CivPro Digests Rule 7-12

8/10/2019 CivPro Digests Rule 7-12

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Civil Procedure Case Digests | Atty. Tranquil Salvador | 2014

Dela Cruz Garcia Gervacio Gervasio Guballa Hourani Lapuz Lecaroz Ledesma Leuterio Leveriza Lim Lua Molaer Miranda Pacamarra Rivera Rovero Rubinos San Juan

Santos, D Santos, R So Chan Sorongon Tamondong Torcuator Velena Ybiernas Yogue Zerrudo

Rule 7 Parts of a Pleading

1. General Milling Corporation vs. NLRC – Pacamarra2. Mendigorin vs. Cabantog – Rovero3. Zulueta vs. Asia Brewery, Inc. – San Juan

4. Heirs of Ambrocio Kiomisola vs. Heirs of Honorio Dacut – Santos,D5. Spouses Hontiveros vs. RTC of Iloilo, Branch 25 – Sorongon6. Five Star Bus Co. vs. Court of Appeals – Torcuator7. Digital Microwave Corporation vs. Court of Appeals – Velena8. Santiago Eslaban vs. Clarita vda. De Onorio – Ybiernas9. Santos vs. Court of Appeals – Yogue

Rule 8 Manner of Making Allegations in the Pleading

1. Kalilid Wood Industries Corporation vs. IAC – Zerrudo

Rule 9 Effect of Failure to Plead

1. Rudolf Lietz Holdings, Inc. vs. the Registry of Deeds of ParañaqueCity – Dela Cruz2. Sps. Juan J. Diaz and Elizabeth Diaz vs. Jose Diaz and Court of

Appeals – Garcia3. Vlason Enterprises Corporation vs. Court of Appeals andDuraproof Services – Gervacio4. Mediserv, Inc. Hernando B. Delizo, M.D. and Marissa c. Delizo,M.D. vs. China Banking Corporation – Gervasio5. Raymundo vs. Court of Appeals – Guballa

Rule 10 Amended and Supplemental Pleadings

1. Siasoco vs. Court of Appeals – Hourani2. Versoza vs. Court of Appeals – Lapuz3. Chua vs. Court of Appeals – Lecaroz4. Francisco c. Zarate vs. RTC – Ledesma5. ARB Construction Co., Inc. and Mark Molina vs. Court of Appeals

– Miranda6. Vlason Enterprises Corporation vs. Court of Appeals – Rivera7. Sps. Bernardo Mercader and Florina M. Mercader, and Dr. JuanY. Maderazo vs. DBP – Rubinos

Rule 12 Bill of Particulars

1. Aruelo vs. Court of Appeals – Santos, R2. Tantuico, Jr. vs. Republic – So Chan3. Uy vs. Court of Appeals – Tamondong






RULE 7

1. GENERAL MILLING CORPORATION v. NLRCCertificate of Non-Forum Shopping without an attached BoardResolution is held to be valid as it was substantially complied

with.

CASE:In an adverse ruling from the decision of NLRC, General

Milling Corp. appealed to CA but the petition was likewise denied onaccount of the failure to attach the Board Resolution to prove that theone who signed the Certificate of Non-Forum Shopping was dulyauthorized by the Board of Directors. The SC held that there wassubstantial compliance. Procedural rules are relaxed in order to

promote the ends of justice.

FACTS: A complaint for illegal dismissal was filed by private

respondent Dativo M. Cacho against petitioner GeneralMilling Corporation. The Labor Arbiter found privaterespondent to have been illegally dismissed by petitioner.On appeal before it, the NLRC affirmed the findings of theLabor Arbiter.

Petitioner appealed to the Court of Appeals but the petitionwas denied for the failure of petitioner to attach the boardresolution to prove that the person who signed theCertification of Non-Forum Shopping was dulyauthorized by the board of directors of petitioner

corporation. In its motion for reconsideration, petitionerexplained that the signatory of the Certification of Non-Forum Shopping was duly authorized to make it. Thecorresponding board resolution to establish that fact wasattached to its motion for reconsideration before theappellate court. Its plea for reconsideration having beendenied, the instant petition for review was brought up to thisCourt.

ISSUES:1. Whether or not the Certificate of Non-Forum Shopping

has not been properly complied with and therefore voidfor failure to attach the Board Resolution?

HELD & RATIO: NO. Petitioner complied with this procedural requirement

except that it was not accompanied by a board resolution ora secretary’s certificate that the person who signed it wasduly authorized by petitioner to represent it in the case. Itwould appear that the signatory of the certification was, infact, duly authorized as so evidenced by a board resolutionattached to petitioner’s motion for reconsideration before theappellate court.

It could thus be said that there was at least substantialcompliance with, and that there was no attempt to ignore,the prescribed procedural requirements.

The rules of procedure are intended to promote, ratherthan frustrate, the ends of justice, and while the swiftunclogging of court dockets is a laudable objective, it,nevertheless, must not be met at the expense ofsubstantial justice. Technical and procedural rules areintended to help secure, not suppress, the cause of

justice and a deviation from the rigid enforcement of therules may be allowed to attain that prime objective for,after all, the dispensation of justice is the core reasonfor the existence of courts.

FINAL VERDICT: Petition is granted.






2. CARMELITA S. MENDIGORIN v. MARIA CABANTOGCertification against forum shopping

CASE:

Mendigorin filed a complaint before the MTC of Bulacan for

the ejectment of Cabantog who has been occupying her lot. Casewas decided before the MTC, RTC, and CA before it reached theSC. However, upon appeal in the CA, Cabantog’s certificate of non -forum shopping was not signed personally by Cabantog as requiredunder the Rules of Court. According to Cabantog, the decision of CAshould be upheld notwithstanding the absence of his signature asmere technicalities must not be used to defeat substantial rights.

WON the certificate of non-forum shopping must be personally signed by Cabantog, and if not, the case must bedismissed.

The court held herein that the petition should have beendismissed due to the defect in the certification. It must be signed by

the plaintif or any of the principal parties and not only the legalcounsel. As decided in the case of Digital Microwave v CA, thereason of this requirement is that it is the plaintiff who has actualknowledge as to the existence of proceeding upon similar actions.Cabantog failed to provide a valid explanation why he has notsigned.

Hence, petition is granted.

FACTS:

Mendigorin filed a complaint before the Municipal Trial Court(MTC) of Hagonoy, Bulacan for ejectment against Maria

Cabantog. Plaintiff owned a land in Bulacan, he allowed defendant to

occupy a portion of their land. On said portion of their land,defendant has a house standing thereon.

Defendant does not pay any amount of rental to the plaintiffamounting to P3000.

plaintiff made oral and written demands upon the defendantto vacate the 100 square meter portion of their parcel of landcovered by O.C.T. No. P-5053 (2161) of Bulacan butdefendant did not heed plaintiff’s demands.

Cabantog alleged in her answer that the 100 square metersbeing claimed by Mendigorin belonged to her, and that saidportion is part of the 350 sq. meter-lot adjudicated to her andher co-owners. She likewise alleged that Mendigorin usedfraud in order to have the said portion included in the land

area registered under her name. The MTC dismissed the complaint Aggrieved, Mendigorin appealed before the Regional Trial

Court (RTC), which reversed the MTC The CA, in its decision dated March 13, 1998, ruled in favor

of Cabantog and reversed the RTC On April 22, 1998, Mendigorin filed a motion for

reconsideration, which was denied by the CA in a resolutiondated November 17, 1998.

Mendigorin contends that the CA violated Revised CircularNo. 28-91, which is now incorporated in the Rules of Courtas Section 2 of Rule 42, when it entertained Cabantog’s

petition notwithstanding that said petition had a defectivecertificate of non-forum shopping, because it was not signedpersonally by Cabantog.

Cabantog, in turn, argues that the decision of the CA shouldbe upheld because technicalities should not be used todefeat substantial rights

ISSUES:1. Whether or not the CA erred in failing to dismiss the petition

of respondent Cabantog on the ground that she failed topersonally sign the certificate of non-forum shopping.

HELD & RATIO:

1.

CA erred in giving due course to the petition below of hereinrespondent Cabantog despite the fact that her petition wasfatally defective. The certification of non-forum shoppingmust be signed by the plaintiff or any of the principal partiesand not only the legal counsel.






Digital Microwave Corporation vs. CA, held that the reasonthe certification against forum shopping is required to beaccomplished by petitioner himself is that only the petitionerhimself has actual knowledge of whether or not he hasinitiated similar actions or proceedings in other courts or

tribunals. Even counsel of record may be unaware of suchfact. Cabantog failed to sufficiently explain the reason why her

petition before the CA was signed by her counsel only andnot by her. She also failed to show that the interest of justicewould be defeated if her petition in the CA would bedismissed for failure to attach the proper certification.

FINAL VERDICT: Petition is GRANTED. The assailed decision andresolution of the Court of Appeals is hereby REVERSED and SET

ASIDE. The decision of the Regional Trial Court of Malolos,Bulacan, Branch 12, dated December 6, 1996 is hereby

REINSTATED. No pronouncement as to costs.

3. PERLA S. ZULUETA versus ASIA BREWERY INC.Consolidation

CASE:

Respondent Asia Brewery and petitioner Zulueta (a dealer

and operator of an outlet selling the former’s products) entered into adealership agreement. Due to some violations of such dealershipagreement, Zulueta filed before RTC-Iloilo a Complaint againstrespondent for Breach of Contract, Specific Performance andDamages. During the pendency of the case in Iloilo, respondent AsiaBrewery filed with Makati RTC a Complaint for the collection of asum of money. Petitioner Zulueta moved for the consolidation of theMakati case with the Iloilo case. RTC Judge Parentala granted themotion and ordered the consolidation. Respondent filed an MR butsuch was denied. Respondent then filed a petition for certiorari in theCA. But petitioner contests the proprietary of the petition on theground that the sworn certification against forum shopping was

signed by counsel and not by the petitioner. Court ruled that suchcertificate was not valid since the requirement that the petitionershould sign the certificate of non-forum shopping applies even tocorporations, considering that the mandatory directives of theCircular and the Rules of Court make no distinction between naturaland juridical persons. In this case, the Certification should have beensigned by a duly authorized director or officer of the corporation, whohas knowledge of the matter being certified. Petitioner also faultedrespondent for the absence of a written explanation why the Petitionwith the Court of Appeals was served on her counsel by registeredmail. Court ruled on this issue by saying that indeed respondenterred in failing to include such an explanation. A written explanationwhy the service and the filing were not done personally isindispensable, even when such explanation by its nature isacceptable and manifest. Where no explanation is offered to justifythe resort to other modes, the discretionary power of the court toexpunge the pleading becomes mandatory.

FACTS:

Respondent Asia Brewery is engaged in the manufacture,distribution and sale of beer; while petitioner Perla Zulueta isa dealer and an operator of an outlet selling Asia Brewery’s

http://sc.judiciary.gov.ph/jurisprudence/2000/mar2000/128550.html








products. A Dealership Agreement governed theircontractual relations

(1st case): Grounded on alleged violation of the Dealership Agreement, petitioner Zulueta filed before RTC-Iloilo aComplaint against respondent for Breach of Contract,

Specific Performance and Damages. (2nd case): During the pendency of the case in Iloilo,

respondent Asia Brewery filed with Makati RTC a Complaintfor the collection of a sum of money in the amount of Php463, 107.75 representing the value of beer products whichrespondent delivered to petitioner.

In view of the pendency of the Iloilo case, petitioner Zuletamoved to dismiss the Makati case on the ground that it hadsplit the cause of action and violated the rule againstmultiplicity of suits.

o Motion was denied by Makati RTC judge Petitioner Zulueta moved for the consolidation of the Makati

case with the Iloilo case.o Judge Parentala granted such motion and ordered

the consolidation of the two cases. Respondent filed a Motion for Reconsideration, which was

denied in an Order dated May 19, 1997. On August 18, 1997, respondent filed before the Court of

Appeals a Petition for Certiorari assailing Judge Parentala'sFebruary 13, 1997 and May 19, 1997 Orders.

o Petitioner assails the validity of the sworncertification against forum-shopping, arguingthat the same was signed by counsel and not bypetitioner as required by Supreme Court Circular

No. 28-91. For his part, respondent claims that even if it

was its counsel who signed the certification,there was still substantial compliance withCircular No. 28-91 because, a corporationacts through its authorized officers oragents, and its counsel is an agent havingpersonal knowledge of other pending cases.

o Petitioner also faults respondent for the absenceof a written explanation why the Petition with the

Court of Appeals was served on her counsel byregistered mail.

In reply, respondent points out that suchexplanation was not necessary, because itscounsel held office in Makati City while

petitioner and her counsel were in Iloilo City.ISSUES: 1. WON the sworn certification against forum shopping

was valid-- No. (relevant issue under Rule 7)2. WON respondent erred in failing to include a written

explanation why the Petition with the CA was served onher counsel by registered mail will affect— Yes.

3. Whether or not Judge Parentala correctly ordered theconsolidation of the Makati case(which was filed later)with the Iloilo case(filed earlier) for the reason that theobligation sought to be collected in the Makati case isthe same obligation that is also one of the subjectmatters of the Iloilo case? – Yes

HELD & RATIO:1. No. The Sworn Certificate against forum shopping was

not valid.

The requirement that the petitioner should sign the certificateof non-forum shopping applies even to corporations,considering that the mandatory directives of the Circular andthe Rules of Court make no distinction between natural and

juridical persons. In this case, the Certification should havebeen signed by a duly authorized director or officer of thecorporation, who has knowledge of the matter beingcertified.

In Robern Development Corporation v. Quitain, in which theCertification was signed by Atty. Nemesio S. Cañete whowas the acting regional legal counsel of the National PowerCorporation in Mindanao, the Court held that "he was notmerely a retained lawyer, but an NPC in-house counsel andofficer, whose basic function was to prepare legal pleadingsand to represent NPC-Mindanao in legal cases. As regionallegal counsel for the Mindanao area, he was the officer who






was in the best position to verify the truthfulness and thecorrectness of the allegations in the Complaint forexpropriation in Davao City. As internal legal counsel, hewas also in the best position to know and to certify if anaction for expropriation had already been filed and pending

with the courts."

Verily, the signatory in the Certification of the Petition beforethe CA should not have been respondent's retained counsel,who would not know whether there were other similar casesof the corporation. Otherwise, this requirement would easilybe circumvented by the signature of every counselrepresenting corporate parties.

2. Yes. Respondents erred in not including an explanationwhy they failed to include a written explanation why thePetition with the CA was served on her counsel byregistered mail

Under Section 11, Rule 13 of the 1997 Rules, personalservice of petitions and other pleadings is the general rule,while a resort to other modes of service and filing is theexception. Where recourse is made to the exception, awritten explanation why the service and the filing were notdone personally is indispensable, even when suchexplanation by its nature is acceptable and manifest. Whereno explanation is offered to justify the resort to other modes,the discretionary power of the court to expunge the pleadingbecomes mandatory. Thus, the CA should have consideredthe Petition as not having been filed, in view of the failure ofrespondent to present a written explanation of its failure toeffect personal service.

In sum, the Petition for Certiorari filed with the CA by hereinrespondent, questioning the orders of consolidation by theMakati RTC, should not have been given due course. Notonly was the Petition filed beyond the sixty-day reglementaryperiod; it likewise failed to observe the requirements of non-forum shopping and personal service or filing. All or any of

these acts ought to have been sufficient cause for its outrightdenial.

3. Yes. RTC Judge Parentala was correct in ordering theconsolidation of the Makati and Iloilo case.

When two or more cases involve the same parties and affectclosely related subject matters, they must be consolidatedand jointly tried, in order to serve the best interests of theparties and to settle expeditiously the issues involved.Consolidation, when appropriate, also contributes to thedeclogging of court dockets.

True, petitioner's obligation to pay for the beer productsdelivered by respondent can exist regardless of an allegedbreach in the Dealership Agreement. Undeniably, however,this obligation and the relationship between respondent andpetitioner, as supplier and distributor respectively, arosefrom the Dealership Agreement which is now the subject ofinquiry in the Iloilo case. In fact, petitioner herself claims thather obligation to pay was negated by respondent'scontractual breach. In other words, the non-payment -- theres of the Makati case -- is an incident of the Iloilo case.

Inasmuch as the binding force of the Dealership Agreementwas put in question, it would be more practical andconvenient to submit to the Iloilo court all the incidents andtheir consequences. The issues in both civil cases pertain tothe respective obligations of the same parties under theDealership Agreement. Thus, every transaction as well asliability arising from it must be resolved in the judicial forumwhere it is put in issue. The consolidation of the two casesthen becomes imperative to a complete, comprehensive andconsistent determination of all these related issues.

Two cases involving the same parties and affecting closelyrelated subject matters must be ordered consolidated and

jointly tried in court, where the earlier case was filed. Theconsolidation of cases is proper when they involve theresolution of common questions of law or facts.






Indeed, upon the consolidation of the cases, the interests ofboth parties in the two civil cases will best be served and theissues involved therein expeditiously settled. After all, thereis no question on the propriety of the venue in the Iloilo case.

FINAL VERDICT: Petition here

4. HEIRS OF AMBROCIO KIOMISOLA v. HEIRS OF HONORIODACUT

Private respondents filed a complaint for declaration of nullity oftitles, reconveyance and damages against petitioners

CASE: There was dispute for the two parcels of land located inBukidnon. The PET in this case were alleged to have acquired theOriginal Certificate of Title through fraudulent means. The RES fileda complaint for the nullity of free patent and certificate of title. PETanswered that complaint was not sufficient. The issue here was W/Nthe complaint was sufficient. The Court held here that it wassufficient. RES always been the owners and possessors of the two(2) parcels of land even prior to the issuance of the documents oftitle in petitioners’ favor, hence the latter could only have committedfraud in securing them.

FACTS:

Complaint involved two (2) parcels of land located in Pongol,Libona, Bukidnon with the total area of 187,718 squaremeters

Lot 1 was granted a free patent to petitioners Heirs of Ambrocio Kionisala, Lot 1 was registered under the Torrenssystem and was issued Original Certificate of Title inpetitioners’ name

Lot 2 was bestowed upon Isabel Kionisala, one of theimpleaded heirs of Ambrocio Kionisala, Lot 2 was registeredin the name of Isabel Kionisala under Original Certificate of

Title Private respondents claimed absolute ownership over two

lots even prior to the issuance of the corresponding freepatents and certificates of title.

RES:o Patents issued to defendants are null and void, the

same having been issued fraudulently, defendantsnot having been and/or in actual possession of thelitigated properties and the statement they may havemade in their application are false and without basis






o The Department of Environment and NaturalResources not having any jurisdiction on theproperties the same not being anymore public butalready private property

o The complaint was accompanied by a verification

and certificate of non-forum shopping which affirmedunder oath PET:

o Complaint states no cause of action, cause ofaction, if any, is barred by statute of limitations,prescription of action or by equitable principle oflaches

o Director of Lands (now DENR) through the Office ofthe Solicitor General that has the authority to fileannulment of Free Patent or Homestead Patentissued by the Director of Lands or DENR

o That the complaint is not supported by certification

of non-forum shopping as required by AdministrativeCircular No. 04-94 of the Supreme Court RTC: dismissed the complaint

o Cause of action of private respondents was truly forreversion so that only the Director of Lands couldhave filed the complaint,

o Certificate of non-forum shopping accompanying thecomplaint did not comply with the standard form forsuch undertaking.

CA: reversed the RTCo Erroneously registered in another person’s name, to

its rightful and legal owner or to one with a better

righto Likewise found substantial compliance in the

certificate of non-forum shopping

ISSUES: 1. W/N there was sufficiency in the complaint filed by

private respondents

HELD & RATIO:1. We rule that private respondents have sufficiently pleaded

an action for reconveyance, more specifically, one which isbased on implied trust.

An implied trust arises where the PET allegedly

acquires the disputed property through mistake orfraud The test of the sufficiency of the facts to constitute a

cause of action is whether admitting the factsalleged the court could render a valid judgment uponthe same in accordance with the prayer of thecomplaint.

