CIVIL PROCEDURE 2014 | ATTY.
CUSTODIO
TRICIA CRUZ
JDCTR – DLSU LAW
1st Meeting
La Naval Drug Corp v. CA and Yao
FACTS:
- Yao is present owner of a commercial bldg a portion of which is leased to
P under a contract of lease which expired year 1989.
- P exercised its option to lease same bldg for another 5 years but P & R
disagreed on the rental rate.
- P, to resolve controversy, submitted to arbitration pursuant to RA 876.
- R appointed Alamarez as arbitrator while P chose Sabile as its arbitrator.
The confirmation of the appointment of a third arbitrator Tupang, was
held in abeyance because P instructed Sabile to defer the same until the
BoD could convene approve Tupang’s appointment. This was accdg to R,
P’s dilatory tactic in violation of the Arbitration Law and the governing
stipulation.
- R prayed that after summary hearing pursuant to Sec. 6 of the A.Law,
Sabile and Alamarez be directed to proceed with the arbitration in acc
with Sec. 7 of the Contract and the applicable provisions of the law; and
that the Board of Three Arbitrators be ordered to convene and resolve
controversy.
- P denied the averments of petition theorizing that such petition is
premature since there was failure of notice on the part of R requiring
both arbitrators to appoint third member of the BoA. It gave the
arbitrators a free hand in choosing the third arbitrator, thus, R has no
cause of action against it.
- R filed an amended petition for “Enforcement of Arbitration Agreement
with Damages;” praying that petitioner be ordered to pay interest on the
unpaid rents (prevailing interest) and exemplary damages.
- P answered, contending among others, that amended petition should be
dismissed OTG of non-payment of requisite filing fees; and it being in the
nature of an ordinary civil action, a full blown and regular trial is
necessary. P presented a “Motion to Set Case for Preliminary Hearing” of
its special and affirmative defenses which are grounds for a motion to
dismiss.
- Resp Court announced that the two arbitrators chose Narciso as third
arbitrator. It also ordered the parties to submit position papers re: w/n
resp Yao’s claim for damages may be litigated upon in the summary
proceeding for enforcement of arbitration agreement.
- P argued that respondent court sits as a a special court exercising limited
jurisdiction and not competent to act on R’s claim for damages which
poses an issue litigable in an ordinary civil action.
- Appellate court considered P in estoppel from questioning the
competence of the court to additionally hear and decide in the summary
proceedings R’s claim for damages, it (P) having itself filed similarly its
counterclaim with the court a quo.
ISSUE: W/N the submission of other issues in a motion to dismiss, or of an
affirmative defense in an answer, would necessarily foreclose and have the effect
of a waiver of, the right of a defendant to set up the court’s lack of jurisdiction over
the person of the defendant?
RULING: Not inevitably. Section 1, Rule 16 of the Rules provides the grounds for a
motion to dismiss. Any of these grounds, except improper venue, may be pleaded
as an affirmative defense (admits the material allegations of the complaint but has
the effect of preventing recovery by plaintiff) may be had as if a motion to dismiss
had been filed.
It appears that it is not the invocation of any of such defenses, but the failure to so
raise them, that can result in waiver or estoppel.
Lack of jurisdiction over the subject matter of the suit is yet another matter.
Whenever it appears that the court has no jurisdiction over the subject matter, the
action shall be dismissed (Sec. 2, Rule 9). However, jurisdiction over the nature the
action, in concept, differs from jurisdiction over the subject matter. Lack of
jurisdiction over the nature of the action is the situation that arises when a court,
which ordinarily would have the authority and competence to take a case, is
rendered without it either because a special law has limited the exercise of its
normal jurisdiction on a particular matter or because the type of action has been
reposed by law in certain other courts or quasi-judicial agencies for determination.
(1) Jurisdiction over the person must be seasonably raised, i.e., that it is
pleaded in a motion to dismiss or by way of an affirmative defense in an
answer. Voluntary appearance shall be deemed a waiver of this defense.
The assertion, however, of affirmative defenses shall not be constructed
as an estoppel or as a waiver of such defense.
(2) Where the court itself clearly has no jurisdiction over the subject matter
or the nature of the action, the invocation of this defense may be done at
any time. It is neither for the courts nor the parties to violate or disregard
CIVIL PROCEDURE 2014 | ATTY. CUSTODIO
TRICIA CRUZ
JDCTR – DLSU LAW
that rule, let alone to confer that jurisdiction, this matter being legislative
in character. Barring highly meritorious and exceptional circumstances,
such as hereinbefore exemplified, neither estoppel nor waiver shall
apply.
In the case at bench, the want of jurisdiction by the court is indisputable, given the
nature of the controversy. The arbitration law explicitly confines the court's
authority only to pass upon the issue of whether there is or there is no agreement
in writing providing for arbitration. In the affirmative, the statute ordains that the
court shall issue an order "summarily directing the parties to proceed with the
arbitration in accordance with the terms thereof." If the court, upon the other
hand, finds that no such agreement exists, "the proceeding shall be dismissed." The
proceedings are summary in nature.
All considered, the court a quo must then refrain from taking up the claims of the
contending parties for damages, which, upon the other hand, may be ventilated in
separate regular proceedings at an opportune time and venue.
Atwel v. Concepcion Progressive Asso Inc.
FACTS:
- Assemblyman Emilio Melgazo founded and organized Concepcion
Progressive Association (CPA) in Hilongos, Leyte. The organization aimed
to provide livelihood to and generate income for his supporters.
- Melgazo was elected President. He then bought a parcel of land in behalf
of the association. The property was later on converted into a wet market
where agricultural, livestock and other farm products were sold. It also
housed a cockpit and an area for various forms of amusement. The
income generated from the property, mostly rentals from the wet
market, was paid to CPA.
- When Emiliano Melgazo died, his son, petitioner Manuel Melgazo,
succeeded him as CPA president and administrator of the property. On
the other hand, petitioners Atwel and Pilpil were elected as CPA vice-
president and treasurer, respectively.
- While CPA was in the process of registering as a stock corporation, its
other elected officers and members formed their own group and
registered themselves in the SEC officers and members of respondent
Concepcion Progressive Association, Inc. (CPAI). Petitioners were not
listed either as officers or members of CPAI. Later, CPAI objected to
petitioners' collection of rentals from the wet market vendors.
