EN BANC

LA MALLORCA, petitioner, vs. HONORABLE COURT OF APPEALS,

MARIANO BELTRAN, ET AL., respondents. [G.R. No. L-20761. July 27,
1966.]
G. E. Yabut, R. Monterey and M. C. Lagman for
Garcia for respondents.

petitioner.

Achmed

1. COMMON CARRIERS; CARRIER - PASSENGER RELATION CONTINUES

UNTIL PASSENGER HAS REASONABLE TIME TO LEAVE CARRIER'S
PREMISES. The relation of carrier and passenger does not cease at
the moment the passenger alights from the carrier's vehicle at a place
selected by the carrier at the point of destination, but continues until
the passenger has had a reasonable time or a reasonable opportunity
to leave the carrier's premises (Ormond vs. Hayes, 60 Tex. 180, cited in
10 C.J. 626).
2. ID.; ID.; "REASONABLE TIME" CONSTRUED. What is a reasonable
time or a reasonable delay is to be determined from all the
circumstances. Thus, a person who, after alighting from a train, walks
along the station platform, is considered still a passenger (Keefe vs.
Boston, etc. R. Co., 142 Mass. 251, 7 N.E. 874). So also, where a
passenger has alighted at his destination and is proceeding by the
usual way to leave the company's premises, but before actually doing
so is halted by the report that his brother, a fellow passenger, has been
shot, and he in good faith and without intent of engaging in the
difficulty, returns to relieve his brother, he is deemed reasonably and
necessarily delayed and thus continues to be a passenger entitled as
such to the protection of the railroad and company and its agents
(Layne vs. Chesapeake, etc., R. Co., 68 W. Va. 213, 69 S.E. 700, 31
L.R.A., [N.S.] 414).
3. ID.; ID.; CARRIER'S RESPONSIBILITY FOR NEGLIGENCE; CASE AT BAR.
In the present case, the father returned to the bus to get one of his
baggages which was not unloaded when he end other members of his
family alighted from the bus. The victim, one of his minor daughters,
must have followed her father. However, although the father was still
on the running board of the bus awaiting for the conductor to hand to
him the bag or bayong, the bus started to run, so that even he (the
father) had to jump down from the moving vehicle. It was at this
instance that the child, who must be near the bus, was run over and
killed. Held: In the circumstances, it cannot be claimed that the
carrier's agent had exercised the "utmost diligence"of a "very cautious
person" required by Article 1755 of the Civil Code to be observed by a

common carrier in the discharge ofits obligation to transport safely its

passengers. In the first place, the driver, although stopping the bus,
did not put off the engine. Secondly, he started to run the bus even
before the bus conductor gave him the signal to go and while the latter
was
still
unloading
a
baggage of some
passengers.
The
presence of said passengers near the bus was not unreasonable and
they are, therefore, to be considered still as passengers of the carrier,
entitled to the protection under their contract of carriage.
4. ID.; ID.; ID.; AVERMENT FOR QUASI-DELICT, ALTHOUGH
INCOMPATIBLE
WITH
CLAIM
UNDER
CONTRACT OF CARRIAGE,
PERMISSIBLE. The inclusion of the averment for quasi-delict in
appellee's complaint in the court a quo, while incompatible with the
other claim under the contract of carriage, is permissible under Section
2, Rule 8 of the new Rules of Court, which allows a plaintiff to allege
causes of action in the alternative, be they compatible with each other
or not, to the end that the real matter in controversy may be resolved
and determined (Nelayan, et al. vs. Nelayan, et al., 109 Phil., 183).
5. ID.; ID.; ID.; ID.; EFFECT OF PRESENTATION OF PROOF OF CARRIER'S
NEGLIGENCE; CASE AT BAR. - The presentation of proofof the
negligence of its employee gave rise to the presumption that the
defendant employer did not exercise the diligence ofa good
father of the family in the selection and supervision of its employees.
This presumption not having been overcome, the employer must be
adjudged pecuniarily liable for the death of the passenger.
6. ID.; ID.; ID.; ID.; ID.; SUFFICIENT ALLEGATION IN THE COMPLAINT;
CASE AT BAR. The allegation in the complaint to the effect that "the
death of Raquel Beltran, plaintiffs' daughter, was caused by the
negligence and want of exercise of the utmost diligence of a very
cautious person on the part of the defendants and their agent,"
sufficiently pleads the culpa or negligence upon which the claim was
predicated. This allegation was proved when it was established during
the trial that the driver, even before receiving the proper signal from
the conductor, and while there were still persons on the running
board of the bus and near it, started to run off the vehicle.
7. APPEALS; WHAT CAN BE PASSED UPON ON APPEAL; CASE AT BAR.
Generally, the appellate court can only pass upon and consider
questions or issues raised and argued in appellant's brief. In the case
at bar, plaintiffs did not appeal from that portion of the judgment of the
trial court awarding them only P3,000.00 as damages for the
death of their daughter. Neither did they point out in their brief in

the Court of Appeals that the award was inadequate, or that the
inclusion of that figure was merely a clerical error, in order that the
matter may be treated as an exception to the general rule (Section 7,
Rule 51, new Rules of Court). The Court of Appeals therefore erred in
raising the amount of the award.

given the driver the customary signal to start, since said conductor
was still attending to the baggage left behind by Mariano Beltran.
Incidentally, when the bus was again placed into a complete stop,
it had travelled about ten meters from the point where the
plaintiffs had gotten off.

BARRERA, J .:
La Mallorca seeks the review of the decision of the Court of Appeals in
CA- G. R. No. 23267-R, holding it liable for quasi-delict and ordering it
to pay to respondents Mariano Beltran, et al. P6,000.00 for the
death of his minor daughter Raquel Beltran, plus P400.00 as actual
damages.

"Sensing that the bus was again in motion, Mariano Beltran

immediately jumped from the running board without getting
his bayong from the conductor. He landed on the side of the road
almost in front of the shaded place where he left his wife and
children. At that precise time, he saw people beginning to gather
around the body of the child lying prostrate on the ground, her
skull, crushed, and without life. The child was none other than his
daughter Raquel, who was run over by the bus in which she rode
earlier together with her parents.

The facts of the case, as found by the Court of Appeals, briefly are:
"On December 20, 1953, at about noontime, plaintiffs, husband
and wife, together with their minor daughters, namely Milagros, 13
years old, Raquel, about 4-1/2 years old, and Fe, over 2 years old,
boarded the Pambusco Bus No. 352, bearing plate TPU No. 757
(1953 Pampanga), owned and operated by the defendant, at San
Fernando, Pampanga, bound for Anao, Mexico, Pampanga. At the
time, they were carrying with them four pieces of baggages
containing their personal belongings. The conductor of the bus who
happened to be a half-brother of plaintiff Mariano Beltran, issued
three tickets (Exhs. A, B, & C) covering the full fares of the plaintiff
and their eldest child, Milagros. No fare was charged on Raquel and
Fe, since both were below the height at which fare is charged in
accordance with the appellant's rules and regulations.
"After about an hour's trip, the bus reached Anao, whereat it
stopped to allow the passengers bound therefor, among whom
were the plaintiffs and their children to get off. With respect to the
group of the plaintiffs, Mariano Beltran, then carrying some of their
baggages, was the first to get down the bus, followed by his wife
and his children. Mariano led his companions to a shaded spot on
the left pedestrians side of the road about four or five meters away
from the vehicle. Afterwards, he returned to the bus in controversy
to get his other bayong, which he had left behind, but in so doing,
his daughter Raquel followed him unnoticed by her father. While
said Mariano Beltran was on the running board of the bus waiting
for the conductor to hand him his bayong which he left under
one of its seats near the door; the bus, whose motor was not shut
off while unloading, suddenly started moving forward, evidently to
resume its trip, notwithstanding the fact that the conductor has not

"For the death of their said child, the plaintiffs commenced the
present suit against the defendant seeking to recover from the
latter an aggregate amount of P6,000 to cover moral damages and
actual damages sustained as a result thereof and attorney's fees.
After trial on the merits the court below rendered the judgment in
question."
On the basis of these facts, the trial court found defendant liable for
breach of contract of carriage and sentenced it to pay P3,000.00 for
the death of the child and P400.00 as compensatory damages
representing burial expenses and costs. LLpr
On appeal to the Court of Appeals, La Mallorca claimed that there could
not be a breach of contract in the case, for the reason that when the
child met her death, she was no longer a passenger of the bus involved
in the incident and, therefore, the contract of carriage had already
terminated. Although the Court of Appeals sustained this theory, it
nevertheless found the defendant-appellant guilty of quasi- delict and
held the latter liable for damages, for the negligence of its driver, in
accordance
with
Article
2180 of the
Civil
Code.
And,
the Court of Appeals did not only find the petitioner liable, but
increased the damages awarded the plaintiffs-appellees to P6,000.00,
instead of P3,000.00 granted by the trial court.
In
its
brief
now
before
us,
La Mallorca contends
that
the Court of Appeals erred (1) in holding it liable for quasi- delict,
considering
that
respondents'
complaint
was
one
for
breach of contract, and (2) in raising the award of damages from

P3,000.00 to P6,000.00 although respondents did not appeal from the

decision of the lower court.
Under the facts as found by the Court of Appeals we have to sustain
the judgment holding petitioner liable for damages for the death of the
child, Raquel Beltran. It may be pointed out that although it is true that
respondent Mariano Beltran, his wife, and their children (including the
deceased child) had alighted from the bus at a place designated for
disembarking or unloading of passengers, it was also established that
the father had to return to the vehicle (which was still at a stop) to get
one of his bags or bayong that was left under one of the seats of the
bus. There can be no controversy that as far as the father is
concerned, when he returned to the bus for his bayong which was not
unloaded, the relation of passenger and carrier between him and the
petitioner remained subsisting. For, the relation of carrier and
passenger does not necessarily cease where the latter, after alighting
from the car, aids the carrier's servant or employee in removing his
baggage from the car. 1 The issue to be determined here is whether as
to the child, who was already led by the father to a place about 5
meters away from the bus, the liability of the carrier for her safety
under the contract of carriage also persisted. LexLib
It has been recognized as a rule that the relation of carrier and
passenger does not cease at the moment the passenger alights from
the carrier's vehicle at a place selected by the carrier at the
point of destination, but continues until the passenger has had a
reasonable time or a reasonable opportunity to leave the carrier's
premises. And, what is a reasonable time or a reasonable delay within
this rule is to be determined from all the circumstances. Thus, a person
who, after alighting from a train, walks along the station platform is
considered still a passenger. 2 So also, where a passenger has alighted
at his destination and is proceeding by the usual way to leave the
company's premises, but before actually doing so is halted by the
report that his brother, a fellow passenger, has been shot, and he in
good faith and without intent of engaging in the difficulty, returns to
relieve his brother, he is deemed reasonably and necessarily delayed
and thus continues to be a passenger entitled as such to the
protection of the railroad and company and its agents. 3
In the present case, the father returned to the bus to get one of his
baggages which was not unloaded when they alighted from the bus.
Raquel, the child that she was, must have followed the father.
However, although the father was still on the running board of the bus
awaiting for the conductor to hand him the bag or bayong, the bus

started to run, so that even he (the father) had to jump down from the
moving vehicle. It was at this instance that the child, who must be near
the bus, was run over and killed. In the circumstances, it cannot be
claimed that the carrier's agent had exercised the "utmost
diligence" ofa "very cautious person" required by Article 1755 of the
Civil Code to be observed by a common carrier in the discharge of its
obligation to transport safely its passengers. In the first place, the
driver, although stopping the bus, nevertheless did not put off the
engine. Secondly, he started to run the bus even before the bus
conductor gave him the signal to go and while the latter was still
unloading part of the baggages of the passengers Mariano Beltran and
family. The presence of said passengers near the bus was not
unreasonable and they are, therefore, to be considered still as
passengers of the carrier, entitled to the protection under their
contract of carriage.
But even assuming arguendo that the contract of carriage has already
terminated, herein petitioner can be held liable for the negligence of its
driver, as ruled by the Court of Appeals, pursuant to Article 2180 of the
Civil Code. Paragraph 7 of the complaint, which reads
"That aside from the aforesaid breach of contract, the
death of Raquel Beltran, plaintiff's daughter, was caused by the
negligence and want of uxorious of the utmost diligence of a very
cautious person on the part of the defendants and their agent,
necessary to transport plaintiffs and their daughter safely as far as
human and care and foresight can provide in the operation of their
vehicle."
is clearly an allegation for quasi-delict. The inclusion of this averment
for quasi-delict, while incompatible with the other claim under the
contract of carriage, is permissible under Section 2 of Rule 8 of the
New Rules of Court, which allows a plaintiff to allege causes of action in
the alternative, be they compatible with each other or not, to the end
that the real matter in controversy may be resolved and determined. 4
The plaintiffs sufficiently pleaded the culpa or negligence upon which
the claim was predicated when it was alleged in the complaint that
"the death of Raquel Beltran, plaintiffs' daughter, was caused by the
negligence and want of exercise of the utmost diligence of a very
cautious person on the part of the defendants and their agent." This
allegation was also proved when it was established during the trial that
the driver, even before receiving the proper signal from the conductor,
and while there were still persons on the running board of the bus and

near it, started to run off the vehicle. The presentation of proofof the
negligence of its employee gave rise to the presumption that the
defendant employer did not exercise the diligence ofa good
father of the family in the selection and supervision of its employees.
And this presumption, as the Court of Appealsfound, petitioner had
failed to overcome. Consequently, petitioner must be adjudged
pecuniarily liable for the death of the child Raquel Beltran.

