Professional Documents
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Civil Procedure Case Digest
Civil Procedure Case Digest
, petitioner,
vs.
HON. COURT OF APPEALS, and the SPOUSES PEDRO M. LARA
and ELISA G. LARA, respondents.
FACTS:
1. On November 23, 1987, Merrill Lynch Futures, Inc. (hereafter,
simply ML FUTURES) filed a complaint with the Regional Trial Court
at Quezon City against the Spouses Pedro M. Lara and Elisa G. Lara
for the recovery of a debt and interest thereon, damages, and
attorney's fees.
2. ML FUTURES alleged the following:
1) that on September 28, 1983 it entered into a Futures Customer
Agreement with the defendant spouses (Account No. 138-12161), in
virtue of which it agreed to act as the latter's broker for the purchase
and sale of futures contracts in the U.S.;
2) that pursuant to the contract, orders to buy and sell futures
contracts were transmitted to ML FUTURES by the Lara Spouses
"through the facilities of Merrill Lynch Philippines, Inc., a Philippine
corporation and a company servicing plaintiffs customers; 2
3) that from the outset, the Lara Spouses "knew and were duly
advised that Merrill Lynch Philippines, Inc. was not a broker in futures
contracts," and that it "did not have a license from the Securities and
Exchange Commission to operate as a commodity trading advisor
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Page 2
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Facts:
1. Petitioner Alfred Hahn is a Filipino citizen doing business
under the name and style "Hahn-Manila." On the other hand,
private
respondent
Bayerische
Motoren
Werke
Aktiengesellschaft (BMW) is a non-Gresident foreign
corporation existing under the laws of the former Federal
Republic of Germany, with principal office at Munich,
Germany.
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Page 6
11. On June 30, 1993, the trial court granted the writ of
preliminary injunction upon the filing of a bond of P100,
000.00. On July 13, 1993, following the posting of the
required bond, a writ of preliminary injunction was issued.
12. On July 1, 1993, BMW moved to dismiss the case,
contending that the trial court did not acquire jurisdiction over
it through the service of summons on the Department of
Trade and Industry, because it (BMW) was a foreign
corporation and it was not doing business in the Philippines
and that the execution of the Deed of Assignment was an
isolated transaction; that Hahn was not its agent because the
latter undertook to assemble and sell BMW cars and products
without the participation of BMW and sold other products; and
that Hahn was an indentor or middleman transacting
business in his own name and for his own account.
13. Hahn opposed the motion and argued that BMW was doing
business in the Philippines through him as its agent, as
shown by the fact that BMW invoices and order forms were
used to document his transactions; that he gave warranties
as exclusive BMW dealer; that BMW officials periodically
inspected standards of service rendered by him; and that he
was described in service booklets and international
publications of BMW as a "BMW Importer" or "BMW Trading
Company" in the Philippines.
14. The trial court deferred resolution of the motion to dismiss
until after trial on the merits for the reason that the grounds
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the purchase price of BMW cars sold in the Philippines. Hahn was
credited with a commission equal to 14% of the purchase price upon
the invoicing of a vehicle order by BMW. Upon confirmation in writing
that the vehicles had been registered in the Philippines and serviced
by him, he received an additional 3% of the full purchase price. Hahn
performed after-sale services, including, warranty services for which
he received reimbursement from BMW and all orders were on
invoices and forms of BMW.
Moreover, the Court distinguished an agent from a broker.
The court ruled that an agent receives a commission upon the
successful conclusion of a sale. On the other hand, a broker earns his
pay merely by bringing the buyer and the seller together, even if no
sale is eventually made.
asking why she was treated so and what was her fault. Danilo
Litonjua charged that Vigan had been hysterical, emotional
and created scenes at the office. He even required her to
secure psychiatric assistance. But despite proof that she was
not suffering from psychosis or organic brain syndrome as
certified to by a Psychiatrist of Danilo Litonjuas choice still
she was denied by the guards entry to her work upon
instructions again of Danilo Litonjua. Left with no alternative,
Vigan filed this case for illegal dismissal, alleging she
was receiving a monthly salary of P8,000.00 at the time
she was unlawfully terminated.
