CivPro IV Civil Procedure-No. 2

CIVPRO IV Civil Procedure Page |1
Republic of the Philippines the main complaint should, aside from answering the third-party complaint,
SUPREME COURT also answer the main complaint.
Manila
THIRD DIVISION Same; Same; Torts; In an action upon a tort, defendant may file a third-party
complaint against a joint tort-feasor for contribution.—Former Chief Justice
and noted remedial law expert Manuel V. Moran opined that “in an action upon
a tort, the defendant may file a third-party complaint against a joint tort-feasor
G.R. No. 107356 March 31, 1995 for contribution.”
SINGAPORE AIRLINES LIMITED, petitioner,

vs.
THE COURT OF APPEALS and PHILIPPINE AIRLINES, respondents. Same; Same; Same; The responsibility of two or more persons, or tort-feasors,
liable for a quasi-delict is joint and several, and the sharing as between such
solidary debtors is pro-rata.—The non-renewal of Rayos’ employment contract
Civil Procedure; Third-Party Complaint; A third-party defendant is allowed to
set up in his answer the defenses which the third-party plaintiff (original was the natural and probable consequence of the separate tortious acts of SIA
defendant) has or may have to the plaintiff’s claim.—There is no question that and PAL. Under mandate of Article 2176 of the Civil Code, Rayos is entitled to
a third-party defendant is allowed to set up in his answer the defenses which be compensated for such damages. Inasmuch as the responsibility of two or
more persons, or tort-feasors, liable for a quasi-delict is joint and several, and
the third-party plaintiff (original defendant) has or may have to the plaintiff’s
claim. There are, however, special circumstances present in this case which the sharing as between such solidary debtors is pro-rata, it is but logical, fair,
and equitable to require PAL to contribute to the amount awarded to the Rayos
preclude third-party defendant PAL from benefitting from the said principle.
spouses and already paid by SIA, instead of totally indemnifying the latter.
Same; Same; A third-party complaint involves an action separate and distinct

from, although related to, the main complaint. A third-party defendant who PETITION for review of a decision of the Court of Appeals.
feels aggrieved by some allegations in the main complaint should, aside from The facts are stated in the opinion of the Court.
answering the third-party complaint, also answer the main complaint.—The
appellate court was in error when it opined that SIA’s answer inured to the Bengzon, Zarraga, Narciso, Cudala, Pecson, Bengzon & Jimenez for
benefit of PAL for the simple reason that the complaint and the third-party petitioner.
complaint are actually two separate cases involving the same set of facts
PAL Legal Department for private respondent.
which is allowed by the court to be resolved in a single proceeding only to
avoid a multiplicity of actions. Such a proceeding obviates the need of trying
two cases, receiving the same or similar evidence for both, and enforcing
separate judgments therefor. This situation is not, as claimed by the appellate
court, analogous to a case where there are several defendants against whom ROMERO, J.:
a some of the defendants inures to the benefit of those who did not file an
answer. While such a complaint speaks of a single suit, a third-party complaint Sancho Rayos was an overseas contract worker who had a renewed
involves an action separate and distinct from, alcomplaint is filed stating a contract with the Arabian American Oil Company (Aramco) for the period
common cause of action, where the answer of though related to, the main covering April 16, 1980, to April 15, 1981. As part of Aramco's policy, its
employees returning to Dhahran, Saudi Arabia from Manila are allowed to
complaint. A third-party defendant who feels aggrieved by some allegations in
claim reimbursement for amounts paid for excess baggage of up to 50
kilograms, as long as it is properly supported by receipt. On April 1980, rate of interest from the filing of the complaint until paid in
Rayos took a Singapore Airlines (SIA) flight to report for his new assignment, full;
with a 50-kilogram excess baggage for which he paid P4,147.50. Aramco
reimbursed said. amount upon presentation of the excess baggage ticket. 3. The sum of Fifty Thousand Pesos (P50,000.00) as moral
damages;
In December 1980, Rayos learned that he was one of several employees
being investigated by Aramco for fraudulent claims. He immediately asked 4. The sum equivalent to ten Per Cent (10th) of the total
his wife Beatriz in Manila to seek a written confirmation from SIA that he amount due as and for attorney's fees; and
indeed paid for an excess baggage of 50 kilograms. On December 10, 1980,
SIA's manager, Johnny Khoo, notified Beatriz of their inability to issue the 5. The cost of suit.
certification requested because their records showed that only three
kilograms were entered as excess and accordingly charged. SIA issued the
certification requested by the spouses Rayos only on April 8, 1981, after its The defendant's counterclaim is hereby dismissed.
investigation of the anomaly and after Beatriz, assisted by a lawyer,
threatened it with a lawsuit. On April 14, 1981, Aramco gave Rayos his travel ON THE THIRD PARTY COMPLAINT, the third-party
documents without a return visa. His employment contract was not renewed. defendant PAL is ordered to pay defendant and third-party
plaintiff SIA whatever the latter has paid the plaintiffs.
On August 5, 1981, the spouses Rayos, convinced that SIA was responsible
for the non-renewal of Rayos' employment contract with Aramco, sued it for SO ORDERED.
damages. SIA claimed that it was not liable to the Rayoses because the
tampering was committed by its handling agent, Philippine Airlines (PAL). It In so ruling, the court a quo concluded that the excess baggage ticket of
then filed a third-party complaint against PAL. PAL, in turn, countered that its Rayos was tampered with by the employees of PAL and that the fraud was
personnel did not collect any charges for excess baggage; that it had no the direct and proximate cause of the non-renewal of Rayos' contract with
participation in the tampering of any excess baggage ticket; and that if any Aramco.
tampering was made, it was done by SIA's personnel.
All parties appealed to the Court of Appeals. SIA's appeal was dismissed for
Judge Jesus O. Ibay of the Regional Trial Court of Manila, Branch 30, non-payment of docket fees, which dismissal was eventually sustained by
rendered judgment on September 9, 1988, in favor of the plaintiffs, the this Court. The Rayos spouses withdrew their appeal when SIA satisfied the
dispositive portion of which reads thus: judgment totaling P802,435.34.
WHEREFORE, judgment is hereby rendered in favor of the In its appeal, PAL claimed that the spouses Rayos had no valid claim against
plaintiffs and against the defendant Singapore Airlines SIA because it was the inefficiency of Rayos which led to the non-renewal of
Limited, sentencing the latter to pay the former the following: his contract with Aramco, and not the alleged tampering of his excess
bagged ticket On the other hand, SIA argued that the only issue in the said
1. The sum of Four Hundred Thirty Thousand Nine Hundred appeal is whether or not it was entitled to reimbursement from PAL, citing
Pesos and Eighty Centavos (P430,900.80) as actual the case of Firestone Tire and Rubber Company of the Philippines v.
damages, with interest at the legal rate from the date of the Tempongko.1
filing of the complaint until fully paid.
The appellate court disagreed with SIA's contention that PAL could no longer
2. The sum of Four Thousand One Hundred Forty-Seven raise the issue of SIA's liability to the Rayoses and opined "that SIA's answer
Pesos and Fifty Centavos (P4,147.50) as reimbursement for to the complaint should inure to the benefit of PAL, and the latter may
the amount deducted from Mr. Rayos' salary, also with legal challenge the lower court's findings against SIA in favor of plaintiffs-appellees
(the Rayos spouses) for the purpose of defeating SIA's claim against it, and
not for the purpose of altering in any way the executed judgment against token, an appeal by one party from such judgment does not
SIA." In its answer to the main complaint, SIA set up the defense that the inure to the benefit of the other party who has not appealed
excess baggage ticket was indeed tampered with but it was committed by nor can it be deemed to be an appeal of such other party
PAL's personnel. On September 21, 1992, the appellate court granted PAL's from the judgment against him.
appeal and absolved it from any liability to SIA.
It must be noted that in the proceedings below, PAL disclaimed any liability to
In this petition for review, SIA argues that PAL cannot validly assail for the the Rayoses and imputed the alleged tampering to SIA's personnel. On
first time on appeal the trial court's decision sustaining the validity of plaintiff's appeal, however, PAL changed its theory and averred that the spouses
complaint against SIA if PAL did not raise this issue in the lower court. It Rayos had no valid claim against SIA on the around that the non-renewal of
added that the appellate court should have restricted its ruling on the right of Sancho's contract with Aramco was his unsatisfactory performance rather
SIA to seek reimbursement from PAL, as this was the only issue raised by than the alleged tampering of his excess baggage ticket. In response to
SIA in its third-party complaint against PAL. PAL's appeal, SIA argued that it was improper for PAL to question SIA's
liability to the plaintiff, since this was no longer an issue on account of the
The instant appeal is impressed with merit. finality and, in fact, satisfaction of the judgment.
The petitioner correctly pointed out that the case of Firestone squarely Surprisingly, the appellate court ignored the Court's pronouncements in
applies to the case at bench. In said case, the Court expounded on the Firestone and declared:
nature of a third-party complaint and the effect of a judgment in favor of the
plaintiff against the defendant and in favor of such defendant as third-party [T]here is nothing in the citation which would suggest that the
plaintiff against, ultimately, the third-party defendant. Speaking through then appellant cannot avail of the defenses which would have
Justice and later Chief Justice Claudio Teehankee, the Court stated: been available to the non-appealing party against the
prevailing party which would be beneficial to the appellant.
The third-party complaint is, therefore, a procedural device After all, PAL's liability here is premised on the liability of SIA
whereby a "third party" who is neither a party nor privy to the to plaintiffs-appellees, In its own defense, it should have the
act or deed complained of by the plaintiff, may be brought right to avail of defenses of SIA against plaintiffs-appellees
into the case with leave of court, by the defendant, who acts which would redound to its benefit. This is especially true
as third-party plaintiff to enforce against such third-party here where SIA lost the capability to defend itself on the
defendant a right for contribution, indemnity, subrogation or technicality of failure to pay docket fee, rather than on the
any other relief, in respect of the plaintiff's claim. The third- merits of its appeal. To hold otherwise would be to open the
party complaint is actually independent of and separate and door to a possible collusion between the plaintiff and
distinct from the plaintiff's complaint. . . . When leave to file defendant which would leave the third-party defendant
the third-party complaint is properly granted, the Court holding the bag.
renders in effect two judgments in the same case, one on the
plaintiff's complaint and the other on the third-party There is no question that a third-party defendant is allowed to set up in his
complaint. When he finds favorably on both complaints, as in answer the defenses which the third-party plaintiff (original defendant) has or
this case, he renders judgment on the principal complaint in may have to the plaintiff's claim. There are, however, special circumstances
favor of plaintiff against defendant and renders another present in this case which preclude third-party defendant PAL from benefiting
judgment on the third-party complaint in favor of defendant from the said principle.
as third-party plaintiff, ordering the third-party defendant to
reimburse the defendant whatever amount said defendant is One of the defenses available to SIA was that the plaintiffs had no cause of
ordered to pay plaintiff in the case. Failure of any of said action, that is, it had no valid claim against SIA. SIA investigated the matter
parties in such a case to appeal the judgment as against him and discovered that tampering was, indeed, committed, not by its personnel
makes such judgment final and executory. By the same but by PAL's. This became its defense as well as its main cause of action in
the third-party complaint it filed against PAL. For its part, PAL could have The appellate court was in error when it opined that SIA's answer inured to
used the defense that the plaintiffs had no valid claim against it or against the benefit of PAL for the simple reason that the complaint and the third-party
SIA. This could be done indirectly by adopting such a defense in its answer complaint are actually two separate cases involving the same set of facts
to the third-party complaint if only SIA had raised the same in its answer to which is allowed by the court to be resolved in a single proceeding only to
the main complaint, or directly by so stating in unequivocal terms in its avoid a multiplicity of actions. Such a proceeding obviates the need of trying
answer to SIA's complaint that SIA and PAL were both blameless. Yet, PAL two cases, receiving the same or similar evidence for both, and enforcing
opted to deny any liability which it imputed to SIA's personnel. It was only on separate judgments therefor. This situation is not, as claimed by the
appeal — in a complete turn around of theory — that PAL raised the issue of appellate court, analogous to a case where there are several defendants
no valid claim by the plaintiff against SIA. This simply cannot be allowed. against whom a complaint is filed stating a common cause of action, where
the answer of some of the defendants inures to the benefit of those who did
While the third-party defendant; would benefit from a victory by the third-party not file an answer. While such a complaint speaks of a single suit, a third-
plaintiff against the plaintiff, this is true only when the third-party plaintiff and party complaint involves an action separate and distinct from, although
third-party defendant have non-contradictory defenses. Here, the defendant related to the main complaint. A third-party defendant who feels aggrieved by
and third-party defendant had no common defense against the plaintiffs' some allegations in the main complaint should, aside from answering the
complaint, and they were even blaming each other for the fiasco. third-party complaint, also answer the main complaint.
Fear of collusion between the third-party plaintiff and the plaintiffs aired by We do not, however, agree with the petitioner that PAL is solely liable for the
the appellate court is misplaced if not totally unfounded. The stand of SIA as satisfaction of the judgment. While the trial court found, and this has not been
against the plaintiffs' claim was transparent from the beginning. PAL was adequately rebutted by PAL, that the proximate cause of the non-renewal of
aware of SIA's defense, and if it was convinced that SIA should have raised Rayos' employment contract with Aramco was the tampering of his excess
the defense of no valid claim by the plaintiffs, it should have so stated in its baggage ticket by PAL's personnel, it failed to consider that the immediate
answer as one of its defenses, instead of waiting for an adverse judgment cause of such non-renewal was SIA's delayed transmittal of the certification
and raising it for the first time on appeal. needed by Rayos to prove his innocence to his employer.
The judgment, therefore, as far as the Rayoses and SIA are concerned, has SIA was informed of the anomaly in December 1980 but only issued the
already gained finality. What remains to be resolved, as correctly pointed out certification four months later or, more specifically, on April 8, 1981, a few
by petitioner, is whether it is entitled to reimbursement from PAL, considering days before the expiration of Rayos' contract. Surely, the investigation
that PAL appealed that part of the decision to the appellate court. This is conducted by SIA could not have lasted for four months as the information
where the rule laid down in Firestone becomes applicable. needed by the Rayoses could easily be verified by comparing the duplicate
excess baggage tickets which they and their handling agent, PAL, kept the
The trial court's decision, although adverse to SIA as defendant, made PAL record purposes. The fact that the Rayos spouses had to be assisted by
ultimately answerable for the judgment by ordering the latter to reimburse the counsel who threatened to file a damage suit against SIA if the certification
they urgently needed was not immediately issued only strengthens the
former for the entire monetary award. On appeal, PAL tried to exonerate
suspicion that SIA was not dealing with them in utmost good faith. The effect
itself by arguing that the Rayoses had no valid claim against SIA. From PAL's
of SIA's mishandling of Beatriz Rayos' request became instantly apparent
viewpoint, this seemed to be the only way to extricate itself from a mess
which the court a quo ascribed to it. This cannot, however, be allowed when her husband's contract was not renewed in spite of his performance
because it was neither raised by SIA in its answer to the main complaint nor which was constantly "highly regarded" by the manager of Aramco's
by PAL in its answer to the third-party complaint. The prudent thing that PAL equipment services department.
should have done was to state in its answer to the third-party complaint filed
by SIA against it everything that it may conceivably interpose by way of its Former Chief Justice and noted remedial law expert Manuel V. Moran opined
defense, including specific denials of allegations in the main complaint which that "in an action upon a tort, the defendant may file a third-party complaint
implicated it along with SIA. against a joint tort-feasor for contribution."2
The non-renewal of Rayos employment contract was the natural and

probable consequence of the separate tortious acts of SIA and PAL. Under
mandate of Article 2176 of the Civil Code, Rayos is entitled to be
compensated for such damages. Inasmuch as the responsibility of two or
more persons, or tort-feasors, liable for a quasi-delict is joint and several,3
and the sharing as between such solidary debtors is pro-rata,4 it is but
logical, fair, and equitable to require PAL to contribute to the amount
awarded to the Rayos spouses and already paid by SIA, instead of totally
indemnifying the latter.
WHEREFORE, the decision of the respondent Court of Appeals in CA-G.R.

CV No. 20488 dated September 21, 1992, is hereby REVERSED and a new
one is entered ordering private respondent Philippine Airlines to pay, by way
of contribution, petitioner Singapore Airlines one-half (1/2) of the amount it
actually paid to Sancho and Beatriz Rayos in satisfaction of the judgment in
Civil Case No. 142252, dated September 9, 1988.
SO ORDERED.
Feliciano, Melo, Vitug and Francisco, JJ., concur.

G.R. No. 138822 January 23, 2001 jurisdiction is raised for the first time before this Court; respondent never
having raised this issue before the appellate court. Although the lack of
EVANGELINE ALDAY, petitioner, jurisdiction of a court may be raised at any stage of the action, a party may be
vs. estopped from raising such questions if he has actively taken part in the very
FGU INSURANCE CORPORATION, respondent. proceedings which he questions, belatedly objecting to the court’s jurisdiction
in the event that that the judgment or order subsequently rendered is adverse
Actions; Jurisdiction; Estoppel; Words and Phrases; Estoppel by laches arises to him. In this case, respondent actively took part in the proceedings before
from the negligence or omission to assert a right within a reasonable time, the Court of Appeals by filing its appellee’s brief with the same. Its participation,
warranting a presumption that the party entitled to assert it either has when taken together with its failure to object to the appellate court’s jurisdiction
abandoned or declined to assert it; A party cannot be considered as estopped during the entire duration of the proceedings before such court, demonstrates
from assailing the trial court’s jurisdiction over the other party’s counterclaim a willingness to abide by the resolution of the case by such tribunal and
where such issue was raised with the trial court itself—the body where the accordingly, respondent is now most decidedly estopped from objecting to the
action is pending—even before the presentation of any evidence by the parties Court of Appeals’ assumption of jurisdiction over petitioner’s appeal.
and definitely, way before any judgment could be rendered by the trial court.—
Before going into the substantive issues, the Court shall first dispose of some
procedural matters raised by the parties. Petitioner claims that respondent is Same; Counterclaims; Words and Phrases; “Compulsory Counterclaim,”
estopped from questioning her non-payment of docket fees because it did not Explained.—The basic issue for resolution in this case is whether or not the
raise this particular issue when it filed in its first motion—the " Motion to Strike counterclaim of petitioner is compulsory or permissive in nature. A compulsory
out Answer Compulsory Counterclaim And To Declare Defendant In Default”— counterclaim is one which, being cognizable by the regular courts of hustice,
with the trial court; rather, it was only nine months after receiving petitioner’s arises out of or is connected with the transaction or occurrence constituting the
answer that respondent assailed the trial court’s lack of jurisdiction over subject matter of the opposing party’s claim and does not require for its
petitioner’s counterclaims based on the latter’s failure to pay docket fees. adjudication the presence of third parties of whom the court cannot acquire
Petitioner’s position is unmeritorious. Estoppel by laches arises from the jurisdiction.
negligence or omission to assert a right within a reasonable time, warranting a
presumption that the party entitled to assert it either has abandoned or
declined to assert it. In the case at bar, respondent cannot be considered as
estopped from assailing the trial court’s jurisdiction over petitioner’s Same; Same; Criteria or Tests in Determining Whether a Counter-claim is
counterclaim since this issue was raised by respondent with the trial court Compulsory or Permissive; “Compelling Test of Compulsoriness”; Words and
itself—the body where the action is pending—even before the presentation of Phrases; Under the “compelling test of compulsoriness,” “a logical relationship
any evidence by the parties and definitely, way before any judgment could be between the claim and the counterclaim is required, that is, whether
rendered by the trial court. conducting separate trials of the respective claims of the parties would entail
a substantial duplication of effort and time by the parties and the court.”—In
Valencia v. Court of Appeals, this Court capsulized the criteria or tests that
may be used in determining whether a counterclaim is compulsory or
Same; Same; Same; Although the lack of jurisdiction of a court may be raised permissive, summarized as follows: 1. Are the issues of fact and law raised by
at any stage of the action, a party may be estopped from raising such questions the claim and counterclaim largely the same? 2. Would res judicata bar a
if he has actively taken part in the very proceedings which he questions, subsequent suit on defendant’s claim absent the compulsory counterclaim
belatedly objecting to the court’s jurisdiction in the event that the judgment or rule? 3. Will substantially the same evidence support or refute plaintiffs claim
order subsequently rendered is adverse to him.—Meanwhile, respondent as well as defendant’s counter-claim? 4. Is there any logical relation between
questions the jurisdiction of the Court of Appeals over the appeal filed by the claim and the counterclaim? Another test, applied in the more recent case
petitioner from the 18 September 1990 and 28 February 1991 orders of the of Quintanilla v. Court of Appeals, is the “compelling test of compulsoriness”
trial court. It is significant to note that this objection to the appellate court’s
which requires “a logical relationship between the claim and counterclaim, that and there is nothing in the records to show that petitioner has attempted to
is, where conducting separate trials of the respective claims of the parties evade the payment of the proper docket fees for her permissive counterclaim.
would entail a substantial duplication of effort and time by the parties and the As a matter of fact, after respondent filed its motion to dismiss petitioner’s
court.” counterclaim based on her failure to pay docket fees, petitioner immediately
filed a motion with the trial court, asking it to declare her counterclaim as
compulsory in nature and therefore exempt from docket fees and, in addition,
Same; Same; Docket Fees; Rule on the Payment of Filing Fees.—There is no to declare that respondent was in default for its failure to answer her
need for petitioner to pay docket fees for her compulsory counterclaim. On the counterclaim. However, the trial court dismissed petitioner’s counterclaim.
other hand, in order for the trial court to acquire jurisdiction over her permissive Pursuant to this Court’s ruling in Sun Insurance, the trial court should have
counterclaim, petitioner is bound to pay the prescribed docket fees. The rule instead given petitioner a reasonable time, but in no case beyond the
on the payment of filing fees has been laid down by the Court in the case of applicable prescriptive or reglementary period, to pay the filing fees for her
Sun Insurance Office, Ltd. v. Hon. Maximiano Asuncion—1. It is not simply the permissive counter-claim.
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 Same; Same; Same; Pleadings and Practice; There is no need to file an
accompanied by payment of the docket fee, the court may allow payment of answer to a permissive counterclaim until the defendant shall have paid the
the fee within a reasonable time but in no case beyond the applicable prescribed docket fees for only then shall the court acquire jurisdiction over
prescriptive or reglementary period. 2. The same rule applies to permissive such claim.—Petitioner asserts that the trial court should have declared
counterclaims, third-party claims and similar pleadings, which shall not be respondent in default for having failed to answer her counterclaim. Insofar as
considered filed until and unless the filing fee prescribed therefor is paid. The the permissive counterclaim of petitioner is concerned, there is obviously no
court may allow payment of said fee within a reasonable time but also in no need to file an answer until petitioner has paid the prescribed docket fees for
case beyond its applicable prescriptive or reglementary period 3. Where the only then shall the court acquire jurisdiction over such claim. Meanwhile, the
trial court acquires jurisdiction over a claim by the filing of the appropriate compulsory counterclaim of petitioner for damages based on the filing by
pleading and payment of the prescribed filing fee but, subsequently, the respondent of an allegedly unfounded and malicious suit need not be
judgment awards a claim not specified in the pleading, or if specified the same answered since it is inseparable from the claims of respondent. If respondent
has been left for determination by the court, the additional filing fee therefor were to answer the compulsory counterclaim of petitioner, it would merely
shall constitute a lien on the judgment. It shall be the responsibility of the Clerk result in the former pleading the same facts raised in its complaint.
of Court or his duly authorized deputy to enforce said lien and assess and
collect the additional fee.
PETITION for review on certiorari of a decision of the Court of Appeals.
Same; Same; Same; The trial court should give the defendant a reasonable
time, but in no case beyond the applicable prescriptive or reglemen-tary The facts are stated in the opinion of the Court.
period, to pay the filing fees for her permissive counterclaim.—The above
mentioned ruling in Sun Insurance has been reiterated in the recent case of Cruz, Durian, Alday & Cruz-Matters for petitioner.
Suson v. Court of Appeals. In Suson, the Court explained that although the
Jacinto Jimenez for respondent.
payment of the prescribed docket fees is a jurisdictional requirement, its
nonpayment does not result in the automatic dismissal of the case provided
the docket fees are paid within the applicable prescriptive or reglementary GONZAGA-REYES, J.:
period. Coming now to the case at bar, it has not been alleged by respondent
On 5 May 1989, respondent FGU Insurance Corporation filed a complaint "(14) That, indeed, FGU's cause of action which is not
with the Regional Trial Court of Makati1 alleging that petitioner Evangeline K. supported by any document other than the self-serving
Alday owed it P114,650.76, representing unliquidated cash advances, 'Statement of Account' dated March 28, 1988 x x x
unremitted costs of premiums and other charges incurred by petitioner in the
course of her work as an insurance agent for respondent.2 Respondent also (15) That it should be noted that the cause of action of FGU
prayed for exemplary damages, attorney's fees, and costs of suit.3 Petitioner is not the enforcement of the Special Agent's Contract but
filed her answer and by way of counterclaim, asserted her right for the the alleged 'cash accountabilities which are not based on
payment of P104,893.45, representing direct commissions, profit written agreement x x x.
commissions and contingent bonuses earned from 1 July 1986 to 7
December 1986, and for accumulated premium reserves amounting to x x x x
P500,000.00. In addition, petitioner prayed for attorney's fees, litigation
expenses, moral damages and exemplary damages for the allegedly
unfounded action filed by respondent.4 On 23 August 1989, respondent filed (19) x x x A careful analysis of FGU's three-page complaint
a "Motion to Strike Out Answer With Compulsory Counterclaim And To will show that its cause of action is not for specific
Declare Defendant In Default" because petitioner's answer was allegedly performance or enforcement of the Special Agent's Contract
filed out of time.5 However, the trial court denied the motion on 25 August rather, it is for the payment of the alleged cash
1989 and similarly rejected respondent's motion for reconsideration on 12 accountabilities incurred by defendant during the period form
March 1990.6 A few weeks later, on 11 April 1990, respondent filed a motion [sic] 1975 to 1986 which claim is executory and has not been
to dismiss petitioner's counterclaim, contending that the trial court never ratified. It is the established rule that unenforceable
acquired jurisdiction over the same because of the non-payment of docket contracts, like this purported money claim of FGU, cannot be
fees by petitoner.7 In response, petitioner asked the trial court to declare her sued upon or enforced unless ratified, thus it is as if they
counterclaim as exempt from payment of docket fees since it is compulsory have no effect. x x x."
and that respondent be declared in default for having failed to answer such
counterclaim.8 To support the heading "Compulsory Counterclaim" in her answer
and give the impression that the counterclaim is compulsory
In its 18 September 1990 Order, the trial court9 granted respondent's motion appellant alleged that "FGU has unjustifiably failed to remit to
to dismiss petitioner's counterclaim and consequently, denied petitioner's defendant despite repeated demands in gross violation of their
motion. The court found petitioner's counterclaim to be merely permissive in Special Agent's Contract x x x." The reference to said contract was
nature and held that petitioner's failure to pay docket fees prevented the included purposely to mislead. While on one hand appellant alleged
court from acquiring jurisdiction over the same.10 The trial court similar that appellee's cause of action had nothing to do with the Special
denied petitioner's motion for reconsideration on 28 February Agent's Contract, on the other hand, she claim that FGU violated
1991.1âwphi1.nêt said contract which gives rise of [sic] her cause of action. Clearly,
appellant's cash accountabilities cannot be the offshoot of appellee's
alleged violation of the aforesaid contract.
On 23 December 1998, the Court of Appeals11 sustained the trial court,
finding that petitioner's own admissions, as contained in her answer, show
that her counterclaim is merely permissive. The relevant portion of the On 19 May 1999, the appellate court denied petitioner's motion for
appellate court's decision12 is quoted herewith - reconsideration,13 giving rise to the present petition.
Contrary to the protestations of appellant, mere reading of the Before going into the substantive issues, the Court shall first dispose of some
allegations in the answer a quo will readily show that her procedural matters raised by the parties. Petitioner claims that respondent is
counterclaim can in no way be compulsory. Take note of the estopped from questioning her non-payment of docket fees because it did
following numbered paragraphs in her answer: not raise this particular issue when it filed its motion - the "Motion to Strike
out Answer With Compulsory Counterclaim And To Declare Defendant In
Default" - with the trial court; rather, it was only nine months after receiving
petitioner's answer that respondent assailed the trial court's lack of 1. Are the issues of fact and law raised by the claim and
jurisdiction over petitioner's counterclaims based on the latter's failure to pay counterclaim largely the same?
docket fees.14 Petitioner's position is unmeritorious. Estoppel by laches
arises from the negligence or omission to assert a right within a reasonable 2. Would res judicata bar a subsequent suit on defendant's claim
time, warranting a presumption that the party entitled to assert it either has absent the compulsory counterclaim rule?
abandoned or declined to assert it.15 In the case at bar, respondent cannot
be considered as estopped from assailing the trial court's jurisdiction over 3. Will substantially the same evidence support or refute plaintiff's
petitioner's counterclaim since this issue was raised by respondent with the
claim as well s defendant's counterclaim?
trial court itself - the body where the action is pending - even before the
presentation of any evidence by the parties and definitely, way before any
judgment could be rendered by the trial court. 4. Is there any logical relation between the claim and the
counterclaim?
Meanwhile, respondent questions the jurisdiction of the Court of Appeals
over the appeal filed by petitioner from the 18 September 1990 and 28 Another test, applied in the more recent case of Quintanilla v. Court of
February 1991 orders of the trial court. It is significant to note that this Appeals,21 is the "compelling test of compulsoriness" which requires "a
objection to the appellate court's jurisdiction is raised for the first time before logical relationship between the claim and counterclaim, that is, where
this Court; respondent never having raised this issue before the appellate conducting separate trials of the respective claims of the parties would entail
court. Although the lack of jurisdiction of a court may be raised at any stage a substantial duplication of effort and time by the parties and the court."
of the action, a party may be estopped from raising such questions if he has
actively taken part in the very proceedings which he questions, belatedly As contained in her answer, petitioner's counterclaims are as follows:
objecting to the court's jurisdiction in the event that the judgment or order
subsequently rendered is adverse to him.16 In this case, respondent actively (20) That defendant incorporates and repleads by reference all the
took part in the proceedings before the Court of Appeals by filing its foregoing allegations as may be material to her Counterclaim against
appellee's brief with the same.17 Its participation, when taken together with its FGU.
failure to object to the appellate court's jurisdiction during the entire duration
of the proceedings before such court, demonstrates a willingness to abide by (21) That FGU is liable to pay the following just, valid and legitimate
the resolution of the case by such tribunal and accordingly, respondent is claims of defendant:
now most decidedly estopped from objecting to the Court of Appeals'
assumption of jurisdiction over petitioner's appeal.18
(a) the sum of at least P104,893.45 plus maximum interest
thereon representing, among others, direct commissions,
The basic issue for resolution in this case is whether or not the counterclaim profit commissions and contingent bonuses legally due to
of petitioner is compulsory or permissive in nature. A compulsory defendant; and
counterclaim is one which, being cognizable by the regular courts of justice,
arises out of or is connected with the transaction or occurrence constituting
(b) the minimum amount of P500,000.00 plus the maximum
the subject matter of the opposing party's claim and does not require for its
allowable interest representing defendant's accumulated
adjudication the presence of third parties of whom the court cannot acquire
premium reserve for 1985 and previous years,
jurisdiction.19
which FGU has unjustifiably failed to remit to defendant despite
In Valencia v. Court of Appeals,20 this Court capsulized the criteria or tests
repeated demands in gross violation of their Special Agent's Contract
that may be used in determining whether a counterclaim is compulsory or
and in contravention of the principle of law that "every person must,
permissive, summarized as follows:
in the exercise of his rights and in the performance of his duties, act
with justice, give everyone his due, and observe honesty and good
faith."
C I V P R O I V C i v i l P r o c e d u r e P a g e | 10
(22) That as a result of the filing of this patently baseless, malicious There is no need for need for petitioner to pay docket fees for her
and unjustified Complaint, and FGU's unlawful, illegal and vindictive compulsory counterclaim.25 On the other hand, in order for the trial court to
termination of their Special Agent's Contract, defendant was acquire jurisdiction over her permissive counterclaim, petitioner is bound to
unnecessarily dragged into this litigation and to defense [sic] her side pay the prescribed docket fees.26 The rule on the payment of filing fees has
and assert her rights and claims against FGU, she was compelled to been laid down by the Court in the case of Sun Insurance Office, Ltd. V. Hon.
hire the services of counsel with whom she agreed to pay the Maximiano Asuncion27-
amount of P30,000.00 as and for attorney's fees and stands to incur
litigation expenses in the amount estimated to at least P20,000.00 1. It is not simply the filing of the complaint or appropriate initiatory
and for which FGU should be assessed and made liable to pay pleading, but the payment of the prescribed docket fee, that vests a
defendant. trial court with jurisdiction over the subject-matter or nature of the
action. Where the filing of the initiatory pleading is not accompanied
(23) That considering further the malicious and unwarranted action of by payment of the docket fee, the court may allow payment of the fee
defendant in filing this grossly unfounded action, defendant has within a reasonable time but in no case beyond the applicable
suffered and continues to suffer from serious anxiety, mental prescriptive or reglementary period.
anguish, fright and humiliation. In addition to this, defendant's name,
good reputation and business standing in the insurance business as 2. The same rule applies to permissive counterclaims, third-party
well as in the community have been besmirched and for which FGU claims and similar pleadings, which shall not be considered filed until
should be adjudged and made liable to pay moral damages to and unless the filing fee prescribed therefor is paid. The court may
defendant in the amount of P300,000.00 as minimum. allow payment of said fee within a reasonable time but also in no
case beyond its applicable prescriptive or reglementary period.
(24) That in order to discourage the filing of groundless and
malicious suits like FGU's Complaint, and by way of serving [as] an 3. Where the trial court acquires jurisdiction over a claim by the filing
example for the public good, FGU should be penalized and assessed of the appropriate pleading and payment of the prescribed filing fee
exemplary damages in the sum of P100,000.00 or such amount as but, subsequently, the judgment awards a claim not specified in the
the Honorable Court may deem warranted under the pleading, or if specified the same has been left for determination by
circumstances.22 the court, the additional filing fee therefor shall constitute a lien on
the judgment. It shall be the responsibility of the Clerk of Court or his
Tested against the abovementioned standards, petitioner's counterclaim for duly authorized deputy to enforce said lien and assess and collect
commissions, bonuses, and accumulated premium reserves is merely the additional fee.
permissive. The evidence required to prove petitioner's claims differs from
that needed to establish respondent's demands for the recovery of cash The above mentioned ruling in Sun Insurance has been reiterated in the
accountabilities from petitioner, such as cash advances and costs of recent case of Susan v. Court of Appeals.28 In Suson, the Court explained
premiums. The recovery of respondent's claims is not contingent or that although the payment of the prescribed docket fees is a jurisdictional
dependent upon establishing petitioner's counterclaim, such that conducting requirement, its non-payment does not result in the automatic dismissal of
separate trials will not result in the substantial duplication of the time and the case provided the docket fees are paid within the applicable prescriptive
effort of the court and the parties. One would search the records in vain for a or reglementary period. Coming now to the case at bar, it has not been
logical connection between the parties' claims. This conclusion is further alleged by respondent and there is nothing in the records to show that
reinforced by petitioner's own admissions since she declared in her answer petitioner has attempted to evade the payment of the proper docket fees for
that respondent's cause of action, unlike her own, was not based upon the her permissive counterclaim. As a matter of fact, after respondent filed its
Special Agent's Contract.23 However, petitioner's claims for damages, motion to dismiss petitioner's counterclaim based on her failure to pay docket
allegedly suffered as a result of the filing by respondent of its complaint, are fees, petitioner immediately filed a motion with the trial court, asking it to
compulsory.24 declare her counterclaim as compulsory in nature and therefore exempt from
docket fees and, in addition, to declare that respondent was in default for its
failure to answer her counterclaim.29 However, the trial court dismissed

petitioner's counterclaim. Pursuant to this Court's ruling in Sun Insurance, the
trial court should have instead given petitioner a reasonable time, but in no
case beyond the applicable prescriptive or reglementary period, to pay the
filing fees for her permissive counterclaim.
Petitioner asserts that the trial court should have declared respondent in
default for having failed to answer her counterclaim.30 Insofar as the
permissive counterclaim of petitioner is concerned, there is obviously no
need to file an answer until petitioner has paid the prescribed docket fees for
only then shall the court acquire jurisdiction over such claim. 31 Meanwhile,
the compulsory counterclaim of petitioner for damages based on the filing by
respondent of an allegedly unfounded and malicious suit need not be
answered since it is inseparable from the claims of respondent. If respondent
were to answer the compulsory counterclaim of petitioner, it would merely
result in the former pleading the same facts raised in its complaint. 32
WHEREFORE, the assailed Decision of the Court of Appeals promulgated

on 23 December 1998 and its 19 May 1999 Resolution are hereby
MODIFIED. The compulsory counterclaim of petitioner for damages filed in
Civil Case No. 89-3816 is ordered REINSTATED. Meanwhile, the Regional
Trial Court of Makati (Branch 134) is ordered to require petitioner to pay the
prescribed docket fees for her permissive counterclaim (direct commissions,
profit commissions, contingent bonuses and accumulated premium
reserves), after ascertaining that the applicable prescriptive period has not
yet set in.33
SO ORDERED.1âwphi1.nêt
Melo, Vitug, Panganiban, and Sandoval-Gutierrez, JJ., concur.

G.R. No. 155173 November 23, 2004 down the following criteria to determine whether a counterclaim is compulsory
or permissive: 1) Are issues of fact and law raised by the claim and by the
LAFARGE CEMENT PHILIPPINES, INC., (formerly Lafarge Philippines, counterclaim largely the same? 2) Would res judicata bar a subsequent suit
Inc.), LUZON CONTINENTAL LAND CORPORATION, CONTINENTAL on defendant’s claim, absent the compulsory counterclaim rule? 3) Will
OPERATING CORPORATION and PHILIP ROSEBERG, petitioners, substantially the same evidence support or refute plaintiff’s claim as well as
vs. defendant’s counterclaim? 4) Is there any logical relation between the claim
CONTINENTAL CEMENT CORPORATION, GREGORY T. LIM and and the counterclaim? A positive answer to all four questions would indicate
ANTHONY A. MARIANO, respondents. that the counterclaim is compulsory. Adopted in Quintanilla v. CA and
reiterated in Alday v. FGU Insurance Corporation, the “compelling test of
Actions; Counterclaims; Pleadings and Practice; Words and Phrases; compulsoriness” characterizes a counterclaim as compulsory if there should
Counterclaims are defined as “any claim which a defending party may have exist a “logical relationship” between the main claim and the counterclaim.
against an opposing party.”—Counterclaims are defined in Section 6 of Rule 6 There exists such a relationship when conducting separate trials of the
of the Rules of Civil Procedure as “any claim which a defending party may respective claims of the parties would entail substantial duplication of time and
have against an opposing party.” They are generally allowed in order to avoid effort by the parties and the court; when the multiple claims involve the same
a multiplicity of suits and to facilitate the disposition of the whole controversy factual and legal issues; or when the claims are offshoots of the same basic
in a single action, such that the defendant’s demand may be adjudged by a controversy between the parties.
counterclaim rather than by an independent suit. The only limitations to this
principle are (1) that the court should have jurisdiction over the subject matter
of the counterclaim, and (2) that it could acquire jurisdiction over third parties
Same; Same; Same; Damages; A counterclaim for damages allegedly
whose presence is essential for its adjudication.
suffered by the defendant in consequence of the plaintiff’s action constitute
compulsory counterclaim.—The above allegations show that petitioners’
counterclaims for damages were the result of respondents’ (Lim and Mariano)
Same; Same; Same; A counterclaim is permissive “if it does not arise out of or act of filing the Complaint and securing the Writ of Attachment in bad faith. Tiu
is not necessarily connected with the subject matter of the opposing party’s Po v. Bautista involved the issue of whether the counterclaim that sought
claim.”—A counterclaim may either be permissive or compulsory. It is moral, actual and exemplary damages and attorney’s fees against
permissive “if it does not arise out of or is not necessarily connected with the respondents on account of their “malicious and unfounded” complaint was
subject matter of the opposing party’s claim.” A permissive counterclaim is compulsory. In that case, we held as follows: “Petitioners’ counterclaim for
essentially an independent claim that may be filed separately in another case. damages fulfills the necessary requisites of a compulsory counterclaim. They
A counterclaim is compulsory when its object “arises out of or is necessarily are damages claimed to have been suffered by petitioners as a consequence
connected with the transaction or occurrence constituting the subject matter of of the action filed against them. They have to be pleaded in the same action;
the opposing party’s claim and does not require for its adjudication the otherwise, petitioners would be precluded by the judgment from invoking the
presence of third parties of whom the court cannot acquire jurisdiction.” same in an independent action. The pronouncement in Papa vs. Banaag (17
SCRA 1081) (1966) is in point: “Compensatory, moral and exemplary
damages, allegedly suffered by the creditor in consequence of the debtor’s
Same; Same; Same; Compelling Test of Compulsoriness; Criteria to action, are also compulsory counterclaim barred by the dismissal of the
Determine Whether a Counterclaim is Compulsory or Permissive; The debtor’s action. They cannot be claimed in a subsequent action by the creditor
“compelling test of compulsoriness” characterizes a counterclaim as against the debtor.”
compulsory if there should exist a “logical relationship” between the main claim
and the counterclaim.—Unlike permissive counterclaims, compulsory
counterclaims should be set up in the same action; otherwise, they would be
barred forever. NAMARCO v. Federation of United Namarco Distributors laid
Same; Same; Same; Parties; The general rule that a defendant cannot by a while a corporation is an entity separate and distinct from its stockholders, the
counterclaim bring into the action any claim against persons other than the corporate fiction may be disregarded if “used to defeat public convenience,
plaintiff admits of an exception under Section 14, Rule 6, i.e., when the justify a wrong, protect fraud, or defend crime.” In these instances, “the law will
presence of parties other than those to the original action is required for the regard the corporation as an association of persons, or in case of two
granting of complete relief in the determination of a counterclaim or cross- corporations, will merge them into one.” Thus, there is no debate on whether,
claim, and jurisdiction over such parties can be obtained.—Among the issues in alleging bad faith on the part of Lim and Mariano the counterclaims had in
raised in Sapugay was whether Cardenas, who was not a party to the original effect made them “indispensable parties” thereto; based on the alleged facts,
action, might nevertheless be impleaded in the counterclaim. We disposed of both are clearly parties in interest to the counterclaim.
this issue as follows: “A counterclaim is defined as any claim for money or
other relief which a defending party may have against an opposing party.
However, the general rule that a defendant cannot by a counterclaim bring into Same; Same; Same; Same; Words and Phrases; Suability and liability are two
the action any claim against persons other than the plaintiff admits of an distinct matters.—Suability and liability are two distinct matters. While the
exception under Section 14, Rule 6 which provides that ‘when the presence of Court does rule that the counterclaims against Respondent CCC’s president
parties other than those to the original action is required for the granting of and manager may be properly filed, the determination of whether both can in
complete relief in the determination of a counterclaim or cross-claim, the court fact be held jointly and severally liable with respondent corporation is entirely
shall order them to be brought in as defendants, if jurisdiction over them can another issue that should be ruled upon by the trial court.
be obtained.’ The inclusion, therefore, of Cardenas in petitioners’ counterclaim
is sanctioned by the rules.” The prerogative of bringing in new parties to the
action at any stage before judgment is intended to accord complete relief to all
Same; Same; Same; Same; While a compulsory counterclaim may implead
of them in a single action and to avert a duplicity and even a multiplicity of suits
persons not parties to the original complaint, the general rule that a defendant
thereby.
in a compulsory counterclaim need not file any responsive pleading—as it is
deemed to have adopted the allegations in the complaint as its answer—does
not apply; A new party impleaded by the plaintiff in a compulsory counterclaim
Same; Same; Same; Same; Corporation Law; Piercing the Veil Corporate cannot be considered to have automatically and unknowingly submitted to the
Fiction; Allegations of fraud and bad faith on the part of certain corporate jurisdiction of the court—summons must be served on them for the court to
officers or stockholders may warrant the piercing of the veil of corporate fiction obtain jurisdiction over them.—However, while a compulsory counterclaim
so that the said individual may not seek refuge therein, but may be held may implead persons not parties to the original complaint, the general rule—a
individually and personally liable for his or her actions.—The inclusion of a defendant in a compulsory counterclaim need not file any responsive pleading,
corporate officer or stockholder—Cardenas in Sapugay or Lim and Mariano in as it is deemed to have adopted the allegations in the complaint as its
the instant case—is not premised on the assumption that the plaintiff answer—does not apply. The filing of a responsive pleading is deemed a
corporation does not have the financial ability to answer for damages, such voluntary submission to the jurisdiction of the court; a new party impleaded by
that it has to share its liability with individual defendants. Rather, such inclusion the plaintiff in a compulsory counterclaim cannot be considered to have
is based on the allegations of fraud and bad faith on the part of the corporate automatically and unknowingly submitted to the jurisdiction of the court. A
officer or stockholder. These allegations may warrant the piercing of the veil of contrary ruling would result in mischievous consequences whereby a party
corporate fiction, so that the said individual may not seek refuge therein, but may be indiscriminately impleaded as a defendant in a compulsory
may be held individually and personally liable for his or her actions. In Tramat counterclaim; and judgment rendered against it without its knowledge, much
Mercantile v. Court of Appeals, the Court held that generally, it should only be less participation in the proceedings, in blatant disregard of rudimentary due
the corporation that could properly be held liable. However, circumstances process requirements. The correct procedure in instances such as this is for
may warrant the inclusion of the personal liability of a corporate director, the trial court, per Section 12 of Rule 6 of the Rules of Court, to “order [such
trustee, or officer, if the said individual is found guilty of bad faith or gross impleaded parties] to be brought in as defendants, if jurisdiction over them can
negligence in directing corporate affairs. Remo Jr. v. IAC has stressed that
be obtained,” by directing that summons be served on them. In this manner, of each paying an aliquot part. They are jointly and severally liable for the
they can be properly appraised of and answer the charges against them. Only whole amount. x x x
upon service of summons can the trial court obtain jurisdiction over them.
Same; Same; Same; The fact that the liability sought against the corporation
Obligations and Contracts; Joint and Solidary Obligations; Obligations may be is for specific performance and tort, while that sought against the individual
classified as either joint or solidary; Petitioners’ usage of the term “joint and respondents is based solely on tort does not negate the solidary nature of their
solidary” is confusing and ambiguous.— Obligations may be classified as liability for alleged tortuous acts.—In a “joint” obligation, each obligor answers
either joint or solidary. “Joint” or “jointly” or “conjoint” means mancum or only for a part of the whole liability; in a “solidary” or “joint and several”
mancomunada or pro rata obligation; on the other hand, “solidary obligations” obligation, the relationship between the active and the passive subjects is so
may be used interchangeably with “joint and several” or “several.” Thus, close that each of them must comply with or demand the fulfillment of the whole
petitioners’ usage of the term “joint and solidary” is confusing and ambiguous. obligation. The fact that the liability sought against the CCC is for specific
performance and tort, while that sought against the individual respondents is
based solely on tort does not negate the solidary nature of their liability for
Same; Same; Torts; Obligations arising from tort are, by their nature, always tortuous acts alleged in the counterclaims. Article 1211 of the Civil Code is
solidary.—The ambiguity in petitioners’ counterclaims notwithstanding, explicit on this point: “Solidarity may exist although the creditors and the
respondents’ liability, if proven, is solidary. This characterization finds basis in debtors may not be bound in the same manner and by the same periods and
Article 1207 of the Civil Code, which provides that obligations are generally conditions.”
considered joint, except when otherwise expressly stated or when the law or
the nature of the obligation requires solidarity. However, obligations arising
from tort are, by their nature, always solidary. We have assiduously maintained Same; Same; Same; In cases filed by the creditor, a solidary debtor may
this legal principle as early as 1912 in Worcester v. Ocampo, in which we held: invoke defenses arising from the nature of the obligation, from circumstances
“x x x The difficulty in the contention of the appellants is that they fail to personal to it, or even from those personal to its co-debtors.—The solidary
recognize that the basis of the present action is tort. They fail to recognize the character of respondents’ alleged liability is precisely why credence cannot be
universal doctrine that each joint tort feasor is not only individually liable for the given to petitioners’ assertion. According to such assertion, Respondent CCC
tort in which he participates, but is also jointly liable with his tort feasors. x x x cannot move to dismiss the counterclaims on grounds that pertain solely to its
“It may be stated as a general rule that joint tort feasors are all the persons individual co-debtors. In cases filed by the creditor, a solidary debtor may
who command, instigate, promote, encourage, advise, countenance, invoke defenses arising from the nature of the obligation, from circumstances
cooperate in, aid or abet the commission of a tort, or who approve of it after it personal to it, or even from those personal to its co-debtors. Article 1222 of the
is done, if done for their benefit. They are each liable as principals, to the same Civil Code provides: “A solidary debtor may, in actions filed by the creditor,
extent and in the same manner as if they had performed the wrongful act avail itself of all defenses which are derived from the nature of the obligation
themselves. x x x “Joint tort feasors are jointly and severally liable for the tort and of those which are personal to him, or pertain to his own share. With
which they commit. The persons injured may sue all of them or any number respect to those which personally belong to the others, he may avail himself
less than all. Each is liable for the whole damages caused by all, and all thereof only as regards that part of the debt for which the latter are
together are jointly liable for the whole damage. It is no defense for one sued responsible.” (Emphasis supplied). The act of Respondent CCC as a solidary
alone, that the others who participated in the wrongful act are not joined with debtor—that of filing a motion to dismiss the counterclaim on grounds that
him as defendants; nor is it any excuse for him that his participation in the tort pertain only to its individual co-debtors—is therefore allowed.
was insignificant as compared to that of the others. x x x “Joint tort feasors are
not liable pro rata. The damages can not be apportioned among them, except
among themselves. They cannot insist upon an apportionment, for the purpose
Same; Same; Same; Compulsory Counterclaims; Counterclaims that are only DECISION
for damages and attorney’s fees and that arise from the filing of the complaint
shall be considered as special defenses and need not be answered.— PANGANIBAN, J.:
However, a perusal of its Motion to Dismiss the counterclaims shows that
Respondent CCC filed it on behalf of Co-respondents Lim and Mariano; it did May defendants in civil cases implead in their counterclaims persons who
not pray that the counterclaim against it be dismissed. Be that as it may, were not parties to the original complaints? This is the main question to be
Respondent CCC cannot be declared in default. Jurisprudence teaches that if answered in this controversy.
the issues raised in the compulsory counterclaim are so intertwined with the
allegations in the complaint, such issues are deemed automatically joined. The Case
Counterclaims that are only for damages and attorney’s fees and that arise
from the filing of the complaint shall be considered as special defenses and Before us is a Petition for Review1 under Rule 45 of the Rules of Court,
need not be answered. seeking to nullify the May 22, 20022 and the September 3, 2002 Orders3 of
the Regional Trial Court (RTC) of Quezon City (Branch 80) in Civil Case No.
Q-00-41103. The decretal portion of the first assailed Order reads:
Same; Same; Same; A corporation has a legal personality entirely separate
and distinct from that of its officers and cannot act for and on their behalf, "WHEREFORE, in the light of the foregoing as earlier stated, the
plaintiff's motion to dismiss claims is granted. Accordingly, the
without being so authorized.—While Respondent CCC can move to dismiss
defendants' claims against Mr. Lim and Mr. Mariano captioned as
the counterclaims against it by raising grounds that pertain to individual their counterclaims are dismissed."4
defendants Lim and Mariano, it cannot file the same Motion on their behalf for
the simple reason that it lacks the requisite authority to do so. A corporation
The second challenged Order denied petitioners' Motion for Reconsideration.
has a legal personality entirely separate and distinct from that of its officers
and cannot act for and on their behalf, without being so authorized. Thus,
The Facts
unless expressly adopted by Lim and Mariano, the Motion to Dismiss the
compulsory counterclaim filed by Respondent CCC has no force and effect as
Briefly, the origins of the present controversy can be traced to the Letter of
to them.
Intent (LOI) executed by both parties on August 11, 1998, whereby Petitioner
Lafarge Cement Philippines, Inc. (Lafarge) -- on behalf of its affiliates and
other qualified entities, including Petitioner Luzon Continental Land
PETITION for review on certiorari of the orders of the Regional Trial Court of Corporation (LCLC) -- agreed to purchase the cement business of
Quezon City, Br. 80. Respondent Continental Cement Corporation (CCC). On October 21, 1998,
both parties entered into a Sale and Purchase Agreement (SPA). At the time
of the foregoing transactions, petitioners were well aware that CCC had a
case pending with the Supreme Court. The case was docketed as GR No.
The facts are stated in the opinion of the Court. 119712, entitled Asset Privatization Trust (APT) v. Court of Appeals and
Sycip, Salazar, Hernandez and Gatmaitan for petitioners. Continental Cement Corporation.
Pangilinan, Britanico, Sarmiento and Franco Law Offices for respondent In anticipation of the liability that the High Tribunal might adjudge against
Continental Cement Corporation. CCC, the parties, under Clause 2 (c) of the SPA, allegedly agreed to retain
from the purchase price a portion of the contract price in the amount of
P117,020,846.84 -- the equivalent of US$2,799,140. This amount was to be
deposited in an interest-bearing account in the First National City Bank of
New York (Citibank) for payment to APT, the petitioner in GR No. 119712.
However, petitioners allegedly refused to apply the sum to the payment to Ruling of the Trial Court
APT, despite the subsequent finality of the Decision in GR No. 119712 in
favor of the latter and the repeated instructions of Respondent CCC. Fearful On May 22, 2002, the Regional Trial Court of Quezon City (Branch 80)
that nonpayment to APT would result in the foreclosure, not just of its dismissed petitioners' counterclaims for several reasons, among which were
properties covered by the SPA with Lafarge but of several other properties as the following: a) the counterclaims against Respondents Lim and Mariano
well, CCC filed before the Regional Trial Court of Quezon City on June 20, were not compulsory; b) the ruling in Sapugay was not applicable; and c)
2000, a "Complaint with Application for Preliminary Attachment" against petitioners' Answer with Counterclaims violated procedural rules on the
petitioners. Docketed as Civil Case No. Q-00-41103, the Complaint prayed, proper joinder of causes of action.6
among others, that petitioners be directed to pay the "APT Retained Amount"
referred to in Clause 2 (c) of the SPA. Acting on the Motion for Reconsideration filed by petitioners, the trial court --
in an Amended Order dated September 3, 20027 -- admitted some errors in
Petitioners moved to dismiss the Complaint on the ground that it violated the its May 22, 2002 Order, particularly in its pronouncement that their
prohibition on forum-shopping. Respondent CCC had allegedly made the counterclaim had been pleaded against Lim and Mariano only. However, the
same claim it was raising in Civil Case No. Q-00-41103 in another action, RTC clarified that it was dismissing the counterclaim insofar as it impleaded
which involved the same parties and which was filed earlier before the Respondents Lim and Mariano, even if it included CCC.
International Chamber of Commerce. After the trial court denied the Motion
to Dismiss in its November 14, 2000 Order, petitioners elevated the matter
Hence this Petition.8
before the Court of Appeals in CA-GR SP No. 68688.
Issues
In the meantime, to avoid being in default and without prejudice to the
outcome of their appeal, petitioners filed their Answer and Compulsory
Counterclaims ad Cautelam before the trial court in Civil Case No. Q-00- In their Memorandum, petitioners raise the following issues for our
41103. In their Answer, they denied the allegations in the Complaint. They consideration:
prayed -- by way of compulsory counterclaims against Respondent CCC, its
majority stockholder and president Gregory T. Lim, and its corporate "[a] Whether or not the RTC gravely erred in refusing to rule that
secretary Anthony A. Mariano -- for the sums of (a) P2,700,000 each as Respondent CCC has no personality to move to dismiss petitioners'
actual damages, (b) P100,000,000 each as exemplary damages, (c) compulsory counterclaims on Respondents Lim and Mariano's
P100,000,000 each as moral damages, and (d) P5,000,000 each as behalf.
attorney's fees plus costs of suit.
"[b] Whether or not the RTC gravely erred in ruling that (i) petitioners'
Petitioners alleged that CCC, through Lim and Mariano, had filed the counterclaims against Respondents Lim and Mariano are not
"baseless" Complaint in Civil Case No. Q-00-41103 and procured the Writ of compulsory; (ii) Sapugay v. Court of Appeals is inapplicable here;
Attachment in bad faith. Relying on this Court's pronouncement in Sapugay and (iii) petitioners violated the rule on joinder of causes of action."9
v. CA,5 petitioners prayed that both Lim and Mariano be held "jointly and
solidarily" liable with Respondent CCC. For clarity and coherence, the Court will resolve the foregoing in reverse
order.
On behalf of Lim and Mariano who had yet to file any responsive pleading,
CCC moved to dismiss petitioners' compulsory counterclaims on grounds The Court's Ruling
that essentially constituted the very issues for resolution in the instant
Petition. The Petition is meritorious.
First Issue: parties would entail substantial duplication of time and effort by the parties
and the court; when the multiple claims involve the same factual and legal
Counterclaims and Joinder of Causes of Action. issues; or when the claims are offshoots of the same basic controversy
between the parties.
Petitioners' Counterclaims Compulsory
We shall now examine the nature of petitioners' counterclaims against
respondents with the use of the foregoing parameters.
Counterclaims are defined in Section 6 of Rule 6 of the Rules of Civil
Procedure as "any claim which a defending party may have against an
opposing party." They are generally allowed in order to avoid a multiplicity of Petitioners base their counterclaim on the following allegations:
suits and to facilitate the disposition of the whole controversy in a single
action, such that the defendant's demand may be adjudged by a "Gregory T. Lim and Anthony A. Mariano were the persons
counterclaim rather than by an independent suit. The only limitations to this responsible for making the bad faith decisions for, and causing
principle are (1) that the court should have jurisdiction over the subject matter plaintiff to file this baseless suit and to procure an unwarranted writ of
of the counterclaim, and (2) that it could acquire jurisdiction over third parties attachment, notwithstanding their knowledge that plaintiff has no right
whose presence is essential for its adjudication.10 to bring it or to secure the writ. In taking such bad faith actions,
Gregory T. Lim was motivated by his personal interests as one of the
A counterclaim may either be permissive or compulsory. It is permissive "if it owners of plaintiff while Anthony A. Mariano was motivated by his
does not arise out of or is not necessarily connected with the subject matter sense of personal loyalty to Gregory T. Lim, for which reason he
of the opposing party's claim."11 A permissive counterclaim is essentially an disregarded the fact that plaintiff is without any valid cause.
independent claim that may be filed separately in another case.
"Consequently, both Gregory T. Lim and Anthony A. Mariano are the
A counterclaim is compulsory when its object "arises out of or is necessarily plaintiff's co-joint tortfeasors in the commission of the acts
connected with the transaction or occurrence constituting the subject matter complained of in this answer and in the compulsory counterclaims
of the opposing party's claim and does not require for its adjudication the pleaded below. As such they should be held jointly and solidarily
presence of third parties of whom the court cannot acquire jurisdiction."12 liable as plaintiff's co-defendants to those compulsory counterclaims
pursuant to the Supreme Court's decision in Sapugay v. Mobil.
Unlike permissive counterclaims, compulsory counterclaims should be set up
in the same action; otherwise, they would be barred forever. NAMARCO v. xxx xxx xxx
Federation of United Namarco Distributors13 laid down the following criteria
to determine whether a counterclaim is compulsory or permissive: 1) Are "The plaintiff's, Gregory T. Lim and Anthony A. Mariano's bad faith
issues of fact and law raised by the claim and by the counterclaim largely the filing of this baseless case has compelled the defendants to engage
same? 2) Would res judicata bar a subsequent suit on defendant's claim, the services of counsel for a fee and to incur costs of litigation, in
absent the compulsory counterclaim rule? 3) Will substantially the same amounts to be proved at trial, but in no case less than P5 million for
evidence support or refute plaintiff's claim as well as defendant's each of them and for which plaintiff Gregory T. Lim and Anthony A.
counterclaim? 4) Is there any logical relation between the claim and the Mariano should be held jointly and solidarily liable.
counterclaim? A positive answer to all four questions would indicate that the
counterclaim is compulsory. "The plaintiff's, Gregory T. Lim's and Anthony A. Mariano's actions
have damaged the reputations of the defendants and they should be
Adopted in Quintanilla v. CA14 and reiterated in Alday v. FGU Insurance held jointly and solidarily liable to them for moral damages of P100
Corporation,15 the "compelling test of compulsoriness" characterizes a million each.
counterclaim as compulsory if there should exist a "logical relationship"
between the main claim and the counterclaim. There exists such a
relationship when conducting separate trials of the respective claims of the
"In order to serve as an example for the public good and to deter Sapugay v. Court of Appeals Applicable to the Case at Bar
similar baseless, bad faith litigation, the plaintiff, Gregory T. Lim and
Anthony A. Mariano should be held jointly and solidarily liable to the Sapugay v. Court of Appeals finds application in the present case. In
defendants for exemplary damages of P100 million each." 16 Sapugay, Respondent Mobil Philippines filed before the trial court of Pasig
an action for replevin against Spouses Marino and Lina Joel Sapugay. The
The above allegations show that petitioners' counterclaims for damages were Complaint arose from the supposed failure of the couple to keep their end of
the result of respondents' (Lim and Mariano) act of filing the Complaint and their Dealership Agreement. In their Answer with Counterclaim, petitioners
securing the Writ of Attachment in bad faith. Tiu Po v. Bautista17 involved alleged that after incurring expenses in anticipation of the Dealership
the issue of whether the counterclaim that sought moral, actual and Agreement, they requested the plaintiff to allow them to get gas, but that it
exemplary damages and attorney's fees against respondents on account of had refused. It claimed that they still had to post a surety bond which, initially
their "malicious and unfounded" complaint was compulsory. In that case, we fixed at P200,000, was later raised to P700,000.
held as follows:
The spouses exerted all efforts to secure a bond, but the bonding companies
"Petitioners' counterclaim for damages fulfills the necessary required a copy of the Dealership Agreement, which respondent continued to
requisites of a compulsory counterclaim. They are damages claimed withhold from them. Later, petitioners discovered that respondent and its
to have been suffered by petitioners as a consequence of the action manager, Ricardo P. Cardenas, had intended all along to award the
filed against them. They have to be pleaded in the same action; dealership to Island Air Product Corporation.
otherwise, petitioners would be precluded by the judgment from
invoking the same in an independent action. The pronouncement in In their Answer, petitioners impleaded in the counterclaim Mobil Philippines
Papa vs. Banaag (17 SCRA 1081) (1966) is in point: and its manager -- Ricardo P. Cardenas -- as defendants. They prayed that
judgment be rendered, holding both jointly and severally liable for pre-
"Compensatory, moral and exemplary damages, allegedly suffered operation expenses, rental, storage, guarding fees, and unrealized profit
by the creditor in consequence of the debtor's action, are also including damages. After both Mobil and Cardenas failed to respond to their
compulsory counterclaim barred by the dismissal of the debtor's Answer to the Counterclaim, petitioners filed a "Motion to Declare Plaintiff
action. They cannot be claimed in a subsequent action by the and its Manager Ricardo P. Cardenas in Default on Defendant's
creditor against the debtor." Counterclaim."
"Aside from the fact that petitioners' counterclaim for damages Among the issues raised in Sapugay was whether Cardenas, who was not a
cannot be the subject of an independent action, it is the same party to the original action, might nevertheless be impleaded in the
evidence that sustains petitioners' counterclaim that will refute counterclaim. We disposed of this issue as follows:
private respondent's own claim for damages. This is an additional
factor that characterizes petitioners' counterclaim as compulsory."18 "A counterclaim is defined as any claim for money or other relief
which a defending party may have against an opposing party.
Moreover, using the "compelling test of compulsoriness," we find that, clearly, However, the general rule that a defendant cannot by a counterclaim
the recovery of petitioners' counterclaims is contingent upon the case filed by bring into the action any claim against persons other than the plaintiff
respondents; thus, conducting separate trials thereon will result in a admits of an exception under Section 14, Rule 6 which provides that
substantial duplication of the time and effort of the court and the 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
Since the counterclaim for damages is compulsory, it must be set up in the counterclaim or cross-claim, the court shall order them to be brought
same action; otherwise, it would be barred forever. If it is filed concurrently in as defendants, if jurisdiction over them can be obtained.' The
with the main action but in a different proceeding, it would be abated on the inclusion, therefore, of Cardenas in petitioners' counterclaim is
ground of litis pendentia; if filed subsequently, it would meet the same fate on sanctioned by the rules."20
the ground of res judicata.19
The prerogative of bringing in new parties to the action at any stage before should be threshed out during the trial; whether or not "fraud" is extant under
judgment is intended to accord complete relief to all of them in a single action the circumstances is an issue that must be established by convincing
and to avert a duplicity and even a multiplicity of suits thereby. evidence.26
In insisting on the inapplicability of Sapugay, respondents argue that new Suability and liability are two distinct matters. While the Court does rule that
parties cannot be included in a counterclaim, except when no complete relief the counterclaims against Respondent CCC's president and manager may
can be had. They add that "[i]n the present case, Messrs. Lim and Mariano be properly filed, the determination of whether both can in fact be held jointly
are not necessary for petitioners to obtain complete relief from Respondent and severally liable with respondent corporation is entirely another issue that
CCC as plaintiff in the lower court. This is because Respondent CCC as a should be ruled upon by the trial court.
corporation with a separate [legal personality] has the juridical capacity to
indemnify petitioners even without Messrs. Lim and Mariano."21 However, while a compulsory counterclaim may implead persons not parties
to the original complaint, the general rule -- a defendant in a compulsory
We disagree. The inclusion of a corporate officer or stockholder -- Cardenas counterclaim need not file any responsive pleading, as it is deemed to have
in Sapugay or Lim and Mariano in the instant case -- is not premised on the adopted the allegations in the complaint as its answer -- does not apply. The
assumption that the plaintiff corporation does not have the financial ability to filing of a responsive pleading is deemed a voluntary submission to the
answer for damages, such that it has to share its liability with individual jurisdiction of the court; a new party impleaded by the plaintiff in a
defendants. Rather, such inclusion is based on the allegations of fraud and compulsory counterclaim cannot be considered to have automatically and
bad faith on the part of the corporate officer or stockholder. These allegations unknowingly submitted to the jurisdiction of the court. A contrary ruling would
may warrant the piercing of the veil of corporate fiction, so that the said result in mischievous consequences whereby a party may be indiscriminately
individual may not seek refuge therein, but may be held individually and impleaded as a defendant in a compulsory counterclaim; and judgment
personally liable for his or her actions. rendered against it without its knowledge, much less participation in the
proceedings, in blatant disregard of rudimentary due process requirements.
In Tramat Mercantile v. Court of Appeals,22 the Court held that generally, it
should only be the corporation that could properly be held liable. However, The correct procedure in instances such as this is for the trial court, per
circumstances may warrant the inclusion of the personal liability of a Section 12 of Rule 6 of the Rules of Court, to "order [such impleaded parties]
corporate director, trustee, or officer, if the said individual is found guilty of to be brought in as defendants, if jurisdiction over them can be obtained," by
bad faith or gross negligence in directing corporate affairs. directing that summons be served on them. In this manner, they can be
properly appraised of and answer the charges against them. Only upon
Remo Jr. v. IAC23 has stressed that while a corporation is an entity separate service of summons can the trial court obtain jurisdiction over them.
and distinct from its stockholders, the corporate fiction may be disregarded if
"used to defeat public convenience, justify a wrong, protect fraud, or defend In Sapugay, Cardenas was furnished a copy of the Answer with
crime." In these instances, "the law will regard the corporation as an Counterclaim, but he did not file any responsive pleading to the counterclaim
association of persons, or in case of two corporations, will merge them into leveled against him. Nevertheless, the Court gave due consideration to
one." Thus, there is no debate on whether, in alleging bad faith on the part of certain factual circumstances, particularly the trial court's treatment of the
Lim and Mariano the counterclaims had in effect made them "indispensable Complaint as the Answer of Cardenas to the compulsory counterclaim and of
parties" thereto; based on the alleged facts, both are clearly parties in his seeming acquiescence thereto, as evidenced by his failure to make any
interest to the counterclaim.24 objection despite his active participation in the proceedings. It was held thus:
Respondents further assert that "Messrs. Lim and Mariano cannot be held "It is noteworthy that Cardenas did not file a motion to dismiss the
personally liable [because their assailed acts] are within the powers granted counterclaim against him on the ground of lack of jurisdiction. While it
to them by the proper board resolutions; therefore, it is not a personal is a settled rule that the issue of jurisdiction may be raised even for
decision but rather that of the corporation as represented by its board of the first time on appeal, this does not obtain in the instant case.
directors."25 The foregoing assertion, however, is a matter of defense that Although it was only Mobil which filed an opposition to the motion to
declare in default, the fact that the trial court denied said motion, both (a) The party joining the causes of action shall comply with the rules
as to Mobil and Cardenas on the ground that Mobil's complaint on joinder of parties; x x x"
should be considered as the answer to petitioners' compulsory
counterclaim, leads us to the inescapable conclusion that the trial Section 6. Permissive joinder of parties. – All persons in whom or
court treated the opposition as having been filed in behalf of both against whom any right to relief in respect to or arising out of the
Mobil and Cardenas and that the latter had adopted as his answer same transaction or series of transactions is alleged to exist whether
the allegations raised in the complaint of Mobil. Obviously, it was this jointly, severally, or in the alternative, may, except as otherwise
ratiocination which led the trial court to deny the motion to declare provided in these Rules, join as plaintiffs or be joined as defendants
Mobil and Cardenas in default. Furthermore, Cardenas was not in one complaint, where any question of law or fact common to all
unaware of said incidents and the proceedings therein as he testified such plaintiffs or to all such defendants may arise in the action; but
and was present during trial, not to speak of the fact that as manager the court may make such orders as may be just to prevent any
of Mobil he would necessarily be interested in the case and could plaintiff or defendant from being embarrassed or put to expense in
readily have access to the records and the pleadings filed therein. connection with any proceedings in which he may have no interest."
"By adopting as his answer the allegations in the complaint which The foregoing procedural rules are founded on practicality and convenience.
seeks affirmative relief, Cardenas is deemed to have recognized the They are meant to discourage duplicity and multiplicity of suits. This objective
jurisdiction of the trial court over his person and submitted thereto. is negated by insisting -- as the court a quo has done -- that the compulsory
He may not now be heard to repudiate or question that counterclaim for damages be dismissed, only to have it possibly re-filed in a
jurisdiction."27 separate proceeding. More important, as we have stated earlier,
Respondents Lim and Mariano are real parties in interest to the compulsory
Such factual circumstances are unavailing in the instant case. The counterclaim; it is imperative that they be joined therein. Section 7 of Rule 3
records do not show that Respondents Lim and Mariano are either provides:
aware of the counterclaims filed against them, or that they have
actively participated in the proceedings involving them. Further, in "Compulsory joinder of indispensable parties. – Parties in interest without
dismissing the counterclaims against the individual respondents, the whom no final determination can be had of an action shall be joined either as
court a quo -- unlike in Sapugay -- cannot be said to have treated plaintiffs or defendants."
Respondent CCC's Motion to Dismiss as having been filed on their
behalf.
Moreover, in joining Lim and Mariano in the compulsory counterclaim,
petitioners are being consistent with the solidary nature of the liability alleged
Rules on Permissive Joinder of Causes therein.
of Action or Parties Not Applicable
Second Issue:
Respondent CCC contends that petitioners' counterclaims violated the rule
on joinder of causes of action. It argues that while the original Complaint was
CCC's Personality to Move to Dismiss the Compulsory Counterclaims
a suit for specific performance based on a contract, the counterclaim for
damages was based on the tortuous acts of respondents.28 In its Motion to
Dismiss, CCC cites Section 5 of Rule 2 and Section 6 of Rule 3 of the Rules Characterizing their counterclaim for damages against Respondents CCC,
of Civil Procedure, which we quote: Lim and Mariano as "joint and solidary," petitioners prayed:
"Section 5. Joinder of causes of action. – A party may in one "WHEREFORE, it is respectfully prayed that after trial judgment be
pleading assert, in the alternative or otherwise, as many causes of rendered:
action as he may have against an opposing party, subject to the
following conditions: "1. Dismissing the complaint in its entirety;
"2. Ordering the plaintiff, Gregory T. Lim and Anthony A. Mariano "Joint tort feasors are jointly and severally liable for the tort which
jointly and solidarily to pay defendant actual damages in the sum of they commit. The persons injured may sue all of them or any number
at least P2,700,000.00; less than all. Each is liable for the whole damages caused by all, and
all together are jointly liable for the whole damage. It is no defense
"3. Ordering the plaintiff, Gregory T. Lim and Anthony A, Mariano for one sued alone, that the others who participated in the wrongful
jointly and solidarily to pay the defendants LPI, LCLC, COC and act are not joined with him as defendants; nor is it any excuse for him
Roseberg: that his participation in the tort was insignificant as compared to that
of the others. x x x
"a. Exemplary damages of P100 million each;
"Joint tort feasors are not liable pro rata. The damages can not be
apportioned among them, except among themselves. They cannot
"b. Moral damages of P100 million each; and
insist upon an apportionment, for the purpose of each paying an
aliquot part. They are jointly and severally liable for the whole
"c. Attorney's fees and costs of suit of at least P5 million each. amount. x x x
Other reliefs just and equitable are likewise prayed for."29 "A payment in full for the damage done, by one of the joint tort
feasors, of course satisfies any claim which might exist against the
Obligations may be classified as either joint or solidary. "Joint" or "jointly" or others. There can be but satisfaction. The release of one of the joint
"conjoint" means mancum or mancomunada or pro rata obligation; on the tort feasors by agreement generally operates to discharge all. x x x
other hand, "solidary obligations" may be used interchangeably with "joint
and several" or "several." Thus, petitioners' usage of the term "joint and "Of course the court during trial may find that some of the alleged tort
solidary" is confusing and ambiguous. feasors are liable and that others are not liable. The courts may
release some for lack of evidence while condemning others of the
The ambiguity in petitioners' counterclaims notwithstanding, respondents' alleged tort feasors. And this is true even though they are charged
liability, if proven, is solidary. This characterization finds basis in Article 1207 jointly and severally."
of the Civil Code, which provides that obligations are generally considered
joint, except when otherwise expressly stated or when the law or the nature In a "joint" obligation, each obligor answers only for a part of the whole
of the obligation requires solidarity. However, obligations arising from tort liability; in a "solidary" or "joint and several" obligation, the relationship
are, by their nature, always solidary. We have assiduously maintained this between the active and the passive subjects is so close that each of them
legal principle as early as 1912 in Worcester v. Ocampo,30 in which we held: must comply with or demand the fulfillment of the whole obligation.31 The
fact that the liability sought against the CCC is for specific performance and
"x x x The difficulty in the contention of the appellants is that they fail tort, while that sought against the individual respondents is based solely on
to recognize that the basis of the present action is tort. They fail to tort does not negate the solidary nature of their liability for tortuous acts
recognize the universal doctrine that each joint tort feasor is not only alleged in the counterclaims. Article 1211 of the Civil Code is explicit on this
individually liable for the tort in which he participates, but is also point:
jointly liable with his tort feasors. x x x
"Solidarity may exist although the creditors and the debtors may not
"It may be stated as a general rule that joint tort feasors are all the be bound in the same manner and by the same periods and
persons who command, instigate, promote, encourage, advise, conditions."
countenance, cooperate in, aid or abet the commission of a tort, or
who approve of it after it is done, if done for their benefit. They are The solidary character of respondents' alleged liability is precisely why
each liable as principals, to the same extent and in the same manner credence cannot be given to petitioners' assertion. According to such
as if they had performed the wrongful act themselves. x x x assertion, Respondent CCC cannot move to dismiss the counterclaims on
grounds that pertain solely to its individual co-debtors.32 In cases filed by the 2. The counterclaims may properly implead Respondents Gregory T.
creditor, a solidary debtor may invoke defenses arising from the nature of the Lim and Anthony A. Mariano, even if both were not parties in the
obligation, from circumstances personal to it, or even from those personal to original Complaint.
its co-debtors. Article 1222 of the Civil Code provides:
3. Respondent CCC or any of the three solidary debtors (CCC, Lim
"A solidary debtor may, in actions filed by the creditor, avail itself of or Mariano) may include, in a Motion to Dismiss, defenses available
all defenses which are derived from the nature of the obligation and to their co-defendants; nevertheless, the same Motion cannot be
of those which are personal to him, or pertain to his own share. With deemed to have been filed on behalf of the said co-defendants.
respect to those which personally belong to the others, he may avail
himself thereof only as regards that part of the debt for which the 4. Summons must be served on Respondents Lim and Mariano
latter are responsible." (Emphasis supplied). before the trial court can obtain jurisdiction over them.
The act of Respondent CCC as a solidary debtor -- that of filing a motion to WHEREFORE, the Petition is GRANTED and the assailed Orders
dismiss the counterclaim on grounds that pertain only to its individual co- REVERSED. The court of origin is hereby ORDERED to take cognizance of
debtors -- is therefore allowed. the counterclaims pleaded in petitioners' Answer with Compulsory
Counterclaims and to cause the service of summons on Respondents
However, a perusal of its Motion to Dismiss the counterclaims shows that Gregory T. Lim and Anthony A. Mariano. No costs.
Respondent CCC filed it on behalf of Co-respondents Lim and Mariano; it did
not pray that the counterclaim against it be dismissed. Be that as it may, SO ORDERED.
Respondent CCC cannot be declared in default. Jurisprudence teaches that
if the issues raised in the compulsory counterclaim are so intertwined with Sandoval-Gutierrez, Carpio-Morales, and Garcia, JJ., concur.
the allegations in the complaint, such issues are deemed automatically Corona, J., on leave.
joined.33 Counterclaims that are only for damages and attorney's fees and
that arise from the filing of the complaint shall be considered as special
defenses and need not be answered.34
CCC's Motion to Dismiss the Counterclaim on Behalf of Respondents Lim

and Mariano Not Allowed
While Respondent CCC can move to dismiss the counterclaims against it by

raising grounds that pertain to individual defendants Lim and Mariano, it
cannot file the same Motion on their behalf for the simple reason that it lacks
the requisite authority to do so. A corporation has a legal personality entirely
separate and distinct from that of its officers and cannot act for and on their
behalf, without being so authorized. Thus, unless expressly adopted by Lim
and Mariano, the Motion to Dismiss the compulsory counterclaim filed by
Respondent CCC has no force and effect as to them.
In summary, we make the following pronouncements:
1. The counterclaims against Respondents CCC, Gregory T. Lim and

Anthony A. Mariano are compulsory.
G.R. No. 129718 August 17, 1998 counterclaim, an initiatory pleading not arising out of, nor necessarily
connected with, the subject matter of the plaintiffs claim but not to a
SANTO TOMAS UNIVERSITY HOSPITAL, petitioner, compulsory counterclaim spawned by the filing of a complaint and so
vs. intertwined therewith and logically related thereto that it verily could not stand
CESAR ANTONIO Y. SURLA and EVANGELINE SURLA, respondents. for independent adjudication. Petitioner concluded that, since its
counterclaim was compulsory in nature, the subject circular did not perforce
apply to it. 1
VITUG, J.: In its Order of 22 March 1996, the trial court dismissed petitioner's
counterclaim; it held:
Can a compulsory counterclaim pleaded in an Answer be dismissed on the
Administrative Circular No. 04-94 provides; among others:
ground of a failure to accompany it with a certificate of non-forum shopping?
This question is the core issue presented for resolution in the instant petition.
The complaint and other initiatory pleadings
referred to and subject of this Circular are
First, a factual background.
the original civil complaint, counterclaim,
crossclaim, third (fourth, etc.) party
On 26 December 1995, respondent spouses filed a complaint for damages complaint, or complaint-in-intervention,
against petitioner Santo Tomas University Hospital with the Regional Trial petition or application wherein a party
Court of Quezon City predicated on an allegation by the spouses that their asserts his claim on (sic) relief.
son, Emmanuel Cesar Surla, while confined at the said hospital for having
been born prematurely, had accidentally fallen from his incubator on 16 April
It will be noted that the counterclaim does not distinguish
1995 possibly causing serious harm on the child. The case was raffled and
assigned to Branch 226 of the Regional Trial Court of Quezon City, presided whether the same should be permissive or compulsory,
over by the Hon. Leah S. Domingo-Regala, and there docketed Civil Case hence this Court finds that the counterclaim referred to in
said Circular covers both kinds.
No. Q-95-25977.
WHEREFORE, the counterclaim of defendant is hereby

On 28 February 1996, petitioner hospital filed its Answer with "Compulsory
Counterclaim" asserting that respondents still owed to it the amount of DISMISSED. Let the pre-trial of this case be set on May 14,
1996 at 2:00 o'clock in the afternoon . . . . 2
P82,632.10 representing hospital bills for Emmanuel's confinement at the
hospital and making a claim for moral and exemplary damages, plus
attorney's fees, by reason of the supposed unfounded and malicious suit filed On 16 April 1996, petitioner filed before the same court an Omnibus Motion
against it. seeking a clarification of the court's Order of 14 March 1996 denying
respondents' Reply to Counterclaim and a reconsideration of the 22nd March
1996 Order dismissing the compulsory counterclaim. 3 On 22 April 1996,
On 21 March 1996, petitioner received a copy of respondents' Reply to
Counterclaim, dated 12 March 1996, that sought, inter alia, the dismissal of petitioner received a copy of the court's Order, dated 16 April 1996, which
pertinently read:
petitioner's counterclaim for its non-compliance with Supreme Court
Administrative Circular No. 04-94 requiring that a complaint and other
initiatory pleadings, such as a counterclaim, cross-claim, third (fourth, etc.) WHEREFORE, the Order dated March 14, 1996 is hereby
party complaint, be accompanied with a certificate of non-forum shopping. clarified as follows:
In its Rejoinder to respondents' Reply to Counterclaim, petitioner contended xxx xxx xxx
that the subject circular should be held to refer only to a permissive
The Reply to counterclaim filed by counsel The Court of Appeals (has) committed serious, evident and
for plaintiffs is hereby NOTED. palpable error in ruling that:
SO ORDERED. 5.1 THE SPECIAL CIVIL ACTION OF CERTIORARI UNDER

RULE 65 OF THE REVISED RULES OF COURT IS
The Motion for Reconsideration of this Court's Order dated UNAVAILING. THE DISMISSAL OF THE COMPULSORY
March 22, 1996 is hereby DENIED. The pre-trial conference COUNTERCLAIM BEING A FINAL ORDER, THE
set on May 14, 1998 will go on as scheduled. 4 PETITIONER SHOULD HAVE TAKEN AN APPEAL
THEREFROM; AND
Petitioner forthwith elevated the matter to the Court of Appeals by
way of a special civil action for certiorari under Rule 65, Revised 5.2 ADMINISTRATIVE CIRCULAR NO. 04-94 OF THIS
Rules of Court, asseverating grave abuse of discretion by public HONORABLE COURT LIKEWISE APPLIES TO BOTH
respondent in dismissing the compulsory counterclaim and in KINDS OF COUNTERCLAIMS, PERMISSIVE AND
espousing the view that Administrative Circular No. 04-94 should COMPULSORY. 6
apply even to compulsory counterclaims.
The petition is partly meritorious.
The Court of Appeals, in its Decision promulgated on 12 March 1997,
dismissed the petition for certiorari; it opined: The appellate court ruled that the dismissal of the counterclaim, being a final
order, petitioner's remedy was to appeal therefrom and, such appeal being
. . . the Supreme Court circular aforequoted requires without then available, the special civil action of certiorari had been improperly filed.
equivocation that to the original civil complaint, counterclaim,
crossclaim, third (fourth, etc.) party complaint, or complaint- The concept of a final judgment or order, distinguished from an interlocutory
in-intervention, petition, or application wherein a party issuance, is that the former decisively puts to a close, or disposes of, a case
asserts his claim for relief to be filed in all courts and or a disputed issue leaving nothing else to be done by the court in respect
agencies other than the Supreme Court and the Court of thereto. Once that judgment or order is rendered, the adjudicative task of the
Appeals must be annexed and simultaneously filed therewith court is likewise ended on the particular matter involved. 7 An order is
the required certification under oath to avoid forum shopping interlocutory, upon the other hand, if its effects would only be provisional in
or multiple filing of petitions and complaints. Non-compliance character and would still leave substantial proceedings to be further had by
therewith is a cause for the dismissal of the complaint, the issuing court in order to put the controversy to rest. 8
petition, application or other initiatory pleading. Included in
such initiatory pleading is the defendant's counterclaim, The order of the trial court dismissing petitioner's counterclaim was a final
permissive or compulsory. order since the dismissal, although based on a technicality, would require
nothing else to be done by the court with respect to that specific subject
A counterclaim partakes of the nature of a complaint and/or except only to await the possible filing during the reglementary period of a
a cause of action against the plaintiff in a case . . ., only this motion for reconsideration or the taking of an appeal therefrom.
time it is the original defendant who becomes the plaintiff. It
stands on the same footing and is tested by the same rules As a rule, errors of judgment, as well as of procedure, neither relating to the
as if it were an independent action. 5 jurisdiction of the court nor involving grave abuse of discretion, are not
reviewable by the extraordinary remedy of certiorari. 9 As long as a court
In its present recourse, petitioner contends that — acts within its jurisdiction and does not gravely abuse its discretion in the
exercise thereof, any supposed error committed by it will amount to nothing
more than an error of judgment reviewable by a timely appeal and not
assailable by a special civil action of certiorari. 10 This rule, however, is not a
rigid and inflexible technicality. This Court has not too infrequently given due pleading and sworn certification contemplated here have
course to a petition for certiorari, even when the proper remedy would have been filed.
been an appeal, where valid and compelling considerations could warrant
such a recourse. 11 Certiorari has been deemed to be justified, for instance, The complaint and other initiatory pleadings referred to and
in order to prevent irreparable damage and injury to a party where the trial subject of this Circular are the original civil complaint,
judge has capriciously and whimsically exercised his judgment, or where counterclaim, cross-claim third (fourth, etc.) — party
there may be danger of clear failure of justice, or where an ordinary appeal complaint or complaint-in-intervention, petition, or application
would simply be inadequate to relieve a party from the injurious effects of the wherein a party asserts his claim for relief. (Emphasis
judgment complained of. 12 supplied)
In the case at bar, an appeal from the dismissal of the counterclaim, although It bears stressing, once again, that the real office of Administrative Circular
not totally unavailable, could have well been ineffective, if not futile, as far as No. 04-94, made effective on 01 April 1994, is to curb the malpractice
petitioner is concerned since no single piece of evidence has yet been commonly referred to also as forum-shopping. It is an act of a party against
presented by it, that opportunity having been foreclosed by the trial court, on whom an adverse judgment has been rendered in one forum of seeking and
the dismissed counterclaim which could form part of the records to be possibly getting a favorable opinion in another forum, other than by appeal or
reviewed by the appellate court. The object of procedural law is not to cause the special civil action of certiorari, or the institution of two or more actions or
an undue protraction of the litigation, but to facilitate the adjudication of proceedings grounded on the same cause on the supposition that one or the
conflicting claims and to serve, rather than to defeat, the ends of justice. 13 other court would make a favorable disposition. 14 The language of the
circular distinctly suggests that it is primarily intended to cover an initiatory
The opinion of this Court on the next issue persuades it to accept, tested by pleading or an incipient application of a party asserting a claim for relief. 15
the foregoing disquisition, the instant petition for its consideration.
It should not be too difficult, the foregoing rationale of the circular aptly taken,
The pertinent provisions of Administrative Circular No. 04-94 provide: to sustain the view that the circular in question has not, in fact, been
contemplated to include a kind of claim which, by its very nature as being
1. The plaintiff, petitioner, applicant or principal party seeking auxiliary to the proceedings in the suit and as deriving its substantive and
relief in the complaint, petition, application or other initiatory jurisdictional support therefrom, can only be appropriately pleaded in the
pleading shall certify under oath in such original pleading, or answer and not remain outstanding for independent resolution except by the
in a sworn certification annexed thereto and simultaneously court where the main case pends. Prescinding from the foregoing, the
filed therewith, to the truth of the following facts and proviso in the second paragraph of Section 5, Rule 8, of the 1997 Rules of
undertakings: (a) he has not theretofore commenced any Civil Procedure, i.e., that the violation of the anti-forum shopping rule "shall
other action or proceeding involving the same issues in the not be curable by mere amendment . . . but shall be cause for the dismissal
Supreme Court, the Court of Appeals, or any other tribunal of the case without prejudice," being predicated on the applicability of the
or agency; (b) to the best of his knowledge, no such action or need for a certification against forum shopping, obviously does not include a
proceeding is pending in the Supreme Court, the Court of claim which cannot be independently set up.
Appeals, or any other tribunal or agency; (c) if there is any
such action or proceeding which is either pending or may Petitioner, nevertheless, is entitled to a mere partial relief. The so-called
have been terminated, he must state the status thereof; and "counterclaim" of petitioner really consists of two segregative parts: (1) for
(d) if he should thereafter learn that a similar action or unpaid hospital bills of respondents' son, Emmanuel Surla, in the total
proceeding has been filed or is pending before the Supreme amount of P82,032.10; and (2) for damages, moral and exemplary, plus
Court, the Court of Appeals or any other tribunal or agency, attorney's fees by reason of the alleged malicious and unfounded suit filed
he undertakes to report that fact within five (5) days against it. 16 It is the second, not the first, claim that the Court here refers to
therefrom to the court or agency wherein the original as not being initiatory in character and thereby not covered by the provisions
of Administrative Circular No. 04-94.
WHEREFORE, the appealed decision is hereby modified in that the claim for
moral, exemplary damages and attorney's fees in Civil Case No. Q-95-25977
of petitioner is ordered reinstated. The temporary restraining order priorly
issued by this Court is lifted. No costs.
SO ORDERED.
Davide, Jr., Bellosillo, Panganiban and Quisumbing, JJ., concur.

THIRD DIVISION
[G.R. No. 146125. September 17, 2003.] The facts are stated in the opinion of the Court.
Sanidad, Abaya Te, Viterbo, Enriquez & Tan for petitioner.

NOVELTY PHILIPPINES, INC., Petitioner, v. COURT OF APPEALS;
PANEL OF VOLUNTARY ARBITRATORS, Represented by Its Chairman, Victoria, Rabuco & Partners for private respondent.
RAMON T. JIMENEZ; and REFORM THE UNION MOVEMENT IN
NOVELTY (RUMN), Respondents.
DECISION PANGANIBAN, J.:
Labor Law; Labor Code; Procedural niceties should be avoided in labor cases As much as practicable, litigations should be decided on their merits and not
in which the provisions of the Rules of Court are applied in a suppletory on procedural technicalities. This statement holds true especially in labor
manner.—The policy of our judicial system is to encourage full adjudication of cases like the present one, in which the defect has been cured by the motion
the merits of an appeal. In the exercise of its equity jurisdiction, this Court may for reconsideration.
reverse the dismissal of appeals that are grounded merely on technicalities.
Moreover, procedural niceties should be avoided in labor cases in which the The Case
provisions of the Rules of Court are applied only in a suppletory manner.
Indeed, rules of procedure may be relaxed to relieve a part of an injustice not
Before us is a Petition for Review 1 under Rule 45 of the Rules of Court,
commensurate with the degree of noncompliance with the process required.
assailing the July 12, 2000 2 and the November 21, 2000 3 Resolutions of
the Court of Appeals (CA) in CA-GR SP No. 59544. The first Resolution
dismissed petitioner’s original action for certiorari as follows
Same; Same; Subsequent submission of requisite documents constituted "This instant petition is hereby:
substantial compliance with procedural rules.—In Jaro v. Court of Appeals, this
Court held that the subsequent submission of requisite documents constituted DISMISSED outright:
substantial compliance with procedural rules.
a.) For failure to comply with Sec. 1, Rule 65 in relation to Sec. 3, Rule 46 of
the 1997 Rules of Civil Procedure.
Remedial Law; Forum Shopping; Court recognized the authority not only of a Mr. Steven Young, 4 allegedly the personnel officer of petitioner, who signed
general manager but even of an acting manager to sign a verification and the petition did not attach the alleged authority from petitioner to institute the
certificate against non-forum shopping.—We find equally untenable private same.
respondent’s argument that the Special Power of Attorney authorizing Ventura
to file the Petition was still defective, since it had been signed by the general b.) For failure to comply with Sec. 13, Rule 13 of the same Rules, there being
manager and not by the president of petitioner company. This Court, in no attachment of the required affidavit proof of service." 5
Mactan-Cebu International Airport Authority v. Court of Appeals, recognized
the authority not only of a general manager but even of an acting general Petitioner’s Motion for Reconsideration was denied in the second assailed
manager to sign a verification and certificate against non-forum shopping. Resolution, pertinent portions of which are reproduced hereunder:
"In the case at bench, petitioner failed to attach the required authority to file
the instant petition. It was only submitted when the instant motion was filed
PETITION for review on certiorari of the resolutions of the Court of Appeals. and the Special Power of Attorney was executed only on July 26, 2000 while
the instant petition was filed on July 6, 2000. Sadly, at the time the case was
filed, no authority was given to Mr. Ventura when the petition was filed. After the submission of the necessary pleadings by the parties, the Panel of
Hence, we had to dismiss the instant petition. Voluntary Arbitrators rendered a Decision 8 dated April 26, 2000, the
dispositive portion of which reads:
"Anent the issue of failure to attach the required affidavit of proof of service, a
close scrutiny of the records reveal that the affidavit of service was attached "WHEREFORE, the Panel hereby declares that there has been sufficient
after the annexes . . . . Nevertheless, despite such compliance, the instant compliance [with] the provisions of the Labor Code, the CBA provisions
motion must still be denied for reasons above-stated. between the parties and the check-off authorization form executed by the
Union members or, more specifically, special assessments effected by
"WHEREFORE, in view of the foregoing, the instant motion for authority of the Union’s resolution duly adopted and approved by the majority
reconsideration is hereby DENIED for lack of merit. Our resolution dated July of the Union in a general membership meeting. The Panel therefore confirms
18, 2000 is REITERATED." 6 the right of the Union to demand from Management the check-off of one
day’s pay against erring members who had violated the Union directive for
The Facts members to attend and participate in the protest rally during the [State of the
Nation Address] SONA of July 1997." 9
The dispute between Novelty Philippines, Inc. (Novelty) and Reform the Petitioner filed with the Panel of Voluntary Arbitrators a Motion for
Union Movement in Novelty (RUMN) arose when the latter started assessing Reconsideration, which was denied in a Resolution 10 dated June 19, 2000.
penalties against its erring members. On June 26, 1997, RUMN’s executive Thereafter, the former elevated the matter to the CA by way of a Petition for
board adopted a Resolution 7 sanctioning union officers and members who Certiorari under Rule 65.
had failed to join big rallies, with a penalty equivalent to their salary for one
day. Ruling of the Court of Appeals
On November 19, 1997, petitioner issued a Memorandum announcing that,

for the payroll period November 16 to 22, 1997, it would deduct from the The CA denied due course to the Petition for failure of the personnel officer
salaries of union members who had failed to attend the mobilization on July of petitioner to attach (1) his authority to institute the action and (2) the
28, 1997, amounts equivalent to their one-day salary. According to it, the required proof of service. The Motion for Reconsideration was likewise
checkoff was being done pursuant to the Resolution of the RUMN executive denied by the appellate court, because the required authority to file it had
board and existing individual checkoff authorizations. been executed only after 20 days from its filing.
When some members of the union allegedly complained of the salary Hence, this recourse. 11
deduction, petitioner temporarily held in abeyance the implementation of the
checkoff on the special assessment made by RUMN. Petitioner also Issues
requested from the Office of the Secretary of the Department of Labor and
Employment (DOLE) its opinion on the matter.
Petitioner submits the following issues for our consideration:
This move notwithstanding, RUMN continued to insist on the implementation
of the checkoff on the special assessments. Nevertheless, citing an Opinion "I. The Honorable Respondent Court of Appeals committed grave abuse of
rendered by the legal office of the DOLE, petitioner rejected RUMN’s discretion when it dismissed the Petition for Certiorari despite petitioner’s
persistent demand for a checkoff. Consequently, RUMN raised the matter for substantial compliance with the requirements of the rules.
grievance. Since no settlement was reached during the grievance procedure,
the case was elevated to the National Conciliation and Mediation Board, II. The Panel of Voluntary Arbitrators committed grave abuse of discretion
which referred the controversy to voluntary arbitration.chanrob1es virtua1 when it rendered the assailed majority Decision and assailed Resolution
1aw 1ibrary without factual or legal basis and patently contrary to law." 12
The Court’s Ruling after petitioner had submitted a Special Power of Attorney granting such
authority to Ventura. The CA reasoned that this authorization should have
been submitted together with the initiatory pleading, not as an annex or
The Petition is meritorious. attachment to the Motion for Reconsideration.
Main Issue: The policy of our judicial system is to encourage full adjudication of the
merits of an appeal. In the exercise of its equity jurisdiction, this Court may
Substantial Compliance with the Procedural Requirements reverse the dismissal of appeals that are grounded merely on technicalities.
14 Moreover, procedural niceties should be avoided in labor cases in which
Petitioner avers that it has substantially complied with the requirements of the provisions of the Rules of Court are applied only in a suppletory manner.
Section 1 of Rule 65 in relation to Section 3 of Rule 46 of the 1997 Rules of 15 Indeed, rules of procedure may be relaxed to relieve a part of an injustice
Civil Procedure. It has allegedly done so particularly with regard to the not commensurate with the degree of noncompliance with the process
authority of Ventura, 13 its personnel officer, to file the Petition for Certiorari required. 16
before the CA. According to petitioner, when Ventura represented the
company at the voluntary arbitration level, his authority to act for and on its The foregoing judicial policy acquires greater significance where there has
behalf was never questioned. been subsequent compliance with the requirements of the rules, as in this
case in which petitioner has submitted the Special Power of Attorney
It further claims that the pertinent provisions of the aforementioned rules do together with its Motion for Reconsideration.
not specify any requirement pertaining to the authority of the representative
of the company to file the Petition. Moreover, it contends that its subsequent In Jaro v. Court of Appeals, 17 this Court held that the subsequent
submission of a Special Power of Attorney constituted substantial submission of requisite documents constituted substantial compliance with
compliance with the subject rules and, in effect, ratified Ventura’s authority to procedural rules. It explained:
file the Petition for and on behalf of the company.
"There is ample jurisprudence holding that the subsequent and substantial
On the other hand, private respondent counters that Ventura had no authority compliance of an appellant may call for the relaxation of the rules of
to file the Petition before the CA or to sign the Verification and Certificate of procedure. In Cusi-Hernandez v. Diaz and Piglas-Kamao v. National Labor
Non-Forum Shopping. It argues that such authority should have been Relations Commission, we ruled that the subsequent submission of the
conferred to him through an appropriate board resolution of Novelty or a missing documents with the motion for reconsideration amounts to
special power of attorney, since he was neither the president nor a corporate substantial compliance. The reasons behind the failure of the petitioners in
officer of the company. Moreover, private respondent insists that the these two cases to comply with the required attachments were no longer
authority to verify and certify is an essential requirement in the filing of a scrutinized. What we found noteworthy in each case was the fact that the
petition for certiorari, especially when petitioner is a corporation that can act petitioners therein substantially complied with the formal requirements. We
only through its president or any other officer authorized by a board ordered the remand of the petitions in these cases to the Court of Appeals,
resolution. stressing the ruling that by precipitately dismissing the petitions ‘the appellate
court clearly put a premium on technicalities at the expense of a just
Finally, respondent claims that petitioner’s subsequent submission of a resolution of the case.’" 18
Special Power of Attorney was still defective, because the document had
been executed by the general manager and not by the president of We find equally untenable private respondent’s argument that the Special
Novelty.chanrob1es virtua1 1aw 1ibrary Power of Attorney authorizing Ventura to file the Petition was still defective,
since it had been signed by the general manager and not by the president of
Based on the second assailed Resolution, the alleged lack of authority of petitioner company. This Court, in Mactan-Cebu International Airport
petitioner’s personnel officer to sign the Verification and Certificate of Non- Authority v. Court of Appeals, 19 recognized the authority not only of a
Forum Shopping became the CA’s sole basis for dismissing the certiorari general manager but even of an acting general manager to sign a verification
action. The appellate court refused to give due course to the Petition, even and certificate against non-forum shopping.
signed the verification. Thus, the disputed verification is in compliance with

"We are not persuaded by CHIONGBIAN’s claim that the Verification and the Rules." 22
Certification against forum shopping accompanying MCIAA’s petition was
insufficient for allegedly having been signed by one who was not qualified to Likewise, in Shipside v. Court of Appeals, 23 we elucidated on the necessity
do so. As pointed out by the MCIAA, Colonel Cordova signed the Verification of a certificate of non-forum shopping. We then ruled that the subsequent
and Certification against forum shopping as Acting General Manager of the submission of a proof of authority to act on behalf of petitioner corporation
MCIAA, pursuant to Office Order No. 5322-99 dated September 10, 1999 justified the relaxation of the Rules of the purpose of allowing its Petition to
issued by the General Manager of MCIAA, Alfonso Allere. . . . ." 20 be given due course.
The authority of the general manager to sue on behalf of the corporation and "On the other hand, the lack of certification against forum shopping is
to sign the requisite verification and certification of non-forum shopping may generally not curable by the submission thereof after the filing of the petition.
be delegated to any other officer of the company through a board resolution Section 5, Rule 45 of the 1997 Rules of Civil Procedure provides that the
or a special power of attorney. In this case, it was Ventura, the personnel failure of the petitioner to submit the required documents that should
officer of petitioner company, who was authorized to file the Petition through accompany the petition, including the certification against forum shopping,
a Special Power of Attorney. This was a logical and practical decision of shall be sufficient ground for the dismissal thereof. The same rule applies to
management, considering that the person who was in the best position to certifications against forum shopping signed by a person on behalf of a
ascertain the truthfulness and the correctness of the allegations in the corporation which are unaccompanied by proof that said signatory is
Petition was its personnel officer, who knew the status of any personnel and authorized to file a petition on behalf of the corporation.
any labor-related suit of the company.
x x x
In Pfizer v. Galan, 21 this Court, speaking through Chief Justice Hilario G.
Davide Jr., explained the nature and purpose of a verification. It then upheld
the validity of a verification signed by an "employment specialist" who had not "In the instant case, the merits of petitioner’s case should be considered
even presented any proof of her authority to represent the petitioner special circumstances or compelling reasons that justify tempering the
company. requirement in regard to the certificate of non-forum shopping. Moreover, in
Loyola, Roadway, and Uy, the Court excused non-compliance with the
"Verification is intended to assure that the allegations in the pleading have requirement as to the certificate of non-forum shopping. With more reason
been prepared in good faith or are true and correct, not mere speculations. should we allow the instant petition since petitioner herein did submit a
Generally, lack of verification is merely a formal defect that is neither certification on non-forum shopping, failing only to show proof that the
jurisdictional nor fatal. The court may order the correction of the pleading or signatory was authorized to do so. That petitioner subsequently submitted a
act on the unverified pleading if the attending circumstances are such that secretary’s certificate attesting that Balbin was authorized to file an action on
strict compliance with the rule may be dispensed with in order to serve the behalf of petitioner likewise mitigates this oversight.
ends of justice.
"It must also be kept in mind that while the requirement of the certificate of
"We firmly believe that the purpose of verification was served in the instant non-forum shopping is mandatory, nonetheless the requirements must not be
case wherein the verification of the petition filed with the Court of Appeals interpreted too literally and thus defeat the objective of preventing the
was done by Ms. Cleofe R. Legaspi. It remains undisputed that Ms. Legaspi undesirable practice of forum-shopping. Lastly, technical rules of procedure
was an Employment Specialist of petitioner Pfizer, Inc., who ‘coordinated and should be used to promote, not frustrate justice. While the swift unclogging of
actually took part in the investigation’ of the administrative charges against court dockets is a laudable objective, the granting of substantial justice is an
respondent Galan. As such, she was in a position to verify the truthfulness even more urgent ideal." 24
and correctness of the allegations in the petition. Besides, as pointed out by
petitioners, Pfizer, being a corporate entity, can only act through an officer. Indeed, while the right to appeal is a statutory and not a natural right, it is
Ms. Legaspi, who was an officer having personal knowledge of the case, nonetheless an essential part of our judicial system. Courts are therefore
was, therefore, merely acting for and in behalf of petitioner Pfizer when she advised to proceed with caution, so as not to deprive a party of the right to
appeal. Litigants should have the amplest opportunity for a proper and just
disposition of their cause — free, as much as possible, from the constraints
of procedural technicalities.25cralaw:red
WHEREFORE, the Petition is hereby GRANTED and the assailed

Resolutions SET ASIDE. The case is REMANDED to the Court of Appeals
for further proceedings on the merits. No pronouncement as to costs.
SO ORDERED.
Puno, Sandoval-Gutierrez, Corona and Carpio-Morales, JJ., concur.

