION hereto attached as
ANNEX B;
63
6. That, the unjustified refusal of the defendant to vacate the property
has caused the plaintiffs to suffer shame, humiliation, wounded
feelings, anxiety and sleepless nights;
7. That, to protect their rights and interest, plaintiffs were constrained
to engage the services of a lawyer.[3]
The petitioners prayed that, after due proceedings, judgment be
rendered in their favor, thus:
WHEREFORE, it is prayed of this Honorable Court that after due
process (sic), an order be issued for the defendant to vacate and
peacefully turn over to the plaintiffs the occupied property and that
defendant be made to pay plaintiffs:
a. actual damages, as follows:
a.1. transportation expenses in connection with the projected
settlement of the case amounting to P1,500.00 and for the
subsequent attendance to the hearing of this case at P1,500.00 each
schedule;
a.2. attorneys fees in the amount of P20,000.00 and P500.00 for
every court appearance;
b. moral and exemplary damages in such amount incumbent upon
the Honorable Court to determine; and
c. such other relief and remedies just and equitable under the
premises.[4]
The private respondent filed a motion to dismiss the complaint on the
ground of lack of jurisdiction over the nature of the action, citing
Section 33 of Batas Pambansa (B.P.) Blg. 129, as amended by Section
3(3) of Republic Act (R.A.) No. 7691.[5] He averred that
(1) the complaint failed to state the assessed value of the land in
dispute;
(2) the complaint does not sufficiently identify and/or describe the
parcel of land referred to as the subject-matter of this action;
 64

On April 8, 1997, Regidor and Virginia Salvador filed their Answer-in-

both of which are essential requisites for determining the jurisdiction
of the Court where the case is filed. In this case, however, the
assessed value of the land in question is totally absent in the
allegations of the complaint and there is nothing in the relief prayed
for which can be picked-up for determining the Courts jurisdiction as
provided by law.
Intervention[10] making common cause with the private respondent.
On her own motion, however, Virginia Salvador was dropped as
intervenor.[11]
During trial, the petitioners adduced in evidence Tax Declaration No.
8590-A showing that in 1991 the property had an assessed value of
P5,950.00.[12]

In the face of this predicament, it can nevertheless be surmised by

reading between the lines, that the assessed value of the land in
question cannot exceed P20,000.00 and, as such, it falls within the On June 3, 1999, the trial court rendered judgment finding in favor of
jurisdiction of the Municipal Trial Court of Romblon and should have the petitioners. The dispositive portion of the decision reads:
been filed before said Court rather than before the RTC. [6]

WHEREFORE, as prayed for, judgment is rendered:

The petitioners opposed the motion.[7] They contended that the RTC
had jurisdiction over the action since the court can take judicial notice
of the market value of the property in question, which was P200.00 Ordering the defendant to vacate and peacefully turn over to the
per square meter and considering that the property was 14,797 plaintiffs the occupied property; and
square meters, more or less, the total value thereof is P3,500,000.00.
Besides, according to the petitioners, the motion to dismiss was
premature and the proper time to interpose it is when the Dismissing defendants counterclaim.
[petitioners] introduced evidence that the land is of such value.

SO ORDERED.[13]
On November 7, 1996, the RTC issued an Order[8] denying the motion
to dismiss, holding that the action was incapable of pecuniary
estimation, and therefore, cognizable by the RTC as provided in
Aggrieved, the private respondent and respondent-intervenor Regidor
Section 19(1) of B.P. Blg. 129, as amended.
Salvador appealed the decision to the CA, which rendered judgment
on May 23, 2003 reversing the ruling of the RTC and dismissing the
complaint for want of jurisdiction. The fallo of the decision is as
After the denial of the motion to dismiss, the private respondent filed follows:
his answer with counterclaim.[9] Traversing the material allegations of
the complaint, he contended that the petitioners had no cause of
action against him since the property in dispute was the conjugal
IN VIEW OF THE FOREGOING, the appealed decision is REVERSED, and
property of his grandparents, the spouses Salustiano Salvador and
the case DISMISSED, without prejudice to its refilling in the proper
Concepcion Mazo-Salvador.
court.

