1. Chua vs. Topros Inc.

Facts: Total Office Products and Services (TOPROS), Inc., through its authorized representative , filed a complaint

for annulment of contract Summons was served to Chua Defendant Chua filed a MTD the complaint but was denied. Likewise, his MR was also denied. Chua filed a petition for certiorari w/ CA assailing the RTC’s order denying the MTD (CA did not issue

restraining order to the RTC) Since no answer was filed by the defendant, plaintiff filed a motion to declare defendant in default RTC: issued an order declaring defendant in default and ordering the reception of the plaintiff's

evidence ex-parte. : rendered a decision in favor of plaintiff and against defendant

Defendant appealed to CA CA: denied the appeal and affirm RTC’s decision. The trial court's order declaring herein petitioner in

default for failing to file his answer within the time allowed by the rules, is valid and in accordance with Section 3, Rule 9 of the Rules of Court

Hence, this petition.

Issue:

W/N CA erred in dismissing the appeal based purely on technical considerations, resulting in petitioner's unjust deprivation of his property without due process of law due to his former counsel's gross negligence.

Ruling: The petition is denied.

General Rule: the client is bound by the mistakes of his lawyer. To trivialize this rule would bring about a dangerous trend of endless litigation.

Exception: Hilario v. People:  the exception is when the negligence of counsel is so gross, reckless and inexcusable that the client is deprived of his day in court. If the incompetence, ignorance or inexperience of counsel is so great and the error committed as a result thereof is so serious that the client, who otherwise has a good cause, is prejudiced and denied his day in court, the litigation may be reopened to give the client another chance to present his cases.

As correctly pointed out by the CA, there is no showing whatsoever that petitioner had such a “good cause.”

Even during proceedings before the trial court, petitioner never presented a strong defense to persuade the court that the interest of justice would be served by the lifting of the default order.  Petitioner absolutely failed to show that he had a meritorious defense.

2. Ceferino Cabreza, et. al vs. Amparo Cabreza

Facts: RTC declared void ab initio the marriage between Ceferino and Amparo and ordered the dissolution and

liquidation of the conjugal partnership.

Ceferino moved that their only conjugal property, the conjugal home, be sold and the proceeds distributed as mandated by law

Ceferino thereafter filed an Omnibus Motion (1) to approve the Deed of Absolute Sale (2) to authorize petitioner-movant to sign the Deed of Sale for and on behalf of Amparo; and (3) to order the occupants of the premises to vacate the property.

For failure to appear of Amparo and his counsel, the Omnibus Motion of Ceferino was granted.

Ceferino executed the Deed of Sale in favor of BJD Holdings Corporation. He then filed a Motion for Writ of Possession and to Divide the Purchase Price which was granted by RTC.

Amparo filed a Motion to Hold in Abeyance the Writ of Possession and Notice to Vacate which was denied by RTC and CA.

Amparo filed a petition for review in SC.

During the pendency of the CA Petition, Amparo filed with the RTC, a Complaint to annul the Deed of Sale.

RTC dismissed the Complaint with prejudice, on the basis of litis pendentia and forum shopping.

Amparo appealed to the CA which reversed the decision that there was no litis pendentia and therefore no forum shopping, CA directed that the case be remanded for trial on the merits.

Ceferino filed the present Petition for Review under Rule 45

Issue:

WON CA erred in reversing RTC’s dismissal of the Complaint for Declaration of Nullity of the Deed of Absolute Sale filed by Amparo during the pendency of her Petition for Certiorari to nullify the Writ of Possession on the grounds of litis pendentia and forum shopping.

Ruling:

The petition is granted. CA erred.

There is litis pendentia.

Requisites of litis pendentia:

1. Identity of parties or representation in both cases;2. Identity of rights asserted and relief prayed for, the relief being founded on the same facts and the same

basis; and3. Identity of the two preceding particulars, such that any judgment that may be rendered in the other action

will, regardless of which party is successful, amount to res judicata in the action under consideration.

1st requisite: there is no dispute that the two cases have substantially the same parties.

2nd requisite: to determine whether there is identity of the rights asserted and reliefs prayed for grounded on the same facts and bases

the following tests may be utilized: (1) whether the same evidence would support and sustain both the first and the second causes of action; or (2) whether the defenses in one case may be used to substantiate the complaint in the other.

1st test (same evidence): RTC issued an Order w/c granted authority to Ceferino to sign the Deed of Sale on Amparo’s behalf. This same Order also contained, that “after the sale of the subject property shall have been consummated, all the occupants thereof shall vacate and clear the same to enable the buyer to take complete possession and control of the property.”

2nd test (same defense): Amparo seeks to prevent the sale and thereby maintain ownership of the conjugal dwelling. In both cases, she theorized that: 1. RTC decision merely directed the dissolution and liquidation of the conjugal partnership its subsequent Orders directing the sale of the conjugal dwelling improperly modified its own final Decision; and (2) because she was the spouse with whom a majority of the common children chose to remain, the conjugal dwelling should be adjudicated to her in accordance w/ Article 129 (9) of the Family Code.