- CPAI filed a case in the SEC for mandatory injunction.5 With the passage
of RA 8799, the case was transferred to Branch 24 of the Southern Leyte
RTC and subsequently, to Branch 8 of the Tacloban City RTC. Both were
special commercial courts.
- CPAI alleged that it was the owner of the property and petitioners,
without authority, were collecting rentals from the wet market vendors.
Petitioners refuted CPAI's claim saying that it was preposterous and
impossible for the latter to have acquired ownership over the property in
1968 when it was only in 1997 that it was incorporated and registered
with the SEC. Petitioners was purchased using the money of petitioner
Manuel Melgazo's father (the late Emiliano Melgazo), it belonged to the
latter.
- The special commercial court ruled that the deed of sale covering the
property was in the name of CPA, not Emiliano Melgazo. It also
considered CPA to be one and the same as CPAI.
- Petitioners went to the CA and contested the jurisdiction of the special
commercial court over the case. According to them, they were not CPAI
members, hence the case did not involve an intra-corporate dispute
"between and among members" so as to warrant the special commercial
court's jurisdiction over it.
- CPAI, on the other hand, argued that petitioners were already in estoppel
as they had participated actively in the court proceedings – to which the
CA agreed.
- CA held that the fact that “petitioners are admittedly not members of
CPAI, then, the special commercial court should not have taken
cognizance of the case as it exercises special and limited jurisdiction
under R.A. No. 8799. However, as correctly argued and pointed out by
CPAI, the acts of the petitioners, through their counsel, in participating in
the trial of the case...show that they themselves consider the trial court
to have jurisdiction over the case.”
- Petitioners essentially argue that estoppel cannot apply because a court's
jurisdiction is conferred exclusively by the Constitution or by law, not by
the parties' agreement or by estoppel.
ISSUE/S:
1. W/N the court a quo has jurisdiction over the case?
2. Did the doctrine of estoppel bar petitioners from questioning the
jurisdiction of the special commercial court?
CIVIL PROCEDURE 2014 | ATTY. CUSTODIO
TRICIA CRUZ
JDCTR – DLSU LAW
RULING:
1. NONE. Originally, section 5 of Presidential Decree (PD) 902-A13 conferred
on the SEC original and exclusive jurisdiction over “intra-corporate
controversies.” However, the jurisdiction of the SEC over such and other
cases enumerated under it were later on transferred to the courts of
general jurisdiction pursuant to the enactment of RA 8799.
To determine whether a case involves an intra-corporate controversy to
be heard and decided by the RTC, two elements must concur: (1) the
status or relationship of the parties and; (2) the nature of the question
that is subject of their controversy. These elements were not present in
the case at bar. Moreover, the issue in this case does not concern the
regulation of CPAI or even CPA. The determination as to who is the true
owner of the disputed property should be threshed out in a regular court.
Cases of this nature are cognizable by the RTC under BP 129. Therefore,
the conflict among the parties here was outside the jurisdiction of the
special commercial court.
2. NO. The rule remains that estoppel does not confer jurisdiction on a
tribunal that has none over the cause of action or subject matter of the
case. Unfortunately for CPAI, no exceptional circumstance appears in this
case to warrant divergence from the rule. Jurisdiction by estoppel is not
available here. Consequently, CPAI cannot be permitted to wrest from
petitioners (as the remaining CPA officers) the administration of the
disputed property until after the parties' rights are clearly adjudicated in
the proper courts. It is neither fair nor legal to bind a party to the result
of a suit or proceeding in a court with no jurisdiction. The decision of a
tribunal not vested with the appropriate jurisdiction is null and void.
City of Bacolod v. San Miguel
FACTS:
- On February 17, 1949, the City Council of Bacolod passed Ordinance No.
66, series of 1949 imposing upon "any person, firm or corporation
engaged in the manufacturer bottling of coca-cola, pepsi cola, tru orange,
lemonade, and other soft drinks within the jurisdiction of the City of
Bacolod, ... a fee of ONE TWENTY-FOURTH (1/24) of a centavo for every
bottle thereof," plus "a surcharge of 2% every month, but in no case to
exceed 24% for one whole year," upon "such local manufacturers or
bottler above-mentioned who will be delinquent on any amount of fees
due" under the ordinance. This ordinance was subsequently amended by
Ordinance No. 150 by increasing the fee to 1/8 of a centavo for every
bottle thereof.
- Such increase was opposed by the appellant San Miguel.
- Appellee CoB sued appellant SM. Court rendered judgment in favor of
CoB ordering SM to pay it the sum of P26K and the tax at the rate of 3
centavos oer case.
- Appellant SM appealed from the said decision to this Court where it
pressed the question of the invalidity of the abovementioned taxing
ordinances. In that appeal, however, the Court affirmed the decision
appealed from and upheld the constitutionality of the questioned
ordinances and the authority of the appellee to enact the same.
- For reasons not extant in the record, it was already after this decision had
become final when appellee moved for the reconsideration thereof,
praying that the same be amended so as to include the penalties and
surcharges provided for in the ordinances.
- Said motion was denied, for the reason that "the decision is already final
and may not be amended." When execution was had before the lower
court, the appellee again sought the inclusion of the surcharges referred
to; and once again the move was frustrated by the Court of First Instance
of Negros Occidental which denied the motion.
- Failing thus in its attempt to collect the surcharge provided for in the
ordinances, appellee filed a second action to collection the said
surcharges (P36K).
- Appellant SM filed a motion to dismiss the case on the grounds that: (1)
the cause of action is barred by a prior judgment, and (2) a party may not
institute more than one suit for a single cause of action. This motion was
denied by the court a quo so appellant filed its answer wherein it
substantially reiterated, as affirmative defenses, the above-mentioned
grounds of its motion to dismiss. Thereafter, the parties submitted the
case for judgment on the pleadings, whereupon, the court rendered
judgment ordering the defendant San Miguel Brewery, Inc. to pay to the
plaintiff the sum of P36,519.10 representing the surcharges as provided
in section 4 of Ordinance 66, series of 1949 of the City of Bacolod.