2. Litonjuas version: They negate the existence of the Litonjua
Group of Companies and the connection of Eduardo Litonjua
thereto. They contended that Vigan was employed by ACT
Theater, Inc., where Danilo Litonjua is a Director. They
dispute the charge of illegal dismissal for it was Vigan who
ceased to report for work despite notices and likewise contest
the P8,000.00 monthly salary alleged by Vigan, claiming it
was merely P6,850.00.
They claim that Vigan was a habitual absentee. Her
performance had been satisfactory, but then starting March
15, 1996 she had become emotional, hysterical,
uncontrollable and created disturbances at the office with her
crying and shouting for no reason at all. The incident was
repeated on April 3, 1996, May 24, 1996 and on June 4,
1996. Thus alarmed, on July 24, 1996 Vigan was required by
management to undergo medical and psychological
examination at the companys expense and naming three
doctors to attend to her. Dr. Baltazar Reyes and Dr. Tony
Perlas of the Philippine General Hospital and Dr. Lourdes
Ignacio of the Medical Center Manila. But they claim that
Vigan refused to comply.
Civpro/rule 2 & 3/mpperez
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IMSON vs CA
FACTS:
o In full settlement of its liability under the laws and the said
insurance contract, defendant Western Guaranty shall
pay plaintiff (herein petitioner);
o This compromise agreement shall in no way waive nor
prejudice plaintiffs (herein petitioner's) rights to proceed
against the other defendants with respect the remainder
of his claims;
o This compromise agreement shall be a full and final
settlement of the issues between plaintiff (herein
petitioner) and defendant Western Guaranty;
CA reversed the trial court applied the doctrine laid down in Lim
Tanhu v. Hon. Ramolete, adverted to essays that in a common
cause of action where all the defendants are indispensable
parties, the court's power to act is integral and cannot be split,
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such that it cannot relieve any of them and at the same time
render judgment against the rest.
Even without the insurer, the trial court would not lose its
competency to act completely and validly on the damage suit. The
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FACTS:
The litigation concerns a motor vehicle, a Colt Galant Sigma
1600E, 1977 model, 4-door sedan, colored Baikal White, with
Serial No. A-121-UL-493 and Engine No. 2G-171-34. The
decisions of both the appellate court and the trial court rest on the
following representation of the facts:
On August 29, 1977, Eleuterio Bondoc executed and delivered to
Carmark Philippines a promissory note in the sum of P66,119.04,
payable in instalments and in order to secure payment, a chattel
mortgage was executed in favor of Carmark Philippines over the
aforementioned motor vehicle which was subsequently assigned
in favor of Filinvest Corporation, with the conformity of Eleuterio
Bondoc.
On July 27, 1979, Eleuterio Bondoc, as vendor, executed a deed
of sale with assumption of mortgage of the balance of the account
in favor of Cesar Dollente which, upon approval by Filinvest
Corporation, Cesar Dollente executed and delivered to Filinvest
Corporation a promissory note in the amount of P37,528.83,
payable in instalments.
On October 26, 1979, Cesar Dollente, as vendor, executed a
deed of sale with assumption of mortgage over the
aforementioned vehicle for the balance of his account in favor of
Ernesto Dollente.
HELD: YES
In a suit for replevin, a clear right of possession must be
established. A foreclosure under a chattel mortgage may properly
be commenced only once there is default on the part of the
mortgagor of his obligation secured by the mortgage.
The replevin in the instant case has been sought to pave the way
for the foreclosure of the object covered by the chattel mortgage.
The conditions essential for that foreclosure would be to show,
firstly, the existence of the chattel mortgage and, secondly, the
default of the mortgagor.
These requirements must be established since the validity of the
plaintiffs exercise of the right of foreclosure are inevitably
dependent thereon.
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ISSUE: WON the plaintiff (herein petitioner) who has predicated his
right on being the mortgagee of a chattel mortgage should implead
the mortgagor in his complaint that seeks to recover possession of the
encumbered property in order to effect its foreclosure.
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ISSUE: a. WON the trial court has jurisdiction over the subject of the
action considering that respondents respective cause of action
against petitioners did not arise out of the same transaction nor are
there questions of law and facts common to both petitioners and
respondents. YES
b. WON there is permissive joinder in this case. YES
HELD:
A. As previously stated, respondents cause of action against
petitioners arose out of the same transaction. Thus, the amount of the
demand shall be the totality of the claims
Respondent Standards claim is P8,000.00, while that of respondent
Martina Gicale is P13,415.00, or a total ofP21,415.00. Section 19 of
Civpro/rule 2 & 3/mpperez
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B.P. Blg. 129 provides that the RTC has "exclusive original jurisdiction
over all other cases, in which the demand, exclusive of interest and
cost or the value of the property in controversy, amounts to more than
twenty thousand pesos (P20,000.00)."