3rd requisite: At the time Amparo filed her Complaint for Declaration of Nullity of the Deed of Sale with RTC, her Petition impugning the Writ of Possession was already pending with the CA. Thus, from the point of view ,the CA’s final judgment on the merits of the case before it would have barred a subsequent judgment on the Complaint for Declaration of Nullity of the Deed of Sale

When the CA eventually upheld the propriety of the Writ of Possession, it necessarily upheld the validity of the Deed of Sale, which the Writ of Possession sought to implement. On the other hand, had the CA declared null and void the Writ of Possession based on the grounds cited by Amparo, the Complaint to annul the Deed of Sale would have been barred.

There is forum shopping

Forum shopping exists where the elements of litis pendentia are present or where a final judgment in one case will amount to res judicata in the other.”

No res judicata in this case.

Amparo’s Petition seeking to nullify the Writ of Possession is now final, having been rendered by this Court which had jurisdiction over the subject matter and the parties thereto, it was not a judgment “on the merits” of the case. Decision was rendered on procedural inability.

Judgment on the merits- “when it determines the rights and liabilities of the parties based on the disclosed facts, irrespective of formal, technical or dilatory objections” or when the judgment is rendered “after a determination of which party is right, as distinguished from a judgment rendered upon some preliminary or formal or merely technical point.

Petition seeking to nullify the Writ of Possession and Complaint for Declaration of Nullity of the Deed of Sale cannot prosper, both seek the modification of an already final Order authorizing the sale of family home

3. Shimizu vs. Magsalin, FGU Corp et.al

Facts:

Petitioner claims that Magsalin had breached their subcontract agreement for the supply, delivery, installation and finishing of the tiles in certain floors in petitioner’s condominium project.

The agreement was terminated.

Due to Magsalin’s refusal to return unliquidated advance payment and other monetary liabilities, petitioner sent a notice to respondent FGU Insurance demanding damages pursuant to the bonds the former had issued for the subcontract. 

Petitioner filed a complaint for actual damages for breach of contract against Magsalin and FGU

FGU was duly served with summons. With respect to Magsalin, despite efforts, their new addresses could not be determined.

FGU filed a motion to dismiss but was denied. Likewise, MR was denied. FGU was obliged to file an answer. 

Petitioner filed a motion for leave to serve summons on respondent Magsalin by way of publication. Then, the petitioner filed its reply to FGU Insurance’s answer.

FGU filed a motion for leave of court to file a third-party complaint. Baetiong, G. Garcia and C. Garcia were named as third-party defendants.

FGU claims that the three had executed counter-guaranties over bonds it executed for the subcontract w/ Magsalin and, hence, should be held jointly and severally liable

RTC admitted the third-party complaint and denied the motion to serve summons by publication on the ground that the action against respondent Magsalin was in personam.

RTC issued a notice setting the case for hearing. FGU filed a motion to cancel the hearing on the ground that the third-party defendants had not yet filed their answer. The motion was granted.

Of the three third-party defendants, only Baetiong filed an answer, the officer’s returns on the summons to the Garcias state that both could not be located at their given addresses. Petitioner was not served w/ Baetiong’s answer.

For failure of petitioner to prosecute, RTC dismissed the case. RTC denied the petitioner’s MR prompting the latter to elevate its case to the CA via a Rule 41 petition for review.

CA dismissed the appeal on the ground of lack of jurisdiction. The appeal raised a pure question of law as it did not dispute the proceedings before the issuance of the December 16, 2003 dismissal order.

Petitioner thus filed the present petition for review on certiorari.  

Issues:

W/N THE LOWER COURT ERRED IN DECLARING THAT PETITIONER FAILED TO PROSECUTE THE CASE

W/N THE APPELLATE COURT HAS JURISDICTION TO DETERMINE THE MERITS OF THE APPEAL AS THE MATTERS THEREIN INVOLVE BOTH QUESTIONS OF LAW AND FACT.

W/N IT IS EVIDENT THAT THE LOWER COURT’S DISMISSAL OF THE CASE IS A CLEAR DENIAL OF DUE PROCESS.

RULING:

The petition is granted.  

The Dismissal Order is Void

The December 16, 2003 dismissal order shows that it is an unqualified order and, as such, is deemed to be a dismissal with prejudice. Dismissals of actions for failure of the plaintiff to prosecute is authorized under Section 3, Rule 17 of the Rules of Court. Dismissal with prejudice means dismissal on adjudication of merits.

It is imperative that the dismissal order conform with Section 1, Rule 36 of the Rules of Court on the writing of valid judgments and final orders.

(Section 1. Rendition of judgments and final orders. — A judgment or final order determining the merits of the case shall be in writing personally and directly prepared by the judge, stating clearly and distinctly the facts and the law on which it is based, signed by him, and filed with the clerk of the court.)