ISSUE: W/N petitioner’s act of filing another action for surcharges constitutes
splitting of action?
RULING: YES. Appellant SM’s position was upheld by the Court. There is no
question that appellee split up its cause of action when it filed the first complaint
CIVIL PROCEDURE 2014 | ATTY. CUSTODIO
TRICIA CRUZ
JDCTR – DLSU LAW
seeking the recovery of only the bottling taxes or charges plus legal interest,
without mentioning in any manner the surcharges.
The rule on the matter is clear. Sections 3 and 4 of Rule 2 of the Rules of Court of
1940 which were still in force then provided:
SEC. 3. Splitting a cause of action, forbidden. — A single cause of action
cannot be split up into two or more parts so as to be made the subject of
different complaints. .
SEC. 4. Effect of splitting. — If separate complaints were brought for
different parts of a single cause of action, the filing of the first may be
pleaded in abatement of the others, and a judgment upon the merits in
either is available as a bar in the others.
Indeed, this rule against the splitting up of a cause of action is an old one. In fact, it
preceded the Rules of Court or any statutory provision.
The classical definition of a cause of action is that it is "a delict or wrong by which
the rights of the plaintiff are violated by the defendant." Its elements may be
generally stated to be (1) a right existing in favor of the plaintiff; (2) a
corresponding obligation on the part of the defendant to respect such right; and (3)
an act or omission of the plaintiff which constitutes a violation of the plaintiff's
right which defendant had the duty to respect. In the last analysis, a cause of action
is basically an act or an omission or several acts or omissions. A single act or
omission can be violative of various rights at the same time, as when the act
constitutes juridically a violation of several separate and distinct legal obligations.
On the other hand, it can happen also that several acts or omissions may violate
only one right, in which case, there would be only one cause of action. Again the
violation of a single right may give rise to more than one relief. In other words, for
a single cause of action or violation of a right, the plaintiff may be entitled to
several reliefs. It is the filing of separate complaints for these several reliefs that
constitutes splitting up of the cause of action. This is what is prohibited by the rule.
In the case at bar, when appellant failed and refused to pay the difference in
bottling charges such act of appellant in violation of the right of appellee to be paid
said charges in full under the Ordinance, was one single cause of action, but under
the Ordinance, appellee became entitled, as a result of such non-payment, to two
reliefs, namely: (1) the recovery of the balance of the basic charges; and (2) the
payment of the corresponding surcharges, the latter being merely a consequence
of the failure to pay the former.
The obligation of appellant to pay the surcharges arose from the violation by said
appellant of the same right of appellee from which the obligation to pay the basic
charges also arose. Upon these facts, it is obvious that appellee has filed separate
complaints for each of two reliefs related to the same single cause of action,
thereby splitting up the said cause of action.
Jalandoni v. Martir-Guanzon
FACTS:
- On January 9, 1947, the appellant spouses began a suit (Case No. 573)
against the appellees Antonio Guanzon, eta al., for partition of various
lots and for recovery of damages caused by the defendants' unwarranted
refusal to recognize plaintiffs' right and partition said lots, as was to
account for and deliver plaintiff's share in the crops obtained during the
agricultural years from 1941-1942 to 1946-1947.
- Court of First Instance of Negros Occidental held for plaintiffs and
ordered the partition of the lands involved, but denied their claim for
damages because of failure to "prove the exact and actual damages
suffered by them.
- The decision having become final because none of the parties appealed
therefrom, the plaintiffs instituted the present action seeking recovery
from the defendants for moral and exemplary damages, share of the
products of the property from 1947 until 1955, taxes due unpaid and
attorney’s fees.
- Upon motion of defendant's, the court a quo dismissed the second
complaint for failure to state a cause of action; and after their motion to
reconsider was denied, plaintiffs appealed to this Court on points of law.
ISSUE: W/N dismissal was proper?
RULING: YES. The Court found the dismissal of the lower court to have been
correctly entered. Except as concomitant to physical injuries, moral and corrective
damages (allegedly due to suffering, anguish and axiety caused by the refusal of
defendants in 1941 to partition the common property) were not recoverable under
the Civil Code of 1899 which was the governing law at the time. Recovery of such
damages was established for the first time in 1950 by the new Civil Code, and
action not be made to apply retroactively to acts that occurred character of these
damages. The rule is expressly laid down by paragraph 1 of Article 2257 of the new
Code.
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JDCTR – DLSU LAW
As to the value of the plaintiff's share in the products of the land during the time
that the former action was pending (which are the damages claimed under the
second cause of action), their recovery is now barred by the previous judgment.
In the same way that plaintiffs claimed for their share of the produce from 1941 to
1947, these later damages could have been claimed in the first action, either in the
original complaint or else by supplemental pleading. To allow them to be
recovered by subsequent suit would be a violation of the rule against multiplicity
of suits, and specifically of sections 3 and 4 of Rules 2 of the Rules of Court,
against the splitting of causes of action, since these damages spring from the
same cause of action that was pleading in the former case No. 573 between the
same parties.
Anent the land taxes allegedly overdue and unpaid, it is readily apparent that, taxes
been due to the government, plaintiffs have no right to compel payment thereof to
themselves. Little need be said concerning the claim for attorney's fees under the
fourth cause of action. If they be fees for the lawyer's services in the former case,
they are barred from recovery for the reasons already given; if for services in the
present case, there is no jurisdiction therefor, since no case is made out for the
plaintiffs.
Joseph v. Bautista
FACTS:
- Respondent Patrocinio Perez is the owner of a cargo truck for conveying
cargoes and passengers for a consideration from Dagupan City to Manila.
- Said cargo truck driven by defendant Domingo Villa was on its way to
Valenzuela, Bulacan from Pangasinan. Petitioner, with a cargo of
livestock, boarded the cargo truck at Dagupan City. While said cargo truck
was negotiating the National Highway proceeding towards Manila,
defendant Domingo Villa tried to overtake a tricycle likewise proceeding
in the same direction.
- At about the same time, a pick-up truck, supposedly owned by
respondents Antonio Sioson and Jacinto Pagarigan, then driven by
respondent Lazaro Villanueva, tried to overtake the cargo truck thereby
forcing the cargo truck to veer towards the shoulder of the road and to
ram a mango tree. As a result, petitioner sustained a bone fracture in one
of his legs.
