(REVISED) Pleadings

8/10/2019 (REVISED) Pleadings

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A. Pleadings

1. Manner of making allegations in pleadings

Rule 6

Section 1. Pleadings defined.

Pleadings are the written statements of the respective claims and

defenses of the parties submitted to the court for appropriate

judgment.

Sec. 2. Pleadings allowed.

The claims of a party are asserted in a complaint, counterclaim, cross-

claim, third (fourth, etc.) party complaint, or complaint-in-intervention.

The defenses of a party are alleged in the answer to the pleading

asserting a claim against him. An answer may be responded to by a

reply.

Sec. 12. Bringing new parties.

When the presence of parties other than those to the original action is

required for the granting of complete relief in the determination of a

counterclaim or cross-claim, the court shall order them to be brought

in as defendants, if jurisdiction over them can be obtained.

Rule 7, Sec. 5. Certification against forum shopping.

The plaintiff or principal party shall certify under oath in the complaint

or other initiatory pleading asserting a claim for relief, or in a sworn

certification annexed thereto and simultaneously filed therewith: (a)

that he has not theretofore commenced any action or filed any claim

involving the same issues in any court, tribunal or quasi-judicial

agency and, to the best of his knowledge, no such other action or

claim is pending therein; (b) if there is such other pending action or

claim, a complete statement of the present status thereof; and (c) if he

should thereafter learn that the same or similar action or claim has

been filed or is pending, he shall report that fact within five (5) days

therefrom to the court wherein his aforesaid complaint or initiatory

pleading has been filed.

Failure to comply with the foregoing requirements shall not be curable

by mere amendment of the complaint or other initiatory pleading but

shall be cause for the dismissal of the case without prejudice, unless

otherwise provided, upon motion and after hearing. The submission of

a false certification or non-compliance with any of the undertakings

therein shall constitute indirect contempt of court, without prejudice to

the corresponding administrative and criminal actions. If the acts of

the party or his counsel clearly constitute willful and deliberate forum

shopping, the same shall be ground for summary dismissal withprejudice and shall constitute direct contempt, as well as a cause for

administrative sanctions.

DIGITAL MICROWAVE v. CA (JO)

FACTS: Private respondent Asian High technology filed a complaint

against petitioner Digital for a sum of money and damages before the

RTC Pasig. Petitioner moved for the dismissal of the complaint which

was denied by the TC and subsequently filed a motion forReconsideration which was also denied by the TC. Petitioner then

initiated a special civil action alleging grave abuse of discretion on the

part of the Court in dismissing its petition for failure to comply with the

Revised Circular no 28-91 or the sworn certification rule against forum

shopping which should be signed by the petitioner but instead in this

case it was signed by the counsel of the petitioner. Petition moved for

the reconsideration of the case however it was also denied by the CA.

Aggrieved petitioner is now before the SC asking for the reversal of


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the CA ruling.

Petitioner alleged that since it is a corporation the certification against

forum shopping may be signed by a natural person authorized to do

so. In such case petitioner argues that their counsel of record has that

authority to execute the certification on behalf of the corporation

considering that under the Rules of Court counsels authority to

represent his client is presumed.

ISSUE: W/N the pleading filed by the petitioner has complied with

Revised Circular no. 28-91?

RULING: No. The requirement for a sworn certification against forum

shopping was extended by AO 04-94 to complaints, petitions,

applications or other initiatory pleadings filed in all courts or agencies

other than the SC and CA.

If the court will follow the arguments of the petitioner then therequirement in the Revised Cirtcular would be rendered useless.

The reason for the certification that is required to be accomplished by

petitioner himself is because only the petitioner himself has actual

knowledge of whether or not he has initiated similar actions or

proceedings in different courts.

Court disagrees with the argument of the petitioner that a corporation

cannot possibly hope to comply with the requirement because it is a

juridical entity. If this were so, then it would have been impossible for

a corporation to do anything at all. This is the reason why acorporation has its officers to represent it in its transactions with

others. It could easily have been made by a duly authorized director

or officer for instance.

In this case, petitioner has not adequately explained its failure to have

the certification against forum shopping signed by one of its officer.

Neither has it shown any compelling reason for the court to disregard

the strict compliance with the rules.

PETITION DENIED

CLARK DEVT v. MONDRAGON (TUGS)

FACTS: Petitioner Clark Development Corporation (CDC) is a GOCC

authorized to develop the Clark Special Economic Zone. CDC entered

into a Lease Agreement with respondents Mondragon Leisure and

Resorts Corporation (MLRC), Mondragon International Philippines,

Inc., and Mondragon Securities Corporation (herein collectivelyreferred to as "Mondragon"), covering the area now known as the

Mimosa Leisure Estate. The parties thereafter executed Supplemental

Agreements for additional smaller areas. Mondragon put up Holiday

Inn Hotel, Mimosa Golf and Country Club, the North Vista Hotel,

Mimosa Regency Casino, and other facilities and amenities.

CDC made a written demand on Mondragon to pay rental arrears

amounting to P427 M to be paid within 30 days from receipt of the

demand; otherwise, the Lease Agreement would be terminated.

Mondragon filed before the Angeles City, RTC Branch 58 (Civil Case

No. 9242) an action for specific performance with prayer for injunctive

reliefs pendente lite against CDC (First Mondragon Case). In said

case, Mondragon sought for a judicial writ for the parties dispute on

the rental arrearages to be submitted to arbitration.

RTC granted the TRO and later, a writ of preliminary injunction

restraining CDC from terminating the Lease Agreement and taking

over the Mimosa Leisure Estate. CDC questioned the issuance of the

injunctive reliefs pendente lite before the CA. CA declared the

injunctive reliefs null and void. Mondragon appealed to the SC.

The parties executed a Compromise Agreement, which the SCincorporated and noted in its Resolution.

In the Compromise Agreement, it is stated that in case of

Mondragons failure to comply with its obligations,CDC is empowered

to cancel and terminate the said agreement after 30 days counted

from Mondragons receipt of a demand from petitioner. Mondragon

shall leave the leased premises and return to petitioner the parcels of

land known as Wagner, and all lands and improvements along the

parade grounds, except the lands where the Mimosa Regency Casino


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and Chi Restaurant were situated.

Mondragon failed to pay for the rental arrears and to open the

irrevocable domestic letter of credit. CDC sent s letter to Mondragon

demanding compliance with all its obligations under the Compromise

Agreement. In view of Mondragons failure to comply, CDC sent

another letter informing Mondragon of the cancellation and

termination of the Compromise Agreement and demanding it to

vacate all the leased premises.

CDC filed a Motion for Issuance of a Writ of Execution of Judgment by

Compromise Agreement. Before the RTC could resolve the motion

Mondragon filed a Petition for Declaratory Relief and Specific

Performance before the Angeles City RTC Branch 60 (Civil Case No.

9596). CDC filed a Motion to Dismiss (Second Mondragon Case)

alleging that (1) Mondragon was guilty of forum shopping; (2) the

petition was barred by prior judgments; and (3) the petition stated nocause of action. Mondragon opposed the Motion.

Pending resolution of the motion to dismiss in the Second Mondragon

Case, the RTC Branch 58 in First Mondragon Case granted the

Motions for Execution of its order. Meanwhile, the RTC Branch 60

dismissed the Second Mondragon Case (Civil Case No. 9596)

because of forum shopping. Mondragon filed a MR but was denied.

Mondragon appealed to CA. CA held that the presiding judge of the

Angeles City RTC, Branch 60 abused her discretion in finding

Mondragon guilty of forum shopping. The CA ruled that while there

was an identity of parties in both cases, nevertheless, the nature and

causes of the actions and the reliefs prayed for in Civil Case Nos.

9242 (First Mondragon Case) and 9596 (Second Mondragon Case)

were entirely different.

ISSUE: WON the CA erred when it ruled that there was no forum

shopping and allowed the continuance of civil case no. 9596 when in

fact re judicata had already set in and any matter/case raised.filed

relating thereto is forum shopping.

HELD: The petition is meritorious. Hence, the decision in RTC Branch

60 is dismissed with prejudiced.

FORUM SHOPPING is the institution of two (2) or more actions or

proceedings grounded on the same cause on the supposition that one

or the other court would make a favorable disposition or the act of a

party against whom an adverse judgment has been rendered in one

forum, of seeking another (and possibly favorable) opinion in another

forum other than by appeal or the special civil action of certiorari.

