1

RULE 4 AND 5 VENUE AND UNIFORM RULES IN MTC AND

RTC; RULE 6, 7, 8, 9 AND 10
RULE 4
Venue of Actions
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.
Forcible entry and detainer actions shall be commenced and tried in the
municipal trial court of the municipality or city wherein the real property involved,
or a portion thereof, is situated. (1[a], 2[a]a)
Section 2. Venue of personal actions. All other actions may be commenced
and tried where the plaintiff or any of the principal plaintiffs resides, or where the
defendant or any of the principal defendants resides, or in the case of a nonresident defendant where he may be found, at the election of the plaintiff. (2[b]a)
Section 3. Venue of actions against nonresidents. If any of the defendants
does not reside and is not found in the Philippines, and the action affects the
personal status of the plaintiff, or any property of said defendant located in the
Philippines, the action may be commenced and tried in the court of the place
where the plaintiff resides, or where the property or any portion thereof is situated
or found. (2[c]a)
Section 4. When Rule not applicable. This Rule shall not apply.
(a) In those cases where a specific rule or law provides otherwise; or
(b) Where the parties have validly agreed in writing before the filing of the
action on the exclusive venue thereof. (3a, 5a)
ARQUERO VS. FLOJO, G.R. No. L-68111 December 20, 1988
PARAS, J.:
On November 27, 1983, the petitioner and private respondent Radio
Communications of the Philippines, Inc. (RCPI), entered into a contract for
services for the transmission of a telegraphic message thru RCPI's branch office
in Aparri, Cagayan to Atty. Eleazar S. Calasan at his office address in Quiapo,
Manila. The text of the telegram contract form for transmission (as well as the
telegram itself) reads:
Send the following message subject to the condition that the RCPI shall not be
liable for any damage howsoever same may arise except for the refund of
telegraphic tolls. The sender agrees that as a condition precedent for a cause of
action against the RCPI any complaint relative to the transmittal of this telegram
must be brought to the attention of the company within three months from date,
and that venue thereof shall be in the courts of Quezon City alone and in no
other courts.
ATTY. CALASAN
ROOM 401 PAYAWAL BLDG.
709 PATERNO, QUIAPO, MANILA

2
CONGRATULATIONS PREPARE ONE XEROX COPY DECISION SEE YOU
BONI'S BIRTHDAY.
BERNOLI
(Annex "D", P. 16, Rollo)

Atty. Eleazar S. Calasan received a copy of the telegram the next day but he was
made to pay the sum of P 7.30 for delivery charges. Thereafter, on November 30,
1983, at the birthday party of Asst. Fiscal Bonifacio Sison in Quezon City, Atty.
Calasan confronted and censured the petitioner anent the said telegram. Despite
the petitioner's explanation that the telegram had been duly paid for he was
branded as a "stingy mayor who cannot even afford to pay the measely sum of P
7.30 for the telegram," (p. 2 Memorandum; p. 55, Rollo) in the presence of many
persons.
Thus, the petitioner filed an action for damages against RCPI before
Regional Trial Court of Aparri, Cagayan. RCPI filed a motion to dismiss on
ground of improper venue, contending that pursuant to the service contract,
parties had agreed that the venue of any action which may arise out of
transmittal of the telegram shall be in the courts of Quezon City alone.

the
the
the
the

On February 13, 1984, the trial court dismissed the case and denied the motion
for reconsideration re said dismissal.
Hence, the instant petition. Citing the case of Sweet Lines, Inc. v. Bernardo
Teves, et al., 83 SCRA 361, the petitioner claims that the condition with respect
to venue appearing on the ready printed form of RCPI's telegram for transmission
is void and unenforceable because the petitioner had no hand in its preparation.
The Court there held that contracts of adhesion, where the provisions have been
drafted only by one party and the only participation of the other party is the
signing of his signature or his adhesion thereto, are contrary to public policy as
they are injurious to the public or public good.
WE DISAGREE.
The agreement of the parties in the case at bar as to venue is not contrary to law,
public order, public policy, morals or good customs.
The parties do not dispute that in the written contract sued upon, it was expressly
stipulated that any action relative to the transmittal of the telegram against the
RCPI must be brought in the Courts of Quezon City alone. We note that neither
party to the contract reserved the right to choose the venue of action as fixed by
law (i.e., where the plaintiff or defendant resides, at the election of the plaintiff
[par. 'b'], Section 2, Rule 4, Revised Rules of Court), as is usually done if the
parties purported to retain that right of election granted by the Rules. Such being
the case, it can reasonably be inferred that the parties intended to definitely fix
the venue of action, in connection with the written contract sued upon, in the
courts of Quezon City only. Section 3, Rule 4, Revised Rules of Court sanctions
such stipulation by providing that "by written agreement of the parties the venue
of action may be changed or transferred from one province to another." (Bautista

vs. de Borja, 18 SCRA 474). As aptly held in the case of Central Azucarera de
Tarlac vs. De Leon, 56 Phil. 169,
By said agreement the parties waived the legal venue, and such waiver is valid
and legally effective, because it was merely a personal privilege they waived,
which is not contrary to public policy or to the prejudice of third persons. It is a
general principle that a person may renounce any right which the law give unless
such renunciation is expressly prohibited or the right conferred is of such nature
that its renunciation would be against public policy.

In Sweet Lines, Inc. vs. Teves, et al. supra, the Supreme Court, in declaring the
stipulation which limited the venue of actions as void and unenforceable held:
By the peculiar circumstances under which contracts of adhesion are entered
intonamely, that it is drafted only by one party, usually the corporation, and is
sought to be accepted or adhered to by the other party, in this instance the
passengers, private respondents, who cannot change the same and who are
thus made to adhere hereto on the 'take it or leave it' basiscertain guidelines in
the determination of their validity and/or enforceability have been formulated in
order to insure that justice and fair play characterize the relationship of the
contracting parties.
It is a matter of public knowledge, of which we can take judicial notice, that there
is a dearth of and acute shortage in inter-island vessels plying between the
country's several islands, and the facilities they offer leave much to be desired.
Thus, even under ordinary circumstances, the piers are congested with
passengers and their cargo waiting to be transported. The conditions are even
worse at peak and/or the rainy seasons, when passengers literally scramble to
secure whatever accommodations may be availed of, even through circuitous
routes, and/or at the risk of their safety. ... Under these circumstances, it is hardly
just and proper to expect the passengers to examine their tickets received from
crowded/congested counters, more often than not during rush hours, for
conditions that may be printed thereon, much less charge them with having
consented to the conditions, so printed, especially if there are a number. of such
conditions in fine print, as in this case.

RULE 5
Uniform Procedure In Trial Courts
Section 1. Uniform procedure. The procedure in the Municipal Trial Courts
shall be the same as in the Regional Trial Courts, except (a) where a particular
provision expressly or impliedly applies only to either of said courts, or (b) in civil
cases governed by the Rule on Summary Procedure. (n)
Section 2. Meaning of terms. The term "Municipal Trial Courts" as used in
these Rules shall include Metropolitan Trial Courts, Municipal Trial Courts in
Cities, Municipal Trial Courts, and Municipal Circuit Trial Courts. (1a)
Procedure In Regional Trial Courts
RULE 6
Kinds Of Pleadings
Section 1. Pleadings defined. Pleadings are the written statements of the
respective claims and defenses of the parties submitted to the court for
appropriate judgment. (1a)