G.R. No. 147394 August 11, 2004 opinion (other than by appeal or certiorari) in another. The rationale against
forum shopping is that a party should not be allowed to pursue simultaneous
SPOUSES MANUEL and ROSEMARIE WEE, petitioners, remedies in two different fora. Filing multiple petitions or complaints constitutes
vs. abuse of court processes, which tends to degrade the administration of justice,
ROSARIO D. GALVEZ, respondent. wreaks havoc upon orderly judicial procedure, and adds to the congestion of
the heavily burdened dockets of the courts. Thus, the rule proscribing forum
Actions; Civil Procedure; Forum Shopping; Pleadings and Practice; Pursuant shopping seeks to promote candor and transparency among lawyers and their
to Administrative Circular No. 04-94, which extended the requirement of a clients in the pursuit of their cases before the courts to promote the orderly
certification on non-forum shopping to all initiatory pleadings filed in all courts administration of justice, prevent undue inconvenience upon the other party,
and quasi-judicial agencies, as well as Rule 7, Section 5 of the 1997 Rules of and save the precious time of the courts. It also aims to prevent the
Civil Procedure, “all papers, documents, and pleadings” an attorney-in-fact embarrassing situation of two or more courts or agencies rendering conflicting
was authorized and empowered to sign, must necessarily include the resolutions or decisions upon the same issue. It is in this light that we must
certification on non-forum shopping; To conclude otherwise would render look at the propriety and correctness of the Certificate of Non-Forum Shopping
nugatory the special power of attorney and also render the constitution of an signed by Grace Galvez on the respondent’s behalf. We have examined said
attorney-in-fact inutile.—It is indisputable that Grace Galvez, as attorney-in- Certificateand find that under the circumstances, it does not negate but instead
fact of the respondent, was duly authorized and empowered not just to initiate serves the purpose of the rule against forum shopping, namely to promote and
complaints, whether criminal or civil, to enforce and protect the respondent’s facilitate the orderly administration of justice.
rights, claims, and interests in this jurisdiction, but is specifically authorized to
sign all “papers, documents, and pleadings” necessarily connected with the
filing of a complaint. Pursuant to Administrative Circular No. 04-94, which Same; Same; Same; Same; The certification of non-forum shopping should be
extended the requirement of a certification on non-forum shopping to all signed by the petitioner or principal party himself who has actual knowledge of
initiatory pleadings filed in all courts and quasi-judicial agencies, as well as whether or not he has initiated similar actions or proceedings in different courts
Rule 7, Section 5 of the 1997 Rules of Civil Procedure, the aforementioned or agencies.—Rule 7, Section 5 of the Rules of Court, requires that the
papers and documents, which Grace Galvez was authorized and empowered certification should be signed by the “petitioner or principal party” himself. The
to sign, must necessarily include the certification on non-forum shopping. To rationale behind this is “because only the petitioner himself has actual
conclude otherwise would render nugatory the Special Power of Attorney and knowledge of whether or not he has initiated similar actions or proceedings in
also render respondent’s constitution of an attorney-in-fact inutile. different courts or agencies.” However, the rationale does not apply where, as
in this case, it is the attorney-in-fact who instituted the action. The Special
Power of Attorney in this instance was constituted precisely to authorize Grace
Same; Same; Same; Same; The rationale against forum shopping is that a Galvez to file and prosecute suits on behalf of respondent, who was no longer
party should not be allowed to pursue simultaneous remedies in two different resident of the Philippines but of New York, U.S.A. As respondent points out,
fora; Filing multiple petitions or complaints constitutes abuse of court it is Grace Galvez, as attorney-in-fact for her, who has actual and personal
processes, which tends to degrade the administration of justice, wreaks havoc knowledge whether she initiated similar actions or proceedings before various
upon orderly judicial procedure, and adds to the congestion of the heavily courts on the same issue on respondent’s behalf. Said circumstance
burdened dockets of the courts.—Forum shopping “occurs when a party constitutes reasonable cause to allow the attorney-in-fact, and not the
attempts to have his action tried in a particular court or jurisdiction where he respondent, as plaintiff in Civil Case No. Q-99-37372 to personally sign the
feels he will receive the most favorable judgment or verdict.” In our jurisdiction, Certificate of Non-Forum Shopping. Under the circumstances of this case, we
it has taken the form of filing multiple petitions or complaints involving the same hold that there has been proper compliance with the rule proscribing forum
issues before two or more tribunals or agencies in the hope that one or the shopping.
other court would make a favorable disposition. There is also forum shopping
when, because of an adverse decision in one forum, a party seeks a favorable
Same; Same; Same; Same; The rule requiring a certification of non-forum “compromise” could be supplied by the rest of the paragraph. A paragraph is
shopping to accompany every initiatory pleading should not be interpreted with “a distinct section or subdivision of a written or printed composition that
such absolute literalness as to subvert its own ultimate and legitimate objective consists of from one to many sentences, forms a rhetorical unit (as by dealing
or the goal of all rules of procedure—which is to achieve substantial justice as with a particular point of the subject or by comprising the words of a distinct
expeditiously as possible.—Administrative Circular No. 04-94 is now speaker).” As a “short composition consisting of a group of sentences dealing
incorporated in the 1997 Rules of Civil Procedure, as Rule 7, Section 5. It is with a single topic,” a paragraph must necessarily be construed in its entirety
basic that the Rules “shall be liberally construed in order to promote their in order to properly derive the message sought to be conveyed. In the instant
objective of securing a just, speedy and inexpensive disposition of every action case, paragraph 9-A of the Amended Complaint deals with the topic of efforts
and proceeding.” Otherwise put, the rule requiring a certification of forum made by the respondent to reach a compromise between the parties. Hence,
shopping to accompany every initiatory pleading, “should not be interpreted it is in this light that the defective lead sentence must be understood or
with such absolute literalness as to subvert its own ultimate and legitimate construed. Contrary to what petitioners claim, there is no need for guesswork
objective or the goal of all rules of procedure—which is to achieve substantial or complicated deductions in order to derive the point sought to be made by
justice as expeditiously as possible.” respondent in paragraph 9-A of the Amended Complaint, that earnest efforts
to compromise the differences between the disputants were made but to no
avail. The petitioners’ stance that the defective sentence in paragraph 9-A of
Family Code; Compromise Agreements; The attempt to compromise as well the Amended Complaint fails to state a cause of action, thus, has no leg to
as its failure or inability to succeed is a condition precedent to the filing of a stand on. Having examined the Amended Complaint in its entirety as well as
suit between members of the same family.—Under Article 151 of the Family the documents attached thereto, following the rule that documents attached to
Code, a suit between members of the same family shall not be entertained, a pleading are considered both as evidence and as part of the pleading, we
unless it is alleged in the complaint or petition that the disputants have made find that the respondent has properly set out her cause of action in Civil Case
earnest efforts to resolve their differences through compromise, but these No. Q-99-37372.
efforts have not succeeded. The attempt to compromise as well as its failure PETITION for review on certiorari of the decision and resolution of the Court
or inability to succeed is a condition precedent to the filing of a suit between of Appeals.
members of the same family. Rule 8, Section 3 of the 1997 Rules of Civil
Procedure provides that conditions precedent may be generally averred in the
pleadings. Applying the foregoing to the instant case, we have to ask: Is there
a sufficient general averment of the condition precedent required by the Family The facts are stated in the opinion of the Court.
Code in the Amended Complaint in Civil Case No. Q-99-37372? Gil Venerando R. Racho for petitioners.
Gatmaytan Law Office for private respondent.

Same; Same; The sentence “earnest efforts towards have been made but the
same have failed” may be incomplete or even grammatically incorrect, a
lacking word like “compromise” could be supplied by the rest of the paragraph DECISION
which must necessarily be construed in its entirety in order to properly derive
the message sought to be conveyed.—Our examination of paragraph 9-A of QUISUMBING, J.:
the Amended Complaint shows that respondent has complied with this
requirement of a general averment. It is true that the lead sentence of
For review is the Decision1 dated December 4, 2000 of the Court of Appeals
paragraph 9-A, which reads “Earnest efforts towards have been made but the in CA-G.R. SP No. 55415, which denied special civil action for certiorari,
same have failed” may be incomplete or even grammatically incorrect as there prohibition, and mandamus filed by petitioners Manuel and Rosemarie Wee.
might be a missing word or phrase, but to our mind, a lacking word like In said petition, the Wees sought to (1) annul and set aside the Order dated
July 29, 1999 of the Regional Trial Court (RTC) of Quezon City, Branch 80, Check No. 97, which was issued to one Zenedes Mariano, who gave the
denying their prayer to dismiss Civil Case No. Q-99-37372, as well as the cash equivalent of US$2,000 to Rosemarie.
Order of September 20, 1999 denying their motion for reconsideration; (2)
order the trial court to desist from further proceedings in Civil Case No. Q-99- In accordance with her agreement with Rosario, Rosemarie gave Manolito
37372; and (3) order the trial court to dismiss the said action. Also assailed his monthly allowance ranging from P2,000 to P4,000 a month from 1993 to
by the Wees is the Resolution2 of the Court of Appeals, promulgated March January 1999. However, sometime in 1995, Rosario asked for the return of
7, 2001, denying their motion for reconsideration. the US$20,000 and for an accounting. Rosemarie promised to comply with
the demand but failed to do so.
The antecedent facts in this case are not complicated.
In January 1999, Rosario, through her attorney-in-fact, Grace Galvez, sent
Petitioner Rosemarie Wee and respondent Rosario D. Galvez are sisters.3 Rosemarie a written demand for her US$20,000 and an accounting. Again,
Rosemarie lives with her husband, petitioner Manuel Wee, in Balanga, Rosemarie ignored the demand, thus causing Rosario to file suit.
Bataan, while Rosario resides in New York, U.S.A. The present controversy
stemmed from an investment agreement between the two sisters, which had On May 18, 1999, the Wees moved to dismiss Civil Case No. Q-99-37372 on
gone sour along the way. the following grounds: (1) the lack of allegation in the complaint that earnest
efforts toward a compromise had been made in accordance with Article 1515
On April 20, 1999, Rosario, represented by Grace Galvez as her attorney-in- of the Family Code; (2) failure to state a valid cause of action, the action
fact, filed a complaint before the RTC of Quezon City to collect a sum of being premature in the absence of previous earnest efforts toward a
money from Manuel and Rosemarie Wee. The amount for collection was compromise; and (3) the certification against forum shopping was defective,
US$20,000 at the exchange rate of P38.30 per dollar. The complaint, which having been executed by an attorney-in-fact and not the plaintiff, as required
was docketed as Civil Case No. Q-99-37372, alleged that Rosario and by Rule 7, Section 56 of the 1997 Rules of Civil Procedure.
Rosemarie entered into an agreement whereby Rosario would send
Rosemarie US$20,000, half of said amount to be deposited in a savings Conformably with Rule 10, Sections 17 and 38 of the 1997 Rules of Civil
account while the balance could be invested in the money market. The Procedure, Rosario amended her complaint with the addition of the following
interest to be earned therefrom would be given to Rosario's son, Manolito paragraph:
Galvez, as his allowance.
9-A. Earnest efforts towards (sic) have been made but the same
Rosario claimed that pursuant to their agreement, she sent to Rosemarie on have failed. As a matter of fact, plaintiff thru her daughter as
various dates in 1993 and 1994, five (5) Chemical Bank checks, namely: Attorney-In-Fact caused the sending of a Demand Letter dated
January 4, 1999 and the last paragraph of which reads as follows:
CHECK No. DATE AMOUNT
CB No. 97 5/24/93 US$1,550.00 ...
CB No. 101 6/11/93 10,000.00
Trusting this will merit your utmost preferential attention and
CB No. 104 11/12/93 5,500.00 consideration in as much as you and our client are sisters
CB No. 105 2/1/94 2,000.00 and in order that [earnest] efforts toward a compromise could
CB No. 123 3/3/94 1,000.00 be obtained.9
TOTAL US$20,050.004
The Wees opposed Rosario's motion to have the Amended Complaint
admitted. They contended that said motion was a mere scrap of paper for
Rosario further alleged that all of the aforementioned checks were deposited being in violation of the three-day notice requirement of Rule 15, Section 410
and encashed by Rosemarie, except for the first check, Chemical Bank of the 1997 Rules of Civil Procedure and for having the notice of hearing
addressed to the Clerk of Court and not to the adverse party as required by 1. WHETHER OR NOT THE INSTANT PETITION FOR REVIEW ON
Section 511 of the same Rule. CERTIORARI UNDER RULE 45 OF THE REVISED RULES OF
COURT IS THE PROPER REMEDY FOR PETITIONERS UPON
On July 29, 1999, the trial court came out with an Order denying the Wees' THE DENIAL OF THEIR PETITION FOR CERTIORARI,
motion to dismiss for being "moot and academic," thus: PROHIBITION AND MANDAMUS BY THE COURT OF APPEALS;
WHEREFORE, premises considered, the amended complaint is 2. WHETHER OR NOT THE CERTIFICATION OF NON-FORUM
hereby admitted. Defendant-spouses are hereby directed to file their SHOPPING EXECUTED BY THE PLAINTIFF'S ATTORNEY-IN-
Answer within the reglementary period provided by the Rules of FACT IS DEFECTIVE; AND
Court.
3. WHETHER OR NOT THE AMENDED COMPLAINT BEFORE
SO ORDERED.12 THE REGIONAL TRIAL COURT SUFFICIENTLY STATES A CAUSE
OF ACTION AGAINST THE DEFENDANTS.14
The Wees duly moved for reconsideration, but the motion was denied on
September 20, 1999, for lack of merit. We shall now resolve these issues seriatim.
On October 18, 1999, the Wee couple brought the matter to the Court of On the first issue, the petitioners argue that the present appeal by certiorari
Appeals via a special civil action for certiorari, prohibition, and mandamus, filed with this Court assailing the dismissal of their special civil action for
docketed as CA-G.R. SP No. 55415. The petition assailed the trial court for certiorari, prohibition, and mandamus by the appellate court is meritorious.
having acted with grave abuse of discretion amounting to lack or excess of After all, according to petitioners, a petition for review under Rule 45, Section
jurisdiction for issuing the interlocutory orders of July 29, 1999 and 1,15 of the 1997 Rules of Civil Procedure could be brought before us,
September 20, 1999, instead of dismissing Civil Case No. Q-99-37372 regardless of whether the assailed decision of the appellate court involves an
outright. appeal on the merits from the trial court's judgment or the dismissal of a
special civil action questioning an interlocutory order of the trial court. What is
important under Rule 45, Section 1, is that the assailed decision of the
On December 4, 2000, the appellate court decided CA-G.R. SP No. 55415 in
appellate court is final and that the petition before this Court should raise only
this wise:
questions of law.
WHEREFORE, the instant petition for certiorari, prohibition and
mandamus is DENIED. Respondent, in turn, point out that the dismissal by the Court of Appeals of
herein petitioners' special civil action for certiorari, prohibition, and
mandamus in CA-G.R. SP No. 55415 is not the final judgment or order,
SO ORDERED.13 which could be the subject of an appeal by certiorari under Rule 45. This is
because, according to respondent, certiorari as a mode of appeal involves
The Court of Appeals held that the complaint in Civil Case No. Q-99-37372, the review of a judgment, final order, or award on the merits. Respondent
as amended, sufficiently stated a cause of action. It likewise held that the contends that the appellate court's ruling in CA-G.R. SP No. 55415 did not
questioned certification against forum shopping appended thereto was not so dispose of the case on the merits, as the orders of the trial court subject of
defective as to warrant the dismissal of the complaint. CA-G.R. SP No. 55415 were all interlocutory. In other words, the ruling of the
appellate court did not put an end to Civil Case No. Q-99-37372, which is still
On January 9, 2001, the petitioners herein moved for reconsideration of the pending before the trial court. Hence, a petition for review on certiorari will
appellate court's decision, but this was denied on March 7, 2001. not lie to assail the judgment of the Court of Appeals in CA-G.R. SP No.
55415, according to respondent.
Hence, the instant petition, raising the following issues:
We find no basis for respondent's contention that the decision of the Court of Procedure, it is the "plaintiff" or "principal party" who must sign the
Appeals in CA-G.R. SP No. 55415, dismissing the petitioners' special civil certification. They rely on our ruling in BA Savings Bank v. Sia,16 that where
action for certiorari, prohibition, and mandamus is interlocutory in nature. The the parties in an action are natural persons, the party himself is required to
CA's decision on said petition is final for it disposes of the original action for sign the certification, and where a representative is allowed in case of
certiorari, prohibition, and mandamus directed against the interlocutory artificial persons, he must be specifically authorized to execute and sign the
orders of the trial court in Civil Case No. Q-99-37372. In other words, having certification. The petitioners stress that Rosario D. Galvez failed to show any
dismissed the said action, there is nothing more left to be done in CA-G.R. justifiable reason why her attorney-in-fact should be the one to sign the
SP No. 55415 as far as the appellate court is concerned. certification against forum shopping, instead of herself as the party, as
required by Santos v. Court of Appeals.17
Nor can we sustain respondent's argument that the appellate court's decision
in CA-G.R. SP No. 55415 is not on the merits. In special civil actions for Respondent counters that petitioners' contention has no basis. The Special
certiorari, such as CA-G.R. SP No. 55415, the only issue before the Power of Attorney executed by her in favor of Grace Galvez, if subjected to
appellate court is whether the lower court acted without or in excess of careful scrutiny would clearly show that the authority given to the latter is not
jurisdiction, or with grave abuse of discretion amounting to lack or excess of only broad but also all encompassing, according to respondent. By virtue of
jurisdiction. Stated differently, in a certiorari petition the appellate court is not said document, Grace Galvez is given the power and authority to institute
tasked to adjudicate the merits of the respondent's claims before the trial both civil and criminal actions against any person, natural or juridical, who
court. Resolving such claims on the merits remains the proper province of may be obliged or answerable to the respondent. Corollary with this power is
the trial court in Civil Case No. Q-99-37372. The appellate court properly the authority to sign all papers, documents, and pleadings necessary for the
ruled in CA-G.R. SP No. 55415 that the trial court committed no grave abuse accomplishment of the said purpose. Respondent likewise stresses that
of discretion amounting to lack or excess of jurisdiction so as to warrant the since Grace Galvez is the one authorized to file any action in the Philippines
issuance of writs of certiorari, prohibition, and mandamus that petitioners on behalf of her principal, she is in the best position to know whether there
sought. In so limiting itself to and addressing squarely only the issue of grave are other cases involving the same parties and the same subject matter
abuse of discretion or lack or excess of jurisdiction, the Court of Appeals, in instituted with or pending before any other court or tribunal in this jurisdiction.
CA-G.R. SP No. 55415, precisely decided the matter on the merits. In other Moreover, as an attorney-in-fact, Grace Galvez is deemed to be a party,
words, it found that the special civil action of petitioners before it had no pursuant to Rule 3, Section 318 of the 1997 Rules of Civil Procedure. Hence,
merit. petitioners' argument that Grace Galvez is not specifically authorized to
execute and sign the certification of non-forum shopping deserves scant
Now, as to whether the Court of Appeals decided the matter in CA-G.R. SP consideration.
No. 55415 in a manner contrary to law or established jurisprudence remains
precisely for us to determine in this review on certiorari. Considering the We find for the respondent. Noteworthy, respondent in the instant case is
factual and procedural circumstances of this case, the present petition is already a resident of the United States, and not of the Philippines. Hence, it
petitioners' proper remedy to challenge the appellate court's judgment in CA- was proper for her to appoint her daughter, Grace Galvez, to act as her
G.R. SP No. 55415 now. attorney-in-fact in the Philippines. The Special Power of Attorney granted by
the respondent to her attorney-in-fact, Grace Galvez, categorically and
Anent the second issue, the petitioners aver that the Court of Appeals clearly authorizes the latter to do the following:
gravely erred in finding that the certification against forum shopping in Civil
Case No. Q-99-37372 was valid, notwithstanding that it was not the plaintiff 1. To ask, demand and claim any sum of money that is duly [due]
below, Rosario D. Galvez, who executed and signed the same, but her from any person natural, juridical and/or corporation in the
attorney-in-fact, Grace Galvez. Petitioners insist that there was nothing in the Philippines;
special power of attorney executed by Rosario D. Galvez in favor of Grace
Galvez, which expressly conferred upon the latter the authority to execute 2. To file criminal and/or civil complaints before the courts of justice
and sign, on behalf of the former, the certificate of non-forum shopping. in the Philippines to enforce my rights and interest[s];
Petitioners point out that under Rule 7, Section 5 of the 1997 Rules of Civil
3. To attend hearings and/or Preliminary Conference[s], to make find that under the circumstances, it does not negate but instead serves the
stipulations, adjust claims, to settle and/or enter into Compromise purpose of the rule against forum shopping, namely to promote and facilitate
Agreement[s], to litigate and to terminate such proceedings; [and] the orderly administration of justice.
4. To sign all papers, documents and pleadings necessary for the Rule 7, Section 5 of the Rules of Court, requires that the certification should
accomplishment of the above purposes.19 be signed by the "petitioner or principal party" himself. The rationale behind
this is "because only the petitioner himself has actual knowledge of whether
From the foregoing, it is indisputable that Grace Galvez, as attorney-in-fact of or not he has initiated similar actions or proceedings in different courts or
the respondent, was duly authorized and empowered not just to initiate agencies."29 However, the rationale does not apply where, as in this case, it
complaints, whether criminal or civil, to enforce and protect the respondent's is the attorney-in-fact who instituted the action. The Special Power of
rights, claims, and interests in this jurisdiction, but is specifically authorized to Attorney in this instance was constituted precisely to authorize Grace Galvez
sign all "papers, documents, and pleadings" necessarily connected with the to file and prosecute suits on behalf of respondent, who was no longer
filing of a complaint. Pursuant to Administrative Circular No. 04-94,20 which resident of the Philippines but of New York, U.S.A. As respondent points out,
extended the requirement of a certification on non-forum shopping to all it is Grace Galvez, as attorney-in-fact for her, who has actual and personal
initiatory pleadings filed in all courts and quasi-judicial agencies,21 as well as knowledge whether she initiated similar actions or proceedings before
Rule 7, Section 5 of the 1997 Rules of Civil procedure, the aforementioned various courts on the same issue on respondent's behalf. Said circumstance
papers and documents, which Grace Galvez was authorized and empowered constitutes reasonable cause to allow the attorney-in-fact, and not the
to sign, must necessarily include the certification on non-forum shopping. To respondent, as plaintiff in Civil Case No. Q-99-37372 to personally sign the
conclude otherwise would render nugatory the Special Power of Attorney and Certificate of Non-Forum Shopping. Under the circumstances of this case,
also render respondent's constitution of an attorney-in-fact inutile. we hold that there has been proper compliance with the rule proscribing
forum shopping. As we previously held concerning Administrative Circular
No. 04-94:
Forum shopping "occurs when a party attempts to have his action tried in a
particular court or jurisdiction where he feels he will receive the most
favorable judgment or verdict."22 In our jurisdiction, it has taken the form of The fact that the Circular requires that it be strictly complied with
filing multiple petitions or complaints involving the same issues before two or merely underscores its mandatory nature in that it cannot be
more tribunals or agencies in the hope that one or the other court would dispensed with or its requirements altogether disregarded, but it does
make a favorable disposition.23 There is also forum shopping when, not thereby interdict substantial compliance with its provisions under
because of an adverse decision in one forum, a party seeks a favorable justifiable circumstances.30
opinion (other than by appeal or certiorari) in another.24 The rationale
against forum shopping is that a party should not be allowed to pursue Administrative Circular No. 04-94 is now incorporated in the 1997 Rules of
simultaneous remedies in two different fora. Filing multiple petitions or Civil Procedure, as Rule 7, Section 5. It is basic that the Rules "shall be
complaints constitutes abuse of court processes,25 which tends to degrade liberally construed in order to promote their objective of securing a just,
the administration of justice, wreaks havoc upon orderly judicial procedure, speedy and inexpensive disposition of every action and proceeding."31
and adds to the congestion of the heavily burdened dockets of the courts.26 Otherwise put, the rule requiring a certification of forum shopping to
Thus, the rule proscribing forum shopping seeks to promote candor and accompany every initiatory pleading, "should not be interpreted with such
transparency among lawyers and their clients in the pursuit of their cases absolute literalness as to subvert its own ultimate and legitimate objective or
before the courts to promote the orderly administration of justice, prevent the goal of all rules of procedure – which is to achieve substantial justice as
undue inconvenience upon the other party, and save the precious time of the expeditiously as possible."32
courts. It also aims to prevent the embarrassing situation of two or more
courts or agencies rendering conflicting resolutions or decisions upon the On the third issue, petitioners submit that the amended complaint in Civil
same issue.27 It is in this light that we must look at the propriety and Case No. Q-99-37372 violates Rule 8, Section 133 of the 1997 Rules of Civil
correctness of the Certificate of Non-Forum Shopping signed by Grace Procedure, as there is no plain and direct statement of the ultimate facts on
Galvez on the respondent's behalf. We have examined said Certificate28 and which the plaintiff relies for her claim. Specifically, petitioners contend that
the allegation in paragraph 9-A34 of the amended complaint that "Earnest for guesswork or complicated deductions in order to derive the point sought
efforts towards have been made but the same have failed" is clearly to be made by respondent in paragraph 9-A of the Amended Complaint, that
insufficient. The sentence is incomplete, thus requires the reader of the earnest efforts to compromise the differences between the disputants were
pleading to engage in deductions or inferences in order to get a complete made but to no avail. The petitioners' stance that the defective sentence in
sense of the cause of action, according to petitioners. paragraph 9-A of the Amended Complaint fails to state a cause of action,
thus, has no leg to stand on. Having examined the Amended Complaint in its
Respondent rebuts petitioners' contention by stating that the amended entirety as well as the documents attached thereto, following the rule that
complaint as well as the annexes attached to the pleadings should be taken documents attached to a pleading are considered both as evidence and as
in their entirety in determining whether a cause of action was validly stated in part of the pleading,39 we find that the respondent has properly set out her
the complaint. Thus taken together, in their entirety, the amended complaint cause of action in Civil Case No. Q-99-37372.
and the attachments to the original complaint, clearly show that a sufficient
cause of action as it is shown and stated that earnest efforts towards a WHEREFORE, the instant petition is DENIED for lack of merit. The Decision
compromise have been made, according to respondent. dated December 4, 2000 of the Court of Appeals in CA-G.R. SP No. 55415,
as well as its Resolution dated March 7, 2001, are hereby AFFIRMED. Costs
Under Article 151 of the Family Code, a suit between members of the same against the petitioners.
family shall not be entertained, unless it is alleged in the complaint or petition
that the disputants have made earnest efforts to resolve their differences SO ORDERED.
through compromise, but these efforts have not succeeded. The attempt to
compromise as well as its failure or inability to succeed is a condition Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio, and Azcuna, JJ.,
precedent to the filing of a suit between members of the same family.35 Rule concur.
8, Section 336 of the 1997 Rules of Civil Procedure provides that conditions
precedent may be generally averred in the pleadings. Applying the foregoing
to the instant case, we have to ask: Is there a sufficient general averment of
the condition precedent required by the Family Code in the Amended
Complaint in Civil Case No. Q-99-37372?
We find in the affirmative. Our examination of paragraph 9-A of the Amended

Complaint shows that respondent has complied with this requirement of a
general averment. It is true that the lead sentence of paragraph 9-A, which
reads "Earnest efforts towards have been made but the same have failed"
may be incomplete or even grammatically incorrect as there might be a
missing word or phrase, but to our mind, a lacking word like "compromise"
could be supplied by the rest of the paragraph. A paragraph is "a distinct
section or subdivision of a written or printed composition that consists of from
one to many sentences, forms a rhetorical unit (as by dealing with a
particular point of the subject or by comprising the words of a distinct
speaker)."37 As a "short composition consisting of a group of sentences
dealing with a single topic,"38 a paragraph must necessarily be construed in
its entirety in order to properly derive the message sought to be conveyed. In
the instant case, paragraph 9-A of the Amended Complaint deals with the
topic of efforts made by the respondent to reach a compromise between the
parties. Hence, it is in this light that the defective lead sentence must be
understood or construed. Contrary to what petitioners claim, there is no need
Republic of the Philippines already dead at the time the petition was filed, had signed the verification and
SUPREME COURT certification of non-forum shopping and he was even in possession of a CTC.
Baguio City Petitioners’ actuation showed their lack of forthrightness to the CA which the
latter correctly found to be a dishonest act committed against it.
SECOND DIVISION
G.R. No. 163039 April 6, 2011 Same; Same; Attorneys; Substitution of Counsel; Requirements for a
Valid Substitution of Counsel.—Under Section 26, Rule 138 of the Rules of
HEIRS OF FRANCISCO RETUYA, FELICITAS R. PINTOR, HEIRS OF Court and established jurisprudence, a valid substitution of counsel has the
EPIFANIA R. SEMBLANTE, namely, PREMILINO SEMBLANTE, following requirements: (1) the filing of a written application for substitution; (2)
LUCIFINA S. TAGALOG, URSULINA S. ALMACEN; HEIRS OF JUAN
the client’s written consent; (3) the consent of the substituted lawyer if such
RETUYA, namely, BALBINA R. RODRIGUEZ, DOLORES R. RELACION,
consent can be obtained; and, in case such written consent cannot be
SINFOROSA R. BASUBAS, TEOPISTA R. BASUBAS, FERNANDO
RETUYA, BALDOMERO RETUYA, TEOFILO RETUYA, LEONA COLINA, procured, (4) a proof of service of notice of such motion on the attorney to be
FIDELA R. RAMIREZ, MARTINA R. ALBAñO, SEVERINA R. CABAHUG; substituted in the manner required by the Rules. In this case, petitioners failed
HEIRS OF RAFAELA VILLAMOR; ELIzABETH V. ALESNA; HEIRS OF to comply with the above requirements.
QUINTIN RETUYA, namely, FELIMON RETUYA, SOFIA RETUYA,
PETITION for review on certiorari of the resolutions of the Court of Appeals.
RUDOLFA RETUYA and ELISA RETUYA, Petitioners,
vs.
HONORABLE COURT OF APPEALS, HON. ULRIC CAÑETE as Presiding
Judge of REGIONAL TRIAL COURT Branch 55, Mandaue City, NICOLAS The facts are stated in the opinion of the Court.
RETUYA; HEIRS OF EULOGIO RETUYA, namely, MIGUEL RETUYA,
RAMON RETUYA, GIL RETUYA, PIO RETUYA, MELANIO RETUYA, Steplaw Firm Cebu for petitioners.
NICANOR RETUYA, LEONILA RETUYA, AQUILINA RETUYA,
LUTGARDA RETUYA and PROCOPIO VILLANUEVA, Respondents. Zosa & Quijano Law Offices for respondents.
Remedial Law; Actions; Forum Shopping; Court has in a number of DECISION

cases applied the substantial compliance rule on the filing of the certification
of non-forum shopping, specially when majority of the principal parties had PERALTA, J.:
signed the same and who shared a common interest; Such leniency finds no
applicability in this case because of petitioners’ dishonesty committed against Assailed in this petition for review on certiorari are the Resolutions dated
the appellate court.—As correctly observed by the CA, while we have in a November 28, 20031 and March 3, 20042 of the Court of Appeals (CA) in CA-
number of cases applied the substantial compliance rule on the filing of the G.R. SP No. 76235, which dismissed petitioners' Petition for Annulment of
certification of non-forum shopping, specially when majority of the principal Judgment and their Motion for Reconsideration, respectively.
parties had signed the same and who shared a common interest, We agree
with the CA that such leniency finds no applicability in this case because of Severo Retuya (Severo) and Maxima Mayol Retuya (Maxima) were husband
petitioners’ dishonesty committed against the appellate court. A perusal of the and wife without any children. Severo left several parcels of land registered
verification and certification against forum shopping attached to the petition for under his name which are located in Mandaue City, to wit:
annulment of judgment filed in the CA would show that there was a signature
above the typewritten name of Quintin. In fact, written below the signature of A parcel of land situated in Barangay Tipolo, City of Mandaue, known as Lot
Quintin was Community Tax Certificate (CTC) No. 06570132, issued on No. 113-U of the Subdivision Plan, Psd -07-016382 being a portion of Lot No.
January 8, 2003 in Mandaue City. Thus, it would appear that Quintin, who was 113, II-5121 Amd. (Hacienda Mandaue) LRC Rec. 4030, containing an area
of Two Hundred and Eighty-One (281) sq. meters described in the Transfer In 1996, Severo and Maxima's siblings and their nephews and nieces, herein
Certificate of Title No. 26728 in the Office of the Registry of Land Title and petitioners, filed with the Regional Trial Court (RTC) of Mandaue City, an
Deeds of Mandaue City. action4 for judicial partition of the above-mentioned real properties registered
under the names of Severo and Maxima, and the accounting of the rentals
A parcel of land located in Barangay Tipolo, Mandaue City, known as Lot No. derived therefrom against Severo's two other brothers, respondents Nicolas
5 of the consolidation of Lot No. 122-Q, 122–R, 122-S, 122-T, 122-U, 122-V, and his son Procopio Villanueva, and Eulogio, who was represented by the
122-W, 122-X, 122-U, 122-AA, Psd 07-05-12450, LRC Rec. No. 4030, latter's heirs.
containing an area of Five Hundred Seventy-Four (574) sq. meters,
described in the Transfer Certificate of Title No. 25213 of the Office of the Respondents Heirs of Eulogio filed their Answer5 claiming that Severo had
Registry of Land Title and Deeds of Mandaue City. already sold the subject lands to their father Eulogio by virtue of a notarized
Deed of Absolute Sale of Interests and Pro Indiviso Shares to Lands dated
A parcel of land located in Barangay Tipolo, Mandaue City, known as Lot No. March 29, 1961; thus, petitioners have no right to ask for the partition of the
10 of the consolidation of Lot No. 122-Q, 122-R, 122-S, 122-T, 122-U, 122-V, subject properties, as respondents heirs are the owners of the same. On the
122-W, 122-X, 122-Y and 122-AA, Psd 07-05-12450, LRC Rec. No. 4030, other hand, respondents Nicolas and his son Procopio filed their Answer 6
containing an area of Four Hundred Forty-Two (442) sq. meters, described in admitting to have collected rentals on some of the subject properties and that
the Transfer Certificate of Title No. 25218 of the Office of the Registry of such rentals were still intact and ready for partition; and that they were willing
Land Title and Deeds of Mandaue City. to partition the properties but were opposed by their co-respondents.
A parcel of land, Lot No. 121-1-10 of the subdivision plan, Psd 07-023191, After trial, the RTC rendered a Decision7 dated August 9, 2001, the
being a portion of Lot 121-1, LRC Psd. 262374, LRC Rec. No. 4030 located dispositive portion of which reads as follows:
in Banilad, Mandaue City, containing an area of One Thousand Five Hundred
(1,500) sq. meters described under TCT 32718 of the Registry of Land Title WHEREFORE, premises considered, judgment is rendered declaring the
and Deeds of Mandaue City. heirs of Eulogio Retuya as owners of the 1/16 share of Severo Retuya to ½
of the subject properties representing the shares of the late Severo Retuya
A parcel of land, Lot No. 47-L of the subdivision plan Psd. 07-05-012479, which he inherited from his deceased father, Esteban Retuya and which he
being a portion of Lot 47-11-5121 Amd Hacienda Mandaue LRC Rec. No. sold to Eulogio Retuya as follows:
4030, situated in Barangay Banilad, Mandaue City, covered by TCT 21687 in
the Registry of Land Titles and Deeds for the City of Mandaue.3 Lot 113-U - 48.78 sq. meters
Some of these parcels of land were covered by a lease contract, the rentals Lot 5 - 99.65 sq. meters
of which were received by respondents Nicolas Retuya and Procopio
Villanueva, while Lot No. 47-L, covered by TCT No. 21687, was previously Lot 121-1-10-260 - 42 sq. meters.
sold by the Heirs of Severo and Maxima Retuya to third persons.
and that the remaining areas of these properties, which have not been sold
On June 14, 1961, Severo died intestate, survived by his wife Maxima and by to defendants Heirs of Eulogio Retuya, as well as the rental, be partitioned
Severo's full blood brothers and sisters, namely, Nicolas, Francisco, Quintin, among the herein parties in accordance with law.
Eulogio, Ruperto, Epifania, Georgia and the Heirs of Juan Retuya (Severo’s
brother who had died earlier), as well as Severo's half-blood siblings, namely,
Lot No. 10 is a road right of way and should not be partitioned.8
Romeo, Leona, Rafaela, Fidela, Severina and Martina.
Respondents Heirs of Eulogio filed a Motion for Correction9 of Mathematical
Sometime in 1971, Maxima also died intestate, survived by her siblings,
Computation of their share in Lot 121-1-10 alleging that their correct share
namely, Fructuoso, Daniel, Benjamin, Lorenzo, Concepcion and Teofila.
should be 255 sq. meters, instead of 42 sq. meters.
Petitioners, through their then counsel, Atty. Ernesto B. Mayol, filed a Motion for Clarification and Precautionary Reservation to File Pertinent
Comment10 manifesting that they will submit and abide by whatever Pleadings and Legal Remedies.16 Respondents Heirs of Eulogio filed their
resolution the RTC may adopt or render in relation to the Motion for Opposition17 thereto.
Correction of Mathematical Computation. The other respondents,
represented by Atty. Basilio Duaban, did not file any comment despite receipt In an Order18 dated June 14, 2002, the RTC denied the motion, and the Writ
of the Order11 to do so. of Execution19 was issued.
On October 23, 2001, the RTC issued an Order,12 the dispositive portion of Respondents Heirs of Eulogio filed a Motion to Authorize the Branch Clerk of
which reads: Court to Enforce the Amended Decision.20 Petitioners were ordered by the
RTC to file their Comment thereto. 21
WHEREFORE, the decision dated August 9, 2001 is amended by changing
the area of 42 sq. meters to 255 sq. meters, and the dispositive portion of Petitioners filed their Comment with Prayer for the Issuance of a Clarificatory
said decision will now read as follows: Order22 as to how the RTC arrived at the new computation of 255 sq. meters
from the original award of 42 sq. meters for Lot No. 121-1-10-260.
WHEREFORE, premises considered, judgment is rendered declaring the
Heirs of Eulogio Retuya as owners of the 1/16 share of Severo Retuya to the In an Order23 dated February 17, 2003, the RTC, after finding that what was
½ of the subject properties representing the shares of the late Severo at issue was just the matter of mathematical computation of the area
Retuya, which he inherited from his deceased father, Esteban Retuya and adjudicated to the parties, and in the interest of substantial justice, set a
which he sold to Eulogio Retuya as follows: conference to settle once and for all the exact computation of the parties'
respective shares.
Lot 113-U 48.78 sq. meters
On February 24, 2003, petitioners filed with the CA a Petition for Annulment
Lot 5 99.65 sq. meters of Judgment of the RTC Order dated October 23, 2001, amending the
decision dated August 9, 2001, claiming that the questioned Order was a
Lot 121-1-10-260 255 sq. meters patent nullity for want of jurisdiction and utter lack of due process.
and that the remaining areas of these properties, which have not been sold On April 30, 2003, petitioners filed with the RTC a Manifestation24 submitting
to defendants Heirs of Eulogio Retuya as well as the rental be partitioned the mathematical computation and/or mode of partitioning the shares of the
among the herein parties in accordance with law. opposing parties.
Lot No. 10 is a road right of way and should not be partitioned. As the RTC was in receipt of a copy of the Petition for Annulment of
Judgment filed with the CA, it issued an Order25 holding in abeyance the
Furnish parties, through counsels, copy of this Order for their information. 13 resolution of respondents’ Motion to Authorize the Branch Clerk of Court to
enforce the RTC decision pending such petition.
The RTC decision became final and executory.14
In a Resolution26 dated April 24, 2003, the CA outrightly dismissed the
Petition for Annulment of Judgment. It found that three of the petitioners,
Respondents Heirs of Eulogio filed a Motion for the Issuance of a Writ of namely, Promilino Semblante, Salome Retuya and Fernando Retuya, did not
Execution, which the RTC granted in its Order15 dated March 15, 2002. sign the certification of non-forum shopping; and that the payment of the
docket fee was short of ₱480.00.
Petitioners, through Atty. Norberto Luna, Jr., as collaborating counsel, filed a
Motion to Hold in Abeyance the Implementation of the Writ of Execution with
Petitioners filed their Motion for Reconsideration, which the CA granted in a Circular No. 28-91 of the Supreme Court and Section 5, Rule 7 of the Rules
Resolution27 dated July 3, 2003 and reinstated the petition. of Court, the attestation contained in the certification on non-forum shopping
requires personal knowledge by the party who executed the same. The
On July 22, 2003, respondents Heirs of Eulogio filed a Motion for liberal interpretation of the rules cannot be accorded to parties who commit
Reconsideration of the July 3, 2003 Resolution,28 on the ground that it was dishonesty and falsehood in court.
made to appear in the Petition for Annulment of Judgment that Quintin
Retuya, one of the petitioners, had signed the certification against forum Second, records reveal that this Motion for reconsideration was signed by a
shopping on March 18, 2003, when he had already died on July 29, 1996; certain Atty. Renante A. Dela Cerna as counsel for the petitioners without the
that the signature of co-petitioner Romeo Retuya in the certification against counsel of record, Atty. Norberto A. Luna's formal withdrawal. No notice of
forum shopping was not his, as compared to his signature in the letter which substitution of counsel was filed by the petitioners and Atty. Dela Cerna
respondents attached to the motion for reconsideration; and that Romeo never entered his appearance as counsel for petitioner.
suffered a stroke in January 2003 and was bedridden until he died on April
28, 2003. xxxx
In a Resolution dated November 28, 2003, the CA granted respondents’ There being no formal withdrawal or substitution of counsel made, Atty.
Motion for Reconsideration and dismissed the petition, as no Comment was Norberto A. Luna remains the counsel of record for petitioners. Atty. Luna
filed by petitioners. The CA said that Section 5, Rule 7 of the Rules of Court may not be presumed substituted by Atty. Renante Dela Cerna merely by the
provides that the principal party shall sign the certification against forum latter's filing or signing of the motion for reconsideration. In the absence of
shopping, as the attestation requires personal knowledge by the party who compliance with the essential requirements for valid substitution of counsel of
executed the same, otherwise, it would cause the dismissal of the petition. record, the court can presume that Atty. Luna continuously represents the
Considering that Quintin, one of the parties to the petition, died on July 29, petitioners. Hence, Atty. Renante Dela Cerna has no right to represent the
1996, it could have been impossible for him to sign the Petition dated March petitioners in this case. 30
18, 2003.1avvphi1
Hence, this petition wherein petitioners raise the sole ground that:
A Motion for Reconsideration29 was filed by Atty. Renante dela Cerna as
counsel for petitioners, contending that there was substantial compliance
THE RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN
with the rule on certification against forum shopping when majority of the
DISMISSING THE PETITIONERS’ PETITION BY RULING AGAINST THE
principal parties were able to sign the verification and certification against
PETITIONERS' SUBSTANTIAL COMPLIANCE TO THE CERTIFICATION
forum shopping. Attached in the motion for reconsideration was the affidavit
AGAINST NON-FORUM SHOPPING FOR THE ALLEGED DISHONESTY
of the Heirs of Quintin acknowledging said mistake and submitted a COMMITTED BY THE PARTIES AND/OR THEIR COUNSEL WHEN THEY
verification and certification duly signed by the heirs. MADE IT APPEAR THAT ONE OF THE LISTED PARTIES SIGNED THE
CERTIFICATION, WHEN IN FACT HE DIED BEFORE THE PETITION WAS
On March 3, 2004, the CA issued a Resolution denying petitioners' motion for FILED.31
reconsideration. In so ruling, the CA said:
The CA dismissed the Petition for Annulment of Judgment after it found that
While it may be true that when majority of the parties have signed the Quintin, one of the parties to the petition, had already died on July 29, 1996,
certification against non-forum shopping would constitute "substantial thus, it was impossible for him to have signed the verification and certification
compliance," this Court cannot apply the same rule to petitioners. First, of non-forum shopping attached to the petition filed on March 18, 2003. The
petitioners' counsel failed to explain why a dead person/party was able to CA found petitioners to have committed dishonesty and falsehood to the
sign the certification against non-forum shopping. The issue is not the parties' court, thus, it could not apply the liberal interpretation of the rule on
substantial compliance, but the dishonesty committed by the parties and/or certification against forum shopping.
their counsel when they made it appear that one of the listed parties signed
the certification when in fact he died long before the petition was filed. Under
We found no reversible error committed by the CA.
As correctly observed by the CA, while we have in a number of cases 32 We also find that the CA correctly denied the motion for reconsideration on
applied the substantial compliance rule on the filing of the certification of non- the ground that Atty. Renante dela Cerna, the lawyer who filed the motion for
forum shopping, specially when majority of the principal parties had signed reconsideration, had no right to represent petitioners.
the same and who shared a common interest, We agree with the CA that
such leniency finds no applicability in this case because of petitioners’ Under Section 26, Rule 138 of the Rules of Court and established
dishonesty committed against the appellate court. A perusal of the jurisprudence, a valid substitution of counsel has the following requirements:
verification and certification against forum shopping attached to the petition (1) the filing of a written application for substitution; (2) the client’s written
for annulment of judgment filed in the CA would show that there was a consent; (3) the consent of the substituted lawyer if such consent can be
signature above the typewritten name of Quintin. In fact, written below the obtained; and, in case such written consent cannot be procured, (4) a proof
signature of Quintin was Community Tax Certificate (CTC) No. 06570132, of service of notice of such motion on the attorney to be substituted in the
issued on January 8, 2003 in Mandaue City. Thus, it would appear that manner required by the Rules.33 In this case, petitioners failed to comply with
Quintin, who was already dead at the time the petition was filed, had signed the above requirements.
the verification and certification of non-forum shopping and he was even in
possession of a CTC. Petitioners’ actuation showed their lack of
Atty. Dela Cerna, as counsel for petitioners, filed the motion for
forthrightness to the CA which the latter correctly found to be a dishonest act
reconsideration on December 22, 2003. However, he is not the counsel on
committed against it. record of petitioners, but Atty. Luna. Petitioners did not file a motion for
substitution of counsel on record before the filing of the motion for
Petitioners allege that the explanation of their former counsel on record, Atty. reconsideration. It is worthy to mention that Atty. Dela Cerna did not even file
Luna, to the show cause order issued by the CA to him that: (1) he had no a notice of appearance. If it has been held that courts may not presume that
intention to make it appear that a dead man in the person of Quintin was able the counsel of record has been substituted by a second counsel merely from
to sign the verification and certification against forum shopping; (2) when he the filing of a formal appearance by the latter,34 then with more reason that
entered his appearance as counsel for petitioners before the RTC, he, the Atty. Dela Cerna could not be considered to have substituted Atty. Luna as
RTC, the co-petitioners and the other respondents, as well as their counsel, there was no notice of his entry of appearance at all.
knew of the fact of Quintin’s death and the status of Felimon Retuya who
immediately substituted his father, and in behalf of his siblings; (3) that in his
The fact that Atty. Luna was still the counsel on record at the time Atty. Dela
entry of appearance filed before the RTC, it was Felimon, one of Quintin's Cerna filed his motion for reconsideration was established in Atty. Luna's
heirs, who signed in the above typewritten name of Quintin, were found by Explanation dated March 19, 2004 to the CA's Show Cause Order to him
the CA to be meritorious and noted the same. Thus, petitioners claim that
wherein he prayed therein that an Order be issued relieving him of his legal
they also have no intention of deceiving respondents, since as explained by
obligations to petitioners. Moreover, on April 30, 2004, petitioners through
Atty. Luna, all the parties and counsels knew of the death of Quintin.
their counsel on record, Atty. Luna, filed a motion for substitution of counsels
wherein they alleged that they engaged the services of Atty. Jorge
We are not persuaded. Esparagosa as their new counsel and relieved Atty. Luna of all his legal
obligations to them. Notably, there was no mention at all of Atty. Dela Cerna.
Notwithstanding that the CA had found the explanation of Atty. Luna to be Indeed, there was no showing of the authority of Atty. Dela Cerna to file the
meritorious, the CA did not err when it dismissed the petition. Notably, there motion for reconsideration for petitioners. Thus, the CA correctly found that
was a signature above the typewritten name of Quintin without any showing Atty. Dela Cerna has no personality to represent petitioners and file the
that it was signed by another person for or in behalf of Quintin. In the motion for reconsideration.
absence of such qualification, it appeared before the CA that Quintin was the
one who signed the same, especially since the CA did not know of the fact of WHEREFORE, the petition is DENIED. The Resolutions dated November 28,
Quintin’s death. There was nothing in the petition for annulment of judgment 2003 and March 3, 2004 of the Court of Appeals are AFFIRMED.
which alleged such information. In fact, we do not find any sufficient
explanation given by petitioners as to why there was a signature of Quintin SO ORDERED.
appearing in the verification and certification against forum shopping.
Republic of the Philippines permanent application; its operation was not limited to the period of
SUPREME COURT em-ergency.
Manila
EN BANC Same; Same; Same; Contract of deposit not novated by promise of

bank to pay depositor later.—The alleged promise by the bank to pay the
G.R. No. L-18401 April 27, 1963 depositor when it would be indemnified by either the United States or the
Japanese government, could not be considered a novation of the contract of
PERFECTO JABALDE, plaintiff-appellant, deposit, be-cause there was no contract to novate for lack of one of the
vs. essential elements of a contract, which is an object, the object of the supposed
PHILIPPINE NATIONAL BANK, defendant-appellee.
contract having been declared null and void, and, therefore, non-existing.
Cecilio de la Victoria and L. de la Victoria for plaintiff-appellant.

Ramon B. de los Reyes, Conrado E. Medina and Felisitas C. Diaz for
defendant-appellee. APPEAL from a decision of the Court of First Instance of Cebu.
Pleading and practice; Genuineness and due execution of document;

Waiver of defendant’s technical admission thru failure to deny under oath; The facts are stated in the opinion of the Court.
Case at bar.—Although, ordinarily, the bank’s failure in the case at bar to deny
under oath the entries in the passbook as copied in the complaint, constitutes Cecilio de la Victoria and L. de la Victoria for plaintiff-appellant.
an ad-mission of the genuineness and due execution of the document, this rule
cannot apply because the plaintiff introduced evidence purporting to support Ramon B. de los Reyes, Conrado E. Medina and Felisitas C. Diaz for
his allegations of deposit on the dates he wanted the court to believe, and defendant-appellee.
offered no objection during the trial to the testimonies of defendant’s witnesses
and docu-mentary evidence showing different dates of deposit. These acts REYES, J.B.L., J.:
constitute a waiver by the plaintiff of the defendant’s technical admission
through failure to deny under oath the genuine-ness and due execution of the Appeal from a decision of the Court of First Instance of Cebu to the Court of
document (Cf. Legarda Koh vs. Ongsiako, 36 Phil. 185; Yu Chuck vs. Kong Li Appeals, elevated by the latter to the Supreme Court as a case involving a
Po, 46 Phil 608, both cited in 1 Moran 232, 233, 1957 ed.). constitutional question under Section 17 of the Judiciary Act of 1948.
Plaintiff-appellant Perfecto Jabalde seeks recovery of P10,000.00 allegedly

deposited by him with the defendant-appellee Philippine National Bank,
Banks; Deposits during enemy occupation; Executive Order No. 49 a P5,000.00 in genuine Philippine currency on 21 July 1941 and another
valid exercise of extraordinary powers by the President and intended for P5,000.00 on 30 August 1943 in mixed genuine Philippine currency and
permanent application.—The promulgation of Executive Order No. 49, which Japanese military notes. The complaint recites the printed wording of
provides that deposits made with banking institutions during the enemy plaintiff's passbook, and allegedly reproduces page one thereof, reciting it to
occupation, and all de-posit liabilities incurred by banking institutions during be as follows:
the same period are null and void, except as otherwise provided therein, is a
valid exercise of the extraordinary powers invested by the legislature unto the Philippine National Bank
President by Commonwealth Act No. 671, which was enacted pursuant to Manila, Philippines
Article VI, Section 16 of the Constitution. Said Executive Order is intended for in account with
July 21, 1941 P5,000.00 passbook states on its face that it is a "Free Account". The difference
AUG. 30, 1943 5,000.00 between the two kinds of accounts, as instituted by the bank, has been well
explained. The business sheets of war-time accounts in the Cebu bank
The defendant's answer was not under oath, and admits the making of the branch also show that Perfecto Jabalde, along with several clients, deposited
foregoing deposits, but denies the dates of deposit, alleging as the true dates money in Japanese military notes only and on the dates alleged by the bank.
21 July 1944 and 30 August 1944, and avers that the entries in the passbook The conclusion drawn from this array of evidence is inevitably that the
as to the deposit dates were "knowingly, unlawfully and maliciously" altered deposits were made on 21 July 1944 and on 30 August 1944, and all in
by the plaintiff; and that the deposits were all in Japanese military notes. military notes.
Both parties adduced evidence in support of their allegations, and after trial, The first legal issue is whether the bank's failure to deny under oath the
the Court of First Instance of Cebu dismissed the case. entries in the passbook as "copied" in the complaint constitutes an admission
of the genuineness and due execution of the document. Ordinarily, such
failure is an admission. However, this rule cannot apply in the present case
Appellant insists that the dates of deposit were really 21 July 1941 and 30
because the plaintiff introduced evidence purporting to support his
August 1943, and were made in Philippine money and mixed Philippine
money and Japanese military notes, respectively. The evidence allegations of deposit on the dates he wanted the court to believe, and
preponderantly militates against the contention. That the date entries in the offered no objection during the trial to the testimonies of defendant's
witnesses and documentary evidence showing different dates of deposit.1 By
passbook, Exhibit "A", were tampered with is clear to the naked eyed. The
these acts, the plaintiff waived the defendant's technical admission through
years of both entries are obscured with a blot of black ink. Photographic
failure to deny under oath the genuineness and due execution of the
enlargements (Exhibits 3-A and 3-B), however, discernibly show that the year
of the first entry is "1944", and not "1941". While the year of the second entry document (Cf. Legarda Koh vs. Ongsiako, 36 Phil. 185; Yu Chuck vs. Kong
is badly obliterated, for obvious reasons it could not be earlier than the first Li Po, 46 Phil. 608, both cited in 1 Moran 232, 233, 1957 ed.). It has,
likewise, been ruled that —
entry. The testimony of the expert witness as to the last two numerals of the
first date year, that it is "1944", is logical, and eliminates whatever doubt
exists by means of enlarged photographs. He explained how both the slant Where written instrument set forth in answer is not denied by
(diagonal) and the vertical lines in both figures are parallel to each other, and affidavit, yet if evidence in respect to that matter, and tending to
the angles created by the slant and horizontal lines are congruent; the bases show that instrument is not genuine, or was not delivered, is
of the two "4's" are on the same plane. Therefore, we agree that no other introduced by plaintiff without objection on part of defendant, or
conclusion is possible than that the two last digits are both "4". motion to strike out, and is met by counter-evidence on part of
defendant, the latter ought not to be permitted to claim that
genuineness and due execution of instrument are admitted.
Plaintiff's counsel avers that if there was any tampering, it should be
attributed to the bank that issued the passbook. On this point, the trial court (Francisco, Rules of Court, Anno. & Commented, Vol. I, Part I, Rev.
correctly observed that it would be puerile for any of the bank's officials to do Ed., pp. 734-735, citing the case of Clark v. Child, 66 Cal. 87)
this since the act would be against the bank's interest.
The court of first instance held that the appellant's wartime deposits were not
reimbursable under Executive Order No. 49, Series of 1945, issued by
Wherefore, the parties respectfully pray that the foregoing stipulation of facts
be admitted and approved by this Honorable Court, without prejudice to the President Osmeña in the exercise of the authority conferred by the
parties adducing other evidence to prove their case not covered by this Emergency Powers Act (Comm. Act No. 671). The Executive Order provides
stipulation of facts. 1äwphï1.ñët that:.
All deposits made with banking institutions during enemy occupation,

Defendant's witnesses have also shown, by their testimonies and business
sheets of account during the war years (Exhibits 5, 6, and 7), that appellant and all deposit liabilities incurred by banking the same period are
declared null and void, except as provided in this section.
Perfecto Jabalde did not have a pre-war, or "controlled", account with the
defendant bank, although he did open a wartime, or "free", account. The
The appellant does not contest that under said Executive Order his wartime object of the supposed contract (in this case the deposited military notes)
deposits are void; but he vigorously assails the validity and constitutionality of was declared null and void, and, therefore, non-existing.
the order as impairing the obligation of contracts and depriving him of
property without due process of law. FOR THE FOREGOING REASONS, the decision appealed from is hereby
affirmed, with costs against the appellant. Let the case be referred to the City
This is no longer an open issue. It was passed upon and decided in Hilado Fiscal, through the Department of Justice, for investigation and prosecution
vs. De la Costa, 83 Phil. 471, wherein it was ruled: as the facts may warrant.
We are of the considered opinion, and therefore hold, that the Bengzon, C.J., Bautista Angelo, Labrador, Concepcion, Barrera, Paredes,
provisions of Executive Order No. 49, do not deprive the plaintiff of Dizon, Regala and Makalintal, JJ., concur.
his property without due process of law or impair the obligation of Padilla, J., took no part.
contract entered into between him and the defendant bank; because
they are but the logical corollary and application to bank deposits in
Japanese war notes of Executive Order No. 25, in so far as it
declares that said notes are not legal tender in territories of the
Philippines liberated from Japanese occupation, the validity of which
is not, and cannot seriously be, questioned.
The promulgation of Executive Order No. 49 was a valid exercise of the

extraordinary powers invested by the legislature unto the President by
Commonwealth Act No. 671. This Act, enacted pursuant to Article VI, Section
16 of the Constitution, after declaring the necessity for granting extraordinary
powers to the President in Section 1 thereof, granted him in Section 2 the
power —
to promulgate such rules and regulations as he may deem necessary

to carry out the national policy declared in Section 1 hereof.
Accordingly, he is, among other things, empowered (a) ...; (i) to
exercise such other powers as he may deem necessary to enable
the Government to fulfill its responsibilities and to maintain and
enforce its authority. (Emphasis supplied)
The argument that the rule of Hilado vs. De la Costa, supra, should not apply
because the complaint herein was filed in 1956 when there was no more
emergency is impertinent, since Executive Order No. 49 is clearly intended
for permanent application, and its operation was not limited to the period of
emergency.
Assuming, arguendo, that the bank promised later to pay the plaintiff-
depositor when it would be indemnified by either the United States or the
Japanese government, said promise could not be considered a novation of
the contract of deposit, because there was no contract to novate in the first
place, for lack of one of the essential elements of a contract: object. The
G.R. No. L-28633 March 30, 1971 Same; Same; Interpretation of.—If there is any ambiguity in the bond it should
be interpreted against the surety company that prepared it and that the action
CENTRAL SURETY and INSURANCE COMPANY, petitioner, could be filed within the statutory period of prescription.
vs.
C. N. HODGES and THE COURT OF APPEALS, respondents.
Pleading and practice; Rule of evidence; Where case tried disregarding rule.—
Pelaez, Jalandoni and Jamir for petitioner. Where a case has been tried in complete disregard of the rule and the plaintiff
laying pleaded a document by copy, presents oral evidence to prove the due
Leon P. Gellada for respondent C. N. Hodges. execution of the document as well as the agent’s authority and no objections
are made to the defendant’s evidence in refutation, the rule will be considered
Suretyship; Bonds; Revocation of authority to issue bonds should be waived.
published; Effect of non-publication.—It is not disputed that petitioner has not
caused to be published any notice of the revocation of Mrs. Mesa’s authority APPEAL by certiorari from a decision of the Court of Appeals.
to issue surety bonds on its behalf, notwithstanding the fact that the powers of
Mrs. Mesa, as its branch manager in Iloilo, were of a general nature, for she
had exclusive authority, in the City of Iloilo, to represent petitioner herein, not The facts are stated in the opinion of the Court.
with a particular person, but with the public in general, “in all the negotiations,
transactions, and business wherein the Company may lawfully transact or Pelaez, Jalandoni & Jamir for petitioner.
engage in,” subject only to the restrictions specified in their agreement, copy
Leon P. Gellada for respondent C. N. Hodges.
of which was attached to petitioner’s answer as Annex 3. Contrary to
petitioner’s claim, Article 1922 applies whenever an agent has general powers,
CONCEPCION, C.J.:
not merely when the principal has published the same, apart from the fact that
the opening of petitioner’s branch office amounted to a publication of the grant
Appeal by certiorari from a decision of the Court of Appeals, the dispositive
of powers to the manager of said office. Then, again, by honoring several
part of which reads as follows:
surety bonds issued in its behalf by Mrs. Mesa subsequently to March 15,
1952, petitioner induced the public to believe that she had authority to issue
WHEREFORE, in view of the foregoing considerations, the decision
such bonds. As a consequence, petitioner is now estopped from pleading,
appealed from is modified and judgment is hereby rendered against Central
particularly against a regular customer thereof, like Hodges, the absence of Surety & Insurance Company:
said authority.
(a) To pay plaintiff C. N. Hodges the sum of P17,826.08 with interest thereon
at the rate of 12% per annum from October 24, 1955 until fully paid;
Same; Same; When prescription of three-month period established only a
condition precedent and not a limitation of action.—The three-month period (b) To pay plaintiff C. N. Hodges the sum of P1,551.60 as attorney's fees;
prescribed therein established only a condition precedent, not a limitation of and
action, and that, when a claim has been presented within said period, the
action to enforce the claim may be filed within the statutory time of prescription. (c) To pay the costs.
This view was clarified in a subsequent case, in the sense that the above-
quoted provision was merely interpreted to mean that presentation of the claim The main facts are not disputed. Prior to January 15, 1954, lots Nos. 1226
within three months was a condition precedent to the filing of a court action. and 1182 of the Cadastral Survey of Talisay, Negros Occidental, had been
sold by C. N. Hodges to Vicente M. Layson, for the sum of P43,000.90,
payable on installments. As of January 15, 1954, the outstanding balance of
Layson's debt, after deducting the installments paid by him prior thereto, surety bonds in excess of P8,000.00 without the approval of petitioner's main
amounted to P15,516.00. In order that he could use said lots as security for a office which was not given to the surety bond in favor of Hodges; and (c) that
loan he intended to apply from a bank, Layson persuaded Hodges to execute the present action is barred by the provision in the surety bond to the effect
in his (Layson's) favor a deed of absolute sale over the properties, with the that all claims and actions thereon should be filed within three (3) months
understanding that he would put up a surety bond to guarantee the payment from the date of its expiration on January 23, 1955. Petitioner, moreover, set
of said balance. Accordingly, on the date above-mentioned, Layson up a counterclaim for damages.
executed, in favor of Hodges, a promissory note for P15,516.00, with interest
thereon at the rate of 1% per month, and the sum of P1,551.60, for attorney's In due course, thereafter, the trial court rendered a decision:
fees and costs, in case of default in the payment of the principal or interest of
said note. To guarantee the same, on January 23, 1954, the Central Surety a) Condenando a la demandada Central Surety & Insurance Co. que pague
and Insurance Company — hereinafter referred to as petitioner — through al demandante la desde la P8,000.00 con intereses legales a contar desde la
the manager of its branch office in Iloilo, Mrs. Rosita Mesa, executed in favor
fecha de la demanda — 24 de Octubre de 1955;
of Hodges the surety bond Annex B, which was good for twelve (12) months
from the date thereof.
b) Condenando a la misma demandada que pague al de mindante la suma
de P600.00 en concepto de honorarios de abogado; y
When Layson defaulted in the discharge of his aforesaid obligation, Hodges
demanded payment from the petitioner, which, despite repeated extensions
of time granted thereto, at its request, failed to honor its commitments under c) Condenindo ademas a la misma demandada que pague las costas del
the surety bond. On October 24, 1955, Hodges commenced, therefore. the juicio.
present action, in the Court of First Instance of Iloilo, against Layson and
petitioner herein, to recover from them, jointly and severally, the sums of Hodges appealed to the Court of Appeals (CA-G.R. No. L-24684-R) from this
P17,826.08, representing the principal and interest due up to said date, and decision, insofar as it limited petitioners liability to P8,000.00. Petitioner, also,
P1,551.60, as attorney's fees. In his answer to the complaint, Layson appealed to said Court upon the ground that the trial court had erred: (a) in
admitted the formal allegations and denied the other allegations thereof. holding petitioner liable under a contract entered into by its agent in excess
of her authority; (b) in sentencing petitioner to pay Hodges the sum of
Having failed to file its answer within the reglementary period, the petitioner P8,000.00 with interest thereon, in addition to attorney's fees and the costs;
was, on January 18, 1956, declared in default. When the case was called for and (c) in "not awarding" petitioner's counterclaim.
trial, insofar as Layson was concerned, the latter did not appear, and Hodges
was allowed to introduce his evidence. Then the trial court rendered a partial After appropriate proceedings, the Court of Appeals rendered the decision
decision against Layson, petitioner having, in the meantime, filed a motion to above referred to, from which petitioner has appealed to this Court, alleging
set aside the order of default, which motion was still pending that the Court of Appeals has erred: (1) in finding that petitioner "was liable
resolution.lâwphî1.ñèt Thereafter, said motion was denied, and upon on a bond issued by an agent whose authority ... had already been
presentation of the evidence of Hodges against herein petitioner, judgment withdrawn and revoked"; (2) "in applying the rule on implied admission by
was rendered against the latter as prayed for in the complaint. Thereupon, reason of failure to deny under oath the authenticity of a pleaded document";
petitioner filled a motion for reconsideration and a motion for relief under and (3) "in not considering the legal effect of the waiver contained in the
Rule 38. Acting thereon, His Honor, the trial Judge, later set aside its disputed bond and in not disposing of this case under the light of such
decision against the petitioner and admitted its answer, attached to the waiver."
motion to set aside the order of default.
The first assignment of error is predicated upon the fact that prior to January
In its answer, petitioner disclaimed liability under the surety bond in question, 23, 1954, when the surety bond involved in this case was executed, or on
upon the ground (a) that the same is null and void, it having been issued by March 15, 1952, petitioner herein had withdrawn the authority of its branch
Mrs. Rosita Mesa after her authority therefor had been withdrawn on March manager in the City of Iloilo, Mrs. Rosita Mesa, to issue, inter alia, surety
15, 1952; (b) that even under her original authority Mrs. Mesa could not issue bonds and that, accordingly, the surety bond, copy of which was attached to
the complaint as Annex B, is null and void. On this point, the Court of If the agent had general powers, revocation of the agency
Appeals had the following to say: does not prejudice third persons who acted in good faith and
without knowledge of the revocation. Notice of the revocation
... we are of the opinion that said surety bond is valid. In the in a newspaper of general circulation is a sufficient warning
first place, there appears to be no showing that the to third persons.
revocation of authority was made known to the public in
general by publication, nor was Hodges notified of such It is not disputed that petitioner has not caused to be published any notice of
revocation despite the fact that he was a regular client of the the revocation of Mrs. Mesa's authority to issue surety bonds on its behalf,
firm. And even if Hodges would have inquired from Mrs. notwithstanding the fact that the powers of Mrs. Mesa, as its branch manager
Mesa as to her authority to issue said bond, we doubt if she in Iloilo, were of a general nature, for she had exclusive authority, in the City
would disclose the contents of the letter of March 15, 1952 in of Iloilo, to represent petitioner herein, not with a particular person, but with
view of Central Surety's claim that she was committing the public in general, "in all the negotiations, transactions, and business in
irregularities in her remittances to the main office. Secondly, wherein the Company may lawfully transact or engage on subject only to the
some surety bonds issued by Mrs. Mesa in favor of Hodges restrictions specified in their agreement, copy of which was attached to
after her authority had allegedly been curtailed, were petitioner's answer as Annex 3.1 Contrary to petitioner's claim, Article 1922
honored by the Central Surety despite the fact that these applies whenever an agent has general powers, not merely when the
were not reported to the main office at the time of their principal has published the same, apart from the fact that the opening of
issuance. These accounts were paid on January 31, 1957, to petitioner's branch office amounted to a publication of the grant of powers to
wit: Felicito and Libertad Parra issued on August 16, 1952; the manager of said office. Then, again, by honoring several surety bonds
Estrella Auayan issued on November 16, 1953; Dominador issued in its behalf by Mrs. Mesa subsequently to March 15, 1952, petitioner
Jordan issued on August 26, 1953; and Ladislao Lachica induced the public to believe that she had authority to issue such bonds. As a
issued on February 28, 1953. (Exhs. F, G, H, I and J). By consequence, petitioner is now estopped from pleading, particularly against a
these acts Central Surety ratified Mrs. Mesa's unauthorized regular customer thereof, like Hodges, the absence of said authority.
acts and as such it is now estopped from setting forth Mrs.
Mesa's lack of authority to issue surety bonds after March Let us now take up the third assignment of error and defer, until after the
15, 1952. It has been held that although the agent may have same has been disposed of, the consideration of the second assignment of
acted beyond the scope of his authority, or may have acted error. Under the third assignment of error, petitioner maintains that, having
without authority at all, the principal may yet subsequently been instituted on October 24, 1955 — or nine (9) months after the expiration
see fit to recognize and adopt the act as his own. Ratification of petitioner's surety bond on January 23, 1955 — the present action is
being a matter of assent to and approval of the act as done barred by the provision in said bond to the effect that it:
on account of the person ratifying any words or acts which
show such assent and approval are ordinarily sufficient. (Sta. ...will not be liable for any claim not discovered and
Catalina vs. Espitero, CA-G.R. No. 27075-R, April 28, 1964, presented to the Company within three (3) months from the
citing IV Padilla, CIVIL CODE. 1959 ed., pp. 478-479; Roxas
expiration of this bond and that the obligee hereby waives
vs. Villanueva, CA-G.R. No. 18928-R, June 20, 1958).
his right to file any court action against the surety after the
Moreover, the relocation of agency does not prejudice third
termination of the period of three months above-mentioned.
persons who acted in good faith without knowledge of the
revocation. (Joson vs. Garcia, CA-G.R. No. 29336-R. Nov.
19, 1962). Interpreting an identical provision,2 court has, however, held "that the three-
month period" prescribed therein "established only a condition precedent, —
not a limitation of action," and that, when a claim has been presented within
Indeed, Article 1922 of our Civil Code provides:
said period, the action to enforce the claim may be "filed within the statutory
time of prescription." This view was clarified in a subsequent case,3 in the
sense that the above-quoted provision was "... merely interpreted to mean
that presentation of the claim within three months was a condition precedent are made to the defendant's evidence in refutation, the rule
to the filing of a court action. Since the obligee in said case presented his will be considered waived.6
claim seasonably although it did not file the action within the same period,
this Court ruled that the stipulation in the bond concerning the limitation being The reason for such view was explained by this Court as follows:
ambiguous, the ambiguity should be resolved against the surety, which
drafted the agreement, and that the action could be filed within the statutory
Before entering upon a discussion of the questions raised by
period of prescription."4
the assignments of error, we may draw attention to a matter
which has not been mentioned either by counsel or by the
In the case at bar, it is not contended that Hodges had not presented his court below, but which, to prevent misunderstanding, should
claim within three (3) months from January 23, 1955. In fact, he had be briefly explained: It is averred in the complaint that it is
repeatedly demanded from petitioner herein compliance with its obligations accompanied by a copy of the contract between the parties
under the surety bond in question, and, in reply to such demands, petitioner (Exhibit A) which copy, by the terms of the complaint, is
asked extensions of time, on January 29, February 16, March 15, May 3, made a part thereof. The copy is not set forth in the bill of
June 16, July 1 and 15, and October 15, 1955.5 After thus securing exceptions and aside from said averment, there is no
extensions of time, even beyond three (3) months from January 23, 1955, indication that the copy actually accompanied the complaint,
petitioner cannot plead the lapse of said period to bar the present action. but an examination of the record of the case in the Court of
First Instance shows that a translation of the contract was
The second assignment of error assails the finding of the Court of Appeals to attached to the complaint and served upon the defendant. As
the effect that the petitioner is liable for the full amount of surety bond — this translation may be considered a copy and as the
despite the fact that it exceeded the sum of P8,000.00 and hence, required, defendant failed to deny its authenticity under oath, it will
for its validity and binding effect as against petitioner herein, the express perhaps be said that under section 103 of the Code of Civil
approval and confirmation of its Manila office, which were not secured — in Procedure the omission to so deny it constitutes an
view of petitioner's failure to deny under oath the genuineness and due admission of the genuineness and due execution of the
execution of said bond, copy of which was attached to the complaint. It is document as well as of the agent's authority to bind the
true that, pursuant to section 8 of Rule 8 of the Rules of Court: defendant. (Merchant vs. International Banking Corporation,
6 Phil. 314.)
When an action or defense is founded upon a written
instrument, copied in or attached to the corresponding In ordinary circumstances that would be true. But this case
pleading as provided in the preceding section, the appears to have been tried upon the theory that the rule did
genuineness and due execution of the instrument shall be not apply; at least, it was wholly overlooked or disregarded
deemed admitted unless the adverse party, under oath, by both parties.lâwphî1.ñèt The plaintiffs at the beginning of
specifically denies them, and sets forth what he claims to be the trial presented a number of witnesses to prove the due
the facts; but this provision does not apply when the adverse execution of the document as well as the agent's authority;
party does not appear to be a party to the instrument or no objection were made to the defendant's evidence in
when compliance with an order for an inspection of the refutation; all no exceptions taken; and the matter is not
original instrument is refused. mentioned in the decision of the trial court.
We have however, held that: The object of the rule is 'to relieve a party of the trouble and
expense of proving in the first instance an alleged fact, the
... where a case has been tried in complete disregard of the existence or nonexistence of which is necessarily within the
rule and the plaintiff having pleaded a document by copy, knowledge of the adverse party, and of the necessity (to his
presents oral evidence to prove the due execution of the opponent's case) of establishing which such adverse party is
document as well as the agent's authority and no objections
notified by his opponent's pleading.' (Nery Lim-Chingco vs.

Terariray, 5 Phil., at p. 124.)
The plaintiff may, of course, waive the rule and that is what
he must be considered to have done in the present case by
introducing evidence as to the execution of the document
and failing to object to the defendant's evidence in refutation;
all this evidence is now competent and the case must be
decided thereupon. .... Nothing of what has here been said is
in conflict with former decisions of this court; it will be found
upon examination that in all cases where the applicability of
the rule has been sustained the party invoking it has relied
on it in the court below and conducted his case
accordingly."7
In the case at bar, the parties acted in complete disregard of or wholly

overlooked the rule above-quoted. Hodges had neither objected to the
evidence introduced by petitioner herein in order to prove that Mrs. Mesa had
no authority to issue a surety bond, much less one in excess of P8,000.00,
and took no exception to the admission of said evidence. Hence, Hodges
must be deemed to have waived the benefits of said rule and petitioner
herein cannot be held liable in excess of the sum of P8,000.00.
WHEREFORE, with the modification that petitioner's liability to Hodges is

limited to said sum of P8,000.00 the period, the petitioner was, on January
18, 1956, declared it is hereby affirmed in all other respects, without costs. It
is so ordered.
Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro, Fernando, Teehankee,

Barredo, Villamor and Makasiar, JJ., concur.
Republic of the Philippines Same; Same; Same; Same; Same; Where action is founded upon a written
SUPREME COURT instrument attached to the complaint.—Where the suit is one where a copy of
Manila the promissory note sued upon was attached to the complaint, it would be easy
for the defendant to specifically allege in his answer whether or not he had
EN BANC executed the alleged instrument. Whether such fact was or was not true could
not be unknown to the defendant.
G.R. No. L-28140 March 19, 1970
CAPITOL MOTORS CORPORATIONS, plaintiff-appellee, Same; Same; Same; Same; Mere allegation of ignorance of facts alleged in
vs. the complaint is insufficient to raise an issue.—A mere allegation of
NEMESIO I. YABUT, defendant-appellant.
ignorance of the facts alleged in the complaint, is insufficient to raise an
issue; the defendant must aver positively or state how it is that he is ignorant
Jose A. David, Jr. for plaintiff-appellee. of the facts so alleged.
R. Correa for defendant-appellant.

Same; Same; Same; Action based on document; Where the genuineness and
Remedial law; Civil actions; Allegations in pleadings; Specific denial; Modes
due execution of document is deemed admitted -Where the action is founded
of specific denial.—Section 10, Rule 8 of the Revised Rules of Court
upon a written instrument atached to the complaint, and the defendant failed
recognizes three modes of specific denial, namely: (1) by specifying each
to deny under ath the genuineness and due execution of the instrument; the
material allegation of fact in the complaint the truth of which the defendant
same are deemed admitted.
does not admit, and, whenever practicable, setting forth the substance of the
matters which he will rely upon to support his denial or (2) by specifying so
much of an averment in the complaint as is true and material and denying only
the remainder or (3) by stating that the defendant is without knowledge or Same; Same; Judgment on the pleadings; Effect of failure to oppose motion
information sufficient to form a belief as to the truth of a material averment in for judgment on the pleadings filed by plaintiff.—Where the defendant neither
the complaint, which has the effect of a denial opposed the motion for judgment on the pleadings filed by the plaintiff nor filed
a motion for reconsideration of the order of the court which deemed the case
submitted for decision on the pleadings, or of the decision of the same court
which rendered judgment based on the allegations and prayer of the
Same; Same; Same; Same; When averment that defendant is without
complaint, the defendant is deemed to have admitted the allegations of the
knowledge or information sufficient to form a belief as to the truth of a material
complaint, so that there is no necessity for the plaintiff to submit evidence of
averment in the complaint, does not constitute a specific denial under Sec. 10,
his claim.
Rule 8.—The rule authorizing an answer to the effect that the defendant has
no knowledge or information sufficient to form a belief as to the truth of an
averment and giving such answer the affect of a denial, does not apply where
the fact as to which want of knowledge is asserted, is so plainly and necessarily APPEAL from a judgment of the Court of First Instance of Rizal.
within the defendant’s knowledge that his averment of ignorance must be
palpably untrue.
The facts are stated in the opinion of the Court.
Jose A. David, Jr. for plaintiff-appellee.

R. Correa for defendant-appellant On June 16, 1966, the plaintiff filed a motion for judgment on the pleadings,
on the ground that the defendant, not having set forth in his answer the
VILLAMOR, J.: substance of the matters relied upon by him to support his denial, had failed
to deny specifically the material allegations of the complaint, hence, must be
deemed to have admitted them. The defendant did not file an opposition to
Appeal on a question of law from the judgment of the Court of First Instance
the motion. On September 13, 1966, after hearing on the motion, the court
of Rizal in its Civil Case. No. Q-9869.
issued an order granting the said motion and considering the case submitted
for decision on the basis of the pleadings; and on January 9, 1967, the court
On March 1, 1966, Capitol Motors Corporations filed a complaint against rendered judgment granting in toto the plaintiff's prayer in its complaint.
Nemesio I. Yabut. It was therein averred that on April 24, 1965, the
defendant executed in favor of the plaintiff a promissory note (copy of which
In this appeal, defendant-appellant contends that the court a quo erred in
was attached to the complaint) for the sum of P30,134.25, payable in
considering him as having failed to deny specifically the material allegations
eighteen (18) equal monthly installments with interest at 12% per annum, the
of the complaint, and, consequently, in deciding the case on the basis of the
first installment to become due on June 10, 1965, that it was stipulated in the
pleadings. Citing Moran, Comments on the Rules of Court, Vol. I, 1963 Ed.,
promissory note that should the defendant fail to pay two (2) successive
p. 281, he argues that since Section 10, Rule 8 of the Revised Rules of
installments, the principal sum remaining unpaid would immediately become
Court, recognizes three (3) modes of specific denial, namely: (1) by
due and demandable and the defendant would, by way of attorney's fees and
specifying each material allegation of fact in the complaint the truth of which
costs of collection, be obligated to the plaintiff for an additional sum
the defendant does not admit, and, whenever practicable, setting forth the
equivalent to 25% of the principal and interest due; that as of February 23,
substance of the matters which he will rely upon to support his denial or (2)
1966, the sum remaining unpaid on the promissory note was P30,754.79,
by specifying so much of an averment in the complaint as is true and material
including accrued interest; that the defendant defaulted in the payment of two
and denying only the remainder or (3) by stating that the defendant is without
(2) successive installments, and likewise failed to pay the interest due on the
knowledge or information sufficient to form a belief as to the truth of a
promissory note; and that in spite of demands by the plaintiff, the defendant
material averment in the complaint, which has the effect of a denial, and he
failed and refused to pay the said principal sum and interest due. Prayer was
has adopted the third mode of specific denial, his answer tendered an issue,
made that the defendant be ordered to pay the plaintiff the sum of
and, consequently the court a quo could not render a valid judgment on the
P30,754.79, as well as the interest due thereon from February 23, 1966, and
pleadings.
an additional sum equivalent to 25% of the amount due, plus costs.
This appeal is without merit.
On April 27, 1966, and within the reglementary period, the defendant,
through his counsel, filed an answer which reads:
We agree with defendant-appellant that one of the modes of specific denial
contemplated in Section 10, Rule 8, is a denial by stating that the defendant
DEFENDANT through counsel alleges:
is without knowledge or information sufficient to form a belief as to the truth
of a material averment in the complaint. The question, however, is whether
1. Paragraph 1 of the complaint is admitted. paragraph 2 of defendant-appellant's answer constitutes a specific denial
under the said rule. We do not think so. In Warner Barnes & Co., Ltd. vs.
2. Paragraphs 2, 3, 4, 5, 6 and 7 of the complaint are Reyes, et al., G.R. No. L-9531, May 14, 1958 (103 Phil., 662), this Court said
specifically denied for lack of knowledge sufficient to form a that the rule authorizing an answer to the effect that the defendant has no
belief as to the truth thereof. knowledge or information sufficient to form a belief as to the truth of an
averment and giving such answer the effect of a denial, does not apply
WHEREFORE, it is respectfully prayed that the Complaint be where the fact as to which want of knowledge is asserted, is so plainly and
dismissed with costs against the plaintiff. necessarily within the defendant's knowledge that his averment of ignorance
must be palpably untrue. In said case the suit was one for foreclosure of
mortgage, and a copy of the deed of mortgage was attached to the
complaint; thus, according to this Court, it would have been easy for the It becomes evident from all the above doctrines that a mere allegation of
defendants to specifically allege in their answer whether or not they had ignorance of the facts alleged in the complaint, is insufficient to raise an
executed the alleged mortgage. The same thing can be said in the present issue; the defendant must aver positively or state how it is that he is ignorant
case, where a copy of the promissory note sued upon was attached to the of the facts so alleged. (Francisco, The Revised Rules of Court in the
complaint. The doctrine in Warner Barnes & Co., Ltd. was reiterated in J. P. Philippines, Vol. I, p. 417, citing Wood vs. Staniels, 3 Code Rep. 152 and
Juan & Sons, Inc. vs. Lianga Industries, Inc., G.R. No. L-25137, July 28, Vassalt vs. Austin, 32 Cal. 597.)
1969 (28 SCRA 807). And in Sy-quia vs. Marsman, G.R. No. L-23426, March
1, 1968 (22 SCRA 927), this Court said: Thus, in at least two (2) cases where this Court ruled that judgment on the
pleadings was not proper, it will be seen that the reason was that in each
With regard to the plea of lack of knowledge or information case the defendants did something more than merely alleging lack of
set up in paragraph 3 of the answer, this Court's decision in knowledge or information sufficient to form a belief. In Arrojo vs. Caldoza, et
Warner Barnes vs. Reyes, 103 Phil. 662, 665, is authority for al., G.R. No. L-17454, July 31, 1963 (8 SCRA 547), the defendants, in their
the proposition that this form of denial must be availed of answer to the complaint for recovery of possession of a parcel of land, did
with sincerity and good faith, not for the purpose of confusing not merely allege that they had no knowledge or information sufficient to form
the other party, nor for purposes of delay. Yet, so lacking in a belief as to the truth of the material allegations in the complaint, but added
sincerity and good faith is this part of the answer that the following: "The truth of the matter is that the defendants have not
defendants-appellants go to the limit of denying knowledge occupied or taken any property belonging to the plaintiff. They took
or information as to whether they (defendants) were in the possession and ownership only of the land belonging to them, which
premises (Marsman Bldg.) on January 4, 1961, as averred in properties were possessed and owned originally by their predecessors-in-
paragraph 4 of the complaint. Yet whether such a fact was or interest, who were the parents of the defendants ...." In Benavides vs.
was not true could not be unknown to these defendants. Alabastro, G.R. No. L-19762, December 23, 1964 (12 SCRA 553), the
defendant's answer did not only deny the material allegations of the
In National Marketing Corporation vs. De Castro, 106 Phil. 803 (1959), this complaints but also set up certain special and affirmative defenses the nature
Court held: of which called for presentation of evidence.
Furthermore, in his answer to the appellee's complaint, he There are two other reasons why the present appeal must fail. First. The
merely alleged that 'he has no knowledge or information present action is founded upon a written instrument attached to the
sufficient to form a belief as to the truth of the matters complaint, but defendant-appellant failed to deny under oath the
contained in paragraphs 3, 4, 5 and 6 so much so that he genuineness and due execution of the instrument; hence, the same are
denies specifically said allegations.' A denial is not specific deemed admitted. (Section 8, Rule 8 of the Revised Rules of Court; Songo
simply because it is so qualified. (Sections 6 and 7, Rule 9; vs. Sellner, 37 Phil. 254; Philippine Commercial & Industrial Bank vs. ELRO
El Hogar Filipino vs. Santos Investments, Inc., 74 Phil. 79; Development Corporation, et al., G.R. No. L-30830, August 22, 1969 [29,
Baetamo vs. Amador, 74 Phil. 735; Dacanay vs. Lucero, 76 SCRA 38]; J. P. Juan & Sons, Inc. vs. Lianga Industries, Inc., supra.)
Phil. 139; Lagrimas vs. Lagrimas, 95 Phil. 113). Material Second. Defendant-appellant did not oppose the motion for judgment on the
averments in a complaint, other than those as to the amount pleadings filed by plaintiff appellee; neither has he filed a motion for
of damage, are deemed admitted when not specifically reconsideration of the order of September 13, 1966, which deemed the case
denied. (Section 8, Rule 9,) The court may render judgment submitted for decision on the pleadings, or of the decision rendered on
upon the pleadings if material averments in the complaint are January 9, 1967. In Santiago vs. Basilan Lumber Company, G.R. No. L-
admitted. (Section 10, Rule 35; Baetamo vs. Amador, supra, 15532, October 31, 1963 (9 SCRA 349), this Court said:
Lichauco vs. Guash, 76 Phil. 5; Lati vs. Valmores, G.R. No.
L-6877, 30 March 1954.) It appears that when the plaintiff moved to have the case
decided on the pleadings, the defendant interposed no
objection and has practically assented thereto. The
defendant, therefore, is deemed to have admitted the

allegations of the complaint, so that there was no necessity
for the plaintiff to submit evidence of his claim.
PREMISES CONSIDERED, the judgment appealed from is affirmed, with

cost against defendant-appellant.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro,

Fernando, Teehankee and Barredo, JJ., concur.
Republic of the Philippines

SUPREME COURT
Manila PETITION for review on certiorari of the decision and resolution of the Court
of Appeals.
SECOND DIVISION
G.R. No. 159648 July 27, 2007 The facts are stated in the opinion of the Court.
Angara, Abello, Concepcion, Regala and Cruz for petitioner.

FLUOR DANIEL, INC.-PHILIPPINES, Petitioner,
vs. A. Tan, Zoleta & Associates Law Firm for respondent.
E.B. VILLAROSA & PARTNERS CO., LTD., Respondent.
Remedial Law; Actions; Causes of Action; Essential Elements of a Cause of

Action; The test of sufficiency of facts alleged in the complaint as constituting
DECISION
a cause of action is whether or not admitting the facts alleged, the court could
render a valid verdict in accordance with the prayer of the complaint.—The
QUISUMBING, J.:
essential elements of a cause of action are as follows: 1) A right in favor of the
plaintiff by whatever means and under whatever law it arises or is created; 2)
For review on certiorari are the Decision1 dated October 24, 2002 and the
An obligation on the part of the defendant not to violate such right; and 3) An
Resolution2 dated August 25, 2003 of the Court of Appeals in CA-G.R. SP
act or omission on the part of the defendant in violation of the right of the
No. 52897, which had affirmed the November 19, 19983 and March 24, 19994
plaintiff or constituting a breach of the obligation of the defendant to the plaintiff Orders of the Regional Trial Court of Makati City, Branch 58, in Civil Case
for which the latter may maintain an action for recovery of damages or other No. 98-1342.
relief. It is, thus, only upon the occurrence of the last element that a cause of
action arises, giving the plaintiff a right to file an action in court for recovery of The pertinent facts, borne by the records, are as follows.
damages or other relief. The test of sufficiency of facts alleged in the complaint
as constituting a cause of action is whether or not admitting the facts alleged,
Petitioner Fluor Daniel, Inc.-Philippines is a domestic corporation providing
the court could render a valid verdict in accordance with the prayer of the construction and program management services. Sometime in 1996,
complaint. That in determining sufficiency of cause of action, the court takes petitioner entered into an agreement with Fil-Estate Properties, Inc. (Fil-
into account only the material allegations of the complaint and no other, is not Estate) for the construction of the Fairways & Bluewater, Newcoast Island
a hard and fast rule. In some cases, the court considers the documents Resort in Boracay Island. Respondent E.B. Villarosa & Partners Co., Ltd.
attached to the complaint to truly determine sufficiency of cause of action. was one of the contractors engaged by petitioner to provide services for the
said project.
Same; Same; Same; A complaint should not be dismissed for insufficiency of On May 6, 1997, petitioner and respondent executed a separate contract for
cause of action if it appears clearly from the complaint and its attachments that civil structure and architecture, for plumbing and fire protection, and for
millworks. However, Fil-Estate failed to satisfy petitioner’s monthly progress
the plaintiff is entitled to relief.—We have ruled that a complaint should not be
billing. Hence, petitioner did not pay respondent.
dismissed for insufficiency of cause of action if it appears clearly from the
complaint and its attachments that the plaintiff is entitled to relief. The converse
Petitioner apprised Fil-Estate that the project would have to be suspended.
is also true. The complaint may be dismissed for lack of cause of action if it is
Petitioner likewise issued a notice of suspension of work to all its contractors,
obvious from the complaint and its annexes that the plaintiff is not entitled to
including respondent. In response, respondent informed petitioner that it
any relief.
deemed the contracts between them good as terminated. Thus, respondent 1) Plaintiff’s Urgent Motion to Amend Complaint With Leave of Court
demanded payment for suspension cost and for work so far performed. is hereby GRANTED. Accordingly, plaintiff’s Amended Complaint
filed on May 07, 1999 is hereby admitted in lieu of the original
Believing that petitioner was in bad faith, respondent also filed with the complaint which is hereby deemed withdrawn for all intents and
Regional Trial Court of Makati City, Branch 58, a complaint5 for a sum of purposes. Consequently, defendant is given fifteen (15) days after
money and damages, docketed as Civil Case No. 98-1342. receipt of this Order within which to file its Amended Answer to
plaintiff’s Amended Complaint.
Petitioner filed a motion to dismiss6 on the ground that the complaint failed to
state a cause of action. The trial court denied the motion in its first assailed 2) Defendant’s Motion to Suspend Proceedings is hereby DENIED.
Order, to wit:
SO ORDERED.9
WHEREFORE, foregoing considered, defendant’s motion to dismiss is
hereby DENIED. Petitioner filed with the Court of Appeals a special civil action for certiorari
assailing the November 19, 1998 and March 24, 1999 Orders of the court a
Pursuant to Section 4 of Rule 16, 1997 Rules of Civil Procedure, defendant- quo and praying for a temporary restraining order and/or writ of preliminary
movant shall file its answer within the balance of the period prescribed by injunction. The appellate court decreed:
Rule 11, same Rules, to which defendant was entitled at the time of serving
its motion, but not less than five (5) days in any event, computed from receipt WHEREFORE, the Order dated 19 November 1998 issued by the Regional
of this order. Trial Court of Makati, Branch 58 in Civil Case No. 98-1342 entitled "E.B.
Villarosa & Partners Co., Inc. vs. Fluor Daniel, Inc. –Philippines" denying
SO ORDERED.7 petitioner’s Motion To Dismiss as well as its order of 24 March 1999 denying
reconsideration thereof, are both affirmed.
Petitioner’s motion for reconsideration was likewise denied in the trial court’s
second impugned Order, thus: Accordingly, the temporary restraining order issued by the Ninth Division of
this Court as contained in Resolution dated 25 May 2000 … is hereby lifted.
WHEREFORE, foregoing considered, defendant’s Motion for
Reconsideration is hereby DENIED. Costs against petitioner.
The filing of the last pleading and the consequent joinder of issues has SO ORDERED.10
ripened this case for pre-trial which is hereby set…
Hence, the instant petition, raising the following issues:
Let notices of pre-trial be sent to the parties and their counsel.
I.
SO ORDERED.8
Whether or not the Complaint sufficiently states a cause of action against
Respondent subsequently filed a motion to amend its complaint followed by FDIP [PETITIONER] in light of the jurisprudential tests and guidelines laid
its amended complaint. Petitioner, on the other hand, filed a motion to down by this Honorable Court.
suspend proceedings. The trial court granted respondent’s, but denied
petitioner’s motion, to wit: II.
WHEREFORE, in view of the foregoing:

Whether or not the annexes attached to the Complaint should be considered SEC. 2. Cause of action, defined. – A cause of action is the act or omission
in determining whether or not VILLAROSA’s [RESPONDENT’S] Complaint by which a party violates a right of another.
sufficiently stated a cause of action against FDIP in light of jurisprudential
tests and guidelines laid down by this Honorable Court. The essential elements of a cause of action are as follows: 1) A right in favor
of the plaintiff by whatever means and under whatever law it arises or is
III. created; 2) An obligation on the part of the defendant not to violate such
right; and 3) An act or omission on the part of the defendant in violation of the
Whether or not the Court of Appeals, in refusing to consider the annexes to right of the plaintiff or constituting a breach of the obligation of the defendant
the Complaint, erred in failing to appreciate the clear admission of to the plaintiff for which the latter may maintain an action for recovery of
VILLAROSA [RESPONDENT] that payment of its billings was subject to the damages or other relief.12
condition of timely receipt of similar payments from FIL-ESTATE.
It is, thus, only upon the occurrence of the last element that a cause of action
IV. arises, giving the plaintiff a right to file an action in court for recovery of
damages or other relief.13 The test of sufficiency of facts alleged in the
Whether or not the Court of Appeals, in refusing to consider the annexes to complaint as constituting a cause of action is whether or not admitting the
facts alleged, the court could render a valid verdict in accordance with the
the Complaint, failed to appreciate the significance of VILLAROSA’s
prayer of the complaint.14 That in determining sufficiency of cause of action,
[RESPONDENT’S] failure to satisfy the required criteria to justify payment
the court takes into account only the material allegations of the complaint and
under its monthly progress billings.11
no other, is not a hard and fast rule. In some cases, the court considers the
documents attached to the complaint to truly determine sufficiency of cause
Petitioner contends that the complaint utterly and miserably failed to state the of action.15
operative facts which would give rise to a cause of action against it.
Petitioner insists that the annexes attached to respondent’s complaint and
We have ruled that a complaint should not be dismissed for insufficiency of
other pleadings should be considered in determining respondent’s cause of
action, or lack of it, against petitioner. Petitioner maintains that the Court of cause of action if it appears clearly from the complaint and its attachments
Appeals committed manifest error when it refused to consider the annexes to that the plaintiff is entitled to relief.16 The converse is also true. The complaint
may be dismissed for lack of cause of action if it is obvious from the
the complaint, showing respondent’s admission that payment of its billings
complaint and its annexes that the plaintiff is not entitled to any relief.
was subject to the condition of timely receipt of similar payments from
petitioner.
In this case, we note that annexed to the subject complaint are the three
Respondent, however, counters that its complaint sufficiently stated a cause contracts governing the rights and obligations between petitioner and
respondent, namely the contract for civil structure and architecture, the
of action against petitioner and that the annexes attached to the complaint
contract for plumbing and fire protection, and the contract for millworks.
bear no relevance, not having been admitted by stipulation. Respondent
Records show that recurring in each of the said contracts is the provision that
asserts that the three elements of a cause of action are all present in this
payment by petitioner shall be subject to its timely receipt of similar payments
case, namely: (i) legal right of respondent to demand payment from
petitioner; (ii) obligation of petitioner to pay respondent; and (iii) failure of from Fil-Estate. The said provision, found in each of the aforesaid contracts,
petitioner to pay respondent. Respondent stresses that petitioner cannot is quoted below:
evade its liability to pay by claiming that payments to respondent are subject
to timely receipt of similar payments from Fil-Estate. 2.0 PRICING BASIS
The petition is impressed with merit. The Contract Price set forth herein is firm for the duration of the Work and
includes all Contractor’s costs, expenses, overhead and profit for complete
performance of the Work.
Section 2, Rule 2 of the Rules of Civil Procedure provides:
xxxx
…Payment of the billings shall be subject to the timely receipt of similar

payments from the client by Fluor Daniel. Any prolonged delay in payment
by Fluor Daniel is subject to a suspension of activities by EBV within five (5)
work days after proper written notice is provided by contractor to Fluor
Daniel.17 (Emphasis supplied.)
On their face, the said attached contracts, which define and delimit the rights
and obligations of the parties, clearly require a specific condition before
petitioner may be held liable for payment. The complaint, however, failed to
state that the said condition had been fulfilled. Without the said condition
having taken place, petitioner cannot be said to have breached its obligation
to pay.
We thus hold that respondent’s complaint, taken with the contracts annexed
to it, failed to pass the test of sufficiency of cause of action. Thus, the said
complaint should have been dismissed on the ground of failure to state a
cause of action.
WHEREFORE, the petition is GRANTED. The assailed Decision dated

October 24, 2002 and the Resolution dated August 25, 2003 of the Court of
Appeals in CA-G.R. SP No. 52897, which affirmed the November 19, 1998
and March 24, 1999 Orders of the Regional Trial Court of Makati City,
Branch 58 in Civil Case No. 98-1342, are REVERSED AND SET ASIDE.
Costs against respondent.
SO ORDERED.
Republic of the Philippines domain; but no document has been presented that would clearly establish the
SUPREME COURT length of time of the possession of their predecessors-in-interest. That the
Manila private respondents have paid the corresponding taxes since 1972 when they
possessed the same is of no moment because what is vital to consider is their
THIRD DIVISION predecessors-ininterest's compliance with the 30-year period.
PETITION for review on certiorari of the decision of the Court of Appeals.