Quezon City another action for damages against petitioner, which the
latter moved to dismiss on the ground of litis pendencia and forum
shopping to no avail. The same fate awaited petitioner before the
Court of Appeals which dismissed his special civil action
for certiorari and prohibition due to the failure of petitioner to file a
motion for reconsideration of the RTC order. Hence, petitioner found its
way to the Supreme Court on petition for review oncertiorari. CaEATI

The increase of the award of damages from P3,000.00 to P6,000.00 by

the Court of Appeals, however, cannot be sustained. Generally, the
appellate court can only pass upon and consider questions or issues
raised and argued in appellant's brief. Plaintiffs did not appeal from
that portion of the judgment of the trial court awarding them only
P3,000.00 damages for the death of their daughter. Neither does it
appear that, as appellees in the Court of Appeals, plaintiffs have
pointed out in their brief the inadequacy of the award, or that the
inclusion of the figure P3,000.00 was merely a clerical error, in order
that the matter may be treated as an exception to the general
rule. 5 Herein
petitioner's
contention,
therefore,
that
the Court ofAppeals committed error in raising the amount of the
award for damages is, evidently, meritorious. cdrep
WHEREFORE, the decision of the Court of Appeals is hereby modified
by sentencing the petitioner to pay to the respondents Mariano
Beltran, et al., the sum of P3,000.00 for the death of the child, Raquel
Beltran, and the amount of P400.00 as actual damages. No costs in
this instance. So ordered.
Concepcion, C.J ., J.B.L., Reyes, Dizon, Regala, J.P. Bengzon, Zaldivar,
Sanchez and Castro, JJ ., concur. Makalintal, J., concurs in the result.
||SECOND DIVISION
PROGRESSIVE
DEVELOPMENT
CORPORATION,
INC., petitioner, vs. COURT OF APPEALS and WESTIN
SEAFOOD MARKET, INC., respondents. [G.R. No. 123555.
January 22, 1999.]
Angara Abello Concepcion Regala for petitioner. Tomas Carmelo T.
Araneta for private respondent.

The Supreme Court found merit to the petition. The Court held that
while generally a motion for reconsideration must first be filed before
resorting to certiorari in order to give the lower court an opportunity to
correct the errors imputed to it, this rule admits of exceptions and is
not intended to be applied without considering the circumstances of
the case. The filing of the motion for reconsideration before availing of
the remedy of certiorari is not sine qua non when the issue raised is
one purely of law, or where the error is patent or the disputed order is
void, or the questions raised on certiorari are those already squarely
presented to and passed upon by the lower court. In its motion for
dismissal of the action for damages with the RTC, petitioner raised the
ground that another action for forcible entry was pending at the METC
between the same parties involving the same matter and cause of
action. Outrightly rejected by the RTC, the same issue was elevated by
petitioner oncertiorari before the Court of Appeals. Clearly, under the
prevailing circumstance, any motion for reconsideration of the trial
court would have been a pointless exercise.

Private respondent, Westin Seafood Market, Inc., failed to pay its

rentals amounting to P8,608,284.66. Admittedly, non-payment of
rentals constituted breach of their contract; thus, pursuant to the
express authority granted petitioner under the lease agreement,
petitioner repossessed the leased premises. This prompted private
respondent to file a complaint against petitioner for forcible entry with
damages before the MTC of Quezon City. This case was still pending
before the MTC when private respondent instituted before the RTC of

The highest Court also directed the RTC of Quezon City to dismiss the
complaint for damages filed before it by private respondent on the
ground of forum shopping and for unduly splitting a single cause of
action which run counter to the rule against multiplicity of suits.
1. REMEDIAL LAW; SPECIAL CIVIL ACTION; CERTIORARI; MOTION FOR
RECONSIDERATION MUST BE FILED BEFORE RESORTING THERETO;
EXCEPTIONS. While generally a motion for reconsideration first be
filed before resorting to certiorariin order to give the lower court an
opportunity to correct the errors imputed to it, this rule admits of
exceptions and is not intended to be applied without considering the
circumstances of the case. The filing of the motion for reconsideration
before availing of the remedy of certiorari is not sine que non when the
issue raised is one purely of law, or where the error is patent or the
disputed order is void or the questions raised on certiorari are the
same as those already squarely presented to and passed upon by the
lower court. In its motion for dismissal of the action for damages with
the RTC petitioner raised the ground that another action for forcible
entry was pending at the MeTC between the same parties involving the

same matter and cause of action. Outrightly rejected by the RTC, the
same issue was elevated by petitioner on certiorari before the Court of
Appeals. Clearly, under the prevailing circumstance, any motion for
reconsideration of the trial court would have been a pointless exercise.
2. ID.; ID.; FORCIBLE ENTRY OR UNLAWFUL DETAINER; NO CLAIM FOR
DAMAGES ARISING THERETO MAY BE FILED SEPARATELY AND
INDEPENDENTLY OF CLAIM FOR RESTORATION OF POSSESSION.
Section 1 of Rule 70 of the Rules of Court provides that any person
deprived of the possession of any land or building by force,
intimidation, threat, strategy or stealth, or against whom the
possession of any land or building is unlawfully withheld, may bring an
action in the proper Municipal Trial Court against the person or persons
unlawfully withholding or depriving of possession, together with
damages and costs. The mandate under this rule is categorical: that all
cases for forcible entry or unlawful detainer shall be filed before the
Municipal Trial Court which shall include not only the plea for
restoration of possession but also all claims for damages and costs
arising therefrom. Otherwise expressed, no claim for damages arising
out of forcible entry or unlawful detainer may be filed separately and
independently of the claim for restoration of possession.
3. ID.; CIVIL PROCEDURE; RES JUDICATA; REQUISITES. Res
adjudicata requires that there must be between the action sought to be
dismissed and the other action the following elements: (a) identity of
parties or at least such as representing the same interest in both
actions; (b) identity of rights asserted and relief prayed for, the relief
being founded on the same facts; and, (c) the identity in the two (2)
preceding particulars should be such that any judgment which may be
rendered on the other action will, regardless of which party is
successful, amount to res adjudicata in the action under consideration.
4. ID.; ID.; CAUSE OF ACTION; CIRCUMSTANCES OBTAINING IN CASE AT
BAR AROSE FROM ONLY ONE CAUSE OF ACTION. It is likewise basic
under Sec. 3 of Rule 2 of the Revised Rules of Court, as amended, that
a party may not institute more than one suit for a single cause of
action. Under Sec. 4 of the same Rule, if two or more suits are
instituted on the basis of the same cause of action, the filing of one or
a judgment upon the merits in any one is available as a ground for the
dismissal of the other or others. "Cause of action" is defined by Sec. 2
of Rule 2 as the act of omission by which a party violates a right of
another. These premises obtaining, there is no question at all that
private respondent's cause of action in the forcible entry case and in
the suit for damages is the alleged illegal retaking of possession of the

leased premises by the lessor, petitioner herein, from which all legal
reliefs arise. Simply stated, the restoration of possession and demand
for actual damages in the case before the MeTC and the demand for
damages with the RTC both arise from the same cause of action, i.e.,
the forcible entry by petitioner into the leased premises.
5. ID.; ID.; MULTIPLICITY OF SUITS; CASE AT BAR RUNS COUNTER
THERETO. A comparative study of the two (2) complaints filed by
private respondent against petitioner before the two (2) trial courts
shows that not only are the elements of res adjudicata present, at least
insofar as the claim for actual and compensatory damages is
concerned, but also that the claim for damages moral and
exemplary in addition to actual and compensatory constitutes
splitting a single cause of action. Since this runs counter to the rule
against multiplicity of suits, the dismissal of the second action
becomes imperative.
6. ID.; ID.; SPLITTING A SINGLE CAUSE OF ACTION; PURPOSE IS TO
PROTECT DEFENDANT FROM UNNECESSARY VEXATION. A claim
cannot be divided in such a way that a part of the amount of damages
may be recovered in one case and the rest, in another. In Bachrach v.
Icarangal we explained that the rule was aimed at preventing repeated
litigations between the same parties in regard to the same subject of
the controversy and to protect the defendant from unnecessary
vexation.Nemo debet bis vexari pro una et eadem cause.
7. ID.; ID.; FORUM SHOPPING COMMITTED IN CASE AT BAR. The
records ineluctably show that the complaint lodged by private
respondent with the Regional Trial Court of Quezon City contained no
certification of non-forum shopping. When petitioner filed a motion to
dismiss the case raising among others the ground of forum shopping it
pointed out the absence of the required certification. The amended
complaint, as well as the second and third amended complaints,
attempted to rectify the error by invariably stating that there was no
other action pending between the parties involving the same cause of
action although there was actually a forcible entry case pending before
the MTC of Quezon City. By its admission of a pending forcible entry
case, it is obvious that private respondent was indulging in forum
shopping. While private respondent conveniently failed to inform the
RTC that it had likewise sought damages in the MTC on the basis of the
same forcible entry, the fact remains that it precisely did so, which
stratagem was being duplicated in the second case. This is a
compelling reason to dismiss the second case. IaHSCc
BELLOSILLO, J p:

May the lessee which instituted before the Metropolitan Trial Court
an action for forcible entry with damages against its lessor file a
separate suit with the Regional Trial Court against the same lessor
for moral and exemplary damages plus actual and compensatory
damages based on the same forcible entry? Cdpr
On grounds of litis pendencia and forum-shopping, petitioner
invokes established jurisprudence that a party cannot by varying
the form of action or adopting a different method of presenting his
case evade the principle that the same cause of action shall not be
litigated twice between the same parties or their
privies. 1 Petitioner therefore prays for reversal of the decision of
the Court of Appeals dated 27 May 1995, as well as its Resolution
dated 17 January 1996 denying reconsideration, which upheld the
denial by the Regional Trial Court of petitioner's motion to dismiss
private respondent's damage suit.
The antecedents: On 27 May 1991 petitioner leased to private
respondent Westin Seafood Market, Inc., a parcel of land with a
commercial building thereon located at Araneta Center, Cubao,
Quezon City, for a period of nine (9) years and three (3) months,
i.e., from 2 January 1989 to 30 April 1998, with a monthly rental of
approximately P600,000.00. The contract contained, among
others, the following pertinent terms and conditions:
EFFECT OF VIOLATIONS
25. LESSEE hereby agrees that all the provisions contained in
this Contract shall be deemed as conditions, as well as
covenants, and that this Contract shall be automatically
terminated and cancelled without resorting to court action
should LESSEE violate any or all said conditions, including the
payment of Rent, CUSA and other charges indicated in the FLP
when due within the time herein stipulated and in any such
cases, LESSEE hereby irrevocably appoints LESSOR, its
authorized agents, employees and/or representatives as his
duly authorized attorney-in-fact, even after the termination,
expiration or cancellation of this Contract, with full power and
authority to open, enter, repossess, secure, enclose, fence and
otherwise take full and complete physical possession and
control of the leased premises and its contents without
resorting to court action and/or to summarily disconnect
electrical and/or water services thereof, and that LESSEE
hereby irrevocably empowers LESSOR, his authorized agents,
employees and/or representatives to take inventory and

possession of whatever equipment, furniture, articles,

merchandise, appliances, etc., found therein belonging to
LESSEE, consignors and/or to any other persons and to place
the same in LESSOR's warehouse or any other place at
LESSOR's discretion for safekeeping, charging LESSEE the
corresponding storage fees therefor; that in case LESSEE fails
to claim said equipment, furniture, articles, merchandise,
appliances, etc. from storage and simultaneously liquidate any
liability with LESSOR within seven (7) days from date of said
transfer to LESSOR's warehouse, LESSOR is likewise hereby
expressly authorized and empowered by LESSEE to dispose of
said property/properties in a public sale through a Notary
Public of LESSOR's choice and to apply the proceeds thereof to
whatever liability and/or indebtedness LESSEE may have to
LESSOR plus reasonable expenses for the same, including
storage fees, and the balance, if any, shall be turned over to
LESSEE; that LESSEE hereby expressly agrees that any or all
acts performed by LESSOR, his authorized agents, employees
and/or representatives under the provisions of this Section may
not be the subject of any petition for a Writ of Preliminary
Injunction or Mandatory Injunction in court, and that LESSOR
and/or
his
authorized
agents,
employees,
and/or
representatives shall be free from any civil and/or criminal
liability or responsibility whatsoever therefor.
TERMINATION OF LEASE
26. Upon the automatic termination of this lease contract, as
the case may be, LESSEE shall immediately vacate and
redeliver physical possession of the leased premises, including
the keys appertaining thereto, to LESSOR in good, clean and
sanitary condition, reasonable wear and tear excepted, devoid
of all occupants, equipment, furniture, articles, merchandise,
etc., belonging to LESSEE or to any other person except those
belonging to LESSOR; that should LESSEE fail to comply with
this provision, LESSOR is hereby given the same rights and
power to proceed against LESSEE as expressly granted in the
immediately preceding section.
Private respondent failed to pay rentals despite several demands by
petitioner. As of 19 October 1992 the arrearages amounted to
P8,608,284.66. Admittedly, non-payment of rentals constituted
breach of their contract; thus, pursuant to the express authority
granted petitioner under the above-quoted Secs. 25 and 26 of the
lease agreement, petitioner on 31 October 1992 repossessed the

leased premises, inventoried the movable properties found within

and owned by private respondent and scheduled public auction for
the sale of the movables on 19 August 1993 with notice to private
respondent.
On 26 November 1992 private respondent filed with the Metropolitan
Trial Court of Quezon City a complaint against petitioner for forcible
entry with damages and a prayer for a temporary restraining order
and/or writ of preliminary injunction. 2 The case was raffled to
Branch 40 presided over by Judge Guillermo L. Loja Jr. who issued a
temporary restraining order enjoining petitioner from selling private
respondent's properties at a public auction.
On 9 December 1992 Judge Loja inhibited himself from trying the
case and directed its transfer to Branch 34 presided over by Judge
Joselito SD Generoso. Soon after, petitioner filed an urgent motion for
the inhibition of Judge Generoso and the immediate reraffle of the
case arguing that the summary transfer of the case to Judge
Generoso was irregular as it was not done by raffle.
The motion was granted and the case went to Branch 36 presided
over by Judge Francisco D. Villanueva. Thereafter, on 22 December
1992, at the continuation of the hearing on the issuance of a writ
preliminary mandatory injunction, the parties agreed, among others,
on the following: (a) private respondent would deposit with the
Philippine Commercial and Industrial Bank in the name of the
Metropolitan Trial Court, Branch 36, the amount of P8,000,000.00 to
guarantee the payment of its back rentals; (b) petitioner would defer
the sale of the personal properties of the Westin Seafood Market,
Inc., until a final settlement of the case had been arrived at; (c)
petitioner shall allow private respondent to retrieve all the perishable
goods from inside the leased premises like frozen meat, vegetables
and fish, all properly receipted for; (d) petitioner shall allow three (3)
maintenance personnel of private respondent to enter the premises
at reasonable working hours to maintain the restaurant equipment;
and (e) the parties shall negotiate for the restoration of the premises
to private respondent, and if no settlement be arrived at on or before
January 8, 1993, the hearing on the merits of the case shall proceed
and the disposition of the amount deposited representing the rental
arrearages shall be left to the discretion of the court.
This agreement was incorporated in the order of the court dated 22
December 1992 3 which in effect terminated for all intents and
purposes the incident on the issuance of a preliminary writ of
injunction.

