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8/12/2019 2nd Exam Case Digest
1/31
RULE 6, SEC. 3
ZAIDA ALBERTO vs. CA, 2000
FACTS:
Spouses Alano retained the legal services of Atty. Zaida Ruby
S. Alberto to represent them before the Securities and
Exchange Commission (SEC) in an action to recover real
properties, money and other assets that may pertain to them
by virtue of their stockholdings in the Natalia Realty, Inc. Both
parties formalized their conformity in a retainer agreement,
the salient feature of which is for the spouses to pay Atty.
Alberto on a contingent basis the following: a) the equivalent
in kind of 10% of whatever real estate may be awarded, and
b) the sum P200,000.00.
In accordance with said Agreement, Atty. Alberto filed on
behalf of the spouses a SEC Case, an action for liquidation,
accounting and damages against Eugenio S. Baltao and five
other persons of Natalia Realty, Inc., and appeared at thehearings thereof.
Subsequently, Atty. Alberto learned that the spouses moved
to dismiss the SEC Case which motion was confirmed in a
manifestation by Baltao and Natalia Realty, Inc. It appeared
that during the pendency of the case, the opposing parties
reached a settlement without consulting Atty. Alberto. Atty.
Alberto only learned of the settlement when she received a
copy of a SEC order giving Baltao and Natalia Realty, Inc. 3
days to comment on the spouses' motion to dismiss on
account of said settlement. In effect, Baltao and NataliaRealty, Inc. joined the spouses in their motion to dismiss on
account of a satisfactory settlement having been reached
between them in said SEC case. Accordingly, the said case
was dismissed.
When confronted, the spouses admitted that a settlement
had indeed been reached and that they expected to receive
35 hectares of land. Atty. Alberto demanded the payment of
the fees stipulated in their retainer agreement, however,
respondent-spouses refused to pay despite repeated
demands.
Atty. Alberto was thus constrained to file a Complaint for
collection of sum of money with damages
against
respondent-spouses.
The RTC declared the attorney's fees awarded in the above-
cited decision constitute a lien on the properties subject of
the case and ordered the Register of Deeds to annotate said
lien on the covering certificates of title and their derivatives.
When the above-cited decision became final and executory,
Atty. Alberto caused the issuance of a writ of execution
However, per Sheriff's Return,only P3,500.00 of persona
properties of respondent-spouses were levied.
Apparently, Natalia Realty, Inc. had sold to the spouses
daughter Yolanda Alano, 23 hectares out of the 32.4 hectares
given to them as settlement of the SEC case. The sale was
executed 6 days before the spouses moved to dismiss the SEC
case. This discovery prompted Atty. Alberto to file acomplaint, and thereafter, a second Amended Complaint to
declare the deed of sale null and void ab initioon the ground
that the transfer of the subject parcels of land to Yolanda
Alano was simulated. Petitioner likewise caused the
annotation of a notice of lis pendens on the transfe
certificates of title.
ISSUE:
WON the complaint of Atty. Alberto has sufficient cause o
action.
HELD:
YES. To determine the sufficiency of a cause of action, only
the facts alleged in the complaint and no other should be
considered; and that the test of sufficiency of the facts
alleged in a petition or complaint to constitute a cause of
action is whether, admitting the facts alleged, the court could
render a valid judgment upon the same in accordance with
the prayer of the petition or complaint.
In determining whether allegations of a complaint are
sufficient to support a cause of action, it must be borne in
mind that the complaint does not have to establish or allege
facts proving the existence of a cause of action at the outset
this will have to be done at the trial on the merits of the case
To sustain a motion to dismiss for lack of cause of action, the
complaint must show that the claim for relief does not exist.
The sufficiency of Atty. Albertos cause of action in the
second Amended Complaint is readily apparent. A right in her
favor was created by virtue of the retainer agreement
executed between her and respondent-spouses. This right
was confirmed and upheld by the RTC when it ruled in her
favor in the Civil Case for collection of sum of money and
damages.
Correspondingly, respondent-spouses had the
obligation to honor and not to violate the provisions of the
retainer agreement it entered into with petitioner.
8/12/2019 2nd Exam Case Digest
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RATIO:
GENERAL RULE:
In resolving a motion to dismiss on the ground of failure to
state a cause of action, only the averments in the complaint
and no other are to be consulted.
EXCEPTIONS:
First: All documents attached to a complaint, the due
execution and genuineness of which are not denied under
oath by the defendant, must be considered as part of the
complaint without need of introducing evidence
thereon.
Second:Other pleadings submitted by the parties, in addition
to the complaint, may be considered in deciding whether the
complaint should be dismissed for lack of cause of action.
In other words, a complaint should not be dismissed for
insufficiency of cause of action unless it appears clearly from
the face of the complaint that the plaintiff is not entitled to
any relief under any state of facts which could be proved
within the facts alleged therein.
In the case at bar, reading of said complaint plus the attached
documents and pleadings show that petitioner is entitled to
relief.
8/12/2019 2nd Exam Case Digest
3/31
RULE 6, SEC. 7
EVANGELINE ALDAY vs. FGU INSURANCE, 2001
FACTS:
FGU Insurance Corporation filed a complaint with the RTC-
Makati alleging that Evangeline K. Alday owed it a sum of
money representing unliquidated cash advances, unremitted
costs of premiums and other charges incurred by petitioner in
the course of her work as an insurance agent for the
corporation. FGU Insurance also prayed for exemplary
damages, attorney's fees, and costs of suit.
Alday filed her answer and by way of counterclaim, asserted
her right for the payment of a sum of money, representing
direct commissions, profit commissions and contingent
bonuses earned from 1 July 1986 to 7 December 1986, and
for accumulated premium reserves amounting to
P500,000.00. In addition, Alday prayed for attorney's fees,
litigation expenses, moral damages and exemplary damagesfor the allegedly unfounded action filed by respondent.
FGU Insurance filed a "Motion to Strike Out Answer With
Compulsory Counterclaim And To Declare Defendant In
Default" because Aldays answer was allegedly filed out of
time. However, the trial court denied the motion and
similarly rejected FGU Insurances motion for
reconsideration.
A few weeks later, on FGU Insurance filed a motion to dismiss
petitioner's counterclaim, contending that the trial court
never acquired jurisdiction over the same because of the
non-payment of docket fees by Alday. In response, Alday
asked the trial court to declare her counterclaim as exempt
from payment of docket fees since it is compulsory and that
respondent be declared in default for having failed to answer
such counterclaim.
ISSUE:
WON the counterclaim of Alday is compulsory in nature.
HELD:
NO. Aldays counterclaim for commissions, bonuses, and
accumulated premium reserves is merely permissive. The
evidence required to prove petitioner's claims differs from
that needed to establish respondent's demands for the
recovery of cash accountabilities from petitioner, such as
cash advances and costs of premiums. The recovery of
respondent's claims is not contingent or dependent upon
establishing petitioner's counterclaim, such that conducting
separate trials will not result in the substantial duplication of
the time and effort of the court and the parties.
However, petitioner's claims for damages, allegedly suffered
as a result of the filing by respondent of its complaint, are
compulsory.
RATIO:
A compulsory counterclaim is one which, being cognizable by
the regular courts of justice, arises out of or is connected with
the transaction or occurrence constituting the subject matte
of the opposing party's claim and does not require for its
adjudication the presence of third parties of whom the court
cannot acquire jurisdiction.
In determining whether a counterclaim is compulsory or
permissive, summarized as follows:
1) Are the issues of fact and lawraised by the claim andcounterclaim largely the same?
2) Would res judicata bar a subsequent suit ondefendant's claim absent the compulsory
counterclaim rule?
3) Will substantially the same evidence support orefute plaintiff's claim as well s defendant's
counterclaim?
4) Is there any logical relation between the claim andthe counterclaim?
Another test is the "compelling test of compulsoriness
which requires "a logical relationship between the claim and
counterclaim, that is, where conducting separate trials of the
respective claims of the parties would entail a substantia
duplication of effort and time by the parties and the court."
8/12/2019 2nd Exam Case Digest
4/31
RULE 6, SEC. 7
FELIPE YULIENCO vs. CA, 1999
FACTS:
A Civil Case was instituted by Advance Capital Corporation
(ACC) against Felipe Yulienco to recover the amount of
P30,631,162.19 plus interests and penalty, which was
apparently extended as a loan to the petitioner, as evidenced
by four promissory notes.
In its complaint, the ACC alleged that Yulienco failed and
refused to pay the amounts reflected in the promissory notes
upon their maturity and despite several demands to pay
made to the petitioner.
Yulienco filed his answer alleging in sum, that the trial court
cannot acquire jurisdiction over ACC's complaint because
there is another case pending between ACC and him (SP Civil
case in RTC-Makati which involves a real action), involving thesame subject matter, and that ACC's complaint should have
been filed as a necessary and compulsory counterclaim in the
said case.
ISSUE:
WON the counterclaim filed by ACC is a compulsory counter-
claim.
HELD:
NO. Each averment by ACC for the collection of a sum ofmoney covered by the Promissory Notes is not a "matter"
that could have been raised as counterclaim in the injunction
suit.