G.R. No. L-45828 June 1, 1992 Domondon, J.
DIRECTOR OF LANDS, petitioner,

vs.
THE HONORABLE COURT OF APPEALS, SILVESTRE MANLAPAZ and The facts are stated in the opinion of the Court.
NATIVIDAD PIZARRO, respondents. Faustino V. Vigo for private respondent,
Land Registration; Actions; Res Judicata; Effect of failure to raise defense of

res judicata in land registration cases.—Thus, the defense of res adjudicata
when not set up either in a motion to dismiss or in answer, is deemed waived. ROMERO, J.:
It cannot be pleaded for the first time at the trial or on appeal (Phil. Coal Miners'
Union v. CEPOC, et al, L19007, April 30, 1964, 10 SCRA 784, 789). This is a petition for review on certiorari seeking the reversal of the Decision
1 rendered by respondent Court of Appeals in CA-G.R. No. 56788-B, dated
March 7, 1977, affirming the Decision 2 of the then Court of First Instance of
Same; Cadastral Proceeding; Res Judicata; Judgment in a cadastral case Bataan, dated April 6, 1974, in Land Registration Case No. N-235,
adjudicating in favor of herein private respondents the subject two (2) parcels
does not become res judicata.—A judicial declaration that a parcel of land is
of land.
public, does not preclude even the same applicant from subsequently seeking
a judicial confirmation of his title to the same land, provided he thereafter
The undisputed facts of the case are as follows:
complies with the provisions of Section 48 of Commonwealth Act No. 141, as
amended, and as long as said public land remains alienable and disposable
(now sections 3 and 4, PD No. 1073). On January 29, 1973, spouses Silvestre Manlapaz and Natividad Pizarro
(herein private respondents) filed an application before the Court of First
Instance of Bataan, seeking the registration and confirmation of titles to two
(2) parcels of land, under Act 496 in relation to Sec. 48 (B) of C.A. No. 141,
Same; Evidence; Applicant for registration of title has burden of proof.—It must designated as Lot No. 2855 and Lot No. 2856. The parcels of land applied for
be emphasized that the burden is on applicant to prove his positive averments are portions of Lot 2749 of Orion Cadastre covered by plans Sgs-4600-D and
and not for the government or the private oppositors to establish a negative Sgs-4601-D, situated at Barrio Damulog, Municipality of Orion, Province of
proposition insofar as the applicants' specific lots are concerned. Bataan, containing an area of 49,954 sq. meters and 54,052 sq. meters,
respectively.3
Prior to the initial hearing of the case, the trial court in its Order dated April 5,
Same; Same; Applicant failed to prove 30-year possession.—Lastly, the
1973, directed the Land Registration Commissioner to submit his report on
documents introduced by the applicants merely evidenced the fact that the whether or not the parcels of land in question had been issued patents or
parcels of land applied for were alienable and disposable lands of the public whether the same are subject of pending decrees. 4 In compliance with this
directive, Acting Geodetic Engineer (Chief Surveyor) Amado Masicampo, on the owners of the adjoining parcels of land but, on cross-examination, was
behalf of the Commissioner of Land Registration, filed a manifestation dated unable to remember their names. 14 Witness Monico Balila testified that he
April 26, 1973 stating that the subject parcels of land described on Plans is the owner of the parcel of land adjoining private respondent's property. He
Sgs-4600-D and Sgs-4601-D are portions of Lot 2749, Cad. 241, Orion had seen Angeles clear the same and plant different fruit trees. On cross-
Cadastre and that the same have been the subject of registration examination, he said that he was twelve (12) years old when he first lived at
proceedings in Court Cadastral Case No. 15, LRC (GLRO) Cadastral Record Bilolo, Orion, Bataan in 1938. His land holding was five kilometers away from
No. 1021 wherein a decision has been rendered although there is no existing private respondents' land and it was his uncle who was then in possession of
record of the same on file because it was among those records lost or the land he presently owns. 15
destroyed due to the ravages of the last global war. The record also
disclosed that Plans Sgs-4600-D and Sgs-4601-D, when plotted in the Private respondent Silvestre Manlapaz also testified that upon their
Municipal Index Map through their respective lines conflict with Lot 1, Sgs- acquisition of the two (2) parcels of land designated as Lots 2855 and 2856,
2806 which has been issued Sales Patent No. 5819. 5 they immediately took possession of the same, planted coconuts, camotes
and other vegetables and expanded the portion planted to palay. Some
The Director of Lands seasonably filed an opposition on the ground that portions were converted into two (2) residential lots, one with an area of 276
neither the applicants nor their predecessor-in-interest possess sufficient title sq. meters and the other, 105 sq. meters. They then declared those
to acquire ownership in fee simple of the parcels of land applied for; that they properties in their names and paid the corresponding land taxes. 16
have not been in open, continuous, exclusive and notorious possession and
occupation of the land in question for at least thirthy (30) years immediately The Director of Lands, on the other hand, did not present any evidence to
preceding the filing of the present application; and that these parcels of land support his opposition.
are portions of the public domain belonging to the Republic of the
Philippines, and therefore, not subject to appropriation. 6 On April 6, 1974, the lower court rendered its decision, the dispositive part of
which reads as follows:
At the hearing on August 21, 1973, the Court issued an order of special
default with the exception of the Director of Lands. 7 As prayed for by private
WHEREFORE, the title to two parcels of land Identified and
respondents' counsel, the parties were allowed to present evidence before shown in plans Sgs-4600-D and 4601-D, situated at Barrio
the Clerk of Court who was commissioned to receive the same and to submit Damulog, Municipality of Orion, Province of Bataan,
his findings after the termination of the reception of evidence. 8
containing an area of 49,954 square meters and 54,052
square meters, respectively, is ordered confirmed in the
In order to establish thirty (30) years of open and continuous possession over name of the spouses Silvestre Manlapaz and Natividad
the subject property, private respondents presented Crisanto Angeles and Pizarro, both of legal age, Filipino citizens and residents of
Monico Balila, Crisanto Angeles claimed that he first took possession of Pilar, Bataan.
these two (2) parcels of land in the year 1931 while he was still twenty (20)
years old. He cleared the land and planted different kinds of fruit-bearing
After this decision shall have become final, let an order issue
trees such as mango, star apple and bananas, as well as seasonal crops
for a decree of registration in favor of the applicants.
thereon. He likewise converted 5,000 sq. meters thereof into a ricefield which
was enlarged to one hectare. 9 These parcels of land were declared for
taxation purposes only in 1966. 10 Meanwhile, in the year 1938, he sold the SO ORDERED. 17
parcel containing an area of about five (5) hectares to Pablito Punay, who
immediately took possession of the same, cultivated it and introduced From said judgment, the Director of Lands interposed an appeal to the Court
several improvements thereon. 11 In September 1972, after he had already of Appeals which promulgated its decision 18 on May 7, 1977, affirming the
cleared the whole tract of the second parcel of land, he sold the same to decision of the lower court. It found that the defense of res judicata was
private respondents. 12 Pablito Punay also sold the first parcel of land he belatedly raised on appeal. The omission to include the same in the answer
acquired from Crisanto to them. 13 Angeles further stated that he knew all as one of the affirmative defenses constitutes a waiver of said defense. The
manifestation of Mr. Masicampo stating that the two (2) parcels of land have
been the subject of registration proceedings was not enough to support res Rules of Court of 1964, in no uncertain language, provides
judicata. It concluded that the 30-year period of continuous possession of that:
private respondents' predecessors-in-interest has been satisfactorily proved,
the Director of Lands not having presented any evidence to contradict, SEC. 2. Defenses and obligations not
impugn or impeach the facts established by private respondents. pleaded deemed waived. — Defenses and
objections not pleaded either in a motion to
Hence, this petition which assigns the following errors: dismiss or in the answer are deemed
waived; . . .
I
All defenses therefore not interposed in a motion to dismiss
Respondent Court erred in ruling that petitioner failed to or in an answer are deemed waived. (Santiago, et al. v.
raise the defense of res judicata in the trial court and, hence, Ramirez, et al.; L-15237, May 31, 1963, 8 SCRA 157, 162;
waived the same. Torrada v. Bonearos, L-39832, January 30, 1976, 69 SCRA
247, 253).
II
Thus, the defense of res adjudicata when not set up either in
a motion to dismiss or in answer, is deemed waived. It
Respondent Court erred in ruling that petitioner failed to
cannot be pleaded for the first time at the trial or on appeal.
prove res judicata by competent evidence.
(Phil. Coal Miners' Union v. CEPOC, et al., L-19007, April
30, 1964, 10 SCRA 784, 789). (Emphasis supplied)
III
Furthermore, petitioner advanced the view that it is the intendment of the law
Respondent Court erred in ruling that after the cadastral that a person who fails to prove his title to a parcel of land which is the object
proceedings and the declaration of the subject parcels of of cadastral proceedings or one who does not file his claim therein is forever
land as public land therein, the same may be the subject of barred from doing so in a subsequent proceeding. Judgment in a cadastral
judicial confirmation of imperfect title or claim based on proceeding which is a proceeding in rem constitutes res judicata even
adverse and continuous possession of at least thirty (30) against a person who did not take part in the proceedings as claimant.
years, citing the case of Mindanao v. Director of Lands, et
al., G.R. No. L-19535, July 10, 1967. 19
We disagree. The above-cited case likewise settled this contention. It said:
The Court of Appeals committed no error in disregarding res judicata. In the
But granting for a moment, that the defenses of res
case of Director of Lands v. Court of Appeals, 20 this Court had addressed a
adjudicata was properly raised by petitioner herein, WE still
similar contention in this manner:
hold that, factually, there is no prior final judgment all to
speak of. The decision in Cadastral Case No. 41 does not
WE find no legal basis to uphold the foregoing contentions of constitute a bar to the application of respondent Manuela
Petitioner. It is clear from the evidence on record that in the Pastor; because a decision in a cadastral proceeding
proceedings had before the Court of First Instance of declaring a lot public land is not the final decree
Batangas, acting as a land registration court, the oppositor contemplated in Section 38 and 40 of the Land Registration
Director of Lands. petitioner herein, did not interpose any Act.
objection nor set up the defense of res judicata with respect
to the lots in question. Such failure on the part of oppositor
A Judicial declaration that a parcel of land is public, does not
Director of Lands. to OUR mind, is a procedural infirmity
preclude even the same applicant from subsequently
which cannot be cured on appeal. Section 2, Rule 9, Revised
seeking a judicial confirmation of his title to the same land,
provided he thereafter complies with the provisions. of Lastly, the documents introduced by the applicants merely evidenced the fact
Section 48 of Commonwealth Act No. 141, as amended, and that the parcels of land applied for were alienable and disposable lands of
as long as said public land remains alienable and disposable the public domain,25 but no document has been presented that would clearly
(now section 3 and 4, PD No. 1073,) 21 (Emphasis supplied) establish the length of time of the possession of their predecessors-in-
interest. That the private respondents have paid the corresponding taxes
As a rule, the Court respects the factual findings of the Court of Appeals, since 1972 26 when they possessed the same is of no moment because
imparting to them a certain measure of finality. However, the rule is not what is vital to consider is their predecessors-in-interest's compliance with
without clearly defined exceptions, among which are: ". . . (2) the inference the 30-year period.
made is manifestly mistaken; . . . (4) the judgment is based on
misapprehension of facts; . . . and (9) when the finding of fact of the Court of Undoubtedly, the private respondents have failed to submit convincing proof
Appeals is premised on the absence of evidence and is contradicted by of their predecessors-in-interest's actual, peaceful and adverse possession in
evidence on record." 22 the concept of owner of the lots in question during the period required, by
law. This is of utmost significance in view of the basic presumption that lands
It must be emphasized that the burden is on applicant to prove his positive of whatever classification belong to the State and evidence of a land grant
averments and not for the government or the private oppositors to establish a must be "well-nigh incontrovertible." 27
negative proposition insofar as the applicants' specific lots are concerned. 23
Applying this rule to the instant case, the conclusions reached by the court a WHEREFORE, premises considered, the May 7, 1977 decision of the Court
quo and respondent Court of Appeals that the private respondents through of Appeals is hereby REVERSED and SET ASIDE, and judgment is rendered
their predecessors-in-interest have been in open, continuous, exclusive and DISMISSING the application for registration and confirmation of titles of Lots
notorious possession of the subject land under a bonafide claim of ownership No. 2855 and 2656. No pronouncement as to costs.
are not persuasive for the following reasons.
SO ORDERED.
First, the testimony of Crisanto Angeles as to his possession and ownership
of the two (2) parcels of land fails to inspire belief. He claimed that he was in Gutierrez, Jr., Feliciano, Bidin and Davide, Jr., JJ., concur.
possession of the land way back in 1930. Yet he declared the same for
taxation purposes only in 1966. Although tax receipts are not incontrovertible
evidence of ownership, they constitute at least proof that the holder had a
claim of title over the property. 24 He stated that he knew the owners of the
adjoining properties, but during the cross-examination, he was unable to give
their names. Nor was he able to explain how he came into possession of the
parcel of land and there is no showing of any title, perfect or imperfect,
granted by the state to him or his predecessors.
Second, the attempt of Monico Balila to corroborate Angeles' length of

possession over the subject property is less than credible. Having been an
adjoining owner only in 1953 by his own admission, he could not have known
how long Crisanto Angeles owned and possessed the parcels of land.
Third, Pablito Punay, the second predecessor-in-interest of Lot No. 2855 of

the private respondents was not made to testify. No reason was disclosed for
his failure to appear before the court.
Republic of the Philippines an exception. The specific enumeration of disqualified witnesses excludes the
SUPREME COURT operation of causes of disability other than those mentioned in the Rules, It is
Manila a maxim of recognized utility and merit in the construction of statutes that an
express exception, exemption, or saving clause excludes other exceptions. (In
THIRD DIVISION Re Estate of Enriquez, 29 Phil. 167) As a general rule, where there are express
exceptions these comprise the only limitations on the operation of a statute
G.R. No. 73039 October 9, 1987 and no other exception will be implied. (Sutherland on Statutory Construction,
Fourth Edition, Vol. 2A, p. 90) The Rules should not be interpreted to include
PERFECTA CAVILI, PRIMITIVO CAVILI and QUIRINO CAVILI, petitioners, an exception not embodied therein.
vs.
HON. TEODORO N. FLORENDO, Presiding Judge, Branch XXXVI,
Regional Trial Court of Negros Oriental, 7th Judicial Region, CLARITA
Same; Same; Same; Same; Civil Procedure; Default; Loss of standing in court
CAVILI, ULPIANO CAVILI, ESTRELLA CAVILI, PLACIDA CAVILI, ET AL.,
respondents. is the consequence of an order of default; "Loss of standing," interpreted;
Absence of provision in the Rule which contemplates a disqualification to be a
witness or a deponent in a case; Default does not make him incompetent—
No. L-68680 October 9, 1987
Loss of standing in court is the consequence of an order of default. Thus, a
party declared in default is considered out of court and cannot appear therein,
PERFECTA CAVILI, PRIMITIVO CAVILI and QUIRINO CAVILI, petitioners,
vs. adduce evidence, and be heard and for that reason he is not entitled to notice.
HON. TEODORO N. FLORENDO, Presiding Judge, Branch XXXVI, (Rule 18, Rules of Court; Lim Toco v. Go Fay, 80 Phil. 166) However, "loss of
Regional Trial Court, 7th Judicial Region, CLARITA CAVILI, ULPIANO standing" must be understood to mean only the forfeiture of one's rights as a
CAVILI, ESTRELLA CAVILI, PLACIDA CAVILI, GREGORIA CAVILI, party litigant, contestant or legal adversary. A party in default loses his right to
FORTUNATA CAVILI, AMILITA CAVILI, APAD CAVILI, AQUILINA CAVILI, present his defense, control the proceedings, and examine or cross-examine
CRESENCIO CAVILI, ALMA CAVILI, ET AL., respondents. witnesses. He has no right to expect that his pleadings would be acted upon
by the court nor may he object to or refute evidence or motions filed against
No. L-57771 October 9, 1987 him. There is nothing in the rule, however, which contemplates a
disqualification to be a witness or a deponent in a case. Default does not make
QUIRINO CAVILI, PRIMITIVO, CAVILI, and PERFECTA CAVILI, him an incompetent.
petitioners,
vs.
HON. CIPRIANO VAMENTA, JR., as Presiding Judge, Branch III Court of Same; Same; Same; Same; Same; Same; As opposed to a party litigant, a
First Instance of Negros Oriental; ULPIANO CAVILI, CLARITA CAVILI,
witness takes no active part in the contest of rights between the parties; A party
ESTRELLA CAVILI, RAMONA TAKANG COSME TAKANG FABIAN
in default does not take part in the trial—As opposed to a party litigant, a
TAKANG, LEODEGARIO TAKANG ET AL., respondents.
witness is merely a beholder, a spectator or onlooker, called upon to testify to
what he has seen, heard, or observed. As such, he takes no active part in the
Remedial Law; Special Proceedings; Disqualification of witnesses;
contest of rights between the parties. Cast in the limited role of witness, a party
Interpretation; Absence of provision in the Rules disqualifying parties declared
in default cannot be considered as "taking part in the trial." He remains
in default from taking the witness stand for non-disqualified parties; The
suffering the effects of an order of default.
specific enumeration of disqualifted witnesses excludes the operation of
causes of disability other than those mentioned in the Rules.—There is no
provision of the Rules disqualifying parties declared in default from taking the
witness stand for non-disqualified parties. The law does not provide default as
Same; Same; Same; Same; Same; Same; Allowing one of the petitioners as a over by Judge Augusto S. Villarin, summons was issued to the three
witness in the case at bar will preserve the right of the other two petitioners to petitioners, all at Bayawan Negros Oriental which was the address indicated
secure attendance of witnesses and the production of evidence in their behalf; in the complaint.
To reject the presentation of testimony of the witness is to treat the other
petitioners as in default, and deprive them of vital evidence to support their After trying to effect service, the process server went back to the court with
claim.—Of greater concern or importance in allowing the presence of Perfecta the following return of service to Quirino and Primitivo Cavili not contacted,
Cavili as a witness in the case at bar, is the preservation of the right of according to Perfecta Cavili, subject persons is (sic) staying in Kabangkalan,
petitioners Quirino and Primitivo Cavili to secure the attendance of witnesses Negros Occidental."
and the production of evidence in their behalf. To reject Perfecta Cavili's
presentation of testimonial evidence would be to treat Primitivo and Quirino as Meanwhile, Atty. Jose P. Alamino filed a motion for extension to answer in
if they too were in default. There is no reason why the latter should also be behalf of the defendants, manifesting the representation of his client Perfecta
Cavili that she will inform her brothers Primitivo and Quirino about the case.
made to bear the consequences of Perfecta's omission. Moreover, we cannot
deprive Quirino and Primitivo of the only instrument of proof available to them,
as Perfecta alone has been in possession and administration of the property The defendants, however, failed to file their answer within the request period
and upon motion of the plaintiffs, the defendants were declared in default,
in question and more than anybody else she can provide vital evidence to
and on October 5, 1979, a judgment by default was promulgated by Judge
buttress their claim.
Augusto S. Villarin.
The records of the case, however, show that a Manifestation was filed by
PETITION to review the orders of the Regional Trial Court of Negros Atty. Jose P. Alamino informing the court that since he never met Primitivo
Oriental. and Quirino Cavili, who are residents of another province, he desisted from
further appearing in the case in their behalf.
The facts are stated in the opinion of the Court. On November 7, 1979, Atty. Jose P. Alamillo received a copy of the decision.
On December 7, 1979, he filed a motion for new trial in behalf of the
defendants on grounds of lack of jurisdiction and, with a meritorious defense
that the properties sought to be partitioned have already been the subject of
GUTIERREZ, JR., J.: a written partition agreement between the direct heirs of the late Bernardo
Cavili who are the predecessors of the parties in this case. In/an order dated
April 23, 1980, the court granted said motion.
This is a petition to review and set aside two orders of the then Court of First
Instance of Negros Oriental, namely: (1) the order dated October 11, 1985,
disqualifying Perfects Cavili dela Cruz as a witness in Civil Case No. 6880 The plaintiffs filed a motion for reconsideration of the order granting new trial
entitled "Clarita Cavili, et al. v. Perfecta Cavili, Quirino Cavili, and Primitivo and at the same time prayed that a writ of execution be issued but only in so
Cavili" and (2) the order dated November 26, 1985, refusing to reconsider the far as defendant Perfecta Cavili was concerned.
previous orders of disqualification and resetting the reception of evidence for
the defendants to December 19 and 20, 1985 with a warning that should In an order dated July 21, 1981, Judge Cipriano Vamenta of Branch III of the
defendants' witnesses fail to appear in court on said date, they will be Court of First Instance of Negros Oriental to whom the case had been
deemed to have waived their right to be witnesses in this case. assigned after a re-raffle, set aside the order of April 23, 1980 and directed
the execution of the October 5, 1979 decision without qualification ruling that
The private respondents filed Civil Case No. 6880 with the Court of First the petitioners' remedy should have been appeal rather than new trial.
Instance of Negros Oriental against herein petitioners for Partition,
Accounting, and Damages. After the case was raffled to Branch I presided
Their motion for reconsideration having been denied on August 11, 1981, the case shall be excluded; nor those who have been convicted of crime; nor any
defendants, now petitioners, brought the case to this Court through a petition person on account of his opinion on matters of religious belief.
for certiorari, G.R. No. 57771, entitled "Quirino Cavili, et al., Petitioners vs.
Hon. Cipriano Vamenta, et al., Respondents " The generosity with which the Rule allows people to testify is apparent.
Interest in the outcome of a case, conviction of a crime unless otherwise
On May 31, 1982, this Court rendered a decision, the dispositive portion of provided by law, and religious belief are not grounds for disqualification.
which reads:
Sections 19 and 20 of Rule 130 provide for specific disqualifications. Section
WHEREFORE, Our resolution dismissing the petition is 19 disqualifies those who are mentally incapacitated and children whose
hereby reconsidered; the petition is granted; and the order tender age or immaturity renders them incapable of being witnesses. Section
dated July 21, 1981, is set aside while that of April 23, 1980, 20 provides for disqualification based on conflicts of interest or on
is revived. (No special pronouncement as to costs. Rollo p. relationship. Section 21 provides for disqualifications based on privileged
21) communications. Section 15 of Rule 132 may not be a rule on disqualification
of witnesses but it states the grounds when a witness may be impeached by
Thereafter, the pre-trial and trial of Civil Case No. 6880 was scheduled on the party against whom he was called.
October 9, 10, and 11, 1985 before Branch XXXVI of the Regional Trial
Court, presided by respondent Judge Teodoro N. Florendo. The defendants, There is no provision of the Rules disqualifying parties declared in default
(now petitioners), presented Perfects Cavili dela Cruz as their first witness. from taking the witness stand for non-disqualified parties. The law does not
The respondents, through counsel moved for her disqualification as a provide default as an exception. The specific enumeration of disqualified
witness on the ground that having been declared in default, Perfects Cavili witnesses excludes the operation of causes of disability other than those
has lost her standing in court and she cannot be allowed to participate in all mentioned in the Rules. It is a maxim of recognized utility and merit in the
premise the even as a witness. The court, through the respondent judge, construction of statutes that an express exception, exemption, or saving
sustained the respondents' contention and disqualified her from testifying. clause excludes other exceptions. (In Re Estate of Enriquez, 29 Phil. 167) As
a general rule, where there are express exceptions these comprise the only
The petitioners, through counsel, moved for a reconsideration of the ruling. limitations on the operation of a statute and no other exception will be
implied. (Sutherland on Statutory Construction, Fourth Edition, Vol. 2A, p. 90)
The Rules should not be interpreted to include an exception not embodied
On November 26, 1985, the lower court issued an order denying
therein.
reconsideration of its Order dated October 11, 1985 disqualifying Perfecta
Cavili dela Cruz as a witness in Civil Case No. 6880.
The respondents, however, cite Section 2, Rule 18 on Defaults, to wit:
Hence, this petition.
Section 2. Effect of order of default. — Except as provided in section 9 of
Rule 13, a party declared in default shall not be entitled to notice of
Petitioner Perfecta Cavili's competence as a witness is put in issue by the
private respondents. subsequent proceedings nor to take part in the trial.
They advance the argument that to allow Perfecta Cavili to stand as witness
Section 18, Rule 130 of the Revised Rules of Court states who are qualified
would be to permit a party in default "to take part in the trial."
to be witnesses. It provides:
Section 18. Witnesses; their qualifications. — Except as provided in the next An explanation of the Rule is in order.
succeeding section, all persons who, having organs of sense, can perceive,
and perceiving, can make known their perception to others, may be Loss of standing in court is the consequence of an order of default. Thus, a
witnesses. Neither parties nor other persons interested in the outcome of a party declared in default is considered out of court and cannot appear
therein, adduce evidence, and be heard and for that reason he is not entitled
to notice. (Rule 18, Rules of Court; Lim Toco v. Go Fay, 80 Phil. 166)
However, "loss of pending" must be understood to mean only the forfeiture of
one's rights as a party litigant, contestant or legal adversary. A party in
default loses his right to present his defense, control the proceedings, and
examine or cross-examine witnesses. He has no right to expect that his
pleadings would be acted upon by the court nor may he object to or refute
evidence or motions filed against him. There is nothing in the rule, however,
which contemplates a disqualification to be a witness or a opponent in a
case. Default does not make him an incompetent.
As opposed to a party litigant, a witness is merely a beholder, a spectator or

onlooker, called upon to testify to what he has seen, heard, or observed. As
such, he takes no active part in the contest of rights between the parties.
Cast in the cited role of witness, a party in default cannot be considered as "
a part in the trial." He remains suffering the effects of an order of default.
A party in default may thus be cited as a witness by his co-defendants who

have the standing and the right to present evidence which the former may
provide. The incidental benefit giving the party in default the opportunity to
present evidence which may eventually redound to his advantage or bring
about a desired result, through his co-defendants, is of minor consequence.
Of greater concern or importance in allowing the presence of Perfecta Cavili

as a witness in the case at bar, is the preservation of the right of petitioners
Quirino and Primitivo Cavili to secure the attendance of witnesses and the
production of evidence in their behalf. To reject Perfects Cavili's presentation
of testimonial evidence would be to treat Primitivo and Quirino, as if they too
were in default. There is no reason why the latter should also be made to
bear the consequences of Perfecta's omission. Moreover, we cannot deprive
Quirino and Primitivo of the only instrument of proof available to them, as
Perfecta alone has been in possession and administration of the claim.
WHEREFORE, in view of the foregoing, the petition is hereby GRANTED.

The order of the respondent court disqualifying. Perfects Cavili dela Cruz as
a witness in Civil Case No. 6880 is hereby SET ASIDE. The case is
remanded to the court a quo for Wither proceedings. The temporary
restraining order issued on January 6, 1986 is LIFTED.
SO ORDERED.
Fernan (Chairman), Feliciano, Bidin and Cortes, JJ., concur.

G.R. No. L-53880 March 17, 1994
Same; Same; Art. 103, Civil Code now Art. 58, Family Code; Legal Separation
ENRICO L. PACETE, CLARITA DE LA CONCEPCION, EMELDA C.
PACETE, EVELINA C. PACETE and EDUARDO C. PACETE, petitioners, must be tried before six months have elapsed since the filing of the petition to
vs. provide the parties a “cooling-off” period.—Article 103 of the Civil Code, now
HON. GLICERIO V. CARRIAGA, JR. and CONCEPCION (CONCHITA) Article 58 of the Family Code, further mandates that an action for legal
ALANIS PACETE, respondents. separation must “in no case be tried before six months shall have elapsed
since the filing of the petition,” obviously in order to provide the parties a
Juan G. Sibug and Rodolfo B. Quiachon for petitioners. “cooling-off’ period. In this interim, the court should take steps toward getting
the parties to reconcile.
Julio F. Andres, Jr. for private respondent.
Remedial Law; Petition for Certiorari; Petition for certiorari is allowed when the Same; Same; Remedial Law; Rule 18, Rules of Court; No defaults in action for
default order is improperly declared, or even when it is properly declared where annulments of marriage or for legal separation.—The significance of the above
grave abuse of discretion attended such declaration.—Under ordinary substantive provisions of the law is further underscored by the inclusion of the
circumstances, the petition would have outrightly been dismissed, for, as also following provision in Rule 18 of the Rules of Court: “SEC. 6. No defaults in
pointed out by private respondents, the proper remedy of petitioners should actions for annulments of marriage or for legal separation.—If the defendant
have instead been either to appeal from the judgment by default or to file a in an action for annulment of marriage or for legal separation fails to answer,
petition for relief from judgment. This rule, however, is not inflexible; a petition the court shall order the prosecuting attorney to investigate whether or not a
for certiorari is allowed when the default order is improperly declared, or even collusion between the parties exists, and if there is no collusion, to intervene
when it is properly declared, where grave abuse of discretion attended such for the State in order to see to it that the evidence submitted is not fabricated.”
declaration. In these exceptional instances, the special civil action of certiorari
to declare the nullity of a judgment by default is available. In the case at bench,
the default order unquestionably is not legally sanctioned. PETITION for certiorari to annul a decision of the then Court of First Instance
of Cotabato, Br. 1. Carriaga, Jr., J.
Civil Law; Marriage; Article 101 of the Civil Code reflects public policy on
marriage that it is a social institution in which the state is vitally interested, so The facts are stated in the opinion of the Court.
that its continuation can not be made to depend upon the parties
themselves.—Article 101 reflects the public policy on marriages, and it should Juan G. Sibug and Rodolfo B. Quiachon for petitioners.
easily explain the mandatory tenor of the law. In Brown v. Yambao, the Court
Julio F. Andres, Jr. for private respondent.
has observed: “The policy of Article 101 of the new Civil Code, calling for the
intervention of the state attorneys in case of uncontested proceedings for legal
separation (and of annulment of marriages, under Article 88), is to emphasize
that marriage is more than a mere contract; that it is a social institution in which VITUG, J.:
the state is vitally interested, so that its continuation or interruption can not be
made to depend upon the parties themselves (Civil Code, Article 52; Adong The issue in this petition for certiorari is whether or not the Court of First
vs. Cheong Gee, 43 Phil. 43; Ramirez v. Gmur, 42 Phil. 855; Goitia v. Campos, Instance (now Regional Trial Court) of Cotabato, Branch I, in Cotabato City,
35 Phil. 252). It is consonant with this policy that the inquiry by the Fiscal gravely abused its discretion in denying petitioners' motion for extension of
should be allowed to focus upon any relevant matter that may indicate whether time to file their answer in Civil Case No. 2518, in declaring petitioners in
the proceedings for separation or annulment are fully justified or not.” default and in rendering its decision of 17 March 1980 which, among other
things, decreed the legal separation of petitioner Enrico L. Pacete and private WHEREFORE, order is hereby issued ordering:
respondent Concepcion Alanis and held to be null and void ab initio the
marriage of Enrico L. Pacete to Clarita de la Concepcion. 1. The issuance of a Decree of Legal Separation of the
marriage between, the plaintiff, Concepcion (Conchita)
On 29 October 1979, Concepcion Alanis filed with the court below a Alanis Pacete and the herein defendants, Enrico L. Pacete,
complaint for the declaration of nullity of the marriage between her erstwhile in accordance with the Philippine laws and with
husband Enrico L. Pacete and one Clarita de la Concepcion, as well as for consequences, as provided for by our laws;
legal separation (between Alanis and Pacete), accounting and separation of
property. In her complaint, she averred that she was married to Pacete on 30 2. That the following properties are hereby declared as the
April 1938 before the Justice of the Peace of Cotabato, Cotabato; that they conjugal properties of the partnership of the plaintiff,
had a child named Consuelo who was born on 11 March 1943; that Pacete Concepcion (Conchita) Alanis Pacete and the defendant,
subsequently contracted (in 1948) a second marriage with Clarita de la Enrico L. Pacete, half and half, to wit:
Concepcion in Kidapawan, North Cotabato; that she learned of such
marriage only on 01 August 1979; that during her marriage to Pacete, the
1. The parcel of land covered by TCT No. V-815 which is a
latter acquired vast property consisting of large tracts of land, fishponds and parcel of land situated in the barrio of Langcong, Municipality
several motor vehicles; that he fraudulently placed the several pieces of of Matanog (previously of Parang), province of Maguindanao
property either in his name and Clarita or in the names of his children with
(previously of Cotabato province) with an area of 45,265
Clarita and other "dummies;" that Pacete ignored overtures for an amicable
square meters registered in the name of Enrico Pacete,
settlement; and that reconciliation between her and Pacete was impossible
Filipino, of legal age, married to Conchita Alanis as shown in
since he evidently preferred to continue living with Clarita. Exhibits "B" and "B-1" for the plaintiff.
The defendants were each served with summons on 15 November 1979.

2. A parcel of land covered by Transfer Certificate of Title
They filed a motion for an extension of twenty (20) days from 30 November
No. T-20442, with an area of 538 square meters and
1979 within which to file an answer. The court granted the motion. On 18
covered by Tax Declaration No. 2650 (74) in the name of
December 1979, appearing through a new counsel, the defendants filed a Enrico Pacete, situated in the Poblacion of Kidapawan, North
second motion for an extension of another thirty (30) days from 20 December Cotabato, together with all its improvements, which parcel of
1979. On 07 January 1980, the lower court granted the motion but only for
land, as shown by Exhibits "K-1" was acquired by way of
twenty (20) days to be counted from 20 December 1979 or until 09 January
absolute deed of sale executed by Amrosio Mondog on
1980. The Order of the court was mailed to defendants' counsel on 11
January 14, 1965.
January 1980. Likely still unaware of the court order, the defendants, on 05
February 1980, again filed another motion (dated 18 January 1980) for an
extension of "fifteen (15) days counted from the expiration of the 30-day 3. A parcel of land covered by Transfer Certificate of Title
period previously sought" within which to file an answer. The following day, or No. T-20424 and covered by Tax Declaration No. 803 (74),
on 06 February 1980, the court denied this last motion on the ground that it with an area of 5.1670 hectares, more or less, as shown by
was "filed after the original period given . . . as first extension had expired."1 Exhibit "R", the same was registered in the name of Enrico
Pacete and the same was acquired by Enrico Pacete last
February 17, 1967 from Ambag Ampoy, as shown by Exhibit
The plaintiff thereupon filed a motion to declare the defendants in default, "R-1", situated at Musan, Kidapawan, North Cotabato.
which the court forthwith granted. The plaintiff was then directed to present
her evidence.2 The court received plaintiff's evidence during the hearings
held on 15, 20, 21 and 22 February 1980. 4. A parcel of land situated at Lanao, Kidapawan, North
Cotabato, with an area of 5.0567 hectares, covered by Tax
Declaration No. 4332 (74), as shown by Exhibit "S", and
On 17 March 1980, the court3 promulgated the herein questioned decision,
registered in the name of Enrico Pacete.
disposing of the case, thus —
5. A parcel of land covered by Transfer Certificate of Title Matalam, North Cotabato and is also covered by Tax
No. T-9750, situated at Lika, Mlang, North Cotabato, with an Declaration No. 5745 (74) in the name of Enrico Pacete, as
area of 4.9841 hectares and the same is covered by Tax shown on Exhibit "O" and which Enrico Pacete acquired last
Declaration No. 803 (74) and registered in the name of December 31, 1963 from Eliseo Pugni, as shown on Exhibit
Enrico Pacete and which land was acquired by Enrico "0-1".
Pacete from Salvador Pacete on September 24, 1962, as
shown by Exhibit "Q-1". 3. Ordering the Cancellation of Original Certificate of Title
No. P-34243 covering Lot No. 1066, issued in the name of
6. A parcel of land covered by Transfer Certificate of Title Evelina Pacete, situated at Kiab, Matalam, North Cotabato,
No. T-9944, with an area of 9.9566 and also covered by Tax and ordering the registration of the same in the joint name of
Declaration No. 8608 (74) and registered in the name of the Concepcion (Conchita) Alanis Pacete and Enrico L. Pacete
defendant Enrico L. Pacete which Enrico L. Pacete acquired as their conjugal property, with address on the part of
from Sancho Balingcos last October 22, 1962, as shown by Concepcion (Conchita) Alanis Pacete at Parang,
Exhibit "L-1" and which parcel of land is situated at (Kialab), Maguindanao and on the part of Enrico L. Pacete at
Kiab, Matalam, North Cotabato. Kidapawan, North Cotabato.
7. A parcel of land covered by Transfer Certificate of Title 4. Ordering likewise the cancellation of Original Certificate of
No. T-9227, situated at Kiab, Matalam, North Cotabato, with Title No. V-20101, covering Lot No. 77, in the name of
an area of 12.04339 hectares, more or less, and also Eduardo C. Pacete, situated at New Lawaan, Mlang, North
covered by Tax Declaration No. 8607 (74) both in the name Cotabato, and the issuance of a new Transfer Certificate of
of the defendant Enrico L. Pacete which he acquired last Title in the joint name of (half and half) Concepcion
October 15, 1962 from Minda Bernardino, as shown by (Conchita) Alanis Pacete and Enrico L. Pacete.
Exhibit "M-1".
5. Ordering likewise the cancellation of Original Certificate of
8. A parcel of land covered by Transfer Certificate of Title Title No. P-29890, covering Lot 1068, situated at Kiab,
No. T-9228, situated at Kiab, Matalam, North Cotabato, with Matalam, North Cotabato, with an area of 12.1031 hectares,
an area of 10.8908 hectares, registered in the name of in the name of Emelda C. Pacete and the issuance of a new
Enrico Pacete and also covered by Tax Declaration No. Transfer Certificate of Title in the joint name (half and half) of
5781 (74) in the name of Enrico Pacete and which parcel of Concepcion (Conchita) Alanis Pacete and Enrico L. Pacete;
land he acquired last September 25, 1962 from Conchita and declaring that the fishpond situated at Barrio Tumanan,
dela Torre, as shown by Exhibit "P-1". Bislig, Surigao Del Sur, with an area of 48 hectares and
covered by Fishpond Lease Agreement of Emelda C.
9. A parcel of land covered by Transfer Certificate of Title Pacete, dated July 29, 1977 be cancelled and in lieu thereof,
No. T-10301, situated at Linao, Matalam, North Cotabato, the joint name of Concepcion (Conchita) Alanis Pacete and
with an area of 7.2547 hectares, registered in the name of her husband, Enrico L. Pacete, be registered as their joint
Enrico Pacete and also covered by Tax Declaration No. property, including the 50 hectares fishpond situated in the
8716 (74) also in the name of Enrico Pacete which Enrico same place, Barrio Timanan, Bislig, Surigao del Sur.
Pacete acquired from Agustin Bijo last July 16, 1963, as
shown by Exhibit "N-1". 6. Ordering the following motor vehicles to be the joint
properties of the conjugal partnership of Concepcion
10. A parcel of land covered by Transfer Certificate of Title (Conchita) Alanis Pacete and Enrico L. Pacete, viz:
No. 12728 in the name of the defendant, Enrico L. Pacete,
with an area of 10.9006 hectares, situated at Linao,
a. Motor vehicle with Plate No. T-RG-783; Make, Dodge; remedy of petitioners should have instead been either to appeal from the
Motor No. T137-20561; Chassis No. 83920393, and Type, judgment by default or to file a petition for relief from judgment.5 This rule,
Mcarrier; however, is not inflexible; a petition for certiorari is allowed when the default
order is improperly declared, or even when it is properly declared, where
b. Motor vehicle with Plate No. T-RG-784; Make, Dodge; grave abuse of discretion attended such declaration.6 In these exceptional
Motor No. T214-229547; Chassis No. 10D-1302-C; and instances, the special civil action of certiorari to declare the nullity of a
Type, Mcarrier; judgment by default is available.7 In the case at bench, the default order
unquestionably is not legally sanctioned. The Civil Code provides:
c. Motor vehicle with Plate No. J-PR-818; Make, Ford; Motor
No. GRW-116188; Chassis No. HOCC-GPW-1161-88-C; Art. 101. No decree of legal separation shall be promulgated
Type, Jeep; upon a stipulation of facts or by confession of judgment.
d. Motor vehicle with Plate No. TH-5J-583; Make, Ford: In case of non-appearance of the defendant, the court shall
Motor No. F70MU5-11111; Chassis No. HOCC-GPW- order the prosecuting attorney to inquire whether or not a
1161188-G; Type, Stake; collusion between the parties exists. If there is no collusion,
the prosecuting attorney shall intervene for the State in order
to take care that the evidence for the plaintiff is not
e. Motor vehicle with Plate No. TH-5J-584; Make, Hino;
fabricated.
Motor No. ED300-45758; Chassis No. KB222-22044; Type,
Stake; and
The provision has been taken from Article 30 of the California Civil Code,8
and it is, in substance, reproduced in Article 60 of the Family Code.9
f. Motor vehicle with Plate No. TH-5J-585; Make, Ford: Motor
No. LTC-780-Dv; Chassis No. 10F-13582-K; Type, Stake.
Article 101 reflects the public policy on marriages, and it should easily
explain the mandatory tenor of the law. In Brown v. Yambao, 10 the Court
7. Ordering the defendant Enrico L. Pacete to pay the
has observed:
plaintiff the sum of P46,950.00 which is the share of the
plaintiff in the unaccounted income of the ricemill and corn
sheller for three years from 1971 to 1973. The policy of Article 101 of the new Civil Code, calling for the
intervention of the state attorneys in case of uncontested
8. Ordering the defendant, Enrico L. Pacete, to reimburse proceedings for legal separation (and of annulment of
marriages, under Article 88), is to emphasize that marriage is
the plaintiff the monetary equipment of 30% of whether the
more than a mere contract; that it is a social institution in
plaintiff has recovered as attorney's fees;
which the state is vitally interested, so that its continuation or
interruption can not be made to depend upon the parties
9. Declaring the subsequent marriage between defendant themselves (Civil Code, Article 52; Adong vs. Cheong Gee,
Enrico L. Pacete and Clarita de la Concepcion to be void ab 43 Phil. 43; Ramirez v. Gmur, 42 Phil. 855; Goitia v.
initio; and Campos, 35 Phil. 252). It is consonant with this policy that
the inquiry by the Fiscal should be allowed to focus upon any
10. Ordering the defendants to pay the costs of this suit.4 relevant matter that may indicate whether the proceedings
for separation or annulment are fully justified or not.
Hence, the instant special civil action of certiorari.
Article 103 of the Civil Code, now Article 58 of the Family Code, further
Under ordinary circumstances, the petition would have outrightly been mandates that an action for legal separation must "in no case be tried before
dismissed, for, as also pointed out by private respondents, the proper six months shall have elapsed since the filing of the petition," obviously in
order to provide the parties a "cooling-off" period. In this interim, the court
should take steps toward getting the parties to reconcile.
The significance of the above substantive provisions of the law is further

underscored by the inclusion of the following provision in Rule 18 of the
Rules of Court:
Sec. 6. No defaults in actions for annulments of marriage or

for legal separation. — If the defendant in an action for
annulment 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.
The special prescriptions on actions that can put the integrity of marriage to
possible jeopardy are impelled by no less than the State's interest in the
marriage relation and its avowed intention not to leave the matter within the
exclusive domain and the vagaries of the parties to alone dictate.
It is clear that the petitioner did, in fact, specifically pray for legal separation.
11 That other remedies, whether principal or incidental, have likewise been
sought in the same action cannot dispense, nor excuse compliance, with any
of the statutory requirements aforequoted.
WHEREFORE, the petition for certiorari is hereby GRANTED and the

proceedings below, including the Decision of 17 March 1980 appealed from,
are NULLIFIED and SET ASIDE. No costs.
SO ORDERED.
Feliciano, Bidin, Romero and Melo, JJ., concur.

G.R. No. 101789. April 28, 1993. hearing as required was due to excusable neglect, much less to fraud, accident
or mistake.
BHAGWAN RAMNANI, petitioner,
vs.
COURT OF APPEALS, HON. BUENAVENTURA J. GUERRERO, as Same; Same; Certiorari; The special civil action for certiorari is a remedy
Regional Trial Court Judge of Makati, Metro Manila, Branch 133, SPOUSES
designed for the correction of errors of jurisdiction and not errors of
CENON G. DIZON and JULIETTE B. DIZON, respondents.
judgment.—As we held in Pure Foods Corporation v. NLRC: It must
emphatically be reiterated, since so often is it overlooked, that the special civil
Remedial Law; Civil Procedure; Default; Remedies available to a defendant
action for certiorari is a remedy designed for the correction of errors of
declared in default.—The basic rule is found in Section 2, Rule 20, viz: “A party
jurisdiction and not errors of judgment. The reason for the rule is simple. When
who fails to appear at a pre-trial conference may be non-suited or considered
a court exercises its jurisdiction, an error committed while so engaged does
as in default.” As held in Lina v. Court of Appeals, the remedies available to a
not deprive it of the jurisdiction being exercised when the error is committed. If
defendant in the regional trial court who has been declared in default are: a)
it did, every error committed by a court would deprive it of its jurisdiction and
The defendant in default may, at any time after discovery thereof and before
every erroneous judgment would be a void judgment. This cannot be allowed.
judgment, file a motion, under oath, to set aside the order of default on the
The administration of justice would not survive such a rule. Consequently, an
ground that his failure to answer was due to fraud, accident, mistake or
error of judgment that the court may commit in the exercise of its jurisdiction is
excusable neglect, and that he has a meritorious defense; (Sec. 3, Rule 18) b)
not correctible through the original civil action of certiorari.
If the judgment has already been rendered when the defendant discovered the
default, but before the same has become final and executory, he may file a
motion for new trial under Section 1(a) of Rule 37; c) If the defendant
discovered the default after the judgment has become final and executory, he PETITION for review of the decision of the Court of Appeals.
may file a petition for relief under Section 2 of Rule 38; and d) He may also
appeal from the judgment rendered against him as contrary to the evidence or
to the law, even if no petition to set aside the order of default has been The facts are stated in the opinion of the Court.
presented by him. (Sec. 2, Rule 41).
Bernardo D. Calderon for petitioner.
Zosimo Cuasay for private respondent.

Same; Same; Same; Indispensable requirement for the setting aside of a
judgment of default or the order of default; A satisfactory showing by the
movant of the existence of fraud, accident, mistake or excusable neglect is an
indispensable requirement for the setting aside of a judgment of default or the DECISION
order of default.—A satisfactory showing by the movant of the existence of
fraud, accident, mistake or excusable neglect is an indispensable requirement CRUZ, J p:
for the setting aside of a judgment of default or the order of default. After going
over the pleadings of the parties and the decision of the respondent court, we On March 13, 1990, the spouses Juliette Dizon and Cenen Dizon filed a
find that the motion to lift the order of default was properly denied for non- complaint in the Regional Trial Court of Makati against the spouses
compliance with this requirement. The defendants were less than Josephine Anne Ramnani and Bhagwan Ramnani for the collection of a sum
conscientious in defending themselves and protecting their rights before the of money representing the alleged unremitted value of jewelry received by
trial court. They did not pay proper attention and respect to its directive. The Josephine from Juliette on consignment basis.
petitioner has not shown that his and his wife’s failure to attend the pre-trial
Josephine Ramnani submitted an answer with counterclaim 2 in which she In a decision dated May 10, 1991, the Court of Appeals dismissed the
alleged inter alia: petition, holding that certiorari was not the proper remedy. 9
(a) That although she did receive pieces of jewelry worth P934,347.00 from The respondent court said:
Dizon, the latter had likewise received from her jewelries worth
P1,671,842,00, including cash and unpaid checks in the amount of Petitioners alleged that the respondent court erred and committed grave
P159,742.50; abuse of discretion and/or acted in excess of jurisdiction in assigning its
Branch Clerk of Court as the hearing commissioner for the purpose of the ex
(b) That she paid Dizon P50,000; and parte reception of plaintiffs' evidence (par. 19, Petition); that the questioned
Decision failed to specify whether defendants are solidarily or only jointly
(c) That Dizon still owes her P787,495.00; liable (par. 20, Petition); and that petitioner had a valid and meritorious
defense (par. 21, Petition). These are matters that could very well be
ventilated in an ordinary appeal. It should be stressed that the writ of
The trial court set the case for pre-trial on August 14, 1990, 3 but the
Ramnanis did not appear. Consequently, they were declared in default. 4 On certiorari issues for the correction of errors of jurisdiction only or grave abuse
September 12, 1990, they filed a motion to lift the order of default, but this of discretion amounting to lack or excess of jurisdiction. It cannot be legally
used for any other purpose (Silverio vs. Court of Appeals, 141 SCRA 527).
was denied on November 20, 1990.
Mere error of judgment cannot be a proper subject of the special civil action
for certiorari (Zapata vs. NLRC, 175 SCRA 56). Further, it is a settled rule
On October 26, 1990, conformably to the default order, evidence of the Dizon that certiorari cannot be made a substitute for an perform the function of an
spouses was received ex parte. On January 28, 1991, Judge Buenaventura appeal (People vs. Cuaresma, 172 SCRA 415).
J. Guerrero rendered judgment against the Ramnanis, holding them liable to
the plaintiffs in the amounts of P884,347.00, representing the principal
The petitioner has come to this Court to challenge that decision. He avers
obligation plus legal interest thereon from March 13, 1990, until fully paid;
that the Court of Appeals erred in upholding the refusal of the trial court to set
P100,000.00 as moral damages; and P20,000.00 as exemplary damages.
They were also required to pay P50,000.00 as attorney's fees, and the costs aside the order of default and the default judgment thereafter issued.
of the suit.
The basic rule is found in Section 2, Rule 20, viz: "A party who fails to appear
at a pre-trial conference may be non-suited or considered as in default."
The Ramnanis filed a motion for reconsideration on the ground that a
"personal obligation contracted by the wife without the consent of the
husband (was) being made enforceable against the spouses' conjugal As held in Lina v. Court of Appeals, 10 the remedies available to a defendant
partnership despite absence of any allegation and proof that the same in the regional trial court who has been declared in default are:
redounded to the benefit of the family as required by Article 121 of the Family
Code." 7 The motion was denied on April 11, 1991. a) The defendant in default may, at any time after discovery thereof and
before judgment, file a motion, under oath, to set aside the order of default
On April 29, 1991, Bhagwan Ramnani filed a petition for certiorari before the on the ground that his failure to answer was due to fraud, accident, mistake
respondent Court of Appeals imputing error to the trial court: or excusable neglect, and that he has a meritorious defense; (Sec. 3, Rule
18)
(1) in denying the motion to lift order declaring petitioner as in default despite
a clear showing of a meritorious defense; b) If the judgment has already been rendered when the defendant discovered
the default, but before the same has become final and executory, he may file
a motion for new trial under Section 1(a) of Rule 37;
(2) in not considering petitioner's reason for failure to attend pre-trial as
excusable neglect.
c) If the defendant discovered the default after the judgment has become meritorious defense must concur with the satisfactory reason for the non-
final and executory, he may file a petition for relief under Section 2 of Rule appearance of the defaulted party. There is no such reason in this case.
38; and
The appropriate remedy is an ordinary appeal under Section 2 of Rule 41 of
d) He may also appeal from the judgment rendered against him as contrary the Rules of Court providing in part as follows:
to the evidence or to the law, even if no petition to set aside the order of
default has been presented by him. (Sec. 2, Rule 41) A party who has been declared in default may likewise appeal from the
judgment rendered against him as contrary to the evidence or to the law,
The first remedy was adopted by the petitioner but his motion to lift the order even if no petition for relief to set aside the order of default has been
of default was denied. According to the trial court: presented by him in accordance with Rule 38.
Defendants' non-appearance is inexcusable. It is unbelievable their former In questioning the dismissal of its petition by the respondent court, the
lawyer did not explain to them the mandatory character of their appearance. petitioner invokes the case of Pioneer Insurance and Surety Corporation v.
Their invocation of the deteriorating health of defendant Josephine Hontanosas, 11 where the Court sustained the challenge to an order of
necessitating her trip abroad for appropriate medical treatment, is unavailing. default in a petition for certiorari rather than in an ordinary appeal, which was
There is no medical certificate to attest such illness. Besides, at the time of held as not an adequate remedy.
the hearing of the motion on October 19, 1990, counsel for the defendants
admitted that Josephine had not yet arrived from the States, despite their That case is not applicable to the present petition. Certiorari was allowed in
averment in their motion she would "only be back late September or early that case because the petitioner was illegally declared in default. The Court
October of this year." This only indicates her light regard of her duty to held that, first, the petitioner could not be compelled to attend an
appear in court. Moreover, the other defendant Bhagwan Ramnani did not unnecessary second pre-trial after it had indicated at the earlier pre-trial that
submit any other plausible explanation for his absence in the pre-trial. there was no possibility of an amicable settlement; second, the pre-trial was
premature because the last pleading had not yet been filed at the time; and
A satisfactory showing by the movant of the existence of fraud, accident, third, there was insufficient notice of the pre-trial to the petitioner. In the case
mistake or excusable neglect is an indispensable requirement for the setting at bar, no such irregularities in the pre-trial have been alleged by the
aside of a judgment of default or the order of default. After going over the petitioner.
pleadings of the parties and the decision of the respondent court, we find that
the motion to lift the order of default was properly denied for non-compliance As we held in Pure Foods Corporation v. NLRC:
with this requirement.
It must emphatically be reiterated, since so often is it overlooked, that the
The defendants were less than conscientious in defending themselves and special civil action for certiorari is a remedy designed for the correction of
protecting their rights before the trial court. They did not pay proper attention errors of jurisdiction and not errors of judgment. The reason for the rule is
and respect to its directive. The petitioner has not shown that his and his simple. When a court exercises its jurisdiction, an error committed while so
wife's failure to attend the pre-trial hearing as required was due to excusable engaged does not deprive it of the jurisdiction being exercised when the error
neglect, much less to fraud, accident or mistake. is committed. If it did, every error committed by a court would deprive it of its
jurisdiction and every erroneous judgment would be a void judgment. This
The petitioner insists, however, that they had a meritorious defense which cannot be allowed. The administration of justice would not survive such a
the trial court should not have disregarded. A meritorious defense is only one rule. Consequently, an error of judgment that the court may commit in the
of the two conditions. Even if it be assumed for the sake of argument that the exercise of its jurisdiction is not correctible through the original civil action of
private respondents did owe Josephine Ramnani P900,000, as alleged in the certiorari.
counterclaim, that circumstance alone is not sufficient to justify the lifting of
the order of default and the default judgment. The obvious reason is that a Even on the supposition that certiorari was an appropriate remedy, the
petition would still fail because it has not been clearly shown that the trial
court committed grave abuse of discretion in refusing to set aside the default
order and the default judgment. We have held in many cases, including
Pahilanga v. Luna, 13 that:
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 an abuse of discretion, on the part of the court to refuse
to set aside its order of default and 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.
The above doctrine is applicable to the inexcusable neglect of the herein

petitioner and his wife to appear at the pre-trial hearing duly scheduled and
of which they were properly notified.
We must, however, moderate the award of damages by the trial court as we

feel it is rather harsh upon the petitioner. In the exercise of our discretion, we
hereby reduce the moral damages to P20,000.00 and the attorney's fees to
P10,000.00, and disallow the exemplary damages. The rest of the award is
approved.
WHEREFORE, the challenged decision is AFFIRMED as above modified,

with costs against the petitioner. It is so ordered.
Griño-Aquino, Bellosillo and Quiason, JJ ., concur.

G.R. No. 75919 May 7, 1987 Consequently, the order admitting the amended complaint and all subsequent
proceedings and actions taken by the trial court are null and void.
MANCHESTER DEVELOPMENT CORPORATION, ET AL., petitioners,
vs.
COURT OF APPEALS, CITY LAND DEVELOPMENT CORPORATION, Same; Same; Same; Same; Basis of assessment of the docket fee should be
STEPHEN ROXAS, ANDREW LUISON, GRACE LUISON and JOSE DE
the amount of damages in the original complaint and not in the amended
MAISIP, respondents.
complaint.—The Court of Appeals therefore, aptly ruled in the present case
that the basis of assessment of the docket fee should be the amount of
Tanjuatco, Oreta and Tanjuatco for petitioners.
damages sought in the original complaint and not in the amended complaint.
Pecabar Law Offices for private respondents.
RESOLUTION Same; Same; Same; Same; Attorneys; Court frowns at practice of counsel who
filed the original complaint of omitting any specification of the amount of
damages in the prayer although the amount of over P78 million is alleged in
Remedial Law; Civil Procedure; Complaint; Filing Fees; Environmental facts of
Magaspi vs. Ramolete case, different from case at bar.—ln the Magaspi case, the body of the complaint which is clearly intended to thwart payment of correct
filing fees.—The Court cannot close this case without making the observation
the action was considered not only one for recovery of ownership but also for
damages, so that the filing fee for the damages should be the basis of that it frowns at the practice of counsel who filed the original complaint in this
case of omitting any specification of the amount of damages in the prayer
assessment. Although the payment of the docketing fee of P60.00 was found
to be insufficient, nevertheless, it was held that since the payment was the although the amount of over P 78 million is alleged in the body of the complaint.
This is clearly intended for no other purpose than to evade the payment of the
result of an "honest difference of opinion as to the correct amount to be paid
correct filing fees if not to mislead the docket clerk in the assessment of the
as docket fee" the court "had acquired jurisdiction over the case and the
proceedings thereafter had were proper and regular." Hence, as the amended filing fee. This fraudulent practice was compounded when, even as this Court
had taken cognizance of the anomaly and ordered an investigation, petitioner
complaint superseded the original complaint, the allegations of damages in the
amended complaint should be the basis of the computation of the filing fee. In through another counsel filed an amended complaint, deleting all mention of
the amount of damages being asked for in the body of the complaint. It was
the present case no such honest difference of opinion was possible as the
only when in obedience to the order of this Court of October 18, 1985, the trial
allegations of the complaint, the designation and the prayer show clearly that
it is an action for damages and specific performance. The docketing fee should court directed that the amount of damages be specified in the amended
complaint, that petitioners' counsel wrote the damages sought in the much
be assessed by considering the amount of damages as alleged in the original
complaint. reduced amount of P10,000,000.00 in the body of the complaint but not in the
prayer thereof. The design to avoid payment of the required docket f ee is
obvious.
Same; Same; Same; Same; Case is deemed filed only upon payment of the
docket fee regardless of actual date of filing in court.—As reiterated in the
Same; Same; Same; Same; Same; Warning of Supreme Court that drastic
Magaspi case the rule is well-settled "that a case is deemed filed only upon
action will be taken upon a repetition of the unethical practice.—The Court
payment of the docket fee regardless of the actual date of filing in court." Thus,
serves warning that it will take drastic action upon a repetition of this unethical
in the present case the trial court did not acquire jurisdiction over the case by
the payment of only P410.00 as docket fee. Neither can the amendment of the practice.
complaint thereby vest jurisdiction upon the Court. For all legal purposes there
is no such original complaint that was duly filed which could be amended.
Same; Same; Same; Same; Requirement that henceforth all complaints, motion to refer the case to the Court en banc is granted but the motion to set
petitions, answers and other similar pleadings should specify the amount of the case for oral argument is denied.
damages prayed for not only in the body of the pleading but also in the prayer,
and that the damages should be considered in the assessment of the filing Petitioners in support of their contention that the filing fee must be assessed
fees; Any pleading that fails to comply with the requirement shall not be on the basis of the amended complaint cite the case of Magaspi vs.
accepted or admitted.—To put a stop to this irregularity, henceforth all Ramolete. 1 They contend that the Court of Appeals erred in that the filing
complaints, petitions, answers and other similar pleadings should specify the fee should be levied by considering the amount of damages sought in the
amount of damages being prayed for not only in the body of the pleading but original complaint.
also in the prayer, and said damages shall be considered in the assessment
of the filing fees in any case. Any pleading that fails to comply with this The environmental facts of said case differ from the present in that —
requirement shall not be accepted nor admitted, or shall otherwise be
expunged from the record. 1. The Magaspi case was an action for recovery of ownership and
possession of a parcel of land with damages.2 While the present case is an
action for torts and damages and specific performance with prayer for
temporary restraining order, etc.3
Same; Same; Same; Same; Jurisdiction; Court acquires jurisdiction over any
case only upon payment of the prescribed docket fee; An amendment of the 2. In the Magaspi case, the prayer in the complaint seeks not only the
complaint or similar pleading will not vest jurisdiction in the court, much less annulment of title of the defendant to the property, the declaration of
payment of the docket fee based on amount in the amended pleading Magaspi ownership and delivery of possession thereof to plaintiffs but also asks for
vs. Ramolete case which is inconsistent with this decision, is reversed.—The the payment of actual moral, exemplary damages and attorney's fees arising
Court acquires jurisdiction over any case only upon the payment of the therefrom in the amounts specified therein. 4 However, in the present case,
prescribed docket fee. An amendment of the complaint or similar pleading will the prayer is for the issuance of a writ of preliminary prohibitory injunction
not thereby vest jurisdiction in the Court, much less the payment of the docket during the pendency of the action against the defendants' announced
fee based on the amounts sought in the amended pleading. The ruling in the forfeiture of the sum of P3 Million paid by the plaintiffs for the property in
Magaspi case in so far as it is inconsistent with this pronouncement is question, to attach such property of defendants that maybe sufficient to
overturned and reversed. satisfy any judgment that maybe rendered, and after hearing, to order
defendants to execute a contract of purchase and sale of the subject
property and annul defendants' illegal forfeiture of the money of plaintiff,
ordering defendants jointly and severally to pay plaintiff actual, compensatory
PETITION to review the decision of the Court of Appeals, and exemplary damages as well as 25% of said amounts as maybe proved
during the trial as attorney's fees and declaring the tender of payment of the
The facts are stated in the resolution of the Court. purchase price of plaintiff valid and producing the effect of payment and to
Tanjuatco, Oreta and Tanjuatco for petitioners. make the injunction permanent. The amount of damages sought is not
specified in the prayer although the body of the complaint alleges the total
Pecabar Law Offices for private respondents. amount of over P78 Million as damages suffered by plaintiff.5
3. Upon the filing of the complaint there was an honest difference of opinion
as to the nature of the action in the Magaspi case. The complaint was
GANCAYCO, J.: considered as primarily an action for recovery of ownership and possession
of a parcel of land. The damages stated were treated as merely to the main
Acting on the motion for reconsideration of the resolution of the Second cause of action. Thus, the docket fee of only P60.00 and P10.00 for the
Division of January 28,1987 and another motion to refer the case to and to sheriff's fee were paid. 6
be heard in oral argument by the Court En Banc filed by petitioners, the
In the present case there can be no such honest difference of opinion. As allegations of damages in the amended complaint should be the basis of the
maybe gleaned from the allegations of the complaint as well as the computation of the filing fee. 11
designation thereof, it is both an action for damages and specific
performance. The docket fee paid upon filing of complaint in the amount only In the present case no such honest difference of opinion was possible as the
of P410.00 by considering the action to be merely one for specific allegations of the complaint, the designation and the prayer show clearly that
performance where the amount involved is not capable of pecuniary it is an action for damages and specific performance. The docketing fee
estimation is obviously erroneous. Although the total amount of damages should be assessed by considering the amount of damages as alleged in the
sought is not stated in the prayer of the complaint yet it is spelled out in the original complaint.
body of the complaint totalling in the amount of P78,750,000.00 which should
be the basis of assessment of the filing fee. As reiterated in the Magaspi case the rule is well-settled "that a case is
deemed filed only upon payment of the docket fee regardless of the actual
4. When this under-re assessment of the filing fee in this case was brought to date of filing in court . 12 Thus, in the present case the trial court did not
the attention of this Court together with similar other cases an investigation acquire jurisdiction over the case by the payment of only P410.00 as docket
was immediately ordered by the Court. Meanwhile plaintiff through another fee. Neither can the amendment of the complaint thereby vest jurisdiction
counsel with leave of court filed an amended complaint on September 12, upon the Court. 13 For an legal purposes there is no such original complaint
1985 for the inclusion of Philips Wire and Cable Corporation as co-plaintiff that was duly filed which could be amended. Consequently, the order
and by emanating any mention of the amount of damages in the body of the admitting the amended complaint and all subsequent proceedings and
complaint. The prayer in the original complaint was maintained. After this actions taken by the trial court are null and void.
Court issued an order on October 15, 1985 ordering the reassessment of
the docket fee in the present case and other cases that were investigated, on The Court of Appeals therefore, aptly ruled in the present case that the basis
November 12, 1985 the trial court directed plaintiffs to rectify the amended of assessment of the docket fee should be the amount of damages sought in
complaint by stating the amounts which they are asking for. It was only then
the original complaint and not in the amended complaint.
that plaintiffs specified the amount of damages in the body of the complaint in
the reduced amount of P10,000,000.00. 7 Still no amount of damages were
specified in the prayer. Said amended complaint was admitted. The Court cannot close this case without making the observation that it
frowns at the practice of counsel who filed the original complaint in this case
of omitting any specification of the amount of damages in the prayer although
On the other hand, in the Magaspi case, the trial court ordered the plaintiffs
the amount of over P78 million is alleged in the body of the complaint. This is
to pay the amount of P3,104.00 as filing fee covering the damages alleged in
clearly intended for no other purpose than to evade the payment of the
the original complaint as it did not consider the damages to be merely an or
correct filing fees if not to mislead the docket clerk in the assessment of the
incidental to the action for recovery of ownership and possession of real
filing fee. This fraudulent practice was compounded when, even as this Court
property. 8 An amended complaint was filed by plaintiff with leave of court to had taken cognizance of the anomaly and ordered an investigation, petitioner
include the government of the Republic as defendant and reducing the through another counsel filed an amended complaint, deleting all mention of
amount of damages, and attorney's fees prayed for to P100,000.00. Said
the amount of damages being asked for in the body of the complaint. It was
amended complaint was also admitted. 9
only when in obedience to the order of this Court of October 18, 1985, the
trial court directed that the amount of damages be specified in the amended
In the Magaspi case, the action was considered not only one for recovery of complaint, that petitioners' counsel wrote the damages sought in the much
ownership but also for damages, so that the filing fee for the damages should reduced amount of P10,000,000.00 in the body of the complaint but not in
be the basis of assessment. Although the payment of the docketing fee of the prayer thereof. The design to avoid payment of the required docket fee is
P60.00 was found to be insufficient, nevertheless, it was held that since the obvious.
payment was the result of an "honest difference of opinion as to the correct
amount to be paid as docket fee" the court "had acquired jurisdiction over the
The Court serves warning that it will take drastic action upon a repetition of
case and the proceedings thereafter had were proper and regular." 10
this unethical practice.
Hence, as the amended complaint superseded the original complaint, the
To put a stop to this irregularity, henceforth all complaints, petitions, answers

and other similar pleadings should specify the amount of damages being
prayed for not only in the body of the pleading but also in the prayer, and
said damages shall be considered in the assessment of the filing fees in any
case. Any pleading that fails to comply with this requirement shall not bib
accepted nor admitted, or shall otherwise be expunged from the record.
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 thereby vest jurisdiction in the Court, much less the payment of the
docket fee based on the amounts sought in the amended pleading. The
ruling in the Magaspi case 14 in so far as it is inconsistent with this
pronouncement is overturned and reversed.
WHEREFORE, the motion for reconsideration is denied for lack of merit.
SO ORDERED.
Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Gutierrez, Jr.,

Cruz, Paras, Feliciano, Bidin, Sarmiento and Cortes, JJ., concur.
Paras, J., took no part.

G.R. Nos. 79937-38 February 13, 1989 same rule applies to permissive counterclaims, third-party claims and similar
pleadings, which shall not be considered filed until and unless the filing fee
SUN INSURANCE OFFICE, LTD., (SIOL), E.B. PHILIPPS and D.J. prescribed therefor is paid. The court may also allow payment of said fee within
WARBY, petitioners, a reasonable time but also in no case beyond its applicable prescriptive or
vs. reglementary period.
HON. MAXIMIANO C. ASUNCION, Presiding Judge, Branch 104,
Regional Trial Court, Quezon City and MANUEL CHUA UY PO TIONG,
respondents.
Same; Same; Same; Same; Same; Same; Judgments; Lien; When the
judgment of the courts awards a claim not specified in the pleading, the
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles Law Offices for
petitioners. Tanjuatco, Oreta, Tanjuatco, Berenguer & Sanvicente Law additional filing fee shall constitute a lien on the judgment.—Where the trial
Offices for private respondent. court acquires jurisdiction over a claim by the filing of the appropriate pleading
and payment of the prescribed filing fee but, subsequently, the judgment
Remedial Law; Civil Procedure; Actions; Statutes regulating the procedure of awards a claim not specified in the pleading, or if specified the same has been
courts are applicable to actions pending and undetermined at the time of their left for determination by the court, the additional filing fee therefor shall
passage.—On the other hand, private respondent claims that the ruling in constitute a lien on the judgment. It shall be the responsibility of the Clerk of
Manchester cannot apply retroactively to Civil Case No. Q-41177 for at the Court or his duly authorized deputy to enforce said lien and assess and collect
time said civil case was filed in court there was no such Manchester ruling as the additional fee.
yet. Further, private respondent avers that what is applicable is the ruling of
this Court in Magaspi v. Ramolete, wherein this Court held that the trial court
acquired jurisdiction over the case even if the docket fee paid was insufficient. PETITION to review the decision of the Court of Appeals.
The contention that Manchester cannot apply retroactively to this case is
untenable. Statutes regulating the procedure of the courts will be construed as
applicable to actions pending and undetermined at the time of their passage. The facts are stated in the opinion of the Court.
Procedural laws are retrospective in that sense and to that extent.
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles Law Offices
for petitioners.
Same; Same; Same; Jurisdiction; Complaint; Docket Fees; It is not only the Tanjuatco, Oreta, Tanjuatco, Berenguer & Sanvicente Law Offices for
filing of the complaint, but the payment of the prescribed docket fee, that vests private respondent.
a trial court with jurisdiction over the subject matter or nature of the action.—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 GANCAYCO, J.:
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 Again the Court is asked to resolve the issue of whether or not a court
beyond the applicable prescriptive or reglementary period. acquires jurisdiction over a case when the correct and proper docket fee has
not been paid.
On February 28, 1984, petitioner Sun Insurance Office, Ltd. (SIOL for brevity)
Same; Same; Same; Same; Same; Same; Permissive Counter-claims; Third-
filed a complaint with the Regional Trial Court of Makati, Metro Manila for the
Party Claims; Permissive counter-claims, third-party claims and the like shall
consignation of a premium refund on a fire insurance policy with a prayer for
not be considered filed until and unless the prescribed filing fee is paid.—The
the judicial declaration of its nullity against private respondent Manuel Uy Po Judge Maximiano C. Asuncion, to whom Civil Case No. Q41177 was
Tiong. Private respondent as declared in default for failure to file the required thereafter assigned, after his assumption into office on January 16, 1986,
answer within the reglementary period. issued a Supplemental Order requiring the parties in the case to comment on
the Clerk of Court's letter-report signifying her difficulty in complying with the
On the other hand, on March 28, 1984, private respondent filed a complaint Resolution of this Court of October 15, 1985 since the pleadings filed by
in the Regional Trial Court of Quezon City for the refund of premiums and the private respondent did not indicate the exact amount sought to be recovered.
issuance of a writ of preliminary attachment which was docketed as Civil On January 23, 1986, private respondent filed a "Compliance" and a "Re-
Case No. Q-41177, initially against petitioner SIOL, and thereafter including Amended Complaint" stating therein a claim of "not less than Pl0,000,000. 00
E.B. Philipps and D.J. Warby as additional defendants. The complaint as actual compensatory damages" in the prayer. In the body of the said
sought, among others, the payment of actual, compensatory, moral, second amended complaint however, private respondent alleges actual and
exemplary and liquidated damages, attorney's fees, expenses of litigation compensatory damages and attorney's fees in the total amount of about
and costs of the suit. Although the prayer in the complaint did not quantify the P44,601,623.70.
amount of damages sought said amount may be inferred from the body of
the complaint to be about Fifty Million Pesos (P50,000,000.00). On January 24, 1986, Judge Asuncion issued another Order admitting the
second amended complaint and stating therein that the same constituted
Only the amount of P210.00 was paid by private respondent as docket fee proper compliance with the Resolution of this Court and that a copy thereof
which prompted petitioners' counsel to raise his objection. Said objection was should be furnished the Clerk of Court for the reassessment of the docket
disregarded by respondent Judge Jose P. Castro who was then presiding fees. The reassessment by the Clerk of Court based on private respondent's
over said case. Upon the order of this Court, the records of said case claim of "not less than P10,000,000.00 as actual and compensatory
together with twenty-two other cases assigned to different branches of the damages" amounted to P39,786.00 as docket fee. This was subsequently
Regional Trial Court of Quezon City which were under investigation for paid by private respondent.
under-assessment of docket fees were transmitted to this Court. The Court
thereafter returned the said records to the trial court with the directive that Petitioners then filed a petition for certiorari with the Court of Appeals
they be re-raffled to the other judges in Quezon City, to the exclusion of questioning the said order of Judie Asuncion dated January 24, 1986.
Judge Castro. Civil Case No. Q-41177 was re-raffled to Branch 104, a sala
which was then vacant. On April 24, 1986, private respondent filed a supplemental complaint alleging
an additional claim of P20,000,000.00 as d.qmages so the total claim
On October 15, 1985, the Court en banc issued a Resolution in amounts to about P64,601,623.70. On October 16, 1986, or some seven
Administrative Case No. 85-10-8752-RTC directing the judges in said cases months after filing the supplemental complaint, the private respondent paid
to reassess the docket fees and that in case of deficiency, to order its the additional docket fee of P80,396.00.1
payment. The Resolution also requires all clerks of court to issue certificates
of re-assessment of docket fees. All litigants were likewise required to specify On August 13, 1987, the Court of Appeals rendered a decision ruling, among
in their pleadings the amount sought to be recovered in their complaints. others, as follows:
On December 16, 1985, Judge Antonio P. Solano, to whose sala Civil Case WHEREFORE, judgment is hereby rendered:
No. Q-41177 was temporarily assigned, issuedan order to the Clerk of Court
instructing him to issue a certificate of assessment of the docket fee paid by
1. Denying due course to the petition in CA-G.R. SP No. 1,
private respondent and, in case of deficiency, to include the same in said
09715 insofar as it seeks annulment of the order
certificate.
(a) denying petitioners' motion to dismiss the complaint, as
On January 7, 1984, to forestall a default, a cautionary answer was filed by amended, and
petitioners. On August 30,1984, an amended complaint was filed by private
respondent including the two additional defendants aforestated.
(b) granting the writ of preliminary attachment, but giving due passage. Procedural laws are retrospective in that sense and to that extent.
course to the portion thereof questioning the reassessment 6
of the docketing fee, and requiring the Honorable respondent
Court to reassess the docketing fee to be paid by private In Lazaro vs. Endencia and Andres, 7 this Court held that the payment of the
respondent on the basis of the amount of P25,401,707.00. 2 full amount of the docket fee is an indispensable step for the perfection of an
appeal. In a forcible entry and detainer case before the justice of the peace
Hence, the instant petition. court of Manaoag, Pangasinan, after notice of a judgment dismissing the
case, the plaintiff filed a notice of appeal with said court but he deposited
During the pendency of this petition and in conformity with the said judgment only P8.00 for the docket fee, instead of P16.00 as required, within the
of respondent court, private respondent paid the additional docket fee of reglementary period of appeal of five (5) days after receiving notice of
P62,432.90 on April 28, 1988. 3 judgment. Plaintiff deposited the additional P8.00 to complete the amount of
the docket fee only fourteen (14) days later. On the basis of these facts, this
court held that the Court of First Instance did notacquire jurisdiction to hear
The main thrust of the petition is that the Court of Appeals erred in not finding
and determine the appeal as the appeal was not thereby perfected.
that the lower court did not acquire jurisdiction over Civil Case No. Q-41177
on the ground of nonpayment of the correct and proper docket fee.
Petitioners allege that while it may be true that private respondent had paid In Lee vs. Republic, 8 the petitioner filed a verified declaration of intention to
the amount of P182,824.90 as docket fee as herein-above related, and become a Filipino citizen by sending it through registered mail to the Office of
considering that the total amount sought to be recovered in the amended and the Solicitor General in 1953 but the required filing fee was paid only in 1956,
supplemental complaint is P64,601,623.70 the docket fee that should be paid barely 5V2 months prior to the filing of the petition for citizenship. This Court
by private respondent is P257,810.49, more or less. Not having paid the ruled that the declaration was not filed in accordance with the legal
same, petitioners contend that the complaint should be dismissed and all requirement that such declaration should be filed at least one year before the
incidents arising therefrom should be annulled. In support of their theory, filing of the petition for citizenship. Citing Lazaro, this Court concluded that
petitioners cite the latest ruling of the Court in Manchester Development the filing of petitioner's declaration of intention on October 23, 1953 produced
Corporation vs. CA, 4 as follows: no legal effect until the required filing fee was paid on May 23, 1956.
The Court acquires jurisdiction over any case only upon the In Malimit vs. Degamo, 9 the same principles enunciated in Lazaro and Lee
payment of the prescribed docket fee. An amendment of the were applied. It was an original petition for quo warranto contesting the right
complaint or similar pleading will not thereby vest jurisdiction to office of proclaimed candidates which was mailed, addressed to the clerk
in the Court, much less the payment of the docket fee based of the Court of First Instance, within the one-week period after the
on the amounts sought in the amended pleading. The ruling proclamation as provided therefor by law.10 However, the required docket
in the Magaspi Case in so far as it is inconsistent with this fees were paid only after the expiration of said period. Consequently, this
pronouncement is overturned and reversed. Court held that the date of such payment must be deemed to be the real date
of filing of aforesaid petition and not the date when it was mailed.
On the other hand, private respondent claims that the ruling in Manchester
cannot apply retroactively to Civil Case No. Q41177 for at the time said civil Again, in Garica vs, Vasquez, 11 this Court reiterated the rule that the docket
case was filed in court there was no such Manchester ruling as yet. Further, fee must be paid before a court will act on a petition or complaint. However,
private respondent avers that what is applicable is the ruling of this Court in we also held that said rule is not applicable when petitioner seeks the
Magaspi v. Ramolete, 5 wherein this Court held that the trial court acquired probate of several wills of the same decedent as he is not required to file a
jurisdiction over the case even if the docket fee paid was insufficient. separate action for each will but instead he may have other wills probated in
the same special proceeding then pending before the same court.
The contention that Manchester cannot apply retroactively to this case is
untenable. Statutes regulating the procedure of the courts will be construed Then in Magaspi, 12 this Court reiterated the ruling in Malimit and Lee that a
as applicable to actions pending and undetermined at the time of their case is deemed filed only upon payment of the docket fee regardless of the
actual date of its filing in court. Said case involved a complaint for recovery of However, as aforecited, this Court overturned Magaspi in Manchester.
ownership and possession of a parcel of land with damages filed in the Court Manchester involves an action for torts and damages and specific
of First Instance of Cebu. Upon the payment of P60.00 for the docket fee and performance with a prayer for the issuance of a temporary restraining order,
P10.00 for the sheriffs fee, the complaint was docketed as Civil Case No. R- etc. The prayer in said case is for the issuance of a writ of preliminary
11882. The prayer of the complaint sought that the Transfer Certificate of prohibitory injunction during the pendency of the action against the
Title issued in the name of the defendant be declared as null and void. It was defendants' announced forfeiture of the sum of P3 Million paid by the
also prayed that plaintiff be declared as owner thereof to whom the proper plaintiffs for the property in question, the attachment of such property of
title should be issued, and that defendant be made to pay monthly rentals of defendants that may be sufficient to satisfy any judgment that may be
P3,500.00 from June 2, 1948 up to the time the property is delivered to rendered, and, after hearing, the issuance of an order requiring defendants to
plaintiff, P500,000.00 as moral damages, attorney's fees in the amount of execute a contract of purchase and sale of the subject property and annul
P250,000.00, the costs of the action and exemplary damages in the amount defendants' illegal forfeiture of the money of plaintiff. It was also prayed that
of P500,000.00. the defendants be made to pay the plaintiff jointly and severally, actual,
compensatory and exemplary damages as well as 25% of said amounts as
The defendant then filed a motion to compel the plaintiff to pay the correct may be proved during the trial for attorney's fees. The plaintiff also asked the
amount of the docket fee to which an opposition was filed by the plaintiff trial court to declare the tender of payment of the purchase price of plaintiff
alleging that the action was for the recovery of a parcel of land so the docket valid and sufficient for purposes of payment, and to make the injunction
fee must be based on its assessed value and that the amount of P60.00 was permanent. The amount of damages sought is not specified in the prayer
the correct docketing fee. The trial court ordered the plaintiff to pay although the body of the complaint alleges the total amount of over P78
P3,104.00 as filing fee. Millon allegedly suffered by plaintiff.
The plaintiff then filed a motion to admit the amended complaint to include Upon the filing of the complaint, the plaintiff paid the amount of only P410.00
the Republic as the defendant. In the prayer of the amended complaint the for the docket fee based on the nature of the action for specific performance
exemplary damages earlier sought was eliminated. The amended prayer where the amount involved is not capable of pecuniary estimation. However,
merely sought moral damages as the court may determine, attorney's fees of it was obvious from the allegations of the complaint as well as its designation
P100,000.00 and the costs of the action. The defendant filed an opposition to that the action was one for damages and specific performance. Thus, this
the amended complaint. The opposition notwithstanding, the amended court held the plaintiff must be assessed the correct docket fee computed
complaint was admitted by the trial court. The trial court reiterated its order against the amount of damages of about P78 Million, although the same was
for the payment of the additional docket fee which plaintiff assailed and then not spelled out in the prayer of the complaint.
challenged before this Court. Plaintiff alleged that he paid the total docket fee
in the amount of P60.00 and that if he has to pay the additional fee it must be Meanwhile, plaintiff through another counsel, with leave of court, filed an
based on the amended complaint. amended complaint on September 12, 1985 by the inclusion of another co-
plaintiff and eliminating any mention of the amount of damages in the body of
The question posed, therefore, was whether or not the plaintiff may be the complaint. The prayer in the original complaint was maintained.
considered to have filed the case even if the docketing fee paid was not
sufficient. In Magaspi, We reiterated the rule that the case was deemed filed On October 15, 1985, this Court ordered the re-assessment of the docket fee
only upon the payment of the correct amount for the docket fee regardless of in the said case and other cases that were investigated. On November 12,
the actual date of the filing of the complaint; that there was an honest 1985, the trial court directed the plaintiff to rectify the amended complaint by
difference of opinion as to the correct amount to be paid as docket fee in that stating the amounts which they were asking for. This plaintiff did as
as the action appears to be one for the recovery of property the docket fee of instructed. In the body of the complaint the amount of damages alleged was
P60.00 was correct; and that as the action is also one, for damages, We reduced to P10,000,000.00 but still no amount of damages was specified in
upheld the assessment of the additional docket fee based on the damages the prayer. Said amended complaint was admitted.
alleged in the amended complaint as against the assessment of the trial
court which was based on the damages alleged in the original complaint.
Applying the principle in Magaspi that "the case is deemed filed only upon is obvious not only in the filing of the original complaint but also in the filing of
payment of the docket fee regardless of the actual date of filing in court," this the second amended complaint.
Court held that the trial court did not acquire jurisdiction over the case by
payment of only P410.00 for the docket fee. Neither can the amendment of However, in Manchester, petitioner did not pay any additional docket fee
the complaint thereby vest jurisdiction upon the Court. For all legal purposes until] the case was decided by this Court on May 7, 1987. Thus, in
there was no such original complaint duly filed which could be amended. Manchester, due to the fraud committed on the government, this Court held
Consequently, the order admitting the amended complaint and all that the court a quo did not acquire jurisdiction over the case and that the
subsequent proceedings and actions taken by the trial court were declared amended complaint could not have been admitted inasmuch as the original
null and void.13 complaint was null and void.
The present case, as above discussed, is among the several cases of under- In the present case, a more liberal interpretation of the rules is called for
assessment of docket fee which were investigated by this Court together with considering that, unlike Manchester, private respondent demonstrated his
Manchester. The facts and circumstances of this case are similar to willingness to abide by the rules by paying the additional docket fees as
Manchester. In the body of the original complaint, the total amount of required. The promulgation of the decision in Manchester must have had that
damages sought amounted to about P50 Million. In the prayer, the amount of sobering influence on private respondent who thus paid the additional docket
damages asked for was not stated. The action was for the refund of the fee as ordered by the respondent court. It triggered his change of stance by
premium and the issuance of the writ of preliminary attachment with manifesting his willingness to pay such additional docket fee as may be
damages. The amount of only P210.00 was paid for the docket fee. On ordered.
January 23, 1986, private respondent filed an amended complaint wherein in
the prayer it is asked that he be awarded no less than P10,000,000.00 as Nevertheless, petitioners contend that the docket fee that was paid is still
actual and exemplary damages but in the body of the complaint the amount insufficient considering the total amount of the claim. This is a matter which
of his pecuniary claim is approximately P44,601,623.70. Said amended
the clerk of court of the lower court and/or his duly authorized docket clerk or
complaint was admitted and the private respondent was reassessed the
clerk in-charge should determine and, thereafter, if any amount is found due,
additional docket fee of P39,786.00 based on his prayer of not less than
he must require the private respondent to pay the same.
P10,000,000.00 in damages, which he paid.
Thus, the Court rules as follows:
On April 24, 1986, private respondent filed a supplemental complaint alleging
an additional claim of P20,000,000.00 in damages so that his total claim is
approximately P64,601,620.70. On October 16, 1986, private respondent 1. It is not simply the filing of the complaint or appropriate initiatory pleading,
paid an additional docket fee of P80,396.00. After the promulgation of the but the payment of the prescribed docket fee, that vests a trial court with
decision of the respondent court on August 31, 1987 wherein private jurisdiction over the subject matter or nature of the action. Where the filing of
respondent was ordered to be reassessed for additional docket fee, and the initiatory pleading is not accompanied by payment of the docket fee, the
during the pendency of this petition, and after the promulgation of court may allow payment of the fee within a reasonable time but in no case
Manchester, on April 28, 1988, private respondent paid an additional docket beyond the applicable prescriptive or reglementary period.
fee of P62,132.92. Although private respondent appears to have paid a total
amount of P182,824.90 for the docket fee considering the total amount of his 2. The same rule applies to permissive counterclaims, third party claims and
claim in the amended and supplemental complaint amounting to about similar pleadings, which shall not be considered filed until and unless the
P64,601,620.70, petitioner insists that private respondent must pay a docket filing fee prescribed therefor is paid. The court may also allow payment of
fee of P257,810.49. said fee within a reasonable time but also in no case beyond its applicable
prescriptive or reglementary period.
The principle in Manchester could very well be applied in the present case.
The pattern and the intent to defraud the government of the docket fee due it 3. Where the trial court acquires jurisdiction over a claim by the filing of the
appropriate pleading and payment of the prescribed filing fee 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 therefor 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.
WHEREFORE, the petition is DISMISSED for lack of merit. The Clerk of

Court of the court a quo is hereby instructed to reassess and determine the
additional filing fee that should be paid by private respondent considering the
total amount of the claim sought in the original complaint and the
supplemental complaint as may be gleaned from the allegations and the
prayer thereof and to require private respondent to pay the deficiency, if any,
without pronouncement as to costs.
SO ORDERED.
Fernan (C.J), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras,