Private respondent did not comply with its undertaking to deposit

with the designated bank the amount representing its back rentals.
Instead, with the forcible entry case still pending with the MeTC,
private respondent instituted on 9 June 1993 another action for
damages against petitioner with the Regional Trial Court of Quezon
City. The case was raffled to Branch 101 presided over by Judge
Pedro T. Santiago. 4
Petitioner filed a motion to dismiss the damage suit on the ground
of litis pendencia and forum shopping. On 2 July 1993, instead of
ruling on the motion, Judge Santiago issued an order archiving the
case pending the outcome of the forcible entry case being heard at
the MeTC for the reason that "the damages is (sic) principally
anchored on whether or not the defendants (petitioner herein) have
committed forcible entry." 5 On 2 August 1993 petitioner moved for
reconsideration of the order and reiterated its motion to dismiss the
suit for damages.
Before petitioner's motion to dismiss could be resolved, private
respondent filed with the RTC on 18 August 1993 an amended
complaint for damages. On 14 September 1993 it also filed
an Urgent Ex-Parte Motion for the Issuance of a Temporary
Restraining Order and Motion for the Grant of a Preliminary
Prohibitory and Preliminary Mandatory Injunction. On the very same
day, Judge Santiago issued an order (a) denying petitioner's motion
to dismiss, (b) admitting private respondent's amended complaint,
and (c) granting private respondent's application for a temporary
restraining order against petitioner.
Thus, petitioner filed with the Court of Appeals a special civil action
for certiorari and prohibition on the ground that Judge Santiago acted
in excess of his jurisdiction and/or committed grave abuse of
discretion amounting to lack of jurisdiction in admitting the amended
complaint of private respondent and issuing a restraining order
against petitioner; in allowing private respondent to engage in forum
shopping; and, taking cognizance of the action for damages despite
lack of jurisdiction. 6
But the Court of Appeals dismissed the petition due to the failure of
petitioner to file a motion for reconsideration of Judge Santiago's
order of 14 September 1993 which, it explained, was a prerequisite
to the institution of a petition forcertiorari and prohibition. It also
found that the elements of litis pendencia were lacking to justify the

dismissal of the action for damages with the RTC because despite the
pendency of the forcible entry case with the MeTC the only damages
recoverable thereat were those caused by the loss of the use and
occupation of the property and not the kind of damages being
claimed before the RTC which had no direct relation to loss of
material possession. It clarified that since the damages prayed for in
the amended complaint with the RTC were those caused by the
alleged high-handed manner with which petitioner reacquired
possession of the leased premises and the sale of private
respondent's movables found therein, the RTC and not the MeTC had
jurisdiction over the action of damages. 7
Petitioner, aggrieved by the decision of the appellate court, filed the
instant petition for review on certiorari under Rule 45 of the Rules of
Court alleging that it erred in (a) finding that petitioner failed to avail
of its plain, speedy and adequate remedy of a prior motion for
reconsideration with the RTC; (b) ruling that the trial judge did not
act with grave abuse of discretion in taking cognizance of the action
for damages and injunction despite the pendency of the forcible
entry case with the MeTC; and, (c) ruling that private respondent did
not commit forum shopping since the causes of action before the RTC
and MeTC were not identical with each other.
There is merit in the petition. While generally a motion for
reconsideration must first be filed before resorting tocertiorari in
order to give the lower court an opportunity to correct the errors
imputed to it 8 this rule admits of exceptions and is not intended to
be applied without considering the circumstances of the case. 9 The
filing of the motion for reconsideration before availing of the remedy
of certiorari is not sine qua non when the issue raised is one purely of
law,10 or where the error is patent or the disputed order is
void, 11 or the questions raised on certiorari are the same as those
already squarely presented to and passed upon by the lower court.
In its motion for dismissal of the action for damages with the RTC
petitioner raised the ground that another action for forcible entry was
pending at the MeTC between the same parties involving the same
matter and cause of action. Outrightly rejected by the RTC, the same
issue was elevated by petitioner on certiorari before the Court of
Appeals. Clearly, under the prevailing circumstance, any motion for
reconsideration of the trial court would have been a pointless
exercise.12

We now turn to the issue of whether an action for damages filed with
the Regional Trial Court by the lessee against the lessor should be
dismissed on the ground of pendency of another action for forcible
entry and damages earlier filed by the same lessee against the same
lessor before the Metropolitan Trial Court.
Section 1 of Rule 70 of the Rules of Court provides that any person
deprived of the possession of any land or building by force,
intimidation, threat, strategy or stealth, or against whom the
possession of any land or building is unlawfully withheld, may bring
an action in the proper Municipal Trial Court against the person or
persons unlawfully withholding or depriving of possession, together
with damages and costs. The mandate under this rule is categorical:
that all cases for forcible entry or unlawful detainer shall be filed
before the Municipal Trial Court which shall include not only the plea
for restoration of possession but also all claims for damages and
costs arising therefrom. Otherwise expressed, no claim for damages
arising out of forcible entry or unlawful detainer may be filed
separately and independently of the claim for restoration of
possession.
This is consistent with the principle laid down in Sec. 1, par (e), of
Rule 16 of the Rules of Court which states that the pendency of
another action between the same parties for the same cause is a
ground for dismissal of an action. Res adjudicata requires that there
must be between the action sought to be dismissed and the other
action the following elements: (a) identity of parties or at least such
as representing the same interest in both actions; (b) identity of
rights asserted and relief prayed for, the relief being founded on the
same facts; and, (c) the identity in the two (2) preceding particulars
should be such that any judgment which may be rendered on the
other action will, regardless of which party is successful, amount
to res adjudicata in the action under consideration. 13
It is likewise basic under Sec. 3 of Rule 2 of the Revised Rules of
Court, as amended, that a party may not institute more than one suit
for a single cause of action. Under Sec. 4 of the same Rule, if two or
more suits are instituted on the basis of the same cause of action,
the filing of one or a judgment upon the merits in any one is
available as a ground for the dismissal of the other or others. "Cause
of action" is defined by Sec. 2 of Rule 2 as the act of omission by
which a party violates a right of another. 14 These premises
obtaining, there is no question at all that private respondent's cause
of action in the forcible entry case and in the suit for damages is the
alleged illegal retaking of possession of the leased premises by the

lessor, petitioner herein, from which all legal reliefs arise. Simply
stated, the restoration of possession and demand for actual damages
in the case before the MeTC and the demand for damages with the
RTC both arise from the same cause of action, i.e., the forcible entry
by petitioner into the leased premises.

3.04 Thus, defendants' act of unlawfully evicting out plaintiff

from the Subject Premises it is leasing from defendant PDC and
depriving it of possession thereof through the use of force,
threat, strategy and intimidation should be condemned and
declared illegal for being contrary to public order and policy.

A comparative study of the two (2) complaints filed by private

respondent against petitioner before the two (2) trial courts shows
that not only are the elements of res adjudicata present, at least
insofar as the claim for actual and compensatory damages is
concerned, but also that the claim for damages moral and
exemplary in addition to actual and compensatory constitutes
splitting a single cause of action. Since this runs counter to the rule
against multiplicity of suits, the dismissal of the second action
becomes imperative. cdtai

3.05 Consequently, defendants should be enjoined from

continuing with their illegal acts and be ordered to vacate the
Subject Premises and restore possession thereof, together with
its contents, to plaintiff.
xxx xxx xxx
4.07 Considering that defendants' act of forcibly grabbing
possession of the Subject Premises from plaintiff is illegal and
null and void, defendant should be adjudged liable to plaintiff
for all the aforedescribed damages which plaintiff incurred as a
result thereof.

The complaint for forcible entry contains the following pertinent

allegations
2.01 On 02 January 1989, plaintiff entered into a contract of
lease with defendant PDC over a property designated as
Ground Floor, Seafood Market (hereinafter "Subject Premises")
situated at the corner of EDSA corner MacArthur Street,
Araneta Center, Cubao, Quezon City, for a period of ten (10)
years from 02 January 1989 to 30 April 1998.
2.02 Immediately after having acquired actual physical
possession of the Subject Premises, plaintiff established and
now operates thereon the now famous Seafood Market
Restaurant. Since then, plaintiff had been in actual, continuous,
and peaceful physical possession of the Subject Premises until
31 October 1992.
xxx xxx xxx
3.02 Plaintiff, being the lessee of the Subject Premises, is
entitled to the peaceful occupation and enjoyment of the
Subject Premises to the exclusion of all others, including
defendants herein.
3.03 Defendants' resort to strong arms tactics to forcibly wrest
possession of the Subject Premises from plaintiff and maintain
possession thereof through the use of force, threat, strategy
and intimidation by the use of superior number of men and
arms amounts to the taking of the law into their own hands.

The amended complaint for damages filed by private respondent

alleges basically the same factual circumstances and issues as bases
for the relief prayed for, to wit:
4. On May 28, 1991, plaintiff and defendant PDC entered into a
Contract of Lease for a period of ten years or from January 2,
1989 up to April 30, 1998 over a property designated as
Ground Floor, Seafood Market (hereinafter referred to as
Subject Premises) situated at the corner of EDSA corner
McArthur Street, Araneta Center, Cubao, Quezon City. A copy of
the lease contract is attached hereto as Annex "A".
5. Immediately thereafter, plaintiff took over actual physical
possession of Subject Premises, and established thereon the
now famous "Seafood Market Restaurant."
xxx xxx xxx
7. On October 31, 1992 at around 8:30 p.m., defendant PDC,
without the benefit of any writ of possession or any lawful court
order and with the aid of approximately forty (40) armed
security guards and policemen under the supervision of
defendant Tejam, forcibly entered the subject premises through
force, intimidation, threats and stealth and relying on brute
force and in a thunderboltish manner and against plaintiff's
will, unceremoniously drew away all of plaintiff's men out of the
subject premises, thereby depriving herein plaintiff of its
actual, physical and natural possession of the subject
premises. The illegal, high-handed manner and gestapo like

take-over by defendants of subject premises is more

particularly described as follows: . . .
8. To date, defendants continue to illegally possess and hold
the Subject Premises, including all the multi-million
improvements, fixtures and equipment therein owned by
plaintiff, all to the damage and prejudice of plaintiff. The
actuations of defendants constitute an unlawful appropriation,
seizure and taking of property against the will and consent of
plaintiff. Worse, defendants are threatening to sell at public
auction and without the consent of plaintiff and without lawful
authority, the multi-million fixtures and equipment of plaintiff
and at prices way below the market value thereof. Plaintiff
hereby attaches as Annex "B" the letter from defendants dated
August 6, 1993 addressed to plaintiff, informing the latter that
the former intends to sell at an auction on August 19, 1993 at
2:00 p.m. properties of the plaintiff presently in defendants'
possession.
xxx xxx xxx
12. Defendant's unlawful takeover of the premises constitutes
a violation of its obligation under Art. 1654 of the New Civil
Code requiring the lessor to maintain the lessee in peaceful
and adequate enjoyment of the lease for the entire duration of
the contract. Hence, plaintiff has filed the present suit for the
recovery of damages under Art. 1659 of the New Civil Code . . .
Restated in its bare essentials, the forcible entry case has one cause
of action, namely, the alleged unlawful entry by petitioner into the
leased premises out of which three (3) reliefs (denominated by
private respondent as its causes of action) arose: (a) the restoration
by the lessor (petitioner herein) of the possession of the leased
premises to the lessee; (b) the claim for actual damages due to the
losses suffered by private respondent such as the deterioration of
perishable foodstuffs stored inside the premises and the deprivation
of the use of the premises causing loss of expected profits; and, (c)
the claim for attorney's fees and costs of suit.
On the other hand, the complaint for damages prays for a monetary
award consisting of (a) moral damages of P500,000.00 and
exemplary damages of another P500,000.00; (b) actual damages of
P20,000,000.00 and compensatory damages of P1,000,000.00
representing unrealized profits; and, (c) P200,000.00 for attorney's
fees and costs, all based on the alleged forcible takeover of the
leased premises by petitioner. Since actual and compensatory
damages were already prayed for in the forcible entry case before