The test to determine whether forum shopping exists is whether the

elements of litis pendencia are present or where a final judgment in

one case will amount to res judicata in the other. Res judicata means

a matter or thing adjudged, judicially acted upon or decided, or settled

by judgment. Its requisites are: (1) the former judgment or order mustbe final; (2) the judgment or order must be one on the merits; (3) it

must have been rendered by a court having jurisdiction over the

subject matter and parties; and (4) between the first and second

actions, there must be identity of parties, subject matter, and causes

of action. where a litigant (or one representing the same interest or

person) sues the same party against whom another action or actions

for the alleged violation of the same right and the enforcement of the

same relief is/are still pending, the defense of litis pendencia in one

case is a bar to the others; and, a final judgment in one would

constitute res judicata and thus would cause the dismissal of the rest.

In either case, forum shopping could be cited by the other party as a

ground to ask for summary dismissal of the two (or more) complaints

or petitions, and for the imposition of the other sanctions, which are

direct contempt of court, criminal prosecution, and disciplinary action

against the erring lawyer. Moreover, the Court held that the filing by a

party of two apparently different actions, but with the same objective,

constituted forum shopping. Ultimately, the decisive test in forum

shopping is the possible vexation caused to the courts and litigants by


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the filing of actions based on the same or related issues in different

fora.

In the case at bar, there is no question that the first requirement of

identity of parties was met. As regards the rights asserted and reliefs

sought, there existed an identity of causes of action and reliefs based

on the same objective standard enunciated in the aforecited cases.

Mondragon had only one objective in filing the two cases, that is, the

perpetuation of its lease. In Civil Case No. 9242, Mondragon tried to

prevent the termination of the Lease Agreement, while in Civil Case

No. 9596, it tried to prevent the termination of the Compromise

Agreement. While they differ in nomenclature and specific provisions,

the subject of the two agreements was the samethe lease over the

Mimosa Leisure Estate. Mondragons cause of action against

petitioner CDC, in essence, was the latters alleged premature

termination of the lease over the Mimosa Leisure Estate. The ultimate

relief sought by Mondragon from the courts, on the other hand, is tobe allowed to continue the lease. Without doubt, Mondragons

objectives in filing the two civil cases were the same, that is, to

continue its lease over the Mimosa Leisure Estate.

Mondragon believes that Civil Case No. 9242 (First Mondragon Case)

covered a subject matter and cause of action distinct from Civil Case

No. 9596 (Second Mondragon Case). The Court disagrees. The

Compromise Agreement between CDC and Mondragon supplanted

the Lease Agreement. By entering into a compromise, the parties

decided to set aside the Lease Agreement in favor of terms and

conditions more acceptable to both. They had also waived any issues

arising from the

Lease Agreement. Thus, in a Resolution the Court incorporated the

said Compromise Agreement. This judgment by compromise already

became final and executory and should be complied with any other

judgment as it stands as the judgment in Civil Case No. 9242. In filing

the second civil case, Mondragons objective was the same as the

first civil actionto perpetuate its lease over the Mimosa Leisure

Estate.

Ultimately, the decisive test in forum shopping is the possible vexation

caused to the courts and litigants by the filing of actions based on the

same or related issues in different fora.

The vexation to the courts in this case is evident. There is a high risk

of conflict between the decisions of the RTC Branches 58 and 60

regarding their respective civil cases. A decision by one branch of

court will constitute res judicata in the other case pending before the

other branch of court. Alternatively, if the RTC Branch 60 exercised its

jurisdiction over the petition for declaratory relief, then it would have to

restrain the execution proceedings in the RTC Branch 58. Thus,

interference with the proceedings in another court would ensue.

KAUNLARAN v. UY (LEA)

DOCTRINE:In case of a corporation, it has long been settled that the

certificate [of non-forum shopping] must be signed for and on its

behalf by a specifically authorized officer or agent who has personal

knowledge of the facts required to be disclosed.

FACTS:Respondent Loreta Uy filed before the RTCof Dagupan City a

complaint for annulment of real estate mortgage and related

documents plus damages against petitioners Kaunlaran Lending

Investors, Inc. and Lelia Chua Sy, along with Wilfredo Chua andMagno Zareno.

Loreta avers that when Jose, Virgilio and Wilfredo agreed to establish

a business of buy and sell of second-hand motor vehicles in which

Virgilio would be the manager, Wilfredo would scout for a financier,

and Jose would provide the security for any loan. Through the efforts

of Wilfredo, Lelia, then a Branch Manager of the Far East Bank and

Trust Co., Inc. who was alleged to be the owner of the controlling


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interest in KLII, agreed to arrange for the grant of a loan as secured

by the parcels of land in QC. Wilfredo thus asked Jose in whose favor

his mother Loreta issued a Special Power of Attorney.

The trial court dismissed the case against Kaunlaran and declared

that the Real Estate Mortgage, Promissory Note and related

documents in question to be valid and legal. However, the Court of

Appeals, reversed the trial court's decision, declaring the real estate

mortgage and promissory note null and void.

Lelia, Wilfredo, and KLII moved for reconsiderationwhich was denied,

prompting KLII and Lelia to file before this Court the present petition.

In her Comment, Loreta moves for the dismissal of the petition due to

defective verification and certificate of non-forum shopping, adding

that the petition raises factual issues.

ISSUE: Whether there was a defect in the verification and certicate ofnon forum shopping?

HELD: Yes. For For failure of KLII to present proof that its president,

Rolando Tan, was authorized to sign the verification and certificate of

non-forum shopping on its behalf, the petition must be denied.

In a long list of jurisprudence, the Court held that:

In case of a corporation, it has long been settled that the certificate [of

non-forum shopping] must be signed for and on its behalf by a

specifically authorized officer or agent who has personal knowledge of

the facts required to be disclosed.

x x x x

Consequently, without the needed proof from the board of directors,

the certificate would be considered defective. Thus, xxx even the

regular officers of a corporation, like the chairman and president, may

not even know the details required in a certificate of non-forum

shopping; they must therefore be authorized by the board of directors

just like any other officer or agent.

However, the merits of the petition justify the relaxation of the rule on

verification and certificate of non-forum shopping, for from a review of

the records Loreta has not proven by preponderance of evidence that

she was deceived into signing the documents required for the release

of the proceeds of the loan.

ATENEO DE NAGA v. MANALO (NADIA)

DOCTRINE: Verification and Certification Against Forum Shopping;

The lone signature of the University President, who is himself also a

party, is sufficient to fulfill the verification requirementsuch school

officer, whose acts as president of the university are in issue, is a real

party-in-interest and has sufficient knowledge to swear to the truth of

the allegations in their petition for certiorari.

As regards the verification requirement, that such requirement is

deemed substantially complied with when, as in that case, two out of

25 real parties-in-interest, who undoubtedly have sufficient knowledge

and belief to swear to the truth of the allegations in the petition, signed

the verification attached to it. Such verification is deemed sufficient

assurance that the matters alleged in the petition have been made in

good faith or are true and correct, not merely speculative.

FACTS: In this petition for review on certiorari under Rule 45 of the

Rules of Court, petitioners urge this Court to reverse the Resolutions

of 23 January 2003 and 03 October 2003 of the Court of Appealswhich, respectively, dismissed, insofar as petitioners are concerned,

the petition for certiorari and entitled Ateneo de Naga University, Fr.

Joel Tabora, S.J., and Mr. Edwin P. Bernal vs. Hon. National Labor

Relations Commission and Jovita S. Manalo on the ground that the

verification and certification against forum shopping was signed only

by Fr. Tabora, and denied the motion to reconsider the former.

The controversy stemmed from the complaint for constructive

dismissal, with prayer for moral and exemplary damages and

attorneys fees, filed by respondent with the Sub-Regional NLRC in


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Naga City against petitioners ADNU and Dean Edwin P. Bernal of

ADNUs College of Commerce, and ADNU President Fr. Joel Tabora,

S.J.

Labor Arbiter Jesus Orlando M. Quiones rendered judgment against

petitioners and Fr. Tabora. The labor arbiter found respondent to have

been constructively dismissed when she was transferred from theAccountancy Department of the College of Commerce to the

Department of Social Sciences of the College of Arts and Sciences of

petitioner ADNU after being charged with alleged mismanagement of

the Ateneo de Naga Multi-Purpose Cooperative.

On appeal the NLRC affirmed in toto the decision of the labor arbiter

and denied the motion for reconsideration filed by petitioners and Fr.

Tabora. petitioners and Fr. Tabora filed with the Court of Appeals, it

dismissed the said petition in a Resolution dated 23 January 2003,

finding the verification and certification against forum shopping

attached to the petition to have been signed only by Fr. Tabora.