Sufficiently states either a cause of action fordeclaration of nullity of free patents and certificatesof title over Lot 1 and Lot 2 or alternatively a causeof action for reconveyance of these two pieces ofrealty, wherein in either case private respondents

are the real parties in interest. Declaration of nullity of free patent and certificate of

title - r equire allegations of the plaintiff’s ownershipof the contested lot prior to the issuance of such freepatent and certificate of title as well as thedefendant’s fraud or mistake

RES always been the owners and possessors of thetwo (2) parcels of land even prior to the issuance ofthe documents of title in petitioners’ favor, hence thelatter could only have committed fraud in securingthem

RES became absolute and exclusive owners of the

abovesaid parcels of land by virtue of inheritancefrom their late father, Honorio Dacut, who in turnacquired the same from a certain Blasito Yacapinand from then on was in possession thereofexclusively, adversely and in the concept of ownerfor more than thirty (30) years

Patents issued to defendants are null and void, thesame having been issued fraudulently, defendantsnot having been and/or in actual possession of thelitigated properties and




Dela Cruz Garcia Gervacio Gervasio Guballa Hourani Lapuz Lecaroz Ledesma Leuterio Leveriza Lim Lua Molaer Miranda Pacamarra Rivera Rovero Rubinos San JuanSantos, D Santos, R So Chan Sorongon Tamondong Torcuator Velena Ybiernas Yogue Zerrudo

The statement they may have made in theirapplication are false and without basis in fact, and,the Department of Environment and NaturalResources not having any jurisdiction on theproperties the same not being anymore public but

already private property If at all, the oversight in not alleging the actual date

when private respondents’ ownership thereofaccrued reflects a mere deficiency in details whichdoes not amount to a failure to state a cause ofaction. The remedy for such deficiency would not bea motion to dismiss but a motion for bill of particularsso as to enable the filing of appropriate responsivepleadings.

Private respondents clearly assert that they havelong been the absolute and exclusive owners and inactual possession and cultivation of the two lots and

that they were fraudulently deprived of ownershipthereof when petitioners obtained free patents andcertificates of title in their names

We rule that neither the action for declaration ofnullity of free patents and certificates of title of thetwo lots nor the action for reconveyance based onan implied trust of the same lots has prescribed.

ABOUT CERTIFICATE OF NON-FORUM SHOPPING We agree with the Court of Appeals that private

respondents did not altogether dispense with thecertificate of non-forum shopping.

But the contested certificate of non-forum shoppingis substantial compliance with the rules What is involved here is a certification several

sentences short of the standard form as it onlystates: “That we have not filed any case in any courtor bodies affecting the same subject matter.”

its presence in the complaint nonetheless shows theintention of private respondents to comply with thestandard form.

We can only presume innocent reasons - as there isno reason for pursuing a contrary belief - for theomissions of the other standard statements therein.

FINAL VERDICT:

Petition for Review is DENIED

The Decision of the Court of Appeals dismissing the Complaint inCivil Case is AFFIRMED

with the understanding that private respondents Heirs of HonorioDacut as plaintiffs therein may proceed on the basis of their causesof action of declaration of nullity of free patents and certificates oftitles and/or reconveyance based on an implied trust, with claim fordamages. The proceedings in the trial court shall commenceforthwith within thirty (30) days from notice of the finality of this

Decision without unnecessary delay

Notes:

What is sought instead is the transfer of the property, in this case thetitle thereof, which has been wrongfully or erroneously registered inthe defendant’s name.

What must be alleged in the complaint(1) that the plaintiff was the owner of the land and,(2) that the defendant had illegally dispossessed him of the same

The difference between them lies in the allegations as to thecharacter of ownership of the realty whose title is sought to benullified.

Reversion - allegations in the complaint would admit Stateownership of the disputed land

declaration of nullity of free patent and certificate oftitle - requir e allegations of the plaintiff’s ownership of the





contested lot prior to the issuance of such free patent andcertificate of title as well as the defendant’s fraud or mistake;

5. SPOUSES HONTIVEROS v. RTC OF ILOILOVerification

CASE:

Petitioner-spouses Augusto and Maria Hontiveros filed a

complaint for damages against private respondents GregorioHontiveros and Teodora Ayson alleging that they were deprived ofthe income derived from their land when said respondents hereinfiled a land registration case. In that case, the petitioner-spouseswon.

Petitioner Augusto Hontiveros and respondent GregorioHontiveros are brothers. Petitioner Maria Hontiveros is the wife of

Augusto while Tedora Ayson is the alleged wife of Gregorio.Respondents argued that the complaint should be

dismissed b ecause it fai led to state a cause of action since it

did not allege that “earnest efforts towards a compromise hadbeen made.” Article 151 of the Family Code requires that whenthere is suit between members of the same family, there should be a“verified complaint or petition that earnest efforts toward acompromise have been made, but that the same have failed.”

Though the general rule under the Rules of Court is that pleadings need not be under oath, verified or accompanied byaffidavit, there needs to have such when law or rule so requires.Here, since Article 151 of the Family Code requires such verification,the complaint must contain such.

The court ruled that Art. 151 of the Family Code does no t

apply in this case since the suit is not exclusively among family

members. The inclusion of private respondent Ayson as defendantand petitioner Maria Hontiveros as plaintiff takes the case out of theambit of Art. 151 of the Family Code.

FACTS (BACKGROUND):

Petitioner-spouses Augusto and Maria Hontiveros, filed acomplaint for damages against private respondents GregorioHontiveros and Teodora Ayson before the Regional TrialCourt of Iloilo City.

Petitioners alleged that they are the owners of a parcel ofland, in the town of Jamindan, Province of Capiz pursuant tothe decision of the Intermediate Appellate Court in a land





registration case filed by private respondent GregorioHontiveros.

The complaint for damages arose from the petitioners beingallegedly deprived of income from the land as a result of thefiling of the said land registration case; that such income

consisted of rentals from tenants of the land in the amount ofP66,000.00 per year from 1968 to 1987, and P595,000.00per year thereafter; and that private respondents filed theland registration case and withheld possession of the landfrom petitioners in bad faith.

FACTS RELEVANT TO CIVPRO RULE 7:

Again, the petitioners herein are spouses Augusto andMaria Hontiveros.

The private respondents are Gregorio Hontiveros andalleged wife Teodora Ayson.

Petitioner Augusto Hontiveros and private respondent

Gregorio Hontiveros are brothers. Private respondents denied that they were married and

alleged that private respondent Gregorio Hontiveros was awidower while private respondent Teodora Ayson wassingle.

Now, given the said facts herein, private respondents arguedthat the complaint should be dismissed because it failedto state a cause of action since it did not allege that“earnest efforts towards a compromise had been made .”

It is important to note that Article 151 of the Family Coderequires that when there is suit between members of the

same family, there should be a verified complaint orpetition that earnest efforts toward a compromise havebeen made, but that the same have failed.

Article 151 of the Family Code provides:

No suit between members of the same family shall prosperunless it should appear from the verified complaint or petitionthat earnest efforts toward a compromise have been made,but that the same have failed. If it is shown that no suchefforts were in fact made, the same case must be dismissed.

This rule shall not apply to cases which may not be thesubject of compromise under the Civil Code.

Moreover, Section 4, Rule 7 of the Rules of Court

provides: Verification. — Except when otherwise

specifically required by law or rule, pleadings need not beunder oath, verified or accompanied by affidavit.

A pleading is verified by an aff idavit that the affiant has readthe pleading and that the allegations therein are true andcorrect of his knowledge and belief.

A pleading required to be verified which contains averification based on "information and belief", or upon"knowledge, information and belief", or lacks a properverification, shall be treated as an unsigned pleading.

Though the general rule under the Rules of Court is thatpleadings need not be under oath, verified oraccompanied by affidavit, there needs to have suchwhen law or rule so requires.

Here, since Article 151 of the Family Code requires suchverification, the complaint must contain such. However,since the complaint did not state such verification, the privaterespondents herein moved to dismiss the complaint.

ISSUE:

1. Whether or not the absence of the said verification inthe complaint that “earnest efforts toward a compromisehave been made, but that the same have failed” asrequired under Art. 151 of the Family Code (in relation toSec. 4 of Rule 7 of the Rules of Court) would warrant thedismissal of the complaint.

HELD & RATIO:1. NO, considering the circumstances of the case herein.





The absence of the verification required in Art. 151does not affect the jurisdiction of the court over thesubject matter of the complaint. The verification ismerely a formal requirement intended to secure anassurance that matters which are alleged are true

and correct. If the court doubted the veracity of theallegations regarding efforts made to settle the caseamong members of the same family, it could simplyhave ordered petitioners to verify them. As thisCourt has already ruled, the court may simply orderthe correction of unverified pleadings or act on it andwaive strict compliance with the rules in order thatthe ends of justice may be served. Otherwise, meresuspicion or doubt on the part of the trial court as tothe truth of the allegation that earnest efforts hadbeen made toward a compromise but the parties’efforts proved unsuccessful is not a ground for thedismissal of an action. Only if it is later shown thatsuch efforts had not really been exerted would thecourt be justified in dismissing the action.

Moreover, Art. 151 of the Family Code does notapply in this case since the suit is notexclusively among family members. Whenever astranger is a party in a case involving familymembers, the requisite showing of earnest efforts tocompromise is no longer mandatory. Since privaterespondent Ayson is admittedly a stranger to theHontiveros family, the case is not covered by therequirements of Art. 151 of the Family Code.

The inclusion of private respondent Ayson asdefendant and petitioner Maria Hontiveros asplaintiff takes the case out of the ambit of Art. 151 ofthe Family Code. Under this provision, the phrase“members of the same family” refers to the husbandand wife, parents and children, ascendants anddescendants, and brothers and sisters, whether fullor half-blood.

Then Chief Justice Concepcion emphasized in thecase of Gayon v. Gayon that “sisters-in-law” (hence,

also “brothers-in-law”) are not listed under Art. 217of the New Civil Code as members of the samefamily. Since Art. 150 of the Family Code repeatsessentially the same enumeration of “members ofthe family,” we find no reason to alter existing

jurisprudence on the mater. Religious relationship and relationship by affinity arenot given any legal effect in this

jurisdiction. Consequently, private respondent Ayson, who is described in the complaint as thespouse of respondent Hontiveros, and petitionerMaria Hontiveros, who is admittedly the spouse ofpetitioner Augusto Hontiveros, are consideredstrangers to the Hontiveros family, for purposes of

Art. 151.

FINAL VERDICT: Petition is GRANTED.

Notes:

Petitioners finally question the constitutionality of Art. 151 of theFamily Code on the ground that it in effect amends the Rules ofCourt. This, according to them, cannot be done since theConstitution reserves in favor of the Supreme Court the power topromulgate rules of pleadings and procedure. Considering theconclusion we have reached in this case, however, it is unnecessaryfor present purposes to pass upon this question. Courts do not passupon constitutional questions unless they are the very lis mota of the

case.





6. FIVE STAR BUS COMPANY INC., and IGNACIO TORRES,petit ioners , vs . COURT OF APPEALS, JUDGE JAIME F.

BAUTISTA, RTC-Br. 75, Valenzuela, Metro Manila and SAMUELKING SAGARAL II, respondents.

Certificate of non-forum shopping

CASE:Petitioners were defendants in a case involving the collision

of their passenger bus with a Mini-Van driven by private respondents(plaintiff therein). When it was the petitioners’ time to present theirevidence after the private respondent finally rested his case, a totalof six (6) delays/ resetting of the hearings were made, 5 of them atthe instance of petitioner. On the July 16 1996 hearing (the 4

th time

the hearing for presentation of evidence was set), petitioner’scounsel was still late prompting the court to issue the order that theright of petitioners to present evidence be deemed waived and thecase now be deemed submitted for decision. After various motionsfiled by petitioner, the court set two more hearings on Aug. 8 and 20,which the petitioners, as if trying to test the patience of the court,again requested to be reset. The Aug. 8 hearing was cancelled andthe court issued another order dismissing the petitioner’s MR on theJuly 16 decision, reaffirming that the case be submitted for decision.

Petitioners raised the issue on certiorari with the CA, whichsummarily denied the petition because the certificate of non-forumshopping was signed by the COUNSEL and not PETITIONER itselfcontrary to what is mandated by SC Circular No. 28-91. Petitionersasked for a liberal construction of the circular, claiming substantialcompliance. The SC denied petitioner’s contention citing that thenumerous delays were caused by petitioner itself, and that it couldnot produce enough justifiable cause for the delays to merit a liberalapplication.

FACTS:

On 9 November 1991, at around 11:00 o’clock in theevening, along the MacArthur Highway in Valenzuela, MetroManila, the Suzuki Supercarry Mini-Van driven by privaterespondent Samuel King Sagaral II collided with apassenger bus owned and operated by petitioner Five StarBus Company and driven by co-petitioner Ignacio Torres.

o On 1 April 1992 private respondent Sagaral filed acivil action for damages against petitioners and thecase was assigned to Branch 171 of the ValenzuelaRegional Trial Court and docketed as Civil CaseNo. 3812-V-92.

o When amicable settlement failed, trial ensued withprivate respondent Sagaral (plaintiff in the court aquo) initially presenting his evidence. Several yearspassed and on 26 December 1996 Sagaral finallyrested his case. On 12 March 1996 the trial courtordered petitioners herein (defendants in the court aquo) to present their evidence on 25 April 1996 and9 May 1996.

The presentation of evidence by petitioners wassnagged by several postponements.o A review of the records shows that the trial court had

scheduled a total of six (6) hearing dates for thepresentation of their evidence. Five (5) of these trialdates were cancelled at the instance of petitioners.

o These were: 25 April 1996- Presiding Judge Adriano R. Osorio

reset the 25 April 1996 hearing to 9 May 1996 as hehad to go on forced vacation leave from 23 April1996 to 25 April 1996

9 May 1996- during the 9 May 1996 hearing,petitioner Ignacio Torres failed to appear promptingthe lower court to cancel the hearing. According topetitioners, Torres was then detained in jail due to aseparate pending criminal case filed against him bySagaral before Br. 172 of the RTC of Valenzuela.Petitioners further explained that Torres could notpost bail earlier for his provisional liberty since nonotice was sent to him regarding the criminalcomplaint.

o On 17 June 1996 the case was re-raffled to Br. 75 of thesame RTC (because the previous court was designatedto try heinous crimes exclusively), this time under JudgeJaime F. Bautista who immediately scheduled a hearingfor the initial presentation of petitioners' evidence on 8

August 1996. Nonetheless on 9 July 1996 petitioners





(2) Any violation of this revised Circular will entail thefollowing sanctions: (a) it shall be a cause for thesummary dismissal of the multiple petitions orcomplaints; x x x x (underscoring supplied).

Circular No. 28-91 has its roots in the rule that a party-litigantshall not be allowed to pursue simultaneous remedies in two

(2) different fora, for such practice works havoc upon orderly judicial procedure.o Forum shopping has been characterized as an act

of malpractice that is prohibited and condemned astrifling with the courts and abusing their processes.It constitutes improper conduct which tends todegrade the administration of justice. It has alsobeen aptly described as deplorable because it addsto the congestion of the already heavily burdeneddockets of the courts.

The fact that the Circular requires that it be strictly compliedwith merely underscores its mandatory nature in that it

cannot be dispensed with or its requirements altogetherdisregarded, but it does not thereby interdict substantialcompliance with its provisions under justifiablecircumstances.

In the instant case, we cannot apply the "substantialcompliance" rule to petitioners and be as liberal minded. Forone thing, counsel for petitioners gave a rather frail excusefor his non-compliance, i.e., oversight and haste in ensuringthat the petition would be filed at the earliest possible timefor the protection of his clients’ interests thereby overlookingthe aforesaid circular.

Substantial compliance will not suffice in a matter involving

strict observance as provided for in Circular No. 28-91. Theattestation contained in the certification on non-forumshopping requires personal knowledge by the party whoexecuted the same. To merit the Court’s consideration,petit ioners here must show reasonable cause for fai lure

to personally sign the cert i f icat ion . The petitioners mustconvince the court that the outright dismissal of the petitionwould defeat the administration of justice. However, the

petitioners did not give any explanation to warrant theirexemption from the strict application of the rule utter

disregard of the rules cannot justly be rationalized by harkingon the policy of liberal construction.

The court also does not miss the fact that petitioners wererepresented by a law firm which meant that any of itsmembers could lawfully act as their counsel during the

trial.o As such petitioners’ frequent motions to resethearings by reason of their counsel’s unavailabilityshould be cautiously considered to make sure thatthese were not mere dilatory tactics.

o As observed by the lower court, a perusal of therecords shows that the case has been pending for along period of time, with the court oftenaccommodating petitioners. Thus there could be nograve abuse of discretion when the trial court finallyordered petitioners’ right to present evidence aswaived to put an end to their foot dragging.

o Indeed, it is never too often to say that justicedelayed is justice denied.

FINAL VERDICT:WHEREFORE, there being no reversible error committed by theCourt of Appeals, the petition for review on certiorari is DENIEDand the assailed Resolution of 23 September 1996 summarilydismissing the petition for certiorari and the Resolution of 31October 1996 denying reconsideration are AFFIRMED.Consequently, the Regional Trial Court of Valenzuela, MetroManila, is DIRECTED forthwith to render its decision in Civil CaseNo. 3812-V-92 without delay. Costs against petitioners.





7. DIGITAL MICROWAVE CORPORATION vs. ASIAN HIGHTECHNOLOGY CORP.

Certificate of non-forum shopping can only be made by the personwho instituted the action and has personal knowledge of facts, not

the counsel or the corporation

CASE:Petitioner filed a claim for sum of money vs respondent. It

was dismissed in CA due to the fact that the certificate of non-forumshopping was accomplished by counsel, not the petitioner, as theSupreme court circular requires. The issue is whether or notcertificate of non-forum shopping maybe accomplished by thecounsel. The court ruled that the petitioner must file this, not thecounsel. It is the petitioner who has knowledge of the fact whether hefiled an action in other courts, which the counsel might not know.

FACTS:

On December 14, 1994, private respondent Asian HighTechnology Corp. filed a complaint against petitioner DigitalMicrowave Corp. for a sum of money and damages beforethe Regional Trial Court of Pasig city. Petitioner moved forthe dismissal of the complaint, which the trial court denied.

Digital then initiated a special civil action for certiorari beforethe Court of Appeals, alleging grave abuse of discretion onthe part of the trial court. However, the Court of Appealsdismissed the petition for failure to comply with RevisedCircular No. 28-91, as amended by AdministrativeCircular No. 04-94 (Provision on Certificate of non-forumshopping. This is Rule 7, Section 5 in 1997 ROC).

o

Said circular requires the petition filed before theCourt of Appeals to be accompanied by a sworncertification against forum shopping, signed bypetitioner himself .

o Petitioner’s certification was signed by counsel;the petition was, thus, dismissed.

Petitioner moved for a reconsideration of the dismissal andsubmitted a sworn certification against forum shopping dulysigned by one of its senior officers. The motion was,however, denied, with the Court of Appeals stating that forfailure of petitioner at first instance to comply, the Court

cannot accept subsequent compliance Petitioner further contends that in the case of a corporation

as petitioner, the certification against forum shopping may besigned by a natural person authorized to do so and withknowledge of the required facts. The authorized person may

be anyone authorized by the corporation. In such a case,petitioner argues, the counsel of record has the authority toexecute the certification on behalf of the corporation,particularly considering that under the Rules of Court,counsel’s authority to represent his client is presumed.

ISSUES:1. Whether or not certificate of non-forum shopping can be

accomplished by the petitioner’s counsel2. Whether or not The corporation, as the petitioner, being

a juridical person, cannot comply with the requirementof certificate of non-forum shopping (Kinda CORP-ishissue)

HELD + RATIO:

1. NO, certificate of non-forum shopping cannot be accomplished byboth. The petitioner himself must sign this

The reason the certification against forum shopping isrequired to be accomplished by petitioner himself is becauseonly the petitioner himself has actual knowledge of whetheror not he has initiated similar actions or proceedings indifferent courts or agencies. Even his counsel may beunaware of such fact.

2. NO, the petitioner’s contention is untenable. A corporation cannotact without its agent, and must therefore comply with anyoneauthorized as a natural person

The court disagree with petitioners that a corporation cannotpossibly hope to comply with the requirement laid down byRevised Circular No. 28-91 because it is a juridical entity andnot a natural person. If this were so, then it would have beenimpossible for a corporation to do anything at all. Needlessto say, this is the reason why corporations have directorsand officers, to represent it in its transactions with others.





amount of P4,180.00 as Right-of-Waydamages. Respondent subsequently executed an Affidavit ofWaiver of Rights and Fees whereby she waived anycompensation for damages to crops and improvements thatshe suffered as a result of the construction of a right-of-way.

Respondent demanded payment for the taking of herproperty, but petitioner refused to pay. Accordingly,respondent filed on December 10, 1990 a complaint againstpetitioner before the Regional Trial Court, praying thatpetitioner be ordered to pay the sum of P111,299.55 ascompensation for the portion of her property used in theconstruction of the canal constructed by the NIA, litigationexpenses, and the costs.

Petitioner interposed the defense that: (1) the governmenthad not consented to be sued; (2) the total area used by theNIA for its irrigation canal was only 2.27 hectares, not 24,600square meters; and (3) respondent was not entitled tocompensation for the taking of her property considering thatshe secured title over the property by virtue of a homesteadpatent under C.A. No. 141.