Section 2. Pleadings allowed. The claims of a party are asserted in a

complaint, counterclaim, cross-claim, third (fourth, etc.)-party complaint, or
complaint-in-intervention.
The defenses of a party are alleged in the answer to the pleading asserting a
claim against him.
An answer may be responded to by a reply. (n)
Section 3. Complaint. The complaint is the pleading alleging the plaintiff's
cause or causes of action. The names and residences of the plaintiff and
defendant must be stated in the complaint. (3a)
Section 4. Answer. An answer is a pleading in which a defending party sets
forth his defenses. (4a)
Section 5. Defenses. Defenses may either be negative or affirmative.
(a) A negative defense is the specific denial of the material fact or facts
alleged in the pleading of the claimant essential to his cause or causes of
action.
(b) An affirmative defense is an allegation of a new matter which, while
hypothetically admitting the material allegations in the pleading of the
claimant, would nevertheless prevent or bar recovery by him. The
affirmative defenses include fraud, statute of limitations, release, payment,
illegality, statute of frauds, estoppel, former recovery, discharge in
bankruptcy, and any other matter by way of confession and avoidance.
(5a)
Section 6. Counterclaim. A counterclaim is any claim which a defending party
may have against an opposing party. (6a)
Section 7. Compulsory counterclaim. A compulsory counterclaim is one
which, being cognizable by the regular courts of justice, arises out of or is
connected with the transaction or occurrence constituting the subject matter of
the opposing party's claim and does not require for its adjudication the presence
of third parties of whom the court cannot acquire jurisdiction. Such a
counterclaim must be within the jurisdiction of the court both as to the amount
and the nature thereof, except that in an original action before the Regional Trial
Court, the counter-claim may be considered compulsory regardless of the
amount. (n)
OCA CIRCULAR NO. 96-2009
For the guidance of all concerned the Resolution of this Court in A.M. No. 042-04-SC dated September 21, 2004, suspending payment of the filing fees for
compulsory counterclaims remains in effect. For ready reference, the resolution
reads as follows:
The Court further Resolved to AFFIRM the actions of the Honorable
Associate Justices, in its informal meeting held on 20 September 2004, and
suspend the new rates of the legal fees under Rule 141, effective 21 September
2004, viz:
a) Solemnization of marriage;
b) motions, and

c) compulsory counterclaims
Section 8. Cross-claim. A cross-claim is any claim by one party against a coparty arising out of the transaction or occurrence that is the subject matter either
of the original action or of a counterclaim therein. Such cross-claim may include a
claim that the party against whom it is asserted is or may be liable to the crossclaimant for all or part of a claim asserted in the action against the crossclaimant. (7)
Section 9. Counter-counterclaims and counter-crossclaims. A counter-claim
may be asserted against an original counter-claimant.
A cross-claim may also be filed against an original cross-claimant. (n)
Section 10. Reply. A reply is a pleading, the office or function of which is to
deny, or allege facts in denial or avoidance of new matters alleged by way of
defense in the answer and thereby join or make issue as to such new matters. If
a party does not file such reply, all the new matters alleged in the answer are
deemed controverted.
If the plaintiff wishes to interpose any claims arising out of the new matters so
alleged, such claims shall be set forth in an amended or supplemental complaint.
(11)
Section 11. Third, (fourth, etc.)party complaint. A third (fourth, etc.) party
complaint is a claim that a defending party may, with leave of court, file against a
person not a party to the action, called the third (fourth, etc.) party defendant
for contribution, indemnity, subrogation or any other relief, in respect of his
opponent's claim. (12a)
Section 12. Bringing new parties. When the presence of parties other than
those to the original action is required for the granting of complete relief in the
determination of a counterclaim or cross-claim, the court shall order them to be
brought in as defendants, if jurisdiction over them can be obtained. (14)
Section 13. Answer to third (fourth, etc.)party complaint. A third (fourth, etc.)
party defendant may allege in his answer his defenses, counterclaims or
cross-claims, including such defenses that the third (fourth, etc.) party plaintiff
may have against the original plaintiff's claim. In proper cases, he may also
assert a counterclaim against the original plaintiff in respect of the latter's claim
against the third-party plaintiff. (n)
RULE 7
Parts of a Pleading
Section 1. Caption. The caption sets forth the name of the court, the title of
the action, and the docket number if assigned.
The title of the action indicates the names of the parties. They shall all be named
in the original complaint or petition; but in subsequent pleadings, it shall be
sufficient if the name of the first party on each side be stated with an appropriate
indication when there are other parties.
Their respective participation in the case shall be indicated. (1a, 2a)

Section 2. The body. The body of the pleading sets fourth its designation, the
allegations of the party's claims or defenses, the relief prayed for, and the date of
the pleading. (n)
(a) Paragraphs. The allegations in the body of a pleading shall be
divided into paragraphs so numbered to be readily identified, each of
which shall contain a statement of a single set of circumstances so far as
that can be done with convenience. A paragraph may be referred to by its
number in all succeeding pleadings. (3a)
(b) Headings. When two or more causes of action are joined the
statement of the first shall be prefaced by the words "first cause of action,''
of the second by "second cause of action", and so on for the others.
When one or more paragraphs in the answer are addressed to one of
several causes of action in the complaint, they shall be prefaced by the
words "answer to the first cause of action" or "answer to the second cause
of action" and so on; and when one or more paragraphs of the answer are
addressed to several causes of action, they shall be prefaced by words to
that effect. (4)
(c) Relief. The pleading shall specify the relief sought, but it may add a
general prayer for such further or other relief as may be deemed just or
equitable. (3a, R6)
(d) Date. Every pleading shall be dated. (n)
Section 3. Signature and address. Every pleading must be signed by the
party or counsel representing him, stating in either case his address which
should not be a post office box.
The signature of counsel constitutes a certificate by him that he has read the
pleading; that to the best of his knowledge, information, and belief there is good
ground to support it; and that it is not interposed for delay.
An unsigned pleading produces no legal effect. However, the court may, in its
discretion, allow such deficiency to be remedied if it shall appear that the same
was due to mere inadvertence and not intended for delay. Counsel who
deliberately files an unsigned pleading, or signs a pleading in violation of this
Rule, or alleges scandalous or indecent matter therein, or fails promptly report to
the court a change of his address, shall be subject to appropriate disciplinary
action. (5a)
Section 4. Verification. Except when otherwise specifically required by law or
rule, pleadings need not be under oath, verified or accompanied by affidavit .(5a)
A pleading is verified by an affidavit that the affiant has read the pleading and that
the allegations therein are true and correct of his knowledge and belief.
A pleading required to be verified which contains a verification based on
"information and belief", or upon "knowledge, information and belief", or lacks a
proper verification, shall be treated as an unsigned pleading. (6a)
Section 5. Certification against forum shopping. The plaintiff or principal party
shall certify under oath in the complaint or other initiatory pleading asserting a
claim for relief, or in a sworn certification annexed thereto and simultaneously
filed therewith: (a) that he has not theretofore commenced any action or filed any

claim involving the same issues in any court, tribunal or quasi-judicial agency
and, to the best of his knowledge, no such other action or claim is pending
therein; (b) if there is such other pending action or claim, a complete statement of
the present status thereof; and (c) if he should thereafter learn that the same or
similar action or claim has been filed or is pending, he shall report that fact within
five (5) days therefrom to the court wherein his aforesaid complaint or initiatory
pleading has been filed.
Failure to comply with the foregoing requirements shall not be curable by mere
amendment of the complaint or other initiatory pleading but shall be cause for the
dismissal of the case without prejudice, unless otherwise provided, upon motion
and after hearing. The submission of a false certification or non-compliance with
any of the undertakings therein shall constitute indirect contempt of court, without
prejudice to the corresponding administrative and criminal actions. If the acts of
the party or his counsel clearly constitute willful and deliberate forum shopping,
the same shall be ground for summary dismissal with prejudice and shall
constitute direct contempt, as well as a cause for administrative sanctions. (n)
CASES ON FORUM SHOPPING:
a)The Executive Secretary vs. Gordon, G.R. No. 134171 November 18, 1998
MENDOZA, J.:
This is a petition to declare respondents Richard J. Gordon, Anacleto M. Diaz,
and Orlando E. Mendiola in contempt of court. Respondents Diaz and Mendiola
are the counsels of respondent Gordon in G.R. No. 134071, entitled "Richard J.
Gordon v. The Hon. Executive Secretary, Felicito Payumo and Senior
Superintendent Arturo C. Lomibao." The petitioners in this case are the
respondents in that case.
The aforesaid case was filed on June 29, 1998 because of respondent Gordon's
apprehension that he would be removed and replaced as chairman of the Subic
Bay Metropolitan Authority (SBMA) upon the change of administration from
President Fidel V. Ramos to President Joseph Ejercito Estrada. The petition was
for prohibition to prevent Gordon's ouster as chairman of the SBMA on the
ground that he had a fixed term of office of six years which would not expire until
February 10, 2004.
As respondent Gordon apprehended, upon assuming office on June 30, 1998,
President Joseph Ejercito Estrada issued Administrative Order No. 1, "recalling,
withdrawing, and canceling the appointment of Richard J. Gordon as Chairman
of the Subic Bay Metropolitan Authority for a term of six (6) years, dated February
10, 1998, by former President Fidel V. Ramos."
On July 1, 1998, instead of pressing his motion for a temporary restraining order,
respondent Gordon fried a "Notice of Withdrawal of [his] Petition." This was done
at 9:21 in the morning. At 11:30 A.M. of that same day, he filed a petition for
certiorari and prohibition in the Regional Trial Court of Olongapo City, where it
was docketed as Civil Case No. 255-0-98.
The filing of the case in the Olongapo court gave rise to the present petition to
declare respondents in contempt of court filed by Executive Secretary Ronaldo