- Petitioner filed a complaint for damages against respondent Patrocinio
Perez, as owner of the cargo truck, based on a breach of contract of
carriage and against respondents Antonio Sioson and Lazaro Villanueva,
as owner and driver, respectively, of the pick-up truck, based on quasi-
delict.
- Respondent Sioson filed his answer alleging that he is not and never was
an owner of the pick-up truck and neither would he acquire ownership
thereof in the future.
- Petitioner, with prior leave of court, filed his amended complaint
impleading respondents Jacinto Pagarigan and a certain Rosario Vargas as
additional alternative defendants. Petitioner apparently could not
ascertain who the real owner of said cargo truck was, whether
respondents Patrocinio Perez or Rosario Vargas, and who was the real
owner of said pick-up truck, whether respondents Antonio Sioson or
Jacinto Pagarigan.
- Respondent Perez filed her amended answer with crossclaim against her
co-defendants for indemnity and subrogation in the event she is ordered
to pay petitioner's claim, and therein impleaded cross-defendant Alberto
Cardeno as additional alternative defendant.
- Respondents Lazaro Villanueva, Alberto Cardeno, Antonio Sioson and
Jacinto Pagarigan, thru their insurer, Insurance Corporation of the
Philippines, paid petitioner's claim for injuries sustained. And by reason
thereof, petitioner executed a release of claim releasing them from
liability.
- A few months after, they also paid respondent Patrocinio Perez' claim for
damages to her cargo truck. Consequently, respondents Sioson,
Pagarigan, Cardeno and Villanueva filed a "Motion to Exonerate and
Exclude Defs/ Cross defs. Alberto Cardeno, Lazaro Villanueva, Antonio
Sioson and Jacinto Pagarigan on the Instant Case", alleging that
respondents Cardeno and Villanueva already paid damages to
respondent Perez, and alleging further that respondents Cardeno,
Villanueva, Sioson and Pagarigan paid an amount to petitioner.
- Thereafter, respondent Perez filed her "Opposition to Cross-defs.' motion
and Counter Motion" to dismiss. The so-called counter motion to dismiss
was premised on the fact that the release of claim executed by petitioner
in favor of the other respondents inured to the benefit of respondent
Perez, considering that all the respondents are solidarity liable to herein
petitioner.
- Respondent judge issued the questioned order dismissing the case, and a
motion for the reconsideration thereof was denied.
CIVIL PROCEDURE 2014 | ATTY. CUSTODIO
TRICIA CRUZ
JDCTR – DLSU LAW
- Petitioner, by way of appeal, contends that respondent judge erred in
declaring that the release of claim executed by petitioner in favor of
respondents Sioson, Villanueva and Pagarig.
ISSUE: W/N petitioner’s contention is correct?
RULING: NO. The singleness of a cause of action lies in the singleness of the- delict
or wrong violating the rights of one person. Nevertheless, if only one injury
resulted from several wrongful acts, only one cause of action arises. In the case at
bar, there is no question that the petitioner sustained a single injury on his person.
That vested in him a single cause of action, albeit with the correlative rights of
action against the different respondents through the appropriate remedies allowed
by law.
The trial court was, therefore, correct in holding that there was only one cause of
action involved although the bases of recovery invoked by petitioner against the
defendants therein were not necessarily identical since the respondents were not
identically circumstanced. However, a recovery by the petitioner under one
remedy necessarily bars recovery under the other. This, in essence, is the rationale
for the proscription in our law against double recovery for the same act or omission
which, obviously, stems from the fundamental rule against unjust enrichment.
There is no question that the respondents herein are solidarily liable to petitioner.
On the evidence presented in the court below, the trial court found them to be so
liable. It is undisputed that petitioner, in his amended complaint, prayed that the
trial court hold respondents jointly and severally liable.
The respondents having been found to be solidarity liable to petitioner, the full
payment made by some of the solidary debtors and their subsequent release from
any and all liability to petitioner inevitably resulted in the extinguishment and
release from liability of the other solidary debtors, including herein respondent
Patrocinio Perez.
Sarsaba v. Vda. De Te represented by Attorney-in-Fact Faustino Castaneda
FACTS:
- A Decision was rendered in NLRC Case entitled, Patricio Sereno v.
Teodoro Gasing/Truck Operator, finding Sereno to have been illegally
dismissed and ordering Gasing to pay him his monetary claims in the
amount of P43,606.47.
- After the Writ of Execution was returned unsatisfied, Labor Arbiter
Newton R. Sancho issued an Alias Writ of Execution, directing Fulgencio
R. Lavarez, Sheriff II of NLRC, to satisfy the judgment award.
- Lavarez, accompanied by Sereno and his counsel, petitioner Atty. Rogelio
E. Sarsaba, levied a Fuso Truck bearing License Plate No. LBR-514, which
at that time was in the possession of Gasing. Said truck was sold at public
auction, with Sereno appearing as highest bidder.
- Meanwhile, respondent Fe Vda. de Te, represented by her attorney-in-
fact, Faustino Castañeda, filed with the RTC a Complaint for recovery of
motor vehicle, damages with prayer for the delivery of the truck
pendente lite against petitioner, Sereno, Lavarez and the NLRC. She
alleged the ff: (1) she is the wife of the late Pedro Te, the registered
owner of the truck; (2) Gasing merely rented the truck from her; (3)
Lavarez erroneously assumed that Gasing owned the truck because he
was, at the time of the "taking," in possession of the same; and (4) since
neither she nor her husband were parties to the labor case between
Sereno and Gasing, she should not be made to answer for the judgment
award, much less be deprived of the truck as a consequence of the levy in
execution.
- Petitioner filed a Motion to Dismiss on the ff. grounds: (1) respondent has
no legal personality to sue, having no real interests over the property
subject of the instant complaint; (2) the allegations in the complaint do
not sufficiently state that the respondent has cause of action; (3) the
allegations in the complaint do not contain sufficient cause of action as
against him; and (4) the complaint is not accompanied by an Affidavit of
Merit and Bond that would entitle the respondent to the delivery of the
truck pendente lite.