Feliciano, Padilla, Bidin, Sarmiento, Cortes, Griño-Aquino, Medialdea and
Regalado, JJ., concur.
G.R. Nos. 88075-77 December 20, 1989
Same; Same; Same; Same; Jurisdiction of Regional Trial Courts under B.P.
MAXIMO TACAY, PONCIANO PANES and ANTONIA NOEL, petitioners,
vs. 129; Application of the rule.—Batas Pambansa Bilang 129 provides that
REGIONAL TRIAL COURT OF TAGUM Davao del Norte, Branches 1 and Regional Trial Courts shall exercise exclusive original jurisdiction inter alia over
2, Presided by Hon. Marcial Fernandez and Hon. Jesus Matas, “all civil actions which involve the title to, or possession of, real property, or
respectively, PATSITA GAMUTAN, Clerk of Court, and GODOFREDO any interest therein, except actions for forcible entry into and unlawful detainer
PINEDA, respondents. of lands or buildings, original jurisdiction over which is conferred upon
Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial
Eduardo C. De Vera for petitioners. Courts.” The rule applies regardless of the value of the real property involved,
whether it be worth more than P20,000.00 or not, infra. The rule also applies
RESOLUTION even where the complaint involving realty also prays for an award of damages;
the amount of those damages would be immaterial to the question of the
Remedial Law; Civil Procedure; Judgment; Dismissal of petition for failure to Court’s jurisdiction. The rule is unlike that in other cases—e.g., actions simply
comply with Circular No. 1-88; Copies of challenged orders were not certified for recovery of money or of personal property, or actions in admiralty and
by the clerk of court or his duly authorized representative but by petitioner’s maritime jurisdiction—in which the amount claimed, or the value of the
counsel which is not allowed.—It should be dismissed for failure to comply with personal property, is determinative of jurisdiction; i.e., the value of the personal
this Court’s Circular No. 1-88 (effective January 1, 1989). The copies of the property or the amount claimed should exceed twenty thousand pesos
challenged Orders thereto attached were not certified by the proper Clerk of (P20,000.00) in order to be cognizable by the Regional Trial Court.
Court or his duly authorized representative. Certification was made by the
petitioners’ counsel, which is not allowed.
Same; Same; Same; Same; Filing Fees; Circular No. 7ofthe Supreme Court
cannot be invoked as authority for dismissal of the actions at bar; Circular was
Same; Same; Actions; Jurisdiction; Determinative of the court’s jurisdiction in avowedly inspired by the Manchester ruling.—Circular No. 7 of this Court,
actions for recovery of possession of real property is the nature thereof, not dated March 24, 1988, cannot thus be invoked, as the petitioner does, as
the amount of the damages allegedly arising from or connected with the issue authority for the dismissal of the actions at bar. That circular, avowedly inspired
of title or possession, and regardless of the value of the property.—It is true by the doctrine laid down in Manchester Development Corporation v. Court of
that the complaints do not state the amounts being claimed as actual, moral Appeals, 149 SCRA 562 (May 7, 1987), has but limited application to said
and nominal damages. It is also true, however, that the actions are not actions, as shall presently be discussed. Moreover, the rules therein laid down
basically for the recovery of sums of money. They are principally for recovery have since been clarified and amplified by the Court’s subsequent decision in
of possession of real property, in the nature of an accion publiciana. Sun Insurance Office, Ltd. (SIOL) v. Asuncion, et al., G.R. Nos..79937-38,
Determinative of the court’s jurisdiction in this type of actions is the nature February 13, 1989.
thereof, not the amount of the damages allegedly arising from or connected
with the issue of title or possession, and regardless of the value of the property.
Quite obviously, an action for recovery of possession of real property (such as Same; Same; Same; Same; Same; Purpose of Circular No. 7.—Circular No. 7
an accion plenaria de posesion) or the title thereof, or for partition or was aimed at the practice of certain parties who omit from the prayer of their
condemnation of, or the foreclosure of a mortgage on, said real property—in complaints “any specification of the amount of damages,” the omission being
other words, a real action—may be commenced and prosecuted without an “clearly intended for no other purpose than to evade the payment of the correct
accompanying claim for actual, moral, nominal or exemplary damages; and filing fees if not to mislead the docket clerk, in the assessment of the filing fee.”
such an action would fall within the exclusive, original jurisdiction of the
Regional Trial Court.
Same; Same; Same; Same; Same; Requirement in Circular No. 7 that from the record.” In other words, the complaint or pleading may be dismissed,
complaints, etc. should specify the amount of damages being prayed for not or the claims as to which the amounts are unspecified may be expunged,
only in the body of the pleading but also in the prayer has not been altered; although as aforestated the Court may, on motion, permit amendment of the
New rule that trial courts are now authorized to allow payment of the fee within complaint and payment of the fees provided the claim has not in the meantime
a reasonable time but not beyond the prescriptive or reglementary period; For become time-barred. The other is where the pleading does specify the amount
damages arising after the filing of the complaint or similar pleading, the of every claim, but the fees paid are insufficient; and here again, the rule now
additional filing fee shall constitute a lien on the judgment.—As will be noted, is that the court may allow a reasonable time for the payment of the prescribed
the requirement in Circular No. 7 that complaints, petitions, answers, and fees, or the balance thereof, and upon such payment, the defect is cured and
similar pleadings should specify the amount of damages being prayed for not the court may properly take cognizance of the action, unless in the meantime
only in the body of the pleading but also in the prayer, has not been altered. prescription has set in and consequently barred the right of action.
What has been revised is the rule that subsequent “amendment of the
complaint or similar pleading will not thereby vest jurisdiction in the Court,
much less the payment of the docket fee based on the amount sought in the Same; Same; Same; Same; Same; Where the action involves real property
amended pleading,” the trial court now being authorized to allow payment of and a related claim for damages, the legal fees shall be assessed on the basis
the fee within a reasonable time but in no case beyond the applicable of both the value of the property and the total amount of related damages
prescriptive or reglementary period. Moreover, a new rule has been added, sought; Rule where no amounts of the damages are specified.—Where the
governing awards of claims not specified in the pleading—i.e., damages action involves real property and a related claim for damages as well, the legal
arising after the filing of the complaint or similar pleading—as to which the fees shall be assessed on the basis of both (a) the value of the property and
additional filing fee therefor shall constitute a lien on the judgment. (b) the total amount of related damages sought. The Court acquires jurisdiction
over the action if the filing of the initiatory pleading is accompanied by the
payment of the requisite fees, or, if the fees are not paid at the time of the filing
Same; Same; Same; Same; Same; Where the action is purely for recovery of of the pleading, as of the time of full payment of the fees within such
money or damages, the docket fees are assessed on the basis of the reasonable time as the court may grant, unless, of course, prescription has set
aggregate amount claimed, exclusive only of interests and costs.—Where the in in the meantime. But where—as in the case at bar—the fees prescribed for
action is purely for the recovery of money or damages, the docket fees are an action involving real property have been paid, but the amounts of certain of
assessed on the basis of the aggregate amount claimed, exclusive only of the related damages (actual, moral and nominal) being demanded are
interests and costs. In this case, the complaint or similar pleading should, unspecified, the action may not be dismissed. The Court undeniably has
according to Circular No. 7 of this Court, “specify the amount of damages being jurisdiction over the action involving the real property, acquiring it upon the
prayed for not only in the body of the pleading but also in the prayer, and said filing of the complaint or similar pleading and payment of the prescribed fee.
damages shall be considered in the assessment of the filing fees in any case.” And it is not divested of that authority by the circumstance that it may not have
acquired jurisdiction over the accompanying claims for damages because of
lack of specification thereof. What should be done is simply to expunge those
Same; Same; Same; Same; Same; Same; Rules to be applied where the claims for damages as to which no amounts are stated, which is what the
complaint or similar pleading sets out a claim purely for money or damages, respondent Courts did, or allow, on motion, a reasonable time for the
and there is no precise statement of the amounts being claimed, or where the amendment of the complaints so as to allege the precise amount of each item
pleading specifies the amount of every claim, but the fees paid are of damages and accept payment of the requisite fees therefor within the
insufficient.—Two situations may arise. One is where the complaint or similar relevant prescriptive period.
pleading sets out a claim purely for money or damages and there is no precise
statement of the amounts being claimed. In this event the rule is that the
pleading will “not be accepted nor admitted, or shall otherwise be expunged
JOINT PETITION for certiorari, prohibition and mandamus to review the 3) that each defendant be ordered to pay:
orders of the Regional Trial Court of Tagum, Davao del Norte, Br. 1 and 2.
1 ) P 2,000 as monthly rents from February, 1987;
The facts are stated in the opinion of the Court. 2 ) Actual damages, as proven;
Eduardo C. De Vera for petitioners. 3 ) Moral and nominal damages as the Honorable Court may
fix ;
NARVASA, J.:
4) P30,000.00, "as attorney's fees, and representation fees
of P5,000.00 per day of appearance;" 4
In the Regional Trial Court at Tagum, Davao del Norte, 1 three
and
(3) actions for recovery of possession (acciones publicianas 2 ) were
separately instituted by Godofredo Pineda against three (3) defendants,
docketed as follows: 4) that he (Pineda) be granted such "further relief and
remedies ... just and equitable in the premises.
1) vs. Antonia Noel Civil Case No. 2209
The prayer of each complaint contained a handwritten notation (evidently
made by plaintiff's counsel) reading, "P5,000.00 as and for," immediately
2) vs. Ponciano Panes Civil Case No. 2210
above the typewritten words, "Actual damages, as proven," the intention
apparently being to make the entire phrase read, " P5,000.00 as and for
3) vs. Maximo Tacay Civil Case No. 2211. actual damages as proven. 5
Civil Cases Numbered 2209 and 2211 were raffled to Branch I of the Trial Motions to dismiss were filed in behalf of each of the defendants by common
Court, presided over by Judge Marcial Hernandez. Civil No. 2210 was counsel .6 Every motion alleged that the Trial Court had not acquired
assigned to Branch 2, presided over by Judge Jesus Matas. jurisdiction of the case —
The complaints 3 all alleged the same essential facts (1) Pineda was the . . . for the reason that the ... complaint violates the
owner of a parcel of land measuring 790 square meters, his ownership being mandatory and clear provision of Circular No. 7 of the ...
evidenced by TCT No. T-46560; (2) the previous owner had allowed the Supreme Court dated March 24,1988, by failing to specify all
defendants to occupy portions of the land by mere tolerance; (3) having the amounts of damages which plaintiff is claiming from
himself need to use the property, Pineda had made demands on the defendant;" and
defendants to vacate the property and pay reasonable rentals therefor, but
these demands had been refused; and (4) the last demand had been made
. . . for ... failure (of the complaint) to even allege the basic
more than a year prior to the commencement of suit. The complaints prayed
requirement as to the assessed value of the subject lot in
for the same reliefs, to wit:
dispute.
1) that plaintiff be declared owner of the areas occupied by
Judge Matas denied the motion to dismiss filed in Civil Case No. 2210 but
the defendants;
ordered the expunction of the "allegations in paragraph 11 of the ... complaint
regarding moral as well as nominal damages . 7 On motion of defendant
2) that defendants and their "privies and allies" be ordered to Panes, Judge Matas later ordered the striking out, too, of the "handwritten
vacate and deliver the portions of the land usurped by them; amount of 'P5,000. 00 as and for.' including the typewritten words 'actual
damages as proven' ... in sub-paragraph b of paragraph 4 in the conclusion It is true that the complaints do not state the amounts being claimed as
and prayer of the complaint ..." 8 actual, moral and nominal damages. It is also true, however, that the actions
are not basically for the recovery of sums of money. They are principally for
The motions to dismiss submitted in Civil Cases Numbered 2211 and 2209 recovery of possession of real property, in the nature of an accion publiciana.
were also denied in separate orders promulgated by Judge Marcial Determinative of the court's jurisdiction in this type of actions is the nature
Fernandez. 9 His Order in Case No. 2209 dated March 15, 1989 (a) declared thereof, not the amount of the damages allegedly arising from or connected
that since the "action at bar is for Reivindicatoria, Damages and Attorney's with the issue of title or possession, and regardless of the value of the
fees ... (d)efinitely this Court has the exclusive jurisdiction," (b) that the property. Quite obviously, an action for recovery of possession of real
claims for actual, moral and nominal damages "are only one aspect of the property (such as an accion plenaria de possesion) or the title thereof, 12 or
cause of action," and (c) because of absence of specification of the amounts for partition or condemnation of, or the foreclosure of a mortgage on, said
claimed as moral, nominal and actual damages, they should be "expunged real property 13 - in other words, a real action-may be commenced and
from the records." prosecuted without an accompanying claim for actual, moral, nominal or
exemplary damages; and such an action would fall within the exclusive,
original jurisdiction of the Regional Trial Court.
Ascribing grave abuse of discretion to both Judges Matas and Fernandez in
the rendition of the Orders above described, the defendants in all three (3)
actions have filed with this Court a "Joint Petition" for certiorari, prohibition Batas Pambansa Bilang 129 provides that Regional Trial Courts shall
and mandamus, with prayer for temporary restraining order and/or writ of exercise exclusive original jurisdiction inter alia over "all civil actions which
preliminary prohibitory injunction," praying essentially that said orders be involve the title to, or possession of, real property, or any interest therein,
annulled and respondent judges directed to dismiss all the complaints except actions for forcible entry into and unlawful detainer of lands or
"without prejudice to private respondent Pineda's re-filing a similar complaint buildings, original jurisdiction over which is conferred upon Metropolitan Trial
that complies with Circular No. 7." The joint petition (a) re-asserted the Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts." 14 The
proposition that because the complaints had failed to state the amounts rule applies regardless of the value of the real property involved, whether it
being claimed as actual, moral and nominal damages, the Trial Courts a quo be worth more than P20,000.00 or not, infra. The rule also applies even
had not acquired jurisdiction over the three (3) actions in question-indeed, where the complaint involving realty also prays for an award of damages; the
the respondent Clerk of Court should not have accepted the complaints amount of those damages would be immaterial to the question of the Court's
which initiated said suits, and (b) it was not proper merely to expunge the jurisdiction. The rule is unlike that in other cases e.g., actions simply for
claims for damages and allow "the so-called cause of action for recovery of money or of personal property, 15 or actions in admiralty and
"reivindicatoria" remain for trial" by itself. 10 maritime jurisdiction 16 in which the amount claimed, 17 or the value of the
personal property, is determinative of jurisdiction; i.e., the value of the
personal property or the amount claimed should exceed twenty thousand
The joint petition should be, as it is hereby, dismissed.
pesos (P20,000.00) in order to be cognizable by the Regional Trial Court.
It should be dismissed for failure to comply with this Court's Circular No. 1-88
Circular No. 7 of this Court, dated March 24, 1988, cannot thus be invoked,
(effective January 1, 1989). The copies of the challenged Orders thereto
as the petitioner does, as authority for the dismissal of the actions at bar.
attached 11 were not certified by the proper Clerk of Court or his duly
That circular, avowedly inspired by the doctrine laid down in Manchester
authorized representative. Certification was made by the petitioners' counsel,
Development Corporation v. Court of appeals, 149 SCRA 562 (May 7, 1987),
which is not allowed.
has but limited application to said actions, as shall presently be discussed.
Moreover, the rules therein laid down have since been clarified and amplified
The petition should be dismissed, too, for another equally important reason. by the Court's subsequent decision in Sun Insurance Office, Ltd. (SIOL) v.
It fails to demonstrate any grave abuse of discretion on the part of the Asuncion, et al., G.R. Nos. 79937-38, February 13, 1989.
respondent Judges in rendering the Orders complained of or, for that matter,
the existence of any proper cause for the issuance of the writ of mandamus.
On the contrary, the orders appear to have correctly applied the law to the Circular No. 7 was aimed at the practice of certain parties who omit from the
prayer of their complaints "any specification of the amount of damages," the
admitted facts.
omission being "clearly intended for no other purposes than to evade the As will be noted, the requirement in Circular No. 7 that complaints, petitions,
payment of the correct filing fees if not to mislead the docket clerk, in the answers, and similar pleadings should specify the amount of damages being
assessment of the filing fee." The following rules were therefore set down: prayed for not only in the body of the pleading but also in the prayer, has not
been altered. What has been revised is the rule that subsequent
1. All complaints, petitions, answers, and similar pleadings should specify the "amendment of the complaint or similar pleading will not thereby vest
amount of damages being prayed for not only in the body of the pleading but jurisdiction in the Court, much less the payment of the docket fee based on
also in the prayer, and said damages shall be considered in the assessment the amount sought in the amended pleading," the trial court now being
of the filing fees in any case. authorized to allow payment of the fee within a reasonable time but in no
case beyond the applicable prescriptive or reglementary period. Moreover, a
2. Any pleading that fails to comply with this requirement shall not be new rule has been added, governing awards of claims not specified in the
accepted nor admitted, or shall otherwise be expunged from the record. pleading - i.e., damages arising after the filing of the complaint or similar
pleading-as to which the additional filing fee therefor shall constitute a lien on
the judgment.
3. 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 thereby vest jurisdiction in the Court, much less the payment Now, under the Rules of Court, docket or filing fees are assessed on the
of the docket fee based on the amount sought in the amended pleading. basis of the "sum claimed," on the one hand, or the "value of the property in
litigation or the value of the estate," on the other. 18 There are, in other
words, as already above intimated, actions or proceedings involving real
The clarificatory and additional rules laid down in Sun Insurance Office, Ltd. property, in which the value of the property is immaterial to the court's
v. Asuncion, supra, read as follows: jurisdiction, account thereof being taken merely for assessment of the legal
fees; and there are actions or proceedings, involving personal property or the
1. It is not simply the filing of the complaint or appropriate initiatory pleading, recovery of money and/or damages, in which the value of the property or the
but (also) the payment of the prescribed docket fee that vests a trial court amount of the demand is decisive of the trial court's competence (aside from
with jurisdiction over the subject-matter or nature of the action. Where the being the basis for fixing the corresponding docket fees). 19
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 Where the action is purely for the recovery of money or damages, the docket
no case beyond the applicable prescriptive or reglementary period. fees are assessed on the basis of the aggregate amount claimed, exclusive
only of interests and costs. In this case, the complaint or similar pleading
2. The same rule applies to permissive counterclaims, third-party claims and should, according to Circular No. 7 of this Court, "specify the amount of
similar pleadings, which shall not be considered filed until and unless the damages being prayed for not only in the body of the pleading but also in the
filing fee prescribed therefor is paid. The court may also allow payment of prayer, and said damages shall be considered in the assessment of the filing
said fee within a reasonable time but also in no case beyond its applicable fees in any case."
prescriptive or reglementary period.
Two situations may arise. One is where the complaint or similar pleading sets
3. Where the trial court acquires jurisdiction over a claim by the filing of the out a claim purely for money or damages and there is no precise statement
appropriate pleading and payment of the prescribed filing fee but, of the amounts being claimed. In this event the rule is that the pleading will
subsequently, the judgment awards a claim not specified in the pleading, or if "not be accepted nor admitted, or shall otherwise be expunged from the
specified, the same has been left for determination by the court, the record." In other words, the complaint or pleading may be dismissed, or the
additional filing fee therefor shall constitute a lien on the judgment. It shall be claims as to which the amounts are unspecified may be expunged, although
the responsibility of the Clerk of Court or his duly authorized deputy to as aforestated the Court may, on motion, permit amendment of the complaint
enforce said lien and assess and collect the additional fee. and payment of the fees provided the claim has not in the meantime become
time-barred. The other is where the pleading does specify the amount of
every claim, but the fees paid are insufficient; and here again, the rule now is
that the court may allow a reasonable time for the payment of the prescribed
fees, or the balance thereof, and upon such payment, the defect is cured and
the court may properly take cognizance of the action, unless in the meantime
prescription has set in and consequently barred the right of action.
Where the action involves real property and a related claim for damages as
well, the legal fees shall be assessed on the basis of both (a) the value of the
property and (b) the total amount of related damages sought. The Court
acquires jurisdiction over the action if the filing of the initiatory pleading is
accompanied by the payment of the requisite fees, or, if the fees are not paid
at the time of the filing of the pleading, as of the time of full payment of the
fees within such reasonable time as the court may grant, unless, of course,
prescription has set in the meantime. But where-as in the case at bar-the
fees prescribed for an action involving real property have been paid, but the
amounts of certain of the related damages (actual, moral and nominal) being
demanded are unspecified, the action may not be dismissed. The Court
undeniably has jurisdiction over the action involving the real property,
acquiring it upon the filing of the complaint or similar pleading and payment
of the prescribed fee. And it is not divested of that authority by the
circumstance that it may not have acquired jurisdiction over the
accompanying claims for damages because of lack of specification thereof.
What should be done is simply to expunge those claims for damages as to
which no amounts are stated, which is what the respondent Courts did, or
allow, on motion, a reasonable time for the amendment of the complaints so
as to allege the precise amount of each item of damages and accept
payment of the requisite fees therefor within the relevant prescriptive period.
WHEREFORE, the petition is DISMISSED, without pronouncement as to

costs.
Fernan, C.J., Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano,

Gancayco, Padilla, Bidin, Sarmiento, Cortes, Griño-Aquino, Medialdea and
Regalado, JJ., concur.
G.R. No. 89747 July 20, 1990 and payment of the prescribed filing fee but, subsequently, the judgment
awards a claim not specified in the pleading, or if specified the same has been
MAERSK-TABACALERA SHIPPING AGENCY (FILIPINAS), INC., left for determination by the court, the additional filing fee therefor shall
petitioner, constitute a lien on the judgment. It shall be the responsibility of the Clerk of
vs. Court or his duly authorized deputy to enforce said lien and assess and collect
THE HON. COURT OF APPEALS, MONET'S EXPORT AND the additional fee.”
MANUFACTURING CORPORATION AND/OR VICENTE TAGLE,
respondents.
PETITION for certiorari to review the decision of the Court of Appeals.
Civil Procedure; Jurisdiction; Laches; A party who voluntarily participates in
the trial cannot later on raise the issue of the court’s lack of jurisdiction.—Unlike
Manchester, however, where the jurisdictional issue arising from insufficiency
of the docket fee paid, was seasonably raised in the answer of the defendant The facts are stated in the opinion of the Court.
in the trial court, in this case the issue is being raised for the first time in this
Bito, Lozada, Ortega & Castillo for petitioner.
Court. Petitioner submitted to the jurisdiction of the trial court without question.
It filed a counterclaim seeking affirmative reliefs, and actively took part in the Jesus F. Salazar for private respondent.
trial (p. 53, Rollo). A party who voluntarily participates in the trial cannot later
on raise the issue of the court’s lack of jurisdiction.
GRIÑO-AQUINO, J.:
Same; Same; Same; Same; A party may be barred by laches from invoking
his plea of lack of jurisdiction for the first time on appeal for the purpose of This is a petition for review on certiorari of the decision dated July 12, 1989
of the Court of Appeals in CA-G.R. CV No. 18124 affirming that of the
annulling everything done in the case with the active participation of said party
Regional Trial Court of Legaspi City in Civil Case No. 7480 which awarded
invoking the plea.—Maersk should have raised its objection to the trial court’s damages to the plaintiff, now private respondent, Monet's Export and
jurisdiction when the case was still in that court. It should not have waited for Manufacturing (Monet for short) against the petitioner Maersk- Tabacalera
an adverse decision by the Court of Appeals before waking up to raise the Shipping Agency (Filipinas), Inc., (Maersk for short) for breach of a (contract
question of jurisdiction. As this Court remarked in Tijam v. Sibonghanoy, 23 of carriage. The facts are stated in the decision of the Court of Appeals as
SCRA 29, 37: “Were we to sanction such conduct on its part, We would in follows:
effect be declaring as useless all the proceedings had in the present case since
it was commenced x x x and compel the judgment creditors to go up their On May 21, 1985, a complaint for damages was filed by
Calvary once more. The inequity and unfairness of this is not only patent but plaintiff Monet's Export and Manufacturing Corporation
revolting.” “A party may be barred by laches from invoking his plea (of lack of (Monet's) and/or Vicente Tagle against defendants Maersk
jurisdiction) for the first time on appeal for the purpose of annulling everything Tabacalera Shipping (Maersk) and the New Asia Enterprises
done in the case with the active participation of said party invoking the plea.” (New Asia) and/or Manuel Ranola, alleging, among other
things, that plaintiff, like defendant New Asia, is engaged in
the export of locally-made handicrafts and products, while
defendant Maersk Line is engaged in furnishing
Same; Same; Pleadings and Practice; Filing Fee; Where a judgment awards containerized services through which Monet's and New Asia
a claim not specified in the pleading or if specified the same has been left for normally ship their goods; that on March 11, 1984, plaintiff,
determination by the court, the additional filing fee therefore shall constitute a after complying with all the export and custom requirements,
lien on the judgment to be collected by the Clerk of Court.—“Where the trial loaded its goods in Maersk's container to be delivered on or
court acquires jurisdiction over a claim by the filing of the appropriate pleading before March 15, 1984 to Manila for immediate trans-
shipment to its port of destination; that through fraud and WHEREFORE, premises considered, defendant Maersk
malice, and without prior notice to Monet's, Maersk unloaded Shipping Line is found to be liable to plaintiff for damages in
the goods at New Asia's factory site at Tagas, Daraga, Albay the following amounts: For breach of contract of carriage,
to give way to the latter's own export shipment; that Monet's P50,000.00; for moral damages brought about by the wanton
shipment was later returned to its warehouse at Banag, bad faith employed by defendant shipping line in the
Daraga, Albay; and that because of this occurrence, Monet's performance of its contractual obligation, P50,000.00; and as
had to secure another shipper, thereby incurring exemplary damages, another P50,000.00 and for attomey's
unnecessary expenses as well as suffering mental anguish, fees, P20,000.00.
worry and sleepless nights thinking of the possibility of losing
its trading partners which would seriously doubt Monet's Defendant New Asia Enterprises is exonerated of any
capacity as a respectable exporter. Monet's likewise alleged liability, there being no valid cause of action by plaintiff
having suffered actual, moral and exemplary damages (p. 1, against it. New Asia Enterprises cannot be made answerable
Record). for whatever action or violation of contracted obligation
defendant Maersk Line may have committed against plaintiff
Answering the complaint, Maersk contended that contrary to because they are 2 separate corporations and there is no
Monet's allegations, the latter's shipment was loaded on proof of any collusion between them. (pp. 27-28, Rollo.)
March 10, 1984 in Maersk container subject to the condition
that the bill of lading would be issued upon Monet's Maersk appealed to the Court of Appeals which affirmed the
compliance with all the necessary export papers prior to the judgment of the trial court on July 12, 1989.
departure of the truck bearing said container for Manila on
March 11, 1984. Maersk further alleged that Monet's knew Hence, the instant petition wherein Maersk raises the
that the subject goods would not be brought to Manila
following issues:
without submitting all the necessary export papers, as
without them, Maersk would incur charges on the cargo
when deposited at the customs warehouse in Manila and 1. Respondent court erred in affirming the judgment of the
would subsequently be not allowed to export the goods by trial court despite the obvious fact that the trial court never
custom authorities. (p. 16, Record).i•t•c-aüsl acquired jurisdiction over the subject-matter of the action
because private respondents did not specify their claims for
damages and the correct filing fees were not paid.
Defendant New Asia, for its part, denied any liability in favor
of Monet's, alleging that Monet's has no cause of action
against it not being a party to the contract of carriage 2. It was error for respondent court to have awarded
between Monet and Maersk (p. 24, Record). P50,000.00 for "breach of contract" because this is not a
form of damage and petitioner has a right to know for what it
is being made to pay.
Defendants during the hearing of February 17, 1986 were
considered as in default for their failure to attend the
scheduled pre-trial conference despite proper notice. 3. Respondent court erred also in awarding moral damages
Subsequently, the order of default in regard to defendant to a corporation that was not shown to have a good
Maersk was lifted and the latter was allowed to cross- reputation that was damaged.
examine all the witnesses of Monet's. Defendant New Asia
did not move for the lifting of the order of default and 4. Again, respondent court erred in awarding exemplary
accordingly remained as in default. (p. 204, Record.) damages in the absense of evidence that petitioner acted in
a wanton or malevolent manner.
On March 28, 1988, the appealed judgment was rendered:
5. Finally, respondent court erred in awarding attorney's fees decision by the Court of Appeals before waking up to raise the question of
without any explanation for such an award. (pp. 13-14, jurisdiction. As this Court remarked in Tijam v. Sibonghanoy, 23 SCRA 29,
Rollo.) 37:
Petitioner's allegation that the decisions of the trial court and Were we to sanction such conduct on its part, We would in
the Court of Appeals were void for lack of jurisdiction (p. 75, effect be declaring as useless all the proceedings had in the
Rollo) as Monet did not pay the correct filing fee on its claims present case since it was commenced ... and compel the
for actual, moral and exemplary damages, the amounts of judgment creditors to go up their Calvary once more. The
which were not specified in the body and prayer of its inequity and unfairness of this is not only patent but
complaint, is anchored in the following ruling of this Court in revolting.
Manchester Development Corporation vs. CA (149 SCRA
526 [1987]) — A party may be barred by laches from invoking his plea (of
lack of jurisdiction) for the first time on appeal for the
... the trial court did not acquire jurisdiction over the case by purpose of annulling everything done in the case with the
the payment of only P410.00 as docket fee. ... active participation of said party invoking the plea. (Tijam vs.
Sibonghanoy, 23 SCRA 29, 34.)
To put a stop to this irregularity, henceforth all complaints,
petitions, answers and other similar pleadings should specify Since this is a case where some of the claims (for moral and exemplary
the amount of damages being prayed for not only in the body damages) were not specified in the plaintiff s pleading and were left for
of the pleading but also in the prayer, and said damages determination by the court, the applicable rule is the third rule set out in the
shall be considered in the assestment of the filing fees in any decision of this Court in Sun Insurance Office Ltd., et al. vs. Hon. Maximiano
case. Any pleading that fails to comply with the requirement Asuncion, et al., 170 SCRA 274, to wit:
shall not be accepted nor admitted, or shall otherwise be
expunged from the record. 3. Where the trial court acquires jurisdiction over a claim by
the filing of the appropriate pleading and payment of the
The Court acquires jurisdiction over any case only upon the prescribed filing fee but, subsequently, the judgment awards
payment of the prescribed docket fee. An amendment of the a claim not specified in the pleading, or if specified the same
complaint or similar pleading will not thereby vest jurisdiction has been left for determination by the court, the additional
in the court, much less the payment of the docket fee based filing fee therefore shall constitute a lien on the judgment. It
on the amounts sought in the amended pleading. (Emphasis shall be the responsibility of the Clerk of Court or his duly
supplied; pp. 568-569.) authorized deputy to enforce said lien and assess and collect
the additional fee.
Unlike Manchester, however, where the jurisdictional issue arising from
insufficiency of the docket fee paid, was seasonably raised in the answer of The Clerk of Court of the trial court shall assess and collect the proper
the defendant in the trial court, in this case the issue is being raised for the additional fees on the totality of the judgment for the private respondent (Id).
first time in this Court. Petitioner submitted to the jurisdiction of the trial court
without question. It filed a counterclaim seeking affirmative reliefs, and Monet's counsel in the trial court, Attorney Jesus Salazar, is hereby
actively took part in the trial (p. 53, Rollo). A party who voluntarily participates reprimanded for his unethical practice of not specifying the amount of
in the trial cannot later on raise the issue of the court's lack of jurisdiction damages sought in the body and prayer of his complaint in order to defraud
(Tan Boon Bee & Co. v. Judge Jarencio, 163 SCRA 205). the Government of the proper fee for docketing said complaint. He is warned
that a repetition of that malpractice will be dealt with more severely.
Maersk should have raised its objection to the trial court s jurisdiction when
the case was still in that court. It should not have waited for an adverse
WHEREFORE, the petition for certiorari is denied for lack of merit. However,
the Clerk of Court of the trial court shall assess and collect the fees due on
the judgment as if the same amounts were specified in the complaint. Costs
against the petitioner.
SO ORDERED.
Narvasa (Chairman), Cruz, Gancayco and Medialdea, JJ., concur.

G.R. No. 140954. April 12, 2005 Same; Same; Same; Same; Court will not entertain direct resort to certiorari
unless the redress desired cannot be obtained in the appropriate courts, and
HEIRS OF BERTULDO HINOG: Bertuldo Hinog II, Bertuldo Hinog III, exceptional and compelling circumstances, such as cases of national interest
Bertuldo Hinog, Jr., Jocelyn Hinog, Bertoldo Hinog IV, Bertoldo Hinog and of serious implications, justify the availment of the extraordinary remedy
V, Edgardo Hinog, Milagros H. Pabatao, Lilian H. King, Victoria H. of writ of certiorari, calling for the exercise of its primary jurisdiction.—This
Engracia, Terisita C. Hinog, Paz H. Besana, Roberto C. Hinog, Vicente Court will not entertain direct resort to certiorari unless the redress desired
C. Hinog, Roel C. Hinog, Marilyn C. Hinog, Bebot C. Hinog, lordes C. cannot be obtained in the appropriate courts, and exceptional and compelling
Hinog, Pablo Chiong, Arlene Lanasang (All respresented by Bertuldo circumstances, such as cases of national interest and of serious implications,
Hinog III), Petitioners, justify the availment of the extraordinary remedy of writ of certiorari, calling for
vs.
the exercise of its primary jurisdiction. Exceptional and compelling
HON. ACHILLES MELICOR, in his capacity as Presiding Judge, RTC,
Branch 4, 7th Judicial Region, Tagbiliran City, Bohol, and CUSTODIO circumstances were held present in the following cases: (a) Chavez vs.
BALANE, RUFO BALANE, HONORIO BALANE, and TOMAS BALANE, Romulo on citizens’ right to bear arms; (b) Government of the United States of
Respondents. America vs. Purganan on bail in extradition proceedings; (c) Commission on
Elections vs. Quijano-Padilla on government contract involving modernization
Remedial Law; Certiorari; Jurisdictions; Court’s original jurisdiction to issue and computerization of voters’ registration list; (d) Buklod ng Kawaning EIIB
writs of certiorari is not exclusive; It is shared with Regional Trial Courts and vs. Zamora on status and existence of a public office; and (e) Fortich vs.
the Court of Appeals.—Although the Supreme Court, Court of Appeals and the Corona on the so-called “Win-Win Resolution” of the Office of the President
Regional Trial Courts have concurrent jurisdiction to issue writs of certiorari, which modified the approval of the conversion to agro-industrial area.
prohibition, mandamus, quo warranto, habeas corpus and injunction, such
concurrence does not give the petitioner unrestricted freedom of choice of
court forum. As we stated in People vs. Cuaresma: This Court’s original Same; Same; Same; If a party invokes the jurisdiction of a court, he cannot
jurisdiction to issue writs of certiorari is not exclusive. It is shared by this Court thereafter challenge the court’s jurisdiction in the same case.—After
with Regional Trial Courts and with the Court of Appeals. This concurrence of recognizing the jurisdiction of the trial court by seeking affirmative relief in their
jurisdiction is not, however, to be taken as according to parties seeking any of motion to serve supplemental pleading upon private respondents, petitioners
the writs an absolute, unrestrained freedom of choice of the court to which are effectively barred by estoppel from challenging the trial court’s jurisdiction.
application therefor will be directed. There is after all a hierarchy of courts. That If a party invokes the jurisdiction of a court, he cannot thereafter challenge the
hierarchy is determinative of the venue of appeals, and also serves as a court’s jurisdiction in the same case. To rule otherwise would amount to
general determinant of the appropriate forum for petitions for the extraordinary speculating on the fortune of litigation, which is against the policy of the Court.
writs.
Same; Same; Same; Docket Fees; While the payment of the prescribed docket
Same; Same; Same; Two-Fold Rationale for the Rule.—The rationale for this fee is a jurisdictional requirement, even its non-payment at the time of filing
rule is two-fold: (a) it would be an imposition upon the precious time of this does not automatically cause the dismissal of the case, as long as the fee is
Court; and (b) it would cause an inevitable and resultant delay, intended or paid within the applicable prescriptive or reglementary period.—While the
otherwise, in the adjudication of cases, which in some instances had to be payment of the prescribed docket fee is a jurisdictional requirement, even its
remanded or referred to the lower court as the proper forum under the rules of non-payment at the time of filing does not automatically cause the dismissal of
procedure, or as better equipped to resolve the issues because this Court is the case, as long as the fee is paid within the applicable prescriptive or
not a trier of facts. reglementary period, more so when the party involved demonstrates a
willingness to abide by the rules prescribing such payment. Thus, when
insufficient filing fees were initially paid by the plaintiffs and there was no Same; Same; The remedy against an interlocutory order is generally not to
intention to defraud the government, the Manchester rule does not apply. resort forthwith to certiorari, but to continue with the case in due course and,
when an unfavorable verdict is handed down, to take an appeal in the manner
authorized by law.—The remedy against an interlocutory order is generally not
Same; Same; Same; Same; The Manchester rule has been modified in Sun to resort forthwith to certiorari, but to continue with the case in due course and,
Insurance Office, Ltd. (SIOL) vs. Asuncion; Guidelines Involving the Payment when an unfavorable verdict is handed down, to take an appeal in the manner
of Docket Fees.—Time and again, the Court has held that the Manchester rule authorized by law. Only when the court issued such order without or in excess
has been modified in Sun Insurance Office, Ltd. (SIOL) vs. Asuncion which of jurisdiction or with grave abuse of discretion and when the assailed
defined the following guidelines involving the payment of docket fees: 1. It is interlocutory order is patently erroneous and the remedy of appeal would not
not simply the filing of the complaint or appropriate initiatory pleading, but the afford adequate and expeditious relief will certiorari be considered an
payment of the prescribed docket fee, that vests a trial court with jurisdiction appropriate remedy to assail an interlocutory order. Such special
over the subject-matter or nature of the action. Where the filing of the initiatory circumstances are absolutely wanting in the present case.
pleading is not accompanied by payment of the docket fee, the court may allow
payment of the fees within a reasonable time but in no case beyond the
applicable prescriptive or reglementary period. 2. The same rule applies to Same; Same; Estoppel; Although the issue of jurisdiction may be raised at any
permissive counter-claims, third-party claims and similar pleadings, which stage of the proceedings as the same is conferred by law, it is nonetheless
shall not be considered filed until and unless the filing fee prescribed therefor settled that a party may be barred from raising it on ground of laches or
is paid. The court may also allow payment of said fee within a reasonable time estoppel.—After Bertuldo vigorously participated in all stages of the case
but also in no case beyond its applicable prescriptive or reglementary period. before the trial court and even invoked the trial court’s authority in order to ask
3. Where the trial court acquires jurisdiction over a claim by the filing of the for affirmative relief, petitioners, considering that they merely stepped into the
appropriate pleading and payment of the prescribed filing fee but, shoes of their predecessor, are effectively barred by estoppel from challenging
subsequently, the judgment awards a claim not specified in the pleading, or if the trial court’s jurisdiction. Although the issue of jurisdiction may be raised at
specified the same has been left for determination by the court, the additional any stage of the proceedings as the same is conferred by law, it is nonetheless
filing fee therefor shall constitute a lien on the judgment. It shall be the settled that a party may be barred from raising it on ground of laches or
responsibility of the Clerk of Court or his duly authorized deputy to enforce said estoppel.
lien and assess and collect the additional fee.
Same; Same; Certiorari under Rule 65 is a remedy narrow in scope and

Same; Same; Same; Same; Sun Insurance effectively modified SC Circular inflexible in character; Its principal function is to keep an inferior tribunal within
No. 7 by providing that filing fees for damages and awards that cannot be its jurisdiction.—To be sure, certiorari under Rule 65 is a remedy narrow in
estimated constitute liens on the awards finally granted by the trial court.—The scope and inflexible in character. It is not a general utility tool in the legal
fact that private respondents prayed for payment of damages “in amounts workshop. It offers only a limited form of review. Its principal function is to keep
justified by the evidence” does not call for the dismissal of the complaint for an inferior tribunal within its jurisdiction. It can be invoked only for an error of
violation of SC Circular No. 7, dated March 24, 1988 which required that all jurisdiction, that is, one where the act complained of was issued by the court,
complaints must specify the amount of damages sought not only in the body officer or a quasi-judicial body without or in excess of jurisdiction, or with grave
of the pleadings but also in the prayer in order to be accepted and admitted for abuse of discretion which is tantamount to lack or in excess of jurisdiction, not
filing. Sun Insurance effectively modified SC Circular No. 7 by providing that to be used for any other purpose, such as to cure errors in proceedings or to
filing fees for damages and awards that cannot be estimated constitute liens correct erroneous conclusions of law or fact. A contrary rule would lead to
on the awards finally granted by the trial court. confusion, and seriously hamper the administration of justice.
Same; Actions; Parties; Substitution of Party; Non-compliance with the rule on 1714; sometime in March 1980, they allowed Bertuldo to use a portion of the
substitution would render the proceedings and judgment of the trial court infirm said property for a period of ten years and construct thereon a small house of
because the court acquires no jurisdiction over the persons of the legal light materials at a nominal annual rental of ₱100.00 only, considering the
representatives or of the heirs on whom the trial and the judgment would be close relations of the parties; after the expiration of the ten-year period, they
binding.—No formal substitution of the parties was effected within thirty days demanded the return of the occupied portion and removal of the house
from date of death of Bertuldo, as required by Section 16, Rule 3 of the Rules constructed thereon but Bertuldo refused and instead claimed ownership of
the entire property.
of Court. Needless to stress, the purpose behind the rule on substitution is the
protection of the right of every party to due process. It is to ensure that the
deceased party would continue to be properly represented in the suit through Accordingly, private respondents sought to oust Bertuldo from the premises
of the subject property and restore upon themselves the ownership and
the duly appointed legal representative of his estate. Non-compliance with the
possession thereof, as well as the payment of moral and exemplary
rule on substitution would render the proceedings and judgment of the trial damages, attorney’s fees and litigation expenses "in amounts justified by the
court infirm because the court acquires no jurisdiction over the persons of the evidence." 2
legal representatives or of the heirs on whom the trial and the judgment would
be binding. On July 2, 1991, Bertuldo filed his Answer. He alleged ownership of the
disputed property by virtue of a Deed of Absolute Sale dated July 2, 1980,
executed by one Tomas Pahac with the knowledge and conformity of private
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari. respondents.3
After the pre-trial, trial on the merits ensued. On November 18, 1997, private
respondents rested their case. Thereupon, Bertuldo started his direct
examination. However, on June 24, 1998, Bertuldo died without completing
Veronico G. Petalcorin for petitioners. his evidence.
Paulino Clarin for private respondents. On August 4, 1998, Atty. Sulpicio A. Tinampay withdrew as counsel for
Bertuldo as his services were terminated by petitioner Bertuldo Hinog III.
Atty. Veronico G. Petalcorin then entered his appearance as new counsel for
DECISION
Bertuldo.4
AUSTRIA-MARTINEZ, J.:
On September 22, 1998, Atty. Petalcorin filed a motion to expunge the
complaint from the record and nullify all court proceedings on the ground that
Before us is a petition for certiorari and prohibition under Rule 65 of the private respondents failed to specify in the complaint the amount of damages
Rules of Court which assails the Orders dated March 22, 1999, August 13, claimed so as to pay the correct docket fees; and that under Manchester
1999 and October 15, 1999 of the Regional Trial Court, Branch 4, of Development Corporation vs. Court of Appeals,5 non-payment of the correct
Tagbilaran City, Bohol in Civil Case No. 4923. docket fee is jurisdictional.6
The factual background of the case is as follows: In an amended motion, filed on October 2, 1998, Atty. Petalcorin further
alleged that the private respondents failed to pay the correct docket fee since
On May 21, 1991, private respondents Custodio, Rufo, Tomas and Honorio, the main subject matter of the case cannot be estimated as it is for recovery
all surnamed Balane, filed a complaint for "Recovery of Ownership and of ownership, possession and removal of construction.7
Possession, Removal of Construction and Damages" against Bertuldo Hinog
(Bertuldo for brevity). They alleged that: they own a 1,399- square meter Private respondents opposed the motion to expunge on the following
parcel of land situated in Malayo Norte, Cortes, Bohol, designated as Lot No. grounds: (a) said motion was filed more than seven years from the institution
of the case; (b) Atty. Petalcorin has not complied with Section 16, Rule 3 of Bertuldo, so much so that the supposed heirs of Bertuldo are not specified in
the Rules of Court which provides that the death of the original defendant any pleading in the case. 18
requires a substitution of parties before a lawyer can have legal personality
to represent a litigant and the motion to expunge does not mention of any On July 14, 1999, petitioners manifested that the trial court having expunged
specific party whom he is representing; (c) collectible fees due the court can the complaint and nullified all court proceedings, there is no valid case and
be charged as lien on the judgment; and (d) considering the lapse of time, the complaint should not be admitted for failure to pay the correct docket
the motion is merely a dilatory scheme employed by petitioners.8 fees; that there should be no case to be reinstated and no case to proceed
as there is no complaint filed.19
In their Rejoinder, petitioners manifested that the lapse of time does not vest
the court with jurisdiction over the case due to failure to pay the correct After the submission of private respondents’ opposition20 and petitioners’
docket fees. As to the contention that deficiency in payment of docket fees rejoinder,21 the trial court issued the second assailed Order on August 13,
can be made as a lien on the judgment, petitioners argued that the payment 1999, essentially denying petitioners’ manifestation/rejoinder. The trial court
of filing fees cannot be made dependent on the result of the action taken.9 held that the issues raised in such manifestation/rejoinder are practically the
same as those raised in the amended motion to expunge which had already
On January 21, 1999, the trial court, while ordering the complaint to be been passed upon in the Order dated January 21, 1999. Moreover, the trial
expunged from the records and the nullification of all court proceedings taken court observed that the Order dated March 22, 1999 which reinstated the
for failure to pay the correct docket fees, nonetheless, held: case was not objected to by petitioners within the reglementary period or
even thereafter via a motion for reconsideration despite receipt thereof on
The Court can acquire jurisdiction over this case only upon the payment of March 26, 1999.22
the exact prescribed docket/filing fees for the main cause of action, plus
additional docket fee for the amount of damages being prayed for in the On August 25, 1999, petitioners filed a motion for reconsideration23 but the
complaint, which amount should be specified so that the same can be same was denied by the trial court in its third assailed Order dated October
considered in assessing the amount of the filing fees. Upon the complete 15, 1999. The trial court held that the Manchester rule was relaxed in Sun
payment of such fees, the Court may take appropriate action in the light of Insurance Office, Ltd. vs. Asuncion.24 Noting that there has been no
the ruling in the case of Manchester Development Corporation vs. Court of substitution of parties following the death of Bertuldo, the trial court directed
Appeals, supra.10 Atty. Petalcorin to comply with the provisions of Section 16, Rule 3 of the
Rules of Court. The trial court also reiterated that the Order dated March 22,
Accordingly, on January 28, 1999, upon payment of deficiency docket fee, 1999 reinstating the case was not assailed by petitioners within the
private respondents filed a manifestation with prayer to reinstate the case.11 reglementary period, despite receipt thereof on March 26, 1999.25
Petitioners opposed the reinstatement12 but on March 22, 1999, the trial
court issued the first assailed Order reinstating the case.13 On November 19, 1999, Atty. Petalcorin complied with the directive of the
trial court to submit the names and addresses of the heirs of Bertuldo.26
On May 24, 1999, petitioners, upon prior leave of court,14 filed their
supplemental pleading, appending therein a Deed of Sale dated November On November 24, 1999, petitioners filed before us the present petition for
15, 1982.15 Following the submission of private respondents’ opposition certiorari and prohibition.27 They allege that the public respondent
thereto,16 the trial court, in its Order dated July 7, 1999, denied the committed grave abuse of discretion in allowing the case to be reinstated
supplemental pleading on the ground that the Deed of Absolute Sale is a after private respondents paid the docket fee deficiency since the trial court
new matter which was never mentioned in the original answer dated July 2, had earlier expunged the complaint from the record and nullified all
1991, prepared by Bertuldo’s original counsel and which Bertuldo verified; proceedings of the case and such ruling was not contested by the private
and that such new document is deemed waived in the light of Section 1, Rule respondents. Moreover, they argue that the public respondent committed
917 of the Rules of Court. The trial court also noted that no formal grave abuse of discretion in allowing the case to be filed and denying the
substitution of the parties was made because of the failure of defendant’s manifestation with motion to dismiss, despite the defect in the complaint
counsel to give the names and addresses of the legal representatives of
which prayed for damages without specifying the amounts, in violation of SC forum under the rules of procedure, or as better equipped to resolve the
Circular No. 7, dated March 24, 1988. issues because this Court is not a trier of facts.32
In their Comment, private respondents aver that no grave abuse of discretion Thus, this Court will not entertain direct resort to it unless the redress desired
was committed by the trial court in reinstating the complaint upon the cannot be obtained in the appropriate courts, and exceptional and compelling
payment of deficiency docket fees because petitioners did not object thereto circumstances, such as cases of national interest and of serious implications,
within the reglementary period. Besides, Atty. Petalcorin possessed no legal justify the availment of the extraordinary remedy of writ of certiorari, calling
personality to appear as counsel for the heirs of Bertuldo until he complies for the exercise of its primary jurisdiction. Exceptional and compelling
with Section 16, Rule 3 of the Rules of Court.28 circumstances were held present in the following cases: (a) Chavez vs.
Romulo33 on citizens’ right to bear arms; (b) Government of the United
At the outset, we note the procedural error committed by petitioners in States of America vs. Purganan34 on bail in extradition proceedings; (c)
directly filing the instant petition before this Court for it violates the Commission on Elections vs. Quijano-Padilla35 on government contract
established policy of strict observance of the judicial hierarchy of courts. involving modernization and computerization of voters’ registration list; (d)
Buklod ng Kawaning EIIB vs. Zamora36 on status and existence of a public
office; and (e) Fortich vs. Corona37 on the so-called "Win-Win Resolution" of
Although the Supreme Court, Court of Appeals and the Regional Trial Courts
have concurrent jurisdiction to issue writs of certiorari, prohibition, the Office of the President which modified the approval of the conversion to
mandamus, quo warranto, habeas corpus and injunction, such concurrence agro-industrial area.
does not give the petitioner unrestricted freedom of choice of court forum.29
As we stated in People vs. Cuaresma:30 In this case, no special and important reason or exceptional and compelling
circumstance analogous to any of the above cases has been adduced by the
petitioners so as to justify direct recourse to this Court. The present petition
This Court's original jurisdiction to issue writs of certiorari is not exclusive. It
should have been initially filed in the Court of Appeals in strict observance of
is shared by this Court with Regional Trial Courts and with the Court of
the doctrine on the hierarchy of courts. Failure to do so is sufficient cause for
Appeals. This concurrence of jurisdiction is not, however, to be taken as
the dismissal of the petition at bar.
according to parties seeking any of the writs an absolute, unrestrained
freedom of choice of the court to which application therefor will be directed.
There is after all a hierarchy of courts. That hierarchy is determinative of the In any event, even if the Court disregards such procedural flaw, the
venue of appeals, and also serves as a general determinant of the petitioners’ contentions on the substantive aspect of the case fail to invite
appropriate forum for petitions for the extraordinary writs. A becoming regard judgment in their favor.
for that judicial hierarchy most certainly indicates that petitions for the
issuance of extraordinary writs against first level ("inferior") courts should be The unavailability of the writ of certiorari and prohibition in this case is borne
filed with the Regional Trial Court, and those against the latter, with the Court out of the fact that petitioners principally assail the Order dated March 22,
of Appeals. A direct invocation of the Supreme Court’s original jurisdiction to 1999 which they never sought reconsideration of, in due time, despite receipt
issue these writs should be allowed only when there are special and thereof on March 26, 1999. Instead, petitioners went through the motion of
important reasons therefor, clearly and specifically set out in the petition. This filing a supplemental pleading and only when the latter was denied, or after
is [an] established policy. It is a policy necessary to prevent inordinate more than three months have passed, did they raise the issue that the
demands upon the Court’s time and attention which are better devoted to complaint should not have been reinstated in the first place because the trial
those matters within its exclusive jurisdiction, and to prevent further over- court had no jurisdiction to do so, having already ruled that the complaint
crowding of the Court’s docket.31 shall be expunged.
The rationale for this rule is two-fold: (a) it would be an imposition upon the After recognizing the jurisdiction of the trial court by seeking affirmative relief
precious time of this Court; and (b) it would cause an inevitable and resultant in their motion to serve supplemental pleading upon private respondents,
delay, intended or otherwise, in the adjudication of cases, which in some petitioners are effectively barred by estoppel from challenging the trial court’s
instances had to be remanded or referred to the lower court as the proper jurisdiction.38 If a party invokes the jurisdiction of a court, he cannot
thereafter challenge the court’s jurisdiction in the same case.39 To rule said fee within a reasonable time but also in no case beyond its applicable
otherwise would amount to speculating on the fortune of litigation, which is prescriptive or reglementary period.
against the policy of the Court.40
3. Where the trial court acquires jurisdiction over a claim by the filing of the
Nevertheless, there is a need to correct the erroneous impression of the trial appropriate pleading and payment of the prescribed filing fee but,
court as well as the private respondents that petitioners are barred from subsequently, the judgment awards a claim not specified in the pleading, or if
assailing the Order dated March 22, 1999 which reinstated the case because specified the same has been left for determination by the court, the additional
it was not objected to within the reglementary period or even thereafter via a filing fee therefor shall constitute a lien on the judgment. It shall be the
motion for reconsideration despite receipt thereof on March 26, 1999. responsibility of the Clerk of Court or his duly authorized deputy to enforce
said lien and assess and collect the additional fee.
It must be clarified that the said order is but a resolution on an incidental
matter which does not touch on the merits of the case or put an end to the Plainly, while the payment of the prescribed docket fee is a jurisdictional
proceedings.41 It is an interlocutory order since there leaves something else requirement, even its non-payment at the time of filing does not automatically
to be done by the trial court with respect to the merits of the case.42 As such, cause the dismissal of the case, as long as the fee is paid within the
it is not subject to a reglementary period. Reglementary period refers to the applicable prescriptive or reglementary period, more so when the party
period set by the rules for appeal or further review of a final judgment or involved demonstrates a willingness to abide by the rules prescribing such
order, i.e., one that ends the litigation in the trial court. payment.46 Thus, when insufficient filing fees were initially paid by the
plaintiffs and there was no intention to defraud the government, the
Moreover, the remedy against an interlocutory order is generally not to resort Manchester rule does not apply.47
forthwith to certiorari, but to continue with the case in due course and, when
an unfavorable verdict is handed down, to take an appeal in the manner Under the peculiar circumstances of this case, the reinstatement of the
authorized by law.43 Only when the court issued such order without or in complaint was just and proper considering that the cause of action of private
excess of jurisdiction or with grave abuse of discretion and when the assailed respondents, being a real action, prescribes in thirty years,48 and private
interlocutory order is patently erroneous and the remedy of appeal would not respondents did not really intend to evade the payment of the prescribed
afford adequate and expeditious relief will certiorari be considered an docket fee but simply contend that they could not be faulted for inadequate
appropriate remedy to assail an interlocutory order.44 Such special assessment because the clerk of court made no notice of demand or
circumstances are absolutely wanting in the present case. reassessment.49 They were in good faith and simply relied on the
assessment of the clerk of court.
Time and again, the Court has held that the Manchester rule has been
modified in Sun Insurance Office, Ltd. (SIOL) vs. Asuncion45 which defined Furthermore, the fact that private respondents prayed for payment of
the following guidelines involving the payment of docket fees: damages "in amounts justified by the evidence" does not call for the
dismissal of the complaint for violation of SC Circular No. 7, dated March 24,
1. It is not simply the filing of the complaint or appropriate initiatory pleading, 1988 which required that all complaints must specify the amount of damages
but the payment of the prescribed docket fee, that vests a trial court with sought not only in the body of the pleadings but also in the prayer in order to
jurisdiction over the subject-matter or nature of the action. Where the filing of be accepted and admitted for filing. Sun Insurance effectively modified SC
the initiatory pleading is not accompanied by payment of the docket fee, the Circular No. 7 by providing that filing fees for damages and awards that
court may allow payment of the fees within a reasonable time but in no case cannot be estimated constitute liens on the awards finally granted by the trial
beyond the applicable prescriptive or reglementary period. court.50
2. The same rule applies to permissive counterclaims, third-party claims and Thus, while the docket fees were based only on the real property valuation,
similar pleadings, which shall not be considered filed until and unless the the trial court acquired jurisdiction over the action, and judgment awards
filing fee prescribed therefor is paid. The court may also allow payment of which were left for determination by the court or as may be proven during
trial would still be subject to additional filing fees which shall constitute a lien
on the judgment. It would then be the responsibility of the Clerk of Court of To be sure, certiorari under Rule 6556 is a remedy narrow in scope and
the trial court or his duly authorized deputy to enforce said lien and assess inflexible in character. It is not a general utility tool in the legal workshop.57 It
and collect the additional fees.51 offers only a limited form of review. Its principal function is to keep an inferior
tribunal within its jurisdiction.58 It can be invoked only for an error of
It is worth noting that when Bertuldo filed his Answer on July 2, 1991, he did jurisdiction, that is, one where the act complained of was issued by the court,
not raise the issue of lack of jurisdiction for non-payment of correct docket officer or a quasi-judicial body without or in excess of jurisdiction, or with
fees. Instead, he based his defense on a claim of ownership and participated grave abuse of discretion which is tantamount to lack or in excess of
in the proceedings before the trial court. It was only in September 22, 1998 or jurisdiction,59 not to be used for any other purpose,60 such as to cure errors
more than seven years after filing the answer, and under the auspices of a in proceedings or to correct erroneous conclusions of law or fact.61 A
new counsel, that the issue of jurisdiction was raised for the first time in the contrary rule would lead to confusion, and seriously hamper the
motion to expunge by Bertuldo’s heirs. administration of justice.
After Bertuldo vigorously participated in all stages of the case before the trial Petitioners utterly failed to show that the trial court gravely abused its
court and even invoked the trial court’s authority in order to ask for affirmative discretion in issuing the assailed resolutions. On the contrary, it acted
relief, petitioners, considering that they merely stepped into the shoes of their prudently, in accordance with law and jurisprudence.
predecessor, are effectively barred by estoppel from challenging the trial
court’s jurisdiction. Although the issue of jurisdiction may be raised at any WHEREFORE, the instant petition for certiorari is DISMISSED for lack of
stage of the proceedings as the same is conferred by law, it is nonetheless merit.
settled that a party may be barred from raising it on ground of laches or
estoppel.52 No costs.
Moreover, no formal substitution of the parties was effected within thirty days SO ORDERED.
from date of death of Bertuldo, as required by Section 16, Rule 353 of the
Rules of Court. Needless to stress, the purpose behind the rule on Puno, (Chairman), Callejo, Sr., Tinga and Chico-Nazario, JJ., concur.
substitution is the protection of the right of every party to due process. It is to
ensure that the deceased party would continue to be properly represented in
the suit through the duly appointed legal representative of his estate.54 Non-
compliance with the rule on substitution would render the proceedings and
judgment of the trial court infirm because the court acquires no jurisdiction
over the persons of the legal representatives or of the heirs on whom the trial
and the judgment would be binding.55 Thus, proper substitution of heirs must
be effected for the trial court to acquire jurisdiction over their persons and to
obviate any future claim by any heir that he was not apprised of the litigation
against Bertuldo or that he did not authorize Atty. Petalcorin to represent him.
The list of names and addresses of the heirs was submitted sixteen months
after the death of Bertuldo and only when the trial court directed Atty.
Petalcorin to comply with the provisions of Section 16, Rule 3 of the Rules of
Court. Strictly speaking therefore, before said compliance, Atty. Petalcorin
had no standing in the court a quo when he filed his pleadings. Be that as it
may, the matter has been duly corrected by the Order of the trial court dated
October 15, 1999.
G.R. No. 136325. July 29, 2005 possession of, or for partition or condemnation of, or foreclosure of a mortgage
on a real property.’ ”
MANUEL M. SERRANO, Petitioners,
vs.
EUGENIO C. DELICA, Respondents. Same; Same; Same; It is the assessed value of the realty, not the “BIR zonal
valuation” that is the kind of valuation required by the Rule to be the basis for
Actions; Docket Fees; Docket fees are intended to take care of court expenses the computation of the docket fees; Where the correct docket fee is not paid,
in the handling of cases in terms of cost of supplies, use of equipment, salaries the court does not acquire jurisdiction over the case.—Considering that
and fringe benefits of personnel, etc., computed as to man-hours used in the respondent’s complaint is a real action, the Rule requires that “the assessed
handling of each case; It is not simply the filing of the complaint or appropriate value of the property, or if there is none, the estimated value thereof shall be
initiatory pleading, but the payment of the prescribed docket fees that vests a alleged by the claimant and shall be the basis in computing the fees.” We note,
trial court with jurisdiction over the subject matter or nature of the action.—We however, that neither the “assessed value” nor the “estimated value” of the
cannot overemphasize the importance of paying the correct docket fees. Such questioned parcels of land were alleged by respondent in both his original and
fees are intended to take care of court expenses in the handling of cases in amended complaint. What he stated in his amended complaint is that the
terms of cost of supplies, use of equipment, salaries and fringe benefits of disputed realties have a “BIR zonal valuation” of P1,200.00 per square meter.
personnel, etc., computed as to man-hours used in the handling of each case. However, the alleged “BIR zonal valuation” is not the kind of valuation required
The payment of said fees, therefore, cannot be made dependent on the result by the Rule. It is the assessed value of the realty. Having utterly failed to
of the action taken, without entailing tremendous losses to the government and comply with the requirement of the Rule that he shall allege in his complaint
to the judiciary in particular. Thus, the rule is that “upon the filing of the pleading the assessed value of his real properties in controversy, the correct docket fee
or other application which initiates an action or proceeding, the fees prescribed cannot be computed. As such, his complaint should not have been accepted
therefor shall be paid in full.” However, a litigant who is a pauper is exempt by the trial court. We thus rule that it has not acquired jurisdiction over the
from the payment of the docket fees. But the fees shall be a lien on the present case for failure of herein respondent to pay the required docket fee.
judgment rendered in favor of said pauper litigant, unless the court otherwise On this ground alone, respondent’s complaint is vulnerable to dismissal.
provides. It is not simply the filing of the complaint or appropriate initiatory
pleading, but the payment of the prescribed docket fees that vests a trial court PETITION for review on certiorari of the decision and resolution of the Court
with jurisdiction over the subject matter or nature of the action. of Appeals.
Same; Same; Pleadings and Practice; The allegations in the complaint and the The facts are stated in the opinion of the Court.
character of the reliefs sought are the criteria in determining the nature of an
action.—In the case at bar, petitioner impugns the Court of Appeals’ ruling that Counsellors Circle Law Firm for petitioner.
respondent’s complaint in Civil Case No. 97-120 is not capable of pecuniary Emiliano S. Samson, R. Balderama-Samson, Mary Anne B. Samson-
estimation and that, therefore, the docket fee is fixed at P600.00 pursuant to Willis collaborating counsels for petitioner.
Section 7(b)(1), Rule 141 of the Revised Rules of Court. We agree with
petitioner that the Court of Appeals erred in issuing such ruling. It should have Rico V. Domingo and Rodolfo M. Caluag for respondent.
considered the allegations of the complaint and the character of the reliefs
sought, the criteria in determining the nature of an action. A careful
DECISION
examination of respondent’s complaint is that it is a real action. In Paderanga
vs. Buissan, we held that “in a real action, the plaintiff seeks the recovery of
SANDOVAL-GUTIERREZ, J.:
real property, or, as stated in Section 2(a), Rule 4 of the Revised Rules of
Court, a real action is one ‘affecting title to real property or for the recovery of
At bar is a petition for review on certiorari1 assailing the Decision2 dated exemplary damages in the amount of ₱200,000.00, as well as attorney’s fee
September 30, 1998 and Resolution dated November 13, 1998 of the Court of ₱200,000.00 and costs of litigation. Respondent likewise prayed that,
of Appeals in CA-G.R. SP No. 46632, entitled "Manuel M. Serrano, petitioner, pending trial on the merits, a temporary restraining order and a writ of
vs. Hon. Alberto L. Lerma, Presiding Judge, Regional Trial Court, Branch preliminary injunction be issued ordering the defendants to immediately
256, Muntinlupa City, and Eugenio C. Delica, respondents. restore him to his possession of the parcels of land in question; and that after
trial, the writ of injunction be made permanent.
The petition stemmed from the following facts:
Petitioner then filed his answer with compulsory counterclaim, denying the
On June 30, 1997, Eugenio C. Delica, respondent, filed with the Regional material allegations of the complaint.
Trial Court, Branch 256, Muntinlupa City, presided by Judge Alberto L.
Lerma, a complaint for cancellation of Deeds of Sale, Transfer Certificates of Respondent later amended his complaint.
Title, Joint Venture Agreement, and damages, with prayer for the issuance of
a writ of preliminary injunction and temporary restraining order, docketed as On August 5, 1997, the trial court issued a temporary restraining order and
Civil Case No. 97-120. Impleaded as defendants were Manuel M. Serrano, on September 8, 1997, a preliminary injunction directing petitioner and his
now petitioner, Manuel P. Blanco, MBJ Land, Inc., and MARILAQUE Land, co-defendants to immediately restore respondent to his possession.
Inc.
Petitioner then filed consolidated motions for reconsideration praying that the
The complaint alleges inter alia that respondent is the registered owner of ten complaint be dismissed for respondent’s failure to pay the required docket
parcels of land situated in Bagbagan, Muntinlupa City, with a total area of fee; and that Judge Lerma be directed to inhibit himself from hearing the
2,062,475 square meters, more or less, covered by ten Transfer Certificates case.
of Title (TCT) Nos. S-12619 to S-12628 of the Registry of Deeds, same city.
On August 10, 1995, after having been "promised with financial bonanza" by The trial court, in its Order dated January 7, 1998, denied petitioner’s
petitioner and Manuel Blanco, respondent executed in favor of the latter a
consolidated motions.
special power of attorney. Blanco then sold to MBJ Land, Inc. respondent’s
three parcels of land covered by TCT Nos. S-12625, S-12626 and S-12628.
Thus, these titles were cancelled and in lieu thereof, TCT Nos. 207282, Petitioner seasonably filed with the Court of Appeals a petition for certiorari
207283 and 207284 were issued in the name of MBJ Land, Inc. and prohibition with application for a preliminary injunction and temporary
restraining order assailing the trial court’s twin Orders dated September 8,
1997 ordering the issuance of a writ of preliminary injunction; and denying his
On December 4, 1996, MBJ Land, Inc. entered into a Joint Venture consolidated motions dated January 7, 1998. Petitioner raised three issues:
Agreement with MARILAQUE Land, Inc. involving the three parcels of land. (a) whether respondent paid the correct docket fee; (b) whether the trial
court’s issuance of the writ of preliminary injunction is in order; and (c)
On December 23, 1996, petitioner Serrano again "unduly influenced, coerced whether Judge Lerma should inhibit himself from hearing the case.
and intimidated" respondent into executing an affidavit wherein he confirmed
that he sold his remaining seven parcels of land, covered by TCT Nos. S- On September 30, 1998, the Court of Appeals rendered a Decision partially
12619 to S-126124 and S-12627, to petitioners. Later, respondent found that granting the petition by: (1) affirming the trial court’s ruling that the docket
these seven titles were cancelled and new titles (TCT Nos. 209636 to fee was correctly paid; (2) setting aside the trial court’s Order directing the
209642) were issued in petitioner’s name based on a spurious Deed of issuance of a writ of preliminary injunction; and (3) leaving the matter of
Absolute Sale. inhibition to the discretion of Judge Lerma.
Respondent thus prayed in his complaint that the special power of attorney, Petitioner then filed a motion for partial reconsideration of the Court of
affidavit, the new titles issued in the names of petitioner and MBJ Land, Inc.,
Appeals’ ruling that respondent correctly paid the docket fee and that the
and contracts of sale be cancelled; and that petitioner and his co-defendants
motion for inhibition should be addressed to Judge Lerma’s sound discretion.
be ordered to pay respondent, jointly and severally, actual, moral and
In a Resolution dated November 13, 1998, the Appellate Court denied the A careful examination of respondent’s complaint is that it is a real action. In
motion. Paderanga vs. Buissan,8 we held that "in a real action, the plaintiff seeks the
recovery of real property, or, as stated in Section 2(a), Rule 4 of the
Hence the instant petition for review on certiorari. Revised Rules of Court,9 a real action is one ‘affecting title to real property
or for the recovery of possession of, or for partition or condemnation of, or
foreclosure of a mortgage on a real property.’"
The core issues for our resolution are:
Obviously, respondent’s complaint is a real action involving not only the

1. Whether respondent paid the correct docket fee when he filed his
complaint in Civil Case No. 97-120; and recovery of real properties, but likewise the cancellation of the titles thereto.
Considering that respondent’s complaint is a real action, the Rule requires

2. Whether the matter of inhibition should be addressed to Judge Lerma’s
that "the assessed value of the property, or if there is none, the estimated
discretion.
value thereof shall be alleged by the claimant and shall be the basis in
computing the fees."10
On the first issue, we cannot overemphasized the importance of paying the
correct docket fees. Such fees are intended to take care of court expenses in
We note, however, that neither the "assessed value" nor the "estimated
the handling of cases in terms of cost of supplies, use of equipment, salaries
value" of the questioned parcels of land were alleged by respondent in both
and fringe benefits of personnel, etc., computed as to man-hours used in the
his original and amended complaint. What he stated in his amended
handling of each case. The payment of said fees, therefore, cannot be made
dependent on the result of the action taken, without entailing tremendous complaint is that the disputed realties have a "BIR zonal valuation" of
₱1,200.00 per square meter. However, the alleged "BIR zonal valuation" is
losses to the government and to the judiciary in particular. 3
not the kind of valuation required by the Rule. It is the assessed value of the
realty.11 Having utterly failed to comply with the requirement of the Rule that
Thus, the rule is that "upon the filing of the pleading or other application he shall allege in his complaint the assessed value of his real properties in
which initiates an action or proceeding, the fees prescribed therefor shall be controversy, the correct docket fee cannot be computed. As such, his
paid in full."4 However, a litigant who is a pauper is exempt from the payment complaint should not have been accepted by the trial court. We thus rule that
of the docket fees. But the fees shall be a lien on the judgment rendered in it has not acquired jurisdiction over the present case for failure of herein
favor of said pauper litigant, unless the court otherwise provides.5 respondent to pay the required docket fee. On this ground alone,
respondent’s complaint is vulnerable to dismissal.
It is not simply the filing of the complaint or appropriate initiatory pleading, but
the payment of the prescribed docket fees that vests a trial court with Since the complaint is dismissible, the second issue on whether Judge
jurisdiction over the subject matter or nature of the action.6 Lerma should inhibit himself from hearing the case has become moot and
academic.
In the case at bar, petitioner impugns the Court of Appeals’ ruling that
respondent’s complaint in Civil Case No. 97-120 is not capable of WHEREFORE, the petition is GRANTED. The assailed Decision and
pecuniary estimation and that, therefore, the docket fee is fixed at ₱600.00 Resolution of the Court of Appeals in CA-G.R. SP No. 46632 are hereby
pursuant to Section 7(b)(1), Rule 141 of the Revised Rules of Court. REVERSED. The complaint in Civil Case No. 97-120 is ordered DISMISSED
without prejudice.
We agree with petitioner that the Court of Appeals erred in issuing such
ruling. It should have considered the allegations of the complaint and the SO ORDERED.
character of the reliefs sought, the criteria in determining the nature of an
action.7
Panganiban, (Chairman), Carpio-Morales, and Garcia, JJ., concur.
G.R. No. 165147 July 9, 2008 claims not specified or to claims although specified are left for determination
of the court is limited only to any damages that may arise after the filing of the
PHILIPPINE FIRST INSURANCE CO., INC. and PARAMOUNT GENERAL complaint or similar pleading for then it will not be possible for the claimant to
INSURANCE CORPORATION, Petitioners, specify nor speculate as to the amount thereof. (Emphasis and italics supplied)
vs.
PYRAMID LOGISTICS AND TRUCKING CORPORATION (formerly PETITION for review on certiorari of the decision of the Court of Appeals.
PANACOR INTEGRATED WAREHOUSING AND TRUCKING
CORPORATION), Respondent.
Remedial Law; Pleadings and Practice; Jurisdiction; Docket Fees; The
effect of the Sun Insurance ruling clarified by the Court in Tacay v. Regional Baltazar Y. Repol for petitioners.
Trial Court of Tagum, Davao del Norte, 180 SCRA 433 (1989); Trial court now
Manuel S. Fonacier, Jr. for respondent.
being authorized to allow payment of the fee within a reasonable time but in
no case beyond the applicable prescriptive period or reglementary period.—In
Tacay v. Regional Trial Court of Tagum, Davao del Norte, 180 SCRA 433
(1989), the Court clarified the effect of the Sun Insurance ruling on the
Manchester ruling as follows: As will be noted, the requirement in Circular No. DECISION
7 [of this Court which was issued based on the Manchester ruling] that
complaints, petitions, answers, and similar pleadings should specify the CARPIO MORALES, J.:
amount of damages being prayed for not only in the body of the pleading but
also in the prayer, has not been altered. What has been revised is the rule that The issue, in the main, in the present case is whether respondent, Pyramid
subsequent “amendment of the complaint or similar pleading will not thereby Logistics and Trucking Corporation (Pyramid), which filed on November 7,
vest jurisdiction in the Court, much less the payment of the docket fee based 2001 a complaint,1 denominated as one for specific performance and
damages, against petitioners Philippine First Insurance Company, Inc.
on the amount sought in the amended pleading,” the trial court now being
(Philippine First) and Paramount General Insurance Corporation (Paramount)
authorized to allow payment of the fee within a reasonable time but in no case
before the Regional Trial Court (RTC) of Makati, docketed as Civil Case No.
beyond the applicable prescriptive period or reglementary period. Moreover, a 01-1609, paid the correct docket fee; if in the negative, whether the complaint
new rule has been added, governing the awards of claims not specified in the should be dismissed or Pyramid can still be ordered to pay the fee.
pleading—i.e., damages arising after the filing of the complaint or similar
pleading—as to which the additional filing fee therefore shall constitute a lien Pyramid sought to recover the proceeds of two insurance policies issued to
on the judgment. it, Policy No. IN-002904 issued by petitioner Paramount, and Policy No. MN-
MCL-HO-00-0000007-00 issued by petitioner Philippine First. Despite
demands, petitioners allegedly failed to settle them, hence, it filed the
Same; Same; Same; Same; It is the duty of the parties claiming such damages complaint subject of the present petition.
to specify the amount sought on the basis of which the court may make a
proper determination, and for the proper assessment of the appropriate docket In its complaint, Pyramid alleged that on November 8, 2000, its delivery van
fee; Exception is limited only to any damages that may arise after the filing of bearing license plate number PHL-545 which was loaded with goods
the complaint or similar pleading.—While it is true that the determination of belonging to California Manufacturing Corporation (CMC) valued at PESOS
NINE HUNDRED SEVEN THOUSAND ONE HUNDRED FORTY NINE AND
certain damages x x x is left to the sound discretion of the court, it is the duty
SEVEN/100 (₱907,149.07) left the CMC Bicutan Warehouse but the van,
of the parties claiming such damages to specify the amount sought on the
together with the goods, failed to reach its destination and its driver and
basis of which the court may make a proper determination, and for the proper helper were nowhere to be found, to its damage and prejudice; that it filed a
assessment of the appropriate docket fees. The exception contemplated as to criminal complaint against the driver and the helper for qualified theft, and a
claim with herein petitioners as co-insurers of the lost goods but, in violation Php907,149.07" and consequently, "plaintiff incurred expenses, suffered
of petitioners’ undertaking under the insurance policies, they refused without damages and was constrained to engage the services of counsel to enforce
just and valid reasons to compensate it for the loss; and that as a direct and protect its right to recover compensation under the said policies and for
consequence of petitioners’ failure, despite repeated demands, to comply which services, it obligated itself to pay the sum equivalent to twenty-five
with their respective undertakings under the Insurance Policies by (25%) of any recovery in the instant action, as and for attorney’s fees and
compensating for the value of the lost goods, it suffered damages and was legal expenses".
constrained to engage the services of counsel to enforce and protect its right
to recover compensation under said policies, for which services it obligated On the other hand, in the prayer in the Complaint, plaintiff deliberately
itself to pay the sum equivalent to twenty-five (25%) of any amount recovered omitted to specify what these damages are. x x x
as and for attorney’s fees and legal expenses.2
xxxx
Pyramid thus prayed. . . that after due proceedings, judgment be rendered,
ordering [herein petitioners] to comply with their obligation under their
Verily, this deliberate omission by the plaintiff is clearly intended for no other
respective Insurance Policies by paying to [it] jointly and severally, the claims
purposes than to evade the payment of the correct filing fee if not to mislead
arising from the subject losses. the docket clerk, in the assessment of the filing fee. In fact, the docket clerk
in the instant case charged the plaintiff a total of Php610.00 only as a filing
THAT, [herein petitioners] be adjudged jointly and severally to pay to [it], in fee, which she must have based on the amount of Php50,000.00 [attorney’s
addition to the foregoing, the following: fees] only.10 (Emphasis in the original; italics and underscoring supplied)
1. The sum of PHP 50,000.00 plus PHP 1,500.00 for each Court Petitioners cited11 Manchester Development Corporation v. Court of
session attended by counsel until the instant [case] is finally Appeals12 which held:
terminated, as and for attorney’s fees;
x x x [A]ll complaints, petitions, answers and other similar pleadings should
2. The costs of suit[;]3 (Underscoring supplied) specify the amount of damages being prayed for not only in the body of the
pleading but also in the prayer, and said damages shall be considered in the
and for other reliefs just and equitable in the premises.4 assessment of the filing fees in any case. Any pleading that fails to comply
with this requirement shall not be accepted or admitted, or shall otherwise be
Pyramid was assessed ₱610 docket fee, apparently on the basis of the expunged from the record.13 (Emphasis and underscoring supplied)
amount of ₱50,000 specified in the prayer representing attorney’s fees,
which it duly paid.5 They cited too Sun Insurance Office, Ltd. v. Asuncion14 which held that "[i]t is
not simply the filing of the complaint or appropriate pleading, but the payment
Pyramid later filed a 1st Amended Complaint6 containing minor changes in its of the prescribed docket fee, that vests a trial court with jurisdiction over the
body7 but bearing the same prayer.8 Branch 148 of the Makati RTC to which subject-matter or nature of the action."15
the complaint was raffled admitted the Amended Complaint.9
Petitioners thus concluded:
Petitioners filed a Motion to Dismiss on the ground of, inter alia, lack of
jurisdiction, Pyramid not having paid the docket fees in full, arguing thus: With the above cases as a backdrop, the Supreme Court, in revising the
rules of pleading and practice in the 1997 Rules of Civil Procedure, added a
xxxx tenth ground to a Motion to Dismiss – to wit, "[t]hat a condition precedent for
filing claim [sic] has not been complied with.["]
In the body of the Amended Complaint, plaintiff alleged that the goods
belonging to California Manufacturing Co., Inc. (CMC) is [sic] "valued at
On the contrary, if plaintiff would insist that its claim against the defendants is Petitioners did indeed eventually file before the Court of Appeals a Petition
only Php50,000.00 plus Php 1,500.00 as appearance fee per court hearing, for Certiorari (With Preliminary Injunction and Urgent Prayer for Restraining
then it follows that it is the Metropolitan Trial Court which has jurisdiction over Order)26 posing the following two of three queries, viz:
this case, not this Honorable Court. Such amount is way below the minimum
jurisdictional amount prescribed by the rules in order to confer jurisdiction to First. Does [Pyramid’s] deliberate omission to pay the required correct docket
the Regional Trial Court.16 (Underscoring supplied) and filing fee vest the trial court [with] jurisdiction to entertain the subject
matter of the instant case?
To the Motion to Dismiss Pyramid filed its Opposition,17 alleging that if there
was a mistake in the assessment of the docket fees, the trial court was not Second. [Is] the instant case an action for specific performance or simply one
precluded from acquiring jurisdiction over the complaint as "it has the for damages or recovery of a sum of money?
authority to direct the mistaken party to complete the docket fees in the
course of the proceedings . . ."18 The Opposition merited a Reply19 from
x x x x27
petitioners.
By Decision of June 3, 2004,28 the Court of Appeals partially granted
By Order of June 3, 2002, the trial court20 denied the Motion to Dismiss in petitioners’ petition for certiorari by setting aside the trial judge’s assailed
this wise:
orders and ordering Pyramid to file the correct docket fees within a
reasonable time, it holding that while the complaint was denominated as one
xxxx for specific performance, it sought to recover from petitioners Pyramid’s
"claims arising from the subject losses." The appellate court ratiocinated:
Indeed, a perusal of the Complaint reveals that while plaintiff made mention
of the value of the goods, which were lost, the prayer of plaintiff did not xxxx
indicate its exact claim from the defendants. The Complaint merely prayed
defendants "to comply with their obligation under their respective insurance Indeed, it has been held that "it is not simply the filing of the complaint or
policies by paying to plaintiff jointly and severally, the claims arising from the appropriate initiatory pleading, but the payment of the prescribed docket fee
subject losses" and did not mention the amount of PHP907,149.07, which is
that vests a trial court with jurisdiction over the subject matter or nature of the
the value of the goods and which is also the subject of insurance. This
action." To determine the docket fees, it is necessary to determine the true
resulted to the assessment and payment of docket fees in the amount of
nature of the action by examining the allegations of the complaint. x x x
P610 only. The Court, even without the Motion to Dismiss filed by defendant,
actually noted such omission which is actually becoming a practice for some
lawyers. For whatever purpose it may be, the Court will not dwell into it. In xxxx
this instant case, this being for specific performance, it is not dismissible on
that ground but unless proper docket fees are paid, the Court can only grant While the captions of the complaint and 1st amended complaint denominated
what was prayed for in the Complaint. the case as one for "Specific Performance and Damages", the allegations
and prayer therein show that the specific performance sought by private
x x x x21 (Emphasis and underscoring supplied) respondent was for petitioners to "comply with their obligation under their
respective Insurance Policies by paying to plaintiff jointly and severally, the
claims arising from the subject losses" as well as the attorney’s fees and
Petitioners’ Motion for Reconsideration22 of the denial of their Motion to
costs of suit. Obviously, what constitutes specific performance is the
Dismiss having been denied23 by Order of August 1, 2002, they filed their
payment itself by petitioners of private respondent’s claims arising from the
Answer with Compulsory Counterclaim ad Cautelam,24 alleging that they losses it allegedly incurred. x x x29
intended to file a Petition for Certiorari with the Court of Appeals.25
xxxx
Public respondent should have ordered private respondent to pay the correct maintained the correctness of the assessment made.34 (Underscoring
docket fees on the basis of the allegations of the complaint. x x x supplied)
xxxx By Resolution of August 23, 2004, the Court of Appeals denied petitioners’
Motion for Reconsideration;35 hence, the present Petition for Review on
While it has been held in Manchester Development Corporation vs. Court of Certiorari,36 raising the issues of whether the appellate court erred:
Appeals x x x that "any pleading that fails to comply with this requirement of
specifying the amount of damages not only in the body of the pleading but . . . WHEN IT APPLIED IN THE INSTANT CASE THE LIBERAL RULE
also in the prayer shall not be accepted nor admitted, or shall otherwise be ENUNCIATED IN SUN INSURANCE OFFICE, LTD. (SIOL) VS. ASUNCION,
expunged from the record," this rule was relaxed in subsequent cases, 170 SCRA 274 AND NATIONAL STEEL CORPORATION VS. COURT OF
wherein payment of the correct docket fees was allowed within a reasonable APPEALS, 302 SCRA 523 (1999) IN RESPECT TO THE PAYMENT OF
time. . . THE PRESCRIBED FILING AND DOCKET FEES DESPITE CLEAR
SHOWING OF RESPONDENT’S INTENTION TO EVADE THE PAYMENT
x x x x30 (Emphasis and underscoring supplied) OF THE CORRECT DOCKET FEE WHICH WARRANTS THE
APPLICATION OF THE DOCTRINE LAID DOWN IN MANCHESTER
DEVELOPMENT CORPORATION VS. COURT OF APPEALS, 149 SCRA
Thus the appellate court disposed:
562.
WHEREFORE, the petition is partially granted. The Orders dated June 3,
2002 and August 1, 2002 of public respondent are partially set aside insofar . . . WHEN IT DID NOT APPLY THE RULING OF THIS HONORABLE
TRIBUNAL IN MARCOPPER MINING CORPORATION VS. GARCIA, 143
as they dispensed with the payment of the correct docket fees.
SCRA 178, TAN VS. DIRECTOR OF FORESTRY, 125 SCRA 302, AND
Consequently, [Pyramid] is hereby directed to pay the correct docket fees on
CHINA ROAD AND BRIDGE CORPORATION VS. COURT OF APPEALS,
the basis of the losses alleged in the body of the complaint, plus the
348 SCRA 401.37 (Underscoring supplied)
attorney’s fees mentioned in the prayer, within a reasonable time which
should not go beyond the applicable prescriptive or reglementary period. In
all other respects, the said Orders are affirmed.31 (Underscoring supplied) Petitioners invoke the doctrine in Manchester Development Corporation v.
Court of Appeals38 that a pleading which does not specify in the prayer the
amount sought shall not be admitted or shall otherwise be expunged, and
Petitioners filed a Motion for Reconsideration32 of the appellate court’s
that the court acquires jurisdiction only upon the payment of the prescribed
decision. Pyramid filed its Comment and Opposition to the Motion for
Reconsideration,33 arguing thus: docket fee.39
Pyramid, on the other hand, insists, in its Comment on the Petition,40 on the
xxxx
application of Sun Insurance Office, Ltd. (SIOL) v. Asuncion41 and
subsequent rulings relaxing the Manchester ruling by allowing payment of the
In the present case, [Pyramid] thru its Complaint simply sought from docket fee within a reasonable time, in no case beyond the applicable
petitioners compliance with their contractual undertaking as insurers of the prescriptive or reglementary period, where the filing of the initiatory pleading
goods insured which were lost in [its] custody. Private respondent did not is not accompanied by the payment of the prescribed docket fee.42
specify the extent of petitioners’ obligation as it left the matter entirely in the
judgment of the trial court to consider. Thus, the Complaint was labeled
In Tacay v. Regional Trial Court of Tagum, Davao del Norte,43 the Court
"Specific Performance" which [Pyramid] submitted to the Clerk of Court for
assessment of the docket fee, after which, it paid the same based on the said clarified the effect of the Sun Insurance ruling on the Manchester ruling as
assessment. There was no indication whatsoever that [Pyramid] had refused follows:
to pay; rather, it merely argued against petitioners’ submissions as it
As will be noted, the requirement in Circular No. 7 [of this Court which was
issued based on the Manchester ruling44 ] that complaints, petitions,
answers, and similar pleadings should specify the amount of damages being in the main the collection of its claims-sums of money representing losses
prayed for not only in the body of the pleading but also in the prayer, has not the amount of which it, by its own admission, "knew."46 And, indeed, it failed
been altered. What has been revised is the rule that subsequent to specify in its prayer in the complaint the amount of its claims/damages.
"amendment of the complaint or similar pleading will not thereby vest
jurisdiction in the Court, much less the payment of the docket fee based on When Pyramid amended its complaint, it still did not specify, in its prayer, the
the amount sought in the amended pleading," the trial court now being amount of claims/damages it was seeking. In fact it has the audacity to
authorized to allow payment of the fee within a reasonable time but in no inform this Court, in its Comment on the present Petition, that
case beyond the applicable prescriptive period or reglementary period.
Moreover, a new rule has been added, governing the awards of claims not
x x x In the natural order of things, when a litigant is given the opportunity to
specified in the pleading – i.e., damages arising after the filing of the spend less for a docket fee after submitting his pleading for assessment by
complaint or similar pleading – as to which the additional filing fee therefore the Office of the Clerk of Court, he would not decline it inasmuch as to
shall constitute a lien on the judgment.
request for a higher assessment under the circumstances [for such] is
against his interest and would be senseless. Placed under the same
Now, under the Rules of Court, docket or filing fees are assessed on the situation, petitioner[s] would certainly do likewise. To say otherwise would
basis of the "sum claimed," on the one hand, or the "value of the property in certainly be dishonest,47
litigation or the value of the estate," on the other. . .
which comment drew petitioners to conclude as follows:
Where the action is purely for the recovery of money or damages, the docket
fees are assessed on the basis of the aggregate amount claimed, exclusive
[This] only shows respondent’s dishonesty and lack of regard of the rules.
only of interests and costs. In this case, the complaint or similar pleading Following this line of reasoning, respondent would do everything if only for it
should, according to Circular No. 7 of this Court, "specify the amount of
to spend less for the filing fee, even to the extent of circumventing and
damages being prayed for not only in the body of the pleading but also in the
defying the rule on the payment of the filing fee.
prayer, and said damages shall be considered in the assessment of filing
fees in any case."
In spite of the fact that the respondent was already caught in the quagmire of
its own cobweb of deception, it further justified its unethical act by
Two situations may arise. One is where the complaint or similar pleading sets
ratiocinating that "placed under the same situation, petitioner would certainly
out a claim purely for money and damages and there is no statement of the
do likewise, to say otherwise would certainly be dishonest". This attitude of
amounts being claimed. In this event the rule is that the pleading will "not be
the respondent is very alarming! Having been caught red-handed, the
accepted nor admitted, or shall otherwise be expunged from the record." In
honorable thing that respondent should have done is admit its own violation
other words, the complaint or pleading may be dismissed, or the claims as to rather than justify an act which it knows is a clear contravention of the rules
which amounts are unspecified may be expunged, although as aforestated and jurisprudence.48 (Italics and emphasis in the original)
the Court may, on motion, permit amendment of the complaint and payment
of the fees provided the claim has not in the meantime become time-barred.
The other is where the pleading does specify the amount of every claim, but Pyramid’s following justification for omitting to specify in the prayer of its
the fees paid are insufficient; and here again, the rule now is that the court complaint the amount of its claims/damages, viz:
may allow a reasonable time for the payment of the prescribed fees, or the
balance thereof, and upon such payment, the defect is cured and the court xxxx
may properly take cognizance of the action, unless in the meantime
prescription has set in and consequently barred the right of action. 45 x x x While respondent knew its losses and alleged them in the body of the
(Emphasis and underscoring supplied) Complaint, it was not aware of the extent of petitioners’ respective
liability under the two insurance policies. The allegation of respondent’s
Indeed, Pyramid captioned its complaint as one for "specific performance losses, albeit, without repeating them in its prayer for relief was not motivated
and damages" even if it was, as the allegations in its body showed, seeking by an intention to mislead, cheat or defraud the Court. It just left the matter of
liability arising from two separate and distinct Insurance Policies covering the of this Court, as well as of that of the appellate court, would not have been
same insurable risk for the trial court’s determination, hence, respondent unnecessarily sapped.
came up with an action for "specific performance[,]"49 (Emphasis and
underscoring supplied) The Court at this juncture thus reminds Pyramid’s counsel to observe Canon
12 of the Code of Professional Ethics which enjoins a lawyer to "exert every
fails to impress. effort and consider it his duty to assist in the speedy and efficient
administration of justice," and Rule 12.04 of the same Canon which enjoins a
As the salient allegations of Pyramid’s complaint show and as priorly stated, lawyer "not [to] unduly delay a case, impede the execution of a judgment or
they constitute, in the main, an action for collection of its claims it admittedly misuse court processes." And the Court reminds too the trial judge to bear in
"knew." mind that the nature of an action is determined by the allegations of the
pleadings51 and to keep abreast of all laws and prevailing jurisprudence,
Assuming arguendo that Pyramid has other claims the amounts of which are consistent with the standard that magistrates must be the embodiments of
yet to be determined by the trial court, the rule established in Manchester competence, integrity and independence.52
which was embodied in this Court’s Circular No. 7-88 issued on March 24,
1988, as modified by the Sun Insurance ruling, still applies. Consider this WHEREFORE, in light of the foregoing discussions, the petition is DENIED.
Court’s pronouncement bearing on the matter in Ayala Corporation v.
Madayag:501awphil SO ORDERED.
xxxx
Apparently, the trial court misinterpreted paragraph 3 of the [Sun Insurance]

ruling of this Court wherein it stated that "where the judgment awards a claim
not specified in the pleading, or if specified, the same has been left for the
determination of the court, the additional filing fee therefor shall constitute a
lien on the judgment" by considering it to mean that where in the body and
prayer of the complaint there is a prayer xxx the amount of which is left to the
discretion of the Court, there is no need to specify the amount being sought,
and that any award thereafter shall constitute a lien on the judgment.
x x x While it is true that the determination of certain damages x x x is left to

the sound discretion of the court, it is the duty of the parties claiming such
damages to specify the amount sought on the basis of which the court may
make a proper determination, and for the proper assessment of the
appropriate docket fees. The exception contemplated as to claims not
specified or to claims although specified are left for determination of the court
is limited only to any damages that may arise after the filing of the complaint
or similar pleading for then it will not be possible for the claimant to specify
nor speculate as to the amount thereof. (Emphasis and underscoring
supplied)
If respondent Pyramid’s counsel had only been forthright in drafting the

complaint and taking the cudgels for his client and the trial judge assiduous
in applying Circular No. 7 vis a vis prevailing jurisprudence, the precious time
G.R. No. 181842 February 5, 2010 The facts are stated in the opinion of the Court.
Diosdado V. Macapagal for petitioners.

METROPOLITAN BANK AND TRUST CO. and SOLIDBANK
CORPORATION, Petitioners,
vs. Luisito E. Cruz for respondent.
BERNARDITA H. PEREZ, represented by her Attorney-in-Fact PATRIA
H. PEREZ, Respondent. DECISION
Pleadings and Practice; Docket Fees; When insufficient filing fees were CARPIO MORALES, J.:
initially paid by the plaintiff and there was no intention to defraud the
government, the Manchester rule does not apply.—In Manchester On September 17, 1997, petitioner Solidbank Corporation (Solidbank) forged
Development Corporation v. Court of Appeals, 149 SCRA 562 (1987) the Court a lease contract with Bernardita H. Perez (respondent), represented by her
held that a pleading which does not specify in the prayer the amount sought attorney-in-fact Patria H. Perez1, over two parcels of land located in Sta.
shall not be admitted or shall be expunged, and that a court acquires Maria, Bulacan for a period of 15 years commencing on January 1, 1998.
jurisdiction only upon payment of the prescribed docket fee. This rule was Solidbank was to, as it did, construct a one-storey building specifically suited
relaxed in Sun Insurance Office, Ltd. v. Asuncion, 170 SCRA 274 (1989) which for bank premises.
was echoed in the 2005 case of Heirs of Bertuldo Hinog v. Melico, 455 SCRA
460 (2005), the pertinent portion of the decision in the latter case reads: Solidbank was later acquired by its co-petitioner Metropolitan Bank and Trust
Plainly, while the payment of prescribed docket fee is a jurisdictional Company (Metrobank), the latter as the surviving entity.
requirement, even its non-payment at the time of filing does not automatically
cause the dismissal of the case, as long as the fee is paid within the applicable On September 24, 2002, Metrobank sent a notice of termination of the lease
prescriptive or reglementary period, more so when the party involved contract effective September 30, 2002.2 Respondent, objecting to the
demonstrates a willingness to abide by the rules prescribing such payment. termination, filed a complaint for breach of contract and damages against
herein petitioners Solidbank and Metrobank before the Regional Trial Court
Thus, when insufficient filing fees were initially paid by the plaintiffs and there
(RTC) of Malolos, Bulacan praying that, inter alia, herein petitioners be
was no intention to defraud the government, the Manchester rule does not
ordered to pay her "the would be unrealized income for the ensuing idle
apply. months of the said building."3
Metrobank asserted in its Answer with Counterclaim, however, that the lease
Jurisdiction; Estoppel; While lack of jurisdiction may be raised at any time, a contract did not prohibit pre-termination by the parties.
party may be held in estoppel if it has actively taken part in the proceedings
being questioned.—Metrobank raised the issue of jurisdiction only before the After respondent rested her case, Metrobank was, by Order of January 12,
appellate court after it and its co-petitioner participated in the proceedings 2006, declared to have waived its right to present evidence after its counsel
before the trial court. While lack of jurisdiction may be raised at any time, a incurred several unexcused absences.
party may be held in estoppel if, as in the present case, it has actively taken
part in the proceedings being questioned. By Decision of April 5, 2006, Branch 22 of the Malolos RTC ruled in favor of
respondent, disposing as follows:
PETITION for review on certiorari of a decision of the Court of Appeals. WHEREFORE, IN VIEW OF THE FOREGOING, judgment is hereby
rendered in favor of the plaintiff and against the defendants ordering the
latter, jointly and severally:
1. To pay the plaintiff the amount of ₱212,322.60 as unrealized return to the Leased Property. It would have been speculative therefore on
income before the filing of the case (Sept. 2002 to Feb. 2003); the part of plaintiff-appellee Perez to allege in her Complaint any unrealized
income for the remaining period of the Lease Contract considering that the
2. To pay the plaintiff the amount of ₱2,013,753.03 as unrealized possibility of defendant-appellant Metrobank reconsidering its decision to
(income) after the filing of the case up to present (March 2003 to terminate the said Lease Contract and returning to the Leased Property at
March 2006); some future time was not definitively foreclosed when the Complaint was
filed. In light of her predicament, plaintiff-appellee Perez was thus justified in
just making a general prayer for the court a quo to award unrealized income
3. To pay the plaintiff the would be unrealized income for the ensuing
for the "ensuing idle months" of the Leased Property.8 (italics in the original;
idle months of said building amounting to P7,126,494.30 (covering
April 2006 until expiration of the contract of lease); underscoring supplied)
The petition is partly meritorious.