SO ORDERED.[14]
The CA declared that the action of the petitioners was one for the
recovery of ownership and possession of real property. Absent any
allegation in the complaint of the assessed value of the property, the
Municipal Trial Court (MTC) had exclusive jurisdiction over the action,
conformably to Section 33[15] of R.A. No. 7691.
The petitioners filed a motion for reconsideration of the said decision,
which the appellate court denied.[16] Hence, they filed the instant
petition, with the following assignment of errors:
I
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE REVERSIBLE
ERROR IN HOLDING THAT THE INSTANT CASE, ACCION
REINVINDICATORIA, FALLS WITHIN THE EXCLUSIVE ORIGINAL
JURISDICTION OF THE MUNICIPAL TRIAL COURT OF ROMBLON, AND
NOT WITH THE REGIONAL TRIAL COURT OF ROMBLON.
II
THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS
REVERSIBLE ERROR IN ORDERING THE REFILING OF THE CASE IN THE
[PROPER] COURT, INSTEAD OF DECIDING THE CASE ON THE MERITS
BASED ON THE COMPLETE RECORDS ELEVATED BEFORE SAID
APPELLATE COURT AND IN NOT AFFIRMING IN TOTO THE DECISION OF
THE TRIAL COURT.[17]
The Ruling of the Court
65
The lone issue for our resolution is whether the RTC had jurisdiction
over the action of the petitioners, the plaintiffs in the RTC, against the
private respondent, who was the defendant therein.
The petitioners maintain that the RTC has jurisdiction since their
action is an accion reinvindicatoria, an action incapable of pecuniary
estimation; thus, regardless of the assessed value of the subject
property, exclusive jurisdiction falls within the said court. Besides,
according to the petitioners, in their opposition to respondents motion
to dismiss, they made mention of the increase in the assessed value
of the land in question in the amount of P3.5 million. Moreover, the
petitioners maintain that their action is also one for damages
exceeding P20,000.00, over which the RTC has exclusive jurisdiction
under R.A. No. 7691.
The petition has no merit.
It bears stressing that the nature of the action and which court has
original and exclusive jurisdiction over the same is determined by the
material allegations of the complaint, the type of relief prayed for by
the plaintiff and the law in effect when the action is filed, irrespective
of whether the plaintiffs are entitled to some or all of the claims
asserted therein.[18] The caption of the complaint is not
determinative of the nature of the action. Nor does the jurisdiction of
the court depend upon the answer of the defendant or agreement of
the parties or to the waiver or acquiescence of the parties.
We do not agree with the contention of the petitioners and the ruling
of the CA that the action of the petitioners in the RTC was an accion
reinvindicatoria. We find and so rule that the action of the petitioners
was an accion publiciana, or one for the recovery of possession of the
real property subject matter thereof. An accion reinvindicatoria is a
suit which has for its object the recovery of possession over the real
property as owner. It involves recovery of ownership and possession

based on the said ownership. On the other hand, an accion publiciana
is one for the recovery of possession of the right to possess. It is also
referred to as an ejectment suit filed after the expiration of one year
after the occurrence of the cause of action or from the unlawful
withholding of possession of the realty.[19]
The action of the petitioners filed on September 3, 1996 does not
involve a claim of ownership over the property. They allege that they
are co-owners thereof, and as such, entitled to its possession, and
that the private respondent, who was the defendant, constructed his
house thereon in 1989 without their knowledge and refused to vacate
the property despite demands for him to do so. They prayed that the
private respondent vacate the property and restore possession
thereof to them.
When the petitioners filed their complaint on September 3, 1996, R.A.
No. 7691 was already in effect. Section 33(3) of the law provides:
Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts
and Municipal Circuit Trial Courts in Civil Cases. Metropolitan Trial
Courts, Municipal Trial Courts and Municipal Circuit Trial Courts shall
exercise:
(3) Exclusive original jurisdiction in all civil actions which involve title
to, or possession of, real property, or any interest therein where the
assessed value of the property or interest therein does not exceed
Twenty Thousand Pesos (P20,000.00) or, in civil actions in Metro
Manila, where such assessed value does not exceed Fifty Thousand
Pesos (P50,000.00) exclusive of interest, damages of whatever kind,
attorneys fees, litigation expenses and costs: Provided, That in cases
of land not declared for taxation purposes, the value of such property
shall be determined by the assessed value of the adjacent lots.
Section 19(2) of the law, likewise, provides that:
66
Sec. 19. Jurisdiction in civil cases. The Regional Trial Court shall
exercise exclusive original jurisdiction:
(2) In all civil actions, which involve the title to, or possession of, real
property, or any interest therein, where the assessed value of the
property involved exceeds Twenty Thousand Pesos (P20,000.00) or,
for civil actions in Metro Manila, where such value exceeds Fifty
Thousand Pesos (P50,000.00) except actions for forcible entry into
and unlawful detainer of lands or buildings, original jurisdiction over
which is conferred upon the Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts.
The jurisdiction of the court over an action involving title to or
possession of land is now determined by the assessed value of the
said property and not the market value thereof. The assessed value of
real property is the fair market value of the real property multiplied by
the assessment level. It is synonymous to taxable value.[20] The fair
market value is the price at which a property may be sold by a seller,
who is not compelled to sell, and bought by a buyer, who is not
compelled to buy.
Even a cursory reading of the complaint will show that it does not
contain an allegation stating the assessed value of the property
subject of the complaint.[21] The court cannot take judicial notice of
the assessed or market value of lands.[22] Absent any allegation in
the complaint of the assessed value of the property, it cannot thus be
determined whether the RTC or the MTC had original and exclusive
jurisdiction over the petitioners action.
We note that during the trial, the petitioners adduced in evidence Tax
Declaration No. 8590-A, showing that the assessed value of the
property in 1991 was P5,950.00. The petitioners, however, did not
bother to adduce in evidence the tax declaration containing the
assessed value of the property when they filed their complaint in
 67