The RTC rendered a decision ordering NOA to payP107,517.60 as just compensation for the questioned areaof 24,660 square meters of land owned by plaintiff and takenby NIA. The CA affirmed the decision.

ISSUE:1. Whether or not the petition is dismissible for failure

to comply with the provisions of Section 5, Rule 7 ofthe Revised Rules of Civil Procedure

HELD + RATIO:

Rule 7, §5 of the 1997 Revised Rules on Civil Procedureprovides:The plaintiff or principal party shall certify under oath in thecomplaint or other initiatory pleading asserting a claim forrelief, or in a sworn certification annexed thereto andsimultaneously filed therewith:(a) that he has not theretofore commenced any action orfiled any claim involving the same issues in any court,

tribunal or quasi-judicial agency and, to the best of hisknowledge, no such other action or claim is pendingtherein;(b) if there is such other pending action or claim, acomplete statement of the present status thereof ; and(c) if he should thereafter learn that the same or similaraction or claim has been filed or is pending, he shallreport the fact within five (5) days therefrom to the courtwherein his aforesaid complaint or initiatory pleadinghas been filed.

Failure to comply with the foregoing requirements shall notbe curable by mere amendment of the complaint or otherinitiatory pleading but shall be cause for the dismissal of thecase without prejudice, unless otherwise provided, uponmotion and after hearing.

By reason of Rule 45, §4 of the 1997 Revised Rules on CivilProcedure, in relation to Rule 42, §2 thereof, the requirementof a certificate of non-forum shopping applies to the filing ofpetitions for review on certiorari of the decisions of the Courtof Appeals, such as the one filed by petitioner. The failure ofthe petitioner to comply with any of the foregoingrequirements regarding the contents of the document thatshould accompany the petition shall be sufficient ground forthe dismissal thereof.

The counsel cannot sign the certificate against forumshopping. The plaintiff or principal knows better than anyoneelse whether a petition has previously been filed involvingthe same case or substantially the same issues. Hence, acertification signed by counsel alone is defective andconstitutes a valid cause for dismissal of the petition.

Santiago Eslaban, Jr., filed the petition for review in hiscapacity as Project Manager of the NIA. However, theverification and certification against forum-shopping weresigned by Cesar E. Gonzales, the administrator of theagency. The real party-in-interest is the NIA, which is abody corporate. Without being duly authorized byresolution of the board of the corporation, neitherSantiago Eslaban, Jr. nor Cesar E. Gonzales could signthe certificate against forum-shopping accompanyingthe petition for review.





FINAL VERDICT: WHEREFORE, premises considered, the assaileddecision of the Court of Appeals is hereby AFFIRMED withMODIFICATION to the extent that the just compensation for thecontested property be paid to respondent in the amountof P16,047.61 per hectare, with interest at the legal rate of sixpercent (6%) per annum from the time of taking until full payment ismade. Costs against petitioner.

Notes:

I only included the procedural issue since the three other issuesdealt with eminent domain and just compensation.

9. SANTOS v. CA

G.R. No. 141947; July 5, 2001Certification Against Forum Shopping

CASE:Santos and Arce were employed by PEPSI as Complimentary

Distribution Specialits (CDS). PEPSI informed its employees that dueto poor performance of its Metro Manila Sales Operations it wouldrestructure and streamline certain physical and sales distributionsystems to improve its warehousing efficiency and that certain

positions, including of that of the petitioners, were declaredredundant and abolished. Consequently, Santos and Arce w ere

terminated. Santos and Arce left their position and accepted theirseparation pays. However, they learned that PEPSI created new

positions called Account Development Managers (ADM) withsubstantially the same duties and responsibilities as the CDS.

Aggrieved, they filed a complaint with the Labor Arbiter (LA) forillegal dismissal with a prayer for reinstatement, back wages,damages and attorney’s fees. The Labor Arbiter dismissed thecomplaint for lack of evidence to which the NLRC affirmed onappeal. Santos and Arce filed a special civil action for certiorari withthe CA. CA dismis sed the petit ion outr ight for fa i lure to comply

with a num ber of requirements mandated by the Rules of Court.

CA ruled that the verif icat ion and cert i f icat ion against forum

shopping were executed merely by petitioners’ counsel and notby th e petition ers henc e, violating § 5, Rule 7 and § 3 of Rule 46

of The 1997 Rules of Civi l Procedure. CA further stated that

under the stated rules, fa i lure of petit ioners to c omply with any

of the requirements was suff ic ient ground for th e dismissal of

the petit ion.

The relevant issue in this case is whether or not there wasfai lure to comply w ith the requirements of the Rules in fi l ing

their petit ion for cert iorari.

SC ruled in the aff irmative stat ing that the cert i f icat ion

against forum shopping w as executed me rely by petitioner’scounsel and not by Jose and Arce, which is in vio lat ion of th e

requirem ent in Sec 5, Rule 7 and Sec 3, Rule 46 of the 1997

Rules of Civi l Procedure. It is true that insofar as verification isconcerned, SC have held that there is substantial compliance if thesame is executed by an attorney, it being presumed that facts





alleged by him are true to his knowledge and belief. How ever, the

same does not apply as regards the requirement of a

cert i f icat ion against forum s hopping. Sec 5, Rule 7 of the Rules

of Court mandates that the cert i f icat ion must be made by

petit ioner himself and not by counsel since it is petit ioner who

is in the best posit ion to know whether he has previously

comm enced any similar action involv ing the same issues in any

other tr ibunal or agency. Santos and Arce used the ruling in BASavings Bank v. Sia which held that a certification against forumshopping may be signed by an authorized lawyer who has personalknowledge of the facts required to be disclosed in such document.However, BA Savings Bank must be distinguished from the case atbar because in the former, the complainant was a corporation, andhence, a juridical person. In the case at bar, the petitioners(Santos and Arce) are all natural persons and th ere is no

showing of any reasonable cause to just i fy their fa i lure to

personally sign the cert i f icat ion of non-forum shopp ing. It isnoteworthy that PEPSI in its Comment stated that it was Santos and

Arce themselves who executed the verification and certificationrequirements in all their previous pleadings.

FACTS:

PARTIES:o Private Respondent: Pepsi Cola Products Phils., Inc.

(PEPSI) is a domestic corporation engaged in theproduction, distribution and sale of beverages.

o Petitioner: Ismael V. Santos and Alfredo G. Arce wereemployed by PEPSI as Complimentary DistributionSpecialists (CDS) at the time of their termination.

PEPSI informed its employees that due to poor performance ofits Metro Manila Sales Operations it would restructure andstreamline certain physical and sales distribution systems toimprove its warehousing efficiency.o Certain positions, including that of petitioners, were

declared redundant and abolished.o Consequently, employees with affected positions

were terminated.

Santos and Arce left their respective positions, accepted theirseparation pays and executed the corresponding releases andquitclaims.

However, before the end of the year, Santos and Arce learnedthat PEPSI created new positions called Account DevelopmentManagers (ADM) with substantially the same duties andresponsibilities as the CDS.

Aggrieved, on 15 April 1996, petitioners filed a complaint withthe Labor Arbiter for illegal dismissal with a prayer forreinstatement, back wages, moral and exemplary damagesand attorney’s fees. o In their complaint, Santos and Arce alleged that:

the creation of the new positions belied PEPSI’s claimof redundancy;

the qualifications for both the CDS and ADM positionswere similar;

that the employees hired for the latter positions wereeven less qualified than they were; and

while they were notified of their termination, PEPSI hadnot shown that the Department of Labor andEmployment (DOLE) was also notified as mandated by

Art. 283 of the Labor Code Labor Arbiter Romulus S. Protacio dismissed the complaint for

lack of merit. He further ruled that the one (1)-month writtennotice prior to termination required by Art. 283 was compliedwith.

On appeal, the National Labor Relations Commission (NLRC)affirmed the ruling of the Labor Arbiter.

10 September 1999, Santos and Arce filed a special civilaction for certiorari with the Court of Appeals.o CA dismissed the petition outright for failure to

comply with a number of requirements mandated bySec. 3, Rule 46, in relation to Sec. 1, Rule 65, of the1997 Rules of Civil Procedure.

CA ruled that:o the verification and certification against forum

shopping were executed merely by petitioners’counsel and not by petitioners; and

o the petition also failed to specify the dates of receipt of theNLRC Decision as well as the filing of the motion forreconsideration.





o Under the aformentioned Rules, failure of petitionersto comply with any of the requirements was sufficientground for the dismissal of the petition.

ISSUE: 1. Whether or not there was failure to comply with the requirements

of the Rules in filing their petition for certiorari.

RATIO: Yes, Santos and Arce failed to comply with the requirements ofthe Rules in filing their petition for certiorari.

1. The certification against forum shopping was executedmerely by petitioner’s counsel and not by Jose and Arcethemselves. Hence, they violated the requirement in Sec 5,Rule 7 and Sec 3, Rule 46 of the 1997 Rules of CivilProcedure.

It is true that insofar as verification is concerned, SC haveheld that there is substantial compliance if the same isexecuted by an attorney, it being presumed that factsalleged by him are true to his knowledge and belief.

o However, the same does not apply as regards therequirement of a certification against forumshopping.

Section 3, Rule 46, of the 1997 (This is also indicated in Sec5, Rule 7) Rules of Civil Procedure explicitly requires -

“x x x x The petitioner shall also submit together withthe petition a sworn certification that he has nottheretofore commenced any other action involvingthe same issues in the Supreme Court, the Court of

Appeals or different divisions thereof, or any othertribunal or agency; if there is such other action or

proceeding, he must state the status of the same;and if he should thereafter learn that a similar actionor proceeding has been filed or is pending beforethe Supreme Court, the Court of Appeals, ordifferent divisions thereof, or any other tribunal oragency, he undertakes to promptly inform theaforesaid courts and other tribunal or agency thereofwithin five (5) days therefrom x x x x”

It is clear from the above-quoted provision that thecertification must be made by petitioner himself and notby counsel since it is petitioner who is in the bestposition to know whether he has previously commencedany similar action involving the same issues in anyother tribunal or agency.

Petitioner’s Contention:o They argue that while it may be true that they are in

the best position to know whether they havecommenced an action or not, this information may bedivulged to their attorney and there is nothinganomalous or bizarre about this disclosure.

o They further maintain that they executed a SpecialPower of Attorney specifically to authorize theircounsel to execute the certification on their behalf.

SC RULING:o BA Savings Bank v. Sia: SC in this case held that a

certification against forum shopping may be signedby an authorized lawyer who has personal knowledgeof the facts required to be disclosed in suchdocument.

o However, BA Savings Bank must be distinguishedfrom the case at bar because in the former, thecomplainant was a corporation, and hence, a juridicalperson. In BA Savings Bank v Sia, SC made anexception to the general rule that the certificationmust be made by the petitioner himself since acorporation can only act through naturalpersons. In fact, physical actions, e.g., signing anddelivery of documents, may be performed on behalfof the corporate entity only by specifically authorizedindividuals.

o In the case at bar, (Santos and Arce) petitionersare all natural persons and there is no showing ofany reasonable cause to justify their failure topersonally sign the certification of non-forumshopping.

o It is noteworthy that PEPSI in its Comment stated thatit was Santos and Arce themselves who executed the





verification and certification requirements in all theirprevious pleadings.

Petitioner’s Contention: o Counsel for petitioner argues that as a matter of

policy, a Special Power of Attorney is executed topromptly and effectively meet any contingencyrelative to the handling of a case.

SC RULING:o SC ruled that this argument only weakens their

position since it is clear that at the outset no justifiable reason yet existed for counsel to substitutepetitioners in signing the certification. In fact, in thecase of natural persons, this policy serves no legalpurpose. Convenience cannot be made the basis fora circumvention of the Rules.

Petitioner’s Contention:o The outright dismissal of the petition would defeat the

administration of justice.o They argue that there are very important issues such as

their livelihood and the well being and future of theirfamilies.

SC Ruling:o Every petition filed with a judicial tribunal is sure to

affect, even tangentially, either the well being and futureof petitioner himself or that of his family. Unfortunately,this does not warrant disregarding the Rules.

2. Petition failed to indicate the material dates that wouldshow the timeliness of the filing thereof with the Court ofAppeals.

There are three (3) essential dates that must be stated in apetition for certiorari brought under Rule 65.o First , the date when notice of the judgment or final order

or Resolution was received;o Second , when a motion for new trial or reconsideration

was filed; ando Third , when notice of the denial thereof was received.

Santos and Arce (petitioner) failed to show the first andsecond dates, namely, the date of receipt of the impugnedNLRC Decision as well as the date of filing of their motion for

reconsideration. Petitioner’s Contention:

o Petitioners counter by stating that in the body of thepetition for certiorari filed in the Court of Appeals, it wasexplicitly stated that the NLRC Resolution dated 11 May1999 was received by petitioners through counsel on 30July 1999. They even reiterate this contention in theirReply .

SC Ruling:o The requirement of setting forth the three (3) dates in a

petition for certiorari under Rule 65 is for the purpose ofdetermining its timeliness. Such a petition is required tobe filed not later than sixty (60) days from notice of the

judgment, order or Resolution sought to be assailed.Therefore, that the petition for certiorari was filed forty-one (41) days from receipt of the denial of the motion forreconsideration is hardly relevant.

o The Court of Appeals was not in any position todetermine when this period commenced to run andwhether the motion for reconsideration itself was filed ontime since the material dates were not stated. It shouldnot be assumed that in no event would the motion befiled later than fifteen (15) days.

o Technical rules of procedure are not designed tofrustrate the ends of justice. These are provided toeffect the proper and orderly disposition of casesand thus effectively prevent the clogging of courtdockets. Utter disregard of the Rules cannot justlybe rationalized by harking on the policy of liberalconstruction.

SC also ruled in this case that even if the procedural lapses aredispensed with, the instant petition, on the merits, must still fail.

Petitioner’s Contention: o They impute grave abuse of discretion on the part of

the NLRC for holding that the CDS and ADM positionswere dissimilar, and for concluding that the redundancyprogram of PEPSI was undertaken in good faith.

SC Ruling:





o This Court is not a trier of facts. The question ofwhether the duties and responsibilities of the CDS and

ADM positions are similar is a question properlybelonging to both the Labor Arbiter and the NLRC. Infact, the NLRC merely affirmed the finding of the Labor

Arbiter on this point and further elaborated on thedifferences between the two.

NLRC ruling: “It is clear to us that w hile CDS are

required to physically deliver, sell and collect payments for softdrinks, they do so not primarily toretail outlets but to wholesale dealers who haveretail customers of their own. They are not requiredto assist the dealers they deliver to in selling thesoftdrinks more effectively whereas ADMs sellsoftdrinks to big retail outlets (groceries and mallswho have shelves and display cases and whorequire coolers and other paraphernalia). They donot only sell but they have to effectively market the

products or put them in the best and mostadvantageous light so that the dealers who sell thesoftdrinks retails can sell more softdrinks. The mainthrust of the ADMs job is to ensure that thesoftdrinks products ordered from them are marketedin a certain manner (“Pepsi -Way standards”) inkeeping with the promotional thrust of the company.”

Factual findings of the NLRC, particularly when they coincidewith those of the Labor Arbiter, are accorded respect, evenfinality, and will not be disturbed for as long as such findingsare supported by substantial evidence, defined as suchrelevant evidence as a reasonable mind might accept as

adequate to support a conclusion. In this case, there is nodoubt that the findings of the NLRC are supported bysubstantial evidence. The job descriptions submitted byPEPSI are replete with information and is an adequate basisto compare and contrast the two (2) positions.

Therefore, the two (2) positions being different, it follows thatthe redundancy program instituted by PEPSI wasundertaken in good faith.

FINAL VERDICT: petition is DENIED.





RULE 8

1. KALILID WOOD INDUSTRIES CORP., Alfredo Salonga,Joaquin De Jesus v. IAC and PHILIPPINE BANKING

CORPORATION (1987)

Rule 8, Sec. 8 – How to contest genuineness of documents. Allegations in the complaint that are not specifically denied under

oath are deemed admitted. But this does not extend to those towhich petitioner is not privy to.

CASE:Salonga and De Jesus, officers of PB De Jesus (which was

then changed to Kalilid Corp.), executed promissory note in favor ofPhil .Bank in consideration of a loan extended to them. Since theychanged the company name, Phil. Bank, upon default in payment,filed a complaint against the petitioners above. Kalilid is claiming ithas nothing to do with the obligation since it should be Salonga and

De Jesus who should be held liable (but they cannot be found).However, since Kalilid did not specifically deny in its answer underoath the material allegations in the complaint submitted by Phil.Bank, pursuant to Rule 8, Sec. 8, it is deemed that they admit to thegenuineness and due execution of the promissory notes attached tothe complaint. The issue in this case now is if the admission canextend to the Statement of Accounts also attached to the complaint?No. SC held that this admission does not extend to the Statement of

Accounts also attached since Kalilid is not privy to such statement ofaccounts given that it was obviously Phil. Bank that prepared suchdocuments. So the effect is, although Kalilid is estopped from raisingdefense as to the genuineness of the promissory notes, it is not

estopped to raise such defenses for the Statement of Accounts.

FACTS:

In 1976, De Jesus and Salonga (petitioners) executed a 2promissory notes in favor of respondent Phil. Banking Corp.for 600k and 300k respectively in consideration of a loanthey secured from the bank. The promissory notes weresigned by de Jesus and Salonga both in their official

capacities as President-General Manager and Comptroller ofP.B. De Jesus & Co., AND personal capacities (explicitlystated).

In 1978, the company changed its name to Kalilid WoodIndustries (petitioner).

Phil. Bank then demanded the payment of the obligationsfrom Kalilid but Kalilid disowned the debts.

Phil. Bank filed a complaint for collection against Kalilidand De Jesus and Salonga with CFI of Rizal holding thepetitioners sodliarily liable to pay. In the complaint, the bankattached a separate Statement of Account for eachpromissory note and attached also the promissory notes asannexes.

Kalilid filed an answer saying it had not knowledge sufficientto form belief as to the truth of the material allegations. Andthat it should only be De Jesus and Salonga who should beheld liable. BUT the answer was not verified!

Complaint was dismissed without prejudice to De Jesus andSalonga who couldn’t be found.

Bank filed for motion for summary judgment which was notobjected by Bank.

CFI ruled that Kalilid to pay Phil. Bank 1.7M plus interest,attys fees, costs of suit. on the basis:

o Failure of Kalilid to verify its answer amounted to anadmission of the genuineness and due execution ofthe promissory notes

o 2 Promissory notes were signed in behalf of formercompany PB de Jesus and Company

IAC (now, CA) affirmed decision in toto.

M/R was denied by a Division of IAC. Petition for review with SC

o Kalilid – contesting the amount of indebtedness, andalso that although the failure to deny specifically andunder oath the material allegations in the complaintamounted to an admission, such admission cannotextend and apply to the Statements of Accountssince none of Kalilid’s authorized representativesparticipated in the preparation thereof.





ISSUES: 1. W/N the admission of material allegations of the

complaint (which was a result of the failure tospecifically deny under oath the allegations incomplaint) extends to an admission of the Statement ofAccounts?

2. W/N the amount of Kalilid’s liability is correct? (IAC heldthem liable for 1.7M)

HELD & RATIO:

1. NO, Kalilid, not having been privy to the Statement of Accounts, did not admit the genuineness of the execution ofthe Statement of Accounts in spite of its failure to verify itsanswer to the complaint. Such admission only involves thegenuineness and due execution of the promissory notes.

Rule 8. Section 8. How to contest genuineness ofsuch documents.—When an action or defense isfounded upon a written instrument, copied in or

attached to the corresponding pleading as providedin the preceding section, the genuineness and dueexecution of the instrument shall be deemedadmitted UNLESS the adverse party, under oath,specifically denies them, and sets forth what heclaims to be the facts; but this provision does notapply when the adverse party does not appear to bea party to the instrument or when compliance withan order for an inspection of the original instrumentis refused.

Effect of such admission: Petitioner cannot raise (oris estopped from invoking) defenses which relate to

the genuiness of the notes (ex. signaures areforged, corporation was not authorized to signinstruments)

Court also found that Statement of Accounts wereprepared exclusively by Philippine Banking Corp. asevidenced by being printed on official letterhead ofBank, had the signatures of Bank’s authorizedofficers.

2. As to principal (900k) and interest (14%) – correct; but evidencehas to be adduced by both parties to prove or disprove claimsregarding the basis for including the service and penalty charges.