The Special Civil Case filed in the RTC of Makati City is
basically an injunction suit, a petition for prohibition. On the
other hand, the Civil Case in the case at bar is an ordinary
action for collection of sums of money.
The promissory notes in both cases differ from and are not
related to each other.
There is, therefore, a dissimilarity in the subject matter of
both cases arising from separate and distinct transactions and
necessarily requiring different evidence to support the
divergent claims. More importantly, the "one compelling test
of compulsoriness" i.e., the logical relationship between the
claim and counterclaim, does not apply here. To reiterate,
there is no logical relationship between YULIENCO's petition
for injunctive relief and ACC's collection suit, hence separate
trials of the respective claims of the parties will not entail a
substantial duplication of effort and time as the factua
and/or legal issues involved, as already explained, are
dissimilar and distinct.
RATIO:
A counterclaim is defined as any claim for money or other
relief which a defending party may have against an opposing
party. A counterclaim is compulsory if:
a) it arises out of, or is necessarily connected with, thetransaction or occurrence which is the subject matter
of the opposing party's claim;
b) it does not require for its adjudication the presence ofthird parties of whom the court cannot acquire
jurisdiction; and
c) the court has jurisdiction to entertain the claim.In other words, a compulsory counterclaim cannot be made
the subject of a separate action but should be asserted in the
same suit involving the same transaction or occurrence givingrise to it.
The criteria or tests by which the compulsory or permissive
nature of specific counterclaims can be determined are as
follows:
1) Are the issues of fact and law raised by the claim andcounterclaim largely the same?
2) Would res judicata bar a subsequent suit ondefendant's claim absent the compulsory counterclaim
rule?
3) Will substantially the same evidence support or refuteplaintiff's claim as well as defendant's counterclaim?
4) Is there any logical relation between the claim and thecounterclaim?
8/12/2019 2nd Exam Case Digest
5/31
RULE 6, SEC. 11
SAMALA vs. VICTOR, 1989
FACTS:
Plaintiff Emerita C. Jumanan was riding a passenger jeepney
on her way from her residence to her place of work at the
Department (now Ministry) of Public InformationThe said
passenger jeepney, which is owned by defendants Felisa and
Tomas Garcia, was then being driven by defendant Virgilio
Profeta.
While the jeepney was about to make a left turn, a delivery
panel of the Luau restaurant driven by Domingo Medina was
approaching from the opposite direction, followed by the
Saint Raphael Transit passenger bus, owned by third party
defendant Purificacion Samala and being driven by third party
defendant Leonardo Esguerra. The Saint Raphael Transit
passenger bus was running fast and after overtaking a vehicle
the Saint Raphael Transit bumped the back portion of thedelivery panel so violently and strongly causing the delivery
panel to swerve abruptly to the path of the oncoming
passenger jeepney in which plaintiff Emerita C. Jumanan was
on board. So forceful was the impact of the collision between
the delivery panel and the passenger jeepney that several
passengers of the jeepney were injured, including plaintiff
Emerita C. Jumanan.
Jumanan, filed before the CFI of Cavite a complaint for
damages arising from physical injuries suffered by her as a
passenger of the jeepney allegedly owned and operated bythe four-named defendants, spouses Garcia, Jarin and
Madlangbayan, and driven by the last named defendant,
Profeta.
In their separate answers, both Jarin and Madlangbayan
denied liability, claiming they no longer owned the passenger
jeepney at the time of the incident in question, said
ownership having been transferred to the spouses Garcia.
While admitting to be the owners of the passenger jeepney,
the spouses Garcia nonetheless denied liability, alleging that
the vehicular collision complained of was attributable to thefault and negligence of the owner and driver of the Saint
Raphael Transit passenger bus. Consequently, a third-party
complaint was filed by defendant-spouses Garcia and Virgilio
Profeta against Purificacion Samala and Leonardo Esguerra,
owner and driver, respectively, of the Saint Raphael Transit
Bus. The latter defendants, in turn, filed a fourth-party
complaint against the insurer of the Saint Raphael Transit
Bus, Imperial Insurance, Inc., which was declared in default
for failure to appear at the pre-trial conference.
ISSUE:
What is the nature of a third-party complaint?
HELD:
The case at bar is one in which the third party defendants are
brought into the action as directly liable to the plaintiffs upon
the allegation that "the primary and immediate cause as
shown by the police investigation of said vehicular collision
between the 3 vehicles was the recklessness and negligence
and lack of imprudence of the third-party defendant Virgilio
(should be Leonardo) Esguerra y Ledesma then driver of the
passenger bus."
The effects are that "plaintiff and third party are at issue as to
their rights respecting the claim" and "the third party is
bound by the adjudication as between him and plaintiff." It is
not indispensable in the premises that the defendant be first
adjudged liable to plaintiff before the third-party defendant
may be held liable to the plaintiff, as precisely, the theory ofdefendant is that it is the third party defendant, and not he,
who is directly liable to plaintiff.
RATIO:
The rule is that, a person not a party to an action may be
impleaded by the defendant either (a) on an allegation of
liability to the latter; (b) on the ground of direct liability to the
plaintiff-, or, (c) both (a) and (b). The situation in (a) is
covered by the phrase "for contribution, indemnity or
subrogation;" while (b) and (c) are subsumed under the catch
all "or any other relief, in respect of his opponent's claim."
The situation contemplated by appellants would properly
pertain to situation (a) above wherein the third party
defendant is being sued for contribution, indemnity o
subrogation, or simply stated, for a defendant's "remedy
over".
It is immaterial that the third-party plaintiff asserts a cause of
action against the third party defendant on a theory different
from that asserted by the plaintiff against the defendant. It
has likewise been held that "a defendant in a contract action
may join as third-party defendants those liable to him in tort
for the plaintiff s claim against him or directly to the plaintiff.
8/12/2019 2nd Exam Case Digest
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RULE 6, SEC. 12, 14
LAFARGE vs. CCC, 2004
FACTS:
The origins of the present controversy can be traced to the
Letter of Intent (LOI) executed by both parties whereby
Lafarge Cement Philippines, Inc. (Lafarge) -- on behalf of its
affiliates and other qualified entities, including Luzon
Continental Land Corporation (LCLC) -- agreed to purchase
the cement business of Continental Cement Corporation
(CCC). Both parties entered into a Sale and Purchase
Agreement (SPA). At the time of the foregoing transactions,
Lafarge, LCLC were well aware that CCC had a case pending
with the Supreme Court.
In anticipation of the liability that the SC might adjudge
against CCC, the parties, under the SPA, allegedly agreed to
retain from the purchase price a portion of the contract price.
This amount was to be deposited in Citibank for payment toAPT, the petitioner the pending case.
However, Lafarge allegedly refused to apply the sum to the
payment to APT, despite the subsequent finality of the
Decision in that case in favor of the latter and the repeated
instructions of CCC. Fearful that non-payment to APT would
result in the foreclosure, not just of its properties covered by
the SPA with Lafarge but of several other properties as well,
CCC filed before the RTC of Quezon City, a "Complaint with
Application for Preliminary Attachment" against Lafarge. The
Complaint prayed, among others, that Lafarge be directed topay the "APT Retained Amount" referred to in their SPA.
In the meantime, to avoid being in default and without
prejudice to the outcome of their appeal, Lafarge filed their
Answer and Compulsory Counterclaims ad Cautelam before
the trial court.
In their Answer, they denied the allegations in the Complaint.
They prayed -- by way of compulsory counterclaims against
Respondent CCC, its majority stockholder and president Lim,
and its corporate secretary Mariano -- the sums for actual
damages, exemplary damages, each as moral damages, and
as attorney's fees plus costs of suit.
Lafarge alleged that CCC, through Lim and Mariano, had filed
the "baseless" Complaint in the Civil Case and procured the
Writ of Attachment in bad faith.
On behalf of Lim and Mariano who had yet to file any
responsive pleading, CCC moved to dismiss petitioners'
compulsory counterclaims on grounds that essentially
constituted the very issues for resolution in the instant
Petition.
ISSUE:
WON defendants in civil cases may implead in thei
counterclaims persons who were not parties to the origina
complaints.
HELD:
YES. A counterclaim is defined as any claim for money or
other relief which a defending party may have against an
opposing party. However, the general rule that a defendant
cannot by a counterclaim bring into the action any claim
against persons other than the plaintiff admits of an
exceptionunder Section 14, Rule 6 which provides that '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 shal
order them to be brought in as defendants, if jurisdiction over
them can be obtained.'
The prerogative of bringing in new parties to the action at any
stage before judgment is intended to accord complete relief
to all of them in a single action and to avert a duplicity and
even a multiplicity of suits thereby.
The act of Respondent CCC as a solidary debtor -- that of filing
a motion to dismiss the counterclaim on grounds that pertain
only to its individual co-debtors -- is therefore allowed.