the MeTC, it is obvious that this cannot be relitigated in the damage

suit before the RTC by reason of res adjudicata.
The other claims for moral and exemplary damages cannot also
succeed considering that these sprung from the main incident being
heard before the MeTC. Jurisprudence is unequivocal that when a
single delict or wrong is committed like the unlawful taking or
detention of the property of another there is but one single cause
of action regardless of the number of rights that may have been
violated, and all such rights should be alleged in a single complaint
as constituting one single cause of action. 15 In a forcible entry case,
the real issue is the physical possession of the real property. The
question of damages is merely secondary or incidental, so much so
that the amount thereof does not affect the jurisdiction of the court.
In other words, the unlawful act of a deforciant in taking possession
of a piece of land by means of force and intimidation against the
rights of the party actually in possession thereof is a delict or wrong,
or a cause of action that gives rise to two (2) remedies, namely, the
recovery of possession and recovery of damages arising from the
loss of possession, but only to one action. For obvious reasons, both
remedies cannot be the subject of two (2) separate and independent
actions, one for recovery of possession only, and the other, for the
recovery of damages. That would inevitably lead to what is termed in
law as splitting up a cause of action. 16 In David v. de la Cruz 17 we
observed
Herein tenants have but one cause of action against their
landlord, their illegal ejectment or removal from their
landholdings, which cause of action however entitles them to
two (2) claims or remedies for reinstatement and damages.
As both claims arise from the same cause of action, they
should be alleged in a single complaint.
A claim cannot be divided in such a way that a part of the amount of
damages may be recovered in one case and the rest, in
another. 18 In Bachrach v. Icarangal 19 we explained that the rule
was aimed at preventing repeated litigations between the same
parties in regard to the same subject of the controversy and to
protect the defendant from unnecessary vexation. Nemo debet bis
vexari pro una et eadem causa.
What then is the effect of the dismissal of the other action? Since the
rule is that all such rights should be alleged in a single complaint, it
goes without saying that those not therein included cannot be the

subject of subsequent complaints for they are barred forever. 20 If a

suit is brought for a part of a claim, a judgment obtained in that
action precludes the plaintiff from bringing a second action for the
residue of the claim, notwithstanding that the second form of action
is not identical with the first or different grounds for relief are set for
the second suit. This principle not only embraces what was actually
determined, but also extends to every matter which the parties
might have litigated in the case. 21 This is why the legal basis upon
which private respondent anchored its second claim for damages,
i.e., Art. 1659 in relation to Art. 1654 of the Civil Code, 22 not
otherwise raised and cited by private respondent in the forcible entry
case, cannot be used as justification for the second suit for damages.
We note, not without some degree of displeasure, that by filing a
second suit for damages, private respondent was not only able to
press a claim for moral and exemplary damages which by its failure
to allege the same in its suit before the MeTC foreclosed its right to
sue on it, but it was also able to obtain from the RTC, by way
of another temporary restraining order, a second reprieve from an
impending public auction sale of its movables which it could not
anymore secure from the MeTC before which the matter of the
issuance of a preliminary writ of injunction was already closed. prcd

prompted the Court to issue circulars 25 ordering among others that

a violation thereof shall be cause for the dismissal of the case or
cases without prejudice to the taking of appropriate action against
the counsel or party concerned.

The foregoing discussions provide sufficient basis to petitioner's

charge that private respondent and its counsel in the trial courts
committed forum shopping. In Crisostomo v. Securities and
Exchange Commission 23 we ruled

WHEREFORE, the Petition is GRANTED. The questioned Decision of

the Court of Appeals dated 27 September 1995 and the Order of the
Regional Trial Court of Quezon City dated 24 September 1993 are
REVERSED and SET ASIDE. The Regional Trial Court of Quezon City is
directed to dismiss Civil Case No. Q-93-16409, "Westin Seafood
Market, Inc. v.Progressive Development Corporation, et al.," and the
Metropolitan Trial Court of Quezon City to proceed with the proper
disposition of Civil Case No. 6589, "Westin Seafood Market,
Inc. v. Progressive Development Corporation, et al.," with dispatch
considering the summary nature of the case. Treble costs against
private respondent. Cdpr
SO ORDERED.
Puno, Mendoza, Quisumbing and Buena, JJ., concur.
|||

There is forum-shopping whenever, as a result of an adverse

opinion in one forum, a party seeks a favorable opinion (other
than by appeal or certiorari) in another. The principle applies . .
. with respect to suits filed in the courts . . . in connection with
litigations commenced in the court . . . in anticipation of an
unfavorable . . . ruling and a favorable case where the court in
which the second suit was brought, has no jurisdiction.
This Court likewise elucidated in New Pangasinan Review,
Inc. v. National Labor Relations Commission 24 that there is forum
shopping when the actions involve the same transactions, the same
essential facts and circumstances. The reason behind the
proscription of forum shopping is obvious. This unnecessarily
burdens our courts with heavy caseloads, unduly taxes the
manpower and financial resources of the judiciary and trifles with
and mocks our judicial processes, thereby adversely affecting the
efficient administration of justice. This condemnable conduct has

The records ineluctably show that the complaint lodged by private

respondent with the Regional Trial Court of Quezon City contained no
certification of non-forum shopping. When petitioner filed a motion to
dismiss the case raising among others the ground of forum shopping
it pointed out the absence of the required certification. The amended
complaint, as well as the second and third amended complaints,
attempted to rectify the error by invariably stating that there was no
other action pending between the parties involving the same causes
of action although there was actually a forcible entry case pending
before the MTC of Quezon City. By its admission of a pending forcible
entry case, it is obvious that private respondent was indulging in
forum shopping. While private respondent conveniently failed to
inform the RTC that it had likewise sought damages in the MTC on the
basis of the same forcible entry, the fact remains that it precisely did
so, which stratagem was being duplicated in the second case. This is
a compelling reason to dismiss the second case.

SECOND DIVISION
GERONIMO
Q. QUADRA, petitioner, vs.
THE COURT OF APPEALS and the PHILIPPINE CHARITY
SWEEPSTAKES OFFICE, respondents. [G.R. No. 147593. July
31, 2006.] PUNO, J p:
This is a petition for review of the decision of the Court of Appeals in
CA-G.R. SP No. 55634 dated December 29, 2000 and its resolution
dated March 26, 2001. The Court of Appeals reversed and set aside the
decision of the National Labor Relations Commission (NLRC) in NLRC
NCR Case No. 4312-ULP which affirmed the decision of the Labor
Arbiter granting moral and exemplary damages to petitioner Geronimo
Q. Quadra in connection with his dismissal from the service.
Petitioner
Geronimo
Q. Quadra was
the
Chief
Legal
Officer of respondent Philippine Charity Sweepstakes Office (PCSO)
when
he
organized
and
actively
participated
in
the
activities of Philippine Charity Sweepstakes Employees Association
(CUGCO),
an
organization
composed of the
rank
and
file
employees of PCSO, and then later, the Association of Sweepstakes
Staff Personnel and Supervisors (CUGCO) (ASSPS [CUGCO]). In April
1964, he was administratively charged before the Civil Service
Commission with violation of Civil Service Law and Rules for
neglect of duty and misconduct and/or conduct prejudicial to the
interest of the service. On July 14, 1965, the Civil Service Commission
rendered a decision finding petitioner guilty of the charges and
recommending the penalty of dismissal. The following day, on July 15,
1965, the General Manager of PCSO, Ignacio Santos Diaz, sent
petitioner a letter of dismissal, in accordance with the decision of the
Civil
Service
Commission.
Petitioner
filed
a
motion
for
reconsideration of the decision of the Civil Service Commission on
August 10, 1965. At the same time, petitioner, together with ASSPS
(CUGCO), filed with the Court of Industrial Relations (CIR) a complaint
for unfair labor practice against respondent PCSO and its officers. The
case was docketed as Case No. 4312-ULP.
On November 19, 1966, the CIR issued its decision finding respondent
PCSO
guilty of unfair
labor
practice
for
having
committed
discrimination against the union and for having dismissed petitioner
due to his union activities. It ordered the reinstatement of petitioner to
his former position with full backwages and with all the rights and
privileges pertaining to said position. 1
Respondent PCSO complied with the decision of the CIR. But while it
reinstated petitioner to his former position and paid his backwages, it

also
filed
with
the
Supreme Court a
petition
for
review
on certiorari entitled "Philippine Charity Sweepstakes Office, et al. v.
The Association of Sweepstakes Staff Personnel, et al." assailing the
decision of the CIR in Case No. 4312-ULP. The petition was docketed as
G.R. No. L-27546. 2
On March 16, 1967, during the pendency of the case in the
Supreme Court, petitioner filed with the CIR a "Petition for Damages."
He prayed for moral and exemplary damages in connection with Case
No.
4312-ULP.
He
cited
the
decision of the
Supreme Court in Rheem of the Philippines, Inc., et al. v. Ferrer,
et al. 3 where it upheld the jurisdiction of the CIR over claims for
damages incidental to an employee's dismissal. AcTHCE
Respondent PCSO moved to dismiss the petition for damages on the
following grounds: (1) the CIR has no jurisdiction to award moral and
exemplary damages; (2) the cause of action is barred by prior
judgment, it appearing that two complaints are brought for different
parts of a single cause of action; and (3) the petition states no valid
cause of action.
Petitioner resigned from PCSO on August 18, 1967.
The petition for damages and the motion to dismiss, however,
remained pending with the CIR until it was abolished and the NLRC was
created. On April 25, 1980, the Labor Arbiter rendered a decision
awarding moral and exemplary damages to petitioner in the
amount of P1.6 million. The dispositive portion of the decision stated:
WHEREFORE, in view of all the foregoing considerations, judgment
is hereby rendered awarding to complainant Geronimo
Q. Quadra moral damages consisting of the following sum: Three
Hundred Fifty Thousand Pesos (P350,000.00) for besmirched
reputation; Three Hundred Fifty Thousand Pesos (P350,000.00) for
social humiliation; One Hundred Thousand Pesos (P100,000.00) for
mental anguish; One Hundred Thousand Pesos (P100,000.00) for
serious anxiety; One Hundred Thousand Pesos (P100,000.00) for
wounded feelings; One Hundred Thousand Pesos (P100,000.00) for
moral shock; and the further sum of P500,000.00 as exemplary
damages, on account of the arbitrary and unlawful dismissal
effected by respondents. Consequently, respondents are therefore
ordered to pay complainant Quadra the total sum ofOne Million Six
Hundred Thousand Pesos (P1,600,000.00) within ten (10) days
after this Decision becomes final. SO ORDERED. 4

The NLRC affirmed the decision of the Labor Arbiter, 5 prompting

respondent
PCSO
to
file
a
petition
for certiorari with
theCourt of Appeals.
The Court of Appeals reversed the decision of the NLRC. It held that
there was no basis for the grant of moral and exemplary damages to
petitioner as his dismissal was not tainted with bad faith. It was the
Civil Service Commission that recommended petitioner's dismissal
after conducting an investigation. It also held that the petition claiming
moral and exemplary damages filed by petitioner after respondent
PCSO had complied with the CIR decision of reinstatement and
backwages amounted to splitting of cause of action. 6
Petitioner
filed
a
motion
for
reconsideration of the
decision of the Court of Appeals, but the same was denied for lack for
merit. 7
Petitioner
now
seeks
the Court to
review
the
ruling of the Court of Appeals. He basically argues: HIEAcC
First: The ruling of the Court of Appeals that the PCSO did not act in
bad faith when it dismissed the petitioner is contrary to the already
final and executory decision of the CIR dated November 1[9], 1966
finding the PCSO guilty of bad faith and unfair labor practice in
dismissing the petitioner. The decision of the CIR was affirmed by
the High Court in the case of PCSO, et al. v. Geronimo Q. Quadra,
et al., 115 SCRA 34. The Court of Appeals has no jurisdiction to
amend the final and executory decision of November 1[9],
1966 of the CIR which was affirmed by the High Court. Once a
decision has become final [and] executory, it could no longer be
amended or altered.
Second: The ruling of the Court of Appeals that the claims for
moral and exemplary damages of the petitioner is allegedly
"tantamount to splitting of cause of action under Sec. 4, Rule
2 of the 1997 Rules of Civil Procedure" is contrary to law. When
petitioner filed with the CIR his complaint for illegal dismissal
and unfair labor practice, the prevailing law and jurisprudence
was that the CIR did not have jurisdiction to grant moral and
exemplary damages. Petitioner's claim for moral damages was
filed with the CIR in the same case by virtue of the
ruling of the High Court in Rheem v. Ferrer, 19 SCRA 130
holding that the CIR has jurisdiction to award moral and
exemplary damages arising out of illegal dismissal and unfair
labor practice. 8

The petition is impressed with merit.