- The NLRC also filed a Motion to Dismiss on the grounds of lack of
jurisdiction and lack of cause of action.
- Meanwhile, Lavarez filed an Answer with Compulsory Counterclaim and
Third-Party Complaint. By way of special and affirmative defenses, he
asserted that the RTC does not have jurisdiction over the subject matter
and that the complaint does not state a cause of action.
- RTC issued an Order denying petitioner's Motion to Dismiss for lack of
merit.
- Petitioner denied the material allegations in the complaint. Lavarez filed
a Motion for Inhibition which was opposed by respondent.
- RTC issued an Order of inhibition and directed the transfer of the records.
RTC issued another Order denying the separate motions to dismiss filed
by NLRC and Lavarez.
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- Petitioner filed an Omnibus Motion to Dismiss the Case on the ff grounds:
(1) lack of jurisdiction over one of the principal defendants; and (2) to
discharge respondent’s attorney-in-fact for lack of legal personality to
sue.
- Respondent Fe Vda. De Te DIED. Respondent, through her lawyer, Atty.
William G. Carpentero, filed an Opposition, contending that the failure to
serve summons upon Sereno is not a ground for dismissing the
complaint, because the other defendants have already submitted their
respective responsive pleadings.
- RTC issued the assailed Order denying petitioner’s Omnibus Motion to
Dismiss.
- Petitioner then filed a Motion for Reconsideration with Motion for
Inhibition in which he claimed that the judge who issued the Order was
biased and partial.
- Petitioner then directly sought recourse from the SC via the present
petition involving purely questions of law, which he claimed were
resolved by the RTC contrary to law and existing jurisprudence.
- Petitioner submits pure questions of law involving the effect of non-
service of summons following the death of the person to whom it should
be served, and the effect of the death of the complainant during the
pendency of the case. Petitioner argues that, since Sereno died before
summons was served on him, the RTC should have dismissed the
complaint against all the defendants and that the same should be filed
against his estate.
- Petitioner asks that the complaint should be dismissed, not only against
Sereno, but as to all the defendants, considering that the RTC did not
acquire jurisdiction over the person of Sereno.
- Petitioner also moves that respondent's attorney-in-fact, Faustino
Castañeda, be discharged as he has no more legal personality to sue on
behalf of Fe Vda. de Te, who passed away on April 12, 2005, during the
pendency of the case before the RTC.
ISSUE: (Relevant in this topic) Effect of Death of party
RULING: Jurisdiction over a party is acquired by service of summons by the sheriff,
his deputy or other proper court officer, either personally by handing a copy
thereof to the defendant or by substituted service. On the other hand, summons is
a writ by which the defendant is notified of the action brought against him. Service
of such writ is the means by which the court may acquire jurisdiction over his
person.
Petitioner raises the issue of lack of jurisdiction over the person of Sereno, not in
his Motion to Dismiss or in his Answer but only in his Omnibus Motion to Dismiss.
Having failed to invoke this ground at the proper time, that is, in a motion to
dismiss, petitioner cannot raise it now for the first time on appeal.
The court's failure to acquire jurisdiction over one's person is a defense which is
personal to the person claiming it. Obviously, it is now impossible for Sereno to
invoke the same in view of his death. Neither can petitioner invoke such ground, on
behalf of Sereno, so as to reap the benefit of having the case dismissed against all
of the defendants. Failure to serve summons on Sereno's person will not be a
cause for the dismissal of the complaint against the other defendants,
considering that they have been served with copies of the summons and
complaints and have long submitted their respective responsive pleadings. In
fact, the other defendants in the complaint were given the chance to raise all
possible defenses and objections personal to them in their respective motions to
dismiss and their subsequent answers.
Patricio Sereno died before the summons, together with a copy of the complaint
and its annexes, could be served upon him. However, the failure to effect service of
summons unto Patricio Sereno, one of the defendants herein does not render the
action DISMISSIBLE, considering that the three (3) other defendants, namely, Atty.
Rogelio E. Sarsaba, Fulgencio Lavares and the NLRC, were validly served with
summons and the case with respect to the answering defendants may still proceed
independently. Be it recalled that the three (3) answering defendants have
previously filed a Motion to Dismiss the Complaint which was denied by the Court.
Hence, only the case against Patricio Sereno will be DISMISSED and the same may
be filed as a claim against the estate of Patricio Sereno, but the case with respect to
the three (3) other accused will proceed.
As for the issue regarding the respondent’s attorney-in-fact, While it may be true
as alleged by defendants that with the death of Plaintiff, Fe Vda. de Te, the Special
Power of Attorney she executed empowering the Attorney-in-fact, Faustino
Castañeda to sue in her behalf has been rendered functus officio, however, this
Court believes that the Attorney-in-fact had not lost his personality to prosecute
this case.
Records reveal that the Attorney-in-fact has testified long before in behalf of the
said plaintiff and more particularly during the state when the plaintiff was
vehemently opposing the dismissal of the complainant. Subsequently thereto, he
even offered documentary evidence in support of the complaint, and this court
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admitted the same. When this case was initiated, jurisdiction was vested upon this
Court to try and hear the same to the end. Well-settled is the rule to the point of
being elementary that once jurisdiction is acquired by this Court, it attaches until
the case is decided.
Thus, the proper remedy here is the Substitution of Heirs and not the dismissal of
this case which would work injustice to the plaintiff.
SEC. 16, RULE 3 provides for the substitution of the plaintiff who dies
pending hearing of the case by his/her legal heirs. As to whether or not
the heirs will still continue to engage the services of the Attorney-in-fact
is another matter, which lies within the sole discretion of the heirs.
Gonzales v. PAGCOR
FACTS:
- Ramon A. Gonzales, as a citizen, taxpayer and member of the Philippine
Bar, filed on September 28, 2000 the instant Petition as a class suit under
Section 12, Rule 3 of the Rules of Court seeking to restrain PAGCOR from
continuing its operations and prohibit it and its co-respondents from
enforcing: (1) the "Grant of an Authority and Agreement for the
Operation of Sports Betting and Internet Gambling" executed between
PAGCOR and SAGE; (2) the "Grant of Authority to Operate Computerized
Bingo Games"4 between PAGCOR and BEST WORLD; and (3) the
"Agreement” among PAGCOR, BELLE and FILGAME to conduct jai-alai
operations.