However, a perusal of its Motion to Dismiss the
counterclaims shows that Respondent CCC filed it on behalf
of Co-respondents Lim and Mariano; it did not pray that the
counterclaim against it be dismissed. Be that as it may
Respondent CCC cannot be declared in default. Jurisprudence
teaches that if the issues raised in the compulsory
counterclaim are so intertwined with the allegations in the
complaint, such issues are deemed automatically joined
Counterclaims that are only for damages and attorney's fees
and that arise from the filing of the complaint shall be
considered as special defenses and need not be answered.
While Respondent CCC can move to dismiss the
counterclaims against it by raising grounds that pertain to
individual defendants Lim and Mariano, it cannot file the
same Motion on their behalf for the simple reason that it
lacks the requisite authority to do so. A corporation has a
legal personality entirely separate and distinct from that of its
officers and cannot act for and on their behalf, without being
so authorized. Thus, unless expressly adopted by Lim and
8/12/2019 2nd Exam Case Digest
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Mariano, the Motion to Dismiss the compulsory counterclaim
filed by Respondent CCC has no force and effect as to them.
While a compulsory counterclaim may implead persons not
parties to the original complaint, the general rule -- a
defendant in a compulsory counterclaim need not file any
responsive pleading, as it is deemed to have adopted the
allegations in the complaint as its answer -- does not apply.
The filing of a responsive pleading is deemed a voluntary
submission to the jurisdiction of the court; a new party
impleaded by the plaintiff in a compulsory counterclaim
cannot be considered to have automatically and unknowingly
submitted to the jurisdiction of the court. A contrary ruling
would result in mischievous consequences whereby a party
may be indiscriminately impleaded as a defendant in a
compulsory counterclaim; and judgment rendered against it
without its knowledge, much less participation in the
proceedings, in blatant disregard of rudimentary due process
requirements.
The correct procedure in instances such as this is for the trial
court, per Section 12 of Rule 6 of the Rules of Court, to "order
[such impleaded parties] to be brought in as defendants, if
jurisdiction over them can be obtained," by directing that
summons be served on them. In this manner, they can be
properly appraised of and answer the charges against them.
Only upon service of summons can the trial court obtain
jurisdiction over them.
In summary, the following pronouncements are made:
1. The counterclaims against Respondents CCC, Gregory T.
Lim and Anthony A. Mariano are compulsory.
2. The counterclaims may properly implead Respondents
Gregory T. Lim and Anthony A. Mariano, even if both were
not parties in the original Complaint.
3.Respondent CCC or any of the three solidary debtors (CCC,
Lim or Mariano) may include, in a Motion to Dismiss,
defenses available to their co-defendants; nevertheless, the
same Motion cannot be deemed to have been filed on behalf
of the said co-defendants.
4. Summons must be served on Respondents Lim and
Mariano before the trial court can obtain jurisdiction over
them.
8/12/2019 2nd Exam Case Digest
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RULE 7, SEC. 2
PCIC vs. PNCC, 2009
FACTS:
Philippine National Construction Corporation (PNCC)
conducted a public bidding for the supply of labor, materials,
tools, supervision, equipment, and other incidentals
necessary for the fabrication and delivery of 27 tollbooths.
Orlando Kalingo (Kalingo) won in the bidding and was
awarded the contract.
PNCC issuedin favor of KalingoPurchase Order (P.O.) No.
71024L for 25 units of tollbooths and P.O. No. 71025L for 2
units of tollbooths. These issuances were subject to the
condition, among others, that each P.O. shall be covered by a
surety bond and that the surety bond shall continue in full
force until the supplier shall have complied with all the
undertakings and covenants to the full satisfaction of PNCC.
Kalingo, hence, posted surety bonds Surety Bond Nos.
27546 and 27547 issued by the PCIC and whose pertinent
terms and conditions read:
xxx a written extrajudicial demand must first be tendered to
the surety, PCIC, within 15 days from the expiration date;
otherwise PCIC shall not be liable thereunder and the
obligee waives the right to claim or file any court action to
collect on the bond. xxx
PNCC released 2 checks to Kalingo representing the down
payment and Kalingo in turn submitted the 2 PCIC surety
bonds securing the down payments, which bonds were
accepted by PNCC.
Kalingo made partial/initial delivery of 4 units of tollbooths
under P.O. No. 71024L. However, the tollbooths delivered
were incomplete or were not fabricated according to PNCC
specifications. He failed to deliver the other 23 tollbooths up
to the time of filing of the complaint; despite demands, he
failed and refused to comply with his obligation under the
POs.
6 days before the expiration of the surety bonds and after the
expiration of the delivery period provided for under the
award, PNCC filed a writtenextrajudicial claimagainst PCIC
notifying it of Kalingos default and demanding the
repayment of the down payment on P.O. No. 71024L as
secured by PCIC Bond No. 27547. The claim went unheeded
despite repeated demands. For this reason, PNCC filed with
the RTCMandaluyong City a complaint for collection of a sum
of money against Kalingo and PCIC. PNCC's complaint against
PCIC called solely on PCIC Bond No. 27547; itdid not raise or
plead collection under PCIC Bond No. 27546 which secured
the down payment on P.O. No. 71025L.
ISSUE:
WON PNCC is entitled to collect under PCIC Bond NO. 27546
although collection thereunder was not specifically raised or
pleaded in its complaint, because the bond was attached to
the complaint and formed part of the records.
HELD:
NO. Rule 7, Section 2(c), of the Rules of Court, provides that a
pleading shall specify the relief sought, but may add a genera
prayer for such further or other reliefs as may be deemed just
and equitable. Under this rule, a court can grant the relief
warranted by the allegation and the proof even if it is not
specifically sought by the injured party the inclusion of a
general prayer may justify the grant of a remedy different
from or together with the specific remedy sought, if the facts
alleged in the complaint and the evidence introduced sowarrant.
NEVERTHELESS, the SC did not grant PNCC the other relief
of recovering under PCIC Bond No. 27546 because of the
respect due the contractual stipulations of the parties.
A general prayer for other reliefs just and equitable
appearing on a complaint or pleading normally enables the
court to award reliefs supported by the complaint or other
pleadings, by the facts admitted at the trial, and by the
evidence adduced by the parties, even if these reliefs are not
specifically prayed for in the complaint.
While it is true that PCICs liability under PCIC Bond No. 27546
would have been clear under ordinary circumstances
(considering that Kalingo's default under his contract with
PNCC is now beyond dispute), it cannot be denied that the
bond contains a written claim provision, and compliance with
it is essential for the accrual of PCICs liability and PNCCs
right to collect under the bond. This provision is the law
between the parties on the matter of liability and collection
under the bond.
For its failure to file a written claim with PCIC within 15 days
from the bonds expiry date, PNCC clearly waived its right to
collect under PCIC Bond No. 27546. That, wittingly o
unwittingly, PNCC did not collect under one bond in favor of
calling on the other creates no other conclusion than that the
right to collect under the former had been lost
Consequently, PNCCs cause of action with respect to PCIC
Bond No. 27546 cannot juridically exist and no relief
therefore may be validly given.
8/12/2019 2nd Exam Case Digest
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RULE 7, SEC. 4
ROBERN vs. JUDGE JESUS QUITAIN, 1999
FACTS:
Robern Development Corporation (Robern) is the registered
owner of a parcel of land which the National Power
Corporation (NPC) is seeking to expropriate. The property
forms part of a proposed low-cost housing project in
Inawayan, Binugao, Toril, Davao City.
NPC filed a Complaint for Eminent Domain against Robern.
Instead of filing an answer, Robern countered with a Motion
to Dismiss,
alleging: (a) that the Complaint suffered a
jurisdictional defect for not showing that the action bore the
approval of the NPC board of directors; (b) that Nemesio S.
Caete, who signed the verification and certification in the
Complaint, was not the president, the general manager or an
officer specifically authorized under the NPC charter (RA
6395); (c) that the choice of property to be expropriated wasimproper, as it had already been intended for use in a low-
cost housing project, a public purpose within the
contemplation of law; and the choice was also arbitrary, as
there were similar properties available within the area.
Robern argued that Atty. Caete who signed the verification
and certification of non-forum shopping was neither the
president nor the general manager of NPC; and that, under
Section 15-A of RA 6395, only the NPC chief legal counsel,
under the supervision of the Office of the Solicitor General is
authorized to handle legal matters affecting the governmentpower corporation.
On the other hand, NPC argues that Caete, as its regional
legal counsel in Mindanao, is authorized to prepare the
Complaint on its behalf.
ISSUE:
WON the disputed verification and certification of the
Complaint by someone other than the president or the
general manager of NPC was a fatal jurisdictional defect.
HELD:
NO. The disputed verification and certification was sufficient
in form.
Verificationis intended to assure that the allegations therein
have been prepared in good faith or are true and correct, not
mere speculations. Generally, lack of verification is merely a
formal defect that is neither jurisdictional nor fatal. Its
absence does not divest the trial court of
jurisdiction. The trial court may order the correction of the
pleading or act on the unverified pleading, if the attending
circumstances are such that strict compliance with the rule
may be dispensed with in order to serve the ends of justice.