The December 16, 2003 dismissal order clearly violates this rule for its failure to disclose how and why the petitioner failed to prosecute its complaint. A trial court should always specify the reasons for a complaint’s dismissal so that on appeal, the reviewing court can readily determine the prima facie justification for the dismissal

There was a denial of due process. Elementary due process demands that the parties to a litigation be given information on how the case was decided, as well as an explanation of the factual and legal reasons that led to the conclusions of the court. Where the reasons are absent, a decision has absolutely nothing to support it and is thus a nullity.

The appeal was properly filed under Rule 41 of the Rules of Court

In Olave vs. Mistas, among the critical factual questions was whether, based on the records,  there had been  factual basis for the dismissal of the subject complaint. This same question is particularly significant in the present case given that the  order appealed does not even indicate the factual basis for the dismissal of the case.

Due to the absence of any stated factual basis, and despite the admissions of the parties, the CA still had to delve into the records to check whether facts to justify the prejudicial dismissal even exist. Since the dismissal of the case appears to have been rendered motu proprio (as the December 16, 2003 dismissal order does not state if it was issued upon the respondents’ or the trial court’s motion), the facts to be determined by the CA should include the grounds specified under Section 3, Rule 17 of the Rules of Court. A court could only issue a motu proprio dismissal pursuant to the grounds mentioned in this rule and for lack of jurisdiction over the subject matter.[32] These grounds are matters of facts. Thus, given that the dismissal order does not disclose its factual basis, we are thus persuaded that the petitioner had properly filed its appeal from the dismissal order under Rule 41 of the Rules of Court.

The dismissal of the case is not supported by the facts of the case

The following events were chronologically proximate to the dismissal of Civil Case No. 02-488: (a) the court admitted FGU Insurance’s third-party complaint; (b) the trial court cancelled hearing upon FGU Insurance’s motion; and (c) Baetiong filed his Answer to the third-party complaint but did not serve it upon the petitioner.

None of these events square with the grounds specified by Section 3, Rule 17 of the Rules of Court for the motu proprio dismissal of a case for failure to prosecute.

This does not satisfy the standards of non prosequitur. The fundamental test for non prosequitur  is whether, under the circumstances, the plaintiff is chargeable with want of due diligence in failing to proceed with  reasonable promptitude. There must be unwillingness on the part of the plaintiff to prosecute.

 In this case, the parties’ own narrations of facts demonstrate the petitioner’s willingness to

prosecute its complaint. Indeed, neither respondents FGU Insurance nor Baetiong was able to point to any specific act committed by the petitioner to justify the dismissal of their case.

 While it is discretionary on the trial court to dismiss cases, dismissals of actions should be made with care. The sound discretion demands vigilance in duly recognizing the circumstances surrounding the case to the end that technicality shall not prevail over substantial justice.

4. Deutsche Bank vs. Steel Corp

Facts:

Private respondent SteelCorp is a domestic corporation organized and existing under the laws of the Philippines .  It is engaged in the business of manufacturing and distribution of steel sheets and coils.      

SteelCorp entered into a loan agreement w/ a consortium of lending banks and other financial institutions for the purpose of partially financing the construction of its steel mill project.  One of the participating lenders was RCBC.

SteelCorp failed to pay its loan obligations as they fell due.  BDO filed a creditor-initiated petition to place SteelCorp under corporate rehabilitation before RTC

RTC approved the rehabilitation plan

During the pendency of the proceedings, RCBC and petitioner Deutsche Bank AG entered into a deed of assignment wherein the former assigned to the latter all of its rights, obligations, title to, and interest in, the loans which it had extended to SteelCorp

The RTC, upon the motion of SteelCorp, issued its order directing the assignees, including Deutsche Bank AG, to disclose the actual price or consideration paid by them for the SteelCorp debts assigned and transferred to them

Deutsche Bank AG filed its Petition for Certiorari w/ TRO and/or Injunction with the CA  

Records show that two other petitions for certiorari filed by other creditors of SteelCorp were pending before different divisions of the CA (Investments 2234 Petition and EPCIB Petition)

SteelCorp filed its Motion for Consolidation praying for the consolidation of the Deutsche Bank AG Petition, together with the Investments 2234 Petition and EPCIB Petition, with the Vitarich Petition on the ground that the cases involved the same question of law – whether creditors could be compelled to disclose the actual assignment price for credits in litigation which were assigned in the context of a corporate rehabilitation proceeding pursuant to Articles 1634 and 1236 of the Civil Code.

CA ordered the consolidation.

VITARICH PETITION (In the Matter of the Petition for Corporate Rehabilitation of Vitarich Corporation is pending in the RTC)

RTC uphold the rehabilitation plan of Vitarich Corp. Vitarich filed a motion to direct the assignees to disclose the amounts paid by them to their assignors.

RTC denied the motion.

Vitarich filed its petition praying that the CA order the assignees to disclose the actual amount paid to their respective assignors so that it could pay the transfer prices of the assigned credits should it exercise its right of redemption

Deutsche Bank AG filed a motion for reconsideration. CA resolution arguing that the Deutsche Bank AG petition and the Vitarich petition were not related cases that would merit consolidation. A common question of law alone does not warrant consolidation inasmuch as the Internal Rules of the CA (IRCA) provides that for consolidation to be proper, the cases must be related.  