4. To pay plaintiff the amount of ₱200,000.00 as moral damages;
In Manchester Development Corporation v. Court of Appeals,9 the Court held

5. To pay plaintiff the amount of ₱100,000.00 as exemplary
damages; that a pleading which does not specify in the prayer the amount sought shall
not be admitted or shall be expunged, and that a court acquires jurisdiction
only upon payment of the prescribed docket fee. This rule was relaxed in Sun
6. To pay plaintiff the amount of ₱100,000.00 as attorney’s fees and Insurance Office, Ltd. v. Asuncion10 which was echoed in the 2005 case of
Heirs of Bertuldo Hinog v. Melico, the pertinent portion of the decision in the
7. To pay plaintiff as litigation expenses. latter case reads:
SO ORDERED.4 (emphasis and underscoring supplied) Plainly, while the payment of prescribed docket fee is a jurisdictional
requirement, even its non-payment at the time of filing does not automatically
On appeal, Metrobank challenged, in the main, the trial court’s award of cause the dismissal of the case, as long as the fee is paid within the
"unrealized income for the ensuing idle months" despite respondent’s failure applicable prescriptive or reglementary period, more so when the party
to pay docket fees thereon to thus render the complaint dismissible for lack involved demonstrates a willingness to abide by the rules prescribing such
of jurisdiction. payment. Thus, when insufficient filing fees were initially paid by the plaintiffs
and there was no intention to defraud the government, the Manchester rule
By Decision5 of November 23, 2007, the appellate court affirmed that of the does not apply.11 (emphasis and underscoring supplied)
trial court6 and denied, by Resolution of February 21, 2008, a reconsideration
thereof. Hence, the present petition for review on certiorari. Metrobank takes exception to the application of Sun Insurance Office to the
present case because, by its claim, respondent deliberately concealed the
In her Comment, respondent admitted that the filing fees she paid did not insufficient payment of docket fees.
cover her prayer for unrealized income for the ensuing idle months, for "at
the time of filing and payment[,] the period that the building would be idle Metrobank’s position fails. The ensuing months in which the leased premises
could not yet be determined."7 would be rendered vacant could not be determined at the time of the filing of
the complaint. It bears recalling that the building constructed on respondent’s
In sustaining respondent’s justification for nonpayment of additional docket leased premises was specifically constructed to house a bank, hence, the
fees, the appellate court held: idle period before another occupant with like business may opt to lease
would be difficult to project.
For one, plaintiff-appellee Perez could not have been certain at the time she
filed the Complaint that defendant-appellant Metrobank would no longer
On Metrobank’s raising the issue of lack of jurisdiction over the complaint for The Court notes that respondent’s witness-attorney-in-fact testified only on
respondent’s failure to pay the correct docket fees, apropos is the ruling in the existence of the lease agreement and unrealized income due to pre-
National Steel Corporation v. Court of Appeals: 12 termination. Since an award of moral damages is predicated on a categorical
showing from the claimant that emotional and mental sufferings were actually
Although the payment of the proper docket fees is a jurisdictional experienced, absent any evidence thereon in the present case,15 the award
requirement, the trial court may allow the plaintiff in an action to pay the must be disallowed. And so too must the award of attorney’s fees, absent an
same within a reasonable time before the expiration of the applicable indication in the trial court’s Decision of the factual basis thereof, the award
prescriptive or reglementary period. If the plaintiff fails to comply with this having been merely stated in the dispositive portion.16 Parenthetically, while
requirement, the defendant should timely raise the issue of jurisdiction or respondent prayed in her complaint for the award of attorney’s fees and
else he would be considered in estoppel. In the latter case, the balance testified during the trial that:
between the appropriate docket fees and the amount actually paid by the
plaintiff will be considered a lien on any award he may obtain in his favor. 13 Q: Now, in connection with the filing of this case and hiring your
(emphasis and underscoring supplied)1avvph!1 lawyer, do you have agreement with your counsel with respect to
attorney’s fees?
Metrobank raised the issue of jurisdiction only before the appellate court after
it and its co-petitioner participated in the proceedings before the trial court. A: ₱100,000.00 acceptance fees.
While lack of jurisdiction may be raised at any time, a party may be held in
estoppel if, as in the present case, it has actively taken part in the Q: What about appearance fees?
proceedings being questioned.
A: I forgot already, sir.,17
The foregoing disposition notwithstanding, respondent is liable for the
balance between the actual fees paid and the correct payable filing fees to
there is no showing that she submitted any documentary evidence in support
include an assessment on the award of unrealized income, following Section
thereof.
2 of Rule 141 which provides:
WHEREFORE, the petition is in part GRANTED. The November 23, 2007
SEC. 2. Fees in lien. – Where the court in its final judgment awards a claim Decision of the Court of Appeals is MODIFIED. The Clerk of Court of the
not alleged, or a relief different from, or more than that claimed in the
Regional Trial Court of Malolos, Bulacan is ordered to reassess, determine
pleading, the party concerned shall pay the additional fees which shall
and collect additional fees that should be paid by respondent within fifteen
constitute a lien on the judgment in satisfaction of said lien. The clerk of court (15) days, in accordance with the foregoing discussion of the Court, provided
shall assess and collect the corresponding fee (underscoring supplied), the applicable prescriptive or reglementary period has not
and jurisprudence, viz:

yet expired, which additional fees shall constitute a lien on the judgment in
satisfaction of said lien. The award of moral and exemplary damages and
The exception contemplated as to claims not specified or to claims although attorney’s fees is DELETED.
specified are left for determination of the court is limited only to any damages
that may arise after the filing of the complaint or similar pleading for then it
In all other respects, the appellate court’s Decision is AFFIRMED.
will not be possible for the claimant to specify nor speculate as to the amount
thereof.14 (emphasis and underscoring supplied)
SO ORDERED.
A word on the grant of moral and exemplary damages and attorney’s fees.
G.R. No. 89070 May 18, 1992 the corporation, keep within the lawful scope of their authority in so acting, and
act in good faith, do not become liable, whether civilly or otherwise, for the
BENGUET ELECTRlC COOPERATIVE, INC., petitioner, consequences of their acts. Those acts, when they are such a nature and are
vs. done under such circumstances, are properly attributed to the corporation
NATIONAL LABOR RELATIONS COMMISSION, PETER COSALAN and alone and no personal liability is incurred by such officers and Board members,
BOARD OF DIRECTORS OF BENGUET ELECTRIC COOPERATIVE, INC.,
* respondents. PETITION for certiorari to review the decision of the National Labor Relations
Commission.
Remedial Law; Pleadings and Practice; The established rule is that the date
of delivery of pleadings to a private letter-forwarding agency is not to be
considered as the date of filing thereof in court and that in such cases, the date The facts are stated in the opinion of the Court.
of actual receipt by the court and not the date of delivery to the private carrier
is deemed the date of filing of that pleading.—Respondent Board members' Raymundo W. Celino for respondent Peter Cosalan.
contention runs counter to the established rule that transmission through a Reenan Orate for respondent Board of Directors of BENECO.
private carrier or letter-forwarder—instead of the Philippine Post Office—is not
a recognized mode of filing pleadings. The established rule is that the date of
delivery of pleadings to a private letter-forwarding agency is not to be
considered as the date of filing thereof in court, and that in such cases, the
FELICIANO, J.:
date of actual receipt by the court, and not the date of delivery to the private
carrier, is deemed the date of filing of that pleading.
Private respondent Peter Cosalan was the General Manager of Petitioner
Benguet Electric Cooperative, Inc. ("Beneco"), having been elected as such
by the Board of Directors of Beneco, with the approval of the National
Same; Same; The applicable rule was that the ten-day reglementary period to Electrification Administrator, Mr. Pedro Dumol, effective 16 October 1982.
perfect an appeal is mandatory and jurisdictional in nature, that failure to file
an appeal within the reglementary period renders the assailed decision final On 3 November 1982, respondent Cosalan received Audit Memorandum No.
and executory and no longer subject to review.—There was, therefore, no 1 issued by the Commission on Audit ("COA"). This Memorandum noted that
reason grounded upon substantial justice and the prevention of serious cash advances received by officers and employees of petitioner Beneco in
miscarriage of justice that might have justified the NLRC in disregarding the the amount of P129,618.48 had been virtually written off in the books of
ten-day reglementary period for perfection of an appeal by the respondent Beneco. In the Audit Memorandum, the COA directed petitioner Beneco to
Board members, Accordingly, the applicable rule was that the ten-day secure the approval of the National Electrification Administration ("NEA")
reglementary period to perfect an appeal is mandatory and jurisdictional in before writing off or condoning those cash advances, and recommended the
nature, that failure to file an appeal within the reglementary period renders the adoption of remedial measures.
assailed decision final and executory and no longer subject to review.
On 12 November 1982, COA issued another Memorandum — Audit
Memorandum No. 2 –– addressed to respondent Peter Cosalan, inviting
attention to the fact that the audit of per diems and allowances received by
Corporation Law; Damages; The Board Members and Officers of a corporation officials and members of the Board of Directors of Beneco showed
who purport to act for and in behalf of the corporation, keep within the lawful substantial inconsistencies with the directives of the NEA. The Audit
scope of their authority in so acting and act in good faith, do not become liable Memorandum once again directed the taking of immediate action in
whether civilly or otherwise for the consequences of their acts.—The Board conformity with existing NEA regulations.
members and officers of a corporation who purport to act for and in behalf of
On 19 May 1983, petitioner Beneco received the COA Audit Report on the until such suspension is sooner lifted,
financial status and operations of Beneco for the eight (8) month period revoked or rescinded by the Board of
ended 30 September 1982. This Audit Report noted and enumerated Directors; that all monies due him are
irregularities in the utilization of funds amounting to P37 Million released by withheld until cleared;
NEA to Beneco, and recommended that appropriate remedial action be
taken. 3. Resolution No. 176-84 dated September 25, 1984;
Having been made aware of the serious financial condition of Beneco and . . . that Resolution No. 151-84, dated
what appeared to be mismanagement, respondent Cosalan initiated September 15, 1984 stands as preventive
implementation of the remedial measures recommended by the COA. The suspension for GM Peter M. Cosalan. 1
respondent members of the Board of Beneco reacted by adopting a series of
resolutions during the period from 23 June to 24 July 1984. These Board
Respondent Cosalan nevertheless continued to work as General Manager of
Resolutions abolished the housing allowance of respondent Cosalan;
Beneco, in the belief that he could be suspended or removed only by duly
reduced his salary and his representation and commutable allowances;
authorized officials of NEA, in accordance with provisions of P.D. No, 269, as
directed him to hold in abeyance all pending personnel disciplinary actions; amended by P.D. No. 1645 (the statute creating the NEA, providing for its
and struck his name out as a principal signatory to transactions of petitioner capitalization, powers and functions and organization), the loan agreement
Beneco.
between NEA and petitioner Beneco 2 and the NEA Memorandum of 2 July
1980. 3 Accordingly, on 5 October and 10 November 1984, respondent
During the period from 28 July to 25 September 1984, the respondent Cosalan requested petitioner Beneco to release the compensation due him.
Beneco Board members adopted another series of resolutions which resulted Beneco, acting through respondent Board members, denied the written
in the ouster of respondent Cosalan as General Manager of Beneco and his request of respondent Cosalan.
exclusion from performance of his regular duties as such, as well as the
withholding of his salary and allowances. These resolutions were as follows:
Respondent Cosalan then filed a complaint with the National Labor Relations
Commission ("NLRC") on 5 December 1984 against respondent members of
1. Resolution No. 91-4 dated 28 July 1984: the Beneco Board, challenging the legality of the Board resolutions which
ordered his suspension and termination from the service and demanding
. . . that the services of Peter M. Cosalan as payment of his salaries and allowances. On 18 February 1985, Cosalan
General Manager of BENECO is terminated amended his complaint to implead petitioner Beneco and respondent Board
upon approval of the National Electrification members, the latter in their respective dual capacities as Directors and as
Administration; private individuals.
2. Resolution No. 151-84 dated September 15, 1984; In the course of the proceedings before the Labor Arbiter, Cosalan filed a
motion for reinstatement which, although opposed by petitioner Beneco, was
. . . that Peter M. Cosalan is hereby granted on 23 October 1987 by Labor Arbiter Amado T. Adquilen. Petitioner
suspended from his position as General Beneco complied with the Labor Arbiter's order on 28 October 1987 through
Manager of the Benguet Electric Resolution No. 10-90.
Cooperative, Inc. (BENECO) effective as of
the start of the office hours on September On 5 April 1988, the Labor Arbiter rendered a decision (a) confirming
24, 1984, until a final decision has been Cosalan's reinstatement; (b) ordering payment to Cosalan of his backwages
reached by the NEA on his dismissal; and allowances by petitioner Beneco and respondent Board members, jointly
and severally, for a period of three (3) years without deduction or
. . . that GM Cosalan's suspension from qualification, amounting to P344,000.00; and (3) ordering the individual
office shall remain in full force and effect Board members to pay, jointly and severally, to Cosalan moral damages of
P50,000.00 plus attorney's fees of ten percent (10%) of the wages and Respondent Board member's contention runs counter to the established rule
allowances awarded him. that transmission through a private carrier or letter-forwarder –– instead of
the Philippine Post Office –– is not a recognized mode of filing pleadings. 5
Respondent Board members appealed to the NLRC, and there filed a The established rule is that the date of delivery of pleadings to a private
Memorandum on Appeal. Petitioner Beneco did not appeal, but moved to letter-forwarding agency is not to be considered as the date of filing thereof in
dismiss the appeal filed by respondent Board members and for execution of court, and that in such cases, the date of actual receipt by the court, and not
judgment. By this time, petitioner Beneco had a new set of directors. the date of delivery to the private carrier, is deemed the date of filing of that
pleading. 6
In a decision dated 21 November 1988, public respondent NLRC modified
the award rendered by the Labor Arbiter by declaring that petitioner Beneco There, was, therefore, no reason grounded upon substantial justice and the
alone, and not respondent Board members, was liable for respondent prevention of serious miscarriage of justice that might have justified the
Cosalan's backwages and allowances, and by ruling that there was no legal NLRC in disregarding the ten-day reglementary period for perfection of an
basis for the award of moral damages and attorney's fees made by the Labor appeal by the respondent Board members. Accordingly, the applicable rule
Arbiter. was that the ten-day reglementary period to perfect an appeal is mandatory
and jurisdictional in nature, that failure to file an appeal within the
Beneco, through its new set of directors, moved for reconsideration of the reglementary period renders the assailed decision final and executory and no
longer subject to review. 7 The respondent Board members had thus lost
NLRC decision, but without success.
their right to appeal from the decision of the Labor Arbiter and the NLRC
should have forthwith dismissed their appeal memorandum.
In the present Petition for Certiorari, Beneco's principal contentions are two-
fold: first, that the NLRC had acted with grave abuse of discretion in
There is another and more compelling reason why the respondent Board
accepting and giving due course to respondent Board members' appeal
members' appeal should have been dismissed forthwith: that appeal was
although such appeal had been filed out of time; and second, that the NLRC
quite bereft of merit. Both the Labor Arbiter and the NLRC had found that the
had acted with grave abuse of discretion amounting to lack of jurisdiction in
indefinite suspension and termination of services imposed by the respondent
holding petitioner alone liable for payment of the backwages and allowances
due to Cosalan and releasing respondent Board members from liability Board members upon petitioner Cosalan was illegal. That illegality flowed,
therefor. firstly, from the fact that the suspension of Cosalan was continued long after
expiration of the period of thirty (30) days, which is the maximum period of
preventive suspension that could be lawfully imposed under Section 4, Rule
We consider that petitioner's first contention is meritorious. There is no XIV of the Omnibus Rules Implementing the Labor Code. Secondly, Cosalan
dispute about the fact that the respondent Beneco Board members received had been deprived of procedural due process by the respondent Board
the decision of the labor Arbiter on 21 April 1988. Accordingly, and because members. He was never informed of the charges raised against him and was
1 May 1988 was a legal holiday, they had only up to 2 May 1988 within which given no opportunity to meet those charges and present his side of whatever
to perfect their appeal by filing their memorandum on appeal. It is also not dispute existed; he was kept totally in the dark as to the reason or reasons
disputed that the respondent Board members' memorandum on appeal was why he had been suspended and effectively dismissed from the service of
posted by registered mail on 3 May 1988 and received by the NLRC the Beneco Thirdly, respondent Board members failed to adduce any cause
following day. 4 Clearly, the memorandum on appeal was filed out of time. which could reasonably be regarded as lawful cause for the suspension and
dismissal of respondent Cosalan from his position as General Manager of
Respondent Board members, however, insist that their Memorandum on Beneco. Cosalan was, in other words, denied due process both procedural
Appeal was filed on time because it was delivered for mailing on 1 May 1988 and substantive. Fourthly, respondent Board members failed to obtain the
to the Garcia Communications Company, a licensed private letter carrier. prior approval of the NEA of their suspension now dismissal of Cosalan,
The Board members in effect contend that the date of delivery to Garcia which prior approval was required, inter alia, under the subsisting loan
Communications was the date of filing of their appeal memorandum. agreement between the NEA and Beneco. The requisite NEA approval was
subsequently sought by the respondent Board members; no NEA approval
was granted.
In reversing the decision of the Labor Arbiter declaring petitioner Beneco and alone and no personal liability is incurred by such officers and Board
respondent Board members solidarily liable for the salary, allowances, members. 9
damages and attorney's fees awarded to respondent Cosalan, the NLRC
said: The major difficulty with the conclusion reached by the NLRC is that the
NLRC clearly overlooked or disregarded the circumstances under which
. . . A perusal of the records show that the members of the respondent Board members had in fact acted in the instant case. As noted
Board never acted in their individual capacities. They were earlier, the respondent Board members responded to the efforts of Cosalan
acting as a Board passing resolutions affecting their general to take seriously and implement the Audit Memoranda issued by the COA
manager. If these resolutions and resultant acts explicitly addressed to the petitioner Beneco, first by stripping Cosalan of the
transgressed the law, to then BENECO for which the Board privileges and perquisites attached to his position as General Manager, then
was acting in behalf should bear responsibility. The records by suspending indefinitely and finally dismissing Cosalan from such position.
do not disclose that the individual Board members were As also noted earlier, respondent Board members offered no suggestion at
motivated by malice or bad faith, rather, it reveals an all of any just or lawful cause that could sustain the suspension and dismissal
intramural power play gone awry and misapprehension of its of Cosalan. They obviously wanted to get rid of Cosalan and so acted, in the
own rules and regulations. For this reason, the decision words of the NLRC itself, "with indecent haste" in removing him from his
holding the individual board members jointly and severally position and denying him substantive and procedural due process. Thus, the
liable with BENECO for Cosalan's backwages is untenable. record showed strong indications that respondent Board members had
The same goes for the award of damages which does not illegally suspended and dismissed Cosalan precisely because he was trying
have the proverbial leg to stand on. to remedy the financial irregularities and violations of NEA regulations which
the COA had brought to the attention of Beneco. The conclusion reached by
The Labor Arbiter below should have heeded his own the NLRC that "the records do not disclose that the individual Board
observation in his decision — members were motivated by malice or bad faith" flew in the face of the
evidence of record. At the very least, a strong presumption had arisen, which
it was incumbent upon respondent Board members to disprove, that they had
Respondent BENECO as an artificial person
acted in reprisal against respondent Cosalan and in an effort to suppress
could not have, by itself, done anything to
prevent it. But because the former have knowledge about and remedial measures against the financial irregularities
acted while in office and in the course of the COA Audits had unearthed. That burden respondent Board members did
not discharge.
their official functions as directors of
BENECO, . . .
The Solicitor General has urged that respondent Board members may be
Thus, the decision of the Labor Arbiter should be modified held liable for damages under the foregoing circumstance under Section 31
conformably with all the foregoing holding BENECO solely of the Corporation Code which reads as follows:
liable for backwages and releasing the appellant board
members from any individual liabilities. 8 (Emphasis Sec. 31. Liability of directors, trustees or officers. —
supplied) Directors or trustees who willfully and knowingly vote for or
assent to patently unlawful acts of the corporation or who are
guilty of gross negligence or bad faith in directing the affairs
The applicable general rule is clear enough. The Board members and
of the corporation or acquire any personal or pecuniary
officers of a corporation who purport to act for and in behalf of the
interest in conflict with their duty as such directors or trustees
corporation, keep within the lawful scope of their authority in so acting, and
shall be jointly liable and severally for all damages resulting
act in good faith, do not become liable, whether civilly or otherwise, for the
therefrom suffered by the corporation, its stockholders or
consequences of their acts, Those acts, when they are such a nature and are
done under such circumstances, are properly attributed to the corporation members and other persons . . . (Emphasis supplied)
We agree with the Solicitor General, firstly, that Section 31 of the Corporation generating acts here are the personal and individual acts of respondent
Code is applicable in respect of Beneco and other electric cooperatives Board members, and are not properly attributed to Beneco itself.
similarly situated. Section 4 of the Corporation Code renders the provisions
of that Code applicable in a supplementary manner to all corporations, WHEREFORE, the Petition for Certiorari is GIVEN DUE COURSE, the
including those with special or individual charters so long as those provisions comment filed by respondent Board members is TREATED as their answer,
are not inconsistent with such charters. We find no provision in P.D. No. 269, and the decision of the National Labor Relations Commission dated 21
as amended, that would exclude expressly or by necessary implication the November 1988 in NLRC Case No. RAB-1-0313-84 is hereby SET ASIDE
applicability of Section 31 of the Corporation Code in respect of members of and the decision dated 5 April 1988 of Labor Arbiter Amado T. Adquilen
the boards of directors of electric cooperatives. Indeed, P.D. No. 269 hereby REINSTATED in toto. In addition, respondent Board members are
expressly describes these cooperatives as "corporations:" hereby ORDERED to reimburse petitioner Beneco any amounts that it may
be compelled to pay to respondent Cosalan by virtue of the decision of Labor
Sec. 15. Organization and Purpose. — Cooperative non- Arbiter Amado T. Adquilen. No pronouncement as to costs.
stock, non-profit membership corporations may be
organized, and electric cooperative corporations heretofore SO ORDERED.
formed or registered under the Philippine non-Agricultural
Co-operative Act may as hereinafter provided be converted, Gutierrez, Jr., Bidin, Davide, Jr. and Romero, JJ., concur.
under this Decree for the purpose of supplying, and of
promoting and encouraging-the fullest use of, service on an
area coverage basis at the lowest cost consistent with sound
economy and the prudent management of the business of
such corporations. 10 (Emphasis supplied)
We agree with the Solicitor General, secondly, that respondent Board

members were guilty of "gross negligence or bad faith in directing the affairs
of the corporation" in enacting the series of resolutions noted earlier
indefinitely suspending and dismissing respondent Cosalan from the position
of General Manager of Beneco. Respondent Board members, in doing so,
acted belong the scope of their authority as such Board members. The
dismissal of an officer or employee in bad faith, without lawful cause and
without procedural due process, is an act that is contra legem. It cannot be
supposed that members of boards of directors derive any authority to violate
the express mandates of law or the clear legal rights of their officers and
employees by simply purporting to act for the corporation they control.
We believe and so hold, further, that not only are Beneco and respondent
Board members properly held solidarily liable for the awards made by the
Labor Arbiter, but also that petitioner Beneco which was controlled by and
which could act only through respondent Board members, has a right to be
reimbursed for any amounts that Beneco may be compelled to pay to
respondent Cosalan. Such right of reimbursement is essential if the innocent
members of Beneco are not to be penalized for the acts of respondent Board
members which were both done in bad faith and ultra vires. The liability-
G.R. No. L-58781 July 31, 1987 respondent of his change of address the omission or neglect will not stay the
finality of the decision. The notice sent to petitioners themselves, under the
TEOFILO MAGNO, ISIDRO CABATIC, HERMINIO CABATIC, FELICITAS circumstances is not even necessary. (Francisco vs. Puno, 108 SCRA 427). It
CABATIC, Assisted by her husband, JOSE CARINO, TOMAS MAGNO, may be stated though that while petitioners claim that Teofilo Magno to whom
ELPIDIO MAGNO, AURORA MAGNO, Assisted by her husband, the notice to the petitioners was addressed is already dead, it is not explained
ODELON BUGAYONG, NICANOR MAGNO and LOLITA MAGNO, why their present petition before this Court still includes the name Teofilo
petitioners, Magno. There is no indication in the record that he has been duly substituted
vs. by his legal representative.
HONORABLE COURT OF APPEALS, GAVINO MAGNO, NICETAS
MAGNO, and NAZARIA MAGNO, Assisted by her husband, SIMEON DE Same; Same; Same; Appeals; Order for issuance of entry of judg-ment in this
GUZMAN, respondents. case proper, the decision having become final there being no appeal taken
therefrom.—The decision in this case having become final on July 29,1981,
Remedial Law; Civil Procedure; Service of notices to counsel; When a party is there being no appeal taken therefrom, respondent court committed no error
represented by counsel, notice should be made upon counsel of record at his in issuing its resolution dated September 22, 1981 ordering the issuance of the
given address in the absence of a proper and adequate notice to the court of corresponding entry of judgment.
a change of address.—lt is well-settled that when a party is represented by
counsel, notice should be made upon the counsel of record at his given SPECIAL CIVIL ACTION for certiorari to review the resolution of the Court of
address to which notices of all kinds emanating from the court should be sent Appeals.
in the absence of a proper and adequate notice to the court of a change of
address.
PARAS, J.:
Same; Same; Same; Rule that service of notice by mail becomes effective at This is a special civil action for certiorari seeking to declare void ab initio the
the expiration of the five-day period upon failure of the addressee to claim his Resolution of respondent Court of Appeals dated September 22, 1981 which
mail within 5 days from date of first notice; Omission or neglect of a lawyer to ordered the issuance of an Entry of Judgment in CA-G.R. No. 52655-R. The
inform the court of his change of address will not stay the finality of the petition also prays for the issuance of a preliminary injunction to temporarily
decision, and the notice sent to petitioners themselves, who are represented maintain the status quo by ordering the provincial sheriff of the province of
by counsel, is not even necessary; Case at bar.—In the case now before Us, Pangasinan to desist from enforcing the writ of execution issued in Civil Case
the records show that the notice and copy of the decision of respondent Court No. A-413 pursuant to the said Entry of Judgment.
of Appeals were sent to petitioners' counsel of record Atty. Atinodoro E. Sison
at his given mailing address which is 33 B.M.A. Avenue, Tatalon, Quezon City. Civil Case No. A-413 is an action for Partition of Certain Properties and for
The first notice to him by the Postmaster to claim his mail was on July 9, 1981. Damages, filed by private respondents against petitioners in the Court of
The rule is that service of notice becomes effective at the expiration of the five- First Instance of Pangasinan, Branch VII thereof. In a Decision* dated
day period upon failure of the addressee to claim his mail within five (5) days October 5, 1972, the lower court ordered the partition of the properties
from the date of first notice (Sec. 8, Rule 13 Rules of Court (Feraren vs. subject of the complaint in accordance with the schedule therein appearing. It
also ordered the petitioners to pay jointly and severally unto the private
Santos, 113 SCRA 707). Therefore in this case the service became effective
respondents the amount of P3,000.00 as attorney's fees.
five days after July 9, 1981 which is July 14, 1981. The decision became final
on August 13, 1981. A xerox copy of the said envelope properly addressed
Petitioners appealed to the Court of Appeals which appeal was docketed as
appears on page 52 of the Rollo. This fact is further shown by the certification
CA-G.R. No. 52655-R. On June 30, 1981, the said court promulgated its
issued by the then Acting Clerk of the Court of Appeals, Atty. Cesar M. Marzan. Decision** affirming the decision of the lower court.
(p. 51, Rollo). If Atty. Sison moved to another address without informing the
Notice of the decision was sent to petitioners' counsel Atty. Atinidoro B. Sison notice Sec. 8, Rule 13 Rules of Court (Feraren vs. Santos, 113 SCRA 707).
at his given mailing address which is 33 B.M.A. Ave., Tatalon, Quezon City. Therefore in this case the service became effective five days after July 9,
The same, however, was returned to the court with the certification of the 1981 which is July 14, 1981. The decision became final on August 13, 1981.
postmaster — "Return to sender, Reason — moved." A xerox copy of the said envelope properly addressed appears on page 52 of
the Rollo. This fact is further shown by the certification issued by the then
On September 14, 1981, respondent Court of Appeals issued the following Acting Clerk of the Court of Appeals, Atty. Cesar M. Marzan. (p. 51, Rollo). If
Resolution: — Atty. Sison moved to another address without informing the respondent of his
change of address the omission or neglect will not stay the finality of the
decision. The notice sent to petitioners themselves, under the circumstances
Considering that the copy of Decision dated June 30, 1981
addressed to Atty. Atinidoro B. Sison of 33 B.M.A. Tatalon, Quezon is not even necessary. (Francisco vs. Puno, 108 SCRA 427). It may be
City, counsel for the appellants was returned unclaimed with the stated though that while petitioners claim that Teofilo Magno to whom the
notice to the petitioners was addressed is already dead, it is not explained
notation on the envelope "MOVED", the Court Resolved to resend
why their present petition before this Court still includes the name Teofilo
the said copy of the Decision to the appellants themselves at
Magno. There is no indication in the record that he has been duly substituted
Alaminos, Pangasinan, and the appellants are hereby informed that
by his legal representative.
the fifteen (15) days period within which to file for reconsideration will
be counted from the receipt of the decision herewith attached.
(Annex "5-A" p. 54, Rollo). The decision in this case having become final on July 29, 1981, there being
no appeal taken therefrom, respondent court committed no error in issuing its
resolution dated September 22, 1981 ordering the issuance of the
A copy of this Resolution was sent to petitioners themselves addressed as
follows — Mr. Teofilo Magno et al., Patricio, Alaminos, Pangasinan. It is not corresponding entry of judgment.
disputed that this address is the address on record of petitioners. But again
the enveloped addressed to them was returned to the court with the notation WHEREFORE, for lack of merit, this petition is hereby DISMISSED. The
— deceased. restraining order earlier issued is lifted.
On September 22, 1981, the respondent court issued its now assailed SO ORDERED.
Resolution ordering the issuance of the entry of judgment.
Yap (Chairman), Melencio-Herrera, Padilla and Sarmiento, JJ., concur.
Petitioners' motion for reconsideration was denied hence, they filed the
present petition, which We find to be without merit.
It is well-settled that when a party is represented by counsel, notice should

be made upon the counsel of record at his given address to which notices of
all kinds emanating from the court should be sent in the absence of a proper
and adequate notice to the court of a change of address. (Cubar vs.
Mendoza, 120 SCRA 768).lawph!1
In the case now before Us, the records show that the notice and copy of the
decision of respondent Court of Appeals were sent to petitioners's counsel of
record Atty. Atinidoro E. Sison at his given mailing address which is 33
B.M.A. Avenue, Tatalon, Quezon City. The first notice to him by the
Postmaster to claim his mail was on July 9, 1981. The rule is that service of
notice becomes effective at the expiration of the five-day period upon failure
of the addresse to claim his mail within five (5) days from the date of first
G.R. No. 132007 August 5, 1998 practicable, in light of the circumstances of time, place and person, personal
service or filing is mandatory. Only when personal service or filing is not
SOLAR TEAM ENTERTAINMENT, INC., petitioner, practicable may resort to other modes be had, which must then be
vs. accompanied by a written explanation as to why personal service or filing was
HON. HELEN BAUTISTA RICA-FORT, in her capacity as Presiding not practicable to begin with. In adjudging the plausibility of an explanation, a
Judge of the Regional Trial Court of Parañaque, Metro Manila (Branch court shall likewise consider the importance of the subject matter of the case
260), TEAM IMAGE ENTERTAINMENT, INC., FELIX S. CO, JEFFREY C. or the issues involved therein, and the prima facie merit of the pleading sought
CAL, and KING CUISIA, respondents. to be expunged for violation of Section 11. This Court cannot rule otherwise,
lest we allow circumvention of the innovation introduced by the 1997 Rules in
Civil Procedure; Pleadings and Practice; Modes of service of pleadings, order to obviate delay in the administration of justice.
motions, notices, orders, judgments and other papers.—Section 5, Rule 13 of
the 1997 Rules of Civil Procedure prescribes two modes of service of
pleadings, motions, notices, orders, judgments and other papers, namely: (1)
Same; Same; For the guidance of the Bench and Bar, strictest compliance with
personal service; and (2) service by mail. The first is governed by Section 6,
Section 11 of Rule 13 is mandated one month from promulgation of this
while the second, by Section 7 of said Rule. If service cannot be done either
Decision.—It has been several months since the 1997 Rules of Civil Procedure
personally or by mail, substituted service may be resorted to under Section 8
took effect. In the interim, this Court has generally accommodated parties and
thereof.
counsel who failed to comply with the requirement of a written explanation
whenever personal service or filing was not practicable, guided, in the exercise
of our discretion, by the primary objective of Section 11, the importance of the
Same; Same; Obvious reasons for preferring personal service and filing.— subject matter of the case, the issues involved and the prima facie merit of the
Personal service and filing are preferred for obvious reasons. Plainly, such challenged pleading. However, as we have in the past, for the guidance of the
should expedite action or resolution on a pleading, motion or other paper; and Bench and Bar, strictest compliance with Section 11 of Rule 13 is mandated
conversely, minimize, if not eliminate, delays likely to be incurred if service or one month from promulgation of this Decision.
filing is done by mail, considering the inefficiency of the postal service.
Likewise, personal service will do away with the practice of some lawyers who,
wanting to appear clever, resort to the following less than ethical practices: (1)
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.
serving or filing pleadings by mail to catch opposing counsel off-guard, thus
leaving the latter with little or no time to prepare, for instance, responsive
pleadings or an opposition; or (2) upon receiving notice from the post office
that the registered parcel containing the pleading of or other paper from the The facts are stated in the opinion of the Court.
adverse party may be claimed, unduly procrastinating before claiming the
Rico & Associates for petitioner.
parcel, or, worse, not claiming it at all, thereby causing undue delay in the
disposition of such pleading or other papers. Froilan D. Cabaltera for private respondents.
Same; Same; Under Section 11, Rule 13 of the 1997 Rules of Civil Procedure,
DAVIDE, JR., J.:
personal service and filing is the general rule, and resort to other modes of
service and filing, the exception.—We thus take this opportunity to clarify that
At issue is whether respondent judge committed grave abuse of discretion
under Section 11, Rule 13 of the 1997 Rules of Civil Procedure, personal
amounting to lack or excess of jurisdiction in denying petitioner's motion to
service and filing is the general rule, and resort to other modes of service and
expunge private respondents' answer with counterclaims on the ground that
filing, the exception. Henceforth, whenever personal service or filing is
said pleading was not served personally; moreover, there was no written on the provisions of Section 11, Rule 13 . . . is an adventitious resort to
explanation as to why personal service was not accomplished, as required by technicality and is contrary to Section 6 of Rule 3 . . . which admonishes that
Section 11 of Rule 13 of the 1997 Rules of Civil Procedure. said Rules 'shall be liberally construed in order to promote their objective in
securing a just, speedy and inexpensive disposition of [e]very action and
The antecedents are not disputed. proceeding;'" and that Section 11, Rule 13 notwithstanding, private
respondents "religiously complied with [Section 5 of Rule 13] by personally
present[ing] to the clerk of court their said Answer . . . furnishing a copy
On 10 July 1997, petitioner, as plaintiff, filed before the Regional Trial Court
thereof to the counsel for [petitioner] by way of registered mail."
(RTC) in Parañaque, Metro Manila, a complaint for recovery of possession
and damages with prayer for a writ of replevin 1 against herein private
respondents. The case was docketed as Civil Case No. 97-0304 and was On 8 September 1997, public respondent Judge Bautista-Ricafort issued an
assigned to Branch 260 of said court, presided over by public respondent order 7 stating that under Section 11 of Rule 13 "it is within the discretion of
Judge Helen Bautista-Ricafort. the [trial court] whether to consider the pleading as filed or not," and denying,
for lack of merit, petitioner's motion to expunge the "Answer (with
Counterclaims)" and to declare private respondents in default.
Summonses and copies of the complaint were forthwith served on private
respondents. On 25 July 1997, their counsel filed a notice of appearance with
urgent ex-parte motion for extension of time to plead, 2 which the court Petitioner immediately moved for reconsideration 8 of the order, but public
granted in its order of 4 August 1997.3 respondent Judge Bautista-Ricafort denied this motion in her order 9 of 17
November 1997. The order justified the denial in this wise:
On 8 August 1997, private respondents, as defendants, filed their "Answer
(with Counterclaims).'' 4 A copy thereof was furnished counsel for petitioner Sec. 6 [of] Rule 1 of the 1997 Rules of Civil Procedure
by registered mail; however, the pleading did not contain any written ordains that the Rules shall be liberally construed in order to
explanation as to why service was not made personally upon petitioner- promote their objective of securing a just, speedy and
plaintiff, as required by Section 11 of Rule 13 of the 1997 Rules of Civil inexpensive disposition of every action and proceeding.
Procedure.
Liberal construction of the rules and the pleading is the
On 11 August 1997, petitioner filed a motion to expunge the "Answer (with controlling principle to effect substantial justice.
Counterclaims)" and to declare herein private respondents in default, 5
alleging therein that the latter did not observe the mandate of the As pointed out by the Supreme Court in Alonso vs. Villamor,
aforementioned Section 11, and that there was: 16 Phil. 315, "the error in this case is purely technical. To
take advantage of it for other purposes than to cure it, does
[A]bsolutely no valid reason why defendant[s] should not not appeal to a fair sense of justice. Its presentation as fatal
have personally served plaintiff's . . . counsel with [a] copy of to plaintiff a [sic] case smacks of skill rather than right. A
their answer [as] (t)he office of defendant's (sic) counsel, litigation is not a game of technicalities in which one, more
Atty. Froilan Cabaltera, is just a stone [sic] throw away from deeply schooled and skilled in the subtle art of movement
the office of [petitioner's] counsel, with an estimate (sic) and position, entraps and destroys the other. It is rather, a
distance of about 200 meters more or less. contest in which each contending party fully and fairly lays
before the Court the facts in issue and then, brushing aside
as wholly trivial and indecisive all imperfections or form of
Petitioner further alleged that the post office was "about ten (10) times farther
technicalities of procedure, asks that justice be done upon
from the office of Atty. Cabaltera,"
the merits. Lawsuits, unlike duels, are not to be won by a
rapier's thrust."
On 15 August 1997, private respondents filed their opposition 6 to the
abovementioned motion, alleging that petitioner's "rigid and inflexible reliance
While it is desirable that the above Rules be faithfully and Pursuant, however, to Section 11 of Rule 13, service and filing of pleadings
even meticulously observed, courts should not strict about and other papers must, whenever practicable, be done personally; and if
procedural lapses that do not really impair the proper made through other modes, the party concerned must provide a written
administration of justice. Furthermore, it is well settled that explanation as to why the service or filing was not done personally. The
litigations should, as much as possible be decided on their section reads:
merits and not on technicalities.
Sec. 11. Priorities in modes of service and filing. —
Petitioner thus filed the instant special civil action of certiorari, contending Whenever practicable, the service and filing of pleadings and
that public respondent Judge Bautista-Ricafort committed grave abuse of other papers shall be done personally. Except with respect to
discretion amounting to lack or excess of jurisdiction when she admitted papers emanating from the court, a resort to other modes
private respondents' "Answer (with Counterclaims)" notwithstanding private must be accompanied by a written explanation why the
respondents' clear, admitted and inexcusable violation of Section 11, Rule 13 service or filing was not done personally. A violation of this
of the 1997 Rules of Civil Procedure, in that: (a) the "Answer (with Rule may be cause to consider the paper as not filed. (n)
Counterclaims)" was not served personally upon petitioner's counsel despite
the undisputed fact that the offices of private respondents' counsel and that Note that Section 11 refers to both service of pleadings and other
of petitioner's counsel are only about 200 meters away from each other; and papers on the adverse party or his counsel as provided for in
(b) the Answer did not contain any explanation as to why the answer was not Sections 6, 7 and 8; and to the filing of pleadings and other papers in
served personally. court.
In their Comment, filed in compliance with the resolution of 2 February 1998, Personal service and filing are preferred for obvious reasons. Plainly, such
and to which petitioner filed a Reply, private respondents aver that public should expedite action or resolution on a pleading, motion or other paper;
respondent Judge Bautista-Ricafort correctly admitted private respondents' and conversely, minimize, if not eliminate, delays likely to be incurred if
"Answer (with Counterclaims)" in light of Section 6, Rule 1 of the 1997 Rules service or filing is done by mail, considering the inefficiency of the postal
of Civil Procedure; that Section 11 of Rule 13 begins with the phrase service. Likewise, personal service will do away with the practice of some
"whenever practicable," thereby suggesting that service by mail may still be lawyers who, wanting to appear clever, resort to the following less than
effected depending on the relative priority of the pleading sought to be filed; ethical practices: (1) serving or filing pleadings by mail to catch opposing
and when service is not done personally, it is more prudent and judicious for counsel off-guard, thus leaving the latter with little or no time to prepare, for
the courts to require a written explanation rather than to expunge the instance, responsive pleadings or an opposition; or (2) upon receiving notice
pleading outright or consider the same as not being filed. from the post office that the registered parcel containing the pleading of or
other paper from the adverse party may be claimed, unduly procrastinating
In view of the importance of the issue raised, which is, undoubtedly, one of before claiming the parcel, or, worse, not claiming it at all, thereby causing
the first impression, the Court resolved to give due course to the petition and undue delay in the disposition of such pleading or other papers.
consider it submitted for decision on the basis of the pleadings filed by the
parties. If only to underscore the mandatory nature of this innovation to our set of
adjective rules requiring personal service whenever practicable, Section 11
Sec. 5, Rule 13 of the 1997 Rules of Civil Procedure prescribes two modes of Rule 13 then gives the court the discretion to consider a pleading or paper
of service of pleadings, motions, notices, orders, judgments and other as not filed if the other modes of service or filing were resorted to and no
papers, namely: (1) personal service; and (2) service by mail. The first is written explanation was made as to why personal service was not done in the
governed by Section 6, while the second, by Section 7 of said Rule. If service first place. The exercise of discretion must, necessarily, consider the
cannot be done either personally or by mail, substituted service may be practicability of personal service, for Section 11 itself begins with the clause
resorted to under Section 8 thereof. "whenever practicable."
We thus take this opportunity to clarify that under Section 11, Rule 13 of the would become meaningless and its sound purpose negated. Nevertheless,
1997 Rules of Civil Procedure, personal service and filing is the general rule, we sustain the challenged ruling of the trial court, but for reasons other than
and resort to other modes of service and filing, the exception. Henceforth, those provided for in the challenged order.
whenever personal service or filing is practicable, in light of the
circumstances of time, place and person, personal service or filing is The 1997 Rules of Civil Procedure took effect only on 1 July 1997, while the
mandatory. Only when personal service or filing is not practicable may resort questioned "Answer (with Counterclaims)" was filed only on 8 August 1997,
to other modes be had, which must then be accompanied by a written or on the 39th day following the effectivity of the 1997 Rules. Hence, private
explanation as to why personal service or filing was not practicable to begin respondents' counsel may not have been fully aware of the requirements and
with. In adjudging the plausibility of an explanation, a court shall likewise ramifications of Section 11, Rule 13. In fact, as pointed out by petitioner's
consider the importance of the subject matter of the case or the issues counsel, in another case where private respondents' counsel was likewise
involved therein, and the prima facie merit of the pleading sought to be opposing counsel, the latter similarly failed to comply with Section 11.
expunged for violation of Section 11. This Court cannot rule otherwise, lest
we allow circumvention of the innovation introduced by the 1997 Rules in
It has been several months since the 1997 Rules of Civil Procedure took
order to obviate delay in the administration of justice.
effect. In the interim, this Court has generally accommodated parties and
counsel who failed to comply with the requirement of a written explanation
Here, the proximity between the offices of opposing counsel was established; whenever personal service or filing was not practicable, guided, in the
moreover, that the office of private respondents' counsel was "ten times exercise of our discretion, by the primary objective of Section 11, the
farther" from the post office than the distance separating the offices of importance of the subject matter of the case, the issues involved and the
opposing counsel. Of course, proximity would seem to make personal prima facie merit of the challenged pleading. However, as we have in the
service most practicable, but exceptions may nonetheless apply. For past, for the guidance of the Bench and Bar, strictest compliance with
instance, where the adverse party or opposing counsel to be served with a Section 11 of Rule 13 is mandated one month from promulgation of this
pleading seldom reports to office and no employee is regularly present to Decision.
receive pleadings, or where service is done on the last day of the
reglementary period and the office of the adverse party or opposing counsel
WHEREFORE, the instant petition is DISMISSED considering that while the
to be served is closed, for whatever reason.
justification for the denial of the motion to expunge the "Answer (with
Counterclaims)" may not necessarily be correct, yet, for the reasons above
Returning, however, to the merits of this case, in view of the proximity stated, the violation of Section 11 of Rule 13 may be condoned.
between the offices of opposing counsel and the absence of any attendant
explanation as to why personal service of the answer was not effected,
No pronouncement as to costs.
indubitably, private respondents' counsel violated Section 11 of Rule 13 and
the motion to expunge was prima facie meritorious. However, the grant or
denial of said motion nevertheless remained within the sound exercise of the SO ORDERED.
trial court's discretion. Thus, as guided by Section 6, Rule 1 of the 1997
Rules of Civil Procedure, which ordains that the Rules shall be liberally Vitug, Panganiban and Quisumbing, JJ., concur.
construed in order to promote their objective of securing a just, speedy and
inexpensive disposition of every action or proceeding, as well as by the Bellosillo, J., Please see Separate Opinion.
dictum laid down in Alonso v. Villamor, 16 Phil. 315 [1910], the trial court
opted to exercise its discretion in favor of admitting the "Answer (with
Counterclaims)," instead of expunging it from the record.
To our mind, if motions to expunge or strike out pleadings for violation of

Section 11 of Rule 13 were to be indiscriminately resolved under Section 6 of
Rule 1 or Alonzo v. Villamor and other analogous cases, then Section 11
G.R. No. 131175 August 28, 2001 Rules of Civil Procedure amended the former rule in such manner that the
phrase “or that the cause of action or defense is substantially altered” was
SPOUSES JOVITO VALENZUELA and NORMA VALENZUELA, stricken-off and not retained in the new rules. The clear import of such
SPOUSES ALFREDO QUIAZON and BELLA GONZALES QUIAZON, amendment in Section 3, Rule 10 is that under the new rules, “the amendment
SPOUSES EDUARDO DE GUZMAN and JULIETA DE GUZMAN, DE may (now) substantially alter the cause of action or defense.” This should only
GUZMAN DEVELOPMENT CORPORATION, SKYFREIGHT BROKERAGE, be true, however, when despite a substantial change or alteration in the cause
INC., ATTY. ROMULO R. BOBADILA and WEB-HEGG CONSTRUCTION of action or defense, the amendments sought to be made shall serve the higher
RESOURCES, INCORPORATED, petitioners, interests of substantial justice, and prevent delay and equally promote the
vs. laudable objective of the rules which is to secure a “just, speedy and
HONORABLE COURT OF APPEALS and SPOUSES MANUEL T. DE
inexpensive disposition of every action and proceeding.”
GUIA and LETICIA MARIANO DE GUIA and the REGISTER OF DEEDS
OF PARAÑAQUE CITY, METRO MANILA, respondents.
Actions; Procedural Rules; Elementary is the rule in this jurisdiction that one Same; Same; The introduction of amendments to the complaint is apropos at
does not have a vested right in procedural rules.—Petitioners contend that the this particular instance to forestall further delay in the resolution of the actual
foregoing provisions of the 1997 Rules of Civil Procedure cannot be applied in merits of the parties’ respective claims and defenses.—Thus, granting
the case at bar. We do not agree. Elementary is the rule in this jurisdiction that arguendo that the amendment of the complaint in Civil Case No. PQ-9432-P
one does not have a vested right in procedural rules, thus: “Statutes regulating would substantially alter or change the cause of action or defense in said
the procedure of courts will be considered as applicable to actions pending controversy, this Court nonetheless holds that in the higher interest of
and undetermined at the time of their passage. Procedural laws are retroactive substantial justice, the introduction of amendments to the complaint is apropos
in that sense and to that extent. The fact that procedural statutes may at this particular instance to forestall further delay in the resolution of the actual
somehow affect the litigants’ rights may not preclude their retroactive merits of the parties’ respective claims and defenses. To reiterate, the Rules
application to pending actions. The retroactive application of procedural laws of Court seek to eliminate undue reliance on technical rules and to make
is not violative of any right of a person who may feel that he is adversely litigation as inexpensive, as practicable and as convenient as can be done.
affected. Nor is the retroactive application of procedural statutes Rules of procedure, after all, are but tools designed to facilitate the attainment
constitutionally objectionable. The reason is that as a general rule, no vested of justice, such that when rigid application of the rules tends to frustrate rather
right may attach to nor arise from procedural laws. It has been held that “a than promote substantial justice, the Supreme Court is empowered to suspend
person has no vested right in any particular remedy, and a litigant cannot insist their operation. This Court will not, hesitate to set aside technicalities in favor
on the application to the trial of his case, whether civil or criminal, of any other of what is fair and just.
than the existing rules of procedure.” (emphasis ours)
Same; Parties; Owners of property over which reconveyance is asserted are

Same; Same; Pleadings and Practice; Amendment of Pleadings; The clear indispensable parties without whom no relief is available and without whom
import of the amendment of the pleadings brought about by Section 3, Rule 10 the court can render no valid judgment.—Inasmuch as herein private
of the 1997 Rules of Civil Procedure deleting the phrase “or that the cause of respondents, in its amended complaint, likewise pray for reconveyance of the
action or defense is substantially altered” which used to be in the former rule real property, considering that the subject parcels of land were transferred in
is that, under the new rules, the amendment may now substantially alter the the name of spouses Quiazon who notably were not impleaded in the original
cause of action or defense, but this should only be true when despite a complaint in Civil Case No. PQ-9412-P, it bears to stress that “owners of
substantial change or alteration in the cause of action or defense, the property over which reconveyance is asserted are indispensable parties
amendments sought to be made shall serve the higher interests of substantial without whom no relief is available and without whom the court can render no
justice, and to prevent delay.—Interestingly, Section 3, Rule 10 of the 1997 valid judgment.”
whereas, in the second, the cause of action in the first case is different from
that in the second case.” (emphasis ours)
Same; Judgments; Res Judicata; Words and Phrases; “Bar by Former
Judgment” and “Conclusiveness of Judgment,” Explained.—In Vda. de Cruzo
vs. Carriaga, Jr., this Court speaking through Mr. Justice Florenz Regalado,
inked an enlightening discourse on the subject: “The doctrine of res judicata Same; Same; Same; Requisites.—Proceeding from the foregoing disquisition,
thus lays down two main rules which may be stated as follows: 1) The the principle of res judicata, requires the concurrence of the following
judgment or decree of a court of competent jurisdiction on the merits concludes requisites: “a) The former judgment or order must be final; “b) It must be a
the parties and their privies to the litigation and constitutes a bar to a new judgment or order on the merits, that is, it was rendered after a consideration
action or suit involving the same cause of action either before the same or any of the evidence or stipulations submitted by the parties at the trial of the case;
other tribunal; and 2) Any right, fact, or matter in issue directly adjudicated or “c) It must have been rendered by a court having jurisdiction over the subject
necessarily involved in the determination of an action before a competent court matter and the parties; and “d) There must be, between the first and second
in which a judgment or decree is rendered on the merits is conclusively settled actions, identity of parties, of subject matter and of cause of action. This
by the judgment therein and cannot again be litigated between the parties and requisite is satisfied if the two actions are substantially between the same
their privies whether or not the claim or demand, purpose or subject matter of parties.” (emphasis ours)
the two suits is the same. These two main rules mark the distinction between
the principles governing the two typical cases in which a judgment may operate
as evidence. In speaking of these cases, the first general rule above stated, Same; Same; Same; A judgment dismissing an action for want of jurisdiction,
and which corresponds to the aforequoted paragraph (b) of Section 49, is or because of the pendency of another action between the same parties and
referred to as ‘bar by former judgment’ while the second general rule, which is for the same cause, or a judgment absolving a defendant because he was not
embodied in paragraph (c) of the same section, is known as ‘conclusiveness served with summons, or a dismissal on the ground of misjoinder cannot
of judgment.’ “Stated otherwise, when we speak of res judicata in its concept operate as res adjudicata on the merits.—For want of the second requisite, to
as a ‘bar by former judgment,’ the judgment rendered in the first case is an wit, that the judgment must be rendered on the merits, the instant case is thus
absolute bar to the subsequent action since said judgment is conclusive not removed from the operation of the principle of res judicata. Stated differently,
only as to the matters offered and received to sustain that judgment but also if the judgment is not on the merits, it cannot be considered as a conclusive
as to any other matter which might have been offered for that purpose and adjudication of the controversy. Consequently, a judgment dismissing an
which could have been adjudged therein. This is the concept in which the term action for want of jurisdiction, or because of the pendency of another action
res judicata is more commonly and generally used and in which it is understood between the same parties and for the same cause, or a judgment absolving a
as the bar by prior judgment constituting a ground for a motion to dismiss in defendant because he was not served with summons, or a dismissal on the
civil cases. “On the other hand, the less familiar concept or less terminological ground of misjoinder cannot operate as res adjudicata on the merits.
usage of res judicata as a rule on conclusiveness of judgment refers to the
situation where the judgment in the prior action operates as an estoppel only
as to the matters actually determined therein or which were necessarily PETITION for review on certiorari of a decision of the Court of Appeals.
included therein. Consequently, since other admissible and relevant matters
which the parties in the second action could properly offer are not concluded
by, the said judgment, the same is not a bar to or a ground for dismissal of the
second action. “At bottom, the other elements being virtually the same, the
fundamental difference between the rule of res judicata as a bar by former Romulo R. Bobadilla for and in his own behalf and for the other
judgment and as merely a rule on the conclusiveness of judgment is that, in petitioners.
the first, there is an identity in the cause of action in both cases involved
Manuel T. De Guia for private respondents.
BUENA, J.: spouses Valenzuela, or in the alternative, the reconveyance of the subject
properties by the spouses Quiazon to spouses Valenzuela.
In resolving the propriety of the amendment of the complaint in the present
case, which motion to amend was filed after the lapse of fifteen years from On 13 October 1981, private respondents spouses De Guia amended their
the filing of the initiatory pleading sought to be amended, this Court complaint in Civil Case No. PQ-9432-P impleading Webb-Hegg Construction
painstakingly considered not only the peculiar circumstances obtaining, but Resources, Inc. as additional defendant.
also accorded premium to the legal truism that "adjective law is not the
counterfoil of substantive law" and that the rules of procedure must not be On 19 January 1983, spouses De Guia filed in Civil Case No. PQ-9432-P a
perverted into engines of injustice.1 Motion to Admit Second Amended Complaint impleading as additional
defendant Gerardo Villacorta. Prior to the resolution of such pending motion,
Sought to be reversed in the instant petition for review on certiorari is the Civil Case No. PQ-9432-P was transferred to the Regional Trial Court of
decision2 of the Court of Appeals dated 15 August 1997 in C.A. G.R. SP. No. Makati, Branch 133 pursuant to the Judiciary Reorganization Law (B.P. Blg.
44185, which nullified and set aside the orders dated 11 November 19963 129). As a result of the transfer of the case, Civil Case No. PQ-9432-P was
and 06 February 1997 of the Regional Trial Court (RTC) of Pasay City, redocketed as Civil Case No. 2723.
Branch 231, in Civil Case No. PQ-9412-P. The subject orders of the RTC
denied private respondents' motion to admit amended complaint dated 18 On 20 May 1983, the RTC of Makati, Branch 133 issued an order admitting
March 1997. the second amended complaint. Upon motion of the defendants therein,
however, Civil Case No. 2723 was returned to. RTC-Pasay, where herein
Similarly impugned is the resolution4 of the Court of Appeals dated 24 private respondents spouses De Guia filed a motion to admit third amended
October 1997, denying private respondents' motion for reconsideration. complaint seeking to implead spouses De Guzman, De Guzman
Development Corporation, Skyfreight Brokerage, Inc. and Lawyer Romeo
The factual antecedents and proceedings unfold. Bobadilla, as additional defendants.
On 10 September 1981, herein private respondents spouses Manuel and On 30 May 1984, the RTC-Pasay issued an omnibus order7 denying the
Leticia De Guia filed a complaint for specific performance and damages motion to admit the third amended complaint and declaring as automatically
docketed as Civil Case No. PQ-9412-P5 against herein petitioners spouses vacated the order of RTC-Makati, Branch 133, which admitted the second
Jovito and Norma Valenzuela before the then Court of First Instance of Rizal amended complaint. Upon denial of their motion for reconsideration, private
in Pasay City. The complaint prayed, among others, that the Spouses respondents spouses De Guia then filed a petition for certiorari and
Valenzuela be ordered to execute in favor of private respondents the prohibition before the appellate court, docketed as CA G.R. SP. No. 04518.
necessary deed of sale covering the two (2) parcels of land allegedly subject
of a contract to sell between said parties. On 27 March 1990, after a preliminary hearing on the affirmative defenses of
pendency of another action and splitting a cause of action, the lower court
On 16 September 1981, private respondents spouses De Guia, upon issued an order dismissing the complaint in Civil Case No. PQ-9432-P.
discovering that the subject real properties were sold and transferred by the Private respondents spouses De Guia appealed the dismissal of said case
spouses Valenzuela to herein co-petitioners spouses Alfredo and Bella before the Court of Appeals which on 30 March 1994, affirmed the dismissal
Gonzales Quiazon, filed Civil Case No. PQ 9432-P6 for annulment of sale, order of the lower court. Aggrieved, private respondents spouses De Guia
cancellation of title and damages, against spouses Valenzuela, spouses filed a petition before the Supreme Court assailing the decision of the Court
Quiazon, and the Register of Deeds of Pasay City. In the complaint, private of Appeals.
respondents spouses De Guia prayed specifically for the annulment of the
deed of sale executed by the spouses Valenzuela in favor of the spouses In a Resolution dated 24 July 1995, the High Court dismissed the petition for
Quiazon, cancellation of TCT Nos. 39396 and 39397 in the name of spouses having been filed beyond the reglementary period. Private respondents
Quiazon, and the reinstatement of TCT No. 39142 in the name of the moved to reconsider, which motion the Supreme Court denied via a
resolution dated 30 September 1995.
Upon motion of spouses Quiazon in Civil Case Nos. PQ-9412-P and PQ- On 17 December 1997, herein petitioners filed the instant petition where this
9432-P, the lower court issued an order dated 17 January 1996 directing the Court is tasked in the main to resolve the propriety of the amendment of the
cancellation of the Notice of Lis Pendens under Entry No. 81-11596 and complaint in Civil Case No. PQ-9412-P. Petitioners argue, among others,
Entry No. 81-12186 and the Adverse Claim under Entry No. 81-11601 on that the amendment should not be allowed inasmuch as the introduction of
TCT Nos. 39386 and 39397 in the name of spouses Quiazon. On 02 amendments to the complaint in Civil Case No. PQ-9412-P would, in effect,
February 1996, private respondents sought to reconsider the trial court's "radically and substantially change the cause of action and theory" of the
order. case.
On 18 March 1996, private respondents filed a motion to admit amended The Court sanctions the amendment of the complaint and resolves to strike
complaint in Civil Case No. PQ-9412-P. Prior to the resolution of the two down the petition. At the this point, a review of the pertinent provisions
pending motions, private respondents filed a motion for the inhibition of the regarding amendments is in order. Section 1, Rule 10 of the 1997 Rules of
presiding judge of Branch 117, RTC-Pasay. In an order dated 17 April 1996, Civil Procedure explicitly provides:
the court granted the motion for inhibition resulting in the re-raffle of Civil
Case No. PQ-9412-P to Branch 231, presided by Judge Cesar Z. Ylagan. "SECTION 1. Amendment in general. - Pleadings may be amended
by adding or striking out an allegation or the name of any party, or by
In an order dated 11 November 1996, Judge Ylagan denied the motion to correcting a mistake in the name of a party or a mistaken or
admit amended complaint prompting herein private respondents spouses De inadequate allegation or description in any other respect, so that the
Guia to file a motion for reconsideration which the lower court denied. actual merits of the controversy may speedily be determined, without
regard to technicalities, and in the most expeditious and inexpensive
Private respondents elevated the lower court's order denying the motion to manner." (emphasis ours)
admit amended complaint to the Court of Appeals.
Equally important is Section 3, Rule 10 of the Rules:
On 15 August 1997, the Court of Appeals rendered the assailed decision the
decretal portion of which declares: "SECTION 3. Amendments by leave of court. - Except as provided in
the next preceding section, substantial amendments may be made
"WHEREFORE, the instant petition for certiorari and mandamus is only upon leave of court. But such leave may be refused if it appears
hereby GRANTED. Consequently, the orders dated November 11, to the court that the motion was made with intent to delay. Orders of
1996 and February 6, 1997 are SET ASIDE and respondent is the court upon the matters provided in this section shall be made
ordered to admit petitioners' amended complaint dated March upon motion filed in court, and after notice to the adverse party, and
18,1997." an opportunity to be heard."
On 05 November 1997, the RTC-Pasay, Branch 231 issued an order8 Petitioners contend that the foregoing provisions of the 1997 Rules of Civil
admitting the amended complaint, pursuant to the decision of the Court of Procedure cannot be applied in the case at bar. We do not agree.
Appeals dated 15 August 1997. Herein petitioners filed with the lower court a Elementary is the rule in this jurisdiction that one does not have a vested
manifestation with motion to reconsider9 to the effect that they would file a right in procedural rules, thus:
"petition for review on certiorari" before the Supreme Court, to which
manifestation private respondents filed an opposition. Petitioners then filed a "Statutes regulating the procedure of courts will be considered as
reply to the opposition after which the lower court, in an order dated 23 applicable to actions pending and undetermined at the time of their
January, decreed "that the admission of the amended complaint and service passage. Procedural laws are retroactive in that sense and to that
of summons are hereby held in abeyance until after the Supreme Court has extent. The fact that procedural statutes may somehow affect the
resolved the case before it which has effectively placed this court on notice." litigants' rights may not preclude their retroactive application to
pending actions. The retroactive application of procedural laws is not
violative of any right of a person who may feel that he is adversely
affected. Nor is the retroactive application of procedural statutes particular query on the validity of the dismissal of Civil Case No. PQ-9432-P,
constitutionally objectionable. The reason is that as a general rule, on the ground of litis pendentia.
no vested right may attach to, nor arise from procedural laws. It has
been held that "a person has no vested right in any particular By and large, due to the multifarious procedural incidents involving these two
remedy, and a litigant cannot insist on the application to the trial of suits, albeit issues concededly not to be outrightly dismissed as less
his case, whether civil or criminal, of any other than the existing rules important, the actual merits of the controversy have yet to reach their full
of procedure."10 (emphasis ours) adjudication, resolution and determination. Under these circumstances,
particularly considering the dismissal of Civil Case No. PQ-9432-P on ground
Interestingly, Section 3, Rule 10 of the 1997 Rules of Civil Procedure11 of litis pendentia, the disallowance of the amendment of the complaint in Civil
amended the former rule12 in such manner that the phrase "or that the cause Case No. PQ-9412-P would, to our mind, necessarily result in an even
of action or defense is substantially altered" was stricken-off and not retained greater delay in the disposition and adjudication of the actual merits of the
in the new rules. The clear import of such amendment in Section 3, Rule 10 case, which run counter to the hallowed office and cardinal objective of the
is that under the new rules, "the amendment may (now) substantially alter the Rules to provide, at each possible instance, an expeditious and full resolution
cause of action or defense."13 This should only be true, however, when of issues involving the respective rights and liabilities of the parties under
despite a substantial change or alteration in the cause of action or defense, substantive law.
the amendments sought to be made shall serve the higher interests of
substantial justice, and prevent delay and equally promote the laudable True enough, the delay that has so characterized the adjudication of the
objective of the rules which is to secure a "just, speedy and inexpensive merits of this case — which original complaint was filed practically two
disposition of every action and proceeding. decades ago — has not escaped the attention of this Court. Thus, in the
interest of substantial justice, this Court allows the introduction of
Thus, granting arguendo that the amendment of the complaint in Civil Case amendments to the complaint in Civil Case No. PQ-9412-P so as to afford
No. PQ-9432-P would substantially alter or change the cause of action or the party-litigants the full and genuine opportunity to substantiate their
defense in said controversy, this Court nonetheless holds that in the higher respective claims and defenses and for the trial court to finally resolve the
interest of substantial justice, the introduction of amendments to the matters relating to the merits of the case.
complaint is apropos at this particular instance to forestall further delay in the
resolution of the actual merits of the parties' respective claims and defenses. Besides, the defendants sought to be impleaded in Civil Case No. PQ-9412-
To reiterate, the Rules of Court seek to eliminate undue reliance on technical P are not left without justifiable recourse. To this end, the law in no uncertain
rules and to make litigation as inexpensive, as practicable and as convenient terms provide for the necessary legal implements and the adoption of
as can be done.14 Rules of procedure, after all, are but tools designed to effective means and defenses sanctioned by the Rules, wherein both parties
facilitate the attainment of justice, such that when rigid application of the in the controversy may very well advance and protect their respective legal
rules tends to frustrate rather than promote substantial justice, the Supreme interests. By sanctioning the introduction of amendments to the complaint,
Court is empowered to suspend their operation.15 This Court will not hesitate the issues shall at last be viewed, so to speak, in the clear light of day and
to set aside technicalities in favor of what is fair and just.16 substantial matters therein shall not anymore be lost in the abyss of
technicalities and procedural jargon.
As the records would readily reveal, the instant case — Civil Case No. PQ-
9412-P — has already dragged and suffered protracted delay for a span of On this matter, the discourse of the Court of Appeals is elucidating:
twenty years, borne by countless legal skirmishes between the party litigants
involving principally entanglement on technical niceties and procedural rules.
"With the dismissal of Civil Case No. PQ-9432-P in which petitioners
In fact, the procedural incidents and interlocutory matters relating to this
(herein private respondents spouses De Guia) seek the annulment of
controversy, to wit, Civil Case No. PQ-9412-P and its related case Civil Case
the sale made by spouses Valenzuela in favor of spouses Quiazon,
No. PQ-9432-P, have reached no less than the portals of this Court at least
complete relief could be obtained by petitioners only by the
twice — first, as to the specific issue of the propriety of admission of a third admission of the amended complaint. Without the amendment, a
amended complaint in Civil Case No. PQ-9432 and second, as to the
favorable judgment for petitioners would be meaningless, if not futile,
as the properties covered by the contract to sell which they seek to "The doctrine of res judicata thus lays down two main rules which
enforce had already been sold to spouses Quiazon, who are among may be stated as follows: 1) The judgment or decree of a court of
those sought to be impleaded as additional defendants in the competent jurisdiction on the merits concludes the parties and their
amended complaint. privies to the litigation and constitutes a bar to a new action or suit
involving the same cause of action either before the same or any
"x x x The inquiry should be as to whether or not the amendment is other tribunal; and 2) Any right, fact, or matter in issue directly
necessary to enable the parties, particularly petitioners, to obtain adjudicated or necessarily involved in the determination of an action
complete relief in just one proceeding. As above stated, the non- before a competent court in which a judgment or decree is rendered
inclusion of spouses Quiazon and others who may have acquired on the merits is conclusively settled by the judgment therein and
rights or interest in the properties in question will render the relief cannot again be litigated between the parties and their privies
originally sought in Civil Case No. PQ-9412-P incomplete without the whether or not the claim or demand, purpose or subject matter of the
sale or transfer to spouses Quiazon being nullified; hence, the need two suits is the same. These two main rules mark the distinction
for the amendment. x x x between the principles governing the two typical cases in which a
judgment may operate as evidence. In speaking of these cases, the
first general rule above stated, and which corresponds to the
"x x x Needless to state, the court is of the considered opinion that
admission of the amended complaint is not only necessary to afford aforequoted paragraph (b) of Section 49, is referred to as 'bar by
former judgment' while the second general rule, which is embodied in
complete relief to the parties; it will also forestall any further need to
paragraph (c) of the same section, is known as 'conclusiveness of
institute other actions or proceedings arising from the transaction
judgment.'
subject matter of Civil Case No. PQ-9412-P. x x x"
"Stated otherwise, when we speak of res judicata in its concept as a

Inasmuch as herein private respondents, in its amended complaint, likewise
'bar by former judgment.' the judgment rendered in the first case is
pray for reconveyance of the real property, considering that the subject
an absolute bar to the subsequent action wince said judgment is
parcels of land were transferred in the name of spouses Quiazon who
conclusive not only as to the matters offered and received to sustain
notably were not impleaded in the original complaint in Civil Case No. PQ-
that judgment but also as to any other matter which might have been
9412-P, it bears to stress that "owners of property over which reconveyance
is asserted are indispensable parties without whom no relief is available and offered for that purpose and which could have been adjudged
therein. This is the concept in which the term res judicata is more
without whom the court can render no valid judgment."17
commonly and generally used and in which it is understood as the
bar by prior judgment constituting a ground for a motion to dismiss in
Additionally, petitioners stubbornly maintain that the principle of res judicata, civil cases.
specifically the doctrine of conclusiveness of judgment, should find
application in the instant case so as to preclude the court from resolving
anew the propriety of the amendment in Civil Case No. PQ-9412-P, which "On the other hand, the less familiar concept or less terminological
usage of res judicata as a rule on conclusiveness of judgment refers
issue, according to petitioner, was previously passed upon and determined in
to the situation where the judgment in the prior action operates as an
Civil Case No. PQ-9432-P.
estoppel only as to the matters actually determined therein or which
were necessarily included therein. Consequently, since other
The contention is without basis. Res judicata, either in the concept of bar by admissible and relevant matters which the parties in the second
former judgment or conclusiveness of judgment, cannot be applied to the action could properly offer are not concluded by the said judgment,
present case. the same is not a bar to or a ground for dismissal of the second
action.
In Vda. De Cruzo vs. Carriaga, Jr.,18 this Court speaking through Mr. Justice
Florenz Regalado, inked an enlightening discourse on the subject: "At bottom, the other elements being virtually the same, the
fundamental difference between the rule of res judicata as a bar by
former judgment and as merely a rule on the conclusiveness of DENIED for lack of merit. Accordingly, the Regional Trial Court of Pasay City
judgment is that, in the first, there is an identity in the cause of action Branch 231, is hereby ordered to admit herein private respondents' amended
in both cases involved whereas, in the second, the cause of action in complaint in Civil Case No. PQ-9412-P, to issue the necessary summons to
the first case is different from that in the second case." (emphasis all impleaded defendants therein and to resolve the case with dispatch.
ours)
SO ORDERED.
Proceeding from the foregoing disquisition, the principle of res judicata,
requires the concurrence of the following requisites:19 Bellosillo, Mendoza, Quisumbing and De Leon, Jr., JJ ., concur.
"a) The former judgment or order must be final;
"b) It must be a judgment or order on the merits, that is, it was

rendered after a consideration of the evidence or stipulations
submitted by the parties at the trial of the case;
"c) It must have been rendered by a court having jurisdiction over the
subject matter and the parties; and
"d) There must be, between the first and second actions, identity of
parties, of subject matter and of cause of action. This requisite is
satisfied if the two actions are substantially between the same
parties." (emphasis ours)
For want of the second requisite, to wit, that the judgment must be rendered
on the merits, the instant case is thus removed from the operation of the
principle of res judicata. Stated differently, if the judgment is not on the
merits, it cannot be considered as a conclusive adjudication of the
controversy. Consequently, a judgment dismissing an action for want of
jurisdiction, or because of the pendency of another action between the same
parties and for the same cause, or a judgment absolving a defendant
because he was not served with summons, or a dismissal on the ground of
misjoinder cannot operate as res adjudicata on the merits.20
To this end, it must be noted that the dismissal of Civil Case No. PQ-9432-P
was due to litis pendentia or the pendency of another action, obviously
referring to Civil Case No. PQ-9412-P. Applying the foregoing doctrines, the
judgment dismissing Civil Case No. PQ-9432-P, on the ground of litis
pendentia, cannot be considered an adjudication on the merits.21 Clearly
then, res judicata cannot apply.
WHEREFORE, premises considered, the assailed decision of the Court of

Appeals in C.A. G.R. SP. No. 44185 is AFFIRMED and the instant petition is
G.R. No. 108538 January 22, 1996 personal status of the plaintiff who is domiciled in the Philippines or the
property litigated or attached. Service of summons in the manner provided in
LOURDES A. VALMONTE and ALFREDO D. VALMONTE, petitioners, §17 is not for the purpose of vesting it with jurisdiction but for complying with
vs. the requirements of fair play or due process, so that he will be informed of the
THE HONORABLE COURT OF APPEALS, THIRD DIVISION and ROSITA pendency of the action against him and the possibility that property in the
DIMALANTA, respondents. Philippines belonging to him or in which he has an interest may be subjected
to a judgment in favor of the plaintiff and he can thereby take steps to protect
Actions; Summons; Jurisdiction; Parties; Pleadings and Practice; A resident his interest if he is so minded.
defendant in an action in personam who cannot be personally served with
summons may be summoned either by means of substituted service in
accordance with Rule 14, §8 or by publication as provided in §§17 and 18 of Same; Same; Same; Partition; An action for partition and accounting under
the same Rule.—In an action in personam, personal service of summons or, if
Rule 69 is in the nature of an action quasi in rem.—Applying the foregoing
this is not possible and he cannot be personally served, substituted service, rules to the case at bar, private respondent’s action, which is for partition and
as provided in Rule 14, §§7-8 is essential for the acquisition by the court of
accounting under Rule 69, is in the nature of an action quasi in rem. Such an
jurisdiction over the person of a defendant who does not voluntarily submit action is essentially for the purpose of affecting the defendant’s interest in a
himself to the authority of the court. If defendant cannot be served with specific property and not to render a judgment against him.
summons because he is temporarily abroad, but otherwise he is a Philippine
resident, service of summons may, by leave of court, be made by publication.
Otherwise stated, a resident defendant in an action in personam, who cannot
be personally served with summons, may be summoned either by means of Same; Same; Same; Service of summons upon a nonresident who is not found
substituted service in accordance with Rule 14, §8 or by publication as in the Philippines must be made either (1) by personal service; (2) by
provided in §§ 17 and 18 of the same Rule. publication in a newspaper of general circulation; or (3) in any other manner
which the court may deem sufficient.—As petitioner Lourdes A. Valmonte is a
nonresident who is not found in the Philippines, service of summons on her
must be in accordance with Rule 14, §17. Such service, to be effective outside
Same; Same; Same; Same; Same; If the action is in rem or quasi in rem,
the Philippines, must be made either (1) by personal service; (2) by publication
jurisdiction over the person of the defendant is not essential for giving the court
in a newspaper of general circulation in such places and for such time as the
jurisdiction so long as the court acquires jurisdiction over the res.—On the
court may order, in which case a copy of the summons and order of the court
other hand, if the action is in rem or quasi in rem, jurisdiction over the person should be sent by registered mail to the last known address of the defendant;
of the defendant is not essential for giving the court jurisdiction so long as the
or (3) in any other manner which the court may deem sufficient.
court acquires jurisdiction over the res. If the defendant is a nonresident and
he is not found in the country, summons may be served exterritorially in
accordance with Rule 14, §17.
Same; Same; Same; The three modes of service of summons upon a
nonresident must be made outside the Philippines, such as through the
Philippine Embassy in the foreign country where the defendant resides.—
Same; Same; Same; Same; Same; Due Process; What gives the court
Since in the case at bar, the service of summons upon petitioner Lourdes A.
jurisdiction in an action in rem or quasi in rem is that it has jurisdiction over the
Valmonte was not done by means of any of the first two modes, the question
res, and the service of summons in the manner provided in §17 is not for the
is whether the service on her attorney, petitioner Alfredo D. Valmonte, can be
purpose of vesting it with jurisdiction but for complying with the requirements
justified under the third mode, namely, “in any . . . manner the court may deem
of fair play or due process.—In such cases, what gives the court jurisdiction in
sufficient.” We hold it cannot. This mode of service, like the first two, must be
an action in rem or quasi in rem is that it has jurisdiction over the res, i.e. the
made outside the Philippines, such as through the Philippine Embassy in the DECISION
foreign country where the defendant resides.
MENDOZA, J.:
Same; Same; Same; The period to file an Answer in an action against a Petitioner Lourdes A. Valmonte is a foreign resident. The question is whether
resident defendant differs from the period given in an action filed against a in an action for partition filed against her and her husband, who is also her
nonresident defendant who is not found in the Philippines.—It must be noted attorney, summons intended for her may be served on her husband, who has
that the period to file an Answer in an action against a resident defendant a law office in the Philippines. The Regional Trial Court of Manila, Branch 48,
said no and refused to declare Lourdes A. Valmonte in default, but the Court
differs from the period given in an action filed against a nonresident defendant
of Appeals said yes. Hence this petition for review on certiorari.
who is not found in the Philippines. In the former, the period is fifteen (15) days
from service of summons, while in the latter, it is at least sixty (60) days from
The facts of the case are as follows:
notice.
Petitioners Lourdes A. Valmonte and Alfredo D. Valmonte are husband and
wife. They are both residents of 90222 Carkeek Drive South Seattle,
Same; Same; Same; Agency; Attorneys; The authority given by a wife to her Washington, U.S.A. Petitioner Alfredo D. Valmonte, who is a member of the
husband to negotiate cannot be construed as also including an authority to Philippine bar, however, practices his profession in the Philippines,
represent her in any litigation.—In contrast, in the case at bar, petitioner commuting for this purpose between his residence in the state of Washington
Lourdes A. Valmonte did not appoint her husband as her attorney-in-fact. and Manila, where he holds office at S-304 Gedisco Centre, 1564 A. Mabini
Although she wrote private respondent’s attorney that “all communications” Ermita, Manila.
intended for her should be addressed to her husband who is also her lawyer
at the latter’s address in Manila, no power of attorney to receive summons for On March 9, 1992, private respondent Rosita Dimalanta, who is the sister of
her can be inferred therefrom. In fact the letter was written seven months petitioner Lourdes A. Valmonte, filed a complaint for partition of real property
before the filing of this case below, and it appears that it was written in and accounting of rentals against petitioners Lourdes A. Valmonte and
connection with the negotiations between her and her sister, respondent Alfredo D. Valmonte before the Regional Trial Court of Manila, Branch 48.
The subject of the action is a three-door apartment located in Paco, Manila.
Rosita Dimalanta, concerning the partition of the property in question. As is
usual in negotiations of this kind, the exchange of correspondence was carried
on by counsel for the parties. But the authority given to petitioner’s husband in In her Complaint, private respondent alleged:
these negotiations certainly cannot be construed as also including an authority
to represent her in any litigation. The plaintiff is of legal age, a widow and is at present a resident of
14823 Conway Road, Chesterfield, Missouri, U.S.A., while the
defendants are spouses, of legal age and at present residents of
90222 Carkeek Drive, South Seattle, Washington, U.S.A., but, for
PETITION for review on certiorari of a decision of the Court of Appeals. purposes of this complaint may be served with summons at Gedisco
Center, Unit 304, 1564 A. Mabini St., Ermita, Manila where
defendant Alfredo D. Valmonte as defendant Lourdes Arreola
The facts are stated in the opinion of the Court. Valmonte's spouse holds office and where he can be found.
Alfredo D. Valmonte and Cirilo E. Doronilla for petitioners. Apparently, the foregoing averments were made on the basis of a letter
previously sent by petitioner Lourdes A. Valmonte to private respondent's
Balgos & Perez for private respondent. counsel in which, in regard to the partition of the property in question, she
referred private respondent's counsel to her husband as the party to whom January 15, 1993 at his Manila office and on January 21, 1993 in Seattle,
all communications intended for her should be sent. The letter reads: Washington. Hence, this petition.
July 4, 1991 The issue at bar is whether in light of the facts set forth above, petitioner
Lourdes A. Valmonte was validly served with summons. In holding that she
Dear Atty. Balgos: had been, the Court of Appeals stated:1
This is in response to your letter, dated 20 June 1991, which I [I]n her above-quoted reply, Mrs. Valmonte clearly and unequivocally
received on 3 July 1991. Please address all communications to my directed the aforementioned counsel of Dimalanta to address all
lawyer, Atty. Alfredo D. Valmonte, whose address, telephone and fax communications (evidently referring to her controversy with her sister Mrs.
numbers appear below. Dimalanta over the Paco property, now the subject of the instant case) to her
lawyer who happens also to be her husband. Such directive was made
without any qualification just as was her choice/designation of her husband
c/o Prime Marine
Gedisco Center, Unit 304 Atty. Valmonte as her lawyer likewise made without any qualification or
1564 A. Mabini, Ermita reservation. Any disclaimer therefore on the part of Atty. Valmonte as to his
being his wife's attorney (at least with regard to the dispute vis-a-vis (sic) the
Metro Manila
Paco property) would appear to be feeble or trifling, if not incredible.
Telephone: 521-1736
Fax: 521-2095
This view is bolstered by Atty. Valmonte's subsequent alleged special
appearance made on behalf of his wife. Whereas Mrs. Valmonte had
Service of summons was then made upon petitioner Alfredo D. Valmonte,
manifestly authorized her husband to serve as her lawyer relative to her
who at the time, was at his office in Manila. Petitioner Alfredo D. Valmonte
dispute with her sister over the Paco property and to receive all
accepted the summons, insofar as he was concerned, but refused to accept
communications regarding the same and subsequently to appear on her
the summons for his wife, Lourdes A. Valmonte, on the ground that he was
not authorized to accept the process on her behalf. Accordingly the process behalf by way of a so-called special appearance, she would nonetheless now
server left without leaving a copy of the summons and complaint for insist that the same husband would nonetheless had absolutely no authority
to receive summons on her behalf. In effect, she is asserting that
petitioner Lourdes A. Valmonte.
representation by her lawyer (who is also her husband) as far as the Paco
property controversy is concerned, should only be made by him when such
Petitioner Alfredo D. Valmonte thereafter filed his Answer with Counterclaim. representation would be favorable to her but not otherwise. It would
Petitioner Lourdes A. Valmonte, however, did not file her Answer. For this obviously be inequitable for this Court to allow private respondent Lourdes A.
reason private respondent moved to declare her in default. Petitioner Alfredo Valmonte to hold that her husband has the authority to represent her when
D. Valmonte entered a special appearance in behalf of his wife and opposed an advantage is to be obtained by her and to deny such authority when it
the private respondent's motion. would turn out to be her disadvantage. If this be allowed, Our Rules of Court,
instead of being an instrument to promote justice would be made use of to
In its Order dated July 3, 1992, the trial court, denied private respondent's thwart or frustrate the same.
motion to declare petitioner Lourdes A. Valmonte in default. A motion for
reconsideration was similarly denied on September 23, 1992. Whereupon, xxx xxx xxx
private respondent filed a petition for certiorari, prohibition and mandamus
with the Court of Appeals.
Turning to another point, it would not do for Us to overlook the fact
that the disputed summons was served not upon just an ordinary
On December 29, 1992, the Court of Appeals rendered a decision granting lawyer of private respondent Lourdes A. Valmonte, but upon her
the petition and declaring Lourdes A. Valmonte in default. A copy of the lawyer husband. But that is not all, the same lawyer/husband
appellate court's decision was received by petitioner Alfredo D. Valmonte on happens to be also her co-defendant in the instant case which
involves real property which, according to her lawyer/husband/co- summons because he is temporarily abroad, but otherwise he is a Philippine
defendant, belongs to the conjugal partnership of the defendants (the resident, service of summons may, by leave of court, be made by
spouses Valmonte). It is highly inconceivable and certainly it would publication.4 Otherwise stated, a resident defendant in an action in
be contrary to human nature for the lawyer/husband/co-defendant to personam, who cannot be personally served with summons, may be
keep to himself the fact that they (the spouses Valmonte) had been summoned either by means of substituted service in accordance with Rule
sued with regard to a property which, he claims to be conjugal. 14, §8 or by publication as provided in §§ 17 and 18 of the same Rule.5
Parenthetically, there is nothing in the records of the case before Us
regarding any manifestation by private respondent Lourdes A. In all of these cases, it should be noted, defendant must be a resident of the
Valmonte about her lack of knowledge about the case instituted Philippines, otherwise an action in personam cannot be brought because
against her and her lawyer/husband/co-defendant by her sister jurisdiction over his person is essential to make a binding decision.
Rosita. . . .
On the other hand, if the action is in rem or quasi in rem, jurisdiction over the
PREMISES CONSIDERED, the instant petition for certiorari, person of the defendant is not essential for giving the court jurisdiction so
prohibition and mandamus is given due course. This Court hereby long as the court acquires jurisdiction over the res. If the defendant is a
Resolves to nullify the orders of the court a quo dated July 3, 1992 nonresident and he is not found in the country, summons may be served
and September 23, 1992 and further declares private respondent exterritorially in accordance with Rule 14, §17, which provides:
Lourdes Arreola Valmonte as having been properly served with
summons. §17. Extraterritorial service. - When the defendant does not reside
and is not found in the Philippines and the action affects the personal
Petitioners assail the aforequoted decision, alleging that the Court of Appeals status of the plaintiff or relates to, or the subject of which is, property
erred (1) in refusing to apply the provisions of Rule 14, §17 of the Revised within the Philippines, in which the defendant has or claims a lien or
Rules of Court and applying instead Rule 14, §8 when the fact is that interest, actual or contingent, or in which the relief demanded
petitioner Lourdes A. Valmonte is a nonresident defendant; and (2) because consists, wholly or in part, in excluding the defendant from any
even if Rule 14, §8 is the applicable provision, there was no valid substituted interest therein, or the property of the defendant has been attached
service as there was no strict compliance with the requirement by leaving a within the Philippines, service may, by leave of court, be effected out
copy of the summons and complaint with petitioner Alfredo D. Valmonte. of the Philippines by personal service as under section 7; or by
Private respondent, upon the other hand, asserts that petitioners are invoking publication in a newspaper of general circulation in such places and
a technicality and that strict adherence to the rules would only result in a for such time as the court may order, in which case a copy of the
useless ceremony. summons and order of the court shall be sent by registered mail to
the last known address of the defendant, or in any other manner the
We hold that there was no valid service of process on Lourdes A. Valmonte. court may deem sufficient. Any order granting such leave shall
specify a reasonable time, which shall not be less than sixty (60)
To provide perspective, it will be helpful to determine first the nature of the days after notice, within which the defendant must answer..
action filed against petitioners Lourdes A. Valmonte and Alfredo D. Valmonte
by private respondent, whether it is an action in personam, in rem or quasi in In such cases, what gives the court jurisdiction in an action in rem or quasi in
rem. This is because the rules on service of summons embodied in Rule 14 rem is that it has jurisdiction over the res, i.e. the personal status of the
apply according to whether an action is one or the other of these actions. plaintiff who is domiciled in the Philippines or the property litigated or
attached.
In an action in personam, personal service of summons or, if this is not
possible and he cannot be personally served, substituted service, as Service of summons in the manner provided in §17 is not for the purpose of
provided in Rule 14, §§7-82 is essential for the acquisition by the court of vesting it with jurisdiction but for complying with the requirements of fair play
jurisdiction over the person of a defendant who does not voluntarily submit or due process, so that he will be informed of the pendency of the action
himself to the authority of the court.3 If defendant cannot be served with against him and the possibility that property in the Philippines belonging to
him or in which he has an interest may be subjected to a judgment in favor of made upon the order of the court as required by Rule 14, §17 and certainly
the plaintiff and he can thereby take steps to protect his interest if he is so was not a mode deemed sufficient by the court which in fact refused to
minded.6 consider the service to be valid and on that basis declare petitioner Lourdes
A. Valmonte in default for her failure to file an answer.
Applying the foregoing rules to the case at bar, private respondent's action,
which is for partition and accounting under Rule 69, is in the nature of an In the second place, service in the attempted manner on petitioner was not
action quasi in rem. Such an action is essentially for the purpose of affecting made upon prior leave of the trial court as required also in Rule 14, §17. As
the defendant's interest in a specific property and not to render a judgment provided in §19, such leave must be applied for by motion in writing,
against him. As explained in the leading case of Banco Español Filipino v. supported by affidavit of the plaintiff or some person on his behalf and setting
Palanca :7 forth the grounds for the application.
[An action quasi in rem is] an action which while not strictly speaking an Finally, and most importantly, because there was no order granting such
action in rem partakes of that nature and is substantially such. . . . The action leave, petitioner Lourdes A. Valmonte was not given ample time to file her
quasi in rem differs from the true action in rem in the circumstance that in the Answer which, according to the rules, shall be not less than sixty (60) days
former an individual is named as defendant and the purpose of the after notice. It must be noted that the period to file an Answer in an action
proceeding is to subject his interest therein to the obligation or lien burdening against a resident defendant differs from the period given in an action filed
the property. All proceedings having for their sole object the sale or other against a nonresident defendant who is not found in the Philippines. In the
disposition of the property of the defendant, whether by attachment, former, the period is fifteen (15) days from service of summons, while in the
foreclosure, or other form of remedy, are in a general way thus designated. latter, it is at least sixty (60) days from notice.
The judgment entered in these proceedings is conclusive only between the
parties. Strict compliance with these requirements alone can assure observance of
due process. That is why in one case,9 although the Court considered
As petitioner Lourdes A. Valmonte is a nonresident who is not found in the publication in the Philippines of the summons (against the contention that it
Philippines, service of summons on her must be in accordance with Rule 14, should be made in the foreign state where defendant was residing) sufficient,
§17. Such service, to be effective outside the Philippines, must be made nonetheless the service was considered insufficient because no copy of the
either (1) by personal service; (2) by publication in a newspaper of general summons was sent to the last known correct address in the Philippines..
circulation in such places and for such time as the court may order, in which
case a copy of the summons and order of the court should be sent by Private respondent cites the ruling in De Leon v. Hontanosas, 67 SCRA
registered mail to the last known address of the defendant; or (3) in any other 458,462-463 (1975), in which it was held that service of summons upon the
manner which the court may deem sufficient. defendant's husband was binding on her. But the ruling in that case is
justified because summons were served upon defendant's husband in their
Since in the case at bar, the service of summons upon petitioner Lourdes A. conjugal home in Cebu City and the wife was only temporarily absent, having
Valmonte was not done by means of any of the first two modes, the question gone to Dumaguete City for a vacation. The action was for collection of a
is whether the service on her attorney, petitioner Alfredo D. Valmonte, can be sum of money. In accordance with Rule 14, §8, substituted service could be
justified under the third mode, namely, "in any . . . manner the court may made on any person of sufficient discretion in the dwelling place of the
deem sufficient." defendant, and certainly defendant's husband, who was there, was
competent to receive the summons on her behalf. In any event, it appears
We hold it cannot. This mode of service, like the first two, must be made that defendant in that case submitted to the jurisdiction of the court by
outside the Philippines, such as through the Philippine Embassy in the instructing her husband to move for the dissolution of the writ of attachment
foreign country where the defendant resides.8 Moreover, there are several issued in that case.
reasons why the service of summons on Atty. Alfredo D. Valmonte cannot be
considered a valid service of summons on petitioner Lourdes A. Valmonte. In On the other hand, in the case of Gemperle v. Schenker, 10 it was held that
the first place, service of summons on petitioner Alfredo D. Valmonte was not service on the wife of a nonresident defendant was found sufficient because
the defendant had appointed his wife as his attorney-in-fact. It was held that
although defendant Paul Schenker was a Swiss citizen and resident of
Switzerland, service of summons upon his wife Helen Schenker who was in
the Philippines was sufficient because she was her husband's representative
and attorney-in-fact in a civil case, which he had earlier filed against William
Gemperle. In fact Gemperle's action was for damages arising from allegedly
derogatory statements contained in the complaint filed in the first case. As
this Court said, "[i]n other words, Mrs. Schenker had authority to sue, and
had actually sued, on behalf of her husband, so that she was, also,
empowered to represent him in suits filed against him, particularly in a case,
like the one at bar, which is a consequence of the action brought by her on
his behalf" 11 Indeed, if instead of filing an independent action Gemperle
filed a counterclaim in the action brought by Mr. Schenker against him, there
would have been no doubt that the trial court could have acquired jurisdiction
over Mr. Schenker through his agent and attorney-in-fact, Mrs. Schenker.
In contrast, in the case at bar, petitioner Lourdes A. Valmonte did not appoint
her husband as her attorney-in-fact. Although she wrote private res-
pondent's attorney that "all communications" intended for her should be
addressed to her husband who is also her lawyer at the latter's address in
Manila, no power of attorney to receive summons for her can be inferred
therefrom. In fact the letter was written seven months before the filing of this
case below, and it appears that it was written in connection with the
negotiations between her and her sister, respondent Rosita Dimalanta,
concerning the partition of the property in question. As is usual in
negotiations of this kind, the exchange of correspondence was carried on by
counsel for the parties. But the authority given to petitioner's husband in
these negotiations certainly cannot be construed as also including an
authority to represent her in any litigation.
For the foregoing reasons, we hold that there was no valid service on
petitioner Lourdes A. Valmonte in this case.
WHEREFORE, the decision appealed from is REVERSED and the orders

dated July 3, 1992 and September 23, 1992 of the Regional Trial Court of
Manila, Branch 48 are REINSTATED.
SO ORDERED.
Regalado, Romero and Puno, JJ., concur.

G.R. No. 103200 August 31, 1994 over the subject matter. (Syllabus, Flores vs. Zurbito, supra, at page 751. That
rule was followed in Ocampo vs. Mina and Arejola, 41 Phil. 308).”
LA NAVAL DRUG CORPORATION, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and WILSON C. YAO, Same; Same; Same; Voluntary appearance cures defects of summons, if any.
respondents.
Such defect, if any, is cured when defendant files its answer to the complaint.—
The justification for the rule was expressed in Republic vs. Ker and Company,
Remedial Law; Courts; Jurisdiction; When a defendant voluntarily appears, he
Ltd. (18 SCRA 207, 213-214), in this wise: “We observe that the motion to
is deemed to have submitted himself to the jurisdiction of the court.—The lack
dismiss filed on April 14, 1962, aside from disputing the lower court’s
of jurisdiction over the person of the defendant may be waived either expressly jurisdiction over defendant’s person, prayed for dismissal of the complaint on
or impliedly. When a defendant voluntarily appears, he is deemed to have the ground that plaintiff’s cause of action has prescribed. By interposing such
submitted himself to the jurisdiction of the court. If he so wishes not to waive
second ground in its motion to dismiss, Ker & Co., Ltd. availed of an affirmative
this defense, he must do so seasonably by motion for the purpose of objecting defense on the basis of which it prayed the court to resolve controversy in its
to the jurisdiction of the court; otherwise, he shall be deemed to have submitted
favor. For the court to validly decide the said plea of defendant Ker & Co., Ltd.,
himself to that jurisdiction. The decisions promulgated heretofore by this Court it necessarily had to acquire jurisdiction upon the latter’s person, who, being
would likewise seemingly apply estoppel to bar the defendant from pursuing the proponent of the affirmative defense, should be deemed to have
that defense by alleging in his answer any other issue for dismissing the action.
abandoned its special appearance and voluntarily submitted itself to the
Same; Same; Same; If the defendant, besides setting up in a motion to dismiss jurisdiction of the court. “Voluntary appearance cures defects of summons, if
his objection to the jurisdiction of the court, alleges at the same time any other any. Such defect, if any, was further cured when defendant filed its answer to
ground for dismissing the action, he is deemed to have submitted himself to the complaint. A defendant can not be permitted to speculate upon the
the jurisdiction of the court.—In Wang Laboratories, Inc. vs. Mendoza (156 judgment of the court by objecting to the court’s jurisdiction over its person if
SCRA 44), this Court has ruled that if the defendant, besides setting up in a the judgment is adverse to it, and acceding to jurisdiction over its person if and
motion to dismiss his objection to the jurisdiction of the court, alleges at the when the judgment sustains its defenses.”
same time any other ground for dismissing the action, he is deemed to have
submitted himself to the jurisdiction of the court. In the process, it has equated
the matter to a situation where, such as in Immaculata vs. Judge Navarro, et Same; Same; Same; Estoppel; Estoppel is a mere exception from the standard
al. (146 SCRA 5), the defendant invokes an affirmative relief against his legal norms of general application that can be invoked only in highly
opponent. exceptional and justifiable cases.—The doctrine of estoppel is predicated on,
and has its origin in, equity which, broadly defined, is justice according to
natural law and right. It is a principle intended to avoid a clear case of injustice.
Same; Same; Same; Appearance by motion must be for the sole and separate The term is hardly distinguishable from a waiver of right. Estoppel, like its said
purpose of objecting to the jurisdiction of the court.—“When the appearance is counterpart, must be unequivocal and intentional for, when misapplied, it can
by motion for the purpose of objecting to the jurisdiction of the court over the easily become a most convenient and effective means of injustice. Estoppel is
person, it must be for the sole and separate purpose of objecting to the not understood to be a principle that, as a rule, should prevalently apply but,
jurisdiction of the court. If his motion is for any other purpose than to object to such as it concededly is, as a mere exception from the standard legal norms
the jurisdiction of the court over his person, he thereby submits himself to the of general application that can be invoked only in highly exceptional and
jurisdiction of the court. A special appearance by motion made for the purpose justifiable cases.
of objecting to the jurisdiction of the court over the person will be held to be a
general appearance, if the party in said motion should, for example, ask for a
dismissal of the action upon the further ground that the court had no jurisdiction
Same; Same; Same; Dismissal; Any ground for dismissal in a motion to the subject matter of the suit is yet another matter. Whenever it appears that
dismiss, except improper venue, may be pleaded as an affirmative defense the court has no jurisdiction over the subject matter, the action shall be
and a preliminary hearing may be had as if a motion to dismiss had been dismissed (Section 2, Rule 9, Rules of Court). This defense may be interposed
filed.—Any ground for dismissal in a motion to dismiss, except improper venue, at any time, during appeal (Roxas vs. Rafferty, 37 Phil. 957) or even after final
may, as further set forth in Section 5 of the same rule, be pleaded as an judgment (Cruzcosa vs. Judge Concepcion, et al., 101 Phil. 146). Such is
affirmative defense and a preliminary hearing may be had thereon as if a understandable, as this kind of jurisdiction is conferred by law and not within
motion to dismiss had been filed. An answer itself contains the negative, as the courts, let alone the parties, to themselves determine or conveniently set
well as affirmative, defenses upon which the defendant may rely (Section 4, aside.
Rule 6, Rules of Court). A negative defense denies the material facts averred
in the complaint essential to establish the plaintiff’s cause of action, while an
affirmative defense is an allegation of a new matter which, while admitting the Same; Same; Same; Same; Jurisdiction over the person must be seasonably
material allegations of the complaint, would, nevertheless, prevent or bar raised, i.e., pleaded in a motion to dismiss or by way of an affirmative defense
recovery by the plaintiff. Inclusive of these defenses are those mentioned in in an answer.—In summary, it is our considered view, as we now so hereby
Rule 16 of the Rules of Court which would permit the filing of a motion to express, that—(1) Jurisdiction over the person must be seasonably raised, i.e.,
dismiss. 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 construed as an
Same; Same; Same; Same; Under Section 2, Rule 9 of the Rules of Court, estoppel or as a waiver of such defense.
defenses and objections not pleaded either in a motion to dismiss or in an
answer, except for failure to state a cause of action, are deemed waived. It is
not the invocation of any of such defenses, but the failure to so raise them, Same; Same; Same; Same; Where the court has no jurisdiction over the
that can result in waiver or estoppel.—In the same manner that a plaintiff may subject matter of the action, the invocation of this defense may be done at any
assert two or more causes of action in a court suit, a defendant is likewise time.—Where the court itself clearly has no jurisdiction over the subject matter
expressly allowed, under Section 2, Rule 8, of the Rules of Court, to put up his or the nature of the action, the invocation of this defense may be done at any
own defenses alternatively or even hypothetically. Indeed, under Section 2, time. It is neither for the courts nor the parties to violate or disregard that rule,
Rule 9, of the Rules of Court, defenses and objections not pleaded either in a let alone to confer that jurisdiction, this matter being legislative in character.
motion to dismiss or in an answer, except for the failure to state a cause of Barring highly meritorious and exceptional circumstances, such as
action, are deemed waived. We take this to mean that a defendant may, in hereinbefore exemplified, neither estoppel nor waiver shall apply.
fact, feel enjoined to set up, along with his objection to the court’s jurisdiction
over his person, all other possible defenses. It thus 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. By defenses, of course, we refer to the grounds
provided for in Rule 16 of the Rules of Court that must be asserted in a motion PETITION for review of a decision of the Court of Appeals.
to dismiss or by way of affirmative defenses in an answer.

