2nd Exam Case Digest

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.


2/31

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.


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."


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?


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.


6/31

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


7/31

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.


8/31

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.


9/31

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.


10/31


11/31

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.
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12/31

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.


13/31


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.


14/31


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.


15/31


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.


16/31

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.


17/31

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.


18/31

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#_ftn13


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#fnt12


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.


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.htm


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

2nd Exam Case Digest

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