A dismissed employee is entitled to moral damages when the dismissal
is attended by bad faith or fraud or constitutes an act oppressive to
labor, or is done in a manner contrary to good morals, good customs or
public policy. Exemplary damages may be awarded if the dismissal is
effected in a wanton, oppressive or malevolent manner. 9 It appears
from the facts that petitioner was deliberately dismissed from the
service by reason of his active involvement in the activities of the
union groupsof both the rank and file and the supervisory
employees of PCSO, which unions he himself organized and headed.
Respondent PCSO first charged petitioner before the Civil Service
Commission for alleged neglect of duty and conduct prejudicial to the
service because of his union activities. The Civil Service Commission
recommended
the
dismissal ofpetitioner.
Respondent
PCSO
immediately served on petitioner a letter of dismissal even before the
latter could move for a reconsideration of the decision of the Civil
Service Commission. Respondent PCSO may not impute to the Civil
Service Commission the responsibility for petitioner's illegal dismissal
as it was respondent PCSO that first filed the administrative charge
against him. As found by the CIR, petitioner's dismissal constituted
unfair labor practice. It was done to interfere with, restrain or coerce
employees in the exercise of their right to self-organization. It stated:
Upon the entire evidence as a whole (sic), the [c]ourt feels and
believes that complainant Quadra was discriminatorily dismissed
by reason of his militant union activities, not only as
President of PCSEA, but also as President of the ASSPS. 10
In Nueva Ecija I Electric Cooperative, Inc. (NEECO I) Employees
Association, et al. v. NLRC, et al., 11 we found it proper to award
moral and exemplary damages to illegally dismissed employees as
their dismissal was tainted with unfair labor practice. The Court said:
Unfair
labor
practices
violate
the
constitutional
rights of workers and employees to self-organization, are
inimical to the legitimate interests of both labor and
management, including their right to bargain collectively and
otherwise deal with each other in an atmosphere of freedom
and mutual respect; and disrupt industrial peace and hinder
the
promotion ofhealthy
and
stable
labor-management
relations. As the conscience of the government, it is
the Court's sworn duty to ensure that none trifles with labor
rights. THEcAS

For this reason, we find it proper in this case to impose moral

and exemplary damages on private respondent. . . .
On the second issue, we agree with petitioner that the filing of a
petition for damages before the CIR did not constitute
splitting of cause of action under the Revised Rules of Court. The
Revised Rules of Court prohibits parties from instituting more than one
suit for a single cause of action. Splitting a cause of action is the
act of dividing a single cause of action, claim or demand into two or
more parts, and bringing suit for one of such parts only, intending to
reserve the rest for another separate action. The purpose of the rule is
to avoid harassment and vexation to the defendant and avoid
multiplicity of suits.12
The prevailing rule at the time that the action for unfair labor practice
and illegal dismissal was filed and tried before the CIR was that
said court had no jurisdiction over claims for damages. Hence,
petitioner, at that time, could not raise the issue ofdamages in the
proceedings.
However,
on
January
27,
1967,
the
Supreme Court rendered its ruling in Rheem of the Philippines, Inc.,
et al. v. Ferrer, et al. 13 upholding the jurisdiction of the CIR over
claims for damages incidental to an employee's illegal dismissal.
Petitioner properly filed his claim for damages after the declaration by
the Court and before the ruling on their case became final. Such filing
could not be considered as splitting of cause of action.
IN
VIEW
WHEREOF,
the
assailed
decision
and
resolution of the Court of Appeals are REVERSED and SET ASIDE. The
decision ofthe NLRC in NLRC NCR Case No. 4312-ULP is REINSTATED.
SO ORDERED.
Sandoval-Gutierrez, Corona, Azcuna and Garcia, JJ., concur.
||| (Quadra v. Court of Appeals, G.R. No. 147593, [July 31, 2006], 529
PHIL 218-225)

THIRD DIVISION
LOURDES DELA CRUZ, petitioner, vs. HON. COURT OF
APPEALS
and
MELBA
TAN
TE, respondents.
[G.R.
No. 139442. December 6, 2006.] VELASCO, JR., J p:
For unto every one that hath shall be given, and he shall have
abundance: but from him that hath not shall be taken away
even that which he hath.
Holy Bible, Matthew 25:29
The Case
This petition for review seeks to nullify the April 30, 1999 Decision and
the July 16, 1999 Resolution of the Court of Appeals in CA-G.R. SP No.
49097, which reversed the Decision of the Manila Regional Trial Court
(RTC), Branch 35, in Civil Case No. 98-89174, and reinstated the
Decision of the Manila Metropolitan Trial Court (MeTC), Branch 20,
which ordered petitioner Dela Cruz to vacate the subject lot in favor of
respondent Tan Te. 1
The Facts
The Reyes family, represented by Mr. Lino Reyes, owned the lot located
at No. 1332 Lacson Street (formerly Gov. Forbes Street), Sampaloc,
Manila. Petitioner Lourdes Dela Cruz was one of their lessees, and she
religiously paid rent over a portion of the lot for well over 40 years.
Sometime in 1989, a fire struck the premises and destroyed, among
others, petitioner's dwelling. After the fire, petitioner and some tenants
returned to the said lot and rebuilt their respective houses;
simultaneously, the Reyes family made several verbal demands on the
remaining lessees, including petitioner, to vacate the lot but the latter
did not comply. On February 21, 1994, petitioner was served a written
demand to vacate said lot but refused to leave. Despite the setback,
the Reyes family did not initiate court proceedings against any of the
lessees.
On November 26, 1996, the disputed lot was sold by the Reyeses to
respondent Melba Tan Te by virtue of the November 26, 1996 Deed of
Absolute Sale. Respondent bought the lot in question for residential
purposes. Despite the sale, petitioner Dela Cruz did not give up the
lot. HSIaAT
On January 14, 1997, petitioner was sent a written demand to
relinquish the premises which she ignored, prompting respondent Tan
Te to initiate conciliation proceedings at the barangay level. While
respondent attempted to settle the dispute by offering financial
assistance, petitioner countered by asking PhP 500,000.00 for her
house. Respondent rejected the counter offer which she considered

unconscionable. As a result, a certificate to file action was issued to

Tan Te.
On September 8, 1997, respondent Tan Te filed an ejectment complaint
with damages before the Manila MeTC, entitledMelba Tan Te v. Lourdes
Dela Cruz and docketed as Civil Case No. 156730-CV. The complaint
averred that: (1) the previous owners, the Reyeses were in possession
and control of the contested lot; (2) on November 26, 1996, the lot was
sold to Tan Te; (3) prior to the sale, Dela Cruz forcibly entered the
property with strategy and/or stealth; (4) the petitioner unlawfully
deprived the respondent of physical possession of the property and
continues to do so; and, (5) the respondent sent several written
demands to petitioner to vacate the premises but refused to do so.
On October 24, 1997, petitioner filed her answer and alleged that: (1)
the MeTC had no jurisdiction over the case because it falls within the
jurisdiction of the RTC as more than one year had elapsed from
petitioner's forcible entry; (2) she was a rent-paying tenant protected
by PD 20; 2 (3) her lease constituted a legal encumbrance upon the
property; and (4) the lot was subject of expropriation.
The Ruling of the Manila MeTC
On April 3, 1998, the MeTC decided as follows:
WHEREFORE, judgment is hereby rendered in favor of the
plaintiff as follows:
1. Ordering the defendant and all persons claiming right under
her to vacate the premises situated at 1332 Lacson Street
(formerly Gov. Forbes Street), Sampaloc, Manila and peacefully
return possession thereof to plaintiff; THaDAE
2. Ordering the defendant to pay the plaintiff the amount of
P360.00 a month from December 1996 to November 1997;
P432.00 a month from December 1997 to November 1998,
plus 20% for each subsequent year until the premises shall
have been vacated and turned over to the plaintiff;
3. Ordering the defendant to pay the plaintiff the amount of
P10,000.00 as attorney's fees; and, the costs of the suit.
SO ORDERED. 3
The Ruling of the Regional Trial Court
Unconvinced, petitioner Dela Cruz appealed the Decision of the MeTC
in the Manila RTC and the appeal was docketed as Civil Case No. 9889174. On September 1, 1998, the RTC rendered its judgment setting
aside the April 3, 1998 Decision of the Manila MeTC and dismissed

respondent Tan Te's Complaint on the ground that it was the RTC and
not the MeTC which had jurisdiction over the subject matter of the
case. The RTC believed that since Tan Te's predecessor-in-interest
learned of petitioner's intrusion into the lot as early as February 21,
1994, the ejectment suit should have been filed within the one-year
prescriptive period which expired on February 21, 1995. Since the
Reyes did not file the ejectment suit and respondent Tan Te filed the
action only on September 8, 1997, then the suit had become an accion
publiciana cognizable by the RTC.
The Ruling of the Court of Appeals
Disappointed at the turn of events, respondent Tan Te appealed the
adverse Decision to the Court of Appeals (CA) which was docketed as
CA-G.R. SP No. 49097. This time, the CA rendered a Decision in favor of
respondent Tan Te reversing the Manila RTC September 1, 1998
Decision and reinstated the Manila MeTC April 3, 1998 Decision.
Petitioner tried to have the CA reconsider its Decision but was rebutted
in its July 16, 1999 Resolution.

rule that findings of fact of the CA are final and conclusive and cannot
be reviewed on appeal to this Court provided they are supported by
evidence on record or substantial evidence. Fortunately for petitioner,
we will be liberal with her petition considering that the CA's factual
findings contradict those of the RTC, and there was an asseveration
that the court a quo went beyond the issues of the case. Indeed, these
grounds were considered exceptions to the factual issue bar rule.
Secondly, the petition unnecessarily impleaded the CA in violation of
Section 4, Rule 45. We will let this breach pass only because there is a
need to entertain the petition due to the conflicting rulings between
the lower courts; however, a repetition may result to sanctions.
The actual threshold issue is which court, the Manila RTC or the Manila
MeTC, has jurisdiction over the Tan Te ejectment suit. Once the
jurisdictional issue is settled, the heart of the dispute is whether or not
respondent is entitled to the ejectment of petitioner Dela Cruz from the
premises. ECaITc
However, the petition is bereft of merit.

Unyielding to the CA Decision and the denial of her request for

reconsideration, petitioner Dela Cruz now seeks legal remedy through
the instant Petition for Review on Certiorari before the Court.
The Issues
Petitioner Dela Cruz claims two (2) reversible errors on the part of the
appellate court, to wit: EAISDH
A
THE HON. COURT OF APPEALS, WITH DUE RESPECT, WENT
BEYOND THE ISSUES OF THE CASE AND CONTRARY TO THOSE
OF THE TRIAL COURT.
B
THE HON. COURT OF APPEALS, WITH DUE RESPECT, ERRED IN
REVERSING THE DECISION OF THE RTC AND IN EFFECT,
REINSTATING THE DECISION OF THE [MeTC] WHICH IS
CONTRADICTED BY THE EVIDENCE ON RECORD. 4

On the Issue of Jurisdiction

Jurisdiction is the power or capacity given by the law to a court or
tribunal
to
entertain,
hear
and
determine
certain
controversies. 5 Jurisdiction over the subject matter is conferred by
law.
Section 33 of Chapter III on Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts of B. P. No. 129 6 provides:

The Court's Ruling

Discussion on Rule 45
Before we dwell on the principal issues, a few procedural matters must
first be resolved.

Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal

Trial Courts and Municipal Circuit Trial Courts in civil cases.
Metropolitan Trial Courts, Municipal Trial Courts, and Municipal
Circuit Trial Courts shall exercise:
xxx xxx xxx
(2) Exclusive original jurisdiction over cases of forcible entry
and unlawful detainer: Provided, That when, in such cases, the
defendant raises the question of ownership in his pleadings
and the question of possession cannot be resolved without
deciding the issue of ownership, the issue of ownership shall be
resolved only to determine the issue of possession.

Petitioner Dela Cruz asks the Court to review the findings of facts of
the CA, a course of action proscribed by Section 1, Rule 45. Firm is the

Thus exclusive, original jurisdiction over ejectment proceedings (accion

interdictal) is lodged with the first level courts. This is clarified in

Section 1, Rule 70 of the 1997 Rules of Civil Procedure that embraces

an action for forcible entry (detentacion), where one is deprived of
physical possession of any land or building by means of force,
intimidation, threat, strategy, or stealth. In actions for forcible entry,
three (3) requisites have to be met for the municipal trial court to
acquire jurisdiction. First, the plaintiffs must allege their prior physical
possession of the property. Second, they must also assert that they
were deprived of possession either by force, intimidation, threat,
strategy, or stealth. Third, the action must be filed within one (1) year
from the time the owners or legal possessors learned of their
deprivation of physical possession of the land or building.TAIESD
The other kind of ejectment proceeding is unlawful detainer
(desahucio), where one unlawfully withholds possession of the subject
property after the expiration or termination of the right to possess.
Here, the issue of rightful possession is the one decisive; for in such
action, the defendant is the party in actual possession and the
plaintiff's cause of action is the termination of the defendant's right to
continue in possession. 7 The essential requisites of unlawful detainer
are: (1) the fact of lease by virtue of a contract express or implied; (2)
the expiration or termination of the possessor's right to hold
possession; (3) withholding by the lessee of the possession of the land
or building after expiration or termination of the right to possession; (4)
letter of demand upon lessee to pay the rental or comply with the
terms of the lease and vacate the premises; and (5) the action must
be filed within one (1) year from date of last demand received by the
defendant.
A person who wants to recover physical possession of his real property
will prefer an ejectment suit because it is governed by the Rule on
Summary Procedure which allows immediate execution of the
judgment under Section 19, Rule 70 unless the defendant perfects an
appeal in the RTC and complies with the requirements to stay
execution; all of which are nevertheless beneficial to the interests of
the lot owner or the holder of the right of possession.
On the other hand, Section 19, of Chapter II of B.P. No. 129 on Regional
Trial Courts provides:
Section 19. Jurisdiction in civil cases. Regional Trial Courts
shall exercise exclusive original jurisdiction:
xxx xxx xxx
(2) In all civil actions which involve the title to, or possession
of, real property, or any interest therein, except actions for
forcible entry into and unlawful detainer of lands or buildings,

original jurisdiction over which is conferred upon Metropolitan

Trial Courts, Municipal Trial Courts and Municipal Circuit Trial
Courts.
Two (2) kinds of action to recover possession of real property which fall
under the jurisdiction of the RTC are: (1) the plenary action for the
recovery of the real right of possession (accion publiciana) when the
dispossession has lasted for more than one year or when the action
was filed more than one (1) year from date of the last demand received
by the lessee or defendant; and (2) an action for the recovery of
ownership (accion reivindicatoria) which includes the recovery of
possession.TCaADS
These actions are governed by the regular rules of procedure and
adjudication takes a longer period than the summary ejectment suit.
To determine whether a complaint for recovery of possession falls
under the jurisdiction of the MeTC (first level court) or the RTC (second
level court), we are compelled to go over the allegations of the
complaint. The general rule is that what determines the nature of the
action and the court that has jurisdiction over the case are the
allegations in the complaint. These cannot be made to depend upon
the defenses set up in the answer or pleadings filed by the
defendant. 8
This general rule however admits exceptions. In Ignacio v. CFI of
Bulacan, it was held "that while the allegations in the complaint make
out a case for forcible entry, where tenancy is averred by way of
defense and is proved to be the real issue, the case should be
dismissed for lack of jurisdiction as the case should properly be filed
with the then Court of Agrarian Relations." 9
The cause of action in a complaint is not what the designation of the
complaint states, but what the allegations in the body of the complaint
define and describe. The designation or caption is not controlling, more
than the allegations in the complaint themselves are, for it is not even
an indispensable part of the complaint. 10
Let us refer to the allegations of the complaint filed in the Manila MeTC
in Civil Case No. 98-89174, which we quote verbatim:
3. That plaintiff is the absolute and registered owner of a parcel
of land located at No. 1332, Lacson Street, Sampaloc, Manila
now being occupied by defendant;