Same; Same; Same; Same; Whenever it appears that the court has no
jurisdiction over the subject matter, the action shall be dismissed. This kind of Jerome T. Paras for petitioner.
jurisdiction is conferred by law and not within the courts, let alone the parties,
Quasha, Asperilla, Ancheta, Peña & Nolasco for private respondent.
to themselves determine or conveniently set aside.—Lack of jurisdiction over
VITUG, J.: In chronology, the events that have led to the case at bench are detailed in
the appealed decision of respondent appellate court, which we here
In an effort to declog the courts of an increasing volume of work load and, reproduce in toto.
most importantly, in order to accord contending parties with expenditious
alternatives for settling disputes, the law authorities, indeed encourages, out Original action for Certiorari and Prohibition for Annulment of
of court settlements or adjudications. Compromises and arbitration are widely the Orders, dated April 26, 1990 and June 22, 1990,
known and used as such acceptable methods of resolving adversarial claims. respectively, of Branch LXI, Regional Trial Court, Angeles
City, in Special Case No. 6024 for Enforcement of
Arbitrations, in particular, is governed by a special law, Republic Act 876, ARBITRATION Agreement with Damages. Petitioner assails
suppletory to which are laws and rules of general application. This case that portion of subject Order of April 26, 1990, stating as
before us concerns the jurisdiction of courts, in relation to the provisions of follows:
Section 6 of Republic Act No. 876, and, in that respect, the applicability of the
doctrine of estoppel. The law (R.A. 876), specifically Section 6 thereof, (1) Petitioner's claim for damages predicated
provides: on alleged tortuous acts of respondents La
Naval Drug corporation such as their alleged
Sec. 6. Hearing by court. — A party aggrieved by the failure, interference and dilatory tactics, etc. in the
neglect or refusal of another to perform under an agreement implementation of the Arbitration Agreement
in writing providing for arbitration may petition the court for in the Contract of Lease, thereby compelling
an order directing that such arbitration proceed in the among others the petitioner to go to Court
manner provided for in such agreement. Five days notice in for redress; and respondent La Naval Drug
writing of the hearing of such application shall be served Corporation's counterclaim for damages
either personally or by registered mail upon the party in may be entertained by this Court in a
default. The court shall hear the parties, and upon being hearing — not summary — for the purpose,
satisfied that the making of the agreement or such failure to under the Rules of Court.
comply therewith is not in issue, shall make an order
directing the parties to proceed to arbitration in accordance (2) A preliminary hearing of the special and
with the terms of the agreement. If the making of the affirmative defense to show that Petitioner
agreement or default be in issue the court shall proceed to has not cause of action against respondent's
summarily hear such issue. If the finding be that no claim for damages is denied; a resolution on
agreement in writing providing for arbitration was made, or this issue is deferred after the trial of the
that there is no default in the proceeding thereunder, the case on the merits.
proceeding shall be dismissed. If the finding be that a written
provision for arbitration was made and there is a default in And challenges the Order of June 22, 1990 denying its
proceeding thereunder, an order shall be made summarily motion for reconsideration of the said earlier Order.
directing the parties to proceed with the arbitration in
accordance with the terms thereof. From the petition below of respondent Yao, it appears that
he is the present owner of a commercial building a portion of
The court shall decide all motions, petitions or application which is leased to petitioner under a contract of lease
filed under the provisions of this Act, within ten days after executed on December 23, 1993 with the former owner
such motions, petitions, or applications have been heard by thereof, La Proveedora, Inc., which contract expired on April
it. 30, 1989. However, petitioner exercised its option to lease
the same building for another five years. But petitioner and
respondent Yao disagreed on the rental rate, and to resolve
the controversy, the latter, thru written notices to the former, since respondent Yao has not yet formally required
expressed his intention to submit their disagreement to arbitrators Alamarez and Sabile to agree on the third
arbitration, in accordance with Republic Act 876, otherwise arbitrator, within ten (10) days from notice, and that the delay
known as the Arbitration Law, and paragraph 7 of their lease in the arbitration was due to respondent Yao's failure to
contract, providing that: perform what is incumbent upon him, of notifying and
thereafter, requiring both arbitrators to appoint the third
7. . . . Should the parties fail to agree on the member of the Board of Arbitrators. According to petitioner, it
rate of rentals, the same shall be submitted actually gave arbitrators Sabile and Alamarez a free hand in
to a group of Arbitrators composed of three choosing the third arbitrator; and, therefore, respondent Yao
(3) members, one to be appointed by has no cause of action against it (petitioner). By way of
LESSOR, another by LESSEE and the third Counterclaim, petitioner alleged that it suffered actual
one to be agreed upon by the two arbitrators damages of P100,000.00; and incurred attorney's fees of
previously chosen and the parties hereto P50,000.00, plus P500.00 for every court appearance of its
shall submit to the decision of the counsel.
arbitrators.
On October 20, 1989, respondent Yao filed an amended
Thus, on May 6, 1989, respondent Yao appointed Domingo petition for "Enforcement of Arbitration Agreement with
Alamarez, Jr. as his arbitrator, while on June 5, 1989, Damages;" praying that petitioner be ordered to pay interest
petitioner chose Atty. Casiano Sabile as its arbitrator. The on the unpaid rents, at the prevailing rate of interest in
confirmation of the appointment of Aurelio Tupang, as third commercial banks, and exemplary damages of at least
arbitrator, was held in abeyance because petitioner P250,000.00.
instructed Atty. Sabile to defer the same until its Board of
Directors could convene and approve Tupang's appointment. On October 24, 1989, despite petitioner's opposition to the
Respondent Yao theorizes that this was petitioner's design motion to admit the amended petition, the respondent court
to delay the arbitration proceedings, in violation of the admitted the same.
Arbitration Law, and the governing stipulation of their
contract of lease. On October 31, 1989, petitioner answered the amended
petition; contending, among others, that the amended
On the basis of the aforesaid allegations, respondent Yao petition should be dismissed on the ground of non-payment
prayed that after summary hearing pursuant to Section 6 of of the requisite filing fees therefor; and it being in the nature
the Arbitration Law, Atty. Casiano Sabile and Domingo of an ordinary civil action, a full blown and regular trial, is
Alamarez be directed to proceed with the arbitration in necessary; so that respondent Yao's proposition for a
accordance with Section 7 of subject Contract of Lease and summary hearing of the arbitration issue and separate trial
the applicable provisions of the Arbitration law, by appointing for his claim for damages is procedurally untenable and
and confirming the appointment of the Third Arbitrator; and implausible.
that the Board of Three Arbitrators be ordered to immediately
convene and resolve the controversy before it, pursuant to Invoking Section 5, Rule 16 of the Rules of Court, petitioner
Section 12 and the succeeding sections of the Arbitration presented a "Motion to Set Case for Preliminary Hearing" of
Law. (Annex "A," Petition.) its special and affirmative defenses, which are grounds fro a
motion to dismiss.
In its Answer with Counterclaim (Annex "C," Petition),
petitioner here specifically denied the averments of the In its Order of November 14, 1989, the respondent court
petition below; theorizing that such petition is premature announced that the two arbitrators chose Mrs. Eloisa R.
Narciso as the third arbitrator. And on November 21, 1989, it the purpose of objecting to the jurisdiction of the court; otherwise, he shall be
ordered the parties to submit their position papers on the deemed to have submitted himself to that jurisdiction. The decisions
issue as to whether or not respondent Yao's claim for promulgated heretofore by this Court would likewise seemingly apply
damages may be litigated upon in the summary proceeding estoppel to bar the defendant from pursuing that defense by alleging in his
for enforcement of arbitration agreement. It likewise informed answer any other issue for dismissing the action.
the parties that petitioner's Motion to Set Case for
Preliminary Hearing" of Special and Affirmative Defenses A citation of a few of our decisions might be apropos.
would be resolved together with the question of damages.
In Wang Laboratories, Inc., vs. Mendoza (156 SCRA 44), this Court has
On April 26, 1990, the aforequoted assailed Order issued. In ruled that if the defendant, besides setting up in a motion to dismiss his
moving for reconsideration of the said Order, petitioner objection to the jurisdiction of the court, alleges at the same time any other
argued that in Special Case No. 6024, the respondent court ground for dismissing the action, he is deemed to have submitted himself to
sits as a special court exercising limited jurisdiction and is the jurisdiction of the court. In the process, it has equated the matter to a
not competent to act on respondent Yao's claim for situation where, such as in Immaculata vs. Judge Navarro, et al. (146 SCRA
damages, which poses an issue litigable in an ordinary civil 5), the defendant invokes an affirmative relief against his opponent.
action. But the respondent court was not persuaded by
petitioner's submission. On June 22, 1990, it denied the In De Midgely vs. Judge Ferandos (64 SCRA 23, 31), the Court elaborated
motion for reconsideration. (Rollo, pp. 89-93).
thusly:
While the appellate court has agreed with petitioner that, under Section 6 of We are of the opinion that the lower court has acquired
Republic Act No. 876, a court, acting within the limits of its special
jurisdiction over the person of Mrs. Midgely by reason of her
jurisdiction, may in this case solely determine the issue of whether the
voluntary appearance. The reservation in her motion to
litigants should proceed or not to arbitration, it, however, considered
dismiss that she was making a special appearance to
petitioner in estoppel from questioning the competence of the court to
contest the court's jurisdiction over her person may be
additionally hear and decide in the summary proceedings private disregarded.
respondent's claim for damages, it (petitioner) having itself filed similarly its
own counterclaim with the court a quo.
It may be disregarded because it was nullified by the fact
that in her motion to dismiss she relied not only on the
It is hardly disputable that when a court is called upon to exercise limited and
ground of lack of jurisdiction over her person but also on the
special jurisdiction, that court cannot stray to matters outside the area of its ground that there was no showing that earnest efforts were
declared authority or beyond what has been expressly invested by law exerted to compromise the case and because she prayed
(Elumbaring vs. Elumbaring, 12 Phil. 384, 387), particularly, such as in this
"for such other relief as" may be deemed "appropriate and
instance, where the proceedings are summary in nature.
proper."
Prefatorily, recalling the distinctions, pertinent to the case, between the xxx xxx xxx
court's lack of jurisdiction over the person of the defendant, on the one hand,
and its lack of jurisdiction over the subject matter or the nature of the action,
upon the other hand, should be useful. When the appearance is by motion for the purpose of
objecting to the jurisdiction of the court over the person, it
must be for the sole and separate purpose of objecting to the
The lack of jurisdiction over the person of the defendant may be waived jurisdiction of the court. If his motion is for any other purpose
either expressly or impliedly. When a defendant voluntarily appears, he is than to object to the jurisdiction of the court over his person,
deemed to have submitted himself to the jurisdiction of the court. If he so
he thereby submits himself to the jurisdiction of the court. A
wishes not to waive this defense, he must do so seasonably by motion for
special appearance by motion made for the purpose of
objecting to the jurisdiction of the court over the person will Tested by the above criteria, the Court sees it propitious to re-examine
be held to be a general appearance, if the party in said specifically the question of whether or not the submission of other issues in a
motion should, for example, ask for a dismissal of the action motion to dismiss, or of an affirmative defense (as distinguished from an
upon the further ground that the court had no jurisdiction affirmative relief) in an answer, would necessarily foreclose, and have the
over the subject matter. (Syllabus, Flores vs. Zurbito, supra, effect of a waiver of, the right of a defendant to set up the court's lack of
at page 751. That rule was followed in Ocampo vs. Mina and jurisdiction over the person of the defendant.
Arejola, 41 Phil. 308).
Not inevitably.
The justification for the rule was expressed in Republic vs. Ker and
Companry, Ltd. (18 SCRA 207, 213-214), in this wise: Section 1, Rule 16, of the Rules of Court, provides that a motion to dismiss
may be made on the following grounds:
We observed that the motion to dismiss filed on April 14,
1962, aside from disputing the lower court's jurisdiction over (a) That the court has no jurisdiction over the person of the
defendant's person, prayed for dismissal of the complaint on defendant or over the subject of the action or suit;
the ground that plaintiff's cause of action had prescribed. By
interposing such second ground in its motion to dismiss, Ker
(b) That the court has no jurisdiction over the nature of the
& Co., Ltd. availed of an affirmative defense on the basis of
action or suit;
which it prayed the court to resolve controversy in its favor.
For the court to validly decide the said plea of defendant Ker
& Co., Ltd., it necessarily had to acquire jurisdiction upon the (c) The venue is improperly laid;
latter's person, who, being the proponent of the affirmative
defense, should be deemed to have abandoned its special (d) That the plaintiff has no legal capacity to sue;
appearance and voluntarily submitted itself to the jurisdiction
of the court. (e) That there is another action pending between the same
parties for the same cause;
Voluntary appearance cures defects of summons, if any,
Such defect, if any, was further cured when defendant filed (f) That the cause of action is barred by a prior judgment or
its answer to the complaint. A defendant can not be by statute of limitations;
permitted to speculate upon the judgment of the court by
objecting to the court's jurisdiction over its person if the (g) That the complaint states no cause of action;
judgment is adverse to it, and acceding to jurisdiction over its
person if and when the judgment sustains its defenses.
(h) That the claim or demand set forth in the plaintiff's
pleading has been paid, waived, abandoned, or otherwise
The doctrine of estoppel is predicated on, and has its origin in, equity which, extinguished;
broadly defined, is justice according to natural law and right. It is a principle
intended to avoid a clear case of injustice. The term is hardly distinguishable
( i ) That the claim on which the action or suit is founded is
from a waiver of right. Estoppel, like its said counterpart, must be
unenforceable under the provisions of the statute of frauds;
unequivocal and intentional for, when misapplied, it can easily become a
most convenient and effective means of injustice. Estoppel is not understood
to be a principle that, as a rule, should prevalently apply but, such as it ( j ) That the suit is between members of the same family
concededly is, as a mere exception from the standard legal norms of general and no earnest efforts towards a compromise have been
application that can be invoked only in highly exceptional and justifiable made.
cases.
Any ground for dismissal in a motion to dismiss, except improper venue, which has ceased to do business at the time of the filing of a
may, as further set forth in Section 5 of the same rule, be pleaded as an complaint, can still be made to answer for a cause of action
affirmative defense and a preliminary hearing may be had thereon as if a which accrued while it was doing business, is another matter
motion to dismiss had been filed. An answer itself contains the negative, as that would yet have to await the reception and admission of
well as affirmative, defenses upon which the defendant may rely (Section 4, evidence. Since these points have seasonably been raised
Rule 6, Rules of Court). A negative defense denies the material facts averred by the petitioner, there should be no real cause for what may
in the complaint essential to establish the plaintiff's cause of action, while an understandably be its apprehension, i.e., that by its
affirmative defense in an allegation of a new matter which, while admitting participation during the trial on the merits, it may, absent an
the material allegations of the complaint, would, nevertheless, prevent or bar invocation of separate or independent reliefs of its own, be
recovery by the plaintiff. Inclusive of these defenses are those mentioned in considered to have voluntarily submitted itself to the court's
Rule 16 of the Rules of Court which would permit the filing of a motion to jurisdiction.
dismiss.
Lack of jurisdiction over the subject matter of the suit is yet another matter.
In the same manner that the plaintiff may assert two or more causes of action Whenever it appears that the court has no jurisdiction over the subject
in a court suit, a defendant is likewise expressly allowed, under Section 2, matter, the action shall be dismissed (Section 2, Rule 9, Rules of Court). This
Rule 8, of the Rules of Court, to put up his own defenses alternatively or defense may be interposed at any time, during appeal (Roxas vs. Rafferty,
even hypothetically. Indeed, under Section 2, Rule 9, of the Rules of Court, 37 Phil. 957) or even after final judgment (Cruzcosa vs. Judge Concepcion,
defenses and objections not pleaded either in a motion to dismiss or in an et al., 101 Phil. 146). Such is understandable, as this kind of jurisdiction is
answer, except for the failure to state a cause of action, are deemed waived. conferred by law and not within the courts, let alone the parties, to
We take this to mean that a defendant may, in fact, feel enjoined to set up, themselves determine or conveniently set aside. In People vs. Casiano (111
along with his objection to the court's jurisdiction over his person, all other Phil. 73 93-94), this Court, on the issue of estoppel, held:
possible defenses. It thus 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 The operation of the principle of estoppel on the question of
estoppel. By defenses, of course, we refer to the grounds provided for in jurisdiction seemingly depends upon whether the lower court
Rule 16 of the Rules of Court that must be asserted in a motion to dismiss or actually had jurisdiction or not. If it had no jurisdiction, but the
by way of affirmative defenses in an answer. case was tried and decided upon the theory that it had
jurisdiction, the parties are not barred, on appeal, from
Mindful of the foregoing, in Signetics Corporation vs. Court of Appeals and assailing such jurisdiction, for the same "must exist as a
Freuhauf Electronics Phils., Inc. (225 SCRA 737, 738), we lately ruled: matter of law, and may not be conferred by consent of the
parties or by estoppel" (5 C.J.S., 861-863). However, if the
This is not to say, however, that the petitioner's right to lower court had jurisdiction, and the case was heard and
question the jurisdiction of the court over its person is now to decided upon a given theory, such, for instance, as that the
be deemed a foreclosed matter. If it is true, as Signetics court had no jurisdiction, the party who induced it to adopt
claims, that its only involvement in the Philippines was such theory will not be permitted, on appeal, to assume an
through a passive investment in Sigfil, which it even later inconsistent position — that the lower court had jurisdiction.
disposed of, and that TEAM Pacific is not its agent, then it Here, the principle of estoppel applies. The rule that
cannot really be said to be doing business in the Philippines. jurisdiction is conferred by law, and does not depend upon
It is a defense, however, that requires the contravention of the will of the parties, has not bearing thereon.
the allegations of the complaint, as well as full ventilation, in
effect, of the main merits of the case, which should not thus The rule was reiterated in Calimlim vs. Ramirez (118 SCRA 399, 406), and
be within the province of a mere motion to dismiss. So, also, quite recently, in Southeast Asian Fisheries Development Center-
the issue posed by the petitioner as to whether a foreign Aquaculture Department vs. National Labor Relations Commission (206
corporation which has done business in the country, but SCRA 283).
Jurisdiction over the nature of the action, in concept, differs from jurisdiction WHEREFORE, the decision of the Court of Appeals and the orders of the
over the subject matter. Illustrated, lack of jurisdiction over the nature of the trial court in question are SET ASIDE. The court a quo, in the instant
action is the situation that arises when a court, which ordinarily would have proceedings, is ordered to DESIST from further hearing private respondent's
the authority and competence to take a case, is rendered without it either claim, as well as petitioner's counterclaim, for damages. No costs.
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 SO ORDERED.
certain other courts or quasi-judicial agencies for determination.
Nevertheless, it can hardly be questioned that the rules relating to the effects Narvasa, C.J., Cruz, Padilla, Bidin, Regalado, Davide, Jr., Romero,
of want of jurisdiction over the subject matter should apply with equal vigor to Bellosillo, Melo, Quiason, Puno, Kapunan and Mendoza, JJ., concur.
cases where the court is similarly bereft of jurisdiction over the nature of the
action.
In summary, it is our considered view, as we now so hereby express,

that —
(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.
The circumstances obtaining in this case are far, we hold, from justifying the
application of estoppel against either party.
G.R. No. 136426 August 6, 1999 Same; Same; Same; Same; Service of summons upon persons other than
those mentioned in Section 13 of Rule 14 (old rule) has been held as
E. B. VILLAROSA & PARTNER CO., LTD., petitioner, improper.–Service of summons upon persons other than those mentioned in
vs. Section 13 of Rule 14 (old rule) has been held as improper. Even under the
HON. HERMINIO I. BENITO, in his capacity as Presiding Judge, RTC, old rule, service upon a general manager of a firm’s branch office has been
Branch 132, Makati City held as improper as summons should have been served at the firm’s principal
and IMPERIAL DEVELOPMENT CORPORATION, respondent. office. In First Integrated Bonding & Ins. Co., Inc. vs. Dizon, it was held that
the service of summons on the general manager of the insurance firm’s Cebu
Remedial Law; Civil Procedure; Summons; Jurisdiction; The designation of branch was improper; default order could have been obviated had the
persons or officers who are authorized to accept summons for a domestic summons been served at the firm’s principal office.
corporation or partnership is now limited and more clearly specified in Section
11, Rule 14 of the 1997 Rules of Civil Procedure.–The designation of persons Same; Same; Same; Same; Court rules that the service of summons upon the
or officers who are authorized to accept summons for a domestic corporation branch manager of petitioner at its branch office at Cagayan de Oro, instead
or partnership is now limited and more clearly specified in Section 11, Rule 14 of upon the general manager at its principal office at Davao City is improper;
of the 1997 Rules of Civil Procedure. The rule now states “general manager– Trial court did not acquire jurisdiction over the person of the petitioner.–
instead of only “manager–; “corporate secretary– instead of “secretary–; and Accordingly, we rule that the service of summons upon the branch manager of
“treasurer– instead of “cashier.– The phrase “agent, or any of its directors– is petitioner at its branch office at Cagayan de Oro, instead of upon the general
conspicuously deleted in the new rule. manager at its principal office at Davao City is improper. Consequently, the
trial court did not acquire jurisdiction over the person of the petitioner.
Same; Same; Same; Same; Strict compliance with the rules has been
enjoined; The liberal construction rule cannot be invoked and utilized as a Same; Same; Same; Same; The inclusion in a motion to dismiss of other
substitute for the plain legal requirements as to the manner in which summons grounds aside from lack of jurisdiction over the person of the defendant shall
should be served on a domestic corporation.–It should be noted that even prior not be deemed a voluntary appearance.–Before, the rule was that a party may
to the effectivity of the 1997 Rules of Civil Procedure, strict compliance with challenge the jurisdiction of the court over his person by making a special
the rules has been enjoined. In the case of Delta Motor Sales Corporation vs. appearance through a motion to dismiss and if in the same motion, the movant
Mangosing, the Court held: “A strict compliance with the mode of service is raised other grounds or invoked affirmative relief which necessarily involves
necessary to confer jurisdiction of the court over a corporation. The officer the exercise of the jurisdiction of the court, the party is deemed to have
upon whom service is made must be one who is named in the statute; submitted himself to the jurisdiction of the court. This doctrine has been
otherwise the service is insufficient. x x x. The purpose is to render it abandoned in the case of La Naval Drug Corporation vs. Court of Appeals, et
reasonably certain that the corporation will receive prompt and proper notice al., which became the basis of the adoption of a new provision in the former
in an action against it or to insure that the summons be served on a Section 23, which is now Section 20 of Rule 14 of the 1997 Rules. Section 20
representative so integrated with the corporation that such person will know now provides that “the inclusion in a motion to dismiss of other grounds aside
what to do with the legal papers served on him. In other words, ‘to bring home from lack of jurisdiction over the person of the defendant shall not be deemed
to the corporation notice of the filing of the action.’ x x x. The liberal a voluntary appearance.– The emplacement of this rule clearly underscores
construction rule cannot be invoked and utilized as a substitute for the plain the purpose to enforce strict enforcement of the rules on summons.
legal requirements as to the manner in which summons should be served on Accordingly, the filing of a motion to dismiss, whether or not belatedly filed by
a domestic corporation. x x x.– (italics supplied). the defendant, his authorized agent or attorney, precisely objecting to the
jurisdiction of the court over the person of the defendant can by no means be
deemed a submission to the jurisdiction of the court. There being no proper
service of summons, the trial court cannot take cognizance of a case for lack
of jurisdiction over the person of the defendant. Any proceeding undertaken by Summons, together with the complaint, were served upon the defendant,
the trial court will consequently be null and void. through its Branch Manager Engr. Wendell Sabulbero at the stated address
at Kolambog, Lapasan, Cagayan de Oro City2 but the Sheriff's Return of
Service3 stated that the summons was duly served "upon defendant E.B.
Villarosa & Partner Co., Ltd. thru its Branch Manager Engr. WENDELL
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari and Prohibition. SALBULBERO on May 5, 1998 at their new office Villa Gonzalo, Nazareth,
Cagayan de Oro City, and evidenced by the signature on the face of the
original copy of the summons.1âwphi1.nêt
On June 9, 1998, defendant filed a Special Appearance with Motion to
Capuyan, Quimpo & Salazar for petitioner. Dismiss4 alleging that on May 6, 1998, "summons intended for defendant"
was served upon Engr. Wendell Sabulbero, an employee of defendant at its
Ermitano, Sangco, Manzano & Associates for private respondent.
branch office at Cagayan de Oro City. Defendant prayed for the dismissal of
the complaint on the ground of improper service of summons and for lack of
jurisdiction over the person of the defendant. Defendant contends that the
trial court did not acquire jurisdiction over its person since the summons was
GONZAGA-REYES, J.: improperly served upon its employee in its branch office at Cagayan de Oro
City who is not one of those persons named in Section 11, Rule 14 of the
Before this Court is a petition for certiorari and prohibition with prayer for the 1997 Rules of Civil Procedure upon whom service of summons may be
issuance of a temporary restraining order and/or writ of preliminary injunction made.
seeking to annul and set aside the Orders dated August 5, 1998 and
November 20, 1998 of the public respondent Judge Herminio I. Benito of the Meanwhile, on June 10, 1998, plaintiff filed a Motion to Declare Defendant in
Regional Trial Court of Makati City, Branch 132 and praying that the public Default5 alleging that defendant has failed to file an Answer despite its receipt
respondent court be ordered to desist from further proceeding with Civil Case allegedly on May 5, 1998 of the summons and the complaint, as shown in the
No. 98-824. Sheriffs Return.
Petitioner E.B. Villarosa & Partner Co., Ltd. is a limited partnership with On June 22, 1998, plaintiff filed an Opposition to Defendant's Motion to
principal office address at 102 Juan Luna St., Davao City and with branch Dismiss6 alleging that the records show that defendant, through its branch
offices at 2492 Bay View Drive, Tambo, Parañaque, Metro Manila and manager, Engr. Wendell Sabulbero actually received the summons and the
Kolambog, Lapasan, Cagayan de Oro City. Petitioner and private respondent complaint on May 8, 1998 as evidenced by the signature appearing on the
executed a Deed of Sale with Development Agreement wherein the former copy of the summons and not on May 5, 1998 as stated in the Sheriffs
agreed to develop certain parcels of land located at Barrio Carmen, Cagayan Return nor on May 6, 1998 as stated in the motion to dismiss; that defendant
de Oro belonging to the latter into a housing subdivision for the construction has transferred its office from Kolambog, Lapasan, Cagayan de Oro to its
of low cost housing units. They further agreed that in case of litigation new office address at Villa Gonzalo, Nazareth, Cagayan de Oro; and that the
regarding any dispute arising therefrom, the venue shall be in the proper purpose of the rule is to bring home to the corporation notice of the filing of
courts of Makati. the action.
On April 3, 1998, private respondent, as plaintiff, filed a Complaint for Breach On August 5, 1998, the trial court issued an Order7 denying defendant's
of Contract and Damages against petitioner, as defendant, before the Motion to Dismiss as well as plaintiffs Motion to Declare Defendant in
Regional Trial Court of Makati allegedly for failure of the latter to comply with Default. Defendant was given ten (10) days within which to file a responsive
its contractual obligation in that, other than a few unfinished low cost houses, pleading. The trial court stated that since the summons and copy of the
there were no substantial developments therein.1 complaint were in fact received by the corporation through its branch
manager Wendell Sabulbero, there was substantial compliance with the rule
on service of summons and consequently, it validly acquired jurisdiction over When the complaint was filed by Petitioner on April 3, 1998, the 1997 Rules
the person of the defendant. of Civil Procedure was already in force.14
On August 19, 1998, defendant, by Special Appearance, filed a Motion for Sec. 11, Rule 14 of the 1997 Rules of Civil Procedure provides that:
Reconsideration8 alleging that Section 11, Rule 14 of the new Rules did not
liberalize but, on the contrary, restricted the service of summons on persons When the defendant is a corporation, partnership or association
enumerated therein; and that the new provision is very specific and clear in organized under the laws of the Philippines with a juridical
that the word "manager" was changed to "general manager", "secretary" to personality, service may be made on the president, managing
"corporate secretary", and excluding therefrom agent and director. partner, general manager, corporate secretary, treasurer, or in-house
counsel. (emphasis supplied).
On August 27, 1998, plaintiff filed an Opposition to defendant's Motion for
Reconsideration9 alleging that defendant's branch manager "did bring home" This provision revised the former Section 13, Rule 14 of the Rules of Court
to the defendant-corporation the notice of the filing of the action and by virtue which provided that:
of which a motion to dismiss was filed; and that it was one (1) month after
receipt of the summons and the complaint that defendant chose to file a Sec. 13. Service upon private domestic corporation or partnership. —
motion to dismiss.
If the defendant is a corporation organized under the laws of the
Philippines or a partnership duly registered, service may be made on
On September 4, 1998, defendant, by Special Appearance, filed a Reply10 the president, manager, secretary, cashier, agent, or any of its
contending that the changes in the new rules are substantial and not just directors. (emphasis supplied).
general semantics.
Petitioner contends that the enumeration of persons to whom summons may
Defendant's Motion for Reconsideration was denied in the Order dated be served is "restricted, limited and exclusive" following the rule on statutory
November 20, 1998.11 construction expressio unios est exclusio alterius and argues that if the Rules
of Court Revision Committee intended to liberalize the rule on service of
Hence, the present petition alleging that respondent court gravely abused its summons, it could have easily done so by clear and concise language.
discretion tantamount to lack or in excess of jurisdiction in denying
petitioner's motions to dismiss and for reconsideration, despite the fact that We agree with petitioner.
the trial court did not acquire jurisdiction over the person of petitioner
because the summons intended for it was improperly served. Petitioner Earlier cases have uphold service of summons upon a construction project
invokes Section 11 of Rule 14 of the 1997 Rules of Civil Procedure.
manager15; a corporation's assistant manager16; ordinary clerk of a
corporation17; private secretary of corporate executives18; retained counsel19;
Private respondent filed its Comment to the petition citing the cases Kanlaon officials who had charge or control of the operations of the corporation, like
Construction Enterprises Co., Inc. vs. NLRC12 wherein it was held that the assistant general manager20; or the corporation's Chief Finance and
service upon a construction project manager is valid and in Gesulgon vs. Administrative Officer21. In these cases, these persons were considered as
NLRC13 which held that a corporation is bound by the service of summons "agent" within the contemplation of the old rule.22 Notably, under the new
upon its assistant manager. Rules, service of summons upon an agent of the corporation is no longer
authorized.
The only issue for resolution is whether or not the trial court acquired
jurisdiction over the person of petitioner upon service of summons on its The cases cited by private respondent are therefore not in point.
Branch Manager.
In the Kanlaon case, this Court ruled that under the NLRC Rules of
Procedure, summons on the respondent shall be served personally or by
registered mail on the party himself; if the party is represented by counsel or Retired Justice Oscar Herrera, who is also a consultant of the Rules of Court
any other authorized representative or agent, summons shall be served on Revision Committee, stated that "(T)he rule must be strictly observed.
such person. In said case, summons was served on one Engr. Estacio who Service must be made to one named in (the) statute . . . .24
managed and supervised the construction project in Iligan City (although the
principal address of the corporation is in Quezon City) and supervised the It should be noted that even prior to the effectivity of the 1997 Rules of Civil
work of the employees. It was held that as manager, he had sufficient Procedure, strict compliance with the rules has been enjoined. In the case of
responsibility and discretion to realize the importance of the legal papers Delta Motor Sales Corporation vs. Mangosing,25 the Court held:
served on him and to relay the same to the president or other responsible
officer of petitioner such that summons for petitioner was validly served on A strict compliance with the mode of service is necessary to confer
him as agent and authorized representative of petitioner. Also in the jurisdiction of the court over a corporation. The officer upon whom
Gesulgon case cited by private respondent, the summons was received by service is made must be one who is named in the statute; otherwise
the clerk in the office of the Assistant Manager (at principal office address)
the service is insufficient. . . .
and under Section 13 of Rule 14 (old rule), summons may be made upon the
clerk who is regarded as agent within the contemplation of the rule.
The purpose is to render it reasonably certain that the corporation
will receive prompt and proper notice in an action against it or to
The designation of persons or officers who are authorized to accept insure that the summons be served on a representative so integrated
summons for a domestic corporation or partnership is now limited and more
with the corporation that such person will know what to do with the
clearly specified in Section 11, Rule 14 of the 1997 Rules of Civil Procedure.
legal papers served on him. In other words, "to bring home to the
The rule now states "general manager" instead of only "manager"; "corporate
corporation notice of the filing of the action." . . . .
secretary" instead of "secretary"; and "treasurer" instead of "cashier." The
phrase "agent, or any of its directors" is conspicuously deleted in the new
rule. The liberal construction rule cannot be invoked and utilized as a
substitute for the plain legal requirements as to the manner in which
summons should be served on a domestic corporation. . . . .
The particular revision under Section 11 of Rule 14 was explained by retired
(emphasis supplied).
Supreme Court Justice Florenz Regalado, thus:23
Service of summons upon persons other than those mentioned in Section 13
. . . the then Sec. 13 of this Rule allowed service upon a defendant
of Rule 14 (old rule) has been held as improper.26 Even under the old rule,
corporation to "be made on the president, manager, secretary,
service upon a general manager of a firm's branch office has been held as
cashier, agent or any of its directors." The aforesaid terms were
improper as summons should have been served at the firm's principal office.
obviously ambiguous and susceptible of broad and sometimes In First Integrated Bonding & Inc. Co., Inc. vs. Dizon,27 it was held that the
illogical interpretations, especially the word "agent" of the
service of summons on the general manager of the insurance firm's Cebu
corporation. The Filoil case, involving the litigation lawyer of the
branch was improper; default order could have been obviated had the
corporation who precisely appeared to challenge the validity of
summons been served at the firm's principal office.
service of summons but whose very appearance for that purpose
was seized upon to validate the defective service, is an illustration of
the need for this revised section with limited scope and specific And in the case of Solar Team Entertainment, Inc. vs. Hon. Helen Bautista
terminology. Thus the absurd result in the Filoil case necessitated Ricafort, et al.28 the Court succinctly clarified that, for the guidance of the
the amendment permitting service only on the in-house counsel of Bench and Bar, "strictest" compliance with Section 11 of Rule 13 of the 1997
the corporation who is in effect an employee of the corporation, as Rules of Civil Procedure (on Priorities in modes of service and filing) is
distinguished from an independent practitioner. (emphasis supplied). mandated and the Court cannot rule otherwise, lest we allow circumvention
of the innovation by the 1997 Rules in order to obviate delay in the
administration of justice.
Accordingly, we rule that the service of summons upon the branch manager
of petitioner at its branch office at Cagayan de Oro, instead of upon the
general manager at its principal office at Davao City is improper.
Consequently, the trial court did not acquire jurisdiction over the person of
the petitioner.
The fact that defendant filed a belated motion to dismiss did not operate to
confer jurisdiction upon its person. There is no question that the defendant's
voluntary appearance in the action is equivalent to service of summons. 29
Before, the rule was that a party may challenge the jurisdiction of the court
over his person by making a special appearance through a motion to dismiss
and if in the same motion, the movant raised other grounds or invoked
affirmative relief which necessarily involves the exercise of the jurisdiction of
the court.30 This doctrine has been abandoned in the case of La Naval Drug
Corporation vs. Court of Appeals, et al.,31 which became the basis of the
adoption of a new provision in the former Section 23, which is now Section
20 of Rule 14 of the 1997 Rules. Section 20 now provides that "the inclusion
in a motion to dismiss of other grounds aside from lack of jurisdiction over the
person of the defendant shall not be deemed a voluntary appearance." The
emplacement of this rule clearly underscores the purpose to enforce strict
enforcement of the rules on summons. Accordingly, the filing of a motion to
dismiss, whether or not belatedly filed by the defendant, his authorized agent
or attorney, precisely objecting to the jurisdiction of the court over the person
of the defendant can by no means be deemed a submission to the
jurisdiction of the court. There being no proper service of summons, the trial
court cannot take cognizance of a case for lack of jurisdiction over the person
of the defendant. Any proceeding undertaken by the trial court will
consequently be null and void.32
WHEREFORE, the petition is hereby GRANTED. The assailed Orders of the

public respondent trial court are ANNULLED and SET ASIDE. The public
respondent Regional Trial Court of Makati, Branch 132 is declared without
jurisdiction to take cognizance of Civil Case No. 98-824, and all its orders
and issuances in connection therewith are hereby ANNULLED and SET
ASIDE.1âwphi1.nêt
SO ORDERED.
Melo, Vitug, Panganiban and Purisima, JJ., concur.

G.R. No. 91486 January 19, 2001 OFELIA B. YAPCHULAY, FELISA B. YAPCHULAY, FE B. YAPCHULAY,
WILMA B. YAPCHULAY, FELIX B. YAPCHULAY, MARIANO B.
ALBERTO G. PINLAC, ATTY. ERIBERTO H. DECENA, RODOLFO F. YAPCHULAY, GEN. ALFREDO LIM, and other registered OWNERS OF
REYES, FELIPE BRIONES, JUANITO METILLA, JR., FELIPE A. FLORES, VILAR-MALOLES (VILMA) SUBDIVISION, respondents.
HERMINIO ELEVADO, NARCISO S. SIMEROS, petitioners,
vs. Civil Procedure; Judgments; Two justifiable grounds for an action for
COURT OF APPEALS, ATTY. CORAZON A. MERRERA, ATTY. JEAN annulment of judgment.—An action for annulment of judgment is grounded
MAJASIAR-PUNO, SERGIO ACABAN, represented by Atty. Ramon only on two justifications: (1) extrinsic fraud; and (2) lack of jurisdiction or denial
Gerona, ATTY. ROGELIO VELASCO, MARTINA S. NONA, OVIDEO of due process. All that herein private respondents had to prove was that the
MEJICA, ALFREDO ITALIA, MARIANO GUEVARRA, JESUS YUJUICO, trial court had no jurisdiction; that they were prevented from having a trial or
DOMINADOR RIVERA, SATURNINA SALES, represented by Atty. presenting their case to the trial court by some act or conduct of petitioners; or
Consolacion Sales-Demontano, FRED CHUA, SONIA SY CHUA,
that they had been denied due process of law.
LAWRENCE CHUA, CAROLINA C. RUBIO, represented by Tessie
Sebastian, GEORGE G. GUERRERO, BEATRIZ TANTOCO, represented
by Filomena Cervantes, ATTY. MARCELA CELESTINO-GARCIA,
FEDERICO GARCIA, ILDEFONSO MORALES, LEONCIA VELASCO, Same; Same; The very purpose of the action for annulment of judgment was
OCRAVIO F. LINA, ANA MARIA JARAMILLO, ESTRELLA BASA, JOSE to have the final and executory judgment set aside so that there will be a
ESTEVA, JR., CIRILO GONZALES, VILLY TOBLAS, MIGUEL DELA PAZ, renewal of litigation.—The action for annulment of judgment cannot and was
RUBEN GUILLERMO, FAUSTO YADAO, represented by Jeremias not a substitute for the lost remedy of appeal. The very purpose of the action
Panlilio, RICARDO YAP, ROSAURO/PATRICL MARQUWZ, represented for annulment of judgment was to have the final and executory judgment set
by Emmanuel Marquez, MODESTA FABRIG AND MAXIMINO SALCEDA, aside so that there will be a renewal of litigation. Whether or not the assailed
MELIA LATOMBO, TERESITA PANGILINAN-RIVERO, ARCH. DANILO C.
Partial Decision based solely on facts and evidence presented by the
DE CASTRO, JOSE S. LEDESMA, JAIME P. ANG, VEICENTE P. ANG,
MAURO U. GABRIEL, ATTY. VIRGINIA GOMEZ, GIL S. BONILLA, petitioners is meritorious is irrelevant and immaterial. Thus, the Court of
LOURDES BLANCO, represented by Catalina Blanco, JOSEFA Appeals did not err, nor did it violate the petitioners’ right to due process of
SANCHEZ and ROSALINA VILLEGAS, represented by Heidi Bobis, law, when it refused to consider all the factual issues raised by petitioners.
SHIRLEY BUCAG, QUIRINA O. TUVERA, represented by Wilfredo
Orejuros, GREGORIO AVENTINO, represented by Enrico Aventino,
LEONARDO L. NICOLAS, NICOMEDES PENARANDA, FRANCISCA Same; Summons; The modes of service of summons should be strictly
MEDRANO, OFELIA IGNACIO, ROSENDO ABIBO, represented by followed in order that the court may acquire jurisdiction over the respondents,
Santos Chavez, SOLEDAD BAUTISTA DE COLUMNA, represented by
and failure to strictly comply with the requirements of the rules regarding the
Zenaida Valle, MARQUITA/SEBASTIAN LOPEZ, represented by
order of its publication is a fatal defect in the service of summons.—While the
Emmanuel Marquez, DELIA DORION, GERARDO L. SANTIAGO, FIDEL
PANGANIBA, represented by Manuel dela Roca, MATEO and OFELIA service of summons by publication may have been done with the approval of
INOVEJAS, REMEDIOS C. DOVAS, represented by Josefa Capistrano, the trial court, it does not cure the fatal defect that the “Metropolitan
DOMINGO ALTAMIRANO and SPOUSES ROLANDO ALTAMIRANO and Newsweek” is not a newspaper of general circulation in Quezon City. The
MINERVA FETALVERO, BEATRIZ RINGPIS, ROSARIO DE MATA, Rules strictly require that publication must be “in a newspaper of general
RUFINA CRUZ, represented by JOSEFA MANABAT, SPOUSES ANITA circulation and in such places and for such time as the court may order.” The
SALONGA-CAPAGCUAN and MAYNARD CAPAGCUAN, DISCORA court orders relied upon by petitioners did not specify the place and the length
YATCO, represented by VICTORINA Y. FIRME, and CONSUELO YATCO, of time that the summons was to be published. In the absence of such
GENEROSA MEDINA VDA. DE NOGUERA, represented by ATTY. specification, publication in just any periodical does not satisfy the strict
RAYMUNDO M. NOGUERA, BEATRIZ SALANDANAN and LOURDES requirements of the rules. The incomplete directive of the court a quo coupled
ALONTE-VASQUEZ, PEDRO COSIO and VICTOTINA CARINO, RUTH C. with the defective publication of the summons rendered the service by
ZAPARTE, PRECIOSISIMA V. YAPCHULAY, BASILISA B. YAPCHULAY,
publication ineffective. The modes of service of summons should be strictly YNARES-SANTIAGO, J.:
followed in order that the court may acquire jurisdiction over the respondents,
and failure to strictly comply with the requirements of the rules regarding the The instant case springs from a contentious and protracted dispute over a
order of its publication is a fatal defect in the service of summons. It cannot be sizeable piece of real property situated in what is now known as Old Balara,
overemphasized that the statutory requirements of service of summons, Sitio Veterans, Barrio Payatas and Silangan, all of Quezon City. There are
whether personally, by substituted service, or by publication, must be followed numerous claimants, titled and untitled alike, each either pressing to own a
strictly, faithfully and fully, and any mode of service other than that prescribed piece of it, or striving to protect one's right as a titled owner.1âwphi1.nêt
by the statute is considered ineffective.
Petitioners herein are World War II veterans, their dependents and
successors-in-interest. Together, they filed a class suit primarily for Quieting
of Title before the Regional Trial Court of Quezon City, Branch 83, where it
Constitutional Law; Due Process; It is elementary that before a person can be was docketed as Civil Case No. Q-35672. In particular, petitioners claimed
deprived of his right or property he should first be informed of the claim against that the real property, which has an aggregate area of 502 hectares, were
him and the theory on which such claim is premised.—Petitioners failed to part of forest lands belonging to the government; that they and their
show that they were the aggrieved parties. If ever there was denial of due predecessors-in-interest have occupied said property continuously,
process, it was private respondents who suffered therefrom. Whether by adversely, and exclusively for more than thirty (30) years; and that they have
petitioners’ failure to effectively serve summons or by omitting to name private accordingly filed applications for land titling in their respective names with the
respondents as respondents, the trial court’s Partial Decision declaring private appropriate government agency.
respondents’ titles null and void was clearly violative of the due process
requirement of the Constitution. It is elementary that before a person can be While petitioners claim that the land in dispute was part of the public domain,
deprived of his right or property he should first be informed of the claim against they named as respondents several persons and corporations who are titled
him and the theory on which such claim is premised. The courts will not owners of subdivided parcels of land within the subject property. One of
countenance a denial of the fundamental right to due process, which is a those so impleaded as a party-respondent was the Vil-Ma Maloles
cornerstone of our legal system. Subdivision (hereinafter, Vil-Ma). The individual lot owners of the said
subdivision, however, were not specifically named. Since personal service of
summons could not be effected on Vil-Ma and some of the other named
respondents, petitioners moved for leave of court to serve summons by
PETITION for review on certiorari of a decision of the Court of Appeals. publication which was granted. Accordingly, the summons was published in
the "Metropolitan Newsweek", a periodical edited and published in the City of
Caloocan and Malolos, Bulacan.l
Some of the named respondents filed their respective responsive pleadings,
Bienvenido D. Comia, Igmidio C. hat and Roger E. Panotes for while the others, including Vil-Ma, failed to answer, and were thus declared in
petitioners. default. Consequently, petitioners were allowed to present evidence ex parte
against the defaulted respondents. The court a quo found the following facts
Herrera, Merrera & Herrera haw Office for private respondents. to be conclusive:
Renato A. Taguiam for respondent M.S. Florendo and Sons, Inc.
(T)hat the case involves three parcel of lands, to wit: Lot 1 & 2
Manolito L. Asok for movants Cacatian, et al. situated at the Old Balara, Diliman, Quezon City and Lot 3 situated at
Sitio Veterans, Barrio Payatas and Silangan, Quezon City containing
an aggregate area of 502 hectares more or less; that Lot 1 is
covered by TCT No.5690 in the name of defaulted respondent Jose
V. Bagtas, which title emanated from TCT No.48546 in the name of
Emiliana Vda. De Vera Cruz which contains an actual area of only No.188447 covers a lot located at San Francisco del Monte with a
294.6 sq. meters, but, when said TCT No.5690 was issued the same different mother title, OCT No.515, TCT No. (22092)-61850 covers a
was illegally and fraudulently expanded to cover 23.5767 hectares lot located at Tala Estate Caloocan City, TCT No.14645 covers lot
through fraudulent re-surveys without proper judicial proceedings; located at Kamuning District and TCT No.14692 covers a lot located
that on said illegally expanded area of TCT No.5690 in the name of at Bo. San Isidro, Caloocan City, yet these TCTs were utilized by
respondent Jose V. Bagtas, more than 363 transfer certificates of some people to claim an area located inside the litigated premises
title were subsequently issued including those belonging to some of despite the fact that their technical descriptions, as aforementioned,
the defaulted respondents thereof; that TCT No. 5690 contains no are different from the lands being sought to be covered therewith;
technical description on its face; that Lot 2 is covered by TCT that Lots 1, 2 & 3 have been under the possession of petitioners for a
No.3548 in the name of Eustacio Maloles married to Soledad continuous, public, open, & uninterrupted period of 30 years through
Villegas and Vicente B. Vilar doing business under the name and World War II Veterans Legionnaires of the Philippines, Inc., by the
style of defaulted respondent Vilma Maloles Subdivision Inc., which principle of tacking possession; that the Bureau of Forest
title was derived from TCT No.33531 in the name of Oscar L. Uy Development has certified that Lots 1, 2 & 3 are part of public forest
which in turn came from TCT No.26285 in the name of Maria Lim belonging to the government not yet certified for disposition and
which was immediately derived from OCT No.614 which contains no alienation; that the Bureau of Forest Development knew and
technical description on its face, that TCT No.3548 likewise contains encouraged petitioner's occupancy and possession of said lots as in
no technical description on its face; that however, on the face of TCT fact ordinary residential permits were issued by said agency to some
No.33531 of Oscar L. Uy from which TCT No.3548 of defaulted of herein petitioners and even helped in petitioners, acquisition of
respondent Vilma Maloles Subdivision Inc., was derived, it appears electrical facilities from the MERALCO.2
that said TCT No.33531 was cancelled by another title, TCT No.1713
and not by TCT No.3548, the supposed derivative thereof, which Resolving the sole issue of whether or not petitioners were entitled to the
title, from the foregoing facts, seems to have come from nowhere land they occupy and possess, even when said land was allegedly part of
considering that no document could be produced by the unclassified public forest land and yet covered by transfer certificates of title
representative of the Register of Deeds of Pasig, relative to the origin in the names of the defaulted respondent, the court a quo rendered a Partial
of the aforesaid title and which register of deeds has jurisdiction over Decision in favor of petitioners, based on the following disquisition:
the same; that from this spurious and fraudulent TCT No. 3548 which
contains no technical description on its face, numerous TCTs were First, because as established from the foregoing facts, OCT No. 614,
subsequently issued, some of which belong to the defaulted TCT No.5690, TCT No.3548 covering Lots 1 & 2 of the disputed
respondents hereof, that despite the issuance has not been
land, not having technical descriptions appearing on their respective
cancelled by the Register of Deeds of Quezon City; that Lot 3 was
face, clearly are null and void by reason thereof. This is because "a
originally covered by OCT No.333 from which 846 questionable
torrens title is the certificate of ownership issued under the Register
TCTs emanated and issued by the Register of Deeds of Quezon City
of Deeds naming and declaring the owner in fee simple of the real
perpetrated and made possible by the illegal expansion of the actual property DESCRIBED therein, free from all liens and encumbrances
area thereof from 4,574 Sq. Meters, more or less, to 407 ,3875 (sic)
except such as maybe expressly noted thereon or otherwise
hectares without proper judicial proceedings; that as an example of
reserved by law." (Philippine National Bank vs. Tan Ong Zse, 51
the fraud perpetrated by respondents, TCT No.26205 covers a lot
Phil. 317). Without any technical description a title is fictitious and the
situated at Barrio Ermitaño, San Juan del Monte, TCT No.26287
mere issuance thereof is fraudulent. Such being the case, it follows
covers a lot located at Barrio Talipapa, Novaliches, TCT No.33531
that none of the title holders subsequently issued out of said void
covers a lot located at the District of Cubao. TCT No.47705 covers a titles could say that he or she is an innocent purchaser for value. For
lot situated at Barrio San Francisco, San Juan, TCT No.133770
in the case at bar, there are really no rights that could be transferred
covers a lot located at San Bartolome, Caloocan City, TCT No.45741
to them since even the titles of those supposed owners thereof
covers a lot located at San Francisco del Monte, San Juan, TCT
originally are themselves fictitious. x x x Second, because although
No.45636 covers a lot located at the municipality of San Juan, TCT
the Bureau of Forest Development maintains, as in fact, it certified
No.19-6370 covers a lot located at Kamuning District, TCT that Lots 1, 2 & 3 are part of the unclassified public forest land of the
government, and therefore, are not susceptible of private 3) Ordering the Register of Deeds of Quezon City to cancel OCT No.
appropriation, still, due to the established fact that the lots involved 614, TCT No. 5690 and TCT No. 3548 as well as the subsequent
are under the present occupancy and possession of petitioners with TCTs issued and emanating therefrom, with the exception of those
the knowledge and tolerance of the Bureau of Forest Development, titles belonging to the non-defaulted respondents, from its record;
the true and real nature of said lands as being public forest has
become highly dubious and in the opinion of this Court could not 4) Declaring the area of TCT No.333 in excess of its true and actual
overcome the presumption that said lands are agricultural. For "the area of 4,574 Sq. Meters, as well as the TCTs subsequently issued
mere fact that a tract of land has trees upon it or has mineral wealth by the Register of Deeds of Quezon City, covering the area in excess
within it, is not of itself sufficient to declare that one is forest land and of said actual area, with the exception of those belonging to non-
the other mineral land. There must be some proof of the extent as defaulted respondents, as null and void ab initio;
well as of the present or future value of the land as forest or mineral.
It must be shown that the land is more valuable for the forestry or the
5) Ordering the Register of Deeds of Quezon City to cancel all TCTs
minerals which it contains than it is for agricultural purposes. Land
subsequently issued based on OCT No.333 in excess of the actual
may be classified as forest or mineral today and after the exhaustion
area of 4,574 Sq. Meters, with the exception of those titles belonging
of the timber or minerals contained therein may be classified as
to the non-defaulted respondents;
agricultural land tomorrow. Hence, in case of doubt and considering
that it is a matter of public knowledge that a majority of the lands in
the Philippines are agricultural lands, it was rightly held that in the 6) Declaring the writ of preliminary injunction dated August 7, 1985,
absence of evidence to the contrary any land may be presumed to in so far as those areas covered by the cancelled OCTs and TCTs
be agricultural. And that being the case, it is clear that petitioners hereof are concerned, as permanent;
have acquired legally a title over Lots 1, 2 & 3 of this case through
extraordinary prescription of thirty (30) years of continuous, public, 7) Ordering the Register of Deeds of Quezon City to issue herein
open and uninterrupted possession thereof, the lands being petitioners the corresponding individual transfer certificate of titles
agricultural and, thus, are susceptible of private ownership by upon proper application made thereof.
petitioners.
SO ORDERED.3
WHEREFORE, premises considered, judgement is hereby rendered
in favor of petitioners and against the defaulted respondents: On May 17, 1989, or exactly one (1) year and fifty-seven (57) days after the
above-quoted judgement by default was rendered, a Petition for Annulment
1) Declaring petitioners through the principal petitioners hereof, to of Judgement with Certiorari, Prohibition and Mandamus4 was brought before
wit: Alberto G. Pinlac, Atty. Eriberto H. Decena, Rodolfo T. Reyes, the Court of Appeals by the titled owners of the subdivided lots within Vil-Ma.
Felipe Briones and Juanito S. Metilla as absolute owners in fee They assailed the default judgement which nullified all their titles, arguing
simple title of the aforesaid Lots 1, 2 & 3 hereof by virtue of that the court a quo had no jurisdiction over them and their respective titled
extraordinary prescription, with the exception of the lands covered by properties. They also alleged that they only came to know of the adverse
the respective transfer certificate of title belonging to the non- judgement when petitioners sought the execution of the judgement by
defaulted respondents; attempting to dispossess some of the titled owners of the lots and making
formal demands for them to vacate their respective properties.
2) Declaring Original Certificate of Title No.614, TCT No. 5690 and
TCT No.3548 of the Register of Deeds of Quezon City, and the They likewise claimed that the Partial Decision against the defaulted
subsequent TCTs issued therefrom, with the exception of those titles respondents was null and void on the grounds of lack of jurisdiction and
belonging to the non-defaulted respondents, as null and void ab extrinsic fraud, for the reasons that:
initio;
(1) Civil Case No. Q-35672, while it was a petition to quiet title, was a (7) The trial court cannot render null and void in the default
collateral proceeding, not a direct action attacking their duly judgement the mother title (OCT No.614), from which the petitioners'
registered titles. Besides, a petition for cancellation of title can only transfer certificates were derived, which the Supreme Court had
be filed by a registered owner or a person having an interest in already declared valid and legal.
registered property, and must be filed in the original land registration
case in which the decree of registration was entered.1âwphi1.nêt To impress upon the Court of Appeals that they have a meritorious defense
and that their petition was not intended to delay or frustrate the final
(2) They were never made parties to Civil Case No. Q-35672, nor disposition of the case, the titled owners cited the case of De La Cruz v. De
were their lots described in the complaint, published summons, and La Cruz,5 where the Supreme Court traced the origins of OCT 614. It was
Partial Decision. Named defendant was VIL-MA, a totally separate held in that case, that:
and independent entity which had already ceased to exist way back
in January of 1976. Moreover, the summons, as well as the Partial x x x. The Piedad Estate consists of a vast tract of land originally
Decision was not published in a newspaper or periodical of general registered on March 12,1912 under Original Certificate of Title
circulation. Thus, the defective service of summons to said defendant No.614 of the Register of Deeds of the Province of Rizal in the name
did not place the individual lot owners under the trial court's of the Philippine Government.
jurisdiction, nor are they bound by the adverse judgement.
The Piedad Estate was one of the so-called friar lands which were
(3) They were denied due process of law as they were not given their purchased by the government of the Philippines pursuant to the
day in court. They should have been included as indispensable provisions' of the Friar Lands Act, Public Act No.1120 which was
parties-respondents in Civil Case No. Q-35672 since the petitioners enacted on April 26, 1904. x x x.
therein were seeking to annul their respective transfer certificates of
title.
As specifically stated above, the said lands are not "public lands" in
the sense in which those words are used in the Public Land Act
(4) Their duly registered titles cannot be defeated by the alleged Numbered Nine Hundred and twenty-six and cannot be acquired or
adverse, continuous and notorious possession of the petitioners leased under the provisions thereof. In the case of Jacinto vs.
since their titles are indefeasible and cannot be acquired by Director of Lands (1926) 49 Phil. 853, the Supreme Court held that
prescription or adverse possession. the so-called friar lands, to which the government of the Philippines
holds title, are not public lands but private or patrimonial property of
(5) If, indeed, the subject property is unclassified forest lands, it is not the government.
capable of private appropriation. The court a quo is bereft of authority
to declare motu proprio that the subject property should be xxx xxx xxx
reclassified as agricultural, not forest land.
As held in Lorenzo vs. Nicolas, No. L-4085, 30 July 1952,91 Phil.
(6) The trial court violated Section 3(c), Rule 10 of the Rules of Court 686, from the provisions of sections 11, 12 and 16 of Act No.1120, it
which provides that when some of several respondents fail to is apparent that the pervading legislative intent is to sell the friar
answer, "the court shall try the case against all upon the answers lands acquired by the government to actual settlers and occupants of
thus filed and render judgement upon the evidence thus presented, the same.6
"whenever a complaint states a common cause of action against
several respondents. Accordingly, the defense interposed by those
Claiming that their individual transfer certificates of title were derived from
who answer or appear to litigate the case should inure to the benefit subsequent subdivisions and transfers of the lots within the Piedad Estate,
of even those who fail to appear or answer. the defaulted registered owners invoked the Comments and
Recommendations of the Ad Hoc Committee created by the then Ministry of
Natural Resources, tasked to investigate the historical background of the
Piedad and Payatas Estates in Quezon City, containing evidence which they 4. Sterling Meadows Subdivision (LRC) Pcs-11110
would have substantiated had they been given their day in court. The Ad Hoc
Committee reported, to wit: 5. Dona Patrona Subdivision
FINDINGS AND OBSERVATIONS 6. Far Eastern University (43 has.)
The Piedad Estate, situated in the Municipality of San Mateo and 7. Luis Reyes (Psd-19419)
Caloocan during the time of registration in 1910, covers an area of
3850.7226 hectares. The Registration of Title under Case No.5975 8. Jose Yulo (PLS-336-D)
was published in the January 21, 1910 issue of the Official Gazette.
By virtue of subsequent changes in political boundaries, Piedad
After the Piedad Estate was registered in Original Certificate of Title
Estate is now within Quezon City. It is located on both sides of Luzon
No. 614 in the name of the Government in 1910 under the provisions Avenue and is bounded on the North by the Republic Avenue; on the
of Act 496, the area was subdivided originally into 874 lots. As a East by private residential subdivisions which includes the B.F.
result of subsequent surveys executed in the course of disposition,
Homes (LRC) Psd-133236, the Villa Ligaya Subdivision (Psd-65729),
the number of lots increased to 1,305. Disposition of these lots was
the Kapalaran Subdivision (Pcs-47850), the Kasiyahan Subdivision
made by the Bureau of Lands thru sales, under the Friar Lands Act,
(LRC) Pcs-12091, Zuzuarregui Property (Psd-34912) and the Dona
as early as 1910 and records show that even before the Second
Beartiz Subdivision under Psd-39351; on the South by the Don
World War, all lots in the Piedad Estate have been disposed of. Mariano Marcos Avenue; and on the South-West and West by the
Owing perhaps to the scarcity of land applicants at the time, it will be
U.P. Sites Nos. 1 and 2.
observed that a number of applicants have acquired several lots
totalling several hectares. Among the vendees with several lots are
the Philippine Trust Co., the Zuzuarregui's and the Metropolitan COMMENTS AND RECOMMENDATION
Water District, to name a few. A list of lot holders in the Piedad
Estate with the corresponding lot numbers, lot areas and date of There is no doubt that Piedad Estate has long been segregated from
purchase from the Bureau of Lands is hereto attached and marked the mass of the public domain and have become private lands duly
as ANNEX "B". registered under the Torrens System following the procedure for the
confirmation of private lands prescribed in Act 496. Thus the lands
Thru a series of transfer of lots from one owner to another attended inside the Piedad Estate are no longer lands of the public domain.
at times by subdivision into smaller lots and at other times by Neither are these lands forest lands, in the classification of lands for
consolidation of several lots into one, most of the lots of the Piedad forest purposes, the main criterion prescribed in Section 15 of P .D.
Estate have lost their identity both in original ownership structure and 705, the Forestry Code, is its slope. Those beyond 18% are to be
lot descriptions. Piedad Estate now embraces and includes a number preserved for forest purposes while those below are to be released
of private residential subdivisions among which are the following: as not needed for forest purposes, hence, as alienable arid
disposable. By its physical nature, location and historical use, the
land in question can hardly be considered and classified as forest
1. Villar Maloles Subdivision (owned by Villar Maloles, Psd-
land. Physically, it is first, level and at most slightly rolling land.
21997)
Location wise, it used to be within the periphery and now in the heart
of a metropolis. While originally it was used for agricultural purposes,
2. U.P. Sites Nos. land 2 it has later become urban due to population pressure and rapid
urbanization in the Metro Manila area. It is devoid of any timber land,
3. Sunnyville Subdivision (Owned by the Delos Santos more so if we talk of forest of commercial value. In fact, the
family) Composite Land Classification Committee of the MNR composed of
the Directors of BFD, BL, BF AR and BMGS, has already signed a
land classification map and recommended for its release because it exemplary damages, plus the sum of P5,000.00 per lot of the
has absolutely no forest value. petitioners as attorney's fee, aside from cost of suit, and for any other
relief just and proper .8
On the basis of existing records of the Bureau of Lands and the area
of the Piedad Estate as contained in the Technical Descriptions of On June 23, 1989, the Court of Appeals granted respondents (petitioners
the said Estate published in the January 21, 1910 issue of the therein) application for writ of preliminary injunction, ruling that:
Official Gazette, there is no expansion or enlargement of the area,
hence, it is recommended that existing titles within the area should When this case was called for hearing on June 21, 1989 on the
be respected and their validity upheld. application for the issuance of a writ of preliminary injunction, the
parties and their respective counsel appeared and orally argued their
xxx xxx xxx respective stand on the matter. It is admitted that the herein
petitioners, indispensable parties in the case, were not individually
In view of all the foregoing, the committee recommends that all served with summons.
existing titles validly issued within the area be respected and
their validity upheld.7 (Emphasis supplied) We believe and so hold that there is merit in the instant application
for preliminary injunction, hence, the same is hereby GRANTED.
Accordingly, the defaulted titled owners prayed that judgement be rendered: Upon the posting by the petitioners of a bond in the amount of One
Hundred Thousand Pesos (P100,000.00), subject to Our approval,
1. Declaring the aforesaid Partial Decision on defaulted private let a writ of preliminary injunction issue enjoining the respondents
(petitioners herein), and all persons acting for and in their behalf, to
respondents as null and void;
desist and refrain from enforcing or implementing, or from attempting
to enforce and implement, the questioned writ of execution of the
2. Declaring all Residential Use Permits issued by the Director of partial judgment, dated March 21, 1988, rendered in Civil Case No.
Forest Management Bureau as null and void; Q-35672, entitled: "Teofilo M. Gariando, et al., petitioners versus
Gregorio Dizon, et al., respondents", until further orders from this
3. Declaring all Transfer of Certificates of Titles of the petitioners Court.
(respondents herein) emanating from OCT 614 and TCT 3548 (1713)
as valid; SO ORDERED.9
4. Ordering private respondents (petitioners herein), their agents or On November 15, 1989, the Court of Appeals rendered a Decision10 granting
representatives and all other persons claiming right under them to the petition and annulling the Partial Decision in Civil Case No. Q-35762
vacate the respective titled lands of the petitioners squatted by the based on its finding that the trial court's lack of jurisdiction over the persons
former. of respondents ---
5. Ordering the dismissal of Hon. Judge Reynaldo Roura from the x x x becomes all the more apparent when petitioners claim or
Regional, Trial Court, Macabebe, Pampanga on the grounds of gross asseverate that the assailed Partial Decision can not bind Vilar-
incompetence and gross ignorance of the law (Adm. Circular No.4 of Maloles (VILMA), the umbrella name, for the simple reason that said
the Supreme Court, dated January 27, 1988). PARTNERSHIP was dissolved on January 26, 1976, for it can no
longer be sued as it had no more juridical personality .
6. Making the preliminary injunction as permanent; and
xxx xxx xxx
7. Ordering the private respondents (petitioners herein) to pay jointly
and solidarily to the petitioners the sum of P200,000.00 as moral and
Furthermore, petitioners contend that the summons and the Partial from having a trial or presenting their case to the trial court by some act or
Decision were published in a local newspaper edited in Caloocan conduct of petitioners; 15 or that they had been denied due process of law.
City and Malolos, Bulacan known as "METROPOLITAN Thus, the Court of Appeals need only to resolve the issues of lack of
NEWSWEEK" implying that said summons and Partial Decision were jurisdiction, existence of extrinsic fraud, and denial of due process of law.
not published in a newspaper of general circulation in Quezon City
as required by PD 1079, Sec. 1 thereof. Petitioners not having been The action for annulment of judgement cannot and was not a substitute for
duly notified of the hearing/proceedings, the Partial Decision being the lost remedy of appeal. The very purpose of the action for annulment of
assailed is without significance to them or as far as petitioners are judgement was to have the final and executory judgement set aside so that
concerned said Partial Decision is null and void.11 there will be a renewal of litigation.16 Whether or not the assailed Partial
Decision based solely on facts and evidence presented by the petitioners is
Petitioners' motion for reconsideration was denied in a Resolution dated meritorious is irrelevant and immaterial. Thus, the Court of Appeals did not
December 21, 1989.12 err, nor did it violate the petitioners' right to due process of law, when it
refused to consider all the factual issues raised by petitioners.
Hence, the instant petition for certiorari which raises the following Issues:
We also agree with the Court of Appeals' conclusion that the Partial Decision
I. WHETHER OR NOT RESPONDENT COURT OF APPEALS, is null and void insofar as private respondents are concerned since the latter
QUESTIONED DECISION HAS VIOLATED PETITIONERS' RIGHT were not duly served summons or notified of the proceedings against them.
TO DUE PROCESS BY IGNORING AND LEAVING UNDECIDED The summons and the Partial Decision were published in a local newspaper
ALL THE ISSUES RAISED IN THE ANSWER OF PETITIONERS IN edited and published in Caloocan City and Malolos, Bulacan. However, the
CA-G.R. NO. SP-17596. Court of Appeals found the publication in said newspaper, namely the
"Metropolitan Newsweek," to be invalid because the said periodical is not
considered a newspaper of general circulation in Quezon City where the
II. WHETHER OR NOT THE COURT A-QUO HAS ACQUIRED
subject property is located, as required by Presidential Decree No.1079,
JURISDICTION OVER RESPONDENT VILMA MALOLES
Section 1.
SUBDIVISION BY THE PUBLICA TION OF THE SUMMONS AND
PETITION AS ORDERED BY THE COURT IN CIVIL CASE NO. Q-
35672 AND SO THE PARTIAL DECISION (ANNEX "B") W AS Petitioners, however, contend that the service of summons by publication
LEGAL, VALID AND PROPER. was legal and in accordance with the requirements of Rule 14, Section 14 of
the Rules of Court. The service by publication was done pursuant to the
orders of the trial court dated May 5, 1993 and September 29, 1983.17
III. WHETHER OR NOT PRIV ATE RESPONDENTS PER THEIR
PETITION. BEFORE RESPONDENT COURT OF APPEALS HAS A
VALID CAUSE OF ACTION CONSIDERING THEY ADOPTED While the service of summons by publication may have been done with the
CONTRADICTORY POSITIONS OR THEORIES OF THE CASE, approval of the trial court, it does not cure the fatal defect that the
AND THAT RESPONDENT COURT OF APPEALS DECISION "Metropolitan Newsweek" is not a newspaper of general circulation in
(ANNEX "G") IS VOID.13 Quezon City .The Rules strictly require that publication must be "in a
newspaper of general circulation and in such places and for such time as the
We find no merit in the instant petition. court may order."18 The court orders relied upon by petitioners did not specify
the place and the length of time that the summons was to be published. In
the absence of such specification, publication in just any periodical does not
The case before the Court of Appeals was one for annulment of judgement, satisfy the strict requirements of the rules. The incomplete directive of the
certiorari, prohibition and mandamus. In resolving the same, the Court of court a quo coupled with the defective publication of the summons rendered
Appeals need not retry the facts. An action for annulment of judgement is the service by publication ineffective. The modes of service of summons
grounded only on two justifications: (I) extrinsic fraud; and (2) lack of should be strictly followed in order that the court may acquire jurisdiction over
jurisdiction or denial of due process.14 All that herein private respondents had the respondents,19 and failure to strictly comply with the requirements of the
to prove was that the trial court had no jurisdiction; that they were prevented
rules regarding the order of its publication is a fatal defect in the service of It is evident that the reopening of the case would not amount to an exercise
summons.20 It cannot be over emphasized that the statutory requirements of in futility nor is it intended to further delay the final resolution of this
service of summons, whether personally, by substituted service, or by controversy. The court a quo should give all the necessary parties every
publication, must be followed strictly, faithfully and fully, and any mode of chance to fight their case fairly and in the open, without resort to
service other than that prescribed by the statute is considered ineffective. 21 technicalities.28
Be that as it may, even granting that the publication strictly complied with the Finally, the conclusion that the Partial Decision of the court a quo is void
rules, the service of summons would still be ineffective insofar as private finds support in Rule 10, Section 5(c) of the then Rules of Court, which
respondents are concerned. At the time the complaint for Quieting of title was provides:
filed on November 2, 1983, Vilma Maloles Subdivision no longer existed as a
juridical entity. Vilma Maloles Subdivision, a partnership, was dissolved more "(c) Effect of partial default. -When a pleading asserting a claim
than six (6) years earlier, as evidenced by a Certificate of Dissolution issued states a common cause of action against several defending parties,
by the SEC dated January 26,1976.22 Consequently, it could no longer be some of whom answer and the others fail to do so, the court shall try
sued having lost its juridical personality. the case against all upon the answers thus filed and render judgment
upon the evidence presented."
It was also established that all the lots within the subdivision had been
disposed of to private individuals, herein respondents. As the titled owners, In fact, the court a quo enumerated in the Partial Decision those who filed
they were not made respondent, neither were they informed of the adverse responsive pleadings. Considering that petitioners in their complaint stated a
proceedings that would result in the nullification of their duly registered titles. common cause of action against all the named respondents, the court a quo
Clearly, there was a blatant disregard for their rights as registered owners. should have heard the case as against all respondents, the defaulted
Private respondents' titles and rights as owners have been unjustly violated. respondents included. However, the trial court, unmindful of the above-
Hence, the Court of Appeals did not err in granting private respondents' quoted rule, proceeded to receive evidence ex parte only against the
petition by annulling and setting aside the Partial Decision rendered by the defaulted respondents. The trial court's disposition is not only violative of the
court a quo for lack of jurisdiction and for denial of due process of law. rules but also a clear negation of the defaulted respondents' limited rights.
Petitioners failed to show that they were the aggrieved parties. If ever there Whatever defense and evidence the non-defaulted respondents may present
was denial of due process, it was private respondents who suffered which would be applicable to the situation of the defaulted respondents
therefrom. Whether by petitioners' failure to effectively serve summons or by should inure to the benefit of the latter. The nullification of OCT 614
omitting to name private respondents as respondents, the trial court's Partial adversely affected the answering respondents for they all share the same
Decision declaring private respondents' titles null and void was clearly mother title. In effect, the court a quo pre-judged the case even against the
violative of the due process requirement of the Constitution. It is elementary answering respondents, for how could OCT 614, the mother title, be valid for
that before a person can be deprived of his right or property he should first one set of respondents and null and void for the other respondents? In fine,
be informed of the claim against him and the theory on which such claim is the Partial Decision was procedurally flawed.
premised.23 The courts will not countenance a denial of the fundamental right
to due process, which is a cornerstone of our legal system.24 WHEREFORE, in view of all the foregoing, the decision of the Court of
Appeals in CA-G.R. SP No. 17596 is AFFIRMED and the instant petition is
The Partial Decision was a judgement by default, which is generally looked DENIED for lack of merit.
upon with disfavor,25 for it cannot pretend to be based on the merits of the
controversy.26 As in this case, the judgement by default may amount to a SO ORDERED.
positive and considerable injustice to private respondents. Hence, justice and
equity demand that this case be litigated a new.27
Davide Jr., Puno, Kapunan, Pardo, JJ: concur.
G.R. No. 152776 October 8, 2003 before resorting to substituted service. “This brings to the fore the question of
procedural due process. In Montalban v. Maximo (22 SCRA 1077 [1968]) the
HENRY S. OAMINAL, petitioner, Court ruled that ‘The constitutional requirement of due process exacts that the
vs. service be such as may be reasonably expected to give the notice desired.
PABLITO M. CASTILLO and GUIA S. CASTILLO, respondents. Once the service provided by the rules reasonably accomplishes that end, the
requirement of justice is answered; the traditional notions of fair play are
Civil Procedure; Jurisdiction; Summons; Where the action is in personam and satisfied; due process is served.’”
the defendant is in the Philippines, the service of summons may be made
through personal or substituted service in the manner provided for by Sections
6 and 7 of Rule 14 of the Revised Rules of Court.—In civil cases, the trial court Same; Same; Same; The filing of Motions seeking affirmative relief—to admit
acquires jurisdiction over the person of the defendant either by the service of answer, for additional time to file answer, for reconsideration of a default
summons or by the latter’s voluntary appearance and submission to the judgment, and to lift order of default with motion for reconsideration—are
authority of the former. Where the action is in personam and the defendant is considered voluntary submission to the jurisdiction of the court.—Assuming
in the Philippines, the service of summons may be made through personal or arguendo that the service of summons was defective, such flaw was cured and
substituted service in the manner provided for by Sections 6 and 7 of Rule 14 respondents are deemed to have submitted themselves to the jurisdiction of
of the Revised Rules of Court. the trial court when they filed an Omnibus Motion to Admit the Motion to
Dismiss and Answer with Counterclaim, an Answer with Counterclaim, a
Motion to Inhibit, and a Motion for Reconsideration and Plea to Reset Pre-trial.
Same; Same; Same; Personal service of summons preferred over substituted The filing of Motions seeking affirmative relief—to admit answer, for additional
service; Circumstances in order for substituted service of summons may be time to file answer, for reconsideration of a default judgment, and to lift order
valid.—Personal service of summons is preferred over substituted service. of default with motion for reconsideration—are considered voluntary
Resort to the latter is permitted when the summons cannot be promptly served submission to the jurisdiction of the court. Having invoked the trial court’s
on the defendant in person and after stringent formal and substantive jurisdiction to secure affirmative relief, respondents cannot—after failing to
requirements have been complied with. For substituted service of summons to obtain the relief prayed for—repudiate the very same authority they have
be valid, it is necessary to establish the following circumstances: (a) personal invoked.
service of summons within a reasonable time was impossible; (b) efforts were
exerted to locate the party; and (c) the summons was served upon a person
of sufficient age and discretion residing at the party’s residence or upon a Same; Certiorari; Certiorari will lie only when a court has acted without or in
competent person in charge of the party’s office or regular place of business. excess of jurisdiction or with grave abuse of discretion; It is axiomatic that the
It is likewise required that the pertinent facts proving these circumstances are availability of the right of appeal precludes recourse to the special civil action
stated in the proof of service or officer’s return. for certiorari.—Well-settled is the rule that certiorari will lie only when a court
has acted without or in excess of jurisdiction or with grave abuse of discretion.
As a condition for the filing of a petition for certiorari, Section 1 of Rule 65 of
Same; Same; Same; Defendant’s actual receipt of the summons satisfied the the Rules of Court additionally requires that “no appeal nor any plain, speedy
requirements of procedural due process.—That the defendants’ actual receipt and adequate remedy in the ordinary course of law” must be available. It is
of the summons satisfied the requirements of procedural due process had axiomatic that the availability of the right of appeal precludes recourse to the
previously been upheld by the Court thus: “x x x [T]here is no question that special civil action for certiorari.
summons was timely issued and received by private respondent. In fact, he
never denied actual receipt of such summons but confined himself to the
argument that the Sheriff should prove that personal service was first made
Same; Default; Courts have repeatedly been admonished against default "WHEREFORE, the [D]ecision dated 23 August 2001 is hereby NULLIFIED
orders and judgments that lay more emphasis on procedural niceties at the and SET ASIDE and Civil Case No. OZC-00-13 ordered DISMISSED,
expense of substantial justice.—As much as possible, suits should be decided without prejudice. Costs against [petitioner]."3
on the merits and not on technicalities. For this reason, courts have repeatedly
been admonished against default orders and judgments that lay more The Antecedents
emphasis on procedural niceties at the expense of substantial justice. Not
being based upon the merits of the controversy, such issuances may indeed The antecedents of the case were narrated by the CA as follows:
amount to a considerable injustice resulting in serious consequences on the
part of the defendant. Thus, it is necessary to examine carefully the grounds "On 09 March 2000, [Petitioner Henry Oaminal] filed a complaint for
upon which these orders and judgments are sought to be set aside. collection against [Respondents Pablito and Guia Castillo] with the
Regional Trial Court [RTC] of Ozamis City (Branch 35) x x x. The
complaint prayed that [respondents] be ordered to pay
₱1,500,000.00 by way of liquidated damages and ₱150,000.00 as
PETITION for review on certiorari of a decision of the Court of Appeals. attorney's fees.
"On 30 May 2000, the summons together with the complaint was
The facts are stated in the opinion of the Court. served upon Ester Fraginal, secretary of [Respondent] Mrs. Castillo.
Sam Norman G. Fuentes for petitioner.
"On 06 June 2000, [respondents] filed their 'Urgent Motion to Declare
P.M. Castillo for respondents. Service of Summons Improper and Legally Defective' alleging that
the Sheriff's Return has failed to comply with Section (1), Rule 14 of
the Rules of Court or substituted service of summons.
"The scheduled hearing of the Motion on 14 July 2000 did not take
DECISION
place because x x x [RTC] Judge [Felipe Zapatos] took a leave of
absence from July 17 to 19, 2000[;] hence[,] it was re-scheduled to
PANGANIBAN, J.: 16 August 2000.
In the instant case, the receipt of the summons by the legal secretary of the "On 19 October 2000, [petitioner] filed an Omnibus Motion to Declare
defendants -- respondents herein -- is deemed proper, because they admit [Respondents] in Default and to Render Judgment because no
the actual receipt thereof, but merely question the manner of service. answer [was] filed by [the latter].
Moreover, when they asked for affirmative reliefs in several motions and
thereby submitted themselves to the jurisdiction of the trial court, whatever "[Respondents] forthwith filed the following:
defects the service of summons may have had were cured.
'a. Omnibus Motion Ad Cautelam to Admit Motion to
The Case Dismiss and Answer with Compulsory Counter-claim
dated 9 November 2000 which was set for hearing
Before us is a Petition for Review1 under Rule 45 of the Rules of Court, on 27 November 2000 at 8:30 a.m.;
seeking to nullify the March 26, 2002 Decision2 of the Court of Appeals (CA)
in CA-GR SP No. 66562. The assailed Decision disposed thus: 'b. x x x Urgent Motion to Dismiss also dated 9
November 2000 which was also set for hearing on
27 November 2000 at 8:30 a.m. The said motion
was anchored on the premise that x x x [petitioner's] 'WHEREFORE, finding by preponderance of evidence,
complaint was barred by improper venue and litis judgment is hereby rendered in favor of [petitioner], ordering
pendentia; and [respondents] to pay x x x:
'c. Answer with Compulsory Counter-Claim dated 9 1) ₱1,500,000.00 by way of [l]iquidated [d]amages;
November 2000.'
2) ₱20,000.00 as attorney's fees and litigation
"On 16 November 2000, x x x [the] judge denied [respondents'] expenses; and
Motion to Dismiss, admitted [their] Answer, and set the pre-trial [on]
17 January 2001. 3) x x x cost[s].'"4
"On 24 November 2000, [respondents] filed an 'Urgent Motion to On September 11, 2001, respondents filed with the CA a Petition for
Inhibit Ad Cautelam' against Judge [Zapatos], 'in the higher interest certiorari, prohibition and injunction, with a prayer for a writ of preliminary
of substantial justice and the [r]ule of [l]aw x x x.' injunction or temporary restraining order (TRO). In the main, they raised the
issue of whether the trial court had validly acquired jurisdiction over them.
"On 27 December 2000, Judge [Zapatos] denied the motion and
transferred the January 17th pre-trial to 19 February 2001. On September 20, 2001, the appellate court issued a TRO to enjoin the
lower court from issuing a writ of execution to enforce the latter's decision.
"[Respondents] filed an 'Urgent Omnibus Motion for Reconsideration
with the Accompanying Plea to Reset' dated 22 January 2001. The Ruling of the Court of Appeals
motion requested that it be set for consideration and approval by the
trial court on 05 February 2001 at 8:30 a.m. Said motion in the main
The CA ruled that the trial court did not validly acquire jurisdiction over
prayed 'that an order be issued by the Honorable Court respondents, because the summons had been improperly served on them. It
reconsidering its adverse order dated 16 November 2000, by
based its finding on the Sheriff's Return, which did not contain any averment
dismissing the case at bar on the ground of improper venue or in the
that effort had been exerted to personally serve the summons on them
alternative, that the Honorable Presiding Judge reconsider and set
before substituted service was resorted to. Thus, the appellate court set
aside its order dated December 27, 2000 by inhibiting himself from
aside the trial court's Decision and dismissed, without prejudice, Civil Case
the case at hand.' No. OZC-00-13.
"On 22 May 2001, Judge [Zapatos] ruled that [respondents']

Hence, this Petition.5
'Omnibus Motion Ad Cautelam to Admit Motion to Dismiss and
Answer with Counterclaim' was filed outside the period to file answer,
hence he (1) denied the Motion to Admit Motion to Dismiss and Issues
Answer; (2) declared [respondents] in default; and (3) ordered
[petitioner] to present evidence ex-parte within ten days from receipt Petitioner submits the following issues for our consideration:
of [the] order, [failing] which, the case will be dismissed.
"I
"On 23 August 2001, Judge [Zapatos] rendered a decision on the
merits, with the following dispositi[on]: Whether respondents' recourse to a Petition for Certiorari [was] appropriate
when the remedy of appeal was available?
"II
Whether the Decision of the trial court attained finality? Moreover, he argues that respondents automatically submitted themselves to
the jurisdiction of the trial court when they filed, on November 9, 2000, an
"III Omnibus Motion to Dismiss or Admit Answer, a Motion to Dismiss on the
grounds of improper venue and litis pendentia, and an Answer with
Whether the Honorable Third Division of the Court of Appeals [was] correct in Counterclaim.
entertaining and in granting the Writ of Certiorari when the facts clearly
establish[ed] that not only was [an] appeal available, but x x x there were On the other hand, respondents insist that the substituted service of
other plain, speedy and adequate remedies in the ordinary course of law? summons on them was improper. Thus, they allege that the trial court did not
have the authority to render its August 23, 2001 Decision.
"IV
We clarify.
Whether the Honorable Third Division of the Court of Appeals had jurisdiction
to nullify and set aside the Decision of the trial court and dismiss the case? Service of Summons
"V In civil cases, the trial court acquires jurisdiction over the person of the
defendant either by the service of summons or by the latter's voluntary
appearance and submission to the authority of the former. Where the action
[Whether] receipt by a legal secretary of a summons [is deemed] receipt by a
lawyer in contemplation of law?"6 is in personam and the defendant is in the Philippines, the service of
summons may be made through personal or substituted service in the
manner provided for by Sections 6 and 7 of Rule 14 of the Revised Rules of
Simply stated, the issues boil down to the following: (1) whether the Petition Court, which read:
for certiorari before the CA was proper; and (2) whether the trial court
acquired jurisdiction over respondents.
"Section 6. Service in person on defendant. - Whenever practicable,
the summons shall be served by handing a copy thereof to the
Since the Petition for certiorari was granted by the CA based on the trial defendant in person, or, if he refuses to receive and sign for it, by
court's alleged lack of jurisdiction over respondents, the second issue shall tendering it to him.
be discussed ahead of the former.
"Section 7. Substituted service. - If, for justifiable causes, the
The Court's Ruling defendant cannot be served within a reasonable time as provided in
the preceding section, service may be effected (a) by leaving copies
The present Petition is partly meritorious. of the summons at the defendant's residence with some person of
suitable age and discretion then residing therein, or (b) by leaving the
First Issue: copies at defendant's office or regular place of business with some
competent person in charge thereof."
Jurisdiction over Defendants
Personal service of summons is preferred over substituted service. Resort to
Petitioner contends that the trial court validly acquired jurisdiction over the the latter is permitted when the summons cannot be promptly served on the
persons of respondents, because the latter never denied that they had defendant in person and after stringent formal and substantive requirements
actually received the summons through their secretary. Neither did they have been complied with.7
dispute her competence to receive it.
For substituted service of summons to be valid, it is necessary to establish
the following circumstances: (a) personal service of summons within a
reasonable time was impossible; (b) efforts were exerted to locate the party; "This brings to the fore the question of procedural due process. In
and (c) the summons was served upon a person of sufficient age and Montalban v. Maximo (22 SCRA 1077 [1968]) the Court ruled that
discretion residing at the party's residence or upon a competent person in 'The constitutional requirement of due process exacts that the
charge of the party's office or regular place of business.8 It is likewise service be such as may be reasonably expected to give the notice
required that the pertinent facts proving these circumstances are stated in desired. Once the service provided by the rules reasonably
the proof of service or officer's return. accomplishes that end, the requirement of justice is answered; the
traditional notions of fair play are satisfied; due process is served.'"13
In the present case, the Sheriff's Return9 failed to state that efforts had been
made to personally serve the summons on respondents. Neither did the There is likewise no showing that respondents had heretofore pursued the
Return indicate that it was impossible to do so within a reasonable issue of lack of jurisdiction; neither did they reserve their right to invoke it in
time.1a\^/phi1.net It simply stated: their subsequent pleadings. If at all, what they avoided forfeiting and waiving
-- both in their Omnibus Motion ad Cautelam to Admit Motion to Dismiss and
"THIS IS TO CERTIFY that on the 30th day of May 2000, copies of Answer with Compulsory Counter-Claim14 and in their Motion to Dismiss15 -
the summons together with the complaint and annexes attached - was their right to invoke the grounds of improper venue and litis pendentia.
thereto were served upon the defendants Pablito M. Castillo and They argued therein:
Guia B. Castillo at their place of business at No. 7, 21st Avenue,
Cubao, Quezon City thru MS. ESTER FREGINAL, secretary, who is "3. x x x. To be sure, the [respondents] have already prepared a
authorized to receive such kind of process. She signed in receipt of finalized draft of their [M]otion to [D]ismiss the case at bar, based on
the original as evidenced by her signature appearing on the original the twin compelling grounds of 'improper venue' and [the] additional
summons. fact that 'there exists a case between the parties involving the same
transaction/s covered by the plaintiff's cause of action.' x x x;
"That this return is submitted to inform the Honorable x x x Court that
the same was duly served."10 "4. That as things now stand, the [respondents] are confronted with
the dilemma of filing their [M]otion to [D]ismiss based on the legal
Nonetheless, nothing in the records shows that respondents denied actual grounds stated above and thus avoid forfeiture and waiver of these
receipt of the summons through their secretary, Ester Fraginal. Their "Urgent rights as provided for by the Rules and also file the corresponding
Motion to Declare Service of Summons Improper and Legally Defective"11 [M]otion to [A]dmit x x x [A]nswer as mandated by the Omnibus Rule.
did not deny receipt thereof; it merely assailed the manner of its service. In
fact, they admitted in their Motion that the "summons, together with the x x x x x x x x x"16
complaint, was served by the Sheriff on Ester Fraginal, secretary of the
defendants at No. 7, 21st Avenue, Cubao, Quezon City on 30 May 2000."12 Verily, respondents did not raise in their Motion to Dismiss the issue of
jurisdiction over their persons; they raised only improper venue and litis
That the defendants' actual receipt of the summons satisfied the pendentia. Hence, whatever defect there was in the manner of service
requirements of procedural due process had previously been upheld by the should be deemed waived.17
Court thus:
Voluntary Appearance and Submission
"x x x [T]here is no question that summons was timely issued and
received by private respondent. In fact, he never denied actual Assuming arguendo that the service of summons was defective, such flaw
receipt of such summons but confined himself to the argument that was cured and respondents are deemed to have submitted themselves to the
the Sheriff should prove that personal service was first made before jurisdiction of the trial court when they filed an Omnibus Motion to Admit the
resorting to substituted service. Motion to Dismiss and Answer with Counterclaim, an Answer with
Counterclaim, a Motion to Inhibit, and a Motion for Reconsideration and Plea
to Reset Pre-trial. The filing of Motions seeking affirmative relief -- to admit
answer, for additional time to file answer, for reconsideration of a default petition actually avers errors of judgment rather than of jurisdiction, which are
judgment, and to lift order of default with motion for reconsideration -- are the subject of a petition for review."28
considered voluntary submission to the jurisdiction of the court.18 Having
invoked the trial court's jurisdiction to secure affirmative relief, respondents The present case satisfies all the above requisites. The Petition for certiorari
cannot -- after failing to obtain the relief prayed for -- repudiate the very same before the CA was filed within the reglementary period of appeal. A review of
authority they have invoked.19 the records shows that respondents filed their Petition on September 11,
2001 -- four days after they had received the RTC Decision. Verily, there
Second Issue: were still 11 days to go before the lapse of the period for filing an appeal.
Aside from charging grave abuse of discretion and lack of jurisdiction, they
Propriety of the Petition for Certiorari likewise assigned as errors the order and the judgment of default as well as
the RTC's allegedly unconscionable and iniquitous award of liquidated
Petitioner contends that the certiorari Petition filed by respondents before the damages.29 We find the latter issue particularly significant, considering that
the trial court awarded ₱1,500,000 as liquidated damages without the benefit
CA was improper, because other remedies in the ordinary course of law were
of a hearing and out of an obligation impugned by respondents because of
available to them. Thus, he argues that the CA erred when it took cognizance
of and granted the Petition. petitioner's failure to pay.30 Hence, there are enough reasons to treat the
Petition for certiorari as a petition for review.
Well-settled is the rule that certiorari will lie only when a court has acted
In view of the foregoing, we rule that the Petition effectively tolled the finality
without or in excess of jurisdiction or with grave abuse of discretion.20 As a
condition for the filing of a petition for certiorari, Section 1 of Rule 65 of the of the trial court Decision.31 Consequently, the appellate court had
Rules of Court additionally requires that "no appeal nor any plain, speedy jurisdiction to pass upon the assigned errors. The question that remains is
whether it was correct in setting aside the Decision and in dismissing the
and adequate remedy in the ordinary course of law" must be available.21 It is
case.
axiomatic that the availability of the right of appeal precludes recourse to the
special civil action for certiorari.22
Trial Court's Default Orders Erroneous
Here, the trial court's judgment was a final Decision that disposed of the
case. It was therefore a fit subject of an appeal.23 However, instead of A review of the assailed Decision reveals that the alleged lack of jurisdiction
appealing the Decision, respondents filed a Petition for certiorari on of the trial court over the defendants therein was the reason why the CA
September 11, 2001. nullified the former's default judgment and dismissed the case without
prejudice. However, we have ruled earlier that the lower court had acquired
Be that as it may, a petition for certiorari may be treated as a petition for jurisdiction over them. Given this fact, the CA erred in dismissing the case;
as a consequence, it failed to rule on the propriety of the Order and the
review under Rule 45. Such move is in accordance with the liberal spirit
judgment of default. To avoid circuitousness and further delay, the Court
pervading the Rules of Court and in the interest of substantial justice,
deems it necessary to now rule on this issue.
especially (1) if the petition was filed within the reglementary period for filing
a petition for review;24 (2) errors of judgment are averred;25 and (3) there is
sufficient reason to justify the relaxation of the rules.26 Besides, it is As much as possible, suits should be decided on the merits and not on
axiomatic that the nature of an action is determined by the allegations of the technicalities.32 For this reason, courts have repeatedly been admonished
complaint or petition and the character of the relief sought.27 The Court against default orders and judgments that lay more emphasis on procedural
explained: niceties at the expense of substantial justice.33 Not being based upon the
merits of the controversy, such issuances may indeed amount to a
"x x x. It cannot x x x be claimed that this petition is being used as a considerable injustice resulting in serious consequences on the part of the
substitute for appeal after that remedy has been lost through the fault of defendant. Thus, it is necessary to examine carefully the grounds upon which
these orders and judgments are sought to be set aside.34 1ªvvphi1.nét
petitioner. Moreover, stripped of allegations of 'grave abuse of discretion,' the
Respondents herein were declared in default by the trial court on May 22,
2001, purportedly because of their delay in filing an answer. Its unexpected
volte face came six months after it had ruled to admit their Answer on
November 16, 2000, as follows:
"That with respect to the Motion to Admit Answer, this Court is not in favor of
terminating this case on the basis of technicality for failure to answer on time,
hence, as ruled in the case of Nantz v. Jugo and Cruz, 43 O.G. No. 11, p.
4620, it was held:
'Lapses in the literal observance of a rule of procedure will be overlooked

when they do not involve public policy, when they arose from an honest
mistake or unforeseen accident, when they have not prejudiced the adverse
party and have not deprived the court ot its authority. Conceived in the best
traditions of practical and moral justice and common sense, the Rules of
Court frown upon hairsplitting technicalities that do not square with their
liberal tendency and with the ends of justice unless something in the nature
of the factors just stated intervene. x x x'
"WHEREFORE, x x x in the interest of justice, the Answer of the

[respondents] is hereby admitted."35
Indiana Aerospace University v. Commission on Higher Education36 held

that no practical purpose was served in declaring the defendants in default
when their Answer had already been filed -- albeit after the 15-day period,
but before they were declared as such. Applying that ruling to the present
case, we find that respondents were, therefore, imprudently declared in
default.1a\^/phi1.net
WHEREFORE, the Petition is hereby GRANTED IN PART, and the Decision

of the Court of Appeals MODIFIED. The trial court's Order of Default dated
May 22, 2001 and Judgment of Default dated August 23, 2001 are
ANNULLED, and the case remanded to the trial court for further proceedings
on the merits. No costs.
SO ORDERED.
Puno, (Chairman), Sandoval-Gutierrez and Carpio Morales, JJ., concur.
Corona, J., on leave.

G.R. No. 144662 October 13, 2003
Same; Same; Same; Doctrine of substantial compliance must be deemed

SPOUSES EFREN MASON and DIGNA MASON, petitioners,
vs. overturned by Villarosa, which is the later case.—Neither can herein
THE HONORABLE COURT OF APPEALS and COLUMBUS PHILIPPINES petitioners invoke our ruling in Millenium to support their position for said case
BUS CORPORATION, respondents. is not on all fours with the instant case. We must stress that Millenium was
decided when the 1964 Rules of Court were still in force and effect, unlike the
Remedial Law; Summons; Jurisdiction; Question of whether the substantial instant case which falls under the new rule. Hence, the cases cited by
compliance rule is still applicable under Section 11, rule 14 of the 1997 Rule petitioners where we upheld the doctrine of substantial compliance must be
of Civil Procedure has been settled in Villarosa which applies squarely to the deemed overturned by Villarosa, which is the later case.
instant case.—The question of whether the substantial compliance rule is still
applicable under Section 11, Rule 14 of the 1997 Rules of Civil Procedure has
been settled in Villarosa which applies squarely to the instant case. In the said Same; Same; Same; The service of summons is a vital and indispensable
case, petitioner E.B. Villarosa & Partner Co. Ltd. (hereafter Villarosa) with ingredient of due process.—At this juncture, it is worth emphasizing that notice
principal office address at 102 Juan Luna St., Davao City and with branches to enable the other party to be heard and to present evidence is not a mere
at 2492 Bay View Drive, Tambo, Parañaque, Metro Manila and Kolambog, technicality or a trivial matter in any administrative or judicial proceedings. The
Lapasan, Cagayan de Oro City, entered into a sale with development service of summons is a vital and indispensable ingredient of due process. We
agreement with private respondent Imperial Development Corporation. As will deprive private respondent of its right to present its defense in this multi-
Villarosa failed to comply with its contractual obligation, private respondent million peso suit, if we disregard compliance with the rules on service of
initiated a suit for breach of contract and damages at the Regional Trial Court summons.
of Makati. Summons, together with the complaint, was served upon Villarosa
through its branch manager at Kolambog, Lapasan, Cagayan de Oro City.
Villarosa filed a Special Appearance with Motion to Dismiss on the ground of PETITION for review on Certiorari of a decision of the Court of Appeals.
improper service of summons and lack of jurisdiction. The trial court denied
the motion and ruled that there was substantial compliance with the rule, thus,
it acquired jurisdiction over Villarosa. The latter questioned the denial before
us in its petition for certiorari. We decided in Villarosa’s favor and declared the The facts are stated in the opinion of the Court.
trial court without jurisdiction to take cognizance of the case. We held that there Gramata & Sarte Law Firm for petitioners.
was no valid service of summons on Villarosa as service was made through a
person not included in the enumeration in Section 11, Rule 14 of the 1997 Romulo, Mabanta, Buenaventura, Sayoc & Delos Angeles for respondent.
Rules of Civil Procedure, which revised the Section 13, Rule 14 of the 1964
Rules of Court. We discarded the trial court’s basis for denying the motion to
dismiss, namely, private respondent’s substantial compliance with the rule on
service of summons, and fully agreed with petitioner’s assertions that the DECISION
enumeration under the new rule is restricted, limited and exclusive, following
the rule in statutory construction that expressio unios est exclusio alterius. Had QUISUMBING, J.:
the Rules of Court Revision Committee intended to liberalize the rule on
service of summons, we said, it could have easily done so by clear and concise This petition for review assails the decision,1 dated May 12, 2000, of the
language. Absent a manifest intent to liberalize the rule, we stressed strict Court of Appeals and its resolution2 dated August 25, 2000 in CA-G.R. SP
compliance with Section 11, Rule 14 of the 1997 Rules of Civil Procedure. No. 54649 denying petitioners’ motion for reconsideration. The decision set
aside the decision3 of the Regional Trial Court of Pasay City, Branch 112, in
Civil Case No. 98-1567 and directed said court to conduct further 3. and all other persons and entities claiming rights under it, to
proceedings on the complaint for rescission of lease contract. surrender possession to plaintiffs and to vacate the leased premises;
The antecedent facts of the case, as found by the Court of Appeals, are as 4. to pay plaintiffs the amount of ₱300,000.00 as and by way of
follows: moral damages;
Petitioners spouses Efren and Digna Mason owned two parcels of land 5. to pay plaintiffs the amount of ₱100,000.00 as and by way of
located along Epifanio delos Santos Avenue in Pasay City. On March 30, exemplary damages;
1993, petitioners and private respondent Columbus Philippines Bus
Corporation (hereafter Columbus) entered into a lease contract, under which 6. to pay plaintiffs attorney’s fees in the amount of ₱100,000.00; and
Columbus undertook to construct a building worth ten million pesos
(₱10,000,000) at the end of the third year of the lease. Because private
7. to pay the cost of suit.
respondent failed to comply with this stipulation, the petitioners on November
13, 1998, filed a complaint for rescission of contract with damages against
private respondent before the Regional Trial Court of Pasay City, docketed SO ORDERED.4
as Civil Case No. 98-1567. Summons was served upon private respondent
through a certain Ayreen Rejalde. While the receiving copy of the summons That decision became final on May 12, 1999. The following day, private
described Rejalde as a secretary of Columbus, the sheriff’s return described respondent filed a motion to lift order of default, which was opposed by
Rejalde as a secretary to the corporate president, duly authorized to receive petitioners. The trial court ordered the parties to submit their respective
legal processes. memoranda. However, without waiting for the same, the trial court on May
26, 1999, denied the motion to lift order of default, thus:
Private respondent failed to file its answer or other responsive pleading,
hence petitioners filed a motion to declare private respondent in default. The It appearing that the decision rendered by this Court on April 27, 1999
motion was granted and petitioners were allowed to present evidence ex- became final and executory on May 12, 1999, defendant’s Motion to Lift
parte. Thereafter, the case was submitted for decision. Order of Default is hereby DENIED. Concomitant thereto, plaintiffs’ Motion
for Execution is hereby GRANTED.
On April 22, 1999, the trial court rendered its decision whose dispositive
portion reads: The Order of this Court on May 21, 1999 allowing the parties to file their
respective memoranda within ten (10) days from May 21, 1999 is hereby
WHEREFORE, premises considered, judgment is hereby rendered in favor revoked and set aside, since the incidents can be resolved based on the
of the plaintiffs and against defendant declaring the contract of lease records.
rescinded, terminated and cancelled, and ordering defendant:
WHEREFORE, let a writ of execution issue to enforce and implement the
1. To pay plaintiffs the amount of ₱10 Million which is the value of the final and executory decision rendered by this Court on April 27, 1999.
building which defendant failed to construct on the leased properties,
as and by way [of] actual damages; SO ORDERED.5
2. To pay plaintiffs the amount of ₱63,862.57 beginning November Private respondent filed a motion for reconsideration, which was denied.
1998 until defendant and the sub-lessee vacate the leased property Undaunted, private respondent filed a manifestation and motion to lift the writ
by way of reasonable compensation for the use of the properties; of execution. It suffered the same fate as the motion for reconsideration for
being dilatory. The branch sheriff was directed to proceed with the
enforcement of the decision.
Private respondent appealed to the Court of Appeals, which ruled in its favor, IV. … NOT HOLDING THAT JURISDICTION WAS ACQUIRED OVER
thus: PRIVATE RESPONDENT COLUMBUS PHILIPPINES BUS CORPORATION
AND THAT ITS MOTION TO LIFT ORDER OF DEFAULT LACKS MERIT.8
WHEREFORE, the petition is GRANTED; the decision in Civil Case No. 98-
1567 and all the proceedings therein, including the order of default and writ The issues in this case may be succinctly stated as follows:
of execution, are SET ASIDE. The court a quo is ORDERED to require
petitioner to file its answer and thereafter to conduct further appropriate a. Whether there was valid service of summons on private
proceedings with reasonable dispatch. respondent for the trial court to acquire jurisdiction, and
SO ORDERED.6 b. Whether private respondent’s motion to lift order of default was in

order.
The Court of Appeals held that the trial court erred when it denied private
respondent’s motion to lift order of default. The appellate court pointed out On the first issue, petitioners contend that while Section 11, Rule 14 of the
that private respondent was not properly served with summons, thus it 1997 Rules of Civil Procedure clearly specifies the persons authorized to
cannot be faulted if it failed to file an Answer. Section 11, 7 Rule 14 of the receive summons on behalf of a private juridical entity, said provision did not
1997 Rules of Civil Procedure requires that service of summons upon abandon or render inapplicable the substantial compliance rule. Petitioners
domestic private juridical entity shall be made through its president, cite Millenium Industrial Commercial Corporation v. Tan,9 and maintain that
managing partner, general manager, corporate secretary, treasurer or in- this Court, by referring to E.B Villarosa & Partner Co., Ltd. v. Judge Benito,10
house counsel. Since service upon private respondent was made through a effectively ruled that said provision is the statement of the general rule on
certain Ayreen Rejalde, a mere filing clerk in private respondent’s office, as service of summons upon corporation and the substantial compliance rule is
evidenced by the latter’s employment record, such service cannot be the exception. Petitioners claim that this Court, in an array of cases, upheld
considered valid. Consequently, the subsequent proceedings, including the the substantial compliance rule when it allowed the validity of the service of
order of default, judgment by default and its execution, were also invalid summons on the corporation’s employee other than those mentioned in the
because the trial court did not acquire jurisdiction over private respondent. Rule where said summons and complaint were in fact seasonably received
Besides, judgments by default are not favored, especially so when there is a by the corporation from said employee. Petitioners insist that technicality
prima facie showing that the defaulting party has a meritorious defense, must not defeat speedy justice.
which in this case was grounded on the contract of lease sued upon, said the
Court of Appeals.
Petitioners stress that even though the summons was received by a mere
filing clerk in private respondent’s corporation, there was substantial
Petitioner filed a motion for reconsideration, but to no avail. Hence, this compliance with Section 11, Rule 14 because the summons actually reached
petition for review averring that the Court of Appeals erred in: private respondent. This can be gleaned from private respondent’s motion to
lift order of default where private respondent did not question the validity of
I. … HOLDING THAT THERE WAS NO VALID SERVICE OF SUMMONS the service of summons but explained in paragraph three thereof that its
UPON PRIVATE RESPONDENT COLUMBUS PHILIPPINES BUS failure to answer the complaint was due to its impression that the case would
CORPORATION not be pursued by petitioners because the corporation already made
payments to them.11
II. … NOT HOLDING THAT THERE WAS VALID SERVICE OF SUMMONS
CONFORMABLY WITH THE SUBSTANTIAL COMPLIANCE RULE. From said averment, according to petitioners, private respondent in effect
admitted that it received the summons. Notwithstanding this, private
III. … HOLDING THAT WITH THE ADOPTION OF SECTION 11, RULE 14 respondent did not file its answer to the complaint, said the petitioners. This
OF THE 1997 RULES OF CIVIL PROCEDURE, THE SUBSTANTIAL is tantamount to negligence which the court cannot tolerate, petitioners
COMPLIANCE RULE NO LONGER APPLIES. conclude. There being valid service of summons, the Regional Trial Court
acquired jurisdiction over private respondent, according to petitioners.
Petitioners further contend that the Court of Appeals’ reliance on E.B According to private respondent, service through Ayreen Rejalde, a mere
Villarosa & Partner Co., Ltd. v. Judge Benito,12 in denying their motion for filing clerk of private respondent and not one of those enumerated above, is
reconsideration was misplaced, because the factual milieu in said case was invalid.
different from that in the instant case. In Villarosa, according to them, there
was no showing of actual receipt by the defendant corporation of the We find private respondent’s submission on this issue meritorious.
summons while in this case, private respondent actually received the
summons.
The question of whether the substantial compliance rule is still applicable
under Section 11, Rule 14 of the 1997 Rules of Civil Procedure has been
Private respondent counters that nowhere in the Millenium case did this settled in Villarosa which applies squarely to the instant case. In the said
Court expressly state or remotely imply that we have not abandoned the case, petitioner E.B. Villarosa & Partner Co. Ltd. (hereafter Villarosa) with
doctrine of substantial compliance. Private respondent claims that petitioners principal office address at 102 Juan Luna St., Davao City and with branches
misquoted the portion of the Millenium decision where this Court cited the at 2492 Bay View Drive, Tambo, Parañaque, Metro Manila and Kolambog,
Villarosa case, to make it appear that the Villarosa ruling, which provides an Lapasan, Cagayan de Oro City, entered into a sale with development
interpretation of Section 11, Rule 14 of the 1997 Rules of Civil Procedure, agreement with private respondent Imperial Development Corporation. As
states the general rule on the service of summons upon corporations where Villarosa failed to comply with its contractual obligation, private respondent
the substantial compliance rule is the exception. Private respondent avers initiated a suit for breach of contract and damages at the Regional Trial Court
that what this Court discussed in the Millenium case was the rule on service of Makati. Summons, together with the complaint, was served upon Villarosa
of summons under the old Rules of Court prior to the promulgation and through its branch manager at Kolambog, Lapasan, Cagayan de Oro City.
effectivity of the 1997 Rules of Civil Procedure. The Millenium case held that Villarosa filed a Special Appearance with Motion to Dismiss on the ground of
as a general rule, service upon one who is not enumerated in Section 13,13 improper service of summons and lack of jurisdiction. The trial court denied
Rule 14 of the then Rules of Court is invalid, according to private respondent. the motion and ruled that there was substantial compliance with the rule,
An exception is when the summons is actually received by the corporation, thus, it acquired jurisdiction over Villarosa. The latter questioned the denial
which means that there was substantial compliance with the rule. Private before us in its petition for certiorari. We decided in Villarosa’s favor and
respondent stresses that since the exception referred to the old rule, it declared the trial court without jurisdiction to take cognizance of the
cannot be made to apply to the new rule, which clearly specifies and limits case.1awphi1.nét We held that there was no valid service of summons on
the persons authorized to receive the summons in behalf of the Villarosa as service was made through a person not included in the
corporation.1a\^/phi1.net enumeration in Section 11, Rule 14 of the 1997 Rules of Civil Procedure,
which revised the Section 13, Rule 14 of the 1964 Rules of Court. We
Neither can petitioners rely on Millenium to justify their theory, adds private discarded the trial court’s basis for denying the motion to dismiss, namely,
respondent, because at the time the complaint in this case was filed with the private respondent’s substantial compliance with the rule on service of
trial court, the 1997 Rules of Civil Procedure were already in effect. The case summons, and fully agreed with petitioner’s assertions that the enumeration
law applicable in the instant case, contends private respondent, is Villarosa under the new rule is restricted, limited and exclusive, following the rule in
which squarely provides for the proper interpretation of the new rule on the statutory construction that expressio unios est exclusio alterius. Had the
service of summons upon domestic corporation, thus: Rules of Court Revision Committee intended to liberalize the rule on service
of summons, we said, it could have easily done so by clear and concise
The designation of persons or officers who are authorized to accept language. Absent a manifest intent to liberalize the rule, we stressed strict
summons for a domestic corporation or partnership is now limited and more compliance with Section 11, Rule 14 of the 1997 Rules of Civil Procedure.
clearly specified in Section 11, Rule 14 of the 1997 Rules of Civil Procedure.
The rule now states "general manager" instead of only "manager"; "corporate Neither can herein petitioners invoke our ruling in Millenium to support their
secretary" instead of "secretary"; and "treasurer" instead of "cashier." The position for said case is not on all fours with the instant case. We must stress
phrase "agent, or any of its directors" is conspicuously deleted in the new that Millenium was decided when the 1964 Rules of Court were still in force
rule.14 and effect, unlike the instant case which falls under the new rule. Hence, the
cases15 cited by petitioners where we upheld the doctrine of substantial

compliance must be deemed overturned by Villarosa, which is the later case.
At this juncture, it is worth emphasizing that notice to enable the other party
to be heard and to present evidence is not a mere technicality or a trivial
matter in any administrative or judicial proceedings. The service of summons
is a vital and indispensable ingredient of due process.16 We will deprive
private respondent of its right to present its defense in this multi-million peso
suit, if we disregard compliance with the rules on service of summons.
On the second issue, petitioners claim that private respondent’s motion to lift
order of default was not in order for it was filed late, contrary to the provision
in sub-paragraph (b), Section 3,17 Rule 9 of the 1997 Rules of Civil
Procedure, which requires filing of the motion after notice but before
judgment. Also, the motion was (a) not under oath; (b) did not show the
fraud, accident, mistake or excusable neglect that caused private
respondents’ failure to answer; and (c) did not show private respondent’s
meritorious defense.
Private respondent, in turn, argues that since service upon it was invalid, the
trial court did not acquire jurisdiction over it. Hence, all the subsequent
proceedings in the trial court are null and void, including the order of default.
This renders the second issue now moot and academic.
We find merit in private respondent’s submissions. Since we have ruled that

service of summons upon private respondent through its filing clerk cannot
be considered valid, it necessarily follows therefore that the Regional Trial
Court of Pasay City did not acquire jurisdiction over private respondent.18
Consequently, all the subsequent proceedings held before it, including the
order of default, are null and void.19 As private respondent points out, the
second issue has become moot and academic.
WHEREFORE, the instant petition is DENIED. The questioned decision, as

well as the resolution, of the Court of Appeals in CA-G.R. SP No. 54649 are
AFFIRMED. Costs against petitioners.
SO ORDERED.
Bellosillo, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.