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8/12/2019 2nd Exam Case Digest
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RULE 7, SEC. 5
ARQUIZA vs. CA. 2005
FACTS:
Spouses Godofredo V. Arquiza and Remedios D. Arquiza,
obtained a loan from Equitable PCIBank for P2.5 million. To
secure the payment thereof, they executed a Real Estate
Mortgage over their parcel of land covered by a TCT.
When the spouses defaulted in the payment of their loan,
Equitable PCIBank filed a petition for extrajudicial foreclosure
of the real estate mortgage. A public auction was held and
during which the mortgaged property, together with all the
improvements existing thereon, was sold to the Equitable
PCIBank as the highest bidder. Accordingly, a Certificate of
Salehttp://www.lawphil.net/judjuris/juri2005/jun2005/gr_16
0479_2005.html - fnt4over the property was issued in favor
of the Equitable PCIBank. This was registered with the
Registry of Deeds of Quezon City.
Following the expiry date of the redemption period without
the Sps. Arquiza having exercised their right to redeem the
property, the Equitable PCIBank consolidated its ownership
over the subject property. As a consequence, the Registry of
Deeds issued TCT in the name of the Equitable PCIBank,
cancelling the Sps. Arquizas former title.
The Sps. Arquiza filed a complaint against Equitable PCIBank
and the sheriffs with RTC of Quezon City for the declaration
of the nullity of the promissory note, real estate mortgage
and the foreclosure sale and damages with a plea for
injunctive relief for the suspension redemption period.
Meanwhile, Equitable PCIBank demanded that the Sps.
Arquiza vacate and surrender possession of the subject
property, but the latter refused to do so. This compelled
Equitable PCIBank to file an Ex Parte Petition for Issuance of a
Writ of Possession, also with the Quezon City RTC.
Instead of acting on the petition and receiving the evidence
of the Equitable PCIBank ex parte, the Sps. Arquiza filed their
Answer alleging that (1) the Equitable PCIBank failed to
incorporate a Certificate of Non-Forum Shopping in its
petition; and (2) the petition was abated by the pendency of
their complaint in a Civil Case No. involving the non-payment
of their mortgage obligation, the validity of the foreclosure
sale of the mortgaged property and their failure to redeem
the same. The Sps. Arquiza prayed that the trial court dismiss
the petition outright. They appended to their answer a copy
of their amended and supplemental complaint in the Civil
Case.
ISSUE:
WONa certificate of non-forum shopping was necessary in a
petition for the issuance of a writ of possession which is not
an initiatory pleading.
HELD:
NO. The certification against forum shopping is required only
in a complaint or other initiatory pleading. The ex parte
petition for the issuance of a writ of possession filed by the
Equitable PCIBank is not an initiatory pleading. Although the
Equitable PCIBank denominated its pleading as a petition, it
is, nonetheless, a motion.
What distinguishes a motion from a petition or other
pleading is not its form or the title given by the party
executing it, but rather its purpose. The office of a motion is
not to initiate new litigation, but to bring a material butincidental matter arising in the progress of the case in which
the motion is filed. A motion is not an independent right or
remedy, but is confined to incidental matters in the progress
of a cause. It relates to some question that is collateral to the
main object of the action and is connected with and
dependent upon the principal remedy. An application for a
writ of possession is a mere incident in the registration
proceeding. Hence, although it was denominated as a
"petition," it was in substance merely a motion.
http://www.lawphil.net/judjuris/juri2005/jun2005/gr_160479_2005.html#fnt4http://www.lawphil.net/judjuris/juri2005/jun2005/gr_160479_2005.html#fnt4http://www.lawphil.net/judjuris/juri2005/jun2005/gr_160479_2005.html#fnt4http://www.lawphil.net/judjuris/juri2005/jun2005/gr_160479_2005.html#fnt4http://www.lawphil.net/judjuris/juri2005/jun2005/gr_160479_2005.html#fnt4http://www.lawphil.net/judjuris/juri2005/jun2005/gr_160479_2005.html#fnt48/12/2019 2nd Exam Case Digest
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RULE 7, Sec. 5: DEFECTIVE
LEVI STRAUSS vs. VOGUE TRADERS, 2005
FACTS:
Levi Strauss & Co., the principal based in Delaware, USA,
granted Levi Strauss (Phils.) a non-exclusive license to useLEVIS trademark, design, and name in the manufacturing,
marketing, distribution, and sale of its clothing and other
goods. The licensing agreement was renewed several times,
the recent one being under Certificate of Registration No.
1379-A.
Levi Strauss (Phils.) discovered the existence of some
trademark registrations belonging to Vogue Traders which, in
its view, were confusingly similar to its trademarks. Thus, it
instituted two cases before the BPTTT for the cancellation of
Vogue Traders trademark registrations.
Levi Strauss (Phils.) then applied for the issuance of a search
warrant on the premises of Vogue Traders Clothing Company,
owned by one Tony Lim, with the Regional Trial Court of
Manila. The search warrants were enforced and several
goods belonging to respondent were seized.
Vogue Traders filed a complaint for damages in RTC against
Levi Strauss (Phils.). Vogue Traders sought to recover the
seized assorted sewing materials, equipment, and finished
products or the value thereof, in case the same had been
destroyed or impaired as a result of the seizure.
ISSUE:
WON the certificate of non-forum shopping signed by Atty.
Soriano, counsel for Vogue Traders was defective.
HELD:
YES. The requirement of certification against forum shopping
under the Rules is to be executed by the petitioner, or in the
case of a corporation, its duly authorized director or officer,
but not petitioners counsel whose professional services have
been engaged to handle the subject case. The reason is that it
is the petitioner who has personal knowledge whether there
are cases of similar nature pending with the other courts,
tribunals, or agencies.
Thus, in the present case, the Court of Appeals should have
outrightly dismissed the petition for certiorari filed by the
respondent (as therein petitioner in the appeals court) due to
the defective certification of non-forum shopping. The
certification made by Atty. Soriano, counsel for the
respondent, who is not one of its duly authorized directors or
officers, is defective. Even if Atty. Soriano was the "in-house
counsel," the fact remains that no board resolution, or even a
Secretarys Certificate containing the board resolution, was
submitted to show that he was indeed authorized to file the
said petition in the Court of Appeals.
RATIO:
The certification against forum shopping is required to be
accomplished by petitioner himself because only the
petitioner himself has actual knowledge of whether or not he
has initiated similar actions or proceedings in different courts
or agencies. Even his counsel may be unaware of such fact as
he may only be aware of the action for which he has been
retained. As to corporations, the law requires that the
certification could be made by its duly authorized director or
officer. The Court also stresses that the petitioners non
compliance and utter disregard of the rules cannot berationalized by invoking the policy of liberal construction.
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RULE 7, Sec. 5: DEFECTIVE
TERESA GABRIEL vs. CA, 2007
FACTS:
Teresa Gabriel et. al., are the heirs of the late Atty. Gabriel,
who was designated as the sole executor of the last will andtestament of the deceased Genaro G. Ronquillo (Ronquillo)
whose will was probated in 1978. On the other hand,
Ronquillo et. al., are the heirs of the testator Ronquillo.
The probate court issued an Order fixing the amount of
compensation of Atty. Gabriel as executor. At the time of the
filing of the present petition, there has been no final
liquidation of the Ronquillo estate. Upon the death of Atty.
Gabriel on his uncollected compensation reached
Php648,000.00.
While still acting as executor, Atty. Gabriel, with prior
approval of the probate court, sold three parcels of land. Due
to certain disagreements between Atty. Gabriel and Ronquillo
et. al., a portion of the proceeds was deposited with the
probate court. The said sum included the compensation of
Atty. Gabriel. Allegedly, to prevent the release of the
compensation, Ronquillo et. al., filed a notice with the
probate court that there was a pending tax investigation with
the BIR concerning unpaid taxes of the estate from the sale of
the land.
Teresa Gabriel et. al., filed a Petition for Certiorari,
Prohibition and Mandamus with Preliminary Injunction and
Prayer for Temporary Restraining Order in the CA. They
questioned the twin orders of the probate court, particularly
(1) the courts refusal to order the release of the amount
representing the compensation of Atty. Gabriel as the
executor of the last will and testament; and (2) the courts
insistence to hear respondents allegation of non-payment of
taxes resulting from the sale of the properties for which
reason the compensation of Atty. Gabriel should not be
released until resolution by the probate court on this matter.
In the meantime, the parties came to an agreement to divide
the amount deposited in court.
Subsequently, Teresa Gabriel et. al., questioned the
Resolution rendered by the CA, the pertinent portion of
which reads: xxx The verification and certification of non-
forum shopping was signed by only one (Teresa S. Gabriel) of
the seven petitioners, and there is no showing or proof that
she was duly authorized to sign on behalf of her co-
petitioners.
ISSUE: WON there was substantial compliance with the
certification of non-forum shopping before the CA.
HELD:NO. In the petition filed by Teresa Gabriel et. al., in the
CA, the verification and the certification against forum
shopping were signed by Teresa Gabriel alone, albeit there
were seven petitioners therein. In their Memorandum, they
proffer the view that the signature of Teresa, being the
mother of the rest of the petitioners, should be considered assubstantial compliance, for she was willing to take the risk of
contempt and perjury should she be found lying. According to
them what is fatal is the utter lack of signatory in the
certification.