Zamora and Arturo C. Lomibao. The petition is filed against respondents Richard
Gordon and his counsel Anacleto M. Diaz and Orlando E. Medina, the latter
having filed the case in the Olongapo City Regional Trial Court after filing a notice
of withdraw the case pending in this Court. Petitioners charge that "the act of
respondents in filing two (2) petitions involving the same issues before this Court
and the Regional Trial Court at Olongapo City, both pending, constitutes forumshopping and contempt of court."
Petitioners cite the following provision of Rule 7, 5 of the Rules of Civil
Procedure as basis for their action:
Certification against forum shopping. The plaintiff or principal party shall certify
under oath in the complaint or other initiatory pleading asserting a claim for relief,
or in a sworn certification annexed thereto and simultaneously filed therewith: (a)
that he has not theretofore commenced any action or filed any claim involving the
same issues in any court, tribunal or quasi-judicial agency and, to the best of his
knowledge, no such other action or claim is pending therein; (b) if there is such
other pending action or claim, a complete statement of the present status thereof;
and (c) if he should thereafter learn that the same or similar action or claim has
been filed or is pending, he shall report that fact within five (5) days therefrom to
the court wherein his aforesaid complaint or initiatory pleading has been filed.
Failure to comply with the foregoing requirements shall not be curable by mere
amendment of the complaint or other initiatory pleading but shall be cause for the
dismissal of the case without prejudice, unless otherwise provided, upon motion
and after hearing. The submission of a false certification or non-compliance with
any of the undertakings therein shall constitute indirect contempt of court, without
prejudice to the corresponding administrative and criminal actions. If the acts of
the party or his counsel clearly constitute willful and deliberate forum shopping,
the same shall be ground for summary dismissal with prejudice and shall
constitute direct contempt, as well as a cause for administrative sanctions.

This provision applies to petitions for certiorari and prohibition.

In its resolution of July 7, 1998, this Court granted respondents' prayer for leave
to withdraw their petition in G.R. No. 134071, without prejudice to the disposition
of the present petition for contempt.
Respondents deny the charge against them. They contend that they in fact
complied with Rule 7, 5 of the Rules of Court by disclosing in the certification of
non-forum shopping attached to their petition for certiorari and prohibition before
the Regional Trial Court of Olongapo City, the existence and subsequent
withdrawal of their petition for prohibition before this Court. They argue that, as
held in PCGG v. Sandiganbayan, 1 it is neither forum-shopping nor defiance of a
court's authority for a party to file a case in the lower court, even after applying
for a similar relief in the Supreme Court, where such party had first sought the
withdrawal of the case before the Supreme Court in order to seek recourse
before the lower court.
We find for respondents.
Forum-shopping consists of filing multiple suits involving the same parties for the
same cause of action, either simultaneously or successively, for the purpose of

obtaining a favorable judgment. Thus, it has been held that there is forumshopping
(1) whenever as a result of an adverse decision in one forum, a party seeks a
favorable decision (other than by appeal or certiorari) in another, 2 or
(2) if, after he has filed a petition before the Supreme Court, a party files another
before the Court of Appeals since in such case he deliberately splits appeals "in
the hope that even as one case in which a particular remedy is sought is
dismissed, another case (offering a similar remedy) would still be open," 3 or
(3) where a party attempts to obtain a preliminary injunction in another court after
failing to obtain the same from the original court. 4
In Chemphil Export & Import Corp. vs. Court of Appeals, 5 the Court, summarizing
the rulings on the issue of what constitutes forum-shopping, stated:
Forum-shopping or the act of a party against whom an adverse judgment has
been rendered in one forum, of seeking another (and possibly favorable) opinion
in another forum (other than by appeal or the special civil action of certiorari), or
the institution of two (2) or more actions or proceedings grounded on the same
cause on the supposition that one or the other court would make a favorable
disposition, has been characterized as an act of malpractice that is prohibited
and condemned as trifling with the Courts and abusing their processes. It
constitutes improper conduct which tends to degrade the administration of
justice. It has also been aptly described as deplorable because it adds to the
congestion of the already heavily burdened dockets of the courts.

Conversely, since a party resorts to forum-shopping in order to increase his

chances of obtaining a favorable decision or action, a party cannot be said to
have sought to improve his chances of obtaining a favorable decision or action
where no unfavorable decision has ever been rendered against him in any of the
cases he has brought before the courts. 6
In the case at bar, although respondent Richard J. Gordon filed a petition for
prohibition before this Court and, after two days, filed substantially the same
petition before the Regional Trial Court of Olongapo City, the fact remains that (1)
before filing his petition in the Olongapo court he first flied a notice of withdrawal
of his petition which this Court later granted and (2) he withdrew his petition in
this Court for the following reason:
Due, however, to the present policy of the Court requiring parties and their
counsel to adhere strictly to the hierarchy of courts and in order to obviate any
technical objection on this ground, petitioner has deemed it fit to withdraw, as he
hereby withdraws, the instant petition so that it may be filed in the proper court
where it can be ventilated on its merits.

No adverse decision had been rendered by this Court against respondent

Gordon for which reason he thought it proper to institute the second action
in the trial court. The situation he found himself in is similar to that in which
a party, after filing a suit, realizes he made a mistake because the court in
which he has brought the case has no jurisdiction. He, therefore,
withdraws his action and refiles it in the proper forum. For, indeed, the