The said motion was, however, denied by the CA. When two cases involved the same parties, or related questions of fact, or related questions of law, then they were considered as related cases for purposes of consolidation.

Deutsche Bank AG interposes the present special civil action

Issue:

Whether the CA gravely abused its discretion amounting to lack or excess of jurisdiction when it ordered the consolidation of the Deutsche Bank AG petition and the Vitarich petition.

Ruling:

It appears from the records that the Motion for Consolidation was withdrawn by SteelCorp.  In view of the said withdrawal of the motion, the present petition has certainly been rendered moot and academic.

A moot and academic case is one that ceases to present a justiciable controversy by virtue of supervening events, so that a declaration thereon would be of no practical use or value. Generally, courts decline jurisdiction over such case or dismiss it on ground of mootness. However, even in cases where supervening events had made the cases moot, this Court did not hesitate to resolve the legal or constitutional issues raised to formulate controlling principles to guide the bench, the bar and the public.

Exception to the rule on mootness, the courts will decide a question otherwise moot if it is capable of repetition, yet evading review. This case falls on the exception, Thus, there is a necessity to decide the case on the merits.  

Petition is granted.

1. The consolidation is not proper.

Consolidation of actions involving a common question of law or fact is expressly authorized under Section 1, Rule 31 of the 1997 Rules of Civil Procedure, to wit:             SECTION 1.  Consolidation. – When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay. 

 Consolidation of cases is also allowed under Section 3, Rule III of the 2009 IRCA, to wit:

 Consolidation of Cases. – When related cases are assigned to different Justices, they may be consolidated and assigned to one Justice. 

(a) Upon motion of a party with notice to the other party/ies, or at the instance of the Justice to whom any of the related cases is assigned, upon notice to the parties, consolidation shall ensue when the cases involve the same parties and/or related questions of fact and/or law.

(b) Consolidated cases shall pertain to the Justice –(1) To whom the case with the lowest docket number is assigned, if they are of the same kind;(2) To whom the criminal case with the lowest number is assigned, if two or more of the cases are criminal and the others are civil or special;(3) To whom the criminal case is assigned and the other are civil or special; and(4) To whom the civil case is assigned, or to whom the civil case with the lowest docket number is assigned, if the cases involved are civil and special.(c) Notice of the consolidation and replacement shall be given to the Raffle Staff and the Judicial Records Division

As stated in the provisions, for consolidation to be proper, the cases sought to be consolidated must be related.

Steel Corporation of the Philippines v. Equitable PCI Bank, Inc.,

the Court held that “it is a time-honored principle that when two or more cases involve the same parties and affect closely related subject matters, they must be consolidated and jointly tried, in order to serve the best interests of the parties and to settle expeditiously the issues involved. In other words, consolidation is proper wherever the subject matter involved and relief demanded in the different suits make it expedient for the court to determine all of the issues involved and adjudicate the rights of the parties by hearing the suits together.”

In the present case, Deutsche Bank AG Petition has no relation whatsoever to the Vitarich Petition.  

Deutsche Bank AG Petition is an appeal on certiorari.  Vitarich case, on the other hand, is an appeal oncertiorari and mandamus.

The fact that Deutsche Bank AG is a party to both cases does not make the proceedings intimately related.  There is no factual relation between the two proceedings.  SteelCorp proceedings originated from SteelCorp’s rehabilitation proceedings which have nothing to do with the Vitarich proceeding that originated from Vitarich’s rehabilitation proceeding. 

Neither are there interconnected transactions, nor identical subject matter in the Deutsche Bank AG and Vitarich petitions.  

The former involved issue resulting from the assignment of credits of RCBC to Deutsche Bank AG whereas in the latter, the issue arose from the assignment of the receivables of various creditors of Vitarich to several corporations and special purpose vehicles.

  Verily, the two petitions having no factual relationship with and no interconnected

transactions on the same subject matter, they cannot be deemed “related cases.”  

Zulueta v. Asia Brewery, Inc.

Two cases involving the same parties and affecting closely related subject matters must be ordered consolidated and jointly tried in court, where the earlier case was filed.

Benguet Corporation, Inc. v. Court of Appeals

“The rationale for consolidation is to have all cases intimately related   acted upon by one Court/Division to avoid the possibility of conflicting decisions being rendered.”

Active Wood Products Co., Inc. v. Court of Appeals The consolidation of cases becomes mandatory because it involves the same parties and the same subject matter which is the same parcel of land. Such consolidation is desirable to avoid confusion and unnecessary costs and expenses with the multiplicity of suit

2. Consolidation of the subject cases will defeat the purpose of consolidation. 

De Vera v. AgloroConsolidation should be denied when prejudice would result to any of the parties or would cause complications, delay, prejudice, cut off, or restrict the rights of a party.