G.R. No. 159590 October 18, 2004 faith; but not when he acts with negligence or abuse. There is an abuse of right
when it is exercised for the only purpose of prejudicing or injuring another. The
HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED, exercise of a right must be in accordance with the purpose for which it was
petitioner, established, and must not be excessive or unduly harsh; there must be no
vs. intention to injure another. Thus, in order to be liable under the abuse of rights
CECILIA DIEZ CATALAN, respondent. principle, three elements must concur, to wit: (a) that there is a legal right or
duty; (b) which is exercised in bad faith; and (c) for the sole intent of prejudicing
x----------------------------x or injuring another.
G.R. No. 159591 October 18, 2004

Same; Same; Forum Shopping; Elements; There is forum shopping when
HSBC INTERNATIONAL TRUSTEE LIMITED, petitioner, there exists the following.—It has been held that forum shopping exists where
vs. a litigant sues the same party against whom another action or actions for the
CECILIA DIEZ CATALAN, respondent.
alleged violation of the same right and the enforcement of the same relief is/are
still pending, the defense of litis pendentia in one case is a bar to the others;
Actions; Pleadings and Practice; Cause of Action; The elementary test for and, a final judgment in one would constitute res judicata and thus would cause
failure to state a cause of action is whether the complaint alleges facts which the dismissal of the rest. Thus, there is forum shopping when there exist: a)
if true would justify the relief demanded.—The elementary test for failure to identity of parties, or at least such parties as represent the same interests in
state a cause of action is whether the complaint alleges facts which if true both actions, b) identity of rights asserted and relief prayed for, the relief being
would justify the relief demanded. Stated otherwise, may the court render a founded on the same facts, and c) the identity of the two preceding particulars
valid judgment upon the facts alleged therein? The inquiry is into the is such that any judgment rendered in the pending case, regardless of which
sufficiency, not the veracity of the material allegations. If the allegations in the party is successful would amount to res judicata in the other.
complaint furnish sufficient basis on which it can be maintained, it should not
be dismissed regardless of the defense that may be presented by the
defendants.
Same; Same; Same; Verily, there can be no forum shopping where in one
proceeding a party raises a claim for damages based on tort and, in another
proceeding a party seeks the allowance of an alleged last will based on one’s
Same; Same; Damages; Abuse of Rights Principle; Elements; There is an claim as an heir.—Verily, there can be no forum shopping where in one
abuse of right when it is exercised for the only purpose of prejudicing or injuring proceeding a party raises a claim for damages based on tort and, in another
another.—Catalan anchors her complaint for damages on Article 19 of the Civil proceeding a party seeks the allowance of an alleged last will based on one’s
Code. It speaks of the fundamental principle of law and human conduct that a claim as an heir. After all, the merits of the action for damages is not to be
person “must, in the exercise of his rights and in the performance of his duties, determined in the probate proceeding and vice versa. Undeniably, the facts or
act with justice, give every one his due, and observe honesty and good faith.” evidence as would support and establish the two causes of action are not the
It sets the standards which may be observed not only in the exercise of one’s same.
rights but also in the performance of one’s duties. When a right is exercised in
a manner which does not conform with the norms enshrined in Article 19 and
results in damage to another, a legal wrong is thereby committed for which the
wrongdoer must be held responsible. But a right, though by itself legal because Same; Same; Jurisdictions; Voluntary Appearance; The Court has held that
recognized or granted by law as such, may nevertheless become the source the filing of motions seeking affirmative relief such as, to admit answer, for
of some illegality. A person should be protected only when he acts in the additional time to file answer, for reconsideration of a default judgment, and to
legitimate exercise of his right, that is, when he acts with prudence and in good lift order of default with motion for reconsideration, are considered voluntary
submission to the jurisdiction of the court.—The Court has held that the filing The factual antecedents are as follows:
of motions seeking affirmative relief, such as, to admit answer, for additional
time to file answer, for reconsideration of a default judgment, and to lift order On January 29, 2001, respondent filed before the RTC, a complaint
of default with motion for reconsideration, are considered voluntary submission for a sum of money with damages against petitioner HSBANK,
to the jurisdiction of the court. docketed as Civil Case No. 01-11372, due to HSBANK’s alleged
wanton refusal to pay her the value of five HSBANK checks issued
by Frederick Arthur Thomson (Thomson) amounting to
HK$3,200,000.00.2
Same; Same; Same; A party who makes a special appearance in court
challenging the jurisdiction of said court, cannot be considered voluntary
On February 7, 2001, summons was served on HSBANK at the Enterprise
submission to the jurisdiction of the court.—It is settled that a party who makes Center, Tower I, Ayala Avenue corner Paseo de Roxas St., Makati City.3
a special appearance in court challenging the jurisdiction of said court, e.g., HSBANK filed a Motion for Extension of Time to File Answer or Motion to
invalidity of the service of summons, cannot be considered to have submitted Dismiss dated February 21, 2001.4 Then, it filed a Motion to Dismiss, dated
himself to the jurisdiction of the court. March 8, 2001, on the grounds that (a) the RTC has no jurisdiction over the
subject matter of the complaint; (b) the RTC has not acquired jurisdiction for
failure of the plaintiff to pay the correct filing or docket fees; (c) the RTC has
PETITIONS for review on certiorari of a decision of the Court of Appeals. no jurisdiction over the person of HSBANK; (d) the complaint does not state
a cause of action against HSBANK; and (e) plaintiff engages in forum-
shopping.5
The facts are stated in the opinion of the Court. On September 10, 2001, Catalan filed an Amended Complaint impleading
petitioner HSBC TRUSTEE as co-defendant and invoking Article 19 of the
Romulo, Mabanta, Buenaventura, Sayoc & De Los Angeles for
Civil Code as basis for her cause of action.6
petitioners.
The Law Firm of Mirano and Mirano for respondent. The Amended Complaint alleges:
Defendants HSBANK and HSBC TRUSTEE, doing business in the

Philippines, are corporations duly organized under the laws of the
DECISION British Virgin Islands with head office at 1 Grenville Street, St. Helier
Jersey, Channel Islands and with branch offices at Level 12, 1
Queen’s Road Central, Hongkong and may be served with summons
AUSTRIA-MARTINEZ, J.: and other court processes through their main office in Manila with
address at HSBC, the Enterprise Center, Tower 1, Ayala Avenue
Before us are two petitions for review on certiorari under Rule 45 of the Rules corner Paseo de Roxas Street, Makati City.
of Court separately filed by the Hongkong and Shanghai Banking
Corporation Limited (HSBANK) and HSBC International Trustee Limited Sometime in March 1997, Thomson issued five HSBANK checks payable to
(HSBC TRUSTEE). They seek the reversal of the consolidated Decision,1 Catalan, to wit:
dated August 14, 2003, of the Court of Appeals (CA) in CA-G.R. SP Nos.
75756 and 75757, which dismissed the petitions for certiorari of herein
petitioners assailing the Order, dated May 15, 2002, of the Regional Trial CHECK NO. DATE AMOUNT
Court, Branch 44, Bacolod City (RTC) in Civil Case No. 01-11372 that denied
807852 Mar. 15, 1997 $600,000.00
their respective motions to dismiss the amended complaint of respondent
Cecilia Diez Catalan. 807853 Mar. 17, 1997 800,000.00
807854 Mar. 17, 1997 600,000.00 explanation whatsoever was made why her claim was disapproved, neither
were the checks returned to her. Catalan appealed for fairness and
807855 Mar. 22, 1997 600,000.00 understanding, in the hope that HSBC TRUSTEE would act fairly and justly
on her claim but these demands were met by a stonewall of silence. On June
807856 Mar. 23, 1997 600,000.00 9, 2000, Catalan through counsel sent a last and final demand to HSBC
TRUSTEE to remit the amount covered by the checks but despite receipt of
TOTAL $3,200,000.00 said letter, no payment was made. Clearly, the act of the HSBANK and
HSBC TRUSTEE in refusing to honor and pay the checks validly issued by
Thomson violates the abuse of rights principle under Article 19 of the Civil
Code which requires that everyone must act with justice, give everyone his
The checks when deposited were returned by HSBANK purportedly for due and observe honesty and good faith. The refusal of HSBANK and HSBC
reason of "payment stopped" pending confirmation, despite the fact that the TRUSTEE to pay the checks without any valid reason is intended solely to
checks were duly funded. On March 18, 1997, Thomson wrote a letter to a prejudice and injure Catalan. When they declined payment of the checks
certain Ricky Sousa7 of HSBANK confirming the checks he issued to Catalan despite instructions of the drawer, Thomson, to honor them, coupled with the
and requesting that all his checks be cleared. On March 20, 1997, Thomson fact that the checks were duly funded, they acted in bad faith, thus causing
wrote another letter to Sousa of HSBANK requesting an advice in writing to damage to Catalan. A person may not exercise his right unjustly or in a
be sent to the Philippine National Bank, through the fastest means, that the manner that is not in keeping with honesty or good faith, otherwise he opens
checks he previously issued to Catalan were already cleared. Thereafter, himself to liability for abuse of right.8
Catalan demanded that HSBANK make good the checks issued by
Thomson. On May 16, 1997, Marilou A. Lozada, personal secretary and Catalan prays that HSBANK and HSBC TRUSTEE be ordered to pay
attorney-in-fact of Thomson, wrote a letter to Sousa of HSBANK informing ₱20,864,000.00 representing the value of the five checks at the rate of ₱6.52
him that HSBANK’s failure to clear all the checks had saddened Thomson per HK$1 as of January 29, 2001 for the acts of HSBANK and HSBC
and requesting that the clearing of the checks be facilitated. Subsequently, TRUSTEE in refusing to pay the amount justly due her, in addition to moral
Thomson died and Catalan forwarded her demand to HSBC TRUSTEE. and exemplary damages, attorney’s fees and litigation expenses.9
Catalan sent photocopies of the returned checks to HSBC TRUSTEE. Not
satisfied, HSBC TRUSTEE through deceit and trickery, required Catalan, as
a condition for the acceptance of the checks, to submit the original copies of On October 2, 2001, HSBANK filed a Motion to Dismiss Amended Complaint
the returned checks, purportedly, to hasten payment of her claim. HSBC on the grounds that: (a) the RTC has no jurisdiction over the subject matter
TRUSTEE succeeded in its calculated deception because on April 21, 1999, of the complaint since the action is a money claim for a debt contracted by
Catalan and her former counsel went to Hongkong at their own expense to Thomson before his death which should have been filed in the estate or
personally deliver the originals of the returned checks to the officers of HSBC intestate proceedings of Thomson; (b) Catalan engages in forum shopping
TRUSTEE, anxious of receiving the money value of the checks but HSBC by filing the suit and at the same time filing a claim in the probate proceeding
TRUSTEE despite receipt of the original checks, refused to pay Catalan’s filed with another branch of the RTC; (c) the amended complaint states no
claim. Having seen and received the original of the checks, upon its request, cause of action against HSBANK since it has no obligation to pay the checks
HSBC TRUSTEE is deemed to have impliedly accepted the checks. as it has not accepted the checks and Catalan did not re-deposit the checks
Moreover, the refusal of HSBANK and HSBC TRUSTEE to pay the checks is or make a formal protest; (d) the RTC has not acquired jurisdiction over the
equivalent to illegal freezing of one’s deposit. On the assurance of HSBC person of HSBANK for improper service of summons; and, (e) it did not
TRUSTEE that her claim will soon be paid, as she was made to believe that submit to the jurisdiction of the RTC by filing a motion for extension of time to
payments of the checks shall be made by HSBC TRUSTEE "upon sight," the file a motion to dismiss.10
unsuspecting Catalan left the originals of the checks with HSBC TRUSTEE
and was given only an acknowledgment receipt. Catalan made several Meanwhile, on October 17, 2001, summons for HSBC TRUSTEE was
demands and after several more follow ups, on August 16, 1999, Phoenix tendered to the In House Counsel of HSBANK (Makati Branch) at the
Lam, Senior Vice President of HSBC TRUSTEE, in obvious disregard of her Enterprise Center, Tower 1, Ayala Avenue corner Paseo de Roxas, Makati.
valid claim, informed Catalan that her claim is disapproved. No reason or Without submitting itself to the jurisdiction of the RTC, HSBC TRUSTEE filed
a Special Appearance for Motion to Dismiss Amended Complaint, dated Subsequently, HSBANK and HSBC TRUSTEE filed before the RTC separate
October 29, 2001, questioning the jurisdiction of the RTC over it.11 HSBC Answers ad cautelam, both dated March 18, 2003, as a "precaution against
TRUSTEE alleges that tender of summons through HSBANK Makati did not being declared in default and without prejudice to the separate petitions for
confer upon the RTC jurisdiction over it because: (a) it is a corporation certiorari and/or prohibition then pending with the CA."18
separate and distinct from HSBANK; (b) it does not hold office at the
HSBANK Makati or in any other place in the Philippines; (c) it has not Meanwhile, the two petitions for certiorari before the CA were consolidated
authorized HSBANK Makati to receive summons for it; and, (d) it has no and after responsive pleadings were filed, the cases were deemed submitted
resident agent upon whom summons may be served because it does not for decision.
transact business in the Philippines.
In a consolidated Decision dated August 14, 2003, the CA dismissed the two
Subsequently, HSBC TRUSTEE filed a Submission, dated November 15, petitions for certiorari.19 The CA held that the filing of petitioners’ answers
2001, attaching the Affidavit executed in Hongkong by Phoenix Lam, Senior before the RTC rendered moot and academic the issue of the RTC’s lack of
Vice-President of HSBC TRUSTEE, attesting to the fact that: 1) HSBC jurisdiction over the person of the petitioners; that the RTC has jurisdiction
TRUSTEE has not done nor is it doing business in the Philippines; 2) it does over the subject matter since it is one for damages under Article 19 of the
not maintain any office in Makati or anywhere in the Philippines; 3) it has not Civil Code for the alleged unjust acts of petitioners and not a money claim
appointed any agent in Philippines; and 4) HSBANK Makati has no authority against the estate of Thomson; and, that the amended complaint states a
to receive any summons or court processes for HSBC TRUSTEE.12 cause of action under Article 19 of the Civil Code which could merit a
favorable judgment if found to be true. The CA noted that Catalan may have
On May 15, 2002, the RTC issued an Order denying the two motions to prayed for payment of the value of the checks but ratiocinated that she
dismiss.13 The RTC held that it has jurisdiction over the subject matter of the merely used the value as basis for the computation of the damages.
action because it is an action for damages under Article 19 of the Civil Code
for the acts of unjustly refusing to honor the checks issued by Thomson and Hence, the present petitions.
not a money claim against the estate of Thomson; that Catalan did not
engage in forum-shopping because the elements thereof are not attendant in
In G.R. No. 159590, HSBANK submits the following assigned errors:
the case; that the question of cause of action should be threshed out or
ventilated during the proceedings in the main action and after the plaintiff and
defendants have adduced evidence in their favor; that it acquired jurisdiction I.
over the person of defendants because the question of whether a foreign
corporation is doing business or not in the Philippines cannot be a subject of THE COURT OF APPEALS COMMITTED SERIOUS
a Motion to Dismiss but should be ventilated in the trial on the merits; and ERROR IN HOLDING THAT THE COURT A QUO, ACTING
defendants voluntarily submitted to the jurisdiction of the RTC setting up in AS AN (SIC) REGULAR COURT, HAS JURISDICTION
their Motions to Dismiss other grounds aside from lack of jurisdiction. OVER THE AMENDED COMPLAINT SEEKING TO ORDER
HSBC TRUSTEE, THE EXECUTOR OF THE DECEASED
HSBANK and HSBC TRUSTEE filed separate motions for reconsideration14 FREDERICK ARTHUR THOMSON, TO PAY SUBJECT
but both proved futile as they were denied by the RTC in an Order dated CHECKS ISSUED BY THE LATE FREDERICK ARTHUR
December 20, 2002.15 THOMSON, ADMITTEDLY IN PAYMENT OF HIS
INDEBTEDNESS TO CATALAN.
On February 21, 2003, Catalan moved to declare HSBANK and HSBC
TRUSTEE in default for failure to file their answer to the amended complaint. II.
On March 5, 2003, HSBANK and HSBC TRUSTEE filed separate petitions THE COURT OF APPEALS COMMITTED SERIOUS
for certiorari and/or prohibition with the CA, docketed as CA-G.R. SP Nos. ERROR IN HOLDING THAT THE AMENDED COMPLAINT
7575616 and 75757,17 respectively. DOES NOT SEEK TO ORDER HSBANK AND HSBC
INTERNATIONAL TRUSTEE LIMITED TO PAY THE COMPLAINT AGAINST HSBC TRUSTEE DESPITE THE FACT IT
OBLIGATION OF THE (SIC) FREDERICK ARTHUR HAS NOT BEEN DULY SERVED WITH SUMMONS.22
THOMSON AS EVIDENCED BY THE CHECKS, BUT
PRAYS FOR DAMAGES EQUIVALENT OR COMPUTED HSBANK and HSBC TRUSTEE contend in common that Catalan has no
ON THE BASIS OF THE VALUE OF THE CHECKS cause of action for abuse of rights under Article 19 of the Civil Code; that her
BECAUSE THE DEFENDANTS FAILED TO COMPLY WITH complaint, under the guise of a claim for damages, is actually a money claim
THE MANDATES OF ARTICLE 19 OF THE NEW CIVIL against the estate of Thomson arising from checks issued by the latter in her
CODE. favor in payment of indebtedness.
III. HSBANK claims that the money claim should be dismissed on the ground of
forum-shopping since Catalan also filed a petition for probate of the alleged
THE COURT OF APPEALS COMMITTED SERIOUS last will of Thomson before RTC, Branch 48, Bacolod City, docketed as
ERROR IN HOLDING THAT ALLEGATIONS IN THE Spec. Proc No. 00-892. In addition, HSBANK imputes error upon the CA in
AMENDED COMPLAINT MAKE OUT A CAUSE OF ACTION holding that by filing an answer to the amended complaint, petitioners are
WHICH COULD MERIT A FAVORABLE JUDGMENT IF estopped from questioning the jurisdiction of the RTC.
FOUND TO BE TRUE, OR IN NOT HOLDING THAT THE
AMENDED COMPLAINT STATES NO CAUSE OF ACTION HSBC TRUSTEE maintains that the RTC did not acquire jurisdiction over it
AGAINST HSBANK, AS DRAWEE BANK. for improper service of summons.
IV. In her Comment, Catalan insists that her complaint is one for damages under
Article 19 of the Civil Code for the wanton refusal to honor and pay the value
THE COURT OF APPEALS COMMITTED SERIOUS of five checks issued by the Thomson amounting to HK$3,200,000.00. She
ERROR IN DISREGARDING THE FACT THAT CATALAN argues that the issue of jurisdiction has been rendered moot by petitioners’
ENGAGED IN FORUM SHOPPING BY FILING THE participation in the proceedings before the RTC.
AMENDED COMPLAINT WHILE HER PETITION FOR THE
PROBATE OF THE SUPPOSED WILL OF THE DECEASED Succinctly, the issues boil down to the following:
FREDERICK ARTHUR THOMSON IS PENDING WITH
ANOTHER BRANCH OF THE COURT A QUO.
1) Does the complaint state a cause of action?
V.
2) Did Catalan engage in forum-shopping by filing the complaint for
damages when she also filed a petition for probate of the alleged last
THE COURT OF APPEALS COMMITTED SERIOUS will of Thomson with another branch of the RTC? and,
ERROR IN HOLDING THAT HSBANK HAD SUBMITTED
TO THE JURISDICTION OF THE COURT A QUO BY 3) Did the RTC acquire jurisdiction over HSBANK and HSBC
SUBMITTING AN ANSWER TO THE AMENDED
TRUSTEE? Corollary thereto, did the filing of the answer before the
COMPLAINT.20
RTC render the issue of lack of jurisdiction moot and academic?
In G.R. No. 159591, HSBC TRUSTEE also assigns the foregoing first, We shall resolve the issue in seriatim.
second and fifth errors as its own.21 In addition, it claims that:
Does the complaint state a cause of action against HSBANK and HSBC
THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN
TRUSTEE?
NOT ORDERING THE DISMISSAL OF THE AMENDED
The elementary test for failure to state a cause of action is whether the of insouciance on its part, are sufficient statements of clear abuse of right for
complaint alleges facts which if true would justify the relief demanded. Stated which it may be held liable to Catalan for any damages she incurred resulting
otherwise, may the court render a valid judgment upon the facts alleged therefrom. HSBANK’s actions, or lack thereof, prevented Catalan from
therein?23 The inquiry is into the sufficiency, not the veracity of the material seeking further redress with Thomson for the recovery of her claim while the
allegations.24 If the allegations in the complaint furnish sufficient basis on latter was alive.
which it can be maintained, it should not be dismissed regardless of the
defense that may be presented by the defendants.25 HSBANK claims that Catalan has no cause of action because under Section
189 of the Negotiable Instruments Law, "a check of itself does not operate as
Catalan anchors her complaint for damages on Article 19 of the Civil Code. It an assignment of any part of the funds to the credit of the drawer with the
speaks of the fundamental principle of law and human conduct that a person bank, and the bank is not liable to the holder unless and until it accepts or
"must, in the exercise of his rights and in the performance of his duties, act certifies it." However, HSBANK is not being sued on the value of the check
with justice, give every one his due, and observe honesty and good faith." It itself but for how it acted in relation to Catalan’s claim for payment despite
sets the standards which may be observed not only in the exercise of one’s the repeated directives of the drawer Thomson to recognize the check the
rights but also in the performance of one’s duties. When a right is exercised latter issued. Catalan may have prayed that she be paid the value of the
in a manner which does not conform with the norms enshrined in Article 19 checks but it is axiomatic that what determines the nature of an action, as
and results in damage to another, a legal wrong is thereby committed for well as which court has jurisdiction over it, are the allegations of the
which the wrongdoer must be held responsible.26 But a right, though by itself complaint, irrespective of whether or not the plaintiff is entitled to recover
legal because recognized or granted by law as such, may nevertheless upon all or some of the claims asserted therein.30
become the source of some illegality. A person should be protected only
when he acts in the legitimate exercise of his right, that is, when he acts with Anent HSBC TRUSTEE, it is being sued for the baseless rejection of
prudence and in good faith; but not when he acts with negligence or abuse.27 Catalan’s claim. When Catalan parted with the checks as a requirement for
There is an abuse of right when it is exercised for the only purpose of the processing of her claim, even going to the extent of traveling to
prejudicing or injuring another. The exercise of a right must be in accordance Hongkong to deliver personally the checks, HSBC TRUSTEE summarily
with the purpose for which it was established, and must not be excessive or disapproved her claim with nary a reason. HSBC TRUSTEE gave no heed to
unduly harsh; there must be no intention to injure another.28 Catalan’s incessant appeals for an explanation. Her pleas fell on deaf and
uncaring corporate ears. Clearly, HSBC TRUSTEE’s acts are anathema to
Thus, in order to be liable under the abuse of rights principle, three elements the prescription for human conduct enshrined in Article 19 of the Civil Code.
must concur, to wit: (a) that there is a legal right or duty; (b) which is
exercised in bad faith; and (c) for the sole intent of prejudicing or injuring Did Catalan engage in forum-shopping?
another.29
It has been held that forum-shopping exists where a litigant sues the same
In this instance, after carefully examining the amended complaint, we are party against whom another action or actions for the alleged violation of the
convinced that the allegations therein are in the nature of an action based on same right and the enforcement of the same relief is/are still pending, the
tort under Article 19 of the Civil Code. It is evident that Catalan is suing defense of litis pendentia in one case is a bar to the others; and, a final
HSBANK and HSBC TRUSTEE for unjustified and willful refusal to pay the judgment in one would constitute res judicata and thus would cause the
value of the checks. dismissal of the rest.31
HSBANK is being sued for unwarranted failure to pay the checks Thus, there is forum-shopping when there exist: a) identity of parties, or at
notwithstanding the repeated assurance of the drawer Thomson as to the least such parties as represent the same interests in both actions, b) identity
authenticity of the checks and frequent directives to pay the value thereof to of rights asserted and relief prayed for, the relief being founded on the same
Catalan. Her allegations in the complaint that the gross inaction of HSBANK facts, and c) the identity of the two preceding particulars is such that any
on Thomson’s instructions, as well as its evident failure to inform Catalan of judgment rendered in the pending case, regardless of which party is
the reason for its continued inaction and non-payment of the checks, smack successful would amount to res judicata in the other.32
Applying the foregoing requisites to the case before us in relation to Spec. It must be noted that HSBANK initially filed a Motion for Extension of Time to
Proc No. 00-892, the probate proceeding brought by Catalan before RTC, File Answer or Motion to Dismiss.35 HSBANK already invoked the RTC’s
Branch 48, Bacolod City, it is obvious that forum-shopping does not exist. jurisdiction over it by praying that its motion for extension of time to file
answer or a motion to dismiss be granted. The Court has held that the filing
There is no identity of parties. HSBANK is not a party in the probate of motions seeking affirmative relief, such as, to admit answer, for additional
proceeding. HSBC TRUSTEE is only a party in the probate proceeding time to file answer, for reconsideration of a default judgment, and to lift order
because it is the executor and trustee named in the Hongkong will of of default with motion for reconsideration, are considered voluntary
Thomson. HSBC TRUSTEE is representing the interest of the estate of submission to the jurisdiction of the court.36 Consequently, HSBANK’s
Thomson and not its own corporate interest. expressed reservation in its Answer ad cautelam that it filed the same "as a
mere precaution against being declared in default, and without prejudice to
With respect to the second and third requisites, a scrutiny of the entirety of the Petition for Certiorari and/or Prohibition xxx now pending before the Court
of Appeals"37 to assail the jurisdiction of the RTC over it is of no moment.
the allegations of the amended complaint in this case reveals that the rights
Having earlier invoked the jurisdiction of the RTC to secure affirmative relief
asserted and reliefs prayed for therein are different from those pleaded in the
in its motion for additional time to file answer or motion to dismiss, HSBANK,
probate proceeding, such that a judgment in one case would not bar the
effectively submitted voluntarily to the jurisdiction of the RTC and is thereby
prosecution of the other case. Verily, there can be no forum-shopping where
in one proceeding a party raises a claim for damages based on tort and, in estopped from asserting otherwise, even before this Court.
another proceeding a party seeks the allowance of an alleged last will based
on one’s claim as an heir. After all, the merits of the action for damages is not In contrast, the filing by HSBC TRUSTEE of a motion to dismiss cannot be
to be determined in the probate proceeding and vice versa. Undeniably, the considered a voluntary submission to the jurisdiction of the RTC. It was a
facts or evidence as would support and establish the two causes of action conditional appearance, entered precisely to question the regularity of the
are not the same.33 Consequently, HSBANK’s reliance on the principle of service of summons. It is settled that a party who makes a special
forum-shopping is clearly misplaced. appearance in court challenging the jurisdiction of said court, e.g., invalidity
of the service of summons, cannot be considered to have submitted himself
to the jurisdiction of the court.38 HSBC TRUSTEE has been consistent in all
Did the RTC acquire jurisdiction over HSBANK and HSBC TRUSTEE?
its pleadings in assailing the service of summons and the jurisdiction of the
RTC over it. Thus, HSBC TRUSTEE cannot be declared in estoppel when it
The Rules of Court provides that a court generally acquires jurisdiction over a filed an Answer ad cautelam before the RTC while its petition for certiorari
person through either a valid service of summons in the manner required by was pending before the CA. Such answer did not render the petition for
law or the person’s voluntary appearance in court.34 certiorari before the CA moot and academic. The Answer of HSBC
TRUSTEE was only filed to prevent any declaration that it had by its inaction
In holding that it acquired jurisdiction over HSBANK and HSBC TRUSTEE, waived the right to file responsive pleadings.
the RTC held that both voluntarily submitted to the jurisdiction of the court by
setting up in their Motions to Dismiss other grounds aside from lack of Admittedly, HSBC TRUSTEE is a foreign corporation, organized and existing
jurisdiction. On the other hand, the CA ruled that HSBANK and HSBC under the laws of the British Virgin Islands. For proper service of summons
TRUSTEE are estopped from challenging the jurisdiction of the RTC on foreign corporations, Section 12 of Rule 14 of the Revised Rules of Court
because they filed their respective answers before the RTC. provides:
We find that both lower courts overlooked Section 20 of Rule 14 of the 1997 SEC. 12. Service upon foreign private juridical entity. – When the
Rules of Civil Procedure which provides that "the inclusion in a motion to defendant is a foreign private juridical entity which has transacted
dismiss of other grounds aside from lack of jurisdiction over the person of the business in the Philippines, service may be made on its resident
defendant shall not be deemed a voluntary appearance." Nonetheless, such agent designated in accordance with law for that purpose, or if there
omission does not aid HSBANK’s case. be no such agent, on the government official designated by law to
that effect, or on any of its officers or agents within the Philippines.
In French Oil Mill Machinery Co., Inc. vs. Court of Appeals,39 we had City is declared without jurisdiction to take cognizance of Civil Case No. 01-
occasion to rule that it is not enough to merely allege in the complaint that a 11372 against the HSBC International Trustee Limited, and all its orders and
defendant foreign corporation is doing business. For purposes of the rule on issuances with respect to the latter are hereby ANNULLED and SET ASIDE.
summons, the fact of doing business must first be "established by The said Regional Trial Court is hereby ORDERED to DESIST from
appropriate allegations in the complaint" and the court in determining such maintaining further proceedings against the HSBC International Trustee
fact need not go beyond the allegations therein.40 Limited in the case aforestated.
The allegations in the amended complaint subject of the present cases did SO ORDERED.
not sufficiently show the fact of HSBC TRUSTEE’s doing business in the
Philippines. It does not appear at all that HSBC TRUSTEE had performed Puno, Callejo, Sr., Tinga, and Chico-Nazario*, JJ., concur.
any act which would give the general public the impression that it had been
engaging, or intends to engage in its ordinary and usual business
undertakings in the country. Absent from the amended complaint is an
allegation that HSBC TRUSTEE had performed any act in the country that
would place it within the sphere of the court’s jurisdiction.
We have held that a general allegation, standing alone, that a party is doing
business in the Philippines does not make it so; a conclusion of fact or law
cannot be derived from the unsubstantiated assertions of parties
notwithstanding the demands of convenience or dispatch in legal actions,
otherwise, the Court would be guilty of sorcery; extracting substance out of
nothingness.41
Besides, there is no allegation in the amended complaint that HSBANK is the

domestic agent of HSBC TRUSTEE to warrant service of summons upon it.
Thus, the summons tendered to the In House Counsel of HSBANK (Makati
Branch) for HSBC TRUSTEE was clearly improper.
There being no proper service of summons, the RTC cannot take cognizance
of the case against HSBC TRUSTEE for lack of jurisdiction over it. Any
proceeding undertaken by the RTC is therefore null and void.42 Accordingly,
the complaint against HSBC TRUSTEE should have been dismissed for lack
of jurisdiction over it.
WHEREFORE, the petition in G.R. No. 159590 is DENIED. The Decision of

the Court of Appeals, dated August 14, 2003, in CA-G.R. SP No. 75757
dismissing the petition for certiorari of the Hongkong and Shanghai Banking
Corporation Limited is AFFIRMED.
The petition in G.R. No. 159591 is GRANTED. The Decision of the Court of
Appeals, dated August 14, 2003, in CA-G.R. SP No. 75756 dismissing the
petition for certiorari of the HSBC International Trustee Limited is
REVERSED and SET ASIDE. The Regional Trial Court, Branch 44, Bacolod
G.R. No. 147530 June 29, 2005 Quezon City. Yet, the summons, together with a copy of the complaint, was
served not in his Manila office but in PFDA’s Iloilo branch office and received
PABLO B. CASIMINA, then General Manager of the Philippine Fisheries by the records receiving officer there. We have held that the failure to faithfully,
Development Authority, petitioner, strictly and fully comply with the requirements of substituted service renders
vs. the service ineffective.
HON. EMILIO B. LEGASPI, in his capacity as Presiding Judge of RTC of
Iloilo, Branch 22 and EMMANUEL T. ILLERA, respondents. Same; Same; Same; Same; Same; The doctrine of substantial compliance
requires that for there to be a valid service of summons, actual receipt of the
PABLO B. CASIMINA, then General Manager of the Philippine Fisheries summons by the defendant through the person served must be shown.—The
Development Authority, petitioner, vs. HON. EMILIO B. LEGASPI, in his doctrine of substantial compliance requires that for there to be a valid service
capacity as Presiding Judge of RTC of Iloilo, Branch 22 and EMMANUEL of summons, actual receipt of the summons by the defendant through the
T. ILLERA, respondents. person served must be shown. We further require that where there is
substituted service, there should be a report indicating that the person who
received the summons in the defendant’s behalf was one with whom petitioner
had a relation of confidence ensuring that the latter would receive or would be
Remedial Law; Courts; Summons; Jurisdictions; A court acquires jurisdiction
notified of the summons issued in his name. None of these was observed in
over a person either through a valid service of summons or the person’s
the case at bar.
voluntary appearance.—A court acquires jurisdiction over a person either
through a valid service of summons or the person’s voluntary appearance in Same; Same; Same; Same; It is well-settled that a party who makes a special
court. A court must necessarily have jurisdiction over a party for the latter to appearance in court challenging the jurisdiction of said court based on the
be bound by a court decision. ground of invalidity of summons, among others, cannot be considered to have
submitted himself to the jurisdiction of the court; Even the assertion of
Same; Same; Same; Same; Substituted Service; As a rule, summons should
affirmative defenses, aside from lack of jurisdiction over the person of the
be personally served on the defendant; It is only when summons cannot be
defendant cannot be considered a waiver of the defense of lack of jurisdiction
served personally within a reasonable period of time that the substituted
over such person.—We cannot infer actual receipt of summons by petitioner
service may be resorted to; Modes of effecting substituted service of
from the fact that the government corporate counsel filed a motion to dismiss
summons.—Summons is a writ by which the defendant is notified of the action
the case against him and Mr. Cosejo appeared on his behalf during the
brought against him. Service of such writ is the means by which the court may
summary hearing for the issuance of a temporary restraining order to ask for
acquire jurisdiction over his person. As a rule, summons should be personally
the postponement of the case. It is well-settled that a party who makes a
served on the defendant. It is only when summons cannot be served
special appearance in court challenging the jurisdiction of said court based on
personally within a reasonable period of time that substituted service may be
the ground of invalidity of summons, among others, cannot be considered to
resorted to. The Rules specify two modes for effecting substituted service of
have submitted himself to the jurisdiction of the court. Even the assertion of
summons, to wit: a) by leaving copies of the summons at the defendant’s
affirmative defenses, aside from lack of jurisdiction over the person of the
residence with some person of suitable age and discretion then residing
defendant, cannot be considered a waiver of the defense of lack of jurisdiction
therein, or b) by leaving the copies at defendant’s office or regular place of
over such person.
business with some competent person in charge thereof.
Same; Same; Same; Same; Same; Failure to faithfully, strictly and fully comply
with the requirements of substituted service renders the service ineffective.— PETITION for review on certiorari of the decision and order of the Court of
Petitioner never received the summons against him, whether personally or in Appeals.
his office. The records show that petitioner’s official address as the General
Manager of the Philippine Fisheries Development Authority (PFDA) was in The facts are stated in the opinion of the Court.
Amado V. Domingo, Jr. for respondent. Mr. Illera and Engr. Cosejo should immediately clear themselves of their
administrative accountabilities before proceeding to their new place of
DECISION assignment.
CORONA, J.: This Order shall remain effective until revoked in writing by the undersigned.
Before us is a petition for review under Rule 45 of the Rules of Civil (SGD.) PABLO B. CASIMINA
Procedure for the nullification of the decision dated August 18, 2000 of Hon. General Manager
Emilio B. Legaspi, presiding judge of the Regional Trial Court of Iloilo City,
Branch 22 in Civil Case No. 00-26187, directing petitioner to desist from On March 22, 2000, private respondent sent a memorandum 2 to petitioner
giving effect to the re-assignment of private respondent from his permanent praying for a reconsideration of the above order. He wrote –
station in Iloilo City to the Quezon City office.
22 March 2000
The facts follow.
MEMORANDUM
Private respondent Emmanuel T. Illera was the Port Manager of the Iloilo
Fishing Port Complex (IFPC) while petitioner Pablo B. Casimina was the then F O R: The General Manager, PFDA
General Manager of the Philippine Fisheries Development Authority (PFDA)
with offices in Quezon City. T H R U: The Asst. General Manager, PFDA
On March 17, 2000, petitioner Casimina issued Special Order No. 82 1 re- F R O M: The Port Manager, PFDA-IFPC
assigning private respondent from Iloilo to the central office in Quezon City:
SUBJECT: REASSIGNMENT
17 March 2000
In the late afternoon of 21 March 2000, S.O. no. 82 s. 2000 was faxed to my
SPECIAL ORDER office. I was surprised when my staff gave this communication to me the next
day because considering my transfer or any employees transfers for that
No. 82 matter – would have far reaching official and personal consequences as well,
Series of 2000 I expected that this matter should have at least first been discussed with me.
As it is I do not know for what reasons if any I am being reassigned or even
Subject: REASSIGNMENT OF PERSONNEL what I am supposed to be doing in your office when I get there. The S.O.
itself is silent on these matters.
In the exigency of the service, Mr. EMMANUEL T. ILLERA, Port Manager of
the Iloilo Fish Port Complex (IFPC) is hereby reassigned to the Central Office My situation becomes quite ironic when we look at S.O. no. 81 s. 2000 which
of the General Manager effective 03 April 2000. To assume responsibility of is dated 14 March 2000. Before this Order referring to Ms. Irma Catain’s
over-all port administration, Engr. TITO C. COSEJO, Port Manager, Navotas detail to Central Office was even prepared, Ms. Catain first talked to you, me
Fish Port Complex (NFPC) is hereby re-assigned and designated as Acting and Atty. Paz to whose office she will be assigned. When we accepted her
Port Manager of the Iloilo Fish Port Complex. personal reasons for reassignment our offices worked out the details of her
transfer and so the Special Order was issued. If you will recall, last 18
January 2000 an undated S.O. No. 024 was issued transferring Engr. P.
Zapanta, the IFPC Acting EMD chief to General Santos and no prior
consultation was also done. I thought with the procedure observed in Ms. docketed as Civil Case No. 00-26187, to restrain petitioner from transferring
Catain’s case all that was behind us. him to the central office in Quezon City.
In view therefore of the above I am requesting that S.O. No. 82 s.2000 be On April 14, 2000, petitioner, through counsel, filed an omnibus motion for
reconsidered. the dismissal of the complaint on the grounds of lack of jurisdiction over his
person and the subject matter, and lack of cause of action. He averred that
(SGD.) EMMANUEL T. ILLERA he never received any summons or copy of the complaint against him,
hence, the court never acquired jurisdiction over his person. He further
On March 29, 2000, petitioner issued a memorandum 3 to private respondent contended that the case involved personnel movement of a government
stating therein the reason for the re-assignment. He explained – employee in the public service and should have been appealed to the Civil
Service Commission instead of the regular courts.
29 March 2000
The trial court denied petitioner’s motion to dismiss the complaint against him
and granted the writ of preliminary injunction prayed for by private
MEMORANDUM respondent ordering petitioner to "desist from giving effect to the re-
assignment of plaintiff (herein private respondent) from his permanent station
T O: The Port Manager, IFPC in Iloilo City to the Quezon City office."4
F R O M: The General Manager Petitioner moved for a reconsideration of the above decision but it was
denied, hence, this appeal. He raises the following as the issues for our
SUBJECT: Reassignment to Central Office consideration:
Your response dated 22 March 2000 to Special Order No. 82 Series of 2000 A. Whether or not public respondent, Hon. Emilio B. Legaspi, in his
regarding your reassignment to the Central Office is noted. capacity as Presiding Judge of the Regional Trial Court of Iloilo,
Branch 22, exercised grave abuse of discretion which is tantamount
While in the Central Office, you are expected to help review and formulate to lack of or in excess of jurisdiction in deciding the case when the
credit and collection policies that would negate the accumulation of said trial court has not acquired jurisdiction over the person of the
uncollected accounts receivables, in addition to the other duties that may be petitioner and the subject matter of the case;
assigned to you in the interest of the service.
B. Whether or not the instant case should be dismissed for lack of
In this connection, you are hereby ordered to cease and desist from the cause of action on the ground of private respondent’s failure to
further performance of your duties as Port Manager of the Iloilo Fish Port exhaust administrative remedies.5
Complex effective 03 April 2000 and to assume duties and responsibilities as
stated. Petitioner contends that the court a quo did not acquire jurisdiction over his
person because the summons, together with a copy of the complaint, was
For strict compliance. not personally served on him. He argues that the summons was served by
the sheriff in the PFDA office in the Iloilo Fishing Port Complex while his
office was in Quezon City. He further contends that when Assistant
(SGD.) PABLO B. CASIMINA
Government Corporate Counsel Reynaldo R. Tansioco, Government
Corporate Attorney Ruben S. de la Paz and Government Corporate Attorney
After receiving the memorandum, private respondent immediately filed a Mariano C. Alojado appeared in court during the hearing of the motion for the
case for injunction with prayer for temporary restraining order and a writ of issuance of a preliminary injunction on April 18, 2000, they did so only to
preliminary injunction against petitioner in the RTC of Iloilo, Branch 22 inform the court that they had filed an omnibus motion to dismiss the
complaint against petitioner on the ground of lack of jurisdiction over his One thing sure is, he forwarded it to their Manila, Quezon City Central Office.
person and over the subject matter of the case. In fact, Engr. Tito Cosejo who briefly acted as the Department Manager of
the Iloilo Fishing Port Complex, appeared in Court during the summary
We find the petition meritorious. hearing on the plaintiff’s prayer for the issuance of the TRO on April 4, 2000
and informed the Court that the summons was received by their Central
Office when defendant was on his way to the province. There was therefore
A court acquires jurisdiction over a person either through a valid service of
substantial compliance of the rule on service of summons.
summons or the person’s voluntary appearance in court. A court must
necessarily have jurisdiction over a party for the latter to be bound by a court
decision.6 We disagree.
Generally accepted is the principle that no man shall be affected by any The doctrine of substantial compliance requires that for there to be a valid
proceeding to which he is a stranger, and strangers to a case are not bound service of summons, actual receipt of the summons by the defendant through
by judgment rendered by the court.7 the person served must be shown.14 We further require that where there is
substituted service, there should be a report indicating that the person who
Summons is a writ by which the defendant is notified of the action brought received the summons in the defendant’s behalf was one with whom
petitioner had a relation of confidence ensuring that the latter would receive
against him. Service of such writ is the means by which the court may
or would be notified of the summons issued in his name.15 None of these was
acquire jurisdiction over his person.8 As a rule, summons should be
observed in the case at bar.
personally served on the defendant.9 It is only when summons cannot be
served personally within a reasonable period of time that substituted service
may be resorted to.10 The Rules specify two modes for effecting substituted We cannot infer actual receipt of summons by petitioner from the fact that the
service of summons, to wit: government corporate counsel filed a motion to dismiss the case against him
and Mr. Cosejo appeared on his behalf during the summary hearing for the
issuance of a temporary restraining order to ask for the postponement of the
a) by leaving copies of the summons at the defendant’s residence
with some person of suitable age and discretion then residing case. It is well-settled that a party who makes a special appearance in court
therein, or challenging the jurisdiction of said court based on the ground of invalidity of
summons, among others, cannot be considered to have submitted himself to
the jurisdiction of the court.16 Even the assertion of affirmative defenses,
b) by leaving the copies at defendant’s office or regular place of aside from lack of jurisdiction over the person of the defendant, cannot be
business with some competent person in charge thereof.11 considered a waiver of the defense of lack of jurisdiction over such person.17
Here, petitioner never received the summons against him, whether Since the trial court did not acquire jurisdiction over the person of petitioner,
personally or in his office. The records show that petitioner’s official address he could not have been bound by the decision of respondent judge ordering
as the General Manager of the Philippine Fisheries Development Authority him to desist from transferring private respondent from his station in Iloilo
(PFDA) was in Quezon City. Yet, the summons, together with a copy of the City to the central office in Quezon City. Any decision rendered without
complaint, was served not in his Manila office but in PFDA’s Iloilo branch jurisdiction is a total nullity and may be struck down at any time, even on
office and received by the records receiving officer there. We have held that appeal, before this Court.
the failure to faithfully, strictly and fully comply with the requirements of
substituted service renders the service ineffective.12
On the issue of lack of jurisdiction over the subject matter, we agree with
petitioner that this case falls within the jurisdiction of the Civil Service
In ruling that there was a valid service of summons, respondent judge Commission (CSC) because it involves the movement of government
"presumed that the said Records Receiving Officer (was) authorized to personnel to promote order and efficiency in public service. The 1987
receive the communication or court processes addressed to the defendant."13 Constitution specifically mandates that:
He further surmised and held that:
Section 3. The Civil Service Commission, as the central personnel agency … (N)either does illegality attach to the transfer of an employee from his
of the government, shall establish a career service and adopt measures to assigned station to the main office, effected in good faith and in the interest
promote morale, efficiency, integrity, responsiveness, progressiveness, of the service pursuant to Sec. 32 of the Civil Service Act.20
and courtesy in the civil service. It shall strengthen the merits and rewards
system, integrate all human resources development programs for all levels Here, petitioner ordered the transfer of private respondent from the Iloilo
and ranks, and institutionalize a management climate conducive to public branch to the main office in Manila in the exigency of the service and in order
accountability. It shall submit to the President and the Congress an annual to
report on its personnel programs.18 (emphasis ours)
… help review and formulate credit and collection policies that would negate
Personnel actions, i.e., appointments, promotions, transfers, re-assignments, the accumulation of uncollected accounts receivables, in addition to the other
etc., are specifically provided for in Section 26 (3), Chapter 5, Book V, duties that may be assigned to (him) in the interest of the service.21
Subtitle A, of Executive Order No. 292, or the Administrative Code of 1987.
Thus,
There is nothing to show from the facts presented to us that the order
transferring private respondent to Manila was done in bad faith or motivated
Section 26. Personnel Actions. – xxx any action denoting the movement or by ill will. We thus find his refusal to transfer to the main office to be without
progress of personnel in the civil service shall be known as personnel action. basis.
Such action shall include appointment through certification, promotion,
transfer, reinstatement, re-employment, detail, reassignment, demotion, and
In any event, if private respondent believed that his transfer was unjustified,
separation. All personnel actions shall be in accordance with such rules,
his remedy was to appeal to the Civil Service Commission.22 It was therefore
standards, and regulations as may be promulgated by the Commission. wrong for the trial court to take cognizance of the case without private
respondent first exhausting the administrative remedies available to him.
xxx xxx xxx
WHEREFORE, foregoing premises considered, the petition is hereby
(3) Transfer. A transfer is a movement from one position to another which is GRANTED. The decision in Civil Case No. 00-26187, and the order denying
of equivalent rank, level, or salary without break in service involving the the motion for its reconsideration, are hereby ANNULLED AND SET ASIDE.
issuance of an appointment.
SO ORDERED.
It shall not be considered disciplinary when made in the interest of
public service, in which case, the employee concerned shall be informed of
Panganiban, (Chairman), Sandoval-Gutierrez, Carpio-Morales and Garcia,
the reason therefore. If the employee believes that there is no
JJ., concur.
justification for the transfer, he may appeal his case to the
Commission. (emphasis ours)
xxx xxx xxx
While we are aware that the power to transfer and re-assign government
employees from one office to another can be abused by some unscrupulous
government officials, not all transfers, however, amount to removal from
office.19
G.R. No. 155488 December 6, 2006 of an official whose duty is to send notices, the latter assertion is fortified by
the presumption that official duty has been regularly performed. To overcome
ERLINDA R. VELAYO-FONG, petitioner, the presumption of regularity of performance of official functions in favor of
vs. such Officer’s Return, the evidence against it must be clear and convincing.
SPOUSES RAYMOND and MARIA HEDY VELAYO, respondents. Petitioner having been unable to come forward with the requisite quantum of
proof to the contrary, the presumption of regularity of performance on the part
Remedial Law; Summons; Extrajudicial service of summons apply only where of the process server stands.
the action is in rem, that is, an action against the thing itself instead of against
the person, or in an action quasi in rem, where an individual is named as Words and Phrases; The term meritorious defense implies that the applicant
defendant and the purpose of the proceeding is to subject his interest therein has the burden of proving such a defense in order to have the judgment set
to the obligation or loan burdening the property.—Thus, extrajudicial service aside.—When a party files a motion to lift order of default, she must also
of summons apply only where the action is in rem, that is, an action against show that she has a meritorious defense or that something would be gained
the thing itself instead of against the person, or in an action quasi in rem, where by having the order of default set aside. The term meritorious defense
an individual is named as defendant and the purpose of the proceeding is to implies that the applicant has the burden of proving such a defense in order
subject his interest therein to the obligation or loan burdening the property. The to have the judgment set aside. The cases usually do not require such a
rationale for this is that in in rem and quasi in rem actions, jurisdiction over the strong showing. The test employed appears to be essentially the same as
person of the defendant is not a prerequisite to confer jurisdiction on the court used in considering summary judgment, that is, whether there is enough
provided that the court acquires jurisdiction over the res. evidence to present an issue for submission to the trier of fact, or a showing
that on the undisputed facts it is not clear that the judgment is warranted as a
Jurisdictions; Where the action is in personam, that is, one brought against a matter of law. The defendant must show that she has a meritorious defense
person on the basis of her personal liability, jurisdiction over the person of the otherwise the grant of her motion will prove to be a useless exercise. Thus,
defendant is necessary for the court to validly try and decide the case.—Where her motion must be accompanied by a statement of the evidence which she
the action is in personam, that is, one brought against a person on the basis intends to present if the motion is granted and which is such as to warrant a
of her personal liability, jurisdiction over the person of the defendant is reasonable belief that the result of the case would probably be otherwise if a
necessary for the court to validly try and decide the case. When the defendant new trial is granted.
is a non-resident, personal service of summons within the state is essential to
the acquisition of jurisdiction over the person. Summons on the defendant
must be served by handing a copy thereof to the defendant in person, or, if he PETITION for review on certiorari of the decision and resolution of the Court
refuses to receive it, by tendering it to him. This cannot be done, however, if of Appeals.
the defendant is not physically present in the country, and thus, the court
cannot acquire jurisdiction over his person and therefore cannot validly try and The facts are stated in the opinion of the Court.
decide the case against him.
Singson, Valdez & Associates for petitioner.
Virgilio B. Jara for respondents.

Process Servers; Presumption of Regularity; To overcome the presumption of
regularity of performance of official functions in favor of such Officer’s Return, DECISION
the evidence against it must be clear and convincing.—Petitioner’s bare
allegation that the statement in the “Officer’s Return that she was personally
served summons is inaccurate” is not sufficient. A process server’s certificate
of service is prima facie evidence of the facts as set out in the certificate. AUSTRIA-MARTINEZ, J.:
Between the claim of non-receipt of summons by a party against the assertion
Before the Court is a petition for review on certiorari under Rule 45 of the The Process Server submitted the Officer's Return, to wit:
1997 Rules of Civil Procedure seeking the reversal of the Decision 1 of the
Court of Appeals (CA) dated May 14, 2002 in CA-G.R. CV No. 54434 which THIS IS TO CERTIFY, that after several failed attempts to serve the
affirmed the Decision of the Regional Trial Court, Branch 105, Quezon City copy of summons and complaint issued in the above-entitled case at
(RTC) in Civil Case No. Q-93-17133; and the CA Resolution2 dated October the given addresses of defendant Erlinda Velayo as mentioned in the
1, 2002 which denied petitioner's motion for reconsideration. Order of this Court dated September 13, 1993, finally, on the 23rd
day of September, 1993, at the instance of herein plaintiffs through
The procedural antecedents and factual background of the case are as counsel, undersigned was able to SERVED (sic) personally upon
follows: defendant Erlinda Velayo the copy of summons together with the
thereto attached copy of the complaint, not at her two (2) given
On August 9, 1993, Raymond Velayo (Raymond) and his wife, Maria Hedy addresses, but at the lobby of Intercontinental Hotel, Makati, Metro
Velayo (respondents) filed a complaint for sum of money and damages with Manila, right in the presence of lobby counter personnel by the name
prayer for preliminary attachment against Erlinda R. Velayo-Fong (petitioner), of Ms. A. Zulueta, but said defendant refused to sign in receipt
Rodolfo R. Velayo, Jr. (Rodolfo Jr.) and Roberto R. Velayo (Roberto). 3 thereof.
Raymond is the half-brother of petitioner and her co-defendants.
I FURTHER CERTIFY, that on the 27th day of September, 1993,
In their Complaint, respondents allege that petitioner, a resident of 1860 copy of the same WAS SERVED personally upon the other
Alamoana Boulevard, Honolulu, Hawaii, USA, and her co-defendants, who defendant Rodolfo R. Velayo, Jr., at No. Block 57, Lots 17 and 19, G.
are residents of the Philippines, made it appear that their common father, Sanchez Street, BF Resort Village, Las Piñas, Metro Manila, but who
Rodolfo Velayo, Sr. (Rodolfo Sr.) and petitioner had filed a complaint against also refused to sign in receipt thereof.
Raymond before the National Bureau of Investigation (NBI), accusing
Raymond of the crimes of estafa and kidnapping a minor; that petitioner and WHEREFORE, original copy of the summons is now being
her co-defendants also requested that respondents be included in the Hold respectfully returned to the Honorable Court DULY SERVED.
Departure List of the Bureau of Immigration and Deportation (BID) which was
granted, thereby preventing them from leaving the country and resulting in Quezon City, Philippines, September 30, 1993.6
the cancellation of respondents' trips abroad and caused all of respondents'
business transactions and operations to be paralyzed to their damage and Upon ex-parte motions7 of respondents, the RTC in its Order dated
prejudice; that petitioner and her co-defendants also filed a petition before
November 23, 1993 and January 5, 1994, declared petitioner and her co-
the Securities and Exchange Commission (SEC) docketed as Case No. 4422
defendant in default for failure to file an answer and ordered the ex-parte
entitled "Rodolfo Velayo Sr. et al. v. Raymond Velayo et al." which caused presentation of respondents' evidence.8
respondents' funds to be frozen and paralyzed the latters' business
transactions and operations to their damage and prejudice. Since petitioner
was a non-resident and not found in the Philippines, respondents prayed for On June 15, 1994, the RTC rendered its Decision in respondents' favor, the
a writ of preliminary attachment against petitioner's properties located in the dispositive portion of which reads:
Philippines.
WHEREFORE, premises considered, judgment is hereby rendered
Before respondents' application for a writ of preliminary attachment can be ordering the defendants to pay the plaintiffs:
acted upon by the RTC, respondents filed on September 10, 1993 an Urgent
Motion praying that the summons addressed to petitioner be served to her at 1. the amount of P65,000.00 as actual damages;
Suite 201, Sunset View Towers Condominium, Roxas Boulevard, Pasay City
and at No. 5040 P. Burgos Street, T. Towers Condominium, Makati.4 In its 2. the amount of P200,000.00 as moral damages;
Order dated September 13, 1993, the RTC granted the said motion. 5
3. Attorney's fees in the amount of P5,000,00 it being a judgment by Rule 41 of the Revised Rules of Court; that, in any case, petitioner's reliance
default; and on the rule of extraterritorial service is misplaced; that the judgment by
default has long been final and executory since as early as August 1994
4. cost of suit. petitioner became aware of the judgment by default when she verified the
status of the case; that petitioner should have filed a motion for new trial or a
petition for relief from judgment and not a motion to set aside the order of
SO ORDERED.9
default since there was already a judgment by default.
On September 1, 1994, petitioner filed a Motion to Set Aside Order of Default
claiming that she was prevented from filing a responsive pleading and On May 14, 2002, the CA rendered its Decision affirming the Decision and
defending herself against respondents' complaint because of fraud, accident Order of the RTC18 ruling that it (CA) has jurisdiction since the petition raised
a question of fact, that is, whether petitioner was properly served with
or mistake; that contrary to the Officer's Return, no summons was served
summons; that the judgment by default was not yet final and executory
upon her; that she has valid and meritorious defenses to refute respondents'
against petitioner since the records reveal and the RTC Order dated January
material allegations.10 Respondents opposed said Motion.11
3, 1996 confirmed that she was not furnished or served a copy of the
decision; that petitioner was validly served with summons since the complaint
In its Order dated May 29, 1995, the RTC denied petitioner's Motion ruling for damages is an action in personam and only personal, not extraterritorial
that the presumption of regularity in the discharge of the function of the service, of summons, within the forum, is essential for the acquisition of
Process Server was not sufficiently overcome by petitioner's allegation to the jurisdiction over her person; that petitioner's allegations that
contrary; that there was no evident reason for the Process Server to make a
false narration regarding the service of summons to defaulting defendant in
the Officer's Return.12 she did not know what was being served upon her and that somebody just
hurled papers at her were not substantiated by competent evidence and
cannot overcome the presumption of regularity of performance of official
On September 4, 1995, respondents filed a Motion for Execution. 13 On functions in favor of the Officer's Return.
September 22, 1995, petitioner filed an Opposition to Motion for Execution
contending that she has not yet received the Decision and it is not yet final
and executory as against her.14 Petitioner filed a Motion for Reconsideration19 but the CA denied it in its
Resolution dated October 1, 2002.20
In its Order dated January 3, 1996, the RTC, finding that the Decision dated
Hence, the present petition anchored on the following grounds:
June 15, 1994 and the Order dated May 29, 1995 were indeed not furnished
or served upon petitioner, denied respondents' motion for execution against
petitioner and ordered that petitioner be furnished the said Decision and I
Order.15
THE COURT OF APPEALS PATENTLY ERRED IN NOT RULING
On March 28, 1996, the RTC issued an Order directing the issuance of the THAT PETITIONER WAS NOT VALIDLY SERVED WITH
writ of execution against petitioner's co-defendant.16 SUMMONS.
On May 23, 1996, petitioner, through her counsel, finally received the II
Decision dated June 15, 1994 and the Order dated May 29, 1995. 17
THE COURT OF APPEALS PATENTLY ERRED IN NOT RULING
Petitioner filed an appeal with the CA questioning the propriety and validity of THAT PETITIONER WAS PREVENTED FROM FILING
the service of summons made upon her. Respondents opposed the appeal, RESPONSIVE PLEADING AND DEFENDING AGAINST
arguing that the petition should be dismissed since it raised pure questions of RESPONDENTS' COMPLAINT BECAUSE OF FRAUD, ACCIDENT
law, which is not within the CA's jurisdiction to resolve under Section 2 (c) of AND MISTAKE.21
Parties filed their respective Memoranda on September 8 and 9, 2005. The first mode of appeal, governed by Rule 41, is taken to the Court of
Appeals on questions of fact or mixed questions of fact and law. The second
Petitioner argues that summons should have been served through mode of appeal, covered by Rule 42, is brought to the Court of Appeals on
extraterritorial service since she is a non-resident; that the RTC should have questions of fact, of law, or mixed questions of fact and law. The third mode
lifted the order of default since a default judgment is frowned upon and of appeal, provided for by Rule 45, is elevated to the Supreme Court only on
parties should be given their day in court; that she was prevented from filing questions of law.
a responsive pleading and defending against respondents' complaint
A question of law arises when there is doubt as to what the law is on a
through fraud, accident or mistake considering that the statement in the certain state of facts, while there is a question of fact when the doubt arises
Officer's Return that she was personally served summons is inaccurate; that as to the truth or falsity of the alleged facts.24 For a question to be one of law,
the same must not involve an examination of the probative value of the
evidence presented by the litigants or any of them.25 The resolution of the
she does not remember having been served with summons during the said
issue must rest solely on what the law provides on the given set of
date but remembers that a man hurled some papers at her while she was
circumstances. Once it is clear that the issue invites a review of the evidence
entering the elevator and, not knowing what the papers were all about, she
threw back the papers to the man before the elevator closed; that she has a presented, the question posed is one of fact.26 Thus, the test of whether a
valid and meritorious defense to refute the material allegations of question is one of law or of fact is not the appellation given to such question
by the party raising the same; rather, it is whether the appellate court can
respondents' complaint.
determine the issue raised without reviewing or evaluating the evidence, in

On the other hand, respondents contend that petitioner was validly served
with summons since the rules do not require that service be made upon her which case, it is a question of law; otherwise it is a question of fact.27
at her place of residence as alleged in the complaint or stated in the
summons; that extraterritorial service applies only when the defendant does Respondents' claim that the issues raised by petitioner before the CA are
not reside and is not found in the Philippines; that petitioner erred in filing a pure legal questions is not tenable.
motion to set aside the order of default at the time when a default judgment
was already rendered by the RTC since the proper remedy is a motion for A scrutiny of petitioner's petition before the CA reveals that it raised two
new trial or a petition for relief from judgment under Rule 38; that the issue issues: (a) the propriety of the service effected on a non-resident; and (b) the
on summons is a pure question of law which the CA does not have validity of the service made upon her. The first is a question of law. There is
jurisdiction to resolve under Section 2 (c) of Rule 41 of the 1997 Rules of indeed a question as to what and how the law should be applied. The second
Civil Procedure.22 is a question of fact. The resolution of said issue entails a review of the
factual circumstances that led the RTC to conclude that service was validly
The Court finds it proper to resolve first whether the issue involved in the effected upon petitioner. Therefore, petitioner properly brought the case to
appeal filed with the CA is a question of law and therefore not within the the CA via the first mode of appeal under the aegis of Rule 41.
jurisdiction of the CA to resolve.
How may service of summons be effected on a non-resident?
In Murillo v. Consul,23 which was later adopted by the 1997 Rules of Civil
Procedure, the Court clarified the three modes of appeal from decisions of Section 17,28 Rule 14 of the Rules of Court provides:
the RTC, namely: (a) ordinary appeal or appeal by writ of error, where
judgment was rendered in a civil or criminal action by the RTC in the exercise Section 17. Extraterritorial service – When the defendant does not
of original jurisdiction; (b) petition for review, where judgment was reside and is not found in the Philippines and the action affects the
personal status of the plaintiff or relates to, or the subject of which, is
rendered by the RTC in the exercise of appellate jurisdiction; and (c) petition property within the Philippines, in which the defendant has or claims
for review to the Supreme Court. a lien or interest, actual or contingent, or in which relief demanded
consists, wholly or in part, in excluding the defendant from any
interest therein, or the property of the defendant has been attached thus, the court cannot acquire jurisdiction over his person and therefore
in the Philippines, service may, by leave of court, be effected out of cannot validly try and decide the case against him.32
the Philippines by personal service as under section 7; or by
publication in a newspaper of general circulation in such places and In the present case, respondents' cause of action in Civil Case No. Q-93-
for such time as the court may order, in which case a copy of the 17133 is anchored on the claim that petitioner and her co-defendants
summons and order of the court shall be sent by registered mail to maliciously instituted a criminal complaint before the NBI and a petition
the last known address of the defendant, or in any other manner the before the SEC which prevented the respondents from leaving the country
court may deem sufficient. Any order granting such leave shall and paralyzed the latters' business transactions. Respondents pray that
specify a reasonable time, which shall not be less than sixty (60) actual and moral damages, plus attorney's fees, be awarded in their favor.
days after notice, within which the defendant must answer. The action instituted by respondents affect the parties alone, not the whole
world. Any judgment therein is binding only upon the parties properly
Under this provision, when the defendant is a nonresident and he is not impleaded.33 Thus, it is an action in personam. As such, personal service of
found in the country, summons may be served extraterritorially. There are summons upon the defendants is essential in order for the court to acquire
only four instances when extraterritorial service of summons is proper, jurisdiction over their persons.34
namely: (a) when the action affects the personal status of the plaintiffs; (b)
when the action relates to, or the subject of which is property, within the The Court notes that the complaint filed with the RTC alleged that petitioner
Philippines, in which the defendant claims a lien or interest, actual or is a non-resident who is not found in the Philippines for which reason
contingent; (c) when the relief demanded in such action consists, wholly or in respondents initially prayed that a writ of preliminary attachment be issued
part, in excluding the defendant from any interest in property located in the against her properties within the Philippines to confer jurisdiction upon the
Philippines; and (d) when the defendant's property has been attached within RTC. However, respondents did not pursue its application for said writ when
the Philippines. In these instances, service of summons may be effected by petitioner was subsequently found physically present in the Philippines and
(a) personal service out of the country, with leave of court; (b) publication, personal service of summons was effected on her.
also with leave of court; or (c) any other manner the court may deem
sufficient.
Was there a valid service of summons on petitioner? The answer is in the
affirmative.
Thus, extrajudicial service of summons apply only where the action is in rem,
that is, an action against the thing itself instead of against the person, or in
Petitioner's bare allegation that the statement in the "Officer's Return that she
an action quasi in rem, where an individual is named as defendant and the
was personally served summons is inaccurate" is not sufficient. A process
purpose of the proceeding is to subject his interest therein to the obligation or server's certificate of service is prima facie evidence of the facts as set out in
loan burdening the property. The rationale for this is that in in rem and quasi
the certificate.35 Between the claim of non-receipt of summons by a party
in rem actions, jurisdiction over the person of the defendant is
against the assertion of an official whose duty is to send notices, the latter
assertion is fortified by the presumption that official duty has been regularly
not a prerequisite to confer jurisdiction on the court provided that the court performed.36 To overcome the presumption of regularity of performance of
acquires jurisdiction over the res.29 official functions in favor of such Officer's Return, the evidence against it
must be clear and convincing. Petitioner having been unable to come forward
Where the action is in personam, that is, one brought against a person on the with the requisite quantum of proof to the contrary, the presumption of
basis of her personal liability, jurisdiction over the person of the defendant is regularity of performance on the part of the process server stands.
necessary for the court to validly try and decide the case. When the
defendant is a non-resident, personal service of summons within the state is The Court need not make a long discussion on the propriety of the remedy
essential to the acquisition of jurisdiction over the person.30 Summons on the adopted by petitioner in the RTC of filing a motion to set aside the order of
defendant must be served by handing a copy thereof to the defendant in default at a time when there was already a judgment by default. As aptly held
person, or, if he refuses to receive it, by tendering it to him.31 This cannot be by the CA, since petitioner was not furnished or served a copy of the
done, however, if the defendant is not physically present in the country, and judgment of default, there was no notice yet of such judgment as against her.
Thus, the remedy of filing a motion to set aside the order of default in the Thus, since petitioner failed to show that her failure file an answer was not
RTC was proper. due to fraud, accident, mistake, or excusable neglect; and that she had a
valid and meritorious defense, there is no merit to her prayer for a liberal
Petitioner's argument that the RTC should have set aside the order of default interpretation of procedural rules.
and applied the liberal interpretation of rules with a view of affording parties
their day in court is not tenable. While indeed default orders are not viewed WHEREFORE, the instant petition is DENIED. The assailed Decision and
with favor, the party seeking to have the order of default lifted must Resolution of the Court of Appeals are AFFIRMED.
first show that her failure to file an answer or any other responsive pleading Costs against petitioner.
was due to fraud, accident, mistake, or excusable neglect and then she must
show that she has a valid and meritorious defense.37 SO ORDERED.
In this case, petitioner failed to show that her failure to file an answer was Panganiban, C.J. (Chairperson), Ynares-Santiago, Callejo, Sr., and Chico-
due to fraud, accident, mistake or excusable neglect. Except for her bare Nazario, JJ., concur.
unsupported allegation that the summons were only thrown to her at the
elevator, petitioner did not present any competent evidence to justify the
setting aside of the order of default.
Moreover, when a party files a motion to lift order of default, she must also
show that she has a meritorious defense or that something would be gained
by having the order of default set aside.38 The term meritorious defense
implies that the applicant has the burden of proving such a defense in order
to have the judgment set aside. The cases usually do not require such a
strong showing. The test employed appears to be essentially the same as
used in considering summary judgment, that is, whether there is enough
evidence to present an issue for submission to the trier of fact, or a showing
that on the undisputed facts it is not clear that the judgment is warranted as a
matter of law. 39 The defendant must show that she has a meritorious
defense otherwise the grant of her motion will prove to be a useless exercise.
Thus, her motion must be accompanied by a statement of the evidence
which she intends to present if the motion is granted and which is such as to
warrant a reasonable belief that the result of the case would probably be
otherwise if a new trial is granted.40
In the present case, petitioner contented herself with stating in her affidavit of
merit that the cases against respondent Raymond were filed at the instance
of her father.41 Such allegation is a conclusion rather than a statement of
facts showing a meritorious defense. The affidavit failed to controvert the
facts alleged by the respondents. Petitioner has not shown
that she has a meritorious defense.

G.R. No. 169129 March 28, 2007 involved herein actually reside in the same city (Pasig City) and the dispute
between them involves a real property, hence, the said dispute should have
SPS. VIRGILIO F. SANTOS & ESPERANZA LATI SANTOS, been brought in the city in which the real property, subject matter of the
SPS.VICTORINO F. SANTOS, & LAGRIMAS SANTOS, ERNESTO F. controversy, is located, which happens to be the same city where the
SANTOS, and TADEO F. SANTOS, Petitioners, contending parties reside. In the event that respondents Spouses Lumbao
vs. failed to comply with the said condition precedent, their Complaint for
SPS. JOSE LUMBAO and PROSERFINA LUMBAO, Respondents. Reconveyance with Damages can be dismissed. In this case, however,
respondents Spouses Lumbao’s non-compliance with the aforesaid condition
Appeals; In the exercise of the Supreme Court’s power of review, the court is precedent cannot be considered fatal. Although petitioners alleged in their
not a trier of facts and does not normally undertake the re-examination of the answer that the Complaint for Reconveyance with Damages filed by
evidence presented by the contending parties during the trial of the case respondents spouses Lumbao should be dismissed for their failure to comply
considering that the findings of fact of the Court of Appeals are conclusive and with the condition precedent, which in effect, made the complaint prematurely
binding on the Court; Exceptions.—It is well-settled that in the exercise of the instituted and the trial court acquired no jurisdiction to hear the case, yet, they
Supreme Court’s power of review, the court is not a trier of facts and does not did not file a Motion to Dismiss the said complaint.
normally undertake the re-examination of the evidence presented by the
contending parties during the trial of the case considering that the findings of Same; Same; Same; Non-referral of a case for barangay conciliation when so
fact of the Court of Appeals are conclusive and binding on the Court. But, the required under the law is not jurisdictional in nature and may therefore be
rule is not without exceptions. There are several recognized exceptions in deemed waived if not raised seasonably in a motion to dismiss.—Emphasis
which factual issues may be resolved by this Court. One of these exceptions must be given to the fact that the petitioners could have prevented the trial
is when the findings of the appellate court are contrary to those of the trial court from exercising jurisdiction over the case had they filed a Motion to
court. This exception is present in the case at bar. Dismiss. However, instead of doing so, they invoked the very same jurisdiction
by filing an answer seeking an affirmative relief from it. Worse, petitioners
Actions; Jurisdictions; Katarungang Pambarangay Law; Barangay actively participated in the trial of the case by presenting their own witness and
Conciliation; While non-compliance with the condition that there must first be by cross-examining the witnesses presented by the respondents Spouses
proper recourse to barangay conciliation before filing of complaint in court or Lumbao. It is elementary that the active participation of a party in a case
any government offices could affect the sufficiency of the plaintiff’s cause of pending against him before a court is tantamount to recognition of that court’s
action and make his complaint vulnerable to dismissal on ground of lack of jurisdiction and a willingness to abide by the resolution of the case which will
cause of action or prematurity, the same would not prevent a court of bar said party from later on impugning the court’s jurisdiction. It is also well-
competent jurisdiction from exercising its power of adjudication over the case settled that the non-referral of a case for barangay conciliation when so
before it, where the defendants failed to object to such exercise of required under the law is not jurisdictional in nature and may therefore be
jurisdiction.—Section 408 of the aforesaid law and Administrative Circular No. deemed waived if not raised seasonably in a motion to dismiss. Hence, herein
14-93 provide that all disputes between parties actually residing in the same petitioners can no longer raise the defense of non-compliance with the
city or municipality are subject to barangay conciliation. A prior recourse barangay conciliation proceedings to seek the dismissal of the complaint filed
thereto is a pre-condition before filing a complaint in court or any government by the respondents Spouses Lumbao, because they already waived the said
offices. Non-compliance with the said condition precedent could affect the defense when they failed to file a Motion to Dismiss.
sufficiency of the plaintiff’s cause of action and make his complaint vulnerable
to dismissal on ground of lack of cause of action or prematurity; but the same Same; Pleadings and Practice; An answer is a mere statement of fact which
would not prevent a court of competent jurisdiction from exercising its power the party filing it expects to prove, but it is not evidence; In spite of the presence
of adjudication over the case before it, where the defendants failed to object of judicial admissions in a party’s pleading, the trial court is still given leeway
to such exercise of jurisdiction. While it is true that the present case should to consider other evidence presented.—Facts alleged in a party’s pleading are
first be referred to the Barangay Lupon for conciliation because the parties deemed admissions of that party and are binding upon him, but this is not an
absolute and inflexible rule. An answer is a mere statement of fact which the
party filing it expects to prove, but it is not evidence. And in spite of the in the “Bilihan ng Lupa, dated 17 August 1979 and 9 January 1981” because
presence of judicial admissions in a party’s pleading, the trial court is still given the exact metes and bounds of the subject property sold to respondents
leeway to consider other evidence presented. However, in the case at bar, as Spouses Lumbao could not be possibly determined at that time. Nevertheless,
the Court of Appeals mentioned in its Decision, “[herein petitioners] had not that does not make the contract of sale between Rita and respondents
adduced any other evidence to override the admission made in their [A]nswer Spouses Lumbao invalid because both the law and jurisprudence have
that [petitioners Virgilio and Tadeo] actually signed the [Bilihan ng Lupa dated categorically held that even while an estate remains undivided, co-owners
17 August 1979] except that they were just misled as to the purpose of the have each full ownership of their respective aliquots or undivided shares and
document, x x x.” Virgilio’s answers were unsure and quibbled. Hence, the may therefore alienate, assign or mortgage them. The co-owner, however, has
general rule that the admissions made by a party in a pleading are binding and no right to sell or alienate a specific or determinate part of the thing owned in
conclusive upon him applies in this case. common, because such right over the thing is represented by an aliquot or
ideal portion without any physical division. In any case, the mere fact that the
Sales; Notarial Law; A document acknowledged before a notary public is a deed purports to transfer a concrete portion does not per se render the sale
public document that enjoys the presumption of regularity—it is a prima facie void. The sale is valid, but only with respect to the aliquot share of the selling
evidence of the truth of the facts stated therein and a conclusive presumption co-owner. Furthermore, the sale is subject to the results of the partition upon
of its existence and due execution; One who denies the due execution of a the termination of the co-ownership.
deed where one’s signature appears has the burden of proving that contrary
to the recital in the jurat, one never appeared before the notary public and Same; Actions; Reconveyance; Prescription; Land Titles; When the plaintiff is
acknowledged the deed to be a voluntary act.—Both “Bilihan ng Lupa” in possession of the land to be reconveyed, prescription cannot set in.—The
documents dated 17 August 1979 and 9 January 1981 were duly notarized defense of prescription of action and laches is likewise unjustifiable. In an
before a notary public. It is well-settled that a document acknowledged before action for reconveyance, the decree of registration is respected as
a notary public is a public document that enjoys the presumption of regularity. incontrovertible. What is sought instead is the transfer of the property or its title
It is a prima facie evidence of the truth of the facts stated therein and a which has been wrongfully or erroneously registered in another person’s name
conclusive presumption of its existence and due execution. To overcome this to its rightful or legal owner, or to the one with a better right. It is, indeed, true
presumption, there must be presented evidence that is clear and convincing. that the right to seek reconveyance of registered property is not absolute
Absent such evidence, the presumption must be upheld. In addition, one who because it is subject to extinctive prescription. However, when the plaintiff is
denies the due execution of a deed where one’s signature appears has the in possession of the land to be reconveyed, prescription cannot set in. Such
burden of proving that contrary to the recital in the jurat, one never appeared an exception is based on the theory that registration proceedings could not be
before the notary public and acknowledged the deed to be a voluntary act. used as a shield for fraud or for enriching a person at the expense of another.
Nonetheless, in the present case petitioners’ denials without clear and
convincing evidence to support their claim of fraud and falsity were not Same; Land Titles; Registration is not a requirement for validity of the contract
sufficient to overthrow the above-mentioned presumption; hence, the as between the parties, for the effect of registration serves chiefly to bind third
authenticity, due execution and the truth of the facts stated in the aforesaid persons.—This Court holds that the “Bilihan ng Lupa” documents dated 17
“Bilihan ng Lupa” are upheld. August 1979 and 9 January 1981 are valid and enforceable and can be made
the basis of the respondents Spouses Lumbao’s action for reconveyance. The
Same; Co-Ownership; Even while an estate remains undivided, co-owners failure of respondents Spouses Lumbao to have the said documents registered
have each full ownership of their respective aliquots or undivided shares and does not affect its validity and enforceability. It must be remembered that
may therefore alienate, assign or mortgage them, and, in any case, the mere registration is not a requirement for validity of the contract as between the
fact that the deed purports to transfer a concrete portion does not per se render parties, for the effect of registration serves chiefly to bind third persons. The
the sale void.—It is noteworthy that at the time of the execution of the principal purpose of registration is merely to notify other persons not parties to
documents denominated as “Bilihan ng Lupa,” the entire property owned by a contract that a transaction involving the property had been entered into.
Maria, the mother of Rita, was not yet divided among her and her co-heirs and Where the party has knowledge of a prior existing interest which is
so the description of the entire estate is the only description that can be placed unregistered at the time he acquired a right to the same land, his knowledge
of that prior unregistered interest has the effect of registration as to him. Hence, Before this Court is a Petition for Review on Certiorari under Rule 45 of the
the “Bilihan ng Lupa” documents dated 17 August 1979 and 9 January 1981, 1997 Revised Rules of Civil Procedure seeking to annul and set aside the
being valid and enforceable, herein petitioners are bound to comply with their Decision1 and Resolution2 of the Court of Appeals in CA-G.R. CV No. 60450
provisions. In short, such documents are absolutely valid between and among entitled, Spouses Jose Lumbao and Proserfina Lumbao v. Spouses Virgilio
the parties thereto. F. Santos and Esperanza Lati, Spouses Victorino F. Santos and Lagrimas F.
Santos, Ernesto F. Santos and Tadeo F. Santos, dated 8 June 2005 and 29
Succession; Heirs are bound by contracts entered into by their predecessors- July 2005, respectively, which granted the appeal filed by herein respondents
in-interest—whatever rights and obligations of the decedent have over a Spouses Jose Lumbao and Proserfina Lumbao (Spouses Lumbao) and
property are transmitted to the heirs by way of succession, a mode of acquiring ordered herein petitioners Spouses Virgilio F. Santos and Esperanza Lati,
the property, rights and obligations of the decedent to the extent of the value Spouses Victorino F. Santos and Lagrimas F. Santos, Ernesto F. Santos and
of the inheritance of the heirs.—The general rule that heirs are bound by Tadeo F. Santos to reconvey to respondents Spouses Lumbao the subject
property and to pay the latter attorney’s fees and litigation expenses, thus,
contracts entered into by their predecessors-in-interest applies in the present
reversing the Decision3 of the Regional Trial Court (RTC) of Pasig City, dated
case. Article 1311 of the NCC is the basis of this rule. It is clear from the said
17 June 1998 which dismissed the Complaint for Reconveyance with
provision that whatever rights and obligations the decedent have over the Damages filed by respondents Spouses Lumbao for lack of merit.
property were transmitted to the heirs by way of succession, a mode of
acquiring the property, rights and obligations of the decedent to the extent of Herein petitioners Virgilio, Victorino, Ernesto and Tadeo, all surnamed
the value of the inheritance of the heirs. Thus, the heirs cannot escape the Santos, are the legitimate and surviving heirs of the late Rita Catoc Santos
legal consequence of a transaction entered into by their predecessor-in- (Rita), who died on 20 October 1985. The other petitioners Esperanza Lati
interest because they have inherited the property subject to the liability and Lagrimas Santos are the daughters-in-law of Rita.
affecting their common ancestor. Being heirs, there is privity of interest
between them and their deceased mother. They only succeed to what rights Herein respondents Spouses Jose Lumbao and Proserfina Lumbao are the
their mother had and what is valid and binding against her is also valid and alleged owners of the 107-square meter lot (subject property), which they
binding as against them. The death of a party does not excuse purportedly bought from Rita during her lifetime.
nonperformance of a contract which involves a property right and the rights
and obligations thereunder pass to the personal representatives of the The facts of the present case are as follows:
deceased. Similarly, nonperformance is not excused by the death of the party
when the other party has a property interest in the subject matter of the On two separate occasions during her lifetime, Rita sold to respondents
contract. Spouses Lumbao the subject property which is a part of her share in the
estate of her deceased mother, Maria Catoc (Maria), who died intestate on
PETITION for review on certiorari of the decision and resolution of the Court 19 September 1978. On the first occasion, Rita sold 100 square meters of
of Appeals. her inchoate share in her mother’s estate through a document denominated
as "Bilihan ng Lupa," dated 17 August 1979.4 Respondents Spouses Lumbao
claimed the execution of the aforesaid document was witnessed by
Porfirio Gabiola, Jr. for petitioners. petitioners Virgilio and Tadeo, as shown by their signatures affixed therein.
On the second occasion, an additional seven square meters was added to
the land as evidenced by a document also denominated as "Bilihan ng
Domingo E. Chiu, Sr. for respondents Lupa," dated 9 January 1981.5
DECISION After acquiring the subject property, respondents Spouses Lumbao took
actual possession thereof and erected thereon a house which they have
CHICO-NAZARIO, J.: been occupying as exclusive owners up to the present. As the exclusive
owners of the subject property, respondents Spouses Lumbao made several
verbal demands upon Rita, during her lifetime, and thereafter upon herein During the trial, respondents Spouses Lumbao presented Proserfina Lumbao
petitioners, for them to execute the necessary documents to effect the and Carolina Morales as their witnesses, while the petitioners presented only
issuance of a separate title in favor of respondents Spouses Lumbao insofar the testimony of petitioner Virgilio.
as the subject property is concerned. Respondents Spouses Lumbao alleged
that prior to her death, Rita informed respondent Proserfina Lumbao she The trial court rendered a Decision on 17 June 1998, the dispositive portion
could not deliver the title to the subject property because the entire property of which reads as follows:
inherited by her and her co-heirs from Maria had not yet been partitioned.
Premises considered, the instant complaint is hereby denied for lack of merit.
On 2 May 1986, the Spouses Lumbao claimed that petitioners, acting
fraudulently and in conspiracy with one another, executed a Deed of Considering that [petitioners] have incurred expenses in order to protect their
Extrajudicial Settlement,6 adjudicating and partitioning among themselves
interest, [respondents spouses Lumbao] are hereby directed to pay
and the other heirs, the estate left by Maria, which included the subject
[petitioners], to wit: 1) the amount of ₱30,000.00 as attorney’s fees and
property already sold to respondents Spouses Lumbao and now covered by
litigation expenses, and 2) costs of the suit.11
TCT No. 817297 of the Registry of Deeds of Pasig City.
Aggrieved, respondents Spouses Lumbao appealed to the Court of Appeals.
On 15 June 1992, respondents Spouses Lumbao, through counsel, sent a
On 8 June 2005, the appellate court rendered a Decision, thus:
formal demand letter8 to petitioners but despite receipt of such demand letter,
petitioners still failed and refused to reconvey the subject property to the
respondents Spouses Lumbao. Consequently, the latter filed a Complaint for WHEREFORE, premises considered, the present appeal is hereby
Reconveyance with Damages9 before the RTC of Pasig City. GRANTED. The appealed Decision dated June 17, 1998 of the Regional
Trial Court of Pasig City, Branch 69 in Civil Case No. 62175 is hereby
REVERSED and SET ASIDE. A new judgment is hereby entered ordering
Petitioners filed their Answer denying the allegations that the subject property
[petitioners] to reconvey 107 square meters of the subject [property] covered
had been sold to the respondents Spouses Lumbao. They likewise denied
by TCT No. PT-81729 of the Registry of Deeds of Pasig City, Metro Manila,
that the Deed of Extrajudicial Settlement had been fraudulently executed and to pay to [respondents spouses Lumbao] the sum of ₱30,000.00 for
because the same was duly published as required by law. On the contrary, attorney’s fees and litigation expenses.
they prayed for the dismissal of the Complaint for lack of cause of action
because respondents Spouses Lumbao failed to comply with the Revised
Katarungang Pambarangay Law under Republic Act No. 7160, otherwise No pronouncement as to costs.12
known as the Local Government Code of 1991, which repealed Presidential
Decree No. 150810 requiring first resort to barangay conciliation. Dissatisfied, petitioners filed a Motion for Reconsideration of the aforesaid
Decision but it was denied in the Resolution of the appellate court dated 29
Respondents Spouses Lumbao, with leave of court, amended their July 2005 for lack of merit.
Complaint because they discovered that on 16 February 1990, without their
knowledge, petitioners executed a Deed of Real Estate Mortgage in favor of Hence, this Petition.
Julieta S. Esplana for the sum of ₱30,000.00. The said Deed of Real Estate
Mortgage was annotated at the back of TCT No. PT-81729 on 26 April 1991. The grounds relied upon by the petitioners are the following:
Also, in answer to the allegation of the petitioners that they failed to comply
with the mandate of the Revised Katarungang Pambarangay Law, I. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN
respondents Spouses Lumbao said that the Complaint was filed directly in REVERSING THE DECISION OF THE TRIAL COURT, THEREBY
court in order that prescription or the Statute of Limitations may not set in. CREATING A VARIANCE ON THE FINDINGS OF FACTS OF TWO
COURTS.
II. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN their rights for an unreasonable length of time. Since respondents Spouses
ORDERING THE PETITIONERS TO RECONVEY THE SUBJECT Lumbao had slept on their rights for a period of more than 12 years reckoned
[PROPERTY] TO THE RESPONDENTS [SPOUSES LUMBAO] AND IN NOT from the date of execution of the second "Bilihan ng Lupa," it would be unjust
RULING THAT THEY ARE GUILTY OF LACHES, HENCE THEY CANNOT and unfair to the petitioners if the respondents will be allowed to recover the
RECOVER THE LOT ALLEGEDLY SOLD TO THEM. subject property.
III. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN Petitioners allege they are in good faith in executing the Deed of Extrajudicial
NOT FINDING HEREIN PETITIONER[S] TO BE IN GOOD FAITH IN Settlement because even respondents Spouses Lumbao’s witness, Carolina
EXECUTING THE "DEED OF EXTRAJUDICIAL SETTLEMENT" DATED [2 Morales, testified that neither petitioner Virgilio nor petitioner Tadeo was
MAY 1986]. present during the execution of the "Bilihan ng Lupa," dated 17 August 1979
and 9 January 1981. Petitioners affirm that the Deed of Extrajudicial
IV. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN Settlement was published in a newspaper of general circulation to give notice
NOT FINDING THAT PETITIONERS ARE NOT LEGALLY BOUND TO to all creditors of the estate subject of partition to contest the same within the
COMPLY WITH THE SUPPOSED BILIHAN NG LUPA DATED [17 AUGUST period prescribed by law. Since no claimant appeared to interpose a claim
1979] AND [9 JANUARY 1981] THAT WERE SUPPOSEDLY EXECUTED within the period allowed by law, a title to the subject property was then
BY THE LATE RITA CATOC. issued in favor of the petitioners; hence, they are considered as holders in
good faith and therefore cannot be barred from entering into any subsequent
transactions involving the subject property.
V. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN
NOT FINDING THAT RESPONDENTS [SPOUSES LUMBAO’S] ACTION
FOR RECONVEYANCE WITH DAMAGES CANNOT BE SUPPORTED Petitioners also contend that they are not bound by the documents
WITH AN UNENFORCEABLE DOCUMENTS, SUCH AS THE BILIHAN NG denominated as "Bilihan ng Lupa" because the same were null and void for
LUPA DATED [17 AUGUST 1979] AND [9 JANUARY 1981]. the following reasons: 1) for being falsified documents because one of those
documents made it appear that petitioners Virgilio and Tadeo were witnesses
to its execution and that they appeared personally before the notary public,
VI. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN
NOT FINDING THAT RESPONDENTS [SPOUSES LUMBAO’S] when in truth and in fact they did not; 2) the identities of the properties in the
COMPLAINT FOR RECONVEYANCE IS DISMISSABLE (SIC) FOR NON "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981 in relation to
the subject property in litigation were not established by the evidence
COMPLIANCE OF THE MANDATE OF [P.D. NO.] 1508, AS AMENDED BY
presented by the respondents Spouses Lumbao; 3) the right of the
Republic Act No. 7160.
respondents Spouses Lumbao to lay their claim over the subject property
had already been barred through estoppel by laches; and 4) the respondents
VII. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN Spouses Lumbao’s claim over the subject property had already prescribed.
NOT FINDING THAT RESPONDENTS [SPOUSES LUMBAO] SHOULD BE
HELD LIABLE FOR PETITIONERS’ CLAIM FOR DAMAGES AND
Finally, petitioners claim that the Complaint for Reconveyance with Damages
ATTORNEY[‘]S FEES.
filed by respondents Spouses Lumbao was dismissible because they failed
to comply with the mandate of Presidential Decree No. 1508, as amended by
Petitioners ask this Court to scrutinize the evidence presented in this case, Republic Act No. 7160, particularly Section 412 of Republic Act No. 7160.
because they claim that the factual findings of the trial court and the
appellate court are conflicting. They allege that the findings of fact by the trial
Given the foregoing, the issues presented by the petitioners may be restated
court revealed that petitioners Virgilio and Tadeo did not witness the
as follows:
execution of the documents known as "Bilihan ng Lupa"; hence, this finding
runs counter to the conclusion made by the appellate court. And even
assuming that they were witnesses to the aforesaid documents, still, I. Whether or not the Complaint for Reconveyance with Damages
respondents Spouses Lumbao were not entitled to the reconveyance of the filed by respondents spouses Lumbao is dismissible for their failure
subject property because they were guilty of laches for their failure to assert
to comply with the mandate of the Revised Katarungang the same city (Pasig City) and the dispute between them involves a real
Pambarangay Law under R.A. No. 7160. property, hence, the said dispute should have been brought in the city in
which the real property, subject matter of the controversy, is located, which
II. Whether or not the documents known as "Bilihan ng Lupa" are happens to be the same city where the contending parties reside. In the
valid and enforceable, thus, they can be the bases of the event that respondents Spouses Lumbao failed to comply with the said
respondents spouses Lumbao’s action for reconveyance with condition precedent, their Complaint for Reconveyance with Damages can
damages. be dismissed. In this case, however, respondents Spouses Lumbao’s non-
compliance with the aforesaid condition precedent cannot be considered
fatal. Although petitioners alleged in their answer that the Complaint for
III. Whether or not herein petitioners are legally bound to comply with
the "Bilihan ng Lupa" dated 17 August 1979 and 9 January 1981 and Reconveyance with Damages filed by respondents spouses Lumbao should
consequently, reconvey the subject property to herein respondents be dismissed for their failure to comply with the condition precedent, which in
effect, made the complaint prematurely instituted and the trial court acquired
spouses Lumbao.
no jurisdiction to hear the case, yet, they did not file a Motion to Dismiss the
said complaint.
It is well-settled that in the exercise of the Supreme Court’s power of review,
the court is not a trier of facts and does not normally undertake the re-
examination of the evidence presented by the contending parties during the Emphasis must be given to the fact that the petitioners could have prevented
the trial court from exercising jurisdiction over the case had they filed a
trial of the case considering that the findings of fact of the Court of Appeals
Motion to Dismiss. However, instead of doing so, they invoked the very same
are conclusive and binding on the Court.13 But, the rule is not without
jurisdiction by filing an answer seeking an affirmative relief from it. Worse,
exceptions. There are several recognized exceptions 14 in which factual
issues may be resolved by this Court. One of these exceptions is when the petitioners actively participated in the trial of the case by presenting their own
findings of the appellate court are contrary to those of the trial court. This witness and by cross-examining the witnesses presented by the respondents
Spouses Lumbao. It is elementary that the active participation of a party in a
exception is present in the case at bar.
case pending against him before a court is tantamount to recognition of that
court’s jurisdiction and a willingness to abide by the resolution of the case
Going to the first issue presented in this case, it is the argument of the which will bar said party from later on impugning the court’s jurisdiction.17 It is
petitioners that the Complaint for Reconveyance with Damages filed by also well-settled that the non-referral of a case for barangay conciliation
respondents Spouses Lumbao should be dismissed for failure to comply with when so required under the law is not jurisdictional in nature and may
the barangay conciliation proceedings as mandated by the Revised therefore be deemed waived if not raised seasonably in a motion to
Katarungang Pambarangay Law under Republic Act No. 7160. This dismiss.18 Hence, herein petitioners can no longer raise the defense of non-
argument cannot be sustained. compliance with the barangay conciliation proceedings to seek the dismissal
of the complaint filed by the respondents Spouses Lumbao, because they
Section 408 of the aforesaid law and Administrative Circular No. 14-9315 already waived the said defense when they failed to file a Motion to Dismiss.
provide that all disputes between parties actually residing in the same city or
municipality are subject to barangay conciliation. A prior recourse thereto is a As regards the second issue, petitioners maintain that the "Bilihan ng Lupa,"
pre-condition before filing a complaint in court or any government offices. dated 17 August 1979 and 9 January 1981 are null and void for being
Non-compliance with the said condition precedent could affect the sufficiency falsified documents as it is made to appear that petitioners Virgilio and Tadeo
of the plaintiff’s cause of action and make his complaint vulnerable to were present in the execution of the said documents and that the identities of
dismissal on ground of lack of cause of action or prematurity; but the same the properties in those documents in relation to the subject property has not
would not prevent a court of competent jurisdiction from exercising its power been established by the evidence of the respondents Spouses Lumbao.
of adjudication over the case before it, where the defendants failed to object Petitioners also claim that the enforceability of those documents is barred by
to such exercise of jurisdiction.16 prescription of action and laches.
While it is true that the present case should first be referred to the Barangay
Lupon for conciliation because the parties involved herein actually reside in
It is the petitioners’ incessant barking that the "Bilihan ng Lupa" documents Q. I am showing to you this document, there is a signature at the left hand
dated 17 August 1979 and 9 January 1981 were falsified because it was margin of this document Virgilio Santos, will you please go over the same
made to appear that petitioners Virgilio and Tadeo were present in the and tell the court whose signature is this?
executions thereof, and their allegation that even respondents Spouses
Lumbao’s witness Carolina Morales proved that said petitioners were not A. I don’t remember, sir, because of the length of time that had passed.
present during the execution of the aforementioned documents. This is
specious.
Q. But that is your signature?
Upon examination of the aforesaid documents, this Court finds that in the A. I don’t have eyeglasses… My signature is different.
"Bilihan ng Lupa," dated 17 August 1979, the signatures of petitioners Virgilio
and Tadeo appeared thereon. Moreover, in petitioners’ Answer and
Amended Answer to the Complaint for Reconveyance with Damages, both Q. You never appeared before this notary public Apolinario Mangahas?
petitioners Virgilio and Tadeo made an admission that indeed they acted as
witnesses in the execution of the "Bilihan ng Lupa," dated 17 August 1979. 19 A. I don’t remember.20
However, in order to avoid their obligations in the said "Bilihan ng Lupa,"
petitioner Virgilio, in his cross-examination, denied having knowledge of the As a general rule, facts alleged in a party’s pleading are deemed admissions
sale transaction and claimed that he could not remember the same as well of that party and are binding upon him, but this is not an absolute and
as his appearance before the notary public due to the length of time that had inflexible rule. An answer is a mere statement of fact which the party filing it
passed. Noticeably, petitioner Virgilio did not categorically deny having expects to prove, but it is not evidence.21 And in spite of the presence of
signed the "Bilihan ng Lupa," dated 17 August 1979 and in support thereof, judicial admissions in a party’s pleading, the trial court is still given leeway to
his testimony in the cross-examination propounded by the counsel of the consider other evidence presented.22 However, in the case at bar, as the
respondents Spouses Lumbao is quoted hereunder: Court of Appeals mentioned in its Decision, "[herein petitioners] had not
adduced any other evidence to override the admission made in their
ATTY. CHIU: [A]nswer that [petitioners Virgilio and Tadeo] actually signed the [Bilihan ng
Lupa dated 17 August 1979] except that they were just misled as to the
Q. Now, you said, Mr. Witness…Virgilio Santos, that you don’t know about purpose of the document, x x x."23 Virgilio’s answers were unsure and
this document which was marked as Exhibit "A" for the [respondents spouses quibbled. Hence, the general rule that the admissions made by a party in a
Lumbao]? pleading are binding and conclusive upon him applies in this case.
ATTY. BUGARING: On the testimony of respondents Spouses Lumbao’s witness Carolina