Petitioners and Fr. Tabora filed a motion for reconsideration5 of the

foregoing resolution on the ground that Fr. Tabora signed the

verification and certification of non-forum shopping not only for himself

but also for petitioners herein. Petitioners explained that as president

of ADNU, Fr. Tabora was its official representative, and in such

capacity, he was duly authorized to sign for and in its behalf. Likewise,

petitioners argued that Fr. Tabora was duly authorized by petitioner

Bernal to sign for and in his behalf, as evidenced by the Special

Power of Attorney.

respondent filed an Opposition to the Motion for Reconsideration with

Motion to Admit Opposition asserting that with respect to petitioner

ADNU, no secretarys certificate or board resolution authorizing Fr.

Tabora to file the petition for certiorari was attached to the motion for

reconsideration; neither was there an allegation to the effect that Fr.

Tabora was so authorized, neither petitioner Bernal nor Fr. Tabora

was authorized to file the petition for certiorari for the primary

petitioner, ADNU.

The Court of Appeals, unconvinced by petitioners arguments and the

documents they presented, issued a resolution denying the motion for

reconsideration insofar as petitioners are concerned but granting it

relative to Fr. Tabora.

ISSUE: Whether the Court of Appeals correctly dismissed the petition

for certiorari insofar as petitioners are concerned for lack of proper

verification and certification against forum shopping. Specifically, the

problem in this case is not the lack of verification and certification but

the adequacy of one executed by only one of three petitioners in the

Court of Appeals, invoking substantial compliance.

HELD: Yes. That such requirement is deemed substantially compliedwith when, as in that case, two out of 25 real parties-in-interest, who

undoubtedly have sufficient knowledge and belief to swear to the truth

of the allegations in the petition, signed the verification attached to it.

Such verification is deemed sufficient assurance that the matters

alleged in the petition have been made in good faith or are true and

correct, not merely speculative.

Applying the foregoing to the instant petition, this Court finds that, at

the minimum, the lone signature of Fr. Tabora is sufficient to fulfill the

verification requirement. Undoubtedly, Fr. Tabora, whose acts as

president of petitioner ADNU are in issue, is a real party-in-interest.

As ADNUs president and himself a party to the instant case, Fr.

Tabora has sufficient knowledge to swear to the truth of the

allegations in their petition for certiorari filed with the Court of Appeals.

His signature, therefore, is sufficient assurance that the allegations in

their petition have been made in good faith or are true and correct, not

merely speculative.


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In fact, the signature of Fr. Tabora is sufficient to stand for petitioners

ADNU and Bernal. Although belatedly shown, the authority of Fr.

Tabora to sign on behalf of petitioners is apparent from the record.

Thus, attached to petitioners motion for reconsideration was a

Special Power of Attorney16 dated 18 November 2002, and to their

Comment to Opposition and Manifestation with Motion to Expunge

from the Records dated 09 July 2003 were attached the Secretarys

Certificates17 showing that ADNUs Board of Trustees authorized Fr.

Tabora to file the petition for certiorari and sign the verification and

certification against forum shopping and ratified Fr.

Taboras acts in connection with the filing of said petition. While these

documents were not attached to the petition for certiorari filed with the

Court of Appeals and were submitted only after the filing of said

petition, they nonetheless confirm the authority of Fr. Tabora to act on

behalf of petitioners in filing the petition.

Any suspicion on the authenticity and due execution of the special

power of attorney and the two secretarys certificates, which are

notarized documentsand as such, public documentscannot stand

against the presumption of regularity in their favor absent evidence

that is clear, convincing, and more than merely preponderant.18 The

rule of long standing is that a public document executed and attested

through the intervention of a notary public is evidence of the facts in a

clear, unequivocal manner therein expressed.19 In the instant case,

except for respondents bare allegations to cast doubt on these

documents, there was no evidence adduced in support thereof.

Absent such evidence, the presumption must stand and the special

power of attorney and secretarys certificates must be upheld.

Considering the foregoing, this Court finds Fr. Tabora to be duly

authorized to sign on behalf of petitioners the verification attached to

their petition for certiorari, and, for the same reason, the certification

against forum shopping.

It appearing that Fr. Tabora was, in fact, a duly authorized signatory, it

can be said that there was at least substantial compliance with, and

that there was no attempt to ignore, the prescribed procedural

requirements.20 The delay in the presentation of the documents

showing the authority of Fr. Tabora to sign on behalf of petitioners

cannot be allowed to defeat the petition for certiorari filed with the

Court of Appeals. By the time the Court of Appeals resolved to uphold

its dismissal of the petition as to them, they had already submitted

proof of their conferment upon Fr. Tabora of the authority to sign the

verification and certification against forum shopping. Such dismissal

exalts technicality over substantial right, which this Court cannot

countenance.

Moreover, as regards the certification against forum shopping, this

Court has relaxed, under justifiable circumstances, the rule requiring

the submission of such certification considering that although it is

obligatory, it is not jurisdictional.23 This Court has also applied the

rule of substantial compliance under justifiable circumstances withrespect to the contents of the certification.24 If this Court has, in

previous rulings, allowed the belated filing of the certification against

forum shopping for compelling reasons, with more reason should it

sanction the timely submission of such certification albeit the proof of

authority of the signatory was put forward only after.

Rule 8, Sec. 1. In general.

Every pleading shall contain in a methodical and logical form, a plain,

concise and direct statement of the ultimate facts on which the party

pleading relies for his claim or defense, as the case may be, omitting

the statement of mere evidentiary facts.

If a defense relied on is based on law, the pertinent provisions thereof

and their applicability to him shall be clearly and concisely stated.

GERALES v. CA (ROCEL)


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FACTS: A car owned by Leticia Fideldia, then driven by Enrique E.

Pimentel, hit another car, owned by Teresita Gerales then driven by

Cesar Dela Fuente, with Marcela Golding, Maria Vergara and Perlito

Trigero as passengers at San Jose, San Fernando, Pampanga.

Private respondent Enrique E. Pimentel was charged before the

Municipal Trial Court of San Fernando, Pampanga with the crime of

Damage to Property with Multiple Physical Injuries thru Reckless

Imprudence.

During the pendency of the criminal case, private offended parties

(now petitioners) Maria Vergara, Perlito Trigero, Marcela del Rosario

Golding, Cesar Dela Fuente, and Teresita Gerales filed a civil case for

Damages in the total amount of P400,000.00 docketed as Civil Case

No. 5210, in the Regional Trial Court of Bataan against Enrique E.

Pimentel and Leticia Fideldia. This civil case is based on the same

incident for which private respondent, Enrique E. Pimentel was

charged in the Criminal Case.

Ater the filing of Civil Case but before the service of summons upon

the defendants (herein private respondents), the claims of the

offended parties (plaintiffs in Civil Case) were amicably settled and

individually executed and signed a "Release Of Claim," the contents

of which substantially reads as follows:

For the sole consideration of . . ., the receipt whereof is hereby

acknowledged, (I), (We) . . . for myself, my heirs, representatives,

successors and assigns do hereby forever release, discharge E. and

absolve Atty. Enrique Pimentel, Leticia Fideldia & F.E. Zuellig (M), Inc.

of and from all actions, claims and demands whatsoever that now

exist or may hereafter develop and particularly on account of all

known, unknown and unanticipated injuries and damages arising out

of and in consequence of the accident/illness occurring on or about

July 9, 1984 at about 6:00 P.M. along the North Expressway, San

Fernando, Pampanga when I sustained serious physical injuries while

riding as a passenger of a Toyota Corona Sedan with Plate No. CFR-

447 was hit and bumped by a Mit. Lancer Sedan with Plate No. NLL-

979 driven by Atty. Enrique E. Pimentel and owned by Leticia

Fideldia.

The undersigned furthermore agrees that the foregoing sum is

voluntarily accepted as full and final compromise, adjustment andsettlement of all claims with respect to both civil and/or criminal

actions that may have been filed in connection with the above

accident; that the payment of said amount shall never be construed as

an admission of liability by the party/parties hereby released.

Municipal Trial Court accordingly dismissed Criminal Case

Respondent Enrique E. Pimentel wrote a letter addressed to the Clerk

of Court of the Regional Trial Court of Bataan that a Motion to Dismiss

was submitted and thus the affected parties mutually settled the case

before the Municipal Trial Court of Pampanga,

Regional Trial Court of Balanga, Bataan issued an order declaring

respondents Enrique E. Pimentel and Leticia Fideldia in default and

Judgment was rendered in favor of the petitioners, ordering

respondents Enrique E. Pimentel and Leticia T. Fideldia, to pay them

jointly and severally.