4. That plaintiff purchased the above-said parcel of land

together with its improvements from the legal heirs of the late
EMERLINDA DIMAYUGA REYES on November 26, 1996, under
and by virtue of a Deed of Absolute Sale . . .; DTIaHE
5. That pursuant to the said deed of sale, the title to the land
and all its improvements was transferred in plaintiff's name as
evidenced by Transfer Certificate of Title No. 233273 issued by
the Register of Deeds of Manila on April 22, 1997 . . .;
6. That prior to said sale, the previous owners, represented by
Mr. Lino Reyes, husband of the said deceased Emerlinda D.
Reyes and the administrator of her estate, was in possession
and control of the property subject of this complaint;
7. That also prior to said sale, defendant, without the
knowledge and consent of Mr. Lino Reyes, surreptitiously and
by means of stealth and strategy entered, used and occupied
the said premises thus depriving the former of rightful
possession thereof;
8. That on February 21, 1994, Mr. Lino Reyes, through Atty.
Alejo Sedico, his lawyer, furnished the defendants a letter
formally demanding that defendant vacate the premises . . .;
9. That, however, defendant failed and refused to vacate
despite just and legal demand by Mr. Lino Reyes;
10. That after the sale to plaintiff of said premises, plaintiff has
several times demanded of defendants to vacate the premises,
the last demand having been made on them personally and in
writing on January 14, 1997 . . .;
11. That defendant failed and refused and still fails and refuses
to vacate the premises without legal cause or justifiable reason
whatsoever; 11
The answer of petitioner averred:
4. The Court has no jurisdiction over the case, having been
filed by plaintiff more than the reglementary one year period to
commence forcible entry case, which is reckoned from the date
of the alleged unlawful entry of defendant by the use of stealth
and strategy into the premises;
5. For more than four decades now, defendant has been and
still is a rent-paying tenant of the subject land occupied by
their residential house, dating back to the original ownerlessor, the Dimayuga family. Her lease with no definite
duration, commenced with a rent at P60.00 per month until it
was gradually increased in the ensuing years. As of November
1996, it stood at P300.00 a month; ESAHca

6. In this circumstances [sic], defendant enjoys the protective

mantle of P.D. 20 and the subsequent rental control status
against dispossession. She cannot be ejected other than for
causes prescribed under B.P. Blg. 25. Further, in case of sale of
the land, she has the right of first refusal under the express
provision of P.D. 1571;
7. Throughout the years of her tenancy, defendant has been
updated in her rental payment until the collector of the original
owner-lessor no longer came around as she has done
theretofore;
7.1. As a result, she was compelled to file a petition for
consignation of rent before the Metropolitan Trial Court of
Manila;
8. A bona fide tenant within the ambit if [sic] P.D. 20 and the
subsequent rental control status, including B.P. Blg. 25, under
its terms, cannot be ousted on a plea of expiration of her
monthly lease;
9. Her lease constitutes a legal encumbrance upon the
property of the lessor/owner and binds the latter's successorin-interest who is under obligation to respect it;
10. The land at bench is the subject of a pending expropriation
proceedings;
11. Plaintiff being a married woman cannot sue or be sued
without being joined by her husband; 12
Undeniably, the aforequoted allegations of the complaint are vague
and iffy in revealing the nature of the action for ejectment.
The allegations in the complaint show that prior to the sale by Lino
Reyes, representing the estate of his wife Emerlinda Reyes, he was in
possession and control of the subject lot but were deprived of said
possession when petitioner, by means of stealth and strategy, entered
and occupied the same lot. These circumstances imply that he had
prior physical possession of the subject lot and can make up a forcible
entry complaint. ECcTaH
On the other hand, the allegation that petitioner Dela Cruz was served
several demands to leave the premises but refused to do so would
seem to indicate an action for unlawful detainer since a written
demand is not necessary in an action for forcible entry. It is a fact that
the MeTC complaint was filed on September 8, 1997 within one (1)
year from the date of the last written demand upon petitioner Dela
Cruz on January 14, 1997.

As previously discussed, the settled rule is jurisdiction is based on the

allegations in the initiatory pleading and the defenses in the answer
are deemed irrelevant and immaterial in its determination. However,
we relax the rule and consider the complaint at bar as an exception in
view of the special and unique circumstances present. First, as
inIgnacio v. CFI of Bulacan,13 the defense of lack of jurisdiction was
raised in the answer wherein there was an admission that petitioner
Dela Cruz was a lessee of the former owners of the lot, the Reyeses,
prior to the sale to respondent Tan Te. The fact that petitioner was a
tenant of the predecessors-in-interest of respondent Tan Te is material
to the determination of jurisdiction. Since this is a judicial admission
against the interest of petitioner, such admission can be considered in
determining jurisdiction. Second, the ejectment suit was filed with the
Manila MeTC on September 8, 1997 or more than nine (9) years ago. To
dismiss the complaint would be a serious blow to the effective
dispensation of justice as the parties will start anew and incur
additional legal expenses after having litigated for a long time.
Equitable justice dictates that allegations in the answer should be
considered to aid in arriving at the real nature of the action. Lastly,
Section 6, Rule 1 of the Rules of Court clearly empowers the Court to
construe Rule 70 and other pertinent procedural issuances "in a liberal
manner to promote just, speedy, and inexpensive disposition of every
action and proceeding."
Based on the complaint and the answer, it is apparent that the Tan Te
ejectment complaint is after all a complaint for unlawful detainer. It
was admitted that petitioner Dela Cruz was a lessee of the Reyeses for
around four (4) decades. Thus, initially petitioner as lessee is the legal
possessor of the subject lot by virtue of a contract of lease. When fire
destroyed her house, the Reyeses considered the lease terminated; but
petitioner Dela Cruz persisted in returning to the lot and occupied it by
strategy and stealth without the consent of the owners. The Reyeses
however tolerated the continued occupancy of the lot by petitioner.
Thus, when the lot was sold to respondent Tan Te, the rights of the
Reyeses, with respect to the lot, were transferred to their subrogee,
respondent Tan Te, who for a time also tolerated the stay of petitioner
until she decided to eject the latter by sending several demands, the
last being the January 14, 1997 letter of demand. Since the action was
filed with the MeTC on September 8, 1997, the action was instituted
well within the one (1) year period reckoned from January 14, 1997.
Hence, the nature of the complaint is one of unlawful detainer and the
Manila MeTC had jurisdiction over the complaint. IHEAcC

Thus, an ejectment complaint based on possession by tolerance of

the owner, like the Tan Te complaint, is a specie of unlawful detainer
cases.
As early as 1913, case law introduced the concept of possession by
tolerance in ejectment cases as follows: It is true that the landlord
might, upon the failure of the tenant to pay the stipulated rents,
consider the contract broken and demand immediate possession of the
rented property, thus converting a legal possession into illegal
possession. Upon the other hand, however, the landlord might
conclude to give the tenant credit for the payment of the rents and
allow him to continue indefinitely in the possession of the property. In
other words, the landlord might choose to give the tenant credit from
month to month or from year to year for the payment of their rent,
relying upon his honesty of his financial ability to pay the same. During
such period the tenant would not be in illegal possession of the
property and the landlord could not maintain an action of desahucio
until after he had taken steps to convert the legal possession into
illegal possession. A mere failure to pay the rent in accordance with the
contract would justify the landlord, after the legal notice, in bringing an
action of desahucio. The landlord might, however, elect to recognize
the contract as still in force and sue for the sums due under it. It would
seem to be clear that the landlord might sue for the rents due and
[unpaid, without electing to terminate the contract of tenancy;]
[w]hether he can declare the contract of tenancy broken and sue in an
action desahucio for the possession of the property and in a separate
actions for the rents due and damages, etc. 14
The concept of possession by tolerance in unlawful detainer cases was
further refined and applied in pertinent cases submitted for decision by
1966. The rule was articulated as follows: Where despite the lessee's
failure to pay rent after the first demand, the lessor did not choose to
bring an action in court but suffered the lessee to continue occupying
the land for nearly two years, after which the lessor made a second
demand, the one-year period for bringing the detainer case in the
justice of the peace court should be counted not from the day the
lessee refused the first demand for payment of rent but from the time
the second demand for rents and surrender of possession was not
complied with. 15
In Calubayan v. Pascual, a case usually cited in subsequent decisions
on ejectment, the concept of possession by tolerance was further
elucidated as follows:

In allowing several years to pass without requiring the occupant to

vacate the premises nor filing an action to eject him,plaintiffs
have acquiesced to defendant's possession and use of the
premises. It has been held that a person who occupies the
land of another at the latter's tolerance or permission,
without any contract between them, is necessarily bound
by an implied promise that he will vacate upon demand,
failing which a summary action for ejectment is the proper remedy
against them. The status of the defendant is analogous to that of a
lessee or tenant whose term of lease has expired but whose
occupancy continued by tolerance of the owner. In such a case, the
unlawful deprivation or withholding of possession is to be counted
from the date of the demand to vacate. 16 (Emphasis
supplied.)HDacIT
From the foregoing jurisprudence, it is unequivocal that petitioner's
possession after she intruded into the lot after the fire was by
tolerance or leniency of the Reyeses and hence, the action is properly
an unlawful detainer case falling under the jurisdiction of the Manila
MeTC.
Even if we concede that it is the RTC and not the MeTC that has
jurisdiction over the Tan Te complaint, following the reasoning that
neither respondent nor her predecessor-in-interest filed an ejectment
suit within one (1) year from February 21, 1994 when the Reyeses
knew of the unlawful entry of petitioner, and hence, the complaint is
transformed into an accion publiciana, the Court deems it fair and just
to suspend its rules in order to render efficient, effective, and
expeditious justice considering the nine (9) year pendency of the
ejectment suit. More importantly, if there was uncertainty on the issue
of jurisdiction that arose from the averments of the complaint, the
same cannot be attributed to respondent Tan Te but to her counsel who
could have been confused as to the actual nature of the ejectment suit.
The lawyer's apparent imprecise language used in the preparation of
the complaint without any participation on the part of Tan Te is
sufficient special or compelling reason for the grant of relief.
The case of Barnes v. Padilla 17 elucidates the rationale behind the
exercise by this Court of the power to relax, or even suspend, the
application of the rules of procedure:
Let it be emphasized that the rules of procedure should be viewed
as mere tools designed to facilitate the attainment of justice. Their
strict and rigid application, which would result in technicalities that
tend to frustrate rather than promote substantial justice, must

always be eschewed. Even the Rules of Court reflect this principle.

The power to suspend or even disregard rules can be so pervasive
and compelling as to alter even that which this Court itself has
already declared to be final . . . .
The emerging trend in the rulings of this Court is to afford every
party litigant the amplest opportunity for the proper and just
determination of his cause, free from the constraints of
technicalities. Time and again, this Court has consistently held that
rules must not be applied rigidly so as not to override substantial
justice. 18
Moreover, Section 8, Rule 40 authorizes the RTC in case of
affirmance of an order of the municipal trial court dismissing a case
without trial on the merits and the ground of dismissal is lack of
jurisdiction over the subject matter to try the case on the merits as
if the case was originally filed with it if the RTC has jurisdiction over the
case. In the same vein, this Court, in the exercise of its rule-making
power, can suspend its rules with respect to this particular case (pro
hac vice), even if initially, the MeTC did not have jurisdiction over the
ejectment suit, and decide to assume jurisdiction over it in order to
promptly resolve the dispute. cEHSTC
The issue of jurisdiction settled, we now scrutinize the main issue.
At the heart of every ejectment suit is the issue of who is entitled to
physical possession of the lot or possession de facto.
We rule in favor of respondent Tan Te for the following reasons:
1. Petitioner admitted in her Answer that she was a rent-paying tenant
of the Reyeses, predecessors-in-interest of respondent Tan Te. As such,
she recognized the ownership of the lot by respondent, which includes
the right of possession.
2. After the fire raged over the structures on the subject lot in late
1989 the contracts of lease expired, as a result of which Lino Reyes
demanded that all occupants, including petitioner, vacate the lot but
the latter refused to abandon the premises. During the duration of the
lease, petitioner's possession was legal but it became unlawful after
the fire when the lease contracts were deemed terminated and
demands were made for the tenants to return possession of the lot.
3. Petitioner's possession is one by the Reyeses' tolerance and
generosity and later by respondent Tan Te's.

Petitioner fully knows that her stay in the subject lot is at the leniency
and magnanimity of Mr. Lino Reyes and later of respondent Tan Te; and
her acquiescence to such use of the lot carries with it an implicit and
assumed commitment that she would leave the premises the moment
it is needed by the owner. When respondent Tan Te made a last, written
demand on January 14, 1997 and petitioner breached her promise to
leave upon demand, she lost her right to the physical possession of the
lot. Thus, respondent Tan Te should now be allowed to occupy her lot
for residential purposes, a dream that will finally be realized after nine
(9) years of litigation.
Petitioner raises the ancillary issue that on March 15, 1998, the Manila
City Council passed and approved Ordinance No. 7951:DHaECI
[a]uthorizing the Manila City Mayor to acquire either by negotiation
or expropriation certain parcels of land covered by Transfer
Certificates of Title Nos. 233273, 175106 and 140471, containing
an area of One Thousand Four Hundred Twenty Five (1,425) square
meters, located at Maria Clara and Governor Forbes Streets, Sta.
Cruz, Manila, for low cost housing and award to actual bonafide
residents thereat and further authorizing the City Mayor to avail for
that purpose any available funds of the city and other existing
funding facilities from other government agencies . . . . 19
It readily appears that this issue was not presented before the Court of
Appeals in CA-G.R. SP No. 49097 despite the fact that the respondent's
petition was filed on September 25, 1998, six months after the
ordinance was passed. Thus, this issue is proscribed as are all issues
raised for the first time before the Court are proscribed.
Even granting for the sake of argument that we entertain the issue, we
rule that the intended expropriation of respondent's lot (TCT No.
233273) by the city government of Manila will not affect the resolution
of this petition. For one thing, the issue can be raised by petitioner in
the appropriate legal proceeding. Secondly, the intended expropriation
might not even be implemented since it is clear from the ordinance
that the City Mayor will still locate available funds for project, meaning
the said expense is not a regular item in the budget.
WHEREFORE, this petition is DENIED for lack of merit. The April 30,
1999 Decision of the Court of Appeals reinstating the April 3, 1998
MeTC Decision in Civil Case No. 156730-CV and the July 16, 1999
Resolution in CA-G.R. SP No. 49097 are hereby AFFIRMED IN TOTO.