Clearly, it is the RTC that has jurisdiction over the instant case. It
bears emphasis that when the complaint was filed, R.A. 7691
expanding the jurisdiction of the Metropolitan, Municipal and Municipal
Circuit Trial Courts had not yet taken effect. It became effective on
April 15, 1994.
B. Permissive joinder of parties requires that:
o (a) the right to relief arises out of the same transaction or
series of transactions;
o (b) there is a question of law or fact common to all the
plaintiffs or defendants; and
o (c) such joinder is not otherwise proscribed by the provisions
of the Rules on jurisdiction and venue.
In this case, there is a single transaction common to all, that is,
Pantrancos bus hitting the rear side of the jeepney. There is also a
common question of fact, that is, whether petitioners are negligent.
There being a single transaction common to both respondents,
consequently, they have the same cause of action against petitioners.
To determine identity of cause of action, it must be ascertained
whether the same evidence which is necessary to sustain the second
cause of action would have been sufficient to authorize a recovery in
the first.
Here, had respondents filed separate suits against petitioners, the
same evidence would have been presented to sustain the same
cause of action. Thus, the filing by both respondents of the complaint
with the court below is in order. Such joinder of parties avoids
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Thus, petitioner applied for and was granted a credit line by the
United Coconut Planters Bank (UCPB), International Exchange
Bank (IEBank), and Security Bank Corporation (SBC). Petitioner
also applied with the Asia United Bank (AUB) an irrevocable
domestic standby letter of credit in favor of respondent. All these
banks separately executed several undertakings setting the terms
and conditions governing the drawing of money by respondent
from these banks.
for the latter to submit its position paper on the matter of the
issuance of the injunction. Petitioner and respondent submitted
their respective position papers.
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The RTC found that both respondent and petitioner have reasons
for the enforcement or non-enforcement of the bank undertakings,
however, as to whether said reasons were justifiable or not, in
view of the attending circumstances, the RTC said that these can
only be determined after a full blown trial. It ruled that the outright
denial of petitioner's prayer for the issuance of injunction, even if
the evidence warranted the reasonable probability that real injury
will occur if the relief for shall not be granted in favor of petitioner,
will not serve the ends of justice.
The court found that both parties had fully presented their sides
on the issuance of the writ of preliminary injunction and that the
RTC had squarely resolved the issues presented by both parties.
Thus, respondent could not be faulted for not filing a motion for
reconsideration.
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motion was filed for no other purpose, except to seek proper guidance
on the issue at hand so that whatever action or position it may take
with respect to the CA resolution will be consistent with its term and
purposes.
Fourth. When the CA rendered its assailed Decision nullifying the
injunction issued by the RTC, and copies of the decision were
furnished these banks, not one of these banks ever filed any pleading
to assail their non-inclusion in the certiorari proceedings.
Indeed, the banks have no interest in the issuance of the injunction,
but only the petitioner. The banks' interests as defendants in the
petition for declaration of nullity of their bank undertakings filed
against them by petitioner in the RTC are separable from the interests
of petitioner for the issuance of the injunctive relief.
Clearly, in filing the petition for certiorari, respondent should join as
party defendant with the court or judge, the person interested in
sustaining the proceedings in the court, and it shall be the duty of
such person to appear and defend, both in his own behalf and in
behalf of the court or judge affected by the proceedings.
In this case, there is no doubt that it is only the petitioner who is the
person interested in sustaining the proceedings in court since she was
the one who sought for the issuance of the writ of preliminary
injunction to enjoin the banks from releasing funds to respondent. As
earlier discussed, the banks are not parties interested in the subject
matter of the petition. Thus, it is only petitioner who should be joined
as party defendant with the judge and who should defend the judge's
issuance of injunction.
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Substitution gives them the opportunity to continue the defense for the
deceased. Substitution is important because such opportunity to
defend is a requirement to comply with due process. The following are
the active participation of the heirs in the defence after the death of
Salazar:
1.lawyer did not stop representing the deceased which lasted for
about two more years,counsel was allowed by the petitioner who was
well aware of the instant litigation to continue appearing as counsel
until August 23, 1993 when the challenged decision was rendered.