Court of Appeals reversed the decision of the trial court and dismissed

the complaint against private respondents

Petitioners claim that the respondent court, in dismissing the civil case

for damages on the sole basis of the "releases of claims," had denied

them procedural due process as they were not afforded the

opportunity to refute, assail, and overcome their/probative value

Private respondents maintain that the trial court committed grave

abuse of discretion in not considering their letter as their responsive

pleading and in consequently declaring them in default.

ISSUE: WON trial court committed grave abuse of discretion in not


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TANTUICO v. REPUBLIC (JO)

FACTS: Republic represented by the PGG and assisted by the Office

of the Solicitor General, filed with the Sandiganbayan Civil Case for

the reconveyance, reversion, accounting, restitution and damages.

The principal defendants are Benjamin Romualdez, Ferdinand Marcosand Imelda Marcos. Petitioner Tantuico Jr. was included as defendant

on the theory that he acted in unlawful concert with the principal

defendants in the misappropriation and theft of public funds and that

he also acted as dummy by allowing himself to be incorporators

beneficially held and/or controlled by the principal defendants.

Petitoner then filed a Motion for Bill of Particulars alleging that he is

sued for acts allegedly committed by him in a complaint couched in

too general terms and shorn of particulars that would inform him of the

factual and legal basis thereof, and that too enable him to understand

and know with certainty the particular acts allegedly committed by him

and which he is now charged with culpability, it is necessary that

plaintiff furnish him the particulars sought therein relative to the

Amended Complaint so that he can intelligently prepare his

responsive pleading and prepare for the trial. Solicitor General

opposed the motion. After the petitioner had filed his reply respondent

Sandiganbayan promulgated resolution denying the petitioners

motion for a bill of particulars on the ground that the particulars sought

by petitioner are evidentiary in nature. Petitioner moved for

reconsideration but this was denied by respondent Sandiganbayan.Hence, petitioner filed the present petition.

Petitioners allegations in the second amended complaint in the Civil

Case that it only state conclusions of fact and law, inferences of facts

from facts not pleaded and mere presumptions, not ultimate facts as

required by the Rules of Court.

Respondent Sandiganbayan contends that the essential elements of

an action for ill gotten wealth are complied with by the petitioner

hence petitioner is not anymore entitled to a bill of particulars.

ISSUE: Whether or not respondent acted with grave abuse of

discretion in issuing the disputed resolution.

RULING: YES. A complaint as a concise statement of the ultimate

facts constituting the plaintiffs cause or causes of action. Like all other

pleadings allowed by the Rules of Court, the complaint shall contain in

a methodical and logical form a plain, concise and direct statement of

the ultimate facts on which the plaintiff relies for his claim, omitting the

statement of mere evidentiary facts. The complaint should inform the

defendant of all the material facts on which the plaintiff relies to

support his demand; it should state the theory of a cause of action

which forms the bases of the plaintiffs claim liability.

The rules on pleading speak of 2 kinds of facts: Ultimate facts andevidentiary facts.

Ultimate facts are the essential facts constituting the plaintiffs cause of

action while evidentiary fact are those which are necessary for

determination of the ultimate facts; they are the premises upon which

conclusions of ultimate facts are based.

Where the complaint states ultimate facts that constitute the 3

essential elements of a cause of action namely: 1) the legal right of

the plaintiff; 2) correlative obligation of the defendant and 3) act oromission of the defendant in violation of said legal right, the complaint

states the cause of action, otherwise, the complaint must succumb to

a motion to dismiss on the ground of failure to state a cause of action.

However, where the allegations of the complaint are vague, indefinite

or in the form of conclusions the proper recourse would be, a motion

for a bill of particulars.

In the complaint this court ruled that they are mere conclusions of law


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unsupported by factual premises because nothing in the complaint

about the petitioner which alleged what the duties the petitioner failed

to perform or the particular rights he abused.

The allegations in the complaint pertaining to the petitioner are,

therefore, deficient in that they merely articulate conclusions of law

and presumptions unsupported by factual premises. Hence without

the particulars prayed for in petitioners motion for bill of particulars, it

can be said the petitioner cannot intelligently prepare his responsive

pleading and for trial.

Rule 8, Sec. 4. Capacity.

Facts showing the capacity of a party to sue or be sued or the

authority of a party to sue or be sued in a representative capacity or

the legal existence of an organized association of persons that is

made a party, must be averred. A party desiring to raise an issue asto the legal existence of any party or the capacity of any party to sue

or be sued in a representative capacity, shall do so by specific denial,

which shall include such supporting particulars as are peculiarly within

the pleader's knowledge.

Rule 8, Sec. 7. Action or defense based on document.

Whenever an action or defense is based upon a written instrument or

document, the substance of such instrument or document shall be set

forth in the pleading, and the original or a copy thereof shall beattached to the pleading as an exhibit, which shall be deemed to be a

part of the pleading, or said copy may with like effect be set forth in

the pleading.

METROBANK v. QUILTS (TUGS)

DOCTRINE: Complaint must allege the ultimate facts upon which the

plaintiff bases his cause of action.

FACTS: Relita P. de los Santos (de los Santos) then Corporate

Secretary issued a Secretarys Certificate which certified that in aspecial meeting of the Board of Directors of Quilts and All, Inc. (Quilts)

its President, Mr. Senen B. Dizon (Dizon) was authorized and

empowered to mortgage in favor of Metrobank, a property belonging

to Quilts. On the basis of this Secretarys Certificate, Metrobank

restructured Dizons existing personal loan in the amount of

P700,000.00 secured by his house and lot at Angeles City and the

property owned by Quilts. Aside from the mortgage lien, the

Secretarys Certificate was likewise annotated on a TCT. More than a

year later, Metrobank received a letter from Atty. Villanueva, Quilts

counsel offering the amount of P200,000.00 for the cancellation of the

mortgage on the property owned by Quilts because, allegedly, Mr. &

Mrs. Senen Dizon had left the Philippines, leaving several creditors.

Metrobank refused the offer since the amount offered did not

approximate the appraised value of the mortgaged property.

Atty. Trinidad, Quilts new counsel wrote Metrobank. Counsel wrote

Metrobank reiterating the mortgage cancellation. In addition, counsel

claimed that the alleged special meeting could not have taken place

for lack of the requisite number of directors present to constitute aquorum since the Chairman and 2 other members of the Board of

Directors were abroad on that date.

Quilts filed a complaint against Metrobank, Dizon and de los Santos

for annulment and cancellation of mortgage. Metrobank moved to

dismiss the complaint based on 1) lack of jurisdiction and 2) failure to

state a cause of action. The RTC granted the motion.


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However upon Quilts motion, the RTC issued an Order reconsidering

and setting aside the dismissal order because the grounds relied upon

by Metrobank did not appear to be indubitable, and deferred the

determination of the motion until the trial.

Metrobank filed an original petition for certiorari, prohibition or

mandamus, contesting the reinstatement of the complaint and in the

process reiterating as grounds lack of jurisdiction on the part of the

trial court and failure of Quilts complaint to state a cause of action.

The CA upheld the jurisdiction of the lower Court only with respect to

Metrobank. It dismissed the case against Dizon and de los Santos,

since the issue of whether or not these two persons had committed

ultra vires acts is an intra-corporate matter which falls within the

original and exclusive jurisdiction of the Securities and Exchange

Commission (SEC). Pending the outcome of the case that would be

filed in the SEC, however, the Court of Appeals directed thesuspension of the proceedings against Metrobank.

The CA also stated that paragraph 10 of Quilts complaint was

sufficient basis for Quilts case against Metrobank.

10. That plaintiff corporation suffered and continue to suffer actual

damages as a result of the illegal acts of defendants for which the

former should be compensated in an amount to be proved during the

trial of the instant cases.

ISSUE: WON Quilts complaint sufficiently states a cause of action

against Metrobank?

HELD: An examination of the complaint shows that the allegations

therein pertain mostly to the alleged ultra vires acts of Dizon and de

los Santos. Paragraph 10 of the complaint, upon which both the trial

court and the CA premised a case against Metrobank, merely

expresses legal conclusions, and is not an averment or allegation of

ultimate facts. In the case of Bacolod-Murcia Milling Co., Inc. vs. First

Farmers Milling Co., Inc., it was held that Although it is averred that

the defendants acts were done in bad faith, the Complaint does not

contain anyaverment of facts showing that the acts were done in the

manner alleged. Such a bare statement neither establishes any right

or cause of action on the part of the plaintiff-appellant. It is a mere

conclusion of law not sustained by declarations of facts, much less

admitted by defendants-appellees. It does not, therefore, aid in

anywise the complaint in setting forth a cause of action.