1996. Even assuming that the assessed value of the property in 1991
was the same in 1995 or 1996, the MTC, and not the RTC had
jurisdiction over the action of the petitioners since the case involved
title to or possession of real property with an assessed value of less
than P20,000.00.[23]
We quote with approval, in this connection, the CAs disquisition:
The determining jurisdictional element for the accion reinvindicatoria
is, as RA 7691 discloses, the assessed value of the property in
question. For properties in the provinces, the RTC has jurisdiction if
the assessed value exceeds P20,000, and the MTC, if the value is
P20,000 or below. An assessed value can have reference only to the
tax rolls in the municipality where the property is located, and is
contained in the tax declaration. In the case at bench, the most
recent tax declaration secured and presented by the plaintiffs-
appellees is Exhibit B. The loose remark made by them that the
property was worth 3.5 million pesos, not to mention that there is
absolutely no evidence for this, is irrelevant in the light of the fact
that there is an assessed value. It is the amount in the tax declaration
that should be consulted and no other kind of value, and as appearing
in Exhibit B, this is P5,950. The case, therefore, falls within the
exclusive original jurisdiction of the Municipal Trial Court of Romblon
which has jurisdiction over the territory where the property is located,
and not the court a quo.[24]
litigation expenses, and costs. This Court issued Administrative
Circular No. 09-94 setting the guidelines in the implementation of R.A.
No. 7691, and paragraph 2 thereof states that
2. The exclusion of the term damages of whatever kind in determining
the jurisdictional amount under Section 19(8) and Section 33(1) of
B.P. Blg. 129, as amended by R.A. 7691, applies to cases where the
damages are merely incidental to or a consequence of the main cause
of action. However, in cases where the claim for damages is the main
cause of action, or one of the causes of action, the amount of such
claim shall be considered in determining the jurisdiction of the court.
Neither may the petitioners find comfort and solace in Section 19(8)
of B.P. Blg. 129, as amended, which states:
SEC. 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise
exclusive original jurisdiction:
(8) In all other cases in which the demand, exclusive of interest,
damages of whatever kind, attorney's fees, litigation expenses, and
costs or the value of the property in controversy exceeds One
Hundred Thousand Pesos (P100,000.00) or, in such other cases in
Metro Manila, where the demand, exclusive of the above-mentioned
items exceeds Two Hundred Thousand Pesos (P200,000.00).

It is elementary that the tax declaration indicating the assessed value

of the property enjoys the presumption of regularity as it has been
The said provision is applicable only to all other cases other than an
issued by the proper government agency.[25]
action involving title to, or possession of real property in which the
assessed value is the controlling factor in determining the courts
jurisdiction. The said damages are merely incidental to, or a
Unavailing also is the petitioners argumentation that since the consequence of, the main cause of action for recovery of possession
complaint, likewise, seeks the recovery of damages exceeding of real property.[26]
P20,000.00, then the RTC had original jurisdiction over their actions.
Section 33(3) of B.P. Blg. 129, as amended, quoted earlier, explicitly
excludes from the determination of the jurisdictional amount the
demand for interest, damages of whatever kind, attorneys fees,
 68

Since the RTC had no jurisdiction over the action of the petitioners, all WHEREFORE, the petition is DENIED. The assailed Decision and
the proceedings therein, including the decision of the RTC, are null Resolution of the Court of Appeals in CA-G.R. CV No. 63737 are
and void. The complaint should perforce be dismissed.[27] AFFIRMED. Costs against the petitioners.

SO ORDERED.