Regarding the certification against forum shopping, the Rules
of Court provides that the plaintiff or the principal party shal
certify under oath in the complaint or other initiatory
pleading the requirements as mandated under Section 5, Rule
7. The said requirements are mandatory, and therefore, strict
compliance thereof is necessary for the proper administrationof justice.
The SC has been consistent in stringently enforcing the
requirement of verification and certification of non-forum
shopping. When there is more than one petitioner, a petition
signed solely by one of them is defective, unless he was
authorized by his co-parties to represent them and to sign the
certification. The attestation contained in the certification of
non-forum shopping requires personal knowledge by the
party who executed the same.
In the instant case, it was not shown that Teresa was
authorized by the other petitioners to file the petition. In the
certification against forum shopping, the principal party is
required to certify under oath as to the matters contained
therein and failure to comply with the requirements shall not
be curable by amendment but shall be a ground for the
dismissal of the case. Personal knowledge of the party
executing the same is important and a similar requirement
applies to the verification. Thus, the verification and
certification signed only by Teresa are utterly defective, and it
is within the prerogative of the court to dismiss the petition.
RATIO:
Substantial compliance will not suffice in a matter involving
strict observance. The attestation contained in the
certification of non-forum shopping requires persona
knowledge by the party who executed the same. To deserve
the Court's consideration, petitioners must show reasonable
cause for failure to personally sign the certification. They
must convince the Court that the outright dismissal of the
petition would defeat the administration of justice.
8/12/2019 2nd Exam Case Digest
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RULE 7, Sec. 5: DEFECTIVE
ATTY. BAUTISTA vs. JUDGE CAUSAPIN, 2011
FACTS:
The heirs of Baudelio T. Bautista, represented by Delia R.
Bautista; the heirs of Aurora T. Bautista, represented by
Reynaldo B. Mesina; Elmer B. Polangco; Nancy B. Polangco;
and Gabriel Bautista (plaintiffs), through counsel, Atty.
Bautista, filed a Complaint for Partition before the RTC
against Jose Bautista and Domingo T. Bautista (defendants).
Defendants had until January 26, 2006 to file their answer,
but on January 24, 2006, they filed a motion for an extension
of 15 days within which to file the said pleading. Judge
Causapin granted defendants' motion in an Order.
In the Resolution of Motion to Hold Defendants in Default
Judge Causapin dismissed the complaint without prejudice on
the ground that plaintiffs Reynaldo Mesina and NancyPolangco did not sign the verification and certification on
non-forum shopping attached to the complaint, in violation of
Rule 7, Section 5 of the Rules of Court. He cited the ruling in
Loquias v. Office of the Ombudsman, that "[w]here there are
two or more plaintiffs or petitioners, a complaint or petition
signed by only one of them is defective, unless he was
authorized by his co-parties to represent them and to sign the
certification."
Consequently, Atty. Bautista filed the present administrative
Complaint against Judge Causapin for Gross Ignorance of the
Law. Atty. Bautista averred that Judge Causapin, in dismissing
the complaint exhibited gross ignorance of the law and utter
lack of professional competence. Atty. Bautista disputed the
application of Loquias to the Civil Case and insisted that
Cavile v. Heirs of Clarita Cavile was the more appropriate
jurisprudence. In Cavile, the Supreme Court recognized the
execution of the certificate of non-forum shopping by only
one of the petitioners, on behalf of all other petitioners
therein, as substantial compliance with the Rules of Court. In
addition, Judge Causapin cannot motu propriodismiss a case
without complying with Rule 7, Section 5 of the Rules ofCourt which provides that the dismissal of a case without
prejudice shall be upon motion and hearing. Atty. Bautista
denied that there were other compulsory heirs who were not
impleaded in the complaint in the Civil Case and even if there
were, the non-inclusion of compulsory parties was not a valid
ground for dismissal of the complaint.
ISSUE:WONJudge Causapin was liable for gross ignorance of
the law and should have applied the exception to the general
rule.
HELD:
YES. The SC found that Judge Causapin is administratively
liable for gross ignorance of the law and gross misconduct.
The rule is that the certificate of non-forum shopping must be
signed by all the petitioners or plaintiffs in a case and the
signing by only one of them is insufficient. However, the
Court has also stressed that the rules on forum shopping
which were designed to promote and facilitate the orderly
administration of justice, should not be interpreted with such
absolute literalness as to subvert its own ultimate and
legitimate objective. The rule of substantial compliance may
be availed of with respect to the contents of the certification.
This is because the requirement of strict compliance with the
provisions regarding the certification of non-forum shopping
merely underscores its mandatory nature in that the
certification cannot be altogether dispensed with or its
requirements completely disregarded. It does not thereby
interdict substantial compliance with its provisions undejustifiable circumstances.
The execution by Thomas George Cavile, Sr. in behalf of al
the other petitioners of the certificate of non-forum shopping
constitutes substantial compliance with the Rules. All the
petitioners, being relatives and co-owners of the properties in
dispute, share a common interest thereon. They also share a
common defense in the complaint for partition filed by the
respondents. Thus, when they filed the instant petition, they
filed it as a collective, raising only one argument to defend
their rights over the properties in question. There is sufficient
basis, therefore, for Thomas George Cavili, Sr. to speak for
and in behalf of his co-petitioners that they have not filed any
action or claim involving the same issues in another court or
tribunal, nor is there other pending action or claim in another
court or tribunal involving the same issues. Moreover, it has
been held that the merits of the substantive aspects of the
case may be deemed as "special circumstance" for the Court
to take cognizance of a petition for review although the
certification against forum shopping was executed and signed
by only one of the petitioners.
RATIO:
The certificate of non-forum shopping should be signed by al
the petitioners or plaintiffs in a case, and that the signing by
only one of them is insufficient and constitutes a defect in the
petition. The attestation requires personal knowledge by the
party executing the same, and the lone signing petitioner
cannot be presumed to have personal knowledge of the filing
or non-filing by his co-petitioners of any action or claim the
same as or similar to the current petition.
8/12/2019 2nd Exam Case Digest
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RULE 7, Sec. 5: DEFECTIVE
CONCEPCION ANCHETA vs. METROBANK, 2005
FACTS:
Metrobank filed a petition with the RTC for the issuance of a
writ of possession over 7 parcels of covered by TCTs.
In its petition, Metrobank alleged that the MaglalangConstruction and Development Corporation (Maglalang
Corporation) submitted a Real Estate Mortgage executed by
Ariel N. Reyes (as attorney-in-fact of the registered owners of
the property), to secure the payment of its loans.
Upon the corporations failure to pay their loan accounts,
Metrobank filed a petition for extrajudicial foreclosure of the
real estate mortgage. Subsequently, the property was sold at
a public auction, with Metrobank as the highest bidder. The
ex-officio sheriff executed a Certificate of Sale which was
consolidated later after the mortgagors failed to redeem theproperty within the period provided. Accordingly, Metrobank
executed an Affidavit of Consolidation of Ownership. Thus, in
a Letter Metrobank demanded that the mortgagors vacate
the property otherwise, it would be impelled to file a petition
for a writ of possession in the RTC of Manila. The
mortgagors refused to vacate the property.
The petition for the issuance of a writ of possession was
docketed as an LRC It contained a Verification with Certificate
of Non-Forum Shopping executed by Atty. Ramon S. Miranda,
the Legal Officer of Metrobanks Legal Division.
The RTC granted Metrobanks petition and issued a Writ of
Possession.
Concepcion R. Ancheta, one of the mortgagors under the Real
Estate Mortgage executed in favor of Metrobank, filed an
Urgent Motion for Intervention in the LRC case, praying
that in the interest of substantial justice, fair play and equity,
she be allowed to intervene, and that her opposition-in-
intervention appended thereto be admitted.
Metrobank opposed her motion. But Ancheta insists that thecertificate of non-forum shopping incorporated in the
petition for a writ of possession filed by respondent
Metrobank is defective because Atty. Miranda, the Legal
Officer who signed the certification, had no authority to do
so. She posits that the board resolution authorizing Atty.
Miranda to file the petition was approved only long after the
petition for a writ of possession was filed, and as such, did
not cure the defect.
ISSUE:
WON the certificate of non-forum shopping was defective
and was it required for a petition of writ of possession.
HELD:
NO. A certificate of non-forum shopping is required only in
complaints or other initiatory pleadings, and a petition for a
writ of possession under Section 7 of Act No. 3135 is not a
complaint or an initiatory pleading.
An application for a writ of possession is a mere incident in
the registration proceeding. Hence, although it wa
denominated as a petition, it was in substance merely a
motion.
Such petition for the issuance of a writ of possession is filed in
the form of an ex partemotion, inter alia, in the registration
or cadastral proceedings if the property is registered
Apropos, as an incident or consequence of the originaregistration or cadastral proceedings, the motion or petition
for the issuance of a writ of possession, not being an
initiatory pleading, dispels the requirement of a forum
shopping certification.