No costs.SO ORDERED.
Quisumbing, Carpio, Carpio Morales and Tinga, JJ., concur.

THIRD DIVISION
[G.R. No. 116825. March 26, 1998.]
SAN
LORENZO
VILLAGE
ASSOCIATION,
INC., petitioner, vs. COURT OF APPEALS; Hon.
Judge ROBERTO C. DIOKNO, Presiding Judge,
RTC,
Makati,
Branch
62
and
ALMEDA
DEVELOPMENT
&
EQUIPMENT
CORPORATION, respondents.
Go, Cojuangco, Mendoza & Ligon for petitioner.
Sinson Valdez & Associates for private respondent.
SYNOPSIS
Private respondent Almeda Development and Equipment Corporation
(ADEC) filed a complaint before the lower court against San Lorenzo
Village Association Inc. (SLVAI) and San Lorenzo Company, Inc. ADEC
prayed for the issuance of a temporary restraining order directing the
San Lorenzo Company, Inc. to cease and desist from making the
petitioner a member of the San Lorenzo Village Association Inc. and
prohibiting the petitioner from constructing a taller building on its lot
and the San Lorenzo Village Association Inc. from collecting
membership fee and monthly dues and other assessments. Private
respondent SLVAI filed a motion to dismiss on grounds of lack of cause
of action and lack of ADEC'S lack of personality to sue. The lower court
denied the motion to dismiss. It held that ADEC has the capacity to sue
basing its claims on a Deed of Sale dated September 11, 1990 and as
successor in interest of the original registered owner ADEC stepped
into the shoes of the latter. SLVAI questioned the lower court's order
before the Court of Appeals through a petition for certiorari. The
appellate court denied the petition. In this petition, petitioner's
contention boils down to the sole issue of whether or not the petition
before the Court of Appeals alleges a cause of action against petitioner
that the lower court may be deemed to have correctly denied the
motion to dismiss the same petition. cITAaD

The Supreme Court affirmed the decision of the Court of Appeals. The
Court held that while a motion to dismiss on the ground of failure to
state a cause of action in the complaint hypothetically admits the truth
of the facts alleged therein. Said rule is not applicable to the case at
bar. The complaint asserts that ADEC purchased the property in
question from the person admittedly holding title thereto. It then infers
that by said mode, it became the successor-in-interest of the vendor, if
not indeed the owner of the property. Hence, the restrictions in the title
should be nullified not only because it is contrary to law but also
because the conditions under which they were imposed had ceased to
exist. The averments in the complaint like the title of ADEC'S vendor,
the execution of the sale by said vendor to ADEC, the latter's status as
the vendor's successor-in-interest, and the altered physical
environment along Pasay Road, are allegations well within the
hypothetical-admission principle. These averments satisfy the three
elements of a cause of action. SLVAI therefore cannot invoke the
ground that the complaint "fails to state a cause of action" in its motion
to dismiss.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; MOTION TO DISMISS; AS A RULE,
A MOTION TO DISMISS ON THE GROUND OF FAILURE TO STATE A
CAUSE OF ACTION IN THE COMPLAINT HYPOTHETICALLY ADMITS THE
TRUTH OF THE FACTS ALLEGED THEREIN; SAID ADMISSION IS LIMITED
ONLY TO MATERIAL AND RELEVANT FACTS WELL PLEADED IN THE
COMPLAINT. A motion to dismiss on the ground of failure to state a
cause of action in the complaint hypothetically admits the truth of the
facts alleged therein. However, the hypothetical admission is limited to
the "relevant and material facts well pleaded in the complaint and
inferences fairly deductible therefrom. The admission does not extend
to conclusions or interpretations of law; nor does it cover allegations of
fact the falsity of which is subject to judicial notice." As this Court held
in De Dios v. Bristol Laboratories (Phils.), Inc.: . . . For the purpose, the
motion to dismiss must hypothetically admit the truth of the facts
alleged in the complaint. The admission, however, is limited only to all
material and relevant facts which are well pleaded in the complaint.
Thus, it has been ruled that a demurrer does not admit the truth of
mere epithers charging fraud; nor allegations of legal conclusions; nor
an erroneous statement of law. The admission of the truth of material

and relevant facts well pleaded does not extend to render a demurrer
an admission of inferences or conclusions drawn therefrom, even if
alleged in the pleading; nor mere inferences or conclusions from facts
not stated; nor conclusions of law; nor matters of evidence; nor
surplusage and irrelevant. . . ." However, it should be pointed out at
the outset that it is not "lack or absence of cause of action" that is a
ground for dismissal of the complaint, but rather, that "the complaint
states no cause of action." De Dios did indeed hold that a movant to
dismiss on the ground of failure of the complaint to state a cause of
action is burdened with the implied admission of the truth of "all
material and relevant facts which are well pleaded in the complaint,"
but not of "mere epithers charging fraud," or legal conclusions, or mere
inferences, or matters of evidence. Said case gave examples of
allegations not within the hypothetical admission rule, to wit:
"malicious and unjustified" institution of an action acting maliciously
and for the purpose of political persecution and vengeance, with intent
of circumventing a constitutional provision; usurping the Office of
Senator of the Philippines; that the master had breached the contract,
or discharged an employee in a wrongful, illegal, unlawful, unjust
manner, etc. AHSEaD

2. ID.; ID.; ID.; ID.; RULE NOT APPLICABLE IN CASE AT BAR; THE
COMPLAINT SATISFIES THE THREE (3) ELEMENTS OF A CAUSE OF
ACTION. The ruling in De Dios, does not apply to the case at bar. In
the instant case, the complaint asserts that plaintiff purchased the
property in question from the person admittedly holding title thereto. It
then infers that by this mode, it became the successor-in-interest of
the vendor, if not indeed the owner of the property. Hence, the
restrictions in the title should be nullified not only because it is
contrary to law but also because the conditions under which they were
imposed had ceased to exist. In fact, the averments in the complaint
like the title of ADEC's vendor, the execution of the sale by said vendor
to ADEC, the latter's status as the vendor's successor-in-interest, and
the altered physical environment along Pasay Road, are allegations
well within the hypothetical-admission principle. These averments
satisfy the three (3) elements of a cause of action. In other words, the
complaint did state a cause of action. In view of such, SLVAI cannot
successfully invoke the ground that the complaint "fails to state a
cause of action" in its motion to dismiss.

DECISION
ROMERO, J p:
This petition for review on certiorari assails the decision 1 of the Court
of Appeals denying the petition for certiorari filed by the San Lorenzo
Village Association, Inc. which sought the reversal of the orders dated
March 31 and October 15, 1992, of the Regional Trial Court of Makati,
Branch 62. 2 The lower court had denied the motion to dismiss the
petition for cancellation of the restrictions annotated in Transfer
Certificate of Title No. 47348 of the Registry of Deeds of Makati, Metro
Manila. LLjur
Petitioner San Lorenzo Village Association, Inc. (SLVAI) and San Lorenzo
Company, Inc. were the respondents in the aforesaid petition filed on
December 13, 1991 before the lower court by private respondent
Almeda Development and Equipment Corporation (ADEC). For clarity,
the pertinent portions of that petition in Civil Case No. 91-3450 are
hereby quoted as follows:

"3. The petitioner is the owner of that parcel of land with

building and other improvements situated at Pasay Road, San
Lorenzo Village, Makati, Metro Manila, embraced in Transfer
Certificate of Title No. 47348 of the Registry of Deeds of
Makati, Metro Manila, more particularly described as follows:
xxx xxx xxx
The petitioner's ownership thereto is evidenced by the Deed of
Sale executed by Ponciano L. Almeda, married to Eufemia
Perez-Almeda, and the petitioner on September 15, 1991,
entered as Doc. No. 218; Page No. 45; Book No. VIII; Series of
1991, evidenced by its copy hereto attached as Annex 'A'.
4. As the owner of the said parcel of land together with the
building and other improvements thereon, the petitioner has
the right to enjoy and dispose of said property without

limitation except those established by law (Art. 428, Civil

Code).

Evidenced by TCT No. 47348 and Entry No. 59599

(Memorandum of Encumbrances) thereof marked as Annexes
'B' and 'B-1', respectively.

xxx xxx xxx

5. In Transfer Certificate of Title No. 47448 (sic), there appears
Entry No. 59599, reading in part as follows:
'The owner of this lot or his successor in interest is required to
be and is automatically a member of the San Lorenzo Village
Association. The lot may not be subdivided. The lot shall only
be used for residential purposes. Only one single storey or one
(duplex) house may be constructed on a single lot, although
separate servant's quarter or garage may be built. The
property is subject to an easement of two meters within the lot
and adjacent to the rear and sides thereof not fronting a street
for the purpose of drainage, sewage, water and other public
facilities as may be necessary and desirable.

All buildings on the lot must be of strong materials. Building

shall not be higher than 5 meters above the ground directly
beneath the point in question. All building plans must be
approved by the Association before construction begins. All
buildings including garage, servant's quarter (porte cocheres)
must be constructed . . . not less than 3 meters from boundary
bordering a wall, not including pedestrian paths, and not less
than 2 meters from the other boundaries of this lot. Sewage
disposal must be by means of septic tank or into a sewage
system.

Walls on the perimeter of this property shall not exceed 2

meters in height, except that no restriction as to height applies
to walls made of live vegetation."

6. The condition prevailing along Pasay Road (San Lorenzo

Village) on July 10, 1958, the date when the restrictions were
imposed by the San Lorenzo Company, Inc. to lot and house
owners in San Lorenzo Village and on July 11, 1958, when the
Deed of Restrictions was annotated on TCT No. 60143/T-577
(the certificate of title from where TCT No. 47448 originated), is
no longer the same compared today. At that time, houses
located along Pasay Road (San Lorenzo Village) were used
purely for residential purposes. Today, what are found along
Pasay Road (San Lorenzo Village) are commercial/industrial
buildings such as the matter of security and garage (sic)
collections are taken care of by their buyers. Accordingly, the
San Lorenzo Village Association, Inc. is no longer relevant in so
far as the building and lot owners along Pasay Road (San
Lorenzo Village) are concerned.
7. The aforementioned annotation in TCT No. 47348 in (sic) an
unlawful limitation to the rights of the petitioner protected by
the Constitution and prescribed in Art. 428 of the Civil Code.
7.1 The petitioner does not intend to be a member of the San
Lorenzo Village Association, Inc.
7.2 The petitioner has its own security guards and garbage
trucks.
7.3 The petitioner can effectively protect its ownership and
possession without the assistance and intervention of the San
Lorenzo Village Association, Inc.
7.4 The petitioner intends to construct a taller building on the
lot.

8. While in Sec. 30, Presidential Decree No. 957, it is provided

that
'SEC. 30. Organization of Homeowners Association. The
owner or developer of a subdivision project or condominium
project shall initiate the organization of a homeowners
association among the buyers and residents of the projects for
the purpose of promoting and protecting their mutual interest
and assist in their community development."

there is no law compelling lot and house buyers to be a

member of the San Lorenzo Company, Inc. and restricting the
petitioner to construct a taller building on its lot.

9. As stated above, there is compelling reason for the

cancellation of the restrictions imposed at the back of TCT No.
47348.

10. If there is no vested right in existing law which can be

repealed or judicial interpretation which can be changed, there
is no reason why a Deed of Restrictions annotated in a
certificate of title cannot be cancelled.

ADEC prayed for the issuance of a temporary restraining order

directing the San Lorenzo Company, Inc. and its agents "to cease and
desist from making the petitioner a member of the San Lorenzo Village
Association, Inc. and prohibiting the petitioner from constructing a
taller building on its lot and the San Lorenzo Village Association, Inc.
from collecting membership fee and monthly dues and other
assessments." It likewise prayed that the Register of Deeds of Makati
be ordered to cancel Entry No. 59599 in TCT No. 47348 and that
respondents pay actual damages of P30,000.00, attorney's fees of
P30,000.00 plus P500 allowance per attendance in court hearings and
the costs of suit.