- Petition was given due course. Consequently, the parties were required
to submit their respective Memoranda. Only respondents PAGCOR and
SAGE submitted their Memoranda, on December 6, 2001 and January 24,
2002, respectively. Gonzales having failed to file his Memorandum within
the prescribed period, this Court which, in the meantime, was informed
of the alleged demise of Gonzales, required by Resolution 1) respondents
to confirm the death of Gonzales, and 2) the parties to manifest whether
they were still interested in prosecuting the petition, or whether
supervening events had rendered it moot and academic.
- On September 10, 2002, Attys. Manuel B. Imbong and Jo Aurea M.
Imbong filed a Motion for Substitution stating, among other things, that
(1) Gonzales died on January 17, 2002; (2) his heirs are not interested to
pursue and prosecute the present special civil action or be substituted as
petitioners herein; and (3) the petition was instituted by Gonzales as a
class suit in behalf of "all Filipino citizens, taxpayers and members of the
Philippine Bar" and, as such, survives his death. They thus pray that as
they are among the "Filipino citizens, taxpayers and members of the
Philippine Bar" for whom the herein class suit was instituted and are both
capable of prosecuting the instant case, they be substituted as
petitioners in lieu of Gonzales and that they be given thirty days from
notice within which to file their memorandum.
- By Resolution of December 9, 2002, this Court required respondents to
file their Comments on the Motion for Substitution filed by Attys. Imbong
and Imbong.
- In their separate Comments, respondents PAGCOR and SAGE both argue
that, among others things, movants Attys. Imbong and Imbong may not
be substituted for Gonzales as the former are neither legal
representatives nor heirs of the latter within the purview of Section 16,
Rule 3 of the Rules of Court.
- Respondents PAGCOR and SAGE further argue that neither Gonzales nor
movants have substantiated the allegation that the instant case is a class
suit as defined under Section 12, Rule 3 of the Rules of Court. Hence, so
said respondents argue, the petition should be considered a personal
action which was extinguished with the death of Gonzales.
- Movants argue, however, that "unless the herein substitution is allowed,
the citizens and taxpayers represented by Gonzales in this class suit will
be denied due process."
ISSUE: Duty of counsel upon death of party.
RULING: See Sec. 16, Rule 3 of the Rules of Court.
*Take note that even if the SC in this case were to consider the Motion for
Substitution as a seasonably filed Motion for Intervention (Sec. 12, Rule 3), instant
petition would have to be dismissed for being moot and academic.
[Bonilla v. Barcena]
x x x The question as to whether an action survives or not depends on the nature of
the action and the damage sued for. If the causes of action which survive the
wrong complained [of] affects primarily and principally property and property
rights, the injuries to the person being merely incidental, while in the causes of
action which do not survive the injury complained of is to the person the property
and rights of property affected being incidental. x x x
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United Overseas Bank v. Rosemoore Mining & Dev’t Co.
FACTS:
- Respondent Rosemoor a Philippine mining corporation with offices at
Quezon City, applied for and was granted by petitioner Westmont Bank
(Bank) a credit facility in the total amount of P80 million consisting of
P50,000,000.00 as long term loan and P30,000,000.00 as revolving credit
line.
- To secure the credit facility, a lone real estate mortgage agreement was
executed by Rosemoor and Dr. Lourdes Pascual (Dr. Pascual), Rosemoor’s
president, as mortgagors in favor of the Bank as mortgagee in the City of
Manila. The agreement, however, covered six parce;s of land located in
San Miguel, Bulacan, all registered under the name of Rosemoor and two
parcels of land situated in Gapan, Nueva Ecija (Nueva Ecija properties),
owned and registered under the name of Dr. Pascual.
- Rosemoor subsequently opened with the Bank four irrevocable Letters of
Credit (LCs) totaling US$1,943,508.11.
- To cover payments by the Bank under the LCs, Rosemoor proceeded to
draw against its credit facility and thereafter executed promissory notes
amounting collectively to P49,862,682.50. Two other promissory notes
were also executed by Rosemoor in the amounts of P10,000,000.00 and
P3,500,000.00, respectively, to be drawn from its revolving credit line.
- Rosemoor defaulted in the payment of its various drawings under the LCs
and promissory notes. In view of the default, the Bank caused the extra-
judicial foreclosure of the Nueva Ecija properties and the Bulacan
properties. The Bank was the highest bidder on both occasions.
- The Bank then caused the annotation of the Notarial Certificate of Sale
covering the Nueva Ecija properties on the certificates of title concerned.
Later, the Notarial Certificate of Sale covering the Bulacan properties was
annotated on the certificates of title of said properties. The foregoing
facts led to Rosemoor’s filing of separate complaints against the Bank,
one before the Regional Trial Court of Manila.
- Rosemoor and Dr. Pascual filed a Complaint, originally captioned as one
for "Damages, Accounting and Release of Balance of Loan and Machinery
and for Injunction" before the Manila RTC. Impleaded as defendants
were the Bank and Notary Public Jose Sineneng, whose office was used to
foreclose the mortgage. The complaint was twice amended, the caption
eventually reflecting an action for "Accounting, Specific Performance and
Damages." Through the amendments, Pascual was dropped as a plaintiff
while several officers of the Bank were included as defendants.
- The Bank moved for the dismissal of the original and amended
complaints on the ground that the venue had been improperly laid. The
motion was denied by the trial court through an Omnibus Resolution.
- Plaintiff Rosemoor prayed for the ff: (1) Bank to render an acctg; (2)
actual damages for operational losses; (3) exemplary damages; (4)
indemnity and other relief.
- The Bank filed another motion to dismiss the Second Amended
Complaint on the ground of forum-shopping since, according to it,
Rosemoor had filed another petition earlier before the Malolos RTC. The
Bank contended that as between the action before the Manila RTC and
the petition before the Malolos RTC, there is identity of parties, rights
asserted, and reliefs prayed for, the relief being founded on the same set
of facts. The Bank further claimed that any judgment that may be
rendered in either case will amount to res judicata in the other case.