Morales, this Court adopts the findings made by the appellate court. Thus -
The question is misleading, your Honor. Counsel premised the question that
he does not have any knowledge but not that he does not know. [T]he trial court gave singular focus on her reply to a question during cross-
examination if the [petitioners Virgilio and Tadeo] were not with her and the
vendor [Rita] during the transaction. It must be pointed out that earlier in the
ATTY. CHIU:
direct examination of said witness, she confirmed that [respondents spouses
Lumbao] actually bought the lot from [Rita] ("nagkabilihan"). Said witness
Q. Being… you are one of the witnesses of this document? [I]s it not? positively identified and confirmed the two (2) documents evidencing the sale
in favor of [respondents spouse Lumbao]. Thus, her subsequent statement
WITNESS: that the [petitioners Virgilio and Tadeo] were not with them during the
transaction does not automatically imply that [petitioners Virgilio and Tadeo]
A. No, sir. did not at any time sign as witnesses as to the deed of sale attesting to their
mother’s voluntary act of selling a portion of her share in her deceased
mother’s property. The rule is that testimony of a witness must be considered the sale is subject to the results of the partition upon the termination of the
and calibrated in its entirety and not by truncated portions thereof or isolated co-ownership.29
passages therein.24
In the case at bar, when the estate left by Maria had been partitioned on 2
Furthermore, both "Bilihan ng Lupa" documents dated 17 August 1979 and 9 May 1986 by virtue of a Deed of Extrajudicial Settlement, the 107- square
January 1981 were duly notarized before a notary public. It is well-settled meter lot sold by the mother of the petitioners to respondents Spouses
that a document acknowledged before a notary public is a public document 25 Lumbao should be deducted from the total lot, inherited by them in
that enjoys the presumption of regularity. It is a prima facie evidence of the representation of their deceased mother, which in this case measures 467
truth of the facts stated therein and a conclusive presumption of its existence square meters. The 107-square meter lot already sold to respondents
and due execution.26 To overcome this presumption, there must be Spouses Lumbao can no longer be inherited by the petitioners because the
presented evidence that is clear and convincing. Absent such evidence, the same was no longer part of their inheritance as it was already sold during the
presumption must be upheld.27 In addition, one who denies the due lifetime of their mother.
execution of a deed where one’s signature appears has the burden of
proving that contrary to the recital in the jurat, one never appeared before the Likewise, the fact that the property mentioned in the two "Bilihan ng Lupa"
notary public and acknowledged the deed to be a voluntary act. Nonetheless, documents was described as "a portion of a parcel of land covered in Tax
in the present case petitioners’ denials without clear and convincing evidence Declarations No. A-018-01674," while the subject matter of the Deed of
to support their claim of fraud and falsity were not sufficient to overthrow the Extrajudicial Settlement was the property described in Transfer Certificate of
above-mentioned presumption; hence, the authenticity, due execution and Title (TCT) No. 3216 of the Registry of Deeds of the Province of Rizal in the
the truth of the facts stated in the aforesaid "Bilihan ng Lupa" are upheld. name of Maria is of no moment because in the "Bilihan ng Lupa," dated 17
August 1979 and 9 January 1981, it is clear that there was only one estate
The defense of petitioners that the identities of the properties described in left by Maria upon her death. And this fact was not refuted by the petitioners.
the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981 in relation Besides, the property described in Tax Declaration No. A-018-01674 and the
to the subject property were not established by respondents Spouses property mentioned in TCT No. 3216 are both located in Barrio Rosario,
Lumbao’s evidence is likewise not acceptable. Municipality of Pasig, Province of Rizal, and almost have the same
boundaries. It is, thus, safe to state that the property mentioned in Tax
It is noteworthy that at the time of the execution of the documents Declaration No. A-018-01674 and in TCT No. 3216 are one and the same.
denominated as "Bilihan ng Lupa," the entire property owned by Maria, the
mother of Rita, was not yet divided among her and her co-heirs and so the The defense of prescription of action and laches is likewise unjustifiable. In
description of the entire estate is the only description that can be placed in an action for reconveyance, the decree of registration is respected as
the "Bilihan ng Lupa, dated 17 August 1979 and 9 January 1981" because incontrovertible. What is sought instead is the transfer of the property or its
the exact metes and bounds of the subject property sold to respondents title which has been wrongfully or erroneously registered in another person’s
Spouses Lumbao could not be possibly determined at that time. name to its rightful or legal owner, or to the one with a better right. It is,
Nevertheless, that does not make the contract of sale between Rita and indeed, true that the right to seek reconveyance of registered property is not
respondents Spouses Lumbao invalid because both the law and absolute because it is subject to extinctive prescription. However, when the
jurisprudence have categorically held that even while an estate remains plaintiff is in possession of the land to be reconveyed, prescription cannot set
undivided, co-owners have each full ownership of their respective aliquots or in. Such an exception is based on the theory that registration proceedings
undivided shares and may therefore alienate, assign or mortgage them. 28 could not be used as a shield for fraud or for enriching a person at the
The co-owner, however, has no right to sell or alienate a specific or expense of another.30
determinate part of the thing owned in common, because such right over the
thing is represented by an aliquot or ideal portion without any physical In the case at bar, the right of the respondents Spouses Lumbao to seek
division. In any case, the mere fact that the deed purports to transfer a reconveyance does not prescribe because the latter have been and are still
concrete portion does not per se render the sale void. The sale is valid, but in actual possession and occupation as owners of the property sought to be
only with respect to the aliquot share of the selling co-owner. Furthermore, reconveyed, which fact has not been refuted nor denied by the petitioners.
Furthermore, respondents Spouses Lumbao cannot be held guilty of laches nonperformance is not excused by the death of the party when the other
because from the very start that they bought the 107-square meter lot from party has a property interest in the subject matter of the contract.34
the mother of the petitioners, they have constantly asked for the transfer of
the certificate of title into their names but Rita, during her lifetime, and the In the end, despite the death of the petitioners’ mother, they are still bound to
petitioners, after the death of Rita, failed to do so on the flimsy excuse that comply with the provisions of the "Bilihan ng Lupa," dated 17 August 1979
the lot had not been partitioned yet. Inexplicably, after the partition of the and 9 January 1981. Consequently, they must reconvey to herein
entire estate of Maria, petitioners still included the 107-square meter lot in respondents Spouses Lumbao the 107-square meter lot which they bought
their inheritance which they divided among themselves despite their from Rita, petitioners’ mother. And as correctly ruled by the appellate court,
knowledge of the contracts of sale between their mother and the respondents petitioners must pay respondents Spouses Lumbao attorney’s fees and
Spouses Lumbao. litigation expenses for having been compelled to litigate and incur expenses
to protect their interest.35 On this matter, we do not find reasons to reverse
Under the above premises, this Court holds that the "Bilihan ng Lupa" the said findings.
documents dated 17 August 1979 and 9 January 1981 are valid and
enforceable and can be made the basis of the respondents Spouses WHEREFORE, premises considered, the instant Petition is hereby DENIED.
Lumbao’s action for reconveyance. The failure of respondents Spouses The Decision and Resolution of the Court of Appeals dated 8 June 2005 and
Lumbao to have the said documents registered does not affect its validity 29 July 2005, respectively, are hereby AFFIRMED. Herein petitioners are
and enforceability. It must be remembered that registration is not a ordered to reconvey to respondents Spouses Lumbao the subject property
requirement for validity of the contract as between the parties, for the effect and to pay the latter attorney’s fees and litigation expenses. Costs against
of registration serves chiefly to bind third persons. The principal purpose of petitioners.
registration is merely to notify other persons not parties to a contract that a
transaction involving the property had been entered into. Where the party SO ORDERED.
has knowledge of a prior existing interest which is unregistered at the time he
acquired a right to the same land, his knowledge of that prior unregistered
interest has the effect of registration as to him.31 Hence, the "Bilihan ng Lupa"
documents dated 17 August 1979 and 9 January 1981, being valid and
enforceable, herein petitioners are bound to comply with their provisions. In
short, such documents are absolutely valid between and among the parties
thereto.
Finally, the general rule that heirs are bound by contracts entered into by
their predecessors-in-interest applies in the present case. Article 1311 32 of
the NCC is the basis of this rule. It is clear from the said provision that
whatever rights and obligations the decedent have over the property were
transmitted to the heirs by way of succession, a mode of acquiring the
property, rights and obligations of the decedent to the extent of the value of
the inheritance of the heirs.33 Thus, the heirs cannot escape the legal
consequence of a transaction entered into by their predecessor-in-interest
because they have inherited the property subject to the liability affecting their
common ancestor. Being heirs, there is privity of interest between them and
their deceased mother. They only succeed to what rights their mother had
and what is valid and binding against her is also valid and binding as against
them. The death of a party does not excuse nonperformance of a contract
which involves a property right and the rights and obligations thereunder
pass to the personal representatives of the deceased. Similarly,
[G.R. NO. 170943, September 23, 2008] last known address; While the trial court ordinarily does the mailing of copies
of its orders and processes, the duty to make the complementary service by
PEDRO T. SANTOS, JR., Petitioner, v. PNOC EXPLORATION registered mail is imposed on the party who resorts to service by publication.—
CORPORATION, Respondent. Service of summons by publication is proved by the affidavit of the printer, his
foreman or principal clerk, or of the editor, business or advertising manager of
Actions; Summons; Service of Summons by Publication; Where the the newspaper which published the summons. The service of summons by
defendant could not be personally served with summons despite diligent publication is complemented by service of summons by registered mail to the
efforts to locate his whereabouts, he may properly be served with summons defendant’s last known address. This complementary service is evidenced by
by publication.—Section 14, Rule 14 (on Summons) of the Rules of Court an affidavit “showing the deposit of a copy of the summons and order for
provides: SEC. 14. Service upon defendant whose identity or whereabouts are publication in the post office, postage prepaid, directed to the defendant by
unknown.—In any action where the defendant is designated as an unknown registered mail to his last known address.” The rules, however, do not require
owner, or the like, or whenever his whereabouts are unknown and cannot be that the affidavit of complementary service be executed by the clerk of court.
ascertained by diligent inquiry, service may, by leave of court, be effected upon While the trial court ordinarily does the mailing of copies of its orders and
him by publication in a newspaper of general circulation and in such places processes, the duty to make the complementary service by registered mail is
and for such times as the court may order. (emphasis supplied) Since imposed on the party who resorts to service by publication.
petitioner could not be personally served with summons despite diligent efforts
Same; Default; In case a defendant is declared in default, the court shall
to locate his whereabouts, respondent sought and was granted leave of court
to effect service of summons upon him by publication in a newspaper of proceed to render judgment granting the plaintiff such relief as his pleading
general circulation. Thus, petitioner was properly served with summons by may warrant, unless the court in its discretion requires the plaintiff to submit
evidence.—If the defendant fails to file his answer on time, he may be declared
publication.
in default upon motion of the plaintiff with notice to the said defendant. In case
Same; Same; Same; The in rem/in personam distinction was significant under he is declared in default, the court shall proceed to render judgment granting
the old rule because it was silent as to the kind of action to which the rule was the plaintiff such relief as his pleading may warrant, unless the court in its
applicable but this has been changed—it now applies to any action, whether discretion requires the plaintiff to submit evidence. The defaulting defendant
in personam, in rem or quasi in rem.—Petitioner invokes the distinction may not take part in the trial but shall be entitled to notice of subsequent
between an action in rem and an action in personam and claims that proceedings.
substituted service may be availed of only in an action in rem. Petitioner is
wrong. The in rem/in personam distinction was significant under the old rule Same; Same; An order of default can be made only upon motion of the
claiming party.—As is readily apparent, the September 11, 2003 order did not
because it was silent as to the kind of action to which the rule was applicable.
Because of this silence, the Court limited the application of the old rule to in limit itself to permitting respondent to present its evidence ex parte but in effect
rem actions only. This has been changed. The present rule expressly states issued an order of default. But the trial court could not validly do that as an
that it applies “[i]n any action where the defendant is designated as an order of default can be made only upon motion of the claiming party. Since no
unknown owner, or the like, or whenever his whereabouts are unknown and motion to declare petitioner in default was filed, no default order should have
cannot be ascertained by diligent inquiry.” Thus, it now applies to any action, been issued.
whether in personam, in rem or quasi in rem.
Same; Same; Statutory Construction; If a party declared in default is

entitled to notice of subsequent proceedings, all the more should a party who
has not been declared in default be entitled to such notice; Laws and rules
Same; Same; Same; The service of summons by publication is must be interpreted in a way that they are in accordance with logic, common
complemented by service of summons by registered mail to the defendant’s sense, reason and practicality.—To pursue the matter to its logical conclusion,
if a party declared in default is entitled to notice of subsequent proceedings, Subsequently, on respondent's motion, the trial court allowed service of
all the more should a party who has not been declared in default be entitled to summons by publication.
such notice. But what happens if the residence or whereabouts of the
defending party is not known or he cannot be located? In such a case, there is Respondent caused the publication of the summons in Remate, a newspaper
obviously no way notice can be sent to him and the notice requirement cannot of general circulation in the Philippines, on May 20, 2003. Thereafter,
apply to him. The law does not require that the impossible be done. Nemo respondent submitted the affidavit of publication of the advertising manager
of Remate5 and an affidavit of service of respondent's employee6 to the effect
tenetur ad impossibile. The law obliges no one to perform an impossibility.
that he sent a copy of the summons by registered mail to petitioner's last
Laws and rules must be interpreted in a way that they are in accordance with
known address.
logic, common sense, reason and practicality.
Same; Same; Equity; Equity is available only in the absence of law, not When petitioner failed to file his answer within the prescribed period,
respondent moved that the case be set for the reception of its evidence ex
as its replacement—it may be applied only in the absence of rules of
parte. The trial court granted the motion in an order dated September 11,
procedure, never in contravention thereof.—Petitioner’s plea for equity must
2003.
fail in the face of the clear and express language of the rules of procedure and
of the September 11, 2003 order regarding the period for filing the answer. Respondent proceeded with the ex parte presentation and formal offer of its
Equity is available only in the absence of law, not as its replacement. Equity evidence. Thereafter, the case was deemed submitted for decision on
may be applied only in the absence of rules of procedure, never in October 15, 2003.
contravention thereof.
On October 28, 2003, petitioner filed an "Omnibus Motion for
PETITION for review on certiorari of the decision and resolution of the Court Reconsideration and to Admit Attached Answer." He sought reconsideration
of Appeals. of the September 11, 2003 order, alleging that the affidavit of service
submitted by respondent failed to comply with Section 19, Rule 14 of the
The facts are stated in the opinion of the Court. Rules of Court as it was not executed by the clerk of court. He also claimed
that he was denied due process as he was not notified of the September 11,
2003 order. He prayed that respondent's evidence ex parte be stricken off
the records and that his answer be admitted.
DECISION
Respondent naturally opposed the motion. It insisted that it complied with the
CORONA, J.: rules on service by publication. Moreover, pursuant to the September 11,
2003 order, petitioner was already deemed in default for failure to file an
answer within the prescribed period.
This is a petition for review1 of the September 22, 2005 decision2 and
December 29, 2005 resolution3 of the Court of Appeals in CA-G.R. SP No.
In an order dated February 6, 2004, the trial court denied petitioner's motion
82482.
for reconsideration of the September 11, 2003 order. It held that the rules did
not require the affidavit of complementary service by registered mail to be
On December 23, 2002, respondent PNOC Exploration Corporation filed a
executed by the clerk of court. It also ruled that due process was observed
complaint for a sum of money against petitioner Pedro T. Santos, Jr. in the
as a copy of the September 11, 2003 order was actually mailed to petitioner
Regional Trial Court of Pasig City, Branch 167. The complaint, docketed as
at his last known address. It also denied the motion to admit petitioner's
Civil Case No. 69262, sought to collect the amount of P698,502.10
answer because the same was filed way beyond the reglementary period.
representing petitioner's unpaid balance of the car loan4 advanced to him by
respondent when he was still a member of its board of directors.
Aggrieved, petitioner assailed the September 11, 2003 and February 6, 2004
orders of the trial court in the Court of Appeals via a petition for certiorari . He
Personal service of summons to petitioner failed because he could not be
contended that the orders were issued with grave abuse of discretion. He
located in his last known address despite earnest efforts to do so.
imputed the following errors to the trial court: taking cognizance of the case
despite lack of jurisdiction due to improper service of summons; failing to Petitioner invokes the distinction between an action in rem and an action in
furnish him with copies of its orders and processes, particularly the personam and claims that substituted service may be availed of only in an
September 11, 2003 order, and upholding technicality over equity and action in rem. Petitioner is wrong. The in rem/in personam distinction was
justice. significant under the old rule because it was silent as to the kind of action to
which the rule was applicable.10 Because of this silence, the Court limited the
During the pendency of the petition in the Court of Appeals, the trial court application of the old rule to in rem actions only.11
rendered its decision in Civil Case No. 69262. It ordered petitioner to pay
P698,502.10 plus legal interest and costs of suit. 7 This has been changed. The present rule expressly states that it applies "[i]n
any action where the defendant is designated as an unknown owner, or the
Meanwhile, on September 22, 2005, the Court of Appeals rendered its like, or whenever his whereabouts are unknown and cannot be ascertained
decision8 sustaining the September 11, 2003 and February 6, 2004 orders of by diligent inquiry." Thus, it now applies to any action, whether in personam,
the trial court and dismissing the petition. It denied reconsideration.9 Thus, in rem or quasi in rem.12
this petition.
Regarding the matter of the affidavit of service, the relevant portion of
Petitioner essentially reiterates the grounds he raised in the Court of Section 19,13 Rule 14 of the Rules of Court simply speaks of the following:
Appeals, namely, lack of jurisdiction over his person due to improper service ... an affidavit showing the deposit of a copy of the summons and order for
of summons, failure of the trial court to furnish him with copies of its orders publication in the post office, postage prepaid, directed to the defendant by
and processes including the September 11, 2003 order and preference for registered mail to his last known address.
technicality rather than justice and equity. In particular, he claims that the rule
Service of summons by publication is proved by the affidavit of the printer,
on service by publication under Section 14, Rule 14 of the Rules of Court his foreman or principal clerk, or of the editor, business or advertising
applies only to actions in rem, not actions in personam like a complaint for a
manager of the newspaper which published the summons. The service of
sum of money. He also contends that the affidavit of service of a copy of the summons by publication is complemented by service of summons by
summons should have been prepared by the clerk of court, not respondent's registered mail to the defendant's last known address. This complementary
messenger.
service is evidenced by an affidavit "showing the deposit of a copy of the
summons and order for publication in the post office, postage prepaid,
The petition lacks merit. directed to the defendant by registered mail to his last known address."
Propriety Of
The rules, however, do not require that the affidavit of complementary
Service By Publication
service be executed by the clerk of court. While the trial court ordinarily does
the mailing of copies of its orders and processes, the duty to make the
Section 14, Rule 14 (on Summons) of the Rules of Court provides:
complementary service by registered mail is imposed on the party who
SEC. 14. Service upon defendant whose identity or whereabouts are
resorts to service by publication.
unknown. - In any action where the defendant is designated as an unknown
owner, or the like, or whenever his whereabouts are unknown and cannot
Moreover, even assuming that the service of summons was defective, the
be ascertained by diligent inquiry, service may, by leave of court, be
trial court acquired jurisdiction over the person of petitioner by his own
effected upon him by publication in a newspaper of general circulation
voluntary appearance in the action against him. In this connection, Section
and in such places and for such times as the court may order. (emphasis
20, Rule 14 of the Rules of Court states:
supplied) SEC. 20. Voluntary appearance. - The defendant's voluntary appearance
Since petitioner could not be personally served with summons despite in the action shall be equivalent to service of summons. The inclusion in
diligent efforts to locate his whereabouts, respondent sought and was a motion to dismiss of other grounds aside from lack of jurisdiction over the
granted leave of court to effect service of summons upon him by publication person of the defendant shall not be deemed a voluntary appearance.
in a newspaper of general circulation. Thus, petitioner was properly served (emphasis supplied)
with summons by publication.
Petitioner voluntarily appeared in the action when he filed the "Omnibus within the required period and/or forthcoming.["] Effectively[,] that was a
Motion for Reconsideration and to Admit Attached Answer"14 This was finding that the defendant [that is, herein petitioner] was in default for
equivalent to service of summons and vested the trial court with jurisdiction failure to file an answer or any responsive pleading within the period
over the person of petitioner. fixed in the publication as precisely the defendant [could not] be found and
for which reason, service of summons by publication was ordered. It is simply
Entitlement To illogical to notify the defendant of the Order of September 11, 2003 simply on
Notice Of Proceedings account of the reality that he was no longer residing and/or found on his last
known address and his whereabouts unknown - thus the publication of the
The trial court allowed respondent to present its evidence ex parte on summons. In other words, it was reasonable to expect that the defendant will
account of petitioner's failure to file his answer within the prescribed period. not receive any notice or order in his last known address. Hence, [it was]
Petitioner assails this action on the part of the trial court as well as the said impractical to send any notice or order to him. Nonetheless, the record[s]
court's failure to furnish him with copies of orders and processes issued in will bear out that a copy of the order of September 11, 2003 was mailed
the course of the proceedings. to the defendant at his last known address but it was not claimed.
(emphasis supplied)
The effects of a defendant's failure to file an answer within the time allowed
As is readily apparent, the September 11, 2003 order did not limit itself to
therefor are governed by Sections 3 and 4, Rule 9 (on Effect of Failure to permitting respondent to present its evidence ex parte but in effect issued an
Plead) of the Rules of Court:
order of default. But the trial court could not validly do that as an order of
SEC. 3. Default; declaration of. - If the defending party fails to answer
default can be made only upon motion of the claiming party. 15 Since no
within the time allowed therefor, the court shall, upon motion of the
motion to declare petitioner in default was filed, no default order should have
claiming party with notice to the defending party, and proof of such
been issued.
failure, declare the defending party in default. Thereupon, the court shall
proceed to render judgment granting the claimant such relief as his pleading To pursue the matter to its logical conclusion, if a party declared in default is
may warrant, unless the court in its discretion requires the claimant to submit
entitled to notice of subsequent proceedings, all the more should a party who
evidence. Such reception of evidence may be delegated to the clerk of court.
has not been declared in default be entitled to such notice. But what happens
if the residence or whereabouts of the defending party is not known or he
SEC. 4. Effect of order of default. - A party in default shall be entitled to
cannot be located? In such a case, there is obviously no way notice can be
notice of subsequent proceedings but not to take part in the trial.
sent to him and the notice requirement cannot apply to him. The law does not
(emphasis supplied) require that the impossible be done.16 Nemo tenetur ad impossibile. The law
If the defendant fails to file his answer on time, he may be declared in default obliges no one to perform an impossibility.17 Laws and rules must be
upon motion of the plaintiff with notice to the said defendant. In case he is interpreted in a way that they are in accordance with logic, common sense,
declared in default, the court shall proceed to render judgment granting the reason and practicality.18
plaintiff such relief as his pleading may warrant, unless the court in its
discretion requires the plaintiff to submit evidence. The defaulting defendant Hence, even if petitioner was not validly declared in default, he could not
may not take part in the trial but shall be entitled to notice of subsequent reasonably demand that copies of orders and processes be furnished him.
proceedings. Be that as it may, a copy of the September 11, 2003 order was nonetheless
still mailed to petitioner at his last known address but it was unclaimed.
In this case, even petitioner himself does not dispute that he failed to file his
answer on time. That was in fact why he had to file an "Omnibus Motion for CorrectnessOf
Reconsideration and to Admit Attached Answer." But respondent moved Non-Admission Of Answer
only for the ex parte presentation of evidence, not for the declaration of
petitioner in default. In its February 6, 2004 order, the trial court stated: Petitioner failed to file his answer within the required period. Indeed, he
The disputed Order of September 11, 2003 allowing the presentation of would not have moved for the admission of his answer had he filed it on time.
evidence ex-parte precisely ordered that "despite and notwithstanding Considering that the answer was belatedly filed, the trial court did not abuse
service of summons by publication, no answer has been filed with the Court its discretion in denying its admission.
Petitioner's plea for equity must fail in the face of the clear and express
language of the rules of procedure and of the September 11, 2003 order
regarding the period for filing the answer. Equity is available only in the
absence of law, not as its replacement.19 Equity may be applied only in the
absence of rules of procedure, never in contravention thereof.
WHEREFORE, the petition is hereby DENIED.
Costs against petitioner.
SO ORDERED
Puno, C.J., (Chairperson), Carpio, Azcuna and Leonardo-De Castro, JJ.,

concur.
G.R. No. 183802 September 17, 2009 summons upon a respondent or a defendant must be served by handing a
copy thereof to him in person or, if he refuses to receive it, by tendering it to
ALEXANDER TAM WONG, Petitioner, him. Personal service of summons most effectively ensures that the notice
vs. desired under the constitutional requirement of due process is accomplished.
CATHERINE FACTOR-KOYAMA, Respondent. The essence of personal service is the handing or tendering of a copy of the
summons to the defendant himself.
Jurisdiction; Summons; Summons is a writ by which the defendant is notified
of the action brought against him or her.—Summons is a writ by which the Same; Under our procedural rules, service of summons in person of
defendant is notified of the action brought against him or her. In a civil action, defendants is generally preferred over substituted service.—Under our
jurisdiction over the defendant is acquired either upon a valid service of procedural rules, service of summons in person of defendants is generally
summons or the defendant’s voluntary appearance in court. When the preferred over substituted service. Substituted service derogates the regular
defendant does not voluntarily submit to the court’s jurisdiction or when there method of personal service. It is an extraordinary method since it seeks to bind
is no valid service of summons, any judgment of the court, which has no the respondent or the defendant to the consequences of a suit even though
jurisdiction over the person of the defendant, is null and void. notice of such action is served not upon him but upon another to whom the law
could only presume would notify him of the pending proceedings.
Same; Proof of service of summons must a) indicate the impossibility of

service of summons within a reasonable time; b) specify the efforts exerted to
locate the defendant; and c) state that the summons was served upon a person
Same; Same; Where the action is in personam, i.e., one that seeks to of sufficient age and discretion who is residing in the address, or who is in
impose some responsibility or liability directly upon the person of the defendant charge of the office or regular place of business of the defendant.—The Court
through the judgment of a court, and the defendant is in the Philippines, the requires that the Sheriff’s Return clearly and convincingly show the
service of summons may be made through personal or substituted service in
impracticability or hopelessness of personal service. Proof of service of
the manner described in Sections 6 and 7, Rule 14 of the Revised Rules of summons must (a) indicate the impossibility of service of summons within a
Court.—Where the action is in personam, i.e., one that seeks to impose some
reasonable time; (b) specify the efforts exerted to locate the defendant; and
responsibility or liability directly upon the person of the defendant through the (c) state that the summons was served upon a person of sufficient age and
judgment of a court, and the defendant is in the Philippines, the service of discretion who is residing in the address, or who is in charge of the office or
summons may be made through personal or substituted service in the manner regular place of business, of the defendant. It is likewise required that the
described in Sections 6 and 7, Rule 14 of the Revised Rules of Court, which pertinent facts proving these circumstances be stated in the proof of service or
provide: SEC. 6. Service in person on defendant.—Whenever practicable, the
in the officer’s return. The failure to comply faithfully, strictly and fully with all
summons shall be served by handing a copy thereof to the defendant in the foregoing requirements of substituted service renders the service of
person, or if he refuses to receive and sign for it, by tendering it to him. SEC. summons ineffective.
7. Substituted service.—If, for justifiable causes, the defendant cannot be
served within a reasonable time as provided in the preceding section, service Same; Sheriffs; It must be stressed that before resorting to substituted
may be effected (a) by leaving copies of the summons at the defendant’s service, a sheriff is enjoined to try his best efforts to accomplish personal
residence with some person of suitable age and discretion then residing service on the defendant.—The Return failed to relay if sufficient efforts were
therein; or (b) by leaving the copies at the defendant’s office or regular place exerted by Sheriff Baloloy to locate Wong, as well as the impossibility of
of business with some competent person in charge thereof. personal service of summons upon Wong within a reasonable time. Sheriff
Baloloy’s three visits to Wong’s residence hardly constitute effort on his part to
Summons; It is well-established that a summons upon a respondent or locate Wong; and Wong’s absence from his residence during Sheriff Baloloy’s
a defendant must be served by handing a copy thereof to him in person or if
visits, since Wong was at the office or out-of-town, does not connote
he refuses to receive it, by tendering it to him.—It is well-established that a
impossibility of personal service of summons upon him. It must be stressed
that, before resorting to substituted service, a sheriff is enjoined to try his best private respondent Catherine Factor-Koyama (Koyama) against Wong,
efforts to accomplish personal service on the defendant. And since the docketed as Civil Case No. C-21860. Koyama alleged in her Complaint that
defendant is expected to try to avoid and evade service of summons, the sheriff Wong deliberately refused to execute and deliver a deed of absolute sale,
must be resourceful, persevering, canny, and diligent in serving the process and to surrender the condominium certificate of title (CCT) pertaining to a
on the defendant. condominium unit, particularly described as A3-4B California Garden Square,
with an area of 57.5 square meters and located at Libertad Street corner
Same; Jurisdictions; Even without valid service of summons, a court may still Calbayog Street, Mandaluyong City, Metro Manila (subject property), which
acquire jurisdiction over the person of the defendant, if the latter voluntarily she had already bought from him. Koyama further averred that she had been
appears before it.—Even without valid service of summons, a court may still renting out the subject property to foreign tourists, but Wong padlocked the
acquire jurisdiction over the person of the defendant, if the latter voluntarily same while she was in Japan attending to her business. When she
appears before it. Section 20, Rule 14 of the Revised Rules of Court requested him to open the subject property, he reportedly mauled her,
causing her physical injuries, and also took her personal belongings.
recognizes that: Section 20. Voluntary Appearance.—The defendant’s
voluntary appearance in the action shall be equivalent to service of summons.
The inclusion in a motion to dismiss of other grounds aside from lack of On 24 July 2007, the RTC issued summons6 addressed to Wong at his
residence, No. 21 West Riverside Street, San Francisco Del Monte, Quezon
jurisdiction over the person of the defendant shall not be deemed a voluntary
City. However, the original summons and the accompanying copy of the
appearance. Complaint and its Annexes were eventually returned to the RTC by Sheriff IV
PETITION for review of the resolutions of the Court of Appeals. Renebert B. Baloloy (Sheriff Baloloy), who indicated in his Sheriff’s Return
dated 14 August 2007 that said court process should already be deemed
The facts are stated in the opinion of the Court. "DULY SERVED." According to his Return,7 Sheriff Baloloy had repeatedly
attempted to serve the summons at Wong’s residential address on 27 July
Clarissa A. Castro for petitioner. 2007, 8 August 2007, and 10 August 2007, but Wong was always not around
according to the latter’s housemaids, Marie Sandoval (Sandoval) and Loren
Manuel Y. Fausto, Sr. for private respondent. Lopez (Lopez). Sheriff Baloloy then attempted to leave the summons with
Criz Mira (Mira), Wong’s caretaker, who is of legal age, and residing at the
same address for two and a half years, but Mira refused to acknowledge or
receive the same.
DECISION
On 25 September 2007, after the lapse of the 15-day reglementary period8
CHICO-NAZARIO, J.: without Wong filing an answer to the Complaint in Civil Case No. C-21860,
Koyama moved for the RTC to declare him in default, and to allow her to
For Review on Certiorari, under Rule 45 of the Revised Rules of Court, are present her evidence ex parte and/or to render judgment in her favor. The
the Resolutions dated 17 January 20081 and 18 July 20082 of the Court of RTC set Koyama’s Motion for hearing on 25 October 2007 at 8:30 in the
Appeals dismissing outright the Petition for Certiorari, under Rule 65 of the morning or as soon as counsel and the matter may be heard. 9
same Rules, of Alexander Tam Wong (Wong) in CA-G.R. SP No. 101860, for
being the wrong remedy. Wong intended to assail before the appellate court On 25 September 2007, the RTC, presided by public respondent Hon.
the Orders dated 25 September 20073 and 18 December 20074 of the Adoracion Angeles, issued an Order10 declaring Wong in default.
Regional Trial Court (RTC), Branch 121 of Caloocan City, which,
respectively, declared him in default in Civil Case No. C-21860 and denied Wong subsequently filed with the RTC, by registered mail sent on 5 October
his Motion to Dismiss the Complaint in said case. 2007, a Manifestation11 claiming that he did not receive any summons from
said court. According to him, he was only informed unofficially by a tricycle
The present controversy originates from a Complaint5 dated 17 July 2007, for driver on 27 September 2007 regarding papers from a court in Caloocan
specific performance, sum of money, and damages, filed with the RTC by City, which the tricycle driver returned to the court after failing to locate
Wong. This prompted Wong to file an inquiry12 dated 28 September 2007 Wong went before the Court of Appeals via a Petition for Certiorari22 under
with the Office of the Clerk of Court of the RTC of Caloocan City as regards Rule 65 of the Revised Rules of Court contending that the RTC committed
any case that might have been filed against him. In response, the Office of grave abuse of discretion, amounting to lack or excess of jurisdiction, in
the Clerk of Court of the RTC of Caloocan City issued a Certification13 dated issuing its Orders dated 25 September 2007 and 18 October 2007 in which it,
3 October 2007 bearing the details of Civil Case No. C-21860, which respectively, declared Wong in default in Civil Case No. C-21860 and denied
Koyama had instituted against him. Wong asserted that he would not his Motion to Dismiss the Complaint in the same case. Wong insisted that
hesitate to submit himself to the jurisdiction of the RTC, should the proper there was no valid service of summons upon him, and that he was not
procedure be observed. notified of Koyama’s Motion to have him declared in default.
In its Order14 dated 9 October 2007, the RTC stressed that, as early as 25 The Court of Appeals, in a Resolution23 dated 17 January 2008, dismissed
September 2007, Wong had been declared in default. Wong’s Petition for Certiorari outright for being the improper remedy.
Wong, by special appearance of counsel, then filed with the RTC on 22 According to the Court of Appeals, Wong should have availed himself of the
October 2007 a Motion to Dismiss15 Civil Case No. C-21860, asserting, following remedies for RTC Order dated 25 September 2007, declaring him
among other grounds, that there was no service of summons upon him, in default:
hence, the RTC did not acquire jurisdiction over his person; and that he was
not given the opportunity to oppose Koyama’s Motion to have him declared in As to the first assailed Order declaring [Wong] in default, the remedies
default. available to a party declared in default were reiterated in Cerezo v. Tuazon,
viz:
In her Opposition16 to the Motion to Dismiss, filed on 5 November 2007,
Koyama maintained that there was a proper substituted service of the a) The defendant in default may, at any time after discovery thereof
summons, consequently, the RTC acquired jurisdiction over the person of and before judgment, file a motion under oath to set aside the order
Wong; and that Wong was served a copy of the Motion to have him declared of default on the ground that his failure to answer was due to fraud,
in default on 3 October 2007, as evidenced by the Registry Return Card.17 accident, mistake or excusable negligence, and that he has a
meritorious defense (Sec. 3, Rule 18 [now Sec. 3(b), Rule 9]);
Wong filed a Reply18 on 7 November 2007 to Koyama’s aforementioned
Opposition, denying that a Loren Lopez or Criz Mira resided at his home b) If the judgment has already been rendered when the defendant
address. Said housemaids were fictitious, as proven by the Certificate19 discovered the default, but before the same has become final and
issued by Junn L. Sta. Maria, Punong Barangay of San Francisco Del Monte, executory, he may file a motion for new trial under Section 1(a) of
Quezon City on 7 November 2007, stating that Loren Lopez and Criz Mira Rule 37;
were not residents of 21-B Westriverside St., San Francisco Del Monte,
Quezon City.
c) If the defendant discovered the default after the judgment has
become final and executory, he may file a petition for relief under
The RTC denied Wong’s Motion to Dismiss for lack of merit. In its Order 20 Section 2 [now Section 1] of Rule 38; and
dated 18 December 2007, the RTC declared that Sheriff Baloloy validly
resorted to a substituted service of the summons, pursuant to Section 7, Rule
d) He may also appeal from the judgment rendered against him as
14 of the Revised Rules of Court.21 Sheriff Baloloy’s performance of his
contrary to the evidence or to the law, even if no petition to set aside
official duty enjoyed the presumption of regularity, and Wong failed to rebut
the order of default has been presented by him (Sec. 2, Rule 41).
the same by merely presenting the Barangay Certificate, which is "not a role
model of accuracy," especially when referring to mere transient residents in
the area, such as lessees, housemaids or caretakers. Moreover, a petition for certiorari to declare the nullity of a judgment by
default is also available if the trial court improperly declared a party in default,
or even if the trial court properly declared a party in default, if grave abuse of The Court believes that the interest of justice and fair play would be better
discretion attended such declaration.24 served if the [herein petitioner Wong] would be given the chance to cross
examine the witness, and for which reason the Court suspends the
As for the 18 December 2007 Order of the RTC denying Wong’s Motion to proceedings and resets the continuation of the hearing of this case on
Dismiss, the appellate court held: January 23, 2009 at 8:30 a.m.
As to the second assailed Order denying petitioner’s Motion to Dismiss, the Wong, through counsel, actively participated in the hearing held on 23
said Order is interlocutory and is not a proper subject of a petition for January 2009 by extensively cross-examining Koyama.30 After said hearing,
certiorari. Even in the face of an error of judgment on the part of a judge he filed before this Court, on 18 February 2009, a Motion for Clarification31 as
denying the motion to dismiss, certiorari will not lie. Certiorari is not a remedy to the validity of the RTC Order dated 20 November 2008 allowing him to
to correct errors of procedure. cross-examine Koyama, but without lifting the Order of Default.
Let it be stressed at this point that basic rule that when a motion to dismiss is On 8 July 2009, the RTC rendered its Decision32 in Civil Case No. C-21860,
denied by the trial court, the remedy is not to file a petition for certiorari, but the dispositive of which reads:
to appeal after a decision has been rendered. An order denying a motion to
dismiss is interlocutory, and so the proper remedy in such a case is to appeal WHEREFORE, premises considered, the contract of sale between the
after a decision has been rendered. A writ of certiorari is not intended to parties relative to the sale of the condominium unit is hereby RESCINDED
correct every controversial interlocutory ruling; it is resorted only to correct a and the [herein petitioner Wong] is ordered to pay the [herein respondent
grave abuse of discretion or a whimsical exercise of judgment equivalent to Koyama] the sum of TWO MILLION TWO HUNDRED FOUR THOUSAND
lack of jurisdiction. Its function is limited to keeping an inferior court within its (Php2,204,000.00) PESOS with legal rate of interest from the date of
jurisdiction and to relieve persons from arbitrary acts—acts which courts or demand on May 25, 2007; to pay the plaintiff the sum of TWO HUNDRED
judges have no power or authority in law to perform. It is not designed to THOUSAND (Php200,000.00) PESOS as and for attorney’s fees; to pay
correct erroneous findings and conclusions made by the courts. 25 another sum of TWO THOUSAND FIVE HUNDRED (Php2,500.00) PESOS
per court appearance for six (6) times and to pay the costs of suit.
Ultimately, the Court of Appeals decreed:
Wong avers herein that the RTC did not acquire jurisdiction over his person
WHEREFORE, premises considered, the Petition is DISMISSED outright. 26 since he was not served the summons.
Wong filed a Motion for Reconsideration27 of the foregoing Resolution on 6 Summons is a writ by which the defendant is notified of the action brought
February 2008, but the Court of Appeals denied the same for lack of merit in against him or her. In a civil action, jurisdiction over the defendant is acquired
a Resolution28 dated 18 July 2008. either upon a valid service of summons or the defendant's voluntary
appearance in court. When the defendant does not voluntarily submit to the
court's jurisdiction or when there is no valid service of summons, any
Hence, Wong filed the instant Petition before this Court.
judgment of the court, which has no jurisdiction over the person of the
defendant, is null and void.33
In the meantime, since neither the Court of Appeals nor this Court issued a
Temporary Restraining Order (TRO) or writ of preliminary injunction enjoining
Where the action is in personam, i.e., one that seeks to impose some
the proceedings in Civil Case No. C-21860, the RTC continued hearing the
said case. In an Order29 dated 20 November 2008, the RTC motu proprio responsibility or liability directly upon the person of the defendant through the
allowed Wong to cross-examine Koyama during the hearing on 23 January judgment of a court,34 and the defendant is in the Philippines, the service of
2009, even though it did not lift its 25 September 2007 Order, which had summons may be made through personal or substituted service in the
manner described in Sections 6 and 7, Rule 14 of the Revised Rules of
declared him in default. The RTC reasoned:
Court, which provide:
SEC. 6. Service in person on defendant. – Whenever practicable, the THIS IS TO CERTIFY that on August 27, 2007, the undersigned Sheriff IV
summons shall be served by handing a copy thereof to the defendant in was in receipt of a copy of summons, complaint together with annexes in the
person, or if he refuses to receive and sign for it, by tendering it to him. above-entitled case issued by this Honorable Court for service, below were
the proceedings taken thereon, to wit:
SEC. 7. Substituted service. – If, for justifiable causes, the defendant cannot
be served within a reasonable time as provided in the preceding section, That on July 27, 2007, the undersigned went to the residence of the
service may be effected (a) by leaving copies of the summons at the Defendant located at #21 West Riverside St. San Francisco Del Monte,
defendant’s residence with some person of suitable age and discretion then Quezon City to serve the said summons, complaint and its annexes but Mr.
residing therein; or (b) by leaving the copies at the defendant’s office or Wong was not around. According to Ms. Marie Sandoval, housemaid, the
regular place of business with some competent person in charge thereof. subject was out (sic) for office;
It is well-established that a summons upon a respondent or a defendant must That on August 8, 2007, the undersigned tried to serve again the said
be served by handing a copy thereof to him in person or, if he refuses to summons, complaint and its annexes but according again to Ms. Sandoval,
receive it, by tendering it to him. Personal service of summons most the subject was out of town;
effectively ensures that the notice desired under the constitutional
requirement of due process is accomplished.35 The essence of personal That on August 10, 2007, the undersigned went again to the said residence
service is the handing or tendering of a copy of the summons to the to serve the same summons, complaint and its annexes but Ms. Loren
defendant himself.36 Lopez, another housemaid, said that Mr. Wong was out again (sic) for office;
and
Under our procedural rules, service of summons in person of defendants is
generally preferred over substituted service.37 Substituted service derogates That in the interest of justice, the undersigned left the said summons
the regular method of personal service. It is an extraordinary method since it complaint and its annexes to Mr. Wong’s caretaker, Mr. Criz Mira of legal age
seeks to bind the respondent or the defendant to the consequences of a suit who reside at the said address for almost two and a half years but he refused
even though notice of such action is served not upon him but upon another to to acknowledge/receive the said summons.
whom the law could only presume would notify him of the pending
proceedings.38
WHEREFORE, the original summons, complaint and its annexes is hereby
returned to this Honorable Court with the information DULY
The Court requires that the Sheriff’s Return clearly and convincingly show SERVED.411avvphi1
the impracticability or hopelessness of personal service.39 Proof of service of
summons must (a) indicate the impossibility of service of summons within a The Court, after a careful study of Sheriff Baloloy’s afore-quoted Return,
reasonable time; (b) specify the efforts exerted to locate the defendant; and
finds that he improperly resorted to substituted service upon Wong of the
(c) state that the summons was served upon a person of sufficient age and
summons for Civil Case No. C-21860.
discretion who is residing in the address, or who is in charge of the office or
regular place of business, of the defendant. It is likewise required that the
pertinent facts proving these circumstances be stated in the proof of service Apart from establishing that Sheriff Baloloy went to Wong’s residence on
or in the officer’s return. The failure to comply faithfully, strictly and fully with three different dates, and that the latter was not around every time, there is
all the foregoing requirements of substituted service renders the service of nothing else in the Sheriff’s Return to establish that Sheriff Baloloy exerted
summons ineffective.40 extraordinary efforts to locate Wong. During his visits to Wong’s residence on
27 July 2007 and 10 August 2007, Sheriff Baloloy was informed by the
housemaids that Wong was at his office. There is no showing, however, that
Sheriff Baloloy’s Return dated 14 August 2007 described the circumstances Sheriff Baloloy exerted effort to know Wong’s office address, verify his
surrounding the service of the summons upon Wong as follows: presence thereat, and/or personally serve the summons upon him at his
office.42 Although Wong was out of town when Sheriff Baloloy attempted to
serve the summons at the former’s residence on 8 August 2007, there was
no indication that Wong’s absence was other than temporary or that he The Court further stresses the fact that the RTC already rendered a Decision
would not soon return. in Civil Case No. C-21860 on 8 July 2009. Wong filed with the RTC a Notice
of Appeal on 10 August 2009. Given these developments, the Court deems it
Evidently, the Return failed to relay if sufficient efforts were exerted by Sheriff unnecessary to still address the issue of whether Wong was improperly
Baloloy to locate Wong, as well as the impossibility of personal service of declared in default by the RTC in its Order dated 25 September 2007.
summons upon Wong within a reasonable time. Sheriff Baloloy’s three visits Following the remedies cited in Cerezo v. Tuazon, 44 Wong could already
to Wong’s residence hardly constitute effort on his part to locate Wong; and raise and include said issue in his appeal of the RTC Decision dated 8 July
Wong’s absence from his residence during Sheriff Baloloy’s visits, since 2009 to the Court of Appeals. The Court can no longer grant him any remedy
Wong was at the office or out-of-town, does not connote impossibility of herein without preempting the action of the Court of Appeals on Wong’s
personal service of summons upon him. It must be stressed that, before appeal of the RTC judgment.
resorting to substituted service, a sheriff is enjoined to try his best efforts to
accomplish personal service on the defendant. And since the defendant is IN VIEW WHEREOF, the Petition is DENIED. Costs against the petitioner.
expected to try to avoid and evade service of summons, the sheriff must be
resourceful, persevering, canny, and diligent in serving the process on the SO ORDERED.
defendant.43
Nevertheless, even without valid service of summons, a court may still

acquire jurisdiction over the person of the defendant, if the latter voluntarily
appears before it. Section 20, Rule 14 of the Revised Rules of Court
recognizes that:
Section 20. Voluntary Appearance.—The defendant’s voluntary appearance

in the action shall be equivalent to service of summons. The inclusion in a
motion to dismiss of other grounds aside from lack of jurisdiction over the
person of the defendant shall not be deemed a voluntary appearance.
(Emphasis ours.)
The RTC acquired jurisdiction over Wong by virtue of his voluntary

appearance before it in Civil Case No. C-21860. The Court is not referring to
Wong’s filing of his Motion to Dismiss the Complaint in Civil Case No. C-
21860, on the ground of lack of jurisdiction of the RTC over his person,
because that clearly does not constitute voluntary appearance. The Court,
instead, calls attention to the RTC Order dated 20 November 2008 allowing
Wong to cross-examine Koyama. Wong, through his counsel, took
advantage of the opportunity opened to him by the said Order and
aggressively questioned her during the 23 January 2009 hearing, despite his
knowledge that the RTC had not yet lifted the 25 September 2007 Order
declaring him in default. By actively participating in the 23 January 2009
hearing, he effectively acknowledged full control of the RTC over Civil Case
No. C-21860 and over his person as the defendant therein; he is, thus,
deemed to have voluntarily submitted himself to the jurisdiction of said trial
court.
G.R. No. 175799 November 28, 2011 Same; Same; Same; Arguments of petitioner are not grounds in a
Motion to Dismiss as enumerated in Section 1, Rule 16 of the Rules of Court.—
NM ROTHSCHILD & SONS (AUSTRALIA) LIMITED, Petitioner, As correctly ruled by both the trial court and the Court of Appeals, the alleged
vs. absence of a cause of action (as opposed to the failure to state a cause of
LEPANTO CONSOLIDATED MINING COMPANY, Respondent. action), the alleged estoppel on the part of petitioner, and the argument that
respondent is in pari delicto in the execution of the challenged contracts, are
Remedial Law; Actions; Parties; A real party in interest is the party who not grounds in a Motion to Dismiss as enumerated in Section 1, Rule 16 of the
stands to be benefited or injured by the judgment in the suit, or the party Rules of Court. Rather, such defenses raise evidentiary issues closely related
entitled to the avails of the suit.—While we stand by our pronouncement in to the validity and/or existence of respondent’s alleged cause of action and
Philips Export on the importance of the corporate name to the very existence should therefore be threshed out during the trial.
of corporations and the significance thereof in the corporation’s right to sue,
we shall not go so far as to dismiss a case filed by the proper party using its Same; Same; Same; Cause of Action; A cause of action is the act or omission
former name when adequate identification is presented. A real party in interest by which a party violates a right of another; Elements of a Cause of Action.—
is the party who stands to be benefited or injured by the judgment in the suit, It is basic that “[a] cause of action is the act or omission by which a party
or the party entitled to the avails of the suit. There is no doubt in our minds that violates a right of another.” Its elements are the following: (1) a right existing
the party who filed the present Petition, having presented sufficient evidence in favor of the plaintiff, (2) a duty on the part of the defendant to respect the
of its identity and being represented by the same counsel as that of the plaintiff’s right, and (3) an act or omission of the defendant in violation of such
defendant in the case sought to be dismissed, is the entity that will be benefited right. We have held that to sustain a Motion to Dismiss for lack of cause of
if this Court grants the dismissal prayed for. action, the complaint must show that the claim for relief does not exist and not
only that the claim was defectively stated or is ambiguous, indefinite or
Same; Same; Motion to Dismiss; Certiorari; The general rule is that the denial uncertain.
of a Motion to Dismiss cannot be questioned in a special civil action for
Certiorari which is a remedy designed to correct errors of jurisdiction and not
errors of judgment; When the denial of the motion to Dismiss is tainted with
grave abuse of discretion, the grant of the extraordinary remedy of certiorari
may be justified; Meaning of “Grave Abuse of Discretion.”—We have held time Same; Same; Same; Principle of hypothetical admission admits of
and again that an order denying a Motion to Dismiss is an interlocutory order exceptions.—The rule is that in a Motion to Dismiss, a defendant hypothetically
which neither terminates nor finally disposes of a case as it leaves something admits the truth of the material allegations of the ultimate facts contained in
to be done by the court before the case is finally decided on the merits. The the plaintiff’s complaint. However, this principle of hypothetical admission
general rule, therefore, is that the denial of a Motion to Dismiss cannot be admits of exceptions.
questioned in a special civil action for Certiorari which is a remedy designed
to correct errors of jurisdiction and not errors of judgment. However, we have Same; Same; Same; An issue that requires the contravention of the
likewise held that when the denial of the Motion to Dismiss is tainted with grave allegations of the complaint, as well as the full ventilation, in effect, of the main
abuse of discretion, the grant of the extraordinary remedy of Certiorari may be merits of the case, should not be within the province of a mere Motion to
justified. By “grave abuse of discretion” is meant: [S]uch capricious and Dismiss.—The determination of whether or not the Complaint stated a cause
whimsical exercise of judgment that is equivalent to lack of jurisdiction. The of action would therefore involve an inquiry into whether or not the assailed
abuse of discretion must be grave as where the power is exercised in an contracts are void under Philippine laws. This is, precisely, the very issue to
arbitrary or despotic manner by reason of passion or personal hostility, and be determined in Civil Case No. 05-782. Indeed, petitioner’s defense against
must be so patent and gross as to amount to an evasion of positive duty or to the charge of nullity of the Hedging Contracts is the purported intent of the
a virtual refusal to perform the duty enjoined by or to act all in contemplation parties that actual deliveries of gold be made pursuant thereto. Such a defense
of law. requires the presentation of evidence on the merits of the case. An issue that
“requires the contravention of the allegations of the complaint, as well as the
full ventilation, in effect, of the main merits of the case, should not be within confer jurisdiction on the court, provided that the court acquires jurisdiction
the province of a mere Motion to Dismiss.” The trial court, therefore, correctly over the res.
denied the Motion to Dismiss on this ground.
Same; Same; Same; Same; Complaint in the case at bar is an action in
Same; Same; Same; Settled in jurisprudence is that allegations of personam, unless and until the plaintiff attaches a property within the
estoppel and bad faith require proof.—It is also settled in jurisprudence that Philippines belonging to the defendant, in which case the action will be
allegations of estoppel and bad faith require proof. Thus, in Parañaque Kings converted to one quasi in rem.—The Complaint in the case at bar is an action
Enterprises, Inc. v. Court of Appeals, 268 SCRA 727 (1997), we ruled: Having to declare the loan and Hedging Contracts between the parties void with a
come to the conclusion that the complaint states a valid cause of action for prayer for damages. It is a suit in which the plaintiff seeks to be freed from its
breach of the right of first refusal and that the trial court should thus not have obligations to the defendant under a contract and to hold said defendant
dismissed the complaint, we find no more need to pass upon the question of pecuniarily liable to the plaintiff for entering into such contract. It is therefore
whether the complaint states a cause of action for damages or whether the an action in personam, unless and until the plaintiff attaches a property within
complaint is barred by estoppel or laches. As these matters require the Philippines belonging to the defendant, in which case the action will be
presentation and/or determination of facts, they can be best resolved after trial converted to one quasi in rem.
on the merits.
Same; Same; Same; Seeking affirmative relief in a court is tantamount to
Same; Same; Summons; Extraterritorial Service; There are only four instances voluntary appearance therein.—The new second sentence, it can be
wherein a defendant who is a non-resident and is not found in the country may observed, merely mentions other grounds in a Motion to Dismiss aside from
be served with summons by extraterritorial service.—Breaking down Section lack of jurisdiction over the person of the defendant. This clearly refers to
15, Rule 14, it is apparent that there are only four instances wherein a affirmative defenses, rather than affirmative reliefs. Thus, while mindful of our
defendant who is a non-resident and is not found in the country may be served ruling in La Naval and the new Section 20, Rule 20, this Court, in several
with summons by extraterritorial service, to wit: (1) when the action affects the cases, ruled that seeking affirmative relief in a court is tantamount to voluntary
personal status of the plaintiffs; (2) when the action relates to, or the subject appearance therein. Thus, in Philippine Commercial International Bank v. Dy
of which is property, within the Philippines, in which the defendant claims a lien Hong Pi, 588 SCRA 612 (2009), wherein defendants filed a “Motion for
or an interest, actual or contingent; (3) when the relief demanded in such action Inhibition without submitting themselves to the jurisdiction of this Honorable
consists, wholly or in part, in excluding the defendant from any interest in Court” subsequent to their filing of a “Motion to Dismiss (for Lack of
property located in the Philippines; and (4) when the defendant non-resident’s Jurisdiction),” we held: Besides, any lingering doubts on the issue of voluntary
property has been attached within the Philippines. In these instances, service appearance dissipate when the respondents’ motion for inhibition is
of summons may be effected by (a) personal service out of the country, with considered. This motion seeks a sole relief: inhibition of Judge Napoleon
leave of court; (b) publication, also with leave of court; or (c) any other manner Inoturan from further hearing the case. Evidently, by seeking affirmative relief
the court may deem sufficient. other than dismissal of the case, respondents manifested their voluntary
submission to the court’s jurisdiction. It is well-settled that the active
Same; Same; Same; Same; Extraterritorial service of summons applies participation of a party in the proceedings is tantamount to an invocation of the
only where the action is in rem or quasi in rem but not if an action is in court’s jurisdiction and a willingness to abide by the resolution of the case, and
personam.—Proceeding from this enumeration, we held in Perkin Elmer will bar said party from later on impugning the court’s jurisdiction.
Singapore Pte Ltd. v. Dakila Trading Corporation, 530 SCRA 170 (2007), that:
Undoubtedly, extraterritorial service of summons applies only where the action PETITION for review on certiorari of the decision and resolution of the Court
is in rem or quasi in rem, but not if an action is in personam. When the case of Appeals.
instituted is an action in rem or quasi in rem, Philippine courts already have
jurisdiction to hear and decide the case because, in actions in rem and quasi The facts are stated in the opinion of the Court.
in rem, jurisdiction over the person of the defendant is not a prerequisite to Castillo, Laman, Tan, Pantaleon & San Jose for petitioner.
Andres, Marcelo, Padernal, Guerrero & Paras for respondent. Complaint sufficiently stated a cause of action. The other allegations in the
Motion to Dismiss were brushed aside as matters of defense which can best
DECISION be ventilated during the trial.
LEONARDO-DE CASTRO, J.: On December 27, 2005, petitioner filed a Motion for Reconsideration.7 On
March 6, 2006, the trial court issued an Order denying the December 27,
2005 Motion for Reconsideration and disallowed the twin Motions for Leave
This is a Petition for Review on Certiorari assailing the Decision1 of the Court
to take deposition and serve written interrogatories.8
of Appeals dated September 8, 2006 in CA-G.R. SP No. 94382 and its
Resolution2 dated December 12, 2006, denying the Motion for
Reconsideration. On April 3, 2006, petitioner sought redress via a Petition for Certiorari9 with
the Court of Appeals, alleging that the trial court committed grave abuse of
discretion in denying its Motion to Dismiss. The Petition was docketed as CA-
On August 30, 2005, respondent Lepanto Consolidated Mining Company
G.R. SP No. 94382.
filed with the Regional Trial Court (RTC) of Makati City a Complaint3 against
petitioner NM Rothschild & Sons (Australia) Limited praying for a judgment
declaring the loan and hedging contracts between the parties void for being On September 8, 2006, the Court of Appeals rendered the assailed Decision
contrary to Article 20184 of the Civil Code of the Philippines and for damages. dismissing the Petition for Certiorari. The Court of Appeals ruled that since
The Complaint was docketed as Civil Case No. 05-782, and was raffled to the denial of a Motion to Dismiss is an interlocutory order, it cannot be the
Branch 150. Upon respondent’s (plaintiff’s) motion, the trial court authorized subject of a Petition for Certiorari, and may only be reviewed in the ordinary
respondent’s counsel to personally bring the summons and Complaint to the course of law by an appeal from the judgment after trial. On December 12,
Philippine Consulate General in Sydney, Australia for the latter office to effect 2006, the Court of Appeals rendered the assailed Resolution denying the
service of summons on petitioner (defendant). petitioner’s Motion for Reconsideration.
On October 20, 2005, petitioner filed a Special Appearance With Motion to Meanwhile, on December 28, 2006, the trial court issued an Order directing
Dismiss5 praying for the dismissal of the Complaint on the following grounds: respondent to answer some of the questions in petitioner’s Interrogatories to
(a) the court has not acquired jurisdiction over the person of petitioner due to Plaintiff dated September 7, 2006.
the defective and improper service of summons; (b) the Complaint failed to
state a cause of action and respondent does not have any against petitioner; Notwithstanding the foregoing, petitioner filed the present petition assailing
(c) the action is barred by estoppel; and (d) respondent did not come to court the September 8, 2006 Decision and the December 12, 2006 Resolution of
with clean hands. the Court of Appeals. Arguing against the ruling of the appellate court,
petitioner insists that (a) an order denying a motion to dismiss may be the
On November 29, 2005, petitioner filed two Motions: (1) a Motion for Leave proper subject of a petition for certiorari; and (b) the trial court committed
to take the deposition of Mr. Paul Murray (Director, Risk Management of grave abuse of discretion in not finding that it had not validly acquired
petitioner) before the Philippine Consul General; and (2) a Motion for Leave jurisdiction over petitioner and that the plaintiff had no cause of action.
to Serve Interrogatories on respondent.
Respondent, on the other hand, posits that: (a) the present Petition should be
On December 9, 2005, the trial court issued an Order6 denying the Motion to dismissed for not being filed by a real party in interest and for lack of a proper
Dismiss. According to the trial court, there was a proper service of summons verification and certificate of non-forum shopping; (b) the Court of Appeals
through the Department of Foreign Affairs (DFA) on account of the fact that correctly ruled that certiorari was not the proper remedy; and (c) the trial
the defendant has neither applied for a license to do business in the court correctly denied petitioner’s motion to dismiss.
Philippines, nor filed with the Securities and Exchange Commission (SEC) a
Written Power of Attorney designating some person on whom summons and Our discussion of the issues raised by the parties follows:
other legal processes maybe served. The trial court also held that the
Whether petitioner is a real party in interest be benefited or injured by the judgment in the suit, or the party entitled to the
avails of the suit.14 There is no doubt in our minds that the party who filed the
Respondent argues that the present Petition should be dismissed on the present Petition, having presented sufficient evidence of its identity and being
ground that petitioner no longer existed as a corporation at the time said represented by the same counsel as that of the defendant in the case sought
Petition was filed on February 1, 2007. Respondent points out that as of the to be dismissed, is the entity that will be benefited if this Court grants the
date of the filing of the Petition, there is no such corporation that goes by the dismissal prayed for.
name NM Rothschild and Sons (Australia) Limited. Thus, according to
respondent, the present Petition was not filed by a real party in interest, citing Since the main objection of respondent to the verification and certification
our ruling in Philips Export B.V. v. Court of Appeals,10 wherein we held: against forum shopping likewise depends on the supposed inexistence of the
corporation named therein, we give no credit to said objection in light of the
A name is peculiarly important as necessary to the very existence of a foregoing discussion.
corporation (American Steel Foundries vs. Robertson, 269 US 372, 70 L ed
317, 46 S Ct 160; Lauman vs. Lebanon Valley R. Co., 30 Pa 42; First Propriety of the Resort to a Petition for Certiorari with the Court of
National Bank vs. Huntington Distilling Co., 40 W Va 530, 23 SE 792). Its Appeals
name is one of its attributes, an element of its existence, and essential to its
identity (6 Fletcher [Perm Ed], pp. 3-4). The general rule as to corporations is We have held time and again that an order denying a Motion to Dismiss is an
that each corporation must have a name by which it is to sue and be sued interlocutory order which neither terminates nor finally disposes of a case as
and do all legal acts. The name of a corporation in this respect designates it leaves something to be done by the court before the case is finally decided
the corporation in the same manner as the name of an individual designates on the merits. The general rule, therefore, is that the denial of a Motion to
the person (Cincinnati Cooperage Co. vs. Bate, 96 Ky 356, 26 SW 538; Dismiss cannot be questioned in a special civil action for Certiorari which is a
Newport Mechanics Mfg. Co. vs. Starbird, 10 NH 123); and the right to use remedy designed to correct errors of jurisdiction and not errors of judgment. 15
its corporate name is as much a part of the corporate franchise as any other However, we have likewise held that when the denial of the Motion to
privilege granted (Federal Secur. Co. vs. Federal Secur. Corp., 129 Or 375, Dismiss is tainted with grave abuse of discretion, the grant of the
276 P 1100, 66 ALR 934; Paulino vs. Portuguese Beneficial Association, 18 extraordinary remedy of Certiorari may be justified. By "grave abuse of
RI 165, 26 A 36).11 discretion" is meant:
In its Memorandum12 before this Court, petitioner started to refer to itself as [S]uch capricious and whimsical exercise of judgment that is equivalent to
Investec Australia Limited (formerly "NM Rothschild & Sons [Australia] lack of jurisdiction. The abuse of discretion must be grave as where the
Limited") and captioned said Memorandum accordingly. Petitioner claims that power is exercised in an arbitrary or despotic manner by reason of passion or
NM Rothschild and Sons (Australia) Limited still exists as a corporation under personal hostility, and must be so patent and gross as to amount to an
the laws of Australia under said new name. It presented before us evasion of positive duty or to a virtual refusal to perform the duty enjoined by
documents evidencing the process in the Australian Securities & Investment or to act all in contemplation of law.16
Commission on the change of petitioner’s company name from NM
Rothschild and Sons (Australia) Limited to Investec Australia Limited. 13
The resolution of the present Petition therefore entails an inquiry into whether
the Court of Appeals correctly ruled that the trial court did not commit grave
We find the submissions of petitioner on the change of its corporate name abuse of discretion in its denial of petitioner’s Motion to Dismiss. A mere
satisfactory and resolve not to dismiss the present Petition for Review on the error in judgment on the part of the trial court would undeniably be
ground of not being prosecuted under the name of the real party in interest. inadequate for us to reverse the disposition by the Court of Appeals.
While we stand by our pronouncement in Philips Export on the importance of
the corporate name to the very existence of corporations and the significance Issues more properly ventilated during the trial of the case
thereof in the corporation’s right to sue, we shall not go so far as to dismiss a
case filed by the proper party using its former name when adequate
identification is presented. A real party in interest is the party who stands to As previously stated, petitioner seeks the dismissal of Civil Case No. 05-782
on the following grounds: (a) lack of jurisdiction over the person of petitioner
due to the defective and improper service of summons; (b) failure of the The flaw in this conclusion is that, while conveniently echoing the general
Complaint to state a cause of action and absence of a cause of action; (c) rule that averments in the complaint are deemed hypothetically admitted
the action is barred by estoppel; and (d) respondent did not come to court upon the filing of a motion to dismiss grounded on the failure to state a cause
with clean hands. of action, it did not take into account the equally established limitations to
such rule, i.e., that a motion to dismiss does not admit the truth of mere
As correctly ruled by both the trial court and the Court of Appeals, the alleged epithets of fraud; nor allegations of legal conclusions; nor an erroneous
absence of a cause of action (as opposed to the failure to state a cause of statement of law; nor mere inferences or conclusions from facts not stated;
action), the alleged estoppel on the part of petitioner, and the argument that nor mere conclusions of law; nor allegations of fact the falsity of which is
respondent is in pari delicto in the execution of the challenged contracts, are subject to judicial notice; nor matters of evidence; nor surplusage and
not grounds in a Motion to Dismiss as enumerated in Section 1, Rule 1617 of irrelevant matter; nor scandalous matter inserted merely to insult the
the Rules of Court. Rather, such defenses raise evidentiary issues closely opposing party; nor to legally impossible facts; nor to facts which appear
related to the validity and/or existence of respondent’s alleged cause of unfounded by a record incorporated in the pleading, or by a document
action and should therefore be threshed out during the trial. referred to; and, nor to general averments contradicted by more specific
averments. A more judicious resolution of a motion to dismiss, therefore,
necessitates that the court be not restricted to the consideration of the facts
As regards the allegation of failure to state a cause of action, while the same
is usually available as a ground in a Motion to Dismiss, said ground cannot alleged in the complaint and inferences fairly deducible therefrom. Courts
may consider other facts within the range of judicial notice as well as relevant
be ruled upon in the present Petition without going into the very merits of the
laws and jurisprudence which the courts are bound to take into account, and
main case.
they are also fairly entitled to examine records/documents duly
incorporated into the complaint by the pleader himself in ruling on the
It is basic that "[a] cause of action is the act or omission by which a party demurrer to the complaint.24 (Emphases supplied.)
violates a right of another."18 Its elements are the following: (1) a right
existing in favor of the plaintiff, (2) a duty on the part of the defendant to
In the case at bar, respondent asserts in the Complaint that the Hedging
respect the plaintiff's right, and (3) an act or omission of the defendant in
Contracts are void for being contrary to Article 2018 25 of the Civil Code.
violation of such right.19 We have held that to sustain a Motion to Dismiss for
Respondent claims that under the Hedging Contracts, despite the express
lack of cause of action, the complaint must show that the claim for relief does
not exist and not only that the claim was defectively stated or is ambiguous, stipulation for deliveries of gold, the intention of the parties was allegedly
indefinite or uncertain.20 merely to compel each other to pay the difference between the value of the
gold at the forward price stated in the contract and its market price at the
supposed time of delivery.
The trial court held that the Complaint in the case at bar contains all the three
elements of a cause of action, i.e., it alleges that: (1) plaintiff has the right to
ask for the declaration of nullity of the Hedging Contracts for being null and Whether such an agreement is void is a mere allegation of a conclusion of
void and contrary to Article 2018 of the Civil Code of the Philippines; (2) law, which therefore cannot be hypothetically admitted. Quite properly, the
relevant portions of the contracts sought to be nullified, as well as a copy of
defendant has the corresponding obligation not to enforce the Hedging
the contract itself, are incorporated in the Complaint. The determination of
Contracts because they are in the nature of wagering or gambling
whether or not the Complaint stated a cause of action would therefore
agreements and therefore the transactions implementing those contracts are
involve an inquiry into whether or not the assailed contracts are void under
null and void under Philippine laws; and (3) defendant ignored the advice and
intends to enforce the Hedging Contracts by demanding financial payments Philippine laws. This is, precisely, the very issue to be determined in Civil
due therefrom.21 Case No. 05-782. Indeed, petitioner’s defense against the charge of nullity of
the Hedging Contracts is the purported intent of the parties that actual
deliveries of gold be made pursuant thereto. Such a defense requires the
The rule is that in a Motion to Dismiss, a defendant hypothetically admits the presentation of evidence on the merits of the case. An issue that "requires
truth of the material allegations of the ultimate facts contained in the plaintiff's the contravention of the allegations of the complaint, as well as the full
complaint.22 However, this principle of hypothetical admission admits of ventilation, in effect, of the main merits of the case, should not be within the
exceptions. Thus, in Tan v. Court of Appeals, 23 we held:
province of a mere Motion to Dismiss."26 The trial court, therefore, correctly This is a significant amendment of the former Section 14 of said rule which
denied the Motion to Dismiss on this ground. previously provided:
It is also settled in jurisprudence that allegations of estoppel and bad faith Sec. 14. Service upon private foreign corporations. — If the defendant is a
require proof. Thus, in Parañaque Kings Enterprises, Inc. v. Court of foreign corporation, or a nonresident joint stock company or association,
Appeals,27 we ruled: doing business in the Philippines, service may be made on its resident
agent designated in accordance with law for that purpose, or if there be no
Having come to the conclusion that the complaint states a valid cause of such agent, on the government official designated by law to that effect, or on
action for breach of the right of first refusal and that the trial court should thus any of its officers or agents within the Philippines. (Emphasis supplied.)
not have dismissed the complaint, we find no more need to pass upon the
question of whether the complaint states a cause of action for damages or The coverage of the present rule is thus broader.30 Secondly, the service of
whether the complaint is barred by estoppel or laches. As these matters summons to petitioner through the DFA by the conveyance of the summons
require presentation and/or determination of facts, they can be best to the Philippine Consulate General in Sydney, Australia was clearly made
resolved after trial on the merits.28 (Emphases supplied.) not through the above-quoted Section 12, but pursuant to Section 15 of the
same rule which provides:
On the proposition in the Motion to Dismiss that respondent has come to
court with unclean hands, suffice it to state that the determination of whether Sec. 15. Extraterritorial service. – When the defendant does not reside and is
one acted in bad faith and whether damages may be awarded is evidentiary not found in the Philippines, and the action affects the personal status of the
in nature. Thus, we have previously held that "[a]s a matter of defense, it can plaintiff or relates to, or the subject of which is property within the Philippines,
be best passed upon after a full-blown trial on the merits."29 in which the defendant has or claims a lien or interest, actual or contingent,
or in which the relief demanded consists, wholly or in part, in excluding the
Jurisdiction over the person of petitioner defendant from any interest therein, or the property of the defendant has
been attached within the Philippines, service may, by leave of court, be
Petitioner alleges that the RTC has not acquired jurisdiction over its person effected out of the Philippines by personal service as under section 6; or by
on account of the improper service of summons. Summons was served on publication in a newspaper of general circulation in such places and for such
time as the court may order, in which case a copy of the summons and order
petitioner through the DFA, with respondent’s counsel personally bringing the
of the court shall be sent by registered mail to the last known address of the
summons and Complaint to the Philippine Consulate General in Sydney,
defendant, or in any other manner the court may deem sufficient. Any order
Australia.
granting such leave shall specify a reasonable time, which shall not be less
than sixty (60) days after notice, within which the defendant must answer.
In the pleadings filed by the parties before this Court, the parties entered into
a lengthy debate as to whether or not petitioner is doing business in the
Respondent argues31 that extraterritorial service of summons upon foreign
Philippines. However, such discussion is completely irrelevant in the case at
bar, for two reasons. Firstly, since the Complaint was filed on August 30, private juridical entities is not proscribed under the Rules of Court, and is in
fact within the authority of the trial court to adopt, in accordance with Section
2005, the provisions of the 1997 Rules of Civil Procedure govern the service
of summons. Section 12, Rule 14 of said rules provides: 6, Rule 135:
Sec. 6. Means to carry jurisdiction into effect. – When by law jurisdiction is

Sec. 12. Service upon foreign private juridical entity. – When the defendant is
a foreign private juridical entity which has transacted business in the conferred on a court or judicial officer, all auxiliary writs, processes and other
Philippines, service may be made on its resident agent designated in means necessary to carry it into effect may be employed by such court or
accordance with law for that purpose, or, if there be no such agent, on the officer; and if the procedure to be followed in the exercise of such jurisdiction
government official designated by law to that effect, or on any of its officers is not specifically pointed out by law or by these rules, any suitable process
or mode of proceeding may be adopted which appears comformable to the
or agents within the Philippines. (Emphasis supplied.)
spirit of said law or rules.
Section 15, Rule 14, however, is the specific provision dealing precisely with In Domagas v. Jensen,35 we held that:
the service of summons on a defendant which does not reside and is not
found in the Philippines, while Rule 135 (which is in Part V of the Rules of [T]he aim and object of an action determine its character. Whether a
Court entitled Legal Ethics) concerns the general powers and duties of courts proceeding is in rem, or in personam, or quasi in rem for that matter, is
and judicial officers. determined by its nature and purpose, and by these only. A proceeding in
personam is a proceeding to enforce personal rights and obligations brought
Breaking down Section 15, Rule 14, it is apparent that there are only four against the person and is based on the jurisdiction of the person, although it
instances wherein a defendant who is a non-resident and is not found in the may involve his right to, or the exercise of ownership of, specific property, or
country may be served with summons by extraterritorial service, to wit: (1) seek to compel him to control or dispose of it in accordance with the mandate
when the action affects the personal status of the plaintiffs; (2) when the of the court. The purpose of a proceeding in personam is to impose, through
action relates to, or the subject of which is property, within the Philippines, in the judgment of a court, some responsibility or liability directly upon the
which the defendant claims a lien or an interest, actual or contingent; (3) person of the defendant. Of this character are suits to compel a defendant to
when the relief demanded in such action consists, wholly or in part, in specifically perform some act or actions to fasten a pecuniary liability on
excluding the defendant from any interest in property located in the him.36
Philippines; and (4) when the defendant non-resident's property has been
attached within the Philippines. In these instances, service of summons may It is likewise settled that "[a]n action in personam is lodged against a person
be effected by (a) personal service out of the country, with leave of court; (b) based on personal liability; an action in rem is directed against the thing itself
publication, also with leave of court; or (c) any other manner the court may instead of the person; while an action quasi in rem names a person as
deem sufficient.32 defendant, but its object is to subject that person’s interest in a property to a
corresponding lien or obligation."37
Proceeding from this enumeration, we held in Perkin Elmer Singapore Pte
Ltd. v. Dakila Trading Corporation33 that: The Complaint in the case at bar is an action to declare the loan and
Hedging Contracts between the parties void with a prayer for damages.
Undoubtedly, extraterritorial service of summons applies only where It is a suit in which the plaintiff seeks to be freed from its obligations to the
the action is in rem or quasi in rem, but not if an action is in personam. defendant under a contract and to hold said defendant pecuniarily liable to
the plaintiff for entering into such contract. It is therefore an action in
When the case instituted is an action in rem or quasi in rem, Philippine courts personam, unless and until the plaintiff attaches a property within the
already have jurisdiction to hear and decide the case because, in actions in Philippines belonging to the defendant, in which case the action will be
rem and quasi in rem, jurisdiction over the person of the defendant is not a converted to one quasi in rem.
prerequisite to confer jurisdiction on the court, provided that the court
acquires jurisdiction over the res. Thus, in such instance, extraterritorial Since the action involved in the case at bar is in personam and since the
service of summons can be made upon the defendant. The said defendant, petitioner Rothschild/Investec, does not reside and is not found in
extraterritorial service of summons is not for the purpose of vesting the court the Philippines, the Philippine courts cannot try any case against it because
with jurisdiction, but for complying with the requirements of fair play or due of the impossibility of acquiring jurisdiction over its person unless it voluntarily
process, so that the defendant will be informed of the pendency of the action appears in court.38
against him and the possibility that property in the Philippines belonging to
him or in which he has an interest may be subjected to a judgment in favor of In this regard, respondent vigorously argues that petitioner should be held to
the plaintiff, and he can thereby take steps to protect his interest if he is so have voluntarily appeared before the trial court when it prayed for, and was
minded. On the other hand, when the defendant or respondent does not actually afforded, specific reliefs from the trial court. 39 Respondent points out
reside and is not found in the Philippines, and the action involved is in that while petitioner’s Motion to Dismiss was still pending, petitioner prayed
personam, Philippine courts cannot try any case against him because for and was able to avail of modes of discovery against respondent, such as
of the impossibility of acquiring jurisdiction over his person unless he written interrogatories, requests for admission, deposition, and motions for
voluntarily appears in court.34 (Emphases supplied.) production of documents.40
Petitioner counters that under this Court’s ruling in the leading case of La complaint, can still be made to answer for a cause of action which accrued
Naval Drug Corporation v. Court of Appeals,41 a party may file a Motion to while it was doing business, is another matter that would yet have to await
Dismiss on the ground of lack of jurisdiction over its person, and at the same the reception and admission of evidence. Since these points have
time raise affirmative defenses and pray for affirmative relief, without waiving seasonably been raised by the petitioner, there should be no real cause
its objection to the acquisition of jurisdiction over its person. 42 for what may understandably be its apprehension, i.e., that by its
participation during the trial on the merits, it may, absent an invocation
It appears, however, that petitioner misunderstood our ruling in La Naval. A of separate or independent reliefs of its own, be considered to have
close reading of La Naval reveals that the Court intended a distinction voluntarily submitted itself to the court's jurisdiction."43 (Emphases
between the raising of affirmative defenses in an Answer (which would not supplied.)
amount to acceptance of the jurisdiction of the court) and the prayer for
affirmative reliefs (which would be considered acquiescence to the In order to conform to the ruling in La Naval, which was decided by this Court
jurisdiction of the court): in 1994, the former Section 23, Rule 1444 concerning voluntary appearance
was amended to include a second sentence in its equivalent provision in the
In the same manner that a plaintiff may assert two or more causes of 1997 Rules of Civil Procedure:
action in a court suit, a defendant is likewise expressly allowed, under
Section 2, Rule 8, of the Rules of Court, to put up his own defenses SEC. 20. Voluntary appearance. – The defendant's voluntary appearance in
alternatively or even hypothetically. Indeed, under Section 2, Rule 9, of the action shall be equivalent to service of summons. The inclusion in a
the Rules of Court, defenses and objections not pleaded either in a motion to motion to dismiss of other grounds aside from lack of jurisdiction over
dismiss or in an answer, except for the failure to state a cause of action, are the person of the defendant shall not be deemed a voluntary
deemed waived. We take this to mean that a defendant may, in fact, feel appearance. (Emphasis supplied.)
enjoined to set up, along with his objection to the court's jurisdiction over his
person, all other possible defenses. It thus appears that it is not the The new second sentence, it can be observed, merely mentions other
invocation of any of such defenses, but the failure to so raise them, that can grounds in a Motion to Dismiss aside from lack of jurisdiction over the person
result in waiver or estoppel. By defenses, of course, we refer to the of the defendant. This clearly refers to affirmative defenses, rather than
grounds provided for in Rule 16 of the Rules of Court that must be affirmative reliefs.
asserted in a motion to dismiss or by way of affirmative defenses in an
answer.
Thus, while mindful of our ruling in La Naval and the new Section 20, Rule
20, this Court, in several cases, ruled that seeking affirmative relief in a court
Mindful of the foregoing, in Signetics Corporation vs. Court of Appeals is tantamount to voluntary appearance therein.45 Thus, in Philippine
and Freuhauf Electronics Phils., Inc. (225 SCRA 737, 738), we lately Commercial International Bank v. Dy Hong Pi,46 wherein defendants filed a
ruled: "Motion for Inhibition without submitting themselves to the jurisdiction of this
Honorable Court" subsequent to their filing of a "Motion to Dismiss (for Lack
"This is not to say, however, that the petitioner's right to question the of Jurisdiction)," we held:
jurisdiction of the court over its person is now to be deemed a
foreclosed matter. If it is true, as Signetics claims, that its only involvement Besides, any lingering doubts on the issue of voluntary appearance dissipate
in the Philippines was through a passive investment in Sigfil, which it even when the respondents' motion for inhibition is considered. This motion seeks
later disposed of, and that TEAM Pacific is not its agent, then it cannot really a sole relief: inhibition of Judge Napoleon Inoturan from further hearing the
be said to be doing business in the Philippines. It is a defense, however, that case. Evidently, by seeking affirmative relief other than dismissal of the
requires the contravention of the allegations of the complaint, as well as a full case, respondents manifested their voluntary submission to the court's
ventilation, in effect, of the main merits of the case, which should not thus be jurisdiction. It is well-settled that the active participation of a party in the
within the province of a mere motion to dismiss. So, also, the issue posed by proceedings is tantamount to an invocation of the court's jurisdiction and a
the petitioner as to whether a foreign corporation which has done business in willingness to abide by the resolution of the case, and will bar said party from
the country, but which has ceased to do business at the time of the filing of a later on impugning the court's jurisdiction.47 (Emphasis supplied.)1âwphi1
In view of the above, we therefore rule that petitioner, by seeking affirmative

reliefs from the trial court, is deemed to have voluntarily submitted to the
jurisdiction of said court. A party cannot invoke the jurisdiction of a court to
secure affirmative relief against his opponent and after obtaining or failing to
obtain such relief, repudiate or question that same jurisdiction.48
Consequently, the trial court cannot be considered to have committed grave
abuse of discretion amounting to lack or excess of jurisdiction in the denial of
the Motion to Dismiss on account of failure to acquire jurisdiction over the
person of the defendant.
WHEREFORE, the Petition for Review on Certiorari is DENIED. The

Decision of the Court of Appeals dated September 8, 2006 and its Resolution
dated December 12, 2006 in CA-G.R. SP No. 94382 are hereby AFFIRMED.
No pronouncement as to costs.
G.R. No. 206653 February 25, 2015 PETITION for review on certiorari of the decision and resolution of the Court
of Appeals.
YUK LING ONG, Petitioner,
vs. The facts are stated in the opinion of the Court.
BENJAMIN T. CO, Respondent. Ephraim B. Cortez for petitioner.
Remedial Law; Civil Procedure; Annulment of Judgment; Rule 47 of the Mark John F. Dumbrique for respondent.
1997 Rules of Civil Procedure, as amended, governs actions for annulment of
judgments or final orders and resolutions, and Section 2 thereof explicitly DECISION
provides only two (2) grounds for annulment of judgment, that is, extrinsic fraud
and lack of jurisdiction.—Annulment of judgment is a recourse equitable in MENDOZA, J.:
character, allowed only in exceptional cases as where there is no available or
other adequate remedy. Rule 47 of the 1997 Rules of Civil Procedure, as In court proceedings, there is no right more cherished than the right of every
amended, governs actions for annulment of judgments or final orders and litigant to be given an opportunity to be heard. This right begins at the very
resolutions, and Section 2 thereof explicitly provides only two grounds for moment that summons is served on the defendant. The Rules of Court
annulment of judgment, that is, extrinsic fraud and lack of jurisdiction. places utmost importance in ensuring that the defendant personally grasp the
Annulment of judgment is an equitable principle not because it allows a party- weight of responsibility that will befall him. Thus, it is only in exceptional
litigant another opportunity to reopen a judgment that has long lapsed into circumstances that constructive notification, or substituted service of
finality but because it enables him to be discharged from the burden of being summons, is allowed. If the server falls short of the rigorous requirements for
bound to a judgment that is an absolute nullity to begin with. substituted service of summons, then the Court has no other option but to
strike down a void judgment, regardless of the consequences. This is a
Same; Same; Same; Lack of jurisdiction on the part of the trial court in petition for review on certiorari seeking to reverse and set aside the June 27,
rendering the judgment or final order is either lack of jurisdiction over the 2012 Decision1 and the March 26, 2013 Resolution2 of the Court of Appeals
subject matter or nature of the action, or lack of jurisdiction over the person of (CA)in CA-G.R. SP No. 106271, which denied the petition for annulment of
the petitioner.—Lack of jurisdiction on the part of the trial court in rendering the judgment.
judgment or final order is either lack of jurisdiction over the subject matter or
nature of the action, or lack of jurisdiction over the person of the petitioner. The The Facts
former is a matter of substantive law because statutory law defines the
jurisdiction of the courts over the subject matter or nature of the action. The Petitioner Yuk Ling Ong (petitioner), a British-Hong Kong national, and
latter is a matter of procedural law, for it involves the service of summons or respondent Benjamin Co (respondent), a Filipino citizen, were married on
other processes on the petitioner. October 3, 1982 at Ellinwood-Malate Church.3
Same; Same; Same; Jurisdiction over the defendant is acquired either upon a Sometime in November 2008, petitioner received a subpoena from the
valid service of summons or the defendant’s voluntary appearance in court.— Bureau of Immigration and Deportation (BID)directing her to appear before
In the present case, petitioner contends that there was lack of jurisdiction over the said agency because her permanent residence visa was being subjected
her person because there was an invalid substituted service of summons. to cancellation proceedings. Reportedly, her marriage with respondent was
Jurisdiction over the defendant is acquired either upon a valid service of nullified by the court.
summons or the defendant’s voluntary appearance in court. If the defendant
does not voluntarily appear in court, jurisdiction can be acquired by personal When petitioner appeared before the BID, she was furnished with the copies
or substituted service of summons as laid out under Sections 6 and 7 of Rule of the following documents: (1) petition for declaration of nullity of marriage
14 of the Rules of Court. filed as Civil Case No. CV-01-0177; (2) petition for declaration of nullity of
marriage docketed as Civil Case No. 02-0306; (3) Decision,4 dated
December 11, 2002, in Civil Case No. 02-0306 of the Regional Trial Court, Ruling of the Court of Appeals
Branch 260 (RTC), Parañaque City, declaring the marriage between
petitioner and respondent as void ab initio; and (4) their marriage contract5 On June 27, 2012, the CA rendered the assailed decision finding the petition
with the subject decision annotated thereon. Petitioner was perplexed that for annulment of judgment to be devoid of merit. It held that there was no
her marriage with respondent had been declared void ab initio. The above sufficient proof to establish that respondent employed fraud to insure
documents showed that on April 26, 2001, respondent filed a petition for petitioner’s non-participation in the trial of Civil Case No. CV-01-0177.
declaration of nullity6 on the ground of psychological incapacity before the
RTC, which was docketed as Civil Case No. CV-01-0177. Respondent stated
Relying on Robinson v. Miralles,13 the CA further ruled that the substituted
that petitioner’s address was 600 Elcano St., Binondo, Manila. There was no
service of summons in Civil Case No. 02-0306 was valid. It found that there
showing of its status, whether pending, withdrawn or terminated. On July 19, was a customary practice in petitioner’s townhouse that the security guard
2002, respondent filed another petition for declaration of Nullity7 on the would first entertain any visitors and receive any communication in behalf of
ground of psychological incapacity before the RTC, docketed as Civil Case
the homeowners. With this set-up, it was obviously impossible for the
No. 02-0306. Respondent indicated that petitioner’s address was 23 Sta.
process server to personally serve the summons upon petitioner. It also
Rosa Street, Unit B-2 Manresa Garden Homes, Quezon City. On July 29,
declared that the process server’s return carries with it the presumption of
2002, the RTC issued summons.8 In his Server’s Return,9 process server
regularity in the discharge of a public officer’s duties and functions.
Rodolfo Torres, Jr. stated that, on August 1, 2002, substituted service of
summons with the copy of the petition was effected after several futile
attempts to serve the same personally on petitioner. The said documents Petitioner moved for reconsideration, but her motion was denied by the CA in
were received by Mr. Roly Espinosa, a security officer. its Resolution,14 dated March 26, 2013.
On December 11, 2002, the RTC rendered a decision10 in Civil Case No. Hence, this petition, anchored on the following
02-0306 finding respondent’s marriage with petitioner as void ab initio on the
ground of psychological incapacity under Article 36 of the Family Code. It ISSUES
stated that summons was served on petitioner on August 1, 2002, but she
failed to file her responsive pleading within the reglementary period. The 1. Whether or not the Trial Court in Civil Case No. 02-0306 validly
public prosecutor also stated that there were no indicative facts to manifest acquired jurisdiction over the person of the petitioner.
collusion. Thus, the RTC concluded that petitioner was psychologically
incapacitated to perform her essential marital obligations. 2. Whether or not the facts proven by the petitioner constitute
extrinsic fraud within the purview of Rule 47 of the Rules of Court.15
Consequently, petitioner filed a petition for annulment of judgment11 under
Rule 47 of the Rules of Court before the CA on November 24, 2008, claiming Petitioner argues that there was an invalid substituted service of
that she was never notified of the cases filed against her. She prayed that the summons.1âwphi1 The process server’s return only contained a general
RTC decision, dated December 11, 2002, in Civil Case No. 02-0306, be statement that substituted service was resorted to "after several futile
nullified on the grounds of extrinsic fraud and lack of jurisdiction. Petitioner attempts to serve the same personally,"16 without stating the dates and
alleged that first, respondent committed extrinsic fraud because, as seen in reasons of the failed attempts. Petitioner also reiterates her argument that
Civil Case No. CV-01-0177, he deliberately indicated a wrong address to extrinsic fraud was employed.
prevent her from participating in the trial; second, jurisdiction over her person
was not acquired in Civil Case No. 02-0306 because of an invalid substituted
In his Comment,17 filed on July 9, 2014, respondent contended that the
service of summons as no sufficient explanation, showing impossibility of
server’s return satisfactorily stated the reason for the resort to a substituted
personal service, was stated before resorting to substituted service of
service of summons on August 1, 2002; and it was improbable that petitioner
summons; third, the alleged substituted service was made on a security
failed to receive the summons because it was sent to the same address
guard of their townhouse and not on a member of her household; and fourth,
which she declared in this present petition.
she was not psychologically incapacitated to perform her marital
obligations.12
Petitioner filed her Reply18 on October 8, 2014 reiterating her previous Sec. 7. Substituted Service. - If, for justifiable causes, the defendant cannot
arguments. be served within a reasonable time as provided in the preceding section,
service may be effected (a) by leaving copies of the summons at the
The Court’s Ruling defendant's residence with some person of suitable age and discretion then
residing therein, or (b) by leaving the copies at defendant's office or regular
place of business with some competent person in charge thereof.
The Court finds merit in the petition.
The landmark case of Manotoc v. CA (Manotoc)23 thoroughly discussed the

Annulment of judgment is a recourse equitable in character, allowed only in
exceptional cases as where there is no available or other adequate remedy. rigorous requirements of a substituted service of summons, to wit: xxx
Rule 47 of the 1997 Rules of Civil Procedure, as amended, governs actions
for annulment of judgments or final orders and resolutions, and Section 2 (1) Impossibility of Prompt Personal Service
thereof explicitly provides only two grounds for annulment of judgment, that
is, extrinsic fraud and lack of jurisdiction.19 Annulment of judgment is an xxx
equitable principle not because it allows a party-litigant another opportunity to
reopen a judgment that has long lapsed into finality but because it enables For substituted service of summons to be available, there must be several
him to be discharged from the burden of being bound to a judgment that is an attempts by the sheriff to personally serve the summons within a reasonable
absolute nullity to begin with.20 period of one month which eventually resulted in failure to prove impossibility
of prompt service. "Several attempts" means at least three (3) tries,
Petitioner raises two grounds to support her claim for annulment of judgment: preferably on at least two different dates. In addition, the sheriff must cite
(1) extrinsic fraud and (2) lack of jurisdiction. Her contention on the existence why such efforts were unsuccessful. It is only then that impossibility of
of extrinsic fraud, however, is too unsubstantial to warrant consideration. The service can be confirmed or accepted.
discussion shall then focus on the ground of lack of jurisdiction.
(2) Specific Details in the Return
Lack of jurisdiction on the part of the trial court in rendering the judgment or
final order is either lack of jurisdiction over the subject matter or nature of the The sheriff must describe in the Return of Summons the facts and
action, or lack of jurisdiction over the person of the petitioner. The former is a circumstances surrounding the attempted personal service. The efforts made
matter of substantive law because statutory law defines the jurisdiction of the to find the defendant and the reasons behind the failure must be clearly
courts over the subject matter or nature of the action. The latter is a matter of narrated in detail in the Return. The date and time of the attempts on
procedural law, for it involves the service of summons or other processes on personal service, the inquiries made to locate the defendant, the name/s of
the petitioner.21 the occupants of the alleged residence or house of defendant and all other
acts done, though futile, to serve the summons on defendant must be
In the present case, petitioner contends that there was lack of jurisdiction specified in the Return to justify substituted service.
over her person because there was an invalid substituted service of
summons. Jurisdiction over the defendant is acquired either upon a valid (3) A Person of Suitable Age and Discretion
service of summons or the defendant's voluntary appearance in court.22 If
the defendant does not voluntarily appear in court, jurisdiction can be
xxx
acquired by personal or substituted service of summons as laid out under
Sections 6 and 7 of Rule 14 of the Rules of Court, which state:
The sheriff must therefore determine if the person found in the alleged
dwelling or residence of defendant is of legal age, what the recipient's
Sec. 6. Service in person on defendant. - Whenever practicable, the
relationship with the defendant is, and whether said person comprehends the
summons shall be served by handing a copy thereof to the defendant in
significance of the receipt of the summons and his duty to immediately
person, or, if he refuses to receive and sign for it, by tendering it to him.
deliver it to the defendant or at least notify the defendant of said receipt of
summons. These matters must be clearly and specifically described in the RODOLFO P. TORRES, JR.
Return of Summons. (Emphases and underscoring supplied) Process Server
The pronouncements of the Court in Manotoc have been applied to several (Emphasis supplied)
succeeding cases. In Pascual v. Pascual,24 the return of summons did not
show or indicate the actual exertion or positive steps taken by the officer or The server’s return utterly lacks sufficient detail of the attempts undertaken
process server in serving the summons personally to the defendant. by the process server to personally serve the summons on petitioner. The
Similarly, in Spouses Afdal v. Carlos,25 the process server’s indorsements server simply made a general statement that summons was effected after
therein failed to state that the personal service on the defendants was several futile attempts to serve the same personally. The server did not state
rendered impossible and that efforts were made to find them personally. In the specific number of attempts made to perform the personal service of
both those cases, the Court ruled that the meticulous requirements for summons; the dates and the corresponding time the attempts were made;
substituted service of summons were not met. and the underlying reason for each unsuccessful service. He did not explain
either if there were inquiries made to locate the petitioner, who was the
There are cases, however, in which Manotoc was applied, but, nevertheless, defendant in the case. These important acts to serve the summons on
it was ruled that there was no lack of jurisdiction over the person of the petitioner, though futile, must be specified in the return to justify substituted
defendant. In Sagana v. Francisco,26 the diligent efforts exerted by the service.
sheriff to locate the respondent were determined, not only based on the
sheriff's return, but also on the process server's notation and case records. In The server’s return did not describe in detail the person who received the
the case of Wong v. Factor-Koyama,27 on the other hand, even if the sheriff summons, on behalf of petitioner. It simply stated that the summons was
performed an invalid substituted service of summons, jurisdiction over the received "by Mr. Roly Espinosa of sufficient age and discretion, the Security
person of defendant was obtained because the latter had actively Officer thereat." It did not expound on the competence of the security officer
participated in trial, amounting to a voluntary appearance under Section 20 of to receive the summons.
Rule 14.28
Also, aside from the server’s return, respondent failed to indicate any portion
In the case at bench, the summons in Civil Case No. 02-030629 was issued of the records which would describe the specific attempts to personally serve
on July 29, 2002. In his server’s return,30 the process server resorted to the summons. Respondent did not even claim that petitioner made any
substituted service of summons on August 1, 2002. Surprisingly, the process voluntary appearance and actively participated in Civil Case No. 02-0306.
server immediately opted for substituted service of summons after only two
(2) days from the issuance of the summons. The server’s return stated the
The case of Robinson v. Miralles, cited by the CA, is not applicable. In that
following: case, the return described in thorough detail how the security guard refused
the sheriff’s entry despite several attempts. The defendant in the said case
SERVER’S RETURN specifically instructed the guard to prevent anybody to proceed to her
residence. In the present case, the attempts made by the process server
THIS IS TO CERTIFY THAT on August 1, 2002, substituted service of were stated in a broad and ambiguous statement.
summons with copy of petition, were effected to respondent, Yuk Ling H.
Ong, at the Unit B-2, No. 23 Sta. Rosa St., Manresa Garden Homes, The CA likewise erred in ruling that the presumption of regularity in the
Manresa Garden City, Quezon City, after several futile attempts to serve the performance of official duty could be applied in the case at bench. This p
same personally. The said documents were received by Mr. Roly Espinosa of resumption of regularity, however, was never intended to be applied even in
sufficient age and discretion, the Security Officer thereat. cases where there are no showing of substantial compliance with the
requirements of the rules of procedure. Such presumption does not apply
Therefore, respectfully returning to Court, original copy of summons, Duly where it is patent that the sheriff's or server's return is defective.31 As earlier
Served, this 2nd day of August, 2002. explained, the server's return did not comply with the stringent requirements
of substituted service of summons.
Given that the meticulous requirements in Manotoc were not met, the Court
is not inclined to uphold the CA's denial of the petition for annulment of
judgment for lack of jurisdiction over the person of petitioner because there
was an invalid substituted service of summons. Accordingly, the decision in
Civil Case No. 02-0306 must be declared null and void.
The stricter rule in substituted service of summons was meant to address

"[t]he numerous claims of irregularities in substituted service which have
spawned the filing of a great number of unnecessary special civil actions of
certiorari and appeals to higher courts, resulting in prolonged litigation and
wasteful legal expenses."32
Although the decision in Civil Case No. 02-0306 was promulgated as early as
December 11, 2002, the Court must strike it down for lack of jurisdiction over
the person of petitioner. The favorable judgment enjoyed by respondent
cannot be categorized as a genuine victory because it was fought against an
adversary, who was ignorant of the existing dispute. Whatever prize
bestowed upon the victor in such a void decision must also be undone.
Respondent, if he wishes to pursue, must start from scratch and institute his
action for declaration of nullity again; this time with petitioner fully aware and
ready for litigation.
WHEREFORE, the petition is GRANTED. The June 27, 2012 Decision and
the March 26, 2013 Resolution of the Court of Appeals in CAG.R. SP No.
106271 are hereby REVERSED and SET ASIDE. The December 11, 2002
Decision of the Regional Trial Court, Branch 260, Parañaque City is hereby
declared VOID.
SO ORDERED.

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SINGAPORE AIRLINES LIMITED, petitioner,

Same; Same; A third-party complaint involves an action separate and distinct

The non-renewal of Rayos employment contract was the natural and

WHEREFORE, the decision of the respondent Court of Appeals in CA-G.R.

Feliciano, Melo, Vitug and Francisco, JJ., concur.

failure to answer her counterclaim.29 However, the trial court dismissed

WHEREFORE, the assailed Decision of the Court of Appeals promulgated

Melo, Vitug, Panganiban, and Sandoval-Gutierrez, JJ., concur.

CCC's Motion to Dismiss the Counterclaim on Behalf of Respondents Lim

While Respondent CCC can move to dismiss the counterclaims against it by

In summary, we make the following pronouncements:

1. The counterclaims against Respondents CCC, Gregory T. Lim and

WHEREFORE, the counterclaim of defendant is hereby

SO ORDERED. 5.1 THE SPECIAL CIVIL ACTION OF CERTIORARI UNDER

Davide, Jr., Bellosillo, Panganiban and Quisumbing, JJ., concur.

Sanidad, Abaya Te, Viterbo, Enriquez & Tan for petitioner.

DECISION PANGANIBAN, J.:

On November 19, 1997, petitioner issued a Memorandum announcing that,

signed the verification. Thus, the disputed verification is in compliance with

WHEREFORE, the Petition is hereby GRANTED and the assailed

Puno, Sandoval-Gutierrez, Corona and Carpio-Morales, JJ., concur.

Gatmaytan Law Office for private respondent.

We find in the affirmative. Our examination of paragraph 9-A of the Amended

Remedial Law; Actions; Forum Shopping; Court has in a number of DECISION

EN BANC Same; Same; Same; Contract of deposit not novated by promise of

Cecilio de la Victoria and L. de la Victoria for plaintiff-appellant.

Pleading and practice; Genuineness and due execution of document;

Plaintiff-appellant Perfecto Jabalde seeks recovery of P10,000.00 allegedly

All deposits made with banking institutions during enemy occupation,

The promulgation of Executive Order No. 49 was a valid exercise of the

to promulgate such rules and regulations as he may deem necessary

notified by his opponent's pleading.' (Nery Lim-Chingco vs.

In the case at bar, the parties acted in complete disregard of or wholly

WHEREFORE, with the modification that petitioner's liability to Hodges is

Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro, Fernando, Teehankee,

R. Correa for defendant-appellant.

Jose A. David, Jr. for plaintiff-appellee.

defendant, therefore, is deemed to have admitted the

PREMISES CONSIDERED, the judgment appealed from is affirmed, with

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro,

Republic of the Philippines

Angara, Abello, Concepcion, Regala and Cruz for petitioner.

Remedial Law; Actions; Causes of Action; Essential Elements of a Cause of

WHEREFORE, in view of the foregoing:

…Payment of the billings shall be subject to the timely receipt of similar

WHEREFORE, the petition is GRANTED. The assailed Decision dated

Costs against respondent.

PETITION for review on certiorari of the decision of the Court of Appeals.

DIRECTOR OF LANDS, petitioner,

Land Registration; Actions; Res Judicata; Effect of failure to raise defense of

Second, the attempt of Monico Balila to corroborate Angeles' length of

Third, Pablito Punay, the second predecessor-in-interest of Lot No. 2855 of

As opposed to a party litigant, a witness is merely a beholder, a spectator or

A party in default may thus be cited as a witness by his co-defendants who

Of greater concern or importance in allowing the presence of Perfecta Cavili

WHEREFORE, in view of the foregoing, the petition is hereby GRANTED.

Fernan (Chairman), Feliciano, Bidin and Cortes, JJ., concur.

G.R. No. L-53880 March 17, 1994