FINAL VERDICT: Petition is denied. CFI and IAC ruling is affirmedwith respect to principal amounts and stipulated interest due for thepromissory notes. Remanded to trial court to determine if servicecharges and penalty charges in case of late payment are due fromKalilid.





RULE 9

1. SPOUSES DIAZ v. DIAZ

Private Respondent (plaintiff): Jose Diaz

Petitioner (defendant): Juan and Elizabeth Diaz

CASE:M filed an action for sum of money against his brother N. N

filed a motion to dismiss but was denied by the RTC. N filed a petition for certiorari and prohibition with CA. During the pendency ofthe petition, M filed with RTC a motion to declare N in default forfailure to file an answer. The mere pendency of a special civil actionfor certiorari commenced in relation to a case pending before a lowercourt does not interrupt the course of the latter when there is not writof injunction restraining it. Proceedings in the court of origin are notautomatically suspended by filing of a petition for certiorari, much

less by a mere intent to file the same.

FACTS:

Plaintiff and defendant Juan J. Diaz are brothers, and togetherwith their recently widowed sister, Marita D. Papa, owned incommon, as co-heirs, a parcel of land, with improvementssituated in the Municipality of Mandaluyong (now MandaluyongCity).

17 May 1968 - The above-mentioned co-owners sold theirMandaluyong property to PHILAMGEN for P125,000.00.

Immediately after the sale of the Mandaluyong property,defendant Juan J. Diaz, purchased a 1,000 sq. meter lot in

Greenhills Subdivision, San Juan, for P140,00000, using as partof the purchase price plaintiff's P15,000.00 share of the sale ofthe Mandaluyong property, and thereafter caused title thereto tobe issued in his name, all with the knowledge and withoutobjection of the plaintiff;

Considering that defendant Juan J. Diaz, in buying the Greenhillslot, used as part of the purchase price plaintiff's afore-mentionedP15,000.00 share of the sale of the Mandaluyong property, andcaused the title to said lot to be issued in his name, all with theknowledge and without the objection on the part of the plaintiff,an implied trust was created by force of law, between plaintiff

and defendants, in favor of the former, in proportion to hisinterest in said Greenhills lot, pursuant to Article 1452 of the CivilCode of the Philippines;

18 June 1997 - Plaintiff wrote defendant spouses a letterdemanding from them an amount of at least P2 million as hisshare of the actual value of the Greenhills lot which canreasonably be placed at P30 million but defendant spouses,however, refused to honor plaintiff's demand in a letter to himdated August 28, 1997.

19 September 1997 - Private respondent filed an action forsum of money with the Regional Trial Court of MandaluyongCity.

Procedural (sorry ang daming nangyari, hindi ko mabawasan kasikabit-kabit siya. Naka-bold yung mga most relevant) 07 October 1997 - Petitioners filed a Motion to Dismiss on the

ground that private respondent's Complaint failed to state acause of action.

In its Order dated November 27, 1997, the trial court deniedpetitioners' Motion to Dismiss.

6 February1998 - Petitioners filed a Petition for Certiorari andProhibition with the Court of Appeals.

12 February 1998 - In its Resolution, the Second Division of theCourt of Appeals dismissed the petition for failure to comply withSection 11, Rule 13 of the 1997 Rules of Civil Procedure.

23 February1998 - Petitioners filed another Petition for Certiorari and Prohibition with the Court of Appeals.

14 July 1998 - The appellate court denied the petition. 08 October 1998 - Petitioners' Motion for Reconsideration was

denied. Dissatisfied, on October 29, 1998, petitioners filed a Petition

for Certiorari and Prohibition with this Court. In our Resolutiondated November 25, 1998, we treated said petition as a petitionfor review on certiorari under Rule 45.

In the meantime, during the pendency of petitioners' first Petitionfor Certiorari before the Court of Appeals, private respondentfiled with the trial court a motion dated February 16, 1998 todeclare petitioners in default for failure to file an answer onor before January 27, 1998, allegedly the last day for filing thesame. Petitioners filed their Opposition thereto on February 25,





1998. In its Order dated March 2, 1998, the trial court granted the

motion of private respondent and set the date for the ex-parte presentation of evidence on March 30, 1998.

20 March 20, 1998 - Petitioners moved for reconsideration of theorder of default.

Before the trial court could act upon said motion, on March 27,1998, the Court of Appeals granted petitioners' March 17, 1998motion for issuance of a temporary restraining order therebyenjoining the trial court from proceeding with the scheduledhearing on March 30, 1998 or on any future date until ordered bythe appellate court.

With the denial by the Court of Appeals of petitioners' secondPetition for Certiorari , private respondent filed with the trial courta motion dated July 27, 1998, praying that he be allowed toproceed with the ex-parte presentation of evidence. The trialcourt granted said motion in its Order dated August 7, 1998.

20 March 1998 - Petitioners moved for reconsideration of theorder of default.

27 March 1998 - Before the trial court could act upon saidmotion, the Court of Appeals granted petitioners' March 17, 1998motion for issuance of a temporary restraining order therebyenjoining the trial court from proceeding with the scheduledhearing on March 30, 1998 or on any future date until ordered bythe appellate court.

With the denial by the Court of Appeals of petitioners' secondPetition for Certiorari , private respondent filed with the trial courta motion dated July 27, 1998, praying that he be allowed toproceed with the ex-parte presentation of evidence. The trial

court granted said motion in its Order dated August 7, 1998. 13 August1998 - Petitioners filed a Motion for Reconsideration ofthe Order dated August 7, 1998, contending that their Motion forReconsideration dated March 20, 1998 had not yet beenresolved. In the interim, petitioners filed their Answer on October21, 1998.

In its Order dated October 28, 1998, the trial court deniedpetitioners Motions for Reconsideration dated March 20, 1998and August 13, 1998 and expunged their Answer from therecords. Subsequently, in its Order dated November 6, 1998, thetrial court allowed private respondent to present his evidence ex-

parte. 9 November 1998, petitioners filed a Motion to Set Aside the

Order of Default and to Admit Attached Answer. Petitioners fileda supplement thereto on November 17, 1998. On January 8,1999, the trial court denied the motion on the ground that:

It is clear from the records that after the denial of defendants'Motion to Dismiss and Motion for Reconsideration, they failed tofile any answer or pleading within the remaining period providedunder Section 4, Rule 16 of the Rules and opted instead to file apetition for certiorari with the Court of Appeals. It was only uponreceipt of the adverse decision of the Court of Appeals thatdefendants partially sought to set things right.

o The foregoing simply demonstrate defendants' obstinaterefusal or inordinate neglect of the rules of procedurewhich deserves no compassion from the court.Therefore, the default order should be maintained.

In an Order dated January 12, 1999, the trial court correctedcertain paragraphs in its Order dated January 8, 1998 which"had been inadvertently and/or erroneously typed and/oromitted."

On February 3, 1999, petitioners filed, with leave from this Court,a Supplemental Petition, assailing the trial court's Orders datedJanuary 8, 1999 and January 12, 1999 for having been issuedwithout or in excess of jurisdiction, and/or with grave abuse ofdiscretion amounting to lack of jurisdiction.

March 11, 1999 - The trial court rendered judgment in favor ofprivate respondent. On March 30, 1999, petitioners filed a Noticeof Appeal to the Court of Appeals, which was given due courseby the trial court in its Order dated March 31, 1999. Sometimethereafter, the appellate court granted private respondent'sMotion for Execution Pending Appeal.

On December 6, 1999, the appellate court promulgated aResolution:

o (1) reversing its prior decision allowing petitioners to filea supersedeas bond and thereby ordering them tocomply with the writ of execution of the trial court,

o (b) declaring petitioners guilty of forum-shopping, ando (c) denying petitioners' second motion for an extension

of forty-five (45) days within which to file their Appellant'sBrief. Claiming that they would suffer grave injustice





from the enforcement of said Resolution, petitioners filedan urgent motion with this Court on December 10, 1999,praying for issuance of a status quo or temporaryrestraining order.

13 December 13, 1999 - SC granted petitioners' prayer. In the instant Petition for Review on Certiorari , petitioners assail

the Decision dated July 14, 1998 and Resolution dated October8, 1998 of the Court of Appeals, affirming the trial court's denialof their Motion to Dismiss. In their Supplemental Petition,petitioners question the trial court's Order dated January 8,1999, denying their Motion to Set Aside Order of Default and to

Admit Attached Answer, and the Order dated January 12, 1999,correcting certain paragraphs of the Order dated January 8,1999.

ISSUES:

1. Whether the complaint states a cause of action2. Whether a special civil action for certiorari is the appropriateremedy to question a denial of a motion to dismiss3. Whether the order of default is correct.

HELD & RATIO:

1. YES. According to jurisprudence, a complaint states a cause ofaction when it contains the following elements: (1) the legal right ofplaintiff, (2) the correlative obligation of the defendant, and (3) the actor omission of the defendant in violation of said legal right. In thecase at bar, the complaint satisfies all the elements of a cause ofaction. Petitioners contend that the allegations in paragraph 5 failed to

state private respondent's claim to the P15,000.00, theGreenhills property, or the manner by which his rights orinterests were prejudiced by the alleged use of his P15,000.00by petitioners while paragraph 12 is a mere reiteration ofparagraph 5.

SC: We disagree with petitioners. It has been our consistentruling that a complaint states a cause of action when it containsthe following elements: (1) the legal right of plaintiff, (2) thecorrelative obligation of the defendant, and (3) the act or

omission of the defendant in violation of said legal right. In his Complaint, private respondent alleged that he was entitled

to receive P15,000.00 as his share in the sales proceeds of theMandaluyong property. He thereafter claimed that, with hisknowledge and without his objection, the same P15,000.00 wasused by his brother in paying for the Greenhills property. Havingallowed his brother to use his money, private respondentdemanded the return of the present equivalent of his contributionfollowing the sale of the Greenhills property but the said demandwas rejected. Hypothetically admitting these allegations, privaterespondent's Complaint satisfies all the elements of a cause ofaction.

2. NO. A special civil action for certiorari is a remedy designed forthe correction of errors of jurisdiction and not errors of judgment. To

justify the grant of such extraordinary remedy, the abuse ofdiscretion must be grave and patent, and it must be shown thatdiscretion was exercised arbitrarily or despotically. In this case, nosuch circumstances attended the denial of petitioners’ motion todismiss.

3. YES. Petitioner had only five days from receipt of the order of theRTC, or until January 27, within which to file an answer. Whenpetitioner filed their Petition for Certiorari with the Court of Appealson February 6, they were already in default. Hence, the filing of saidPetition for Certiorari cannot be considered as having interrupted thereglamentary period for filing an answer. More importantly, the Rulesof Court provide that the petition shall not interrupt the course of theprincipal case unless a temporary restraining order or writ ofpreliminary injunction has been issued against the public respondent

from further proceeding in the case. Petitioners submit that Section 4, Rule 16 of the Rules,

respecting the period within which a defendant is allowed to filean answer following the denial of his motion to dismiss, must beharmoniously construed with Rule 65. Petitioners try to convincethis Court that they could not be expected to file an answerbecause they intended to file a petition for certiorari with theCourt of Appeals. Petitioners further submit that the notice ofdenial provided in Section 4 referred to a decision or resolutionof the Court of Appeals or the Supreme Court, denying a petition





case to the trial court within fifteen (15) days from notice hereof. Boththe trial court and the appellate court are ordered to immediatelyinform this Court of their compliance with these orders.

2. SPOUSES DIAZ v. COURT OF APPEALSOrder of Default

CASE:

Juan Diaz, Jose Diaz, and Marita Papa co-owned theMandaluyong property, which was sold to PHILAMGEN. Juan Diaz,

and his wife Elizabeth, bought the Greenhills property wherein heused Jose’s P15,000 share from the sale of the MandaluyongProperty to pay the purchase price. The spouses sold the Greenhills

property. Jose demanded the equivalent of his P15,000 in the proceeds of the sale of the Greenhills property, but the spousesrejected. Jose filed an action for sum of money in the RTC ofMandaluyong. Spouses Diaz filed a Motion to Dismiss but wasdenied. They filed for a Motion for Reconsideration but it was alsodenied. They, then, filed a Petition for Certiorari and Prohibition withthe CA. Jose filed with the RTC a motion to declare the spousesDiaz in default for failure to file an answer during the reglementary

period, which was granted.

W/N the trial court erred declaring the Order of Defaultagainst the spouses. NO.

The spouses had only until January 27, 1998 – or five daysafter the receipt of a copy of the decision (which was January 22,1998) – to file their answer for the denial of their Motion forReconsideration. They failed to do so. Their argument that theirPetition for Certiorari before the CA suspends the reglementary

period is untenable since when they filed this petition, they werealready in default. And a Petition for Certiorari can only suspend thereglementary period if there was a writ of injunction or temporaryrestraining order issued. The TRO was issued only two months after.

However, this Court granted spouses Diaz’ Motion to Set

Aside the Order of Default of the RTC to better facilitate theadministration of justice, and to give them the opportunity to provetheir claims in trial.

FACTS:

The siblings, Juan Diaz, Jose Diaz, and Marita Papa, ownedin common a parcel of land, with improvements therein,located in Mandaluyong (“Mandaluyong property”) in the





following proportions: Juan Diaz – 6/8; Jose Diaz – 1/8; andMarita Papa – 1/8.

They sold the Mandaluyong property to PHILAMGEN forP125,000.00. The division of the amount received from thesale is as follows: Juan Diaz – P90,000; Jose Diaz – P15,000; Marita Papa – P15,000.

Juan Diaz purchased a 1,000 sq. Meter lot in GreenhillsSubdivision, San Juan (“Greenhills property”) for P140,000.He used Jose Diaz’s P15,000 share in the Mandaluyongproperty as part of the purchase price. Juan had theGreenhills property titled in his name, with the knowledgeand without objection of Jose.

Spouses Juan and Elizabeth Diaz sold the Greenhillsproperty, together with their home, for P54,000.

Jose Diaz wrote spouses Diaz a letter demanding at leastP2,000,000 as his share in the Greenhills property.However, this was refused by the spouses Diaz.

On September 19, 1997, Jose Diaz filed an action for sum ofmoney with the RTC of Mandaluyong City.

On October 7, 1997, spouses Diaz filed a Motion to Dismisson the ground that Jose Diaz has failed to state a cause ofaction. And assuming, there is a cause of action, it hasalready been barred by prescription and laches. This wasdenied by the trial court on November 27, 1997. The Motionfor Reconsideration was likewise denied on January 14,1998.

On February 6, 1998, spouses Diaz filed a Petition forCertiorari and Prohibition with the Court of Appeals, but thiswas dismissed on February 12, 1998 for failure to complywith Section 11, Rule 13 of the Rules of Court.

On February 16, 1998, Jose filed with the RTC a motion todeclare the spouses Diaz in default for failure to file ananswer on or before January 27, 1998. This was granted onMarch 2, 1998, and the ex-parte presentation of evidencewas set on March 30, 1998.

On March 20, 1998, spouses Diaz moved for reconsiderationfor the order of default.

On March 27, 1998, the Court of Appeals, issued atemporary restraining order enjoining trial court fromproceeding with the March 30 hearing.

On February 23, 1998, spouses Diaz filed another Petitionfor Certiorari and Prohibition with the Court of Appeals, but itwas likewise denied. As a result, Jose filed a motion prayingthat he be allowed with the ex-parte presentation ofevidence. This was granted on August 7, 1998.

On August 13, 1998, spouses Diaz filed a Motion forReconsideration of the August 7 Order contending that theirMarch 20 Motion for Reconsideration has not yet beenresolved.

On October 28, 1998, both August 13 and March 20 Motionfor Reconsideration of spouses Diaz was denied.

On October 29, 1998, spouses Diaz filed a Petition forCertiorari and Prohibition with the Supreme Court. This courttreated the petition as a Petition for Review on Certiorariunder Rule 45.

On November 9, 1998, spouses Diaz filed a Motion to Set Aside the Order of Default, and to admit their Answer filed onOctober 21, 1998. This was denied on the ground that theyfailed to file an answer within the period provided in Section4, Rule 16 of the Rules of Court.

On February 3, 1999, spouses Diaz filed, with leave fromthis Court, a Supplemental Petition alleging that the trialcourt acted with grave abuse of discretion amounting to lackof jurisdiction when it denied their Motion to Set Aside theOrder of Default.

ISSUES: 1. Whether or not Jose Diaz had a cause of action.2. Whether or not the trial court’s erred in granting Jose

Diaz’ motion to declare in default the spouses Diaz.(MAIN ISSUE)

HELD & RATIO:

1. YES

A complaint states a cause of action when it contains thefollowing: (1) the legal right of the plaintiff, (2) the correlativeobligation of the defendant, and (3) the act or omission of thedefendant in violation of said legal right.

In the case at bar, all elements are present since Jose’sP15,000 share was used by the spouses Diaz to buy the





Greenhills property with the former’s knowledge andconsent. When Jose demanded his share in the amountreceived for selling the Greenhills property on the groundthat he contributed to its acquisition, the spouses Diazrejected his demand.

2. NO. The spouses Diaz had only five days from receipt of the

Order to file an answer. On November 27, 1997, their Motionto Dismiss was denied by the RTC. And on January 14,1998, their Motion for Reconsideration was likewise denied.

A copy of the Order was received by them on January 22,1998, hence, they only have until January 27, 1998 to file ananswer, which they failed to do.

The argument that their filing of a Petition for Certiorariinterrupts the reglementary period for filing an answer isuntenable.o When the spouses Diaz filed their Petition for Certiorari

on February 6, 1998, they were already in default.o Section 7, Rule 65 provides that the Petition for Certiorari

will only interrupt the course of the principal case if “atemporary restraining order or writ of preliminaryinjunction has been issued.” The filing or mere intention tofile a Petition for Certiorari does not automaticallysuspend the proceedings on spouses Diaz’ Motion forReconsideration. A temporary restraining order wasissued against the RTC only two months after theirMotion for Reconsideration was denied.

o A Petition for Certiorari is an independent action which isnot part or a continuation of the trial which resulted in the

rendition of the judgment complained of. It does notbecome moot and academic by a continuation of theproceedings in the court of origin.

However, this Court(SC) granted spouses Diaz’ Motion toSet Aside the Order of Default issued by the trial court.Being the court of last resort, it is in the best interest thatliberality and relaxation of the Rules be extended to thespouses Diaz to better facilitate the attainment of justice. Itwould be a great injustice if they were not afforded anopportunity to prove their claims. Every litigant must be

afforded the amplest opportunity for the proper and justdetermination of his cause, free from constraints oftechnicalities.

FINAL VERDICT: The decision of the Court of Appeals affirming thedenial of petitioners’ Motion to Dismiss is AFFIRMED. However, the

Motion to Set Aside Order of Default and to Admit Attached Answeris hereby GRANTED, and the default judgment rendered by the trialcourt is SET ASIDE.





3. VLASON ENTERPRSES CORPORATION v. COURT OFAPPEALS and DURAPROOF SERVICES

Rule 9

CASE:Due to engine trouble, M/V Star Ace had to dock in San

Fernando La Union and unload and store its cargo at the PPAcompound. Customs believed it was the hijacked M/V Silver Medthus it was seized. During the proceedings 3 typhoons made the shiprun aground and abandoned. A salvage agreement was madebetween M/V Star Ace and respondent Duraproof. With the findingsthat there was no fraud, R filed petition for certiorari, prohibition andmandamus assailing such decision imploding several respondednts.Eventually Duraproof amended its petition impleading petitionerVlason. Others were declared in default and were served withsummons except Vlason. Issues: (1) W/N RTC acquired jurisdictionover Vlasov even with the defective pleading — NO, general rule isthat rules are to be construed liberally. The averments in the

complaint, not the title are controlling. Duraproof was responsible forthe errors, the Court cannot excuse it from compliance, for suchaction will prejudice petitioner, who had no hand in the preparation ofthese pleadings. (2) W/N RTC judgment by default of Vlason wasdefective — YES because petitioner was never declared in default inthe first place. The issuance of an order of default is a condition sinequa non in order that a judgment by default be clothed with validity. Itis a legal impossibility to declare a party-defendant to be in defaultbefore it was validly served summons.

FACTS:

• Poro Point Shipping Services (PPSS) acting as Omega SeaTransport Company of Honduras & Panama (Omega) ’s localagent, requested permission for its vessel M/V Star Ace (hadengine trouble), to unload its cargo and to store it at the PhilippinePorts Authority (PPA) compound in San Fernando, La Union (LU)while awaiting transhipment to Hong Kong; approved by Bureau ofCustoms

• Customs personnel boarded the vessel on suspicion that it was thehijacked M/V Silver Med owned by Med Line Philippines Co., andthat its cargo would be smuggled into the country

• District customs collector seized M/V Star Ace and its cargopursuant ot S.2301, Tariff and Customs Code

• Notice of hearing was served on its consignee —HK’s SingsongTrading Co. and its shipper, Thailand’s Dusit International Co. Ltd

• While seizure proceedings were ongoing, LU was hit by 3typhoons, and the vessel ran aground and was abandoned.