- Manila RTC denied the motion to dismiss. It also denied the Bank’s
motion for reconsideration of the order of denial.
- The Bank challenged the Manila RTC’s denial of the Bank’s second motion
to dismiss before the Court of Appeals, through a petition for certiorari.
The appellate court dismissed the petition. The Bank filed a motion for
reconsideration which, however, was denied through a Resolution.
- In the Petition for Review on Certiorari, the Bank argues that the Court of
Appeals erred in holding that no forum-shopping attended the actions
brought by Rosemoor.
ISSUE: (Central issue) W/N Rosemoor committed forum-shopping in filing the
Malolos case during the pendency of the Manila case?
RULING: NO.
The rule on venue of real actions is provided in Section 1, Rule 4 of the 1997 Rules
of Civil Procedure, which reads in part:
Section 1. Venue of Real Actions. Actions affecting title to or possession
of real property, or interest therein, shall be commenced and tried in the
proper court which has jurisdiction over the area wherein the real
property involved, or a portion thereof, is situated.
The venue of the action for the nullification of the foreclosure sale is properly laid
with the Malolos RTC although two of the properties together with the Bulacan
properties are situated in Nueva Ecija. The venue of real actions affecting
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properties found in different provinces is determined by the SINGULARITY or
PLURALITY of the transactions involving said parcels of land. Where said parcels are
the object of one and the same transaction, the venue is in the court of any of the
provinces wherein a parcel of land is situated.
Elements of forum-shopping: (a) identity of parties, or at least such parties as
represent the same interests in both actions; (b) identity of rights asserted and
reliefs prayed for, the reliefs being founded on the same facts; and (c) the identity
with respect to the two preceding particulars in the two cases is such that any
judgment rendered in the pending cases, regardless of which party is successful,
amount to res judicata in the other case.
(1) As to the existence of identity of parties, several bank officers and
employees impleaded in the Amended Complaint in the Manila case were
not included in the Malolos case.
(2) As regards the identity of rights asserted and reliefs prayed for, the main
contention of Rosemoor in the Manila case is that the Bank had failed to
deliver the full amount of the loan, as a consequence of which Rosemoor
demanded the remittance of the unreleased portion of the loan and
payment of damages consequent thereto.
In contrast, the Malolos case was filed for the purpose of restraining the
Bank from proceeding with the consolidation of the titles over the
foreclosed Bulacan properties because the loan secured by the mortgage
had not yet become due and demandable. Moreover, the Malolos case is
an action to annul the foreclosure sale that is necessarily an action
affecting the title of the property sold. It is therefore a real action which
should be commenced and tried in the province where the property or
part thereof lies.
The Manila case, on the other hand, is a personal action involving as it
does the enforcement of a contract between Rosemoor, whose office is
in Quezon City, and the Bank, whose principal office is in Binondo,
Manila. Personal actions may be commenced and tried where the
plaintiff or any of the principal plaintiffs resides, or where the defendants
or any of the principal defendants resides, at the election of the plaintiff.
Clearly, with the foregoing premises, it cannot be said that respondents
committed forum-shopping.
Magaspi v. Ramolete
FACTS:
- On September 16, 1970, the petitioners filed a complaint for the recovery
of ownership and possession of a parcel of land with damages against
The Shell Co. of the Philippines, Ltd. and/or The Shell Refining Co. (Phil.)
Inc., Central Visayan Realty & Investment Co., Inc. and Cebu City Savings
& Loan Association in the CFI of Cebu. Upon filing and the payment of
P60.00 as docketing fee and P10.00 for sheriff fees, the case was
assigned.
- Central Visayan Realty & Investment Co., Inc. and Cebu City Savings and
Loan Assn. filed a motion to compel the plaintiffs to pay the correct
amount for docket fee within the time prescribed by Court, as properly
computed by the Clerk of Court and failing to pay the same within the
prescribed period to dismiss the case. Further, until such time as the
correct docket fee is paid, the time for filing of responsive pleadings by
the defendants be suspended. The motion was opposed by the
petitioners who claimed that the main cause of action was the recovery
of a piece of land and on the basis of its assessed valued, P60.00 was the
correct docketing fee and that although the Revised Rules of Court do not
exclude damages in the computation of the docket fee, damages are
nonetheless still to be excluded.
- On October 5, 1970, the presiding judge ordered the Clerk of Court to
comment on the motion and the opposition which it assessed that the
correct fees shall be fixed at of P3,164.00 plus P2.00 Legal Research fee
(the value of the land, which is P17,280.00, plus the damages amounting
to P3,390,633.24). Hence, petitioner shall pay P3,104, net of the P60.00
already paid. However, private respondents filed their respective answers
that the same was exclusive of exemplary damages must be included in
the computation therein.
- On November 3, 1970, the plaintiffs filed a motion for leave to amend the
complaint so as to include the Government of the Republic of the
Philippines as a defendant. Nine days after, respondents filed an
opposition to the admission of the amended complaint.
- On November 16, 1970, Judge Canonoy admitted the amended complaint
although the plaintiffs had not yet complied with his Order that they
should pay an additional P3,104.00 docket fee. On April 3, 1971, Judge
Jose R. Ramolete who had replaced Judge Canonoy, issued the same
order.
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ISSUE: W/N the case may be considered as having been filed and docketed when
P60.00 was paid to the Clerk of Court even on the assumption that said payment
was not sufficient in amount?
RULING: The rule is well-settled that a case is deemed filed only upon payment of
the docket fee regardless of the actual date of its filing in court. The Court holds
that it was docketed upon the payment of P60.00 although said amount is
insufficient. Accordingly, the trial court had acquired jurisdiction over the case and
the proceedings thereafter had were proper and regular.
The next question is in respect of the correct amount to be paid as docket fee.
Judge Canonoy ordered the payment of P3,104.00 as additional docket fee based
on the original complaint. However, the petitioners assert as an alternative view,
that the docket fee be based on the amended complaint. The petitioners have a
point. "When a pleading is amended, the original pleading is deemed abandoned.
The original ceases to perform any further function as a pleading. The case stands
for trial on the amended pleading only. On the basis of the foregoing, the
additional docket fee to be paid by the petitioners should be based on their
amended complaint.