10

policy of this Court respecting the hierarchy of courts and consequently

prohibiting the filing of a petition in this Court in view of the concurrent
jurisdiction with the lower courts has been consistently observed in the
absence of any compelling reason for departing from such policy. It is
clear from respondents' actions and explanation that they had no intention
of disregarding court processes. They in fact complied with Rule 7, 5 of
the Rules of Civil Procedure.
This case is distinguishable from E. Razon, Inc. v. The Philippine Port Authority. 7
In the E. Razon case, petitioners, after filing a petition for certiorari with prayer for
the issuance of a temporary restraining order in the Supreme Court, filed an hour
later a similar petition before the Regional Trial Court and, having been assured
of a favorable action by the latter court, then sought the withdrawal of the petition
in this Court. Petitioners were found guilty of forum-shopping. "The acts of
petitioners constitute a clear case of forum-shopping an act of malpractice that is
proscribed and condemned as trifling with the courts and abusing their
processes," it was held.
In contrast, in the case at bar, respondent Gordon filed a notice of withdrawal of
his petition before this Court prior to the filing of his petition in the Regional Trial
Court as the appropriate forum. While it is true he and his counsels did not wait
for this Court to act on the "Notice of Withdrawal of Petition" filed by them before
filing substantially the same petition in the Regional Trial Court, the Court
understands their situation. They were faced with a predicament: Administrative
Order I ousting respondent Gordon from the chairmanship of the SMBA had been
issued and was in fact about to be enforced hence a writ of preliminary injunction
had to be obtained if respondent Gordon was to remain in office.
A similar predicament confronted the parties in PCGG v. Sandiganbayan (Minute
Resolution, G.R. Nos. 105808, 105809, and 109592, July 22, 1997), cited by
respondents. There, as found by this Court
As regards TMEE's lawyers, they obviously believed that under this Court's
dispositions just reviewed, it was their client, instead of the PCGG, that had the
right to vote the sequestered shares, prior to the determination by the
Sandiganbayan of whether or not there would be dissipation, loss or wastage of
corporate assets if TMEE were permitted to vote said shares. They wished their
client to exercise that right to vote at the stockholders' meeting of January 10,
1997; but PCIB was adamant in its position that it should be the PCGG which
should be accorded the right to vote. Time being of the essence, said lawyers be
took themselves to this Court; on December 23, 1996, they filed here an "Urgent
Motion for Issuance of a Temporary Restraining Order."
A few days' reflection, however, apparently made them doubt that the Court
would act on their motion because in its Resolution of December 3, 1996 it had
said "that no further motion for reconsideration or clarification of the issues
treated or, of the dispositions herein made, will be entertained." They thus
decided that relief should properly be sought in the Securities & Exchange
Commission which in their view had "jurisdiction to act on the subject matter
(which) refers to the corporate acts of PCIB and its corporate officers (Garcia Jr.
vs. Sandiganbayan 237 SCRA 552) (their cause) not being directly aimed at the
PCGG as an entity, but at a private corporation (Holiday Inn [Phils.] vs.
Sandiganbayan, et al. 186 SCRA 447]." But first they had to withdraw their
motion for TRO before this Court. This they sought to do by filing on January 9,

11
1997, a "Notice of Withdrawal of 'Urgent Motion for Issuance of a Restraining
Order.'" That done, they filed the corresponding petition with the Securities &
Exchange Commission to stop the PCIB stockholders' meeting scheduled the
following day, as above narrated.

This Court considered the parties' predicament with understanding and

overlooked their lapse:
The Court sees no reason to reject this explanation of the TMEE lawyers, or to
doubt their good faith. Their explanation is not on its face implausible; it is in truth
consistent with the admitted facts on record. Considering that condemnation for
contempt should not be made lightly, and that the power to punish for contempt
should be exercised on the preservative and not on the vindictive principle, the
Court finds no difficulty whatever in reaching the conclusion that there was no
willful disregard or defiance of its orders, or forum-shopping, by the TMEE
lawyers or, through his permissiveness, by the SEC Hearing Officer.

By no means does the Court by the present decision wish to convey the
impression that it will tolerate any act of disrespect or discourtesy. To be sure,
respondents could have apologized at the very least for the time of the Court
which they had taken and made an effort to explain why they have to refile their
case without awaiting the Court's resolution on their notice of withdrawal of the
petition. But, exercising restraint lest a contrary action be seen as mere peeve or
petulance, and considering this case instead with compassion, bearing in mind
that the purpose of contempt is preservative rather than punitive, this Court has
chosen to overlook respondents' lapse.
WHEREFORE, the petition for contempt is DISMISSED.
b) Samahan ng mga Manggawa sa Samma-Lakas sa Industriya ng
Kapatirang Haligi ng Alyansa (Samma-Likha) vs. Samma Corporation, G.R.
No. 167141, March 13, 2009.
- Certificate of Non-Forum Shopping is not required in a Petition for
Certification Election.
b) Maranaw Hotels and Resort Corp. vs. Court of Appeals, et al., G.R. No.
149660,
January 20, 2009
PUNO, C.J.:
Before the Court is a petition for review on certiorari assailing a resolution issued
by the Court of Appeals. The resolution denied the petition for review filed by
petitioner Maranaw Hotels and Resort Corp.
The present proceedings emanate from a complaint for regularization,
subsequently converted into one for illegal dismissal, filed before Labor Arbiter
Madjayran H. Ajan by private respondent Sheryl Oabel.
It appears that private respondent Oabel was initially hired by petitioner as an
extra beverage attendant on April 24, 1995. This lasted until February 7, 1997. 1
Respondent worked in Century Park Hotel, an establishment owned by the
petitioner.

12

On September 16, 1996,2 petitioner contracted with Manila Resource

Development Corporation.3 Subsequently, private respondent Oabel was
transferred to MANRED, with the latter deporting itself as her employer.4
MANRED has intervened at all stages of these proceedings and has consistently
claimed to be the employer of private respondent Oabel. For the duration of her
employment, private respondent Oabel performed the following functions:
Secretary, Public Relations Department: February 10, 1997 - March 6, 1997
Gift Shop Attendant:

April 7, 1997

- April 21, 1997

Waitress:

April 22, 1997

- May 20, 1997

Shop Attendant:

May 21, 1997

- July 30, 19985

On July 20, 1998, private respondent filed before the Labor Arbiter a petition for
regularization of employment against the petitioner. On August 1, 1998, however,
private respondent Oabel was dismissed from employment. 6 Respondent
converted her petition for regularization into a complaint for illegal dismissal.
Labor Arbiter Madjayran H. Ajan rendered a decision on July 13, 1999,
dismissing the complaint against the petitioner. The decision held:
While complainant alleged that she has been working with the respondent hotel
in different department (sic) of the latter on (sic) various capacities (although not
all departments are part and parcel of the hotels), complainant never disputed
the fact that her work with the same were on a per function basis or on a "need
basis" co-terminus with the function she was hired for.Considering that
complainant job (sic) with the respondent hotel was on a per function basis or on
a "need basis", complainant could not even be considered as casual employee or
provisional employee. Respondent hotel consider (sic) complainant, at most, a
project employee which does not ripened (sic) into regular employee (sic). 7
Private respondent appealed before the National Labor Relations Commission
(NLRC). The NLRC reversed the ruling of the Labor Arbiter and held that: (1)
MANRED is a labor-only contractor, and (2) private respondent was illegally
dismissed.
Of the first holding, the NLRC observed that under the very terms of the service
contract, MANRED shall provide the petitioner not specific jobs or services but
personnel and that MANRED had insufficient capitalization and was not
sufficiently equipped to provide specific jobs. 8 The NLRC likewise observed that
the activities performed by the private respondent were directly related to and
usually necessary or desirable in the business of the petitioner.9
With respect to the termination of private respondents employment, the NLRC
held that it was not effected for a valid or just cause and was therefore illegal.
The dispositive portion of the ruling reads thus:
WHEREFORE, the decision appealed from is hereby REVERSED. xxxx
Respondents Century Park Hotel and Manila Resource Development
Corporation are hereby declared jointly and severally liable for the following
awards in favor of complainant: 1) her full backwages and benefits from August
1, 1998 up to the date of her actual reinstatement; 2) her salary differentials,
share in the service charges, service incentive leave pay and 13th month pay
from July 20, 1995 to July 31, 1998.
SO ORDERED.10