Purpose of the rule on consolidation:

to avoid multiplicity of suits; to guard against oppression and abuse; to prevent delays; to clear congested dockets; and to simplify the work of the trial court. In short, consolidation aims to attain justice with the least expense and vexation to the parties-litigants. It contributes to the swift dispensation of justice, and is in accord with the aim of affording the parties a just, speedy, and inexpensive determination of their cases before the courts. Further, it results in the avoidance of the possibility of conflicting decisions being rendered by the courts in two or more cases, which would otherwise require a single judgment.

Under the circumstances, the consolidation of the Deutsche Bank AG Petition with the Vitarich Petition does not appear to be a prudent move as it serves none of the purposes cited above. Moreover, the question of law that the Vitarich proceedings allegedly shares with the SteelCorp Proceedings – whether Vitarich’s creditors could be compelled to disclose the sums paid for the assigned Vitarich loans - has long been finally resolved and has already become the law of the case among the parties in the Vitarich rehabilitation proceedings.  

           Lest it be misunderstood, the CA may prescribe reasonable rules governing assignment of cases with similar questions of law or facts to one justice. In case of consolidation, however, it may be effected only if the said cases are related. Needless to state, assignment is different from consolidation.

5. VCP Company vs. Municipality of Paranaque

Facts:

Respondent Municipality of Parañaquefiled a complaint7 against petitioner VCP for the expropriation of its property

The municipality intended to develop the property for its landless residents Respondent Sampaguita Hills Homeowners Association,

Inc. (SHHAI), consisting of the property’s actual occupants, who are also theintended beneficiaries of the action, intervened in the case

RTC sustained the municipality’s right to expropriate the said property and to awrit of possession. Payment of just compensation to be determined as of the date of the taking ofthe property or the filing of the complaint, whichever came first.

Parties did not object thereto and proceeded to submit the names of their respective nominees for commissioner.

VCP did not participate despite notification and their request for additional 4 months for independent valuation is denied.

commissioners submitted their appraisal report statingthat they considered sales data of properties within the vicinity from the years1994 to 2003, and tax declarations from the years 1996 to 2003. Report shows that the just compensation is at P1,150.00 per square meter

RTC reject the report. justcompensation, as Section 4 of Rule 67 of the Rules of Court provides,mustreflect the value and character of the property sought to be expropriated, at thetime it was taken or at the time the complaint for expropriation was filed,whichever came first. Applying this rule to the facts of the case, the reckoningperiod should have been the time of filing of the complaint in 1987 because it tookplace before the taking of the property in 2002. The report violated this rule byusing data from 1996 onwards.

  trial court then made an independent finding. The just compensation is P1,372,350.00.

VCP moved for a reconsideration, which the trial court denied in its Order

58 days since VCP received the Order denying itsMR, it filed with the CA a Motion for Extension of Timeto File Petition for Certiorari which the CA granted

VCP filed its Petition for Certiorari. It assailed the trial court’s rejection of the appraisal report as a grave abuse of discretion. VCP maintained that the appraisal, which is based on theproperty’s value at the time of its taking in 2002, is correct. Assuming that the commissioners committed an error, the trial court should haverecommitted the valuation to a new set of commissioners, instead of substituting

its own judgment.

CA denied the petition. An ordinary appeal under Rule 41 wasavailable to petitioner and would have constituted a plain, speedy and adequateremedy to correct any perceived error in the RTC Decision. VCP failed to avail itself of the said remedy within the reglementary period. Having lost its right to appeal, VCP resorted to a Petition for Certiorari in thehope that it could nevertheless, obtain a reversal of the RTC Decision. The certiorari is unavailing as a substitute for a lost appeal. Even if it were to rule that certiorari is proper, itwould still dismiss the petition for certiorari. It held that grave abuse of discretionwas not attendant in the trial court’s rejection of the commissioners’ report. TheCA explained that the trial court has such authority as long as it finds just cause

On the 15th day from VCP’s receipt of the CA Decision, it filed a MOTEX to engage the services of a new counsel of time to file a It requested for another 15 days to file its MR. 45 days since it received the CA Decision, VCP filed its MR through its new counsel. The CA denied petitioner’s MOTEX. It ratiocinated that the 15-day period for filing a MR cannot be extended. Thus, it dismissed VCP’s MR for belated filing.

Issues:

1. Is petitioner’s lack of counsel a justifiable excuse for the latefiling of a Motion for Reconsideration?2. Is a Petition for Certiorari the proper remedy to correct allegederrors in the trial court’s Decision?

Ruling

The petition has no merit.

Period for filing a Motion for Reconsideration not extendible; failure to file Motion for Reconsideration ontime renders the Decision final.