The SC agreed with Metrobank that the complaint does not contain

allegations that Metrobank had prior knowledge of, or could have

known with the exercise of due diligence, that the recitals in the

Secretarys Certificate were false. The complaint does not even allege

specific overt acts which show that Metrobank acted in conspiracy

with its co-defendants to defraud Quilts.

On the other hand, Metrobank cannot be faulted for relying on the

Secretarys Certificate. It did so in good faith, unaware of any flaw and

on the presumption that the ordinary course of business had been

followed and that the Corporate Secretary had regularly performed

her duties.

MATHAY v. CONSOLIDATED BANK (LEA)

DOCTRINE: A class suit did not lie in an action for recovery of realproperty where separate portions of the same parcel were occupied

and claimed individually by different parties to the exclusion of each

other, such that the different parties had determinable, though

undivided interests, in the property in question.

FACTS: smael Mathay, et.al. were former stockholders of

Consolidated Mines Inc. Petitioners filed a case for a class suit

against CMI containing six causes of action. Petitioners alleged that
http://et.al/http://et.al/http://et.al/


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in violation of the Board resolution, the defendants unlawfully

acquired

stockholdings in the defendant Bank in excess of what they were

lawfully entitled, hence depriving the petitioners of their right to

subscribe at par value, in proportion to their equities established

under their respective "Pre-Incorporation Agreements to Subscribe" to

the capital stock and that the Articles of Incorporation were

fraudulently

amended by the defendants. The complaint was dismissed by the

Trial Court on the ground that the class suit could not be maintained

because of the absence of a showing in the complaint that the

plaintiffs-appellants were sufficiently numerous and representative,

and that the complaint failed to state a cause of action. The CA

affirmed the ruling, hence, the appeal.

ISSUE: Whether the instant action is a class suit?

HELD: The action at bar is not a class suit. The necessary elements

for the maintenance of a class suit are accordingly: (1) that the subject

matter of the controversy is one

of common or general interest to many persons, and (2) that such

persons be so numerous as to make it impracticable to bring them all

to the court. The statute requires that the complaint should allege the

existence of the necessary facts, the existence of a class and the

number of members in the said class so as to enable the court to

determine whether the members of the said class are so numerous as

to make it impractical to bring them all to court. The complaint in theinstant case failed to state the number of said CMI subscribing

stockholders that the trial court

could not infer nor make sure that the parties are indeed so numerous

that they cannot practically appear in court and that the plaintiffs are

representative of the other stockholders. The statute also requires

that the subject-matter of the controversy be of common interest to

numerous persons. In the instant case, the interest that appellants,

plaintiffs and intervenors, and the CMI stockholders had in the subject

matter of this suit was several, not common or general in the sense

required by the statute. Each one of the appellants and the CMI

stockholders had determinable interest; each one had a right, if any,

only to his respective portion of

the stocks. No one of them had any right to, or any interest in, the

stock to which another was entitled.

b). Amended and Supplemental Complaints

Rule 10

Section 1. Amendments in general.

Pleadings may be amended by adding or striking out an allegation or

the name of any party, or by correcting a mistake in the name of a

party or a mistaken or inadequate allegation or description in any

other respect, so that the actual merits of the controversy mayspeedily be determined, without regard to technicalities, and in the

most expeditious and inexpensive manner.

Sec. 2. Amendments as a matter of right.

A party may amend his pleading once as a matter of right at any time

before a responsive pleading is served or, in the case of a reply, at

any time within ten (l0) days after it is served.

Sec. 3. Amendments by leave of court.

Except as provided in the next preceding section, substantial

amendments may be made only upon leave of court. But such leave

may be refused if it appears to the court that the motion was made

with intent to delay. Orders of the court upon the matters provided in

this section shall be made upon motion filed in court, and after notice

to the adverse party, and an opportunity to be heard.


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Sec. 4. Formal amendments.

A defect in the designation of the parties and other clearly clerical or

typographical errors may be summarily corrected by the court at any

stage of the action, at its initiative or on motion, provided no prejudice

is caused thereby to the adverse party.

Sec. 5. Amendment to conform to or authorize presentation of

evidence.

When issues not raised by the pleadings are tried with the express or

implied consent of the parties, they shall be treated in all respects as if

they had been raised in the pleadings. Such amendment of the

pleadings as may be necessary to cause them to conform to the

evidence and to raise these issues may be made upon motion of any

party at any time, even after judgment; but failure to amend does not

affect the result of the trial of these issues. If evidence is objected toat the trial on the ground that it is not within the issues made by the

pleadings, the court may allow the pleadings to be amended and shall

do so with liberality if the presentation of the merits of the action and

the ends of substantial justice will be subserved thereby. The court

may grant a continuance to enable the amendment to be made.

Sec. 6. Supplemental pleadings.

Upon motion of a party the court may, upon reasonable notice and

upon such terms as are just, permit him to serve a supplementalpleading setting forth transactions, occurrences or events which have

happened since the date of the pleading sought to be supplemented.

The adverse party may plead thereto within ten (10) days from notice

of the order admitting the supplemental pleading.

Sec. 7. Filing of amended pleadings.

When any pleading is amended, a new copy of the entire pleading,

incorporating the amendments, which shall be indicated by

appropriate marks, shall be filed.

Sec. 8. Effect of amended pleadings.

An amended pleading supersedes the pleading that it amends.

However, admissions in superseded pleadings may be received in

evidence against the pleader; and claims or defenses alleged therein

not incorporated in the amended pleading shall be deemed waived.

Rule 11, Sec. 3. Answer to amended complaint.

Where the plaintiff files an amended complaint as a matter of right, the

defendant shall answer the same within fifteen (l5) days after being

served with a copy thereof.

Where its filing is not a matter of right, the defendant shall answer theamended complaint within ten (10) days from notice of the order

admitting the same. An answer earlier filed may serve as the answer

to the amended complaint if no new answer is filed.

This Rule shall apply to the answer to an amended counterclaim,

amended cross-claim, amended third (fourth, etc.) party complaint,

and amended complaint-in-intervention.

Rule 11, Sec. 7. Answer to supplemental complaint.

A supplemental complaint may be answered within ten (10) days from

notice of the order admitting the same, unless a different period is

fixed by the court. The answer to the complaint shall serve as the

answer to the supplemental complaint if no new or supplemental

answer is filed.


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JOSEPHINE NG v. SPS. MARCELO (ROCEL)

FACTS: Petitioners filed a complaint for accounting, injunction and

damages with writ of preliminary injunction and temporary restraining

order against respondents Spouses Marcelo and Maria Fe Soco and

Marvin Soco with the RTC of Negros Oriental.Petitioners alleged that they are the owners of Jo's Chicken Barbecue

(Chicken Inato) "secret recipe." The said recipe is used by petitioners'

chain of restaurants in some cities in the Visayas and Mindanao.

That they entered into a partnership agreement with respondents to

operate a restaurant, the Soco's Manokan Nook Restaurant. The

agreement provided that in the event of the dissolution of the

partnership, respondents shall lose the right to use the "secret recipe"

and ownership thereof shall revert back to petitioners.

Not long after, the aforesaid partnership was dissolved on account of

disagreement among the parties. Believing that respondents

continued to operate the same business, petitioners filed the

complaint for accounting with the court a quo. During the hearing on

the petition for the issuance of a writ of preliminary injunction,

petitioners learned that a certain Magno Garcia, respondents'

nephew, is operating the restaurant under the name Manokan sa

Sugbu. Upon the belief that Garcia was merely used as dummy by

respondents in order to evade their contractual obligation, i.e., to

cease using the "secret recipe," petitioners filed with the trial court a

motion to admit amended complaint to implead Garcia as one of thedefendants.

Trial court denied said motion. The amendment cannot be allowed

because, "the amendment now, not only requires or compels the

defendants (respondents herein) to change their defense but also

subjects them to all the acts, knowledge, admission and even the

omissions of Magno Garcia."1

Court of Appeals affirmed the order of the trial court. Amendment

could not be allowed, as the same is substantial and has the effect of

changing the theory of the case. Garcia is not an indispensable party

ISSUE: WON the amended complaint which merely seeks to include

the dummy of the respondents could not be admitted because

petitioners' theory of the case is thereby changed and because said

dummy is not an indispensable party

HELD: YES, Amended complaint may not be admitted

Formal and substantial amendments to a pleading may be made at

anytime before a responsive pleading has been filed. Such

amendment is a matter of right. Thereafter, and during trial,

amendments may only be done with the permission of the court.