13

Petitioner subsequently appealed before the Court of Appeals. In a resolution,

the appellate court dismissed the petition on account of the failure of the
petitioner to append the board resolution authorizing the counsel for petitioner to
file the petition before the Court of Appeals. The Court of Appeals held:
After a careful perusal of the records of the case, We resolve to DISMISS the
present petition on the ground of non-compliance with the rule on certification
against forum shopping taking into account that the aforesaid certification was
subscribed and verified by the Personnel Director of petitioner corporation
without attaching thereto his authority to do so for and in behalf of petitioner
corporation per board resolution or special power of attorney executed by the
latter.11
Petitioner duly filed its motion for reconsideration which was denied by the Court
of Appeals in a resolution dated August 30, 2001. 12
In the present petition for review, the petitioner invokes substantial justice as
justification for a reversal of the resolution of the Court of Appeals. 13 Petitioner
likewise contends that the filing of a motion for reconsideration with the certificate
of non-forum shopping attached constitutes substantial compliance with the
requirement.14
There is no merit to the petition.
Well-settled is the rule that the certificate of non-forum shopping is a mandatory
requirement. Substantial compliance applies only with respect to the contents of
the certificate but not as to its presence in the pleading wherein it is required.
Petitioners contention that the filing of a motion for reconsideration with an
appended certificate of non forum-shopping suffices to cure the defect in the
pleading is absolutely specious. It negates the very purpose for which the
certification against forum shopping is required: to inform the Court of the
pendency of any other case which may present similar issues and involve similar
parties as the one before it. The requirement applies to both natural and juridical
persons.
Petitioner relies upon this Courts ruling in Digital Microwave Corp. v. Court of
Appeals15 to show that its Personnel Director has been duly authorized to sign
pleadings for and in behalf of the petitioner. Petitioner, however, has taken the
ruling in Digital Microwave out of context. The portion of the ruling in Digital
Microwave upon which petitioner relies was in response to the issue of
impossibility of compliance by juridical persons with the requirements of Circular
28-91.16 The Courts identification of duly authorized officers or directors as the
proper signatories of a certificate of non forum-shopping was in response to that
issue. The ruling does not, however, ipso facto clothe a corporate officer or
director with authority to execute a certificate of non-forum shopping by virtue of
the formers position alone.
Any doubt on the matter has been resolved by the Courts ruling in BPI Leasing
Corp. v. Court of Appeals17 where this Court emphasized that the lawyer acting
for the corporation must be specifically authorized to sign pleadings for the
corporation.18 Specific authorization, the Court held, could only come in the form
of a board resolution issued by the Board of Directors that specifically authorizes
the counsel to institute the petition and execute the certification, to make his
actions binding on his principal, i.e., the corporation.19

14

This Court has not wavered in stressing the need for strict adherence to
procedural requirements. The rules of procedure exist to ensure the orderly
administration of justice. They are not to be trifled with lightly.
For this reason alone, the petition must already be dismissed. However, even if
this grave procedural infirmity is set aside, the petition must still fail. In the
interest of averting further litigation arising from the present controversy, and in
light of the respective positions asserted by the parties in the pleadings and other
memoranda filed before this Court, the Court now proceeds to resolve the case
on the merits.
Petitioner posits that it has entered into a service agreement with intervenor
MANRED. The latter, in turn, maintains that private respondent Oabel is its
employee and subsequently holds itself out as the employer and offers the
reinstatement of private respondent.
Notably, private respondents purported employment with MANRED commenced
only in 1996, way after she was hired by the petitioner as extra beverage
attendant on April 24, 1995. There is thus much credence in the private
respondents claim that the service agreement executed between the petitioner
and MANRED is a mere ploy to circumvent the law on employment, in particular
that which pertains on regularization.
In this regard, it has not escaped the notice of the Court that the operations of the
hotel itself do not cease with the end of each event or function and that there is
an ever present need for individuals to perform certain tasks necessary in the
petitioners business. Thus, although the tasks themselves may vary, the need
for sufficient manpower to carry them out does not. In any event, as borne out by
the findings of the NLRC, the petitioner determines the nature of the tasks to be
performed by the private respondent, in the process exercising control.
This being so, the Court finds no difficulty in sustaining the finding of the NLRC
that MANRED is a labor-only contractor.20 Concordantly, the real employer of
private respondent Oabel is the petitioner.
It appears further that private respondent has already rendered more than one
year of service to the petitioner, for the period 1995-1998, for which she must
already be considered a regular employee, pursuant to Article 280 of the Labor
Code:
Art. 280. Regular and casual employment. The provisions of written agreement
to the contrary notwithstanding and regardless of the oral agreement of the
parties, an employment shall be deemed to be regular where the employee has
been engaged to perform activities which are usually necessary or desirable in
the usual business or trade of the employer, except where the employment has
been fixed for a specific project or undertaking the completion or termination of
which has been determined at the time of the engagement of the employee or
where the work or service to be performed is seasonal in nature and the
employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the
preceding paragraph: Provided, That any employee who has rendered at
least one year of service, whether such service is continuous or broken,
shall be considered a regular employee with respect to the activity in which
he is employed and his employment shall continue while such activity
exists. (Emphasis supplied)

15

IN VIEW WHEREOF, the present petition is DENIED. The resolution of the Court
of Appeals dated June 15, 2001 is affirmed.
Costs against petitioner.
SO ORDERED.
REYNATO S. PUNO
Chief Justice
RULE 8
Manner of Making Allegations in Pleadings
Section 1. In general. Every pleading shall contain in a methodical and logical
form, a plain, concise and direct statement of the ultimate facts on which the
party pleading relies for his claim or defense, as the case may be, omitting the
statement of mere evidentiary facts. (1)
If a defense relied on is based on law, the pertinent provisions thereof and their
applicability to him shall be clearly and concisely stated. (n)
Section 2. Alternative causes of action or defenses. A party may set forth two
or more statements of a claim or defense alternatively or hypothetically, either in
one cause of action or defense or in separate causes of action or defenses.
When two or more statements are made in the alternative and one of them if
made independently would be sufficient, the pleading is not made insufficient by
the insufficiency of one or more of the alternative statements. (2)
Section 3. Conditions precedent. In any pleading a general averment of the
performance or occurrence of all conditions precedent shall be sufficient. (3)
Section 4. Capacity. Facts showing the capacity of a party to sue or be sued
or the authority of a party to sue or be sued in a representative capacity or the
legal existence of an organized association of person that is made a party, must
be averred. A party desiring to raise an issue as to the legal existence of any
party or the capacity of any party to sue or be sued in a representative capacity,
shall do so by specific denial, which shall include such supporting particulars as
are peculiarly within the pleader's knowledge. (4)
Section 5. Fraud, mistake, condition of the mind. In all averments of fraud or
mistake the circumstances constituting fraud or mistake must be stated with
particularity. Malice, intent, knowledge, or other condition of the mind of a person
may be averred generally.(5a)
Section 6. Judgment. In pleading a judgment or decision of a domestic or
foreign court, judicial or quasi-judicial tribunal, or of a board or officer, it is
sufficient to aver the judgment or decision without setting forth matter showing
jurisdiction to render it. (6)
Section 7. Action or defense based on document. Whenever an action or
defense is based upon a written instrument or document, the substance of such
instrum`ent or document shall be set forth in the pleading, and the original or a
copy thereof shall be attached to the pleading as an exhibit, which shall be
deemed to be a part of the pleading, or said copy may with like effect be set forth
in the pleading. (7)

16

Section 8. How to contest such documents. When an action or defense is

founded upon a written instrument, copied in or attached to the corresponding
pleading as provided in the preceding section, the genuineness and due
execution of the instrument shall be deemed admitted unless the adverse party,
under oath specifically denies them, and sets forth what he claims to be the facts,
but the requirement of an oath does not apply when the adverse party does not
appear to be a party to the instrument or when compliance with an order for an
inspection of the original instrument is refused. (8a)
Section 9. Official document or act. In pleading an official document or official
act, it is sufficient to aver that the document was issued or the act done in
compliance with law. (9)
Section 10. Specific denial. A defendant must specify each material allegation
of fact the truth of which he does not admit and, whenever practicable, shall set
forth the substance of the matters upon which he relies to support his denial.
Where a defendant desires to deny only a part of an averment, he shall specify
so much of it as is true and material and shall deny only the remainder. Where a
defendant is without knowledge or information sufficient to form a belief as to the
truth of a material averment made to the complaint, he shall so state, and this
shall have the effect of a denial. (10a)
Section 11. Allegations not specifically denied deemed admitted. Material
averment in the complaint, other than those as to the amount of unliquidated
damages, shall be deemed admitted when not specifically denied. Allegations of
usury in a complaint to recover usurious interest are deemed admitted if not
denied under oath. (1a, R9)
Section 12. Striking out of pleading or matter contained therein. Upon motion
made by a party before responding to a pleading or, if no responsive pleading is
permitted by these Rules, upon motion made by a party within twenty (20) days
after the service of the pleading upon him, or upon the court's own initiative at
any time, the court may order any pleading to be stricken out or that any sham or
false, redundant, immaterial, impertinent, or scandalous matter be stricken out
therefrom. (5, R9)
RULE 9
Effect of Failure to Plead
Section 1. Defenses and objections not pleaded. Defenses and objections not
pleaded either in a motion to dismiss or in the answer are deemed waived.
However, when it appears from the pleadings or the evidence on record that the
court has no jurisdiction over the subject matter, that there is another action
pending between the same parties for the same cause, or that the action is
barred by a prior judgment or by statute of limitations, the court shall dismiss the
claim. (2a)
Section 2. Compulsory counterclaim, or cross-claim, not set up barred. A
compulsory counterclaim, or a cross-claim, not set up shall be barred. (4a)
Section 3. Default; declaration of. If the defending party fails to answer within
the time allowed therefor, the court shall, upon motion of the claiming party with
notice to the defending party, and proof of such failure, declare the defending
party in default. Thereupon, the court shall proceed to render judgment granting
the claimant such relief as his pleading may warrant, unless the court in its