2.The wife testified in court and declared that her husband is already
deceased. She new therefore that there was a litigation against her
husband, which her and her childrens interest are involve.
3.The petition for judgement was filed 1 and after the decision was
rendered.
4.Jurisdiction by estoppel, which jurisdiction over the person may be
acquired by simple appearance of the person in court.
Consequently, it undeniably being evident that the heirs
themselves sought their day in court and exercise their right to due
process. The ejectment being an action involving recovery of real
property, is a real action which is not extinguished by death. And that
a judgement in an ejectment case is conclusive between the parties
and their successors in interest by title subsequent to the
commencement of the action. Petition dismiss.
STATE INVESTMENT HOUSE VS. CA
Facts:
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failed to take advantage of such opportunity and thus lost your right of
first refusal in sale of said property.
9. Meanwhile, on December 4, 1988, Reyes confided to Rolando P.
Traballo, a close family friend and President of Cypress, his
predicament about the nearing expiry date of the redemption period of
the foreclosed mortgaged property with Prudential Bank, the money
for which he could not raise on time thereby offering the subject
property to him for Six Thousand Pesos (P6,000.00) per square
meter. Traballo expressed interest in buying the said property, told
Reyes that he will study the matter and suggested for them to meet
the next day.
10. They met the next day, December 5, 1988, at which time Traballo
bargained for Five Thousand Three Hundred Pesos (P5,300.00) per
square meter. After considering the reasons cited by Traballo for his
quoted price, Reyes accepted the same. However, since Traballo did
not have the amount with which to pay Reyes, he told the latter that
he will look for a partner for that purpose. Reyes told Traballo that he
had already afforded Riviera its right of first refusal but they cannot
agree because Rivieras final offer was for Five Thousand Pesos
(P5,000.00) per square meter.
11. Sometime in January 1989, apprehensive of the impending expiration
in March 1989 of the redemption period of the foreclosed mortgaged
property with Prudential Bank and the deal between Reyes and
Traballo was not yet formally concluded, Reyes decided to approach
anew Riviera. For this purpose, he requested his nephew, Atty.
Estanislao Alinea, to approach Angeles and find out if the latter was
still interested in buying the subject property and ask him to raise his
Civpro/rule 2 & 3/mpperez
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15. Thereafter, Riviera sought from Reyes, Cypress and Cornhill a resale
of the subject property to it claiming that its right of first refusal under
the lease contract was violated. After several unsuccessful attempts,
Riviera filed the suit to compel Reyes, Cypress, Cornhill and Urban
Development Bank to transfer the disputed title to the land in favor of
Riviera upon its payment of the price paid by Cypress and Cornhill.
16. Following trial on the merits, the trial court dismissed the complaint of
Riviera as well as the counterclaims and cross-claims of the other
parties.
17. Dissatisfied with the decision of the trial court, both parties appealed
to the Court of Appeals. However, the appellate court, through its
Special Seventh Division, rendered a Decision dated June 6, 1994
which affirmed the decision of the trial court in its entirety.
18. From this decision, Riviera filed a motion for reconsideration, but the
appellate court denied the same.
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2.
3.
4.
5.
6.
the lessee is given aright of first refusal should the lessor decide to
sell the property during the terms of the lease.
Such property was subject of a mortgage executed by Reyes in favor
of Prudential Bank. Since Reyes failed to pay the loan with the bank, it
foreclosed the mortgage and it emerged as the highest bidder in the
auction sale.
Realizing that he could not redeem the property, Reyes decided to sell
it and offered it to Riviera Filipina for P5,000/sqm. However, it
bargained for P3,500/sqm. Reyes rejected such offer. After 7 months,
it again bargained for P4,000/sqm, which again was rejected by
Reyes who asked for P6,000/sqm price. After 2 months, it again
bargained for P5,000/sqm, but since Reyes insisted on P6,000/sqm
price, he rejected Riviera's offer.
Nearing the expiry of the redemption period, Reyes and Traballo (his
friend) agreed that the latter would buy the same for P5,300. But such
deal was not yet formally concluded and negotiations with Riviera
Filipina once again transpired but to no avail.