Amendments are not proper and should be denied when delay would

arise, or when amendments would result in a change of cause of

action or theory of the case, or would be inconsistent with theallegations in the original complaint.4

In this case, the court a quo denied petitioners' amended complaint

upon finding that it will substantially alter "the cause of action or

defense or theory of the case."5 The trial court found that

respondents' defense will be altered by the amendment because they

will be made liable "not only for their individual acts but also for the

acts of their alleged co-conspirator Garcia."6

The Court agrees with the appellate court that the trial court did not

commit any grave abuse of discretion in denying petitioners' amended

complaint. The admission thereof was clearly not a matter of right on

the part of petitioners as they sought the same only after a responsive

pleading (in this case, an answer) had already been filed by

respondents. The matter was thus within the discretion of the trial

court. And, as consistently held by this Court, "the granting of leave to

file amended pleadings is a matter peculiarly within the sound

discretion of the trial court and such discretion would not normally be

disturbed on appeal except when evident abuse thereof is apparent."7

None has been shown in this case.


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REMINGTON INDUSTRIAL v. CA (JO)

FACTS: Petitioner filed a complaint for sum of money and damages

arising from breach of contract. Impleaded as principal defendant

therein was Industrial Steels, Ltd. (ISL), with Ferro Trading GMBH

(Ferro) and respondent British Steel as alternative defendants. ISLand respondent British Steel separately moved for the dismissal of the

complaint on the ground that it failed to state a cause of action against

them RTC denied the motions to dismiss, as well as the ensuing

motion for reconsideration. On the other hand, respondent British

Steel filed a petition for certiorari and prohibition before the Court of

Appeals. ISL then filed its answer to the complaint. Meanwhile,

petitioner sought to amend its complaint by incorporating therein

additional factual allegations constitutive of its cause of action against

respondent. Pursuant to Section 2, Rule 10 of the Rules of Court,

petitioner maintained that it can amend the complaint as a matter of

right because respondent has not yet filed a responsive pleading

thereto.

ISSUE: Can a complaint still be amended as a matter of right before

an answer has been filed, even if there was a pending proceeding for

its dismissal before the higher court?

RULING: Section 2, Rule 10 of the Revised Rules of Court explicitly

states that a pleading may be amended as a matter of right before aresponsive pleading is served. This only means that prior to the filing

of an answer, the plaintiff has the absolute right to amend the

complaint whether a new cause of action or change in theory is

introduced. Substantial amendment of the complaint is not allowed

without leave of court after an answer has been served, because any

material change in the allegations contained in the complaint could

prejudice the rights of the defendant who has already set up his

defense in the answer. In such an event, the defendant has not

presented any defense that can be altered or affected by the

amendment of the complaint in accordance with Section 2 of Rule 10.

Considerable leeway is thus given to the plaintiff to amend his

complaint once, as a matter of right, prior to the filing of an answer by

the defendant. The right granted to the plaintiff under procedural law

to amend the complaint before an answer has been served is not

precluded by the filing of a motion to dismiss or any other proceeding

contesting its sufficiency. Moreover, amendment of pleadings is

favored and should be liberally allowed in the furtherance of justice in

order to determine every case as far as possible on its merits without

regard to technicalities. The fact that the other defendants below has

filed their answers to the complaint does not bar petitioners right to

amend the complaint as against respondent. Indeed, where some but

not all the defendants have answered, the plaintiff may still amend its

complaint once, as a matter of right, in respect to claims asserted

solely against the non-answering defendant, but not as to claims

asserted against the other defendants.

SIASOCO v. CA (TUGS)

DOCTRINE: Notwithstanding the filing of a responsive pleading by

one defendant, the complaint may still be amended once, as a matter

of right, by the plaintiff in respect to claims against the non-answering

defendant(s).

FACTS: Petitioners were the registered owners of nine parcels of landlocated in Montalban, Rizal. They began to offer the subject properties

for sale. Subsequently, Iglesia ni Cristo (INC) negotiated with the

petitioners, but the parties failed to agree on the terms of the

purchase.

More than a year later, both parties revived their discussions. In a

letter, petitioners made a final offer to the INC. The latters counsel

sent a reply received by Petitioner Mario Siasoco stating that the offer


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was accepted, but that the INC was not amenable to your proposal to

an undervaluation of the total consideration. In their letter, petitioners

claimed that the INC had not really accepted the offer, adding that,

prior to their receipt of the aforementioned reply they had already

contracted with Carissa Homes and Development & Properties, Inc.

for the sale of the said properties due to the absence of any response

to their offer from INC.

Maintaining that a sale had been consummated, INC demanded that

the corresponding deed be executed in its favor. Petitioners refused.

INC filed a civil suit for specific performance and damages against

petitioners and Carissa Homes and Development & Properties, Inc.

Petitioners filed therein a Motion to Dismiss on the ground of improper

venue and lack of capacity to sue.

Carissa Homes filed its answer to the complaint.

Pending resolution of petitioners Motion to Dismiss, INC negotiated

with Carissa Homes which culminated in the purchase of the subject

properties of Carissa Homes by INC.

INC filed an Amended Complaint, dropping Carissa Homes as one of

the defendants and changing the nature of the case to a mere case

for damages.

Petitioners filed a Motion to Strike Out Amended Complaint,contending that the complaint cannot be amended without leave of

court, since a responsive pleading has been filed.

An order denying petitioners Motion to Strike Out Amended

Complaint was rendered by the trial court.

CA ruled that although private respondent could no longer amend its

original Complaint as a matter of right, it was not precluded from doing

so with leave of court. Thus, the CA concluded that the RTC had not

acted with grave abuse of discretion in admitting INCs Amended

Complaint. The CA also held that the Amended Complaint did not

substantially alter private respondents cause of action, since

petitioners were not being asked to answer a legal obligation different

from that stated in the original Complaint.

ISSUE: WON CA gravely erred in holding that the respondent Judgesadmission of INCs Amended Complaint was proper.

HELD: SC sustained the Court of Appeals.

Where some but not all the defendants have answered, plaintiffs may

amend their

Complaint once, as a matter of right, in respect to claims asserted

solely against the non-answering defendants, but not as to claims

asserted against the other defendants.It is clear that plaintiff (hereinprivate respondent) can amend its complaint once, as a matter of

right, before a responsive pleading is filed. Contrary to the petitioners

contention, the fact that Carissa had already filed its Answer did not

bar private respondent from amending its original Complaint once, as

a matter of right, against herein petitioners.

Indeed, where some but not all the defendants have answered,

plaintiffs may amend their Complaint once, as a matter of right, in

respect to claims asserted solely against the non-answering

defendants, but not as to claims asserted against the otherdefendants.

After a responsive pleading has been filed, an amendment may be

rejected when the defense is substantially altered since such

amendment does not only prejudice the rights of the defendant but

also delays the action; Amendments to pleadings are generally

favored and should be liberally allowed in furtherance of justice.The

rationale for the aforementioned rule is in Section 3, Rule 10 of the


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Rules of Court, which provides that after a responsive pleading has

been filed, an amendment may be rejected when the defense is

substantially altered. Such amendment does not only prejudice the

rights of the defendant; it also delays the action. In the first place,

where a party has not yet filed a responsive pleading, there are no

defenses that can be altered. Furthermore, the Court has held that

[a]mendments to pleadings are generally favored and should be

liberally allowed in furtherance of justice in order that every case mayso far as possible be determined on its real facts and in order to

speed the trial of cases or prevent the circuity of action and

unnecessary expense, unless there are circumstances such as

inexcusable delay or the taking of the adverse party by surprise or the

like, which might justify a refusal of permission to amend.

In the present case, petitioners failed to prove that they were

prejudiced by private respondents Amended Complaint. True,

Carissa had already filed its own Answer. Petitioners, however, havenot yet filed any. Moreover, they do not allege that their defense is

similar to that of Carissa. On the contrary, private respondents claims

against the latter and against petitioners are different. Against

petitioners, whose offer to sell the subject parcels of land had

allegedly been accepted by private respondent, the latter is suing for

specific performance and damages for breach of contract. Although

private respondent could no longer amend, as a matter of right, its

Complaint against Carissa, it could do so against petitioners who, at

the time, had not yet filed an answer.

The amendment did not prejudice the petitioners or delay the action.

Au contraire, it simplified the case and tended to expedite its

disposition. The Amended Complaint became simply an action for

damages, since the claims for specific performance and declaration of

nullity of the sale have been deleted.

METROBANK v. PRESIDING JUDGE (LEA)

DOCTRINE: Intervention is a proceeding in a suit or action by which a

third person is permitted by the court to make himself a party, either

joining plaintiff in claiming what is sought by the complaint, or uniting

with defendant in resisting the claims of plaintiff, or demanding

something adversely to both of them; the act or proceeding by which athird person becomes a party in a suit pending between others; the

admission, by leave of court, of a person not an original party to

pending legal proceedings, by which such person becomes a party

thereto for the protection of some right of interest alleged by him to be

affected by such proceedings.