17

discretion requires the claimant to submit evidence. Such reception of evidence

may be delegated to the clerk of court. (1a, R18)
(a) Effect of order of default. A party in default shall be entitled to notice
of subsequent proceedings but not to take part in the trial. (2a, R18)
(b) Relief from order of default. A party declared in default may at any
time after notice thereof and before judgment file a motion under oath to
set aside the order of default upon proper showing that his failure to
answer was due to fraud, accident, mistake or excusable negligence and
that he has a meritorious defense. In such case, the order of default may
be set aside on such terms and conditions as the judge may impose in the
interest of justice. (3a, R18)
(c) Effect of partial default. When a pleading asserting a claim states a
common cause of action against several defending parties, some of whom
answer and the others fail to do so, the court shall try the case against all
upon the answers thus filed and render judgment upon the evidence
presented. (4a, R18).
(d) Extent of relief to be awarded. A judgment rendered against a party
in default shall not exceed the amount or be different in kind from that
prayed for nor award unliquidated damages. (5a, R18).
(e) Where no defaults allowed. If the defending party in an action for
annulment or declaration of nullity of marriage or for legal separation fails
to answer, the court shall order the prosecuting attorney to investigate
whether or not a collusion between the parties exists, and if there is no
collusion, to intervene for the State in order to see to it that the evidence
submitted is not fabricated. (6a, R18)
RULE 10
Amended and Supplemental Pleadings
Section 1. Amendments in general. Pleadings may be amended by adding or
striking out an allegation or the name of any party, or by correcting a mistake in
the name of a party or a mistaken or inadequate allegation or description in any
other respect, so that the actual merits of the controversy may speedily be
determined, without regard to technicalities, and in the most expeditious and
inexpensive manner. (1)
Section 2. Amendments as a matter of right. A party may amend his pleading
once as a matter of right at any time before a responsive pleading is served or, in
the case of a reply, at any time within ten (10) days after it is served. (2a)
Section 3. Amendments by leave of court. Except as provided in the next
preceding section, substantial amendments may be made only upon leave of
court. But such leave may be refused if it appears to the court that the motion
was made with intent to delay. Orders of the court upon the matters provided in
this section shall be made upon motion filed in court, and after notice to the
adverse party, and an opportunity to be heard. (3a)
J. ARTIE VERGEL DE DIOS VS. COURT OF APPEALS, G.R. No. 80491
August 12, 1992

18

CRUZ, J.:
Procedural rules are designed to insure the orderly and expeditious
administration of justice by providing for a practical system by which the parties
to a litigation may be accorded a full and fair opportunity to present their
respective positions and refute each other's submissions under the prescribed
requirements, conditions and limitations. Adjective law is not the counterfoil of
substantive law. In fact, there is a symbiotic relationship between them. By
complying faithfully with the Rules of Court, the bench and the bar are better able
to discuss, analyze and understand substantive rights and duties and
consequently to more effectively protect and enforce them. The other alternative
is judicial anarchy.
It is unfortunate, however, that on occasion procedural rules are invoked not to
uphold but to frustrate the prescriptions of substantive law. This usually happens
where the party does not expect to win on the merits of his cause and so seeks
to out-maneuver and delay his opponent by resorting to clever if futile
technicalities. The many ingenious gambits to this end are not unknown to the
Court. It was not born yesterday. When it comes across any such subterfuge, it
easily recognizes and rejects it, that the rules of procedure may not be perverted
into engines of injustice.
By its Board Resolution No. 939B-82, adopted on December 28, 1982, the
Philippine Veterans Bank conveyed a parcel of land under a conditional sale to
Averdi Marketing and Development Corporation. 1 Petitioner Artie Vergel de Dios,
as general manager of Averdi, then transferred his rights to Eduardo Lopingco,
herein private respondent, subject to the terms and conditions specified in their
Memorandum of Agreement 2 and the Addendum thereto, 3 both concluded in
February 1983.
On June 21, 1984, Lopingco filed with the Regional Trial Court of Manila a
complaint against the petitioner and the Philippine Veterans Bank for revocation
of the said board resolution and the rescission of his contract with the petitioner.
Copies of the complaint, together with the corresponding summons, were served
on the defendants.
On July 6, 1984, the Philippine Veterans Bank filed a motion to dismiss the
complaint on the grounds of lack of a cause action and improper party.
On July 13, 1984, at 9:15 o'clock in the morning, Lopingco filed an amended
complaint and at the same time served a copy thereof on the petitioner by
registered mail.
On the same day, but after the filing of the amended complaint, the law firm of
Fornier, Defensor, Rubinos and Fornier, through Atty. Alarico T. Mundin, filed its
entry of appearance and motion for extension of time to file responsive pleading
on behalf of the petitioner. The motion was subsequently granted but only for ten
days.
On August 10, 1984, the petitioner filed through counsel an omnibus motion
asking that he be furnished a copy of the amended complaint. This was opposed

19

by the private respondent, who said that the copy sought had already been sent
directly to the petitioner by registered mail "because at the time said copy was
mailed, there was as yet no appearance of counsel for said defendant."
On September 12, 1984, at the hearing on the motion to dismiss, counsel for the
private respondent moved for a declaration of default against the petitioner for
failure to file his answer within the reglementary period. The trial court deferred
resolution of the motion pending receipt of proof that the petitioner had indeed
received the copy of the amended complaint sent to him by registered mail.
On December 6, 1984, upon presentation of a certification from the Makati
Central Post Office that the petitioner had received a copy of the amended
complaint on July 17, 1984, he was declared in default and evidence for the other
parties was subsequently received ex parte.
On April 30, 1985, Judge Arsenio M. Gonong rendered a decision disposing as
follows:
WHEREFORE, based on the allegations and prayer on the complaint and the
evidences adduced in support thereof, JUDGMENT is hereby rendered, ordering
the rescission of the Memorandum-Agreement and the Addendum thereto
entered into between plaintiff Eduardo Lopingco and defendant J. Artie Vergel de
Dios; ordering the defendant J. Artie Vergel de Dios to refund the plaintiff his
downpayment of P725,000.00 with legal interest thereon from February 18, 1983;
ordering defendant J. Artie de Dios to indemnify plaintiff in the amount of P
140,000.00 yearly from February 18, 1983 until plaintiff shall have received a
complete refund of his investment; ordering defendant J. Artie Vergel de Dios to
pay the plaintiff P20,000.00 as actual damages; P1,000.00 as litigation expenses;
10% of the total amount due as and for attorney's fees and to pay the costs.
The case is hereby DISMISSED in so far as defendant Philippine Veterans Bank
is concerned.