RATIO:
The certification against forum shopping is required only in a
complaint or other initiatory pleading. The ex parte petition
for the issuance of a writ of possession filed by the
respondent is not an initiatory pleading. Although the private
respondent denominated its pleading as a petition, it is,
nonetheless, a motion. What distinguishes a motion from a
petition or other pleading is not its form or the title given by
the party executing it, but rather its purpose. The office of a
motion is not to initiate new litigation, but to bring a materia
but incidental matter arising in the progress of the case in
which the motion is filed. A motion is not an independen
right or remedy, but is confined to incidental matters in the
progress of a cause. It relates to some question that is
collateral to the main object of the action and is connected
with and dependent upon the principal remedy.
8/12/2019 2nd Exam Case Digest
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RULE 7, Sec. 5: FORUM SHOPPING
TIRONA vs. JUDGE ALEJO
FACTS:
Tirona et al., sued Luis Nuez before the MTC of Valenzuela.
The suit was docketed as a Civil Case for ejectment.
Tirona et al., claimed to be owners of various fishpond lotslocated at Coloong, Valenzuela. They alleged, among others
that: Nuez, unlawfully operated and used Tirona et al.,
fishpond, despite their demands to vacate the same. Tirona
et al., prayed that the court order Nuez to vacate and
surrender possession of the fishpond to them.
Nuez admitted in his answers that Tirona et al., owned the
fishponds, but denied the other allegations. He raised the
following affirmative defenses: Tirona et al., action was
premature in view of the pendency of a complaint he filed
with the Department of Agrarian Reform Adjudication Board(DARAB), where the issue of possession in the concept of
tenancy is the same as that raised by Tirona et al., in the Civil
Case for ejectment and (3) petitioners are guilty of forum-
shopping since by they were fully aware of the said DARAB
case. He moved that the ejectment suit be dismissed.
Tirona et al., also instituted another Civil Case for ejectment
against Juanito Ignacio with the MTC of Valenzuela. The
allegations were essentially the same as those against Nuez,
and they sought the same relief prayed for in other Civil Case.
Ignacio raised similar defenses as those offered by Nuez and
he also moved for dismissal of the ejectment suit against him.
Nuez and Ignacio contend that a comparison between the
DARAB Case and the Civil Cases would show the same parties,
the same subject matter of controversy, and the same issues.
In other words, litis pendentia lies and may be availed of to
dismiss the cases for forcible entry filed with the MeTC.
Tirona et al., maintain that the petitioner-affiant who
subscribed the requisite Affidavit of Non-forum Shopping
understood that the issues pending resolution before theDARAB had no relation to the action for forcible entry, and
hence had seen no need to report anymore the pendency of
the DARAB case. Moreover, Nuez and Ignacio claim that in
their pleadings they early enough disclosed the pendency of
the DARAB case to the courts hearing the ejectment cases.
Hence, they aver that there was no violation whatsoever of
the non-forum shopping requirements.
ISSUE:
WONthe pendency of the DARAB case barred the filing of the
civil case and WON the prohibition against forum shopping
was violated.
HELD:
YES. The records disclose that the issue of possession as
raised in the forcible entry cases in necessarily included in the
question of agricultural tenancy raised in the DARAB case
Tirona et al., actively participated in the latter case and thus
could not have been unaware that the possession of the
subject fishponds or parts thereof was in issue before the
DARAB. Tirona et al., failure to see that paragraph 1(b), 1(c)
or 1(d) of Administrative Circular No. 04-94 applied to them is
simply incomprehensible.
In certifying under oath that they have no knowledge of any
case pending before any other tribunal or agency involving
the same issue raised in their forcible entry cases, Tirona etal., were less than candid.
To determine whether a party violated the rule against forum
shopping, the test applied is whether the elements of litis
pendentia are present or whether a final judgment in one
case will amount to res judicata in another.
The requisites o
litis pendentia barred the filing of Civil Cases given the
pendency of DARAB Case. Based thereon, the RTC correctly
dismissed the forcible entry cases on the additional ground o
forum shopping.
8/12/2019 2nd Exam Case Digest
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RULE 7, SEC. 5: FORUM SHOPPING
NORDIC ASIA vs. CA 2004
FACTS:
Sextant Maritime, S.A., (Sextant) borrowed US$5,300,000
from Nordic Asia Limited and Bankers Trust Company. The
loan amount was used by Sextant to purchase the vessel M/V
"Fylyppa." As security for the loan, a First Preferred Mortgage
over the vessel M/V "Fylyppa" was constituted in favor of
Nordic Asia. Sextant eventually defaulted on the loan,
prompting petitioners to institute extrajudicial foreclosure
proceedings under P.D. 1521.
By coincidence, the same day that extrajudicial proceedings
were instituted, Nam Ung Marine Co., Ltd., manning agent of
the vessel, and 27 crew members filed a collection case
before the RTC of Manila. The object of the suit was to claim
their preferred maritime liens under the Code of Commerce
and P.D. 1521, consisting of unpaid wages, overtime pay,allowances and other benefits due to them for services
rendered on board the vessel and for the manning and
provisioning thereof. Impleaded defendants were M/V
"Fylyppa" (the vessel), Maritime (the registered owner of the
vessel), P.V. Christensen Lines (time-charterer of the vessel),
Theil Bolvinkel Shipping, A.S. (ship manager) and Jibfair
Shipping (the alleged local ship agent of the vessel). After
filing the complaint, the manning agent and the crewmen
were able to cause the arrest of the vessel.
Upon learning of the collection case, Nordic Asia filed withthe RTC a motion for leave to intervene in the collection case.
It alleged that they hold a mortgage over the vessel and that
their intervention is only for the purpose of opposing the
crew members' unfounded and grossly exaggerated claim.
After the intervention was granted, Nordic Asia were able to
discharge the attachment over vessel by putting up a
counterbond.
Jibfair Shipping filed a motion to dismiss.
The RTC rendered a decision, ordering the defendants to pay,
among others, the wages of the crewmen and Nam Ung
Marine Ltd.'s agency fees and other expenses incurred for
manning the vessel during its last voyage. It further ordered
the counterbond posted by Nordic Asia to answer for all the
awards.
Nordic Asia appealed the decision to the CA (the "Appeal
Case").
Subsequently, upon motion by respondents, the RTC issued
an order of execution pending appeal. In response, Nordic
Asia instituted another action with the CA to question the
execution pending appeal. This second case was the
"Certiorari Case".
The CertiorariCase was first disposed of by the CA. The order
of execution pending appeal was affirmed in all respects
excluding the portion allowing the immediate execution on
moral damages, attorney's fees, litigation expenses and
interest, as they cannot be the subject of an executionpending appeal. This decision eventually became final and
executory.
As for the Appeal Case, the CA affirmed the decision of the
RTC in all respects and dismissed the appeal. It is this decision
that was elevated to the Court through a petition for review
on certiorari.
ISSUE:
WONNordic Asia is guilty of forum shopping.
HELD:
NO. On the issue of forum-shopping, the SC found that
although the Certiorari Case was supposed to be strictly
limited to questioning the order of execution pending appeal
petitioners also sought to reverse the main decision by asking
the CA to declare it null and void and to set aside the
evidence received ex-parte.
Nordic Asia, however, claim that when they filed the second
case before the CA, they divulged the other case earlier filed
Thus, by their disclosure, they should not be considered to
have committed forum shopping.
Ordinarily, as held by the Court, even if a party admits in the
certification of non-forum shopping the existence of other
related cases pending before another body, this fact alone
does not exculpate such party who is obviously and
deliberately seeking a more friendly forum for his case.
In this case, however, after hearing the parties in ora
argument and after careful study of their memoranda
submitted thereafter, the SC is of the view that Nordic Asiasacts in this case fall short of forum shopping. Considering that
Nordic Asia did inform the Court of Appeals when it filed the
Certiorari Case of the fact of the earlier filing of the Appea
Case, and considering, further, the absence of bad faith on
petitioners' part or any deliberate intention to mislead the
courts, the finding that they engaged in forum shopping
should be reconsidered.
8/12/2019 2nd Exam Case Digest
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RULE 7, SEC. 5: FORUM SHOPPING
MANUEL LAXINA vs. OMBUDSMAN, 2005
FACTS:
Manuel D. Laxina, Sr. was Barangay Chairman of Brgy.
Batasan Hills, Quezon City. Evangeline Ursal (Ursal),
Barangay Clerk of Batasan Hills, Quezon City, filed with the
NBI a complaint for attempted rape against Laxina. He was
subsequently charged with sexual harassment before the RTC
of Quezon City.
Ursal brought before the DILG a complaint-affidavit charging
Laxina with grave misconduct for the alleged attempted
rape. However, the DILG referred the complaint to the
Quezon City Council (City Council) for appropriate action.
Said complaint was docketed as Adm. Case before the City
Council.