In 1989, Cypress and Cornhill Trading were able to come up with the
amount sufficient to cover the redemption money, with which Reyes
paid to Prudential Bank to redeem the property. Subsequently, a Deed
of Absolute Sale was executed in favor of Cypress and Cornhill for
P5.4M. Cypress and Cornhill mortgaged the property in favor of Urban
Dev. Bank for P3M. Riviera Filipina filed a suit against Reyes, Cypress
and Cornhill on the ground that they violated its right of first refusal
under the lease contract.
RTC ruled in favor of Reyes, Cypress, and Cornhill. On appeal, CA
affirmed the decision of the RTC.
7.
Ang vs. Ang
FACTS:
On September 2, 1992, spouses Alan and EmAng (respondents)
obtained a loan in the amount of US$300,000.00 from Theodore and
Civpro/rule 2 & 3/mpperez
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Page 25
FORTUNE MOTORS v CA
FACTS: On March 29,1982 up to January 6,1984, private respondent
Metropolitan Bank extended various loans to petitioner Fortune
Motors in the total sum of P32,500,000.00 (according to the borrower;
or P34,150,000.00 according to the Bank) which loan was secured by
a real estate mortgage on the Fortune building and lot in Makati,
Rizal.
Due to financial difficulties and the onslaught of economic recession,
the petitioner was not able to pay the loan which became due.
For failure of the petitioner to pay the loans, the respondent bank
initiated extrajudicial foreclosure proceedings. After notices were
served, posted, and published, the mortgaged property was sold at
public auction for the price of P47,899,264.91 to mortgagee Bank as
the highest bidder.
The sheriff's certificate of sale was registered on October 24, 1984
with the one-year redemption period to expire on October 24,1985.
On October 21, 1985, three days before the expiration of the
redemption period, petitioner Fortune Motors filed a complaint for
annulment of the extrajudicial foreclosure sale alleging that the
foreclosure was premature because its obligation to the Bank was not
yet due, the publication of the notice of sale was incomplete, there
was no public auction, and the price for which the property was sold
was "shockingly low".
The motion was opposed by petitioner Fortune Motors alleging that its
action "is a personal action" and that "the issue is the validity of the
extrajudicial foreclosure proceedings" so that it may have a new one
year period to redeem.
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While it is true that petitioner does not directly seek the recovery of
title or possession of the property in question, his action for annulment
of sale and his claim for damages are closely intertwined with the
issue of ownership of the building which, under the law, is considered
immovable property, the recovery of which is petitioner's primary
objective. The prevalent doctrine is that an action for the annulment or
rescission of a sale of real property does not operate to efface the
fundamental and prime objective and nature of the case, which is to
recover said real property. It is a real action. Respondent Court,
therefore, did not err in dismissing the case on the ground of improper
venue (Sec. 2, Rule 4) which was timely raised (Sec. 1, Rule 16).
Page 27
HELD: MANILA. It is clear that the case for damages filed with the
city court is based upon tort and not upon a written contract. Section 1
of Rule 4 of the New Rules of Court, governing venue of actions in
inferior courts, provides in its paragraph (b) (3) that when "the action
is not upon a written contract, then in the municipality where the
defendant or any of the defendants resides or may be served with
summons."
Settled is the principle in corporation law that the residence of a
corporation is the place where its principal office is established. Since
it is not disputed that the Clavecilla Radio System has its principal
office in Manila, it follows that the suit against it may properly be filed
in the City of Manila.
As stated in Evangelista vs. Santos, et al., supra, the laying of the
venue of an action is not left to plaintiff's caprice because the matter is
regulated by the Rules of Court. Applying the provision of the Rules of
Court, the venue in this case was improperly laid.
Young Auto Supply vs. Court of Appeals
Facts: On 28 October 1987, Young Auto Supply Co. Inc. (YASCO)
represented by Nemesio Garcia, its president, Nelson Garcia and
Vicente Sy, sold all of their shares of stock in Consolidated Marketing
& Development Corporation (CMDC) to George C. Roxas. The
purchase price was P8,000,000.00 payable as follows: a down
payment of P4,000,000.00 and the balance of P4,000,000.00 in four
postdated checks of P1,000,000.00 each. Immediately after the
execution of the agreement, Roxas took full control of the four
markets of CMDC. However, the vendors held on to the stock
Civpro/rule 2 & 3/mpperez
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