WHEREFORE, the petition is hereby granted: the petitioners shall be assessed a
docket fee on the basis of the amended complaint; and after all of the lawful fees
shall have been paid, the proceedings in Civil Case No. R-11882 shall be resumed.
Manchester Dev’t v. CA
FACTS:
This was originally a case of an action for torts and damages and specific
performance with a prayer for temporary restraining order. The damages were not
specifically stated in the prayer but the body of the complaint assessed a P 78.75
M. damages suffered by the petitioner. The amount of docket fee paid was only
P410.00. The petitioner then amended the complaint and reduced the damages to
P10 M only.
ISSUE/S:
When does a court acquire jurisdiction?
Does an amended complaint vest jurisdiction in the court?
HELD:
The court acquires jurisdiction over any case only upon the payment of the
prescribed docket fee. An amendment of the complaint or similar pleading will not
vest jurisdiction in the court, much less the payment of the docket fee based on the
amounts sought in the amended pleading. All complaints, petitions, answers and
other similar pleadings should specify the amount of damages being prayed for.
Damages shall be considered in the assessment of the filing fees in any case.
Sun Insurance v. Asuncion
FACTS:
- Petitioner Sun Insurance (or SIOL) filed a complaint for the annulment of
a decision on the consignation of fire insurance policy.
- Subsequently, the Private Respondent (PR) filed a complaint for the
refund of premiums and the issuance of a writ of preliminary attachment
in a civil case against SIOL. In addition, PR also claims for damages,
attorney’s fees, litigation costs, etc., however, the prayer did not state
the amount of damages sought although from the body of the complaint
it can be inferred to be in amount of P 50 million. Hence, PR originally
paid only PhP 210.00 in docket fees.
- The complaint underwent a number of amendments to make way for
subsequent re-assessments of the amount of damages sought as well as
the corresponding docket fees. The respondent demonstrated his
willingness to abide by the rules by paying the additional docket fees as
required.
ISSUE: Did the Court acquire jurisdiction over the case even if private respondent
did not pay the correct or sufficient docket fees?
RULING: YES. It was held that it is not simply the filing of the complaint or
appropriate initiatory pleading, but the payment of the prescribed docket fee that
vests a trial court with jurisdiction over the subject matter or nature of the action.
Where the filing of the initiatory pleading is not accompanied by payment of the
docket fee, the court may allow payment of the fee within a reasonable time but in
no case beyond the applicable prescriptive or reglamentary period. Same rule goes
for permissive counterclaims, third party claims and similar pleadings.
In herein case, obviously, there was the intent on the part of PR to defraud the
government of the docket fee due not only in the filing of the original complaint
but also in the filing of the second amended complaint. However, a more liberal
interpretation of the rules is called for considering that, unlike in Manchester, the
private respondent demonstrated his willingness to abide by the rules by paying
the additional docket fees as required.
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Where a trial court acquires jurisdiction in like manner, but subsequently, the
judgment awards a claim not specified in the pleading, or if specified the same has
been left for determination by the court, the additional filing fee shall constitute a
lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly
authorized deputy to enforce said lien and assess and collect the additional fee.
Heirs of the late Ruben Reinoso Jr. v. CA
FACTS:
ISSUE:
RULING:
The rule is that payment in full of the docket fees within the prescribed period is
mandatory.
In Manchester v. Court of Appeals, it was held that a court acquires jurisdiction
over any case only upon the payment of the prescribed docket fee. The strict
application of this rule was, however, relaxed two (2) years after in the case of Sun
Insurance Office, Ltd. v. Asuncion, wherein the Court decreed that where the
initiatory pleading is not accompanied by the payment of the docket fee, the court
may allow payment of the fee within a reasonable period of time, but in no case
beyond the applicable prescriptive or reglamentary period. This ruling was made on
the premise that the plaintiff had demonstrated his willingness to abide by the
rules by paying the additional docket fees required. Thus, in the more recent case
of United Overseas Bank v. Ros, the Court explained that where the party does not
deliberately intend to defraud the court in payment of docket fees, and manifests
its willingness to abide by the rules by paying additional docket fees when required
by the court, the liberal doctrine enunciated in Sun Insurance Office, Ltd., and not
the strict regulations set in Manchester, will apply. It has been on record that the
Court, in several instances, allowed the relaxation of the rule on non-payment of
docket fees in order to afford the parties the opportunity to fully ventilate their
cases on the merits.
In the case of La Salette College v. Pilotin, the Court stated:
Notwithstanding the mandatory nature of the requirement of payment of
appellate docket fees, we also recognize that its strict application is
qualified by the following: first, failure to pay those fees within the
reglementary period allows only discretionary, not automatic, dismissal;
second, such power should be used by the court in conjunction with its
exercise of sound discretion in accordance with the tenets of justice and
fair play, as well as with a great deal of circumspection in consideration of
all attendant circumstances.
While there is a crying need to unclog court dockets on the one hand,
there is, on the other, a greater demand for resolving genuine disputes
fairly and equitably, for it is far better to dispose of a case on the merit
which is a primordial end, rather than on a technicality that may result in
injustice.
In this case, it cannot be denied that the case was litigated before the
RTC and said trial court had already rendered a decision. While it was at
that level, the matter of non-payment of docket fees was never an issue.
It was only the CA which motu propio dismissed the case for said reason.
Considering the foregoing, there is a need to suspend the strict application of the
rules so that the petitioners would be able to fully and finally prosecute their claim
on the merits at the appellate level rather than fail to secure justice on a
technicality, for, indeed, the general objective of procedure is to facilitate the
application of justice to the rival claims of contending parties, bearing always in
mind that procedure is not to hinder but to promote the administration of justice
As the Court has taken the position that it would be grossly unjust if P’s claim
would be dismissed on a strict application of the Manchester doctrine, the
appropriate action, under ordinary circumstances, would be for the Court to
remand the case to the CA. Considering, however, that the case at bench has been
pending for more than 30 years and the records thereof are already before the
Court, a remand of the case to the CA would unnecessarily prolong its resolution. In
the higher interest of substantial justice and to spare the parties from further
delay, the Court will resolve the case on the merits.