Thereafter, Ursal filed with the Office of the Ombudsman asimilar complaint-affidavit charging Laxina with grave
misconduct, docketed as OMB ADM Case. Ursal filed his
counter-affidavit and attached thereto the affidavits of two
witnesses. The Administrative Adjudication Bureau (AAB) of
the Office of the Ombudsman exonerated Laxina from the
charge, dismissing the complaint for lack of substantial
evidence. However, upon review, and with the approval of
the Ombudsman, hewas found guilty of grave misconduct
and meted the penalty of dismissal, with forfeiture of
material benefits, per its Memorandum Order.
Laxina sought reconsideration of the adjudication, alleging
lack of jurisdiction on the part of the Ombudsman, but the
motion was denied.
Meanwhile, Ursal asked the City Council to waive its
jurisdiction in favor of the Ombudsman. The City Council
merely noted Ursals
motion.http://sc.judiciary.gov.ph/jurisprudence/2005/sep20
05/153155.htm - _ftn13
Laxina sought the review of the Ombudsmans Memorandum
Order before the CA, arguing among others that: Ursals filing
of the same administrative case before the Office of the
Ombudsman and the City Council through the DILG
warranted the dismissal of both cases.
Laxina claims that estoppel cannot apply to him because he
never invoked the jurisdiction of the Ombudsman, much less
sought affirmative relief therefrom. Arguing that he has no
obligation to disclose the fact that there is another identical
case pending before another forum since he is not the one
who instituted the identical cases, he reiterates the rule that
when two or more courts have concurrent jurisdiction, the
first to validly acquire jurisdiction takes it to the exclusion of
the other or the rest.
ISSUE:
WONthe rule on forum-shopping applies in this case.
HELD:
NO.The rule on forum-shopping applies only to judicial cases
or proceedings, and not to administrative cases. Laxina has
not cited any rule or circular on forum-shopping issued by the
Office of the Ombudsman or that of the City Council. In fact
it was only when the Ombudsman, in an Administrative Orde
required that a Certificate of Non-Forum Shopping be
attached to the written complaint against a public official or
employee. Supreme Court Administrative Circulars Nos. 04
94 and 28-91adverted to by Laxina mention only initiatory
pleadings in a court of law when another case is pending
before other tribunals or agencies of the government as thepleadings to which the rule on forum-shopping applies.
Ursal filed identical complaint-affidavits before the City
Council, through the DILG, and the Office of the
Ombudsman. A review of the said complaints-affidavits
shows that far from being the typical initiatory pleadings
referred to in the above-mentioned circulars, they merely
contain a recital of the alleged culpable acts of Laxina. Ursa
did not make any claim for relief, nor pray for any penalty for
Laxina.
http://sc.judiciary.gov.ph/jurisprudence/2005/sep2005/153155.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2005/sep2005/153155.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2005/sep2005/153155.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2005/sep2005/153155.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2005/sep2005/153155.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2005/sep2005/153155.htm#_ftn138/12/2019 2nd Exam Case Digest
19/31
RULE 8, SEC. 1
MARIE JAO vs. CHINA BANKING, 2006
FACTS:
Marie Nacua-Jao (Jao) filed a Complaint with the RTC of
Cavite against Spouses Gan, Hsien and China BankingCorporation (CBC) for Recovery of Property, Declaration of
Nullity of Deeds and Title and Damages.
In said Complaint, Jao alleged that she is the lawful owner of
a parcel of land with improvements registered in her name
under a TCT. Before leaving Cebu, she entrusted the owner's
duplicate copy to Hsien. The following year, she wrote Hsien
demanding the return of the owner's duplicate copy of but
the latter failed to comply. Jao later found out that Hsien had
sold the subject property to Spouses Gan by virtue of a Deed
of Sale and that the latter had caused the cancellation ofJaos TCT and the issuance in their names (Sps. Gan) of a new
TCT covering the subject property. Jap also discovered that
Spouses Gan mortgaged said property to CBC as security for a
loan which mortgage was annotated on the TCT. She then
wrote Spouses Gan and CBC, demanding the reconveyance of
the subject property; but her demand went unheeded. Thus,
she filed the Complaint not only against Spouses Gan and
Hsien but also against CBC and prayed that the RTC nullify
Sps. Gans TCT and restore Jaos own TCT, cancel the
mortgage in favor of CBC, and order defendants to pay her
damages and attorney'sfees.http://www.lawphil.net/judjuris/juri2006/oct2006/gr_1
49468_2006.html - fnt12
There is much ado over the alleged failure of Jao to specify
the form and extent of CBCsparticipation in the questioned
sale and mortgage.
ISSUE:
WON the statement in the complaint which states that CBC
'connived and conspired'with Spouses Gan is a statement of
the ultimate fact.
HELD:
YES. Paragraph 15 of the Complaint -- which states that CBC
'connived and conspired' with Spouses Gan to effect the
questioned mortgage -- a statement of the ultimate factthat
CBC participated in the fraudulent mortgage of the property.
Ultimate facts refer to the principal, determinative,
constitutive facts upon the existence of which the cause of
action rests. The term does not refer to details of probative
matter or particulars of evidence which establish the materia
elements. The words 'connived and conspired' may seem to
CBC general and indefinite, but vagueness is not a ground for
a motion to dismiss, the proper recourse being a motion for a
bill of particulars.
Neither may it be said that the Complaint fails to state a
cause of action merely because it did not traverse the issue ofwhether respondent is a mortgagee in good faith. We already
ruled that the claim that a mortgagee is one in good faith is a
matter of defense which should be determined during the
trial. The dismissal of a complaint before resolution of that
issue would certainly be precipitate, as it was in this case.
With the foregoing disquisition, the second and third issues
have become academic. Suffice it to state that respondent is
an indispensable party as, without it, no complete judgment
on the prayer for nullification of the TCT on which its
mortgage is annotated may berendered.http://www.lawphil.net/judjuris/juri2006/oct2006/
gr_149468_2006.html - fnt38
http://www.lawphil.net/judjuris/juri2006/oct2006/gr_149468_2006.html#fnt12http://www.lawphil.net/judjuris/juri2006/oct2006/gr_149468_2006.html#fnt12http://www.lawphil.net/judjuris/juri2006/oct2006/gr_149468_2006.html#fnt12http://www.lawphil.net/judjuris/juri2006/oct2006/gr_149468_2006.html#fnt12http://www.lawphil.net/judjuris/juri2006/oct2006/gr_149468_2006.html#fnt38http://www.lawphil.net/judjuris/juri2006/oct2006/gr_149468_2006.html#fnt38http://www.lawphil.net/judjuris/juri2006/oct2006/gr_149468_2006.html#fnt38http://www.lawphil.net/judjuris/juri2006/oct2006/gr_149468_2006.html#fnt38http://www.lawphil.net/judjuris/juri2006/oct2006/gr_149468_2006.html#fnt38http://www.lawphil.net/judjuris/juri2006/oct2006/gr_149468_2006.html#fnt38http://www.lawphil.net/judjuris/juri2006/oct2006/gr_149468_2006.html#fnt12http://www.lawphil.net/judjuris/juri2006/oct2006/gr_149468_2006.html#fnt128/12/2019 2nd Exam Case Digest
20/31
RULE 8, SEC. 2
PCIC vs. PNCC, 2009
FACTS:
Philippine National Construction Corporation (PNCC)
conducted a public bidding for the supply of labor, materials,
tools, supervision, equipment, and other incidentals
necessary for the fabrication and delivery of 27 tollbooths.
Orlando Kalingo (Kalingo) won in the bidding and was
awarded the contract.
PNCC issuedin favor of KalingoPurchase Order (P.O.) No.71024L for 25 units of tollbooths and P.O. No. 71025L for 2
units of tollbooths. These issuances were subject to the
condition, among others, that each P.O. shall be covered by a
surety bond and that the surety bond shall continue in full
force until the supplier shall have complied with all the
undertakings and covenants to the full satisfaction of PNCC.
Kalingo, hence, posted surety bonds Surety Bond Nos.
27546and 27547 issued by the PCIC and whose pertinent
terms and conditions read:
xxx a written extrajudicial demand must first be tendered to
the surety, PCIC, within 15 days from the expiration date;
otherwise PCIC shall not be liable thereunder and the
obligee waives the right to claim or file any court action to
collect on the bond. xxx
PNCC released 2 checks to Kalingo representing the down
payment and Kalingo in turn submitted the 2 PCIC surety
bonds securing the down payments, which bonds were
accepted by PNCC.
Kalingo made partial/initial delivery of 4 units of tollboothsunder P.O. No. 71024L. However, the tollbooths delivered
were incomplete or were not fabricated according to PNCC
specifications. He failed to deliver the other 23 tollbooths up
to the time of filing of the complaint; despite demands, he
failed and refused to comply with his obligation under the
POs.
6 days before the expiration of the surety bonds and after the
expiration of the delivery period provided for under the
award, PNCC filed a writtenextrajudicial claimagainst PCIC
notifying it of Kalingos default and demanding the
repayment of the down payment on P.O. No. 71024L as
secured by PCIC Bond No. 27547. The claim went unheeded
despite repeated demands. For this reason, PNCC filed with
the RTCMandaluyong City a complaint for collection of a sum
of money against Kalingo and PCIC. PNCC's complaint agains
PCIC called solely on PCIC Bond No. 27547; it did not raise or
plead collection under PCIC Bond No. 27546 which secured
the down payment on P.O. No. 71025L.
