CIVIL PROCEDURE
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 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.
CIVIL PROCEDURE
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?
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:
CIVIL PROCEDURE
- 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 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
CIVIL PROCEDURE
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.
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.
CIVIL PROCEDURE
- 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.
- 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.
CIVIL PROCEDURE
- 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.
- 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 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.
CIVIL PROCEDURE
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.
xxx
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
CIVIL PROCEDURE
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 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.
CIVIL PROCEDURE
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.
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
CIVIL PROCEDURE
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.
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.