FACTS:Petitioner Metropolitan Bank in whose favor a deed of chattel

mortgage was executed by Good Earth Emporium, Inc. over certain

air conditioning units installed in the GEE building, filed a complaint

for replevin against Uniwide, and the BPI Investment Corporation and

several other banks collectively called BPI-Consortium, for the

recovery of the possession of the air-conditioning units or in the event

they may not be recovered, for the defendants which acquired the

GEE building in an auction sale, (to) be required, jointly and severally,

to pay the plaintiff the unpaid obligations on the units.

Metrobank alleged that the air-conditioning units were installed on a

loan of P4,900,000.00 it extended to Good Earth Emporium &

Supermarket, Inc. in its building located in Sta. Cruz, Manila, after theland and building had been foreclosed and purchased oat public

auction by the defendants, except Uniwide, and in order to secure

repayment of the loan, a deed of chattel mortgage was constituted

over the personal properties listed in the deed which included the

airconditioning units. The loan proceeds were used by GEE to finance

the acquisition of airconditioning equipment from Reycor Air Control

System, Inc. under an Agreement of Sale.


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Page 19of 24

Raycor Air filed a motion for leave to intervene alleging' it has a direct

and immediate interest on the subject matter of the litigation such that

it will either gain or lose by the direct legal operation and effect of the

judgment'. There was no opposition to the motion and the intervention

complaint was admitted by the lower court. Metrobank filed its Answer

To The Intervention Complaint.

RTC allowed the motion to intervene suit despite the agreementbetween Metrobank and Uniwide. Metrobank filed a petition for

certiorari and mandamus with respondent Court of Appeals

contending that the lower court committed a grave abuse of discretion

amounting to lack of jurisdiction in allowing, per the intervention suit to

survive despite the dismissal of the main action and also in admitting

the amended complaint in intervention.

CA affirmed the decision of the RTC, hence, this appeal.

ISSUE: Whether the intervention suit is proper?

HELD: Yes. There no final dismissal of the main case. The

aforementioned order of the lower court has the effect not only of

allowing the intervention suit to proceed but also of vacating its

previous order of dismissal. The reinstatement of the case in order to

try and determine the claims and rights of the intervenor is proper.

The joint motion of therein plaintiff and the original defendants to

dismiss the case, without notice to and consent of the intervenor, has

the effect of putting to rest only the respective claims of the saidoriginal parties inter se but the same cannot in any way affect the

claim of private respondent which was allowed by the court to

intervene without opposition from the original parties. A resume of

pertinent rulings on the matter would be in order.

Intervention is defined as "a proceeding in a suit or action by which a

third person is permitted by the court to make himself a party, either

joining plaintiff in claiming what is sought by the complaint, or uniting

with defendant in resisting the claims of plaintiff, or demanding

something adversely to both of them; the act or proceeding by which a

third person becomes a party in a suit pending between others; the

admission, by leave of court, of a person not an original party to

pending legal proceedings, by which such person becomes a party

thereto for the protection of some right of interest alleged by him to be

affected by such proceedings."

Any person who has or claims an interest in the matter in litigation, in

the success of either of the parties to an action, or against both, may

intervene in such action, and when he has become a party thereto it is

error for the court to dismiss the action, including the intervention suit

on the basis of an agreement between the original parties to the

action. Any settlement made by the plaintiff and the defendant is

necessarily ineffective unless the intervenor is a party to it.

By the very definition of "intervention," the intervenor is a party to theaction as the original parties and to make his right effectual he must

necessarily have the same power as the original parties, subject to

the authority of the court reasonably to control the proceedings in the

case.

O' LACO v. CO CHO CHIT (NADIA)

DOCTRINE: Where the plaintiff is allowed to introduce evidence to

correct perceived defect in the complaint, said complaint is deemedaccordingly amended to conform to the evidence; Case at bar.

Plaintiff may be allowed to amend his complaint to correct the defect if

the amendment does not actually confer jurisdiction on the court in

which the action is filed, i.e., if the cause of action was originally within

that court's jurisdiction. In such case, the amendment is only to cure

the perceived defect in the complaint, thus may be allowed. In the

case before Us, while respondent-spouses did not formally amend

their complaint, they were nonetheless allowed to introduce evidence


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purporting to show that earnest efforts toward a compromise had

been made. xxx. Hence, the complaint was deemed accordingly

amended to conform to the evidence, pursuant to Sec. 5, Rule 10.

Introduction of evidence supplying necessary allegations of a

defective complaint, without objection on the part of the defendant,

ipso facto cures insufficiency of allegations thereof.Indeed, if the

defendant permits evidence to be introduced without objection and

which supplies the necessary allegations of a defective complaint,then the evidence is deemed to have the effect of curing the defects

of the complaint. The insufficiency of the allegations in the complaint

is deemed ipso facto rectified.

FACTS: It involves half-sisters each claiming ownership over a parcel

of land. While petitioner Emilia O'Laco asserts that she merely left the

certificate of title covering the property with private respondent O Lay

Kia for safekeeping, the latter who is the former's older sister insists

that the title was in her possession because she and her husbandbought the property from their conjugal funds.

the Philippine Sugar Estate Development Company, Ltd., sold a

parcel of land, Lot No. 5, Block No. 10, Plan Psu-10038, situated at

Oroquieta St., Sta. Cruz, Manila, with the Deed of Absolute Sale

naming Emilia O'Laco as vendee; thereafter, Transfer Certificate of

Title No. 66456 was issued in her name.

private respondent-spouses Valentin Co Cho Chit and O Lay Kia

learned from the newspapers that Emilia O'Laco sold the same

property to the Roman Catholic Archbishop of Manila for

P230,000.00, with assumption of the real estate mortgage constitutedthereon.4

On 22 June 1960, respondent-spouses Valentin Co Cho Chit and O

Lay Kia sued petitioner-spouses Emilia O'Laco and Hugo Luna to

recover the purchase price of the land before the then Court of First

Instance of Rizal, respondent-spouses asserting that petitioner Emilia

O'Laco knew that they were the real vendees of the Oroquieta

property sold in 1943 by Philippine Sugar Estate Development

Company, Ltd., and that the legal title thereto was merely placed in

her name. They contend that Emilia O'Laco breached the trust when

she sold the land to the Roman Catholic Archbishop of Manila.

Petitioner-spouses deny the existence of any form of trust relation.

They aver that Emilia O'Laco actually bought the property with her

own money; that she left the Deed of Absolute Sale and the

corresponding title with respondent-spouses merely for safekeeping;

that when she asked for the return of the documents evidencing her

ownership, respondent-spouses told her that these were misplaced orlost, then Court of First Instance of Manila granted her petition.

Finding no trust relation between the parties, the trial court dismissed

the complaint together with the counterclaim. Court of Appeals set

aside the decision of the trial court.

ISSUE: Whether the plaintiff may be allowed to amend his complaint

to correct the defect if the amendment does not actually confer

jurisdiction on the court in which the action is filed, i.e., if the cause of

action was originally within that court's jurisdiction.

HELD: "Sec. 5. Amendment to conform to or authorize presentation of

evidence.When issues not raised by the pleadings are tried by

express or implied consent of the parties, they shall be treated in all

respects, as if they had been raised in the pleadings x x x x" (italics

supplied).

Where the plaintiff is allowed to introduce evidence to correct

perceived defect in the complaint, said complaint is deemed

accordingly amended to conform to the evidence; Case at bar.

Plaintiff may be allowed to amend his complaint to correct the defect if

the amendment does not actually confer jurisdiction on the court in

which the action is filed, i.e., if the cause of action was originally within

that court's jurisdiction. In such case, the amendment is only to cure

the perceived defect in the complaint, thus may be allowed. In the

case before Us, while respondent-spouses did not formally amend

their complaint, they were nonetheless allowed to introduce evidence


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purporting to show that earnest efforts toward a compromise had

been made. xxx. Hence, the complaint was deemed accordingly

amended to conform to the evidence, pursuant to Sec. 5, Rule 10.

Introduction of evidence supplying necessary allegations of a

defective complaint, without objection on the part of the defendant,

ipso facto cures insufficiency of allegations thereof.Indeed, if the

defendant permits evidence to be introduced without objection and

which supplies the necessary allegations of a defective complaint,then the evidence is deemed to have the effect of curing the defects

of the complaint. The insufficiency of the allegations in the complaint

is deemed ipso facto rectified.