Therein private respondent SLVAI filed a motion to dismiss the petition

on the grounds of lack of cause of action and lack of ADEC's
personality to sue. It alleged that ADEC was not a registered owner of
the parcel of land covered by TCT No. 47348, that the sale of the
property by Ponciano L. Almeda to ADEC could not bind third parties;
that ADEC had no reason to pray for the cancellation of Entry No.
59599 not being the owner of the land nor a member of SLVAI but
simply a stranger that had no demandable right against the SLVAI. 4
ADEC opposed the motion to dismiss contending that it had a cause of
action against SLVAI because as the (new) owner of the lot involved, it
cannot be compelled to become a member of the SLVAI for to do so
would unduly limit its use of the property. Citing Philippine Suburban
Development Corporation v. Auditor General, 5 it asserted that it had
the capacity and personality to sue because actual notice of the sale
was equivalent to registration. 6
On March 31, 1992, the lower court issued an Order denying the
motion to dismiss, holding as follows:

11. To cancel the aforementioned annotation in TCT No. 47348

and to enforce its right, the petitioner was compelled to
engage the services of a lawyer for a fee and to institute this
action incurring and will incur litigation expenses." 3

"This Court agrees with the plaintiff that it has the capacity and
legal personality to file this case. Plaintiff has shown its interest
in the subject property, basing its claims on a Deed of Sale
dated September 11, 1990. As successor in interest of the

original registered owner, plaintiff step (sic) into the shoes of

the latter, consequently it can sue and be sued."

duty of registering
inscription." 8

SLVAI filed a motion for the reconsideration of that Order 7 alleging

that third persons were not bound by the deed of sale of the property
entered into between ADEC and Ponciano Almeda, as said deed of sale
was not registered. As such, ADEC had no cause of action against it.
Furthermore, Almeda, not having paid the association dues and
garbage fees, he was sued before the Regional Trial Court of Pasig,
Branch 151, where the same deed of sale was presented to prevent
the scheduled auction sale through a third-party claim. In quashing the
third-party claim, then Judge Eutropio Migrio ruled that the title to the
property being still in the name of defendant Almeda, whatever
transaction he had entered into would not be binding upon the
plaintiff. cdrep

In its reply to the opposition, SLVAI countered that the motion for
reconsideration was not pro forma as the lower court failed to consider
the provisions of Article 709 of the Civil Code and Section 50 of the
Land Registration Act. It alleged that the term "third persons" in Article
709 was broad enough to cover "everybody" who did not participate in
the disputed act, contract or deed. It asserted that, while it had a lien
over unpaid association dues and garbage fees, ADEC was not the real
party in interest in the suit for cancellation of restrictions on the title
that was still in the name of Almeda and therefore the case should
have been dismissed outright for lack of cause of action. Moreover,
while ADEC claimed to be the owner of the property, it had not
explained why it had not registered the deed of sale and secured a
separate title to the property. 9

In its opposition to the motion for reconsideration; ADEC contended

that said motion was pro forma as it merely reiterated the arguments
in the motion to dismiss. Citing Article 709 of the Civil Code which
states that "(t)he titles of ownership, or other rights over immovable
property, which are not duly inscribed or annotated in the Registry of
Property shall not prejudice third persons," ADEC averred that within
the context of that law, the SLVAI was not a "third person" because it
"merely caused the annotation on the title of a property of certain
restraints or impositions on the exercise of ownership by the registered
owner." It added that SLVAI had no interest in the property in question
"except to compel the owner thereof to be automatically a member of
the San Lorenzo Village Association and to pay the consequential dues
or fees and other expenses therefor." As such, SLVAI and San Lorenzo
Village Company, Inc., were included in the case "only as parties who
had caused the annotation or inscription of the entry in question which
limits or restricts the exercise of ownership over the aforesaid land,
and who may be affected thereby, directly or indirectly, by its
cancellation, in the same manner that the Register of Deeds of Makati
has also been impleaded as the public official who is charged with the

or

canceling

the

subject

annotation

or

On October 15, 1992, the lower court issued the Order denying the
motion for reconsideration as follows.
"Article 709 of the New Civil Code . . . as the basis of this
Motion for Reconsideration finds no application in this case. As
correctly pointed out by petitioner the 'third persons'
mentioned in Article 709, are those persons who may have
adverse interests in the property itself either in the concept of
an owner, or a vendee or a mortgagee, or otherwise, but
definitely not that of one who has merely caused the
annotation on the title of the property of certain restraints or
impositions on the exercise of ownership by the registered
owner. Moreover, when respondent San Lorenzo Village
Association, Inc. convey (sic) the property to Ponciano Almeda,
the original owner, the latter has all the rights as an owner,
including the right to sell, which he did in favor of the
petitioner.

As successor in interest, petitioner can validly exercise the

right to sue which the original owner could lawfully do for the
protection of the right as an attribute of ownership." 10

SLVAI questioned the lower court's Orders before the Court of Appeals
through a petition for certiorari with prayer for the issuance of a
temporary restraining order. It presented before said appellate court
the issue of whether or not the petition filed below by ADEC stated a
cause of action or that ADEC was the real party in interest. 11
On June 22, 1994, the Court of Appeals promulgated a Decision
denying the petition for certiorari. The Court of Appeals noted that the
petition sought to "discredit the material allegation of ADEC that it is
the owner of the property covered by the subject transfer certificate of
title. It asserts that such allegation is merely a conclusion or inference
of ADEC and does not grant to the latter the personality to sue the
petitioner nor does such become the source of the right to institute
proceedings in the court below." It held that:
"We resolve to deny the petition, reiterating the ruling made by
the Supreme Court in Galeon versus Galeon, 49 SCRA 516,520:

'It is well settled that in a motion to dismiss a complaint based

on lack of cause of action, "the question submitted to the court
for determination is the sufficiency of the allegations of fact
made in the complaint to constitute a cause of action, and not
whether these allegations of fact are true, for said motion must
hypothetically admit the truth of the facts alleged in the
complaint; . . ." The test of the sufficiency of the facts is
whether or not, accepting the veracity of the facts alleged, the
court could render a valid judgment upon the same in
accordance with the prayer of the complaint.'

As such, the allegation of ADEC that it is the owner of the

property on the strength of the deed of sale should be deemed
hypothetically admitted, giving it capacity to file the
proceedings below. The trial court was correct in saying that
'[p]laintiff has shown its interest in the subject property,. . . As
successor in interest of the registered owner, plaintiff step (sic)
into the shoes of the latter, consequently, it can sue and be
sued.' (Order, March 31, 1992; Rollo, page 36).

The arguments advanced by petitioner as to whether or not

ADEC validly acquired title to the property is one which is a
matter more by way of defense and which may be properly
threshed out during the trial. What the Supreme Court likewise
espoused in the Galeon case, page 520 is apropos on this
issue:

'The uniform ruling of this Court is that the trial court "may not
inquire into the truth of the allegations, and find them to be
false before a hearing is had on the merits of the cause". If the
court finds the allegations to be sufficient but doubts their
veracity, it is incumbent upon said court to deny the motion to
dismiss and require the defendant to answer. The veracity of
the assertions could be asserted at the trial on the merits.'" 12
SLVAI filed a motion for the reconsideration of that Decision but it was
denied on August 26, 1994. Hence, it is now before this Court on a
petition for review on certiorari raising the following issues:
"1. THE COURT OF APPEALS ERRED IN FINDING THAT THE
ALLEGATION IN THE COMPLAINT OF PRIVATE RESPONDENT
THAT IT IS THE 'OWNER' OF THE SUBJECT PROPERTY ON THE
BASIS OF A DEED OF ABSOLUTE SALE 'IS DEEMED
HYPOTHETICALLY ADMITTED GIVING IT CAPACITY TO FILE THE
PROCEEDINGS BELOW', CITING GALEON VS. GALEON, 49 SCRA
516, BECAUSE HYPOTHETICAL ADMISSION OF FACT DOES NOT
EXTEND TO INFERENCES OR CONCLUSIONS DRAWN FROM

SUCH FACT EVEN ALLEGED IN THE COMPLAINT AS HELD IN DE

DIOS V. BRISTOL, L-25530, JANUARY 12, 1974.
2. ASSUMING ARGUENDO THAT PRIVATE RESPONDENT IS THE
'OWNER' OF THE SUBJECT PROPERTY, THE SAME IS STILL
INSUFFICIENT TO MAKE OUT A CAUSE OF ACTION BECAUSE THE
DEED OF RESTRICTIONS SOUGHT TO BE CANCELLED BY
PRIVATE RESPONDENT REQUIRES THAT THE CANCELLATION
THEREOF BE INITIATED BY 'MEMBERS' WHO ARE THE
REGISTERED OWNERS OF THE LOTS IN THE VILLAGE AND BY
THEIR TWO THIRDS VOTE.
3. THE COURT OF APPEALS ERRED IN NOT FINDING THAT
PRIVATE RESPONDENT IS NOT THE REAL PARTY-ININTEREST." cdrep

These contentions boil down to the sole issue of whether or not the
petition below alleges a cause of action against petitioner that the
lower court may be deemed to have correctly denied the motion to
dismiss the same petition.

The Rules of Court requires that the complaint must make a concise
statement of the ultimate facts or the essential facts constituting the
plaintiff's cause of action. A fact is essential if it cannot be stricken out
without leaving the statement of the cause of action insufficient. 13 A
complaint states a cause of action where it contains the three (3)
essential elements of a cause of action, namely: (1) the legal right of
the plaintiff, (2) the correlative obligation of the defendant, and (3) the
act or omission of the defendant in violation of said legal right. If these
elements are absent, the complaint becomes vulnerable to a motion to
dismiss on the ground of failure to state a cause of action. If the
allegations are vague, indefinite, or in the form of conclusions, the
defendant's recourse is not a motion to dismiss but a bill of
particulars. 14

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

in the complaint hypothetically admits the truth of the facts alleged
therein. However, the hypothetical admission is limited to the "relevant
and material facts well pleaded in the complaint and inferences fairly
deductible therefrom. The admission does not extend to conclusions or
interpretations of law; nor does it cover allegations of fact the falsity of
which is subject to judicial notice." 15 As this Court held in De Dios
v. Bristol Laboratories (Phils.), Inc.:
". . . For the purpose, the motion to dismiss must hypothetically
admit the truth of the facts alleged in the complaint. The
admission, however, is limited only to all material and relevant
facts which are well pleaded in the complaint. Thus, it has been
ruled that a demurrer admits only such matters of fact as are
sufficiently pleaded; that the demurrer does not admit the
truth of mere epithets charging fraud; nor allegations of legal
conclusions; nor an erroneous statement of law. The admission
of the truth of material and relevant facts well pleaded does
not extend to render a demurrer an admission of inferences or
conclusions drawn therefrom, even if alleged in the pleading;
nor mere inferences or conclusions from facts not stated; nor
conclusions of law; nor matters of evidence; nor surplusage
and irrelevant matter. . . ." 16
However, it should be pointed out at the outset that it is not "lack or
absence of cause of action" that is a ground for dismissal of the
complaint, but rather, that "the complaint states no cause of
action". 17

De Dios did indeed hold that a movant to dismiss on the ground

of failure of the complaint to state a cause of action is burdened with
the implied admission of the truth of "all material and relevant facts
which are well pleaded in the complaint," but not of "mere epithets
charging fraud," or legal conclusions, or mere inferences, or matters of
evidence. Said case gave examples of allegations not within the
hypothetical-admission rule, to wit: "malicious and unjustified"
institution of an action; acting maliciously and for the purpose of
political persecution and vengeance, with intent of circumventing a

constitutional provision; usurping the office of Senator of the

Philippines; that the master had breached the contract, or discharged
an employee in a wrongful, illegal, unlawful, unjust manner, etc.

The above ruling, however, does not apply to the case at bar. In the
instant case, the complaint asserts that plaintiff purchased the
property in question from the person admittedly holding title thereto. It
then infers that by this mode, it became the successor-in-interest of
the vendor, if not indeed the owner of the property. Hence, the
restrictions in the title should be nullified not only because it is
contrary to law but also because the conditions under which they were
imposed had ceased to exist.
In fact, the averments in the complaint like the title of ADEC's vendor,
the execution of the sale by said vendor to ADEC, the latter's status as
the vendor's successor-in-interest, and the altered physical
environment along Pasay Road, are allegations well within the
hypothetical-admission principle. These averments satisfy the three (3)
elements of a cause of action. In other words, the complaint did state a
cause of action.

In view of such, SLVAI cannot successfully invoke the ground that the
complaint "fails to state a cause of action" in its motion to dismiss.

Putting it differently, what SLVAI essentially puts at issue is whether

substantively, ADEC, as plaintiff in the case below, possesses a tenable
right of action. As discussed, said issue is not a ground for a motion to
dismiss. As a matter of law, neither are the efficacy of the sale to pass
title to the property, and consequently, ADEC's acquisition of the status
of successor-in-interest, specific mandatory modes to challenge the
restrictions in question, or the change in the physical environment
along Pasay Road, grounds for a motion to dismiss under Rule 16 of the
Rules of Court. Instead, the aforementioned issues may be properly
raised in the Answer.

Regarding the third issue of whether ADEC is a real party in interest,

said issue is likewise not a proper ground for a motion to dismiss.
Certainly, as successor-in-interest of the original vendor, who is the
unquestioned title holder, ADEC has the prerogative to assert all the
latter's rights, including the impugnation of the restrictions on the title.
The tenability of the grounds for that impugnation, while proper under
the pleadings, should be threshed out at the trial on the merits.

The only other issue raised is that even assuming ADEC became owner
of the property, it cannot seek cancellation because, under SLVAI's
rules, the cancellation process can only be initiated by "members" of
the SLVAI who are the registered owners of the lots in the village and
by their two-thirds vote. However, those rules were not dealt with in
the complaint at all. They may thus be raised only by way of defense in
the Answer, but not as ground for a motion to dismiss available as
cause for dismissal of the action at this early stage.

Finally, even assuming that the allegation of the facts constituting

ADEC's cause of action is not as clear and categorical as would
otherwise be desired, any uncertainty thereby arising should be so
resolved as to enable a full inquiry into the merits of the action. Such a
course would preclude that multiplicity of suits which the law abhors,
and conduce to the definitive determination and termination of the
dispute. On the other hand, the abortion of the action on account of
the alleged fatal flaws of the complaint would obviously be indecisive;
it would not end the controversy, since the institution of another action
upon a revised complaint would not be foreclosed.

WHEREFORE, the petition should be DISMISSED and the challenged

decision of the Court of Appeals should be AFFIRMED. cdrep

SO ORDERED.

Narvasa, C .J ., Kapunan and Purisima, JJ ., concurs.