• M/V Star Ace’s representative entered into a salvage agreementwith Duraproof to secure and repair the vessel for $1M and 50% ofthe cargo after all expenses, costs and taxes

• Findings: no fraud, warrant of seizure lifted by District Collector ofCustoms; BUT Customs Commissioner refused to issue aclearance, thus forfeiting the vessel and its cargo

• Duraproof filed with RTC Manila Petition for Certiorari, Prohibitionand Mandamus assailing such decision. Also impleaded asrespondents were PPA Representative and Med Line PhilippinesInc.

• *** Duraproof amended its petition, to include former DistrictCollector, Port Manager, VLASON ENTERPRIES, Singsong

Trading, Banco Du Brasil, Dusit Intl Co, Thai-Nan Enterprises Ltd,Thai-United Trading Co,

• Duraproof plainly failed to include any allegation pertainingto petitioner or any prayer for relied against it

• Summonses were served to representatives of the Philippinebased respondents, while the court allowed summons bypublication for the alien defendants

• Duraproof moved to declare the respondents in default, RTCdenied

• RTC declared in default: (1) Singkong Trading Co., (2)Commissioner Mison, (3) M/V Star Ace and (4) Omega, but (2) (3)and (4) appeared in the pretrial hearing, thus Duraproof was

allowed to present evidence against the others • Duraproof testified and adduced evidence: “Vlason Enterprises

represented by Atty. Sy and Vicente Angliongto thru constantintimidation and harassment of utilizing the PPA Management ofSan Fernando, La Union x x x further delayed, and [privaterespondent] incurred heavy overhead expenses due to direct andincidental expenses xxx causing irreparable damages of aboutP3,000,000 worth of ship tackles, rigs, and appurtenancesincluding radar antennas and apparatuses, which were taken





surreptitiously by persons working for Vlason Enterprises or itsagents[.]”

• RTC Decision - Vlason to pay P3M for damages • Vlason filed an MR on the grounds that it was not impleaded as a

defendant, served summons or declared in default; that privaterespondent was not authorized to present evidence against it in

default; that the judgment in default was fatally defective, becauseprivate respondent had not paid filing fees for the award; and thatprivate respondent had not prayed for such award

• Duraproof filed with the CA Petition for Certiorari and Prohibition tonullify cease and desist orders of the RTC; CA issued a TRO

• Sherriff Camañgon sent a notice to pay Duraproof P3M, eventuallylevied on Vlason’s properties which were scheduled for auction

• Duraproof filed a special appearance before the CA. It prayed forthe lifting of the levy on its properties or, alternatively, for atemporary restraining order against their auction until its Motion forReconsideration was resolved by the trial court.

• RTC Decision: …in the sense that the rules should be liberally

construed in order to promote their object and to assist the parties,resolves to DENY petitioner ’s Motion to have the Commissioner ofCustoms AND OTHER ENUMERATED RESPONDENTSDECLARED IN DEFAULT.

• there never was issued an order of default againstrespondents including Vlasov

• Having thus established that there [had] been no order ofdefault against VEC as contemplated by Sec. 1, Rule 18,in relation to Sec. 9, Rule 13, Revised Rules of Court,there could not have been any valid default-judgmentrendered against it.

• CA Decision: there was no need to serve summons anew on

petitioner, since it had been served summons when the Second Amended Petition (the third) was filed; and that petitioner ’s Motionfor Reconsideration was defective and void, because it containedno notice of hearing addressed to the counsel of privaterespondent in violation of Rule 16, Section 4 of the Rules of Court.

ISSUES: 1. Whether or not RTC acquired jurisdiction to render

judgment against Vlason because

• (A) the title of the three Petitions filed by privaterespondent never included petitioner as a party-defendant, in violation of Rule 7; and

• (B) the Petitions failed to state any allegation ofultimate facts constituting a cause of action againstpetitioner.

2. Whether or not RTC judgment by default was fatallydefective

• because petitioner was never declared in default inthe first place

HELD & RATIO:1. NO, RTC had jurisdiction over petitioner

• (A) • The judicial attitude has always been FAVORABLE and

LIBERAL in allowing amendments to pleadings. Pleadingsshall be construed liberally so as to render substantial justiceto the parties and to determine speedily and inexpensivelythe actual merits of the controversy with the least regard totechnicalities

• The inclusion of the names of all the parties in the title of acomplaint is a FORMAL REQUIREMENT under Section 3,Rule 7. However, the rules of pleadings require courts topierce the form and go into the substance, and not to bemisled by a false or wrong name given to a pleading. Theaverments in the complaint, not the title, are controlling.

Although the general rule requires the inclusion of the namesof all the parties in the title of a complaint, the non-inclusionof one or some of them is not fatal to the cause of action of aplaintiff, provided there is a statement in the body of the

petition indicating that a defendant was made a party to suchaction.

• Duraproof claims that petitioner has always been included inthe caption of all the Petitions it filed, which included AntonioSy, field manager of petitioner. We checked and noted thatin the caption and the body of the Amended Petition andSecond Amended Petition with Supplemental Petition,

Antonio Sy was alleged to be representing Med LinePhilippines, not petitioner.





• Because it was private respondent who was responsible forthe errors, the Court cannot excuse it from compliance, forsuch action will prejudice petitioner , who had no hand inthe preparation of these pleadings. In any event, wereiterate that, as a general rule, mere failure to include thename of a party in the title of a complaint is not fatal by itself.

• (B) • The general rule is allegata et probata -- a judgment must

conform to the pleadings and the theory of the action underwhich the case was tried. But a court may also rule andrender judgment on the basis of the evidence before it, eventhough the relevant pleading has not been previouslyamended, so long as no surprise or prejudice to the adverseparty is thereby caused

• In the case at bar, the liability of petitioner was based not onany allegation in the four Petitions filed with the trial court,but on the evidence presented ex parte by the privaterespondent. Since the trial court had not validly acquired

jurisdiction over the person of petitioner, there was no wayfor the latter to have validly and knowingly waived itsobjection to the private respondent’s presentation ofevidence against it.

2. YES RTC judgment by default is defective

• RTC never acted on Duraproof’s subsequent Motion todeclare Vlason in defalut. RTC in its resolution admitted thatit never declared petitioner in default

• Having thus established that there had been no order ofdefault against VEC as contemplated by Sec. 1, Rule 18, inrelation to Sec. 9, Rule 13, Revised Rules of Court, therecould not have been any valid default-judgment rendered

against it. The issuance of an order of default is a conditionsine qua non in order that a judgment by default be clothedwith validity. Further, records show that this court never hadauthorized Duraproof to adduce evidence ex-parte againstVEC

• It is a legal impossibility to declare a party-defendant to be indefault before it was validly served summons.

FINAL VERDICT: Petition is GRANTED.

Notes:

• This case was assigned under Rule 9 — quick overview: • Rule 9 - Effect of Failure to Plead;

• Sec.1 - Defences and objections not pleaded;• Sec.2 - Compulsory counterclaim, or cross-claim, not set up

barred;• Sec. 3 - Default, declaration of





4. MEDISERV, INC., DELIZO, M.D. and DELIZO, M.D. v. CHINABANKING CORPORATION and KELLY SALVADOR

G.R. No. 140755 | April 17, 2001Rule 9

CASE:

China Banking Corporation filed a complaint for a sum ofmoney to recover deficiency judgment in foreclosure proceedingsagainst petitioners. Yu, the Assistant VP of the bank, signed thecertification against forum shopping.

Petitioners filed a Motion for Extension of Time to File Motionto Dismiss/answer, which was granted. They were given 15 days.However, because their counsel withdrew their appearance, theyagain filed another motion for extension for another 15 days. Thiswas again granted by the Judge Makasiar, with a warning that nofurther extension would be entertained. Despite the warning,

petitioners yet filed another motion, which was denied.10 days after the last day granted by the Judge for

petitioners to file a motion to dismiss, the petitioners filed a motion todismiss the complaint on the ground of litis pendentia (pending suit),lack of cause of action and payment of claim. Private respondentsfiled a motion to declare petitioners in default, and to strike out themotion to dismiss. Judge granted the motion.

Petitioners filed an Omnibus Motion; (a) to lift the order ofdefault; (b) to dismiss the complaint with prejudice for violation of therequirement of certification against forum-shopping; and (c) to citeLydia Yu in contempt of Court. Judge denied motion in its September1998 Order.

Before the CA, petitioners assailed the trial court’s refusal todismiss the complaint on the ground of non-compliance with the

requirements of a certification of forum-shopping and declaring the petitioners in default without first resolving this motion to dismisswhich was filed ahead of bank’s motion to declare them in default.CA ruled that the Omnibus Motion to L ift Order of Default was “fatallyflawed,” as it was filed beyond the extended period s to file answergranted by the court, was not under oath, and was not accompaniedby a proper affidavit of merit.

The issue is whether or not the court a quo’s decision wasnot in accordance with law and SC decisions when it avoided to ruleon the issue of respondent bank’s failure to comply with the essential

requirement of a certification against forum shopping and insteaddeclared the petitioners in default.

SC held: No. Petition is unmeritorious. Court agrees that theOmnibus Motion was fatally flawed although the Omnibus Motioninsofar as it seeks the lifting of the order of default, may have beenseasonably filed two months after petitioners were already declared

in default for failure to file motion to dismiss within the extended period granted by the court. However, the said Omnibus Motion wasnot under oath as required in Rule 9, Sec. 3 (b), and the Affidavit ofMerit is defective in that it failed to aver any fact which constitutesmovant’s good and substantial defense nor allege circumstancesc onstituting defendants’ mistake or excusable negligence ascontemplated by the Rules. Petitioners have conspicuously failed totraverse these factual findings of the court on these defects, whetherin its Petition, its Reply to Comment and Memorandum, and insteadseek to focus their attack on respondent’s complaint on the ground ofalleged violation of the rule on forum shopping. A party declared indefault is deprived of the right to take part in the trial and forfeits his

rights as a party litigant except the right to receive notice ofsubsequent proceedings. To obtain relief from an order of default,the said party may at any time after notice thereof and before

judgment file a motion under oath to set aside order of default upon proper showing that his failure to answer was due to fraud, accident,mistake or excusable negligence and that he has a meritoriousdefense. If not accompanied by an affidavit of merit, the trial courthas no authority to consider the same. Petitioners failed to set asidethe order of default and must suffer the consequences thereof.PETITION DENIED.

FACTS: Private respondent China Banking Corporation filed a

complaint for a sum of money to recover deficiency judgmentin foreclosure proceedings against the petitioners.

According to China Banking Corporation:o Petitioners executed and delivered in its favor three

promissory notes covering an aggregate sum of P18million, and secured a real estate mortgage over aparcel of land.





o Petitioners defaulted in their obligation and despitedemands, failed and refused to pay.

o Upon foreclosure of mortgage, there was still left adeficiency of approximately P5 million.

o Lydia Yu, Assistant VP of China Banking, signed thecertification against forum shopping.

Petitioners filed a Motion for Extension of Time to File Motionto Dismiss and/or Answer, praying that they be given anadditional period of 15 days within which to file theirappropriate pleading or motion. Judge Makasiar granted themotion.

The law firm of Guerrero, Alambra, Viernes and Margarejowithdrew its appearance as counsel for petitioners.

Petitioners filed another motion for extension for anadditional 15 days, averring that they were shopping for anew counsel.

Judge granted the motion, with the warning this time that nofurther extension would be entertained.

Despite such warning, petitioners filed yet another motion fora last extension of time to file their motion to dismiss and/or

Answer. This last motion for extension was denied. Some 10 days from the last day granted by the Judge for the

petitioners to file their responsive pleading and/or motion todismiss, the petitioners filed a motion to dismiss thecomplaint on the ground of litis pendentia, lack of cause ofaction and payment of claim.

Petitioners:o Alleged that they had earlier filed a case against the

defendant for Declaration of Nullity of Auction Saleand all incidents thereto, Specific Performance andDamages with prayer for a Temporary RestrainingOrder and/or writ of Preliminary Injunction.

o Assailed the legality of the foreclosure proceedingsand the auction sale of the real property.

o Claim that the pendency of the civil case warrantedthe outright dismissal of the case subject of theinstant petition as the requisites of litis

pendentia were attendant.

Private respondents filed a Motion to Declare petitioners indefault, and another Motion to Strike Out the Motion toDismiss. Judge granted the motion.

Petitioners filed an Omnibus Motion; (a) to lift the order ofdefault; (b) to dismiss the complaint with prejudice forviolation of the requirement of certification against forum-

shopping; and (c) to cite Lydia Yu in contempt of Court.Judge denied motion in its September 1998 Order.

Before the CA, petitioners assailed the trial court’s refusal todismiss the complaint on the ground of non-compliance withthe requirements of a certification of forum-shopping anddeclaring the petitioners in default without first resolving thismotion to dismiss which was filed ahead of bank’s motion todeclare them in default.

CA dismissed the petition for being “absolutely devoid ofmerit”. It ruled that the Omnibus Motion to Lift Order ofDefault was “fatally flawed,” as it was filed beyond theextended periods to file answer granted by the court, was

not under oath, and was not accompanied by a properaffidavit of merit.

Motion for reconsideration of the order of dismissal wasdenied.

ISSUE: Whether or not the court a quo’s decision was not inaccordance with law and SC decisions when it avoided to ruleon the issue of respondent bank’s failure to comply with theessential requirement of a certification against forum shoppingand instead declared the petitioners in default.

HELD & RATIO:NO, Supreme Court agrees with Court of Appeals.

Petitioners’ Motion to Dismiss the Complaint against them onthe grounds of litis pendentia, lack of cause of action, andpayment of claim was filed ten days late, as the last day forfiling answer/motion to dismiss was after two extensions offifteen days each were granted by the court on motion ofpetitioners.

Court agrees that the Omnibus Motion was fatallyflawed although the Omnibus Motion insofar as it seeks the





lifting of the order of default, may have been seasonably filedtwo months after petitioners were already declared in defaultfor failure to file answer/motion to dismiss within theextended period granted by the court to do so. However, thesaid Omnibus Motion was not under oath as required in Rule9, Sec. 3 (b), and the Affidavit of Merit is defective in that it

failed to aver any fact which constitutes movant’s good andsubstantial defense nor allege circumstances constitutingdefendants’ mistake or excusable negligence ascontemplated by the Rules. Petitioners have conspicuouslyfailed to traverse these factual findings of the court on thesedefects, whether in its Petition, its Reply to Comment andMemorandum, and instead seek to focus their attack onrespondent’s complaint on the ground of alleged violation ofthe rule on forum shopping.

A party declared in default is deprived of the right to takepart in the trial and forfeits his rights as a party litigant exceptthe right to receive notice of subsequent proceedings. To

obtain relief from an order of default, the said party may atany time after notice thereof and before judgment file amotion under oath to set aside order of default upon propershowing that his failure to answer was due to fraud,accident, mistake or excusable negligence and that he has ameritorious defense. If not accompanied by an affidavit ofmerit, the trial court has no authority to consider the same.Petitioners failed to set aside the order of default and mustsuffer the consequences thereof.

Petitioners’ submission that their Motion to Dismiss, havingbeen filed ahead of respondent bank’s Motion to DeclareDefendants in Default, must take precedence and should

have been resolved first, does not impress theCourt. Petitioners’ period to file responsive pleading hadexpired, and was overtaken by respondent’s motion todeclare them in default. There is no rule or jurisprudencethat mandates that both incidents cannot be resolvedtogether. In fact, an order of default can be made only uponmotion of the claiming party, and the motion herein wasprecisely based on the defendants’ failure to file his responsive pleading/motion to dismiss on time.

Petitioners claim that respondent bank “slept on its rights”apparently because it did not immediately file its motion todeclare petitioners in default. But they committed a moreserious delay, fatal to their rights, by filing a motion todismiss way beyond the forty five (45) days granted for themto do so, and without any satisfactory explanation under oath

for their late action, despite the court’s warning that nofurther extension would be granted after the earlier motionsfor extension were granted, nor any showing that they havea meritorious defense.

FINAL VERDICT: Petition is denied for lack of merit.





5. RAYMUNDO v. CA

FACTS:

Arellano filed a complaint for sum of money againstRaymundo with RTC Pasig

Raymundo filed a Counterclaim. RTC set pre-trial

conference, which was postponed since Raymundo filedmotion for leave to file amended answer. He then filed anamended answer and Arellano filed an opposition. RTCissued an Order striking out Raymundo’s amended answerfor failure to comply with Rule 10, Sec 3. RTC scheduled apre-trial conference (whether Raymundo’s amended answerwith counterclaim will be admitted)

As his motion to admit amended answer was not yetresolved, Raymundo did not attend the pre-trial conference.Later that day, he learned that the trial court declared him indefault for non-appearance at the pre-trial conference andallowed Arellano to present his evidence ex-parte the

following day Despite Raymundo’s filing of an urgent motion to set aside

default order, RTC proceeded to receive privaterespondent’s evidence ex-parte

Raymundo filed with the trial court a motion to set asiderespondent’s ex-parte evidence

RTC rendered a decision without resolving petitioner’smotion to set aside default order and motion to set asideplaintiff’s ex-parte evidence

ISSUE:

Whether CA erred in denying the issuance of a writ ofcert iorari (YES)

HELD:

In the normal course of events, the Court of Appealscorrectly denied the petition for certiorari in view of theavailability of appeal therefrom.

However, in the exceptional circumstances presented in thiscase, appeal seems to be inadequate;

Even if appeal was interposed, certiorari still lies to correctdespotic discretion

The failure of the trial court to act on the twin motions ofpetitioner to set aside the order of default and to set asidethe evidence ex-parte, is not mere error or oversight.

o It seriously affected the discretion of the trial court. Itamounted to grave abuse of discretion deprivingRaymundo of the opportunity to be heard on the two

crucial motions which, if granted, would haveallowed petitioner to regain his standing in court andto present his evidence

o Hence, RTC acted despotically in allowing Arellanoto present evidence ex-parte even if Raymundocould not be lawfully declared in default for non-appearance due to RTC’s own failure to rule on theadmission of his amended answer

RTC erred in declaring Raymundo in default for notattending the pre-trial conference since he was awaitingresolution of his motion to admit amended answer, whichtakes precedence over the pre-trial conference

DOCTRINE

Certiorari is allowed when an appeal is not adequate, orequally beneficial, speedy and sufficient





RULE 10

1. SIASOCO ET AL. v. CA Amendment of Complaint

CASE:In the instant case, Siasoco et al filed a motion to dismiss

the petition gainst them and Carissa Realty for specific performancewith damages. This was because Iglesia Ni Kristo had a cause ofaction against them for the alleged sale of land to herein PETs.Carissa in fact filed only a motion to dismiss whereas Carissa filed aresponsive pleading. Carissa was subsequently dropped as adefendant in the case against PETs and then the INC moved toamend their complaint. The PETs in this case opposed the motion toamend the complaint because a responsive pleading had alreadybeen filed which typically bars a complaint under sec. 2 rule 10. Inruling against herein petitioners the SC stated that the bar to

amendments only applied to the complaint against Carissa as theywere the only ones that filed a responsive pleading. The bar did notapply with the PETs because they only filed a motion to dismisswhich is not a responsive pleading.

FACTS:

PET assails the decision of the court of appeals which ruledto annul a TRO issued by virtue of a petition for certiorarifiled in the CA. The CA also directed the PETs to file their

Answer within six days from the date of the decision. Therecourse to the RTC was made because the Private RESamended their complaint before the PETs got a chance to

file an answer. Essentially if you understood the above paragraph, you’d get

na they’re obviously trying to make it so that the private RESin the instant case cannot make an amendment to theircomplaint.

The PETs in this case were registered owners of landlocated in Montalban, Rizal. In Dec 1994, they attempted tosell these properties. Iglesia Ni Cristo (INC), who is thePrivate PET in this case. attempted to negotiate with them.They did not agree on anything.

A year after, (1995) they attempted to negotiate again. InDEC of 1996 a final offer was reached. INC then acceptedthe offer. The INC however refused to state a nominalconsideration for the deed of sale. The PETs then sold thesame through Carissa Homes Dev. Corp. (Carissa)

The INC then sued Carissa and the PETs for specific

performance and damages. PETs filed motion to dismissand Carissa filed an answer. Private RES filed a motion todrop Carissa as a defendant and to amend the complaint.PETs opposed this because a responsive pleading hadalready been filed. Then the sequence of events thatunfolded in the first paragraph occurred, hence the currentPET.