PHILBANK v. IAC (ROCEL)

PNB v. FLORENDO (JO)

FACTS: Plaintiffs are tenants of 4 parcels of land whose previous

owner Valeroso mortgaged the same to the PNB. In 1971 said parcels

of land were brought by spouses Agripino and Soledad Viloria who

assumed the mortgage with PNB. In 1974 PNB requested defendant

Provincial Sheriff of Negros Oriental to foreclose the mortgage on the

parcel of land after the failure of the owners to pay certain

amortization and the same was sold at public auction to the defendant

bank as the highest bidder. Notwithstanding the fact that the said

lands were already brought under the Land Reform Program of the

government, the PNB caused the titles to said parcels of landtransferred in its name to the prejudice of plaintiffs. Palintiffs Viloria

filed a complaint for declaration of nullity of the foreclosure

proceedings in violation of PD 27 and 946 against the defendants

PNB in the court of agrarian relations. Defendant PNB answered the

complaint with counrterclaim for damages. Plaintiffs filed their reply to

the counterclaim. Defendant PNB then moved for leave of court to file

third party complaint against the registered owners-mortgagors of the

subject parcels of land. Plaintiffs moved for the amendment of their

complaint to implead the heirs of the deceased plaintiff which

respondent Judge admitted in an order. Respondent moved to further

amend their complaint. Notable amendment introduced in the First

Amended Complaint Is the inclusion of another parcel of land as

subject matter. Sadi property belongs to the spouses Agripino and

Soledad Viloria and mortgaged also with PNB. PNB opposed the

admission of the private respondents First Amended Complaint on the

grounds that there was no proper notice of hearing as required by theUniform CAR rules of procedure. Respondent judge granted private

respondents motion thus the First Amended Complaint. PNBs motion

for reconsideration order was denied by respondent judge in an order

hence this petition.

ISSUE: W/N respondent judge exceeded his jurisdiction in admitting

the First Amended Complaint which adds another parcel of land not

within the coverage of the Operation Land Transfer pursuant to PD

27.

RULING: Petition impressed with merit.

Upon the abolition of the Court of Agrarian Relations by BP 129 and

fully implemented the jurisdiction over agrarian disputes is now vested

in the appropriate RTC pursuant to the provisions of Sec 19 (7) of the

said law.

Now the appropriate Branch of the RTC of Negros Oriental that has

jurisdiction over the case. Be that as it may, the same law providesthat whenever a RTC takes cognizance of agrarian case, the special

rules of procedures applicable under the present laws to such cases

shall continue to be applied, unless amended by law or by rules of

court promulgated by the SC. The law which conferred jurisdiction on

the Court of Agrarian Relations, now transferred to the appropriate

Branch of the RTC, concerning agricultural lands, is PD 946.

Jurisdiction in general is either one over the nature of the action, over


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the subject matter, over the person of the defendants or over the

issue framed in the pleadings. Jurisdiction over the subject matter, on

the other hand, is conferred by law and does not depend on the

consent or objection or the acts or omissions of the parties or any one

of them. The law which conferred jurisdiction on the Court of Agrarian

Relations, now transferred to the appropriate Branch of the RTC,

concerning agricultural lands, is PD 946.

Indeed amendment to pleadings are generally favored and should be

liberally construed however, where the court has no jurisdiction over

the subject matter of the case, it is evident that the amendment of the

complaint could not be allowed so as to confer jurisdiction upon the

court over said property.

It being apparent that the Court of Agrarian Relations has no

jurisdiction over the lot aside from the fact that said court has already

been abolished by BP 129 the issue as to its territorial jurisdiction has

become moot and academic.

The order of the respondent judge admitting the First Amended

Complaint including therein the questioned lot which is a residential lot

not falling within the ambit of PD 27 hence, beyond CARs jurisdiction.

The term excess of jurisdiction signifies that the court, board or officer

has jurisdiction over a case but oversteps such jurisdiction while

acting thereon.

SM v. CA (TUGS)

SHOEMART V. CA

DOCTRINE

A supplemental pleading supplies deficiencies in aid of an original

pleading, not to entirely substitute the latter.

Judgment may be rendered validly as regards issues not raised in the

pleadings if the opposing party failed to object to the presentation of

evidence to prove the same

FACTS

Anson Emporium Corporation (Anson) leased from Shoemart, Inc.(Shoemart) a portion of the building known as the Makati Arcade

consisting of 374 square meters of store area at its ground floor and

678 square meters at its second floor, for a period of two (2) years

starting said date at a monthly rental of P18,842.00 with a stipulation

that: "after termination of the lease for any reason whatsoever, if the

Owner shall permit the tenant to remain in possession of the leased

premises, it is expressly understood and agreed that the lease shall

be on a month to month basis in the absence of a written agreement

to the contrary."

Anson remained in possession after the two year period but on an

increased rental of P34,622.00. Four years later Shoemart terminated

the month to month lease and gave notice to Anson to vacate not later

than August 31, 1977. Notwithstanding the notice and demand, Anson

continued to stay on, thus the complaint for ejectment filed with the

then MTC of Makati.

In its answer, Anson raised the defenses that (1) the lease did not

express the true intention and real agreement of the parties, the true

one being that its stay was guaranteed by Shoemart for a maximum

period of twenty-four (24) years and (2) assuming that the lease had

expired, it still cannot be ejected until a longer term is fixed in

accordance with Article 1673 in relation to Article 1687 of the Civil

Code.


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After were on their way, Shoemart asked for and was granted leave to

file supplemental complaint which alleged that the rental of all the

tenants of the premises had been increased effective January 1, 1979

to P45,142.00 which Anson refused to pay.

The supplemental complaint became an issue in a petition for

certiorari in the CFI of Rizal which upheld the admission, then in the

IAC which sustained the CFI and finally in the Supreme Court wherethe matter was laid to rest with the High Court giving the final

imprimatur to the admission.

In its answer to the supplemental complaint, Anson raised the

defenses that Shoemart's claim for increased rentals has been barred

by estoppel, novation, statute of frauds/limitations, condonation,

release and/or laches and in any event, the increase was inequitable,

unconscionable and arbitrary.

The trial court ruled for Anson and dismissed the complaint.

Shoemart filed a MR on the ground that the amount of damages

awarded in the form of reasonable compensation for the use and

occupation of the subject premises is less than what is really due.

Anson likewise filed its motion for reconsideration seeking the

affirmance of the court a quo's appealed decision.

RTC issued an Order denying Anson's MR but Shoemarts motion

was granted and the decision was amended.

On appeal CA issued the assailed judgment which while affirming theejectment Anson from the premises, reduced the amount of damages

awarded as reasonable compensation for the use and occupation of

the premises. Both parties filed their respective motions for

reconsideration.

Anson sought the correction of the clerical error regarding date of the

effectivity of the one (1%) percent interest. Said motion was granted

by CA. Shoemarts motion for reconsideration seeking the

reinstatement of the Regional Trial Court's decision was denied.

Hence, this instant petition.

ISSUE

WON THE CA ERRED AS A MATTER OF LAW IN LIMITING ANSON

TO PAY ONLY THE SUM OF P45,142.00 MONTHLY STARTINGJANUARY 1, 1979 UNTIL IT VACATES THE PREMISES DESPITE

THE FACT THAT THERE WERE FOUR (4) RENTAL INCREASES

EFFECTED ON THE SUBJECT PREMISES DURING THE

UNLAWFUL DETAINER PERIOD AND DURING PENDENCY OF

THE INSTANT CASE WHICH INCREASES WERE PROVEN

DURING THE TRIAL.

HELD

Contrary to the conclusion of CA, petitioner's recovery is not limited bythe amount of P45,142.00 prayed for in the supplemental complaint

as increased rental effective January 1, 1979. This is not a case of a

complaint subsequently amended, the effect of which is to render the

original complaint abandoned or inexistent and let the amendment

take form as the sole substitute upon which the case stands for trial.

On the other hand, a supplemental complaint or pleading supplies

deficiencies in aid of an original pleading, not to entirely substitute the

latter. A perusal of the original complaint shows that it prayed, among

others, that the defendant (private respondent) be ordered to pay

plaintiff (petitioner) the monthly rental of P34,622.00 "and all other

rentals and charges that may be due until such time that defendant

xxx shall have vacated the premises". Petitioner, therefore, did not

foreclose its right to demand increased rentals that may be recovered

expressed in terms of the fair rental value or the reasonable

compensation for the use and occupation of the real property. This is

so because, unlike in an amended complaint, the original complaint

exis

(REVISED) Pleadings

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