On June 5, 1985, the petitioner filed a motion for new trial alleging error on the
part of the trial court for declaring him in default although he had not yet been
served with a copy of the amended complaint and his omnibus motion had not
yet been resolved. Assuming that such service was not necessary, he contented
that he was nonetheless not negligent for failing to file his answer within the
extended reglementary period.
This motion was denied in an order dated August 7, 1985. 4 On the validity of the
service of the amended complaint, the trial court declared:
. . . To repeat, the service of amended complaint directly on defendant De Dios is
in accordance with Sec. 2, R-13, Revised Rules of Court, to the effect that
service of notice, pleadings, orders, and the like, should be made on the party, if
not represented by counsel (Elli vs. Ditan, 5 SCRA 503; PLDT vs. NLRC, 128
SCRA 402-403) for "Without any record before it of any attorney appearing for
said party, it certainly was in accordance with Section 2 of Rule 13 of the Rev.
Rules of Court to serve the judgment upon the party affected thereby. It would be
an absurdity to hold otherwise." (Luzon Rubber & Manufacturing Co. vs. Estaris,
52 SCRA 392). By analogy, the instant plaintiff could only serve his amended
complaint directly on defendant De Dios. Because of all this, it is not correct then
for movant De Dios to claim that this Court did not resolve his Omnibus Motion
before declaring him in default and that the default order has no legal basis.

20

The trial court also found that the petitioner was negligent in not filing his answer
on time, for reasons to be cited below.
On August 30, 1985, the petitioner filed an appeal with the respondent court,
alleging that the trial court erred in declaring him in default without first ruling on
his Omnibus Motion and in denying his motion for new trial. The appellate
tribunal affirmed the questioned order. 5 The petitioner then came to this Court,
contending that the Court of Appeals committed grave abuse of discretion: (a) in
holding that he was properly declared in default; (b) in not setting aside the
judgment by default as improper for unjustly depriving him of his constitutional
right to be heard, the right to fair trial and the right to due process of law; (c) in
not declaring that the proper remedy or action of respondent Lopingco is
reformation and not rescission of the Memorandum of Agreement and the
Addendum thereto; and (d) in not declaring that the decision appealed from as
tainted with an award of excessive damages, insufficiency of evidence, and
violation of the law.
The petitioner submits that inasmuch as the amended complaint completely
replaced the original complaint, the latter was stricken from the record and
considered non-existent. So was the summons that accompanied it. As the
amended complaint was a completely new pleading, a new summons should
have been issued requiring the defendants to answer the same, conformably to
Rule 14, Sec. 1, of the Rules of Court. For failing to do this and thereafter
declaring him in default, the trial court denied him the right to be heard in
violation of due process.
This argument is not acceptable.
The rule is that it is only when new causes of action are alleged in an amended
complaint filed before the defendant has appeared in court that another
summons must be served on the defendant with the amended complaint. 6
In determining whether a different cause of action is introduced by amendments
to the complaint, the court must ascertain if the defendant shall be required to
answer for a liability or legal obligation wholly different from that which was stated
in the original complaint. 7 An amendment will not be considered as stating a new
cause of action if the facts alleged in the amended complaint show substantially
the same wrong with respect to the same transaction, or if what are alleged refer
to the same matter but are more fully and differently stated, or where averments
which were implied are made in express terms, and the subject of the
controversy or the liability sought to be enforced remains the same. 8
A reading of the amended complaint in the case at bar shows that it merely
supplemented an incomplete allegation regarding the subject property. The
purpose of the amendment was merely to include the additional information that
the subject property "was and is still under litigation and the contract was entered
into without the knowledge and approval of the litigants or of competent judicial
authority."

21

It is clear from a comparison of the allegations appearing in the original complaint

and in the amended complaint that the cause of action of the private respondent
had not been changed. The amended complaint also asked for the rescission of
the Memorandum of Agreement and the Addendum and the return of the sum of
P 725,000.00 which had been given by Lopingco to the petitioner as down
payment on the subject property. Plainly, what was sought to be enforced against
the petitioner both in the original complaint and in the amended complaint was
his obligation to refund the said sum to the private respondent. The amended
complaint did not change the cause of action but simply advanced the abovequoted additional information.
We hold therefore that no new summons on the amended complaint was
necessary.
Apart from this, the record shows that, contrary to the petitioner's allegation, he
received a copy of the amended complaint on July 17, 1984, through his
authorized agent, as certified to by the Makati Central Post Office. The
certification stated that Registered Letter No. 1933 (the amended complaint)
posted on "July 13, 1984 at GSIS Post Office addressed to Artie Vergel de Dios,
Studio 20, 3rd Floor, Makati Townhouse, 100 Gil J. Puyat Avenue, Makati, Metro
Manila, was delivered to and received by the authorized representative of the
addressee, administrator Dado on July 17, 1984." 9 This certification has not
been denied by the petitioner.
The trial court was correct in holding that when the private respondent sent by
registered mail a copy of the amended complaint directly to the petitioner, he was
acting in accordance with Sec. 2 of Rule 13 of the Rules of Court, allowing direct
service on a party if not represented by counsel. At the time the amended
complaint was filed, the defendant was not yet represented by counsel, which
entered its appearance only after the private respondent had filed his amended
complaint.
It is noteworthy that the trial court cautiously suspended resolution of the motion
to declare the petitioner in default until the private respondent shall have
furnished proof of service of the amended complaint upon the petitioner. It was
only on December 6, 1984, after the private respondent had submitted the
above-quoted certification, that the trial court declared the petitioner in default.
As the trial court granted the motion for extension before declaring the petitioner
in default, he cannot say that it had unduly favored the private respondent.
Neither has the petitioner been denied due process, for he was given adequate
opportunity, even extended by ten days more beyond the reglementary period, to
file his answer to the amended complaint.
It is true that this Court looks with disfavor upon default judgments, preferring to
give the parties full opportunity to argue their respective positions at a regular
trial. But there are limits to our forbearance. As we held in Pahilanga vs. Luna: 10
It is within the sound discretion of the court to set aside an order of default and to
permit a defendant to file his answer and to be heard on the merits even after the
reglementary period for the filing of the answer has expired, but it is not error, or

22
an abuse of discretion, on the part of the court to refuse to accept the answer
where it finds no justifiable reason for the delay in the filing of the answer. In
motions for reconsideration of an order of default, the moving party has the
burden of showing such diligence as would justify his being excused from not
filing the answer within the reglementary period as provided by the Rules of
Court, otherwise, these guidelines for an orderly and expeditious procedure
would be rendered meaningless. Unless it is shown clearly that a party has
justifiable reason for the delay, the court will not ordinarily exercise its discretion
in his favor.

In not exercising that discretion in the petitioner's favor, Judge Gonong correctly
observed:
. . . As a matter of fact, defendant De Dios was aware of his task to file his
answer to the instant complaint within the time constraint provided by the Rules
as can be gleaned from his motion through his counsel, Atty. Mundin, reading
thus: 2. Undersigned counsel was informed by defendant that the LAST DAY
FOR FILING HIS ANSWER AND/OR RESPONSIVE PLEADING IS
TOMORROW, 13 July 1984, the summons and copy of the complaint having
been received by herein defendant on 28 June, 1984' (par. 2, Entry of
Appearance and Motion for Extension of Time to File Responsive Pleading, page
38, record; capitalization supplied). And yet, in spite of this consciousness upon
receipt of the summons directing him within fifteen days after service to answer
complaint, and also to serve a copy of said answer, within the same period, and
failure to do so, judgment by default may be taken against him, still he (De Dios)
did not upon receipt of the Amended Complaint sent on 13 July, 1984, and
received by him four days after, on 17 July, 1984, rush to his counsel and handed
to the latter the said amended complaint so that he would not run the risk of
being declared in default. As it turned out, it was only when he filed, thru Atty.
Defensor, his Motion For New trial on June 5, 1985, that he disclosed the fact
that he did not consult his counsel as regards his receipt of the amended
complaint (or 11 months and 18 days from July 17, 1984).
This circumstance or inattention on his part simply demonstrates that defendant
De Dios did not exercise due diligence and concern on the matter as an ordinary
prudent person would do in order to have his answer filed within the
reglementary period. Practical wisdom in taking care of one's affairs dictates that
he should pay attention to the summons and at once see his lawyer without any
delay. He did not. And so he has only himself to blame for the consequences of
his act in treating the summons and complaint served upon him for granted. This
court can do no less than to withhold exercising its discretion in his favor, it being
convinced that said defendant's actuations of delay as pictured above can only
be subsumed as one "not excusable negligence, mistake or accident."