ISSUE:

1. W/N the RES in this case should be allowed to amend itscomplaint considering the Carissa had in fact filed ananswer.

HELD & RATIO:

NO, The SC sustains the ruling of the CA but for a differentreason. They also admonish the PETs for resorting to theremedy of certiorari when appeal would’ve been the properrecourse. This is because it was a disposition of the merits ofthe case and so appeal was in fact the proper remedy.

The PETS invoke the rules which say “party may amend hispleading once as a matter of right at any time before aresponsive pleading is served xxx.” Sec. 2 Rule 10. TheSupreme Court still ruled against them because the fact thatCarissa already filed its answer id not bar private respondentfrom amending its complaint. This is because the amendedcomplaint was only going to affect herein PETs. Theamendment would not have lied had it been made againstCarissa, however that was not the case. The PETs only fileda motion to dismiss which is not a responsive pleading. Thecourt also said “[a]mendments to pleadings are generallyfavored and should be liberally allowed in furtherance of

justice in order that every case may so far as possible bedetermined on its real facts and in order to speed the trial ofcases or prevent the circuity of action and unnecessary





exception – where the acts performed after an injunction suitis brought, a defendant may not as a matter of right proceedto perform the acts sought to restrained and then be heard toassert in a suit that the injunction will not lie because he hasalready performed the acts before the final hearing.

The court said that, a court should not (by means of preliminaryinjunction) transfer the property from the possession of a party toanother where legal title is in dispute and the party havingpossession of the property asserts its ownership. One who does theact sought to be restrained, does so at his own peril.

In the case, when Uson filed the complaint, she had title to and wasasserting ownership of the lot. An action was brought to enjoinVersoza from proceeding with the sale but he continued it. In doingso, Versoza was acting at his own peril.

FINAL VERDICT: Petition is denied for lack of merit and the CAdecision is affirmed.

3. CHUA V. CARule 10 | Amended Pleadings

CASE:

This petition for review on certiorari is based on a leasecontract between Chua and Ibarra, which was to last 5 years. After

the lease’s expirations, after failed attempts to renew the contract,the MTC of Paranaque ordered a 2 year extension of the contract.On appeal, the RTC of Makati ruled that the 2 year extension wasinvalid and thus, petitioner’s prolonged stay was illegal. Petitionerswere ordered to vacate the premises and pay accrued or backrentals, which the CA affirmed. The issue was whether or not the CAerred in affirming the RTC’s decision. The SC ruled that the CA didnot err and that respondents were entitled to the accrued rentals.

Any objection to the admissibility of evidence should be made at thetime such evidence is offered or as soon thereafter as the objectionto its admissibility becomes apparent. Rule 10, §5 of the Rules ofCivil Procedure allows the amendment of the pleadings in order to

make them conform to the evidence in the record.

FACTS:

This is a petition for review on certiorari of the decision of theCourt of Appeals affirming the decision of the RTC of Makatiordering the ejectment of petitioners from the premisesowned by private respondent.

Petitioner Chua leased a commercial unit in Baclaran for aperiod of 5 years, from January 1, 1985 to December 31,1989.

o The contract expressly provided for the renewal of

the lease at the option of the lessees “in accordancewith the terms of agreement and conditions set bythe lessor.”

Before the expiration of the lease, the parties discussed thepossibility of renewing it. They exchanged proposals andcounterproposals, but they failed to reach an agreement.The dispute was referred to the barangay captain forconciliation but still, the parties reached no settlement.

Private respondent Ibarra then filed a complaint for unlawfuldetainer against petitioners in the MTC of Parañaque, which





ordered the extension of occupancy of the subject premisesfor a period of 2 years.

On appeal by both parties, the RTC of Makati ruled that thelease was for a fixed period of five (5) years and that, uponits expiration on January 1, 1990, petitioners’ continued stayin the premises became illegal.

Petitioners were then ordered to vacate the premises andturn over possession of the private respondent’s party.

o Petitioners were likewise ordered to pay the plaintiffthe following:

the amount of P42,306.00 representingaccrued or back rentals from January 1,1987 to December 31, 1989;

a monthly rental of P7,320.50 for the use oroccupancy of the premises starting January1, 1990 until July 24, 1990 and at TenThousand (P10,000.00) Pesos from July 24,1990 until the defendants shall have vacated

the same Petitioners appealed to the Court of Appeals, which affirmed

the lower court’s decision. They then filed a motion forreconsideration, which was likewise denied.

ISSUES: 1. Whether or not the CA erred in affirming the lower

court’s finding that petitioners owe private respondentthe amount of P42,306.00 as unpaid rentals fromJanuary 1, 1987 to December 31, 1989

HELD & RATIO:

1. NO, the CA did not err in affirming the lower court’s finding. While it is true that there was no express demand

in private respondent’s complaint for unlawfuldetainer against petitioners for the latter’s paymentof rental arrearages, private respondent in apleading filed with the MTC (by way of comment topetitioners’ motion to admit amended answer)stated:

o That moreover the unpaid rentals fromJanuary 1987 to December 31, 1989

amounts to P42,306.00, exclusive of rentalsfrom January 1 to December 31, 1990 whichwould be P180,000.00 or a total ofP222,306.00.

At the pre-trial, among the issues proposed bycounsel for private respondent was whether

petitioners were in arrears for the rentals from Dec.31, 1987 to January 1989, in accordance with thecontract;

Counsel for petitioners did not object to thestatement of issues made by private respondent’s counsel and instead simply stated as their own mainissue whether private respondent had a valid causeof action for ejectment against them as he is not thesole owner of the leased premises.

Later at the hearing, private respondent RamonIbarra testified that although his lease contract withpetitioners stipulated an annual ten percent (10%)

additional rental starting in 1986, petitionerscontinued to pay only the original monthly rental ofP5,000 stipulated in their contract so that petitionershad incurred total rental arrearages at the end of1989 of P42,306.00.

o Petitioners’ rental arrearages from 1986 to1989 were obviously an issue raised at thepre-trial and on which issue privaterespondent presented evidence without anyobjection from petitioners.

o Considering that the petitioners incurredsaid rental arrearages because they did not

pay private respondent the automatic 10%increase in their monthly rental every yearfor the years 1986 to 1989 as agreed upon,

justice and good faith demand thatpetitioners should pay said rentalarrearages.

Any objection to the admissibility of evidence shouldbe made at the time such evidence is offered or assoon thereafter as the objection to its admissibilitybecomes apparent, otherwise the objection will be





considered waived and such evidence will form partof the records of the case as competent andadmissible evidence. Rule 10, §5 of the Rules ofCivil Procedure allows the amendment of thepleadings in order to make them conform to theevidence in the record.

FINAL VERDICT: Petition is denied. The decision of the Court of Appeals is AFFIRMED.

4. FRANCISCO ZARATE v. RTC Amendment of Complaint

CASE:

The substantive issue being assailed in this action is anexecution sale done by the Provincial Sheriff of Iloilo to the Hauteas

Spouses on the property of Petitioner (Zarates). Before the one-yearredemption period expired, petitioner filed a case for annulment ofthe execution sale with damages and prayer for the issuance of awrit of preliminary injunction and a temporary restraining order. TheZarates argued that the subject parcels of land were exempt fromattachment and execution since they were mortgaged to DBP

pursuant to a RA No. 85. DBP later on filed a motion-for-intervention,and foreclosed on the mortgage of the said property. DBP later onfiled a motion to withdraw, which was not opposed by either Zaratesor Hauteas, arguing that their participation has become moot sincetheir interest in the property has already terminated by theirforeclosure. The Zarates after, filed a motion to amend complaint ,

adding to their complaint the fact that the foreclosure sale was invalidsince it failed to follow the prescribe requirements of law of noticeand hearing. The RTC denied the amended complaint and alsodismissed the original complaint due to the reason that DBP hasalready foreclosed the property forcing the court to go back to themerits of the original complaint. In dismissing the original complaintthe RTC argued that RA 85, was for the benefit of DBP and anyviolation of this law would violate the right of DBP (basically sayingthat DBP would be plaintiff along with petitioner in a case), thus thec omplaint must be dismissed since DBP’s right was not violated. Onappeal, the Supreme Court accepted the reasons of the RTC andadded that the withdrawal of DBP rendered the case academic since

any judgment is or is not exempt from execution would not bind DBP. As for denying the amendment the court held that it is within thediscretion of the RTC to accept or deny any substantial amendment.

FACTS:

Pursuant to a judgment rendered in Civil Case No. 16131 bythe Regional Trial Court of Iloilo in favor of Tomas Hauteaagainst Francisco Zarate, the Provincial Sheriff of Iloilo incoordination with the Provincial Sheriff of Aklan, sold on





5. ARB CONSTRUCTION CO. INC. v. CARule 10; Amendment of Pleadings

CASE:

TBSS and ARBC entered into two Service Contracts whereinTBSS agreed to provide security guards in the establishments

maintained by ARBC. When ARBC wanted to terminate it, TBSSopposed citing the one-year period provided in their contract.

Acknowledging this fact, what ARBC did instead was it decreasedthe number of security guards employed to only one (1) allegedlybecause of negligence and inefficiency of the guards. This promptedTBSS to file a Complaint for Preliminary Injunction seeking to enjoin.Months after, it filed a Motion for Leave to File Attached Amendedand Supplemental Complaint; that it now wanted a case for Sum ofMoney and Damages instead of Preliminary Injunction. ARBCopposed the motion contending that the amendment was invalidbecause there was a substantial change in the cause of action andthat there was also a change in the theory of the case.

The issue in this case is whether or not the Amended andSupplemental Complain was valid.

The Supreme Court ruled in favor of TBSS saying that theamendatory allegations were mere amplifications of the originalcause of action. An amendment will not be considered as stating anew cause of action if what are alleged refer to the same matter butare more fully and differently stated, or where averments which wereimplied are made in expressed terms. In this case, the originalcomplaint prayed for “such other reliefs that are considered just andequitable under the premises”. This is a "catch-all" phrase, whichdefinitely covers the amplifications and additional avermentscontained in the Amended and Supplemental Complaint.

FACTS:

TBS Security and Investigation Agency (TBSS) entered intotwo (2) Service Contracts with ARBC wherein TBSS agreedto provide and post security guards in the five (5)establishments being maintained by ARBC.

The Service Contract provided that it shall be effective for aperiod of one (1) year and unless it is terminated throughwritten notice, it shall be renewed automatically.

After six months, ARBC informed TBSS of its desire toterminate the Service Contracts. ARBC, through its VP forOperation Molina, informed TBSS that it was replacing itssecurity guards with those of Global Security Investigation

Agency (GSIA). TBSS responded saying that ARBC could not pre-terminate

the Service Contracts nor could it post security guards fromGSIA as it would run counter to the provisions of theirService Contracts.

Subsequently, what Molina (VP of ARBC) did was hedecreased the security guards to only one (1) allegedlybecause of incidents of negligence and inefficiency of thesecurity guards of TBSS.

o a Mitsubishi car was stripped of partso a concrete vibrator and mercury light assembly were

stolen from the construction site TBSS filed a Complaint for Preliminary Injunction against

ARBC and GSIA. Two months later, TBSS filed a Motion for Leave to File

Attached Amended and Supplemental Complaint . TBSSsubmitted that it now desired to pursue a case for Sum ofMoney and Damages instead of the one previously filed forPreliminary Injunction. ARBC opposed such motion.

ARBC’s contentions:o There was a substantial change in TBSS’s cause of

action. In the original complaint the only thing

alleged and is being prayed for is forpetitioner ARBC to be enjoined fromreplacing the security guards of private

respondent and for the contracts to beenforced.

In the amended and supplementalcomplaint, TBSS is asking for payment forunpaid services, lost income, and damages.

o There was also change in the theory of the case. In the original complaint, TBSS was asking

for specific performance (enforcement of thecontract).





6. VLASON ENTERPRISES CORPORATION v. CA andDURAPROOF SERVICES

G.R. Nos. 121662-64. July 6, 1999Rule 10 (Amendment)

CASE: (Sorry kung medyo info overload ‘yung digest at kung super

haba, ang dami kasing issues ng case na ‘to. Puro proceduralissues. )

To enforce its preferred salvor’s lien, Duraproof filed withthe RTC a Petition for Certiorari, Prohibition and Mandamus againstComm. Mison and Sy as well as the PPA Representative and MedLine Philippines, Inc. Duraproof amended its Petition to include othervarious defendants one of which is Vlason Enterprises Corporation(represented by Vicente Angliongto). Summonses for the amendedPetition were served on the defendants (including Angliongto throughhis secretary). Duraproof filed the “Second Amended Petition withSupplemental Petition” against Singkong Trading Company; andOmega and M/V Star Ace. Trial court granted Duraproof’s ex parte

Motion to present evidence against the defaulting respondents. Thetrial court declared the other respondents (including Vlason) indefault and allowed Duraproof to present evidence against them.Trial court ruled in favor of Duraproof and ordered Vlason to payP3M for damages. Vlason filed an MR citing various grounds (that itwas allegedly not impleaded as a defendant, served summons ordeclared in default,etc.).

Meanwhile, Vlason also filed a special appearance beforethe CA praying for the lifting of the levy on its properties or,alternatively, for a TRO against their auction until its MR wasresolved. CA rendered its decision ordering the lower court to takeappropriate action on the urgent ex-parte motion for issuance of a

writ of execution filed by Duraproof. In this assailed Resolution, CAclarified, among others, that there was no need to serve summonsanew on Vlason, since it had been served summons when theSecond Amended Petition (the third) was filed.

W/N the trial court acquired jurisdiction over Vlason despitenot having been served summons anew for the Second AmendedPetition or for the Second Amended Petition with SupplementalPetition.

NO, the first service of summons on petit ioner was

invalid (Summons were served to Bebero. She was the secretary of

Angliongto, who was president of both VSI and petitioner, but shewas an employee of VSI, not of petitioner VEC). Therefore, the trialcourt never acquired jurisdiction, and the said court should haverequired a new service of summons for the amended Petitions.

Although it is well-settled that an amended pleading supersedes theoriginal one, which is thus deemed withdrawn and no longer

considered part of the record, it does not follow ipso facto that theservice of a new summons for amended petitions or complaints isrequired. Where the defendants have already appeared before

the tr ia l court by virtue of a summon s on the orig inal complaint,

the amended complaint may be served upon them without need

of another summons , even if n ew causes of action are alleged. Itis not the change of cause of action that gives rise to the need toserve another summons for the amended complaint, but rather theacquisition of jurisdiction over the persons of the defendants.

FACTS:

Poro Point Shipping Services (local agent of Omega SeaTransport Company) requested permission for its vessel M/VStar Ace to unload its cargo and to store it at the PhilippinePorts Authority (PPA) in La Union while awaitingtransshipment to Hongkong.

Bureau of Customs approved the request; however, despitethe approval the customs personnel boarded the vesselwhen it docked on the suspicion that it was the hijackedvessel of Med Line Philippines Co., and that its cargo wouldbe smuggled into the country.

The district customs collector seized said vessel and itscargo pursuant to the Tariff and Customs Code.

La Union was hit by three typhoons, thus the vessel ranaground and was abandoned.

Thereafter, its authorized representative entered into asalvage agreement with Duraproof to secure and repair thevessel.

Subsequently, the District Collector of Customs, AurelioQuiray, lifted the warrant of seizure. However, then CustomsCommissioner Salvador Mison (Comm. Mison) insteadordered the forfeiture of the vessel and its cargo.

Accordingly, acting District Collector of Customs John Sy





(Sy) decreed the forfeiture and the sale of the cargo in favorof the government.

To enforce its pref erred salvor’s lien, Duraproof filed with theRTC of Manila a Petition for Certiorari , Prohibition andMandamus assailing the actions of Comm. Mison and Sy.

Also impleaded as respondents were PPA Representative

Silverio Mangaoang and Med Line Philippines, Inc. Duraproof amended its Petition to include former District

Collector Quiray; PPA Port Manager Amor Jr; VlasonEnterprises Corporation (represented by its president,Vicente Angliongto); Singkong Trading Company(represented by Atty. Tamondong); Banco Du Brasil; DusitInternational Co., Inc.; Thai-Nan Enterprises Ltd. and Thai-United Trading Co., Ltd. In both Petitions, Duraproof plainlyfailed to include any allegation pertaining to petitionerVlason, or any prayer for relief against it.

Summonses for the amended Petition were served onMed Line Philippines, Angliongto (through his secretary,

Betty Bebero), Atty. Tamondong and Comm. Mison.Summons by publication were served upon the aliendefendants.

Duraproof filed another Motion for Leave to amend thepetition, alleging that its counsel failed to include thefollowing “necessary and/or indispensable parties”: Omega;and M/V Star Ace.

Aside from impleading these additional respondents,Duraproof also alleged in the Second (actually, third)

Amended Petition that the owners of the vessel intended totransfer and alienate their rights and interests over thevessel and its cargo, to its detriment.

The trial court granted the leave to amend its Petition, butonly to exclude Comm. Mison and Sy. Instead, Duraprooffiled the “Second Amended Petition with SupplementalPetition” against Singkong Trading Company; and Omegaand M/V Star Ace.

Declared in default were the following: Singkong TradingCo., Comm. Mison, M/V Star Ace and Omega.

Trial court granted Duraproof’s ex parte Motion to presentevidence against the defaulting respondents. OnlyDuraproof, Atty. Tamondong, Comm. Mison, Omega and

M/V Star Ace appeared in the next pretrial hearing; thus, thetrial court declared the other respondents (includingVlason) in default and allowed Duraproof to presentevidence against them.

Trial court ruled in favor of Duraproof and ordered, amongothers, Vlason to pay Duraproof P3M for damages. A Writ of

Execution was issued. Vlason filed, by special appearance, a Motion for

Reconsideration, on the grounds that it was allegedly notimpleaded as a defendant, served summons or declaredin default; that Duraproof was not authorized to presentevidence against it in default; that the judgment in defaultwas fatally defective because Duraproof had not paid filingfees for the award; and that Duraproof had not prayed forsuch award.

Duraproof opposed the Motion, arguing that it was a merescrap of paper due to its defective notice of hearing.

The trial court ordered the deputy sheriffs to cease and

desist from implementing the Writ of Execution and fromlevying on the personal property of the defendants.

Duraproof filed with the CA a Petition for Certiorari andProhibition to nullify the cease and desist orders of the trialcourt.

CA issued TRO enjoining the respondent Judge fromenforcing and/or implementing the cease and desist Ordersfor reason of grave abuse of discretion and in excess of

jurisdiction until further orders. Vlason received a notice to pay Duraproof P3M to satisfy the

trial court Decision. Not having any knowledge of the CA case to which it was

not impleaded, petitioner filed with the trial court a Motion toDismiss ex abutandi ad cautelam on the grounds that (1) thePetition of Duraproof stated no cause of action against it, (2)the trial court had no jurisdiction over the case, and (3) litis

pendentia barred the suit. Nonetheless, the sheriff levied on petitioner’s properties and

scheduled the auction. Acting on Vlason’s Motion for Reconsideration, the trial court

reversed its Decision and set aside its judgment of default.(Since the MR had been seasonably filed, the default-



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already ruled, however, that the first service ofsummons on petitioner was invalid. Therefore, thetrial court never acquired jurisdiction, and the saidcourt should have required a new service ofsummons for the amended Petitions.

3. NO. Service of a copy of a motion containing a notice of the

time and the place of hearing of that motion is a mandatoryrequirement, and the failure of movants to comply with theserequirements renders their motions fatally defective.However, there are exceptions to the strict application of thisrule.

The Court has consistently held that a motion whichdoes not meet the requirements of Sections 4 and 5of Rule 15 of the Rules of Court is considered aworthless piece of paper, which the clerk of courthas no right to receive and the trial court has noauthority to act upon. These exceptions are asfollows:

“xxx Liberal construction of this rule has beenallowed by this Court in cases (1) where a rigidapplication will result in a manifest failure ormiscarriage of justice; especially if a partysuccessfully shows that the alleged defect in thequestioned final and executory judgment is notapparent on its face or from the recitals containedtherein; (2) where the interest of substantial justicewill be served; (3) where the resolution of the motionis addressed solely to the sound and judiciousdiscretion of the court; and (4) where the injustice tothe adverse party is not commensurate to the

degree of his thoughtlessness in not complying withthe procedure prescribed.”

The present case falls under the first exception.Petitioner was not informed of any cause of action orclaim against it. All of a sudden, the vessels whichpetitioner used in its salvaging business were leviedupon and sold in execution to satisfy a supposed

judgment against it. To allow this to happen simplybecause of a lapse in fulfilling the notice requirement

– which, as already said, was satisfactorily explained

– would be a manifest failure or miscarriage of justice.