VCP received the CA Decision on April 10, 2007. Based on Rule 52 of theRules of Court and Rule 7 of the 2002 IRCA, VCP had 15 days from its receipt of the Decision, or until April 25,2007, to file a MR, an appeal, or a MNT. Failure to file the necessary pleading within the reglementary period would render the CA Decision final and executory. Instead of filing a MR on April 25, 2007, VCP fileda MOTEX on the ground that its lawyer had withdrawn from the case and it wasstill in the process of retaining a new counsel. The CA was correct in denyingpetitioner’s MOTEX because the period to file a Motion for Reconsideration is notextendible

There is no justification for the application of equity and for the relaxation of the rules.

The Court, in the interest of equity and justice, sometimes allows a liberalreading of the rules, so long as the petitioner is able to prove the existence ofcogent reasons to excuse its non-observance. No justification to warrant such relaxation in this instance. is incumbent upon the client to exert all efforts to retain the services of new counsel. VCP knew since August 29, 2006, seven months before the CA rendered its Decision, that it had no counsel. Despite its knowledge, it did not immediately hire a lawyer to attend to its affairs. Instead, it waited until the lastminute, when it had already received the adverse CA Decision on April 10, 2007,to search for a counsel; and even then, VCP did not rush to meet the deadline. Itasked for an extension of 30 days to file aMotion for Reconsideration.67 It finally

retained the services of a new counsel on May 24, 2007, nine months from thetime that its former counsel withdrew her appearance. VCP did not even attemptto explain its inaction. The Court cannot grant equity where it is clearlyundeserved by a grossly negligent party

This Court cannot ascribe good faith toVCP as it had neglected reglementaryperiods in the past.

It did not attend the meetings before the commissioners for the initial andthe final valuation of its property despite notice. When the commissioners werefinalizing their report to meet its deadline, VCP asked for an additional fourmonths to submit its independent valuation of the property. While thecommissioners denied VCP’s request, VCP’s action betrays its lack ofconsideration for deadlines

Appeal is a sufficient and adequateremedy unless the party provesotherwise.

Appeal is a speedy remedy, as an adverseparty can file its appeal from a final decision or order immediately after receivingit. A party, who is alleging that an appeal will not promptly relieve it of theinjurious effects of the judgment, should establish facts to show how the appeal isnot speedy or adequate. VCP’s empty protestations, therefore, fail to impress.There is no reason, and VCP cannot explain, why an appeal would not be speedyand adequate to address its assigned errors. VCP cannot complain of delaybecause it was guilty of delay itself. Clearly, petitioner resorted tocertiorari as a substitute for its lost appeal. The CA did not err in dismissing thesame.

6. Narciso vs. Garcia

Facts:

Garcia filed a complaint for damages against Narciso before the RTC. Narciso file a MTD on the grounds of lack of jurisdiction over the subject matter of the complaint since it

averred facts of forcible entry, and improper venue since theacts Garcia complained of were committed in Angeles City

Garcia opposed the MTD and at the same time sought to have Narciso declared in default. Garcia cited the SC administrative circular that discouraged the filing of a MTD in lieu of answer. Since the time to file an answer had already elapsed, Narciso is in default.

RTC denied Narciso’s motion to dismiss and, as aconsequence, declared her in default for failing to file an answer.

Narciso filed MR. The case was referred to meditation and dispute resolution but failed. Not having acted upon the MR, the case was set for trial. RTC denied Narciso’s MR. She had already been declared in default and from that time, she had not filed

any motion to lift the order of default within the allowable time, Narciso could no longer assail such default order.

Narciso filed a motion to lift the order of default against her. She claimed that the protracted resolution of her MR and the referral of the case for mediation prevented her from filing an answer.

RTC denied Narciso’s motion. MR is also denied prompting her to file Petition for Certiorari before the CA CA denied petition and affirmed RTC’s order. While a motion to lift order of default may be filed at any

time after notice and before judgment, Narciso needed to allege facts constituting fraud, accident, mistake, or excusable negligence that prevented her from answering the complaint. She also needed to show a meritorious defense or that something would be gained by having the order of default set aside. For the CA,petitioner failed to do these things.

Narciso filed petition for certiorari

Issue: whether or not the CA gravely abused its discretion in affirming the order of default that the RTC issued

against Narciso

Ruling:

Petition is granted.

Section 3, Rule 9 of the Rules of Court provides that a defending partymay be declared in default upon motion of the claiming party with notice tothe defending party, and proof of failure to file an answer within the time allowed for it.

Here, however, defendant Narciso filed a motion to dismiss plaintiffGarcia’s complaint against her before filing an answer. Section 1, Rule 16allows her this remedy.

As a consequence of the motion to dismiss that defendant Narcisofiled, the running of the period during which the rules required her to file heranswer was deemed suspended. When the trial court denied her motion todismiss, therefore, she had the balance of her period for filing an answerunder Section 4, Rule 16 within which to file the same but in no case less

than five days, computed from her receipt of the notice of denial of hermotion to dismiss.

But apart from opposing defendant’s motion to dismiss, plaintiffGarcia asked the trial court to declare Narciso in default for not filing anAnswer. Consequently, when the trial court granted Garcia’sprayer and simultaneously denied Narciso’s motion to dismiss and declaredher in default, it committed serious error. Narciso was not yet in defaultwhen the trial court denied her motion to dismiss. She still had at least fivedays within which to file her answer to the complaint.