ISSUE:
WON PNCC has sufficiently established an alternative cause
of action in its claim under only one of the PCIC Bonds.
HELD:
NO. The fundamental rule is that reliefs granted a litigant are
limited to those specifically prayed for in the complaint; other
reliefs prayed for may be granted only when related to the
specific prayer(s) in the pleadings and supported by theevidence on record. Necessarily, any such relief may be
granted only where a cause of action therefor exists, based
on the complaint, the pleadings, and the evidence on record.
Each of the two bonds is a distinct contract by itself, subject
to its own terms and conditions. They each contain a
provision that the surety, PCIC, will not be liable for any claim
not presented to it in writing within 15 days from the
expiration of the bond, and that the obligee (PNCC) thereby
waives its right to claim or file any court action against the
surety (PCIC) after the termination of 15 days from the timeits cause of action accrues.
Hence, when PNCC complied with the written claim provision
but only with respect to PCIC Bond No. 27547, it does not
mean that it complied with the provision with respect to PCIC
Bond No. 27546. Under the circumstances, PNCCs cause of
action with respect to PCIC Bond No. 27546 did not and
cannot exist, such that no relief for collection thereunder
may be validly awarded.
Liability on a bond is contractual in nature and is ordinarily
restricted to the obligation expressly assumed therein. We
have repeatedly held that the extent of a surety's liability is
determined only by the clause of the contract of suretyship
and by the conditions stated in the bond. It cannot be
extended by implication beyond the terms of the contract.
8/12/2019 2nd Exam Case Digest
21/31
RULE 8, SEC. 8
FILTEX & VILLANUEVA vs. CA, 2003
FACTS:
State Investment House, Inc. (SIHI) instituted a Complaint for
the collection of sum of money with interest, penalties,
exemplary damages, attorneys fees and costs of suit against
Filtex and Villanueva.
In its Complaint, SIHI alleged that Filtex applied for domestic
letters of credit to finance the purchase of various raw
materials for its textile business. Finding the application to bein order, SIHI issued on various dates domestic letters of
credit authorizing Indo-Phil, Texfiber, and Polyamide to
value on SIHI such drafts as may be drawn by said
corporations against Filtex for an aggregate amount not
exceeding P3,737,988.05.
Filtex used these domestic letters of credit to cover its
purchase of various textile materials from Indo-Phil, Texfiber
and Polyamide. Upon the sale and delivery of the
merchandise, Indo-Phil, Texfiber and Polyamide issued
several sight drafts payable to the order of SIHI, which wereduly accepted by Filtex. Subsequently, the sight drafts were
negotiated to and acquired in due course by SIHI which paid
the value thereof to Indo-Phil, Texfiber and Polyamide for the
account of Filtex.
Allegedly by way of inducement upon SIHI to issue the
aforesaid domestic letters of credit and to value the sight
drafts issued by Indo-Phil, Texfiber and Polyamide, Villanueva
executed a comprehensive surety agreement whereby he
guaranteed, jointly and severally with Filtex, the full and
punctual payment at maturity to SIHI of all the indebtedness
of Filtex. The essence of the comprehensive surety
agreement was that it shall be a continuing surety until such
time that the total outstanding obligation of Filtex to SIHI had
been fully settled.
In order to ensure the payment of the sight drafts, Filtex
executed and issued to SIHI several trust receipts covering
the merchandise sold. Under the trust receipts, Filtex agreed
to hold the merchandise in trust for SIHI, with liberty to sell
the same for SIHIs account but without authority to make
any other disposition of the said goods. Filtex likewise agreed
to hand the proceeds, as soon as received, to SIHI to apply
against any indebtedness of the former to the latter.
Because of Filtexs failure to pay its outstanding obligation
despite demand, SIHI filed a Complaint praying that the
petitioners be ordered to pay, jointly and severally, the
principal amount plus interest and penalties, attorneys fees
exemplary damages, costs of suit and other litigationexpenses.
ISSUE:
WON the letters of credit, sight drafts, trust receipts and
comprehensive surety agreement are admissible in evidence.
HELD:
YES. TheAnswerwith Counterclaim andAnswer, of Filtex and
Villanueva, respectively, did not contain any specific denia
under oath of the letters of credit, sight drafts, trust receiptsand comprehensive surety agreement upon which SIHIs
Complaint was based, thus giving rise to the implied
admission of the genuineness and due execution of these
documents.
Under Sec. 8, Rule 8 of the Rules of Court, when an action or
defense is founded upon a written instrument, copied in o
attached to the corresponding pleading as provided in the
preceding section, the genuineness and due execution of the
instrument shall be deemed admitted unless the adverse
party, under oath, specifically denies them, and sets forth
what he claims to be the facts.
InBenguet Exploration, Inc. vs. Court of Appeals,the SC ruled
that the admission of the genuineness and due execution of a
document means that the party whose signature it bears
admits that he voluntarily signed the document or it was
signed by another for him and with his authority; that at the
time it was signed it was in words and figures exactly as set
out in the pleading of the party relying upon it; that the
document was delivered; and that any formalities required by
law, such as a seal, an acknowledgment, or revenue stamp,
which it lacks, are waived by him.
http://sc.judiciary.gov.ph/jurisprudence/2001/feb2001/117434.htmhttp://sc.judiciary.gov.ph/jurisprudence/2001/feb2001/117434.htmhttp://sc.judiciary.gov.ph/jurisprudence/2001/feb2001/117434.htmhttp://sc.judiciary.gov.ph/jurisprudence/2001/feb2001/117434.htm8/12/2019 2nd Exam Case Digest
22/31
RULE 9, SEC. 1
ANUNCIATION vs. BOCANEGRA, 2009
FACTS:
Sps. Anunciacion filed before the RTC, Manila, a complaint for
Quieting of Title and Cancellation of TCT.
Bocanegra, through their counsel, Atty. Norby C. Caparas, Jr.,filed a Motion to Dismiss on the ground that the complaint
stated no cause of action.
The Anunciacion spouses filed an Opposition to the
Supplemental Motion to Dismiss.
Thereafter, the Bocanegras filed a Second Supplemental
Motion to Dismiss and Manifestation citing, inter alia, the
following ground, xxx That the court has no jurisdiction over
the person of the defending party. xxx
The trial court sustained the Bocanegras and dismissed the
complaint for lack of jurisdiction over their persons as
defendants.
It was only in the Bocanegras Second Supplemental Motion
to Dismiss that they, for the first time raised the courts lack
of jurisdiction over their person as defendants on the ground
that summons were allegedly not properly served upon them.
The filing of the said Second Supplemental Motion to Dismiss
did not divest the court of its jurisdiction over the person of
the Bocanegras who had earlier voluntarily appeared before
the trial court by filing their motion to dismiss and thesupplemental motion to dismiss.
ISSUE:
WON the Bocanegras can still raise the issue that the court
had no jurisdiction over the person of the defending party
when it was not raise in their first Motion To Dismiss.
HELD:
NO MORE. The Bocanegras, through counsel, filed a motion
to dismiss with only one ground, i.e., that the pleadingasserting the claim "states no cause of action."
The filing of the Motion to Dismiss, without invoking the lack
of jurisdiction over the person of the Bocanegras, is deemed
a voluntary appearance on their part under the provision of
the Rules.
The dismissal of the complaint on the ground of lack of
jurisdiction over the person of the respondents after they had
voluntarily appeared before the trial court clearly constitutes
grave abuse of discretion amounting to lack of jurisdiction o
in excess of jurisdiction on the part of the RTC.
Quite apart from their voluntary appearance, Bocanegras
Supplemental Motion to Dismiss and Second Supplementa
Motion to Dismiss were clearly in violation of Rule 15, Section
8 in relation to Rule 9, Section 1 of the Rules.
Rule 15, Section 8 of the Rules provides:
Sec. 8. Omnibus motion. Subject to the provisions o
Section 1 of Rule 9, a motion attacking a pleading, order
judgment, or proceeding shall include all objections then
available, and all objections not so included shall be deemed
waived.
Rule 9, Section 1, in turn, states:
Sec. 1. Defenses and objections not pleaded.Defenses and
objections not pleaded either in a motion to dismiss or in the
answer are deemed waived. However, when it appears fromthe pleadings or the evidence on record that the court has no
jurisdiction over the subject matter, that there is anothe
action pending between the same parties for the same cause
or that the action is barred by prior judgment or by statute of
limitations, the court shall dismiss the claim.
Applying the foregoing rules, the Bocanegras failure to raise
the alleged lack of jurisdiction over their persons in their very
first motion to dismiss was fatal to their cause. They are
already deemed to have waived that particular ground for
dismissal of the complaint. The trial court plainly abused its
discretion when it dismissed the complaint on the ground of
lack of jurisdiction over the person of the Bocanegras. Unde
the Rules, the only grounds the court could take cognizance
of, even if not pleaded in the motion to dismiss or answer,
are: (a) lack of