4. YES, a summon addressed to a corporation and servedon the secretary of its president binds that corporation.

This rule requires, however, that the secretaryshould be an employee of the corporation

sought to be summoned. Only in this manner canthere be an assurance that the secretary will “bri nghome to the corporation the notice of the filing of theaction” against it.

This is based on the rationale that service must bemade on a representative so integrated with thecorporation sued, that it is safe to assume that saidrepresentative had sufficient responsibility anddiscretion to realize the importance of the legalpapers served and to relay the same to thepresident or other responsible officer of thecorporation being sued.The secretary of the

president satisfies this criterion. Bebero was the secretary of Angliongto, who

was president of both VSI and petitioner, but shewas an employee of VSI, not of petitioner VEC.

5. NO, the inclusion of the names of all the parties in the title ofa complaint is a formal requirement under Section 3, Rule 7.However, the rules of pleadings require courts to pierce theform and go into the substance, and not to be misled by afalse or wrong name given to a pleading.

The averments in the complaint, not the title, arecontrolling. Although the general rule requires theinclusion of the names of all the parties in the title of

a complaint, the non-inclusion of one or some ofthem is not fatal to the cause of action of a plaintiff,provided there is a statement in the body of thepetition indicating that a defendant was made aparty to such action.

6. No, the trial court never declared petitioner in default. The trial court Decision holding petitioner liable for

damages is basically a default judgment. In Section18, judgment by default is allowed under thefollowing condition:

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“SEC. 1. Judgment by default.—If the defendant failsto answer within the time specified in these rules,the court shall, upon motion of the plaintiff and proofof such failure, declare the defendant in default.Thereupon the court shall proceed to receive theplaintiff’s evidence and render judgment granting

him such relief as the complaint and the facts provenmay warrant. xxxx.”

It is a legal impossibility to declare a party-defendantto be in default before it was validly servedsummons.

7. NO, the trial court’s Decision has not become final andexecutory against petitioner.

Section 1 of Rule 39 provides that execution shallissue only upon a judgment that finally disposes ofthe action or proceeding. Such execution shall issueas a matter of right upon the expiration of the periodto appeal it, if no appeal has been duly perfected.

FINAL VERDICT: Appeal is GRANTED, and the assailed Decisionand Resolution of the Court of Appeals are REVERSED and SET

ASIDE insofar as they affect petitioner. The levy and the sale onexecution of petitioner’s properties are declared NULL and VOID.Said properties are ordered RESTORED to petitioner. Nopronouncement as to cost.

7. MERCADER v. DBP Amended and Supplemental Pleadings

CASE:

Petitioners: SPOUSES MERCADER (Cultivators of Lot 1)

Respondents: DBP (Creditor) THE MANREALS (Registered owners of Lot 1)

Parties relevant to CivPro (MERCADERS and DBP)

Civil Case: (Complaint for Specific Performance) was filed byMERCADERS to compel DBP to exclude Lot 1 from foreclosureproceedings (ORIGINAL PLEADING). During the Pre-trial stage DBPoffered the MERCADERS three options by which they couldamicably settle. MERCADERS CHOSE OPTION 2 (LEASE-PURCHASE). MERCADERS thought that the lease-purchase optionwas consummated through their payment of earnest money (three-

month advance payment). Failure of MERCADERS to pay remainingbalance on time, Trial Court (TC) ordered termination of pre-trial andset the case for hearing.

Mercaders filed a SUPPLEMENTAL PLEADING insistingthat the lease-purchase option was already consummated throughtheir payment of the earnest money. Thereafter, DBP filed anopposition to Supplemental Pleading.

TC ruled in favor of MERCADERS and ordered DBP toexclude from the foreclosure proceedings the rights of theMERCADERS.Conflict of the case: CA, however, ruled that TC erred in treating thelease-purchase option as a controversial issue considering that it

was outside the parties’ pleadings. It was not raised in the pleadingsand the issue on lease-purchase option was only part of the pre-trialstages.

SC: CA erred in disregarding as material the lease-purchaseoption on the ground that it was not raised in the pleadings.

The lease-purchase option was raised in the pleadings. Yes,it was not raised in the original pleading but was raisedduring the pre-trial and the filing of a supplemental pleading.

As a supplemental pleading, i t served to aver supervening

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facts which were then not ripe for judicial relief when theoriginal pleading was filed.

DBP is estopped from questioning the TC’s inclusion of thelease-purchase option as a controversial issue.

Parties are expected to disclose at the pre-trial conferenceall issues of law and fact which they intend to raise at the

trial. Assuming arguendo that the MERCADERS failed to file the

supplemental pleading, evidence relative to the lease-purchase option may be legitimately admitted by the trialcourt in conformity with Sec.5, Rule 10 of the Rules of Court.(MAIN ISSUE)

Background:

MANREALS and MERCADERS had a Contract of Leaseregarding the lease of Lot 1.

MANREALS, registered owners of Lot 1, obtained a loanfrom DBP and offered such lot as collateral.

They defaulted in the payment. DBP took steps to foreclose Lot 1. Because of this, SPOUSES MERCADER’S interests were

prejudiced as lessor and cultivators of Lot 1.

FACTS:

Hence, a Civil Case (Complaint for Specific Performance)was filed by MERCADERS to compel DBP to exclude Lot 1from the foreclosure proceedings. (THE ORIGINALPLEADING)

While the case is pending, Lot 1 was sold on public auctionto DBP as the highest bidder.

Pre-trial stage: o There was a Letter wherein DBP offered the

MERCADERS three options by which they couldamicably settle:

Sale Lease-purchase Lease

o MERCADERS CHOSE OPTION 2 (LEASE-PURCHASE).

Pursuant to such Lease-Purchase: Payment was made byMERCADERS to DBP through an earnest money as three-month advance payment.

Failure of MERCADERS to pay balance on time. Trial Court (TC) ordered termination of pre-trial and set the

case for hearing. o MERCADERS contend that they already agreed with

DBP for the lease-purchase option. o DBP contends that it was only a proposal.

Mercaders filed a SUPPLEMENTAL PLEADING insistingthat the lease-purchase option was alreadyconsummated through their payment of the earnestmoney.

DBP filed an Opposition to Supplemental Pleading.

TC ruled in favor of MERCADERS: o Pursuant to the lease-purchase option, DBP is

ordered to exclude from the foreclosure proceedingsthe rights of the MERCADERS.

However, CA ruled: (MAIN ISSUE) o TC erred in treating the lease-purchase option as a

controversial issue considering that it was outsidethe parties’ pleadings. (Take note, the issue onlease-purchase option only arose during the Pre-trial. It was not raised in the original pleading.)

Hence, this Petition for Review. MERCADERS’ Contentions:

o MERCADERS assert that CA contravened Sec. 4,Rule 20 and Sec. 5, Rule 10 of the Rules of Courtfor holding that TC erred in treating the lease-purchase option as a controversial issue.

ISSUES: Whether or not lease-purchase option was material

despite not raised in the pleadings.

HELD & RATIO:YES, the issue on lease-purchase option was material. CA erred indisregarding as material the lease-purchase option on the groundthat it was not raised in the pleadings.

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FIRST POINT: It was patently erroneous for the CA topronounce that the lease-purchase option was notraised in the pleadings.

o TC only took cognizance of the lease-purchaseoption when it became an integral component of thepre-trial proceedings. That is why the lease-

purchase option was included firstly, in the pre-trialorder as one of the issues to be resolved at trial andsecondly, in the supplemental pleadingsubsequently filed by the MERCADERS.

o As a supplemental pleading, it served to aversupervening facts which were then not ripe for

judicial relief when the original pleading was filed.o As such, it was meant to supply deficiencies in aid of

the original pleading, and not to dispense with thelatter.

SECOND POINT: DBP is estopped from questioning theTC’s inclusion of the lease-purchase option as a

controversial issue. o The DBP was aware and knowledgeable of the

supplemental pleading because it filed an oppositionthereto.

o Also note, there were cross-examination, directexamination, and presentation of evidence that tookplace regarding the lease-purchase option.

THIRD POINT: Parties are expected to disclose at thepre-trial conference all issues of law and fact which theyintend to raise at the trial .

o Sec. 4, Rule 20, Rules of CourtRecord of pre-trial results – After the pre-trial the

court shall make an order which recited the actiontaken at the conference, the amendments allowed tothe pleadings, and the agreements made by theparties as to any of the matters considered. Suchorder shall limit the issues for trial to those notdisposed of by admissions or agreements of counseland when entered controls the subsequent course ofthe action, unless modified before trial to preventmanifest injustice.

o Pre-trial is primarily intended to make certain that allissues necessary to the disposition of a case areproperly raised. The purpose is to obviate theelement of surprise, hence, the parties are expectedto disclose at the pre-trial conference all issues oflaw and fact which they intend to raise at the trial,

except such as may involve privileged or impeachingmatter.

o In this particular case, the pre-trial order included asintegral to the complete adjudication of the case theissue of whether the MERCADERS can demandspecific performance from the DBP relative to thelease-purchase option.

FOURTH POINT: Assuming arguendo that theMERCADERS failed to file the supplemental pleading,evidence relative to the lease-purchase option may belegitimately admitted by the trial court in conformity withSec.5, Rule 10 of the Rules of Court: (CIVPRO

RELEVANT)o Sec. 5. Amendment to conform or authorize

presentation of evidence – When issues not raisedby the pleadings are tried by express or impliedconsent of the parties, they shall be treated in allrespects, as if they had been raised in the pleadings.Such amendment of the pleadings as may benecessary to cause them to conform to the evidenceand to raise these issues may be made upon motionof any party at any time, even after judgment; butfailure so to amend does not affect the result of thetrial of these issues.

If evidence is objected to at the trial on theground that it is not within the issues made bythe pleadings, the court may allow the pleadingsto be amended and shall do so freely when thepresentation of the merits of the action will besubserved thereby and the objecting party failsto satisfy the court that the admission of suchevidence would prejudice him in maintaining hisaction or defense upon the merits. The court

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may grant a continuance to enable the objectingparty to meet such evidence.

o This provision envisions two scenarios: First, when evidence is introduced on an

issue not alleged in the pleadings and noobjection was interjected.

Second, when evidence is offered again, onan issue not alleged in the pleadings but thistime an objection was interpolated.

o We are concerned with the second scenario.o (Tiamco v. Diaz) When evidence is offered on a

matter not alleged in the pleadings, the court mayadmit it even against the objection of the adverseparty, where the latter fails to satisfy the court thatthe admission of the evidence would prejudice himin maintaining his defense upon the merits, and thecourt may grant him a continuance to enable him tomeet the new situation created by the evidence.

o Of course, the court, before allowing the evidence,as a matter of formality, should allow an amendmentof the pleading. Furthermore, where the failure toorder an amendment does not appear to havecaused surprise or prejudice to the objecting party, itmay be allowed as a harmless error.

o Rule: departures from the procedure may beforgiven where they do not appear to have impairedthe substantial rights of the parties.

o (Bank of America v. American Realty Co.) Failure ofa party to amend a pleading to conform to theevidence adduced during trial does not preclude

adjudication by the court on the basis of suchevidence which may embody new issues not raisedin the pleadings. Although, the pleading may nothave been amended to conform to the evidencesubmitted during trial, judgment may nonetheless berendered, not simply on the basis of the issuesalleged but also on the issues discussed and theassertions of fact proved in the course of the trial.The court may treat the pleading as if it had been

amended to conform to the evidence, although it hadnot been actually amended.

o DBP was not and would not be prejudiced by theincorporation of the lease-purchase option asone of the controverted issues and was affordedample opportunity to refute and object to the

evidence germane thereto. CONCLUSION: CA contravened Sec. 4, Rule 20 and Sec. 5,

Rule 10 of the Rules of Court in promulgating the questioneddecision. The issue on lease-purchase is material despitenot raised in the original pleading and was only a part of pre -trial.

FINAL VERDICT: Petition is granted to refer the matter back to saidcourt for a determination of the question of whether the lease-purchase option was already consummated.







RULE 12

1. GREGORIO M. ARUELO v. COURT OF APPEALS, PRESIDINGJUDGE OF RTC OF BULACAN and DANILO F. GATCHALIAN

Bill of Particulars

CASE:Petitioner Aruelo and Respondent Gatchalian were rivals in

the May 1992 elections for the office of the Vice-Mayor in Balagtas,Bulacan. Gatchalian won over the petitioner by a margin of 4 votes,which prompted the latter to file an election protest before theCOMELEC, which was denied. He subsequently filed another protestin the RTC of Bulacan. After a series of filing of different motions,Gatchalian filed a Motion for Bill of Particulars, which was alsodenied by the trial court on 5 August 1992; only next day didGatchalian receive the order. On 11 August 1992, Gatchaliansubmitted his Answer with Counter-Protest and Counterclaim,

alleging that Aruelo was the one who committed the election fraud. Aruelo filed this petition on the ground that, under theCOMELEC Rules of Procedure, respondent only has 5 days fromreceipt of summons within which to file his answer to the petition,and motion to dismiss and motion for bill of particulars are notallowed, hence Gatchalian’s filing of the same did not suspend the 5 -day period.

The Court ruled against the petitioner. The election protesthe filed was before the RTC, whose proceedings are governed bythe Rules of Court. ROC allows for motions to dismiss and bill of

particulars. Also, a party has at least 5 days to file his answer afterreceipt of order denying his motion for a bill of particulars. Gatchalianfiled his Answer 4 days after receiving the order denying his motion.

FACTS: [This case is heavy with dates! I put in bold the importantones.]

Petitioner Aruelo and respondent Gatchalian were rivalcandidates in the May 1992 elections for the office of theVice-Mayor of Balagtas, Bulacan.

Gatchalian won by a margin of four votes, and he wassubsequently proclaimed the winner.

22 May 1992: Aruelo filed with the COMELEC a petitionseeking to annul Gatchalian’s proclamation on the ground of“fraudulent alteration and tampering” of votes in the tallysheets and the election returns.

2 June 1992: Aruelo filed with the RTC Bulacan a petitionprotesting the same election, while informing the court of the

pendency of a case before the COMELEC. 10 June 1992: Gatchalian was served an Amended

Summons from the trial court, giving him 5 days within whichto answer the petition.

15 June 1992: Instead of submitting his answer, Gatchalianfiled a Motion to Dismiss, claiming that the petition was filedout of time; a pending protest case was before theCOMELEC; and Aruelo failed to pay the prescribed filingfees.

Meanwhile, the COMELEC petition was dismissed for non-compliance with Sec. 20 of RA 7166, which requires thesubmission of the evidence and documents in support of the

petition to annul Gatchalian’s proclamation. 10 July 1992: The trial court denied Gatchalian’s Motion to

Dismiss. 23 July 1992: Gatchalian filed before the trial court a Motion

for Bill of Particulars. 5 August 1992: The trial court denied this motion; only

next day did Gatchalian receive the order . 6 August 1992: Gatchalian filed before the CA a petition for

certiorari against the trial court on alleged grave abuse ofdiscretion in denying his Motion to Dismiss.

11 August 1992: Gatchalian submitted before the trialcourt his Answer with Counter-Protest and

Counterclaim, alleging that Aruelo was the one whocommitted the election fraud. The trial court admitted thisanswer, and directed the ballots to be transmitted to theClerk of Court.

14 August 1992: Aruelo filed a Motion to Reconsider As Well As To Set Aside Gatchalian’s Answer with Counter -Protestand Counterclaim.

2 September 1992: Aruelo’s motion was denied.







21 September 1992: Gatchalian filed with the CA anotherpetition for certiorari , again alleging grave abuse ofdiscretion on the trial court in issuing the Order denying hisMotion for Bill of Particulars.

28 September 1992: Aruelo prayed before the CA for theissuance of a TRO or a writ of preliminary injunction to

restrain the trial court from implementing the order regardingthe revision of ballots.

24 November 1992: CA rendered a decision denyingGatchalian’s petition, but declaring that he filed his Answerwith Counter-Protest and Counterclaim was timely filed. Italso ordered the trial court to proceed with its proceedings.

This petition in the SC was filed by Aruelo, claiming that inelection contests:

o the COMELEC Rules of Procedure gives therespondent only 5 days from receipt of summonswithin which to file his answer to the petition, andthat this 5-day period had lapsed when Gatchalian

filed his answer; o filing of motions to dismiss and motions for bill of

particulars is prohibited by Sec. 1, Rule 13, Part III ofthe COMELEC Rules of Procedure, hence the filingof said pleadings did not suspend the running of the5-day period, nor did it give Gatchalian a new periodto answer.

ISSUE: W/N Motion for Bill of Particulars is allowed in an electionprotest filed in the regular court, and if so, whether or not Gatchalianfiled his Answer within the prescribed period

HELD & RATIO:• YES, Motion for Bill of Particulars is allowed in an election

protest filed in the regular court.o Petitioner filed the election protest with the RTC,

whose proceedings are governed by the Rulesof Court. Obviously, Sec. 1, Rule 13, Part III ofthe COMELEC Rules of Procedure, which thepetitioner was invoking, is not applicable toproceedings before the regular courts.

o Also, nowhere in the COMELEC Rules ofProcedure disallow filing of motions to dismissand bill of particulars in election protestspending before the regular courts.

• YES, Gatchalian filed his Answer within the prescribedperiod.

o According to the Rules of Court, a party has atleast 5 days to file his answer after receipt oforder denying his motion for a bill of particulars.

o Gatchalian filed his Answer with Counter-Protestand Counterclaim on 11 August 1992, four daysafter receiving the order denying his motion forbill of particulars.

FINAL VERDICT: Petition is denied.







2. TANTUICO JR. v. REPUBLIC

Bill of Particulars

CASE:

TANTUICO, then Chairman of the Commission on Audit(COA) was included as a defendant in a Civil Case named Republic

of the Philippines v. Benjamin (Kokoy Romualdez) on the theorythat he acted with the principal defendants in misappropriation andtheft of public funds. He then motioned for a BILL OFPARTICULARS but was denied by Sandiganbayan. The presentcase is to annul and set aside Sandiganbayan’s resolution in denyinghis motion for the BILL OF PARTICULARS.

Whether or not Sandiganbayan acted with GAD in denyinghis motion for a bill of particulars:SC GRANTED the petition and ordered Respondents to PREPAREand FILE a Bill of Particulars. If they are unable to do so in 20 days,they should EXCLUDE TANTUICO as a defendant in the civil case.

The allegations in the complaint pertaining to TANTUICO are

deficient in that they merely articulate conclusions of law andpresumptions unsupported by factual premises. Hence, withoutthe particulars prayed for in petitioner's motion for a bill of particulars,it can be said the petitioner can not intelligently prepare hisresponsive pleading and for trial.

The Chairman of the COA does not participate orpersonally audit all disbursements and withdrawals ofgovernment funds, as well as transactions involvinggovernment property. The averments in the particular paragraph ofthe complaint merely assume that petitioner participated in or

personally audited all disbursements and withdrawals of governmentfunds, and all transactions involving government property.

Thus, it has been held that the purpose or object of a bill of particulars is —

2.. . . to amplify or limit a pleading, specify more minutelyand particularly a claim or defense set up and pleaded ingeneral terms, give information, not contained in the

pleading, to the opposite party and the court as to the precise nature, character, scope, and extent of the causeof action or defense relied on by the pleader, and apprisethe opposite party of the case which he has to meet, to theend that the proof at the trial may be limited to the matters

specified, and in order that surprise at, and needless preparation for, the trial may be avoided, and that theopposite party may be aided in framing his answering

pleading and preparing for trial. It has also been statedthat it is the function or purpose of a bill of particulars todefine, clarify, particularize, and limit or circumscribe the

issues in the case, to expedite the trial, and assist thecourt. A general function or purpose of a bill of particularsis to prevent injustice or do justice in the case when thatcannot be accomplished without the aid of such a bill.

FACTS:

Petition for certiorari , mandamus and prohibition with aprayer for the issuance of a writ of preliminary injunctionand/or restraining order

o to annul and set aside Sandiganbayan resolutiondenying his motion for a bill of particulars and hismotion for reconsideration

o compel the respondent PCGG to prepare and file abill of particulars or to exclude TANTUICO if they failto submit the said bill of particulars

o to enjoin Sandiganbayan from further proceedingagainst petitioner until the bill of particulars issubmitted

TANTUICO claimed that Sandiganbayan acted with GADALJand that there is no appeal, nor any plain, speedy andadequate remedy for him in the ordinary course of law otherthan the present petition.

The court then issued a TRO ordering the Sandiganbayan toCEASE and DESIST from further proceeding in the CivilCase entitled "Republic of the Philippines vs. Benjamin(Kokoy) Romualdez, et al ."