Also Narciso had the right to file a MRof the trial court’s order denying her motion to dismiss. Norule prohibits the filing of such MR. Only after thetrial court shall have denied it does Narciso become bound to file her answerto Garcia’s complaint. And only if she did not do so was Garcia entitled tohave her declared in default.

7. Ada, Adanza et.al vs. Baylon

Facts:

This case involves the estate of Spouses Baylon Spouses Baylon were survived by their legitimate children, namely, Rita, Victoria, Dolores, Panfila ,Ramon

and herein petitioner Lilia B. Ada (Lilia). Dolores died intestate. Victoria died and was survived by her daughter, herein petitioner Luz B. Adanza.

Ramon died intestate and was survived by herein respondent Florante Baylon (Florante), his child from his first marriage, as well as by petitioner Flora Baylon, his second wife, and their legitimate children, namely, Ramon, Jr. and herein petitioners Remo, Jose, Eric, Florentino and Ma. Ruby, all surnamed Baylon.

petitioners filed with the RTC a Complaint for partition, accounting and damages against Florante, Rita and Panfila

They alleged that Spouses Baylon, during their lifetime, owned 43 parcels. After the death of Spouses Baylon, they claimed that Rita took possession of the said parcels of land and appropriated for herself the income from the same. Out of the income, she purchased two parcels of land. They averred that Rita refused to partition the lands.

During the pendency of the case, Rita, through a Deed of Donation conveyed the two lands to Florante. Rita died intestate,

Learning of the donation intervivos, petitioners filed a supplemental pleading. Said donation in favor of the respondent be rescinded in accordance w/ Article 1381(4) of the CC. And Rita was already weak and sick when said Deed of Donation was supposedly executed and, thus, could not have validly given her consent thereto

Florante and Panfila opposed the rescission of the said donation, Article 1381(4) of the CC applies only when there is already a prior judicial decree on who between the contending parties actually owned the properties under litigation.

RTC rendered decision: 1. 20 lands are co-owned and directing it to be partitioned to the heirs2. declaring a co-ownership of 10 lands owned by Rita among her heirs, 3. the donation inter vivos rescinded without prejudice to the share of Florante Baylon to the

estate of Rita and directing that the 2 lands be included in the division of the property as among her heirs

4. excluding from co-ownership the 9 lands-donation is rescissible on the ground that it was entered into by the defendant Rita without the knowledge and approval of the litigants or of competent judicial authority since the lands are subject of the case. donation was executed to prejudice the plaintiffs right to succeed to the estate of Rita.

Florante sought for reconsideration but was denied. He appealed to CA CA reversed the decision. CA held that before the petitioners may file an action for rescission, they

must first obtain a favorable judicial ruling that the two lands actually belonged to the estate of Spouses Baylon and not to Rita. Until then, the CA asserted, an action for rescission is premature. Further, rescission cannot be joined with their action for partition, accounting and damages through a mere supplemental pleading

Hence, this petition.

Issue: whether the CA erred in ruling that the donation inter vivos the two lands in favor of Florante may only be

rescinded if there is already a judicial determination that the same actually belonged to the estate of Spouses Baylon.

Ruling:

The petition is partly meritorious.

Procedural Matters:

Misjoinder of Causes of Action The actions of partition and rescission cannot be joined in a single action. Complaint filed involves two separate, distinct and independent actions – partition and rescission. First, the petitioners raised the refusal of their co-heirs, Florante, Rita and Panfila, to partition the properties which they inherited from Spouses Baylon. Second, in their supplemental pleading, the petitioners assailed the donation inter vivos

Joinder of causes of action is meant the uniting of two or more demands or rights of action in one action, the statement of more than one cause of action in a declaration. It is the union of two or more civil causes of action, each of which could be made the basis of a separate suit, in the same complaint, declaration or petition. A plaintiff may under certain circumstances join several distinct demands, controversies or rights of action in one declaration, complaint or petition. The objectives of the rule or provision are to avoid a multiplicity of suits.

The joinder shall not include special civil actions governed by special rules. Here, there was a misjoinder of causes of action. An action for partition is a special civil action governed by Rule 69 of the Rules of Court while an action for rescission is an ordinary civil action governed by the ordinary rules of civil procedure. This is to avoid confusion in determining what rules shall govern the conduct of the proceedings as well as in the determination of the presence of requisite elements of each particular cause of action

A misjoined cause of action, if not severed upon motion of a party or by the court sua sponte, may be adjudicated by the court together with the other causes of action.

Misjoinder of causes of action is not a ground for dismissal. The foregoing rule only applies if the court trying the case has jurisdiction over all of the causes of action therein notwithstanding the misjoinder of the same. If the court trying the case has no jurisdiction over a misjoined cause of action, then such misjoined cause of action has to be severed from the other causes of action, and if not so severed, any adjudication rendered by the court with respect to the same would be a nullity. Florante posed no objection, and neither did the RTC direct the severance of the petitioners’ action for rescission from their action for partition. RTC validly adjudicated the issues raised in the actions for partition and rescission filed by the petitioners.