On the merits, the petition must also fail.

The petitioner argues that the private respondent has no cause of action for
rescission and contends that the proper action is for reformation of the
Memorandum of Agreement and the Addendum.
In the Memorandum of Agreement, the petitioner assigned to the private
respondent the property rights he had acquired under Board Resolution No.
939B-82, subject to the following terms and conditions:
1. The down payment of 20% for the purchase of the land (P700,000.00) from the
Philippine Veterans Bank shall be paid by the PARTY OF THE SECOND PART

23
through the PARTY OF THE FIRST PART, on or before ___________, so that the
latter could obtain a conditional sale of the property from the bank.
2. The PARTY OF THE SECOND PART shall pay the sum of P1,000,000.00 to
the PARTY OF THE FIRST PART in the following manner:
a. P500,000.00 upon payment of the 20% downpayment over the land;
b. P500,000.00 in five (5) equal installments for a period of five (5) months
beginning on the date of this agreement.
FINAL ASSIGNMENT: The sale by the bank of the property to the PARTY OF
THE FIRST PART being conditioned upon the payment of the 20% down
payment shall, upon fulfillment thereof, obligate the PARTY OF THE FIRST PART
thereupon to automatically execute in favor of the PARTY OF THE SECOND
PART a deed of assignment over the said property.

We find that the above-quoted conditions, specifically the stipulation in the last
paragraph, are susceptible of only one interpretation. The plain meaning is that
upon the down payment of the amount of P700,000.00 to the Philippine Veterans
Bank by Lopingco, De Dios, as the first party, shall execute in favor of Lopingco,
as the second party, a deed of assignment over the property subject of the
agreement.
The petitioner does not deny that he has not executed that deed. He submits,
though, that it was the private respondent who violated the express terms of the
contracts for failing and refusing to pay the amount of P500,000.00 to the
petitioner upon his payment of the 20% downpayment to Philippine Veterans
Bank. We are not persuaded. What we read from the agreement is that the
private respondent shall pay the P500,000.00 to the petitioner only upon
execution by the latter of the deed of assignment in favor of the private
respondent as required by the above-quoted last paragraph. Otherwise, the
private respondent would be paying P700,000.00 to the Philippine Veterans Bank
and P500,000.00 to the petitioner without one single document to prove that the
property rights acquired by the petitioner under Board Resolution No. 939B-82 no
longer belong to him but have already been transferred to Lopingco.
Under the circumstances of this case, there is no question that the private
respondent could avail himself of the remedy of rescission as authorized under
Art. 1191 of the Civil Code, thus:
Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case
one of the obligors should not comply with what is incumbent upon him.
The injured party may choose between the fulfillment and the rescission of the
obligation, with the payment of damages in either case. He may also seek
rescission, even after he has chosen fulfillment, if the latter should become
impossible.
The court shall decree the rescission claimed, unless there be just cause
authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third persons who have
acquired the thing, in accordance with articles 1385 and 1388 and the Mortgage
Law.

24

Interpreting this article in the case of Universal Food Corporation vs. Court of
Appeals, 11 we stated that "rescission will be ordered only where the breach
complained of is so substantial as to defeat the object of the parties in entering
into the agreement." In the case at bar, we find that the non-performance by the
petitioner of his obligation to execute the deed of assignment, which has not
been denied, was a substantial breach that warranted rescission.
We again quote the trial court with approval:
If there be any actionable wrong under the facts obtaining hereunder it would be
the act of defendant J. Artie Vergel de Dios. By entering into the contract
(Memorandum-Agreement and its Addendum) conveying his rights arising from
Veterans Bank Board Resolution No. 9391-82 and having succeeded in having
the plaintiff agree thereto on the assurance that defendant de Dios will be able to
procure the approval and conformity of the Bank, of which he was not able to do
so, and his subsequent receipt of the partial consideration of P700,000.00 and an
additional amount of P25,000.00 knowing fully well that he could not transfer or
convey his rights is a wrong, enforceable against him.
Under the facts presented, rescission is the proper remedy and as provided for
under Art. 1385 of the New Civil Code: Rescission creates the obligation to return
the things which were the object of the contract, together with their fruits, and the
price with its interest; consequently, it can be carried out only when he who
demands rescission can return whatever he may be obliged to restore." In the
case at bar, the plaintiff is very well entitled to the rescission of the MemorandumAgreement and its Addendum, in fact the plaintiff was never in possession of the
object of said contract as title and possession thereto cannot be transferred by
the defendant de Dios, and pursuant to the same provision the plaintiff is likewise
entitled to an indemnity for damages.

The petitioner submits that by claiming that the agreements did not reflect the
true intention of the parties, the private respondent thereby limited his recourse to
reformation of the contract. We think not. Given a choice of remedies, the private
respondent had a right to reject reformation of the contract as an available option
and to choose rescission instead as the more effective relief for the protection of
his interests.
In demanding that the trial court serve new summons upon him because of the
amendment of the complaint, the petitioner manifested his bad faith all too
clearly. The amendment made was not substantial and did not change the
original complaint so as to require the service of new summons upon him. Even if
it was, it has been established that a copy of the amended complaint had been
legally delivered to and received by him and that he in fact referred it to his
counsel, albeit, through his own negligence, not soon enough. He cannot now
claim that he was unaware of the amended complaint and was thus unable to
answer it. That is a rank pretense. The trial court was not obliged to perform a
charade. Courts do not lend themselves to empty gestures or useless rituals that
can only impede the speedy a administration of justice. The petitioner's pious
invocation of due process is nothing short of heretical and deserves to be
dismissed.

25

In these circumstances, the petitioner cannot complain that the damages

awarded against him are excessive. Indeed they are not, and we sustain them
completely.
WHEREFORE, the petition is DENIED. The challenged decision is AFFIRMED,
with costs against the petitioner.

Section 4. Formal amendments. A defect in the designation of the parties and

other clearly clerical or typographical errors may be summarily corrected by the
court at any stage of the action, at its initiative or on motion, provided no
prejudice is caused thereby to the adverse party. (4a)
Section 5. Amendment to conform to or authorize presentation of evidence.
When issues not raised by the pleadings are tried with the express or implied
consent of the parties they shall be treated in all respects as if they had been
raised in the pleadings. Such amendment of the pleadings as may be necessary
to cause them to conform to the evidence and to raise these issues may be
made upon motion of any party at any time, even after judgment; but failure to
amend does not effect the result of the trial of these issues. If evidence is
objected to at the trial on the ground that it is not within the issues made by the
pleadings, the court may allow the pleadings to be amended and shall do so with
liberality if the presentation of the merits of the action and the ends of substantial
justice will be subserved thereby. The court may grant a continuance to enable
the amendment to be made. (5a)
Section 6. Supplemental pleadings. Upon motion of a party the court may,
upon reasonable notice and upon such terms as are just, permit him to serve a
supplemental pleading setting forth transactions, occurrences or events which
have happened since the date of the pleading sought to be supplemented. The
adverse party may plead thereto within ten (10) days from notice of the order
admitting the supplemental pleading. (6a)
Section 7. Filing of amended pleadings. When any pleading is amended, a
new copy of the entire pleading, incorporating the amendments, which shall be
indicated by appropriate marks, shall be filed. (7a)
Section 8. Effect of amended pleadings. An amended pleading supersedes
the pleading that it amends. However, admissions in superseded pleadings may
be received in evidence against the pleader, and claims or defenses alleged
therein not incorporated in the amended pleading shall be deemed waived. (n)