ORIGINAL CASE:Republic of the Philippines vs. Benjamin (Kokoy) Romualdez:

3.On 31 July 1987, the Republic of the Philippines, representedby the PCGG, and assisted by the Office of the SolicitorGeneral, filed with the Sandiganbayan Civil Case "Republic ofthe Philippines vs. Benjamin (Kokoy) Romualdez, et al." for







reconveyance, reversion, accounting, restitution anddamages.

4.Principal defendants: 5. Benjamin (Kokoy) Romualdez 6. Ferdinand E. Marcos and7.Imelda R. Marcos.

8.Francisco TANTUICO, Jr. (then Chairman of the Commissionon Audit) was included as a defendant on the theory that heacted with the principal defendants in misappropriation andtheft of public funds, plunder of the nations wealth, extortion,blackmail, bribery, embezzlement and other acts of corruption.

*(PARTICULARS SOUGHT BY PETITIONER ARE IN THE NOTES)

9.The Solicitor General, for and in behalf of respondents (exceptthe respondent Sandiganbayan), opposed the motion andstated that “Evidentiary facts or matters are not essential inthe pleading of the cause of action. The matters which heseeks are evidentiary in nature and, being within his intimate

or personal knowledge, may be denied or admitted by him or ifdeemed necessary, be the subject of other forms ofdiscovery.”

10. Petitioner moved for reconsideration but was denied,HENCE THE PRESENT PETITION.

ISSUES:

1. Whether or not Sandiganbayan acted with GAD in denyinghis motion for a bill of particulars

HELD & RATIO:

1. YES. The allegations in the complaint pertaining to

TANTUICO are deficient in that they merely articulateconclusions of law and presumptions unsupported byfactual premises. Hence, without the particulars prayed forin petitioner's motion for a bill of particulars, it can be saidthe petitioner can not intelligently prepare his responsivepleading and for trial.

11. The rules on pleading speak of two (2) kinds of facts: thefirst, the "ultimate facts", and the second, the "evidentiary

facts." In Remitere vs. Vda. de Yulo, the term "ultimate facts"was defined and explained as follows:

12. “ULTIMATE FACTS" as used in Sec. 3, Rule 3 of the Rulesof Court, means the essential facts constituting the plaintiffscause of action. A fact is essential if it cannot be stricken outwithout leaving the statement of the cause of action

insufficient. . . . (Moran, Rules of Court, Vol. 1, 1963 ed., p.213). Ultimate facts are important and substantial facts whicheither directly form the basis of the primary right and duty, orwhich directly make up the wrongful acts or omissions of thedefendant. The term does not refer to the details of probativematter or particulars of evidence by which these materialelements are to be established. It refers to principal,determinate, constitutive facts, upon the existence of which,the entire cause of action rests.

13. “EVIDENTIARY FACT” -- facts which are necessary fordetermination of the ultimate facts; they are the premises uponwhich conclusions of ultimate facts are based. Womack v .

Industrial Comm., 168 Colo. 364,451 P. 2d 761, 764. Factswhich furnish evidence of existence of some other fact.14. Where the complaint states ultimate facts that constitute the

three (3) essential elements of a cause of action, namely:15. (1) the legal right of the plaintiff,16. (2) the correlative obligation of the defendant, and17. (3) the act or omission of the defendant in violation

of said legal right, the complaint states a cause of action,otherwise, the complaint must succumb to a motion todismiss on that ground of failure to state a cause of action.

However, where the allegations of the complaint arevague, indefinite, or in the form of conclusions, the

proper recourse would be, not a motion to dismiss, buta motion for a bill of particulars. Thus, Section 1, Rule 12of the Rules of Court provides:

o Before responding to a pleading or, if no responsivepleading is permitted by these rules, within ten (10)days after service of the pleading upon him, a partymay move for a more definite statement or for a billof particulars of any matter which is not averred withsufficient definiteness or particularity to enable himproperly to prepare his responsive pleading or to







prepare for trial. Such motion shall point out thedefects complained of and the details desired.

18. Paragraph 9(a) of the complaint alleges that "DefendantFerdinand E. Marcos, together with other Defendants, actingsingly or collectively, and/or in unlawful concert with oneanother, in flagrant breach of public trust and of their fiduciary

obligations as public officers, with gross and scandalous abuseof right and power and in brazen violation of the Constitutionand laws of the Philippines, embarked upon a systematic planto accumulate ill-gotten wealth."

19. In the light of the rules on pleading and case law citedabove, the allegations that defendant Ferdinand E. Marcos,together with the other defendants "embarked upon asystematic plan to accumulate ill-gotten wealth" and that saiddefendants acted "in flagrant breach of public trust and of theirfiduciary obligations as public officers, with gross andscandalous abuse of right and in brazen violation of theConstitution and laws of the Philippines", are conclusions of

law unsupported by factual premises. 20. Nothing is said in the complaint about the petitioner's acts inexecution of the alleged "systematic plan to accumulate ill-gotten wealth", or which are supposed to constitute "flagrantbreach of public trust", "gross and scandalous abuse of rightand power", and "violations of the Constitution and laws of thePhilippines". The complaint does not even allege what dutiesthe petitioner failed to perform, or the particular rights heabused.

21. Likewise, paragraph 15 avers that "defendant FranciscoTantuico, taking undue advantage of his position as Chairmanof the Commission on Audit and with grave failure to perform

his constitutional duties as such Chairman, acting in concertwith Defendants Ferdinand E. Marcos and Imelda R. Marcosfacilitated and made possible the withdrawals, disbursementsand questionable use of government funds as stated in theforegoing paragraphs to the grave and irreparable damageand injury of Plaintiff and the entire Filipino people." In likemanner, the allegation that petitioner "took undue advantage ofhis position as Chairman of the Commission on Audit," that he"failed to perform his constitutional duties as such Chairman,"and acting in concert with Ferdinand E. Marcos and Imelda R.

Marcos, "facilitated and made possible the withdrawals,disbursements, and questionable use of government funds asstated in the foregoing paragraphs, to the grave andirreparable damage and injury of plaintiff and the entire Filipinopeople", are mere conclusions of law . Nowhere in thecomplaint is there any allegation as to how such duty

came about, or what petitioner's duties were, with respectto the alleged withdrawals and disbursements or howpetitioner facilitated the alleged withdrawals,disbursements, or conversion of public funds andproperties, nor an allegation from where the withdrawalsand disbursements came from, except for a generalallegation that they came from the national treasury. Ontop of that, the complaint does not even contain anyfactual allegation which would show that whateverwithdrawals, disbursements, or conversions were made,were indeed subject to audit by the COA.

22. In this connection, it may well be stated that the Commission

on Audit (COA) is an independent, constitutional commission,which has no power or authority to withdraw, disburse, or usefunds and property pertaining to other government offices oragencies. This is done by the agency or office itself, the chiefor head of which is primarily and directly responsible for thefunds and property pertaining to such office or agency.

23. In other words, the Chairman of the COA does notparticipate or personally audit all disbursements andwithdrawals of government funds, as well as transactionsinvolving government property. The averments in theparticular paragraph of the complaint merely assume thatpetitioner participated in or personally audited all

disbursements and withdrawals of government funds, and alltransactions involving government property. Hence, thealleged withdrawals, disbursements and questionable use ofgovernment funds could not have been, as held by respondentSandiganbayan, "within the peculiar and intimate knowledge ofpetitioner as Chairman of the COA."

24. The complaint further avers in paragraph 17 that "(t)hefollowing Defendants acted as dummies, nominees and/oragents by allowing themselves (i) to be instruments inaccumulating ill-gotten wealth through government




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concessions, order and/or policies prejudicial to Plaintiff, or (ii)to be incorporators, directors, or members of corporationsbeneficially held and/or controlled by Defendant Ferdinand E.Marcos, Imelda R. Marcos, Benjamin (Kokoy) T. Romualdezand Juliette Gomez Romualdez in order to conceal andprevent recovery of assets illegally obtained: Francisco

Tantuico . . ." Again, the allegation that petitioner acted asdummy, nominee, or agent by allowing himself "to be used asinstrument in accumulating ill-gotten wealth throughgovernment concessions, orders and/or policies prejudicial toPlaintiff" or "to be (an) incorporator, director, or member ofcorporations beneficially held and/or controlled" by theMarcoses and Romualdezes, is a conclusion of law withoutfactual basis.

25. The complaint does not contain any allegation as to howpetitioner became, or why he is perceived to be, a dummy,nominee or agent. Besides, there is no averment in thecomplaint how petitioner allowed himself to be used as

instrument in the accumulation of ill-gotten wealth, what theconcessions, orders and/or policies prejudicial to plaintiff are,why they are prejudicial, and what petitioner had to do with thegranting, issuance, and or formulation of such concessions,orders, and/or policies.

26. Furthermore, the particulars prayed for, such as, names ofpersons, names of corporations, dates, amounts involved,specification of property for identification purposes, theparticular transactions involving withdrawals anddisbursements, and a statement of other material facts aswould support the conclusions and inferences in the complaint,are not evidentiary in nature. On the contrary, those particulars

are material facts that should be clearly and definitely averredin the complaint in order that the defendant may, in fairness,be informed of the claims made against him to the end that hemay be prepared to meet the issues at the trial.

27. Thus, it has been held that the purpose or object of a billof particulars is —

28. . . . to amplify or limit a pleading, specify moreminutely and particularly a claim or defense set upand pleaded in general terms, give information, notcontained in the pleading, to the opposite party

and the court as to the precise nature, character,scope, and extent of the cause of action ordefense relied on by the pleader, and apprise theopposite party of the case which he has to meet, tothe end that the proof at the trial may be limited tothe matters specified, and in order that surprise at,

and needless preparation for, the trial may beavoided, and that the opposite party may be aidedin framing his answering pleading and preparingfor trial. It has also been stated that it is thefunction or purpose of a bill of particulars todefine, clarify, particularize, and limit orcircumscribe the issues in the case, to expeditethe trial, and assist the court. A general function orpurpose of a bill of particulars is to preventinjustice or do justice in the case when that cannotbe accomplished without the aid of such a bill.

FINAL VERDICT: Petition is GRANTED. Respondents are herebyordered to PREPARE and FILE a Bill of Particulars. If they areunable to do so in 20 days, they should EXCLUDE TANTUICO as adefendant in the civil case.

Notes:

PARTICULARS SOUGHT:Relative to the averments in paragraphs 2, 9(a) and l5 of theSecond Amended Complaint:

i) What are the dates of the resolutions (if on appeal) or the

acts (if otherwise) issued or performed by herein defendantwhich allowed the facilitation of, and made possible the,withdrawals, disbursements and questionable use ofgovernment funds;ii) What ministries or Departments, offices or agencies of thegovernment were involved in these questionable use ofgovernment funds;iii) What are the names of the auditors who had the originalaudit jurisdiction over the said withdrawals, disbursementsand questionable use of government funds;




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iv) How much government funds were involved in thesequestionable-disbursements, individually and in totally?v) Were the disbursements brought to herein defendant foraction on pre-audit, post-audit or otherwise or where theyinitiated and/or allowed release by herein defendant alone,without them undergoing usual governmental audit

procedures, or in violation thereof.?vi) What were herein defendant's other acts or omission orparticipation in the matter of allowing such disbursementsand questionable use of government funds, if any?

Relative to paragraphs 7 and 17 of the Second AmendedComplaint :

i) In what particular contract, dealing, transaction and/orrelationship of any nature of Ferdinand E. Marcos, Imelda R.Marcos, Juliette Gomez Romualdez or Benjamin T.Romualdez did herein defendant act as dummy, nominee or

agent? Please specify the dealings, the dates, thecorporations or entities involved, the government officesinvolved and the private and public documents, if any,showing herein defendant's complicity, since he is not awareof any such instance. More basically, please specify whetherthe defendant is a dummy or nominee or agent and of whichcorporation or transaction? ii) What particular government concession, order and/orpolicy obtained by Ferdinand E. Marcos, or Imelda R.Marcos, or Juliette Gomez Romualdez and/or Benjamin T.Romualdez allowed them either singly or jointly toaccumulate ill-gotten wealth by using herein defendant as

instrument for their accomplishment. Likewise please identifythe nature of the transactions, the dates and the documentshowing complicity on the part of herein defendant; he is notaware of any such instance.iii) Please specify the name or denominate the particulargovernment concession, order and/or policy prejudicial to theinterest of the government which was obtained by either ofthe above-named four defendants through the participationof herein defendant as a dummy, nominee or agent of hereindefendant. Please likewise identify the government office

involved, the dates and other particulars, likewise defendantis not aware of any such instance.iv) Please name and specify the corporation whether stockor non-stock, whether government or private, beneficiallyheld and/or controlled by either of the four abovedefendants, where herein defendant is an incorporator,

director or member and where his inclusion as suchincorporator, director or member of the corporation wasmade in order to conceal and prevent recovery of assetsillegally obtained by the aforementioned four defendants,how many shares are involved and what are their values,how and when have they been acquired.




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3. TSHIATE L. UY and RAMON UY v. THE COURT OF APPEALS,NATIVIDAD CALAUNAN-UY, and THE ESTATE OF MENILO B.

UY, SR., represented by MENILO C. UY, JR., MELVIN C. UY andMERLITO C. UY

Motion to Intervene

CASE: Respondents were supposed to have a partition of MeniloSr.’s estate in a civil case. They had a compromise agreement whichwas what the RTC based its judgment on. Petitioner Tshiate filed anomnibus motion seeking to intervene as she alleges that she was thesurviving legal spouse of Menilo Sr. The RTC allowed theintervention and set aside the judgment based on the compromise.Respondent Natividad contested this but RTC denied her MR. CAreversed, deciding that petitioners may not intervene because theycame too late, citing Sec. 12 of Rule 2. The SC decided that

petitioners may intervene. As the intervenors have legal interest inthe matter in litigation, the SC finds it hard to brush aside. In the

interest of adjudicating the whole controversy, petitioners' inclusion inthe action for partition, given the circumstances, not only is preferable but rightly essential in the proper disposition of the case. Itis a settled rule that without the presence of indispensable parties toa suit or proceeding, a judgment of the court cannot attain realfinality. Private respondents argue that their failure to implead

petitioners in the complaint for partition has been cured by the filingof petitioners' omnibus motion asking leave to intervene andattaching thereto an answer in intervention. Private respondentsoverlook the fact that the motion has been filed subsequent to the

judgment based upon the compromise agreement (among privaterespondents themselves) that did not include, and thereby cannot be

held to bind, petitioners.

FACTS:

This is a petition for review on certiorari assailing thedecision of CA which has reversed the questioned order ofthe RTC Makati.

Private respondent Natividad was the common law wife ofthe late Menilo Sr. for about 36 years. Their children areMelito Jr., Nilda, Melvin and Merlito.

October 31, 1990: Soon after Menilo Sr.’s death, petitionersinitiated before the RTC special proceedings entitled “In theMatter of the Petition for Letters of Administration of theEstate of Menilo B. Uy, Sr."

February 27, 1991: Natividad filed a case for Partition ofProperties Under Co-ownership against the Estate of Menilo

Sr. February 28, 1991: Natividad filed a motion to hold the

special proceedings in abeyance. April 23, 1991: Day of trial; parties submitted a Compromise

Agreement. April 24, 1991: A judgment based on that compromise was

rendered. May 24, 1991: Petitioner Tshiate Uy filed an omnibus

motion, alleging that by virtue of a Hong Kong marriage, shewas the surviving legal spouse of Menilo, Sr. She prayedthat she and her son Ramon Uy be allowed to intervene inthe civil case, submitting at the same time their answer in

intervention. The intervenors contended, among otherthings, that the judgment upon the compromise was a patentnullity.

June 10, 1991: RTC issued an order allowing theintervention and setting aside the “compromise judgment.”

Natividad filed an MR but was denied. A petition for certiorari was filed with CA. It set aside the

RTC decision. Petitioners filed an MR but CA denied. January 2, 1992: The instant petition for review on certiorari

was filed with the SC. This case is an appeal.

ISSUES: 1. Whether or not petitioners may intervene.

HELD & RATIO:1. YES. Petitioners are indispensable parties in the civil case.

The action for partition in the civil case is predicatedon an alleged co-ownership between privaterespondent Natividad and deceased of property






evidently acquired during the period of theircommon-law relationship.

CA set aside the orders of the RTC on two points: o The intervention came too late, citing Sec.

12, Rule 12: Sec. 2. Intervention. — A person may, before or during a trial, be

permitted by the court, in its discretion, tointervene in an action, if he has legal interestin the matter in litigation, or in the success ofeither of the parties, or an interest againstboth, or when he is so situated as to beadversely affected by a distribution or otherdisposition of property in the custody of thecourt or of an officer thereof.

o The court a quo ignored the rule on finalityof judgments.

The trial court itself, in setting aside its previous judgment upon compromise, has expressed "that the

intervenors have legal interest in the matter inlitigation," a statement which we find hard to brushaside. In the interest of adjudicating the wholecontroversy, petitioners' inclusion in the action forpartition, given the circumstances, not only ispreferable but rightly essential in the properdisposition of the case. It is a settled rule thatwithout the presence of indispensable parties to asuit or proceeding, a judgment of the court cannotattain real finality.

o Sec. 7, Rule 3 defines indispensable partiesto be parties in interest without whom no

final determination can be had of anaction… o Even private respondents, in their complaint

in the civil case, have acknowledged thatpetitioners claim some interest in the Estate.

Private respondents argue that their failure toimplead petitioners in the complaint for partition hasbeen cured by the filing of petitioners' omnibusmotion asking leave to intervene and attachingthereto an answer in intervention. Private

respondents overlook the fact that the motion hasbeen filed subsequent to the judgment based uponthe compromise agreement (among privaterespondents themselves) that did not include, andthereby cannot be held to bind, petitioners.

FINAL VERDICT: RTC’s Order is reinstated.

Notes:

1. The old Rules of Court was probably used here as this wasdecided in 1994 and Sec. 2 of Rule 12 now reads: Action by thecourt. — Upon the filing of the motion, the clerk of court mustimmediately bring it to the attention of the court which may eitherdeny or grant it outright, or allow the parties the opportunity to beheard. (n)

2. I am not sure how this is related to Bill of Particulars. The caseassigned by Atty. Salvador is actually misleading because the G.R.No. and the SCRA refer to different cases with Uy and CA as partiesalso. I chose the case referred to by the SCRA source because thisis the only case that cited Rule 12.

This is the other case:http://www.lawphil.net/judjuris/juri1980/may1980/gr_49059_1980.html

3. Provisions to be applied to the co-ownership and partition:

Art. 147. When a man and a woman who are capacitated to marryeach other, live exclusively with each other as husband and wifewithout the benefit of marriage or under a void marriage, their wagesand salaries shall be owned by them in equal shares and theproperty acquired by both of them through their work or industry shallbe governed by the rules on co-ownership.

In the absence of proof to the contrary, properties acquiredwhile they lived together shall be presumed to have been obtainedby their joint efforts, work or industry, and shall be owned by them inequal shares. For purposes of this Article, a party who did not


http://www.lawphil.net/judjuris/juri1980/may1980/gr_49059_1980.html








participate in the acquisition by the other party of any property shallbe deemed to have contributed jointly in the acquisition thereof if theformer's efforts consisted in the care and maintenance of the familyand of the household.

Neither party can encumber or dispose by acts inter vivos ofhis or her share in the property acquired during cohabitation and

owned in common, without the consent of the other, until after thetermination of their cohabitation.When only one of the parties to a void marriage is in good

faith, the share of the party in bad faith in the co-ownership shall beforfeited in favor of their common children. In case of default of orwaiver by any or all of the common children or their descendants,each vacant share shall belong to the respective survivingdescendants. In the absence of descendants, such share shallbelong to the innocent party. In all cases, the forfeiture shall takeplace upon termination of the cohabitation.

Art. 148. In cases of cohabitation not falling under the preceding

Article, only the properties acquired by both of the parties throughtheir actual joint contribution of money, property, or industry shall beowned by them in common in proportion to their respectivecontributions. In the absence of proof to the contrary, theircontributions and corresponding shares are presumed to be equal.The same rule and presumption shall apply to joint deposits ofmoney and evidences of credit.

If one of the parties is validly married to another, his or hershare in the co-ownership shall accrue to the absolute community orconjugal partnership existing in such valid marriage. If the party whoacted in bad faith is not validly married to another, his or her shareshall be forfeited in the manner provided in the last paragraph of thepreceding Article.

The foregoing rules on forfeiture shall likewise apply even ifboth parties are in bad faith.

CivPro Digests Rule 7-12

Documents

Transcript of CivPro Digests Rule 7-12