Asserting a New Cause of Action in a Supplemental Pleading:

A supplemental pleading may raise a new cause of action as long as it has some relation to the original cause of action set forth in the original complaint.

Supplemental pleading may properly allege transactions, occurrences or events which had transpired after the filing of the pleading sought to be supplemented, even if the said supplemental facts constitute another cause of action.

The issue as to the validity of the donation inter vivos of the two lands made by Rita in favor of Florante is a new cause of action that occurred after the filing of the original complaint. However, the petitioners’ prayer for the rescission of the said donation intervivos in their supplemental pleading is germane to, and is in fact, intertwined with the cause of action in the partition . The petitioners’ supplemental pleading merely amplified the originalcause of action, on account of the gratuitous conveyance after the filing of the original complaint and prayed for additional reliefs, i.e., rescission. Indeed, the petitioners claim that the

said lots form part of the estate of Spouses Baylon, but cannot be partitioned unless the gratuitous conveyance of the same is rescinded. Thus, the principal issue raised by the petitioners in their original complaint remained the same.

Main Issue: Propriety of Recission: Rescission is a remedy to address the damage or injury caused to the contracting parties or

third persons.

Rescission is a remedy granted by law to the contracting parties and even to third persons, to secure the reparation of damages caused to them by a contract, even if it should be valid, by means of the restoration of things to their condition at the moment prior to the celebration of said contract. It is a remedy to make ineffective a contract, validly entered into and therefore obligatory under normal conditions, by reason of external causes resulting in a pecuniary prejudice to one of the contracting parties or their creditors. Contracts which are rescissible are valid contracts having all the essential requisites of a contract, but by reason of injury or damage caused to either of the parties therein or to third persons are considered defective and, thus, may be rescinded. The kinds of rescissible contracts, according to the reason for their susceptibility to rescission, are the following: first, those which are rescissible because of lesion or prejudice; second, those which are rescissible on account of fraud or bad faith;44 and third, those which, by special provisions of law,are susceptible to rescission.

CA erred in remanding the case to the RTC for the determination of ownership of lands. RTC aptly rescinded the said donation inter vivos of landspursuant to Article 1381(4) of the CC.

Contracts which refer to things subject of litigation is rescissible pursuant to Article 1381(4) of the Civil Code.

Contracts which are rescissible due to fraud or bad faith include those which involve things under litigation, if they have been entered into by the defendant without the knowledge and approval of the litigants or of ompetent judicial authority. (Art. 1381 (4))

The rescission of a contract under Article 1381(4) of the Civil Code only requires the concurrence of the following: first, the defendant, during the pendency of the case, enters into a contract which refers to the thing subject of litigation; and second, the said contract was entered into without the knowledge and approval of the litigants or of a competent judicialauthority. As long as the foregoing requisites concur, it becomes the duty ofthe court to order the rescission of the said contract.

RTC aptly ordered the rescission of the donation inter vivos of the lands in favor of Florante. The petitioners had sufficiently established the presence of the requisites for the rescission. It is undisputed that, at the time they were gratuitously conveyed by Rita, the two lands are among the properties that were the subject of the partition case then pending with the RTC. It is also undisputed that Rita, then one of the defendants in the partition case with the RTC, did not inform nor sought the approval from the petitioners or of the RTC with regard to the donation inter vivos of the said parcels of land to Florante.

Rescission under Article 1381(4) of the Civil Code is not preconditioned upon the judicial determination as to the ownership of the thing subject of litigation

The primordial purpose of Article 1381(4) of the Civil Code is to secure the possible effectivity of the impending judgment by a court with respect to the thing subject of litigation. It seeks to protect the binding effect of a court’s impending adjudication vis-à-vis the thing subject of litigation regardless of which among the contending claims therein would subsequently be upheld. Assuming arguendo that a rescissory action could only be instituted after the dispute with respect to the thing subject of litigation is judicially determined, there is the possibility that the same may had already been conveyed to third

persons acting in good faith, rendering any judicial determination with regard to the thing subject of litigation illusory.

Even if the donation inter vivos is validly rescinded, a determination as to the ownership of the subject parcels of land is still necessary.

The partition proceedings before the RTC only covers the properties co-owned by the parties therein in their respective capacity as the surviving heirs of Spouses Baylon. Hence, the authority of the RTC to issue an order of partition in the proceedings before it only affects those properties which actually belonged to the estate of Spouses Baylon. This regard,if the two lands, as claimed by Florante, are indeed exclusively owned by Rita,then the said parcels of land may not be partitioned simultaneously with the other properties subject of the partition case before the RTC. In such case, although the parties in the case before the RTC are still co-owners of the said parcels of land, the RTC would not have the authority to direct the partition of the said parcels of land as the proceedings before it is only concerned with the estate of Spouses Baylon